War Is Evil

Injured child

Image courtesy of AfterDowningStreet.org

If in some smothering dreams you too could pace

Behind the wagon that we flung him in,

And watch the white eyes writhing in his face,

His hanging face, like a devil’s sick of sin;

If you could hear, at every jolt, the blood

Come gargling from the froth-corrupted lungs,

Obscene as cancer, bitter as the cud

Of vile, incurable sores on innocent tongues –

My friend, you would not tell with such high zest

To children ardent for some desperate glory

The old Lie: Dulce et decorum est

Pro patria mori.

(The Latin phrase is roughly translated as “It is sweet and honorable to die for one’s country”) – William Owen, a British soldier who died in the trenches just seven days before the Armistice was signed on November 11, 1918

Of all the things that I find frustrating and despicable about modern American society, it is the cavalier attitude towards war exhibited by the vast majority of Americans. There are some pockets of genuine anti-war sentiment on the fringe left and the “isolationist” Old Right and libertarians. But there is a bipartisan agreement, in deed if not in word, that war is tolerable, acceptable, good, or even morally required in an increasing number of cases.

I wasn’t always the whack-job libertarian that I am now; up until about my junior year in high school, I looked at the world as though it was a chess board, with America and her allies being “the good guys.” At the time, war had merely seemed like a means to an end. To make the world safe, America needed to be the dominant power at all costs. And since we were America – the “indispensable” nation, the “exceptional” nation, and the clear occupants of the moral high ground – we could do no wrong. Sure, innocent people will die in war, but it’s for The Greater Good. The Iraqi people may not believe it right now, but once we’ve dealt with some bad apples and established a functioning democracy there, surely they will come around and appreciate the favor we have done for them.

It’s hard for me to believe now that this is the way I felt back then. I was probably even more pro-war than the average American. But it does give me some perspective on why people are so deluded about war, and reinforces my belief that ending foreign aggression in all its forms is the single most important thing that we as activists must be working toward.

 

America – Reluctant Fighter Of “Just Wars”

It is very difficult to garner support for wars of conquest in a modern, liberal democracy. In the past, religion was often used to justify war (“Kill the heathens!”), but this justification has lost much of its appeal.

But while that justification is no longer so effective, the need for the elite to wage war and line their pockets with the proceeds hasn’t ceased. A new way of deluding the public was necessary.

Westerners love to think of themselves as advanced, progressive, humanitarian, and morally righteous. This is true all across the political spectrum (that’s right, liberals. Even the neocons believe that they are doing a good thing, as silly as that sounds). In order to get your average American to support war, you just need to convince them that it is for humanitarian reasons: the enemy is evil, slaughtering his own people, and a new “Hitler.” We can use our military might to change the enemy, to liberate the people who are victims of some monster, and to bring them democracy and responsible governance.

I can do no better than to cite David Swanson from his book War Is A Lie here (you can read chapter 1 here, and I strongly suggest you do):

“The long-standing tradition of making war on foreigners and converting those not killed to the proper religion “for their own good” is similar to the current practice of killing hated foreigners for the stated reason that their governments ignore women’s rights. From among the rights of women encompassed by such an approach, one is missing: the right to life, as women’s groups in Afghanistan have tried to explain to those who use their plight to justify the war. The believed evil of our opponents allows us to avoid counting the non-American women or men or children killed. Western media reinforce our skewed perspective with endless images of women in burqas, but they never risk offending us with pictures of women and children killed by our troops and air strikes.”

If there is a positive intention behind any given war, many Americans will support it almost unquestioningly. Invading Afghanistan = Liberating women and catching Osama. Bombing Libya and/or Syria = saving the people from a ruthless dictator. These justifications are even used to revise the past; many people consider World War 2 to be a paradigmatic example of a just war because it ended the holocaust. Of course, there were many opportunities to save the Jews without going to war, and saving the Jews was never used as a part of World War 2 propaganda at the time (which was mostly focused on dehumanizing the Japanese).

On a slightly more academic level, pundits and philosophers have tried to ascertain what conditions can be used to determine whether a potential war is, in fact, a just war. Damon Linker elaborates:

“[There are] six criteria just war theorists…use to determine when a war is morally justified. The war must be undertaken with the intention of establishing a just peace. It must be defensive. It must be aimed at protecting the innocent against unjust aggression. It must have a reasonable chance of success. It must be declared and waged by a competent governing authority. And it must be undertaken as a last resort. If the war meets these six criteria, it can be considered morally justified.”

In theory, this would sound highly limiting. Very few, if any, wars would actually fulfill each of these criteria. And yet Americans can justify practically every single war based on these criteria.

“We always have a moral rationale for undertaking military action. We always consider our actions defensive (even if the aggression hasn’t happened yet) and aimed at protecting the innocent. We always think we have a reasonable chance of success. We always consider ourselves to be a competent authority. And we always claim to have waited as long as possible to act.”

We delude ourselves into believing we have great reasons to act, that if we don’t act now, something horrible will happen, and that we are just protecting ourselves and the helpless, downtrodden victims of whoever the enemy-of-the-day is. If anything, “just war” theory simply provides a self-righteous justification for whatever war the elite are planning. Not only that, but it grants the United States government and her allies the moral “authority” to play judge, jury, and executioner as the world’s policeman (incidentally, this seems to be the way actual police in America are behaving as well).

Americans fail to realize that their government is not acting defensively, and certainly does not have a moral rationale for much of the military adventurism that is obediently and unquestioningly supported.

In fact, most Americans are likely unaware of how militarily aggressive their government truly is. Since America’s founding, there have been hundreds of instances of military use in foreign lands. There are only a handful of years throughout American history where America has not been at war abroad.

In addition, William Blum counts at least 55 instances since World War 2 where the United States has attempted to overthrow a foreign government (often a democratically elected one), many times successfully.

Interventions Map

And while the United States has often attempted to take down truly evil people, this is a red herring. For every petty dictator the US tries to overthrow, there are more who the US emphatically supports. The US is even backing the fascist, neo-Nazi government in Ukraine, and supporting the use of child soldiers in South Sudan. For all the railing against ISIS and how barbaric they are to behead people, the United States stands firmly behind Saudi Arabia, which beheads far more people for such “crimes” as sorcery and pleading not guilty of a crime. Better yet, the US government itself has been supporting ISIS, I kid you not.

Of course, America can do no wrong, so Americans routinely ignore these inconvenient facts. The illusion must be maintained that it is only the enemy who commits atrocities. David Swanson provides this example:

“It is as important, in selling a war, to deny or excuse one’s own atrocities as to highlight or invent the enemy’s. President Theodore Roosevelt alleged atrocities by the Filipinos, while dismissing those committed by U.S. troops in the Philippines as of no consequence and no worse than what had been done at the massacre of the Sioux at Wounded Knee, as if mere mass murder were the standard of acceptability. One U.S. atrocity in the Philippines involved slaughtering over 600, mostly unarmed, men, women, and children trapped in the crater of a dormant volcano. The General in command of that operation openly favored the extermination of all Filipinos.”

This type of hypocrisy, buttressed by massive propaganda efforts, is so standard that it boggles the mind. Once you begin to recognize it, you see it everywhere. You see it in so many places that you wish you did not. Occasionally I question my own sanity when I observe the absurdity of Americans continuing to believe the same lies and ignore the same hypocrisies over and over and over again.

Take the 2003 invasion of Iraq, for instance. To justify this war, we were repeatedly told that Saddam Hussein had been using chemical weapons on his own people. This is certainly true. What is universally ignored is the fact that the United States supplied Saddam with chemicals weapons during the 80s in order to use against Iran (and supplied him with intelligence so he could use them more effectively). Just one of many reasons why the Iranian government doesn’t trust us.

That’s a sin of omission. How about a sin of commission?

“On October 9, 1990, a 15-year-old Kuwaiti girl told a U.S. congressional committee that she’d seen Iraqi soldiers take 15 babies out of an incubator in a Kuwaiti hospital and leave them on the cold floor to die. Some congress members, including the late Tom Lantos (D., Calif.), knew but did not tell the U.S. public that the girl was the daughter of the Kuwaiti ambassador to the United States, that she’d been coached by a major U.S. public relations company paid by the Kuwaiti government, and that there was no other evidence for the story.  President George H. W. Bush used the dead babies story 10 times in the next 40 days, and seven senators used it in the Senate debate on whether to approve military action. The Kuwaiti disinformation campaign for the Gulf War would be successfully reprised by Iraqi groups favoring Iraqi regime change twelve years later.”

These kinds of lies are so routine that even providing that single example may do my argument a disservice. I can’t possibly list even a miniscule fraction of them, and any attempt to do so would inevitably result in important omissions.

Nevertheless, it is clear that, for war to have public support, the government must convince its subjects that they are acting on the side of righteousness, that they are The Good Guys who must defeat The Bad Guys. And most Americans will go along, because we want to believe that “we” are the good guys. As the great George W. Bush once said:

“We’re taking action against evil people. Because this great nation of many religions understands, our war is not against Islam, or against faith practiced by the Muslim people. Our war is a war against evil. This is clearly a case of good versus evil, and make no mistake about it – good will prevail.”

In every war, the enemy is made out to be pure evil – it makes it far easier to get your soldiers to kill those people and your civilians to cheer them on or buy war bonds. But while the manipulation may serve elite interests, it makes no logical sense.

“But just as the supposedly irredeemable heathen were converted to the correct religion when the screaming and dying stopped, so too do our wars eventually come to an end, or at least a permanent occupation of a pacified puppet state. At that point, the irredeemably evil opponents become admirable or at least tolerable allies. Were they evil to begin with or did saying so just make it easier to take a nation to war and persuade its soldiers to aim and fire? Did the people of Germany become subhuman monsters each time we had to make war on them, and then revert to being full humans when peace came? How did our Russian allies become an evil empire the moment they stopped doing the good humanitarian work of killing Germans? Or were we only pretending they were good, when actually they were evil all along? Or were we pretending they were evil when they were only somewhat confused human beings, just like us? How did Afghans and Iraqis all become demonic when a group of Saudis flew airplanes into buildings in the United States, and how did the Saudi people stay human? Don’t look for logic.” – David Swanson

 

Ignoring The Costs Of War

What war really looks like

This is what war really looks like, courtesy of AfterDowningStreet.org

For Americans to fully support a war, it often isn’t enough to whip them into a frenzy of fear and jingoistic sentiment. War is expensive in terms of blood, treasure, and its toll on society, so it is important that the impact of these costs of war be minimized.

Americans happen to be very lucky when it comes to war. Surrounded by two oceans and two far weaker allies, it is very unlikely that any war the United States gets involved in would have drastic consequences for American civilians. Other than a couple of Japanese weather balloon experiments during World War 2, Americans haven’t experienced attacks at home since the Civil War ended.

War is also very expensive from a strictly financial perspective. But Americans don’t pay for war directly – the United States simply goes into huge amounts of debt and prints massive quantities of money in order to fund the war effort. This helps mask the true cost of war; instead of actually paying for it directly, Americans pay via higher prices and enslaving their children with debt.

Consider this: the total cost of the Iraq and Afghanistan wars will likely amount to somewhere between $4 and $6 trillion dollars. This comes out to between $35,000 and $52,000 per household in the United States. According to the US Census Bureau, the median household income in 2013 was just under $52,000. Here’s a thought experiment: if Americans were told at the outset that they would have to sacrifice a full year of income to pay for these wars, how many people would have supported them? To ask the question is to answer it.

The result of all of this is that for the average American, war is simply no big deal. It happens “over there” and has no immediate effect on our lives (other than expanded mass surveillance and loss of liberties, a concession it seems most Americans are quite willing to make). This makes it easy for many Americans to forget what a horrendous thing war is – and to come up with some twisted justifications for it. War means little to the majority of Americans, but to the neoconservatives and the “humanitarian” interventionists with their “responsibility to protect” (R2P) doctrine, it provides a cheap excuse to feel good about themselves.

Even if using the military to intervene in foreign affairs were likely to help people – and there are many reasons to believe that regional interventions are misguided and counterproductive – this hardly makes war morally justified.

Think of it this way: nearly everyone would agree that it is morally wrong to murder a random person and harvest their organs in order to save five other peoples’ lives. Many might put the ratio far higher than five to one. This means that for a war to be justified as “humanitarian,” at least five innocent lives would need to be saved for every one innocent life lost, and this is ignoring the massive uncertainty inherent in the actual decision-making process, the propensity to underestimate casualties, etc. As we will see later, it is highly unlikely that this would ever be the case.

And yet, in large part because Americans are so far removed from the costs of war, they can come up with all kinds of utilitarian justifications for it. It is a “necessary evil.” “We’ve got to crack a few eggs to make an omelet.” And so on. Tolstoy’s words ring true here: war, he said, “is not a polite recreation, but the vilest thing in life, and we ought to understand that and not play at war.”

How can wars be used to fight against evil when there is nothing more evil than war?

 

Forgetting The Human Element

The ultimate result of everything covered thus far – the propaganda, the hypocrisy, the remoteness of war – leads to the failure to look at people as individuals and as real human beings.

Stalin famously said that a single death was a tragedy, but a million deaths was just a statistic. The reality is that a million deaths are a million tragedies; unfortunately, people choose not to see it that way. There are many reasons to be against war, but ultimately it comes down to the sheer scale of the human cost, the million individual tragedies.

Napalm girl

A victim of napalm, after it has already burned off all her clothes.

It is not easy to count the dead in war, but people have done their best to compile estimates. World War 1 resulted in approximately 15 million deaths. World War 2 resulted in about 66 million dead, primarily civilians. Approximately 3 million died in the Korean War, and another several million in Vietnam. Over a million people, almost entirely civilians, have died as a result of the US invasions of Iraq and Afghanistan (despite the Pentagon’s attempts to fudge the numbers), which is only one part of the incredible human cost of these wars.

And those figures ignore the particular atrocities of war: massacres, rapes, displacement of people. In fact, 90% of all war deaths are civilians. Take Vietnam:

“According to study by Harvard Medical School and the University of Washington, there were 3.8 million violent war deaths, of which two million were civilian, with similar estimates reached by the Vietnamese government and Robert McNamara himself. Up to 500,000 Vietnamese women turned to sex work. 14,000 South Vietnamese civilians were killed, mostly by U.S. firepower, during the Tet Offensive. 70 million liters of herbicidal agents, notably Agent Orange, were dumped across the countryside. (“Only you can prevent forests” was the travestied Smokey the Bear slogan.) 3.4 million combat sorties were launched by the U.S. and South Vietnam between 1965 and 1972. The amount of ammunition fired per soldier was 26 times higher than in World War II. In the northernmost province of South Vietnam, Quang Tri, only 11 out of 35,000 villages were not damaged by bombing or artillery. A survey found that 96 percent of Marine Corps second lieutenants said they would torture prisoners to obtain information.”

Another inconvenient truth that most Americans don’t hear about is that due to American sanctions, up to half a million Iraqi children starved to death during the 1990s.

“There are disputes over the exact number of children who died as result of the sanctions, but most everyone agrees that the number ranges between 225,000 and 500,000…Let that sink in: Our own government — the U.S. government — knowingly and deliberately implemented and maintained a cruel and brutal policy with the intent to target the civilian population of Iraq, with the full knowledge that it would cost the lives of countless innocent people, including innocent children.

Even worse, year after year, knowing full well that economic privation, near-starvation, and death were the actual results of the embargo — and that it was not producing the ouster of Saddam Hussein from power — U.S. officials nonetheless steadfastly continued it.”

When asked about the effects of these sanctions, US Ambassador to the UN Madeleine Albright said they were “worth it.”

Worth it for whom?

Oh yeah, and the United States is the only nation to ever use nuclear weapons. In particular, they were used on civilian populations, resulting in hundreds of thousands of innocent deaths.

I’m afraid that, in the spirit of Stalin’s words, the magnitude of these atrocities can get lost in the minds of most people. Many people claim they cannot “understand” or “believe” or “comprehend” these kinds of atrocities.

Let me try to help you understand.

Each one of those dead is a parent who will never see their child grow up, leaving behind a kid who must grow up without them. Each one of those dead is a child who could have lived a full life. Instead, they are the cause of the greatest sadness that a parent can experience.

Each one of those dead is a brother, sister, husband, wife, cousin, or friend. They are a human being.

When our politicians talk about the sacrifices that “we” make to “liberate” another country, they are not talking about their own sacrifices. Their “sacrifice” is to collect more money for their next campaign cycle and ensure that they have lucrative jobs in the military-industrial complex when they leave office.

No, it is everyone else who had no say in the decision to go to war who must sacrifice. More accurately, they are sacrificed on the altar of power. These people did not sign up for war. They did not ask to be murdered. They did nothing to deserve being murdered.

But these people are dead. That means no more life, no more learning, no more career, no more sharing happy moments with each other, no more music, no more friendship, no more love.

These people will never get to taste delicious food, watch a sunset, feel a cool breeze on their skin, smell freshly cut grass, or hear a beautiful melody.

Each and every one of these people meant something. They had family and friends who loved them, they had jobs and contributed to their communities, and they had hopes and dreams and aspirations. Just like you, me, or anyone else.

Iraqi burned alive in jeep

Attempting to escape his jeep, this Iraqi was burnt alive while struggling to survive.

These lives have been stolen by the elite political and corporate warmongers, and they can never be brought back. The last memory a child will have of his parents is of them being burned alive by a drone strike so badly that their skin is indistinguishable from cattle. The last memory a parent will have of their child is of them screaming in pain and terror, confused as to what they have done to deserve their fate.

These people are dead. Barack Obama murdered them. George Bush murdered them. As Harry Browne said, they murdered these people “as certainly as though [they] personally had fired a rocket launcher at their homes.”

All this death is meaningless. The only purpose of war is so that psychopathic politicians can enjoy their little power trips, and so that big defense and energy companies can make a few extra billion dollars. War is a racket, pure and simple.

Many will euphemistically and irresponsibly talk of “collateral damage.” They will say these deaths are unintended, as though somehow that implies that they don’t count. But innocent people WILL die in war. If you support war, you support innocent people dying, being maimed for life, and losing everything they have. You cannot simply separate war from the tragedies that it spawns. Those who launch wars do so knowing full well that they are causing innocent people to die, and those who support them are advocating for death and destruction.

Under normal circumstances, this is called mass murder. War turns otherwise normal people into sociopaths. What the average war supporter is advocating others to do on their behalf, they would never do on their own. War supporters would not go out and shoot innocent people, but they will happily delegate that task to someone else. Meanwhile, they feel proud of themselves and may even put a bumper sticker on their car saying as much.

This all stems from the failure of people to look at others as individuals, as fellow human beings. It is far easier to cheer on the deaths of some ambiguous, generic Iraqis than to cheer on the death of a person who is real to you. As Lucy Steigerwald said:

“Being anti-war requires a faith in people of a different religion who live in places most of us will never visit. It demands empathy and recognizing their humanity, regardless of culture clashes.”

This may require putting yourself in their shoes. Imagine how you would feel if the roles were reversed – if bombs were raining down on your city, your family and friends were getting maimed and murdered. It is this kind of empathy that is required to stop people from worshipping cowardly monsters like Chris Kyle, the famed “American Sniper.” Imagine what would happen if some Middle Eastern country really did try to take over America, and Americans fought back. Enter an Arabian Sniper:

“A guy named Abdul is hiding on a roof top in Wichita, using a scoped rifle to shoot people he believes are intending to kill other members of his army of invaders. If the person in his scope looks American- in other words, if the person obviously isn’t one of his guys- and is armed, he shoots. Man, woman, child- it makes no difference. After all, he tells himself, these dogs deserve it because they are all the same, and they want to kill him and his guys.”

When Abdul returns to his home country, his people consider him a hero. As an American, do you?

Such is the irrationality that must be overcome. If it is not okay for them to kill us, then it is not okay for us to kill them. War is just mass hypnotic psychosis. It is always wrong. But powerful interests will always be pushing for more war and more death. It is the job of each and every one of us to have empathy for others and to refuse to resolve our disputes through violence.

Those who make the wars never have to fight the wars.  The Great Deciders will never be in a night ambush, where the fear is so overpowering that their bodily control abandons them, and they shit themselves.  And the defense contractors, engorged on obscene profits, will never have to kick open a mud hut door after strafing it with automatic weapons fire, and discover a heap of dead children beneath a wounded mother, who is so traumatized that she cannot even scream.  And the media tycoons cheerleading for more carnage, will never rush to the flag-draped coffin of a dead son or daughter and wrap themselves around it in fury as the military band tries to sound heroic.”

Are Private Prisons Compatible With Libertarianism?

Prison

Three decades after the war on crime began, the United States has developed a prison-industrial complex—a set of bureaucratic, political, and economic interests that encourage increased spending on imprisonment, regardless of the actual need. The prison-industrial complex is not a conspiracy, guiding the nation’s criminal-justice policy behind closed doors. It is a confluence of special interests that has given prison construction in the United States a seemingly unstoppable momentum. It is composed of politicians, both liberal and conservative, who have used the fear of crime to gain votes; impoverished rural areas where prisons have become a cornerstone of economic development; private companies that regard the roughly $35 billion spent each year on corrections not as a burden on American taxpayers but as a lucrative market; and government officials whose fiefdoms have expanded along with the inmate population. Since 1991 the rate of violent crime in the United States has fallen by about 20 percent, while the number of people in prison or jail has risen by 50 percent. The prison boom has its own inexorable logic. Steven R. Donziger, a young attorney who headed the National Criminal Justice Commission in 1996, explains the thinking: “If crime is going up, then we need to build more prisons; and if crime is going down, it’s because we built more prisons—and building even more prisons will therefore drive crime down even lower.” – Eric Schlosser, The Atlantic

The United States has, bar none, the largest prison population in the world. According to the ACLU:

  • With only 5% of the world’s population, the U.S. has 25% of the world’s prison population – that makes us the world’s largest jailer.
  • Since 1970, our prison population has risen 700%.
  • One in 99 adults are living behind bars in the U.S. This marks the highest rate of imprisonment in American history.
  • One in 31 adults are under some form of correctional control, counting prison, jail, parole and probation populations.

On top of these horrid statistics, 86% of all Federal inmates are being incarcerated for victimless crimes, such as drug use or administrative crimes (not filling out paperwork in time, etc.). And imprisoning all of these people isn’t cheap: According to the national Prisons Bureau:

The fee to cover the average cost of incarceration for Federal inmates in Fiscal Year 2011 was $28,893.40. The average annual cost to confine an inmate in a Community Corrections Center for Fiscal Year 2011 was $26,163.

According to a report from the Vera Institute for Justice, in the 40 states that participated in their study, the total cost of incarceration to taxpayers was $39 billion! And all of that money is fueling an industry of great import: the prison-industrial complex. This includes, among others, construction firms, prison managers, wardens, food service providers, security personnel and technology, counselors, and so on. This complex is becoming increasingly private rather than public, as described in a 2012 report from the Sentencing Project:

In 2010, private prisons held 128,195 of the 1.6 million state and federal prisoners in the United States, representing eight percent of the total population. For the period 1999-2010, the number of individuals held in private prisons grew by 80 percent, compared to 18 percent for the overall prison population. While both federal and state governments increasingly relied on privatization, the federal prison system’s commitment to privatization grew much more dramatically. The number of federal prisoners held in private prisons rose from 3,828 to 33,830, an increase of 784 percent, while the number of state prisoners incarcerated privately grew by 40 percent, from 67,380 to 94,365. Today, 30 states maintain some level of privatization, with seven states housing more than a quarter of their prison populations privately.

Libertarians advocate for the privatization of all government “services,” and this includes the prison system. Whenever I mention that “public” utilities and “public” works ought to be done privately, a common retort is to “look at how that has worked in the prison industry.” But how libertarian are private prisons anyways?

The answer to this question is quite nuanced, with many subtleties that are difficult for statists to grasp. Hell, they are pretty difficult for many libertarians to grasp too! In this post, I’d like to set the record straight (while acknowledging that there are differences of opinion among libertarians on this issue).

 

The Problem With Private Prisons

If you assume that a society based on market anarchist ideals would have a similar system of justice as our current world (an assumption which, as I will argue later, is unlikely), then everything, including prisons, would be privatized.

But the very existence of a state changes the dynamic in very important ways. In a post slamming libertarianism because of the abuses of the private prison industry, Gus DiZeriga writes:

Privatization of prisons creates corporations with a vested interest in maintaining current crimes as illegal even when there is no just reason for doing so, because it guarantees keeping their cells filled and their profits high. They also have a vested interest in criminalizing additional behavior. They demonstrably use some of their profits to support friendly legislators and lobby for legislation they desire. And their political favors are returned.

All libertarians will agree on this point. And this makes things complicated, because in the purely voluntary society envisioned by libertarians, there would be no state influence, which essentially nullifies this problem. To bribe the whole slew of private defense firms and insurance companies in order to maintain these unjust arrangements would be prohibitively expensive (though technically not impossible).

In any case, the state does currently exist. And as such, we are seeing an incredible amount of “public-private partnerships” and corrupt lobbying, with all the perverse incentives that this entails.

According to Think Progress, the lobbying budgets of these private prison companies are significant:

In the past decade, three major private prison companies spent $45 million on campaign donations and lobbyists to push legislation at the state and federal level. At times, this money has gone to truly nefarious legislation. A 2011 report found that the private prison industry spent millions seeking to increase sentences and incarcerate more people in order to increase the industry’s profits. 30 of the 36 legislators who co-sponsored Arizona’s now mostly invalidated immigration law — which would have landed many more people in detention — received campaign contributions from private prison lobbyists or companies, including CCA and GEO. According to a report released last year, CCA spent over $900,000 on federal lobbying and GEO spent between $120,000 to $199,992 in Florida alone during a short three-month span in 2011. $450,000 went to the Republican national and congressional committees, while Democrats received less than half that number. House Speaker John Boehner (R-OH) and Sen. John McCain(R-AZ) were also among the private prison lobby’s top benefactors.

Some more specifics regarding the two biggest players in the for-profit prison industry, Corrections Corporation of America (CCA) and GEO group:

And this lobbying is for decidedly un-libertarian aims. For instance, CCA proposed to buy prisons from 48 states, with the stipulation that the states agree to maintain a 90% prison bed occupancy rate for at least 20 years! And they lobby for harsh mandatory minimum sentences, “three strikes” laws, and so on.

On the surface, this presents a real problem for libertarians, at least from the perspective of those with an incomplete understanding of the philosophy. After all, isn’t the move toward privatization of prisons exactly what libertarians have been suggesting?

Not quite. The “prison” system envisioned by anarchist libertarians is radically different, and a brief sketch of it will be outlined in the next section. In the meantime, it is important to note that the current prison system, whether administered privately or publically, possesses the same perverse incentives.

Liberals routinely argue that the profit motive creates perverse incentives in the prison industry. This is certainly true. But liberals do not understand what “profit” really means (any individual can profit, not just massive corporations), and ignore the fact that a purely state-run prison system has a similar incentive structure, perhaps to a slightly smaller degree.

cage prison

There is no reason to believe that a state-run prison would behave differently than any other government bureaucracy. As with all government agencies, administrators will continue to seek larger budgets. And both success and failure, however awkwardly they would be defined for a prison system, would provide justification for increased budgets, hiring more employees, and greater benefits.

Corrections guard unions and police unions are interest groups that, so long as the state apparatus exists, would directly benefit from and lobby for increased criminalization of assorted activities in order to expand the prison population. This is the same kind of rent-seeking behavior that you would see in the private sector.

In addition, public employees face additional perverse incentives related to protecting their members from accountability. We see this all the time with “qualified immunity” for police officers, making it nearly impossible to prosecute them for abuses, but it also happens with corrections officers. One example would be how the guards’ union in Maryland successfully lobbied to pass the Correctional Officers Bill of Rights. This is a law “which made it much harder to discipline bad correctional officers — thus reducing C.O.s’ accountability and facilitating brutality and corruption scandals,” as legal scholar Sasha Volokh explains.

To sum up, Nathan Goodman argues:

Thus, public choice theory suggests that those who benefit have more incentive and ability to influence policy than those who bear the costs, so we see a rise in incarceration, regardless of whether it’s good policy for the general public. The perverse incentives are easy to illustrate when ruthless corporate profiteers are the beneficiaries and rent seekers, but local populations that want jobs as prison guards have the same types of incentive problems. This is why we need to push not just against for-profit prisons, but against all prisons. The economic logic of state financed prisons encourages a growing prison state.

 

Restitution, Justice, And Anarchist “Prisons”

Under the current state capitalist system, a private prison may be owned privately, but it is still paid by the state using money that is stolen directly from taxpayers. Fundamentally, this makes the private/public distinction a less relevant one from the libertarian standpoint – either way, the system is unjust.

Philosophically, there is a huge difference between the ideals of an anarchist system of incarceration and that which exists under our current state capitalist system. As of right now, justice is about punishment. If you are convicted of a crime, you are expected to be punished with a prison sentence. But does putting criminals in prison do anything to help the original victim of the crime?

Of course not! A more appropriate system would focus on restitution rather than punishment. This means, broadly, attempting to make the victim “whole” again. It is fairly easy to see how this would work in a case of theft. Let’s say I steal $10,000 from you. You are entitled now to those $10,000 plus interest, and perhaps even more than that (but I’ll leave it to the legal scholars and legal entrepreneurs to determine the appropriate amounts). This is covered under your “theft insurance,” so the insurance company pays for the damages right away, and now owns the claim to restitution from the criminal. An investigation is conducted, a criminal is found, and they are tried and convicted. That’s where the anarchist “prisons” come into play, but I will get to that in just a moment.

You may find this plausible in cases of theft, but what about crimes that can’t be compensated for, such as murder or rape? A similar “murder insurance” could be put in place. I can take out a policy stipulating that my next of kin gets $200,000 in case I am murdered. The rest proceeds accordingly, with the murderer needing to pay up.

If you are not an anarchist, you probably are quite skeptical of this explanation, because it is so far removed from our modern system. You likely have many questions. It is not my intent to go into detail on the ins and outs of a completely anarchist legal system, but there is no shortage of explanations out there on the internet, so I suggest you read through a couple of these before blithely assuming it can’t work. Here are a few to help get you started:

Okay, so what about the actual prisons?

For starters, I must get the obligatory disclaimer out of the way: there is no single way that an anarchist society will work. When we talk about free markets, we must admit the fact that due to entrepreneurial alertness, new technologies, and new business models, systems can and will evolve. In addition, the differences between the current system and an anarchist system are so pronounced, it may be hard for some to comprehend. As Brad Spangler notes:

Perhaps no other thing the state does offers so much potential for privatization nightmare stories as prisons do. There’s a reason for this. Prisons themselves, as we understand the term today, are inherently abusive and criminal enterprises — whether managed directly by a state or a state-affiliated monopoly contractor.

Does that mean there will be nothing like prisons in a market anarchist society? Yes and no. Context matters. We’re really talking about two different things — “privatization” under statism is not the same thing as what will likely result in the marketplace if we were to abolish the state and make “law” a free market for consensual dispute resolution with justice understood as restitution rather than punishment.

But amidst the extreme contrast between these systems, it is easy to discern a critical difference: because the system is based on restitution, the criminal will be liable for some specified amount of damages for whatever crime they commit. Chances are, they will owe the money to their own insurance company or “Dispute Resolution Organization,” who will act as a kind of cosigning agent for an individual’s interactions (not unlike insurance companies do today). If they are not insured this way, they will owe the money directly to the victim or their agent.

Either way, the criminal would be held responsible in some way. If insured, their insurance company may simply increase their premium, particularly in cases of less extreme crime. A form of house arrest is another less invasive option. But in more extreme cases (theft of large sums, murder, rape, etc.), or if uninsured, the criminal may then end up in “prison.”

Here, another major difference between anarchist “prisons” and modern prisons comes up. Today, if you are sent to prison, you have no choice in the matter. You become a captive, entirely subject to the will of your captors. If they send you to a horribly abusive prison, too bad. Or you might get lucky. But either way, you have no choice.

Under anarchy, you would get to choose which “prison” you went to. Or, you’re insurance company would choose (or give you options. There are an infinite variety of models here) for you. Of course, insurance companies won’t want to be associated with “prisons” known to have horrid, abusive conditions, and criminals certainly won’t choose to go to them, so these “prisons” have an incentive to have reasonable living conditions. Robert Murphy elaborates:

Consider: No insurance company would vouch for a serial killer if he applied for a job at the local library, but they would deal with him if he agreed to live in a secure building under close scrutiny. The insurance company would make sure that the “jail” that held him was well-run. After all, if the person escaped and killed again, the insurance company would be held liable, since it pledges to make good on any damages its clients commit.

On the other hand, there would be no undue cruelty for the prisoners in such a system. Although they would have no chance of escape (unlike government prisons), they wouldn’t be beaten by sadistic guards. If they were, they’d simply switch to a different jail, just as travelers can switch hotels if they view the staff as discourteous. Again, the insurance company (which vouches for a violent person) doesn’t care which jail its client chooses, so long as its inspectors have determined that the jail will not let its client escape into the general population.

Under anarchy, the criminal becomes the “customer” for detention facilities, rather than the state. This creates a whole different incentive structure. These facilities would resemble something more akin to a high-security hotel than to a modern prison – they would cater to criminals who need a place to stay while working off their debts in order to pay restitution.

proactiv prison breakout

In our current, state capitalist system, private prisons have an incentive to cut costs – perhaps by hiring fewer guards, paying less for healthcare and food, and through generally crappier conditions. Under anarchy, prisoner choice provides a countervailing force. And insurance companies may pay for prison upkeep, so there need not be forced labor by prisoners to pay for their expenses.

I certainly haven’t covered all possible contingencies here. But it should be clear from the sketch above that an anarchist prison system need not suffer the same kinds of intolerable abuses that are so prevalent today in both private and state-run prisons.

 

Prison Labor And The Prison-Industrial Complex

Since 1980 spending on corrections at the local, state, and federal levels has increased about fivefold. What was once a niche business for a handful of companies has become a multibillion-dollar industry with its own trade shows and conventions, its own Web sites, mail-order catalogues, and direct-marketing campaigns. The prison-industrial complex now includes some of the nation’s largest architecture and construction firms, Wall Street investment banks that handle prison bond issues and invest in private prisons, plumbing-supply companies, food-service companies, health-care companies, companies that sell everything from bullet-resistant security cameras to padded cells available in a “vast color selection.” A directory called the Corrections Yellow Pages lists more than a thousand vendors. Among the items now being advertised for sale: a “violent prisoner chair,” a sadomasochist’s fantasy of belts and shackles attached to a metal frame, with special accessories for juveniles; B.O.S.S., a “body-orifice security scanner,” essentially a metal detector that an inmate must sit on; and a diverse line of razor wire, with trade names such as Maze, Supermaze, Detainer Hook Barb, and Silent Swordsman Barbed Tape. – Eric Schlosser

Contrast the humane system above with the thoroughly exploitative system of prison labor that exists now. Currently, prison labor is abused in all the typical ways that crony capitalism is known for.

Big companies will use cheap prison labor to gain a competitive advantage by cutting labor costs significantly. Think about it: there’s no need to worry about the workers going on strike; there’s no need to pay for unemployment insurance, vacation time, or any other benefits; the workers are full-time and never show up late; and if they don’t like how much they are getting paid, too bad! They can just get locked up in isolation.

And compare this with the savings that would be generated from outsourcing. While cheap labor abroad is still quite cheap, there are additional costs associated with transporting goods around the world, which is far less of a concern while using local prison labor. Note that state-run prisons also contract out their prisoners for labor, not just private ones. A prison laborer typically makes between 93 cents and $4.73 per day, often working with toxic substances and without the protections that a normal worker would have.

So, not only do the private prisons make a bunch of money from getting guaranteed payments per prisoner regardless of cost, but other large corporations get to take advantage of what basically amounts to slave labor. What is this exploitation creating, and who benefits? Two informative articles from Global Research help answer these questions (see here and here).

Predictably, the potential profit of the prison labor boom has encouraged the foundations of US corporate society to move their production forces into American prisons. Conglomerates such as IBM, Boeing, Motorola, Microsoft, AT&T, Wireless, Texas Instrument, Dell, Compaq, Honeywell, Hewlett-Packard, Nortel, Lucent Technologies, 3Com, Intel, Northern Telecom, TWA, Nordstrom’s, Revlon, Macy’s, Pierre Cardin, Victoria’s Secret, and Target have all begun mounting production operations in US prisons.

That should give you some idea of the kinds of things these prisoners are making, but here’s some more detail:

According to the Left Business Observer, the federal prison industry produces 100% of all military helmets, ammunition belts, bullet-proof vests, ID tags, shirts, pants, tents, bags, and canteens. Along with war supplies, prison workers supply 98% of the entire market for equipment assembly services; 93% of paints and paintbrushes; 92% of stove assembly; 46% of body armor; 36% of home appliances; 30% of headphones/microphones/speakers; and 21% of office furniture. Airplane parts, medical supplies, and much more: prisoners are even raising seeing-eye dogs for blind people.

Should it really be at all of a surprise that the prison-industrial complex is another cog in the military-industrial complex? Of course the captive labor in prison is being used to make military supplies on the cheap (but don’t worry, the Pentagon will still pay top dollar for crappy weapons projects like the F-35).

The whole system ties together quite nicely. If you take a look at this list of companies that own more than 1 million shares of CCA and GEO Group, you’ll notice many of the big players in the international crony capitalist elite. When you consider the interconnections that tie the whole international system of crony capitalism and American foreign policy together, it starts to make a lot of sense.

Many of these Fortune 500 conglomerates are corporate members of civil society groups such as the Council on Foreign Relations (CFR) and the National Endowment for Democracy (NED). These think tanks are critical toward influencing American foreign policy. Under the guise of democracy promotion, these civil societies fund opposition movements and train dissent groups in countries around the world in the interest of pro-US regime change. With naked insincerity, the same companies that outsource the production of their products to American prisons simultaneously sponsor civil societies that demanded the release of Myanmar’s Aung San Suu Kyi from house arrest – an overly political effort in the on-going attempts to install a compliant regime in that country.

And finally, it should come as no surprise that all the same regulatory problems inherent in a crony capitalist system should be present with respect to the prison-industrial complex as well. Take this example of a state agency being in cahoots with GEO Group, a textbook example of regulatory capture:

The concept of privatizing prisons to reduce expenses comes at great cost to the inmates detained, who are subjected to living in increasingly squalid conditions in jail cells across America. In 2007, the Texas Youth Commission (TYC) was sent to a West Texas juvenile prison run by GEO Group for the purpose of monitoring its quality standards. The monitors sent by the TYC were subsequently fired for failing to report the sordid conditions they witnessed in the facility while they awarded the GEO Group with an overall compliance score of nearly 100%. Independent auditors later visited the facility and discovered that inmates were forced to urinate or defecate in small containers due to a lack of toilets in some of the cells. The independent commission also noted in their list of reported findings that the facility racially segregated prisoners and disciplined Hispanics for speaking Spanish by denying their access to lawyers and medical treatment. It was later discovered that the TYC monitors were employed by the GEO Group.

Let’s take a moment to remember that this horrible system of exploitation is not a product of the free market, but rather a consequence of having a state exist in general. A system of justice based on polycentric law and administered in a non-coercive fashion could never support abuse on such a wide scale.

 

Solutions/Moving Forward

As a libertarian, I believe there must be real free market solutions to the problems caused by the prison-industrial complex. While many people will no doubt be taken in by the idea of prison reform, we have seen that these problems are inherent in a statist system of justice, and no amount of reform can address those underlying problems.

prison download music

Nevertheless, while I have doubts about its ability to cause real change in this area, the mantra “voting with your dollars” can apply here. The Prison Divestment Campaign may help curb some of the excesses of the prison profiteers. It may be worthwhile to support this cause, but changing the fundamental problems will require a different kind of solution.

Short of seeing the realization of a fully anarcho-capitalist society, we can look to some new technologies to help cause a fundamental shift in the system, perhaps even within the next decade or so. Some of the functionality of Bitcoin and the blockchain could revolutionize legal practice, and thus indirectly have a powerful effect on the prison system.

As these technologies evolve and become more widely adopted, a parallel legal system will begin to emerge in competition with our current state monopoly system. Basically, a new Common Law. Here’s an example:

The plain, ordinary Common Law developed as the result of competing courts that issued opinions basically as advertisements of how fair and impartial they were. We could see something similar with Bitcoin arbitration. If arbitrators sign their transactions with links to and a cryptographic hash of a PDF that explains why they ruled as they did, we could see real competition in the articulation of rules. Over time, some of these articulations could come to be widely accepted and form a body of Bitcoin precedent.

This kind of arbitration is perfectly doable using a currently existing Bitcoin feature: multi-signature transactions. This is a feature that doesn’t allow a transaction to be fully processed unless m-of-n people have agreed. Most simply, this could mean that two out of three people involved in a transaction must agree to it for it to become valid. That could mean you and me in a business dealing, with a third party arbitrator if one of us is unhappy with the deal as executed.

Over time and once more widely used, these technologies could practically eliminate the need for lawyers and government courts for dealing with the administration of many types of contracts and disputes. For instance, Blockchain Apparatus just released new software that will take care of the administration of estates and wills in a completely decentralized, trustless, cheap, and quick way. And an ex-Rugby player is working on a smart contracts tool to manage third-party endorsement contracts and take a lot of the headache over contract disputes in sports.

For more details on multi-signature transactions and their legal applications, see this.

For more information on smart contracts in general, see this.

By creating a new legal framework outside of the state system, technology may help us get to a stateless system of justice sooner than many people think. And we will not be able to eliminate the statist (in)justice system until this happens.

 

Conclusion

While libertarians ostensibly support the privatization of government functions, it is more complicated than it sounds in practice. Particularly with regard to prison administration, contracting out these “services” are not what a principled libertarian has in mind. As Bruce Benson explains:

If Hitler had contracted out some of his law enforcement services, the rounding up and extermination of Jews might have been accomplished at a lower per-unit cost and more Jews could have been exterminated, but the fact that more of these politically defined “criminals” could have been exterminated more “efficiently” in a technological sense does not mean that the contracting out of this process would have been desirable. Indeed, if contracting out enhances technological efficiency, as its advocates argue it will, then it may encourage even more intensive law enforcement efforts against victimless crimes, thereby reducing both allocative efficiency and liberty.

Ultimately, the only just system is one based on restitution rather than punishment, and in the context of a purely voluntary society.

photo by:

No, Libertarians Are Not Corporate Shills

intentions vs results

I am often accused of supporting “Reaganomics” or “trickle-down economics” or being “a tool of the corporate elite,” or some other such thing. An implication is that my economic views are conservative, and basically amount to apologetics for the wealthy. Naturally, these ad hominem attacks always come from the “left.”

I think this perspective exists for a few reasons: lack of economic understanding, a conflation of modern capitalism with real free markets, and some psychological traits that would be the subject of another article.

People who view themselves as “progressive” or “left wing” believe that they are rebelling against corporate power and defending the little guy. I believe that most laypeople on the left truly are well-intentioned, and would like to improve the lives of the common man. Unfortunately, the policies that they advocate do precisely the opposite: concentrate wealth upwards.

In this post, I intend to argue that corporate power is just another arm of the state. There is nothing inherently wrong with corporations, but modern capitalism is largely a history of corporations behaving badly. Modern capitalism – NOT the free market – is a system where the power elite are able to extract wealth from the masses and concentrate it into the hands of the few. They do this, not through the extraction of Marx’s “surplus value”, but through creating artificial scarcities and rents through the power of the state.

Put simply, the state is the enforcement mechanism for economic privilege. For those who would like a more economically equal world, it is the state that should be the focus of attention. Leftists who support things like welfare and the minimum wage believe they are helping win some battles on behalf of the working man, but a far better solution would be attack the system of state-enforced economic privilege itself.

Before diving into just some of the ways in which the state is enriching the wealthy, I’d like to quote at length from a recent article by Richard Ebeling:

“Suppose someone were to ask you the easiest and quickest way to drive by car from New York City to San Francisco, California. Since the shortest distance between two points is a straight line, the most reasonable answer would be for this person to take Interstate Highway 80, which runs East-West between these two cities.

Now suppose that this person, instead, starts driving south from New York City on Interstate Highway 95, which would get him, eventually, to Miami, Florida. You tell him that he is on the wrong route; not only will it take him much longer to get to California if he stays on Interstate 95, but he may end up never getting to San Francisco at all.

Rather than thanking you for correcting him and figuring out the best and most time saving way to get back onto Interstate 80, he accuses you of not wanting him to get to California. He wants to know what you have against him and the people of California. Why are you sabotaging his chance to finally find “happiness” in California?

You assure him that you have nothing against either him or California. Indeed, you explain, you’ve even been to California and it’s a very nice place to visit and maybe even to live. You are just pointing out that he is following the wrong route to get to his desired destination, and in that easiest and quickest way as he had originally asked.

He responds by asserting that you clearly have something against him and have some hidden agenda to prevent people from getting to California.

A person saying such things would, to most of us, seem strange or even bizarre. It is, however, the way many critics of the free market respond when an economist or some other proponent of economic liberty explains that government intervention in the market, regulation of business enterprises or redistribution of income and wealth are not the best and most efficient policies to provide an economic and social climate most conducive to opportunity, prosperity and freedom for as many people in society as is possible.

Free market critics frequently assert that the free market advocate “hates the poor,” “doesn’t care for humanity,” is “insensitive to human suffering” and only wants to help “the rich.” And how can we know this? Because he dissents from the governmental interventionist, regulatory and redistributive policies proposed to cure the ills of society.”

Note that, for each of the below foundations of corporate power, there is a lot more that could be said. The intention of this post is to be more of an overview, or introduction, to how the state is the primary driver of corporate power.

 

Monopoly Central Banking

Far and away the largest driver of massive corporations and wealth inequality is the institution of central banking. Indeed, central banking and artificially low interest rates are a major tenet of modern progressive views on monetary policy, despite their professed intention to reduce inequality.

The Federal Reserve creates money from nothing, and those who get to use that money first benefit. The increase in money supply will decrease the value of money, or increase the price of other goods. But this only happens over time as the money moves through the economy. So if the government gets to use this money first – generally to support the military industrial complex, big banks, auto companies, and other favored business interests – they get extra (free) money without having to pay higher prices. Everyone else who gets access to that money later ends up needing to pay higher prices, and is essentially robbed of the value of their savings. This process of prices adjusting in a non-uniform way is called the Cantillon Effect, and is routinely ignored by progressives.

But this isn’t the only way monopoly central banking hurts the poor and enables giant corporations and those who are already wealthy to rake in record profits. The central bank is tasked with setting interest rates, and there is an inherent tendency to keep interest rates low in order to foster investment (and to concentrate wealth). In fact, progressives are very adamant about keeping interest rates low. Just ask, as usual, Paul Krugman. But lowering the interest rate makes savings less attractive and encourages investors to seek higher yields, which pushes up the price of securities, particularly stocks (and housing, and other assets). Of course, it is the wealthy who overwhelming own these assets, and thus they are the beneficiaries of these “progressive” policies. Money printing leads to inflation and lowers the reward for saving, hurting everyone else in the economy who isn’t heavily exposed to these securities.

But central banking doesn’t just make rich individuals richer, it also leads to massive corporate profits, in particular relative to wage rates. As I said earlier, preferred corporations (banks, hedge funds, weapons manufacturers, etc.) are the first recipients of the expanded credit. Let’s say Lockheed Martin is the recipient of an extra $10 million in credit. They use this money to invest in a new weapons plant to expand production. This leads to an immediate increase in $10 million in sales for the construction and other contracting firms who build the plant. But investment expenditure in fixed capital is amortized in cost calculations. If this plant is assumed to depreciate over the course of, say, fifty years, then the only cost on Lockheed’s books this year would be $200,000. In other words, there is a net increase of $9.8 million in profits for these big companies with early access to credit.

Moreover, credit expansion and lower interest rates tend to foster increased capital expenditure for longer term increases in production rather than immediate expenditure on labor. As such, the returns to capital will tend to be higher than that of labor.

There are many other negative effects of monopoly central banking, but I want to restrict this discussion to a very basic overview of how it worsens inequality and improves the corporate bottom line. In this respect, progressives are consistent advocates for the most egregious of economic injustices.

 

Corporate Personhood

In America, there is the legal concept of “corporate personhood,” which means that corporations have many of the same legal rights and responsibilities that an individual would. A major aspect of this is that it allows corporations themselves to sue or be sued – that is, the corporation is considered an entity apart from those individuals who comprise it.

In and of itself, the concept of corporate personhood is not immoral. Corporations, as groups of individuals, should be entitled to the same kinds of freedoms that individuals have. The immorality stems from treating corporations as persons with respect to limited liability. The corporate entity itself is liable for damages they may cause, but the owners or shareholders are not held responsible.

That means that corporate owners can do immoral things without so much regard for the consequences, because they will not be considered personally responsible. This is the main reason a business incorporates itself anyways; why do you think it’s called a limited liability company (LLC)? Ultimately, this allows investors to hire managers who have a legal mandate to pursue profits – but it lets them keep their distance from the way the profits are pursued. This makes a significant difference; imagine how business would change if stockholders knew that they would be liable for the actions of their managers? In other words, if an investment in a company would mean risking the stockholders’ own assets, the way business is done could change radically.

Very few people, anarchist/libertarian or not, would give limited liability to human beings and their direct actions. Most people are aware that having real consequences for your actions helps prevent you from engaging in undesirable or bad actions. Corporate personhood thus subsidizes bad behavior.

In a world where there wasn’t limited liability for shareholders of corporations, the structure of capital would be radically different. That’s not to say that similarly structured organizations couldn’t arise out of a network of legitimate contractual relationships, but I would expect it to be the exception rather than the rule. If shareholders were held individually liable, then buying a share of stock in a company becomes a much more risky and harrowing ordeal. Before doing so, one would want to thoroughly research the company as well as the other shareholders in order to determine how risky such a move might be. Perhaps the free market would supply some kind of insurance for these decisions, thus smoothing over some of those transaction costs. Either way, modern limited liability acts as a subsidy to shareholders by either reducing risk or essentially paying for their insurance policy.

Admittedly, this is an area within libertarian theory of which there is much disagreement. I don’t intend to delve deeply into the debate here. I don’t have enough of a legal background to feel competent in debating this point, to be honest. But my libertarian “intuition” suggests that limited liability is wrong, and it certainly concentrates capital far more than a world without it. For an alternate libertarian take on limited liability, see Stephan Kinsella’s argument here.

 

Intellectual Property And The Patent System

Another way that the state secures undue rents for massive corporations is through the thoroughly mercantilist patent system. Patents grant exclusive monopoly privilege for the practical use of ideas, and impose ridiculously harsh penalties on those who attempt to utilize these ideas on their own terms. In other words, patents create artificial scarcity, and this allows the patent holder to charge higher prices by excluding all competition.

Property is only a meaningful institution in the face of scarcity. We rarely consider it to be “my” oxygen in day to day life. However, when going scuba diving, oxygen is scarce and property relations become relevant again. If I write a book, and somebody else prints it, gives me credit, and makes money from it, there is no scarcity involved. But by getting it copyrighted, I impose scarcity by preventing other people from using their own property in nonviolent ways. I’ve in effect become a partial owner of everyone else’s resources; others no longer have the right to use paper and ink as they see fit. As Murray Rothbard said:

“The man who has not bought a machine and who arrives at the same invention independently, will, on the free market, be perfectly able to use and sell his invention. Patents prevent a man from using his invention even though all the property is his and he has not stolen the invention, either explicitly or implicitly, from the first inventor. Patents, therefore, are grants of exclusive monopoly privilege by the State and are invasions of property rights on the market.”

People often claim that without patents, people will stop innovating. But this is unequivocally false:

“This is borne out by F. M. Scherer’s testimony before the Federal Trade Commission in 1995. Scherer spoke of a survey of 91 companies in which only seven “accorded high significance to patent protection as a factor in their R & D investments.” Most of them described patents as “the least important of considerations.” Most companies considered their chief motivation in R & D decisions to be “the necessity of remaining competitive, the desire for efficient production, and the desire to expand and diversify their sales.” In another study, Scherer found no negative effect on R & D spending as a result of compulsory licensing of patents. A survey of U.S. firms found that 86% of inventions would have been developed without patents. In the case of automobiles, office equipment, rubber products, and textiles, the figure was 100%.”

In fact, the patent system hinders technological development – development which tends to benefit the masses the most. If someone invents something and secures a patent, they lose the incentive to do further research and build upon the now existing body of knowledge. Others can no longer incrementally add to or improve upon this invention, simply by decree. And because of this state-enforced monopoly, the inventor no longer needs to fear competitors doing exactly this – improving the invention. The end result, then, is stagnation.

carlin hats

More importantly to the issue at hand, the patent system concentrates economic power into huge multinational corporations. Simply put, giant corporations scoop up as many patents as they can, not for the sake of innovation, but to exclude competition and protect monopoly profits. Sometimes, a couple of huge firms will come together with a patent “pooling” agreement, which improves their combined market share at the expense of the smaller players in their industry. Cartels like this actually do succeed – unlike purely private cartels, which are inherently unstable – because they are based on privilege that is granted by the state, and backed up with very high penalties. In fact, it is often the case that corporations will get patents not so that they can use the technology, but specifically to prevent others from using it. Look at oil companies and alternative energy patents.

In addition, hiring patent lawyers and the entire process of procuring and defending patents is expensive, and thus far more prohibitive for small businesses and inventors than massive corporations with their hordes of lawyers and significant R&D budgets. Individuals who create new products and get them patented may be inclined to sell those patents to larger firms, due to the uncertainty of being able to defend it. And the employees who actually do the inventing as part of the R&D departments for large corporations are usually required to sign over the patent rights as a condition of employment. In other words, there is a strong tendency that leads away from innovation and towards centralization of corporate power because of the patent system.

Compounding the immorality of the whole patent arrangement is government funding of research. All sorts of grants are given out to companies in order to research some new development (oftentimes military-related), and these companies then get to charge state-enforced monopoly prices for the product of this research, despite having not invested in the research themselves. Essentially, taxpayers end up footing the bill for themselves to be exploited by major corporations – courtesy of state intervention.

Furthermore, international patent regimes are critical for making sure that transnational corporations maintain their monopoly power. This was the major effect of GATT – to lock in a Western monopoly on modern technologies and to ensure that there can never be meaningful competition from the Third World.

 

Subsidizing Infrastructure And Socializing Costs

An often overlooked area in which the state subsidizes massive corporations is through providing infrastructure. It does this primarily by funding major transportation systems, cheap fossil fuels, and providing security. This is a fact that I’ve found is routinely ignored by most on the left, with the exception of Noam Chomsky. But then, he is an anarchist too….

Anyways, it is important to remember than any time the government spends money, this money was originally expropriated from the taxpayers. So it is not government that ultimately pays for roads, bridges, and so on. It is you and me. These services are not provided for free.

Let’s start by considering transportation. While historically, private entrepreneurs have been responsible for creating and improving roads, the US government has largely taken over that function. And not just roads – just about every major piece of transportation infrastructure in the US has been created or significantly subsidized by government. Some examples:

  • The Interstate Highway System
  • Civil aviation infrastructure
  • Railroad land grants back in the late 19th century, where government provided free or significantly below-cost land to railroad producers

Government builds roads?

Again, this was all done using money stolen from the people, and often through the forced theft of land via eminent domain. In other words, all this infrastructure was funded, and all the sacrifice that went into building it, was provided for by average folk. Naturally, the corporations tasked with building this infrastructure were immediate winners. But a more subtle and insidious consequence was in how this changed the fundamental structure of production.

In short, the cost of transportation was socialized, which nearly eliminated the incentive for people to produce and consume locally. Local industry suffers at the expense of larger, more distant corporations, which were able to take advantage of economies of scale that could not possibly have existed on the free market. Clearly, Walmart and other giant corporations that liberals seem to hate on so much could never have come to exist without this government appropriation of resources and infrastructure subsidies. Without this absurd subsidy, giant conglomerates could never compete with smaller, local manufacturing. Not only that, but problems like suburban sprawl and pollution from our cars wouldn’t be happening on nearly the same scale; communities would be more locally organized, and towns and cities would be built with bike and foot transportation in mind.

If you want to learn more about the sordid history of transportation subsidies, you can do no better than reading Kevin Carson.

In tandem with socializing the costs of transportation, the state has helped subsidize the cost of energy, also required for the mass distribution models that many major corporations depend on. It has done this largely via eminent domain, seizing land in which to build pipelines for moving energy cheaply and quickly. Perhaps even more importantly, the taxpayer-funded US Navy guards sea lanes so that oil can be transported far more cheaply.

In fact, the government’s funding of security in general is a massive subsidy to large corporations. Larger organizations with more assets will naturally have higher insurance costs and would need to spend more money on police/security. But the taxpayers have that (largely) taken care of. I’m not going to dive into what a world of purely privatized security might look like here, but it is clear none the less that security is essentially a corporate subsidy.

 

Regulations

Regulations, practically a buzzword among the progressive community, are one of the primary means by which large corporations benefit through the use of the state apparatus. It boggles the mind how liberals don’t seem to get this (except, again, for Chomsky, who then goes on and suggests more regulations for some reason…), despite it being a primary aspect of the “progressive era.”

In the words of Rothbard, describing public-private partnerships:

“We often fail to realize that the point of Big Government is precisely to set up such ‘partnerships,’ for the benefit of both government and business, or rather, of certain business firms and groups that happen to be in political favor.”

The left tends to think that somehow big business and big government are at odds. But throughout history, every expansion in government is funded and supported by some segment of big business. This is because larger, established firms always have an interest in crushing smaller, upstart competitors. Under a free market system, market share is never secure. But regulations create barriers to entry, which reduces that competition and leads to an increase in the size and relative power of the large, entrenched interests. Sure, they need to pay the costs that come with the regulations, but they can afford to do so much more easily than smaller competitors – and as yet nonexistent potential competitors. Bastiat’s “unseen,” for those who know what I’m talking about.

You can see this at every level of government. The most obvious contemporary example at a local level is how taxi cartels are desperately trying to hold on to market share by lobbying their cities to ban Uber. Similarly, professional licensing requirements turn certain professions practically into guilds; the restricted supply of doctors significantly increases the cost of health care, for instance, but vastly increases their salaries. There are a gazillion more examples I could provide.

But it is also (and especially) true at the highest levels of government and industry. Take the pharmaceutical industry, for example. The FDA regulates which drugs are allowed to be sold in the US, and requires expensive testing and a lengthy, multi-year process before a drug can go to market. Existing pharmaceutical companies, while they don’t like to pay for these tests, can certainly afford to do so. But smaller firms generally can’t take the risk. They may need to invest hundreds of thousands of dollars and several years’ effort, and still get their drug rejected. Most won’t even try. (I’ve recently written about a related subject: pharmaceutical companies lobbying for more regulations on dietary supplements.) That’s how you end up with Big Pharma.

Competition is the bane of big business. Laws such as the Federal Trade Commission Act’s “unfair competition” provisions made illegal things like “predatory pricing,” price wars, and “dumping.” Normally, it is difficult for oligopolies to form, because there is a strong incentive to cheat and undercut your competitors, seizing more market share. But this law prohibited selling goods for less than production costs, and thus made it possible for more stable oligopolies to form.

The incentives are clearly there for big business to use the state to enforce monopoly or oligopoly upon their industry and extract unwarranted profits. But there are a couple of further problems with the big business-big government relationship.

Regulatory capture, when the powerful business interests whom the government is supposed to be regulating end up seizing control of these regulations, is ridiculously common. How does this work?

“The basic logic behind the capture theory of regulation is that while the general public is largely ignorant of the regulator’s activities, those in the regulated industries are well-informed, and pressure regulators for favorable regulation. Furthermore, information about regulated industries is largely under the control of those in the industry, and personal connections between regulators and the regulated also influence regulatory outcomes. The result is that regulatory agencies act as agents for those they regulate, not the general public.”

Since this is just an overview, I will not delve into the details and the many, many, MANY examples of this. The most blatant recent example was brought to our attention by whistleblower Carmen Segarra, who secretly recorded tapes showing that Goldman Sachs got to ignore the regulations that they were supposed to abide by. And you can be sure that smaller companies would never have gotten away with this kind of thing.

Obamacare

 

 

And then there is the revolving door between big business and government. Again, I cannot possibly give this subject the treatment that it deserves here. But put simply, those who work in government, often in regulatory agencies, hope to one day make significantly more money working in private industry. As such, they will do a lax job with their regulations because of this. Conversely, some big companies will pay out large bonuses to their executives to take positions in government. It’s not hard to guess why. Here you can see a series of Venn diagrams demonstrating the revolving door between top member of government and various industries. Ken Silverstein at The Intercept has a great take on this, and a perfect example:

“After he went to prison for bribing public officials, lobbyist Jack Abramoff claimed in his memoir, Capitol Punishment, that he controlled around 100 members of Congress. In addition to offering them and their staff free meals at his high-end restaurant, Signatures, Abramoff handed out luxury box tickets to sporting events and junkets to the world’s most exclusive golf destinations. But his most effective tactic was simply to float the suggestion to congressional staffers that he’d hire them when they left the Hill. Abramoff would then effectively “own” the staffer, who would perhaps even unconsciously start making decisions that benefited his future employer. “His paycheck may have been signed by the Congress, but he was already working for me, influencing his office for my clients’ best interests,” Abramoff wrote. “It was a perfect–and perfectly corrupt–arrangement.”

In this environment it’s misleading to use the term “revolving door,” because that falsely suggests that there are sharp lines separating corporate America, government and the influence peddling complex.”

For more on the history of the cozy relationship between big business and the state in terms of regulations, see this and this.

 

Corporate Subsidies

Finally, we come to the most direct and obvious way that the state is used to plunder the people for the benefit of large corporations: corporate subsidies. The US Federal government spends $100 billion per year on direct corporate subsidies. This is one where where I think, thankfully, libertarians and progressives can agree that the state should be rolled back. Since there are so many ways in which subsidies are snuck into government budgets, I can only provide a handful of examples here.

  • Much of the military-industrial complex amounts to a corporate subsidy. Never mind the fact that the industry itself would be just a fraction of its current size if it weren’t for the state in general. There are specific aspects that count as corporate subsidy: namely, foreign military aid. Every year, the US gives billions of dollars to foreign countries so that they can use that money in order to buy weapons from US manufacturers.
  • The massive government bailouts in 2008 were a corporate subsidy (and unfortunately, one that the left tended to support, based on the fallacious idea of “creating jobs”). This includes hundreds of billions of dollars going to giant entities such as Bear Stearns, AIG, Fannie Mae, and Freddie Mac. And then the TARP bailed out all of Wall Street, and later General Motors and Chrysler. I can assure you, the little guy will never be “too big to fail.”
  • Federal land is often leased out to billionaires and large corporations, who have no incentive to treat the land responsibly due to a lack of private property rights. This includes things like leasing land for grazing, logging, and drilling for oil. These companies need not be concerned for the environment, because their contracts run out within a couple years – might as well suck the land dry of as many profitable resources as possible! A far better solution for the environment would be for conservation organizations to buy up swaths of land that they want to protect and then not sell it to these corporations. Duh.
  • Big Agriculture is the recipient of massive corporate subsidies in the Farm Bill that gets passed every couple years. The largest part of these bills is generally food assistance, and particularly the SNAP (food stamps) portion, which one could easily argue is just another corporate subsidy. What do you think these food stamps are spent on? (Note that my argument here isn’t “poor people should stop buying food,” but rather that centralized farming and food processing operations are primary beneficiaries of the program.)
  • The Export-Import Bank provides loans to foreign countries so that they can purchase American-made goods. This is a major corporate subsidy, but the primary benefactor is a single giant corporation: Boeing. The Ex-Im Bank spent $20.5 billion dollars of taxpayer money in fiscal year 2014, 40% of which ended up going back to Boeing. And in a typical case of regulatory capture, the Ex-Im Bank reached out to Boeing to seek their approval on regulatory rules they were writing.

Need I go on?

 

Conclusion

libertarian word

The above is just an overview of the many ways in which corporations and the wealthy elite are made even more rich through the state apparatus. There are a million more assorted ways the state protects unnaturally big business, such as creating a student loan bubble that forces many into debt slavery, and military interventions abroad at the behest of major corporations (such as United Fruit Company in 1950s Guatemala and Halliburton in Iraq).

The fact is, without the enforcement arm of the state, the economic structure of production would be wildly different, perhaps even unrecognizable. Progressives tend to conflate the libertarian defense of free markets with a defense of the status quo, but nothing could be further from the truth. Unfortunately, some of the responsibility for this fallacy does lie within libertarians ourselves; our temporary alliance with the “right” has likely rubbed off on us in certain ways, and we do not present ourselves as honestly as we should. And then there are the beltway libertarians, who really are more like conservatives. Nevertheless, the libertarian tradition is fundamentally radical – 19th century individualist-anarchist Benjamin Tucker even called himself a socialist and belonged to the First International! Perhaps it is time we libertarians get back to our more radical roots.

I believe that there are many on the left who fundamentally want something similar to what we libertarians want: an immediate end to the privilege and entitlement of elite members of society at the expense of the rest of us.

Case Study In Media Deception: Dietary Supplement Regulation

Dietary supplements

One of my pet interests is in nutrition, health, personal development, and the like (I’ve actually been blogging about this stuff for three years now over here). A subsection of that interest is in nutritional supplements, which I know far too much about. Some of my friends consider me like a pharmacist of sorts.

My dad, familiar with my interests, sent me this article on Yahoo about how GNC will be making changes to their quality control procedures. Here’s the gist of it:

Earlier this year, the New York State attorney general’s office accused GNC, Target, Walmart and Walgreens of selling fraudulent herbal supplements, devoid of the ingredients touted on the label and containing potentially harmful contaminants. Now, at least one of the retailers is responding by tightening up their quality control.

Today, GNC will announce that it will be implementing major new testing procedures to make sure its supplements far exceed the standards currently set by the federal government.

“This should be a standard across the entire industry,” Dr. Pieter Cohen, a professor who studies supplements at Harvard Medical School, tells the New York Times. “Today we finally have one first step taken by one retailer, and only after the very aggressive intervention by the New York attorney general’s office.”

In the past, I’ve discussed how the media is used to promote memes that the elite want spread, and this is a perfect demonstration of the principle. Supplements are regulated more like the way food is regulated in America, as opposed to the far more heavily regulated pharmaceutical industry. As such, dietary supplements are vastly cheaper – and Americans are using them in huge numbers. In 2012, the industry took home $32 billion in revenue, and this is projected to increase to $60 billion by 2021.

It is quite clear that the intention of this article is to promote the idea of further regulation of dietary supplements. Feel free to read the article yourself, but the excerpt above is obviously an attempt to make a connection between supplements being unsafe and the government needing to step in to address this. A casual reader of the article will immediately make that connection in their mind: “Uh oh, I take dietary supplements [nearly 70% of Americans do]. I don’t want them to be unsafe – there ought to be a law!”

But the connection is entirely spurious, as one heavily propagandistic statement in the middle of the article should make clear:

Supplements are required to state the name and amount of each and every ingredient they contain — but this practice is more of an “honor code,”and not always abided by.

Supplements are currently regulated under the Dietary Supplement Health and Education Act of 1994 (DSHEA). Under this law, supplements are in fact required to state the name of every ingredient they contain and the total quantity of ingredients. This is the law. The only reason why the article would say it is “more of an honor code” is to mislead; technically, all laws go by the “honor code” in the sense mentioned here – that they are sometimes broken. Nobody would claim that laws against murder go by the “honor code.” If you murder someone and are caught, the force of the law comes down upon you. Just like for every law.

The article is arguing that because supplement companies have committed fraud, they need tighter regulations. But fraud is already illegal, and there is already a procedure in place for this. From the FDA website linked to above:

FDA is responsible for taking action against any adulterated or misbranded dietary supplement product after it reaches the market.

In other words, current regulations already prohibit fraud. The current regulations have failed to protect consumers, despite their intent.

I am not trying to dispute here that there are problems within the supplement industry. Fraud may very well be rampant, as the article claims. In that case, the fraudsters ought to be punished, and those who were victimized ought to be made whole again.

In addition to fraud, many supplements make bold claims about their potential health benefits, even if there isn’t much credible science to back it up. But it is the responsibility of consumers to separate the good from the bad. No one is coerced into purchasing these supplements. It is easy to do research on these things. Personally, I suggest checking examine.com to find quality scientific research on supplements for free. And by and large, dietary supplements are quite safe (but you should ALWAYS do your own research beforehand).

But I digress. The main point I want to get across in this post is that the media is used as a means of establishing trends on behalf of the elite. Who is it that stands to benefit most from promoting the meme that dietary supplements require stronger regulations? Answer: the pharmaceutical companies, of course!

Dietary supplements are viewed by many Americans as a cheaper alternative to expensive pharmaceuticals. But if they were more heavily regulated, the cost of supplements would skyrocket, and people would no longer have access to cheap substitutes. So that is the first point: eliminating competition. Complying with regulations is expensive, and this makes it vastly more difficult for upstart companies to get a foothold in the industry.

Perhaps even more important is the fact that much of the supplement industry is already owned by the big pharmaceutical companies! In an article on Al Jazeera arguing in favor of supplement regulation, this is confirmed:

Supplement promoters sell themselves as an alternative to big pharma, but giant pharmaceutical firms actually own the bulk of the industry. Pfizer owns Centrum, Bayer owns One a Day, and Procter & Gamble owns supplement maker New Chapter. Even Wall Street is getting in on the action. The Carlyle Group, a private-equity giant, owns NBTY (formerly Nature’s Bounty), and hedge funds are trading on industry players like the Vitamin Shoppe, betting that health-conscious baby boomers and other promising demographics will keep buying.

A 2009 article on Fox News corroborates this:

There are hundreds of small firms, including niche players with only a few products. But they account for a slim slice of total sales, industry experts say.

The Pharma giant Wyeth, for example, makes Centrum and other supplements, and Bayer HealthCare of aspirin fame makes the One A Day line. Unilever, Novartis, GlaxoSmithKline and other big pharmaceutical firms also make or sell supplements.

Not only will dietary supplement regulation squeeze out the smaller players in the market, but it will allow the pharmaceutical companies to sell their own supplements for oligopoly prices. And since these giant companies already have the majority share in these sales, you can expect that they will be by far the biggest winners if any new supplement regulations are signed into law.

This whole idea is most surely a promotion by the pharmaceutical industry, which has a massive lobby. In the 2014 election cycle, the industry spent nearly $14.8 million, according to the Center for Responsive Politics. And in the combined election cycles between 1990 and 2014, they spent over $163 million. Contrast this with the lobbying for the nutritional supplement industry. In 2014, they spent just over $1 million. And since 1990, they have spent a paltry $15.3 million.

And pharmaceutical companies are known to be aggressive marketers. In particular, they are shifting to a more heavy online advertising presence, as you can see in the graph.

pharmaceutical-advertising-spending

If my powers of deduction and knowledge of how the world works are correct, you can expect to see many more articles published in major online news sources calling for increased regulation of the dietary supplement industry.

Crony capitalism at its finest!

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