'Commie Cowboys' Now Available Online for Free

Having become so fabulously wealthy on royalties, I've decided to make my book Commie Cowboys available online for free. I posted it here, where you can download it in PDF. If you like it, be sure to review it at the book's Amazon page. If you prefer a physical book, you can certainly still buy it on Amazon for a measly $5.99. There's an even cheaper Kindle version, also.

It's a book that details how the so-called "classic" Westerns of the post-WWII period hardly deserve their reputation for being pro-capitalist symbols of freedom. In fact, the old silent Westerns and the more modern "cynical" Westerns like Unforgiven and The Good, The Bad, and the Ugly are vastly superior, from a laissez faire perspective.

 Lew Rockwell and I talk about the book here.

Some New Library Books

The great Professor John Cochran, retired Dean of the business school at Metropolitan State College of Denver, and author of many fine scholarly articles on monetary policy and banking,  has kindly donated much of his personal library to my personal library. Included are numerous economics and history books. I'm most happy about the Henry Hazlitt books. These are just some of them:

Citi Economist: Time to Abolish Cash

Also published at Mises Wire.

We often focus on the fact that abolishing cash abolishes the last remnants of financial privacy. But of course, abolishing cash also increases the Fed's ability to manipulate the economy.

Bloomberg reports that Citi economist Willem Buiter has called for the end of paper currency based on the benefits such action would bring to central banks. Specifically, the existence of cash limits a central bank's ability to manipulate the ecomomy with negative interest rates:

In a new piece, Citi's Willem Buiter looks at this problem, which is known as the effective lower bound (ELB) on nominal interest rates. 

Fundamentally, the ELB problem comes down to cash. According to Buiter, the ELB only exists at all due to the existence of cash, which is a bearer instrument that pays zero nominal rates. Why have your money on deposit at a negative rate that reduces your wealth when you can have it in cash and suffer no reduction?

Cash therefore gives people an easy and effective way of avoiding negative nominal rates. However, if you abolish cash, there is no escape from negative interest rates. All your money must be in an institution that can then punish you for saving any cash. There are half-way measures such as taxing currency, too.  Buiter does not have to go far to find an example of where a central bank may have wanted to set interest rates much lower to -100bp. He uses (a fairly aggressive) Taylor Rule to show that Federal Reserve rates should have been as low as -6 percent during the financial crisis." Sure, some people will protest the abolition of cash, Buiter concedes, but overall the arguments in favor of cash "seem rather weak."

My Mother and Me in 1978

In San Marino, California, which at the time was a middle-class neighborhood:

On Immigration and More: Some Gov't Intervention Does Not Justify More Government Intervention

First published at Mises Wire.

For many years, advocates of mandatory “life and safety” regulation (i.e., legislated smoking bans, helmet laws, seat belt laws, bans on sugary drinks, etc) have claimed that they are justified on the grounds that, since so many health-care services are taxpayer-funded, it is both necessary and legitimate that the government mandate more safe and healthy behavior. In other words, since someone who doesn’t wear a seatbelt may end up in a taxpayer-funded hospital, the government has a “right” to lower healthcare costs by mandating seatbelts. By the same token, it is held that the government has an obligation to ban or discourage smoking or the eating of fatty goods, lest such a person drive up Medicare costs. This may be extended in another direction as well. Since nearly all highways and roads are government-funded, they claim, then the state has the “right” to regulate everything that occurs on them. Hence, you must wear your seat belt, submit to roadside DUI checks, wear helmets, etc.

There’s right-wing version of this also. Advocates of a more robust police state in the form of more deportations of suspected foreign nationals and more prosecutions against employers and landlords who hire or rent to foreign nationals (i.e, illegal immigrants), use an analogous argument. The fact that employers have freely invited such people to live on their property or work in their establishments matters not at all, we are told, because the presence of “public goods” justifies more ICE agents, a border wall, and more federal agents to raid factories and issue fines to landlords. Another variant of this is the argument that drug laws (applicable to everyone) are necessary to keep welfare-recipients off drugs or drugs out of the public schools. (Drug laws also keep health-care costs down too, — or so it is claimed — so there’s a nice overlap here with the left on this issue, also.)
Now, I see that the same argument is being extended to the “anti-discrimination” debate. For example :

Think you should be able to segregate your business’ water fountains or reject service to black people as a matter of conscience? Too bad! The law is clear: if you use public roads and other public services to do business then you have to provide service to the public. [NB: This author is writing this without irony.]

The law doesn’t quite say what the author here thinks it says. (He seems to be confusing his argument with the “common carrier” argument.) But the point is made. If you use government roads or government sewage (or whatever) you have essentially surrendered your property rights. Any you do retain are at the discretion of the legislature and courts.

In all of these cases, the appropriate response, at least for the advocate of laissez-faire, is to lessen the size and extent of so-called “public” goods while lessening the monopolistic aspects of such goods through decentralization of government power.

For example, if it is a problem that unhealthy people use Medicare, then the answer is to lessen spending on Medicare, constrict eligibility, or to eliminate Medicare altogether and lower barriers for private-sector competition. The answer is not to empower government to manage everyone’s dietary habits as a “cost-saving” measure. Such schemes also necessitate enforcement, which of course brings with it new and bigger government agencies, more government agents, and more red tape.

Likewise, if foreign nationals are using public schools or public roads, the answer is to lessen spending on such government-owned amenities and to allow for private-sector competition with public sector services. The answer is not to outlaw the renting of apartments to foreign nationals or to outlaw voluntary contracts with such people. Nor is the answer to pay more federal agents, build border walls, or increase the bureaucracy to “solve” a problem created by government intervention in the first place. In contrast, the free-market response is to restrict access to, or eliminate, such amenities (e.g., Prop 287), while allowing competition.

Similarly, if a business is using government roads to transport goods or is using the postal service, this is no way then leads us to the conclusion that the state therefore has the right to control everything the business does. In fact, the correct solution is to diminish the role of the state in the daily business of the establishment in question by allowing for private-sector options in transportation, utilities, package delivery, and so on.

Note that in most of these cases, the person who is now supposedly subject to greater regulation because he “benefits” from public amenities, doesn’t even have a choice in the matter. Seniors may not refuse Medicare. Business owners and workers must use public roads in most cases.

Now, for the leftists, there is no ideological conflict here. They are perfectly happy that roads, utilities, and other aspects of daily life are government-owned. The fact that the existence of "public" goods can be used to further regulate daily life is a bonus for them. For the “free-market” advocate who is also the advocate of more “enforcement” of laws, however, the situation presents a conflict.

“But we’ll never get rid of public roads or public schools or Medicare in my lifetime! Therefore businesses who hire illegal aliens must be punished, drugs must be outlawed, and we must create a robust border patrol and DEA as a second-best solution,” they may say.

But if the presence of government-owned amenities justify greater intervention in one case, they justify it in other cases, too. If we argue that it is appropriate for the federal government to regulate who meat packers can hire because immigrants use public roads to get to the plant, then the presence of government-owned amenities also justifies regulation of a “discriminatory” cake-baking establishment that uses the public roads, or which relies on public roads for customer access.

If the public roads are a type of subsidy to the baker, the meat packer, and the immigrant workers, then the “free-market” solution is to eliminate the subsidy, diminish its extent, or eliminate the monopolistic aspects the subsidy; not invent new ways for government to regulate the lives and property of everyone who has no choice but to use the government’s roads and “services” in the first place.

How Aggressive Foreign Policy Subsidizes American Nut Farmers

A friend cheekily reminds me that today is National Pecan Day and innocently suggests that I might want to "discuss the connection between pecans and the California drought." True, enough, there's a connection. But water is just one factor — albeit a large one — propping up the lucrative nature of farming in the California desert. International trade policy is a major subsidy for many growers as well.

Although pecans are native to the American South, it could be that they might be even more productive somewhere else in the world. Maize, for example, grows amazingly well in Iowa, even though it's native to Mexico. But if pecans could be grown more productively elsewhere, it's unlikely we'll ever know. Experience tells us that American trade barriers would likely be erected to hobble any entrepreneurs who attempted to compete with domestic growers.

Much has been made of tree-nut growing in California during the current debate over the drought. Almonds have been especially targeted, but pistachios are an important crop as well, and while domestic almonds and other tree nuts certainly benefit from tariff policy — here's a tariff schedule for those who are interested — pistachio growers in the US have the added benefit of bellicose American foreign policy.

In a 2013 article at Mondoweiss, Yash Levine examined the effect of the US embargo against Iran on the pistachio industry, through the experience of one particularly wealthy farming couple, Lynda and Stewart Resnick:

For as long as anyone can remember, Iran had been the world’s main supplier of pistachios. But Carter’s 1979 embargo on the country effectively cut off Iranian pistachio growers from the American market and created a need for alternative pistachio production, which was virtually nonexistent in the United States. 

Seeing a massive opportunity, the Resnicks began to snap up thousands of acres from Mobil Oil and Texaco in order to create pistachio and almond orchards. They steadily bought up more and more acreage all through the 1980s for rock-bottom prices because of a long period of drought. By the end of the decade, the Resnicks had amassed enough farmland to rival Oligarch Valley’s biggest and oldest billionaire farmer clans: 100,000 acres—nearly 160 square miles—growing cotton, pistachios, almonds, oranges, lemons and grapefruit. 

They didn’t just grow the crops, but packaged, processed and distributed them as well. Economic sanctions against Iran were renewed and intensified under every single president after Carter, and all the while America’s domestic pistachio farming exploded. In the past thirty years it has grown from a couple of hobby farmers to an industry generating close to $1 billion...

Economic sanctions are what have allowed the Resnicks to create their pistachio empire, which would suffer a severe blow if relations with Iran were ever normalized. Iran’s pistachios are considered to be superior to America’s, so much so that Israelis still buy Iranian pistachios shipped in through Turkey. Surely the Resnicks would never be able to compete with Iran on the pistachio free market. And so the Resnicks did what any smart and ruthless American would do: they made common cause with oil companies, Islamophobes, neocons and Likudniks, and began funneling money to think tanks and political advocacy groups that take a hardline approach with Iran. Economic sanctions, sabotage, vilification—all these things worked in the Resnicks’ interest. Bombing some of Iran’s pistachio fields wouldn’t be so bad, either…

Government Discrimination vs. Private Discrimination

[Originally published at LewRockwell.com]

The new religious freedom controversy in Indiana reminds us that discrimination and exclusion are foundational aspects of private property. Without the right to exclude, a right to private property does not exist, since forced inclusion implies coerced action and accommodation under the threat of violence from the regulating state agency in question. The decision to exclude is always based on some type of discrimination, although the type of discrimination can run the gamut from “you’re banned from my store because you groped customers” to “I don’t serve your (racial) kind.” In practice, the excluded party must then seek similar or substitute services elsewhere. Since discrimination of various types must always exist if any measure of private-property rights are to be respected, those who wish to expand the options for those who face discrimination should look to greater ease and freedom in providing more diverse choices for everyone in the marketplace. State efforts to restrict entry by entrepreneurs into markets through regulation and prohibition result in less choice and more monopolistic power for the incumbent firms, increasing the effect of the discrimination on the consumer.

Additionally, the effects of discrimination are magnified when “public” or government property or services are an important factor in the transaction. Government agencies, as monopolists by definition, present a much more grave challenge to groups that face discrimination. We have been told that people who refuse to bake cakes for same-sex couples present some sort of grave threat to civilization (as if the customer could not easily find a willing baker elsewhere), but when faced with no choice but to submit to the local monopolist (i.e., city government) the parties that face discrimination have no alternatives.

To illustrate this, we can look to past cases of government-sector discrimination to illustrate this contrast with private-sector discrimination. The now-infamous Sleepy Lagoon murder case provides a helpful case study, and is of particular interest to me given my own family history within the community at the time.

When my mother was born into a Mexican-American family in Los Angeles in the 1940s, she was born just a few years after the show trial that followed the murder, and in which 12 suspects were quickly tried and convicted of crimes related to the murder of Jose Diaz:

On August 2nd [1942] Jose Diaz was found near what had come to be known as the “Sleepy Lagoon.” He was rushed to a hospital where he died from massive head trauma as well as stabbings. After his body was found, there was a huge police sweep over the whole County, in which over 300 male youths were arrested…twenty-four youths were indicted on charges of conspiracy to commit murder, as well as assault with a deadly weapon.

As part of an effort to win a conviction, the Los Angeles County Sheriff’s Department then published a document titled simply “Statistics” that explained the necessity of more harsh enforcement of laws against the Mexican-American population in Los Angeles.

Historian Richard White sums up the document:

The prosecution in the ensuing murder trial put the entire Mexican American community on trial by identifying all “Mexicans” as criminals and gangsters. The Foreign Relations Bureau of the Los Angeles Sheriff’s Department circulated a report asserting that criminality was an inherent racial trait of Mexicans and thus of Mexican Americans. The report argued that Mexican Americans were partially Indian by descent, Indians were originally “Orientals,” and “Orientals” had no regard for the value of life.

The report’s text states:

Many of these young gangsters have comparatively good jobs, so economics is not a determining factor in their case. In fact, as mentioned above, economics as well as some of the other features are contributing factors, but basically it is biological—one cannot change the spots of a leopard.

The Caucasion [sic], especially the Anglo-Saxon, when engaged in fighting, particularly among youths, resort to fistcuff [sic] and may at times kick each other, which is considered unsportive, but this Mexican element considers all that to be a sign of weakness, and all he knows and feels is a desire to use a knife or some lethal weapon. In other words, his desire is to kill, or at least let blood. That is why it is difficult for the Anglo-Saxon to understand the psychology of the Indian or the Latin to understand the psychology of the Anglo-Saxon or those from Northern Europe. When there is added to this inborn characteristic that has come down through the ages—the use of liquor, then we certainly have crimes of violence.

Ed. Duran Ayres, the author of the report, was employed as an expert witness for the prosecution in the case, apparently as part of an effort to show that the defendants were statistically more likely to be murderers than an ordinary person.

Tax-Funded Discrimination vs. Private-Sector Discrimination

Notable in this is the fact that these views were being promulgated by a government agency for the express purpose of justifying the use of coercive force against persons, and — less explicitly — disregard for due process. All the government agents involved, from the presiding judge, to Duran, to the cop on the street, were paid with taxpayer money. Moreover, these agents exercised a monopoly of force within their jurisdiction. All residents within the jurisdiction, whether Anglo, Mexican, or otherwise, were compelled to financially support the courts and the Sheriff’s Department.

Many scholars, nevertheless, have studied the trial as a case study of ethnic bias at the time within the private sector, with a focus on the local media and the population at large which allegedly demanded the type of show trial that the defendants were given.

Certainly, the press engaged in many outrageous calumnies, regularly referring to the as-yet-not-convicted defendants as “hoodlums” “Mexican goon squads” and so on. Also, there is no doubt that many within the general population were happy to see more Mexican-Americans locked up, but it remains abundantly unclear that a majority of Angelenos at the time subscribed to the Sheriff’s department’s “scientific” theories about certain ethnic groups.

Moreover, of notable importance is the fact that the media, like all private institutions, and all private citizens, does not have the legal authority to arrest, detain, or execute people.  Nor do private citizens who disagree with the local media’s positions or private citizen’s beliefs need support such things financially.

Government agencies, on the other hand, do have the legal authority to arrest, detain, and execute people, and they have the power to force all residents within their jurisdiction to support government institutions financially.

Those private citizens who do use coercion without due process are correctly deemed “criminals,” “thieves,” or “murderers” who must themselves be subject to the local monopolist of law enforcement.

Here we see the fundamental difference between public discrimination and private discrimination. With private discrimination, the person who faces discrimination (for whatever reason, be it ugliness, poor fashion sense, past conflict with the property owner, or membership in some ethnic group) has the freedom to pursue services elsewhere. On the other hand, the party that faces government discrimination (whether based on religious views, political incorrectness, wage rates paid, or membership in some ethnic or racial group) has no choice to seek a competitor or to even stop financially supporting the discriminating agency. As a monopolist, the state agency, necessarily prohibits choice for the discriminated-against party.

So, naturally, we can see how private discrimination is in its basic constitution quite different from government discrimination. For example, in Los Angeles in the 1940s — where it was apparently official policy that Mexican-Americans were to be regarded as especially criminal-minded — were my Mexican-American grandparents and their children more threatened by a baker who might refuse them a cake, or did the real danger lie with the Sheriff’s department?  Obviously, the threat posed by the County of Los Angeles was much, much greater than any “threat” posed by any private merchant, in part because the government agency employs coercion, but also because private-sector firms, unless they enjoy monopoly powers bestowed by government regulators, are forced to compete with other similar firms in the marketplace. In other words, it’s one thing when your grocer thinks you are a blood-thirsty mestizo. It’s another thing entirely when your local police force thinks the same.

My grandfather (second from left) with relatives in the 1940s in East Los Angeles

The Reduce the Effects of Discrimination, Reduce Monopoly Power 

The answer to the problem of discrimination in both bases is to seek to enhance discrimination or at least weaken monopolist power as much as possible.  In the case of government agencies, the proper first step would be to decentralize, and to break jurisdictions into smaller pieces. By the 1940s, Los Angeles County was already a large operation by the standards of the day. There is no reason that citizens could not have been given greater choice within the area by limiting local governments to much smaller jurisdictions — jurisdictions that were more likely to reflect the values and ethnic make-up of each community. (One cannot, of course, ignore the role of basic ideology in this. A society that has no regard for private property and due process will not have a decent justice system, regardless of how the institutions are structured.) But other means could be employed as well, including options for third-party arbitration. And within the private sector, we must always be ready to condemn efforts on the part of both government and private agents to limit choice through government regulation.

Indeed, in the years before Sleepy Lagoon, California had employed government regulation to put Japanese-Americans at an economic disadvantage and to limit their ability to competeagainst white merchants:

In California during the late nineteenth and early twentieth century, anti-Japanese sentiment ran high, in spite of the fact that they never comprised more than 3 percent of the population. To discourage Japanese immigration to California and to curb the wealth of the immigrants themselves, a large number of major employers agreed among themselves to not hire any Japanese workers. At the same time, politicians at the state legislature passed laws prohibiting Japanese immigrants from working in various occupations. In response, both immigrant and native-born Japanese worked around these laws and employment bans by focusing on industries that were ignored by much of the population due to the hard work required and the slim profit margins involved. Japanese workers and entrepreneurs began to dominate the truck farming and flower and nursery industries. The Japanese, who developed more efficient ways of farming and getting crops to market soon began to put white farmers out of business.  White Californians responded with alien land laws in 1913 and 1920 which banned the sale of land to foreign-born Japanese and also prohibited leasing land to the same for more than three years. The Japanese merely responded by putting the land deals in the names of their native-born children, and the cycle continued, until Roosevelt solved many of the whites’ problems by simply locking the Japanese in concentration camps.

If one wishes to really fight private-sector discrimination and to ensure that no community or ethnic group is forced to submit to terms dictated by any monopolist, it is government regulation that must be opposed, as such regulations restrict choice and impose partial or complete lack of choice for consumers. The higher the bar is placed for entry into the marketplace by regulators, the less choice and competition there will be. With government monopolists, we have a much tougher row to hoe, as most people today accept that government agencies should enjoy a monopoly on a variety of industries, including law enforcement. The solution lies in first accepting that discrimination imposed by government agents is far more dangerous and destructive than anything a private sector actor in an unhampered market could attempt. And finally, it is important to remember that the key factor in understanding the degree to which discrimination can be harmful lies not in the discrimination itself, but in the extent to which the discriminating party enjoys a monopoly over goods and services with the industry in question.