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  • Presumption of Innocence Is Social Justice

    I have a friend in Papua New Guinea named Monica Paulus who was accused of casting sorcery spells because a person died in her village. Her neighbors almost murdered her until she fled the region. Now she works to save other women falsely accused of sorcery who are targets of torture and killing. This is a window into the mob violence Western civilization crawled slowly out of through the establishment of principles like the presumption of innocence.

    To millions of Americans, Brett Kavanaugh seems just as guilty as Monica seemed to her accusers. They sincerely believe, because of the power groupthink has over the human mind, that Kavanaugh has all the signs of their suspected profile of an abuser of women: rich, white, elite Catholic school attendee, conservative, and nominated by Donald Trump. Millions of people have repeated this so often that it feels deeply true. Plus, there were accusations!

    Monica’s accusers believed she fit the profile of a witch. Once the first accusation was levied, it was easy for others to believe it was true. From an outside vantage, charges of deadly sorcery seem absurd to third-party observers. But in Monica’s culture, belief in the power of sorcery to kill children and cause calamity has been universal for millennia. Though recent infections of Christianity have shaken it, sorcery is still a fact of life.

    Personhood has been a hard-fought prize of Western civilization. The idea that an individual person has a right to their own life and liberty regardless of the passions of the collective is a relatively new and fragile gain for humanity. For most of history, the individual person accused by a crowd or community had no ability to escape its all-consuming wrath.

    Humans without Christ-rooted protection for the individual quickly descend into very dangerous, unthinking crowds.

    In the book of Genesis, Potiphar’s wife accused her Hebrew servant Joseph of trying to rape her when, in fact, she tried to seduce him. Joseph was thrown into prison for this false accusation without any need for corroboration except the cloak she had ripped from him.

    “Believe Our Women!” could have been the slogan organizers used during Jim Crow against black men falsely accused of sexual violence. The “justice” crowds felt as sure about their scapegoats’ guilt as new partisan crowds do about their conservative targets. To mobs, a person’s wealth or poverty or race is sufficient reason to ignore their humanity and cast shame.

    Even popular cinema reflects a healthy suspicion of collective accusations. In the film Edward Scissorhands, a woman falsely accused Edward (Johnny Depp) of sexual assault after he spurned her advances in a barber shop. Her tears led to an angry mob destroying the life of an innocent.

    To that mob, Edward’s differentiation from their shared cultural identity made him a very guilty rapist.

    That zeal is what possesses the minds of people who think that dressing out-of-fashion, having opposing political opinions, or bearing a “guilty” skin color makes one eternally suspect for non-corroborated accusations.

    In 18 AD, if a woman claimed a high magistrate tried to sexually assault her when they were teens, she would be ignored, arrested, or executed without anything but derision in every society around the world. Two-thousand years of Jesus’s personhood revolution has made it so that such a claim against the highest of officials is rightfully treated with sacred care and gravity.

    Victim-garbed political stunts and witch hunts are growing. But those weeds take root in the cultural soil cultivated by the Crucified One. The first shall be last and the last shall be first.

    We should take survivors of assault seriously, and we do that by never using them as props for political power and by creating a culture that treats every human as sacred and worthy of supreme dignity.

    We have much to learn from a survivor of witch hunts like Monica Paulus. We should protect the voice of the powerless in the face of violence. We should treat human beings as individual persons, not pawns of identity-exploiting optics. We should fight for the presumption of innocence, not just in the court of law but as the cultural norm we grant the accused in discourse. Finally, we should remember that politics is a thin laminate on the passions and fits of human crowds: the mobs we see in recent days are a revelation of the heart of the whole enterprise.

    The State, a monopoly on violence against nonviolent persons in a given territory, is not to be trusted with centrally planning our lives. One court of nine sages deciding personal matters and vices for 300 million people just sounds like a really bad cultic idea.

    The Founders never intended the court to have such broad, sweeping ex nihilo powers of legal decree. Congress has the power to limit the Supreme Court’s jurisdiction. Decentralizing power closer to home will go a long way to easing tensions between neighbors who feel powerless when their rivals win power over our current winner-takes-all DC Leviathan.

    Monica Paulus’s example in Papua New Guinea offers a final clue as to how we should fight for justice in America. After facing gruesome near-death, she had opportunities to flee to a safe space. But she stayed.

    To this day, she continues to work in villages in which witch burnings are still used to solve social tensions and grief. She actively intervenes in the midst of self-righteous crowds—convinced of their targets’ guilt—to save women from horrible deaths. She does not seek revenge against those who accuse her. She seeks to end collective violence and protect the personhood of all people, no matter who they are.

    I’m with Monica.

    Source: Presumption of Innocence Is Social Justice – Foundation for Economic Education


  • Regulate Google, Facebook, and Twitter as Public Utilities? Bad Idea.

    Free markets can be hard. They might not produce outcomes you personally like. This is why we have such extensive literature on economic inequalitypublic goods, or merit goods, among other alleged market failings.

    Government provision or regulation is usually the proposed solution to these market failings. But advocates for free markets will point out that this cure is, in many cases, worse than the disease. Economics undergraduates will hear much in their classes about “market failure,” but the problem of “government failure” is at least as widespread.

    However, even for free-market advocates, it can be a tough principle to cling to when the market isn’t doing what they would like. For some, it is too tough. When faced with a market outcome they disapprove of, some embrace the very government intervention they usually oppose.

    A case in point is the Internet, specifically websites such as Twitter, Google, and Facebook. Many conservatives believe these companies are politically biased and are “censoring” conservative content in various ways or promoting their opponents. They propose increased government regulation of these companies. They are said to be “public utilities” that require the hand of government a little heavier on their shoulder than other businesses.

    Personally, I can readily believe these websites are biased and do discriminate against certain political views. But what should the government do about that? Should it do anything?

    Underlying this argument is the notion that public utilities are a class of producer apart from most others we leave to the discipline of the market. What sets public utility producers apart?

    Nothing. My old (1992) edition of the Penguin Dictionary of Economicsdefines a public utility as follows:

    An industry supplying basic public services to the market and possibly enjoying monopoly power. Usually, electricity, gas, telephones, postal services, water supply, and rail and often other forms of transport are regarded as public utilities. These services all require specialized capital equipment and elaborate organization.

    Capital is heterogeneous; it is all, to some degree, specialized. Is the capital required to produce automobiles more specialized than that required to produce postal services? Is the organization of a bus company really so much more elaborate than that of Amazon that it belongs in a different, more tightly regulated class of business? More useful is my old (1965) Everyman’s Dictionary of Economics definition:

    Public Utilities, groups of industries in a monopoly position supplying “essential” goods and services, subject to public regulation designed to ensure that they operate “in the public interest.” It is difficult to say which industries fall within this definition since what constitutes “the public interest” or “essential goods” is a matter of personal and political opinion.

    In an age where we can choose between countless different handsets and competing networks, where I can watch live English football on my phone while traveling through rural Minnesota, it might seem bizarre that telephones were once considered something that should be provided by the same people who brought us the Veterans Administration. At one time, even such a staunch advocate of free markets as Milton Friedman thought this. In the 1975 edition of his book An Economist’s Protest, he wrote that “there are some cases, of which telephone is probably one, where technical considerations enforce monopoly.”

    Why has our attitude toward telephones changed?

    Technological progress is part of the answer. This has changed the “technical considerations” Friedman cited back in 1975. There is no longer any technical argument that all telephone users need to be on one network that government is required to regulate.

    But the proximate cause is a change in regulation itself. In the 1920s and 1930s, government became concerned that “competition resulted in duplication of investment.” It stepped in to restrain such duplication by granting monopolies. In an attempt to safeguard the consumer from the effects of this intervention, government intervened again. The Communications Act of 1934 authorized the Federal Communications Commission “to impose service requirements priced at regulated rates. Any deviations in product or service required government approval, a laborious process then as now,” explained Diane S. Katz in a 2004 paper published by the Mackinac Center for Public Policy.

    This is how “AT&T secured its dominance over telephone service for decades to come, controlling more than 80 percent of all telephone lines and assuming family status as ‘Ma Bell.’” There was nothing “natural” about the monopoly—it was created by government regulation in the first place.

    And, when regulation changed, the monopoly it had created collapsed. As LiveMint has pointed out:

    The company’s monopoly was broken up in 1984, with the parent retaining long-distance telephony and the seven regional “Baby Bells” becoming de facto local monopolies providing local services. Long-distance services became heated with competition, with the entry of MCI and Sprint. Due to AT&T’s break-up, the charges that long-distance carriers had to pay regional Bells became transparent. Until 1984, these charges were opaque, and mother AT&T actually used to subsidize local calls. In fact, after the break-up, the local calls became more expensive, rising faster than the rate of inflation. This was also the period of the entry of VOIP (voice over Internet protocol) into telephony.

    As we look back at the saga of the AT&T break-up, it looks strange and archaic. That’s because the emergence of the Internet, the mobile phone and cable plus satellite television was mostly post 1984…

    Just as the monopoly in telephony was a consequence of government regulation, so, also, was the technical progress that makes such a mockery of the notion that telephony is a monopoly a consequence of deregulation.

    In contrast to the blunt instrument of government regulation, producers in free markets are regulated by competition and consumer tastes.

    Facebook, Google, and Twitter may look like monopolists requiring tighter government regulation now, but so did MySpace back in 2007.

    In February 2007, The Guardian asked: “Will MySpace ever lose its monopoly?” In April 2008, Facebook overtook MySpace in the Alexa rankings, and in 2009 Myspace lost half of its user base. As the example of telephony after 1984 demonstrates, if individuals and businesses are allowed to innovate in a free market, they will. For all the talk about “network effects,” “economies of scale,” or whatever else, MySpace’s vaunted “monopoly” was destroyed in a year by such innovation. In contrast, government regulation granted AT&T a monopoly and protected it.

    Facebook, Google, and Twitter may look like unbeatable monopolists requiring tighter government regulation now, but so did MySpace back in 2007. If Facebook’s potential competitors are allowed to innovate in a free market, they will. And, one day, perhaps Mark Zuckerberg will simply be an affectionate memory, like Tom of MySpace fame.

    Source: Regulate Google, Facebook, and Twitter as Public Utilities? Bad Idea. – Foundation for Economic Education


  • How America’s Use of Economic Warfare Could Spark a Currency Crisis

    The Trump administration dropped 44,000 bombs in its first year, a faster bombing pace than President Obama, who bombed more than President Bush. America has intervened militarily in other countries for decades against the council of founders like George Washington, who advised that America should “observe good faith and justice towards all nations; cultivate peace and harmony with all.”

    But the U.S. doesn’t only project power across the globe through its massive military. It also weaponizes the U.S. dollar, using its economic dominance as both a carrot and a stick.

    The U.S. government showers billions of dollars in foreign aid to “friends.” On the other hand, “enemies” can find themselves locked out of the global financial system, which the U.S. effectively controls using the dollar.

    How exactly does the United States weaponize the dollar?

    It utilizes the international payment system known as SWIFT.

    SWIFT stands for the Society for Worldwide Interbank Financial Telecommunication. The system enables financial institutions to send and receive information about financial transactions in a secure, standardized environment. Since the dollar serves as the world reserve currency, SWIFT facilitates the international dollar system.

    SWIFT and dollar dominance give the U.S. a great deal of leverage over other countries.

    The U.S. has used the system as a stick before. In 2014 and 2015, it blocked several Russian banks from SWIFT as relations between the two countries deteriorated. More recently, the U.S. threatened to lock China out of the dollar system if it failed to follow U.N. sanctions on North Korea. Treasury Secretary Steven Mnuchin threatened this economic nuclear option during a conference broadcast on CNBC:

    If China doesn’t follow these sanctions, we will put additional sanctions on them and prevent them from accessing the U.S. and international dollar system, and that’s quite meaningful.

    A number of countries, including China, Russia, and Iran, have taken steps to limit their dependence on the dollar and have even been working to establish alternative payment systems. A growing number of central banks have been buying gold as a way to diversify their holdings away from the greenback. It comes as no surprise that countries on shaky ground with the U.S. would take such measures, but even traditional U.S. allies have grown weary of American economic bullying.

    On Sept. 24, the E.U. announced its plans to create a special payment channelto circumvent U.S. economic sanctions and facilitate trade with Iran. E.U. foreign policy chief Federica Mogherini made the announcement after a meeting with foreign ministers from Britain, France, Germany, Russia, China, and Iran. She said the new payment channel would allow companies to preserve oil and other business deals with Iran:

    In practical terms, this will mean that E.U. member states will set up a legal entity to facilitate legitimate financial transactions with Iran and this will allow European companies to continue to trade with Iran in accordance with European Union law and could be open to other partners in the world.

    The plan comes in response to Donald Trump’s decision to withdraw from the Iran nuclear deal. The E.U., Russia, and China released a joint statement saying the “Special Purpose Vehicle” will “assist and reassure economic operators pursuing legitimate business with Iran.” The statement also said the signatories to the Iran deal “reconfirmed their commitment to its full and effective implementation in good faith and in a constructive atmosphere.”

    The Special Purpose Vehicle will serve as a clearinghouse for transactions with Iran. An Al Jazeera reporter explained it this way:

    If the Italians want to buy some Iranian oil, they will wire the money to this entity which will then handle the financial transactions from there and vice versa. There will be no involvement of commercial banks and central banks, both of whom are terrified at the prospect of US retribution if they are seen to be going against US sanctions.

    Rodger Shanahan, a research fellow at the Lowry Institute for International Policy, called the plan “a poke in the eye for the U.S.”

    America’s undeclared wars have cost trillions of dollars. Economic warfare could come at a similar price. De-dollarization of the world economy would likely perpetuate a currency crisis in the United States, and it appears a movement to dethrone the dollar is gaining steam. This is yet another consequence of the U.S. government abandoning the constitutional requirement for sound money. The Federal Reserve perpetuates the system with its money printing and interventionist monetary policy.

    As James Madison said, “Of all the enemies to public liberty war is, perhaps, the most to be dreaded, because it comprises and develops the germ of every other.” War always comes at a steep cost—whether military or economic.

    Source: How America’s Use of Economic Warfare Could Spark a Currency Crisis – Foundation for Economic Education