Pirates

Many games, books and movies have themes of good guys versus bad guys.  Pirates were the bad guys.  Why then are they often romanticized?  Why did Disney build a ride, and an E ticket one at that, honoring villainous pirates?  Could someone really be a "good man and a pirate" as Captain Jack Sparrow suggests in "Pirates of the Caribbean"? 

Peter Leeson, an economist at George Mason University, has written extensively about 18 century pirates.  In an article entitled, "In Defense of Pirates (The Old Time Ones)," (NPR, April 10, 2009) he reminds us why pirates are bad but continue to hold our interest.

All pirates are thugs, and the world would be better off without them. But not all pirates are equal. Unlike their Somali successors, early 18th century pirates, men like Blackbeard, "Black Bart" Roberts, and "Calico" Jack Rackam, weren't only thieves. They were also early experimenters with some of the modern world's most cherished values, such as liberty, democracy, and equality.

The 16th and 17th centuries saw an increase in exploration, colonization and trade.  Merchants did not man their ships; they hired a captain and a crew.  This organization created a principle-agent problem.  The captain and crew did not have incentives to care for the ship nor its cargo.  Merchants overcame this problem by selling or granting a captain shares in the ship.  Unfortunately for the crew, the captain then had incentives to impose harsh discipline, docked wages, and cut food rations.  It increased his profit.

Seaman came from the lowest socioeconomic elements of society, and were often abused by merchant captains.  Piracy was an alternative career choice that gave some protection from predation and a chance at wealth.  Pirates owned their ships and operated them as a floating stock company.  They behaved democratically as shared owners.

Pirates still needed captains to find prey and make decisions in battle.  Experience made them wary of predation by their captains, and they limited it using several techniques common in today's governments.  The first was to democratically elect captains.  Leeson observes ("An-arrgh-chy: The Law and Economics of Pirate Organizations, Journal of Political, vol. 115, no. 6, 2007),

...pirates could and did democratically elect their captains without problem. Since the pirates sailing a particular ship were both the principals and the agents, democracy did not threaten to lead to captains who served the agents at the principals’ expense. On the contrary, pirate democracy ensured that pirates got precisely the kind of captain they desired. Because pirates could popularly depose any captain who did not suit them and elect another in his place, pirate captains’ ability to prey on crew members was greatly constrained compared to that of merchant ship captains.

Pirates further limited the captains power through divided authority, much as we do with separation of powers in a modern democracy.

The primary “other officer” pirates “constituted” for this purpose was the quartermaster. The way this office worked is straightforward. Captains retained absolute authority in times of battle, enabling pirates to realize the benefits of autocratic control required for success in conflict.  However, pirate crews transferred power to allocate provisions, select and distribute loot (there was rarely room aboard pirate ships to take all they seized from a prize), and adjudicate crew member conflicts/administer discipline to the quartermaster, whom they democratically elected...

To limit abuse by the quartermaster, pirates instituted articles of agreement or constitutions defining the rights and punishments of crews. 

Articles of agreement required unanimous consent. Consequently, pirates democratically formed them in advance of launching pirating expeditions. “All [pirates] swore to ’em,” sometimes on a Bible or, for one pirate crew, “upon a Hatchet for want of a Bible.” The crew forged its articles alongside the election of a captain, quartermaster, and occasionally other smaller officers. Pirates sought agreement on their articles (ex ante “to prevent Disputes and Ranglings afterwards” (Johnson 1726–28, 342). In the event a pirate disagreed with their conditions, he was free to search elsewhere for more satisfactory terms.

Finally, pirate crews were often more racially tolerant than government operating contemporaneously.

Some historical pirates even embraced racial tolerance before their legitimate counterparts. England didn't abolish slavery until 1772. In the United States slavery persisted until 1865, and blacks didn't enjoy equal rights as citizens, politically or in the workplace, until even later than this. Some historical pirates, however, extended suffrage to their black crewmembers and subscribed to the practice of "equal pay for equal work," or rather, "equal pay for equal prey," in the early 1700s.

Democratic social innovations by pirates does not make them good guys, but it does make them interesting.  Leeson has interested me enough in pirates that I am placing his book, "The Invisible Hook," on my summer reading list.
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Torture: Marginal Costs and Marginal Benefits

I support the interrogation/torture of detainees if what I have read is correct.  By world standards, the methods we employed were relatively mild, and I believe that any foreign outrage is feigned.

My opinion is purely normative, but in my estimation, saving American lives was worth the marginal costs to Americans involved in these activities.  I do not believe that the marginal costs are trivial.  I have taken a few quotes from an officer who participated in torture during Argentina's dirty war reported by Andrew Grahm-Yool in "State of Fear," Eland, London & Hippocrene Books, New York.  Argentina is not the United States.  The torture was more severe and applied more generously to a larger range of people by less trained interrogators, but I believe there are enough parallels to make the quotes suggestive of marginal costs to those in service to the United States.

On motives, in which the quote suggests that interrogators lost human sympathies, perhaps due to cognitive dissonance. 

Don't give me that nonsense about human rights.  That is just a political slogan.  We were the real defenders of rights.  We fought for a way of life, for society without subversives...

On torture,

...I never tortured.  Torture is inflicting pain for personal pleasure.  I dealt punishment to my enemy, under orders from my superiors.  And if you want to know, we all get to the stage when it becomes a game; the subversive knows that.  You are playing to get things out of him.  Time is on your side, but you cannot give him time, because then he will gain on you as you begin to realise what you are doing.  I am working to break him as quickly as possible.  You feel sorry to cause pain, but you work quickly.  You don't look a his face, even when you put the prods in the mouth; you keep their eyes covered.  The secret is not to look at their eyes.  The other secret is do not draw blood.

On the interrogators,

The younger men seemed to be much, much harsher.  They were given authority over the subversives, and they made it power over life and death.

On the age of the interrogators,

[They were] very young.  Conscription age boys who had signed on as regulars, young corporals...They had to be stopped from giving punishment, because they would have left the investigators with nobody to question...The young are all extremists--in their ideals, their violence, their moods.  They don't know caution or care.

On the cost to the interrogators,

Once, when I went to the military hospital, the doctor said that the army had employed 150 psychologists in 1978 and 1979 to treat young officers who had operated against the subversives.  I don't know if it is true.

But when you are told something like that, there is always a root of truth in it.  The young officers had to be taken care of, because not all could be allowed to leave the service.  Some had to be promoted. 

David Rivkin and Lee Casey, who served in the Justice Department under George H.W. Bush, and were U.S. delegates to the U.N. Subcommission on the Promotion and Protection of Human Rights, write of the care that interrogators took to protect the long term health of detainees ("The Memos Prove We Didn't Torture," Wall Street Journal, April 20, 2009). 

The four memos on CIA interrogation released by the White House last week reveal a cautious and conservative Justice Department advising a CIA that cared deeply about staying within the law. Far from "green lighting" torture -- or cruel, inhuman or degrading treatment of detainees -- the memos detail the actual techniques used and the many measures taken to ensure that interrogations did not cause severe pain or degradation.

Interrogations were to be "continuously monitored" and "the interrogation team will stop the use of particular techniques or the interrogation altogether if the detainee's medical or psychological conditions indicates that the detainee might suffer significant physical or mental harm."

I believe that the careful monitoring was of greater benefit to the interrogators than the detainees in reducing the psychological costs of interrogation.
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Murtha's Airport and the Stimulus Debate

Over the course of his congressional career, John Murtha has funneled nearly $200 into the Johnstown-Cambria Co-Murtha Airport.  The airport has three flights per day.  The FAA has approved an $800,000 "shovel ready" project to repave a crosswind runway that's used as a backup to the main landing runway (Jim Acosta and Janet Rodriguez.  "Remote Murtha airport lands big bucks from Washington," CNNPolitics .com, April 23, 2009 or the video link). 

The project illustrates differences between economists supporting and opposing the stimulus.  Economists supporting the stimulus argue that even bad projects create jobs now and replace a vicious cycle of market psychology in which bad news feeds retrenchment which engenders more bad news with a virtuous cycle.  Economists who support the stimulus might support the project if it employs mostly idled resources.  Economists opposing the stimulus argue that the government's inherent inefficiency in selecting good investment projects, the deadweight loss from taxation, and the high percentage of employed resources imply that few new resources will be employed and any recovery will be weak because of the size and scope of wasted resources.  Good investment projects would employ idled resources and have good long run return on investment.  This project would not pass their scrutiny.

I believe that most economists see a need for airport expansion (Paul Joskow, Deregulation, AEI Event, February 10, 2009, Minutes 29:50-32:45.  The link provides a link to the audio of the lecture).  The lack of airport expansion, particularly the building of new hubs, is a factor limiting the success of Carter era price deregulation.  I would guess that most economists would not like the rate of return on the Murtha airport project.  As of March 2009, Pennsylvania's unemployment rate was 7.8%. 

Brad DeLong who supports the stimulus and Kevin Murphy who opposes it are typical of the debate.  DeLong failrly summarizes Kevin Murphy's arguments against it and his support for it ("Best Anti-Stimulus Argument: from Kevin Murphy, Brad DeLong's Semi-Daily Journal.)

I think he [Murphy] overstates the deadweight loss effect and is working with the wrong conception of “efficiency” for these purposes when he claims that government is inefficient, so the odds of a stimulus being successful therefore aren’t as bad as he indicates. And this doesn’t change the fact that I haven’t heard any better ideas than doing a big stimulus. But this is a sobering reminder that a big stimulus doesn’t guarantee success—very hard work needs to be done on making sure that stimulus funds target genuinely idle resources rather than diverting non-idle resources while leaving the idle ones as idle as ever.

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Cap-and-Trade is a Tax

Representative John Dingell, questioning former vice president, Al Gore said,

"Nobody in this country realizes that cap-and-trade is a tax -- and it's a great big one," Rep. John Dingell (D-Michigan) said Friday.

Dingell compares the efficiency of a cap-and-trade tax to an energy tax and finds it wanting.  He should invite Greg Mankiw to provide testimony to the House and consider joining the Pigou Club.

Al Gore favors both taxes.
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Labor Unrest in France

Do we really want more unions?  (HT Drudge) From TIMESONLINE, "EDF strikers cut power to French homes,"

At an electricity substation on a bleak industrial estate north of Paris a masked union militant is preparing to deprive a neighbourhood of power.

His colleague is outside, dragging nervously on a roll-up cigarette while keeping a lookout for police or security guards. “Get a move on,” he says. “And then let’s get out of here.”

A switch is pulled down, the door of the sabotaged transformer is locked and the two activists — employees of EDF, the French state electricity supplier — drive off.

In their wake hundreds of houses and a handful of businesses in Montigny-lès-Cormeilles are left without electricity for much of the morning.

It was the second time in a week that blackouts had hit the Paris region as striking gas and electricity workers adopted radical tactics to support their call for a 10 per cent pay rise and an end to outsourcing of jobs.

They are denounced as industrial saboteurs by the Government and face disciplinary action and prosecution, but say they are determined to press ahead with what they portray as a struggle against free-market forces.

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My Earth Day Speech

I lived in a community that kicked off a campaign to stop teen drinking with a cocktail party.  The teens saw the double standard.  (HT Drudge) Mark Knoller hit the just the right tone in "Obama Earth Day Flights Burned More Than 9,000 Gallons Of Fuel," CBS NEWS, April 24, 2009. 

It happens every time a president leaves town to make an Earth Day speech. Reporters scramble to point out how much fuel was expended so the President could talk about conserving energy and using alternative fuels.

President Obama could have saved at least 9,116 gallons of fuel by giving his speech at the White House – but no wind turbines are manufactured here.

President Obama called for a new era of energy exploration promoting his administration's plan to develop and promote renewable and alternative fuels.  I wish the president would have delivered a different speech.  Overlooking a national park, it would begin, 

Americans remain grateful to leaders like Theodore Roosevelt for preserving land as parks, creating a refuge for flora and fauna.  As a nation, we have made great progress lowering pollution levels and providing the public goods of clean air and water.  There is room for progress.  In attempting to protect our forests from fire, we have allowed dense underbrush to accumulate, making fires when they occur larger and more dangerous.  I am announcing a public program to clear our forests of the accumulated underbrush, restoring them to a more natural order.  Once achieved, forest fires will be smaller and less dangerous.  They will be allowed to burn unless endangering human life.

Our economy is built on the strength, creativity and efficiency of Americans working through markets.  Problems of rising energy prices will largely be resolved in the private sector.  The government will assist by funding basic research and the legal and institutional framework that recognizes that increases in our welfare have been and will be linked to increasing energy consumption, but no more. 

Enjoy the beauty of the country that God has placed under our stewardship and be wise stewards so that future generations will enjoy an even cleaner and more beautiful environment. 

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Fidel Castro Interprets Raul Castro's Remarks

Raul Castro responded to President Obama's modest policy changes that lift some restrictions on Cuban-Americans visiting families and remittances (Fabian Cambero.  "Cuba ready for U.S. talks on rights, prisoners," Reuters UK, April 17, 2009.

We have sent messages to the U.S. government in private and in public that we are willing to discuss everything, whenever they want.  Human rights, press freedom, political prisoners, everything, everything, everything they want to talk about.

Fidel Castro made similar overtures in a written response in a Cuban newspaper to a letter signed by 12 senior retired military officers under the direction of the New America Foundation and the National Security Network ("Fidel Castro: Soldiers with Correct Opinions," Invasor.cu, April 16, 2009 )("Cuba's Raul Castro: Let's talk," Foreign Policy, April 17, 2009).

...- the debate of ideas; we believe in our convictions and with them we have known how to defend and continue defending our homeland.

A group of high-ranking retired U.S. military were urging President Barack Obama to ‘support and sign’ a law to end the prohibitions on travel to Cuba by all U.S. citizens, arguing that the embargo against the island is of no use for political purposes or for Washington’s security.

Secretary of State Hillary Clinton interpreted the remarks in a manner supportive of the administrations goals, and responded positively to the Castro's remarks ("Clinton Receptive to Castro Overture to Discuss 'Everything', Foxnews.com, April 17, 2009).

We have seen Raul Castro's comments and we welcome this overture. We are taking a very serious look at it, and we will consider how we intend to respond.  We are continuing to look for productive ways forward, because we view the present policy as having failed. Engagement is a useful tool to advance our national interests.

Parenthetically, I would not have referred to past U.S. policy that was maintained through many administrations, including her husband's, as failed.  Although she is technically correct, it did not bring down the communist regime, it sounds like she is blaming the U.S. for Cuba's problems.  Cuba's biggest problem is its brutal, nasty communist government.  Instead I would have said that the policy needed to be amended with changing circumstances.  I imagine that the policy objective remains unchanged, to see Cuba evolve into a democratic, market oriented society with both political and economic freedom. 

Fidel Castro knows the dangers of opening trade and other relationships with the U.S.  The regime seems to want someone to blame for its failures more than it wants to improve the lives of its citizens through more interactions with the U.S.  As President Obama was leaving the Summit of the Americas, he asked Cuba to free political prisoners and reduce taxes on U.S. remittances.  Castro responded (Fidel Castro.  "Obama and the blockade," Digital Granma International, April 22, 2009)(AP.  "Fidel Castro says Obama misinterpreted his brother's remarks" Los Angeles Times, April 22, 2009).

Without any doubt, the president misinterpreted Raúl’s statement.

On affirming that Cuba is prepared to discuss any issue with the president of the United States, the president of Cuba stated that he has no fear of approaching any issue whatsoever. That is a demonstration of courage and confidence in the principles of the Revolution.

The Obama administration should be even more dynamic in offering to improve relations with Cuba; we should end the trade blockade.  The more we offer, the less they will take, and the more apparent it will become that Cuba's failed economy is a product of its own policy and not the U.S. blockade.  This is the worst outcome that we would achieve.  If the Castro regime accepted trade it would secure friends within the government of Cuba and between citizens in both countries.  Trade would result in a larger comparison between the two country's laws and institutions.  It is a comparison that we cannot fail to win.  Trade, even the threat of trade, and the Castro's would view it as a threat, would weaken the communist regime. 
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