Behind the Marble Facade, It’s Thuggery

" The great multinationals are unwilling to face the moral and economic contradictions of their own behavior - producing in low-wage dictatorships and selling to high-wage democracies. Indeed, the striking quality about global enterprises is how easily free-market capitalism puts aside its supposed values in order to do business. The conditions of human freedom do not matter to them so long as the market demand is robust. The absence of freedom, if anything, lends order and efficiency to their operations."

William Greider

"tax collection in and of itself is not inherently inconsistent with a free society"

Neither I suppose is murder, rape, arson, larceny, slander, war, or slavery, since those things too have existed in a free society.

“What you call thuggery another may call buggery.”

Posted by TrUmptit.


True, what is called thuggery really is buggery. When those child-labour unfortunates can no longer find employment in “sweatshops” (thanks to western do-gooders), then they have few other opportunities to make an honest living. As a result they are confided to sex tourism, they understand this vile system and it is the only means they can support their families for lack of a higher-paying sweat shop. Unfortunately, the excuses will be made, but the “sweat shop” has proven itself as key to a better life. The “sweat shop” is integral to building a prosperous society. We had them in England, Scotland, and America; and they built our way to middle class living. As for the doubters, I am always amazed at those who find poverty and child buggery quaint.

He's from Ohio so the polls that drive his motives will always be protectionist.

The Black Death was caused by free trading with Asia.

The black Death was caused by disease carried by fleas spread by rats with much blame lying with the general ignorance of the population many of which thought that cats were to blame, and so many natural enemies of the rats were killed.

To say it was caused by "free trade" with Asia ignores the interest that empires and states had in trade with Asia.

Rats were as likely to be carried by military ships of the day as by trade ships.

When governments negotiate for their citizenry, can it make sense (in a free market way) for the collective to withhold market access as means to bargain for more open markets, i.e. the tit-for-tat concession strategy. Individuals bargain like this all the time. Why does it become different when people bargain collectively?

When an individual engages in bargaining, he is doing it with his own resources and knows when the value he desires is available at a price he is willing to pay.

People don't bargain collectively, rather, a collective agency represented by authorized individuals engages in the actual bargaining. Both parties in such a case will only come to agreement when both are satisfied that they will be better off as a result of the bargaining agreement.

If all the people being represented in this process are knowing and willing participants in the arrangement, and hae specified their desired outcome which is in harmony with the desires of their follows, then they may all be satisfied.

When arbitrary authority, as in the state, engages in such bargaining, the incentives are much different.

The authority can only purport to be representing the interests of the people. As it likely has not secured the explicit agreements of the represented individuals in any particular bargaining arrangement, then the agency will bargain on the basis of its own interest and is often subject to influence by those with resources and the greatest interest in the outcome of the bargaining.

Thus the outcome of political bargaining is likely to produce winners and losers among those who are supposedly being represented. Most often it is the case that more of those individuals will end up as losers to the greater benefit of the winners whose concentrated gains outweigh the diffuse costs borne by the losers.

And the losers have to just live with it!

And quite often, if it does worked as desired, the winners have to live with it too.

BTW, many here think that many things should not be put to a vote.

Gee, talking of border patrols - what of those who police goods for the introduction of disease and pests? The Black Death was caused by free trading with Asia.

Then again:

Capitalism - one wolf creates market value by converting the chook into chicken pieces and selling it to the other wolf.

Libertarianism - the wolves eat the chook as it is the natural order.

I guess "we" as expressed through government.

Once "we" do anything it is granted instant legitimacy. It's how most Germans went along with democratically elected Adolf Hitler.

Does this make me an anarchist?

Quote from Daniel Kuehn: "What I mean by that is, we have to raise revenue. How we raise revenue is a function of the implications of taxing income vs. imports."

Who is "we"? That's the problem with income tax.

this

Posted by: Daniel Kuehn | Mar 25, 2009 12:45:33 PM

should leave no doubt the Daniel is a socialist troll.

CRC,

As I was reading down the comments I came across the one from Methinks and intended to post in reply, but I hit yours:

Methinks, I think you got this partly right: "It seems that Americans put all their faith in government until it fails them and then free market reform begins again."

From my observation it is more like:

It seems that Americans put all their faith in government until a failure happens and then they blame the free market and ask for reform in the form of more government action.

More succinctly, people often don't KNOW the cause of a failure but ASSUME it's free-market capitalism.

Posted by: CRC | Mar 25, 2009 1:02:13 PM

and saw there was no reason to, you had said exactly what I had intended.

Thank you.

DAVE - it's conventional wisdom in America that libertarianism = anarchism. How do we fight that all-pervasive perception? I have no friggen clue!

Reading Jeff and Daniel who are obviously intelligent people, one cannot feel more hopeless as to the direction we are all heading.

Statism is so strong and government is so trusted and left unquestioned to right all perceived wrongs that even supposed free marketeers advocate completely unnecessary government control for no real reason other than that is how their mind is set once again proving that if you tell the same lie over and over again it will somehow become the "truth".

Sorry guys.

Jeff,

A. Just because something may better for you, is in no way a license for government to force you to behave in a certain way, otherwise It would be perfectly legitimate for government to tell me to eat my vegetables and lay off excess beer and steak (wer'e getting there, I know).

B. If Cuba or Soviet Russia executes one of their own for importing "contraband American goods that harm the general welfare", do we do the same when someone brings in Russian goods?

In the real world two wrongs don't make a right. They make two wrongs. Maybe you're in accounting. I don't know.

Also, if you're worried about long term, I can assure you first hand that plenty damage is being done right now to businesses in the form of duty, customs brokerage and time - and we still can't export for free!

Freedom cannot be forced. Look no further than Cuba and pray tell me who benefits from us not doing business with them. Cubans are still oppressed as ever - free dental and all - and us and probably the Cubans are all the poorer for it.

Now to address both your questions together: If we wanted to bargain collectively we would bargain collectively, in the form of not doing business with certain countries. As for "showing them", that would do the trick.

If we are not bargaining collectively, that is a clear indicator that we don't wish to and are happier doing business this way. The fact that government has to force it and that without government intervention it wouldn't be, is a clear indicator that liberty is being violated.

One more thing: I did not advocate anarchy. Please read the post.

Daniel - Jim Crow laws were the result of "democracy", so there goes your notion that we all must abide by it.

Daniel,

The "they believe it's a small price to pay for the "protection of American workers"." concern isn't entirely invalid.

It is pretty invalid. At best, it's hypocrisy. If people truly felt strongly about "saving american jobs", they would have paid more for the poorer product without having the government force it on them. It's obvious that people don't really care about American jobs until the government imposes tariffs which the average American doesn't understand and can do nothing about.

More jobs are lost than are gained as a result of protectionism. Where's the concern for that?

Dave wrote, "tariffs differ greatly from taxes and are a form of punishment for not buying the very same item from the vendor the government would have preferred."

This is provably false. Governments have closed markets to negotiate more open markets. So, while in some cases the government prefers one vendor, in other cases it seeks more free trade. Shouldn't we distinguish between the two acts?

Daniel,

Forget the tit for tat part for a sec.

Main point was that tariffs differ greatly from taxes and are a form of punishment for not buying the very same item from the vendor the government would have preferred.

DAVE -

I lost the train of thought on this one and probably won't try to pick this up - but I hope you don't think I was advocating tit-for-tat. I was just observing that the tit-for-tat of protectionism is probably why governments resort to income taxes.

Dave wrote, "As far as "tit for tat", just because they're punishing their own citizenry [...] Forcing people to play the governments game is violating their liberty."

On the first part, is this true in the long run, if it leads to more open markets? We could make the same claim about unilaterally opening markets: some citizens will undeniably suffer. We are enjoined by free market advocates (and I'm one of them) to think in the long term. Long-term, a unilaterally open market produces more prosperity. But can't the same argument be made of collective negotiations to open markets? Can't we accept short-term pain to collectively bargain for a better position in the long term? How is this in opposition to free markets?

On the second part, government *is* force. We can perhaps argue about the legitimate uses of government force. But to reject government force altogether is to advocate anarchy. Such a position is very hard to justify.

If the argument is that we shouldn't have protectionism because it harms liberty, then I say let's get rid of protectionism. IF the argument is that anarchy is a good, protectionism is in opposition to anarchy, so let's not have protectionism -- then I would have to say that since anarchism is self-evidently a *bad* thing, then the argument falls to a false premise immediately.

John, I agree that tariffs can be OK with the following two conditions:

- keep them as low as possible to fund the BASIC needs of government

- make them the same for all products...no special favors for X or Y industry

Then John, there should be a fee for every man woman and child and everything else that crosses the border. Border patrol is paid for by the general revenue from taxes.

There's nothing wrong with tariffs, they're the government charging a fee for goods crossing a border that the government is tasked to protect.

CRC - exactly.

OK Daniel here goes:

Taxes are a necessary and natural part of any society without which would descend into anarchy. Consider it a user fee of sorts.

The above is taxing PROFITS.

There is nothing inherently illegal about buying and selling. As a matter of fact buying and selling happens every minute of the day and while the PROFITS of the transaction are taxed, the TRANSACTION itself is tax free.

Taxing a specific action is in direct conflict with liberty, a punishment for acquiring property from one source as opposed to the source government would prefer.

As far as "tit for tat", just because they're punishing their own citizenry, that's no excuse to punish your own citizenry and using them as pawns. Of course if a private citizen chooses not to buy overseas, that is his prerogative. Forcing people to play the governments game is violating their liberty.

DK,

I'm aware that Keynes is wrong, but I wasn't aware he was hated.


As far as I'm concerned the only people who believe Keynes are politicians who use his work as an excuse to expand their power, people who don't know any better because that's all they were taught, and the haters of talk radio who believe he must be right because Rush says he's wrong.

Daniel, It is true that sometimes Keynes is a "hated source", but MOST of what I have seen in regard to this is addressing the actual ideas and concepts of Keynesianism (and their problems and failings) rather than simply rejecting them because they came from Keynes.

Just for clarification, I'm not talking about the income tax but about the tit-for-tat one sees in trade negotiations between nation-states. Why can't that be compatible with free market principles? Individuals choose to cooperate by collective action all the time. Why is this form of collective action, protectionism as a tit-for-tat strategy to collectively negotiate more free markets, such a bad thing?

John, I totally agree. What you describe is in the realm of the classic ad hominem fallacy and it is common and frustrating.

John -

I notice that too. Another favorite "hated source" is Keynes.

CRC - Something else I've noticed is that many judge words and ideas not on merit, but the source.

For example if a hated talk radio personality, politician, etc says something then the opposite must be true by virtue of the source, not the words themselves.

John: "I've always found it curious how so many people believe that problems caused by too much government can be solved by more government."

I used to find this curious too, but I've come to realize that it comes down to ignorance (sometimes willful) of the real causes. I don't think MOST people REALIZE the problems that government causes, and if you don't realize it (and assume, or are constantly told, it is something else) then you go after that something else. That's actually perfectly rational behavior.

What's not rational, of course, is retaining those assumptions in the face of contradictory evidence, facts and logic.

geoih -

agreed on the tax issue and the tit-for-tat difference. Although I'm not sure how much of a "problem" that is. What I mean by that is, we have to raise revenue. How we raise revenue is a function of the implications of taxing income vs. imports. Noting that it's not tit-for-tat in income is an explanation for why that's what we tax, but it doesn't imply that there's something inherently wrong with taxing income.

Randy -

Exactly right. That's how they live with it. Or they sell. But the point is, collective action isn't inherently antithetical to markets (although obviously it could end up doing things that are anti-market). That was all I was saying.

Daniel,

"something like a democracy"

Intesting turn of phrase, that.

"And the losers have to just live with it!"

Or not. There's always beligerence, non-compliance, counter-propaganda, subversion, sabatoge, and if necessary, open revolt.

Quote from David Kuehn: "You don't have a tit-for-tat threat on the income tax, after all."

The missing "tit-for-tat" is exactly the problem. If you know another country will shut you out of their market if you shut them out of your market, then you don't do it. There is no such "tit-for-tat" with income taxes. It is the majority oppressing and plundering the minority through a monopoly of force, and you try to pretty it up by calling it democracy.

Quote from David Kuehn: "And by golly, I think they use something like a democracy to make collective decisions! And the losers have to just live with it!"

I see that you agree.

There is no collective negotiating when you are forced to an agreement against your will. When it happens between countries it's called imperialism. When it happens inside the US, it's called democracy.

I've always found it curious how so many people believe that problems caused by too much government can be solved by more government.

I guess it comes down to trust, and it seems that the majority trusts government.


Though I find even that to be curious when some of the most feared words one can hear after a knock on the door are "We're from the government and we're here to help you".

What you call thuggery another may call buggery. I couldn't resist that line. But seriously, you, as an economist should be making economic arguments against a particular piece of "protectionist" legislation. If Chinese-made pants are made with slave/prison labor then we need to be protected from such evil. Sorry, but you need to be run out of town on the same rail that bought the rotten goods in the first place if you want to benefit as a consumer or importer from such immorally produced goods. Free-for-alls in (prison) stripped pajamas are for kids' slumber parties not for dapper professors of economics dressed in the finest italian-made suits. I seriously believe that you are deficient in moral training to make good judgments about the ethics involved in protectionist legislation. This blog need to be expanded to include ethicists and political scientists to cover all the bases. It's tiresome for me to be correcting you all the time. I feel mugged most every time I read the stuff written here. I want my time, money and sunk costs back for having my sensibilities inflamed! Legislation may be required to recoup my losses.

CRC wrote: "More succinctly, people often don't KNOW the cause of a failure but ASSUME it's free-market capitalism."

I agree, and beyond this I think that government officials often behave as if they want to obscure the true cause of failure in order to be able to: 1) blame the free market; and/or 2) to be ride to the rescue and make it look as though "only government can solve this crisis."

The notion of a "risk CZAR" being floated by Obama and Co. is exactly this kind of "head fake." The government is largely culpable in the current financial difficulties we face. So what do they do? The propose that we "need" to make it possible for government to be able to interject itself into MORE private sector activity!

The other case where we prominently see this is after a natural disaster when price controls are put in place to prevent prices from going up. This of course leads to shortages which the government then resolves by sending in the national guard with bottled water, etc. I have nothing against the nation guard being sent in, but I am opposed to blocking the price increases that will harness the profit motive in providing disaster relief.

In these and other cases, government interferences with free markets lead to problems that the government then blames on the "unregulated" market and which the government then proposed itself as the only way to resolve a crisis.

The statement "never let a crisis go to waste" is only half of the truth in cases where it is government actions precipitate a crisis or make a difficulty into a crisis.

And the losers have to just live with it!

No. Losers can sell their shares. Buying stock in a corporation is voluntary.

Methinks, I think you got this partly right: "It seems that Americans put all their faith in government until it fails them and then free market reform begins again."

From my observation it is more like:

It seems that Americans put all their faith in government until a failure happens and then they blame the free market and ask for reform in the form of more government action.

More succinctly, people often don't KNOW the cause of a failure but ASSUME it's free-market capitalism.

To the controversy of collective action (e.g., bargaining) comes into play when the collective isn't entirely voluntary AND the "losers" just have to live with what the majority decide.

What's that they say about democracy? Two wolves and a chicken deciding what will be for dinner. ;-)

Jeff -

Excellent point on collective action. People do bargain as a collective a lot - one example is the collective of "shareholders". And by golly, I think they use something like a democracy to make collective decisions! And the losers have to just live with it!

Methinks -

The "they believe it's a small price to pay for the "protection of American workers"." concern isn't entirely invalid. Economic theory is quite clear on the gains from trade - but those are social gains. Usually the gross costs are high and concentrated, and the gross gains are low and diffused, and the net gain is always positive (as far as I know!).

I think you can be legitimately sympathetic to the concentrated gross losses. The concentration of those losses is still a relevant thing to talk about. But as you suggest, a tariff ain't the way to fix it (at least in terms of American workers).

Some have made the "kicking away the later" argument supporting some protectionism for developing economies. I don't know the evidence for this argument as well - don't do development work. So I don't want to go as far as to say my opposition to protectionism is universally applicable.

Agreed. But it's also worth pointing out that in that sense, "protectionism", in terms of a tariff at least, is no more "thuggery" than any other tax. And while I know many here disagreee with me - I don't think I'm being too much of a leftist by saying that tax collection in and of itself is not inherently inconsistent with a free society. So that's just meant to put "protectionism" in perspective.

Which raises the question - why are we (and I include myself in this count) SO unwilling to engage in levying tariffs, but we are more open to levying other sorts of taxes? I think it's the threat of tit-for-tat and the importance of global trade. You don't have a tit-for-tat threat on the income tax, after all. Income taxes are more stable and have less of a tendancy to spiral out of control.

David,

I haven't noticed that the average American understands what's going on to rebel against it until it directly and transparently effects them. The fact that once AIG went bankrupt, the government began using it as a conduit to transfer taxpayer funds to foreign banks and Goldman (which made more money on its hedge against AIG than it got in TARP, thus didn't need TARP) is unseen by most Americans. Note the lack of outrage. Most Americans don't know how much they're paying in Tariffs either and if they do, they believe it's a small price to pay for the "protection of American workers".

It seems that Americans put all their faith in government until it fails them and then free market reform begins again. Every time the cycle turns, there's less freedom because government programs are never cut, only the growth of them is slowed. This puts the U.S. on a downward trajectory. It didn't used to matter because there wasn't a lot of competition from the rest of the world. This is not true anymore.

Don, I have an honest question about collective action. When governments negotiate for their citizenry, can it make sense (in a free market way) for the collective to withhold market access as means to bargain for more open markets, i.e. the tit-for-tat concession strategy. Individuals bargain like this all the time. Why does it become different when people bargain collectively? Is there no logic to collective action?

David,

Fundamentally you are correct that "*any* government action necessarily involves removing freedom from its citizens". The more important question revolves around what freedoms it is removing and which it should and which it shouldn't.

Most libertarians, I believe, come down on the side that claims there are some basic, inalienable, natural rights that all individuals have centered around life, liberty, property, etc. and that it may be a legitimate use of government force to prevent or adjudicated situations when these rights of one person or group are threatened or infringed upon by another person or group.

However, I think we can all agree (whether we think it's a good or bad thing) that governments often use this "monopoly on the legitimate use of force" to go well beyond these basics of right protection and instead move into being the apparatus for private interests to prevent individual from doing certain things or force individuals to do certain things that otherwise could be reasonably voluntary. Furthermore, governments use this "monopoly on the legitimate use of force" to infringe upon people's property rights, typically at the behest of private special interests.

It is amazing that politicians can tell these lies and the public generally lets them get away with it. Government, at its base, is only significantly different from any other organization because it has a monopoly on the legitimate use of force. Of course, anarchists argue that such a concept doesn't exist, and maybe they're right. We have to at least be honest, whether we support a government or not, that *any* government action necessarily involves removing freedom from its citizens. This can be small or large, but there is no denying that it is true. Feel free to try to disprove this at your own peril.

Maybe Sherrod should change his last name from Brown to Brownshirt?