Henry George on trade:

Free trade consists simply in letting people buy and sell as they want to buy and sell. It is protection that requires force, for it consists in preventing people from doing what they want to do. Protective tariffs are as much applications of force as are blockading squadrons, and their object is the same—to prevent trade. The difference between the two is that blockading squadrons are a means whereby nations seek to prevent their enemies from trading; protective tariffs are a means whereby nations attempt to prevent their own people from trading. What protection teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.

Sadly, this insight keeps being relevant.


A lesson in unintended consequences, European labor law edition

This morning Alex Tabarrok wrote about a subject I wrote about last November after the Paris attacks: possible ways that European labor laws may contribute unintentionally to terrorism. The connection would not be direct, of course, that would be too easy, but failure to find work contributes to failure to integrate. On the margin failure to integrate increases the odds of getting involved in terrorism; in a sufficiently large population, as in Europe, it needn’t be a large increase to end up with the attacks we’ve seen.

Practical steps after the Paris attacks

By now you’ve no doubt heard of the recent terrorist attacks in Paris, and you’ve no doubt heard the rumblings about “what we should do now”. Neocons whose Iraq war set the rise of ISIS in motion see it as further proof that the Western powers should never have eased up on the hard line. The anti-immigration factions are having a field day. Cooler heads remind us to remain calm but it’s not very clear what exactly we’re supposed to do once we’ve calmed down. What kinds of policies would help here?

It’s very hard to stop people once they are committed to doing violence. What sends them down that path? How can they be deterred earlier? We always read that a major recruiting pool for attacks like these are the young, the disaffected, the unacculturated, the unsuccessful. Often these are second- or third-generation sons of immigrants who immigrated at great cost to themselves. What long-term policies would remove the appeal of joining terror networks? (The short term is another question, one that is outside the scope here.)

The major question is why, given the choice between ordinary life in the new country and terrorism, some people choose terrorism? How does policy move the people who might choose terrorism into the category of people who don’t?

One thing that would surely help is to radically scale back the social programs that Europe is famous for. If merely existing in a country entitles immigrants to housing and other necessaries paid for with tax funds, incentives to learn the local languages and customs enough to get along with the natives are greatly reduced. Incentives should encourage staying in school and in the workforce, where people are acculturated to their host countries, much more than they do now. I note that the very successful acculturation of immigrants to the US throughout almost all of its history happened in times when, for the most part, he who did not work did not eat.

It’s not just welfare policies, it’s labor policies too. Europe in general and France in particular have extremely tight labor policies committed to preserving the status quo that strangle dynamism in the cradle. Supposing the social safety net were scaled back dramatically, sending immigrants en masse into the workforce, it would be very difficult to fit all of them into it given that labor policies are what they currently are. Because firing is so difficult, hiring is a big risk and is undertaken at much less than its natural level. Many workers, especially unskilled immigrant workers, don’t (yet) have the productivity to justify being paid very high minimum wages and aren’t legally allowed to contract to work for less. (Thus the artificial need for the welfare state.) This is bad for everybody who isn’t part of the protected classes, and it prevents acculturation of newcomers.

The obvious rejoinder is that these policies exist for the benefit of current Europeans, though the points still stand. The discipline of interacting with other people in productive ways is good for immigrants and for natives, and the disincentives to do so in overly intrusive policy systems affect both immigrants and natives.

Of course, this isn’t to suggest that the immigrants should completely abandon their traditional cultures. One of the most attractive things about American culture, for example, is the mix of influences from all over the world. But cultures that are successful are successful due to widespread tacit agreement on very basic, nonsectarian things. These are the things that productive interaction teaches and reinforces and that too much government assistance doesn’t.

The effect of this would be to reduce the terrorist recruiting pool very sharply, even holding violence in the Middle East constant. Of course, it would not be eliminated entirely. Short of incredibly draconian police state measures nothing will, and I think the argument against the draconian police state doesn’t have to be restated here.

International “anarchy”

In academic discussions about anarchy, the condition of having no government, one often hears comparisons drawn to the international situation that currently obtains in the world. Internationally, there is no authority that controls states. True, the United Nations and other organizations do some of these functions, but their enforcement powers are limited and they do not really qualify as governments.

This comparison has always made me uneasy. States do not behave like people. A state’s decision-making process involves many people with conflicting purposes fighting and bargaining for some kind of consensus position that represents what the state “decides”. Not only do states not have information analogous to what an individual decision-maker has when weighing potential choices, but the people responsible for the decisions do not bear the costs of choosing A over B. Taxpayers, businesses, soldiers, invaded populations, etc. bear the costs of state decisions.

I usually get the sense, too, that this is meant as an argument against anarchy. After all, when the United States government decides to invade a non-threatening country, i.e. when individual decision-makers who form part of the United States government decide, there’s really nothing to stop them. This could be a good thing in some situations, but it’s generally thought of as a bad thing (including by me). By analogy, anarchy among individuals would result in the strongest person doing whatever he wants and the weakest just having to deal with it.

But, as I’ve said, this analogy is not very useful. When George W. Bush or Vladimir Putin decide to invade a country, they personally don’t bear any costs. If you’re paying, they’ll have the filet mignon. In the standard denotation of anarchy, individuals reap the benefits and bear the costs of their actions. Comparing the actions of individuals with the actions of groups of people who make decisions for others obfuscates more than it clarifies.

B.H. Liddell Hart (unintentionally) on unintended consequences and capital non-homogeneity

I just picked up B.H. Liddell Hart’s The German Generals Talk at a used book sale, and reading the first sections I found two interesting passages to discuss here.

First, the author recounts some key ideas from a book by Hans von Seeckt, the man most responsible for the shape and organization of the German armed forces in World War II. The book was published in 1928, five years before the Nazis came to power. In one paragraph of interest he writes how Seeckt, influenced by the wide open spaces on the Eastern front, emphasized small and highly mobile forces over large masses on conscripts. A few pages later:

At the same time a brief period of compulsory military training should be given to all fit young men in the country, “preceded by a training of the young, which would lay less emphasis on the military side than on a general physical and mental discipline.” Such a system would help to link the army with the people, and ensure national unity. “In this way a military mass is constituted which, though unsuited to take part in a war of movement and seek a decision in formal battle, is well able to fulfil the duty of home defence, and at the same time to provide from its best elements a continuous reinforcement of the regular, combatant army in the field.” It was a conscript levy of this kind which filled the bulk of the Germany infantry divisions in 1940. They merely followed up the decisive armored spearheads, and occupied the conquered regions. Later, as their own training improved, they were available to expand and replenish the striking forces in the way that Seeckt had foreseen.

Does the concept of unintended consequences come to mind? Surely Seeckt did not have in mind a Nazified German youth population such as would peak between his own death in 1936 and the invasion of Poland in 1939 and would form the backbone of the war effort on behalf of a genocidal totalitarian regime. In retrospect, however, it’s hard to see how it could have been otherwise; this was half of the recipe for an aggressive dictatorship awaiting a dictator to supply the other half. Likewise, this kind of pre-military training also existed in the Soviet Union and its satellites. The main reason it was not widely used for war was that military technology had changed so much after World War II.

There is a second point about this passage: one man’s unintended consequences are another man’s mission in life. The Nazis were very dedicated and methodical about incorporating Nazi principles and organization into the life of German youth. If they had had to build from scratch, who knows how long it would have taken? As it happened, they were able to subvert or absorb a large number of existing organizations for their own purposes. The fact that Germany’s top military thinker of the 1920s had laid out a blueprint for them was nothing but welcome to them.

Second, the unintended consequences of the Versailles Treaty:

The triumphs of German tactics and of the German armoured forces in the first two years of the war cast an ironical reflection on the measures taken to disarm the defeated country after the previous war. Materially, they proved effective. For the numerous evasions that German military chiefs practised were on a petty scale, and in themselves amounted to no considerable recovery of strength. Germany’s actual progress in material rearmament constituted no serious danger up to the time when the Nazi Government openly threw off the restrictions of the peace treaty. It was the hesitancy of the victors after that time which allowed Germany again to become formidable. Moreover, an important result of her forced disarmament was to give her a clear start, by freeing her army from such an accumulation of 1914-1918 weapons as the victorious nations had preserved—a load of obsolescence that tended to bind them to old methods, and led them to overrate their own strength. When the German Army began large-scale re-armament, it benefited by having more room for the development of the newer weapons suggested by a fresher current of ideas.

The development of such fresh ideas was, in turn, helped by another of the measures imposed by the victors—the suppression of the General Staff. If it had been left to carry on in its old form, and its old cumbersome shell, it might have remained as routinely inert and overwhelmed by its offices as other General Staffs. Driven underground, its members were largely exempted from administrative routine, and impelled to concentrate on constructive thinking about the future—thus becoming more efficient for war. Any such military organization can be destroyed insofar as it is a physical substance, but not in respect of its activities as a thinking organ—thought cannot be suppressed.

Thus the net effect of the sweeping disarmament of Germany after the First World War was to clear the path for the more efficient modernization of her forces when a political opportunity for re-armament developed. Limitations on the degree of modernization were due more to internal conservatism and conflicting interests than to the external restrictions that had been placed on her.

Obviously, if the victorious Allies could have foreseen these consequences in 1919, they would not have written the treaty the way they did. Alternatively, if they had realized that capital is not homogenous, they would have written a different treaty as well, one that recognized the importance of ideas—about strategy, tactics, organization—and not just physical things an advanced nation can rebuild.

Wise words from Richard E. Wagner

From To Promote the General Welfare: Market Processes vs. Political Transfers, p. 56:

Whereas instances of policy failure are commonly attributed to ignorance or unforeseeable events, those failures may often be an understandable and predictable outcome of prevailing institutions—either as the intention of policy or as the by-product of a separate intention. Policy failure has often been attributed to mistakes and ignorance, but it might rather be the result of the rational pursuit of interest and not really a failure from the perspective of those whose interests are controlling the choice at hand. [emphasis mine]

I think something along these lines every time I hear somebody proclaim that the War on Drugs, some instance of foreign intervention, or a government department or policy is a failure.

Simmons on military expenditures in theory and practice

Returning to themes I discussed in two previous posts, The Necessity of Military Inefficiency and Terrorism: the Perfect Enemy, here are some words from Randy Simmons:

Providing more than optimal amounts [of public goods] will be encouraged by certain citizens who place higher values on having more of particular public goods, not because they enjoy consuming the goods, but because they supply resources purchased by the government to provide the goods. National defense offers the most conspicuous and costly example of the vested interest of suppliers—the armed forces, labor and management in defense industries, stockholders, and those who worry greatly about some foreign power. These citizens gain substantially by having larger defense budgets. Furthermore, they have the advantage of superior political resources for enacting larger budgets. As the suppliers of defense they can shape the demand curve for their own services to a considerable degree—a power not often granted not obtained by private suppliers operating in private markets. Further, the coalition of interest groups, the Pentagon, and Congressional committees—what journalists and political scientists call an “iron triangle”—is able to inflate budgets and allow cost overruns that nearly defy the imagination. A nine-dollar hammer costing the government hundreds of dollars is only one of many dramatic examples of outrageous defense billing. But more important than shocking technical inefficiencies are the welfare losses, losses that go beyond the legalities of pricing and contract oversight to fundamental decisions about how much is enough defense.

Misallocation through excessive expenditures on defense is hardly the only form of waste; others include misallocation in the mix of defense programs and resources. Given pressures for increased expenditures, we should anticipate that too many people will be hired, and that they will have time on their hands. We should also expect what every veteran knows and laments—that personnel skills will not be neatly matched with job requirements. Although a powerful tendency exists to spend more on “hardware” than on salaries, positions will be upgraded and oversupplied. We have one-fifth the forces of World War II, for example, but we have many more generals. …

From Beyond Politics, pp. 117-118.

The War on Terror and the normal behavior of government agencies

As a follow-up to a previous post on the subject, I have a few more words about terrorism. Before, I discussed a few of the features that make terrorism the perfect motivation for war from the viewpoint of the state. I alluded to one but did not say enough about it. That feature is how it’s self-sustaining.

It was pointed out several years ago by many people on many sides that every innocent Afghan or Iraq killed by American might would only spur ten more into anti-American action. The same applies to drone strikes in Yemen or Pakistan today. The stupidity of the Department of Defense and the CIA exasperated all the anti-war people*—to think that they would do something so obviously bound to create more enemies!

Anyone familiar with public choice should not be surprised. Politicians and bureaucracies always try to perpetuate and extend their influence and power. Why would the CIA care that it is creating more enemies? Terrorism is the perfect justification for the boundless expansion of the intelligence-military-industrial complex’s budgets and mandates, so why should they try to put themselves out of a job?

Remember that the US government financed the training of the mujahideen during the Soviet war in Afghanistan and provided their weapons. Only the most hopelessly naive could doubt that the CIA must have been on the ground as well. Years later, out of that movement would arise Osama bin Laden, leader of al-Qaeda and the most wanted man in the world. The new movement of which he was a large part would be the next great enemy.

In retrospect, it might seem short-sighted for the US IMI complex to have supported the mujahideen—and it is, from a regular person’s point of view. But from their point of view, it’s like a gift that keeps on giving.

I stop short of saying they intend for this to happen. All government agencies have a tendency to focus on the very near term, and the rise of a new world-class enemy is many years in the making. But surely there are honest people inside the IMI complex who saw what the rest of the world saw, that they were only making more enemies? We have every reason to believe this idea was raised and considered. We know that if so, the leadership decided it wasn’t a good enough objection to stop any of the various US government war measures. Would that have been because they didn’t think it would have a big impact, or because that big impact will lead to many delightful tasks for the IMI complex in the future?

I want to emphasize than even though I disagree with most of what they do, all of those agencies contain honest people who truly believe in keeping Americans and possibly even foreigners safe. The problem with government agencies like these is that it doesn’t really matter what the motivations of the individual workers are; all of their efforts are directed, whether they like it or not, towards the ends that the leadership chooses. And we already know the worst rise to the top in government.

At the end of the day I can’t say firmly that blowback is a feature, not a bug. But there are reasons worth considering that it might be so.

* Back before most of them revealed themselves to oppose only Republican-led wars.

Terrorism: the Perfect Enemy

I’ve been kicking an idea around lately, and since Lucy Steigerwald at Reason beat me to it, I thought I’d finally throw it out there.

The fall of the USSR was devastating for the US intelligence-military-industrial complex. No longer was there a mortal enemy with fanatically devoted 10-foot-tall bulletproof soldiers to justify their existence. Iraq was a temporary solution—the real long-term enemy of the future had to be found. The misadventures in the former Yugoslavia were barely a blip on the radar.

9/11 gave them everything they needed. To the intelligence-military-industrial mind, terrorists are the perfect enemy. They have power bases in certain countries—so the regular military still needs more money all the time—but they also operate in small cells under every rock on the planet, so the intelligence community also needs more money and more power all the time.

It wasn’t just the national-level organizations. I’m sure that every police officer at every level of law enforcement in the United States has been told to keep an eye out for terrorists. DHS grants flowed like wine before the ink was even dry on the Homeland Security act. Local police use these grants to outfit SWAT teams and buy armored cars which almost never see action against terrorists. Their primary function is as tools in the second Prohibition.

In the name of fighting this faceless, formless enemy, the FBI and CIA have been carrying out secret operations, the scope of which is top secret, and which the few details that have emerged have demonstrated to be consistently illegal. No matter, combating terrorism is as adaptable a mandate as can be found. The courts routinely defer to them even when their conduct would shock and appall a judge before 9/11.

In the name of fighting this faceless, formless enemy, the Department of Defense has taken hundreds of thousands of well-intentioned young Americans and used them to extend the US sphere of influence by all manner of brutal means. The nominally private parts of the intelligence-military-industrial complex don’t just happen to have money raining on them from the sky; that’s not a bug, that’s a feature. The fact that the presence of the US armed forces creates resentment is not a problem at all—I’m not saying they’re banking on it, but the world would look just about the same if they were.

Because “we’re at war” with an enemy that can never really be identified, much less defeated, the Executive Branch has usurped power undreamed of by the cruelest and most maniacal Roman emperors. The courts consistently find that because “we’re at war” the Executive Branch should have only the lightest, most flexible, most nominal constraints on its actions.

As if to prove me right, a recent news story had “defense analysts” proclaiming that despite the fact that Al-Qaeda is now almost defunct, they’re more dangerous than ever. This was just in time for Obama to sign a new agreement with Afghanistan’s Hamid Karzai on the long-term future of Afghanistan, slightly winding down the full-frontal military side of the conflict but in no way affecting FBI/CIA plots, including domestic agents provocateurs and foreign drone strikes that target people who merely appear suspicious to drone operators.

This is an enemy the US government and its friends will be obsessed with for as long as possible—probably at least for the rest of my natural life.

How many sides does a war have?

There’s a news story making the rounds right now about Staff Sergeant Robert Bales, who allegedly shot 16 Afghan civilians in cold blood, burned some of their corpses, and is now back in the United States to stand trial. Details are sketchy and rather suspect, but I suppose time will tell. [Early reports based on eyewitness accounts mentioned multiple shooters, and this is a continuing possibility, but for the purposes of this post I will assume just one.]

Almost as soon as the ink was dry on the stories, other stories came out saying that Bales, who hadn’t yet been identified, had some kind of head injury recently and may or may not have been suffering from PTSD. Then a story about how he saw a comrade lose a leg the day before the shooting. US officials—anonymously, of course—have said recently that Bales had alcohol and/or domestic issues also clouding his mind, though his attorney denies this.

I have no doubt that a great many of the soldiers who were and are in Afghanistan and Iraq (and probably elsewhere) suffer from PTSD or related conditions. This is supposed to be a mitigating factor, and in fairness if I were a military judge or prosecutor I would have to consider it. Any human being would be put on edge by seeing his comrades wounded or killed. I’ll be surprised as hell if Bales’ probable eventual sentence isn’t considered in view of this fact, assuming he even goes to trial. By all still-developing accounts Robert Bales was not at all the psychopathic type. Something happened to him.

It’s telling that the military judicial system is so quick to use this mitigating factor on only one side. It applies to US forces but it does not apply to combatants on the other side. A US soldier commits some war crime under the influence of combat zone stresses, and they frequently lighten or forgo his punishment. (See these people.) An Afghan who sees his friends or family killed and fights back as a result gets no such consideration. If he is captured, he can expect no sympathy with that kind of defense. If he details to his captors how for ten years he and all his region have been living in fear of being rounded up on the flimsiest pretext to disappear into a CIA black site or be killed, how one day his cousin’s wedding was bombed from the sky, and how afterwards the rescuers were also bombed, and how the next day he picked up a weapon and fired it at the occupying forces because he was so bent by fear and rage—well, get that picture in your mind, and try to imagine how valid his captors will consider that reasoning.

One might object, but we’re at war! We don’t have time for judicial niceties. We didn’t ask individual German soldiers their stories as we were marching into Germany. That’s true. But there were other differences. They fired at Allied troops, sure, but when they were captured they weren’t treated like criminals, they were treated like prisoners of war. They were held until the war was over and then released. Maybe they had killed Allied troops, but that’s part of war. Nowadays, no matter how frequently political leaders insist that “we are at war” we don’t treat the other side like they’re at war. They are terrorists, militants, insurgents, or some other term with criminal connotations. They can be tortured and held indefinitely. There’s no mass release of combatants in the future, and it’s quite clear that many people currently held were not even combatants. The military can never be sure about the people it captures: some armed resisters are let go, and some non-combatants are swept up. The uniform no longer divides the people they’re after and the rest. There is really only one army in this conflict.

This ensures both an endless supply of Afghan civilian hostility and endless fighting. I’m sure some elements of the US elite want exactly this, but most Americans, including most soldiers, do not. For those who’d object that it has to be this way because Afghan combatants can’t be treated like soldiers, I’d say they’re almost there. I’d say they don’t form a traditional military force, and therefore the US government shouldn’t use its traditional military force against them. This is not the 20th century. War as we used to know it is largely a thing of the past. Let it go.