I was walking through a room today and saw a moment of a television program about the public reaction to the Lincoln assassination. It was interesting to hear of the reaction, but more than that, it made me think about all the rending of garments and pulling of hair over our supposedly unenlightened reaction tot he attacks of September 11th.

When Lincoln was killed, the public went mad. People were attacked for expressing sympathy for Booth, or even for resembling booth. Ford was forced to shut his theater, and the actor on stage at the time went into hiding refusing to return to his rooming house. In general, actors were treated with suspicion and anyone showing any sympathy for the assassin was in for a very rough reception, at the least. And recall, these were northerners, the good guys from the Civil War, those who were on the side of the angels, and yet they reacted in this way.

Or think of the reaction when Rev. Martin Luther King Jr. was assassinated, the riots and violence that followed that event took days to end, cities were torn apart and, even after the riots officially ended, violence continued sporadically for some time. (My father had the misfortune to be a police officer who was also a National Guard member, and thus got to serve as a soldier in Washington DC, and, after being released, return to Baltimore MD as a police officer, so he saw quite a bit of the response to the assassination.)

And then we come to 9-11, and the amount of tear shed over thew fact that, following the attack on the World Trader Center and Pentagon, some people said things critical of Islam. Supposedly, these verbal outrages showed what an unenlightened and barbarous people we were. (Yes, I recall a few scattered stories of violence, but many turned out to be exaggerations, and what remained proved to be remarkably few in number, and brief in duration.) Apparently, because some of our citizens allowed an attack carried out in the name Islam to make them criticize Islam it proves we are on the verge of reverting to wild tribesmen roaming the steppe plundering and killing all we meet.

This is an absurd perception. The fact that we responded so calmly to the crisis is actually an historical anomaly in the opposite direction. That there was no mass violence, no rioting, no hysteria, that shows how civilized we have become. Only a few decades earlier I doubt the same could have been said. So, yes, some of our number made some intemperate comments, but given the scope of the event, that seems a positively polite response, at least in terms of historical reality. Not long ago, mosques would have burned, anyone wearing a turban, regardless of religion, would have been in hiding, and those making positive statements about Islam would have risked injury, rather than appearing on the editorial pages. So, while it may be uncomfortable to realize that crises bring about violent reactions in some, I think the proper view of our response to 9-11 is not to think we showed excessive barbarism, but instead to marvel at the restraint we showed.

One of the hardest lessons we have to learn in life is that sometimes bad things happen that are no one's fault, that could not have been prevented, and which must simply be accepted. Other parents have probably had my experience, where a young child, confronted with some random misfortune, blames it on whoever is nearby. (I call this the liability lawyer mindset, when something bad happens, look for the nearest person to blame.) Even as adults, we often find it hard to understand that people can have misfortunes befall them through no fault of their own. And when we do, many times we try to find someone else to blame, just to reassure ourselves that they are not at fault.

On the other hand, we also have to learn another lesson, and one that seems even harder to learn, that just because something is not anyone's fault, that does not mean that it is unfair, or that it needs to be set right. It is regrettable that sometimes people experience misfortune through no fault of their own, but that is not unfair, it simply is. Only volitional actions can be unfair, and the universe is not a willful entity, thus nothing that happens through impersonal processes is unfair, it simply is. Even when we deal with the actions of people, much of what we call unfair is not. For example, if the changing public tastes drive a man from business, it is the outcome of willful action, but that action is not aimed at the goal of driving him from business, it is not unfair, it simply is. His business no longer matched the public's desires, and thus he lost out. It is regrettable, but not unfair.

In fact, that last case shows us one other aspect of these cases, many times the victim does play some small role, in this case failing to adjust quickly. Of course, it is not that he did anything wrong, simply that he made choices, and those choices brought about bad results. He may not have had any way to choose better, there may have been no way for him to anticipate the change, or to know what path to take, but it was still his decision that brought about the outcome. This makes the situation a bit muddier, as he may not be to blame, but he still took action which brought about the outcome, and thus it is easy to try to place blame.

However, none of that truly matters, and that is my point. In many discussions of welfare, or government intervention and other debates over whether or not we should provide our fellow citizens with government charity, even debates over regulatory matters, too much of the debate centers on whether or not the individual is to blame or not, or whether the misfortune that befell them was through no fault of their own. My point is that none of that matters, whether an individual was irresponsible, responsible, or simply struck out of the blue without any ability to anticipate the misfortune, it does not matter. The question is not who is culpable or who is blameless, the question is what the results of the program will be.

Let us look at one simple fact, life is unpredictable, it is s truth we like to forget, as it is frightening to realize that misfortune could strike any of us at any time without warning, but it is the truth. We take efforts to make ti less unpredictable, such as forming society to protect us against random violence, taking preventative measures to catch illness early and so on, but life still can bring the unexpected.

The way we react to the unexpected is twofold. First, we try to place ourselves in a position in which, should misfortune strike, it will do the least damage. For example, we try to build houses in stable, safe areas, rather than on flood plains or fault lines, so when misfortune hits, we won't face the full brunt of it. Second, we take what measures we can to put aside resources so that we have the means to recover from misfortune. We save money for a rainy day, we diversify investments and so on. All so that when bad things happen, we do not have to start over from scratch.

And that is what these attempts to help those in need destroys. When the government will bail us out, when it will indemnify us against misfortune, then there is no need for us to plan, nor for us to avoid risks. Instead, we can spend all our resources on present enjoyment, and we can engage in riskier behavior, because the state will bail us out when things go wrong. Which means, not only does the state prevent individuals from planning ahead, it actively encourages greater risk. In the end, by trying to help those who suffer misfortune, we make misfortune more likely.

Which brings me to my prescription for fixing many of our problems. All we need, at least to eliminate some of the worst of our problems, is nothing more than a willingness to accept misfortune. We need to understand that sometimes bad things happen, and that the individuals who suffer these misfortunes need to help themselves. That is not to say that they cannot have assistance, from charities, from friends, from helpful strangers. But we cannot try to eliminate all misfortune. We cannot rely on the state to prevent all suffering, to stop any tragedy from taking place, or to make good any suffering that slips through. If we do that, we are likely to make things worse rather than better.

Only by accepting that misfortune sometimes happens can we make things better.
 

I have read many times, and even written myself ("Recipe For Disaster", "The Endless Cycle of Intervention", "Grow or Die, The Inevitable Expansion of Everything") on the topic of welfare, specifically, the drag that welfare places upon our economy. Many writers, again including myself, have also pointed out that welfare will continue to expand, inflicting ever more economic damage upon our state. However, what we have often failed to do in these essays is to set forth the inevitable end point of this process, and show, in simple terms, that the welfare state will inevitably lead to nothing less than economic collapse. And so, as it is an inexcusable oversight, I want to now set down, in a brief form, the arguments demonstrating why welfare will result in stagnation and subsequent collapse.

The first problem is political, in a strict sense. Politicians are those who give the voters what they want, as otherwise they fail to get the votes to remain in office. In terms of welfare, this means politicians are those who expand the scope of the welfare state. Some may disagree, pointing to the periodic enthusiasms for welfare reform. However, in the big picture, those enthusiasms tend to be short lived, as even when they succeed, the actual impact is minute, the saving unnoticeable, and thus the impetus to continue is small. On the other hand, welfare recipients and supporters can see actual results from expanding welfare programs. And thus those who cause programs to grow can count on continued and enthusiastic support.

Nor is it simply a matter of self interest, it is also a simple matter of perception. In our age, we tend to distrust those who do nothing, even if based on principle, and favor those who "do something" ("What We Deserve", "Who Is To Blame?", "Don't Blame the Politicians", "Doing Something"). The fact that we have welfare is proof that such a perception is predominant, as otherwise voters would favor asking friends, family and private charities to rescue others from poverty, it is our desire to run to the state for answers that creates welfare. And so, when we have welfare, we also favor active politicians. Thus, those who cause the programs to grow will be seen as more proactive, and will be better known to voters, which, in the long run, will translate into more votes and more power. Thus, over time, elections favor those who cause welfare to grow, at least so long as we believe as we do. ("The Single Greatest Weakness")

There are several problems with a continually expanding welfare state. First, and foremost, is that it consumes more assets, leaving less for savings and investment, and thus slowing growth, which will eventually causes us to reach a point where the growth of welfare exceeds the growth of the economy, and we begin to impoverish ourselves. In addition, by increasing the number of those who receive welfare, we continue to reduce the labor pool. This will, for a time, increase the wages of those who remain in the pool (though in terms of real productivity, it will only improve productivity to the degree it shifts workers into fields with the greatest capital investment, otherwise, even if scarcity drives up wages, productivity, in real terms will not increase -- "Best of the Web Makes A Small Error"), but overall it will cause the economy to slowly stagnate, as more labor resources are withdrawn, reducing the amount of raw materials, finished goods, and services available. Combined with the consumption of resources by welfare recipients, it will accelerate the collapse even more.

Nor is it possible for those periodic waves of reform to easily counter this tendency. The longer individuals remain on welfare, the more people on the welfare rolls, and the more generous those rolls, the harder it is to remove people from them.

The last should be obvious. If someone receives $500 a week in welfare, then a job paying $6000 a week is, to him, paying only $100 a week, as he can get $500 by doing nothing. (See "How Democrats Keep the Poor Poor".) And that does not even consider the other benefits which disappear completely when one works at all, such as disability payments, some medical benefits and a large part of rent subsidies under some programs. All of this means that an individual on welfare needs to earn a considerable amount to make work attractive.

And there is another problem. The longer one is on welfare, the more out of date his skills become. This means he will be eligible to earn less and less. In addition, the lack of recent work experience make shim an ever greater risk for employers, and thus, again, eligible for lower salaries. And so, the longer he remains on welfare, the less likely an individual will be able to earn the large salaries needed to overcome the disincentive welfare payments provide.

Finally, the number of welfare recipients works in one subtle way. That is, the more people receiving welfare,t he less social stigma attached. Of course, in many cases, there is no stigma at all, regardless of the number of recipients. but in groups where welfare is seen as shameful, once there are a sufficient number of recipients, that impression will go away, and individuals will be less reluctant to remain on welfare, making it harder to motivate them with incentives other than cash payments.

And thus, the system seems, as it currently exists, designed to do nothing but destroy an economy. It is inevitable the number of beneficiaries will increase, as will the benefits, while at the same time the economy will shrink and it will become more difficult for those on welfare to leave. Such a situation can produce no result but collapse.

On an optimistic note, there is one simple solution. Should we eventually decide that "doing something" is not always the answer, that the state is not always the solution to a problem, and begin to support politicians who enact limited government policies,  we could reverse this trend swiftly. We need only alter our perceptions. However, until we do, welfare is nothing but a certain doom in our near future.

This is completely off topic, but I thought I would share my discovery. I had mentioned earlier in my post "Grind Those Axes, WikiEditors!", that I had been looking up the etymology of the French "oui", as it seemed so different from other romance language words for yes. Well, Wikipedia actually had some useful information:

By late- or post-Roman times Vulgar Latin had developed two distinctive terms for signifying assent (yes): hoc ille ("this (is) it") and hoc ("this"), which became oïl and oc, respectively. Subsequent development changed "oïl" into "oui", as in modern French. The term langue d'oïl itself was first used in the 12th century, referring to the Old French linguistic grouping noted above. In the 14th century, the Italian poet Dante mentioned the yes distinctions in his De vulgari eloquentia. He wrote in Medieval Latin: "nam alii oc, alii si, alii vero dicunt oil" ("some say 'oc', others say 'si', others say 'oïl'")—thereby distinguishing at least three classes of Romance languages: oc languages (in southern France); si languages (in Italy and Iberia) and oïl languages (in northern France).

Other Romance languages derive their word for "yes" from the classical Latin sic, "thus", such as the Italian sì, Spanish and Catalan sí, Portuguese sim, and even French si (used when contradicting another's negative assertion). Sardinian is an exception in that its word for "yes", eya, is from neither origin.

However, neither lingua romana nor langue d'oïl referred, at their respective time, to a single homogeneous language but to mutually intelligible linguistic varieties. In those times, spoken languages in Western Europe were not codified (except Latin and Medieval Latin), the region's population was considerably lower than today, and population centers were more isolated from each other. As a result, mutually intelligible linguistic varieties were referred to as one language.

Obviously, I am not a student of French languages, or else I would have recognized the etymology from the langue d'oil (as opposed to Occitan languages). And I admit as much. My linguistic interests have always been either classical (Greco-Roman), near eastern (Hebrew, Arabic, Coptic, Egyptian Hieratic/Demotic, Phoenician, Punic), or Slavic and Germanic. I studied Spanish in high school, and so retained an interest in Spanish and Portugese and all the related dialects, and my former in-laws were Italian, so that interested me as I had close family members to assist in learning it, but somehow French never appeared on my radar.

Still, despite revealing an embarrassing oversight in my education (yes, you can still learn how ignorant you are in your middle age), I am glad to finally have my answer. And, for once, Wikipedia actually seems to have useful information, probably because -- at the moment -- there is no academic controversy, or trendy revisionist teaching in this particular discipline. As soon as someone decides to tie langue d'oil to feminist mystics from Cappadocia or atavistic Etruscan speakers who hid out among the Basque, there will be endless revisions I am sure.

POSTSCRIPT

Slavic languages fascinate me because, every so often, I will stumble across a word or phrase that rings a bell. You see, my maternal grandfather's parents came from the Ukraine via Poland, and thus spoke Ukranian, Russian and a very little Polish in a strange, unintelligible mix.  To make it more confusing, they tended to use only a few words, mostly food and curses, mixed into English. And, even worse, my great aunt married a Polish man, and so the two of them would argue endlessly over what was the "right" word for something only to discover he was speaking Polish and she was speaking Ukranian. Thanks to all this childhood exposure, I can't speak a useful sentence in any of the three languages (except, thanks to my great aunt, the Ukranian phrase for "kiss my a**", which is of limited utility in most circumstances), but whenever I hear any Slavic tongue, it sounds remarkably familiar, and, especially when conversation turns to food, I can pick out a few words here or there, even from such distant relations as Serbo-Croatian and Slovak. Thanks to some college Russian classes, I can speak a little more Russian now, and can read Cyrillic characters, but Polish and Ukranian still remain a mystery to me, other than those few words I heard over and over as a child.

POSTSCRIPT II

I should be completely honest, my interest in Spanish had a secondary motive. My girlfriend throughout high school grew up in Mexico city (though her parents were Scottish and Czech and both had been born in California -- for that matter, she was born in Tunisia, but grew up in Mexico city -- thank the Peace Corps for such interesting stories, I suppose). Afterward, in my twenties, I also dated a girl whose father was from Bolivia, and who claimed close relation to Che Guevara (we had quite interesting conversations on politics, as this was long after I had ceased flirting with communism). So, at least in my early life, there were more than academic reasons for my interest in Spanish. Whether it was a fondness for the particular Spanish speakers I dated, or because I simply recognized an innate fondness for those who spoke Spanish, I definitely had more than an intellectual attachment to the language.

And that ends all these pointless personal revelations, my next post will be on a much more relevant topic.

I am always amused when politicians jump on the cause du jour, and swiftly propose laws to grab headlines, without giving a moment's thought to the actual or likely consequences. There are many ways in which we get burdened with bad laws, but the desire to grab headlines is definitely one of the most common, and certainly results in some of the most foolish, ill-considered and contradictory laws we have.

Today's example is a proposed Maryland law which will prevent employers from monitoring their employees' social networking sites. I suppose the thought is that employers may find out that employees are gay, or promiscuous, or even critical of their employers, and treat them differently. However, there are a few problems with this.

First, how can this law be enforced? Social networking sites are public. In fact, the whole purpose for most is to put up "look at me" messages and gather attention, so how can you prevent employers from visiting sites which not only allow, but encourage public viewing?

Second, if an employee is actively bad mouthing his employer or the employer's products, then the employer has a right to know, and to request his employee stop. However, under this law, it would be impossible for him to even mention that he knows about such comments.

Even worse, what if an employee violates a nondisclosure agreement or otherwise reveals trade secrets? Will it be illegal for his employers to prosecute this violation as they cannot monitor his social website use? This is just the sort of confusion such attention grabbing laws tend to create. And, most likely, if the law passes, that is if enough politicians want to make headlines from passing the "first ever such law in the US", then the next ten years will be spent passing amendments and other laws to mitigate the legal confusion caused by this law.

It is absurd, but it is a rational outcome of our attention obsessed politicians. When there is no such thing as bad publicity, and the public respects "doing something" over doing the right thing, or doing nothing when principle dictates ( "The Single Greatest Weakness", "What We Deserve", "Who Is To Blame?", "Don't Blame the Politicians", "Doing Something"), this is the only possible outcome.

I don't have time to write now, but want to add two more posts to the list I posted in "Still To Come".

First, I want to reexamine an old idea, one I put forward in "Self-Serving Cynicism and Our Cultural Immaturity", "Legislating By Lying", "The Presumption of Dishonesty", "Lawyers Give Me a Perfect Analogy" (which reminds me a bit of my recent "Two Stray Thoughts") and "Deadly Cynicism". This is the idea that we now accept lying, not just accept it, but expect it, from our leaders, and even encourage them in their lies. I want to look at this trend, ask where it originated, why we put up with it, and what effects it has. As I said, I have written about it already, but I think we would benefit from another examination in more detail.

Second, I want to examine the use of social controls to perform functions we now rely upon government to perform, such as ensuring proper behavior, or encouraging and discouraging behaviors of a certain nature. It is an idea I have examined recently in  "Government Versus Culture - A Forgotten Distinction", but having stumbled across my old post "Social Controls", I think it may be an idea which needs a little more examination.

Addendum: I forgot, my first topic will also involve the habit we developed of allowing for exceptions to our principles, either in the name of pragmatism or expedience. It is a bad habit and either a sign of our principles falling short, or our perception being flawed, as proper principles do not need exceptions. But I shall discuss that either in the essay I describe above, or in a separate essay about pragmatism, exceptions and principles.

I have two ideas that really don't relate to each other, or anything else, but which point out some useful facts, so, forgive me the disjointed post, but I want to share them both.

First, I was thinking about Pearl harbor, and the fact that we had broken the Japanese code, but despite that, did not successfully predict where the Japanese carrier fleet was headed, with disastrous results. However, as we remained quiet about the fact of the broken code, the Japanese assumed their code was safe, got too chatty, and allowed us a singular victory at Midway six months later.

My worry is what would happen today in a similar situation. Would one party or the other attempt to use the failure of Pearl Harbor to score points, and thus give away a useful secret? Or maybe a bureaucratic general would use it to score points, or avoid blame. Maybe some lower level soldier would post it on WikiLeaks, as "we have a right to know". Or the media might get wind of he failure, and would be more interested in informing us than in defending their nation, as the press has decided they are now without a nation.

Or, to be concise, I don't think today we could count on a secret like that staying secret. I recall as skit on Saturday Night Live during the first Gulf War. It was a presidential press conference, and President Bush kept fielding questions such as "What secret, if known by our enemies, would do the most harm?" The sad part is that the skit was not funny, but only because it sounded too much like the real conferences. Between those obsessed with informing us, be they leakers or stateless reporters, or those who want to score points or avoid blame, we have a real problem. Our attitude toward secrecy, information, patriotism and our responsibility to our fellows has changed, and not in a good way.

My second point is completely unrelated.

I was watching television and saw yet another advertisement from a law firm fishing for clients. In this case, certain birth control increased the risk of certain diseases. And my thought was "so what?" Every drug is a poison and a medicine. It increases some risks and decreases others, if it didn't, it would be ineffective. Antibiotics, for example, are poisons. Just look at the name. The trick is finding one that damages the target bacteria or parasite more than it damages us. And that is hardly true of just antibiotics.  All birth control pills change your hormonal balance, and thus change how your body works. So some things are more risky, and some less. It is akin to the Vioxx scare. Yes, it increased the risk of heart problems, but was less likely to cause bleeding issue of aspirin, or gastric problems caused by other NSAIDs. Why this tradeoff should be taken as a sign of guilt is beyond me.

Of course, the lawyers argue the users were not sufficiently informed, but that is laughable. Every drug on earth warns of countless minute risks, including death. It has gotten so bad no one even listens, as the list of risks is just absurd. Anything that was alleged by even a single user is listed. Even doctors have become numb to it to a degree. So how the lawyers believe adding one more item to the laundry list would change behavior is impossible to comprehend.

Then again, lawyers don't really believe it would change behavior, they just have to allege that to shake down another company, destroy commerce a little bit more, make people less safe and less wealthy, all to line their pockets. And worst of all, do it all while claiming to be protecting us and serving a noble purpose. And lawyers wonder why we despise them? ("The Perversion of Liability Law", "The "Right To Sue" As Our Only Right", "Julius Caesar, Elliot Spitzer and Andrew Jackson", "Why a Recession?")

As my schedule has kept me from writing, I have not caught up on all those posts  I promised. However, I actually did complete several, probably more than I usually do on any given "upcoming articles" post.Still, so that I can keep track of what I intend to write, here is an updated list drawn from "Upcoming Posts", with the completed articles removed.

1. Accepting Misfortune: A look at how our unwillingness to accept that bad things happen ruined our government and courts, as well as distorting our outlook on life in general
2. Immigration - I need to really think this through. For several years I have promised to look at the topic (eg. "The Limits Of Immigration Reform"), but never have, at least beyond giving a generic vote of support for open borders. Still, that avoids a lot of procedural questions, as well as how we will work our way from the present state to the ideal, so there is a lot to cover.
3. Administrative law - How civil procedure, admin law and the rest will work in my ideal government, as the "force, theft and fraud" mantra doesn't answer that one so well
4. Indian Reservations - A really thorny question, mainly due to how it has been handled from our founding onward, how will reservations be handled under my ideal state (and what we did wrong all along the way that brought us here)
5. The UN- A comprehensive look at the UN, and international law as a whole, incorporating my earlier thoughts on Geneva ( "Goodbye Geneva", "Why Nuremberg?", "Last Thought on the Topic", "I Was Right", "Civilian Casualties","Guilty Until Proven Guilty", "Somehow The Media Missed This", "Questions Raised by Boumedine", "Confirmation, If It Is True", "A Very Quick Thought", "Not Geneva Again!", "Notes on a Future Post")
6. Intellectual property- All sides of the debate on copyright and patent, as it is a complex issue and one for which I don't claim to yet have an easy answer (see "Some Thoughts on Copyright, IP and the Law")
7. Taxes - Since I am knocking sales taxes, what I think are valid taxes, or sources of revenue in general, incorporating my earlier thoughts on corporate and other taxes ( "The Foolishness of Corporate Taxes", "What we need", "Making Taxes Hurt", "The Benefits of Federalism", "A True Conservative Platform", "Reframing the Debate", "One Sided History", "Minimal Reforms")
8. As mentioned in my recent post "A Brief Thought on Poverty", I need to go back and look, in a comprehensive manner, at the differences between being lower class and being poor. In the US we have a lower class, by definition any nation which does not have absolute income equality will, but we lack what is traditionally considered poverty, at least for the most part. It is an important distinction, and looking at the efforts to blur these lines to keep alive the "War on Poverty" -- along with silly things such as the old "Rural Electrification" laws (which long outlived their usefulness) and other laws aimed at "rural America" (most dating from the 1930's) -- would make an interesting essay.

I doubt I will be posting tonight, but hopefully something new will be posted tomorrow.

In my essays "Doing Something", ""...Then Who Would Do it?"" and elsewhere, I have discussed the tendency we have to turn to the government as the first line of defense against anything we find troubling. Not just every threat to our safety, livelihood and the like, but even simple inconveniences ("Life Is Not Fair - And Trying To Make It So Makes Things Worse") or others behaving in unacceptable ways ("The Right Way", "The Danger Inherent in Banning "Bad Ideas"") elicit requests for new laws and regulations. As I doubt this is going to change in the immediate future, I thought perhaps I could offer up a few thoughts for those who often demand new government action, create a simple set of guidelines by which they could analyze their proposals to see if the problems in question truly rose to the level of needing a new law.

First, as I discussed in "Symmetry and Asymmetry in Government", laws must generally apply equally to everyone. If there is any distinction, it must be justified by the circumstances. Obviously, differences between men and women, adults and children and the like can make a difference in some contexts, but in general, unless they are clearly relevant to the problem being solved, they should not be considered.

The second thing to consider is whether or not the problem is bad enough to require the government get involved. If we ignore trivial laws, such as misdemeanors, then we have to imagine that any law could result in the death of those who do not obey. If an individual is arrested for a felony and fails to comply, they may be killed. Likewise, if they are arrested and then try to leave prison, they will possibly be shot. So we have to imagine that any law we enact carries the death penalty, and ask if the consequences are severe enough to allow such a punishment.

Finally, we should ask if there is some other solution which would not require the government enact a new law. The alternative solution need not be equally efficient or achieve precisely the same results, we simply need to ask if there is an alternative, and then consider the advantages and disadvantages of both.

Let us look at these principles and test them against a few laws, existing and proposed.

For our first effort, we shall start with a pretty obvious one, and a law that has been observed by almost every culture on earth, the prohibition against murder.

Before we begin, let us define murder. Murder is not all killing, and that has also been recognized by every culture since time immemorial. Every culture of which I am aware accepts that some killing is allowable. Killing in self defense, killing while in service of the state's army, killing to save another and so on, all have been allowed under most codes, either explicitly or implicitly. And so such laws have inevitably involved only the killing of another under conditions where such killing is not either mandated by the state or justified by circumstances. (The Maryland common law definition was a little more clear, but not half as interesting, or so I claim.)

Using such a definition, how do murder statutes fare under our analytical plan?

Murder statutes in general are very good at applying symmetrically. With the exception of a few unusual cultures where various classes could murder with impunity, such statutes apply to everyone identically. Granted, killing in state service applies only to military and police, but such avenues are open to all, so it is not as if they form a unique caste. And, in any case, most states monitor both closely to ensure they use their powers only when allowed by law. Not to mention that private citizens have the ability to kill in self defense, defense of others, defense of property and so on, which grants them almost the same powers soldiers and police have, at least under a fairly free state.

Obviously, the murder statutes fare well under our second criterion, as it seems quite just that those who kill might face the death penalty. I doubt anyone but the most hardcore anti-death penalty activist will lose sleep over the possibility that a killer might face deadly force.

And finally, on the front of alternative solutions, there simply aren't any that seem likely to work. Killers, by definition, are those not inclined to observe societal norms, and so the social pressures which tend to work to control some of man's lesser foibles are unlikely to work to restrain a killer. A man willing to violate one of the most basic of his fellows' rights is certainly not going to give into societal disapproval, or at least it seems foolish to rely on all or most killers being open to such pressures, and so the use of the state really seems the best answer to murder.

We could go through all of the violent crimes in the same manner, but doubtless the arguments would be the same, as they differ from murder only in degree. Battery could easily become murder, were the criminal simply a bit more upset. And assault is but a step from battery. Maiming, rape, attempted murder, all are quite similar to one another, differing only in the amount of harm done and the aggravating factors -- and in a few, the intent of the actor -- so it seems likely most of us would agree with using the state to control any of these violent felonies.

So, let us look instead at property crimes. Specifically, let us look at felony theft, and ask if that can be justified under such an analysis.

The first criterion is easily met. Property crimes are always quite symmetrical, as they protect any owner, and ownership is open to all.  The laws are very simple in this regard. Anyone who takes something owned by another shall be prosecuted. There is nothing about it that could be seen as asymmetrical.

The second criteria is where many have issues, but shouldn't. I cannot count how many times in my youth I heard people lament that individuals would be killed over "mere money", and we all know well the "Les Miserables" view of the world, that imagines theft is often justified, and prosecution is actually unjust. However, this neglects a very simple fact. Society exists to protect rights, and foremost among those is property. Without the protection of property, there is very little advantage to joining in a society. The protection of life is valuable, but life is easier to protect on one's own. Flight is very simple. Property, on the other hand, cannot easily be moved, and so to truly protect property, especially property in land, or fixed structures, one needs a society to protect it. And that means that neglecting the protection of property is to undermine the foundation of society. Especially as we are here discussing felony theft, which means the taking of a considerable asset,and so its theft represents a considerable loss. If we choose to simply allow such theft to pass without punishment, we could easily see individuals abandoning society in favor of small vigilante bands. And so the exercise of deadly force against thieves is sensible, as their actions threaten the fabric of society itself.

Actually, there is another argument which is more theoretical, but many libertarians, especially those given to more abstract principles, may find more acceptable. Under this theory, both crimes of violence and crimes against property are treated in an identical way. Rather than view them in terms of just or fair, we ask what it means to violate the rights of another. As society is founded upon the protection of rights, with each of us agreeing to respect the rights of others, in exchange for their respect of our rights, we can view the violation of a right as a breach of the contract, and thus see anyone who violates rights as we would a dangerous wild animal. They no longer are a fellow citizen with rights worthy of protection, or at least respect, but instead a potential threat that has shown itself unwilling to respect rights. That being the case, we have every right to exercise deadly force to eliminate the threat.

In fact, the second may be the better argument, as the first, though still consistent, allows one to offer up allegorical arguments, more nebulously defined threats to social cohesion, and extend police powers far beyond their natural limits. I still stand by both, especially as both effectively rest upon the same basic rationale, but I think the second may be the argument less likely to be distorted and abused.

Now, let us move on to laws of a regulatory nature, let us say minimum wage laws.

The law clearly does meet our first requirement, symmetry, as it applies to all equally. (We will ignore the few exemptions for those earning tips, as well as Congress' exemption of themselves from most labor laws and a few other exceptions.) So the minimum wage passes the first check.

The second requirement is much less clear. I would personally argue that ensuring a minimum wage does not rise to the level of allowing the use of deadly force, but I am sure many, less well inclined toward businessmen, and more obsessed with economic justice and other catch phrases would argue that ensuring a living wage does meet the requirement. Since it is not entirely clear, let us skip this one for now, and come back only if the last test is not conclusive.

Fortunately, the last test is conclusive. The minimum wage may seem essential to its advocates, but there are clearly alternate solutions, not requiring the government. (See "Fairness and the Free Market", "Mistaken Perceptions of the Industrial Age" and "Child Labor and the Industrial Revolution".) First, let us assume one takes a job paying too little. What is the solution? One leaves the job and takes another, no government needed. Or, let us assume one is looking for a job, and finds one paying too little. What is the solution? Don't take it.

The answer here is simple, the employee can easily decide for himself whether or not a job is worth the salary, and then choose whether or not to take it. There is no need for government intervention.

But what if the market has no jobs paying decent wages? Well, first of all, it is possible the employee values himself too highly, and is seeking wages too high for his abilities. On the other hand, maybe he is being offered too little. But if that is the case, then some clever employer will offer him more, trying to make a profit because others are bidding too little. If the market is uniformly underpaying for labor, there is a chance for great profit, and greed alone would ensure wages would be bid up.

Thus, there is no need at all for a minimum wage, or many similar laws.

I could go on, but the post is already running long. Instead, let me leave it at this. The three simple rules above should make it clear whether or not a law serves a valid purpose. If there is another solution, if the law is uneven in application, or if the problem does not merit the use of force, then it should not be. That alone should be enough to let us examine almost every law we encounter.

POSTSCRIPT

My original post had actually applied more stringent rules, asking whether society could survive without the law, examining what the consequences of enacting the law would be and so on. But as such a strict approach clearly stacked the deck in favor of enacting very few laws. So, to avoid charges of bias, I went with these much less stringent requirements, as it is better that people apply some standards to their thoughts on law making, rather than reject all such analysis based upon the appearance of bias in my original post.

Before I begin, let me apologize for posting so little this weekend. I took my son out to the movies yesterday, and spent most of today playing with him, and just found little time to write. Not that playing with him is that unusual. Except for those weekends when his mother takes him, I usually spend my weekends playing with him at least part of each day, but for some reason this weekend I seemed to spend more time than usual, and just could not get around to writing. Hopefully the coming week will allow me more opportunities for writing.

Now, for the subject of my post, or two subjects.

My mother and I had lunch together with my son before the movie, and,a s is usual, despite our widely divergent political views, my mother and I discussed politics and current events. (Actually, for a liberal, she is remarkably intolerant of those who try to tell us what to do for our own good. Of course, it leaves her other views looking even more inconsistent, but I do respect her unwillingness to force people to do the right thing.) One of the topics that came up was the Susan G Komen "run for the cure" held locally, and the Comen foundation's decision to withdraw money from Planned Parenthood, and the subsequent decision to return it. I won't get into the specific conversation, as it is not really relevant, rather I want to discuss two ideas that came to me while having that discussion.

First, I want to talk about the idea of funding, and the fungibility of money. Liberals will often act as if money can be earmarked inside a charity, and thus the group's overall ideology should be of no concern to the donor. In this case, the idea was that, though the donor, or the chairperson of the organization making the grant, opposed Planned Parenthood's stand on abortion, because the money was for mammograms only, the philosophy should not matter. That is a remarkably short sighted, almost absurdly naive position.

The initial problem is that money is fungible, it can be transferred from use to use. And if an outside group is funding mammograms, that frees up money that can then be used elsewhere. In other words, if you fund any activity by an organization, by freeing money that would otherwise be dedicated to that use, you have effectively given funding to any and all of their activities. Thus, it makes no sense to give to a group with which you disagree, even if you only give to one part of the organization^1,2.  I suppose, if you did it as a compromise, accepting the shortcomings of one part of the group because of the greater benefits of another part, it could make sense, but you would still need to be aware, your donation may be earmarked, but it still can effectively support any part of the organization.

The other problem is a little more indirect, but still an issue. Even if the money only went to mammograms, there is nothing that prevents planned parenthood from attempting to proselytize among those getting free mammograms, try to convince those who express uncertainty about pregnancy to get an abortion, or otherwise advance their agenda. By giving them a forum, and also giving them the positive PR that comes from free mammograms, the donations do assist Planned Parenthood in achieving more than the goal of free mammograms, so expressing concern about those donations is perfectly understandable.

Thinking about this made me think about two other issues that came up during my talk with my mother. First, the interesting imbalance in the perception of actions taken by liberals versus those taken by conservatives, at least in the liberal mind. Second, and related, the way liberals choose to describe such choices, and the bizarre double standard they maintain.

The first came up because, while my mother and I were talking, it came up that the amount donated was rather small, as such things go, apparently under a hundred thousand dollars. And so, when discussing this, my mother acted as if it were silly for the donor to be concerned about such a small amount. What struck me was how often people will make such statements, and then never recognize that, if it is silly for the donor to make an issue of the amount, then is it not equally silly for all those protecting the donor's decision to get upset over a trivial amount as well? If the amount is too small to be important, then is that not true in all respects? If the donor should not be concerned about such an amount,t hen shouldn't the recipients be equally unconcerned?

But that is a small double standard compared to the other one that struck me.

When discussing this, many people will argue that this is not a political issue, but an issue of "women's health". As if, by cutting of Planned Parenthood, somehow mammograms would cease to exist. At the very least, they seem to think, as this is a health issue, that the right should have no concern over the ideology of the groups involved. However, the very same groups, when confronted with plans to take tax money to fund abstinence only education, seem to have no problem rising up and expressing their disapproval. In that case, yet another health question does seem to be political, as they disagree with the ideology of those providing the service. Somehow, if the ideology agrees with theirs, then it is just a medical question, but when the ideology does not, then there are more choices available³.

I suppose none of this should surprise me, but I somehow seem to forget from time to time how absolutely blind people can be to their own double standards. Still, it is interesting to look at the strange ways in which such double standards are justified, as these dodges are commonly incorporated into political platforms (especially the "women's health" one), and it is beneficial to learn to expect them, and to be able to quickly debunk the arguments.

--------------------------------------------------------------------------------------------------

1. This reminds me of those who donated to the political wing of the IRA, but not the militant wing, as if money given to one could never reach the other. Of course, most of those making this claim were not being honest, but those who were were quite deluded if they thought no money going to one made it to the other.

2. As I have mentioned before, I dislike funding any group which sues charitable donations to hire lobbyists to get even more of my money. Because of this fungibility, I will not fund any activity by a group with a lobbying arm, as donations to their actual works will free money which could end up in lobbying.

3. We have become so used to blind obedience to doctors that we often forget medical choices are like all choices, a question of trade offs. Every decision has costs and benefits. (In part, our absurd system of paying for everything using insurance makes us forget this -- see "Why Health Insurance Isn't Insurance and Related Topics" and Redefining Insurance... To Actually BE Insurance".) We need to ask in every case if the answer we choose is worth the cost. And we need to recall there is no single "right" answer in health any more than any other area of human endeavor. ("The Right Way", "The Inherent Disappointment of Authoritarianism")

With the recent popularity of the FairTax, it seems sales tax has received a new lease on life, with conservatives, previously not particularly fond of any taxes, becoming noisy boosters for one of the more intrusive and messy types of taxation. Now, i have spent a lot of time talking about the FairTax and its many failings ("An Interesting Analogy, "Why I Dislike the FairTax ", "The Best Argument Against the FairTax ") as well as the many authoritarian assumptions underlying it ( "The FairTax's Liberal Assumptions"), so I won't go into a lengthy analysis of the FairTax here. If it continues to appear in the news, then I may revisit the FairTax again in greater detail, but for now I will leave the FairTax alone, unless it relates directly to our discussion of sales taxes.

I suppose the first place to start is to briefly explain what I consider to be good or bad when it comes to taxation, or, to be more technical, what the purpose of taxation is and what features make for an efficient tax system without too many externalities. (I hate that bit of jargon, but it is easier than saying "negative consequences, unexpected costs or other unforeseen problems." So, for once, I will use a bit of technical jargon as it does have a very clear and useful meaning and saves a lot of words. Or would have, had it not elicited this lengthy aside.)

At least the first element should be easy to answer. The purpose of taxes should not only be obvious, but hopefully something upon which all sides can agree. The primary purpose of taxation is to raise revenues to fund government operations. We may differ on what those operations might be, and some may hope to use taxation to achieve secondary purposes, but I think there is not a political philosophy in existence which sees taxes as serving anything other than the purpose of generating revenue.

However, as soon as we move beyond that very simple purpose, I fear the beliefs about taxation become quite different. Even among those nominally supporting the same end of the spectrum, there is quite a bit of room for disagreement, as can be seen in some of my past debates about the purpose of taxes, and what would make an ideal system ("Truths About Taxation", "A Partial Reply to yt_knight", "The VAT Versus The FairTax", "What we need", "Making Taxes Hurt", "The FairTax's Liberal Assumptions")  That being the case, I know it is unlikely my definition of a good system will match the preconceptions of anyone reading this post, but hopefully I will make my case well enough that, whether they accept my definition or not, readers will understand the reasons for my arguments and, with a little luck, find them to be true.

To keep this simple, I am going to start by using the rules I established in "Truths About Taxation" to define an ideal system of taxation:

1. Minimizes the individual harm done
2. Treats all individuals and all types of income and wealth similarly
3. Does not target specific acts or assets for favorable or punitive treatment
4. Has the lowest total administrative cost per dollar of revenue
5. Taxes only enough to cover needs, not more
6. Produces consistent results

As I said, these may not meet everyone's idea of the best possible system -- fans of progressive taxation, or using the tax system to modify behavior will despise rules #2 and #3 -- but I think I can justify them as we go along, and so, for the moment, let us move along to look at the sales tax itself. When the time comes to support my choice of these rules, I will give them as much support as I can.

So, moving on to the sales tax.

The sales tax is an odd beast as everyone believes they know what it is, yet there are so many variations that everyone's assumptions are different, creating a situation where apparent agreement often masks a welter of dissimilar assumptions. For example, does the tax cover only consumer spending, or are wholesale goods covered too? If only consumer, then are "big box" stores consumer or producer? How do we define the two? What defines a sales transaction? If we include purchases of producers' goods, then do transfers between corporate divisions count as sales? (If so, we are discussing a variety of VAT, in all probability.) Does the tax cover food? Clothing? Used goods? Are transfers in kind covered or only cash sales? Does it cover out of state sales or in state only (for state taxes)? Is the tax paid by an added amount at time of sale, or taken out of the stated price? That is, does the burden of payment fall on the seller or buyer? (Though in both cases, the seller ends up collecting the tax.)  Are services taxed or only goods? If only goods, how are combined goods and services (such as private chef services) handled? If only goods are taxed, and someone is hired to produce a finished product, how is that taxed? Is the entire cost of hiring considered the sale price of the product? Or is part of the fee considered a service? I could go on, but this should make obvious all the variations that exist in sales taxes -- as well as how the sales tax can merge into a form of VAT. When discussing sales taxes it is good to keep these differences in mind, as it seems everyone speaking on the topic assumes the sales tax exists only in the form with which they are familiar, with much resulting confusion.

For our purposes, let us define sales tax in the most general terms possible, using the tax most often thought of as a "sales tax" by the general public, the consumer sales tax, which adds a fixed percentage of the retail price at time of sale to consumer goods -- however defined. We will ignore all the specific details and nuances of this tax for now, dealing with them only as necessary to understand the differing impact of various solutions. For the moment, all we need to understand is that it is a tax which is applied solely to consumer goods and is assessed as a percentage of the sale price¹.

Obviously, there are other variations, taxes which include producers' goods, some VAT systems, which are sales taxes in as much as the tax is applied at sales, and is assessed on the increase in sales price, and other systems. However, as the consumer sales tax is the most common type, and is the version which is advocated -- in a very specific form -- by the FairTax advocates, let us keep our analysis limited tot hat particular tax.

My first objection to the sales tax is unusual in that it is an argument often advanced by liberal critics, yet it is a valid concern. And that concern is that a sales tax is regressive, and extremely regressive. The poor, or rather the lower class, spends almost all of their income on consumer goods, and thus will experience taxation of 100% of their income. On the other hand, much of the middle class saves at least some part of their income, and many have small businesses in which they invest, and thus a portion of their income will remain untaxed. As a result, the tax rate will be quite regressive, with the poor paying the full rate on their income, while many in the upper class will pay less than half the rate, perhaps much less².

There are some schemes which try to ameliorate this regressive nature, such as those which exclude various items designated necessities. This usually means at least foodstuffs are excluded, though some are rather inconsistent even in this regard, excluding some foodstuffs, but not prepared foods. Some exclude clothing as well. Whatever they exclude or do not, it does function to make the sales tax less regressive, in almost the same way a more comprehensive sales tax makes the tax regressive. As the poor spend a large percentage of their income on such necessities, they receive a much larger tax break from this exclusion than those who are more wealthy. Obviously it varies from individual to individual how much money is spent, and on what category, so, once we incorporate these exclusions it varies form individual to individual what percentage of income is taxed via the sales tax. Still, even with exemptions, there is certainly a bias toward those with high incomes and considerable investment,  though considerable exclusions, including food and clothing, may favor the lower and upper classes at the expense of the middle, and especially the lower middle class. Of course, some would argue that encouraging investment and discouraging nonessential spending is a good thing, but we shall discuss using taxes to enforce policy later.

Ignoring the regressive nature of sales taxes, there are still a number of issues, including the question of using taxes to enforce policy, which we just mentioned.

The first issue is a revenue issue. Unlike capitation taxes, property taxes, and even income taxes to a degree, the sales tax is a highly unpredictable source of revenue. Of course during periods of consistent economic conditions, be they prosperous or recessionary, the numbers tend to remain relatively constant, but even then there are large seasonal cycles, including the increase in consumer spending during holiday months, vacation spending during summer months  -- or winter months in some locations -- and the drop of spending for seasonal workers when their jobs dry up. Thus, even in the best of conditions, sales taxes are inconsistent revenue sources. Worse still, they are highly sensitive to not just economic changes, but fears of economic changes. Rumors of a recession can bring on a huge decline in discretionary spending, dropping revenues unexpectedly. Even good news can harm state revenues, for instance a particularly strong stock market can divert money from vacation and luxury spending into investments, reducing sales tax revenues. Sales taxes are also tied to consumer prices, which can be volatile to say the least. Should weak numbers result in a large number of sales, the prices upon which taxes are based can decline quickly, once again causing revenues to drop.

The bigger problem, I believe, is the one I mentioned earlier,t eh use of taxes to enforce policy. Look at those rules I created, and you will see that they are inconsistent with policy driven taxes. be it the ability to deduct mortgage interest, capital gains taxes intended to punish the rich or anti-consumption measures such as sales taxes.

And the sales tax, though it is not explicitly described as such, is an anti-consumption measure. By making consumption more costly, it encourages the reduction of spending for consumer goods. In fact, the FairTax makes of this a virtue, advocating for the ability to encourage savings and investment. However, that is not the purpose of  a tax system. Tax systems are intended to generate revenue. By trying to discourage those actions which bring in revenue, be it using cigarette taxes to discourage smoking or sales taxes to discourage spending, we are fighting against ourselves. of course taxes will slightly discourage the activities taxed, but that is to be worked around, not enhanced. We should find tax rates which produce the best revenue when taking that discouragement into consideration, we do not want to set them even higher to try to stop the activities bringing in revenue.

There are many, no doubt, who will ask why not use taxes to enforce policy? After all, it is only my assertion that taxes should not be used for policy purposes, so what is the harm? And that is a valid question, so allow me to make the case against policy driven taxes in general, and the sales tax as an anti-consumption measure in particular. After that, I will try to wrap things up by looking at the tax concepts I find most feasible, and show why they are so, and why the sales tax is not among them. (As well as make an argument for ignoring all of these in favor of voluntary funding schemes, when the reduced scope of government makes them possible, if it ever does.)

There are any number of ways to encourage or discourage a behavior the government wishes to modify. The most forthright, and most effective, is certainly the explicit law. As most people do not wish to be fined or jailed, this is remarkably effective. Of course, as we see with laws against prostitution, drugs and other behaviors which can be carried on out of the public eye, many times such laws simply force the activity underground, but that is often the best result possible without using an absurd amount of resources.

Explicit laws may work, but they also have several problems. For example, they are subject to judicial review. And while it may work to make teen pregnancy a crime, the courts are unlikely to allow such a law to stand for long.  Even when there is no review, many activities simply seem absurd to ban through the law. To return to our teen pregnancy example again, even if the courts slept through that one, an failed to notice the new law, doubtless many activist groups would mock the politicians enacting such a law tirelessly, and the opposition party would use it to great effect. While many issues may be important to the government, and using explicit laws may work, there is something in us that still sees some matters as outside the real of those things about which we can legislate. It is one of the few hopeful signs I ever see about our state. We still think something are either too small for government, or just not proper subjects for legislation.

And that leaves the state with two choices, social or economic pressure. I discussed both in an incomplete fashion in "The Carrot and the Stick - Or How to Create a Fat, Lazy, Surly Donkey", but let us give them a brief look here.

The government is pretty bad at social pressure. They like to think PSAs and educational campaigns and presidential or congressional commissions and all the rest work, but anyone old enough to recall "Just Say No" -- or the incredibly laughable "cigarette mash" advertisements -- can attest that government's version of peer pressure elicits more laughs than success. It is not just that the government is out of touch with their target audience, or that "message by committee", the default government method, inevitably produces amusingly incompetent approaches, the fact is, if an issue mattered, then individuals would already be advocating it, and if it doesn't matter, then all the government money in the world will not spark interest. So the state either ends up putting out "me too" advertisements making them look a few months behind the curve, or else appear to be taking on issues about which no one cares. It is a formula destined to create laughs or yawns, but not much success.

Which is why bribery is becoming more popular, and tax policy is nothing but a form of bribery, well bribery and fines. When the government wishes to encourage something, the most effective  means falling short of actual laws is to either offer rewards for action, or penalties for inaction. As individuals tend to respond to financial incentives, this is probably the best solution the government has. Of course, given my view of government, I find all such actions invalid, as the few functions I see as valid for the government, all fall within the criminal law, and all these efforts at behavior modification strike me as outside the scope of state action. But, as we are discussing taxes only, for the moment I will act as if such goals and methods were valid, and ask how to make them work best³.

And that is where I argue the sales tax, or any tax, is a bad choice.

Some, reading my discussion of financial incentives might draw the conclusion tax incentives, or penalties, are a good idea. After all, I said financial incentives were the most effective means short of explicit laws, that being the case, why would not tax policy be the best solution for situations where explicit laws are not possible?

The problem is, taxes are not a universal solution, and often have differing impact on different individuals. For example, that $5000 deduction per child is very valuable to people earning a certain amount, but once you earn enough, that deduction becomes trivial. Not to mention those who earn little or nothing, to whom that deduction is meaningless as well. The same applies to deductions or allowances offered for many activities. As many are capped, or allow only a certain percentage, for the poor and the rich, they are irrelevant, and even the middle class seems them offering varying degrees of incentive.

Which brings me back to the sales tax. As I said, in a way the Fair Tax folks are right, it discourages consumption, but only for some. For the poor, it can;t, as they have to spend most or all their income on necessities, and cannot choose to spend less. All the sales tax does is reduce the amount of those necessities they can obtain, or whether there is a small amount left over for luxuries of any kind. Likewise, for the very rich, the added amount is trivial when it comes to small purchases. For large purchases it may act as a slight disincentive, but they can likely avoid that by buying outside the markets covered by the sales tax. In that way it acts like a luxury tax, mainly hurting domestic producers and sellers by pushing business offshore.

The group most effected by the sales tax is the middle class. They must buy necessities like everyone else, and so must pay so much tax to survive. Beyond that, the tax is trivial in some respects, when buying very small items, but it does have an unseen impact by reducing the amount left to spend on other large purchases, luxuries and vacations. The remaining impact depends on the specifics of the tax. If the sales tax is limited in scope, then it would probably serve to favor large purchases being made among those things without tax, such as trips or education, while discouraging taxed purchases, such as homes and boats. (Assuming that was the specific policy.)

The problem here, is that the tax strikes unevenly, is felt quite differently by different people, is an incentive for some, but not for others, especially those who need to try to save, like the poor and lower middle class, as they pay little or no tax. As an incentive, the policy is so muddy in the message it delivers, and so hit or miss in its incidence, it fails to be an effective incentive at all. It ends up costing just as much as a similar policy of explicit fines or incentive payments, but at the same time, its impact is weak and uneven. And thus I would argue it is a poor means to change behavior⁴.

There is another consideration, though it is not an issue now with state sales taxes at 3%, %, even 8%, and that is the issue I discuss in "Symmetry and Asymmetry in Government",  "Misunderstanding Democracy" and "Power and Disorder". When a group feels it is being unfairly singled out by the state, it looses interest in supporting or defending the state. Should sales taxes rise into the mid double digits, as the FairTax suggests, and should they be recognized as regressive, hitting the poor  and lower middle class inordinately, as they must consume all or most of their income to survive, while the more affluent can avoid spending and thus taxes, then it is possible that ideologues might be able to sway those disaffected classes and convince them they have nothing to lose in a sudden change of regime. It sounds absurd, but throw in inflationary pressures, maybe declining employment, and it is not too different from situations which have historically produced unrest in other lands. Just because it is "only a sales tax" doesn't mean it can't happen. The Stamp Act was only a sales tax as well.

======================================================================================

1. There are taxes which are fixed fees, and others which are tied to volume or unit count, such as many state cigarette and alcohol taxes. It is arguable whether or not these are sales taxes. For our purposes, I have defined sales taxes as only those which are assessed as a percentage of the sale price, and so these are not true sales taxes. However, as that is an arguable point, we will look at them as well, when it is relevant to the discussion. (As we will see, these flat fees are often less harmful than sales taxes, though to a degree that depends on the size of the fees and the nature of the goods in question.)

2. It is rather embarrassing to hear FairTax advocates talk about how the FairTax allows you to "choose how much tax to pay" by "choosing how much you spend". Nothing points to an elitist upper class origin more -- and to supporters among college students who do not support themselves -- than the idea that spending is optional. For almost all of the lower class, and even a significant part of the middle class, spending most of their income is called survival and is not optional. Of course, this is a silly argument anyway. As I argued elsewhere ("The FairTax's Liberal Assumptions", "Another Reply to Yt_knight", ""), you could say the same of the income tax, you can choose how much tax you pay by working less or taking a lower paying job. That does not make either tax voluntary, despite the efforts of FairTax sophists.

3. I find the discouraging of consumption particularly absurd, as consumption is the end goal of production. We work so that we can consume. Granted, we need to invest (or save -- which is investing, just indirectly) in order to expand our economy, to improve our conditions and so on, but we can only do so once we have satisfied some wants. And we only want to expand our economy because it satisfies even more wants. With satisfaction of wants being the cornerstone of the economy, it seems counterintuitive to make a policy of stopping people from satisfying wants. The truth is, with a stable economy, once enough wants are satisfied that future consumption of the fruits of investment seem more pleasing than more present consumption, people will save. We do not "save too little" right now because we are short sighted, but because our currency policies make overspending, and borrowing to consume, economically sound concepts. (See "Nation of Debtors", "Living Beyond Their Means " and "To Correct Debra Saunders".)

4. The FairTax, with its prebate, is even worse, as it waters down the disincentive to consume to a degree, while leaving the rest of this discincentive in place, sending mixed messages at an even higher cost, and at the same time making us all comfortable seeing the government as a source of regular monthly payments. But I said I would not take on specific details of the FairTax.

===================================================================

POSTSCRIPT

I know I promised more in this essay than I delivered, I avoided a few topics I said I would discuss and stopped before I reached some other issues. The reason for that is twofold. First, it is late and I wanted to get this posted eventually. Second, I realized I was drifiting far from the original topic, and would do better to save some topics for a more broad survey of the topic of taxes in general, which I will probably try to write soon. I will obviously want to explain and justify my rules for a good tax once again, s well as ask what taxes can and cannot do, and then look at all types of taxes, including my ideas for voluntary taxes, and finally reach some conclusions about where we should head in terms of government sources of revenue.

I was reading an old post, "How Democrats Keep the Poor Poor", when I stumbled across what may be two of the best, most insightful statements I ever made, which, for some reason, I never really followed up with a more complete examination.The first quote was about our welfare system:

The real solution is to treat poor people with respect, to treat them as adults, who can handle their own affairs. Allow private charities to help those who fall on hard times or cannot support themselves, or leave it up to families to help their own. Yes, some may fall through the cracks, but they do now, so there is no guarantee under either system. But returning welfare to charities rather than making it an "entitlement" has the big benefit that voluntary charity is unlikely to become a away of life the way the welfare dole has.

And the second was a very similar thought about minimum wages, safety regulations and the rest:

Beyond that, assume that workers are competent to bargain with their employers, and that if a job is intolerable, people will flee. In short, accept that the market works. Again, there will be some cases where a bad employer thrives for a time, or where an unsafe workplace stays in business for a time, but those things happen now as well, and at least without our stifling laws, the market will grow, making us all wealthier, creating more jobs, and making it much easier to leave bad jobs for better ones.

Now, I have followed up on these in some small way, writing  "Who Is Safer?" and "Worker Safety" on worker safety, as well as, my more gneral examinations in "Utopianism and Disaster", "The Threat of Perfection", "Life Is Not Fair - And Trying To Make It So Makes Things Worse" and, most on point "Government Quackery". However, in each of those, except the final, while I looked at the subject in passing, I missed the main point. Only in "Government Quackery" did I really recognize the issue, but I still feel I did not give it the prominence it deserves, turning instead to explicit failures of government plans, which misses the main point. The only other essay which comes close to understanding the issue is "Who Will Decide" which also comes close to the concept  -- although from a completely different starting point -- then moves swiftly away.

So, let us start with a very basic truth that most plans for reform seem to miss, and which even most political debate seems to overlook, and that is the truth that any given plan, any given system, fails. At some point, people achieve results contrary to those which were intended by themselves or by those who advocate a given system. Sometimes it is simply people "falling through the cracks", other times dishonest individuals exploit weaknesses to their own advantage, and still others the system simply falls apart and heads in unexpected and unintended directions. All systems have these failings, from the free market to the welfare state to socialism to our present system. No system exists without failings, and there is not a system in existence which does not, at some point, create situations which either produce undesirable results, or allow for the system to be exploited. It is just a fact of nature, a truth inherent in all complex systems trying to control volitional beings, there will be times when the system does not produce the desired results.

There is a second truth we also must understand, the first truth is much more evident when we examine short term outcomes. Most systems are designed to produce results over time, and all systems need time for problems to produce recognizable results, for those results to be recognized as such and for the system to respond. Thus, any problem will take time to produce a response. This means the longer the time frame you allow, the fewer the persistent problems you will find, at least problems not inherent in the design of the system. If you look only at the short term, you will find considerably more problems, the shorter the term the greater the number of issues. And this too is true of all systems, as recognition of problems and response always take time, and thus no system can respond instantly. Some systems may respond more quickly than others, but all take time, and all may, in addition, try improper solutions at first. As it may take more than one attempt to resolve a problem, as all systems are also fallible, giving more time allows for only those problems inherent in the system itself to remain.

Both of these ideas are crucial to understanding why the free market is so significant, and why so many criticisms of the market are not incorrect, but simply invalid. You see, many critics of the free market simply point out that the free market allows for certain undesirable situations to exist, perhaps to last for some time, and, when the defenders respond that they will vanish over time, dismiss that response as unfeeling and heartless.

The problem with this idea is that the current system, as well as a more interventionist one, would also allow many of the same problems to exist, and would also take time to respond, and yet that truth is ignored. Or, if not ignored, it is assumed that it is heartless to wait for market forces to improve the safety of a workplace, but it is kind and considerate to wait for a state investigator to notice the lack of safety and then carry out an investigation, prosecution and implementation of a new safety plan. The fact that the second may take just as long as the first -- especially in a strong labor market -- is completely ignored. The only thing that seems to matter is that the second took what is supposed to be positive action and thus shows the government cares.

It is absurd to ask for perfection when we allow for imperfection in our favored system, or to see the time taken to respond to an issue as dangerous in one system and understandable in another. We must recognize that failures happen in all systems, especially short term failures. The best test is to look at what problems are persistent, last even after we allow as much time as possible, as those are the problems inherent in the system itself.

But, if we must look at short term failures, at weaknesses in a system, at things which can go wrong, then the true test would be, not to just point out what can go wrong, but ask whether or not the same problem could occur under other systems as well, and, if so, how each will respond to that issue, how quickly the system will respond, and how effectively, and, finally, the one most forget, what it costs us to get better response times, if the cost of quick response, or even preventing a possible short term error, is worth it, or if the benefit is not worth the price.

I was reading Best of the Web today and noticed a very small error, though it reveals a common, and quite large, underlying error that many people make. In the first essay of the column, Mr. Taranto argues that wages fell because of the addition of women to the work force. He does correct this slightly, but there is still an implicit error in his thinking, and if not his, in many thoughts about labor, that I want to correct.

It is one of the truisms of economics that increasing supply will, other things remaining equal, prices will fall. The reason is obvious, goods are applied to the most urgent needs first, then to the less urgent needs. As people are willing to pay less for the satisfaction of less urgently felt needs, so the highest price paid will be less for each successive use. Goods sued to produce other goods operate in a similar way. The highest bids will be for the most profitable uses, then for less profitable and so on. So prices will drop as more goods enter the market.

There are two problems treating labor in this way.

First, labor does not just add supply, but also demand. Goods generally do not. Allow me to explain. If there is $20 in an economy for burger related needs, and 10 hamburgers, burgers will sell for $2. If the number of burgers double, the quantity of demand is the same, so burgers would have to sell at $1 to clear the market. (This is not completely correct, but close enough for the example.)

Workers, on the other hand, produce goods, and those goods can be sued to exchange for other things. As Lord Say argued, goods trade against goods and supply creates its own demand. So, adding a worker alsoc reates more demand and prices of labor, that is wages, will not fall in direct proportion to the amount of labor.

The other, and bigger, issue is that labor is not a single good, or even a range of goods, it is a vast spectrum of possible goods, including considerations of training, education, commitment, hours worked and so on. Allow me to offer up a few examples.

The traditional example is the one usually used by opponents of open immigration. If you have a relatively underpopulated nation, allowing in a large number of unskilled, or moderately skilled labor will result in a net drop of wages, as the workers will compete with existing low cost labor. On the other hand, more skilled labor will probably not feel that loss, as they will not face competition. (The point being the average drops, while in many categories, there is no impact.)

However, let us imagine a very unusual situation, a nation with a largely unskilled populace, fully employed, which experiences an influx of highly skilled immigrants, bringing with them capital to invest. This would result in a net increase in average wages, and not only would the new workers experience high wages due tot he lack of competition, the demand of creating high income jobs would likely raise wages for low income workers as well.

And that is the problem with thinking of "labor" and "wages". There is no single good called labor, and no "average wages" except on government forms. There are hundreds and thousands of categories of wages which may be somewhat meaningfully compared, but even there the aggregation hides important distinctions. As I argued in "Individual and Aggregate", lumping together data can lead to incorrect conclusions, and this is no different. There is nothing that requires an increase in labor force to decrease wages, under the right circumstances they could rise, or stay the same. Thanks to labor creating its own demand, and the many categories of labor, there is no way to easily predict what will happen when labor increases.

For example, the labor force worldwide today is many times that of 1900 or 1700 or 1500, yet we are immesasurably more wealthy with greater incomes. On the other hand, we now possess much more steel at much lower cost. In other words, economic rules do hold even over such long time spans for economic goods, but not for labor, because labor cannot be treated as a good, at least not when lumped together in an aggregate this way.

POSTSCRIPT

I realize "steel" is also invalid, as there are grades of steel, different sizes and shapes and so on, which can be treated as individual goods. Sometimes even the location of a good can make a difference (as many commodity delivery contracts make clear). Still, it is much more valid to lump together all wheat than to treat all labor as a unit. And, even if we could somehow lump together labor, there remains the fact that labor creates demand, while goods do not.

A few times now I have talked about how frustrating it is to find out that I have bought into nonsensical conventional wisdom. In "An Interesting Discovery", for example, I discussed my embarrassment to discover I had bought into the silly propaganda about England lacking gun injuries, when the truth is quite different. There were other, earlier complaints along the same lines, but as I cannot find them, I will leave it at a single example.

Yesterday, while I was reading an interesting collection of essays entitled "The Military History of Tsarist Russia" (bought because I enjoyed the earlier work of the editor, Frederick Kagan - see "Strange Coincidence"), I can across the essay "The Imperial Army in World War I" by David R Jones. And as soon as I read it, I was stunned. Just as reading Kagan's work on the War f the Third Coalition change dmy thinking on Austerlitz, and made me realize how much  historians accepted Napoleonic propaganda at face value, even two centuries later, reading this essay made me realize how completely I, and everyone I had ever read, had bought into communist propaganda about the events immediately preceding the Russian Revolution.

Jones' contention, and he backs it up quite well, is that the story of the woefully under supplied and criminally unmanaged Russian army is simply false. He points out that between the battle of Tannenburg and "the Great Retreat" of 1915, there were considerable successes not only against the Austrians, pushing them past the Carpathians, but even against the Germans. And, even after the Great Retreat, the Russians managed to hold the Germans and Austrians, establish trench warfare as in the west, train and equip fresh troops, win considerable successes against Turkey in Armenia, Mesopotamia and Persia, and even make a few small gains against the central powers. Even specific issues such as supply, were not only transitory, but also were shared by the other powers. All the powers involved, having planned for a rapid "war of maneuver" had stocked for a three to six month offensive at most, and had not geared up their industrial base at the start of the conflict to produce more, and so all powers suffered form shortages in late 1914. Russia had later shortages as well, mainly due to supply issues and corruption, but by 1917 supply was no longer an issue, at least not until strikes began.

And that is probably why the story of chronic shortages, of soldiers going to the front without ammunition, of starving troops and civilians got such play from the communists and sympathizers. In truth, there were shortages, and logistical problems, but they were exaggerated by the liberals in the duma to get more concessions from the tsar. And so, the public reacted not to real shortages, but to propaganda spread by politicians and, later, crises created by strikes that propaganda inspired. In other words, the communists staged a revolution based, not on real economic inadequacies, but rather on small economic problems exacerbated by propaganda, strikes and xenophobic whispers about the tsarina and conspiracy theories involving Rasputin. But that hardly fits the image the communists wished to project, that of being the righteous liberators saving their fellows from an oppressive monster they later righteously executed. The tsar was hardly a paragon of virtue, and his regime was inefficient and oppressive, but it was hardly what communist propaganda, and subsequent western history which accepted that propaganda, have taught us.

The one question I have is why westerners did not challenge the communist version? I know it was supported by a number poroto-Duranties, those western fellow travelers who visited Russia, or even fought there, and returned to tell the same story the communists put forth. But they could only have gone so far. Likewise, the natural affinity many activist journalists and intellectuals had for communism did not work well enough to hide even the much more embarrassing realities of communism's "brotherhood of all men" not extending to Jews, or the famine in the Ukraine. So, what kept this story from falling apart? Why didn't we realize sooner that the tsar's armies had actually fought a good fight before revolution defeated them?

There are two arguments, one more plausible than the other. The first, and less plausible, is that the communists, having control over all pre-revolution military records as well, simply did not allow historians to see records that contradicted their views, and thus suppressed the story until the fall of communism. And there is some truth to that. It is not a coincidence that a lot of revisionist history of not just communist, but tsarist Russia as well, started after the fall of communism.However, in this case, there is evidence that could not be kept under lock and key. The Hapsburg empire fell apart after World War I, but Germany survived, and Austria and Hungary retained most of the records of the Empire, and so the records of these campaigns from the opposite side, as well as military assessments of their capabilities, intelligence reports and many other sources were available long before communism fell. So it seems unlikely lack of access to archives alone could explain the silence.

More likely, historians accepted the excuse of a lack of records, and maybe the validity of the pro-communist reports, because the conclusions were pleasing to them. It is hard to imagine now, but reading first hand sources from the late teens and early twenties show a real visceral fear of communism in many nations, including the US. There was a reason so many anarchists and communists were deported, why Sacco and Vanzetti made headlines and why the IWW struck fear into many, communism seemed a palpable threat at the time.

And that real fear of communism makes it easier to explain the tendency to accept the incompetence of the tsarist army. After all, if the tsar were competent, his armies capable, his economy mostly sound, then there was no explanation of communist uprising, it could happen anywhere. But, if it was the outcome of a backwards ruler in a distant, primitive land, who mismanaged a war badly and inspired a communist uprising, then it seemed an unlikely event, a once in a lifetime thing, which would be a very comforting thought to those afraid of a local revolution.

And it is for that reason I think there were many who did not bother to look any deeper at the time, and the years immediately afterward, and, having established that story quite firmly, those who followed, for the most part, simply accepted the monolithic opinion. Only once access was granted to previously unavailable information did anyone realize how off base that traditional understanding might have been, and start to look into the issue once again.

Still, though it is understandable why the story survived so long, and it is easy to see why I never thought to question the conventional wisdom, I still find it embarrassing to have been taken in once more by bogus history, and if I thought it would help, I would swear to be more vigilant in the future. But I know, no matter how hard I try, somewhere out there is another bit of false history to which a majority subscribe, and which I incorrectly accept. And so the best I can promise is, when I find my own mistakes, I will make them known to save everyone else from the same mistake.

I have read Peter Huber's Liability a number of times, and have always found it an interesting, and often amusing, look at the absurdities of our system of liability law. (Or the system as it stood in the late 1980's. It has gone downhill since.)However, one thing Huber wrote always troubled me, and that was his contention that caveat emptor may have made sense in an older, less affluent age, but we could easily adopt another assumption and continue to function. Of course, Huber is in favor of contractual assignment of liability (cf "In Praise of Contracts"), so the underlying premise in his mind is simply the catch-all for cases falling through the contract, but I would still argue he is wrong in this one case.

Caveat emptor is a very simple principle. It says, in the simplest terms, if you buy X from me, then all I sell you is X. Any injuries you may suffer are your responsibility. You buy only what the contract explicitly states. So, if I say "You buy this brick", and the brick later crumbles and your house falls down, unless I warranted the brick to hold up for so many days, or to so much weight, you are out of luck.

It was a hard principle, the outcomes could often seem unfair, but it was a logical outgrowth of our contract law. Under contract law, the basic principle was that it created private law between two parties, and that it was not subject to review by the courts, except in a few very specific circumstances (eg contracts contrary to criminal law). Otherwise, the courts would just enforce the contract as written, provided it met the bare minimum requirements of offer, acceptance and consideration. Thus, it made snese to employ the principle of caveat emptor, as the most literal reading of the contract was that it sold just what was named, and nothing more, not even a promise that the good was in usable condition.

In practice, contract laws were never quite this clear cut. From the first courts began to read in guarantees. Merchants who regularly sold goods were assumed to imply the goods they sold were of a specific quality. Likewise, certain categories of goods began to be assumed to have certain implicit promises as well. And property, with a law all its own thanks to holdovers from feudal law, as well as other considerations, carried with it many implied promises as well.

And all of that was before the radical changes took place changing contract law into contorts, and liability law into the liability lottery. 

But I am not concerned here with what is, but what should be, and specifically why caveat emptor is the only practical way to read a written contract.

Logically, there is no difference between a system which assumes an offer to sell X implies no warranty, unless one is spelled out, and one which assumes it implies a warranty of a specific kind, which can be removed through an additional clause. However, there are a few reasons the two systems are not as identical as logic would suggest.

First, and most simply, because it starts the process from which we now suffer, the erosion of contracts. Should we be fortunate enough to move back to fully binding contracts, I would be horrified to adopt as an assumption the belief that contract mean more than they say. Yet that is precisely what the warranty option does, assume a contract implies something it does not say, in other words, already beginning to gut contract law.

Second, and more importantly, we can assume everyone knows contract law, but many people draw up contracts for private sales without knowing contract law. And we should encourage this. The more contract law is used, the less torts will be, and the more rapidly cases can pass through the courts, or avoid court entirely. So contract law should assume those writing know what an average educated soul would know, and no more. And implicit warranties go beyond that, meaning many people may sell more than they intended, when an implied contract is read into the document.

Third, and related to the second, there is one additional problem with such assumptions, and that is that they change over time. What if the implied warranty when I sold it was A, but is now B? Does the law give you implied warranty A or B? OR, to make it more complex, assume you leased X from me, when the implied warranty was A,  it changed to B, and we then extended the lease afterward. Does warranty A or B govern? Could those making such contracts even know? Is it not better and mroe certaint o say they simply sold a good, and whatever warranties explicitly exist in the contract, and nothing more?

And no, those "No warranty express or implied..." clauses do not work as a substitute for caveat emptor. As any liability lawyer will tell, that sort of boilerplate is read out of contracts routinely through a variety of legal legerdemain. In addition, even if it is a valid disclaimer today, the courts of tomorrow may decide otherwise.  (Again, as many businesses have learned to their discomfort.) Thus, the only certain way to protect against expansive liability is to enshrine caveat emptor as the basic principle of contract, anything else bears far too many risks.