Category Archive: Government
Comments Off on Expert Answers on the Drug War: Highlights from Prof. Jeff Miron’s AMA
Last week, Professor Jeffrey Miron joined us on Reddit for an “Ask Me Anything” conversation as part of the Learn Liberty Reddit AMA Series.
The conversation focused on Dr. Miron’s 30+ years of study on the effects of drug criminalization. Check out some of the highlights below.
Comments Off on Reddit AMA with Professor Jeffrey Miron of Harvard University
The Learn Liberty Reddit AMA Series continues on Wednesday, August 9th, with renowned economist and professor, Jeffrey Miron, senior lecturer and director of undergraduate studies in the Department of Economics at Harvard University.
Dr. Miron has written over 100 op-eds for publications such as the New York Times, Washington Times, Boston Herald, CNN, Time, Huffington Post, The Daily Caller, and Newsweek. He has also written several books, including Drug War Crimes: The Consequences of Prohibition (2004) and Libertarianism: from A to Z (2010). You may recognize him as the star of one of Learn Liberty’s all-time fan-favorite videos: “Top Three Myths of Capitalism.”
Mark your calendar and join us for the conversation on Reddit, Wednesday, August 9th at 3:00pm ET, where you’ll have the chance to ask him anything!
UPDATE: The AMA is now live!
Comments Off on Here’s the best part about the anti-Trump #resistance
Have you thought about what it really means to protest Donald Trump and his administration’s policies?
Since his election, groups have cropped up to oppose his presidency, his policies, and his personality under #resist and #resistance.
Some movements started before the electoral college vote, hoping to sway electors to vote for Hillary Clinton and threatening to undermine an important electoral norm. Others have started Twitter accounts combating Donald Trump’s policies on climate change, dropping the very small fig leaf the scientific community typically dons when it seeks to claim it is objective. And women’s groups took the opportunity to protest the day after the election as well as create another protest dubbed “a day without a woman,” making heady claims about the solidarity of women against Trump.
While some may object to the divisive rhetoric associated with these movements — especially those who refer to Trump as #notmypresident — it is important to see that the right to resist rests at the core of American principles. The executive director of the ACLU hits the nail on the head: “Despite himself, Donald Trump has accomplished something beautiful — he’s awakened American democracy and reminded us that it’s ‘We the People’ who truly govern.” This concept reaches all the way back to the Declaration of Independence and arguably farther than that to the classical liberal par excellence, John Locke.
The Right to Resistance
The Founders created a document that served as more than just a declaration of war: it was also a justification for what the British called a treasonous revolt against the crown. Where the Founders previously argued for their rights as Englishmen, given rights by the government and due to their status as members of the British Commonwealth, the Declaration marked a change. In it, they claimed natural rights, ones they should enjoy without anyone’s permission and regardless of what sovereign territory they happened to occupy.
What was their argument? They claimed a right as a free people to stand up to an oppressive government — in their opinion, an illegitimate government. They claimed that a government is only legitimate if it secures the people’s rights to “Life, Liberty, and the pursuit of Happiness.” If a government “becomes destructive of these ends,” the people reserve the right to “alter or to abolish it.”
To our modern ears, this seems like a perfectly reasonable thing to say. Of course governments exist to protect the rights of the people. Of course the people can resist or overthrow their government if it fails in this, its most fundamental task. In the 18th century, however, no one made this claim against the government. Resistance or revolt came in the pursuit of better governments, but they did not come from a natural right to resist.
The claims of the Declaration represent a radical shift in the concept of rights, one founded in meaningful part on the philosophy of Locke.
Locke created what is referred to as an ahistorical state of nature. In essence, he created a new origin story for human beings, claiming that prior to the creation of society, humans lived freely and equally. As we develop, there come times of scarcity or difficulties securing our property. To address such problems, people consent to create governments that provide basic necessities: the security of your person and property.
A government’s legitimacy stems from its ability to provide those basic goods. If it fails in this respect — for whatever reason — the people reserve the right to overthrow it and create a new government. Locke claims there is no difference between an unjust king and a thief. And much like a thief is held accountable for his crimes, the people must hold the government accountable for any rights violations.
The Responsibility to Resist
The Declaration contains similar basic principles. In the eyes of the colonists, the British had violated their rights and refused to make amends. The Lockean understanding of natural rights facilitated the transition from British citizens seeking redress from their government to human beings overthrowing an illegitimate government.
Our rights stem from our status as human beings, not as Americans. We need to remind ourselves that we are free and equal. With that status, we have the ability to assert our rights and hold governments accountable when they violate or threaten to violate those rights. It is, after all, our responsibility to make sure the government protects our rights rather than violating them. This is why Patrick Henry said,
They tell us, sir, that we are weak; unable to cope with so formidable an adversary. But when shall we be stronger? Will it be the next week, or the next year? Will it be when we are totally disarmed, and when a British guard shall be stationed in every house? Shall we gather strength by irresolution and inaction? Shall we acquire the means of effectual resistance by lying supinely on our backs and hugging the delusive phantom of hope, until our enemies shall have bound us hand and foot? Sir, we are not weak if we make a proper use of those means which the God of nature hath placed in our power.
Americans retain the right to resist their government, thanks to efforts of the Framers to clarify what a legitimate government is and what we can do when it becomes illegitimate. More importantly, citizens have to understand what their rights are and consistently assert them against the government.
Comments Off on The problem with Trump saying “you’re fired” to transgender military personnel
Did you get embroiled in all the social media debates last week about Trump’s tweets concerning transgender people in the military? I sure did. Today, I don’t want to talk about the substance of those presidential tweets, but about their authority — or lack thereof.
Does the president even have the authority to ban transgender people from serving?
I received some reactions along the lines of “well, Truman desegregated the military, so while I oppose anti-transgender discrimination, I guess he does have the authority” or “he’s the commander-in-chief, so he can run the military as he sees fit.” People generally disposed to support transgender equality hated the tweets, and people generally opposed to transgender equality supported them.
I am not a lawyer, of course, so it did occur to me to ask lawyers to weigh in, and what I mostly heard was that there’s some precedent for granting the president this latitude.
My contention is that this is all a big mistake.
The Constitution plainly says that the president is the commander-in-chief of the armed forces. But it just as plainly says that the Congress is charged with making rules for the government and regulation of the armed forces (and of course, appropriating funds for them). So the Framers distinguished between commanding and constituting the military, not merely because they mention these functions separately, but because they assign one to the executive and one to the legislature.
Who’s the boss?
We have become used to thinking about the president as an all-purpose “leader” or “boss” (or worse, “ruler”), but this is plainly not how the federal government is meant to operate.
Congress is tasked with deciding whether to go to war at all, raising money to support troops, and making rules for their constitution and makeup. When all that is done, and the troops are in the field, the president commands them. That is the extent of the president’s “commander” function.
He cannot decide to “send in the troops” and he cannot decide who can and cannot serve. These are matters for the legislative branch.
That this idea seems unfamiliar to modern audiences tells us only that we have let our representatives in the legislature act irresponsibly and contrary to constitutional mandate.This kind of argument may strike some as moot, because, as my lawyer friends noted, we have years of precedent for Congress acquiescing to this. But it matters, as much as the very idea of “checks and balances” matters. You may recall that expression from junior high — it’s the idea that by separating the government’s executive, legislative, and judicial functions into separate branches of equal stature, none of them can amass too much power.
Overreach by one branch could be countered by the other two, with the result that power remains limited. The more limited the power of the government, the more securely individual rights are protected.
Being “fussy” about separation-of-powers issues is not mere nitpicking. The alternative is Caesar, Napoleon, and every third-world dictator. Checks and balances are vital to our not becoming a society ruled by that sort of despot.
This means there’s one other lesson to keep in mind: the ends don’t justify the means. We should be wary of endorsing a misuse of power just because we like the outcome, and should instead be sure it’s a legitimate exercise of power. The power of the president to do something I like is also the power to do something I don’t like.
And a stronger executive is probably an even greater danger to individual rights than the legislature can be. People of all political persuasions should work together to restore respect for the separation of powers.
Comments Off on Federalism is not unfair.
The United States is supposed to be a federal country, in which state governments enjoy exclusive authority to decide on policies not delegated to the central government, including policies on taxes and spending. Federalism is supposed to have many advantages: it allows state governments to experiment with policies and copy the most successful ones from each other, and it allows citizens to “vote with their feet” by moving to states whose policies they prefer.
But critics of federalism point to one big disadvantage: federalism, they say, is unfair.
This criticism particularly applies to the fiscal aspect of federalism — that is, the ability of states to choose their own tax burdens and spending levels. The argument runs like this: states have different tax bases per citizen (some are richer than others), so richer states can tax their citizens at lower rates than poorer states, offer more benefits and better public services, or both. In this view, federalism is unfair because it helps the residents of rich states and hurts the residents of poor ones.
I will argue, by contrast, that fiscal federalism actually helps people living in poor states more than people living in rich states.
Fiscal Equalization Programs
Even some scholars sympathetic to federalism acknowledge the force of the argument about fairness. Wellesley sociologist Josh McCabe argues that fiscal equalization programs are necessary to build political support for “highly decentralized federalism,” because without them, richer states will always be able to tax at lower rates and fund public services at higher levels than poorer states.
Now, one major disadvantage of equalization in a federal system is that it discourages states from letting their populations become rich. This is clearly true of Germany’s equalization system, which completely equalizes tax bases and even per capita spending levels across the Laender (states). As the economists Thomas Döring and Stefan Voigt put it, “The benefits and costs of political decisions no longer accrue at the same level” in Germany. So the state governments in Germany can feel free to give special interests the regulations they want without fear of deterring investment and reducing revenues.
Equalization through Migration
But there’s a more fundamental problem with the fairness argument for equalization: it ignores migration. Presumably, we care about the welfare of actual people, not the arbitrary geographic categories they live in. In a federal system in which people can easily move across state borders, migration accomplishes everything an equalization program might, without the negative side effects.
Think about a positive productivity shock, like the emergence of a new, highly profitable industry, which raises real wages in one state. Workers will move from other states to the state with the higher wages. The increase in the labor supply will return real wages to their normal level, at which point the migration flow will stop. Those who have moved have become better off, and even those who have remained in the initially poorer states are, at the end of the day, earning just as much as those in the initially richer state. Being able to pay a lower tax rate in a richer state will only accelerate this process — and ultimately eliminate the rich-state tax advantage.
So why don’t wages equalize across US states today? Two reasons. First, some places are just more desirable to live in than others. These places will tend to have higher home prices and rents and lower wages. Think about it: if I take some of my compensation in the form of higher amenities, I’m willing to earn a lower real money wage. For this reason, nice places to live that don’t have a lot of industry, like New Mexico and Maine, have low real wages, while places that are less nice to live in but do have industry tend to have high real wages (see figure 1).
But New Mexico and Maine residents surely don’t deserve to be subsidized simply because they prefer to take their compensation in a nonpecuniary form, just as North Dakotans and Bay Staters don’t deserve to be taxed for choosing to live in unpleasant places where the market demands their labor.
Figure 1: Real Per Capita Income by State, 2015
Source: Bureau of Economic Analysis.
Second, some places more strictly regulate housing development than others. States with tight development rules end up with a high cost of living and high per capita income, because low- and middle-income households move away from these states, not being able to afford to live there (see figures 2 and 3).
Figure 2: Residential Building Restrictions Raise the Cost of Living
Figure 3: Residential Building Restrictions Raise Nominal per Capita Income
Certainly, housing regulation is disrupting equalization through migration in the United States. An equalization program that specifically punished costly states and rewarded low-cost states might discourage excessive development restrictions and get migration flowing more freely again.
But housing regulation might end up being a self-correcting problem. As people flow from high-cost to low-cost areas, eventually the latter will enjoy more agglomeration economies that promote economic growth, and the high-cost areas will start to falter by comparison. By regulating housing so strictly, residents of coastal California, the Boston metro area, and elsewhere may be digging their own graves in the long run.
Not so unfair after all
So long as there’s a common market, federalism is fully consistent with converging incomes across geographies and does not benefit people living in rich places above those living in poor places. Just look at the European Union, where Ireland managed to achieve astounding growth rates beginning in the 1980s, despite initially lagging behind. The EU does have a small equalization program, but it’s not enough to significantly discourage member states from trying to attract investment. The most significant aspect of the EU is the common market that allows workers and investments to flow across borders. In a paper in Regional Studies, I found that the EU achieved even more convergence in per capita incomes after 1986 than did the United States and Canada!
It can be difficult to explain to people how fiscal decentralization actually benefits people living in poor states, so there will always be political demands for equalization programs. But the evidence suggests that “unfairness” is an unfair reason to oppose federalism.
 It wouldn’t accelerate this process if states depended primarily on taxes on investment, rather than labor, for revenue. But in fact, only Alaska derives a significant share of its state budget from taxes on capital investment.
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The skills and technologies the US government develops to control foreign populations can boomerang back and be used against Americans. For the full interview click here.
Comments Off on What your buying habits can tell you about big government
Why are so many of us unwilling to save enough for retirement or cut back on the Coke and cookies even though we really want wealth and health? A growing literature in psychology and behavioral economics indicates that we’re “predictably irrational,” as Duke professor Dan Ariely puts it. He believes that these studies show standard economic theory is false — we don’t always make rational decisions, and markets aren’t always self-correcting.
It’s natural to conclude from these sorts of observations that we ought to turn away from the market and toward the government to help promote our best interests.
But hold on a minute. Let’s suppose that consumers are indeed often irrational and that markets often fail to serve our long-term interests. Even so, we should resist leaping to the conclusion that alternatives to the market — specifically, political institutions — will do better.
Why not let the government call the shots?
To see why, remember that consumers and voters are the same people. You’re the same person at Target that you are at the polls. So if we’re irrational in the marketplace, then presumably we’re irrational at the ballot box. We should expect political behavior to be at least as short-sighted as economic behavior.
Take a simple case. Suppose you’re selecting between two candidates in the election: Imprudent Ian and Prudent Patty. Ian promises a heap of debt-financed spending, such that you’ll receive government-supplied benefits now without having to pay for them until later. Patty pledges to keep debt-financed spending low to secure the country’s long-term economic well-being.
All else being equal, we should expect Imprudent Ian to win, since voters will want the smaller-but-sooner payout over the greater-but-later payout. But these short-sighted decisions may work to our long-term economic disadvantage.
Suboptimal doesn’t equal undesirable.
The broader point is this: just because markets are suboptimal doesn’t make them undesirable. As the philosopher Henry Sidgwick puts it, “It does not of course follow that wherever laisser faire falls short governmental interference is expedient; since the inevitable drawbacks and disadvantages of the latter may, in any particular case, be worse than the shortcomings of private industry.”
By analogy, it would be a mistake to infer that the 1929 New York Yankees should have cut Babe Ruth from their team even though he failed to get a hit nearly two-thirds of the time. Batting .345 is pretty bad in absolute terms, but Ruth was nevertheless better than virtually all other hitters in the history of baseball.
We should judge institutions like we judge baseball players — we don’t ask how they stack up against the standard of perfection but rather how they stack up against the standard set by their feasible alternatives. Markets may turn out to be the least imperfect of our imperfect options.
Comments Off on Highlights from our Reddit AMA with Professor Michael Munger
Last week, Professor Michael Munger joined us on Reddit for an “Ask Me Anything” conversation as part of the Learn Liberty Reddit AMA Series.
Dr. Munger is an esteemed Professor of Political Science, Economics, and Public Policy at Duke University. He has authored/co-authored 7 books and over 200 scholarly articles. A long-time friend of the Learn Liberty project, he frequently contributes to our blog, and has starred in nine Learn Liberty videos.
Check out some highlights from the AMA below.
I think we have become more not less tribal. The Downsian conception of parties is as an information shortcut: people “choose” the party that on average is closer to most of their policy positions. But we seem now to have gone the other way: party allegiance is stronger, and prior. And THEN I infer my policy positions from my tribal allegiance. It really does suggest some problems for traditional rational choice theory. But that’s why Public Choice, and the work Bryan Caplan (for example) is so useful: we should expect that people are stupid about politics. But they aren’t stupid because they are stupid; they are stupid because they are smart!
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Prof. Abby Hall explains why government agencies have an “incentive to expand.” Dave Rubin asks if we can roll them back.
Comments Off on Rebellion or stability: Which makes a healthier nation?
As the American Revolution began, Americans threw off the rule of a tyrannical king but in their enthusiasm for their newfound freedom, they set up ineffective governments. For instance, they denied the federal government the power to tax, trusting the state legislatures to pay their share of the war costs.
Americans gave their state legislatures too much power and the governors too little. In turn, the people voted irresponsible legislators into office. The result: legislatures started gobbling up executive power, further concentrating it in their hands.
These imbalances made it onerous to fight the British and became even more problematic after the existential crisis of the war had passed. Many states suffered through economic stagnation. Legislatures enacted a litany of new regulations, only to change them soon after, creating chaos and confusion. The federal government could not pay its debts or its armed forces, leaving natives and the British in Canada free to accost settlers on the frontier. And states made conflicting treaties with European powers, increasing an already tense relationship among the newly formed union.
James Madison: Not so quick to ditch the British way
James Madison thought something radical had to change in order to save the fledging nation. He saw the need to reach back to British roots and create institutions that strengthened the federal government and weakened the state governments. This reflected his Burkean understanding of constitutionalism: old laws have a power that constantly changing laws cannot.
While Madison knew the institutions had to be republican, that did not stop him. He simply changed the definition of republicanism. Previously, many would have said that the people have to participate in legislating as they did in ancient Athens or ancient Rome (what we now call direct democracy). Madison claimed that any representative government and any level of suffrage counted as a republic in the modern age.
Opposing Madison’s approach, Thomas Jefferson embraced the political turmoil of the early USA. He was a strict Lockean contractarian who thought that the people are the “only legitimate fountain of power,” so the people’s representatives should have a great deal of power to change laws — including the power to call a constitutional convention.
Madison wrote Federalist 49 in an attempt to convince Jeffersonians of the value of stability. For Madison, laws had to endure in order to have full effect:
It may be considered as an objection inherent in the principle that as every appeal to the people would carry an implication of some defect in the government, frequent appeals would, in great measure, deprive the government of that veneration which time bestows on everything, and without which perhaps the wisest and freest governments would not possess the requisite stability.
Madison endorsed an enduring Constitution over the volatility associated with a more purely contractarian form of democracy that would require a constant recurrence to the people. He followed Burke’s rationale to a certain extent, seeing a need to maintain stability, forsaking some liberty.
Jefferson: Throwing shade at Shays
From Jefferson’s perspective, however, rebellions and tensions demonstrated the health of a nation. He scoffed at the alarm caused by a small uprising in Massachusetts, Shays’s Rebellion, claiming: “A little rebellion now and then is a good thing, and as necessary in the political world as storms in the physical.”
Jefferson took a more Lockean view, seeing the social contract as the only legitimate source of power for the government. He even went further than Locke, saying that “the dead have no rights” over the living. For that reason, every 20 years — which was a generation in the 1800s — the nation should have a constitutional convention allowing the “right to choose for itself the form of government it believes most promotive of its own happiness.”
We see in these radically differing opinions the two constitutional paths the United States had laid before it: one Burkean and one Lockean. The ultimate decision to take the Burkean path provided the United States with long-term stability. It did, however, come at the cost of a more Lockean version of liberty. Considering the result of the French Revolution, due to Madison’s steady hand, American likely avoided what sometimes comes with more liberty: chaos.
Comments Off on Did big government make us rich?
Why are Western countries like the United States and Germany so much richer today than other countries around the world? We desperately need an answer to this question — both to help us understand the human condition and to help us find practical steps we can take to alleviate global poverty.
One explanation for the success of the West is, in a word, liberty. Over the last few hundred years, classical liberal ideas such as the rights of man and the rule of law put constraints on European governments’ power, which resulted in a strong protection of private property rights. This resulted in meteoric economic growth, which delivered the modern cornucopia of wealth.
But classical liberalism itself had roots in earlier social structures. A school of thought that was prominent in the 1970s and 1980s held that classical liberalism could be viewed as the ideological formulation of living arrangements that the West had already enjoyed for centuries.
In particular, political authority in Europe dating back to the fall of the Roman Empire was fractured, overlapping, and concurrent. Europe in the middle ages and early modernity was characterized by a large number of competing polities with multiple sources of law. In a real sense, lawmakers and lawgivers had to “compete” for the right to adjudicate disputes. The multiplicity of legal codes and polities resulted in a wide “social space” in which de facto individual rights flourished. Classical liberalism, as a system of ideas, developed as intellectuals began to reflect on this lived experience.
It’s obvious why those who are predisposed to liberty would enjoy this explanation. Free countries get rich; unfree countries stay poor. But is it the right explanation?
Government Power and Economic Growth
The European liberalism hypothesis has recently been supplanted by another explanation — state capacity. In brief, this is the idea that economic development requires strong, centralized states to uphold the rule of law and provide crucial public goods.
“State capacity” thus means the ability to govern: to enforce, and perhaps create as well, the rules of the social game. The state capacity literature in economics, as advanced by prominent scholars such as Daron Acemoglu, Timothy Besley, and Torsten Persson, places heavy emphasis on a single, strong, central legal authority. In this framework, the fractured and decentralized legal authorities in medieval and early modern Europe are now seen as antithetical to economic development.
Now, it is undeniable that economic growth in the West did not take off until the rise of modern nation-states. But this stylized fact cannot bear the load the state capacity theorists place upon it. State capacity, as an explanation for development, is actually a black box.
The Black Box of State Capacity
To see why, consider the standard explanation for why private property and markets create wealth: Private property and markets are necessary for the market price system to exist, which coordinates the plans of consumers with the plans of producers. Market prices give producers the knowledge necessary to act in the interests of consumers in the form of profit and loss calculations. Market prices also generate good incentives: everyone prefers making more money to less, all else being equal.
This dual information-incentives argument is the kind of explanation the social sciences require, because it answers the question of how acting individuals can promote ends that none of them intended separately, such as economic efficiency and growth.
State capacity, by itself, addresses neither the information issue nor the incentive issue. While governance institutions obviously began centralizing at the beginning of the modern era, this is just a morphological description of what happened to institutions. On it’s own, that’s insufficient as a causal explanation.
Furthermore, the state capacity literature has a hard time dealing with a very troubling counterexample: the totalitarian states of the 20th century: like the USSR and China. These states had plenty of capacity, as evidenced by their ability to murder millions of their own citizens in acts of slaughter on a scale previously unimaginable. Needless to say, these kinds of things aren’t conducive to economic development.
So if modern nation-states are conducive to economic growth, it must be in conjunction with some other mechanism or group of mechanisms. This implies that whatever is “doing the work” of promoting economic growth, it is upstream of the creation of states.
If we want to understand the wealth and poverty of nations, we must find this elusive “something” and specify how it generates the incentives for those with political power to wield it in the broader social interest, and how they had the information to know whether what they were doing was working.
At its core, development economics is the search for these kinds of explanations. State capacity may or may not be a valuable steppingstone to an explanation, but it is not itself an explanation that social scientists should accept.
So it seems the old hypothesis — that the big ideas of classical liberalism created Western economic growth — is worth another look!
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Can economics tell us what kind of foreign policy will work in Syria or around the world?