Tag Archive for: government

Politics Worsens Racial Divides — Markets Can Mend Them by Jeffrey A. Tucker

Do you know what inspired the great Frederick Douglass finally to escape from slavery? He was working for a man in Baltimore, Maryland, and getting paid at the end of the day. He took his earnings to his master, who then decided how much Douglass could keep. This struck him as inherently unjust, a wicked symbol of servitude.

He fled to freedom because he wanted to realize and retain his full value in the marketplace. Effectively, he cut out the middle man, the coercive hand that presumed to control his life and property. It was then that he truly began to live a full life.

So it has been since slavery finally was finally abolished in the United States. Markets and commercial culture have been the respite from servitude, the enabler of social peace, the means by which justice is realized, and a source of empowerment for all peoples. Markets turn tension to harmony, injustice to personal fulfillment.

But when government intervenes, much like the role of Douglass’s master, it creates conflict, unfairness, and harms people’s capacity to work toward a more peaceful and prosperous world.

This is the message I gain from a poll released last week. It reveals that both blacks and whites think race relations are generally bad, and by wide margins. In general, two-thirds of survey respondents say that people are not getting along and that tension is high.

The striking fact: This is the reverse of what people believed in the days after the election of Barack Obama, the nation’s first black president.

American civic culture has always treated the presidency as some kind of mystical pinnacle, a beautiful bellwether of where we are as a people and where we are headed as a country. The idea is that we all look to the great man to set the tone and shape the character of us as a people.

Surely, then, because most everyone but a few trolls wants peace, understanding, and cooperation between blacks and whites, the best path forward is to elect a person of color. Surely that will fix something. Right?

Of course it did not. It’s one thing to observe little improvement in these poll numbers but it is quite something else to see them flip to reveal more despair than ever.

During Mr. Obama’s 2008 campaign, nearly 60 percent of blacks said race relations were generally bad, but that number was cut in half shortly after he won. It has now soared to 68 percent, the highest level of discontent among African Americans during the Obama years and close to the numbers recorded in the aftermath of the massive riots that followed the 1992 acquittal of Los Angeles police officers charged in the beating of Rodney King.

The presumption that a black presidency would repair the US race problem trivializes the on-the-ground reality. It presumes that people will respond to symbolism, to identity, to the perception of a new form of power-sharing in society, regardless of reality. Something similar is emerging in the case ofHillary Clinton: her womanness will surely bring new forms of gender justice and therefore harmony between the sexes. Based on the experience with Obama, we can look forward to a similar shot of optimism followed by a dramatic reversal of fortunes.

But let’s dig just a bit deeper into the polls, because it reveals something interesting. Though the news was buried in the story, the polls show a huge chasm between people’s macro and micro perceptions. It turns out that when people are asked about their own communities, which is to say their own lives, the picture is much brighter. Fully 77% said that race relations are good at this level — a number that has not changed in 20 years.

In other words, in terms of people’s experiences in daily life, we find evidence that both blacks and whites get along pretty well. And what does this mean? How do the races typically encounter each other in their own lives? Mostly it is through commercial settings. Shopping, trading, working, and engaging in all the normal activities of life, people find common interests despite their differences. Or it takes place in our social lives: at our houses of worship, the community pool, the neighborhood barbecue. On this very human level, it would appear that matters are better.

So in what respect do people perceive problems? It is when they reflect on the larger picture, which usually involves perceptions of politics and official institutions. Here is where differences manifest themselves. And in this respect, what has changed so dramatically over the past six years to signal new levels of racial tension? It is in the new every day: It is the treatment of blacks by civic institutions, meaning cops and criminal justice in particular. Here lies a major source of the problem.

You can see this in the data too. Here are the charts on how police treat people by race.

These are wide disparities. Among whites, 82% feel safe concerning the police, but only 58% of blacks say the same. Only 5% of whites believe that they have been singled out by police because of their race. Among blacks, 41% believe that — which is quite high (though not as high as I might have expected).

The polls are surely affected by the daily barrage of YouTube videos coming out that show horrendous treatment of black people by police. For white Americans, this has been a remarkable parade of injustice, causing a serious consciousness-raising on the part of every white person I know. Everyone has noticed has much more militarized policing has become over the last couple decades, but the problem is felt particularly intensely by blacks, who are disproportionately harmed by harassment and abuse.

My friend T.K. Coleman, who is black, posted a note a few days ago about his own experience. He and his wife were detained, handcuffed, and questioned for absolutely no reason. His account is harrowing.

He concludes:

There’s this naive idea floating around that people should never be afraid of cops as long as they’re innocent and compliant. For a lot of people in this country, that’s simply not true. …

But if we want to have intelligent discussions about authority in this country, we have to stop using a logic that tells us that people in authority always have a fair reason for doing what they do. We do a lot of talking about what people can do to avoid being abused by cops.

We don’t talk as much as we should about the abuse that happens to people who follow all those instructions. If we can’t question authority, we are doomed.

What we can tease out of these polls is the single most striking fact about human relationships. When they are politicized, and when we rely on government to rule our associations with others, the result is less harmony and more tension and injustice. But when we let go and let voluntary human associations take over, letting people trade and keep property and make decisions for themselves and cooperate as equals, we see progress toward what most everyone wants: peace, harmony, and mutually beneficial engagement.

The implications of this realization are epic. For hundreds of years, governments at all levels have been interfering in race relations, favoring or disfavoring one group or another, sometimes in petty ways and other times in egregious ways. In taking this path, governments have done no one any favors. And today, government remains the single biggest obstacle towards a more harmonious social life of inclusion and free association.

In these last days of his presidency, Obama has finally turned his attention to the problem of criminal justice and the horrible problem of prisons. Finally! I have no reason to doubt his sincerity, even if it turns out to be too little and too late. To the extent he manages to reform the system, removing the boot from the neck just a bit, he will have made his greatest contribution toward racial reconciliation.

In the long run, no one benefits from top-down control. If we are to forge good lives and good communities for ourselves, it is going to be by deferring to the emergent processes of social and economic engagement, one person at a time. Government divides people; markets bring us together.

Frederick Douglass made a courageous decision to seek his own freedom as a path to realizing his highest value in this world. He did this by saying no to the master who presumed to rule his life and property. So must we all.


Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World. Follow on Twitter and Like on Facebook.

What Should Libertarians Think about the Civil War? by Phillip Magness

The current national debate over the display and meaning of the Confederate battle flag has reopened a number of longstanding arguments about the meaning of the American Civil War, including within libertarian and classical liberal circles.

Because of its emotional subject matter, lasting political legacies of race and slavery, transformative effects upon American constitutionalism, and sheer magnitude as the most destructive military episode ever to occur on American soil, the Civil War exhibits strong tendencies toward politicization in the modern era.

Unfortunately, bad history often accompanies this politicization, and libertarians are by no means immune from this tendency.

Two common interpretations of the Civil War stand out as particularly problematic:

  1. libertarian support for the Confederacy; and
  2. libertarian support for the Union.

The Problem with Pro-Confederate Libertarianism

The first and perhaps best known “libertarian” approach to the Civil War attempts to find sympathy with the defeated Confederacy because of its resistance to the federal government and northern military authority or its professed cause of free trade and political self-determination.

Some aspects of this position have intuitive appeal that produces sympathy for the Confederate cause: it professes outrage against a Union that is said to have conquered by force, trampled on the rights of states and individuals, unleashed a military invasion, suspended civil liberties, denied government by consent, elevated Lincoln to a “dictator,” and effected a lasting centralization of federal power. In this view, the Union cause and victory is the foundational work for the modern state and all that is anathema to political libertarianism.

This interpretation falters in what it neglects: slavery.

This is no small irony, either, as the anti-slavery cause was arguably the preeminent political occupation of libertarianism’s classical liberal antecedents. A continuum of classical liberal thinkers from Adam Smith to John Stuart Mill and J.E. Cairnes forged the main intellectual case against the slave system.

Abolitionism was also always a preeminent political cause of liberalism, extending from 18th-century statesman Charles James Fox to the 19th century’s Richard Cobden in Great Britain and strongly influencing such figures as William Lloyd Garrison, Lysander Spooner, and Frederick Douglass in the United States.

This is no small matter for the libertarian intellectual tradition either, for in sidestepping the slave question’s intimate connection to the Confederacy, pro-Confederate libertarians also inadvertently abandon what is perhaps the single most important and beneficial contribution that classical liberalism has made to the human condition: the abolition of slavery.

This is not to suggest that libertarian defenders of the Confederacy share its historical affinity for chattel slavery or the plantation system. Rather, they are guilty of turning a tin ear to the one unequivocally beneficial outcome of the war in the permanent destruction of American slavery.

The Problem with Libertarian Unionism

A smaller set of libertarians gravitate to a second common interpretation of the Civil War, defined primarily by its consequential outcome.

Unlike the pro-Confederate position, these libertarian defenders of the North are keenly aware of both the centrality of slavery to the conflict as well as the importance of the abolitionist cause to the liberal intellectual tradition. Standing as a direct antithesis to the pro-Confederate arguments, these faute de mieux Unionists recognize the inherent and fundamental contradiction between slavery and human liberty.

Their position embraces the Union victory on a consequentialist acceptance of the resulting emancipation of the slaves, and disavows any conceivable association between libertarian thought and a brutish Southern slavocracy, born of no other motive or purpose but to entrench and expand that pernicious institution — and deserving of nothing short of a violent and warring elimination by any means or justification.

The argument is both morally appealing and marked by its clarity, but it also suffers from its Manichean simplicity and a tendency to read an inevitable “irrepressible conflict” into the hindsight of the Civil War’s destruction.

This view recognizes slavery and celebrates its abolition, but it tends to neglect or even rationalize the war’s uglier features and consequences: a dramatic weakening of the constitutional federalism laid out in 1787, a rapid acceleration of the scope and power of the federal government, a precedent-setting assault on habeas corpus and expansion of presidential war powers that persists to the present day — and the horrendous destruction itself.

Measured by deaths alone, current estimates place the war’s military toll at 750,000 soldiers. Civilian deaths are more difficult to estimate, though the most common number given is 50,000. And perhaps most telling of all, between 60,000 and 200,000 slaves likely perished as a result of disease and displacement caused by the war.

Why a New Interpretation Is Necessary

Where then does this leave the conscientious libertarian in assessing the Civil War’s legacy?

To address the faults of both the pro-Confederate and pro-Union positions, I’ll offer two propositions for libertarians to consider:

  1. One needn’t be for the Union to be against slavery.
  2. One needn’t be for the Confederacy to object to the North’s prosecution of the war.

Stated differently, a morally consistent libertarian view of the war should strive to dissociate itself from the political actors that waged it, while also seeking to recognize its consequences, both positive and negative.

This much may be seen in the faults of the two views described above. Libertarians who embrace the Confederacy are more often than not reasonably aware of both the evils of slavery and the distinction between the abolitionist cause and the Union.

But they neglect the second rule; because of their distaste for the Union’s wartime policies, they stake their claim to a Confederate cause that, whether they admit it or not, thoroughly attached itself to the moral abomination of slavery.

And libertarians who embrace the Union are also usually aware of the objections one might lodge against its indulgences in unrestricted warfare, suspension of civil liberties, centralization of power, or any of the other charges often made against the Union’s wartime cause or its outcome.

But they thoroughly subordinate these objections to the greater moral purpose of emancipation — a focus that obscures all but the most simplistic reading of the war’s other political and constitutional consequences.

In each argument, the problem is not its primary emphasis, but the complexities it obscures or leaves out.

In place of both views, and in recognition of their deficiencies, libertarians might develop a better appreciation for the Civil War’s complexity by turning their analysis to the nature of the ruinous agency of the conflict itself.

War, whether waged to hold human beings in bondage or subjugate a political rebellion, is a consciously coercive action of the political state in its most expansive and direct form. And armed warfare, as both the Union and Confederacy came to discover across four destructive years, is horrifically messy, unpredictable, and destructive of human life and human liberty.

Military goals and political motives also matter, as they define the objectives of the armies and prioritize their execution. Thus, a military maneuver to capture an opposing political capital will take a very different form from one that eschews political objectives and seeks to maximize the liberation of slaves or the protection of civilians.

There may also be small glimpses of just action amongst individual participants in a far more ambiguous conflict. When the abolitionist Thomas Wentworth Higginson raised the 1st South Carolina Volunteers, an all-black unit composed of escaped slaves, there is little doubt that they were fighting for emancipation, even as larger Union war goals moved far more slowly on this objective.

There is similarly little doubt about the motive of some Southerners who fought for their homes and families as hostile armies marched through their states; even a handful of Confederates — Patrick Cleburne, Duncan Kenner — pressed their government (in vain) to consider emancipation as a means of securing independence.

These graces on the periphery tell us more about the conflict’s moral complexity than anything that may be found in its political objectives. History is not a Manichean struggle between pure good and evil; we are not served by filtering its conflicts through a dualistic moral lens.

Instead of looking for a “side” to champion, we are better served by recognizing that even amid the unbridled horrors of slavery and the devastation of war, there may still be a few who are fighting for something better than their country’s cause.

Phillip Magness

Phil Magness is a policy historian and academic program director at the Institute for Humane Studies.

Slate Writer: Freedom to Remove Eyebrow Hair Will Make Texas a “Dangerous” Place by Evan Bernick

Texas Court rules that regulations have to make some kind of sense; chaos is imminent.

It’s a tremendous victory for individual rights and for the politically powerless. And progressives are terrified of it.

Over at Slate, Mark Joseph Stern warns that a Texas Supreme Court decision invalidating a requirement that commercial eyebrow threaders undergo 750 hours of training — 320 of which were admittedly unrelated to threading — will plunge Texas into a Dickensian nightmare, where judges will have free reign to strike down humane and necessary laws designed to protect workers.

Stern’s histrionics should not be taken seriously. The Texas Supreme Court did its job, insisting upon a rational, evidence-based explanation for restrictions on liberty that is protected by the Fourteenth Amendment as well as by the Texas Constitution.

As Justice Don Willett explains in an erudite and inspiring concurrence, “The Court’s view is simple, and simply stated: Laws that impinge your constitutionally protected right to earn an honest living must not be preposterous.”

Such judicial engagement is required to protect what liberal Justice William O. Douglas once referred to “the most precious liberty man possesses.”

Although eyebrow threading, a traditional South Asian practice, consists only in using cotton thread to remove eyebrow hair, Texas roped the threaders under the same licensing requirements that are applied to conventional cosmetologists who perform a wide variety of services such as waxing, makeup, and chemical peels.

The Texas Department of Licensing and Regulation issued $2,000 penalties to threaders across the state and ordered them to quit their jobs until they completed 750 hours of coursework (not a second of which is devoted to eyebrow threading) in private beauty schools, costing between $7,000 and $22,000, and pass two examinations (neither of which tests eyebrow threading).

In 2009, threaders Ashish Patel, Anverali Satani, Nazira Momin, Minaz Chamadia and Vijay Yogi challenged the requirements under the Due Course of Law Clause of the Texas Constitution. Like the Due Process of Law Clauses of the federal Constitution, Texas’ Due Course of Law Clause prohibits deprivations of liberty that do not serve any legitimate, public-spirited end of government.

The recent decision drew from the history of the state’s Due Course of Law Clause provision, which took its current form in 1875 — at a time when the Supreme Court was examining legislation under the Fourteenth Amendment’s Due Process of Law Clause for a “real or substantial” relationship to public health and safety. From this, the Texas Supreme Court determined that reviewing courts must “consider the whole record, including evidence offered by the parties” in evaluating laws, rather than taking the government’s professions of good intentions at face value.

It went on to evaluate the regulation at issue, emphasizing that, by the state’s own concession, “as many as 320 of the curriculum hours are not related to activities threaders actually perform.” Breaking this down, the Court explained that threaders are required to undergo “the equivalent of eight 40-hour weeks of training unrelated to health and safety as applied to threading.”

Combined with the fact that would-be threaders have to pay for the training and at the same time lose the opportunity to make money threading eyebrows, the court concluded that the regulations imposed an unconstitutionally oppressive burden.

As the court recognized, determining whether the government regulations are constitutionally legitimate, based on record evidence and their real-world effect, can never be a mechanical process. But it is essential to limited government.

Otherwise, there is nothing that would prevent the government from forcing threaders to take, say, 1,500, or 2,500 hours of training unrelated to threading, run marathons, or dig ditches before being certified. Judges would have to rubber-stamp such regulations and tell hardworking entrepreneurs to take it up with their local legislators.

Indeed, that is what happens all too often in cases in which the “rational basis test” is applied in federal courts. So deferential is this “test” in practice that, in the case that ended up before the Supreme Court in Obergefell v. Hodges, the same-sex marriage case, the Sixth Circuit Court of Appeals had held that the government may treat people differently for any plausible reason, even pure favoritism.

Remarkably, Stern seems comfortable with that outcome, and laments that the Texas Supreme Court vindicated the threaders’ rights. He advances two arguments against the decision, both of which are unconvincing; indeed, the second is so unconvincing that it is hard to believe that even Stern is convinced by it.

Stern first argues that the “liberty” protected by the Fourteenth Amendment’s Due Process of Law Clause (and Texas’ Due Course of Law Clause) is properly understood to encompass only a small handful of rights “relating to personal dignity and autonomy,” like “marriage and intimacy.”

This interpretation flies in the face of constitutional text, history, and the logic of the Supreme Court’s most recent decision on the subject.

The Due Process of Law Clause refers only to “liberty” — it does not distinguish between “personal” liberty and “economic” liberty, nor do most people neatly divide their lives between activities that are purely “personal” and those that are purely “economic.” (Which category would a dinner date fall under? Does it matter what happens later on?)

After the ratification of the Reconstruction Amendments, state courts and, later, the Supreme Court interpreted the Fourteenth Amendment to encompass a wide variety of actions that individuals can take without violating the rights of others.

Thus, in Meyer v. Nebraska (1923), the Supreme Court explained that liberty “denotes not merely freedom from bodily restraint, but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience.”

The logic of the Court’s most recent “substantive due process” decision tracks this comprehensive understanding of liberty. In Obergefell v. Hodges, which Stern invokes, Justice Kennedy begins by stating that “[t]he Constitution promises liberty to all within its reach, a liberty that includes certain specific rights that allow persons, within a lawful realm, to define and express their identity.”

Few things are more central to defining and expressing our identity and, indeed, sustaining our very lives, than our work. As Professor Laurence Tribe has put it, “the determination of one’s vocation” is an “essential aspect of personhood.”

Stern next argues that even if Texas’s oppressive regulatory scheme “may be a problem” for eyebrow threaders, it is a purely “legislative problem” — not one with which the courts should be concerned. He submits that the threaders could easily solve this problem through the democratic process, “by petitioning the legislature to reduce their training hours.”

Stern is apparently unaware that most of the threaders involved in this case were non-citizen immigrants. Is Stern also unaware that American history is rife with examples of entrenched interests — that is, white males — using their political muscle to prevent newly freed blacks, women, and immigrant groups from entering into or effectively competing in the labor market?

In several key cases (including Lochner v. New York (1905), which Stern disparages), the Supreme Court struck down laws designed to keep immigrants (like the threaders in Texas) from competing against native-born whites.

Even today, although the Supreme Court has declared it is unconstitutional to require full citizenship and exclude legal permanent residents, some states still have licensing laws that restrict certain nongovernmental professions to citizens only. A growing body of Public Choice research documents the reality of special-interest lawmaking designed to benefit established firms at the expense of their competitors and the general public.

But of course, Stern knows that regulations passed in the name of public health and safety are sometimes pretextual and that those burdened by them are often in no position to persuade those responsible for them to “fix” them — indeed, he recently criticized the Fifth Circuit Court of Appeals for upholding regulations of abortion providers that are purportedly designed to protect public health and safety. So apparently some vocations are more equal than others, in Stern’s view.

Thanks to the Texas Supreme Court’s decision in the threading case, Texans are, as Justice Willett put it, “doubly blessed.” Two years ago, the Fifth Circuit Court of Appeals, which also has jurisdiction over federal courts in Texas, struck down a regulatory scheme targeting casket sales in Louisiana, rejecting the state’s “nonsensical explanations” for the scheme after finding them to be factually baseless.

Recently, a federal district court (in a case that Stern does not mention but presumably disapproves of), following the Fifth Circuit, struck down a law requiring African hairbraiders like Isis Brantley to spend thousands of hours taking useless classes and thousands of dollars on useless equipment before they would be permitted to teach hairbraiding at their own schools.

Thus, federal courts and state courts in Texas are committed to judicial engagement in economic liberty cases. In his concurrence, Justice Willett quotes Frederick Douglass, whose account of earning his first two dollars as a free man puts a human face on the right to earn a living that those who read it are unlikely to forget.

For all those whose emotions swell at Douglass’ recognition that “my hands were my own, and could earn more of the precious coin,” and value the freedom that he held so precious, this decision is nothing to be afraid of — it is a cause for celebration.

Cross-posted from HuffPo.


Evan Bernick

Evan is the Assistant Director of the Center for Judicial Engagement at the Institute for Justice, a libertarian public interest law firm.

The Ghosts of Spying Past by Gary McGath

In the 1990s, the Clinton administration fought furiously against privacy and security in communication, and we’re still hurting from it today. Yet people in powerful positions are trying to commit the same mistakes all over again.

In the early days, the Internet was thoroughly insecure; its governmental and academic users trusted each other, and the occasional student prank couldn’t cause much damage. As it started becoming available to everyone in the early ‘90s, people saw the huge opportunities it offered for commerce.

But doing business safely requires data security: If unauthorized parties can grab credit card numbers or issue fake orders, nobody is safe. However, the Clinton administration considered communication security a threat to national security.

Attorney General Janet Reno said, “Without encryption safeguards, all Americans will be endangered.” She didn’t mean that we needed the safeguard of encryption, but that we had to be protected from encryption.

In a 1996 executive order, President Clinton stated:

I have determined that the export of encryption products described in this section could harm national security and foreign policy interests even where comparable products are or appear to be available from sources outside the United States, and that facts and questions concerning the foreign availability of such encryption products cannot be made subject to public disclosure or judicial review without revealing or implicating classified information that could harm United States national security and foreign policy interests.

The government prohibited the export of strongly secure encryption technology by calling it a “munition.” Putting code on the Internet makes it available around the world, so the restriction crippled secure communication. The Department of Justice investigated Phil Zimmerman for three years for making a free email encryption program, PGP, available.

The administration also tried to mandate government access to all strong encryption keys. In 1993 it proposed making the Clipper Chip, with a built-in “back door” for government spying, the standard for serious encryption. Any message it sent included a 128-bit field that would let government agencies (and hopefully no one else) decrypt it.

But the algorithm for the Clipper was classified, making independent assessments impossible. However strong it was, it would have offered a single point to attack, with the opportunity to intercept virtually unlimited amounts of data as an incentive to find weaknesses. Security experts pointed out the inherent risks inherent in the key recovery process.

By the end of the ‘90s, the government had apparently yielded to public pressure and common sense and lifted the worst of the restrictions. It didn’t give up, though — it just got sneakier.

Documents revealed by Edward Snowden show that the NSA embarked on a program to install back doors through secret collaboration with businesses. It sought, in its own words, to “insert vulnerabilities into commercial encryption systems, IT systems, networks, and endpoint communications devices” and “shape the worldwide cryptography marketplace to make it more tractable to advanced cryptanalytic capabilities being developed by NSA/CSS.”

The NSA isn’t just a spy agency; it’s one of the leading centers of expertise in encryption, perhaps the best in the world. Businesses and other organizations trying to maximize their data security trust its technical recommendations — or at least they used to. If it can’t get the willing collaboration of tech companies, it can deceive them with broken standards.

Old software with government-required weaknesses from the nineties is still around, along with newer software that may have NSA-inspired weaknesses. There are still restrictions on the exporting of cryptography in many cases, depending on a complicated set of criteria related to the software’s purpose. Even harmless file identification software, used mostly by librarians, may have to carry a warning that it contains decryption code and might be subject to use restrictions.

With today’s vastly more powerful computers, encryption that was strong two decades ago can be easily broken today. Some websites, especially ones outside the United States that were denied access to strong encryption, still use the methods which they were stuck with then, and so do some old browsers.

To deal with this, many browsers support the old protocols when a site offers nothing stronger, and many sites fall back to the weak protocols if a browser is limited to them. Code breakers have found ways to make browsers think only weak security is available and force even the stronger sites to fall back on it. Some sites have disabled weak encryption, only to be forced to restore it because so many users have old browsers.

You’d think that by now people would understand that secure transactions are essential, but politicians in the US and other countries still want to weaken encryption so they can spy on people’s communications.

The FBI’s assistant director of counter-terrorism claims that strong encryption gives terrorists “a free zone by which to radicalize, plot, and plan.” NSA Director Michael S. Rogers has said, “I don’t want a back door. I want a front door.” UK Prime Minister Cameron says,

In extremis, it has been possible to read someone’s letter, to listen to someone’s call, to mobile communications. The question remains: are we going to allow a means of communications where it simply is not possible to do that? My answer to that question is: no, we must not.

In 2015 over eighty civil society organizations, companies, and trade associations, including Apple, Microsoft, Google, and Adobe, sent a public letter to President Obama expressing concern about such actions. The letter states:

Strong encryption is the cornerstone of the modern information economy’s security. Encryption protects billions of people every day against countless threats — be they street criminals trying to steal our phones and laptops, computer criminals trying to defraud us, corporate spies trying to obtain our companies’ most valuable trade secrets, repressive governments trying to stifle dissent, or foreign intelligence agencies trying to compromise our and our allies’ most sensitive national security secrets.

In the United States, we have a tradition of free speech, but in many countries, even mild criticism of the authorities needs to travel in secret.

A country can pass laws to weaken its law-abiding citizens’ access to cryptography, but criminals and terrorists exchanging secret messages would have no reason to pay attention to them. They can keep using the strong encryption methods that are currently available and get new software from countries that don’t have those restrictions.

Governments would gain increased ability to spy on people who follow the law, and so would free-lance data thieves, while competent criminals would still be able to communicate in secret. To crib David Cameron, we must not let that happen — again.

Gary McGath

Gary McGath is a freelance software engineer living in Nashua, New Hampshire.

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Capitalist Theory Is Better Than Socialist Reality by Sandy Ikeda

Tell someone on the left that crony capitalism is not the same as the free market and they’ll often respond that capitalism as it really exists is crony capitalism. They will say that there has never been an instance of capitalism in which government-sponsored or government-abetted cronyism didn’t play a substantial role — either through war, taxation, or slavery — in a market economy. As a result, the failings of crony capitalism — corruption, privilege, oppression, business cycles — are simply the failings of capitalism itself.

One correct response is to show that the less intervention there has been, the less corrupt, privileged, oppressive, and unstable the socioeconomic order also has been. Many would simply reiterate that, historically, laissez-faire capitalism has never existed, nor could it exist, without interventionism. They simply will not or cannot distinguish the free market from state capitalism, corporate capitalism, or other forms of the mixed economy.

Which is perhaps why some on the left have adopted the term “neoliberalism,” a perfectly good word that has come to represent an imbroglio of vaguely market-cum-corporativist views. They can’t imagine how markets could work without some form of state intervention holding it all together. And that’s probably because they reject what economist Peter Boettke calls “mainline economics,” or economics in the tradition of Adam Smith, Frédéric Bastiat, and Carl Menger, among others.

It’s frustrating, but there are two points I’d like to make. The first is that in our libertarian critiques of collectivism, we often make an argument that sounds similar to the one people on the left make. But, second, if libertarians are careful, they may be more justified in doing so.

What Is the Turnabout?

Most socialists today have abandoned their earlier claim that socialism generates greater material prosperity, but many on the left still insist that under a pure collectivist system, greater justice and equality would prevail. Socialism, in other words, is a far more humane socioeconomic order than capitalism.

How do libertarians respond to such a claim?

Sometimes we react with contempt or with disbelief that anyone could be so stupid or so evil or both as to argue such a thing. I hope no reader of theFreeman would react that way, although I’m afraid some do. Sometimes we react with slightly more civility by aiming our dismissive contempt not at the person but at the leftist ideas she holds. I will only say that we should take to heart what John Stuart Mill wrote in On Liberty about so-called bad ideas and opinions:

Every opinion which embodies somewhat of the portion of truth which the common opinion omits, ought to be considered precious, with whatever amount of error and confusion that truth may be blended.

There are other responses to the claim that socialism is more just and humane than capitalism, but I would like to focus on the one that I’ve often used: socialism in practice has always and everywhere tended to lead, to the degree that it is consistently applied, not to freedom and material well-being, but to tyranny and want. In other words, while socialism in theory may be all good things to all good people, the more government has practiced collectivism and central planning to achieve its goals of justice and equality, the farther it has fallen short of those goals. (And if you think countries such as Sweden are the exception, you might read my March 2013 Freeman article, “The New Swedish Model.”)

How is that different from the left’s position that legal privilege, oppression, and other problems are part and parcel of capitalism in practice? Each side seems to be arguing that the historical failings we’ve witnessed in each system are necessary to that system and not exceptions — features, not bugs.

A Possible Resolution

Clearly, the die-hard socialist and the die-hard libertarian argue from different fundamental principles. While there are many varieties of socialism, all are suspicious to a fairly high degree of private property, prices, and profit as the central ordering forces of society. Libertarians, too, are diverse, but I believe we all share strongly opposite views to those on the left on private property, prices, and profit as necessary (and for some libertarians, mistakenly I believe, sufficient) for a civil and prosperous society.

Socialists and indeed interventionists of all stripes also seem confident that the intentions of government authorities (especially those who have been elected) are virtuous enough and their knowledge reliable and complete enough to succeed in promoting the general welfare. In this, I think, it boils down to the underlying economics.

As a rule, libertarians use mainline economic theory to reach their conclusions about socialism and the perverse dynamics of interventionism. (There are, of course, ethical and philosophical approaches, as well.) And while interventionists and perhaps even some collectivists may believe that mainline economic theory does an okay job of framing some questions and of finding some answers to those questions, they also believe that mainline economics is far too limited to address a significant proportion of economic issues.

But the problem with such a view is that there’s no principled way to say in what circumstances mainline economics has failed. Sure, no theory of the economic system, mainline or otherwise, gets it right in every instance. We then have to look to historical evidence to clarify when, under what circumstances, and to what extent mainline economics holds up. And the historical evidence is indeed on the side of the libertarian interpretation of what collectivism and various degrees of central planning are, and of what laissez-faire capitalism is.

Indeed, the historical evidence overwhelmingly shows that social mobility, innovation, prosperity, per capita income, and per capita wealth are all tightly and positively correlated with economic freedom. And contrariwise, to the extent that economic freedom is lacking, social and economic stagnation, want, and shrinking civil rights have followed. (See, for example, the most recent publication of FreetheWorld.com.)

Someone might retort that correlation is not causation, and they would be right if there wasn’t a causal theory linking economic freedom with all those great things. But libertarians do have such a theory, and it’s called mainline economics.

Those on the left, however, don’t have a coherent theory of the mixed economy. Indeed, no such theory exists. There are several theories of so-called “market failure,” but they do not together constitute a coherent theory. What does exist is a critique of the mixed economy that is based on the realization that the ordering principle of the free market and the ordering principle of collectivist central planning are logically incompatible. One is based on open-ended entrepreneurial competition, the other on some form of constraining central planning. Interventionist approaches that attempt to combine them aren’t really systems at all. They are literally incoherent, and what makes them incoherent is the absence of a consistent ordering principle.

(My contribution to this volume [PDF] delves into this topic more deeply.)

Instead, what you’re left with, given the cognitive limits of the human mind and the spontaneous complexity of real-world systems, is expediency. Each problem is addressed not on the basis of principle, but in ad hoc fashion according to the prevailing interests of the moment. In the case of capitalism, while opportunism and cronyism do constantly pull in the direction of expediency, the force resisting that pull is entrepreneurial competition. That’s because cutting corners opens opportunities for one’s rivals to do a better job.  Moreover, that competition operates more effectively to resist and absorb all forms of intervention, crony or otherwise, the less interventionist the system is.

So while the form of the critiques of the left and of libertarians may sound similar, they are vastly different in substance.


Sandy Ikeda

Sandy Ikeda is a professor of economics at Purchase College, SUNY, and the author of The Dynamics of the Mixed Economy: Toward a Theory of Interventionism.

Did Oregon Gag the Anti-Gay Marriage Bakers? by Walter Olson

Readers who follow the battles over forfeiture law may recall the recent case in which a North Carolina convenience store owner from whom the government had seized $107,000 without any showing of wrongdoing decided to fight the case in the press as well as in court, backed by the Institute for Justice.

Lyndon McLellan’s decision to go public with the dispute drew a menacing letter from a federal prosecutor about the publicity the case had been getting:

“Your client needs to resolve this or litigate it,” Mr. West wrote. “But publicity about it doesn’t help. It just ratchets up feelings in the agency.” He concluded with a settlement offer in which the government would keep half the money.

That case ended happily, but the problem is much broader: many individuals and businesses fear that if they seek out favorable media coverage about their battle with the government, the government will find a way to retaliate, either informally in settlement negotiations or by finding new charges to throw against them.

That such fears might not be without foundation is illustrated by last week’s widely publicized Oregon cake ruling, in which a Gresham, Oregon couple was ordered to pay $135,000 in emotional-distress damages for having refused to bake a cake for a lesbian couple’s commitment ceremony.

Aside from the ruling’s other objectionable elements, the state labor commissioner ruled it “unlawful” for the couple to have given national media interviews in which they expressed sentiments like “we can see this becoming an issue and we have to stand firm.”

Taking advantage of an exception in free speech law in which courts have found that the First Amendment does not protect declarations of future intent to engage in unlawful discrimination, the state argued — and its commissioner agreed — that the “stand firm” remark along with several similarly general comments rallying supporters were together “unlawful.”

That ought to bother anyone who cares about free speech. I’ve got a piece up at Ricochet.com, my first there, exploring the question in more detail:

Suppose someone began a sentence with the words “I don’t think I should have to serve [group X] at my shop….”

If they follow with the words “but since it’s the law, I’ll comply,” the sentence as a whole would clearly count as protected speech under current law. If they follow with the words “and I won’t, law or no law,” it loses protection.

But suppose the speaker were to end the sentence at “…my shop.” Up to that point, the speaker has expressed only an essentially political opinion, not a forward-looking intention to defy the law.

Such speech is all the more of core First Amendment interest when it takes place not in a local, commercial context but as part of broader political discussions between citizens as to whether laws are unjust or government too heavy-handed.

Read the rest here.

Walter Olson

Walter Olson is a senior fellow at the Cato Institute’s Center for Constitutional Studies.

RELATED ARTICLE: Hypocrisy ALERT: Gay Bakeries Refuse to Make Pro-Christian Cakes [+Videos]

EDITORS NOTE: This piece cross-posted from Cato at Liberty and Overlawyered.

Celebrate Independence With a Revolution Against the Surveillance State by Ryan Hagemann

In the decade before 1776, British courts began issuing “writs of assistance” for the general search and seizure of colonists’ documents. The intention was to permit British troops to inspect properties for smuggled goods, but these writs gave officials broad power to enter private homes to search for, and seize, anything and everything that might be considered contraband by the British Empire.

Such general warrants were among the many complaints the colonists levied against the crown and played no small part in the American Revolution.

This Independence Day, it would behoove us all, as Americans, to reflect on the motivations for the colonists’ revolt against Britain. In a 2013 piece at the Huffington Post, Radley Balko spoke on the core meaning of the Fourth of July:

Independence Day isn’t for celebrating the American government and whoever happens to be currently running it, but for celebrating the principles that make America unique.

And in fact, celebrating the principles that [animated] the American founding often means celebrating the figures who have defended those principles in spite of the government.

The list of modern Americans who have stood as stalwart guardians of the principles of liberty is regrettably short. More concerning, however, is what has happened in the years since 9/11, as fear and paranoia over terrorism gripped the American electorate and absconded with many of the basic liberties that the founding generation fought and died to uphold. America just isn’t what it used to be.

But the tides of unrestrained surveillance seem to be receding.

A few weeks ago, thanks to a vibrant and broad coalition of civil libertarians, grassroots organizations, and cross-aisle partners, America finally took the first step in reining in the secret surveillance state that Edward Snowden revealed to us almost two years ago to the day. The USA FREEDOM Act, for all its flaws, stands as the most significant piece of surveillance reform legislation since 1978 and signals Congress’s willingness to work on surveillance reform.

While there is much to do in preparing for upcoming battles over government surveillance, a look back at recent events can help shed light on how we as libertarians can best move forward.

Not surprisingly, the debate left some dissatisfied that the reforms did not go far enough, while others considered anything short of a full USA PATRIOT Act reauthorization to be an unacceptable compromise.

Filled with riotous rhetorical broadsides, the debate featured civil libertarians supporting reform against civil libertarians backing a complete, uncompromising end to the surveillance state, pitting Republican hawks against centrists and Democrats, and Sen. Rand Paul against pretty much everyone.

In a story of strange political bedfellows, Sen. Paul joined hawks such as Sen. John McCain and Sen. Richard Burr in voting against the USA FREEDOM Act. While Paul criticized components of the bill for not going far enough (all criticisms being perfectly fair and true), the political reality was such that this bill, however imperfect, was by far the best chance for reform in the near term.

As Cato’s Julian Sanchez noted prior to its passage: “While ‘Sunset the Patriot Act’ makes for an appealing slogan, the fact remains that the vast majority of the Patriot Act is permanent — and includes an array of overlapping authorities that will limit the effect of an expiration.”

In other words, the limitations of USA FREEDOM would actually be more effective than simply letting a two or three provisions of the USA PATRIOT Act (temporarily) expire.

The heroes of this debate were a broad coalition of civil-society groups, technology firms, and nonprofits dedicated to moving the ball forward on reform, no matter how small the gain.

However, even as some are celebrating this small but important victory, there are troubled waters ahead for privacy advocates and civil libertarians. The upcoming Senate vote on the Cybersecurity and Information Sharing Act (CISA) is the next battle in the ongoing war against the surveillance apparatus. If passed, it would be one step forward, two steps back for the small victories privacy advocates have won over the past month.

I’ve written quite a bit on the issues that many civil libertarian organizations have with CISA, which is little more than a surveillance Trojan Horse containing a host of “information-sharing” provisions that would allow intelligence agencies to acquire information from private firms and use it to prosecute Americans for garden-variety crimes unrelated to cybersecurity, due process be damned.

A broad coalition of organizations has once more come together, this time to oppose CISA, to continue the battle against expanding the surveillance state.

In public policy, the Overton window refers to the spectrum of policy prescriptions and ideas that the public views as tolerable: the political viability of any idea depends not on the personal preferences of politicians, but on whether it falls within the range of publicly acceptable options.

That is why a willingness to compromise is so vital in public-policy discussions. Marginal reforms should be seen as victories in the slow but consistent effort to rein in the excesses of our Orwellian security order.

USA FREEDOM is far from ideal, and the expiration of provisions of the PATRIOT Act, such as Section 215, will not stop government surveillance in its tracks. The government can still use National Security Letters (NSL), and Section 702 of the FISA Amendments Act can still be creatively interpreted by the intelligence community to justify continued mass surveillance, to say nothing of Executive Order 12333, which covers surveillance conducted outside of the United States.

Nonetheless, the new law is an important first step towards tearing down the most onerous provisions of the PATRIOT Act in a piecemeal fashion. This may seem a daunting and less-than-ideal approach for many libertarians, but the alternative is merely symbolic gesticulation.

So where do we go from here?

Libertarians need to start working with nontraditional allies to support, on an issue-by-issue basis, real, practical reforms to the surveillance state. If we do not, we cannot hope to be effective and valuable partners to those individuals and organizations working tirelessly in support of the same values and freedoms that we all hold dear.

We must also recognize that there are limitations to compromise, and we should never forsake our core principles in favor of political expediency. But, on the margins, we can make significant contributions to civil liberties, especially in the ongoing surveillance reform debate. Recognizing the reality of what is achievable in the current political landscape is necessary for identifying and taking advantage of the available opportunities for restoring liberty.

We have a choice in the upcoming surveillance-reform fights: We can be positive contributors to a legacy of liberty for future generations, or we can continue to fancy ourselves armchair philosophers, ignoring public-policy realities and taking comfort in the echo chamber that never challenges our worldview.

Given political realities, marginal reforms constitute the fastest path forward. The American people are owed their civil liberties; hence, we must fight to move, however incrementally, towards a freer, more civil society.


Ryan Hagemann

Ryan Hagemann is a civil liberties policy analyst at the Niskanen Center.

RELATED ARTICLE: Cyber Security: Where are we now and where are we headed?

VIDEO: It’s Easy Being Green When You Have No Choice

It's Easy Being Green When You Have No ChoiceThis feature film is narrated by Brian Sussman, San Francisco radio host (KSFO) and best-selling author of Climategate: A Veteran Meteorologist Exposes the Global Warming Scam and Eco-Tyranny: How the Left’s green Agenda Will Dismantle America.

Some may say there is only circumstantial evidence and others may say it is just a coincidence, however, the 1992 Earth Summit in Rio that presented Agenda 21 and introduced sustainable development to the world as the solution to save the planet from man made global warming likely would not have happened if the Soviet Union continued to be the main rival to America and Western Civilization.

To learn more visit: www.GreenFlick.com. Watch the trailer:

To purchase a copy of the full length film click here.

A Christian Argument: Getting Government Out of Marriage | Trifecta

Can Scott Ott make an argument that Christians should support the Libertarian belief that government shouldn’t be involved in marriage? Check it out!

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Greeks Prepare to Be Pillaged by Jeffrey A. Tucker

In the world of banking, a “holiday” means you can’t get your money. It’s been a few years since we’ve seen that happen in any developed world economy, but that is exactly what the Greek government is doing, starting now, to stop a massive bank run.

Greece owes the International Monetary Fund a payment of $1.5 billion, due tomorrow, from the last time the government was bailed out. But, of course, governments can’t make wealth, and the money didn’t just magically materialize. They have to beg, borrow, and steal to get it, and Greece has finally found those limits.

Athens had hoped that it could once against tap the European Commission. But drained and fed up, other governments refused to extend yet another loan to Greece unless they agreed to reform their bloated and corrupt welfare state.

Unfortunately for Greeks, the ruling coalition in Greece swept into power in January on the platform of stopping “austerity” and rolling back budget cuts. They balked at the EU’s (and especially Germany’s) conditions for the next round of bailout money.

As a result, Athens has really and truly run out of money, and they will default on their debts starting tomorrow — and the European Central Bank has said it will cut off emergency credit to Greek banks if the government fails to pay its debts.

The news that no deal would be reached sent bank depositors into a panic, and thousands have been lined up at ATMs all over the country since Friday.

Prime Minister Alexis Tsipras announced that he was closing all banks for at least a week as a way to stem the tide. Many ATMs are empty; the rest, by government order, will only dispense €60 per person per day. The government is now imposing capital controls to stop cash from leaving the country.

One thing needs to be said about this frantic authoritarian approach: It never works. Bank closings add to the atmosphere of panic. They are often followed by an announcement that the government is going to devalue or outright steal people’s money. Whatever trust remains in the system is drained away along with the value of the currency.

But there’s another factor in play, for the first time. People are looking at Bitcoin as a way to store and move money.

There is now a Bitcoin ATM in Athens that is reportedly doing a brisk business. Redditors are sharing tips. And, of course, the exchange rate of Bitcoin is on the move again.

This past week, I was out of touch of the news entirely because I was at the New Hampshire liberty retreat, Porcfest. There you can buy almost anything with Bitcoin, so I was checking the price often. I noticed the upward price pressure, and I had an intuition that something serious was happening.

Sure enough, this morning I was awakened by a call from Russia Today. They wanted me on a two-hour segment today to talk about the meltdown in Greece. I turned them down because I haven’t followed it closely enough (though that doesn’t usually stop most commentators!).

But when I looked into it, I suddenly understood: Sure enough, Bitcoin is on the move for a reason.

Many price watchers are predicting another spike in the exchange rate if Greece actually defaults and leaves the euro. Maybe, maybe not. It actually doesn’t matter. The exchange rate can be anything; it doesn’t affect the utility of having access to a global currency and payment system that is outside regional banking systems — one that can’t be closed, controlled, confiscated, or devalued at the whim of desperate regimes.

Cryptocurrency is here to stay. It is the world’s new safe haven, displacing the role that gold once played. The reasons are rather obvious: Bitcoin is more liquid than gold. It takes up no space, weighs nothing, and is more secure. Once you are an owner, nothing can take away what you own — and you don’t have to rely on a third party such as a gold warehouse or a bank (or a government) to take care of your money.

Given all of this, there is supreme irony in the announcement made by the Greek central bank last year that consumers should be wary of Bitcoin. Bitcoin is vastly more safe and reliable than any national currency, including the euro and the dollar.

There is no government anywhere that would decline to shut the banks if their ruling class feared financial meltdown. That’s what’s happening in Greece. That could happen in any European country, and it could happen (and has happened) in the United States, too.

In the end, government regards itself as the ultimate owner of all a nation’s currency and the wealth it carries.

It’s wise to have another option, and people have long known that. The question is: What is that option? Today, not for the first time, and not for the last, Bitcoin is here to save the day.


Jeffrey A. Tucker

Jeffrey Tucker is Director of Digital Development at FEE, CLO of the startup Liberty.me, and editor at Laissez Faire Books. Author of five books, he speaks at FEE summer seminars and other events. His latest book is Bit by Bit: How P2P Is Freeing the World.

SCOTUS Says You Can Be Sued for Unintentional Discrimination by Walter Olson

Stop calling it fair housing law. If it was ever a matter of fairness, it isn’t now.

Under today’s 5-4 Supreme Court holding in Texas Department of Housing and Community Affairs v. Inclusive Communities Project, you can be held liable for housing discrimination whether or not you or anyone in your organization intended to discriminate.

Instead — to quote Justice Anthony Kennedy, who joined with the Court’s four liberals in a 5-4 majority — you might have been influenced by “unconscious prejudice” or “stereotyping” when you lent money or rented apartments or carried on appraisal or brokerage or planning functions.

What you did had “disparate impact” on some race or other legally protected group, and now you’re caught up in potentially ruinous litigation in which it’s up to you to show that you had a good reason for what you did and could not have arranged your actions in some other way that had less disparate impact.

The decision is quite broad in its implications. For example, in employment discrimination law, where disparate impact has long been legally established, it is increasingly legally dangerous to ask job applicants about criminal records, or carry out criminal background checks on them before a job offer, for fear of disparate impact.

Is it still safe to ask such questions of prospective tenants in your apartment building? Better ask your lawyer.

The case hinged on statutory interpretation, and as Justice Alito’s dissent makes clear, King v. Burwell wasn’t the only case decided today in which a majority mangled the clear meaning of a law’s text to get the result it wanted.

As Justice Ginsburg was frank enough to note at oral argument, “”If we’re going to be realistic about it…in 1968, when the Fair Housing Act passed, nobody knew anything about disparate impact.”

On the contrary, the law’s text specified that it was banning decisions taken “because of” race, and to find a loophole the majority was obliged to fall back on an incidental clause banning the making “unavailable” of a “dwelling,” which we are meant to believe snuck in a huge new area of liability.

As the majority stresses, many appeals courts did go along with a liberal interpretation. But the Executive Branch did not — in 1988 it took the position before the Court that the law did not permit disparate impact claims — while Congress hedged the issue in later enactments so as to keep all sides on board a compromise.

Despite ridiculous claims (like that in a Vox headline) that the Court today “saved” the Fair Housing Act or that a contrary decision would have “gutted” it, the great majority of litigation under the Act has been on disparate-treatment complaints (which, as Alito notes, can already use disparate impact as evidence of pretext.)

But the Obama administration, as I’ve documented elsewhere, has launched a huge effort to turn disparate-impact law into an engine of revolutionary changes in local government and housing practice, introducing, for example, such concepts as a local government obligation to pursue subsidized federal housing grants and to enact laws forcing private landlords to accept Section 8 tenants.

As the four dissenters make clear, a compliance and litigation nightmare now looms for many in real estate, finance, and local government as they try to dodge liability.

“No matter what [Texas] decides” in the case at hand on locating low-income housing, for example, one or another group “will be able to bring a disparate-impact case” based either on the theory that projects should be put in poorer areas (which enables building more of them) or in affluent areas (which will benefit some future residents).

If you have time to read only one bit of today’s opinion, read Justice Clarence Thomas’s separate dissent. Thomas brilliantly recounts the EEOC’s successful subversion of its own founding statute, culminating in the Court’s profoundly mistaken opinion in Griggs v. Duke Power, the employment case that founded disparate impact theory.

“We should drop the pretense that Griggs’ interpretation of Title VII was legitimate,” he writes. It’s a tour de force — and already being denounced vehemently on the Left.

This post first appeared at Cato.org.


Walter Olson

Walter Olson is a senior fellow at the Cato Institute’s Center for Constitutional Studies.

“The President that Couldn’t”: Why Obama’s Agenda Failed by Thomas A. Firey

With time running out on his administration, President Obama has embarked on a sort of “apology tour” to disillusioned supporters. They are frustrated that he hasn’t delivered on many of their favored policies, from gun control to single-payer health care to carbon controls.

With candidates queuing up to replace him — many with very different policy goals than his — he apparently feels the need to rally the disaffected behind a successor who would carry on his agenda.

His message to the disheartened supporters is simple: The political failures aren’t his fault. He’s tried hard to deliver, but “Congress doesn’t work” and American government “is broken.” According to Obama:

As mightily as I have struggled against that… it still is broken. … When I ran in 2008, I, in fact, did not say I would fix it. I said we could fix it. I didn’t say, “Yes, I can”; I said — what? … “Yes, we can.”

Washington Post columnist Chris Cillizza, writing about the apology tour, throws some shade at the president, claiming that he did in fact promise to change policy. But ultimately Cillizza agrees with Obama, writing that the American “political system is … more broken than any one person — no matter who that person is or the circumstances that surround that person’s election — could hope to solve.”

But both the president and Cillizza are completely wrong; the American political system assuredly is not broken. The system was designed — and we should all be very grateful that it was designed — to not allow the radical change that Obama’s supporters — or supporters of other politicians across the political spectrum — want.

It is the rare times when such change does occur — think Franklin Roosevelt’s expansion of national government or George W. Bush’s anti-terrorism initiatives and war in Iraq — that American governance had failed and very bad things happen.

Today the United States is a nation of more than 320 million remarkably different people, living in unique situations, having highly individual concerns, desires, and risk preferences, and holding a wide variety of mostly noble values. They each operate in a world of uncertainty and limited resources. Given those dramatically varied circumstances, any national policymaking is likely to harm and anger tens of millions of people.

For that reason, the Framers (who likewise lived in an incredibly diverse nation for their era) designed American government to elevate private action and decentralize governance while limiting national policy to matters of broad consensus and compromise.

Because few of the policy goals advocated by President Obama and his “progressive” supporters have such support or allow for serious compromise (even the signature item that he did manage to enact), it shouldn’t be surprising that few of those goals have been achieved. That doesn’t mean American government is broken — quite the opposite! — but rather that Obama’s conception of governance is.

Perhaps the next president will better appreciate the genius of American government’s design and work within that design for policy change that he or she believes is important. But it’s clear from President Obama’s comments that he is not up to that task.

For the reason, we should all be very grateful that, no, he couldn’t.

Thomas A. Firey

Thomas A. Firey is a Maryland Public Policy Institute senior fellow, and also is managing editor of Regulation magazine, the Cato Institute’s quarterly review of business in government.

EDITORS NOTE: This first appeared at MDpolicy.org.

Inequality: The Rhetoric and Reality by James A. Dorn

The publication of Thomas Piketty’s bestseller Capital in the Twenty-First Century has led to widespread attention on the rising gap between rich and poor, and to populist calls for government to redistribute income and wealth.

Purveyors of that rhetoric, however, overlook the reality that when the state plays a major role in leveling differences in income and wealth, economic freedom is eroded. The problem is, economic freedom is the true engine of progress for all people.

Income and wealth are created in the process of discovering and expanding new markets. Innovation and entrepreneurship extend the range of choices open to people. And yet not everyone is equal in their contribution to this process. There are differences among people in their abilities, motivations, and entrepreneurial talent, not to mention their life circumstances.

Those differences are the basis of comparative advantage and the gains from voluntary exchanges on private free markets. Both rich and poor gain from free markets; trade is not a zero- or negative-sum game.

Attacking the rich, as if they are guilty of some crime, and calling for state action to bring about a “fairer” distribution of income and wealth leads to an ethos of envy — certainly not one that supports the foundations of abundance: private property, personal responsibility, and freedom.

In an open market system, people who create new products and services prosper, as do consumers. Entrepreneurs create wealth and choices. The role of the state should be to safeguard rights to property and let markets flourish. When state power trumps free markets, choices are narrowed and opportunities for wealth creation are lost.

Throughout history, governments have discriminated against the rich, ultimately harming the poor. Central planning should have taught us that replacing private entrepreneurs with government bureaucrats merely politicizes economic life and concentrates power; it does not widen choices or increase income mobility.

Peter Bauer, a pioneer in development economics, recognized early on that “in a modern open society, the accumulation of wealth, especially great wealth, normally results from activities which extend the choices of others.”

Government has the power to coerce, but private entrepreneurs must persuade consumers to buy their products and convince investors to support their vision. The process of “creative destruction,” as described by Joseph Schumpeter, means that dynastic wealth is often short-lived.

Bauer preferred to use the term “economic differences” rather than “economic inequality.” He did so because he thought the former would convey more meaning than the latter. The rhetoric of inequality fosters populism and even extremism in the quest for egalitarian outcomes. In contrast, speaking of differences recognizes reality and reminds us that “differences in readiness to utilize economic opportunities — willingness to innovate, to assume risk, to organize — are highly significant in explaining economic differences in open societies.”

What interested Bauer was how to increase the range of choices open to people, not how to use government to reduce differences in income and wealth. As Bauer reminded us,

Political power implies the ability of rulers forcibly to restrict the choices open to those they rule. Enforced reduction or removal of economic differences emerging from voluntary arrangements extends and intensifies the inequality of coercive power.

Equal freedom under a just rule of law and limited government doesn’t mean that everyone will be equal in their endowments, motivations, or aptitudes. Disallowing those differences, however, destroys the driving force behind wealth creation and poverty reduction. There is no better example than China.

Under Mao Zedong, private entrepreneurs were outlawed, as was private property, which is the foundation of free markets. Slogans such as “Strike hard against the slightest sign of private ownership” allowed little room for improving the plight of the poor. The establishment of communes during the “Great Leap Forward” (1958–1961) and the centralization of economic decision making led to the Great Famine, ended civil society, and imposed an iron fence around individualism while following a policy of forced egalitarianism.

In contrast, China’s paramount leader Deng Xiaoping allowed the resurgence of markets and opened China to the outside world. Now the largest trading nation in the world, China has demonstrated that economic liberalization is the best cure for broadening people’s choices and has allowed hundreds of millions of people to lift themselves out of poverty.

Deng’s slogan “To get rich is glorious” is in stark contrast to Mao’s leveling schemes. In 1978, and as recently as 2002, there were no Chinese billionaires; today there are 220. That change would not have been possible without the development of China as a trading nation.

There are now 536 billionaires in the United States and growing animosity against the “1 percent” — especially by those who were harmed by the Great Recession. Nevertheless, polls have shown that most Americans think economic growth is far more important than capping the incomes of the very rich or narrowing the income gap. Only 3 percent of those polled by CBS and the New York Times in January thought that economic inequality was the primary problem facing the nation. Most Americans are more concerned with income mobility — that is, moving up the income ladder — then with penalizing success.

Regardless, some politicians will use inflammatory rhetoric to make differences between rich and poor the focus of their campaigns in the presidential election season. In doing so, they should recognize the risks that government intervention in the creation and distribution of income and wealth pose for a free society and for all-around prosperity.

Government policies can widen the gap between rich and poor through corporate welfare, through unconventional monetary policy that penalizes savers while pumping up asset prices, and through minimum wage laws and other legislation that price low-skilled workers out of the market and thus impede income mobility.

A positive program designed to foster economic growth — and leave people free to choose — by lowering marginal tax rates on labor and capital, reducing costly regulations, slowing the growth of government, and normalizing monetary policy would be the best medicine to benefit both rich and poor.


James A. Dorn

James A. Dorn is vice president for monetary studies, editor of the Cato Journal, senior fellow, and director of Cato’s annual monetary conference.

Why Is Snapchat More Secure than the Federal Government? by Andrea Castillo

Cyberhawks have seized upon this year’s massive hack of the Office of Personnel Management (OPM) to shove a wolfish surveillance bill in a sheepish cybersecurity bill’s clothing down America’s throat.

But the “Cybersecurity Information Sharing Act of 2015” (CISA) would have done nothing to stop the hack that exposed as many as 14 million federal employees’ personnel records. The pro-NSA crowd’s arguments are obvious nonsense — if anything, the OPM hack clearly demonstrates the danger of trusting incompetent government bureaucracies to manage huge datasets of sensitive personal information.

But amid all of the hubbub, these self-styled champions of strong cybersecurity — who also just happen to be anti-private encryption and pro-surveillance — have neglected to raise one important question: Why did a goofy picture-sharing app implement basic security measures before the central repository for all federal personnel data did?

This week, Snapchat announced that the private picture messaging service was offering two-factor authentication for its users. This basic measure of security helps to verify that the person logging in is indeed the legitimate owner of their account by sending out a text message with a special access code to the owner’s cell phone.

That way, a hacker must obtain both your password and your mobile phone to access and control your account. It’s simple, but simple security solutions can sometimes mean the difference between a foiled infiltration and a very, very bad day for a Snapchat user.

Of course, it is too much to expect the chief steward of federal employee information to implement such a simple policy. As the beleaguered office’s Inspector General reported last fall, OPM does not require multi-factor authentication to access its information systems.

If a careless OPM employee chose a weak and easy-to-guess password, or emailed it in plain text across an insecure channel, or merely left it on a sticky note on his or her desk (as is common practice in the federal government), than any common hacker could potentially access vast amounts of federal data.

In other words, an application for sharing pictures of wild parties and funny cats has better authentication standards than the federal government’s primary steward of millions of current and former federal employees’ and contractors’ addresses, Social Security numbers, financial information, and health records. Oh, and that of our military leadership and intelligence contacts — several of which are embedded deep undercover in dangerous missions — as well.

Hackers also accessed the feds’ cache of Standard Form 86 files for the aforementioned groups, dragging countless family members, friends, and colleagues into the databreach crossfire.

To call this a huge mess would be the second biggest understatement of the year. The biggest? That OPM’s substantial information security vulnerabilities are entirely unacceptable and directly at fault for the hack.

The OPM’s annual information security reports to Congress have admitted “material weaknesses” and “significant deficiencies” for years. The department lacked an IT team with “professional security experience and certifications”until 2013. Disgruntled employees could have merely walked off with this data if they wanted to, since OPM does not “maintain a comprehensive inventory of servers, databases, and network devices.” Nor did the OPM encrypt any of the data that the hackers stole — they might as well have just invited our forward friends in China to sweep in through the front door!

As Ars Technica’s Sean Gallagher concludes, “Considering the overall condition of OPM’s security, it’s no surprise that an attacker — almost any attacker — could gain a foothold inside the agency’s network. But attackers didn’t just gain a foothold, they had practically a free run of the networks.”

It’s true that Snapchat has hardly been a paragon of good cybersecurity in the past, as previous security vulnerabilities, breaches, misleading marketing, and the infamous “Snappening” testify. However, there is another important difference between Snapchat and the OPM that puts the humble app ahead of the mighty federal office: Snapchat has to learn from its mistakes.

As a private service provider in a hotly-competitive market that must keep its users happy to stay afloat, Snapchat moved quickly to get its security house in order after their big mistakes. They hired the former social network security leader for Google and started to build a “culture of security” within the firm.

They may still have a long way to go, but these investments and cultural prioritization are important first steps that demonstrate a proactive sense of ownership in their platform’s security. And of course, if they keep screwing up, they’ll be sued out the nose and go out of business for good.

We see no such sense of urgency with OPM. The agency received what could have been a saving wakeup call in last year, when it was discovered that Chinese hackers had accessed OPM databases in March of 2014.

OPM had the opportunity to implement simple encryption and authentication measures, tighten up their ship, and increase employee education about good data and security practices. No such luck! The office more or less continued on its merry way.

No one was fired back then and it looks like no one will get fired now. It’s government work, after all.

Unfortunately, OPM is hardly the only sucker on cybersecurity in the federal government, as my research for the Mercatus Center has found. This kind of unbelievably poor cybersecurity posture is the norm rather than the exception.

In fact, it’s hard to pick what is scarier: that the federal government operates under the digital equivalent of leaving all of their doors and windows unlocked and wide open, or that these same federal agencies want more power to manage your personal data through CISA.


Andrea Castillo

Andrea Castillo is the program manager of the Technology Policy Program for the Mercatus Center at George Mason University and is pursuing a PhD in economics at George Mason University.

Airport Pirates Loot a College Student’s Life Savings by Trevor Burrus

Today, our friends at the Institute for Justice launched a new challenge to yet another instance of egregious civil asset forfeiture abuse.

Charles Clarke is a 24-year-old college student who found out the hard way that government officials can confiscate property on the mere suspicion that it has a “substantial connection” to a crime or is the proceeds of a crime. No underlying conviction is required.

Functionally, this means that officers can claim that “something was a little off” about your behavior, or that “something smells a little like drugs” and then have carte blanche to take whatever cash you have on you. After that, your cash is presumptively guilty, and it is up to you to prove its innocence.

In the winter of 2013, Charles was stopped at the Cincinnati/Northern Kentucky airport based on the officers’ assertion that his bag smelled like marijuana. Actually, it was based off of a drug dog’s “signal” that his bag smelled like marijuana. By claiming that a dog “alerted” an officer can obtain probable cause, but in reality the dogs are about as reliable as Clever Hans.

After searching his bag, the officers found no drugs or other illegal substances. They then asked him if he was carrying any cash. Charles volunteered that he was carrying $11,000–clearly thinking, not unreasonably, that in a just world there is no way the officers could just take his money. Charles’s mistake, however, was thinking that he lives in a just world, and the officers walked away with his life savings.

Charles had saved the $11,000 over the previous five years, from work, financial aid, educational benefits, and gifts from family. Now he must overcome the officers’ hunches by proving that his money came from legal sources.

By now, hopefully you’re familiar with civil asset forfeiture. Thanks in part to the excellent work of the Institute for Justice, as well as biting commentary from John Oliver and dogged investigative journalism from the Washington Post and the New Yorker (as well as Cato’s own work), civil asset forfeiture no longer exists in the shadows, where the perpetrators would have preferred it to remain.

In a time of sharp political divides, there’s one thing we all should agree on: police and other law enforcement officials should not be allowed to take assets based only on the suspicion of criminal activity and then be permitted to use those assets to purchase needed things for the department, like margarita machines.

Charles – who admittedly smoked marijuana on the way to the airport – lost his life savings to what amounts to legalized piracy. It seems Mancur Olson was on to something when he described the government as “stationary bandits.”

Thankfully, Charles has the saintly lawyers at the Institute for Justice on his side, who use the money from IJ’s generous donors to defend people like him from the most powerful organization in human history – the United States government.

Otherwise, Charles would be out of luck. His confiscated $11,000 is just small enough to make it almost not worth it to pay thousands in attorney’s fees in order to possibly get some of it back. It’s almost as if the officers who confiscated his money thought that Charles would be unlikely to have the resources to fight the seizure.

Last year, the officers at Cincinnati/Northern Kentucky airport had a “good” year taking things from people who haven’t been convicted of a crime, raking in $530,000 from travelers similar to Charles. Under the federal “equitable sharing” program, the departments of the deputized airport police are allowed to keep up to 80 percent of that money.

The Institute for Justice is not only seeking to recover Charles’s money, they are challenging the constitutional deficiencies of the civil asset forfeiture program in general.

For more on Charles’s case, see Vox’s story.

For more on civil asset forfeiture, see our episode of “Free Thoughts” featuring Scott Bullock from the Institute for Justice.


Trevor Burrus

Trevor Burrus is a research fellow at the Cato Institute’s Center for Constitutional Studies. His research interests include constitutional law, civil and criminal law, legal and political philosophy, and legal history.

EDITORS NOTE: This post first appeared at Cato.org.