Friday, February 17, 2006

A Successful Operation (a dead patient!)

Most libertarians have, at one time or another, been challenged by the problem of public property, or how the market can best protect and allocate goods ‘owned’ in common such as fish in the sea, roads, airwaves and so on. An old economics parable sums up the problem nicely – let’s briefly review it before taking a strong swing at solving the problem of public property.

The issue is well described by a parable called the problem of the commons (POTC), which goes something like this: a group of sheep-owning farmers own land in a ring around a common area. They each benefit individually from letting their sheep graze on the common land, since that frees up some of their own farmland for other uses. However, if they all let their sheep graze on the commons, they all suffer, since the land will be stripped bare, and so they will end up watching their sheep starve, since their own land has all been turned to other uses. In many circles, this is considered an incontrovertible coup de grace for the absolute right of private property – and the free market in general – insofar as it ‘proves’ that individual self-interest, rationally pursued, can result in economic catastrophe. Due to the POTC, it is argued, the property rights of the individual must be curtailed for the sake of the ‘greater good’. Thus regulation and government ownership must be instituted to control the excesses of individual self interest for the sake of long-term stability, blah blah blah.

There is one significant difficulty with the POTC, however, which is that it fails to prove that government regulation or public ownership is necessary, or that turning the POTC over to the State solves the problem in any way. In fact, it is easy to prove that even if the POTC is a real dilemma, the worst possible way of solving it is to create government regulations or public ownership!

Problem #1: Public Ownership
The most simple rebuttal to the POTC, of course, is to point out that the problem faced by the farmers is not an excess of private property, but a deficiency! If we imagine the farms surrounding the commons to be doughnut-shaped, then clearly the POTC is best solved by simply extending the ownership of the farms to the very center, like pizza slices (yes, these metaphors are making me hungry as well!). If private property is thus extended to include the commons, farmers no longer face the problem of everyone wanting to exploit un-owned resources. Everyone can then use their extra land to feed their sheep, and everyone is content. (Alternatively, a woman can come along, buy up the commons and start charging grazing fees. To ensure the longevity of her resource, she will naturally take care to avoid overgrazing.)

However, let’s accept that under some circumstances the POTC is real, and cannot be overcome through the extension of private property rights. What solutions can then be brought to bear on the problem?

Solutions to social problems always fall into one of two categories: voluntary or coercive. Voluntary solutions to the POTC abound throughout history – the most notable being the kinds of social arrangements made by fishermen. When a number of fishing communities dot a lake, villagers develop complex and effective measures to ensure that the lake is not over-fished. Any display of wealth is frowned upon, since it is clear that wealth can only come from over-fishing. Communal leaders meet to figure out how much each village can catch – and it’s very hard to hide your catch in a small village. Furthermore, the problem of not knowing exactly how much fish is being taken by others – as well as natural annual variations in fish stocks – lead to significant underestimation of allowable catches, which ensures that sustainability is always achieved. Left-leaning economists might be baffled by the POTC, but there is scant recorded historical evidence of illiterates in fishing villages regularly starving to death due to over-fishing (unless their village leaders were left-leaning economists perhaps).

The POTC is yet another manifestation of that old bugbear: the blind insistence that man is a being whose sole motivation is immediate financial considerations. (Economists who believe this and who also have children are most baffling in this regard!) “Ahhh,” says the miserly farmer of this ‘instant gratification’ fairy tale, “I will graze my sheep by night and callously denude the commons, so I can grow a dozen extra turnips!” But what good will his extra turnips do him if no one in the village will talk to him, or when no one will help him build a barn, or when he gets sick and needs people to care for his sheep? No, even miserly farmers are far better obeying the rules and forget about their extra turnips – since they will lose far more than they gain by circumventing social norms. Communities have weapons of ostracism and contempt that far outweigh immediate economic calculations.

(Has this changed in the Internet age? Surely we are far less constrained by social norms than we used to be! Not at all – now, with tools ranging from credit reports, web searches and easy access to prior employers, conformity to basic decency is more important than ever!)

Problem #2: The State as a ‘Common’
However, let’s assume that none of the above rebuttals to the POTC holds firm, and in certain circumstances there is simply no way to extend property rights to (or exercise social control over) resources which cannot be owned – what then? Do we then turn such a thorny and complex problem to the tender mercies of the State to solve?

Well, one of the most interesting aspects of using the State to solve the POTC is that the State itself is subject to the problem of the commons.

Since the State is an entity wherein property is owned in ‘common’, the problem of selfish exploitation leading to general destruction applies as surely to State ‘property’ as it does to the common land ringed by greedy and short-sighted farmers. Just as farmers can destroy the commons while pursuing their individual self-interest, so can politicians, bureaucrats, lobbyists and assorted other State toadies and courtiers destroy the economy as a whole in pursuit of their own selfish economic and political goals.

The POTC argues that, due to ‘common ownership’, long-term prosperity is sacrificed for the sake of short-term advantage. Because no one defends and maintains property that can be utilized by all, that property is pillaged into oblivion. And the State is supposed to solve this problem? How? That is exactly how the State operates!

Let’s look at some examples of how the State pillages the future for the sake of greed in the here-and-now:
  • deficit financing

  • inflationary monetary expansion

  • government bonds, which future generations must pay out

  • spending the money taken in through social security, which future generations must pay for

  • offensive ‘defense’ spending, which future citizens will pay for through increased risk of attacks on America

  • massive educational failures, which have immensely deleterious effects on future productivity and happiness

  • the granting of special powers, rights and benefits to lobbyists such as unions, public sector employees and large corporations, which result in higher prices and deficits (the cost to the US economy for union laws alone is calculated at $50 trillion dollars over the past 50 years)

  • the failure to adequately maintain public infrastructure such as roads, schools, bridges, the water supply and so on, which passes enormous liabilities to the next generation

  • massive spending on the war on drugs, which increases crime in the future

  • the enormous pollution of public lands and other fixed assets, which saves money in the short run while ruining value in the long run

  • …and heaven knows how much more!

From the above examples, it is easy to see that the POTC applies to the State to a far greater degree than any other social agency or individual. If we recall our group of greedy farmers, we can easily see that they have a strong interest in avoiding or solving the POTC, since it is they themselves who will suffer from the despoiling of public lands. However, in the case of the State, those who prey upon and despoil the public purse will never themselves face the direct consequences of their pillaging. Thus their desire to prevent, solve or even alleviate the problem is simply non-existent! Furthermore, even if the farmers do end up destroying the public lands, they can at least get together and voluntarily work to find a better solution to the problem. Once the government takes over a problem, however, control passes completely from the private sphere to the public sphere of law, enforcement, corruption and politics. Once firmly planted in the realm of the State, not only is the problem of public ownership made incalculably worse, but it cannot ever be resolved, since the predation of the public purse is now defended by all the armed might of the State military! Consequences evaporate, competition is eliminated, and a mad free-for-all grab-fest simply escalates until the public purse is drained dry and the State collapses. (This is what happened in the Soviet Union; in the 1980s, as it became clear that communism was unsustainable, Kremlin insiders simply stole from the treasury until the State went bankrupt.)

Thus the idea of turning to the State to solve the POTC is akin to the old medical joke about the operation being a complete success, with the minor exception that the patient died! If the POTC is a significant issue in the private sector, then turning it over to the government makes it staggeringly worse – turning it from a mildly challenging problem of economics into a suicidal expansion of State power and violence. If the problem of the commons is not a significant issue, then surely we do not need the State to solve it at all!

Either way, there is no compelling evidence or arguments to be made for the value, morality or efficacy of turning problems of public ownership over to the armed might of the State. Both logically and ethically, it is the equivalent of treating a mild headache with a guillotine.

Monday, February 06, 2006

Preventing Tragedy - A Free Market Analysis of Abortion

Abortion is always a tragedy, and one of the saddest occurrences on this earth. Government ‘solutions’ are also always disastrous, and so it is hard to understand how combining a tragedy with a disaster can create any kind of positive solution. Mixing arsenic with mercury does not solve the problem of poison – and combining the violent inefficiency of the State with the tragedy of abortion does not solve the problem of family planning.

All those wishing to reduce the incidence of abortion – surely all rational and sensitive souls – must recognize that giving the government the power to combat abortion also gives it the power to promote abortion, which it currently does to a hideous degree. The best way to reduce the incidence of abortion is to withdraw State subsidies and allow the economic and social consequences accrue to those engage is sexually risky behaviours.

Reduce the incidence of abortion is not very complicated, since it is subject to all the same laws of supply and demand as any other human activity. Simply put, any activity that is subsidized will increase, and any activity that is taxed will decrease. The incidence of abortion will go down only when abortion is no longer subsidized – and when responsible family planning is no longer taxed.

Abortion is very rare in a stable marriage, and is generally only performed under an extremity of financial or medical distress. The vast majority of abortions occur to single women, or women in unstable relationships. Particularly over the past fifty-odd years, the role of sexuality has been forcibly separated from marriage and procreation. This is an entirely predictable – although perfectly horrible – development, given the role of the State in breaking down stable family structures.

Subsidizing Abortion
In general, any program which subsidizes pregnancy in the absence of a stable family structure will also tend to encourage abortion. In particular, State subsidies which encourage the pursuit of sexual pleasure in the absence of virtue, financial stability (or at least opportunity) and personal responsibility will also tend to increase the number of abortions. When the financial and social consequences of pregnancy are mitigated through State programs, risky sexual behaviours will inevitably increase – resulting in an increase of both pregnancy and abortion.

Controlling or mitigating the financial consequences of unwanted pregnancies directly alters the kinds of decisions women make about sexual practices and partners. Having a child out of wedlock is one of the most costly decisions a woman can make, insofar as it tends to significantly arrest her educational, emotional and career development. The physical impossibility of being able to work for money and care for an infant at the same time reduces most young single mothers to a life of dependency, exhaustion and poverty. The chance of meeting a good man when already burdened with a baby reduces a single mother’s chances for a good marriage. Not only does she come with a baby and significant expenses, but she also probably has few economic skills to offer. Plus, it’s hard to date when you’re breastfeeding. For these and many other reasons, single mothers often end up settling for unstable, unreliable men, just to have any sort of man around. Inevitably, the chances of having another baby increase – sadly, without a corresponding increase in relational stability.

This is why, in the past, society expended considerable effort ensuring that women did not get pregnant before marriage. The staggering financial losses incurred by childbirth without commitment usually accrued to the parents, and so it was the parents that tried to do their best to prevent such a disaster. This need, being common to all parents, was generally shared across society, creating a near-impenetrable web of sexual chaperoning. (Social self-government based on individual incentive is the only way that social problems have been – or will ever be – solved to any degree of stability.)

It costs about $250,000 to bring a child from birth to age 18, even under the current system. In a free market environment, with fully privatized and charity-supported education, health care, housing and so on, this cost would only increase. (Of course, to those horrified by such a prospect, remember that all taxation and State regulation would cease.)

However, when the welfare state enters the equation, all of the above changes. Now, if a young woman gets pregnant out of wedlock, she can survive quite nicely. She’ll never be rich – or probably even middle class – but she will be able to survive on some combination of any of the other hundreds of State subsidies which directly benefit poor mothers.

In addition to the usual suspects – welfare, Medicare, child supplements, food stamps – there are many other ways she can lean on the State. When her child grows up, the State will also pay for his or her education. Does she need to take the bus? That is subsidized as well. Drop her child off for a story at the library? Subsidized. Daycare is subsidized as well, as is her apartment through rent control or public housing. Dental problems? No problem – subsidies take care of most if not all of the bills. The amount of money and resources provided to single mothers by the State is literally staggering! And when she gets old? Not to worry if she’s been unable to save much money – Social Security will take care of her!

Since getting pregnant while unmarried is no longer a ‘life or death’ issue, a young woman has far less incentive to keep her womb to herself until the right man comes along. She won’t have a great life economically, but she’ll survive just fine – and also nicely avoid slaving away at low-rent jobs. If you were staring at a decades’ worth of McJobs before you got any kind of decent career, ‘Plan B for Baby’ might start looking pretty attractive too!

Through such State-enforced subsidies, young women are seduced into self-destructive decisions, and sink into an underworld of dependent and dangerous lifestyles. If they have daughters, those girls will grow up in a world filled with unstable men, and without a loyal father’s love and guidance. What are the odds of such girls growing up to be sexually responsible? Not nil, certainly, but not high either.

Thus is the stage set for rising numbers of abortions – and, since having an unnecessary abortion is one of the most egregious examples of preferring short-term gains to long-term gains, subsidizing error is scarcely the best method of encouraging greater rationality.

Taxing Family Planning
It is very hard to make good decisions when everyone around you is making bad decisions. Either you go along, and jump right into their pit of error, or you withdraw, provoking social ostracism and, all too often, outright hostility. When, encouraged by the endless subsidies of State programs, a certain number of unplanned pregnancies are reached, they become the norm, and vaguely something ‘not to be criticized’. Young women, in order to keep their friends and not be attacked as ‘superior’, often decide that it’s cool to engage in sexually risky activities. When combined with the financial incentives outlined above, the ‘social acceptance’ motive proves overwhelming for far too many women.

And what alternatives are available to those young women who decide to take the ‘straight and narrow’ path and avoid risky behaviours? What kind of opportunities are out there? Minimum wages, State-monopoly unions, over-regulation, crippling taxation, mind-numbing apprenticeship programs and a thousand other political factors have virtually killed off job opportunities for the poor and unskilled. Jobs are scarce, taxes are high, and careers almost impossible. State schools fail to train poor youngsters for anything useful, and so higher education is probably out of the picture as well. So it’s fairly safe to say that productive and honorable lifestyles are as thwarted as irresponsibility and instant gratification are encouraged.

So far we have only been talking about women – but what about men? How has male behaviour been affected by these fundamental reversals in social values? Well, as the negative effects of sexual indiscretion become less and less, men also become conditioned to expect let us say ‘short term’ interactions with the fairer sex. As more and more women decide to engage in risky sex without requiring a commitment, the value of education, integrity and hard work for man go down proportionally. And, as male virtue becomes debased, other values, more sinister and shallow, take their place. Women go for ‘hot’ guys, or guys with lots of cash to spend, or with the kind of predatory status that comes with gang membership. The entire ecosystem of sexual attraction and stable provision is turned upside down, and the men formerly viewed as losers become winners – and vice versa.

Thus a woman looking for a ‘good’ man faces a distinct scarcity of such paragons – and may also face the mockery of her peers if she chooses a geeky provider over a shifty stud-muffin. ‘Good men’ become scarcer – and objects of ridicule to boot. Female attractiveness, formerly the coin that purchased male loyalty, now becomes a magnet for shallow and unstable man-boys looking for another notch in their belts.

Questions like abortion are so complex that they cannot be solved without reference to the shifting nature of rewards and punishments created by an ever-growing and ever-violent State. Like most social problems, the solution must be voluntary, and based on the financial, social and moral realities of biology and economics.