September 10, 2004 6:30 PM

Anti-Bush sentiments from around the net

Doug Bandow of Cato on Why conservatives must not vote for Bush.
William Saletan in Slate on why the worst defense is a bad offense.
The Financial Times Editorial Board say that it is time to consider withdrawal from Iraq.

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September 10, 2004 12:49 PM

Dreams vs. Reality

Often, people propose that the government "do something" about a particular problem. They describe some sort of plan, and they claim that, properly executed, the plan will produce the results that they want.

What they ignore, however, is that it is rarely the case that a plan can be executed precisely as envisioned.

Chess players and computer security professionals learn a hard lesson early in their careers: you must assume that your adversary will behave intelligently, not that he will behave stupidly. You must judge your plans not against what your wildest dreams, but against what will happen if a smart opponent attempts to thwart your actions.

Similarly, when judging the proposal that the government undertake some action, one must consider what will happen if real-world bureaucrats, not saintly geniuses, execute the plan, and what will happen if an array of real world forces interfere with it.

For example, consider the dream a number of neo-conservatives had when they dreamed up the idea that a strong U.S. should re-shape the Middle East by invading selected countries and imposing democracy by force majeur. (This isn't a conspiracy theory — the idea was written about in public even before the 2000 elections.)

Now, it is all fine and well to daydream about our military might sweeping aside dictatorships without loss of life, and of crowds of cheering people, freed of decades of tyranny, greeting us with bouquets of flowers in the streets, and immediately setting up Western style democracies.

However, in the real world, we have a military that is not run or staffed exclusively by saintly geniuses. Opponents are also unlikely to cooperate with our plans — they will seek the most effective possible means to thwart us, and sometimes, they'll be able to find such strategies.

We must therefore not judge plans against our hopes and dreams, but against what is likely to happen in the real world. Indeed, the prudent planner judges a plan not only against the best case scenario but against a worst case scenario, because sometimes the worst case, not the best case, is what happens.

When examining a proposed government action, we must be especially skeptical, since there is no mechanism that will act as a check on poor performance. In the free market, companies that fail to meet their customer's needs go bankrupt, but governments are funded by taxation and have no such limitation. A CEO can claim in public all he likes that he was not responsible for "unforeseen circumstances" but pleading will not save his company from dissolution. If, however, a military commander's mistakes result in massive deaths, or if a bureaucrat's mistakes result in vast waste and the failure of a program, it is unlikely that they will be punished or that their work will be terminated. Instead, if they argue well, they might even get additional resources committed. In the commercial world, the best run organizations get more resources with time, and the worst run disappear. In government, the most politically astute organizations get more resources with time, and often especially if they have failed at their missions, while the best run organizations have no particular mechanism that rewards them or increases their scope.

This is the reason that you rarely wait for long on line at the supermarket, and it usually has what you want in stock. This is also the reason that you can wait interminably at the DMV or a similar government office, only to be told that you have to come back with additional forms the next day.

The next time someone says to you "wouldn't it be great if the government enacted my pet idea...", ask yourself what would happen in the real world if the government attempted to execute "the perfect plan", and not what would happen in the word of one's fondest dreams. In the end, the government will not do you want; it will instead do what the political process permits.

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September 09, 2004 11:56 PM

Mises Blog Entry on Liberty and War

The Mises Economics Blog has a great post on the subject of war and liberty. It is a series of extended quotations from an essay on the subject by F.A. Harper, the founder of IHS. It is long, but I recommend giving it a read.

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September 09, 2004 5:55 PM

Michael Crichton Talks Sense

I had generally assumed that Michael Crichton was just the author of some sensationalist novels (including a recent one called "Prey" that does for nanotechnology a bit of what "Little Shop of Horrors" did for dentistry). It turns out, though, that he's got some interesting opinions:

There is no Eden. There never was. What was that Eden of the wonderful mythic past? Is it the time when infant mortality was 80%, when four children in five died of disease before the age of five? When one woman in six died in childbirth? When the average lifespan was 40, as it was in America a century ago. When plagues swept across the planet, killing millions in a stroke. Was it when millions starved to death? Is that when it was Eden?

I suggest reading the whole speech, which is about the environmental movement. I can't agree with all of it, and I spotted some factual errors, but overall, I found it refreshing.

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September 09, 2004 12:10 PM

N.H. has Highest Income, Lowest Poverty Rate

A newspaper article pointed out to me by my old friend Harry Hawk notes that New Hampshire has the highest median income and lowest poverty rate in the nation.

New Hampshire also has no income tax or state sales tax. This web page shows that it has a lower state tax burden than any other state in the country other than Alaska (and Alaska largely funds its state government by taxing oil production).


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September 09, 2004 11:04 AM

28th Anniversary of Mao's Death

On September 9, 1976, 28 years ago today, one of the most vicious mass murderers in human history, Mao Zedong, died of natural causes. He was responsible for the deaths of as many as 65 million of his countrymen — a number that makes Adolf Hitler look like an amateur.

For details on the crimes of Mao and other 20th century Communist leaders, see "The Black Book of Communism", available at Amazon.

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September 07, 2004 2:27 PM

Is Iraq like Vietnam?

Allan Schiffman asks, in a very short but well written piece, if Iraq isn't Vietnam all over again.

In other news, CNN Reports:

There have been 1,126 coalition deaths, 999 Americans, 65 Britons, six Bulgarians, one Dane, two Dutch, one Estonian, one Hungarian, 19 Italians, one Latvian, 10 Poles, one Salvadoran, three Slovaks, 11 Spaniards, two Thai and eight Ukrainians, in the war in Iraq as of September 7, 2004

That means that very soon, some lucky bastard will be the 1,000th U.S. soldier killed in combat in Iraq. This is likely to happen within the next 24 hours.

Will the media notice?

[NB: The link to CNN above is updated periodically with the casualty count, so it may have higher numbers than the ones mentioned by the time you click on it.]

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September 07, 2004 1:22 PM

The Machinery of Freedom

Many years ago, I loaned my copy of "The Machinery of Freedom" by David Friedman to a friend who never returned it. Recently, I re-purchased it, and over this past weekend, while I was vacationing in the countryside, I re-read it for the first time in about 15 years.

I had forgotten how wonderful it is. It is one of the most important texts on libertarianism out there.

"The Machinery of Freedom" is structured as a series of short essays, all discussing a small part of the overall picture. Each is a small jewel. The essays are not academically rigorous — Friedman claims that such a style tends to interfere with coherent presentation of an argument, and I think he's correct. What the essays lack in academic depth, however, they make up for in clear argumentation and grand vision.

As I re-read each essay, I was stunned by how closely the ideas corresponded to my own world view. I kept wondering if I had held these opinions before reading the book, or if I had so thoroughly assimilated them years ago that I could no longer distinguish their origin. I suspect the latter. Although I was a libertarian before reading "The Machinery of Freedom", it is obvious that it profoundly effected my thinking. My belief that the state is likely superfluous certainly originated with Friedman's arguments.

Although David Friedman professes to feel that libertarianism is superior morally as well as pragmatically, he takes a pragmatic/utilitarian approach throughout on the basis that such arguments are more convincing than moral arguments. The result may have been a stronger one than he had intended — many of his disciples, such as myself, have long since ceased to make the argument for libertarianism on any sort of moral terms at all. Perhaps someday Friedman will write a book on moral philosophy and reverse the unintentional effect he has had on so many of us.

I've started reading Friedman's newer book "Law's Order", a text on the economic analysis of law. I may review it here in the next few weeks.

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September 01, 2004 7:20 PM

Last Sunday's Protests

This entry is a description of how I spent the August 29 protest, plus a bit of an update on the protests in general. It is pretty boring if I do say so myself. Normally I avoid the "what I ate for lunch" sort of blog entry, but I thought I might want to keep a record of this.

My friends and I started out with breakfast in the East Village at 9am, after which we joined a feeder march going to the main protest at 10am. We joined the main march at about noon, at which point the streets on the West Side were already so clogged that no forward progress was possible. It is unclear how many people were part of the protest — it was certainly in the hundreds of thousands, but no one ever seems to use accurate methods of crowd counting to determine the real numbers. The claims range from 150,000 to 500,000.

The biggest problem of the day was the heat — everyone was baking in the sun, and bottled water was sweating out of people nearly as fast as they could drink it. The fact that the march was barely moving and that the only breezes were stirred by police helicopters did not help. We moved very, very slowly up Seventh Avenue to Madison Square Garden, and then turned right onto 34th street at about 3:30. My group of friends decided that we were not interested in being herded like cattle downtown, so we took the subway up to Central Park and joined the "unauthorized" protest there.

The park was great fun. It was filled with thousands of people peacefully enjoying a Sunday afternoon. The libertarians were out there (as I have noted, I met the LP Presidential candidate briefly and thanked him for running), as were lots of other groups.

The Billionaires for Bush were out in force at the park, looking incredibly well dressed as always. This has been a big week for them, including their Million Billionaires March, their Vigil for Corporate Welfare, and a Coronation Ball. I don't agree with all of their politics beyond disliking Bush — they're fairly standard Democrats — but I wholeheartedly admire their tactics. There are few groups I've seen in some time who get across a message with better humor and verve than they do. The evening wear, the shouts of "four more wars!", and the buttons (which all claim in small print to be produced with sweat shop labor) are terrific street theater. It is a great shame that libertarians rarely achieve the levels of zest and fun that folks like the Bs for B have.

My group finally left the park and got dinner on the Upper West Side around 7pm, and I got home, showered and collapsed well before 9. I was so wiped out that I slept for eleven hours.

Throughout the day's activities, we were shadowed by police helicopters and a police blimp. (Yes, a blimp, equipped with surveillance cameras with high powered lenses.) We were also surrounded by huge numbers of police at every turn. However, for the most part, everything Sunday was about as peaceful as you could imagine. There was one point where a paper Chinese Dragon was lit on fire near us, but other than that, no evidence of anything untoward.

On Friday, though, the police arrested bicycle borne protesters by the hundreds. On Sunday, they arrested a lot of the gays who held kiss-ins in front of theaters where the delegates were seeing shows — reportedly the pretext was "obstructing the sidewalks" but it seemed pretty lame as excuses go. They also arrested a lot of folks on Tuesday. The claim is that they've now well exceeded the numbers detained at the 1968 Democratic Convention in Chicago.

The police have been pretty low on violence as these things go, but they haven't been overly friendly, either. They've apparently been using a considerable amount of trickery as part of their crowd control arsenal. It seems one common tactic has been to "agree" to let people march along certain routes and then to arrest them when, obeying "instructions", they violated the law. Another trick which was apparently used with cyclists on Sunday was to force them the wrong way up a one-way street and then to arrest them for riding against traffic. I suppose this is all yet more evidence for what every citizen should already know — the police can and will lie to you if it suits them.

The police have also apparently been detaining people not in the usual city jail facilities, but in a semi-converted pier on the West side. Reputedly the floor in the holding area is covered in dirt and motor oil and there aren't any places to sit or lie down. Some arrestees have been detained for periods of 24 to 36 hours before being booked and released, which is pretty unusual, especially considering that they're all being held for the most minor offenses. There is speculation that this is part of the police tactics, but of course there is no way to actually know.

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September 01, 2004 6:43 PM

Another reminder of how good things are...

There's a pretty good entry over at Cafe Hayek that points out, quite poignantly, that the division of labor has improved the material conditions we live under beyond all recognition.

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August 29, 2004 9:01 PM

A Day of Protest

I spent today in New York protesting the Bush administration's policies, along with several hundred thousand other people. The big event was a march up 7th Avenue past the convention site, but later we went to an "unauthorized" protest in Central Park, where I got a picture of myself shaking hands with the Libertarian Party's presidential candidate Michael Badnarik.

I took a couple hundred pictures today, some of them moderately interesting, but I'm so worn out I can't stay awake any longer (and it is only 8:45pm), so I'll blog more extensively about these events tomorrow.

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August 28, 2004 10:01 PM

Welcome, Samizdatistas and Friends

A thread has started over at Samizdata about my recent entries on foreign policy and national defense from a libertarian perspective. I welcome the opportunity to explore these issues further.

A few quick notes about some of the responses I received:

First, one gentleman over at Samizdata with the handle "veryretired" referred to my views as "pacifist". This is far from the case. I am not a pacifist. I believe it is fine to stop and punish malefactors with the use of force. He may note that I spoke favorably of the deterrent effects of heavily armed militias and nuclear arsenals — I suspect most pacifists would not be willing to call me one of their own.

However, although I am not a pacifist, I am indeed a libertarian, and as a libertarian, I believe that governments, if they should exist at all, should limit themselves to enforcing contracts and defending the citizenry from violence. Since I see no evidence that Saddam Hussein's regime was a threat to the United States or United Kingdom, I do not see a case for involvement by the governments of the U.S. or U.K.

Arguably, the situation in Afghanistan was different since the Afghanis were harboring a hostile force that had used violence repeatedly against U.S. targets. (Note I say "arguably" — the Afghani situation is quite complicated.)

Now, "veryretired" might then ask what is to be done about third world dictators if large foreign countries will not overthrow them. I will not spend much time here on noting how often the U.S. and U.K. have created third world dictatorships to suit their agenda in "the great game" — I've already done that in an earlier post, and it could easily be argued that at least a few of the dictatorships in existence in the third world are not the product of Western meddling. One must then answer how the poor inhabitants of the small number of remaining dictatorships could be helped.

As I have said, I do not feel that individuals are in any way constrained the way governments are. In a libertarian society, individuals are free to contribute their own resources to charitable causes even if governments are not. If "veryretired" is strongly concerned about the problem of tin-pot dictators, he may undertake personal actions towards eliminating them. He is, naturally, free to recruit others to join him, and to solicit their funds. What he cannot do, however, is to use the force of the state to compel others to contribute their hard earned money to your good cause.

"veryretired" also refers to my position as "amoral", presumably because I do not wish to use the forcible taxation power of the state to pay for the good cause of his choice. However, if "veryretired" claims to be a libertarian, presumably he does not see anything amoral in the state refusing to fund homes for the poor, public art, space exploration and numerous other "good causes". Why is this cause fundamentally different? Certainly people die because of third world dictatorships, but they also die for lack of medical care, and no libertarian would argue the state should provide for that. (If "veryretired" meant that I was being amoral in some different fashion, I welcome his clarification.)

"veryretired" also asks:

When would Metzger have had the US adopt a Swiss foreign policy? Give us a date, and examine honestly the conditions in the world and the likely consequences. I would very much like to see some specifics instead of all the airy theorizing that usually goes on about this subject.
The date? Well, the U.S. did not exist before July 4, 1776, so presumably thereabouts would have been good if I had a magic wand and a time machine. Sadly I have neither.

The likely consequences of this? I would suspect that we would not, today, be worried terribly much about attacks on the United States, and our rate of economic growth would be substantially higher. Both of these would be in the direct interests of the citizenry of the U.S., which is, after all, the group to which the U.S. government is accountable.

In another comment on Samizdata, Andrew Ian Dodge wrote:

The trouble with the pacifist libertarian response to Saddam is that is ultimately suicidal. Saddam (or at least his secret service) had links with Islamic extremists. After all he paid a bounty to Palestinian "martyrs". I think it would have been a costly mistake to wait until someone supported by Saddam attacked the US.
Again, let me note that I am not a pacifist, but I am thoroughly unconvinced that Saddam Hussein was any sort of immediate threat to the United States. More to the point is that if the U.S. had maintained a policy of armed neutrality in the past rather than one of constant interference in the affairs of other nations, there would be very little incentive for anyone to attack us. One can argue that adopting such a policy now is dangerous, but isn't it more dangerous to keep on going as we have?

An old friend of mine, Tim Starr, wrote to mention to me that the Swiss have not been entirely free of terrorist incidents. For example, Palestinian terrorists attacked an El Al plane in Zurich in 1969, and some Swiss tourists were killed at Luxor in 1997. However, I don't think that the Swiss were, per se, the target of such attacks. In the former case, Switzerland was merely a convenient place to attack Israelis, and in the latter, it appears that the Swiss tourists were not targeted for their nationality but as part of a campaign to frighten away foreigners of all nationalities. There have been several other incidents involving Switzerland, but I can't find any evidence that in any of them Swiss nationals were targeted because of their nationality.

Christian Dreyer, in Switzerland, responded to me in this blog entry. I'm afraid that I don't per se understand his point. He notes that the Swiss adopted neutrality more from necessity than from desire, but that does not impact whether the policy has been a successful one. Similarly, he says it would be bad for the U.S. to "withdraw into its own shell", but he doesn't explain why this would be bad for the citizens of the U.S., and that is, after all, the meat of the question. Lastly he notes that Switzerland is becoming less neutral these days, but again, that does not in any way tell us whether armed neutrality is the superior stance.

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August 28, 2004 12:54 PM

What is the Role of the State?

As it turns out, I am not the sort who believes the State is a necessary institution at all. However, many libertarians do think that a minimal State is useful. (This is sometimes termed a "night watchman" State).

Turn your mind, for the moment, to the "state of nature", a philosophical construct that folks like Hobbes, Locke, and others considered in attempting to understand the proper role and form for governments. The "state of nature" is the world before laws, institutions or agreements of any sort.

Much of human activity is directed at producing and transforming resources for our use. We grow food to feed ourselves, and that takes work. We produce tools so that we can grow the food, and that also takes work. In the state of nature, each of us has to spend a substantial amount of our personal time guarding the resources we have developed. It is not enough to grow corn — one must also hold on to it long enough to eat it. However, spending one's time guarding one's resources means that one is not out producing more resources with that effort. Hobbes refers to this problem as the "war of all against all" — a situation in which no one can has security or can be productive.

Some thinkers argue that, since this situation is highly undesirable to everyone, people seek a way to correct it. We develop, implicitly or explicitly, a minimal social contract with our neighbors. This social contract is a simple truce: I give up on trying to steal the things you make, in exchange for your doing the same. I will not do violence to you so long as you do not do it to me. I will respect my agreements with you so long as you respect them as well. This truce allows us to halt the Hobbesian "war of all against all". Thus assured of personal safety for ourselves and our chattels, we can engage in commerce and the division of labor, resulting in a better life for everyone participating in the armistice. Those that violate the truce by engaging in violence or theft have little reason to complain about our treatment of them, because it is no different from what they have done to others.

The minimal State, then, is an arrangement to enforce this very basic social contract. It enforces agreements among the participants in the State (who we sometimes call citizens), defends them and their property, and does nothing more. (I would argue that it is possible to perform these activities without a State, but that is another discussion entirely.)

You might want to take note of the interconnection between purpose and action in the minimal State. The minimal State does not, for instance, build art museums, because it does not exist to promote art but to enforce agreements and provide mutual defense. In order to build an art museum, the State would need to acquire the resources with which to build it. If people are willing to donate those resources freely, there is no need for the State to build the museum — it could be built privately. If people are not willing to donate the resources freely, then the act of forcibly taking the needed resources turns the purpose of the minimal State on its head &mdash instead of enforcing the decision by the participants to respect each other's lives and property so that their own lives and property will be respected, the State then becomes an agent for some to abscond with the property of others. I may think it is a good idea to build a home for orphans, but if I take your resources against your will to do it, whether I'm an official of the State or a private citizen, I have violated the truce. To obey the truce, I must convince you to voluntarily provide resources for my goals, whether by trading with you or appealing to your charitable instincts.

In short, if the justification of the minimal State is that it exists, at the behest of a collection of sovereign individuals, to enforce a mutually beneficial truce among those who choose to participate in it, and to organize mutual defense against those who choose not to participate by violating the truce, then that justification does not reasonably permit the expropriation of resources for the purpose of projects that are merely laudable.

Note that this view of the minimal State cannot provide a justification for initiating warfare in distant lands which are not a threat its citizens' safety, regardless of how laudable it might be to re-arrange the social structures of those foreign places to suit enlightened tastes. However, by the same token, neither position prevents individuals from engaging in such activities on their own, at their own risk and with their own resources.

The view that I've just described is the so-called "minarchist" libertarian position. Note that it is not, in principle, very different than the anarcho-capitalist position that some libertarians take. The distinction is merely that the minarchists feel that a night watchman State is required to enforce the truce, and the anarcho-capitalists believe that the same function can be provided without a monopoly enforcement mechanism. However, both otherwise have nearly identical positions.

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August 26, 2004 6:06 PM

Transhumanism is Dangerous, says Francis Fukuyama

Reason Online reports:

"What ideas, if embraced, would pose the greatest threat to the welfare of humanity?" That question was posed to eight prominent policy intellectuals by the editors of Foreign Policy in its September/October issue (not yet available online). One of the eight savants consulted was Francis Fukuyama, professor of international political economy at Johns Hopkins School of Advanced International Studies, author of Our Posthuman Future: Consequences of the Biotechnology Revolution, and a member of the President's Council on Bioethics. His choice for the world's most dangerous idea? Transhumanism.

I'm amused to see that Transhumanism is being taken seriously enough to be denounced by the intellectual famous for telling us that we have reached the end of history. (Fukuyama's idea of the end of history is the liberal Western democracy. At least this is a more pleasant thought than that of Fukuyama's inspiration Hegel, who believed history ended with the 19th century Prussian state, or another philosopher inspired by Hegel, Karl Marx, who thought the end of history would be the dictatorship of the proletariat.)

For those not in the know, "Transhumanism" is the idea that it may be desirable for humans to transcend their current biological limitations by technological augmentation or transformation. We are all currently limited in our lifespans, and in our physical and intellectual abilities. The transhumanists ask, why be limited? We nearly have the ability to modify ourselves in wonderful new ways, ranging from biochemical modifications all the way up to uploading our consciousnesses into computers. Why not, they ask, be more than human?

I must confess that I, too, espouse this "dangerous idea". I think it would be very pleasant to have a better memory, more intellectual capacity, the ability to think more clearly, a longer (or unbounded) lifespan, etc., and I see very little wrong with taking steps in that direction.

If it offends some people who don't like the idea of changing themselves, well, they can remain as they are. Live and let live. The libertarian principle says everyone should get to live their lives in peace provided they let others do the same, and if they prefer to die after a mere 80 or 100 years, or to leave their minds at their current capacity, I have no objections — so long as they don't interfere with me peacefully pursuing life, liberty and happiness in my own way.

However, there are those out there who aren't happy about people thinking these kinds of thoughts. Fukuyama is hardly the only person worried about the strange doings in the technosphere. Bill Joy has made a bit of a name for himself spreading his own brand of technological alarmism, and there are numerous others.

Am I worried that these anti-technology maunderings will slow the rate of technological progress? Not really. Even if the majority adopts a radically luddite policy (and, in fact, especially if they do), those that disobey will gain a strong competitive advantage. There is therefore fairly strong economic (and by the same token, evolutionary) pressure towards disobedience of such a stricture. In a world with hundreds of countries, some people somewhere will do the sorts of research that the "civilized" deem inappropriate. If the civilized really forswear the same technologies, they won't have the tools with which to stop the "uncivilized" anyway — they'll be out-gunned. There is therefore a very strong reason to believe that, at best, luddism could only slow down technological progress for a while — it could not stop it.

More to the point, although people often fear change, I think that it would be very difficult for governments to organize to stop it very effectively. They would have to do things like banning scientific research, improvements in computer technology, and such. I don't think that is going to happen. Even with substantial negative attention brought to bear, it only took a few years between Dolly the Sheep and the first successful production of cloned human embryos in South Korea. I doubt other attempts to slow progress will be particularly more successful.

The transhumanist idea that Fukuyama worries about is already out there, and ideas cannot be unthought. The transformation of much of the human race will happen. The question now is only whether to join in, or to stay behind, frightened of the opportunities the future will bring.

[Thanks to Monica White for the pointer that inspired this.]

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August 25, 2004 8:52 PM

Foreign Policy

I am sure I'll get flack from some people about my last post. They'll say "So what is your suggested alternative to our current foreign policy? It is easy to attack other people's ideas, but it is much more difficult to present an alternative."

Fair enough. I'll tell you what I'd prefer our government's foreign policy to be, assuming we need to have a State at all. My proposal is pretty simple: Swiss-style armed neutrality. That means no invasions, no military threats, no foreign aid, no "covert operations", no military bases outside the country, no attempts to influence the internal affairs of foreign countries whatsoever.

No one blows up bombs in the streets of Geneva. No one from Switzerland gets kidnaped in third world countries to protest the evils of Swiss foreign policy. Wherever they go, at worst, people think of the Swiss as boring — it is rare that anyone feels the need to buttonhole someone from Zurich or Lugano and tell them off for what their government does.

The Swiss are not pacifists, though. They have a very strong militia for defense, and in times past when Europe was less peaceful, it would have been extremely costly for an attacker to invade them. Even if (in the case of particularly strong enemies) an invasion might have ultimately succeeded, it would have yielded very little of value at an astonishing expense.

Such a foreign policy perfectly suits the minarchist excuse for government &mdash that it exists to protect its citizens and their property from violence within the borders of the country. It is pretty inarguably perfect for that purpose. (I'm not a believer in the necessity of even a minimal state, but that's not today's discussion.)

I think the U.S. would do just fine with such a policy. It is unlikely that many countries could attempt an invasion of the U.S. given our geography. With a strong militia, armed to the teeth, no such invasion would likely succeed even if someone was foolish enough to try. In addition, we have a large nuclear arsenal, which should make any potential attacker worry about the fate of their home territory. The nuclear weapons pretty effectively deter any attempts at missile based attacks, too. Realistically, were we neutral, we would not be attacked at home if we were even moderately careful.

For a while, we might still get terrorist threats from people who hadn't realized that we had withdrawn our forces from overseas and weren't going to bring them back, but those would fade after a while. In the long run we'd be fine.

Such a policy is also far, far cheaper than the one we pursue now — the economic benefits alone would be more than worth it.

Some might argue that we would not have a force capable of deterring attacks on U.S. shipping — especially oil shipments — without a strong military capable of foreign intervention, but I don't believe that such a use for the military is good idea in the first place. For one thing, it distorts the market for commodities like oil because the market price does not reflect the true cost (including armed security) of importing the commodity. My solution would be for the oil companies to simply hire private security to guard their own tankers and leave it at that — if the cost is high, then let the market price for oil reflect that.

Some might also argue that a strong military is needed to defend U.S. citizens overseas, but I doubt that. As I noted, how often are the Swiss targeted for political reasons?

Lastly, some might argue that we have an obligation, as a nation, to defend the interests of those under the thumbs of totalitarian regimes abroad. As I've noted elsewhere, however, U.S. foreign policy has propped up and indeed created totalitarian regimes far more often than it has attacked them. This is a simple instance of the universal rule that governments don't do what you want them to do — they do what public choice economics causes them to do. We can dream all we like, but governments are made up of people with their own agendas.

Furthermore, as I've also noted elsewhere, I have no objection to people spending their own resources and risking their own lives liberating the downtrodden in the third world, or persuading others to do so voluntarily, but the Non-Coercion Principle that we libertarians follow says that we don't use force to get others to spend their money and risk their lives for our causes, no matter how noble our cause may be. Whether the purpose is curing cancer or building a football stadium, coercion is still coercion, and libertarians don't coerce others into paying or doing.

By the way, this is all pretty standard stuff. Libertarians have been advocating this position for decades, and I don't understand how it can be the least bit controversial among people of our political clan at this point.

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August 25, 2004 2:59 PM

Libertarians and War

Once upon a time, the U.S. overthrew a democratic government in Iran run by a prime minister named Mohammed Mossadeq. Our replacement was absolute rule by a guy named Mohammad Reza Pahlavi, who styled himself the king of kings, and we spent a lot of effort keeping him in power. Eventually, people in Iran got fed up with him doing things like running torture chambers and operating the country as his own private piggy bank, and they overthrew him. Sadly they replaced him with a nutty theocracy run by a guy named Ruhollah Khomeini, but you couldn't really blame them — desperate people rarely pick the right revolution to fight for.

Did the U.S. say "hey, we understand that they're upset with us, we've got a long history of screwing them, lets leave them alone?"

Of course not, because we didn't even remember that they had a reason to be pissed off at us. The U.S. has about zero national memory of all the times we've screwed various third world populations to the wall in the name of "Realpolitik". We then act puzzled about why they might dislike us — the know-nothings in the White House go so far as claiming that the problem is that various people around the world "hate freedom", as though the murderous thugs in third world countries who torture their citizens with our funding were a form "freedom". (None of the 9/11 hijackers came from "free" countries as we understand the term, but they all came from countries that could claim to be strong allies of the U.S., and in many cases these countries are the recipients of lots of U.S. aid which funds the local dictatorship. I suppose that is how we show our support for "freedom".)

Anyway, back to our narrative. After the Iranian Revolution, we decided that one of Iran's neighbors, Iraq, was a great proxy for our war on them, so we handed that country's brand new dictator, a fellow named Saddam Hussein, lots of help. Hell, we sent Donald Rumsfeld to go and shake his hand, and tell him that it was okay if he went off and killed a bunch of his own people for good measure, so long as he attacked Iran. We knew he was a murderous thug, but it seemed like a good idea at the time. Later he turned around and invaded one of our even more special friends, Kuwait, and we were forced to break off our good working relationship with him. Eventually, of course, we ended up deciding to get rid of him — why we picked the particular time we did is unclear, but the public excuse was that he had biological or chemical weapons, and that he'd been involved with terrorism against the U.S., although it turned out that neither was the case. Who have we paid off and propped up this time to help us meet our goal? Everyone in sight.

Meanwhile, recall that the Soviets invaded Afghanistan in the late 1970s. We could think of no better solution at the time than to hand lots of money, weapons and training to various "freedom fighters", such as a fellow named Osama bin Laden, who we hoped would take care of the Soviets for us. Eventually, of course, this lead to little problems like the Taliban taking over Afghanistan, and giving shelter to bin Laden and company, who turned out not to really be our friends. We decided to invade, but we didn't have any nearby bases. Did that stop us? No! Following our usual pattern, we found dictators in nearby countries like Turkmenistan who were willing to give us use of their military bases in exchange for our looking the other way and handing them a bunch of money.

Why has all this stupidity happened? Because the U.S. is run by a government, and governments pretty much always end up behaving stupidly. When a business acts stupid (and they all do eventually), the market punishes it by taking away its money and power. When a government acts stupid, there is no market mechanism to punish it, and no competing government to womp it in the marketplace, so it almost always perpetuates the stupidity instead of getting rid of it.

What I want to know, though, is not why governments act stupid — thanks to lots of good research over the years I think that's now fully understood. I'm not even asking why most people trust their governments — that just strikes me as a subset of the general question of why so many people believe utterly unbelievable things, such as the idea that the Bible is the perfectly accurate message of a supernatural being.

What I want to know is why so many seemingly rational people who claim to be libertarians are out supporting this madness. Take, for example, the folks over at Samizdata. Most of the time they seem to be perfectly reasonable folks, but for the last couple of years they've been seized by the notion that the war in Iraq is not merely justifiable but indeed laudable. I've seen this same disease afflicting many libertarians around the world. They ignore the hundreds of billions in forcible taxation needed to pay for the war, they ignore that the excuses for the war proved ultimately false, and they ignore all the innocents killed, all on the basis of various vague justifications like "fighting terrorism" (though there is no evidence that the war in Iraq has done anything at all to reduce the threat of terrorism) or the fact that Saddam Hussein was a ruthless dictator (fully ignoring all the other ruthless dictators we're actively supporting worldwide with money taken by force from U.S. taxpayers.)

Worse, these "libertarians" even forget straightforward libertarian principles about the use of force in acquiring resources. Sure, a person can decide he wants to support some "good cause" like cancer research or knocking off a third world murderer — but to a libertarian, no amount of "good" to be done by supporting a cause justifies taking money by force to pay for it. If a large number of Samizdata contributors (or anyone else) wanted to personally support efforts to depose third world dictators, that would be one thing, but what they advocate instead is that my money be used to achieve their goal, and that it be taken from me by force if I won't agree. Individuals can do whatever they want with their own resources, but they can't decide to commit other people's resources. That violates the Non-Coercion Principle.

So, at last getting to my question of the day, does anyone have a good explanation for what has gotten into these "libertarians" who are out cheering for the war? I'd be very curious to hear people's explanations. No, I don't want to hear more of their rationale for the war — I'm familiar with their arguments and I don't need them repeated. I'm interested into some sort of insight into their mental state. What takes a person who distrusts all uses of government to the point where they'll support something as indefensible to a libertarian as the Iraq war, and parrot obviously false claims like "this will stop terrorism"? (Some might say this happened because 9/11 deranged a lot of people, enraging them so much that they can't think clearly, but that seems like a poor explanation to me — I watched the Trade Center towers fall live and in person, with people I knew inside, and I'm not out arguing that we should invade randomly selected third world countries.)

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Politics

August 25, 2004 12:03 PM

US War Deaths Approach 1000

Cryptome has released the latest update to its Iraq War Casualty Calendar. The count stands at 992. This implies that the count may go over the 1000 mark during the Republican National Convention.

Perhaps if this becomes widely enough known the mainstream media might pick it up -- spread the word.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Politics

August 20, 2004 1:23 PM

ETC Group is run by High School dropout

The ETC Group, which I've blogged about before, puts out a constant stream of bizarre, ill informed attacks on biotechnology and nanotechnology.

Who runs the group? According to this article from Forbes:

His name is Pat R. Mooney, and he is a high school dropout from Canada with no scientific training.

Unfortunately, he's very effective even though most of his attacks are based on extremely bad science:

[H]is Ottawa organization, the ETC Group, is widely credited with being one of the first to raise health and environmental concerns about genetically modified food. Its efforts, along with those of other outfits like Greenpeace, led to a public relations fiasco for the biotech industry. In Europe the name Monsanto, which sells genetically modified seed, still exemplifies the ugly American multinational. Because of the fear Mooney helped generate, Nestle and others don't sell food with GM ingredients in Europe. Restaurants post signs assuring customers meals are virtually GM-free.

Now Mooney, 57, has set his target on nanotechnology, the business of manufacturing on a molecular scale.

My translation: nanotechnology could help rid the world of disease and poverty, but an ill-educated Luddite in Canada with a talent for getting press attention will be fighting hard to make sure that doesn't happen.

By the way, genetically modified plants had (and still have) the potential to radically reduce malnutrition in the third world, but people have managed to scare themselves so thoroughly about the technology that these crops may never be widely grown. Some countries even refuse food aid if it contains genetically modified grain. Thanks to the luddites, millions may die needlessly of starvation. Every time you see a picture of a child starving in the third world, remember Pat R. Mooney. (You should also remember anti-globalization protesters, government bureaucrats and lots of other folks, but that's another story.)

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Politics, Science & Technology

August 20, 2004 12:44 PM

Tyler Cowen on Economic Growth

Tyler Cowen is apparently writing a new book explaining why economic growth is so crucial to improving people's lives. Quoting from his blog entry about the book:

The importance of the growth rate increases, the further into the future we look. If a country grows at two percent, as opposed to growing at one percent, the difference in welfare in a single year is relatively small. But over time the difference becomes very large. For instance, had America grown one percentage point less per year, between 1870 and 1990, the America of 1990 would be no richer than the Mexico of 1990. At a growth rate of five percent per annum, it takes just over eighty years for a country to move from a per capita income of $500 to a per capita income of $25,000, defining both in terms of constant real dollars. At a growth rate of one percent, such an improvement takes 393 years.

I'm looking forward to reading it.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Politics

August 16, 2004 4:48 PM

Why France Doesn't Work

The New York Times Reports (though sadly only with registration and for a limited period) that a new book, entitled "Bonjour Paresse" (the Times translates this as "Hello Laziness") by Corinne Maier is becoming something of a best seller in France.

Quoting the Times:

"Imitate me, midlevel executives, white-collar workers, neo-slaves, the damned of the tertiary sector," Ms. Maier calls in her slim volume, which is quickly becoming a national best seller. She argues that France's ossified corporate culture no longer offers rank-and-file employees the prospect of success, so, "Why not spread gangrene through the system from inside?"


Her solution? Rather than keep up what she sees as an exhausting charade, people who dislike what they do should, as she puts it, discreetly disengage. If done correctly - and her book gives a few tips, such as looking busy by always carrying a stack of files - few co-workers will notice, and those who do will be too worried about rocking the boat to complain. Given the difficulty of firing employees, she says, frustrated superiors are more likely to move such subversive workers up than out.

One might argue that Ms. Maier is supporting evil behavior, but perhaps that's not entirely the case. Her argument is largely that French companies are not meritocracies and that they do not reward work, so why bother working?

Why indeed? In a country where work is legally limited to 35 hours a week, taxes are high, and failing companies are coddled by the government, perhaps there is indeed little rational incentive to do much. Take a bit of an objectivist viewpoint for a moment. If all else fails, isn't "striking" the "right" thing to do? Is such a book not, in a way, a call to "shrug" in an environment in which no other mechanism seems effective?

I'm being slightly facetious here. It is probably a violation of one's agreement with one's employer to do nothing for one's salary, and I doubt that Ms. Maier is an objectivist of any stripe. Indeed I would expect that she is hostile to that sort of philosophy.

However, one reaps what one sows. I'm hardly surprised that a country that has long made it difficult to get ahead now finds people wondering why they should even try.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Politics

August 08, 2004 1:26 PM

More Victories for King Ludd

The New York Times is reporting (sorry, the link will stop working soon) that "animal rights activists" have managed to temporarily derail the construction of a biology laboratory at Cambridge.

The story leads with a photograph of several protesters, one of whom is carrying a sign which says "animal testing delays medical progress".

Of course, that's beyond merely untrue — it stands reality on its head. There is no good alternative to the use of animal models for most medical research. A few days ago, I reported on a breakthrough recently made on Alzheimer's Disease thanks to animal experiments. Animal experimentation is the reason we have the information we needed from that test — no rational person would agree to be injected with an experimental substance and then killed and autopsied a few days later, so we need to use animals for such tests.

Almost all of modern medicine, from vaccines to surgery, has been developed using animal models. Had we avoided all animal testing over the last several centuries, human lifespan today would be dramatically shorter.

On a similar note, I was recently reading an article in Wired about Craig Venter's project to sequence the genomes of vast numbers of previously unknown microorganisms. Venter's team is, essentially, sailing around the world, collecting a few gallons of water out of the ocean every couple hundred miles, and shotgun sequencing all the DNA in the living matter within the sample. Less than a percent of the microorganisms on the planet have ever been observed, let alone sequenced, so this is really neat work. The team is not only getting the first real glimpse at how large the population of microbial species really is, they're also getting an amazing sampling of previously unknown genes.

Unfortunately, it appears that lots of people, including the luddite ETC Group, are organizing oppose his work. They've even gotten his expedition halted in a few places where he crosses in to various territorial waters. Why? I really can't explain their rationale. I can't make out a coherent reason for opposing such research in anything they say. They make weird claims about "biopiracy" (whatever that might be) and such, but really it appears their major dislike for Venter is that they hate technology.

The article in Wired describes the bizarre events that happened when Venter arrived at Tahiti, which is ruled by the French. Remember in reading this that his activities consist of grabbing a few gallons of worthless ocean water here and there and studying the single celled microorganisms within — he isn't stealing ancient artworks or running a slave ship or any such.

Venter was immediately notified by Rockville of a fax from the French Ministry of Foreign Affairs politely informing him that his application to conduct research in French Polynesia was denied. The ministry understood that the Sorcerer II's mission was to collect and study microorganisms that might prove helpful for health and industry, but France wished to protect its "patrimony" by restricting "extraction of these resources by foreign vessels." "It's French water, so I guess they're French microbes," Venter told me when he got the news.

[...] [W]hen the Sorcerer II reached the French Polynesian island of Hiva Oa in the Marquesas archipelago, the port captain there informed Venter and Howard that their vessel was not allowed to leave the harbor. Impounding a private foreign vessel merely on suspicion is against international law, and Venter protested to the US State Department, which informed the ministry that it considered the act a violation of the honor of the United States. The Sorcerer II was allowed to proceed as a normal tourist vessel, but with a warning not to attempt to take any samples.

Venter later got permission to continue sampling, but with unusual restrictions considering that he was taking nothing more than a few gallons of seawater:

[...] When I wake up the next day, Venter is in the main cabin reading an email from his office; Howard leans over his shoulder. Dill is setting the table for breakfast. "So the big news this morning is [...] the French are going to send a gunboat out to escort us," he tells me.[...]"They want to make sure we sample where we said we would. We're not supposed to tell the State Department about this. It might put a chill on French-American relations. Being as how they're so cozy right now and all," Dill says. "They'd like to know if we'd like to invite an officer on board, too," Venter says. "How do you say 'fuck you' in French?"

This trend towards luddism seems to be spreading.

I wish I had the ability to explain the position of such groups coherently enough to be able to attack them point by point, but I'm afraid that my contempt is a bit too strong for me to be able to do that. I really don't believe they have a rational position so I find it difficult to try to explain their position. ETC, for example, frequently puts out bizarre press releases about scientific work that they obviously don't understand even slightly. Most of their documents are so filled with technical mistakes that it is hard to even count all of them.

However, even though they don't seem to have much of a coherent or accurate argument on their side, such groups frequently are pretty good at getting a lot of attention. I think this is because fairly few people in the news media or in politics have any real personal understanding of science and technology, so they are not able to make informed judgments about the wild claims that are made.

I have to admit that I don't understand luddites well. Human welfare has been radically improved by technology. The progress we've made towards reducing poverty and human misery has been nothing short of breathtaking. Even Marx seemed to understand this pretty well. I get the feeling that the people who used to embrace communism now have switched to technophobia.

As a postscript, let me note that even the most radical anti-technology activists out there like the Unibomber, Ted Kaczynski, seem to make use of at least some technology in their lives. I doubt Kaczynski could have survived through the winter in his cabin without steel implements and an iron stove for heat. No one would know of Kaczynski's ideas but for his willingness to use of technology to write them down (even paper and pencils require pretty significant ingenuity and effort to produce). Even written down, high technology, including computers, has been the primary means by which his ideas have been disseminated. Some such people argue that they are merely using technology temporarily to try to fight technology, or that they do not oppose "appropriate" technologies like wood stoves. (Kaczynski doesn't seem to make any such arguments, though, or at least, none that I can see.) Even so, there is tremendous irony in anti-technologists making use of even primitive technologies, and further irony in their communicating by any method other than speech. I suspect, however, that the irony is lost on them.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Politics, Science & Technology

August 06, 2004 5:15 PM

News Flash: Anti-Drugs Campaign is Failing!

The BBC is reporting this absolutely predictable story:

US drugs tsar John Walters has admitted that Washington's anti-narcotics policy in Latin America has so far failed.

Naturally, of course, merely because it hasn't worked to date is no reason for doubt.

[Walters] predicted positive results would be seen within a year.

I wonder if an Idea Futures market on the success of U.S. drug interdiction would find many takers on the "drug war succeeds" side of the bet.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Politics

August 03, 2004 10:06 PM

Is Piracy a Major National Security Threat?

Businessweek has an interview with David Israelite of the DoJ about piracy and its effects.

In it, he makes a rather remarkable claim:

Q: You've said that the theft of intellectual property is a national security problem. Why?

A: First of all, we talk about it being an issue of economic national security. Our economy is so based on intellectual property ideas that, unless we can protect them, we're really looking at a situation where it's going to hurt our ability to survive as a country.

Secondly, so much of what we do now involves computers, whether it be with software or other types of communication lines. Often, intellectual property is a key component to the things we do to protect ourselves as a country.

Lets have a look at these two claims.

First, there is the question of economic losses from piracy. The entire US movie industry's revenue stream is somewhere like $40B. The US recording industry's revenue is something like $15B. (These numbers might be off a bit but they're the right ballpark, which is enough for this calculation.) That's $55B total. The U.S. economy as a whole is somewhere in the vicinity of $12,000B. That means if the entire music and movie industries vanished without a trace, the economy would (worst case) shrink by something like 0.4%. Note that this does not take in to account new economic activity that might be engendered by piracy, which might be substantial.

Even assuming that we had much more than 0.4% drop in economic activity with the demise of the movie and record industries — which I seriously doubt — it would still hardly count as something that could, and I quote David Israelite, "hurt our ability to survive as a country". I suspect that, given the figures from recent recessions, we could manage far worse without our "survival" being at stake.

Second, Mr. Israelite notes that people use computers and communications lines, and then somehow implies that computers or communications systems would be threatened were intellectual property threatened. I will note that I am writing this blog on a computer using no proprietary software whatsoever, and my server has no proprietary software on it either. Obviously our use of computers and the internet could continue unabated were proprietary software to vanish. If Mr. Israelite has a specific point on this, he has made it rather poorly.

Overall, I judge the claims he makes to be poorly founded. However, the promulgation of such claims is rather predictable in the light of Public Choice theory.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Intellectual Property, Politics

August 03, 2004 9:16 PM

Is Georgia getting real economic reform?

The Economist reports that Georgia (the country, not the state) has a new economy minister named Kakha Bendukidze who's hell bent on cutting taxes, reducing the size of government and privatizing everything in sight, as well as eliminating things like restrictions on foreign banks and legal tender laws.

Best quote:

As to where investors should put their money, "I don't know and I don't care," he says, and continues: "I have shut down the department of industrial policy. I am shutting down the national investment agency. I don't want the national innovation agency." Oh yes, and he plans to shut down the country's anti-monopoly agency too. "If somebody thinks his rights are being infringed he can go to the courts, not to the ministry." He plans, as his crowning achievement, to abolish his own ministry in 2007. "In a normal country, you don't need a ministry of the economy," he says. "And in three years we can make the backbone of a normal country."

Could Georgia be on its way to real reform? I have no idea. I've seen these sort of promising stories before, and politics usually gets rid the reformers before they get rid of the bureaucrats. However, if there was real reform on this scale, Georgia might turn into a quite nice place to invest someday. It probably bears watching over coming years.

(Much thanks to Samizdata for the link.)

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Politics

July 31, 2004 1:57 PM

Supply, Demand, and Pataki

The economic way of thinking is a pretty powerful tool. Even very basic economic principles, which can be taught in minutes, immediately yield predictions about the real world impact of government policy.

For example, once you are familiar with supply and demand curves, you can already begin making predictions about the impact of price regulation. If you artificially lower the price of a good by government edict, the demand will exceed the supply, and you will get a shortage. (Try drawing a supply and demand curve on paper with price on the horizontal axis and draw a vertical line to the left of the supply/demand intersection if you don't see this.) If, on the other hand, you artificially raise the price, you'll get an unpurchased surplus.

This pattern is consistently seen in the real world, but it is rarely understood by people watching it.

For example, in 1973, the OPEC countries decided not to sell oil to the United States because of our support of Israel. There were, however, other producers of oil, including companies extracting it inside the United States itself. If the price of oil in the United States had been entirely based on market mechanisms, we would have expected the price to shoot up until demand fell enough to cross supply. There would have been no shortages, only a dramatic price rise. Additionally, Non-OPEC producers would have had a large economic incentive to find new ways to supply oil since the they could make large profits selling it, so supply would have eventually eased.

However, the price was not unregulated. The United States had price controls on all domestically produced oil. No one remembers this — you'll be hard pressed to find more than a passing reference to it in the Wikipedia article on the crisis, for example. What happens when you have government price caps? A shortage of course. At the artificially lowered price, demand exceeds supply. The gasoline rationing that immediately resulted was completely predictable, and yet almost no one understood it. The bulk of the population had no idea that they were victims of government price control policy. People instead usually blamed the oil companies for "profiteering", as though one could make more money by refusing to sell one's product than one could by selling it.

Today we are experiencing a significant rise in the demand for energy with a simultaneous tightening of supply, but there are no gas lines this time. Why is this? Because oil prices were decontrolled long ago, so the price merely rose until supply and demand met. Eventually, as oil supplies (which are finite) start to run low, the rise in prices will eventually drive people to use other sources of energy, without any need for outside interference.

Artificial price caps are not the only type of price regulation. Set a guaranteed price floor above the market clearing price, and demand drops while supply rises. Agricultural price supports have left us with things like vast government warehouses filled with cheese no one wants, made with milk from herds of cattle that we don't need. (The irony of the government deliberately raising the price of food while issuing food stamps to the poor who can no longer pay for it is rarely mentioned, but that's not our topic today.)

The minimum wage is an example of a price floor. The ideas behind it are as simple as they are incorrect. The advocates assume that wealth is some sort of finite resource that neither grows nor falls (the "zero sum" fallacy), that employers are a privileged exploiting class that unfairly pay people less than they are "worth", and that employers could choose to pay their employees any arbitrary wage we pick, but will deliberately pay low wages because they're mean people.

Thus, we assume that by forcing employers to pay some of their employees more, we will have "costlessly" increased the well being of low wage workers. Of course, in reality there are some pretty serious costs.

First, the supply and demand rule we've just studied means that the demand for low wage labor will necessarily fall. Some of the workers will get the wage increase, but others will no longer have jobs. Employers will look at the increase in their cost of labor and try to find ways to ameliorate it. Some may find that it is cheaper to buy more automated machines than to keep as many workers. Others might forgo an expansion, and perhaps others will cut employee benefits to make up for the increased cost of wages. One way or another, though, they'll be compelled to find a way to respond to their increased costs.

You might think this is a "mean" thing for employers to do, but in fact they have no choice. You as a consumer do not voluntarily buy the more expensive choice among equivalent products when you're out shopping, so producers are under tremendous pressure to minimize costs so that they can offer lower prices in the marketplace. If a producer lowers costs more than his competitors, he gains an advantage over them, and so the competitors have to follow suit or go out of business. No employer has an infinite pool of resources to draw on. Wages are set not by "exploiting employers", but by market pressures, just like every other kind of price.

Employers cannot unilaterally set wages. If they offer wages that are too low, they will not attract qualified employees. When you've looked for work, if there were two equally interesting jobs you could pick, and one offered twice as much money, would you pick the lower paying job? Could your boss offer you *any* salary without fear that you would seek another employer that paid more?

We are all employers at times, of course. Do you pick an arbitrary fee to pay your lawyer or plumber, or are you forced into a particular fee by the marketplace? If you wanted to, could you simply pay your plumber minimum wage? Of course not. No other employer has true control over wages, either. Employees are paid well because the market clearing price for their labor is high, or are paid little if the market clearing price for their labor is low. The market for labor is driven by supply and demand like all markets.

It is possible that in some industries, demand is sufficiently inelastic that employment won't drop much after a government imposed wage increase, because customers will absorb the increase in prices. However, those customers also have only finite resources available to them. If they pay more to one supplier, they then have less money to pay to other suppliers or workers. They will either employ fewer people, or purchase fewer goods (thus causing other suppliers to employ fewer people), but either way, the change will have negative effects.

Raising the cost of labor in the economy is thus not harmless — it reduces the amount that can be done with a given amount of resources. Increasing the minimum wage, no matter how well intentioned, creates unemployment for the poor and reduces economic output.

That brings up another point, which is that the economy is not a zero sum game. There isn't a finite pool of wealth out there which some mean people have seized and which others are being unfairly kept away from. The work we do every day increases the total wealth of the world. If I go into my workshop and build a chair, the wealth of the world is larger by the value of one chair. Every day, we make more and more things, raising the total wealth of the world. The reason that 7% of the U.S. population didn't have indoor plumbing in 1970 and that only 0.6% lack it now isn't because wealth has been redistributed — it is because there is a lot more wealth to go around with every passing day.

The government doesn't produce any wealth. Factories, software companies, farmers, and others are the ones producing wealth. All the government can do is make it harder for people to produce wealth or take wealth from one person and hand it to another. It can't actually make the pie larger on its own, but it can manage to drastically reduce the size of the pie by interfering. Only the people actually doing productive work can increase the size of the pie.

We see extreme cases of this in the third world. The reason people in Africa live in shacks and have to wear our cast-off clothing is not because we're mean and keep them from having all the wealth we've stolen from them. They have little wealth to steal in the first place. They are poor because their governments are run in a way that makes the creation and retention of wealth impossible. Unlike the booming Asian economies, where foreign factories are welcomed, few foreign companies "exploit" the poor of Africa, because the African governments have made running factories and businesses nearly impossible. Even indigenous entrepreneurs are regulated, shaken down and taxed into oblivion. If you want to make the poor wealthier, you have to stay out of the way of people who want to produce wealth. The more you get in the way, the poorer people will be.

So, we now turn our attention to New York State, where the legislature recently tried to raise the minimum wage to $7.15, an increase of nearly 40%. That's not a small adjustment by any means. Governor Pataki vetoed the legislation, saying that the minimum wage hike would put New York at a "distinct competitive disadvantage". This is a remarkably economically enlightened viewpoint. However, not all politicians in the state are this enlightened. Quoting the Newsday article I've just linked to:

Assembly Speaker Sheldon Silver called Pataki's veto "an outrageous slap in the face to tens of thousands of hardworking men and women in our state."

The assembly speaker appears to be basing this statement on the counter-factual belief system that I mentioned before. Repeating, this belief system claims that the economy is a "zero sum" game, that employers voluntarily choose to "exploit" people by paying them less than they are "worth", and that employers can choose to pay their employees any wage at all without impact upon them if they wish to. Therefore, these people reason, it must be the case that refusing to raise the minimum wage 40% is an attempt to continue the exploitation of the hard working men and women of New York State by evil employers, and that but for this veto thousands of people would have better lives without any negative repercussions.

As with most politicians, Silver shows a deep ignorance of how the economy actually works. This is rather ordinary. What I find unusual, and indeed praiseworthy, is that Pataki actually seems to have shown some considerable sense here, and was willing to stand up for his principles even though everyone "knows" that the minimum wage is "good".

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Politics

July 31, 2004 1:05 AM

U.S. Budget Deficit Hits $445 Billion

The U.S. federal budget deficit is reported to have hit a record $445 Billion.

To put that in perspective, were Bill Gates' entire net worth confiscated by the feds, it would only pay for 1/10th of this year's deficit. Indeed, everything the richest man in the world has ever earned wouldn't even pay for a small fraction of our war in Iraq. The federal government now spends more than his entire asset base every week.

The federal budget continues to grow at a pace far exceeding that of the GDP. It is amazing to me that George W. Bush can still claim with a straight face to be a fiscal conservative. Then again, shame is a rare commodity among politicians.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Politics

July 30, 2004 12:21 AM

Never Ticket a Police Official

From an article in the New York Times:

A city traffic agent who was suspended for a month without pay after she issued a ticket to a New York Police Department official was ordered back to work yesterday after three weeks, and will be paid for all but a week of the suspended period, city officials said yesterday.

Res Ipsa Loquitur.

(Thanks to Thor Simon for pointing out the article to me.)

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July 29, 2004 11:51 AM

Junk Science in New York

Today's New York Post has an article on New York City leasing out lampposts to 802.11 service providers. Normally I wouldn't bother to mention this, but it has a really stunning quote from Peter Vallone, who will be running for Mayor next year.

But all that radiation has some activists and officials concerned about the potential health implications of the antennas. "Apparently the city is willing to gamble with the health of its residents for $25 million," said Councilman Peter Vallone Jr. He is introducing legislation to require the companies to pay for radiation inspectors as part of their franchise agreements. "There is no study that has looked at the cumulative effect of these transmitters," he said.

That's got to be one of the dumbest things I've seen a politician say in... oh, sadly, hours. I wish it was unusual to see a politician spouting junk science and requesting rules to impede the construction of new infrastructure, but unfortunately it happens practically every time I look at the news.

For those not in the know, an 802.11 device puts out no more than a couple hundred milliwatts, and once you take the inverse square law into account, the capacity of such a device to transfer energy to anything nearby is pretty limited.

The city is also filled with millions of such low power emitters. If such devices were a problem, really we'd have much more serious problems than a few new pole top devices. Even banning the hundreds of thousands of existing 802.11 devices people have set up in their homes wouldn't be enough. Cell phones, cell phone towers, walkie-talkies, microwave ovens, microwave communications dishes, television and radio transmitters, etc. are everywhere, in the millions. We'd need to shut all of them down, too. That is ignoring all the televisions, radios, CD players, computers, etc., all of which emit a tiny amount of electromagnetic energy. If we got rid of all of these things, maybe then the marginal change caused by adding some pole-top 802.11 transmitters would be observable, even if it was still completely unimportant to health.

Luckily federal law keeps municipalities from preventing the construction of new cellphone base stations, but nothing protects companies from the likes of Mr. Vallone. Lets hope people laugh at him loud enough that he drops the whole thing, and soon.

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July 28, 2004 9:03 PM

UK Academy Proposes Regulating Nanotechnology

This BBC story just in from the "strangling the infant in the crib" department.

The Royal Society and Royal Academy of Engineering in the UK are about to propose new regulations governing nanotechnology, long before any real nanotechnology has even be developed.

Best quote from the online article:

"Our main concern is that this is a new, powerful technological platform that could be disruptive," said Jim Thomas, from the campaigning ETC (Erosion, Technology and Concentration) Group.

"What does it mean for the poor, disabled, the disadvantaged - people who are usually left out of the debate?"

He stressed that nanotechnology should be developed to benefit all, and that public engagement was essential.

How the poor and disadvantaged might be helped by delaying things like lifesaving technologies and radically less expensive goods, Mr. Thomas doesn't say. Presumably the disabled might be angry about medical nanobots going in, fixing their severed spinal cords and permanently ending their blissful paraplegia.

I'm reminded yet again that the speeches the bad guys in "Atlas Shrugged" make are not parodies — they're the sorts of things real people say. It is almost enough to make me reach for a pack of ciggies with dollar signs on the filters, only I think smoking is stupid.

Perhaps we can introduce Mr. Thomas to the bureaucrats in Ghana, who are also working to help the poor. They may have ideas to trade about the public betterment.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Politics, Science & Technology

July 28, 2004 2:27 PM


I've been citing Wikipedia articles a lot in my recent postings.

I'd like to give the Wikipedia people a bit of a plug. They've instigated a free encyclopedia, written by... well, anyone who cares to help write it. ("Free" in this case means both the free software and free beer senses of the word.) The web site that hosts the encyclopedia is a "Wiki", a system that allows anyone who sees a problem with a page or wants to contribute to do so, immediately. There's literally a button on every part of every page named "edit".

Wikis, like all "open source" style projects, work on the stone soup model. You start with a small implementation of an idea and convince lots of people that they should help you improve it. What starts as a kettle and a rock turns into something far, far better. The public good "problem" is stood on its head. The non-rivalrous, non-excludable nature of pure information doesn't bring the "market failure" traditional economic analysis would predict, but instead becomes an advantage begging to be harnessed.

If any project shows the power of an open source community, it is Wikipedia. In a few short years, they've produced, for free, one of the best information resources I'm familiar with, and they've barely even started. If you haven't looked at Wikipedia, you should.

By coincidence Slashdot is running an interview today with Wikipedia's founder Jimmy Wales.

There's a great quote in the interview that I'd like to share:

I frequently counsel people who are getting frustrated [...] to think about someone who lives without clean drinking water, without any proper means of education, and how our work might someday help that person. It puts flamewars into some perspective, I think.

Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge. That's what we're doing.

I think he's on to something. Couple

  • An internet filled with the complete sum of human knowledge
  • $10 laptop computers with cheap satelite internet access
and I think that it will no longer be possible to keep people poor and ignorant except if they want to be, no matter what their neighbors, religious leaders and governments might want.

For a fictional vision of what such technologies could bring, see The Diamond Age by Neal Stephenson.

July 28, 2004 12:30 AM

Governments and Public Goods

Every once in a while, someone mentions the Public Goods problem to me as an example of why we need governments. They mention all sorts of things as potential public goods, like, for example national defense. This entry is my overarching argument for why the "Market Failure" argument is a poor excuse for government provision of services.

If you already know what a public good is, and a bit about the theory of market failure, skip down to And now for my point.

For the rest of you who want an explanation of public goods and "market failure", and don't want to look at the Wikipedia article I list above, a Public Good is an economic good (that is, a product, service, resource, etc.) that has unusual properties that lead us to believe that a free market might underproduce it.

Specifically, it has to be:

  • non-rivalrously consumed, meaning that any number of people (within reason) can use it simultaneously without impeding each other's access. For example, whether or not someone else is in a movie theater, I can still enjoy the show. Ten people watching does not mean I only get one tenth of the viewing pleasure.
  • non-excludable, meaning that no one can keep you from enjoying the good, and thus you might not pay for it and yet you might still consume it. For example, one might consider fishing in the deep ocean non-excludable, since no one can stop someone from fishing in international waters.

Goods that possess both these features are said to have a problem, which is called "market failure". It is said that the free market will not supply as much of the good as would be truly "efficient" (in the economic sense of the word), because suppliers will not be compensated as much as the "real" demand curve for the good would imply. (See this Wikipedia article if you aren't familiar with supply and demand curves.)

Put another way, if you could exclude people from the benefits of a good, people would be forced to pay for it if they wanted it, but since they can enjoy the benefit without paying, and since one person's consumption does not impact another's, the exhibited demand curve is much lower than the "true" curve, and thus supply will be much lower than might be abstractly thought of as "efficient".

Note that you need both properties for something to be a Public Good. A movie theater has a door that locks, and is thus excludable -- I can keep you from entering if you will not pay. There is not an infinite supply of fish, and thus deep sea fishing is (at the limit) not non-rivalrous. (Fishing might exhibit a different kind of market failure popularly called "The Tragedy of the Commons", but that's a story for another day.)

An example that is often given in economics texts for a Public Good is a lighthouse. Everyone benefits from it, but since it is non-excludable why should I pay for it if someone else will? Thus we would naively expect there to be an undersupply of lighthouses. Another example given is raising honeybees — the bees help nearby farmers, but because they can't be stopped from going to any field in the vicinity, you would naively expect that beekeepers would be under-compensated for their work and thus there would be an undersupply of bee hives.

As it turns out, both of these examples are historically false. Lighthouses were historically supplied by private means, and a lively market exists in renting the use of bee hives to pollinate crops. (See the collection "The Theory of Market Failure" if you are interested in details on both these "textbook fallacies".)

As it happens, I don't believe there really are any public goods (or at least, no "market failures" important enough that we should care much about them). However, let us assume that there might be a few. It is argued that one of the functions of government is to "fix" the market failures that a pure free market might have by intervention. For example, lets say that we believed that national defense was a "public good". The government could then provide the good directly (such as by collecting taxes and running an army with them), or could use subsidies or similar mechanisms to "correct" the market failure.

And now for my point.

For the government to actually fix the so-called "market failure", it has to do two things.

First, it needs to somehow assess what the "true" demand curve is. How might it go about doing that? Is there be some amazing scientific method for figuring out the "true" demand? Unfortunately, as Von Mises and Hayek pointed out in their work on the so-called "calculation problem", there is no particularly good way to figure out appropriate supply and demand curves without resorting to market mechanisms.

In practice, then, we end up with the "calculation" being made fairly arbitrarily, as the result of policial mechanisms. Sadly, as James Buchanan demonstrated in his pioneering work on public choice economic theory, the political method is likely to base its "computation" on the interests of powerful actors in the process rather than on any sort of rational basis. Bureaucrats will have a personal interest in the expansion of their fiefdoms, and thus will always argue for increased production of a good. Firms seeking government contracts will have an enormous incentive to lobby for increased production. (Indeed, if contract worth a billion dollars in profit is in danger, why not spend $900M lobbying if it will retain your business?) Individual members of the public, however, each have only a tiny fraction of the cost of any given government program to bear, so one's personal incentive to lobby against any given program is low. On a billion dollar federal budget item, the average American can save only $3.30 by getting the program canceled — the sum hardly makes the effort worthwhile.

We therefore expect that the government will not make rational decisions about the allocation of a public good, but will instead tend to overspend on it — perhaps even vastly overspend on it.

Second, to fix the "market failure", the government must somehow actually act to supply the missing good, either directly or via government contracts. Because there is no market discipline enforcing the efficient delivery of government services, these services are often supplied in a stunningly bad manner. You can't go to the competing DMV — there is none — so you wait on line for hours to get your drivers license. Why should we expect that the efficiency with which, say, national defense or other purported "public goods" will be supplied would be any greater?

So, here is the crux of the problem with the "let the government supply the public goods" argument: there is no evidence the government can supply putative "public goods" with any greater efficiency than the market that has "failed". Indeed, one might even get less efficiency than one started with. Why, then, is government intervention any better than the "market failure" we started with?

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July 27, 2004 2:09 PM

Denuding the Poor

One of the few economic success stories I can name in Africa is the used clothing trade. People in developed countries give vast amounts of clothing every year to charity. Most of it ends up being sold to used clothing traders, who in turn re-sell it to poor people all over Africa for pennies. African governments might do their utmost to destroy their local economies, but at least the invisible hand has usually been left free to clothe the naked.

Until now, that is.

This morning, I heard a story on the BBC World Service that seemed outlandish — they claimed that Uganda was now taxing imports of second hand clothing to "protect" the local clothing industry.

Naturally, I didn't believe anyone could be that stupid, but a quick search on Google reveals that it is true. See this article, for example, and this one. Indeed, it seems that Tanzania and other African countries are doing similar things.

I'm reminded of Frederic Bastiat's brilliant satire, The Candlemaker's Petition, except this isn't a joke — this is nightmarish reality. To protect a tiny economically inefficient local industry, these governments are driving up the cost of clothing bought by the desperately poor.

If you want to know why Africa is an economic basket case, look no further than this sort of insanity.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Politics

July 26, 2004 11:47 PM

Potemkin Security at the DNC

Another interesting find at Cryptome: according to this set of web pages, security at the Democratic National Convention turns out to be quite unprofessional in places.

I was a bit skeptical, but a friend of mine who is a ham radio operator in Boston confirms the radio frequencies posted are unencrypted and are indeed being used as stated, and the photographs of unprotected facilities speak for themselves. The descriptions in the report are a bit breathless, but they appear to be essentially plausible.

It seems that Potemkin Security is everywhere -- even at a national political convention. We're willing to shut down all the highways in Boston, but no one will even think to properly install fencing or to encrypt security communications.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Politics, Security

July 26, 2004 10:14 PM

Calendar of US Casualties in Iraq

Cryptome has published an extraordinary calendar of every U.S soldier killed to date in Iraq.

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July 26, 2004 9:09 PM

"Improved" Currency

From the meme of the day department:

Rob Mitchell has noted to me that those of us who object to the phrase "In God We Trust" on US paper money have an easy form of protest available to us.

Simply black out the offensive words with a felt tip pen. You'll be taking direct action to make the currency better, and every bill you alter and spend will circulate your opinion of 31 USC 5114(b) far and wide.

This idea seems to have been re-invented several times. Google finds a number of web sites advocating it, such as this one, for example.

I'm sure I'll get mail claiming that marking your bills in this manner is a crime of some sort, but it appears that, arguably, given the intent and result of the action, it is does not meet the definition of defacing the currency in the U.S. code. Apparently adding an advertisement to the currency is illegal, so I would stick to merely inking out the offending phrase rather than adding any words of one's own, even though the statute seems to be discussing commercial advertising. Also, merely inking out the phrase makes it less likely the bill could be argued to be "unfit to be reissued" given that banks put ink marks on bills all the time.

(Rob argues that just inking out the offending phrase is a more powerful statement anyway, and I tend to agree with him.)

Regardless, the activity is probably protected by the first amendment, and as a practical matter, the odds of anything happening to you are likely nil.

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July 26, 2004 9:50 AM

Prison+Parole Population Hits 6.9 Million

Another New York Times story (sorry, registration required and the link will doubtless expire soon) notes that the number of Americans currently in prison or on parole has reached a new high of 6.9 million. That's 3.2% of the population.

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July 26, 2004 8:56 AM

The Price

A few days ago, the number of US military deaths in Iraq crossed the 900 mark. As of yesterday, the Department of Defense had confirmed 903 military personnel killed. (Which soldier was number 900 exactly is unclear. The DoD web site doesn't give out enough information on the ordering of the deaths.) In addition, the current count for deaths among allied "coalition" troops is 117. There are therefore now over 1000 direct deaths among allied military personnel.

There have also been numerous deaths among civilian contractors, for which it is impossible to get a direct count. However, this site lists the names of 116, though there are surely far more.

At least 5,000-6,000 Iraqi military were killed during the course of the war itself, and something like another 12,000 civilians have been killed (though that is a number based on news reports and may be low.)

We are therefore now at something like seven times the number of people killed on 9/11, and this is just in Iraq.

We've also spent something like $125 billion dollars, and we're planning on spending something like $100 billion more. (Sources for a more accurate figure would be appreciated).

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July 25, 2004 3:27 PM

Transport Insecurity

I generally think that trying to stop people from bringing pocket knives onto airplanes isn't very useful. It is an example of what I like to call "Potemkin Security" (or what Bruce Schneier calls "Security Theater"). It provides the feeling that something is being done even if it doesn't actually accomplish much, and thus gives people the ability to say "see, we're doing something about security!"

I mention this today because a friend of mine just told me that they had accidently flown out of LaGuardia Airport a few days ago with a Leatherman in their bag, and hadn't realized it until someone caught it when they tried to board their flight back to New York today. I hear stories like this all the time, and there are even some known incidents of people accidently bringing firearms onto aircraft without anyone stopping them. (I suspect those might happen routinely but for the fact that there are very few people who forget that they are carrying a gun and then try to board an airplane.)

I suppose it shouldn't be surprising that the TSA doesn't even do the wrong job very well. It seems like a fine example of what happens when people demand that the government "do something" about a problem, without contemplating too seriously what the right "something" might be.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Politics, Security

July 25, 2004 2:43 PM

Election Betting

I just noticed (because of a link on Marginal Revolution) that there is an Irish based company called TradeSports that runs an unusual betting operation.

Instead of keeping their own book, TradeSports sets up futures style contracts with cash settlement that pay off based on the outcome of a future event. (I'm reminded of Idea Futures, except for the most part they're doing pretty ordinary sports bets.)

In addition to sports, they're running a number of contracts on future economic statistics, elections and other such things.

(One hopes that perhaps someday they'll do Idea Futures. There are places like the Foresight Exchange that do idea futures, but so far as I know none use real money.)

One reason I mention them is because they're running a set of contracts on the current U.S. presidential election, much like the Iowa Electronic Markets, except they're not a small scale academic experiment.

Currently, it appears that the people on TradeSports collectively believe George Bush's reelection is a 50/50 shot, which is pretty much the same prediction that the IEM and the Foresight Exchange.

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Economics, Politics

July 25, 2004 1:12 PM

Shocking News: Government Agency is Ineffective!

An article in information week reveals the shocking fact that the Department of Homeland Security's efforts to fight "cybercrime" are "plagued by problems". One good quote:
"Despite the progress made, DHS faces significant challenges in developing and implementing a program to protect our national cyber-infrastructure," Ervin's report said.

Of course, one asks what they legitimately could do to "protect our national cyber-infrastructure". Those of us who are actually involved in computer security are working pretty hard to come up with solutions to things like denial of service attacks, viruses, and other issues. There isn't terribly much they could be doing other than law enforcement, and they don't seem to ever do any of that. People are, for practical purposes, never prosecuted for computer break-ins. (There are prosecutions, but they constitute a microscopic fraction of the number of incidents.)

One of the things I find bizarre about the whole thing is that the government is under the delusion that it is, in fact, involved. They spend money and have departments with appropriate names and such, but so far as I can tell none of it has any connection to reality. (I'm not including the folks at places like NSA who actually do computer security for their organizations every day. I mean the various "information security task force" types.)

So, there are folks in Washington who must go in to the office every day and think they are involved with keeping our networks secure, when in fact nothing they do has any impact on the problem at all. This kind of thing appears to be a common feature of large bureaucracies. I've been struggling to come up with a pithy word or metaphor for it without much success. The only thing that pops into mind for me today is the Aztec priesthood. Those where the folks who thought that if they didn't cut out someone's heart every day, the sun would stop rising.

It is sort of the inverse of a "Cargo Cult". Instead of your actions bringing about no results even though you think you're doing everything right, the results you want keep happening even though your actions have nothing to do with it at all, and you are convinced you are the cause.

This brings up a couple of questions.

  • Is there a good word or phrase for this sort of thing? That is, is there a good word for "people who think they're doing something but who are in fact completely uninvolved?" There are excellent phrases for similar concepts -- "Potemkin Village", "Cargo Cult", etc., -- but none of them quite capture the idea precisely.
  • Is it actually for the best that these folks are kept busy thinking they're involved when they aren't, so that they don't cause damage by actually becoming involved? It doesn't seem as though we can prevent the government from wanting to "do something" about computer security, so maybe keeping them occupied with reports, studies and "coordinating activities" is, in fact, a good thing.

Addendum: A friend writes to me and says: The best comment I've heard about DHS is "They can't even piss through an open window."

Posted by Perry E. Metzger | Send Feedback | Permalink | Categories: Politics, Security