Government by Delegation

Where does any government get the right to exercise authority over citizens? Prior to 1776 most in the western world thought that kings had some divine right to rule. That made sense only if you both believed in God and and believed that He had somehow picked the king of your country. Most today would reject that concept. In fact our Declaration of Independence rejects it, as indicated in the following from pp127-128 of my book, Freedom or Serfdom?

“ 'That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed.' “That stood previous ideas of government on their heads. Government exists, not for kings and other rulers, but for and at the pleasure of the banker, the farmer, the garbage hauler, etc.

“That phrase deserves special attention. Government power comes from the consent of the governed. In other words, we the citizens delegate our power to the government. It becomes our agent, to act in our name with such power as we choose to allow. That simple phrase not only means that the people are to rule, but adds another requirement for limited government. We can delegate only the powers and rights we ourselves possess. We have a right to defend ourselves; let's delegate at least part of that right to the police and the military. We have the power to build roads and bridges; let's delegate that power to government. We have a right to demand that a factory not dump mercury into our waters; delegate that to government as well.
“There are, however, rights we do not have and therefore cannot delegate to government or to any other entity. We do not have the right to hold other humans as slaves, therefore we cannot delegate to government the right to approve slavery. We have no right to force our neighbor to paint his house the color we prefer; therefore we cannot delegate that right to government. We have no right to force our neighbor to buy the insurance we think he should buy; therefore we cannot delegate such power to government.”



This concept is at the root of limited government – limiting even democratic government. If 99% of the people want to enslave someone, decree how houses shall be painted, etc., they have no right to do so. Numbers may make strength but they do not make right. That which is immoral for an individual remains immoral for a democracy.

Who Decides? Who Pays? Who Benefits?

(Note: This is a direct quote from Chapter 15 of my book, "Freedom or Serfdom?)

The Parable of the Pie

Polly's Pie Parlor has an unusual business model. You pick the pie you want, but Polly delivers it to the customer who comes in half an hour later. You get the pie someone ordered half an hour ago; I hope you like his taste. And you won't pay for either of those, instead you pay for the pie somebody ordered two hours ago. No trading of pies is allowed.

That is obviously a silly example – or is it? It is an instance of what is called third-party decision making. One person decides, someone else pays and yet a third person lives with the decision. Yes that happens, maybe not in pie parlors, but it does happen in business, and especially in government.

Government and Third-Party Decisions

Government decisions are inevitably third-party decisions, made by someone far from the scene and who neither pays the cost nor lives with the results. It is worth looking at the problems this causes.

For any decision we must consider: (1) who decides, (2) who pays, (3) who lives with the results, and (4) who has the most knowledge of the situation. The best decisions are made by someone who pays the price, lives with the results, and is knowledgeable about the issues to be decided.

A person who pays but does not live with the consequences will have an incentive to keep costs down. However, he may not even care about quality or any results that do not affect him.

Someone who lives with the results but does not pay has an incentive to get a good solution, but not to control costs. He may go for an expensive solution that is only marginally better than something much cheaper.

A decision-maker who neither pays nor lives with the solution has no incentive to either control costs or find a good solution to the problem. Note that most government decision makers are in this category. They neither pay the price nor live with the result.

With government decisions, the decision-makers are usually insulated from both expense and results. However they do have an incentive to appear successful, so they tend to be reluctant to change their decisions. A change would be an admission that they were wrong, not usually career-enhancing. A bad decision is likely to remain in effect, much as the fees on climbers of Mt St Helens and Mt Adams remain in effect.

A person who pays and who lives with the decision, and who gets to make that decision, will have an incentive to balance cost and results. That incentive is likely to lead to the best overall decision, especially if that person is knowledgeable. Third parties are unlikely to have the first-hand knowledge possessed by the people directly involved. Those third parties may be 2,000 miles away from the situation. Furthermore, they may impose a “one size fits all” solution, ignoring differences between places as diverse as a big city like Los Angeles and a rural village where a traffic jam might mean three cars at a stop sign.

Third-party decision makers often think of themselves as smarter and more knowledgeable than the average person. They may even be correct, but the third party tends to have a different type of knowledge than the people at the scene. That third party is likely to have a theoretical background rather than the knowledge that comes from hands-on experience. Meanwhile, the people directly involved draw on personal experience and on information from others who have such experience. And those who pay and live with the results have an incentive to get more information if they need it.

For example, a rancher in eastern Oregon may have employees who drive 50 miles from town each day, then 50 miles back after work. Employees soon tire of the drive and of the expense of gas and automobile maintenance. The rancher has a hard time keeping good people, so he decides to provide housing right on his ranch. Not so fast! Representatives from urban/suburban areas dominate the state legislature. They do not make that daily commute, they do not lose employees who hate the drive, and many probably don't even know the difference between a bull and a steer. Guess who gets to decide how to run that ranch? That's right, the legislators from urban districts, people who want to prohibit such housing. Land use restrictions require that “Minimum lot sizes in farm and forest zones range from 80 to 240 acres.”[1] That restricts the number of houses a rancher may have for himself and his employees.

Ironically, many of the people who support those limits also want to reduce driving, yet their rules force ranch employees to commute from town. That is an example of not only third-party decision making but of stage one thinking. The decision makers do not think beyond the initial objective.

As government acquires more power, we find third-parties making more and more of our decisions. The results are predictable. Our only advantage is that we can blame someone else for the mistakes.

---

[1]      http://www.landwatch.org/pages/perspectives/accomplishments.htm

Game Theory and Government

After a couple of blogs on game theory, let's now tackle how it fits with government. I already mentioned the foolishness of city governments throwing taxpayer money after professional sports teams. Sports leagues make sure that a city has essentially no added value. That leaves the league with all the power in negotiations so the league and the team owner win every time

However professional sports are small potatoes compared to other government functions. What about those? Do they have added value? The answer is that some do, some do not.

At its best government provides added value in what economists call external benefits. That is benefits not worth the price to any individual user but useful to enough people to make them worth the cost in the aggregate. For example few companies would find it worth the cost to build a road for their customers. However if we consider all the users of that road it becomes worth the price. Government can use tax money to build the road which then gets used by not only that company but nearby businesses, shoppers, even visitors from far away. The road provides external benefits.

Notice that if there were no government there would probably be no road. The value of the road represents added value provided by government. Whether that value exceeds the cost is another question but that is not our concern here.

Police and fire departments also provide added value. Few homeowners could afford their own fire department but the city or county as a whole can spread the cost over all citizens. The fire department can then save homes and lives as well as lower insurance costs. It represents an added value.

However many government expenditures add no value to the game. What happens in a typical economic bail-out? The statists would claim added value because they think it really helps the economy but does it? So far in this crisis our government has saddled us with huge debts, yet unemployment remains high. Where is the added value in that? The fact is that such programs merely move money from one pocket to another, they do not create goods or services. Instead they take money one business or person might have used to create wealth and give to someone else.

The real effect of many government programs is apparent only in retrospect so it will probably be years before we can really understand the effects of the Bush-Obama bail-out. However there are eerie parallels with the Great Depression and the measures taken by Hoover and Roosevelt. Most economists now recognize that the New Deal prolonged that depression.*

The problem with government it that it has not only a monopoly but also the power to force its will on others.. A business that insists on being paid more than its added value will soon find itself with no customers at all and thus no business. However government has the ability to take what officials want or think necessary. That allows it to grab more value than it provides. In almost all cases, government provides no added value if it does something a private business could reasonably do

The only solution is a strictly limited government, one constitutionally restricted from expansion and in which the citizens insist on following that constitution. And please note that the added value problem is only one of many reasons to limit government. Even if government can add value there are often good reasons for it to stay out of the game.


*cf the book New Deal or Raw Deal by Burton Folsom, Jr.

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The Big Lie

“Tell a big enough lie and people will believe it because they think nobody would dare say such a thing if it weren't true.” That advice, often attributed to Hitler's dictatorship, seems to have spread around the world. It pains me to say this about my country, but it also seems to have infected the U.S. presidency and congress.

For four straight weeks in October President Obama mentioned his health care reform in his weekly message. In each of the four messages he went so far as to claim that the people and congress were coming together to provide bipartisan support for his plan. I do not understand how anybody could believe that claim. Doubts have been growing, even in Obama's own party, and that was obvious before Obama made his claims. Either he is completely out of touch with reality or he is telling a big lie.

It saddens me to make such an accusation within my own country, just as it saddened me when Nixon was shown to have engaged in a cover-up of the Watergate break-in. Unfortunately the facts are there. Nixon did participate in the cover-up. Obama did tell a flagrant lie, claiming people were coming together to support his plan when the opposite was true.

Worse, that was not an isolated incident. On 24 October, Obama claimed that the “reform” would help save small business in the country. Somehow imposing higher costs on those companies is supposed to help their bottom line? You gotta' be kidding! Can he be that out of touch with reality or is he telling us another big lie?

Though there is not yet a single, finalized health care reform plan, it is clear that all the plans Obama and his followers support would add costs, either through taxes or through forcing employers to provide insurance. Companies with that additional expense would be competing with imports from China, Southeast Asia and elsewhere, places where wages are low and employer-paid health coverage hardly known. The result will be the near destruction of small business in this country.

Obama is not alone in this. Sen. Max Baucus claims that there is a “sense of inevitability....we're going to pass health care reform and it's going to lower costs, provide better health insurance coverage.” Sorry Max, there is no sense of inevitability except as you create one. Nor is it all that obvious that government meddling will lower cost or provide better coverage. I’m not sure if you are that out of touch with reality or if you’re telling another big lie, but it has to be one or the other. What you claim is completely wrong.

Al this is reminiscent of teen-age peer pressure. “Everybody's doing it, why don't you?” It appears to be an attempt to steamroll the opposition by creating a false impression that the “reform” is inevitable. Reasoned discussion takes a back seat. Instead the message is that we better get on board, join the bandwagon, do what everybody else does without thinking it through.

There was a time when we expected honor in our elected servants. While the story of Washington and the cherry tree was not true, it does illustrate an expectation that the people we hire to run the country should tell us the truth. Sadly that expectation has changed and we now go so far as to say that the way to tell if a politician is lying is if his lips are moving. That must change. We, the voters, must put a stop to this nonsense. We must contact our representatives and tell them to stop lying. If they refuse we must publicize that, then fire them at the next election – or recall them before that election if recall is available.

No democratic government can long survive unless the voters can trust their representatives.

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You Have a Right to – Nothing

There is something conspicuously – and wisely – missing from the Bill of Rights in our constitution. It does guarantee many rights. We have a right to be free from government interference in our speech, our religion, our press. Government may not deny our right to keep and bear arms nor may it quarter soldiers in our homes except under extraordinary conditions. Government may not require excessive bail nor impose excessive punishment. However there is one kind of right nowhere to be found in the constitution. That is the right to have anything given to us.

The constitution contains no right to a “living wage” or even to any food. While government may not take our life, liberty or property without due process, we are not guaranteed life, liberty or property at taxpayer expense. If a person acts carelessly and dies, or even dies because of disease, the constitution provides no remedy. If someone binds himself to debt to the point that he loses much of his liberty, the taxpayers have no obligation to bail him out. If he carelessly loses his property or just fails to acquire any, the constitution does not require anybody to correct his lack.

In fact the Bill of Rights gives us a right to nothing – though that nothing is very important. There are areas where government should do nothing and is constitutionally mandated to do nothing. WE have no restriction on speech but also no guarantee anybody will listen to what we say. We have no restriction on the press but also no guarantee we will have the money to print what we think everybody should read. No restriction on the right to bear arms (except for felons) but also no guarantee that we will have the money to purchase those arms. Nobody has any constitutional right to anything beyond the fruits of his own labor.

Constitutional freedoms might be called negative freedoms. They are things that may not be done to us. There is nothing there to force any private citizen to do anything for any other citizen. Nor if there anything to force the government to do anything for any citizen.

There is a great difference between the constitutional rights of freedom from certain government actions and what some today are pushing as right to have something. For example many of our politicians are claiming that health care is a right. That would be a right to have something whether you've earned it or not. Those politicians fail to mention two important facts:

1. Any such right can only exist if somebody else is obligated to provide it. We cannot have a right to health care without imposing the obligation on someone to pay for it. Giving someone such a “right” hands over to that person the fruits of other people's labor.
2. We do not have unlimited resources. Those who multiply “rights” to health care, decent housing, adequate nutrition etc. seem to assume that there is some source of food, housing, medical care etc. which must only be directed to those in need. That is a nice theory but it cannot withstand the trial of empiricism and facts. In fact, giving people what they want regardless of their labor encourages them to avoid that labor, thus reducing the resources that would otherwise be available.

Nobody has any constitutional right to the fruits of another person's labor.

I am old enough to remember the 60's when the phrase “the world owes me a living” became popular among some young people. Prior to that time nearly everybody, at least in the U.S., understood that work was required to produce the necessities and niceties of life. Work is still necessary. Someone has to produce and transport the food and clothing we need, build our housing, undergo the arduous regime of medical school etc. The “world owes me a living” attitude cannot change that. At best it will take from the worker and give to those who do not work. More likely it will discourage work and reduce the resources available to everybody. When those resources are all allocated, someone will go without as happened in the USSR.

The world does not owe anybody a living. At most it owes us opportunity to scramble for that living ourselves. There is an immense difference between a right to speak without government interference and a right to the fruits of someone else's labor. That is why our founders were wise when they included in the constitution many rights of freedom from government control, but no “rights” to have anything someone else would have to produce.

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The “Living Constitution”

Suppose you are the president of a building maintenance company. In about 1982 that company signed a contract agreeing to maintain all the windows in a certain office building. The option for yearly renewal has been exercised so the contract is still valid.

One day you get a call from the building manager informing you that you are in default and he will sue unless you correct the problem. What? You've had people there every week, cleaning the windows and making sure that they are weather tight, how can you be in default? The manager points out that the contract says all the windows in the building. However you have done nothing for the Windows operating systems on the computers in the building. Many of them are now virus-infected and not working properly. He demands that you fix them.

Of course you respond that the contract never meant computer windows which didn't even exist when it was written. “Not so,” he replies. “We have a living language and the contract is written in that living language so it is a living document. The term 'windows' now applies to computer Windows which means the contract does as well.”

Of course that sounds silly. Should you be sued I would hope that any judge would throw it out of court. The contract has the meaning it had when it was written. To claim otherwise would potentially change the meaning of all contracts. For any agreement to be useful it must have a fixed meaning. Otherwise we would not know what we will be expected to do to fulfill our part of the bargain.

Unfortunately there are many who want to change the meaning of the most important agreement we have in this country – our constitution. Those people claim that it is a “living document,” a high-sounding phrase, but essentially without meaning. Documents do not live except in the sense that they can be changed by the agreement of all parties involved. Contracts can be changed if all signers agree. Likewise the constitution includes provision for changes, two methods of making changes in fact. That has been exercised throughout our history so that it now has 27 amendments. That in fact is the only sense in which the constitution was ever intended to be a “living document.”

Those claiming that we have a “living constitution” simply want to change its meaning without getting the people’s approval in the manner provided. Effectively, they want to arrogate to themselves the dictatorial power to change our government, regardless of the will of the people.

“But wait,” some will say. “What about the fact that some parts might be understood differently? In fact some of the writers themselves disagreed over what they wanted it to say.”

Those objections are common today but are in general mere smoke screens, put up by people who do not like constitutional restrictions on government power. While there are a couple of points that might be difficult to understand, the great bulk of the document is quite explicit when we look at the common meaning of the wording at the time it was written. That is the only valid way to look at it, just as with any contract the only valid meaning is what the wording meant when it was written.

The fact that there is now a computer operating system called called “Windows” has no effect at all on contracts written before it existed. Likewise the fact that some words have changed their meaning since 1787 has no effect on the meaning of the constitution. We have to look at what those words commonly meant in legal documents of 1787, or in the case of amendments, at what they meant when the amendment was written. The meaning must remain fixed if it is to have any meaning at all.

As for the writers disagreeing among themselves as to what they wanted the constitution to say, that is also meaningless. When people get together to write a contract there is almost always disagreement on what that contract will say. Some may want an escape clause, some may oppose it. Some may want automatic renewal in the absence of specific cancellation while others may want renewal only if all parties specifically agree to it. That means nothing, what counts is what eventually gets written in the final, signed document.

Likewise what the constitution's writers wanted has no validity. Some wanted a quick end to slavery, some wanted slavery to be protected forever. Neither viewpoint became part of the constitution. Only the wording actually included and ratified has any force or validity. That is the only way that remarkable document can protect our liberties. If its meaning can be twisted to suit the whims of politicians, it becomes nothing more than a historical artifact. However if we follow the wording as it was understood in the time and context of its origin, we will protect our liberty from homegrown tyranny.

To allow twisting of the constitution's meaning removes our ability to know what to expect as citizens and in our businesses. That harms our personal life as well as our economy just as an ex post facto law would. (See my blog on that at http://hallillywhite.blogspot.com/search?q=ex+post+facto).

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Mob Rule, Part 3

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The mob mentality – it is dangerous to both our personal character and to society at large. If we subordinate our actions to the beliefs and decisions of a group we become less human, less than we should be. We also endanger others and risk passing along false or bigoted beliefs to our families. This is a problem that has plagued society throughout history and it shows no sign of going away on its own. If it is to be eliminated we must take action against it.

How do we recognize the problem so we can deal with it? Perhaps the most insidious aspect of the mob mentality is that we can so easily participate in it without realizing it. Indeed, the essence of a mob mind-set is not thinking about what we are doing, a severe form of groupthink.

How then can we stop this nonsense? How to eradicate or at least reduce the mob mentality in our society? It won't be easy but there are ways to do it, and it starts with each of us. We must look at our own lives and thinking patterns before we can presume to tell others how to correct their own mind-sets. A recipe for starting to do this is:

First, self-awareness. We must learn to ask ourselves if we really believe what we say in public, or are we just putting up a front? Are we just “going along to get along?” This self-examination is probably the hardest part. Ideally we will learn to examine ourselves in the heat of a group consensus. However even thinking about it afterwards is helpful, that can be a step towards clear thinking in the face of inappropriate group consensus.

Second, if we find that we are showing signs of a mob mind-set, we can attack the causes directly. If we are deindividuating ourselves we can stop and think of ourselves as individuals. I could say to myself, “Hal, you are a person, an individual with a brain and integrity of your own. Why don't you act like it? Who will you see in the mirror tonight, a real person who acted like a man or someone who gave up his personhood to others?”

Third, we can also look at the “enemy” as individual human beings, not part of an amorphous group. I can think that each person who opposes me is a human with a face, with human desires and needs. Those people may enjoy the same sports I enjoy, watch the same sunset I watch, and in many other ways be the type of people I might enjoy knowing. The fact that we have different colored skin or disagree on politics, religion, or other things is really only a small part of who we are. If I can call those people by name that will help even more. It can be easy to hate someone for the disagreements we have or the color of their skin. It is more difficult to hate Bill Smith who likes football and barbecues, but happens to disagree with me in one area.

By such measures we can reduce our own susceptibility to mob mentality. That is an important beginning. What next? How do we help and encourage others to do the same? The first step is to have the courage to speak up. Frequently a group will refrain from anti-social action if only one person points out the problems. That should not be surprising since most members of a mob are indulging in groupthink. They believe everyone else agrees with the group. One person speaking out can destroy that fallacy and they may all wake up to the reality of what they are doing.

However there are cases in which one person opposing is not enough. I doubt a Ku Klux Klan cross burning would stop just because one person spoke out. However even then there are measures that can be effective. The first is to reverse the deindividuation, essentially re-individuate some of the mob members. If possible call them by name and mention something in their lives that calls them back to their humanity. In the book To Kill a Mockingbird Scout does this by calling Mr. Cunningham by name, then apologizing for the fight she had with his son. Suddenly that man must recognize himself as an individual. He can no longer put aside his own personhood.*

Though a work of fiction, I believe that is an example of how a person can be reminded that he is not simply part of an amorphous group, he is a human being. I suspect that even a KKK member, if he can be identified by name, would respond to such an approach. His anonymity would be removed and he would be forced back into the world of individual persons.

OK, I know I've given my readers (if I still have any) a tall order. However nothing worthwhile is likely to be easy so I challenge you to do your part by first examining yourself, then by having the courage to speak out when a group is going off into the mob mentality. It may not be easy but I promise that it will be worth it.

*I thank the author of the Wikipedia article on “Deindividuation” for reminding me of that episode in the book.

Mob Rule, Part 2

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Imagine if you will the following:

Situation 1: You're walking home when you see a wallet in the gutter. Inside you find $250 in cash. It turns out that the wallet belongs to your neighbor. Do you keep the cash and claim the wallet was empty when you found it, or do you return it intact?

Situation 2: A major storm just passed through your area. It dropped a few limbs from a neighbor's tree in your yard but did no other damage to your property. While cleaning up you accidentally break a window. Repair will cost $250. Your insurance won't cover the damage because you broke the window yourself. Had the window been broken by a falling tree limb it would have been covered. Do you pay for the repair yourself or do you claim that it was storm damage and get the insurance company to pay for it?

Most people would probably return the money to their neighbor. In fact many would return it to a stranger. However many of those same people will cheat and tell the insurance company that the storm broke the window. Often people who consider themselves honest will not only defraud the insurance company but will take a few “unauthorized benefits” from their employer or help themselves to some items at the store that they didn’t exactly pay for. Some business managers will divert company resources to their personal use. Why that disconnect in honesty? I think the cause is similar to the mob mind-set discussed yesterday; actually what we might call the reverse mob effect. Anonymity and diffusion still play a big part, but in a different way.

First, anonymity and deindividuation: The wallet owner is an individual, but the insurance company is an amorphous entity. In this case it is the victim, not the perpetrator that gets deindividuated. It is the victim who lacks personhood. That makes it easy to think we are harming nobody when we cheat that company.

Second, diffusion: The effects of cheating the company are diffused over a large number of people, doing very little damage to any one of them. In this case it is not the responsibility that is diffused but the damage. Stealing that $250 from the insurance company is still fraud, but is less visible because only a little is stolen from any one individual.

This reverse mob effect affects business and public life. For example, once when I complained about wasteful government spending I got the response, “I regard it as my duty to get as much federal money spent in the county as I can, even if it is spent on wasteful projects.” The speaker was a county commissioner, allegedly a fiscally conservative republican. I had complained to him about the waste but he just wanted to get money into the county. He didn’t think of the fact that he was taking tax money from the widow in Nebraska, the struggling young family in Wyoming, or the parents in California trying to pay for their daughter’s education. The reverse mob effect allowed him to ignore the overall results of his efforts.

Such shortsightedness is common. It is easy to convince ourselves that nobody is hurt when we take maybe a hundredth of a cent from millions of people. We don’t want to think that millions of people may be doing the same, stealing in the aggregate rather large sums of money from each victim. Nor do we remember that a business or government is nothing but a collection of people. Those people need and deserve the fruits of their labor to care for themselves and their families.

Businesses do not manufacture money; instead they exchange goods or services for it. If they lose money to theft they must make it up by raising prices, cutting employee pay or benefits, or reducing payments to stockholders. Worst case, they go out of business and leave customers, employees, stockholders, and even creditors without funds. When we cheat a retailer, insurance company, or any other business we are really cheating the people who depend on that business. Spreading our crime over many people does not change the fact that it is a crime.

Likewise, government has no real way to obtain resources except from the people. Even borrowing or printing money is just a different way to get those resources from you, from your retired first grade teacher, and from other citizens who have to give up the results of their work to provide for government projects. If we demand and get a fancy sports stadium at taxpayer expense, we are really taking the money from those people, many of whom don’t care a fig about sports.

We can improve our economy if we get everybody to realize that there is no such thing as stealing from government or business. Those organizations are only intermediaries between us and other individuals, flesh and blood people with names, homes, families and their own wants and needs. When we defraud a company or the government, we are really defrauding each individual who has an interest in that organization.

Mob Rule, Part 1

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It was in the 1930’s when Hugh Nibley, a doctoral candidate in the classics, proposed writing his dissertation on the perennial phenomena of the mob in the ancient world. The topic was rejected. Too unreal, too irrelevant to the mood and spirit of the modern world the committee said. Nibley, later a renowned scholar, had to choose a different topic. The institution that rejected a study of the mob as irrelevant to modern society was the University of California at Berkley.

As Berkley found to its sorrow, the mob is very relevant to our society. Not only have we had riots in many inner cities, but less publicized mobs often affect public decision-making. It’s worth examining the mob mind-set not only for that reason but to see how it affects some of our own even non-violent actions. I’m not a psychologist but I have read a bit about the subject and I conclude that there are two components of that mind-set:

First, the anonymity of the mob, what psychologists call deindividuation (essentially losing ones individuality). Participants don’t think of themselves as individually responsible for the mob actions. Removing that personal responsibility allows them to do things they would never do if they thought they would be recognized and called to account as individuals.

Second, diffusion of responsibility. Mob members can easily think that they had no part in the decision to act, so they are not responsible for their actions. Everybody just follows the crowd with no conscious decision-making on the part of most mob members. This is groupthink writ large.

The result may be a lynching, beating up someone of different ethnicity, stealing merchandise from a store during a riot, or other anti-social action. It may just be the crowd getting out of hand at a rock concert. In the minds of mob participants none of it is their fault; they are just going along. The fact is that people will do things as part of such a group that they would never do as individuals.

Those moral gyrations may sooth consciences, but the participants are still responsible for their actions. The person who steals a TV during a riot is just as guilty of thievery as the burglar who breaks into the store at night. The Ku Klux Klan member who helps beat up a black person is just as much a thug as the mugger who beats someone without hiding behind a white sheet. The lynch mob member who helps hang a potentially innocent man is a murderer, quite as guilty as the guy who gets mad at his neighbor and shoots him.

“That’s all well and good,” you say, “but how does it apply to me? I’ve never been part of such a mob.”

Are you sure of that? You may have never been part of a violent mob but look again at those two aspects of the mob mind-set. Do they not apply to non-violent group actions as well? I would call anything done with that mind-set a mob action.

Look at business decisions for example. If “the company” decides to mislead customers or cut corners on quality, is that somehow better than if you or I as an individual did the same? Yet it is easy to mask our part by anonymity or by diffusing responsibility, especially in a large corporation. In fact the Spanish term for corporation is “sociedad anónima,” literally anonymous society. The large group allows a mind-set similar to that of a mob; people can think of themselves as not responsible for their actions and unlikely to be held accountable for them. Yet the employee who helps mislead a customer is just as guilty of fraud as is the charlatan who sells snake oil.

Other organizations can have similar problems but there is one that exceeds them all – Government. Government is most prone to this problem and is in a position to create the most damage by its mob action. In addition to deindividuation and diffusion of responsibility, government adds a patina of legitimacy to the mob mind-set. This is combined with a power beyond what any private organization possesses.

Few people are willing to steal from a neighbor to get money for entertainment. However we accept all too readily such things as congressional earmarks for museums of dubious value or a bridge to nowhere. Cities are all too willing to provide tax money for sports teams or artwork, which only a small minority of their citizens will ever enjoy. Local governments even force people to sell their property to private businesses preferred by the politicians. Those actions amount to thievery, regardless of how they are justified. The elected officials who support them are thieves and the voters who demand them are thieves as well. The anonymity, diffusion of responsibility, and patina of legitimacy associated with government do not change that fact.

Fortunately we have progressed beyond the time when people thought slavery was acceptable because government approved it. Now we need to get beyond thinking that government thievery for earmark projects or favored groups is acceptable.

We can hope that people will catch on to this and realize that they are responsible for their actions, either as individuals or as part of a group. However the only way that will happen is for those who already know this to spread the word. As citizens we must avoid demanding government-based thievery for our benefit, and we must oppose it when others make such demands. In our work we must refuse to take part in mob-like actions of deceit and fraud. And of course we must teach this to our children, Lord knows the schools won't teach it.

Words, Just Words

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“Freedom of religious worship and freedom of antireligious propaganda is recognized for all citizens.”

Believe it or not, that quote is from the constitution of the Union of Soviet Socialist Republics, Article 124. That’s right, under communism the Russians and their colonies had a constitutional guarantee of religious freedom. We all know how effective that guarantee was. The communists wrote freedom of religion into their constitution, then ignored it.

The fact is that constitutional protections depend on more than the words on paper. There are always people willing to stretch or even ignore the words. They may have good intentions or they may just want to amass power to themselves. Either way, it is only by constant vigilance that we can maintain our freedoms. For a U.S. example we need look no farther than the ninth and tenth amendments, both of which have been ignored for decades:

Article 9. The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

Article 10. The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

We have seen the federal government continually take powers not delegated to the United States, powers that should be reserved to the states or the people. For example my state allows medical marijuana and assisted suicide (both of which I oppose). The constitution clearly does not delegate regulation of drugs and suicide to the federal government, yet that federal government has stepped in to try to overturn the state law. Years ago the federal government issued quotas regulating who could grow wheat and how much. They even prosecuted a farmer who grew wheat that never left his own farm but was used to feed his animals. Such actions were in clear violation of the ninth and tenth amendments, yet the government got away with it.

The federal government has also imposed de facto quotas on employment, requiring equal outcome instead of equal opportunity under the guise of outlawing disparate impact (also known as adverse impact). As a result, the 14th amendment is often ignored if authorities prefer to give preference to certain groups.

Those constitutional abuses continue because the citizens fail to defend the document. Reportedly Benjamin Franklin was once asked what kind of government we had been given. His answer was, “a republic – if you keep it.” Keeping it requires constant and informed vigilance. I believe that this means that citizens must:

1. Know what the constitution actually says and means. In general this is not that difficult, it is not a lawyers’ document. Normal people can understand the words and meaning.

2. Understand the reasons behind the various provisions. For example, the founders did not intend to give us a pure democracy. Instead they intended to provide a limited government, restricted from doing certain things no matter how many people want them. They also intended to provide a balance between heavily populated states and states with smaller populations, and between the different branches of government.

3. Be willing to sacrifice their own short-term interests for the benefit of long-term freedoms and the benefits that come from living under a constitutionally restricted government.

4. Vote wisely. Too often people are urged to vote as though just voting would help the country. Instead they should be urged to inform themselves and evaluate the issues and candidates carefully. We do not need more ignorant or apathetic voters, we need voters who care enough to learn and think about how they are voting. We need to support candidates who are wise, ethical, and committed to constitutional government.

5. Participate in government by writing representatives and by other means. Congress, the president, governors etc. are our employees and like any boss we should keep up with what they are doing and let them know how we think they should do their duty as our employees.

The constitution is a wonderful document. However it will remain just words unless we the people actively defend it.

Independence Day

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Revolutions. History is strewn with them, including a minor one in Ecuador while I was there as a missionary. That revolution threw out a military junta but in so doing improved the situation of the citizens only a little. The same has happened repeatedly in this world. All too often overthrowing a tyrant only allows another to take his place, sometimes a worse one. Czarist Russia was replaced by the horror of Stalinist Communism. The French replaced their king with the excesses of the French Revolution. My friends in Ecuador overthrew the junta, then elected a demagogue. Yet tomorrow we celebrate the revolution that created these United States, probably the freest country in the world. Why was ours so successful while so many others failed?

The reason is that it is easier to destroy a bad government than to create a good one. Most revolutionaries concentrated on the revolution, not on the aftermath. That left the way open for new tyrants to take over. Our founders did not make that mistake; they went to great lengths to prevent government from becoming too powerful. They defined their principles in two remarkable documents, the Declaration of Independence and the Constitution. I believe that every Independence Day we should review those documents and see what we should do to defend the principles described therein.

The Declaration of Independence was shocking at the time it was written. Its statement that all men are created equal must have been a shock to believers in the divine right of kings. Yet that simple statement contains the basis of our belief that we are all born with equal rights (though not, of course, equal abilities).

The next idea from the Declaration was perhaps even more radical. We are all endowed by our creator with certain inalienable rights, including life, liberty, and the pursuit of happiness. Herein is the germ of limited government. If we have inalienable rights then no government can in justice take those rights away from us except as punishment for crime. That was an unheard of idea in a time when kings and aristocrats demanded obedience from those regarded as of less worth. It took decades, a civil war, and a civil rights movement to free the slaves and remove official racism. That only underscores how radical those statements were.

Next in the Declaration comes a line that is often ignored but is of supreme importance. “That to secure these Rights, Governments are instituted among Men, deriving their just Powers from the Consent of the Governed.” This stood previous ideas of government on their heads. The government existed for and at the pleasure of the banker, the farmer, the garbage hauler, etc. collectively. It was an idea so radical as to be beyond the conception of most of the world at the time.

Of course if government exists at the pleasure of the governed that implies that the governed must take responsibility for how that government operates. The Constitution describes how that is to be done and again includes some ideas that were unheard of when it was written.

First was the idea that government was to be limited. Herein lies the genius of our founders. Democracies had existed before, but our founders added the idea that even a democracy cannot go beyond certain bounds. Based on the statement that all people have inalienable rights, the founders deliberately built restrictions into the Constitution. Certain laws are prohibited, no matter how many voters want them.

A bill of attainder was prohibited at the outset, as was any ex post facto law. Congress cannot just decide that you are a bad person and declare that you a criminal. That would have the effect of making you illegal. A person cannot be illegal, though his actions may be. Nor can they decide that an action you committed yesterday was illegal because of a law passed today. Those restrictions allow citizen freedom from arbitrary government action.

The Bill of Rights was added soon after constitutional ratification and provides even more protection. Short of actual threats, you are free to say anything you want about the president, congress, or other government officials. Even if all the voters in the country want to outlaw certain forms of speech, they are prohibited from doing so. We have an inalienable right to our ideas and the free dissemination thereof.

Other rights of course have similar constitutional protections. That was the great legacy our founders gave us and for which we should be forever grateful to them.

However gratitude alone is inadequate. It has been wisely said that freedom is not free. We are constantly faced with politicians who love power and who would like to increase the power they have. The price of freedom is therefore eternal vigilance. We must consider wisely those for whom we vote and the type of government we support. We must resist demagoguery and the attempt of charismatic politicians to reduce those restrictions on government. We must also express our views to our hired representatives, not just send them off to do as they please.

We must also resist the temptation to vote benefits for ourselves at the expense of others. Those others whom we would tax to help ourselves should have the inalienable right to their liberty. That includes the right to decide how their property is used, subject only to the most necessary restrictions.

Most of all, we must realize that government can be a good servant but is a fearful master. We must keep it down as a servant and not allow it to become a master. Sadly, many politicians tend to think of themselves as an elite, above the ordinary citizen who should defer to their “superior wisdom.” That is a dangerous attitude and those people should not be elected.

Some politicians have also claimed, “We’re for the people, they’re for the powerful.”* I regard that as demagoguery, it detracts from the fact that government is the powerful, the most powerful entity in the country. That is a power that must be controlled and restricted.

Let us, this and every Independence Day, review the blessings of our limited, constitutional government and consider how we can best defend that constitutional government.

*The Gore campaign used that slogan in the 2000 presidential election.

Who Pays, Who Uses, Who Decides?

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Yesterday I introduced the concept of utility, what something is worth to a particular person or company. Utility represents the importance of money, time etc. and can be relatively independent of such things as calculations of expectation. Let’s take it a bit farther today.

Suppose you’re the owner of a small business in need of new equipment. The equipment will cost about $100,000. Your gross income is about two million dollars per year. Of that, 1.8 million is committed to rent, supplies, and payroll. That equipment will cost half of what’s left. In addition you have to live with the equipment for years to come. How much attention will you pay to getting good equipment at the best price you can?

Now let’s change the scene a bit. Instead of a small business owner you’re a purchasing agent in a large company. On your desk at the moment are twenty requisitions for purchases that will cost between ten thousand and a million dollars each. Among those is a requisition for the same equipment needed by the small business above. How much time and effort will you spend getting the best price and making sure the equipment is the best you can get for the money?

Almost certainly the small business owner will pay a lot more attention to this purchase than will the agent in the large company. In the small business $100,000 represents half of the available monetary utility. To the purchasing agent it is a miniscule fraction of what he spends every year. Furthermore, the agent won’t have to live with that equipment. In fact he probably won’t even know how well it works once it’s installed. For the purchasing agent, the actual use of the equipment probably has no utility whatever. However for the business owner the use of the equipment has a high utility, in fact the very existence of his business may depend on it.

Does this mean that large companies are doomed to pay inflated prices for inferior equipment? Not at all. Those large companies that move decisions to the lowest level feasible can get the advantages of good decisions made by people motivated by high utility of the outcome. The wise company will shift most of the purchasing decision to the manager of the department where it is to be used. A purchasing agent can help by using his industry contacts and knowledge to get the best price, but the department that actually uses the equipment should have the biggest say in the matter.

The above illustrates some of the different stakeholders involved in almost any decision. For simplicity let’s concentrate on purchasing decisions, though this applies to decisions ranging from where to go on vacation to if we should invade Afghanistan.

First, there is whoever is going to use the purchase. This person or department derives utility from how well the purchase does its job and therefore has a high interest in getting something that works well.

Second, there is the person or company paying the bill. That person or group of people will have an interest in keeping the cost down.

Third, there is whoever is making the decision. Decision-making power alone, however, does not motivate to either keep costs down or to acquire something that works well. In fact if the decision-maker is neither paying the bill nor using the purchase he may well not care very much about either cost or effectiveness.

We can make a table of this as follows:


Decision-maker pays for purchase and uses equipment - Will be motivated to save money and get good equipment.

Decision-maker uses equipment but does not pay for purchase -Will be motivated to get good equipment but not to save money.

Decision-maker pays for purchase but does not use equipment - Will be motivated to save money but not to get good equipment.

Decision-maker neither pays for purchase nor uses equipment - Will not be motivated to either save money or get good equipment.


Clearly the person or group that both uses and pays for the equipment has the greatest motivation to both keep down costs and buy something that will work well. In fact, if it comes to a trade-off between cost and performance, they are also in the best position to evaluate that trade-off

It should come as no surprise that the best decisions are made when decision-makers, users, and payers are all the same person or small group of people. And of course the worst decisions are likely to be made when the decision-makers neither use nor pay for the purchase. Care in decision-making tends to be a direct result of how much utility the decision-maker has at stake. That is an important reason that decisions should usually be made at the lowest organizational level feasible, and made by someone with a vested interest in both cost and performance.

The astute reader will have already thought of an important area in which decision-makers neither use nor pay for what they spend money on - government. That is one reason government can be so inefficient. Its employees who make spending decisions seldom have much investment in the money they spend; after all it’s not their money. Neither do they derive much utility from the use of what they buy with that money. The government employee who buys anything from a gross of paper to an army tank is not spending his own money and is unlikely to use either the tank or the paper. His utility comes not from the money he spends or the purchase he makes, but from the raise or promotion he gets for following procedures. If he has an opportunity to get a better product or a lower price, he may do so, but only if he can do it within the rules imposed on him.

“But how about local governments?” you ask. “Surely their employees have more motivation to spend wisely. After all, their neighbors see the results and don’t want their local taxes wasted.” That was the case years ago, when local governments spent mostly local tax money. It is not the case today. Local governments get much of their financing from state and even federal funds. They tend to see it as free money, money that costs them nothing in terms of utility. In fact I remember a county commissioner telling me that he thought it was his duty to get as much federal money spent in the county as he could, regardless of how efficiently it was spent. That man was reputed to be a fiscally conservative republican!

We have a similar problem with government regulation. Some regulation is necessary of course, but it is easy for regulators to go overboard. They do not spend their own money to hire enforcement officers, and the burden of following those regulations falls on someone else, not them. They are able to impose loss of utility on others at no loss to themselves.

As long as decision-makers in government and business have little interest in saving money or getting a good return for what they spend, we will have waste. The only way to get better decisions is for the decision-makers to have a stake in both the cost and the outcome of their decisions. They must put their own utility at on the line.