Frankly Ironic

by Don Boudreaux on December 10, 2008

in Current Affairs, Markets in Everything, Parenting, Politics

On a day when the top news story is a politician’s attempted sale of a U.S. Senate seat, Thomas Frank, in his weekly column in the Wall Street Journal, takes aim at surrogate-mother contracts.

What irony!  A high-ranking member of the class of people that Mr. Frank believes must protect us from greed – politicians – tries to sell what doesn’t belong to him, while Mr. Frank gets all hot’n'bothered by market transactions in which each person sells only what does belong to her.

Be Sociable, Share!

Comments

comments

Add a Comment    Share Share    Print    Email

{ 45 comments }

Methinks December 10, 2008 at 12:43 pm

Yes, yes. I see the irony. He won't see it. The following will be the response: "You aren't seriously drawing a comparison between a woman's womb and a senate seat, are you?"

If I could, I'd take out my womb and beat him silly.

Methinks December 10, 2008 at 12:44 pm

with my womb, that is.

loses all hope of being mildly amusing if you screw up the execution the way I did.

Speedmaster December 10, 2008 at 12:50 pm

Indeed. I thought the EXACT same thing when I read that this morning!

MnM December 10, 2008 at 12:57 pm

"loses all hope of being mildly amusing if you screw up the execution the way I did."

Posted by: Methinks | Dec 10, 2008 12:44:44 PM

I was still amused…for whatever that's worth. My sense of humor sucks. ;o)

Anonymous December 10, 2008 at 2:02 pm

I wonder if Frank ever considered whether his complaint should, with equal fervor, be directed at childcare.

I could imagine Frank, writing before the widespread popularity of childcare, saying "If childcare ever becomes a widely practiced market transaction, it will probably make child-rearing into just another dirty task for the working class, with wages driven down and wealthy couples hiring the work out because it's such a hassle to be a parent".

LoneSnark December 10, 2008 at 2:04 pm

"If I could, I'd take out my womb and beat him silly."
I got it, didn't need to clarify. Regretfully, one too many horror movies; my imagination went to far and all I saw was a man being beaten under a stream of blood… Not cool.

Martin Brock December 10, 2008 at 2:32 pm

Neither story is pretty.

Martin Brock December 10, 2008 at 2:37 pm

Blagojevich is entitled to appoint Obama's successor as a matter of fact. Why may he not bargain with this right? How different is this dealing from the dealings of a hedge fund manager?

Methinks December 10, 2008 at 2:57 pm

How different is this dealing from the dealings of a hedge fund manager?

In what way are they similar?

cpurick December 10, 2008 at 2:59 pm

Blago is constrained by his oath of office, Martin.

Rolo Tomasi December 10, 2008 at 3:04 pm

@ Martin Brock.

Wow, just…wow. You should run for a city office in Chicago.

Martin Brock December 10, 2008 at 3:57 pm

In what way are they similar?

Both trade entitlements. Titles to property are entitlements, you know. That's why they're called "titles to property".

Martin Brock December 10, 2008 at 3:58 pm

Blago is constrained by his oath of office, Martin.

I haven't read it. Does it forbid him to bargain with his right to appoint Obama's successor?

Martin Brock December 10, 2008 at 4:07 pm

Wow, just…wow. You should run for a city office in Chicago.

We play a game here. The question is rhetorical, but it's a serious question. Markets are places where we exchange property, but what is property? I was a Proudhonist in my misspent youth, and I still sometimes ponder this question.

Don seems almost to be an anarcho-capitalist himself. Vid tells us that the United States of America is only a corporation we bargain with, and our taxes are voluntary payments we make to this corporation for service rendered. Corporations have governing boards, like the Senate of the U.S., and persons appoints members of these boards, either individual persons or electorates.

Doesn't a person entitled to appoint such a member own a valuable property? Why wouldn't he profit from it? Isn't that how capital markets are supposed to operate?

Martin Brock December 10, 2008 at 4:11 pm

Suppose Blagojevich had appointed this surrogate mother to Obama's office in exchange for the use of her womb? What's the problem?

mjohns2 December 10, 2008 at 4:35 pm

Yes Martin, he is forbidden from bargaining with his right to appoint Obama's successor.

Pursuant to the criminal laws of the State of Illinois (720 ILCS 5/33-3(c) and
(d)), ROD BLAGOJEVICH and JOHN HARRIS each are prohibited from committing the
following acts in his official capacity: (1) performing an act in excess of his lawful authority,
with intent to obtain a personal advantage for himself or others; and (2) soliciting or
knowingly accepting, for the performance of any act, a fee or reward which he knows is not
authorized by law.

Methinks December 10, 2008 at 4:53 pm

Both trade entitlements. Titles to property are entitlements, you know. That's why they're called "titles to property".

Martin, I'd think long and hard before I posted such silliness again. I would also seek to understand the difference between a hedge fund and a Governer.

Martin Brock December 10, 2008 at 5:19 pm

It's not silly. I don't deny differences between a hedge fund and a Governor. I assert similarities. One similarity doesn't contradict all differences.

Martin Brock December 10, 2008 at 5:27 pm

… performing an act in excess of his lawful authority, with intent to obtain a personal advantage for himself or others …

This one doesn't seem to apply. Appointing Obama's successor is not in excess of his lawful authority. It is precisely his lawful authority.

… soliciting or knowingly accepting, for the performance of any act, a fee or reward which he knows is not authorized by law.

I need to see the law stating that any fee or reward he sought is not authorized. And even if you present this act, you must show me that he knew it. I'd say you have a pretty tough burden of proof here, based on these laws.

That's not to say that he won't be convicted. That's just a matter of convincing a jury to say "guilty".

Methinks December 10, 2008 at 6:03 pm

Martin,

The problem is that you don't know very much about hedge funds, so you assert similarities that do not exist.

And even if you present this act, you must show me that he knew it.

That is not true. Ignorance of the law does not excuse anyone. As the son of a lawyer, you should know that.

Appointing Obama's successor is not in excess of his lawful authority. It is precisely his lawful authority.

But selling the seat to the highest bidder to obtain personal advantage is not in his authority.

Before you get all philosophical about all the ways in which politicians can behave to obtain personal advantage, etc., let's remember how specific legal language is.

Christopher Renner December 10, 2008 at 6:13 pm

Martin Brock: Don seems almost to be an anarcho-capitalist himself. Vid tells us that the United States of America is only a corporation we bargain with, and our taxes are voluntary payments we make to this corporation for service rendered. Corporations have governing boards, like the Senate of the U.S., and persons appoints members of these boards, either individual persons or electorates.

Doesn't a person entitled to appoint such a member own a valuable property? Why wouldn't he profit from it? Isn't that how capital markets are supposed to operate?

The problem with this analogy is that the citizens of Illinois and of the U.S. are much more akin to shareholders in a corporation than to its customers, the rhetoric of various bureaucracies not withstanding.

Customers usually don't have to care about the internal workings of an organization in order to do business with it.
Shareholders can and should be concerned with the behavior of the people who work for the organization, most of all its executives, if they want to see it accomplish the purpose for which it was created in the first place.

The citizens of Illinois have the right to throw out their governor for what he did just as much as a corporation's stockholders can fire the CEO if he places unqualified friends and relatives throughout the company.

Marcus December 10, 2008 at 6:26 pm

Reading the Thomas Frank column, all I can say is, "Wow." Moral busy-bodies will their nose anywhere.

Marcus December 10, 2008 at 6:30 pm

Moral busy-bodies will STICK their nose anywhere.

Lance December 10, 2008 at 7:18 pm

Upon actually reading the NY Times piece, it appears the lady in question decided to do this for medical reasons, in that it was difficult for her to get pregnant, or maintain the pregnancy once she was pregnant.

Also, I'm not entirely too sure if 'wealthy' couples would seek out the poorest of the poor for this, if it was truly commercialized and universalized. Risky behavior is correlated with poverty, and a couple that is willing to pay another person to carry the child will look for persons who don't engage in risky behavior.

Martin Brock December 10, 2008 at 7:26 pm

The problem is that you don't know very much about hedge funds, so you assert similarities that do not exist.

Hedge funds trade entitlements. This similarity exists.

That is not true. Ignorance of the law does not excuse anyone. As the son of a lawyer, you should know that.

Read the post. The particular law cited explicitly states that ignorance of the law is an excuse.

"… soliciting or knowingly accepting, for the performance of any act, a fee or reward which he knows is not authorized by law."

As the son of a lawyer, I know that most politicians are lawyers and know how to write laws applying to themselves.

But selling the seat to the highest bidder to obtain personal advantage is not in his authority.

Read the post. The particular law cited forbids him to perform an act for personal game only if the act exceeds his lawful authority. If an act does not exceed his lawful authority, the law does not apply at all.

"… performing an act in excess of his lawful authority, with intent to obtain a personal advantage for himself or others …"

But appointing Obama's successor does not exceed his lawful authority.

Before you get all philosophical about all the ways in which politicians can behave to obtain personal advantage, etc., let's remember how specific legal language is.

Exactly. I'm not being philosophical. I'm being legalistic. Read the specific language here. If you were writing a law applicable to your exercise of your authority, how restrictive would this language be?

Martin Brock December 10, 2008 at 7:39 pm

The problem with this analogy is that the citizens of Illinois and of the U.S. are much more akin to shareholders in a corporation than to its customers, the rhetoric of various bureaucracies not withstanding.

So? CEOs often are entitled to nominate board members, and many shareholder organizations have objected to this feature of many corporate bylaws, but they have a tough time changing it, because changing it requires a vote of the board, and the CEO nominates board members. This right of the CEO is valuable to the CEO. He bargains with it. Wouldn't you?

Shareholders can and should be concerned with the behavior of the people who work for the organization, most of all its executives, if they want to see it accomplish the purpose for which it was created in the first place.

So? CEOs are nonetheless often entitled to nominate board members. This entitlement is valuable. Valuable entitlements are the subject of bargaining.

The citizens of Illinois have the right to throw out their governor for what he did just as much as a corporation's stockholders can fire the CEO if he places unqualified friends and relatives throughout the company.

The citizens of Illinois have this right, and the Governor of Illinois has the right to appoint Obama's successor. I suppose the Governor has rights more valuable than a single citizen's right to vote, which has negligible value. This Governor exercised his rights foolishly. Wiser politicians bargain this way without attracting so much attention.

LowcountryJoe December 10, 2008 at 8:04 pm

Both trade entitlements. Titles to property are entitlements, you know. That's why they're called "titles to property".

Equating public servant's position with property. That's rich! But maybe not so far fetched. To make that leap, one has to acknowlegde that public service is a means to: acquiring property through polictical fundraising and kickbacks in some shape or form; that the idea of limiting the influenece of government in our lives has been fundementally broken for quite some time; and that a representative democracy without constraints on the above mentioned influence will just lead to more this kind of 'market' of entitlement-trading blessed with the Martin Brock's Seal of Approval.

Really, a U.S. Senator's post is property, Martin?

Anonymous December 10, 2008 at 8:12 pm

Martin, CEOs and Governors have different responsibilities and therefore are subject to differing sanctions. CEOs have a fiduciary responsibility to shareholders, if a CEO exercises lawful authority (say appointing 'cronies' to certain boards) shareholders have the power to hold that CEO accountable through various means, besides denying the right of the CEO to make appointments.

The feedback mechanism in this case is much more smoother than the feedback mechanism for holding a governor accountable.

Governors have a responsibility to the citizens they govern. Ideally, they should promote the public interest, or what a plurality sees as the public interest. If they fail to meet this responsibility, the citizens will hold them accountable. However, this accountability cannot be exercised at an at-will plebiscite, but rather every four years or so. So, certain laws are enacted to protect against graft and other forms of corruption.

As for legal matters, I think your incorrect. Intent to break the law encompasses the 'knowingly . . .' part. Fitzgerald outlined the intent part in his press conference.

Martin Brock December 10, 2008 at 8:24 pm

… shareholders have the power to hold that CEO accountable through various means, besides denying the right of the CEO to make appointments.

As far as I know, CEOs serve at the pleasure of their board of directors. What specifically are these other "various means" available to shareholders without seats on the board?

The feedback mechanism in this case is much more smoother than the feedback mechanism for holding a governor accountable.

Precisely, what mechanism are you discussing?

Governors have a responsibility to the citizens they govern.

I'm underwhelmed by the gravity of this responsibility.

So, certain laws are enacted to protect against graft and other forms of corruption.

The passive voice covers all sins. Precisely who writes these laws?

As for legal matters, I think your incorrect. Intent to break the law encompasses the 'knowingly . . .' part.

Read the specific law cited. The law itself explicitly makes ignorance of a particular violation exculpatory. Ignorance of just any law may not be an excuse, but ignorance of this specific law explicitly is.

Of course, politicians themselves wrote this specific law applying only to politicians.

Martin Brock December 10, 2008 at 8:44 pm

Equating public servant's position with property.

A Senator is entitled to cast one of a hundred votes governing the expenditure of trillions of dollars annually. Casting this vote is his right. He earns this right by winning an election. The right is valuable to him. Precisely which of these statements is false?

That's rich! But maybe not so far fetched. To make that leap, one has to acknowlegde that public service is a means to: acquiring property through polictical fundraising and kickbacks in some shape or form; …

Suddenly, the libertarians are out in droves defending the good hearted public servants. Wonders never cease.

… that the idea of limiting the influenece of government in our lives has been fundementally broken for quite some time; …

No doubt. I'm not sure the limits ever had much effect in the first place.

… and that a representative democracy without constraints on the above mentioned influence will just lead to more this kind of 'market' of entitlement-trading …

Apparently so.

… blessed with the Martin Brock's Seal of Approval.

Ha! You'd' think I'm the Governor of Illinois or the CEO of Searle myself. Describing something is not a Seal of Approval. Should I rather describe it inaccurately so we can feel better about the magnanimity of our esteemed governors?

Really, a U.S. Senator's post is property, Martin?

Yes, for most intents and purposes, it is. It is a valuable possession of the office holder. Isn't it?

Lance December 10, 2008 at 8:54 pm

It's certainly true CEOS serve at the pleasure of their boards, nor am I arguing that 'shareholder democracy exists'. But shareholders have the power to deny certain ventures that require approval, a merger being an example.

Certainly, shareholders can sue in court if they feel the fiduciary responsibility of the corporation was not followed. A recent example was where a group of institutional investors in News Corp. sued in Delaware Court over structural changes.

The activities of Carl Icahn are another example.

The "public interest" responsibility of governors was juxtaposed to the "fiduciary" responsibility of CEOs. I am, as well, underwhelmed by the gravity of both responsibilities.

Of course, politicians write these laws. However, courts interpret them.

The legislative language introduces mens rea, that's all. It's not a convenient window for politicians to escape out of. I don't see how the law forgives punishable behavior due to ignorance, unless one reads into the law without reflecting upon its interpretation.

As well, what is seemingly being ignored is Gov. Blagojevich's other criminal activity, using state benefits (in the form of sports subsidies) to extract a benefit (the firing of negative editorialists) from a newspaper company.

Keith December 10, 2008 at 8:58 pm

I think many of Martin Brock's points are germane, but they also support the libertarian position that state power is the problem. I think the expectation that a sworn oath, or subsequent outrage at the perceived violation of that oath, will somehow keep out corruption is simply being naive.

Of course, there will be no real moves to curtail or eliminate the systemic problem of allowing the power, only anger at the single person who happened to get caught "abusing" it.

Martin Brock December 10, 2008 at 9:43 pm

Here's the original surrogacy story.

mjohns2 December 10, 2008 at 9:44 pm

He knows soliciting a fee or reward for the appointment of a Senate seat is not authorized by law because the Illinois constitution says so.

SECTION 21. COMPENSATION
Officers of the Executive Branch shall be paid salaries
established by law and shall receive no other compensation
for their services. Changes in the salaries of these officers
elected or appointed for stated terms shall not take effect
during the stated terms.

Methinks December 10, 2008 at 10:19 pm

Also, I'm not entirely too sure if 'wealthy' couples would seek out the poorest of the poor for this…

Oh, God forbid the poor should find any source of income save the pennies rained upon them at the mercy and whim of their benevolent government masters!

The Marxian argument that the poor will somehow be "exploited" by being offered money to do something of their own free will chaps my hide. The left persists making this vacuous argument with mind numbing regularity while exploiting the poor for political purposes against their will. They do this to women and anything else they perceive as weak and easily used for their purposes.

Methinks December 10, 2008 at 10:37 pm

Hedge funds trade entitlements. This similarity exists.

Nope. Hedge funds are in business for one purpose – to trade securities. That is their charter, their raison d'etre and what the regulator and securities laws permit and, in fact, require them to do (you don't actually believe the fiction that they are "lightly regulated", do you?).

Governors do not exist for the purpose of auctioning senate seats to the highest bidder. They exist, like all politicians, to pour sand in the gears of any enterprise persist in operating efficiently despite the state's best efforts, to collect bribes, and to inform you what is in your best interest.

Read the post. The particular law cited explicitly states that ignorance of the law is an excuse.

Ah. Read MJohn2's post above. He is not allowed to take bribes as bribes constitute "compensation". If he's too ignorant to know that, it's his problem.

"…performing an act in excess of his lawful authority,
with intent to obtain a personal advantage for himself or others."

Auctioning off senate seats for his personal gain is beyond his lawful authority because he has no authority to accept compensation for performing his duty (putting an ass in the senate seat) beyond the salary provided him. Apparently, running auctions for senate seats is beyond his authority. Simply assigning them is not.

As the son of a lawyer, I know that most politicians are lawyers and know how to write laws applying to themselves.

Yes, but but state prosecutors with political aspirations don't usually arrest governors without a really good probability of winning their case.

First Spitzer, now this guy.

muirgeo December 11, 2008 at 12:23 am

Frank is a columnist not News reporter. The fact that his column didn't discuss a late breaking news story is probably more a matter of timing then of irony.

Anyway what's great is reading the comments to this ladies pathetic New York Times Magazine piece

She gets torn to hell by about 400 comments from disgusted readers. Nope all that money won't make them a happy family… too bad.

jarhead December 11, 2008 at 1:16 am

We have the best government that money can buy.

LowcountryJoe December 11, 2008 at 5:40 am

Suddenly, the libertarians are out in droves defending the good hearted public servants. Wonders never cease.

If you were to realy read that post, I did no such thing. I've made the leap and have acknowledged. It appears you did as well. What I wrote was to provoke the collectivists [some of them prefer Democratic Pluralists] who come to this blog to think a little. I'll agree with you that there was a market for this senate seat. That a senate seat may in fact be an asset, like property, that can have residual payments if one is to play their cards 'correctly'.

But let's not kid ourselves, Martin, the only reason why this is an asset is because the political marketplace is flawed. There are no true costs associated with being a satified customer in this type of marketplace. The basic difference here is that a politician generally interferes with laissez-faire and that's anti-market; period! And the politician's customer, the voter, did not have to do anything to earn the right to vote. At least in a true market transaction, the customer would have had to sacrifice some bit of labor (or accumulated wealth), if he or she is a trust fund baby, to earn the money to exchange in the market.

So, you do have a point [We play a game here. The question is rhetorical, but it's a serious question. Markets are places where we exchange property, but what is property? Isn't that how capital markets are supposed to operate?] but it's what has led us to this point that doesn't resemble the processes of a market at all.

Methinks December 11, 2008 at 8:22 am

She gets torn to hell by about 400 comments from disgusted readers. Nope all that money won't make them a happy family… too bad.

Well, that's what she gets for writing a story in that rag which is predominantly read by hyenas like you.

Martin Brock December 11, 2008 at 3:28 pm

Officers of the Executive Branch shall be paid salaries established by law and shall receive no other compensation for their services.

That's a little clearer. It means that an officer of the Executive Branch may not hold a second job?

Martin Brock December 11, 2008 at 3:35 pm

… it's what has led us to this point that doesn't resemble the processes of a market at all.

No, it does resemble a market. The only question is one of propriety. May the Governor bargain with his right to appoint Obama's successor, or does law impede this bargaining? In other words, how is the market regulated? If the Governor may not bargain with his right, then it's not a marketable property. That's true enough.

By the same token, this surrogate mother may bargain with her womb, and this hedge fund manager's wife may bargain with her matrimonial rights to her husband's income from trading CDOs, CDSs or whatever.

Martin Brock December 11, 2008 at 3:46 pm

Nope. Hedge funds are in business for one purpose – to trade securities.

A security is an entitlement, so I have no idea why you write "Nope". All titles to property are entitlements. That's why they're called "titles to property".

Governors do not exist for the purpose of auctioning senate seats to the highest bidder.

Don't they?

They exist, like all politicians, to pour sand in the gears of any enterprise persist in operating efficiently despite the state's best efforts, to collect bribes, and to inform you what is in your best interest.

And the difference is?

Ah. Read MJohn2's post above.

This post follows mine. The earlier posts didn't make the point effectively. Frankly, I'm grateful to the Governor. He did openly and brazenly what other politicians do routinely but more discreetly, thus giving us a glimpse of how the sausage is really made.

Yes, but but state prosecutors with political aspirations don't usually arrest governors without a really good probability of winning their case.

I didn't say they aren't likely to win their case. That's a separate issue.

Methinks December 11, 2008 at 6:22 pm

" Governors do not exist for the purpose of auctioning senate seats to the highest bidder.

Don't they?"

Well, maybe in the same way that the SEC is meant to write regulation to protect you from me rather than to protect me from competition from you.

And the difference is?

Explicit BS vs. implicit BS. Gets 'em every time.

Yes, I too am enjoying the tour of the sausage making factory. Spitzer gave us a glimpse of New York's factory only this year. Sadly, people in Illinois are so accustomed to curruption among their politicians that they aren't even batting an eyelash.

I'm just glad we found the one honest IL politician to elect to the presidency….

Randy December 11, 2008 at 6:40 pm

Christopher Renner,

"…the citizens of Illinois and of the U.S. are much more akin to shareholders in a corporation…"

I too find the shareholder analogy useful, though with a different spin. The USA corporation has different classes of shareholders. Class A shareholders actually profit from the workings of government as they control its design, rules, and applications. Class B shareholders are the employees and stakeholders of government. Their shares may or may not have value and they have some input to the operation. Class C shares, what most of us carry, have roughly the same value and purpose as a communion host – that is, to maintain the faith and keep the revenue stream flowing.

Previous post:

Next post: