A Chip Off Old Big Brother's Block

by Liberty and Power

Late last month the California Senate and Assembly sent Gov. Arnold Schwarzenegger a bill to prohibit employers from requiring workers to have RFID (radio-frequency identification) chips implanted under their skin. North Dakota and Wisconsin already have passed similar laws. Two other states are considering bans. VeriChip (motto, appropriately:"RFID for People") already has FDA permission to sell a device suitable for human implantation. Some people find this form of ID attractive because it can't be lost or, presumably, counterfeited easily. (We'll see about that.) But others, especially organizations dedicated to protecting privacy, object to treating other people like pets. What should an advocate of liberty think of all this?

The rest of last week's TGIF,"A Chip Off Old Big Brother's Block," is at the Foundation for Economic Education website.

Cross-posted at Free Association.

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Gus diZerega - 10/1/2007

There is a certain kind of ideologue, these days usually on the right, who continually changes the topic rather than engaging in a serious discussion over anything at all. Nothing Stepp said earlier raised the tax issue or the efficiency issue. Now, when I asked him to actually say something substantive about his earlier statements, (tell me Rothbard's position) he changes the subject.

This style of argument is certainly easier than thinking - but its rather a waste of time for everyone else.

As to taxes, I listed several easily accessible sources. Mine was only a url away. Had he taken even a little time he would have seen that taxes are only a part of why they are employed - and obviously for national forests an IRRELEVANT part of it.

I will be out of town for several days and this will have slipped below the fold by when I get back. But had I answered the tax issue in depth I am sure Stepp would simply change the subject again. It seems to be his style.

Now, off to the Sierras!

William J. Stepp - 10/1/2007

Libertarians are all in favor of removing lands from government control. Land trusts are not the most efficient way to do this though, as they are to some extent (if not entirely--obviously the ones before the income tax were not) a child of the tax code. Libertarians want to abolish that, but you (and "progressives") are no where to be found in that movement.
Meanwhile you contradict yourself by being in favor of civil society, but carrying on your generally uncivil blather at L&P, this time accusing me of ignorance.
At least you didn't accuse me of anti-Semitism.

Gus diZerega - 9/30/2007

Please describe Rothbard's position - then we can discuss it.

I'm glad and surprised you know so much more about the idea of democratic land trusts as alternatives to national forests (and potentially other federal land) than those of us who originated, elaborated, and have sought to spread the idea. We can use your help.

Karl Hess, jr. wrote a book that ended in discussing the idea (minus its democratic dimension). It's "Rocky Times in Rocky Mountain National Park." See the book's end.

Randal O'Toole and I have spoken at conferences (never libertarian or classical liberal ones in my experience), published papers and chapters (ditto), and the idea has generated no significant interest among those groups despite it's having plenty of successful predecessors, and the enormous publicity of removing some 50% and more of the land in many states from government control.

As for the concept's discovery by progressives who are giving it more interest than the libertarian and classical liberal right wingers ever did, check my review of Peter Barnes' Capitalism 3.0.

http://www.dizerega.com/?p=66#more-66

Since you are so sure I am wrong - why don't you prove it rather than assert it, by arranging a conference or some other forum where the idea can get a decent hearing from libertarian or classical liberal sources?

See if you can find anyone interested in funding a conference or book on the subject. If you are too busy, I'll be happy to do the work organizing it once you find funders. But given what organizers can be paid, you might find it worth your while.

Based on my experience, right wing think tanks will be of small to zero assistance. I will be delighted to admit you were right and I wss wrong.

Till then, I have to suspect you don't know what you are talking about.

Gus

William J. Stepp - 9/29/2007

Regarding the influence of unjust acts on property rights, I would refer you to Rothbard's essay "Justice and Property Rights,"
reprinted in his book, _The Logic of Action One_.

I assume the trust model for government-controlled lands is a non-starter, not because it wouldn't work, because the government won't cooperate with the trustees.

In fact there is a growing land trust movement in the U.S., as a search on the internet shows.
My understanding is that the largest land owner in the U.S., Ted Turner,
is an advocate of land trusts and has set up a few of them.

Land trusts usually acquire lands through donations, much of which is given by capitalists such as Mr. Turner, who made their money on the market.
So the idea that the market is somehow divorced from land trusts (or other voluntary groups that are part of civil society) is incorrect. It's all part of an economic ecosystem and you can't take economics or the market out of it without destroying the whole of civil society.

Your claim that classical liberals have no interest in voluntary approaches that don't lead to riches is bizarre and certainly false.

William J. Stepp - 9/29/2007

Gus diZerega - 9/28/2007

Sheldon-
I'm more pro government than you - but not very much. The part of government I am most sympathetic to is the part that serves rather like an insurance company.

BUT - and this is a very important BUT - in my experience most libertarians are uninterested in alternatives to the market that are also voluntary to solve problems more complex than Scout bake sales. Civil society, the womb from which the market order emerged, receives little attention despite it doing a great deal the market alone does not do - and with the potential to take over an open ended amount of what is now termed "public services."

To give an example close to my heart...

Karl Hess, jr., Randal O'Toole and I have spent years trying to interest people in the trust model for taking over government controlled lands. No takers. Most would rather sell them to corporations. If I had to choose between that and the status quo, I'd take the status quo, bad as it is, because I care about forests more than abstract slogans. At least there will be forests to mismanage.

Now the same idea of trusts rooted in civil society to handle problems most leftists wnat government to do has been developed from a progressive but not anti-market perspective in Peter Barnes' Capitalism 3.0.

Barnes' rhetoric is different but the practical overlap is dramatic. A creative idea initially pioneered by libertarians and libertarian sympathizers today is receiving more interest on th so-called "anti-capitalist" left.

I think a major reason for classical liberals' bizarre disinterest in voluntary approaches that have successful track records but do not promise to make someone rich is the myth that formal equality amoung contractors solves all ethical dilemmas.

Until this blind assertion is challenged and defeated I think libertarian ideology will never develop its potential.

When it is challenged, I honestly have no idea what will arise - but I have enough confidence in human creativity that when it is attached to clear sighted vision, good things happen more often then bad.

Sheldon Richman - 9/27/2007

Granting your point about nonpolitical power for the sake of argument, resorting to the state is a bad idea for Public Choice, if for no other, reasons. You won't keep it confined to only the "good" things you want it to do. Limited government isn't possible. That's why my article suggested the nonstate "political" measures available to people when caught in disparities of power. Roderick Long and Charles Johnson go into this at greater length in their paper on feminism, which my article links to.

Gus diZerega - 9/26/2007

My point was not really about monetary policy - it was that libertarianism does not yet have a very sensitive theory of power, especially in how power can be abused. Libertarians emphasize the abuses that come from the barrel of a gun - and there are plenty. We'd be in a far better place if these abuses were taken more seriously.

But I initially brought up the chip issue to try and demonstrate through a concrete example that power is more than that. Even abuse of power is more than that. In this case the threat of unemployment is partly politically created - but is that the only reason the prospective employer might have an unfair advantage?

If so libertarianism has nothing at all to say about the real world because we do not have perfect laissez faire. Every piece of property and many laws regarding contract reflect the influence of unjust acts - including every piece of property in the US.

If libertarianism does have something to say beyond "the world needs to be different than it is", it seems to me there are two options. 1) Government can never rightfully interfere with a contract and so the corporations should be allowed to do this if they can get people to agree to it.

or

2) This is an abuse of power. The government can in this case be called in legitimately as a defense agency to prevent it if the people involved cannot reasonably stop it by other means.

If the answer is 1), libertarians seem to argue that only formal abstract conditions utterly removed from concrete circumstances should count. This, of course, is the logic of legislative law but not common law which emphasizes concrete distinctions as well as general principles. That is why the law must be discovered rather than simply applied.

If the answer is 2) the the door is open to discussions of power that take forms other than simply pointing a gun - and things get interesting.

I tried to show in my last response that any conceivable laissez faire society still has to address these issues. It is not a magick spell that wipes away the past.

The corporate state has no redeeming features. That does not mean Rothbardian laissez faire is a guaranteed just solution.

Gus diZerega - 9/26/2007

A brief response to Mark and a longer one to Sheldon.

I read Hutt years ago. I admire and respect him. His Economics of the Colour Bar is wonderful. I have read plenty on the laissez faire arguments against collective bargaining.

I also have applied for a variety of jobs, and am aware of what it is like to work for corrupt hierarchical organizations. So I'll pass on reading more theory. At one time I believed 100% of the argument against minimum wages rather than now, where my views are more ambiguous.

As to Sheldon's question about laissez faire -

The world we live in has always been powerfully influenced by what went before, and what went before was exploitation of the weak by the strong. Somewhere in Human Action Mises writes that the market is so efficient that once established it will rapidly eliminate the effects of past injustices. As I remember (it was about 30 years ago) Mises offers precisely no evidence for his faith.

Hayek admits this issue is a problem, but one that is difficult to undo, especially if the original victims have passed on. His position is a lot more reasonable – but still leaves tough questions unanswered. Let me pick just one.

If business had developed within a reasonably just agricultural society, factories would have had to offer good working conditions to people who had viable alternatives. Something like this apparently happened in New England, and as a result towns like Lowell, MA, were built, towns that in many ways were very good. They needed to be to attract the women workers they needed because these people did not have to come. They had viable options. I remember reading the first paper edited by women, at least in the US, was in Lowell.

Mass immigration changed all that. Sweatshops, women locked in buildings and burned to death because they could not escape when fire broke out, Pinkerton thugs, etc. etc. We had one of the most violent labor histories in the European cultural world.

In both cases the rules were basically laissez faire, but the result of their application was influenced by other factors, like the relative need of people for the jobs being offered. I am uninterested in being reminded that these poor workers were better off than if they had no jobs at all. That is utterly irrelevant to the point I am making, which concerns the issue of power inequalities as influencing the content of contracts.

So would laissez faire bring us a world of Blackwater thugs hired by businesses who use deep pockets to bankrupt normal people who sue them for damages (this already happens) or would it bring us a world of peaceful cooperation to the ultimate benefit of all? I honestly don’t know.

I do know that most advocates of pure laissez faire address the tough questions by ignoring them or denying they are real. This attitude convinces me that their rosy scenarios are too uncertain to offer much guidance for practical questions like what to do about companies demanding that micro chips be inserted into their employees.

Sheldon Richman - 9/26/2007

Gus, are you saying this applies in laissez faire, or only in the corporate state? And how does it relate to monetary policy, which I thought was original point?

Mark Brady - 9/25/2007

I recommend you read W. H. Hutt's excellent The Theory of Collective Bargaining (1930; 1954; rev. ed. 1975, 1980, 1998), where he provides "a history, analysis, and criticism of the principal theories which have sought to explain the effects of trade unions and employers’ associations upon the distribution of the product of industry."

Gus diZerega - 9/25/2007

I will focus on the last question – it’s the one that interests me.

I am referring to real wages, yes. If we look at two people coming to a contractual agreement, in most cases, maybe all, there are several overlapping prices where one will pay, if necessary and the other will accept a wage, if necessary. The first wants to pay the least, the second to be paid the most.

Given this, there is NO standard to determine the “fair” wage IF there are significant power differences between the parties. A wide range of possible wages could rise from “contractual agreement.”

I define a power difference as the ability to wait out the other side when both will benefit from an agreement.

This explains a finding that initially puzzled me: that often unemployment does not go up when a minimum wage law is passed. I have read of a number of studies that showed this. Now of course statistics are very tricky to interpret, and I don’t want to get into that area. I don’t think we need to. There is a very simple explanation.

A minimum wage can raise the wage rate without increasing unemployment in a situation where both worker and employer are free to accept or reject a wage -so long as there are overlapping agreeable wages and it is not raised too high. In the cases I read about the law raised the floor of possible wages, but not above a rate the employers would accept as worth their hiring the person.

All my explanation assumes is that there is not ONE wage that perfectly balances supply and demand. It is a very arbitrary assumption to assume otherwise.

Hayek, Lachmann, and others have discussed how the market process equilibrates AND disequilibrates. When there is not perfect equilibrium, uncertainty exists and the optimal price needs to be discovered. Given that there is a range of overlapping points of agreement between the parties, the one with the most perceived power from the perspective of the other will always have an advantage.

So power matters – and not just from a gun. (Though government has frequently used its power to weaken workers vis-à-vis employers, as with many applications of enclosure, and much since.)

Almost anyone, “super stars” excepted, who has ever had to apply for a job is aware of a distinct power differential in favor of the employer between the two contracting parties. The higher the rate of unemplpoyment the more this is true. There is no logical reason why the difference cannot be in the prospective employee’s favor – and sometimes it is – but as a rule and for pretty obvious reasons, it is not.

If this argument is true, then the libertarian focus on power only as it manifests through physical force or the threat to use force is very important, but inadequate in understanding the conditions for a good society.

Mark Brady - 9/25/2007

"Most of the time US monetary policy deliberately prefers a level of unemployment high enough to combat "inflation."

You're assuming that the monetary authorities face a choice between unemployment and price inflation. They don't except in the short run. Beyond the short run, a lower than natural rate of unemployment implies an accelerating rate of price inflation. See the work of Edmund Phelps and Milton Friedman.

"It also helps keep wages lower than they otherwise would be."

Are you referring to real wages? What is your explanation of how this might be?

Sheldon Richman - 9/25/2007

Gus, I never said the power was equal. All I said is that there are things workers can do short of quitting.

Gus diZerega - 9/25/2007

Here it seems to me is one of the weak points in the standard libertarian concept of power. So long as certain formal conditions are met, power is for all intent and purposes equal.

There is a large gap between having no choice at all and when two people agree, both coming from a place where their choices are seen as leading to great goods rather than minimizing great harm.

In the example at hand the matter is even worse - the inequalities of power are at least in part the result of exercises of political power that disadvantage one party to any contractual arrangement. The other side benefits proportionately because as any one known, the terms of contracts are powerfully uninfluenced by the options available to the contracting parties.

It seems perverse to oppose outlawing a situation which is intrinsically problematic and which is also in part the outcome of politically generated privileges to the other side.

Sheldon Richman - 9/24/2007

I made the statement in showing that workers have more than the take-it-or-leave-it spectrum of options available when it comes to working conditions. There may be a pool of unemployed created by monetary policy, but that doesn't mean employers can readily replace everyone in the shop on short notice. Labor is not entirely fungible. There are transaction, training, and other costs associated with such a move, as well also possible public-relations costs. If that's the case, workers faced with an unpleasant condition, such as RFID implantation, have more leverage at their disposal than the threat to quit.

Gus diZerega - 9/24/2007

Sheldon- Most of the time US monetary policy deliberately prefers a level of unemployment high enough to combat "inflation." It also helps keep wages lower than they otherwise would be. In addition, deliberate cultivation of an "acceptable" level of unemployment undermines your argument that employers need workers as much as workers need employment.

Abstractly the two categories are equal. At the level of lived life they are not - this is one instance of the inadequacy of libertarian theories of power. They are fine as far as they go - but they don't go very far.