Yearly Archives: 2014

Order at the Border

This past week the Supreme Court of the United States (SCOTUS) issued a ruling in Riley v. California that dares to uphold the remains of a much abused 4th Amendment. The court ruled that the police may not search the cellphone of someone placed under arrest (often for offenses as trivial as “disobeying a lawful order” or “disorderly conduct”) without first having obtained a search warrant. In the digital age the principal of good design “form follows function” no longer is guaranteed. Digital function is not deducible from physical form; the sublime masks astounding capabilities. The contention was that since traditional wallets can be searched it must follow that anything approximately the same size as a wallet can be searched. A cellphone and a wallet may be comparable in size but that is where the similarities end. The rules that allow the police to search a defendant after an arrest dictate a limited spatial area (typically directly under the suspect’s direct control e.g. a car). So at first blush it might seem that if a cellphone is within that area it is fair game. But that analysis ignores the ways in which technology can redefine notions of spatiality. Cellphones (or the “smart” ones anyway) are not mere digital copies of the old-fashion wallet. They are but a keyhole onto a warehouse of information. Packed into these devices is the equivalent of what formerly would have been contained in ones home years ago; in essence they do indeed house ones “papers, and effects” which the 4th Amendment specifically protects from warrantless searches. Chief Justice John Roberts summarized this idea in his ruling:

 “With all they contain and all they may reveal, they hold for many Americans ‘the privacies of life.’ The fact that technology now allows an individual to carry such information in his hand does not make the information any less worthy of the protection for which the Founders fought. …Our answer to the question of what police must do before searching a cellphone seized incident to an arrest is accordingly simple—get a warrant.”

 

However, as heartening as this decision might be, there still remains today an egregious violation of basic 4th Amendment rights that has time and again been upheld but the SCOTUS: border searches. In the court’s opinion (United States v. Ramsey (1977)) searches made at the border are de facto reasonable because they occur at the border and thus is any conflict with the 4th Amendment extinguished with a mere definitional twist. Border searches do not require suspicion nor a warrant; anything and everything may be legally searched and confiscated for no other reason than that one is crossing an imaginary line.

Even if one is inclined to believe that such border searches are necessary to keep out criminals and “illegals,” what may surprise you to learn is that the “border” is defined as 100 miles inland from the actual border (aka a “Constitution Free Zone” that encompasses two-thirds of the US population). What that means is that anyone, anywhere within 100 miles of a US border may be legally detained and searched for no reason at all by the DHS or ICE goon squads. They may seize electronic devices (phones, laptops), copy them wholesale, return them, and then rummage through one’s personal information at their leisure. That this does not currently happen routinely is small comfort; there is not a single barrier to the legality of such behavior. If you are within 100 miles of the border you are fair game. You may think you have nothing to hide, but do you really want total strangers looking at your photos and reading your emails? Secondarily, there is nothing objective about the 100-mile value – it could be changed to whatever arbitrary value our wise overlords deem necessary to maintain, “order at the border.” We are just one crisis away from a 250 or 500 mile border zone.

So while we may applaud the SCOTUS for their recent affirmation of 4th amendment protections, let us not forget to jeer them when they continue to permit those same protections to vanish at the border.

Student Loan Bubble & Moral Hazard

The insurance industry is unique in that its product tends to incentivize the very behavior people seek to protect themselves from. This is called “moral hazard.” For example, all things being equal, someone with collision insurance will tend to drive more recklessly than someone with no coverage. Someone with flood insurance will deliberately build their home in a flood zone. In other words, people do things they would never otherwise do absent the assumption of protection.

There are ways to tame moral hazard. Large first-dollar deductibles ensure that the insured will feel some pain with a loss – negative feedback affects one’s behavior and results in more cautious behavior. Likewise, some events are not insured if the moral hazard cannot be mitigated. For example, homeowner’s policies do not cover loss from damage attributable to failure to maintain the upkeep of one’s home. Although moral hazard is a foundational flaw in human behavior, the market (that is, people) has figured out how to tame it.

The state is an insurer (it purports to protect its citizens). It is however the worst kind of insurer because it actively encourages moral hazard. From the crony-capitalism of “too big too fail”, loan guarantees for favored industries, to student loan bailouts, the state has a sordid record of incentivizing moral hazard by encouraging behavior its minions witlessly seek to avoid. For example, the student loan program was implemented to encourage more tuition lending by banks so that more people would go to college. This created the moral hazard of banks lending to people they otherwise would never lend to, thereby vastly increasing the demand for higher education. This massive explosion in demand (quite predictably) encouraged schools to ratchet tuition upwards. Why? Supply and demand. Loan guarantees ensured ever increasing demand that was insensitive to price increases. In a normal market, increasing tuition would have decreased the pool of available funds for such lending or raised the cost of such lending, but in either case these would have both resulted in inhibition of tuition increases and a subsequent restoration of equilibrium between supply and demand. But in a market suffering state intervention, equilibrium can never be achieved, as rising prices present no inhibitory effect on the level of demand. This resulted in tuition increasing over the last 40 years at 3-times the rate of inflation.

This willful blindness of moral hazard by Obama and his ilk is not merely sad, it is downright destructive. His recent actions only serve to deepen the crisis, not ameliorate it. By executive order (royal decree) he recently extended a cap on student loan payments to cover loans made before 2007. This cap allows borrowers to limit their loan repayments to 10% of their income for 20 years and after that the loan is “forgiven” – that is, it simply vanishes like a fart into the wind, courtesy of the US taxpayer.

This executive order is symptomatic of all state interventions: heaping fixes upon fixes to fix previous fixes. To encourage lenders to make student loans to anyone with a pulse, the state removed bankruptcy protection for student loans in 1976 and then promised the lenders to act as their enforcement agent. Step 1: All risk shifts from lender to borrower. So with Uncle Sam acting as Guido the Enforcer the floodgate of loans opened. Then loan repayment became problematic for a growing number of students (due to a dismal job market resulting from state intervention in the economy) and this inability to discharge loan debt likewise became a political liability for our wise overlords. The quick fix? Step 2: Shift all risk from the borrower to the taxpayer. For now, concentrated benefits (to students) and diffuse costs (from taxpayer) ensure little mass objection. But soon enough these loan write-offs will be priced back into tuition rates. The only solution to this quagmire is the most politically painful one: end all loan guarantees, permit bankruptcy protection, and allow lenders, not the state, to determine who is a worthy credit risk and who is not.

Middle Eastern Chess – Check!

So let me see if I have this straight. Even though there was zero evidence that Iraq was involved in the attacks of September 11, 2001 or that Al-Qaida had any operational presence in Iraq, the US invaded Iraq anyway. This resulted in nearly half a million dead Iraqi’s, close to a million Iraqi orphans and a death toll of US military personnel that more than doubled the carnage of September 11. The invasion was the light that brought on the moth-like focus of Al-Qaida to that region. Not content with that mess, the US unilaterally decided to depose Gadhafi, thereby creating a power vacuum in Libya that allowed Al-Qaida influenced forces to move in. The US then fomented instability in Syria by backing Al-Qaida linked rebels there in the hope that they might overthrow Assad. Now with the entire region destabilized, an Al-Qaida splinter group (ISIS – Islamic State of Iraq and Syria) managed to seize Mosul (Iraq’s second largest city) last week using money and equipment the US funneled to its destabilizing pawns in Libya and Syria. With the capture of Mosul they have further enriched their US equipment arsenal (left behind by the fleeing Iraqi army). This situation is so upside down that the US is actually receiving invitations from the Iranians for joint operations to battle ISIS in Iraq. Brilliant. How did we get here? For years the US supported a number of Middle Eastern dictators as long as they supported a Petrodollar based economy that ensured the free flow of cheap oil to the US. But when our pet dictators stopped behaving, the US tried to displace them with more malleable US-friendly social democracies. Unfortunately the exact opposite developed: US-hostile Islamic theocracies. They have a word for that: blowback.

Then again, US opposition to this shift in power (or the one presently underway in the Ukraine) is completely hypocritical. States may differ in ideology, but they all behave exactly the same. The current power shift merely exposes to public scrutiny the operations of the state normally hidden behind a wall of threats: violence by a select few who proclaim to speak for a majority in order that they may impose their will upon a wider population circumscribed by an arbitrary geopolitical boundary.

In fact nothing is really changing in any of these regions. The flags, slogans and draperies of the capital building may change, but the core violation of the right of the individual to live their life as they, and not others, see fit remains. So even though we may personally object to the precepts of Sharia law, are we objecting to the law itself, or are we objecting to its apparent imposition on the people? Would such objections evaporate if 51% of the people there desired Sharia law? Does majority opinion legitimize such laws? Before you answer that, consider this: ISIS is slowly fostering such communal consent via the oldest political trick in the book – bribery. ISIS is taking a page from the placate-the-people-playbook of modern social democracies. In both Syria and Iraq they have organized “dawa”, i.e. social welfare programs for the local populace (food, fuel, medicine) . And just as honeybees are calmed with smoke, so too are people calmed by the ephemeral gifts of those in power. ISIS is run not by warriors, but politicians with guns. Every politician knows that if you give the people something, they will give you their consent (vote) in return – in this case the price is not literal votes but implied consent to Sharia law. So, if you are for “freedom” and “democracy” and assuming you aren’t a total hypocrite then you should be ok with this extension of majoritarian communal consent. After all, democracy is nothing if not the concept that when some people freely make a choice, it is ok to impose that choice on everyone. But, if you realize democracy is the wool the state pulls over your eyes to fool you into believing you have control, then you will also recognize that majority opinion is as legitimate in determining how we should live our lives as a coin toss.

I hate Paypal

I really hate Paypal. It is astonishing that a company a mere 16 years old could so quickly devolve into a lumbering bureaucratic beast that is indistinguishable from a government agency. As the consumer/buyer I have no qualms with Paypal; sending money to people or companies is more or less a painless experience. However, when the roles are reversed and I’m the one receiving funds, well, they are less “pal” and more “foe.” Allow me to explain: My company has used Paypal for many years to process credit card payments. Their fees are generally lower and their electronic data integration not too terrible. But something has changed in the last few years. We have quite a number of overseas accounts and it would seem that once you start processing charges for such accounts you become the financial equivalent of dead Nigerian potentates and Viagra merchants in their eyes. They suddenly develop a keen interest in the inner workings of your business. They want to know what you do, what you sell, and (for a few “select” transaction involving overseas customers) every few months they request detailed copies of invoices, bills of lading and proofs of delivery. Mind you this is not in response to a complaint from anyone. No one is claiming they didn’t get their product. No one is claiming their card was stolen. They just do it because some misguided bureaucrats at Paypal thinks “not-US” = “criminal enterprise”, therefore all things in any way linked to “not-US” must be subjected to absurdly intrusive levels of scrutiny that would make IRS audits look tame by comparison.

So these requests came up once before and I complied, because (a) they freeze your account so you can’t withdraw funds and (b) I assumed it would just be a one-time event. It wasn’t. It happened again this past week (hence this rant). This time I told them I would not be complying with their silly requests and that perhaps they should consider the amount of charge volume we move through them when they considered my request to cancel their request, unfreeze our funds, and never subject us to this garbage again. They didn’t budge. They don’t care. I was told I would have to 180 days to get the company’s money if I wasn’t going to be supplying them with the laundry list of requested information. So much for valuing the customer.

Now at this point most people would be thinking, “that’s unfair, they can’t freeze your funds absent an accusation of fraud, the government should do something about that!” And to be quite honest I understand the sentiment. But it’s not very empowering thinking “well maybe those folks called government might fix this mess in a few years.” What is much more empowering is realizing you are always in control. I can tell Paypal to pound sand. I do not have to comply with their edicts. Yes waiting 6 months to get the money is an inconvenience, but one that is well worth the gratification of refusing to comply. You always have a choice. Or at least you do when dealing with a private business. If you’re dealing with the government you don’t have that choice; you either comply or face prison or worse.

Why do we have no choice when it comes to government? Because the state declares a monopoly on governance, thereby eliminating all competition in the services provided by said monopoly government. Without competition we end up with entities run as poorly as Paypal but which will never improve because there is no incentive for them to do so. Paypal has competitors. Paypal eventually must change or it too will perish (just witness the ashes of AOL’s internet monopoly). The state allows no competition. It’s power forever ratchets upward, untouched by the counterbalancing force of free competition. Voting is no proxy for competition; it is the false choice of two doors that both open on the same room.

Health of the State

The War on Drugs is perhaps the most unjust “war” ever waged. It is not, as in conventional warfare, a conflict between states, but rather a conflict of a parasite (the state) against its host (the people). Just as cancer grows by attacking its host, so too does state power expand as it attacks its citizens in the name of saving them. The tumor that is the drug war is but one variant of the cancer that is state power.

It has been said that war is the health of the state (Randolph Bourne). If that is so, then traditional wars (against people) are far too fleeting as a means to bolster state power. The end comes relatively soon as both sides are worn down through attrition. In order to have unending war the state must fight an enemy without form, substance, or soul. This is achieved by waging war against thoughts, emotions, and things; for these things can never be conquered, and thus is ensured the eternal health of the state.

The colorful imagery of a “War on Drugs” suggests perhaps we are battling against anthropomorphized weed and poppies as they brutally attempt to intoxicate us by crashing through our doors and up our noses. Yes, I’m being facetious – now I shall be sarcastic: the real criminals in this war are those who possess these vilified substances.

The police will almost never stop a murder, rape or robbery in progress, but gosh darn it they sure as heck can find a crime in progress if the crime is mere possession. What is the easiest way to capture a criminal? Declare random object X illegal and then find people who happen to possess X. Such prohibitionary lawmaking has led to a perversion of policing incentives. The police now have two choices: Demonstrate effectiveness in catching real criminals through laborious detective work that rarely pays off, or, invent new and interesting pretexts to see if dear citizen is in possession of a verboten substances. Which one is more likely to yield results? Exactly. And so focus shifts to the quick and easy result at the expense of the more difficult task of meting out authentic justice.

This truth has engendered the most sinister aspect of the drug war: the no-knock raid. If the police knock then the suspect might stealthily comply with the law and cause himself to no longer possess the banned material. So on the premise that it is better that a thousand men die than one guilty drug user go free, we have seen the birth of the no-knock raid. Yes, sometimes they’ll get the wrong house, sometimes they’ll accidentally shoot totally innocent people (or almost routinely shoot innocent dogs), but it’s all worth it if it prevents a drug possessor from sometimes getting away. No-knock raids are a breeding ground for all manner of confusion and mistakes. To wit, just last week in Cornelia, Georgia a no-knock raid resulted in a 2 year old suffering massive burns over his face and body when a “distraction device” (aka flash grenade) was tossed into his crib, inches from this face, by the invading SWAT team. Naturally this was a mistake; they never intended that to happen. Procedurally they did nothing wrong – everything was by the book. That fact alone should scare the hell out anyone. Who will be next? Maybe someone that matters to you.

Even if we were granted a wish that all recreational drugs were forever vanquished from this planet and the only price would be the life of one innocent, that price would be far too high. The irony is that those in charge of this wretched war are killing people who would never have used drugs in order to possibly save those who actively seek to use them. But what would you expect from the state? States have always sought to butcher civilians in order to persuade others to change their behavior. Sound familiar? But the ends justify the means, so that makes everything ok.

The Debt of Memorial Day

War is ugly. War is dirty. War is perhaps the single most horrifying event one could participate in. And yet despite all of that, there are those who have been compelled, for a variety of reasons (duty, honor, peer pressure, guilt, pragmatism, or in the case of the draft, direct threat) to suppress all natural human instinct and jump headfirst into that icy blackness of omnipresent death that is war. Those that survived we honor as veterans, those less fortunate we honor on Memorial Day. And how should we most appropriately honor the fallen? With parades? With solemn speeches? That may indeed seem the most respectful, but for the vast majority of Americans that is followed more in the breach than in the observance. In fact, most Americans honor those fallen in war in the most appropriate manner possible: living and loving. Memorial Day is spent with family, loved ones and friends. It is a brief respite to take the time we often don’t have to do the things that should matter most. This is how we honor them, by living our lives to the fullest, by doing that which if they were here they would also be doing. I can’t imagine they would want anything less.

However, their sacrifice has put us in their debt. This debt is an obligation not to them, but rather to those presently in the armed services. We have an obligation to recognize the pattern of behavior of the political class who is forever embroiling us in futile and senseless wars that serve no defensive interests of the United States (World War I, Korea, Vietnam, Gulf War I and II and countless skirmishes (Grenada, really?) Once their saber rattling is recognized, it must be silenced, as it was last fall when those in power were hell bent on sending US troops to Syria, and with one united voice the people told them NO! No more war! No more shall our loved ones be used as mere pawns as the US attempts to widen its scope of global hegemony. No more shall children grow up without a father or mother, sacrificed as they were upon the altar, not of defense, but that of blind patriotic fervor. No more shall innocent men, women and children be slaughtered by US weaponry in an attempt to take out a token “bad guy” in a sea of innocence.

Most who have chosen to serve this country militarily do so because they have an honest desire to DEFEND this country from external attack. But consider this: a truly unprovoked attack has never occurred in US history (save for the War of Independence). If this country prosecuted purely defensive wars, the US military would be more like the Maytag repairman than Rambo. And while the aphorism “the best defense is a good offense” may be apt in sports, it is a hideous affront to morality when employed militarily. But it is this prevention mindset that has caused far more warfare than it could have ever foiled. US meddling in the affairs of others has created numerous enemies where none existed before. That is the paradox of preemptive war; you cause the very thing you were trying to avoid.

So this Memorial Day let us all pledge that we will honor the dead by taking up the mantle of responsibility they have left for us. We shall charge forth boldly against those who would seek to act antagonistically toward other countries in the hope of provoking a response that will justify a call to arms. We the people can prevent war, by obstructing those who would foment war from gaining power. And if we can do that, then perhaps one day there shall be no need for a Memorial Day.

Not Neutrality

“Net neutrality” certainly sounds appealing, doesn’t it? Who could possibly be against “neutrality” given its ability to evoke an emotional tie to equality, fairness, impartiality and egalitarianism? Only someone who is sufficiently ethically consistent that they will aver the use of aggression in all situations, rather than merely when popular opinion provides a safe harbor for that stance. Neutrality is not neutral when imposed at the barrel of a gun. Proponents of net neutrality seek not neutrality, but rather protectionism. For example, applying the principle of net neutrality one could legitimately argue that the state should restrict the ability of some companies to spend more money on marketing or R&D than their competitors. If they were allowed the freedom to spend as desired this might promote a competitive disadvantage leading to a market no longer consisting of “neutral” players. Competition bad, neutrality good.

Net neutrality has been in the news this past week due to a not-so-secret-secret vote by the FCC concerning some proposed Internet traffic rules. Proponents of net neutrality want the FCC to reclassify the Internet as a Title II medium (telecommunication service) from its current Title I designation (information service). This would transform the Internet (in the US) for all practical purposes into a public utility. Now consider the reputation that public utilities have for innovation, choice, and service and the whole notion of net neutrality should make you shudder. Free or low cost phone service over the Internet? Well you can say goodbye to that if the FCC is ever allowed to micromanage the net. Be grateful Congress did not allow the FCC to regulate cable; had they done so we’d still be stuck with three channels and rabbit ears.

Net neutrality, like all appeals for regulation, is about fear i.e. fear of hypotheticals. It is a solution in search of a problem. Indeed anti-trust legislation is based upon a similar principal. It seeks to destroy that which has never existed (a market monopoly) before it can do that which it has never done (raise prices). If one proposes dragon slaying as a solution, chances are they will be motivated to uncover dragons where none exist. Net neutrality is likewise the latest in a long line of state sponsored dragon quests. Net neutrality proponents have an irrational fear that dragons (big companies) will take over the forest (dominate the Internet) and thereby incinerate the little guy. The problem with this of course is that these dragons don’t exist. The Internet has been very much non-neutral since day one and none of their fears have come to pass. Under this benign regulatory neglect we have witnessed not oligopolization but rather innovation, growth, competition and more, not less, access for the “little guy” (Twitter, YouTube, Facebook, etc). Their fears of the Internet turning into a virtual walled garden are not supported by 20 years of unregulated growth.

Companies like Netflix, Hulu or Apple pay big money to ensure the pipes carrying their content remain full. Why? Because we, the paying customers, demand it (anything to avoid the dreaded “buffering, buffering” message)! The network providers in turn use those big bucks to build out infrastructure to ensure content delivery occurs as promised. But if net neutrality proponents have their way, such premium payments would be disallowed, because everyone’s content must be treated “equally”. How again exactly does that help us, the customer?

If the public demands faster internet and prioritized content then the only means to achieve this is through the same process that has brought the internet to the state it is in today: an unregulated free market where individuals, not internet czars at the FCC, choose what services they want by voting with their dollars.

The Pedagogical-Socialists Fear Competition

It can be particularly challenging to carve out a pseudo-market based approach to K12 education when the framework must rest squarely upon an overtly socialist system. In Georgia we are bearing witness to such an attempt with the passage of the “Georgia Private School Tax Credit” (HB 1133) in 2008. This bill set up a system whereby private individuals and corporations can make limited charitable donations to a “Student Scholarship Organization” (a type of charitable entity authorized through the bill). These organizations in turn grant scholarships to K12 students (typically needs based) so that they can attend a private school of their choice. Private entities donating money to help needy children get a quality education, what could be wrong with that? Well a whole lot according to groups like the Southern Education Foundation. This group and others feel that this program is diverting funds from public schools to private schools. The SEF is currently assisting in a lawsuit aimed at having the entire law declared unconstitutional.

Their assertion is true, untrue, and entirely irrelevant. To explain requires a bit of background. I will attempt to not bore you to tears so I will move quickly and gloss over some details. Essentially a taxpayer with a $1000 tax bill to Georgia can choose to send that $1,000 to an SSO of their choice instead of to the state of Georgia as long as they have permission from the state. Each year the state allows people to do this until an aggregate cap ($58 million for 2014) is reached. The benefit to the taxpayer is that while it does not change their Georgia tax liability it may lower their Federal liability in some situations. Although the state does indeed receive $58 million less than they otherwise would have absent this program, there is nothing in the law that says the education budget must be debited an equal amount. The legislature is the ultimate arbiter of funding. So decreased tax revenue could put pressure on them to decrease funding, in which case their charge is true. Or, to avoid such political backlash, they may not cut funding at all, in which case the charge is untrue. The only thing one can say for certain is that decreased tax revenue means that programs on the margin will receive less funding or that taxes will be raised to make up the shortfall.

Of course to suggest that reduced funding is a bad thing is completely wrongheaded. This is precisely what it SHOULD be doing. In essence this program is a backdoor to incremental privatization of the socialistic state run school system. To the extent that this program incentivizes parents to pull their children from public schools and move them into private schools it then follows that those public schools should require proportionally less funding. If the public school has 100 students and costs $100 to run, then if 50 students leave it follows that that public school does not still need $100 to run. Even if we assumed all $58 million got carved from the 2014 education budget that would be only a 0.5% reduction.

The goal is that the SSO’s act as a private version of a state education budgeting agency. In other words, given that many different SSO’s have sprung into existence all competing with each other for donations, it follows that those that are the most efficient at maximizing the student to dollar ratio (more students educated for fewer dollars) will excel. Why? Do you prefer to give to an efficient or inefficient charity? So the public school proponents should welcome this change. It will mean that if 50 students leave they will take with them only $25 leaving $75 for the remaining 50 public school students. How can they get by with only $25? Because they’ll get $50 worth of value due to competition driven market efficiency.

Of course in a truly market based system it would not be necessary to have all sorts of complicated tax credits and state chartered charities. Until the pedagogical-socialists let go of their superstitious fear of freedom that compels them to believe the only possible way to educate children is through gun-enforced collectivist redistribution, we will be stuck with the timid attempts of the state to emulate market based solutions to problems created by the state.

Farming Fascism

The inherently self-contradictory justification for the state is that it reserves to itself the right to engage in those actions that its very existence is predicated on proscribing. The state is a paradoxical philosopher’s stone; believed by the masses to create only good, it in fact transmutes all that it touches into its polar opposite. Evil, when implemented by the state, is declared as good (war, taxation, kidnapping, torture) while virtue, when implemented by the state, becomes harmful (charity, regulation, education). These virtuous activities become but mere shadows of what they could be absent monopolistic state intervention.

In Georgia we have our own special brand of state distorted virtue: the Vidalia® onion cartel. The state government has decided that these beautiful, delicious, sweet onions grown in and around Vidalia, Georgia are too valuable to the economic health of the People’s Republic of Georgia to allow the people who actually grow them to control how they are marketed and sold. And so came forth the Vidalia Onion Act of 1986. Yes, our legislators pass laws about onions. It was only a few weeks ago that the state of Georgia fined a farmer who had the impudence to ship his crop of Vidalia® onions to market prior to the April 21 date set forth by the state agriculture commissioner.  Unseasonably warm weather has moved up and extended the growing season (thank you global warming!) Apparently Mother Nature forgot to read O.C.G.A 40-7-8.17 and thus produced ripe onion in open defiance of the law. Sadly, the state of Georgia is not alone in these sort of legal strictures on farming. Florida has its oranges, Idaho its potatoes and California its wines, raisins and avocados. Wait, avocados? Yes, California stipulates all avocados grown in the state must contain at least 8% fat. Or else.

Now there is certainly nothing wrong with farmers coming together and mutually agreeing on a set of standards for their produce if they feel that setting such quality standards will bring about mutual benefits. However, just because some farmers wish to do so does not mean that all farmers should be forced to do so. But when the state steps in, that is exactly what happens. Only the state has the monopoly power of the guns to force compliance. Once again, if your business model is predicated on the use of guns in order to achieve success then there is something wrong with your business model. Regrettably, the appeal of ready access to the legal deployment of weapons to further ones ends is the siren song of protectionism. That sweet sound calls to us until we collide against the rock-hewn walls of the cage we willingly built. Too much metaphor? Ok, people champion competition when they are buying but oppose competition when selling. So while that tidbit of self-defeating equilibrium sinks in, consider this: the most common method of limiting competition is turning to the state and requesting aid beneath its great wing of protectionist measures. Once state protections are in place then new entrants to the market are excluded. This reduces supply and so raises prices; great for the sellers, not so great for the buyers. The appeal of bully-based price protection for sellers is why nearly every law on the books has some sort of protectionist origin (licensing, certification, regulation, registration, etc). The fear of failure and the desire to put your competitors out of business is too much for most to resist. It is not until you yourself become the competitor do you see the error of your ways (or if you’re a hypocrite you refuse to see the error and simply demand even more special exceptions, i.e. protection from your own protectionism).

If we hand over all of our rights to someone with a gun (the state) we should not be surprised when they refuse to hand them back – even when we ask nicely. When the putatively legal owners are no longer calling the shots and must bend to the will of the de facto owner (the state) or suffer the consequences then there is only one word that by definition describes this situation: fascism.

Unicorns Attack Free TV

Ever heard of a company called Aereo? Yeah, didn’t think so. Up until last week I had never heard of it either, but this little company may be forging the way toward increased competition, lower prices, and more consumer choice in the oligopolistic televised media industry. That is assuming of course the nine kings and queens of the royal court (aka the US Supreme Court) consider the interests of 300 million consumers when they reflect upon the merits of a case as old as the republic itself: who shall receive the court’s tip of the hat, the protectionist rent-seekers or the upstart innovator?

In this 21st century replay of Gibbons v. Ogden, Aereo plays the role of the audacious entrepreneur challenging the state chartered monopolies (played here by NBC, ABC, & CBS). In Gibbons v. Ogden it was about who had the right to navigate the river-waves, now it concerns tapping the air-waves and surfing the web. Aereo is providing a service to consumers who prefer to watch their local TV stations over the more convenient medium of web-attached devices (thereby foregoing the hassle of dealing with antennas and converter boxes). Consumers are in essence renting antenna time from Aereo and having this content directed to their device. You’d think the big three media companies would be pleased – Aereo is expanding their viewership! But alas that is not the case. Because Aereo is redirecting these free over-the-air transmissions they have not been paying a tribute to the big three for the content. This stands in stark contrast to the hefty sums forked over each year by cable and satellite providers (and which are naturally passed on to the consumer). If Aereo is permitted to exist it might set a precedent that would allow an unwinding of the decades old law that made an arbitrary distinction between “public” vs. “private” broadcast (which is why cable companies must pay rebroadcast fees but we are free to record and time-shift content while enduring scary FBI warnings on our DVDs.).

The justification used against Aereo is that they are violating the copyright of the big three – rebroadcast without consent. This would be fine if copyright were an actual real form of property – the only problem is, it is not. Copyright, patent, & trademark are all artificial creatures of the state; they are the unicorns of rights. They are a state grant of monopoly privilege. Utilitarian opinions built upon notions of “encouraging” certain types of behavior by such monopolistic grants are as wrong-headed as any “ends justify the means” arguments. Whereas IP cannot exist absent state enforcement, true property rights, not being an invention of the state, can. The recognition of rights in property is the only alternative to violence when settling a conflict over the control of scarce and rivalrous material. Two parties resolving such a dispute do not necessarily rely on a state. Enforcement of IP, however, is impossible without state violence.

Ideas, assemblages of words or sounds, are neither scarce nor rivalrous; therefore, it is nonsensical to claim property rights in them (akin to claiming such a right in one’s name). A state enforced fiat decree to the contrary is no more legitimate than the decree that a man may be property. Indeed, man as property fails on the rivalrous test; rivalrous goods can be conveyed, a man’s soul cannot. If someone copies your creative work and that upsets you, beat them at their own game by copying the manner in which they are employing it. That’s how competition in a free market works, no state necessary. If your business model necessitates men with guns then there is something wrong with your business model.

Now, given that even the supposed champion-of-the-little-guy-mr-progressive-democrat-Obama has come down on the side of the big media conglomerates, my feeling is that Aereo will likely lose this case. There is just too much money at stake, and in the crony-capitalist cesspool that is Washington DC, “we the people” have allowed the growth of a dystopian system that enables moneyed interests (warfare, welfare, and cronyisms) to rule us all.