(1) The fact that we are not really bothered any more by taking helpless detainees in our custody and (a) threatening to blow their brains out, torture them with drills, rape their mothers, and murder their children; (b) choking them until they pass out; (c) pouring water down their throats to drown them; (d) hanging them by their arms until their shoulders are dislocated; (e) blowing smoke in their face until they vomit; (f) putting them in diapers, dousing them with cold water, and leaving them on a concrete floor to induce hypothermia; and (g) beating them with the butt of a rifle — all things that we have always condemend as “torture” and which our laws explicitly criminalize as felonies (“torture means. . . the threat of imminent death; or the threat that another person will imminently be subjected to death, severe physical pain or suffering . . .”) — reveals better than all the words in the world could how degraded, barbaric and depraved a society becomes when it lifts the taboo on torturing captives.
This is your government in action, Americans. This is some of what it does with your tax dollars. “It’s bullshit. It’s disgraceful. You wonder which side they’re on.” That's what Rep. Peter King (R-NY) said not of the men and women in the secret police responsible for these crimes, but of the Attorney General's move to investigate them. Amazing. That so many Americans are so ready to rally around the most vile, most obviously illegitimate arm of the American state is evidence for the proposition that patriotism is a tool for rendering a people ready to torture and kill at the state's behest, or to tolerate it. I am disgusted that people who pretend to care about liberty are not disgusted.
Rep. King said that we (who exactly? The American people, the CIA?) must “do whatever we have to do,” must pursue a “scorched earth policy” on behalf of the secret police and their unchecked discretion to torture those in its custody. Do we have to wait for the scorched earth before calling this thing for the terrorists?
Will Wilkinson 
There is no ‘free market’. There never was. There never will be. Laws defining property rights and procedures for adjudicating contract disputes are regulation. You can’t have a market without ’em.
The question up for discussion then is not whether we should regulate. We’re arguing about the structure and nature of whatever regulations we adopt.
The political and public policy point falling out of recent history is that reasonable voices were raised (Buffet, Soros, etc) that said “Hey! There is a feed-lot sized shit-pile of complex, opaque financial contracts out there that no one seems to know how to value, and can barely even price! We need to get some regulation around these babies so we can all agree on who owns what and how disputes are resolved!” In response, Greenspan/Gramm et al claimed “Hell no! The market knows best! Securitize, baby! Securitize!”
Also? Note to our esteemed Blog Host? Anytime someone says “By now it is pretty clear that X”, it’s almost axiomatic that ‘X’ is almost certainly not clear, and probably not even true. As a rhetorical trick that translates as “I so badly want X to be true!”
@plugger
“There is no ‘free market’. There never was. There never will be. Laws defining property rights and procedures for adjudicating contract disputes are regulation.”
Wait – are you saying that before the first woman traded the first yummy fish head on the beach for 5 cowrie shell beads and a handful of face paint, there had to be an SEC? Surely you jest.
@webgrrrl –
Consider the consequences had the yummy fish head proven toxic, and killed it’s buyer. Or it turned out that the 5 cowrie shells were taken from an area of the reef that was a traditional hunting ground of another clan. In the social context of this time, the woman or her trading partner would have been ostracized, branded witches, and probably (under the social contract of the time) traded by her husband/owner at cut-price to the neighboring tribe.
Want to exchange something? There is — there must be — consequences should one party to the exchange renege or act dishonestly. Without consequences there can be no trust, and trust (as we’re discovering) is no less important to the tribal mind than the modern banker.
plugger, no no no no. As I’ve said here before, it’s very important to ensure that in your thinking you place civil society and its activities – of which the market is one – before the external state and its laws.
Rights arise from the relations and customs of family and civil society, or they inhere in persons. Either way, they are not outlined by or derived from the external state. Taboo is not regulation; custom is not law. Can you not see the difference between tribal traditions of fairness and regulation of the state?
I think with all due respect you don’t really understand the force of what you are saying, or its implications.
webgrrrl –
Why on earth would you want to believe that–say–church law, or tribal tradition, or a family’s personal vendettas, have any more a priori legitimacy than the laws a State sets down? In principle I do not see any difference between ‘tribal traditions of fairness and regulation of the state’. Tribal elders possess the same monopoly on ‘legitimate’ force. They are vulnerable to the same human temptations and failings that lead to capricious authority.
In fact, in a Democratic state there is at least a process for changing the laws and regulations by which we all agree to operate. Further, law is written; formalized in a way that tradition is not. I would argue that there is more liberty under Law than Social Tradition. (At this point I mumble about the obligation to disobey ‘bad laws’ and so forth, but would derail that discussion with an discussion about the design of the processes under which a state might best operate.)
I very well understand the force of what I am saying, and I embrace its radical implications. If we acknowledge that our network of social interactions–of which the market and its advantages are just one–depends upon social laws, regulations, and upon their impartial enforcement, then all that remains is the question of how these are agreed upon and how they operate.
To embrace the times for a moment, we are learning from recent events is how the absence of any written laws concerning complex financial transactions has destroyed the requisite trust, and undermined the efficient functioning of the market. To build trust again, our ‘tribe’ needs new ‘traditions’ to guide us when answering questions about property and market transactions.
alas plugger, I myself am tempted to say something radical – let’s agree to disagree, with all that implies.
As for trust, I’m not sure you’re aware of the social science studies that show how best to rebuild it. Wharton has some nice ones.
plugger,
Since I lack webgrrl’s restraint, I’ll throw in my $.02.
There are many social institutions, and there is a great deal of legislation (I think that’s what you mean by laws) around these institutions. Some of this legislation adds value, much of it adds nothing (or has costs and benefits that net out to something trivial), and (I think) the majority does harm.
I think it’s a huge mistake to misinterpret this situation to be that it’s the legislation that makes the institutions possible.
It’s just not true.
As a practical matter, you’re right that we’re going to get more legislation around financial markets and it’s important to consider what form it should take to make things better. But, I expect a kitchen-sink of regulations to come out of this process that will not improve trust or “The efficient functioning of the market.”
To expect something better requires faith that I lack.
Characterizing the power of social institutions as ‘legislated’ seems to be to abuse the term. I didn’t vote for my family, my country, my place or time of birth. I did not volunteer my membership. These are accidents. And whatever ‘rules’ these institutions impose are never formalized. They are simply rung down by those in positions of power within those institutions.
My point is that these institutions I have been saddled with exert just as much — sometimes even more — power over my person than any State. Their power, their authority, is no less real than State power; certainly not in the primitive societies webgrrrl introduced to the debate with her example. Arguably though, in the current situation the actions of the ‘social institutions’ of Wall Street (they were not part of the state by any stretch of the imagination) have impinged on the liberty of many. Any serious advocate for liberty must acknowledge that.
For some reason, libertarians claim to look to the State merely as a minimalist means of arbitrating disputes between individuals. My instinct is that there are also disputes about the power of non-state collectives that must also be addressed, and part of the task of a minimalist state is to protect my individual liberties against the failure or malfeasance of these collective institutions.
Gotta be careful you don’t oversell it though. I would make the claim that the single most important thing regulators can do is to make parties to transactions be as transparent as possible about the nature of what is being bought and sold. And not merely to one another. The overall agora benefits from the information in the price signals sent from the stalls all around them.
Public markets. Public visibility.
I have been saddled with exert just as much
sometimes even more power over my person than any State.
Their power, their authority, is no less real than State power