Tuesday, July 31, 2012


1. Fractal Politics.

It was either Adolf Hitler or his propaganda minister, Joseph Goebbels, who said that the people will believe any lie, if it is big enough and told often enough, loud enough. Although the Nazis were defeated in World War II, this part of their philosophy survives triumphantly to this day among politicians, and nowhere more so than during election years. -- Thomas Sowell

Venality, cynicism, deceit and conscious exploitation of their offices have come to be the governing characteristics of the overwhelming majority of our elected officials. Some are so completely "converted" to the gospel of "Power Uber Alles" that they'll literally lie to our faces, as Barack Hussein Obama and his closest henchmen have recently done. The exceptions -- thank You, God, that there are still some -- are fewer in number than ever, and terribly besieged.

As the Chinese say, "The fish rots from the head." The blatant disregard of right and wrong displayed by federal officials has "licensed" their counterparts at the state and local levels to do similarly. Time was, local Tammanites (my neologism; analogous to "Sodomites," but concerning political rather than sexual corruption) believed that a high degree of discretion was essential to the preservation and perpetuation of their powers and privileges. This appears no longer to be the case.

But wait: there's more! Endemic political corruption cannot be confined to persons in or pursuing high office. It invariably reaches the "civilian population." The mechanism is the use of income redistribution and licensure of various forms to evoke partisan allegiances from identifiable sectors of the nation. The practice spreads according to its internal dynamic, such that over time, an ever greater fraction of the nation will choose to support one party over the other as "boughten loyalists."

Exit from the pattern is via either an access of patriotic idealism, maximized cynicism, or corruption blatant enough to elicit impeachment or indictment at the top. As the fish rots from the head, it must also be cleansed that way.

As the Wiccans say, "As above, so below."


2. The Dog Days Of Summer.

While we're on the subject of cynicism, an interesting video on FOX News this morning proposes several approaches for curbing the "summer slacker season." It's a recognized phenomenon, especially among white-collar workers, that when school is out and the weather it warm, we work fewer hours per week per capita, and generally display lower productivity than at other times of year (except for the pre-Christmas Octave season, which might even be worse).

Toward the end of the video, the interviewee makes an important point: companies that try to "compensate" employees for the "pain of the choice" between work and other opportunities with company-organized outings and other extrinsic rewards are missing the point. Such things actually sharpen the pain by adding new quasi-obligations to the worker's vistas. The most fruitful approach is to make work and the workplace attractive, involving, and interesting: in other words, intrinsically rewarding.

As usual, the great Robert C. Townsend put it best:

"It isn't easy, but what you're really trying to do is come between a man and his family. You want him to enjoy his work so much he comes in on Saturday instead of playing golf or cutting the grass." -- from Up The Organization: How to Stop the Corporation from Stifling People and Strangling Profits


3. Medicine, the Healer’s Ethic, Turf Wars, and ObamaCare.

Guy Benson aggregates a few of the "outrider" effects of ObamaCare in his Tipsheet entry for today. It's too important to excerpt; please read the whole thing.

That there will be further deteriorations in the availability of medical care and products is both inevitable and wholly apparent, by the laws of supply and demand, unless a Romney Administration should succeed in repealing the PPACA. But some of the second-order effects are less visible, and therefore less well appreciated or understood:

  • Doctors animated by the Healer's Ethic -- i.e., those who entered their fields because helping others toward better health, less pain, and longer lives is their #1 personal priority -- will gradually be outnumbered by doctors animated by less praiseworthy motives. The better ones will naturally be severely tested by the floods of patient preferences for them.
  • Medical schools, their enrollments severely pressed by the changes in incentives and disincentives to practice medicine, will lower their admissions standards, resulting in less intelligent, diligent, and ethical doctors.
  • Those doctors will engage in union-like conflicts with one another over "turf:" which sorts are permitted to diagnose what sort of ailments, prescribe what sorts of medications, and perform what sorts of treatments. Some such conflicts could get very ugly indeed.

I had a personal preview of the "turf wars" we can expect just yesterday afternoon. My orthopedist, upon learning that my PCP had ordered MRIs of my shoulder without first consulting him, was visibly angry. Indeed, he harped on it, to the extent of both refusing to believe that she'd ordered the right ones and differing diametrically with the radiologist's interpretation of the images. I was sorely tempted to ask for another specialist; indeed, I'm not sure why I refrained.

You don't need a weatherman, folks. Truly, you don't. Just ordinary intelligence and a common-sense assessment of ObamaCare's provisions.


4. Informal, Self-Administered Shoulder Therapy.

Apropos of matters medical: Laughter is the best medicine, or so the old saw goes. And indeed, it's made my affliction easier to bear when I've managed to retain my good humor, which is made far easier by the application of music. But there is a downside:

  • Not everyone will share your taste in music;
  • If you share my tendency to "join in," you must be aware of your surroundings; there are numerous environments in which singing or whistling will get you "looked at" or worse;
  • Most singing or whistling is at least somewhat degraded by issuing through clenched teeth or accompanied with gasps of pain.


Monday, July 30, 2012


[This is a segment from Freedom's Scion, the sequel to my novel Which Art In Hope. Consider it a teaser; the voyages of Althea Morelon are taking me some time to complete. And yes, Althea’s vessel was named after this website...or was it the other way around?]

By the time Liberty’s Torch had reached the outer margins of the G2 star’s system, Althea had slowed to 50 miles per second. The lidar returns she had interpreted as evidence of habitation while in the cometary zone had grown far stronger. A large artifact with a visible-light reflectance of nearly 100% orbited the third planet from the primary. She corrected course minutely and slowed still further.

The object was all too obviously a space station. It was emitting electromagnetic radiation in regularly spaced pulses, at a wavelength of 1215 angstroms. Liberty’s Torch’s receivers classified it as an attempt to communicate. Althea braked still further and activated the recorders, but made no immediate attempt to interpret the signal stream.

Should I reciprocate? Probably it would be no more intelligible to them.

She activated the communications laser and spliced in the voice output.

“To the entity or entities aboard the space station,” she intoned, “This is Althea Morelon, mistress of interstellar vessel Liberty’s Torch. My people call our world Hope. Our primary is about...” She paused for thought. “About as far from here as light will travel in eleven of your revolutions around your primary star. My intentions are peaceful. I wish to make contact, but I’m uncertain how to proceed. If you can interpret this message, please respond in kind with your rules for a visit to your system and for docking with your station. Liberty’s Torch will loiter here until I hear from you.” She disconnected the voice output and waited.

If they can tight-beam Lyman-alpha radiation that I can detect from the cometary belt, they have to have one helluva power source aboard that station. I’d better play very, very nice.

The answer arrived at once, in a musical alto voice.

“Welcome to Loioc system, Mistress Morelon. We have awaited your arrival with much pleasure. Please brake to approximately one-fifth of your current velocity while we analyze your vessel’s hull and compose docking instructions.”

Althea put a tight rein on her rising excitement and complied.

* * *

The Loioc were bipedal and humanoid. Unless the pair that awaited Althea in the station’s docking bay were non-representative, they stood somewhat shorter than Earth-derived Man. The more closely she focused on either one, the more apparent were their subtle deviations from Terrestrial humanity. Their proportions were slightly different, possibly owing to having adapted to a stronger or weaker gravity. The resting angles of their limbs diverged slightly as well. Their faces were exquisitely beautiful, as human as anyone could wish, and their smiles as welcoming as any she had ever seen.

She doffed her helmet and took her first breath of their air. It was rich with oxygen, and carried a subtle hint of sweetness.

“Yes,” the one on the left said, “our respiratory needs are a good match for yours as well. Welcome to our home, Mistress Morelon. How may we make you comfortable?”

“Well,” Althea said, “for starters, you could tell me how to address you.” And maybe fill me in about how you learned to speak English.

The one on the left nodded. “I am called Efthis. My husband,” she said, turning to her left, “is named Vellis.” She took his hand, and he gazed at her in evident affection. “No doubt you are curious about my mastery of the English language.”

Althea chuckled. “Well, yes.”

“These past 1500 years,” Efthis said, “Hope has emitted radio signals of sufficient variety for us to deduce virtually the whole of your tongue. Indeed, we have watched your world from the beginning of your ancestors’ flight from Earth. We have long looked forward to meeting you.”

“Is yours a spacefaring race,” Althea said, “apart from this station?”

“It was once,” Efthis replied. “No longer. In fact, this is the only offworld presence our race maintains.”

Althea frowned. “Why?”

Efthis’s gentle smile acquired a hint of world-weariness. “Let us say we saw all that we wished to see, and somewhat more.” She glanced at her husband and nodded toward the interior, and he nodded in response. “Come, let us refresh ourselves together, and I shall tell you whatever you might wish to know.”

They turned as one, and Althea followed them into the depths of the station.

* * *

“I don’t believe it,” Althea said.

Efthis cocked a hair-thin eyebrow. “Surely your people enjoy a warm bath after a day of exertion?” She swiftly divested herself of her coverall. Vellis followed suit, and the two climbed into what was plainly a large hot tub.


But in company with a couple of aliens? All right, they seem to be very nice aliens...so far, anyway.

Oh, what the hell.

She unzipped her vacuum suit and stepped out of it, then removed her own coverall, tossed it aside, and took a seat in the tub facing her hosts.

Vellis’s eyes immediately fixed upon her, wide in undisguised fascination. He looked pleadingly at his wife. After a moment’s reflection, she nodded.

“Vellis would like to touch you,” she said. “Would you permit it?”

“Uh...” Oh, why not? They’re probably puzzled that I’m not just as curious about their bodies. “Sure, okay.”

Vellis flowed across the water between them so swiftly that he was upon her before she realized it.

“Upon her,” indeed. The Loioc male immediately wrapped himself around Althea, arms and legs both. He squirmed against her in a powerfully erotic fashion. His erection probed for her vagina with no pretense to the contrary. The surprise of it paralyzed her.

“Efthis,” she croaked, counter-squirming to keep Vellis’s phallus from finding the orifice it sought, “just what is Vellis doing?”

Efthis frowned. “He’s trying to merge with you. I would have thought that was obvious. Are you offended?”

“Uh, no, but...” Are you? “Why?” And why hasn’t he said a word since I arrived here?

“You’re very beautiful,” Efthis said. “Wouldn’t a male of Hope want to merge with you? Or is it not permitted for some reason?”

“Well, uh, yes, it’s...permitted,” Althea said. You think I’m beautiful? Vellis’s squirming was becoming frenzied. He had begun to whimper with frustration. “But this is...a bit sudden.”

Efthis shrugged. “It’s up to you. Enjoy him as you wish, and for as long as you wish.”

I’ve got to ask.

“Maybe later.” She forced her arms between her and the squirming Loioc male and thrust him forcibly away. Vellis shrieked at the separation. He wriggled frantically in an attempt to re-establish the embrace.

“Efthis,” she said in a carefully controlled tone, “Vellis is mute, isn’t he?”

Efthis frowned again. “Of course. Isn’t it obvious?”

Althea nodded, holding the agitated male firmly away from her. “Is it by accident, or was he born that way?”

The Loioc’s frown deepened further. “Born that way, of course.” She emitted a whistle of elaborate modulation. Vellis immediately ceased to struggle against Althea’s restraint. She relaxed her grip, and he returned to Efthis’s side with obvious reluctance.

“Well,” Althea said, “you must love him very much.”

“Love?” Efthis said. “How does one love a nonsentient?”


“Vellis is incapable of rational thought. He’s been conditioned to be loyal to me. He knows nothing of love, no more than an animal of the field.”

“But...” Althea groped for words. “Your husband?”

The Loioc woman nodded. “Yes. He husbands me. He fertilizes my eggs, when and as I permit. He need not be sentient for that.” She leaned forward to peer more closely into Althea’s face. “All our males are nonsentient. Just as yours will be, in time.”

* * *

Vellis protested with a whimper that was nearly a howl, but Efthis spoke sharply and stamped one delicate foot, and the Loioc male became submissive. At his mistress’s direction, he went reluctantly into a room whose sole occupants were a thin mattress, a hassock, and a large box filled with some crumbly substance, sat upon the hassock in a peculiarly canine fashion, and bowed his head. Efthis swung the room’s door, a grate of closely spaced metal bars, closed with a muted clang and twisted a knob that sent a deadbolt home. She turned back to Althea with an expression of chagrin.

“I must beg your pardon,” the Loioc said. “Despite all the study we have made of Hope and its people, I had momentarily forgotten that you allow your males to remain sentient. Indeed, that fact has caused no small amount of consternation among our people. We have awaited true, bidirectional intercourse with you with great eagerness for that reason among others.”

We allow our males to remain sentient?

“I had assumed,” she said, measuring out the words, “that this...condition was a consequence of some unfortunate cosmic phenomenon. Maybe a radiation field that sweeps cyclically through the galaxy, or something like that. You...engineered it? Genetically?”

Efthis had led her to a rather conventional-looking kitchenette, complete with sink, faucet, counter, table, and chairs, and bade her to sit. The Loioc pulled open a large metal cabinet, extracted a pitcher and two glasses, and brought them to the table

“This is called ‘kiara,’” Efthis said. “It’s a fruit juice, moderately sweet, with a mildly acidic tang. You might enjoy it. Would you like to try it?”

“Efthis...” Althea said, “I do appreciate your hospitality, but how do I know it’s not toxic to me? Just because we look alike?”

Efthis smiled. “I had your body chemistry analyzed while you were in the bath with us. Our metabolisms are nearly perfectly identical. What would poison you would be equally lethal to me, if not more so.”

“Why did you do that?”

The Loioc gestured at the pitcher. “To know whether we could do this, for one thing.” She poured generous helpings of juice into both glasses and passed one to Althea. “For another, so that I could be certain that my body-maintenance devices can repair you, should you come to any harm while you are my guest.”

Althea started to say got my own, thanks, and held her tongue.

“So you’re completely self-sufficient here? Food, clothing, medicine, energy, diversions all taken care of?” She sniffed at the glass of kiara. Its aroma was as Efthis had described it: moderately sweet, with a citrus-like tang. Unsure of the proprieties but unwilling to proceed solely on Efthis’s assurances, she set the glass down and pushed it a little away.

Efthis nodded. “Completely. It was a condition of the assignment. To be supplied with our necessities from groundside, with all the complexities and intrusions that would entail, would be entirely too troublesome for all concerned.”

“But you could return to the planetary surface if you chose, couldn’t you?”

“Oh yes,” Efthis said. “We have a one-way vehicle docked on the other side of the station.” She smiled. “Believe me, from time to time these past eight years, I’ve felt the urge to return. However, my relief won’t be ready to assume her duties for another two years, so it would be viewed with disfavor.”

She and her...husband must have a lot of ways to keep occupied.

“Concerning your earlier question,” the Loioc said, “yes, we quenched the sentience of our males by decision and design. Before we did so, our world was riven by every kind of strife and madness. Loioc males were quite as aggressive and proprietary as yours, and we females could do little to mitigate their tendencies toward violence and destruction. The nations of our world were almost continuously at war, until the breakthrough.

“About six millennia ago, a great geneticist isolated the constellation of genes and alleles that give rise to a brain capable of sentience and rational thought. It was well that she was female and discreet. She immediately conceived of the application to the pacification of our race, and set about assembling a team that would construct a nanomachine that would unmake the sentience constellation in our male progeny. As soon as they were certain it was effective and safe, they flooded our waters with the devices. Within fifty years, there was virtually no violence among us.”

She glanced back at the door of Vellis’s cell. “We had a few regrets, of course. Society was more dynamic, and more interesting, before we unmade our males’ minds. But the consensus was that social and economic stasis would be a small price to pay for the elimination of the horrors male aggression had brought us. At any rate, that door is closed forever. The nanomachine is self-replicating. The waters of our world are saturated with them, and they can never be seined out.”

Althea suppressed her desire to shudder and did her best to smile.

“If you had asked your men whether they would agree to be...pacified that way,” she said pleasantly, “do you think any great number of them would have said yes, do it?”

Efthis shrugged. “Possibly not, but what does it matter? The moral imperative was too obvious to permit resistance. We know all too well what develops when male aggression is permitted to operate unchecked.” She waved an elfin hand. “You would not find a Loioc anywhere below who’s unsatisfied with the arrangement.”

Except the ones who can no longer say so.

“I think the women of Hope would have a different opinion,” Althea said. “We love our men as they are. I can’t imagine perpetrating the sort of...adjustment on them that you’ve inflicted upon yours. In fact, among us what your great geneticist did would constitute an unimaginably vile crime, the rape of an entire species. She would be ostracized for life if she were even to suggest it.”

Efthis smiled indulgently. “Is that why you haven’t touched your kiara, Althea?”

Despite her resolution to maintain her reserve, Althea felt a snarl form on her features.

“What do you think, Mistress Efthis?”

“I think you need not deprive yourself,” Efthis said. “You’ve been thoroughly infused with the nanomachines since a few seconds after you stepped into the bath. We are no more willing to allow your males than ours to pollute our galactic neighborhood with their violent ways. You will be the instrument of their gentling.”

A tidal wave of fury surged within Althea Morelon. She reeled from her sudden, all but overpowering desire to smash, kill, and lay waste around her.

“When I return to Hope,” Althea ground out, “the men of my world will very likely construct and commission an expeditionary fleet—a well armed fleet—and send it here. I can’t be certain what they’ll do when they get here, but I doubt you and your sisters below will find it pleasant.”

The Loioc’s smile turned superior.

“Then you will not be returning to Hope.”

“Oh? Do you have a way to stop me?”

Efthis rose from the table, turned toward a dim corridor into the station, and indicated that Althea should follow.

* * *

“The mechanism you see via this viewscreen,” Efthis said, “occupies most of the volume of this station. It generates a high-intensity muon flux that permeates the galactic disk for two hundred light-years around. It’s powered by our sun, it’s self-repairing, and it cannot be turned off. Alone of all the children of Earth, you have learned how to negate the effects of that flux and relax the so-called speed-of-light limitation. But since you passed within the cometary belt, the flux has been far too intense for your ship’s onboard superluminal drive to countervail. Nor will it avail you to exit our system on fusion thrust alone, for the suppressor has already infiltrated and taken command of your drive. You will not achieve interstellar velocities again unless I permit it.”

Althea gazed in silence at the huge, faintly humming machine that held her prisoner.

I never thought I’d find a machine that’s an abomination, all by itself, just because of what it can do.

“What’s the price for my freedom?” she said at last.

Efthis turned toward her, a glittering metallic torque in one hand.

“You must wear this. It contains an advanced artificial intelligence, equipped with a full suite of environmental sensors, that will sense any attempt to violate the ethical constraints programmed into it. It also contains a generator capable of shocking you into unconsciousness, which will activate at any attempt, even a dubious one, to commit a violation or to remove it from your body.” Her expression became smug. “It’s how we restrain our few remaining lawbreakers without having to incarcerate them.”

“How clever,” Althea said. “I suppose I’ve no choice. But may I ask a question first?”

Efthis cocked an eyebrow.

“How do your sisters travel the galaxy?”

The Loioc frowned. “We don’t. The suppressor’s speed-of-light restriction binds us as firmly as any other world within the machine’s radius of effect.”

“But a race as advanced as yours must be working on something, surely?”

Darkness touched Efthis’s features. “Of course. We’ve been researching teleportation for centuries, but so far it’s remained out of reach. Entropic effects arising from the energies required fatally disorder anything we try to teleport.”

“I see,” Althea said. “Has it ever occurred to you that those effects might be due to an even more advanced race’s suppression of your desire to wander the stars?” She gestured at the viewscreen. “Just as you’ve used that machine in there to confine the peoples around you?”

Efthis’s mouth dropped open. She glanced at the huge machine, Althea moved with sudden, violent speed, and the Loioc fell to the floor unconscious.

“Bitch,” Althea muttered as she hoisted the smaller woman into a fireman’s carry. “Never tell a Morelon there’s something he can’t do. Now just where do you keep your stash of rope?”

* * *

It took a while to locate the reentry vehicle Efthis had mentioned and secure the unconscious Loioc female inescapably in one of its seats. It took still longer to persuade the badly frightened Vellis that Althea meant him no harm, that it was safe to leave his cell and go where she directed him. Eventually she had the two properly strapped into their anti-acceleration chairs and ready for launch.

One more thing to see to.

She returned to Liberty’s Torch, powered up her voice recorder, and dictated a brief message.

“This is Althea Morelon, mistress of interstellar vessel Liberty’s Torch from Hope, approximately eleven light-years out toward the galactic rim. I’ll be returning to Hope in just a little while, to tell my compatriots all about your society. I expect my reports will make them very angry. I expect that they’ll decide to do something about you...and that the time you’ll have to brace yourselves for our next visit will be a lot shorter than you’d like.

“As you can see, I’ve returned your sentinels—excuse me, your gaolers to your loving arms. Don’t treat them too harshly. They did their best. They just didn’t reckon with having to face a Morelon. Anyway, try to smile about it all. I’m leaving you a present. Before I depart your system, you’ll have the same interstellar potential I’ve contrived for us of Hope. Think you’ll be able to make use of it without the help of your menfolk?

“That’s all for now. Althea Morelon signing out.”

She transferred the recording to a memory cartridge, returned to the reentry craft, and tucked it into a pocket of Efthis’s coverall. As she made to leave, Vellis looked up at her and whimpered.

“Sorry, fella,” she murmured. “I can’t do a thing for you. Maybe we’ll be back to help your kids, some day.”

She stepped out of the hatch and closed it behind her.

* * *

When Liberty’s Torch’s sensors showed the reentry craft to be safely beyond Efthis’s station, Althea seated herself at the command console, reached for the fusion drive igniter, and took a deep breath.

What right did they have? How on Hope—strike that; how in the galaxy did they convince themselves that this was their prerogative?

Women have been civilizing the men of Hope for fifteen centuries. We’ve never needed to geld them. They’ve fought no wars. They’ve taken no slaves. They’ve erected no States, which is where all the other horrible ideas always came from. Maybe doing it our way, with love and devotion and lives filled with family and enterprise and riches, just seemed to the Loioc women like too much work.

The more fools they.

She lit the fusion drive, sent power to the attitude thrusters, and slowly circumnavigated the station.

The fusion plume bathed the station from end to end. It was tough; it had to be to accept, contain, and direct the energies required for its duties. But it wasn’t nearly tough enough to resist temperatures kindled in the heart of a star. Within minutes, the shell of the station had softened and turned to slag. The shell and all its contents were no more than plasma shortly thereafter.

Althea nodded in satisfaction and made to exit the system.

As soon as I’m under Cerenkov drive, I’m getting into the medipod. With luck, it will find the nanites and strain them out of me. Without...

She had to be certain she’d been thoroughly purged of them before she would allow herself to return to the surface of Hope.


Sunday, July 29, 2012

Why Murray Rothbard is Wrong About Sales Taxes...and Monopolies

This will probably be the most technical post I've ever written. I will need a lot of graphs and diagrams to explain things.

Unfortunately, most of these will be graphs of supply and demand. I don't really like using supply and demand arguments, especially in graphical form, because I think that this form of argument is often used in place of actually understanding the situation. It is easy to fool yourself both of your understanding and of the certainty of a conclusion by drawing it up in a technical-looking graph. I suppose this is because graphs can convey the illusion of mathematical certainty and precision of thought, even when it isn't necessarily present. In the case I will be discussing -- the incidence of sales tax and the possibility of attainment of a monopoly price -- I think that there has been some confusion about what a graph actually shows, which I think has led a lot of people into a conceptual error.

I will begin with a basic layout of supply and demand schedules to show how subjective valuation information can be used to construct graphs of supply and demand. Then I will do something a bit unusual with them to make a point about what I think are errors of analysis applied to the types of graphs Rothbard uses in discussing monopoly and the incidence of taxation.


In the earlier chapters of Man, Economy and State, Rothbard describes how supply and demand schedules can be used to create graphs of supply and demand and determine market pricing behavior, which, for my purposes, can be condensed into something like this--

Suppose that 7 buyers and 7 sellers of a certain good meet at a marketplace, and their individual subjective valuations for the item are as follows --

Each seller has one item for sale, and each buyer is interested in purchasing one item.

From this information, it is easy to arrive at the available supply and demand of the item. Supply can be determined by counting how many sellers would be willing to sell their item at a given price or below. Demand can be determined by counting how many buyers would be willing to purchase the item at a given price or above. This gives the following supply and demand schedules --

Here one can see that under these conditions, 4 items will be sold -- at the price-point where quantity supplied and demanded are equal -- and the market price will be $3.  Sellers 4,5,6 and 7 will sell to buyers 1,2,3 and 4.  Graphing the two curves gives the following supply and demand graph --

This is, of course, rather crude. For most markets, there will be many more than 7 buyers and sellers, and multiple items will be bought and sold, etc. I will also neglect Rothbard's discussion about the discontinuity of the graphs (basically, supply and demand cannot be continuous mathematical functions because each valuation is discrete and corresponds to an individual) because it isn't really relevant here. This is just an illustration.

There are two far more important reasons why this analysis does not directly apply to normal markets. The first is that in this case, many of the sellers have some considerable valuation of the item in question. Such a situation might apply at a flea-market or garage sale, but most of the time, sellers simply want to sell whatever they have produced because they have no use for their inventory themselves and usually do not wish to store it. At any given time, the supply curve will tend to be vertical or near vertical at whatever quantity is presently being held, and the seller will simply take what money he can get on the market for it. If he has made a mistake and oversupplied his market, he will cut back production going forward, but he can hardly withold existing product for long because he has bills to pay and must put his capital back to work.

The second big reason is that this analysis is kind of like playing poker with the cards up. The whole game of poker consists in not knowing what cards the other players have. Likewise, in a market, nobody is going to reveal his own subjective valuation for others to see, so buyers and sellers are operating in the dark. Each one is really operating on only two data points -- his own valuation, and the price the item has exchanged for in the past. Everyone knows the 'going price' for the item in question, and what he himself is willing to pay (or be paid) for it. Once the 'going price' on the market is established, buyers are not going to offer much more, and sellers are not going to accept much less, until such time as it is clear that conditions have changed.

In the extreme, a market as experienced by its participants might really 'look like' the following --

The market price is X, there is Y quantity available at this price, and that's that.

So, in practice, supply and demand curves will be 'experienced' by buyers and sellers in a very different fashion than he first graph would suggest. This is important to understanding Rothbard's arguments. All the graphs he uses to argue about monopoly and the effects of taxation come with the important modifier of expressing the demand curve 'as it is experienced by an individual producer.' In other words, he is not drawing graphs of subjective valuation schedules, he is drawing graphs of demand as experienced by firms competing for consumer spending.

Drawing a horizontal line through the market price of the first graph reveals an important concept that this way of viewing things will tend to overlook --

The effect of markets is to cause transactions to occur at a uniform price regardless of the valuations of the individuals making the transaction. All one can know is that the exchange took place because the two parties valued the object differently, and therefore, the uniform rate of exchange established by the market will in large part not reflect the valuations of most of the buyers and sellers who engage in trading. Only for marginal participants -- those with valuations very close to the market price -- will the price reflect their actual valuations.

For the others, there is a substantial 'consumer surplus' of value which the trader enjoys because he has not had to pay anything close to his own valuation of the good in order to acquire it. If the reader has ever thought to himself, 'Wow! What a great deal!' he is giving expression to this phenomenon. In fact, if one thinks about it, most purchases really are of this type. It is what free-exchange is all about, mutually beneficial transactions, and is one of the very great things about markets. But as far as this discussion is concerned, the existence -- indeed, the ubiquity -- of consumer surplus means that for the vast majority of buyers, a higher price of the good would not have dissuaded the buyer from making the purchase in and of itself.

What keeps prices down -- and up, for that matter -- is the existence of choice. It is because there were multiple sellers that the high-valuation buyers did not have to pay their full subjective valuations to receive the good. Likewise, it is because there were multiple buyers that the sellers did not have to settle for a price exactly equal to their own valuations. If there had been no choices of whom to do business with, buyers and sellers would have been forced to deal with only one other party, who could have named his price right up to the highest or lowest valuation as it served his interests.

In terms of demand curves, the existence of choice -- which is to say, competition -- tends to flatten the curve as it moves beyond the market price. Other sellers will accept the market price, so why should the buyer offer more? Thus, the demand curve as experienced by an individual producer will not reflect the actual valuations by consumers. Each individual producer will experience a high elasticity of demand above the market price. A higher price will meet with a drastic reduction in quantity demanded, such that total revenue falls if there is any attempt to raise prices.  Each producer will also likely experience a high elasticity of demand below the market price as well, as buyers of his competitors goods switch to his good, though for the purposes of this discussion this is mostly irrelevant since it will not profit the producer to do so.

What will the demand curve look like under these circumstances, and from this point of view? It will probably be a little different for each product, but in general, I should think there would be some sort of 'bend' near the equilibrium price point. Above this point, buyers of the good will change their preference to another competing good, and below this price buyers of competing goods will migrate to this product. I would think that these two processes would occur at different rates, since there will generally exist at least some 'product loyalty' which will probably differ in some degree from one product to the next. So, it is impossible to say just exactly what the 'bend' will look like, and it may not be noticeable at all in extreme cases of practically no loyalty or an indistinguishable difference of loyalty. But in any event, in a competitive market the curve will be relatively flat above the market price, and at some quantity the market will reach 'saturation' -- i.e. it won't go to infinite demand at zero price, simply because some price exists for storage, transport, etc.

The point of all of this, though, is that the upper end of the curve is flat not because of demand schedules, but because of competition. The market price is determined by the marginal buyers, and in a sufficiently competitive market, almost all buyers become marginal from the point of view of individual producers.

Rothbard's arguments about monopoly and the incidence of taxation turn on elasticity of demand. He claims that prices cannot be raised so long as the demand curve is inelastic above the market price, which is why 1) a sales tax can never be 'passed forward' on to consumers, but only backwards to the factors of production, and 2) a monopoly can never succeed in raising prices without state intervention. The argument that is often made is that if prices could be raised, the sellers would have already raised them. Prices are already as high as they can possibly be, so that a tax or a monopoly premium cannot be profitably added on. Demand would fall too dramatically to make this strategy profitable. He makes this argument in several other creative forms, but they amount to the same thing.

Hopefully, it is immediately clear from my discussion why these arguments do not hold, but just in case it isn't, I will walk through some different scenarios for the resolution of a new sales tax imposed on a product. Rothbard is correct that if the demand curve is inelastic above the market price, then prices cannot be raised. Where he is wrong is in assuming that the shape of the demand curve will not change in response to the change of situation. By making the arguments that he does, he assumes that the demand curve takes the shape that it does purely as a result of demand schedules, and ignores the effect of choice and competition -- which is to say, the actions of producers -- in producing its 'apparent' shape. The concept of consumer surplus is ignored.

Or maybe he just forgot about it since he had discussed it about a thousand pages earlier.


First, I'll look at a free-market example of the market 'as experienced by an individual producer.' I've drawn in a demand curve, the market price, and cost curves. Rothbard uses a number of these graphs in his discussion, however, I think they were a bit unrealistic. I made a curved, highly elastic demand curve -- implying a highly competitive market, being as generous to Rothbard as possible -- but a very different set of cost curves. Rothbard's curves look like the nose of a torpedo, which is silly.

Most businesses have a number of fixed costs associated with overhead and fixed capital and the like, and variable costs associated with the production of each unit of a good. But on the whole, unit costs will not usually increase much per unit at higher quantities. Most cost increases at high quantities will be associated with 'saturation' of fixed capital as production levels move beyond optimal capacity, which will occur rather slowly. So, cost curves will tend to be broad (which I think Rothbard noted at one point), except that they will rise faster at lower quantities as costs of fixed capital are spread over fewer units. The upper cost curve 'crosses' the demand curve somewhere near optimal production levels, at least if the market is competitive and the capitalists have done their homework. This is the equilibrium point.

There is a second, dashed cost curve which represents the 'cost' due to interest. This is important for understanding how the market will 'digest' the imposition of a new tax. Capitalists expect a return on their capital. In a competitive market at equilibrium, this will be the natural rate of interest, and will be the same for all forms of capital. Any change in the rate of return -- for example, the emergence of an enrepreneur's profit above the natural rate of interest, or a market change which makes collecting even the natural rate impossible -- will cause behaviors to change such that this disparity is eliminated. At equilibrium, there is no entrpreneurial profit, and every factor and all capital receive the same rate of return (I am ignoring differences in wages since human beings have no capitalization value and are not 'for sale').

The cost curve therefore incorporates the interest due to capital, plus factor costs, and no entrepreneurial profit. In this example, I will assume an interest rate of 5% and a newly imposed tax of 7%, which I have added to the cost curve such that it absorbs all of the interest due to capital and imposes a 2% loss on top of the loss of interest --

This assumes that factors have already been paid, and the capitalists are stuck selling a perishable good at a loss due to the imposition of the tax. Rothbard would argue that this is the case because, once the product had been produced, the costs are out of the picture in the past and the product must simply be sold for whatever it can fetch on the market. Supply is what it is, demand is what it is, and the price will therefore be what it will be under these circumstances and the capitalists just have to live with it.

This assumes that there is no possibility for the capitalists to 'hold out' for a higher price, which may or may not be a valid assumption.  As far as this essay is concerned, it depends on how the rest of the argument turns out. Since I have not finished the argument, I will pass over the point for now, but only use it to set up the situation and examine the elements which must be resolved.

In order to come back to equilibrium, the natural rate of interest must either be restored or this particular market niche must go into obsolescence. Supposing that the market does not shut down, there are two possibilities -- either factor prices must fall, or consumer prices must rise. These two possibilities are pictured below --

The capitalists may be forced to accept the loss upon the initial imposition of the tax, but they absolutely will not bear it going forward, at least not insofar as they are not owners of the factors and are operating purely as capitalists. In practice, this is almost never the case, as business owners usually do have a stake in the factors they are using.  This may take the form of extensive land holdings and the like, or limited to nothing more than in managing the operation, which is a form of labor.

But in general, in a free market businesses purely as such do not bear the burden of such a tax over the long run because they do not have to. If nothing else, they can always redeploy their capital into another line of production.

So, in which direction will the market resolve itself? According to Rothbard, it is exclusively in such a direction that factors absorb the tax. I think he is wrong, that the burden may be passed in either direction depending on circumstances but is usually shared. I'll analyze four scenarios to see how it plays out, which shall hopefully make my point for me. In each case, I will broaden the base of the tax, and the question that will have to be answered is 'can the price be raised?' How this question is answered will determine who pays the tax. I will use a very mundane good for my example -- dishsoap.


The first scenario is easy. In this case, consider four or five major producers of dishsoap, making practically indistinguishable products. The tax is imposed on only one of the companies, say Company A. What will happen?

Will Company A be able to raise its price to cover the tax? That depends on whether or not consumers will switch to an alternative producer. Rothbard asserts that only a consumer can serve as judge to determine whether or not two products are 'different.' To be sure, this is correct, and is one of the points of this exercise. If there 'is' a difference, and consumers are 'willing' to pay for it, such that the demand curve is inelastic, then the producer may safely raise the price and the consumer will pay the tax.

But by Rothbard's own argument (again, correct in this case), if this had been the case, the producer would already have raised the price to collect an above-market profit. But an above-market profit is excluded by this scenario in that the market is at equilibrium and competitive (do you see where I'm going with this?)! Thus, the argument cannot apply. The price is what it is precisely because of competition, and if other producers do not have to pay the tax and are willing to accept the natural rate of interest, which is the definition of equilibrium, then the taxed firm cannot pass the tax on to the consumer.

From the other side, however, the firm cannot pass the tax on to factors of production, either. Total demand for dishsoap has not fallen (because the price has not been raised) so demand for factors of production for this good will not fall and the going rate for these factors will remain the same. If Company A cannot afford to pay the going rate for factors and still make a profit, other producers will simply bid away these factors and increase their own production to collect the natural rate of interest.

So, in this scenario, the taxed firm cannot make a profit and is destroyed. Perhaps that is what is meant by 'the power to tax is the power to destroy.' In any event, it illustrates why a tax must of necessity be fairly broadly based, and why it is impossible to single out and force 'corporations' to pay for things. Either the corporations will pass the burden on to someone else as the natural rate of interest reasserts itself, or they will cease to exist altogether.


Now consider the case that the tax is imposed on all of the dishsoap companies. Now, none of them can make a profit at current prices and still pay the going rate for factors. Where will the burden fall?

Will the consumer pay a higher price if it is raised? The consumer is no longer protected by the fact that there are other firms willing to produce 'the same' good at existing prices. But there are 'substitute' goods -- barsoap, handsoap, etc. Again, one is confronted with the issue of whether or not the consumer considers these goods to be 'different.'

The argument that the market is 'still competitive' begins to look squishy -- which is the point I'm trying to illustrate by broadening the application of the tax. Rothbard chooses to take this very philosophical, detached point of view that asks the reader to check his common sense at the door. Bar soap and dishsoap are different. They may substitute for one another, or they may not from any individual's point of view, but it is hard to argue that there will continue to be the same competitive dynamic no matter what is happening. What I am describing here is considered a different form of competition by most people -- a substitute good vs. an identical good -- but Rothbard wants to continue on as if there is no difference. To his mind, there is always competition. He has a point, as I'll show later, but I don't think it is the point he thinks it is. The consequence is different from what he predicts.

These kinds of taxes interfere with competition. Rothbard cannot continue to argue that competition will continue to keep the demand curve inelastic as competition is being whittled away. Since it is competition which shaped the upper end of the demand curve, he cannot continue to assert that inelasticity prevents price increases as the demand curve itself changes.

But back to the concrete example. To the degree that consumers prefer using dishsoap to making do with other goods, the demand curve may shift upwards. Since there can be no other firms producing dishsoap who can make the natural rate of interest at existing prices, there is nothing to prevent the firms from raising the price to some new equilibrium point, at which a non-marginal number of consumers switch to using a non-taxed good. This will of course depend on the degree to which consumers consider other goods interchangeable with dishsoap.

In addition, factor prices may fall this time. There are no untaxed dishsoap producers who can bid factors away. There are, however, barsoap and other such manufacturers who might do so, depending on whether or not these materials were nonspecific to dishsoap and might be used for barsoap. To the degree that consumers accept such products as substitutes, the dishsoap manufacturers may be totally wiped out as in the last example.

But to the degree that consumers do not accept substitute goods, and to the degree that factors are specific to dishsoap, factor prices can be pushed down. I think this is most likely in such a case. It is probable that the tax will be borne by a combination of lower factor prices and higher consumer prices, depending on just how everything falls. But obviously, if this proves correct, it will not fall completely on either, for the reasons I have given. The demand schedule is not the same thing as the demand curve that individual businesses experience, so it cannot be argued that the demand curve is fixed.

Hopefully, Rothbard's case is looking weak at this point, but I'll keep going just to see how things play out. There are still good arguments in his favor which will need better examples to come out.


In this example, I want to consider a tax that falls on all soaps and detergents. Now, are there any substitute goods?

Rothbard would argue that there still are -- and to a degree, he is right! But I'll save that for later. However, it should be clear that these 'substitutes' are going to be considerably less 'substitutey' and more like completely different goods. Maybe one could get a dog to lick off the dishes before rinsing. I don't want to think about washing...other things...that way, but the message is clear -- it is very hard to argue that in this circumstance the market is still so 'competitive' that the demand curve doesn't change.

It is hard for me to imagine that factor prices would absorb the entirety of the loss, either. There is no longer any reasonable producer of 'soapy stuff' who does not pay the tax and may still make the natural rate of interest at present prices. The consumer surplus may take a beating, but I'm willing to bet that most people would fork over 7% more for soap rather than live without soap. They might cut back and conserve, but only 'marginal' buyers would balk altogether. And who 'wastes' much soap, anyway?

Finally, consider a tax on all goods, period. Now obviously, assuming the tax is effective and avoidance is impossible, this precludes any sort of goods substitution to avoid the tax. I'm not interested in that anymore; I want to look a this case to discuss something for which I do not know the name, but which I might call 'orthogonal competition.' Basically, all goods are in competition for the consumer's dollar all of the time, regardless of their function. Even if they're not in competition in the sense most people think of, nevertheless, they do compete in the broadest sense of bringing satisfaction to the consumer. Everything the consumer buys is an attempt to acquire utility, so to the degree that all goods are capable of supplying utility, they compete for the consumer's dollar.

This brings out the last good defense of Rothbard, and is one of the key insights, I think, of the Austrian school. I have used a form of this argument before myself in wage markets. It does not make sense to me that wages should show the large spread that they do if labor markets are truly competitive. It doesn't matter that there are so many positions for firemen and so many for teachers and so many for CEO's, etc., and only so many people qualified for such positions. Nevertheless, almost all people are either qualified or qualifiable for at least a few different positions, such that every position has multiple possible takers and every person has multiple possible opportunities. Further, every large wage differential presents an opportunity for entrepreneurs to devise a system of training and application of capital to qualify a lower wage person to perform the higher wage task. The labor market does not have to be perfectly competitive to be effectively competitive.

This is exactly the sort of argument Rothbard is using to defend the effective elasticity of demand, basically no matter what. And to be sure, his argument is partially correct, as I have shown. There is always a degree of substitutability, and so there is always a degree of elasticity above and beyond that provided by raw demand schedules. The question is what does it get him in the real world, which is how I've been arguing these examples.

I'm willing to accept that there will always only be effective competition rather than perfect competition in labor markets, so that a certain spread of wages on a free market will always exist, but should probably not be enormous -- say, within an order of magnitude, or two, or so. That just makes sense to me.

So, to return to the tax example. Suppose the tax is imposed across the board. What happens to the price of dishsoap and, say gold, at least according to me? Yes, I did choose these two deliberately.

To understand this, one must look at the whole picture. Each good will have an associated demand and cost curve. Again, the return to all capital must come to the natural rate, so factor costs must either fall, or prices rise, or a combination of the two, in each and every case. What one must do is determine the changes in patterns of demand to determine which way the axe will fall.

Clearly, the gloves of competition are off, as there are no producers at all who may make a profit at the natural rate and current prices, so demand curves are free to change. Factor owners are going to resist falling prices wherever they can, it is simply a question of where they may resist. Unfortunately, the problem is complicated by the fact that the factor owners are also consumers. So the changes in consumption will cause changes in factor income...which will cause changes in consumption, which will cause...

To a degree, this is a problem of all economics, and all sorts of sciences -- fleas on fleas on fleas. But if I may be allowed an approximation for the purposes of illustration, I think the general idea will shake out.

Suppose that, whether because of lower income, or higher prices, or merely because government is now claiming a portion of the economic product, that every consumer must give up a portion of consumption. What will happen?

Consider the following list of consumers, and assume that they are representative of the population --

The list of goods represents each person's ordinal preferences, from highest to lowest priority. If every consumer gives up one good, which goods will be given up, and what effect will this have?  Yes, I chose a skewed example; in the real world there would likely be a great deal more variety and broader representations.  But the point is to illustrate that it is possible for exceptions to Rothbard's rules to occur.  Further, I doubt that many people would argue that basic necessities like food are not going to systematically get higher priority on most lists, and relatively non-essential items are likely to systematically appear lower. 

Obviously, every consumer will give up consumption of his least preferred goods. In order for 'orthogonal competition' to force the tax onto the factors of production to the complete exclusion of consumer prices, it is necessary that all goods experience a roughly similar drop in demand -- that all varieties of goods be represented roughly proportionately at the bottom of lists.  If there are any goods which are roughly so represented or overrepresented in the lower portion of these lists, then clearly prices cannot be raised much on these goods and factor prices will be forced downwards. But if there are goods which are generally high-priority goods, so that proportionally fewer consumers will give these up, then prices may rise on these goods, and factor prices will be relatively more firm. The forces of production will shift resources away from the marginal goods and towards the non-marginal goods.

To be more concrete, in these lists, dishsoap is lowest priority on only one list. So, total demand for dishsoap -- at whatever the fianl price -- will only fall about 20%. To the extent that the factors of production used for making dishsoap are non-specific, the fall in total demand for these factors will be somewhat less than this -- perhaps a great deal less, depending on their use in other markets. So, the fall in demand for these factors will be marginal, and therefore the change in price negligible. Therefore, the price of dishsoap must go up to restore the natural rate of interest for dishsoap production, and it can thanks to consumer surplus.

As for gold, it appears at the bottom of several lists. Demand for gold will be hit very hard. Prices cannot possibly rise in this market, and the factors of production can expect to bear the brunt of the loss.


In general, even though one can't predict exactly how things will fall out, there will be some marginal goods for which factor prices will be forced down, and others for which consumers will pay the tax. For most, it will likely be a combination of the two. 

So, dishsoap really did compete with gold -- the problem for Rothbard is that dishsoap won too handily!  Its demand curve shifted upwards in response to the imposed tax, while the curve for gold fell.  Factors of production will tend to move from mining into soap production going forward. Rothbard's argument did work, partially, but it turned out that orthogonal competition was not enough to ensure sufficient elasicity in all cases. Rothbard's error was to assume that all goods were equally marginal -- that their prices 'couldn't' be raised. Elasticity can only be ensured when a large enough fraction of buyers are effectively marginal, and this is only the case when markets are sufficiently competitive. It is not a property intrinsic to demand schedules, and such a claim flies in the face of the ubiquity of consumer surplus.

Thank goodness it is wrong.  I would hate to think about life in a world where such an argument was correct, and the benefit of every transaction hung on a knife's edge.

It doesn't take a lot to see how this argument about taxation applies to monopoly as well. The argument that a monopoly 'can't' raise prices because they are already as high as they can be does not hold water. This ignores the effects of competition in markets in shaping demand curves and denies the existence of consumer surplus. Rothbard's arguments about the difficulty of establishing and enforcing a monopoly are still valid, though difficult is not the same as impossible.

But when specifically asked about a lack of competition, 'elasticity of demand' is the one answer he can't use. And I, for one, do not find it persuasive in the slightest that since his oponents cannot sufficiently define 'monopoly' to his satisfaction that monopolies can therefore not be said to exist in a 'free market.'

I think they can, and do.

Saturday, July 28, 2012

Another (Almost Completely) InstaPundit-Driven Assortment

It's difficult to imagine the blogging world without Professor Glenn Reynolds, a.k.a. InstaPundit. For my part, on those days when I find myself without inspiration, he's a reliable source of things about which to vent my spleen that I might have overlooked in the national news. And on those days when I have an inspiration, the way the rest of the DextroSphere employs him as an aggregator makes him a handy source for material to supplement whatever has already become the focus of my ire.

Unless otherwise mentioned below, the primary source for all the following stories and citations is Professor Reynolds's site.


At Legal Insurrection, the blog of Professor William Jacobson, we find a most interesting bit of commentary from Washington Post commentator Jonathan Capehart:

By telling potential voters "it's okay to make a change," the RNC is acknowledging all that I mentioned above. It's okay to like the guy personally but not vote for him again. This is not a popularity contest. It's okay to vote against the black guy. You gave him a shot. He gave it his best shot. He failed. And the most effective message is: "it's okay to make a change"--and not be thought of as a racist.

Apparently, Capehart has received a number of emails touching upon this subject. To put it most gently, they have him…concerned:

That's why the " it's okay to make a change" ad is the most dangerous for Obama's reelection efforts. It gives those few, yet crucial, undecided voters the pass they might be looking for two vote against Obama.

This isn't merely a statement that Obama's race was a contributing factor in the 2008 election. It's also a barefaced admission that he could not have won otherwise...and equally much an admission that without racial prejudice operating in his favor, he has little chance of a second term in the White House.

My question: will the race hustlers backing Obama let Capehart's comment slide, or will he be disciplined for it?

The Algemeiner, a publication with which I was not previously familiar, brings us an interesting story from the London Olympics:
The Lebanese judo team forced International Olympic Committee officials to erect a barrier between themselves and the Israeli judo squad, Friday afternoon in London, just hours before the Games's opening ceremony reports Israeli daily Yediot Ahronot.... This is not the first time Middle Eastern judo teams have caused a political stir. In February, Egypt's Ramadan Dawris defeated Arik Zeevi of Israel, but afterwards, Dawris refused to shake the hand of his competitor.

But if the Lebanese judokas cannot bear the sight of the Israelis, how, then, will they manage to touch them?

As Drudge would say: DEVELOPING...


According to David Kopel at The Volokh Conspiracy, Americans' Second Amendment rights have dodged a bullet:

The weeks-long conference at the United Nations to produce an Arms Trade Treaty is ending without the creation of a treaty. None of the draft treaties which have circulated in the past several days came remotely close to finding consensus support.

I shared the widespread fears that an arms trade treaty would be used as a tool by the Obama Administration to cut deeply into Americans' rights to keep and bear arms. It appears that, for the moment, those fears can be put to rest... But for the moment, only.

All governments, no matter how constituted, are implacably hostile to their subjects' possession of the means of resistance. The Second Amendment to the Constitution of the United States is words on a page. It is not self-enforcing...no more so than any of the other rights Americans cherish. The one and only way to keep our rights alive is to exercise them vigorously...and to stand ready at all times to punish the arrogance of men in positions of authority who presume to infringe upon them.

In other words, keep your powder dry.


DaTechGuy notes a relationship many of us would be slow to recognize:

I have heard a lot of people on the left self righteously complain that conservatives are unwilling to agree to "common sense gun control" that we are unreasonable fanatics who would oppose restrictions on the ownership of Sherman tanks.

Most of all, we are totally wrong to believe that the left is after our guns just because of the proposed assault weapon ban.

Why would we have such a belief, how can the folks on the right even think we on the left are after their guns, all their guns?

The answer: Chick-Fil-A.

We in the Right know perfectly well about the Left's tactic of gradualism. DaTechGuy cites a number of interesting examples as reminders, and for the edification of those who might disbelieve in it. Please read the whole thing.


At Reason's Hit And Run web site, we are reminded of the true purpose of commercial regulation:

This summer, 13-year-old Nathan Duszynski wanted to make some money to help out his disabled parents—his mom has epilepsy and his dad has multiple sclerosis. So he decided to open a hot dog stand. He saved $1,200, mostly money made by mowing lawns and shoveling snow. He checked with the city to make sure he didn't need any licenses or permits, even going to city hall in person with his mom. And then he bought a cart. (Yep, that's hot dogs from Nathan's, for those who are keeping score at home.)

He arrived to set up shop on his first day and 10 minutes later, a zoning official arrived to shut him down. The problem: The cart, which is in the parking lot of a sporting goods store, is on the edge of official downtown commercial district of Holland, Michigan. The city bans food carts in that area in order to minimize competition for the eight tax-paying restaurants a couple of blocks away.

Surely no further comment is necessary.


Sometimes a brightly colored graphic is all it takes to drive a point home:

The U.S. economy is not doing fine.

Earlier this year, the Obama White House predicted the economy would grow 3% in 2012. Today's GDP of record shows that ain't going to happen....

Some pundits will put a smiley face these numbers, saying a) at least the U.S. economy is growing and b) at least the U.S. economy is doing better than the EU economy. But that’s a case of lowering expectations. America should and can do better.

And indeed, America has done better in the recent past, as the accompanying graphic plainly shows. Nice choice of colors, too.


Have you ever made the acquaintance of someone who insisted upon slathering you with his opinions about every subject under the sun? Annoying, wasn't he?

Now let's talk about celebrities.

I'm in favor of allowing people in the public eye to have private lives. Astonishing! What a departure from the conventional wisdom! No, really. The alternative involves accepting a disagreeable consequence: their insistence that we give their silly opinions the attention due a counselor of great wisdom and experience.

Of course, we have no assurance that an individual who has been granted celebrity status will permit us to have privacy from him and his silly and obnoxious statements no matter how much privacy we grant him.

Michelle Malkin provides us with a truly arrogant, vicious, and pathetic example today. I shan't attempt to excerpt it; please read the whole thing.


It's widely believed that the activism of gun rights advocates cost Al Gore the presidency in 2000. At least, it's widely believed on the Left:

Despite President Barack Obama’s Wednesday night speech calling for a national conversation on reducing violence, in which he repeated his preference to sign an assault weapons ban, the president and Senate Majority Leader Harry Reid are still shying away from a floor fight on the issue.

“With the schedule we have, we’re not going to get into a debate on gun control,” the Nevada Democrat told reporters today.

Does anyone over the age of seven and not under the influence of mind altering drugs really believe that Reid's problem is schedule pressure?


Flash! We have received an important clarification of Democrats' opinions about the rights of homosexuals:

  1. Let them marry one another;
  2. Then execute them.
Given his stance on Chick-fil-A, would Mayor Tom Menino grant permits to a group that has counted among its leaders a man who has repeatedly called homosexuality a “crime that must be punished” by death?

Actually, he has done that  . . . and more! Menino effectively gave away city land valued at $1.8 million to the organization, and he gave a speech at its ribbon-cutting ceremony.

It’s the Islamic Society of Boston’s mosque, and when it comes to anti-gay sentiment, one of its early supporters makes Chick-fil-A look like the Provincetown Men’s Chorus.

Of course, the Left's alliance with world Islam is purely tactical. But should that alliance prevail, discovering which partner is the rider and which is the tiger will prove painful to the rider.


And speaking (yes, again) of Chick-fil-A, we have an interesting statement on freedom of commerce from Obama's hometown...well, one of his hometowns anyway:

I’ve been in discussions with the company for the past nine months. Every time we met, I brought up my concerns that the company supported a homophobic agenda. My concerns were based on financial contributions made by WinShape Foundation, Chick-fil-A’s charitable endeavor, to anti-gay groups. I was repeatedly told by company officials that “we (Chick-fil-A) are not political” and that the company “had no political agenda.” Just recently, an attorney for the chain tried to convince me of Chick-fil-A’s benevolence. During each meeting, I challenged the company to change its ways. Although I thought we had made some progress, Cathy’s anti-gay comments made it abundantly clear what the company’s true stance is toward equal rights....

I represent a diverse, forward-thinking community, and I’m sure the majority of 1st Warders find Cathy’s comments and attitude repugnant. Even if I did give Chick-fil-A the go-ahead, I suspect many in my community wouldn’t spend their dollars there.

I know my decision may anger or annoy some people. It’s just a chicken place, they will say. But I believe Chick-fil-A should really reconsider its platform on gay issues. Equality for LGBT (lesbian, gay, bisexual, transgender) people is the civil rights issue of our generation. This decision is me taking a stand.

There you have it, Gentle Reader: According to the doctrines of the oh-so-tolerant Left, freedom of speech and opinion ends at the fast-food delivery counter. Thou who darest to sell chicken sandwiches shalt not have un-progressive opinions!

Do you suppose Alderman Moreno would prove hospitable to a mega-mosque? After all, Boston's Thomas Menino has already blazed that trail.


Apropos of nothing InstaPundit would consider newsworthy, this, too, has largely been dictated using Windows 7 Speech Recognition. Yes, I had to make a few corrections, and manually insert hyperlinks and HTML formatting. But it's a far better piece of work than any low-cost speech recognition system I've used before. Indeed, it's almost got me liking Windows 7.

Yes, the shoulder thing is still with me. About as severe as ever, at that. I see the orthopedist again on Monday, this time with a CD full of MRI images in hand. If he dares to say "Maybe it will go away on its own" just one more time...well, perhaps I shouldn't go there. But as before, your prayers and good wishes are much appreciated. Though, if those prayers are being directed to Wotan or Ba'al, I'd just as soon have you keep that to yourself.

(What's that? How about Ahura Mazda? Well, okay...but didn't they drop the rotary engine a couple of years back?)

Friday, July 27, 2012

Instruments Of Death

During the contest for the Republican nomination for president this campaign season, putative nominee Mitt Romney at one point said that he liked "being able to fire people." For an American business executive, this is a noncontroversial position, yet the other contenders for the nomination did their best to use it against Romney. I don't recall any great outcry by other business executives in Romney's support.

That, Gentle Reader, was most unfortunate. Nothing is more important to the profitable functioning of a business than absolute freedom to hire and fire according to need. However, that's a privilege American businesses no longer possess.


Two days ago, in the course of a conversation with a colleague, we touched upon the subject of quotas. Few things irritate me quite as much as the recent politically correct harping on "diversity," which involves the de facto imposition of quotas on employers according to the dictates of the Equal Employment Opportunity Commission. Those dictates provide members of certain "protected groups" with a tailwind in hiring decisions and considerable protection from being fired.

Quotas are noxious and anti-American, just in case you wouldn't already have guessed that opinion from my other writings. But, just in case you think I hold this opinion because I'm a racist (which, by the Left's criteria, I am), or a sexist (similarly), or an "able-ist" (yup), or any other sort of "ist" you might have in mind (place your bets), allow me to expand:

Any sort of quota, regardless of the criterion it applies, is incurably noxious to the purposes of business.

The purposes of a business, in case you're in any doubt, are:

  • To make money;
  • To make money;
  • And to make money.

An unincorporated business exists for the sole purpose of returning a profit to its owners. An incorporated business exists for the sole purpose of returning a profit to its shareholders. The owners of the former, being private parties not obligated to anyone else, may at their discretion perform acts of charity, nepotism, or other sorts of outright foolery; the managers of the latter, being persons with fiduciary responsibilities to the shareholders, are morally barred from doing any such things (never mind that such things happen every day). In either case, to hire or fire for any but a sound business reason is madness. Quotas directly contradict this maxim.

I'm in a business that's afflicted with more quotas than just the ones prescribed upon us by the EEOC. This is because our one and only customer is the Defense Department of the Federal government of the United States. When you have one customer and can never have another, that customer dictates your business practices, whether you like it or not. Consequently, when we submit a proposal of any sort to the Pentagon, the procurement bureaucracy will frequently respond that we don't have enough employees of certain kinds. For example, the response might dictate that to be considered for the job, we must hire more software engineers than we think we need. That's obviously a business decision…but such is the power of an irreplaceable customer that we often have no choice but to comply, with unpleasant consequences for our profitability.

This has gone on for so long that a form of Stockholm Syndrome has set in: our management has persuaded itself that "diversity" is a business virtue. Furthermore, capitulation to quota demands of other sorts has become reflexive…even in those cases where the effect on the profitability of the job in question will be devastating.

This has been forced to the front of my consciousness by recent events, in witness whereof please allow me a rather unusual digression.

"Listen, Dandelion. You're fond of stories, aren't you? I'll tell you one--yes, one for El-ahrairah to cry at. Once there was a fine warren on the edge of a wood, overlooking the meadows of a farm. It was big, full of rabbits. Then one day the white blindness came and the rabbits fell sick and died. But a few survived, as they always do. The warren became almost empty. One day the farmer thought, 'I could increase those rabbits, make them part of my farm--their meat, their skins. Why should I bother to keep rabbits in hutches? They'll do very well where they are.' He began to shoot all elil--lendri, homba, stoat, owl. He put out food for the rabbits, but not too near the warren. For his purpose they had to become accustomed to going about in the fields and the wood. And then he snared them--not too many: as many as he wanted and not as many as would frighten them all away or destroy the warren. They grew big and strong and healthy, for he saw to it that they had all of the best, particularly in winter, and nothing to fear--except the running knot in the hedge gap and the wood path. So they lived as he wanted them to live and all the time there were a few who disappeared. The rabbits became strange in many ways, different from other rabbits. They knew well enough what was happening. But even to themselves they pretended that all was well, for the food was good, they were protected, they had nothing to fear but the one fear; and that struck here and there, never enough at a time to drive them away. They forgot the ways of wild rabbits. They forgot El-ahrairah, for what use had they for tricks and cunning, living in the enemy's warren and paying his price? They found other marvelous arts to take the place of tricks and old stories. They danced in ceremonious greeting. They sang songs like the birds and made shapes on the walls; and those these could help them not at all, yet they passed the time and enabled them to tell themselves that they were splendid Fellows, the very flower of Rabbitry, cleverer than magpies. They had no Chief Rabbit--no, how could they?--for a Chief Rabbit must be El-ahrairah to his warren and keep them from death: and here there was no death but one, and what Chief Rabbit could have an answer to that? Instead, Frith sent them strange singers, beautiful and sick like oak apples, like robins' pincushions on the wild rose. And since they could not bear the truth, these singers, who might in some other place have been wise, were squeezed under the terrible weight of the warren's secret until they gulped out fine folly--about dignity and acquiescence, and anything else that could make believe that the rabbits loved the shining wire. But one strict rule they had; oh yes, the strictest. No one must ever ask where another rabbit was and anyone who asked 'Where?'--except in a song or a poem--must be silenced. To say 'Where?' was bad enough, but to speak openly of the wires--that was intolerable. For that they would scratch and kill."

[Richard Adams, Watership Down]

I'm not a politically correct sort, which should be obvious by now to any regular reader of Liberty's Torch. I speak my mind as I please and where and when I please; I have reasons for my convictions and will give them to anyone who wants them. And I have noted, no matter the context nor the occasion, that to speak against "diversity" or quotas invariably elicits one unvarying response: flight. (Fortunately, I'm too valuable to my company to suffer for my openness about my off-axis beliefs. But others who have dared similarly have suffered, sometimes to the extent of being blacklisted from their careers.)

We are being taught to love the instruments of death for American enterprise. The process isn't yet complete, but it's easy to see the terminus from here.


This is only one of the knives in the arsenal of the hyper-regulatory state. It has many others. If not thoroughly disarmed, and very soon at that, it will reduce American enterprise to the condition of the late Soviet Union, where all businesses were an extension of the state bureaucracy: regulation pervasive, compliance mandatory and complete, profit irrelevant.

Many Republicans in high office will tell you that we are over-regulated. In the next sentence they'll tell you that they don't object to "reasonable regulation"…a phrase of such elasticity that it can be stretched to cover anything at all.

Barring a Constitutional amendment, there will be no cure.

[Dictated using Windows 7 Speech Recognition]

Thursday, July 26, 2012

Two Prongs Are Better Than One

It's something of a pity that Congresswoman Michele Bachmann chose this time to publicize her concerns about Islamic infiltration of the federal government. Given the ongoing presidential campaign and the recent Aurora, CO atrocity, it's been largely ignored as a third-echelon contretemps. In sober truth, it's one of the two most important political subjects of our time.

Ignore the brayings from CAIR, ISNA, and the like. These are mouthpiece groups explicitly required to respond to charges such as Mrs. Bachmann's as they have. They have no other reason for existing. Ignore the shouts of "McCarthyism!" from the Left. Any other reaction from them would be implausible. Most especially, ignore the chastisements aimed at Mrs. Bachmann by John McCain and other Establishmentarian Republicans. Regardless of party affiliation, an establishmentarian's highest priority is to keep the boat from rocking, so his rice bowl won't be overturned.

Mrs. Bachmann's concerns are sincere and important. They should be taken seriously. Indeed, they must be. We've already discovered militant Islamists advising the FBI and Homeland Security; what more are we waiting for?

The central point about Islam's program for world conquest is that it's a two-pronged affair. To understand the mechanism in specifics, let's review a cliched phrase often misused in discussions of international relations: "the carrot and the stick."

First, the misuse: treating "carrot" as an inducement to cooperate, and "stick" as a threat of punishment for non-cooperation. Because this misuse is so frequent and has gone on for so long, it's acquired a legitimacy of sorts: people understand it the way it's meant to be understood when used in a relevant context. However, this interpretation of the phrase differs dramatically from the image that goes with its origin.

Imagine that you have a wheeled, unpowered cart, and a donkey that you'd like to pull the cart. Trouble is, your donkey is a recalcitrant beast; he does nothing except what gratifies his belly. So you can't harness him to your cart, yell "Giddy-ap," and expect forward motion; he'll just stand there with that "What's in it for me?" look on his face. You have to give him a reason to want to move -- and moreover, to pull a significant load.

So you find a long stick, dangle a large carrot from one end, and affix the other end to the front of the cart. The stick must be long enough to hang the carrot about eighteen inches in front of the donkey's face: close enough to see and smell, but not close enough to grab with any possible contortion. The donkey will walk forward in an attempt to get to the carrot. The stick, being affixed to the front of the cart, will keep it just out of his reach. But the donkey, being a Democrat donkey, will just keep walking "toward" it, even against significant resistance.

This original meaning of "the carrot and the stick" nicely captures Islam's program for subverting governments everywhere. So-called "moderate" Muslims, who repeatedly tell Americans that they have no interest in harming anyone, claim that they can advise Washington on changes to federal policy that would mollify "militant" Muslims, soothing their wrath toward the United States and making peaceful, profitable relations with Islamic states easier to achieve. Washington, desirous of a reduction in tensions and of the probability of further terrorism against Americans and their property, admits a number of these "moderate" Muslims to the halls of power, as advisors, and implements their recommendations. However the hoped-for improvements, if any, are mild and transitory: tensions are soon back to where they were, and the threats of terrorist action against America are as numerous as before. The "carrot" is just as distant as ever. So Washington admits still more "moderate" Muslim advisors to its ranks, and on their recommendations makes still further changes and conciliatory gestures.

Lather; rinse; repeat.

Neither prong of the Islamic offensive would work at all well without the other. "Moderate" Muslims would have no entry point to Washington without the pressure being generated by Islamist threats and violence; Islamist threats and violence would provoke only military responses and ever stricter border controls were it not for the half-plausible blandishments of "moderate" Muslims about how nasty we've been and are being toward the Islamic world. Together, they're seductively effective, because few persons in positions of authority or influence are paying attention to the pattern being formed.

Mrs. Bachmann has paid attention. She's noticed the accumulation of not-particularly-moderate Muslims as "advisors" to various highly placed persons and government agencies. In her usual fearless style, she's made public note of it and has exhorted others to do so as well. In the Establishment's usual no-boat-rocking style, they've castigated her without paying the slightest shred of respect to her easily verified observations.

I find it difficult to believe that even Democrats really want to see Islam suborn the Constitution, or achieve privileged status here in the United States. It's far easier to believe that many, many persons in high places are reluctant to admit that they've been seduced into letting enemies of the United States into their confidences. But the consequences are what will matter -- and the history of conciliation toward Muslims does not engender confidence that those consequences will be pleasant.

Draw your own conclusions.

Wednesday, July 25, 2012


In the pre-presidential-balloting season of the Perpetual Campaign, the polls are at their maxima for variety and frequency. They differ in a number of ways, but are the same in a most important one: All of them proclaim some margin of error.

Unfortunately, most people fail to understand the margin of error, especially when the phrase is applied to a political poll.

First example: You have two children, Peter and Linda. They score, respectively, 101 and 98 on a Revised Stanford-Binet IQ test. The margin of error given for that test is 3 points. Thus, according to the common misconception, the scores indicate that Peter's IQ reliably falls somewhere between 104 and 98, while Linda's reliably falls somewhere between 101 and 95. This is not so: that 3 point figure proceeds from a statistical test called Chi-square, which speaks only of a 95% level of confidence that the scores are thus ranged. There remains a 5% probability, according to statistical methods, that they're outside the 3 point margin.

Second example: We are told that a missile has a CEP -- circular error probable -- of 250 meters. Most people take that to mean that the warhead will reliably fall within 250 meters of its nominal target point. This is not so. First, the CEP is calculated on a 50% confidence level: according to statistical methods, there's a 50% probability that the warhead will fall outside that circle, in which case it could fall anywhere. Moreover, even the 50% confidence level pertinent to the CEP depends on the confidence levels pertinent to other factors, such as atmospheric densities and the "gravity map" along the missile's trajectory.

Third example: We are told that, in a three-person race for some office, candidate Smith is polling at 43%, candidate Jones at 38%, and candidate Davis at 19%, with a margin of error of 3%. There are several ways to misinterpret this statement. For example, given that the ultimate vote totals must sum to 100% of the votes cast, we would expect that if Smith's support is really 40% rather than the 43% arrived at by the poll, that "missing" 3% must therefore have gone to the other two candidates in some proportion. It's not necessarily so, unless a voter who steps into the booth must vote for one of those three, which would exclude write-ins, really minor candidates, and the "null" vote cast by refusing to pull the lever for anyone.

Politically speaking, the margins are "where the action is." At any moment during a campaign, every candidate is doing his best to move the margins in his direction. That's why the "independent" and the "uncommitted" voter get so much attention.

In this era of no-holds-barred politics, the margins are also where the chicanery is.


Back in 2000, the margin of George W. Bush's presidential victory over Al Gore was so slender that the Democrats, scenting a strong possibility of winning by challenging the vote count, put enormous legal resources to the task of overturning it. Their efforts caused Uberpundit Mark Steyn to coin an immortal phrase: the "margin of lawyer." By this he meant a margin of victory sufficiently large to dash the losing side's hopes of prevailing through challenges to the vote count or the procedures used to reach it.

That, of course, was a post-balloting phenomenon. It's recurred several times since then. In each case, the Democrat has ultimately been awarded the contested office, sometimes with the help of "oops!" votes: ballots of uncertain provenance found in strange places. This has caused conservatives and Republican partisans to ask whether Boards of Election, which are predominantly staffed by Democrats, can be trusted to recount ballots honestly and impartially.

But there's a pre-election "margin of lawyer" as well, one it would behoove us to watch closely over the next hundred days: the ability of an incumbent to use his office to "purchase" votes from identifiable interest blocs. This isn't the same as announcing a shift in conviction, as for example President Obama did in "coming out" for same-sex marriage. It involves an abuse of power practically possible only to an executive-branch official: the announcement that he will refuse to enforce a duly passed law, or conversely, he will enforce a law that's never been passed.

Waivers from ObamaCare are a case in point. Fourteenth Amendment, anyone? If the Constitution's guarantee of equal protection is meaningful, a president lacks the power to exempt any person or organization from a duly passed law. Yet Obama has issued over 200 waivers to organizations the Democrats favor. It's one of the most blatant violations of the presidential oath of office I can remember. Its import is entirely political: to solidify the Democratic "base."

The proposed Arms Trade Treaty currently before the United Nations is another case. This treaty has absolutely no chance of being ratified by the Senate, before or after the November elections. Indeed, it couldn't get 51 votes, much less the 67 required for ratification. But all indications emanating from the White House and the State Department are that Obama will sign it, and will direct the BATFE to enforce it as if it had been ratified. Once again, the motivation can only be as a sop to the anti-gun component of the left-liberal "base," lest Obama lose some fraction of their votes on November 6.

Consider the Keystone XL pipeline proposal, possibly the most thoroughly studied project of its kind. The EPA, with the White House's backing, is stalling the permit process for that proposal on the grounds that it needs more study. The covert motivation, of course, is to keep the radical environmentalists, who are absolutely opposed to the development or use of any fossil fuel regardless of consequences, in the Democrat fold. There's a degree of tension here, as several unions, nominally Democrat constituencies, are heartily in favor of the pipeline. Some Democrat strategist must have assessed the environmentalist vote as more easily lost than that of the unions.

Obama and his mouthpieces claim this is all about justice and good policy. Draw your own conclusions.


The Justice Department's attempts to nullify various states' voter-identification requirements.
The Department of Homeland Security's resistance to Florida's requests for access to the federal citizenship database.
Obama's directive that ICE suspend deportations of certain categories of illegal aliens.
Executive-branch leaks of sensitive national-security-related data to make Obama look good.
There are others.

These are abuses of executive-branch power. Some are more egregious than others, but all are manifestations of corruption, in service to a party and a president to whom all that matters is electoral victory and the power it would bring. Lawyers are fighting over all of them as we speak. In some sense, who wins those contests is less important than the original gambits. The targeted voting blocs are receiving an unambiguous message: Look not to Romney and the Republicans. The Democrats are your friends. Whether they'll have the desired effect, we must wait to see.

Keep an eye on the margins.