Usury and the Conundrums of a Modern-Day Sabbatical Year

I've been interested for many years now by the Biblical system of finance. As I briefly noted in my published Kindle book No More Foreclosures, when you look at the combination of the ban on lending money at interest ("usury") and the forgiveness of debt every seven years during the Sabbatical year, it seems clear that the Torah opposed for-profit lending altogether (with the possible exception of lending to businesses). And given the much-noted role of too much lending in the 2008 economic crisis, it seems that there might be something there that could be relevant today.

The trouble is that all throughout history, people have been desperate to borrow money any way they can, at any terms available. Indeed, that is why the Christian ban on usury eventually fell apart; people had found effective ways of getting around it in practice. Given that, it seems like the most effective way of lessening the harms of debt needs to be through giving some other alternative. More consumer access to equity finance would be a start, as I note in No More Foreclosures, but it seems that there ought to be some way to periodically reset debts, as in the Sabbatical system. (We already have the potential for bankruptcy, but that comes with high consequences to the borrower, imposes an unexpected cost to the lender, and lacks the virtue of a coordinated, society-wide deleveraging that the Sabbatical year is meant to provide.)

To be sure, borrowers would surely love the idea of debt that goes away if you can't pay it, in the abstract. But how on earth would that be attractive to a lender? Lenders would only offer such a product if they are protected themselves; the only ways to do that would be to charge higher interest in the first place, defeating the purpose, or have some kind of subsidy built in from somewhere to cover losses.

I don't know yet what the answer is. But this is what most of my thinking for fun is about, these days, when I'm not prepping for my teaching.

Quote of the Day

"To efficiently run a school, amplify fear (and destroy passion)."
     —Seth Godin, Stop Stealing Dreams.

Thoughts on Third Parties and Elections as Theater

Thanks to our voting system of single-member district, first-past-the-post elections, structural forces pretty much guarantee that American elections will be between two major political parties, no more. (To political wonks, this is called "Duverger's Law.") There are ways to change the system to make third parties more viable—my favorite is called Instant-Runoff Voting—but for the most part, we can neglect those possibilities, since the two major parties are hardly interested in damaging their stranglehold on power.

Still, third parties exist. The most influential are the Libertarian and the Green Parties; and every so often people in the Republican Party rumble about breaking off and forming a "real" conservative party, perhaps organized around the Tea Party. Before anyone takes such a step, it is worth reviewing what exactly a third party is intended to do.

Third parties are generally incapable of winning elections. The exceptions, apparently, are either when the candidates of both major parties spectacularly self-destruct at the same time (as when Jesse Ventura won the governorship of Minnesota), or when the race is for a local position in a low-turnout, low-interest race that can be swung by a core of dedicated partisans. If you hope to win on a third-party line, my advice would be to find a boring political office in a sleepy jurisdiction where the incumbent is annoying his constituents and you have an unusual number of supporters, build a disciplined organization of volunteers, knock on a ton of doors, make friends with all the local power centers you can, and generally fight your way to victory by being better at retail politics than the other guys.

This seems a tall order, given that third-party activists are generally attracted to ideological conflicts and not retail politics. But the key, it seems, is to avoid drawing too much attention to yourself, so as not to spook the national parties into bringing their resources to bear. Done right, this strategy can help a third party develop a bench of seasoned public servants who are well-placed to advance to the higher ranks in politics.

What it won't do, however, is to drastically change people's minds on the major ideological conflicts of the day, the ones that motivate people to join third parties in the first place. Which is why most third-party candidates run for offices they cannot possibly hope to win: the presidency, governorships, congressional seats. That a handful of libertarians and socialists have managed to win elections to Congress over several decades proves the point: all the other candidates were not running to win.

So why run? The general theory is that by using the election as a platform to argue your point of view, you can influence people to shift their views over time. Third parties can serve as incubators for ideas that then diffuse into one or both of the major parties, carried there by sympathizers who then infiltrate the establishment. Libertarianism has had some success in influencing the Republicans in this manner, as the Greens and Progressives have to the Democrats. Still, it seems to me that most of the work there has been done by think tanks and public intellectuals, and the radicalized volunteers for third-party campaigns—not by third-party candidates themselves.

Most of those candidates have been quite counterproductive, in fact, in getting their real message out. Think of Alan Keyes's quixotic 2004 campaign against Barack Obama for the Illinois Senate seat. How many people did he convince that libertarianism is a reasonable ideology, compared to the people convinced that he was a machine-gun-crazed lunatic? (Granted, Keyes was nominally Republican, but let's be honest here.)

So if you are an activist for a third party and you want to run a campaign for the purpose, not necessarily of winning, but of changing the public mindset to favor your cause, how should you go about it?

It seems to me that the best tack is to eschew the traditional playbook for running an election. You are not going to win the vote; to try is to play into your opponents' strengths. What you want is not to assemble 50% of relatively ill-informed voters living in an arbitrary patch of land; you want to get into the head of the literate, engaged, politically aware people all across the country. The model to follow then is not retail politics, and not the sad pathetic strategy where you boldly state your positions in the most uncompromising language possible, and then sit back and wait for the public to spontaneously have a road-to-Damascus moment. You need a way to get people's attention, to break them out of the traditional patterns of political thinking, all across the country. You are trying to blow their minds.

In short, third-party activists ought to be developing a model of the political campaign as performance art.

Ditch the comprehensive platform. Ditch the exhaustive philosophical pamphlets; plenty of time for people to read them once you have already piqued their interest. Instead, create visceral, stunning moments of experiential clarity showing where your model is superior to that of the major parties. Create viral videos; file high-profile lawsuits against the corrupt parasites who exemplify the worst ills of the system you mean to fight. Gather volunteers to clean up a slum or build a house or plant a farm, organized around the principles you espouse. Distill your philosophy down to its very essence, an essence that explodes all the assumptions about politics, and then repeat that essence constantly—but not as an explicit lecture. Instead, make it the theme of every image, every piece of music, every organized gathering you do.

One example where people almost, but not quite, did this right was the Occupy Movement. The Occupy activists managed to create a massive event and transfix the attention of a national audience for a short time. If not for the general incoherence of their message, their ideals, their program, and generally their plan for getting anything done at all (including maintaining order in their own encampments!), the Occupy crowd could have pulled off a massive shift in our politics. As it is, even with the general failures of the movement, they still managed to galvanize particular covert tendencies within the Democratic party into coming out into the open. (Not that this was a good thing, but that's not my point.)

So yes. Politics as performance art. That seems to be the way to change things in this country.

Thinking About Alliances

In my dissertation work, I'm attempting to develop ethical guidelines for when non-state groups have the right to go to war (that is, when they have Right Authority). My claim is that non-state groups can often represent their communities as well or better than state governments can, and the current argument that only states are allowed to go to war is absurd.

At the moment, my current obstacle has to do with one of the traditional requirements for Right Authority: the Authority's ability to control and discipline its subordinates. Basically, if fighters on your side are running rampant, attacking civilians, disregarding your orders, and ignoring attempts to broker ceasefires with the other side, then there is a serious problem with your claim of being a Right Authority. That's the way that the issue is presented, anyway. Underlying this treatment is the assumption that armed groups are part of a hierarchical chain of command.

The problem is that when you look at conflicts like the Mindanao struggle in the Philippines, many armed men are part of mostly-autonomous bands that might affiliate with MILF one day, with Abu Sayyaf the next, and pop off for a spot of independent banditry on Sundays. While they are certainly influenced by the demands of the organized group leaders, to call them part of a stable chain of command is ludicrous. Yet, given that, should the existence of such groups harm the standing of the organized units like MILF? That is, should you view such groups as examples of a failure of MILF discipline? Or should they be viewed in another way altogether, one that better fits the facts of the case?

Right now, I'm leaning toward the latter view. I think the best way to look at such groups is as members of an alliance with the major armed organizations. And that brings us to a key point: while political theorists have wrangled back and forth over the ethics of warfare, there has been practically zero discussion that I can find of the ethics of wartime alliances. Can you ally with bad actors? What obligations to control them might you have? If you do ally with bad actors and then fail to control them from committing atrocities or the like, does that ethical breach stand on its own or does it harm your own standing as a Right Authority?

I don't know the answer yet (though I suspect I'll be doing a lot more reading about civil wars, such as this book that comes highly recommended by some big names in the field). But I find it encouraging as a budding young scholar to discover such a rich vein of apparently untapped questions—especially since the topic of ethical alliances could have applications ranging from international relations, to civil wars, to even the institutional workings of democracy itself.

When Hubris and Poverty Mix

I have just read a recent journal article by the brilliant scholar Peter Turchin, in which he elaborates on his theory of the dynamics of social instability over time and tests it on the United States from 1780 to 2010. Put briefly, his theory holds that one can expect a society to suffer greater social violence (such as riots or lynchings, as opposed to routine crime) in a relatively predictable cycle. The larger "secular" cycle occurs every 150 years; a smaller cycle of violence occurs roughly every 50 years, superimposed on the secular cycle. Thus in the United States, we had peaks of societal violence near the years 1870, 1920, and 1970, with the Civil War being the peak of the secular cycle. Turchin forecasts that the next secular peak should hit sometime around the year 2020. Turchin's previous work has detected the same sorts of cycles in societies from ancient China to revolutionary France.

Of course, detecting a pattern does not tell you what has caused it. Turchin's theory for when violence intensifies depends on two major factors. Both of these factors might derive from excessive population growth; in the early version of Turchin's work, he was focusing on agrarian societies in which population growth leads directly to food shortages. But now that he is considering Industrial societies, Turchin is focusing more on the immediate causes laid out below.

First, whether from excessive population growth or technological disruption or whatever, there emerges a labor glut. The average wage drops in response, leading to diminished standards of living. Thus you see larger segments of the populace who are in a precarious situation, with the potential for violent outbreaks such as labor struggles, or ethnic competition with minorities, or political upheaval.

Second, there emerges "an oversupply of elites." This can happen for a few reasons, and Turchin focuses on the economic one. The low cost of labor means that it is easier for those on the top to become far wealthier than they might have done in a more normal setting, leading to the accumulation of vast fortunes and a polarization of society. A consequence of this is that there is much more competition for the leadership positions in society, such as control of government offices. Politics becomes more nasty and partisan, leading in extreme cases to violent rivalries between elite factions struggling to secure their hold on power. Such violence is made easier by the larger number of poor, desperate people in society who can serve as a demagogue's muscle.

In Turchin's research, he finds that oversupply of elites has the strongest association with societal violence. This is easy to understand when one looks at places like the Philippines, in which politicians routinely employ armed militias to attack competitors (a horrifying example was the Maguindanao Massacre of 2009), or the Congo, which has been wracked with coup after coup. But even in the United States, a surplus of would-be leaders will tend to produce extreme ideologies, such as militant unionism in the 1920s, or the present upsurge in eco-terrorism.

Yet a disparity in wealth is not the only way to create an oversupply of elites. Joseph Schumpeter, in his book Capitalism, Socialism, and Democracy, proposed that the growth of an intellectual class was profoundly dangerous to society. Intellectuals, he argued, are alienated from the society around them and believe themselves to be the natural leaders of a new, better, society that they will create. Philosopher Robert Nozick expands on this theme, arguing that intellectuals are those who are most successful in the artificial environment of the classroom; when (after two decades of endless success in school) they are exposed to the unforgiving "real world," many of them cannot handle no longer being the top dog. Seething with resentment and humiliation, they turn to radical ideologies and reject the society around them. After all, they should be the leaders! Aren't they brilliant, aren't they better than those who got C's on their tests?

It seems to me that many more people today aspire to being an "elite" than ever before. And the expansion of university education is to blame. For people in the "softer" side of the academic world, college does a poor job of preparing one for success in the real economy. At the same time, college students are constantly being told that they are America's elite—never mind that nowadays, around 68% of high school students go on to college! Combine that with the prevalence of revolutionary ideologies on campus, and we have a dangerous brew. (No coincidence that the Peruvian Maoist group Shining Path was begun by a university professor, and its initial members were hundreds of his students.)

Not to say that economic factors aren't at work either. American politics is becoming a contest of billionaire against billionaire, quite tedious to watch, quite alarming to live through. It remains to be seen whether the growth of mass connectivity will break this dynamic, or feed into it.

(Have I mentioned lately that my new book is available on Amazon Kindle? It's called The Best Congress Money Can Buy: Stories of Political Possibility. You can read the first story for free here, and then buy it if you like. Enjoy!)

And Now, For Some Shameless Self-Promotion

There's been a slight change to the layout of this blog. As you look on the right sidebar, you can now see a new section titled "My Books," with a pretty picture just underneath.

As one might surmise, this is because I have published a book—The Best Congress Money Can Buy, a collection of short stories about political possibility. It is presently available on Amazon Kindle and will be available in hardcopy as well within a week or two. The first story is available for free on the Amazon page (which you can access by clicking on the image in the sidebar) using the "Look Inside" feature. Check it out!

If you ever wanted to read about replacing taxation with crowdfunded governments, congressmen who sell their votes to the highest bidder, or what happens when prisons are replaced with workhouses, give my new book a try. Plus, if you are a member of Amazon Prime, you can borrow the book for free on Kindle, and I get paid anyway—which is a pretty sweet deal.

God-willing, this will be the first of many publications. If you like it, please let people know by leaving a reader review on Amazon. Thank you all! Without my readers, I'm just another political nut talking to himself...

Investing in True Value

(I should preface this post by saying that nothing in here constitutes a recommendation to buy or sell securities, etc.)

Working in finance as I have for years now, I am growing more and more convinced that our societal attitudes toward saving and investing have gone haywire. We now assume automatically that when one saves, one is chiefly saving for retirement or for your children's college; that such saving is primarily done through the financial markets; that there is nothing strange about (for example) keeping part of your portfolio in bonds that pay 2% while at the same time carrying a home mortgage charging 4% or more.

Our assumptions about saving are driven by a combination of government policy, such as the creation of tax-advantaged retirement savings vehicles like the 401k, and a financial industry that is eager to market itself as the midwife of your future prosperity. Yet it seems odd indeed to save for a time that might be thirty or forty years off, when nowadays people can be laid off from their job at short notice—and if you want access to your 401k money earlier than the government prefers, you must go through lots of red tape to "prove" that you are in hardship. Otherwise, you are penalized.

It also seems odd that our first reflex is to use savings to buy securities. The long-term return for investing in the stock market is on the order of 7% or 8%, depending on your time period, and that assumes that you can phlegmatically wait out the bad periods without panicking and taking excessive losses. During the bad years, the destruction of your savings also causes immeasurable psychic harm to yourself and those around you. Stocks are still a decent vehicle for those with the discipline to invest over a 40-year window and then forget about it; their whole appeal is that your money can work for you without your personal involvement, freeing up your attention for other things.

Admittedly, some can make a study of market trading and, if they are of the proper cast of mind, secure annual returns that are much higher than the average—assuming that you are not one of the many who jump into such trading with dollar signs in their eyes, who then lose everything in a blaze of misplaced optimism. But here is another odd thing. To achieve above-average success, you must essentially turn stock market trading into a second job, or even a first job. Yet the whole attraction of stocks was that they shouldn't take up more of your time, no? And if you want another job that can turn your savings into profits, there are many industries with much higher rates of return on capital than stock market trading. Moreover, trading profits must necessarily come from someone else's losses; while in other industries, or other uses of capital, there is a net creation of wealth.

I've been thinking about this more because in the last six months or so, I tried my hand at options trading with disastrous results. At about the same time, I commissioned a pair of artists to illustrate a children's story I have written, which is nearly complete. The process of overseeing the book's creation has taken some work, but not much; it is also extremely fulfilling to see a work of art being created that will have my name on it. It was cheaper to commission the art than to trade options; and once the book is published, it would need only 20 books sold per year to achieve a higher annual rate of return than the stock market average. (It's a fun story, too, and should provide joy to many readers. To me, that's a definite plus.)

(Oh, and if you want to hear when the book is published, feel free to subscribe either here or on my other blog. The title is The Princess, the Dragon, and the Baker: A Hanukka Fairy Tale.)

There are many talented artists out there desperate for commissions, and lots of people with frustrated visions for artistic projects that they lack the skill to realize. Yet how many of these people are maxing out their retirement savings and handing their money over to Wall Street, instead of taking a fraction of that money and trying to bring something new into the world? Admittedly, many such projects wouldn't return a profit; but it would be a lot more fun than investing in WorldCom or Enron.

Other opportunities exist. Want a quick way to make 50% on your money? Buy in bulk at the grocery store. What about residential solar panels? Do you think you could beat a 2% return per year on them? What about investing in your own professional skills? For some people, improving their skills at working with others, or selling to customers, or marketing, or project management could easily increase their income far more than the same amount of money would earn in the stock market.

What about maintaining your health with a gym membership? Health care costs are a huge fraction of costs in retirement, and anything that can improve your health will pay off big. Plus, you'll enjoy your life more now, and you might even be more effective in your job.

I know people who are channeling excess savings into upkeep on their houses, rather than investing in the stock market. Stock market returns are unpredictable, they reason, and inflation is surely coming given our present central banking policies. But people will always need housing.

But for some reason, speculation is the order of the day for most people. Even those skeptical of the stock or bond markets often turn to some other form of sterile speculation, such as buying gold, a metal which is allowed to languish in inert bars rather than being turned into jewelry or circuit boards or something else of added value. In part, this is because we have been trained as a society to avoid the hard work of overseeing other people and creating new things. Far easier to speculate; you might lose your money but at least you don't have to talk to anyone in the process.

Take stock of your own opportunities. Is there any way that you can use your capital to add wealth or beauty or skill to the world, instead of merely chasing speculative profits? And would such uses actually be more lucrative than the Wall Street slot machine?

Concerning Cooperatives

Thinking about how to make an economic system that is more humane, and less riven by class struggles, many thinkers have advocated for workers' cooperatives (the Distributists being one example). Cooperatives differ from the traditional capitalist firm in that workers share ownership and management of the company, as opposed to being salaried employees with no participation in the profits besides what management feels like giving them. They differ from a socialist commune in that there is still private property, and individuals can benefit directly from the success of the firm, which tends to mitigate the typical Socialist tendency of "They pretend to pay us, and we pretend to work" and lead to more creativity and enterprise.

With these advantages, why hasn't the cooperative become more popular in the United States? In part, because cooperatives come with some drawbacks. First, if workers share ownership in the company, what happens when you hire new people? Does that mean that you've just diluted the ownership of the existing employees? If so, then there will be a tendency of the owner-employees to delay hiring more people, even if it means sacrificing business opportunities. Or do different classes of employees have different shares of ownership? If so, then the cooperative differs from a typical capitalist firm only by degrees.

How much of the ownership of the firm accrues to the investors, as opposed to the employees? After all, without the initial investment, there would likely be no business in the first place. And asking employees themselves to buy in, as some cooperatives do, places a high bar in front of poor job-seekers.

Additionally, there will always be a place in a large-sized firm for experts of some kind, who will be paid more for their expertise. Should such experts, be they management or whoever, also get a disproportionate share of the company?

All of these questions have answers, and the answers will vary depending on the particular needs of each cooperative. But even if you could come up with an ideal structure for your own situation, it is far from clear that existing law could support the ownership structure you want. To my knowledge, in the United States the most common means for employee ownership of their company is the ESOP, or Employer Stock Option Plan, and these are typically structured so that employees have partial ownership without true control. While American law has well-understood prototypes for traditional capitalist firms, like the C-Corporation or the S-Corp, there are few prototypes for worker-owned cooperatives.

If such prototypes existed, then new insights could be gained as people experimented with them and figured out what works and what does not in different contexts. And cooperatives could become more accepted in modern industrial economies—which is not to say that they would displace the typical capitalist firm entirely, or even mostly. Each firm structure solves different problems. The best structure depends on your own situation, and the imperatives of your industry. Still, more options are good.

One handicap of your typical utopian social reformers is that they tend to focus on parapolitics, action outside the system, rather than trying to work within the system. True, such parapolitics often has an effect, but you only get mass adoption of your ideas in the face of total collapse of the system you are opposing. In this case, those who seek to have the cooperative form catch on in society ought to be lobbying for its inclusion in the tax code, the same way that a C-Corp or S-Corp is. With an off-the-shelf model to work with, with well-understood procedures for sharing ownership and profits, more entrepreneurs may elect the cooperative model without any political or social goal at all—which is how you win.

Those who have read my previous pieces, advocating for a populist politics based on left-anarchism (to which I am presently giving the working title of "Arcadianism"), will not be surprised to read that such reforms of the tax code ought to be a major part of such a movement's platform. Cooperatives match very well with the social mindset of the Left, and they also cut directly against the Progressive agenda of corporate titans serving as intermediaries of the state, dictating terms to their subservient workers on behalf of grand social policies. Aside from which, cooperatives or other forms of alternative organization such as sociocracy address the problem where capitalist firms become "indigestible lumps of socialism" (a quote variously attributed to David Friedman or Kevin Carson), because of internal power hierarchies that mitigate the advantages of free trade.

Those on the libertarian right ought to be pushing for such reforms as well—but I doubt they will, which is why we need Arcadianism or something like it to play the same role in the Democratic Party that the Tea Party groups have done in the Republican Party.

The Politics of Crowds

If the characteristic method of collective action for Libertarians is the free market, then I submit that the characteristic method of collective action for left-anarchists is the crowd.

By "crowd," I do not mean "mob"; I mean more in the sense of "crowdfunding," "crowdsourcing," and the like. In a mob, individuals lose their individuality, submerging themselves in an unstoppable group tidal wave that breaks the bounds of civilized behavior without any sense of responsibility. In a crowd, on the other hand—at least in the sense that I mean—actors retain their individuality, and indeed can act to further it in ways that otherwise they could not have. The crowd allows you to participate in collective endeavors that would be beyond individuals. (Burning Man, for example, is not known for its oppressive uniformity!)

Let me explain. In a free market, the actions of individuals are coordinated with each other through the pricing mechanism, so that as each individual seeks his own interest, a larger social balance is achieved in an undirected, emergent process. (For details, read practically anything by Hayek.) In the pure form, free markets do not have collective action per se, in the sense of groups of people united around a particular goal—unless you consider "making money" to be that goal, and even then individuals compete with each other to achieve that goal. While there is some cooperation in the free market, usually around shared resources and institutions, the primary focus is on the individual's interests, which "automatically" generates social optima in a meta-interaction with the surrounding economy.

In a crowd, on the other hand, people do engage in united behavior around a shared goal—but of a special kind. Take crowdfunding, where someone publicizes a project that he wants to carry out, and others choose to contribute or not to contribute, as their own desires and identities impel. The point is not to submerge your own identity in a collective, as the Progressive corporatists tend to do. Rather, by contributing to a project you like, you are expressing your own individuality by what you choose to affiliate with. Importantly, you can choose to contribute to any number of projects if you like them, even if they might seem to be expressing different values, reflecting the multifarious nature of our identities.

The crowd is not coerced. It is free behavior, but it is also group behavior—where free individuals come together to do something as a community. And it is that aspect of community that distinguishes crowd behavior from markets.

Now, to say that crowd behavior is characteristic of the anarchist left is not to say that Libertarians, or anyone else for that matter, do not use crowdfunding from time to time. And likewise, left-anarchists do not eschew the market entirely. But they are skeptical of it at best, and it seems that they take to crowd activity much more readily than do anarcho-libertarians or the Right in general. Take Open Source Software development, an example of crowd activity in that people can contribute code to projects they like in an uncompelled manner. (Indeed, most successful crowds are structured like the "Bazaar" model  of famed OSSer Eric S. Raymond.) Engineers in general tend to lean to the Right, but it appears from casual observation that the OSS subculture has a stronger left-anarchist contingent than its anarcho-libertarian one.

Or, consider that in the last week, TechCrunch went live with its new crowdsourced sight for citizen involvement in legislation, Project Madison. Despite Madison's origins in the office of the impressive Republican congressman Darrell Issa, of the websites linked in my sidebar only the relatively left-anarchist sites BoingBoing and Slashdot reported on Project Madison going live. The conservative blogs I read did not cover the story, that I noticed. (This seems to be a strategic mistake, as the tool seems a fantastic way for small-government conservatives to get more input into active lawmaking.)

I last wrote on this blog of the need to develop a left-anarchist analogue to the Tea Party, which would contest the Democratic Party and challenge the Progressive corporatists for control, much as the Tea Party is wresting control of the Republican Party from the big-government faction. Such a left-anarchist movement (and what would it be called?) needs a platform for how it would govern differently from the Progressives. I believe that the concept of crowd action is a fruitful place to start.

Suppose, for example, that a portion of tax revenues (say 10%) were allocated not by Congress, but by the choices of individuals. Suppose that Amy Taxpayer can allocate $2000 in tax revenue between any government projects she feels like. In such a system, government departments that don't get their desired funding from Congress would be compelled to appeal directly to the people, and justify their value. If they are convincing, they may get fully funded or even overfunded, for example if Amy and her friends all decide to allocate their taxes to the Department of Education. At the same time, this would be a great way for disconnected citizens to become more engaged and knowledgable in the business of government, as they can feel more control over their own political efficacy.

The funding choices that people might make could be a useful corrective to the dysfunctions of Congress, as well as being a valuable source of information on voter preferences. In short, it would appeal to the left-anarchist values of involvement, freedom of choice, and community action in a way that might actually make government run better.

Nothing stops libertarians from seizing on this idea themselves, of course, and I wish they would. I don't think they will, however, and that is why we need a left-anarchist voter bloc to correspond to them.

Critiquing Progressivism from the Left?

It will be no secret to the readers of this blog that I have strong sympathies for libertarianism and other positions usually called "small-government conservative." At the same time, I'm becoming more and more convinced that the libertarian Right is running up against serious limits to its ability to reach out to new voters. These limits are why the Progressive Left has has such electoral success, managing to build a durable coalition of 45%+ of voters even while people are becoming more and more angry with the corporatist big-business/government nexus. (Indeed, the progressives have gotten away with making populist calls against Wall Street, even while pursuing policies meant to favor Wall Street as the handmaiden of government!)

Let me explain. Modern libertarianism came of age during the struggle against Communism and socialism. As such, it took on certain characteristic attitudes in opposition to those of Communism. The Reds preached the virtues of sacrificing for the collective; therefore, libertarianism developed a focus on "rugged individualism" and the virtues of greed. (This partly reflects the influence of Ayn Rand, who was hostile to all forms of collectivism.)

The problem here is that credos such as "greed is good" run counter to the experience and beliefs of a lot of people. Furthermore, most religious or philosophical traditions explicitly attack greed as a corrosive vice, and selfishness as the expression of hatred toward your fellow. Followers of these traditions believe that altruism and charity is the truly good life, and the libertarian program is harmful to the human spirit. Libertarians will argue that greed and selfishness can actually embody a second-order altruism, but many people are congenitally predisposed to doubt them.

Yet opposing tyrannical government need not require embracing greed, or rejecting all collectives. Some followers of the Catholic Church, for example, advocate a political economy called distributism, which focuses on the role of worker collectives as opposed to the domination of rich capitalists and governments both. More to the point, there are some political traditions on the Left that are hostile to the grand corporatist project of the state that has become the conventional wisdom among the Progressive Left. The tradition of Left-anarchism has many followers today; Jane Jacobs remains hugely influential, and you can find anti-statist attitudes among such movements as the Maker Movement and the like. The important thing is that you needn't be an individualist to be anti-Progressive.

But it is hard to perceive this, when the Progressives have so thoroughly dominated the Left that "progressive" is now used as a synonym for "all that is right and good." In part because of the wholesale libertarian rejection of collectives and embrace of entrepreneurialism as the highest expression of human creativity, the Progressive movement has managed to portray itself as the defender of communities, charity, solidarity, workers' rights, art, and lots of other things that people find appealing and meaningful. This is a tragedy; the good news is, it is also a sham and a deceit.

Progressive government—that is, corporatist government—inexorably destroys communities and families. It attenuates the bonds between people, replacing them with bonds between a single person and the all-powerful State. To truly defend the human spirit, in accordance with the highest ideals of the Left, must mean to crush Progressive/corporatist power structures and replace them with human bonds between people.

The libertarian movement sometimes makes references in this direction, noting Tocqueville's admiration for the (now-attenuated) American impulse toward private, local associations instead of relying on government. But because of the libertarian embrace of individualism, they lack some of the vocabulary necessary to truly build alternatives to government that require organizing people in society, to take on some of the functions that governments claim to provide. At best, libertarians hope that private industry will step in. But that does not work in all cases, and besides, many voters find such visions unacceptable.

It is for these voters that a new approach must be developed. The next stage of the campaign against Progressive Corporatism must come from within the Left: a populist blend of Left-Anarchism and "doing what works" (as the grand Progressive projects have consistently failed, over and over again, and only persist because the Left has been colonized by Progressivism).

To give a simple example: Our present educational system is an industrial process, stamping out compliant factory drones well-suited for a 19th-century economy, or a 20th-century totalitarian society. (See here for details, among other places.) The anarchist Left despises modern schooling, as they and all good people should. A political platform based on Left-Anarchism could attack modern Progressive education in terms that would nevertheless resonate with the half of the voting public whose sympathies lean Left. In this way, a coalition of interest can perhaps form between the small-government Right and the anarchist Left to reform our education, to the benefit of everyone.

To advance the cause of freedom from Progressive Corporatism, we must reach beyond the Right. If we do not rebuild the tradition of Anarchism, and reclaim the Left from the colonization of the Progressives, we will never be able to reach out to half of the country. I think the next great battlefield of this conflict is for the soul of the Left.

When Power Breeds Deceit

It occurred to me, as I was reading about yet another government official trying to downplay the poor economic reports that came out recently, that governments have very strong incentives to lie about nearly everything these days. And that is because government is exerting power over nearly everything, and therefore we expect it to perform well at nearly everything.

Let me explain by way of an example. There once was a time when the government collected statistics about employment. This was necessary, because the government had taken on the role of stewarding economic growth, and therefore it needed to know when people were losing their jobs (and conversely, when “too many” people had jobs, which as everyone knew at the time would increase inflation). So the government wanted its statistics to be accurate, so that it could make good decisions based on them.

Over time, however, the government discovered that when it published bad employment numbers, the people blamed the government. Conversely, when the government published good employment numbers, the people praised the government. Never mind that the government had little control over day-to-day employment changes. Now, it is true that government policy can affect employment through tax rates, burdensome regulation, changes in inflation or trade policy, and the like. But let’s face it: that’s all hard stuff to change quickly, and you have to fight entrenched constituencies who like the policy as it is.

So, it was far easier to simply fudge the numbers to make them look good. In the US, this began in earnest in 1994, when “discouraged workers” (those who had stopped looking for work entirely) were simply excluded from the unemployment rate. Unfortunately, people accepted the new numbers uncritically, leading to major electoral dividends for the politicians in power (Democrat or Republican). Today, if you want to know the state of actual employment in this country, you have to turn to the Employment-Population Ratio, which is dismal right now. Oddly, the same government that publishes the misleading unemployment rate is also publishing the more accurate numbers in an obscure location, hoping that the mass of voters is not savvy enough to dig down.

Similar distortion of statistics occurs all the time, under all governments. This can be seen on a smaller scale as well. The Obama Administration forced Solyndra to delay laying off workers until after the 2010 elections. Was this good business? No, but it was good politics. Similarly, defense contractors are being pressured not to send out layoff notices just before the election (as the law requires them to do—given that the “sequestration cuts” of the defense budget are scheduled to come into effect on January 2). Why? Because the government was intimately involved in setting up the situation, and wants to escape blame.

Obviously, one could castigate the deceit of those involved and bemoan their hoodwinking of the American people—and feel free to do so. But let’s not miss the larger point. The government is induced to lie about the state of the world because it has asserted responsibility for the state of the world, and asserted power over the world. Therefore, we are apt to blame the government even for things outside of its control, such as hurricanes or earthquakes! Given the tremendous political gains for lying under these circumstances, and the undeserved costs of telling the truth, is it really surprising that politicians lie constantly?

There is only one solution: give up the belief that the entire world is government’s responsibility. Force the government to hand back much of its power, and it will have fewer reasons to lie to us. This is the choice we have: the more powerful our government, and the more responsibility we give it, the more it will deceive and deceive until finally it can deceive no more, and we all suffer the consequences of our mistaken beliefs about the world.

Standing Desks and Health Policy

I don't normally do this, but over on my other blog I've thrown up a post with some current-events political content. That blog is mostly focused on the theme of structuring your environment; today I wrote about standing desks and such, and couldn't resist discussing some implications for government health regulation. Go check it out.

Happy Fourth of July

Anything I might have said about Independence Day was said better by the MIT-educated Prime Minister of Israel, Binyamin Netanyahu:

God Bless America.

Greecing the Skids

It is superfluous at this point to rehash the usual news bits about the Euro crisis. Suffice to say that states have consistently borrowed too much in order to fund their social welfare benefits, and now they are running up against the limits of such borrowing.

Yes, the immediate crisis was brought on by a fall in tax revenue, from the recent and continuing depression. However, we must ask how healthy a fiscal system is that fails whenever everything stops going right, all the time. Governments have grown accustomed to mortgaging their futures (or more to the point, someone else's futures) in order to pay for their present. Sadly, the future is now.

How will this play out? Smarter people than I are puzzling through the intricacies of how bad the car crash will get; but in general, we are about to return to the era of recurring sovereign defaults. Whether through an outright repudiation of their debts, or through monetary debasement of the Euro which would fund "grants" to the debtor countries, the problem children of Europe are going to escape their obligations for now, at the cost of driving up borrowing costs in the future.

An interesting question that I haven't seen addressed elsewhere is: how will the bond investors be compensated for their loss? It is one thing when you are a Latin American country borrowing from overseas banks; you can expropriate from them without pity and even with glee. But when your major lenders are German and French banks, and you have to live with these people even after you default, there needs to be something in it for them.

In earlier eras, when a profligate government had to periodically default on its debts, it would do so by borrowing from its own banks, who would face the certain prospect of losing their money every decade or so. In exchange, they were given lucrative monopolies over domestic lending and money creation. (An example of this can be seen in Mexico under Porfirio Diaz and thereafter.) The deal was worth it to the banking elites, for whom the periodic defaults became just another cost of doing business.

So what concessions will the big European banks extract from their governments? Or will the governments simply nationalize the banks, as many are itching to do? And if they do, what happens next?

Obama the Moderate Republican?

One of my father's coworkers recently said that he would vote for "the moderate Republican who is running unopposed for the Democratic nomination." It's certainly a clever line. And while most conservatives these days would be bemused at the thought that anyone could think President Obama a moderate Republican, given his interventionist domestic policy and disregard for the Constitution and so on, it occurred to me today that the characterization has some merit.

To understand how, we must remember that the Republican Party has not always been a party of small government. In previous years, people that would be derided as squishes or "RINOs" (Republicans in Name Only) were the conventional elite of the party. This was the faction of Nelson Rockefeller and the like.

In fact, the more I thought about it, the more President Obama reminds me of one moderate (really, progressive) Republican in particular, from times past: President Richard Nixon.

Now, I'm not talking about President Obama's apparent liking for enemies' lists, or his campaign's documented use of cheating and dirty tricks to defeat Hillary Clinton during the 2008 primaries (to say nothing of what his allies might do elsewhere), or any of the other sordid comparisons you might be tempted to make. I'm strictly talking about the policy programs of Presidents Obama and Nixon. Consider:

Both presidents came into office while America was embroiled in foreign wars started by presidents of the other party, having campaigned on a promise to end those wars. Both presidents discovered that to do so, they needed to ramp up the intensity of the conflict. (Though Obama seems content to cash out of Iraq and focus on Afghanistan; admittedly, he has two unwanted wars to handle.)

Both presidents favored deficit spending to stimulate the economy, coupled with interventionist policies designed to favor some domestic groups at the expense of others. For Obama, I mean the health care bill primarily, along with the nationalization of student loans and the repeated interventions into the home mortgage market, among others. Nixon, of course, imposed price and wage controls across much of the economy and severed the link between gold and the dollar, to escape the accumulating consequences of his own and President Johnson's massive deficits.

Both Nixon and Obama put in place major environmental policies; remember that Nixon instituted the Clean Air Act, which Obama's EPA has used to dramatic effect. Both, too, were committed to expanding the social-welfare state: Nixon pushed for and won passage of the Supplementary Security Income (SSI), an expansion of welfare, along with automatic Cost-Of-Living Adjustments to Social Security.

In many ways, the Republican Party then was just as Progressive as the Democrats were; Theodore Roosevelt was, after all, a Progressive Republican and one of the leaders of Progressivism of the time. It is only more recently that the Progressive platform of massive societal restructuring through the heavy hand of government, to create a New Man who would be a compliant member of mass society rather than an uncooperative individual, has been cast out of the Republican Party—by the rise of small-government conservatism on the one hand, and newly active religious blocs on the other.

So yes; in many ways President Obama would fit into the mold of a Progressive Republican from days of yore. The difference is that today is not a Progressive moment; and Obama is running against the tide of history in trying to make policy as if it were. We should see a clear demonstration of that in a few months.

How Partisan Opportunism is Eroding Civilian Control Over National Security

Recently, the Obama administration apparently cooperated with reporters working on a story about the Stuxnet virus inflicted on Iran, essentially confirming that the United States is now launching cyberattacks against other countries. The blowback from this has been immense, with even senior Senate Democrats attacking the leak as reckless and harmful to the interests of the United States. (Hat tip: Instapundit.)

This follows after an earlier episode in which the Obama team claimed credit for stopping the latest underwear-bomber plot in Yemen, antagonizing British intelligence and blowing the cover of at least one agent who had managed to infiltrate al-Qaida. In general, the Obama team seems to have utterly ignored the maxim about loose lips sinking ships.

The partisan implication of this have been well hashed over by other blogs. What I want to focus on is how such behavior by the civilian leadership will tend to encourage the military and intelligence services to simply stop telling the White House what they are doing.

At the beginning of President Obama's term I had lunch with someone who would know, who told me that the military was being very careful with what information they were giving the White House, until they could verify that he could be trusted. The reasoning is simple: if a politician is going to reveal all of your secrets for personal gain, then your duty to the civilian leadership may well be outweighed by your larger duty to the personnel you command, the objectives of your mission, and the greater interests of the United States as a whole. (Something like, "We had to deceive the village in order to save it.")

So now that President Obama is getting desperate, in the face of an electoral defeat that seems more and more likely as time goes on, the national security establishment is going to be mighty tempted to cut the White House out of the loop altogether for anything important. In the short term I can't blame them; the danger is that for the long term, this kind of behavior could well lead to the defense establishment forming its own independent policy, free of civilian oversight. (More so than they already do, of course.)

This is why public-spirited politicians generally don't shoot their mouth off about national-security secrets. President Obama is doing real damage to the authority of the Presidency, and our elected government in general.

Being Paid to Borrow

On Friday, the 10-year Treasury yield ended up below 1.5%; shorter durations are even more ludicrous. At a time when inflation is something like 2% (and that's assuming you trust the official numbers, which I don't), what this means is that the Federal Government is essentially borrowing money for free, at worst—at best lenders are effectively paying real money to the Treasury for the privilege of letting it spend their assets.

I suppose that if ever there was a good time to run trillion-dollar deficits forever, this might be it. Of course, that all depends on whether the Treasury can roll all of its debt over into longer maturities before rates shoot back up…

Why are rates so low? John Mueller argues that interest rates are being driven down because of the Dollar's status as a reserve currency; something like $4 trillion is being held by other nations not to pay for our exports, but to stabilize their own currencies. This creates a serious problem, driving inflation and causing interest rates to decouple from fiscal and monetary policy. In short, politicians no longer suffer automatic consequences from borrowing loads of money.

Worse, if we were to stop borrowing so heavily, all it would do is to drive interest rates even lower as foreign buyers bid up the diminishing stock of Treasury bonds remaining. Eventually, the temptation of free money would grow intolerable to any responsible politician, and we'd start overspending again.

What can be done about this? Mueller suggests going back to gold as an international reserve. Short of that, I'm not sure how we solve the problem. Assuming that it is a problem to be solved.

Enlightened Regulation, or How Not To Do It

(Whew! Need to blow the dust off of this here blog. It's been a while, but I hope to get back into the swing of things. Onward!)

Lots of people have Employee Stock Option Purchase plans (ESOPs) through their employers. Have you ever wondered why companies provide them?

I happen to have just sat through a presentation for one of our client companies on putting an ESOP in place. The short version is that an ESOP plan is a way for the founders of a company to sell their shares to their employees over several years, and avoid paying taxes on the proceeds almost entirely.

"Why, those dastardly greedy capitalists!" you might exclaim. Well, not quite. If owners of a successful company simply sold their shares without sheltering the proceeds from taxation, they would lose around half to the government, state and federal. These owners consider that outcome a poor reward for their many years of sweat and toil, and would like a way around it.

And a battery of lawyers and other middlemen are happy to provide such a way.

One can find many similar cases where government regulations will create a perverse result, until specialist middlemen such as attorneys or financial services people or others find a way around the regulations. The net result is simply to raise transaction costs for everybody, and to penalize those people who try to do it the "normal" way. With enough government regulation, the "normal" way becomes the sucker bet. Those who find the loopholes (specially built into the law just for them!) are the real winners.

The presentation today reminded me of a story I heard about a year ago from a friend of mine, who is a lobbyist for the garment industry. I may be remembering the details wrong, so forgive me, but the story is that back in the 1950s or so, a number of children were burned when they were groping around near open flames at night and their pajamas caught fire. This created something of a scandal, so the government dutifully decreed that all children's pajamas had to be resistant to fire.

But how?

It turns out that while it was possible to use a tighter weave for the cloth, the new weave was prohibitively expensive (and continues to be so, in most cases). The industry found that there was only one good way to meet this requirement: by dousing the pajamas with flame-retardant chemicals. Alas, it turned out several decades later that the chemicals in question were toxic and caused cancer.

So a new chemical was found, and children's pajamas today continue to be doused with it. My friend mentioned one sad case where the maker of natural, organic pajamas had her stock confiscated for failing to use the appropriate chemicals.

Meanwhile, the world has changed. Open flame is no longer found in most households where children can get at them, particularly not in the middle of the night, thanks to the spread of electronics and electric kitchen appliances. So the original purpose of the regulation in question has vanished, leaving in its wake many young cancer patients.

And some clothing manufacturers have responded by producing new lines of "lounge wear," or some other euphemism, which is essentially children's pajamas under another name, and not subject to the regulations. To get away with this, the companies generally need some good lawyers on staff and connections with the regulators. So, all that the regulations have done is punish those who act straightforwardly, reward those who create new loopholes and their middlemen, and harm whole generations of children.

But why don't the garment companies simply lobby for the rule to be repealed? That would seem the sensible move, yes? I asked my friend this, and he told me that no company could dare be the first, because it would be pilloried as wanting children to burn to death to protect its profits. Thus, no action is taken.

Such stories of woe are shot through the vast regulatory morass of our government. Laws remain on the books long after they have ceased to help, and begun to hurt. Other laws have no chance of ever achieving their stated goal, and are merely yet another cudgel for the "in-crowd" to use against those not willing to keep lawyers on retainer. Yet the regulations continue. They can't be bargained with. They can't be reasoned with. They don't feel pity, or remorse, or fear. And they absolutely will not stop, ever, until... what?

What happens next?

The Self-Sustaining Society, Part II: Procedural Equality

In my last post, I argued that positional equality (i.e. equality of outcome) was unsuited to be a fundamental political principle for society. Unless positional equality is a secondary, subordinate principle to some other controlling principle, it provides no basis to choose between ends, leads to endless coercion, and goes against human nature in opposing the drive to better ourselves. Additionally, it provides no intrinsic basis to justify the authority of parents over children, or parents’ duties to them.

(Some, such as Locke, argue that children are under authority because their reason is not fully developed, and they cannot choose between ends themselves. The problems with this argument will have to wait for a further post, but for now note that reasoned choice plays no role in positional equality—indeed, is effectively discouraged, since nothing you do is permitted to improve your relative position.)

In this post, I will consider procedural equality.

Procedural equality encompasses such ideas as equal protection of law, the equal ability to speak freely, equal voting rights, and equal eligibility for government office, or benefiting from government goods. The most critical of these procedural protections are typically equal influence over government, and equality before the law. All people, when interacting with the institutions of government, are treated precisely the same as a function of their actual behavior, as opposed to social class, sex, religion, or any other intrinsic trait of the individual not related to their actions and choices.

We should pause here to note what procedural equality is not. It does not necessarily encompass political freedoms such as property rights; it would be consistent with the principle of procedural equality for all of us to live in a crushing tyranny, so long as that tyranny were applied to all equally. The principle of procedural freedom, meanwhile, will partly overlap with procedural equality, but based on a very different and stronger justification: you have fewer opportunities to treat people unequally when you may not infringe on their rights at all. Therefore, while much of the discussion to come will bear on procedural freedom, it does not necessarily follow that it can be directly applied.

Moreover, procedural equality does not preclude the application of a positive program imposed upon citizens, for example trying to cultivate a particular set of civic virtues or to encourage or discourage particular behaviors—so long as they are applied equally. (While a system based on positional equality could technically do the same, this creates an internal contradiction: all-encompassing positional equality is based on uncertainty over what the best life is. Advocating a positive program implies a judgment that some behaviors or character traits are better than others, which tends to undermine the argument for all-encompassing equality. And if you were to limit the scope of positional equality in response, you would again render positional equality subordinate to this new judgment or principle.)

And to be clear, we are not considering procedural equality as a means to prevent government corruption or oppression; this already treats procedural equality as a subordinate principle. Let us begin instead by considering procedural equality in itself, as a self-contained concept.

First let us explore the assumption above, that one can use different procedures on people based on their actions and only their actions. Procedural equality is premised on the existence of procedures, that is to say, a political institution that makes laws and carries them out. Civil and criminal law is based on the principle that you may treat people differently (i.e. punish them) if they should break the law. Recall from above that procedural equality is compatible with coercive government; therefore, in theory, any action can be criminalized, so long as the action does not affect the relative ability to exert political power and be treated equally by the state apparatus.

But penalizing personal attributes—sex, race, religion, and so on—is not an attempt to regulate behavior, but a direct attack on the political standing of the individual in question. A man cannot magically become a woman if he wishes to avoid sanction, nor a woman a man (neglecting modern surgical innovations). Rather, they must suffer harm that necessarily interferes with their ability to seek redress.

Yet here we pause. Is religion indeed a personal attribute, rather than a choice? What about a law against fat people; is someone fat by nature or by action? What about a law that discriminates between rich and poor; is wealth a personal attribute, or the product of certain actions?

What about personal attributes that lead to different behaviors? Men and women deal with different biological drives; perhaps the law should distinguish between them? Religions (assuming for the moment that they are indeed personal attributes) mandate different classes of behavior; should some be judged helpful and others harmful?

Many argue that our choices and our circumstances are so heavily interdependent that one cannot separate them from each other. Is a criminal to be punished because his poverty drives him to steal?

I shall not try to answer these questions; but that they exist at all poses problems for procedural equality. Perhaps that is why the trend in American jurisprudence has been to broaden its scope over time, attempting to uncritically absorb all of the problematic cases and avoid the issue. (When was the last time a government employee was fired for professing communism?)

The second problematic element was noted in the previous post: political power, and access to and treatment by institutions, do not exist in a vacuum. They are strongly influenced by disparities in wealth, education, group prejudices, or other otherwise-legal factors, to the point that (for example) no one believes that a welfare recipient has the same political control over government as a millionaire.

Therefore, goes this argument, to ensure true procedural equality, one is forced to seek positional equality or a functional approximation thereof for dimensions relevant to political interaction. This gets us back into the many logical tangles we saw in the last post (albeit mitigated somewhat because positional equality would here be subordinate to procedural equality, without necessarily extending beyond that).

One may scoff at such an argument, but consider education. One who cannot write well is unlikely to write his congressman for redress, nor is one who cannot read likely to exercise his vote effectively. A certain minimal level of education is necessary before one is able to use the procedural privileges which are in theory open to him. Therefore, one is forced to extend the principle of procedural equality into a vast new sphere of mandated policy. Other extensions suddenly do not seem so unreasonable.

(Here, the extended form of procedural equality could perhaps justify the education of a minor or major, even through coercion if you applied it equally; as Rousseau writes, “he shall be forced to be free.” The extended form does not distinguish between a minor and major beyond differences in ability, nor does it necessarily afford any special role to the parent in this regard.)

As a philosophical criterion, procedural equality ends up collapsing back into positional equality to a large degree as soon as it comes into contact with the real world. Even in the messier “practical” form it takes in our political system, it runs afoul of the blurred line between action and identity as discussed above. Therefore it is unsuited to be a primary principle for society, as was positional equality.

Once subordinated to other principles (such as, per Locke, the paramount place of property rights), procedural equality or variants thereof become a vital part of our political system, of course. The presumption of equal treatment is a powerful force in the continuing dynamism and legitimacy of our society. But again, it is only once subordinated to some other principle, and therefore limited in scope, that procedural equality can serve a purpose.

********

The next post will discuss procedural freedom (in the sense of Robert Nozick).

The Self-Sustaining Society, Part I: Positional Equality

[I'm ba-aaack... —ed.]

A stereotype of the political controversies of our time envisions a conflict between those who favor freedom and those who favor equality. This formulation is imprecise: liberals and conservatives each claim to be motivated by both of these principles, applied in different ways. (In particular, the difference between “procedural equality” and “equality of outcome” is obscured by this stereotype; see below.) Some liberals assert a right to abortion in the name of freedom, while asserting the right to progressive taxation in the name of equality; some conservatives assert a right to unrestricted commerce in the name of freedom, while asserting the harm of abortion in the name of the equality or near-equality between child and mother.

This incoherence of principles is widespread throughout American political behavior. You will find very few ideologues entirely devoted to either freedom or equality. More often, you seem to find an arbitrary mixture of both. It is more accurate to say that most people’s tendency toward freedom or equality is, in fact, unconsciously or consciously determined by the prior application of other principles entirely: populism, or “national greatness,” or differing degrees of religious influence, or other such concepts. These people usually justify their positions by citing freedom or equality, not because these are their true sources, but because they are politically legitimate in modern American debate, while their true principles are not.

In this series of posts, I argue that this ideological confusion is a symptom of a deep deficiency in the modern understanding of both freedom and equality. Neither of these is appropriate, by itself or in combination with the other, to be the sole principle of a good society; and that we try to use them in this way is a contributing factor to our social fragility. Most people understand this instinctively, and are searching for something better, more complete. In the degenerate political movements that arise (such as populism or nativism), we can see people trying to find their way back, all unaware, to a political philosophy that was once a vital part of American thought—before it was taken from us by a mix of economic centralization, ideological shifts, and a change in the very meaning of rule by the people. America has lost the political vocabulary it once had to describe a better ideal: that of the self-governing citizen.

This ideal itself proved unable to resist the forces undermining it, I argue, because it did not include any rigorous treatment of the separate roles of the individual citizen, citizens in their private communities, and citizens acting through the apparatus of state power. So governments were able to absorb into themselves activities properly left to individuals or communities—and vice versa. Such a rigorous treatment is needed to correct this flaw, and to enable the ideal of self-government to survive in the face of the many ideologies seeking its destruction.

******

I will begin exploring the easier topic, equality.

The term “equality” can actually refer to either of two concepts: procedural equality (also called equality of opportunity) and positional equality (also called equality of outcome). Procedural equality addresses such things as equal justice under the law, or equal access to markets. Positional equality addresses topics such as disparities of wealth or political power. In this post, I focus on positional equality.

The naive argument for positional equality is that it is inherently wrong for two individuals to have disparities of happiness, and that efforts should be taken to raise the happiness of the less happy, even at the expense of the more happy. (In practical terms this often is applied to wealth, or access to education, and so forth. It is stated in perhaps its most stark form by John Rawls in A Theory of Justice, p. 102: “No one deserves his greater natural capacity nor merits a more favorable starting place in society.”)

Note a crucial aspect of this position: it is content-free. The principle of positional equality makes no claim about what makes people happy (except perhaps for money, which is viewed as a proxy for what really makes a person happy). By making people positionally equal, the proponent of this view can avoid the question entirely since, whatever it is that makes people happy, everyone will have the same quantity of it.

This aspect can be seen clearly when, every time a new social or material factor is determined to contribute directly to happiness, cries go up to share it equally (for example, medical care or housing).

That said, positional equality is a poor guide for making decisions in the real world, because it provides no intrinsic basis to trade off one consideration against another. If equality is the sole criterion, how does one handle a situation in which you must choose between two dimensions of equality? For example, equal access to health care requires a medical system with enough resources to provide such care. What if you could have such a system, but only by allowing more general disparities of wealth to provide the necessary tax revenues? The question cannot be answered purely within the framework of positional equality, for the reason noted above: positional equality makes no claim as to what makes people happy—and therefore, which of two conflicting goals should be chosen.

Another aspect in which positional equality is incomplete by itself is that it utterly fails to explain or justify parents’ responsibility for, and power over, their children. (By extension, it also fails to explain the prerogatives of education.) If children are equal to their parents, by what right can a parent constrain his child? Conversely, by what right can the child make a claim on the resources of the parent? Positional equality cannot answer, and thus is brought up short by one of the most primal elements of human existence.

(Parenthood and families will come up again as we consider other political principles, and will be dealt with at length in its own post sometime in the future.)

These points shows that the concept of positional equality is insufficient in itself to be the ultimate political basis of a society. Equality relies on the existence of prior and independent political or philosophical concepts, which can provide a basis to judge between ends, in order to be of use in a political society.

Positional equality has other, fatal flaws that throw into doubt its place in a society that claims to be good. First, it relies on relative judgments. Positional equality measures people’s standing solely in reference to each other. Absolute levels of wealth or health or education are unimportant, compared to the distribution of these things among the population. (This can be seen in economics, for example, in the Gini Coefficient of wealth.)

This relative focus causes an individual to compare his own attributes, or character, or achievements, not to an internal or societal ideal to be striven for, but (at least in part) to the attributes of his neighbor. This fosters complacency in the presence of mediocrity, and poisonous envy in the presence of achievement. It also guarantees that most people will be unhappy, because whenever there are inequalities in attributes, most people will be worse off than the fortunate few on top. In this sense, a dominant ethos of equality that causes people to focus their attention disproportionally on differences will lead directly to a decrease in general happiness, except in the presence of perfect equality.

But even pure equality would have the counterintuitive effect of lowering happiness, at least in the form of self-esteem. As Robert Nozick writes in Anarchy, State, and Utopia:

When everyone, or almost everyone, has some thing or attribute, it does not function as a basis for self-esteem. Self-esteem is based on differentiating characteristics; that’s why it’s self-esteem. And as sociologists of reference groups are fond of pointing out, who the others are changes [p. 243].

The most promising ways for a society to avoid widespread differences in self-esteem would be to have no common weighting of dimensions; instead it would have a diversity of different lists of dimensions and of weightings [with which to judge your own worth] [p. 245].

The focus on relative endowments also permits the champions of equality to advance policies that, on balance, reduce the aggregate wealth or happiness of a society, if they should also make the distribution of such things equal. This is true on a fundamental level, since the total wealth of society is irrelevant to the comparative calculations of positional equality.

Moreover, actually realizing a society built on positional equality (or any other predetermined distribution of wealth or anything else) by definition requires the continuous use of coercion, at all levels of society, to preserve the desired distribution of wealth. Nozick writes:

…no end-state principle or distributional patterned principle of justice can be continuously realized without continuous interference in people’s lives [p. 163].

For [such principles] do not give the right to choose what to do with what one has; they do not give the right to choose to pursue an end involving (intrinsically, or as a means) the enhancement of another’s position [p. 167].

This extends so far as to prohibit the free giving of gifts; if (let us say) society were successfully ordered that property were distributed justly among individuals, according to some principle of equality or other criteria focused on the distribution itself—then if you give property to another, the act is unjust!

Whether or not it is better to give than to receive, proponents of patterned principles ignore giving altogether.… [T]heir theories are theories of recipient justice; they completely ignore any right a person might have to give something to someone [p. 168].

It should be clear by now that equality of position, in its strict and unrestrained form, is unsuited to be a fundamental political principle for a society. It gives deficient criteria for judgment between actions, cannot encompass such elemental parts of the human experience as parenthood, stimulates envy and the desire to bring low those more successful regardless of the cost to society as a whole, and cannot be carried out without an unrestrained tyranny that would extend into every aspect of life.

More limited justifications of positional equality seek to get around the preceding series of issues, to some degree. One argument states that some degree of positional equality is necessary to defend political equality (a subset of procedural equality, to be discussed in the next post) and government by the people: if too much power is concentrated in the hands of too few people, they will take effective control of government and make a mockery of our republic. Therefore, equality is necessary, but only along those dimensions important for political involvement, and only to the degree necessary to defend political equality from subversion. This is a pragmatic political program, motivated by a specific goal, and is furthermore less domineering than the requirement of full equality. Furthermore, the undermining of procedural equality necessitated by positional equality has a built-in limit, in that it must not itself threaten the political equality which is the point of the exercise.

A more cynical, limited version of this approach has it that society itself will not stand up to too great a level of inequality, and that if left unchecked inequality will inevitably lead to social upheaval and chaos. Therefore, as a defensive measure, the society must take steps to prevent such dangerous levels of inequality from arising or persisting. Here, too, the program of equality is restrained by the paramount importance of the well-being of society.

Both of these views are arguable, but are also worth keeping in mind. Yet notice that in each case, positional equality is no longer the sole criterion—instead, it has become a means, or a secondary and subordinate criterion, to achieve a prior goal. Indeed, only if used in this way can positional equality play a meaningful role in political society. That this conclusion is badly obscured in modern political discourse, and that positional equality in and of itself is sometimes appealed to as justification for some policy or other, has caused significant distortions in policy.

To cite a single example, at present the educational system labors under the belief that all students, in an ideal world, would go to college. (This simplistic belief neglects whether college is best for all people, or even tolerable; or whether society would benefit more from paying [or forcing the students to pay] the tremendous costs of universal college education, than from encouraging students to choose as they see fit.) But since students have unequal academic abilities, schools and colleges as a class have sought to broaden their student base by watering down the curriculum. Rather than encouraging the true achievers to excel, the program as a whole is weakened to accommodate those who will least benefit from it. Such is the effect of blindly applying the principle of positional equality.

(This treatment is painfully brief; the issues connected with education in a society will also be dealt with, at extreme length, in their own post.)

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The next post in this series will address procedural equality.