Friday on Freedom Watch

Here’s the clip for those who missed.

The internet is the most complex network of telecommunications that the universe has ever known. It hosts billions of dollars of economic exchange. In its fast rising to dominance, the cyberworld has had to quickly evolve social institutions so that contracts could be enforced. Though quick and relatively young these processes have proven well against many of internet tradings unique enforcement challenges.

So you are quite right to be concerned and ask critically if law makers considered that there might be costs associated with this new ISP law. Mandating that ISPs record, preserve and make available for governmental search all users’ digital histories for a year would, I’d imagine, significantly alter the way many people use the internet. Hence also disrupting the processes of institutional innovation currently at play in the digital world.

Law makers instead busily named it “the protecting children from internet pornographers act.” Why do I feel like the people who wield the power to regulate our technological future probably couldn’t be relied upon to program a TiVo?

Update: link should be fixed

Criminal versus civil law; wake up neocons!

So the interns at Cato and IHS battled it out in their annual debate a few days ago. It was a great discussion.

In my mind a major point of victory for team liberty over team virtue was that libertarians continuously insisted upon justifying the state’s use of violence and force when using legislating against behaviors. In other words, libertarians recognize the essential differences between the criminal law and civil processes; whereas the conservatives in the debate treated state made legal processes as a homogenous black box.

I’m tempted to challenge more forcefully the belief that drug use or even murder crimes have harmful effects upon some methodologically dubious definitions of “society.” Through most of human history these actions were effectively detered by civil rather than criminal legal mechanisms.

Prohibition, incarceration and militarization harm society far more explicitly and to greater magnitude.

Randian robot sex, and hard ons for social progress.

Though it’s been several months since my premier night viewing of Atlas Shrugged, I thought I’d write up my first impressions nonetheless.

Unfortunately, as a stand-alone film it gets an objective thumbs down. If you don’t know anything about Rand or her ideas you’re probably not going to leave the theater a true believer, probably not even a true understander.

On the other hand, fanboys (which I’ll admit to being to a certain degree) will definitely swoon when hella-romantical Henry gifts his wife a bracelet forged from the first batch of metal. For non-noobs to Rand, I suggest inviting thoughtful friends too impatient for a 2000 page schlep and discussing themes over dinner and drinks thereafter.

I am willing to defend the film and Rand from a certain form of criticism that I hear frequently – more frequently since the premier. To many readers, Rand doesn’t know how to write. Her characters are stiff emotionless clones of one another – what gives?

I get frustrated hearing this criticism of Rand, because I think it communicates more about the critic than about the nature of Rand’s ideas or style per se. In other words, “Rand’s characters are two dimensional” is just something that people who don’t understand Rand tend to say.

To many, Rand’s characters feel like robotic automatons akin to the creepy cyborgs of formal neo-classical economics. They act as if they are only motivated by money and self-interest. When these readers get to the parts of Rand’s novels about romantic relations it’s an awkward experience to say the least. Randian robot sex is cold, stiff and unpleasant. But this is the wrong way to read Rand, and unfortunately the opportunity for this misinterpretation is exaggerated rather than ameliorated by the cinematic adaptation.

My complaint about Rand in general is a minor one, she labeled and titled things poorly. Had only she had not been so overly confident as to call her system Objectivism. Randianism would have been just fine and arguably would have avoided many of her philosophical and or meta-physical shortcomings.

Selfishness is another word that Rand misuses in reference to her own ideas and characters. The romantic relationships between Rand’s characters do not reflect a strict definition of selfishness per se. The heroes of Rand’s novels are connected with regard to a common principle. Rather than awarding social approbation according to traditional social conventions (he’s so nice, she’s so hot, he’s so giving and caring), they award respect and admiration with regard to the real outcomes and influences of one another’s actions (Dagny runs one heckuva railroad). This is fundamentally a Smithian point – a methodological perspective that Rand borrows from economic science and in doing so she is an extremely talented writer in so far as she can articulate its complexity in the unconventional setting of fiction.

From this perspective the film suffers because society itself is a missing character. When one goes the long way through the written tome, she turns page after page of descriptive text about the state of Rand’s fictional world. Political drama, economic processes, union conflicts, etc. they are all described in detail with regard to how they effect the real populations of people out and about living within the world. Dagny’s incredible rails and Rearden’s nifty metals make these peoples’ lives better and the world itself a better place to live within. When one reads about what Rand’s heroes have done for the world, it is not as hard to see why one might get a hard on about it. Aside from a few swift montage sequences, this experience is relatively absent from the film.

Admittedly, I have no idea how such themes could have better been included.

Mike mofo’n Munger!

BAMF extraordinaire as usual!

The political law of the U.S. is a set of arbitrary, intrusive rules backed by overwhelming, irresistible physical force. It is the unavoidable implicatoin of the corrupt bargain made by those who think the alternative to coercive law is the Hobbesian state of nature. Letting people make their own choices is just not an option to you folks. So enjoy your police state, and STFU.


I agree with Munger as to the nature of the law, but I also doubt cops would spend much time shaking down children’s lemonade stand if there weren’t so many of them funded by so many dollars. Hard budget constraints and real resource scarcity make for a greater proportion of law enforcement resources to be used protecting against violence and property crimes relative to enforcing prohibitions and regulatory control. The better funded our police the more the police act according to the Public Choice interests of the state and the less responsive they are to the underlying preferences of our societal interests.

Militarization does not stop violence, it breeds crime.

Given my continual criticisms of contemporary criminal justice systems and the practices of mass incarceration, I am often confronted with the question, “what would you replace prisons with?”

This is a very confused and biased question. Simply put, I do not know what an ideal criminal justice system should or would look like in a free society – no one does. That is the whole point of the Hayekian perspective.

Secondly, this question demonstrates that the inquisitor is misunderstanding the argument I am trying to espouse. My claim is that the monopolization of legitimized force by government authority is more costly than it is beneficial. You do not ask a doctor what his proposal is to replace cancer.

Here is a great example. Business Insider via the NYT is reporting one million U.S. war veterans are currently in prison. After sharing on facebook, Robin Hanson chirped, “1 in 10 of all prisoners, wow!”

Pete Boettke recently explained well how militarization is not an ineffective response to various social problems:

The language of disaster and recovery efforts is one of centralization—a military effort is presumed to be required to tackle the urgent problem. But the militarization of compassion is not very effective in achieving improvement. As my colleague Chris Coyne (author of After War and a forthcoming book on humanitarian aid) suggests in his paper “Delusions of Grandeur,” imagine you asked the firemen responding to a raging fire at a corporate building to also coordinate the provision of medical supplies and treatment, oversee the reconstruction of the building, and then rebuild the company’s supply chain after the fire was extinguished and the building rebuilt. This is precisely what happens through the creeping militarization of humanitarian efforts.

Militarization is also not an effective response to violence. But it gets worse! Militarization itself is harmful and socially destructive.

The minarchist interpretation of classical liberalism that an exogenous monopoly on violence is necessary to limit the net amount of violence in society is false. I believe that the domestic practices of mass incarceration and the foreign policies of militarized nation building are providing the empirical proof of this thesis.

Leave the Facebook Kids Alone…

I support Pete’s praise of Cowen’s latest. For technological innovations to improve economic welfare the way standard macroeconomists intend, such developments must also carry real consumable returns and real employment effects. Cowen’s argument is straightforward, relative to what has been invested across industries in recent decades (especially by government) such returns are very low and fast running out.

Again I agree with Pete, this theme represents a wonderfully subversive libertarian argument. Tyler used to be more of an optimist, but now he sees the world as “very messed up” and it’s mostly the government’s fault. I also consider The Great Stagnation to present a subversively Austrian argument. Tyler is, after all, focusing upon the heterogeneous nature of the capital structure.

Many have criticized the Austrian perspective because it implies that members of the economy continuously get fooled by low interest rates and government subsidy? Why not ignore the new money? Why not innovate new institutional arrangements to avoid these effects?

Tyler writes about how much fun and enjoyment we get from the internet, but we are not fundamentally restructuring our lives or improving our real living conditions – we are more just goofing off. I perceive this phenomena as the unconscious expression of rational expectations at work. As government continuously messes up the structure of production by failing to pick winners and confusing financial signals, people’s willingness to hold wealth in traditional financial terms and traditional capital investments decreases. The economy is becoming more digital and more knowledge based in part because these forms of wealth are less subject to the unintended consequences of government meddling than the older more tangible sectors of the economy.

The cool thing about our new technological world is that the ability to hold alternative stocks of wealth in the form of social networks and social capital has become easier. The tragedy is that our regulatory, tax and monetary policies have labotomized the entrepreneurial spirit of our younger generations. There is almost no real opportunity to convert the stock of value held within online social networks into real consumable value or financial profit.

The under thirty crowd looks like a bunch of slackers to older generations. They spend so much time surfing the net and playing around on facebook instead of working hard and climbing the corporate ladder. Some think this is a problem with their work ethic or their culture. I say that’s just crotchety old people talk. The younger generation would rather surf the net because this is precisely their best rational strategy given the messed up environment that our public policies have created.

I propose that it is more difficult today than ever before in American history to grow wealth and actualize entrepreneurial endeavors from a starting point of zero. If you have a significant body of savings and investments, you can protect it and you can find investment opportunities to grow it. But if you are young and motivated and want to invest in ideas that you believe will be profitable in the future – high risk and high taxes await with only marginal relative benefits. The super wealthy do not have access to a better internet than the rest of us. They do not listen to better music or get to see better movies. The internet makes for a far more culturally egalitarian society. The only real difference between being super rich and just getting by is access to luxury goods like flashy cars, houses, clothing etc.

The tax system is set up to support the traditional financial sector. If you want to protect your money the only real opportunity is to max out your 401k. Which will probably be subject to inflation and business cycles. There is almost no incentive for young people to save and invest in real entrepreneurial endeavors.

This is why we are and will continue to stagnate. It is a hard pill for older generations to swallow, but it is true. Social networking via the internet is an advancement in human cooperation and coordination, and younger people are better at it because they have grown up in tandem with these technologies. It is their abilities and their ideas which should and must shape the capital structures of our future world.

In contrast, the electoral population who gets pandered to the most, are the middle aged and middle class. The shovel ready jobs our government tries to create are out of date and out of place with what society actually needs or wants. We don’t need traditional forms of infrastructure like bridges or roads to build our economy, we need MacBooks and internet ready Starbucks. We don’t need poorly designed American automobiles, we need more Craigslists and Bitcoins to replace our rusted out and failing social institutions.

The sad reality is that we live in a world where the people who assembled your Chevy Tahoe probably can’t set the timer on a Tivo and for some ungodly reason they also have more influence on public policy. Our younger generations are the very people who have the forms of knowledge most useful for our technological future – an innate ability to use telecommunications devices and navigate cyber networks. Yet they are the most systematically disadvantaged by our public policies.

Our globalized markets have produced a world with unparalleled affordable access to the necessities of life, but our public policies have created an incentive environment that breeds contentment rather than an enterprising spirit. The youth would rather invest in culture and social networks over money and businesses precisely because culture cannot be sucked away by our federal government and its composite elder interest groups. Our economy and the entitled parasites it hosts cannot sustain as our younger generations unconsciously tap out.