Although some of you may be aware of Jesse Larner's recent essay about F. A. Hayek's The Road to Serfdom, I was unaware of his article until this morning when a friend sent me the link.

Larner may be characterized as some sort of democratic/libertarian socialist and has written an informed and insightful essay about Hayek's political philosophy as revealed in The Road to Serfdom. (Yes, of course, there's tensions and contradictions between these three concepts -- democracy, liberty, and socialism -- but clearly many writers identify with and defend some combination of these ideas, from which some offer thoughtful criticisms of classical liberal/libertarian arguments.)

Larner's article may be read with advantage by (at least) two groups of people. First, those on the left who likely have not read Hayek but are nonetheless apt to dismiss Hayek as a conservative reactionary who wrote nothing worth reading. And, second, admirers of Hayek whose understanding of his ideas would benefit from thoughtful criticism of their hero from whatever perspective, not least in order to participate seriously in the debate about Hayek's ideas.

What does Jesse Larner have to say? He believes that "Hayek understood at least one very big thing: that the vision of a perfectible society leads inevitably to the gulag." Larner also argues that "[t]he absence of any consideration of more libertarian, less top-down approaches (the socialisms of Luxembourg, Kropotkin, Proudhon, many others; or of the possibility of nontotalitarian models of social democracy, like those that emerged in Europe after the war) should alert the reader to Hayek’s limitations." This may seem old hat to Hayek scholars and, of course, at least some of his criticisms have been made before. Moreover, many libertarians would happily tolerate, indeed embrace, some of Larner's examples of "libertarian collectivism."

Larner concludes thus: "In most of [Hayek's writings] he shows a tendency to an abstract idealism that it is hard to imagine as compatible with actual human social life, and with the exception of his powerful critique of the planned economy, his ideas have not been resoundingly vindicated by historical experience. This is not what those who honor Hayek as the valiant individualist who destroyed the intellectual foundations of the left would like to believe. To them, Hayek is the author of universal truths, and he has taken on the status of a prophet. The rest of us, I hope, have learned to be wary of prophets."

Putting to one side the question of whether this is a fair representation of what at least many of Hayek's admirers believe, I suggest that Larner does well to remind the reader that Hayek was writing at a particular time and those circumstances have changed profoundly during the course of the subsequent decades. I also suggest that those of us who believe that Hayek is in some sense "the author of universal truths" would do well to distinguish between universal truth and observations that may not be entirely or even largely true.

Talk back to a cop and go to jail! -- at least in Lafayette, Colorado where it is now a crime to verbally disrespect authority. An article in the local Daily Camera provides background as of Sunday the 13th. According to a local commentator on the news item, the ordinance pass in council on Tuesday the 15th.

The ordinance states,"It is unlawful for any person to make forceful contact, strike, or do bodily harm to, attempt to make forceful contact, strike, or do bodily harm to, threaten to make forceful contact, strike, or do bodily harm to, either verbally or by action or gesture, to any peace officer in the performance of such officers official duties, or attempt to perform such duties. Profane, abusive, insulting, taunting, or provoking language directed to a peace officer which may reasonably promote a violent response or reaction shall be deemed a violation of this section, whether accompanying the aforesaid actions or not." [Emphasis added]

In short, around a cop, you have no freedom of speech. Nor do you have any real idea what he might consider"provoking language." Apparently the police in Lafayette are so badly trained that cuss words can"provoke" them into uncontrollable violence. Since this is the same police force that recently tased to death a 19-year-old kid accused of growing marijuana, this assessment may be true. Which is all the more reason to give them less and not more power over your life...let alone the power to regulate which words may come out of your mouth. On the other extreme, perhaps the cops of Lafayette are so delicate that rude words shatter their fragile psyches. Perhaps the ordinance was inspired by a court incident where a 200 lb cop broke down on stand and wailed,"Your honor the defendant was mean to me!"

Cops already abuse their authority with near impunity; they can literally get away with murder. Now a Lafayette cop can arrest you for uttering words that -- in the sole opinion of that judge-and-jury officer -- are obstructive or provoking. Do you really want to live in a country that gives that authority to men with guns?

On the bright side...and, yeah, the situation is so oppressive that I consider this to be a glimmer of hope...maybe Lafayette just wants your money. Maybe they see monitoring your cuss word as a cash cow and they are actually indifferent to imposing social control beyond what is necessary to make you stand still as they pick your pocket. I suspect the ordinance is inspired by a combination of both motives. Moreover, even if it is fiscally-motivated, it is sure to be misused by"sensitve" cops who will gladly crack your ribs for being disrespectful.

The "fully informed jury" strategy attempts to wedge the jury process as an obstacle between oppressive law and individual freedom. The strategy is based on the doctrine of jury nullification by which a juror can reject the law. That is, a juror can refuse to convict a defendant despite instructions from a judge if he believes either that the law is unjust or that its application is unjust. In essence, the jury renders a verdict on the law itself and not merely on the facts of a case.

Jury nullification has been established in common law since 1670 when an English jury refused to convict William Penn for the crime of preaching Quakerism. They were imprisoned for doing so. In a legal precedent, the English high court ruled that juries must be free to reach their own decisions without fear of punishment by the court. In 1735, jury nullification was affirmed in America when publisher John Peter Zenger was tried for printing"seditious libel" without first receiving the government's approval. The judge instructed the jury that no facts were in question since Zenger admitted the sedition. All that remained was the legality of his act and such"issues of law" were matters for the court to determine. The jurors were instructed to find Zenger guilty. Within ten minutes, they declared him not guilty.

Since then, the right and power of a jury to de facto overturn a law has been the subject of debate and inconsistent application. Advocates of individual rights tend to embrace jury nullification as a key aspect of trial by jury. 19th century individualists shared this tendency, with Lysander Spooner's treatise Trial by Jury often considered to be the definitive word. The first chapter of this work is entitled"The Right of Juries to Judge the Justice of Laws."

Nevertheless...

...an interesting debate on trial by jury erupted in the pages of a key 19th century individualist periodical, Liberty (1881-1908). The debate did not revolve around the usual controversies, such as the propriety of subpoena -- the so-called"right" of the state to coerce testimony. Instead, it addressed the propriety of trial by jury itself and, thus, by necessary implication, of jury nullification. The debate raised important questions that should be considered before accepting the strategy of fully informed juries.

Perhaps the first question is how a group of twelve people can claim any right unless an individual has assigned it to them. Can a" collective" right supercede individual ones? After all, it cannot be said that the defendant has relinquished his rights due to committing an aggressive act as this is the very finding that the jury has been convened to determine.

The 16th century classical liberal John Locke believed that the need to protect"life, liberty, and estate" in society led men to form government. In exchange for protection, men willingly relinquished the right to adjudicate their own disputes -- that is, the right to try their own cases in court. Locke also posited a form of tacit consent by which those who had not explicitly agreed were still bound to trial by jury. As long as a man remained in society, he consented to its jurisdiction, including its right to adjudicate disputes. Radical individualists in 19th century America generally demanded a more explicit transfer of authority from the individual to any collective entity. For them, how a jury had the right to sit in judgment on someone who objected to the process was a quandary.

In 1889, Liberty ran a series of articles by Victor Yarros collectively entitled"Free Political Institutions: Their Nature, Essence, and Maintenance." The series was advertised as"an abridgement and rearrangement" of Trial by Jury. Spooner's work had not addressed how juries acquired the right to try a case in any detail. But Yarros considered this issue to be so important that he repositioned text from Spooner's concluding chapter.

Yarros' version began with a statement of what Spooner called"free government":

"The theory of government is that it is formed by the voluntary contract of the people individually with each other." From here, Spooner had contended that certain laws or conditions were so obviously beneficial that all members of society would explicitly agree to them. Spooner considered trial by jury to be one of these overwhelmingly beneficial conditions.

The debate in Liberty refuted Spooner\x{2019}s assumption. At least some people would not consent to trial by jury. Adolph Herben declared that he preferred trial by experts rather than by laymen who would be ignorant of technical matters that might be crucial to his case. He deemed it absurd to hang a person on the"mere opinion of twelve ordinary men." Spooner had anticipated the objection from"ignorance." He argued that juries should not be granted power on the basis of their wisdom, but because they were not as vulnerable to corruption as judge and other officials.

In another Liberty article, however, Steven T. Byington argued that juries would be corrupt, at least, in the form of being biased. He quoted from an editorial run by the Times of Natal -- a newspaper from an English speaking country in which racism made"trial by jury" for black defendants a mockery. Judgments simply could not be obtained against whites who committed crimes against blacks. Byington claimed that in the presence of such prejudices,"trial by jury" became an instrument of injustice. The prejudice did not even need to be widespread to have a disastrous impact on the integrity of the jury system."If only ten per cent of the people were of this sort, more than sixty-four per cent of the juries would include one or more of these men to prevent a conviction. In order that there should be an even chance of twelve men taken at random being unanimously willing to judge according to certain principles, it is necessary that there be not so many as six per cent of the population who reject those principles."

Byington further objected to jury nullification due to"the need for certainty." He referred to laws"where it has been reasonably said that certainty is sometimes more important than justice." For example, publishers might well prefer a clear and consistently enforced standard of obscenity by which they could predict the legality of an article rather than rely upon the unpredictable decision of twelve men.

Perhaps the most interesting of Byington's objections was a practical one. He maintained that courts in a free society would arise in a free society would be unlikely to adopt the jury system because it was clumsy and expensive. Any free market court system that used juries might well operate at a distinct disadvantage by having to charge considerably more than its competitors. Thus, the modern form of a voluntary court -- arbitration -- does not include a jury. Byington speculated on how justice would be provided in a"society where things are done on a business basis." He wrote,"[D]efensive associations will have their judges, and their treaties as to the method of arbitration when two associations are on opposite sides of a case, and these tribunals of one or three professional judges will settle all cases where some one does not distinctly demand a jury. I suppose a case will almost never come before a jury except on appeal..."

Byington contended that trial by jury was a response to government and not a free market phenomenon. A court system that evolved within a"society where things are done on a business basis" would be arranged differently. In a free market evolution, the disadvantages of trial by jury would loom large: its expense, the unpredictability of its verdicts, the problem of dissenting defendants, the widespread tendency toward prejudice... For Byington, trial jury was not a"right" but a"wrong."

Conclusion

Trial by jury presents interesting problems for those who champion individual rights. In one particular instance, a jury may be an effective weapon against oppressive government. In another, it may be a vehicle for unjust prejudices. In both cases, it is necessary to explain how juries derive the right to judge those who object to the process. How does a collective entity rightfully acquire such power over a dissenting individual?

Is Maliki serious about this or has he decided that McCain is a goner in November? In either case, this will cause immense discomfort for McCain and his allies.

For months, the news media have been dispensing reports of a “credit crunch.” I have been puzzled by these reports because scarcely a day passes that I do not receive offers in the mail or via the Internet from lenders who want to lend me money to refinance my mortgage or to make purchases with a credit card they stand ready to issue me. Am I the only one in America currently deemed creditworthy at attractive rates of interest?

Having my doubts, I checked some standard interest-rate data conveniently available online at the St. Louis Fed site.

The first series I checked pertains to the bank prime lending rate. During the latter half of the 1990s, this interest rate varied from 7.75 percent to 9.0 percent. It hit 9.5 percent in May 2000, then began a long decline, gradually reaching a low of 4.0 percent in June 2003. Afterward it climbed slowly to a high of 8.25 percent in June 2006. For the past two years it has fallen again, reaching 5.0 percent in April 2008. Given that the rate of change in the producer price index has been substantially greater than 5 percent during the past year, borrowing money at 5 percent seems to me to indicate, not a credit crunch, but a credit bonanza. A business borrows, finances inventory, holds it for a year, and earns a 5-10 percent rate of return. What could be simpler and more delightful?

But, you protest, the credit crunch is really in the housing industry. Well, let’s have a look at mortgage rates for 30-year conventional mortgages. Although rates have risen in the past few months, they still compare favorably with rates that prevailed in 2006 and 2007, and they are not more than about 1 percent higher than rates that prevailed during the housing boom in the first half of this decade. Given that the rate of inflation is greater now, present real rates may be lower than they were during those halcyon days. If a credit crunch exists, it is certainly not showing up in the mortgage-lending markets. Are we to believe that lenders are simply refusing to lend, rather than lending at higher rates to reflect a diminished supply of loanable funds?

If credit were being crunched, one supposes that lenders would be willing to pay higher rates for funds placed at their disposal. Yet six-month certificates of deposit are now yielding less than the rate of inflation—people are paying the banks to take their money! Some credit crunch: banks and thrift institutions don’t even have to pay a positive real rate of interest to attract funds! This situation makes sense only if the world is awash in loanable funds, so much so that people are clamoring to part with their money for less than zero reward.

Perhaps someone can enlighten me. I simply don’t understand how we can have a “credit crunch” without substantial increases in real interest rates across the board.

Are we to be spared nothing? The leaders of our two party monopoly have decided to wage war on some of the last remaining refuges of financial freedom and privacy.

According to this morning's story in USA Today, Republican Norm Coleman, the ranking member of the Senate Committee on Investigations, applauded "proposed legislation to strengthen reporting of foreign accounts held by Americans and penalize tax haven banks that impede U.S. tax enforcement."I would hope that this report [of the Committee] would be a call to action," said Coleman.

Speaking before a backdrop of two huge American flags and invoking the names of Harry S Truman and George Marshall, presidential hopeful Barack Obama yesterday explained his foreign policy. He called for"America -- once again -- to lead", to be"ready to engage the world","to lead the world anew."

Does it ever occur to the Columbia-and-Harvard-educated Barack Obama that perhaps the world does not want to be"led" by the United States?

Joshua Rosner has written a fine defense of free capital markets here.

As he reminds his readers, every equity or debt offering of Fannie Mae and Freddie Mac explicitly states that these"are not guaranteed by the US and do not constitute an obligation of the US or any agency or instrumentality thereof other than" of the two entities.

Rosner is the managing director of the research firm Graham Fisher.

Both Obama and McCain almost simultaneously endorsed an expanded military. Now, both candidates have echoed each other again (see here and here) in calling for a surge of U.S. troops into the worsening Afghan quagmire.