Bootleggers & Baptists: XL- Joe Rogan: Team Spotify v. The Medical Establishment

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INTRODUCTION:

Veteran stand-up comedian, mixed-martial arts commentator, and podcaster; Joe Rogan has come under fire for promoting COVID-19 misinformation. Business Insider lists six examples of Rogan proliferating misinformation about COVID-19 within the past two years. Arguably the proverbial “straw-that-broke-the-camel’s-back” was last month (episode # 1757)when Rogan had a controversial virologist, Dr. Robert Malone, on as a guest. Prompting 270 medical experts to send an open letter to Spotify to address the inaccurate information disseminated through Rogan’s podcast. The letter expressed: “Spotify has a responsibility to mitigate the spread of misinformation on its platform, though the company presently has no misinformation policy..”.

However, is this statement even true? Do platforms have a responsibility (legally or morally) to moderate and suppress factually incorrect content? Even though Spotify is a Swedish-based company, this rhetoric parallels the talking points of the Section 230 debate in the United States. Section 230, in most instances, shields service providers from liability for the media generated by content producers. This amendment of the Communications Act of 1934 (230 falls under the Communications Decency Act of 1996). Section 230 states :

‘….‘(c) PROTECTION FOR ‘GOOD SAMARITAN’ BLOCKING AND SCREENING OF OFFENSIVE MATERIAL.— ‘‘(1) TREATMENT OF PUBLISHER OR SPEAKER.—No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider. ‘‘(2) CIVIL LIABILITY.—No provider or user of an interactive computer service shall be held liable on account of— ‘‘(A) any action voluntarily taken in good faith to restrict access to or availability of material that the provider or user considers to be obscene, lewd, lascivious, filthy, excessively violent, harassing, or otherwise objectionable, whether or not such material is constitutionally protected; or ‘‘(B) any action taken to enable or make available to information content providers or others the technical means to restrict access to material described in paragraph (1)….” (p.84).

This subsection of Section 230 could easily extend to streaming services. Spotify exercises no editorial discretion and merely provides the tools to content creators to distribute music and podcasts. ****Ethically, there are free speech concerns regarding social pressure to moderate and censor content. While the First Amendment only protects citizens from government censorship, it is evident that Spotify is not troubled by the content produced on Joe Rogan’s podcast. If Spotify takes any action, it would be due to public scrutiny.

BOOTLEGGERS AND BAPTISTS:

The outcry for Spotify to address the JRE podcast’s proliferation of misinformation may not have manifested in a formal policy proposal, but there are still individuals that stand to benefit. Making the JRE controversy a perfect scenario for a Bootleggers and Baptist (1983) coalition dynamic. One subset of the coalition acting as the public face presented the moral argument for Spotify acting against Joe Rogan. Quietly, lurking in the background, are the callous beneficiaries hoping their ulterior motives are not recognized. 

The Baptists in this scenario are the experts that drafted the open letter to Spotify and other notable public health professionals that have vocally expressed condemnation of Rogan’s commentary on the pandemic. One of these renowned crusaders is Dr. Katrine Wallace of the University of Illinois, who catastrophically describes Rogan as “a menace to public health,” particularly for espousing anti-vaccine rhetoric”. Whether or not you find this statement hyperbolic or false, it still conveys an ethical concern for the influence of Rogan’s podcast influence on public health. Therefore, making Wallace and like-minded professionals Baptists. Although, there is the potential that Wallace is a Dual-Role Actor, simultaneously being concerned about public health and seeing an opportunity to raise her public profile. After all, she is a blogger.

There are two categories of Bootleggers that operate as silent beneficiaries in this scenario. The first group is the other Podcasters that distribute their content through Spotify. If the JRE podcast becomes removed from Spotify or suffers other forms of sanctions, that would mean less competition for Tim Ferriss. The second category of Bootleggers would be the medical establishment. Not to treat this faction as an amorphous blob, considering it is a collective consortium of various people, organizations, and businesses, it would be nearly impossible to identify all the potential players in the subset of the anti-JRE coalition. The vast networks of the medical establishment are so pervasive it has even been referred to as the Medical-Industrial Complex, paralleling the concept of the Military-Industrial Complex.

There are a lot of individuals that stand to profit from keeping the status quo intact. Any professional possessing heterodox perspectives stand potentially disrupt the current public consensus resulting in fewer profits for pharmaceutical companies and other appurtenant facets of the industry. Over the past couple of years, there has been an ongoing assault on expert consensus. In a world of “alternative facts, the gap has continued to widen between popular opinion and professional consensus. Few things can be threatening as a credentialed professional who holds positions that go against the grain of the establishment. These individuals appeal to a public that is disillusioned and skeptical of expertise. The medical establishment aimed to reclaim its throne by targeting influential voices that have contrary views. In the hopes that people will stop patronizing herbalists and reading articles written by Robert Malone. When persuasion is ineffective, censorship becomes the preferred mechanism. 

POTENTIAL SOLUTION?:

The problem remains of how do we distinguish fact from fiction? Is it Dr. Malone or the medical establishment that is being dishonest? The average American citizen lacks the knowledge, time, and resources to effectively qualify the claims of either faction in the COVID debate. This situation parallels the phenomenon of rational ignorance examined in Public Choice Theory; deference to experts and public figures is cost-effective to the average layman. No need to read dozens of medical journals filled with opaque jargon. When there are have several sets of experts with competing opinions whom do you listen to? It is possible to find an expert in any field that can confirm our priors.

One brilliant suggestion comes from UCF professor and scholar Enrique Guerra-Pujol, who suggests we should utilize prediction markets to assess the veracity of conspiracy theories. In any decision-making process, we are grappling with the fact that no one can have all the information. As stated in the Hayekian Knowledge Problem; information is naturally dispersed, meaning effective top-down decision-making is impossible. If we could hypothetically remedy this by creating an incentive-based mechanism that can aggregate all perspectives on a given topic we will have a better (not perfect) outcome. By including the vaccine skeptics rather than excluding them, they become part of the validation process. When we look at range-voting in jury trials it becomes quite apparent that even including erroneous perspectives does not drastically impact the overall outcome.

Perhaps instead of capitulating to public pressure to remove all of Joe Rogan’s “COVID episodes, Spotify could run a user poll or a modified prediction market (to avoid the ire of SEC and CFTC) to get the listener feedback on the veracity of the content of these episodes. Instead of removing the episodes, if deemed to be inaccurate, Spotify should merely place disclaimers.

****Correction- The 230 immunity argument does not hold up for two reasons:

  1. Spotify does exercise editorial discretion.
  2. Spotify may satisfy the legal definition of a publisher.

Prisoner’s Dilemmas: XI – DACA and Labor Shortages

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DACA (Deferred Action for Childhood Arrivalsis a controversial immigration initiative from the Obama administration. Implemented in 2012, it extended deferred action (“…administrative relief from deportation..”) to undocumented immigrants that came into the United States as children, albeit the following criteria:

“…To be eligible for DACA, applicants must meet several eligibility requirements such as: have entered the United States before their 16th birthday, be currently in school, a high school graduate or be honorably discharged from the military, be under 31 years of age, and not have been convicted of a felony, significant misdemeanor, or otherwise pose a threat to national security….”

migration.org/glossary/daca

However, this Obama-era policy has proven to be quite contentious, especially considering the nativist proclivities of the Trump administration. This sentiment is reflected in the Southern District of Texas ruling in  State of Texas et al v. United States of America et al ruling DACA to be illegal. There are many arguments for restricting immigration, but it is possible that limiting immigration could produce problematic consequences? Adverse outcomes beyond the lofty ideals of multiculturalism? Currently, in the United States, there is a labor shortage, being dubbed the Great Resignation. More people are declining to participate or return to back to the workforce. Labor force participation was reflected as 61.9 percent as of December 2021.; when compared to December 2019, 63.3 percent.

The discrepancy in workforce participation between 2019 and 2021 may seem minor, but to see the severity of the effect, one only needs to view the lack of staffing at the local grocery store. Combined with global supply chain shortages it becomes apparent that commodities and entry-level labor are in short supply. Does the question become why further decrease the pool of potential workers through cracking down on immigration? Then arises the erroneous myth that immigration, specifically illegal immigration harms American workers. Most Americans polled even admit that immigrants assume job roles that most native-born citizens are unwilling to perform. It should note that deporting DACA-eligible workers would also exacerbate current worker shortages in higher-paid jobs considering nearly a quarter of DACA have attained a college degree (p.2).

If anything, considering the current economic conditions, restricting immigration/ deporting undocumented workers could result in a Prisoner’s Dilemma. A mutual defection between undocumented immigrants that entered the United States as children (DACA Dreamers) and the vigilant “immigration hawks”. By the very fact, the dreams refuse to go back to their country of “origin” this could be seen as an implicit defection against the immigration hawks who seek to deport all illegal immigrations and be strict about who is permitted to assume residency in the United States. Naturally, the incentives structures between the two groups are irreconcilable, the odds of a mutually acceptable compromise are slim-to-none; the immigration debate is a winner-take-all game. Compromise can be achieved in politics but is rendered untenable because of political polarization. Immigration has become a hotly contested wedge issue where making concessions are no longer fashionable. The immigration hawks do not realize that they are shooting themselves in the foot. When labor shortages impact establishments ranging from the drive-thru to the emergency room, it affects everyone. Regardless of their position on immigration, making it asinine to refuse willing labor participation the right to work.

Prisoner’s Dilemmas- VII: Hoarding

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The event of toilet paper shortages of March 2020 was our societal initiation into the peculiar COVID-19 era. Now that we are currently facing global supply-chain shortages, people are once again starting to engage in hoarding behavior. The attempt to accumulate scarce goods when confronted with shortages is an understandable response. However, is it a good strategy? From a superficial standpoint, hoarding seems like an optimal strategy, especially when assessing the present market conditions. But being fixated on the current supply shortages does not take into account downstream consequences of hoarding behavior. Whether it is the toilet paper shortages of 2020 or the current supply shortages of 2021, all supply shortages present us with a Prisoner’s Dilemma. This observation is most likely true of all supply shortages past, present, and future.

By definition, a Prisoner’s Dilemma is a situation where players (in this scenario shoppers) believe it is in their best interest to adopt noncooperative strategies; but create suboptimal results. For example, consumer’s hoarding scare commodities can have the following consequences:

 1.) Consumers’ opting to hoard a scarce product will only exacerbate current shortages.

2.) The intensified stress placed on the supply chain from hoarding will be reflected in skyrocketing prices (absent any price control measures, e.g., price gouging laws).

3.)  Private firms may decide to place purchasing quotas on specific scarce goods.

4.)  The increased potential for violent interactions when attempting to obtain scare goods.

While many people may think buying every last roll of toilet paper is a good strategy, several potential ramifications suggest otherwise. Hoarding results in forms of strategic purchasing that pits shopper versus shopper. Consequentially, engenders many social and economic externalities.

Vaccine Op-Ed Has Been Published

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Published by The Casa Grande Dispatch (Pinal Central): Click here

Editor, Casa Grande Dispatch:

There has been a lot of debate over vaccine mandates in the wake of the COVID-19 pandemic. Most arguments revolve around the science of vaccines or the ethical concerns of state-sanctioned requirements. However, are such policy prescriptions even legal? Much of the justification based in past case law depends upon which level of government is issuing the mandate. Several Supreme Court rulings from the early half of the 20th century validate the legality of state and local (Jacobson v. Massachusetts and Zucht v. King) immunization requirements. What about at the federal level? The Biden administration’s proposal seeks to implement a nationwide vaccine mandate. Arizona and 23 other states are rightfully challenging this encroachment upon states’ rights.

Past case law does not justify top-down mandates from the federal government. Limiting the defense of a national vaccine requirement to using circuitous channels, President Biden directed OSHA to establish a vaccination requirement for employers with 100 or more employees. The president relies on the authority conferred to the agency, under Section 6 of the OSH Act, endowing OSHA with the ability to promulgate occupational regulations. Judging by the amount of opposition to this emergency measure by state governments, the president initiated a bureaucratic cold war, fought in the courts. COVID-19 has been devastating to the entire county, but ultimately measures to combat the virus should be left to the states — a statement validated by past case precedence; a maxim guiding the core legal arguments of the litigating states.

Bootleggers and Baptists XXXII: The Bootleggers of Mask Mandates

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The COVID-19 Pandemic impacted almost every facet of daily life. The emergence of this unknown pathogen has generated an enormous amount of panic; acting as a pretext for laws and regulation.  It is easy to see how the insights of political economist Robert Higgs have been validated by the number of laws and relief bills that have proliferated in the name of the pandemic. Government action hardly ever has a neutral effect on the incentive structures of constituents, business interests, bureaucrats, and politicians.  There is always a beneficiary of any implemented policy that exists within every decision-making structure. Even in the context of an apolitical governing institution such as a Home-Owners Association

The most common form of COVID-related laws have been mask mandates, like another policy, there are disparate effects. Since benefits can be conferred through mask mandates they apply to Bootlegger and Baptist’s (1983)  coalition building. In almost any scenario the scientists would be our proverbial “Baptists” due to their vocal concern for public safety. This statement does not validate whether masks are effective at curtailing the spread of COVID-19. It most likely connotes a sincere concern for public welfare making it a normative position, therefore a moral argument for mask mandates.

Once we start to address who benefits from mask mandates the conversation starts to get interesting. Similar to the COVID engendered microchip shortage the beneficiaries of mask requirements have changed over time. The most notable “Bootlegger” of the nascent period of the pandemic were Mask producers. Specifically, mask manufactures are based out of China. It would be a mistake to interpret this observation as a tacit critique of free trade, this fact is self-evident.  The increase in mask sales does not require any further explanation beyond mask mandates and fear of the virus spreading. The question of why this was more fruitful for Chinese producers than other mask manufactures does need to be elucidated. That was largely a byproduct of the recommendations of the FDA.  Per the Brown Political Review:

“…A lack of knowledge and trust in these companies has led hospitals to severely ration their workers’ N95s rather than purchase additional supplies. The private market is no better: Facebook, Amazon, and Google are largely blocking domestic N95 manufacturers from advertising and selling their products. At the same time, most consumers feel obliged to use less-protective cloth or surgical masks due to continuing CDC guidance to reserve N95s for hospitals that will not even accept them. The CDC defends this policy by pointing to the relative efficacy of cloth masks and citing “reasons supported by science, comfort, costs, and practicality,” though these reasons seem increasingly outdated. So, the pandemic continues, millions of Americans live in fear of getting sick, and all the while tens of millions of life-saving products are sitting unused in storage facilities. The N95 shortage is an illusion, and as the virus and its variants continue to spread, more must be done to disseminate the essential products throughout the population…”

Even though domestic producers invested millions into expanding their production capacity, foreign masks were still preferred. It is estimated that “… between March and September 2020…” the shipping containers containing N95 masks imported into the U.S. increased from 6 to 3,000. While “…National Institute for Occupational Safety and Health (NIOSH) approved 19 domestic manufacturers to begin to produce N95s..” the agency neglected to promote the masks and clearly articulate the distribution plan. Even outside of China’s relative comparative advantage for manufacturing other factors funneled production demand in their direction. Several domestic policies made the sale and distribution of domestically produced masks more onerous. Clearing the U.S. market for Chinese producers.

China’s domination of the mask production market has advantages that extend beyond economic benefits. China also garnered some soft political power through possessing a surplus of N95 masks. The Chinese government utilized the distribution of masks as a tool of diplomacy. Whether this decision was a moral one is a firm subject for debate. It is undeniable that China appropriates some “political purchasing power” from their superior efficiency in manufacturing masks. This is true even in the absence of some of the more obtuse regulatory policies implemented by the United States. The Chinese government capitalized on this opportunity to exercise the nation’s political and economic strength.  Many of the countries that received the most generously mask donations were nations that had the friendliest relations with China. Fully recognizing the potential for gaining social currency through these “benevolent” humanitarian gestures turned this venture in foreign aid into a publicity campaign.

The Chinese government seized the opportunity to “tell China’s story well” (Jacob 2020) and started donating medical equipment to other countries. While China sought discretion from donors such as the EU (when foreign medical supplies were sent to Hubei province in January 2020), the Chinese state media were quick to portray China’s donations as acts of benevolence (Popescu 2020). Many leaders of recipient countries duly praised China in return. For example, Serbia’s president welcomed a team of Chinese doctors in March 2020 by kissing the flag of the People’s Republic (CGTN 2020).

Many Americans may view the pandemic global aid initiative as a cynical ploy on China’s part. Such evaluations may be relatively inconsequential at least China was willing to help someone. In contrast, China could have opted to just horde all the N95 masks and callously sell what they could share from their domestic demand. However, it would also be naïve to completely ignore the political optics of the situation.


As time has passed and the pandemic continues, we have seen a shift in the beneficiaries of domestic mask mandates. Irrespective of the U.S. mask supply, the mask shortages of the early pandemic period have fallen out of public consciousness. Now the debate over mask mandates has devolved from a civil liberties debate to a diametrical shouting match. This uncivil discourse leaves little to no room for any grey area. Either you are either pro-mask or anti-mask with the underlying implication being that you either favor the mandates or oppose them. Few, if any pundits enrapture in this schoolyard squabble, would ever dare to oppose the mandates, but actively choose to wear a mask in public. Despite the fact, such a position is perfectly rational. Once again, we do live in an age of hyper-political polarization. In a similar manner to how the vaccines would later become politicized, any precautionary measure against COVID has morphed into the rhetorical argument. Where both sides of the debate completely dispense with facts and reason, leading to the assumption that both factions are more concerned with winning the debate than generating effective policy.

From the pro-mask campaign, an insidious and morally objectionable practice has emerged. That is the public shaming of mask and vaccine skeptics that have died of COVID. It is reasonable to argue that these media campaigns from the predominately left-wing media are more morally depraved than China’s mask allocation policies. The media has been joyously publishing headlines highlighting how COVID-skeptical public figures ranging from politicians to radio talk show hosts have succumbed to the virus. This public ridicule goes far deeper than utilizing these narratives as evidence that COVID is truly dangerous. There is a deeply ingrained derisive cruelty implied in it this public displace. In all honesty, is tantamount to dancing on the graves of these vocal opponents of mask mandates. The pro-mask camp unscrupulously benefits through utilizing these individuals as examples of why masks are necessary. In the same breath derive callous amusement out of mocking their “stupidity” with no regard or respect for the person that died.

Time to Restore the Gold Standard- Part III

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One of the defining arguments for justifying a gold standard is that it guards against inflation. What is inflation? Inflation is the depreciation in a currency’s purchasing power over time, increasing the nominal prices of goods and services. A gold standard combats inflation due to the limited quantity of gold. The cause of inflation is the introduction of money currency into the economy. Abiding by the immutable law of Supply and Demand, the more of a commodity we have, the lower its value will be, which also applies to money. A principle that was demonstrated in the currency crisis afflicting Weimar Germany. The massive supply of German Marks leads the country to experience hyperinflation. The German mark became virtually worthless as a medium change. At the height of this financial disaster, a loaf of bread cost $100 billion! Right before the German mark collapsed. 

The astronomical prices and economic penury caused by hyperinflation is the most extreme outcome of overprinting fiat currency. There are several other less severe consequences of inflation. For instance, inflation reduces the incentives for people to save money. If your savings are withering away by the continuous erosion of inflation, there is no in leaving your money in a savings account. One way many wealthy entrepreneurs avoid the stealth tax of inflation is through investments. Real estate, business startups, bonds, stocks, and securities have the potential to increase in value. In comparison, an inflationary dollar can only decrease in value. The stock market may be a gamble, but hedging on a fiat currency is a losing strategy. 

The customer suffers dearly due to the harmful effects of inflation. The most obvious consequence is inflation resulting in higher prices. Functioning as a paradox because one would expect prices to decline because of increased efficiency from technological innovation. Since inflation increases the price of all goods including input the price of consumer goods rises. A continuous increase in the money supply also results in a “cheapen” of consumer goods. Producers feeling the pinch of inflation on productions goods cannot directly transfer these costs to the consumer. However, producers elect to reduce portion sizes or reduce overall product quality. Restaurants using downgrading the grade of meats they serve, readymade food producers reducing packaging sizes, clothing manufactures using less durable fabrics. Not only are we paying more for everyday goods, but we are also paying more for inferior goods!

The inflationary monetary policy enabled by a fiat money standard impacts more than thrift and prices. Money creation being disconnected from the constrain of fixed assets backing the currency has led to several troubling practices in macroeconomics. One of the most notable examples has been the manipulation of interest rates. Typically interest rates are artificially lowered to encourage consumption during economic lulls. Achieved through expanding the money supply, with the injection of liquidity it becomes less expensive to lend money (remember the concept of supply and demand). Even exponents of this tactic acknowledge that this alteration to the interest rate is only temporary. Interest rates below the market rate are unsustainable. Influencing people to makes investments that they cannot afford at natural interest rate levels, creating economic bubbles. Those who can no longer afford the real interest rates end up defaulting on their investments. One of the most salient examples in the recent history of such disastrous collective malinvestment was the 2008 Housing Crisis. The housing market and adjacent industries were decimated by the burst bubble. Overall, resulting in over 2 million foreclosures in 2008 alone. Demonstrating the hazards of institutionally endorsed market distortions that could only be executed on a pervasive scale under a fiat currency standard!

The tight constraints of a currency pegged to a precious metal have often been expressed as a concern. Frequently, being used as an argument against a gold standard. Particularly the need for liquidity during a supply shock. It could be theoretically justifiable to have some flexibility in the money supply to fund unexpected expenditures. One example being emergency funding for implementing measures to combat COVID-19. However, the purse strings have been loose for decades. Featuring only brief periods of modest austerity measures implemented. The inexhaustible need for more government funding has developed into a deeply rooted dependency. That not only adversely impacts the character of our governing institutions but also that of the citizens. The people begin to demand more entitlement programs. Typically, with little regard for the costs of such initiatives. Arguable making inflationary monetary policy cleverly camouflaged form of fiscal illusion. The American people already have social security and several other federal entitlement programs, but this is not enough! Now universal health care and free college tuition are mainstream policy talking points. Illustrating America’s growing and insatiable appetite for publicly-funded entitlement programs. Simultaneously, displaying the hideous character flaws of thievery, profligacy, and gluttony.

The Eviction Moratorium Has Been Overturned

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The economic fallout of the COVID-19 pandemic has radiated throughout the global economy. The damage extends beyond the ex-ante pessimism of market speculators on Wall Street. Many measures implemented to prevent the spread of the virus has resulted in compounding the economic trauma. Some economically detrimental policies that have little utility in containing the virus are being touted as a crucial initiative for maintaining public health. It would be imprudent for someone without a medical background to argue against the veracity of such claims. However, many of these tradeoffs are merely band-aid measures that will have severe downstream consequences. One prominent example of this was the eviction moratorium.

The debate over this policy position has recently been featured in the headlines as U.S. District Judge Dabney Friedrich motions to end this law. She forms a compelling legal argument for how the continuation of this policy would constitute an overextension of the CDC’s authority. Detailed in her order is the legislative history of the eviction moratorium spurred by the economic fallout of COVID-19.

Timeline:

  • March 13th, 2020- Former President Donald Trump declares a national emergency due to COVID-19.
  • Two weeks later the CARES Act is signed into law. Part of this relief bill was a 120-day restriction on evictions for rental properties that “participate in federal assistance programs or were subject to federally-back loans”. This feature of the act was set to expire in July.
  • August 8th, 2020- the then-president “… issued an executive order…” instructing the director of the CDC and Secretary of HHS to evaluate if continuing the ban on evictions due to nonpayment was a reasonable measure to stifle the spread of the virus.
  • September 4th, 2020- The CDC issues an order (42 C.F.R. § 70.2. 85 Fed. Reg. 55,292) temporary hold on evictions to prevent the spread of COVID-19. The agency invoked a section of the Public Health and Service Act § 361. Reasoning that is measure is necessary for enabling individuals to self-isolate and social distance.

361. (a) The Surgeon General, with the approval of the Secretary, is authorized to make and enforce such regulations as in his judgment are necessary to prevent the introduction, transmission, or spread of communicable diseases from foreign countries into the States or possessions, or from one State or possession into any other State or possession. For purposes of carrying out and enforcing such regulations, the Surgeon General may provide for such inspection, fumigation, disinfection, sanitation, pest extermination, contaminated as to be sources of dangerous infection to human beings, and other measures, as in his judgment may be necessary. (b) Regulations prescribed under this section shall not provide for the apprehension, detention, or conditional release of individuals except to prevent the introduction, transmission, or spread of such communicable diseases as may be specified from time to time in Executive orders of the President upon the recommendation of the Secretary, in consultation with the Surgeon General.

( Health and Service Act, Sect 361, P.377-378).

  • December 31, 2020- Originally set to expire, however, the CDC order was extended as part of the Consolidated Appropriations Act passed by congress. This extension was slated to expire on March 31st,2021.
  • March 31st,2021- CDC extended the federal moratorium on evictions to June 30th,2021 to prevent further spread of the virus. This new extension was predicated upon “…updated its findings to account for new evidence of how conditions had worsened since the original order was issued, as well as “[p]reliminary modeling projections and observational data” from states that lifted eviction moratoria “indicat[ing] that evictions substantially contribute to COVID-19 transmission.” Id. at 8022…”

Friedrich expounds upon the legal facts that indicate that the proposed extension through June is a jurisdictional overreach on the part of the CDC. One of the biggest questions in assessing the veracity of the agency’s capacity to impose restrictions on evictions is whether this power was conferred to the CDC by congress. Since the “… CDC Order was intended to have the force of law…” (p.9) meaning the two-prong test established in Chevron, U.S.A., Inc. v. Nat’l Res. Def. Council, Inc., 467 U.S. 837, 842 (1984) must be applied. What is also known as the test for  Chevron Deference or administrative deference. Depending on the action taken by the agency “…judicial deference is appropriate where the agency’s answer was not unreasonable, so long as the Congress had not spoken directly to the precise issue at question…”. Friedrich points out that the court needs to review if the congress has discussed the matter, if so then no further consideration is required (p.9-10). If the action and interpretation of a government bureau or agency do not fulfill the first test, the court needs to ascertain if the agency interpretation is valid and if so “defer to it” (p.10).

The imposition of the moratorium on evictions fails the criterion of the Chevron test through stepping outside of the boundary congressionally approved actions. Pursuant under section 264 of the Public Health Service Act the CDC does have the authority to implement measures to prevent the interstate and international spread of the virus (p.10). The enumerated list of possible measures that are allotted to the agency is not boundless. Per the precise language in section 264, the authority for agency action is centered upon “specific targets” that operate as a vehicle for transmitting the virus (p.11). Friedrich notes that placing nationwide bans on evictions does not meet this first test of congressionally allocated authority. She also conveys that including eviction bans as being a valid use of the CDC’s authority would be a distortion of the language present in Section 264 (p.12). Extending the CDC the power to intervene in the transactions between landlords and tenants presents a constitutional issue of overreach on the part of the agency (p.14). Per Friedrich’s interpretation of the law, the CDC doing so exceeded the limits of the Commerce Clause and going above and beyond the powers congress intended for the agency to possess. (p.14).

The latest purposed extension coming directly from the CDC has not been blessed by Congress. Placing the veracity of this order in question. Congressional approval has been granted to extend the eviction moratoriums twice over the past year. This approval manifesting in the CARES Act and the Consolidated Appropriations Act (p.15). Since congress withheld any support for extending the eviction freeze beyond January 31st, 2021; any action taken by the CDC can only rest on the content “…Public Health Service Act alone…”(p.18). As previously demonstrated the eviction measures are not defendable within the context of the law. Making any further extension from February 1st an exertion of extralegal authority without the back of congress or any corresponding statutes.

Can Adam Smith Help Us Recover From COVID-19?

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Over the past year, the COVID-19 pandemic has completely turned society upside down. Plagued by uncertainty the entire planet was alarmed in went into full panic mode. Leading us to the immediate question of how do we contain a novel virus when its origins are shrouded in mystery? Many of these reactionary policies may have modestly slowed down the spread of COVID-19, however, most of the state-sanctioned restrictions ended up causing unforeseen problems. The shelter-in-place orders resulted in the highest recorded rate of job loss since The Great Depression. The economic ramifications of various lockdown measures go beyond the immediate consequences. There was a November 2020 study conducted by USC projecting an overall GDP loss of $3-4 Trillion over the next two years.

Lengthy book treatments could be composed to fully detail all of the intricacies of the economic carnage of COVID-19. Unfortunately, the fall-out of the pandemic reaches well beyond the economic repercussions. Our overall health has been impacted. Not necessarily by the direct symptoms of COVID-19, but by a result of the lockdown orders. People have been less active leading to weight gain, which may lower an individual resistance to the virus. While physical health may be most salient to us because it can be observed by the naked eye, what about mental health? It is well documented that social isolation is a contributing factor to depression. A multitude of stories has been published describing the psychological struggles of Americans during the pandemic. The hardnosed statistician may be quick to dismiss these narratives as being purely anecdotal. However, many of the risk factors for suicide have been magnified since the beginning of the pandemic. There has been a notable increase in the suicide rate from 2019 to 2020.

The pandemic has also fractured relations between us and our fellow citizens. Clinging to our inner circles to avoid spreading COVID-19, we begin to become more tribal. The trust we once held for our neighbors has become eroded over the past year. Anytime someone sneezes we give them the side-eye. Fostering a climate of distrust and paranoia. This distrust has manifested itself in actual hate crimes and discrimination. Some reports estimate that hate crimes against Asian-Americans increased by 150 percent in 2020. What does this have to do with COVID-19? Quite a bit. It is speculated that the outbreak originated in the Wuhan province of China (p.2). Leading some to erroneously blame people of Asian ancestry for the spread of the virus. Creating friction between various communities across the country and only serving to make an already tumultuous situation worse. Asian Americans much like all other Americans have been grappling with the stresses of the pandemic. Adding racial tensions to the mix only serves to create more division and distrust. We need trust to have a stable society. 

Could a voice from the past help us navigate these difficult times? Provide us direction in helping us heal from the carnage caused by a global pandemic? I would argue yes. That voice of reason comes from no other than The Enlightenment-era moral philosopher Adam Smith Many readers are probably thinking to themselves “… isn’t this the guy that told us to follow our self-interest. In other words, to be selfish?”. In a sense, yes. However, limiting the body of Smith’s work to the following passage is nothing more than a caricature of his overall contributions to economics, never mind moral philosophy.

“It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their interest. We address ourselves, not to their humanity but their self-love, and never talk to them of our necessities but their advantages. (The Wealth Of Nations, Book IV, Chapter II, p. 456, para. 9)”

The above paragraph may be the most famous one ever written by Smith, but it does not wholly define his breadth of work. Smith believes that markets and morality were inseparable, and you could not have one without the other. At the crux of voluntary trade is interaction. If we treat each other poorly and do not foster a good-working relationship trade cannot take place. To foster strong relationships, we as a society need a firm moral backbone. Morality provides us with the precepts to facilitate just and fair interactions despite conventional wisdom, this is crucial to success in business. If you are not running your enterprise justly your client will eventually find out and choose to do patronize another vendor. 

Business ethics and social morality are intimately interconnected, one cannot exist without the other. That is why the two great works of Smith were meant to be read in tandem. The Theory of Moral Sentiments (1759) addresses social morality and The Wealth of Nations (1776) details the inner mechanics of economic exchange (catallactics). Both books dovetail together so well, reading one leaves you with a missing piece of the puzzle. COVID-19 has unquestionably harmed society economically and socially and both books contain the wisdom to help us get back on the right track. I am a great admirer of economist Don Boudreaux, but I do have to take issue with his recent assessment of Smith’s possible perception of the impact of social isolation resulting from COVID-19. Dr. Boudreaux states that Smith could certainly empathize with and rationally understand the distress caused by social isolation. I do not disagree with his inference, but I would surmise that Smith would want us to draw lessons from his work. To apply the concepts in both books to help us as a society overcome the hardships imposed by COVID-19. His work was not intended to be confined to the postulations of lofty ivory tower discussions, but also for practical application. What good is moral philosophy if it is never put to practical use? Why not look to the works of Adam Smith for guidance and solutions to help us navigate the uncertainty that is the COVID-19 pandemic?

The Whisk(e)y Wars- A Conflict Fought With Tariffs

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“…When there is no probability that any such repeal [of a tariff in a foreign country] can be procured, it seems a bad method of compensating the injury done to certain classes of our people to do another injury ourselves, not only to those classes but to almost all the other classes of them. When our neighbors prohibit some manufacture of ours, we generally prohibit, not only the same, for that alone would seldom affect them considerably, but some other manufacture of theirs. This may no doubt encourage some particular class of workmen among ourselves, and by excluding some of their rivals, may enable them to raise their price in the home market. Those workmen, however, who suffered from our neighbors’ prohibition will not be benefited by ours. On the contrary, they and almost all the other classes of our citizens will thereby be obliged to pay dearer than before for certain goods. Every such law, therefore, imposes a real tax upon the whole country, not in favor of that particular class of workmen who were injured by our neighbors’ prohibition, but of some other class…” (Bk. 4, Ch. 2)

 The Wealth of Nations- Adam Smith

The Biden Administration’s commitment to free trade is questionable at best. The extent to which he will champion laissez-faire policies is a difficult determination to make in the nascent period of his presidency. Biden being a centrist is more concerned with appeasing the median voter than taking principled policy positions. Only time will tell whether or not he will capitulate to the anti-market sentiment of the vociferous and passionate populous wing of the Democratic party. Epitomized in the heated rhetoric of elected officials such as Elizabeth Warren and Alexandria Ocasio-Cortez. However, there may be some light at the end of the tunnel. Free trade may not necessarily be dead in the water. Despite the multitude of flawed policies that have so far been supported and promulgated by the Biden Administration they may have done one thing correctly. Repeal some of the Trump-era tariffs. Arguably one of the most disturbing aspects of the Trump administration was his hostility towards foreign trade. Biden has taken one small step to repair America’s tarnished image in the arena of international trade. This attempt at redemption has manifested itself in an unlikely form, the abolition of the importation tariff on Scotch Whisky

The previous statement is not wholly accurate. The United States agreed to relinquish all tariffs on goods imported from the United Kingdom. Responding to the UK’s lift all of its tariffs on US imports back in January. Scotch Whisky is one of Scotland’s most highly esteemed exports. Making it an iconic symbol of the UK’s presence in the arena of global trade. Considering back in 2012 the United States was estimated to be the largest export market for Scotland’s prized spirit, it stands to reason that the tariffs were detrimental to United Kingdom’s economy. Even in light of the Trump tariffs the United States still maintained this position as top consumer nearly a decade later in 2020. Despite the United States remaining big-time scotch imbibing nation the tariffs still sent shock waves throughout the industry. It projected that since the 25 percent tariff was imposed back in 2019, Scotch producers lost an aggregate “$682 million (£500 million)” in sales. In 2019, the United States imported $2.07 billion worth of distilled spirits from the U.K., the majority of it being scotch whisky. The year 2020, delivered a two-punch blow to Scotland’s whisky producers. The COVID-19 pandemic also eroded profit. Leading to an overall 23 percent dip in global scotch sales. The US tariffs have been attributed to a 32 percent decline in overall whisky exports. As recent as last month the losses incurred by the tariffs have been described as “unsustainable” for some producers.

The United States did not escape with impunity from retaliatory tariffs being imposed by the United Kingdom. It should not be ignored that the UK is a significant trading partner of the United States. Approximately 20.3 percent of all agricultural exports from America to the UK were alcoholic beverages. The United Kingdom slapped a 25 percent tariff on American whiskey after Trump applied tariffs on steel imported from the UK. As predicted by several experts and commentators American whiskey serves as a salient target for reciprocal tariffs. The United Kingdom was previously viewed as the largest market for bourbon exports. Since the application of the tariffs overall exports declined by 35 percent. Overall, bourbon sales in the United Kingdom decreased by a staggering 50 percent. The United Kingdom did relax tariffs on American Brandy, Rum, and Vodka. However, the UK and other European Union countries will continue to maintain tariffs on American whiskey as a result of a “two-year trade war on steel and aluminum”. 

The question become what was the impetus behind this fatuous trade dispute between the US and the UK? It all came to a head in 2019, after a 16-year dispute between aerospace rivals Boeing and Airbus. The UK applying tariffs on up to $4 billion worth of goods over subsidies received by Boeing. The United Kingdom started to ratchet down the conflict by easing tariffs on some US goods and Biden reciprocated by lifting tariffs on UK imports. While Biden is not a perfect free trader, this was a shrewd decision on his part. Not from the standpoint of political strategy, but the point-of-view of sound economic theory. The words once-famous uttered by Ronald Regan ring true here: “If you want more of something, subsidize it; if you want less of something tax it”. Here is the crux of the idiocy of protectionism. Proponents seek to limit imports to encourage domestic consumption-based out on a sense of nationalism. However, they ignore the fact that their hostility towards foreign goods may stir the ire of lateral trade partners. Resulting in defensive actions that will result in the decreased consumption of American goods globally. Wouldn’t a proud nationalist prefer to see American goods consumed all across the world? After all, the two best-selling whiskies globally in 2019 were Jack Daniels and Jim Beam. This was not the byproduct of using taxation to punish Americans who enjoy drinking imported whiskies, but through many years of savvy marketing, product consistency, and rightfully earned brand recognition. 

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.

Bootleggers & Baptists VIII: Can The Bootlegger and The Baptist Be The Same Person: A Drive-Thru Revelation

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This morning I felt particularly stir crazy from being cooped up in the house, so I decided to go to pick up some coffee. When I finally reached the drive-thru window, I was met by one of the employees. He began to detail to me how several local restaurants had employees who had contracted COVID-19. Even blatantly pointing out the window to the adjacent establishment. Claiming that the franchisee owner was going so far to cover it up to prevent a loss in business.  Naturally, I was initially shocked by this individual’s candor. However, he made one fatal error which led me to start questioning the integrity of his accusations. He revealed the fact that he was a former employee of the adjacent building.  Informing me that he knew both the owner and the manager well. It doesn’t take a rocket scientist to understand why this individual would have the incentives to levy such claims against the other business. For anyone out there that has been fired or layoff, you aren’t going to have too many kind words for the former employer that released you.

 

The employee I was conversing with stated he obtained this information from speaking with the present manager of the neighboring eatery. As implausible it may seem for the manager to disclose such information to an employee of a competitor will have to be dispensed with. It degenerates into nothing more than he said/ she said scenario. There isn’t enough evidence on either side to make a definite claim. So I will be charitable and give him the benefit of the doubt. Let’s assume that his statement about the other establishment was true. There may have been multiple motives for him informing me of this development in the local culinary scene. He may have felt some unbridled compulsion to inform of the potential hazard of dining at the other restaurant.  He may have had personal moral code that would not allow him to withhold such information from innocent parties. Such as adhering to Kantian morality or having strong religious beliefs. Perhaps he is an admirer of George Washington. The conviction to want to shield innocent parties from exposure to COVID-19 is certainly a laudable objective. I would perceive this as the behavior of a Baptist.

 

Assuming the information was true and he possesses pure intentions for proliferating this news, he can be considered a Baptist. However, it is also possible for him to simultaneously be the Bootlegger as well? I would argue yes. As individuals, we can have multiple motives for engaging in an action. It isn’t outlandish to assume that he had subordinate motives for detailing to me that the neighboring establishment’s staff had tested positive for COVID-19. How does he benefit from disclosing knowledge to me? What are his incentives for doing so?

 

There are two potential self-seeking motives for his actions. The first reason would be attempting to enact vengeance on a former employer. Doing so by creating a rumor that damages their credibility in the community.  If the purported facts are completely fictitious the Bootleggers and Baptists dynamic dissolves. Any pure intention is no longer present. The second reason for his shocking candor that sways into the territory of defamation would be increased job security. The pandemic has likely chewed into the profits of his current employer. To avoid getting laid off for budgetary reasons, he is attempting to divert business to his restaurant. Done out of self-interest and exhibiting behavior that is in line with that of a bootlegger.

 

Bruce Yandle’s concept of Bootleggers and Baptists was intended to demonstrate how unlikely coalitions are formed in the political arena. Considering we as humans can have multiple reasons for advocating for a policy or engaging in various forms of rent-seeking, it is possible for an act to severe in both roles. Providing they are being honest about their moralistic motives, but also stand to benefit from their attempt to influence public opinion.  For instance, I could advocate for a ban on smoking in public parks. Truly feel that I am attempting to save others from the health effects of secondhand smoke. At the same time also be advocating for a smoking ban because I dislike cigarette smoke.  The roles of Bootleggers and Baptists are not always mutually exclusive.

 

It is analogous to the ID and Superego allying. Both are satisfied with the cause and both are the deep-rooted psychoanalytical manifestations of the Baptists and the Bootlegger. When an individual strikes a balance between their hyper-moralistic inclinations and darker impulses they can assume both roles. When avarice and morality align themselves in the intentions of one person this phenomenon becomes possible. Yes, this application of Yandle’s trope does exercise a bit of artistic license. However, Yandle never said that individuals couldn’t form coalitions within themselves.  Doing so by combining various rationals for advocacy and then vocalizing them. Typically under the guise of concern for the moral imperative of the situation.

Bootleggers and Baptists Part II- Netflix is One of the Winners of COVID-19

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As it has now approached Memorial Day weekend many localities are either starting to loosen or lift their shelter-in-place orders. Even in regulation heavy Massachusetts beaches have been reopened in commemoration of the holiday. The beaches were reopened with specified safety restrictions [1]. Even though states are starting to slowly reopen it is hard to say whether or not we are out of the woods. There is still the potential of a second wave resurgence in COVID-19 cases.

The economic turmoil that has been spurred by state-mandated shelter-in-place orders has been well documented. Approximately 38.6 million American workers have applied for unemployment benefits within the past couple of months [2]. Per the National Bureau of Labor Statics unemployment rate increased to 14.7% in April [3]. The recent surge in high profile companies filing for bankruptcy could be seen as another oblique consequence of COVID-19 lockdowns [4]. Painting a very bleak economic picture for the United States.

 

Despite the financial carnage caused by government-mandated shelter-in-place orders some businesses are thriving. Certain sectors such as cleaning and delivery services have experienced relative success in light of the pandemic [5]. It could even be fair to argue that some businesses have prospered due to the virus-related restrictions. Reminding us that there the unseen beneficiaries of many regulatory proposals. Even those implemented in the name of public health and safety.  Regulation cuts both ways. It may benefit some while being a detriment for others.

This odd phenomenon is punctuated by economic Bruce Yandle’s concept of Baptists and Bootleggers. The formation of coalitions with seemingly opposing factions coming together for a common goal (Munger, 2020, P.513) [6]. The Baptists being individuals who support the regulation on moral grounds such as public safety or common decency. The bootleggers are proponents of such measures due to the financial benefits they stand to gain. The example Yandle uses is the prohibition of alcohol sales on Sundays (Yandle, 1983, P.2) [7]. This regulation satisfies the moral concerns of the Baptists. The Bootleggers effectively have no competition on Sundays.

Yandle came to this counterintuitive realization while serving on Council on Wage and Price Stability back in the 1970s. Yandle was surprised to find out that many industry lobbyists opposed deregulation (Yandle, 1983, p.2) [8]. To a certain extent, there is a demand for regulation (Yandle, 1983, p.3) [9]. Commodifying the legislative process due to the benefit of reducing competition. Smaller companies may not have the resources to adapt to the new regulations effectively making continued operation illegal. Effectively putting them out of business. Creating barriers to entry without even requiring an antitrust exemption such as those allotted to agricultural collectives and Major League Baseball.

 

The Baptists of the shelter-in-place orders would have to be healthcare professionals. Coast to coast doctors and nurses on the frontlines have expressed their concerns about the spread of the virus. Back in March, an Arizona doctor started a petition urging the state to impose a statewide lockdown order [10]. Motived by the laudable goal of stifling the spread of the disease or in the vernacular of epidemiologists “flattening the curve”. Certainly well-intentioned from the standpoint of point of public health. Especially considering the death count from COVID-19 in the United States is presently estimated at 73,639 [11]. One unfortunate side-effect that good intentions have not accounted for was the “temporary” suspension of civil liberties. Such as the freedom of mobility and property rights issues (F.E. Guerra-Pujol, 2020, P.2-4) [12]. That is a separate issue.

 

Some states have loosened lockdown orders and have even allowed for dine-in services [13]. However, many healthcare professionals are slow to even reconvene business due to concern about the spread of COVID-19 [14]. Many health care professionals have urged states to reopen slowly to veer away from a secondary spike in cases [15]. Clearly demonstrating lingering worries for the spread of COVID-19. Also, strongly demonstrating a moral dimension of lockdown orders. These appeals for cautious relinquishment of restrictions has been framed in the context of harm reduction. Have been centered around the moral imperative of saving lives. Providing the moral smokescreen for anyone with products or services that will increase in demand due to the lockdown.

 

One of the quiet beneficiaries of shelter-in-place orders has been streaming services, particularly Netflix. Any company with a business model that requires little interaction with customers has the advantage. Entertainment venues such as movie theaters, restaurants, bars, clubs, etc. were closed due to government decree. Effectively narrowing the array of entertainment options to activities that involve minimal social interaction. The top contenders being social media, television, and video games. Netflix was already an established fixture in television streaming services. As well as one of the earliest entrants to the market. Over the past couple of years. television viewers swapping out cable boxes for stream services has secured Netflix’s foothold on the market [16]. Even though  Netflix has not openly petitioned for any “lockdown” legislation they are clearly the Bootleggers in this situation.

 

The spike in Netflix subscriptions within the past couple of months is clearly correlated with the shelter-in-place orders nationwide.  Back in April the company reported a 28 % increase in revenue [17]. The rabid success of Nexflix exclusive content such as the docuseries Tiger King is undeniable. This documentary mini-series become a cultural phenomenon. Solidifying itself as a distraction from the uncertainty we face in a COVID-19 impacted America. While such programming may serve as an entertaining diversion it also has helped Netflix excel and emerge as the dominant form of entertainment.  It certainly helps to have a captive audience with a limited number of alternatives when faced with various restrictions. Per consumer surveys, Netflix has been voted the most reliable streaming service [18]. Regardless of the conditions of the pandemic is merely another feather in their entrepreneurial hat.

 

This is not an indictment of the success of companies that have prospered in the COVID-19 economy. Rather an observation of how the regulatory sword slices both ways. The “quiet beneficiaries” such as Netflix may not have openly called for shelter-in-place orders, but they without a doubt have seen increases in revenue due to such laws.  In part, this surge in business has been facilitated by the Baptists in the health care industry.  Putting pressure on state governments to shut down all nonessential businesses. Creating clear winners and losers in the COVID-19 economy.  Some companies are thriving will others are dying.

Extrapolating the lessons from Richard Cantillon concerning the non-neutrality of money is very much applicable to regulation.  Much like how increasing the money supply impacts factor other than nominal prices (Thornton, 2006, p.6) [19]. Regulation isn’t regulated to the narrow window of the issue that it is intended to solve. It can possess loopholes that can be exploited. By design can create unintended anticompetitive features. Demonstrating the non-neutrality of regulations. They have downstream consequences that often are overlooked by the Baptists and are well known to the Bootleggers.

 

 

 

 

Cantillon Effect- Income Re-Distribution in Reverse

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The economic havoc wreaked by the COVID-19 outbreak has been felt not only across the United States but all over the world.  The government-sanctioned shelter-in-place orders and other restrictions have brought various sectors of the U.S. economy to a standstill. Presenting a profoundly compelling dilemma. Do we cripple our economy to flatten curve or do we impose few restrictions and allow this highly communicable disease to spread rapidly? The proposition on hand appears to be a lose-lose scenario. However, which is the greater of the two evils is a difficult question to answer. Although not surprisingly, the answer seems to split down partisan lines.

 

One method of temporarily easing concerns of the ailing economy has taken the form of the form of an economic stimulus bill. A stimulus bill of mammoth portions. An unprecedented amount of trillions of dollars have been allocated for the CARES Act relief bill [1]. There is a strong constitutional argument that can be made for providing just compensation for those who have lost their jobs due to the Corona Virus pandemic. Legal experts such as professor F.E. Guerra-Pujol of the University of Central Florida make such arguments. Invoking the Talkings Clause of the Fifth Amendment of the U.S. Constitution to provide a rationale for just compensation for those forced into unemployment by government mandate (Guerra-Pujol, 2020) [2].

 

Unfortunately,  the CARES Act does not exercise the restraint of professor Guerra-Pujol’s wage restoration approach. Rather a direct monthly allocation of  $1,200.00 plus an additional $500.00 for each dependent child for those making under $150,000.00 (the cutoff for joint filers) annually [3]. This is regardless of employment status. Making such efforts a departure from a property rights argument for government assistance.

 

The question becomes why would the government provide money to people who are still working? It seems a little counterintuitive. It based upon one of the chief assumptions of Keynesian economics. If the economy is going to weather inhospitable conditions we need economic activity. The solution is we need to stimulate aggregate demand or consumer demand for goods throughout the economy. The government sends everyone a check with the hope that they will go out and spend it. Spurring economic activity. Trump administration’s stimulus bill in many ways mirrors the stimulus policies of the Obama presidency. Maybe Nixon wasn’t kidding when he famously declared ” We are all Keynesians now” back in 1971[4]. I am not going to refute the efficacy of such policies in this essay.

 

Rather make a relatively obscure observation.  It is quite common for major spending bills to funded by monetary expansion rather than tax-dollars [5].  The reason for resorting to circuitous means of funding remains an open question. The wisdom imparted in public choice theory may shed some light on this question. The concept of fiscal illusion comes to mind. Defined as “… “the notion that systematic misperception of key fiscal parameters may significantly distort fiscal choices by the electorate..” ( SANANDAJI &  WALLACE, 2011, P.1) [6]. In other words, if the voting public experience the expense of raising taxes to fund the stimulus bill it would face visceral scrutiny. Funding through printing more money buries the direct cost of the policy. The average taxpayer does pay for the stimulus, just indirectly.  They pay for it in higher prices and reduced purchasing power of the currency. Nothing in this world is truly free.

 

It should be noted that the introduction of new money is not neutral. It does impact other factors in the economy other than prices.  An observation made by both David Hume and Richard Cantillon back in the 18th century (Humphrey, 1974, P.4) [7]. Beyond that new more is seldomly introduced into the economy evenly.  It is ironic that most advocates of income inequality frequently overlook this premise. Generally, because individuals with such ideological proclivities tend to favor the programs being funded by the new money. If you look a little deeper into the situation it becomes apparent that the uneven distribution of money creates inequalities. Those who have access to the new money prior to prices rising enjoy the benefit without the burden of the decreased purchasing power.  Those who receive the new money later on. Once prices have caught up with inflation have the implicit tax of decreased purchasing power. This occurrence is known as the Cantillon Effect.

 

This observation was first noted in the work of Irish-French economist Richard Cantillon. In his book An Essay on Economic Theory, he expounds upon how those who are closest to the mining industry benefit for the introduction of new precious metals into the economy.

All this increased expenditures on meat, wine, wool, etc., necessarily reduces the share of the other inhabitants in the state who do not participate at first in the wealth of the mines in question. The bargaining process of the market, with the demand for meat, wine, wool, etc., being stronger than usual, will not fail to increase their prices. These high prices will encourage farmers to employ more land to produce the following year, and these same farmers will profit from the increased prices and will increase their expenditure on their families like the others. Those who will suffer from these higher prices and increased consumption will be, first of all, the property owners, during the term of their leases, then their domestic servants and all the workmen or fixed-wage earners who support their families on a salary. They all must diminish their expenditures in proportion to the new consumption, which will compel a large number of them to emigrate and to seek a living elsewhere. The property owners will dismiss many of them, and the rest will demand a wage increase in order to live as before.  (Cantillon, 1755, Tranl. Saucier. Ed. Thoroton, 2010,P. 149) [8].

 

This passage exemplifies the principle behind the Cantillon Effect. Those closest to the new wealth receive the new money first. They benefit from the lag between the introduction of the new gold and the purgatorial period before the increase in the quantity of gold is reflected in prices. If the money was truly neutral we would not witness such effects. The introduction of new money truly does have “… real consequences … production, consumption, and distribution of income…”  (Thornton, 2006, P.6) [9]. If this wasn’t the case we would see prices rise evenly and such disparities would not be of any concern.

 

Since Cantillon’s day, the means of distributing has changed. After all, we are presently on a fiat currency system. It is important to remember that either a precise metal standard or command currency is susceptible to this effect [10]. Obviously, it is easier to manipulate a fiat concern in a manner that increases the aptitude of Cantillon Effects. Clearly, banks and mines were the institutional mechanisms for circulating currency back in the 18th century. In an era of centralized banking and MMT, one needs to look no further than the U.S. Bureau of Engraving and Printing. The modern substitute for the gold mines of our forefathers. In the days of a hard money standard, the gold mines were the point of entry for new money.

Similar to the gold mines, who gets the money first is geographically contingent. Naturally, banks situated near Federal Reserve locations would first receive the money. It is important to remember while the Federal Reserve does not print the money it does exert control on the size of the money supply [11]. There are 12 locations throughout the United States. Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco [12]. Definitely favoring anterior and affluent east coast. As well as interior major cities such as Dallas and Chicago which have well known financial districts. The surrounding institutions in these areas may get wind of freshly printed money and the knowledge to spend the money prior to the purgatorial lull before inflation starts impacting prices. Typically, those working in such circles are white-collar workers. Affluent and well educated.

 

Please notice that they opt to not establish any of their offices in Mississippi. Arguably one of the poorest states in the country [13]. This is why it important to not look at economic policies superficially nor ignore their downstream consequences. Many proponents of government welfare may even applaud the idea of printing more money to fund various programs. Often those who these programs intend to help may merely be disadvantaged by the higher prices caused by inflation. Those with institutional connections are ahead of the curve and spend the debased currency. While they have their true savings tied up in the real estate, stocks, and precious metals.  Making them less marred by the effects of inflation. While poorer people tend to have their savings (if any) in a savings account. Completely dominated in the fiat. I don’t begrudge those who are successful. Cantillon Effects are examples of inequality based on government meddling. Rather than the byproduct of skill, savvy entrepreneurship, or adding economic value to society. Those who benefit certainly benefit at the expense of others. They do not benefit on their own merits.

Price Gouging Laws in the Era of COVID-19-Redux

 

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To all my regular readers I apologize. I know I have already written two blog entries about the subject of price gouging laws.

 

However, I just recently completed a comprehensive essay focusing on the present concerns of price gouging. The topic is still very much relevant considering the strain the COVID-19 pandemic has put on the supply chain as a whole.

 

My latest essay was picked up by the American Freedom Institute. Link to my essay.

Defending Price Gouging

 

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Introduction:

 

Prevailing conventional wisdom dictates that price gouging is immoral. During times of crisis to even contemplating raising prices is considered to be morally dissent.  Especially in times of need, such as a pandemic of highly communicable disease. The act of price gouge tends to be a natural corollary of the most basic economic principles.  Enacting price gouging laws is an attempt to circumvent resolute economic laws. Typically, in the name of “fairness”. Viewing it from the perceptive of pricing equality ignores the inner mechanics of market pricing. To interrupt this process generally leads to less than optimal results. In every regard, price gouging laws are merely price controls with a different name.

 

Various varieties of price controls have their ill effects well documented. One prime example being rent control measures.  Which historically have shown to contribute to housing shortages and deteriorating conditions of impacted housing units (Bennett & DiLorenzo, 1985 P.69-71) [1]. Typically, most people just look at the immediate impact of the policy. Which is it “stabilizes” housing prices. However, the downstream effects of housing shortages and landlords losing any incentive to regularly maintain their properties are not acknowledged. Price gouging laws yield similar effects.

 

Price gouging does perform necessary functions within the market. Operate as an informal safeguard against supply shortages of essential commodities. Most people are concerned with the here and now. The emotional vitriol of feeling ripped-off or the vendor having leverage supersedes economic reasoning. Per the research of economist  Michael Munger, back in 1996 during Hurricane Fran, crowds appalled the arrest of several North Carolina price gouging vendors. These enterprising young men were selling ice at $8.00 per bag.  Despite the jubilation of the crowd over their arrest, the potential patron still lined up intent on purchase $8.00 bags of ice (Munger, 2007) [2]. Clearly demonstrating a disconnect between consumer perception and consumer behavior. If this price was truly inordinate no one would be lining up to buy ice.

 

For the rest of this essay will be dedicated to defending the actions of these aspiring entrepreneurs. As well as all other vendors who engage in the practice of price gouging. Price gouging has several critical functions in managing the market supply of essential goods. It discourages hoarding.  It provides differential compensation to vendors and employees in times of crisis. Finally, it encourages the production of essential goods.

 

Price Gouging Discourages Hoarding:

Has anyone attempted to purchase toilet paper lately? Anyone who has walked down the paper products aisle (toilet paper, paper towels) has noticed an extreme scarcity of commonly available products. Making me question whether or not COVID-19 is truly a respiratory virus or another incarnation of cholera. My poor attempt at humor aside. It is evident that people are conspicuously stockpiling toilet paper. Toilet paper is a shelf-stable product that is relatively low in cost, making an ideal item for hoarding.

The means by which price gouging operates as a deterrent from an item being hoarded is simple. If the price is higher people will be less apt to purchase excessive amounts of the good [3]. This function becomes more imperative as inventory for essential items starts to dwindle [4]. This premise is clearly compatible with the Law of Supply and Demand. If there a large spike in the demand for a specific item the market price will reflect this accordingly. If there is a law in place holding retailers to maintain the pre-crisis price of toilet paper shortages are inevitable. Naturally lower prices will encourage more consumption regardless of the scarcity of the item. Causing decreased availably and even shortages  ( Lee, 2015, P.13) [5]. Higher prices are the natural consequence of an influx in demand. The higher prices serve as a means of regulating supply.

While advocates of keeping prices fair have good intentions, they are typically ill-informed. Price gouging is not a perfect mechanism, it does disadvantage the poor. The question becomes is it better to have expensive toilet paper or no toilet paper. Most people would agree that expensive toilet paper is preferred. Some would suggest keeping the prices on par with pre-pandemic pricing and just impose purchasing limits. A vendor implemented purchasing limit is not full-proof. Is minimum wage enough of an incentive to encourage employees to enforce such company enacted policies? I would surmise not. Government sanctioned price controls would create supply shortages. This presents a similar situation to the rent control example presented previously.

 

Compensating Differential to the Vendors:

 

All because we are in the midst of a national emergency doesn’t mean that incentives fall by the wayside. If anything incentives become more important, especially if vendors are facing substantial risks by providing goods and services. To quote Adam Smith:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. (Smith, 1776, P.25) [6].

 

The message behind this excerpt from The Wealth of Nations is quite clear. No one sells goods or services for the sake of charity. Most vendors are attempting to make a profit. Prices fluctuate with market demand. However, in instances where there is bodily harm for providing the same goods and services, it is reasonable to expect to pay more. As previously mentioned this isn’t charity. The consumer is simply transferring the risk to the vendor. By expecting them to endure the risks inherent in a natural disaster or outbreak of deadly disease. Through braving such dangers I believe a compensating differential is justifiable. Which essential is additional compensation for offsetting undesirable aspects of a specific job, such as bodily harm [7]. Vendors also take on other risks as well. In the instance of a natural disaster, there are additional logistical considerations. Such as damaged infrastructure and lack of utilities (electricity, running water, etc). Beyond that vendors also take on legal risks. Potential fines for violating shelter-in-place orders (Giberson, 2011, P.6) [8].

 

The additional profits for enduring risk are what will incentivize entrepreneurs to continue to provide goods and services. It is a fact that is rarely brought up in a debate concerning the morality of price gouging. Even if you find the decision of business owners to raise prices to be distasteful, consider their employees. Business owners are going to have to pay their employees more to weather such dangerous conditions. If you still believe that price gouging is spurred by greed, remember that most business owners have employees. The hourly employees enduring such conditions need adequate compensation.

 

Price Gouging Encouraging Production:

 

Higher prices not only encourage entrepreneurs to endure more risks but also stimulates production. The incentives of increased profits persuade actors throughout the supply chain. If the price of hand sanitizer goes up exponentially this may persuade companies to divert production. Such as distillery switching from producing liquor to hand sanitizer [9]. If demand for hand sanitizer outpaces that of vodka it would be shrewd to reallocate resources in the direction of market demand. These adjustments in production are swayed by the potential for higher margins.

 

Market prices are the explicit quantification of information. They operate as a signal to the consumer as well as the producer. As was mentioned previously high prices convey short supply to the consumer. Hence why price gouging guards against hoarding. In a Hayekian sense, we are contending with imperfect market information (Zwolinski, 2008, P.16) [10]. If we do not have direct knowledge of the supply of toilet paper or hand sanitizer, what is going to entice us to produce it? The high prices direct production towards essential goods. Craft distilleries are now transitioning to producing hand sanitizer due to the high prices [11]. The high prices are a direct result of the high demand. The high prices convey the toll that overall demand has taken on the supply (Zwolinski, 2008, P.17) [12]. Pricing operating as a signaling mechanism operates as an indicator of how resources are to be best allocated. Government intervening on moral grounds can only cause more issues. The asymmetry in market information makes it impossible for a top-down solution to make pricing more equitable.

 

Conclusion:

 

Despite the conventional view of price gouging, it does play a vital role in managing the supply of essential goods in times of emergency. It stifles hoarding. It provides just compensation to vendors for assuming the risk and other logistical hardships in crisis conditions. It operates as a signaling model for resource allocation.  Spirited repudiations of the practice are well-intentioned but misguided. No one likes to feel ripped off. No one likes to see people who are disadvantaged suffer. However, there are justifiable reasons for the sharp increase in prices.

The jubilation of the crowd after the gentlemen selling ice (back in 1996) were arrested is understandable. Much like the advocating for fair pricing, this reaction is based upon faulty assumptions. Typically is indicative of anti-market bias.  Which is defined as “a tendency to underestimate the economic benefits of the market mechanism” [13]. Anti-market bias explains the amount of class envy and undue contempt aimed at the wealthy. This is also the narrative that fuels a lot of the irrational and debunkable claims about labor unions. Certain regulations and even specific forms of taxation. It is easy to be outraged by higher prices. It takes more effort to attempt to understand why prices are so steep.

 

 

 

 

 

 

 

Arizona Doesn’t Have Any Price Gouging Laws?!

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Amid the COVID-19 pandemic, many have witnessed an economic phenomenon that is synonymous with times crisis. That is the practice known as price gouging. This practice has the proclivity to ignite a universal cascade of outrage and indignation. Superficially such a reaction seems understandable. Considering by definition it is a sharp increase in the price of a good that is in high demand [1]. On the surface, it would seem morally base to take advantage of an emergency situation such as a hurricane. The general consensus would extend to the outbreak of an emergent pathogen such as COVID-19.

 

There is a general consensus on pricing gouging is morally objectionable. However, there isn’t much agreement on what constitutes price gouging. Approximately two-thirds of all states have some sort of price gouging law on the books [2]. It appears as if most states have a different interpretation of what price gouging entails. For instance, the state of Alabama provides clear and concise guidelines for defining price gouging :

Ala. Code §§ 8-31-1 thru 8-31-6

Prohibits “unconscionable prices” for sale or rental of any commodities or rental facilities during a declared state of emergency. A price is prima facie “unconscionable” if it exceeds 25% of the average price during the last 30 days immediately prior to the declared emergency and that increase is not attributable to reasonable costs. [3]

 

In contrast, the state of Texas provides a vague description of what is considered price gouging. Per Texas state law: “exorbitant or excessive” prices in connection with sale or lease of necessities during a declared disaster” would be illegal [4]. What defines “exorbitant” prices? I would not suggest that there should be federal standardization of price gouging laws. That should be left up to the states. At the very least be clear about the parameters defining the criminal act. Too much ambiguity can make enforcement problematic.

I currently reside in the state of Arizona. Arizona does not presently have any price gouging laws enacted. It is speculated that the reason being is that natural disasters are a rare occurrence [5]. Being a mountainous and landlocked state we are insulated from tornadoes and hurricanes. We have the good fortune of not experiencing the seismic activity that afflicts California. The prospect of a natural emergence putting a strain on the supply of essential goods is relatively foreign to Arizona. The one exception being the event of the 2003  Kinder Morgan pipeline burst. Which resulted in fuel shortages [6]. The significant increase in fuel prices passed along to the consumer was viewed as exorbitant [7]. Many residents at the time viewed it as vendors supplying fuel were engaging in some form of price gouging.

Seventeen years later some are now calling for corrective action to price gouging in Arizona[8]. Many vendors have been reacting to the COVID-19 outbreak with higher retail prices on essential goods. These higher prices are due to an increase in demand and the stockpiling of commodities such as toilet paper.

Personally, I am very incredulous when it comes to price gouging laws from an economic standpoint. Being a proponent of states rights’, Arizona can in my view pass price gouging laws. As states should cater their laws to what best suits their economy and culture providing it does not violate the Constitutional. Due to such measures not being pertinent in Arizona prior to COVID-19 is why such laws did not previously exist. I do know of at least one person who has referred to Arizona as “backward” for not having such laws in place. This is a misguided opinion.

As I mentioned earlier Arizona is relatively isolated from circumstances that would make price gouging more prevalent. This isn’t like hurricane-prone Florida or South Carolina not having price gouging laws in place. There is also the implied assumption that more laws and regulations are a net good for society. States and municipalities with fewer laws are unevolved. A law that is  either pointless, ineffective, or unjust is not universally positive due to the fact is merely another constraint.

 

I grew up in New England where there are still a litany of archaic laws and ordinances still on the books. What is colloquially known as “blue laws”. Laws that are no longer culturally or economically relevant. Frequently prohibit actions that most likely victimless crimes. While some history buffs find these laws quaint and harmless, I disagree. Even if these laws are never enforced, philosophically I oppose them. What is the purpose of laws? Depending on your answer to that question, it will shape your perception of what laws are just and reasonable. I feel that most blue laws only reinforce my rejection of legal positivism. The law should not determine what right, but it should protect what’s right. This perspective is codified in our Bill of Rights. Nowhere did I see any guarantee of economic equity or immunity from making bad decisions. The Bill of Rights were  established on the grounds of natural rights. Suppose to government decree and guarantee of positive rights.

 

In my next blog post, I will discuss why price gouging laws are economically illiterate. If lawmakers here in Arizona are persuaded by public outrage, I can only hope that they are reasonable. Provide firm guidelines that define what constitutes price gouging. That they opt for justifiable limitations. Unlike, Connecticut which cites any increase in prices during a  time of an emergency as illegal [9].

COVID-19 and The Rejection of Civility

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Amid all the chaos spurred by the COIV-19 outbreak, the deterioration of civility seems inevitable. People are being reduced to quarreling and fight over toilet paper. Conflicts over cases of bottled waters and other forms of provisions are becoming more prevalent. Such emergencies have the proclivity to bring out the worst in people. Similar occurrences aren’t relegated to this one instance. Look no further than the looting that transpired during Hurricane Katrina. The line between civilization and lawless chaos is razor-thin. All it takes is one natural disaster or national emergency to shift incentives away from cooperation to antisocial behavior.

 

Social Psychology has a litany of various theories to help explain the descent into pillaging and violence. Describing the psychological mechanisms driving mob behavior does explain the behavioral element of such actions. However, it fails to address the deeper moral questions of the “temporary” erosion of civility. It is reasonable to question whether this loosening of societal standards would be temporary if the precipitating circumstances remained. This question can only be indulged with pure conjecture. I would be so bold to suggest that the circumstantial decay of social standards serves as an indictment on the Enlightenment.

 

I am not addressing concepts of the Enlightenment but the intellectual movement of the whole. It was the thinkers of this era that lead us from the barbarism of the dark ages to the relative calm of modernity. To avoid falling into the trap of the Whig interpretation of history, the Enlightenment did not nullify classical philosophy. Rather expanded upon it. The Enlightenment is what orientated the Western world towards poverty rights and the rights of the individual. Neither can be validated in a climate of wanton destruction and disregard for your neighbor. In times of panic, we revert to our fight-or-flight reflect negating reason, principles, and decorum. Reducing our behavior to that of Neanderthals. Fear is antithetical to reason. Making it caustic to the clear thinking required to respond in a civilized manner. Causing us to plummet to the mentality of primitive man.

 

Many may see this phenomenon of “disaster panic” as a temporary rejection of Enlightenment ideals. I would argue otherwise. I would contend that many people never acquainted with the moral considerations or etiquette required for civility. There are a lot of people that behave rudely even under regular circumstances. Compound their incentives for boorish deportment with fear, society unravels rapidly. Which makes it reasonable to question whether the Hobbesian conception of human nature is true. It appears as if the rule of law is what typically constrains transgressions such as assault and looting. It should be noted that in the instance of the present crisis that this isn’t necessarily true. In most municipalities throughout the United States, law enforcement agencies are still operating. The fear of punishment can be ruled out as a constraint on antisocial behavior. But such behavior demonstrates a deep-seated lack of respect for property and fellow person.  Vandalism and theft demonstrate a lack of respect for property rights. Violence and confrontation displaying a lack of respect for our fellow person. Behavior falling short of the movement inspiring liberal values. The precepts that helped levitate Europe out of the squalor and pestilence of intellectual and physical serfdom.

 

What enforces mutual respect of person and property are informal social norms. Once panic sets in the strength of these norms are greatly reduced. It isn’t true respect, but rather an overt avoidance of opprobrium from our peers. Which does not demonstrate a true comprehension of person-hood or natural rights. Rather punishment avoidance. Merely an informal form of punishment evasion. An individual possessing a true understanding of natural rights would be able to reason why it is wrong to punch someone over a pallet of toilet paper. Not abstaining from such an action due to the consequences of legal or social punishment. Classical thinkers tended to believe that action in of itself wasn’t righteous unless the intention of the action was also righteous.  While we are veering slightly from the thought of the Enlightenment there is still quite a bit of truth here. If respect for person and property is not instilled in us on an intellectual and moral level it will not remain resolute. When the comfort and security of modernity frays so will our courtesy and civility. Then comes the downfall into a primitive mindset.  Hence, why I question if humans ever really adopted or even understood the ideals of the Enlightenment. Because if we did we would be able to better manage our savage urge to pursue self-preservation. If so, we would be reduced bludgeoning one another over toilet paper.  Then again, such conduct has been evident over so much less. Such as a $5.00 toaster on Black Friday. This leads me to postulate that we do not even a time of crisis to witness such regressions.