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The moral ambiguity of default

With the subprime crisis raging, there are many stories of people walking out of their mortgage. It also seems that it is not uncommon among young people to walk out of a mortgage before the first payment thus getting one year of free rent (credit re-building apparently not being an issue at a young age).

In a free and just society, there cannot be compulsory personal bankrupcy law. Maybe debtors buy as an insurance the right to default, maybe they don't and they go to debtor's work camp. In the U.S. the state allows anyone to declare personal bankrupcy.

According to two different analysis of the law I reach two opposite conclusions.

a) Defaulting on a debt is theft, the creditor should be able to sue and settle an agreement where the debtor repay some of all of the debt (through total liquidation of assets, work, etc). This is prevented by the governement, thus creditors charge a higher interest rate, covering default risk as a defence against this agression. The higher rate does not legitimate defaulting, much like the shop raising its prices to account for stolen goods does not justify shoplifting (this is Rothbard's position).

b) The State force creditors to bundle their service with a default insurance. When someone contracts a debt, he his buying the insurance as well through higher interest rates. Defaulting (or walking out of a mortgage) is merely exercising an option that was bought.

This same ambiguity can be applied to many different laws, such as zoning laws. If I bought a house close to a school, is building a peep-show ok because zoning laws are coercive, or is not okay because the State prevented me to buy the right-to-build-a-peep-show from the original owner (who died with no heir thus destroying that right)

So, is walking out of a mortgage a rational arbitrage or a fraudulous theft?


A Response to Samuelson's "Importing Poverty" article

Robert Samuelson wrote an article in the Washington Post titled "Importing Poverty"

Here is my take on it.

I agree that the poverty rate is higher because of immigration. I think Samuelson shows that very well. But while it increases the poverty rate, it doesn't increase poverty. Your not making people poorer your increasing average wealth in the world, and maybe even the average wealth for non immigrants in the US, but your bringing in new poor people to be counted, that wouldn't have been considered before because they where not in the US.

The rate of poverty (esp. if measured in an absolute rather than a relative sense) among non immigrants has declined. Also the rate of poverty among immigrants has declined (a larger percentage of them where poor before they immigrated). So how do we get a slightly large poverty rate? By immigrants, and there direct next generation descendants being a larger percentage of the population. If the group with a larger poverty rate increases as a percentage of the population that poverty rates can go up even if the rate is declining for every group, and if the majority of individuals are doing better. Immigration isn't on the net making people poor, or keeping them in poverty (in fact it helps raise many of the immigrants from poverty, or at least to raise them to a higher level that we might still consider poor), but its brining in new poor people. Its not totally unreasonable to assert that there is something negative about brining in new poor people, OTOH its likely not to be a random selection of the poor but rather be shifted towards people with higher than average initiative (if your lazier than average you probably won't emigrate, unless perhaps you'll starve if you don't or someone sets up some cushy setup for you after you immigrate, but that doesn't apply to most immigrants. The main counter argument to that point is that people could immigrate for government benefits. That's why I'm much more partial to arguments about not making illegal immigrants eligible for welfare than I am to thoughts about trying to stop illegal immigration (which I don't think can be done) or mass deportation.

Another possible negative is that emigration from Mexico reduces the incentive for government reform, and reduction in the level of socialism in Mexico (both by removing the discontented people, and by the remittances which go back to Mexico and might make some people who stay more content), and also might represent a drain of more intelligent or motivated individuals from Mexico, and thus will help keep Mexico poor.

 


Huge Breakthrough

CNN Headline: "Men want hot women, study confirms"


Why Leftists Can’t Understand Libertarians

Originally I posted this as a comment to Constant’s question about reasons that lefty bloggers give for rejecting libertarianism. Below I will argue that what they are really supporting is also a rejection of liberty for those who don’t share their vision

They think they all libertarians worship Ayn Rand

They think libertarians are against environmentalism.

They think libertarians are selfish and don’t support the greater good.

They don’t understand how markets via diffusion of power protect individuals and increase the greater good.

They don’t know the historical lessons and the present ill effects of collectivism.

They think the reason government fouls up all the time is because the wrong political party is in power.

They think a far left government would not be beholden to special interest groups. Smart people with effective plans would take over and justice would prevail.

Some libertarians come across as whacky, whimsically junking all previous non- market constructs in favor of strict anarchy.

Some lefties see libertarians as cold heartless persons who are nerds. They are Nerds who see persons only as mathematical entities living their lives in game theory. Leftists on the other hand are warm puppy loving altruists.

Everyone thinks he knows what ideal liberty is but there are several mutually contradictory definitions. The following is an abbreviated discussion of various ways of thinking about liberty. A lot of these ideas are presented in much greater detail in a book I was reading Global Bioethics, especially the chapter by Mark Cherry

The dismissive tone toward those who question the leftist party line has always irritated me. How come they all believe the same things in such detail? This book makes it clear that by dogmatically pushing their one vision of liberty, they are tacitly in favor of taking away massive amounts of it from everyone else. This book, a series of philosophical essays on bioethics, subtly opens the whole ugly can of worms.

It turns out libertarians are the real champions of libertarians liberty which is not really available without robust free market activity of a type that is an anathema to the left.

Today’s cosmopolitan internationalist leftists define liberty as the ability to realize ones potentials. Since persons may differ in their fortunes through no fault of their own, there is an ethical duty that we should just feel, which tells us to make right this inequality. Thus people who are sighted are obligated to make blind people live lives equal to theirs even if it diminishes their own lives. If someone is not able to or does want to do productive work, all are obligated to care for these persons so that they flourish equally to others. Coercion is legitimate in order to bring into line anyone who does not agree with this imperative. This extends worldwide and is not satisfied until it is all equally realized. In other words leftists define liberty as fair equality of outcome for each individual without regard to luck, innate ability, effort or societal position.

Another way liberty can be defined is a correct ideal. In other words lives are lived as determined by ethical standards that are discoverable and are based on natural law which may be imposed from the top down by national law or international treaty. Life is not lived according to individual choices but as determined by rightly reasoned moral principles. These might include such things as justice, proper conduct, human dignity, autonomy. If you propose that there is a God the principles would be commanded by God but if you are atheistic they would just have to be what the anointed wise persons (see Thomas Sowell’s “Vision of the Anointed”) felt in their heart. Once this was determined, anyone who disagreed would have to defend their deviancy against the majority opinion. It would be rule by the philosopher kings. I think we tried this in the middle ages. It was called Scholasticism, Fascism or something.

A third idea about liberty is that life is to be lived is to be lived in a way as to maximize humanity as a whole; the greatest good for the greatest number. Here the individual is of no account but the community is everything all must conform to what is decided is best to accomplish this. One way of accomplishing this is the Confucian ideal. It is hierarchical, family oriented and paternalistic. Instead of relegating the family and its elders to the dust bin as the potential breeding ground for socially incorrect, behavior and attitudes, it is the basis an orderly society which transcends the individual. Obviously there is a conflict between this way of looking at things and the first two. Who is to dictate the way worldwide society will evolve?

Fourth is libertarianism as freedom from interference. Here individuals are free to do as they want as long as they do not interfere with others, but are able to venture with others in markets. If they fail, they have to find their own way out. This way is truly multicultural and systematically excludes no one as it operates mostly by voluntary exchange, contracts and limited democracy in which government acts as a referee but is not Santa Clause, God or dictator. This is thin libertarianism but since we are talking about forms of government the thinner the better.

 


Prenatal child abduction

The logical next step.

A pregnant woman has been told that her baby will be taken from her at birth because she is deemed capable of "emotional abuse", even though psychiatrists treating her say there is no evidence to suggest that she will harm her child in any way.

And the mother will be silenced by law.

From then on, anyone discussing the case, including Miss Lyon, will be deemed to be in contempt of the court.

While this is presumably a first, and hopefully a last, there's a larger trend.

The case adds to growing concern, highlighted in a series of articles in The Sunday Telegraph, over a huge rise in the number of babies under a year old being taken from parents. The figure was 2,000 last year, three times the number 10 years ago.

This is happening in the UK, which is ahead of us in so many ways.

via Instapundit (which means, yeah, you probably already saw it)

 


Denigrating libertarianism

People try to figure out, and in large part explain away, libertarianism, at Slashdot and Reddit.


Proof That Not All Anti-Immigration Arguments Are Racist

I often object to the kinds of arguments that demonize others in order to both gain the emotional high ground and to ostracize the opponents on the other side of an issue. I don’t find such arguments conducive to honest and open intellectual debate. These meta-arguments are not made about the issue itself but are made about the motivations of those holding the counter position.

Usually the makers of such meta-arguments try to derive the falsity of their opponent’s position on the base issue based merely upon motivation. This is a fallacy. One cannot tell if an argument is true or false merely upon the motivation of those who hold it. Nor can you derive in the other direction from someone’s position on an issue to their motivation.

This non-derivability of motivation is especially true because humans are fallible. It is entirely possible and in fact likely that someone holds to a belief in error, especially if it is an issue in dispute. Thus the very fact that there is a dispute magnifies the likelihood of error, and lowers the probability of discovering the underlying motivations.

In the below proof the strongest part of the proof might seem to be Argument I. However Argument II, which rests on the fallacious belief that the moon is made of green cheese, is actually the stronger point in showing that one cannot deduce someone’s motivation from their position on an issue. It’s quite possible they just made a mistake.

Painting the other as evil for a simple mistake does not help them to understand their error and would tend to cement them in their position. They know firsthand that they do not have evil motivations, so any assumption based on that will only tend to alienate them from the counter position.

I know that I am not a racist. I am against a totally open immigration policy for any country, not just my own. I have little patience for fallacious arguments painting me as a racist because of my position. Perhaps I hold my position in error but no one has shown me an error to my satisfaction.

In fact, anyone who makes such an argument is obviously evil and wants to usurp power for themselves to create a one world government. :)

Proof

I will show that not all anti-immigration arguments are based on racism. In order to do so I need to provide only a single (valid or invalid) non-race based argument as a counterexample. I will provide both kinds.

I: Valid Anti-Immigration Argument

Assuming:

1) If there is any valid reasons to control and monitor immigration then we are justified in having immigration controls.

2) If we are justified in having immigration controls then we are justified in having laws to implement those controls.

3) If an immigrant violates those just immigration laws he has shown a propensity to criminal behavior.

4) It is just to restrict outlaws and scofflaws from immigrating into our country.

5) Given any one of the following there exists a valid non-racist reason to control immigration.

a) It is just to control and monitor immigration in order to prevent the spread of disease.

b) It is just to control and monitor immigration in order to prevent the free roaming of outlaws and scofflaws who continue to disobey just laws that do not pertain to immigration.

c) It is just to control and monitor immigration in order to properly socialize new immigrants to the laws and customs of the host country.

Deducing: 

6) It follows from 1) and any of 5a), 5b) or 5c) that it is just to control and monitor immigration.

7) It follows from 2) and 6) that it is just to create immigration law.

8) It follows from 3) and 7) that illegal immigrants are true criminals.

9) It follows from 4) and 8) that illegal immigrants are justly prevented from immigrating into the country, and can be justly prevented from immigrating solely on the basis of their prior violation of immigration law.

The above argument is not circular because illegal immigrants are not assumed to be criminals as one of the givens.

The above argument is not racist because none of the givens in 5) are based on racism.

II: Invalid Anti-Immigration Argument

1) The moon is made of green cheese.

2) All non-citizens and new immigrants regardless of race eat moon cheese but only when they are in the U.S.

3) Eating moon cheese will destabilize the moons orbit and destroy the earth.

4) We should outlaw the destruction of the earth.

Given 1) – 4) we should outlaw immigration to this country by non-citizens.

The above argument is not racist because it is based on utter nonsense. Anyone who holds to such an argument does so out of error and not racism.

III: Conclusion

Either Argument I or Argument II is sufficient to provide a counterexample to the statement, “All anti-immigration arguments are based on racism”, therefore that statement is false. Q.E.D.

Update:

In I.4) I changed "people with criminal tendencies" to "outlaws and scofflaws" and in I.5.b) "criminals who have disobeyed just laws" to "outlaws and scofflaws who continue to disobey just laws".   I added the label "Deducing" to head the portion of the argument with the deductions.


Schneier warns against private security

I thought Schneier was supposed to have some special insight on the subject of security. Now I'm not so sure.


Greenpeace stunt backfires

Consumer advocates manage to benefit some consumers.

Bangkok.

Recently, it was reported that the Agriculture and Cooperatives Ministry was going to seek cabinet approval for a lifting of the ban on open-field trials of transgenic crops. Greenpeace was not amused and reacted by dumping tons of papayas at the entrance to the ministry.

[...]

[A]fter the dumping, people flocked to load up on the free papayas, ignoring the environmental organisation's campaign against the dangers of GM fruit

[...]

"I'm not scared of GM papayas. Rather, I'm scared I won't have any to eat," said Ubon Ratchathani villager Ampon Tantima, 31, before rushing back to his car with the free fruit.

(original Bangkok Post article offline, but it was indexed by Google News so it's real)

I'm not sure the papayas were really GM (seems very possible they were regular papayas and the reporter or the blogger jumped to conclusions). However, Tantima's statement renders that question moot.


teaching the extended order

Somewhat inspired by Arthur Foulkes, and mulling taking a couple of years to teach high school in the future, I thougt of an interesting way to open the first day of a high school economics class. 

Instead of telling the students that they have their desks because the military protects them, I'd start by telling them they can't use any of their school supplies until someone or some group gives the class a presentation of how that object was made. They wouldn't have to do it for pencils, of course; after passing out Leonard Read, I'd spot them permission to use computers and a phone for research outside of class, and paper to take notes with in class. 

Then they'd have to give somewhat detailed stories, for credit, of how any particular product was made, else they couldn't use it in class. I'd tell them on the first day about chalk and the class chalkboard. They'd have to learn about desks to sit on, both the plastic and the metal bars. Folders. Backpacks. Chairs. One on a particular article of clothing, though probably making them leave their clothes at the door would be controversial. 

Would this impress upon them how dependent we are upon the extended order of which we know virtually nothing? Any other ideas for doing so?

 

 


So many levels of irony


self-directed learning bias?

I’m skeptical about claims, which I hear often by classical liberals, that kids generally love to learn innately. Personal experience gives everyone some expertise on education. But if that’s all we’re posting from, I think the sample from which the classical liberal blogosphere is drawn makes such claims overrepresented. Call this an argument from skeptical elitism.

Bloggers at places like Catallarchy are people who spend their spare time discussing political theory. Thus, they are more likely to be intelligent people. This is especially true if smart people are more likely to be libertarians.

Intelligent people are intelligent because they learn better than others.

Some people are better learners than others. (Josh Waitzkin, the chess and martial-arts champ, attributes his success to knowing how to learn.) Similarly, some people are better at self-learning than others. Ceteris isn’t paribus, but I’d argue that people who are better self-learners are still more likely to be better learners overall.

Thus, people who are more self-directed, who dislike more the strictures of school, are more likely to frequent classical liberal fora and to write...criticisms of school. Don’t get me wrong, I think dumbing-down public schools makes them well worthy of criticism. But we need to build on thicker reeds than just our own experience as students, if our experience isn’t representative. 


No rights for animals

Rights are the exception in nature, not the rule. Species consume other species. Territoriality approaches rights, because territoriality shares elements (though far from all) with property rights, and rights generally can for the most part be expressed in terms of property rights. But just because some birds and mammals are territorial in some sense, that does not give me a reason to enter into any territoriality arrangements with them. Birds respect territory because they have a good reason to, not for any other reason. Similarly, I have a conscience presumably because it's in my long term interest to. But it is not, except perhaps accidentally or in contrived situations, in the interest of humans, individually or in groups, to habitually respect the rights of animals.

I think where rights differ sharply from territoriality is in the human practice of teaming up against violators. Territoriality is, or at least is stereotyped to be, one on one. But what gives human law bite is not that an individual will defend himself (all animals defend themselves), but that where there is a conflict, humans all around will decide who's right and side with the one in the right. This happens all the time though nowadays it's largely taken over by the state and its police, who jealously guard their privilege to identify and team up against malefactors. Vigilantes not welcome wherever a state holds sway. But it's essentially the same as in anarchy: where there is a conflict, the good guy (if there is one) and bad guy are identified and essentially all of society goes after the bad guy (be it directly through vigilantism or mediated by a government with its police force).

Animals can't do this, or at least, their ability to do this is strictly limited. If you murder a human and are seen doing it, then your description can be spread far and wide and you will not be entirely safe in human society anywhere. But go up to a dog, even in plain view of other dogs, and kill it, and you are safe, in large part because dogs have no ability to spread information about your actions. If dogs had that ability, then things might be different. But they don't. And same with cats, horses, birds, snakes, whatever. You can predate on non-human animals openly without fear of "animal society" turning on you. You can't do that with humans.

We are fundamentally all predators. Predation is how we survive. It is also how we provide luxuries for ourselves (e.g., leather and fur, and even just wood if you include predation on plants). Since it is what we are it is nothing to be ashamed of. If we are to avoid predating on other animals - including other humans - it had better be for a damn good reason, one that is damn good when considered from the point of view of self interest. I think the case against predating upon other humans is an excellent one, and not at all altruistic. But the case against predating upon animals is much weaker. Those who advocate it simply fail to provide compelling reasons other than quasi-religious ideas. Essentially the animal-rights crowd seem mainly to base their ideas on a simple and direct analogy between humans and animals. Humans have rights. Animals are a lot like humans (this is undeniable). Therefore (they seem to conclude) animals have rights. It is evil to kill and dissect innocent humans. Therefore, they seem to reason, it is evil to kill and dissect rats, monkeys, cats, and so on.

It's not all that weak an appeal to intuition, because analogy is a common and useful tool when reasoning about rights. However, I argue that it is incorrect for the reasons that I have outlined above.

(this was a comment which I've promoted to a blog entry)

 


Political trends among the tech crowd

Slashdot currently has a poll on political affiliation. Most people are either liberal or libertarian. Anarchists (which in the current context probably implies leftist) communists and socialists outnumber conservatives and moderates.

There's a somewhat famous article from 1992 I came across in the past highlithing a few reasons why programmers can make good consequentialist libertarians, it's very worth reading.

This coin has two sides though. I think the left part (except the anarchists whom I suspect to be merely being anti-conformist) are mostly people who believe in central planning, it may be the dark side of a computer science mentality, people can be organized as data and with the right "program" society can be organized. They are the typical positive constructivists described by Hayek in "The counter revolution of science".

Some interesting posts in the discussion following the poll, healthcare seems to be a huge issue.


The "Are You Qualifed to Vote?" test - Civics questions

Those who choose our representatives in government should understand something about government. A knowledge of civics is essential to being an informed voter.

1. The nature of our legislature, with one house apportioned by population, and the other house apportioned by state, is a result of a compromise at our constitutional convention between:

  • a. Loyalists and Patriots
  • b. Democrats and Republicans
  • c. Tories and Whigs
  • d. Large and Small states
  • e. Slave states and Free state

2. If there is a tie vote in the Senate a tie breaker vote is cast by:

  • a. the Vice President
  • b. the President Pro Temp
  • c. the Speaker of the House
  • d. the Senate Majority Leader
  • e. the Secretary of State

3. The largest expenditure in the current federal budget is for:·

  • a. Foreign Aid·
  • b. Military Spending·
  • c. Social Security·
  • d. Welfare·
  • e. Education

4. In terms of the total federal taxes paid which of the following is true:·

  • a. The bottom 50% of earners pay the same as the top 10%·
  • b. The bottom 50% pay slightly less than the top 10%·
  • c.  The bottom 50% pay slightly more than the top 10%·
  • d. The bottom 50% pay much more than the top 10%·
  • e. The bottom 50% pay much less than the top 10%

5. Which amendment extends the constitutions restrictions on the federal government to the states?·

  • a. the Second·
  • b. the 14th·
  • c. the 25th·
  • d. the First·
  • e. the Fifth.

I think these questions are fair and clearly worded. What do you think?