Magical Socialist Thinking

Back in the dark days of the 20th century, communists talked a lot about ‘scientific socialism.’ But now that socialism has been shown empirically to be a comprehensive failure, the only people advocating socialism do so on the basis of faith and magical thinking, not science. Case in point is Vermont Senator Bernie Sanders, an avowed socialist who for some reason is running for the Democrat Party’s presidential nomination. The other day, Sanders told an interviewer the following:

At the end of the day, you don’t necessarily need a choice of 23 underarm spray deodorants or of 18 different pairs of sneakers when children are hungry in this country.

In case you’re failing to see the connection between deodorant choice and child hunger, we believe Senator Sanders has in mind a 3-step process.

Step 1:  Fewer deodorant choices.

Step 2:  ???

Step 3:  No more hunger!

Okay, we don’t get it either. It can only be some kind of puritanical quasi- religious thinking. Too much decadence in deodorants offends the gods, so if only we had more humble toiletries, the gods would smile on us. Or something.

We’re also deducting some points from Sanders for using the ubiquitous and annoying colloquialism “at the end of the day.” Yeesh.

Concerning hungry children in America, here’s an idea. Why don’t we give poor people a swipe card they can use to spend on food…oh, wait.

Sanders’ magical thinking inspired Remy Munasifi to create a cool parody video; see below. Bonus points to Remy for choosing background music from Erik Satie.

Finally, Sanders’ Socialists Against Choice stance reminds us of this classic Wendy’s commercial from the 1980s–The Soviet Fashion Show (also embedded below.) We agree with Wendy’s that “having a choice is better than not.”

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Then they came for the comedians

Friedrich Hayek, in his 1944 classic The Road to Serfdom, argued forcefully that socialism and freedom are incompatible. For contemporary evidence in support of Hayek’s argument, consider Venezuela, where the socialist government is so keen on controlling speech that they’re shutting down the country’s comedians. 

Laureano Marquez was performing a benefit at his old high school in the Venezuelan city of Maracay. The comedian dwelled on the absurdities of life in this oil-rich nation, where gas is cheaper than water but it’s hard to find milk, toilet paper and many other everyday goods.


Turning serious, Marquez tells the crowd that the socialist revolution, launched 16 years ago by the late Hugo Chavez, is collapsing under the weight of bad policies and corrupt public officials.

That message doesn’t sit well with Venezuela’s president, Nicolas Maduro. Besides jailing opposition leaders and cracking down on protesters, the Maduro government is now going after comics.

Marquez says that three of his recent shows were canceled after all three clubs that booked him were suddenly closed down for alleged tax evasion. He’s also been shut out of government-run theaters and hotels.

Another headache is securing city permits to perform. Requests from controversial comics are often rejected by mayors loyal to Maduro, according to comedian Alex Goncalves.


Political satire in all forms is getting harder to find in Venezuela. Last year, the editorial cartoonist for the country’s largest newspaper was fired for depicting the national health care system in ruins.

Also gone is Chataing TV, a popular fake news show.

Last year the show’s host, Luis Chataing, made fun of the government’s frequent claims of coup plotting by the opposition. In a skit, Chataing portrayed a government bureaucrat fabricating evidence of a conspiracy with paper, scissors and glue as if part of a kindergarten art class.

The crowd loved it. The show was canceled the next day. Chataing said the government pressured the station’s owner to take him off the air, a claim President Maduro brushed aside.

In contrast to socialism, a market economy with limited government would not even have any mechanisms in place for controlling people’s speech. But socialism by definition means empowering the state to control the economy, which requires controlling the people. Notice how many different ways, even in this brief article excerpt, socialism empowers the government to repress speech.

  • The government can stop comics from performing in theaters and hotels, because under socialism, the theaters and hotels are “government-run.”
  • They enact so many laws that everything is a crime, so they can always find some rap to pin on whomever they want. Hence, clubs that book a dissident comic are “suddenly closed down for alleged tax evasion.”
  • Everything has to be regulated, so a comedian can’t perform without a city permit, which gets denied by the pro-regime mayor.
  • Goodness only knows what leverage the government used to get the cartoonist fired or the Chataing TV show cancelled. Threatened denial of a broadcast permit?

The good news is that if the Venezuelan regime is so insecure that they cannot tolerate a bit a humor, that regime is probably not long for this world. We predict that regime change will come to Venezuela fairly soon.

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Immigrants Hostile to Liberty?

Another day, another attack on free speech. This latest attack comes from an illegal alien. And not just any illegal alien. Gaby Pacheco is an immigration activist who testified before Congress, and is the Obama Administration’s poster girl for legalizing millions of other undocumented Democrats.

Pacheco, an illegal immigrant from Ecuador, is the program director of the amnesty activism group, founded the Florida immigrant youth network, and led a national Trail of Dreams four-month campaign walk from Miami to the nation’s capital.

Her testimony before Congress—what she says was the first by an illegal alien woman—was in favor of the Senate “Gang of Eight” bill from last Congress that Sen. Marco Rubia (R-FL) pushed through the U.S. Senate alongside Sen. Chuck Schumer (D-NY), the future likely Senate Democratic leader.

The Obama White House called for passage of the DREAM Act, citing Gaby Pacheco as one of the immigrants this country so desperately needs.

In at least one respect, however, Pacheco is less than an ideal immigrant, since she demonstrated on network television that she either doesn’t understand, or doesn’t agree with, the First Amendment. This revelation emerged from a confrontation with author Ann Coulter, a graduate of a top law school who knows what she is talking about. Here’s the key part of Coulter’s exchange with Pacheco.

“There’s freedom of speech and there’s also hate speech,” Pacheco told Coulter. “I wholeheartedly believe in our First Amendment right. But many of the things you say on TV, on the radio, in your books, not only do they incite fear—but they also incite hate. So I wanted to ask you if you feel you’re abusing your First Amendment rights and do you think legitimately what you are saying is right?”

“Well, two points,” Coulter said. “One is: you don’t understand the Constitution if you say there’s free speech and then on the other hand there’s hate speech –”

Pacheco cut her off: “No I know that under the law and the Constitution there are both—“…

“No. There’s speech,” Coulter explained. “There’s not speech and hate speech. And judging by the last question, apparently you people can’t tell the difference in what I’ve actually said and some crazy parody site. Because — I don’t know what you think is ‘hate speech.’ I don’t engage in hate speech. I engage in speech. And yes, it’s part of the long, Anglo-Saxon tradition of thinking that with free speech, and the contest of ideas, the truth will emerge. It goes back to John Stuart Mill.”

[Illegal alien talking over Coulter again…]

“This is part of the cultural attributes of America that will change by dumping third worlders on the country.  You don’t have a tradition of John Stuart Mill.”

Coulter is of course correct that the First Amendment has no exception for ‘hate speech,’ whatever that is.

We are generally in favor of free movement of peoples. In the past, immigrants contributed a lot to America, and they can contribute a lot to America’s future as well.

But if having relatively open borders means letting into America many millions of people who carry deep-seated intellectual or cultural hostility to the liberties traditionally enjoyed by the English-speaking peoples, then, no deal.

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The Leonidas of WWII

We like to think we know at least as much history as the average person, including the history of WWII. But reading some of the tributes published last Memorial Day weekend, we came across a fascinating bit of history about which we were unaware. The story concerns Gunnery Sergeant John Basilone, the only enlisted man in the U.S. Marines to receive both the Medal of Honor and the Navy Cross during WWII.

In October 1942, Basilone was in charge of a group of 15 men defending an important pass on the island of Guadalcanal. The Japanese threw the better part of an entire combat regiment–several hundred men–at Basilone’s position, but could not break through. After three full days of nearly continuous fighting, only Basilone and two of his men remained standing, and one of them was missing a hand. But on the other side, virtually the entire Japanese regiment had been annihilated.

Basilone moved an extra gun into position and maintained continual fire against the incoming Japanese forces. He then repaired and manned another machine gun, holding the defensive line until replacements arrived. As the battle went on, ammunition became critically low. Despite their supply lines having been cut off by enemies in the rear, Basilone fought through hostile ground to resupply his heavy machine gunners with urgently needed ammunition…

Afterwards, Private First Class Nash W. Phillips, of Fayetteville, North Carolina, recalled from the battle for Guadalcanal: “Basilone had a machine gun on the go for three days and nights without sleep, rest, or food.”

Largely forgotten by the American public for over 60 years, Basilone’s heroics were brought back to the public’s attention in 2010 by the HBO miniseries The Pacific. Since we don’t have cable, we missed this series, but HBO’s depiction of the events on Guadalcanal, linked below, must rank as one of the most intense combat scenes ever committed to film. The action is dramatized and synthesized, so that events that transpired over three days seem to occur within a matter of minutes. Nonetheless, HBO made a concerted attempt to attain historical accuracy, and Basilone’s actions as depicted are based on fact, including:

  • repairing a machine gun in the midst of combat (2:40)
  • getting 3rd degree burns as he carried his searing hot machine gun without an asbestos glove (3:20)
  • having to move the piled corpses of Japanese soldiers away from the front of his machine gun so that he could have a clear field of fire (6:30)
  • fighting his way through enemy territory in order to obtain ammunition (7:10)

Yes, the Basilone Memorial Bridge on the New Jersey Turnpike is named for John Basilone, a native of Raritan, NJ.

Basilone was subsequently killed in action on Iwo Jima, in 1945.

Watch HBO’s reenactment of combat on Guadalcanal here. Yes, Japanese troops really did fearlessly make charges like this against entrenched machine guns during WWII. It was called the Banzai charge and sometimes succeeded, as it almost did on Guadalcanal, in overrunning the defensive position.


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A Memorial Day Story

On this Memorial Day, the Washington Post published a moving piece about how for 70 years Netherlanders have been visiting a military cemetery near the German border to honor the graves of American soldiers. The Netherlanders’ commitment to this task is so strong that more than 100 families seeking to ‘adopt’ a grave of an American GI had to be placed on a waiting list.

Gennaro “Jerry” Palmento was just 19 months old when his father, Army Pvt. Jerry C. Palmento, was killed in a field by heavy artillery fire in Alsdorf, Germany, on Nov. 11, 1944, and buried in Plot G, Row 6, Grave 19 in Margraten. He has kept a trove of his father’s war-zone letters to his mother, Rita Gentile, who later remarried, and he wells up when he reads the references his dad made to him as “Pumpkin.”

Palmento was in his 20s when he first learned that his dad’s resting place was being tended. “I can hear my mother saying, ‘Someone brings flowers to the grave,’ ” Palmento remembered. “I was happy about it. But Holland seemed like 10,000 miles away.”

Decades passed before the retired public school music teacher went in search of the Dutch family after he heard about a neighbor’s visit to Margraten.

And that was how he began e-mailing the Stienens, who live about 30 minutes away from Margraten in Heerlen and who had been making sure his father’s grave wasn’t forgotten since the 1940s.

The first adopters were Theo and Maria Stienen. After they died, responsibility for the grave was passed on to their oldest son, Theo, a retired coal miner, and his wife, Irene Stienen, who worked as a caterer.

They continue to visit the cemetery three or four times a year to place flowers by the grave. Their children and granddaughter, Maureen Butink, 24, also go.

Some of Butink’s favorite childhood memories are of visiting the cemetery with her grandfather. They’d pick up white roses and place them by Palmento’s white marble cross.

Though her own life is far removed from the war, Butink said she feels a strong connection to the cemetery because, as her grandfather always told her, the Americans buried in Margraten are “the founders of our freedom.”

“My daughter, who is 2 years old, she will be the fifth generation,” Butink said, “and I hope that when I can’t take care of the grave, she will take it over.”

This dedication by the Dutch is impressive and shows true class.

John Nash Dies in Crash

Sad news to report as John Nash, one of the finest mathematical minds of the last century, and co-winner of the 1994 Nobel Prize in economics, was killed in a taxi accident yesterday on the New Jersey Turnpike. He was 86.

Nash’s remarkable life story, including his struggle with mental illness, was the subject of the Oscar-winning 2001 film, A Beautiful Mind, based on a book by Sylvia Nasar.

Nash’s salient contribution to economics was his solution concept for finding the equilibrium of a non-cooperative game. His solution is now famously known as “Nash equilibrium.”

At Power Line, Steven Hayward quotes a psychiatrist’s debunking of some of the ‘myths’ surrounding Nash. We thought this one in particular was interesting.

During his manic/psychotic episodes, Nash would become paranoid (this happens in mania) and would then begin spouting crazed LEFTWING fantasies. When he was normal, he was politically conservative. The movie “A Beautiful Mind” deliberately reversed this because of its obvious implications.

So Nash was left-wing when crazy, and conservative when sane. Sounds about right.

Here’s some more of the psychiatrist’s attempt at myth-busting.

The bar scene in “A Beautiful Mind” likewise gets [Nash equilibrium] 180 degrees wrong—going for the non-beautiful girl is NOT a Nash equilibrium. The setup cannot produce a Nash equilibrium at all.

Is that correct? Let’s consider the question carefully. Here is the scene from the movie.

As the psychiatrist indicates, the proposed solution in the film is for Nash and his friends to ignore the hot blonde, and to go for her less-hot friends. As Russell Crowe, playing Nash, explains:

If we all go for the blonde, we block each other, and not a single one of us is gonna get her. So then we go for her friends, but they will all give us the cold shoulder because nobody likes to be second choice. What if no one goes for the blonde? We don’t get in each other’s way, and we don’t insult the other girls. That’s the only way we win.

The psychiatrist asserts that this strategy does not constitute a Nash equilibrium. By definition, a Nash equilibrium exist if

each player has chosen a strategy and no player can benefit by changing strategies while the other players keep theirs unchanged.

The proposed set of strategies is for all the guys to ignore the blonde, and to approach her friends. In this case, however, a guy can in fact “benefit by changing strategies while the other players keep theirs unchanged.” A guy would benefit by changing his strategy, going for the blonde, and not getting blocked by the other guys who are keeping their strategy unchanged by going for the friends. This is true for each guy, so every guy would want to deviate from the strategy of ignoring the blonde. Since all the guys want to change their strategy, we do not have a Nash equilibrium. The psychiatrist is correct that ‘everybody ignoring the blonde’ does not constitute a Nash equilibrium.

But what about the psychiatrist’s other claim that the “setup cannot produce a Nash equilibrium at all?” This is not true. In fact, this setup has more than one possible Nash equilibrium. Specifically, there are as many Nash equilibria as there are guys among Nash and his group of friends. That’s because the following strategy is a Nash equilibrium: One and only one guy approaches the blonde, while all the other guys approach her friends.

This strategy is a Nash equilibrium because no guy can benefit from deviating from it, assuming that all the other guys stick with it. Consider first the one guy whose strategy is to go for the blonde. If all the other guys’ strategies remain unchanged, it means the other guys all ignore the blonde. That leaves the one guy a clear, unblocked path to the blonde, and he has no reason not to take it. So he sticks with his strategy of going for the blonde.

Given that this guy is going for the blonde, none of the other guys wants to go for the blonde, because he and the first guy will block each other and end up with nothing. Hence the other guys prefer to stick with their strategy of ignoring the blonde and instead approaching her friends. Everybody therefore sticks with his strategy, and we have a Nash equilibrium.

Of course, our analysis leaves open the question of which one of the guys gets the exclusive shot at the blonde. Maybe Nash and his friends could decide by drawing straws. But once decided, none of the guys would have an incentive to deviate from the plan.

In any event, RIP John Nash. We hope he has gone to a better place. Maybe a bar where all the girls are blondes.

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America’s Political Class Uses Sophistry to Legitimize its Theft

A leading source of power for the Political Class is the ability to forcibly take money from those who have earned it and redistribute it to those who have not. This redistribution cannot withstand moral scrutiny, and in fact amounts to, in a word, theft. But the Political Class, in order to exercise power, needs this theft to continue. The Political Class needs, therefore, to convince itself and others, against both facts and logic, that theft is not theft.

Now, usually the most effective method for a thief to evade responsibility for his crime is to evade detection. But when evading detection is not possible because it is obvious to all that the thief has taken property from others, the thief might try to argue that the victim had no right to retain the property in the first place. This is the argument now being used by the Political Class to excuse its thievery. Specifically, leaders of the Political Class are asserting that successful people didn’t really earn their success, and so by implication, have no legitimate right to keep their own money.

As part of the Political Class’ campaign to delegitimize success, Senate candidate Elizabeth Warren famously declared back in August 2011 that
“There is nobody in this country who got rich on his own — nobody.” That sentiment was echoed a few months later by Barack Obama: “If you’ve got a business—you didn’t build that. Somebody else made that happen.”

Recently, Obama doubled down on the notion that success is unearned by comparing successful people to lottery winners. “Society’s lottery winners,” he called them.

This comparison clearly disrespects peoples’ achievements because winning the lottery involves no hard work, inspiration, or significant risk-taking. All that is required is pure luck. Is that how people actually get rich, just pure luck?

Henry Ford got rich by revolutionizing the auto industry. Bill Gates got rich by revolutionizing the computer industry. Did those guys really achieve no more than someone who lucked out by purchasing the right scratch ticket?

Again, the object here is to undermine the right of people to keep their own hard earned money. If people get wealthy only by luck, then they can make no legitimate moral claim to their own money, and the government therefore is justified in taking the money in order to compensate those who are “unlucky.”

Here’s the context in which Obama used his lottery metaphor.

One of the ways of fighting poverty, he proposed, was to “ask from society’s lottery winners” that they make a “modest investment” in government programs to help the poor.

So Obama’s statement amounts to three terms: a verb (ask), a direct object (lottery winners), and effectively, an infinitive (to invest). Ask => lottery winners => to invest. The ‘lottery winners’ term is clearly objectionable and, indeed, offensive. The Great Thomas Sowell points out that also the other two terms are objectionable, and are in fact weasel words.

Since free speech is guaranteed to everyone by the First Amendment to the Constitution, there is nothing to prevent anybody from asking anything from anybody else. But the federal government does not just “ask” for money. It takes the money it wants in taxes, usually before the people who have earned it see their paychecks.

Despite pious rhetoric on the left about “asking” the more fortunate for more money, the government does not “ask” anything. It seizes what it wants by force. If you don’t pay up, it can take not only your paycheck, it can seize your bank account, put a lien on your home and/or put you in federal prison.

So please don’t insult our intelligence by talking piously about “asking.”

Thomas Sowell

Thomas Sowell

And please don’t call the government’s pouring trillions of tax dollars down a bottomless pit “investment.” Remember the soaring words from Barack Obama, in his early days in the White House, about “investing in the industries of the future”? After Solyndra and other companies in which he “invested” the taxpayers’ money went bankrupt, we haven’t heard those soaring words so much.

Obama’s anti-success rhetoric and weaselly euphemisms are indeed an insult to thinking and freedom-loving Americans. But since there are fewer such Americans nowadays, Obama’s appalling rhetoric works for him. As Sowell puts it:

The fact that most of the rhetorical ploys used by Barack Obama and other redistributionists will not stand up under scrutiny means very little politically. After all, how many people who come out of our schools and colleges today are capable of critical scrutiny?

And so the Political Class, led by the likes of Obama and Warren, continues its campaign of sophistry, intended to convince a venal and degraded American public that all money ultimately belongs not to the people who earned it, but to the government, which happens to be controlled by, very conveniently, the Political Class.

This sophistry seems to us deliberate, cynical, and disingenuous. But maybe we’re reading too much into it. Maybe Obama and Warren are just exhibiting the effects of psychological projection. Since Obama and Warren both got rich without producing anything of value, they think that’s how everyone gets rich.

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Grade Inflation Even Worse than It Looks

Graduation ceremonies are being held around the country this week, and many of the graduating students boast very high GPAs. In fact, some students nowadays even graduate with a perfect GPA of 4.0. Back in our day, a 4.0 was unheard of.

Most high-GPA students take great pride in their grades, but we are generally not impressed, even with the students sporting 4.0. We’re not impressed because we know how much, over the years, grades have gotten inflated, and standards have fallen.

Our friend Mark Perry recently commented on a fascinating graph, taken from

gradesMark notes the systematic reordering of the frequency distribution across decades.

Mark_Perry_grade_inflationWhen over 40% of grades are As, a lot of pretty ordinary students are going to have high GPAs. And when even ordinary students get As, it’s highly unfair to the few truly outstanding students because they are left with no way to distinguish themselves.

But the situation is even worse than it appears. Students are not merely receiving higher grades, on average, for the same work. Students are receiving higher grades while working less, on average. A very careful study by economists Philip Babcock and Mindy Marks finds that, since 1961, the average university student’s reported study hours have fallen by about 40 percent.

In 1961, the average student studied 24 hours per week to earn a C+. Now the average student needs to study only 14 hours to earn a B+. That is a dramatic erosion of academic standards.

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Asset Forfeiture Updates

We reported a couple of weeks ago about the case of Lyndon McClellan, a small businessman who had his $107,000 bank account seized by the IRS even though he had committed no crime. The IRS tried to justify the seizure as falling under ‘asset forfeiture’ laws.

Well, we are happy to report that after much public pressure, and litigation by the Institute for Justice, the IRS has relented and has returned McClellan’s $107,000. Note, however, that before returning the money, the thieves in government tried to keep half of it. They also tried to shut McClellan up and stop him from publicizing his case. McClellan received an arrogant letter from an Assistant U.S. Attorney stating as follows.

Whoever made [the case file] public may serve their own interest but will not help this particular case. Your client needs to resolve this or litigate it. But publicity about it doesn’t help. It just ratchets up feelings in the agency. My offer is to return 50% of the money.

Well, from our perspective, it’s government thievery that “ratchets up feelings” among the justice-loving and law-abiding citizenry, and our “offer” is for civil forfeiture statues to be entirely repealed or declared unconstitutional. In the meantime, any government agents who attempt to violate citizens’ rights through civil forfeiture should be tarred and feathered.

McClellan’s case is still not entirely resolved, as he and the Institute for Justice are still fighting to get the government to pay interest and costs.

Even after he recovers his bank account, Lyndon is still out tens of thousands of dollars, thanks to the government’s actions. Lyndon paid a $3,000 retainer to a private attorney before IJ took the case on pro bono, and he also paid approximately $19,000 for an accountant to audit his business and to provide other services to help convince the government he did nothing wrong. The government is refusing to pay those expenses. And the government also is refusing to pay interest on the money.

“The government cannot turn Lyndon’s life upside down and then walk away as if nothing happened,” said Robert Everett Johnson, an attorney at the Institute for Justice who represents Lyndon. “Lyndon should not have to pay for the government’s lapse in judgment. And the government certainly should not profit from its misbehavior by keeping the interest that it earned while holding Lyndon’s money. We’ll continue to litigate this case until the government makes Lyndon whole.”

McClellan’s case involved the IRS, but a number of other agencies are using asset forfeiture to steal money. Here’s a recent case involving the Drug Enforcement Administration.

Joseph Rivers was hoping to hit it big. According to the Albuquerque Journal, the aspiring businessman from just outside of Detroit had pulled together $16,000 in seed money to fulfill a lifetime dream of starting a music video company. Last month, Rivers took the first step in that voyage, saying goodbye to the family and friends who had supported him at home and boarding an Amtrak train headed for Los Angeles.

He never made it. From the Albuquerque Journal:

A DEA agent boarded the train at the Albuquerque Amtrak station and began asking various passengers, including Rivers, where they were going and why. When Rivers replied that he was headed to LA to make a music video, the agent asked to search his bags. Rivers complied.

The agent found Rivers’s cash, still in a bank envelope. He explained why he had it: He was starting a business in California, and he’d had trouble in the past withdrawing large sums of money from out-of-state banks.

The agents didn’t believe him, according to the article. They said they thought the money was involved in some sort of drug activity. Rivers let them call his mother back home to corroborate the story. They didn’t believe her, either.

The agents found nothing in Rivers’s belongings that indicated that he was involved with the drug trade: no drugs, no guns. They didn’t arrest him or charge him with a crime. But they took his cash anyway, every last cent, under the authority of the Justice Department’s civil asset forfeiture program.

This Rivers guy was definitely railroaded, but he made a big mistake allowing the DEA agent to search his bag. Here’s some worldly advice for our younger readers–never consent to a search by a government agent unless that agent shows you a warrant, signed by a judge. All you have to say is, “I’m sorry, officer, but I don’t consent to a search.”

Guess nobody ever told Joseph Rivers that. And it’s surely not something he ever would have been taught in a government school.

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In Defense of Political ‘Corruption’

The Obama Administration this week actually did something we agree with; it approved the first of several necessary permits for Shell to drill some new oil wells in the Arctic, off the coast of Alaska.

Shell has proposed drilling up to six wells within the Burger Prospect in the Chukchi Sea, about 70 miles northwest of the Eskimo village of Wainwright. The Interior Department ordered a halt to a previous drilling plan after it ran into safety problems.

But on Monday, the Interior Department determined that a revised plan “would not cause any significant impacts” to human populations, the environment, historical places or endangered species.

The decision to grant the permit has thrown environmentalists into a tizzy. Bill McKibben, who teaches environmental agitprop at Middlebury College, expressed his frustration at

The Obama administration’s decision to give Shell Oil the go-ahead to drill in the Arctic shows why we may never win the fight against climate change. Even in this most extreme circumstance, no one seems able to stand up to the power of the fossil fuel industry. No one ever says no.

McKibben is correct that this victory for Shell is attributable to their political clout. And political clout involves the ability to deliver to politicians either money or votes. Shell wouldn’t seem to be able to control many people’s votes, so the source of Shell’s power must be money. By hiring lobbyists and contributing to political action committees and other pressure groups, Shell can use money to influence government policy in its favor.

This sort of influence of money on politics is what people often describe as money ‘corrupting’ politics. The idea is that without the influence of money, politicians and regulators would be free to objectively set policies that best serve the public interest. Or, in a more populist version of the theory, without money in politics, the policies enacted would more faithfully represent the will of the people. In this view, special interest money is corrupting, so the way to get better policies and governance is to remove or limit the role of money in politics. This is the argument for enacting legal restrictions on money in politics, such as so-called campaign finance ‘reform.’

The history of campaign finance laws, however, shows that removing money from politics is easier said than done. People will find ways to circumvent the laws, often with unintended and undesirable consequences. Trying to insulate politics from money is like trying to bind jello with a rubber band.

But leaving aside the practical and legal difficulties, would removing money from politics really be a good thing? Does money influence policy for the worse, or for the better?

Consider the case in question–Arctic oil drilling. In this case, it’s quite possible that the political market produced the efficient outcome. Allowing drilling is efficient if drilling produces more value than not drilling (leaving the sites untouched.) Shell was willing and able to devote resources to influencing the political market precisely because Shell expects to make money by drilling. And they expect to make money by drilling because drilling creates value.

The environmentalists also spend money on politics, and they’re willing to do so because they derive value from the opposite policy–not drilling. But in this case, the environmentalists couldn’t match Shell’s clout. Why? Perhaps because they don’t value not-drilling as much as Shell values drilling. In other words, because drilling creates more value than not drilling.

At least to some degree, the influence of money in politics makes the political system operate like a market. And markets are efficient. It follows that selling policies to the highest bidder, which most people call ‘corruption’, would generally improve efficiency.

The logic of the argument, applied to Arctic drilling, goes like this.

=> Drilling creates more value than not drilling (so drilling is the desirable policy) => Since drilling creates more value than not drilling, there’s more money available from drilling => Shell values drilling more than the environmentalists value not drilling => Shell is willing and able to spend more on influencing the political system to approve drilling than environmentalists are willing and able to spend to stop it => the greater resources on the pro-drilling side influence the political system to approve drilling => we get the efficient outcome.

The interesting thing is that, in an efficient political market, the politicians and bureaucrats who make the decisions don’t even have to know anything about the costs and benefits of the policy. All they need to know to make the efficient choice is to side with whichever party spends the most money!

Remove money, however, and the political decision makers would find themselves adrift at sea. We want the politicians and regulators to choose the efficient policy, but how would they know which policy, drilling or not drilling is efficient? To determine which policy creates the most value, the political decision makers would need to have an awful lot of information that would be difficult or impossible for them to obtain. Moreover, the policymakers would have little or no incentive to try very hard to obtain that information. And lacking the relevant information, the decision makers might easily be swayed by misinformation and political propaganda.

This same lack of relevant information would also undermine the results of direct democracy. For instance, suppose we held a plebiscite that asked the American public to vote directly on the question of whether Shell should be permitted to drill in the Arctic. In this case, the overwhelming majority of voters would possess neither the information nor the expertise necessary to evaluate the costs and benefits of drilling. Furthermore, a great many voters would be swayed by appeals based on emotion rather than logic. As a result, direct democracy would not reliably attain the efficient outcome.

Our argument leads to a startlingly counter-intuitive conclusion: opacity and special interest money can lead to better policies than can considered judgment based on transparency and open debate, untainted by money.

We don’t know the details of how, exactly, Shell went about winning over Obama’s Interior Department. That process was relatively opaque, and probably involved activities that Shell and their interlocutors in government would not brag about to their grandchildren. But that process, opaque and perhaps even somewhat sleazy, probably made the right choice on drilling.

In contrast, a freewheeling debate on drilling would likely offer up an object lesson on the limits of knowledge and human reason. For debate alone, without the influence of money, to settle on the efficient choice would require a considerable element of luck.

Opacity and influence peddling–good. Transparency, debate, and considered judgment–bad. The world doesn’t work the way most people naively think it does.

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