Bet On It Book Club: For a New Liberty, Chapter 6

[Update: I’m on vacation next Friday, so the next installment of this book club will be in two weeks.]

Summary
In this chapter on “Personal Liberty,” Rothbard puts run-of-the-mill “civil libertarians” to shame.  He’s more radical than most of the left on traditional civil liberties like freedom of speech, drugs, and wiretapping.  He stands up for the rights to libel and slander; he defends full-blown drug legalization, not a switch from “punishment” to “treatment”; and he argues that wiretapping the innocent is criminal, whether or not you’ve got a warrant. 

At the same time, Rothbard insists that many “right-wing” causes are neglected civil liberties issues.  How can there be freedom of speech when the government licenses the airwaves?  If people have a right to advocate the most heinous positions, why can’t tobacco companies advertise on television?  And if it’s wrong to persecute a whole category of people because it has an above-average fraction of bad apples (“profiling” in current parlance), what’s the deal with gun control?  Yes, criminals often use guns; but how does that justify the persecution of the vast majority of gun owners who aren’t criminals?

Critical Comments
1. I agree with Rothbard’s critique of libel and slander law.  The Western world condemns Singapore for using defamation law to silence dissent; but once you buy the principle of banning false, damaging statements, how is Singapore in the wrong? 

Furthermore, if deception should be illegal, why not self-deception?  In other words, if it is legal for me to irrationally decide that you’re a cheat, why isn’t it legal for me to share my irrational accusations with others?  In both cases, you’re losing customers because people have false beliefs about your character. 

Here’s my favorite reductio on libel and slander.  The last time I checked, the typical Randian accepted the law of defamation.  He also accepted aesthetic objectivism: “Atlas Shrugged is a great book,” is literally true.  Doesn’t it follow, then, that it should be illegal for a reviewer to deny that AS is a great book?  He’s making a false, damaging statement, right?

Let me add that in the Google age, Rothbard’s case against libel and slander is stronger than ever.  False claims abound on the Internet.  If believed, many would be very damaging.  But most Internet users have the common sense to ignore unsubstantiated accusations, so in practice they do little harm. 

2. If you really think about it, here’s the most critical paragraph in the entire book:

[I]f A is a boss in a criminal enterprise, and, as part of the crime, orders his henchmen: “You and him go and rob such and such a bank,” then of course A, according to the law of accessories, becomes a participant or even leader in the criminal enterprise itself.

Why is it so important?   Recall that Rothbard’s whole theory is that the State is a criminal gang.  So if giving orders to commit serious crimes were not itself a serious crime, he’d have to exonerate the vast majority of political leaders who never personally commit invasive acts!   In other words, the law of accessories is not a footnote to libertarian theory; it is the entire basis on which government leaders are considered mass murderers – as opposed to bystanders exercising their freedom of speech.

Once you accept the law of accessories though (and it’s absurd not to), Rothbard’s objections to charges of “incitement” and “conspiracy” make little sense.  Here’s what he says:

In our view, “incitement” can only be considered a crime if we deny every man’s freedom of will and of choice, and assume that if A tells B and C: “You and him go ahead and riot!” that somehow B and C are then helplessly determined to proceed and commit the wrongful act. But the libertarian, who believes in freedom of the will, must insist that while it might be immoral or unfortunate for A to advocate a riot, that this is strictly in the realm of advocacy and should not be subject to legal penalty.

If we bought this argument, then Hitler would not be the architect of the Holocaust, but merely its cheerleader.  After all, what did he do other than tell some people, “You and him go ahead and commit mass murder”?  What’s the difference between “telling” and “ordering” anyway?  Fortunately, it’s easy to make this contradiction go away: Rothbard should just admit that whoever “incites a riot” is an accessory to the riot, just as the Godfather who orders a murder is an accessory to murder.

3. My favorite passage from this chapter:

This is not to argue, of course, for prohibition of alcohol; once again, to outlaw something which might lead to crime is an illegitimate and invasive assault on the rights of person and property, an assault which, again, would far more justify the immediate incarceration of all teenage males. Only the overt commission of a crime should be illegal, and the way to combat crimes committed under the influence of alcohol is to be more diligent about the crimes themselves, not to outlaw the alcohol.

This sounds like a left-wing argument; but as Rothbard notes, it also undermines left-wing crusades against guns, porn, etc.  If you have trouble grasping the appeal of libertarianism, this paragraph should be a big help.  Libertarians are unusually likely to take arguments literally, and see what they actually imply, instead of just rationalizing the prejudices of their ideological sub-culture.

P.S. For a more thoughtful philosophical critique of gun control, see Michael Huemer’s “Is There a Right to Own a Gun?”

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Filibuster and Forever

You remember how the American filibuster works, right? Quick version: The Senate’s rules require not a simple majority of 51 votes but a supermajority of 60 votes to approve most legislation. However, it only takes a simple majority of 51 votes to change this rule — the so-called “nuclear option.”

Why, you may ask, does the filibuster endure? The usual story is “What comes around, goes around.” The other party will eventually get control of House, Senate, and presidency. Ending the filibuster helps your party fulfill its fondest dreams in the short run, but realizes your worst nightmare in the long run. Since both parties know this, the filibuster survives.

What’s weird about this story is that (a) politicians usually seem to have very short time horizons, and (b) if your party has a trifecta, it will probably take many years before the other party gets a trifecta. How long? With coaxing, I got Chat to produce the following table of how long trifectas take to fully reverse.

The average trifecta duration is 10.3 years, with a median of 8 years. What’s especially striking is that in the last century alone, Democrats won trifectas, then avoided full reversals, for multiple decades. 1933-1953 was a full generation. 1961-2003 was two full generations. Yes, the last two trifectas were brief, but atypically so.

So what? It seems like power-hungry politicians are ignoring a treasure trove of power untapped. Think about what Republicans could do by 2028 if they ended the filibuster today. They could end all immigration and raise tariffs to the skies — and the Supreme Court would totally let them do it. Indeed, abolishing the filibuster would sideline the Supreme Court altogether. After all, Republicans could simply pass a court-packing bill to fill the judiciary with loyal MAGAs.

Sure, Democrats could reverse all of this, but not until their next trifecta. If Republicans believe that Trump’s policies are half as wonderful as he claims, moreover, they should expect not electoral punishment, but electoral rewards, for delivering the full Monty. Sure, bad luck will eventually give the Democrats full control, but that could be a generation in the future, or even two generations.

Needless to say, I’m not advocating the end of the filibuster. Personally, I’d like to see the filibuster requirement raised from 60 out of 100 to 80 or 90. If I thought there was a snowball’s chance in hell that top Republicans would take this post to heart, I wouldn’t have published this post. The challenge, in my mind, is figuring out why the filibuster endures. Possibilities to consider:

1. Politicians (or at least senators) are less power-hungry and short-sighted than I suppose.

2. Politicians (or at least senators) underestimate how much extra power they could grab.

3. Politicians (or at least senators) underestimate how long it will take the other party to win a trifecta.

4. Voters really love the filibuster (or maybe time-tested constraints on government in general), so ending the filibuster would reverse the current trifecta ASAP. Historical data on the duration of trifectas is therefore misleading.

5. While ending the filibuster would be great for the ruling party in general, voters would harshly punish the specific politicians who spearheaded it. Since no particular politician wants to lead the charge, the status quo endures.

6. Others?

Please defend your favorite stories in the comments.

I Think I Can Explain Trump's Theory of Trade

Donald Trump likes exports and foreign investment, and laments imports and trade deficits. Most economists find this a baffling bundle of preferences — and the more they know about international trade, the more baffled they are. Never mind the truism that the whole point of exports is to buy imports. Doesn’t Trump know that getting more foreign investment raises trade deficits by definition? How confused can you get?

While I agree that Trump is terribly wrong about international trade, there’s a big difference between being wrong and being confused. While I doubt I’m ready to pass an Ideological Turing Test for Trumpian trade theory, I recently had a weird epiphany on the topic. After said epiphany, I feel capable of articulating roughly what Trump is thinking.

1. Above all, Trump wants the rest of the world to buy as much stuff from the U.S. as possible. He wants the world to buy our current output — and he wants them to buy our assets, too! His dream is piles of dollars flowing into the U.S. from all directions.

2. If piles of dollars flow into the U.S. from all directions, he thinks this will boost U.S. sales and employment.

3. Trump doesn’t know and doesn’t care about the “trade deficit” as economists define it. When he hears “trade deficit,” Trump imagines that U.S. dollars leaving the U.S. exceed U.S. dollars entering the U.S. Foreign investment means U.S. dollars entering the U.S., so on his implicit definition, foreign investment reduces trade deficits.

Why would anyone find this story plausible? Simple: It’s unadorned, old-fashioned Keynesianism. Trump wants to boost aggregate demand. The more money foreigners spend here, the more American business will sell, and the more American workers they’ll hire.

What Trump wants the rest of the world to do for the U.S.

At least in the 1990s, macroeconomics textbooks often explicitly mentioned this idea under the heading of “beggar-thy-neighbor” trade policies. If standard expansionary fiscal and monetary policies are somehow unavailable, countries can “steal” aggregate demand from other countries via protectionism.

If Trump’s real goal is to boost aggregate demand, why doesn’t he just push the Fed for more expansionary monetary policy? He has, but it’s a low priority for him, probably because he dimly realizes that extremely expansionary monetary policy would also raise inflation.

If foreign dollars really poured into the U.S., wouldn’t that also be inflationary? Of course. It would be tantamount to a massive fall in global demand for the dollar. The value of the dollar plummets if and only if the price of stuff in terms of dollars skyrockets. Alas, this is a subtle point. Trump, like most human beings, can with effort connect money supply to inflation. But connecting money demand to inflation, much less trade policy to money demand, is two bridges too far.

Intellectually, then, the best response to the Trumpian theory of trade is:

1. Since the U.S. economy is near full employment and inflation barely under control, raising aggregate demand is currently a bad idea.

2. Even if raising aggregate demand were currently a good idea, expansionary monetary policy is by far the best tool for the job. Trade policy is, at best, a clumsy way to accomplish the same thing with lots of collateral economic and diplomatic damage.

3. More generally: There is never a need for the U.S. to struggle to earn back American dollars from the rest of the world. We can print all of the dollars we want.

4. In fact, America’s best-case scenario is that we can persuade the rest of the world to sell us infinite stuff in exchange for green pieces of paper that we print at near-zero cost.

What, though, is rhetorically the best response to Trumpian trade theory? While I now feel able to translate Trump Thought into textbook econ, I really don’t know how to translate textbook econ into Trump Thought. If you’re up to the task, please help me in the comments.

Cruising to Dubai

Americans easily adjust to massive inequality

The United Arab Emirates, famous for the futurist city of Dubai, has the world’s best immigration policies. Instead of viewing migrants as a threat or a burden, they welcome them to work. They don’t just welcome petroleum engineers and investment bankers; they welcome nannies, janitors, construction workers, and drivers. Almost 90% of the UAE’s population is foreign-born.

The results speak for themselves: Migrant labor gives native Emiratis an absolutely high standard of living, and Emirati jobs give even the humblest migrants a high standard of living relative to what they would have had in their countries of birth. Despite scary stories about stolen passports and abuse, the UAE is the global land of opportunity. Millions of migrants know this from first-hand experience. Far more know it by reputation, which is why so many people around the world are trying to figure out how they, too, can get a job in the UAE.

When Americans initially hear the facts about the Emirates, most are incredulous. How can anywhere be 88% foreign-born yet remain a country? Isn’t “guest worker” just a euphemism for “slave”? But once you see the UAE with your own eyes, it’s hard not to scoff at these naive complaints. The UAE is totally a country, and no one buys plane tickets to become a slave.

After Americans spend time in the UAE, their most sensible remaining critique is simply: “This immigration system works fine over in the Middle East. Maybe better than fine. But the American people would never tolerate the extreme inequality.” The well-informed will add: “It’s not just the huge gap between rich and poor. In the UAE, the lavish government benefits are almost exclusively for citizens, and becoming a citizen is almost impossible. Efficient, yes. But the American conscience couldn’t stomach it.”

But are Americans really such egalitarian pearl clutchers?

This December, I passed up a chance to visit Dubai and took a cruise to the Bahamas instead. I’ve previously described the UAE as “a cruise ship the size of a country.” But while I was on the cruise, I couldn’t help but notice that the inequality between passengers and cruise workers grossly exceeds the inequality between citizens and foreigners in the UAE.

On a cruise ship, the workers live below the water line. They only see the sun when they’re doing their jobs. When their shifts end, they return to their subterranean lairs. With rare exceptions, they work seven days a week. There’s an extreme class system: Every cruise worker has to suck up to every passenger. In the Emirates, in contrast, workers see the sun every day, and only have to suck up to their immediate customers.

To be clear, I’m not bashing the cruise industry. Like the UAE, cruise lines provide relatively great economic opportunities for ambitious people all over the world. My point, rather, is that whatever Americans might find objectionable about the UAE is massively worse on a cruise ship.

And yet… if you take a cruise, the extreme inequality between passengers and workers doesn’t seem to bother Americans at all. On a cruise ship, foreigners wait on Americans hand and foot. They serve their meals, bring their drinks, and pick up their dirty clothes, all with earnest deference. On the obligatory lobster-and-baked-Alaska night, the waitstaff literally capers. A cruise is like a LARP where the passengers play 18th-century nobles and the crew plays their fawning serfs.

And Americans plainly love it.

Good social scientists could object that cruise passengers are self-selected. True, but there’s no sign that they’re self-selected for “tolerance of inequality.” Cruise passengers are quintessentially American. They stuff their faces, drink all day, and love Neil Diamond. They lean Republican. There’s almost no high culture, and zero wokeness. If you randomly handed out cruise tickets, almost the only Americans who wouldn’t have a good time are elite snobs.

In the abstract, no doubt, most Americans would probably be repelled by the extreme inequality of the cruise ship. But that’s cheap talk. Once on board, they’re as happy as pigs in mud. I say the same goes for adopting Emirati immigration policies. Yes, almost all Americans would be horrified in the abstract if we started admitting tens of millions of guest workers with no hope of citizenship. But again, that’s cheap talk. If the U.S. had Emirati immigration policies, Americans across the political spectrum would acclimate with aplomb. Instead of fretting about culture, the deepest-dyed MAGAs would just shout for their foreign waiter to bring another round of beers.

Which is yet another sign that that human beings, Americans included, barely care about equality. Yes, they’ll vote for it. But if they have to skip the election to cruise the Caribbean, they’ll choose extreme inequality without hesitation.