Monthly Archives: June 2013

Ideas are not Property, on dismantling IP

The US Supreme Court ruled unanimously this past week that human genes may not be patented. That was a good decision. However those in support of this ruling are by and large hypocrites. They vociferously decried the negative consequences of upholding such patents (limiting research, higher costs, limited choice) but then fail to acknowledge these same deleterious consequences occur for ALL patents. It’s not like these bad things don’t occur for “legitimate” patents but do occur for “illegitimate” ones. Patents are the problem, not their “legitimacy.”

So what are patents (and copyright) (aka Intellectual Property or IP)? Quite simply they are a state granted monopoly for a fixed period of time during which the presumed creator has an exclusive right to do with their creations as they see fit. The hope is that in providing, as a reward, a period of monopolous profits such entities will be incentivized to expend resources in creation and thereby benefit mankind. This unquestioningly presumes that risk should be subsidized by the state. Risk the right way and the state will support you, risk the wrong way and you’re out in the cold. But that’s ok, because IP helps the “little guy” right? Wrong. The IP holder must enforce their IP. This necessitates enormous financial resources to legally pursue IP violations. Only the “big boys” can afford this and thus it becomes clear for whom the IP system was created. The IP system is nothing more than a symptom of state and business cronyism. One of the hallmarks of cronyism is the arbitrariness of the rules and regulations supporting it and IP is nothing if not arbitrary. IP terms have changed over the years, often in concert with the needs of the large corporations whose IP is threatened by expiration.

Although its cronyist roots are reason enough to withdraw support from the IP system, we find that upon closer inspection the whole raison d’être of IP is actually quite absurd. IP rests on the idea that mere ideas can be considered property. For a proper claim (title) to be made, the material in question must be “scarce.” “Scarcity” means there is some marginal cost of production, e.g. clothing is commonly available but it is scarce because it does not simply pop into existence; obtaining it requires some non-trivial expenditure of resources. Where there is scarcity there exists the potential for rivalry or conflict over some particular good. There are two ways to prevent such conflict: 1) invent a way to make the good non-scarce or (2) establish property rights in such objects.  Property rights are the civilized, non-violent alternative to killing each other in order to determine ownership/possession. But when it comes to ideas or non-scarce goods there can be no conflict because both parties can simultaneously possess the thing in question. Therefore without conflict there is no reason to have property rights. Such rights are entirely absurd – you might as well attempt to establish property rights in looking at the moon or the right to whistle. The only possible conflict is over who can legitimately say they thought or did something “first”. Fine, fight over that if you wish. But that is not a property right; just because you had the name “Greg” before me doesn’t preclude me from also using that name.

The idea of scrapping the entire IP system will raise the ire of those who have fallen sway to the false choice paradigm we are propagandized with our whole lives, namely that without such “protections” people will simply stop being creative and all new literature, music and inventions would dry up. Seriously. Now doesn’t that sound pretty stupid when you say it out loud. Do you really think there are NO other possible ways creators might get remunerated for their work? Do you truly believe that patents and copyright are the ONLY possible way this could work? These types of objections are about as imaginative as the “but who will pick the cotton?” rejoinders thrown at those that desired to end slavery. In other words, one’s lack of imagination does not invalidate my argument. End the shackles of IP and let loose the entirety of human creativity. (For a more in depth discussion please see the godfather of anti-IP, Stephen Kinsella’s “Against Intellectual Property” which can be downloaded, for free.

The following is an adjunct to the discussion above . The question “But how will this work?” is not a refutation of the principle that IP as a concept is invalid… however…it can be an interesting intellectual exercise to start from a priori free market principals and imagine how people might conduct themselves in order to accomplish the same goals absent a coercive state influence. I will go through some of the more common objections to dismantling IP.
The most common objection to ending IP is that businesses simply won’t innovate anymore because other businesses (the parasites) will just copy everything they do which in effect results in the innovating business subsidizing the parasitic businesses who have no R&D budget. There is just one problem with this. It only looks at one side of the equation (however in this case it reverses the usual paradigm of the “seen benefit and unseen harm” described by Bastiat into one of the “seen harm and the unseen benefit”).
These assertions always ignore the benefits to both society AND the business from whom the idea was stolen. Obviously society will benefit with lower prices and more choice (just as they do when drugs go off patent and can be made as generics). However all businesses will benefit because now it is “legal” for everyone to “steal” ideas from everyone else and improve upon them. So for every ten businesses “stealing” from Business A, Business A can in turn “steal” the ideas of ten other businesses themselves – often the same one that “stole” their idea to begin with. The playing field is leveled if everyone can participate. Rather than restricting R&D to just one company that happens to hold a patent, the creative R&D resources of thousands of companies can bang away at some idea, sowing improvements at each iteration, each company striving to outdo the others in either price, efficacy or quality.
As an aside here I would like to mention this is not an endorsement of industrial espionage. By that I mean businesses can have their employees sign non-disclosure agreements (contracts) and if such agreements are violated they have full legal grounds to pursue not only those employees but most likely the business they disclosed it to (tainted fruit as it were). Now some might object and say “well technically the business it is revealed to can’t be sued because they are not party to the contract”. True, however in a truly libertarian system (no employment law tying the hands of the employer or employee) any higher level employment situation (i.e. knowledge workers with the potential to bring innovation to the table) would be established under an employment contract and in such contracts only a fool of an employee would sign such a contract that did not stipulate that the employer will indemnify that employee in any lawsuit related to their actions in the course of employment (which would of course cover conveying ideas/processes learned at a former employer that could benefit the new employer). In that situation then the employer would be a fool to not make entirely sure all information they get from the employee is not covered by any sort of non-disclosure agreement since if it is, and they don’t check, the employer opens themselves up to an enormous amount of liability (indirectly via their employment agreement). This system would of course not stop such transfer of proprietary knowledge, but it would greatly mitigate the likelihood and even today’s system does not stop all of it either so to say that people might find a way around it and so therefore it can’t work is to say what we have today can’t work because people today find ways around our current system.
Now, back to trade secrets: If your process is truly novel and inventive then it will not be readily copied as no one will be able to figure it out (because without patents you would not need to disclose to the world how it works). If it is a secret, then keep it secret. However, if you are the inventor of something fairly obvious (i.e. one-click checkout, round edges on a phone) then it will be trivial for others to copy you. But because the invention was trivial you would not have had much invested it in anyway. Therefore in a free system those that invent truly novel things that are difficult to reverse engineer will naturally reap the most reward before competitors finally figure it out (if ever). “First to market” is still a powerful incentive to innovate. And even after others figure out an invention there is still much value in the reputation of being the seller of the “original” or “authentic” version of something.
Next common objection, “Ok Mr. Smarty pants, without IP you’d have even more firms like the Chinese just making cheap knock offs and putting the innovators out of business and since they aren’t innovating there is nothing to copy from in this iterative process you describe”. Think about what those “knock off” companies are doing. They are making stuff efficiently and inexpensively. They are making it less expensively than the makers of the “original” products. Now to the extent the knock offs are sub par in quality and function, there will be little market penetration beyond those who never would have bought the authentic product to begin with because of price – so no real loss there. But to the extent there are such manufacturers that actually are basically making “generics” of whatever product it is, that means they are of nearly equal quality and efficacy but for a lot less. In other words between the two such companies (the R&D company making it for a lot of money vs the Manufacturing company making it for little money) there is a stark difference in comparative advantage. One is really good at making stuff and one is really good at inventing stuff. That means each will tend to specialize and become better and better at what they do. Without a patent system we would tend to see more company specialization. For example today companies are more vertically integrated in that they invent things and then manufacture them and then waste time and resources going after those that copy them. In a system without patents the “inventor” companies would specialize in R&D and inventing things and then they would turn around and sell the information on how to make some hot new thing to the manufacturing companies. Basically it is contract manufacturing – which already exists today. The resources they formally spent fighting them with are now used to make improvements. The manufacturing firms are weak in R&D but great at manufacturing. It is a natural symbiosis where the strengths and weakness of each partner complement each other. So as companies specialize in this way we get better R&D and we get better manufacturing. It doesn’t mean that companies can’t still invent things and then make them and sell them, it just means that market pressures will tend to minimize the number of companies operating this way. Only companies whose products require enormous capital investment (e.g. auto manufacturing) would likely continue to exist in this arrangement or within markets that are too small to justify specialized manufacturing needs. Just because the structure of businesses today may not work under a no patent system does not mean there is not a different way to structure business that is just as good if not better in terms of net benefits for society in terms of total goods produced and the function of such goods. For example, perhaps without IP the variety and innovation in smart phone technology would be much more advanced than what we have today and there would be greater variety and lower prices, all because all parties could copy off each other, incorporating each new innovation.
And since I’m throwing out ideas about how things might work, let us now turn to how artists (musicians, authors, print, cinema, etc) could ensure remuneration under a no copyright system. One approach used today is the license, which I believe would work in many situations although it does not protect against copying from a non-license holder (e.g. occurring from loss or theft from a license holder) or violation of the license that can’t be tracked to the originator. But for most situations it would work.
Another approach is the pricing approach, i.e. make the product so cheap that the marginal cost of actually pirating is higher than just buying it (e.g. if songs were a nickel is it really worth your time to scour the web for some hack site trying to track down that song…is it really worth it for those people to maintain such a site? It does actually cost money to maintain such sites (domain fees, server hosting fees, etc). Maybe you spend just 5 minutes doing so but even at minimum wage you just wasted 60¢ of you’re your life away when with one click in 2 seconds you could have the song you want for a nickel.
In general, if people are pirating things that means they cost too much (the cost to pirate is lower than the cost of just buying) and if people are scalping things then they cost too little (i.e. you’re basically giving it away). The key is to find that sweet spot of price where the costs of pirating are higher than what it is sold for, but the sell price is not so low that someone can actually realize an arbitrage advantage by buying it at that level and reselling it at a higher level. For unknown artists this approach is already used today. Many simply give away their fares for free or for next to nothing. They simply want to become known. Once they are known and in demand, then they can slowly raise their price.
Another approach is one I call the “trickle down” approach. It is somewhat similar to the system we have of publishing houses or record labels although it is certainly not restricted to such entities (i.e. an artist could sell to whomever they wish at the initial high price). Here’s how it would work: The artist would be paid upfront a very high sum that would cover the total of what they want (the more well known they are, the more they can demand up front). So copying of works really doesn’t hurt them insofar as they have already received everything they expected to get for the work. But the basic idea is incentive driven copy protection. So for example lets say some artist comes out with some great new work and in order to ensure they get as much as they need based on the effort that went into it they would sell each copy of the work for say $200,000. So let’s say only 5 people want it at that price – the artist made a million bucks right off the bat, not over decades of trickling in royalties. Now each of those buyers at $200,000 has the right to resell it. They’ve spent $200,000 so they sure as heck are not going to just give it away, they have a great incentive to get back what they paid and possibly more. They are all competing against each other as well so the price they charge will tend to start out high but drop as they compete more and more in trying to squeeze out every bit of value from their investment. They might sell 200 copies at $1,000 each. If you spent $1000 on a book or CD would you just “share” it with your friends? No. But you might sell it to them or others at a level where you hope to perhaps break even or make a little.
At some point the price reaches a level where the marginal costs become low enough that people will start to trade or give away what they bought. So this system is not much different than from what we have with any hot new product that comes to market. The rich will pay exorbitant amounts to have bragging rights to be the first to have something and as more of them buy it, costs come down and then more and more can afford it until eventually all can afford it. Progressives should love this as the “rich” pay disproportionately more for something based on their income level, but they do so willingly. The “poor” end up getting things for next to nothing or for free. The only real penalty being that the “poor” must wait longer, but is it really a tragedy if those of limited means must wait a few months to enjoy the latest hot album or book or movie when compared to the rich that have access to it immediately? One objection might be this would not work for new or unknown artists. True, and I did not say this is the way it must work for everyone. This is just one idea. And that is the point, there could be dozens of different creative and inventive approach’s people will take up. Many artists today sell direct to their consumers and that works well for the small or unknown artists as they tend to have a loyal following and there is little market to pirate the works of unknowns.
So to ask “how would this work?” is a bit silly – obviously people would figure out ways to make it work. I’ve presented only a handful here. In order to answer this question the onus is shifted from the questioner (who can’t justify his position) and onto the questioned party to come up with the outcome of what will take the creative efforts of thousands or millions to come up with. The questioner presumes that if the answer provided might have even one tiny hole poked in it as to how there might be a problem with this approach or that, then the whole idea must be scrapped. Based on that reasoning we should dismantle the IP system as it has dozens of problems. It certainly hasn’t stopped “piracy” has it? The only fixes offered up amount to nothing more than greater and greater intrusions of state control in our lives (PIPA, SOPA, etc). Must we give up all semblances of privacy and private property in order that the state be enabled to guarantee IP “rights”?

E-Verify = National ID

Over at Huffington Post, David Bier goes into some detail on how the innocuous sounding “E-Verify” may very well morph into a biometric National ID system. The comments following the article were quite depressing – the all too willing sheep take umbrage at having it pointed out to them that our wise overlords treat us as children. Here’s what I had to say to that:

These comments are pretty sad. You guys are missing the big picture. The problem is not the light onus of obtaining said ID. The problem is the classic “slippery slope”. Today it is evil “ferners” who “steal our jobs” that we are trying to control. But what will it be tomorrow? If you agree to a system wherein a citizen must obtain permission from the government to engage in Activity A (work), then you will have no right to complain when the government adds more and more activities to its Control List. With the ability to biometrically identify anyone anywhere at any time (think biometric scanning drones so high in the sky you won’t even know they are there) perhaps a “Save Our Roads” bill will allow the government to decide if your car should be allowed on certain roads at certain times (aka “road rationing”). Or perhaps in order to equalize economic resources you will only be permitted to shop at certain stores thereby forcing you to shop at others (to save jobs). Or perhaps restricted from buying certain items (“Bill is overweight so no beer for him”)
In short these systems allow us to be corralled around in our daily lives like sheep. And all of it is for our good, of course. Government is now our shepherd and technology the sheep dogs… and judging from these comments most of us are all too willing sheep.

I’ve written on this topic before at greater length, please see this page for more.

Free trade comments

After reading an excellent article on immigration reform and free trade by Benjamin Powell, I was depressed by the numerous knee-jerk mindless comments of those that have been indoctrinated into the belief that all good in this world can only come at the end of a stick-wielding state… that the state is the last thing that stands between “the people” and evil rich people who are poised to take over the world and put us all into chattel slavery. Anyway, I picked one of the most obtuse comments and made a comment, you can see the whole thing here, but here are the highlights:

Commenter says: “The basic case for free trade builds upon the fact that different people, in different places, have different abilities to produce goods and services.” That is not a basic case – it says nothing about who will benefit and who will lose. 
So called Free trade has ruined people in Africa, South America, Latin America, and now in the USA.”

So then I say “You don’t really understand what trade is do you? Nobody loses in trade. The only reason people trade is that they value what the other person has more than they value the thing they are giving up to get it. Both sides “profit” from trade. “Free trade” has not ruined the peoples you cite – Marxist/totalitarian governments who keep their people poor by confiscating all wealth created have ruined them. Because the standard of living in those countries is not the same as it is in the US is not the fault of free trade… we’ve just been doing it longer than they have. That’s like saying school is harmful because you compare a 12th grader to a 1st grader and blame school on the fact that the 1st grader can’t do calculus like the 12th grader can. Ceteris paribus. You aren’t making an apples to apples comparison.”

Someone else says “You don’t understand trade. You probably took Econ 200 and think you know something. You probably learn “comparative advantage” but never learned “absolute advantage”. Also would you consider trade with slave masters a “win win”? How about trade with cannibals? What about trade with a brutal dictatorship?”

 

So then I say: “There is no “absolute advantage” in trade – “absolute” is a term reserved for the physical sciences where one can make objective “absolute” measurements, i.e. mass = 20 g, temp = 25 °C, 12 neutrons in a carbon atom, etc. Economics is the study of value, and value is subjective… 

To your points: Trade with slave masters: (I presume you mean between the slave master and the slave) that is not trade by definition, trade can not be coerced, if the process of exchange is coerced then it is theft, not trade.
Trade with cannibals: is this a joke? who is trading with cannibals?
Trade with a dictatorship: this is similar to your slave master example although here I presume you mean trade of a “normal” person with the slave master himself (in this case the dictator who enslaves his populace)… so no, of course that is not “win-win” for everyone but it has nothing to do with fact that trade is occurring, it has to do with the fact that one party gains their advantage by stealing from others (the citizens so enslaved). 

You’re straw manning the argument here, no different then implying trade can be bad if a thief engages in trade. Well that is “bad” not because it is trade, but because one party is a thief. If a thief eats hamburgers does that make eating hamburgers bad? No, well then it doesn’t make trade bad either just because a criminal engages in it.”

Safety vs. Liberty

Fear. Fear is paradoxically a powerful motivator and pacifier. It compels us to fight back but sometimes can lull us into complacency if we believe such complacency will protect us. It was recently revealed that the NSA been collecting “metadata” from American’s phone conversations and recording the content of our internet usage in a furtive attempt to uncover the word “TERRORIST” in a virtual global-size Word Puzzle.

terroristPuzzle.jpg

After this revelation there was much popular indignation. Liberal, libertarian, and conservative – all briefly joined together in outrage that their government would subject them to such scrutiny. We all (naively) believed our internet communications to be private; thus our outrage over such virtual eavesdropping was no different than had the NSA been bugging our bedrooms. Then something happened. The government did not blink. They were not at all shamed by this revelation. In fact all three branches of government defended it on the grounds of safety. Or the illusion of safety anyway. Without the PRISM program (the codename for the internet spying) we might have fallen victim to dozens of terrorist attacks, so they say. The brushfire of outrage was all but quenched with the bucket of our own fear – “well I guess it’s ok if it will keep us safe” now says John Q. Public.

How many violations of our liberty will we accept to keep us safe? Since we generally value our lives more than anything else it is safe to say we will tolerate quite a bit. And those in power know this. That is why historically such appeals to “protecting the people” have always been the siren call of despotic regimes intent on accruing more and more power to themselves. Such appeals to “safety” give them a carte blanche to inflict just about any measure of control over the citizenry. The trick though is that it must be done piecemeal. You would notice a million ants at your front door, but one or two sneaking in under the door each day are hardly noticed at all. Given enough time eventually all the ants are inside and by then it is too late.

Rather apropos was Anton Scalia’s dissent  last week in an unrelated case, “Solving unsolved crimes is a noble objective, but it occupies a lower place in the American pantheon of noble objectives than the protection of our people from suspicionless law-enforcement searches.”

Yes indeed we could find more criminals if police could search any house they wanted any time for any reason. If we required every citizen to provide a DNA sample or undergo a psychological evaluation we could prevent many crimes. If we could bug every home, building and car we could surely catch a terrorist or two. But is that the country we want to live in?

We can speak of balancing liberty and privacy but by what non-arbitrary method can one find that balancing midpoint? There is none. The need for safety is always immediate whereas the need for liberty is less exigent; therefore in a contest between the two, liberty tends to lose out. We don’t realize we need liberty it until it is long gone.

But this whole question of balancing the two ignores the elephant in the room. How did we get here? How is it that we have the tiger by the tail? Even though Ron Paul was ridiculed for bringing the question up 6 years ago (as though to merely pose the question is to be guilty of being un-American), we still are not addressing why America is a terrorist target (short answer: our interventionist foreign policy).

If our boat is sinking, the immediacy of safety demands we bail out the water, but perhaps it would be prudent to find the source of the leak instead of focusing all energy on mitigating its effects. Reacting to the effects of something we are willfully blind to is the definition of futility.

On Voluntaryism, Stateless Societies and Contract Slavery

Recently I got involved an interesting philosophical discussion on Facebook (where else!) concerning taxation and the proposition that if you don’t pay your taxes men with guns will come and take you to jail or kill you (all true). One participant brought some focus to the conversation by distilling down the core argument to one of a) should we have government (b) how shall we pay for it (c) constitutions are like contracts. All good points, however embedded in each one is either a false choice or a fallacious assumption. So below I will reproduce his post and then my follow up as I address some of the main fallacies. 

here is the quoted content from the post I will be responding to:

This conversation, and every conversation about the scope of govt comes back to the same place. The first division is you are either an anarchist or you want some kind of law. The moment you say you want some kind of law, you are agreeing that at some point in the process of enforcing the law, a dude from the govt with a gun will come take you away. And I am okay with that – no point in pretending we have laws if they are not going to be enforced.I am willing to listen to discussion, but anarchy is probably not for me, or most of us. So then it’s like the old joke about the prostitute – we’ve already established what you are (pro-govt of some kind), now we’re just haggling over price. Where is the line in the sand as far as your philosophy of the proper scope of the law?I would suggest that the only useful argument by a libertarian about government is that it ought only exist to prevent one adult from using force or fraud to gain from another adult – whether that gain is via money or to forward an agenda. Situations involving children and the mentally impaired are naturally given to tighter governance.So to me, the idea that we’re arguing over whether or not you must / ought pay federal taxes so the govt can fund its activities is a little pointless. The only real argument for strict Constitutionalists or libertarians ought to be about the USE of the money, not the government’s right to take it. The law of tooth and claw was used to appropriate the land upon which I sit and afterward to create the govt that exists here – the RIGHT is almost irrelevant. Were I to be successful in dissolving this (formerly) useful govt, it is most likely a worse govt would take its place. There is no perfect freedom on this side of heaven, so the notion that no entity can curb my inclinations or bind my freedom is almost childish.We can get into a lot of philosophical discussions about man being created free and whatnot, but the fact is that there will be some govt, and we enter into “contracts” (the Constitution, say) with other free people to create these govts that will enforce our individual rights to property and to secure freedom from invasion, etc. With our ancestors having agreed to some form of these contracts, and most of us agreeing that they ought to exist in one form or another, we should be focused on the quality of the contracts, not the terms of enforcement.

Here is my response:

Your points I think have helped to focus the discussion, however the underlying assumptions simply reinforce the false dichotomous choice that is beaten into us from day one (by our educators, our literature and the state media) – namely that one has a choice of either being ruled by others (in the form of this thing we call government) OR absolute and total chaos with no laws or order whatsoever. Obviously with a choice like that who would pick the latter? And to an extent I think part of the failure for the proper alternative being made understood falls at the feat of us libertarians – we (or some of us) throw the word “anarchy” around and do not explain at all what is intended by the use of that phrase. I personally prefer “voluntaryism” – it’s enough of a neologism that it carries none of the associated emotional baggage of “anarchy”. We want the freedom of choice. Not the freedom to state our choice and have it vetoed by a “majority”, but to actually be allowed to execute our choice.


When we libertarians speak of “freedom from government” we do not intend a lawless, chaotic, anything goes sort of wild west world. Far from it. We want government. We want order. It’s just that we want to pick our own government to associate with. And we do not believe that simply because I happen to live next door to you and you want to associate with a government that establishes rules that promote Ideology A and I want to associate with one that promotes Ideology B, your choice should have any bearing on my choice. 

Think about it for a minute. I’m proposing something no more controversial than what we currently practice today – freedom of religion. If I’m Catholic and I live in a town full of Baptists it would seem ludicrous to anyone to suggest that “well since a majority of people who live here are Baptist, well, you have to be Baptist too, or at the least you have to do all the things the Baptists require” – and that if I didn’t comply I would be throw in jail. That’s insane – and rightly so, and everyone would agree that that would be insane. And so it is no different with government. This type of governance is not unknown. It is sometimes referred to as a “clan” system. In more “primitive” stateless societies families had a self-interest in protecting each other. They came to each other’s defense and helped each other in times of need. In time it became customary for non-family members to join a family or clan for such protection purposes (voluntarily paying or contributing something in return – i.e. truly voluntary “taxation”). However all members of the clan were responsible for the behavior of its members. If one member injured someone in another clan then all members must make restitution. They then obviously had a self-interest in preventing such behavior from those they knew to be the most troublesome. Eventually if a member behaved badly enough consistently enough they were thrown out of the clan and thus had no protection of any kind from any group. They were an “outlaw” – which meant that anyone could kill them, rob them whatever without any consequence whatsoever. That’s a pretty big incentive to not become an outlaw and behave as directed by the customs and laws of your clan. (For a brief discussion of this system in Ireland please see this interview with Gerard Casey by Tom Woods ). In order for all clans to get along they tended to adopt the same basic “common laws” against violence, theft, rape, etc. So in this way we can see how “law” can exist without an over arching state. Everybody is against rape and murder. But not everyone might be for space exploration, or green energy, etc. Essentially each clan is a government, the only difference being they did not have specific geographical boundaries. Members of multiple clans could all live in the same city and get along just fine. There is no reason such a system could not operate today on a larger scale, one where entities very similar to insurance carriers took the place of the role of government in dispute resolution, restitution, crime mitigation (less crime, less to pay out in losses). If such an entity does not provide what people want, they will go elsewhere. Without a barrier to entry imposed by outside regulations no one could ever “take over” such an industry, the market would always be providing those that could do it better, faster, cheaper, etc.

This has gotten a lot longer than I intended, but let me just touch on another point you made. The one of contracts is germane, however you again accept the “party line” that the fact that our ancestors freely entered into a contract (the Constitution) somehow morally binds us to that same contractual obligation in perpetuity. How can it? Are we bound by the contracts our parents sign? If your parents had a huge amount of debt and then died would you want to suddenly be saddled with that? What if I could vote myself out of the contract, but my siblings wanted to remain party to it, and thus I was then bound by their vote – why should I be bound by their choice? There really is no difference between that and the idea that we are all still adhering (or pretending to adhere) to a contractual document signed by people that have all been dead for nearly 200 years. I talk about this idea of contractual slavery more here

The Magic of Democracy

Jon Stewart (The Daily Show) had a humorous take on the recent IRS scandals (see clip here) however what I found most interesting in his monologue is what I believe may be the most succinct summation of the core belief system of all progressives/socialists:

“I believe…that good government has the power to improve people’s lives and that the people have the power to restrain its excesses.”

Within this statement are two fallacies. Let’s deal with the first one. Although government can in theory improve people’s lives, the fallacy is in the unspoken assumption that government is the only agent in society that can accomplish such goals. Using government to improve people’s lives is like using a hammer to drive in a screw – it can get the job done eventually but there are far more efficient ways to accomplish the task.

The second half of the statement, however, yields the much more interesting and widely held fallacy. It embodies the fatal naiveté of those who believe democracy is the most perfect form of government. Democracy provides us with the comfortable illusion of self-determination and control while in reality providing no such thing. As we ride the majority wave we delude ourselves into thinking we control the wave, but we do not. One second we are high on the surf, the next we are plunging downward as we are pulled out to sea against our will. We do not control the mob, the mob controls us.

No system is perfect but monopoly governance short circuits the natural feedback mechanisms that would otherwise eliminate abuses. To naively believe “reform” can fix our present woes is to ignore man’s basic instinct to obtain more with less effort. When this instinct is set loose in monopoly government the result is cronyism, when set loose in the market the result is innovations and efficiency improvements.

Some believe the government feedback is not broken, that it is the polling booth that provides this check on abuse. This does seem plausible – “vote the bums out” as they say. Unfortunately, this feedback fails to effect change as long as only a minority is abused. The minority can never garner enough votes to “change” things and everyone else is indifferent as long as they are not being affected. The majority is pandered to by promises of favoritism at the expense of the minority. And so nothing changes. If businesses were run like government (wherein employees voted for the boss that promised them the biggest pay increase) is it not obvious such selfish self-interest would eventually lead to financial collapse? The size and scope of government debt serves as testament to the accumulation of just such abuse. A private entity could never have accumulated so much debt and would have been extinguished long ago.

Voting on who runs the government makes about as much sense as voting on who should run Publix. Publix sells us goods and services and so does government – why does Publix have to compete for our dollars but government does not? Why do we vote for government leaders but not Publix leaders? One word: taxes. Taxes are compulsory. Voting mollifies the masses into the delusion that they have chosen this compulsory state in much the same way a corralled animal chooses its path. A leashed animal is restless and fights the leash. But, remove the leash and allow it to roam free on fenced pasture and it will cease all resistance. The illusion of freedom is quite powerful.

The Truth Emerges…

What are the lessons from the recent IRS scandal surrounding the targeting of conservatively named groups for heightened levels of tax status scrutiny? Is it that there is a vast left-wing conspiracy in this country and this is just the tip of the iceberg? Is it that Obama is the fiendish mastermind behind these directives? Although neither is impossible, the likelihood of either scenario is dubious at best. Conspiracy theories that involve the government are a peculiar sort. They are often germinated by those who assert on one hand that government is as effective in its stated goals as a flopping fish but then on the other hand claim that when it comes to the conspiratorial acts it possess the organizational acumen of a stealthy ninja.

This scandal demonstrates not the intent of a scheming mind but rather is a mockery of the hubris of those who believe “we” or anyone can “control” an entity as large as government. From the complexity of such large entities there emerges certain properties that are neither predictable nor directed (in biology known as “emergent properties”). The emergent property we are seeing here is “selective enforcement.” We tend to think of government as this monolithic entity acting with a singular will. This interpretation turns a blind eye to the obvious truth that “government” is composed of freely acting individuals who can, and often do, whatever they wish. They act with impunity, reaching out from behind the collective government shield that protects them. Occasionally the shield is pierced, as with the IRS scandal, and we are allowed for a brief moment to bear full witness to the results of granting our agent (government) absolute autonomy over ourselves.

The fact that the outrage around this scandal is so misdirected is a testament to how inured we have become to government intrusions. The scandal should not be that these rules were selectively enforced but rather that such rules exist at all! Abstractly the scandal can be as summarized as follows: the rules say everybody that wants a cupcake must have their knees smashed with a baseball bat. But that takes too much time and energy, so they just started smashing in the knees of people they didn’t particularly like. Then people got upset because it was unfair they weren’t bashing in everybody’s knees. We’ve been beaten down so long it seems almost “crazy” for someone to suggest perhaps the beatings should stop (yes – I mean this metaphorically people.)

But, what can we expect when we have granted fallible, petty, capricious human beings nearly unlimited power over other fallible, petty, capricious human beings. How does slapping the label “government” on one group magically change their nature? It doesn’t, and that’s the problem.