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The alternative to the state, part 3: mutual aid

July 24, 2012 12 comments

“Anarchism is stateless socialism.” – Mikhail Bakunin

Naturalist and anarchist Pyotr (Peter) Kropotkin wrote Mutual Aid: a Factor of Evolution (available here) in 1902 in response to claims that natural selection and “survival of the fittest” meant the struggle of all against all. The historians, he explained, taught us of wars, cruelty and oppression, and the state, glad to find an excuse, explained to us that those things would be the norm if not for an intervening authority. (Hobbes’ “state of nature” being an unfortunately-well-known example of why we think this way.)

His book describes a different point of view: mutual aid among humans and other animals. It shows not only how they take care of each other, but the evolution of the morality of mutual aid. The “Law of Nature”/“kill or be killed” doctrine is simplistic and only covers a part of the existence of animals in the wild or humans in society. Members of a wide variety of species engage in mutual aid, not only within the species but sometimes across them, as we learn when we see birds cleaning the teeth of crocodiles.

Though competition among people can help economies grow, far more important is taking care of one another. We help out our family members, our friends and even strangers who can do nothing for us. As I explain elsewhere, we possess love, kindness, empathy, sympathy, caring, and a sense of fairness. For various reasons, we may not cooperate regularly with those in our community. But we could.

Mutual aid, examples of which are detailed below, has existed in human society for as long as we have been humans. Mutual aid promotes community and independence, which is why the state, along with slave owners and bosses, frequently attempts to shut it down. They have put a state bureaucracy in place of people helping each other, imposed taxes so that people needed to find sources of income, and declared a variety of practices illegal. But in the space where mutual aid has been allowed, it has flourished.

Why mutual aid? Why not charity?

In spite of the huge sums taken from them by the state, people still give to charity. They realise the state is not helping the causes they believe in and know they can help by picking up the slack. Why? “Presumably for a combination of reasons, including, in no particular order, compassion, social norms, the desire for good reputations, the desire to avoid bad reputations, and the desire to avoid social disorder.” (“Government is no friend of the poor“) Mutual aid, like charity, avoids the high administrative costs and, of course, the political intentions of government-run antipoverty programmes.

There is nothing virtuous about being forced to pay for other people. But charity is generosity, right? Charity is not necessarily bad, but it can have the effect of entrenching poverty like government welfare programmes, rather than leading the way out of it. It can grant the givers a sense of benevolent superiority. It can disempower the receivers, making them feel like they have nothing to contribute. Giving food and clothes can also destroy local economies, as free foreign goods crowd out local goods. People come to depend on someone else’s help. Mutual aid, on the other hand, implies that people in the network will help each other whenever and however possible.

Mutual aid is not likely to be illegal, in contrast to agorism. It means putting aside the competition and force that are inherent in the statist model (whether capitalist or socialist) and cooperating to help one another. It means sharing, and cooperating to make sure what one gives is used as one wants. While our nature pushes for reciprocity, we do not necessarily expect an equal return. It might run along the Marxist principle of “from each according to his ability to each according to his need”. (Of course, people may decide to kick free riders out of the network.)

For those who do not trust or believe in the welfare state, mutual aid can create a social safety net. It can prevent the poor, disabled or elderly from falling into poverty. You can be sure your money is going toward community projects or helping those in need, rather than hoping the government or a potentially-corrupt non-profit is spending it the way you would like.

What can you and the people around you do to help each other?

–The book Mutual Aid and Union Renewal argues that unions could reverse their decline if they engaged in mutual aid. If unions do not appear to benefit their members, or simply do not encourage their involvement, loyalty will remain low. But a union could act as an extended family. Some union members have set up member assistance programmes, helping each other with alcoholism and substance abuse, for example.

–The cooperative is an autonomous association of people who voluntarily work together or jointly own something, like a housing project or business. They are usually run democratically (without the state) by their members. They foster community through cooperation. Ideally, they would break off from and become independent of the state, and thus provide examples of secession.

–A worker or producer cooperative is one owned by the people who own and operate a business. (This arrangement is sometimes called “market socialism”.) Shared ownership diversifies, rather than concentrates, wealth. Not all worker cooperatives are exclusive owners of businesses, as some outside shareholders may be involved. Such cooperatives employ over 100m people and could be the wave of the future for business. After all, Ocean Spray, Sunkist and the Associated Press are all cooperative businesses.

–Agricultural cooperatives enable farmers to pool their resources for mutual benefit. They may be more able to afford capital equipment for more efficient farming in this way. In the days of continual raids on small farms and heavy subsidies of big farms, the benefits of farmers’ working together outweigh the costs, both to themselves and consumers. A kibbutz is an agricultural cooperative, as is India’s Amul, which sells dairy products, and Malaysia’s FELDA, which sells palm oil.

–A consumers’ cooperative is a business owned and run by its customers. The two largest supermarket chains in Switzerland are co-ops. Canada’s Mountain Equipment Co-op is one example, as is the UK’s Co-operative Group.

–Finally, social cooperatives, of which there are over 7000 in Italy, provide social services such as child care, elderly and disabled care, help with addiction, education and employment counseling.

–There are other community-strengthening ideas that fall short of cooperatives. You could start a neighbourhood watch, where members of the community take turns guarding each other’s property. Neighbourhood watch is widespread in North America. When the police are absent, their job is merely to punish crime. A neighbourhood watch can prevent it by having people present at all times. Moreover, in the countless parts of the world where the police are not accountable to those they police and are seen as thugs, a well-established neighbourhood watch could make the police redundant. This practice is easier today than ever, since we can communicate with each other at great distances, calling our neighbours to warn them without knocking on their doors.

Neighbourhood associations and homeowners associations of various kinds are protecting local environments, enforcing safety and other rules, organising social activities, building recreational facilities and fixing roads.

–One person following this blog’s Facebook page told me of a teacher who started a parents’ group that collects canned food, clothing, books, small items such as toothbrushes. Parents donate time, labour or rides to one another. In this way, the group promotes agorism and community.

–Poor communities have even more to gain. Many rural Africans work each other’s fields, and the owner of a given field might provide food and drinks. They help one another build houses. They pool their money for life insurance, or household items. (See more here.)

–People who complain about high costs of buying from the insurance oligopoly may want to pool their money with others. Members of the network may choose criteria by which some pay more and others pay less. Smokers might pay more in a health insurance society and pyromaniacs will probably not be allowed in a fire insurance society. And no one will be forced to subsidise others’ risky habits.

–Likewise with the banks. Need a loan? How about a credit union? There are thousands of credit unions in North America with millions of members. A credit union is an example of a consumers’ cooperative.

–Sick of inflation? Don’t like making money? Ever tried a local exchange trading system (LETS)?  LETS is a non-profit enterprise that records transactions for people’s exchanging of goods and services. A member may earn credit for fixing someone’s car, and spend it later when he needs a babysitter or a dentist. The credit does not need to be in the national currency, which is how it avoids inflation and the necessity of making money. Credit can be given for a given job by whatever criteria the people decide.

–Mutual aid could mean investment. Communities or other networks can put their money into local ventures with people they know and trust, gaining a tangible stake in the business and avoiding the rigged markets for securities.

–Support groups have sprung up for just about every shared personal problem. People who have the same illness take strength from and learn to cope thanks to their groups; immigrants set up hometown societies or landsmanshaftn.

–Occupy Wall Street coordinated mutual aid for the those who participated in the May 1 protest. People supplied food, medical and legal support, skill sharing and workshops, and hosted a Really, Really Free Market (mentioned in my last post) where people could bring clothes, books, toys, tools and whatever other things people who wanted to participate in a gift economy could bring. They set up a free university, as well.

–Rachel Leone, writing on mutual aid at Occupy, says,

You might not know it, but mutual aid is already part of your everyday life. Family members — both chosen and biological — take care of each other when one is sick, watch each other’s children and pets, and help with household projects. Friends share food and favorite books. Couch-surfers allow strangers to stay on their couches when they travel and then go off to adventure themselves, knowing that they will have a place to rest and a new friend at their next destination. Hitchhiking gets people to from state to state in exchange for stories and songs. Neighbors share recipes and tools. And let’s not forget that good consensual sex can be a form of mutual aid, too!

All these things are already happening. Mutual aid has never been easier. Mutual aid societies have gone international. They use online platforms like www.chipin.com. If more people choose not to depend on the state, the idea will spread.

Many people are predicting the collapse of the state, or of parts of it, such as unsustainable health care systems. Mutual aid may become necessary. The sooner we get started, the freer and more secure we can be.

Principle versus expediency: how to save the world

June 18, 2012 Leave a comment

Billions of poor people. Wars without end. Torture, disease, genocide, starving children. There are some major problems in the world. The question is, how do we do something about them? We have options. Some people say we need to take control of governments and force the changes rapidly. After all, people are dying now. This post will argue against hasty action.

We have become accustomed in the modern world to doing things fast. We want things now. This trend is reflected as much in activism as with everything else. How will we change everything? Revolution! Slow down. What kind of revolution? A revolution is a major event involving many people. It is impossible to predict the outcome of a revolution, and it is rarely (perhaps never) as the original revolutionaries envisaged. And the kind of revolution that takes place in the street inevitably means violence. Is an uprising, violent or non-violent, the best way to change the world? Let us continue with our options before deciding.

Another effect of wanting immediate results is a focus on elections. We need to field new candidates, ones that will do the right thing. Are there people like that? Look at the hopes of the Tea Party. After the Tea Party got some of its members elected on a small-government ticket, the newly elected voted for all the same big-government legislation as the other Congresspeople, and have even ended up with all the same campaign contributors. It turns out that a few new people could not make radical changes. One does not simply walk into Mordor.

How about putting pressure on existing politicians? That can work. As little hope as I see in the political process, enough letters or enough protesters can force the hands of the elected. But what is the political solution? Remember, government is based on force. Every law passed is an order. If one does not follow the law, one risks arrest and all the violence that it results in. What we want to force on others may not be the best thing for them.

When we consider working through the system of force, we want to use the existing tools to do so. The state system has two basic tools at its disposal: taxation, which could be used to redistribute wealth, and law, which could be used to force people to act right. I am opposed to the idea of using the state on moral grounds. And as I will demonstrate, morality is not only an end; it is a means.

As I write in greater detail elsewhere, a simple but powerful moral rule is the non-aggression principle (NAP). The NAP states that the initiation of force or violence, including the credible threat of violence, against unwilling adults who have not initiated force themselves is immoral. Laws force entire populations. If we could opt out of laws, we would be free, but we cannot. Laws based on the NAP are moral but laws regarding what we wear, eat, drink and smoke, for example, are not, because those things do not harm others. There should be no law regarding victimless pursuits. Taxation means forcing populations to pay for whatever the government decides on. But not everyone in the population has aggressed against another, or is being taxed commensurately to his or her aggression.

Many anarchists believe in the NAP on philosophical grounds. They argue that, whatever is done with the money raised by taxation, whatever someone’s idea of virtue that informs the wording of a law, it is wrong to force peaceful people. More importantly, however, force is a terrible tool for solving problems, and tends to cause far greater ones.

Do taxation and regulation lead to a redistribution of wealth? Yes: from the lower classes to the rich. The basic reason for that is that the lower classes, including the middle classes, have no power over the state. The state has power over them; and in every society, it becomes a vehicle for transferring wealth from the people who are outside it to the powerful people who control it. We have had social welfare policies for decades and poverty still exists. But why are they still poor? Welfare policies actually entrench poverty by making people dependent on the state.

The best cure for poverty is, in fact, a free market. The free market just means free people trading with each other out of mutual benefit, without force. Tearing down the endless regulations and taxes that are designed to benefit the wealthy would give opportunities to everyone else to work as they like. How we could do that by using the state I do not know, because, again, laws benefit the powerful and the powerful control the state. It is impractical to use the state to solve society’s problems.

Could we use laws to force virtue? It depends what is virtuous. I agree with Penn Jillette on this one.

It’s amazing to me how many people think that voting to have the government give poor people money is compassion. Helping poor and suffering people is compassion. Voting for our government to use guns to give money to help poor and suffering people is immoral, self-righteous, bullying laziness.

People need to be fed, medicated, educated, clothed, and sheltered, and if we’re compassionate we’ll help them, but you get no moral credit for forcing other people to do what you think is right. There is great joy in helping people, but no joy in doing it at gunpoint.

The other question is, can the state actually be reconfigured to work for the greater good? Can it be sustainable if done by force and not spread throughout the population as common values? I am inclined to say no. If people can be led to believe in taking care of each other and taking care of the poor, they will do so voluntarily, as of course many do already. If they cannot, forcing them to do so could lead to a backlash. Look, for example, at the plight of some of the people in the democratic world who are most vulnerable: immigrants. Immigrants are people like everyone else, so surely they should all be permitted the same rights and freedoms. Letting immigrants into the US, Europe and the rest of the rich world meant giving them a chance to help themselves and their sending countries. But anti-immigrant forces first controlled the discourse and then the relevant areas of the state, and 400,000 people were deported from the US in 2011 alone. People escaping horrible conditions in Africa are left to drown in the Mediterranean. I take the sum of these and similar actions and indifference toward them to mean the people are not ready to be forced to take care of everyone else.

The state may be a lost cause, but we are not out of options yet. The problem is that the more viable solutions are long term. They require patience, not quick fixes. I think there are two basic things we could do. The first is to educate people—particularly ourselves—on the issues and how to solve them. We can keep the real issues foremost in the minds of people, so that we are the media and the teachers. That doesn’t just mean Facebook, of course. It could mean street protest and symbolic action to raise awareness. This process is neverending, so it is incumbent on concerned people to educate to the extent that others become the media and the teachers as well. The main downside to this option is that not everyone will be interested. But that just means they have better things to do, and I do not blame them for that.

But not everyone has to join us. The second thing is to organise with like-minded people. That means being leaders, working together, helping each other and doing things ourselves. The revolution does not have to be violent. Look at what Occupy did. They were entirely voluntary, working on consensus, anticapitalism, mutual aid, equality and solving their own problems. They showed everyone that we can have a voluntary society, that we can build a new society, based on compassion and helping each other, out of the shell of the old. It is called prefigurative politics. These values also inform the philosophy of the sovereign community, meaning new communities outside the reach of the state. Voluntary institutions show not only the morality of the NAP, but also that we can solve the world’s problems without force.

Ron Paul

March 6, 2012 Leave a comment

We endorse the idea of voluntarism, self-responsibility, family, friends, and churches to solve problems, rather than saying that some monolithic government is going to make you take care of yourself and be a better person.” – Ron Paul

Electoral politics, despite everything I have said about it, could be a path to freedom. I might be wrong that working through the current political system to achieve a freer and more just society is unrealistic. After all, perhaps the anarchist vision of a world without artifical hierarchies backed up by force is unrealisable. Presumably that and similarly less-optimistic beliefs about what is possible are why some people reject radical ideas. But Ron Paul could represent a major new step toward that world.

Well, it’s possible. This post is why Dr Ron is the only politician I have ever seen anywhere that I would (tentatively) endorse; why his policies are the right ones; why the two biggest slanders against him are wrong; why I do not expect him to win; why he will have trouble implementing his programme even if he does win; and why I am nonetheless glad to see how far he has come.

Why Ron Paul is different

There are two reasons I believe Ron Paul is different from anyone else running for president.

-First, he has a consistent voting record. As a Congressman, Ron has always voted according to his libertarian convictions, voting against wars and the police state, for example. (The same could not have been said about Barack when he took office, as Barack had voted for spending bills funding Operation Iraqi Freedom, for instance.) That means Ron has principles, a hard quality to find in a politician, and even more important, sensible principles; we can be thankful that the voters in Ron’s district approved.

-Second, one of the biggest problems with democracy is that most politicians are swayed while in office of promises of lucrative jobs and other benefits after leaving office for pleasing special interest groups. Ron would be 82 or 86 when he retired from the presidency. Would he really need any more money? He is less corruptible than a president in his 40s or 50s. I think. I could be proven wrong, however. After all, he still accepts campaign contributions. He will need to give out some tax-funded presents if he gets to the top. Still, his policies are worth trying.

Dr Ron’s policies

Before we delve briefly into the man’s policies, bear in mind that everything I am about to say is based on his voting record and stated principles. I do not need to remind anyone reading this blog that politicians seldom keep their word when they get into office. As I say above, he is more likely to do what he says than others, but we should be careful not to fall into the trap of assuming he will or will be able to. If fewer than nine tenths of those who voted for Barack with tears of joy in their eyes are not disappointed now, they have not been paying attention. We can only hope Ron will be different.

His policies, if he truly attempted to implement them and was able to do so, would save countless lives and taxpayer money.

-He would very likely refuse to bomb Iran, or give the Israeli hawks the green light to do so they thirst for.

-He would end the War on Drugs, and all the maddening arrests, gangs, murders, destruction and seizure of property, corruption of law enforcement and governments that goes with it.

-He would end the War on Terror, the war on Afghanistan and support for corrupt dictatorships. Doing so would shrink and hobble the military-industrial complex and the surveillance state. Ending the US’s disastrous military adventurism would almost certainly reduce or even end both foreign and domestic terrorism as well. As such, we would have less need for the FBI and the CIA and all the trouble they cause as well.

-He would abolish the Federal Reserve, meaning people would be able to save their money and not see it vanish through inflation caused by the printing of money. Since the Federal Reserve was instituted in 1913, the US dollar has lost about 98% of its previous value. That means anyone holding dollars at any time in the past century has lost his or her ability to spend that money. And since the Fed printing more dollars between 2000 and 2007 than in all its previous years combined, we can expect inflation to eat away at everyone’s savings ever more rapidly in the near future. (If you think we need a central bank because inflation is a good thing, I urge you to read this.)

-He would decrease government spending, meaning lower tax and debt burdens for our and future generations. This move would encourage investment locally and from other countries.

-He would repeal (or just stop passing) laws and regulations that hold back small and medium sized businesses in favour of big ones. A freer market would bring innumerable benefits we can only begin to imagine. The greatest experiment in anarchy and free markets ever, the internet, has proven the value of creative destruction, creating new economies, new ways of communicating and access to a previously unthinkable amount of information. A free market in the US could mean something similar. Ron Paul could take the US on its first few steps in over a hundred years in that direction.

Of course, all hopes are that he can get into office, can follow his principles while in office and avoids getting blocked by special interest groups. His first obstacle is libel and slander.

What has been said about Ron Paul

-“He’s a racist.” In a move typical of politics, his opponents have been able to use the scantest evidence to turn countless lefties away from Ron Paul by branding him as the thing they hate the most. But are his policies racist? How would they affect people?

In fact, policies of freedom are policies of equality and anti-racism. They give everyone the opportunity to live the life they want. They reverse the state’s entrenchment of poverty and the entitlement mentality it has fostered for decades. Fewer people would depend on the state. Poverty would fall as people would be able more easily to start policies without endless restrictions, tax forms, regulatory requirements and licensing fees. Paying lip service to diversity, or in Barack’s case just being black, says nothing about how the man’s policies affect people. The free market would do wonders to eliminate poverty for everyone.

-“He’s an isolationist.” Nearly as emotive for the right wing as “racist” is for the left, Ron Paul has been called an “isolationist” for his foreign policy. Presumably, by isolationist his enemies want to shed light on the fact that Dr Ron disapproves of overseas military bases and interventions. Is that really such a bad thing? At a time when the US intervenes militarily in a number of countries and kills everyone in its path, its overseas prisons and bases consume billions of dollars and approval of the US around the world is in the toilet?

But isolationist implies ignoring the rest of the world, evoking the time China’s emperor ordered the destruction of all imperial boats to cut China off from the rest of the world. The word these people are looking for is non-interventionist. Non-interventionism is simply the absence of coercion on an international scale. In the absence of instability caused by war, people trade with each other. And because borders are meaningless to people who have something to offer humanity, they trade with whoever in the world has what they want. And free trade, which really means without a government-written and implemented policy backed up by a gun but the absence of one, breaks down barriers. It lets everyone benefit from a liberal economy wherever the power has not been taken away from them to do so. A Ron Paul foreign policy would likely be one of cooperation and trade, not war.

Why I don’t think he’ll win

I am not a pessimist by nature. The glimmer of hope I see is the reason I wrote this post. But I do not actually think Ron has a chance. Think of the people who oppose his policies.

-First, big business, protected by countless laws that run counter to the free market Ron may understand and believe in more than any politician in the US. The opposition of big business to Ron Paul shows up in the media conspiracy against his candidacy. As is well documented by media watchers and his supporters, the mainstream media have deliberately ignored Ron Paul every chance they can, even sneakily not mentioning his name when discussing the Republican candidates. If Ron’s supporters can continue their commendable, tireless efforts to turn heads, he will break the media blockade.

-At the same time, Ron is opposed by anti-business types who believe his free market policies benefit big business. Ron Paul or no Ron Paul, these people need to be made to understand that the owners and executives of big business do not fear regulations: they write them. At the moment, markets in the US are dominated by an effective oligopoly of large corporations who can easily afford to comply with complicated tax codes and burdensome regulations. Fewer regulations and subsidies mean new businesses can be created by anyone to challenge the big players, lowering prices and unleashing the ingenuity of the free market as a result.

-Next, the US military’s domestic constituency. Everyone who believes the US should have a big, interventionist military that invades other countries for looking at the president the wrong way have something to fear from a Ron Paul presidency. These are powerful people, represented in some very powerful interest groups.

-Any other pressure groups currently getting rich off the US taxpayer may also decide Ron Paul is not their man. All these groups can fund media campaigns to deny Ron his chance.

Since Ron wants to reduce or eliminate foreign aid, foreign governments do not want him to win, either. Think of the states who would lose military aid and protection:

-Afghanistan, Pakistan and the other Central Asian states as the AfPak war is wound down;

-Saudi Arabia and the Gulf states protected by the US military;

-Israel, Egypt, Jordan, the Palestinian Authority and so on benefiting from US government patronage;

-and even Britain, France, Germany, Italy, Japan, Turkey, Russia and China who benefit from the oil and other big business concessions they would lose when the US stops fighting wars for them. (See here.)

How they could prevent Ron’s victory is hard to say, as it would be clandestine; perhaps they would fund media campaigns; perhaps they could get him assassinated. Presumably, not all of these governments would do such a thing. But we would probably never know who it was if they did.

Why he probably would not be able to do much if he did win

It is still possible that enough voters are not fools and Ron will be elected in 2012. A major push by his supporters, along with a continued stellar performance from Ron himself, could secure a victory. But things would not be easy for him.

-The same foreign governments could find ways to oppose his actions after he was elected, from the same hypothetical disinformation campaigns to a terrorist attack that would leave the US people thirsting for blood and forcing Ron’s hand to go to war. But, of course, the hardest hurdles would be from within the US.

-Congress would not be libertarian. It would still be beholden to interest groups. It would likely block as much meaningful legislation as it could. Congress has grown in dysfunction for decades as the rewards of power have grown. A libertarian president’s greatest hurdle would probably be an irretrievably corrupt Congress.

-The people would not be libertarian, either. To make what could amount to a revolution in the US could be catastrophic if the people are not ready for Ron Paul’s ideas. To his endless credit, he has educated numerous masses on the principles of freedom, the Constitution, US history, the Federal Reserve and the realities of wars and terrorism. And many of his supporters have spread the same ideas; kudos to them, too. Winning the Republican nomination would give Ron far more time on the bully pulpit, forcing the media to pay more attention to him. My worry, however, is that, at this point in history, opposition to Ron’s policies will pour out of every corner of American society.

-Teacher strikes that would ensue if Ron eliminated the Department of Education, and they would enjoy widespread popular support. Any similar union or other interest group fearing a threat to its established legal privileges could engage in strikes or other protests. Millions of Americans depend on the state in one way or another, many of whom are very rich. Working together, they could cripple the economic growth Ron’s policies would otherwise foster.

-Moreover, there is also a distinct possibility that those predicting an imminent economic crash will be vindicated. Ron Paul would be taking the reins just as the economy and the political system are crashing. The uneducated masses will be easily led to believe libertarianism is to blame for these crashes, just as they believe the free market was to blame for the subprime and financial market crashes of 2007 and 2008. The instability caused by strikes and so on might lead the people to pine for the days of the police state.

Why I am glad he is running for president

I may not think he will win the nomination or the election, but I am nonetheless thrilled to see how many people Dr Ron has educated. He has used the bully pulpit to open countless pairs of eyes to libertarian ideas and Austrian economics. This alone makes me love his candidacy.

But until we change many more minds in the US, Ron Paul’s wonderful ideas could run into million-dollar or million-man roadblocks.

Fortunately, with or without a Ron Paul presidency, there are plenty of ways to oppose the state and achieve freedom. This blog will go into those ways in future posts (and when it becomes a book later this year).

Immigration and borders

August 22, 2011 2 comments

We have discussed free markets, but barely touched on the most regulated market of all: the labour market. And the biggest barrier to a free market for labour is the national border.

Which of the world’s borders are the most tightly controlled? Those of the rich world. Why would that be?  It has something to do with the privileges afforded exclusively to citizens under the welfare state. Having lots of children means a welfare system is potentially sustainable, though it is largely unnecessary, as children will take care of their parents. Since welfare states were implemented, mostly in the wake of WW2, fertility rates have dropped. Overall fertility rates have historically fallen as prosperity has risen. However, this drop in fertility has made welfare states unsustainable. This problem is particularly acute when people live longer and technology improves: health care systems require more money to buy the equipment to keep more people alive longer. But since the austerity of the War, citizens of the rich world have acquired an entitlement mentality. Now that the austerity generation is nearly gone and the first welfare generation is retiring, the belief that we somehow deserve all the important things is entrenched. Entitlement is supposed to guarantee jobs, minimum wages (or for some “a fair wage”, which presumably means something higher than market wage), schools and universities, recreation centers , hospitals and clinics, medicine, retirement at 65 or younger and pensions. Given the enormous government spending required to maintain all these things, again, in their current forms these privileges are not sustainable. Without a rise in taxes to pay for it, which would mean less money for the productive sector and thus less wealth to go round, the welfare state cannot continue to dole out the same level of benefits it always has. There is, however, an alternative: immigrants.

Though it may seem unfair to ask the poor to pay for our luxuries, there might be billions of people around the world willing to do so. But the people of the rich world do not want immigrants; at least, not many. Immigrants burden our public services, take our jobs and worst of all, threaten “our way of life”. As a result, we tighten the borders. Tight or closed borders, like unions, reduce competition for jobs, raising wages and with thus the costs of doing business. Corporations ship jobs overseas where they can pay lower wages and avoid burdensome regulations (though due in part to that trend, other countries now offer other advantages as well). Workers get angry that they have lost their jobs, and instead of either considering that their lack of competitiveness, the welfare state or the closing of the border had anything to do with it, they advocate policies of violence (arrest and deportation) against the immigrants they think are the reason for all their troubles.

Many people are opposed to immigration, and are opposed to trade that affects their jobs, and are opposed to the offshoring of their jobs. They blame big business for offshoring, as big business is only in it for themselves. Well, labourers are only in it for themselves, too. In fact, so is everyone. That makes us all selfish and greedy, not just rich people. Calling corporate executives selfish is hypocritical, as workers who are protecting their jobs by not letting anyone else into the country could easily be described as selfish as well. When immigrants enter a country, many of them (depending who is allowed in) gravitate toward the lowest-paid jobs, because these jobs are jobs for which you do not need much English, a college education, local accreditation, and so on. If native-born people believe they should have those jobs rather than others who had the misfortune of being born elsewhere, let them work for them. If they cannot do the jobs at market wages, which is whatever the workers who are available and good enough to do the job will accept, then they could either upgrade their skills, look for another job, start their own businesses or figure something else out. Throughout history, when technology and immigration have destroyed jobs, the newly unemployed typically find new jobs. When jobs are destroyed, as thousands are every day, a roughly equal number (depending on conditions such as economic boom or bust) are usually created. There is nothing to fear from job destruction, or from people who will accept lower wages’ taking jobs, because there is no fixed number of jobs to go round. A related economic fallacy is the belief that war would be good for the economy. War employs many men, but the activities they perform are destructive, as opposed to productive. They are employed by the state, which sucks money and people from the productive sector of the economy. If they had been left in the private sector, it might have taken longer for them to find jobs or get their businesses off the ground, but they would have done so eventually, adding far more to the economy over time.

When working people start complaining that foreigners are snatching up their jobs, calling people illegal and demanding deportation and giant fences, corporations are forced to pay higher wages. There is less competition for the same job because the government is distorting the labour market and denying entrance to the country to people who have as much right to be there as anyone else. Who cares who was there first? There is no moral case for immigration laws. When corporations are thus hobbled, they want to reduce costs and thus seek out cheap labour in other parts of the world. If the workers had accepted less, they would not have done so. But people who believe that having the same job for 40 years is somehow a right get self righteous. Instead of improving themselves, they blame immigrants, corporations and the government. The entitlement mentality blinds us to our own faults, and to the irrationality and immorality of fortified national borders.

Borders make sense when they are amicably agreed on by owners. The borders of your property, for example, or unguarded borders in Europe that now demarcate cultural boundaries rather than the do-not-pass-or-we-shoot variety, make good neighbours. But when nationalism comes into play, and groups that, hundreds or thousands of years ago (before national boundaries were invented), used to control this territory, feel that it is theirs (and by extension, not yours), they are willing to kill each other to secure that border. This is our property and our people and our resources and our little lines drawn on the map.

But where is the logic of these boundaries? Even the idea that “we” used to control this or that territory, or have done for a long time, usually has no merit. Almost every (if not every) national boundary has been created by war and empire. The empires of Britain, France, Spain, Portugal, Germany, Italy, the Netherlands, Belgium, Russia, China, plus all the empires that disappeared before the Treaty of Westphalia, all drew lines around their possessions. They needed to be clear what was whose. At the same time, these possessions contained people not native to the empire’s centre of power on them so they needed to keep them in line by inventing nationalities. Almost every (if not every) one of these borders did not reflect the cultural makeup of the people it enclosed; they were arbitrary. But when the empires left, instead of redrawing the borders, the elites decided they wanted to make everyone inside those borders think they were a cohesive group—a nation—because it would help them gain power. No government wants to relinquish control of part of its territory because it means less power; and less power is out of the question for anybody in it. So they invented myths about how everyone within the imperial borders has always been a nation, and since we are the political party who will help keep our nation together, support us. The story of post colonial electoral politics in a nutshell.

So why are there so many border disputes? Why not dissolve the borders and share these artificial creations called countries as equals? Because the empires and post-colonial elites have already made the people feel they are indivisible and proud nations that must retain territorial integrity at all costs. They do not want to share with outsiders. Children know how to share. If children were at the helm, they would share. But adults would rather send people to die before that happens. There is no sharing within our border.

And God forbid one might call those who would deny others access to a piece of land because they are from the wrong country racist. It certainly seems that way to me. Borders and anti-immigrant policies of any kind strike me as inherently racist. There is something superior about people from within our imaginary line, but those outside just do not deserve the same benefits. Of course, that is not how the argument is framed. Instead, it is considered unrealistic to think that a country like Canada, the US, Australia, etc. could ever absorb tens of millions more immigrants. But why not? There is obviously space for them. “Overpopulation” is not a problem anywhere people are free to move and create their own opportunities. The problem is lack of money to feed and house everyone. As we will see below, the claim that integrating newcomers will come at enormous expense or would cause food shortages is largely baseless, especially in a free society. But the racism is still there, under the surface, whether the non-racist people against immigration realise it or not.

Illegal immigration to the USAre you afraid your culture will change? It makes sense to think you culture is superior to that of others because it is what you are used to. It is the culture you understand best; every other culture is full of freaks. If we do not understand other people beyond the surface, and we do not try hard to understand, it is easy to see them as inferior. Ruben Navarrette believes that the arguments about border security, lower wages and overburdened schools are nonsense. No, he says, it is cultural change that makes us shiver, and any rhetoric disguising that fact should be exposed.

It conjures up the alarm bells that Benjamin Franklin set off about German immigrants in the late 18th century, who he insisted could never adopt the culture of the English, but would “swarm into our Settlements, and by herding together establish their Language and Manners to the Exclusion of ours.” It popped up in the mid-19th century amid worries that Chinese immigrants were “inassimilable,” which led to Congress approving the explicitly-named Chinese Exclusion Act of 1882. And it helped welcome the 20th century when Massachusetts Sen. Henry Cabot Lodge warned that immigrants (read: the Irish) were diluting “the quality of (U.S.) citizenship” and others complained that Italian immigrants were uneducated, low skilled, apt to send all their money to their home country and prone to criminal activity.

I think opposition to immigration stems from a combination of factors economic and cultural, but Mr Navarrette’s argument is worth considering.

It is not just the welfare system and jobs that attract the “invaders” (a term used, ironically, pejoratively by many people who supported interventions in Iraq or Afghanistan). It is also the avoidance of wars. The US government’s War on Drugs has killed some 35,000 Mexicans, not to mention Colombians, Guatemalans and other Latin Americans. Not only do they have a reason to leave where they are, an argument could be made that a certain government with a certain agenda owes them something. The war in Libya, along with the overfishing of the coasts of Somalia, have created refugees that have been rejected by the European countries that sponsored those efforts and let innocent people drown in the sea. One commentator describes letting refugees die in Fortress Europe’s moat a strategy for keeping them out. But at least they are not burdening our welfare system.

As with most laws, a few people making money off the status quo are a hindrance to their repeal. Your country as a whole does not benefit from restrictions to immigration, but some people do. Well-connected corporations make millions of taxpayers for locking up undocumented immigrants. The criminalisation of movement keeps prison operators happy. Like workers who fear newcomers, special interests will fight to the bone to influence legislators to retain their legal privileges. A few people win, but desperate people who risk their lives crossing an invisible and arbitrary line on a map for a better job lose. If we want to boost economies, reduce poverty and promote freedom, let us open all borders.

A further reason immigration is so restricted is that the anti-immigrant argument is partly a scapegoat contrived to divert attention to people who are different from the underlying causes of unemployment, violence and other things people blame on newcomers. A government that induces financial crisis and takes away money from people so they have less ability to defend themselves against them has a major interest in pointing fingers. Who better to blame than people who are visibly different, poor and cannot stand up for themselves? There is no longer any case against immigration. Should we do away with borders altogether? Well, have they brought us any benefits?

Are we freer than ever before? Until a hundred years ago, people who wanted to cross borders did not carry passports; they just went. Now, we need passports and visas, obtained following time-consuming and expensive (in fees and taxes) bureaucratic processes. And not everyone can get a visa. We can be denied access to the US-Canadian border for a record with a DUI, possession of a medical marijuana card, shoplifting or arrest for attending a peace rally. You do have legal recourse, which you can apply for after five years, but you need to send in court, police and FBI records, and a $200 fee. It’s a good thing about that fee, eh? Without that, how would the people who don’t let peaceful people cross borders make their livings? The persistence of borders seems to be little more than another bureaucratic rule designed to justify the existence of the bureaucracy.

The argument that national welfare systems would be overwhelmed first ignores the fact that immigrants contribute more to it than they take out, but more importantly underlines the flaws of the welfare state. Why would we get rid of immigrants at great expense in order to perpetuate this expensive and self-defeating system of welfare when we could welcome immigrants, who would contribute greatly to the economy? We would not have the exclusivity of borders and the violence of deportation on our consciences.

The myths are that immigrants steal jobs, commit more crime, go on welfare and contribute poverty. The reality is different. Most immigrants are young men, which one would think would mean more crime and incarceration. But in fact, the incarceration of natives in the US is five times higher than that of immigrants of every ethnic group, without exception. And why not? Immigrants go to work, not to commit crimes. Moreover, welfare case loads have fallen as illegal immigration has increased. Overall poverty have decreased too. It is not simply due to the high-skilled immigrants but the low-skilled ones as well.

A book by the Center for Global Development’s Lant Pritchett called Let Their People Come: Breaking the Gridlock on Global Labor Mobility cites two studies (Hamilton and Whalley 1984; Winters et al. 2003) that reach startling conclusions. Far from harming economies, the full liberalisation of labour markets could result in gains to global GDP at nearly forty trillion dollars. Actually, given what we know about how well free markets generate growth, and given the strict laws preventing a free market for labour, this figure may not be so surprising. Most of the benefits would accrue to the poor, but a rising tide of poor people would probably lift the boats of anyone working for any business they bought from. On a purely cost-benefit analysis, it makes sense to let all immigrants in. Economies would burst with growth, and though temporarily unemployment might increase, over time it would probably remain low. The short-term consideration of losing one’s job should be measured against the potentially enormous long-term benefits to nearly everyone.

Immigration reduces world poverty. Anyone who says they care for the poor and support barriers to immigration is either lying or does not understand poverty. When they support foreign aid to reduce poverty but not opening borders to reduce poverty, they would rather throw a bone to homeless man in order to ease their consciences than integrate him into their neighbourhood. And everyone who sees famines on television and throws up their hands in despair needs to consider that if starving people could emigrate, most of them would survive.

If crops fail in one place, it is likely they will flourish elsewhere, at least if people can move. In a free market, supply almost always rises to meet demand: existing producers produce more and new producers enter market that offer lucrative returns. Naturally, it is possible that climate change, in a much more advanced stage than it is today, would lead most crops to fail all over the world; though as we will see in my post on the environment, it is by no means impossible for a stateless society to have better means of protecting the environment than the status quo. Open borders might be a cure for famine.

But the real reason it is wrong to hold back immigration is that it is wrong to initiate force against peaceful people for any reason, and wrong to close off a country and call it yours. It’s not your country. It’s everyone’s world. Stop being so selfish. Either way, if you believe we should use coercion to keep others out of our country, you advocate violence and exclusivity and you do not believe we should help the poor.

Don’t fear the free market, part 3: Rich and poor

August 13, 2011 17 comments

Redistribute wealth?

“What’s ‘just’ has been debated for centuries but let me offer you my definition of social justice: I keep what I earn and you keep what you earn. Do you disagree? Well then tell me how much of what I earn ‘belongs’ to you – and why?” – Walter Williams

My neighbour has far more money than I do. Should I be allowed to go over there with a gun and force him to pay me? No. When I do that, it is called robbery. But why is it okay for the government to do so? Is it no longer robbery? No, because calling it “law” makes it legitimate. Is it altruistic to force others to give someone else their money? Does anyone else deserve that money? Is taking it from people who earned it justified? Is that the only way to help the poor?

The problem with many statist arguments is that they confuse the ideals of government, which vary depending on the person, but which may well include a perfect redistribution of wealth and opportunities, with the reality, which is that government does not make us more free, more wealthy, more educated or more equal. Government is the institutionalisation of thuggery. The desire to redistribute wealth is an excellent example of this flawed thinking. We need to take more from the rich and give it to the poor. But such policies do not make things much better for the poor.

If a man acquired his wealth ethically, which means that he provided goods and services that people were willing to pay for, then any so-called transfer or redistribution of that wealth is theft. It punishes the people who contribute most to the general prosperity and provides a disincentive to do more. Because it makes it harder for those people to do what they do best, which is create jobs, wealth, products and services, the argument that redistribution of wealth adds to social welfare falls on its face. It is giving a man a fish. Letting the captains of industry strengthen the economy raises social welfare. If people want to raise their individual welfare, they can upgrade their education, learn new skills and start their own businesses, provide what people want and get paid for it, relying on themselves rather than on force.

But a redistribution of wealth is not really a redistribution anyway. Even if you believe it is good to use violence to take money from people who have made it legitimately, most of that money does not go to the poor. It goes into the enormous pool of the government revenues, which pay for the generous salaries and pensions of politicians and bureaucrats, subsidies to large farms and airlines, and making war on weaker countries. Does any of it go to the poor? Sure. But not much of it. And the poor are still poor, even after decades of welfare.

Besides, along with their providing jobs, goods and services, wealthy people give to charity. Facts about who gives and how much can be difficult to come by, as many donate anonymously. Nonetheless, we know Bill Gates, who brought the world Windows and innovated the hell out of computer software, has given some $28b to charity. Warren Buffett, who has financed many successful companies, has given about $40b. The Waltons, the Dells and the Rockefellers have all given in the hundreds of millions. And if you get rich, probably making others rich in the process, you can too.

The rich do not want to keep the poor poor. They have not for at least a hundred years, when industrialists like Henry Ford and John D. Rockefeller began paying their employees more, in part so that they could buy from the corporations for which they worked. (Also because if they wanted the best workers, they needed to offer more. That is how the labour market works.) No one who is not simply cruel wants the poor to stay poor. The more buying power the people have, the better off the rich, as well as the poor, are.

Inequality of wealth is only a problem because of jealousy. It does indeed cause serious problems, such as, to an extent, the current riots in the UK. But taking from others is not the way to solve those problems. Government is not making the poor any richer. The poor are taxed, just like the rest of us; not necessarily through their income, but through taxes on food, housing, and cell phone plan activation fees to name a few. They are taxed by central bank policies that encourage inflation. Sometimes you need to save to buy assets. Inflation eats away at savings. People with weak skills are kept out of the labour market by minimum wages, which discourage hiring. They cannot start art stands at the side of the road without a permit and government stamps.

Instead of resenting the rich and using violence to take their property, we could either learn how to become rich ourselves, which would benefit everyone, or we could learn to move beyond our base emotion of envy and be content.

Protect us from the rich?

A lot of people believe that we need government to protect us from the rich and powerful. I think people who think that way do not understand the nature of government very well, and they have it backwards. The rich and powerful use government to become more rich and more powerful. Whatever party you vote for will be the powerful people of your country. They will have control of a big chunk of the money and the ability to make whatever laws they want. The rich will ally with them, they will take their share, as they always do, and the government will continue to protect them, as it always does; or else a new elite will emerge, as it did under communism. If you really believe that getting more people out to vote, or getting the right person in power is going to fundamentally change that, I think you are naïve. There is no reason to believe that the powerful become any less powerful for any meaningful length of time when there is a new government. And to think that the rich would be more powerful in an anarchic state I believe is wrong, because in fact they wouldn’t have any political power, and they wouldn’t have state protection. That means no more riot police protecting world government-G8-WTO-IMF-whatever-you-don’t-like meetings—there could be security guards, but the people at the meetings would have to pay for them out of their own pockets. In fact, no more of those billion-dollar photo ops at all. No government means no more lucrative insider no-bid government contracts. It means no subsidies for the well-connected, just the people deciding whom to give their money to. It means no government protection and bailouts for the corporations no one likes, only the whims of the market. It means no more police breaking into the wrong house and shooting the wrong man for suspecting him of selling drugs (the war on the poor). It means no more soldiers going to fight for private control of resources overseas (the war on Islam) and coming back in body bags, or coming back as nervous wrecks who do not get treatment. It means more money for the productive sector, which means more and better-paying jobs. And sure, it might mean the rich go to better schools and get better health care, but I think it is fair to say they already do now.

The rich would have the most to lose from an anarchic society, because they would no longer receive all the various handouts they get in the form of bailouts, subsidies, government contracts, and laws that create barriers to entry and monopolies. There would be no limited liability, so people would be accountable for what they do, rather than hiding behind a legal corporation. And though it’s a bit simplistic, it is basically true that managers of public corporations are legally bound to pursue profit. If there were no laws, that would not be necessary. If there is someone with power, which by definition is unaccountable, and he has the power to tax and pass laws, he will pass laws that favour rich people so that he can get some of that wealth for himself. The very existence of government is why the elites can concentrate both money and power in their hands and not have to listen to the voters on the bottom. If you are afraid of the rich, let us start cutting off by cutting off the money they make from taxpayers. How about eliminating bailouts and stimuluses that take trillions of dollars from the productive sector and hand it to any lobby group from failed banks to the wives of failed bankers?

The more wealth is concentrated in the hands of one person, the more others will attempt to rob that person. As such, he or she needs greater and greater security. At the moment, the rich outsource their security to the state, which means they get the taxpayers to pay for the defense of their property. (Find a more robust discussion of this topic here.) The police protect the rich and beat the poor, and yet everyone is paying for them.

Then there is this perpetual fear that anarchy would mean that the rich would have their own private militias to take from everyone else. Well, what do you think the government is? It is a tool of the elites to take from everyone else. But it is also a professional salesteam, selling the illusion that it works, or maybe that it can work, for the people, so that people keep showing up on election day, and the elites keep going to the bank. At least in a free market, rich people would need to pay for their own militias, instead of making you pay for them like now. But I do not know why they would want their own militias. Everyone can pay private security firms for protection, but obviously rich people would not need to use militias to steal from others if they already have money. Of course, voting for a party promising to redistribute wealth is similar to using a militia to steal from others. Left-wing government is a tool of the well-meaning but ignorant.

If you really resent the rich that much, don’t give them your business. It’s as simple as that. If Sam Walton is a bad person, don’t shop at Walmart. If Ray Kroc spends money to finance wars in South America, stop going to McDonald’s, and shame those who do.

Having no state, no concentrated political power, would mean a more egalitarian society, not less.

Save the poor?

“If there were no government, what would be done about poverty?” First, what is the government doing about poverty now? Governments have had anti-poverty policies for decades and poverty has not gone away. If anything, it has become entrenched. (Some data: most money going to welfare programs is wasted; most charitable giving is not.)

Second, welfare has existed before and beyond the welfare state. The welfare state as we know it emerged in the wake of World War Two. Governments wanted to maintain the massive spending they had begun, as reducing spending means reducing government power, and governments hate relinquishing an inch of territory they have grabbed. (A case in point: even after the wave of privatisation in the late 1990s, government spending continued to increase rather than decrease.)

Third, there are ways in which government can alleviate poverty, but simply channeling tax money to the poor is not one of them. Property rights and legal contracts help, though those things are part of the reciprocal nature of normal human trade and interaction, and a state that takes away your property through taxation and imprisonment is not a guarantor of it. (Does the state confiscate property and give it to the rich? Yes.) Businesses operating in a free market end poverty. Look at China, or any of the middle income Asian economies. Walmart alone has brought millions of people out of poverty. People complain about sweatshop labour, but how else do they think hundreds of millions of people could have sent their children to school? Conditions are terrible, but if they were better, they would be more expensive and the corporations would hire fewer workers, be less productive and have less profit to invest back into their operations.

Poverty is beaten with economic growth. That was true during Europe’s development, America’s development, the development of the Asian tigers, and it will hold anywhere. Economic growth means clean drinking water, better nutrition, reduced child mortality, more access to electricity (which replaces burning much dirtier coal, wood and dung), and the freedom to take care of yourself and do what you want with your life. But economic growth takes time. It is not something that the government can fix in a few months with stimulus packages, regulations, makework projects and redistribution of wealth. People need to be able to start their own businesses and operate them without knowing thousands of pages of regulations and tax codes. It takes many years of free enterprise for people to understand, adjust to and plan according to a set of rules, which cannot happen when the government keeps adding to and changing them.

Who are the poorest people in North America? Native North Americans. The indigenous people. Why is that? It is obviously not for lack of government assistance. In fact, it is because of government assistance, and other regulations (like Canada’s “Indian Act”), that they are poor. It is because handouts called “help” are not actually help. The US government spends an average of $7000 per native on healthcare, in contrast to $2000 for other Americans; and yet natives still do not get good healthcare. The problem is with the incentives. Natives who pull themselves up by their bootstraps do just as well as anyone else; those who remain under government stewardship are crippled by dependence. They do not own their resources, meaning they do not have property rights. As Hernando de Soto explains in The Mystery of Capital, property rights is a major factor in enabling people to increase their earning power, because if they own their land and house and other property, they can put it up as collateral for a loan, which means they have credit, which enables them to expand their farms or businesses and make more money off them. It is the same principle as that of microloans. Government bones do not help; property rights just might.

Poor people are simply better off where they have more economic freedom, not more government. In the US, poor people can start businesses (though they might be hampered by fees, forms and other red tape), they can use their property as collateral, they can provide goods and services on a relatively free market and end up surviving and sometimes prospering. We do not need laws for ownership. As Frederic Bastiat once said, “Life, liberty, and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty, and property existed beforehand that caused men to make laws in the first place.” Government, like religion, expropriated the laws of human nature and added to them unnecessarily, and has come to make everyone believe those laws could not exist without it. Let the poor climb out of poverty and many of them will.

If the people think something is a good idea, it will get done. And if they are not willing to pay for it, how could it be all right (or democratic) to force them to? That one is lost on me. But let’s say for the sake of argument that it is okay to force people to pay for schools, hospitals, roads and the fire department. I can understand that, although I still think people would pay for those things themselves, and save money by purchasing from a competitive market rather than a sclerotic public sector. I really do not see why they would not. We help those in need because we are sympathetic, we take time and money to improve our neighbourhoods because everybody gains, especially people who are recognised as putting their time and effort into doing so.

Why do you think that every culture and every religion has some tradition and institution for dealing with poverty? It is because the desire to help others is universal. Try it out some time: if you feel bad, do not try to get more for yourself; do something for others. Give something of yours away. Spread love to other people. As you shed your selfishness, you will feel better. It is a universal truth of human nature.