Will the Equifax Data Breach Finally Spur the Courts (and Lawmakers) to Recognize Data Harms?

Will the Equifax Data Breach Finally Spur the Courts (and Lawmakers) to Recognize Data Harms?



This summer 143 million Americans had their most sensitive information breached, including their name, addresses, social security numbers (SSNs), and date of birth. The breach occurred at Equifax, one of the three major credit reporting agencies that conducts the credit checks relied on by many industries, including landlords, car lenders, phone and cable service providers, and banks that offer credits cards, checking accounts and mortgages. Misuse of this information can be financially devastating. Worse still, if a criminal uses stolen information to commit fraud, it can lead to the arrest and even prosecution of an innocent data breach victim.

Given the scope and seriousness of the risk that the Equifax breach poses to innocent people, and the anxiety that these breaches cause, you might assume that legal remedies would be readily available to compensate those affected. You’d be wrong.

While there are already several lawsuits filed against Equifax, the pathway for those cases to provide real help to victims is far from clear. That’s because even as the number and severity of data breaches increases, the law remains too narrowly focused on people who have suffered financial losses directly traceable to a breach.

The law consistently fails to recognize other sorts of harms to victims. In some cases this arises in the context of threshold “standing” to sue, a legal requirement that requires proof of harm (lawyers call it “injury in fact”) to even get into the door in federal courts. In other cases the problem arises within the claim itself, where “harm” is a legal element that must be proven for a plaintiff to win the case. Regardless of how the issue of “harm” comes up, judges are too often failing to ensure that data breach victims have legal remedies.

The consequences of this failure are two-fold. First, there’s the direct problem that the courthouse door is closed to hundreds of millions of people who face real risk and the accompanying reasonable fears about the misuse of their information. Second, but perhaps even more important, the lack of legal accountability means that the companies that hold our sensitive data continue to have insufficient incentives to take the steps necessary to protect us against the next breach.

Effective computer security is hard, and no system will be free of bugs and errors.

But in the Equifax hack, as in so many others, the breach resulted from a known security vulnerability. A patch to fix the vulnerability had been available for two months, but Equifax failed to implement it even though the vulnerability was being actively exploited. This wasn’t the first time that Equifax has failed to take computer security seriously.

Even if increasing liability only accomplished an increased incentive to patch known security problems, that alone would protect millions of people.

The High Bar to Harm

While there are exceptions, too often courts dismiss data breach lawsuits based on a cramped view of what constitutes “harm.” These courts mistakenly require actual or imminent loss of money due to the misuse of information that is directly traceable to a single security breach.

Yet outside of data breach cases, courts routinely handle cases where damages aren’t just a current loss of money or property. The law has long recognized harms such as the infliction of emotional distress, assault, damage to reputation and future business dealings.1Victims of medical malpractice and toxic exposures can receive current compensation for potential for future pain and suffering. As two law professors, EFF Advisory Board member Daniel J. Solove and Danielle Keats Citron, noted in comparing data breach cases to the recent claims of emotional distress brought by Terry Bollea (Hulk Hogan) against Gawker: “Why does the embarrassment over a sex video amount to $115 million worth of harm but the anxiety over the loss of personal data (such as a Social Security number and financial information) amount to no harm?”

For harms that can be difficult to quantify, some specific laws (e.g. copyright, wiretapping) provide for “statutory damages,” which sets an amount per infraction.2

The recent decision dismissing the cases arising from the 2014-2015 Office of Personnel Management (OPM) hack is a good example of these “data breach blinders.” The court required that the plaintiffs—mostly government employees—demonstrate that they faced a certain, impending, and substantial risk that the stolen information would be misused against them, and that they be able to trace any harm they alleged to the actual breach. The fact that the data sufficient to impersonate was stolen, and stolen due to negligence of OPM, was not sufficient. The court then disappointingly found that the fact that the Chinese government—as opposed to ordinary criminals—are suspected of having stolen the information counted against the plaintiffs in demonstrating likely misuse.

The ruling is especially troubling because we know that it can take years before the harms of a breach are realized. Criminals often trade our information back and forth before acting on it; indeed there are entire online forums devoted to this exchange. Stolen credentials can be used to set up a separate persona that incurs debts, commits crimes, and more for quite a long time before the victim is aware of it. And it can be difficult if not impossible to trace a problem with credit or criminal activity misuse back to any particular breach.

How are you to prove that the bad data that torpedoed your mortgage application came from the breaches at Equifax as opposed to the OPM, Target, Anthem, or Yahoo breaches, just to name a few?

What the Future Holds

When data is being declared the ‘oil of the digital era’ and millions in venture capital funding await those who can exploit it, it's time to reevaluate how to think of data breaches and misuse, and how we restore access to the courts for those impacted by them.

Simply shrugging shoulders, as the OPM judge did, is not sufficient. Courts need to start applying what they already know in awarding emotional distress damages, reputational damages, and prospective business advantage damages to data breach cases, along with the recognition of current harm due to future risks, as in medical malpractice and pollution cases. If the fear caused by an assault can be actionable, so should the fear caused by the loss of enough personal data for a criminal to take out a mortgage in your name. These lessons can and should be brought to bear to help data breach victims get into the courthouse door and all the way to the end of the case.

If the political will is there, legislatures, both federal and state, can step up and create incentives for greater security and a much steeper downside for companies that fail to take the necessary steps to protect our data.

The standing problem requires innovation in crafting claims, but even the Supreme Court in the recent Spokeo decision recognized that intangible harms can still be harms under the Constitution and Congress can make that intention even more clear with proper legislative language. Alternately, as in copyright or wiretapping cases where the damages are hard to quantify, Congress can use techniques like statutory damages to ensure that those harmed receive compensation. Making such remedies clearly available in data misuse and breach cases is worthy of careful consideration. So far, the federal bills being floated in response to the Equifax breach and earlier breaches do not remove these obstacles to victims bringing legal claims and ensure a private right of action.

Similarly, outside of the shadow of federal standing requirements, state legislatures can consider models of specific state law protections like California’s Lemon Law, formally known as the Song-Beverly Consumer Warranty Act. The Lemon Law provides specific extra remedies for those purchasing a new car that needs significant repairs. States should be able to recognize that data breach situations are special and may similarly require special remedies. Things to consider are giving victims easier (and free) ways to clean up their credit rather than just the standard insufficient credit monitoring schemes.

By looking at various options, Congress and state legislatures could spur a race to the top on computer security and create real consequences for those who choose to linger on the bottom.

Of course, shoring up our legal remedies isn’t the only avenue for incentivizing companies to protect our data better. Government agencies like the Federal Trade Commission and state attorneys general have a role to play, as does public pressure and media attention.

One thing is for sure: as long as the consequences for neglecting to protect user data are weak, data breaches like the Equifax breach will continue to occur. Worse, it will become increasingly difficult for victims to demonstrate which breach caused their credit rate to drop, their job prospects to dim, or their hopes for a mortgage to be dashed. It’s long past time for us to rethink the approach to harm in data breach cases.

 

 

• 1.Most of the ideas here come from a terrific forthcoming law review article: Daniel J. Solove & Danielle Keats Citron, Risk and Anxiety: A Theory of Data Breach Harms, 96 TEx. L. REV. (forthcoming 2017) (manuscript at 12), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2885638.
• 2.While we have been sharply critical of the mismatch between statutory damages and harm in copyright law, the idea itself is worthwhile in situations where harm is difficult to prove.

Source: Will the Equifax Data Breach Finally Spur the Courts (and Lawmakers) to Recognize Data Harms? | Electronic Frontier Foundation

How the Debate on Climate Change Is Cooling Down

How the Debate on Climate Change Is Cooling Down

In a previous column, I noted that the typical audience reaction to my talks about the improving state of the world is not joy and thankfulness for the progress that humanity is making in tackling age-old problems such as infant mortality, malnutrition, and illiteracy. Rather, it is the concern about the exhaustion of natural resources and the supposedly irreparable harm that humanity is causing to the environment.

Apocalyptic warnings about the end of the world as we know it are as old as humanity itself, but recent news should give the doomsayers some food for thought and lower the temperature, so to speak, in the debate about global warming and its future effects on the planet.

The Models Were Wrong

In a new study that was published in the journal Nature Geoscience, leading climate scientists have adjusted their previous predictions about global warming and stated that the worst impacts of climate change are still avoidable. Professor Michael Grubb, an international energy and climate change scientist at University College London, said that previous scientific estimates were incorrect because they were based on computer models that were running “on the hot side.”

According to the new estimates, the world is more likely than previously thought to achieve the main goal of the 2015 Paris agreement and limit global warming to only 1.5°C higher than was the case in the pre-industrial era. Only two years ago, many scientists dismissed the 1.5°C goal as too optimistic and Professor Grubb went as far to say that “all the evidence from the past 15 years leads me to conclude that actually delivering 1.5°C” is unattainable.

While it is true that the average global temperature is 0.9°C higher than in the pre-industrial era, the scientists now admit that there was a slowdown in warming in the 15 years prior to 2014 – a slowdown that the models did not predict or account for. Professor Myles Allen, another one of the study’s authors, said “We haven’t seen that rapid acceleration in warming after 2000 that we see in the models. We haven’t seen that in the observations.”

What has changed in the model forecasts since the Paris summit in 2015? The data showing that the climate models are running “on the hot side” has been available for years. In 2015, my colleagues Patrick Michaels and Chip Knappenberger noted that climate models have been overestimating the rate of warming for decades. In 2016, John Christy from the University of Alabama in Huntsville testified before the US Congress that the climate models were inaccurate. For their trouble, all three have been labeled “climate change deniers.”

The Nature Geoscience study suggests that humanity has more time to transition away from fossil fuels. Should it? That’s debatable, argues William Nordhaus, a professor of economics at Yale University, and his coauthor Andrew Moffatt, in a recently released paper for the National Bureau of Economic Research. The paper combines econometric and climate models to estimate the future impact of global warming on worldwide income.

The Laws of Economics Still Apply

By studying 36 estimates of the costs of global warming, the pair predicts that 3°C warming will reduce global income by 2.04 percent and 6°C warming will reduce global income by 8.16 percent by 2100. Nordhaus and Moffatt’s estimates parallel the broad consensus. For example, the IPCC in their Fourth Report estimated that global “mean losses could be 1 to 5 percent of GDP for 4°C of warming”.

As Ronald Bailey of Reason magazine calculates, current global average income per capita is about $10,000. If the world grows at 3 percent per year over the next 80 years or so, global average income per capita will rise to $97,000. According to Nordhaus and Moffatt’s estimations, therefore, an increase in global temperature by 3°C would reduce global average income per capita by $2,000 to $95,000. A 6°C increase in global temperature would reduce global average income per capita by $8,000 to $89,000.

“We have a predicament,” Bailey concludes. “How much are we willing to spend in order to make those living in 2100, who will likely be at least nine times richer than us today, $2,000 better off?”

That is not a purely academic question. Thanks to the concerns over global warming, governments throughout the world have been busy imposing serious additional costs on economic development and reducing real living standards of ordinary people so as to facilitate the fastest possible transition away from fossil fuels. The above studies add to the complexity surrounding the subject of global warming and human response to it. They also strengthen the case of those who argue that any such transition should be driven by technological change, not government mandates.

Reprinted from CapX

Marian L. Tupy


Marian L. Tupy is the editor of HumanProgress.org and a senior policy analyst at the Center for Global Liberty and Prosperity.

This article was originally published on FEE.org. Read the original article.

Stop the Border Surveillance Bill

Stop the Border Surveillance Bill



EFF opposes a new federal bill that would dramatically expand dragnet biometric and other surveillance of U.S. citizens and immigrants alike at and near the U.S. border. Sen. Cornyn (R-TX) introduced S. 1757, styled the Building America’s Trust Act, in August.

EFF’s opposition letter objects to the following provisions of the bill:

Biometric Border Screening. The bill would require the Department of Homeland Security (DHS) to collect biometric information from all people who exit the U.S., including U.S. and foreign citizens. This would entrench and expand DHS’s existing program of facial recognition of all international travelers who take certain outgoing flights from U.S. airports. EFF opposes such biometric border screening, given the sensitivity of biometric information, the threat it will be stolen or misused, and the hazard of mission creep.

Collection of Immigrants’ DNA. The bill would require DHS to collect DNA and other biometric information from “any individual filing an application, petition, or other request for immigration benefit or status.” EFF has long opposed dragnet biometric surveillance of immigrants. DNA surveillance raises special concerns, because DNA can expose sensitive information about familial history and health issues.

Dissemination of Immigrants’ Biometrics. The bill would require DHS to share its biometric information about immigrants with the FBI, the Defense Department, and the State Department. It also would require DHS to store its voiceprints and iris scans of immigrants in a manner compatible with state and local law enforcement database. EFF opposes this dissemination of immigrants’ biometrics. The greater the distribution, the greater the risks of theft, employee misuse, and mission creep.

Screening Social Media of Visa Applicants. The bill would require DHS to review the social media accounts of visa applicants from “high risk countries.” EFF opposes existing DHS and State Department programs of screening social media of foreign visitors. These programs threaten the digital privacy and free speech of innocent foreign travelers, and the many U.S. citizens who communicate with them. The bill would entrench and expand these programs. Also, it is all too likely that the bill’s focus on “high risk countries” will invite “extreme vetting” of visitors from Muslim nations.

Drones Near the Border. The bill would require DHS and the Defense Department to deploy drones at the U.S. border. This will invariably capture the faces and license plates of the vast number of U.S. citizens and lawful permanent residents who live close the border.

ALPRs Near the Border. The bill would appropriate $125 million to upgrade the automatic license plate readers (ALPRs) deployed by U.S. Customs and Border Protection. ALPRs collect massive amounts of sensitive location information about identifiable law-abiding people. It is unclear whether the bill’s new ALPR surveillance would be limited to cars that actually cross the U.S. border, or would also apply more broadly to cars at CBP’s many interior checkpoints, some located as far as 100 miles from the border. CBP should not track people’s movements merely because they live and work near the border.

Source: Stop the Border Surveillance Bill | Electronic Frontier Foundation

There Are Racist Emblems, but Chief Wahoo Isn’t One of Them

There Are Racist Emblems, but Chief Wahoo Isn’t One of Them

 

“Everything about the Indians is awesome except their very racist logo ,” proclaimed a USA Today headline last Monday. Cleveland’s baseball team was at that point 18 victories into an amazing winning streak that would stretch to 22 — an American League record and the longest winning streak in major league baseball in more than a century. But baseball writer Ted Berg devoted only a few sentences to the Indians’ brilliant performance before moving to his main subject: “the extremely racist logo they insist on wearing on their caps.”

On any list of knee-jerk PC verities, the “obvious” racism of Chief Wahoo — the cartoon character that has been the Indians logo for seven decades — would be near the top. I get why people make that claim, but I’m going to argue that they’re wrong. Chief Wahoo is not in any way an emblem of bigotry or racial contempt. And those who censoriously insist it is are unwittingly downplaying the ugliness of genuinely racist images.

Origins of the Image

Chief Wahoo was created in 1946 at the request of Bill Veeck, the legendary baseball impresario who was then the Indians’ owner. Veeck hired a designer to come up with an emblem that “would convey a spirit of pure joy and unbridled enthusiasm.” (A few months later, Veeck would make a far more famous hire: He acquired Larry Doby, a star centerfielder from the Negro Leagues, bringing him to the Indians as the first black player in the American League.)

During the decades when the Indians were one of the worst-performing teams in baseball — decades that included my Cleveland childhood in the 1960s and 1970s — Chief Wahoo was pretty much the only thing about the Tribe that conveyed “pure joy and unbridled enthusiasm.” On the few occasions when I went to games at the old Cleveland Municipal Stadium, the vast downtown arena where the Indians used to play, I loved seeing the 28-foot-tall likeness of Chief Wahoo at bat, illuminated at night and towering over Gate D.

For decades, Chief Wahoo has been reviled as (to cite just a few headlines) “ ridiculous and offensive,” “ the most offensive image in sports,” “the grinning face of racism,” and “a national embarrassment .” On the culture-war battlefield nowadays, few activities are more popular than taking offense and playing the race card, so it isn’t surprising that bashing Chief Wahoo is almost as trendy as trashing the name of the NFL’s Washington Redskins.
On the “Redskins” controversy, I'm happy to stand with the 90% of Native Americans who, in a 2016 Washington Post poll, said that the team’s name doesn’t bother them. They doubtless recognized what anyone not pumped up on racial indignation recognizes: No sports team adopts a name or symbol in order to bring contempt upon itself. Apart from handles that are merely whimsical (Red Sox, Jazz, Mighty Ducks) or geographical (76ers, Maple Leafs, Rockies), team names typically suggest traits associated with heroes and winners: the speed of jets, the ferocity of bears, the aggressiveness of predators, the tenacity of cowboys.

That explains the abundance of Indian-themed team names in American sports at every level. Braves, Warriors, Blackhawks, Redskins, Indians — they are nods to a common view of native tribes as brave, tough, noble, and intimidating. If that’s a stereotype, it is a flattering one. It may not be historically accurate, but it could hardly be less of an example of invidious racism.

Looking for a Reason to Be Angry

But Chief Wahoo doesn’t even reflect a stereotype. It doesn’t symbolize any view of American Indians. Nothing about the Cleveland team’s logo pigeonholes or defines Native Americans: It evokes no shibboleth or hackneyed prejudice, it plays into no popular notion or misimpression about Indians, good, bad, or neutral.

And that’s just the point that the Chief-Wahoo-is-racist crowd consistently and passionately get wrong.

Screeds against the Indians’ logo are frequently accompanied by this 2001 advertisement from the National Congress of American Indians:



The ad’s message is harshly unforgiving: Of course the logo of Chief Wahoo, with its toothy grin and feather, is racist, it says: as racist as a caricature of a buck-toothed, squinting Chinese man, or of a hook-nosed, bearded Jew.
But those comparisons are fallacious. Images of near-sighted, smirking Chinese and of devious Jews with huge noses are all-too-familiar slurs — nasty tropes of anti-Asian and anti-Semitic mockery, just as the image of a grinning, watermelon-chomping Sambo is a trope of anti-black mockery. But there is no negative stereotype of wide-eyed, laughing Indians. Chief Wahoo doesn’t reflect contempt for Indians any more than Bugs Bunny reflects contempt for rabbits or than the Boston Celtics logo reflects contempt for the Irish.

Chief Wahoo is not and never has been the “grinning face of racism.” Like Fred Flintstone, Dudley Do-Right, or the bat-swinging, tonsured monk of the San Diego Padres, he is a cheerful, playful cartoon character, nothing more. The Chief Wahoo logo doesn’t hint at any bigoted subtext. Demonizing it as a racist emblem may feel good to those who enjoy parading their liberal sensitivity, but it does nothing to combat actual bigotry or promote tolerance.

Baseball is only a game. In the greater scheme of things, it makes little difference whether the Indians (who clinched the AL Central Division championship on Sunday) win or lose. But it makes a lot of difference to our culture and public discourse whether false accusations of racism are promoted or resisted. Chief Wahoo is innocent and harmless. Critics should save their ire for something that matters.


Jeff Jacoby


Jeff Jacoby has been a columnist for The Boston Globe since 1994. He has degrees from George Washington University and from Boston University Law School. Before entering journalism, he (briefly) practiced law at the prominent firm of Baker & Hostetler, worked on several political campaigns in Massachusetts, and was an assistant to Dr. John Silber, the president of Boston University. In 1999, Jeff became the first recipient of the Breindel Prize, a major award for excellence in opinion journalism. In 2014, he was included in the “Forward 50,” a list of the most influential American Jews.

This article was originally published on FEE.org. Read the original article.

A View From Peace Tower

A view from Peace Tower (Parliament) in Ottawa, Canada - November 2000





A View From Peace Tower (1)
A View From Peace Tower (2)

Stop Conflating Inequality With Poverty

Stop Conflating Inequality With Poverty

The problem of inequality has often been considered to be one of the biggest social problems of our generation.

Widespread concern about the great disparities of income and wealth have fueled anti-globalization sentiments all around the world, and threaten to undermine the advances in trade, investment, and immigration we have seen.

One key problem is that contemporary discussions of inequality have often conflated it with poverty. Not only are inequality and poverty conceptually distinct, a failure to distinguish between them can lead to problematic policy conclusions. Additionally, when market advocates criticize redistributive policies and government welfare programs, they are seen as anti-poor. Thus, separating these two concepts can help market advocates regain the moral high ground in this debate.

Conflating Inequality and Poverty

It is generally assumed that inequality implies poverty, i.e. the rich people are prospering, so poor people must be suffering. This conflation is very subtle and is best seen through the presentation of inequality in the widely-used high school economics textbook Economics (7th ed) by John Sloman (2009). According to Sloman (2009, p. 276):

Inequality is one of the most contentious issues in the world of economics and politics. Some people have incomes far in excess of what they need to enjoy a luxurious lifestyle, while others struggle to purchase even the basic necessities. The need for redistribution from rich to poor is broadly accepted across the political spectrum. Thus the government taxes the rich more than the poor and then transfers some of the proceeds to the poor, either as cash benefits or in kind.”

The chapter seeks to explain the phenomenon of inequality but, almost imperceptibly within this opening paragraph, implicitly suggests that under such unequal situations, there are poor people who “struggle to purchase even the basic necessities.” In fact, this is not necessarily the case.

Inequality in relation to income simply means the existence of a gap between those who earn the most and those who earn the least. The mere existence of an income gap, even if it’s widening, says nothing about the actual income levels of those who do earn the least. In other words, an income gap does not necessarily mean that those at the lowest income brackets are poor. Just because Bill Gates is loaded with greenbacks and is many times richer than I am does not, by itself, suggest that I am “poor” in an absolute sense.

It is clear that a society with a very uneven distribution of income can still be one with high levels of absolute prosperity, in such a way that even those who earn the least (relatively) have enough to survive – comfortably.

Implications of the Conflation

Not only is it possible that the least well-off in unequal societies have enough to survive, it is actually likely for them to be much better off in unequal societies than in more equal ones.

Assuming the absence of crony capitalism, income inequality is a corollary of a free, dynamic, and growing economy that increases prosperity for all.

Attempts to close inequality through standard welfare-state policies such as redistributive taxes, subsidies, minimum wage laws, price controls, and the public provision of “free social goods” like health care can, and often have, slowed down economic growth. Thus impacting the generation of wealth that the least-well-off depend on.

Put another way, policy attempts to fight inequality retard economic growth, slow down poverty reduction at best, and exacerbate poverty at worst.

Aside from the economic costs of state-centric welfare programs, there are less quantifiable human costs as well. Generous welfare programs often trap individuals in a state of dependency on the government, which not only disincentivizes them from working but robs them of the dignity and sense of achievement that comes from earning their own income and being independent and self-sufficient.

Consequently, if poor people were truly at the center of our attention, we should endorse inequality, or at least the market system it is based on. When people are left free to trade, invest and innovate in the market, inequality is inevitable simply because people are different, and some may be more adept at spotting profit opportunities. Yet, if this system is left largely unhampered, it generates vast amounts of wealth that benefits everyone, including the least well off.

This is precisely why poverty rates have fallen dramatically in the recent age of globalisation, and, to that extent, so has global inequality.

The above does not mean that there is no role for government in social policymaking. Yet there is a need to ensure that implemented policies facilitate wealth-creation for all rather than redraw the relative shares of the economic pie. The social policies implemented in the country of Singapore provide useful lessons on how best to help the least well off in any society.

Social Policies that Reward Working

Singapore’s social-welfare system is based on the fundamental principle of meritocracy, considered a cardinal principle in the Singaporean psyche. It has been said that one of the shared values in Singapore is “work for reward, reward for work.” Even where government assistance is provided to the least-well-off, such schemes are carefully designed to promote and encourage work and thus to promote self-reliance. The belief is that Singaporeans should work and take care of themselves, rather than solely depend on the government.

These principles are reflected in several key initiatives. A testament to its pro-work orientation, Singapore’s main “welfare” scheme is titled “Workfare”. One of its components is the Workfare Income Supplement, which provides a cash payment to low-income individuals who are working. It is not a “free handout” but essentially an incentive to encourage work.

A further illustration of Singapore’s pro-work orientation is the other component of this policy: a training support scheme, which incentivizes workers to upgrade their skills in order to increase their productivity and thus their earning potential.

Singapore has also deliberately rejected a national minimum wage law. In its place, it has instead introduced a targeted “Progressive Wage Model” in several low-wage sectors such as cleaning, security, and landscaping. Employers in these sectors are expected to pay their workers a minimum but are also incentivized to send them for retraining in order to increase their productivity. Where typical minimum wage legislation simply expects employers to pay the mandated wage, Singapore’s take on it goes further in its encouragement of productivity improvements.

Subsidies are also provided but only in a limited and targeted fashion. In the healthcare sector, for example, individuals are expected to make co-payments for their medical expenses and cannot rely on government subsidies to simply cover 100% of their bill. More aid is in fact given to the neediest individuals who cannot afford even basic essentials, but the principle of self-responsibility looms heavy in the Singapore system. Not surprisingly, health outcomes in Singapore far exceed those of the United States, even though it spends only a fraction of its GDP on health care in comparison to the USA.

Growth-Oriented Policy

These Singaporean social policies might remain anathema to purist libertarians, who prefer to eliminate all social assistance entirely, but if we must have social welfare policies in the world of here and now, there is a lot to admire in this system. Particularly when observing its targeted, limited nature and its pro-work, pro-responsibility orientation.

Singapore’s leaders have managed to identify the difference between inequality and poverty, and have opted to pursue growth-oriented policies, sometimes even at the expense of the income gap. The Prime Minister Lee Hsien Loong said in 2013:

If I can get another ten billionaires to move to Singapore, my Gini coefficient will get worse, but I think Singaporeans will be better off because they will bring in business, bring in opportunities, open new doors, and create new jobs.”

In conclusion, there is cause for concern about most societies’ obsessive focus on inequality at the expense of the very poor. Conflating inequality and poverty can ironically lead to misguided policies that ultimately hurt the poor.

The next time you’re asked about whether you care about the “problem of inequality”, respond in the negative and that you care too much for poor people instead. Market advocates should always frame markets as a powerful, poverty-killing device, and regain the moral high ground in this most essential debate.

References:

Sloman, John, & Wride, Alison (2009). Economics (7th ed.). Edinburgh Gate: Pearson Education.


Bryan Cheang


Bryan Cheang is a graduate student of Political Economy at King's College London. He is interested in researching into the moral status of markets, and how market institutions promote human welfare. He is also the President of the Singapore Chapter of Students for Liberty.

This article was originally published on FEE.org. Read the original article.

ICOs Will Not Be Defeated

ICOs Will Not Be Defeated

Absolutely nothing–no amount of regulation, no number of belligerent articles, no plethora of hectoring denunciations by big shots–is going to stop ICOs from completely disrupting the way companies raise funding in the future.

The crypto market has been too wonderfully successful without the slightest help from government or the financial establishment. We already know. We’ve seen. The idea is out there. It’s already worked. The deed is done.

But now the counter-revolution is underway, with governments leaning in, establishment spokesmen trying to spook markets, and incumbent financial institutions decrying all disruption to their industry. It’s a coordinated attack.

So it’s about time that people know precisely what an ICO is. It stands for Initial Coin Offering, a token used to express investment interest in ideas that are turned to enterprises. The number of ICOs this year far outstrips Initial Public Offerings of public companies (those seem to be on their way toward extinction) and beats the market capitalization of convention venture capital funding.

A Goofy Explanation

But before we get to the full explanation, consider this brilliant, evocative, and ridiculously misleading description from Kevin Roose from the New York Times.

Imagine that a friend is building a casino and asks you to invest. In exchange, you get chips that can be used at the casino’s tables once it’s finished. Now imagine that the value of the chips isn’t fixed, and will instead fluctuate depending on the popularity of the casino, the number of other gamblers and the regulatory environment for casinos. Oh, and instead of a friend, imagine it’s a stranger on the internet who might be using a fake name, who might not actually know how to build a casino, and whom you probably can’t sue for fraud if he steals your money and uses it to buy a Porsche instead. That’s an I.C.O.

From reading that paragraph, you could suspect that an ICO is a small-time scam that ropes in highly vulnerable population groups (think: the lottery). But if you received Goldman-Sachs' newsletter from August this year, you would have discovered something slightly different. It turns out that in June of this year, ICOs raised $450 million, which surpasses the amount raised by early-stage venture capital funding. The same thing happened again in July. The total raised this year from ICOs is an astonishing $1.5 billion.

ICOs are poised to not only exceed conventional funding sources, consistently over time, but even completely displace them. This is what innovations do. They replace what came before, whether pundits like it or not.

Why It Works

Why is this strategy for raising money for new ventures working so well? There is the most obvious consideration of low barriers to entry. Anyone can float them and anyone can buy them–from and to anyone in the world regardless of geography. There is a larger pool of investors that can bypass the impossibly costly and complex national regulatory machines that have gummed up capital-raising methods in conventional finance.

That the market is mostly deregulated and decentralized, and thereby more active and effective, is itself interesting. No sector is more replete with the myths of “consumer protection” than this one. It seems hard to believe, but the whole basis of the SEC’s house of horrors is that it is all necessary to protect people from rapacious capitalists.

For all I know, the regulators actually believe it.

But the big players know otherwise. The purpose of the national machinery is to protect big shots against upstart competitors. From the point of view of establishment finance, only certain people should be allowed in, with others kept out, which is precisely why there are ever fewer companies that are in the privileged position of going to the public markets at all for funding.

Nothing provides as much connection between entrepreneurs and funding as a real free market. But it has been a long time since the financial markets have been free. ICOs represent an attempt to fix the problem.

New Technology

And the solution is absolutely ingenious. It relies on decentralized markets that live on the Internet, combined with the invention of new tokens that have all the qualities of traditional money, depending entirely on supply and demand for their value, and also serve as asset titles to the protocol of the company itself. These tokens permit companies to crowdfund early operations in the same way that GoFundme, Kickstarter or Indiegogo do, but without the high cost of those platforms and the risk that your funds will be frozen by regulatory intervention.

ICOs use blockchain technology, which is a ledger system of documenting ownership claims in the cloud, creating immutable records that are not kept by a centralized source but are rather shared among all interested parties. This creates the kind of trust that is necessary for commerce but does not require the kind of trust traditional financial intermediaries insist upon for doing any business at all.

Changes in ownership rights are confirmed coming and going, and are made possible by digital units that are called tokens. But these tokens behave both like money and asset shares in the company, or, more precisely, as an expression of ownership interest,  analogous to a digital stock certificate that floats in value. Even so, they don’t entirely conform to the way any existing financial asset works today. They really do amount to something new because, well, all of this is a new invention.

I get why people are a bit alarmed about it all, same as they were by internal combustion, electricity, flight, and, in its day, fire too. All wonderful new things seem implausible and vaguely dangerous at first. As new as the tech is, however, the need it meets–to more reliably establish and document ownership claims–dates to the earliest days of the human experience itself.

Poker Chips

I said that the poker chips analogy is ridiculous. Actually, it is not entirely. Let’s just say that you really could do that, pre-sell chips to your casino and establish a way in which the value of those chips floated against existing currencies. Let me just ask straight out: what would be wrong with that? It’s not allowed now, of course, so probably it sounds crazy. But actually, in a free market, this would be permitted.

What about some dude that runs off with the money and never builds the casino? Well, you are welcome to try to get your money back if you can. But mostly, you should probably learn a lesson: don’t throw good money after bad.

It’s the same with the crypto markets. Some tokens represent brilliant ideas, but many are pump-and-dumps, troll coins, or outright scams. There is a bit of a paradox here. Scammers are entrepreneurs too, and they are like heat-seeking missiles for the latest and greatest profitable ideas. That’s why they are hanging around the crypto space.

And guess what? 100% of everyone involved in these markets knows this. Some people lose their shirts. Better luck next time. Others have become much richer, betting on brilliant platforms that are using blockchain technology to bring new standards of clarity, truth, and efficiency to all the ways we do business.

Should government be involved in regulating them to protect the consumer? If there were the slightest chance that government could do this, it might be tempting to say yes. But no regulatory structures are more prone to capture by special interests than those governing financial markets. Every bit of intervention will be used on behalf of big shots to drive out regular consumers and smaller competitors.

Laissez-Faire Now 

For this reason, government should stay completely away (and I say that knowing that my proclamation will do nothing to stop government from meddling in any case).

There are many projects underway right now that are bringing due diligence to this sector. If any market has proven itself capable of self-regulation, it is this one. It emerged spontaneously with the first release of the Bitcoin blockchain in 2009 and has developed gradually in exactly the way markets are supposed to. So too will the capacity of the sector to police itself will grow as knowledge and sophistication grow.

It’s been an inspiration to watch this sector develop from the White Paper of November 2008 all the way to the latest peer-to-peer portfolio management systems using smart contracting. It’s all happened in nine years, after a time when credibility of conventional regulators, banks, and large financial institutions was shattered during paradigm-shifting crises.

No one knows for sure where it is all headed but this much we do know: there is no going back.


Jeffrey A. Tucker


Jeffrey Tucker is Director of Content for the Foundation for Economic Education. He is also Chief Liberty Officer and founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books, most recently Right-Wing Collectivism: The Other Threat to Liberty, with a preface by Deirdre McCloskey (FEE 2017). He has written 150 introductions to books and many thousands of articles appearing in the scholarly and popular press.

This article was originally published on FEE.org. Read the original article.

Computer Play (February 1989)

Computer Play (February 1989)

A Carbon Tax Won’t Stop Hurricanes

A Carbon Tax Won’t Stop Hurricanes

In the midst of a severe hurricane season and the destruction wrought by Hurricanes Harvey and Irma, many people are claiming that man-made global warming has intensified rainfall and hurricanes. However, comprehensive facts show that rainfall and hurricane activity are well within the bounds of natural variation, and there is no cogent evidence that they have increased over the past century.

Moreover, the United States contains only 1.9 percent of the world’s surface area, and the earth’s climate oscillates widely over time and place. Hence, focusing on US-area hurricanes that occur within a single year easily distorts the issue of climate change.

The Claims

While Hurricane Irma was razing the Caribbean and barreling toward Florida, climate scientist David Hastings told the Washington Post, “Hurricane Harvey and Irma should resolve any doubt that climate change is real.” Likewise:

• CNN’s Ron Brownstein reported during Hurricane Harvey, “There is no doubt that climate change, particularly because of warming the ocean waters and the gulf waters, makes storms like this more common.”
• Meteorologist Eric Holthaus wrote in Politico that “climate change is making rainstorms everywhere worse, but particularly on the Gulf Coast.”
• The BBC’s Laura Trevelyan stated, “Of course we do have a changing climate we do have warming waters. With more warming waters, you get more moisture coming into the atmosphere, and what hurricanes absolutely love is moisture because that gives them rainfall. And that’s what’s happened in this situation with Hurricane Harvey.”

In the same vein, FactCheck.org science writer Vanessa Schipani asserted that global warming “makes intense storms like Harvey more likely to occur.” In support of this statement, she declared that:

• “A warmer world leads to greater moisture in the atmosphere, which leads to greater precipitation, which leads to more intense storms.”
• A 2013 Intergovernmental Panel on Climate Change (IPCC) report “found that scientists are ‘virtually certain’ (99 to 100 percent confident) that there has been an ‘increase in the frequency and intensity of the strongest tropical cyclones since the 1970s’ in the North Atlantic Ocean.”
• One of the “key findings” of a draft report by the U.S. Global Change Research Program is that “human activities have ‘contributed to the observed increase in hurricane activity’ in the North Atlantic Ocean since the 1970s.”
• The same report says that “studies that have looked at this question have come up with a ‘fairly broad’ range of contributions for humans, but ‘virtually all studies identify a measurable, and generally substantial, [human] influence,’ it adds.”

The claims above paint a distorted picture of reality by ignoring the most relevant and comprehensive facts about this issue.

Global Rainfall Trends

Contrary to the notion that global warming has caused more rain, the authors of a 2015 paper in the Journal of Hydrology studied rainfall measurements “made at nearly 1,000 stations located in 114 countries” and found “no significant global precipitation change from 1850 to present.”

The paper also notes that previous studies had analyzed shorter timeframes and found rainfall changes that some people had attributed to global warming, but those results were generally not statistically significant and “not entirely surprising given that precipitation varies considerably over time scales of decades.”

Beyond total rainfall, many climate models predict that global warming will cause the rain to fall in shorter periods, and thus, with more intensity. Yet, even according to the IPCC—which has engaged in deceitful actions to exaggerate global warming—evidence for such an outcome is highly questionable:

Since 1951 there have been statistically significant increases in the number of heavy precipitation events (e.g., above the 95th percentile) in more regions than there have been statistically significant decreases, but there are strong regional and sub-regional variations in the trends. In particular, many regions present statistically non-significant or negative trends, and, where seasonal changes have been assessed, there are also variations between seasons (e.g., more consistent trends in winter than in summer in Europe).

This issue becomes even murkier when looking at the bigger picture, because apparent changes in rainfall intensity sometimes vanish when examining longer timeframes that better account for natural variations. For example, the International Journal of Climatology published a paper in 2015 about extreme rainfall in England and Wales that revealed, “Contrary to previous results based on shorter periods, no significant trends of the most intense categories are found between 1931 and 2014.”

Global Storms and Hurricanes

A “tropical cyclone” is a circular wind and low-pressure system that develops over warm oceans in the tropics. Cyclones with winds ranging from 39 to 73 miles per hour are called “tropical storms,” and those with winds exceeding 73 miles per hour are called “hurricanes.” Technically, there are different names for cyclones with hurricane-force winds in different areas of the world, but for the sake of simplicity, this article refers to them as hurricanes.

The datasets below, which were originally published in the journal Geophysical Research Letters in 2011, show that the global number and intensity of tropical storms and hurricanes have not increased over the past four decades:




Corroborating this data, the IPCC reported in 2012, “There is low confidence in any observed long-term (i.e., 40 years or more) increases in tropical cyclone activity (i.e., intensity, frequency, duration), after accounting for past changes in observing capabilities.”

In spite of these facts, a national scientific poll commissioned by Just Facts shortly before the 2016 presidential election found that 44% of Trump voters and 77% of Clinton voters believed that the global number and intensity of hurricanes and tropical storms have generally increased over the past 30 years. This sharp disconnect between reality and perception accords with a flood of global warming-related misinformation spread by the media and environmental groups.

North Atlantic Storms and Hurricanes

In the North Atlantic region, where hurricanes Harvey and Irma formed, tropical storm and hurricane activity has  significantly increased over the past four decades. However, this trend fades in the wider context of variation over the past century. As explained by the National Oceanic and Atmospheric Administration (NOAA):

No robust trends in annual numbers of tropical storms, hurricanes and major hurricanes counts have been identified over the past 100 years in the North Atlantic basin.

NOAA states that North Atlantic tropical storms show a “pronounced upward trend” since 1878, but this is because these records are “relatively sparse” in their early decades. After NOAA adjusts for the “estimated number of missing storms,” the trend in storm activity is “not significantly distinguishable from zero.” Furthermore, NOAA notes that the upward trend in the unadjusted data,

Is almost entirely due to increases in short-duration (<2 day) storms alone. Such short-lived storms were particularly likely to have been overlooked in the earlier parts of the record, as they would have had less opportunity for chance encounters with ship traffic.

With regard to the most intense storms, NOAA reports that “the reported numbers of hurricanes were sufficiently high during the 1860s-1880s that again there is no significant positive trend in numbers beginning from that era…. This is without any adjustment for ‘missing hurricanes.’”

Even more relevant to the implications of Harvey and Irma, NOAA notes that the record of North Atlantic hurricanes that reach land are “more reliable” than for the entire North Atlantic, and they “show a slight negative trend beginning from 1900 or from the late 1800s.” In other words, the most reliable data shows the opposite of what many media outlets are reporting.

NOAA emphasizes that one cannot logically assess hurricane trends based only on those that reach land because they are “much less common” than the full number of hurricanes that form at sea. This highlights the absurdity of drawing conclusions based on hurricanes that make landfall, much less hurricanes that make landfall in one region in a single year

After reviewing the data above, NOAA states, “In short, the historical Atlantic hurricane record does not provide compelling evidence for a substantial greenhouse warming-induced long-term increase.”

Similarly, the very same 2013 IPCC report cherry-picked by FactCheck.org states, “No robust trends in annual numbers of tropical storms, hurricanes and major hurricanes counts have been identified over the past 100 years in the North Atlantic basin.” This is word-for-word the same as stated by NOAA.

“Scientists Say”

Three times in her FactCheck.org article, Schipani used the phrase “scientists say” as if she were citing the universal opinion of scientists. Given the contents of her article, a longer but honest rewording of this phrase would be that “some scientists who have previously misled the public about global warming say so, but some scientists disagree.”

For example, Schipani quoted climate scientist Michael Mann—creator of the notorious hockey stick chart and inventor of a “trick” to “hide the decline“ in temperatures—as though he were an unquestionable authority. Mann claimed that global warming may have caused Hurricane Harvey to stall over Houston and drop a devastating amount of rain in this location. However, Schipani failed to inform her readers that some other climate scientists, like Roy Spencer, disagree with Mann and write:

I don’t know of any portion of global warming theory that would explain why Harvey stalled over southeast Texas. Michael Mann’s claim in The Guardian that it’s due to the jet stream being pushed farther north from global warming makes me think he doesn’t actually follow weather like those of us who have actual schooling in meteorology (my degree is a Ph.D. in Meteorology). We didn’t have a warm August in the U.S. pushing the jet stream farther north.

Similarly, Schipani uncritically cited:

• The IPCC, whose scientists wrote an array of incriminating emails in which they said things like, “I tried hard to balance the needs of the science and the IPCC, which were not always the same.”
• Kevin Trenberth, an IPCC lead author who participated in a press conference where he misrepresented the facts about global warming and hurricanes. As a result, Chris Landsea, a scientist who Trenberth had tasked to draft a chapter on Atlantic hurricanes for the IPCC, quit the IPCC and stated, “I personally cannot in good faith continue to contribute to a process that I view as both being motivated by pre-conceived agendas and being scientifically unsound.”
• The U.S. Global Change Research Program, which cited a certain paper as evidence that climate change is causing more floods, while in reality the paper states, “In none of the four regions defined in this study is there strong statistical evidence for flood magnitudes increasing with increasing” greenhouse gas levels.

In Conclusion

Certain media outlets have linked Hurricanes Harvey and Irma to global warming by ignoring wide-ranging facts and cherry-picking timeframes, geographical locations, report contents, and the opinions of scientists. As explained in an academic book about analyzing data, “One of the worst abuses of analytics is to cherry pick results. Cherry pickers tout analysis findings when the results serve the purpose at hand. But, they ignore the findings when the results conflict with the original plan.”

Webster’s College Dictionary defines science as the “systematic knowledge of the physical or material world gained through observation and experimentation.” By this standard, there are no grounds to claim that global warming has increased rainfall or hurricane activity.


James Agresti


James D. Agresti is the president of Just Facts, a nonprofit institute dedicated to publishing verifiable facts about public policy.

This article was originally published on FEE.org. Read the original article.

Internet Raises $80K for Hot Dog Vendor Mugged by Government

Internet Raises $80K for Hot Dog Vendor Mugged by Government

Like all entrepreneurs, Beto Matias saw an opportunity to support his family while simultaneously creating value for his community.

Finding a prime spot right outside UC Berkeley’s football stadium, Matias began selling his craft hot dogs to willing consumers. No one complained about the quality of Matias’ hot dogs, nor did anyone have any objections to his presence outside of the stadium. But that didn’t stop the state from intervening.

Street Theft

Officer Sean Aranas approached Matias as he was going about his business and asked to see identification. Matias, in complete compliance with the officer’s demands, began sifting through his wallet in search of his identification. But this is where the story took a devastating turn.

Before Matias was given the opportunity to hand Aranas his ID, the wallet was ripped from his hands. And instead of merely examining his identification, Officer Aranas proceeded to confiscate the $60 Matias had in his wallet at the time. It was not until after this strong-arm mugging that the officer finally explained to Matias that he was being cited for failing to obtain a business permit.

Luckily, one of Matias’ customers filmed the entire encounter on his smartphone and the video has since gone viral.  

Martin Flores knew something wasn’t right when he saw the officer reach for Matias’ wallet. Thankfully, as so many of us are trained to do in the digital age, he pulled out his smartphone and immediately began documenting the encounter. And he did so just in the nick of time.

In Flores’ footage, viewers see the wallet physically taken from Matias as his hard-earned money is stolen right before his eyes. In the background, Flores can be heard saying, “That’s not right.”

Flores even took his role in the matter one step further and while filming, inquires why the officer deemed it necessary to target this innocent vendor over the loud display of public intoxication that was occurring directly across the street. The only response Aranas supplied Flores with was, “Yeah, well he doesn't have a permit. He doesn't have a permit.”

Penalized for Hard Work

To be sure, Matias never denied his lack of a business permit. But he was shocked and taken aback by Aranas’ actions. To be handed an arbitrary citation is one thing, but to have your cash simply snatched by an officer of the law is especially egregious.

Matias later told Telemundo 48:

“I had already shown him my ID. They saw that I was not doing anything wrong, neither stealing nor anything, I was just working to support my family.”

Unfortunately, this kind of thing happens every day.

The most innocuous activities now require state permission: from selling hot dogs to playing tennis. No one can economically survive without a job. And yet, for many, our government makes it impossible to do so without first running an obstacle course of red tape. For a country founded on freedom of opportunity, something has gone horribly wrong. 

In the American workforce, over 30 percent of jobs require an occupational license before an individual can legally earn a living. To make matters worse, many of these permits and licenses target those in the most vulnerable socioeconomic brackets. Not only are these licenses often expensive and require a great deal of paperwork, they are completely arbitrary.

As often as “public health and safety” is cited as justification, licensing does very little to ensure this. It doesn’t matter how well-intentioned the state may be, a permit cannot prevent food poisoning. Occupational licensing has, however, been extremely successful in limiting the number of individuals entering a given work sector. It has also helped protect established industries from unwanted competition, for example, shutting down a “rogue” hot dog vendor operating without a license.

But of the many things licensing does, protecting the consumer is most certainly, not among them.

The market has its own means of protecting consumers through feedback. Even before platforms like Yelp and Google allowed for a free flow of review culture, word of mouth has always served to help keep business owners accountable.

Additionally, consumer loyalty says a lot about a product or service. This is not the first time Matias has sold hot dogs from his cart, and his consumers keep coming back. And “shockingly” enough, no one has died or even reported any instances of foodborne illnesses.

The quality of a service speaks for itself, and this is something that cannot be obtained through a government license.

Outsourcing Justice

Stories like Matias’ occur every day in this country. Unfortunately, many victims of state abuse are never vindicated. But our digital age is changing all this.

Not only is video footage like Flores’ helping to keep law enforcement accountable for their actions, but crowdsourcing is helping to right the wrong done to Matias, something the state is unlikely to do anytime soon — or ever.

After the footage went viral, social media activists started a GoFundMe page to mitigate the financial losses felt by Matias and his family. The original fundraising goal was set at $10,000. But since the campaign’s launch on Monday morning and the continuous sharing of the footage of the encounter with the officer, over $80,000 has been raised to help cover Matias’ pay for legal fees and recoup his losses. And the donations keep pouring in.  

As for the officer involved, an online petition calling for his immediate termination has already garnered 20,000 signatures. However, the university seems apathetic to the entire incident, claiming that the officer was conducting business as usual.

A representative did make a statement saying:

We are aware of the incident. The officer was tasked with enforcing violations related to vending without a permit on campus. UCPD is looking into the matter.”

In other words, Officer Aranas was “just doing his job.” And unfortunately, the promise of the UCPD “looking into the matter,” does little to calm the fears of many Americans who are tired of having to read about these stories on a weekly basis. Even worse, are the many Americans forced to become part of this narrative as a result of bureaucratic licensing.

But fortunately, social media has acted as the arbiter of justice. And while Officer Aranas’ future in law enforcement is probably just as secure as it was before the incident occurred, at least voluntary crowdsourcing has provided the means to keep the Matias family afloat and perhaps, help him expand his venture and add even more value to his community.


Brittany Hunter


Brittany Hunter is an associate editor at FEE. Brittany studied political science at Utah Valley University with a minor in Constitutional studies.

This article was originally published on FEE.org. Read the original article.

Constitutional Ignorance Led to a Tyranny of the Majority

Constitutional Ignorance Led to a Tyranny of the Majority

Constitution Day—September 17—marks the anniversary of its 1787 signing. Students will be taught about it...but not because of its importance. It is now a mandatory topic for every educational institution receiving federal aid. However, what won’t be taught is the irony of that requirement, which originated from the man then-described as the Senate’s leading Constitutional scholar, while clearly conflicting with the Constitution.

In 2004, Senator Robert Byrd (D.-WV) added this requirement to a pork-filled spending bill that was blatantly inconsistent with Americans’ general welfare. It also clearly overstepped the 10th Amendment’s restriction of the federal government to only its enumerated powers.

His “solution” aside, Byrd was correct about Americans’ inadequate Constitutional knowledge. As one National Constitution Center poll concluded, only one in six of us claimed detailed knowledge of the Constitution—despite the fact that two-thirds said it was “absolutely essential” to have.

Lack of Knowledge Is a Dangerous Thing

In other words, Americans know too little about our Constitution to maintain the freedoms it was designed to protect. Instead, our ignorance leads us to sacrificing rights out of undue deference to majority rule.

America’s Constitution did not endorse majority rule. Our founders did believe in voting to select who should be entrusted with the power of government, but the more important and prior question they addressed was: “What powers do the people delegate to the federal government to exercise on their behalf?” That is why so much of the Constitution, particularly the Bill of Rights, is devoted to what the government is not allowed to do, regardless of majority sentiment. As Jefferson said, our founders fought not for democracy, but for a government “tied down from mischief by the chains of the Constitution.”

In fact, our founders had a great distrust of majority rule. Alexander Hamilton asserted that “Real liberty is not found in the extremes of democracy.” James Madison said “democracies…have ever been found incompatible with personal security or the rights of property; and have in general been as short in their lives as they have been violent in their deaths.” Thomas Jefferson warned that “an elective despotism was not the government we fought for,” and that “The majority, oppressing an individual, is guilty of a crime, abuses its strength, and by acting on the law of the strongest breaks up the foundations of society.”

That is why the Constitution contains multiple non-majority rules to protect Americans against federal abuses, such as presidential veto power and the super-majorities required to change the Constitution. Its defense is the rationale for the Supreme Court’s power to strike down unconstitutional laws, regardless of how many congressional votes they received.

“Individual rights are not subject to a public vote."

Despite our founders’ antipathy toward pure majority rule, many today feel that our founders’ opposition to unlimited democracy can be squared with political determination of everything by adding the phrase, “also protecting the rights of the minority.” However, as Ayn Rand put it, “Individual rights are not subject to a public vote; a majority has no right to vote away the rights of a minority; the political function of rights is precisely to protect minorities from oppression by majorities (and the smallest minority on earth is the individual).” Consequently, our lack of Constitutional knowledge means that believing in protecting the rights of minorities does not actually protect them when they are outvoted.

Since Americans don’t clearly understand their Constitutional rights against government abuse, the unwise habit of deference to political majorities results in those rights being steamrollered whenever more than 50% vote to do so. Examples are plentiful because—despite the Constitution’s imposition of strictly limited, enumerated federal powers—there is no area it does not now reach, if not dominate. And with our protections eroding, majority voting controls more and more of what our founders thought they had made off-limits to political determination.

Sadly, as we can’t effectively defend what we are only vaguely aware of, American inattention to the highest law of the land puts our most essential rights and liberties at risk. We may think we have inalienable rights, as the Declaration of Independence asserts. But those rights are protected by the Constitution only if we know what they are and we remember that the federal government was not granted power to take them away based on any simple majority vote. Unless we once again take our rights as seriously as our founders and vigorously defend the Constitutional safeguards that maintain them—even against majority pressures—the system of self-government our founders left us will continue to erode. But when we don’t even recognize the irony of a federal mandate to promote understanding of the Constitution, especially when it is inconsistent with the Constitution, we are unprepared to do anything to effectively preserve its protections against government abuse.


Gary M. Galles


Gary M. Galles is a professor of economics at Pepperdine University. His recent books include Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013). He is a member of the FEE Faculty Network.

This article was originally published on FEE.org. Read the original article.