A Free-Market Approach to Wolf Restoration

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Environmentalism and free-market economics have long been viewed as being adversarial. The very notion of combining these two ideas seem like nothing more than an oxymoron. This popularly perpetuated stereotype is echoed in the rhetoric of the Green New Deal. Why should conservation efforts not be guided by the signals of profit and loss mechanisms? Better yet, why should conservation efforts be insensitive to incentives and rely solely on legislative fiat and sanctions to enforce such initiatives? It is about time that environmentalism sheds its crunchy -granola image in exchange for more of a pragmatic approach. After all, conservation does entail conserving resources. Any economically conscious actor would consider the limitations on nonrenewable resources. Meaning that economic agents would strive for the more efficient use of resources of limited quantities. Efficient uses of resources tend to be rewarded in free-market economics. Ironically demonstrating how environmental conservation and free-market economics dovetails perfectly to one another.

One of the most notable leaders in market-based environmentalism has been PERC.  Founded in Bozeman, Montana back in 1980 and has been committed to devising economically sound solutions to environmental issues. All the while, respecting private property rights. This research institute flips the conventional notion of environmentalism on its head. Seeking to pursue private solutions to environmental versus automatically resorting to legislation and regulation. One of Terry Anderson’s, a senior fellow at PERC, favorite examples of this was the story of Hank Fisher. A leader in the wolf restoration effort in the 1980s.

Fisher came to an epiphany in 1984, after meeting with a group of local ranchers in a schoolhouse in St, Anthony, Idaho. Fisher assembled the ranchers to hear their concerns regarding wolf reintroduction at the Yellowstone national park.  The consensus was that the majority of the ranchers were concerned about the cost of losing livestock as a result of an increase in the wolf population. It was the response of one of the ranchers that solidified the foundation for Fisher’s market-based solution. One of the ranchers told Fisher: “It’s easy to be a wolf lover. It doesn’t cost anything. It’s the people who own livestock who end up paying for wolves.” Fisher then remembered a livestock compensation plan that was implemented previously in Minnesota. However, the ranchers were incredulous at the fact that they ever would be compensated for their losses.

In the summer of 1987, Fisher was able to test out the concept of a livestock compensation program in Montana. As wolves returned to northwestern Montana, local ranchers lost thousands of dollars’ worth of livestock. Killed by the wolves migrating back to their natural habitat. The indignation of the ranchers was reflected in the flurry of headlines in the local papers. Fisher quickly sent out a fundraising newsletter out to” ..Defenders of Wildlife members in Montana…”. He was able to raise the necessary funds to compensate the ranchers for their losses within 48 hours.  After seeing the success of his first initiative, Fisher decided to continue to implement and maintain rancher compensation programs.  He collaborated with local artist Monte Dolack creating posters depicting what Yellowstone would look like with a restored wolf population. Selling posters to the public for $30.00 apiece.  Since 1987 (reference article was published in 2001), the program has raised $175,000.00 in rancher compensation. The scope of the program has been extended to ranchers in Idaho, Wyoming, Arizona, and New Mexico. Defenders of Wildlife also implemented a program in 1997, compensating for grizzly bear damages. Raising $60,000.00 by 2001.

The story of the environmental efforts of Hank Fisher is an illuminating one. Challenging the conventional wisdom that we need to dispense with free-market economics when pursuing environmental restoration efforts. Both are perfectly compatible with one another. With a little bit of ingenuity and understanding of market incentives, other aspiring pioneers could follow in his footsteps. By doing so create a win-win scenario versus the zero-sum policies that are favored in government-sanctioned penalties and inflexible regulations.   

The 2020 Coin Shortage Explained

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One of the biggest mysteries of 2020 was the change shortage. Why were so many retailers requesting that patrons either use a card or have exact change? Many of us were puzzled by these signs that have become a common fixture of many checkout lines across the nation. What is the explanation for such a monetary phenomenon?  Within my nearly thirty-two years on this planet, I have never been requested by a brick-and-mortar vendor to have exact change. However, in the era of COVID-19, there are many strange things are happening. Never mind the change shortage, a few months back the United States was grappling with a toilet paper shortage. One commodity nearly everyone has taken for granted.

As one could predict, the national coin shortage is related to the COVID-19 pandemic. This calamity of a coin shortage can be linked back to the precautions taken to limit the spread of the virus. The shelter-in-place orders resulted in the shutdown of many stores and restaurants. Resulting in an overall lull in economic activity.  In other words, the cash registers of many retail outlets were not be replenished by circulating cash (include metal coins). Some may surmise that due to the uncertainty of pandemic many people may opt to hold cash balances. Coins generally are circulated throughout the economy through bank deposits and are recirculated back to banking customers through the change provided by retail stores and restaurants. Per the U.S. mint, 83 % of the coin supply is recirculated through stores and third-party coin processors.

The downturn in economic activity during the shutdown left only meager coin reserves in the cash registers of American stores. Meaning that once stores reopened, they would quickly exhaust their coin supplies. This was only compounded by the fact that the banks could not fulfill the retail demand for coins due to fewer customers depositing them. The mint falling behind on coin production left retailers had no other option but to request that customers either pay by a card or exact change.

Privatization of Defense- Central Government. The Transaction Costs Reducer.

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Hat Tip to the Marginal Revolution Blog and the Prior Probability blog for referring me to the referenced article.

The privatization of defense services could hypothetically reduce the occurrence of military conflicts. This is achieved by realigning the incentives to engage in warfare by making the costs more evident to the taxpayer. The direct costs of war are generally obscured due to a lack of clarity of how tax dollars are allocated. Operating as a form of indirect fiscal illusion. Either by design or by the context of the broad and imprecise nature of public expenditures. If a would-be taxpayer could not transfer or distribute the costs of war to the collective contributions of the tax base, frivolous objectives such as “spreading” democracy would be off the table. Military action would shift from being offensive or even preemptive to being purely defensive. Whether defense services should be provided by the local neighborhood watch or a private corporation is another matter.

There is some historical evidence suggesting that eliminating a mechanism for distributing the costs of violent conflicts makes them less apt to transpire. Per a recent paper written by Rosolino  Candela, and Vincent Geloso the French settlers of the  Bay of Fundy had virtually no violent conflicts with the Mi’kmaq tribe. Why?  The European settlers of the 18th century known as, Acaridans, had to directly bare the costs of violent conflicts. Since they received little institutional or financial support from the mother country. Having adopted informal decision-making procedures, living along aside the Mi’kmaq, they lived in a state of near-anarchy (Candelaa & Geloso, 2020, p.3-4). Providing some credence to the inference that a strong central government operates as a mechanism for reducing the transaction costs of armed conflicts. Skewing the incentives of constituents to be more lackadaisical towards the costs of unnecessary military campaigns. Often reducing transaction costs is viewed as being a positive economic development in this case it is not. The evolution of the robust warfare state in the U.S. has amounted to profligate spending, a treacherously hazardous foreign policy, the growth of government, and ample opportunities for rent-seeking.

The Acadians received virtually no support from the homeland. Outside of a “symbolic” tax that was only sporadically collected by officials, they were primarily left to their own devices (Candelaa & Geloso, 2020, p.3). Leaving the settlers able to only rely on local militias to provide the defense of the colony. Leaving the “…costs of using violence would be concentrated on the beneficiaries themselves and could not be passed on to wider groups..” (Candelaa & Geloso, 2020, p.10). Through the colonists and the natives having to fully bare the costs of violent conflict, this was one of several factors that prevented the development of interest groups (Candelaa & Geloso, 2020, p.16). Stifling the potential for wartime profiteering by removing the incentives to fabricate needless conflicts for the sake of drumming up business.

While there may be contextual characteristics that do not apply to modern times. It should be noted that a highly centralized government does have an impact on the frequency of war. Through disbursing the costs across a large number of taxpayers, the true costs of military intervention are obscured. Hence why for the Acadians, the lack of financial and military support from the motherland shifted incentives away from violent forms of conflict resolution. Making it plausible to surmise that having a centralized government is what makes war so easy to initiate. It acts as the middle-man connecting constituents with service providers (the military). Alone, a centralized government reduces the costs of coordinating complex military campaigns.  Never mind the fact that it collectively distributes the costs of the capital required for military conflicts. To truly demonstrate this point, consider the highly extravagant cost of a private citizen purchasing a tank or a submarine. Individually most people could not afford to purchase the instruments of sophisticated warfare. Combing the fact that a central government obscures the direct costs of war and provides the institutions that make the coordination efforts of armed conflict more efficient, it shouldn’t be a mystery why the size and scope of military conflicts have now become global. Providing some firm insights as to why the Acadians preferred the bargaining table to the sword in resolving conflicts with the Mi’kmaq.

Privatizing Defense- Reconnecting the Link Between War and War Time Spending

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The costs and externalities of engaging in military intervention are high. These costs are not limited to merely monetary expenditures. The price is also borne in the loss of life, productivity, civil liberties, economic freedoms, and so on. Historically, countries have long justified war efforts through comprehensive political campaigns. Demonizing the opposing regime and stressing the moral imperative of defeating the adversary. Propaganda campaigns can work wonders, persuading the masses that the armed conflict is a “just” war, but it is not the only variable at play. If the costs of going to war were more direct and salient to the public, constituents would be less apt to approve of military intervention abroad. In the decades since World War II, most of these campaigns have been more about nation-building than actually defending the United States and its allies. If the connection between the cost of war was more linear it would be reasonable to surmise American citizens would be screaming with indignation about the prospect of their tax dollars being used to “spread” democracy.

The question is how do we make the connection between the cost of war and military efforts more conspicuous to the taxpayer? A radical suggestion would be to privatize defense. To some extent, there is a lot of merit to this argument. There are also a lot of well-formulated objections. Any conventional application of Coase’s Theorem would like to view defense as a public service that cannot be provided by private firms. Due to ambiguity regarding property rights and the high transaction costs of providing defense services. The issue of unclear property rights is by far one of the strongest arguments against privatizing the production of defense services. Even as economist Chris Coyne points out in a recent paper, those free-rider problems are inevitable. In Coyne’s example, if missile defense services are provided to a city, one house that has opted out cannot be excluded from protection (Coyne & Goodman, 2019, p. 6). It was maybe inordinate to organize defense efforts on a national scale versus a regional threat. Example being when Russia annexed the Crimean Peninsula. This threat was confined to a specific region of Ukraine versus Russia posing threat to the whole country (Coyne & Goodman, 2019, p.2).

Another flaw in the free-rider argument is even when defense is provided by the government there are still people who receive service without contributing. American citizens who evade taxes still receive the benefits of state-provided defense. The homeless and unemployed who also do not contribute to the tax pool also enjoy the benefits of defense provided by the United States. The problem becomes that free-riders exist regardless if defense is provided by the government or private firm.

All the counterarguments aside, if people could see on a monthly or quarterly basis how much they were spending on foreign wars, they would be less apt to be ambivalent about these military campaigns. This is a fact that is displayed in the ubiquitous Public Choice maxim of dispersed costs and concentrated benefits. No service provided by the government is “free”. This merely an illusion created by the distribution of the cost of government programs and services across many taxpayers. Typically, there is quite a bit of mystery surrounding how tax dollars are allocated. Unlike a private-sector invoice that is itemized, how much, and how it will be specifically used.  Epitomizing the phenomenon of fiscal illusion. Severing the link between government spending and taxation creates confusion. By keeping the taxpayers’ ignorant, various government departments have more fungibility with how tax dollars can be used. Side-stepping any potential for accountability. This applies to all government spending, even defense and military expenditures. By reestablishing this link between war and taxation, every-day citizens would be more apt to question the efficacy of sending the military to a third-world dictatorship to reinvent them as a liberal democracy.

Government officials cannot be trusted to help facilitate the process of reconnecting direct costs of war with the corresponding military campaign. Few congressmen would go along with this policy. On the off-chance, taxpayers did start receiving itemized expenditure reports, who is to say that they will not be falsified. The only viable option would be allowing private firms to provide military-grade defense services to civilians. Effectively allowing for private competition in the provision of defense services. That could include private defense clubs, neighborhood militias, HOA funded auxiliary defense agents, or even larger corporate firms providing similar services. Whether you are picking up a rifle to participate in the neighborhood militia or you are paying a monthly bill for a corporate defense firm, you have skin in the game. Either you are paying with your safety and time or you are paying monetarily. Both contingencies align incentives towards avoiding frivolous conflicts. No one wants to pay exorbitant rates to receive defense services that do not even directly benefit their safety. Nor does anyone want to risk their life over minor conflicts. Objectives such as nation-building or ideological indoctrination would be off the table. Due to the high costs of such endeavors, most people would be much more cautious about engaging in such conflict. Confining most uses of military force for self-defense rather than offensive objectives.

Food Poisoning Ligation: Franke’s, Inc V. Bennett

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Tort law cases involving instances of food poisoning are particularly complex. It can be difficult to pinpoint the specific source of exposure.  Especially as our supply-chain for food distribution has become global and more intricate. In the absence of a standard that requires substantial proof on the behalf of the plaintiffs could very well receive damages from the incorrect party. No less of an injustice than the injured party does not receive adequate compensation. Unfortunately, this leaves the litigant with the burden of proof.  This standard was solidified in the 1941 court decision Franke’s Inc V. Bennett The burden of proof can be an onerous obstacle in retrieve compensation for illness engendered by a restaurateur’s negligence. However, this helps avoid frivolous lawsuits and also ensures that the true offender is the one to compensate the victim.

The seminal case in question to an incident in 1940.  On January 15, 1940, a deputy city clerk for Hot Springs, Arkansas dined at the appellant’s cafeteria for lunch.  The accuser consumed several food items including scallops. The litigant had never eaten scallops before and could not verify if they had an odd flavor. After return to her office at city hall, she became violently ill and was sent home. Upon returning home her illness persisted and she had to be hospitalized. The appellee was treated for her illness and returned to work the following Monday. The physician that examined Bennett diagnosed her condition based upon a list of food items she had consumed in the past several days. Leading to a diagnosis of “ … acute poisoning due to seafood…”.  However, this inference was not based upon a careful analysis of the contents of the plaintiff’s stomach.  As a result of this inconclusive and somewhat rudimentary inference on the part of the doctor,  Bennett decided to pursue $3,000.00 in damages to offset the costs of medical treatment.

Bennett’s claim of consuming deleterious scallops at Franke’s Cafeteria was far from an airtight case. In the absence of precise analysis, how can the source of illness be attributed to the scallops served at the cafeteria?  The plaintiff also ingested a salad, cornbread, carrots, and a slice of cake.  Without definitive proof that the scallops were tainted or unwholesome, how can the treating physician be so sure that his patient’s ailment wasn’t caused by another food or beverage? The veracity of this claim can only be further scrutinized by the fact that Bennet was the only patron to complain of any sickness. The scallops were served to thirty-six people on  January 15th. Failing to rule out the potential of an allergy or other food sensitivity to scallops.  Upon further inspection of the cafeteria’s facilities, no violations could be found. The cafeteria followed all food handling and refrigeration requirements mandated by law.  Demonstrating that even making a circumstantial argument against the establishment based upon unsanitary conditions infeasible. Leading the court to rule:

               

“ We do not think that the mere fact that a person eats food in a restaurant, hotel, cafeteria and therefore becomes ill of itself sufficient to establish liability on the owner, but proof must go further and show that some particular article of food was unwholesome and unfit for human consumption. Otherwise, such a business would be fraught with hazard..”

This is a valid point. Each time someone develops a stomach ache after eating at a restaurant should they be able to sue the owner for damages? If so the potential for innocent eateries being finically liable for damages that were not caused by their establishment is somewhat perverse. Often we are concerned with the rights of victims in instances of Tort Law, what about the right of those being accused? Theoretically, we wouldn’t condemn a man to death row on scant evidence. It stands to reason that we wouldn’t do the same in cases requiring compensation for damages. Any proper form of jurisprudence recognizes the precarious balance of just adjudication in such cases. If we cannot determine if the connection between dining at a restaurant and subsequent illness being anything other than coincidence, then expecting the restaurateur to pay for the plaintiff’s medical bills is tantamount to ruling in favor of frivolous lawsuits. It effectively operates as an implicit form of theft. Being forced to pay restitution for the harm we did not inflict is an injustice. It is arguably equally as unjust as denying a compensation claim when rightfully owed to a victim. If the law does not express this level of reciprocal protection a disservice has been done to all entrepreneurs in the foodservice industry. If the rule of law has been weaponized to function as a wealth extraction mechanism, what incentive is there to open up a restaurant or deli? Especially if any person can claim without ample evidence they contracted food poisoning from your establishment and then expect you to compensate them for their medical expenses.  

Should We Invest In Gold During A Biden Presidency?

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The prospect of a Biden presidency is bringing some pessimism regarding the U.S. Dollar. The investment website, Motley Fool, is suggesting that investments in gold and related stocks could be a wise move during the Biden administration. The article recommends Kirkland Lake Gold as being an excellent stock option. Kirkland is one of the premier gold mining companies with locations in Canada and Australia. Why would an investment website suggest to invest in gold due to Biden winning the presidency? The answer is quite simple. The article pointed to the potential of Biden having a “dovish” monetary policy. As president being more inclined to implement rounds of stimulus spending. Often, stimulus spending is funded by printing more money. Actively debasing the U.S. Dollar, making alternatives such as gold and silver look more attractive.

President Trump was hardly a bastion of fiscal responsibility. It is difficult to recall a president gracing the Oval office over the past three decades that has been. While Biden is centrist at heart, he will succumb to the partisan pressures of the Democratic party. Biden would then implement wide-reaching initiatives that will amount to nothing more than unchecked profligacy. The mounting despondency from the financial sector poses some valuable insights. Nothing in this world is “free” costs dispersed amongst the tax-payers. The prima facie assumption of government services being “free” is false. Even if there is not a direct tax funding a program, that does not mean that the citizens are not indirectly taxed. The government chooses to pay for safety-net programs by printing money. Inflation only serves to diminish the purchasing power of the Dollar. The average-Joe voter then has to contend with higher nominal prices.

We should all hope that the doom and gloom plaguing the current economic landscape is hyperbole. Unfortunately, fiscal conservatism is no longer a focal point of conservativism. Never mind liberals or centrists. Economic policies never operate in isolation. There is always a cascading array of various consequences resulting from a single action. Increased spending tends to lead to inflation. Inflation has an innumerous number of repercussions through the economy. If John Locke was correct about the neutral nature of the quantity of money, investors would be more optimistic regarding the Dollar. Generous benefits programs may sound great on paper. However, what will the long-term consequences entail?

Native Americans Did Believe in Property Rights- Part II: Origins of The Myth

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PART I

The Origins of the Myth

We as humans have the unfortunate propensity for interpreting evidence that in a manner that is congenial to comport with our own beliefs. This problem is particularly rampant in the soft sciences.  In the absence of disciplined restraint and sound methodology, qualitative research is subject to be sullied by our own biases. This serving only to hamper the whole enterprise of conducting an impartial observational analysis. The fields of anthropology and history have not remained immune from the reach of the researcher’s flawed perception. Upon this realization, it becomes woefully evident that our historical perception of Native American culture is inaccurate. Our misconceptions held together with gross misinterpretations of traditional stances on private property and law held by various indigenous tribes.

Often our ideological motives and philosophical ethos skews our understanding of the historical truths of American tribal cultures. One corollary of the erroneous assumption of Native American collectivism has been designating tribal peoples as the “original conservationists” (Anderson, 1996,p. 1) [6]. Typically for political reasons, the pragmatic rationale for many of these historical conservation measures has been understated. Researcher Terry L. Anderson points out the underlying how our skewed image of Native Americans has become politicized. Citation the example of a famous speech given by the Chief of Seattle. In which he stated, “All things are connected like the blood which unites one family”. The speech was not written by the Seattle Chief, but by a script written named Ted Perry. Displaying much of the romanticized imagery that environmentalists wanted to hear (Anderson, 1996, p. 2) [6]. From Anderson’s view, such presentations of Native American culture only served to trivialize “… their rich institutional heritage which encouraged resource conservation..” (Anderson, 1996, p.1) [6].

The myths of highly collectivist property arrangements among Native tribes predates the nascent era of the modern environmentalist movement (late-1960’s/early 1970s). These myths were first promulgated based upon the narrow observations of settlers. Which dates back to the settlers of the great-plain-states who were looking for land that was suitable for agriculture. They extrapolated from their interactions with a few nomadic tribes that all Natives had little regard for property rights due to their lack of interest in “land assets” (GALBRAITH  et al. 2006, p.20) [1]. Generating the fallacy that property rights were a European invention. Completely side-stepping the reciprocal, customary, and informal means of property rights enforcement used by pre-colonial Indians (Benson, 1991, P.45) [7].

The true irony of the mythic image of the collectivistic tribes is that this assumption ignores the communal tendencies of the European settlers in the United States. Pre-colonial American tribes had strongly developed property rights and any communal tendencies were a result of economic necessity (Galbraith et al. 2006, p. 7) [1]. The Plymouth colony of the 1620s experienced declines in productivity brought on by their communal allocation of resources. This free-rider problem was resolved once the colonists began to mimic the “property rights model” of the local natives (Galbraith et al. 2006, p 7) [1im The economic folly of the Massachusetts Bay Colony is seldomly taught in Traditional American history courses. However, this all too often glossed-over the economic reality of colonial Massachusetts was immortalized in the 1959 essay Our First Thanksgiving.

“Our first Thanksgiving should, therefore, be interpreted as an ex­pression of gratitude to God, not so much for the great harvest it­self, as for granting the grateful Pilgrims the perception to grasp and apply the great universal prin­ciple that produced that great har­vest: Each individual is entitled to the fruits of his labor. Prop­erty rights are, therefore, insepa­rable from human rights.” [8].

It is difficult to ascertain whether this obscured fact of history was the result of misinterpretation or ideological motives. It is prudent to not delve too deep into such matters. Nevertheless, it is absurd that property rights are erroneously perceived as a European invention. The utopian ideals of the Puritans did not include the enforcement of property rights. Their quixotic attempt to collectively distribute resources serves as nothing more than a failed forerunner of Communism. Had it not been for the property-oriented values of the indigenous tribes, the pilgrims would not have had much to celebrate.

The popular interpretation of history seems to flat out ignore the communal propensities of the  Massachusetts colonists. This inaccurate depiction of historical fact has provided the substrate for proliferating this fallacy. A fallacy that is deeply embedded in the conventional wisdom of the American psyche. The collectivist propensities of non-Indian settlers were not limited to the pilgrims. For instance, the Spanish Catholic missionaries occupied the southwestern region of the United States in the eighteenth century. These missions were established by the Dominican and Franciscan orders. The missions implement communal economies with an emphasis on “communal behavior and support” (GALBRAITH  et al. 2006, p.7) [1]. The system imposed by the various Catholic mission was at odds with the natives’ property and land ownership rights. The mission system eventually dissolved in the American southwest. After the governor of California decreed in 1834 secularized the mission system, distribution the former mission lands as a private property to the tribes. ” (GALBRAITH  et al. 2006, p.7) [1].

It can be partially assumed that the informal recognition of property rights and law by American tribes has contributed to the false notion of a historical lack of concern for property rights. In most cases, indigenous tribes operated on customary law. Informal law functions on reciprocity and recognition of social norms within the tribe (Benson, 1991, P.44) [7]. Centricity being placed on the focus of compensation for loss of property versus criminal sanctions. Making it more in step with the common law conception of Tort law. Many of these rules were unwritten but acknowledged by tribal members (Benson, 1991, P.45) [7]. Other tactics such as ostracism and banishment of transgressive tribal members also served as informal means of punishment (Benson, 1991, P.50) [7]. More explicitly relevant to the subject of property rights, the informal means under which tribal members historically acquired property is notable. In the absence of formal deeds and title transfer documents, homesteading. This was practiced by agrarian tribes in southern California. An individual takes claim to land through the process of developing it for habitation or production (GALBRAITH  et al. 2006, p.8).

Citations

  1. GALBRAITH, CRAIG S., RODRIGUEZ, CARLOS L., STILES, CURT H. EDITED BY ANDERSON, TERRY L., BENSON, BRUCE L.,  FLANAGAN, THOMAS G. Self-Determination THE OTHER PATH FOR NATIVE AMERICANS (2006). STANFORD UNIVERSITY PRESS. Page 19.
  2. CARPENTER, KRISTEN A. & RILEY, ANGELA R.  Privatizing the Reservation? (2019). The UNIVERSITY OF COLORADO. Pages 13-16, 21.
  3. https://www.cato.org/publications/commentary/mystery-capitalRetrieved November 17th, 2020.
  4. CANBY JR., WILLIAM C. American Indian Law: In a Nutshell 2nd edition. (1989). WEST GROUP PUBLISHING. Pages 19-21.
  5. FERNANDES, EDESIO. The Influence of de Soto’s The Mystery of Capital. (2002). LINCOLN INSTITUTE OF LAND POLICY. Page 6.

6.  Anderson, Terry L. Conservation—Native American Style. PERC Policy Series Issue Number PS-6. (1996). PERC. P. 1-2.

7. Benson, Bruce L. An Evolutionary Contractarian View of Primitive Law: The Institutions and Incentives Arising Under Customary Indian Law. The Review of Austrian Economics. Vol. 5. No.1. (1991). Ludwig Von Mises Institute.

8. http://fee.org/article/our-first-thanksgiving/  retrieved 11/23/2020.

Native Americans Did Believe in Property Rights- Part I: Introduction

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Introduction:

Native American tribes have long been perceived as being historically highly collectivistic and disinterested in the preservation of private property. Few people ever question whether these characterizations of the tribes are even accurate. These perceptions are only perpetuated when North American tribal leaders discuss economic matters at “tribal conferences and congressional hearings” (GALBRAITH et al. 2006, p.19)[1]. However, after a more rigorous assessment of the historical facts, it becomes clear that the image of the communal Indians was nothing more than a myth. Not only did many tribe members possess private property rights, but they also had an informal legal system that secured these claims. Making many of the previous claims of collectivism nothing more than a misconception.

The curious reader may question why the veracity of our understanding of the economic history of American indigenous tribes is so important? After all, the poverty that afflicts most of the reservations in the United States is a contemporary problem. How is reflecting upon the past going to be useful in solving the economic woes of the tribes? The problem becomes that many scholars and policy analysts utilize tribal tradition and customs for governing economic policy on the reservations. One particularly salient example is in the controversy surrounding the privatization of tribal lands. Per Carpenter and Riley (2019) the privatization of tribal lands ignores the historical and cultural perspective of tribal members (p.13) [2]. Following us, a policy prescription would impose an economic course of action few tribes have any interest in (p.16)[2]. Would only serve to destroy the communal tendencies that are common among American tribes (p.21) [2]. Both authors also suggest that privatization would invite the purchase of native lands by nontribal members (p.15). Only operating to exacerbate the present and past economic struggles of American Indians that resulted from the transfer of lands to non-Indians (p.14)[2]. Demonstrating that from the perspective of Carpenter and Riley a policy that deviates from historical collective arrangements will only serve to do more harm than good.

This paper seeks to dispel the myths and fallacies concerning the historical views of Native American property rights. Justifying government intervention in the economic affairs of the tribes based on faulty claims of historical collectivism hold little merit. Beyond the historical accuracy of such claims, there are also profoundly detrimental economic consequences of accepting this false economic history. If we subscribe to Hernando de Soto’s Dead Capital Theory [3] it becomes evident that the situation facing Native tribes is very similar to that of developing nations. The land in Indian country is not being utilized to its fullest capacity. The determination of the best use of such economic assets is constrained by the guardianship relationship between the tribes and the United States government. The genesis of this land trust dynamic being born out of the Dawes Act of 1887, when the federal government first intervened in the distribution of tribal lands (Canby, 1989, p.19-21) [4]. The waters of Indian land allocation has only become more muddied by subsequent amendments and legislation. Placing restrictions on assets that are already at the disposal of the tribes, creating barriers to extracting “surplus value” from what they should rightfully possess (FERNANDES, 2002, p.6) [5].

Citations

  1. GALBRAITH, CRAIG S., RODRIGUEZ, CARLOS L., STILES, CURT H. EDITED BY ANDERSON, TERRY L., BENSON, BRUCE L.,  FLANAGAN, THOMAS G. Self-Determination THE OTHER PATH FOR NATIVE AMERICANS (2006). STANFORD UNIVERSITY PRESS. Page 19.
  2. CARPENTER, KRISTEN A. & RILEY, ANGELA R.  Privatizing the Reservation? (2019). UNIVERSITY OF COLORADO. Pages 13-16, 21.
  3. https://www.cato.org/publications/commentary/mystery-capital. Retrieved November 17th, 2020.
  4. CANBY JR., WILLIAM C. American Indian Law: In a Nutshell 2nd edition. (1989). WEST GROUP PUBLISHING. Pages 19-21.
  5. FERNANDES, EDESIO. The Influence of de Soto’s The Mystery of Capital. (2002). LINCOLN INSTITUTE OF LAND POLICY. Page 6.

Is Fractional Reserve Banking Ethical Part V: Conclusion and Compromise

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Introduction:

The debate over whether Fractional Reserve Banking is ethical to proceed over approximately a decade (the late 1980s/ early 1990s to the early 2000s). Resulting from subsequent papers repudiating the previous claims over the researchers on the other side of the issue. It should be noted that in these series of retaliatory papers that technical arguments were presented in tandem with ethical justifications for or against this practice. For the sake of brevity, I chose to focus on the ethical considerations of the topic. However, this does not exclude a potential technical comparison of Fractional Reserve Banking in the future. 

To any reader who has never thoroughly examined nor given a second thought to Fractional Reserve Banking, I hope reading this series of essays was illuminating. Fractional Reserve Banking is arguably the most prevalent banking system globally. Yet, something that impacts our lives daily we never think to question its inner mechanics let alone whether it is ethical. The ethics of banking extend beyond whether the patrons are benefiting at the expense of someone else, either through easy access to loans or interest payment on savings. There are potential ramifications to the economy. 

Distortions in the credit market are precisely the impetus for business cycle calamities such as the cataclysmic burst of the Housing Bubble in 2007. Providing loans backed up by fiduciary media is nothing more than a house of cards waiting to fall done. Artificially manipulating factors such as prices, interests, and money supply can only facilitate the misallocation of resources. Such indicators operate as unspoken signals to consumers and entrepreneurs. Due to this fact, these distortions create an illusory image of the loan market and naturally economic agents respond accordingly (p.108). A fact that both George Selgin and Lawrence White are too quick to refute and dismiss (p.102). This carries the implications of defrauding the economy as a whole versus being isolated to the bank’s customers. Even if you are the type to limit all your transactions to precious metals or cryptocurrency, it is worthwhile to read up on this topic.

Summary of Compelling Arguments From the Austrian School:

It is difficult to say whether the Free-Bankers or the Austrians are on the right side of the debate. Both camps provided some truly convincing arguments. The Austrian opposition notes how ownership can only legitimately be taken on by one person and Fractional Reserve Bank obfuscates this immutable law of property ownership. From a contractual standpoint, that the agreements between banks and clients in such an argument are illegitimate. Since the terms are not only unclear to the typical layman but are a categorical misrepresentation. Presenting fiduciary media as actual money. The disingenuous nature of this faulty contract is only compounded by the fact that these claims for money are based upon the banknotes that are not back by currency or specie. Attempting to redeem them for actual currency is analogous to using a deed for a boat and attempt to claim ownership of a house. Also that it is a false analogy to argue that any devaluation of present money caused by the issue of fiduciary media is no different than an increase in the supply of a good due to protection or harvesting. 

This is because the increase in the supply of lumber from harvesting more oak trees is derived from legitimate market processes and in-turn does not seek to directly devalue anyone else’s property. Also, that in no way can Fractional Reserve Banking represent the Demonstrated preference of bank clients. Demonstrated preference can only be expressed with one’s property. Fractional Reserve Banking by its very nature disrupts this relationship.

Summary of Compelling Free-Banking Arguments:

The Free-Bankers also bring up some compelling moral defenses in favor of Fractional Reserve Banking. They are even bold enough to directly claim the practice is not fraudulent. Through a banking client electing to accept the terms of service regardless of their understanding, the contract is still valid. It would be one thing if these banks purported to practice 100 percent reserve banking, but function as a Fractional Reserve institution. These contracts are formulated between consenting adults, it would be antithetical to the principle of individual freedom to prohibit such arrangements. The real trouble comes from government interference. One only needs to look at the large array of protections awarded to backs through the FDCI to see the true culprit in shielding unsavory banking practices from insolvency or litigation. Also, the ignorance or the naiveté of the consumer is not a reasonable justification for banning a product or service. Even though the risk of a bank run is present, it is a relatively rare occurrence from a historical standpoint. If faced with a potential bank run the bank can issue an option clause suspending redemption, solving the issue through valid contractual recourse. Speaking of redeeming bank deposits. A customer assumes the risk of not being able to redeem money when they agree to open an FRB account. They assume the risk. In turn, for the opportunity cost of having their liquid money held and the potential risk of a bank run/ insolvency, they receive an interest payment. Overall, patrons must prefer Fractional Reserve systems to 100 percent reserve banking. There have never been any governmental decrees in modern history that all banking must be done via a Fractional Reserve System. Despite its flaws, ultimately, the people prefer being paid interest payments versus having to pay warehousing fees.

Can There Be a Compromise?

There are certain aspects of both arguments that appear to be flawed. The Free-Bankers are too lackadaisical when it comes to distortions in the credit structure enabled by Fractional Reserve Banking. The Austrians to some extent seem too rigid in their interpretation of property ownership. Under many of their arguments likening the practice to a Ponzi scheme. Yet, to be conceptually consistent would not these same economists also take issue with multi-level-marketing? Then again it could also be counter-argued that MLM schemes and Fractional Reserve Banking while present similar confusions, property rights have much greater degree clarity in MLM arraignments.

Back in 2000, the economist Jorg Guido Hulsmann wrote an article in the Independent Review refuting the Fractional Reserve practice of creating “money”. Hulsmann (see page 108) much like his anarcho-capitalist counterparts Hoppe and Block are opposed to government intervention. If FRB is morally and technically flawed how can we address the issue of it short-comings without introducing state involvement? In this twenty-year-old article, Hulsmann presents a summary of points previously made by Hoppe and Block that would alleviate some of the issues relating to the categorical confusion. It should be noted that Hulsmann in that these suggestions for informal rules and norms of banking presume no state involvement in banking. Also, the author details the intimate relationship between the FRB and the government. Going so far as to refer to it as a “handmaiden” of government (p.108). Making it easy to infer that Hulsmann believes that the intertangled marriage between Fractional Reserve Banking and government is an unbreakable bond. However, let’s take these suggested conditions as theoretical and contingent upon a banking system free of regulation. See his suggestions below:

“…Fractional reserve banks would have to use a different language than they commonly use because words such as “deposit” are deceptive. They would have to make it clear that money “deposited” with them is, in fact, a credit of unspecified duration. And the “banknotes” they issue would have to be presented not as money titles but as some sort of very liquid IOUs..”

            “..On the “FR notes,” one would have to find a promissory note of the following type:

 The FR Bank promises the holder of this note to try to redeem it out of its gold reserves. Because FR notes are not 100 percent covered by gold presently in our bank, in case we cannot redeem, the following rules apply. . . .  (p.108)”

Do We Need Laws to Force Us to Wear Masks?

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Ever since the number of COVID-19 cases began to grow in the United States the debate over whether to mandate wearing masks in public has raged on. Frequently devolving into a debate over political ideology rather than a discourse based on hard science. Naturally, those who believe mask-wearing to be an effective precaution against spreading the virus favor compulsory laws enforcing this practice in public. However, could it be possible that people still opt to take precautionary measures even in the absence of fine or other penalties? Better yet, couldn’t owners of private institutions such as stores, restaurants, and entertainment venues implement their preventive measures as conditions of patronizing their establishment? After all, the incentives are present to want to avoid any unnecessary risks and to keep their customers healthy to ensure a steady stream of business in these uncertain times.

In the state of Arizona, the issue of mask-wearing mandates has been left up to the local governments.  Most municipalities have opted to require masks while occupying indoor venues at the risk of facing a hefty fine. Back in June the city of Phoenix purposed a $250.00 for individuals repeatedly refusing to wear a mask. The suburb of Chandler, Arizona imposes a fine of $100.00 or 30 days in jail for mask-related infractions. Residents and visitors in the towns and cities located in Pinal County are not subject to mask requirements but are strongly encouraged to wear masks. One would assume that in these communities that are immune from such restrictions that the image of bare-faced shoppers must be a ubiquitous scene in the local grocery store. Such an assumption would be incorrect.

Even in the absence of formal constraints, most stores require that all customers wear masks. Generally, posting a sign on the front door forewarning prospective patrons of this precondition. Not only are the stores and eateries of the communities of towns such as Maricopa, Casa Grande, and so on filled with mask-wearing customers, but many establishments are taking measures not required by any municipality in the state. Employees are constantly cleaning. The local grocery store has never looked more pristine. Frankly, many of these changes in the cleaning and sanitizing schedules of the local business are long overdue. These shrewd business owners are proactively responding to the potential concerns of their clients. Anticipating that customers may avoid doing business if masks are at their brick-and-mortar location they have elected to require masks. In addition to urging patrons to wear masks, they also are making concentrated efforts to increase sanitation efforts. Even placing markers indicating the presence of six-foot gaps to maintain social distancing. The smell of bleach and other disinfectant products fill the entryway of the grocery stores. The local Walmart is even wiping down and sanitizing the carts! A sight that few would have ever predicted a year ago. All these preventive steps are taken without any laws, penalties, or ordinances. Completely implemented through apolitical channels.  

This micro-level self-governance on the part of local business propitiators and franchisees demonstrates the power of profit and loss mechanisms. Due to the business owners having a stake in the company they own and operate it is in their best interest to put the customers first. If the customers are comfortable, happy, and healthy it will be mutually beneficial for both parties. The customer will continue to obtain the goods and services they need and want. Simultaneously, the stores and restaurants will continue to receive business which will keep them afloat. Establishments that are insensitive to the needs of their customers will invariably see a dip in sales. This would hold even if we were not amid a pandemic. The entrepreneur must adapt to the present climate. That may mean investing in more cleaning supplies and sanctioning mask-wearing requirements for their establishment. Business proprietors who do not respond to customer concerns about the virus will be effectively punished by market forces. Through a sullied reputation, lackluster sales, and even insolvency. While constrained by federal, state, and local laws business owners by their possession of the enterprise still retain an immense amount of authority to create the rules governing their store. Having the ability to formulate the policies that govern the direction of the business enables them to better serve their customers. Displaying how to profit loss mechanisms can direct precautionary measures even in the absence of laws.

Business proprietors responding to these market pressures is an example of polycentric decision-making.  A system where multiple “decision-making units” with some degree of independent action subscribing to the same set of rules. Filtering the development of safety measures through the government attempts to use a one-size-fits-all approach to the pandemic. Whereas, individual shop owners can tailor their precautions to the specific concerns of their regular customers. Versus obtusely applying rules that may not even be effective or pertinent to how COVID-19 is impacting the region. Direct customer input about the absurdity of funneling customer traffic through two entries instead of three, can be an example of ground-level adjustments that can be made through business owner governed safety procedures when compared to those that are government-sanctioned. Avoiding the red tape and lethargic process of passing legislation or town ordinances provides fluidity that is necessary in dynamic times. A fluidity that is lost in the typical overarching and top-down approaches that are generally favored in regulations.  

Those cynical of the arguments that favor market pressure over formal regulation underestimates the power of the invisible hand. In jurisdictions where there are no regulations in forcing mask-wearing store owners not only require masks but are going the extra mile to ensure sanitary conditions for their customers. Most skeptical of the market being able to push such strives towards private solutions to the COVID-19 outbreak tend to cite avarice on the part of business owners. Without formal regulations, most will skimp on investing in extra precautionary measures due to the additional cost of enacting such changes. The willingness to make such changes is what separates a prudent businessperson from a fool.  The long-run profits from investing more in meeting alleviating the concerns of your customers will quickly outpace the minor cost.  Making a refusal to independently adjust to these changes shortsighted.

Pueblo Lands

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Just a fun fact regarding the Pueblo tribe that originally resided in the U.S. Southwest. This tidbit of information is specific to the Pueblos domiciled in New Mexico. The “… lands were acquired under fee under Spanish rule…”. Once the territory of New Mexico was annexed by the United States under the Treaty of Guadalupe Hidalgo (1848) in the aftermath of the Mexican War (p.272). This transferred right to the lands to the tribe versus the United States government holding the legal title.

Unfortunately, the technical aspects of the land own by New Mexican Pueblos are now minimal. As the tribe is presently in a trust relationship with the U.S. Government. See United States V. Sandoval (1913) (p.273). The tribe cannot “alienate their lands without the consent of the United States per United States V. Candelaria (1926) (p.273). Water rights for Pueblo lands are as applied by Winters Rights and are not different ( New Mexico V. Aamodt) from those of any other tribe (p.273).

Side Note: 

I may not be a trained lawyer. However, I am a Classic Liberal. That means I hold individual rights and property ownership in high regard. After all, I am following in the tradition of John Locke, and so on. If we strip away all the social justice rhetoric surrounding the government’s treatment of the tribes, there are a lot of violations of natural property rights. This opinion may not be based on past case precedence, but rather on unified philosophical principles. By the Treaty of Guadalupe, the tribe has legally transferred the right to their lands. While subsequent legislation may subordinate the strength of this previous agreement, did the tribe ever consent to the trust relationship with the United State’s government? From a purely a priori combined with some of the rhetoric surrounding past and present tribal/U.S. relations it would be fair to surmise no.

The legitimacy of the present guardianship dynamic between the New Mexican Pueblo tribe and the United States is suspect at best. Effectively, this arrangement transfers Pueblo lands to the federal government for relocation to the tribe. Many who are not as privy to the philosophical implication of property rights may find this alteration to landownership to be inconsequential or even a mere technicality. Taking such a superficial stance on this issue undermines property rights. Rightfully attained property should not be transferred to another party including the government without consent. This issue somewhat mirrors the overextension of civil asset forfeiture in cases of narcotic sales or instances of eminent domain. There may be laws on the books that provided legal justification for such actions. However, it is morally or philosophically justifiable? Could these laws be legitimate due to the fact they are unjust? Depending on your disposition towards property rights the answer can be a resounding no. Through this tacit acceptance of law equating moral correctness, we accept many unjust laws as being legitimate. This in turn transforms the Bureau of Indian Affairs into an institution that is more of an imposition than a facilitator of tribal rights. Inverting property rights, thereby shifting it from a negative right to a positive right. The BIA had the potential to operate in a manner that served to legitimately uphold tribal property rights. Like more bureaucratic departments within the government, it managed to make a bad situation worse. Instead of taking on the role of a property rights arbitrator between Indians and non-Indians, it became a property rights dispensary. Creating a perverse dynamic in which there is an inference that the Pueblos no longer own the land. When it was historically transferred to them by treaty. If this is true then the government has no business managing the land at all. Unless their property rights are being infringed upon. For example, non-Indians encroaching upon their water rights. There is a profound categorical confusion in attempting to protect property rights by first violating them. Making it appear as if it more of the pretext for circumventing Native property rights than defending them.

Maximum Age to Vote

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Last year, a debate formed around the issue of lowering the voting age to sixteen in the United States. While few have quibbled over the minimum age to be eligible to vote, even few people have ever considered creating an age ceiling for voter eligibility. Younger voters and older voters suffer from the same problems when voting for candidates and policies. They both have distorted incentives. Which have been warped by a lack of skin in the game. If you do not own property or own property but are not meaningfully contributing to the tax pool your you are effectively insulated from the consequences of taxation. This has the potential of voters electing candidates and policies that advocate for profligate spending.

Some may argue that seniors have a right to vote on policies that directly impact them such as social security. Especially considering they have rightfully paid into these entitlement programs their entire lives.  However, this perspective does not consider the facts Baby Boomers are collecting far more than what they have paid into these programs. Due to the vast number of Baby Boomers collecting and their lengthier life expectancy when compared to previous generations. Two variables were not considered when Social Security was first established in the 1930s. Effectively creating an intergenerational transfer of debate and inflation to be borne by subsequent generations. In many ways, this distortion in incentives is more dangerous than that of younger voter blocs. At least they will someday have to contend with the consequences of such policies. The intergenerational transfer of entitlement programs and publicly funded pensions has to be one of the most salient examples of fiscal illusion. Shifting payment to the children and grandchildren of the beneficiaries effectively severs the connection between spending and taxation.

This is not to say that senior citizens do not possess the facilities for sound judgment. What incentive do they have to support fiscally responsible policies? Very little. Ultimately, they will not be the ones picking up the bill. This sheds light upon the land ownership requirement for voter eligibility implemented earlier on in American history. If you are not subjected to taxation you are going to be less mindful of economic matters afflicting the country. This criticism is notably aimed at college students who can vote but do not meaningfully contribute to the tax pool. Elderly citizens are in a similar situation. Most no longer work or only work part-time. Yet, they collect large sums of money collected in the form of government allocated benefits. Naturally, if you are making meager sums of money, you are going to be relatively insensitive to the levying higher taxes on the upper-income brackets. Even if such targeted taxation would result in less investment in the U.S. economy. Then again if you are already retired, why would this be alarming?

If an individual is receiving publicly funded benefits later in life they are shield from having to pay for these services. They are also disconnected from the adverse ramifications of this vast re-distribution of resources. Considering the lack of sensitivity to the consequences, this makes this voter demographic a prime candidate for manipulation by political pressure groups. Lobbying organizations that advocate on the behalf of seniors such as AARP understand that Social Security and Medicare are both powerful bargaining chips. The scintillating spark to ignite the indignation and ire of senior voters. Not to mention acknowledge that it is the secret weapon in mobilizing elderly voters to become devout participants in the political process. Few demographics are as steadfast regarding political participation than seniors. Groups such as AARP attempt to align the incentives of seniors towards voting for an elected official that is left-of-center. Due to their historical congeniality towards entitlement programs. Fostering a decades-long coalition between the left and seniors’ advocacy groups. Typically, promoting fear-mongering surrounding the potential of right-wing politicians eliminating treasured entitlement programs. Most of these claims are either highly speculative or hyperbolic. Due to the fact to alienating your most loyal demographic of voters would be political suicide. The threat of losing the senior vote will keep even the most vehement budget-hawk on their toes. The myth of Republicans being willing to commit political suicide remains strong. Leading these groups to skew the voting of incentives of seniors towards less fiscally responsible policies and candidates.

Individual votes are indeed inconsequential in elections. It’s more the overall aggregate voting pattern of a specific voter bloc that is significant. The key is to pander to the sensibilities of your targeted demographic. Either through factual discourse or the spread of misinformation. There are so many strategic groups gunning for the senior voting bloc, that unless one is well-versed in political science it would be difficult to distinguish these attempts at manipulating voting behavior from well-intentioned advocacy. Unfortunately, there is quite a bit of overlap between the two. Only confusing matters. It is important to remember that someone other than seniors stands to benefit from advocating for generous entitlement programs through increased job security. That is the administrators operating these departments that manage programs such as social security. Those employed by AARP benefit from having a cause to advocate. It is not pure beneficence these organized bodies push for increasing allocations for entitlement programs. I believe that most seniors still have the cognitive capacity to navigate these waters. Why should they have to?  If you worked your entire life, raise kids, etc. why still grapple with constantly being manipulated by the invested interests in Washington?  From the standpoint of mental health, it may also be advantageous to implement a voting age limit.

If those entering their golden years have an iron-clasp on their entitlement benefits at what age should they cease to be eligible to vote? This answer is quite simple. As soon as an individual is old enough to qualify for Social Security. Presumably once a person reaches retirement age they will opt to receive these benefits. Meaning they no longer have a stake in supporting fiscal responsible policies. To remedy the incentive problem, I would be willing to compromise with the following contingency. If a senior citizen would like to retain the right to vote they should forfeit the ability to collect Social Security. While they may not completely have skin in the game in they no longer generate taxable income, their incentives structure has been completely compromised by a boundless array of publicly funded entitlements. Once you start to accept these benefits and begin to expect them, you have already sold your vote to advocacy organizations, bureaucrats, and opportunistic politicians.  Making relinquishment of voting rights a fair trade-off if one is looking to receive social security.

Tocqueville on The South and Slavery

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Some of the keenest observations made by Alexis De Tocqueville in Democracy in America were made in his comparisons between the agrarian South and industrialized north. Tocqueville’s characterization of the two regions of the new American republic was so powerful they still passively influence regional stereotypes even in the modern era. The northern eastern United States is presented as a bustling hub for commerce and productivity. The south being caricatured as being rural, lackadaisical, underdeveloped, and board-line primitive. This may have been somewhat true in the 19th century. However, to hold such a view as being accurate today would be a gross demonstration of ignorance. Not too much it would require drastically underestimate the economic potential of cities such as prosperous Atlanta, Georgia, or the buzzing tourist town of Nashville.

In the nascent period of American history, southern states weren’t luring northern away from  Boston with low taxes and warm weather. The South was still primarily reliant on agriculture to fuel its economy. As we all know most of the labor was done by slaves. Tocqueville goes so far to point to the use of slaves in the south being the core differentiating attribute between the North and the South (p. 408).  Why? The practice of slavery in the south influenced many aspects of southern culture at the time. The absence of the practice in the north also helped shape the industrialized economy and culture of New England. Where the Weberian Protestant work ethic was very much salient. Through possessing a steadfast and unwavering focus on commerce the north ended up outpacing the south economically and technologically. Due to the lack of industrialization, much of the southern United States was less apt to become urbanized. However, considering the large plots of land required for agriculture lack of infrastructure and urbanization is understandable.

Farming is certainly a labor-intensive vocation. Requiring years of dedication spending engaging in hours of back-breaking working daily. How could we say that southerners of the 1800s did not possess a strong work ethic? The typical plantation owner did not do the work themselves. They had their slaves sweat and toil to produce the crops they sold. Making labor a necessity of the less fortunate. As ascribed by Tocqueville this subordination of work not only would be indicative of the luxuries of “idle men” (p. 407) but a more pervasive attitude towards labor. Relegating work to being only acceptable for the poor or slaves, it implies those above a specific status should not work. Especially when men of money have much more entertaining pursuits to indulge in. Such as hunting, gambling, socializing, womanizing, participating in local politics, etc. Drawing a sharp contrast with the self-made tycoons of the industrialized northeast. Where wealth was more of the byproduct of enterprising wit than old money or traditional social arrangements. Almost expressing a distant desire to return to the days of the monarchy. Where the slaving owning elites would either serve as the ruling class. Their slaves would be nothing more than captive constituents Analogous to the serfs of medieval. However, while the serfs were owned by lords only be being tied to the land and insurmountable debts. In the humid countryside of 19th century Georgia, the plantation owner possessed the land and the workers.   

Alexis De Tocqueville did point out that slave owners advocated for the continuance of the institution for the sake of profits. But rather to maintain their aristocratic lifestyles. To many unacquainted with the economics of slavery, this may come as a bit of shock. Tocqueville flat out declares slavery less efficient than free labor. A view is also expressed in the book The Real Lincoln by economist Thomas DiLorenzo. Tocqueville citing that the observation that paid workers tend to work faster than slaves (P.406). This being a core driving force of any economy. What Mr. Tocqueville is implying that the slave owners could not possibly be solely concerned about profits. If they were they would have switched over to paid labor. Due to the increase in efficiency and decreased production costs (food, room/board, and clothing for the slaves). In contrast, the profit-centric northern capitalists would see this transition as a no-brainer and a strategic shift in production methods. This would require the southern elites to become more involved in managing the process. Rather than have administrative and managerial matters handled by slaves that have proven themselves capable of such higher-level tasks. Hence, foiling the regal lifestyle fulfilled with entitlement, unearned honor, and leisure.

The Long White Beard Fallacy

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Introduction:

There are few fallacies as prevalent as equating age with wisdom. This false assumption is predicated on the belief that age tends to correlate with the accumulation of life experiences. Conventional wisdom would dictate that a prudent mind would be able to formulate deep insights based upon these plentiful experiences.  However, this presumes that the individual of advancing age is capable of shrewd judgment. Much like another demographic of people, some older people are not.  This error in thinking has been enshrined in the mythical image of a sagacious prophet or philosopher. A Socratic or an Aristotelian figure radiating the mystique of lost ancient knowledge. While imagery plays a powerful role in our perception, picturing every individual with a long white beard as being wise is an illusion. Simply confuses correlation with causation. The reality reduces the saying of being “another year older and another year wiser” to an empty statement.

Believing that every older individual has amassed a stockpile of knowledge ignores several prerequisites that make an individual inclined to become a wise person.  These characteristics include intellectual curiosity, the ability to learn from experiences, and the capacity for sound reasoning. Without these attributes it doesn’t matter if a person is twenty-five or ninety-five, they cannot be wise! To credulously accept conventional wisdom without any forethought makes an individual nothing more than a passive fool. To only continue to do so for decades on end is antithetical to wisdom. It is quintessentially spending an entire lifetime relying on lazy thinking, which will not lead to acquiring any knowledge. Claiming that such an individual is wise or knowledgeable irrespective of their chronological age is borderline criminal.

Intellectual Curiosity:

Encapsulated in the words of the wisest man among the ancient Athenians, “The unexamined life is not worth living”. Arguably one of the most cited quotes in Western Philosophy conveys a lot of the nature of knowledge and wisdom. If one is not inclined to pursue the knowledge they cannot become wise. This is regardless of how many years they have spent living on this planet. Most true knowledge generally needs to be pursued, not passively obtained. The thought process of an individual content with accepting the superficial appearance of the world is not one who is going to explore ideas or the nature of the universe. Rather have their beliefs bequeathed to them.  Versus actively discriminating between two choices based on acquired knowledge. To merely accept the status quo for decades on end without any deeper contemplation is the opposite of being wise. This person has only spent their life regurgitating the ideas that have been inculcated into them since childhood. Instead of thoughtfully engaging with ideas to acquire knowledge.

Spending a lifetime staring at the surface deludes people into thinking they understand how the world works. Creating the erroneous belief that they can easily formulate solutions to problems or have a firm grasp of the nature of reality. Unfortunately, they have only been gazing at shadow puppets on a cave wall for all these years. Attempting to derive a complete understanding from such an inadequate foundation is impossible. Further substantiating the importance of having a thirst for knowledge to achieve the coveted status of a wise person.  A wise person does not succumb to the illusion of having the complete picture when all that is available are thin silhouettes. They have a firm understanding of the limitations of knowledge and acknowledge that learning is a continual process, not a destination. They echo the sentiment of the Socratic profession of ignorance keeps themselves open to accepting new information. Through remaining humble and reminding ourselves that there are severe limitations on our breadth of knowledge we allow ourselves to broaden our horizons.  If we assume that due to our age we automatically have a thorough understanding of the nature of the world, we are only fooling ourselves.  Such self-deception does not amount to wisdom.

The Ability to Learn from Experiences:

It is easy to assume that because we lived through an experience we truly have a strong comprehension of how to handle it if it reoccurs in the future. Once again, this is an attribute that is tantamount to self-depiction. Making matters only worse, our elders feel so confident in their abilities to draw meaningful inferences from these anecdotes they firmly distribute this advice to younger generations. Creating personal allegories that become imperative that younger folks learn from. However, how are these sage individuals so sure they have pin-pointed the precise source of the issue? Narrowing it down to one salient detail is an oversimplification of a complex situation. There could be multiple issues resulting in the problem at hand.  The specific contextual details of the current issue may differ just enough from the situation experienced by the older individual that their remedy may not be applicable. Dismally, even after all of these years, they have never been able to accurately determine the source of the problem. But have spent the past number years under the false impression that they know the correct course of action. People have the unfortunate propensity to conflate and transpose details that lead them astray. Rendering the solution to being ineffective. Attributing the issue to a salient detail rather than the true cause of the issue. A confusion that can lead a litany of personal fables and longwinded tales resulting in faulty advice.

It should also be noted that if an individual lacks intellectual curiosity, the aptitude of them ever getting down to the heart of a problem is slim. The capacity to learn from experiences is an attribute that dovetails to tightly with intellectual curiosity.  Those of an inquisitive nature are much more likely to weigh all the variables and then cautiously attempt to conclude. Resulting in sound retrospective analysis. While those accepting a crude and rudimentary version of the truth are prone to devise a solution from incomplete information and half-baked premises and reasoning. When examining experience and only accounting for an incomplete depiction or inaccurate assumptions about the scenario, it is impossible to learn from that experience.

Capacity for Sound Reasoning:

You can possess the learning capacity, applying information, and drive to acquire knowledge. None of this will make you wise if your thinking is plighted with biases and fallacies. To have all of the information but no means of interpreting it essentially makes this knowledge useless. What good is information if my interpretation of it is clouded by my prejudices. Capacity for sound reasoning is so integrally related to learning from experiences, it could be argued that without sober reasoning skills we would not be able to draw meaningful lessons from our past experiences. Odds are we would again resort to spouting the convention wisdom specific to our generation. Following the crowd does not lead you to the truth. Conforming for the sake of conforming is nothing more than a flaw in reasoning. Cemented and immortalized in the appeal to popularity fallacy. Popular consensus can lead us down some dark and treacherous roads. One only needs to be reminded of Nazi Germany to witness the grisly ultimate consequences of this fallacy. A genuinely wise individual would be able to recognize the danger in mindless acquiescence. Versus firmly leaning on the thoughtless cliché of referring to “back in my day”. However, times have drastically changed since the youth of well-meaning elderly folks.  Espousing outdated platitudes for fifty years ago (that most likely were even incorrect back then) is not equal to disseminating wisdom.

Assuming that advanced age automatically is equal to wisdom presents another fallacy in reasoning in its own right. That is the appeal to authority fallacy.  Utilizing age as an indicator of wisdom is setting that up as a social signaling mechanism. We hold an authoritative reverence for the advice provided by an elderly person, even though that advice could be flawed. We are allowing the variable of age to obscure our better judgment.  If we truly thought about it, only a small minority of people under the age of sixty-five are truly wise.  Do these individuals all of a sudden alter their habits and adopt a proclivity for sound reasoning magically after reaching this arbitrary age of retirement? No. Odds are as we get older we tend to become more rigid in our thinking and set in our ways. This may not be true of all individuals, but it does tend to be true for most people.

Public Schools, Condoms, and Parental Rights

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Sex Education curriculum has remained a topic of fierce debate in American public schools over the past several decades. Especially controversial, initiatives where schools distribute condoms to students without the consent of the parents. The schools believe they are providing a public service through dispensing prophylactics to students who may not access to such precautions otherwise. Parents with more of a conservative disposition feel that through providing contraceptives to their children the schools are attempting to undermine the values of the student’s household. Any impartial observer free of any ideological inclinations would see sound logic in either premise. School administrators have good intentions. The concerned parents have sound moral concerns. Despite whether their concerns are originating from religious convictions or pragmatic qualms about encouraging sexual activities among teenagers.

How does American law view the issue of distributing condoms in public schools? It would be reasonable to assume that schools funded with tax dollars should not be overtly promoting partisan values. Through providing condoms to students school officials could be implicitly be condoning pre-marital sex. Which may conflict with the religious beliefs some the parents wish to instill in their children. This dynamic of sex education in public schools presents an important question, where do the rights of the parents come in? These parents who take offense to such programs are effectively having their tax dollars utilized to fund initiatives that they find to be immoral. Their children can participate without any notification to the parents or the written expression of consent. That’s truly where the issue becomes problematic. Unfortunately, the law does not see eye to eye with the concerns of socially conservative parents.

One case that examined whether distributing condoms to students without prior parental consent was unconstitutional was Curtis V. School Committee of Falmouth (1995). In this scenario, a school nurse dispensed condoms to every student in school grades seven through twelve. Then a group of concerned parents challenged this action on the part of the school stating that they have the right to be notified. Also, asserting that parental consent should also be obtained before the school providing condoms to students (P. 431). The court countered this claim by suggesting that state action only violates “parental liberty” only when it is “coercive or compulsory”. That distributing condoms in such a fashion was neither due to students not being required to accept them. Therefore, it does not circumvent the authority of the parent. The ligating party found this premise to be false, arguing that this action was coercive and compulsory. Due to this fact, these contraceptives were being provided in public schools that have compulsory attendance requirements (P.431).

The Massachusetts Justices found little validity in these repudiations and ruled against the parents. The Justices acknowledging that providing condoms to students was a non-medical service. However, they found that there was no Constitutional precedence for requiring parental consent or an option to opt-out. Also, did not find this compulsory in any context. Proceeded to then state that parents do not have the right to “tailor public school education” (P.432).

Whether you are personally in favor of sex education or not it is difficult to not be troubled by this verdict on the part of the Massachusetts Justices. This court decision gives deference to the authority of the public school system over that of the digression of parents. It is difficult to justify such an overreach. This is a prime example of the structural apparatus of the law bulldozering over the rights of the parent. Especially when it would have required little in the way of time and resources for the school to issue permission slips. It perplexing how your child needs a permission slip to go to a museum, but not to receive a condom. Shouldn’t the school have the permission of the parents in either situation? Schools intend to educate children. Sex education is in of itself is one thing. However, distributing condoms takes on another tone. Through directly providing condoms to students without parental consent the school has gone too far. The parent does have the right to object or want to shelter their child from such realities. This may not be the most prudent or realistic approach, however, that is irrelevant. Unless a parent is abusing or neglecting their child, they have a right to raise their child as they see fit. Public schools being appendages of the government do not have the right to interfere with the child-rearing process. This topic provides greater insight into why parents are turning to the unschooling movement in droves (even before the pandemic).

Extracurricular Activities: Legal Right or A Privilege

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Is the ability for students to participate in extracurricular activities a
right or a privilege? Many young people mistakenly believe that it is a right.However, in the eyes of the law, it is a conditional privilege. Much to the chagrin of hyperbolic teenagers. School districts reserve the right to make satisfactory academic performance a contingency for participation in interscholastic sports. However, there was one aspiring student-athlete inTexas bold enough to challenge this assertion. Resulting in the ruling of Spring Branch I.S.D V. Stamos. Needless to say, the court’s verdict did not
favor the underachieving student-athlete.

Continue reading “Extracurricular Activities: Legal Right or A Privilege”

Craft Beer and Creative Destruction

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Millennials are quite frequently criticized by older generations for a litany of various reasons. Some of these grievances vary from a  weak work ethic to having an unwarranted sense of entitlement. Many of these claims are squarely qualitative making it possible that many of these observations are distorted by bias. Since millennials have entered adulthood there have been some interesting shifts in consumer preferences. These characteristics of the Millennial generation can be more objectively measure through tracking sales.

Over the past decade articles reading “ How Millennials are killing ……. Industry” has proliferated throughout the internet. Millennials have chastised for being the death knell for industries ranging from napkins to chain-restaurants. Come on folks, was the food at Applebee’s ever any good in the first place?  All joking aside, this is truly a fascinating phenomenon.  One sector where the departure from traditional sensibilities has been the most pronounced is in beer. Yes, Millennials are trading up to craft beer slowly making the ubiquitous backyard barbeque with a cooler filled with Budweiser cans a relic of yesteryear.

Naturally, there are some sour grapes on the part of Gen-Xers and Baby boomers who are fans of the American adjunct-lager. The unprecedented growth of the craft beer industry coinciding with the late 2000’s early 2010s is not an accident. This is the timeframe in which many Millennials had reached the legal drinking age. Even as recent as 2019 the projected numbers for the growth of the industry have been looking strong.  In 2018, the craft beer market was valued at $108,912 million and was projected to mushroom to $186,590 million by 2025. Unfortunately, the advent of the COVID-19 pandemic has dampened someof the previously projected growth. It estimated that the pandemic has cut overall craft beer sales by approximately 20 percent.

Virus or not, odds are the established mainstay craft brewers with national followings like Dogfish Head, Sam Adams, Sierra Nevada, Stone, Rogue, etc. will weather the storm. Its more likely the regional and local favorites are the companies that are barely hanging on for dear life. The fears of macro breweries and their devoted fan base concerning the rise of craft beer epitomizes the process of creative destruction. An economic concept first devised by Austrian economist Joseph Schumpeter. This concept isn’t isolated to the shift in consumer preferences towards craft beer, but also the other industries millennials are “killing”. Creative destruction can be loosely described as the process of innovation in the market driving out previous products, services, and production methods into obsolesce. Therefore, these developments can fail the less innovative firms in the industry. When Schumpeter first synthesized the conceptual bones of the process he was referring to increases in productive efficiency (p.81-83).  

The production of craft beer if anything is far less efficient than the production of a standard adjunct-lager. Rather, the craft beer example is a different manifestation of creative destruction. Cost-efficiency and are no longer the name of the game. Consumers prefer more flavorful beer are willing to pay a premium for it. Due to this sway in consumer preferences, making hyper-efficient and economical beer is starting to become antiquated. Consumers are starting to become savvier when it comes to the intricacies of the brewing process. They are well versed in the subtleties and flavor nuisances in different hop varieties. The contemporary beer aficionado is looking for a beer that pushes the very boundaries of the definition of beer. Relishing the possibility of obtaining a bottle of the Sam Adams’Utopias beer. Clocking in at a staggering 28 percent alcohol by volume and aged in ex-cognac barrels paralleling a vintage port more than a beer. Demonstrating the dynamic essence of capitalistic markets, to quote Schumpeter :

“Capitalism, then, is by nature a form or method of economic change and not only never is but never can be stationary. And this evolutionary character of the capitalist process is not merely due to the fact that economic life goes on in a social and natural environment that changes and by its change alters the data of economic action (Page 82).”

These innovations are merely an evolution of how we perceive beer. The efforts of craft breweries not only gives us a break from the monotony of drinking Coors Light but expands what was a previously narrow beverage category. Millennial beer drinkers have spoken in the democratic process of market exchange. They don’t want to drink the same beer their dad drank. If the bigger breweries do not adapt they will continue to lose business.  

Not so fast! It would be hasty to assume that millennials and their love of fancy beer are going to be the death of Miller, Coors, Pabst, and Budweiser. These companies and brands survived prohibition, surely, they have an ace up their sleeve. Especially considering they have considerably more capital and resources to invest in the brewing process than the smaller firms. They have found a way to continue to do what they do best and enter the craft beer segment of the market. One early attempt of bigger beer to get in on the craft beer action was in 1995 with the introduction of the wheat ale Blue Moon to their brand portfolio. Back in the mid-1990s, most Millennials were in Elementary School or Junior High School. The craft beer boom of the 1990s was minor in comparison to the current growth in the market. Other attempts of the big guys attempting to craft some suitable alternatives to craft beer have come in the forms of Michelob Amber Bock and Shock Top.

The current trend in big beer thwarting the present wave of artisanal creative destruction has been buying out existing craft breweries. As the old saying goes if you can’t beat them, join them. The phases of acquisitions began back in the early 2010s. The first notable craft beer acquisition by big beer was  AB InBev’s acquisition of  Illinois-based Goose Island back in 2011 for $38.8 Million. The acquisitions only continued throughout the decade. It started to be commonplace for big beer conglomerates to shell out millions of dollars to buy out established craft brewers. In all honesty, this was a very shrewd move on the part of big beer. Why? It is much more efficient to purchase an established brand that produces a good product and has a following. Versus spending millions more on R&D, marketing, packaging design, etc. 

It should be noted that this has been met with some backlash from craft beer consumers. Some IPA imbibers viewing these companies as “selling out” acting like their favorite underground hardcore band just inked a record deal with Atlantic Records. Ethical opinions aside, strategically this move makes good business sense for both parties. The big guys easily slide into the craft beer game and the owners of the bought-out brewery can either retire or pursue other, business interests, or get hired on an employee (the benefit is it can be less stressful than running your own business). Not every small-scale beer entrepreneur is celebrating the prospect of an acquisition. Veteran craft breweries Sam Adams and Dogfish Head completed a $128 million merger in May 2019. It can be strongly suggested that this merger took place partly to resist either company from being acquired by one of the macro beer conglomerates. After having read a few books written by DFH founder Sam Calagione it becomes quite clear he wouldn’t be one to sell his business. Displaying the fact there are hold outs. However, as the market becomes more concentrated will more craft brewers have to form alliances similar to that of  Sam Adams and DFH to stay competitive? Only time will tell. But if it wasn’t for the tides of the Schumpeterian gales constantly altering the dynamics of the domestic beer market this wouldn’t even be a concern. On the other hand, if it wasn’t for creative destruction we would all still be drinking the same beer favored by our grandfathers.

Bootleggers and Baptists: Part XI: Workplace Diversity

Diversity awareness programs on their surface appear to be noble endeavors designed to provide equal opportunity employment to historically disadvantaged groups.  Over the years, there has been some controversy over the conclusive impact and application of workplace diversity programs. Due to claims of only marginal success in increasing the diversity of the workforce. One major shift has been to couple diversity with “inclusion”, having a diverse workforce is not enough. The company now needs to also provide a welcoming environment.  This is a profoundly difficult task considering the subjective evaluations of what is defined as “welcoming” may vary wildly depending upon the perspective of the individual employee. There is a growing prevalence of what is known as “diversity fatigue”. Many managers and H.R. personnel succumb to the stress of attempting to fulfill lofty and unstandardized goals.  Making the achieving the goals of diversity and inclusion an ever-present uphill battle. Especially with the hyper-dynamic and ever-changing trends in what is deemed as being politically correct by the intellectual upper crust.

The move for diversity for its very sake is not without adverse consequences. Beyond merely making aimless strides towards an arbitrary and idealistic goal. If mismanaged minority employees may feel alienated or there may be an increase in the incidence of conflicts between employees. Two downsides are often not accounted for in the application of diversity programs. Neglecting these variables not only determines the purported objectives of diversity programs but the inevitable flaws of human nature.  The old expression “… you can bring a horse to water, but you can’t make him drink…” comes to mind. Prejudice cannot be eradicated by the edict of corporate policy nor by the stroke of a lawmaker’s pen. Freewill and personal perception have a massive role in fostering and maintain prejudice. A naively wide-eyed and idealistic diversity awareness program provided by an employer will not inculcate the virtue of tolerance into their employees. These are conclusions that the individual must independently arrive at deep introspection.

These lofty expectations mirror the Holier-than-thou virtue signally exposited by contemporary Progressives. Modern Progressive has firm ideological roots dating back to the early 20th century. A careful examination of history will lead any thoughtful observer incredulous of the true aims of the diversity movement. Many of the moral objectives of the Progressive Era were nothing more than circuitous means of rent-seeking. Making the whole notion of workplace diversity truly about diversity dubious at best. Few employees ever question how their employer benefits from promoting diversity programs. A business enterprise exists to provide a product or service not to proliferate the virtues of tolerance. What do they stand to gain through attempting to cultivate a culture of hyper-tolerance?

What emerges from this situation is a potential example of  Bootleggers and Baptist coalition.  An internal coalition between the human resources department and upper-management. Typically, the individual representing the moral argument for a diverse workplace is the “Diversity Ambassador”.  A role within the company that carries quite a bit of prestige, yet how this position direct benefits day-to-day operations is questionable at best. Even when employees who are crucial to daily business are laid-off the Diversity Ambassador gets to keep his job.  Although such a role is nothing more than a luxury. This actor is undoubtedly our Baptist due to his incessant persistence in exalting the values of diversity and inclusion. His rhetoric comes just short of mirroring a political propaganda campaign. Boldly asserting that everyone possesses some degree of prejudice or implicit bias. His obtuse repudiations make countering his claims (regardless of the accuracy of his claims)  a futile endeavor. Below details a scenario witnessed by the author that demonstrates the zero-sum nature of the accusatory discourse of the typical Diversity Ambassador:

Diversity Ambassador:

“ I have conducted this exercise for over twenty years and not once has anyone ever mentioned that I was black. I told you all to list the inferences you can make from just looking at me. No one even mentioned the most obvious characteristic of me. I am black. Why is this? None of you have followed my instructions! Why?!

Audience Member (Attempting to answer his question):

“ Because none of us see color.”

Diversity Ambassador:

“ Don’t ever tell a diversity and inclusion coach that you don’t see color!!”

The above conversation between a corporate Diversity Ambassador and an hourly employee exhibits the perverse quiddity of this wanton advocating for diversity. This is not the tone of a man who wants to educate, but rather who wishes to indoctrinate. Pedagogically and condescendingly force-feeding us the moral imperative of admitting our own biases. Versus attempting to foster understanding or attempting to provide us with the genuine precepts for being more tolerant. The man was simply describing our sins without truly prescribing a means of reconciling them. Paralleling the fervor of an Evangelical preacher, we can do no right. We must fully accept that we are in the wrong with no hope of ever being right. Presenting a situation where the participant can only lose. Generating such a compelling moral narrative for the imperative to proselytize the virtue of diversity that it also doubles as an impenetrable smoke-screen that insulates the company from accusations of discrimination.

The Bootleggers in this dynamic are the individuals in upper-management.  There are two main benefits of this variety of moral rent-seeking are deflecting the possibility of having a hostile work environment and social currency for appearing to be forward-looking. Over the years the United States has become quite a litigious society. Considering the increased sensitivity towards various minority groups, the opportunities for discrimination lawsuits have only become expanded. Providing a sizable incentive for those at the helm of the company to avoid any transgressions against their employees that could be viewed as discriminating in nature. By painting the opposite picture, even if this image is illusory, diverts, or weakens claims of discrimination. Not only does promoting diversity and inclusion have monetary incentives, but it also fosters a positive image for the company. It creates the facade of being open, progressive, modern, and may lead to the company to earn accolades for their culture. All of which will benefit the company and make the jobs of the CEO, CFO, etc. more secure. The reputation of the company for inclusive will attract talented young professionals that will only add value to the organization. One only needs to look at the example of Google to see how company image matters when it comes to acquiring skilled employees. Work culture almost operates as a form of non-monetary compensation. It is another variable that may sway top-notch young professionals towards one company versus another. Merely operating to the benefit of those in the top-tiers of management.

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Gonzales V. Raich- Medical Marijuana and Federalism

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Introduction:

 

When medical marijuana was first legalized back in 1996 it presented a bit of a conflict for law enforcement. Even though Marijuana could be prescribed for medical purposes in California, it was still a banned substance under federal law.  Twenty-four years later Cannabis remains prohibited under federal law remaining a Schedule I drug.  Under this classification, a drug is deemed as having no medicinal value and a high potential for abuse. Even though medical Marijuana is presently legal in 33 states. The conflict between state law and federal law in the sphere of regulating Cannabis has created a plethora of issues. Among these issues have been inconsistent rulings on the behalf of the Supreme Court. At times striking verdicts that circumvented state authority and gave deference to the jurisdiction of the federal government. At best, these rules are Constitutionally questionable.

 

One particularly noteworthy example of this confusion of jurisdiction transpired on August 15th, 2002. Angel Raich and Diane Monson, two card-carrying medical Marijuana patients, were subjected to a raid by the DEA and the local sheriff’s office. Despite the fact their Marijuana consumption and cultivation were legal under state law “..federal agents seized and destroyed all six of … Cannabis plants..” on the property. Unfortunately for the respondents, the Supreme Court did not rule in favor of their case, Gonzales V. Raich (2005). The court found that congressional authority under the Controlled Substances Act (21 U.S.C. 801) superseded the Compassionate Care Act passed at the state level. Why would the court side with federal authorities on this matter? This incorrect judgment by the Supreme Court is possibly rooted in a misapplication of the Commerce Clause. This clause on the Constitution grants Congress the authority to regulate intrastate trade. It is perplexing that the Supreme Court would find the parameters of this congressional function to be so malleable that it could be extended to a medical plant cultivated solely for personal use. Effectively allowing federal agencies under the egis of congressional law to interfere with the affairs of California.

 

Legal scholar Randy E. Barnett found that the Supreme Court had misapplied the Commerce Clause in this case. Due to the court’s loose definition of economic activity. It can even be argued that they also misinterpreted the past cases cited in their decision. United States V. Lopez (1995)limits the substantial effects doctrine to intrastate activities that are economic in nature” (P.5). Meaning that Congress would have had the authority to intervene in the matter of medical Marijuana cultivation if it stood to impact the national economy. Here’s where the Supreme Court engages in the aerobatic feat of fitting non-economic activities into the model of economic conduct. Analogous to fit the square block into the proverbial round hole. Through applying the Larger Regulatory Scheme Doctrine the court was able to loosely define  Raich and Monson’s conduct as “economic”. Utilizing what Barnett refers to as a “fungible goods rationale”, essentially inferring that the production of marijuana influences the national supply of the commodity (p.7). Aside from merely grasping at straws with this determination it completely ignores the purpose of the complaints growing marijuana in the first place, relief from chronic medical conditions. In light of the opioid epidemic would it be fair to confiscate legally prescribed Vicodin tablets due to this medication having the potential of being illegally sold on the black market? No. However, Vicodin also isn’t illegal at the federal level. Leaving open possible speculation that this application of law overtly discriminates against medical Marijuana.

 

The ruling in Gonzales V. Raich demonstrates an inconsistent stance on striking down the use of the Commerce Clause by federal authorities to unjustly meddle in state matters. In the two cases cited by the court United States V. Lopez (1995) and United States v. Morrison (2000) it was held that the Commerce Clause was not applicable due to the non-economic nature of both cases. If an individual were to examine the context of Gonzales V. Raich it would be easy to see that it too is not enforceable under the Commerce Clause. Rather it was an example of gross abuse of power that is not even Constitutional allocated to federal agencies.

 

 

United States V. Lopez (1995)

 

Back in the early 1990s 12th grader, Alfonzo Lopez was charged with bringing a concealed handgun to school. He was initially charged under Texas law and a day later the charges were dropped.  Subsequently was charged by federal authorities for violating the Gun-Free School Zones Act of 1990.  Lopez was found guilty on federal charges and was sentenced to six months in prison. Federal authorities citing the Commerce Clause as their justification for intervention. The appeal on this case did end up reaching the Supreme Court where it was ruled unconstitutional for Lopez to be charged under the Gun-Free School Zones Act.

 

Per Oyez it was ruled:

Yes. The possession of a gun in a local school zone is not an economic activity that might, through repetition elsewhere, have a substantial effect on interstate commerce. The law is a criminal statute that has nothing to do with “commerce” or any sort of economic activity.

 

It is profoundly confusing that this case was cited in Gonzales V. Raich, yet the general principle did not seem to transfer to from United States V. Lopez. Much how it is a gargantuan leap to assume that gun possession in a school zone would automatically lead to distribution in intrastate economic activity. It is equally faulty to assume that the production of Marijuana for medical purposes is overly economic. If there is not any concrete evidence that either Monson or Raich had an intent to resell their prescribed Cannabis, then the “economic” argument seems to falter. Similarly, in the Lopez case, the economic argument is at best grasping for straws. Unless there was solid evidence that Lopez was planning to rob a bank after school, it is hard to say that the federal authorities were upholding the stability of intrastate commerce.

United States V. Morrison (2000)

 

In 1994, two male students attending Virginia Polytechnic Institute ( now known as Virginia Tech) raped a female student. Then in 1995 the female student file a complaint under Virginia Tech’s sexual assault policy. One of the male students was immediately suspended for two semesters and the other was able to go on with impunity. When the student who was punished sought an appeal and his punishment was found to be “excessive” and was “set aside”. The female student did end up unenrolling from Virginia Tech. Then subsequently sued both the school and the two males students under the Violence Against Women Act of 1994. A federal law designed to curtail violence targeted at women. It was ruled that utilizing the Commerce Claus to enforce the VAWA was unconstitutional. While abhorrent, violence against women does not disrupt interstate commerce. In terms of delivering justice in this case of disturbing sexual violence that falls upon the commonwealth of Virginia.

 

It is important to note that Justice Rehnquist who delivered the majority opinion did not tacitly condone the actions of these two men. Rather, he was attempting to uphold the proper application of federalism.

[i]f the allegations here are true, no civilized system of justice could fail to provide [Brzonkala] a remedy for the conduct of…Morrison. But under our federal system, that remedy must be provided by the Commonwealth of Virginia, and not by the United States.”

 

The Morrison and Lopez cases only make the ruling in Gonzales V. Raich more dubious. If we can allow the states to regulate non-economic violent crime why cannot we do the same for non-violent drug laws? The lengths the court went to frame Monson and Raich’s cultivation of Marijuana as economic and therefore require federal intervention defies reason.  Also, gives credence to professor Barnett’s stance that this case was a devasting blow to federalism in our legal system. Potentially washing away the gains made in the Lopez and Morrison cases. Who gets hurt by such fallacious judgments by the Supreme Court? Medical Marijuana patients who are grappling with a multitude of various debilitating conditions. However, fortunately, the tide does seem to be turning as far as Marijuana is concerned. After all, years later public opinion has come around for not only medical use of Cannabis but also recreational use. Medical use is presently legal in 33 states and recreational use is legal in 11 states plus Washington D.C. That in of itself could be viewed as a larger long-term win for federalism. The lingering potential for the federal government to usurp functions that should be within the state’s power still exists. Only time can tell if on a later date the federal authorities opt to intervene in the seasoned recreational market of a state like Colorado or Washington.

 

Also, please see click here to see the story of Angel Raich.

 

 

 

 

 

 

 

 

Substance over Style

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Just a random thought. As I have gotten older I have begun to realize how you arrive at your answer is more important than what your answer is.

Anyone can get lucky with incidentally contriving a profound insight. However, your method of arriving at such a conclusion cannot be the byproduct of chance.

Rather, it would be the byproduct of sounding thinking. Replicating the feat will eliminate the potential it was a happenstance fluke.