Reflections  

Scrying game — If anyone had any doubts about whether occupational licensing exists solely to protect the various licensed occupations and not to protect the public, he only need look at the results of a recent Mesa, Arizona, city council meeting. Someone on the city staff had realized that the previously passed licensing of fortune tellers was really silly and put it on the "consent agenda" to be repealed. (The consent agenda is used for those matters that everyone is obviously in agreement on and, therefore, need no discussion.)

But when this came up, two fortune tellers demanded that the city retain its regulation because, they alleged, there are charlatans out there and the reputation and credibility of the licensed fortune tellers is at stake.

This is the situation with all occupational licensing. It is always promoted as protecting the public, but its real purpose is to protect the regulated professions. How about doing something that actually benefits the public, such as repealing these ridiculous laws? — Roy Miller

Lament of the FBI — Robert Mueller, the director of the FBI, is upset about the Heller decision. Flanked by armed FBI agents, he declared that "weapons harm people, and more often than not they harm the people carrying them." It is understandable why Mueller would think this. It was his agency, after all, that gave us the legendary Lon Horiuchi, a graduate of the Barney Fife School of Marksmanship. — David Beito

This is not a distinction — Brad Jayakody, a British IT consultant, was not allowed to board a flight at Heathrow airport because he was wearing a T-shirt showing the Transformer Megatron holding a gun. Transformers are robots that can convert themselves into other objects. Megatron can convert himself into a gun. So, as Stephen Colbert put it, for all the TSA agent knew, the T-shirt was actually a picture of Megatron holding another Megatron, "and, obviously, we just can't have that."

Is this simply an example of one idiot working for a government bureaucracy? Or is it policy?

Consider the plight of Marnina Norys, who was prevented from boarding a plane in Canada because of her silver necklace with a 1.75 inch Colt .45 replica. Norys explained that the small silver ornament was not actually a real gun and couldn't actually shoot real bullets. But an official with the Canadian Air Transport Security Authority, in justifying their decision to the press, stated, apparently with a straight face, "How do you know it wasn't a real gun?"

The French painter René Magritte is known for his highly realistic painting of a pipe, under which he painted the words "Ceci n'est pas une pipe" ("This is not a pipe"). The painting, titled "The Treachery of Images," makes the point that there is a difference between a thing and an image of a thing. One would be making a category error if one tried to light up the painting after stuffing it with tobacco.

Perhaps a libertarian entrepreneur could make a T-shirt of a Glock semiautomatic, under which would be written "Ceci n'est pas un fusil." Granted, those hired for TSA positions are not known for their philosophical acumen, to say nothing of their sense of humor, but the shirt would make a statement, and possibly even a Supreme Court case. It would be ironic indeed if the Supreme Court, having just ruled that Americans have 2nd Amendment rights to own a gun, would subsequently conclude that we don't have First Amendment rights to wear a t-shirt with a picture of a gun, making a political statement to the gray-shirts of the TSA.

Ceci n'est pas un pays libre. — Ross Levatter

Bury his heart . . . — My old friend Russell Means recently reappeared in the news. That's because he is in back of the Lakota Nation's "declaration of continuing independence" from the United States, issued December 21, 2007.

"We are no longer citizens of the United States of America and all those who live in the five-state area [parts of Nebraska, South Dakota, North Dakota, Montana and Wyoming] that encompasses our country are free to join us."

Russell went on to say the new country would issue its own passports and driving licenses, and living there would be tax-free.

Sign me up.

It's true the Indians (and Russell prefers that term to the politically correct "Native Americans," believing that when Columbus met them, he referred to them as people who lived "in Dios," or with God) have generally gotten a bad deal. But throughout history, technologically backward people have always had their lands taken from them by more advanced invaders — not that that makes it right. And it certainly seems true that the U.S. Government has violated all of its treaties with not only the Sioux, but every Indian tribe. Russell argues that withdrawing from the treaties is entirely legal because Article Six of the Constitution states that treaties are the supreme law of the land.

But since the whole U.S. Constitution is essentially a dead letter anyway, it's a meaningless point.

It's easy to understand why a self-respecting Indian would be unhappy about his ancestors' bad luck, and the fact that many billions of dollars that were supposed to go to them were misappropriated by the criminally mismanaged Bureau of Indian Affairs. And, since they've been treated as wards of the state — basically welfare cases — for generations, Indians as a group suffer more alcoholism, chronic unemployment, high crime rates, and bad health. The same problems as among blacks, and for the same reasons.

Indians have a justifiable beef with the U.S. Government. But my advice, unless you want to be a Professional Indian, is to get over it; revanchism creates nothing but problems. Instead, stop drinking, adopt good work habits, and open a casino. Professional Indians, like Professional Irishmen, can easily become parodies of themselves. I prefer to associate with people who see themselves first as people, not as members of ethnic groups, which are simply accidents of birth.

Russell has opted for a different path. He's a cross between Crazy Horse and Al Sharpton; Sitting Bull and Jesse Jackson. He loves the spotlight, and since he joined the American Indian Movement in 1968, he's basically been a professional activist, participating in AIM's occupation of Alcatraz in 1970, Mt. Rushmore in 1971, and the Bureau of Indian Affairs in 1972. He led the famous standoff at Wounded Knee in 1973. In 1984 he ran as a Republican VP candidate with Larry Flynt. He ran against Ron Paul to be the 1988 Libertarian candidate for president. But he's best known for his acting roles, notably in "Natural Born Killers" and "Last of the Mohicans."

I spent a few days with Russell when he came to a couple Eris Society meetings, and then we were on the board of the Fully Informed Jury Association together for a while. I found him to be the kind of guy you want to like, but he's got such a chip on his shoulder, it's offputting. He's always looking for a real or imagined slight, making him volatile company. It's true that he has libertarian inclinations. But, to Russell, everything takes second place to being a Professional Indian, and going down in history as another Geronimo, or King Philip, or Pontiac.

The Lakota independence movement is a step in the right direction — in that I'd like to see the United States break up into about 300 million sovereign entities — but it's unlikely to get anywhere. One reason for that is that Russell and his co-conspirators don't actually have standing to speak for 100,000 Sioux. They couldn't even keep AIM, where everybody shared a common goal, together in the '70s. The Lakota independence movement is, regrettably, basically a publicity stunt, if only because most Indians are — as Russell will readily admit — complacent, apathetic, and corrupted by the negative aspects of the White Man's civilization.

But it's symptomatic of what's going on all over the Western Hemisphere. Morales in Bolivia and Chavez in Venezuela aren't simply socialist throwbacks to the '60s; they're also Indian nationalists. It's why Russell's group visited the Bolivian and Venezuelan embassies, as well as the U.S. State Department, when they made their declaration. In September 2007, the United Nations adopted a nonbinding declaration on the rights of indigenous people. Of course, resolutions like that are worth nothing, but they're indicative of the tenor of the times. You can absolutely plan on more lawsuits, roadblocks, protests, and grandstanding all over the world from indigenous people whenever there is proposed development (often meaning a mine) on what they consider to be disputed land. At a minimum, a politically correct shakedown is worth a few million bucks.

If, by some chance, Russell gets some traction with a significant number of Indians, or starts getting money from Morales or Chavez, the U.S. Government will take action. Which would suit Russell just fine. He's not a "hang around the fort" Indian, and, at 67, probably wouldn't mind going out in a blaze of gunfire with the Federales. Then I'd feel saddened to do another obit. — Doug Casey

The energy civil war — As the economy continues to crumble under the weight of spiraling oil prices, there is a growing divide among Americans about how to respond. There seems to be a coalescence of public opinion into two broad camps, which I call Growth and Green. Several recent articles in The Wall Street Journal reinforce this perception.

The Greens, to use their own preferred label, broadly oppose fossil fuels and (in most cases) nuclear power. Faced with the question of what they want us to use for reliable energy on the huge scale we use it, they generally suggest "alternative sources" such as solar, wind, biofuels, or — a new one I heard from a Green participant on a recent talk show — "microalgae." And they want widespread, massive "conservation" — generally meaning artificial shortages, governmentally coerced by various means (such as taxes, cap and trade schemes, regulations, and various fees).

Indeed, given the clear high cost of their so-called alternatives, one suspects that Greens aren't really serious about increasing our supplies at all, but only want a rapid economic contraction. Their view seems to be that the sooner sinful humanity dies off, the sooner will Mother Earth begin to heal, with bunnies and wolves dancing through pristine forests paw in paw.

The first article (May 12) reports data from an independent federal agency, the U.S. Energy Information Administration, about how much taxpayer money is used to subsidize various sources of energy. As of last year, almost $17 billion was spent to subsidize the production of energy. In terms of

federal dollars per megawatt hour, the costliest forms of power are precisely the Green ones: "clean" coal ($29.81 per megawatt hour), followed by solar power ($24.34) and wind power ($23.37). Vastly less costly to the taxpayer are the traditional, i.e., the Growth, forms of power: nuclear ($1.59), hydroelectric (67 cents), normal coal (44 cents), and natural gas (25 cents).

To the inevitable Green reply that solar and wind power are new, so require more "start up" subsidies, the article notes that wind and solar have been heavily subsidized for many years, and still only generate about 1% of our electricity — compared to over 20% for nuclear power, even though no new nukes have been built for 30 years (thanks to Green opposition).

Again, if you look at the amount of taxpayer funding per BTU, you see that the Green sources again require an order of magnitude higher level of support than the traditional ones: biofuels require $5.72 of taxpayer funds per BTU, solar $2.82, and clean coal $1.35, as opposed to 3 cents for oil and natural gas.

The proponents of growth, by contrast, support expansion of the proven, efficient sources of heat and electricity, while also supporting continued research into new sources of energy. The Growths don't want the possible best to be the enemy of the actual good: they want alternative sources of energy, but ones that actually work on the scale needed to allow the continued moderate economic growth that is needed for humans to flourish. The view here is that when human beings are able to have at least a decent level of affluence, they are most likely to be peaceful and productive — as Aristotle pointed out, a decent level of material wealth is necessary to allow virtue to develop. In particular, people are more apt to take care of their natural environment if they are first able to take care of their families and themselves.

For decades, the Greens have been able to advance their agenda in Congress and the courts, as low oil prices (because of slow growth in Asia and vast pools of oil in the Mideast) made it easy for the Growths just to give in. But in the face of the real likelihood of economic hardship caused by high energy prices, the struggle between the Growths and the Greens is becoming intense.

This is illustrated by a Journal report (June 9) that the Greens have once again been able to use their power to manipulate the federal EPA to thwart even moderate steps toward expansion of the supply of gasoline. Conoco-Philips had received approval from the Illinois EPA to expand one of its existing refineries (note, not to build a new one) to handle more of the heavy crude that Canada produces. Now, you would think that any measure that would help us switch from buying oil from the Middle East (where the money often helps to fund groups of people devoted to blowing us up) to buying it from Canada (whose citizens at worst evince a snooty disdain for us) would be welcome. But no, not to Greens.

The Illinois chapter of the Sierra Club, together with another Green gang, the American Bottom Conservancy, got the federal EPA to block the expansion, sending it back to the Illinois EPA for yet more review. In their filing, the Green groups alleged that the company wasn't using the best available technology (a charge that the company disputes). But it is obvious that whatever technology the company had proposed, the Green gangs would have attacked it with endless legal challenges. The Green agenda opposes all new exploration, drilling, and refining here in the U.S.; indeed, it proposes to destroy what we already have.

This brings us to a third Journal piece (June 12), an editorial criticizing the "dysfunctional" federal energy policy. ("Dysfunctional" I take to be a euphemism for "insanely self-destructive.") The piece points out that our lack of domestically-produced oil — now at its lowest level in 60 years — is the result of our own deliberate policy.

For example, Congress has renewed a ban on offshore drilling every year since 1982, and a 1990 executive order banning offshore drilling has seldom been waived, even by the supposedly pro-oil Dubya. This blocks us from extracting an estimated 86 billion barrels of oil (which would produce 2.32 trillion gallons of gasoline and diesel), not to mention 420 trillion cubic feet of natural gas.

In addition, Congress has continuously blocked the development of the over 10 billion barrels of oil (equivalent to over 270 billion gallons of gas and diesel) in ANWR, even as late as last month — while unemployment jumped from 5 to 5.5%! Last year, the same crazy Congress blocked the leasing of federal lands containing 80% of America's oil shale, estimated to hold 1.8 trillion barrels of oil (or almost 50 trillion gallons of fuel, which is roughly equivalent to 200 years' supply).

To Growths, this is just plain nuts. We can address our energy needs by simply moving toward nuclear power for our electricity and opening up our own immense fossil fuel resources for use. But the Greens will fight bitterly every step of the way.

The Journal article contains one ray of good news, at least for us Growths. The most recent Gallup poll shows that 57% of Americans favor opening wilderness and coastal areas, with only 41% opposing. And only 20% blame high oil prices on big oil companies — this, after months of Democratic demonization of those companies. In truth, the Democrats need to bash the oil companies, in order to obscure the fact that it is their party, so dominated by Greens, that has created this crisis. But the Growths may be starting to turn the tide. — Gary Jason

Blame speculators — Conservative talk show host Bill O'Reilly has joined the chorus of voices who blame the soaring prices of oil and gasoline largely on speculators and who suggest that Congress could rein in the evildoers, if only it would. As Joseph Schumpeter observed in "Das Wesen des Geldes" (1970, p. 59), it is an old, old "theory" that market disorders, in foreign exchange in particular, are "the work of evil speculators, enemies of the country, whose activities must be put down."

The chorus of blame does not utterly ignore the "fundamentals" of oil. These include growing demand in China and India and at home, geological and political obstacles to discovering and exploiting oil deposits, and restraints on production by the OPEC cartel.

Less often emphasized is weakness of the currency in which oil is priced. Several years of too loose a monetary policy have been eroding the dollar's purchasing power and foreign-exchange value, besides causing other disruptions. (I don't particularly blame Ben Bernanke and his colleagues, though; for, without hindsight, I wouldn't have known how better to operate the flawed Federal Reserve system.) Anyway, as Irving Fisher regretted already in 1911, people are inclined to blame inflation on conditions affecting specific markets: crop damage, bad fishing, natural disasters, monopolies, unions, and so forth ("The Purchasing Power of Money" [1985 reprint, pp. 174–183]). The underlying monetary cause is obscure because inflation proceeds raggedly, raising some prices before others and making those that respond earliest or most sharply appear to cause the whole upward procession. Nowadays, the price of oil is one of those symptoms mistaken for causes.

No conclusion follows from how cheaply oil from existing wells could be gotten out of the ground and transported. That expense is only part of the full cost, which in this case includes the so-called opportunity cost of losing future supplies by premature exploitation. Part of the logic of private property in land and resources and of their markets and prices is that they promote conservation. Here this means sensibly spacing exploitation over time, to the extent that unavoidably imperfect knowledge and foresight permit. If something is likely to be relatively scarce and high-priced in the future, that is reason to start economizing on it now by allowing those expectations to affect its current price. In a well-functioning market, the current price includes opportunity cost in the sense explained.

Free-market prices in effect move some of a currently abundant good or resource into the future of relative scarcity (or, in the opposite case, move some of a relatively abundant future good into today's time of scarcity). Prices and responses to them in effect transform a relatively abundant and cheap good into a more valuable one, creating wealth like the wealth that physical production creates. Astute speculators contribute to this price determination and wealth creation. They earn profit as a fraction of what they create. Speculators have a profit-and-loss incentive to get their facts and assessments right. Those who are consistently wrong lose money and tend to abandon the market. Even when speculators are wrong and lose money, the other market participants arguably benefit.

In active commodity markets, much more of the trading takes place in contracts for future settlement than for current actual delivery of the good traded. Few traders in futures are in a position to make or take actual delivery of the thing traded; rather, as everybody understands, profits and losses will be settled in money.

Nothing is scandalous about this arrangement. More traders can apply their knowledge and assessments to the market than if trading were limited to deals for actual delivery. The activities of these traders in mere paper, often so scorned, make the markets more active and liquid than they would otherwise be, and less vulnerable to manipulation by one or a few big players. They make the markets more available and dependable for hedgers, who are actual producers and users of the things traded and are trying to shed price risk by agreeing in advance on prices to be received and paid at a future time. Again, speculators are productive.

Arbitrage links futures and spot prices (prices for actual present delivery), so a rise or fall in the futures price contributes to a spot-price move in the same direction. (Spot/futures differentials hinge on such factors as interest rates, storage costs, and transactions costs.)

Am I painting too rosy a picture of speculation? Market manipulation, as by collusion and false rumors, would be a different matter. Speculation by index funds trading in preestablished baskets of commodities, as distinguished from speculation on individual commodities in the light of conditions specific to them, is an issue on which I reserve judgment.

At any rate, before heeding popular clamor, members of Congress should try to pinpoint the specific market distortions, if any, to be addressed. They should consider whether contemplated remedies might do more harm than good.

Unfortunately, to judge partly from committee hearings shown on C-SPAN, they prefer to make speeches in the guise of posing questions; they badger witnesses for predictions about how quickly the proposed legislative or administrative remedies would take effect.

One witness, however (to judge from the snippets of testimony that I saw), provided an admirable example of diplomacy. Badgered to agree that speculators were to blame for the high price of oil, the head of the Commodity Futures Trading Commission did not identify the questioners' economic ignorance, but tactfully replied, "So far, we have no evidence to that effect" (or some such words).

Senators and representatives should spend less time sitting and speechifying in hearings and save some time to learn the pertinent economic analysis. Their behavior is, however, readily understandable in the light of Public Choice theory. So are the reasons why economic ignorance is an actual advantage for honest politicians: they can practice economic demagogy with a clear conscience, not knowing any better. — Leland Yeager

Impossible expectations — Recently, I overheard this exchange between two supporters of Sen. Obama:

"He's really going to change everything."

"I know. He knows what it feels like to be ignored; he's going to change everything."

An agent of change whose core support is from the SEIU and teachers' unions? Someone used to being ignored — at Punahou prep, Columbia, and Harvard Law?

If Obama is elected president, get ready for the backlash: a generation of cynics whose hearts were broken by the messiah who turned out to be just another silver-tongued statist hack. — Jim Walsh

If only it was Ponzi — All residents of British Columbia are getting a check for $100 as a "climate action dividend . . . to make it easier . . . [for them] to choose a lower carbon lifestyle." The letter accompanying the check is signed by Premier Gordon Campbell.

The wife of a friend of mine is looking for ways to use this money to make a better world; my friend is fuming. He says that all the government is doing is taking a lot of money away from him in taxes, then returning a very small bit of it — literally stealing thousands of dollars with one hand and returning pennies with the other.

His wife and children may look at the government as a benevolent entity, but isn't it funny that government did absolutely nothing and still gets the credit for doing something, while my friend's slogging for his family is seen by them as his own responsibility? No wonder the situation with families in the West just keeps getting worse.

But that is not the point to think about today. One must think about the check itself, and wonder why the very educated people of Canada cannot see this utterly childish farce for what it is. This is not a complex pyramid scheme created by crooked businessmen, but a scheme created by extremely dumb and lazy people in the government.

The people should be able to see what is right in front of them . . . the government is mailing the checks to millions, spending money on tons of paper and postal resources, and creating a huge carbon footprint. Even with my agnostic views on climate change, I find this a destructive waste. Anyone not suffering from a warped sense of reality should feel angry, very angry. — Jayant Bhandari

Vince Miller, R.I.P. — As I write, I have just learned of the death, on June 28, of my friend Vince Miller, who devoted the last three decades of his life to making sure that libertarian ideas found an audience outside the English-speaking world.

Though I had thought he seemed his usual chipper self when I last saw him at the Libertarian Party's presidential nominating convention on Memorial Day weekend, my wife Suzanne, who looked more closely, thought he seemed a bit tired. And she noted that he spent several hours of each day of the convention resting in his room. As usual, Suzanne was right. Vince wasn't feeling up to par. And by the time he got back to California, where he had lived for the last 20 or so years of his life, he felt even more subpar. It wasn't long before he was hospitalized with what was at first believed to be pneumonia. He was never released. He did not live to see his 70th birthday in December. He will not see how the Libertarian nominee does at the polls in November.

I first met Vince Miller in 1978, when he had just signed on as editor of The Mercury, a new libertarian magazine financed by Roger MacBride. Before that meeting I had known him only by reputation, as the Canadian libertarian who, with Marshall Bruce Evoy, had put out Libertarian Option, probably the second most professionally edited and printed libertarian magazine (after Reason) of the early '70s. But Vince wasn't destined to be the editor of The Mercury for very long. It survived for only a few issues before MacBride apparently decided he'd chosen a poor time to get into the libertarian magazine business (at the same time that the much wealthier Charles Koch was launching major new ventures in the same market) and pulled the plug.

By 1980, Vince was announcing a new project, an organization called Libertarian International, which would work to encourage the spread of libertarian ideas around the world. After merging with the venerable, '60s-era Society for Individual Liberty nearly a decade later, Libertarian International became the International Society for Individual Liberty — ISIL. To the world at large, for the next two decades, ISIL was an outfit that sponsored international conferences (in settings as diverse as Russia, Costa Rica, Estonia, Swaziland, Lithuania, Mexico, New Zealand, and most of the capitals of northern and western Europe), introducing thousands of students in other countries to libertarian ideas. ISIL sponsored translation and publication of libertarian classics in former Iron Curtain countries and in other countries where libertarian ideas had made little headway up to that time. It also published and distributed leaflets, brief introductions to and overviews of the most basic libertarian issues, that were typically printed on both sides of a single 81/2 x 11 sheet, and distributed these leaflets everywhere.

But for those who lived in the San Francisco Bay Area during those years, ISIL was more than just the outfit behind these activities, important as they were. In the '90s, ISIL was also the proprietor of a libertarian bookstore and mail drop in a somewhat seedy section of Market Street in San Francisco. Local Libertarian Party meetings and other sorts of libertarian gatherings took place there. And its managers, Vince Miller and Jim Elwood, were to be found anywhere in the Bay Area where any sort of libertarian event was happening.

(I sometimes thought the store's third manager was the gigantic .44 Magnum that Vince kept under the front desk.)

There were actually two libertarian bookstores in San Francisco in the 1990s: the ISIL bookstore on Market, and Laissez Faire Books on Howard in the South of Market District. Laissez Faire Books held a frequent schedule of author appearances and book signings (always with copious wine and cheese), and sometimes played host to other sorts of libertarian events. Whatever it was, if it had anything to do with the libertarian movement, Vince and Jim were always there. They were always there, too, volunteering themselves and their pickup truck whenever a local libertarian moved. Characteristically, Vince kept on providing this service long after his by now perpetually aching back started telling him to retire from that line of work.

I was on hand for about 15 of Vince's nearly 20 years in the Bay Area. He attended my 50th birthday party in 1997. Suzanne and I attended his 60th nearly two years later. We were there to witness the closing of the Market Street bookstore and the departure of ISIL and its stash of books and trusty printing press to nearby Benicia — hotter and more remote but much cheaper than increasingly pricey San Francisco. Over the years, Vince's back got progressively worse, and he got progressively more deaf. But his good cheer, his willingness to lend a helping hand, and his love for his Sunday morning visits to the firing range ("going to church," he called it) never flagged. Neither did his commitment to liberty. He will be missed. — Jeff Riggenbach

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