The perfect security of person and property

Regulation and taxation impose constant government assaults on Americans’ property rights, eroding their ability to make choices for themselves. James Fenimore Cooper put it, “There is getting to be so much public right, that private right is overshadowed and lost … danger exists that the ends of liberty will be forgotten.”

jean-baptiste-sayGiven how much private property rights now overshadowed, we should return to first principles about those essential underpinnings of voluntary relationships. One person worth reconsidering is Jean Baptiste Say, particularly on the 250th anniversary of his January 5 birth.

J.B. Say was the foremost French political economist in the early 1800s. An elaborator on Adam Smith’s Wealth of Nations and a vigorous defender of economic freedom, which arises from the defense of private property rights, his Treatise on Political Economy was used as a textbook in the United States.

Say’s chapter, “Of the right of property,” remains among the wisest, though widely violated, insights into property rights available today.

The right of property … [is] the most powerful of all encouragements to the multiplication of wealth.

The legal inviolability of property is obviously a mere mockery … where possession is rendered perpetually insecure, by the intricacy of legislative enactments, and the subtleties of technical nicety. Nor can property be said to exist, where it is not matter of reality as well as of right. Then, and then only, can the sources of production … attain their utmost degree of fecundity.

Who will … deny, that the certainty of enjoying the fruits of one’s land, capital and labor, is the most powerful inducement to render them productive? Or who is dull enough to doubt, that no one knows so well as the proprietor how to make the best use of his property? Yet how often in practice is that inviolability of property disregarded … upon the most flimsy pretexts?

The property a man has in his own industry is violated, whenever he is forbidden the free exercise of his faculties and talents, except insomuch as they would interfere with the rights of third parties.

Sacred as the property in the faculties of industry is, it is constantly infringed upon. …What robber or despoiler could commit a more atrocious act of invasion upon the public security?

Nothing short of the necessity of defending [social] order from manifest danger can authorize these or similar violations of individual right.

Taxation … must be proved indispensable to the existence of social order; every step it takes beyond these limits is an actual spoliation; for taxation, even where levied by national consent, is a violation of property.

The right of property implies the free disposition of one’s own.

When public authority is not itself a spoliator, it procures to the nation the greatest of all blessings, protection from spoliation by others. Without this protection of each individual by the united force of the whole community, it is impossible to conceive any considerable development of the productive powers of man, of land, and of capital.

The poor man … is equally interested with the rich in upholding the inviolability of property. His personal services would not be available, without the aid of accumulations previously made and protected. Every obstruction to, or dissipation of these accumulations, is a material injury to his means of gaining a livelihood.

Civilized communities pursue and punish every invasion of property as a crime … the happy effects, resulting from the right of property, are more striking in proportion as that right is well guarded by political institutions.

As Larry Sechrest noted, J.B. Say was “precise and yet as simple as possible, so that any literate, reasonably intelligent person can comprehend his meaning.” However, Americans have been governed by violators of those principles, because “agents of public authority … can enforce error and absurdity at the point of the bayonet.” And the results have been far worse than if we had followed his understanding. In Say’s words:

Of all the means by which a government can stimulate production, there is none so powerful as the perfect security of person and property, especially from the aggressions of arbitrary power. This security is itself a source of public prosperity.

Gary M. Galles is a Professor of Economics at Pepperdine University, a Research Fellow at the Independent Institute, an Adjunct Scholar at the Ludwig von Mises Institute and a member of the Foundation for Economic Education Faculty Network. His books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013).

Violating the Constitution that created it

The political left’s responses to Donald Trump’s surprise Electoral College victory has led to many proposed “improvements” in that institution, ironically illustrating one of the main issues determining the outcome — what philosophy would guide judicial appointments.

Trump indicated that he would appoint justices that would honor the Constitution as the supreme law of the land. That would comport with our founders, expressed in Federalist 78, that “It will be the duty of the judicial tribunals … to guard the Constitution and the rights of individuals.” That was at odds with Hillary Clinton’s intent to appoint “living Constitution” jurists, who prefer subsequent judicial interpretations they like over the Constitution itself, whenever they conflict, effectively re-writing the Constitution.

So left-leaning legal scholars have illustrated their preferred means of Constitutional redefinition to produce their desired results via Electoral College “reform” proposals.

Kenneth Jost, author of the Supreme Court Yearbook, argues, “The electoral college is enshrined in the Constitution, but that doesn’t make it constitutional.” He arrives at that internally inconsistent conclusion because “The Supreme Court established the principle — ‘one person, one vote’ — in 1964.” But that is not in the Constitution. It is a much later court invention, now being used retroactively to define part of the Constitution unconstitutional. The fact that our founders did not find that so when they wrote and adopted the Constitution is simply ignored.

University of California, Irvine, Law School Dean Erwin Chemerinsky, a leading liberal Constitutional interpreter, takes the same theme further. He argues that “the text of the Constitution is modified by its amendments,” so the Electoral College allocation of votes should be declared unconstitutional as violating the constitutional amendments [citing the 5th Amendment] that guarantee equal protection of the law.” This, despite the fact that adopters of the Bill of Rights in 1791 clearly found no unconstitutionality in the Electoral College from the 5th Amendment. Neither were earlier examples of popular vote winners who lost in the Electoral College asserted to be unconstitutional. Chemerinsky, as Jost, builds his case not on the Constitution, but upon “The Supreme Court long has held,” followed by some ruling that twists the Constitution and can now be interpreted as at odds with the Electoral College, plus the claim that the redefined constitutional meaning should now trump the Constitution.

Neither of these prominent challenges to the Electoral College relies on the Constitution. Arguments are instead grounded in previous “The Supreme Court has held” rulings that deviated from consistency with the clearly understood original meaning of the Constitution. This is, in fact, such a common approach in “living Constitution” jurisprudence that scholars have even compiled “worst of” lists, such as Robert Levy and William Mellor’s The Dirty Dozen: How Twelve Supreme Court Cases Radically Expanded Government and Eroded Freedom.

Should America be faithful to the Constitution, and the sharply limited federal government of enumerated powers it created to protect our freedoms from abuse at its hands, as the earlier, controlling precedent, or should we accept precedents that have already warped it almost beyond recognition? If the Constitution’s meaning is to be so easily changed (but only when the left finds it amenable to their ends) that even “emanations from penumbras” around other rights can effectively rewrite it, why did our founders spell out such a difficult process for changing it? And why should we respect precedents from 1964 or others years long after America’s establishment, on the basis that the Constitution must be upheld, when those precedents distorted it rather than upheld it? Surely that Alice in Wonderland approach to constitutional meaning is too weak a reed to throw out the Electoral College as violating the Constitution that created it.

Gary M. Galles is a Professor of Economics at Pepperdine University, a Research Fellow at the Independent Institute, an Adjunct Scholar at the Ludwig von Mises Institute and a member of the Foundation for Economic Education Faculty Network. His books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013).

Proposition 53 and Voter Power

One California ballot initiative getting far less attention than it deserves is Proposition 53. It would require statewide voter approval for revenue bonds (not now subject to voter approval) in excess of $2 billion.

The anti-Proposition 53 theme is that rather than giving citizens more power, it would reduce their power over local government. Their voter guide statement claims it “erodes your voice and the voice of your community,” allowing “voters in faraway regions the power to deny local projects your community needs.” Unfortunately, those claims, focus-grouped to trigger knee-jerk “no” votes, are deliberate distortions.

Opponents’ claims that Proposition 53 would lead local voters to lose control over local government ignore that it “does not apply to bonds sold by cities, counties, schools, community colleges, and special districts,” which involve the local issues voters care about most. And state general obligation bonds already require voter approval. What Proposition 53 focuses on are joint power agencies (JPAs) which combine different government bodies, because JPA revenue bonds do not require voter approval in California (though they do in some states).

Local voters already have very little power over JPAs, however, making the hobgoblin of lost local voter control imaginary. JPA boards include elected officials from government bodies involved (not all local) and sometimes, those in appointed government positions. Voters have no power over any appointed members. While they can vote for representatives to their local governments, those representatives will always be a minority on the board, so voters have no control over who will be selected as JPA board members. If voters are unhappy with those selected, even throwing them from office (for a generally low voter-visibility role) gives them no power over who will replace them. And while voters have very limited legal power to override JPA decisions (via an initiative within 30 days), its difficulty seldom makes it an actual option. With so little local voter power over JPAs, Proposition 53 cannot eliminate an appreciable amount of it.

High Speed RailThe Legislative Analyst’s conclusion that few projects would likely be subject to Proposition 53 similarly undercuts the lost voter power narrative. The two projects that will clearly be affected — the extraordinarily expensive bullet train and Sacramento delta water tunnel — are also instructive. Neither are really local projects, but ones that would substantially reshape California’s economic landscape, illustrating that JPAs allow policy making for state level issues, while evading the requirement of putting such bonds to a citizen vote.

If citizen control was the real issue motivating Proposition 53’s opponents, local good government and taxpayer groups would offer widespread support. But they do not. State and local taxpayer groups, in particular, favor Proposition 53, reflecting widespread belief that the projects in question can’t be justified and that citizens would be better served by Proposition 53’s securing of more voter power.

Further, virtually all the opponents of Proposition 53, supposedly on behalf of voter groups who favor it, come from groups who benefit from more government projects. Unions and their members who construct the projects (supported by other unionized government employees), those whose sales of goods and services will increase, as well as a host of consultants and lobbyists, all want more construction, regardless of whether those projects advance Californians’ well-being. Similarly, JPA board members, officials who select them, and Sacramento legislators gain power from evading voter approval requirements.

Anti-Proposition 53 attacks add other distortions, as well. Most notable is the complaint it doesn’t precisely define “project,” knowing that highlighting ambiguity will generate more “no” votes. Unfortunately, the greatest problem with such ambiguity is government’s ongoing efforts to weasel out of every constraint those it supposedly represents try to impose on it, amply illustrated by the bullet train saga. That is a problem of abusive government, which needs to be contained, not a reason to keep voters from having any effective power to defend themselves from its abuse.

Proposition 53 is an effort to improve Californians’ self-defense capabilities against government’s ability to impose harm on them. Those who will be better protected, and have seen through the subterfuges, back it by large margins, while opponents, who benefit even from projects that harm Californians, rely on focus-grouped, misleading claims to fool low-information voters. We can only hope that Proposition 53’s opponents have underestimated the gullibility of those they claim to serve.

Gary M. Galles is a professor of economics at Pepperdine University, a research fellow at the Independent Institute, adjunct scholar at the Ludwig von Mises Institute, and member of the FEE faculty network. His books include Apostle of Peace (2013), Faulty Premises, Faulty Policies (2014) and Lines of Liberty (2016).

What you don’t know hurts more in politics than markets

There is an old expression that “what you don’t know won’t hurt you.” Unfortunately, it is not true. Further, when it comes to economic misunderstanding, it is far more likely to harm Americans in their political choices than their market choices.

thomas-sowellThomas Sowell, in Knowledge and Decisions, laid out why. In market competition:

Economic knowledge need not be articulated to the consumer, but is conveyed — summarized — in the prices and qualities of goods. The consumer may have no idea at all — or even a wrong idea — as to why one product cost less and serves his purpose better; all he needs is that end result itself. Someone must of course have the specific knowledge of how to achieve that result. What is crucial to economic competition is that better and more accurate knowledge on the part of the producer is a decisive competitive advantage, regardless of whether the consumer shares any part of the knowledge.

In political competition, however:

Political knowledge is conveyed by articulation, and its accurate transmission through political competition depends upon the preexisting stock of knowledge and understanding of the receiving citizen. … In political competition, accurate knowledge has no such decisive competitive advantage.

In other words, as long as consumers can choose which suppliers’ goods better satisfy their preferences and situations, misunderstanding the processes involved does not keep them from being well-served by market competition. In contrast, voters must understand how things will actually work to evaluate politicians’ promises.

In markets, “prices convey effective knowledge of inherent constraints.” In contrast, “ballots do not … there are no constraints on my voting for … options simultaneously desired [but] unrealizable from the outset.” To make it worse, “no small part of the political art consists in misstating options and in trying to give them the appearance of simultaneously satisfying competing claims when they cannot be satisfied in reality.” Consequently, “The competition among political groups does not therefore bring to bear more accurate knowledge, as in economic competition, but promotes exaggerated hopes and fears.”

Today, for those who believe freer trade harms people rather than creating mutual gains, promises of “cracking down” or imposing higher tariffs on foreign products appears attractive. For those who believe that they earn less because “the 1 percent” earn too much, rather than that market incomes reflect added value provided to others, punitive taxation appears attractive. For those who think various workplace amenities, such as paid leave, come out of employers’ pockets, rather than from workers’ compensation packages (once there has been time to adjust), mandating those benefits appears attractive. For those who think higher minimum wages will benefit “the poor” with few other effects, rather than helping some and hurting others, including those who lose their jobs, hours worked, on-the-job training, etc., as well as all consumers in higher prices, they appear attractive. But in each of these cases, and many others, appearances are deceiving the ill-informed.

Thomas Sowell recognized that “Perhaps the greatest achievement of market economies is in economizing on the amount of knowledge needed to produce a given economic result.” However, he also recognized “That is also their greatest political vulnerability,” which we are seeing acted out before our eyes. The public, benefitting from vast and varying market arrangements without understanding them, can be lured by siren songs of something for nothing, because they don’t see how it undermines those irreplaceable voluntary arrangements which do reliably serve them.

Gary M. Galles is a professor of economics at Pepperdine University, an adjunct scholar at the Ludwig von Mises Institute, a research associate of the Independent Institute, and a member of the FEE faculty network. His books include Apostle of Peace (2013), Faulty Premises, Faulty Policies (2014) and Lines of Liberty (2016).

Trumped-up trickle-down


trump-clinton-debateIn the post-debate spinning, few noted Hillary Clinton’s pride in coining “Trumped-up trickle-down” economics to accuse Donald Trump of policy malfeasance. However, it is important, because every time anyone has ever used the term “trickle-down” economics (or its rhetorical cousins, “tax cuts for the rich,” “voodoo economics,” etc.) it has been a trumped-up, intentional misrepresentation.

No supply-side economist ever promoted “trickle-down” economics. That was invented by big government opponents of market freedom, just as Marx named capitalism to make it appear harmful rather than to correctly describe it.

Trickle-down is a defamatory characterization used to misdirect attention away from how voluntary market arrangements benefit all. Its central false premise is that taxing high-income earners less, leaving them more take-home income, benefits them alone. That is abetted by the mistaken zero-sum view that more income for some must reduce others’ incomes.

When people, however rich or poor, get richer through voluntary arrangements, they do not hurt anyone except those suffering from envy. Each party is better off, as they see it, or they would not participate. But changes in the measured distribution of income distort that fact.

If I create a massively successful software program, my measured income will increase, but every buyer will also gain because they face better options than before. This holds true even if their imperfectly measured share of total income is lower because my income has risen.

Unfortunately, forcible redistribution proponents’ campaigns to punish higher income earners (given rhetorical cover as paying their “fair share,” which is always “more”) diverts debate from the central question — are others helped or hurt? Worsening the productive incentives of high-income people induces them to do less for others with their resources, harming them.

Of course, if a rich person or a rich politician gets richer by rigging the political process, that is objectionable. But it is not a market failure, requiring a government solution. It is a government failure, which undermines the benefits competitive markets provide for all, whose solution requires removing government from the theft-and-transfer business, not expanding its role in it.

Supply-siders have always focused on improving productive incentives, and trying to make those improvements as durable as possible. That is why they focus on permanently reducing tax rates and rolling back regulatory burdens where their burdens are most adverse, because that is where it improves productive incentives most. The immediate measured benefits in financial markets will, it is true, go to those who currently own the assets affected by those changes. But treating that as solely a “tax giveaway to the rich” ignores that what is primarily rewarded is using the resources at one’s disposal to do more of what others value, and spending less time and effort trying to minimize unjustifiable burdens.

Improved supply-side incentives will increase labor supply by increasing take-home wages. It will increase rewards for acquiring new skills, for added capital investments to increase worker productivity, for secondary workers to enter the labor force, for in-migration of productive people from less-friendly tax and regulatory climates (or reduced out-migration) and for productive risk-taking. They will also reduce incentives for tax evasion, for tax cheating, and for buying things people desire less because of the distortion of tax deductibility. Each of those changes will benefit Americans. Doing the opposite, which criticisms of “trickle-down” economics are the rationalization for, harms Americans.

There is no reason to add “Trumped-up” to “trickle-down economics.” Such assaults have always been trumped-up distortions, trying to get people to look at incomes others have earned, and envy them, forgetting that, in competitive markets, they were earned by making others better off. And the pretend solutions not only violate Cicero’s millennia-old definition of justice as “giving every man his due,” they harm the very people whose votes they are trying to buy with the imagery of soaking the rich.

Gary M. Galles is a professor of economics at Pepperdine University, an adjunct scholar at the Ludwig von Mises Institute, a research associate of the Independent Institute, and a member of the FEE faculty network. His books include Apostle of Peace (2013) Faulty Premises, Faulty Policies (2014) and Lines of Liberty (2016).

Proposition 54 and the “We Can Do Whatever We Want Act”

TransparencyAmid the ballot initiatives gifting Californians with a 200-plus page voter guide is at least one sensible idea. Proposition 54 targets “gut and amend” (Ganda) bills, which are diametrically opposed to responsible legislative deliberation.

Ganda legislation takes “how a bill becomes law” civics book descriptions, then adds “not” at the beginning. In the race to beat the legislative end-of-session deadline, power brokers take bills that have cleared most legislative hurdles and replace them with completely different bills. Then they rush them through the minimal scrutiny of the last-minute frenzy (e.g., with multiple committee hearings in a single room in an hour).

This year’s appropriation of nearly $1 billion in pollution fee money is one example. Earlier illustrations include transforming a Silverlake Reservoir bill into requiring that gun buyback programs test weapons for criminal involvement (2014), California Environmental Quality Act exemptions for housing projects into increased alternative vehicle technology funding (2013), and pension reform into a fire prevention fee repeal (2012). The last three weeks of 2011’s session included 48 Ganda bills (my favorite: morphing a measure allowing tuberculosis information disclosure into one preventing local government bans of project labor agreements).

Unfortunately, bills sensible enough to command sufficient consensus can pass in daylight. Only legislation failing that test requires Ganda evasions.

That is what Proposition 54 addresses. It would require any bill to be both in print and available on the internet 72 hours before it could be enacted (with a ‘public emergency” escape clause). It would also intensify the sunlight on the sausage-making by mandatory videotaping of all public meetings, to be posted online within 24 hours, and by allowing any citizen to record any public meeting and use it without restriction.

Despite Proposition 54’s potential to protect Californians from legislative back-room bullying, it has opponents, particularly among power brokers. One rebuttal is, in essence, that despite missing deadlines or failing to get approval, sometimes legislatures “just need to act.” But that is not a reason; it simply assumes its conclusion — the powerful must be allowed to circumvent the rules whenever they decide it is necessary. That is why the Democratic Party opposes Proposition 54 with a preposterous rhetorical Ganda, twisting its protections against unwarranted legislative abuses into a claim that it would better allow “special interests” (i.e., those targeted for harm to fund legislative presents for others) to “block timely legislative action.”

The core problem is that for Ganda bills to benefit Californians requires several false things to be true.

The bill would have to be the Legislature’s business. Unfortunately, despite injecting itself everywhere, very little legislation can actually advance our general welfare. Benefiting some at others’ expense is another matter, but such bills deserve destruction, not greasing through.

Only the Legislature must be competent to deal with the issue. Where people can work things out for themselves, no legislation is needed, except repeal of what prevents voluntary private solutions. Those lauded by politicians for their wisdom during campaigns deserve the power to use it in their own affairs.

The problem must be too urgent to wait for ensuing terms. The sponsor must know how to implement an efficient and equitable solution. It must also come as a sudden surprise. But it is laughable to think of our legislators quickly developing real solutions to serious problems unrecognized just weeks before, and still needing to sneak them through.

Gut and amend survives only because it lets urgency insulate legislators from accountability. Capitol power brokers may “need” it for their purposes, but it harms citizens. That is why eliminating Ganda is important and also why all such legislative attempts have been killed. Proposition 54, which the legislature would morph into the “We Can Do Whatever We Want Act” at the last minute, given the chance, deserves support, in order to take such chances away.

Gary M. Galles is a professor of economics at Pepperdine University, a research fellow at the Independent Institute, adjunct scholar at the Ludwig von Mises Institute, and member of the FEE faculty network. His most recent books are Faulty Premises, Faulty Policies (2014) and Lines of Liberty (2016) 

Don’t bet the house against the law of demand

Unions22016’s edition of Labor Day followed a well-established tradition — unions claiming credit for every worker gain. Among their most common assertions, often incorporated in attributing negative wage trends to eroding union power, was that unions raise all workers’ wages. Unfortunately, unions retard rather than raise others’ real earning power.

Unions leverage special government-granted powers (e.g., unique exemption from antitrust laws) allowing current employees to prevent competition from others willing to do the same work for less, a form of collusion that, done by any business, would be legally prosecuted.

The higher union wages that result are then credited for raising all workers’ wages because they supposedly force up other employers’ wages to keep their workers from leaving for those better-paying alternatives. However, their claim cannot be true without violating the law of demand.

Higher wages from unions’ government-imposed monopoly power would push up others’ wages only if it increased the number of such high paying jobs. The reason is that employers need only outbid employees’ actual options to retain them. But by artificially forcing up the cost of hiring their workers, unions reduce rather than increase the number of such jobs offered by employers, reflecting the reduced output consumers will buy at the higher costs and prices that result. Instead of improving the alternatives available to non-union workers, they are worsened, as the displaced workers are forced into competition with others for non-union jobs.

Those displaced workers increase the labor supply for non-union employment. That pushes wages for all workers in those jobs down, not up. Consequently, union wage premiums do not benefit all workers, but come primarily from other workers’ pockets.

With only about 7 percent of America’s private sector workforce remaining unionized, union power therefore cuts the real incomes of 13 out of 14 workers. And since unions also hike government service costs directly, as well as through other cost-increasing policies (e.g., the Davis-Bacon Act and Project Labor Agreements) which big labor’s political clout has pushed through, all other workers are also harmed as taxpayers.

Unions have also used the same “big lie” technique of constantly repeating the opposite of the truth as fact in other areas. For example, aware that their monopoly power to exclude competing workers stops at the border, unions have long been the core backers of protectionism. They focus their attention on those getting special protection, then assert that their benefits will also spread throughout the economy to benefit others. But they ignore protectionism’s much larger harms — to all other workers who would have gained from expanded exports; to all other workers who, as consumers, have their access to lower cost and superior imports (and domestic production forced to compete with it) restricted; and to all other workers adversely affected by the reduction in real wealth and income produced by domestic protectionism and induced foreign protectionist responses.

Given that Labor Day has been considered the traditional start of “serious” presidential campaigning, it is an appropriate time to remember just how damaging unions’ “big lie” strategy is. Its illogical twist can derail accurate understanding of the harm unions impose on almost all Americans, offering a sobering reminder that “It ain’t ignorance that does the most damage; its knowing so derned much that ain’t so.” After all, when people know they are ignorant of important variables that bear on their decisions, they usually don’t bet the house on them, but when they think they know what is false to be true, they often lose the house. And a lot of American houses are on the line this November.

Gary M. Galles is a professor of economics at Pepperdine University, an adjunct scholar at the Ludwig von Mises Institute, a research associate of the Independent Institute, and a member of the FEE faculty network. His most books are Faulty Premises, Faulty Policies (2014) and Lines of Liberty (2016).

A Pattern for Revolt is better than a revolting pattern

2016 has already given Americans a truly unique presidential campaign, with more almost assuredly to come. Many have claimed to be revolted by it, for reasons ranging from obvious absence of decorum to apparent policy dementia. Sadly, though, attention soon leaves why we should be revolted, and what might hold out the promise of real improvement, to the latest political dirt and horse-race questions.

Pattern of RevoltA very instructive means to turn back toward such more impactful questions is easily available, however. It can be found in Leonard Read’s 1948 Pattern for Revolt. In striking contrast to what we are now witnessing, in which, except for occasional boilerplate obeisance to freedom, no one now proposes anything remotely near it, it offers examples of campaign statements that a true lover of liberty might offer, following Thoreau’s advice to “Let every man make known what kind of government would command his respect…[as] one step toward attaining it.”

Pattern for Revolt has been described as “strong meat, probably too strong for stomachs that have long fed on government pap and can’t imagine how they can get along without it.” Yet while it would be panned by panderers who love power far better than liberty, it is well worth reading for anyone “who loves liberty better than power.”

The all-authoritarian state marches on…not only unhampered and unchecked, but aided and abetted by an ever-increasing number of gravy-trained citizens.

The people [have] no choice except between power-seeking personalities and groups, each offering a superior administration of government-as-master. Such a choice…is no choice at all.

Party leaders…are asking today “What must we say and do to win votes?”…a truly liberal party…would have been asking “How can we liberate the individual from the tyranny of the State?”

The mere changing of parties or personalities is not important. The transfer of power…is important only if the ascending party has principles which it is important to substitute for the principles of the party in power.

Not only will [an] office-seeker resort to expediency to attain office, but…A man who seeks and secures public office…will try to make it a bigger and more powerful office. Government should not be so expanded…Men in government, therefore, should be those who aim at making government as unnecessary as possible. Contraction, not expansion, should be the aim.

Freedom is an assertion of man’s God-given free will, a resurrection of man from deadening arbitrary authority…The principles which brought America to the greatest heights of freedom yet known on earth are easily forgotten…[but] what will our collectivistic opponents be able to do in extending their authority over the people if the people subscribe to the principle of liberty?

Our assignment is to cultivate an understanding of freedom—in ourselves and in others.

In every field where arbitrary authority is imposed we shall inquire how it may be removed and replaced by a reliance on the initiative and enterprise of individual citizens. We must give to the art of self-government its American renaissance… We need patriots who will stand against wrong even though they cannot see the time when right will triumph.

As liberals and individualists…we do not want to be led…we do not want to “lead” by force…The only way to guard freedom is to remove, to destroy, unwarranted restrictions and coercion.

There was [once] a general acceptance of the idea that governments should have only limited powers and functions…Today, however…Opponents of freedom… have pre-empted the language of freedom so extensively that we how attempt to speak on behalf of freedom now find it difficult to convey our meaning.

Our plunderstorm economy is a matter of common knowledge…The first reason is a deep-rooted conviction on the part of millions that they have, by reason of their existence on this earth, a right to share in the property of others. The idea that this is a wholly immoral notion has never occurred to most of them.

The result is this group-thirst for political plunder…there is no cure at all except to re-establish in the minds of people the normal boundaries of personal right. The present situation calls for an understanding of where personal rights end and infringement on the rights of others begins.

In the hope of plundering more from others than others succeed in plundering from us, we have voted away the inestimable benefits for which government and law were originally instituted.

We founded our government…on the premise that the individual citizen has certain inalienable rights and that government and law should protect those rights …While it is perfectly obvious that we should restore government and law to their proper functions, limit them as we originally intended they should be limited, it is equally obvious that this is not impossible until false ideas are removed…As long as people entertain these false ideas about rights and property, so long will they seek their fulfillment though government and the law…The choice is only one of going on with the filthy business or getting out of it entirely.

In a variety of ways this nation has legalized plunder…we seek prosperity by the fruitless process of picking each others’ pockets.

Coercion is my first objection…No man has ever lived who has been big enough or competent enough to apply it, justly and wisely, to any responsible adult person, arbitrarily…Tyranny is only arbitrary coercion carried to its logical consequence.

Using governmental coercion to protect your goods from a thief is proper. Using it to protect a thief in the taking of your goods is improper. It makes no difference whether the thief be a thug or a legally recognized pressure group, using the democratic process.

Given freedom of opportunity, protection from fraud, violence and predation and a dependence for our welfare on our own initiative, we can and will look out for ourselves better than will any other person or any government agency.

[Government’s] failure…was their guarantee to meet “human needs” and their inability to meet the ever-growing demands and impossible responsibilities to which they thus exposed themselves.

The real reasons for most of the…recent distress inhere in the suppressions of liberty, in the sabotaging, wittingly or unwittingly, of the free competitive economy, which alone produces general prosperity. Re-establishing a free economy is the only road to progress…Free enterprise can be re-established only by the repeal of those laws, rules and regulations which impede it. I stand for their destruction.

I am a spokesman for the philosophy of government which is an American heritage… Nowhere else have men so successfully escaped from arbitrary authority…This American philosophy of government is premised on our countrymen being free men. This is what our birth as human beings gives us a right to be; that is what we ought to be; it is the object to which our Constitution commits us—all of us.

I do not desire to reorganize the lives of other people under the pretext of doing them good…It is now time to turn your hopes from this place on the Potomac as a source of livelihood. It is the most unproductive spot in these United States…May your federal government no longer be condemned for what it plunders from some. And may it never have applause because of the loot it bestows on others.

In a day-and–night contrast with our modern political cacophony of promises to violate moral principles and other people’s property on an indescribable scale, Leonard Read recognized that “Nothing is in our nation’s capital except that which is taken from individuals.” His Pattern for Revolt, though written long ago, offers both a bracing reminder of what has been lost and motivation to reclaim it. It merits attention from anyone who, “If given the opportunity…would revolt against all of those political devices and ideas incidental to government in the role of master.”

Gary M. Galles is a professor of economics at Pepperdine University and research fellow with the Independent Institute. His books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014), and Apostle of Peace (2013).

Helping The Poor By Hurting Them

Minimum WageIt appears that a $15 minimum wage will become law in California. Almost invariably, the rationale offered by proponents includes the assertion that it will help “the poor.” But, as labor economist Mark Wilson put it, “evidence from a large number of academic studies suggests that minimum wage increases don’t reduce poverty levels.
Beyond the host of logical and empirical issues involved in deciding whether a minimum wage bump will provide more income to “the poor” as a group, there is another ethical issue that never seems to get discussed. Even if low-income households did gain current income as a group in statistical studies, only individuals bear actual benefits or costs, and such wage mandates redistribute wealth away from many low-income individuals in the name of helping “the poor.” As a consequence, much of the desired help for the poor will actually come from others who are poor.
How can a requirement to pay low-skilled workers more harm low-income individuals? Some lose jobs. Others lose work hours. Further, for those who keep their jobs and hours, on-the-job training and fringe benefits will fall, and required effort will rise, to offset hiked wages. And higher current wages are often less valuable than what is given up, particularly on-the-job training that enables people to learn, and therefore earn, their way out of poverty. That is why labor force participation rates fall and quit rates rise when the minimum wage rises (an effect that will be heightened by the large magnitude of the current proposed hike), which is the opposite of what would happen if all workers who kept their jobs benefitted from higher mandated wages.Higher minimum wages will not only disadvantage the least skilled compared to automation and outsourcing possibilities, their increased cost will also force them to compete with more skilled labor. That explains why unions are the biggest backers of such measures — their members will gain from an increased demand for their services regardless of whether the poor gain or lose. But those with more limited skills will suffer from the undermining of their one big competitive advantage — a lower price. And those with the fewest skills, least education, and job experience will face the greatest employment losses now, as well as having rungs to advancement removed from their potential career ladders. These effects will be further magnified by the fact that employers pay far more than the minimum wage to those workers, through added costs for the employer half of Social Security and Medicare taxes, unemployment insurance taxes, worker’s compensation premiums, etc.

With a higher minimum wage, some of those low-income workers lucky enough to already have job experience and a work history will keep their jobs. Many others will simply find themselves to be unemployable. The main consequence will not be that the poor gain, but that some low-income households benefit at the expense of other low-income households.

Minimum wage hikes thus illustrate a very serious, though all-but-ignored issue. Even if poor people in the aggregate end up with higher incomes (a position far from established), it only means that one subset’s increased earnings will be at least somewhat greater that another likely to be even poorer subset’s decreased earnings, greatly harming many of them. And such government-imposed harm cannot be justified by the intent to help the poor.

Gary M. Galles is a professor of economics at Pepperdine University and research fellow with the Independent Institute. His books include Lines of Liberty (2016), Faulty Premises, Faulty Policies (2014), and Apostle of Peace (2013).

Mainstream Misdirection in SCOTUS Search


Photo courtesy Envios, flickr

Photo courtesy Envios, flickr

Antonin Scalia’s death has begun a new Supreme Court battle. And much of it will be expressed in terms of whether nominees are “mainstream” or not.

Senator Charles Schumer already demonstrated this pattern. In 2007, he said any Bush nominee “must prove … that they are in the mainstream rather than we have to prove that they are not,” but has now doubled down in the opposite direction, saying, “many of the mainstream Republicans, when the president nominates a mainstream nominee, will not want to follow Mitch McConnell over the cliff.”

Why so much mainstream rhetoric? To be in it sounds good; to be out of it sounds bad. But it rests on a distorting analogy.

The analogy equates mainstream to “normal,” or majority, views. They are then further equated to “correct” views. But while majorities choose representatives, our Constitution was far from majority rule (“mob rule,” to many founders). It put many choices off-limits to political determination, and subjected others to very stringent standards. In short, it defended liberty against government encroachment. This is especially critical in evaluating justices, whose primary role is preserving the Constitution against majority abuses.

The analogy presumes a speaker’s mainstream evaluation is accurate. But where the mainstream is and how far from its supposed center is acceptable are indefinable.

The core issue is not, then, about being in the current mainstream, but where that mainstream should be. Advocating respecting the Constitution as written, as Scalia was famous for, focused on that.

That is, the mainstream may be in the wrong place. It has clearly changed in our country, but only because some were out of the previous mainstream. Men being created equal, with inalienable rights against government abuse, is far from the once mainstream belief in the divine right of kings. And our Bill of Rights freedoms to speak, write and worship as we choose, and to have our property protected from government predation, were not always mainstream.

Federalist 78, America’s most famous statement of the judiciary’s role, reveals that the political mainstream has indeed jumped its constitutionally enumerated banks, arguing for re-routing it toward its original course: “A limited Constitution…can be preserved in practice no other way than through…courts of justice, whose duty it must be to declare all acts contrary to the manifest tenor of the Constitution void. Without this, all the reservations of particular rights or privileges would amount to nothing.”  Further, “whenever a particular statute contravenes the Constitution, it will be the duty of the judicial tribunals to adhere to the latter…to guard the Constitution and the rights of individuals.”

If the mainstream has moved from its original American course, only those now out of it can shift it back. For example, the now-common view that using government to rob Peter to pay Paul is acceptable means anyone acting to undo such policies would be outside today’s mainstream, though not that of our founders. As Jefferson said, “The majority, oppressing an individual, is guilty of a crime, abuses its strength, and…breaks up the foundations of society.”

In fact, “out of the mainstream” nominees are the only ones who might resist further expanding government encroachment or even reclaim eviscerated freedoms once taken for granted. In contrast, those recently advocated as mainstream have enabled “new and improved” encroachments.

Expanding the divide between the Constitution and current interpretation increasingly threatens our founders’ mainstream belief in liberty and the Constitution they designed to defend it. Consequently, advocates for the modern mainstream are opposing the mainstream that made America great. That is why Antonin Scalia fought vigorously for our founders’ understanding. It is also why Americans don’t need more justices from the modern mainstream, but more from its original channel.

Gary M. Galles is a Research Fellow at the Independent Institute and a Professor of Economics at Pepperdine University. His books include Lines of Liberty (2015), Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013).