Tag Archives: Joseph Schumpeter

Freedom Under Law

Last night the Senate failed to advance an extension of the Patriot Act’s Section 215. Rand Paul objected to Mitch McConnell’s efforts at passing any short-term extensions and suddenly it looks like the legal authority for the Patriot Act’s phone metadata collection program may actually expire June 1st.

“There comes a time in the history of nations when fear and complacency allow power to accumulate and liberty and privacy to suffer. That time is now, and I will not let the Patriot Act, the most unpatriotic of acts, go unchallenged.”

So said Rand Paul at the outset of his 11 hour pseudo filibuster on Wednesday, and it’s hard not to be moved by the language. If there is a quality I admire most about the Senator from Kentucky it is his maniacal obsession with restoring checks and balances to our government. In order to have any success at reining in executive power the public must first agree with the premise on which the reform rests. If you’ve paid attention to Paul in the Senate you know the thread that runs through his speeches and through his marathon performances on the Senate floor is the separation of powers. Drones and NSA spying were not background concerns per se, but neither were they the true focus of the filibusters. At root is a fundamental objection with the flagrant expansion of executive power under every administration since World War II, but especially since 9/11.

Why are separation of powers so important? To hear Paul tell it, the sanctity of divvied powers was eloquently championed by French philosopher Montesquieu, who warned how tyranny would ensue whenever the executive moved to legislate. Likewise, separating the judicial branch from both executive and legislative was imperative for the security of habeus corpus and other natural liberties. Embedded in small government philosophy is a staunch suspicion of planning and expertise, a wariness born during The Enlightenment and which reflected the conflict between the regal old guards and the new class of individual-minded bourgeoisie. For eons the word of the state was the final word on society; decrees from on high carried down to the masses for them to follow. However, the individual conscience rights that began taking shape in the Middle Ages became more widely disseminated during the Renaissance and Enlightenment. With the expansion of knowledge and individual agency the feudal system gradually gave rise to market economies fueled by spontaneous order. The consequent loss of power and influence for the aristocracy was a product of capitalism providing the vehicle for political participation by ordinary folk. Schumpeter’s insight that “the princess was always able to wear silk stockings, but it took capitalism to put them within reach of the shop girl” put the lie to the Marxist conceit that free enterprise would destroy the middle class. Voluntary exchange under a legal framework that respects the individual and cherishes his right to profit from his own labor is what created the middle class.

As the Western world moved methodically toward social appreciation for the citizen’s sovereignty over the state, the question of democracy became crucial: how to organize a free society of, by and for the people when for so long power and authority were hereditary and monarchical? Fortunately the British and ultimately the Americans did not need cast about in search of a guiding principle. We already got one and it’s called Magna Carta. The great charter signed at Runnymede marks its 800th anniversary this year and yet remains relevant as ever. Habeus corpus, jury trials, property rights and a common law that precedes and preempts man-made law; these natural rights discovered by our English forebears provided the blueprint for the individual based free society. They also declared for the first time in history real restrictions on the power of the state or king, which would prove a launching point for our founders as they set to establishing a government that would pit ambition against ambition as a means of separating and counterbalancing the powers of the state. The best encapsulation of this radical vision for upending centuries of authoritarian rule is inscribed on the monument commemorating Magna Carta: “freedom under law.”

Freedom under law is what the entire debate over NSA and executive power overreach is all about. National security state defenders will often say there’s no evidence of abuse currently and besides, don’t you want to be safe? But that is not the point. The point of a freedom secured by law is that the law is the law, and it is supreme. John Adams said we strove to institute a “government of laws, not men.” When executive authority runs afoul of the law it is supposed to be a big deal. When successive administrations of different parties expand executive power to the degree that natural rights are abused, it is supposed to be a huge deal. But in the name of fighting terror and keeping the country safe the Bush and Obama administrations have treated the 4th amendment like so much garbage.

In attempting to take Rand Paul to task Andrew McCarthy of National Review runs the gamut of talking points before insisting that “the depiction of national-security agents who are trying to protect American lives as seventies-style rogues tearing the Constitution to bits is a smear.” But Paul is not doing that; instead he is arguing that the Patriot Act and its especially problematic provisions open the door for abuse at any time. It may not be now, or in the next administration or the next but the point of freedom under law is that we eliminate this risk altogether by forcing fallible men and women to swear oaths to uphold and defend the Constitution. The founders were explicit about making the law supreme and they further divided power to guard against the transient passions and fears that inevitably come to challenge man and his commitment to law. As challenging and daunting as it is, the jihadist threat of modern times is exactly the kind of passionate, fearful moment in time the founders knew would inevitably materialize. If they knew that only two hundred some odd years later American political discourse would include such penetrating insights as Chris Christie’s you can’t enjoy your civil rights from a coffin, they would have folded up shop and abandoned the revolutionary project full stop.

The Patriot Act is what happens when laws are passed out of fear instead of sober deliberation. Freedom under law was always meant to keep that from happening, like the abstract, intangible version of standing athwart history yelling stop. The founders knew too well the propensity of man to govern arbitrarily; thus the principle aim of the new republic was to build a system that takes arbitrary and consolidated power out of the equation and lifts the Constitution up as the final arbiter on what government can do.

Twilight of the Public Sector Union

Politico has an interesting piece today on the growing movement among Democrats to curtail public union clout. Like today’s WSJ editorial it focuses on Republican governor Bruce Rauner’s efforts to follow Scott Walker down the public pension reform path. What’s interesting is how many Democrats in state legislatures are waking up to the sustainability problem with the public union model.

In November Democrat Gina Raimondo won the Rhode Island governor’s race after a bruising primary where she defeated two union-backed candidates who were hell-bent on keeping the union reformer out of power. Raimondo is Rhode Island’s first female governor; just as importantly though, she is clear-eyed about the problem with public sector unions and unabashed about taking them on and demanding key reforms. Like every brave blue state Democrat trying to convince her left flank that reality is the obstacle standing athwart their collectivist dreams, Raimondo faces an uphill battle and is probably going to lose in the end. Such is life when facing off against the naked self-interests of a rabid and entrenched opposition.

Chicago Mayor Rahm Emanuel is nobody’s idea of a conservative, but he is fully aligned with Rauner in opposing the nasty Chicago Teachers Union, which needs corrupt legislators to rubber-stamp their collective bargaining scheme in the same way that humans need oxygen. Emanuel and Rauner are old colleagues, so the union left will say this is just more cronyism to fatten their own coffers by attacking unions. But any honest appraisal of Illinois politics will show that public unions exist first and last to expand the state bureaucracy, demanding always more money for pensions and benefits and higher taxes to pay for them. As a result, Illinois has the worst pension crisis of all the states and is considered a wasteland for business and economic growth. Neighboring Indiana and Iowa have so thoroughly outperformed Illinois this century that some Democrats in Springfield acknowledge the need for reform.

San Jose Mayor Chuck Reed offered an admirable sentiment after “clash[ing] with public employee unions” in California when he said that “there’s a difference between being liberal and progressive and being a union Democrat.” Is there really, though?

The hard truth that confronts the left is that they are not a viable political coalition without the millions of dues-paying public union members contributing millions to keep Democrats in office. At the federal, state and local levels, union leadership as well as the rank and file line up behind Democrats at astonishing rates. Take a gander at candidate contributions by federal bureaucrats (especially the lawyers) in the last presidential election. And what happens if the miracle occurs and Democrats abandon their corrupt union practices and admit that they are more responsible than anyone for the epidemic of blue state pension and budget fiascoes?  Do they go full retard and devote their entire political project to identity politics and the cultural fetishes of cloistered academics? I mean, I welcome it should it transpire, given that a politics that doubles and triples down on postmodern relativism and political correctness is a political movement not long for this world.

The only practical solution for the 21st century left is a complete re-think and overhaul of their approach to the economy. I am not confident or optimistic this will happen, committed as the left is to a religious conviction that they are constantly beset by a rigged system and the culprit is capitalism. Going back to the San Jose Mayor’s comment, I’m genuinely curious to learn what a liberal or progressive not in thrall to the romantic ideal of the trade union looks like. The left’s overriding ethos is that power and wealth are unfairly concentrated at the top, where “owners” exploit “workers” with their unearned capital accumulation. Marx was adamant that capital could only be accumulated through theft, and that impulse is alive and well with today’s left. The romance of the unions is all about leveling the field, sticking it to the fat cats via labor “solidarity,” strikes and bargaining power. It’s a zero sum philosophy with a cynical message: the wealth has been unfairly allocated to the rich few, thus the only recourse is to organize and plot to take back your rightful share. This line of thinking, beyond being juvenile and simple, betrays a fundamental lack of understanding of how market economies work. It obsesses over equitable distribution and is uncomfortable with the fact that life’s natural order is not fair. And it treats as obscene high profits and earnings, imagining that prosperity is best when it is shared; the point of politics then is to guard against unfairness wherever possible. That they fail to see how a system of perceived unfairness does in reality serve to foster the most broadly shared prosperity (see: America, The Unites States of) imaginable is a frustration we will likely have to endure forever.

Unless of course the left is forced into reconsidering its economic perspective by blue state voters sick of living in stagnant economies where insane percentages of state budgets are allocated just to public employees and their lavish benefits. 25% of Illinois’ budget is swallowed up union costs. TWENTY FIVE PERCENT! And yet the Chicago progressive mob is adamant that taxes must increase along with spending, a tune that never changes regardless of the fiscal climate. This is the kind of blind, tone-deaf, oblivious political thuggery that is going to doom the left eventually. The question is do they see the writing on the wall and are willing to make adjustments to their chief economic plank, or are they going down with the ship? By all accounts, union leadership is going to fight to the death to coax every last possible dime out of taxpayers before they shuffle off into the void, but there are more encouraging signs among rank and file members as well as savvy Democrats in the states. The problem is at the federal level, where public unions are less strapped by finite state budgets and reap the rewards of an out-of-control government spending apparatus. But even the big federal players like Afscme and AFT can see that reformer governors in blue states where unions typically enjoy broad approval are finding receptive audiences among state Democrats who realize the union model is unsustainable.

I contend that California will be a red state before Texas ever turns blue. Their pension crisis is not as horrible as Illinois’ but it ain’t pretty either. Chuck Reed and other California Dems (including Jerry Brown) may intuit the problem correctly, but it remains to be seen whether they have either the will or the ability to take on CALPERS and the rest of the bloated public sector. Far be it for me to offer advice to progressives on how to avoid squandering their entire movement, but if they want to be viable post-Obama they absolutely must ditch their wretched attachment to public sector unions and the cesspool of half-baked Marxism from which it draws inspiration. The only way that is ever going to happen is if they leave the politics of envy behind. Rising tides do indeed lift all boats, but if you’re consumed with rancor and envy and are convinced that America and capitalism are evil schemes constructed by greedy monocle-wearers, then it is going to be impossible to recalibrate your perspective on economics. Let’s let Schumpeter weigh in on the subject because no one has ever been able to explain this stuff quite like the Austrian master (emphasis mine):

In part [Capitalism] appeals to, and in part it creates, a schema of motives that is unsurpassed in simplicity and force. The promises of wealth and the threats of destitution that it holds out, it redeems with ruthless promptitude. Wherever the bourgeois way of life asserts itself sufficiently to dim the beacons of other social worlds, these promises are strong enough to attract the large majority of supernormal brains and to identify success with business success. They are not proffered at random; yet there is a sufficiently enticing admixture of chance: the game is not like roulette, it is more like poker. They are addressed to ability, energy and supernormal capacity for work; but if there were a way of measuring either that ability in general or the personal achievement that goes into any particular success, the premiums actually paid out would probably not be found proportional to either. Spectacular prizes much greater than would have been necessary to call forth the particular effort are thrown to a small minority of winners, thus propelling much more efficaciously than a more equal and more “just” distribution would, the activity of that large majority of businessmen who receive in return very modest compensation or nothing or less than nothing, and yet do their utmost because they have the big prizes before their eyes and overrate their chances of doing equally well. Similarly, the threats are addressed to incompetence. But though the incompetent men and the obsolete methods are in fact eliminated, sometimes very promptly, sometimes with a lag, failure also threatens or actually overtakes many an able man, thus whipping up everyone, again much more efficaciously than a more equal and more “just” system of penalties would. Finally, both business success and business failure are ideally precise. Neither can be talked away.”

-Joseph Schumpeter, Capitalism, Socialism and Democracy