Monthly Archives: September 2010

The Problem of Farm Subsidies for the Environmental Movement

“Free-markets” and “environmentalism” aren’t terms normally thrown together in conjunction these days. If you’re well enough in tune with various right-wing and free-market think tanks you will no doubt be aware of institutions like PERC (Property and Environment Research Center) which offer a free-market look at environmental issues. But all in all environmentalism, the green movement, and locovores are usually seen as the domain of the left, not the domain of the right or even those with a libertarian bent.

For that reason I was pleasantly surprised to meet a libertarian the other week who was quite interested in the concept of sustainable farming (in fact, her desire to one day run a sustainable farm influenced her towards libertarianism). A Political Science major at Boise State, she was quite knowledgeable about the ways in which government was, paradoxically, holding back the green movement in favor of large corporate farms.

Sustainable farming is the idea that farming today should leave future generations better off. It emphasizes environmental sustainability, animal welfare, biodiversity (many sustainable farms do not use any chemical pesticides), and so forth. In other words, it’s a popular buzz-word amongst the left and something you would likely hear tossed around casually at one of those hip downtown coffee shops that all the fashionable liberals like to frequent. Not that there’s anything wrong with that, of course. Sustainable farming is certainly a viable alternative to large-scale agribusiness, at least in theory.

Although one could no doubt argue back and forth about how efficient or realistic organic and sustainable farming really are, that isn’t the point of this post. As my libertarian friend went on to point out, due to the system of agricultural subsidies in the U.S. large, well established farming corporations are continually subsidized by the Department of Agriculture at the expense of smaller farms (many of which practice sustainable farming). As it turns out, the top 10% of the largest farms received close to 75% of all subsidies from 1995-2009. The USDA has shelled out close to a quarter trillion during that time period.

Aside from the fact that these subsidies lead to huge amounts of surplus agricultural products (inefficient use of resources) at taxpayer expense, they also directly destroy the livelihoods of third world farmers the world over. The U.S. Government, through its incredibly dubious “Food for Peace” program, buys this surplus food from U.S. farmers and sends it into third world countries at very low, discounted prices thereby ensuring small indigenous farmers are unable to make a living. The entire system is quite plainly awful.

But back to the subsidy’s effects on the domestic market.  What USDA subsidies do is not only encourage inefficiency through an ex ante declaration of market winners (those farms that get the subsidies), but they also ensure that Joseph Schumpeter’s creative destruction never happens. Creative destruction, remember, is a the idea that capitalism is constantly reinventing itself through the process of competition. Goods and services come and go; old businesses die while new ones are born, and so forth. USDA subsidies have the effect of maintaining large agribusiness while new, innovative farming firms (like those engaged in sustainable farming) flounder because they just cannot compete. It is not only a complete injustice- it is completely wrongheaded from an economic perspective. Not because sustainable farming is better than the traditional large-scale corporate farm, but because we don’t know which one is better. The only way to know is to let the market process work. If those subsidies are never removed, consumers will never know if my libertarian friend’s sustainable farm will be able to better satisfy their demands, as well as help the environment. USDA farm subsidies are neither fair nor efficient.

The Problem is Structural…Again

Over at the NY Times Economix page, the editors point to a new study by the Economic Policy Institute which makes the case that the state of unemployment today is cyclical rather than structural. Cyclical unemployment being the idea that unemployment exists because of a lack of demand in the economy. Structural unemployment, on the other hand, sees unemployment as arising because of a change in the structure of the economy (new products, sectors, and technologies requiring workers to move or learn new skills).

The authors of this study want to argue that the problem is simply one of demand. They recommend increased deficit spending to get the economy moving so that workers will be reemployed generally in the areas they used to work in. This is all fine and good, but only if you think the economy was following some natural trend line from 2001-2008 and the recession was just an event not at all connected to the housing boom that came before it. In other words, the problem isn’t structural if you think the economy was structurally sound during the housing boom years.

Is this is a realistic view? I would say no. One can argue about the causes of the housing bubble (low-interest rates, lax lending standards, global savings glut, etc), but one cannot argue that there was, indeed, a housing bubble.  Paul Krugman rightly points out that

The 2007-9 recession was driven by the collapse of a huge housing bubble, and the resulting financial fallout. The Fed couldn’t cut rates sharply, because they weren’t all that high to begin with; there couldn’t be a housing boom, because housing was already overbuilt.

Obviously houses don’t magically appear out of nowhere. To build houses requires material and labor. If houses are being overbuilt than we can only conclude it happened because resources and labor were diverted from other areas of the economy into the construction and manufacturing sectors. Notice that what was going on there was structural. People who would have worked in other sectors of the economy found themselves looking for employment in those areas of the economy connected to housing (obviously this isn’t the full story because hiring was taking place in plenty of other sectors as well).

Just look at wages and salaries of construction workers during the housing bubble:

That’s a pretty clear upward trend right there. Clearly, wages were being bid up which attracted workers from other sectors. More to the point, however, is the fall in construction jobs since the recession began. Employment in the residential building sector alone peaked at a little over 1 million jobs in 2006 but had fallen to a little over 500,000 jobs this last February. That’s almost a 50% drop. What the authors of this study are advocating for is for all of those people to wind back up in the construction sector, which is only going to happen with another housing bubble (at least for the immediate future).

Additional attempts at increasing aggregate demand through fiscal stimulus will only have the effect of maintaining the pre-recession structure of the economy. Goodness knows the Federal government is still trying its darndest to prop up housing prices. This is a recipe for disaster or, at the very least, a non-recovery that goes on for years to come.

Insanity and Criminality: Two Dilemmas

Suppose you were declared legally insane. Whether or not you have a mental illness does not really matter. Now suppose that during the course of your stay at an institution you are mistreated by the orderlies in any number of ways – starved, subjected to excessively harsh punishment, beaten, etc. Your experience, in short, is not a pleasant one.

You would not be entirely without recourse. You could complain to any number of the people managing the facility or you could petition the individuals or organization in charge of oversight. You could describe in detail to these people all the pains that have been inflicted on you. But who is likely to be persuaded? Those managing the facility are not surprised that you dislike being committed, and are naturally skeptical of anything you claim. After all, you’ve been officially declared insane. Those in charge of oversight are equally aware that an insane person is likely to say anything in order to be released. It is not hard to imagine a scenario in which you notify the proper authorities only to have their fears put to rest by orderlies who deny any such incident took place. Your abusers declare that the bruise on your head is simply the result of your clumsiness brought on by heavy medication.

In a separate hypothetical, suppose you were accused of a crime and subsequently arrested. Whether or not you are guilty does not really matter. Now suppose that during the course of your arrest you are mistreated by the arresting officer – unnecessarily beaten, tased, etc. Your experience, in short, is an unjust one.

You would not be entirely without recourse. You could complain to the police chief or head of the department or you could petition the individuals in charge of oversight (i.e., a judge). You could describe in detail all the pains that have been brought upon you. But who is likely to be persuaded? Those managing the police force are not surprised that you dislike being arrested, and are naturally skeptical of anything you claim. After all, you’re officially suspected of committing a crime. The judge presiding over the police brutality case is equally aware that a criminal is likely to say anything in order to avoid fines or jail time (or even just to get revenge). It is not hard to imagine a scenario in which you follow all the correct legal procedures only to be told that, based on officer testimony, everything that took place was legal. The bruise on your head was simply caused by you hitting it on the frame of the patrol car while the officer tried to put you in the back seat. You shouldn’t have been forcefully resisting.

It should be clear how these two scenarios are related:  your “recourse” only takes place within a system entirely constituted by people whose job it is to manage your behavior. Once you are placed in the system, your credibility is automatically less than those who are paid to run the system.

Of course, in the second scenario you have another option – notifying the press. Also, in many cases there is surveillance video or a dash cam to provide further evidence in favor of you, the abused. The advantage of having these is that they appeal to a wider audience, as it were. The public at large can put pressure on the system to help you get the justice you deserve. But the portion of the public that is reached by such methods is in a similar position as those in charge of oversight. That is, the vast majority of people – for very good reasons – hold criminals in utter contempt. This is not a bad thing; it just means that the average person is likely to dismiss accusations brought against police as trumped up nonsense.  After all, who wants to publicly side with the criminals against the police? (How many times, for instance, was it repeated, “Rodney King deserved it”? While King certainly wasn’t an alter boy, one hopes that in their heart of hearts the majority of Americans still believe in a little something called “due process”).

The big difference here between the criminal dilemma and the insanity dilemma is that to be declared insane requires a legal proceeding; to be arrested does not. Therefore the potential for abuse is far greater under the authority of the State.

On the other hand, you might be suspicious of me and dismiss this argument as the product of a criminal mind. Why should I be worried about constraints on the police if I don’t have anything to hide? Didn’t I get a speeding ticket once?

Conservatism as Foreign Policy

Last evening President Obama declared an end to combat operations in Iraq. Many commentators noted that this was a pretty dubious statement, but that need not concern us here. Before Obama appeared in the Oval Office, Sarah Palin posted this on her Facebook:

As Americans tune in to watch President Obama, it is important to remember the facts. He opposed the surge. He predicted it would fail. He said it would make things worse even after it dramatically improved the situation.

Of course, Palin is correct in pointing out Obama’s hypocrisy, but this just serves as another sad reminder that conservatives were the only ones that pushed for the surge (not to mention the entire Iraq war back in 2002/2003). As the mid-terms draw closer (as well as the 2012 race beyond that) we will no doubt see conservative candidates attempt to use the success of the Iraq war as a major talking point. Because I find “conservatism” and “war” to be polar opposites, I am reposting an article I wrote back in 2007 that tried to deal with the odd fact that so many conservatives could be such great fans of the warfare state. Enjoy.

Conservatism as Foreign Policy (written 2007)

In the year 2000, George Bush campaigned (at least partially) on “a humble foreign policy”, as well as the promise to stay away from nation building, explaining that countries need to take the responsibility on themselves.

Conservatives cheered.

Of course, lest one be misled to think of George Bush as a noninterventionist, I can say with quite a bit of certainty looking back on Bush’s record the past couple of years that the only reason he uttered those words was because the democrats had been very interventionist under Clinton (Haiti, Somalia, Kosovo, etc). The republicans, for the most part, opposed those wars, and conservative entertainers like Sean Hannity had a field day accusing Clinton of sending off our troops to die needlessly for a foreign country and spending our tax dollars propping up failed states. The sweet irony is diminished only by the sickening thought of how unprincipled some of these conservative entertainers can be.

But today, the conservative’s once good wisdom has largely diminished since Bush took office. Listen or read the headlines of any conservative media outlet, be it magazines, websites, or radio, and one could largely be forgiven for assuming conservatism was defined solely by one’s view of foreign policy. Peruse any of the numerous conservative blogs on popular sites such as myspace.com and the overwhelming criterion for being a conservative appears to be how much somebody supports war.

It seems to be that the majority of conservatives define conservatism by foreign policy almost exclusively. If you support the war(s) you are a conservative. If you oppose the war(s) you are a liberal (or “libtard” as myspace conservatives ingeniously put it these days). This simplistic view of conservatism defames the rich history of conservatism and classical liberalism going back to Edmund Burke.

The genuine students of conservatism and classical liberalism, though, realize that conservatism is so much more than simply one’s view of foreign policy, or any government policy. What happened to the belief in a natural order, as Russell Kirk has elaborated on? What happened to a belief in natural rights, which our founding fathers held so dear? What about limited government, few laws, and a respect for private property? Does conservatism have anything to do with ethics and culture to these so called conservatives today?

Ann Coulter and other “conservative” entertainers, would have us believe that conservatives are republicans, and liberals are democrats. Republicans good, democrats bad. It is as simple as that. I scanned the index of a couple of Ann Coulter’s books and found no reference to any of the great conservative writers. Edmund Burke was nowhere to be seen. Russell Kirk was entirely absent. Both Bill O’Reilly and Rush Limbaugh’s books followed the same trend as Ann Coulter’s.

Conservatives have become so enamored on foreign policy that they refuse to see conservatism as anything else. Pat Buchanan is a great example of this. Although largely ignored in the conservative press, one would be hard pressed to find someone more conservative than him. The only issue that really distinguishes him from the rest of the conservatives is that he is not an interventionist, and he doesn’t believe in unconditional support for Israel.

Murray N. Rothbard’s book, “The Betrayal of the American Right“, is a disquisitional examination of what he terms the “two Rights, Old and New.” The Old right, which can loosely be said to exist as the Right wing of American politics from the mid-1930s to the 1950s, was defined purely as an opposition movement. The Old Right was in opposition to everything the New Deal and the war economy of WWI had imposed on American politics and society. Their opposition to big government, and believe it or not, war made them far more principled then conservatives today. Today’s conservatives have becomes yesterday’s progressives.

Fortunately, many conservatives today have admitted as much, even if nobody seems to have noticed. This is why they aptly self-title themselves neoconservatives. From Irving Kristol’s admission that neoconservatives don’t really mind big government to Charles Krauthammer’s unyielding support for American hegemony around the world, conservative intellectuals have no qualms supporting ultimately progressive policies and principles while cloaking them in the duplicitous label of “conservatism.”

Gone are the days when conservatives espoused limited government. In the first six years under a so-called “conservative” president, the Department of Education increased spending on K-12 education by 40% and on higher education by nearly as much. We live under the biggest government the world has ever seen, in all of history. And yet we hear conservatives calling for more government. They call for more spending on defense, more bases around the world, and more trade barriers against China. Forget the old phrase, “defend America first“, now its defend Kuwait first, or defend the Iraqis first. Conservatism has become just another side of the coin of progressivism. Sure, they’re not entirely happy with entitlement programs. But whereas conservatives used to support cutting the welfare state and giving the money back to the people, now they support cutting a little of the welfare state and make the warfare state larger!

As Patrick Buchanan put it, the choice before us is between an empire or a republic. We are bankrupt as it is, and are forced to borrow money from the Chinese to finance are ever growing foreign policy. Russell Kirk once said, “Not by force of arms are civilizations held together, but by subtle threads of moral and intellectual principle.” When will conservatives today realize this?