The Capitalist Philosophy of the Muppets

The Muppets is about a dilapidated LA Muppet theater, an business tycoon looking to tear it down to drill for oil, and a familiar cast of characters trying to raise the money to save it. Last week Eric Bolling at Fox News claimed the movie is "brainwashing kids against capitalism" because the villain was a business man.

But The Muppets is the most capitalist movies this year. When they found out that their theater was in danger of being torn down they didn't lobby the California Historical Society to outlaw demolition. They didn't threaten to contact the EPA about the (admittedly real) problem of putting an oil well in downtown LA. They didn't head to Washington to seek a subsidy or add to construction regulations. They didn't even engage in California's infamous referendum system. In fact, none of these ideas ever occurred to them.

No, they did what every good capitalist does when someone tries to buy something they want: they outbid him.

Public Domain Day

It's Public Domain Day, the day when hundreds of authors' works enter the public domain. Here's a complete list. Some highlights:

-William Butler Yeats, who won the Nobel Prize in literature in 1923
-Sigmund Freud, famed psychologist
-Zane Grey, a prolific Old West novelist
-Luis Philip Senarens, one of the most prolific dime novelists of his day
-Henry Salt, credited as the first writer who argued that animals should have rights
-Zona Gale, Pulitzer Prize-winning playwright
-Siney Howard, a playwright and screen writer who won a posthumous Academy Award for the screenplay of Gone With the Wind

The Value of the Original

The Original of Laura, the last novel of Vladimir Nabokov, was published last week. Normally, a new novel doesn't get a lot of media attention but this one's a little different: Nabokov didn't want it to be published. In fact, he wanted it burned.

It was in his last will and testament that all unfinished works of his should be destroyed. When Nabokov died in 1977, his family didn't carry out this wish. They were emotionally distraught and procrastinated the decision, putting the work in a bank vault. For thirty years, a battle of what The Times called "the demands of the literary world versus the posthumous rights of an author over his art" worn on. Eventually, the literary world won...sort of. The novel, apparently, isn't very good (at least in the state it's in).

According to the author's son, destroying the manuscript was something he never seriously considered. Such an attitude makes me nervous; not only did his son fail to follow an aspect of his last will and testament (as did his wife, who died in 1991), it has the potential to shrink the number of good novels.

Nabokov, like many writers, clearly didn't want works published that fail to live up their standards: even after death (the idea that you leave a part of yourself behind after you die is, I'm sure, a motivation for many writers). Suppose the standard attitude of posthumous publishing becomes "ignore last requests and publish anyway." I guarantee you, some aging authors will be less willing to even start a novel in fear that they won't be able to complete it before their death, even if it turns out they could. This can cost the literary world something very valuable. While suffering from tuberculosis, and certainly concerned he might die soon, Orwell worked on 1984, which was only published a year before his death. Mark Twain, Jane Austen, Charles Dickens, and Jules Verne (to name a few) also published several works near the end of their lives.

New Orleans Goes Third World

Earlier this month 20/20 ran a "Politically Incorrect Guide to Politics." This segment stood out:

Students of my class (or those familiar with Hernando de Soto's Mystery of Capital) should see the parallels. He discovered that the reason developing countries have trouble growing is because of a stifling bureaucracy preventing people from establishing legitimate businesses and securing property.

The Ten Really Important Things To Remember

Friday on Real Time, Bill Maher argued the Ten Commandments demonstrate the backwardness of religion and have little to do with our time. Most of them are stupid, referring to how great God is, and others are simply obsolete.

But those first five are really about making the second five legitimate. This is the word of the only God (a word your parents are likely to share), and he's serious about being the only God. You better not pay attention to anyone who says some other deity wants to add, subtract or modify the laws. And they're good laws. I'm not a religious person, but it's easy to see the advantages in taking these things to heart. The sentiment, the big picture, behind the second five are things all cultures can embrace:

-Don't murder.
-Don't commit adultery (or, generally, "keep your promises")
-Don't steal.
-Don't lie about your neighbor (or, generally, don't lie)
-Don't covet your neighbor's wife/house (or, don't desire stuff to the point that it hurts others)

True, these are not perfect and could use some updating. But the essential elements of the sanctity of people, property, and promises are there. Religion isn't mindless and the people of the past weren't stupid. Just because it's about God doesn't make it worthless.

Happy Thankskeeping Day

John Stossel reminds us that Thanksgiving is really a celebration of private property, not community and hearth. The Pilgrims starved for their first two years in the New World because communal farming doomed them all. When they finally instituted private property, no one had an incentive to shirk; everyone worked harder. The result was a bumper crop and, in time, a new holiday.

HT: Matt Huber

Barking Up the Wrong Rain Forest

Robert Naiman at the Huffington Post has misplaced fears in free trade. Citing the upcoming trade agreement with Peru, Naiman writes the agreement "would give U.S. oil companies powerful new rights to exploit Peru's Amazonian rain forest...Indigenous leaders in Peru have rejected the agreement."

If the problem is the government will give US companies rain forest that others agree on, then the fundamental problem is government owned land, not free trade. If the indigenous people owned the land, then they could decide if they wished to lease or sell it to others. With free trade, they could get more money for what they would be willing to sell, allowing them to enhance their life in other ways.

Free trade is not the problem. A lack private property is.

Give Us This Day Our Daily Shootout

For some strange reason the Church of England is angry that people are going to their Winchester Cathedral. Well, they're not really going there but they are in a video game. And no, it's not in some religious expansion for The Sims. It's to kill people in Sony's PS3 game "Resistance -- Fall of Man."

Granted, I'm not surprised that they are upset.

I wasn't really sure what side of this debate I sympathized with. After all, the Church owns the building. Don't they have a right to say how it's depicted? But the bricks of the building are not the same thing as images of the building. Suppose I take a picture of the Cathedral and I make it look like it's on fire. Or being crushed by an 80-foot tall Jesus. Or placing Pauly Shore in front of it. All of these things depict the Cathedral in a negative way. If I put them on the web, does the Church of England have a right to make me take them down (free speech arguments aside)? After all, don't I own those pictures?

You might say that because the subject didn't consent, I don't have that right. Let's ignore the fact that the subject is a building and cannot consent. I'm talking about the nature of private property. The Church of England allows people to take pictures of the Cathedral (granted, I don't know this for sure but I think it's a reasonable assumption). If they wanted to control its image so much, why don't they ban such photography?

It's a question worth thinking about, not just if the Church has a right under private property but if it's socially optimal to extend private property that far. Again, I'm siding with Sony and not just because I think it would be fun.

Pricing the Waves

Today in the NYT Ralph Nader called for the broadcasting companies to be charged for their use of the public airwaves. I applaud Mr. Nader's interest in establishing a pricing mechanism for the use of a scarce resource. But this is not the same as a price. Prices emerge out of market interaction, not political processes. If Mr. Nader really wanted broadcasters to pay for their airwaves, why not sell it to them--or whoever will pay--outright? That way we can eliminate the existing regulation that's used to govern this current public good while at the same time making people pay for what they use.

Capitalism, By Definition

Over the past couple of days I've been in a debate with "Red Deathy" on Wikipedia. The debate began because I noticed an obvious contradiction in the criticisms section. The entry (correctly) says that capitalism is based on voluntary transactions. (That part of the entry has since been removed by Red Deathy, but as I point out, it's really still there.) However, the criticism section notes that "unfree labor" (ie slaves and serfs) is consistent with capitalism. This doesn't make any sense.

Red Deathy disagrees, arguing sometimes people are faced with a series of bad choices and thus they are forced to take a job or buy a product. I, however, maintain that this is not force. The company that hires the destitute did not make them destitute. They only gave them an opportunity; no force was involved. This is a common confusion.

When the state demands tax dollars, it presents a choice: give me money or I arrest you. If a firm tried to do the same thing (work for me or I'll arrest you), then it would be violating private property and thus it would not be capitalism. Capitalism and coercion are inconsistent.

Coase and the Curfew

Cleveland kids may be fighting the law a bit more this summer. The city is enacting a new, earlier, curfew for young teens. Apparently, with so much time on their hands, they are running around making noise and driving some citizens crazy.

Time for a lesson from Ronald Coase. As he noted, it is not, say, sparks from a railroad that are the problem but those sparks in the presence of a wheat field (which cause nasty fires). Similarly, it is not kids who are out are night, or even loud kids out at night, but loud kids in the presence of people trying to sleep. The problems that occur when both are present should not be solved by denying kids the right to be out at night (or banning railroads).

A better solution would be a fine (even better would be that fine then paid to the harmed parties). Noise complaints would followed up by an officer not just breaking up the offenders but issuing a ticket. I guarantee there will be fewer noise problems without punishing those who just want to stargaze.

Boudreaux On Elephants, Boudreaux On Statistics

Don Boudreaux and his wife Karol Boudreaux both published excellent articles in the past week that are worth taking a look at.

Don wrote for the Christian Science Monitor, succinctly describing a common mistake made in interpreting data concerning averages.

Karol wrote for the The Nation, showing how lifting the ban on hunting elephants can actually increase the elephant population. (I've made a similar point last week if you are in search for more free market environmentalism.)

Farming Elephants

Every year millions of cows, sheep, pigs and chickens are slaughtered every year. (I don't have exact figures but The Straight Dope estimates that McDonald's alone sends ten million cows to the grinder, annually.) Millions. How can this be? With so much death, why aren't these animals on the endangered species list? How can they not be extinct?

It's because we raise the animals, too. Famers all over the world are watching their herds and making sure the population-and their livlihood-don't run out. They breed them, raise them, care for them, make sure they have lots of offspring. And then they kill them. Say what you want about the ethics of it, but that's a pretty good way to make sure they never go extinct.

Some African countries may be taking this lesson to heart as they ponder lifting the ban on the ivory trade. Some environmentalists insist this will cause poaching to skyrocket. But just like Prohibition, the drug trade and any other banned sector, prices increase. In places where the property rights are sound and secure, people will raise the elephants like ranchers raise cattle. Populations will expand, prices will fall and poachers will be put out of business.

Benefits of Private Property

I’ve been reading a history book called “History of the United States” printed 1880 by John Clark Ridpath. After discussing the disastrous situation at the early Jamestown colony, he noted the following.

Thus far the property of the settlers at Jamestown had been held in common. The colonists had worked together, and in time of harvest deposited their products in public storehouses. Now the right of holding private property was recognized. Governor Gates had the lands divided so that each settler should have three acres of his own; every family might cultivate a garden and plant an orchard, the fruits of which no one but the owner was allowed to gather. The benefits of this system of labor were at once apparent, and the laborers became cheerful and industrious.

The Nature of Property

In the new issue of Econ Journal Watch, Daniel Klein reports on a survey he's completed on why some economists support the minimum wage. Of the 644 economists (those who signed a petition supporting the minimum wage) he sent the survey to, 95 completed it. A handful refused to do the survey, among them was Henry J. Aaron of the Brookings Institute who sent this short letter. (The sentence Aaron is referring to says "In one manner of speaking, liberty is freedom from political or legal restrictions on one’s property or freedom of association.")

Aaron argues that "[p]roperty does not exist apart from political and legal restrictions on its use." This is a very strange definition of property. It says that the only private property that can exist within the realm of the state thus the moment the state legally changes the nature of property, that's all there is that can be said. While this might resonate with some, for me it's analogous to magic; saying these magic (legal) words redefines reality.

It would be more accurate to say that private property is mainly a social construct, not simply a legal one. People acknowledge that I and I alone own X. The law reinforces that sentiment and provides a structure for the few people who defy my property to be punished. In developing countries, people lay claim to things even though their ownership is not recognized by the state. Yet in the daily, practical sense of the word they own the item, be it a business, home or spoon.

Private property is also a philosophical construct in the sense that everyone owns their own body (this gets a little strange with children but let's stick to adults for now). If the state said all people of a certain religion are can be enslaved by others, I'm sure Aaron would recognize this as a violation of private property. A person owns their own body. Building on that philosophy, people also own things they build, assuming it doesn't contradict with existing property. If I own a pile of dirt (or no one owns it) and I turn that dirt into a mud hut, I own the hut even though the "dirt" doesn't exist any more. That claim can be backed by legal wording or not, but most reasonable people would agree I have a valid claim regardless.

There is no doubt that the state influence what is and is not private property but I have a hard time accepting that property is and always whatever the state says it is.

How the West Was Bureaucratized

You'd think after a couple hundred years of the American government pushing around Native Americans, telling them how and where to live their lives, it would finally leave them alone. Not so. A couple of days ago, the US Department of the Interior shot down an agreement between Private Fuel Storage (PFS) and the Skull Valley Goshutes reservation.

The agreement was pretty simple: let PFS dump spend fuel rods (nuclear waste) in an 820-acre corner of your 18,540-acre reservation and this coalition of energy companies will pay the reservation for the right to do so. For the record, there's 125 members of this reservation of which only 30 actually lives there. Sounds like a pretty sweet deal.

But in its infinite wisdom, the Interior stepped in and vetoed the deal, citing health risks and transportation problems. It's pretty clear the health concerns are bogus; the site occupies only 0.04% of the entire reservation. And the Goshutes aren't morons, either (see this link). So let's consider the transportation argument. Salt Lake City currently pays to dump some trash at the reservation, requiring 130 trucks a day along the two-lane State Route 196 (it appears the Department of Transporation is unwilling to expand the road). Because a recently declared state park blocks the path of a railway, the plan would require two additional slow moving trucks a week along that busy stretch of land.

This is a cruel joke played on the Goshutes: a government agency denies them their freedom because of the actions (or inaction) of other government agencies. In the wake of the decision, U.S. Rep. Jim Matheson declared "Utahns stand united against the East Coast dumping its nuclear garbage on the West." But only at the cost of accepting the East's most dangerous waste: bureaucracy.

Property Rights

Reading blogs around the web, I found that a recent Mises.org article touched on zoning laws, and how they amount to theft. I’ll heartily agree with that in principle, but the whole discussion raised a few questions in my mind.

First, who owned the land the towns are built on before they existed, and how did it come to them? Second, covenants are mentioned as private solutions to limit future use of a scarce commodity, and I wonder what some of the potential consequences of this could be.

Towns seem to be mostly created through incorporation in a superior legislative body to facilitate tax collection, provide services, etc. Property owners, in theory, would incorporate in the same manner as a business, choosing to organize themselves and choose a board of trustees.

My first note would be that the process is likely to be democratic, i.e. completely indifferent to property rights in the first place. A simple majority would, I suppose, be able to petition said higher legislative body for recognition and a charter, thus vacuuming in any and all dissenters. Of course, since incorporation usually is a great way to get access to state funds, or OPM (Other People’s Money), there are strong incentives to do so.

Nevertheless, this essentially allows legal authority to be exercised over other people’s territory without consent. Of course, the upper levels of government already HAD that authority, else they couldn’t have granted it; the difference may only have been there was less money funding local controls, and less knowledge as to what to do in the first place (not that that stops the US Federal government from building bridges in Alaska).

The point of all this is just that there are no property rights as recognized outside of the laws of the US Government and its creature states. From the parapets of Federal offices to the leering gargoyles of State governments to the lowest stone of the foundation in the towns and neighborhoods, the authority was already in place. If a law is passed saying that you cannot build a building taller than the Capitol in Washington DC, then you may not, because your ownership of the land your structure will be built on is already bought and sold under the watchful eye and heavy hand of its true owner.

We’re the temporal minor authorities given run of a plot we are registered to, but remember, that can change, as I think some recent Eminent Domain cases have ably shown, and as zoning laws constantly remind us.You only have the rights that you take for yourself – if you rely on someone else to give them to you, you’re dependent on them and on their continued good will.

I was going to write a bit about covenants, but found it interesting rather than agitating. So tune in tomorrow and I’ll ramble on a bit about it.

Pirates of the Coase Theorem

Suppose you buy some land in the Hollywood Hills, knowing its high price is partly justified by the great view the Hills yield (I assume the Hills are below smog level). Imagine now someone else bought some property just downhill from you and plans to build a big shopping mall that will ruin said veiw. What do you do?

If you're Johnny Depp, you sue West Hollywood to stop the construction. Citing environmental quality laws, the Pirates actor is trying to block the Sunset Strip development; the city's best defense is they don't think the actor uses his land enough, as he spends most of his time in France. So what? I can't remember the last I used my Risk board, but that's hardly grounds for anyone to take it from me.

It sounds like the parties could use a hefty dose of the Coase theorem. If you're not familiar with it, all it means in this case is a judge would determine who's right takes presedence (Depp to what he paid for, developers to using their land as they see fit) and then one party could pay the other to forgo their right. There's a lot of really cool implications from the Theorem but all you need to know is whatever the payments are between the parties, the result will be mutually beneficial.

Sadly, it seems to be a lot more fun to sue people than test the theories of Nobel Prize winners. Still, I wonder who has the right to what but my guess is Depp because A) he was there first and B) it's the Hollywood Hills: the view's the main reason why people live there and thus represents a large portion of the price he paid.

Noise Is Golden

I hate loudness. Few things are as intrusive as someone pumping up their stereo to some ungodly level or the sound of screaming kids. But I like freedom, more. If someone wants to run around and do those things in their free time, go for it. Just stay the hell away from me.

What's "loud" is of course a relative term. Just like chemicals, it's the dose that makes the poison. And because it's expensive to establish property rights over the air, we enter into a lot of commons problems. This is why it's not so confusing that Turkey bundled their new environmental laws with banning "noise pollution" with a $150 to $4,500 fine if you break the law.

A lot of these laws seem to stem from reasonable logic. A lot of people like silence. A lot of people like clean water. We get those things from a source no one owns, so a law is made to force everyone to comply. No free riding.

Yet this reasoning carries with it an assumption that we live in a world of black and white, right and wrong. In the real world, what's noise pollution to you is natural to me is too quiet for my Great Aunt Esther. Setting absolute standards for all of society, which is needed for laws due to enforcement reasons, ignores the fact that people are different.

A better solution would be to throw out the law and privatize public places. Those that like it quiet can congregate in Park A, where a local rules set the acceptable decibles very low. Noisy people can go to Park B, where it's fine to be louder. Just as some restaurants have a dress code, some places can have a noise code.

Admittedly there's potentially still spillover, especially if Park A is next door to Park B. But banning "noise pollution" all together suggests those in B are worth less than those in A. Laws tell everyone how to live. At least without the law there's the opportunity to discover a way for both parties to be happy. But I guess some people just can't stand knowing others are having a good time.

Instant Lion

Paradoxically, South African Environmental Affairs and Tourism Minister Marthinus van Schalkwyk will soon be presenting legislation that harms not only the tourism industry, but also the rich animal diversity the country offers.

According to Business Day, the regulation will probably ban "canned hunting," which is just a strange way of saying "breeding animals so people can shoot them later." Sounds like canned hunting is great for the environment. There are clear private property rights established over the animals, prohibiting the tragedy of the commons. Just like sheep, cattle and pigs are unlikely to go extinct, allowing people to raise lions and elephants ensure they never will, either.

The "problem" with the old system was it lacked coherenty. Filled with loopholes and difficult to enforce, they might as well not exist. But like a madman bent on jumping out of a window, the government is now reworking the laws to create "national uniformity." Sameness. Conformity. Solidarity.

It's just tragic.