Of Easter Eggs and Property Rights

I'm going to be on vacation this week, but I thought this post from last year was worth reprinting. Hope you enjoy it...

Apropos of the season, The Dallas Morning News recently ran an article describing city planners’ attempts to minimize the carnage normally associated with their annual Easter egg hunts. The article’s description of the event reads like a scene out of Mad Max: Beyond Thunderdome, with everyone from toddlers to overzealous parents pitted in a Hobbesian war of all against all as they scour the Dallas Arboretum for well-hidden marshmallowy treats.

"The people charged like wild animals," Karen Casteel of Carrollton said of one
of the egg hunts she attended some years ago at The Dallas Arboretum with her
daughter. "She's crying and a lot of little kids are crying. The parents are
hoarding the eggs. I'm telling you it was crazy."

Planners say they add new rules every year to try and keep the fields from becoming big mosh pits. They separate out the toddlers from the bigger children. They ask parents to stay off the field. They restrict the number of participants. They order thousands of extra eggs. They post caution tape to keep nonparticipants off the field. They hold the hunts for older children in different areas than the hunts for the babies and toddlers.

But apparently they still can't always keep the bad eggs off the field.

"We try desperately to not have parents on the field with children. For us, it creates a dangerous situation. Kids get knocked over. Kids whose parents obey the rules have a chance of getting run over," said Morgan.

It’s a frightening scene, and we can but hope that the rain forecast for this weekend will help keep this year’s Easter egg body count down to a bare minimum.

As I read the article, it struck me that the Easter egg hunt offers us a great lesson in the importance of property rights. My children are still quite young, and so far all of our Easter egg hunts have been held in our own backyard with just the family and a few close friends. The kids all know each other, and they’ve always enjoyed the activity. So far no one has been hospitalized (knock on wood).

Contrast our idyllic little back-yard family gathering with the chaos of the large-scale public Easter egg hunts. Continuing from The Dallas Morning News article,

She added that the biggest prize offered by Bedford is an Easter basket, and
there are 10,000 eggs for about 500 participants. "But you'd think there was
gold out there. We're at a loss," she said.

In-your-face egg gathering is not a new phenomenon. The Arboretum had a meltdown back in the late '90s, when thousands of candy-hungry children showed up and some older kids began gathering eggs before their event officially started.

"Lo and behold, those who are more aggressive don't wait for the whistle," said
president Mary Brinegar.

Those who understand basic property rights, of course, are not surprised by the Bedford experience. It’s a perfectly predictable illustration of the tragedy of the commons. When resources are either unowned or owned “in common,” the incentive is to take as much as one can, as soon as one can, before someone else does the same.

This lack of clearly defined property rights naturally leads to conflict, as everyone engages in a mad dash to fill their own baskets. Kids get knocked over, staff members get overrun by savage little candy junkies, parents engage in fisticuffs, and the very fabric of society is rent asunder so that little Susie doesn’t have to go home empty-handed and teary-eyed.

Granted, there’s a limit to how far one can stretch the analogy. The whole point of having an Easter egg hunt is the thrill the kids get from the hunt itself. If all the eggs were individually labeled with a particular child’s name to ensure they were picked up only by their rightful owners, you’d have the lamest Easter egg hunt ever. It would, however, help reduce conflict. The kids would be far less likely to trample each other to get the eggs, and if they did, the clear title to each egg would enable the event’s organizers to quickly determine which child was the aggressor and which was the victim.

And that, in an eggshell, is the importance of property rights. It may be possible to have relative peace and harmony in the absence of clearly defined property rights in a small tribal society (like that of the Smith household). But this requires a fair degree of interpersonal cohesion based on bonds of family or friendship. In a larger, more complex society (represented by the public Easter egg hunts), those bonds simply do not exist, and the lack of properly defined and enforced property rights inevitably leads to conflict and much wailing and gnashing of teeth.

This is why libertarians spend so much time focusing on and defending property rights. It’s not (just) because we’re selfish and don’t want anyone touching our stuff. It’s because we understand the crucial role property rights play in any harmonious and peaceful society – which is precisely the kind of society we’d like to help create.

Happy Easter, everyone. Let’s be careful out there.

Trade Wars and Rumors of Trade Wars

Today was a pretty good day. Nothing unusual, just your average Friday (which, granted, is always better than your average Monday). My cell phone’s alarm went off at 5:30am, as it does every day of the work week. I haven’t had an actual alarm clock in years. My phone handles all the time-telling and waking-me-up functions just fine, and it takes up less space on my nightstand. It was manufactured in China by a company headquartered in Europe.

I got up and went into the kitchen where I put some coffee from Colombia into a coffee maker that was manufactured in Taiwan by an American company. I then turned on my way-cool new LCD flat-screen television (made in Korea) to see what the forecast for the day would be. Then I opened up my laptop (which was made in China with software from the United States and other countries) to check my e-mail and my ever-dwindling bank account balance.

That done, I took a shower and then got dressed. Friday is casual day at the office, so I threw on a shirt made in Cambodia, a pair of jeans made in the Dominican Republic, and shoes made in China. I then kissed my family goodbye (my children were made in the United States, but my wife is an import from Bolivia). I then got in a car that was made in Minnesota by a Japanese company and headed to work. Glancing down at the gas gauge I saw that I was running on fumes, so I stopped by a service station owned by a Dutch company and bought a tank of unleaded gas that had been refined in Louisiana from crude oil drilled in Saudi Arabia.

Once I got to the office, I had a conference call with my team concerning a project we’ve been working on for the past few months. They’re scattered all over the place – the United States, Europe, Mexico, Brazil, and India. After the call was finally over, I needed another cup of coffee so I headed downstairs to the cafeteria and bought a blueberry muffin and a grande chai latté from the Mexican woman who manages the shop. Then I went back to my desk to touch base with another co-worker regarding a different issue. He’s in the UK.

Glancing down at my watch (which was made in Japan), I saw that it was lunch time. I went out and bought a turkey sandwich from a franchise headquartered in Connecticut. I also got some chips that were manufactured in Topeka, Kansas from corn that was probably grown in Nebraska. I topped it all off with a Dr. Pepper that was produced just down the road from me in Plano.

When I got back to the office, I read a news story reporting that the pressure is mounting on the Obama administration to launch a trade war against China. Evidently Paul Krugman doesn’t like the exchange rate between the Chinese yuan and the American dollar, so he thinks Washington should slap punitive tariffs on Chinese products. This will make Chinese goods more expensive, thus harming the American consumer who buys those goods. That’ll show the Chinese government what’s what and who’s who!

Brazil is taking similar measures against the United States because of American cotton subsidies. The US government takes money from the American taxpayer and then funnels it to politically-favored cotton growers. With all the taxpayer money that comes rolling in automatically, American growers can lower their sales price and trick the American consumer into believing he’s actually getting cheaper cotton. It’s a good scam if you happen to be an American cotton grower, but not so good if you’re an American consumer or a Brazilian cotton grower. The US recently lost a dispute with Brazil in the World Trade Organization over this practice, and now Brazil has been given the green light to slap tariffs on American goods sold in Brazil. In that way, the Brazilian consumer will pay more and get less, and that’ll show those stupid gringos what’s what and who’s who!

I have to admit that I’ve been puzzled by all this talk of trade wars in the news recently. Try as I might, I just can’t square all the government saber-rattling with my own personal experience. As I mentioned before, today was just another Friday. Nothing special, really, until you consider the fact that from the moment I woke up in the morning I was already cooperating peacefully with people from all over the world. Gas from the Middle East, coffee from South America, cars from Japan, food from the US, clothes from Asia, and a ton of stuff from China – all in exchange for the meager services I render to a European company with a branch here in Texas.

All in, there were probably millions of people involved with bringing me the goods and services I consumed in just one single, solitary day – most of whom I will never, ever see. They don’t know me, I don’t know them. We speak different languages and have different customs. We don’t look alike. If we were to meet face to face one day, they might not even like me. Nevertheless, the market mechanism enables us to get around all of that and still work together for mutual benefit. In most cases, our cooperation is completely anonymous and voluntary.

No one forced me to trade my time, labor, and skills with all of these other people. No one forced them to give me the products I enjoy. And none of us did any of it out of the goodness of our hearts. We did it because we’re human beings living in a world of scarcity. And because of that fact, we all have to work to survive. But over time people discovered that peaceful cooperation leads to higher standards of living, and we all get a lot farther in life by doing what we’re best at and trading for all the other things we need.

There are, without a doubt, tremendous variations in our standards of living. Some of the people I trade with are much poorer than I am. Nevertheless, they’re still better off trading with me than not – otherwise they wouldn’t do it. And some of my trades help people who already have much more than I ever will. Good for them - I’m left better off by engaging in the exchange, and so is my family.

Due in part to the benefits derived from these exchanges, I am not interested in politicians' or economists' plans to make me poorer by putting obstacles between me and whatever foreigners happen to be unpopular at any given time. Personally, I have nothing against Chinese people who go to work every day to make the things that improve my quality of life. Nor do I harbor any ill will against Colombians, Koreans, Japanese, Brazilians, Taiwanese, Dutch, Saudis, Mexicans, Brits, Bolivians, Europeans, Dominicans, Cambodians, Indians, or any of the other people here and abroad who do the same thing day in and day out.

So thanks but no thanks, Mr. Krugman. We’re not at war with the Chinese or any of the people who make the food, the clothing, the cars, the toys, and all of the other things we enjoy. Nor do we wish to be. These are not people from whom we need to be “protected.”

We’re getting along just fine.

Image from here.

Throw Away the Key

The “Enemy Belligerent Interrogation, Detention, and Prosecution Act of 2010” (S. 3081) was recently referred to the Senate Committee on the Judiciary. On its surface, the bill gives some structure and guidance for the treatment of suspected terrorists, presumably to eliminate the sort of ad-hoc, back-and-forth approach that we’ve seen in the news lately with regard to where suspects will be tried and by whom. The bill’s sponsors are John McCain (R-Arizona), Joe Lieberman (I-Connecticut), James Inhofe (R-Oklahoma), Scott Brown (R-Massachusetts), Roger Wicker (R-Mississippi), Saxby Chambliss (R-Georgia), George Lemieux (R-Florida), Jeff Sessions (R-Alabama), and David Vitter (R-Louisiana).

Whatever one might think of the merits of S3081, it is in no way, shape, or form a small-government approach. If passed, the bill would grant the Executive branch the power to throw anyone it suspects of aiding or participating in terrorist organizations into a military prison indefinitely, without being convicted of a crime or being afforded legal representation. As one might expect from a bill sponsored almost exclusively by Republicans, it’s a “lock ‘em up and throw away the key” approach that would do little to protect Americans from terrorism. It would, however, greatly enhance government power and pose a serious threat to our civil liberties.

Here are some key passages from the bill:

Whenever within the United States, its territories, and possessions, or outside the territorial limits of the United States, an individual is captured or otherwise comes into the custody or under the effective control of the United States who is suspected of engaging in hostilities against the United States or its coalition partners through an act of terrorism, or by other means in violation of the laws of war, or of purposely and materially supporting such hostilities, and who may be an unprivileged enemy belligerent, the individual shall be placed in military custody for purposes of initial interrogation and determination of status in accordance with the provisions of this Act.

• As the neocons have been telling us ever since 9/11, the entire world is their battlefield. This clause would require anyone suspected of supporting or engaging in hostilities against the US to be placed in a military prison.

A individual who is suspected of being an unprivileged enemy belligerent shall not, during interrogation under this subsection, be provided the statement required by Miranda v. Arizona (384 U.S. 436 (1966)) or otherwise be informed of any rights that the individual may or may not have to counsel or to remain silent consistent with Miranda v. Arizona.

• This clause, presumably, is meant to assuage the talk radio crowd that foams at the mouth whenever suspected terrorists are Mirandized, a reaction driven by their belief that foreigners shouldn’t be “granted” the Constitutional rights American citizens enjoy. This position, however, reveals a troubling big-government interpretation from the allegedly small-government crowd. Rights are not granted by the US Constitution. The Constitution recognizes and ostensibly protects the rights that all people have by virtue of their humanity. Rights are not bestowed upon us by a benevolent government as a reward for good behavior. The Constitution spells out how the federal government is supposed to behave, and that behavior is not dependent on the nationality of the people involved.

The high-value detainee interrogation group responsible for interrogating a high-value detainee under subsection (b) shall make a preliminary determination whether or not the detainee is an unprivileged enemy belligerent. The interrogation group shall make such determination based on the result of its interrogation of the individual and on all intelligence information available to the interrogation group.

CRITERIA FOR DESIGNATION OF INDIVIDUALS AS HIGH-VALUE DETAINEES- The regulations required by this subsection shall include criteria for designating an individual as a high-value detainee based on the following:

(A) The potential threat the individual poses for an attack on civilians or civilian facilities within the United States or upon United States citizens or United States civilian facilities abroad at the time of capture or when coming under the custody or control of the United States.

(B) The potential threat the individual poses to United States military personnel or United States military facilities at the time of capture or when coming under the custody or control of the United States.

(C) The potential intelligence value of the individual.

(D) Membership in al Qaeda or in a terrorist group affiliated with al Qaeda.

(E) Such other matters as the President considers appropriate.

• Who makes the determination as to whether a suspect is an “unprivileged” enemy belligerent? Functionally the same people who threw him in a military prison in the first place – and certainly not a jury of his peers. What constitutes reason to believe someone might be a belligerent? Whatever the President says.

No funds appropriated or otherwise made available to the Department of Justice may be used to prosecute in an Article III court in the United States, or in any territory or possession of the United States, any alien who has been determined to be an unprivileged enemy belligerent under section 3(c)(2).

• This would settle the “Do we try him in New York or Gitmo?” question once and for all. The answer is Gitmo.

While a final determination on the status of an alien high-value detainee is pending under section 3(c)(2), the alien shall be treated as an unprivileged enemy belligerent for purposes of subsection (a).

• Guilty until proven innocent.

An individual, including a citizen of the United States, determined to be an unprivileged enemy belligerent under section 3(c)(2) in a manner which satisfies Article 5 of the Geneva Convention Relative to the Treatment of Prisoners of War may be detained without criminal charges and without trial for the duration of hostilities against the United States or its coalition partners in which the individual has engaged, or which the individual has purposely and materially supported, consistent with the law of war and any authorization for the use of military force provided by Congress pertaining to such hostilities.

• Citizens and non-citizens alike placed in military prison on nothing but the say-so of a few members of the Executive branch and kept there without trial, without ever being convicted of a crime by a jury, until such time as no one tries to harm the United States or its allies ever again.

The term `hostilities' means any conflict subject to the laws of war, and includes a deliberate attack upon civilians and civilian targets protected by the laws of war.

• The last time Congress declared war was 1941.

UNPRIVILEGED ENEMY BELLIGERENT- The term `unprivileged enemy belligerent' means an individual (other than a privileged belligerent) who--

(A) has engaged in hostilities against the United States or its coalition partners;

(B) has purposely and materially supported hostilities against the United States or its coalition partners; or

(C) was a part of al Qaeda at the time of capture.

• Once upon a time these were all things that had to be proven in a court of law before sentencing was carried out. If this bill passes, the government will be able to skip a few steps.

Legend has it that long ago Republicans supported limited government because they understood the danger of concentrating untrammeled power in the hands of a few. Those days have been lost in the mists of time. Today, the Republican party has no fear whatsoever of empowering the government to lock up anyone (citizen and foreigner alike) for life, based on nothing but unproven suspicions or “such other matters as the President deems appropriate.”

So on the one hand, Republicans profess to believe that the government is too inept, bureaucratic, and/or corrupt to run health care, banks, or car companies. On the other hand, they believe that the very same government will perform admirably, competently, swiftly, and justly as long as it’s prosecuting the “war on terror.” Keystone Kops one day, Jack Bauer the next.

But perhaps they’re correct when they tell us that “9/11 changed everything!” This bill certainly supports that view. It would change everything - for the worse. Perhaps the Enemy Belligerent Interrogation, Detention, and Prosecution Act makes sense if one really believes that the terrorists “hate us for our freedom.” If that’s the case, then it’s an easy fix. Just eliminate freedom, and no one will ever attack the United States again. That seems like a mistaken view and a Pyrrhic victory to me, but this bill is at least consistent with that analysis.

But a word of caution for the “conservatives” who support this “throw away the key” approach to dealing with suspected terrorists. The key you throw away may be the key to your own liberty.

Morituri Te Salutant

According to Roman historian Suetonius, in 52 A.D. a group of captives who were slated for execution in the arena called out to Emperor Claudius, “Ave, Imperator, morituri te salutant!” (Hail, Emperor, those who are about to die salute you!) Perhaps House Democrats are familiar with the phrase. If not, they should brush up on their classics quickly, because they are being ordered to pass the Senate version of the Government-Run Health Care and Nationalization Act of 2010, and probably to sacrifice their own political careers in the process - all for the greater glory of Obama and the Holy Big Government Empire.

That’s no small request. A recent Rassmussen poll indicates that 43% of Americans surveyed favor whatever it is they think is in the current government health care plan, while 53% oppose it. This means that John McCain was more popular in 2008 than President Obama’s signature issue is now. In order to “move the process forward,” House Democrats up for re-election in November are being reassured that if they just pass the Senate version now, whatever problems they have with the bill will all be ironed out at some unspecified later date – after President Obama has signed it into law.

Despite these reassurances, some Democrats are balking at the idea. Representatives Ben Chandler, Luiz Gutierrez, Stephanie Herseth-Sandlin, and Heath Shuler have all indicated that they will vote against the plan. If I didn’t know any better, I’d say they weren’t willing to take the President at his word. But why should they be so skeptical? Obama has kept all of his promises so far, hasn’t he? Aren’t the troops going to be out of Iraq within sixteen months of his inauguration? Hasn’t every debate about health care been televised on C-SPAN? Hasn’t every bill been posted on the internet for five days prior to any votes? Didn’t he expel all the lobbyists? So what’s the problem?

Sure, the bulk of American voters are against government-run health care in general, and 57% believe that the current plan will do even more damage to an already-battered American economy, but that just means that Obama hasn’t explained it clearly enough yet. There will be plenty of time for that later. Just pass the bill over the objections of the American people now, and everything will turn out fine. Once gun-run health insurance has become the law of the land, Obama (cross his heart and pinkie swear) will work night and day to explain how the same federal government that is bankrupt can afford to take on the spending of one-sixth of the entire US economy. And he’ll also go over in painstaking detail how the government that pays its employees more than their private-sector counterparts, runs trillion-dollar annual deficits, and can’t account for at least $9T on the Federal Reserve’s books is going to make health insurance cheaper and more efficient.

Hmm…when I say it out loud like that, it does sound a little suspect. But theirs is not to reason why. Theirs is but to do and die in November. I’m sure Obama of all people understands that no politician likes to lose an election. Being forced out of office and having to look for honest work instead is a horrifying prospect, but I’m sure there’s plenty of dishonest work to go around in Washington even after a defeat at the polls. The good little soldiers who go along with this plan and then fall in the mid-terms will still manage to land on their feet.

And ultimately it’s all just a question of perspective. Those few reluctant Democrats simply need to adjust theirs a bit, and look at the issue not from their own self-interested point of view, but from the self-interested point of view of the real power brokers in Washington. Sure, the Democrat party may suffer a significant defeat this November, but that’s a short-term sacrifice for long-term gain. Once Obama throws the last spanner into the works of the private health insurance machine, he will have finally broken it once and for all. At that point - no matter what is or isn’t in the text of the bill, no matter what anyone says about being able to keep your existing health insurance plan - the government system will be the only one that remains. This will further cement Americans’ dependence on government, and amplify their demands for ever-increasing wealth redistribution. Clearly, that works to the Progressives’ long-term advantage, despite whatever short-term setbacks they may have to endure. Supporters of the omnipotent state have always wanted government to control our lives from the cradle to the grave, and what could be more cradle-to-grave than government health care?

So Representatives Chandler, Gutierrez, Herseth-Sandlin, and Shuler, here’s your Latin 101 lesson for today. Repeat after me, “Ave, Obama! Morituri te salutant!”

The Fed's Better News

Last June I posted an entry titled “The Fed’s Good News,” in which I commented on the shocking growth of the money supply, which had literally doubled in the eleven months leading up to that point. My shock was compounded by the fact that, despite the Fed’s own published numbers and graphs, Ben Bernanke made the laughable assertion that inflation was under control. Bernanke’s comments were accepted at face value by the AP and were even being spun as good news, presumably because no one at the AP understands what inflation is. Instead of recognizing inflation as an increase in the money supply, the crack reporters who make a living covering the economy think that inflation is merely a general increase in prices. In doing so, they mistake the symptoms of inflation for the thing itself.

So imagine how excited the AP must be today, in light of the Fed’s even better news. In the eight months since my previous entry, the Fed has continued to increase the money supply by an additional 25%! Does this mean that the US economy is now 25% more robust and productive than it was last summer, and that all that extra money is needed simply to maintain price stability? Perhaps, but that seems like the kind of thing we’d have heard about in the news.

No, the “additional liquidity” is not needed to grease the wheels of actual productive economic activity. It was needed so the Fed could buy $53.6 billion in securities of the government-issued variety. Where did the Fed get $53.6 billion? Did it host a bake sale? Did the regional Fed governors don bikinis and wash cars? No, they didn’t engage in anything quite that productive. Instead, they created the money out of thin air and used the newly created proceeds to buy the Treasury’s debt. Basically the Fed wrote a check that had no previously accumulated capital behind it to purchase an IOU from the government to be paid back from future taxation. In government circles this is called “monetizing the debt.” In criminal circles it’s called “laundering money.” They’re functionally one in the same, but you can rest assured that Bernanke won’t be facing any jail time for his part in the caper – even though his activities are far more harmful to society than anything the mob does.

The effect of this debt monetization will be the same as if the Fed had simply printed the money and allowed “Helicopter” Ben to have at it. The only difference between the two approaches is that debt monetization doesn’t actually require that any trees be cut down to print the new money. That’s the real extent of the Fed’s better news.