Tuesday, September 23, 2008

Relearning old lessons

In 1776 Adam Smith published An Inquiry into the Nature and Causes of the Wealth of Nations. One would think that after more than 200 years we would have figured out the value of his lessons. Unfortunately, the collapse of the subprime mortgage industry has shown otherwise.

In his own words:

"In every country it always is and must be the interest of the great body of the people to buy whatever they want of those who sell it cheapest. The proposition is so very manifest, that it seems ridiculous to take any pains to prove it; nor could it ever have been called in question, had not the interested sophistry of merchants and manufacturers confounded the common sense of mankind. Their interest is, in this respect, directly opposite to that of the great body of the people. As it is the interest of the freeman of a corporation to hinder the rest of the inhabitants from employing any workmen but themselves, so it is the interest of the merchants and manufacturers of every country to secure to themselves the monopoly of the home market."

Why do we continue to appoint the fox to guard the hen-house? Time and time again we have seen that certain industries are unable to regulate themselves, yet time and time again we trust those whose 'interest is directly opposite to that of the great body of the people' to unduly influence our regulatory systems.

Tuesday, August 12, 2008

Making Patriots the Proper Way

With the beginning of the Beijing Olympics, much has been made of East Asia’s humanitarian record. There have been accusations and counter-accusations; issues of humanity and issues of practicality. Plenty has been written by better men than I on these important problems. In this post I will instead address a much smaller issue, but one which is relevant to our day to day lives as Americans: the issue of honest histories.

In the last decade we have witnessed numerous squabbles between China and its neighbor Japan. The specifics of this quarrel are ever changing, but the heart of the problem is simple enough. Japan refuses to acknowledge the war crimes it committed during its occupation of China in WWII. China, for its part, is understandably furious when Japanese textbooks pretend that particularly notorious massacres never took place. Not surprisingly, I have never heard an American politician or popular figure take a meaningful stand on this issue. This is not because Japan’s refusal is insulting and ignorant, but because it is painfully familiar.

As a Coloradan born, and as a Coloradan raised, I am quite well versed in the indignities of that state’s public school system. Over twelve long years I was asked to study United States history several times, often with a strong emphasis on Colorado and the West. Upon gaining some age and intelligence under my belt, I revisited the history of my state, and I must say, we are lying to ourselves and our children. The atrocities committed against the Native Americans are still incredible to behold. Massacre after massacre, lie after lie, our true American history is full of regretful decisions. This is unarguable. But somewhere along the way, we have decided as a society that it is best to pretend that our history was consistently glorious. Certainly there could be beneficent motives behind our willful ignorance; perhaps it is the idea is to make great citizens through obligation to a noble past; perhaps it is the idea that those of us alive today are not responsible for the sins of the past. Regardless of the reasoning behind our shameless editing of history, one thing seems clear: we made mistakes which we pretend never occurred.

Aside from the fact that we certainly can’t be criticizing the Japanese for something that we do ourselves, we must address another troubling consequence. Those elements of our history that are truly glorious have been dimmed by our unwillingness to face the shameful portions of America’s past. How truly noble can a nation be when it fears its own reflection? While we lay claim to Nathan Hale and other honorable patriots we simultaneously disgrace their memory by editing our own. One doesn’t create patriots by lying. They are created by seeing the noble and the ignoble, the honorable and the disgraceful, the great and the terrible. They are created by deciding what part of our history we choose to embody and carry forth into the future. And for that decision it is as essential to remember the Sand Creek Massacre as it is to remember Nathan Hale.

Take It Like A Man

With the rise of a generation that can barely remember good ole Stormin’ Norman, much less the pride and sacrifice of WWII, the time has come for a small reminder. It is time to remember that for every right we possess, we shoulder the burden of a corresponding duty. I have heard much talk in the last few months blaming politicians and pundits for the debacle we have made of Iraq. Certainly this is an understandable impulse. After all no one wants to believe that the deaths we hear of every day are our fault. No, instead we tell ourselves that it must be the incompetence of our President or our Congress that has failed so dramatically. The only group that hasn’t been publicly blamed for at least some part of the situation is the American citizen. I have one question, if the Iraq invasion was so foolish, what does that make those who funded it? All of us who disagreed with the invasion had the right to move out of America, to stop paying taxes, to remove our implicit approval. For those of us who failed to do so, we have nobody to blame but ourselves. If we stay, if we continue to enjoy the privileges of being an American, we must take responsibility for not only what we do, but what is done in our name.

There are those who adamantly claim, “It wasn’t me, I protested, I wrote letters, I voted against politicians who supported the war.” Poppycock. The rights to protest, to vote, to have one’s voice heard are all privileges of being an American. Accepting the rights of American citizenship means accepting responsibility for the mistakes made in our name. Disagreement alone does not remove responsibility. We all work and sweat and bleed in the same country and for the same government. A right-wing militia member pays sales tax for his camouflage pants, just as a left-wing hippie pays it for his incense. We all retain the rights of being an American citizen and so we must all bear the responsibilities as well. As our brother’s hands become red, so do our own. Hawks and Doves alike we are counted among the strength of our country; so as Hawks and Doves alike we must repair what we have wrought. There can be no separating rights and responsibilities. Without one the other becomes meaningless. Pink Floyd said it best, “How can you have any pudding, if you don’t have any meat?” Refusing to accept any personal responsibility for what our country has done, good or bad, can only lead to more mistakes.

This is not to say that those who were responsible for lies or sheer incompetence should be let off the hook. The point is that we cannot believe that our duty to help the Iraqi’s repair their country has anything to do with our original opinions about the war. Democrat or Republican we are Americans and as such must jointly pay our country's debts.

With discussions of withdrawing troops from Iraq this issue becomes more pressing. There is an undeniable sense among some of those who protested the initial invasion that we should withdraw as soon as possible. This is less an opinion based on military strategy or foreign policy considerations than a knee-jerk reaction to the difficulties of our troubled occupation. It is asked why we are putting the lives of our service men and women at risk, why we are spending enormous amounts of money when our own economy is facing a possible recession. The reason is simple. As proud Americans we must reap what we have sown. Yes our soldiers are dying; yes our country needs the money that is being put towards Iraq. But the inescapable fact is that we have created this situation, and if keeping some of our soldiers there can improve things, we have the obligation to do so. Any decision regarding a possible withdraw from Iraq must be made with this responsibility in mind.

Thoughts on the Electoral College

Thanks to the presidential elections of 2000, many Americans are aware of the shamelessly strange Electoral College. Unfortunately, most remain unaware of the beliefs that gave rise to our country’s adoption of this system. This post will superficially discuss the basis for the Electoral College, its relevance today, and what the hell we should do about it.

A brief reading of one of the Federalist Papers, #68, reveals that part of the original reason for creating the Electoral College was the unbridled ignorance of the average early American. Our ignorance was due to a variety of factors, but the most likely contenders are the dearth of adequate education and the difficulty of disseminating ideas and opinions. In essence Alexander Hamilton advocated a wherein voters select electors who would be responsible for having the judgment and knowledge to elect a qualified candidate for president. This was necessary because, "Talents for low intrigue, and the little arts of popularity, may alone suffice to elevate a man to the first honors in a single State; but it will require other talents, and a different kind of merit, to establish him in the esteem and confidence of the whole Union, or of so considerable a portion of it as would be necessary to make him a successful candidate for the distinguished office of President of the United States." This yields a couple of pressing questions: 1. Has the Electoral College actually shown better judgment than that of average voters? 2. Have changes in technology altered the political landscape in a way that makes direct voting more reasonable? For my money the answers are pretty simple; No to the first and yes to the second.

The 2000 election provides a helpful test-case for deciding the first question. Approval ratings for President Bush and the majority of his policies are now unequivocally negative. His presidency has been almost universally acknowledged to be a crushing failure, by republicans and democrats alike. Time seems to have shown President Bush to be an example of the very type of candidate that Hamilton warned us about so long ago. If you will think back to the days of the 2000 election you will probably remember the many interviews, polls, and studies that showed a large number of Americans voting based on painfully superficial criteria. It was not uncommon to hear someone say that their vote for Bush was based largely upon the sense that he was ‘one of us’ and that he would be a good guy to have a barbeque with. In essence, President Bush was shown to have mastered, “talents for low intrigue, and the little arts of popularity.” On the other hand, former Vice-President Gore was almost universally acknowledged to have appeared stiff and unapproachable.

Yet somehow the slight majority of American people rose above their impetus to vote for the popular candidate and instead voted for the cold, calculating, but qualified candidate. Of course the election was incredible close, but Gore won the popular vote. In response, the Electoral College committed the very crime it was created to prevent; It elected the charming and popular Average Joe. Whether or not one voted for Bush before, it is pretty much unarguable that he has governed poorly, that the popular vote was the correct vote, and that the Electoral College is about as effective at choosing presidents as FEMA is at disaster relief.

When I can finally stop laughing and crying maniacally at the irony of the universe, I take two lessons from the 2000 elections. First, the Electoral College is a relic, a vestige of an earlier time in our democracy. Second, the American people are underestimated…maybe.

I say ‘maybe’ because it is impossible to forget the sound bites of Americans proudly describing their decision to vote based upon things like hairstyle or barbeque appeal, and because hindsight is 20/20. Perhaps Bush came off as more qualified than I remember, or perhaps Gore seemed unfit to govern for more legitimate reasons. There are so many variables and so much inescapable bias that I find it difficult to write much about this without qualification. This much, however, I can address. Even if it is impossible to determine whether the Electoral College makes more foolish decisions than the average voters, it is easy to show how such a thing could be. First of all, the electors are often chosen as a result of their long loyalty and involvement in one major political party or the other. This could have the effect of making the Electoral College even more dependant on party lines than a popular vote. At the very least, we should question whether or not our modern day electors are actually more qualified, or are simply partisan zealots.

Secondly, the rise of the Internet has changed the whole ball-game. It allows news to be communicated around the world almost instantaneously, it gives average people the tools to research complicated issues, and it provides a way for each political candidate to present their ideas and plans in full. (This last element has been utilized poorly so far, but I am confident that as time passes we will see an expansion from general declarations of a party’s platform into detailed descriptions of policy available online). Nevertheless, it is clear that circumstances have fundamentally changed in recent decades. The Electoral College may have been useful for most of our country’s history, but that was only because the essential circumstances remained unchanged. But now they have, and we should take proud advantage of it. Average voters now have the tools to be as educated as the traditional electors, and they have fewer ties that restrict to voting along party lines. The Electoral College has ceased being useful. It reduces the impetus to vote by unnecessarily complicating the process. Even those states that require electors to mirror the popular vote have maintained an unnecessary distance between the act of voting and the act of electing. The Electoral College drives candidates to ignore large portions of the country in favor of a small set of ‘battleground states’. It has become a fundamental impediment that deprives citizens of the right and duty of a meaningful vote. We should dump the Electoral College as part of a comprehensive effort to change our elections from sound-bites and photo-ops into a substantive discussion of issues.

Dangerous Enthusiasm

I was looking at the Libertarian Party website this morning and I found myself beset by two opposing thoughts. First of all- damn the Libertarians sure do talk a good story. The emphasis on civil liberties, free market economics, and of course, limited government action is a proud stance that was certainly shared by those who founded this country, as well as many of us that inhabit it today. But my enthusiasm was dampened by a painful realization. Correct me if I'm wrong, but America doesn't seem ready for a Libertarian government. Ironically enough, the proof of this is found in the idea of Free Markets, the very ideological root of Libertarianism.

Free Market principles are quite simple in their basic form. An unregulated market will adjust prices, wages, and whatnot automatically. This idea was first presented by Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations. This unfortunately titled book is large enough to double as a self-defense tool, yet the gist of it is simple enough: Don't Fight Self-Interest, Use It. Smith believed that all men are governed by self-interest. He also believed that one man's unyielding pursuit of what is best for him will be counter-acted by another man's similar interest. In essence, everyone is ruled by something like greed or ambition. But the danger of one man's ambition is neutralized by that of the next man. You can trust everyone only because you can trust no one. After millennia in which religions and philosophies sought different ways to make mankind virtuous, Smith finally realized that if one cannot stop mankind from being vice-ridden, perhaps one can redirect that vice to make it useful. Where Plato used Karate, Smith uses Jujitsu.

This general idea has come to govern everything from the very creation of our county (checks and balances, and the division of powers are based on this principle according to the Federalist Papers), to our adversarial legal system (attorney's argue for their clients, and only indirectly for the 'Truth' or 'Justice'). For over two hundred years the most important facets of our government and economy have been governed by Smith's basic idea. Our natural greed is the only proper tool for correcting market. Certainly there have been painful hiccups, and occasionally the proper way to act upon our natural self-interest is difficult to determine. But overall the great minds of our country, be they conservative or liberal, have generally ascribed to the belief that our greed can be used beneficially. It is a rare American politician that believes capitalism is fundamentally flawed, or that our legal system needs a fundamental redesign. Clearly the ideas that Libertarians advocate are based upon commonly accepted principles of human behavior. That is not the problem. The problem is timing and starting points. My fundamental problem with Libertarianism can be demonstrated in many elements of their political platform. For ease of understanding I have chosen the Libertarian stance on 'Economic Liberty' as an illuminating example.

Among the many admirable proclamations found on the Libertarian Party website (http://www.lp.org/) is the following segment describing their party platform regarding economics:

“2.0 Economic Liberty
A free and competitive market allocates resources in the most efficient manner. Each person has the right to offer goods and services to others on the free market. The only proper role of government in the economic realm is to protect property rights, adjudicate disputes, and provide a legal framework in which voluntary trade is protected. All efforts by government to redistribute wealth, or to control or manage trade, are improper in a free society.”

Take special note of the last sentence, as this is where they have gone wrong. One of the inescapable facets of Adam Smith's basic idea of capitalism is that the proper functioning of free markets requires certain things. The individuals participating in the market must have the most perfect information possible and they must be as free to adapt financially (alter careers or investments). The equation is simple: less information or less financial mobility equals a less efficient capitalism. The converse is also quite simple: more information or more mobility and the market will self-correct more efficiently.

The problem with the Libertarian platform is that it fails to recognize that different Americans are born into different levels of information and mobility. It is still quite possible for a modern day Einstein to live, work and die unnoticed simply because he came from a poor family, or he lived in a neighborhood with a mediocre public school system. My understanding of Libertarians is that they want the world to be a true meritocracy with people getting what they deserve. The lives of most of people are determined by unnatural advantages. Anyone who cares to notice will have seen stupid, lazy people go to Ivy League universities because their parents made a well-timed donation. It is equally common to see truly brilliant, hardworking people fail to impact the world because they lacked the necessary money or contacts.

Perhaps if we had begun our civilization with a more Libertarian outlook we would not have these problems, but the simple fact is that these problems exist and cannot be fixed by adopting Libertarianism now. Rather than jumping in immediately, we must prepare the ground. The Libertarianism that I would vote for is one that proceeds slowly and carefully. It would be a Libertarianism that works to fix the inequalities we have created for over two hundred years as a necessary prerequisite. Let me be clear, once we live in a country where you succeed based solely on hard work and intelligence, Libertarianism will be the best possible plan. But until then it seems destined to exacerbate the mistakes of the past by ignoring them.