11/17/2008

Drug policy and the community

For some time now, it has seemed to me that laws against recreational drugs were an attempt to protect people from themselves. This alone makes the drug laws unwarranted, and an immoral intervention into the personal rights and responsibilities of individuals. Furthermore, if we look at the drug abuse problem, it seems obvious to me that either addiction is real, and drug abusers need medical help, or it's not real, and it really is a matter of personal choice. Addiction might undermine personal responsibility, but neither possibility justifies criminal prohibition.

How will jail time and confiscation of personal property help the drug abuser? And why should such penalties be applied to responsible drug users who do not have an abuse problem? Exactly who is being harmed by these activities? Even if you say friends and families are being "harmed", that still doesn't justify the penalties. After all, does it make any sense that the way to save the "destruction of families" is to do just that: destroy the family?

Furthermore, after spending some time with a drug addict who can't seem to help herself, I'm more convinced than ever that criminal prosecution is a stupid way of dealing with the problem. In an old column (from the 90s, IIRC), George Will once wrote about drugs that it was better to have a localized criminal problem than a generalized social problem. Nice try, George, but the trouble with "localized criminal problems" is that they tend to not stay "localized". Even as a criminal problem, it is still also a social problem, but the criminal laws make it harder to deal with as a social problem. Also, these drug laws are diverting law enforcement efforts away from their legitimate function of protecting individual rights, providing us all with less general protection. Thus, the drug laws themselves are hurting society in general.

One other thought has occurred to me, besides the "friends and family" argument. Given that drug users are perceived as unproductive or underproductive members of society ("slackers"), it may be that the justification for drug laws is the productivity of society, that drug users are harming society by not being more productive. This is more of a communitarian argument, and depends upon the belief that the individual must be subservient to the community as a whole, or at least, that individual rights are no greater than the needs or rights of the community as a whole, and need to be balanced.

Once brought out in the open, this argument is easy to demolish. Wasting law enforcement resources on recreational drug users does nothing to make the community more productive. It also assumes that individual rights and society in general are in conflict, which is itself an unexamined and I think unwarranted assumption: the rights of the individual and the interests of the community are properly complementary to each other, and not necessarily antagonistic--the community is simply a bunch of individuals with certain things in common, like locality or interests. Finally, there are plenty of other unproductive or underproductive people in society, and they are not criminalized. In fact, some of them are "rewarded" for being unproductive: welfare recipients, farmer subsidies, corporate bailouts, etc.

The real problem in dealing with the communitarian argument may be making people aware that they are holding these assumptions in their subconscious, and not recognizing them as assumptions.

Ending drug prohibition (the War on Drugs) won't solve the drug problem by itself, but it will stop creating additional, unintended problems for us, making it harder and more intractable for society to deal with. Ending the assumptions about drugs and drug use is a good place to start towards ending drug prohibition.

11/03/2008

Laissez-faire and the Financial Crisis

It's funny how so many people are ready to jump on laissez-faire, the free market, or capitalism as the cause of the financial crisis. Exactly when did we have this glorious economic period, anyway? There are regulations too numerous to mention, and of which people are obviously unaware, to believe "deregulation" was the cause of the crisis. If nothing else, the mere existence of the Federal Reserve should disabuse anyone of that notion.

Laissez-faire no more caused the current crisis than it did the Great Depression of the 1930's. Anyone who thinks Herbert Hoover sat on his hands and did nothing when the Crash occurred needs to read some more history. Hoover did quite a bit in trying to deal with the crash. And Hoover himself was no big fan of laissez-faire, and says so in his book The Challenge to Liberty. When Franklin Roosevelt took office, he did the same basic things that Hoover did, only on a larger scale. Unfortunately, since they were both unwilling to admit how much the Federal Reserve, created in 1913, had to do with the problem, their actions were useless at best, and most likely helped to prolong the Depression, instead of ending it.

The Fed made possible the Roaring 20s, the biggest boom this country had ever seen, but it was unsustainable, created by the Fed's loose money and easy credit policies. Austrian Economics describes this problem as part of their theory on business cycles. The bust we know as the Great Depression necessarily had to follow so that the market could correct the malinvestment created by the Fed's policies.

These same policies have cursed us over the decades since then, giving us continual (although gradual) inflation that has degraded the value of our money and earnings, and created other boom and bust cycles, though not as big as the one of the 20s and 30s.

The dot com bubble of the 90's was one such boom/bust period, and now the housing bubble of the 2000's is just the latest boom and bust that we are experiencing as the financial crisis.

Without understanding the causes of the financial crisis, especially the Fed's part in it, neither Obama nor McCain will be able to fix the problem, any more than Hoover or FDR were able to fix the Depression.

Why do people want to blame laissez-faire, free market capitalism? I can most charitably conclude that it stems from a misunderstanding of laissez-faire. The essential argument they make is that the Fed and the federal regulators allowed the banks and Wall Street too much unregulated freedom to operate, and didn't properly constrain them when they made bad decisions. And yet, even if that were true, they were still protected from the consequences of their bad decisions, as government regulation was still in place to back them up or bail them out.

This freedom without responsibility is license, made possible by government regulations, not the lack of regulation. In a laissez-faire, free market capitalist economy, freedom and responsibility go hand-in-hand. Businesses would be free to make decisions, but would suffer the consequences of bad decisions, usually in the form of losses. The losses would tell them to change their policies, or else risk going out of business and letting other businesses take over their assets. They would not be able to socialize their losses as government is allowing them to do now.

Technically, I suppose government license, protection, or subsidy should not be considered government "regulation" the way other government rules and regulations are, but nonetheless, it would not be possible without government policies and power. This crisis could not have occurred in a true laissez-faire, free market capitalist economy, and this is true even if we accept the arguments about "deregulation" leading to the crisis. Governments allowing license or freedom without responsibility is no better than governments requiring burdensome regulation (responsibility) without freedom.