There are certain books in life that upon reading them you think to yourself “I feel not only smarter but this is exactly the book I would like to have written.”

And that is in summation what Animal Spirits with Chinese Characteristics embodies.  It is written by nine-year China veteran Mark DeWeaver, now the hedge fund manager of Quantrarian Capital Management in Washington DC.  In addition to having worked as a broker and financial analyst in Guangdong (the most populous province on the mainland) and Hong Kong, DeWeaver received his PhD in economics from the University of Hawaii.  The title alludes to the ‘animal spirits’ invoked seventy-five years ago by John Maynard Keynes to describe how emotions influence human behaviors.  The other part of the title comes from Deng Xiaoping’s “reform and opening up” (改革开放) liberalization process that began in 1978 – what Deng called “socialism with Chinese characteristics.”

One of the shortcomings of many China-related non-fiction books today is that they generally try to discuss something that is impossible to penetrate: how and why the Standing Committee makes decisions.  Volumes have been and will continue to be written about the purported inner workings of Zhongnanhai (中南海), the Party headquarters in Beijing, yet this amounts to little more than the modern-day equivalent of Kremlinology.  Or as the popular and fitting English expression germanely (sic) describes this seemingly futile divination activity: trying to read the tea leaves in China (tasseography).

Animal Spirits is nothing like these quickly outdated books and will arguably be timeless in part because of its methodological approach.  While he uses dozens of empirical examples to illustrate the boom-bust cycle within China, DeWeaver’s epistemology is unique in that it utilizes the deductive strength of the a priorism of the Austrian School.  The Austrian School is perhaps best known by one of its thought-leaders, Ludwig von Mises who wrote Economic Calculation in the Socialist Commonwealth nearly a century ago.  In it, Mises explains that central planners, within a closed economy cannot rationally calculate or allocate resources in an efficient manner; that without organic prices an economy will stall and even deindustrialize.  And since prices only arise from market interaction between participants (entrepreneurs, investors, suppliers) we as observers can a priori reject central planner claims to theoretical success without having to actually implement them to see if they could indeed work.  That is to say, central planning a priori cannot work because of the calculation problem.   Consequently, dozens of books have been written about how and why both the Eastern Bloc and Soviet Union collapsed largely due to this inability to rationally calculate, yet very little has ever been written about the Chinese experiment especially from the 1949-1979 time period.

The sole focus of the book is an analysis of both the economic and financial systems within mainland China since the founding of the PRC in 1949.  And despite the aforementioned Sino-centric tomes being published at a steady clip, surprisingly very little has been written about this financial area; and that is our loss.  In fact, the English-based scholarly corpus regarding the Chinese business cycle is almost non-existent.  The reason is simple: you need to be a trained economist, fluent in Chinese and capable of rigorous analysis.  Just as there were only a handful of potential scholars capable of writing The Last Knight of Liberalism (e.g., need to be German-speaking, trained economist, familiar with historical documents) so too are there few capable of pouring through both the modern Chinese financial press but also to look through the historical record.

And that is where Animal Spirits shines.

For example, one of the assumptions is that nationally developed central plans promoted in Beijing – Five Year Plans (中国五年计划) – are followed and executed in a classical top-down fashion.  That there is a monolithic entity capable of devising and controlling cogs and chess pieces down to the county level.  Yet, in Chapter 2 DeWeaver notes that “[i]n the Chinese case, central planning has not even been carried out consistently.”

Specifically,

In China the problems with central planning were exacerbated by the devolution of investment decision making authority to lower levels of government.  This made economic coordination even more difficult and produced powerful incentives for overinvestment.  Ironically, some of the very instabilities the revolution was supposed to eliminate became more extreme.  Transferring ownership of the means of production to the state resulted not in a new age of rational resource allocation, but rather in an exaggerated version of the capitalist cycle.

For instance, in areas like steel, cement, coal and other commodities, there are state-owned enterprises that are championed by local governments.  In the case of steel production, as part of the Great Leap Forward, each county and locality was encouraged to smelt ore and scrap ingots to produce metals based on mandated quotas at a variety of administrative levels.  The end result was denuded forests (for use as a smelting energy source) and what is now termed as ‘oversupply.’  Since all localities were smelting irrespective of profit or loss, enormous output took place and continues to take place – China currently produces and consumes about half of the world’s steel.

 And after decades of championing these local steel mills, despite decisions at a national level to consolidate or in some cases to allow market forces to bankrupt inefficient mills, local policy makers continue subsidizing them due largely to the perceived integral role the mill has in the community (e.g., jobs).  While allowing them to close and consolidate would bring volume efficiencies in terms of economies of scale, from a local policy maker point-of-view there are a number of consequences and side effects that they would rather not deal with.  As a result, provincialism is rampant across the country – there is no unified harmonized market like there is in most of Europe or North America, making it prohibitively costly and time consuming for both foreign and domestic businesses to expand operations across the country.

 Or as DeWeaver aptly notes:

 The emphasis on regional self sufficiency led inevitably to local protectionism.  Local governments came to be evaluated on the extent to which they could independently produce various categories of products or even generate surpluses for “export to other localities” (Donnithorne, 1972, 610).  Protecting markets for local light industry was also desirable because high retail prices were often necessary in order to subsidize inefficient small-scale heavy industry (616).  Thus, in 1970 the Changchun Number One Department Store “exclusively” sold “light industry products” made in Jilin Province (Changchun being the provincial capital).  Shanghai and Tianjin “claimed record shipments of their own products to other parts of the country” (611).  Hubei Province even had a program to grow all its own sugar (609).

Thus, China developed into a “customs union but not a common market,” with “a common barrier against the outside world” but without “free trade within its national boundaries” (618-619).  In the absence of either markets or effective central planning, the economy fragmented into “a myriad of small discrete units” (605) while the ideology of self-sufficiency became an excuse for local-level mercantilism.

And as noted above, some of much of this provincialism continues today in markets such as tobacco, Chinese wine (baijiu) and even in areas of skilled human labor.  For example, nearly every semester a number of my students will travel outside of the college or school to attend job fairs in neighboring regions.  There is always at least one or two that come back frustrated and focused because they have been told that the job fair is only open for people from that province.  In fact, one of my expat friends has a wife from Anhui who traveled to Nanjing to attend a fair and was told “no outsiders.”  And when I lived in Guangdong (Canton) a number of Chinese friends from other regions of the mainland explained that they faced various levels of discrimination due to being an “outsider” (e.g., speaking Putonghua instead of Cantonese).

Booms and busts

Another epistemological strength of the Austrian School is its inherent deductive capability to predict and asses the consequences of certain economic policies.  In particular the boom-bust cycle (or business cycle) describes the relative scarcity of credit in a financial system.  For example, if credit – which is typically managed by central banks and central planners – is loosened and made “cheaper” (e.g., subsidized), activities that were previously cost prohibitive now become relatively easier to finance.  Yet when the credit tap is proverbially tightened, many of these same unsustainable and unprofitable ventures go bankrupt as part of the market purge known as a “bust.”

And in China, economic laws are as immutable as in the rest of the world, as DeWeaver explains:

Central planning never worked as advertised in any of the countries where it was tried.  Even under ideal conditions it would never have been possible for central planners to identify optimal allocations of scarce resources.  It is unlikely that any such allocations could be realized in any case.  With decision makers’ incentives skewed by expansion drive and soft budget constraints, it is probably inevitable that socialist economic management is driven primarily by political considerations.  Investment booms and busts have been the result.

In the Chinese case, these problems were compounded during the command economy era by attempts to limit the role of central planning itself.  With Chairman Mao’s great principle of self reliance as the watchword, lower-level authorities enjoyed a degree of autonomy that made it practically impossible for the central government to coordinate economic development.  Even the Third Front, where many of the projects were national priorities, was not immune.  The result was a pattern of decentralized boom followed by centrally imposed bust.

In an inversion of Keynes’ assertion, the Chinese experience shows that “the duty of ordering the current volume of investment” cannot safely be left solely in public hands.  Government entities are, if anything, even more at risk of possession by animal spirits than private-sector companies.  They almost invariably tend to prioritize ideological or political considerations over cost-benefit calculations.

Yet as any China-watcher can attest, while these boom-bust cycles still continue, they have changed in nature.  Instead of having wild swings in agricultural productivity (due to credit to specific farms or agricultural segments), as China has developed over the past three decades, the booms occur in other areas.

For example, large portions of the manufacturing sector (e.g., textiles) that focus on exports receive perks and subsidies from nearly all levels of government, creating an unsurprising boom in production:

In each case, the booms were driven primarily by local governments while the busts, as had generally been the case ever since 1949, were brought about by central government policy.  At the same time, as product markets were introduced and the economy gradually became internationalized, inflation and trade deficits began to replace agricultural shortfalls as the primary constraints on investment.  These problems became less severe as high rates of accumulation along with productivity growth resulting from the economic reforms led to excess capacity.  This in turn generated both disinflation and a steady improvement in the balance of trade.

This is not to say that private companies are not guilty of waste, inefficiencies or miscalculation.  For example, in the US 56% of all start-ups fail within the first 4 years.  Each week the business press highlights both successes and poor investments made by entrepreneurs.  Three notable misallocation examples that come to mind are the Itanium project by Intel which was supposed to replace the x86 line of CPUs ten years ago, yet despite billions in investment it has gained negligible traction or marketshare.  In April 1999 Mark Cuban (now owner of the Dallas Mavericks) sold his internet company, Broadcast.com to Yahoo for $5.7 billion in stock.  The site fizzled and no longer exists.  And in November 2012 HP took a $8.8 billion write-down on the value of a company (Autonomy) that it had purchased in 2011 due to overstated revenue by Autonomy’s management team.

Yet as DeWeaver explains in Chapter 8, under a market-based economy one of the advantages is that ‘creative destruction’ (originally described by another Austrian, Joseph Schumpeter) the process of purging unproductive or misallocated assets can not only take place, but also take place at a faster pace than it would in a command economy of perpetual bailouts.  For example, at the turn of the 20^th century, the horse-and-buggy industry employed tens of thousands of laborers in the West.  In 1900, the US industry alone employed 109,000 carriage and harness makers.  And with the advent of the automobile these workers were effectively handed a collective pink slip, yet many of these laborers were reabsorbed back into the overall economy remaining a footnote in history books.  Yet in China, bankruptcy is warded off through the aid of patronage networks:

 This state of affairs is unlikely to be preferable to the “creative destruction” that takes place in a private enterprise economy.  Political competition in China is not normally rooted in economic issues.  While power struggles like the one that followed the Sixteenth Party Congress put many investors out of business, the threat of bankruptcy creates much stronger incentives to avoid overinvestment.  When the CCDI is the disciplining force, staying on the right side in factional struggles will be more important than optimizing resource use.  Investors with the strongest patrons will not necessarily be those with the best projects from a social welfare point of view.

Economic domination

Despite three decades of reform and privatization, an estimated 110-150,000 state-owned enterprises still exist in China contributing to roughly 62% of the GDP.  And at one point prior to Deng’s reforms that number was in the 90th percentile, in fact in 1995 there were 1.2 million SOEs.  Yet arguably a level of 100% never occurred even during the height of the Great Leap Forward as it would have meant every economic producing activity including human action itself would be owned by the state (e.g., slavery), something that has not legally occurred since just before the Qing dynasty collapsed (e.g., as Marx defined in Das Kapital, in a socialist system the means of production are in the hands of the state).  Consequently, these reforms illustrate the productive power of market forces and coordination, as the GDP of China increased from $10 billion in 1978 to over $7 trillion in 2012.

Yet because much of the economy is still dominated and controlled by the state, most decisions are left to local officials and policy makers (e.g., the vast majority of SOEs are owned and operated at the  local level).  However, any person in this artificial position – irrespective of culture, education or locality, will be left with little more knowledge to rationally calculate than the next.  The reason why is what DeWeaver weaves throughout the book, it is a case of the Hayekian “local knowledge problem.”  (Frederick Hayek was another Austrian economist and contemporary of Schumpeter and Mises.)  What this means is that because all information is currently distributed among individuals spread across any superficially defined region, there will always be some information and data missing from the datasets collected by central planners (Leonard Read illustrates this in “I, Pencil”).  The only conceivable solution to this knowledge problem and one that planners have been trying for a century to accomplish is to create an omniscient computer system capable of total awareness of all information at all times, simultaneously.

However even in the event of having this knowledge, assuming that such a machine could be built, planners still are left with the calculation problem: they may have every datum imaginable, yet they still do not know what actions are profitable or which activities may end in bankruptcy.  And thus any action they decide to make, while seemingly educated and ‘scientific’ is in fact arbitrary.  In contrast, the only planners per se of market-based economies are entrepreneurs who fundamentally only need to collect a single data point: prices (e.g., once a price is known and discovered rational economic coordination can take place).  In doing so they can rationally allocate resources and conduct business transactions or after doing market research decide simply not consume capital at all; preferring to forgo capital consumption today by investing in higher-order goods (e.g., factories) that require long-term periods of illiquidity (yet offer higher returns on investment).  This last point is called capital ‘roundaboutness’ (e.g., the time preference usage of capital) and originally comes from another Austrian economist, Eugene Böhm-Bawerk, the instructor of Mises and Schumpter (Hayek studied under Friedrich von Wieser the brother-in-law of Böhm-Bawerk).

DeWeaver also touches on a tangential issue, one that Mises and other 20^th century economists wryly explained: that central planners in command economies need to continuously collect reams upon reams of statistical data to accomplish an inherently futile task – productively and efficiently coordinate economic activity as noted above.   There is an old economic joke used during the Cold War noting that the Soviets would absorb and expand to cover the entire globe, except New Zealand.  New Zealand would be left alone so that market activities would create prices, prices which Soviet planners could then input into their models and equations.  A similar story comes from economist Gordon Tullock who visited Gosplan (the top planning administration in the Soviet Union) and discovered that planners were using an old Sears Roebuck catalogue to price their wares.  But the inherent problem with their approach (whether the story is true or not) is that all such prices reflect the local inputs that created them; thus the Sears prices are only relevant to the US and do not reflect the local conditions, the local inputs in the Soviet Union.  Or as Bruce Barton once quipped, “the easiest and most effective way to fight the Cold War would be simply to swamp the USSR in Sears catalogs.”

And Chinese planners, as educated and enlightened as they may be, are fundamentally faced with similar calculation constraints.  Compounding this issue is that local officials are motivated to maximize GDP growth irrespective of sustainability or profitability and also have ‘soft budget constraints.’  ‘Soft budget constraints’ is an economic term coined by János Kornai, a Hungarian economist that DeWeaver cites several times throughout.  Among his other academic contributions Kornai explained that the planners of command economies in the Eastern Bloc had created chronic ‘shortage economies’ through the pricing mechanism.  That in retrospect, the relatively low prices set by planners incentivized increased consumption by consumers and thus vast amounts products – both consumer and producer goods – were continuously in short supply.  In other words, when you intentionally or unintentionally subsidize an activity, demand may eventually outstrip the supply of it (e.g., lower prices send a signal to consume rather than save).  In the case of all the Eastern Bloc, the Soviets and even Chinese experiments with artificially price fixing the end results are long queues that are now immortalized in iconic black-and-white pictures.

Booms and busts

And because each county and each province is actually overinvesting (or malinvesting) in their SOEs, this gives rise to collective investment booms in a variety of market segments.  While the traditional boom-bust cycle scholarship investigates the causality of interest rates relative to monetary and credit expansion (there is also a corresponding component in China), what DeWeaver illustrates in each chapter is how central planners and policy makers at each administrative level spur unsustainable booms based on a plethora of plans including to meet GDP quotas or to fulfill a part of the overall Five Year plan.  For instance, these booms as noted above can take place in what Lenin termed the “Commanding Heights” (e.g., heavy industries) or in other areas such as infrastructure development like high speed railroads, highways, stadiums and airports.  For example, in Chapter 9 DeWeaver cites more than a handful of such projects including:

Consider the city of Fuyang in Northeastern Anhui Province, for example.  Located in a relatively remote location in one of China’s poorer interior provinces, the city originally had only a small landing field for flights to Hefei, the provincial capital.  In the 1990s, the local government decided to “raise the city’s profile” by building an international airport.  The original airport’s 400 meter runway was expanded to 2,400 meters (long enough for commercial flights to most Asian destinations) and a 7,200 square meter terminal and other amenities were built at a total cost of 320 million yuan (Wang, 2002).

In 2004, after being open only a year, the new facility had to be closed because there was not enough traffic to keep it operating.  While it was finally reopened in 2008, as of the beginning of 2011 its website showed only three flights a day.

When I taught in Anhui last year I asked several students from the area if they had ever used the airport.  They said it was more practical to use the large train station because the airport only had flights to just a couple of cities (Beijing and Shanghai) during the day.  While there is potential growth due to the population size (Fuyang itself is either the 1^st or 2^nd largest county in Anhui depending on which areas are included), this represents an unproductive asset that would probably not have been built in this location or time frame if left to market forces.

Is this an isolated incident and just a rare exception?  No.  According to the Financial Times, in 2010, three fourths of all airports in China lost money.  In 2011, of the 180 civil airports in operation, more than 70% lost money.  In fact, based on research from Li Xiaojin, an airport in China needs to handle 1 million passengers a year in order to turn a profit.  Yet according to his estimates, 80% of airports do not hit this mark.  And according to the Civil Aviation Administration of China (CAAC), these losses last year amounted to more than $314 million.

Reimposing economic rationality in China historically requires central government intervention because of the disconnected incentives at the local level (i.e., biting the hand that feeds you), which consequently leads to purges and busts.  Thus the Chinese investment cycle is entirely different from the cycles described in conventional business-cycle theory.  It is not driven by mistakes or miscalculations on the part of private-sector investors because their role is substantially diminutive (representing roughly 1/3 of GDP).  It also does not really have anything to do with money creation by the central bank although this can exacerbate the systemic issues as state mandated lending quotas are excised through state-owned banks.  It is instead essentially a continuation of the same investment cycle China had during the command economy period.

Conclusion

This is not to say that the Chinese growth story is over, that it will collapse and we will have to find a new labor source to make our athletic shoes and smartphones.  Rather if anything DeWeaver’s manuscript illustrates that despite what the market has ‘giveth’ central planning inadvertently (axiomatically) ’taketh’ away.  China will most assuredly endure either way, yet for perhaps the first time the English-speaking world now has a usable corpus to use and later stand on (e.g., nanos gigantum humeris insidentes) in expanding the financial and economic scholarship of the Middle Kingdom.

[Note: Animal Spirits is available starting December 24, 2012]

See also: TLS interview with Mark DeWeaver  and an excerpt from Chapter 1

Book review of The War on Drugs is a War on Freedom by Laurence Vance. Vance Publications, 2012. Orlando, FL. $9.95 at Amazon.com. Cross-posted from LibertarianChristians.com.

To many newcomers to libertarian ideas – especially Christians – it is not always perfectly clear why libertarians oppose the War on Drugs so strenuously. Some Christians even think that the only reason libertarians oppose government prohibition is so that they can get high legally. Nothing could be further from the truth. Simply put, we despise government prohibition because it is a power no government should have. Moreover, the War on Drugs is an incredible example of precisely how a government usurps liberty, destroys lives, and consolidates power unto itself. This short book by Dr. Laurence Vance, writer at LCC, LewRockwell.com, Mises.org, and the Future of Freedom Foundation, explains in great detail why everyone should oppose the War on Drugs .

Vance begins the introduction by giving his purpose in collecting these essays into book form:

This is not a book about the benefits of drugs; this is a book about the benefits of freedom. I neither use illegal drugs nor recommend their use to anyone else. I am even skeptical about the health benefits of most legal drugs.

So why this book? Because I believe in freedom. I believe in individual liberty, private property, personal responsibility, a free market, a free society, and a government as absolutely limited as possible.

The book then contains 19 essays, written over the past 4 years, that tackle the War on Drugs from a variety of angles. A few common themes resonate throughout the book:

1. The War on Drugs is unconstitutional. You would think that “conservatives” who support the United States Constitution would readily admit when the Federal government has overstepped its bounds, but such is rarely the case. Still, the Feds do not follow their own rules, and we should point this out whenever possible. Substance prohibition has never been constitutional.

2. The War on Drugs is a total failure. It has clogged the judicial system and incarcerated completely innocent people, instigated worldwide violence, corrupted law enforcement, eroded civil liberties, and destroyed financial privacy. Additionally, it hasn’t even been able to prevent drugs from getting into prisons much less the general population. By any standard of “helping” anyone, the War on Drugs has completely failed. To me, those in jail for possession of illegal drugs – assuming they have not committed a violent act – are prisoners of war and deserve to be liberated immediately.

3. Drug abuse is a health issue, not a legal issue. If you oppose government intrusion into health care, then there is no reason at all to support the War on Drugs. It is not the government’s business to dictate health issues to you.

4. The War on Drugs is a war on the ideals of liberty and a free society. Actions that are not aggressive in nature have no business being prohibited by government. Vices are not crimes, and it is not the purpose of government to monitor the behavior of citizens like a nanny! The War on Drugs is a perfect example of why government intrusion into people’s lives does nothing but harm. In order to ward off “vices” like illicit drugs, the government must continuously undermine liberty.

Vance even has an essay for why Christians should oppose the War on Drugs. Yes, Christians are free to consider drug abuse a great evil, but such evil should not be compounded by a drug war that is an even greater evil. Vance argues that Christians are both inconsistent and immoral for calling upon the state to punish non-crimes:

It is not the purpose of Christianity to use force or the threat of force to keep people from sinning. Christians who are quick to criticize Islamic countries for prescribing and proscribing all manner of behavior are very inconsistent when the support the same thing [in the United States]. A Christian theocracy is just as unscriptural as an Islamic theocracy.

Now more than ever we Christians ought to expose the War on Drugs for what it is: a War on Freedom. Laurence Vance concisely brings you a wealth of information to educate you on the issues, and I highly recommend this book to any believer anywhere.

Interested in learning more? Check out The War on Drugs is a War on Freedom at Amazon.com.

Last year saw the release of two books on the U.S. courts’ history of (not) protecting the liberty of contract: David Bernstein’s Rehabilitating Lochner and David N. Mayer’s Liberty of Contract: Rediscovering a Lost Constitutional Right.

My review of Bernstein’s book appeared in the Winter 2012 Independent Review; my review of Mayer’s book has just been published in The Freeman.

Which book is better? I couldn’t say. Both cover a lot of the same ground, and both are well-done. (Oddly, both were published at about the same time, and both appear to have been sponsored by the Cato Institute, though Bernstein’s book was published by the University of Chicago Press.) I recommend either or — if you really want to be an expert on all facets of New York v. Lochner and the courts’ inconsistent protection of economic liberty — both.

Here’s an excerpt from my Liberty of Contract review:

The U.S. Supreme Court has no coherent ideas about—or real respect for—individual rights. It generally allows governments to do whatever they want, with limited exceptions for a handful of rights it has deemed “fundamental,” such as the right to free speech (in some areas) and the right to sexual privacy (in some respects). Other rights, such as the right to economic liberty, receive almost no protection at all.

Why so much protection for some rights and so little for others? Because the Court has arbitrarily said so.

Libertarians, of course, think differently about rights. Libertarians think that our rights exist independently of government, and that if government has any legitimate purpose at all, it is to protect those preexisting rights.

Libertarians also think that all our rights are really property rights. We each own ourselves, and from that follows a right to own private property that we acquire through voluntary exchanges with others. Other rights, such as the right to free speech, derive from our right to use our own property as we see fit. And the right to economic liberty—that is, to trade your property and your labor freely with others—is just as “fundamental” as any other right.

In Liberty of Contract: Rediscovering a Lost Constitutional Right, law professor and historian David N. Mayer shows how Americans went from embracing the libertarian conception of rights reflected (imperfectly) in the Declaration of Independence to the statist conception of rights reflected in modern Supreme Court decisions.

Read the rest.

In the Winter 2012 Independent Review, I review David Bernstein’s Rehabilitating Lochner: Defending Individual Rights Against Progressive Reform. Here’s how it starts:

Few Supreme Court cases receive more scorn in U.S. law schools than Lochner v. New York (198 U.S. 45), the 1905 decision that struck down a New York law limiting the number of hours that bakers could work as a violation of the Fourteenth Amendment’s Due Process Clause. It’s safe to say that most legal academics and judges today believe that the Lochner Court engaged in extraordinarily outrageous “judicial activism” motivated by a devotion to extreme libertarian ideology, big business, or both.

In Rehabilitating Lochner: Defending Individual Rights Against Progressive Reform, George Mason University law professor David Bernstein makes the case that the conventional view is wrong. He provides persuasive evidence that Lochner does not deserve to be singled out as an especially activist or offensive case and that Lochner‘s Progressive critics were the real activists with a much more disturbing agenda.

Read the rest.

Every year, I like to construct a list of some of the best books released in the past year and a few a others that are worth recommending at any time. Of course, this is my opinion, but if you’re looking for a gift for your libertarian loved one this Christmas season then perhaps you’ll give one of these books a go. So without further adieu, the Top 10 Libertarian Books for Christmas 2011!

1. It is Dangerous to Be Right When the Government is Wrong by Andrew Napolitano – The Judge, host of FreedomWatch on Fox Business, has put together an amazing book that analyzes a host of topics from the standpoint of natural law. I will be reviewing this book on my personal website soon but I’m going to say it now – you need to read this book. The data and stories he presents in the book make it easily worth every penny, and it deserves a prominent place on your (or anyone else’s) bookshelf.

2. Libertarianism Today by Jacob Huebert – This book was on the list last year, but it warrants another mention because you can get it at a significantly reduced price by purchasing directly from the publisher. Huebert’s book is definitely a must-read, and is one of the best recent books on hardcore libertarianism in the past few years. LRC writer Laurence Vance has called it, “The best introduction to libertarianism on the market.”

3. Bourbon for Breakfast and It’s a Jetsons World by Jeffrey Tucker – Check out this review of Bourbon for Breakfast, and you’ll see that it is a super read for anyone looking to circumvent statist restrictions upon their lives. Tucker’s followup work tells exciting stories of the little everyday miracles of the free market at work.

4. Liberty Defined by Ron Paul – Another gold standard in libertarian literature by one of liberty’s greatest defenders. See this review for the full story.

5. Rollback by Thomas Woods – I am a huge fan of Tom Woods and have known him for over 5 years now. His latest book makes an eloquent case for dismantling pretty much everything the government currently does today.

6. Great Wars and Great Leaders by Ralph Raico – Leaders who take a country to war are often heralded as “great,” but the libertarian perspective considers such notions to be folly. War is the health of the state and the enemy of liberty, and Raico’s historical work is great ammunition in the war of ideas that we fight daily.

7. Myth of a Guilty Nation by Albert Jay Nock – This is an old book newly reprinted by the Mises Institute, and I’m excited to see it available again (because I’m a big fan of Nock and haven’t ever read this one). From the Mises.org description: “Nock’s book reminds us of what most everyone has forgotten, namely, that this was sold as a war for freedom and self-determination over imperial ambition. Along with that came some of the most rabid war propaganda ever fabricated until that point in time, all designed to make Germany into a devil nation. Nock’s brave book took on that idea and demonstrated that there was fault enough to go around on all sides. All through the 1920s, a Nockian-style retelling of the facts behind the war led to a dramatic shift in public opinion against World War I.” Awesome!

8. The Bastiat Collection Pocket Edition by Frederic Bastiat – If you haven’t read Bastiat’s The Law, you need to get on that immediately! This book contains all the major works of Bastiat in a very small volume, and makes a great gift.

9. Economics in One Lesson by Henry Hazlitt – Need to learn a little more about economics? Start with the classic by Hazlitt, and never forget the first lesson again…

Last but not least, a special note for the Christian readers…

10. Christian Theology of Public Policy and Bible and Government by John Cobin – I absolutely love the excellent work of John Cobin. For Christian libertarians, these are must reads!

Have a happy holiday season!

After reviews by Bryan Caplan and our own Stephan Kinsella got my attention, I read Alexander Tabarrok’s new “TED” e-book, Launching the Innovation Revolution.

I went in with an open mind, ready to applaud practical suggestions for incrementally increasing freedom in the area of intellectual property, even if Tabarrok didn’t endorse abolishing the entire patent system as I do. But I was still disappointed.

To Tabarrok’s credit, he does start by showing why patents aren’t necessary to have innovation (at least, he says, in most fields), and he does argue for shorter patent terms (for some things) and less patent protection (for some things). That’s all fine, as far as it goes.

Unfortunately, too much of the book is devoted to promoting new central-planning schemes that Tabarrok thinks would work better than current government programs. Kinsella discusses some of them in an update to his original review; I’ll discuss a couple more.

Perhaps my least favorite was a suggestion that the federal government subsidize higher education only in areas where there will supposedly be “spillovers” of benefits to the economy as a whole, such as engineering and biochemistry. Education in less economically valuable fields, such as sociology, would not be subsidized. The problem is, Tabarrok doesn’t mention what I’m sure he knows: we’ll get all the innovative engineers and scientists we need if we stop subsidizing higher education entirely and let the market decide what areas of study are valuable. On the other hand, if government planners enter the business of deciding which subjects are economically important, as Tabarrok wishes, what reason is there to think that they’ll choose the “right” subjects and that the subjects won’t be determined (and altered over time) according to political considerations? Apparently Tabarrok thinks you just need to have the right planners in charge — but anyone familiar with libertarian thought or public choice, as Tabarrok is, should know that any scheme that depends on the wisdom or benevolence of government planners is bound to fail.

Elsewhere, Tabarrok endorses the idea of governments buying mass quantities of vaccines from pharmaceutical companies, and he says it’s “shameful” that the U.S. has not done this in some instances where other countries’ governments have done so. Here again, it’s just assumed that the government will choose well — and that the program won’t turn into a corporate welfare scam that ultimately will have little to do with what’s actually good for Americans’ health. And this is to say nothing of the impropriety of forcing people to pay for things they wouldn’t voluntarily pay for.

Tabarrok says that many federal regulations are “good,” it’s just that taken together, they make the cost of doing business too high and stifle innovation. Which he considers to be good and why is never clear.

At least Tabarrok does get in a dig at the warfare state — not because it slaughters thousands of innocent people but because it diverts resources away from domestic innovation. (He’s not against all military spending, though. For example, he laments that we give “only” $3 billion a year to DARPA for R&D — never mind that the money it gets now is spent on some very disturbing projects.)

Maybe this book will help some people recognize that patents aren’t as essential to innovation as some claim, or get some people to favor increased immigration (another area in which it is good). I’m concerned, however, that it’s the statist ideas, if any, that we’ll see implemented.

English libertarian Sean Gabb, Director of the Libertarian Alliance, has just published an excellent book review of Ian Milne’s Time to Say No: Alternatives to EU Membership. It’s appended below.

This little review is chock full of great insights. He explains that the EU, while it does not really infringe UK sovereignty–”this country is governed from London, and by our own ruling class–has “help[ed] make the exercise of power by this ruling class less accountable.” He gives the example of metrification foisted on the country in 1995. Gabb points out that the British Government ignores other EU directives when it wants to (Gabb gives examples). But when it enacts a law based on an EU directive, it provides cover for the politicians who can just point to the EU and blame it on them. This allows special interest groups like the big four supermarkets to lobby the state to pass laws that harm smaller competitors, and the politicians to be absolved of blame by pointing to the EU Directive they “have” to enact (even though the ignore others). The larger grocery stores can afford the expense of retraining but hobble smaller grocery stores.

This is yet another example of how big businesses are actually in support of supposedly “anti-business” regulations since it helps to protect them from competition. Rothbard has pointed this out many times as I note in this post.

By the way, I recommend Gabb’s novel The Churchill Memorandum and also his excellent Literary Essays, both linked at his site. About the latter book I wrote the following for a back cover blurb: “Libertarians have sound ideas but are not always great writers, and are not usually authorities on literature and literary matters. Rarer still is the literary essayist who is not confused or ignorant about politics and economics. It is thus refreshing to encounter Sean Gabb’s literary writing. A long-time libertarian activist and writer who is also a superb novelist and literary essayist, an honest and clear writer, he is our modern libertarian man of letters. This splendid and sparkling collection of essays provides fascinating insights into literature and other literary topics, without the typical leftist baggage and economic illiteracy.”)

Review by Sean Gabb
Time to Say No:
Alternatives to EU Membership
by Ian Milne
Civitas, London, 78pp, £8.00
ISBN: 978-1906837327

In its supporting evidence, this is a very useful book. In its overall purpose, it is quite useless. Its former is the claim that British membership of the European Union does not pass any kind of cost-benefit analysis. Our trade outside the EU has been growing much faster than our trade within. This will continue for at least the next generation, as the main EU countries are demographically in decline and, on the whole, stagnant economically. Indeed, taking into account direct and indirect costs of membership, the gains from being part of the Single Market could be negative. In purely economic terms, Britain is better off out.

The book is worth reading for its short but authoritative stating of these arguments. But I will now explain why it is generally useless. Mr Milne imagines a referendum, in June 2014, on British membership of the EU. He imagines this will go in favour of withdrawal, and that the governing and opposition parties work harmoniously together, and with the EU institutions, for a phased two year withdrawal as required by the Treaty of Lisbon. After this, the country can be free again to govern itself.

The problem with this scenario is that its main assumption is absurd. This country is not ultimately governed from Brussels. We are not victims of foreign control. It is a false belief that our own liberal and therefore benign institutions have been checked by the European Commission, and that leaving the EU will have much the same effect as removing a stone from a horse’s hoof. The truth is that, just as before 1973, this country is governed from London, and by our own ruling class. All that EU membership has achieved is to help make the exercise of power by this ruling class less accountable.

Since the final disappearance, around 1980, of decency and regard for the public good in our politics, every tax and regulation and change in the law had been made for the benefit of some wealthy interest group. The political wing of our ruling class has been acting on behalf of its economic wing. If there have sometimes been disputes between and within these wings, we should not deceive ourselves on the essential unity of state and big business. Now, this is an actual constitution that is best hidden from democratic scrutiny. And so we have had a growth of supranational organisations to hide the reality of how power is exercised. Though by far the most prominent in this country, the European Union is just one among many of these institutions.

Let me explain this abstract point with an actual example. I do not think anyone of importance in Brussels has ever cared what system of measurements we use in this country. Yet, starting in 1995, we suffered a rapid and brutal metrication. By 2000, it could be a criminal offence to sell a pound of bananas. Anyone who complained about this was referred to an EU Directive from 1989 that allegedly tied the hands of British politicians. What seems really to have happened, though, is that the big four supermarkets had found a way to hobble their smaller competitors. Metrication required new measuring instruments. More importantly, it needed an expensive retraining of staff to work at commercial speed in so far unfamiliar measurements. The big supermarkets could spend millions on this without noticing. It was a different impact on small grocers.

If it had needed a Weights and Measures Bill to go through Parliament in the old way, there would have been an outcry, and someone important might have found it worth discussing who was pushing for this. Instead, the law was changed without meaningful reference to Parliament, and everyone who disagreed could rail against the European Union in general, while the actual projectors and beneficiaries of the change could walk away smiling.

And that is how we are governed – in little things and in great. The British Government is practically at liberty to enforce or not enforce any EU law it chooses. It does not comply with a Directive from the 1970s that seems to require identity cards. It does not comply with another Directive that, by implication, seems to forbid it from prohibiting civilian ownership of handguns. If our Government does choose to follow EU law, it is either because that particular law benefits – or has even been procured by – some privileged interest in this country, or because the only interests actually damaged are outside the ruling class.

This is why, regardless of which party is in office, and regardless of what the party leaders may have said in opposition, every British Government since 1973 has been committed to EU membership. And this is why the withdrawal scenario given by Mr Milne is impossible. No referendum will be allowed. If one must be allowed, the question will be slanted – for example, giving a “compromise” option of renegotiation to divide the anti-EU vote – and the mainstream media and whole of big business will argue for staying in. If there is a vote for withdrawal, the referendum will simply be rerun six months later.

The problem with most Eurosceptics is still their assumption that leaving the EU will allow us to solve all our problems. The truth is that the EU is not the cause of our problems: it is merely another symptom of how we have failed as a nation. If we are not to fade away as a distinct nation before the middle of this century, we need a revolution. Undoubtedly, one of the first acts of a revolutionary government must be immediate withdrawal from the EU – just as it must be withdrawal from every other supranational institution. But regarding withdrawal as of supreme importance in itself is the political equivalent of trying to cure chicken pox by popping all the blisters.

Yes, Mr Milne has probably got his sums right. If he really believes our masters will allow us a genuine voice about EU membership, or will listen to that voice, he needs to think again.

And one final point. I do sound in this review as if I am simply copying Richard North. I do greatly admire Dr North. He has said much more than I have about the European Union, and knows things in detail that I at best only dimly perceive. There can be no shame in putting in my own words what he has persuaded me to believe. But I have reached these opinions independently of him. For example, here they are, given ten years ago in much their present form. This is a moderately important point to make. When one reasonably intelligent person is persuaded by another, it adds some weight to a conclusion. When that conclusion is reached independently, the weight is increased. By all means, we could both be wrong. But this final point is worth making.

Dear Dr. Thompson: Felony Murder, Hunter S. Thompson, and the Last Gonzo Campaign
Ghost Road Press, 2010

by Matthew L. Moseley

Reviewed by Ryan McMaken

Hunter S. Thompson was one of the 20th century’s greatest literary social critics, and one of the most anti-authoritarian. In the tradition of Mark Twain and H.L. Mencken, Thompson never flinched at exposing the hypocrisies and contradictions of American life and ideology, and his contempt for authority permeated not just his writing but his life as well.

Thompson killed himself in 2005, shortly before his remains were shot out of a giant cannon in Aspen, Colorado. Yet, right up to the end, Thompson made himself a gadfly and a nuisance and an enemy of the agents of the state who have so much power over the lives of the powerless.

In Dear Dr. Thompson, writer Matthew Moseley has provided an entertaining first person account of Hunter S. Thompson and his “Last Gonzo Campaign.” Through the book, which is both a true crime account and a study of Thompson the man, Moseley details Thompson’s involvement in the Lisl Auman case in which, Auman, then barely out of her teens, was kidnapped by a drug addled gangbanger who murdered a police officer. Later, prosecutors claimed Auman had assisted the murderer and, thanks to media hysteria and prosecutorial recklessness in the name of “sending a message” to cop killers, Auman was sentenced to life in prison without parole under the felony murder law in Colorado.

Then one day, while serving her life sentence in a Colorado prison, Auman wrote a letter to Hunter S. Thompson a few hours away in Aspen. Thompson’s assistant Deborah Fuller read the letter aloud to Thompson. The letter spawned the “Free Lisl!” campaign which would turn out to be Thompson’s last great campaign against injustice.

The Murder

Lisl Auman was handcuffed in the back of a police car in the parking lot of an apartment complex when skinhead Matthaeus Jaenig, whom Auman had met that morning, murdered a police officer.

Denver’s Westword newspaper provides a concise description of the scene:

Freeze this image in your mind.

It’s the afternoon of November 12, 1997. Lisl Auman, 21 years old, is standing in front of a boxy condominium…Behind her is the hulking form of Matthaeus Jaehnig, struggling frantically with the lock on the condominium door. In front of Lisl are first two, then three police officers. She has her hands up. She is taking one, two hesitant steps forward.

In seconds she will be on the ground, hands behind her for the handcuffs, an officer’s knee in her back, his voice in her ear, yelling, calling her a bitch. She will be bundled into a police car and driven a short way off in the condo parking lot.

Jaehnig, meanwhile, will have veered from the door, around a set of stairs–coming within a few feet of the officers–and into an alcove…There is no exit from it other than the stairs he has just passed or the locked doorway to a second condo.

Officer Bruce VanderJagt arrives…VanderJagt is a courageous and much-admired eleven-year veteran of the Denver Police Department. He has twice received a Distinguished Service Cross–once for disarming a gunman terrorizing the employees of Porter Memorial Hospital, once for running into a burning building to help save the occupants…VanderJagt peers around the corner. There’s a fusillade of shots. More quickly than the mind can grasp, a bullet rips away the right side of VanderJagt’s head. For long seconds he remains standing. Then he falls.

Minutes later, Jaehnig takes VanderJagt’s service revolver and kills himself.

Auman is taken to the police station for questioning.  Police assumed that Auman had been an accomplice of Jaehnig’s and that she and Jaehnig were allies and perhaps friends. The truth was more complicated.

Auman and Jaehnig had only met earlier that day. Jaenig was the friend of a friend whom Auman had asked for help in retrieving some of her belongings from the apartment of a former boyfriend who had been abusive and had been keeping many of Auman’s belongings in his apartment at the Hudson Hotel in Buffalo Creek in the mountains above Denver.

Auman’s friend invited along Jaehnig, a skinhead with a long history of violence in Denver.  But Lisl Auman didn’t know anything about Jaehnig’s past. By the time the group reached Buffalo Creek, it was apparent that Jaehnig was someone to be feared, and when Jaehnig started burglarizing Shawn Cheever’s apartment, Auman couldn’t do much about it.

Many hours later, as Jaehnig was leading the police on a high speed chase through the city streets of Denver, Auman had become a hostage to the heavily armed and obviously violent Jaehnig who forced Auman to hold the steering wheel while he leaned out the window and fired wildly at the police in pursuit.

The chase eventually ended at the apartment complex in Denver where Auman fled from Jaehnig and where Jaehnig murdered Bruce VanderJagt.

Was Auman a hostage or was she an accessory to murder? And if she was an accessory, could she be charged with first degree murder for a crime that took place while she was locked in the back of a police car?

Under the felony murder law, the answer to the latter question is yes.

Felony Murder

Moseley describes the concept of felony murder:

Felony murder is a favored statute of prosecutors because it allows them to cast the widest possible net around a crime to include people who may have had no intent for the crime to happen. Colorado law states ‘ the purpose of the felony murder statute is to hold a participating robber accountable for a non-participant’s death, even though unintended, as long as death is caused by an act committed in the course of or in furtherance of the robbery or in the course of immediate flight therefrom. [Emphasis Moseley’s] Prosecutor’s have used it to ensnare forty-five people under the age of eighteen in Colorado, and over 2,000 juveniles in the U.S., who are all serving sentences of life without parole.

The problem in the Auman case is that it was not clear at all that Vanderjagt’s murder in Denver had anything at all to do with the theft that occurred in the mountains many, many hours before. Nor was it clear that Lisl Auman was in the course of immediate flight from the burglary. Indeed, it was most likely that Auman ran to police protection in flight from Jaehnig himself, who had obviously been endangering the life of Auman for hours before the final shoot-out.

However, as one of the attorneys who sympathized with Auman noted, the way the law was being interpreted by the courts meant that “she could have jumped out of the car [as Jaenig sped down the highway] and she still would be guilty.”

A prosecuting attorney later pointed out that the fact that Auman had been in police custody did not matter: “It does not matter where she was. She could have been at McMurdo Sound in Antactica. She could have been on Mir Space Station.” She was still guilty because, as the prosecutors claimed, both Auman and Jaenig were in the course of immediate flight from the burglary of Shawn Cheever at the Hudson Hotel in Buffalo Creek, Colorado.

Another benefit of the felony murder law is that prosecutors don’t even need to show that the defendant intended to kill anyone. According to Jeffrey Hartje, a criminal law professor at the University of Denver, “Conspiracy and felony murder are the favored children in the prosecutor’s nursery…With felony murder and conspiracy, you don’t have to show intention, making a conviction much easier.”

Freed of having to show that Auman intended to kill anyone, the prosecutors simply sought to show that she was somehow in league with Jaenig. In order to convince a jury of the justice of locking Auman away forever, in spite of the fact that she seemingly was no accomplice at all, prosecutors contended that Auman had handed Jaehnig the gun he had fired at police. The police had absolutely no physical evidence of this, but a police officer later changed his original statement to claim that he had indeed seen Auman hand Jaehnig a gun.

The police and prosecution painted a picture of Auman as a surly skinhead and as a misfit and as a angry young women who raged against authority. The local media dutifully repeated and reprinted the prosecution’s theories. The police, the public and the media had apparently decided that someone had to pay for VanderJagt’s death, and since Jaehnig was dead, Auman was going to have to do.

After an endless number of press conferences organized by prosecutors, numerous condemnations of Auman in the press, and a short trial, the jury voted to convict in spite of the fact that no fingerprints or evidence of gunpowder residue could be produced to connect Auman to any weapons, and the fact that no intent was ever proven.

Auman was sentenced to life in prison without the possibility of parole.

Auman writes to Thompson

While serving her life sentence, Auman wrote a letter to Thompson, noting that Thompson’s books had been banned from the prison library. (The prison system says this is not the case.) After being read the letter, which briefly outlined Auman’s plight, Thompson declared to his staff “What the f*** are you so cheerful about? If I were you I’d slit my wrists.” According to Moseley, from this point on, Lisl’s case slowly “sparked an inner rage” in Thompson.

In January 2001, Thompson used his Hey Rube column at ESPN.com, which the editors thought was supposed to be about sports,  to write a column denouncing the treatment of Auman, thus beginning Thompson’s public campaign to free Lisl Auman.

At his high-powered Super Bowl party that year, Thompson called together all the powerful and influential friends he could muster, including various well-connected attorneys and politicos, “and the National Committee to Free Lisl Auman was born that night.”

Thompson wouldn’t accept that someone could be locked in prison for life for a crime that occurred when the “guilty” party was locked in the back of a police car. He also refused to believe that there was anything unique about Auman’s story, or that she was justly paying the price for her carelessness, or that she was “asking for it.” For Thompson, Auman was exactly  like a million other non-criminal young women, except that they had been lucky enough to not find themselves on the wrong end of a police smear campaign.  For Thompson, America is a place where people end up on the wrong side of the law without much effort.

As Thompson would later write in an appeal for help from friends and colleagues:

There is no such thing as Paranoia. Your worst fears can come true at any moment… What happened to Lisl Auman can happen to Anybody in America, and when it does, you will sure as hell need friends….Take my word for it, folks. I have been There, and it ain’t Fun.

Thompson Joins the Fight

There’s no room to delve into the legal details of Lisl Auman’s appeal here, but what is important is that, by shining light on the Auman case, Thompson shone a light on prosecutorial misconduct, police corruption, and the injustice of the felony murder statutes.

This suited Thompson perfectly well. Dear Dr. Thompson provides a variety of amusing and interesting insights into Thompson’s views of police power and the corrupting nature of government power. Thompson’s gift for thoroughly accurate hyperbole would rub many the wrong way, but his disdain for official abuse of power seemed to know no bounds, and this came through in his comments and behavior throughout the campaign to free Auman.

Thompson was well aware of the political nature of the district attorney’s office, and he doubted the scruples of then district attorney Bill Ritter who would later use his position as a launching pad to become governor of Colorado.

According to Moseley, “Thompson thought Ritter wouldn’t support Lisl because of pressure from the police union, which he called a mafia. ‘The police union needs a cooperative DA and the DA needs a cooperative police union…[But you shouldn’t be] allowed to abuse just because you have a gun and a badge. It is savage behavior. It’s uncivilized. It goes back to the law of the tooth and the fang…’”

For Thompson, the prosecutors served the police and the police served the prosecutors. The public, on the other hand, was on its own. This cozy arrangement was all the more troubling to Thompson because he saw that so little was being done about it.

When queried on the matter, Thompson would become rather animated.

“They (the police) just think they can get away with it. They tell each other that. ‘We the brave, the true, the just.’ S**t on them.” he said getting peeved and pounded on the kitchen cabinet. “See I get a little excited when I think about taking on the cops again. Somebody says ‘Aren’t you worried about this [his involvement in the Lisl Auman case] Aren’t you concerned to fight the police? After all they are very powerful.’ Well, they are as powerful as you let them be.”

By the time he got to commenting on the chief of police at the time, Thompson certainly wasn’t holding back:

Richard Nixon was so crooked he had to have his servants screw his pants on every morning, and so is Denver Police Chief Gerry Whitman. He and his force have committed more crimes against humanity than Lisl Auman ever dreamed of.

The sheer ferocity of Thompson’s outrage in the matter was what made Thompson such an effective force behind the Free Lisl! Campaign. Thompson vowed to overturn the felony murder law and free Lisl Auman. He railed against the injustice of her imprisonment to influential friends, lawyers, celebrities and reporters. Lisl Auman, who had been locked away years earlier and forgotten, was suddenly someone Thompson would not let be forgotten. He worked behind the scenes, “work[ing] the phones every night,” to make sure that Auman’s appeal to the Colorado Supreme Court was the best that could be mustered. Moseley himself, a seasoned public relations man, was enlisted by Thompson to make sure that the press, which had so obediently followed the prosecution’s line in the court of public opinion during her trial, might this time give Auman a fair chance. Thompson used his celebrity status and threatened to crusade against and to even run for office against local politicians who maintained that Auman should remain in prison. This wasn’t an idle threat. Thompson had caused political havoc in Colorado before, and everyone knew it. In a close race, an enraged Hunter S. Thompson could spell defeat for those he might target.

Thompson wasn’t simply thrashing about looking for attention. Although Auman’s freedom essentially came down to a decision by judges, Thompson wasn’t so naive as to think that judges aren’t influenced by the public or the press.  Just as politics and a hostile media had helped lock Auman away, so, Thompson hoped,  an overwhelming campaign to turn public opinion in her favor might help save her.

Thompson knew the public must begin to see “justice” in America as he saw it, even if just for a little while. As Auman’s appeal progressed, Thompson called long time Denver Post reporter Ed Quillen and, according to Moseley, “Quillen was so taken with the conversation that he wrote a provocative column about Lisl’s case” containing the following lessons to be learned:

1. When a policeman is killed, somebody has to pay. If the killer is already dead, then some other party must be found and prosecuted, no matter how far the prosecutors have to stretch to make a case, no matter how many cops have to change their stories before the trial.

2. Do not ever talk to the police without a lawyer, no matter how innocent you think you are. Until your lawyer gets there, keep your mouth shut. That’s your right and you should exercise it.

3. If you somehow end up in the company of a homicidal maniac whom you’ve never met before that day, pray he lives through the shoot out.

Thompson’s Last Good Deed

In the end, although the Supreme Court did not overturn the felony murder law, it did conclude that the jury had received faulty instructions during her trial, and in 2005 Lisl Auman was freed from prison and remains out of prison to this day. It was a technicality. And it was one that called no larger issues of law into question, suggesting that perhaps the court was looking for a reason to set her free without upsetting the legal  apple cart too much. And ultimately, it suggests that Hunter’s scorched-earth campaign against all who maintained  the justice of Lisl’s imprisonment, just might have made the difference.

Thompson killed himself shortly before the Court handed down its decision, so he never knew how it had all turned out.  But many were uneasy with the fact that it had taken so much to get justice for Lisl Auman.

“Do you think anyone gave a rat’s ass about Lisl until Hunter came along?” asked Mary Ellen Johnson of the Pendulum Foundation, who tracks felony murder cases. “No. They didn’t and it shouldn’t be that way. I wish no child had to have a guardian angel like Hunter Thompson and that it is was based on justice, but it was not. Lisl’s story is not even that unusual. The only thing unusual about it is Hunter. Otherwise nobody would care.”

And people did care because of Thompson. Not only did he help to free Lisl Auman, but he inspired those around him to understand that justice is not free in America, and it’s not blind, and it can be turned against you to serve the political ambitions and the thirst for vengeance in others.

Lisl’s case is not unique, but at least she was actually tangentally involved in the murder committed by Matthaeus Jaenig that day. Others, like Tim Masters or Randall Dale Adams, to just name two, were not guilty of anything criminal in any way, and were locked away for years to suit the prejudices of prosecutors and police.

Dear Dr. Thompson is an important contribution to the literature on miscarriages of justice, but it is also an important account of the final days of Hunter S Thompson, who, in addition to writing some of the best journalistic prose of the last fifty years, never backed down from a chance to take on the same forces whom he wrote so forcefully against for so  long.

And finally, Moseley himself deserves credit for working to bring the details of this case to light. The same institution that wanted to lock up Lisl Auman for life is none too enthusiastic about advertising the fact.

According to Moseley,the district attorney’s office took over a year to respond to his request to review the case files, and when they finally did respond, they demanded hundreds of dollars in “retrieval” and “redaction” fees.

These are just some of the many barriers that the state throws up against anyone it doesn’t want snooping around, and the state holds almost all the cards. Moseley wasn’t discouraged, however, and in the end he produced a work of journalism which is no doubt an embarrassment to some powerful people, but is nevertheless an important account of how the legal system works in America.

In his paper “America’s Ruling Class – and the Perils of Revolution” Professor Angelo Codevilla offers an excellent analysis of the causes and forms of government encroachment into the basic traditional liberties of Americans, and a very good sketch of the reasons why big government ideology succeeded in imposing its tenets upon the country, despite overwhelming opposition by Americans. The problem America faces, according to him, is nothing less than a complete usurpation of power by an alienated elite: the ideologues of big government and the politicians that work in concert to subvert the structure of the American constitution, and to rule over the great majority of Americans against their will. Professor Codevilla paints a very grim (and very true) picture of the complete breakdown of the constitutional form of government in America, under the assault of the modern statist ideology, delivered in a bipartisan manner, and garnered with political corruption. But he fails to provide prescriptions radical enough to deal with the problem, perhaps because he too is a member of that big-government-worshiping elite.

Ivan Jankovic is a graduate student of Political Science at the University of Windsor, Canada. Originally from Serbia, he has published in the fields of Austrian economics, public choice, and classical liberal philosophy.

Read the Full Article by Ivan Jankovic

Afterwards, discuss it below.

It is particularly prevalent among libertarians and practitioners of Restorative Justice to favor restitution and reject punishment, or to at least reject retribution (private punishment “owed” to the victim / “just deserts” / “getting even”). I find this brief argument, from Getting Even: Revenge as a Form of Justice by Charles K. B. Barton, p. 93, to be persuasive:

1. Humans are innately social beings who can flourish and achieve their full humanity and potential in terms of moral and spiritual maturity, only in society.

2. A human society is a moral community.

3. A moral community is such that its members are mature, morally responsible individuals who hold one another accountable for wrongs to fellow members and to the common good.

4. To hold persons responsible and accountable for wrongs to fellow members and to the common good is to consider them liable for blame and punishment for such wrongs, independently of functionalist and instrumental considerations, such as expressing disapproval or deterrence—though obviously such considerations are not irrelevant to impositions of punishment.

5. To consider persons liable for blame and punishment for wrongs independently of functionalist and instrumental considerations is morally to accept retribution.

Using this explanation as part of an argument, there are two conclusions which follow:

6. Human individuals can flourish and achieve their full humanity, including moral maturity, only if they morally accept retribution and retributive liability for their wrongful actions.

7. Since individual flourishing and the achievement of one’s full humanity, including moral maturity, are good things worthy of being pursued, retributive punishment within the limits set by the principles of justice is also a morally good thing which may be pursued and, unless contra-indicated by countervailing instrumental and functionalist considerations, or by the appropriateness of mercy and forgiveness, ought to be pursued.

I highly recommend Barton’s book Getting Even. And his book Restorative Justice: The Empowerment Model is likewise excellent.

For a more comprehensive discussion about the key role that mediation must play in any legal system that aims to achieve justice, see my working paper A Call for Mediation Casebooks.