Bastiat On The Bay

Where are the libertarians among the high and mighty, the Francisco d'Anconias of the world?

Warren Buffet opposes lower taxes on dividends and supports collectivist politicians. George Soros espouses all kinds of statist nonsense. Alan Greenspan, until retirement touted as the most powerful libertarian in government, now seems to think that insufficient regulation was responsible for the current Great Recession. Hasn't anyone who matters noticed that the industries suffering spectacular collapses because of bad risk management are two of the most heavily regulated industries in the country -- banking and insurance? Think that's a coincidence?

Today the rich and powerful take communism with their caviar and liberalism (the modern, debased kind) with their limousines. This is depressing. Shouldn't productive, successful people be natural libertarians, or at least small-government Republicans?

I recently witnessed some encouraging evidence that many of them are. These natural lovers of freedom, personal responsibility, deregulation, and low taxes were to be seen at a regular, though informal and slightly drunken, meeting of a book club in, of all places, San Francisco. All but one of them were strangers to me, and meeting them was a bit of an adventure. By the way, if they aren't already public figures, I expect some of them will be, and since I was dropping in on their private get-together, I will use their initials rather than their names.

We were to rendezvous at the downtown residence of one of the clubmen. Most of us arrived at the lobby of the St. Regis at about the same time. The doorman recognized the regulars and eased our way across the marble floor. I jumped into the elevator with this clutch of likely looking young men, wondering when I would start to feel as if I were wallowing in pretentious middlebrow mud. The first thing I learned was that I am older, déclassé, and unfashionable -- in fact, ignorant of fashion.

I learned this by looking down at our feet. Half of the guys were wearing outlandishly long, pointed shoes. Some of them were wingtips and some of them were loafers, but the style, I must assume, was de rigueur. I almost laughed out loud, because, well, to this provincial bumpkin they looked like dressed-up, filed-down clown shoes. But the laugh was on me: fashion is mostly arbitrary, and I was out of it. Everyone except C., the ostentatious original in the group who arrived late in retro sneakers, had a very expensive-looking way of dressing down. When I dress down, which is always, I'm a half step from Goodwill. It isn't reverse snobbery; it's a sad symptom of being lazy and cheap.

To prep for the meeting of the book club, they had to choose a book. This they did by a lively exchange of email that went on for a week or so before the appointed meeting date. I got into the discussion halfway through. They thought about reading Orwell's "1984" but didn't want to break their no-fiction rule. Someone made the following proposal, which seems to have been ironical:

"While I'm sure many of you wanted to read the Communist Manifesto for our next book club, I figured we get enough of that in the typical Obama press conference."

They decided that Stephen Pinker's "The Stuff of Thought" was too much work and not enough fun. But when they finally made their choice, it was a work of the year 1850, Frédéric Bastiat's "La Loi" ["The Law"], a classic proto-libertarian text.

Ever the snob, I read it in the original French; but the guys politely overlooked my Euro-geekery, and from the elevated perspective of the huge suite atop the St. Regis, I was easy enough to overlook. Lush Persian carpets muffled the pointed feet, and additional comfort was provided by a collectible $200.00 magnum of Sea Smoke pinot noir, which had been "lying about collecting dust for a few years." They were venture capitalists, merchant bankers, management consultants, entrepreneurs, and mostly Stanford graduates. Late twenties to mid-thirties. All single. Two engaged to be married and one who should be. I put the participants' average annual income in the small millions, even with me there to drag it down.

They were practical men, not the niggling ideologues who too often exemplify the curious subspecies that we call "libertarians." Still, their words evinced a thirst for freedom that put them way outside the political norm. In the email string, one of them had written this about a conversation with an industry expert:

"With no provocation from me, he digressed from a discussion of the current health-care reform proposals to lamenting what is happening in terms of regulation, taxation, inability to accumulate wealth during his prime earning years, etc. He concluded his digression (mostly in jest) by saying he is contemplating moving his family to Switzerland. I thus find a bit of optimism with the new day. Perhaps Atlas will shrug and there is hope…."

J., who wrote that, expressed all of his views with a passion that, I think, spilled over from a large pot of anger (anger that was perhaps not always inspired by the subject at hand, but that's the sort of thing that makes the world go 'round).

As I might have predicted, Bastiat inspired J. to fire off some powerful tirades. C. looked for radical implications, as in "what should we do?" Could we move to a tax haven? Start a new country? Go underground? M. drew scorn by hinting at the merest compromises to principles of liberty. But, as S. softly guided the debate back to Bastiat, I thought that these were men who could make smart compromises in the interest of liberty, especially economic liberty.

It was my own first reading of "La Loi," and I did my homework before attending the meeting. Bastiat, I knew, was the author of the famous "petition on behalf of candlestick makers," a masterpiece of irony that condemns the sun for unfairly competing with candlestick makers and other purveyors of light, and pleads for government assistance and regulation. "La Loi," I found, was an interesting mix of original and unoriginal ideas.

It starts with a natural rights argument that was well known in America long before 1776. "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty, and the pursuit of Happiness." Sound familiar? It's a fair summary of the first few paragraphs of "La Loi," written about 75 years after the Declaration of Independence.

So Bastiat's first proposition about his subject, the nature of law, is radically different from Rousseau's ideas about a "social contract," because it places individual rights above all other considerations. There is no compromise; the law should only protect life, liberty, and the pursuit of happiness. It must never "plunder" or "despoil." (Here I'm translating Bastiat's French word "spoliation," a word he uses often throughout this long essay. The law must never take from one person to give to another. And it must never forbid the individual's protection of himself.

I, my 45 Colt, Sig 380, and S&W 357 magnum appreciate Bastiat's complaint against the laws that have turned self-defense into a crime ("légitime défense en crime"). But there's ample evidence that Bastiat is wrong when he turns from natural rights to a cost-benefit analysis of crime suppression. He supports basic criminal law with the assertion that the collective must see to it that crime doesn't pay. "When does all this plunder [of man against his neighbor] end? Only when it becomes more painful and dangerous than work." ("Quand donc s'arrête la spoliation? Quand elle devient plus onéreuse, plus dangereuse que le travail.") In fact, many people refuse to commit crimes that they could easily get away with, while others go ahead and commit crimes that are very likely to be punished severely. The typical bank robber, for example, can expect infrequent success, small rewards, and harsh punishment. But I guess that Bastiat can't go as far as David Friedman. Bastiat needs criminal law and cops and robbers.

His notion of why crime should not pay resembles Justice Holmes's "bad man" theory of law, also known as the prediction theory of law. Holmes abandoned natural-rights theories on the basis of an idea that bad men didn't give a hoot about natural rights and had to be shown that the law would make being bad a poor gamble. In other words, the law should be a prediction of consequences, and the consequences should discourage bad behavior. This unfortunate theory eventually led to the proudly named Legal Realism movement, which devolved, in time, into such post-modern perversions as Critical Legal Studies or “CLS”. The proponents of CLS, Critters, will "prove" to you that the law is entirely indeterminate. But they won't stop there. Liberated from the notion that law should be based on principles and applied without prejudice, they urge their students and colleagues to remake the world in the interest of an egalitarian goal--an end that can be sought without compunctions about the means. In other words, they would legitimize legal spoliation even when it isn't authorized by specific laws as long as it obtains for someone something that the enlightened Critters thought he deserved.

Bastiat does much better when he is considering the practical benefits of limiting the government. Here, his arguments are charming and true: there will be less strife, less corruption, less of all the civic horrors, if the role of government is minimized, because the spoils to be derived from managing or manipulating the government will be less. The procedures of a severely limited government would not be as interesting, in certain ways, as the freak-show cage fight that government now resembles, and people with less than titanic rectitude would no longer be as likely to be fascinated and corrupted by it.

Related to these thoughts is a sort of conundrum I have noticed: as the role of the state gets bigger and the fruits of political victory get juicier, the quality of politicians and statesmen (a big word for these operators) declines. When our government was a part-time job for farmers and printers, it drew some great men to the task. Now the smartest and most productive people tend to shun government, even though that's increasingly where power is to be found. Bastiat offers no clues to why this is.

As far as I can tell, Bastiat was the first to describe collectivist government as the public tit ("mamelle"), an image that has persisted ever since. He extends the conceit nicely, more nicely than anyone else. He makes sure we don't end by thinking, "Hey, what's wrong with a public tit? Sounds yummy." He reminds us that the Great Mammary does not fill itself with milk--we are at both ends of the tit, and for most productive people, a lot goes into the ducts ("les veines lactifères) but only a little comes out of the nipple. It's an easy lesson, and the fact that most of us haven't learned it can only indicate that more of us should read Bastiat.

Well, the book club read him, and although its deliberations ended in frustration, it was not with the author but with his subject--the mammillary state. The discussants were discouraged by reckless government bailouts and exuberant calls for more regulation of commerce and industry. I, on the other hand, felt encouraged to have met such vigorous and well-placed natural libertarians.

There is something in French called "l'esprit d'escalier," which can be crudely translated as "the wit of the staircase." The phrase evokes an image, and a little story. One imagines an intellectual salon, convened in the luxurious upper-floor apartments of a Parisian hotel particulier. Eventually the party breaks up and the participants start to descend the stairs. Just then, in the stairwell, one of them pauses and discovers, too late, all the clever things he should have said. That is the wit of the staircase. It is my usual unfortunate form of wit, and when the book club, which was the nearest thing to an intellectual salon that I had ever seen, concluded its meeting, I exhibited symptoms.

For I had failed to say what I should have said. I should have reminded these likeable, influential people that they could at least do as Bastiat had done. Their choices weren't restricted to being oppressed or hiding from oppression; they could also take it as their task to advocate liberty, clearly and persistently, to other people. More than 150 years after Bastiat wrote, his words are still inspiring and thought-provoking. I'm confident that the members of a certain elite book club in San Francisco will follow his example. There are worse ways to live your life, C. And J., I can't think of a better way to exorcise your angst.

Boom and Bust

My good friend John Wander and I debated the causes of the current mess among financial institutions. He kicked it off by sending me a link to an editorial that contrasted bubbles past (railroads, internet) with today's credit crunch. You will notice my snotty tone in the correspondence. Maybe that had something to do with the half million dollars I lost in the markets (and by the way, the fact that I outperformed the markets was skinny solace). Anyway, I was grumpy.

Me: He's a ninny in this article. The contrast is very weak. The parallel is very strong. The burstings of the railroad and internet bubbles were associated with excess capacity in railroads and bandwidth. The bursting of the housing bubble is associated with excess capacity in housing. Exactly the same. He tosses off the parallel offhandedly by suggesting that the excess in housing is condos in Florida that "should never have been built". He implies that the current bust is different, worse, more evil, because it did not relate to the creation of useful assets. But a condo in Florida can be quite useful. In their day, you could find a lot of railroads and optical fiber networks that "should never have been built" too. So, in conclusion, stupid. Journalism is in a pitiful state.

He: Do think that housing's not the problem, nor subprime, nor greed? We need to take the inflation out of many markets and I'm not sure how easy that is. If an $8 loan on a $10 house generates $40 in credits through structured products and a $10 or 11 loan on the same house does the same the rising tide will lift all boats until at one point no one's afloat.

Me: The problem is the proliferation of mortgage loans that were undersecured and made to borrowers who could not afford them. Freddy and Fannie made many of these loans and encouraged the making of many more. You can call much of this phenomenon "subprime." Why do you think that happened? I know why. Do you?

Greed is not a "problem" in the financial markets or in any business. Greed is a very common vice. Any system that does not function well in the presence of much greed is perverse. For greed, the cobbler wants to raise his prices. For greed, the banker wants to raise interest rates. Most businesses make exactly as much as they can. Most businesses are not subsidized by Freddie or Fannie. Most businesses do not enjoy federal guaranties of their debtors' debts. By the way, your hypothetical "an $8 loan on a $10 house generates $40 in credits..." never happened, and nothing like it ever happened in the US mortgage market.

He: I don't think it was those loans alone, and I thought a lot of them were written to enable mortgage brokers to get paid up-front origination fees with little concern as to whether they'd be paid, and bankers to insure them with derivative products. I'd be interested to know why you think it happened. I've seen figures suggesting the sub-prime tranche of bank portfolios insufficient to bring them to their knees, though the derivative backwash gamed their asset ratios. Of course greed (a vice) is not a problem but it's a word bandied about by candidates and congressmen, incorrectly attributing the blame, which ensures the solution will be wrong. The way the political decision to encourage home ownership gamed the market. What I meant by the $10 to $40 figure, based on interviewing bankers who dealt in swaps, cdo's, cmo's, cds's is that an initial fixed-rate loan could be swapped with a variable one, packaged before or after into a CMO, that was then protected by a CDS. This enabled banks to maintain 'assets' that weren't assets, all based on a shaky initial instrument, whose failure multiplied its way through the system.

Me: Ultimately the bad assets currently coming home to roost are indeed the mortgage loans. (Credit card debt and car loans, also securitized, may be next; because much consumer debt was supported by cash from second mortgages and refinancings of home loans.) Banks and non-bank mortgage companies typically get origination fees. Nothing wrong with that. But why did they have little concern as to whether they would be paid? -Because they sold the loans to other institutions who had little concern or who could get them guarantied by other institutions who had little concern.

By dollar volume, by far, the biggest buyers and guarantors of bad mortgage loans were Fannie and Freddie. That outlet for risk (that vast moral hazard) quite simply caused the current problems. Full stop. It provided a large, strong incentive to gin-up liquidity for these loans. The liquidity came in part from securitization. In other words, selling securities that were backed by mortgage obligations. Some of these securities were also guarantied by Fannie and Freddie. Some were guarantied by AIG. But importantly, securitization is just a way to raise more cash to make more loans that could then be sold on to Fannie or Freddie or guarantied by Fannie or Freddie.

Meanwhile, there was of course an asset price bubble in real estate. That bubble helped banks and other mortgage lenders make loans that appeared to be sufficiently secured but weren't. It also promoted expansive consumer debt in the form of second mortgages, mortgage-backed credit cards, and mortgage-backed lines of credit.

The unwashed masses were parading around saying things like, "ya gotta unlock the equity in your home." In my neighborhood, these stupid jerks were zipping by me in their new BMWs. Little education and lousy jobs. In fact, a lot of them were manning the phones in boiler rooms dedicated to selling second mortgages to other jerks who couldn't afford their debts or their expenses. Now the Republican president and Democratic congress want me to bail those guys out.

Let 'em shine my goddamned shoes.

The rest of what I said was unprintable, so I'll stop there. My main point is that, despite the apparent complexity of securitization, credit swaps, options, and other derivative securities, the root of the problem is clear--lenders did exactly what the U.S. government and its monstrous public-private chartered bastards (Freddy and Fannie) asked them to do and encouraged them to do and payed them to do. I don't much blame them. I blame both the government and the borrowers who took out unaffordable loans just because they could.

Living In The Age of Porcelain and Skateboarding

"No grown-up hierarchy." "No ambition." "No responsibility." "The new super-prosperity." "Forty-something is the new eight." For a couple of years these words and ideas have been tugging at a loose thread in the fabric of my mind. They are part of a phenomenon that I'm trying to identify.

I and most of my friends don't feel like real adults. In our forties now, we still feel like impostors, children in adult bodies. Indeed, even some of the adult bodies are looking pretty youthful, having avoided hardships and physical labor. Our age is supposed to slow us down. It hasn't happened yet. I'm cycling 200 miles per week, often with state champion bike racers. One of my friends is an amateur bullfighter and a good one. My friend from junior high school, now pushing 50, recently ran the Boston marathon, nearly beating his 25-year-old personal record. But it's our lack of responsibility, not our fitness, that most makes us childlike.

No grown-up hierarchy

Where Los Angeles goes, other cities follow. When I moved to Los Angeles in the mid-80s, I had just spent three years in Boston, a city that I found to be socially regimented. It had college kids and townies and bankers and Brahmins. The hierarchies seemed to have been reliably defined for a long time. It had grown-up industries, like insurance and banking. It was a grown-up town.

Los Angeles was different. I worked downtown in a big law firm. I lived downtown. My law firm had plenty of serious business to work on -- billion-dollar deals. And yet it had nothing at all to do with what many Angelinos think their town is all about: "the industry." You had to go to the west side for that. Many people living on the west side of Los Angeles never went downtown, ever. They didn't even know what happened downtown. From the Hollywood perspective, I didn't really live in L.A. Plenty of other industries had nothing to do with "the industry" -- computer businesses, small manufacturing, the garment district, Korea town. Even on the fringes of the movie industry, many of the participants didn't give a fig for the industry hierarchy.

Think about the hierarchies of earlier generations. When I was a child in age, not just in mind and spirit, a successful adult man was probably a "company man." I never saw any of those in Los Angeles.

In L.A., nobody rules the roost. I like that. There are so many hierarchies running in parallel that there may as well be no hierarchy at all. Los Angeles is a city that heeds the hippie directive: do your own thing! Of course most people end up doing things that the hippies would not have approved of.

No ambition

One of my law firm's clients was a very young business man, a boy really. A few years before I met this fellow, his father was at wit's end. The boy had no ambition and no job. To inspire the boy, his father bought a little bottling plant. I think it was somewhere in or near New York. The boy began to bottle and brand alternatives to popular sugary, sweet, carbonated beverages. His beverages too were sugary, sweet, and carbonated, and they were called, "Original New York Seltzer." Dad, who used to be in the beer business, helped with distribution. The brand took off. After capturing close to five percent of the soda pop market nationwide, father and son sold the business for several tens of millions of dollars. The boy threw a huge party with his pet mountain lion on display along with a busload of breast-enhanced female humans.

But the phenomenon that I'm trying to identify goes well beyond what I saw in Los Angeles in the late eighties. It involves dropping out more convincingly. I believe that a certain meaningful minority of the U.S. population has realized, consciously or not, that work (at least serious, staid, consistent work) is no longer necessary. I myself became one of those people in the most cowardly and backward way: I worked diligently until I had enough to retire early. I still get honors for being a half-assed slacker, because I was never a careerist or company man, and when I thought I had enough to retire, I retired. Without some slacker bones in your body, you would just keep working and spending more or saving more.

Along the way, before retiring, I took baby steps towards this new slacker attitude. After law school, I dramatically and irresponsibly changed jobs two or three times, badly injuring my career. The wounds to my career were real enough. Unlike so many of my classmates, I did not become a partner in a big law firm. I expected the wounds to affect my prosperity too, but they never did. I prospered. In the short run, I prospered more than they. And then I just stopped. I cashed in my chips. I had enough prosperity to try something else.

No Responsibility

My generation takes comfort for granted. We didn't get drafted. We didn't go to war. We didn't have an economic depression. We didn't have civil war. We didn't have a revolution or a plague. Many of us didn't get married or have children. I don't even have a mortgage or a dog. This lack of responsibility combined with prosperity leaves us free to ponder deeper things such as what movie to rent tonight.

Forty-something is the new eight

Here's an idea: given the opportunity to persist in childhood, most folks will do just that. More and more people are living in a perpetual childhood. They don't knuckle down. They goof off. They develop deep hobbies. My and my wife's closest friends are: an under-employed actress, an unemployed former schoolteacher, a bullfighting instructor, and a law professor -- all middle-aged, all goofing off (no, "law professor" is not a real job). That's why I say, "forty-something is the new eight."

Youth need not be wasted on the young. As a boy I spent my time reading, dreaming, riding my bicycle, and playing with my chemistry set. Now, at forty-six, I spend my time reading, writing, dreaming, riding my bicycle, and fermenting wine in my garage.

The new, super-prosperity

In the eighteenth century, John Adams prophesied, "I must study politics and war, that my sons may have the liberty to study mathematics and philosophy, geography, natural history, and naval architecture, navigation, commerce, and agriculture, in order to give their children a right to study painting, poetry, music, architecture, statuary, tapestry and porcelain." We live in the age of porcelain and skateboarding.

There is a lot of prosperity going around. And you don't have to be prosperous to benefit from it. Fool.com says, "Certainly, we have more money to spend. From 1970 to 2000, real household income rose by more than 50%, according to the authors of Trading Up: The New American Luxury. Today, there are 15 million households that take in more than $100,000 a year. Our paychecks and portfolios are fatter than ever, and thanks to mass-manufacturing and merchandising (think Wal-Mart, Kohl's, Circuit City), our everyday necessities can be had at a fraction of what our parents and grandparents paid." http://www.fool.com/news/commentary/2006/commentary06071003.htm.

In simple, material terms, being poor today can include having a car, three televisions, a refrigerator, a DVD player, stereo, and computer. I think that's a symptom of a super-affluent society. As far as I can tell, the trickle-down theory proved out. Our economic freedoms and the energy and innovations that they release have produced so much material wealth that it doesn't just trickle down; it spills over.

If the poor live rich, what does it mean to be rich? Past generations would have accumulated wealth for security, power, and status. Whereas a growing, childish minority of my generation doesn't seek power or status in a conventional hierarchy. And this group of people seems not to worry about security, never having suffered privations.

My brother-in-law has a very young client with a problem. The client is a skate punk. All he ever did was ride his skateboard. Most of the guys in my brother-in-law's firm have a hard time communicating with the skate punk. They are too buttoned-down. They make him nervous. My brother-in-law's profession? Money manager. The skate punk's problem? What to do with the great wealth that he earned by riding his skateboard. To help solve this problem, my brother-in-law has to remove his tie and say "dude" a lot.

My nephew is a good student and a fine young man. Rock and roll is his thing. At 14, he is already making money playing in a band. His parents don't mind. They aren't pushing him to be a doctor or a lawyer. My sister manages his band. I'm convinced he will make a fortune in music. He'll be like the skate punk, just doing what feels good, and the wealth will pour in.

However, you don't have to make any money at all to enjoy the new super-prosperity. My unemployed friend is impecunious and has been for more than a decade. He lives among millionaires in a beautiful cottage a block from the beach in La Jolla, California. There he spends his time wondering where he went wrong and what it's all about and which diet is right for the human organism (macrobiotic? vegetarian? sugar-free? low glycemic index?) and whether his upbringing is the cause of his frequent physical malaises and what to do next, if anything.

I know that some of this high living involves other people's money and resources -- friends and relatives. But the friends and relatives are volunteers. These aren't forced redistributions.

Look at the trends and follow my speculations. How far can this go? In material terms, our poor are richer than everyone in earlier generations except for a wealthy minority. Productivity continues to rise. It takes less and less to earn more and more. Sure a lot of people work long, hard hours, but their motive is more likely to be power and wealth rather than food and shelter.

Does the average, middle-class worker like work that much? What will he do if ten hours of work a week will earn a comfortable living? Will he still work 40 hours? If we get prosperous enough, will many more people drop out? Will they conclude that working hard at jobs they don't like is a bad bargain when the consequences of quitting are so comfortable? Will they work only jobs they like or none at all? Will they take long, frequent sabbaticals?

Prosperity took me too much work and time. I got to be 44 years old. That's 25 years of hard work without goofing off! Well, okay, I did take more than a year off, twice, before retiring. Was I a fool to prosper at all before walking away from the table and cashing in my chips? Perhaps the ambient prosperity is enough. I'm not talking about being on the dole; I'm talking about being a slacker, a layabout, navel-gazing, perpetual student (without, of course, taking any courses).

Classes turned upside down

Is this in fact new? In 1906, William Jennings Bryan complained: "The theory that idleness is more honorable than toil -- that it is more respectable to consume what others have produced than to be a producer of wealth -- has not only robbed society of an enormous sum, but it has created an almost impassable gulf between the leisure classes and those who support them." But then and before, the leisure classes were always the rich and privileged classes. Now most of the rich are the working rich. They have, or give themselves, less leisure than almost anybody else. They work all the time -- in their cars, at their offices, in airports, at home. From them the spill-over economy flows.

These are the new serfs. Our economy feeds on their labor and creativity and risk-taking and taxes. I have seen it close up. The new serfs are the company executives who work longer and harder than their own employees. Thirty years ago, that was not typical. Today, it is the rule in new businesses. In every high-technology company that I know, the bosses are the slaves. And when the labor market is tight, they must coddle their employees just to keep them working 9:00-5:00.

So, many of the exploited masses have become the new leisure class. I admit that most of the new leisure class have some advantages (my description of the world will seem all wrong to some working-class people), but they are not just the wealthy or even mostly the wealthy. That's what's new. It's a middle-class revolt against middle-class values, and it has never happened before. Aristocrats, artists, and intellectuals have done it, but now the successors of the company man are doing it.

The Wikipedia entry for the word, "slacker" includes this: "...but philosophers such as Plato and Aristotle made it clear that the purpose for which the majority of men labored was 'in order that the minority, the elite, might engage in pure exercises of the mind -- art, philosophy, and politics.'" In our upside-down world, the apparent elite work miserably hard so that the enlightened bums of my generation and the next can engage in pure exercises of the mind and body -- writing screenplays, skateboarding, playing guitar, aimless speculation (like this essay), and bicycle races.

Or perhaps these childlike, unambitious people are simply petty and blind to the challenges that could make them more worthy. Perhaps the very opportunity to be a slacker is an illusion, a brief calm before a storm. Maybe war and pandemic and depression loom just over our close horizons.

Or, even if our prosperity and stability continue, maybe man is not made for the age of porcelain and skateboarding. I'm already seeing symptoms of a revolt against slackerdom among the slackers themselves. I feel it in my own heart. Something in me needs an existential challenge. I have apocalyptic dreams, dreams of war and violence. They are euphoric. I feel a sort of allergic reaction to the obvious question: "Is this all there is?" The more I ask myself that question, the more I tend to break out in a rash of crazy ideas -- I'll walk across the entire Indian sub-continent or move to Spain or climb Everest or take LSD or join the CIA or get a job. It's the urge to awaken the inner zombie. It's the next step in societal evolution. And it's the topic of my next essay.

Restaurant etiquette

A few weeks ago, I did something in a restaurant that made me half ashamed. Now that I read Stephen Cox's latest Word Watch column, I'm half proud too. After being harassed at least an honest four or five times by waitresses and busboys who wanted to know, "how's yer meal goin'" and "how's everything," and the awkward "how's dinner tasting," the very owner of the restaurant came up, put his hand on my shoulder and asked, "how's your dining experience?" I replied, "don't touch me!" He said, "okay," and removed his hand. Then I said, "the food is okay; that's all." He left. My wife and friends silently looked at their plates.

Was that wrong? Probably. I guess Cox and I are both offended by words that are nowadays, sadly, perfectly good etiquette.

Charlton Heston, Civil Rights Activist

The NRA must be the most successful advocate of individual civil liberties anywhere in the world. I know that's a big, broad claim, but I think it's true.

The civil liberty that the NRA defends is the right of individuals to carry arms. For the NRA, that means mostly firearms, and the NRA fights for the right to carry them. The NRA's favorite liberty has plenty of enemies. Governments and the busybodies that they employ have the same persistent urge to restrain gun rights as any other rights.

The NRA makes a lot of noise about its setbacks and losses. But don't let that fool you. The right to keep and carry arms is much more broadly respected by jurisdictions all over the United States than it was five, ten, or 20 years ago. What other civil rights can you say that about? In the case of gun rights, the opponents of liberty are losing. What a joy to be able to say that about the enemies of any individual liberty! I'll repeat myself just for fun: They are on their heels and in retreat. They are getting their butts kicked and handed to them in a sling. In the tally sheets, their loss column is long and crowded.

According to the Washington Post, 48 states now have "processes that allow people to legally carry firearms for self defense, compared with six states in 1982." (http://www.washingtonpost.com/wp-dyn/content/article/2008/02/27/AR2008022703131.html?hpid=sec-nation.) In the same article, an opponent of a proposal to allow more guns in national parks whines about how good the NRA is at lobbying: "It's a political maneuver by the NRA. They are using this as a political tool to build up support heading into the elections." Don't you wish the opponents of other liberties were crying the same tears over the anti-tax lobby or the drug decriminalization lobby or the tame-the-commerce-clause lobby or the private property lobby?

I predict that several obituaries will paint Charlton Heston's presidency of the NRA as a blot on his career. Others will say that he honored the NRA by taking that office. I say that, more than any Oscar, his presidency of the NRA honored him. May he rest in peace.

NOT SO BRITE LITES

I'm grateful to Andrew Ferguson for his reflection in Liberty (Moonland security, April 2007) reminding me about the story of moronic public officials and finger-wagging reporters caught up in the Great Lite Brite Scare. Peter Berdovsky and Sean Stevens planted little LED light displays around Boston as part of a marketing campaign for a television program. Boston's famously expensive and ridiculous reaction to these harmless illuminations made me cringe.

Then, God bless them, Berdovsky and Stevens, out on bail after having been arrested for I can't imagine what gave an illuminating press conference. At the conference they said that they were there to talk about hairstyles of the 70s. Whenever a reporter asked an impertinent 'question', such as, "you seem not to be taking this seriously," they would reply, "I'm sorry, but that's not a hair question."
Brilliant! This exchange was precious: reporter (to the guys' lawyer): "Have they been advised to act like they're not taking this seriously?"

Berdovsky's answer was, "That's ALSO not a hair question."

More of that please! When did the tone of public life become so damned righteous, officious, and petty?

Next time someone asks you a stupid question, in honor of Berdovsky and Stevens, just say, "That's not a hair question."

Here's a little update, based on a bunch of sloppy online research that I did:

One blogger reported that, at the press conference, Berdovsky said, "We need some time to really sort things out and, you know, figure out our response to this situation in other ways than talking about hair. So if you could just give us some privacy for a little bit. ... I will be trying to make sense of all it real soon."

Police in New York, where someone placed similar toys, got a list of locations from the marketing firm that Berdovsky and Stevens worked for. Almost all of the little gadgets were gone, apparently stolen, before the police could confiscate them. And, predictably, the little devices are selling for thousands on Ebay.

Laser graffiti artists in the Netherlands lit up a big building with "Free Berd," short for Free Berdovsky. Wow! Stevens and Berdovsky tweaked the media and the city of Boston and inspired the Dutch to humor. Is there anything they can't do? Hey, wait a minute! That's not a hair question.

Cheating to the Camera

There are two ways to experience anything: from inside the frame or from outside the frame. Both ways of experiencing the world are useful, and one is often misused.

In Liberty, Stephen Cox cited a funny quip from William Hazlitt who long ago said that Englishmen had but one thought while attending the opera -- "I am at the opera."

Let's run with that example. Suppose it's a good opera with a dramatic plot, great music, and good singing. If your mind is filled with "hey, I'm at the opera!" then you might be an idiot. If you aren't an idiot, at least you are missing something. I think that even "hey, look at the tits on that soprano!" is better than "I am at the opera."

"I am at the opera," is an example of experiencing life from outside the frame. The protagonist has ceased to be a protagonist and has become an actor for an audience that sits in his head and admires his act. Today, the outside-the-frame perspective is the one most often abused. It fits the cheap irony that chases its own tail in popular culture, and it fits the shallow consumerism ("hey, I have an iPhone!") that gets people up in the morning.

But sometimes the outside-the-frame perspective can be a marvel. Consider Groucho Marx cheating to the camera. Or consider this: I was once in an old, colonial-era hotel on the banks of the Orinoco reading Rabelais in Old French under the influence of a strong hallucinogen, and I thought to myself, "hey, I'm in an old, colonial-era hotel on the banks of the Orinoco reading Rabelais in Old French under the influence of a strong hallucinogen." Now that was a rewarding experience in both ways. Giggling madly at Rabelais with the Orinoco flowing by was a delight, and just thinking about what a strange thing I was doing was another, different delight.

Sure, for a moment I had ceased to be a protagonist and had become an actor for an audience that sat in my head and admired my act, but (forgive me for saying so) it was a good act and worth stopping to admire; whereas almost anyone can buy an opera ticket, and sometimes they give them away.

Poor making choices, or making poor choices?

A recent article reports on some results from surveying very poor people in Udaipur, where 65% of the men are underweight and more than half are anaemic. (The Economist April 28, 2007; http://www.economist.com/finance/displaystory.cfm?story_id=E1_JDRDDQR.) The survey reveals that if these people spent less on cigarettes, alcohol, and festivals, they could eat 30% more.

To the Economist's writer, the obvious conclusion to be drawn from this is that the poor make bad choices. I think another conclusion is available and would evince more respect for the choices that the poor make. And I am not alone. I asked my wife, Lisa, what most folks would think about this survey. "That the poor make poor choices," she said. Then I asked her what she thought. "That they like a smoke, a cocktail, and a party, like anyone else" she replied. I think she's right.

A hungry man who buys cigarettes knows damned well that he could buy some rice instead. Does his choice, so long as it only directly affects him, not define what is good and useful?

This story reminds me of an argument that I make about bullfighting. Opponents of the spectacle ("art form," I would say) suppose that it is immoral to take an animal's life for "sport." Except when these opponents are vegetarians, they see a bright line between slaughter for bullfighting and slaughter for food. I tell them that they are grossly materialistic, because they will kill an animal to satisfy an appetite for meat, but they condemn killing it for loftier, aesthetic values.

But the busybodies always think they know what is valuable: Meat is valuable, even to a fat-assed consumer. The beauty of the bullfight is not valuable. Food is more valuable to the poor than are cocktails, parties, and tobacco, even though the poor prove by being hungry while smoking, drinking, and attending festivals that man does not live by bread alone.

The Freedom To Think Like An Ignorant Slob

There are many ways to tell someone to shut up. Consider my hypothetical examples of a hypothetical radio program, Big Talk AM:

The host tells a caller to shut up.

The host hangs up on a caller whose views he dislikes.

The host hangs up on a caller who bores him.

The host refuses to take a call from a man who wants to talk about the civil liberties.

An association of bloggers promotes an effective boycott of Big Talk.

An association of bloggers promotes an effective boycott of commercial sponsors of Big Talk.

The sponsors of Big Talk tell the radio station to stop talking about civil liberties or lose their sponsorship.

A woman who doesn’t like what the Big Talk host says invades the studio and shoots him dead.

Now which of these examples implicates Constitutional, First-Amendment freedom of speech? Trick question. The correct answer is, none. Why is that? These examples don’t implicate First-Amendment rights, because the First Amendment does not protect you from being told to shut up or even from being made to shut up, except in special circumstances.

The special circumstances are clearly stated in the Constitution: “Congress shall make no law … abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.” There you go. Any laws being passed or enforced in my examples? No. In other words, any state action involved? No. Therefore, no infringement of free-speech rights.

The popular image of the “marketplace of ideas” is apt. You can bring your ideas to the marketplace and find no takers. You can even bring your ideas to the marketplace and get pummeled to death. That would be a crime but not an infringement of the First Amendment, unless the pummeler were a cop or a congressman.

That seems simple to me. But the simple fact that the Bill of Rights, and much else in our Constitution, limits government powers is lost on the ignorant slobs who now appear to constitute a majority of the polity. Why do so few Americans know this? It’s basic and important information about our government. It's not some kind of legal technicality; the entire Bill of Rights is about limiting government powers, not about limiting private powers or corporate powers. And the Bill of Rights is, or was, an important part of the American identity. As the authoritative Wikipedia puts it, “The Bill of Rights plays a central role in American law and government, and remains a fundamental symbol of the freedoms and culture of the nation.”

A USA Today article (http://www.usatoday.com/news/nation/2007-01-23-free-speech-battles_x.htm) reports that hundreds of blogging activists promoted a boycott of Disney-owned radio station, KSFO-AM in San Francisco, because the hosts made racist comments. A Disney company sued one of the bloggers for copyright violations. Both sides claimed that their speech rights were being attacked and the reporter seemed to agree, calling it a "First Amendment flap." The First Amendment has nothing to do with it.

Ignorance on this topic goes far and wide. How far? Again and again, I hear on the radio and read in the press that the (presumably and sometimes explicitly Constitutional) right to free speech should protect us from various forms of speech itself. You can't hang up on me or tell me to shut up, or refuse to take my call, or strongly disagree with me, or tell me I'm an idiot for thinking what I think, or boycott the Dixie Chicks, or withdraw your sponsorship, because that would infringe somebody's right to free speech. I think that these sloppy arguments are sneaking up on the ultimate idiocy: the assertion that to protect the victims of these "infringements", well, there ought to be a law.

Do I have to draw you a picture?

Worse Than Bad In Africa

Governments cause high inflation: Their thieving and redistribution get out of whack. So they print too much money.

High inflation is bad. It brings all sorts of discomforts. You can't use money to store wealth. Credit is all but impossible to give or get. Fears of financial insecurity cause popular upheavals.

But the governments that cause inflation can, and usually do, make it worse. They try to impose price controls and currency controls. When they do, goods flee the country and the markets go empty. It happens fast, and I'm going to tell you exactly how.

In 1983, Bénin in West Africa had high inflation, price controls, and currency controls. I lived next door in Togo. It had the same currency but not price controls, and it had an unregulated black market for money changing. In the "street of banks," the money changers walked around with fat rolls of banknotes and were proud to call Togo "Africa's Little Switzerland."

The markets of Togo's big, coastal city, Lomé, were overflowing with goods -- meat; fish; vegetables; a little girl selling only shoestrings, another selling only chocolate bars; eggs; live animals; pharmaceuticals sold on a platter in the open air next to hand axes and coconuts; second-hand clothes from Europe and the United States that the locals called "dead yovo clothes," because they couldn't imagine live white people giving such precious things away; batteries; bolts of cloth; furniture; spices; palm butter; Chinese mosquito repellent; electric fans; and charcoal. You could buy anything really.

I visited Cotonou in the neighboring Marxist El Dorado of Bénin (formerly The Kingdom of Dahomey). Bénin should be the same as Togo. It has the same tribes, languages, colonial history, geography (including approximate size and topography), and weather. But in Cotonou, the market was pitifully empty. There was just nothing to buy. I, being used to Togo, assumed that there was a holiday, or a coup d'état, or a plague that emptied the market. I began to ask questions of the bereft market people and ended up conducting a little investigation on both sides of the border between Togo and Bénin.

I learned about the Marxist government in Bénin and the inflation and weak currency and price controls. But why would that empty the markets?

The market people knew why. The key to prosperity and wealth (until everything ran out and the government abandoned Marxism in the late 80s) was to buy goods in Bénin at the official prices and smuggle them out of the country. If you bought goods, you smuggled them to Togo to sell at market rates. Then you went back to Bénin where you might buy more goods at the official prices to smuggle out of the country and, if you were well connected, you might change the West African currency (CFA) for US dollars or French francs at the official rate. And back to Togo you went with goods for the market and hard currency for the street of banks.

Some people got rich this way. Eventually they had to risk their skins to do it, after the government of Bénin closed the borders. But not before there were almost no more hard currency or goods in Bénin.

Variants of this story have played out all over the world at various times, famously in Germany and Brazil, and now in Zimbabwe where inflation is "illegal," the government is printing Z$200,000 notes, and the people are suffering severe shortages of food, fuel, and medicine.

Let's hope (against hope) that Mugabe is the last hyper-idiot of hyperinflation.

CSI Pyrenees: Frenchy The Bear

Some of you may be eager for the latest news of the Slovenian bears in the French Pyrenees. The news is good or bad depending on who hears it, but everyone will agree that it's odd.

In 2006, the French government released a Slovenian brown bear named "Franska" (or "Frenchy" in Slovenian) in the French Pyrenees. Some shepherds were angry and raised hell.

The same year Palouma, another imported bear was found dead at the foot of a cliff. The Greens thought the circumstances suspicious. The shepherds applauded her death.

Now, in August of 2007, Franska died. An investigation and autopsy revealed that:

1 She was old. Franska was supposed to be a sexy, young female. Her job was to breed more bears. But in fact, she was way beyond breeding age. A Slovenian fraud perpetrated on the French? One thing is sure; she didn't die of old age.

2 She had been shot in the derriere by a shotgun, but that was not the cause of death either, because--

3 She was hit by a truck while crossing the road and killed instantly.

"What a joy and what a relief for the keepers of livestock!" said the president of the Association for the Preservation of Pyreneean Heritage of the High Pyrenees.

"Such sad news.... We will immediately ask the government that she be replaced," said the president of the Association of Bear Country.

Palouma the Bear, Fallen For France

This year, the French government released five brown bears from Slovenia in the French Pyrenees mountains. Some Pyreneean shepherds, an endangered species, got angry. As I reported in an earlier Reflection, the French government was forced to release the bears at secret times and places to avoid disruption.

Battle lines have been drawn. According to Reuters, pro and anti-bear graffiti is a common sight along roadsides in the Pyrenees, a region where bears were once common.

In August, hikers found Palouma, one of the Slovenian bears, dead at the foot of a cliff. A wide-ranging investigation into her death has begun. Here are some of the headlines translated from the French press:

--Death of Slovenian bear Palouma probably accidental
--Palouma's death resuscitates debate over Pyreneean bears
--Death of Palouma: "No possibility excluded"
--Pyrenees: the death of a bear
--Palouma, will she be replaced?
--Palouma's autopsy: Nothing suspicious found
--Palouma, fallen for France

A representative of a green party in France says that if Palouma was chased off the cliff then, "it's murder, pure and simple."

Speaking of murder, I was surprised to learn that the tiny number of beleaguered brown bears in France kill about 300 sheep and cattle per year. But wait! Not so fast! These official statistics are wrong, says AVES France (the Association de Protection des Espèces Menacées). According to AVES, whenever a herder claims that a lamb, kid, or calf was killed by a bear, the government gives him the benefit of the doubt and pays an indemnity, hence the inflated statistics. http://www.aves.asso.fr/article.php3?id_article=288.

Senior French songster, Renaud, just released a musical homage to Palouma entitled "Rouge Sang." (Yes, he's one of those one-name guys. No, I'm not making this up.)

Passions among the shepherds have not cooled either. Following a violent demonstration, some of them were recently convicted of crimes and given suspended prison sentences as long as four months.

As the French say, "A suivre..."

Racism and Fine Merlot

Last week, I drank with a racist.

At a cocktail reception for Harvard lawyers, she told my friend, an Hispanic lawyer, that retiring Hispanic judges should arrange whenever possible for an Hispanic successor. I gently asked her was that not a sort of racism? She made the usual arguments for affirmative action and for proportional representation of her ethnic (or linguistic?) group in the professions. I suggested that the process might taint the reputations of its beneficiaries. To that, she violently agreed. It was just awful how white professionals assumed that brown ones got their positions through affirmative action.

She appeared to be a bright person, so I was surprised that she stepped so swiftly and willingly into my logical trap. (It certainly wasn't original.) Maybe she is not old enough to remember a time when anyone dared challenge affirmative action in polite society. In any case, I waited for the other shoe to drop. I enjoy doing that -- smiling quietly until my opponent in rhetoric begins to make my own arguments for me. She obligingly backpedaled and told me that she did not advocate promoting people who aren't perfectly qualified. I heartily agreed with the sentiment and poured her another glass of Merlot. The wine was good.

Then I asked her if faced with a couple of qualified candidates, one Hispanic and one white and clearly better qualified, what would she do? After long hesitation, "Hire the white guy," she said. So we agreed; no affirmative action, right? Well, no. But she couldn't tell me why not.

Feeling that her side needed bolstering, I guess, she attacked with a dull, ugly weapon: "What do you know about it? What's your ethnic background?" That 'argument' was so pitiful that I again waited for the other shoe to drop, but she waited me out. So I asked in return, "If I'm Hispanic, you will agree with me more thoroughly?" "No," again.

She looked a little deflated, and I wanted to help. "How's this for affirmative action:" I asked, "the old white judge naturally finds a younger white guy to succeed him. There's a better qualified Hispanic candidate, and the judge isn't exactly prejudiced; he just knows and likes the white guy, a nascent good ol' boy." That enthused her. It happens all the time; it drives her mad.

I drank with a racist, and it wasn't so bad.

In The Carcass of Communism

March 2006

Dwarfing their chairs and stools in the broad hallways of the Polish ministry of finance sat fat, old women with moustaches. Each of them edged into the halls from the great office doors as though escaping from the office in slow motion. They nibbled on little cakes, gently gossiped, and sipped sweet tea all day long. They did nothing else. I mean no work at all, ever. They made no pretense even.

It took me a long time to get used to them. It was best to pretend that they simply were not there. I once begged the secretary of a high-ranking bureaucrat to help me send a fax to the World Bank. I couldn’t operate the fax machine. It was an important communication. The finance minister himself cared about what I was doing. The secretary was friendly about it, but my request was risible. She laughed at me. She would not work.

I wondered why, in a country with so many comely young women, were these old hallway fixtures so ugly.

Polish men told me (and my experience did not contradict them) that older Polish women were hideous and fat with black hairs coming out of unlikely places. Young Polish women were blonde and beautiful. The men had a theory that these old and young women were of two different races. The young ones never had a chance to get old, because the old ones killed and ate them. And that’s why the old ones got so fat. I suppose it did have something to do with their diet. I digress.

When I moved temporarily from Paris to Warsaw in 1994, it was like moving backwards and sideways in time. Backwards because everything seemed to have been built before 1960. Sideways because all of these old buildings strove for a dated futurism. Communism had frozen Poland in the past. But it was a past that worshipped socialist progress and the socialist future. The government directed what little bit of energy, economic growth, and foreign aid that Poland could muster into futuristic projects. Their ideas about the future itself (at least as expressed in their buildings and trams) were stuck in the first half of the last century in the form of socialist realism.

By the way, foreign aid to the East Block from capitalist countries, mostly the United States, helped sustain communism. According to my Polish friends, a lot of foreign aid came to Poland in the 1970s. The communists used it for big capital projects.

How disgusting that the soviet rulers and their puppets, given the chance, decided what every city and building would look like! It’s such a shame, because the Poles were not very good communists at heart. Maybe they wanted to make beautiful things that looked nothing like socialist realism. Maybe they are making such beautiful things now; I haven’t been there for more than ten years. But in 1994 they were saddled with nearly a half century of officially constructed blight, and they were just waking from a long nightmare.

The place was dreary and gray. Everything seemed to be covered by a fine layer of oil. Smooth, old metal parts of heroic fabrication, lightly greased – that was the character of Warsaw.

I was really shocked to learn that Warsaw was termed the Little Paris of the East Block. In the communist years, wealthy Russians loved to vacation in Warsaw. It was, according to my Polish friends, a great escape from the gloom of Russia. To myself I thought, my God, how could anyone survive in a place gloomier than Warsaw, in a place so gloomy that Warsaw was their City of Light? Moscow must have been hell.

The streets of the Polish capital were absurdly wide, and sooty buildings in disrepair squatted across whole blocks. I lived in one such building. Everything in my small, furnished apartment was old, cheap, and worn. The water was rusty. I was paying a fortune by Polish standards. This was Warsaw’s version of upper-middle class living.

On a certain date in the late fall (practically a national holiday), the city turned on the heat, centrally supplied in the form of steam. That’s right; they had some kind of central steam factory. When it broke or ran out of fuel, everyone froze. The city did not turn on the heat when winter arrived early and did not delay the heat when winter arrived late or for warm spells. Once the heat was on, it was on until spring. It wasn’t metered. Nobody paid for it directly. The radiators blasted their moist heat. Windows all over the city were wide open to moderate the temperature. Often, the first day of officially distributed heat was delayed for financial reasons. People liked to grouse about that.

It’s funny how central steam seems so absurd to me, but I rarely think twice about central electricity. If our own state were less socialistic, I suppose central electricity would also seem absurd. Each house or neighborhood would make its own electricity. One might buy it from competing companies. We get used the absurdities of central control.

When I talk to friends about limited government, they often scoff and cite road building as an example of how my logic goes too far. They say in mocking tones, “I suppose you think private companies should build the roads.” They think that they have reduced my arguments ad absurdum. Yet there is nothing absurd about private roads. They are common and are usually of excellent quality.

Near the top of a steep road that I often climb by bicycle, I always get a laugh. There’s a sign that reads, “Caution: end of county-maintained road.” The county wants to avoid any responsibility or liability for the private road beyond the sign. Yes, should you venture beyond this sign, you will see the horror, the abomination of a private road. In fact the county road is rough and cracked, the private road smooth and beautiful. So I laugh every time.

The trams were a good example of Warsaw’s greasy character. They were all of futuristic-looking burnished metal and oily. You could acquire a sad affection for the trams. They ran, slowly and cheaply. I took the tram to work at the ministry of finance.

I reported directly to the finance minister who reported directly to the prime minister. All of the work at the entire ministry was performed by about 25 people, although it employed hundreds.

It seems that communism and the command economy had led to this: out of 100 people, 100 had a job and five worked.

Of the 20 who did anything in the ministry of finance, only two were over 25 years old. One of them was the minister himself. The post-communist government drew him from academia. He was like the professor, and all the 20-somethings were like his students.

The other older person who did any work was a crusty apparatchik who was ready for anything. I liked him. I think he liked me too, because he introduced me to his beautiful 16 year old daughter. With a wink, he sent me off on lunch dates with her. She was formal and shy. But she certainly was eager to improve her English. “It is just for English,” she would defensively say. We became friends once she realized that I was not going to court her at the behest of her father.

I asked some of the young workers about all the worthless employees, particularly the old ladies in the halls. They told me that most people, after working under the communist regime for more than seven or eight years could not be reformed. They were hopeless and would have to be carried along for the duration. You couldn’t fire them. That might be unfair and would certainly cause riots and strikes. Inflation would chip away at their incomes. They would become bitter and remain lazy.

I met the president of the biggest Polish bank. He looked to be about 22 years old.

From all I saw in Poland, I conclude that, after the great Solidarity movement and the fall of the Wall, there was a revolution affecting the people at very top of major governmental and government-controlled institutions. They were largely replaced with newly-minted college graduates. The rest of the hierarchy was a sinecure.

So these young men and women, fresh out of college, some of them just 19 years old, were remaking Poland. I was supposed to help them by giving little courses on financial markets and by hanging about and lending a hand. By happy coincidence, they were gearing up to offer open-market government bonds for the first time since before World War II. I knew about bonds.

But the Poles were burdened not just by the legacy of their communist governments but by their new government too. The director of the international department, for whom I worked, was smart and hard-working. He was also paralyzed by political fear. In one of the first, big, post-communist privatizations, the government set the initial public offering price of a bank at a level that turned out to be less than one-tenth of what the market would have paid. It was a scandal causing some very highly placed heads to roll. I believe that the director was terrified. He did not want to make any decisions that might expose him to an accusation of corruption.

The bond issue that I was helping with illustrated the point. Nobody wanted to choose the investment bank to underwrite the offering; the power to choose implied the power to accept bribes. So, unable to reject unlikely candidates, the ministry received and reviewed an excessive number of detailed proposals from investment banks to act as investment advisor and lead manager of the issue. Then the whole decision-making process rotted in a large selection committee with members from several areas of government, business, and academia. Nobody could decide anything, and nobody could be blamed for the eventual decision.

Even the simple, obvious, necessary decision to hire bond counsel to represent Poland proved almost impossible to make. I wrote memos strongly recommending this step. The US treasury department, also assisting Poland, wrote extensive letters supporting my recommendation. The director just asked for more memoranda. He passed them up the chain of command (and it didn’t go much higher). Consequently, when I left Poland, this essential but petty decision was sitting on the desk of the minister of finance who objected that it was not sufficiently important a decision for him to make.

The bond issue made my lessons especially relevant to the bright, young bureaucrats. They were used to thinking about capitalism and markets in abstract, academic terms. When they thought about financial markets in the real world, in Poland, it was too much even for their supple, young minds. In particular, they could not believe that some concept called, “the market” would set the prices for the bonds. They wanted to know who really set the prices. I would explain the market mechanism again and again. They would nod and agree. Yes, they told me. They understood all about it – supply and demand, market information incorporated in the price, allocation of resources efficiently made through the free choices of millions of people. But who really set the prices? Was it the SEC or the World Bank or maybe the European Community? Or would the Polish government have to set the prices? And who were the secret beneficiaries of the rigged bond issuances?

I feared for the ministry of finance. I feared for Poland.

My little report on what I did in the fall of 1994 is pretty dreary.

Command economies make for odd behavior: Old women paid to drink tea. Windows wide open, the heat on full blast. Powerful men in business suits walking around the ministry of finance carrying their own private rolls of toilet paper for the bathrooms. 22 year olds running vast banking empires. High officials unable to make obvious, simple decisions.

And yet recent history has obviated my pessimism. I was wrong.

The bond issue was a big hit. And now for years, Poland has been the darling of the post-communist economies. Poland has experienced rapid, though sporadic, economic growth despite its government’s failure to privatize very large state-owned companies. The growth, of course, has been in sectors where smaller companies were privatized and in new sectors of activity.

Poland’s total exports increased more than 30% in the first nine months of 2004.[1] From 1991 to 2005, Poland’s GDP grew an average 4% annually. Poland’s rapid growth has been persistent. For example, in 2005, Poland’s industrial product grew 9.2%.[2]

Poland joined NATO in 1999.

From the CIA’s fact book on Poland:[3] Life expectancy at birth is now above 74 years. The literacy rate is 99.8%. Exports to the EU are surging. GDP, adjusted for inflation, grew 3.3% in 2005. Unemployment is now high (which I consider to be a great achievement of liberalization and an ingredient of rapid economic growth). And I believe that someday, mature Polish women will be beautiful.

The obvious lessons from Poland are that some freedom and capitalism are better than none. The less obvious lesson is that very incomplete and corrupt liberalization can still make huge differences in lives and economies. The forces of freedom and capitalism are not hothouse flowers. They will grow in a little dirt between the cracks. They will flourish in a vacant lot. They will set up great forests in a land that demolishes most of its state structure. The Poles, like most humans, seem to be natural capitalists. God bless them.

---

[1] The Economist, June 6, 2005.

[2] The Economist, January 28, 2006.

[3] http://www.cia.gov/cia/publications/factbook/geos/pl.html.

Dogtown and Z-Boys, The Birth Of Extreme

March 2003

Sony Pictures Classics, directed by Stacy Peralta, 2001

Review by Michael Christian

Rating: two stars out of three. Stars for sincere, personal storytelling; fascinating, original subject; good soundtrack. Although it may be appropriate to the subject matter, I didn't like some of the harsh, jumpy editing.

On Christmas day in 1973, a new technology changed my life if not for good, then at least for a good number of years. My mother gave me a skateboard with polyurethane wheels. I can picture the board right now, a Fibreflex with red Road Riders. The wheels made the difference and started a skating revolution.

The experience of most skaters of my generation spans the entire, brief, important history of skateboarding technology.

First, we took apart our sisters' old metal-wheeled roller skates and nailed their trucks to two-by-fours. Later we bought commercially fabricated versions of the same rickety machines. Boards with clay-composite wheels slightly improved on what we had jerry-rigged in our garages. These devices barely roll on smooth pavement and cement. They transmit harsh vibrations from the pavement, though your bones, to your teeth. If a wheel hits the slightest obstacle, such as a pebble, the board stops and your body hits the pavement. If the rider attempts any but the mildest turns, the board slides and the rider hits the pavement.

Polyurethane wheels changed everything. They liquefied the urban and suburban landscapes. It was heaven on wheels. And everyone who experienced the change from the old technology knew it. Instead of grinding, the wheels swished. The sensation of simply rolling was a joy. Traction went from nearly none to nearly perfect. Hard turns became possible. In fact, the skater could profitably assume a low stance and turn so hard that the body could lean close to the skating surface, and a slide could be controlled. With the combination of momentum and traction, you could defy gravity and skate on curved surfaces that reached vertical and beyond.

But no one knew of these possibilities when the new wheels came out. They had to be discovered and invented. Whatever people had done in the past with skateboards became mostly irrelevant. What might be done in the future was unknown.

And so for a period that began around 1972 and lasted for at least ten years, rapid innovation in skating styles and maneuvers earned great rewards. The currencies of those rewards were personal satisfaction and the adulation of one's skating peers. Skateboarders, in their skating lives, didn't care about the Little League or their parents or teachers or friends who didn't skate. The rewards from such groups could not hold a candle to the excitement of carving out new territory with a skateboard.

So what happened? An energetic, low-brow subculture was born. The skateboarding subculture had its own language, scarification rites, clothing, and hierarchy. And, for a few glorious years, at the top of the hierarchy were the Z-boys.

The Z-boys were a skate team spontaneously generated from the ooze around Santa Monica pier. They were like a cross between a street gang and a club of scruffy kids come down from the tree house. This bunch of misfit teens and pre-teens invented what we might now call extreme sports.

They were at the top, because they dramatically innovated while maintaining aesthetically pleasing styles. They explored the possibilities of polyurethane wheels with skating styles inspired by the surfing that they admired and participated in at the Santa Monica pier. They skated streets, school yards, paved banks, drainage ditches, and empty swimming pools. They competed with each other and encouraged one another. They formed a tribe. Stacy Peralta was one of them. His documentary, Dogtown, tells their story.

Peralta uses old photographs, video, and magazine articles to show what the Z-boys did. He interviews them and people who were close to them to show how they saw themselves and how they now assess what they did back in the 70's.

Dogtown is a documentary built around two simple organizational devices: chronology and portraiture of people, places, and things. Peralta gives us chronologies of surfing, skateboarding, Santa Monica, and the Zephyr skate team. He profiles several Z-boys (members of the historic Zephyr skate team). He paints a portrait of Dogtown (Venice Beach and south Santa Monica).

Peralta's techniques succeed. If you weren't there, you can get a very good idea of what it was like by watching this film. You feel the excitement of discovery and the thrill of outlaw skating in the empty pools of the suburbs during a drought. You watch the most unlikely young subjects rise in fame until they are treated like rock stars.

Especially moving are the struggles of the informants to express their conviction that they were part of a significant movement. Everyone interviewed tries but fails to say why the revolution in skateboarding that the Z-boys spearheaded was important. All of the surviving Z-boys (and the one Z-girl) feel strongly that they were involved in something momentous. But none of them can put his finger on it.

One of the former Z-boys said, "It was like a Mafia." Meaning that you had to earn membership, and they enforced their own rules. I think that another former Z-boy, Bob Biniak, came close when he said, "There were no goals. There were no aspirations." In fact, they had clear goals. Much of the film shows how the Z-boys pursued the goal of innovative skating. I think he meant that none of their goals were conventional or received. None of their aspirations could be measured in terms outside the subculture. They freed themselves from other people's goals. That sort of freedom only comes from profound wisdom, extreme youth, or bitter disenfranchisement. The Z-boys had two out of three.

They weren't (at first) trying to make money or get famous. They weren't looking for the approval of anyone but each other. Freedom from received goals and criteria for success deserves more attention.

One common measure of a liberal society that gets a lot of attention is equality of opportunity. Is opportunity determined by arbitrary factors such as birth, or by talent and hard work? A liberal society is a meritocratic society. A less common measure of a liberal society is diversity of opportunity. (When I say "diversity," I am speaking English here, not using a code word of the politically correct.) By how many different yardsticks can you measure success? In a rich, populous, liberal society, there are so many yardsticks that you can't count them.

Diversity of opportunity is a notion that first occurred to me in 1987 when I began working in downtown Los Angeles. The west side of the city was all about the entertainment industry. Downtown was about everything else. Downtown we didn't give a damn about entertainment industry. On the west side, they never thought about anything else. Looking around a little, I found that Los Angeles was full of all kinds of enclaves ignorant of one another or at least indifferent to one another. In my mind, I contrasted this with Boston where various groups hated each other and vied for supremacy, and where everyone knew who was on top of business and politics. In this sense, I think Angelinos have more freedom.

If diversity of opportunity is a kind of freedom, then at one extreme are traditional, tribal societies exemplified by villages I once visited in Africa. In those villages there is very little diversity of opportunity. Almost everyone must strive for the same things. No subcultures. No clubs. No hobbies. No room for private life.

In a place like Los Angeles, you can choose from among thousands of tribes or make your own. That's what the Z-boys did at a propitious moment – at a moment when new technology rewarded the rule-breakers. They created the clan of the polyurethane wheel. The existence of this clan and the technology that inspired it enhanced liberty all over the paved world by adding to diversity of opportunity. You can flunk out of school, fail at all team sports, earn the ire of mom and dad, yet still achieve greatness on a skateboard.

I'm not very fond of the hippie ethic, but there's a lot to be said for the value of doing your own thing. The greatest success stories are often about people doing their own thing. People get rich that way, sometimes without trying. They even get happy.

The Z-boys did their own thing in a big way. Dogtown nicely documents how it happened. The former Z-boys interviewed by Peralta and, I think, the director himself vainly strive to put their achievement into social and historical context. The strain and the failure are part of the film's charm; the men can't fathom what they did as young boys. The young boys wouldn't care.