Wednesday, November 27, 2002


LI's uncertain morality

We just finished re-reading the day before yesterday's post. My God, we do go on and on, don't we?

We'll allow the pro-legalization argument to settle, for a bit, in the stomachs (or, okay, brains -- the metaphors are getting awfully out of hand here, lately) of our poor readers. There's a lot to digest there, in a little space.

And we will highlight the article du jour from the NYT -- it is surely this wonderful piece about the glamorous, highwire lives of certain executive secretaries who choose to defraud their bosses. Intro grafs ahead:

"ike many busy executives, E. Scott Mead, a top banker at Goldman Sachs, trusted his secretary to help him run his life. Beyond answering the telephone and setting his schedule, she helped organize family vacations and managed his expense account.

Mr. Mead may have trusted her too much. The secretary, Joyti De-Laurey, is to appear in court today in London, charged with embezzling more than $5 million from Mr. Mead in an elaborate fraud in which she is accused of wiring blocks of his money to bank accounts in Cyprus."

Joyti DeLaurey, it turns out, isn't the only exec secretary with the sense to dictate the terms of her employment on the sly. A number of these buccaneers of the office pool are covered. Anamarie Giambrone, for instance, who worked for a Bear Stearns bigwig, used erasable ink to make out checks that she had her boss sign. Then she erased the names of the payees, substituted her own name in their place, and inflated the sums. She poured 800,000 dollars into such ventures as buying a pizzaria for her family. Of course, her lazybones boss never checked up on his checkbook.

Having often worked as a secretary ourselves, LI just can't get into a froth about these crimes, like we get into when we approach the topic of the Neronian exec set pillaging their companies. Secretaries don't usually have such colorful sub-streams of income. A friend of ours works at a multi-national corporation in which the secretaries are so badly compensated that a number of them have to work second jobs. Alas, tthe luxuriant lifestyles of exec secs in NY are not, by any means, the norm -- the second job lifestyle is the more usual pattern.

LI had just started to get into the heart of this issue -- the link between secretaries, typewriters, Arthur Krystal's review/non-review, in the latest issue of Harper's, of German Philosopher Friedrich Kittler. After I'd assembled my magpie bits, however, my computer blinked off. I don't have the heart, at the moment, to shore any more fragments against that ruin. More, though, about secretaries and such in the next post, which will probably be after the holiday. In the meantime, since you can't access the Krystal review, here's a page with some of Kittler's writings ( in German) posted. And here's a very munchy interview, in English, with the man his own self.

Tuesday, November 26, 2002

Even more astonishing is the fact that tobacco use not only spread at an unprecedented rate and in the absence of media advertising, but in the face of penaltiesthat remain unparalleled in the history of smoking. For example, the council of
Bern, Switzerland, placed the prohibition against tobacco among the Ten Commandments, gave it the same penalty as for adultery, and initiated an Inquisition-like tribunal known as the Chambre du tabac to deal with offenders. In
Turkey, smokers had the stems of pipes thrust through the cartilage of the nose and were seated backwards on mules as they were led through the streets. Meanwhile, Tsar Mikhail Fyodorovich Romanov had Russian tobacco users whipped and their nostrils slit, whereas the Persian shah ordered tobacco traders to have their noses, lips, and ears cut off or molten lead poured down their throats. In India, the Mughal Emperor Jahangir also decreed that smokers should have their lips slit. He
was lenient compared with the Ottoman tyrant Sultan Murad IV, who imposed the death penalty for smoking, and the Chinese, who issued an edict against selling tobacco on pain of decapitation. All of these measures, which were rarely motivated by health concerns, failed to stop the spread of smoking during the early 17th century. The ruling classes soon were obliged to rescind their laws. Alexander von Gernet

My friend T replied to LI�s post re the Drug War with an interesting set of objections. Here�s his letter:

yes, yes, and again yes, a nightmare as envisioned by Foucault it is. But will the legalization of the drug trade rouse anyone at all from that unrestful slumber?

To be fair, I have no idea beyond a gut-sourced jerk of the knee where I stand on the topic, except that any discussion (which, as you note, will never happen) must exclude anything pretending to morality and must include a sophisticated (not NECESSARILY cynical) acceptance that the product will do irreparable harm to many of its users (plenty of precedent here), and that the concept of "choice" for the user for a similar number of users becomes moot for the use of the product.
Thus, yes, inverse the Hegelian dialectic; temporarily, in the first instance, set aside concerns for those who the product will harm irreparably (which helps, I thing, in setting aside matters moral and cynical), let fall one's attention of the Marxian material relations of society; more specifically, on the material relations of producer/distributor/consumer in the conditions following the legalization of the drug trade.

Not that I would (or could) measure the efficacy of implementing any bit of Hegel or Marx in its predictive possibility, but shouldn't the specter of legalization consider the "violence of putting environmental hazards in poor neighborhoods...of allowing corporations to operate in regulatory breakdown..."? Would not this same violence all so effectively propagate through the channels created by a sanctioned trade? Surely the billboard for "Crack - brought to you by Pfizer" might be regulated beyond 500 feet of a schoolyard, but that would place it adjacent to an advert for Newport cigarettes, which is across the street from a poster for some swill of a malt liquor. Do we then devolve to a mere cost-benefit analysis in the discussion (which will never happen) of the legalization of the drug trade?�

This is the problem with having sharp eyed friends.
Reaching under the brilliant plumage, LI thinks that T is expressing two objections to our post, one formal, and one political. The formal one is that really, to pretend that the analysis of the mechanism comes first ignores the motivation for the discussion in the first place. If drugs did us no debateable harm, there would be no point in discussing whether to ban them.

This is true. In the order of motivations, the discussion of harm has to come first. But LI thinks that that discussion should be held in light of a very clear eyed sense of what the State has done, in the past, in terms of regulatory bannings, and how it has done it. That clear eyed sense of mechanism would recognize that the variables of enforcement are not to be wished away when deciding to banish or legalize marijuana, heroin, ecstasy and the lot. Even on the level of harm, of course, discussion is skewed by the reticence of the consumers of these drugs to defend them. The defense of pleasure is always a shy and naked thing in forums in which utility is King. Pleasure, of course, is the Jack. And that pleasure can lead to addiction is considered the main and only subject. That utility can lead to empty, disgusting lives, lives full of polyunsaturated fats and tv, is considered, well, merely frivolous.

But let�s grant the norms their normativeness, for the moment. LI would prefer to overcome these values in a great Nietzschian burst, but we have learned, from experience, that great Nietzschian bursts empty the hall. So by all means, let�s say that we have the harm of addiction on one side. And that there is only the contentless demand on the other. Demand, practically, wins. The Murads cut off the lips of smokers, the King Jameses blast tobacco, but tobacco wins.

The political objection is about the very nature of the relationship between the State, the market, and the people. Indeed, drug use can be framed as an environmental hazard � in the same way that DDT is an environmental hazard.

Dealing with this question is hazardous. Even the drug war skeptics often mis-frame what is at stake. In the fall, 2001 Social Research (unfortunately not on-line), there were a number of articles about drugs, criminality, and economics. One of them, by Jeffrey Miron (Drug Economics and Drug Legalization), is a comparison of the �costs� of legalization versus the �costs� of the drug war. Miron is forthright about his conclusion:

�This paper explains that many of the harms typically attributed to drug use are instead due to drug prohibition. This is not to deny that drugs can have powerful effects on the user, nor to deny that drugs differ in some respects from other commodities. But a wide range of outcomes typically thought to result from drug use is far more accurately attributed to the current legal treatment of drugs.�

However, Miron frames the argument in terms that LI will have to object to. This makes sense: Miron is a libertarian. That slant gets into the very way he presents economic categories � or doesn�t. His opening move is to observe that drug prohibition creates a black market in drugs. He then observes:

�Even though prohibition does not eliminate drugs, it is likely to have important effects on the operation of the market. In particular, prohibition might affect the demand for drugs as well as the supply. I address each of these in turn.

Prohibition potentially affects the demand for drugs through one of several mechanisms. First, the mere existence of prohibition might reduce demand if some consumers exhibit respect for the law. This mechanism does not appear to be quantitatively important since abundant evidence suggests that many people disregard laws that are weakly enforced. Second, prohibition might encourage demand for the good through a "forbidden fruit" effect. There is little concrete evidence to support this effect, although anecdotally it appears plausible for some groups (for example, teenagers). Third, prohibition might reduce demand directly by punishing purchase or possession of the good.�

What is the problem, here? The problem begins with the notion of drug prohibition �creating a market�, and runs through the analysis of the drug market itself. That drugs are bought by people is true, but not true enough. A prohibition doesn't necessarily create a market in itself. DDT is bought by people, yet there is very little black market in DDT in this country. What creates a market is an group of consumers who strongly prefer a certain good, and what creates a black market, at least in the case of drugs, is a group of consumers whose preferences: a. are specific enough not to be eroded by legal substitutes, and 2., are of a scale, either in wealth or number, great enough to make the risk of getting caught marketing the product, in comparison to the benefit of selling it, favor the latter course.
To understand how this is so, we have to understand what is missing in Miron's article. We have to get clear about the fundamental differences between kinds of goods, how those differences effect regulation, and how those regulations fold into democratic forms of government. In other words, one must really consider how a thing like asphalt or DDT or dioxin differs from a thing like heroin or cocaine. Since this transgresses the libertarian credo that all goods are the same, and all government regulation is the same, it is easy to see how Miron might not be inclinded to make essential distinctions here. Still, as an economist, he really should distinguish between perishable and durable goods.

That distinction isn�t fine grained enough for the analysis LI has in mind, but it is common enough to get to some of the salient features of the economic embeddedness of narcotics. Usually, durable goods are thought of as products that have a use that extends over at least, I believe it is, three years time, while perishables are bought for semi-immediate consumption.

We need to build on this distinction.
When you buy a house, you buy a quantity of nails, so many pounds of asphalt in the roof shingles, some amount of copper in the wiring, the PVC in the pipes, etc. Yet this is not what you are really buying. It is the rare housebuyer who asks about the PVC � and only the impossible ones want a count of the nails. Out of that mass of goods, the buyer aims at an emergent property � the house itself. This isn�t to say that some buyers want hardwood floors, some want bullet proof glass windows, etc., but in the end, you buy a house to get a house. Consumers are like phenomenologists: they want to go to the things themselves.

When, on the other hand, you build a house, you are, indeed, concerned with the amount of nails put in. You are concerned with the matter and the labor. But if you are building the house to sell, you are ultimately concerned with these things as they affect sale. Because you are concerned, like the Kantians, with the thing-in-itself, otherwise known as lucre, moola, the green stuff, bucks, dineros, bread, money.

This distinction is not, of course, absolute. The workman is also concerned with workmanship, and the homeowner is concerned with resale value. The point, however, is that, from the state�s point of view, different regulatory mechanisms are appropriate for different kinds of economic activity.

For the emergent property � whether it is bubble gum or a car � the rules that adhere usually gain their force through social convention. Compliance with the rules, which always depends largely, over time, with self-compliance, usually depends on trust. One can be fined for, say, junking up a yard in contravention of a zoning ordinance. But this kind of fine doesn�t insert itself into the owner�s sense of costs and benefits of continuing an enterprise. When one descends into banned activities such as stealing, murder, rape, etc., we find that only stealing is really about monetary gain � the rest are about emergent properties. Among the most prominent of which is pleasure.

An enterprise, however, is all about continuing to make a profit. Incentives to obey regulation must attach to that sense. What is interesting is how easily the regulation of business activity can be embedded into democracies � in spite of the gloom of the latter phase Hayek, real liberty has certainly increased in democracies in the last hundred years. Why? Because the relationship between the state and business enterprise is not, primarily, conflict. It is, rather, collusion. Business enterprise depends on contract. The cost of enforcing contract � a cost that could really unravel most enterprises � is offloaded onto the state. The state also allows externalities that would otherwise cripple the system of property ownership. Property as use -- property considered dynamically -- is a different thing than property as a claim -- property considered statically. Of course, Libertarian ideology is engaged in massively disguising these distinctions, and it has done so so energetically that it has seeped into the common sense way we see things. But we have to shake off the image of the state as a monster to get a clear idea of what the state does well and what it does badly.

LI hopes our readers have already done this. If not, we recommend you jettison the idea of the State as Leviathan. The State, alas for romantics and Che Guevara, is merely another algorithm.

Money, which is derived from the contractual nexus, is the black magic that makes it possible to constrain corporate power. In this sense, every good leftist should harbor some kindly feeling for money in his heart.

We�ll go into the rest of this tomorrow, if we can.

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