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VIDEO: Excuse Me, Professor! Correcting the slant on campus

January 9, 2016/0 Comments/in Education, Policy, Politics, Regulation /by Foundation for Economic Education (FEE)

Too often, the message students get in college is that government is the answer to all social and economic problems. This happens in classes on history, sociology, politics, literature, and even in economics. You can graduate having heard only one narrative: the market has failed, so it must be replaced by all-controlling government bureaucracies.

FEE president Lawrence Reed is the editor of a wonderful collection of essays that address myth after myth. The book is Excuse Me, Professor (buy it from FEE). The essays deal with a huge range of issues that confront students every day. Unless young thinkers have an alternative paradigm in mind, the cause of human liberty will continue to lose the intellectual battle.

In this presentation at the Acton Institute, Reed discusses his new book and why it is an important contribution to setting the record straight. (Talk begins around 4:30 mark.)

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.

Snopes during White House visit produces Barack Obama’s genuine birth certificate

December 24, 2015/4 Comments/in Commentary, Satire /by The Peoples Cube

Snopes.com, which brands itself as “the definitive Internet reference source for urban legends, folklore, myths, rumors, and misinformation,” has recently made a claim that any stories about its alleged ties to the White House, as well as to Democratic activist groups and donors, are nothing more than “urban legends, folklore, myths, rumors, and misinformation.”

Snopes.com representatives, hereinafter referred to as SNOPES, made this statement at a recent meeting with Democratic activist groups and donors that happened at the White House.

SNOPES further promised to up their game debunking anything “fishy” anyone says about Obama, his administration, the Democratic activist groups and donors, or their proxies, as well as about their alleged ties with SNOPES.

SNOPES supported their statement with a substantial list of news stories and rumors they had discredited without any joint effort or coordination with Democratic organizations, which should serve as definitive proof of the Internet company’s uncoordinated, disjointed, and disorganized position on political issues.

In one example, SNOPES had proven without a shadow of a doubt that when a young Barack Obama registered at Columbia as a foreign student, it didn’t mean that he was a foreigner, or a student, or Barack Obama. Being registering at Columbia as “Barack” didn’t mean he was registered as “Barry Soetoro,” or anyone else impersonating anyone else, and that a man who was born in Nairobi wasn’t also simultaneously born in Honolulu and Jakarta; it should appear reasonable that a man with audacity can be born in several places at any one time, or “reborn,” or beamed to Earth from the dreams of his father, or someone else’s father – an explanation that should have satisfied anyone not totally deranged.

SNOPES had also clarified the confusion over the social security card issued to young Barry in Connecticut, a state that only gives such cards to those who were born and lived there. According to SNOPES, the fact that young Obama never visited Connecticut didn’t mean that he was the John Smith who had the same social security number and who had died decades before Barry was born, as clearly evidenced by the undeniable fact that the deceased had never filed a complaint of identity theft, nor had there been any record of a police report filed against Barry Soetoro in 1922. Furthermore, a dead man in one state having the very same number as one living in another didn’t mean that that Barack Obama’s younger self was not born ever, or that he never lived somewhere, which proves, ipso facto, that Barack Obama was indeed born and lived somewhere sometime.

Proving the skeptics wrong, SNOPES further produced Barack Obama’s genuine birth certificate printed from a real PDF file with five certified and notarized digital layers, which they copied from the Daily Kos website and reproduced on a vintage Hewlett-Packard inkjet printer using authentic 1961 HP ink cartridges. That the certificate contained a computer font from Microsoft Word was later explained in a signed statement from Bill Gates, assuring SNOPES readers that Windows operating system existed prior to Obama’s birth, as further evidenced by the 1954 movie Rear Window, directed by Alfred Hitchcock and starring James Stewart with Grace Kelly.

The SNOPES statement was followed by a short Q&A, during which former broadcast professional, Dan Rather, insisted that Obama’s four known birth certificates, as well as his multiple social security numbers and his sealed student records at Columbia contained proof that George. W. Bush was in Kenya during the Mau Mau uprising and could not have landed on the moon at the same time to meet with Dick Cheney, who was an extraterrestrial organizing the hobbits to assassinate JFK as Oliver Stone had claimed.

Before leaving the room, SNOPES took a moment to wipe off their fingerprints from the microphone and the podium, as well as to thoroughly debunk the allegation that they had ever been in that room, or ever met with the White House team, or contributed money to Barack Obama’s campaigns of 2007 and 2011 respectively – a statement that the White House immediately confirmed, adding, “but it wasn’t enough.”

EDITORS NOTE: A special thanks to Komrade Kommissar General Vassily Ilyich Chernobylski for major contributions to this reporting. This political satire column originally appeared on The Peoples Cube.

Katniss vs. Power: The Hunger Games Finale by Jeffrey A. Tucker

November 23, 2015/0 Comments/in Culture War, Elections, Featured, Policy, Politics /by Foundation for Economic Education (FEE)

Now that the final movie in the series is out, we know that The Hunger Games is not just a pop movie series for young adults, a fantasy tale about about a young girl’s heroism. It is far more sophisticated than that: It is a political allegory, one of the best known of our time, about power and the complications of its displacement.

In this way, it covers the same intellectual terrain as Aristotle’s Politics, Machiavelli’s The Prince, and de Jouvenel’s On Power, but in a way that is more penetrating for readers and viewers, and particularly relevant for our times.

The final installment is a fitting and dramatic end to the tale. It deals with the greatest conflict in history, that between liberty and power. Those who have followed the story until the last movie might have supposed that the problem was rather stark. One man, President Snow, held all the power. He was a cruel man and he used every means to keep his power. He sat at the center of a capital city that pillaged the districts of resources and held power through fear.

If that is all there is to the problem, the solution would be clear: President Snow has to be killed. The source of the problem out of the way, all will be well.

The Plot Thickens

This was the thinking of heroine Katniss Everdeen for most of the series. And one can see why she would believe this. Snow was a ghastly figure, and he was personally responsible for vast cruelty and crimes. He deserved to be overthrown and for justice to prevail.

Plus, she supposed that everyone she knew shared her vision: a normal life without oppression, without violence, without pillaging, without rigid geographic and caste classifications, and without televised death matches orchestrated to instill fear in the population.

Previous installments had strong hints, however, that there was more going on beneath the surface. The capitol city Panem was an autocracy but also the center of a nation-state, which is to say that the bureaucracy, the administrative apparatus, a standing military, and its methods of rule could survive the death of the leader. This is the difference between a personal state and a nation state. The power apparatus of the nation state seeks immortality, a continuing life regardless who happens to head it.

The problem of creating a world without power, then, is more complicated than the overthrow of the existing autocrat. In every revolutionary situation, those who are most motivated to achieve the aim are those who seek to hold power themselves. So long as the machinery of legal violence exists, there will be those who seek to control it — and, as Hayek said, it is usually the worst who make it to the top. Therefore, it is not just those who rule but also those who seek to rule who constitute a threat to liberty. This is how the existence of powerful nation-states end up creating multiple layers of dangers.

Revolutionaries as Bad as the Regime?

Anyone who seeks to end oppression has to keep his or her eye out for those who would use the chaos and confusion of political upheavals to seize and exercise power in the future. This is what Katniss learns, as she gradually discovers that her one-time allies had become skilled in the conduct of war, appreciative of the status that comes with leadership, and lusty for exercising state power themselves.

She learned that great lesson of history: It is not just despots who need to be kept at bay but also those who most passionately seek to overthrow despots. In order to realize liberty, you need more than just loathing of those in charge; you need the ascendance of the love of true liberty itself.

Once Katniss catches on to what is happening around her, she has to make a decision. Does she comply with the dictate of the increasingly centralized revolutionary forces or take a different turn and go her own way? The urgency of this decision is what turns The Hunger Games from being a simple Manichean struggle between one good and one evil into a real-life version of a Massive Multiplayer Online game.

US Foreign Policy

Let us apply this principle.

In the 1980s, the US sought to drive the Soviets out of Afghanistan by supporting Islamic fundamentalists, who were then called “freedom fighters,” and they were given weapons and massive logistical support. After the Soviets left, the rebellion gradually metastasized into the Taliban, who ruled with an iron hand, and were then overthrown after 9/11, leading to 15 years of US occupation, which has stirred resentment among the population.

This saga coincided with a similar situation in Iraq after 2003, following a decade of embargoes, intermittent bombing, and harsh sanctions. The overthrow of the brutal dictator Saddam Hussein brought to power not liberty-loving constitutionalists, but rather a Shiite majority that oppressed in turn on the Sunni minority that Hussein had represented.

The Sunni insurgency against the Iraqi state caused a bloody civil war in Iraq that eventually spilled over into the rebellion against Syrian dictator Bashar al-Assad and mutated into the Islamic State. Over the course of 25 years, Iraq went from a defeated and relatively quiescent state to a seething hotbed of poverty, violence, and hatred.

Fast forward to the Libyan case where the overthrow of another evil dictator Muammar Gaddafi sparked a grim populist blowback. Combined with all the other interventions, and alongside a surreptitious attempt to boot the Syrian overlord, we’ve seen the spread of ISIS into a region-wide insurgency that truly intends to rule through bloodshed.

Such is politics. You think that getting the bad guy will end the problem. What this doesn’t consider is the possibly that something even worse is waiting in the wings. This is not a case for tolerating tyranny, but it is a case for a good dose of humility to go with revolutionary impulses.

The Problem of Democracy

And it’s not just about foreign regimes. A famous trait of democracy is that the urge to kick out one group of leaders is necessarily tied to bringing another group into power. The latter are often no better and sometimes worse than the former. This is one of the reasons for so much political nostalgia in US politics: a look back almost always provides a better picture than a look at the present.

I can’t count the number of times I heard people tell me how much they long for the good old days of Reagan or Clinton — people who loathed them at the time… until their replacements came along. Or think of the number of people who believed that getting rid of Bush and replacing him with Obama would lead to peace, prosperity, and understanding, only to find that the new regime continued the practices of the old. And heads up: it seems like this history is likely to repeat itself in the case of Obama.

The simple lesson of The Hunger Games is that powerful people can do terrible things. We must resist in order to stop them. The more complicated lesson is that powerful institutions themselves corrupt, and that there will always be those lacking in moral scruples who are willing to assume the mantle of power.

At the end of the movie, we see Katniss out of battle gear, sitting in the grass, at her home, being bathed by sunlight, tending to her own life, cultivating her own personal vision of freedom, out of the limelight. Ruling herself, not others. Perhaps that scene offers the best lesson of all.

Jeffrey A. Tucker

Lebanon: Unraveling the Enigma

August 31, 2015/0 Comments/in Culture War, National Security, Policy, Politics, Religion /by Jerry Gordon

To paraphrase Winston Churchill, “Lebanon is a riddle wrapped in a mystery inside an enigma.” Unraveling the Lebanese enigma is the objective of a new book by Dr. Mordechai Nisan, Politics and War in Lebanon. Nisan is an accomplished Israeli political scientist and retired Hebrew University lecturer. His body of work covers Zionism, Islam, Arab history, minority peoples, Lebanon, U.S. Middle East policy and the Arab-Israeli conflict. It is rare that a book achieves its objective of unraveling the complex nuances of the Lebanon puzzle in both an astute and yet literate manner. Dr. Nisan has views on many issues including why the 80 year old confessional political system persists and has resilience. It has a lot to do with the adoption of the Maronite Christian independence ethos arising from the historic resistance against centuries of Muslim and later Ottoman rule under Islamic Sharia law.

The confessional political system maintains, a Maronite as President, Sunni as Premier and Shiite as Speaker of the Lebanese National Assembly. The Lebanese Parliament has 128 members split equally between Christians and Muslims elected to four year terms in multi-member constituencies, which often produces unexpected alliances. Nisan writes: “the idea of a numerical democracy for Lebanon, as for all typical democratic states, had been, as we know, rejected in favor of political confessionalism by assigning office according to a sectarian key.” Of course the Lebonese paradox was assisted by the fact that it only had one census back in 1932 that reflected a Maronite Christian majority which has since dwindled due to war, emigration and the demographic rise of both Sunni and Shia. Even during the period of the internal wars triggered by Palestinians against the Maronite hegemony that began in 1975, there were episodes where Druze, Shia and Sunni militias protected the precinct of the Maronite patriarch. The confessional political system remains durable despite the inroads made by external enemies like Syria, the Palestinians and internal ones, like Iran’s proxy Hezbollah dominating the country’s southern border and Eastern Bekaa Valley adjoining Syria.

There is also the long standing history of Maronite Christian – Zionist mutual respect that has never been recognized in formal agreements. Yet that figures prominently in understanding the role of Israel in episodic military operations in Lebanon – dislodging PLO-Fatah terrorist armies, only to have them replaced with Shia Hezbollah forces occupying the Southern security belt that the IDF abandoned in 2000. Now, that Southern border is crenellated with underground fortifications and tunnels, equipped with over 150,000 Iranian-supplied rockets and missiles. That could figure significantly in a new Middle East War arising from a possible nuclear deal with Hezbollah’s creator, Iran. Nisan considers that episode one of Israel’s most abject geo-political failures.

Among the issues addressed in Nisan’s timely and cogent book is the political disintegration triggered by the Palestinian war on the Maronites in 1975. He addresses the Israeli incursion in 1978 and First Israeli Lebanese War in 1982 that ousted Yassir Arafat and Fatah-PLO leaders sending them packing under UN auspices to Tunisia and nine other countries. Nevertheless, he is critical of Israel’s pell mell abandonment of the southern security belt, held by the IDF and the South Lebanese Army (SLA) in alliance with Israel. The evacuation was ordered by former Israeli Prime Minister Ehud Barak in May 2000. That catastrophe gave rise to the Hezbollah takeover and ethnic cleansing of South Lebanon. There is also the nearly 20 year predatory Syrian occupation of large sections of Lebanon that began in 1976.

Nisan has nothing but contempt for the behavior of the Assad Syrian regime of both father and son in what could only be characterized as the virtual looting of Lebanon’s economic and natural resources. There were Syrian companies grabbing Lebanese tenders, Syrian officials pocketing tax revenues and running a protection extortion racket with local businesses. The results were a once vibrant economy faltering, with unemployment and poverty soaring. He notes that Syria never recognized an independent Lebanon in 1946. He considers the Syrian occupation the equivalent of the Nazi Anschluss of Austria comparing Lebanese Sunni and Orthodox Christians as the equivalent of pan-Germanic Austrians, because the latter identified strongly with both Syria and being Arab.

Nisan contends that the Israeli justification for the Southern withdrawal in 2000 was faulty. It was based on the following logic:

Israel had to dismantle the SLA to comply with UN Resolution 425 of March 1978 that called for Israel to withdraw its forces from all Lebanese territory.
Hezbollah would overwhelm and murder its Christian and Shiite elements prompted by the memories of the 1982 Sabra and Shatila Palestinian refugee camp massacres.
That if the SLA put up resistance against Hezbollah that it might complicate withdrawal leading to a possible return by Israel to assist its former allies.
Israel sacrificed the SLA as a necessity to assure that Hezbollah not interfere with Israel’s withdrawal from the South.

Nisan believes that the debacle that occurred in the wake of the Israeli withdrawal might have been prevented if:

Israel had bolstered the SLA as an independent force.
Israel might have disarmed both the SLA and Hezbollah.
Israel had called upon Syrian Forces to withdraw simultaneously with the IDF.

He concludes, “In Lebanon, Israel was drained of its political and public energy, had done little strategic planning, and in the end lacked a moral compass.”

Nisan notes the three signal events that occurred in 2000:

In May the Israeli Army withdrew from Southern Lebanon and likewise forced the collapse of its SLA ally there.
In June President Assad of Syria died and was succeeded by his son Bashar.
Maronite Patriarch Nasrallah Sfeir, Walid Jumblatt, the Druze leader, and a variety of political personalities, both Christian and Muslim, called for Syrian withdrawal from Lebanon.

In mid-July 2015, a worldwide gathering of Lebanese activists occurred in Washington, DC in the First Convention on the Cedars Revolution. It was the commemoration of the 10^th Anniversary of the Cedars Revolution. Several sessions were held with Members of Congress, the State Department and the Pentagon. The issues they addressed concerned the preservation of democracy in Lebanon’s confessional political system, military and security matters with the incursion of Syrian forces, reminiscent of original issue that ignited the Cedars Revolution in March 2005. It is indicative of the abiding concerns of the Lebanese and largely Christian diaspora, estimated at upwards of 14 million.

Even during several Arab Israeli conflicts, Lebanon stayed out of the conflicts. After the failure of the 1970 Black September campaign between PLO-Fatah forces and the Kingdom of Jordan, Yassir Arafat and Palestinian resistance leadership were given sanctuary in Lebanon. Less than five years later, Arafat fomented open warfare on Christians in a ferocious and bloody conflict. It was during that period that Lebanese Maronite leaders like Etienne Sakr (Abu Arz) and Pierre Gemayel reached out to Israel whose military covertly provided training and equipment to Christian militia forces. There were hopes of an eventual enduring peace between Lebanon and Israel. That possibility ended with the assassination on September 15, 1982 of Maronite President-Elect and leader of Lebanese Forces Bashir Gemayel of the Phalange Party. He was allegedly on his way to conclude a treaty with Israel in Jerusalem.

Nisan addresses the transformation of Lebanese Shia under Sayyid Fadlaallah from willing confessional participants to Sharia infused support of an Islamic state, reducing the dominant Maronite and other Christians to dhimmi status. Along with that, Fadlaallah denied Israel’s legitimacy and boosted the Palestinian cause against the “Zionist enterprise.” Instead of involving himself in the Lebanon political structure, Fadlaallah sought out the means of supporting jihad, through zakat, Muslim charity. The person who completed the transformation of Lebanon’s Shia was Imam Musa al-Sadr who, in the political chaos of the mid-1970’s, created the Movement for the Disinherited (al Harakat al-Muhrimum) to promote Shiite social equality and political activism and its companion military wing, Amal (“Hope”). Sadr disappeared in 1978 on a flight to Rome under mysterious circumstances. Leadership of Amal fell to successors Hussein al-Husseini, who later became Speaker, and ultimately, lawyer Nabih Berri. Berri sought resistance against the PLO in the 1970’s and 1980’s including laying siege to Palestinian refugee camps. However, the ultimate destination of Lebanon’s Shia community was to Iranian theocratic influence emanating from Shia seminaries in Iraq. The pro-Khomeinist returnees from Najaf provided fertile grounds to build Hezbollah – the party of God, a Qur’anic designation. Nisan notes that the ultimate leadership of Hezbollah was drawn from Southerners like Sayyid Hassan Nasrallah and Abdul Karim Obeid, graduates of the apocalyptic Twelver seminary in Qom, Iran. By 1982, 1,000 Iranian Revolutionary Guards were stationed in the Bekaa Valley training young Lebanese Shia fighters in Khomeinist doctrine and providing them with weapons and millions in funding. Syria under the Assad family became a strategic ally during the Iran–Iraq War of the 1980’s allowing Damascus to become a transfer point for Iran to supply its proxy, Hezbollah. Hezbollah became Iran’s global terrorism arm. That is reflected in Iran’s support for Lebanese Shia émigrés in the Latin American tri-border area that provided a base for the 1992 Buenos Aires Israeli Embassy and 1994 Jewish AMIA blasts. The later is still roiling Argentine politics with the recent mysterious death of Argentine Jewish prosecutor Alberto Nisman and accusations of involvement at the highest political levels in both Iran and Argentina.

The Israel invasion of 1982 launched a series of terrorist spectacles by the late Imad Mughniyahin. In Beirut in 1983 he killed over 400 French paratroopers, US Marines and US embassy staff. That was followed by the 1986 TWA flight hijacking and killing of a US Navy diver hostage. Mughniyah, went big time with the Khobar Towers blast in Saudi Arabia in 1995. He had links to the East African US Embassy blasts in 1998 and a major role in training and facilitating the travel via Iran and Germany of the 19 Sunni perpetrators of 9/11. Mughniyah’s leading terrorist role ended in Damascus in February 2008, when his vehicle exploded in what many believe was a Mossad revenge attack.

The big breakthrough for Hezbollah was its campaign of attacks in the South of Lebanon and Israeli border incursions in the late 1980’s to 2000. Nisan notes that Hezbollah undertook 1,030 military operations over the period from 1990 to 1995, escalating to more than 4,928 operations from 1996 to 2000.

Nisan links Hezbollah’s political rise with the adoption of the triumvirate Lebanese Presidency system with the Taif agreement. That enabled Hezbollah to secure seats in the Chamber of Deputies in competition with the Shia Amal party. Its further rise to power was the product of one of its three expressed objectives of a 1985 Open Letter:

Accepting Ayatollah Khomeini as leader of the world’s Muslims.
Wiping out Israel and opposing America.
Forming relations with Christians in Lebanon while calling them to embrace Islam.

Nisan noted the impact of the third objective expanding the 128 member Assembly split 64 Christian/64 Muslim. He wrote, “many Muslim voters were electing Christian deputies in the South, while Christians elected a Shiite in Jbayl and Sunnis were elected by Maronites and Druze in the Shouf.”

By 1999, when the US State Department designated Hezbollah a foreign terrorist group, Hezbollah was a mini-state within a state. In May of 2000, the ring of fate was sealed in Southern Lebanon with the Israel evacuation and collapse of the SLA resistance. Under a secret agreement between Hezbollah and the IDF, the former agreed not to attack Israeli forces as they completed their retreat. That action, as Nisan notes, led Yassir Arafat to instigate the so-called Temple Mount Second Intifada triggered by the visit of Israel PM Sharon on September 28, 2000. Sharon was the Defense Minister who undertook the invasion of Lebanon in 1982.

At the conclusion of Nisan’s book, he posits three scenarios:

The Iranian Shiite axis could collapse with a short time.
The Arab world could continue its slide into fissured decay while distracted from its historic and national vision.
The Arab-Israeli conflict will likely remain intractably irresolvable according to the tried and tested formulae for peace.

In the midst of Nisan’s speculations he draws attention to the aftermath of the Maronite Patriarch a-Ra’I 2012 visit to Jerusalem. That enraged Hezbollah, but brought commendation from Druze leader Walid Jumblatt. Maronite President Sleiman whose term ended in 2014 paid a visit to Jumblatt’s home town of Mukhtara before he stepped down. The message was one of reconciliation within the confessional system that might bring the sectarian groups together and avoid a civil war. With a vacant presidential post and parliamentary elections postponed until 2017, trouble looms for the country caught up in the vicissitudes of the Syrian civil war spilling over its borders, bringing in a flood of refugees. Currently, Lebanon is embroiled in a highly politicized trash crisis involving a protest Group “You Stink” that some believe may cover a possible power grab by the Hezbollah party and Michael Aoun’s Free Patriot Movement. The concern is the crisis might bring down the National Unity Government of Sunni Prime Minister Tammam Salam.Reuters reported both Saudi Arabia and Iran gave their blessing to the present government with a Cabinet composed of Sunni Muslim former Prime Minister Saad al-Hariri’s Future movement, Shi’ite Hezbollah and Christians. Nisan wrote about a hopeful sign, “The March 14 camp asked Patriarch Beshara a – Ra’I to suggest names for the presidential post. Maybe somehow two Maronites – patriarch and president would help save the country from oblivion.” The expression in Hebrew is, alevai. Its English meaning, “that should only be.”

EDITORS NOTE: This column originally appeared in the New English Review. Also see Jerry Gordon’s collection of interviews, The West Speaks.

On Privatizing Marriage: No, Matrimony Is Not Irreducibly Public by Max Borders

August 25, 2015/1 Comment/in Culture War, Must Read, Policy, Politics, Religion /by Foundation for Economic Education (FEE)

Marriage is society’s primary institutional arrangement that defines parenthood. – Jennifer Roback Morse

The idea of marriage privatization is picking up steam. And it makes strange bedfellows.

There are old-school gay activists suspicious that state marriage is a way for politicians to socially engineer the family through the tax code. There are religious conservatives who are upset that a state institution seems to violate their sacred values. Don’t forget the libertarians for whom “privatize it” is more a reflex than a product of reflection.

But they all agree: it would be a good idea to get the government out of the marriage business. Principle, it turns out, is pragmatic.

First, let’s disentangle two meanings for one word that easily get confused. When we say “marriage,” we might be referring to:

A. a commitment a couple enters into as a rite or acknowledgment within a religious institution or community group (private); or

B. a legal relationship that two people enter into, which the state currently licenses (public).

Now, the questions that follow are: Does the government need to be involved inA? The near-universal answer in the United States is no. But does the government need to be as involved as it is in B? Here’s where the debate gets going.

I think the government can and should get out of B, and everyone will be better for it. This is what I mean by marriage privatization.

Some argue that marriage is “irreducibly public.” For Jennifer Roback Morse, it has to do with the fate of children and families. For Shikha Dalmia, it has to do with the specter of increased government involvement, a reinflamed culture war, and a curious concern about religious institutions creating their own marriage laws.

First, let’s consider the issue of children. According to Unmarried.org:

39.7 percent of all births are to unmarried women (Centers for Disease Control, 2007).
Nearly 40 percent of heterosexual, unmarried American households include children (Child Protective Services, 2007).
41 percent of first births by unmarried women are to cohabiting partners (Larry Bumpass and Hsien-Hen Lu, 2000).

Does the law leave provisions for the children of the unmarried? Of course. So while state marriage might add some special sauce to your tax bill or to your benefits package, family court and family codes aren’t likely to go anywhere, whatever we do with marriage. This is not a sociological argument about whether children have statistically better life prospects when they are brought up by two married parents. Nor is it a question about gender, sexuality, and parental roles. It’s simply a response to the idea that marriage is “irreducibly public” due to having children. It is not. (I’ll pass over the problem for this argument that some married couples never have children.)

Dalmia is also concerned that “true privatization would require more than just getting the government out of the marriage licensing and registration business. It would mean giving communities the authority to write their own marriage rules and enforce them on couples.”

It’s true. Couples, as a part of free religious association, might have to accept some definition of marriage as a condition of membership in a religious community. But, writes Dalmia, “This would mean letting Mormon marriages be governed by the Church of the Latter Day Saints codebook, Muslims by Koranic sharia, Hassids by the Old Testament, and gays by their own church or non-religious equivalent.” And all of this is could be true up to a point.

But Dalmia overstates the case. Presumably, no religious organization would be able to set up codes that run counter to the civil laws in some jurisdiction. So if it were part of the Koranic sharia code to beat your wife for failure to wear the hijab at Costco, that rule would run afoul of criminal laws against spousal abuse. Mormon codes might sanction polygamy, but the state might have other ideas. So again, it’s not clear what sort of magical protection state marriage conjures.

What about Dalmia’s concern that in the absence of state marriage, “every aspect of a couple’s relationship would have to be contractually worked out from scratch in advance”? Never mind that some people would see being able to work out the details of a contract governing their lives as a good thing (for one, it might prevent ugly divorce proceedings). There is no reason to think that all the functions normal, unmarried couples with children and property have in terms of recourse to “default” law would not still be available. Not only would simple legal templates for private marriage emerge, but states could establish default civil unions in the absence of couples pursuing private alternatives.

There is no reason to think that all the functions normal, unmarried couples with children and property have in terms of recourse to “default” law would not still be available.

Indeed, if people did not like some default option — as they might not now — there would be better incentives for couples to anticipate the eventualities of marital life. People would have to settle questions involving cohabitation, property, and children just as they do for retirement and for death. Millions of gay couples had to do this prior to the Supreme Court’s ruling on marriage equality. Millions of unmarried couples do it today. The difference is that there would be a set of private marriage choices in a layer atop the default, just as people may opt for private arbitration in lieu of government courts.

In the debates leading up to marriage equality, an immanently sensible proposal had been that even if you don’t like the idea of hammering out a detailed contract with your spouse-to-be, simply changing the name of the entire statutory regime to “civil unions” would have gone a long way toward putting the whole gay-marriage debate to bed. The conservatives would have been able to say that, in terms of their sacred traditions and cultural community (as in A), “marriage” is between one man and one woman. Gay couples would have to find a church or institution that would marry them under A. But everybody would have some equal legal provision under the law to get all the benefits that accrue to people under B. You’d just have to call it a “civil union.”

And that’s fine as far as it goes.

But I like full privatization because “marriage” is currently a crazy quilt of special privileges and goodies that everybody wants access to — unmarried people be damned. But marriage should confer neither special favors nor goodies from the state. We can quibble about who is to be at the bedside of a dying loved one. Beyond that, marriage (under definition B) is mostly about equal access to government-granted privileges.

Not only does the idea that marriage is irreducibly public represent a failure of imagination with respect to robust common law, it also resembles arguments made against privatization in other areas, such as currency, education, and health care. Just because we can’t always envision it doesn’t make it impossible.

Max Borders

Max Borders is the editor of the Freeman and director of content for FEE. He is also co-founder of the event experience Voice & Exit and author of Superwealth: Why we should stop worrying about the gap between rich and poor.

Can We Afford ‘Affordable Care’? by D.W. MacKenzie

August 12, 2015/0 Comments/in Culture War, Economy, Healthcare, Policy, Religion /by Foundation for Economic Education (FEE)

Does the Supreme Court decision upholding health insurance subsidies prove that Obamacare is here to stay?

With its legality settled, the longevity of the healthcare program is supposed to be politically inevitable. The millions of voters who receive subsidies from the Affordable Care Act will not tolerate the loss of this money. Insurance companies will no doubt also lobby to prevent any loss of ACA subsidies, as stockholders and employees are major beneficiaries of this program.

Political factors may well preserve the ACA in the short run. But the Court’s ruling came on the heels of a gloomy report from the Congressional Budget Office that may prove to be more decisive for the law than all of Chief Justice Roberts’ legal gymnastics.

The CBO forecasts anemic economic growth and rising public debt for decades to come. Projected revenues and projected spending indicate a growing imbalance in federal finances, driven by long-term unfunded liabilities in old entitlement programs — mainly Social Security and Medicare.

The Affordable Care Act was supposed to control health insurance costs — hence the name. Unfortunately, things are not working out that way, and insurance companies are pressing for significant rate increases.

Consumers might hope that government officials would resist pressure for rate increases, but such actions are unlikely: Stock prices for major health insurers rose sharply after the Supreme Court ruled in favor of the Obama administration. Clearly, investors expect the ACA to benefit health insurers. And in Oregon, state regulators actually raised premiums higher than insurers requested, just to keep companies in the market. Rising premiums will likely drive more subsidies, worsening the looming debt and entitlement crisis.

Politicians have ignored these issues for decades because they seemed like “long-term” problems, and political pressures from elections and lobbying force them to be shortsighted. The short-term financial situation is being shored up by the willingness of investors to buy federal debt at low rates.

The trouble is that the long term isn’t as far off as it used to be. The CBO indicates that the fiscal situation in the federal government worsened significantly over the past few years, even as the deficit was declining. Further deterioration in federal finances is expected over the next decade. How much longer will private investors continue to finance this soaring debt?

A large part of the problem with rising debt is that financing it requires steady economic growth, but large public debts can crush growth. Federal debt is a millstone on the economy, the burden of which could at some point lead to national bankruptcy. The ACA, with its enormous subsidies and regulatory compliance costs, will simply pile on an already unaffordable mass of federal spending programs.

The bottom line is that Supreme Court maintained the ACA subsidies legally,but the American people will not be able to maintain them financially.

The passage and continued defense of the Affordable Care Act is an example of the rank irrationality of public budgeting. The outcome of our political and legislative processes over the past few decades has been to create a myriad of wasteful and financially unsustainable federal programs. Meanwhile, the analytical office the legislative branch of government has been quietly raising the alarm about to the direction and sustainability of government finances. It would seem that delirium is winning out over reason.

There is, of course, nothing truly inevitable about the growth of federal spending. Federal spending developed into its present irrational state because many people pressed for this growth.

But spending can and will be curtailed. Citizens can push for real spending cuts through the electoral process. Otherwise, investors in financial markets will at some point put a sharp and sudden stop to government excesses.

D.W. MacKenzie

D. W. MacKenzie is an assistant professor of economics at Carroll College in Helena, Montana.

Politics in One Page: Elections Are Great Illusions by Jeffrey A. Tucker

August 11, 2015/0 Comments/in Elections, Featured, Politics /by Foundation for Economic Education (FEE)

In every election season, a new generation comes of age and experiences the political theater for the first time. The experience is formative. It challenges you to decide what you think about the world. Which candidate best represents my values and shares my sense of how things ought to be? More fundamentally, how should things be in politics?

As time goes on and you experience successive presidential election cycles, illusions begin to fall away. You start to see the whole thing for what it is.

So this article is for those who do not yet see. It is a quick tutorial in political reality, and a way to avoid the pain and suffering that comes with gradually discovering that reality on your own.

Lesson 1: Your Vote Cannot Change the Election Outcome

It’s not that your vote doesn’t matter at all. It might matter, but the odds are incredibly thin. If you live in a swing state, you might have a 1 in 10 million chance of swinging the election. But on average, “a voter in America had a 1 in 60 million chance of being decisive in the presidential election,” concludes one statistical analysis in Economic Inquiry. As the authors indicate, you are more likely to die in an car crash on the way to the polls.

Why do so many people vote anyway? Are they deluded? Maybe, but many people treat voting as a consumption good, which is to say they enjoy it. It makes them feel patriotic. There’s nothing wrong with that, but if you are still voting in an attempt to affect the outcome — and are still spooked that your failure to vote might ruin everything — here is a solution. Find someone who will vote differently, and you can both decide to grab a drink together instead.

Lesson 2: You Are Voting for People, Not Policies

There are elections in this country in which people really do decide on issues. In state and local elections, there are referenda on bond issues, taxes, pot decriminalization, and so on. Exciting stuff! But at the federal level, no way. You are voting only on personnel. Sure, the candidates can promise this or that, but how they behave after the election is something over which you have no control — and there is no recourse if something goes wrong.

Wouldn’t it be grand if there were real national elections on issues? Let’s say that the ballots had lists of spending priorities, policy ideas, and methods of government management. How many people would vote for their smartphones to be surveilled? For ever-less choice in health care? For higher gas taxes? I don’t know the answer here, but it would be interesting, for once, to see. Direct democracy on issues is technologically feasible today. It is even possible to give people the government they actually want through subscription services. We don’t do it because the ruling class likes the system the way it is.

Lesson 3: These People Are Not Actually the Government

Last year, I calculated the number of government employees who are actually running the state and compared it to the number of people we elect. Depending on how you calculate this, we are permitted to elect between 0.02 percent and 0.0004 percent of those who are in charge of our lives. The unelected constitute the deep state that no one wants to talk about. You could ship the whole class of elected rulers to Zimbabwe for four years and it would make no difference.

But wait: Aren’t the elected rulers in charge of the rest? Not really. Most of the permanent bureaucracy can’t be fired, no matter what. In any case, delegation to professionals is what elected rulers specialize in. The first act of the president is to fill 3,000 positions with political appointees. Congressional offices are managed by DC hacks. Politicians are specialists in what they are doing now: trying to get elected. The day they take office is the day the next election begins.

Lesson 4: These Are Not the Only Options

The beginning of political wisdom comes with the realization that the mainstream candidates do not exhaust the ideological options. Candidate A says that health care policy should be this way, and candidate B says it should be that way. What neither candidate ever says is that perhaps health care should not be the responsibility of government at all. And this goes for every other issue in national life: communications, labor, energy, environment, foreign policy, and so on.

The whole conventional political debate is premised on the idea that government should be running things. What’s left out here is the greatest single idea ever discovered in the history of the social sciences: society runs itself better than any authority can run it.

This is true in economics but also in culture, security services, religion, and family life. Liberty just works better. The discovery of this truth built civilization. But that idea is absent from the options we are given. No matter: you can discover it on your own if you are brave enough to step outside the partisan paradigm.

Lesson 5: Social Change Happens Outside of Government

Every candidate will speak about his or her vision for America. They talk as if they want to be, can be, will be, in charge of pushing history forward. But look around: the progress you experience in your daily life has nothing to do with the political class. Think about the mobile applications you use to stay in touch with family, find directions in a new city, monitor your health, communicate with your network. These services were not granted by the political class. They came to us via entrepreneurs and enterprise, working themselves out in the course of social evolution.

In “Is Politics Obsolete?” Max Borders and I chronicled all the ways the world has changed over the last four years. It’s remarkable what’s happening today. It’s revolutionary. None of this was anticipated by the last election. And none of it is inspired by politicians. The change is coming from within the fabric of the social order. And that change is continuing by the day. If you want to be part of it, to make a difference in the world, the realm of enterprise and individual action is the sector for you. In many ways, the political theater is a distraction — a learning opportunity, yes, but ultimately not decisive for the kind of life we want to build.

The tendency to treat elections as personal moments in our lives might be a product of democracy. We are encouraged to believe that we are running the system. So we flatter ourselves that our opinions matter. After all, it is we the voters who are in charge of building the regime under which we live. But look deeper and you discover a truth that is both terrifying and glorious: the building of the great society can’t be outsourced. It is up to you and me.

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.

Scandinavian Myths: High Taxes and Big Spending Are Popular by Nima Sanandaji

August 8, 2015/0 Comments/in Culture War, Economy, Policy, Politics, Regulation /by Foundation for Economic Education (FEE)

As I have explained in previous columns for CapX, there are a number of myths surrounding the Nordic countries that don’t stand up to scrutiny. These include the notion that long life span in Nordic nations arose as the public sector expanded, the idea that generous public programs alone explain low levels of Nordic poverty and the myth that Nordic countries are bumblebees that defy gravity by not being adversely affected by high taxes.

But surely the Nordic countries do show one leftist theory to be correct: that social democrat policies can be popular with the electorate.

Although the Social Democrats have recently lost much of their previous support, they did manage to dominate Nordic policies for long. Sweden was sometimes referred to as a one-party state, since the Social Democrats ruled it almost consecutively from 1932 till 2006 (interrupted by two short spells of centre-right rule during 1976-1982 and 1991-1994).

It is sometimes puzzling to the outsider why the Nordic public repeatedly have elected tax-raising governments to power. The obvious answer is ideological support for welfare state policies.

However, there is also another reason worth examining in greater detail: the general public has not been fully aware of the price tag, in terms of higher taxes, attached to expanding public sectors. Politicians have created a fiscal illusion which has resulted in higher levels of taxation that the population would otherwise have accepted as feasible had taxes been levied in a transparent way.

Before policies radicalised in the late 1960s, the tax levels in Nordic nations were around 30 percent of GDP – quite typical of other developed nations. At the time, the tax burdens were quite visible. Most taxation occurred through direct taxes, which showed up on employees’ payslips.

Over time, an increasing share of taxation has been raised through indirect taxes. The latter are less visible to those paying them, since they are either levied before the wage is formally given to the employee or are included in the listed price of goods.

Finland is worth considering as an example. The country’s tax level was 30 percent of GDP in 1965. Indirect taxes in the form of VAT and mandatory social security contributions amounted to a quarter of total taxation. In 2013, the total tax take had increased to 44 percent of GDP, half of which was hidden taxes.

As shown below, Finnish governments have funded the expansion of the public sector by raising the hidden, but not the visible, tax burden. Denmark has followed a route wherein both hidden and visible taxes have been hiked.

Hidden and visible taxes in Finland (percentage of GDP)

Source: OECD tax database and own calculations.

Hidden and visible taxes in Denmark (percentage of GDP)

In Norway and Sweden, visible taxes are today lower than in the 1960s, although the true taxation is considerably higher. As can be seen below, it is clear that governments in both countries have followed a strategy based on replacing visible tax income with hidden tax incomes.

Thus, whilst the average worker has paid progressively more to the government, the payslips of the same worker have misleadingly shown a reduction in taxation.

Hidden and visible taxes in Norway (percentage of GDP)

Hidden and visible taxes in Sweden (percentage of GDP)

In other words, except in Denmark, the rise in taxation has occurred fully through an increase in hidden taxation.

This is in line with the predictions of fiscal illusion made by Italian economist Amilcare Puviani in 1903. Puviani explained that politicians would have incentives to hide the cost of government by levying indirect rather than direct taxes, so that the public would under-estimate the cost of policies.

The illusion can thus be created that an expanding state benefits individuals and families and yet costs less than it actually does. Nobel laureate James Buchanan and other researchers have expanded on the idea that it is easier for politicians to raise hidden, indirect taxes rather than visible ones.

Perhaps it comes as no surprise that those who believe in a higher tax rate in other parts of the world have followed a similar strategy as the Nordic nations. The American left-liberal think tank the Roosevelt Institute openly recommends “less-visible taxes that Americans are more likely to support.”

The Obamacare system launched in the US represents a form of indirect taxation – through an overly complex system – that is even more difficult to comprehend for the average taxpayer than in the Nordic systems.

I don’t doubt that less visible taxes in the US, the UK or other parts of the world would prove an easier route to raise the tax burden than visible taxes. This is indeed a lesson that the left can learn from the Nordics.

But the question remains if this is a good route to venture on. Shouldn’t politicians strive for systems where people are aware of how much they are paying for the government?

Nima Sanandaji

Dr. Nima Sanandaji is a research fellow at CPS, and the author of Scandinavian Unexceptionalism available from the Institute of Economic Affairs.

EDITORS NOTE: This article was originally published at CapX.

How Economic Control Threatens Political Liberty, Free Speech and the Rule of Law by Jon Guze

August 8, 2015/0 Comments/in Economy, Policy, Politics, Regulation, Taxes /by Foundation for Economic Education (FEE)

John Cochrane (aka “The Grumpy Economist”) has posted a long meditation entitled “Rule of Law and the Regulatory State,” in which he makes a very important point:

The United States’ regulatory bureaucracy has vast power. Regulators can ruin your life, and your business, very quickly, and you have very little recourse. That this power is damaging the economy is a commonplace complaint. Less recognized, but perhaps even more important, the burgeoning regulatory state poses a new threat to our political freedom.

What banker dares to speak out against the Fed, or trader against the SEC? What hospital or health insurer dares to speak out against HHS or Obamacare? What business needing environmental approval for a project dares to speak out against the EPA? What drug company dares to challenge the FDA?

Our problems are not just national. What real estate developer needing zoning approval dares to speak out against the local zoning board?

Readers who doubt that this is an urgent problem should read the whole thing, which includes numerous chilling descriptions of regulatory abuse, but here I want to focus on an issue he raises in passing: how best to refer to this urgent problem?

Cochrane says he hasn’t found “a really good word to describe this emerging threat of large discretionary regulation, used as tool of political control.” He considers “socialism,” “regulatory capture,” and “cronyism,” but he rejects all three. Regarding the last two, he notes:

We’re headed for an economic system in which many industries have a handful of large, cartelized businesses — think 6 big banks, 5 big health insurance companies, 4 big energy companies, and so on.

Sure, they are protected from competition. But the price of protection is that the businesses support the regulator and administration politically, and does their bidding. If the government wants them to hire, or build [a] factory in unprofitable place, they do it.

The benefit of cooperation is a good living and a quiet life. The cost of stepping out of line is personal and business ruin, meted out frequently. That’s neither capture nor cronyism.

The fact is, we’ve seen this system of political economy before — most notably in Mussolini’s Italy and in Hitler’s Germany — and there’s a commonly used term for it. It’s fascism. Maybe Cochrane thinks that term is too emotionally charged. However, I’d have thought a bit of emotional charge was warranted. As Cochrane says:

The power of the regulatory state…lacks many of the checks and balances that give us some “rule of law” in the legal system. …

The clear danger we face is the use of regulation for political control. Each industry gets carved up into a few compliant oligopolies. And the threat of severe penalties, with little of the standard rule-of-law recourse, keeps people and businesses in line and supporting the political organization or party that controls the agencies. …

A return to economic growth depends on reforming the regulatory state. But… preservation of our political freedom depends on it even more.

Read the rest here.

This post first appeared at the John Locke Foundation.

EDITORS NOTE: See Steve Horwitz’s “Why the Candidates Keep Giving Us Reasons to Use the “F” Word“; Jeff Tucker’s “Trumpism: The Ideology“; and Jason Kuznicki’s “The Banality of Donald Trump.”

Jon Guze

Clinton’s Startup Tax Will Crush New Businesses by Dan Gelernter

August 4, 2015/0 Comments/in Economy, Elections, Policy, Politics, Taxes /by Foundation for Economic Education (FEE)

Hillary Clinton has announced that she will, if elected, raise the capital-gains tax to a maximum that equals the highest income tax bracket. She hopes to promote long-term investments by penalizing short-term ones with a tax rate that gets lower the longer an investment is held, reaching the current 20% rate only after six years.

This, Ms. Clinton says, would allow a CEO to focus on the company’s true interests rather than just making the next quarter. It is, unfortunately, exactly the sort of plan you would expect from someone who has never started a company — and who doesn’t seem to know anyone who has.

The CEO of a startup is unlike the CEO of an established business. He is not the head of a chain of command: he is the spokesman or agent of a few colleagues, entrusted for the moment to represent them. The startup CEO has one primary job, which is raising money. It is the hardest thing a young company has to do — and it is an unending process.

Most germinal startups never raise any money at all. The ones that get seed funding are already breathing rarified air, and can afford perhaps a day of celebration before they start pursuing the next round.

The picture is especially tough for tech startups. A startup that builds software doesn’t have any machinery or physical supplies to auction off if the company fails. This means that banks won’t make the kind of secured business loans of the sort small companies traditionally get.

As a result, tech startups are wholly reliant on a relatively small number of investors who are looking for something more exciting than the establishment choices and are willing to take a big gamble in the hope of a big, short-term payoff. Though Ms. Clinton’s proposal would only affect those in the top income bracket, she may be surprised to learn that those are the only people who can afford to make such investments.

Professional investors think in terms of risk: they balance the likelihood of a startup’s failure against the potential payoff of its success. Increasing the tax rate reduces the effective payoff, which increases risk. Investors can lower that risk by reducing the valuation at which they are willing to invest, which means they take a larger share of the company — a straightforward transfer of risk from investors to entrepreneurs.

Ms. Clinton’s tax therefore will not be borne by wealthy investors: it comes out of the entrepreneur’s payday. The increased tax rate means a risk-equivalent decrease in the percentage of the company the entrepreneur gets to keep. And that’s just the best-case scenario.

The other option is that the tax doesn’t get paid at all, because the investor decides the increased risk isn’t worth it — the startup can’t attract funding and dies.

That sounds melodramatic, but it is no exaggeration. A startup company never has more offers than it needs; it never raises money with time spare. Even a slight change in the risk-return balance — say, the 3.8% which Obamacare quietly laid on top of the current capital-gains — kills companies, as investors and entrepreneurs see the potential upside finally shaved past the tipping point.

A tech startup has short-term potential. That is a major part of the attraction to investors, and that makes Ms. Clinton’s proposal especially damaging. In the tech world, we all hope we’ll be the next Facebook or Twitter, but you can’t pitch that to an investor. A good tech startup takes a small, simple idea and implements it beautifully.

The most direct success scenario is an acquisition by a larger company. In the app world — and this is the upside to not having physical limitations on distribution — the timescale is remarkably accelerated. A recent benchmark example was Mailbox, purchased by Dropbox just two months after it launched.

Giving investors an incentive to not to sell will hurt entrepreneurs yet again, postponing the day their sweat equity finally has tangible value, and encouraging decisions that make tax-sense rather than business-sense.

If Hillary Clinton really wants to help entrepreneurs, she should talk to some and find out what they actually want. A lower capital-gains tax — or no capital-gains tax — would be an excellent start.

Dan Gelernter

Dan Gelernter is CEO of the technology startup Dittach.

Who Is Doing More for Affordable Education: Politicians or Innovators? by Bryan Jinks

August 3, 2015/0 Comments/in Budget and Finance, Education, Policy, Politics, Taxes /by Foundation for Economic Education (FEE)

With a current outstanding student loan debt of $1.3 trillion, debt-free education is poised to be a major issue leading up to the 2016 presidential election.

Presidential candidate Bernie Sanders has come forth with his plan for tuition-free higher education.

Senator Elizabeth Warren supports debt-free education, which goes even further by guaranteeing that students don’t take on debt to pay other expenses incurred while receiving an education.

Democratic Party front-runner Hillary Clinton is expected to propose a plan to reduce student loan debt at some point. And don’t forget President Obama’s proposal to provide two years of community college to all students tuition-free.

While all of these plans would certainly increase access to higher education, they would also be expensive. President Obama’s relatively modest community college plan would cost $60 billion over the next decade. What makes this an even worse idea is that all of that taxpayer money wouldn’t solve the most important problems currently facing higher education.

Shifting the costs completely to taxpayers doesn’t actually reduce the costs. It also doesn’t increase the quality of education in a system that has high drop-out rates and where a lot of graduates end up in low-paying jobs that don’t use their degree. Among first-time college students who enrolled in a community college in the fall of 2008, fewer than 40% earned a credential from either a two-year or four-year institution within six years.

Whatever the other social or spiritual benefits of attending college are, they don’t justify wasting that so much time and money without seeing much improvement in wages or job prospects.

Proponents of debt-free college argue that these programs are worth the cost because a more educated workforce will boost the economy. But these programs would push more marginal students into college without any regard for how prepared they are, how likely they are to graduate, or how interested they are in getting a degree. If even more of these students enter college, keeping the low completion rates from falling even further would be a challenge.

All of these plans would just make sure that everyone would have access to the mediocre product that higher education currently is. Just as the purpose of Obamacare was to make sure that every American had a health insurance card in their wallet, the purpose of debt-free education is to make sure that every American has a student ID card too — whether it means anything or not.

But there are changes coming in higher education that can actually solve some of these problems.

The Internet is making education much cheaper. While Open Online Courses have existed for more than a decade, there are a growing number of places to find educational materials online. Udemy is an online marketplace that allows anyone to create their own course and sell it or give it away. Saylor Academy and University of the People both have online models that offer college credit with free tuition and relatively low examination fees.

Udacity offers nanodegrees that can be completed in 6-12 months. The online curriculum is made in partnership with technology companies to give students exactly the skills that hiring managers are looking for. And there are many more businesses and non-profits offering new ways to learn that are cheaper, faster, and more able to keep up with the ever-changing economy than traditional universities.

All of these innovations are happening in response the rising costs and poor outcomes that have become typical of formal education. New educational models will keep developing that offer solutions that policy makers can’t provide.

Some of these options are free, some aren’t. Each has their own curriculum and some provide more tangible credentials than others. There isn’t one definitive answer as to how someone should go about receiving an education. But each of these innovations provides a small part of the answer to the current problems with higher education.

Change for the better is coming to higher education. Just don’t expect it to come from Washington.

Bryan Jinks

Bryan Jinks is a ?freelance writer based out of Cleveland, Ohio.

The Man Who Sowed the Seeds of Puerto Rico’s Collapse by Lawrence W. Reed

August 3, 2015/1 Comment/in Budget and Finance, Economy, Policy, Regulation, Waste, Fraud and Abuse /by Foundation for Economic Education (FEE)

Is there anything more tragically monotonous than a failing welfare state? From ancient Rome to modern Greece, the story is one of the most repetitive in history. It goes like this:

People increasingly decide they’d rather vote for a living than work for one. An academic and intellectual class, dependent on subsidies and anxious to command the economy, advises the people that this is a really good thing. Politicians cater to them with high-sounding rhetoric (“We’ll take care of you”) and low-balling promises (“We can afford it. It won’t cost much. We’ll just take it from the rich”).

Responsibility, self-reliance, and enterprise give way to an entitlement mentality. Power concentrates and corruption ensues. Taxes and debt rise. The government debases the money. Crisis leads to more government, which leads to more crisis. What was always bankrupt morally finally goes bankrupt economically. Goodbye economy, liberty, and often even civilization itself. The barbarians take over. What else is new?

Now it’s Puerto Rico’s turn.

The Commonwealth of Puerto Rico is a US territory in the northeastern Caribbean. Its governor, Alejandro García Padilla, startled the world back in June when he announced that the island cannot pay back its $72 billion public debt.

“The debt is not payable,” García Padilla said. “There is no other option. I would love to have an easier option. This is not politics; this is math.”

He called the situation a “death spiral.” Suddenly, millions of Americans were learning what a basket case the Puerto Rican economy has become. It is indeed a crisis but one that was, to an embarrassing extent, made right here in America.

It was foisted on Puerto Ricans by one lousy New Dealer in particular. His name was Rexford Guy Tugwell.

More on the egghead Tugwell in a moment, but let me bring everybody up to date on just how bad things are down there. Be sure to read to the end because there’s a silver lining in this very dark cloud.

Puerto Rico has been in a funk for a good while. Its stubbornly high, double-digit unemployment rate is more than twice that of the United States. In fact, it hasn’t been below 9.7 percent in 40 years.

The island’s debt is higher on a per capita basis than that of any US state and four times that of Detroit, which went bankrupt two years ago. Businesses are collapsing. People are fleeing (200,000 have left since 2005). Almost half of the island’s 3.7 million residents earn incomes under the US federal poverty line. Nearly 40 percent of all households get food stamps. Until recently, the retirement age for government school teachers was as low as 47, prompting underfunded pension fund crisis so endemic to welfare states. (The retirement age has lately been raised to at least 55 for current teachers, and 62 for new teachers.)

As Tyler Durden explains at ZeroHedge.com, policies imposed from Washington must shoulder a big part of the blame for this mess: the wizards on the Potomac encouraged debt and deficit spending, priced hundreds of thousands of Puerto Ricans out of entry-level jobs with a punishing minimum wage, taxed and regulated commerce and investment to a crawl, and showered the island with debilitating welfare. The place would be a showcase of government-induced prosperity except for one sticking point: government.

All of this has been decades in the making, which brings me to the character named Tugwell. I’ve long had a distaste for this pompous meddler. The more I learn about his role as Puerto Rico’s appointed governor (1941–1946), the more I’m ashamed that a US president was dumb enough to put him in charge of anything.

I first heard of Tugwell as an undergraduate economics major at Grove City College in the early 1970s. Fascinated by what my econ prof, Dr. Hans Sennholz, had said in class about America’s 22nd and 24th president, Grover Cleveland, I checked out a biography of him. It carried the imaginative title, GroverCleveland, and included a revealing subtitle, A Biography of the President Whose Uncompromising Honesty and Integrity Failed America in a Time of Crisis.

The author was Rexford Guy Tugwell, widely regarded as the most influential ideologue of economic planning during Roosevelt’s New Deal. The Cleveland terms were largely wasted opportunities, according to Tugwell, because Cleveland would not turn the economy into his personal plaything. If only he had trashed his honesty and integrity, Cleveland could have been the scientist and the rest of us the lab rats.

Tugwell was the Jonathan Gruber of his day. (Recall the smug academic who admitted that deception was employed to fool stupid Americans into supporting Obamacare.) He went straight from academia as a student (the Wharton School at U-Penn, then Columbia) to academia as a professor (University of Washington, American University in Paris, and Columbia University). His intellectual mentors were socialists like Upton Sinclair and Edward Bellamy. Woodrow Wilson’s wartime administration gave him his first real glimpse of the glorious fun of central planning, and he loved it even when it flopped.

In 1932, President-elect Franklin Roosevelt invited Professor Tugwell to join the first White House “brain trust.” These were the whiz kids — the social scientists and experimenters of the administration. Blessed with power and attention, they were ready to “transform” America and “plan” our way out of the Great Depression.

H.L. Mencken was less charitable in his description. He called them “an astonishing rabble of impudent nobodies,” “a gang of half-educated pedagogues, starry-eyed uplifters and other such sorry wizards.” Along with FDR, they “planned” the Depression into the longest slump in American history.

Tugwell loved to set up and run what came to be known as “boondoggles.” He was an architect of the Agricultural Adjustment Act and later director of its Agricultural Adjustment Administration (AAA), which taxed agricultural processors and used the revenue to destroy crops and cattle to raise prices. It was declared unconstitutional by the Supreme Court and ridiculously destructive by clear thinkers.

From its inception in 1935, he directed the Resettlement Administration (RA), which relocated the rural unemployed to new, planned communities in suburbs. Urban authority Jane Jacobs, in her classic The Death and Life of Great American Cities, showed that his program simply displaced people and ruined neighborhoods. The RA was also thrown out as unconstitutional. True to the statist stereotype, Tugwell learned nothing from either experience. “Planning” was his religion and he was going to be its high priest, come hell or high water.

In 1936, Tugwell left Washington and two years later showed up as the first director of the New York City Planning Commission. He tried retroactively to enforce nonconforming land uses with almost no legal or public support. He proved too much an ideologue even for the polarizing Robert Moses, who killed Tugwell’s 50-year, pie-in-the-sky master plan for public housing.

Now let’s get back to Puerto Rico.

By 1941, Rexford Guy Tugwell had behind him a 20-year career of pontificating for big government and managing expensive government flops. Somehow that gave Franklin Roosevelt the idea of naming him governor of Puerto Rico. What Tugwell did for the mainland, he could now do for an island. Maybe this central planning stuff works better if you work small, right?

Nope.

So for five years, Professor Tugwell became Governor Tugwell. One of the first things he did was to create, with the legislature’s approval, the Puerto Rico Planning, Urbanization, and Zoning Board in 1942. If only he had done what John Copperthwaite did later in Hong Kong or what Ludwig Erhard did in postwar Germany or what inspired free marketers have done in freeing their cities, Puerto Rico might today be a beacon of liberty and prosperity. But Tugwell wanted to plan, plan, plan.

Pedro Serra is president of a new organization in Puerto Rico, the Alliance for the Protection of Liberties. He is a businessman from San Juan whose interest in free-market economics led him to work with the 2012 Ron Paul campaign. Looking back on the Tugwell period, he observes,

When President Roosevelt appointed Rexford G. Tugwell governor of Puerto Rico, it was in keeping with the same economic attitude that characterized the New Deal — that the government can solve an economy’s woes. Our government has since taken as an axiom that economic stagnation results from too little government, not too much. If this were the case, then today’s Puerto Rico should be paradise on earth. Instead our economy is depressed, our people jobless, and our government bankrupt.

Climate would seem to have blessed Puerto Rico for agricultural pursuits. Tugwell’s infinite wisdom suggested it should opt for industry instead, so he directed public policy against farming and toward manufacturing. He lobbied for all the aid and welfare from the mainland he could get. He set the tone for decades of a top-down welfare state. Joe Milligan, a colleague of Serra’s, is originally from Rochester, Michigan, and now brings his passion for free markets to San Juan, Puerto Rico, as the director of development for the Alliance for the Protection of Liberties. Here is how Milligan sums it up:

Governor Tugwell’s legacy is alive and apparent on the island. His tenure in office was characterized by central planning, government growth, and expansion of the welfare state. He stamped out the thriving sugar cane and coffee industries in favor of manufacturing. The result is that now we have neither. Today in Puerto Rico our government is the island’s largest employer and half of all residents require government financial assistance to subsist. In this sense Governor Tugwell truly left his mark.

Indeed, for many years after Governor Tugwell left Puerto Rico for academia back in the United States (where failure is celebrated as long as you worship the state and have good intentions), other New Dealers sojourned to the island to offer more of the same.

One of them was Hugh Barton, who had directed the US State Department’s Office of Strategic Services until he was fired for his knowledge of the communist affiliations of some of his top staff. Barton set up shop with the Puerto Rico Planning Board and the Office of Economic Research. If you had a college degree and a penchant for planning the economy of other people, you could get a government job in Puerto Rico in the 1950s and ’60s. Except for a brief retrenchment under one-term Governor Luis Fortuño, Puerto Rico has been run for decades as Tugwell first envisioned it, exacerbated by Washington’s poor policies to boot.

As I promised early in this article, there’s some good news in this bleak course of events. Puerto Rico now has a nascent libertarian movement and an organization devoted to spreading ideas of liberty as an antidote to the Tugwell legacy — the Alianza para la Protección de Libertades (Alliance for the Protection of Liberties) that Pedro Serra and Joe Milligan have launched.

The Alliance seeks to improve the lives of Puerto Ricans by building a new consensus around this proposition: a free society — not a centrally planned, politicized one — is a more prosperous and tolerant society. It works to build public support for smaller government and advise policy makers in choosing the proven path toward prosperity. The Alliance’s programs include developing a college campus lecture circuit, starting a YouTube channel specific to Puerto Rico’s issues, and disseminating compelling literature to legislators.

Never let a crisis go to waste, as the saying goes. Puerto Rico represents a unique opportunity to undo a painful, statist history. I hope readers will want to help.

To support the efforts of the Alliance, email Pedro Serra, the director, at pedro@protecciondelibertades.org.

“The curious task of economics,” Austrian economist F.A. Hayek taught us, “is to demonstrate to men how little they really know about what they imagine they can design.”

Rexford Guy Tugwell never understood that. With the help of the Alliance for the Protection of Liberties, Puerto Ricans may yet embrace Hayek’s wisdom and thereby shake the curse of Tugwell.

Lawrence W. Reed

Lawrence W. (“Larry”) Reed became president of FEE in 2008 after serving as chairman of its board of trustees in the 1990s and both writing and speaking for FEE since the late 1970s.

Hillary Clinton’s Ideological Vortex of Power and Planning by Jeffrey A. Tucker

July 31, 2015/1 Comment/in Culture War, Elections, Featured, Policy, Politics, Regulation /by Foundation for Economic Education (FEE)

Just trust her. Truly, just trust her: to know precisely how much energy we ought to use, where it should come from, how it should be generated, how we should get from here to there, and the effects that her plan will have on the global — the global! — climate, not just in the near term but decades or a century from now.

If you do this, you will have embraced “science,” “reality,” “truth,” and “innovation,” and, also, “our children.” If you don’t go along, you not only reject all those good things; you are probably also a “denier,” the catch-all epithet for anyone doubtful that the brilliance of Hillary Clinton and her czars know better than the rest of humanity how to manage their energy needs into the future.

Hillary’s campaign seems designed to prove that F.A. Hayek was a prophet.

That brilliant economist spent 50 years explaining, in book after book, that the greatest danger humanity faced, now and always, was a presumption on the part of intellectuals, politicians, and bureaucrats that they know better than the emergent and evolving wisdom of social forces.

This presumption might seem like science but it is really pretense. Civilization arises from, is protected by, and advances through the dispersed knowledge of billions of individual decision makers and the institutions that arise from them.

Hayek called the issue he was investigating the knowledge problem. Society needs to know how to use scarce resources, how to navigate a world of uncertainty, how to form rules that turn struggle into peace. It is a problem solved through freedom alone. No ruler, no scientist, no intellectual can substitute for the evolving process of decentralized decision making and trial and error.

The message is bad news for people like Hillary, who is supposed to embody the ideology called “liberalism” in America. Yet it is anything but liberal. It seems to know only one way forward: more top-down control. That’s a tough sell in times when everything good so obviously comes from anything but government, and, meanwhile, governments are responsible for every failing sector from health to education to foreign wars.

But here’s the problem. People like Hillary Clinton are stuck in an ideological vortex with no way out. Government planning is their thing, and they refuse to recognize its failures. So they press on and on, even to the point of preposterous implausibility, such as the claim that government can know everything that is necessary to know in order to plan the entire energy sector with the aim of managing the climate of the world.

Economist Donald Boudreaux puts matters this way: “why should someone who cannot ensure the proper use of a single private server be trusted with the colossal power necessary to design and to oversee the remaking of a trillion-plus dollar sector of the U.S. economy (a sector, by the way, in which this person has zero experience)?”

With this presumption comes the inevitable hypocrisy.

After unveiling her plan to ration energy use and plaster the country with solar panels, Ms. Clinton boarded a private jet that uses more fuel in one flight hour than I use in a year. “The aircraft, a Dassault model Falcon 900B, burns 347 gallons of fuel per hour,” wrote the muckraker who did a public service in exposing this. “The Trump-esque transportation costs $5,850 per hour to rent, according to the website of Executive Fliteways, the company that owns it.”

Notice how rarely it is mentioned that the US military, with hundreds of bases in over a hundred countries, is the worst single polluter on the planet. If we really believe in human-caused climate change, this might be a good place to start cutting back. But no, there’s not a word about this in any of Hillary’s plans. Government gets to do what it must do. The rest of us are supposed to pay the price, bicycling to work and powering our homes with sunshine and windmills.

When I first read about her energy plan, my response was: Why would any self-interested politician make the need for reduced living standards a centerpiece of her campaign? After all, her speech was made in a setting piled high with bicycles (oddly reminiscent of Mao’s China), while demanding a precise path forward for energy and everything that uses it (oddly reminiscent of Lenin’s first speech after he took control of Russian economic life).

As it turns out, people aren’t that interested. Sure, most people tell pollsters that they favor renewable energy to stop climate change. You have to say that or else risk being denounced as a denier. On the other hand, it seems like very few people really care enough to forgo the benefits of modern life, which is probably what will save civilization itself from plans like hers. Note that days after release, her pompous video only had only 54K views — pathetic given her celebrity and how much money her campaign is spending, but encouraging that nobody seems to put much stock in her plan for our future.

It’s extraordinary how quickly one branch of the political class has leapt from the delicate and ever-changing science of climate monitoring to the absolute certainty that extreme and extremely specific application of government force is the way to deal with it. Writes Max Borders: “The sacralization of climate is being used as a great loophole in the rule of law, an apology for bad science (and even worse economics), and an excuse to do anything and everything to have and keep power.”

The last point is critical. Everything done in the name of public policy in our lifetimes has become a handful of dust, yielding little more than unpayable debts and unworkable programs, and leaving in its wake an apparatus of compulsion and control that robs society of its inherent genius.

What to do? Give up? That’s not an option for these people. Instead, they find a new frontier for their schemes, a new rationale to sustain a failed model of social and economic organization.

I can think of no better words of rebuke but the closing of Hayek’s Nobel speech in 1974:

If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible.

He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants.

There is danger in the exuberant feeling of ever growing power which the advance of the physical sciences has engendered and which tempts man to try, “dizzy with success”, to use a characteristic phrase of early communism, to subject not only our natural but also our human environment to the control of a human will.

The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men’s fatal striving to control society — a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

Yes, it surely ought to.

Jeffrey A. Tucker

Is Politics Obsolete? How People Outpace Politicians by Max Borders and Jeffrey A. Tucker

July 29, 2015/0 Comments/in Commentary, Elections, Politics /by Foundation for Economic Education (FEE)

Hillary Clinton talks of cracking down on the gig economy. Donald Trump speaks of telling American corporations where they can and can’t do business abroad. Bernie Sanders says we have too many deodorant choices. They all speak about immigrants as if it were 1863.

What the heck are these people talking about?

More and more, that’s the response many people have to the current-day political speeches and rhetoric. It’s a hotly contested election, somewhat like 2008, but this time around, public engagement is low, reports Pew.

That’s no surprise, really. Whether it’s the leftists, the rightists, or everyone in between, all of these politicians seem to be blathering about a world gone by — one that has little to do with the 21st century. If they’re not tapping into people’s baser instincts of fear and nativism, they’re dusting off 20th-century talking points about creating “good jobs.”

Maybe there was a time when the political culture seemed to keep up with the pace of innovation. If so, those times are long gone. The rhetoric of electoral politics is exposing the great rift in civic life.

The tools we use every day, the technologies we love, the way we engage each other, the means by which our lives are improving are a consequences of innovation, markets, community, and globalization — that is, by the interactions of free people. Not by politics. And not by the systems politics creates.

The political election is a tired old ritual in which we send our hopes and dreams away to distant capitals. Why do we outsource them to politicians, lobbyists, and bureaucrats: people who are trapped in a system that rewards the worst in people? What’s left of governance is logrolling, spectacle, and unwanted interference in the lives of everyone else.

Politicians seem more concerned with putting the genie of innovation and entrepreneurship back in the bottle than doing anything meaningful. After the election, we try our best to ignore them and get on with life.

Politicians seem more concerned with putting the genie of innovation and entrepreneurship back in the bottle than doing anything meaningful.

In 2012, US voters reelected Barack Obama, and now we’re gearing up to elect someone else. Candidates will talk about their visions and their wonderful plans for the country. But in the last three years, virtually none of the incredible, beautiful upheaval we’ve seen has had anything to do with the presidency or with anyone politician’s plans.

In fact, when you think about what government has done for us in recent years, only one new program comes to mind: Obamacare. Opinions vary on whether that program has been deeply disappointing or an unmitigated disaster.

Now, take a step back and observe the evolution of commercial society and how it is bringing us unprecedented bounty. The digital sector of emergent, market-generated, people-driven, technology-fueled innovation is fulfilling human aspirations and spreading useful services to people in all walks of life. National borders seem ever more arbitrary. Surprises await us around every corner. Our political systems can claim credit for none of it.

And yet, we are once again being asked to turn to politicians to drive progress.

Consider how much our lives and technologies have changed since the last presidential election. Smartphone ownership has gone from 300 million to 2 billion, meaning that most of the population of the developed world — and large parts of the rest — now have access to a wireless supercomputer in their pockets. As a result, we are more in touch than ever.

There are now dozens of ways for anyone to keep in contact with anyone else through text messaging and video, and most of the services are free. Transportation in cities has fundamentally changed due to ridesharing and app-based systems that are outcompeting municipal taxis. Traditional travel lodging has been disrupted through mobile applications that turn every empty room into a hotel, and finding permanent lodging is easier than ever. You can find the ratings for any service or establishment instantly with a click or a tap, long before you purchase. You can feasibly shop for and buy a house without ever having stepped inside of it.

Cryptocurrency is becoming a viable alternative to national monies, and payment systems on distributed networks are being customized for peer-to-peer exchanges of property titles.

The mass distribution and availability of mobile applications with maps means that you are never lost, and, moreover, that you can be intensely aware of everything around you, wherever you are or wherever you are planning to be. Extended families that are spread out over large geographic regions can stay constantly in touch, chatting and playing games.

The way we help our neighbors and communities is improving. We can contribute to charitable causes with just a click. We are closer to our neighbors and their needs — whether it’s a missing cat, a call for a handyman, or childcare for Saturday night. We can be on the lookout after a break-in and share video of the perpetrators instantly.

The way we consume music has fundamentally changed. We once bought CDs. Then we downloaded particular tracks and albums. With Internet everywhere, we now stream a seemingly endless variety of genres. The switch between classical and indie rock requires only a touch. And it’s not just new music we can access, but vast archives and recreations of music dating to antiquity. Instantly.

Software packages that once cost thousands are now low-cost downloadable apps. Many of us live in the cloud now, so that no one’s life is ruined by a computer crash. Lost hardware can be found with built-in tracers — even stealing computers is harder than ever.

Where we work no longer matters as much. 4G LTE means a powerful Internet connection wherever you are, and WiFi on airlines means staying in touch even while above the clouds. Online document signing means total portability and the end of the physical world for most business transactions. You can share almost anything — whether grocery lists or whole writing projects — with anyone and work in real time. More people than ever work from home because they can.

News is now crowdsourced through Twitter and Facebook — or through mostly silly sites like BuzzFeed. There are thousands of competitors, so that we can know what we want to know wherever we are. Once there was only “national news”; now a news event has to be pretty epic to qualify, and much of the news that we are interested in never even makes old-line newspapers.

Edward Snowden revealed ubiquitous surveillance, escaped prosecution, and now, thanks to technology, has been on a worldwide speaking tour, becoming the globe’s most famous public intellectual. This is despite his having been censored and effectively exiled by the world’s biggest and most powerful state. He has a great story to tell, and that story is more powerful than any of the big shots who want him to shut up.

Pot has been effectively legalized in many American cities, and the temperature on the war against it has dropped dramatically. When dispensaries are raided, the news flies all over the Internet within minutes, creating outrage and bringing the heat down on the one-time masters of the universe. There is now a political risk to participating in the war on pot — something unthinkable even 10 years ago. And as police continue to abuse their power, citizens are waiting with cameras.

Oil prices have collapsed, revealing the fallacy of peak oil. This happened despite pressure in the opposite direction from every special interest, from environmentalists to the oil industry itself. The reason was again technological. We discovered better and cheaper ways of drilling, and, in so doing, exposed vastly more resources than anyone thought accessible.

At the very time when oil and gas seemed untouchable, we suddenly saw electric cars becoming viable options. This was not due to government mandates — regulators tried those for years — but due to some serious innovation on the part of one remarkable company. It’s not even the subsidies, such as they are, that are making the difference; it’s the fine-tuning of the machine itself. Tesla even took it a step further and released its patents into the commons, allowing innovation to spread at a market-based pace.

We are now printing houses in one day, vaping instead of smoking, legally purchasing pharmaceuticals abroad, using drones to deliver consumer products, and enjoying one-day delivery of just about everything.

In the last four years, the ebook became a mass consumer item, outselling the physical book and readable on devices within the budget of just about everyone. And despite attempts to keep books offline, just about anything is now available for download, putting all the world’s great literature, in all major languages, at our fingertips.

Here we go again, playing “let’s pretend” and electing leaders under the old-fashioned presumption that it is politics that improves the world and drives history forward.

And speaking of languages, we now have instant access to translation programs that allow us to email and even text with anyone in a way he or she can understand regardless of language. It’s an awesome thing to consider that this final barrier to universal harmony, once seen as insuperable, is in the process of melting away.

These are all ways in which the world has been improved through markets, creativity, and free association. And yet, here we go again, playing “let’s pretend” and electing leaders under the old-fashioned presumption that it is politics that improves the world and drives history forward.

Look around: progress is everywhere. And it is not because we are electing the “right people.” Progress occurs despite politics and politicians, not because of them.

Max Borders

Max Borders is the editor of the Freeman and director of content for FEE. He is also cofounder of the event experience Voice & Exit and author of Superwealth: Why we should stop worrying about the gap between rich and poor.

Jeffrey A. Tucker

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

July 28, 2015/0 Comments/in Commentary, Culture War, Policy, Politics /by Foundation for Economic Education (FEE)

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