Proposition: The Regulatory State Is The Greatest Evil In Economics

[studiodekadent]

I am going to make an argument which many people will find surprising coming from an Objectivist; welfare is a lesser evil than economic regulation and controls. 

The reasons I am making this argument are as follows. First, Objectivist reform will by necessity come one step at a time, and thus we need to prioritize what reforms happen first. Second, when discussing the problems with certain regulatory policies I find it extremely annoying when people try to derail the discussion into "but muh welfare!" Third, welfare programs are perceived as something people have paid into their whole lives via the tax system, and that if these programs were abolished they'd be losing out, but regulatory policies are simple prohibitions that do not have this problem with optics. And fourth, I think that there may be reasons to accept a basic income guarantee within an otherwise laissez-faire economy (political acceptability being one of these reasons). 

Because of these reasons I think we need to conceptually separate out the various kinds of government intervention in the economy, and then prioritize them. Which are worse, and which are better?

I make the proposition that the larger the number of violations of individual rights any particular kind of intervention necessarily requires, the worse that particular kind of intervention is. Whilst lesser evils are still evils, the point is to move from a more evil to a less evil situation wherever possible. Often it is not possible to move to a perfectly evil-free situation, and as such when one has limited alternatives one needs to choose the best one. 

So what kinds of government intervention are there? Let me define.
1. The Basics. These are courts, defense, property rights and law enforcement; the bare minimal Nightwatchman state. All Objectivists accept these are necessary, and with the exception of Rand herself, Nozick and the free-market anarchists all libertarians accept these will have to be taxpayer-funded.
2a. Government Ownership of Capital. This is when the government owns certain capital. This can range from merely government ownership of some particular capital asset, to a government monopoly on a particular industry, to full state socialism.
2b. Government Control of Private Capital, aka the Regulatory State. This is when the government restricts/limits how private owners can use their capital beyond "do not use it to violate others rights."
3. Income Redistribution, aka Welfare. This is when the government takes money from certain citizens and gives it to others.

The reason for "2a" and "2b" being used as classifications is that partially these variables are a tradeoff (in that an economy with no private capital by definition has no Regulatory State since there's nothing to regulate), but also very much akin to each other. Both of these categories could be combined into a supercategory of "Government Control of Capital" generally (with government ownership implying government control of any particular asset). State Socialism is based on 2a intervention. Economic Fascism is based around 2b intervention (although historically has often coexisted with a level of 2a intervention). 

My contention is as follows: Category 3 intervention is "less worse" than Category 2a and Category 2b interventions. But here are my provisos.

First, I am modelling Category 3 intervention exclusively as income transfers on the basis of generally applicable rules. Extensive schemes of social engineering and bureaucratic management, as well as schemes involving the transfer of physical goods (rather than income), are absolutely much more worthy of criticism than plain direct income transfers, but for reasons unrelated to the rights-violation calculus I am using. 

Second, I am defining "less worse" and "more worse" here strictly in terms of violating the negative rights of governed individuals. This isn't meant to be a full discussion of the drawbacks of any particular kind of policy and should not be taken as a comprehensive analysis. It merely looks at the number of rights violations necessary for each category of intervention, not anything else.

Onto the calculus.

Category 1 intervention is necessary to protect everyone's rights in the first place, which is why it is generally uncontroversial amongst libertarians (bar market anarchists, who believe it is not necessary). That said, it requires the violation of some rights; specifically, there is no way to fund this kind of intervention without taxation (the ultraminarchy preferred by Rand and Nozick is accepted as basically impossible even by most Objectivists), which violates rights by definition.

Ergo, we can say Category 1 has "1" necessary rights violation. 

Category 2a intervention can range from central banking (a government monopoly on money) to full out State Socialism. Category 2a intervention has the following necessary interventions.
First, in order to acquire the capital in question, the government must nationalize it, or they must purchase it with public money (funded by taxation). This must be counted as a separate rights violation because the government does not by default own capital; the capital it owns must come from somewhere.
Second, the government must pay for people to operate and manage the capital asset/s in question, which also requires public money (funded by taxation).
Thirdly, the government typically (but not always) operates this capital in a monopolistic manner, which means by definition individuals are being prohibited from entering a market which they otherwise could enter.

Let us presume that the government could operate the capital they own in a competitive marketplace (i.e. one without legal prohibitions on entry). Even under this case, Category 2a intervention requires 2 necessary rights violations, and often involves 3 rights violations. 

Category 2b intervention is regulation/state control over private capital. 

First, this requires a regulatory bureaucracy or law-making apparatus (such as a legislature) and an enforcement apparatus which must be funded by taxation.
Second, every single compulsive clause (i.e. clause which mandates or prohibits any action) is by definition a violation of the rights of capital owners.

In other words, category 2b intervention requires 2 necessary rights violations, but because each individual regulatory compulsion/prohibition constitutes a rights violation of its own the number quickly increases. 

Category 3 intervention, or redistribution of income, has only one necessary rights violation. This rights violation is the taxation necessary to fund the welfare scheme. The recipient of the money does not have their rights violated (presuming its a straight income transfer); we can speak about whether or not they have "earned" or whether they "deserve" that money but that's discussion not about political rights but ethics. 

Ergo, Category 1 intervention violates rights once. So does Category 3 intervention. Category 2a violates rights at least twice and typically thrice. Category 2b violates rights at least twice and the number quickly grows. 

This leads me to suggest that Objectivists should emphasize attacks on public ownership of capital and state regulation/control of private capital, and prioritize these over critiquing safety nets. Whilst cronyism is also atrocious, the atrocities of cronyism tend to be a derivative of Category 2a and Category 2b interventions. 

Of course this is a very simple metric and does not go into policy details or analyze all economic consequences. But it may provide a reason to help Objectivists pick their battles more efficiently. 

[BaalChatzaf]

12 hours ago, studiodekadent said:

I am going to make an argument which many people will find surprising coming from an Objectivist; welfare is a lesser evil than economic regulation and controls. 

The reasons I am making this argument are as follows. First, Objectivist reform will by necessity come one step at a time, and thus we need to prioritize what reforms happen first. Second, when discussing the problems with certain regulatory policies I find it extremely annoying when people try to derail the discussion into "but muh welfare!" Third, welfare programs are perceived as something people have paid into their whole lives via the tax system, and that if these programs were abolished they'd be losing out, but regulatory policies are simple prohibitions that do not have this problem with optics. And fourth, I think that there may be reasons to accept a basic income guarantee within an otherwise laissez-faire economy (political acceptability being one of these reasons). 

Because of these reasons I think we need to conceptually separate out the various kinds of government intervention in the economy, and then prioritize them. Which are worse, and which are better?

I make the proposition that the larger the number of violations of individual rights any particular kind of intervention necessarily requires, the worse that particular kind of intervention is. Whilst lesser evils are still evils, the point is to move from a more evil to a less evil situation wherever possible. Often it is not possible to move to a perfectly evil-free situation, and as such when one has limited alternatives one needs to choose the best one. 

So what kinds of government intervention are there? Let me define.
1. The Basics. These are courts, defense, property rights and law enforcement; the bare minimal Nightwatchman state. All Objectivists accept these are necessary, and with the exception of Rand herself, Nozick and the free-market anarchists all libertarians accept these will have to be taxpayer-funded.
2a. Government Ownership of Capital. This is when the government owns certain capital. This can range from merely government ownership of some particular capital asset, to a government monopoly on a particular industry, to full state socialism.
2b. Government Control of Private Capital, aka the Regulatory State. This is when the government restricts/limits how private owners can use their capital beyond "do not use it to violate others rights."
3. Income Redistribution, aka Welfare. This is when the government takes money from certain citizens and gives it to others.

The reason for "2a" and "2b" being used as classifications is that partially these variables are a tradeoff (in that an economy with no private capital by definition has no Regulatory State since there's nothing to regulate), but also very much akin to each other. Both of these categories could be combined into a supercategory of "Government Control of Capital" generally (with government ownership implying government control of any particular asset). State Socialism is based on 2a intervention. Economic Fascism is based around 2b intervention (although historically has often coexisted with a level of 2a intervention). 

My contention is as follows: Category 3 intervention is "less worse" than Category 2a and Category 2b interventions. But here are my provisos.

First, I am modelling Category 3 intervention exclusively as income transfers on the basis of generally applicable rules. Extensive schemes of social engineering and bureaucratic management, as well as schemes involving the transfer of physical goods (rather than income), are absolutely much more worthy of criticism than plain direct income transfers, but for reasons unrelated to the rights-violation calculus I am using. 

Second, I am defining "less worse" and "more worse" here strictly in terms of violating the negative rights of governed individuals. This isn't meant to be a full discussion of the drawbacks of any particular kind of policy and should not be taken as a comprehensive analysis. It merely looks at the number of rights violations necessary for each category of intervention, not anything else.

Onto the calculus.

Category 1 intervention is necessary to protect everyone's rights in the first place, which is why it is generally uncontroversial amongst libertarians (bar market anarchists, who believe it is not necessary). That said, it requires the violation of some rights; specifically, there is no way to fund this kind of intervention without taxation (the ultraminarchy preferred by Rand and Nozick is accepted as basically impossible even by most Objectivists), which violates rights by definition.

Ergo, we can say Category 1 has "1" necessary rights violation. 

Category 2a intervention can range from central banking (a government monopoly on money) to full out State Socialism. Category 2a intervention has the following necessary interventions.
First, in order to acquire the capital in question, the government must nationalize it, or they must purchase it with public money (funded by taxation). This must be counted as a separate rights violation because the government does not by default own capital; the capital it owns must come from somewhere.
Second, the government must pay for people to operate and manage the capital asset/s in question, which also requires public money (funded by taxation).
Thirdly, the government typically (but not always) operates this capital in a monopolistic manner, which means by definition individuals are being prohibited from entering a market which they otherwise could enter.

Let us presume that the government could operate the capital they own in a competitive marketplace (i.e. one without legal prohibitions on entry). Even under this case, Category 2a intervention requires 2 necessary rights violations, and often involves 3 rights violations. 

Category 2b intervention is regulation/state control over private capital. 

First, this requires a regulatory bureaucracy or law-making apparatus (such as a legislature) and an enforcement apparatus which must be funded by taxation.
Second, every single compulsive clause (i.e. clause which mandates or prohibits any action) is by definition a violation of the rights of capital owners.

In other words, category 2b intervention requires 2 necessary rights violations, but because each individual regulatory compulsion/prohibition constitutes a rights violation of its own the number quickly increases. 

Category 3 intervention, or redistribution of income, has only one necessary rights violation. This rights violation is the taxation necessary to fund the welfare scheme. The recipient of the money does not have their rights violated (presuming its a straight income transfer); we can speak about whether or not they have "earned" or whether they "deserve" that money but that's discussion not about political rights but ethics. 

Ergo, Category 1 intervention violates rights once. So does Category 3 intervention. Category 2a violates rights at least twice and typically thrice. Category 2b violates rights at least twice and the number quickly grows. 

This leads me to suggest that Objectivists should emphasize attacks on public ownership of capital and state regulation/control of private capital, and prioritize these over critiquing safety nets. Whilst cronyism is also atrocious, the atrocities of cronyism tend to be a derivative of Category 2a and Category 2b interventions. 

Of course this is a very simple metric and does not go into policy details or analyze all economic consequences. But it may provide a reason to help Objectivists pick their battles more efficiently. 

Law, as such, is regulatory.  It differentiates between acts that are forbidden and those permitted and between acts required and acts merely  permitted

 

[Wolf DeVoon]

17 hours ago, studiodekadent said:

Objectivist reform will by necessity come one step at a time

r-i-i-i-ight, that's the John Galt Plan, huh?

[studiodekadent]

5 hours ago, BaalChatzaf said:

Law, as such, is regulatory.  It differentiates between acts that are forbidden and those permitted and between acts required and acts merely  permitted

 

And that doesn't engage with my central argument. I'm not saying that nothing should be prohibited. I'm saying that prohibitions BEYOND "thou shalt not initiate force/fraud/coercion" necessarily violate rights.

[studiodekadent]

2 minutes ago, Wolf DeVoon said:

r-i-i-i-ight, that's the John Galt Plan, huh?

No, its an acknowledgement of the fact there won't be a giant Objectivist revolution which changes society in the course of a week or less.

[BaalChatzaf]

1 hour ago, studiodekadent said:

And that doesn't engage with my central argument. I'm not saying that nothing should be prohibited. I'm saying that prohibitions BEYOND "thou shalt not initiate force/fraud/coercion" necessarily violate rights.

what about laws specify which side of the road we should travel on?

 

[studiodekadent]

1 hour ago, BaalChatzaf said:

what about laws specify which side of the road we should travel on?

 

Interesting point but please, you're dropping context. My initial post was about economic policy and everyone knows what "the regulatory state" means in an economic context. So perhaps we could look at that particular subject rather than talk about road rules. 

[BaalChatzaf]

13 hours ago, studiodekadent said:

Interesting point but please, you're dropping context. My initial post was about economic policy and everyone knows what "the regulatory state" means in an economic context. So perhaps we could look at that particular subject rather than talk about road rules. 

I never saw any context to drop.

 

[atlashead]

this is unknowable, as science tells what resources, if any, become most valuable

[studiodekadent]

10 minutes ago, atlashead said:

this is unknowable, as science tells what resources, if any, become most valuable

Could you perhaps give some more detailed discussion/critique?

[Brant Gaede]

There is no evil in economics, only in people.

--Brant

[Peter]

Evil thoughts. Doctor Evil and Mini Me: We can laugh at evil. Evil is as evil does. If I remember correctly I bought Gail Dean’s crossword puzzle book.

Peter

 

Reruns.

From: Kate Herrick To: ATL <atlantis Subject: ATL: Early thoughts on the nature of evil Date: Sun, 07 May 200017:25:53 -0500

Hi, Atlantis. I'll probably read the evil ideas threads in the archives, but right now I'll just air how I think of evil structurally. As opposed to the view considering only acts to be what concretely constitute evil,  I consider evil as existing in people's minds, and the consequences in reality-- such as being dead with a murderer's bullet in my body--  bad (or, for a noun, the bad).  (That's along with other kinds of bad things.  The bad includes the existence of evil minds and works, as well as all the metaphysical stuff, like sunburns.)

On the other hand, the conscious element that is reckless about or actively malicious toward actual value in pursuit of escape from awareness and facts, I call "evil."  And yes, this can be just a mental act.  Thoughts are morally evaluate-able *acts* of consciousness.  The bad is the negative with regard to the interests of rational people. Evil is a motivational state, aware of values, in a person who is making or living with knowingly irresponsible choices about that person's relationship to facts he knows by evidence of reality.

 >From Ayn Rand's fiction we know evil as a desire not to think, and then not evaluate oneself.  But I want to see added to Ayn Rand's observation that evil people can be deathly afraid of facing their nature, the

observation that many evil people *don't care.*  I want to add to the concept of evasion the possibility-- and pervasive reality—that evasion is, not just the desire not to think, but also includes another (and perhaps still more) motivational state: a consciousness, a regard, that is knowingly indifferent to the true, the good, all the ramifications that are perfectly clear-- and perfectly, objectively bad... for the person, or perhaps lopsidedly toward others' innocent hides.  They do it consciously, directly shirking their living responsibility to pursue the good in their life.

Kate

 

From: Achilles RB To: Atlantis Subject: Re: ATL: Evil Ideas Date: Mon, 8 May 200007:06:59 EDT

Gayle Dean wrote: >In support of Roger, I think that maybe we are all dropping context here.  The question is not are all beliefs or ideas either intrinsically evil or neutral.  Context matters.  An idea can be either evil or not evil depending on context.

 

That is exactly what I have been trying to say. Thank you. Good, evil, and neutrality are contextual, not absolute.

 

 >So, in Roger's examples of holding the idea of Communism or Nazism as a teaching tool in a classroom, the ideas would NOT be evil.  But, in the context of Bill's examples of Hitler using the ideas of  Nazism to murder people and in my example of Charles Manson having ideas about killing people, then those ideas would be evil. Doesn't that solve the problem?

 

It does for me. But let's go a little further and explore Bill's statement that he is specifically referring not to ideas per se, but "to a *belief* in those ideas," by which he means a real, "sincere conviction." He said that unless an idea like Nazism or Communism is "held as a belief, it does not have the power to motivate one's action, and therefore to generate evil consequences!"

 

Even then, I question whether that is enough to motivate one's actions. People have all kinds of "sincere convictions" that they somehow manage not to act on, because ~other~, even stronger "sincere convictions" (which they perhaps may not even be consciously aware of) outweigh them motivationally. Also, I think we should be careful to realize that what actually motivates us is not an idea or belief or "sincere conviction", per se, but a ~desired envisioned consequence~ that will result from some action that is ~guided~ by that idea or belief or "sincere conviction." If one's desire for some evil envisioned consequence is not sufficiently strong, one will not engage in the particular evil act that will produce that consequence.

 

Remember, Rand pointedly refused to define "value" as something that you would ~like~ to gain and/or keep, which is a ~passive~ view of value. Instead, she defined "value" as that which one ~acts~ to gain and/or keep. She despised the kind of idealism that held certain ideas about the good but did not act on them, and she scorned the attitude of some who wanted to be judged not for their actions, but for their "good intentions," aka "sincere convictions."

 

So, back to Bill's original claim that Nazism and Communism are evil ideas ~because~ they lead, when accepted, to a grave act of injustice. "Bad ideas (e.g., Naziism and Communism)," Bill said, "can support only *evil* actions," and he asked: "What is the problem with calling a belief in Communism or Naziism 'evil', given the millions of murders that have resulted from it?"

 

The problem is that other things than millions of murders, some of them actually good, have resulted from a given person's holding Communism or Nazism as a "sincere conviction." Suppose one of those passively idealistic Nazis or Communists was ~teaching~ his ideals, rather than putting them into effect at the point of a gun – and suppose that his students, being independent thinkers, came to the conclusion that N'ism or C'ism should not be put into effect. Would that not be a ~good~ result of someone's holding a sincere belief in N'ism or C'ism? If so, then how can we call the ~holding~ of that sincere belief "evil," ~apart from someone's actually putting it into effect~? This is the context, and the only context, within which we can judge an idea as being "evil." Not hodling the idea as a "sincere conviction," but ~acting~ on the conviction in a way that produces anti-life (evil) consequences -- in other words, ~carrying out~ one's conviction in an ~evil action~.

 

So, when Bill asks: "If murder is evil, because it violates people's rights, then why isn't a *belief* in murder evil, if it *leads to* a violation of people's rights?" -- the answer is: IF a belief in murder IN FACT leads to a violation of people's rights, then that idea/belief/sincere conviction is being ~used~ in an ~evil action~. But the belief in murder, even if held as a "sincere conviction," is not ~in itself~ evil, but ~only~ as the guiding mental framework ~by which~ one carries out an ~evil action~. If one passively values murder as one's sincere conviction, but does nothing about it, that conviction is ~not~ evil. It's not even an evil ~intention~, until one ~decides~ that one ~will~ commit murder at some point.

 

Thanks again to Gayle for stimulating me to expanding on my perspective on "evil ideas."

 

Best to all,

Roger Bissell

[BaalChatzaf]

Any society that has enforceable  laws is to some extent a Regulatory State.  That alternative is no law which is anarchism  and is unlikely to work.

[Brant Gaede]

21 minutes ago, BaalChatzaf said:

Any society that has enforceable  laws is to some extent a Regulatory State.  That alternative is no law which is anarchism  and is unlikely to work.

Too much reduction; too little point. OL is not jr. high school.

--Brant

[BaalChatzaf]

11 hours ago, Brant Gaede said:

Too much reduction; too little point. OL is not jr. high school.

--Brant

The point is bright clear.  Some regulation comes with -any- government.  How much is too much regulation? What regulation is bad regulation.  Human society and regulation go together to some degree.

 

[jts]

3 hours ago, BaalChatzaf said:

The point is bright clear.  Some regulation comes with -any- government.  How much is too much regulation? What regulation is bad regulation.  Human society and regulation go together to some degree.

Everyone who knows Objectivism knows the Objectivist answer to that. In Objectivism the one and only proper function of government is to protect individual rights. So if you want to know what degree of regulation is too much, you ask 2 questions.

1.  Does it protect individual rights?  If not, it is wrong.

2.  Does it violate individual rights?  If so, it is wrong.

 

[Brant Gaede]

3 hours ago, BaalChatzaf said:

The point is bright clear.  Some regulation comes with -any- government.  How much is too much regulation? What regulation is bad regulation.  Human society and regulation go together to some degree.

You are now using semantics to sanction the regulations all else here are talking about by broadening the understanding into oblivion.

--Brant

[BaalChatzaf]

5 hours ago, jts said:

Everyone who knows Objectivism knows the Objectivist answer to that. In Objectivism the one and only proper function of government is to protect individual rights. So if you want to know what degree of regulation is too much, you ask 2 questions.

1.  Does it protect individual rights?  If not, it is wrong.

2.  Does it violate individual rights?  If so, it is wrong.

 

What about safety. How about regulations forbidding some individual trucker from schlepping TNT through a residential neighborhood?  His individual right is trumped by the principle of public safety.

 

[BaalChatzaf]

5 hours ago, Brant Gaede said:

You are now using semantics to sanction the regulations all else here are talking about by broadening the understanding into oblivion.

--Brant

No. I am thinking precisely.  Words have meanings.  What you call "semantics"  I call critical analysis and thinking. 

[Brant Gaede]

21 minutes ago, BaalChatzaf said:

No. I am thinking precisely.  Words have meanings.  What you call "semantics"  I call critical analysis and thinking. 

And I call irrelevant digression.

--Brant

[Wolf DeVoon]

On 10/11/2017 at 4:02 PM, BaalChatzaf said:

Law, as such, is regulatory.  It differentiates between acts that are forbidden and those permitted and between acts required and acts merely  permitted

Sorry, I haven't been paying attention. What Bob is talking about is "positive law," legislation and edicts by the Executive Branch -- the least cogent, least reasonable aspect of democracy, a great nose-counting parade, where a plurality wins and everyone else loses. That has nothing to do with common law or equity. Common law is not regulatory. It is a neutral venue to hear cases and controversies. Equity jurisdiction seeks to provide a remedy other than money damages in the interests of justice.

[Wolf DeVoon]

11 hours ago, BaalChatzaf said:

The point is bright clear.  Some regulation comes with -any- government.

Stick to math and science, where you know the subject. Thanks.

[jts]

2 hours ago, BaalChatzaf said:

What about safety. How about regulations forbidding some individual trucker from schlepping TNT through a residential neighborhood?  His individual right is trumped by the principle of public safety.

 

What do Yaron Brook and Leonard Peikoff and Harry Binswanger say about that? Do people have a right to endanger other people?

 

[Brant Gaede]

4 hours ago, BaalChatzaf said:

What about safety. How about regulations forbidding some individual trucker from schlepping TNT through a residential neighborhood?  His individual right is trumped by the principle of public safety.

What is the "individual right" you are talking about?

You've never before I recall mentioned anything about any rights' philosophy.

--Brant

I could be wrong

[BaalChatzaf]

4 hours ago, Brant Gaede said:

What is the "individual right" you are talking about?

You've never before I recall mentioned anything about any rights' philosophy.

--Brant

I could be wrong

the 'right' to drive a truckload of nitroglycerin   at 80 mph through a residential neighborhood.  But that is not a 'right' you say?  Why isn't it a "right"?  Because the law forbids it.