Rule of Law starts at the Top

In the wake of Monday’s decision not to indict officer Darren Wilson, president Obama called on the citizens of Ferguson to keep their protests peaceful. “We are a nation built upon the rule of law,” he said. No such nation can long stand where people disregard the law in pursuit of their own manner of justice.

This isn’t the first time a U.S. president expressed concerns of “mob law” in St. Louis, Missouri. Speaking to the Young Men’s Lyceum of Springfield—many years before the White House and the toils that would come with it—Abraham Lincoln told a story of a mulatto who had been “seized in the street, dragged to the suburbs of the city, chained to a tree, and actually burned to death.” The man had committed murder, and would surely have died at the hands of the court anyway. But Lincoln saw the murder and the response as equally tragic events.

He followed this with a question: “what has this to do with the perpetuation of our political institutions?” The message he delivered that day, not so different from his later Gettysburg Address, was about the preciousness of the U.S. constitution—uppercase and lowercase—and the price we must pay to protect it.

People tend to think of Lincoln as the “Great Emancipator” whose primary goal was to overturn the system of slavery against all political opposition, including the Constitution itself—after all, the Emancipation Proclamation was an executive order, not a law of Congress or a constitutional amendment. Lincoln is therefore evoked by some presidents to justify a moral crusade of unilateral policy changes.

However, this is a misleading characterization. Yes, he was proud to sign his name to that document, and yes, he intended to do anything he could to fight that inhumane practice. But the cause to which he was most passionately committed was the Constitution and the political partnership that it created. “If I could save the Union without freeing any slave, I would do it;” he wrote in a letter to Horace Greeley, “and if I could save it by freeing all the slaves, I would do it.” The Proclamation—which he defended as a war strategy—only applied to Confederate states still beyond Union control, not slave states within or controlled by the Union. But Lincoln understood that such an act could not suffice as a legitimate alteration to standing policy, and thus sought constitutional amendments through the appropriate process.

In the previously mentioned Lyceum address, Lincoln urges an almost religious respect for the law as written, including the highest law of the nation—the Constitution. “Let every American, every lover of liberty, every well wisher to his posterity,” he pleaded, “swear by the blood of the Revolution, never to violate in the least particular, the laws of the country; and never to tolerate their violation by others.” If there are bad laws, they should be changed. But “there is no grievance that is a fit object of redress by mob law.”

For Lincoln, the liberties won in the American Revolution and codified into the Constitution are at risk of crumbling apart with every new generation. He sees one of America’s greatest enemies: the rebel, the vigilante, the hero of an impatient majority, with a rope of righteousness clinched in his fist, a guillotine at his side, and a chorus of voices calling for swift action in the name of justice.

A lawyer by trade, Lincoln believed that the foundation of liberty and democracy is in the courts, not the streets.

If he had been an economist, he would have said the same thing as it relates to our ability to work, trade, lend, or engage in other economic activities. The central problem of many third world nations is not that they do not have enough money, food, education, or medical care. These are symptoms of something more systemic: the absence of the rule of law. Their legislative halls, elections, and police forces are marked with a pervading stench of corruption.

Without trust that your fellow man will make good on his word, and that your interests and his obligations will be backed by the force of a fair and impartial government, there can be no economic development—the critical engine for sustainable access to food, education and medical care.

We can think of the concept of “Rule of Law” in contrast to the rule of men. If a person rules, that person does what he or she wants, without restriction. But if the law rules, then those operating within it are held to a common standard of accountability to it. Of course, all written laws are man-made, so what concerns us is whether the law, once enacted, actually has power—specifically, whether it has power over those in power.

Did the laws of Germany, the Soviet Union, or China rule over Hitler, Stalin, and Mao Zedong? Certainly not. These individuals made the law—they were the law. None of those nations could provide political or economic liberty, equality, or progress under the rule of men.

The Rule of Law demands adherence to process, and equal treatment under it. In the U.S., the first law is the Constitution, which dictates powers and processes used by the Federal Government, and certain limitations on state governments. From this framework the federal, state, and local laws are produced. Everyone is subject to them, and must be held accountable through due process as well. The rich and poor, the famous and meek. All become equal in two places: the graveyard and the court.

The riots in response to Ferguson should remind us that our society can only work if we respect one another, respect the laws, and respect the justice system. Instead of taking justice into one’s own hands, we must allow the process to work, and if we believe it is wrong, we must fight peacefully to change it in accordance with the law, just as Lincoln did.

But the president should reflect upon his own advice to the citizens of Ferguson, and on the words of Lincoln, on whose Bible he took the Oath of Office to “preserve, protect and defend the Constitutional of the United States.” When the president himself appears to undermine the law with sweeping executive orders directly contrary to the laws of Congress, or by altering and eliminating parts of the Affordable Care Act with nothing but his will and the stroke of a pen, he sends the message that justice is a matter of action, and all laws, constitutions, and institutions must bow in obedience to its urgent demands.

For the United States to remain free and prosperous, justice cannot be merely the advantage of the stronger, whether demonstrated by violent protests or vain presidents.

Rule of Law starts at the Top

Taylor Swift is on the wrong side of history

The digital age has caused a lot of upset in the music business.

In 2001, major record labels won a lawsuit agains Napster, arguing rightly that the music file-sharing service had infringed on the rights of artists by allowing fans to download music for free without license. It was an awkward moment, as all sorts of tactics were experimented with to stop fans from copying music. Enter: Apple’s iTunes store and iPod. The Apple solution provided a system that could adapt to new consumer demands and still reward artists and labels. Though the industry resisted initially, it became the new business model within a few years.

Today, the emergence of streaming services is once again challenging the existing model, making music even more accessible, and paying artists less. Again, consumers love it, but major players in the industry are dubious. In the case of artists like Taylor Swift, they are flat out resisting.

Back in July, Swift lamented that artists are not given their due worth under this model, asking with trepidation, “Where will the music industry be in 20 years, 30 years, 50 years?” On the recent release of her new album 1989, she put words into action and pulled the album from all streaming services, including streaming giant Spotify.

There are those who join Swift in making the case that buying full albums provides both a better experience and a more fair valuation on an artist’s work. Mark Hemingway at Acculturated argues that “if you care about music, ultimately you have to care about musicians, and musicians have value.” 

But what exactly determines the value of music?

Are we talking about some vague notion of collective value to humanity? That would be hard to pin down. As I interpret Hemingway, he is referring to the value added to a person’s life. But if you could quantify the value one person gets from a Taylor Swift album compared to what any other random person gets, you’d find very different numbers. And it would vary for different artists, of course.

Actually, we do have a quantifiable measure that, while imperfect, estimates this pretty well—that rather simple instrument we call price.

Prices are the result of balancing costs and benefits. A brief dive into economic theory here. The more something benefits someone, the more they are willing to pay for it. Since civilization moved beyond the barter system long ago, a typical exchange involves one person trading money for something they want more (a product/service) and the other person trading their product/service for something they want more (money). Both have something to gain and lose in the deal, so the price ends up reflecting the specific point at which they both win.

Of course, companies like Spotify aren’t going to let every user or artist determine their price, so they do their own calculations to estimate what something is worth for the average target customer, and those who agree can opt-in, while others can continue using another service. Getting this number right is critical to the success of the company.

Now, it might be true that Spotify underpays its catalogue of artists and labels, and we will see how that pans out in time. But a couple of things need to be taken into consideration.

1. When you buy a song, you’re paying a premium for unlimited ownership rights, versus essentially leasing the music for a few minutes at a time. Given the benefits, or lack thereof, the costs should be very different.

2. Because fans can explore new music at no additional cost, Spotify gives both fans and upcoming artists unprecedented access to one another. In other words, the barriers have never been lower, and that’s awesome. From the artists’ perspective, this access comes at a cost…. but most would say it’s worth it.

If access to millions of listeners is worth it, why are artists like Taylor Swift and Radiohead’s Thom York speaking out against Spotify? Let me put the question another way: if you already had millions of loyal fans who are prepared to buy whatever you release, would you rather they purchase your album at full-price or stream it for pennies?

I have to agree with Tom Barnes at Mic.com:

“Swift’s 1989 — with all the records it’s set to break — is going to look like a victory for the industry’s old model. But it’s really not. It’s only proof that the old model is unfeasible for anyone but music’s 1%.”

Spotify isn’t for the well-established artists; it’s for up-and-coming talent that is begging for exposure, hoping that if just a small piece of the massive Spotify audience catches onto their music they can fill larger venues, sell more merchandise, and build a large enough following to land bigger deals.

I would not be surprised if Spotify alters their business model in the near future to increase payouts to popular artists. If they lose brand name stars, they lose their audiences. But I also won’t be surprised to hear a whole new chorus of complaints emerge about the unjust practice of paying struggling artists less than those who are already making millions. At the end of the day, it’s all about how people leverage what they need versus what they can provide, and it really is a win-win.

Streaming, or subscription-based content, is quickly becoming the norm, even with things like cars and bicycles. People are realizing that you don’t have to own everything. Sometimes it just makes more sense to enjoy something as you need it, then move on. That’s how you maximize value.

Perhaps we haven’t nailed down exactly how to make this model work best, but that’s no reason to throw it out. Instead, we should embrace it, and see where it leads, because it will likely bring new innovation that no one can even imagine right now. Those who fought against the digital age in 2001 could not see what has been made possible in the 14 years since—iPods, cheap music, and a total independence from Radio. And indeed, the “big four” record labels no longer enjoy their dominant status as gatekeepers in the industry as they did when I started making music. Thankfully, it is a far more democratic industry now.

So yes, Taylor, the music industry will be alive and well in 50 years—it just may not look exactly like it does today, and that’s exciting.

 

Taylor Swift is on the wrong side of history

Trade and Cheez-Its: How to Teach Economics to Your Toddler

Cheez-It
Cheez-It (Photo credit: Wikipedia)

Economics can be a dry subject. Finding a way to illustrate its principles in a way that is informative and fun is like figuring out a difficult magic trick: Once we figure out the trick, we want to show everyone. Last week, as I prepared to teach a class of high-schoolers a few foundational concepts in American political thought and economics, I came up with an exercise so easy you can teach it to a toddler—with the caveat that you have an exceptionally bright toddler, of course.

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Read the rest at ValuesAndCapitalism.com

Trade and Cheez-Its: How to Teach Economics to Your Toddler