Categories
Conflict & disaster Liberty Politics & government

[2132] Of isolationist, non-interventionist, libertarian foreign policy

I am not particularly warm to Obama due to his economic policy. Shadows of protectionism and greater government intervention lurk somewhere. His foreign policy however is a cause to celebrate. The Obama that spoke in Oslo as he delivered his Nobel Prize speech is the Obama that I like. His speech on the need of war, of just war, and peace, was moving. Not only was it moving, it makes sense and addresses the nonsense of eliminating war as proposed by some in the anti-war movement. He backed up his assertion by acknowledging the existence of evil in the world. And evil must be confronted.

Obama is right when he said that there is no glory in war. The same sentiment can be felt here in Sydney at the ANZAC War Memorial. The memorial is not there to glorify war but rather, to honor sacrifices of men and women. It is not glorious because the human suffering it brings is immeasurable.

Yet, when a war is fought to defend principle of liberty, when tyranny threatens to rob individuals of liberty for any reason, a war in the name of liberty is unavoidable. Peace under tyranny is insufferable and peace under such condition is not one a free person should aspire. Better conditions are attainable. Of course, these better conditions can be attained relatively peacefully but when all routes are exhausted, it is really hard to condemn the use of force.

How true it is when Obama said that a “non-violent movement could not have halted Hitler’s armies.” Negotiation failed. Britain could not pacify Germany under the Nazi by acquiescing to the latter’s occupation of Czechoslovakia. No. Germany wanted more. The only peace Hitler’s sought is a peace incompatible with the idea of freedom. He wanted submission. Thus war was inevitable.

This aligns perfectly to libertarian principle of non-aggression axiom. Force cannot be not used except in self-defense.

Expanding this principle which is meant to cater individuals is however problematic. The easiest is to accept, however flawed such consideration is, a state as a person with rights to some extent. In doing so, it rationalizes the concept of self-defense vis-à-vis the state. That comes with it the idea of state sovereignty, just as individuals are sovereign over themselves.

It is flawed, because it ignores violation of individual rights outside the boundary of the state, where the victims are non-citizens, whereas individual rights, individual liberty require defending, ideally everywhere. The legitimization of use of force only in the name of self-defense in terms of the state necessarily dismisses any call of action for any oppression of liberty in foreign land.

A digression is necessary lest confusion reigns. Such non-aggression axiom for the state does not in any way prevent the state or individuals from criticizing such suppression in foreign land. Rather, the state cannot use force to prevent that oppression.

The logical path to adoption of non-aggression axiom to the state is one of non-interventionist, or even, in a restricted sense, isolationist. It is isolationist because all tyrannic developments in the world outside of the state’s boundary unrelated to the immediate security the state is given a blind eye. The United States did this prior to World War II. While such isolation has its root in the Jeffersonian ideal, which is clearly adversed to entangling alliances, the effect is the same. The same isolationist ideology brought upon the failure of League of Nations. The era of the Great Depression further demonstrated the far-reaching influence of isolation where the devastating Smoot-Hawley Tariff Act was put in place in the name of protectionism although the non-interventionist in libertarian context is only one involving force, not trade. Ron Paul explains this beautifully during his campaign in 2007 as a Republican nominee for the office of the President of the United State of America.

Such isolationist position held by the United States only truly evaporated after it was clear to it that it was very much part of the world, when Japan successfully attacked Pearl Harbor in 1941. The US has since become a global power with interventionist tendency. Perhaps, too much interventionist tendency.

I am aware of the problem of isolation and non-intervention arising from non-axiom theorem much, much acutely. I struggle with it because while tyranny is the great enemy of liberty, fighting tyranny everywhere can be exhausting, especially if one considers economic reality of scarcity. Furthermore, that does not answer the need, from time to time, to react, especially with legitimate force, against atrocity like what happened in Rwanda or Bosnia. Or, maybe, just maybe, even Iraq.

Iraq is a problem to me. I began with opposition to the war and now but I am unsure if my opposition is entirely right. Saddam Hussein was a dictator and he was ruthless one at that. Former United Kingdom Prime Minister Tony Blair in an interview not long ago said that even without weapon of mass destruction, he would have gone to war anyway.

My oppostion to the war was because of the flawed rationale of the war. Iraq did not weapon of mass destruction — never mind the controversy on the term itself — when the accusation was made. The failure of the United States and its allies under the infamous Coalition of the Willing to find those weapon is enough to demonstrate the folly of it all.

Yet, if the rationale — made as the main rationale and not as a side rationale as it was thrown in support of the war — had been against the murderous act of Saddam Hussein’s regime, I would probably, under libertarian condition, have supported the war throughout, realizing full well of its violation to state sovereignty. Call it splitting hair but I take great concern on rationale, even if the result is the same. Though I may resign to the convenience of Mao’s black cat, white cat from time to time, the end does not always justify the mean.

Regardless of the issue of state sovereignty, the economic reality of scarcity does bring this into question. We simply cannot fight tyranny everywhere, every time. Going to war to fight every tyranny is unrealistic because it is expensive in many ways including those beyond monetary consideration. One of this consideration is the disturbance of equilibrium. Fighting tyranny everywhere every time may encourage too much lawlessness that brings instability, even if stability means oppression. This, as it should be noted, a contradiction to the idea that there can be no peace if there is no liberty. This in fact, returns us back to non-interventionist policy while, largely, ignoring tyranny outside of our boundaries. Yet, another contradiction. In my humble opinion, while one seeks to smoothen out contradictions, the least problematic contradiction should be the favored one until a solution is found to take away the contradiction and be supremely consistent logically. As far as those oppression are outside of our boundaries and unrelated to us with us having our liberty secured, non-interventionist maybe the way forward.

Perhaps, when Obama mentioned Germany, he was alluding to Iran. The issue of Iran and nuclear proliferation was raised. Making parallel out of Germany and Iran maybe too much because it is always easy to judge something in hindsight. While the story of Germany has past, the story of Iran has not and there is no certainty that Iran ultimately seeks war. For Germany during World War II, non-aggression axiom was violated. Iran has not crossed that line yet, if it would at all. We should not resign to fatalism.

Again, we simply cannot fight tyranny everywhere, every time. At least, not under current global institutions.

In the setup of a state, fighting and correcting wrongs, although not everywhere and every time, is possible in many places and many times through the setting up of a credible judiciary and arms that enforce rule of law in terms of liberal democracy. Perhaps, if the same rationale for the state is expanded to the global level, the same success of the state can be emulated at the global level.

Obama, rightfully, mentioned this in his speech while he also rightfully said he does not have all the solutions. He spoke of institutions. And he gave the United Nations as an example; not a shining example but a success example to some degree nonetheless. There is a possibility that humankind can face the problem of evil more successfully than any god’s had, and not resort to Dr. Pangloss’ ridiculousness. As some phrase that I heard a while ago goes, the affairs of men are too important to be left in the hands of the gods, anyway.

This is a way circumvents the problem of non-aggression axiom for states and confronts the problem of evil by having a third, supposedly impartial party doing so.

This however is a slippery slope for libertarians — and even others — for such argument opens to the path of global government. That, is a monster much harder to fight against when the government is illiberal. Such monster would turn the global anarchy we are in as an utopia.

It would be alright if the global government is a government based on a liberal constitution protecting typical individual rights of men and women and everything in between but judging the world as it is unfortunately, with merely crass majoritarian democracy and the global government, I am uncertain how long such government’s liberal constitution would last, assuming it would begin with a liberal constitution, given the illiberal setup of a majority of states, if these states should be represented to a global legislative assembly without veto power. The farce of the United Nations Human Rights Council is enough a proof to this concern of mine: how could countries which have utmost contempt for individual rights, be the standard bearer of human rights?

If it exacerbates the problem of evil, then it should be rejected.

Categories
Economics

[2104] Of the government continues to expand under the 2010 federal budget

As a libertarian that I am, I can only sigh after reading the 2010 federal budget speech delivered by the Finance Minister.

I begin from a point deep in the realm of skepticism. I never actually believe any government in Malaysia — now or in the near future, neither Barisan Nasional nor Pakatan Rakyat — would largely retreat from the marketplace to leave the market to its own device in most cases. There are simply too many political considerations that go against the notion of free market here in Malaysia.

Firstly, businesses are politically-connected to make the government pro-business. In fact, the government itself is involved in businesses through its oligopolies to crowd out private initiatives. This has not even considered the erased line between the government and Barisan Nasional, where public properties are used for personal and political gain. For the government to touch itself openly is inevitable. That is the likely result in the case of conflict of interest, which is hardly surprising at all. There is no decency anymore these days.

Secondly is the developing entitlement mentality. Fuel subsidy is a right. Free highway is a right. Scholarship to universities abroad is a right. Bonus is a right. With such mentality and with both Barisan Nasional and Pakatan Rakyat racing on this front, government expansion is the only logical way forward. We have seen how the Islamization race between UMNO and PAS ended. It does not take a leap in imagination to picture the end result of the race between Barisan Nasional and Pakatan Rakyat to the left.

Early in the speech, the Finance Minister mentioned the scope of government intervention and it is wide. In his own words, the government ”will transform Malaysia through a comprehensive innovation process, comprising innovation in public and private sector governance, societal innovation, urban innovation, rural innovation, corporate innovation, industrial innovation, education innovation, healthcare innovation, transport innovation, social safety net innovation and branding innovation.”

That is a mighty goal, especially given that many governments perform poorly in the area of innovation when put head to head with the free market.

No matter. The government knows best and god saves us all.

Regardless of the budget, a new industrial policy that necessarily calls upon government intervention appears imminent. The talk of a so-called new economic model or really, a central planning exercise with new emphases has been going on for months now. Different goals, same paradigm.

The best symbol of paternalism available in the budget that a layperson can identify with is the proposal to charge an annual lump sum fee on credit cards. The Finance Minister claims that this is done to promote prudent spending. It is, as if, all individuals are doomed to spend all of their money dry.

Never mind that the government itself is spending imprudently. I wonder if an individual with his or her own money would buy a laptop priced at RM42,320. Whatever the answer, we know that some government institution has done that. Open up the auditor report. Year in and year out, it is the same old story. Yet, individuals have to suffer paternalistic attitude from a hypocritical government, which is convinced that individuals cannot manage their finance.

On the contrary, the government should really worry about its own financial status first rather than trying to tweak individual behavior, from savings to spending. Its revenue is going down and its expenditure is growing, the abnormal spending caused by the stimulus package notwithstanding.

The government seems to be addressing that problem by introducing goods and services tax later in hope to increase its revenue; not in 2010 but maybe in 2011. I personally like such consumption tax, but only if it neutralizes amount of theoretical loss due to income tax. To have both is to reduce welfare of individuals. Other than that, the government is even preparing to rents out some of its premises to the public, among other things.

The reform effort at the fuel subsidy regime is likely to help but it is unclear how that would be effective in rectifying government finance in light of expanding roles of government in the country.

The size of government expenditure — regardless whether it is caused by corruption, incompetence or by simply misguided conscience to help — needs curbing, if the problem of government finance is to be effectively addressed.

With a little luck, such retreat will give the private sector more space to flourish and contribute to government coffer, in the long run.

Yes, in the long run, we are all dead as Keynes wrote. Remember however that we are here now because of quick fixes — get the government to do it.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

First published in The Malaysian Insider on October 27 2009.

Categories
Economics

[2100] Of credit card service charge; the government should look into the mirror

I am in no position to give full opinion on the proposed 2010 federal government budget tabled earlier today. That is mostly because I need to read the whole text first. Nevertheless, I feel strongly against the idea of imposing service charge on credit card; as stated by the Finance Minister, the purpose of the charge is to curb reckless spending by individuals.

According to the budget, RM50 is to be charged on main credit card while RM25 is to be charged on each additional credit card. I would assume the fee will be charged to new users of credit cards during application period. I am unsure how preexisting users will be charged.

But no matter because as long as it is charged as fixed amount annually, here are my first thoughts that lead me to disagree with it.

Firstly, the charge is too small to be significant and on top of that, it is a yearly charge. If a person cannot afford to pay RM50, I would think that the credit card company would notice the financial status of the user and refuse the user the card. Therefore, the effectiveness of the charge deserves skepticism. If credit card companies do not filter their customers, then the companies deserve to go under.

Secondly, this is a blanket policy. Individuals with good and bad spending patterns are being punished. Of course, it is just RM50 but it is the idea of being punished for other individuals’ stupidity that makes this maddening. Recklessness should be punished while prudence should not. The free market already provides for that mechanism: bankruptcy. It works superbly. But the government has other idea it seems.

Thirdly, if RM50 is significant, which I really doubt, it mainly punishes those in the middle income bracket and more so of those in the lower income bracket who use credit cards to smoothen their consumption pattern instead of committing “reckless spending”.

Fouthly and more importantly, it suggests that the government knows better than the individual in managing their finance. Can you say, paternalism? Is the era of government knows best over? I think not.

Finally, the intention of introducing the charge, so reasoned the Finance Minister, is to curb reckless spending by individuals. To that which I will say, the government should look into the mirror.

Categories
Economics Liberty

[2099] Of Ostrom’s Prize in Economics, commons, coercion and libertarianism

Libertarians celebrate two winners of the Prize in Economics of whom one of them is Elinor Ostrom. That is because her works show that commons can be managed efficiently by groups of users rather than the State. I am unsure, however, if libertarians, especially the free market purists quite absorb the full implication after accounting for footnote associated with Ostrom’s works.

Her findings do very little to expunge coercion from solutions relating to large tragedy of the commons. This fact, through my observation, is what many libertarians have missed.

On purists, I know, I know, I have been accused as a purist myself but if I am a purist, then you are in for a big surprise at how other people can be purer in this thinking that me. These purer purists, if I may say so, are more anarchist than libertarian, with their hostility against the State bordering madness. I may sympathize with these anarchists however but I am convinced that the state of anarchy is unstable and in fact, detrimental to individual liberties. I am becoming more convinced of that position as I finally begin to read Robert Nozick’s Anarchy, State and Utopia, further settling in the minarchist pool of libertarians.

Many, I have seen, tend to celebrate one conclusion of Ostrom’s work but tend to ignore the other consequence that comes from the footnote to the celebrated conclusion. Most unfortunate, that footnote does not eliminate the case for intervention. Such intervention or really, coercion, may not originate from the State but by groups of individuals nonetheless.

A group of individuals should really be no different from the State if there is coercion. Coercion is really the key here and it is not whether it is the State or not. This is what most libertarians, when discussing this, have overlooked. To miss it is to miss the entire point of libertarianism.

When it comes to commons, I have long accepted the need for government, or any kind of intervention for that matter, for fear of tragedy of the commons occurring. I first accepted it when I first learned of it as an undergraduate in economics. Concern for tragedy of the commons, is perhaps, the only remnant of environmentalist thinking that remains with me.

That is the reason why, if I want to differentiate myself from other libertarians, I identify myself as a green libertarian. The green symbolizes my concern for market failures, which is what tragedy of the commons really is.

Market failures here are not as left-wingers tend to define it, which is more of rhetoric wrongfully attacking free market principles through mischaracterization and misleading definition but rather it refers to the economic definition, which is when there is a large difference between public and private costs, or more concisely, when there is externality. Examples include emissions of carbon or harvest of the ocean. It is for this reason too that I am largely supportive of Pigovian taxes: I definitely would like, for instance, to see fuel subsidy in Malaysia be replaced with carbon tax.

While I am admonishing libertarians here, I too made a mistake of celebrating Ostrom’s work prematurely, thinking that it solved my problem. I am well aware how hard it is to reconcile my concern for market failure with free market libertarianism that I hold. So, I was happy to see Ostrom seemingly offering a solution to me by stating users of commons do spontaneously organize themselves to prevent tragedy of the commons. Alas, upon further reading, I realized that I initially failed to comprehend the full conclusions by overlooking the footnote. And I do think libertarians who are celebrating Ostrom are misreading her conclusions by not reading the footnote too.

Traditional solutions to tragedy of the commons do not fall within the compound of pure free market libertarianism that completely intolerant of government intervention save for the classical liberal purpose of the state and that is the protection of individual negative rights. Such solutions typically involve the allocation or assignment of rights to users of resources of commons. In other words, to price such rights to internalize externality and then auction to it to achieve allocation efficiency.

In commons with multiple claims on it, some entity — government or some local body — has to be the final arbitrator for allocation of rights purpose and that will require coercion. These rights may be in form of permits that expire regularly or outright privatization (privatization is attractive but it does present complications; for instance, how do you privatize the atmosphere with respect to climate change? Clearly, enforcement of such rights is impossible, at least with current technology). Ostrom simply discovers that local groups may be better managers of the commons than government. She does not specifically say that it is will be done voluntary.

Yes, these local bodies can be voluntarily formed by users of commons. Self-organization out of spontaneous order which of voluntary in nature can be achieved but as stated in a write-up by the Economic Sciences Prize Committee of the Royal Swedish Academy of Sciences[1] and Ostrom’s article in Science Magazine[2], size of users and engagement time length matter, among others, affect the success of having such spontaneous order. There are multiple other factors but I am in the opinion that these two are the most important. The bigger the size, the harder it is to agree on voluntarily act to prevent exhausting the commons and make everybody worse off. The shorter the period of engagement, the harder it is to reach to an agreement.

The issue on number of users is really a matter of cost. As in the case of climate change, which is really the biggest common of all, bringing 6 billion individuals together is clearly unfeasible. Consider also the fact that even with hundreds of representatives sitting together in one hall, an agreement is hard to achieve. The planned climate summit in Copenhagen organized to find a replacement for the failing and expiring Kyoto Protocol is widely expected to fail.

On top of this, monitoring activities are costly. Monitoring is important because there is a strong incentive to — out my lack of creativity in selecting a word — cheat in the case of tragedy of the commons. Monitoring and enforcement are important in discouraging cheating.

On time length, it is a matter of repeated game. To make it more explicit, it is a repeated prisoner’s dilemma where cooperation is clearly a better option for both to failure to cooperate but there exists strong incentive to not to cooperate. Repetition of that game with the ability to communicate could bring about cooperation but again, that is highly dependent on the size of participants. Ultimately, achieving cooperation may take too long a time before the system collapses.

Further strengthening the argument, status quo effect is strong. Look at the Israeli-Palestinian conflict. Such conflict can be modeled as hawk and dove model, which is essentially another form of prisoner’s dilemma. They could cooperate and skip the deadly conflict, but they do not. In a game like this, it is crucial for trust to be built at the very beginning.

Trust simply takes a long time to rebuild once broken, if it is to be rebuilt at all, if the first step proved to be disastrous. This, known as tit-for-tat game, is one of the basic important lessons of game theory, in my humble opinion.

Given that, solving the problems of the commons through voluntary means, are likely hard if not impossible. Thus, intervention is still required to introduce market instruments like quotas, permits or taxation. Intervention may originate from the government, or some local groups but it is an intervention nonetheless, with not too implicit coercion demanding certain positive action, positive as defined by Isaiah Berlin when he differentiated between positive and negative rights.

If Ostrom is to be celebrated, then it is decentralization from government to local groups. That however should be mistaken as solving the problem of tragedy of the commons by voluntary means. Someone or something has to assign rights to users to commons. That means, the element of coercion, unfortunately, is still present.

That certainly does not solve my problem of reconciling concern for tragedy of the commons and free market libertarianism.

To summarize: it is a common and somebody or someone has to take control and assign rights to solve the problem of externality, i.e. tragedy of the commons. It does not have to be the government and local groups may be better manager but something or someone has to act as the assigner. And the footnote to Ostrom’s works indicate that it is hard to do so voluntary, save for, I think, localized commons. In the end, the element of coercion exists.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

[1] — See Scientific Background on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2009: Economic Governance. Economic Sciences Prize Committee of the Royal Swedish Academy of Sciences. October 2009

[2] — See A General Framework for Analyzing Sustainability of Social-Ecological Systems. Elinor Ostrom. Science Magazine. July 24 2009.

Categories
Liberty

[2095] Of in praise of trivial choices

It is easy to dismiss the triviality, for instance, of choosing a pair of high heels out of hundreds as excesses of modern life defined by free market. How does one sympathize with a dilemma of a purchaser who faces a petty option between consuming Coke and Pepsi?

Such inconsequential puzzles seem so shallow for it to be objects of attention at times when there are larger and more pressing issues that the society, or even the world, faces. So shallow and so trivial it seems that to defend it seems only so wrong. Yet, these trivialities continue to receive attention of great many people.

These have been derided as one of the excesses of a free world. There are simply too many choices that those choices divert precious attention from important issues.

Beware, however, of those calling upon such condemnation because it betrays an authoritarian tendency. If the condemnation sees execution, it opens an illiberal path for at the heart of the condemnation is a desire to apply strings to individuals. At its heart, there is distaste for liberty.

Choices, however trivial they might be, are crucial in the maintenance and enhancement of liberty in society. One perhaps may criticize this as overstretching an argument beyond its allowable elasticity. The band would snap before one could secure the point, as one may argue.

Yet, every little thing in life affects the psyche of individuals in society. Through this, the band can go farther than one would think.

In a society of illiberal culture, a majority of individuals born into it and raised by it would suffer from status quo bias, especially so for an isolationist society. Without effort or accident, they will acclimatize to unfree culture, unaware of the shackles that bind them down. They will be unaware of or suffer great difficulties in imagining choices that could exist, because it does not exist. For them, the limited choices they observe are the full imaginable choices.

In a society of liberal culture with full free choices restrained only by physical reality, just as a majority of individuals born into illiberal society, individuals will suffer from status quo bias. Unlike the illiberal society, the bias in a free society is a side with liberty as individuals have access or at least have knowledge of full choices available in their world.

It is here where choices are crucial in the creation and the maintenance of a free society, founded on non-aggression with respect to individual liberty.

Individuals familiar with full — mundane or exceptional, trivial or life-changing — choices due to status quo bias unconsciously impressed upon them by a free society will notice any disappearance of choices from their menu. From the awareness comes questions and from the questions, demands for the return of the disappeared options, if evolution within a free market is not the cause of that disappearance. If the free market is the cause of extinction of a particular option, then it must be that the individuals are willingly causing the extinction. That is a nature of the free market.

If the extinction comes from a diktat of unfree origin, the demands for the return of that particular choice will gather momentum, like an echo to an avalanche. It is so because acclimatization to full choices in itself creates sensitivity to elimination of choices. Free individuals will rise up to banish the diktat into a gutter, where all of things that resent liberty for whatever reason belong and restore the choices into the menu.

Familiarization to these little choices builds up awareness of larger choices. These larger choices are grand choices so well linked and easier related to the idea of freedom: freedom of conscience; freedom of expression; freedom of speech.

Willingness to defend these little choices translates into the willingness to defend these grand choices for executions of these little choices really are expressions of individuals’ personality. Without these freedoms, such little choices cannot exist. Yet, grand choices are so far removed from immediate life that it is hard for individuals on the streets to relate to it. Instead, freedom sees daily exercises through these little choices.

Each exercise of these little choices is another step towards grand choices. These little choices train individuals in making choices and there on, taking responsibility for their own life. The act of assuming that responsibility removes the need for a third party and reduces the possibility of tyranny by claiming their freedom. This collectively creates an environment conducive for the creation and maintenance of a free society. It follows that little trivial shallow choices deserve defense from ridicule.

Ignore those that condemn small little choices as excesses. Chances are, if in their heart is disgust for these small things, then they cannot stomach the exercise of grand choices. They condemn these little choices as excesses because their respect for individual liberty is limited. As soon as they have won the battle, the march from liberalism to tyranny begins.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

First published in The Malaysian Insider on October 5 2009.