Why Central Planning by Medical Experts Will Lead to Disaster

Why Central Planning by Medical Experts Will Lead to Disaster

A great deal of the coverage of the COVID-19 crisis has been apocalyptic. That is partly because “if it bleeds, it leads.” But it is also because some of the medical experts with media megaphones have put forward potentially catastrophic scenarios and drastic plans to deal with them, reinforced by assertions that the rest of us should “listen to the experts,” because only they know enough to determine policy. Unfortunately, those experts don’t know enough to determine appropriate policies.

Doctors, infectious disease specialists, epidemiologists, etc. know more things about diseases, their courses, what increases or decreases their rate of spread, and so on than most. But the most crucial of that information has been browbeaten into the rest of us by now. Limited and imperfect testing also means that the available statistics may be very misleading (e.g., is an uptick in reported cases real or the result of an increasing rate of, or more accuracy in, testing, which is crucial to determining the likely future course COVID-19?). Further, to the extent that the virus’s characteristics are unique, no one knows exactly what will happen. All of that makes “shut up and listen” advice less compelling.

More important, however, may be that in making recommendations to address COVID-19, those with detailed knowledge of the disease (the experts we have been told to obey) do not have sufficient knowledge of the consequences of their “solutions” for the economy and society to know what the costs will be. That means that they don’t know enough to accurately compare the benefits to the costs. In particular, because of their relative unawareness of the many margins at which effects will be felt, the medical experts we are being told to follow will likely underestimate those costs. When combined with their natural desire to solve the medical problem, however severe it might get, this can lead to overly draconian proposals.

This issue has been brought to the fore by the increasing number of people who have begun questioning the likelihood of the apocalyptic scenarios driving the “OMG! We need to do everything that might help” tweetstorms, on the one hand, and those who are emphasizing that “shutting down the economy” is far more costly than planners recognized, on the other.

Those who have brought up such issues (how long before they are called “COVID deniers”?) have been pilloried for it. Exhibit A is the vilification of President Trump for “ignoring the scientists,” such as the New York Time’s claim that “Trump thinks he knows better than the doctors” after he tweeted that “We cannot let the cure be worse than the problem itself.”

One major problem with such attacks is the substantial literature documenting the adverse health effects of worsening economic conditions. For just one example, an analysis of the 2008 economic meltdown in The Lancet estimated that it “was associated with over 260,000 excess cancer deaths in the OECD alone, between 2008–2010.” That is a massive “detail” to ignore in forming policy.

In other words, the tradeoff is not just a matter of lives lost versus money, as it is often portrayed as being (e.g., New York governor Cuomo’s assertion that “we’re not going to put a dollar figure on human life”). It is a tradeoff between lives lost due to COVID and lives that will be lost due to the policies adopted to reduce COVID deaths.

Larry O’Connor put this well at Townhall when he wrote:

Why should the scientific analysis of doctors solely focusing on the spread of the coronavirus carry more weight than the very real scientific analysis of the deadly health ramifications of shutting down our economy? Doesn’t the totality of the data make the argument for a balanced approach to this crisis?

This issue reminds me of a classic discussion of specialists and planning in chapter 4 of F.A. Hayek’s The Road to Serfdom. “The Inevitability of Planning” is well worth noting today:

Almost every one of the technical ideals of our experts could be realized…if to achieve them were made the sole aim of humanity.

We all find it difficult to bear to see things left undone which everybody must admit are both desirable and possible. That these things cannot all be done at the same time, that any one of them can be achieved only at the sacrifice of others, can be seen only by taking into account factors which fall outside any specialism…[which] forces us to see against a wider background the objects to which most of our labors are directed.

Every one of the many things which, considered in isolation, it would be possible to achieve…creates enthusiasts for planning who feel confident…[of] the value of the particular objective…But it is…foolish to quote such instances of technical excellence in particular fields as evidence of the general superiority of planning.

The hopes they place in planning…are the result not of a comprehensive view of society but rather of a very limited view and often the result of a great exaggeration of the importance of the ends they place foremost…it would make the very men who are most anxious to plan society the most dangerous if they were allowed to do so—and the most intolerant of the planning of others…there could hardly be a more unbearable—and much more irrational—world than one in which the most eminent specialists in each field were allowed to proceed unchecked with the realization of their ideals.

Panic has seldom improved the rationality of decision-making (beyond the “fight or flight” reaction to facing a “man-eater,” when to stop and think means certain death). However, much of media coverage has fed panic. But the illogical and intemperate media attacks against those questioning the rationality of draconian “solutions” drown out, rather than enable, objective discussion of real tradeoffs. And if “Democracy dies in darkness,” as the Washington Post proclaims, we should remember that it does not require total darkness. The same conclusion follows when people are kept in the dark about major aspects of the reality they face.

Reprinted from the Independent Institute.

Why America’s Founders Didn’t Want a Democracy

Why America’s Founders Didn’t Want a Democracy

In his book “Liberty in Peril,” Randall Holcombe challenges the presumption that liberty and democracy are complementary.

When I took history and government in school, many critical issues were misrepresented, given short shrift, or even ignored entirely. And those lacunae undermined my ability to adequately understand many things. Randall Holcombe’s new book, Liberty in Peril: Democracy and Power in American History, fills in some very substantial gaps, particularly with regard to American constitutionalism and how it has morphed from protecting liberty to advancing democracy at the expense of liberty. It does so with a host of novel and important insights rather than the disinterest generated by the books I suffered through in school.

The Role of Government

Holcombe gets right to the main point:

The role of government as [America’s founders] saw it, was to protect the rights of individuals, and the biggest threat to individual liberty was the government itself. So they designed a government with constitutionally limited powers, constrained to carry out only those activities specifically allowed by the Constitution. This book describes how the fundamental principle underlying American government has been transformed from protecting individual liberty to carrying out the will of the people, as revealed by a democratic decision-making process. (p. xxii)

Holcombe begins by laying out the case that “the Founders had no intention of creating a democracy, in the sense of a government that would be guided by popular opinion,” (p. 5) in sharp contrast to current “understanding.” And what makes the transformation from a central focus on liberty to a central focus on democracy that routinely invades liberty particularly significant is that

the powers embodied in America’s twenty-first-century democratic government are those that eighteenth-century Americans revolted against to escape. (p. 7)

Since I do not have the space to dissect all of the issues in Liberty in Peril, I would like to highlight a few particularly noteworthy things.

Holcombe starts with John Locke, which is a common place to start for those interested in advancing liberty. But he also calls attention to Cato’s Letters, which was one of the most influential—but now almost completely ignored—influences leading to the birth of the American Revolution. I have long been struck by how many of the insights our founders are credited with that actually trace back there (see the first major chapter of my book Lines of Liberty), and I echo Holcombe’s invitation for more people to discover it.

Are Liberty and Democracy Complementary?

Liberty in Peril challenges the typical current presumption that liberty and democracy are complementary.

The principle of liberty suggests that first and foremost, the government’s role is to protect the rights of individuals. The principle of democracy suggests that collective decisions are made according to the will of the majority…The greater the allowable scope of democracy in government, the greater the threat to liberty…In particular, the ascendency of the concept of democracy threatens the survival of the free market economy, which is an extension of the Founders’ views on liberty. (pp. 14-15)

This is reflected in the changing nature of elections.

At one time, elections might have been viewed as a method of selecting competent people to undertake a job with constitutionally-specified limits. With the extension of democracy, elections became referendums on public policy. (p. 20)

Consensus vs. Democracy

The book also challenges commonly held presumptions that our Founders wanted democracy. But while “the Founders wanted those in charge of government’s operations to be selected by a democratic process,” they “also wanted to insulate those who ran the government from direct influence by its citizens” because “[b]y insulating political decision-makers from directs accountability to citizens, the government would be in a better position to adhere to its constitutionally-mandated limits.” (p. 15)

“Thus, the Constitution created a limited government designed to protect liberty, not to foster democracy.” (p. 16) But the United States “consistently has moved toward more democracy, and the unintended side effect has been a reduction in liberty.” (p. 25)

Holcombe lays out issues of consensus versus democracy, with consensus illustrated by market systems in which all those whose property rights are involved agree to transactions, (p. 29) but in government, “a group is able to undertake more extensive collective action if it requires less consensus to act.” (p. 30) And the slippery slope is that

[t]he more citizens want to further national goals through government action, the less consensus they will demand in the collective decision-making process. (p. 33)

An In-Depth Study of the Constitution

Another notable aspect of Liberty in Peril is how far beyond the typical discussion of constitutional issues it goes, substantially expanding readers’ understanding in intriguing ways. For instance, how many Americans know of the Iroquois Constitution, which focused on unanimity? How many are aware of the Albany Plan of Union, drawn up in 1754, or how it was influenced by the Iroquois Constitution? How many know that a “clear chain of constitutional evolution proceeds from the Albany Plan of Union to the Articles of Confederation to the Constitution of the United States”? (p. 43)

How many have noticed that “when compared with the Articles of Confederation, the Constitution clearly less constraining than the document it supplanted…the Constitution did not limit the powers of government; it expanded them”? (p. 48) Yet,

[w]hile the authors of the Constitution did deliberately expand the powers of the federal government, they just as deliberately tried to prevent the creation of a democratic government. (p. 52)

How many are aware of what the Confederate Constitution tells us about the US Constitution and the drift from its principles since its adoption, especially because “the problems that the authors of the Confederate Constitution actually did address were overwhelmingly associated with the use of legislative powers to impose costs on the general public to provide benefits to narrow constituencies”? (p. 107)

The Constitution often is portrayed as a document that limits the power of the federal government and guarantees the liberty of its citizens…When compared to the Articles of Confederation, the Constitution places less constraint on the federal government and allows those who run the government more discretion and autonomy and less accountability. The adoption of the Constitution enhanced the powers of government and laid the foundation for two centuries of government growth. (pp. 66-67)

The Elitist Constitution

Holcombe’s section on “The Elitist Constitution” is fascinating. It lays out the case for why “[t]he Constitution devised democratic processes for collective decision-making, but the Founders had no intention of designing a government that would respond to the will of the majority,” (p. 70) as illustrated by the fact that citizens “had almost no direct input into the federal government as the Constitution was originally written and ratified.” (p. 70)

The section on the Electoral College is even more striking, as it stands in sharp variance from the presumptions behind almost the entire current debate over the National Popular Vote compact:

[A]t the time the Constitution was written the Founders anticipated that in most cases no candidate would receive votes from a majority of the electors. The Founders reasoned that most electors would vote for one candidate from their own states…and it would be unlikely that voting along state lines would produce any candidate with a majority of the votes. (p. 75)

Consequently,

The Founders envisioned that in most cases the president would end up being chosen by the House of Representatives from the list of the top-five electoral vote recipients…Furthermore, there was no indication that the number of electoral votes received should carry any weight besides creating a list of the top five candidates…The process was not intended to be democratic. (p. 76)

I found the issues discussed above to be of particular interest. But there is far more in the book to learn from, and often be surprised by, in comparison to what history courses usually teach.

America’s Evolution Away From Founding Values

Such issues include the evolution of parties, the influence of Andrew Jackson, who “fought for democracy, but, ironically, the result of making the nation’s government more democratic has been to expand the scope and power of government in response to popular demands for govern programs,” (p. 91) which “the Founders foresaw and tried to guard against by limiting the role of democracy in their new government,” (p. 91), the War Between the States (“the single most important event in the transformation of American government,” (p. 93) including the elimination of state succession as a real possibility, the Reconstruction Era amendments, the origins of interest group politics, the evolution of federal regulatory power, the evolution of the incentives of civil servants, the Sixteenth Amendment (income tax) as “a response to the demand for a larger federal government,” (p. 149) a different take on the 1920s, in which “[f]ar from representing a retreat from progressivism, the 1920s extended the now-established orthodoxy, (p. 154) added insight into the New Deal and the courts, Social Security as the “one New Deal program for the responsibility for fundamentally transforming the historical, constitutional role of the federal government,” (p. 175) how “The Great Society represents the ultimate triumph of democracy, because for the first time a major expansion in the scope of government was based on the demands of the electorate, with no extenuation circumstances” (p. 205), and far more.

In sum, there are very many good reasons to recommend Liberty in Peril. In it, Randall Holcombe provides not just a powerful and insightful look into crucial aspects of America’s evolution away from the principles of the revolution that created it but also an important warning:

Unfortunately, many Americans do not appear to fully understand these dangers as they continue to push the foundations of their government away from liberty and toward democracy. (p. 225)

Reprinted from the Future of Economic Education.

The Income Tax: Still the Root of All Evil

The Income Tax: Still the Root of All Evil

February 25 is a momentous day in American history. It is the day in 1913 the 16th Amendment, authorizing a federal income tax, took effect with the certification of Secretary of State Philander C. Knox.

Because of the crucial effects the income tax has had on America, one would hope that there would be some serious discussion of it in the media. But that hope is routinely disappointed.

But serious consideration of the effects of the income tax has occurred. For example, in his 1954 book, The Income Tax: Root of All Evil, Frank Chodorov showed how the abrogation of citizens’ property rights by the income tax leads to the expansion of government far beyond reason and corrupts Americans and America’s experiment in liberty in the process. And because Chodorov’s analysis brings us back to first principles, it is worth remembering his understanding of the Constitutional revolution it caused.

“A government is as strong as its income. Contrariwise, the independence of the people is in direct proportion to the amount of their wealth they can enjoy. We cannot restore traditional American freedom unless we limit the government’s power to tax.”

“Trace this wholesale infringement of our rights to the power acquired by the federal government in 1913 to tax our incomes—the Sixteenth Amendment…where the doctrine of natural rights has been all but abrogated in fact, if not in theory.”

“Getting something-for-nothing from government… this trade is often made, and… government is able to enter into it because of its income-tax revenues.”

“The government says to the citizen: ‘Your earnings are not exclusively your own; we have a claim on them, and our claim precedes yours; we will allow you to keep some of it, because we recognize your need, not your right; but whatever we grant you for yourself is for us to decide.'”

“The right of decision as to the disposition of your property rests in the government by virtue of the Sixteenth Amendment…it gives the government a prior lien on all the property produced by its subjects.”

“When the Sixteenth Amendment became part of the Constitution, the American political order, which rested on the axiom of inalienable rights, underwent a major operation.”

“The Constitution of 1789 barred the income tax. The Founding Fathers could not have put it in, even if they had a mind to, and there is no evidence that they had… They had come by freedom the hard way and they meant to hold on to it.”

“A people who remonstrated so vigorously over a measly tea tax could hardly have understood the idea of letting their pockets be picked. The suggestion would have sounded preposterous.”

“In the important matter of taxation, the Constitution quite definitely granted the new government very limited powers: import tariffs and excise taxes… As a consequence, it was a weak government, in the sense that it could not become bothersome; and the freedom of the people made them strong, so that wealth multiplied and the country flourished.”

“On the whole, previous to the Civil War the government of the United States confined itself to the business for which it was created, that of protecting people in the enjoyment of their God-given rights. It should not be forgotten that the Founding Fathers, agreeing with John Locke… thought of government principally as an instrument for safeguarding private property; and that was considered the prime business of the United States government until 1860. The dictum that “all men are created free and equal” held in the matter of taxes… No one, and no group, could be singled out by the government for special spoliation.”

“[The Sixteenth Amendment] was a revolution… every activity of government turned Santa Claus by the income tax.”

“Thus, the immunities of property, body and mind have been undermined by the Sixteenth Amendment. The freedoms won by Americans in 1776 were lost in the revolution of 1913.”

“The Sixteenth Amendment changed our country economically, politically, and morally… the Sixteenth Amendment has widened the area of government power, and as a consequence has reduced the area of liberty.”

“The Internal Revenue Bureau quite sensibly takes the view that every one of us is a potential lawbreaker, as far as the income-tax law is concerned… It has a war against society on its hands, and to win that war it must make use of the artifices of war, such as espionage, deception, and force… If this setting produces corruption, we must look to the law, not to the human beings involved, for cause.”

“Corruption… is simply the inevitable consequence incident to the operation of an immoral law. Of far greater concern is the use of income taxation to undermine the principles of republican government and to make a mockery of our tradition of freedom.”

“The income tax, by transferring the property of earners to the State, has disintegrated the moral fiber of Americans to such a degree that they do not even recognize the fact.”

“The income tax, by attacking the dignity of the individual at the very base, has led to the practice of perjury, fraud, deception, and bribery.”

“With the advent of income taxation, socialism was unavoidable…The more power the government exercises the less freedom will the people enjoy.”

“From the very beginning of the Union it has been customary for Congressmen to try to wangle out of the federal government some special privilege for their more influential supporters, or some appropriation of federal funds for spending in their states… However, before 1913…[but] The manna that fell from Washington was hardly enough to buy up the independence of the states or the votes of their citizens. No candidate for Congress could offer his constituents gifts paid for by the citizens of other states.”

“The ink was hardly dry on the Sixteenth Amendment before the heretofore picayune federal patronage began to blossom… The laws multiplied and the appropriations grew bigger… buying votes with political favors.”

“However, this weakness of democracy is only as dangerous as the amount of the citizens’ wealth the government has at its disposal. Before 1913 the American government was comparatively poor and political jobbery was correspondingly limited in scope. When the government acquired this power of confiscating the national wealth, the corruption was limited only by the amount that expediency would permit it to confiscate.”

“This centralization of power, which the Founding Fathers feared and sought to prevent by constitutional safeguards, is made possible only by income taxation… the atomic bomb that has virtually destroyed the Union.”

“Somehow, a Mississippian sees no immorality in forcing a Pennsylvanian to support his local economy…[but] the immediate beneficiary of federal grants to local projects is the politician who solicits it, and the ultimate beneficiary is the federal bureaucracy. Everybody else pays.”

“The American Revolution was unique in history… because it made possible the establishment of a government based on a new and untried principle, namely, that the government has no power except what the governed have granted it. That was a shift in power that had never occurred before.”

“A new American revolution was initiated in 1913, when the government was invested with the power to confiscate private property… that this power over the economy of the country put into the hands of the American government a means of liquidating the sovereignty of the citizenry.”

“As a result of income taxation, we now have a government with far more power than George III ever exercised… an inevitable consequence of income taxation. The citizen is sovereign only when he can retain and enjoy the fruits of his labor. If the government has first claim on his property he must learn to genuflect before it. When the right of property is abrogated, all the other rights of the individual are undermined, and to speak of the sovereign citizen who has no absolute right of property is to talk nonsense. It is like saying that the slave is free because he is allowed to do anything he wants to do except to own what he produces.”

Those who want others’ money for their purposes meet such complaints with the argument that “taxes are the price we pay for civilized society.” But as Frank Chodorov knew, Oliver Wendell Holmes said that over a century ago, before the income tax could dramatically increase citizens’ burdens, and give us less civilization in exchange.

Certainly, no tax on incomes got into the Constitution. That was unthinkable. A people that had but recently kicked over the traces because of taxes far less onerous would hardly have countenanced an income tax. They knew their freedom.

The general welfare is not improved by the increasing load of taxation. On the contrary, the upward climb of civilization is retarded in exact proportion to the levies.

Republished from fee.org.

Medicare for All: Administrative Costs Are Much Higher than You Think

Medicare for All: Administrative Costs Are Much Higher than You Think

Even before the new Congress has been seated, some emboldened progressives are pushing for votes to establish Medicare for all. Bernie Sanders argues that 70 percent of Americans favor it, so now is the time. Of course, that support plummets when people are told about its astronomical tax bill and its escalation in government control. But Sanders insists that it will happen because, as the Los Angeles Times described his argument, “the bottom line is that less money will come out of American pockets to pay for healthcare.”

Unfortunately for that argument, its basis — that turning from an already heavily regulated market in healthcare to far more government control would slash administrative costs — while widely repeated, is false.

The lower administrative cost song has been sung since before Hilarycare. And Paul Krugman asserted that administrative cost savings would pay for Obamacare’s expanded coverage. A policy literature provided apparent support. In general, people found Medicare’s administrative costs to be about 3 percent of its total costs, while they were roughly four times higher for private insurance. If that difference was real, it could finance substantially expanded health care delivery. But it actually reflects poor measurements.

Administrative costs as a fraction of total costs, the typical measure used, is highly misleading when comparing Medicare to other health insurance. Non-medical administrative costs are primarily a function of the number of beneficiaries, not the cost of their care. But Medicare patients are far older and less healthy — and more than twice as costly, on average, than younger people in private plans. But having less than half the health care costs per beneficiary more than doubles private insurance’s administrative cost as a percentage of total costs, than if the more accurate measure — administrative cost per beneficiary — was used. In fact, Medicare’s reported administrative cost per beneficiary has consistently exceeded that for private health insurance.

Adding to the mismeasurement is that many of the administrative costs of Medicare are not counted in comparisons because they show up in other agencies’ budgets. Social Security administers the collection of Medicare premiums. The IRS collects the taxes. Health and Human Services pays for building and marketing costs, as well as accounting and related concerns. Attributing those costs correctly would roughly double Medicare’s administrative costs.

Imputing administrative costs to the correct program and adjusting to far more appropriate per-beneficiary terms wipes out Medicare’s supposed four-to-one administrative cost advantage over private insurers, eliminating the “free money” Medicare for all supporters rely on in their promises to deliver health care for less. But there are still more biases tilting the scales away from what “everybody knows” about administrative costs.

Private insurance administrative costs are normally defined as premiums received minus claims paid, categorizing everything but claims paid as administrative. However, states commonly impose a premium tax (averaging roughly 2 percent) on health insurers, but not on Medicare. Though not administrative costs, that is how they are counted. Many private insurers (including mine) also offer disease-management and on-call nurse consultation services, which, even though they are medical, are counted as administrative because they do not generate claims.

Fraud, a very large and persistent problem for Medicare, also biases comparisons. If Medicare spends less to reduce fraud, it saves on measured administrative costs, and the unnecessary costs fraud causes are counted as medical costs. It looks more efficient. But because studies have found fifteen-to-one payoffs for fraud prevention investments, when private insurers do more to combat fraud, their administrative costs go up and their efficiency looks worse, even when they produce remarkable cost savings.

We should also remember that current taxpayers fund most of Medicare, imposing another large differential but unrecorded cost which economists call “excess burden.” Tax wedges between what buyers pay and what sellers receive eliminate substantial gains from trade as well as directly taking resources for government. One study concluded that even the “lowest plausible assumption about the excess burden engendered by the tax system raises the true costs of delivering Medicare benefits to about 20–25 percent of its Medicare outlays,” far higher than any estimate of private insurance administrative costs. Expanding into Medicare for all would balloon those costs as well as the direct cost of financing it.

Those pushing Medicare for all rely on the presumption that it will generate huge administrative efficiencies. That is such a useful basis for what they want to “sell,” that they don’t look into the heavily biased measures being used for their pitch. But as Ben Bernanke said, “Good decisions depend on good measurement.” And the biased measures being used result in garbage-in-garbage-out policy proposals which would sharply expand government’s commandeering of healthcare do the opposite to Americans’ well-being.

Reprinted from mises.org.

Peace, Harmony, and Free Trade: 10 Uplifting Quotes by Richard Cobden, the Shining Knight of Classical Liberalism

Peace, Harmony, and Free Trade: 10 Uplifting Quotes by Richard Cobden, the Shining Knight of Classical Liberalism

June 3rd marks the 1804 birth of “the Apostle of Free Trade,” Richard Cobden. He earned that name spearheading the campaign against England’s protectionist Corn Laws, whose repeal in 1846 spread liberalized trade through much of Europe. Some have said free markets owe him their existence.
Cobden recognized free trade as the key to creating material prosperity. But far more, he emphasized the moral superiority of free trade over the injustice of protectionism, in which government uses its power to help one group by unjustifiably harming others. Further, he saw that markets’ exclusively voluntary arrangements formed the basis of peace. As Jim Powell described the ensuing period of liberalized trade:

“Peace prevailed, in large part, because non-intervention became the hallmark of foreign policy…There was unprecedented freedom of movement for people, goods, and capital…Trade expanded, strengthening the stake that nations had in the continued prosperity of one another as customers and suppliers. While free trade was never a guarantee of peace, it reduced the danger of war more than any public policy ever had.”

In an era of occasional trade liberalization, but a great deal of protectionism for government favorites, along with too little reliable peace, Cobden still has much to teach us.

“The progress of freedom depends more upon the maintenance of peace, the spread of trade, and the diffusion of education, than upon the labors of cabinets and foreign offices.”

“Protection…takes from one man’s pocket, and allows him to compensate himself by taking an equivalent from another man’s pocket…a clumsy process of robbing all to enrich none, and ties up the hands of industry in all directions.”

“Holding…eternal justice to [include] the inalienable right of every man freely to exchange the result of his labor for the productions of other people, and maintaining the practice of protecting one part of the community at the expense of all other classes to be unsound and unjustifiable…carry out to the fullest extent…the true and peaceful principles of Free Trade, by removing all existing obstacles to the unrestricted employment of industry and capital.”

“Look not to the politicians; look to yourselves.”

“Free trade is a principle which recognizes the paramount importance of individual action.”

“Peace will come to earth when the people have more to do with each other and governments less.”

“[We] advocated Free Trade, not merely on account of the material wealth which it would bring to the community, but for the far loftier motive of securing permanent peace between nations.”

“Our principle…would bring peace and harmony among the nations.”

“People…must be brought into mutual dependence by the supply of each others’ wants. There is no other way of counteracting the antagonism of language and race…no other plan is worth a farthing.”

“I see in the Free-Trade principle that which shall act on the moral world as the principle of gravitation in the universe, drawing men together, thrusting aside the antagonism…and uniting us in the bonds of eternal peace…man becomes one family, and freely exchanges the fruits of one’s labor with his brother man…the speculative philosopher of a thousand years hence will date the greatest revolution that ever happened in the world’s history from the triumph of the principle.”

Richard Cobden knew that free trade was the natural result of self-ownership and voluntary arrangements, which produced justice by preventing government-sponsored robbery by some from others. He knew that it broke down privilege and barriers hindering economic progress and replaced them with mutually beneficial relations among participants. In a world far from that ideal, we should remember Cobden’s wisdom that emancipating commerce would expand both economic progress and peace.
Retrieved from fee.org.

Who Was the Founding Father of the Fourth Amendment?

Who Was the Founding Father of the Fourth Amendment?

February 5 marks the birth of the American who had the greatest hand in what became the 4th Amendment’s prohibition of unreasonable searches and seizures – James Otis. Unfortunately, “one of the most passionate and effective protectors of American rights” is too-little remembered today.

Otis’ efforts applied the celebrated English maxim, “Every man’s house is his castle” – or, as William Pitt said in Parliament in 1763, that “The poorest man may in his cottage bid defiance to all the force of the crown” – to the colonies, in resistance to Crown-created writs of assistance. They were broad search warrants enabling customs officials to enter any business or home without advance notice, probable cause, or reason, which Otis asserted were unconstitutional.

A young John Adams listened to Otis’ anti-writs oration, at which “the child’s independence was then and there born.”

Otis was an advocate general in the vice-admiralty court with responsibilities including prosecuting smuggling, to which Britain’s onerous trade restrictions had turned many. But when the Crown imposed writs of assistance to crack down, Otis resigned his post in protest and represented, without charge, Boston merchants’ efforts to stop the writs. For five hours he argued that they violated citizens’ natural rights, putting them beyond Parliament’s powers. A young John Adams listened to Otis’ oration, at which “the child’s independence was then and there born.”

Otis lost the case, but public wrath discouraged officials from employing the writs. Otis then became influential, his role growing with American grievances. He led the Massachusetts Committee of Correspondence in 1764. He wrote pamphlets. He argued against Parliament’s power to tax colonists, particularly in The Rights of the British Colonies Asserted and Proved, and was a leader at the Stamp Act Congress. Otis joined Samuel Adams to pen a circular to enlist other colonies in resisting the Townshend Duties.

John Adams said, “I have never known a man whose love of country was more ardent or sincere, never one who suffered so much, never one whose service for any 10 years of his life were so important and essential to the cause of his country, as those of Mr. Otis from 1760 to 1770.” Why then is he not better remembered? Because he then began suffering bouts of mental illness which ended his contributions before the Revolutionary War, whose many American heroes have eclipsed him in memory.

However, “search and seizure” issues permeate Americans’ liberties today. These include the exclusionary rule’s prohibition against admitting evidence gathered in violation of the 4th Amendment at trial and injured parties’ power to sue officers involved for damages suffered in unlawful searches. But they also include government spying on its citizens, as Edward Snowden’s leaks revealed, and questionable cell phone searches, in which, as Justice Anthony Kennedy’s words, “someone arrested for a minor crime has their whole existence exposed.” Such issues make it well worth revisiting Otis’ highly consequential insights.

James Otis’ argument was based on our liberty because we “are by the law of nature free born,” and that “[every] act against natural equity is void.” In consequence,

The end of government being the good of mankind … It is above all things to provide for the security, the quiet and happy enjoyment of life, liberty, and property. There is no one act which a government can have a right to make, that does not tend to the advancement of the security, tranquility and prosperity of the people.

Otis took our liberty, drawn in broad brushstrokes, and applied it specifically to our homes and possessions. He asked, “Can there be any liberty where property is taken away without consent?” and asserted that “One of the most essential branches of … liberty is the freedom of one’s house,” which writs of assistance steamroll. As he put it,

A man’s house is his castle; and whilst he is quiet, he is as well guarded as a prince in his castle. This writ … would totally annihilate this privilege. Custom-house officers may enter our houses when they please … break … everything in their way; and whether they break through malice or revenge, no man, no court may inquire.

Otis then asked what the consequence of violating those principles now articulated in our 4th Amendment would be. His answer was tyranny. “Everyone with this writ may be a tyrant.” And tyrannical violations of our rights that have occurred create no authorizing precedent.

[Even] if every prince … had been a tyrant, it would not prove a right to tyrannize. There can be no prescription old enough to supersede the law of nature, and the grand of God almighty; who has given to all men a natural right to be free.

Because “Tyranny of all kinds is to be abhorred,” Otis’ offered a principled and profound response:

I will to my dying day oppose, with all the powers and faculties God has given me, all such instruments of slavery on the one hand and villainy on the other, as this Writ of Assistance is.

The 4th Amendment is one of the most important playing fields on which the battle between liberty and tyranny is waged. That makes revisiting James Otis’ understanding critical. As Law Professor Thomas K. Clancy wrote:

James Otis first challenged British search and seizure practices and offered an alternative vision of proper search and seizure principles. No authority preceding Otis had articulated so completely the framework for the search and seizure requirements that were ultimately embodied in the Fourth Amendment.

Reprinted with permission from the Foundation for Economic Education.

Peace, Harmony, and Free Trade: 10 Uplifting Quotes by Richard Cobden, the Shining Knight of Classical Liberalism

The Bureaucracy Is Now More Powerful Than Congress

Who creates federal laws? Civics books say it is Congress, but the real answer today may be the executive branch. Earlier this year, James Gattuso and Diane Katz reported that just the 229 major regulations issued since 2009 added over $100 billion in annual costs (according to the regulatory agencies), $22 billion coming in 2015. With estimates of the total regulatory costs now exceeding income tax burdens at over $2 trillion annually, regulations were far more burdensome for many Americans than legislation.

Unfortunately, missing from this process is accountability to citizens. In response, some members of Congress have turned to supporting the “Regulations from the Executive in Need of Scrutiny” (REINS) Act, which would require Congress to approve major regulations before they could take effect.

Why is this necessary when the US Constitution specifically assigns all legislative powers to Congress? Because Congress has increasingly abdicated its lawmaking responsibility, delegating its power through vague laws and mandates to executive agencies, which then impose and enforce the actual regulations that legally bind Americans.

The REINS Act, by allowing major regulations to take effect only if passed by Congress, would end the effective delegation of legislative power to regulatory bureaucrats and restore some of the Constitution’s eroded separation of powers. It would offer some real political accountability, by moving us back toward Americans’ earlier understanding of legislative powers, gutted in U.S. v. Grimand (1911) and subsequent court rulings.

Before Grimand, Congress had already begun giving administrative agencies power to formulate specific rules to implement Congress’ general policy objectives. But in Grimand, the Supreme Court gave such administrative rulings the full force of law, with delegation mushrooming since.

The result has been ever-growing power for federal bureaucrats, enacted through reams of rules, imposing massively large costs on Americans.

Read the rest at the Mises Institute.

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