Archives for February 2016

Restitution Is the Pollution Solution! (from the “Cliff Notes” version of “Healing Our World”)

The best way to protect the environment is to deter polluters with restitution. If those who polluted had to clean up their messes, they wouldn’t make them in the first place. Cleaning up pollution is much more time-consuming and expensive than prevention.

Unfortunately, the world’s greatest polluter, the US military, is not bound by this principle. Usually, our military claims sovereign immunity, which basically says the sovereign, government, is exempt from its own rules. Sovereign immunity violates the second principle of nonaggression and protects government polluters, who would be more careful if they were required to right their wrongs.

Thousands of sites at home and abroad are now highly contaminated by the heavy metals used in bombs and bullets, jet fuel, toxic chemicals, and radioactive waste both at home and abroad.  Perchlorate, a toxin used to make the military’s solid rocket fuel, is now found in high concentrations in over 90% of U.S. lettuce and human breast milk.

The contamination on military bases has caused popular resistance to U.S. troops. The aquifer in Germany supplying Frankfurt’s water has been contaminated by 300,000 gallons of toxic jet fuel leakage. Poisoning the wells of our allies won’t win us many friends.

Our lawmakers have extended the concept of sovereign immunity to include favored private monopolies. For example, in 1957, a study by the Atomic Energy Commission predicted that a major accident at a nuclear power plant could cause up to $7 billion in property damage and several thousand deaths. Consequently, no company would insure the nuclear installations, so power companies were hesitant to build new plants. Congress passed the Price-Anderson Act to limit the liability of power plants to $560 million. In the event of an accident, the insurance companies would have to pay only $60 million. The other $500 million would be paid, not by the company, but by the taxpayers. If the damages were more extensive, the victims would just have to suffer.

The Love Canal incident illustrates how sovereign immunity can poison the playground. Up until  1953, Hooker Electrochemical Company and several federal agencies dumped toxic wastes into a lined trench near Niagara Falls, New York, and sealed them there to prevent leaching. As the population increased, the local school board tried to persuade Hooker to sell this cheap, undeveloped land to the city for a new school. The company felt that it was unwise to build on such a site and refused to sell.

The school board simply threatened to seize the land through “eminent domain.” Eminent domain allows a government agency to force a person to give up his or her land for the so-called “common good.”

Hooker finally stopped trying to fight city hall and sold the land to the school board for $1. Hooker took the board members to the canal and showed them the dangerous chemicals so they would not build any underground facilities. Indeed, a provision against building was put in the deed of sale.

The city ignored these clear warnings and its contractual obligations. In 1957, it began constructing sanitary and storm sewers. By 1958, children playing in the area came into contact with the exposed chemicals and developed skin irritation. Hooker again warned the school board to stop excavation and to cover the exposed area. The school board again refused to listen.

By 1978, reports of chemical toxicity came to light. The Environmental Protection Agency (EPA) filed suit, not against the school board, but against Hooker Electrochemical! Taxpayers had to pay $30 million to relocate Love Canal residents; Hooker paid over $200 million in settlements.

The Love Canal incident is a classic case of the role of aggression in polluting our environment. The officers of Hooker Electrochemical took responsibility for their toxic waste by disposing of it carefully because it could be held accountable. Hooker did not want to turn the property over to the school board because they feared that it wouldn’t be as careful, since it had sovereign immunity. Hooker relented only when the school board threatened to use the guns of government (eminent domain) to force the company to its will.

The company’s fears were well founded. Public officials, like everyone else, respond to incentives. Anyone who is not held responsible for mistakes has little incentive to avoid them. How different things would have been if school board members had been personally liable for the damage that they had caused!

Restoring polluted property to its original state or compensating the victims for any damage is a costly endeavor. If government officials or corporate managers knew that they could spend the rest of their lives trying to pay off and environmental mistake, they would be careful not to make them. Of course, few people would want to take a job that had the potential for that kind of liability. Therefore, most such jobs would carry liability insurance for top management.

Insurance companies, of course, would not want to have to pay for environmental claims. Therefore, they would monitor the companies or government agencies that they insured and adjust the rates up or down depending upon whether good environmental safety practices were in place. To avoid high premiums, companies and government agencies would likely abide by the insurance companies recommendations.

Consequently, instead of being regulated by a government that claims sovereign immunity for itself, environmental protection would be jealously guarded by those who would be responsible to the victims if an error occurred. While no system is perfect, we’d likely have fewer incidents of pollution.

These posts are part of a “Cliff Notes” version of my award-winning international best-selling libertarian primer, Healing Our World. The next post in this series will be Chapter 15, “Dealing in Death.” If you’d like to learn more about how restitution works to fight pollution before the next post, check out Chapter 14 of the 1993 edition of Healing Our World, in my Free Library at www.ruwart.com

Why Restitution Works Better than Punishment (from the “Cliff Notes” version of “Healing Our World”)

JusticeMR

Many libertarians think of the nonaggression principle as the unwillingness to threaten first strike force, fraud, or theft against another, or what I call “honoring our neighbor’s choice.” However, this is like having the “yin” without the “yang,” the “male” without the “female.”

The second part of the nonaggression principle, restoring the victim or righting our wrongs, is just as important as the first. Indeed, without the balance of restitution, the first part of the nonaggression principle creates contradictions.

For example, imagine that you are walking down a busy street talking on your cell phone. Someone comes up behind you and knocks you over. Your hands are torn and bleeding from trying to break your fall. Your expensive suit is ripped as you land, while your cell phone flies from your hand and breaks apart on the pavement.

Scenario #1: Perhaps the entire incident is an accident. The person who shoved you helps you up, offers to pay for your damaged phone and suit, and gives you enough to cover your transportation to your apartment to change. Given the circumstances, you might be satisfied with this resolution or something close to it.

Scenario #2: On the other hand, if your “attacker” had deliberately pushed you out of the way of an oncoming car, you would probably not ask for any restitution at all. Although that person violated the first part of the nonaggression principle by initiating force against you, damaging you and your property in process, he or she saved you from even greater harm. You’d be grateful for the intervention and might even wish to reward your “attacker.”

Scenario #3:  However, if your assailant was just being nasty, you might flag down a nearby police officer to apprehend him or her. In a society that adheres to the nonaggression principle, you will probably demand, not only restitution for your suit and telephone, but something additional for the time and trouble that you will have in pressing charges. Ideally, restitution should include a fee to cover the costs of the court and the apprehending officer so that you aren’t paying these indirectly through increased taxes or higher insurance premiums.

In each case, the facts of the case are identical.  However, the practice of “righting our wrongs” is what balances the scales of justice and helps us determine when violation of the first part of non-aggression is appropriate. Without the second part of the non-aggression principle, we might come to the absurd conclusion that we shouldn’t pull a stranger from the path of an oncoming car!

Restitution is the best crime deterrent known. Japan, which uses a form of apology and restitution in its justice system, is the only industrialized country that has seen a continuous fall in crime since World War II.

In Japan, once a wrongdoer has been caught, he or she is expected to negotiate a settlement with the victim. Usually a mediator, often a relative of the offender, visits with the victim. First, through the intermediary, the aggressor apologizes to the victim and offers restitution.

After a period of negotiation, the victim may accept both the apology and the settlement. He or she will then write a letter to the judge, expressing satisfaction with the offer. The offender receives a light fine or sentence, because the judge is satisfied that the wronged party has been made whole again.

If the victim and aggressor cannot agree on a settlement, the judge must decide if the victim is simply being unreasonable, or if the aggressor is not sorry enough to make a good-faith bargaining effort. If the judge finds fault with the criminal’s offers, a harsh sentence is imposed. Thus, offenders have a great deal of incentive to make things right for their victims.

Most career criminals start with small offenses. In Japan, they are twice as likely to get caught as in the United States, in part because victims have something to gain (i.e., restitution) by turning to the authorities. When criminals reap what they sow, they are more likely to turn away from crime before it becomes a career.

Western nations are starting to reintroduce restitution into their victim-offender mediation programs. In face-to-face dialogues, both victims and aggressors can express their feelings. Ninety-five percent of such meetings result in a consensus on appropriate restitution, much as similar negotiations in Japan have done. Restitution is usually financial, although personal service to the victim and community service are sometimes included as well. Mediation programs report contract fulfillment of 79–98%.

Are prisoners capable of creating wealth even when imprisoned? In the early 1900s, my great-grandfather’s factory gave inmates of the Missouri State Penitentiary jobs making saddle parts. Not only was the prison self-supporting, it also made a small profit. The inmates grew their own food and manufactured brooms and men’s clothing. The prison prided itself on the health of the prisoners, noting that epidemics were rare and the death rate was “less than that of the average village.” Self-financing prisons were common in the nineteenth century.

Today, many companies employ inmates. One private corporation, Prison Rehabilitative Industries & Diversified Enterprises (PRIDE) of Clearwater, Florida, manages 42 prison work programs with 400 different jobs. Only 11% of prisoners who work for PRIDE 6 months or more return to prison within two years after their release. In 2012, armed with the experience and training given by PRIDE, the average worker started at over $10/hour after serving their sentence. Clearly, this rehabilitation works!

Of course, aggressors sometimes harm others in ways that cannot be totally undone. Monetary compensation to a person who has been raped or maimed, or to families whose loved ones have been killed, does not make things right again. In some cases, the victims, their family, or their insurance company might accept a monetary settlement as the best compensation available. A repeat offender might be imprisoned permanently so he or she could not harm others.

As we’ll see in the next post, restitution provides the ideal “Pollution Solution.”

These posts are part of a “Cliff Notes” version of my award-winning international best-selling libertarian primer, Healing Our World. The next post in this series will be about Chapter 14, “The Pollution Solution.” If you’d like to learn more about how restitution works to deter crime before the next post, check out Chapter 13 of the 1993 edition of Healing Our World, in my Free Library at www.ruwart.com

How to Create Enough Wealth to Retire the National Debt, Keep Our Promises to Our Seniors, and More! (from the “Cliff Notes” version of “Healing Our World”)

The governments of our world are mired in debt. Some people don’t think this is a problem, because we “owe it to ourselves.” However, that debt sits in our retirement funds, our investment portfolios, and in the hands of foreign speculators. At some point, we will be faced with either higher direct or indirect (e.g., inflation) taxes to settle it. Either way, we end up with less.

 

Wealth meme

 

However, there is an “easy way out.” If we were able to create more wealth at a faster pace, our debt could be retired without increases in taxation or inflation. The only way to increase wealth creation enough to do this in today’s world is for governments to tax, spend, and regulate less. Studies show that when government spends more, wealth creation declines (for example, see Figure 12.1 from the 2015 edition of my book, Healing Our World).

 

Figure 12.1: Reprinted with permission from J. Gwartney, R. Holcombe, and R. Lawson, “The Scope of Government and the Wealth of Nations,” , 18: 171, 1998.

 

Figure 12.1

 

At different times in their history, Ireland, New Zealand, and the United Kingdom doubled their wealth creation virtually overnight by slashing taxes, lifting tariffs, and deregulating. Instead of learning from this experience, these three countries limited their bounty by once again raising taxes and increasing regulation. However, we can learn from that experience.

Studies suggest that the United States, for example, could increase its wealth creation between 3-18 times by practicing non-aggression, ending government services, and letting the private sector provide them. In earlier posts, we found that many of these services, which were intended to protect us, actually cause harm. In subsequent posts, will discuss how police, fire, and national defense might be provided by the market. For the moment, however, let’s focus on what the increased wealth creation would mean for us.

What would you do if your paycheck tripled, quadrupled, or soared even higher? Would you send your children to better schools, take more vacations, work less, donate time and money to your favorite charity? Would you be able to pay off your credit card debt and mortgage, start your own business, or retire early? The increase in wealth would be so drastic, it’s difficult to even imagine that!

With this much wealth creation, we would be able to keep our promises to our seniors and pay off the national debt without increases in taxation or inflation. Instead of those on fixed incomes being able to buy less and less each year, the value of their pension would remain stable. The value of our savings would as well.

Governments of the world hold title to between 40-80% of the land mass of their countries. If government sold these lands, or recognized the homesteading rights of those who currently live on them, the poor, especially in the Third World, would become affluent overnight. A clear title to the lands they inhabit would allow them to live securely on their land, rather than fearing an overnight eviction by bureaucratic decree. A clear title also allows the poor to sell the property they currently live on or mortgage it to start a business. One of the reasons that the Third World never became rich was that it did not recognize the property rights of those who homesteaded it.

The most dramatic change with an increase of wealth creation would be goods and services that are currently unavailable. Most likely, we’d have cures for our deadliest diseases: cancer, heart disease, AIDS, and even old age. Perhaps we’d visit other planets or even colonize them as new technologies gave us travel speeds that we can only dream of today.

We’d be able to take better care of our earth as well, since we’d be able to learn more about nature’s ecosystems and how best to maintain them. Poverty, as we know it today, would be a historical curiosity. No one would starve. We’d be able to create more wealth in less time, increasing leisure for study, play, friends, or family.

The loss that we experience because of aggression-through-government is staggering: the damage done to our forests and prairie lands; the boom and bust cycles that cripple the poor; the hopeless future of millions of illiterate children; the absence of life-saving drugs and anti-aging therapies; the space explorations that never launch; starvation; premature death. The lost wealth means that suffering which might have been stopped must continue.

The developed nations of the world became rich by honoring their neighbor’s choice. Why then did they turn their back on the principles that made them wealthy?

While many people understood the dangers of aggression-through-government, they did not know how to cope with individuals who aggressed against others. They didn’t have the “other piece of the puzzle,” which is the subject of the next post. As a result they tried to prevent aggression by becoming aggressors themselves, with consequences more terrible than those they sought to avoid. In the next few posts, we’ll explore better ways to deal with those individuals who would aggress against us. We will learn how to remain Good Neighbors while defending ourselves.

 

These posts are part of a “Cliff Notes” version of my award-winning international best-selling libertarian primer, Healing Our World. The next post in this series will be about Chapter 13, “The Other Piece of the Puzzle.” If you’d like to learn more about creating 3-18 times as much wealth before the next post, check out Chapter 12 of the 1993 edition of Healing Our World, in my Free Library at www.ruwart.com