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Friday, November 19, 2010

The Many Impositions of the State

“I’m as mad as hell, and I’m not going to take this anymore!”

[See update below.]

Not that I’m keeping score, but just in the last few weeks the news has overflowed with examples of how much we are at the mercy of government edict. The three stories I’m thinking of, quite unrelated on the surface, are: the spreading but so far futile protests against airport body scans and frisking verging on sexual assault, the Federal Reserve’s announced second “quantitative easing” (QE2), and the FDA’s order that makers of caffeinated alcoholic beverages remove the caffeine or take their products off the market. The upshot is that the government arbitrarily subjects us to humiliating and possibly dangerous inspections without probable cause, robs us of our purchasing power, and prohibits us from buying drinks even when the ingredients are legal – just by issuing a command. Our power to protect ourselves against these invasions of freedom and privacy is severely limited if it can be said to exist at all.

Body Scans and Frisks

It is encouraging to see the spreading protests, and maybe they will force a reversal of the policy, but what’s at issue here is the bureaucracy’s power to subject us to this degrading treatment in the first place. Government officials dismiss our concerns cavalierly. Do what you’re told and stop complaining. But if we accept this passively, what’s next? In Saudi Arabia a man was found to have hidden explosives in a certain body cavity. (You know the one I mean.) Are we now to be subject to body-cavity checks? It’s distressing that one person’s action anywhere in the world can prompt the U.S. government to think of a new way to humiliate, violate, or at least inconvenience us. Maybe we should all be mandated to have colonoscopies at the airport. (They’re free under Obamacare.) Not only would we fly safer but the colon cancer rate would plummet. A twofer!

But seriously… Defenders of the government’s policy insist these measures are required for our own safety. We know what Franklin said about trading liberty for security. Jefferson put it this way: “I would rather be exposed to the inconveniences attending too much liberty than those attending too small a degree of it.”

There are strong reasons to think that what such measures get us is not security but what’s called security theater. For one thing, each one looks backward to the last incident, while those who would do harm look forward. Bureaucracies are clumsy that way. No one can even say the full-body scanners (being sold to the government by former government officials) would have caught last year’s would-be underwear bomber. This Israeli security expert says they’re a waste of money. (Human beings didn’t catch the underwear bomber even when his father warned U.S. authorities.) By the way, why is the attention only on airports? If it’s such a good idea, why aren’t we being irradiated or groped at train and subway stations, shopping malls, and stadiums?

Although the odds of being harmed by a terrorist act are very small, it’s not as though we can do nothing to protect ourselves except to submit to the cold hand of the bureaucracy. The first thing we can do is turn security over to the airlines. We need competition and entrepreneurial discovery (tempered by consideration of the customer), not bureaucratic conceit, working to keep us as safe as can reasonably be expected. Let’s remember, however, that 100 percent safety is a chimera. In a big open country there will always be some risk of danger. The moment we set absolute safety as our objective, we embark on a road we will soon come to detest. Security technologist Bruce Schneier brings a badly needed level-headedness to this subject when he writes,

Despite fearful rhetoric to the contrary, terrorism is not a transcendent threat. A terrorist attack cannot possibly destroy a country’s way of life; it’s only our reaction to that attack that can do that kind of damage. The more we undermine our own laws, the more we convert our buildings into fortresses, the more we reduce the freedoms and liberties at the foundation of our societies, the more we’re doing the terrorists’ job for them.

Finally, we might start asking why people want to blow up American planes in the first place. No one has studied “suicide terrorism” more closely than Robert Pape, founder of the Chicago Project on Security and Terrorism, so he deserves a hearing. Interviewed in The American Conservative, he said:

The central fact is that overwhelmingly suicide-terrorist attacks are not driven by religion as much as they are by a clear strategic objective: to compel modern democracies to withdraw military forces from the territory that the terrorists view as their homeland…. Since suicide terrorism is mainly a response to foreign occupation and not Islamic fundamentalism, the use of heavy military force to transform Muslim societies over there, if you would, is only likely to increase the number of suicide terrorists coming at us.

This suggests that the best long-run protection against such violence is the pacific noninterventionist foreign policy Washington and Jefferson prescribed. It also is consistent with limiting government power generally.


The Fed plans to create 600 billion dollars out of thin air in order to buy the government’s long-term debt. That inflation will be an implicit tax on our cash holdings — by decree. We victims have no recourse. The stated objective is to drive long-term interest rates down, stimulate investment, and create jobs, but this won’t be the outcome Conjuring up money creates no real resources, only new demand for existing resources and thus rising prices. Interest rates will rise, not fall, when people realize that the purchasing power of the dollar will be declining. Who wants to be repaid a loan in watered-down currency without being compensated through a higher interest rate?

As for reducing unemployment, any jobs created will be unsustainable once the inflation-induced investment errors are revealed. As Hayek wrote, “Such attempts to cure unemployment by further does of inflation will probably be temporarily successful and may even succeed several times if the inflationary pressure is massive enough. But this will merely postpone the problem and in the meantime aggravate the inherent instability of our situation.” Hayek was supposing an unanticipated inflation, but since our pending inflation is hardly unanticipated, it is difficult to see how even a temporary burst of activity can be expected.

We have stubborn, high unemployment thanks to past government-induced malinvestment, current government intervention preventing proper reappraisal of assets, and uncertainty over how the government will interfere in the market next. The Fed’s plan won’t work because it’s not what’s needed. What’s needed? The freed market.

[UPDATE: On November 19 Fed Chairman Bernanke told a conference in Europe, “Incidentally, in my view, the use of the term ‘quantitative easing’ to refer to the Federal Reserve’s policies is inappropriate. Quantitative easing typically refers to policies that seek to have effects by changing the quantity of bank reserves, a channel which seems relatively weak, at least in the U.S. context. In contrast, securities purchases work by affecting the yields on the acquired securities and, via substitution effects in investors’ portfolios, on a wider range of assets.” Tampering with interest rates will distort the structure of production, but if the policy does not expand the money supply — if, for example, the Fed buys Treasury securities from banks but offsets this by selling other, private-sector holdings — the classic effects of inflation are not to be expected.]

Caffeinated Alcoholic Beverages

Is there much to say about this other than it’s none of the FDA’s business what we drink? Caffeine is legal. Alcohol is legal. Why wouldn’t caffeinated alcoholic beverages be legal? What’s next? A ban on Irish coffee and rum and Cokes?

When is enough enough? When do we say, “I’m as mad as hell, and I’m not going to take this anymore”?

  • Sheldon Richman is the former editor of The Freeman and a contributor to The Concise Encyclopedia of Economics. He is the author of Separating School and State: How to Liberate America's Families and thousands of articles.