Berkeley’s Free Medical Marijuana Plan Shows Economic Thinking Has Gone to Pot

14448260_S-230x242In 1996, California passed Proposition 215, making it the first state to legalize medicinal marijuana. Its passage, however, did not trump federal law, under which cannabis remains illegal as per the Controlled Substance Act. Due to this illegality on the federal level, private insurance companies, as well as state programs like Medi-Cal, do not cover medicinal marijuana. Thus, many low-income patients are paying significant portions of their income on the drug, expenses that they cannot easily afford.

Attempting to combat this problem is the city of Berkeley. In July the city council unanimously approved an ordinance that will allow low-income persons to receive free marijuana if they have a legal prescription, which is scheduled to go into effect in August 2015. (The program covers individuals with annual incomes below $32,000 and families of four with incomes below $46,000.)

The plan mandates that Berkeley medical marijuana dispensaries give away 2 percent of their product to eligible customers. As Councilmember Darryl Moore put it, “The city council wants to make sure that low-income, homeless, indigent folks have access to their medical marijuana, their medicine.”

Regardless of the merits of medical marijuana, the ordinance as written is emblematic of a problem that plagues many safety net programs: the creation of perverse incentives. This particular plan encourages low-income residents to earn lower incomes in order to qualify for the giveaway. It also takes a toll on an industry that contributes a disproportionate share of the city’s taxes.

The arbitrary income cut-off of $32,000 means that participating patients who earn slightly less than this amount would receive significantly more effective income than those who earn at least $32,000 but who would lose out on the benefits of the free medicinal marijuana. This is what economists mean when they say that low-income citizens pay higher “marginal tax rates” than wealthy Americans, even with an effective tax rate close to 0 percent. They would lose money for every marginal dollar earned that eliminates them from receiving benefits that have income cut-offs.

This problem is prevalent in many poorly designed government safety nets, and is also the reason that many programs use phase-outs to lower the marginal tax rate. Phase-outs mean that earning more money above the income limit would, for example, simply lower the amount of free marijuana that one receives until it is gradually reduced to none. Although phase-outs do not completely fix the problem, they are a better option than a single fixed cut-off.

A second problem has to do with the arbitrary quantity of medical marijuana that the government would require dispensaries to give away: in this case, 2 percent of their product. This is poor policy for two reasons. First, it creates a “cross-subsidy,” which means that the price for paying patrons of the dispensaries will rise in order to cover the loss of profit on the 2 percent of free marijuana. Second, it provides a disincentive for dispensaries to locate their business in Berkeley. The dispensaries could respond by moving to nearby Richmond or Oakland and avoid the loss of sales revenue from providing a free product, which would mean that the city of Berkeley would not receive tax revenue from this heavily taxed drug, and that the intended beneficiaries of the ordinance would not receive the free marijuana as the nearby cities do not have similar laws requiring the free distribution of the medicine.

The Berkeley City Council wishes to see itself as providing a valuable benefit to low-income residents. Unfortunately, its medical marijuana plan has many basic economic problems—blunders that regrettably still exist in many government programs today.

[Ryan Atkinson is an economics major at UC Berkeley and a former intern at the Independent Institute.]

Florida’s Very Interesting Race for Governor

541c4a1b34ed9.imageIn November, Floridians will see three names on the ballot for Governor: incumbent Governor Rick Scott, the Republican; former Governor Charlie Crist, the Democrat; and Libertarian candidate Adrian Wyllie.

Incumbent Rick Scott is probably the least interesting of the candidates. A former hospital CEO, he won in 2010 spending mostly his own money ($70 million) to fund his campaign. He ran as a fiscal conservative, and mostly has followed through on his campaign platform to lower taxes and shrink state government.

Scott has played politics a bit. Originally, he opposed Medicaid expansion in Florida under Obamacare, but he reversed his position to support it once it was clear that it wouldn’t pass the legislature. And after cutting education spending at the beginning of his tenure, he supported expenditure increases in K-12 education last year, and is campaigning on his support for public schools. But mostly, he’s followed through on the fiscally conservative platform on which he ran.

Scott’s Democratic challenger, Charlie Crist, is well-known to Floridians because he was governor prior to Scott. Crist was elected as a Republican in 2006 and would have been easily reelected, but he chose to run for an open US Senate seat rather than for a second term as governor. He began his Senate race as a Republican, but when it became apparent that Marco Rubio had a lead for the Republican nomination, he dropped his Republican affiliation and ran as an independent.

As we know, Crist lost the Senate race to Rubio, and subsequently changed his party affiliation to Democrat, and is now running for the office he voluntarily left four years ago.

Crist is a charismatic candidate, and clearly has Scott beat on that count. But it does appear to me he has two big strikes against him. First, he voluntarily vacated the office he is now seeking, and second, he changed parties to do it. Voters must be thinking that if he really wanted to be governor, he would not have left the office after one term when he could have easily been reelected. And, will Democrats really support the candidate they were running hard against just eight years ago? Of course they will prefer him to Scott. But that doesn’t mean they will actually go to the polls and vote for him.

This makes Adrian Wyllie a more interesting candidate. Scott and Crist are polling about even right now, but Wyllie’s support seems to be about 8%, which is pretty high for a candidate from the Libertarian Party. That’s not going to win him the election, but it could affect whether Scott or Crist wins.

Ordinarily, I’d expect a Libertarian candidate to get most of his support from potential Republican voters, so he’d be taking votes away from Scott. But the baggage Crist brings to the election might cause some Democrats to think twice about voting for him. Of course they won’t vote for Scott, but as a protest vote, or an expressive vote, as academics might phrase it, they might vote for Wyllie. They’d be thinking, “I don’t want to vote for Crist, but I can’t vote for Scott, so I’ll vote for this other guy I don’t know.”

My prediction is that Scott will be reelected, but not for any of the reasons I gave above. Incumbents have a big advantage in any election, so I’ll always bet on the incumbent, and win that bet most of the time.

U.S. National Defense: Just Another Government Program

0804772282In a recent address to the Institute for Humane Studies board of directors, George Mason University economist and co-editor of the Independent Institute’s The Independent Review Christopher J. Coyne offered a “case for humility” regarding foreign intervention. I had the pleasure of hearing the address in person, and the written version can be found here.

There is one point, mentioned briefly in the piece and discussed during the Q&A portion of the address, I’d like to explore further.

National defense, not surprisingly, is a hot topic on both ends of the political spectrum. What may be surprising, however, is that there is significant disagreement among libertarians and other “liberty-minded” individuals about military and other foreign intervention. It is not difficult, for example, to find an individual who is critical of domestic government programs and an ardent supporter of individual liberties, but favors a strong military and active foreign policy.

The military is not just another government program—it’s one of the largest government programs. The U.S. military faces the same systematic problems as other government activities. The DOD is guilty of the same sins as Social Security, nationalized healthcare, government-run education, and every other bureaucratic government initiative providing a “service” to the U.S. citizenry.

Coyne’s remarks capture this well. He describes how foreign intervention increases the scale of government activity more than almost any other government program. With a budget for 2014 over $750 billion, the U.S. federal government spends more on defense than on Medicare, Medicaid, education, housing, and agriculture.

Coyne describes how interventionist policies change the composition of domestic markets as resources are transferred away from private uses to the government. These changes bring further distortions as they alter the incentives facing individuals in both the private and public sector. The military, like any other government program, faces strict limits on what it can achieve. As the military operates within complex systems, it is impossible to know at the outset how its actions today will impact tomorrow (see my previous post for further discussion of complex systems).

Moreover, interventions change the structure of domestic government and expand the scope of government power. These changes work to undermine civil liberties.

Despite these issues, there are still those who suggest our current military is appropriate for issues of “national defense.” Allow me to suggest that “defense” is complete misnomer. It is difficult to argue that preemptive strikes against targets that “may harm U.S. interests” are defensive. Current U.S. defense, put simply, if offense.

It is particularly important for those of us concerned about liberty to recognize these issues of national defense are of particular importance. It’s the star-spangled elephant in the room. These “defense” activities, as opposed to protecting our freedoms and expanding the rights of those abroad, often have the opposite effect. They diminish the liberties they are intended to protect.

So what can those who love freedom say regarding national defense? I know I’ve been accused, as have others who hold a similar position, of burying my head in the sand. “Certainly, we have to do something.” “Well, OK. What would you do then?” The truth is, if we are honestly concerned about helping people, we should first work to do no harm. Again, Coyne hits the nail on the head:

I lack confidence that foreign interventions can generate net benefits systematically across cases of foreign intervention.... Let me suggest that a good starting point is to discuss the specifics of defense in a free society.... From there we can move on to discussing whether the state is actually able to deliver on the desired end in a manner that maintains, rather than undermines, a free and prosperous society.

The Free Speech Movement Celebrates Its 50th Anniversary, but the Eternal Battle Between Liberty and Power Goes On

Free Speech MovementFree speech is an eternally radical idea, so it is always under threat at all times in human history.” —Greg Lukianoff

October 1 marks the 50th anniversary of the Free Speech Movement, the iconic student rebellion that rocked the campus of the University of California, Berkeley, during the tumultuous 1960s. As summarized by Berkeley’s Alumni Gazette:

The resulting protests, unprecedented in scope, were the harbinger of the student power, civil liberties, and antiwar demonstrations that convulsed college campuses throughout the country for the next decade.... After decades of ambivalence, UC Berkeley is finally embracing this important part of its history.

To commemorate the 50th anniversary, the university administration sponsored a large number of classes, lectures, concerts, and exhibits alongside unofficial events organized by current and former activists. Near the end of September, a reunion took place that brought together veterans of the original Free Speech Movement.

9781594037306_p0_v2_s260x420On Saturday, September 27, I went to Berkeley to take part in the festivities and explore the legacy of a seminal movement that shaped American history. I heard many interesting stories from old-timers as well as current activists reflect on their experiences and discuss modern controversies. As one might expect, some of the panels and audience responses became very heated. I couldn’t help but notice a strong tension between the civil libertarian and “social justice” wings of the Left. This particular controversy carried over into a panel that discussed current challenges to free speech and academic freedom. Greg Lukianoff, the president of the Foundation for Individual Rights in Education (FIRE), lamented the fact that large numbers of activists from the 1960s and 70s, once they became administrators and faculty, used their new powers to push through “speech codes” and enforce political correctness. We’re now reaping the rotten fruits on many campuses where environments of ideologically driven censorship and a trend of “unlearning liberty” are the norm, not the exception. As of January 2014, FIRE has documented that almost 60 percent of the nation’s colleges and universities have unconstitutional speech codes.

Clearly, advocates of free speech still have much work to do. As anyone who has been through higher education knows well, the modern American campus is not particularly friendly to views that dissent from left-wing orthodoxy. But this is not and shouldn’t be a partisan clash of Left versus Right, or Democrat versus Republican. The battle will always between liberty versus power, and the individual versus the collective. Lukianoff is absolutely right to emphasize that “free speech is an eternally radical idea, so it is always under threat at all times in human history.”

The good news, broadly speaking, is that current signs seem to show that many Millennials are mistrustful of authority and support full freedom of expression. A number of recent events are reaffirming the revolutionary spirit of youth. In one Colorado school district, for example, hundreds of students staged walkouts in protest of a new proposed curriculum that ironically downplayed civil disobedience and resistance to authority. In Hong Kong, a largely student-driven (including many as young as twelve) protest movement has mobilized tens of thousands of protestors into the streets to push back against Beijing’s attempt to further control the city’s elections. In the city Milton Friedman once praised as the exemplar of a free market economy, it is thrilling to see youth stand up for individual rights, free elections, and local autonomy instead of demanding for more central government control and one-size-fits-all “solutions” for societal ills.

All over the world, people of all ages make use of the treasured principle of free speech to speak out against abusive authority. The legacy of the Free Speech Movement is still being felt today. Even for those who might not agree with its ideological positions and perceive excesses from the 1960s, the lessons for contemporary student activism are profound. If anything, it is important to recognize that rights are like muscles. They become stronger through regular exercise, and they atrophy from neglect. Let us the hope the current generation honors and expands upon the human freedom that was accomplished by their forebears.

Obamacare Might Have Enrolled Only 2.3 Million; Spent $73 Billion to Save Less Than $6 Billion in Uncompensated Care

According to the latest report from the U.S. Department of Health & Human Services (HHS), it looks like the number of people who bought subsidized private insurance on Obamacare’s exchanges is only 2.3 million: “Based on an estimated 10.3 million decrease in the total number of uninsured and an estimated 8 million increase in the number covered by Medicaid, ASPE estimates that hospital uncompensated care costs will be $5.7 billion lower in 2014 than they otherwise would have been.” The difference between 10.3 million and 8 million is only 2.3 million, and that is quite a comedown from HHS’s May estimate that 8.1 million people “selected” private coverage in exchanges.

The number of newly insured is important, because if we asked an Obamacare advocate for a one-sentence justification for Obamacare’s increased federal spending on Medicaid or tax credits for private health insurance, it would go something like this: “People with health insurance will get timely primary care, and that will relieve the pressure on hospitals’ emergency departments.” This feel-good statement has been rolled out countless of times by advocates of so-called universal coverage. Empirically, it falls flat: Emergency departments are jammed with patients, post-Obamacare.

However, it does benefit hospitals, which can monetize more of their ED care, which was previously uncompensated. Let’s accept that $5.7 billion estimated drop in uncompensated care costs. How much did it cost taxpayers to buy that reduction?

The answer comes from Bloomberg Government’s Peter Gosselin: We’ve spent $73 billion on Obamacare so far. Gosselin has added up all the spending on health IT, grants, contracts, and subsidies, as shown in the chart below:


* * *

For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

Individualizing Justice in The Equalizer

The_Equalizer_posterAs a libertarian, I often enter a theater to watch an action movie like The Equalizer with a bit of trepidation. Inevitably, the story depends on the destruction of human life as a plot driver. In many cases, particularly those with martial arts or superhero roots (think Ninja Assassin or Wolverine), the story depends on vengeance as the vehicle for restoring justice.

As a libertarian, I believe that human life has objective value and should be protected. To the extent a State exists, its most important role is to protect life. As a social scientist and martial-arts centered self-defense coach, I am deeply skeptical that individuals can “know” enough about an event or circumstance to act on their own to take someone else’s life short of a direct and imminent threat. All individual actions are based on subjective valuations of the choices in front of them, and while they may be rational, they may not be correct. This means that I err on the side of restraint.

So, action movies pose a bit of dilemma, as a matter of ethics, and The Equalizer is no exception. In fact, that’s why I enjoy seeing them, particularly ones with the high production values evident in this vehicle for Denzel Washington. The plot isn’t new: a highly skilled spy (or assassin) goes into calm retirement, only to be brought out when he sees a miscarriage of justice. In this case, a prostitute who he has befriended is brutally beaten to keep her in line with the Russian mob that pimps her out and to “send a message” to the other girls in their stable. This is a clear case of human trafficking because we know that this girl’s prostitution is forced and impossible to leave as a practical matter.

Robert McCall, the lead character played masterfully by Washington, decides to take matters into his own hands and buy her freedom. This is an elegant libertarian solution—use free exchange to secure individual freedom. Win-win. Except if you’re the Russian mob. Events don’t progress as hoped. The vigilante price for beating up the girl? Five dead gangsters. To start.

Fortunately, the story in The Equalizer is more nuanced and layered. This makes for more than just an engaging movie. It also sets up a series of ethical dilemmas that McCall struggles with (but not so much he can’t take care of business).

This is why I think The Equalizer, or at least this version, would be a useful touchstone for discussions of libertarian ethics and social policy (including criminal justice). At one point, McCall notes that the people he has killed all were given a choice: Do the right thing—let McCall purchase the freedom of the beaten prostitute—or face death. Because this is a movie, and screenwriters get to set the context, all the bad guys are real bad guys. McCall is dehumanized and mocked and sent on his way by the arrogant gangsters. If he persists, they make it clear he will likely be killed. It’s how the Russians impose their will on their hapless victims and employees. McCall, however, decides that this is the line in the sand and acts to restore some sense of justice by freeing his friend and killing the mobster and his body guards/enforcers.

But, is this enough? Is freeing one person worth killing five? Or one? This is private justice, Equalizer style.

The ethical issues deepen as the movie progresses—I am grateful to the screenwriters and director for keeping them central to the plot and character arc of McCall—as McCall faces the confirmed sociopath who is leading the effort to destroy him to maintain order in their underworld. McCall tells the mobster that he promised his dead wife that he wouldn’t kill someone without giving them an out. While a bit sketchy, he follows through on this promise even though it requires a bit of clairvoyance on the part of his targets. Still, McCall is explicit about making an exception for the Russian enforcer.

Again, we have no doubt by this time that the bad guy has no redeeming social qualities. No empathy for the bad guy here. It’s the way his character is scripted. This isn’t completely implausible, of course. Sociopaths exist, and we find them in the dysfunctional behaviors of serial killers, sadistic rapists, child abusers, and those engaged in human trafficking.

From a libertarian (and Western) way of thinking, this makes the ethical dilemma even more complicated. Is this enough? At what point is private action justified, even to the point someone else’s life is ended by those actions?

As a practical matter, this issue is playing out across the nation in the debate over the Second Amendment, gun control, and self defense. In my home state of Florida, the so-called “stand your ground law” legally eliminates the need to consider retreating from a violent or potentially violent altercation before someone can lawfully shoot, and kill, a potential attacker. Is the state of mind of the defender all that is needed to justifiably take someone else’s life?

In The Equalizer, while we are sure that the Russian mob is willing and able to kill McCall, it’s McCall who initiates the scenario that leads to the deaths of the mobsters. He may have given them a choice, but they didn’t know the depth McCall was willing or able to go before they were in mortal danger to secure the freedom of the prostitute. Does that matter? At what point to vigilante justice, or private law enforcement, create a destabilizing effect on a community by weakening the most basic principle of protecting human life?

Good movies trigger deeper thinking, and I found this was the case for The Equalizer. Kudos to the producers and directors for making a movie with a story more thoughtful than most in this genre that is also well produced and well acted to boot. While The Equalizer is “just” a movie, I found it more than suitably provocative to mull these questions, and I’m interested in what my libertarian friends and colleagues have to say, and if they had the same take on the movie.

More Evidence That Medicaid Expansion Increases Emergency Department Use

18862233_SThe evidence that Medicaid expansion increases use of hospitals’ emergency departments is coming fast and thick. Hospital executives are longer afraid to admit it, and have given up the pretense that Medicaid increases timely, quality, primary care. Here’s one data point from Fort Smith, Arkansas:

Almost a year after the first health insurance enrollment under the Affordable Care Act, local hospitals Sparks Regional Medical Center and Mercy Fort Smith have seen an uptick in emergency room visits. Shelly Cordum, nursing chief executive for Sparks Regional Medical Center in Fort Smith, says the Sparks emergency department saw 6,700 patients in July. The trend is not expected to decline either. “The Medicaid expansion and the health care option certainly has spurred this influx, without a doubt,” Cordum said. “It’s people from all walks of life. They’re coming in with all different kinds of medical problems, and they enter the hospital through the ER because many don’t have a primary care physician and they are very sick.” (Fort Smith Times Record)

Also, the Colorado Hospital Association has issued a report comparing certain trends in states that expanded Medicaid under Obamacare with states that did not. The most important take-away is how much Emergency Department visits increased in expansion states versus non-expansion states:

The average number of emergency department (ED) visits to hospitals in expansion states increased 5.6 percent from second-quarter 2013 to second-quarter 2014. This change was greater than expected from the variation over the last two years, and resulted in the highest number of average visits over that time. In comparison, hospitals in non-expansion states reported a 1.8 percent increase in Emergency Department visits between the second quarters of 2013 and 2014.

It is increasingly clear that Medicaid expansion does not increase access to primary care.

* * *

For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

Fascism Is Efficient, Says Andres Duany, Leading Proponent of “Sustainable Development”

Andres Duany (photo by Michigan Municipal League)

Andres Duany (photo by Michigan Municipal League, 2013)

It goes by many names: “sustainable development,” “smart growth,” “transit-oriented development,” to name a few. But development projects built under the banner of “sustainability” share the same elements: high-density residential housing and high-intensity commercial space (so-called mixed use) clustered near capital-intensive mass transit lines surrounded by government-owned “open space” and, increasingly, government-imposed “urban growth boundaries.” Regardless of where a sustainable-development project is located in the world, each tends to apply these elements.

There is nothing wrong with high-density housing or non-automobile mobility per se. The problem is that sustainability advocates use government to force their vision of tomorrow on others and, equally important, use government to restrict or eliminate alternative visions from being adopted. Individual private-property rights and local decision making give way to the priorities of international, national, state, and regional governmental bodies influenced by urban planners who believe their vision of the next 50 to 100 years is the correct vision and the only vision worth pursuing. Anyone who thinks differently, according to the planners, is wrong, selfish, wasteful, or all three, and must be silenced.

If you think this description is exaggerated, watch this chilling video of Andres Duany speaking to the Treasure Coast Regional Planning Council on why it should support his Seven50 plan. Mr. Duany is the chief architect of Seven50, the proposed 50-year regional development plan for seven counties in Southeast Florida, including Miami-Dade, Broward, and Palm Beach counties. Mr. Duany is a leading urban planner, author of The Smart Growth Manual, and a founder of the Congress for the New Urbanism, which seeks to end suburban sprawl. After watching this video ask yourself: Do I want to support the so-called “smart-growth” approach and empower Andres Duany and people like him to rule over me and my community using government force? Or do I want to strengthen my private property rights and ensure local control over housing, land use, and transportation issues?

*I thank Mark Gotz of the American Coalition 4 Property Rights for bringing this video to my attention after I spoke at the American Dream Coalition’s 10th Annual Conference in Denver, Colorado, September 19-21, 2014. The American Dream Coalition is a nonpartisan organization fighting back against government threats to mobility and affordable homeownership.

Hospitals Are Cutting Charity Care and Using Emergency Rooms More

18862233_SHospitals, inveterate lobbyists for Obamacare, have responded rationally to its incentives: They have increased use of their emergency departments, and cut charity care.

On Tuesday, NPR had a feature on hospitals’ using online services to allow frequent flyers to book appointments with emergency departments:

Three times in one week, 34-year-old Michael Granillo returned to the emergency room of the Northridge Hospital Medical Center in Southern California, seeking relief from intense back pain. Each time, Granillo waited a little while and then left the ER without ever being seen by a doctor.

“I was in so much pain, I wanted to be taken care of ‘now,’ ” says Granillo. “I didn’t want to sit and wait.”

But on a recent Wednesday morning, he woke up feeling even worse. This time, Granillo’s wife, Sonya, tried something different. Using a new service offered by the hospital, she was able to make an ER appointment online, using her mobile phone.

Isn’t that exactly the sort of thing that Obamacare was supposed to stop? All those newly insured patients are supposed to get timely primary care, nipping their health problems in the bud at low-cost points of care. Back in July, I wrote about this worrying development, and concluded that we might all end up getting our health care in the ED. Well, it looks like that is the hospitals’ goal:

Recently, Dignity stepped up its marketing—with billboards, print advertisements and online and radio spots. One online ad features a woman sitting in a hospital waiting room, and then cuts to her on a living room couch with a dog, as the words on the screen read, “Wait for the ER from home.”

Who is not welcome? The uninsured, that’s who:

Stephen Maxwell had struggled for years with a bad back, but what he felt in December was something new.

In January, Truman Medical Center, the hospital he has relied on for care, rolled back its financial assistance program. Truman used to provide free or discounted care for uninsured people making up to 400 percent of the federal poverty level—$46,680 for an individual. Now, only those making less than 200 percent qualify for the help. The change was intended to motivate people to sign up for health insurance plans through the Affordable Care Act. (Kansas City Star)

Another Obamacare success story! Hospitals are where we spend most of our health dollars. And their incentives under Obamacare are worse than they ever were. The next health reform must ensure that hospitals are freed from the spell of perverse incentives.

* * *

For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman.

The Worst (Still) Get on Top

admin-ajax.phpHow often when discussing politics, listening to the news, or hearing about the latest government debacle do you hear something like, “If only John Doe was in office” or “If we could just get the right people in there, things would be better?” How often are issues like corruption, waste, and other perverse outcomes viewed as a preventable and lamentable byproduct of “the wrong people?”

But is this necessarily the case? Would things really be so different if different people were in power?

Nobel laureate F.A. Hayek addressed this very question in one of his most famous works, The Road to Serfdom. One chapter of the book is titled, “Why the Worst Get on Top.” In it, Hayek responds to the immensely popular idea that the ills of socialism could be avoided. Although most people found “extreme” forms of socialism (Nazism, fascism, etc.) to be repugnant, it was thought that the particularly nefarious parts of these systems could be avoided. An “American socialism” would certainly look very different than the Soviet regime. Hayek challenged this notion. He argued that the very nature of the system would ensure that the worst came to power. Those who would become political leaders would be those individuals who sought power and were willing to use violence and other coercive methods to achieve their goals.

Hayek offered three reasons why the leaders of a system tending toward totalitarianism would consist of the worst, not the best, individuals. First, he argued that in order to obtain a “high degree of uniformity in outlook,” we have to look to a group of people with low moral standards. Second, in order to obtain and maintain power, leaders in the system must gain the support of the gullible and “those whose passions and emotions are easily aroused.” Third, in order to bring together supporters, leaders will unite people behind a “common enemy.”

Hayek goes on to say that the survival of a totalitarian system depends on the willingness to supplant the needs of the collective over the needs of the individual. He states,

The principle that the end justifies the means...becomes necessarily the supreme rule. There is literally nothing which consistent collective must not be prepared to do if it serves ‘the good of the whole.’....Once you admit that the individual is merely a means to serve the ends of the higher entity called society or the nation, most of those features of totalitarianism which horrify us follow out of necessity.


The worst the word “liberty”....‘Collective freedom’ is not the freedom of the members of society, but the unlimited freedom of the planner to do with society that which he pleases.

Hayek’s points are still relevant today. Though few would argue for Soviet-style central planning, there are many who advocate centralized planning in the form of foreign intervention and domestic programs. They place their trust in the bureaucratic apparatus of government to achieve some larger goal. As Hayek points out, the actions of these leaders is often justified to the public via emotional appeals and some idea of the “collective good.” The result is detrimental to liberty.

Take for example a recent interview with retired General Stanley McChrystal. In it, he argues that American youth should be expected to do “a year of service.” Further, he suggests that jobs and educational benefits should be tied to such activities. Why? Because self-sacrifice will “bind” young people to one another and “the nation.” Individuals should sacrifice their liberties in the name of the “greater good” as envisioned by the political and military elite.

Without a doubt, the world is experiencing some scary things. Ukraine is imploding. There is an Ebola outbreak in Africa. Syria is engaged in civil war. Iraq is in turmoil. There is a chance the violence could resume in Israel. But it’s important to remember that it’s not a matter of who is in political office, who runs the military operations in Iraq, Afghanistan, and Syria, or who heads the humanitarian mission in Liberia and the rest of Africa. The issue is more fundamental. Those who will seek out those positions are the ones who gain the most from being there. As Hayek pointed out, those are likely the last people we would want.

Though we may not be able to outright alter the institutions that influence political actors, perhaps there is something individuals can do. As citizens, we take responsibility for ourselves. Individuals must champion personal liberties. Each of us has the choice to think critically and to value the rights of the individual over some notion of the “greater good.” It may be small, but it’s a first step in ensuring we protect our freedoms from the “worst on top.”