Gene Callahan Goes Too Far (Again)
I am actually very sympathetic to Gene’s arguments in the comments on this thread, but I think he goes too far. If we accept his argument below, watch what we are able to do afterward. So here’s Gene, responding to someone who thinks taxes are theft:
[Othyem wrote:] “The requirement that we pay taxes presupposes the government is legitimate to begin with.”
[Gene responds:] Yes, it does. And the statement that taxes are theft presupposes the government is illegitimate to begin with. It certainly can’t be used, as many try to do with it, to show that the government is illegitimate.
And, of course, the requirement that I pay for the mango I ate in the grocer scenario above presupposes that private property is legitimate to begin with.
…I suppose someone will now say, “So, Gene thinks private property is illegitimate!” That’s not my point, which is, instead, that one cannot argue against some legal regime by stating “It employs coercion!” ALL legal regimes do, even the one in Rothbardistan, or they wouldn’t be legal regimes. (They [would] just be suggestions.) But a lot of ignore this fact and engage in the rhetorical flourishes we saw efinancial using above, which just amount to empty propaganda. Perhaps we should prefer Rothbardistan to what we have, but if so it’s not because the State “rests on coercion”!
OK there are two different confusions here: First, Gene is using “coercion” interchangeably with “force,” and that’s not how Rothbardians use the term. In Rothbardistan, if someone shoots a home intruder, he hasn’t employed coercion against the guy. Maybe that’s a rhetorically shady trick, in Gene’s eyes, but that’s the way the terms are used. Coercion by definition is a violation of property rights. (At least, the way most libertarians use the term.)
Now let’s take on the bigger issue, and deal with the fact that Rothbardians can’t use the (alleged) coerciveness of the State to render it illegitimate, since they are presupposing that taxation is theft, etc. This is all very clever, and I totally understand why Gene thinks the Rothbardians are moving in a circle.
But hold on just a second. Suppose the Rothbardians are right, and taxes really are theft, and so the State really does rest on coercion. Now I want to complain about this. What exactly would my complaint be? Why, it would be that the politicians are a bunch of thieves, and the State itself rests on coercion.
So, contra Gene, it is indeed the case–if the State is illegitimate–that the State is bad because it steals from me, etc. I am not moving in a circle by saying this.
To see why, switch the context. Suppose my son comes home from school and says, “I can’t stand that Jim, he’s such a bully!” Then my son starts lifting weights, hitting the punching bag, etc. in order to stand up to Jim on the playground.
If Gene were there, he could pull a stunt like this: “What exactly is your problem with Jim? You’re mad that he’s a bully, hey? But you yourself are planning to use force against him. So to someone who doesn’t think Jim is a bully, YOU are the bully. So we can’t use Jim’s bullying to prove that he’s a bully, now can we? You’re just assuming your conclusion.”
Of course, the real irony in all this is that the Rothbardians have a rather intricate development of just property rights, starting from square one. I myself don’t necessarily endorse every element in the argument, and I’m not even sure I endorse the enterprise itself.
But my point is, there are lots of things you can say against libertarians in the Rothbardian/Hoppeian/Kinsellian tradition. But to accuse them of arguing in a circle, in order to conclude that the State is illegitimate, is not plausible.
Federal Government Deploys “Strike Force” and Unmanned Drones…in America
[UPDATE below.]
I don’t lie:
The Senate agreed Thursday to add $600 million to the effort to stop the flow of illegal immigrants across the U.S. Mexican border.
The money would be used for such purposes as adding 1,500 new enforcement agents and deploying unmanned aerial drones to improve border surveillance.
Incidentally, I heard Senator Schumer use the term “task strike force” on the radio; that’s what prompted me to Google the news story for you here. There was also talk of “boots on the ground.”
You know, the same language that we previously used when talking about countries that we had just invaded.
Let me just state the obvious: The country will not turn from a moderately free place, into a military dictatorship, overnight. Before we can have predator drones patrolling New York City, hunting down the people who dare to blog against the regime in DC, we first have to deploy those drones in far-off places filled with brown people with funny names. And then when the American public gets used to that, we can deploy the drones in far-off places (to most Americans) with the ostensible purpose of keeping out brown people.
It doesn’t really matter whether “illegals” are good or bad for the economy. The question is, do we really want Chuck Schumer and his pals telling Americans that they are deploying unmanned drones in the US–to thunderous applause from “conservatives”?
UPDATE: When I first typed this up, I wrote “task force” which doesn’t sound so bad. But that’s because I goofed and plugged in a much more innocuous term. What Schumer actually said was that they were going to send a strike force to the border, to keep us all safe. For example, check out this news article to see the terminology:
The money will pay for 1,000 new Border Patrol agents to form a special strike force to be deployed where needed; 250 new Immigration and Customs Enforcement officers and intelligence analysts; 250 new Customs and Border Protection officers at ports of entry; new communications equipment; and unmanned aerial drones to patrol the U.S. side of the border.
And this makes me feel warm and fuzzy too:
A legislative framework unveiled last spring by Schumer, Reid, and other Democratic leaders called for increased border security, an overhaul of the visa system, a biometric database that would allow employees to ensure they hire legal workers…
One last thing: Technically the Senate has just approved this; it’s not yet a done deal. But I believe Obama supports this. So if the Democrats are behind it, I will be pleasantly shocked if the Republicans oppose it.
Sign Up for the Lara-Murphy Report!
Carlos Lara and I are launching an electronic newsletter (scroll to the bottom of this page), with the first issue coming out in September. The “Lara-Murphy Report” will come out monthly. Every issue will feature an interview with a prominent financial or economic figure, an article from Carlos applying insurance and/or trust products to household or corporate needs, and an article by me on a macroeconomic topic. We will also have a “Pulse on the Market” giving a quick rundown of what’s happened in the financial world since the previous issue.
For our inaugural issue in September, we have an interview with Morgan Stanley’s Caitlin Long. (This is the woman who wrote the recent FT piece on Hayek.) Caitlin is an expert on insurance, and she will discuss the connection between investment banks and major insurers. (In our new book, one of our major themes is that individuals should pull their money out of the Wall Street/Fed nexus and put it into whole life insurance policies.)
For example, insurance companies do buy derivatives, but for hedging purposes. They try to match the duration of their assets with their liabilities, and if there’s a mismatch they will use derivatives to plug the holes. For another example, the issue of leverage is very interesting. On the one hand, investment banks clearly have more leverage in the traditional sense, and are more vulnerable to a financial shock. On the other hand, there is a sense in which insurers are extremely leveraged–if every policyholder died of a heart attack tomorrow, they would be up a creek.
In the September issue, Carlos will discuss the way a household can use a trust to shield its assets from creditors and the government. This is one of Carlos’ core businesses; he has been meeting with individual clients and setting up trusts since before I knew the proper pronunciation of Mises. Of particular interest to those who are fans of Nelson Nash’s Infinite Banking Concept, Carlos will show the interrelation of using whole life insurance policies as a major asset embedded in a trust.
Finally, I will be writing up the presentation I gave at our Austrian Workshop in Nashville in July. Specifically, I will show how Austrian economists knew that the housing bubble was going to burst. I will go beyond the mere qualitative statements like, “The Fed distorts interest rates,” and show the specific things that led me to declare (as early as July 2007) that this would be the worst recession in 25 years.
So check out the revamped website and bookstore. Our new book, How Privatized Banking Really Works, is available. (We have switched to a different “shopping cart” software, so the kinks in the shipping charges that some of you experienced two weeks ago should be ironed out now.)
Check out the cover of the Lara-Murphy Report, and hop on board the train. Everyone’s doing it. If we get enough subscribers, it will be possible for me to work on those deep macro questions that many of you constantly email me about. Wouldn’t it be nice if I actually answered you for a change?
America, The Shining City on a Hill
More depressing stuff from Glenn Greenwald:
The Obama administration’s claim that the commissions are now improved to the point that they provide a forum of real justice is being put to the test — and blatantly failing — with the first such commission to be held under Obama: that of Omar Khadr, accused of throwing a grenade in 2002 which killed an American solider in Afghanistan, when Khadr was 15 years old. This is the first trial of a child soldier held since World War II, explained a U.N. official who condemned these proceedings. The commission has already ruled that confessions made by Khadr which were clearly obtained through coercion, abuse and torture will be admitted as evidence against him. Prior to the commencement of Khadr’s “trial,” the commission ruled in another case that the sentence imposed on a Sudanese detainee Ibrahim al-Qosi — convicted as part of a plea bargain of the dastardly crime of being Osama bin Laden’s “cook” — will be kept secret until he is released. What kind of country has secret sentences?
That really is amazing. Would that have even occurred to you, to give someone a sentence and then not tell the world what it was? Have you ever even heard of such a thing? Well this guy hadn’t:
A fellow observer of the military commissions here, former Marine judge and law of war expert Gary Solis, here to monitor the commissions for the National Institute for Military Justice, says he has presided over 700 courts-martial and has never heard of a secret sentence. . . .
The above isn’t Glenn talking; he’s quoting an ACLU person writing from Guantanamo. She goes on to write:
It boggles the mind that the military judge could find that Khadr was not coerced and gave these statements to interrogators voluntarily. Khadr, then 15 years old, was taken to Bagram near death, after being shot twice in the back, blinded by shrapnel, and buried in rubble from a bomb blast. He was interrogated within hours, while sedated and handcuffed to a stretcher. He was threatened with gang rape and death if he didn’t cooperate with interrogators. He was hooded and chained with his arms suspended in a cage-like cell, and his primary interrogator was later court-martialed for detainee abuse leading to the death of a detainee. During his subsequent eight-year (so far) detention at Guantánamo, Khadr was subjected to the “frequent flyer” sleep deprivation program and he says he was used as a human mop after he was forced to urinate on himself.
In closing arguments before the judge’s ruling, Khadr’s sole defense lawyer, Lt. Col. Jon Jackson, told the judge, “Sir, be a voice today. Tell the world that we actually stand for what we say we stand for.”
The judge didn’t tell the world any such thing.
GG then takes the mic back, and makes this good point:
As I’ve written before about the Khadr case…what is most striking to me about this case is this: how can it possibly be that the U.S. invades a foreign country, and then when people in that country — such as Khadr — fight back against the invading army, by attacking purely military targets via a purely military act (throwing a grenade at a solider…), they become “war criminals,” or even Terrorists, who must be shipped halfway around the world, systematically abused, repeatedly declared to be one of “the worst of the worst,” and then held in a cage for almost a full decade (one third of his life and counting)? It’s hard to imagine anything which more compellingly underscores the completely elastic and manipulated “meaning” of “Terrorist” than this case: in essence, the U.S. is free to do whatever it wants, and anyone who fights back, even against our invading armies and soldiers (rather than civilians), is a war criminal and a Terrorist.
More People in the Financial Sector Using the A-word in Public
Caitlin Long, of Morgan Stanley, was actually going back and forth with the FT editor at Mises University about this piece. (To be clear, Caitlin was at Mises U telling me about it. The editor of FT was not there.) An excerpt:
If Hayek were alive he would caution businesses to be alert for the formation of new bubbles, especially in long-term businesses in which losses may not yet be fully recognised and price signals may still be distorted. He would agree with the investment caution that businesses have exhibited in the face of artificially low interest rates, and advise corporate decision makers to be alert if a project appeared profitable solely based on interest rate assumptions.
Where might the costs of the current loose money show up over time? It is impossible to predict with certainty. But low interest rates for a longer period increase the likelihood that businesses will miscalculate. Early signs of an investment recovery are showing up in such long-term businesses as industrial and transportation equipment and machinery. We will soon find out whether this recovery is real or the beginning of another bubble.
Also, in retrospect I don’t think Caitlin said “Austrian” in the article. But she cites Hayek all over the place.
One-Hour Talk on Private Law and Defense
Even those of you who are well-read in the anarcho-capitalist literature may enjoy this talk from Mises U, as I think I came at these issues from a slightly different angle. For example, I came up with the analogy (starting around 24:00) of baby-killing and using the passive voice, on the fly. And really, how many people use analogies involving baby-killing and the passive voice?
I think this talk serves as a good commercial for my upcoming Mises Academy class on private law and defense. The full infomercial comes out on Friday.
Movie Picks (for Libertarians)
Over the weekend I visited my brother in Boston. Amongst our activities we saw The Other Guys. Absolutely hilarious. I was just hoping it would be decent, and within 10 minutes we knew we had chosen wisely. I don’t want to say too much and spoil it. If you find Will Ferrell even mildly amusing, then you should see this movie. Also, note the interesting political angle they take in the closing credits.
Since I’m giving picks, here are some other ones from my Netflix adventures the last few months:
* Straight Time. A great Dustin Hoffman movie that will show you how entrepreneurial thieves are.
* Across 110th Street. A pretty good (though dated) mob movie that is very interesting because it shows how the mob tracks down guys who rip it off. It also shows an interesting view of police corruption that I haven’t gotten from other movies like this.
* Colossus: The Forbin Project. Of the films I discuss in this blog post, this one is not necessarily “a good movie.” I saw an excerpt from it on an LRC blog post, and it looked intriguing since it obviously pre-dates Terminator by a country mile. I will say this, the movie’s plot is not as obvious as you might have thought from reading the description. But unless you are a serious sci fi geek, you can probably find something better to do with your life.
Is Social Security “Cashflow Negative” This Year? Yes and No
Yikes, there is a subtlety in the Social Security debate that just bit me in the buttocks. (Fortunately we all have health care now.)
I am participating in another “Public Square” debate, like the one I did earlier on the New Deal. (The links to that earlier debate are dead; I don’t know what the deal is.)
Anyway, I am arguing that “Social Security Is In Crisis.” I repeated the claim–made by many sources, I won’t even bother listing them here–the Social Security is already cashflow negative.
Yet we need to be careful, as my opponent demonstrated in his response. (We still have to write Round II before the whole thing is posted.)
What is true is that the “Net Contributions” into Social Security from the dedicated payroll tax are $346.8 billion from January through June, while benefit payments have been slightly higher at $347.7 billion (through June). This is what everyone means when saying, “Social Security is already in the red, and is drawing from its ‘trust fund.'”
However, the interest earnings on the “trust fund” were $59.6 billion YTD. So the Social Security trust fund was actually higher at the end of June 2010, than at the beginning of the year.
You can find out all the different components of Social Security income and outgo at this website. Make sure you break things down monthly, because there are some funky things going on. For example, one component of income is “income from taxation of benefits,” and that only hits every quarter. On the other hand, there are humongous interest payments that kick in only twice a year.
So to get the full picture of what’s going on, you should look at the income and outgo components on a monthly basis, for at least a full yearly cycle.
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