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The FED is Trapped

Current AffairsPosted by Nico Metten Sun, September 20, 2015 12:51:34
The long anticipated 17th September final came. A lot of people thought that this would be the most important date of the year. The FED suggested that on this day they might final start raising rates from its 0-0.25% range by 25 basis points. And unfortunately, many people still take this committee of central planners seriously. They didn't raise, in case you wonder. And I doubt that they will be able to raise in the future.

The reality is that the FED is trapped. The keynesian claim that it is possible to print an economy to prosperity simply is not true, in other words it is a lie. This lie however is so sweet that many people just really want to believe it. But the difference between reality and the keynesian model is slowly getting so absurd that even the biggest dreamer cannot ignore it anymore. And so this Thursday was probably a big steps towards waking people up.

The fact is that the US government has to cook the books to even make it look like there is a mild recovery going on. The measure of inflation is constantly redefined, to make it look lower than it is. This is done for example by so called Hedonic Adjustments. If a product in the basket of goods that is suppose to measure inflation is getting more expensive, it is simply being replaced by another that has not gone up in price and that the government thinks is equally good. So if for example beef is in the basket and goes up in price, but chicken is not in the basket and does not go up, then beef is replaced by chicken in the basket. The idea is that consumers can then substitute chicken for beef and therefore do not experience inflation. So you better like chicken! A cheeky trick to get a lower inflation rate. And that is just one of them.

The unemployment rate is another important statistic that is manipulated. If someone hasn't found work in one year he is simply kicked out of the statistic as if he is no longer looking. That way the US now has an official unemployment rate of 5.1%. This, by historic standards is a really low rate that suggests that almost everyone who wants a job will find one. A good statistic to show how absurd this number is, is the labor participation rate, that means the rate of Americans in employment. That rate is at an almost historic low of 62.6%. How does that go together? The answer is that 5.1% unemployment is a fantasy.

Remarkable is that despite all the manipulation going on, the official growth of the US economy is only about 2% per year. That is of cause measured in GDP, which is a completely useless unit of measurement in itself. GDP does not measure the productivity of the economy. All it measures is the amount of money that is circulating. That means that if for example the government spends money, even borrowed money, it will show up as GDP growth, independent of how productive the money is spend. The government could employ people to dig ditches and others to fill them up again. The productivity of this work would obviously be negative, but GDP would still go up. GDP also goes up when unproductive asset prices like house prices go up. Amazingly, even though GDP can be manipulated, all the intervention by the government have not managed to get this statistic significantly up.

The FED is trapped. The interest rates in the US have been at 0% for over 80 month. In addition to that the FED has pumped over 3 trillion Dollars of printed money into the economy. And all that has done is to create official growth number of about two percent. The only effect it really had is the inflation of huge bubbles in bonds and equities. The reason for that is that the economy is simply at peak debt. Even at these low interest rates, people and companies cannot borrow more money, because they already have too much debt. The only people who can still borrow money are the financial sector who really gets this money for free and of course the government. Since they cannot kick start the economy again, the official line has been that as long as the stock market is OK, the rest of the economy cannot be too bad.

The trouble is that these bubbles are dependent on cheap money. In order to keep them inflated not only do interested rates have to stay as low as possible, they will soon have to start a new round of money printing. That is a problem, because in the long run, printing money will undermine the trust in the US Dollar. So far that has not happened, because the FED could make everyone believe that it has an exit strategy. Once the US economy is growing, it will hike rates again and buy back all the printed money.

But as I explained above, the US economy is very weak and based on debt. Therefore, if debt gets more expensive the rest of what looks like a productive economy will simply implode. If however they do not hike rates, then more and more people will realise that the exit strategy is not real. Therefore it will undermine the confidence in the Dollar. That way the US economy will also implode. So no matter what they do, it looks like that keynesianism has finally checkmate itself. With this month FED decision to rest rates at 0%, more and more people will realise that the economy is worse than it seems and that the FED is not really in control of the markets.

My guess is that they will not hike rates voluntarily. Eventually of course the market will force them to. There is a small possibility that they will raise rates by 25 basis point in the next few month, but even that is unlikely. The reason is that if they do raise rates, the economy will implode and they will immediately have to reverse the rise. That will make it look like they do not know what they are doing and undermine their credibility. And they cannot really raise rates without a really strong economy, because the US government is highly indebted too. That is the difference to 1981, when then FED chairman Paul Volcker raised rates to 20%. At that time the US government did not have a debt problem. Now they have one and if the economy implodes, tax revenues will go down and dept/GDP numbers will rise, making the debt situation of the government worse. If simultaneously interest rates go up, the government will quickly have to declare bankruptcy. And since the government has more guns than anyone else, they will get the policy that is best for them, that is low interest rates and lots of money printing. So hold on to your hats, there is an inflationary storm coming.

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Debunking Hoppe on Immigration

PhilosophyPosted by Nico Metten Thu, July 23, 2015 13:32:00
Hans-Hermann Hoppe is known for his skepticism of open borders. He thinks that open borders are inconsistent with libertarian principals. Therefore, real libertarians have to oppose this policy, at least as long as the state exists. I think Hoppe is mistaken on the issue. His arguments seem deeply confused and I am going to show why. As he claims to be a libertarian and the state is basically illiberal, then in order to make a supporting statement of a very intrusive state policy like immigration, his argumentation just has to be very messy. There is no real case for the support of this policy. To show exactly how this works, let us look at two of his articles on immigration.

Recently, LewRockwell.com re-published two of such articles. The first was entitles “Free Immigration is Forced Integration” and the second “Immigration and Libertarianism”. Let us start with the first, “Free Immigration is Forced Integration”.

In this articles Hoppe tries to make essentially one argument. The argument is that “free” immigration violates the property rights of the locals and can therefore not be libertarian. To get to this conclusion, Hoppe needs to distract the reader with a number of argumentative tricks to make it look like, his conclusion follows from his premises.

Let us go through the article systematically. The article is divided into 7 parts. He starts by summarizing what he describes as “the classical argument for free immigration”. I am not sure if there is such a thing as “the classical argument”. There are definitely a number of different arguments in favour of open borders. Hoppe, in a side note even concedes this in the second part of the article. But he makes it incorrectly look like this is another route to dispute the open border claim by calling it a “first shortcoming” of the free immigration argument. No, what Hoppe calls “the classic argument” for free immigration, is merely the economic argument for it. But fair enough, it is an important argument and Hoppe, as far as I can tell summarizes it correctly. He also explicitly agrees with the idea that free immigration does not cause economic problems. He understands correctly that this would be an argument against free markets in general.

In the second part of the article, he then goes on to say that trying to criticise open borders by pointing out negative effects of the welfare state is also not persuasive. These are problems of the welfare state and not of open borders in and of itself. I think this is correct. If the welfare state or for that matter any other state policy leads to negative effects of freeing up markets, then libertarians should attack these policies and not the freeing up of markets. So far, Hoppe seems to make the case in favour of open borders. One thing that is important to note until this point is, how he uses the word 'free'. The word 'free' is used in the libertarian sense of “free from constrains”.

Now, from the third part of the article, Hoppe starts making the libertarian case against free immigration. His argument is that in an anarcho-capitalist society, everything worth owning is already owned. Therefore, there cannot be freedom of immigration. So the property prevents the freedom. Wait a minute, what? Why is property in contradiction with freedom? This is a strange argument coming from the founder of The Property and Freedom Society. But maybe they serve free alcohol there? But seriously, isn't the whole point of libertarianism that property and liberty are closely linked with each other? How can Hoppe make the argument that since we have property, there cannot be freedom. That sounds very confused to me. It should be clear that Hoppe at this point has started to use the word freedom in a non libertarian way, as in 'free of charge'. He argues that we have property, therefore immigration cannot be free of costs. In this sense of the word however, libertarianism is also in contradiction with free markets. A free market would be a market in which everyone can help themselves to everything they like, free of charge. That clearly is not libertarian. That is more a socialist way of using the word freedom. Libertarians explicitly stress that their idea of freedom is to be free from proactive impositions from others. Even more remarkable is that Hoppe just a few sentences earlier has used the word in exactly this libertarian meaning. And now he just changes the meaning of “free” without even telling the reader about it. One wonders why? Is he not smart enough to realise that he is using the word with the different meaning, or is he speculating that his audience won't be? I don't know the answer, but I know that at least one of the two needs to be true.

So let me make clear, what a libertarian like myself means when talking about “free immigration”, or for that matter immigration. Immigration is a collectivist term. It means the movement of people over some form of collectivist borders. These can be cultural borders or state borders. As such it is not always completely clear when to call the long term reallocation of a person to another location immigration and when he is just moving house. Simply moving house from Charles Street a few miles down the road to Summer Lane is usually not called immigration.

In today's statist world, immigration is usually understood to mean the long term reallocation of a person from one side of a state border to another. Free immigration therefore means that people who would like to make such a move are free from not interpersonal liberty maximising compatible restrains. The biggest of such restrains right now is state immigration controls. These come in the form of state issued passport controls at state borders and visa licensing systems that allow the state to control who is on its territory for how long and what reason.

I am not trying to argue about words. If Hoppe has a problem sticking to a consistent meaning of a word let us just argue about the meaning itself. Can we agree that the state is violating people's liberty with these types of policies or not? And can we therefore agree that these policies have to go unconditionally or not? Unfortunately, Hoppe seems to really believe that state immigration controls, to some degree are not in violation of liberty. However, as I argue above, the attack on open borders via redefining the word 'free' can hardly be taken seriously. So what other arguments does Hoppe have?

Although, not so fast. At first he seems to continue the article, explicitly rejecting state immigration controls as unnatural in part four. However, immediately after he has done so, he starts to develop a new way of arguing that current immigration is violating the liberty of people. Hoppe says that since we have a state, that state then employs policies like building roads that are not market results. This distorted market will also have a distorting effect on immigration. And this is what he calls forced integration, because we now have more roads than we would otherwise have and therefore the locals have to put up with more immigrants than they would normally get.

This is a really odd argument in many ways. To start with, he seems to contradict himself. In part two of the article, he argued that trying to argue against immigration with the welfare state would not be convincing, as this is a problem of the welfare state, which will have to go. But now he is applying the logic that he himself rejected earlier, to do just that. If immigration leads to problems with other state policies than libertarians need to argue against these policies instead of making themselves advocates of more statism.

But his argument is also not economically correct. Yes, the state is distorting the economy. But it is hard to tell what the exact market result would have been. How does Hoppe know, that we now have more streets then we would otherwise have? If we could figure that out without the market, then we would have a pretty good argument in favour of central planning. Maybe the opposite is the case. Maybe now, we have less roads than we would otherwise have. In that case the same argument would lead to the opposite conclusion of forced exclusion. As a scholar of Austrian economics, he should know that?

Next he argues that in today's world the government and not the market is fully in charge of admitting people. That however, seems simply wrong. Behind the state borders, especially domestic property is still mostly owned privately. So despite the fact that we have state borders, the control over who comes into the country is still to a large degree in the hands of the market of that country. Without anyone renting out or selling a property to the immigrant, the immigrant still has a problem. But there does not seem to be a shortage of people doing that and I cannot see why there would be a shortage without border controls. Quite to the contrary, with the freeing up of markets it is reasonable to assume that accommodation could become cheaper as productivity increases.

Hoppe however argues that immigration controls lead to forced integration and forced exclusion. I can see how immigration controls are forceful exclusions. If a property owner on the inside of the fence would like to invite someone, the government can prevent this. That is why it is not libertarian. I find it harder to see a case of forceful integration. If the government lets someone through the state border, the people inside the fence can still say no to the person. And if everyone does, then the person would have simply nowhere to go, even in today's worlds. In order for this to be forced integration, it would need to be the case that someone is invited by the government and the government gives that person an accommodation. This does not seem to happen very often. If it does however, it is indeed not libertarian. But then again, instead of establishing general border controls and a visa system, the way to deal with that would be to abolish these state programs too. In fact, in this case, border controls and visas are clearly of no importance, as this obviously happens with or without these policies in place as well. So Hoppe is simply wrong if he concludes that it is the immigration controls itself that lead to forced integration.

Up to this point in the articles Hoppe has failed completely to establish an argument in favour of libertarian state border controls. However, in the remaining three parts, his arguments actually get a lot worse. While up unit now, he at least tried to make it look like he was making a consistent argument, he completely loses this in what is coming. It is a mixture of wild speculation and false conclusions that is not concerned with principals or consistencies. Let us have a look at it.

In part five he argues that if we had an absolute monarch that owned the whole country, then we would get similar results to free market immigration. It is beyond me how he comes to this bizarre conclusion. I guess, his line of thoughts goes something like this: Libertarianism is about property. If we had a single ruler, then the country could be seen as property. Therefore this would produce similar results to free markets.

Just like in the case of the word 'free', Hoppe has probably confused himself with words. He calls both property and therefore it becomes the same thing. He does not seem to realise that a King owning a country has absolutely nothing to do with property as being advocated by liberty loving libertarians. To be fair, a lot of libertarians do not understand the link between liberty and property. They therefore cannot distinguish between liberty maximising and non liberty maximising property. They simply think liberty is property. And Hoppe's argument is probably a result of that confusion.

But at the very least, he should realise that it is very dangerous to even just approximate a head of state to a private property owner. This is an argument often done by statist who want to justify things like taxation and regulations. They will argue that really no one owns anything, everything is owned by the state and therefore the state can tell you what to do with it or even take it away from you.

He continues this strange argument into part six, where he approximates a democratic government as the owner of the country. But since this owner, is not a single person anymore, but a changing committee, it will produce very different immigration rules than a king, so he argues. Fair enough, but what does that have to do with libertarianism? The state simply should go out of the way. The problems of immigration that Hoppe correctly or not incorrectly describes in this part are not problems coming from open borders, but from other state policies. And as he himself argued in part two, that is not a good argument against open borders.

He also takes this ownership analogy way too far, as if the democratic state would directly allocate people into properties. The reality however is, that this rarely happens. Most of the residential properties in the US as well as all the other western countries are owned privately. The state in such an environment going out of the way is just a policy of liberty.

Finally in part seven, he comes to a conclusion. This is not a logical conclusion. His argumentation so far was all over the place. He uses words in different meanings as it suits him in every given sentence. He wildly speculates about results of all kinds of systems and presents the conclusions of his speculation as market results if he likes them. And he simply is not very bothered with contradicting himself. In one word, his argumentation is a big mess. And so he concludes not what has followed, but what he wanted to conclude all along; that as long as the state exists (and to his credit, he stresses that the state will have to go), libertarians need to support certain state immigration policies which Hoppe thinks are close to market results. This is nonsense and I cannot see that he has even come close so far to an argument that would justify such a conclusion on libertarians principals.

A similar mess is the second article, “Immigration and Libertariansm”. Here he repeats a lot of the arguments that we have already seen. However, he makes some new ones. But first he start by attacking “left-libertarians”. He suggests that those are not real libertarians. I can see some people who might be called left libertarians that really are not, like Noam Chomsky. However, Hoppe never explains who exactly he means by that. But from the article, it seems that if you believe that the state should get out of the way of immigration unconditionally, then you are a left libertarian as opposed to just a libertarian. Silly attempt of an ad hominem attack.

His new arguments are first, that one could see the state as a trustee of all its citizens (he seems obsessed with constructing arguments that present the government as legitimate property owners. He never talks about liberty, property is clearly all he knows). On the basis of this argument he then goes on to outline what he thinks a sensible immigration policy would be. By that he means, what he would like to see. It is not at all clear why his proposals should be the results of a trustee.

Seeing the state as a trustee of its citizens is of course absolute nonsense from a libertarian point of view. Again, this is exactly the kind of nonsense that statist are trying to sell us. The state is not a voluntary and therefore legitimate organisation that can legitimately make decisions on behave of its citizens.

Hoppe actually concedes that seeing the state as a trustee is not a good way of looking at it. But his reason for that is really strange. He does not reject the idea because it violates people's liberty, no. He think this is a bad analogy because we don't see the immigration policies that he thinks we should see, as Hoppe sees them as market results.

In reality, since the state cannot be seen as a trustee, any policy that comes out of the state restriction the free movement of people on the basis of private property has to be seen as illegitimate, no matter what these policies are. And Hoppe never comes up with an example of the state actually violating the property of domestic people by letting “foreigners” through the state gate. Sure there are plenty of other policies in place that do violate private property rights. But those are separate policies from immigration controls.

Policies like the welfare state, which he goes on to blame for some negative effects on immigration. The welfare state might or might not produce these effects, the case is actually a lot less clear than he might think. In any case, Libertarians are not advocating welfare, just open borders. And again, Hoppe himself rejected the argument of conflating the two in his other article, so why does he bring it up here?

At one point he actually not only concludes that immigration is bad for the welfare state, but that “a financial crisis of unparalleled magnitude would result”. This is really beneath Hoppe. There is not a shred of evidence that immigration is causing economic problems. If it did, it would be an argument against free markets in general. And as we have seen above, Hoppe knows this very well.

It is a bit difficult to make a clear conclusion from all of this. Why is Hoppe coming up with such a mess of an argumentation? Is he too stupid to realize what he is doing? He might be, but it is not the impression that I have of Hoppe. I think he knows what he is doing and he is doing it deliberately. It looks to me like that he knows that there is not a case for libertarian state border controls. But he really does not like the outcome of this particular free market policy. So he is deliberately creating a messy argumentation. That way he can suggest to the anti immigration crowd that they are ok rejecting immigration on libertarian grounds. And that crowd seems more than happy to ignore the mess and pick up the ball. On the other hand, if a critic comes along trying to suggest that he is not a libertarian, he will point to the sentences in which he says that he does not like the state and wants to get rid of it. But that does not change the fact that these sentences are in contradiction with lots of other things he writes. He is clearly trying to avoid that critics can easily pin him down. It is easy to pin someone down who has a good argument but is making little mistakes. Than a critic can point to the specific mistake. But if someone's arguments are all over the place, criticism becomes more difficult as it is difficult to find a starting point. It is also harder to totally dismantle the mess. And so he can create the illusion that, although he might have made a mistake or two, there still is a case for libertarian state border controls. This is nonsense, as I have shown.

I don't like what Hoppe is doing. He makes libertarianism look disingenuous. Libertarianism looks like statist conservatism, an ideology which, like all statist ideologies is only in favour of some freedom, but also has its favourite state programs. We do not have to trick people into Libertarianism. If we cannot argue honestly, this movement will fail.



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The Economics of Intolerance

EconomicsPosted by Nico Metten Thu, July 16, 2015 12:37:28
Libertarianism is advocating to maximize the liberty of individuals. The idea is that every person should have the right to be left alone as much as that is practically possible. Originally, I was under the impression that Libertarians must be people who have a lot of faith in human beings. That is because, one of the major arguments against liberty seems to be that a lot of people are simply not fit to make their own decisions in every aspect of their lives. They need to be forced or at least guided with some mild pressure to make the right choices. While libertarians will be quick to admit that people are not infallible and not all of them are decent, they nevertheless believe that even a superior elite group, or a single genius, cannot get the right personal choice better for the average or even below average person than the person can for themselves. They also believe that there are only a small amount of potential or real trouble makers. The vast majority of humans are basically good, trustworthy people. This to me, seems to be a very positive and optimistic view of humans.

Over the years however, I came to notice that libertarianism does seem to attract some people who are not particularity positive about humans in general. Their attraction to liberty seems to be two things. Firstly, they are attracted to the idea of liberty allowing them to reject others so they do not have to deal with a lot of humans that they do not like. In other words, it is the ability to dodge others, to be intolerant of those that they do not like, that is attracting some people to libertarian ideas. And secondly, they seem to have come up with the idea that economic forces will be an even stronger restrain on people's behavior than the state. In other words, they paint the picture of a libertarian society being mostly homogenous and conservative.

Their arguments never made much sense to me and I am going to explain why. I am going to argue that a libertarian society will most likely be very colorful and multicultural.

Let us start with the first argument that liberty is about the right to discriminate. It seems clear that we can only have absolute unrestricted liberty in a world of superabundance. But since we live in a world of scarcity, it is inevitable that our liberty will be limited by the liberty of others. What is the best way of maximizing the ability of people to be left alone in a world of scarcity? The libertarian answer to that is to grant people certain property rights. Only with these property rights, it seems possible to practically leave people alone at least to some degree. With property, I am at least able to do what I like with a small part of the real world, most importantly with my own body and life. Without property I would not be able to make any decision without asking all other people interested in the same property for permission first. Therefore, it seems correct to assume that property really does maximize liberty.

From this, the intolerance crowd will follow, “see, liberty is all about discrimination, therefore a libertarian society will see more of it”. Well, not so fast. Just because in principal you can do something, does not mean that it is always a good idea. Yes, it is absolutely true that liberty entails the right of people to exclude others from their property or business activity for very shallow reasons. But then liberty gives you the right to do all kinds of things. You could restrain from showering and being polite to other people. But from that does not follow that this is a good survival strategy. I would suspect that it is probably not.

People who stress the ability to intolerance through property overlook the fact that property is not absolute liberty. It is merely a strategy to maximize liberty in an otherwise scarce world. As such it also demands a lot of tolerance. While it is true that you can use your property in any way you like, it is part of the property deal that you absolutely respect other people to do the same with their property. That means that you can for example prohibit people from burning the Koran on your property, but you also must not interfere if your neighbor is doing something like that on his. This might not be an easy thing to do. Liberty therefore clearly demands tolerance from people.

Our well being as individuals very much depends on the cooperation of us with other humans on this planet. And the larger the amount of people we are cooperating with the better, in other words the larger the market in which we take part, the better off we are. This is causing a few problems to intolerant people. First, if you really do not want to be confronted with things that you find hard to tolerate, you will have to do more than just own a small piece of property. You will have to find a way to legitimately control your whole neighborhood. There are of course ways of doing that. But no matter how you do it, whether you are buying up all the properties in your neighborhood or join a gated community, the costs for this lifestyle will be higher than for people who are more relaxed about their neighbors. And the more intolerant you are, the further away from other people you will have to move, or the higher walls you will have to establish around you. This however drives up the costs to cooperate with others. This is the reason, why so many people are living in crowded cities. Having a large amount of diverse people around you, opens up a lot of possibilities. That means it is economically costly to pursue an intolerant lifestyle. Sure in a free market, everything will likely become cheaper as productivity rises. But the relative economic disadvantage compared to people who are tolerant remains.

And there is more economic disadvantage. Say you are running a company and you are a racist. In that case you are excluding a lot of potentially helpful people from your business. That should cause you disadvantages compared to a competition that is more open minded. There is a reason why racist societies force people to be intolerant by law. Left on their own, most people quickly start realizing that hatred is not a very attractive philosophy.

What about the claim that a libertarian society will likely see more conservative lifestyles. I don't find this completely convincing either. I think conservatives are right in one aspect. Cooperation on a free market demands responsibility. So some of the irresponsible behavior we see being produced by the welfare state will likely go away. On the other hand however, markets are known to produce a lot of wealth. And particularly creative people are doing well on free markets compared to rigid bureaucratic structures. If people are more wealthy they are less dependent on others approving of their lifestyle. In other words, free markets tent to benefit individualism.

This can be seen historically. For example, to my knowledge it was not so much feminism or the welfare state that made women independent from their husbands. It was the industrial revolution. Factory owners often paid for facilities where mothers could leave their children while at work. That way they had access to their labor, which was needed. Or mothers were earning enough to pay for child care themselves. So it was the wealth production of free markets that allowed women to break out of conservative family structures.

I cannot see much basis for the idea that liberty is about intolerance or that a libertarian society has to be conservative. This seems to be wishful thinking from some libertarians. If that is true, then the question arises, are they really libertarians or are they people who see libertarianism as a means to achieve very different ends? And if the latter is true, are they trustworthy to stick with liberty even if liberty appears to produce different results?

I think a good test to answer these questions is state immigration controls. Are libertarians willing to support getting the state out of the way of the free movement of people or not. It seems to me that people who are arguing in favor of state immigration controls give away that they really are more interested in their conservative/racist idea of a society than in liberty. And they seem to sense that it really needs the state to produce this result. If we get the state out of the way, we will likely see an increase in multiculturalism. The economic incentive of people to mix seems too large.

Since this is not a result that these libertarians expected, they are quick to proclaim that really this is all due to other state policies like non-discrimination legislature or the welfare state. But this is an odd argument in many ways. While these policies are indeed anti-libertarian and have to go, there does not seem to be much evidence that supports the idea that they have a big influence on immigration. At least no were near enough to support the idea that without them, we would not see a lot of movement of people from all over the world. And regardless of how many people will end up moving, it seems false to argue that the state cannot be rolled back unconditionally, as that would lead to problems. That argument can be used to prevent any rollback, as almost any abolition of a policy will cause some trouble for some people. So if this argument sticks, we will be stuck with the status quo forever. No, if the abolition of one policy causes problems with other policies in place, then we just need to abolish more state until the state is no more.

For all these reasons I personally remain skeptical of people who are interested in liberty because it promises them intolerance. Of course it is good when people are interested in libertarianism and want to call themselves libertarians. Any common ground is a basis for debate. However, I don't know how much I can trust them when it comes to the fight for liberty. I also don't believe this image of liberty is helpful to spread the message. We are sharing this planet with a lot of people. And we will have to find a way to live peacefully with them. Our standard of living is also very dependent on a maximum of collaboration with others. I therefore consider tolerance to be an important value. Intolerance simply does not seem to be a good survival strategy. But tolerance can be difficult. It needs to be learned. That will take some training. Telling people that it is perfectly fine to be intolerant is therefore not very helpful.


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Let's do something!

PoliticsPosted by Nico Metten Fri, June 05, 2015 16:21:39
If you attend a lot of libertarian gatherings, you will start feeling like everything talked about is very repetitive. Every argument being made sounds familiar and if someone new might show up you can predict what their objections are going to be. Nevertheless, I am not really getting tired of them for a number of reasons. There is the psychological aspect of feeling sane and understood. I know a lot of libertarians who come to meetings for this reason alone, as it is an experience in contrast to what they are experiencing in their normal environment. And sometimes you might actually come across an interesting viewpoint that you have not heart before. So despite all the repetition, you might actually learn something. In any case, arguing a lot, even if repetitive, certainly trains you in making your points in other debates. In the end it helps spreading libertarian ideas.


But there is a series of talks that come up fairly regularly that annoyed me from the first time I attended one of them. It is a series that I would like to call 'Let's do something'. The 'Let's do Something' talks follow a common structure. Whoever gives the talk will start by saying that he or she has observed that libertarians are arguing too much and spend a lot of time with books. That is all nice and well, but he or she has decided that now the time has come to stop this childish complaining and take real action instead.

The proposal to 'do something' is always presented as some kind of fantastic new break through idea that obviously a lot of libertarians could not come up with themselves. And the moment the words 'Let's do something' have been uttered you will find some libertarians getting overly excited. From this moment, they do not let any argument count, as arguing looks like falling back into the childish complaining status. As a result, any proposal following these words will be seen as worth supporting and superior to talking.

Don't get me wrong, I am all in favor of taking action. So are most if not all Libertarians. One topic that is reliably discussed on every libertarian gathering is, how do we get to a libertarian society or at least, how do I get the state out of my life. Libertarians are spending a lot of time trying to figure out a solution to the state problem. However, this problem, not surprisingly turns out to be a very difficult problem to solve. If the power of the state was so fragile that all it needed to topple it was for some people to get together and 'do something' it would have gone away a long time ago.

Having said that, there are some strategies that libertarians have come up with that actually might get us to a libertarian society in the long run. However, the remarkable thing about the 'Let's do something' talks is that they are consistently disappointing in coming up with persuasive solutions. People who start their talks with 'Let's do something' will usually not tell you about strategies like agorism, how to reduce your tax burden, how to use alternative currencies or stop the state from spying on you. No, none of that. People who start their talks dismissing debate and demanding action fairly reliably will give you the proposal to get involved in politics one way or another.

The most common one is to propose a new libertarian party. “Hey guys, a lot of you are just sitting around debating. But a few of us have decided to grow up and we have founded this new libertarian party that will change things in this country”. Sorry mate, but this is not new. It has been tried many times with not very persuasive results. So why come up with the same old non solution?

The last talk in this series that I attended and that inspired me to write this piece was from an MEP of the Tory party who somehow is sympathetic to classical liberalism. Becoming an MEP I guess was his idea of doing something. I could not quite figure out how this action is helping, but then again if I were to fight MEPs I should probably start with the less libertarian ones. At least he seemed like a sincere guy. Although, he did have this typical talking style of a politician of being deliberately vague to please as many listeners as possible.

He thought one of the big problems of libertarianism is that they don't have a good answer to the problem of poverty. They are just assuming that the poor will be better off in a free market, without delivering any proof for it. That is why people do not understand the libertarian solution. So instead of talking, libertarians should practically show how the market helps the poor. He proposed going into the community and help poor people run their own businesses. An example he gave was, how he helped a drug dealer using his entrepreneurial skills to now run a sandwich shop instead.

This proposal is odd on many levels. First it smells a lot like central planning for politicians to go around and tell people how to run their businesses. It does not need the guidance of the state to run businesses. Maybe the drug dealer is now better off selling sandwiches, or maybe not. I don't have a principal problem with either one of those businesses. But for the life of me, I cannot figure out how getting him into the sandwich making business is helping Libertarianism. No tax has been reduced, no regulation has been abolished. The structural problem of the state remains. I told him that, but his answer was that regulations, while nasty are not the main problem. There are still many entrepreneurs who succeed in a statist environment. So the problem has to be the attitude of people.

True, people in state education are systematically educated to be irresponsible. But then again, that is a structural problem of state education and the welfare state. To say that regulations are not the main problem, is a dangerously wrong analysis of why the standard of living of so many people is going down. True, there are successful entrepreneurs in this statist environment. Some people are so productive that even after all the taxation and regulations they still are able to run a profitable business. But these are strong people. This is exactly not a solution for the poor, who tend to be a little bit less skilled. The less skilled a person is, the more likely every stone you put into his or her way will kill his or her ability to run a profitable business. It is exactly the poor who are most dependent on us solving the structural problem of the state, for they are the first to suffer under it. And btw isn't 'not letting you being put off by regulations' exactly what drug dealer are doing? Here you can see, how regulations are helping the strong. They get even richer than they deserve to be, because the state has killed the competition.

It is indeed unfortunate, that economics can be counter intuitive, as one needs to understand that a lot of consequences are not directly visible. And to be honest, my suspicion was that the MEP did not fully understand that himself. He seemed to suggest that poor people really are benefiting from the state. Of course it is not intuitively clear why poor people are better off if the welfare state stops giving them money. But it is nevertheless true and therefore there is no alternative to spreading this idea. If you do not spread the idea, whatever actions you take could still produce non libertarian results.

Which brings me to the biggest fallacy of the 'do something' philosophy. Ideas are not useless chit chat. They are the most powerful weapon this movement has. Therefore, spreading propaganda very much qualifies as doing something. And it is probably the best thing most people are able to do. If we look throughout history we see the powers of ideas everywhere. For example, how did democracy or socialism become so powerful? They started out as ideas of a few nutters. These ideas slowly started to grow before their time finally had come. That is why you cannot just implement a democracy in countries that never had any democratic process. People do not yet understand the idea.

Because ideas are so powerful, you will find strong forms of censorship in every dictatorial system. The reason why a country like North Korea is so cut off from everything is not because they fear the nice consumer products from the rest of the world. Their real fear is that ideas will come over and topple the regime.

Ideas are also the foundation of actions. If someone acts against the state he first needs to identify the state as a problem. There might be some people out there who are really able to do something great against the state. But first they need to understand that the state is a problem. Whoever invented the block chain for example certainly was influenced by libertarian thoughts. With these ideas in mind, he then realized that he had some skills that could be turned into action. If it was not for libertarian propaganda, this might have never happened.

In my experience it is not that libertarians are too lazy to act. They are more than willing to do so. But that does not mean they have big opportunities to do so. Most people find small opportunities to increase the amount of freedom in their lives. Few are capable of inventing something big like Bitcoin. I certainly could not have done that. But I don't have to. The division of labor also works for Libertarianism. The best thing most of us can do is to spread ideas, so that those with the exceptional skills to act on it can be influence by libertarianism.

The problem with ideas is that they don't show immediate results. You will not step in front of a crowd of statists, explain libertarianism to them and see them collectively saying 'I was blind, but now I see'. Whether people are listening to you depends on many things like their motivation, their age, intelligence, personality etc. Not everyone can be persuaded and it is a slow process. That makes ideas very annoying for impatient people. They start concluding that spreading ideas is a hopeless exercise. It also makes you feel like you are not in control of the process. However, there does not seem to be a real alternative to ideas if you want social change.

If your ideas are correct and attractive, they will sooner or later win followers. The good thing about ideas is that once they pick up steam, they can grow exponentially. We also don't need to win over everyone. A lethal doses of ideas for the state is far below the threshold of persuading everyone. We just need a significant number of the right people. So let's not complain about people not doing anything. Everyone does what they can do best, just like in the rest of the economy. But one thing that really everyone can do is to continue spreading ideas.



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What is wrong with Democracy?

PhilosophyPosted by Nico Metten Mon, May 04, 2015 21:32:22
This week, on May 7th, the local gang of thieves, also know as the UK government will ask its subjects for approval of their crimes. And amazingly, people will come out in flocks to give it to them. Their motivation for doing so will be different. Many have been promised a share of the booty. Some will have to live with the promise of one party robbing them less badly then the other. And there are those whose survival strategy seems to be, to not think at all and just follow the crowd.

The vast majority of all of them will have in common to dislike my characterisation of the government as a gang of thieves. “No Nico” they will say, “the government is just everyone getting together as a community and figuring out what is best for all of us. Everyone can take part. Everyone has a voice. The government is not a gang of thieves. The government is us.”

I would buy that story, if I was 12 years old. In fact, I did believe it when I was 12. But in my view, it really takes the naivety and life experience of a child to believe it. There are so many holes in that story, it is difficult where to start. Maybe we should start with the idea of the government representing the people.

Who are the people? The people are all of us you might say. Great, so in that case governance by the people would logically mean that everyone has to agree with a policy. I actually like that. The government could never do anything if everyone had to agree with it. The criminals would be stripped of their power and therefore leave us alone.

Unfortunately, we don't have that. Instead, what we have is that a part of the people will be enough to legitimise a policy. Here is my first problem. How can the government act in the name of the people, if a part of the people is systematically excluded? But hardly anyone seems to be bothered by this contradiction. They think they have a solution. The solution is that we can call it the rule of the people, when a majority of the people approves a policy.

But what is supposed to be so magical about a majority? Why should the majority part of the people have a right to tell the minority part what to do and still call this the rule of the people? As a famous saying goes, democracy, that is two wolfs and a sheep voting for what is for dinner. There seems to be nothing moral or logical about the idea that a majority can legitimise the exercise of power. The only thing the majority idea has going for it is that that way the exercise of power becomes possible. But then again, why would we want someone to exercise power over us anyway?

Nevertheless, even though the whole majority story seems very much arbitrary, let us for the sake of the argument assume for the moment that a majority can indeed legitimise power. How is that then been implemented in the current political system?

Currently, you can vote for parties or candidates. Both represent a whole agenda of ideas and political proposals. I shall be surprised if we could find anyone voting for a party or a candidate, who really agrees with the whole agenda. But let us get back to that later. First, let us take a simple example of an election result. Let us say there are two major parties A and B and a bunch of smaller parties. Let us assume 60% of eligible voters show up at an election to vote. 10% of these vote for smaller parties. 26% vote for Party A and 24% for Party B. Pretty much every western democracy has election rules to keep small parties out of the representative assembly. So we now have two parties, representing the will of the people. Party A is going to provide the government.

But wait a minute. Party A only has 26% approval of the voters. What kind of funny world is it, in which 26% represents the majority and 74% the minority? That means that the minority is almost three times as big as the majority. This is the funny world of politics, in which most basic principals of mathematics do not apply.

Right here we can conclude that the whole rhetoric of the rule of the people and majority rule is simply a fairy tale. But it actually gets worse. As mentioned above, most people do not vote for the whole agenda of a party. The system is set up in a way, so that you have to give your vote to a party according to a few issues that are important to you. This issue can be, and very often is as simple as, “party A promises me to subsidies my bus ticket”. Now you have voted for party A to get a cheaper bus ticket (btw who is paying for that?!) and party A interprets your vote as a mandate to do whatever is on their agenda. But since you haven't voted for them because of the rest of the agenda, this claim is simply false.

What does this mean for the democratic legitimacy of party A's policies? Well, it means that many policies on the agenda of party A are actually not even approved of by the majority of voters of the two major parties. If we think this through, that means that it is possible for a policy of the government to be only approved of by a tiny fraction of the voters. In fact not only is that possible, but it is happening all the time.

Almost everyone I talk to seems to agree that the government is putting out too many regulations in some area of their lives. How can it be that people in general seem to agree that there is too much government in some areas and yet we only seem to get more government? After what we have found out above, it should be clear why that is. It only takes a small fraction of the people to grow the government. A small interest group that is giving out their vote only on the basis of a certain regulation being put in place. While most people may disagree with this regulation, they are more concerned with getting their own favorite regulations approved. So this has more priority than to stop other regulations. Politicians know that and that is why they promise everyone their favorite government program.

The government will grow, no matter who wins an election. There is no way the government can be shrunk by voting. If you want to shrink the government by voting, you have to defeat the special interest groups. And since their issues are very important to them, you will likely lose. Even if you do manage to defeat one of them at some point, defeating all of them is impossible.

That means that since most people are not voting out of moral principals, but just for the benefit of their own bank account, the system has become a gigantic exploitation machine. The only question in every election has become, who is going to be the exploiter and who the exploited. And that although the system has become so complex, that it is impossible to really say on which side one will end up on. However, since wealth creation is becoming increasingly difficult in the middle of this battle, it is fair to assume, that we are probably all losing a lot on the whole. Democracy is not the rule of the people. It is not a noble system and the end of history. It is a fundamentally immoral system that deserves to die.

It will die anyway, since more and more people want to be part of the parasites. I don't blame them. As long as the system is set up the way it is, that is, as long as we think we need a government to organize society, taking part in the exploitation seems like a rational thing to do. The problem with parasitic systems however is, that eventually they grow so big that they kill the hosts. That is were most western welfare states have gotten to right now. So either, people start realizing that the system itself is the problem, or things are going to get really messy. Humanity will not make progress until we have slayed Leviathan in even its democratic form.



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Inheritability of Intellectual Property

PhilosophyPosted by Nico Metten Sun, April 19, 2015 17:11:34
Should Intellectual Property be inheritable? Some defenders of IP, like Jan Lester think it should. I would disagree. Why should anything be inheritable from a libertarian point of view? If Libertarianism is all about maximizing interpersonal liberty, should dead people be still considered a person whose liberty is worth maximizing? I don't think it should. Liberty is for the living, not the dead. The concept of inheritance is basically giving a person property rights beyond his or her death. Why is that supposed to maximize liberty, unless we assume that the liberty of dead people still matters?


Having said that, I am in favour of the inheritability of physical wealth. The reason for that is that physical things cannot be in the public domain. That is the reason why property is libertarian in the first place. Allowing the concept of property on some scarce things is actually liberty maximising. With the death of a person, his physical wealth does not go away. If it is true that property in this wealth was maximising liberty before his death, then it is reasonable to assume finding a new owner after his death is liberty maximising too.

To put it differently, physical wealth needs to be inherited to someone. Putting it in the public domain is not really possible because of its scarcity. And if the question is just who inherits the wealth, it seem to make sense to let the previous owner decide who the next owner should be. If not him, who else should decide it? It also seems like a good solution, because the previous owner is likely the best to make an educated decision of who is best suitable to inherit certain things. This is most likely to keep the wealth in the most productive hands.

Things look a little bit differently for IP though. There are certainly many parallels between the concept of physical and intellectual property. However, there are also some crucial differences. In particular there are two differences that make the idea for inheritability of IP look questionable.

The first one is the fact that the usability of physical property is always limited to a few people. For example, if I have a chair, only one person can sit on it at a time. The same limitation applies to every other physical property I can think of. That means that for physical things, it is inevitable to have a rule according to which we can determine, who can use a desired object for which purpose at a certain time. Most of the time, the best solution will be to grand people property rights on these objects. Less often it might be enough to have a simple possession solution in place.

IP on the other hand is lacking this characteristic of physical property. In principal, information can be used by an unlimited number of people simultaneously. There is no limitation on the information itself. For example, me reading The Wealth Of Nations does not limited someone else to read the same book at the same time. This is a big difference between physical and intellectual property. The only limitation would be the availability of the physical medium on which the information are stored. But as I already said, inheritable property rights on the medium are not a problem to me.

The second difference is that physical wealth decays. There seems to be no exception to this, although some things are so robust that for all practical purposes they can be seen as not decaying. This makes it necessary to maintain physical things. Maintaining things usually is a capital intense process. People will less likely engage in this process if they are not allowed to have some control over the result.

Information on the other hand do not decay. The pythagorean theorem for example has not decayed one bit, despite the fact that it is thousands of years old. One might argue that the physical medium it is stored on needs to be maintained otherwise the theorem would get lost with the medium. That is true, but is not much of an argument in the digital internet age. Desired information will be stored in many different locations at almost no cost.

These two differences make the idea of the inheritability of IP questionable. Other than physical property, IP can actually be in the public domain. If that is true, than what justifies giving it a new owner, after the old one has died? This seems to be an unnecessary imposition on everyone who is not the new owner.



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The Police and the Rule of Law

HistoryPosted by Nico Metten Mon, April 06, 2015 12:40:36
Apparently, one of the major responsibilities of the state is to protect our rights against criminals. It is this responsibility that even a lot of libertarians think we cannot get rid of completely. To fulfill this responsibility, we are told, the state needs to have a monopoly on using violence. The institution of the executive, which carries out this violence domestically is the police. To make sure that this monopoly in and of itself does not become a problem, the advocates of this system have implemented democratic controls. That way, the police can function as an efficient security service provider for the people. That is at least the idea. But does it all work as the architects of this system imagine it?


On first sight, this system does not seem to be a bad idea. For a society to function, we certainly need to have a rule of law. That means we indeed need to make sure that if it comes to a stand off between a criminal who is violating the rights of someone and the enforcers of the law, the law will ideally always win. And if you want to win battles it seems very useful, if not inevitable to have the majority of force on your side. If this line of thought is correct, does this automatically mean that we need to have an institution that at all times has a monopoly on force? Is there even a possible alternative to this approach?

To answer these questions let us start by having a deeper look at the basic idea. It seems to me that there are several flaws in it that need to be addressed. The most obvious one is, who is controlling the monopoly? The major assumption behind having a monopoly is that not all humans are of good character. Some are more than willing to violate other people's rights for their own advantage. If that is true, how do we make sure that these people are not taking over the monopoly? For that is what these bad guys are most likely planning to do.

There are various ways with which criminals could do that. The most successful one would be to take over the control of the whole state. This could come in various shapes and forms. One example might be a very primitive military dictatorship, in which everyone is aware that a group of people are controlling the system in their own interest. However, it could also come in more subtle forms. The state could still have the appearance of a rule of law, while a group of powerful people pull the strings in the background. The latter approach is probably more successful in securing the control of power in the long run. In whatever form it might come, the process of criminals taking over the whole state seems to have been completed in most states that we observe around the world.

However, there seem to be a few states on the planet that still have some form of division of powers and a rule of law. Having said that, I do not know of any state that is completely free of criminal influence. Corruption comes in different forms. The most simple attempt to beat the monopoly is to try to have some influence on the people enforcing the law. In other words, criminals try to influence the police.

The UK is worldwide one of the most respected states for its rule of law. But how justified is this respect? Compared to the total corruption observed in most countries, the UK indeed appears in a positive light. But of course this island is no exception to the fact that some people are not nice guys. These bad boys, here too have long realized that it might be a good idea for their 'business' to try to get in control of the monopoly. And they have been far more successful than most people might realize. Last year The Independent reported a number of leaked documents, suggesting that the legal system in the UK is indeed infiltrated by criminals up to the highest levels.

The whole idea that a monopoly on force can be controlled to serve the rule of law, really is a contradiction in terms. Any such system relies on the assumption that humans can be trusted to not abuse this position. But if humans were all nice guys, why would we need such a system in the first place? In truth, this system logically cannot solve the problem of dealing with criminals. All it does is taking the problem to a different level.

One might object to this by saying that the system might not be 100% perfect, but at least it works most of the time. I certainly agree that we cannot come up with a perfect system. No matter which system we come up with to protect the rule of law, we will likely see cases in which it fails. So the best we can ask for is a system with a good track record. I do not believe that all police officers are crocks. In fact, the vast majority are probably decent human beings, just trying to do their jobs as good as possible. We might see police forces in certain places on the globe who are systematically trained to fight the people. But I do not see any evidence that this is what is going on in the UK. However, despite of that the idea that the current system works most of the time seems very questionable to me.

Even if we assume that we are dealing with a lot of good police men, we are still stuck with some other problems. The business model of running a monopoly service provider is the business model of a central planner. So we can expect to see the same problems from centrally planning the police that we see in any other centrally planned business.

In a centrally planned service organization, resources are not allocated by prices and therefore the needs of the people paying for the services. Instead they are allocated according to the needs of the people running the organization. The same is true for the rules put in place to run the organization. These rules will likely serve the needs of the people providing the services instead of the needs of the recipients of the services.

What does that mean for the policing services? On the one hand, we will likely see a prioritizing of activities that are easy to execute and bring in revenue for the organization. On the other hand, we are likely to see activities that are hard to execute and drain resources to get a low priority. To be more concrete, activities like fining law abiding citizens for overstepping minor laws are likely to see a relatively good enforcement. These activities bring in revenue through the fines and are easy to enforce. Law abiding citizens are likely to simply comply with demands from the police. On the other hand, chasing criminals like muggers, burglars, rapists and murders are dangerous activities that don't even bring in any revenue. These activities will likely get a low priority. They will likely be carried just as much necessary to keep people from actively rebelling.

On the rules side of things, we will likely see rules being made that serve predominantly the well being of the police officers and less so the needs of the receivers of their services. Everything that might put officers in danger or even just cause inconvenience are bad rules and everything that gives 'costumers' the power of complaining or creating alternatives to the provided police services are good rules.

Is this what we are seeing? From the data I know and my personal experience, I find this to be exactly true. I myself have been on the receiving side of fines a number of times. And this seems to be true for most people I know. These were fines for overstepping rules that are minor or outright silly. Some of them are so counter intuitive that I might not even have been aware off them. For example I recently got a fine of £130 for standing too long (more than 10s) with my car on one of those yellow striped areas you find at busy crossroads. The purpose of these areas is to stop people from driving into the middle of the crossroads on a green light and get stuck there, blocking cars from other directions during their green light interval. The problem is that it is often hard to see when exactly the cars in front of you will stop. It was Friday night at about midnight, I thought I would make it to the other side but ended up getting stuck at the very end of the yellow area. I was not blocking anyone, there was still plenty of space. But, since London is completely surveyed with cameras, someone watched the CCTV footage, actually counted the seconds I was stopping on the yellow lines and issued a fine.

You may say great, these CCTV cameras see everything. If they caught you breaking such a minor rule, they must have a great track record finding real criminals as well. Unfortunately, that is not really the case. For example, an ex flatmate of mine got mugged in the middle of the day on a London bus in Chelsea. They stole her smart phone. Every bus in London has 16 CCTV cameras on it. She went to the police demanding they would analyze the footage and look for the criminals. However, she found herself a little bit surprised to get the answer that “it is not worth our time to look into this”. In this case, nothing was to gain for the monopolists. They were dealing with real criminals, so looking into this case would have been potentially dangerous and drained their resources. So why do it? Why not analyze CCTV footage for how long cars are stopping on yellow lines? Much safer and much more lucrative.

Another friend of mine got jumped by a few thugs on his way home in the evening. He was less lucky. They not only robbed him but also beat him up so heavily that he almost lost an eye. So he went to the police to report it. To his surprise the police at first refused to even write the incident down. After a while of arguing with them, they finally agreed to make a note of the incident, but they were very blunt about the fact that they had no intention looking into this case any further.

In December last year and February this year, my flat got burgled twice within two month by the same guy. The burglar was after cash and computers. The first time he stole some cash from me and two computers, including a MacBook Pro that I was using for work. Knowing the bad experiences that almost everyone I ever asked had made with police in London, I was not very keen in calling the police. I did it anyway for two reasons. First, I remembered that the MacBook was covered by my business content insurance. Second, I am a skeptical person. I always like to test whether my theories work. So I was curious to see what I could get for my tax money.

Within an hour two police officers showed up, together with a Lady to secure the evidence. They were reasonably friendly and documented the case. After that they closed the case without solving it within a few days. So no success, but at least an appearance of caring. I looked into how many cases of burglary are actually being solved by the state. I didn't expect much, but was still negatively surprised to find out that the success rate was in the low single percentage digits. That is a remarkable incompetence. So protecting citizens from burglars is definitely not something that appears to work most of the time.

The burglar seemed to have been aware of this incompetence too. He did not hesitate to come back two months later. This time a desktop computer from my flatmate was stolen, and the burglar caused some severe damages to doors and some windows. My flatmate called the police, but this time only a police officer showed up. No one wanted to come along and secure the evidence that evening. They postponed that till the next day. Not very good, given that we could not leave the broken windows as they were throughout the whole cold winter night. But my flatmate, not a libertarian, still was full of respect. “They are probably very busy”.

The next day a man showed up to secure the evidence that was left. I had a very interesting conversation with him. First, I asked him whether he was indeed very busy. His answer “no, not at all. Very quite”. He did not seem to realize that the reason I might ask that was, because he showed up a day late. Then he said something very interesting. “Crime in general seems to go down. But we have no idea why that is.” Whether it is true that crime is going down or not, I don't know. But his statement that he did not know why it was going down really surprised me. Here is someone working for an organization aiming at fighting crime. He observes crime to go down, but it does not cross his mind to take the credit for it.

This is interesting for a number of reasons. First, being an insider at the police, the pure thought that the work of the police is reducing crime was a non-starter for him. Having put some thought into this phenomenon, the explanation he came up with was “London is probably getting too expensive to live for these criminals and they all have to move out”. Fair enough, to me too, that certainly sounded like a much more plausible explanation than 'the Met Police is doing a good job'.

Second, his answer told me that I was probably dealing with an honest man. He did not seem to be part of a conspiracy against the rest of society. He was probably really just trying to do his job as good as he can. However, he was operating within a system that just could not produce good results even if it wanted to. It is the organization that is flawed, not necessarily the people working within it.

Lastly, his honesty was a clear indication that he was under no illusion that I was something like a customer of his services. Any business man would have taken the opportunity to take credit for the lower crime rates. But he was not trying to sell me anything. At the end of the day, it was of no importance to him whether I was satisfied with his services or not. He gets paid anyway and his job is secure no matter how bad the outcome.

Wouldn't it be great if there was more than one security service provider? In that case I could have told him that I was unsatisfied with his services and was going to change to be protected by XY Policing in the future. But as far as catching criminals is concerned, there is no real legal alternative to the state police at the moment. If you were to hire a private investigator, there would be no chance of rolling over the costs for that to the criminal once he is caught. Given the rules in place, this alternative is not economical. Therefore, this business model does not really exist in this country. It is not allowed to exist, competition not wanted.

Catching criminals once they have committed a crime is one thing. A real solution to the crime problem would of course involve the prevention of crimes in the first place. I wanted to hear the police officers opinion on what I could do to not being burgled again. He said “the trick is to make your house secure enough so that the burglar looks for an easier target”. Again, I was surprised how open he was to reveal how bad the system is. That is your solution? Push the problem down the road? I should not have been surprised. Pushing problems down the road seems to be the governments 'solution' for a lot of problems. This really is a remarkably bad solution. It is essentially survival of the fittest in its most brutal form. The problems are being pushed onto the weakest elements of society at the end of the road. So this is what the praised state solution for the rule of law really comes down to. It is the law of the jungle.

When it comes to preventing crime the most important thing is of course the ability of people to defend themselves. Unless you are rich enough to afford professional security services, you will always be the first who has to act when becoming a victim. The state has a couple of reasons to dislike self defense. First, it makes the police look bad, if the citizens are doing a major component in the security production. It is much better when people feel helpless. That way the state can present itself as absolutely necessary for their security. Second, if people can defend themselves, they might use that ability one day against the state itself. This makes the work of everyone within the monopoly much more difficult. Especially police work gets much more difficult and dangerous when people can fight back. Therefore, states around the world are keen to make citizens as helpless as they can get away with.

The UK is one of the most advanced states when it comes to making people helpless. One of the tips the police officer was giving me, was to put some small nails on the top of the wooden gate the burglar had to climb over to gain access. That way he would cut his hands the next time he would try to burgle me. “But pssst” he said. “You did not get this from me. The council does not like it for health and safety reasons. Technically the burglar can sue you for damage if he gets hurt.” What? The burglar can sue me for hurting himself during his criminal activities? This statement seems so bizarre it is almost hard to believe. Unfortunately, it seems true.

This it is typical for the UK. Self defense is more and more seen as a naughty thing. How dare you actually try to hurt a burglar going after his day job. Citizens in this country have been stripped of almost any tools that could help them to defend themselves. Since it is a European country, it goes without saying that it has long fallen for the totally perverse philosophy of gun control. If you publicly suggest that gun control might not be such a good thing, you are immediately categorized as either evil or stupid and probably both. But even purely defensive, and therefore harmless weapons like pepper spray are unavailable in this country. The most weird story I have heart was, when a friend from Scotland reported to have been stopped by the police in always sunny Glasgow for carrying an umbrella. He was carrying it in a way that looked like he could use it to beat someone. Therefore, they argued it could be seen as a weapon. You cannot make this stuff up.

In the UK, we are back to the stone ages where physical body strength to a great deal determines how safe you are. The only reason that it might still be a pleasant place to live in is that it still has a relatively rich and civil society. Most people have simply little interest to hurt you.

The idea that we need a monopoly of force to have a rule of law, to me looks more like a self fulfilling prophecy than a necessity. Since alternative solutions are being outlawed, it starts to look like there is no alternative to a monopoly. But we see this monopoly produce the same poor results that we would expect from any other centrally planned service provider. It is about time that we start to rethink this solution. However, most people think that allowing competition will only lead to criminals taking over. This is really a strange idea, given that this is exactly what we are seeing in the current system.

A free market solution to secure the rule of law will unlikely lead to criminals having free range and terrorize society. That is because the vast majority of people are not criminals. They have an interest in the rule of law. If the rule of law were to be left to market forces, the combined economic power of law abiding citizens would be greater than anything a crime family could come up with by orders of magnitude. To the contrary, the current solution of having a monopoly already in place is a dream for criminals. Taking over, or at least influencing this monopoly is by far cheaper than having to establish a monopoly themselves. This is amplified by the fact that this monopoly is currently helping criminals gaining revenue by enforcing victimless crimes like drug prohibitions. The police is not the last thing to go, before we abolish the state. Instead we should make it a priority to expose the police to market competition as soon as possible.



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A defense of intellectual property

LibertyPosted by Nico Metten Sat, December 13, 2014 14:45:44
Intellectual property is a sensitive subject in the libertarian community. It is one of the subjects where libertarians just cannot agree what the libertarian position should be. There are a lot of very vocal opponents of the concept. While I think they have some valid arguments, their radical case against all intellectual property always failed to convince me. That is why I would like to lay down some arguments of why I continue to defend the basic concept of intellectual property.

That is not to say that I am a big fan of current intellectual property legislature. I am a passionate anarchist, I want the state completely out of the law production business. However there are forms of intellectual property where I don't understand why we should get rid of them.

Before we start arguing about the pros and contras, let us first start with defining the main characteristics of intellectual property. Only when we are clear about what characterises intellectual property we can identify it when we see it. Intellectual property means the ownership of information. This can be anything from music, design, literature or in case of patents even the simple knowledge about something. Characteristic of ownership is that someone has the exclusive right so use, distribute or even change these information. As a consequence, that means nothing else, but that the owner can prohibit other people the use of his owned information.

If this characterisation is valid, my first thought is that I cannot see how you can completely get rid of this concept. There is one form of intellectual property that has been around for a very long time and is essentially the basis of contracts. I am talking about what today would be called a brand, that is the exclusive right of one company to use a certain name for their products.

Why can we not get rid of this? Let us take an example. Let us say we get rid of intellectual property. Then, tomorrow every soft drink producer would have the right to label their drink coca cola and even use the same design as the current owner of that brand. How could you make sure in such a world that if you have a contract with someone to deliver coca cola to you that that person is delivering the right coca cola? I don't see how. Words need to have a clear meaning in order for contracts to make sense. Interestingly, opponents of intellectual property are willing to admit that indeed a company delivering the 'wrong' type of coca cola would commit a fraud. However, they are categorically denying that what we are dealing with is intellectual property. But why is it not? If it is indeed fraud than that would mean that one company has more right to call their product coca cola. And if one company has more right to use these information then it seems to fulfil the characteristics of intellectual property as described above. As the saying goes, if it looks like a duck and quacks like a duck, then it is probably a duck.

I may be wrong, but my impression is that opponents of intellectual property have such a hard time calling this just that, because once there is a precedent for intellectual property, the debate would change from if to how much intellectual property we need. That seems to make them uncomfortable for two reasons. Firstly, they have identified some problems with intellectual property. And secondly, because of these problems there needs to be a limit to intellectual property, but it is hard to tell exactly where these limits would need to be.

Let us look at some of the alleged problems. The biggest problem for libertarians seems to be that intellectual property limits physical property rights. Since intellectual property always needs a medium, the intellectual property owner effectively has the right to control to some degree how people use their physical property. This can go as far as to control how someone uses his body when singing a song to which I own the copyright.

This is a problem because most libertarians seem to really be propertarians. That is they think that property is liberty or at least that liberty is defined through property rights. They seems to overlook that property rights are just a strategy to maximise interpersonal liberty in a world of scarcrity. Interpersonal liberty in my view should be the ability to do whatever you want as much as that is practically possible without limiting the ability of others to do the same. If that is true, then property is only libertarian in so far as it maximises this liberty. Most physical property seems to do that. However, there can very well be forms of property that do not serve that function and should therefore be rejected. David Friedman points to a couple of problems with propertarianism in his machinery of freedom.

If we were to live in an ideal world without any scarcity, we would not need property to maximise interpersonal liberty. Indeed, property in such a world would limit the freedom of people. That means that if our goal is to maximise liberty, we should only support forms of property that are serving that purpose. And I would argue that there are forms of physical property that do not qualify as libertarian and that there are forms of intellectual property that do.

But is the limitation of physical property really a unique feature of intellectual property? It seems to me that it is a general feature of property. When I own my body, a lot of Libertarians would say that I should be able to do with it whatever I want. However, does that mean I can slam my fist into your face? Of course not. Your face is your property and I cannot damage your property with mine. My property rights are always limited by other people's property rights. Property as a social concept is therefore always limited by certain boundaries. So the notion that unless I can do whatever I want with it, it is not property seems false. The only debate we can have about property is, how far should this concept go. So yes, intellectual property limits the physical property rights of other people, as does every property right. This should not be a criteria to reject it.

The real criteria is, does it limit the liberty of people unnecessarily. I think in some cases it does and in some cases it does not. I would argue whenever intellectual property is needed to create desired content, it clearly enhances the liberty of people.

Let us take an example. Currently the last episode of Peter Jackson's Hobbit trilogy is coming into the cinemas. The first two episodes where already a big success. People rushed to watch it in cinemas and bought it on discs or as a download later. Therefore the third instalment will predictably be another success. Clearly, the production of this film makes a lot of people happy and they are willing to spend some money to see it. The total production costs of all three films are estimated to be about 561 million dollars. This is not because there was a lot of wast of money, but producing a film like this really costs that much money. But with copyright laws in place the film will bring in more than enough money to compensate for these costs.

However, I cannot see how this film would have come into existence if it was not for copyright laws. What would be a possible alternative business model to bring in that much money? In the dream world of the Hobbit it would be hard to sneak in any advertisement, like letting him wear the latest nike shoes or drive a certain Mercedes model. Advertisement later also does not work. Why would an advertiser pay to get the rights to advertise in the middle or before the film, if he could just copy and distribute the film himself.

You might say that this is a classical case of special interest policy. Why should people be forced to pay for your film. If you cannot finance it voluntarily then it should not exist. Of course I agree, people should not be forced to pay for the film. However, the case is a bit different here. We know that people are willing to pay for the film voluntarily. The only thing that copyright laws make sure is that those revenues go to the producers, so that they can be compensated for their costs.

Does this unnecessarily infringe on the liberty of copiers? I cannot see how, for when the film is not being produced they would not have anything to copy. So clearly they would not be better off without copyright laws. In a nutshell, when this film is not being produced no one wins anything, but a lot of people lose. This is exactly the difference between this case and a special interest policy case like the famous candlestick makers petition from Bastiat. It is a 'everyone loses' situation. How does that maximise liberty? Why should that be a libertarian position? And if 'everyone loses' does not bother you as a libertarian position then why not oppose property in general? What justification is there for property if it wasn't for the fact that property enhances everyone's choices in life. Not having property would also be a 'everyone loses' situation. Economic progress would be impossible and the scarcity would be greatly increased. But at least I would not be restrained by the boundaries of other people's property. In fact there are people calling themselves libertarians who do argue against all property. To me, this seems silly in a world of scarcity.

Even the person who is copying wins with this type of copyright protection. After all now he has something to copy. He may have to pay a small fee, or he may just do it secretly, but at least he has something to copy, which clearly enhances his choices in life and therefore his liberty.

On the other hand there are clearly bad intellectual property rights that should be rejected from an interpersonal liberty maximising position. A good example of bad intellectual property rights are rules like the copyright still lasting long ofter the producer of it has died. This is clearly not helping to produce more interesting content and therefore infringes on other people's liberty unnecessarily.

This also addresses another common argument against copyright. Which is that information are not scarce. This is overlooking that intellectual property tries to protect good, new information. Good intellectual content is very scarce. If you argue otherwise then tell me where I can find the information how to cure cancer. If it is not scarce, it should be easily accessible.

All other arguments against intellectual property rights that I have come across are essentially dealing with current wrong legislature of this idea. Yes there are lots of problems here, reaching from silly rules to using copyright as a tool for censorship. However, this is simply a general problem of having a state running a society. We also have this problem when it comes to physical property where the state provides very unlibertarian concepts of what that is supposed to be. In any case I believe, if you cannot protect your rights on a free market, you probably should not have them. And if it were to turn out that intellectual property rights are unenforceable in an anarchist society I am certainly not going to call for the foundation of a state to do so.

To sum up, I cannot put myself behind the cause of completely abolishing intellectual property rights. There definitely seem to be intellectual property rights that are helping to create interesting new intellectual content. This content is definitely enriching my choices in life and therefore my liberty. I do not want to give up on that.







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