Cryptome reviews Cypherpunks: Freedom and the Future of the Internet” here. The book essentially is a written compendium of an earlier RT Cyberpunk series that featured Assange, Jacob Appelbaum, Andy Müller-Maguhn and Jérémie Zimmermann, one that I had commented on previously.
The best insight from the book is that political economy is a sociological force, a shaper, if you will. And we now have a political economy rooted in totalitarian surveillance. Assange occupies the midpoint between the triumphalists and the pessimists, pivoting the tilt of the fulcrum around cryptography. There is an adoption of a more or less laissez-faire method of political economic analysis that approaches something that sees Capitalism not as the end-point fulfillment of human agency(wants and desires) but as contravening force against the very thing itself.
The introduction to the book, the “Call to Cryptographic Arms,” interestingly mirrors the concluding remarks of my previous post, “I,Spy.” The many writers who opine on the role of technology, internet and increasing freedom vis-a-vis the future of civilization are dead wrong. They are wrong because they are not challenging the status quo nor the enemy. As Assange writes: “No description of the world survives first contact with the enemy. And we have met the enemy.”
The cyberpunk perspective sheds immediate and crystal clear light on the current debates regarding capitalism and laissez-faire that are otherwise often obscured by conventional economic and political analytic frameworks(and I include conventional libertarian within these). Can there be just a “little bit of Statism” or is Capitalism a “good” first-order approximation to free human agency? Is the State merely an unfortunate nuisance that nonetheless can be routed around on our way to a technologically driven freer future? No. Assange pin-points the “ground zero” of our current condition: the merger of State and internet. The consequence reveals the ultimate stark divergence between free market and capitalism. Capitalism can rent-seek human agency itself as a threat.
Liberalism gives us the artificial state as a means of securing a human collective choice end, such as property(or primary goods in the more modern incantation), but the security of the thing results in the security apparatus viewing human ends as an existential threat to the security apparatus itself. This paradox is de Jasay’s rational choice incentive incompatibility problem staring you right in the face. Write’s Assange(essentially laying waste to classical liberalism):
First, recall that states are systems through which coercive force flows. Factions within a state may compete for support, leading to democratic surface phenomena, but the underpinnings of states are the systematic application, and avoidance, of violence. Land ownership, property, rents, dividends, taxation, court fines, censorship, copyrights and trademarks are all enforced by the threatened application of state violence.
Most of the time we are not even aware of how close to violence we are, because we all grant concessions to avoid it. Like sailors smelling the breeze, we rarely contemplate how our surface world is propped up from below by darkness.
In the new space of the internet what would be the mediator of coercive force?
Does it even make sense to ask this question? In this otherworldly space, this seemingly platonic realm of ideas and information flow, could there be a notion of coercive force? A force that could modify historical records, tap phones, separate people, transform complexity into rubble, and erect walls, like an occupying army?
The platonic nature of the internet, ideas and information flows, is debased by its physical origins. Its foundations are fiber optic cable lines stretching across the ocean floors, satellites spinning above our heads, computer servers housed in buildings in cities from New York to Nairobi. Like the soldier who slew Archimedes with a mere sword, so too could an armed militia take control of the peak development of Western civilization, our platonic realm.
The new world of the internet, abstracted from the old world of brute atoms, longed for independence. But states and their friends moved to control our new world — by controlling its physical underpinnings. The state, like an army around an oil well, or a customs agent extracting bribes at the border, would soon learn to leverage its control of physical space to gain control over our platonic realm. It would prevent the independence we had dreamed of, and then, squatting on fiber optic lines and around satellite ground stations, it would go on to mass intercept the information flow of our new world — it’s very essence even as every human, economic, and political relationship embraced it. The state would leech into the veins and arteries of our new societies, gobbling up every relationship expressed or communicated, every web page read, every message sent and every thought googled, and then store this knowledge, billions of interceptions a day, undreamed of power, in vast top secret warehouses, forever. It would go on to mine and mine again this treasure, the collective private intellectual output of humanity, with ever more sophisticated search and pattern finding algorithms, enriching the treasure and maximizing the power imbalance between interceptors and the world of interceptees. And then the state would reflect what it had learned back into the physical world, to start wars, to target drones, to manipulate UN committees and trade deals, and to do favors for its vast connected network of industries, insiders and cronies.
The traditional “property rights” of the liberal, democratic capitalist order are the means for a dystopian internet.
Unfortunately, cryptography is not a sufficient means to overcome the problem. Assange is correct that the laws of physics make encryption easy and decryption hard, but the mathematics of data analytics can circumvent this physical constraint. Data analytics is an exercise in graph analysis, not code cracking. Graph analysis is the process of revealing patterns in the data in order to construct graph objects, which are a collection of vertices and connecting edges. Regrettably, you cannot encrypt data patterns. And as we have learned this week, the US Government is massively engaged in graphical analysis of all internal data communications(which, of course, is what we said they were already doing). This is why, occasionally, we will read about the internal memos that leak out from whatever security agency acronym that those who are not sufficiently connected to the graph can rise to a level of suspicion. The robustness of the data analysis relies on a well-connected graph(the so-called diposition matrix is a special type of graph object that marks its nodes for termination). In this sense, the Cryptome reviewer’s advice to “protect yourself by keeping quiet, offline”(avoiding vanguard’s, however, would be good advice) may not be the best advice. The future of evasion is subterfuging the data pattern, which is why it will only be an available domain for the very few.
Cypherpunks: Freedom and the Future of the Internet would be a recommended prerequisite for reading or re-reading de Jasay’s classic “The State,” which, unfortunately proves to be much more relevant today than when it was originally published.
In the next two months, AT&T, Time Warner, Verizon and Comcast will implement the The Copyright Alert System program developed by The Center for Copyright Information. Of course, The Center for Copyright Information is a RIAA and MPPA front. The monitoring system that will be used will rely on the MarkMonitor service that has been in place for a numbers of years now. The “monitors” will be The Center for Copyright Information, i.e., RIAA and MPAA. Once again, these entities have been monitoring bitTorrent traffic for years. Indeed, a recently presented Security Research Paper concludes that you can expect to be tracked within 3 hours of firing up a torrent client.
The primary change is that in lieu of direct legal action(which can be frictional), the RIAA/MPAA, using the aforementioned ISPs as agents, can now engage in a relatively frictionless enforcement operation. And this is where the data analytics begin to kick in. Large-scale users will still be subject to the same modis operandi legal action but the voluminous data that has been collected over the years by the likes of MarkMonitor will now be used as a queryable data repository against which the new data will be used–according to whatever algorithm employed–to trigger the Copyright Alert Notifications to end users via that user’s ISP(serving an agency role of a Sheriff, more or less).
Evasion tactics? Well forget about things like Tor. Tor works over the tcp protocol(and can’t handle the load of p2p file sharing to begin with). bitTorrent these days works over udp. Sophisticated encryption techniques like mse/pe to me are more about thwarting ISP throttling, but in this case it is not the ISPs who are the monitoring agent. The best evasion technique is to use a udp proxy. But I imagine that a reliable service with tolerable speed is going to cost money which begs the question a bit of why not simply spend the money on a paid download music service. That was basically my decision around 6 years ago when the opportunity costs of evasion(when the monitoring really began to pick up) well exceeded the monthly subscription cost of a paid service.
Of course, the Copyright Alert System is just harbinger of things to come. These types of arrangements up and down the IT stack will increase by orders of magnitude under the formal adoption of whatever “cybersecurity act” that eventually passes(once again, because the basic top-level rules will be enacted via fiat, i.e, executive decision, the subsequent proposal and adoption of a legislative act is an absolute certainty). And this, of course, just exposes the silliness of the “network neutrality debate” because “network traffic” should always be understood to mean “authorized network traffic.” The arbitration between “authorized” and “unauthorized” traffic will be subject to the most relentless data analytics imaginable.
I will also offer a brief comment on unjustified triumphalism that thinks these issues can be magically skirted around. This belief is based on a fundamental mischaracterization of the internet as a horizontal, decentralized type of network. But it is not that. Rather, the internet is a type of scale-free, small network that follows a power law distribution. The network properties of scale-free invariance is much a product of quite a bit of centralized coordination. Simply, it is a mistake to think that technology alone can overcome the problem of political economy. Instead a necessary condition to be able to “route around the damage” is jurisdictional differentiation in political economy. I’ve been harping this point for a couple of years in my posts about Wikileaks. If the jurisdictional differentiation melts away then feel free to proceed straight to the outright pessimism of Evgeny Morozov and Richard Stallman who have given up on the anarchic promise of the internet. The alternative is a platform that turns out to be very well suited for tight control by Corporation and State. The evidence for this latter pessimism is the degree of rent-seeking in data analytics this little platform of ours affords(which makes the actions of State agency very much “rational” and hardly stupid in this space). The game is up when the cyber-security and “data czars” come rolling down the pike.
Finally, The Copyright Alert System is once again immediate evidence of a “Commercialist” anomaly with regard to political economic agency. Methodological individualism is hard pressed to explain ISPs acting as a Sheriff Agency (on behalf of the RIAA/MPAA) against their own customers. The model of The Firm, however, explains it quite well.
Yesterday, the Roberts court affirmed the Obama defense of the so-called “Affordable Care Act.” To me, it is not a particularly surprising result. Two years ago, I noted that the Obama Admin’s principal argument relied on the classification of the mandate as a tax and that the legislation–all 2000 pages plus–was carefully crafted to categorize any penalty as an excise tax. As I wrote at the time, Obama–his “socialist” caricature notwithstanding–wasn’t arguing the case by making appeals to the Communist Manifesto. He was merely relying on past American constitutional precedent. He had “the firm’s” legal team carefully draft the new rules of the health care political economy to pass compliance strictly with the firm’s monopoly power to tax.
And it passed the compliance test. Indeed, John Roberts used this decision to affirm the role of his court to be the adjudicators of compliance and not the arbiters of constraint. Really, the judiciary is the only possible monkey wrench in a model of total government by political competition/rent-seeking. Yesterday, Roberts proclaimed that the role of the judiciary is not to save us from democracy, which, of course, means “the firm.”
We simply pose a simple question to Mr. Roberts: who wrote that 2000 page piece of legislation? Who could compose an entire model of political economy from the mere power to tax in a fully “compliant” manner. Justice ain’t that blind, sir….
Incredibly, there are some so-called libertarians who are hailing this decision as a bulwark against the future regulatory State because of some speculative nonsense that Roberts has now taken the “commerce clause” off the table. Sheeeeyyyyyytttttt. The regulatory state ultimately derives from the power to tax. The Firm more or less is the regulatory state. It is not going anywhere.
Let us dispense with the romance and the delusion. Politics is a rent-seeking game. Richard Posner and the Chicago School had it wrong. It is not a game where nothing is being redistributed, that is, where outlays = rents. Tullock and the Virginia School have the better model but resorted to a ridiculous “inefficient market hypothesis” to try to save liberalism in a public choice context when it became apparent that rents >> outlays. Tullock, himself, in explaining why he couldn’t convert to the libertarianism, more or less admitted that he simply preferred the blue pill to the red pill–he was too married to the institutionalism he was critiquing to defect.
If we accept that firms can arise in a “free market” of horizontal trading partners because a hierarchy of economic governance can sometimes prove to maximize economic rents relative to a regime of horizontal trading partners–as a consequence of the frictional costs of bargaining–we have to accept the reality of “firms” in political competition. It is indefensible to hold a position of firms as a consequence of economic rent-seeking in a free market but no firms as a consequence of rent-seeking in political competition. Yes, we can think of political parties as “firms,” but the actual firm is the State.
Today we know(or we should know) that Madisonian Democracy is a horribly flawed political concept. The idea that high institutional frictional costs constrain political competition/rent-seeking is just wrong. On the contrary, the high institutional transaction costs are what actually guarantee the emergence of “the Firm.” Equal competitive agents(“gangs”) fighting over rents in a highly frictional environment can be literally infinitely wasteful. To avoid this, you thus have a type of hierarchical, economic governance that emerges–the Firm.
John Roberts, “evil genius,” I think not. I think the evil geniuses are these libertarian think tanks and mags that keep propagandizing “proper role of government,” “limited government,” and demonstrate infinite capacity to find “silver linings” in libertarian-conservative fusionism. You doubt the “State as Firm?” Well, sometimes you just have to actually give a demonstration of the empirical reality. Below is just the “legislative component” of “the Firm.” Do you see any silver linings, any evidence of limited government, any evidence that it matters one fuck whether it is the monopoly power to tax or to “regulate” regarding the ends of our Firm?
The House Legislative Component of The Firm
The Senate Legislative Component of The Firm
In a previous post, I applied a consequential analysis of a “pro-life” moral rules regime–with respect to abortion– to infer abortion on demand was the only “defensible” libertarian position(note: a bit of subtlety, but decoration with the libertarian adjective intentionally limited the scope of AoD being the only defensible position within the libertarian sphere. I wouldn’t claim that AoD would be the only defensible moral position if the scope were broadened).
Frankly, it wasn’t that particularly difficult to debunk the “pro-life” libertarian position. You simply start with the examination of the moral claim that “you can’t protect liberty without protecting life.” Well, that’s a bullshit statement because you actually can’t enforce violations against life without first defining your moral constraints against liberty. There are two exceptions to this: pacifism and total violence. But pacifism isn’t enforceable–in the sense that the enforcement of its moral claims would itself be a violation–and total violence produces no enforceable claims(there is nothing to enforce).
Once we accept that there are moral constraints against moral claims of life(an obvious example would be “self-defense”) it is a straight-forward exercise to arrive at AoD as the only enforcement regime that is not burdened by ad-hoc pacifist obligations. If, on the other hand, we make allowances for such things as “the sanctity of life,” then we introduce ad-hoc pacifist obligations into the enforcement regime. With respect to modern Christian moral claims(Christianity is the typical moral foundation for “sanctity of life”), you will likely end up with an enforcement regime that places a burden of murder against any young female who does not carry any pregnancy to term while making an exception the size of a mountain for older women who have advanced beyond optimal childbearing years–in terms of the allowance for spontaneous abortions and “assisted reproduction technologies.”
It should be easy to see the regime consequences of enforcing these ad-hoc pacifist obligations: A Political Economy of Pregnancy Enforcement. This political economy certainly gives rise to “registration,” “inspection,” “direction,” “rule-of-law driven,” “enrollment,” “indoctrination,” “control,” etc….In other words, the enforcement regime has to be collectivized. Collectivization of an enforcement regime breeds an industry of political economy. This is axiomatic.
“Regime Consequences” regarding the enforcement consequences of moral obligations should be a staple of libertarian deconstruction. But this method is often dismissed because it perhaps smacks of “consequentialism,” which is generally a dirty word in libertarian circles. If consequentialism simply means that liberty is derived as the end product of a utilitarian calculation, then I’m in full agreement with hating that word. However, if we begin with a presumption of liberty and understand that reason only applies to means and not ends, then “consequentialism” is the only productive method available. Everything else is just bullshit.
The Regime Consequences of Enforcing the “Moral Obligations” of IP & Copyright
Let us understand why IP and Copyright have become a topic of bitter dispute. Today, a market process applied to the digitization of human ideas turns the latter effectively into a “public good.” By “market process” I simply mean a process of cooperative exchange that originates outside the State Regime of political economy. I mean it very much in the old French Liberal sense of “laissez faire.” By “Public Good,” I mean it literally in the neoclassical sense, that is a good that effectively is non-rivalrous and non-excludable. That Laissez-Faire is driving human knowledge to a status of a “public good” is short-circuiting quite a few moral foundations.
Particularly among the libertarians. A pertinent example would be the recent Stephen Kinsella vs J Neil Schulman debate. Kinsella, who has experience in the legal aspects of the IP/Copyright regime, has recognized that the enforcement obligations of IP/Copyright spells doom for any meaningful sense of liberty. Thus, he has been busy reformulating “Austrian” foundations in terms of an anti-IP slant. Schulman, of course, is not interested in any this. He remains steadfast to the Objectivist moral foundation which places Intellectual Property at the epicenter of property rights and human reason itself.
Schulman will take the moral claims derived from the Objectivist foundation to the logical endpoint: a denial of “identity” itself without the recognition by others of the intellectual product of human reason. To me, this is an example of the logical endpoint of Objectivism managing to bump into the rear-end of Charles Taylor and the communitarians. Taylor’s theory of recognition is noted for denying the possibility of agent identity outside of a group context; and the group can only achieve its own identity via the recognition and acceptance by other groups. The communitarians have always denied liberalism’s category of the State as artificial, insisting instead on the ancient view that regarded “the Polis”(the State) as a natural fabric of civil society. In the liberal era, the struggle against the re-unification of the Polis with civil society is the underlying basis of “libertarian class theory.” The means of this unification, of course, is political economy. The communitarian dream of reunification will be wrought on the back of political economy. And no better foundation for this political economy than Intellectual Property. What Rand deemed the essential component of human identity, the thing she warned “the collectivists” would attack, is actually the thing the collectivists will use to forever reunify the Polis as a natural fabric of human society.
The One Public Good the State Managed to Produce–by Accident–Defines the 21st Century Political Economy Battleground
Our Progressive worshippers of authority are always chirping about the State and “public goods.” Of course, other than “defense,” there are very few actual instances of “public goods,” and most of the progressive chirping is an exercise in conflation between “public works” and “public goods.” But as we well know,the simple exercise of digging a ditch eternally binds one to moral obligation to the regime under the banner cry of “but who will dig the ditches?!!!”
Now our progressive friends are usually quite fond of informing us that the government(usually a specific government, the US Government) “invented” the internet. Now this is silly because there is no such thing as “the internet” as a single entity that was invented by any single agency. But in another sense, it is a half-truth in that the cumulative evolution of the packet-switch, global wide-area network required a ton of standardization up and down the IP stack. This standardization was an intentional, self-conscious, directed process that involved quite of(albeit largely informal) public-private “joint cooperation.” It is actually the one example of Hayek’s “planning for competition.” However, given that Western governments at the time mostly treated Telcos as public utilities, there was simply no other alternative process available. But a clinching factor was the adoption of TCP/IP– tcp/ip being one particular implementation of the OSI model–by the US Military in the early 1980s. TCP/IP has its origins in DARPA, but TCP/IP supplanted other OSI implementations around the world simply because it was adopted by the world’s preeminent global military superpower. Not because it was a superior implementation.
So the accurate statement regarding the internet is not that the Government is responsible for the existence of packet-switched, WAN networking, but rather that it is largely responsible for our particular implementation of it. Specifically, we can certainly give attribution to the US Military for the fact of a global tcp/ip standard.
The end product of this high degree of standardization in our packet-switched, WAN network is more or less an efficient “small network,” meaning the number of segments between any two arbitrary nodes approaches a small number(e.g. the “six degrees of separation” concept). Now the “public good” is not actually the network itself but the low-entropy product it is transporting: namely the digital transcription/copy/representation of human knowledge. Human knowledge effectively has become a public good. To state the three reasons for this:
(1) the efficiency from a high degree of network standardization: the global small network
(2) the low entropy of human language
(3) the relentless progression of Moore’s Law
The State finally plays a role in producing a “public good” other than defense. But the role was restricted to the resolution of coordination problems(an informal but vital role in the coordination of standards) that enabled the provision of the good and did not encompass the actual provision of the good itself. That is, the process of standardization was intentional, but the end product, our public good of consumable digital knowledge(not at all dependent on the State), was not intended.1 As soon as the “public good” became apparent, State actors revved up the political competition in the artificial exclusion to this good. In a real sense, when the State began passing its Digital Copyright Acts to enforce artificial exclusion to this good, it became clear which political critique, libertarian vs progressive, had the more accurate model of the State. Unfortunately, a political economy in the artificial exclusion to a public good of human knowledge is the very thing that can bring all of human economic activity under the political umbrella of State agency. In libertarian class terms, it is total war.
Plutocracy vs Oligarchy
Plutocracy is rule by a political class that for its own ends(usually identified as wealth). But plutocracy is not a condition where the political classes are united. Oligarchy is the condition of plutocratic unity. Generally, the political classes, globally speaking, are not united. What would unite them would be these secretly negotiated trade deals for a uniform “legal” standard in enforcing artificial exclusion to digital copies of human knowledge. It’s just another example of the consequences of “trade” serving “moral ends” and the extent moral ends can expropriated by agency. The extent of the expropriation can be seen by comparing Bastiat’s statement concerning trade and peace with that of the WTO. “Peace through Trade” can have a doublethink meaning. George Orwell provided us with the Oligarchical Collectivist interpretation of peace. Peace can also be a product of oligarchical unity.
The final coup d’etat is the militarization of the administration of the network. Currently, the administration of the internet is largely civil. But the US government’s blatant attempts to trigger a militarization of the internet serves the ends of a militarized political economy of network administration. The civil administration of the network is then supplanted by a corrupt, compliance standards regime that will in large part be engaged in the monitoring and blockage of “unauthorized traffic.” And what do you think will compose 99.999999999% of this “unauthorized traffic.” Of course, IP and copyright violations.
In case you haven’t noticed, DHS is significantly involved in the enforcement of IP and Copyright. The synthesis of political competition in the public goods of security and human knowledge that results in an equilibrium outcome of oligarchical unity not only represents the apex of Authoritarian porn but promises to turn a potential instrument of human utopia into a dystopian instrument of the most efficient and awesome spying and control mechanism possibly imaginable.
To bring this discussion back to the moral claims of J Neil Schulman, I conclude thusly: I reject Schulman’s moral claim regarding IP and Copyright because my methodology informs me that the regime consequences of the enforcement of his moral claim is oligarchical collectivism. The question of whether or not IP and Copyright require the State for enforcement is irrelevant. The State is going to use the enforcement of artificial exclusion to human knowledge as the means for a totalitarian outcome. If your own personal identity requires others to recognize your IP legal status claim regarding your mental constructions, then you need a new moral foundation.
1 An interesting discussion is to consider if purely organic market processes could likewise evolve something similar to our current internet implementation. Often, the “internet” is mistakenly identified as a type of “decentralized” network. But that’s an incomplete characterization. The “decentralizing” characteristics are emergent properties of a large degree of centralized standardization(=resolution of coordination problems). The more accurate adjectives would be “small network” and “resiliency” in place of “decentralized.”
In any event, the question is interesting but irrelevant. It’s now a matter of “path dependency.” It’s in place; it works; it does not require any type of formal State central body to continue to work. The interesting question now is the extent the State corrupts it by introducing compliance–i.e., standards as a function of “planning against competition”–into the network.
Will Wilkinson’s latest statist declaration of principles and anti-principles, with respect to liberalism and libertarianism respectively, is another attempt by Wilkinson, who has “defected” from the “label,” to use the soft underbelly of the libertarian movement as an argument for the State.
I agree that the meaning of “libertarianism,” particularly in the American political context, is incoherent. But this is largely a product of trying to make it palatable with liberal democracy–in short, rebranding the libertarian meaning of liberty as a political value. I will flatly state that there is no normative case for liberty. But this is not an argument for the State because I also include the following addendum: neither is there a normative moral duty to obey the State.
Wilkinson seems preoccupied with mutable ideological labels and public connotations of conviction syndromes interrupting his ability to eclectically define himself. But we can easily separate the wheat from the chaff. If you ascribe to a moral duty to obey the State, then you are not a libertarian. If you deny this moral obligation, then you have at least satisfied a necessary condition for libertarianism.
Simple,succinct, and to the point.
Wilkinson, of course, accepts the moral obligation of obedience to the State. The first point of Wilkinson’s defense is a denial of the NAP “anti-principle.”
Here are some not-standardly-libertarian things I believe: Non-coercion fails to capture all, maybe even most, of what it means to be free. Taxation is often necessary and legitimate.
I consider “coercion” to be a strawman argument. I’ve discussed this before on previous occasions, e.g: Free Markets and Coercion. All social interactions and contractual arrangements are coercive in the sense that they necessarily impose moral constraints on agents as pure maximizers. Non-coercion is useless as a basis for a social theory because agents are not single-variable max-min optimizers–”coercion” as the single variable–because the optimal social arrangement would then be defection.
Social cooperation necessarily entails moral constraints on the part of actors. We could alternatively use the language of “personal duties.” But personal duties do not demonstrate impersonal duties, or duties to no one. In my post, I used an example of uncertainty prompting payments to third parties to insure against transactions not being mutually beneficial. A moral claim on a carpenter to be bonded and insurance payments to third parties can be superficially equated with how the market produces “coercion,” taxes, and a State tax collector–that is, until we properly distinguish between taxes,rents and economic rents. If the insurance payments are composed of economic rent, then we would have an entrepreneurial opportunity to drive these rents to trade at opportunity costs. To abolish these rents and to treat them as “taxes” and as part of the tax code would incentivize a different type of entrepreneurial opportunity, one that would look to the tax code to create and persist artificial rents.
This was a simple economic example of how the moral constraints of social cooperation do not imply nor should imply an impersonal standardization. Almost always, an argument to impersonalize moral constraints is often a narrow self-interested one.
Wilkinson’s second point is a “principle,” namely the claim that the State has reduced violence. This is a reason why, for example, we should morally obey the State. Wilkinson appeals to Steven Pinker’s “The Better Angels of Our Nature: Why Violence Has Declined.” However, the claim of the role of the state in reducing violence can be easily questioned as an example of a “post hoc causal fallacy.” The immediate counter-problem with this claim that I would pose is to legitimately question why the liberal state is nonetheless morphing into a National Security State given it’s supposed rational role in reducing violence. If violence is at human historical lows, then why the need for CIAs, DHS, TSA,paramilitarized civilian police forces, secret police, and an unaccountable sprawling military/intelligence industrial complex? Of course, Wilkinson will simply ignore this obvious contradiction and instead can be counted on to blather on about how secure the State has made all of us while we are nonetheless forced to undergo anal cavity searches as a pre-condition to travel and buy goods/services at shopping malls.
Wilkinson’s third point of “principle” of why we should obey the state is that it legitimizes us to participate in the debate regarding “the nature and scope of specially-protected rights and liberties within the settled context of the liberal-democratic nation-state.” Of course, the historical libertarian critique is that liberalism institutionally fails to provide this “settled context of the liberal-democratic nation-state.”
In the classic sense, we can succinctly define liberalism as a political system whose ends are property and whose means are liberty. I will also include the modern update that adds an ends of justice and includes redistributive means that imposes a degree of positive constraint on liberty. The liberal legal model defines a constitutional framework of decision-making rules, justified by a hypothetical “social-contract,” that defines the constraints on what is legally recognizable within the system. In plain language, this means that legal recognition in the pursuit of property or justice cannot violate constitutional constraints. The constitutional constraints, which are decision-making rules, define the boundary conditions.
However, as I discussed in my previous post regarding the State of Nature, legal recognition, including the constitutional boundary conditions, or decision-making rules, are market goods, whether you like it or not. Specifically, economic rent-seeking of legal recognition via a monopoly price maker becomes a source of decision-making rules–that is, it changes the boundary constraints of the system. In Virginia School Public Choice terms, the equilibrium of the Tullock rent-seeking game is a union of the Redistributive State and the Protective State(the Constitutional agency). This, for example, explains the massive empirical discrepency between the magnitude of economic rents being created by the State vs the competitive outlays investing/bidding for such rents.
To restate: this is why using the Superpower US military/Intelligence apparatus as a means to protect economic rents results in the evisceration of the primary liberal legal restraint, the “Great Writ,” and why the Federal Government, in the office of the Executive Branch, as now legally sanctioned by the legislative branch, now declares itself arbitrarily outside the constraints of civilian court due process.
Wilkinson, as a liberal, should be supremely concerned with the fundamental liberal violations posed by such things as the National Defense Authorization Act. This is an example of an egregious violation of the supposed “settled context of the liberal-democratic nation-state.” But I haven’t read a peep from Wilkinson addressing these profound violations, not in any serious way that he, as a liberal, should be addressing given that he is quite aware that these type of violations are at the core of the libertarian political critique.
Wilkinson’s fourth point, an “anti-principle point,” is a fine example of “applied selective consistency.” Granted, I agree that there are legitimate critiques of Ron Paul’s version of libertarianism, but if Wilkinson ascribes to the principle that past violations of the messenger discredit the current message, then Wilkinson necessarily must renounce the State as messenger. We can simply appeal to David Hume who pointed out the real-world problem with “social contract theory:” historically, states weren’t rational products of hypothetical consent; rather they were the products of conquest and pillage. The State wouldn’t be where it is today, in a position to be an arbiter of “justice,” without the conquest, mass murder and pillage of it’s past. In our modern context, Wilkinson doesn’t seem too bothered by a State that killed millions of Vietnamese, bombed who knows how many Cambodians, killed and displaced more than a million Iraqis, is the only State to directly use Nuclear WMDs against a civilian population and directly funded the other one that used chemical WMD(Iraq), financially supports authoritarian dictaroships across the world, locks more of it’s citizens, percentage-wise, than any other country in the world, sans perhaps North Korea, engineers a racist drug war to inflicts uncountable damage globally, etc, etc, etc….Yet, Wilkinson has no problem with this State(mind you, the same State which refuses to apologize for most of these atrocities) being an arbiter of justice; however, he is morally outraged over around five years of paleo, politically incorrect bullshit from Paul’s publishing enterprise from the early to mid 1990s. I wouldn’t quite characterize that as “decades of bilking paranoid bigots with bullshit prophesies of hyperinflationary race war. Is there any evidence of Paul’s publishing ventures printing decades(meaning twenty years or more) of race war articles or advertisements?
As a libertarian, one who doesn’t root moral outrage in communitarian recognition violations, but rather in actual moral and legal institutional injustices, particularly those injustices that persist without correction, I can’t take Wilkinson’s moral outrage and critique seriously.
A popular critique of the “Free Market” is a simple presumption against it’s actual existence. If they don’t exist, then any debate on the matter is a pointless exercise. Occasionally, there will be an attempt to make the case for justifying such a presumption by attacking the supposed proposition that the free market implies no coercion. So, if we demonstrate that there is no such thing as “no coercion,” then we have logically falsified the “free market.”
FM –> ~c
which is equivalent to: c –> ~FM
So, if we show c(coercion), we show no free market.
This type of argument is typically represented by this recent blog post: Libertarianism: Coercion Seen Through a Fun House Mirror. The gist of the argument is to debunk the supposed libertarian premise: “Any libertarian will tell you that contracts are ‘coercion free.’”
Well, I deny that premise. If we define coercion as a form of a moral claim, then I would concede that all social interactions(and contractual arrangements) are “coercive.” For example, consider a contract between a Homeowner A and a carpenter B for a Home Improvement I in exchange for monetary sum M. In the contract, it’s specified Carpenter B must guarantee it’s work. This certainly can impose a possible moral claim on the time and labor of B, beyond it’s own calculation of such quantities involved, in the event of a claim of an unsatisfactory outcome by A. The uncertainty or risk of such an outcome is certainly not trivial. This is why, in part, you may often have bonded insurance of such workers.
But couldn’t this insurance premium then be considered a “tax,” one that is just a “market representation” of “coercion.” (1) The enforcement to make sure this “tax” is paid requires an enforcement body–a State agency against B. (2) Since “taxes” are being paid and there is enforcement agency to enforce payment of such taxes, why not have the State simply pay it through direct taxation, to relieve the burden on B. Or better yet, why not a tax-financed community worker project for home repairs? After all, we already have established a market principle for “taxation,” and the necessity of an enforcement agent for tax collection. So, why not?
Note: my little example is not the argument advanced by the above referenced author against the “no coercion” premise. That particular argument relied on demonstrating that arbitrary agents Ai, in whatever context, are never equally powerful to one another. So the market exchange is fundamental exploitative. So we show c(coercion) by showing exploitation.
My example is more subtle. It demonstrates that uncertainty or risk can lead to “coercion,” without having to make any assumptions regarding the relative bargaining power of agents.
The libertarian response to this will usually focus on qualifying the “first-order” definition of coercion as simply a form of a moral claim. The libertarian insists on a second-order distinction, namely that coercion is an involuntary moral claim. Taxes are a product of involuntary moral claims. If a contractual arrangement is voluntary, however, then the insurance premium is just a type of rent paid to a third party to offset the risk of the voluntary transaction not being mutually beneficial. Rent collectors do not need to be the State.
However, using “voluntary” and “involuntary” as the moral sprinkle dust to differentiate between taxes and rent, as economic transfers, reverts to a type of moral argument that has yet to achieve any moral consensus. And indeed, I would question, on the libertarian side, whether the libertarian principle is simply decorating “moral claims” with “voluntary.” I would argue that it’s a bit more than that.
Game Theory, a framework for analyzing strategic decisions under uncertainty, provides us with a means to examine agent bargaining. A mutually beneficial bargain between agents is a cooperative outcome that can arise from agents attempting to more or less minimize the moral claims they have to concede in pursuit of a benefit. Agents bargain because, in a general condition of the world–which is characterized by scarcity– cooperation creates “additional surplus.”
It’s important to emphasize a few points. Agents are not pure “first-order coercion” minimizers. If that were the case, then the optimal state would be the “state of nature,” that is the defection state, for everyone. However, as bargaining agents, humans will act to minimize their own concessions in pursuit of the surplus of the bargaining outcome. This makes them strategic agents. In terms of a bargaining problem, the libertarian principle is really the Lockean Proviso, which is a boundary constraint on the bargaining outcome: no one is worse off in the bargaining outcome relative to the defection state, or “no agreement.”
So, the libertarian principle, in terms of a bargaining problem, is a constraint on agent moral claims in the cooperative outcome. Coercion,as a second-order definition, is a moral claim on an agent in the cooperative outcome that makes it worse off than it would be sans the bargained outcome(i.e., the defection state). That is, coercion, as a second-order definition, is the use of force to enforce an agreement to a bad bargain. In this sense, the “libertarian society,” in terms of coercion, is not so much dependent on a demonstration that all social arrangements are purely voluntary, but rather on the ability to voluntarily exit bad bargains without punishment.
So, this alternative libertarian definition of coercion definitely creates a “Fun House Mirror” effect for the presumption of coercion. Namely: a “progressive” argument–from the author cited above–that builds from the premise that markets are simply constraint-bounded social constructs that are fundamentally violated by the unequal bargaining power of agents that concludes with a claim that the ultimate representation of unequal bargaining power, the State vs the individual, is the contractual foundation of the rule of law.
The flaw is a simple failure to understand basic bargaining theory, which is based on strategic decisions under uncertainty. If there is no uncertainty regarding the relative bargaining power of agents, then there is no bargain to be had, particularly if exploitation can be shown. That we continue to see bad bargains, under such strategic certainty, may have something to do with the claim that “a law is a contract in which one of the parties is a government entity,” which, of course, implies the rule of law derives from the ultimate instance of unequal bargaining power.
So we end up with a progressive argument that seems quite reasonable to progressives under a presumption of coercion, but ends being an embarrassing admission if the presumption itself is challenged.
The Free Market
The Free Market is not:
FM –> ~c
Nor is it, as I have explained previously, a premise about regulation. That is,
FM –> RM
where RM=Regulated Market(NOTE: although an “un-free market” is a sufficient condition for an unregulated market).
Instead, a “free market” can be succinctly defined as a market that serves no political or moral ends. The practical meaning of this is more or less a statement about competition in “economic rent,” or “rent-seeking” behavior. One type of economic rent seeking can be a boon to human welfare, and is representative of an entrepreneurial economy, while the other type is a bane to human welfare and is representative of protectionist political economy.
The definition of Economic rent differs a bit from the popular meaning of rent as an income stream for use of a resource. Instead Economic rent refers to income flows for use of a resource in excess of that resource’s opportunity costs.
So, as an illustration, in our example above, the contract between Homeowner A and a carpenter B, that required a flow of payments to a third party to insure risk against a guarantee default by B, is a form of rent. But how much of this rent would be economic rent, that is payments in excess of opportunity cost? We would surely want competition in any rent-seeking behavior here to the extent these rents exceeded opportunity cost. This would be an entrepreneurial opportunity.
What we would NOT want to have is protectionism in terms of who qualifies to be bonded or who insures the bondable carpenters. Nor would we want some tax code to encourage(give a tax exemption advantage to home improvement) home improvement as an artificial market for protected bondable craftsmen. The competition in this type of economic rent is the essence of Political Economy.
The free market then is not some abstract ideal rooted in some abstract moral claim. It is something that very much can be approximated and spotting it’s violations is very much a matter of practical endeavor.
Two years ago at Freedom Democrats, I posted an article on Libertarianisim and Immigration that sort of languished at the time. A year later, my republishing of the article managed to achieve some degree of notoriety with Less Antman’s endorsement.
The argument made in that essay was simple. Freedom of movement, freedom of contract are essential to any libertarian social theory and any (i) welfare argument (ii) cultural argument (iii) property rights regime argument against these essential liberties would result in:
(i) a dreadful social welfare
(ii) a dreadful culture
(iii) a dreadful property-rights regime
And I named “names” regarding the origins of these “libertarian arguments” against these liberties. And I concluded that these arguments were nothing but a welfare costly form of collectivism.
Now, two years later, we have an “empirical moment.” As the NY Times reports, we now are experiencing net zero immigration flows.
Douglas S. Massey, co-director of the Mexican Migration Project at Princeton, an extensive, long-term survey in Mexican emigration hubs, said his research showed that interest in heading to the United States for the first time had fallen to its lowest level since at least the 1950s. “No one wants to hear it, but the flow has already stopped,” Mr. Massey said, referring to illegal traffic. “For the first time in 60 years, the net traffic has gone to zero and is probably a little bit negative.”
The decline in illegal immigration, from a country responsible for roughly 6 of every 10 illegal immigrants in the United States, is stark. The Mexican census recently discovered four million more people in Mexico than had been projected, which officials attributed to a sharp decline in emigration.
What are the reasons for this sharp decline in immigration? According to the NY Times:
(i) Economic, demographic and social changes in Mexico
(ii) a piss-poor performing, Papers-Please US Political Economy
What our current conditions in this net zero immigration environment?
(i) Budget Deficits at a minimum as a result of net-zero influx of unskilled immigrants no longer burgeoning the welfare rolls and sucking up public monies?
Nope. Budget Deficits are at an all-time high, indicating that perhaps Public Debt has little do to do with labor migration
(ii) Unemployment at record lows, real wages at record highs, particularly at the low-skilled end, as a result of net-zero influx of unskilled immigrants no longer competing in the labor market
Nope. Unemployment at record-highs, real-wages, stagnant.
(iii) Access to Medical care up, cost of services down as a result of net-zero influx of unskilled immigrants no longer inflating demand for services?
Nope. Medical inflation still at roughly double digits. Medical tourism abroad still on the rise.
In short, there’s no empirical argument that our net zero immigration environment has improved social welfare. Indeed, this net zero immigration environment has coincided with a rather dramatic worsening of overall welfare.
The obvious question then is why is this outcome something that is desirable to enforce and with the current condition already being net zero immigration, why is this enforcement effort being dramatically ratcheted up with Real ID and E-Verify systems consolidated under the auspices of DHS?
For libertarians it’s a question with an obvious answer. There is no welfare argument against freedom of movement, freedom of contract. If you want to experience a true welfare State, defining a “welfare State” to be a “mechanism of redistribution,” then no better way than totalitarian control of the freedom of movement and the freedom of contract. And this totalitarian control is a Papers-Please Political Economy.
The loss of economic welfare from the Papers-Please Political Economy is the obvious rejoinder to Milton Friedman’s “welfare argument.”
Hoppe’s “invited-contractual property rights” schema, as an absolutist dogma, results in a Papers-Please Political Economy. It’s only “enforceable” indirectly, via a totalitarian control over a general freedom of contract. It’s an utter violation of the libertarian principle and the Lockean proviso.
And the likes of Hoppe have to explain the social and demographic changes in Mexico while coming to grips with the fact that it is the conservative, evangelical Christian culture that is pushing/enacting things like E-Verify.
Finally, Rothbard. Rothbard, in his later years, would oppose immigration on the grounds that it would serve partisan political ends. And it is true that the likes of the Political left largely support immigration on the grounds/perception that it would reinforce a demographic trend that would lead to political domination. I would dispute that Prima facie assumption on the grounds that no one wants to migrate to a political economy that serves corrupt political ends. I used to argue this point frequently at Freedom Democrats, against both progressive assumptions and those underlying Arnold Kling’s “One Party State.” On this matter, the current condition speaks for itself.
A spectre is now haunting Northern Africa and the Middle East–the spectre of the collapse of the American-aligned Arab Nation State. What started from a single act of self-immolation by a fruit stand operator in Tunisia has now metastasized into a full-blown revolutionary wave that has spread to Algeria, Egypt, Jordan and Yemen. Ben Ali has already exited to Saudi Arabia and Mubarak may now follow. If Mubarak goes, expect the gated cul de sac community of former dictators in Riyadh to grow.
The US Political class reaction, as one would expect, has been dissonant. Two days ago, the official talking points of the Obama Admin were expressed by Hillary Clinton and Joe Biden.
“Our assessment is that the Egyptian Government is stable and is looking for ways to respond to the legitimate needs and interests of the Egyptian people.”
Is Mubarak a dictator? Joe Biden
“No. I think the time has come for President Mubarak to begin to move in the direction that – to be more responsive to some… of the needs of the people out there.”
Now the talking points have changed. The New Talking Points are that Obama has been secretly ahead of this issue for two years. Wikileaks cables are now appearing that suggest that the US has been providing material support to pro-democracy groups in Egypt. The Washington Post, the leading establishment cheerleader on the point that the Wikileaks cables have never provided anything new, is now suddenly promoting the WikiLeaks Egyptian Cables. Of course, there is news that Egyptian police are using U.S.-made tear gas against the demonstrators. And the US annually funds 1/3 of the Egyptian military budget–the same military that would be used in a crack down.
In the US, there is a certain irony that this Revolutionary Wave, full of “anti-government rhetoric,” follows on the heels of our own establishment political class ranting against the evils of anti-government rhetoric–it threatens civility, the established order, and it portends violence against the Political Class. The irony just thickens the air with more choking cognitive dissonance that is already replete with it. Wikileaks is now good. But we are nonetheless torturing a US Soldier to turn on Julian Assange so he can be extradited to the US for espionage. The US now claims that the Egyptian government’s control of telecommunication services abridges fundamental, universal rights, but Hactivist Anonymous, attempting an old school circumvention of these controls with respect to the Egyptian context, is being hunted down in the US by the FBI and DHS.
One of the more absurd things is the attempt by neoconservatives to expropriate the Revolutionary Wave as validation. What a brazen attempt to rewrite their history and intellectual intent. The Revolutionary Wave is threatening American-aligned Arab States. Neoconservative doctrine called for the explicit use of “benevolent US Military hegemony” to force a “democratic pro-American re-alignment” of non-American aligned Arab or Muslim states. The primary motivations were the security of Israel and the security of petroleum production. The “Domino Effect” was supposed to topple Iraq, Syria, Iran, Lybia, etc and install a pro-American aligned government in Palestine. It was not meant to topple Egypt, Jordan, Saudi Arabia, etc. The Revolutionary Wave is actually a repudiation of Neoconservative doctrine, and in particular, American Exceptionalism. The likes of Elliott Abrams instead try to pin this on the failure of “Arab Exceptionalism.” I don’t think so.
In historical context, the modern Arab State has it’s origins in the post WWI European partitioning of the old Ottoman Empire that resulted in a patchwork of territorial protectorates under the colonial thumbs of the European powers, particularly Britain and France. Post WWII signified the end of this colonial rule, meaning these “protectorates” became more or less independent states. Some, like Egypt, overthrew their monarchies and established a more “western” conception of a State. But this “independence” was relatively short-lived. Most, in the end, would become either Soviet or American “client States. This was the “cold war.”
Egypt, for example, became more or less a Soviet-client under Nasser but then, under Sadat, flipped to the US. After the assassination of Sadat, Mubarak would continue Egypt’s status as an American-client State.
Iraq, interestingly, was an example of an Arab State that actually never was either a Soviet or American Client State. It played both off each other. But it’s invasion of Kuwait, which threatened the US’s crown jewel Arab Client State, Saudi Arabia, triggered the Bush I “New World Order,” which was international sanction of US hegemony in the Middle East. It signaled the end of the cold war. The Soviet Union would soon be done. But Iraq actually didn’t topple. And there were still former Soviet-client States(e.g, Syria), that needed to be re-aligned. So, enter the Neoconservatives who viewed Iraq as the catalyst in a Domino theory to trigger full US alignment.
But US Military hegemony in the Middle East has ended up triggering a different sort of “domino effect.” The Revolutionary Wave is a revolt against the corrupt oligarchy of American-aligned regimes.
“Stability” is the buzzword, but I would suggest a more accurate term: “resiliency.” How resilient now is the DoubleThink of American Exceptionalism?
An operating principle I articulate on this blog is that Capitalism is undergoing a regime change. In American history, one can loosely identify the following capitalist regimes:
(1) The Hamiltonian American School
(2) “American Laissez Faire” Reformist
(3) New Deal(War) Central Planning
(4) Bretton Woods
It’s beyond the scope of this post to give a history lesson on each school. I’ve done that in a number of previous posts. But suffice to say, I think we are entering into (6). This would be something along the lines of a permanent war driven insider/outsider political economy. That’s a rather long-winded descriptive, so I go with the short-hand description: National Corporatism. Or, let’s just go with an even simpler description: Oligarchy.
Think I’m being too extreme? Too radical? I don’t think so. I’m just telling you in advance what you are officially going to be told. And, I suppose now, everyone should officially consider themselves officially served. I didn’t watch the political stagecraft Tuesday Night, but it appears Obama used the occasion to indeed announce the arrival of this new era. The World Economic Rules have changed was the theme of the SOTU.
So POTUS has made it official. A new capitalist regime is at hand. But I’m sure Obama would take exception to any critique of the “New Rulez” as oligarchy. No, the “New Rulez” are all about “competitiveness.” In Competitiveness, we have an acting GE CEOheading up new White House Council on Jobs and Competitiveness.
“We think GE has something to teach businesses all across America”
In Competitiveness, you have the RIAA’s star lawyer slated to become Solicitor General.
What actually is Competitiveness? It is competition for insider status in a Political Economy that plans against competition. So I would say in this regard that Obama’s high praise for GE is indeed a “teachable moment” for American business.
Of course, the empirical reality of “Competitiveness” differs from it’s casting in terms of political reality. In political reality, it’s the fierce urgency of “DoubleThink.”
“The rules have changed. In a single generation, revolutions in technology have transformed the way we live, work and do business. Steel mills that once needed 1,000 workers can now do the same work with 100. Today, just about any company can set up shop, hire workers, and sell their products wherever there’s an internet connection.
Meanwhile, nations like China and India realized that with some changes of their own, they could compete in this new world. And so they started educating their children earlier and longer, with greater emphasis on math and science. They’re investing in research and new technologies. Just recently, China became home to the world’s largest private solar research facility, and the world’s fastest computer.
The cognitive dissonance: The entrepreneur is a threat to the Status quo, thus the need of the Status quo to “breed” the entrepreneur. Actually, cognitive dissonance is the entrepreneur being a hero in one context and a threat in another context. DoubleThink is the art of simultaneously convincing oneself that the entrepreneur is both a hero and a threat without any “cognitive dissonance.” What you think about the entrepreneur depends on the immediate context.
Frankly, I don’t think at this point anyone with an internet connection is a threat to the status quo in “steel production.” But, I do think anyone with an internet connection is a potential threat to the status quo of IP. Of course, Obama appoints a RIAA lawyer to be the chief US government litigator.
The politics of “Competitiveness” always appeals to “Nationalism,” as if this thing represents some Nation-State struggle. Hardly…The so-called “Free Trade” agreements of today are actually primarily an instrument to unify the political classes against the entrepreneurial threat to the 21st Century Political Economy. “Competitiveness” is all about unifying the political classes. Frankly, if you tell me what the IP/Copyright laws will end up being at this century, I can tell you whether or not dystopia awaits the human race.