Dank Federalism

With the winter chill pestering my Old Virginia home, family swimming excursions are enjoyed at the local rec center. Obliged by my aversion for idle conversation with strangers, I look to heavy tomes to deter the other parents (if not as a signal, then as a melee weapon as a matter of final resort). One of the more imposing volumes in my library is a hardcover translation of Tocqueville, so I've been revisiting Democracy in America while my 4 year old practices the ancient art of annoying other adults.

Something struck me in DiA's dissection of American culture. Federalism, separated hierarchical government, seemed to him to be more than a mere political choice, selected from a suite of otherwise-mostly-equal options. In a rather Humean fashion, he claimed that the town-state-nation organization of politics arose from the very sentiments of the typical Yankee ploughman. Think of it as Tiebout-plus. Rather than residents moving to new towns that better suit their peccadilloes, American residents use American little-d democracy to move town policies to suit them. He didn't say so, but there's pretty good English countryside precedent for this predilection. Peasants settled their own disputes in common law courts rather than petitioning the crown or some local lord. The American colonialists were basically just peasants with a little more self-determination.

The point is, the heuristics of the people determined the form of the organizational structures that were later codified in the national, state, and local constitutions, laws, and codes. Sentiments preceded rules. If this is true, I must wonder what sentiments preceded the slow abolition of local self-determination. What moral intuition explains the gradual loss of town and state sovereignty?

I'm in the habit of thinking of politics as being simply another form of exchange (albeit with a bit more coercion). If I am to cling to this habit, perhaps I should consider taking more seriously the sources of political tastes and how malleable they might be. Sometimes, the bargaining set is null, no matter how well you haggle. What happens when a nation develops irreconcilable differences?

Standard Contract Renegotiation: Marriage Edition

There is no de jure default prenuptial contract in the United States. But there is indeed a de facto contract. One with terms and agreements that get awfully onerous the deeper you get into the fine print. Mind you, I don't mean that the terms of a rancorous separation are considerably onerous on men. That a largely common-law court lags rapid social change (in this case, the enormous influx of women into the formal workforce) should surprise no one. No, what I mean is that becoming mired in a family court dispute is dead-wasteful. Every hearing, every plea, every supplication to the bench carries the opportunity cost of missed wages, missed picnics in the park, missed life. And this is in addition to all the explicit court and attorney fees. Divorce is big business.

Much like the taxi cartels of the land, family courts ought to be vulnerable to disruption by nimble, low-overhead competition. Apologies for dragging out a worn meme, but where's the Uber, but for the dissolution of marriage? A standardized, opt-out pre-nup a la Thaler/Sunstein seems like it should be a slam-dunk. What's not to love about freeing up courthouse resources and liberating people during a difficult period of transition?

Some possibilities:

1. Prospect Theory. Newlyweds overestimate the bliss they'll obtain from a lifetime of marriage and underestimate the costs and deadweight losses of divorce. They also overestimate the probability their marriage will survive.
2. Defection. Courts are predisposed to honor prenuptial agreements, but widespread adoption of new default prenup terms is out-of-sample. I don't know how likely it would actually be for courts to declare such agreements invalid, but such risks should make potential customers think twice.
3. Signaling. The dreadful inefficiency of the present system serves a purpose not all that different from an engagement ring: I am exposing myself to this excruciating downside risk; see how serious I am over here, pumpkin? If this is an important enough signal, any efficiency gains from a standardized pre-nup should be captured elsewhere. Instead of 2 months' salary for a polished stone, maybe it's 6. TANSTAAFL.
4. Transitional gains. Perhaps there truly is a preferable equilibrium that doesn't rely on an albatross in a black smock and powdered wig. But if it's a stag hunt game, being the oddball who solicits this new product signals unacceptable nonconformity. Given the preposterous peacockery of the modern Western wedding ceremony, there is at least some evidence that fear of violating the expectations of tying the knot can produce wasteful behavior.
5. Inertia. Mom and dad didn't get a pre-nup. Neither are we. It ain't in the heuristic toolkit.

In the grip of my periodic melancholy, I fancy that point #1 up there is the only thing preserving the institution of marriage for the median American. If folks were perhaps a bit more rational, they might reconsider how strong their instincts for regret aversion should be.

Gordon Tullock's famous advice for transitional gains traps is: "don't set any." In this case, one wasn't set. It just sort of crept up. How to break an emergent state monopoly? Tough question.

Sweet Green Icing

Kids, remember not to leave your cake out in the rain. And by "cake" I mean berries growing on bushes in Maryland county and municipal parks. You might just earn yourself a $50 fine.

ATSRTWT

Foraging seems like it should be euvoluntary. I can understand using fines and punishments to protect something like a community garden, where people have mixed their labor with the natural endowments of the earth, thereby asserting property rights over the produce. But naturally-occurring berries and mushrooms and the like aren't owned.

Of course, some sorts of forage can be destructive. When I lived in the Ashford/Mt Rainier area of Washington, it wasn't uncommon in the early summer months to see folks out with big ol' baskets by the side of the road a-pickin' and a-packin' the sundry bounty of the evergreen forests of the Emerald State. Most of what they were after were ingredients that were common in their home countries but which are largely unavailable for purchase in US supermarkets. Things like fern fronds, exotic varieties of mushroom, roots, and young leaves seemed to be their primary quarry. This sort of forage can destroy patches of the ecosystem thanks to the logic of an unregulated commons. Maryland legislators, perhaps wary of disastrous outcomes, passed appropriate legislation and hey-presto! Problem solved, right?

Of course, cops are trained to fight crime, not to interpret the nuance of legislative intent. The purpose of plant protection law is to protect plants, not to harass someone harmlessly collecting a handful of berries.

Of course, it could be worse. A half a c-note fine is petty compared to a guy my wife knew in Washington who got deported (to Korea, iirc) for exceeding a razor clam harvest limit. Deported.

Apologies to Nathan Burney, but the power of the state is a big ol' dumb hammer. Be very careful what you swing it at.

Obligatory:

The Switching Costs of Petty Tyranny Avoidance

Via Nick the G & Paolo The Wifehunter, a purulent little saga of petit neighborhood despotism. The short version: family puts up a playground for the kids. Playground is purple, so as to match the hue of the autumn foliage. HOA declares it an eyesore, threatens family with jail time (seriously?).

OK, by now all good libertarians are readying a logical and somewhat-convincing response to the Stout's troubles: You can just move. You agreed to live under the authoritah of the HOA when you moved into the neighborhood. So shaddup already.

There's more than a little truth to all that, but as Ekdahl wrote on Twitter in response to just that sort of response, "The 'rules' in this case are very vague and don't justify jail time." Things get even cloudier given that the Stouts apparently successfully appealed fines related to the construction of the swingset.

What would Coase say?

I suspect he wouldn't say "shaddup already." I suspect he'd acknowledge that part of the tacit package of rights when you buy into the governance of an HOA includes not being niggled and harassed by two-bit tinpot bullies who would be a caricature even in Kafka at his most Kafkaesque. I agree with the standard economic view that you can put a price premium (discount) on just about anything, including exceptionally nosy neighbors, I also agree that the many emanations and penumbras of too much discretion in the hands of uptight HOA directors is, effectively if not legally, an uncompensated takings.

And seriously, jail time? Are they even for real with that crap? It's a good thing our actual elected officials in the many legislatures of the land have better sense than to misuse the criminal code do flagrantly. Right?

Purple playgrounds: super non-euvoluntary, you guys. Totes magotes.

Ph'nglui mglw'nafh Tacky Swingset R'lyeh wgah'nagl fhtagn

Not-So-Private Idaho

Federal courts ruled that an Idaho statute barring, inter alia, surreptitious filming of livestock treatment is unconstitutional. EV here. Some of the language of the statute is hairshirt nonsense, making criminal trespass and fraud extra-super-triple-secret-illegal, but that's what you get when you write a statute obviously targeting specific activity. In this case, the specific activity is the infiltration of commercial farms by animal rights activists.

I like to think of these sorts of stealthy activist espionage operations as a way of bolstering informed consent. When I visit my in-laws on their little Lithuanian farm (or my buddies Travis and Jen on their little NH farm), I know exactly what conditions my dinner was raised under: by taking a peek outside. My moral aversions are easily and cheaply addressed with a quick inspection. Ditto for slaughtering. If I saw the hatchet fall on the chicken's neck, I needn't fret that it suffered unduly during its last moments. Supermarket meat is a cipher. All I know when I purchase flesh at the store is what the sell-by date is (and even that might be questionable). I can't even accurately judge the quality of the meat by color or turgidity, what with all the dyes and brine processors can get away with adding. PETA operatives filming abattoir floors replaces whatever flights of fancy I might have had about modern animal husbandry with a [carefully edited for maximum outrage] version of the bloody reality. I can eat my hamburger with more accurate information, helping to internalize what were previously external moral costs. On the margin, this might make meat consumption more euvoluntary.

I think that an interesting, related concern is what role autonomous drones will have in the conflict between commercial farmers (well, slaughterhouses more than farmers, most of the time) and animal rights organizations. Typically, to get the objectionable footage, activists would have to commit some sort of criminal trespass or fraud to gain entry to the grounds. What if you could just send a fleet of quadrocopters with decent cameras attached to get your alarming footage? Technology overcomes legislation yet again?

Maybe we'll get lucky and vat-grown animal protein will exceed the quality of its hoof-raised rival before that becomes much of an issue. I'm eager to find out. I can't wait to taste my first lab-burger.

A Song of Fire and Rope

Madison's jurisprudence is dead. Long live Madison's jurisprudence.

This document was evidently filed three days ago in the Atlanta US District Court.

As They Say, Do Please Read The Whole Thing, From Start To Finish; You Won't Regret It.

Or idk, maybe you will regret it. Still, it's better to regret something you have read than to regret something you haven't read.

Federal income taxes would be a lot more euvoluntary if they paid for things most Americans wanted. Judging my work with polling data, most Americans haven't the first idea what their tax dollars fund. It's tough to say whether or not you're getting your money's worth if you don't even know what you're buying.

But this kind of response? Yikes, people.

Heraclitus v. California

Via the Kenwhite, a couple-years-old piece by M-Ben on using existing obscenity standards to prosecute "revenge porn." Slap on your old checkered polyester bell-bottomed dungarees and travel back with me to the lurid days of 1973, deep in the ass-end of Nixon's domestic and foreign travails.

U.S. Supreme Court

Miller v. California, 413 U.S. 15 (1973)

Miller v. California

No. 70-73

Argued January 18-19, 1972

Reargued November 7, 1972

Decided June 21, 1973

413 U.S. 15

Witness, gentlefolk, the mewling birth-cries of the so-called Miller Test. Obscenity has been unprotected since at least Roth v. US (1957). The underlying statute here is 18 USC§ 1461 - Mailing obscene or crime-inciting matter. Here's the full text of the statute (I think it's current, but IANAL, so consult an actual attorney if you plan to violate any of the following):

Every obscene, lewd, lascivious, indecent, filthy or vile article, matter, thing, device, or substance; and—

Every article or thing designed, adapted, or intended for producing abortion, or for any indecent or immoral use; and

Every article, instrument, substance, drug, medicine, or thing which is advertised or described in a manner calculated to lead another to use or apply it for producing abortion, or for any indecent or immoral purpose; and

Every written or printed card, letter, circular, book, pamphlet, advertisement, or notice of any kind giving information, directly or indirectly, where, or how, or from whom, or by what means any of such mentioned matters,

articles, or things may be obtained or made, or where or by whom any act or operation of any kind for the procuring or producing of abortion will be done or performed, or how or by what means abortion may be produced, whether sealed or unsealed; and

Every paper, writing, advertisement, or representation that any article, instrument, substance, drug, medicine, or thing may, or can, be used or applied for producing abortion, or for any indecent or immoral purpose; and

Every description calculated to induce or incite a person to so use or apply any such article, instrument, substance, drug, medicine, or thing—

Is declared to be nonmailable matter and shall not be conveyed in the mails or delivered from any post office or by any letter carrier.

Whoever knowingly uses the mails for the mailing, carriage in the mails, or delivery of anything declared by this section or section 3001 (e) of title 39 to be nonmailable, or knowingly causes to be delivered by mail according to the direction thereon, or at the place at which it is directed to be delivered by the person to whom it is addressed, or knowingly takes any such thing from the mails for the purpose of circulating or disposing thereof, or of aiding in the circulation or disposition thereof, shall be fined under this title or imprisoned not more than five years, or both, for the first such offense, and shall be fined under this title or imprisoned not more than ten years, or both, for each such offense thereafter.

The term “indecent”, as used in this section includes matter of a character tending to incite arson, murder, or assassination.

It's the first little bit here of interest to the topic at hand, but it's worth noting the remainder of the statute for its specificity. You can't use the post office to send useful information about abortion, nor anything that might tend to incite arson, murder, or assassination. Of great interest indeed to anyone who claims that we might need to "BTFSTTG" or something.

At any rate, the Miller case cleared up, or at least attempted to clear up some fuzziness left over from Roth. Here's the test to determine whether or not a piece of work is "obscene":

(a) whether "the average person, applying contemporary community standards" would find that the work, taken as a whole, appeals to the prurient interest,
(b) whether the work depicts or describes, in a patently offensive way, sexual conduct specifically defined by the applicable state law, and
(c) whether the work, taken as a whole, lacks serious literary, artistic, political, or scientific value.

At least at the University of Michigan, the popular Hollywood film "American Sniper" failed the local Miller test. The tender community standards on campus were so easily bruised that school officials decided, I swear to God Above I am not making this up, to run a big screen adaptation of old-timey British children's fare Paddington instead. Well, at least it fails to meet one of the three AND criteria. In a court challenge, it'd pass the "serious literary" test easily enough.

Revenge porn wouldn't. It wouldn't pass the second criterion either. It's patently offensive to share footage of sexual acts without the consent of all parties. I don't want to put words in Mark's mouth (and please sound off in the comments if I'm off base, good sir), but I think he prefers using something like the Miller test over the rubbish revenge porn statutes proposed (and passed!) in several states is that it a) preserves existing 1A jurisprudence, b) won't result in Pyrrhic SCOTUS challenges to clearly unconstitutional state statutes, and c) ought to be reasonably clear to citizens and jurors alike.

On these points I agree. The anti-revenge-porn Valkyries busy shrieking down from Valhalla to deliver model statutes to the battlefields of the two-and-a-half score state legislatures propose language that would torch not only well-established, robust 1A protections but would make criminal virtually every parent to ever walk the earth bearing a camera. Where I disagree with Mark is that the Miller test is bullshit. And it's bullshit because Heraclitus.

Campus sentiment is an imperfect bellwether for future public sentiment, but it's about the best we've got. And if the shrinking violets on the many college campuses of America are any suggestion, even slight deviations from the modern secular orthodoxy will fail to meet the "whether 'the average person, applying contemporary community standards' would find that the work, taken as a whole, appeals to the prurient interest" test. Here, "contemporary" is the problem. Overly-sensitive Gertrudes who need their fur stroked incessantly will almost certainly find in favor of punishing, say, yoga pants supermarket creep shots. Sure, such things may be in bad taste, but I fret about allowing myopic, excessively sensitive community standards decide what is and is not obscene, given the highly heterogeneous and rapidly-changing nature of community standards. If Chesterton's fences were all intact, I'd say go for it. But they aren't, so I urge greater caution.

So what would I propose in lieu of Bennett's statute? Nothing. I have to agree with Ken that it's the best I've seen. The problem, so they say, lies in the stars. We have met the enemy and he is us. The great task is to reconsider whether or not the large project of re-ordering society on incoherent, mutually-contradictory principles is ultimately wise. Revenge porn is a symptom, not a larger ailment.

The law is not euvoluntary, but not as not euvoluntary as recklessly knocking over Chesterton's fences all willy-nilly.

God Bless Texas, A State With Whom Thou Shall Not Mess

Courtesy of Randy Andy G, a heartwarming tale of a Texas judge with the courage to take a stand against the dominion of the state.

ATSRTWT

Short story even shorter: honor student keeps up with her AP work, gets straight As, is in the running for graduating at the top of her class, but misses more than the maximum ten days' unexcused absence thanks to the demands of working two jobs to help feed her family and ends up truant. Judge Lanny Moriarty (can't wait till Ryan North hears of this) throws her in the slammer overnight to teach her a lesson in practical civics.

Some possibilities:

1. Diane Tran is a genuine menace to the order and safety of Texas educational institutions and must be jailed to help ensure the domestic tranquility.
2. Judge Moriarty (seriously, I can't get over that ha ha) is a thug in a black robe who likes to pick on little kids. He's nicely insulated from his bullying thanks to the unwarranted reputation of the juvenile courts as society's fount of celerious wisdom and swift justice.
3. Judge Moriarty (oh God, my sides. I think I'm gonna be sick over here you guys) rightly recognizes that the law as she is written is an ass in desperate need of kicking.
4. It was an honest mistake. "Oops, sorry guys. I got this honor student mixed up with the local crank kingpin. My bad."

If I'm reading the quotes from the news articles right, and if the hermeneutical interpretation of the editorial choice to run the story is on point, interpretation #2 is what most folks reach for. But consider the possibility that #3 is really what's going on. Despite cockamamie stereotypes, judges, even podunk Texas judges (Houston is not podunk, btw) are no fools. Sitting judges with good consciences can expose febrile imbecility in the legislative code simply by enforcing statutes exactly as written.

It's bad enough that the US has such widespread provision of primary education. It's far worse that legislatures so sanguinely seek to bedevil, torment, niggle, beleaguer and harass educators and parents with tittling patchwork legislation passed to indulge clamorous constituents. Sometimes it takes the courage of a judge to hike up his big girl panties, point to a draconian criminal code and holler "look upon thy works and weep, ye impenitant." Consider the possibility that that's exactly what Judge (snicker) Moriarty has done with young Ms. Tran.

Perhaps the public outcry against this bovine injustice will urge voters to storm the legislature and demand repeal of asinine truancy codes. I won't hold out much hope that they'll attack the source of the problem rather than just one petty symptom though. I'm an optimist, but not that much of an optimist.

Constituents trade the use of force in society with the state that we might live harmoniously. Sometimes it takes a special sort of person to take a highlighter to the fine print in the contract governing this exchange. This dismal task is why everyone hates lawyers and economists. 

Yes, I totally made up the word "celerious." Well, not totally as in totally totally. It's from the Latin for "fast." We get the word "celerity" (and maybe "celebrity?") from the same root. I wanted an adjective though, so there you have it. If you must employ it, employ it responsibly.

Uber, but for Police Harassment

It's a bad day to be gullible on the Internet, so accept the possibility that this is a finely scripted prank.

Wars on multiple fronts are difficult to coordinate. This is as true for culture wars as for ground campaigns. Here, we evidently see crossfire from multiple battlefields. An interesting artifact.

Uber is not euvoluntary. Neither is immigration. Neither is the contract between the agents of the sovereign and the constituency.

This machine produces outrage and its effluvium is death. Or maybe the other way round. It can be hard to tell at times.

A Ragged Bill of Sale

When the otherwise meretricious, obsequious DoJ releases a report that basically confirms everything Radley Balko's been working on for the past several years, I worry. If that's all the news that's fit to print, imagine the emanations and penumbras.Just how much was redacted?

The jurisprudence of anti-trust legislation is something like this: protected monopolies can get away with treating customers abhorrently because shoppers have no recourse, no alternatives. Therefore, some sort of state oversight is required to prevent abuse.

Nowhere is this analysis more apt than in the monopoly provision of violence. If your local PD is an overbearing nuisance, there's precious little you can do about it. They enjoy powerful de facto if not robust de jure protection against both criminal and civil action. Unless you're willing (and unconstrained by wealth limitations) to move to another jurisdiction, you are obliged to accept the transaction that the constituency has made on your behalf. Your regrets are immaterial, even if your family pet lies in a shallow backyard grave, even if your grandfather was gunned down in the middle of a no-knock raid at the wrong address, even if your toddler was seared by a flashbang grenade.

DoJ oversight is one technology to prevent the abuse of local tax- and forfeiture-funded banditry. But it ain't the only one.

Also of interest, picture for a moment the iterated game theory here. How does the sovereign benefit from this report? Consider carefully your answer.

Tea With Danuta and Aristotle

Pictured: In 1985, Danuta Danielsson wallops a neo-Nazi during a nationalist demonstration. Thirty years later, Sweden finds its leadership waffling over whether or not to memorialize the moment in statue. At issue? According to the WaPo link, Danuta's family isn't thrilled about having her so memorialized. Evidently, she was none too proud of this little moment of incivility. There's also some, well, let's call it "tension" in Europe around ethnic identity and nationalistic sentiment. The current politics are of less interest to me than the moral sentiments implied by this photograph however.

Recall first that the law is an ass, and one that needs periodic kicking. Here, the law speaks plainly: assault and battery is a crime. Ms. Danielsson (Mrs? If the surname rules are similar to those in Iceland, the -sson suffix is male and therefore her husband's) is here captured in the process of committing a crime. That she's in the middle of delivering a handbag's worth of street justice to a pitiable remnant of Europe's greatest modern sin is irrelevant when weighed against the plain language of statute law.

Yet something tells me that a randomly selected jury of her peers would elect to acquit 99 times out of 100. Why? The law is an ass. All it can fart out is a single note: you can't hit someone except in self-defense or in the defense of others. Most citizens have more sense than to listen to the exclusive trumpeting of a lonesome flatulatory orifice. Most citizens rightly acknowledge that some forms of speech, some assemblies are so thoroughly odious that they deserve immediate, righteous censure and that sometimes a solid thwack with a hausfrau's satchel is, by the lights of proportional Aristotelian capital-J Justice, the correct rejoinder.

What isn't a correct rejoinder? Well, if she would have pulled a pistol from her purse and covered the Nazi goon, Or if she would have rounded up a posse to pummel yon skinheads unconscious. Or if she would organize fellow constituents to impose prior restraint against this odious rabble. It is meet and proper to answer speech with speech, even if on occasion you have to let the swat of a pocketbook do your talking for you.'

The moment citizens grant the sovereign the authority to police the content of speech is the moment they yield their liberty to object to the momentary fashions of public morality. A government that can silence neo-Nazi creeps is a government that can silence suffragists, or anti-war protesters, or pretty much anything that strikes their fancy. Anti-hate speech sounds awfully good, at least until the tables are turned and you're the one indulging speech the sovereign finds hateful. 

Munger's addendum to Solon's rule runs something like this: would you trust an actual politician you can name with the authority to exercise the rule you favor? 

This is a fine heuristic. Speech may not always be euvoluntary, and the law may be an ass, but that does not imply that we ought compound insult with injury. 

h/t TGP

Rules vs. Discretion: Statute of Limitations Edition

If politics is exchange, so surely is the machinery of criminal justice. But as in much in the jurisdiction of the state, the time and attention of police and prosecutors is not coordinated by unambiguous. competitive price signals. It is generally in the taxpaying (and justice-seeking) public's interest that the limited resources of the DA's office be directed towards those cases most likely to deliver swift resolution.

A statute of limitations is a technology directing law enforcement to discard extra-marginal cases.

Radley Balko has been working on a four-part series debunking bite mark analysis. In the addenda, Manhattan DA Cyrus Vance responds:

Melissa Mourges is a veteran prosecutor and a nationally recognized leader in her field. As Chief of the Manhattan District Attorney’s Forensic Science/Cold Case Unit, she has solved dozens of cold case homicides, including two recently attributed to “Dating Game” serial killer Rodney Alcala. In addition to being a Fellow at the American Academy of Forensic Sciences, ADA Mourges has also served as co-chief of the DNA Cold Case Project, which uses DNA technology to investigate and prosecute unsolved sexual assaults. As part of that work, she pioneered the use of John Doe indictments to stop the clock on statutes of limitation and bring decades-old sexual assaults to trial. Her work and reputation are impeccable, and her record speaks for itself.

Emphasis added.

John Doe indictments are a counter-technology. It's the DA's way of saying, "hold on, the margins have shifted. We can now see justice done well after the fact, and the economic calculus implied by the limitations statute no longer apply."

This subtext may be true or it may be false. That's an empirical question. But if they have changed, using an ad hoc legal maneuver like a John Doe indictment with great frequency should be a strong hint to the legislature that their statutory technology is obsolete, or at least that it could stand to be renegotiated.

So here's the puzzle: why hasn't it? "Tough on crime" is legislative frotteurism. Wooing voters by saying "the candidate has introduced legislation to extend/remove the statute of limitations on the most heinous crimes in society" is a no-brainer, isn't it? Can voters' status quo bias be so strong that a campaign promise like that is too weird to fly?

Citizens employ governments to provide law and order. When investigators have to subvert the law to chase crooks, the provision of this service is in disrepair. Constituents have a natural expectation to be subject to a clear, consistent rule of law. If we must have a legislature, and we must lift the statute of limitations, perhaps we should consider doing it in the legislature rather than at the whim of zealous, dogged prosecutor's offices.

Vigilantes, Bond and Otherwise

A "bond vigilante" is an investor who sells off sovereign debt because of worries about inflation risk. Remember that Treasury securities, with the exception of 10-year inflation-protected bonds (TIPS), are all fixed-coupon, which means that holders earn a periodic nominal payment. If you add up all these payments (including how much you get for retiring the bond) over the life of the bond, applying a multiplier to each payment to correct for the opportunity cost of waiting for your money to come in, you obtain the present discounted value of it, which in a thick market, should be the price.

So it should be obvious why expected future inflation should make bonds cheaper: ten bucks is worth more in a future where it can buy you two burritos rather than a future where it gets you only one. So while all-a-tizzy, bond investors pay very close attention to the pronouncements of the Federal Reserve, as well as the many lending institutions that actually create money in circulation to estimate future inflation. If they smell it on the wind, they descend like a troop of howler monkeys, selling Treasurys enough to drop the price, which necessarily increases yield, which has the knock-on effect of increasing the cost of sovereign borrowing (if you're a buyer, you have no incentive to discriminate between a new-issue instrument and one on the secondary market). So quite naturally, those folks predisposed to commiserate with the Treasury have dubbed bond investors worried about inflation enough to put their fortunes at stake "vigilantes."

As an undergraduate, I found this choice of terms risible. Vigilantes are lawless, after all. Vigilantes are either an unruly mob, or a lunatic who takes the law into his own hands. Someone who sells off bonds when it's the sovereign who's been naughty is just a prudent investor.

Recent developments have encouraged me to revisit my prejudices.

When the law itself is lawless, vigilantism is the last refuge of the citizen to maintain the public order. When beat cops (to pick a fanciful example) disregard their duty to prosecute violent offenders in favor of harassing pedestrians, when state troopers pull over drivers with out-of-state plates in search of enough paraphernalia to justify an on-site takings, when vice cops rape street walkers in lieu of investigating coerced child prostitutes, then the principal-agent problem has ballooned out of control, and an arbitrage opportunity arises for law-and-order entrepreneurs. In the vernacular, we call these people "vigilantes," but try to ignore the connotation and focus instead on the actual deeds.

So the question of moral intuition: under what conditions would a randomly-selected constituent approve of vigilantism? How badly do the sovereign and his agents have to abdicate responsibility before citizens taking the law into their own hands is preferable? More to the point, isn't there a natural incentive to maximize institutionalized misconduct subject to the constraint of outright revolt? Isn't it in the natural interest of the Sovereign to abuse and exploit his subjects to encrease his dominion? If not, why not?

A vigilante is someone who challenges the state monopoly on violence. A bond vigilante is someone who challenges the state monopoly on the issuance of sovereign debt. Can a vigilante be euvoluntary? I suppose that depends on the alternatives.

It Must Be Kicked

The pessimist:

The violence isn't inherent in the system, the violence is the system.
— Samuel Wilson (@Spivonomist) November 26, 2014

The optimist:

Libertarians need to add their voices to folks like @NewBlackMan on events in Ferguson. Police state protects itself. http://t.co/Do6unzYtJ2
— Michael Munger (@mungowitz) November 26, 2014

I fly my pennant for Team Aristotle. You might not recognize it in my proto-Chestertonian anarchism, but I agree with ol' Ari that the political life is the highest calling of the citizen. Unfortunately, the greatest rewards to participation in politics accrue to knaves in greater proportion than to honest folk. Of course the monopolists of force protect themselves first. I cannot endeavor to lay my finger upon a single instance anywhere at any time when that was not the case. The First Rule of Policing is as close to a universal truth in society as can be found.

Kaley v US, Bennis v Michigan... the ugly list of asset forfeiture cases that line up benefiting the organized banditry masquerading as a peace force bares the lie that there exists a gentleman's agreement between the sovereign and the governed.

My utopian comet has a police force. Law and order are crucial to commerce, to comfort, to general opulence. But the agreement between the enforcers and the median constituent would be euvoluntary. Enforce the natural law, uphold capital-J Justice, protect the innocent.

Then again, I can hardly blame the cops for shaking down citizens and acting as unaccountable thugs. Not too much anyway. Most of the fault lies with over-zealous legislatures who spend their hazy days making every effort to appease tumultuous constituents whose conflicting interests produce mountainous, inscrutable reams of rules so prodigious that any citizen might be apprehended at any time for reasons so arcane that they may as well be utterly capricious. And woe be unto thee if thou are the target of a prosecutor's or a politician's caprice.

It would be unreasonable to expect a marble bust of Pallas to emerge from a rout of snails. Is it no less unreasonable to expect an ideal rule of law to emerge from a coven of senators?

Title 32 in Missouri

Requiem.

I further order, pursuant to Section 41.480, RSMo, the Adjutant General of the State of Missouri, or his designee, to forthwith call and order into active service such portions of the organized militia as he deems necessary to protect life and property and assist civilian authorities and it is further directed that the Adjutant General or his designee, and through him, the commanding officer of any unit or other organization of such organized militia so called into active service take such action and employ such equipment as may be necessary to carry out requests processed through the Missouri State Highway Patrol and ordered by the Governor of the state to protect life and property and support civilian authorities.

What do you do when a little violence isn't getting the job done? Produce more violence.

Peaceful, euvoluntary exchange is mutually felicitous. Force executed on behalf of ambitious (or scared) political elites is not.

I am not convinced that there is a peaceful solution to civil unrest in Ferguson, but I am convinced that the institutional underpinnings of the ongoing drama there can be eradicated. End the War on Drugs, overturn civil asset forfeiture protocols. Assign police to their original charter as guardians of law and order. It may not even be too late for Missouri.

Yikes, you guys. Yikes.

Grandmas, Guns, and Ganja

A common critique of libertarianism is caricatured by libertarians as "but who will build the roads?" That is to say that critics of libertarians believe that there are some vital services for which there exist severe free-rider problems. Fire brigade services are a typical example: the fire department will put out house fires regardless of whether or not the homeowner has paid lest the fire spreads to neighboring paying customers.

Okay, maybe that's a bad example, as I'm sure you can easily think of private arrangements to overcome this hurdle. But the rule of law is one function of government that survives in even the classical liberal, Lockean tradition. You'd have to go pretty deep into the tassels on the ends of the libertarian tapestry to find folks willing to go all-in on the private provision of constitutional authority (I'm not saying they don't exist and there aren't plausible arguments in favor of private governance, but it's not exactly mainstream liberty movement kind of stuff). The median libertarian would probably say that if there is to be a government, its chief duty is to provide basic law and order.

And I think the median libertarian would also look at the doctrine of civil asset forfeiture and correctly note that this practice is not consistent with a legitimate rule of law, even when it's working properly. IJ used a sympathetic grandmother figure to illustrate their point in this video, but even if it were Carlos Slim having his hacienda snatched, asset forfeiture would still be unconstitutional, ahistoric, and profoundly unjust.

There are plenty of good reasons to be skeptical of what libertarians peddle. But before you ask who'll build the roads, why not work together to address what genuinely is a legitimate, profound injustice in American society?

Politics is exchange (of a sort). Civil asset forfeiture is decidedly not euvoluntary. If you're the sort interested in voting, consider demanding of your elected representatives that this immoral practice cease forthwith.

Enforce, then Reform? Three Simple Lessons You Need to Know about Legalization.

"Let's enforce the laws we got on the books, and then we can talk about reform."

Surely you've heard (or even said) some variant on this abundant sentiment. Its appeal lies in the natural respect for law and order. In a peaceful, just society, citizens agree to the rules and constrain their behavior accordingly. If laws are routinely broken, the risk is degeneracy, chaos, and destruction. Reforming poorly enforced legislation sends a message that the Republic tolerates lawlessness and her citizens will kowtow to assaults against her integrity. In war, rout is worse than defeat, as it combines both weakness and cowardice. Altering or repealing poorly enforced legislation invokes the same moral intuition as a rout on the field of battle, so it quite naturally offends the sensibilities of the virtuous citizen.

I agree that enforcing just laws is the proper role of the sovereign. However, I do not agree that this implies a strict order of operations on legislative reform. Let me explain why using an example.

The Republic of Mungertopia is notable for its lush forests, verdant hills, blue skies, and well-tempered citizenry. 'Tis a productive nation, with sparkly factories churning out modern delights powered by the clean light of the dazzling sun. The Mungertopians are happy, but they've got one small problem. They thirst. Specifically, they thirst for the juice of the Squamous Cactus, a rare desert succulent that only grows in the low-lying deserts of Spivonostan. When combined with certain anurial secretions, the resulting cocktail is not only delicious, but highly psychoactive, and as it turns out, a bit addictive.

Spivonostan is, and has been for many years, plagued by a notable lack of a functioning rule of law. Bandits run amok in the lowlands, and so it has become that there are exactly three, no more, no fewer Squamous Cactus plantations in the whole of the land, the rest having long since burned.

• Art runs El Rancho Perfecto, a highly scrupulous operation. Art is a bit of a perfectionist, and absolutely refuses to allow any chemical adulterants into his product. All his frogs are certified free-range, organic, butterfly-fed specimens, massaged daily by a cadre of young Spivonostani workers paid a fair wage.
• Betty owns the Comme Çi, Comme Ça, and cares for product quality insofar as it contributes to her bottom line. She's not actively out to poison her customers (drumming up new business is expensive, after all), but neither is she above watering down her output, maybe peppering in a little strychnine to give it a tiny extra kick from time to time.
• Carl is heir to Il Cattivo and he's actually quite a (please forgive the coarseness of my language, but naught else shall suffice) crumb-bum. He regularly and with malice spikes batches with chemicals designed to at once make its ingestion both more unpleasant and more addictive. He employs goons to ambush Art and Betty's teamsters, he mashes his frogs in wire cages with scarcely enough room to wiggle their toes, and rather than rotating his crops, he slashes and burns his way through the Spivonostan rainforest to sow anew.

Citing the troublesome aspects of cactus juice, Mungertopian voters successfully petitioned the sovereign to ban the sale, possession, trafficking, and consumption of the stuff close to a century ago. Today, the only cactus juice that streams across the border does so under cover of darkness, contraband in the eyes of the many Mungertopian interdiction agents.

Let's say that Art, Betty, and Carl can produce ten gallons of cactus juice apiece per annum. Let's also say that with P=1, a gallon of Art's juice delivers 1 unit of pleasure to thirsty Mungertopian clients. With P=0.5, a gallon of Betty's juice produces 1 unit of pleasure, and with P=0.5, produces 0 units of pleasure. And with P=1, a gallon of Carl's juice rewards customers with -1 units of pleasure. Let's also say that Mungertopian interdiction efforts do not discriminate: cactus juice is cactus juice, regardless of quality. Let's also say that the Mungertopian CJEA (Cactus Juice Enforcement Agency) is reasonably effective and captures half of all incoming cactus juice shipments. Let's also say that Carl's violent nastiness intercepts an additional two gallons each of both Art and Betty's juice before it reaches the border.

The net pleasure provided to the juice drinkers of Mungertopia is calculated thus: The quantity produced by Art, less the amount intercepted by Carl, multiplied by the probability of interdiction by Mungertopian agents, distributed by the probability distribution function of the payoffs. Lather, rinse, repeat for Betty and Carl. Sum that all up, and you get:

(10-2)*(0.5)*(1)*(1)+(10-2)*(0.5)*((0.5)*(1)+(0.5)*(0))+(10)*(0.5)*(1)*(-1) = 4+2-5 = 1

So in my carefully constructed example, the net payoff to Mungertopia is 1. Astute observers will note that I've left off any consideration of prices or frictions in the system for now (interdiction services are not free), but I beg you to hold your complaints for the moment.

Note the details of the probability distribution. 13 gallons of cactus juice end up on the streets of Mungertopia. If the product is undifferentiated (or if branding is unenforceable through international treaty or tort proceedings), a Mungertopian customer has a 6/13 shot of getting the good stuff, a 2/13 shot of getting a dud, and a 5/13 chance of ending up with ditch drool (and possibly landing in either the hospital or an early grave). The overall population is still better off than they would be without the cactus juice trade, but try telling that to the folks who got a bad batch... or to Art or Betty's gunned-down mules.

Mungertopians rightly see this horrific trade route as an unacceptable breach in the rule of law. They advocate the "enforce, then reform" trope in the hopes that increasing the probability of interdiction will reduce the frequency of unwanted outcomes. That is, they hope that by changing the numbers I have in red boldface above, their society will be better off. Oddly, by strengthening the efficacy of interdiction so that 3/4ths of deliveries are interrupted, we get 2+1-2.5 = 0.5 units of net social pleasure, with a relative increase in the probability that consumers will obtain some of Carl's nasty juice.

Contrast this, dear friends, with a legalized regime. By allowing the free flow of cactus juice which, evidenced by its continued import despite legislation to the contrary enjoys robust demand by Mungertopians, we observe the following effects:

• Art is able to sell his product freely and without undue constraint. He has access to the legal institutions of Mungertopia, and may even be eligible to contract with Mungertopian security agencies to protect his shipments against Carl's banditry. He can enforce his brand in the courts and can prove the purity of his product with independent laboratory testing, all above board.
• Betty now has a strong incentive to compete on the margins that are relevant to her customers. If Mungertopians demand cheap cactus juice at lower prices, she's equipped for that. If the salient market is more upscale, she can operate there too. And like Art, she can take the guesswork out of it, relying on legitimate certifying agencies to assure her customers that the claims she makes about her cactus juice are reliable.
• Carl is now the sole focus of interdiction efforts. Since he sells poison to the people of Mungertopia, there truly is a public interest in preventing trade in his wares. Under a liberal cactus juice regime, the only smuggling operation that remains is the one that is wholly unscrupulous. Carl may find that since Mungertopians can now enjoy perfectly legal cactus juice in peace, tranquility, and with ease, demand for his subpar treacle has evaporated. He will seek more profitable ventures and the Spivonostani rainforest will breathe a deep sigh of relief. Well, that is, so long as the Mungertopian government can exercise enough temperance not to tax legal cactus juice too heavily. The price differential is what keeps him in business. After all, what is a ban, but an effectively infinite statutory tax rate? Think of smuggling as tax evasion from now on, my gentle readers.

And of the Mungertopians? Will they not become addicted to cactus juice in greater numbers than ever before? Perhaps. That's an empirical question. But thoughtful public policy is a matter of weighing risks. The heavy burden of violence, illness, and death supported by enforcement agencies that grow more overbearing by the year must be judiciously compared to the costs of increased rates of addiction. Citing the rule of law as justification for more interdiction when it is the law herself that causes much of the grief should give pause.

A nearly identical argument holds for immigration on the southern border of the US. It decidedly is the province of law enforcement to make sure that criminals, terrorists, and other miscreants do not make their home on our shores. By treating ordinary peaceful migrants the same as people with ill intent, immigration statutes reduce the relative probability that genuinely harmful people are caught. Finding a needle in a haystack is hard enough without having the haystack squirm across the desert on a moonless night.

To enforce the law, we must first reform it. Trade barriers, even for goods that may not be strictly euvoluntary, may well produce more harm than good.

Uprighting Solon

Solon was (compared to his contemporaries) a statesman after our euvoluntary hearts. I challenge you to read Plutarch and gainsay this claim. He wrote affectionately enough of wealth gained through honest exchange, though: "Wealth I would have, but wealth by wrong procure I would not; justice, e'en if slow, is sure." But it's his jurisprudence rather than his economics that I find compelling. Here's a hint of how he presaged Public Choice: "[Solon] laughed at [Anacharsis] for imagining the dishonesty and covetousness of his countrymen could be restrained by written laws, which were like spiders' webs, and would catch, it is true, the weak and poor, but easily be broken by the mighty and rich." Gordon Tullock could have easily written that.

Well, even though I've posted this very passage recently, it's worth reconsidering.

TMS VI.II.41:

The man whose public spirit is prompted altogether by humanity and benevolence, will respect the established powers and privileges even of individuals, and still more those of the great orders and societies, into which the state is divided. Though he should consider some of them as in some measure abusive, he will content himself with moderating, what he often cannot annihilate without great violence. When he cannot conquer the rooted prejudices of the people by reason and persuasion, he will not attempt to subdue them by force; but will religiously observe what, by Cicero, is justly called the divine maxim of Plato, never to use violence to his country no more than to his parents. He will accommodate, as well as he can, his public arrangements to the confirmed habits and prejudices of the people; and will remedy as well as he can, the inconveniencies which may flow from the want of those regulations which the people are averse to submit to. When he cannot establish the right, he will not disdain to ameliorate the wrong; but like Solon, when he cannot establish the best system of laws, he will endeavour to establish the best that the people can bear.

Consider the possibility that Solon was THE philosopher king that Plato and Aristotle (inter alia) lionized. Solon repealed every single statute laid down by Draco (of 'draconian' fame, probably also the inspiration for the Harry Potter antagonist). More interestingly, he was beloved by rich and poor alike: the rich because they thought him trustworthy, and the poor because they believed he had an eye for equality (redistribution). Sounds familiar.

Back to that divine maxim of Plato though: "never to use violence to his country no more than to his parents." This is a remarkable bit of jurisprudence. Contrast it with modern (hard or soft, take your pick) paternalism. Plato's maxim says, in effect that the citizen is the sovereign of his own affairs, that the archon is well and truly the servant of the constituent. The paternalist reverses this relationship, placing the political elite in a head-of-household position. A libertarian Mungerfesto in five parts is the extensible version of Plato's maxim, of Solon's jurisprudence. The state is a watchdog, the citizens are the masters of their homes. The dog does not own the home. Note that this need not conform to NAP-only libertarian principles, nor to any special flavor of anarchism. Plato just says that if you ain't willing to put a gun to your parents' head over some activity, you shouldn't be willing to put a gun to anyone's head over that same activity. It's a heuristic of governance aimed at untelescoping legislative morality.

It's a heuristic that enables euvoluntary exchange. Maybe it's time we thought about standing Solon back on his feet. Else your head'll collapse, cause there's nothing in it... and you'll ask yourself...

#phronesis #eudamonia


Postscriptum, it appears that Solon mastered political kayfabe thousands of years before our own silver-tongued wretches.

The way which, the moderns say, the Athenians have of softening the badness of a thing, by ingeniously giving it some pretty and innocent appellation, calling harlots, for example, mistresses, tributes customs, a garrison a guard, and the jail the chamber, seem originally to have been Solon's contrivance, who called cancelling debts Seisacthea, a relief, or disencumbrance.

Government is the name for the things we do together, indeed.

There Is No Arizona. No Painted Desert, No Sedona.

State of Arizona Senate Bill 1062 passed yesterday, amending sections 41‑1493 & 41‑1493.01, Arizona revised statutes; relating to the free exercise of religion.

ATSRTWT

Deletions to the existing statute are in red strikeout and additions in blue allcaps.

The substance of the edits (and presumably why this is being hailed as an anti-gay bill) is that it affords secular organizations the same rights of refusal of association that were previously strictly limited to religious assemblies or institutions. So if someone offends your "religious" sensibilities, you don't have to be on hallowed ground anymore to tell them to pack sand.

Opponents of legislation like this understand (correctly) that "religion" in this instance is a worm-chewed fig leaf under which turgid bigotry swells. Hate the sin, love the sinner  and all that (even though "sin" is theologically improper in the case of homosexuality; "abomination" is the ordinary translation, but even that is misleading).

It occurs to me that there are two sorts of problems here: bigoted beliefs and discriminatory practices. Legislation aims to curb the latter for one side and one side only of commercial transactions. It's still perfectly legal for customers to discriminate to their curdled hearts' content; not so for vendors.

Do the EE conditions help understand the moral intuition here? When an ordinary citizen not in the role of running an organization makes the decision to withhold business, with whom lies the BATNA disparity? I suspect our imagination leads us to put the burden of asymmetry on the back of the business owner: failure to exchange is one trifling sale among many for a firm, but is of relatively greater import for the consumer. Naturally, this heuristic is upturned for boutique businesses or personal services, but this reversal may not be salient enough to worry about too much. Caveat venditor. You should have known better than to get into business in this market, right?

Underlying discriminatory practices of all stripes are bigoted beliefs (values?). Often draped in religious or nationalistic kayfabe, these are the proto-tribal instincts exploited by elites that in turn exploit out-groups for scurrilous ends. Discriminatory behavior is a symptom of bigoted belief. Legislation that obliges vendors (and vendors only) to refrain from discrimination (and only for enumerated classes, mind you) addresses symptoms without necessarily obviating the malady that gives rise to a certain desiccation of the marketplace.

Unfortunately, voters cannot legislate moral sentiments. That's the purview of suasion, of rhetoric. That's a task much more challenging than picking up a pen or making a phone call.

Fortunately, it's a task that appears to be proceeding apace. Public opinion seems to be shifting in the direction of LGBT tolerance and acceptance. So I suppose the analytical upshot of Arizona's legislation is that researchers will be able now to determine whether or not the ability of vendors to indulge bigotry will actually result in more instances of discrimination.

Is Arlo Guthrie a Euvoluntary Exchanger?

A... no, THE Thanksgiving classic. Enjoy, and pay attention to the property rights themes and the difference between law and legislation.



Edit: I'm thankful this year that the draft is a thing of the past.