On Markets, #1

First in what will probably be a very long series of posts on free markets.

This one actually has little to do with markets per se.  Here, I'm just kind of planting the field by way of setting a tone.  To start off, let me offer a bit of biographical perspective.

As a teen, I was no less liberal than any of my peers.  I wouldn't say I was ever really pinko, but I did admit regulation into my economic paradigm, and I was pro-choice (perhaps largely by virtue of being an angry, dissatisfied Catholic).  I wasn't extraordinarily pacifistic, but as a child I'd heard news of the SALT II talks and had watched Star Blazers, and so thought I had a pretty decent idea of what nuclear devastation might be all about...so I was decidedly pro-disarmament.  I didn't have a strong opinion on most social issues, and wasn't particularly pro- or anti-capital punishment, but I was very sympathetic to the aims and goals of groups like Amnesty International, and counted the founder of my high school's chapter thereof among my friends.  I'd been steeped in an environmentalist sensibility throughout my life by my family's interest in nature, and was concerned about the prospect of global warming on the basis of an article by Carl Sagan that I'd read in the mid-80s in one of the popular science magazines.

Adolescents are of course as diverse and complex a group of humans as any other, but there are two features that are fairly typical:

1.  They rebel against the perceived morality and / or ideology of their parents;
2.  They are prone to approval-seeking and peer reinforcement of their views.

Although there will always be plenty of exceptions to the generalization "teens tend to be fairly liberal," the above two conditions have a way of reinforcing ideological bias, and so, outside of some fairly well-delineated circumstances, a tendency toward liberalism tends to be the rule.  I perceived my parents to be typically conservative (a perception that would be dispelled much later), and I perceived authoritarianism to be associated with conservatism.

I had the very good fortune to be placed in several accelerated courses during my public schooling, from 5th grade onward.  One might call it "smart privilege."  In the Cypress-Fairbanks school district of the northwest Houston metropolitan area, the "gifted and talented" classes were designated "Horizons," distinct from the ordinary advanced ("K-level" and "AP") classes for those who were merely good students.  (I was not actually a good student, and didn't qualify for many K-level--or any AP-level--courses, but was in a Horizons class every year after moving into that district.)  The upshot of this was being able to constantly rub elbows with gifted and talented students, and being subject to their influence as well.  During my junior year of high school, I found myself in a Horizons civics class with several very bright people, engaged in a unit on debate.  I joined a team in order to argue the merits of the pro-choice position.  Prior to the debate, my partner and I psyched ourselves up for it by brainstorming, to get the creative juices flowing...brainstorming uses for aborted fetuses.

Only afterward did I realize we were psyching ourselves up in a somewhat different way, by dehumanizing the fetus.

I'd taken at least one art course every year since 7th grade.  In my senior year, I thought I would take a photography course concurrent with my art class; both would be taught by Ms. Scoggins, a particularly effective art teacher whom I'd had since freshman year.  But I ran afoul of an obscure rule regarding electives, and had to abandon one or the other course.  Since I couldn't afford the camera and processing materials required for the photography course, dropping it was the logical choice, but I was still left with the problem of selecting a new elective.  Having been encouraged by several English teachers (Mss. McFadden, Coburn, Kanyo) to develop my writing skills, I decided to try to land a spot on the school newspaper.  As the first six-weeks term was already well underway, and most of the students had been in journalism class for several semesters already, the teacher had to quickly evaluate my potential and find a place for me on the staff.  She asked me to put together an album review, and I wrote one for Pink Floyd's A Momentary Lapse of Reason.  She loved the review so much that she immediately offered me the Editor-in-Chief position, and I agreed, displacing the long-standing staffer Carl Jones (for which he has never forgiven me).

As Editor, I mostly contributed columns of an artistic nature, as well as the occasional commentary on school politics and the authoritarian nature of dress codes and hair codes.  I also, being very inexperienced at both managing a large team and handling the technical processes of running  a newspaper, did a fairly poor job of putting the paper out.  But it's undeniable that my editorial sensibility was fairly left-wing, at least with regard to the "social issues" that were within my purview as a high schooler.  And I received kudos from other students about those editorials, helping reinforce the perception that I was spot-on in my views.

The next year I began classes at the University of Houston.  Still seeking to develop as an author, I joined the Sci-Fi Fantasy Guild, a student organization composed of writers, artists and role-playing gamers, focused on imaginative fiction and realms.  I contributed a couple of stories to the journal, the Purple Podium, and put in my time at the Student Underground watching the club's carrel.  This was shared with the College Republicans, and adjacent to the College Democrats and Gay / Lesbian Student Association, so naturally I was on the scene quite frequently when the conservatives and liberals engaged in discussion.

And I found, over time, that the Republicans simply presented a better case.  Their arguments against abortion were pretty unassailable.  Their arguments against regulation made better sense.  Their arguments vis-a-vis the distinction between rights and privileges--or between civil rights and special rights--gradually brought me around to a more Constitutionalist, small-government ideology.  More and more, I found myself agreeing with the College Republicans.  The first of my youthfully-indiscreet positions to be fully abandoned was pro-choice.  The next was pro-regulation.

Several years later, having put in a stint in the Army and spent an aimless time working in contract labor and retail sales, I decided to have a go at the tech sector.  I had lived for a few years out in a small town, surrounding myself with the bohemian youth of the art underground, and becoming acquainted with a wider range of ideologies, particularly anarchism.  Around 1998, I moved back into Houston and took a temp job with a land data company, and for the next 5 years I moved from data entry to network technician to Web designer to developer.  During that time, my first real exposure to the Internet, I got into newsgroups and foruming--a step up from the BBSing activity of my earlier, DOS-based days in personal computing--and became a regular on several forum sites:  About.com, Delphi (Prospero), MAPS.  I got into many, many political arguments, often advancing an anarchistic point of view.  And again, gradually, I found myself learning and evolving ideologically.  Arguing with people who did so frequently, and who were learned in their fields, required me to do much research, to gain a better understanding not only of their positions but of my own.  It forced me to challenge many of my own assumptions.  In retrospect, this was sort of a boot camp version of the general process whereby many adults gradually shed their youthful liberalism and become conservatives:  getting "mugged by reality."

I had to abandon my anarchistic inclinations as I discovered certain truths of human nature and the role of government.  I eventually settled into a minarchist, right-libertarian mode, and I've remained there for about a decade, with little modification other than refinement to my understanding of macroeconomics and economic history.

It was on Delphi that I honed my chops.  I argued the pro-AGW side of the global warming debate, as well as other environmentalist positions, and argued in favor of free markets in pretty much every other context.  (There is no conflict here; markets are always the best solution, and regulation something to be avoided, except in situations where market forces do not exist to provide regulating pressure.  The ecosystem, it should be noted, has no market forces.)  I got to be good enough at it to regard it as a calling, and developed a set of stock arguments, which were often compiled into Word documents that could be brought to bear, copy-n-paste style, on any debate.  I also designed and built a personal weblog, run out of my home, but it was always just an afterthought, a vanity project (like most weblogs are), a site for me to practice coming up with new features without actually spending much time updating meaningfully.  I never publicized it, and very few people knew of its existence.

When MySpace became popular as a venue for socializing and debating, I got into that, and was active in several politically-themed groups.  When Facebook became the next big thing, there was an exodus of MySpace users to the new site, and I joined it.  I maintained relationships with many of my MySpace friends (and enemies) there, and it's still where I do the majority of my social networking.  Needless to say, upwards of 80% of my activity there is political debate, and I'm a member of an ever-growing, constantly-shifting cluster of groups that numbers in the few dozen.

To get to this point, I've had to become well-versed in:
--Paleoanthropology
--Ethology
--Evolutionary Psychology
--Sociology
--Physical and Cultural Anthropology
--Macroeconomics
--Archaeology
--History

It's much the same process, actually, as that whereby I've become an autodidact in science.  To understand life science, you have to understand biochemistry, which means you have to understand chemistry, which means you have to understand physics.  To understand politics, you have to understand society, which means you have to understand human nature, which means you have to understand animal nature.  The wider the base of disciplines you build on, the stronger and more mutually-supporting the structure.  By exposing yourself to multiple models and theories, you can begin to discern where the theories interconnect, where there is overlap, where there is that mutual support.  In the same way that biology and psychology benefit from being placed in an evolutionary framework, for purposes of sanity- and consistency-checking hypotheses, politics benefits from being placed in an ethological and anthropological framework.

To discuss the impact of all of this on my ideology would be well beyond the scope of this already-overlong post; consider it the mission of the weblog entire to expound on that impact, finding by finding.  The point I'm getting at is that being guided by preferences and preconceptions is no way to build a worldview.  It's a start, for most of us, but unless we're capable of abandoning our assumptions and starting anew, on the basis of evidence, we'll never mature.  If you still hold doggedly, at age 40, to the worldview you had at age 18, there's probably something wrong with your ability to adapt...in which case the irony inherent in your demanding that others change to suit your worldview because "it's time," while perhaps not manifest to you, should be quite obvious to everybody around you.

And that brings me to today's point.  In the course of one of my more recent Facebook arguments about the free market, I've been doing some digging into sources, and, in keeping with my general practices, have availed myself not only of literature promoting my views, but arguing against those views.  And a couple of things stand out about some of these "anti" sources.

1.  The people presenting the arguments are stuck in assumptions about the role of government that are easy for an adolescent to fall into, on the basis of anger and dissatisfaction with the state of the world;
2.  They represent the kind of ironic cynical idealism that wants the world to be quite different from the way it is, but maintains a terminal pessimism about human nature while still, somehow, granting to government all the noble sentiment they're unwilling to grant to industry, religion, the family, or society at large.

So for my inaugural post on markets, rather than argue any particular position, I'd like to simply ask the reader to check his or her assumptions.  To that end, I'm going to resort to the cheapest kind of argument possible:  one made already by someone else.  I'd like to direct your attention to the Freeman at fee.org.  Please take about 10 minutes to read two posts, each listing several misconceptions about free markets commonly held by opponents to markets.  Over the next few weeks, with a possible hiatus to focus on a crowdfunding effort, I'll be expounding on my own views, using some of that copy-paste technique to draw from my previous efforts.

7 Falsehoods About the Free Market

7 More Falsehoods About the Free Market

The General Welfare

I've had this argument in a number of ways the past couple of days.  In pulling up sources (primarily Madison and Jefferson), I've run across a wide range of citations in support of my view...and a couple of outliers arguing otherwise.  Here's a case in point.

What did our Founding Fathers mean by "general Welfare?"

The author of this article argues that the "general welfare" could be reconstrued to mean anything by later generations, since the Founders (aside from Hamilton) could not anticipate the evolution of the nation from agrarian to industrial society.  For this reason, only Hamilton's pro-taxation, pro-regulation interpretation of the General Welfare Clause is valid.

Here's my response.

I beg to differ.  Regardless of how the country was expected, by various personages, to evolve, the difference between "special" and "general" remains intact.  The general welfare can only be the welfare of the entire nation.  To the Founders (except quite possibly Hamilton), this meant one and only one thing:  a free market.  The expression "life, liberty and property," later bowdlerized as "life, liberty and the pursuit of happiness," was intended to define such a market, the kind of market that the revolutionaries--young and old, rich and poor--sought to secure for themselves.  Not only in the nation's Declaration of Independence, but also in various Declarations of Rights published by cities and colonies throughout the 1770s, does this expression occur.  To the Founders, freedom meant a free market.  And the various protests from 1773 onward demonstrate clearly that what was being protested was monarchic (state) interference in the market.

To provide for the "common defense" is consistent with the "general welfare," because it benefits all equally.  To "secure the blessings of liberty" is as well, and is really just a restatement of the Constitution's mission.  Only in a free market--wherein all individuals have property rights, and can pursue employment and / or wealth as they see fit--can liberty be truly secured.  As soon as the state begins imposing regulations on the market, property rights begin to become infringed.  Every law regarding what you can and cannot do with your own property--including KEEP it--is an infringement of property rights, and would have the Founders spinning in their graves.  The fact that this nation operated quite well for a century before imposing a federal income tax--and that, only temporarily--is a strong indication that the government doesn't need income taxes to fund its operations.  Only if you start adding "services"--none explicitly authorized in the Constitution, mind you--does it begin requiring things like income tax.  And you'll note, that as soon as it begins providing "services," it is no longer serving the GENERAL welfare at all.  It is serving special welfare by catering to the demands of special interests.

Welfare entitlements are the very worst offenders, and you'll no doubt be aware that the very label "welfare program" was chosen to exploit the Constitutional language, and not the other way around.  In any event, there is a substantial distinction between "promote the general welfare" and "PROVIDE welfare transfer payments."  The latter has nothing whatsoever to do with the general welfare.

Income tax is a blank check for government expansion, and that in turn is a guarantee of a continuing erosion of liberties.  The Founders, save perhaps only Hamilton, were aware of this.  This is why they argued against it (see Madison and Jefferson for particularly eloquent arguments).  Positive feedback loops ensure that, no matter how diligently we watch government, and however "well intentioned" its policies are (or claim to be), representation will eventually become more about diverting Treasury largess back to home districts than about preserving liberty.  We crossed that threshold long ago.


Sources:

"The Founders clearly understood the “general welfare” to mean the good of all citizens, not an open-ended mandate for Congress. The only good that applies to all citizens is freedom, and government’s proper role is the protection of that freedom. That was the meaning intended by the Founders."

The Founders and the General Welfare

"But admitting the distinction as alleged, the appropriating power to all objects of "common defence and general welfare" is itself of sufficient magnitude to render the preceding views of the subject applicable to it. Is it credible that such a power would have been unnoticed and unopposed in the Federal Convention? in the State Conventions, which contended for, and proposed restrictive and explanatory amendments? and in the Congress of 1789, which recommended so many of these amendments? A power to impose unlimited taxes for unlimited purposes could never have escaped the sagacity and jealousy which were awakened to the many inferior and minute powers which were criticised and combated in those public bodies."  -- Letter from James Madison to Andrew Stevenson

Article 1, Section 8, Clause 1:  Document 27

"As for property rights, they were at the heart of the dispute which led to the American Revolution. When Americans at the time listed the rights of man, they often said "life, liberty, and property." Boston's 1772 "Rights of the Colonists" were typical: "Among the natural rights of the colonists are these: First, a right to life; secondly to liberty; thirdly to property." As with happiness, this is not a right to property itself, but a right to use one's talents to acquire property, and to use it as one sees fit, as long as one does not injure oneself or others."

among these are Life, Liberty and the pursuit of Happiness