Does America need the Constitution?

The First Page of the Constitution of the United States

The First Page of the Constitution of the United States
Source: Wikimedia Commons

No, according to Louis Michael Seidman. He wants to keep the government but toss the Constitution, arguing that it was written by a very specific set of people from a very different time period. So, rather than debate the merits of an issue, we debate what people who died a long time ago would’ve thought about it. He also makes the very good point that we shouldn’t depend on the Constitution to secure our natural rights like freedom of speech.

The issue with the U.S. Constitution (and really any written document) is that it can be tortured to mean just about anything. And since government has a natural tendency to grab power, politicians can easily interpret the Constitution in order to do so (case examples: the Commerce and the Necessary and Proper Clauses).

As a restraint on government, the Constitution has proven remarkably ineffective. Then again, it’s not clear to me that a U.S. government without the Constitution would be much better. Here’s more from an interview with Seidman, conducted by Amy Crawford at Smithsonian Magazine:

What would we gain by giving up constitutional obligations?

It would improve deliberation and rhetoric about issues that divide us—gun control, for example. Now, to the horror of most of my friends, I am actually quite skeptical about gun control. But that’s a subject on which reasonable people can disagree. But what happens when you start thinking about constitutional obligations? All of the sudden the argument is not, “How are you going to enforce this? Would it actually prevent violence? Would it cause more violence?” The argument is about, “What exactly did the word ‘militia’ mean 200 years ago? What is the relationship between the ‘bear arms’ clause in the English Bill of Rights and the American Bill of Rights?”

Those are questions that historians ought to have some interest in, but they’re completely irrelevant to the issue of gun control in 21st century America. Without enlightening us, arguments of constitutionalism unnecessarily divide us. Now, all of the sudden, instead of talking about a policy decision that reasonable people could disagree about, we’re talking about whether one’s opponent is really an American, whether they are violating the document that defines us and creates us as a nation.

(See the rest at Smithsonian Magazine:

Unschooling: The Truth about College?

Is Unschooling Superior to Horace Mann's system of Public Schooling?

Is Unschooling Superior to Horace Mann’s system of Public Schooling?
Description: Horace Mann: Father of the Public School System
Attribution: Southworth & Hawes (1850)
Source: Wikimedia Commons

Confession: In my youth, I considered school a massive waste of time. As an adult, I feel exactly the same way. School didn’t prepare me for the real world. If anything, it dulled my creativity, tempered my love for learning, and caused me to hide the most interesting parts of myself in order to avoid being an outcast. Hence, I find the idea of unschooling, or encouraging kids to learn through natural interaction with the world, quite interesting.

Americans love their schools however. Out of 56 million kids, just 1.5 million are educated outside of a traditional school. And the vast majority of those kids are homeschooled using the same curriculum and textbooks. It’s believed just 100,000 kids are unschooled.

It’s good to see people starting to challenge the education system, even if it’s just at the college level. For many people (perhaps all people), college is an enormous waste of time and money. Now, we just need a little more attention paid to unschooling. Here’s more from John Tamny at Forbes:

Whether the ambition is to become an investment banker or a Starbucks barista, the dirty little secret is that nothing learned during the four (or five) fun-filled years on idyllic campuses has anything to do with either form of employment. That four years of English Lit or finance courses wouldn’t be required to work behind the counter at Grumpy’s is obvious, but it’s also the case that what’s learned in those finance classes is not necessary if your desire is to thrive at Goldman Sachs either.

To believe otherwise is to believe that someone (the college professor) who for the most part lacks any background in the real-world application of finance could transfer skills to those who desire that real-world knowledge. Lots of luck there. If Wall Street is your goal, major in whatever interests you. Ultimately the top financial firms are looking for “good athletes”; as in people who are smart and who work hard. Anything you need to know you’ll learn on the job.

(See the rest at Forbes)

Police State: Why are Feds Stockpiling Ammo?

Is the U.S. a Police State?

Is the U.S. a Police State?
Description: Dame Wales confronts riot police
Attribution: Joseph Morewood Staniforth (1898)
Source: Wikimedia Commons

While the U.S. government works to disarm its citizens, bureaucrats are stockpiling ammo. Lots and lots of ammo. But no worries. You can trust the police state. Here’s more from Andrew Malcolm at Investors.com:

In a puzzling, unexplained development, the Obama administration has been buying and storing vast amounts of ammunition in recent months, with the Department of Homeland Security just placing another order for an additional 21.6 million rounds…

…DHS has been silent about its need for numerous orders of bullets in the multiple millions. Indeed, Examiner writer Ryan Keller points out Janet Napolitano’s agency illegally redacted information from some ammunition solicitation forms following media inquiries.

According to one estimate, just since last spring DHS has stockpiled more than 1.6 billion bullets, mainly .40 caliber and 9mm. That’s sufficient firepower to shoot every American about five times. Including illegal immigrants. To provide some perspective, experts estimate that at the peak of the Iraq war American troops were firing around 5.5 million rounds per month. At that rate, DHS is armed now for a 24-year Iraq war.

(See the rest at Investors.com)

The Lost Declaration of Independence?

On July 4, 1776, the Continental Congress officially adopted the Declaration of Independence. It declared the 13 original colonies were no longer part of the British Empire. The original Declaration is probably the most important document in U.S. history. And amazingly enough, no one knows where it is.

The Composition Draft: This is the first only surviving fragment of the earliest composition draft of the Declaration of Independence.
Written by Thomas Jefferson (mid-June 1776)
Source: Library of Congress, Manuscript Division

The Declaration of Independence: The Official Story

On April 19, 1775, British troops stormed Lexington and Concord, Massachusetts. Colonial minutemen, warned by Paul Revere, Williams Dawes, and Samuel Prescott, lay in wait for them. The Battles of Lexington and Concord broke out and thus, the Revolutionary War began.

A little over a year later, in June 1776, Thomas Jefferson wrote the first draft of the Declaration of Independence. The document went through numerous changes. On July 2, 1776, the Continental Congress voted to declare independence from the British Empire. Two days later, the Congress officially adopted the Declaration of Independence.

Today, the Declaration of Independence is one of the most famous documents in history. It resides at the National Archives. Its encased in titanium and aluminum and surrounded by inert argon gas.

Or is it?

The Declaration of Independence: The Real Story

The copy of the Declaration that sits at the National Archives is known as the Engrossed Copy. It’s basically a final version, crafted several weeks after the debate concluded. It was then postdated to July 4, 1776. Most scholars think it was penned by Timothy Matlack, who served as clerk to the Secretary of the Continental Congress.

But if that’s the case, then what did the Congress ratify on July 4? Well, in 1823, Thomas Jefferson penned a letter to James Madison in which he described writing the original Declaration of Independence. He said that the Committee of Five “unanimously pressed on myself alone to undertake the draught. I consented; I drew it; but before I reported it to the committee I communicated it separately to Dr. Franklin and Mr. Adams requesting their corrections. I then wrote a fair copy, reported it to the committee, and from them, unaltered to the Congress.”

So, it appears this “Fair Copy” was the version used by the Continental Congress. It was probably edited during the debate by Charles Thomson, who served as Secretary to the Congress. And it was most likely the document which was considered during the vote. In other words, the marked-up Fair Copy is, for all intents and purposes, the original Declaration of Independence.

Where’s the original Declaration of Independence?

The Fair Copy has been missing for over two hundred years. But what happened to it? Some researchers think it was accidentally destroyed by John Dunlap. Earlier in 1776, Dunlap had secured a printing contract with the Continental Congress. On the evening of July 4, John Hancock asked him to produce the first official “broadsides,” or printed copies, of the Declaration. These Dunlap broadsides were then distributed throughout the 13 colonies. So, it seems possible the Fair Copy was destroyed in the process.

Another theory is the Fair Copy was intentionally destroyed. Many delegates were in favor of keeping their deliberations a secret. This was a contentious issue at the time and was opposed by both Jefferson and Ben Franklin. Nevertheless, the Congress eventually decided to invoke a secrecy rule. So, perhaps the Fair Copy was destroyed so no one could see the changes made to it.

However, this is slightly problematic. Several draft versions of the Declaration exist, at least two of which were kept by Thomas Jefferson. Why would delegates keep those versions and yet order the destruction of the Fair Copy?

There is another possibility. Perhaps the Fair Copy survived July 4. Perhaps it’s still out there somewhere, waiting to be found. It could be lost in the National Archives. Or maybe it was kept by Thomas Jefferson or Charles Thomson. We should note that Jefferson’s “Rough Draft” wasn’t located until 1947.

One more thing. Remember those broadsides printed by John Dunlap? Well, one of them fetched $8.14 million at auction in 2000. If a printed copy of the Declaration generated that much money, just imagine what the Fair Copy would be worth. For all you fellow treasure hunters out there, happy hunting!

“The Declaration originated as a spoken thought, expressed on June 7, 1776, by Richard Henry Lee of Virginia, a delegate to the Second Continental Congress, who moved that ‘these united colonies are, and of right ought to be, free and independent states.’ A written version was produced on June 28, primarily the work of Thomas Jefferson, who left at least seven rough drafts, one found as recently as 1947. On July 2, Congress approved the first paragraph of the Declaration, officially separating from England.

Then, on July 4, the rest of the text was approved. Jefferson claimed that a ‘fair copy’ of the document was in the room that day, and John Hancock possibly signed something, making it legal. If this manuscript still exists, it is the holy grail of American freedom.” ~ Ted Widmer, Looking for Liberty, New York Times, July 4, 2008

Student Loans: Crisis…or Conspiracy?

Over the past few months, reports of a “student loan crisis” have erupted throughout the United States. But is this really a crisis? Or a student loan conspiracy of epic proportions?

Warren Burger: Did he start the Student Loan Conspiracy?

Chief Justice Warren Burger: Did he help start the Student Loan Conspiracy?
Source: Wikimedia Commons

The Student Loan Conspiracy?

We first visited the student loan issue back in October 2011. To put it simply, the high cost of college and a difficult job market has “created a generation of heavily indebted students with few means to pay back their loans.”

Now, we have some new information to kick around. According to the Federal Reserve Bank of New York, the average student holds $23,300 in student loan debt. Breaking it down, about 43% of all students have loan balances less than $10,000. The rest owe more than $10,000. Amazingly enough, 27% of eligible payers “have past due balances.”

There are two pieces to this conspiracy. First, why is college so expensive? And second, why do so many people spend so much money pursuing college degrees? We talked a lot about the first question in October. So, we wanted to focus more on the second one this time around.

Why is College so Popular?

America’s intense pursuit of college degrees in a curious phenomenon. Not only are degrees ultra-expensive, but students appear to get poor value for their money. According to Richard Arum’s and Josipa Roksa’s book Academically Adrift: Limited Learning on College Campuses, 36% of U.S. college students show “no significant gains in learning” after four years of college. Even worse, there seems to be a mismatch between the skills acquired in college and the skills required for navigating the real world.

So again, we must ask, how did we get into this situation? Why are high school graduates spending money they don’t have in order to obtain college degrees that do shockingly little to prepare them for the real world?

The answer, in our view, is Griggs v. Duke Power. During the 1950s, Duke Power restricted black people from working in all departments except for the low-paying Labor department. In 1955, they started requiring high school diplomas for certain positions.

After the passage of the Civil Rights Act of 1964, Duke Power ended its race-based hiring policies. Instead, it instituted IQ tests. At the time, black people were less likely to hold high school diplomas. They also performed worse on the IQ tests. Thus, they were selected for Duke Power positions at a far lower rate than white candidates.

I won’t go into the particulars here. But eventually, a man named Willie Griggs filed a class action lawsuit against Duke Power Company. The case made its way through the legal system. In 1971, the Supreme Court ruled against Duke Power. In doing so, it prohibited the use of general IQ tests when screening applicants, regardless of whether there was an actual intent to discriminate. In order to pass muster, IQ tests were required to be a “reasonable measure of job performance.”

“…in 1971 the U.S. Supreme Court issued a ruling (Griggs v. Duke Power) saying that if companies use aptitude testing to screen potential employees, they must be prepared to show that their tests are precisely calibrated to the needs of the job. Otherwise, they will be guilty of employment discrimination if their tests screen out minority workers who might have been able to do the work. Rather than face discrimination suits by the federal government, most employers started using a less precise but legally safe method of screening applicants—college degrees.” ~ George C. Leef, Why on Earth Do We Have a Student Loan Crisis?

Griggs vs. Duke Power had far-reaching impact. It largely ended the practice of aptitude tests. But companies still needed a way to screen job applicants. So, they turned to college degrees, “even for jobs that could easily be learned by anyone with a decent high school education.” As a result, college enrollments (and student loans) exploded.

“In 1940, just 10% of high school graduates went to college. By 1970, that number was at 40%. And by the 1990s, it had risen to 70%. That’s because a college degree has become little more than a ‘signaling game.’ By attending college, students “signal” to potential employers that they’re smart, hard-working, and easily trained. The ability to send that signal to employers, which was once accomplished via aptitude tests, is the sole reason that most students attend college in the first place.” ~ David Meyer, The Student Loan Conspiracy?

Guerrilla Explorer’s Analysis

General aptitude tests aren’t perfect. In fact, they’re heavily flawed. In Griggs vs. Duke Power, it was discovered that those who’d passed aptitude tests and held high school degrees performed their jobs at the same level as those who’d failed the tests and didn’t hold degrees.

So, why don’t employers just create new aptitude tests that are “reasonably related” to individual jobs? The biggest reason is the threat of lawsuits. Even a well-crafted aptitude test could backfire in this respect. It’s far easier to just use college degrees as a screening mechanism and avoid the lawsuit risk altogether.

And that’s unfortunate. Aptitude tests hold significant advantages over college degrees. They’re cheap, quick, and can be tailored to fit individual jobs. College degrees are ultra-expensive, ultra time-consuming, and ultra-unfocused. So unfocused in fact, that the 1971 ruling should have invalidated college education screening as well.

“Recall that the problem in Griggs was that the specified requirements for job applicants were not clearly and directly related to the actual demands of the work. If challenged, could employers who have set the college degree as a requirement show that it has anything at all to do with the ‘business necessity’ of the employer or are ‘job-related’? That is very doubtful. Employers have grown to rely upon a new credential that is imperfect and probably rules out many qualified candidates. If the EEOC and the courts were to scrutinize the college degree requirement, they might well conclude that it has a ‘disparate impact.'” ~ Bryan O’Keefe and Richard Vedder, Griggs v. Duke Power: Implications for College Credentialing

The Student Loan Conspiracy isn’t a deliberate one. But the unintended consequences of Griggs vs. Duke Power have been highly destructive all the same. Many people waste years of their lives and accumulate thousands of dollars in student loan debt just to be eligible for basic jobs.

Companies will always need a way to screen potential employees. We here at Guerrilla Explorer don’t favor aptitude tests or anything else for that matter. We just think companies should be allowed to screen in whatever fashion they choose rather than fearing discrimination lawsuits. Without that lawsuit risk, however, we think many employers would switch to specifically-designed aptitude tests. Perhaps then, the Student Loan Crisis would finally come to an end.

The Threat of Happiness Research?

Two days ago, the Organisation for Economic Co-Operation and Development (OECD) relaunched its “Better Life Index.” According to it, women are generally happier than men and Australia is the happiest country (assuming all categories are equally-weighted). But does happiness research pose a threat to society?

Is happiness research dangerous?

Is happiness research dangerous?
Attribution: SPUI
Source: Wikimedia Commons

What is Happiness Research?

Happiness research has exploded over the last few decades. The idea is to quantitatively measure happiness as well as what makes people happy. This allows for all sorts of comparisons between groups as well as nations.

Happiness research tends to treat individuals with a broad brush. But happiness is entirely subjective. Different people have different preferences. Some people value money derived from work more than leisure time and vice versa. The Better Life Index attempts to deal with this fact. It allows users to personalize their indexes based on how much they value eleven separate categories: community, education, environment, civic engagement, health, housing, income, jobs, life satisfaction, safety, and work-life balance. So, this would appear to be a marked improvement.

Cardinal Utility – The Fatal Flaw of Happiness Research?

Unfortunately, the Better Life Index doesn’t deal with the underlying problem. Happiness research depends on something known as cardinal utility. Cardinal utility holds that personal preferences can be accurately measured by a third-party. However, cardinal utility is an outdated view. No one believes it…no one except happiness researchers that is.

Take the Better Life Index. It asks people to self-report how much they value various categories. However, a stated preference don’t necessarily equal a demonstrated preference. What’s the difference? A stated preference is saying you’d take a pay cut to have more leisure time. A demonstrated preference is actually following through on it.

“The concept of demonstrated preference is simply this: that actual choice reveals, or demonstrates, a man’s preferences; that is, that his preferences are deducible from what he has chosen in action. Thus, if a man chooses to spend an hour at a concert rather than a movie, we deduce that the former was preferred, or ranked higher on his value scale.” ~ Murray Rothbard, Toward a Reconstruction of Utility and Welfare Economics

Actions speak louder – much louder – than words. There are several ways stated preferences can mess up happiness research. First, people alter their preferences all the time. So, even if a person creates an “accurate” Better Life Index, he might change his mind when it comes time to make an actual choice. Second, a person might think they prefer doing one thing. But when presented with a choice, that same person might do something else entirely.

“In vacuo, a few consumers are questioned at length on which abstract bundle of commodities they would prefer to another abstract bundle, and so on. Not only does this suffer from the constancy error, no assurance can be attached to the mere questioning of people when they are not confronted with the choices in actual practice. Not only will a person’s valuation differ when talking about them from when he is actually choosing, but there is also no guarantee that he is telling the truth.” ~ Murray Rothbard, Toward a Reconstruction of Utility and Welfare Economics

Guerrilla Explorer’s Analysis

So, maybe happiness research isn’t all that accurate. So what? It’s just for fun right? Well, maybe not. It might seem innocuous, but there’s a dark side to it. Politicians and bureaucrats from around the world are taking a page out of Jeremy Bentham’s book and claiming public policy can be used to engineer societal happiness.

“The most commonly cited statistic in happiness economics is the rule that somewhere between $40,000 and $110,000, a higher salary doesn’t buy much more joy or satisfaction. Many people draw the bright white line at $70,000. This provides a strong utilitarian impulse to raise taxes on the rich, who apparently can’t buy much happiness with their extra millions, and to funnel the money to the poor to bring them closer to $70,000. … But one reason why incomes differ is that some people care more about making money than others.” ~ Derek Thompson, The New Economics of Happiness

We barely understand happiness. And we certainly can’t measure it with any type of accuracy. So, the idea that politicians and bureaucrats can engineer it is an illusion. But that won’t stop them from trying. In the end, the research that is supposed to be improving lives might just end up ruining them.

“Apologists for Marxism have made myriad excuses for their ideology’s failure to provide the same standard of living and liberty as was enjoyed in capitalist nations. Until recently, few have been so brazen as to claim that lowering living standards and curtailing freedom were the intended consequences, let alone that people would be happier with less of either. … Limiting choice, reducing wealth and lowering aspirations are now openly advocated as desirable ends in themselves.” ~ Christopher Snowdon, The Spirit Level Delusion: Fact-Checking the Left’s New Theory of Everything

For Further Reading: The Trojan Horse of Happiness Research by Thomas J. DiLorenzo

The U.S. Postal War?

In 1844, Lysander Spooner launched the American Letter Mail Company, a private alternative to the government-owned U.S. Postal Service. His young firm took the country by storm, leading to dramatic improvements in delivery time and vast decreases in postage costs. But the U.S. Postal Service didn’t appreciate the competition and fought to regain its monopoly. What was the U.S. Postal War?

American Letter Mail Company stamp (1844): Used during the U.S. Postal War

American Letter Mail Company stamp (1844): Used during the U.S. Postal War
Source: Wikimedia Commons

The U.S. Post Office Monopoly?

Until 1844, the U.S. Post Office held a monopoly on mail delivery. Service was slow and rates were high.

“It cost 18 3/4 cents to send a letter from Boston to New York and 25 cents to send one all the way to Washington DC. A letter sent from Boston to Albany, NY written on a 1/4-ounce sheet of paper and carried by the Western Railroad, cost 2/3 as much as the freight charge for carrying a barrel of flour the same distance.” ~ Lucille J. Goodyear, Spooner vs. U.S. Postal System

Lysander Spooner Launches the U.S. Postal War

Lysander Spooner knew an opportunity when he saw one. Spooner was an individualist anarchist hailing from Massachusetts. Although partly motivated by profit, his true purpose was to “challenge the constitutionality of the postal monopoly.”

While the Articles of Confederation had empowered Congress with “the sole and exclusive right and power” of “establishing or regulating post offices,” the Constitution was far more vague on the matter. Article I, Section 8, Clause 7 of the U.S. Constitution empowered Congress “To establish Post Offices and postal roads.” But the document was silent on the matter of private competition. With this loophole in mind, Spooner organized his own company, which he called The American Letter Mail Company. And he wasted no time in advertising his new venture, which attacked the idea of a governmental postal monopoly head-on. In effect, he launched the U.S. Postal War.

“The American Letter Mail Company has established post offices in New York, Philadelphia, Baltimore and Boston, and will deliver letter daily from each city to the others – twice a day between New York and Philadelphia. Postage 6 1/4 cents per each half-ounce, payable in advance always. Stamps 20 for a dollar. Their purpose is to carry letters by the most rapid conveyances, and at the cheapest rates and to extend their operations (as fast as patronage will justify) over the principal routes of the country, so as to give the public the most extensive facilities for correspondence that can be afforded at a uniform rate.

The Company design also (if sustained by the public) is to thoroughly agitate the questions, and test the Constitutional right of the competition in the business of carrying letters – the ground on which they assert this right are published and for sale at the post offices in pamphlet form.” ~ New York Daily Tribune Advertisement

Spooner’s company and the U.S. Postal War caused considerable angst among politicians. The U.S. Post Office earned gigantic profits, but often reported losses. That was because the profits were distributed by politicians via patronage to politically connected groups, namely: “(1) coach contractors, (2) rail and steamboat companies, (3) postmasters, (4) publishers of printed matter, (5) officials with the franking privilege, and (6) rural voters.

The U.S. government fought back in the U.S. Postal War, initiating lawsuits against Spooner. They threatened to jail him and pressured railroad operators to stop delivering his mail. But this proved unsuccessful and by 1845, the Post Office found itself rapidly losing business. The Postmaster General appealed to Congress and received permission to lower postage rates. Undeterred, Spooner lowered his own rates even further, causing even greater distress for politicians.

Alas, Spooner’s efforts and those of others like him (most notably James W. Hale), were in vain. In 1851, Congress lowered the postal rate to three cents per half-ounce letter and enacted laws giving the U.S. Post Office an effective monopoly over mail distribution. The U.S. Postal War was over. Spooner’s company was forced out of business and by 1860, private mail delivery was virtually eliminated in the United States.

Guerrilla Explorer’s Analysis

On December 5, 2011, the U.S. Postal Service announced “major budget and service cuts.” First-Class mail will take a day or two longer to deliver and stamps will rise one cent to $0.45. Despite those changes, the U.S. Post Office is expected to rack up a loss of $14.1 billion next year.

While the rise of email is certainly a factor here, a bigger problem is the postal monopoly itself. Government-enforced monopolies have little reason to cut costs, lower prices, or improve service. Perhaps it’s time we take a page from history and allow true private competition in the mail industry. Between 1845 and 1851, the U.S. Postal War launched by fromSpooner, Hale, and others forced the U.S. Postal Service to cut postage rates by 79%. At the same time, the U.S. Postal War led to service innovations, such as stamp prepayment and small-town intracity delivery. Is there another Lysander Spooner out there, waiting to reignite the U.S. Postal War? We can only hope.

The Debate that Rocked the World?

It was the most important debate of its time, maybe of all time. It single-handedly changed the world and led to a “war” of monumental importance. So, what was this debate of ideas? The Lincoln-Douglas Debate? The Scopes Monkey Trial? No…it was the Socialist Economic Calculation Debate led by the esteemed Ludwig von Mises.

Ludwig von Mises

Ludwig von Mises
Attribution: Ludwig von Mises Institute
Source: Wikimedia Commons

Ludwig von Mises & Economic Calculation?

By 1920, even ardent admirers of socialism (defined as a society in which the government owns the means of production) knew they had “an incentive problem.” A society where man was supposed to produce “according to his ability” yet only consume “according to his needs,” left that man little reason to work hard or perform unpleasant tasks. Socialists attempted to sidestep that problem by declaring that a socialist society would somehow cause people to become less selfish and more willing to work for the “greater good.”

Then in 1920, Austrian economist Ludwig von Mises published Economic Calculation in the Socialist Commonwealth. In the process he dropped a bomb on the heretofore unchallenged socialists and thus, launched the Socialist Economic Calculation Debate. As Murray Rothbard put it in The End of Socialism and the Calculation Debate Revisited:

“Mises in effect said: All right, suppose that the socialists have been able to create a mighty army of citizens all eager to do the bidding of their masters, the socialist planners. What exactly would those planners tell this army to do?” ~ Murray Rothbard

Ludwig von Mises didn’t bother with socialism’s problematic incentive issues. Instead, he argued that “rational economic calculation” couldn’t exist in a socialist economy. Since the government owned all productive resources, there were no market-generated prices. And without prices, it was impossible to know the best use for a piece of land or machinery. That made it impossible for central planners to make rational economic decisions.

The Socialists Strike Back

The socialists knew they had a problem. In fact, the problem was so serious that it vexed them for almost two decades. However, 16 years later, the so-called definitive response was published by the neoclassical economist Oskar Lange. Although he, along with Abba Lerner, acknowledged that prices were essential, Lange argued that they didn’t have to come from free markets. A Central Planning Board could tell “managers” of socialist companies to fix prices. These prices could then be adjusted by the managers via complicated equations and trial and error. Lange’s reply was widely applauded by his fellow Neoclassical economists and considered a damning refutation of Ludwig von Mises.

Around this time, Friedrich Hayek, a pupil of Ludwig von Mises, joined the debate. Hayek essentially conceded that Lange was correct in theory. However, he argued that the scheme was impossibly complicated and based on a “perfect world” that looked nothing like the real one. There was just too much information and too many equations that would need to be solved on a continuous basis. But Hayek’s arguments were largely dismissed by mainstream neoclassical economists as mere practical problems. And with that, the Austrian economists were considered defeated…at least for the moment.

“…there can hardly be any room for debate: of course, socialism can work. On this, Lange certainly is convincing. If this is the sole issue, however, one wonders whether at this stage such an elaborate theoretic demonstration is in order. After all, the Soviet planned economy has been operating for thirty years. Whatever else may be said of it, it has not broken down.” ~ Professor Abram Bergson, Socialist Economics

The Soviet Union Problem?

In 1991, the Soviet Union collapsed. And afterward, the grim reality of the situation in that country became apparent to the world. The Soviet Union had falsified its GNP and production numbers for decades. Its citizens lived in abject poverty. Black markets and bribery were rampant and indeed, these markets were often the only reason that basic needs were met.

So, who won the debate between the socialists and the Austrians? Well, Hayek’s criticisms of Lange’s theories were valid. But if these problems could be overcome, perhaps through computers, then it stands to reason that “market socialism” could work. However, if that’s the case, then why did the Soviet Union collapse?

Guerrilla Explorer’s Analysis

I would argue that neither Lange nor Hayek really won the debate. Instead, I’d give the honor to the economist who started it…Ludwig von Mises. Lange and his supporters were focused on proving that they could duplicate prices for consumer goods. Hayek agreed this was possible, at least on a theoretical level. But that was never Mises’s key problem with socialism.

The real problem with socialism isn’t finding prices for consumer goods. The real problem is finding prices for land, machinery, and other means of production. In a socialist economy there will be endless transactions of capital goods in which the government is both the buyer and the seller. Without real markets, there’s no way to determine the value of these things. This is, as Murray Rothbard put it, “where calculational chaos…reigns.”

Ironically, the only reason the Soviet Union lasted as long as it did was because of free markets. The Soviet Union wasn’t a pure socialist economy. Instead, it “borrowed” prices for its capital goods from nations with free economies. Without those prices, it would’ve never lasted as long as it did.

In the end, Ludwig von Mises won the debate. In fact, no one ever successfully challenged his original position. Instead, the Socialists seized on Hayek’s contention that market socialism was feasible, focused their attacks on him, and ignored the arguments posed by Ludwig von Mises. Today, the ideological battle between the Austrians and the socialists continues. While neither side has conceded, its difficult to imagine the socialists ever being able to counter the problems posed by the brilliant Ludwig von Mises.

How Wild was the Wild West?

The “Wild West” is an expression used to refer to life in the western United States during the late 1800s. For decades, films and books have depicted the Wild West as a place of gunfights, outlaws, and mass disorder. But recent scholarship shows otherwise. It turns out that the Wild West may not have been so wild after all.

A Family of Homesteaders in the Wild West

“The Covered Wagon of the Great Western Migration. 1886 in Loup Valley, Nebr.”: A Family of Homesteaders in the Wild West
Source: Wikimedia Commons

Was the Wild West a Powder Keg waiting to Explode?

The Wild West has long been a staple of American culture. Immortalized in dime novels and Hollywood movies, it has long been depicted as lawless, violent, and chaotic. And a cursory look at trends taking place in the American west during the 1800s would seem to confirm that image.

The Wild West was populated with strangers from various backgrounds, countries, and nationalities who wanted to get their hands on gold. For the most part, they didn’t intend to stay in the area – they wanted to get rich and get back home. Most individuals carried guns. And to top things off, there wasn’t much in the way of official government to keep the peace. At first glance, the Wild West appears to be a power keg filled with a toxic mixture of greed, racism, and unregulated firearms. To top it off, the area exhibited little in the way of long-term community or government law enforcement.

How Wild was the Wild West?

One might expect such a situation to lead to violence and daily gunfights. But a growing body of research suggests the opposite – that the Wild West may have actually been quite peaceful and prosperous. Let’s take a look at some of the strange truths we now know about the Wild West.

  • Bank robberies were rare: According to historian Larry Schweikart, bank robberies were almost non-existent in the Wild West. From 1859-1900, there were only about a dozen or so robberies. In fact, such crimes only became a problem during the 1920s when automobiles allowed for easy escapes and physical security became less important to a bank’s success due to the Federal Reserve assuming responsibility for the system.
  • Private agencies provided law and order: According to Terry Anderson and P.J. Hill’s book, An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West, “private agencies provided the necessary basis for an orderly society in which property was protected and conflicts were resolved.” Such agencies included land clubs, cattlemen’s associations, mining camps, and wagon trains.
  • Homicides were also relatively rare: In his book Cattle Towns, Robert Dykstra examined five major cattle towns between 1870 and 1885. He found that only forty-five murders took place over the fifteen years.

All this is not to say that hatred, violence, and murder didn’t exist during the Wild West but merely to say that the amounts of it that occurred were far less than has been portrayed in the popular media.

Why was the Wild West relatively Tame?

This can be partly credited to the establishment of private organizations. According to historian Tom Woods, private land clubs created their own laws to “define and protect property rights in land.” Wagon trains that transported people to the west had their own constitutions and judicial systems. Mining camps formed contracts to restrain their own behavior and developed their own legal systems. Those who didn’t approve were free to leave and mine elsewhere. Cattlemen’s associations also wrote constitutions and “hired private ‘protection agencies’ to deter cattle rustling.”

The result was peace…a peace that only began to deteriorate once formal government was introduced into the region…a peace that astounded observers of the time:

“Appeals were taken from one to the other, papers certified up or down and over, and recognized, criminals delivered and judgments accepted from one court by another, with a happy informality which it is pleasant to read of. And here we are confronted by an awkward fact: there was undoubtedly much less crime in the two years this arrangement lasted than in the two which followed the territorial organization and regular government.” ~ J.H. Beadle, Western Wilds (1860)

What about Violence toward the Plains Indians?

Now of course, this just covers the settlers themselves. Treatment of the Plains Indians was marked with violence right? Well, according to Woods, the first half of the 19th century was notable for relatively peaceful trading between the Indians and the settlers. It wasn’t until the second half of the century that violence became the norm. And much of that violence “sprang from…U.S. government policies” rather than civil society. More specifically, at the end of the Civil War, “white settlers and railroad corporations were able to socialize the costs of stealing Indian lands by using violence supplied by the U.S. Army.” In other words, rather than paying for land, politicians beginning with Abraham Lincoln were determined to seize it on behalf of the Union Pacific Railroad. In the process, they enriched themselves as well as numerous prominent American families.

Unfortunately, that seizure came at a high cost…the vicious and deliberate extermination of the Plains Indians by forces led by former Civil War generals. General William Sherman sometimes referred to the affair as “the final solution of the Indian problem.” As many as 45,000 Indians, including women and children, died between 1862-1890 as a result of this government-initiated campaign.

Guerrilla Explorer’s Analysis

So, it would appear that civil society in the Wild West was actually rather tame. The “wild” was supplied by the U.S. government’s so-called Indian Wars, which served to permanently alter the settlers’ once-friendly trading relationships with the Plains Indians.

But why does popular culture continue to portray the typical Wild West city as being full of death and violence? It turns out that the problem begins at the academic level.

“The ‘frontier-was-violent’ authors are not, for the most part, attempting to prove that the frontier was violent. Rather, they assume that it was violent and then proffer explanations for that alleged violence.” ~ Roger McGrath, Gunfighters, Highwaymen, and Vigilantes: Violence on the Frontier

Anarcho-capitalists often use the Wild West as an example of how individuals can foster a peaceful existence in the absence of government. Essentially, settlers created their own institutions in order to deal with the very specific problems they faced. Violence was relatively minimal in civil society. But the arrival of formal government brought with it a culture of violence as well as a wave of violent genocide that haunts us to this day.

 

Guerrilla Explorer’s Wild West Coverage

Does History Control the Future?

History, we are often told, controls the future. One common refrain is that “those who do not learn from history are doomed to repeat it.” But which history? Do “actions speak louder than words?” Or is “the pen mightier than the sword?” What are the lessons of history? Do such lessons even exist?

Does the Munich Agreement provide us with lessons of history?

Neville Chamberlain shows the Munich Agreement to a crowd at Heston Aerodrome. Did this seemingly failed attempt at appeasement provide us with lessons of history?
Photographed by Ministry of Information (September 30, 1938)
Source: Wikimedia Commons

Control the Past, Control the Future

Many modern historians yearn to do more than just chronicle the past. They wish to be prophets of a sort, using the past to tell us how we should live. This involves compiling historical facts and then using those facts to generate “lessons of history.” And since history is viewed as an overwhelming force with predetermined outcomes, politicians are encouraged to use the giant size of government to combat those outcomes. All in all, since politicians often make decisions based lessons of history, historians are able to wield tremendous power by, in effect, “controlling the past.”

One example of this scenario is historian Michael Bellesiles. Bellesiles’s incredible downfall is recorded by Lew Rockwell in his piece, “Bellesiles: the Larger Context.”

“That is why Michael Bellesiles’s book Arming America: The Origins of a National Gun Culture seemed so notable. The thesis…was that gun ownership was not widespread before Lincoln’s war. Individual gun ownership is really a modern obsession; indeed it is an invention. The thesis seemed counterintuitive, but what scholars call the apparatus was there: immense footnotes and citations suggesting massive research. What really mattered was the subtext. It implied that the gun control advocates had history of their side, that personal ownership of firearms is no more necessary now than in frontier times…Once the original sources were checked out, it turned out that at all crucial junctures, the book was a hoax. His research…didn’t check out. His quotations of first-hand accounts were altered. He trimmed and cut the evidence to match his thesis.”

In other words, Bellesiles constructed false lessons of history in order to influence the present gun control debate. So, how are we supposed to learn from the past? How do we weed through the competing idioms and falsified research to come up with the true lessons of history?

Do Lessons of History Exist?

I would argue that the question is moot since history has absolutely no predictive power. In other words, there are no lessons of history.

“The notion of a law of historical change is self-contradictory. History is a sequence of phenomena that are characterized by their singularity. Those features which an event has in common with other events are not historical.” ~ Ludwig von Mises, Theory and History

Events in history are dependent on an exact sequence of very specific events involving very specific people with very specific emotions and ideas. Thus, Neville Chamberlain’s 1938 appeasement, which failed to stop Hitler’s advance, tells us nothing about how such a strategy would work elsewhere in time. Heck, we can’t even be sure that appeasement was the worst possible strategy.

“The favorite “alternate history” of the interventionists involves World War II and what “would” have happened had Chamberlain not “appeased” Hitler at Munich. “History teaches us,” so the common refrain runs, “that appeasing tyrants only leads to more killing and suffering later. If Hitler had been stopped in 1938, millions of deaths would have been averted.” History teaches us nothing of the sort. It teaches us that an agreement was reached with Hitler in 1938, which Chamberlain famously boasted would guarantee “peace in our time.” The next year, Germany attacked Poland, Britain and France declared war on Germany, and a long and bloody conflict ensued. History says nothing about what would have occurred had Britain and France gone to war in 1938. Nor does it teach us what might have happened had they not gone to war over Poland.” ~Gene Callahan

Guerrilla Explorer’s Analysis

History is not a natural science. It doesn’t allow for the creation of lessons and rules that serve to govern the future. Thus, the only time history can truly control our lives if when we let it do so. However, just because the past can’t inform the future doesn’t make it useless. Gene Callahan says it best: