Mises Institute: Three Ways Lockdowns Paved the Way for Riots

Ryan McMaken at the Mises Institute has an article on Three Ways Lockdowns Paved the Way for These Riots

There were many reasons to oppose the COVID-19 lockdowns.

They cost human lives in terms of deferred medical treatmentThey cost human lives in terms of greater suicide and drug overdoses. Domestic abuse and child abuse have increased. There is also good reason to believe that lockdowns don’t actually work. The lockdown activists capitalized on media-stoked fear to push their authoritarian agenda based not on science, but on the whims of a handful of experts who insisted that they need not present any actual evidence that their bizarre, draconian, and extreme scheme was worth the danger posed to human rights, health, and the economic well-being of billions of human beings.

Those who lacked the obsessive and irresponsible tunnel vision of the prolockdown people warned that there were other dangers as well, in terms of social and political conflict.

It didn’t require an especially clear crystal ball to see that destroying the livelihoods of countless millions while empowering a police state to harass and arrest law-abiding citizens would create a situation that maybe—just maybe—could lead to greater social and political conflict.

Specifically, there are three ways in which the lockdowns laid the groundwork for our current state of unrest.

The Lockdowns Created an Economic Disaster

The COVID-19 stay-at-home orders, business closures, and other forms of coerced social distancing have so far led to job losses for well over 30 million Americans. The unemployment rate has risen to levels not seen since the Great Depression. Food banks are under strain as Americans line up for free food. Thanks to government moratoria on evictions in many areas, it is still unknown to what extent homeowners and renters are unable to pay mortgages and rents, but a wave of delinquencies is almost certainly coming.

To advocates of lockdowns, this is all “worth it” even though these sorts of economic stresses often lead to suicide, stress-induced disease, and death. But impoverishment, unemployment, and financial ruin are all merely “inconvenient,” as described by head lockdown advocate Anthony Fauci.

To someone who isn’t enamored of lockdowns, however, it is clear that millions of job losses are likely to worsen a variety of social ills, sometimes even resulting in violence. Moreover, the current job losses appear to be affecting the young and those who earn lower incomes most.

Lockdown advocates have attempted to avoid responsibility for all this by claiming that it is the pandemic itself that has caused the current economic disaster, and not the lockdowns. This is a baseless assertion. As has been shown, neither the pandemics of 1918 or 1958 led to the sorts of job losses and decline in economic growth that we’re now seeing.

The Lockdowns Destroyed Social Institutions

Another outcome of the lockdowns has been the destruction of American social institutions. These institutions include schools (both public and private), churches, coffee shops, bars, libraries, barbershops, and many others.

Lockdown advocates continue to claim that this is no big deal and insist that people just sit at home and “binge watch” television shows. But researchers have long pointed to the importance of these institutions in preserving peace and as a means of defusing social tensions and problems.

As much as lockdown advocates may wish that human beings could be reduced to creatures that do nothing more than work all day and watch television all night, the fact is that no society can long endure such conditions.

Human beings need what are known as “third places.” In a 2016 report, the Brookings Institution described what these places are:

the most effective ones for building real community seem to be physical places where people can easily and routinely connect with each other: churches, parks, recreation centers, hairdressers, gyms and even fast-food restaurants. A recent newspaper article on McDonald’s found that for lower-income Americans, the twin arches are becoming almost the equivalent of the English “pub,” which after all is short for “public house”: groups of retirees meeting for coffee and talk, they might hold regular Bible study meetings there, and people treat the restaurant as an inexpensive hangout.

Third places have a number of important community-building attributes. Depending on their location, social classes and backgrounds can be “leveled-out” in ways that are unfortunately rare these days, with people feeling they are treated as social equals. Informal conversation is the main activity and most important linking function. One commentator refers to third places as the “living room” of society.

The lockdown advocates, in a matter of a few days, cut people off from their third places and insisted, in many cases, that this would be the “new normal” for a year or more.

Yet, these third places cannot simply be shut down—and the public told to just forget about them indefinitely—without creating the potential for violence and other antisocial behavior.

Indeed, third places act as institutions that provide a type of social control that is key to a well-functioning society. In his trenchant book The Revolt of the Elites and the Betrayal of Democracy, historian and social critic Christopher Lasch described the importance of third places in communicating political and social values and conventions to young people, and in setting the bounds of acceptable behavior within the community. Lasch notes that these institutions are also important in defusing violent impulses among the young. Also of great importance is the fact that third places provide a means of social control that is voluntary and not a form of state coercion.

Writing in the 1990s, Lasch was lamenting the decline of third places, although he emphasized their importance even in their modern reduced form. Thanks to the lockdowns, however, these places have been crippled far beyond what Lasch might ever have imagined.

The Lockdowns Empowered the Police State

The lockdowns have created a situation in which millions of law-abiding citizens have been deemed criminals merely for seeking to make a living, leave their homes, or engage in peaceful trade.

In many areas, violations of the lockdown orders have been—or even still are, in many places—treated as criminal acts by police. This has greatly increased negative interactions between police and citizens who by no moral definition are criminals of any sort.

Many have already seen the stories: police arresting mothers for using playground equipment, police arresting business owners for using their own property, police beating people for the “crime” of standing on a sidewalk.

Complicating the issue is the apparent fact that police have not enforced social distancing edicts “uniformly.” Some have alleged, for example, that the NYPD has lopsidedly targeted nonwhites in enforcement:

of the 40 people arrested [for social distancing violations in Brooklyn between March 17 and May 4], 35 were African American, 4 were Hispanic and 1 was white. The arrests were made in neighborhoods—Brownsville, Bedford-Stuyvesant, Cypress Hills and East New York—which have large concentrations of blacks and Latinos.

This may or may not reflect the reality of the general situation, but the fact is that the lockdowns created the perception among many that this is just yet another case of law enforcement targeting certain populations over small-time violations.

Moreover, it is quite plausible that lower-income populations have more often been on the receiving end of state harassment in the name of social distancing. After all, compliance with lockdowns is something of a luxury reserved for higher-income, white-collar residents who can work from home and remain comfortable for long periods in their roomy houses. Working-class people and those with fewer resources are far more likely to need to find income and venture outside during lockdowns. This attracts the attention of police.

Lockdown advocates, apparently in their usual state of extreme naïvete, perhaps believed that further empowering police to violently enforce government decrees against petty infractions would not lead to any unfortunate side effects down the road. Yet criminalizing millions of Americans and subjecting them to heightened police harassment is not a recipe for social tranquility.

Worsening a Volatile Situation

Of course, my comments here should not be interpreted as making excuses for rioters. Smashing up the property of innocent small business owners—or worse, physically harming innocent people—is reprehensible in all circumstances. But this isn’t about making excuses. We’re talking about avoiding extreme and immoral government policies (i.e., police-enforced lockdowns) that remove those institutions and conditions which are important in helping minimize conflict.

Some may insist that the riots would have occurred no matter what, but it’s easy to see how the lockdowns made a bad situation worse. Yes, some of the rioters are lifelong thugs who are always on the lookout for new opportunities to steal and maim. But experience suggests that the pool of people willing to engage in riots is often larger during periods of mass unemployment than during other periods. In addition, those people who exist on the margins of criminality—the sorts of people for whom third places serve an important role in moderating their more antisocial tendencies—are more likely to be swept up in these events when third places are abolished. And, as we have seen, lockdowns also create more opportunities for police abuse that ignite riots of the sort we’ve seen in recent days.

It’s true the responsibility for the riots lies primarily with the rioters. But we cannot deny that policymakers fuel the flames of conflict when they outlaw jobs and destroy people’s social support systems by cutting them off from their communities. It’s also wise to not provoke people by pushing for widespread human rights violations and additional police harassment. But this is what lockdown advocates have done, and their imprudence should not be forgotten.

Mises Institute: The School Closures Are a Big Threat to the Power of Public Schools

Ryan McMaken at Mises Institute writes about how US school closures during this pandemic are changing the way people think about schools, confidence in the institution, and how it may lead to changes in the future. The School Closures Are a Big Threat to the Power of Public Schools

Twenty twenty is likely to be a watershed year in the history of public schooling. And things aren’t looking good for the public schools.

For decades, we’ve been fed a near-daily diet of claims that public schooling is one of the most important—if not the most important—institutions in America. We’re also told that there’s not nearly enough of it, and this leads to demands for longer school hours, longer school years, and ever larger amounts of money spent on more facilities and more tech.

And then, all of sudden, with the panic over COVID-19, it was gone.

It turns out that public schooling wasn’t actually all that important after all, and that extending the lives of the over-seventy demographic takes precedence.

Yes, the schools have tried to keep up the ruse that students are all diligently doing their school work at home, but by late April it was already apparent that the old model of “doing public school” via internet isn’t working. In some places, class participation has collapsed by 60 percent, as students simply aren’t showing up for the virtual lessons.

The political repercussions of all this will be sizable.

Changing Attitudes among the Middle Classes

Ironically, public schools have essentially ditched lower-income families almost completely even though school district bureaucrats have long based the political legitimacy of public schools on the idea that they are an essential resource for low-income students. So as long as the physical schools remain closed, this claim will become increasingly unconvincing. After all, “virtual” public schooling simply doesn’t work for these families, since lower-income households are more likely to depend on both parents’ incomes and parents may have less flexible job schedules. This means less time for parents to make sure little Sally logs on to her virtual classes. Many lower-income households don’t even have internet access or computing equipment beyond their smartphones. Only 56 percent of households with incomes under $30,000 have access to broadband internet.

Nonetheless, working-class and lower-income parents are likely to return their children to the schools when they open again. Many believe they have no other choice.

Attitudes among the middle classes will be a little different, however, and may be more politically damaging to the future of the public schools.

Like their lower-income counterparts, middle class parents have long been happy to take advantage of the schools as a child-care service. But the non-educational amenities didn’t stop there. Middle-class parents especially have long  embraced the idea that billions of dollars spent on school music programs, school sports, and other extracurriculars were all absolutely essential to student success. Sports provided an important social function for both the students and the larger community.

But as the list of amenities we once associated with schooling gets shorter and shorter, households at all income levels will start to wonder what exactly they’re paying for.

Stripped of the non-academic side of things,  public schools now must sell themselves only as providers of academic skills. Many parents are likely to be left unimpressed, and this will be all the more true for middle class families where the parents are able to readily adopt homeschooling as a real substitute. The households that do have the infrastructure to do this are now far more likely to conclude that they simply don’t need the public schools much of the time. There are now so many resources provided for free outside the schools—such as Khan Academy, to just name one—that those who are already savvy with online informational resources will quickly understand that the schools aren’t essential.

In addition to this, many parents who were on autopilot in terms of assuming they were getting their money’s worth may suddenly be realizing that public schools—even when they were physically open—weren’t that much of a bargain after all…(continues)

Mises Institute: Bitcoin and the Theory of Money

It has been a while since we last ran a bitcoin article, but we certainly haven’t forgotten about it. With the economic woes gripping the world, the precarious place of the US dollar, and a lot of uncertainty about everything, gold has risen 12.8% year to date and thoughts turn to alternative money. Here’s Robert Murphy at Mises Institute with Bitcoin and the Theory of Money.

In a modern primer on money mechanics, it is necessary to provide at least an introduction to Bitcoin.1 Consequently, in this final chapter we will first give a basic explanation of what Bitcoin is and how it works. Then we will place Bitcoin in the framework of money that we developed in chapter 2, seeking to answer the fundamental question: Is Bitcoin money?” Finally, we will relate Bitcoin to an important component in the Austrian school’s discussion of money, namely Ludwig von Mises’s “regression theorem.”

Explaining Bitcoin with an Analogy2

“Bitcoin” encompasses two related but distinct concepts. First, individual bitcoins (lowercase b) are units of (fiat)3 digital currency. Second, the Bitcoin protocol (uppercase B) governs the decentralized network through which thousands of computers across the globe maintain a “public ledger”—known as the blockchain—that keeps a fully transparent record of every authenticated transfer of bitcoins from the moment the system became operational in early 2009. In short, Bitcoin encompasses both (1) an unbacked digital currency and (2) a decentralized online payment system.

Bitcoin

According to its official website: “Bitcoin uses peer-to-peer technology to operate with no central authority; managing transactions and the issuing of bitcoins is carried out collectively by the network.”4 Anyone who wants to participate can download the Bitcoin software to his or her computer and become part of the network, engaging in “mining” operations and helping to verify the history of transactions.

To fully understand how Bitcoin operates, one needs to learn the subtleties of public-key cryptography, which we briefly discuss in a later section. For now, we focus instead on an analogy that captures the economic essence of Bitcoin, while avoiding the need for new terminology.

Imagine a community where the money is based on the integers running from 1, 2, 3, … up through 21,000,000. At any given time, one person “owns” the number 8, while somebody else “owns” the number 349, and so on.

In this setting, suppose Bill wants to buy a car from Sally, and the price sticker on the car reads “Two numbers.” Bill happens to be in possession of the numbers 3 and 12. So Bill gives the two numbers to Sally, and Sally gives Bill the car. The community recognizes two facts: first, the title to the car has been transferred from Sally to Bill, and second, Sally is now the owner of the numbers 3 and 12.

Further suppose that in this fictitious community an industry of thousands of accountants maintains the record of ownership of the 21 million integers. Each accountant keeps an enormous ledger in an Excel file. The columns run across the top, from 1 to 21 million, while the rows record every transfer of a particular number. For example, when Bill bought the car from Sally, the accountants who were within earshot of the deal entered into their respective Excel files “Now in possession of Sally” in the next available row, in the columns for 3 and 12. In these ledgers, if we looked one row above, we would see “Now in the possession of Bill” for these two numbers, because Bill owned these two numbers before he transferred them to Sally.

Bitcoin Car Sale

Besides documenting any transactions that happen to be within earshot, the accountants also periodically check their own ledgers against those of their neighbors. If an accountant ever discovers that his neighbors have recorded transactions for other numbers (i.e., for deals for which the accountant in question was not within earshot), then the accountant fills in those missing row entries in the columns for those numbers. Therefore, at any given time, there are thousands of accountants, each of whom has a virtually complete history of all transactions involving all 21 million numbers…

Click here to read the entire article at Mises Institute.