Ross Ulbricht is a Hero in the Fight for a More Peaceful and Prosperous World

As a result of what was an extreme and overzealous approach to convict someone of a non-violent crime, Ross Ulbricht, founder of the online marketplace and darkwebsite known as the Silk Road, was sentenced to life in prison on Friday by judge Katherine B. Forrest in Federal District Court in Manhattan. Prosecutors described Ross as a “kingpin of a worldwide digital drug-trafficking enterprise.”

Ross was not even charged with personally buying or selling illegal drugs to anyone, and prosecutors even willfully implied (but never charged) that he had planned out assassinations on people he supposedly believed posed a threat to him. Brian Doherty noted:

None of the charges were related to either personally selling an illegal substance to anyone—Ulbricht merely ran a website that facilitated it—and none were related to causing direct harm to anyone’s life or property.

Given the amazing water-muddying the prosecution achieved by talking about, but never trying Ulbricht for or proving in court beyond a reasonable doubt, allegedly planned, but never executed, murders for hire, one wonders whether the judge allowed any thoughts of those rumors, even subconsciously, to shape her sentencing decision.

Erik Voorhess illustrated the severity of the sentence:

A life sentence was given to a man who just about single-handedly created a much safer and more convenient environment for the exchanging of goods that people want and are willing to pay for.

[Side note: For some, this is now obvious. But there are others who still believe it’s justifiable to throw people in cages for voluntarily buying, selling or consuming a substance the government has deemed dangerous and hence illegal. The merits or dangers of drug use are not the issue here. I myself have never used drugs in my entire life, and strongly advise against the use of some particularly dangerous substances. The point is that no one has any right to forcibly prevent people from putting what they want into their own bodies, nor forcibly prevent them from exchanging for what they may need or simply want to consume. What Ross did was simply give people vastly superior choices with regards to how they would achieve their ends. Anyone who suffered serious health effects after ingesting dangerous substances did so as a result of his/her own personal decision making. Just as someone who gets alcohol poisoning after a night of binge-drinking is responsible for his/her own decisions, so is he/she who voluntarily consumes a substance that would have other dangerous consequences or health effects.]

Doherty:

As I’ve written before, Silk Road was undoubtedly a net positive for the health, safety, and liberty of most of its customers and sellers. Of course, its benefits went to people who choose to buy or sell things the government has decided we ought not buy or sell, and thus their health, safety, and liberty is something the government is an active enemy of.

Despite a manifest inability on the state’s part to actually wipe out the supposed scourge of drug use and sale, it will continue to spend shocking amounts of our tax money in a futile attempt to at least punish and ruin a few people involved. Today Ross Ulbricht is the butterfly they have broken on their cruel, grinding wheel.

Now, consider the fact that the U.S. government made deals with Mexican drug cartels that allowed traffickers to import billions of dollars of drugs into the U.S., while also running operations in which thousands of weapons were sold into the hands of those very same cartels amidst Mexico’s extremely violent drug war that has resulted in thousands of people killed. And banks that have laundered billions of dollars in drug money have not faced the same criminal prosecutions that Ross has. All of this begs the question: does the United States government have a vested interest and hence an ulterior motive when it comes to its selective enforcement of the drug laws it imposes on its subjects?

Ross provided an enormous service to society by facilitating a peaceful and efficient alternative in a world dominated by ever-expanding, power-hungry governments.

Doherty wrote in the December 2014 issue of Reason Magazine:

Once upon a time, you could buy illegal drugs anonymously online from a site called Silk Road. The postman would show up at your door with your gas bill, maybe a birthday card from mom, and some carefully packaged pot or heroin. Even though you had never met the person you bought the drugs from, the delivery came just as you ordered it.

That’s because the secretive “darknet” site that made this possible-before being shut down by the feds in late 2013-operated a lot like any other online commerce site. Silk Road’s pages, like those at Amazon or Yelp, were dense with seller ratings and reviews, guiding buyers to vendors with good records and high-quality products. Boisterous online forums were a click away, jammed with customer-generated information about drugs, dealers, safety, and whatever else the anonymous technorati wanted to chat about.

From January 2011 to the beginning of October 2013, the FBI estimates, Silk Road facilitated 1.2 million drug deals, moving thousands of kilos of illegal substances and collecting nearly $80 million in commissions. Clients were “typically professionals in the 30- to 40-year-old range” who “want to be treated with respect,” one Silk Road dealer named “Nod” told The Daily Dot in January. The site provided a safe haven not just from the state-sponsored violence of being arrested but from the street hassle of transacting with physical-world drug dealers.

Silk Road’s 950,000 registered users were largely satisfied with their consumer experience. A May 2014 paper in the journal Addiction found that 89 percent of customers surveyed said they chose the site for its wide range of choices, 77 percent valued the higher quality of drugs available, and 69 percent preferred the convenience. A 2012 study by Nicolas Christin for Carnegie Mellon found that 96 percent of Silk Road sellers boasted a consumer rating of 5 out of 5.

Jeffrey Tucker shared a comment he read in a forum about the Silk Road, an example of how Ross and his work helped save lives:

Forrest said Ross’s actions were “terribly destructive to our social fabric.” She, like every other drug warrior in favor of keeping these voluntary exchanges illegal, prefers the transacting of drugs to stay on the black market, where the most violent criminals and gangs in society get their way and SWAT teams routinely take part in raids on homes which sometimes have nothing to do with the buying, selling or using of drugs in the first place.

Ross provided a much safer means of doing business among people making voluntary interactions, but, as a fellow libertarian and anarcho-capitalist, he also advocated it as a solution to the institutionalization of the use of force, which the state’s very existence depends on. As he wrote on his LinkdIn profile:

I want to use economic theory as a means to abolish the use of coercion and aggression amongst mankind. Just as slavery has been abolished most everywhere, I believe violence, coercion and all forms of force by one person over another can come to an end. The most widespread and systemic use of force is amongst institutions and governments, so this is my current point of effort. The best way to change a government is to change the minds of the governed, however. To that end, I am creating an economic simulation to give people a first-hand experience of what it would be like to live in a world without the systemic use of force.

Ross pleaded with the judge, asking, “Please leave a small light at the end of the tunnel, an excuse to stay healthy, an excuse to dream of better days ahead, and a chance to redeem myself in the free world before I meet my maker.” But Forrest showed no mercy.

Not only is this a travesty in terms of justice, but it’s also a threat to all of us who dare even think about providing a peaceful solution to the problems created by the monolithic state ruling over almost every facet of our lives. The prosecutors themselves stated that they wanted the judge to “send a clear message to anyone tempted to follow his example that the operation of these illegal enterprises comes with severe consequences.” Andy Greenberg, writing for Wired Magazine noted that, in a way, radical Libertarianism itself was also on trial.

Ross, assuming he really was Dread Pirate Roberts, told Greenberg in an interview:

Sector by sector the state is being cut out of the equation and power is being returned to the individual. I don’t think anyone can comprehend the magnitude of the revolution we are in. I think it will be looked back on as an epoch in the evolution of mankind.

This tragedy is a momentous turn of events, whichever way we look at it. Ross Ulbricht is indeed a martyr, and for a while he moved the world further along the road towards a more peaceful and prosperous future. For that, we should be eternally grateful.

A Recap of the US Government’s Ludicrous 9/11 Conspiracy Theory

Image: Associated Press

A look back at James Corbett’s excellent summary of the US government’s official 9/11 conspiracy theory:

9/11: A Conspiracy Theory
by James Corbett

TRANSCRIPT: On the morning of September 11, 2001, 19 men armed with boxcutters directed by a man on dialysis in a cave fortress halfway around the world using a satellite phone and a laptop directed the most sophisticated penetration of the most heavily-defended airspace in the world, overpowering the passengers and the military combat-trained pilots on 4 commercial aircraft before flying those planes wildly off course for over an hour without being molested by a single fighter interceptor.

These 19 hijackers, devout religious fundamentalists who liked to drink alcohol, snort cocaine, and live with pink-haired strippers, managed to knock down 3 buildings with 2 planes in New York, while in Washington a pilot who couldn’t handle a single engine Cessna was able to fly a 757 in an 8,000 foot descending 270 degree corkscrew turn to come exactly level with the ground, hitting the Pentagon in the budget analyst office where DoD staffers were working on the mystery of the 2.3 trillion dollars that Defense Secretary Donald Rumsfeld had announced “missing” from the Pentagon’s coffers in a press conference the day before, on September 10, 2001.

Luckily, the news anchors knew who did it within minutes, the pundits knew within hours, the Administration knew within the day, and the evidence literally fell into the FBI’s lap. But for some reason a bunch of crazy conspiracy theorists demanded an investigation into the greatest attack on American soil in history.

The investigation was delayed, underfunded, set up to fail, a conflict of interest and a cover up from start to finish. It was based on testimony extracted through torture, the records of which were destroyed. It failed to mention the existence of WTC7, Able Danger, Ptech, Sibel EdmondsOBL and the CIA, and the drills of hijacked aircraft being flown into buildings that were being simulated at the precise same time that those events were actually happening. It was lied to by the Pentagon, the CIA, the Bush Administration and as for Bush and Cheney…well, no one knows what they told it because they testified in secret, off the record, not under oath and behind closed doors. It didn’t bother to look at who funded the attacks because that question is of “little practical significance“. Still, the 9/11 Commission did brilliantly, answering all of the questions the public had (except most of the victims’ family members’ questions) and pinned blame on all the people responsible (although no one so much as lost their job), determining the attacks were “a failure of imagination” because “I don’t think anyone could envision flying airplanes into buildings ” except the Pentagon and FEMA and NORAD and the NRO.

The DIA destroyed 2.5 TB of data on Able Danger, but that’s OK because it probably wasn’t important.

The SEC destroyed their records on the investigation into the insider trading before the attacks, but that’s OK because destroying the records of the largest investigation in SEC history is just part of routine record keeping.

NIST has classified the data that they used for their model of WTC7’s collapse, but that’s OK because knowing how they made their model of that collapse would “jeopardize public safety“.

The FBI has argued that all material related to their investigation of 9/11 should be kept secret from the public, but that’s OK because the FBI probably has nothing to hide.

This man never existed, nor is anything he had to say worthy of your attention, and if you say otherwise you are a paranoid conspiracy theorist and deserve to be shunned by all of humanity. Likewise him, him, him, and her. (and her and her and him).

Osama Bin Laden lived in a cave fortress in the hills of Afghanistan, but somehow got away. Then he was hiding out in Tora Bora but somehow got away. Then he lived in Abottabad for years, taunting the most comprehensive intelligence dragnet employing the most sophisticated technology in the history of the world for 10 years, releasing video after video with complete impunity (and getting younger and younger as he did so), before finally being found in a daring SEAL team raid which wasn’t recorded on video, in which he didn’t resist or use his wife as a human shield, and in which these crack special forces operatives panicked and killed this unarmed man, supposedly the best source of intelligence about those dastardly terrorists on the planet. Then they dumped his body in the ocean before telling anyone about it. Then a couple dozen of that team’s members died in a helicopter crash in Afghanistan.

This is the story of 9/11, brought to you by the media which told you the hard truths about JFKand incubator babies and mobile production facilities and the rescue of Jessica Lynch.

If you have any questions about this story…you are a batshit, paranoid, tinfoil, dog-abusing baby-hater and will be reviled by everyone. If you love your country and/or freedom, happiness, rainbows, rock and roll, puppy dogs, apple pie and your grandma, you will never ever express doubts about any part of this story to anyone. Ever.

This has been a public service announcement by: the Friends of the FBI, CIA, NSA, DIA, SEC,MSM, White House, NIST, and the 9/11 Commission. Because Ignorance is Strength.

Originally posted at The Corbett Report.

Pentagon Report Confirms US Hand in Creation of ISIS

Image: Associated Press

Judicial Watch recently obtained Pentagon documents from 2012 which state that the US actively supported Islamic extremist groups to remove Syrian president Bashar al-Assad from power, while signaling that such actions could result in the emergence of an “Islamic State” in an increasingly destabilized region.

Ron Paul and Daniel McAdams discuss:

Via Nafeez Ahmed:

A declassified secret US government document obtained by the conservative public interest law firm, Judicial Watch, shows that Western governments deliberately allied with al-Qaeda and other Islamist extremist groups to topple Syrian dictator Bashir al-Assad.

The document reveals that in coordination with the Gulf states and Turkey, the West intentionally sponsored violent Islamist groups to destabilize Assad, and that these “supporting powers” desired the emergence of a “Salafist Principality” in Syria to “isolate the Syrian regime.”

According to the newly declassified US document, the Pentagon foresaw the likely rise of the ‘Islamic State’ as a direct consequence of this strategy, and warned that it could destabilize Iraq. Despite anticipating that Western, Gulf state and Turkish support for the “Syrian opposition” — which included al-Qaeda in Iraq — could lead to the emergence of an ‘Islamic State’ in Iraq and Syria (ISIS), the document provides no indication of any decision to reverse the policy of support to the Syrian rebels. On the contrary, the emergence of an al-Qaeda affiliated “Salafist Principality” as a result is described as a strategic opportunity to isolate Assad.

Full story.

Tom Woods on the Economics of the Minimum Wage

With Los Angeles this week raising the minimum wage to $15 by 2020, and protesters at the McDonald’s headquarters demanding the same pay, the topic has been front and center over the past week. What many people seem to love to ignore are the potentially disastrous effects a minimum wage would impose on a population. Politicians and activists who advocate for one don’t put much thought into the fact that if a floor is mandated on the price of anything, including labor, demand for that will correspondingly decrease. Thomas E. Woods in August of 2013 wrote what is, in my opinion, one of the best analyses I have yet to read about this topic. It started in response to a meme displaying enough economic fallacy to deserve a more general treatment of the subject:

Who Needs Economics: Double Everyone’s Wages by Paying 17 Cents More!
by Tom Woods

That’s what this ridiculous graphic tells us:

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Even the Huffington Post refuted this one. The price increase would be much more substantial. (Though even here, HuffPo’s analysis is suspect. It doesn’t consider the effects of the price increases on the demand for the product: people would buy fewer burgers at the considerably higher prices, which means there would be less demand for fast-food workers’ labor.)

Incidentally, if you want to help poor people, why not just go ahead and do it? Why go the absurdly circuitous route of trying to make food more expensive (which in turn hurts other poor people)? Why not just seek out the working poor directly and help them? And why castigate the only institution in society that has lifted a finger to improve their material condition?

Answer: these people are all talk. They’d love to help everyone in the world, as long as someone else pays the price. These critics pay McDonald’s employees zero, but they are upset at McDonald’s, which gives them a paycheck. (Once again, I remind readers that the merits of fast food are not the issue here.)

A week or so ago I posted about how utterly wrongheaded the force-wages-up-by-wishful-thinking crowd is, and I explained how in fact wages rise. Click here for that post.

Let me add a few more thoughts to what I wrote at that link. Once wages are raised to $10 or $15 an hour, why would the critics stop? Isn’t it also tough to live on $10 or $15 an hour? Can’t we wish $50/hr wages into existence? And if we can do that, why not $100/hr?

The kind of thinking reflected in the graphic is that wage rates are really just arbitrary things, and that they can be increased without any real inconvenience to anyone. Plus, they say, it will help the economy (by stimulating consumption) if people get paid more, etc.

To give a sense of the problem with this latter claim, let’s be sports and set aside the disemployment effects of the wage increase. Let’s consider just the claim that spending more on consumer goods is what an economy needs. (So to be clear, we’re leaving out the point that higher wages don’t necessarily increase the overall spending of workers if fewer workers have jobs in the first place because the higher wages threw them out of work.)

So consider: if it’s “good for the economy” for unskilled labor to be given an arbitrary, coercively levied wage increase, would it also be good for the economy if employers quit shopping around for low prices for steel and just paid more for steel, so the steel manufacturers would have more money to spend on consumption? Would it be even better if they went out of their way to pay more for lumber than the going price? Then the lumber people would have more to spend. Would it be still better if employers paid extra for lumber, steel, labor — and everything else they needed? If it’s “good for the economy” for business firms to pay artificially high wages, why not demand that they pay artificially high prices for everything? Then the economy would be super!

You see the problem. The firm becomes less and less profitable, and less able to support employment, the more it needs to pay for inputs. And the more it pays for some inputs, the less it has on hand to pay for others. Extra money paid in wages over here means less spent on intermediate goods — and thus lower wages for other workers — over there. And the firm is less able to invest in capital equipment, which is what makes all of society wealthier.

A word, too, on the misplaced emphasis on consumption, as if that’s all an economy was about. If all we did was consume, and no one saved and productively expended any resources, the entire structure of production would grind to a halt. Just to maintain the structure of production involves saving enough to support the existing capital structure: all the stages and production processes from raw materials down to the finished product that constitute the intermediate stages of production that are left out of GDP. (For more on this, see my resource page on GDP.)

So if we were determined to “stimulate consumption,” we should be happy at the following outcome. Suppose we have a lucky person (lucky because the doubling of his wages at McDonald’s did not force him out of a job through layoffs or through the suddenly hastened automation of his job, or did not force him to do extra work, or did not take away his fringe benefits, etc). This lucky person takes some of his extra pay and buys five gallons of milk. The milk seller takes the money he earns from this sale and buys a new shirt. The shirt seller takes the money from selling the shirt and buys a few gallons of gas. And so on. All consumption. Nothing is saved or productively expended.

This means: no wages are paid (since making payroll is not consumption), no business-related bills are paid (again, not consumption), no intermediate goods are ordered by later-stage production (again, not consumption), etc. The result of all this spending: inventories of consumer goods would dwindle, and, the gross saving necessary to keep the production structure up and running not having occurred, the productive capacity of the economy would collapse. There’s your utopia of consumption.

Obviously, then, “the economy” is more than just money passing from hand to hand in exchange for consumer goods. To say that “consumption” needs artificial stimulus is a morally and economically arbitrary value judgment. Only the voluntary decisions of all market actors, based on their own preferences and coupled with a market price system, can give rise to a structure of production that balances our desires to consume with the enormously complex latticework of capital and stages of production that make our preferred level of consumption possible.

One more thing: we are faced with impossible obstacles anytime we think in terms of a “fair wage” that differs from the wage that emerges on the market.

Consider: economist George Stigler noted decades ago that in order to meet the nutritional standards of the U.S. government in 1943 least expensively, a man of 154 pounds could consume, in a year, 370 pounds of wheat flour, 57 cans of evaporated milk, 111 pounds of cabbage, 23 pounds of spinach, and 285 pounds of dried navy beans.

For a wage to be “fair,” would it have to allow only this for food? What kind of variety would be “fair”? Are movie rentals part of “fair” compensation? If so, how many per month? How many cigarettes are “fair”?

This is ridiculous. If you want wages to rise, abandon the juvenile insistence that protests and demands make economic sense. This is how wages rise.

Originally posted at TomWoods.com

Stockman: The Colossal Waste of Taxpayer Money That is Amtrak

In the wake of Amtrak’s horrifying disaster in Philadelphia, politicians are blaming the tragedy on lack of funding for the railroad service and infrastructure projects in general. Unfortunately, that sort of thinking ignores the real problem. David Stockman writes at his Contra Corner site:

Amtrak–A National Hazard At Any Speed
By David Stockman

This week’s tragic accident in Philadelphia should be a reminder. The real train wreck is Amtrak itself—–a colossal waste of taxpayer money and the very embodiment of what is wrong with state intervention in the free market economy. Worse still, the pork barrel politics which drive its handouts from Uncle Sam virtually guarantee that as time goes on Amtrak will become an increasing hazard to public safety, as well.

It seems like only yesterday, but one of my first assignments as a junior staffer on Capitol Hill was to analyze the enabling legislation that created Amtrak in the early 1970s. I was working for an old fashioned conservative Congressman and his first question was “how will it ever make a profit when we are running the trains from the Rayburn Building?”.

He couldn’t have been more clairvoyant. While it sponsors claimed Amtrak would be spewing black ink by 1974, the answer to my boss’ question was simple: never!

But you didn’t need to wait 43 years to prove it. There is not even a remote case that subsidizing intercity rail travel is a proper or necessary function of the state. Amtrak accounts for well less than 1% of intercity passenger miles. On every one of its 44 routes there are bus and air travel alternatives, and that is to say nothing of automobile travel —-  in cars with drivers today or in the driverless kind tomorrow.

Moreover, the evidence overwhelmingly shows that passenger trains will never be economically competitive outside of a handful of densely populated corridors. By contrast, what was absolutely guaranteed from day one back in 1970 is that a government controlled passenger rail system crisscrossing the United States would become a monumental Congressional pork barrel—–an endless rebuke to rational economics.

And that it has. The cumulative taxpayer subsidy since 1972 totals more than $75 billion in dollars of today’s purchasing power. During the span of nearly a half century, Amtrak has operated upwards of 40 routes that have never, ever made even an “operating profit”.

Yet the operating profit test is itself a red herring. Like its aviation competitor, Amtrak is massively capital intensive.  It maintains 21,000 miles of track, 100 rail stations, operates around 2,500 locomotives and passenger cars, and requires an extensive, costly infrastructure of communications and signaling systems, electric traction networks and a huge array of bridges, tunnels, switching yards, repair facilities, fencing and other right-of-way improvements and ancillary buildings. On a replacement basis, its entire capital asset base would easily amount to $50 billion (about $40 billion of track and infrastructure and $10 billion of rolling stock).

And that giant figure underscores the economic part of the Amtrak hazard. Even with a generous assumption that the useful lives of its equipment, rolling stock and infrastructure would average 25 years, Amtrak’s economic depreciation would amount to $2.0 billion per year. Since it generates roughly 8 billion passenger miles annually, this means that its capital consumption expense amounts to about 25 cents per passenger mile.

So here’s the thing. The average airline fare in the US is about 15 cents per passenger mile and the average bus fare is about 11 cents per mile. Now how in the world does it make sense to operate a lumbering passenger rail system in which the true economic cost of its capital assets alone is 65% to 130% higher than the profitable fares charged by the perfectly adequate and available alternative modes of transportation?

Stated differently, you are deep in the hole before you start  even one Acela train on its route between Washington and Boston or one long distance train, for example, on its 1,750 mile route between Chicago and Los Angeles. But in the operations department it goes without saying that Amtrak —– burdened as it is with its endless array of Congressional mandates and directives —– is not exactly a model of efficiency or financial discipline.

Thus, Amtrak’s fully loaded wage and benefits tab is about $2 billion per year and is spread over 20,000 employees. Needless to say, at $100,000 per employee Amtrak’s costs are not even in the same zip code as its far more efficient for-profit competitors in the airline and bus transit industries.

On top of its massively bloated and featherbedded payroll, Amtrak also generates another $1.3 billion of expense for fuel, power, utilities, supplies, repair parts and operational and management overheads. Accordingly, its total operating budget at $3.3 billion amounts to about 40 cents of expense per passenger mile. That is, its operating costs are 3-4X the ticket price of its air and bus competitors!

The economic arithmetic is thus insuperable. On a system-wide basis, Amtrak’s combined capital and operating expense would amount to about 65 cents per passenger mile if it were honestly reckoned. That is, in the absence of Federal and state subsidies and the implicit subsidies that private railroad companies transfer to Amtrak via deeply below-market fees for utilization of their tracks and facilities. Indeed, 95% of Amtrak’s route-miles and 70% of its passenger-miles are generated on lines leased from freight railroads, which—-owing to regulatory mandates—-Amtrak pays only a trivial 2 cents per passenger mile. This figure is not remotely reflective of the real economic costs.

By contrast, Amtrak’s ticket revenues amount to hardly 30 cents per passenger mile. So contrary to Amtrak’s claim that it has nearly reached break-even, its true economics reflect the very opposite. Namely, a giant political pork barrel in which system revenues cover less than 45% of its all-in economic costs to society.

Nor can this disability be remedied by reforming the system and paring back its routes to just the profitable corridors. Even the northeast corridor generates only 10 cents of “operating profits” per passenger mile. Throw-in the capital costs and even Amtrak’s so-called profitable lines are still deeply underwater.

To wit, a recent inspector general report estimated that the replacement cost of the northeast corridor infrastructure alone was about $15 billion, which would amount to $400 million per year on an amortized basis or 20 cents per passenger-mile. Add in another 5 cents per passenger-mile for locomotives and rail cars and you have 25 cents of capital costs.

So there is a reason why even the northeast corridor has never been privatized. It would lose at least 15 cents on each of the 2 billion passenger miles that Amtrak/northeast corridor generates annually in the absence of much higher fares.

And those are the baleful facts regarding the Acela and regional routes in the Washington-Boston corridor. The rest of the system embodies just plain economic waste. The aforementioned Chicago-Los Angeles route, for example, has operating costs of 35 cents per passenger mile; and total costs with capital consumption would be at least 50 cents per mile–even giving allowance for the lower capital intensity of long distance routes.

The problem is that you can get an airline coach fare today between the Chicago-Los Angeles pair for $200 or 11 cents per mile. And you don’t need to spend 22 hours on the train, either.

As it is, Amtrak’s current fare on this route is about 15 cents per passenger mile and apparently it cannot go much higher if it wishes to remain competitive with air. Yet why in the world should bus drivers in Minneapolis pay Federal taxes in order to provide what amounts to a $600 subsidy per ticket on the 180,000 tickets that are sold annually on the Chicago-Los Angeles route? And the latter is only typical of most of the other routes outside the northeast corridor.

Obviously, there is no means test to get a $600 subsidy from Amtrak, or any other plausible criterion of public need. Like so much else which emanates from Washington, these Amtrak subsidies are distributed willy-nilly——in this case to retirees with enough time and money to see the country at leisure or to people with fear of flying who don’t wish to drive.

So Amtrak is a white elephant as a matter of economics, but when it comes to public safety it is actually a wounded one. That’s because when push comes to shove and Congress is faced with limited budget headroom, it always elects to short change the capital budget rather than reduce the scope of Amtrak’s far-flung operations and eliminate any of the 44 routes which crisscross the nation’s congressional districts.

I actually learned that lesson during the so-called Reagan Revolution. My original plan was to eliminate Amtrak entirely, and it would have saved upwards of $60 billion in the decades to come. At the get-go, the Gipper was all for it. Not a proper function of government, he nodded.

Then his Secretary of Transportation and previously chief GOP fundraiser and governor of Pennsylvania explained that the Gipper was right—but not quite. The northeast corridor (NEC) routes were an exception. They provided a valuable economic function——so by paring the system back to these high density routes the Amtrak budget could be cut in half. Moreover, after some up-front capital spending, the NEC could be transformed into a profitable business and eventually sold to the private sector in an IPO. That’s just the thing, said President Reagan.

Then it got to Capitol Hill and the Republican politicians said we are all for cutting the Amtrak budget by 50%, but to get the votes we need to do it “our way”. Upon which the Gipper replied, yes, we are here first and foremost to shrink the runaway Federal budget——so do what you must to get those savings.

They did. They drastically pared back the capital budget and kept virtually all of the routes and operating subsidy costs in place. When Uncle Sam came up short, capital investment could be deferred, but the pork barrel had to be fed.

In the bye and bye, of course, Amtrak’s budget was restored  all the way back to Jimmy Carter’s “wasteful” levels and actually hit record amounts during the Republican government of 2001-2008. But even then there was never enough appropriations to keep this giant white elephant properly fed——so capital investment was perennially short-changed and the system’s fixed assets steadily deteriorated.

Whether this week’s disaster was human error or not, the larger certainty is that the system has been chronically starved of capital. But the solution is not for a bankrupt government in Washington to pour more money down the Amtrak rat hole in the name of “infrastructure investment”, as the big spenders are now braying in the wake of this week’s disaster in Philadelphia.

Instead, Amtrak should be put out of its misery once and for all. Otherwise its longstanding hazard to the taxpayers is likely to be compounded by even more public safety disasters like this week’s tragic event.

Originally posted at David Stockman’s Contra Corner.

The Root Causes of Police Brutality

News stories abound on the national press about cases of police officers killing unarmed citizens, with media focus on white officers killing black men, leading to marches and protests in cities across the country with the purpose of fighting a system whose injustices stem from “institutionalized racism.” But is racism the cause of these killings, if they are unjustified in the first place? Is it inequality? Or is there a more fundamental reason? Are inefficiencies a result of “soft on crime” policies? Or is that missing the point entirely? As we’ll see below, the problem is much more elementary and structural than what’s diagnosed in media discussions. The real cause has little, if anything to do with the problems mentioned above, and has everything to do with an unaccountable, state-granted monopoly on the provision of protection services that is above the law.

In a Mises Daily article titled “Law Enforcement Socialism,” Anthony Gregory writes about the fundamental problems that lead to police inefficiencies, lack of accountability, and cases of brutality. He notes that the reasons government law enforcement agencies fail to achieve their stated goals are the same reasons many people reject any notion of government control of the means of production in most industries today. Whenever a government monopolizes the provision of a good or service, we see the same characteristics typical of any monopoly: namely, inefficient use of resources, unaccountability, high prices, poor-quality service, and a virtually unlimited source of income such as tax revenue. This is the inevitable result of an agency providing a good or service without having to worry about competition and hence losing their customers, especially when their funds are coercively obtained, as is the case with government. The state has no incentive to give to its “customers” a superior service because no competitors are allowed, and the “customers” must pay for the service regardless, to avoid being thrown in jail or even killed, were they to defend themselves from such aggression. In effect, what we’re left with is an agency that is above the law without regard for any consequences if it breaks any of the same laws it enforces on its subjects. That’s a situation that surely leads to all types of other problems, including harassment, theft, even murder.

Gregory goes on to explain why the free market system is superior in providing services such as police protection, and why the same incentives that allow privately run industries to prosper are the same incentives that exist to foster an environment for higher-quality, lower-cost protection services:

Law Enforcement Socialism

by Anthony Gregory

Every year, more prisons are built, more money is funneled to police departments, more criminal law is written and yet domestic crime remains a major problem.

Explanations abound as to why this is. The Left blames the economic system for fostering inequality, which supposedly causes crime. The Right says the police have their hands tied by political correctness. Libertarians typically argue that the government wastes precious time and resources on victimless crime and has insufficient tools remaining to deal with the genuine predators.

There is a more fundamental explanation, however, which makes logic out of the entire mess but is almost never voiced: Socialism. Law enforcement agencies, courts, prisons, legislative bodies — all of the key institutions that are supposed to produce justice are owned and maintained by the state.

Outside of some small academic and activist circles, most Americans reject the radical ideology of socialism as it pertains to the economy as a whole. Hardly anyone believes that the state should maintain the means of production and that private enterprise should be abolished. Most people understand the folly of divorcing all industry from private property ownership and running an economic sector completely through central management.

It is interesting, then, that most people still believe in total socialism when in comes to providing services of security and justice.

There is a considerable literature exploring how the market might handle law, but rarely are people exposed to it. Murray Rothbard, Bruce Benson, David Friedman, Robert Murphy, Samuel Konkin and others have made insightful contributions to such theory. However, we do not need to know how exactly the market would deal with this to know that socialism has institutional limitations that prevent it from achieving its advertised goals; and there is no reason not to apply this understanding to the question of law enforcement.

Just as when the means of production of any good or service are monopolized by the state, the result is havoc, we see similar problems when the state owns the means of production of the service of protecting the innocent and going after the guilty.

Mises identified the inability to engage in economic calculation as the key practical limitation of socialism that rendered it unworkable. This incapacity to divert resources to their most urgent use is one of the most conspicuous results of a socialist criminal justice system. Thus do we see police expending hundreds of thousands of dollars arresting, prosecuting, and punishing an individual for a victimless crime, when it is hard to imagine a private institution finding such a witch hunt economically viable.

The state, unlike a participant in the free market, gains its market share and resources through violence. The more it spends, the more it expands and the more it is able to spend. It sees spending money not as a cost to be balanced against income it brings in. Rather, the state’s resources are not its own and its very success as an institution is determined largely by how much it spends. It is eager to spend money, to expand its operations and to reward its privileged class of individuals with jobs and other benefits.

Whatever it has spent, it has already effectively extracted from the productive sector, for it has already redirected resources in the economy. The state is not leery of debt, since it’s not responsible for its own solubility; instead, one way or another, it burdens the taxpayer with its spending habits.

The state has every incentive to expand its activity into nearly any area that the people will tolerate, regardless of whether such activity makes economic or moral sense. Since it monopolizes conflict resolution — and acting in this capacity is another opportunity to expand its size and reach — the state actually has an interest in fomenting conflict, thereby maximizing its role in society. The more crime and punishment, no matter their effect on the innocent, and the more laws, no matter how outrageous or contradictory, the more business for the state, which, in a supreme conflict of interest, gets to determine what the laws are.

The state consequently attacks a thousand kinds of behavior that a market law enforcer would likely never dream of going after, since doing so would be unprofitable on the free market. Market institutions, unlike the state, could and would weigh costs and benefits and profits and loss and make careful decisions about using scarce resources. When customers actually have to pay on an individual basis for their security, they are far less likely to want their rights protector to go around waging expensive, unwinnable wars on vice and impropriety.

Under a free market, property rights would be liberated from their greatest nemesis — the constant encroachment of the state — and so people would have the means to better protect their own values within the context of private property and free association. But they likely wouldn’t want to spend thousands of dollars a year to have their hired rights protector hunt down and lock peaceful people in jail for drugs or prostitution.

Moreover, without the state monopoly, it would be nearly impossible to get all judicial and law enforcement bodies to agree that such peaceful people should no longer be seen as potential customers, but rather as targets of their violence. Violence, after all, is expensive.

Under law-enforcement socialism, on the other hand, market disincentives against such waste and counterproductive endeavors are discarded. Public choice theorists should especially expect state involvement in law enforcement to foster incentives for logrolling — in this case, for ever more laws and law-enforcement spending that most people would probably not elect to pay for on an individual basis, but that certain powerful economic and ideological interests willingly lobby hard to secure at other people’s expense.

The socialization of the cost of law enforcement, just as with any other industry, has led to shortages and shoddy products. In this case, it is justice that is shoddy and in short supply. We get a war on drugs that has imprisoned millions and squandered billions and encouraged homicide and corruption. We get a policy of disarming the civilian population of private weapons, which deter crime far more effectively than government police do. We get a prison system in which innocent and guilty are locked together to be beaten, raped, tortured, shot, and ruled by sadistic prison guards and the worst of the  inmates.

We get a standing army of crime-prevention agents with militarized weaponry, sovereign immunity to shoot to kill, and the arbitrary power to stop practically anyone at any time and destroy his life. None of this actually reduces crime overall, and none of it makes the victims of crime whole. It only victimizes them further by forcing them to foot the bill and endure the police state’s tyranny along with everyone else.

This shouldn’t surprise those who understand the failings of socialism. Socialism in any sector will misallocate resources. When we’re talking not just about redistributing money, but the enterprise of administering legal coercion and violence, the miscalculations inherent in socialist central planning translate into grand violations of millions of people’s rights.

Just as those who advocate socialism for public schools, or for health care, or for the economy generally, tend to argue that under a free market, there will be at least two classes of people — the exploited who can’t afford to meet their human needs and the predatory exploiters who get fat off the system — defenders of law-enforcement socialism argue that there would be chaos and class conflict without state provision of law and order. Without a monopoly provider, some people won’t be able to afford services of rights protection and some will disregard the rights of others and will unleash their criminality on society, whether as individuals in a chaotic and violent anarchy, or as gangs. Under a free market in law enforcement, the justice agencies themselves, we are told, will also likely become criminal.

But this is what we have now, under state law enforcement — the results of the state itself enjoying a class distinction of the most fundamental type. There are those who have to follow the law — created, enforced, and judicially presided over by the state — and those who use and depend on aggression as a matter of their job description: agents of the state. The state, by its nature, can categorically do things to people that the people cannot legally do to each other. It can seize wealth, instigate detentions and invasive interrogations and searches of the innocent, and issue systematic coercion with itself as its only institutional oversight.

Those who wish to improve the state’s handling of law and order by petitioning it to repeal some of its laws and redirect its focus should be commended to the degree that they challenge grave injustices by the state, but most reformers ignore the crucial problem — socialism in the area of law and rights protection. A reform that leaves the state intact as a monopoly on criminal justice will be as limited as any reform of education that allows the state to continue its near-complete ownership of the schools.

In practice, law-enforcement socialism is even worse than socialism in most other areas, since it involves a state monopoly on legal violence, and thus is expected to act coercively. Whenever an innocent person is brutalized — which will happen about as often as we could expect any kind of mistake from government work — it is seen as a small price to pay to protect the innocent.

As terrible as it is to allow central planners to decide how and where to produce shoes, cars, or widgets and where to divert them, it is a bigger problem when central planners are given free rein to decide how force is to be used in all of society. Indeed, by capitulating to its monopoly on violence, we accept its very power to monopolize and socialize. Freedom is never secure so long as a ruling class of people is permitted to monopolize the very means of monopolization, from which further abuses of the market and liberty can only follow.

Yet far from seeing the inevitability of the failure of law-enforcement socialism to deliver the goods nearly as efficiently or humanely as the market would, most libertarians, conservatives, and left-liberals continue to assume that law-enforcement socialism is the most essential kind for human progress.

Now, those who desire socialism in any other area must logically support it in the realm of coercive conflict resolution, since the state’s power to monopolize any sector depends on its monopoly on legitimized violence. But what of “free-market” conservatives who  believe not in markets, but rather socialism, in the field of criminal justice? Perversely, “free-market” types are frequently among the greatest defenders of law-enforcement socialism, quick to suggest that it would function fine if only it had more resources, or if the right people were in charge, or if the bureaus had more power, or if only the left-liberals would stop obstructing it with quaint constitutional and statutory limits on its power. Paradoxically, it is often those who most loudly cheer on capitalism who  are most enthusiastic about the state’s maintenance of law and order. When it comes to battling evildoers — which conservatives claim to want more strongly than the liberal Left — there is nearly total faith in the theoretical and practical capacity of socialism to work.

The most notable contradiction is seen in libertarians who adopt law-enforcement socialism. The error made by many libertarians is in thinking that since rights should always be respected, the state should be in charge of ensuring this social goal. When the progressives claim to want decent healthcare for everyone, some libertarians will point out that if this were really the case, the leftists would embrace a free market in medicine. Yet many libertarians, who claim to want justice for everyone, do not embrace the market when it comes to providing justice.

In some ways, the pro-state libertarian is more inconsistent than the left-liberal who concedes his willingness to use the state to achieve his social designs. Favoring centralized aggression to achieve the libertarian goal of a world without aggression is more of a contradiction. It is inconsistent to tell someone, “You have no right to use the state to tax me to create social programs,” if you yourself would use the state to tax others to affirm an absolutist libertarian sense of justice.

Protecting rights is crucial, which is why a monopoly on aggression is the last institution to trust with such an important task. The state claims to protect us with its military and police, but this is at least as much a sham as the state’s protection of us from poisoned pharmaceuticals, tainted spinach, disease, illiteracy, or ignorance. Sure, sometimes a police officer does the right thing — and sometimes, even often, a public school teacher successfully instructs pupils on the multiplication tables or how to diagram a sentence.

But these individual accomplishments would be multiplied and much more encouraged if the market prevailed. Overall, the state is detrimental to both law and education. The Department of Justice brings as few victims justice as the Department of Education teaches students.

Furthermore, while official schooling and official law are both monopolized by the state, education and justice are actually served predominantly by civil society, by family, community, private property, voluntary initiative, commerce and the natural law tradition. Just as in the Soviet Union a disproportionate amount of the food was grown on small lots of privately owned land outside of the socialist farms, so in America most of law and order result from private property and its protection by private individuals and civil culture, outside of the socialist law enforcement establishment. It is no wonder then that the more expansive the state is in law enforcement, the more money it spends, and the more  people in jails, the less safe are our streets.

When a welfare state worker gets it wrong, it is a waste of resources and can create waves of disastrous social repercussions. When a law enforcer gets it wrong — or searches and seizes the innocent in pursuit of the guilty — justice itself has been defiled and liberty attacked.

The spontaneous order of voluntarily acting individuals has given us everything in society that we take for granted. Whenever such free order is suppressed, disorder follows. That’s why we should not be surprised that the criminal justice system is one of the saddest features of our society. In the relatively capitalistic United States, the justice system is pure socialism. Only by getting the government out of the way and letting individuals act voluntarily and cooperatively can we expect the administration of justice to be  as effective and moral as the other sectors where the market, and not the state, dominates.

“Law Enforcement Socialism” originally appeared at the Mises Institute.

UC Berkeley: ‘Microaggressions’ are a ‘Public Health’ Issue

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The UC Berkeley School of Public Health ramped up their PC efforts with a town hall meeting discussing an epidemic posing a serious risk to the health of its students and people worldwide: “microaggressions.”

Via National Review:

According to a piece in the Daily Californian by Micha Zheng, soon to be a holder of a master’s in public health, Berkeley “convened a town hall meeting where students, staff, faculty and alumni all gathered to discuss issues concerning racism, white privilege and how the lack of diversity was harming students.” “Many public health undergraduate and graduate students alike brought up their experience with microaggressions, which are a form of unintended discriminatory behavior that still have the same, and sometimes even worse, effect as conscious, intended discrimination,” he writes.

“Many public health undergraduate and graduate students alike brought up their experience with microaggressions, which are a form of unintended discriminatory behavior that still have the same, and sometimes even worse, effect as conscious, intended discrimination,” he writes.

“We needed to act — and act urgently — with respect to the professors who were committing these harmful acts of microaggression toward students,” [Zheng] says.

Add this one to the “Not the Onion” pile. So, we now have people basically calling for a world in which we have to be extremely sensitive about what we say to others, lest we cause serious damage to someone’s emotions. Verbal abuse is one thing. To suggest that we shouldn’t say or do things that imply anything about someone’s gender, race or ethnicity is another thing entirely that creates an environment where people don’t even genuinely communicate with each other for fear of being “offensive.”

But who knows? Maybe pulling out a chair or opening a car door for a woman and asking people about their ethnicities really is a menace to public health. We wouldn’t want to accidentally kill someone, would we?

To make sure you’re not exposing anyone in your proximity to these vicious, high-risk behaviors, watch this PSA by Andrew Klavan, so you can help prevent microaggressions from becoming a full-blown pandemic: