Archive for the 'private property' Category

The System of Liberty

July 18, 2013

by Jerry O’Driscoll

I have just completed George Smith’s The System of Liberty: Themes in the History of Classical Liberalism. I recommend it highly to all. It is a tour de force, and an essential read for all those interested in classical liberal ideas. Many of the debates today on the political right have their origin in the debates over classical liberalism.

The book is co-published by the Cato Institute and Cambridge University Press. This is the second book this year jointly published by Cato and Cambridge, and is a coup for Cato. The other one is Richard Timberlake’s Constitutional Money: A Review of the Supreme Court’s Monetary Decisions.

Smith tells us that “’classical liberalism’ refers to a political philosophy in which liberty plays the central role.” A great deal is packed into that definition, and much of the book is devoted to developing and explicating all the issues. These include, among other issues, concepts such as order, justice, rights and freedom. It includes such monumental controversies, some still with us, as natural rights versus utilitarianism.

Quoting Lord Acton in the Introduction, Smith observes that “the true liberal views liberty as an end, not merely as a means; it is a value that is not “exchangeable for any amount, however large of national greatness and glory, of prosperity and wealth, of enlightenment or morality.’” Historically, liberalism developed around concrete issues. “Liberty of conscience” was one such, and was bound up in the struggle for religious freedom. That struggle was played out in Britain, but influenced events in the United States.

Smith takes up many issues or themes, beginning with “Liberalism, Old and New.” What Smith terms the “Lockean paradigm” of natural rights, social contract, consent, property, and the rights of resistance and revolution dominated old liberalism. Even when criticized, the paradigm established the terms of the debate.

I will highlight two chapters. “The Radical Edge of Liberalism” is quite important. In it, he examines the key language of the Declaration of Independence. The Declaration articulates the rights of resistance and revolution embodied in the Lockean paradigm. Smith asks of that paradigm: “Who has the right to judge when revolution is justified?” Locke answered: “’ The People shall be Judge.’”

It is no wonder that liberalism engendered conflicts, even within the tradition. Natural rights were seen as too radical by some, like Jeremy Bentham, and utilitarianism was the outcome. In “Conflicts in Classical Liberalism,” Smith notes that, prior to Bentham, traditional thinking saw no conflict between utility and natural rights. “Thus if social utility is the general goal of legislation, natural rights are the standard, or rule, which must be followed if this goal is to be achieved.” As noted by Smith, “Bentham broke with this venerable tradition.” He made “social utility serve as both the goal and standard of political activity.”
Smith is scrupulously fair to all thinkers, including critics of classical liberalism.

In Bentham’s case, however, he reveals Bentham to be a confused thinker who ultimately failed to make sense of his hedonic calculus. As Bentham came to admit, it was impossible to add up happiness across individuals. That is not to say that utilitarianism as developed by other thinkers was subject to criticisms leveled against the Benthamite calculus. But the problem is that utilitarianism, by undermining natural rights, undermined classical liberalism.

There is a great deal more to this book, and I hope many will read it. Smith is an exceptionally good writer. But the ideas he examines are deep, and the book is not an easy read. Smith does not skip lightly over topics. I have a few quibbles with some of what he writes, but very few. Decide for yourself.

Live Free and Let the Landlord Die

June 8, 2012

by Mario Rizzo

By now most of you know of the latest Mayor Bloomberg stupidity, that is, the proposed banning of sugary sodas in cups too big for his taste.

But you may not know of the latest in New York State housing law. If the loft you live in has not been brought up to various housing codes, you can live there free. Read the rest of this entry »

Big Bank Breakup or Tea Party?

April 4, 2012

by Chidem Kurdas

We’ve been going back and forth on the economics of too-big-to-fail banks but paying less attention to the politics. The most recent ThinkMarkets broadside on banks is Jerry O’Driscoll’s post on the Federal Reserve Bank of Dallas annual report.

In part of the report, the Dallas Fed’s director of research Harvey Rosenblum argues that the new Dodd-Frank regulations are insufficient to deal with the threat posed by too-big-to-fail banks and therefore these need to be broken into smaller entities. He and the bank’s president, Richard Fisher, made a similar point in a Wall Street Journal column.  Some other Fed officials have espoused the position as well.  Read the rest of this entry »

How’s Your Compulsory Holiday Giving Coming Along?

December 23, 2011

by Mario Rizzo

I wish people would perform the following intellectual experiment. Find out how much in federal taxes you have paid in the past year. Don’t worry about making any distinctions between the various payroll taxes and the income tax. It all goes into the same pot in the final analysis.

Now assume that this amount is in an account and that you are not allowed to spend any of it on yourself or your immediate family. Nevertheless, you are given a choice about how to spend it. What would you spend it on? Now compare that with what the federal government spends on. How do they match up? Read the rest of this entry »

Fishy Federal Asset Seizures

August 23, 2011

by Chidem Kurdas

A Wall Street Journal article reports that the number of federal statutes giving the government the right to confiscate citizens’ assets has nearly doubled since the 1990s, by one count.  This is not something that happens only to convicted gangsters. Among the more than 400 federal statutes allowing for forfeiture is the Northern Pacific Halibut Act.

Violators of the Halibut Act, which prohibits fishing in certain areas in order to conserve stocks, can lose their boat and – this could get smelly – their fish as well.

“Last year, forfeiture programs confiscated homes, cars, boats and cash in more than 15,000 cases. The total take topped $2.5 billion, more than doubling in five years, Justice Department statistics show,” wrote John Emshwiller and Gary Fields in the WSJ. They don’t mention illicit halibut; Read the rest of this entry »

Foreclosures

September 26, 2010

by Jerry O’Driscoll  

The New York Times reports that GMAC (now a subsidiary of Ally Financial) has admitted that it filed “dubious” financial documents.

The problem goes beyond GMAC. A Florida circuit judge is quoted as saying some of the documents filed by lenders are “incompetent,” some “just sloppy,” and he suggests “there could be a fraudulent element.”

In boom times, lenders cut many corners including loan documentation.  In the 1980s Texas banking crisis, regulators taking over failed banks often found it challenging to find loan documents.  Even if found, they could be defective.

Securitization has greatly complicated the problem.  Mortgages are sliced and diced into separate tranches of securities.  It can difficult to prove ownership of the mortgage. If the originator was sloppy in preparing the underlying loan documents, it can be an impossible task. Read the rest of this entry »

China Catch-Up and Two Freedoms

August 17, 2010

by Chidem Kurdas

China is expected to produce more than Japan this year, thereby becoming the world’s second largest economy after the US.   Chinese annual output is only $5 trillion compared to American $15 trillion and per person income is only a fraction of the US, but it is clear that China is catching up.

We’re witnesses to a gigantic experiment in political economy. Here is an authoritarian government that apparently recognizes the superiority of free markets, private property and individual enterprise in organizing an economy. It has lifted the shackles off industry and commerce, to an extent, so as to benefit from these powerful forces. Thus China is growing at phenomenal rates.

But freedom of expression and political dissent remains suppressed even as economic freedom expands. In the ever-resonant words of Milton Friedman, “Economic freedom is an essential requisite for political freedom. By enabling people to cooperate with one another without coercion or central direction, it reduces the area over which political power is exercised.” Read the rest of this entry »

Understanding Markets: Point/Counter-Point

July 22, 2010

by Thomas McQuade and Chidem Kurdas

Though it should be obvious to all that markets are of immense benefit to humanity, any appreciation of these institutions is almost always hedged with a perceived need to constrain and regulate—in short, to subject them to conscious outside control.  The reasoning is understandable: the unconstrained pursuit of self-interest can only lead to chaos.

But the preference for constraint through centralized direction betrays a profound misunderstanding of the way markets work.   

Can we explain that claim any better than the volumes already written on the topic?  We find that, when we discuss the issue, we agree on the basics, but differ in emphasis and details—and details matter.  Here is part of our discussion, in point/counter-point format. Read the rest of this entry »

The Cost of Making Exceptions

June 6, 2010

by Mario Rizzo  

As a political and legal culture, we do not know how to deal with slippery-slope tendencies. The recent discussion (here and here, and many other places) of the public-accommodations provision of the Civil Rights Act of 1964 has made me more conscious of this issue.  

I am willing to agree for purposes of this post that the law forbidding private storeowners, hotels, and other merchants to discriminate on the basis of race was morally justified under the institutional conditions of the day.  

The problem, from my perspective, is that the cost of making exceptions to general principles is not sufficiently appreciated. Benefits may exceed costs in a particular case, but if these costs are not fully recognized, the course of action taken may lead to bad decisions down the road.  Read the rest of this entry »

France’s Foolish Idea

February 22, 2010

by Mario Rizzo  

After having written about “Germany’s Foolish Idea,” I see that the French are not immune either.  

First, I apologize to the many French (and Germans) who do not share their governments’ ideas or agree with their policies. It has, unfortunately, become a habit in journalism and even in the professional writing of historians to refer to actions by states as if “France or Germany did this or that.” More correctly, we should say the “French or German government did this or said that.”  

This is not just a semantic issue. It goes to the root of a major ideological problem: the confusion between society and the state. 

The Financial Times reports that many French politicians are upset about a private restaurant chain, “Quick,” deciding to serve exclusively halal beef-burgers in a few of its stores to attract Muslim customers. (Halal refers to food that is “lawful” according to Islamic law. There are restrictions on the kind of food, the method of slaughtering the animals, and the processes of food preparation.)   Read the rest of this entry »

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