Lessons From Ferguson

Richard Epstein*



Last week, I wrote a response of Paul Krugman’s critique of libertarian economics. As I mentioned there, it often turns out that libertarians are their own worst enemies in their critique of tough current affairs. Consider Nick Gillespie assessment of the Libertarian Moment in Ferguson, which is instructive both for what it does and does not say.

Gillespie argues that the modern libertarian movement ranges far beyond the traditional bread and butter issues of limited government. He points out that America is now “more socially tolerant” and that high on the agenda of libertarian causes is gay marriage, smoking pot, and “other forms of self-expression.” The attacks on government are less focused on the choice between monopoly and competition, and more on the perceived heavy-handedness of the government bureaucrats. Mainstream libertarians—and this is where I break with them—harbor grave doubts about the use of military force overseas, the perceived invasions of privacy done in the name of security, and, most recently, the use of police power in places like Ferguson, Missouri. Forget for now the libertarian principles on labor unions, cartels, and rent control. Today’s libertarians are more passionate about police, police militarization, and matters of racial justice.

It is not that I entirely part company with modern libertarians on all issues relating to the police. It is that I would like to see libertarians of all stripes slow down their denunciation of public authorities, without whom we cannot enjoy the ordered liberty that we all prize. The correct attitude on the police force is to see it as a regrettable necessity, but a necessity nonetheless. Without police intervention, many cities in this country would turn into Iraqi-style war zones. The point remains true even if it is the case, as it is in Iraq, that most people have a strong desire to live out their lives in peace So long as some fringe groups are intent on using violence, they can force everyone else to follow suit, until by degrees entire nations can be plunged into chaos and sectarian violence unless there are some organized institutions to protect us.

But that is only half of the story. The next step is to ask what should be done to make sure that the police, with their own monopoly over the use of force, don’t convert the traditional police power into a police state, with all the shuddering connotations that this term carries with it. And so it is back to the old story about the importance of institutions. Running the police is in part a big business, where we have to ask and understand how police are recruited, trained, equipped, deployed, supervised, promoted, punished, and paid. The basic deal is that we give the police extra powers, but we expect them to meet higher standards, which justifies their right to use of deadly force. And when they fall short, the sanctions on them are often the heaviest because they cannot plead the excuses available to ordinary people who have neither the training nor the temperament to engage successfully in the use of force.

All of this then gets us to Ferguson, where Gillespie joins the swollen ranks of those who believe that the police have presumptively misbehaved in killing an unarmed black man, and thus must prove their innocence, much as George Zimmerman was able to do, to the surprise of many, in the Trayvon Martin case. But in these cases, condemnation can run ahead of the evidence. I often like to say that I am a professor of law and not a professor of facts, and thus have no particular insight as to the course of events in fatal confrontations of which I have at most third-hand knowledge. But I do know something about how treacherous individual cases can become contentious whenever the issue of self-defense comes into play. These cases resist any orderly characterization, which makes it imperative not to jump to judgment before the information comes out.

It is not that the problem is not serious. One report indicates that there were 18 unarmed black men shot in the first three months of 2012. More recently, there was the homicide of Eric Garner by a chokehold, where the visual evidence makes it all too clear that the police wildly overacted in subduing the now dead man. It is no wonder that there have been recent peaceful public protests in Staten Island about the incident. Then there was the 2012 killing of the unarmed black man Trayvon Martin, where the acquittal by a Florida jury was, it seems, supported by all the available evidence. The word “unarmed,” as in the sentence, “the police shot an unarmed teenager” is often given too much weight in making snap judgments about right and wrong in these confrontations. A strong-arm robbery, such as that which happened minutes before Michael Brown was killed, is a crime of violence, which is, by definition, done by an unarmed man.

In the case of Ferguson, the hard question is what does that evidence say. The accounts vary all over the map. On one version reported on the Huffington Post, Brown was “compliant” when approached by police office Darren Wilson. Another version, reported on Fox, told a very different story: that Wilson had been jammed back into his car by Brown, and subjected to serious injuries, including a damaged eye socket, that led up to the shooting when, by this version, Brown had started to go after the police officer. Whether the Huffington Post or Fox is correct is something that requires the evidence, which at this point has not been made fully public. Yet all of the general statements about the sorry state of race relations in places like Ferguson are no substitute for an accurate account of what happened.

The role of institutions again surges to the fore here. There is no question that Gillespie (and everyone else) is right to condemn the Ferguson police and Missouri state officials for acting poorly insofar as they kept the release of evidence to the public to a trickle. Full and prompt disclosure has to be the norm in cases of killings by police officers, in order tamp down on local distrust that could easily lead to violence. In Ferguson, moreover, the disputed question of whether a police officer has suffered serious injuries is something that can be answered easily enough by photographs or a direct viewing of the officer. Yet nothing of that sort was done. By the same token, the interventions of Attorney General Eric Holder in the situation only compound the difficulty, because his job is not to seek evidence of a civil rights violation, but to ask whether Wilson had committed any civil rights violation in the first place, which you cannot do effectively if you align yourself publicly with Brown’s parents. It is a sorry state of affairs if every potential investigator of the situation is perceived by some constituency to have axe to grind. There is no faster way for public confidence to go south.

The situation does not get any easier when we seek to draw broad implications from this tragic incident. Crime rates over the past generation are sharply down for both white and black people. It is of course an open question as to why this has happened. In dealing with this issue, Gillespie attacks repeatedly criticizes the “militarization” of the police for the obvious risk that it could give them the reason to attack as if they were soldiers. But the declining numbers of fatalities don’t support that conclusion, and the use of military gear in some cases at least could protect the police from serious bodily injuries. Do shields and tasers save lives, or do they serve only to inspire public resentment?

These are fair questions. But Gillespie goes a bit over the line when he notes, quoting both Reason and Cato, that “The buzz phrase in policing today is officer safety.” At the very least that ought to be a serious consideration. Indeed, even at the height of racial unrest in the late 1960s a liberal Supreme Court in Terry v. Ohio, approved, after anguished reflection, a stop and frisk regime when police had reasonable suspicion of the potential commission of a crime. That decision was not idle. Police officer deaths in the line of duty, year to date for 2014, were 67 of which 27 were by gunfire. For the full year of 2013, the numbers were 105 total deaths, with 30 by gunfire. It would be odd to say that police officer deaths (which are more common than deaths to citizens from police officers) should not count especially since it is very difficult to envision circumstances where killing a police officer counts as a form of justifiable homicide, and easy enough to imagine cases where killings by police officers are justified.

As in the case of mass killings, we have to be very careful before we draw general conclusions from particular cases. The killing of Eric Garner raises lots of serious questions, but it doesn’t seem that one of them should be whether New York City should keep to its “broken windows” policy, which worries about quality of life issues in an effort to create a social climate in which lax policing is taken as a sign of public indifference to serious offenses. The clear point here is that broken windows or no broken windows, the use of excessive force by police is always inexcusable, so that the proper policy is to tamp down on those forms of abuses without redoing general policies of community relationships which, while always subject to revision, should not be regarded as a weak link in the system.

These arguments speak, moreover, to the overreach of modern libertarian thought, which in the end does not have any distinctive take on these critical issues of public administration. No one should condone excessive police force, private crime, or violent public protests. The hard question is figuring out the ways in which to tamp down on these issues. That is ultimately the challenge of any responsible system of public administration. Oddly enough, that task need not raise profound questions of what counts as right and wrong conduct. The inconsistent accounts of the Brown killing all play off a common moral substrate. Killing an unarmed civilian in cold blood is a crime. Killing in self-defense is not. The task of public administration is to find out which happened, and to do it quickly and in a way that can command public confidence and respect. No easy job, it seems. 

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

Setting Krugman Straight

Richard Epstein*



The recent story in the New York Magazine, “Has the ‘Libertarian Moment’ Arrived?” by Robert Draper, has given rise to a great deal of speculation about whether we are poised for another great political transformation. Needless to say, the prospect of this “moment” fills the New York Times set with dread. The Times’ all-purpose scold Paul Krugman followed up Draper’s tell-all story with his own harsh critique of “libertarian economics” in his column “Phosphorus and Freedom.” He concludes that it is “foolish” for defenders of free market economics to believe that “we have a vastly bigger and more intrusive government than we need.” Unfortunately, Krugman knows nothing about the libertarian principles that he blithely dismisses.

Krugman points to three places where he thinks that libertarian enthusiasts have gone sadly astray: pollution, the Food and Drug Administration, and the Department of Motor Vehicles.

In order to set the stage for this critique, it is necessary to first establish how libertarians understand free markets. Most emphatically, these markets do not operate in a vacuum. They require that we have clear assignments of rights to both human labor and external objects. The standard position here is that all individuals own their own labor and the various resources, both physical and intangible, that they acquire either by initial capture or by transfer from a prior owner. Its basic system of exchange must be protected by vigorous rules that prevent all self-interested individuals from disrupting voluntary transactions. There must be formalities with certain classes of contracts to increase security of exchange. And there must be strong rules to prevent bad actors from bypassing the market by seizing things that do not belong to them. That prohibition against theft in turn requires the state to provide remedies against other actions that destroy the property of other persons, not only by direct blows but also by pollution. Far from rejecting these government limitations on individual activities, a responsible system of laissez-faire capitalism necessarily embraces them. A sensible libertarian is a classical liberal in the tradition of Adam Smith and David Hume. On economic issues he is no anarchist, but a believer in limited government.

Libertarians and Pollution

Krugman sums up his criticism of libertarianism in one word: phosphorus. Evidently, Erick Erickson, a prominent blogger at Red State, frothed at the mouth when a local city council banned phosphorus in dishwasher detergents. Erickson’s categorical denunciation was ignorant and ill-informed, but so too was Krugman’s purported refutation of that overheated position.

There is little doubt that phosphorus is a pollutant that can kill aquatic life. One possible remedy against parties whose discharges poison the land and waters of others is a tort suit brought to stop its use or collect damages for harms caused. But a moment’s reflection shows that this solution is creaky. First, there are too many users to sue, and second, it is not clear which people should bring suits for the assorted harms. For hundreds of years it has been widely understood that direct regulation is often an efficient substitute for an inferior tort system, which achieves a legitimate government goal at low costs. Krugman is right that the system cannot work if farmers can evade controls, and the sensible libertarian recognizes that as well by expanding the scope of enforcement.

Indeed, the key challenge for regulatory design is what form of regulation works best. Perhaps a total ban of phosphorus in detergents or farming is too costly to productive activities. It is therefore always a fair question to ask whether small amounts might be used, and if so by whom, and further whether to tax those users to give them private incentives to avoid the additional harms.

So stated, the libertarian critique against government regulation no longer operates as a blunderbuss. Instead it asks whether the regulation comes too soon and is too severe. Thus it is commonplace today to require individuals who wish to build homes at a distance from the water to go through extensive government approvals, often administered by an overzealous Army Corps of Engineers, before getting a building permit. The paperwork is expensive and never ending; the delays inordinate, and the required precautions a waste of time and money. For example, the record in the 2006 case Rapanos v. United States, revealed that “The average applicant for an individual permit spends 788 days and $271,596 in completing the process, and the average applicant for a nationwide permit spends 313 days and $28,915—not counting costs of mitigation or design changes.”

Rather than engage in this unending charade, just let the construction start, and then impose a prompt cease-and-desist order, clean-up obligations, fines, and damages—but only for builders whose activities pose an imminent threat of pollution, which, given everyone’s knowledge of the looming sanctions, will typically be a tiny fraction of the cases. In the face of this sensible alternative, and in light of similar difficulties in getting building permits in urban settings, Krugman is a pure ideologue in denying that government is “vastly bigger and more intrusive” than it ought to be.

Abolish the FDA?

Krugman’s second sally ridicules Milton Friedman for suggesting that we should abolish the FDA and use tort law in its place. In this case, both economists get failing marks stemming from their inability to master the institutional details. For starters, the FDA has three distinct functions in regulating drugs: insuring purity, testing for safety, and testing for effectiveness. No serious libertarian mounts an existential attack on the FDA for discharging the first function. An action in tort law (or in contract law for a breach of the implied warranty of merchantability) presupposes that you can find the rogue supplier who puts dangerous stuff into the marketplace. As with pollution, the inadequacy of the individual lawsuit requires some concerted government action to stop these deadly incidents before they occur. Indeed, in practice, the risks of contamination and adulteration are so severe that reputable pharmaceutical manufacturers work hand-in-hand with the FDA to stop illegal imports and domestic sales of bogus drugs.

It hardly follows, however, that the FDA does as well when it oversees clinical trials of new drugs. Here its practices are rigid and obsolete; they impose unconscionable delays on letting new drugs into the market. As a consequence of its incompetence, the FDA is besieged with pleas for exceptions by people for whom all approved therapies have failed. Indeed, the extensive market for off-label uses of FDA-approved drugs shows that physicians are a lot better at making treatment prescriptions than the FDA. Moreover, its effectiveness studies almost always miss the boat. Individual healthcare programs, armed with knowledge of their customer base, can do this job better.

Nor is the tort law any panacea. The actions today are not confined to suits for drugs that are improperly formulated. Those cases are rarities. Virtually all the litigation brought today is by disgruntled patients who insist that the FDA-required warnings did not adequately inform them of the associated risks of the product. These lawsuits are almost always counterproductive given that the FDA warnings are typically far too alarmist, so that they serve no useful function at all. Private systems of warnings developed by such organizations as the National Comprehensive Cancer Network provide far more accurate and up-to-date information than the FDA, because they systematically address such key issues as dosage levels, treatment sequences, and drug interactions that the FDA overlooks. Is this intervention “bigger and more intrusive than we need”? You betcha.

The Case for the DMV

Last, Krugman fantasizes that libertarians recoil at the Department of Motor Vehicles. This is not the case. The case for that body is similar to that for collective controls over pollution, only easier. Keeping bad drivers off the road is often better than allowing them to kill innocent people. Keeping a system of fines and tort remedies in place offers a sensible three-prong program that tends to minimize the risks of keeping too many good drivers off the road and letting too many bad drivers on it. The tests can be reasonably objective and easily processed. It is government at its best. Illinois, which can hardly do anything right, runs a perfectly fine DMV for ordinary drivers.

Yet it hardly follows that all motor vehicle licensing is risk free. Former Illinois Governor George Ryan went to jail for taking bribes to issue licenses to unqualified truck drivers, with deadly results. The abuses of licensing power become greater when the licenses limit the number of trucks that ship tomatoes from Illinois to California, but not back again, or rations taxi cabs medallions that sell at artificially high prices. A sound system of regulation never lets the state use its licensing power to restrict competition on a facility over which the state has monopoly power.

The Bigger Picture

The overall pattern should now be clear. One reason why the debate between hard-line libertarians and their fevered opponents like Krugman has taken such a know-nothing turn is that neither side bothers to take seriously the nitty-gritty institutional details on the uses and limits of regulation in a variety of complex areas. Milton Friedman tended to miss these points because his main targets were minimum wage, rent control, and agricultural price supports, where the hard line libertarian solutions make a good deal of sense.

Krugman doesn’t have that excuse. He fails to understand how institutions work because it is so much easier to slam libertarians for their cultish devotion to Ayn Rand. The truth is, as I argued in an earlier critique of Rand Paul, libertarianism has a strong and useful theory of rights, but offers only loose guidance on the mix between public and private remedies for both breach of contract and harms to strangers, including pollution. All Krugman’s popular work is marred by his obsessive attention to monetary policy and the Fed. If he ever cared to study mid-level regulations on pollution, drugs, and highway usage, he would discover that not all libertarians are as clueless as his New York Times screeds have become. 

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

The Pax Americana is Dead

Richard Epstein*



Thomas Friedman, the respected New York Times columnist, tried to do a beleaguered President Barack Obama a favor by publishing a summary of an extended interview between the two men, which was grandly entitled “Obama on the World.” Friedman tried to present the President in a positive light, by calling his weak responses “feisty.” Yet there is no denying that Obama’s rudderless foreign policy has been a disaster. The international order has rapidly deteriorated since Obama entered the Oval Office. The current situation is so perilous that so long as Obama remains President, the phrase “presidential leadership” will continue to be an oxymoron.

The President suffers from two fundamental flaws. The first is that he is unwilling to make decisions. He much prefers to play the role of a disinterested observer who comments on a set of adverse events that he regards himself as powerless to shape, of which Assad’s carnage in Syria is the prime example. The second is that he fundamentally misunderstands the use of force in international affairs. He handicaps himself fatally by imposing unwise limitations on the use of American force, such as his repeated declarations that he will not send ground troops back into Iraq.

To put these points into perspective, it is important to address two issues that Friedman never raises with the President: military strength and American influence. Regarding the first, Freidman fails to discuss President Obama’s conscious decision to reduce the budgets for, and hence the size of, American military operations throughout the world. In the President’s view, cutting down on the size of the military reduces the American temptation to intervene in disputes around the globe, and thus prevents misadventures such as our interventions in Iraq and Afghanistan that have sapped American strength with little or nothing to show for it.

The second issue Friedman never addressed is the deterioration in world peace that has happened since President Obama became president. No one can claim that Iraq was at peace when George W. Bush left office, but the violence had been curbed. Since Obama has taken over, relative tranquility yielded to factional squabbling, followed by vicious aggression that caught the President woefully off guard. Iraq is not alone. The number of hotspots in the world—including Gaza, Syria, Libya, Nigeria, Ukraine and the China Sea—is increasing. The President wrings his hands over how difficult it has become to find credible allies in the world to address these problems without ever asking why no one trusts him. So he resolves to hold back on the use of American force overseas. Armed with that certainty, every tin pot dictator and terrorist group thinks it has an open field in which to run.

The President’s blunders remind us that we need Pax Americana in international affairs. If the United States maintains a large military force and is prepared to use it, the threat of American force could snuff out a large number of troublemakers and help decent people organize their own affairs. It was this policy that made NATO such a success in the immediate post-war years. It will also allow the United States to use force effectively when needed. But once our commander-in-chief neutralizes America’s military might, weaker but more determined nations and groups know that they have a free hand to follow their own aggressive agendas. Worse still, this passive policy invites new thugs like Abu Bakr al-Baghdadi to propel themselves into regional prominence.

When Friedman asked the President about how his hapless policies created the current tinderboxes, Obama said he "is only going to involve America more deeply in places like the Middle East to the extent that the different communities there agree to an inclusive politics of no victor/no vanquished.” This noble sentiment gets the causation backwards. So long as we remain on the sidelines, we can be quite sure that the various factions in Iraq will continue to take what Obama termed “maximalist positions,” without the spirit of compromise.

The President wants “to speak to the Sunni majority,” but how is that possible in parts of Iraq under the thumb of extremist groups? He also chides the wretched and untrustworthy Prime Minister Nuri Kama al-Maliki for missing opportunities to share power with his mortal enemies. Yet chastising current Iraqi officials won’t get the job done. Left to their own devices, the Sunni, Shiite, and Kurdish factions in Iraq have such well-earned mutual distrust that they will never be able to agree upon a workable long-term power sharing arrangement when each party wants 60 percent of the available power in a world where majority vote rules.

The United States cannot hunker down on the sidelines until those groups reach an agreement. It cannot announce in advance that it will not step in to be the Iraqi or Kurdish air force “in the absence of a commitment of the people on the ground to get their act together and do what’s necessary politically to start protecting themselves and to push back against ISIL.”

There is only one way for this to happen. It is for the United States to put real resources on the table, and to announce in advance it will stay for the duration. It is not a question of putting “a lid” on the problem. Seeking a status of forces agreement that would allow 10,000 American troops to remain in Iraq is hopeless. The warring Iraqi factions will never commit themselves to an American presence that they regard as puny and ineffective. What is needed is American backing with force and determination. As confidence grows, we can pull back some of our commitments. But it will be a long and expensive process, without which the Yazidis will be driven out of Erbil and stranded on Mount Sinjar, both places that no one heard of before the Iraqi meltdown.

Obama knows the dangers of his half measures, given his own regrets on Libya. Friedman writes: “Intervening in Libya to prevent a massacre was the right thing to do, Obama argued, but doing it without sufficient follow-up on the ground to manage Libya’s transition to more democratic politics is probably his biggest foreign policy regret.” When it now comes to salvaging the wreckage in Northern Iraq, he has stressed repeatedly that he prefers months of inconclusive air attacks to placing some boots on the ground that could rout the ISIL forces in a short fraction of that time. It is hard to know how many people will starve or be killed in the interim. But we do know that tens of thousands of people have already been forced from their homes, some of whom have already lost their lives while the President dithered because he wanted the Iraqi government to repair its own internal relations. Half measures do not a great President make.

A record as dismal as Obama’s does not happen by accident. It stems from some fundamental conceptual error, which in this instance is one that is shared by the hard-line libertarian wing of the Republican Party, led by Rand Paul, which is deeply suspicious of the use of force in international affairs. The root of the difficulty is this: a strong libertarian believes that the primary wrong is the use or threat of force. It’s clearly wrong for a powerful nation such as the United States to commit aggression against its weaker neighbors. But the intellectual slogging for libertarians gets a lot tougher when the question is how to respond to both the use and threats of force by others. In these cases, the principle of self-defense reveals how difficult it is to decide when to respond and with how much force even in simple disputes between ordinary individuals. The issues only get tougher in the international arena as the stakes get higher and the overall uncertainty increases.

Obama, like the hard-core libertarians, is skeptical about the use of force in international affairs. Imprudence is of course unwise in any area, but one cannot rule out the extensive use of force in corners of the world where the ends sought—the control of the aggression of others—is indubitably legitimate. The point is true even in cases in which nations act in defense of third parties who are incapable of defending themselves. Of course, intervention is costly and can easily backfire. But less intervention is not always less costly than more intervention.

In many cases, the only effective way to deal with aggression is with a strong and decisive response. Our overly intellectual President has failed to deliver one. He sees himself as a deep thinker who sees issues that lesser minds just miss. He would do a lot better in international affairs if he would stop his philosophical musings and start being the President of the United States and the leader of the free world.

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

Spying, Lying, and Torture

Judge Andrew P. Napolitano*

            In some respects, the recent admission by CIA Director John Brennan that his agents and his lawyers have been spying on the senators whose job it is to monitor the agency should come as no surprise. The agency’s job is to steal and keep secrets, and implicit in those tasks, Brennan would no doubt argue, is lying.

            Yet in another respect, this may very well be a smoking gun in the now substantial case against President Barack Obama that alleges that much of his official behavior has manifested lawlessness and incompetence. It is hard to believe that the president did not know about this but not hard to believe he would look the other way.

            About four months ago, California Democrat Dianne Feinstein, the chairwoman of the Senate Select Committee on Intelligence, went to the Senate floor and accused the CIA of committing torture during the presidency of George W. Bush and of spying on the committee that she chairs as it was examining records of that torture. Brennan responded by denying both charges and leveling his own -- that investigators for the Senate Intelligence Committee had exceeded their lawful access to CIA records and that that constituted spying on the CIA.

            Brennan even got his predecessor, George Tenet, under whose watch Feinstein claimed the torture had occurred and the attacks of 9/11 took place, to deny vehemently that his agents had committed torture. With this mutual finger-pointing, both the CIA and the Senate Intelligence Committee reported each other to the Department of Justice, which promptly punted.

            How did all this come about? Under federal law, the CIA gets to do what the president permits and authorizes only when it reports its deeds and misdeeds truthfully to two congressional committees, one of which is the Senate Intelligence Committee. (The other is the House Permanent Select Committee on Intelligence.) None of this is constitutional, of course, seeing as the CIA fights secret wars; the Constitution mandates that only Congress can declare war, and Congress cannot delegate its constitutional authority to committees. This system of secret government is so secret that 90 percent of our elected congressional representatives are kept ignorant of it.

            But last week, on a sleepy Friday afternoon in the middle of the summer, Obama admitted that the CIA had tortured people, and shortly thereafter, Brennan admitted that the CIA had spied on the Senate. Then the president said he still has confidence in Brennan.

            This is approaching a serious constitutional confrontation between the president and Congress. Can the president’s agents lawfully spy on Congress? Of course not. Can the CIA lie to Congress with impunity? Only if Congress and the Department of Justice let it do so.

            Yet this administration thrives on lies. Brennan’s boss, James Clapper, who is the director of national intelligence, lied to the same Senate Intelligence Committee when he denied that the National Security Agency is collecting massive amounts of personal data on hundreds of millions of Americans. And now we have the CIA director lying in secret to his congressional monitors, who were formerly his congressional protectors, and a Justice Department unwilling to do its legal duty by enforcing the law.

            Do you remember former Yankee great Roger Clemens? He was indicted and tried twice for lying to a congressional committee about the contents of his urine. He was acquitted, yet this should tell you about the government’s priorities. It is more interested in chastening a baseball player about a private matter than it is in being truthful to the American people about torture. It apparently thinks that government employment is a defense to lying.

            So where does all this lead us? The president’s agents have lied to Congress and have spied upon it. If Brennan did not know about this, he should be fired for incompetence and for failing to control his agents. If he did know about this, he should be indicted for lying to Congress, because he denied it at a time when he had a lawful obligation to be truthful, and he should be fired for his failure to communicate a violation of the Constitution to the president. If he did tell the president that his agents were about to spy on Congress and the president failed to stop it, the president has committed a serious violation of his oath to uphold the laws and violated the separation of powers by invading the privacy of a coequal branch of the government -- and that is an impeachable offense.

            So, what shall we do about this? House Speaker John Boehner will say, “Let’s sue the president.” That’s a joke. How about subpoenaing the president to testify under oath and asking him what he knew and when he knew it? Now you’re getting warmer. How about impeaching him and calling him as the first witness in his own impeachment trial? His Department of Justice has argued that the Fifth Amendment privilege against self-incrimination applies only in criminal cases. Now you’re getting hot.

            But wait. All this requires moral courage, righteous indignation and fidelity to the rule of law; and the Congress has none of those traits. In the post-9/11 world, Congress has become a potted plant, ready to give any president whatever he wants, lest it appear less than muscular in the face of whatever danger the president says is lurking in the dark. And presidents know that if the kitchen gets hot, all they need to do is foment a foreign crisis in the dark, and the country will unite behind them.

            I am not so sure that unity behind the president will happen this time.

           *Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel. Judge Napolitano has written seven books on the U.S. Constitution.

"Middle-Out" Economics?

Richard Epstein*



This past week I appeared on the PBS News Hour on a segment hosted by Paul Solman. The segment was titled, “Top-down or middle-out? Debating the key to economic growth.” The show focused on the work of Nick Hanauer, an American entrepreneur and venture capitalist with a net worth of $1 billion, who appeared opposite me on television. Hanauer gave a talk on TED that went viral, receiving over a million views on YouTube, in which he advanced a middle-out thesis for economic growth: “The fundamental law of capitalism is, if workers don’t have any money, businesses . . . don’t have any customers.”

I was asked to comment on his thesis. The exchange was hard to get off the ground. His remarks were made without reference to anything that I said. I directed sharp criticism to his populist creed and argued that the middle class creates wealth through its demand—not the capitalist through his innovation.

Top, Middle, or Bottom?

When you appear on television, it’s hard to control how the central issues are framed. In this instance, the title chosen by PBS bought into Hanauer’s conception of the world with its middle-out perspective. But the phrase “top-down” does not reflect my views, as the segment’s title suggests. I take the classical liberal position on wealth creation.

The first source of difficulty is that a top-down approach frequently implies that wealth is created through central planning. That is, the government coordinates all forms of social investment. Following Friedrich Hayek, I cannot think of a worse way to plan the operation of any economy. The classical liberal view on this subject is that of bottom up wealth creation, which operates as follows.

The initial assumption is that the state is not regarded as the creator of rights, but as their protector. Individual rights in labor and intelligence belong to an individual as a matter of birth, not via a grant from the state. Claims to particular property are initially created by occupying land, capturing animals, or grabbing things that are otherwise unowned. Once individuals own property, the key office of the legal system is two-fold: First, to stop aggression, and second, to allow for coordinated activities, which includes the use of public funds to create the needed infrastructure over which private transactions take place.

At this point, the relationships between consumption, production, and growth are not determined by some magical law that favors a top-down, middle-out, or bottom-up position. What happens is that individual decisions to collaborate on various ventures drive all aspects of the wealth cycle from innovation to implementation. There is no privileged position for either middle class consumption or capitalist innovation. Hanauer is, of course, correct to say that unless consumers have income they cannot buy the services, both new and old, that capitalists produce. But the relationships are reciprocal, so that entrepreneurs must be there to provide goods and services that consumers want, and to pay wages to workers which they then spend in their roles as consumers. All sides of the relationship constantly feed each other.

At this point, any claim of priority no longer makes any sense. Indeed a claim to focus on aggregate consumption for the middle class makes no sense either. Let each individual decide how much of his income or wealth to consume or invest. Let each person also decide whether to direct his or her investments into new or old technologies. Each person makes his or her choices with some knowledge of the plans of others. Their decentralized choices will yield a more informed set of outcomes on both production and consumption than either a state-imposed top-down or middle-out version of the world.

The Problem With Middle-Out Economics

The decision by Hanauer to stress his so-called middle-out position carries with it dangerous policy implications, which are evident in how he treats both labor and taxation policy.

One supposed implication of Hanauer’s consumer-driven account is that efforts to pump out aggregate demand depend on boosting up income for the middle class by devices targeted to that end. This policy goes back as far as the 1930s when one of the rationales for mandatory collective bargaining under the National Labor Relations Act stemmed from the supposed belief, as its statutory findings announced that “the inequality of bargaining power” between employers and employees “depresses the purchasing power of wage earners,” for which the higher wages wrought by concerted union action was the appropriate policy response.

Yet the NLRB miscarried for multiple reasons. First, its pro-union policies only address the union members, not overall consumer demand. If unions get more through industrial action, other workers could easily get less, so that no confident claim can be made about the aggregate effects of unionization. In addition, the shift in market arrangements increases bargaining costs and results in monopoly dislocations, including strikes, lockouts, and other interruptions in production, that offset any supposed gains from more aggregate consumption. Rather than rig markets, the better approach is to secure open competition in all markets, so that wages are bid up as productivity increases, wholly without government intervention.

Hanauer does not grasp these fundamentals. He repeats a common mistake when he writes: “But there is this upper limit on what we can spend. I drive a very nice car, but it’s only one car. I don’t own 1,000, even though I earn 1,000 times the median wage.” True enough. But the point only shows that he has a diminishing marginal utility for one form of consumption, which means that his consumption expenditures will switch to fine wines and private jets, while his unspent wealth is used to fund investments in new businesses or charitable operations. Think of it this way: people who earn huge amounts, but take very little out by way of consumption are doing a public service. Others gain from the increased supply of capital.

Unfortunately, Hanauer does not see matters this way, and thus makes counterproductive recommendations for both labor policy and taxation. On the former, he is an active backer of the $15 minimum wage law in Seattle on the ground that it will put money in workers’ pockets so that they can buy more goods. But that assumes that the jobs will remain after the wages are increased—that the wage increase won’t unleash collateral damage.

Indeed, his defense of major wealth transfers is condemned by his own example: “Wal-Mart earned $27 billion in profit last year. They could afford to pay their bottom million workers $10,000 more a year, raise all of those people out of poverty—save taxpayers billions of dollars, and still earn $17 billion in profit, right?” Not so fast. He speaks as if the huge transfer of wealth is fully captured by subtracting $10 billion from $27 billion. But huge hits generate counterstrategies as management has to find a way to stop the decline in share prices when net earnings drop by close to 40 percent. The cost of capital increases; capital to fund internal investments diminish. The firm looks at ways to cut workers to save labor costs, so that we see more outsourcing and greater automation. By the same token, it may have to raise prices to boost revenues, but only at the risk of lost business, given that its core customer base includes a large percentage of price-sensitive lower-middle class people.

My approach was the opposite. Repeal the minimum wage and let people work for $.02 per hour. Let, not make, of course. This claim does not rest on some ludicrous assumption that anyone can “survive” on that nominal wage. Indeed, one reason that Solman was incredulous at my suggestion lay in his failure to understand why it sometimes makes sense for workers to take a low or nominal wage, namely, in order to improve their ability to earn more money a year later. Gary Becker called this investing in human capital, and clearly any individual who takes this strategy should have some other source of short term income, whether from savings, a second job, family support, or in kind payments of room and board. The constant talk of the living wage should not blind us to the importance of life-cycle earnings, which could be undercut by a high minimum wage that keeps people out of the labor market

A similar criticism can be lodged against Hanauer’s proposal to tax the rich to fund the middle class. It won’t work. The tax increases under the Obama administration have not stopped the slide in median income in the United States, because they do nothing to ease the ever-rising burden of labor regulation, a topic that Hanauer never mentions. Today, the combination of taxation and regulation eliminates job opportunities, especially for workers at the bottom of the market.

The same logic applies to taxation targeted to the rich, which creates political uncertainty, drains investment income, and leads to wasteful albeit legal strategies of tax avoidance, including the now-popular tax inversions that drive companies overseas. Adam Smith was right to insist that low, flat taxes increase stability and spur growth.

The conventional wisdom holds that classical liberals like myself are ideologues untouched by human emotion and uneducated by practical experience. Many believe that to oppose the minimum wage is to tolerate pollution and abandon a public highway system. But that is a false caricature of laissez-faire, which has never once licensed nuisances against strangers or prevented the state construction and maintenance of infrastructure.

Laissez-faire economics is in retreat. Today, the progressive mindset drives much of public policy. So the populist skeptics of laissez-faire have to ask themselves a simple question: How can the decline in median income and the slow growth rate over the past six years be attributable to policies that have not been in place for a long time? The source of our current malaise is the populism of people like Hanauer who fail to understand the negative, but quite real, unintended consequences of their policy prescriptions.

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.

Should Ebola Patients Be Allowed Into the U.S.?

It was announced yesterday that two Americans sick with Ebola would be brought to Georgia for treatment. While the State Department is certain that the strict isolation protocols will defuse any chances of the public being exposed (while helping the patients), others are convinced that this is not a wise decision, as it exposes the public to a risk that has so far existed only in Africa. We want your vote - do you think these patients should be brought back to America?

Should Ebola patients be allowed in the U.S. for treatment?
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Is the President Incompetent or Lawless?

Judge Andrew P. Napolitano*



It has been well established under the Constitution and throughout our history that the president’s job as the chief federal law enforcement officer permits him to put his ideological stamp on the nature of the work done by the executive branch. The courts have characterized this stamp as “discretion.”

Thus when exercising their discretion, some presidents veer toward authority, others toward freedom. John Adams prosecuted a congressman whose criticism brought him into disrepute, an act protected by the First Amendment yet punishable under the Alien and Sedition Acts, and Thomas Jefferson declined to enforce the Acts because they punished speech, and pardoned all those convicted. Jimmy Carter asserted vast federal regulatory authority over the trucking and airline industries, and Ronald Reagan undid nearly all of it.

 The president has discretion to adapt law enforcement to the needs of the times and to his reading of the wishes of the American people. Yet that discretion has a serious and mandatory guiding light -- namely, that the president will do so faithfully.

 The word “faithfully” appears in the oath of office that is administered to every president. The reason for its use is to assure Americans that their wishes for government behavior, as manifested in written law, would be carried out even if the president personally disagrees with the laws he swore to enforce.

 This has not always worked as planned. President George W. Bush once famously signed into law a statute prohibiting federal agents without a search warrant from reading mail sent to persons other than themselves -- and as he was literally holding his pen, he stated he had no intention of enforcing it. That was a rejection of his presidential duties and a violation of his oath.

 But today, President Obama has taken the concept of discretion and so distorted it, and has taken the obligation of faithful enforcement and so rejected it, that his job as chief law enforcer has become one of incompetent madness or chief lawbreaker. Time after time, in areas as disparate as civil liberties, immigration, foreign affairs and health care, the president has demonstrated a propensity for rejecting his oath and doing damage to our fabric of liberty that cannot easily be undone by a successor.

 Item: He has permitted unconstitutional and unbridled spying on all Americans all the time, and he has dispatched his agents to lie and mislead the American people and their elected representatives in Congress about it. This has resulted in a federal culture in which the supposed servants of the people have become our permanent and intimate monitors and squealers on what they observe.

 Item: He has permitted illegal immigrants to remain here and continue to break the law, and he has instructed them on how to get away with it. His encouragement has resulted in the flood of tens of thousands of foreign unaccompanied children being pushed across our borders. This has resulted in culture shock to children now used as political pawns, the impairment of their lives and the imposition of grievous financial burdens upon local and state governments.

 Item: His agents fomented a revolution in Libya that resulted in the murder of that country’s leader, the killing of the U.S. ambassador and the evacuation of the U.S. embassy. His agents fomented a revolution in Ukraine that resulted in a Russian invasion, an active insurgency, sham elections and the killing of hundreds of innocent passengers flying on a commercial airliner.

 Item: He has dispatched CIA agents to fight undeclared and secret wars in Yemen and in Pakistan, and he has dispatched unmanned drones to kill innocents there. He has boasted that some secret reading of public positive law permits him to kill whomever he wishes, even Americans and their children.

 Item: His State Department has treated Hamas -- a gang of ruthless murderers whose stated purpose is the destruction of Israel -- as if it were a legitimate state deserving of diplomatic niceties, and this has encouraged Hamas to persist in attacking our only serious ally in the Middle East.

 Item: His Department of Veterans Affairs has so neglected patients in government hospitals that many of them died, and it even destroyed records to hide its misdeeds. His Internal Revenue Service has enforced the law more heavily against his political opponents than against his friends, and it has destroyed government computer records in order to hide its misdeeds.

 Item: He has relieved his friends of the burdens of timely compliance with Obamacare, and he has burdened his enemies with tortured interpretations of that law -- even interpretations that were rejected by the very Congress that enacted the law and interpretations that were invalidated by the Supreme Court.

 He has done all these things with a cool indifference, and he has threatened to continue to do so until the pressure builds on his political opponents to see things his way.

 The Framers could not have intended a president so devoid of fidelity to the rule of law that it is nearly impossible to distinguish between incompetence and lawlessness -- and I am not sure which is worse. Archbishop Fulton Sheen often said he’d prefer to deal with a smart devil than a stupid one.

 But the Framers did give us a remedy, and the remedy is not a frivolous lawsuit that the federal courts will no doubt reject as a political stunt. The remedy is removal from office. This is not to be undertaken lightly, as was the case when this remedy was last used. But it is the remaining constitutional means to save the freedoms the Constitution was intended to guarantee.

 The choice is between two more years of government by decree or two years of prosecution. It is a choice the president has imposed upon us all.

 *Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel. Judge Napolitano has written seven books on the U.S. Constitution. 

House Proposes Border Bill, But Is It Sensible?

*Thomas Warns

House Speaker John Boehner (R-OH).

House Speaker John Boehner (R-OH).

Yesterday, House Speaker John Boehner introduced a $659 million immigration bill in the House. The bill is an attempt to address the humanitarian and national security crisis occurring at the southern border, but so far it has been received with mixed press. Is it a reasonable bill?

Let’s start with the raw statistics. The bill would provide $405 million to the Border Patrol and Immigration and Customs Enforcement and another $197 million to the Department of Health and Human Services to care for children in U.S. custody, with the remaining amounts going towards hiring more judges for deportation hearings and transportation to reunite families in their home countries. It would also tweak a 2008 law, and allow unaccompanied minors from Central America to be deported more quickly.

One criticism that bill has received is that it is not even close to the amount that the President requested. President Obama initially requested $3.7 billion, while the Democratic Senate introduced a bill with $2.7 billion in funding. There is a reasonable explanation for this, however; the Republican bill only funds the border operations through the end of the fiscal year (which ends September 30th), while the President wanted funding for the next fifteen months.

The House’s funding amount is prudent, considering how fluid the circumstances are along the border. No one knows how long this crisis will last, or how serious it will become. In fifteen months, the flow of minors into this country might ebb to a trickle, or explode into a deluge; in short, no one knows. A lot of that will depend on whether or not President Obama attempts to use his executive powers; some have suggested that he plans to grant temporary work permits to illegal immigrants already in the country, which will undoubtedly cause more people to come to America. It should be noted, however, that the President himself has not tipped his hand about a potential executive order, and that many of the allegations that amnesty is coming soon have been advanced by Republicans looking to hurt the Democrats politically (this is in much the same vein as the fantasy that Republicans are trying to impeach President Obama, which has almost exclusively been advanced by Democrats in order to aid fundraising).

The House bill also deserves praise because it does not require new funding, but rather moves money primarily from FEMA in order to pay it. The Senate has responded by beefing up its own bill to $3.5 billion – it added funding for fighting wildfires in the west as well as money for Israel. While that cattle-trading is common place in Congress, it will not be enough to appease Senate Republicans, who also want to change the 2008 law which slows the deportation process down for illegal immigrants. President Obama has also asked for that change, and the Republican bill sensibly gives it to him, leaving only Senate Democrats in opposition. It seems that House Speaker Boehner is at least trying to find common ground on substantive problems, rather than trying to slide a greased-up pork-barrel bill through the Senate.

As conditions in shelters grow worse, children either need better care or to be sent home.

As conditions in shelters grow worse, children either need better care or to be sent home.

For practical reasons as well, the House bill is virtuous. Congress adjourns on Thursday for their August recess, making it imperative that some sort of resolution be reached before then. If nothing is done before the recess, it is likely that more children will suffer and the country will remain vulnerable to the small but significant minority of illegal immigrants who enter the country with serious illnesses or criminal records. A short term, low cost fix which grants the President more flexibility in deportations is more likely to pass through Congress and receive the President’s signature under a compressed time frame than a much larger, more contentious bill. Yet despite this, Senate Majority Leader Harry Reid is trying to jam immigration reform into the House bill, which would be difficult to pass at all and utterly impossible to pass in two days.

If Senate Democrats are truly interested in addressing the humanitarian crisis along the border, they will vote in favor of the stopgap House bill, and get back to work in September on a longer-term solution. But what if they refuse, because it might look bad in November? What does that say about their agenda?

* Thomas Warns is a J.D. Candidate in the Class of 2015 at New York University, and the Editor-in-Chief for the N.Y.U. Journal of Law & Liberty.

What If Democracy Is a Fraud?

Judge Andrew P. Napolitano*



What if you were allowed to vote only because it didn’t make a difference? What if no matter how you voted the elites always got their way? What if the concept of one person/one vote was just a fiction created by the government to induce your compliance?

What if democracy as it has come to exist in America today is dangerous to personal freedom? What if our so-called democracy erodes the people’s understanding of natural rights and the reasons for government and instead turns political campaigns into beauty contests? What if American democracy allows the government to do anything it wants, as long as more people bother to show up at the voting booth to support the government than show up to say no?

What if the purpose of contemporary democracy has been to convince people that they could prosper not through the voluntary creation of wealth but through theft from others? What if the only moral way to acquire wealth is through voluntary economic activity? What if the government persuaded the people that they could acquire wealth through political activity? What if economic activity includes all the productive and peaceful things we voluntarily do? What if political activity includes all the parasitical and destructive things the government does? What if the government has never created wealth? What if everything the government owns it has stolen?

What if governments were originally established to protect people’s freedoms but always turn into political and imperialist enterprises that seek to expand their power, increase their territory and heighten their control of the population? What if the idea that we need a government to take care of us is a fiction perpetrated to increase the size of government? What if our strength as individuals and durability as a culture are contingent not on the strength of the government but on the amount of freedom we have from the government?

What if the fatal cocktail of big government and democracy ultimately produces dependency? What if so-called democratic government, once it grows to a certain size, begins to soften and weaken the people? What if big government destroys people’s motivations and democracy convinces them that the only motivation they need is to vote and go along with the results?

What if Congress isn’t actually as democratic as it appears? What if congressional elections don’t square with congressional legislation because the polls aren’t what counts, but what counts are the secret meetings that come after the voting? What if the monster Joe Stalin was right when he said the most powerful person in the world is the guy who counts the votes? What if the vote counting that really counts takes place in secret? What if that’s how we lost our republic?

What if the problem with democracy is that the majority thinks it can right any wrong, write any law, tax any event, regulate any behavior and acquire any thing it wants? What if the greatest tyrant in history lives among us? What if that tyrant always gets its way, no matter what the laws are or what the Constitution says? What if that tyrant is the majority of voters? What if the majority in a democracy recognizes no limits on its power?

What if the government misinforms voters so they will justify anything the government wants to do? What if the government bribes people with the money it prints? What if it gives entitlements to the poor and tax breaks to the middle class and bailouts to the rich just to keep everyone dependent on it? What if a vibrant republic requires not just the democratic process of voting, but also informed and engaged voters who understand first principles of human existence, including the divine origin and inalienable individual possession of natural rights?

What if we could free ourselves from the yoke of big government through a return to first principles? What if the establishment doesn’t want this? What if the government remains the same no matter who wins elections? What if we have only one political party -- the Big Government Party -- and it has a Democratic wing and a Republican wing? What if both wings want war and taxes and welfare and perpetual government growth, but offer only slightly different menus on how to achieve them? What if the Big Government Party enacted laws to make it impossible for meaningful political competition to thrive?

What if the late progressive Edmund S. Morgan was right when he said that government depends on make believe? What if our ancestors made believe that the king was divine? What if they made believe that he could do no wrong? What if they made believe that the voice of the king was the voice of God?

What if the government believes in make believe? What if it made believe that the people have a voice? What if it made believe that the representatives of the people are the people? What if it made believe that the governors are the servants of the people? What if it made believe that all men are created equal, or that they are not?

What if the government made believe that it is always right? What if it made believe that the majority can do no wrong? What if the tyranny of the majority is as destructive to human freedom as the tyranny of a madman? What if the government knows this?

What do we do about it?

*Andrew P. Napolitano, a former judge of the Superior Court of New Jersey, is the senior judicial analyst at Fox News Channel.

Obama's LGBT Blunder

Richard Epstein*



Earlier this week, President Barack Obama signed a much anticipated executive order that prohibits all government contractors from discriminating against their gay, lesbian, bisexual, or transgender employees. This anti-discrimination requirement will be set down in the contracts between the government and the contractors. After fierce lobbying from both sides, the President also decided that he would not exempt religious groups from this order. His order comes hard on the heels of the highly divisive Supreme Court’s decision in Burwell v. Hobby Lobby, where the Supreme Court, by a five-to-four vote, struck down the healthcare law’s contraceptive mandate under the Religious Freedom Restoration Act (RFRA).

The Government Goes Too Far

The President’s executive order creates a two-tier system whereby any firm that wants to do business with the United States government—and only those firms—must abide by the mandate; the Obama administration cannot impose the mandate by regulation on all businesses generally. But this raises a key normative question: should the government be able to impose by contract mandates on businesses that it could not impose on them by legislative action?

The popular acclaim that the President’s action has received from many gay rights activists should not be allowed to conceal the serious difficulties in this two-tier regime. No President should be allowed to do by executive order what he is unable to do by way of regulation, unless it can be shown to be essential for the operation of the government system, which is manifestly not the case here. Put otherwise, the prohibitions of RFRA should apply as much to executive orders as to regulations more generally, particularly on explosive subjects like religious freedom.

A great irony in this debate is how many people are defending the executive order: the president, they say, has greater degrees of freedom in imposing conditions by contract than he does in doing so by legislation. A common principle of contract law is that each party is the master of its own offer, and can therefore set the terms and conditions on which it is prepared to do business. The government in this sense is treated like just another person, entitled to impose whatever conditions it sees fit on its trading partners. The executive order that extends the reach of the anti-discrimination provision only extends the rule that is already in place for direct hiring by the United States. So why, the defenders ask, oppose the executive order?

This line of argument has serious intellectual difficulties. The United States government is not just another private party that should be allowed to do what it will with its resources. The United States raises revenues by taxation from all of its citizens, some of whom are passionately in favor of the executive order, and some of whom fiercely oppose it. It is not sufficient for the defenders of the new employment mandate to say that their tax dollars should not fund bigoted behaviors thinly veiled by dubious religious precedents. Nor, by the same token, is it sufficient for other taxpayers to insist that their tax dollars should not fund the activities of those whom they regard as activists bent on their destruction.  

It is therefore dangerous for the President to resolve this moral dispute in favor of the activists, just as it would be for a socially conservative president to come down the other way. In both cases the preferences of the dominant party become the norm, while those of its opponents are wholly disregarded. Funding now comes from all, but it is only spent on those groups in sync with the dominant political sentiment. All-or-nothing politics is a sure way to inflame political and social divisiveness. The President’s mandate is no more acceptable than one intended to implement the reverse goal of excluding gays and lesbians from firms that do business with the government. After all, if this is a raw political struggle, then why should one side, but not the other, be able to reap the harvests of war?

A Middle Way

 There is a better way, which reveals the proper place of the principle of neutrality in dealing with these explosive issues. The government should not take sides in these debates. Any individual, regardless of sexual preference or orientation should be eligible to apply for any government position, period. In dealing with public employees, members of rival political factions have to accept the foibles of their future coworkers, with whom they must work side by side. Neither side has the moral high ground from which it can exclude the other. Under this arrangement, the exact composition of the government workforce will then depend in the long run on the moral attitudes in society. As the case for non-discrimination based on sexual orientation gains traction, as it surely has, the mix of people in government employment should shift gradually in their direction—an approach that rightly puts both sides of the debate at risk of losing social support over time.

The same logic should apply to government contractors. All of these contracts should be opened up to all firms on equal terms. This position means that any firm that hires workers of all backgrounds is welcome to bid, and so to any group that has highly specialized employment requirements, including those firms that only hire gay, lesbian or transgendered workers, or those that hire co-religionists.

There are two advantages to this position. The first is that the government hiring decisions are now made exclusively on the basis of the quality and price of the goods and services supplied to the government. Every citizen, regardless of their religious or political views stands to gain from high-quality services supplied at the lowest possible cost. Any effort by government to exclude objectively qualified firms from bidding on government business imposes a financial cost borne by all in order to create gains reaped solely by the winning faction. The losers in this struggle lose both ways: they get a smaller share of a smaller pie.

The Racial Precedent

It is said in response that the issue of discrimination on the basis of sexual preference and sexual orientation is the same as discrimination on the basis of race, and that the President’s action here is little different from that which Lyndon Johnson took in 1965 under Executive Order 11246 whose key provision stated: "The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex or national origin.”

There are two general responses to this point. The first is that this executive order, at least in its original formulation, tracked the language of the Civil Rights Act of 1964. It did not seek to impose by contract that which could not be imposed by legislative regulation, as with the current executive order, whose legitimacy is therefore drawn into doubt. Second, in my minority view, Johnson’s executive order is fully appropriate even if Title VII of the 1964 Civil Rights Act were repealed today. The argument about freedom of contract articulated above has real traction for private firms working in competitive labor markets, whereas the target of Title VII of the 1964 Act were the trade unions that received monopoly power under the collective bargaining provisions of the National Labor Relations Act.

At this point, the most efficient solution does not impose any government mandates on private firms that hire in a competitive labor market. As I have long argued, anti-discrimination laws should be used in private markets only to counter monopoly positions in public utilities and transportation, or as a way to break down the intolerable abuses of a state-imposed segregation system. The more competitive the marketplace, the weaker the case for these laws.

The Dangers of Consensus

In response, some will argue that in dealing with the question of race, the overwhelming social consensus in favor of the law is the strongest reason for its continued adoption. But the point on consensus actually cuts in the opposite direction. If 90 percent of society thinks that certain forms of discrimination are out of bounds, they can operate just as they please even if the other 10 percent operates under different principles. Certainly, the extensive practice of affirmative action programs in labor markets (which are a sensible exception to any color-blind principle) can work well even if some fraction of firms sticks to the more traditional color-blind and sex-blind employment regimes. The outsiders in these labor cases do not engage in the threat or use of force that is capable of disrupting the lives of everyone else. Having a labor market where different firms cater to different subgroups avoids the sharp discontinuities that come with political action. It also opens up a greater array of opportunity for all persons in a world rid of the heavy compliance costs that always come with the enforcement of the next anti-discrimination rule.

The more modest view of government power also prevents dangerous extensions of executive orders and administrative regulations. Thus, should the President also issue an executive order that keeps out of national parks businesses that do not  hire gay and lesbian workers? Or an order that keeps these firms from participating in general job training programs? Just that position was suggested after the Boy Scouts’ victory in Boy Scouts of  America v. Dale when the Boy Scouts were allowed to exclude gay scouts from leadership positions. But all public facilities, from parks to roads, should be open to all groups whatever their private views may be. The great danger of the President’s position is that it represents a creeping expansion of power whose dangers are forgotten in the activists’ rush to judgment against those with whom they disagree. 

*Considered one of the most influential thinkers in legal academia, Richard Epstein is known for his research and writings on a broad range of constitutional, economic, historical, and philosophical subjects.