politics

Efficiency or Property Rights: Thomas Woods’ comments on the Chicago School of Economics

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This was originally posted at City of God.

Thomas Woods, in his book The Church and the Market, spends a little time in the first chapter distinguishing the Austrian and Chicago schools of economics. One major difference between the schools is on the issue of central banking and monetary policy. We’ve had occasion to discuss this on the blog in the past, and I’m not particularly interested in raising it again here. However, Woods brought to my attention another difference which is of much greater concern to me, and this is over a moral issue. The difference is this:

The classic case in Chicago law and economics, famously described by Ronald Coase, is the example of the train that emits sparks that set fire to a farmer’s crops. (The example occurs prior to the introduction of diesel engines.) Either the farmer or the train will have to bear the cost of this damage. On the basis of strict liability, of course, the farmer has the right to the property in question and therefore the right to enjoy its fruits unmolested. The train should compensate him for his loss or install some kind of spark retarding device. But Chicago decides this case in such a way that overall wealth is maximized. (25)

Thus economic efficiency becomes an ethical value that is weighed against the property rights of people. The Austrians vehemently disagree with this point. They argue

that the rights of property should not be compromised in order to satisfy any wealth maximization calculus, and that as a rule strict liability should be observed. (They offer these critiques in their capacities as moral philosophers rather than qua economists, a point to which we shall return in our discussion of economics as a value-free science.) Walter Block has described it as “evil and vicious to violate our most cherished and precious property rights in an ill-conceived attempt to maximize the monetary value of production.” (26)

Woods provides one quote from a defender of Coase to make clear that the Chicago school explicitly teaches what he says they teach:

In defense of Coase, Chicago economic Harold Demsetz argues that “[e]fficiency seems to be not merely one of the many criteria underlying our notions of ethically correct definitions of private property rights, but an extremely important one. It is difficult even to describe unambiguously any other criterion for determining what is ethical.” Here is efficiency analysis with a vengeance. (26)

Now, I’m not sure any other way to describe this theory besides the words Block used: evil. Quite clearly, this is a form of coarse utlilitarianism, and one which will undoubtedly help the well-connected over against those who have little wealth. And I think this point is something where those on the left and those who support a view of property rights as natural rights (be they conservative or libertarian) can find agreement.

Mayor of London barred entry into the United States on his British Passport

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In 2006, US immigration officials refused Boris Johnson, now mayor of London, entry into the United States on his British passport, saying that because he was born in the United States of America, they required that he travel on a US Passport into the US or have proof that he was no longer an American.  This proof is probably the Certificate of Loss of Nationality (CLN). Johnson writes:

So I circumnavigated America. I flew via Madrid, managing to beat the rest of my family to Mexico by 45 minutes; and yet I still seethe. It’s not just the stupidity of the rule that gets me. It’s the arrogance. What other country insists that because you can be one of its nationals, then you must be one of its nationals? Imagine if we told all British-born Americans that they could not arrive in this country except by use of a British passport. I haven’t seen anything so insanely possessive since the negotiations on the Common Fisheries Policy, when the Irish used to claim that the cod stocks of the Atlantic were still Irish in their fishy souls, even though they had long since emigrated to Portuguese waters.

As far as I can interpret the psychology of the rule, which has only been applied since 9/11, it is part of America’s new them-and-us mentality, the Manichaean division of the world into Americans and non-Americans, obliterating any category in between. Listen, buddy, the Americans seem to be saying. You got a right to be American? Then you do us the courtesy of travelling on the world’s number one passport when you come here. What you got to be ashamed of, boy?

I can tell you this:  the American tourist industry and airlines will lose a lot of business if a lot of accidental Americans have to circumnavigate the US.  This is dumb, dumber, and dumbest.  I too seethe.

I am victim II: A dialogue with Steve (a progressive Christian)

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Craig Carter has written an interesting post entitled, “Secular Politics Infiltrating the Church: Hell’s Scheme to Bring Down Evangelicalism.”  There I’ve entered into a rather lengthy discussion with a self-proclaimed progressive who apparently believes himself to be Christian.  I reproduce here my comments and his responses.  I think it demonstrates that while progressives claim to care about people, they really despise people and are more concerned about re-engineering society to make it more equal–who cares who dies or suffers along the way, just so long as the rich can no longer parasitically leech off of others.  I responded first to his manner in which he responds to Craig Carter and Gordon (another correspondent), while mercilessly libelling the Tea Party.  Later, I explained how progressive, with their need to enlarge the state, had forced me to renounce my US citizenship, resulting in my suffering the loss of my birth right.  The reason that I insist on telling my story about how I’ve suffered is that I still can.  Those whom the progressives around the world have murdered can no longer tell their story.

Peter W. Dunn said…

That’s amazing Steve. You praise Craig and Gordon for civil tone of their responses to you, and then insult the Tea Party, libelling them as liars. Wow. An entire movement of people who want smaller government libelled as liars. You called Ron Paul demonic.

I think you should read my blog Steve: The Righteous Investor. You could start with this:  Worship the invisible God or our modern Idols:  which? 

You wrote:

“Progressives are not trying to replace a deity through gov’t, as you suggest, but progressives do not believe in a theocracy. We believe that ended with Jesus. The gov’t should meet the needs of all people, not just those who are wealthy or favoured by majority status.”

Well with these lines you have proved Craig Carter’s main point in the post. Because a god or an idol is what we have faith in to meet all our needs. You suggest that it is government. I suggest that Jesus is still alive and that it didn’t end with Jesus but he still lives in our hearts by the Holy Spirit. I’m not advocating theocracy–like the progressives who believe in big government that meets all our needs–I believe in small government that doesn’t suck up all the oxygen in the room and thus allows other institutions, like the family and the church, to breath a little too. But you advocate government as panacea and that ultimately is evil.

The socialists, of course, reject God as Jehoveh Jireh, because they believe in government-jireh, which provides everything we need. Who needs faith in a God who strictly prohibits in his Ten Continue reading →

The best of all worlds: Candide’s Pangloss now working at Harvard University

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In a book entitled, The Better Angels of our Nature, Harvard Professor Pangloss (Steven Pinker) says we are living in a more humane world today (see his article “Violence Vanquished“).

Well, I beg to differ.  He argues that violent death is less frequent than in previous periods in human history, and that the number of people who die peaceably in their sleep all over the world is at a higher percentage than ever before. True, because he’s only counting those who manage to make it out of their mothers’ wombs without first suffering a violent genocidal demise.  That’s only 4 out of 5 people.  So stay out of your mother’s womb.  It is a game of Russian Roulette (I prefer my chances with six shooter).  But also, we are now on the verge of war breaking out all over the globe (starting with Egypt, Libya, Yemen, etc.) caused by economic instability.  Apparently, the Christian Century published similar drivel, just before the outbreak of World War I.  Today, with global instability caused by monetary policy, the doctrine of Total Depravity is gaining traction.

Pangloss pictured right: click on picture to watch video at Market Watch

Wesley Snipes: Tax Hero

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Wesley Snipes is in a Federal prison.  The reason is that the IRS needs to make victims out of some in order to make compliant sheep out of the rest.  This website, Freesnipesnow.com says that he is innocent.

I think it is a perverse form of justice when the law chooses to make an example of you so that others will be compliant.  Funny thing is that liberals* who don’t believe that the death penalty is  a deterrent, think it is perfectly fine to punish a man more severely than he merits so that others will fear and will comply with the tax law.  (*Liberals:  The majority of Federal bureaucrats are democrats.  Their jobs depend on it.)

In my book, any man that goes to a US federal prison unjustly is a hero.  Conrad Black is a hero who is suffering his punishment for conducting and selling a business in a manner that conformed to Canadian law (non-compete payments are normal up here) and because he committed an act in Canada (clearing out his office) that a jury decided was an obstruction of US justice.  The arm of US justice is long indeed.  Black is a hero.  Snipes is a hero.  Juries found both Black and Snipes guilty on the basis of the testimony of a scoundrel.  But the Feds don’t care about justice; they just care about convictions and breaking legs.  Just ask Scooter Libby or the late Senator Ted Stevens.

The IRS and the Federal justice system are the villains.  If you break the legs of one man, the others will be sure to pay their gambling debts:

Time has come to kill the behemoth.  States need to outlaw officers of the Federal government in their jurisdictions.  I’m just glad that I live in a country away from their reach.