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It's becoming a habit... anyway, tomorrow is the 29th of June and in Rome it's holyday (St Peter and Paul). I'm going to exploit this opportunity to go to the beach: bathing, tanning, biking, relaxing... I'll be back on Sunday.

Referendum...

Today I have the "duty" to vote to change the Italian Constitution or leave it as it is.

Democracy has bored me so much that I've simply forgotten to read something about this Reform.

Alepuzio has written a summary.

Blog closed

I will be offline for a week. See you on June 24th.

Against social justice - I

"Social justice" is the tool by which governments have destroyed the idea of liberty. Some libertarians, like Hayek, have criticized its theory and accepted its practise (may be to make the idea of liberty more appealing?); only consistent libertarians have criticized the idea itself. Anyway, consistency is rare among classical liberals, and the health of this statist idea should not surprise anyone. The idea of "social justice" itself, anyway, shall be criticized, because it is incompatible with classical liberalism and libertarianism.

"Social justice" is an ensemble of normative instances (judgements of value) which assert, briefly, that each individual is entitled to obtain several goods and services as an individual, without considering its contribution to their production.

Let us consider the "right" to nourishment: each individual has a "right" to obtain food, nothwithstanding his efforts (or lack of efforts) in obtaining food. So, each individual has the "right" to be fed by others, even if he spends all his days tanning in his garden under the sun.

This means that someone else has the duty to nourish him: someone shall be compelled to farm wheat, back bread and offer the previous individual a sandwich while he is tanning... "Social justice" implies the imposition of juridical duties over other people. Besides, we have a clear example of externalities: the costs of obtaining food are externalized on others, who will be forced to foot the bill. Everybody will have the same idea, and no one will be willing to work (this is not a description of reality, but a reductio ad absurdum). It is clear that these externalities do create parasitism, disincentives to work, etcetera.

This legal duty is, to say the least, curious: Texas people should be forced to "help" Wyoming people. And why shouldn't Canadian people be compelled to help Polish people? Don't they require more "social justice" than the inhabitants of Wyoming?

Not enough absurdities, so far, so we can go on: these "rights" are so strange that poor people enjoying them may be worse off than without them. Consider children labour: ok, it is better to play with Barbie than working in a mine. I see no reason to derive from this obvious sentence that they shall be forced to stop working in the mine: the outcome will not be more playing with dolls, but more poverty, starvation, child abuse, chile prostitution, children labour, black markets...

But the poverty of "social justice" does not end here: it is easy to show that, if democracy were a serious thing, "social justice" would be useles... in fact, if the majority of the people wants poor relief... why don't they relieve the poor with their own means? They are the majority: they have (roughly) one half of the total amount of social material resources. If we add that in a free market there would be less poor in need of help, we reach the conclusion that "social justice" is hypocrite: everybody wants to be a do-gooder, by with other peoples' means.

No, the list is not finished, yet: what about the concentration of a limitless power in the hands of politicians, who have the power to scatter costs and benefit throughout society without being constrained by any other limit than their own quest for power? "Social justice" requires a large, and expensive bureaucracy; a powerful ruling classe, a gigantic fiscal system. Do you really believe that all this power will be employed to help the poor? Uh? A normative idea which may be extended to every single aspect of human life, because its content is vague, to say the least, and may be used, thus, to justify any power, any coercion, any prevarication... we must be fool in believing in "social justice".

People who are naive enough to keep on believing in democracy, probably consider government a sort of blackboard on which they can write their will, sum it to other people's will, and obtain an optimal social policy (whatever this means, if it means something). The mother of fools is always pregnant: in reality, political decision mechanisms influence political choices. Organized political pressure groups are almost always the winners in this lottery, notwithstanding the fact they are, in general, small minorities. There is no reason to believe that the poor will see any advantage from this process.

Libertarian ("natural") rights are not simply different from social (socialist?) "rights": they are incompatible. Liberty only imposes on others not to kill, beat and defraud us; "social rights" give us the ideological justification to use the rest of manking as a means fo our aims, using coercion against them. "Social justice" is serfdom. Besides, libertarian rights can be "universal", because it is always possible, or at least conceivable, to respect them: "social rights" depend on the level of economic development, on the other hand, and they are likely to hamper this development on which they depend.

This was an introduction: a "manifesto against social justice". In the near future, I will post some argument in defense of these theses.

Voluntary serfdom, double standards, conformism...

... A.K.A. Principles of Politics

Imagine you have a gun and go to your neighbour's home: imagine to point your gun at your neighbour's face and force them to fund a charitable organization which helps African children. Would you be proud of yourselves? Would you be surprised to be considered a criminal? Would you call it charity? No.

Suppose now to do exactly the same thing, but not directly: suppose that the state does it for you. This is foreign aid, funded through coercitive taxation. Would you be proud of yourselves? Would you be surprised to be considered a criminal? Would you call it charity?

If now you answer "yes", then you got a tipically political disease: double standards, moral hypocricy. What is a crime done by a private person becomes somethin to be proud of if done through "the state", whatever this means. What you would have called a crime, now you name "politics"; what you would have called hypocricy, now you call "social justice".

Imagine to go to your neighbour's home: imagine to ask him to give you his son for temporary enslavement, one year of forced labor to help on you kitchen. Suppose now that you neighbour agrees: would you call him a coward, a debauched, a degenerate? Yes.

Suppose now that the "state" calls you son for compulsory military service, the draft (or civil service, such as Hitler's Reichsarbeitsdienst... it seems that something akin will soon be introduced in Italy). Do you feel a coward in obeying? Do you feel a debauched in not protesting? Do you feel a degenerate in not rebelling? No? Why?

If you yield to power without a word of disappointment, obeying orders that you wouldn't take seriously if imposed upon you by any other man, you are probably victim of another tipically political disease: voluntary servitude. You believe something to be right only because power says it is right.

Suppose now that the "state" calls the son of your neighbour to kidnap him with the draft. How do you believe he should react? Should he obey? Should he yield? Should he surrender?
Only because you surrender, does everybody shall surrender? Only because you kneel, does everybody shal kneel?

If your reasoning is similar, you got a third, and equally lethal, political disease: conformism: you believe your compromises should be made compulsory, your weaknesses, made law, your submission, imposed to everybody.

Without double standard, without voluntary servitude, without conformism, no government could last. People despise arrogance: except when it is called "Politics". People despise coercion: except when it is named "Politics". People despise oppression: except when it is dubbed "Politics". People are clever, except whem it comes to politics.

But remember: if the public opinion were libertarian, the political classes would be harmless; if the public opinion believed in individual rights, their violation would be unconceivable, if the public opinion were principled, individual rights would be safe.

But when the public opinion sleeps, liberty dies. That's exactly our situation...

Obstacles to libertarian policies

Sometimes it happens that politicians defend libertarian principles in order to win the elections. What never happens is that a libertarian policy is really applied. Politicians like Reagan or Berlusconi may have to thank their "libertarian" slogans for their political success, but it is impossible to claim their policies to be consistent with their slogans. Why?

There are three possible problems in implementing libertarian policies:

1. Social problems: libertarian policies may impose a cost on a great part of society. Possible examples: national defense, insurance against invalidity. I believe these problems to be rare and negligible. In other words, only a tiny part of statalist policies can be defendended on consequentialist (utilitarian, latu sensu) grounds.

2. Political problems: libertarian policies impose a cost on politicians, bureaucrats, rent-seekers and other parasites. In this case, a libertarian politician, even a sincere libertarian (the theoretical possibility that a honest politician exists cannot be denied, at least a priori), will probably face professional failure: he will not be elected, and its "allies" will not cooperate with him. The result is that he will remain isolated and will not be able to accomplish anything. A possible example is unionism: unions are useless, they can only create mass unemployment through the use of private coercion, they can improve the conditions of their members or their countrymen only to the extent that they damage non-members and alien workers. Despite these problems, in Continental Europe it is impossible to get rid of their harmful privileges, and their political power enable them to remain powerful, their uselessness nothwithstanding.

3. Mixed problems: libertarian policies can cause transitory harm to several people, but only because previous policies have created a nasty situation. For example, a clear cut libertarian retirement plan may consist in giving back every cent to the original tax-payer. Unfortunately, old workers may find themselves without pension. This is because in the actual situation they are exploiting young workers: by justice they have no claim over the enslavement of the young tax-payers. But it is undisputable that the situation may cause "social" unrest: politicians claiming that the old shall gain their retirement are bound to political failure.

I believe the first group to be almost void. I believe that most policies can be eliminated in 24 hours, but only against the will of the actual decision makers, i.e., within the institutional framework of democracy, the problems of the second group are unavoidable and unsolvable. Anyway, libertarians should pay attention to the third category because it may create a source of dissent with libertarian ideas.

In this third category I can imagine: a deep depression due to the return to the gold standard, old people starving because they have not saved enough to fund their pensioning, massive transaction costs from power-based to market-based income distributions.

My realistic position for a "future of liberty" is apparently inconsistent: delegitimate politics, as the only way to eliminate political obstacles to libertarianism; and a gradualistic approach to minimize the "transition" costs from statism to liberty. Realistically, it is impossible for politics to be libertarian; but also a quick transition may be socially disruptive. In such situation, statist demagoguery is more likely to succeed than libertarianism.

N.B. In order to anticipate possible criticisms, I admit that the term "Libertarian policy" makes no sense: two words combined that can't make sense... I know... but I think my argument is clear anyway.

Political Minorities, Economic Niches...

It is often said that democracy and the market are one and the same thing. Democracy is political liberalism, market is economic democracy... It is often said, even more surprisingly, that somehow the first form of liberalism is nobler than the second... But democratic propaganda cannot disguise the political process into something different from a criminal activity.

Politics forces uniformity; the market, on the other hand, is intrinsically pluralistic. To be a minority on the market just means to form a market niche. You don't need to obey the political winner; you don't need to fund their decisions; you don't need to buy their "products". In politics, losers' preferences are irrelevant: minorities cannot work to implement what they prefer.

Minorities cannot reduce losses by astensionism: entering and exiting the game is not a voluntary choice. Those who don't vote always lose. They can't withdraw unhurt.

The only way to be safe is to win. And to win means to ally with other people in heterogeneous groups, with no common ideas but power-hunger, with no common scope but victory. To mantain this conglomerate united, you need to rob the loser and divide the spoils: politics causes conflict, to obtain power, to avoid being victim of other people's power, to justify the means through which power has been achieved.

On the market, on the other hand, everybody chooses what he prefers. Minorities are not submitted: they form niches. Minorities remain free to choose: they don't need to obey. Minorities cannot be forced to foot the bill of the winners' decisions. And if you want to cooperate, it is because you think cooperation to be mutually beneficial. Cooperation is more stable, and it is not based on deprivation and loot.

If markets were a democracy, everybody would be drinking Coke instead of Pepsi; everybody would be reading Nozick instead of Rothbard; everybody would be eating Angus beef instead of Kobe beef... if we wouldn't like a world like this, why we tolerate such a great part of our lives to be controlled and determine by the democratic political process?

Market is freedom. Democracy is not.

Paretian liberals?

Mathematical formalism seems particularly apt to cause misunderstanding. One example is the so-called Sen's "paretian liberal impossibility theorem".

I will describe the theorem with a short and simple example. Suppose that there are two people, a puritan and a libertine; and one only copy of a certain obscene book (for example, "Das Kapital" by Karl Marx). This book can be read by only one person, situations "P" (the puritan reads the book) or "L" (the libertine reads it), or destroyed, situation "N". So, we have two persons and three choices.

The puritan has this set of preferences: N > P > L. This means that he prefers the book to be destroyed rather than reading the book, but he prefers to read the book rather than leaving it to the libertine. The libertine has this set of preferences: P > L > N. This means that the libertine wants the puritan to read the book, otherwise he prefers to read it by himself, while his worst case is that the book is destroyed.

Following Sen, we are going to define liberalism so that every individual has "the last word" at least on one problem: the so called "minimal liberalism" condition is that at least for one choice between two alternatives, the individual choice coincides with the social choice.

Suppose the choice to be between L and N, and leave the "social choice" to the libertine: he will prefer L to N. On the other hand, suppose the choice to be left to the puritan to be between N and P: he will prefer N to P.

These two conditions on the social choice imply, in order for social preferences to be transitive, that L > N > P. That is, L > P. The "problem" is that L is Pareto inefficient with respect to P. In fact, both the libertine and the puritan prefer P to L, for the initial hypotheses. Minimal liberalism is Pareto-inefficient.

However we define rights, there will always be one set of individual preferences which will give rise to the "paretian liberal impossibility paradox". Inefficiency arises for a particular definition of minimal rights, but even if we change the content of these rights, we can always change preferences in order to achieve the paradox...

I'm not an economist and I may get it wrong, but I think the reason is that if we have three choices, A, B and C, and impose the condition for which individual X is decisive between A and B, and individual Y is decisive between B an C (this formulation is general: A, B and C can be chosen or permutated freely); then we can obtain the paradox by choosing X preferences to be C > A > B and Y preferences to be B > C > A. I'm not a mathematician, and I hold that this is enough to show the theorem.

X will force social preferences to be A > B; Y will force social preferences to be B > C; thus A > B > C; thus A > C, even though they both prefer C to A. This gives rise to Pareto-inefficiency.

Notwithstanding these mathematical doubts, the real question is: "What have all this technicalities to do with (classical) liberalism?". My answer is: nothing.

Turning back to our example (the so-called "Lady Chatterley paradox"... the guy who created the paradox didn't despise Marx enough...), we have that, in a liberal society, the book will be owned either by the puritan or by the libertine. In the former case, the puritan will choose, in the latter case the choice will be up to the libertine. There is no "at least one minimal right for each person" condition in this case, because minimal liberalism, as defined by Sen, has nothing to do with liberalism. Liberalism is about legitimate control over resources, that is, property rights.

Even more important, if the puritan owns the book, he has the right to choose between N and P: he has no right, in a liberal society, to force the libertine to read the book; on the other hand, if the libertine owns the book, his choice is between N and L, for the same reason. Ok, I'm criticizing the particular example and not the general theorem. Anyway, this forces us to think about another problem: the "unrestricted domain clause" is a totalitarian hypothesis, and has nothing to do with liberalism at all (it is clear that I use the term "liberalism" as equivalent to "libertarianism", and I don't care a damn about contemporary "liberals", such as Rawls).

There is a third possibility, that the book is res nullius (it has no owner), but it is irrelevant: until it has no owner, there is not a problem; as soon as it gets one, we are back to the "either the libertine or the puritan own the book" case).

The Sen paradox does not prove the inefficiency of classical liberalism, but rather Professor Sen's misunderstanding of what liberalism really is.

The necessity of private property

I keep on filling my desert blog with my rubbish. Sooner or later I will learn how to get famous...

Private property cannot be avoided. Not in a world of scarcity: this fundamental and unavoidable condition of human existence implies that the fulfilment of all individual aims is impossible and that the problem of resource control is inescapable. Even public property is either the property of the men in power or total chaos (one outcome does not exclude the other, obviously).

First of all, two definitions, brought to my attention by the French libertarian economist Pascal Salin, two concepts derived from Roman Law. USUS and FRUCTUS. USUS is the control over a certain resource: it is about deciding how to, and for which individual end, employ the resource. FRUCTUS is the usefulness of the resource to the fulfilment of the individual aim. The raison d'etre of the USUS is the FRUCTUS.

For example, if I own a piece of land, USUS is my right to build on it, set it afire, turn it into a farm. FRUCTUS is the fact that I can now enjoy a new house, a great fire or a certain amount of food.

I think it's clear. Now we have to talk about scarcity: What is scarcity? Why is this condition unavoidable?

Scarcity is the impossibility of fulfilling some individual aims with the actual amount of (scarce) resources. For example, the time of our lives is scarce. If I wanted to learn all the languages of the world, I would grow old before succeeding. Scarcity exists also for the individual man (e.g. Robinson Crusoe), but it is relevant also (or, better, especially) when people interact. The necessity of laws is the result of the unavoidability of scarcity.

Imagine a world without scarcity: men wouldn't need to act (employing their own finite physiological energy, their own finite time, and their own finite physical means) to achieve their goals. Can you imagine it? No? It's ok, it's not your fault: even to think about this abstract concept, you need to employ your finite brain and your finite time.

Probably, it is better to use this resources in a less abstract way: let's draw our conclusions!

Because of scarcity, we must choose which individual aim is to be endeavored. Scarcity means that the total amount of FRUCTUS is insufficient for total fulfilment. Choice between aims means that the problem of who has the USUS is relevant. Who controls the resource has the right to decide who is going to reap the gains.

If a resource is scarce, laws are necessary to decide who has the USUS and, at least implicitly, who will benefit from its FRUCTUS.

Thus, we have private property: private control of resources, established to discriminate between mutually incompatible individual aims.

It is not possible to avoid the problem: scarcity is a necessity.

And it is non-sense to talk about public ownership: scarcity implies that somebody can't enjoy its FRUCTUS. Public ownership is fraud: it is not universal property, but only the USUS of the men in power.

Common properties are not everybody's property, but politicians' property.

If you don't believe it, try build a house over a public highway: you will find that you have no USUS over it, and you find that you will lose, temporary, at least, the USUS over your body, in prison.

When they say "the public is ours", "the debt is owned to ourselves" or "we are the state" remember: you're being fooled.

Politics as externality

Externality is generally viewed as a market failure. Here it is not the time to discuss neither the credibility of this claim, nor the credibility of the collateral claim, that the state can solve the problem. Externalities, in most cases, causes allocative inefficiency and have nothing to do with Pareto optimality (which means that state intervention will make victims, other than the poor tax-payer, damaging some individuals with coercion). Ironically, the only Pareto-inefficient example of externality I know is the tragedy of the commons, which is due to the lack of clear private property rights...

Anyway, what I want to make clear now is that the state itself is the greates producer of externalities in society. This was clear to classical liberals such as Bastiat, who defined the state as "Government is the great fiction through which everybody endeavors to live at the expense of everybody else".

The easiest example is taxation... but, I mean, everybody can understand that to spend other people's money is an externality, causes excess consumption and parasitism...

But what about retirement plans? The costs of actual retirements are paid by actual workers. No one needs to save for his future, and no one has any incentive to behave like the ant of the fable. Everybody hopes to find enough youngsters to reduce to serfdom, promising them they will have other serfs in a remote future...

But this scheme is self-defeating: it can work during a baby-boom, because there are many more young serfs than old masters. It will not work in the future, when the serfs-to-masters- ratio will become smaller than one.

Besides, saving is useless, because their benefits will be externalized through political robbery (namely, taxation), and because the economic heritage of Mr Keynes, public debt and deficit, requires monetary inflation, which further exploits and damages the "ants".

Sooner or later, youngsters will pay the price of welfarist demagoguery. For the moment, let's keep on name "social justice" what is unsustainable parasitism and exploitation... it is better to name bad things with appealling names... a trick that every politician knows full well.