The Inadvertent Enemies of Non-Profits and the Inherent Problem with Constitutional Literalism : UPDATED

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Tod Kelly

Tod is a writer from the Pacific Northwest. He is also serves as Executive Producer and host of both the 7 Deadly Sins Show at Portland's historic Mission Theatre and 7DS: Pants On Fire! at the White Eagle Hotel & Saloon. He is  a regular inactive for Marie Claire International and the Daily Beast, and is currently writing a book on the sudden rise of exorcisms in the United States. Follow him on Twitter.

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192 Responses

  1. Avatar zic
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    says:

    I don’t know if this is part of your point, but I’m always amazed at how people who don’t engage non-profits directly don’t realize the amount of cross-pollination that goes on between non-profits, for-profits, and government. For instance.

    I put in a lot of hours at my community’s food pantry every month. Over the next few months, I’ll be setting up a ‘resource center’ there; really, an organizer hung on the wall filled with pamphlets and cards for a host of services that some of our customers might be in need of in one way or the other. There’s the homeless initiative, run by Catholic Charities. The abuse center. The DHS office, where customers might go to apply for SNAP or other welfare benefits provided by the government. A sheet from the local health center that people can fill out to see if they qualify for free or reduced-priced health care. Not to mention that our own operations are funded by tax-deductible contributions, another non-profit, The Good Shepard Food Bank, donations from WalMart of meats and vegetables and pastries that they don’t want on the shelves that day, and direct grants from the Dept. of Ag for purchasing meat in bulk, and ongoing donations from local businesses — toothpaste and brushes from a dentist, for example. I’m currently looking for an ongoing donation of bulk feminine hygiene supplies.

    Non-profits don’t function in a vacuum; they function in a web, just like everything.Report

    • Avatar Michael Cain in reply to zic
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      says:

      Excellent point. In my state, the LIHEAP program that provides heating assistance to poor people. There are multiple charities who collect money towards that; the federal and state governments provide funds; the for-profit utility that serves most of the customers in the state has a check-off on its bills that allows people to make donations through that company. It’s a situation where one would expect the overhead to eat the effort up. Instead, all the money gets routed into a state fund; the counties, acting in their standard capacity as agents of the state for public assistance identify the people who get the benefit and how much; the computers in the background all talk to each other; the utilities deduct the appropriate amounts from the monthly bills before issuing them; at the end of every quarter the utilities are reimbursed.Report

  2. Avatar Oscar Gordon
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    says:

    That non-profit argument always falls flat for me. It reeks of the FYIGM strain, those folks who just chafe at the idea that some folks need help. Given a choice between handing charitable non-profits an unfair market advantage so they can help people & expanding government welfare further, I’ll advantage the private actor every time, until they’ve maximized their effectiveness.Report

  3. Avatar Richard Hershberger
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    says:

    On the point about “literalist,” we see this in conservative Christian circles a lot. Claiming to read the Bible “literally” is pretty much a requirement to be let into the clubhouse, but once you are inside you discover that these literalists manage to disagree amongst themselves an awful lot about what the Bible means. I benefit from coming from a tradition that isn’t married to the word, so we can cheerfully argue about how to interpret the text. If you claim to read it literally, then the only possibilities for anyone who reads it differently is that they are fools or dupes of persons of evil intent.

    As for non-profit corporations, these are artificial creations of the government, with arbitrarily defined characteristics. But you know what? So is every other form of business entity more complicated than a sole proprietorship. The limited liability corporation is an extreme example. You get to own a business, or some part of a business, which in turn can incur liabilities, while not accepting the responsibility for those liabilities. From a purely conceptual aspect, this is a huge what-the-fuck? Yet we never hear conservatives or libertarians complaining about the unfair advantages of the limited liability corporation.Report

    • Avatar dragonfrog in reply to Richard Hershberger
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      says:

      That’s a strange one to me – the abolition of the LLC really seems like a natural goal for libertarians.Report

      • Avatar morat20 in reply to dragonfrog
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        says:

        I’ve seen a surprising amount of ‘tort reform’ and ‘OMG, McDonald’s Once paid out ninety trillion dollars because someone didn’t know hot coffee was hot!’ from some libertarian circles, which struck me as odd.

        I’d think court enforcement of contracts and liability would be fairly essential government under a more libertarian ideology. Trying to make it harder for wrong individuals to seek redress or enforcement of contract would be…counterproductive to libertarianism as I understand it.

        OTOH, could be just garden variety conservatives using a different label since the old one has been kind of dirty lately.Report

        • Avatar Burt Likko in reply to morat20
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          says:

          Enforcement of contracts is one thing. Imposing tort liability is something else.

          Tort liability indicates that I owe you certain duties notwithstanding the fact that I have not consented to do business with you. It is the government, forcing me at gunpoint, to take your welfare into account.

          You moocher, you.Report

          • Avatar morat20 in reply to Burt Likko
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            says:

            “Tort reform” not “tort liability”. As in the buzzword used for “cap liability for X” where “X” is generally someone with a lobby and “cap” is “woefully insufficient”.

            Generally brought up as a cure all for everything from rising medical costs to the rent being too darn high? 🙂Report

            • Avatar Richard Hershberger in reply to morat20
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              says:

              Burt’s point is that a tort does not involve a contract freely entered into. Torts by definition involve duties that persons owe to one another simply by virtue of being members of society. Some self-identified libertarians try to define all interactions between persons as being contractual. In this thinking, my only duties owed to you are those we have negotiated and placed in that contract. This breaks down when, for example, someone not paying attention to his driving and rear-ending some total stranger.Report

              • Avatar Oscar Gordon in reply to Richard Hershberger
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                says:

                An accident like that involves liabilities and harm, which is something libertarians recognize as a valid tort. I think the objection is to torts seeking relief from harms where the liability is fuzzier (e.g. parents who sue cities for sledding injuries their kids get while sledding on city property).Report

              • Avatar morat20 in reply to Oscar Gordon
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                says:

                Well, the most famous excuse trotted out is the McDonald’s coffee case, wherein the actual liability (and the amount of damages actually awarded) wasn’t very fuzzy at all nor the actual damages terribly outrageous.

                I’m afraid ‘tort reform’ in general has been hijacked by conservatives and is generally used as an excuse to limit liability and shield companies from paying for the full extent of their harm.

                That said, I still find it really odd that any libertarian would seek to use governmental power to limit the ability of citizens to see redress for economic harm.

                But then, I find the notion of private arbitration hilarious given the way it’s often used (yes, indeed, I feel that being forced to submit to binding private arbitration with an arbiter you hired and use exclusively on contract will be absolutely fair to me!) and as such, foreclosing access to the courts is worrisome.

                That doesn’t even get into the slow death of a thousand cuts that’s being inflicted against class actions.Report

              • Avatar Oscar Gordon in reply to morat20
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                says:

                Yeah, I specifically avoided the hot coffee case because (when you actually look at the facts of the case), it was pretty clear that McD’s was creating and aware of the hazard.

                This libertarian sees no issue with using the courts for redress of harm when the liability is obvious. My main issue is that the definition of liability has expanded to include things that I feel are outside any rational definition of liability. I can see the desire to cap damages because the definition of liability is too loose, and capping damages is easier than trying to undue years of legal precedent.

                Re: arbitration – it’s fine as long as the mediator is agreed upon by both parties. Basically I would just make it illegal to enforce a contract clause that requires the use of a predetermined arbiter that has an ongoing relationship with either party.Report

              • Avatar morat20 in reply to Oscar Gordon
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                says:

                Capping damages is basically saying “The Courts, faced with a specific situation, a lengthy fact-finding process and both sides having vigorous advocates, is totally unable to come to the conclusion I want them to, despite the fact that I’m speaking totally hypothetically”.

                I see no reason to cap damages for liability, fuzzy or otherwise, unless you have no faith in the judicial system to actually handle it.

                Speaking for myself, I trust a judge, jury and appeal process to determine a valid amount for a specific case FAR more than I trust a basically random cap assigned by legislators for entire classes of cases determined solely in the hypothetical.

                Now, in a perfect world we might be discussing very wide ranging caps or entire classes of liability, guidelines akin to the difference in murder one versus manslaughter — but in the real world, this seems analogous to saying “Well, we’re just going to say no prison sentence over someone ending up dead should be more than five years” and quoting car accidents and the horrors of drivers ending up in jail for decades, leaving the murderers rejoicing at their sudden good luck.Report

              • Avatar Will Truman in reply to morat20
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                {mutters} “… will not debate Liebeck verdict… will not debate Liebeck verdict… will not debate…”

                {Turns to daughter} “Hey Lain, let’s watch some Dora. Right now!”Report

              • Avatar Oscar Gordon in reply to morat20
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                says:

                @morat20

                Just note I said I understand the desire to cap damages, not that I necessarily think it’s a good idea (or rather, as you say, a cap without any nuance or flexibility is not a good idea). The precedent for harm with dubious liability resulting in very large awards has been set, and our legal system is designed to make undoing precedent difficult, which is great for just precedents, and not so great for unjust ones.

                So while you might trust a judge to dismiss frivolous cases, & juries to award reasonable damages, I can understand why others are not so eager to do so.Report

              • Avatar morat20 in reply to Oscar Gordon
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                says:

                Except it really hasn’t. All those huge awards for frivolous injuries?

                Either the injuries weren’t actually that frivolous (McDonald’s) or the amount was massively knocked down on appeal (McDonald’s) or both (McDonald’s). I’d be shocked if you could even name five cases in the last few decades wherein outsized damages or trivial injuries actually resulted in huge payouts.

                Tort reform and liability caps seem to be a solution looking for a problem. Which is where my brain starts thinking “So what’s the angle, then?”

                Because, cynically, when I see huge pushes for ‘solutions’ that seem to lack a corresponding huge ‘problem’ I figure that the problem is an excuse, and start looking for the real reasons.Report

              • Avatar Oscar Gordon in reply to morat20
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                says:

                @morat20

                I’ll have to concede that because I can’t think of anything that fits those two criteria (not that I’ve been paying too much attention). I suppose I could head over to Walter Olson’s site & mine that for examples, but the fact that I’d have to mine it seems to prove your point.

                The discussion I am having with Richard elsewhere in these threads is less about high awards or minor harm, but more about what kind of line is there with regard to where liability rests.Report

              • Avatar morat20 in reply to Oscar Gordon
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                says:

                To me, tort reform/damage caps has a lot in common with ‘photo ID’s to prevent voter fraud’.

                If there are cases where either would fix an actual, real, honest-to-God really happened problem, they’re rare outliers. Both solutions have sizable downsides (damage caps run the real risk of, well, not actually covering damage. That doesn’t even get into the concept of punitive damages. As I live next to one of the biggest refineries in the world, I can assure you that “We’ll just pay the fines, thanks” is a working business model if the fines are too small. Capping punitive damage is a separate issue from liability, but it can run the risk of making it easier to just screw people and pay the capped fine than fix it. Especially in the short term, which is where sadly a lot of people and businesses live).

                I’m open to fixing any abuses of the law and the legal system. I’m rather fond of having an efficient and effective legal system.

                I guess I’m simply too conservative, in the old fashioned sense, to want to take a hammer to something that seems to be working well enough.Report

              • Avatar Oscar Gordon in reply to morat20
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                says:

                Question: Is anyone actively pushing for damage caps right now? I’m starting to feel like we are arguing something that isn’t a thing at the moment.Report

              • Avatar morat20 in reply to Oscar Gordon
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                says:

                It’s a stock GOP talking point or healthcare. “Tort reform” –specifically medical malpractice — has been part of their solution for years.

                In other contexts it also pops up — generally under ‘trial lawyers’ as a slur and as part of a deregulation push to ‘grow American business’ (Amusing, as tort reform would be regulation).

                So…not as in a specific new thing that happened, but pushing to limit damage awards and punitive damages has been baked into the GOP platform for a few decades now, and certainly is a chunk of their healthcare reform packages.Report

              • Avatar Oscar Gordon in reply to morat20
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                says:

                @morat20 @richard-hershberger

                Off topic a bit, but this story is one that makes me go WTF?

                There has got to be more to this story, right?Report

              • Avatar zic in reply to morat20
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                says:

                The McDonald’s case bugs me as an example of this for a number of reasons.

                1. John Edwards should be forever forgotten;
                2. The woman had 3rd degree burns on her inner thighs, and was hospitalized for over a week as she went through skin grafts;
                3. McDonald’s had previously known the coffee was too hot and had received other burn complaints,
                4. Coffee is ruined when kept that hot. How dare they?Report

              • Avatar Richard Hershberger in reply to Oscar Gordon
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                says:

                “parents who sue cities for sledding injuries their kids get while sledding on city property”

                Is this really a thing? Oh, I’m sure parents have filed such lawsuits, but I’m not seeing how they would go anywhere, unless there is more to the story. This smacks of the “undeserving people can get big bucks through crazy lawsuits” meme, which for all its popular acclaim doesn’t actually reflect how the legal system works.Report

              • Avatar Oscar Gordon in reply to Richard Hershberger
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                says:

                @richard-hershberger

                Sadly, yesReport

              • Avatar Richard Hershberger in reply to Oscar Gordon
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                says:

                I strongly suspect that there is more to these stories. The fact set presented in that story is very scanty, but based on it, the defenses are readily apparent, starting with assumption of risk.

                The difficulty with discussions of this sort of thing is that the news reports are typically worse than useless. Lazy journalists love “crazy lawsuit” stories, and have little motive to look into the facts, or to try to understand the legal issues.

                ‘Something bad happened on your land’ is not an actual theory of liability. The bad thing happening, and the land ownership, may be necessary elements of the theory of liability, but they are not themselves sufficient. Any news story that implies otherwise is simply incompetent journalism.Report

              • Avatar Oscar Gordon in reply to Richard Hershberger
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                It isn’t so much the specific case itself, because I agree with you that legal journalism favors sensationalism over accuracy. It’s the response to it. Other cities legal teams & insurance carriers looked at X (e.g. sledding lawsuit) & decided the city was at risk of a similar lawsuit, & took action. Sometimes nuanced, sometimes severe.Report

              • Avatar DensityDuck in reply to Richard Hershberger
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                says:

                ” The bad thing happening, and the land ownership, may be necessary elements of the theory of liability, but they are not themselves sufficient. Any news story that implies otherwise is simply incompetent journalism.”

                I love your faith in the essential goodness of humanity, that when you see a story like this you think “the person telling me this story must be lying, because there’s no way that people would actually act the way he’s claiming that they did”.Report

              • Avatar Kim in reply to DensityDuck
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                I think he’s actually just talking about the journalist not understanding the law very well. There’s quite well established law about having attractive nuisances… and if you’re going to write a story, you might as well talk about it. Well, if your goal was to inform, rather than just be sensational.Report

              • Avatar aaron david in reply to Richard Hershberger
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                says:

                ” Some self-identified libertarians try to define all interactions between persons as being contractual”

                Funny, some might call this the Social Contract.Report

              • Avatar Damon in reply to aaron david
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                says:

                “some might call this the Social Contract”

                Nah, that don’t exist.Report

        • Avatar Kolohe in reply to morat20
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          says:

          The actual argument is that the current state of things allows two bites of the regulatory apple. Either the government can step in and make something illegal, or you can make it all an issue of private torts. But now, the government says ‘yeah that’s ok’ to your business activity and you can still be sued.Report

        • Avatar Damon in reply to morat20
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          says:

          @morat20

          A lot of libertarians would argue that this should not be settled through courts, courts being the method of the state, but through private / contractual arbitration.Report

          • Avatar zic in reply to Damon
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            says:

            This comment takes us to the basic incoherence I find at the heart of libertarian thought.

            In the absence of regulations, potential harms and dispute over harms have to be settled in some way; people who harm others need to be responsible for that harm. Repeatedly, I’ve had long conversations with libertarians that these issues would be resolved in courts (which I think creates a problem of activist judges), but no, courts, too, are government, and it’s private/contractual arbitration; and for the person harmed, and probably without power, what mechanism addresses that harm?

            It’s incoherent; and these are arguments made by people who only conceive of harm as from government, and not from that dude sitting next to you.

            Even with contracts — how do contracts get enforced? Say you’ve contracted to put a new roof on my house. I’ve paid you a deposit to cover materials. But instead of putting a new roof on my house, you go to Vegas to try and double my money, but lose it all. I go to private arbitration; and the council of my neighbors agrees; you must put a repay me the money you lost in Vegas.

            But you lost it, you can’t. I’m equally sure you can find a council of neighbors who agree that you can’t repay money you don’t have.

            There’s no baseline standard, no enforcement mechanism, no ‘us,’ the people, beyond voluntary groups, and it’s pretty much possible to find some group to agree to anything.

            It’s incoherent.Report

            • Avatar Kolohe in reply to zic
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              says:

              It’s incoherent; and these are arguments made by people who only conceive of harm as from government, and not from that dude sitting next to you.

              Remember folks, police in politically liberal cities with politically liberal leadership routinely murderdeathkill people, but it’s the libertarians that are incoherent about worrying about harms from the government.Report

              • Avatar zic in reply to Kolohe
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                You know that I’m liberal and that I worry about murderdeathkill people. My answer to murderdeathkill people is that all policy can be abused, and in crafting policy, evaluating it for utility matters; set-it and forget-it may work for crock pots, but even there, it doesn’t work very well.

                And that is not an answer to my question about how one negotiates harms in the absence of government courts.Report

              • Avatar RTod in reply to zic
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                says:

                I’m not sure I know of any libertarians that want to eliminate courts, or government.Report

              • Avatar zic in reply to RTod
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                says:

                Look at the comment I responded to, by Damon, A lot of libertarians would argue that this should not be settled through courts, courts being the method of the state, but through private / contractual arbitration.Report

              • Avatar RTod in reply to zic
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                says:

                I believe he’s talking about a certain type of dispute. I don’t think he’s suggesting libertarians want to eliminate courts or government.Report

              • Avatar Chris in reply to RTod
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                says:

                In her defense, with Kolohe’s flippant response, it might be easy to think that he’s interpreting Damon the same way.Report

              • Avatar zic in reply to RTod
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                says:

                But this is exactly the incoherence that I’m griping about; he’s got this certain set of things that shouldn’t go to courts; I don’t know what’s within that set and what isn’t; defining it would require a rule of some sort.

                I pushed on this for over two years at McArdle’s blog; how does one adjudicate harm in the absence of regulation; how does one account for externalities that markets don’t concern themselves with? And how do you get people to accept any adjudication if, for whatever reason, they deem it not in their best interest? Particularly when it comes to externalities that don’t engage obvious private property rights?

                Not to mention the wealth of private-property rights abuses that have externalities someone else might not bother with. Habitat for monarch butterflies, for instance. Or turtle nesting sights. Or the particular content of air that flows from Ohio to Maine.Report

              • Avatar Richard Hershberger in reply to RTod
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                “I’m not sure I know of any libertarians that want to eliminate courts, or government.”

                There is a lot of gray area where the libertarians stop and the anarchists begin. This is a large reason why it is so hard to talk about ‘libertarianism’. So far as I can tell, there is very little that everyone who self-identifies as ‘libertarian’ holds to. They all wish their taxes were lower, but that’s about it.Report

              • Avatar Damon in reply to Richard Hershberger
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                says:

                @zic
                @richard-hershberger
                @rtod

                Zic, there’s lots of libertarian theory on how such a society would exist. Google it.

                While the “end of gov’t” might be “the desired solution”, @richard-hershberger
                @rtod, I think you’ll find that lots of libertarians would settle for a significant rolling back the current amount of gov’t.Report

              • Avatar Richard Hershberger in reply to Damon
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                says:

                I have read some of it. The unifying thread is utopianism entirely divorced from how real people act. It is very much like Marxism in this respect. I have long noted that modern self-identified libertarians often remind me a great deal of the university Marxists of my youth.Report

              • Avatar Damon in reply to Richard Hershberger
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                I can see the “Utopian” feel but given how each approach the point, the two could not be farther apart on the implementation.Report

              • Avatar Richard Hershberger in reply to Damon
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                The implementations are different, but the starting point is the same. Start with someone who is educated, often very intelligent, idealistic, and has a poor understanding of how real people think and act. Present them with an elegant Grand Scheme of Everything, and watch as they fall in love with it. We sadder-but-wiser ones can look at the GSofE and quickly see how it can only work with imaginary people, and how with real people it will inevitably lead to atrocity. One is an argument that removing the profit motive will result in utopia. The other is an argument that giving the profit motive free rein will result in utopia. So yes, they clearly are different in that respect. But that educated, smart, idealistic youth with a poor grasp of real people is primed to go either way. It is just a question of which movement gets to him first. Fifty years ago it would probably be the Marxists. Nowadays it is likely to be the Randians. This is, however, merely a matter of shifting fashions.Report

            • Avatar Kim in reply to zic
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              says:

              Contracts get enforced by arbitration agreements within the contract.
              This is how you get people banned from voting in local elections.
              (No, the court won’t enforce it, but if they DO vote, they got Problems with a capital P).Report

  4. Avatar Kolohe
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    says:

    That was probably a bit of linky overkill in that last paragraph

    Considering one link was listed twice, one link is a non-profit industry article responding to clickbait, two links are about the fight between banks and credits unions in the ultimate rentseek-off for ultimate rentseek, and one is how the (now former) Democratic Mayor of Pittsburgh, whose Wiki pic is one of him addressing the AFL-CIO, was the one seeking to tax non-profit hospitals in the interest of fairness, yes, it was overkill to make your point that conservatives and libertarians are demonstrably bad.Report

    • Avatar Oscar Gordon in reply to Kolohe
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      I applaud Kolohe for actually following every one of those links.Report

    • Avatar Gabriel Conroy in reply to Kolohe
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      I didn’t follow the links like Kolohe did, but I do think he touches on a point here with his mention of credit unions vs. banks. Not all organizations organized as “non-profits” are necessarily there for charitable purposes or to help people. That, to me, doesn’t mean non-profits are all or even mostly bad. It doesn’t mean I think credit unions are bad. I don’t know enough about them, other than that their employees presumably get paid something like a competitive salary and use that money for whatever it is people use money for, just like the employees at for profit banks. But not all non-profits are Goodwill, either.Report

      • Avatar Mike Schilling in reply to Gabriel Conroy
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        I’v belonged to a credit union for many years (it’s the employees one from my first job.) Unlike any bank I’ve ever done business with, they’ve never tried to mislead me into doing anything that’s purely for their benefit.

        Losers.Report

        • Avatar Gabriel Conroy in reply to Mike Schilling
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          That doesn’t really answer my point. I never said cu’s were bad or just like banks.Report

          • Avatar Damon in reply to Gabriel Conroy
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            Basically credit unions ARE banks, with a twist. I’ve been a CU member for 30 years. I think they are regulated slightly differently, but the real differences are these:

            Generally higher interest rates paid.
            Generally lower interest rates charged
            They “know you” as a customer.
            “Flexibility”..I once asked for a loan. These requests get decided by the board, but the President of the CU waived that requirement since I’d had an approved loan a few months ago. So i got my certified check in 2 days vs the 7 day typical.
            Higher customer service. A “small town bank” feel.

            Downside: no branches or few. But I’ve been doing my banking with these guys via telephone for years and now with the internet, branches are not really needed. The only real downside I have is that every ATM is an “out of network” ATM for fee purposes, but my cu doesn’t charge a fee to me anyway.Report

          • Avatar Gabriel Conroy in reply to Gabriel Conroy
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            @mike-schilling

            I’v belonged to a credit union for many years (it’s the employees one from my first job.) Unlike any bank I’ve ever done business with, they’ve never tried to mislead me into doing anything that’s purely for their benefit.

            I was being bristly, but I do have some counter-anecdotes to your anecdote. I’ve worked at two banks in a customer service rep capacity (and at a third in a non-CSR capacity). One bank really was one of those that put a lot of pressure on CSR’s to sell financial “products” to customers that usually benefited the bank much, much more than it benefited the customers, or at least some customers (others probably enjoyed the products). And the selling techniques were misleading. It’s probably not coincidental that that bank was a national bank that operated in probably at least half, maybe more, of the states of the US.

            At another bank, there was very little pressure at all to sell “products” to customers. The philosophy seemed to be, for example, that if they wanted a cash reserve, or a credit card, or an increase in credit limit, they’d ask for it. It was also a fairly large bank (but not nearly as large as the first one) that had a niche market, located almost entirely in the state I lived in at the time.

            I once applied for a job at a credit union. During the interview, they asked if I had a problem with cross-selling services. Presumably they asked because they place a high priority on selling such things, which suggests to me that they engage in the sort of promotion that you deem misleading. (I don’t know because I didn’t get the job, and one reason I didn’t get it may have been I told them I was uncomfortable with cross-selling certain credit services because I thought they were a way to charge people more in fees.)

            Of course, #notallcreditunions, but also @notallbanks, either.Report

    • Avatar Kim in reply to Kolohe
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      Yeah, UPMC filed a Civil Rights discrimination counterlawsuit for that one…
      http://www.post-gazette.com/local/city/2013/04/20/UPMC-sues-Pittsburgh-Mayor-Luke-Ravenstahl/stories/201304200182

      PLEASE do not link lawsuits that may as well have been filed in CRAYON, they were so dismissable. This was a fairly obvious ploy for someone’s reelection, and not intended to actually win.Report

  5. Avatar Saul Degraw
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    says:

    1. This is the first time I have heard of people suing non-profits. What I notice is that they are going after very specific and often liberal non-profits. What about Cato and Reason and the National Review? Those are non-profits too. I suppose they realize that suing the Nation will result in a counter-suit against Reason pretty quickly.

    2. One thing I’ve noticed is that there is a lot of mental illness that manifests itself in the legal system. A friend of mine worked for the U.S. Attorney’s office as an intern. His job was to respond to the lawsuits which basically said “The CIA is tapping my teeth. Please pay me 100 billion dollars in damages.” Another friend dealt with a person who took out liens against all her co-workers and then spent time making arguments about how she was above the jurisdiction of the court.

    3. #2 says more about the state of mental healthcare in the United States than anything else.Report

    • Avatar LWA in reply to Saul Degraw
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      says:

      “there is a lot of mental illness that manifests itself in the legal system. ”

      Must.
      Resist.
      Punchline.Report

    • Avatar DensityDuck in reply to Saul Degraw
      Ignored
      says:

      “This is the first time I have heard of people suing non-profits. ”

      That’s because they’re lone nutcases (filing a pro se lawsuit is pretty much the definition of “lone nutcase”).

      Kind of wish Tod hadn’t dipped into the “lone nutcases inspired by rhetoric” well to fill out the post because there’s some nasty stuff in there and it would’ve been better to keep the lid on.Report

      • Avatar Richard Hershberger in reply to DensityDuck
        Ignored
        says:

        “(filing a pro se lawsuit is pretty much the definition of “lone nutcase”)”

        …with some exceptions, e.g. small claims court.Report

      • Avatar Saul Degraw in reply to DensityDuck
        Ignored
        says:

        Usually but not always. Sometimes people have real cases but they are long shots and/or not worth the cost for a lawyer to take them on. Most lawyers I know won’t take on cases worth less than 100,000 dollars in damages if they can avoid it. Or they will say “You owe 5000 dollars because of breach of contract. You have valid defenses but it will cost more to defend the lawsuit in legal fees than paying 5000 dollars.”Report

        • Avatar Richard Hershberger in reply to Saul Degraw
          Ignored
          says:

          “Most lawyers I know won’t take on cases worth less than 100,000 dollars in damages if they can avoid it.”

          This is definitely not true for personal injury cases.

          “Or they will say “You owe 5000 dollars because of breach of contract. You have valid defenses but it will cost more to defend the lawsuit in legal fees than paying 5000 dollars.””

          Well, sure. That is why we have small claims courts. If I were the defendant, I might consider paying for a couple of hours consultation to be money well spent, so that I can walk into the courtroom with some idea what those defenses are.Report

          • Avatar Saul Degraw in reply to Richard Hershberger
            Ignored
            says:

            @richard-hershberger

            It might depend on the area and the type of firm but I know many personal injury lawyers who won’t take on individual cases worth less than 100,000 in damages. They might in the case of pharmaecutical litigation when they have dozens or hundreds of clients though. In Pharma, you tend to have clients with a wide-variety of damages.

            This could also depend on the location of the lawyer’s practice.Report

            • Avatar Richard Hershberger in reply to Saul Degraw
              Ignored
              says:

              Sure, pharmaceutical litigation is notoriously expensive to pursue, and many courts seek creative reasons to dismiss such cases. But think smaller, to an automobile accident case. Liability is often pretty straightforward. The argument is over damages. Even if we are talking about a full jury trial, you are looking at probably one or two experts. This is manageable even without looking at $100K in damages.

              On second thought, though, this probably varies wildly with jurisdiction. We are pretty old school in Maryland. Some other states with various versions of no-fault auto insurance are vastly different in how this plays out.Report

      • Avatar Mike Schilling in reply to DensityDuck
        Ignored
        says:

        (filing a pro se lawsuit is pretty much the definition of “lone nutcase”)

        It’s a lot less nutty than filing one in verse.Report

      • Avatar Kim in reply to DensityDuck
        Ignored
        says:

        Ravenstahl counts as a lone nutcase?Report

    • Avatar Oscar Gordon in reply to Saul Degraw
      Ignored
      says:

      Since loser pays is pretty much a non-starter for a lot of people, and judges are extremely hesitant to brand a person a vexatious litigant, what can we do about nuisance lawsuits, because they are a problem for all income levels?Report

      • Avatar Saul Degraw in reply to Oscar Gordon
        Ignored
        says:

        It is true that the American legal system works on each party pays their own way as a source of pride but there are some or many exceptions written into the law. If you lose on a motion for summary judgment, you can be forced to pay attorney’s fees of the victor for example. The issue is that many people can’t afford to pay (especially pro per litigants) so this is a moot issue.

        I am not sure what we can do. I am a plaintiff’s lawyer at heart. I don’t want their to be a trillion barriers to the legal system that end up benefiting defendants. A lot of defense firms would probably love to get rid of the contingency fee because it would reduce their lawsuits to almost zero except for corporation v. corporation disputes. No more dealing with pesky plaintiffs.Report

      • Avatar Kim in reply to Oscar Gordon
        Ignored
        says:

        They aren’t that hesitant when the guy starts putting liens on everyone in sight.Report

  6. Avatar LWA
    Ignored
    says:

    This touches on something I have been thinking about as well, that we often sling words around carelessly then everyone argues about the myriad different definitions in their heads.
    Examples are “Free Markets”, “Onerous Regulations” (and to be fair), “Exploitation” among others.

    Depending on how it is defined, a free market can be exactly what we have now, or what exists in Scandinavia, or something which can only exist without any regulation whatsoever. Onerous regulation usually just means “stuff I don’t like” and the difference between exploitation and just a poor bargaining position isn’t usually clear.Report

    • Avatar Saul Degraw in reply to LWA
      Ignored
      says:

      I’ve noticed this to. The problem with a lot of words like freedom and liberty is that they are malleable.Report

    • Avatar Damon in reply to LWA
      Ignored
      says:

      “Depending on how it is defined, a free market can be…”

      Really, the definition of a “free market” is pretty damn clear, and it ain’t what we got now, much less what Scandinavia has. “A free market is a market system in which the prices for goods and services are set freely by consent between vendors and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority.” You CAN define it some other way, but that don’t make it true.Report

      • Avatar zic in reply to Damon
        Ignored
        says:

        First, one has to show that any regulation creates a price-setting monopoly. Externalities are often unknown or don’t bother those in the market, though they may well create problems for people outside that market.

        The presumption that any government regulation distorts the market needs to be balanced with the possibility regulation might also corrects market distortions.Report

        • Avatar Richard Hershberger in reply to zic
          Ignored
          says:

          I don’t think he is equating government regulation with a price-setting monopoly. Those are items on a list, along with “any other authority.”

          We still have incoherence, however. How does the system prevent a monopoly (or, more likely a cartel)? When I have had this discussion in the past, the argument essentially boils down to the claim that such things don’t happen in real life: that they are liberal bogey-men intended to scare the children. This argument suggests a limited study of history. At best one can somewhat plausibly argue that the monopoly/cartel is unstable in the long term, so after some indefinite length of years the situation will resolve itself. This is undoubtedly true, but the long term can be longer than is conveniently hand-waved away. If you aren’t willing to accept this, then the alternative is government regulation.Report

          • Avatar Damon in reply to Richard Hershberger
            Ignored
            says:

            @zic
            “one has to show that any regulation creates a price-setting monopoly.” Nope, what Richard H said.

            Yes, externalities exist, but they exist in ALL forms of markets, so that’s nothing new.

            “The presumption that any government regulation distorts the market needs to be balanced with the possibility regulation might also corrects market distortions.” Ah yes, we’ve had a lot of success fixing market failures by distorting them even more.

            @richard-hershberger
            “How does the system prevent a monopoly (or, more likely a cartel)?” It doesn’t. But we’re not talking about that. We were talking about what “free markets” ARE. However, markets with low levels of entry cost generally aren’t subject to monopoly factors.Report

            • Avatar Richard Hershberger in reply to Damon
              Ignored
              says:

              Fair enough. But surely if we conclude that free markets are as realistic as unicorns sprinkled in fairy dust, this is a relevant point. One might hold the free market as being an ideal, and discuss how best to achieve a reasonable approximation of a free market. But if there is any way to do with apart from government regulation, I have not seen the argument for it. Yet there is great resistance from the free market crowd to any discussion of which government regulations are and are not desirable.Report

              • Avatar Damon in reply to Richard Hershberger
                Ignored
                says:

                Perhaps you’re just not looking hard enough. One of the criticism of statists is that their only solutions is to use gov’t. There’s a problem. Use gov’t to fix it. Undesirable unintended consequence pops up from gov’t intervention. Let’s use gov’t to fix THAT too.Report

              • Avatar Richard Hershberger in reply to Damon
                Ignored
                says:

                This would be more persuasive were the non-governmental alternative actually described.Report

              • Avatar Damon in reply to Richard Hershberger
                Ignored
                says:

                It is….just like I said.Report

              • Avatar zic in reply to Damon
                Ignored
                says:

                In my experience, any time a liberal discusses a problem, non-liberals jump to the conclusion that they must want a ‘law’ or government solution to the problem; this your stereotype of the problems of liberals.

                As to unintended consequences, yes, when we see them in actual laws and policies, we should correct them. Just like in business; if I see an unintended consequence of a business decision I made, I’ll try to correct course. The difference here is that one requires a public process.

                I’ve said this before, but I’ll repeat it: if you are not 1) white and 2) male, your right to full participation is founded in law. The common law that you so value failed me, and I can’t afford to put faith in it. Does that make me a statist? I don’t think so, I don’t want laws governing everything damned thing we do.Report

              • Avatar Damon in reply to zic
                Ignored
                says:

                Stereotypes are effective because they have enough anecdotal evidence to support them. I have never heard a statist recommend a non gov’t, non interventionist solution to a problem. Nor have I heard of any statist recommend removing a regulation when it failed to achieve it’s intended goal. More likely, they double down. This is SOP for bureaucrats.

                Note statist liberal. Both republicans and democrats and liberals and conservatives can, and for the most part, are, statists. “I don’t want laws governing everything damned thing we do.” No, just “some” laws.Report

              • Avatar zic in reply to Damon
                Ignored
                says:

                Well, I’ve recommended eliminating sex offender registries dozens of times on this very blog.

                I’d highly recommend eliminating voter registration requirements.

                I recommend simplifying the tax code, and eliminating the need to file at all if you’re wages are below poverty line for your family size, including for ACA subsidies and earned-income tax credits.

                I’d be all for the elimination of much of the dept. of defense, including most (if not all) bases on foreign soil.

                I do, however, think banking, insurance, medicine, pollution, etc. should be regulated, and I recommend doing so in a way that includes revaluation for externalities and adjustments of problems when they’re identified.

                Now you go ahead and give me some examples of good and or necessary regulation.Report

              • Avatar Oscar Gordon in reply to zic
                Ignored
                says:

                God! Look at all that common ground! A verdant field of fucks, so many we have plenty to give!

                What were we are arguing about again? Oh yes, whose fantasies are better.Report

              • Avatar Kim in reply to Damon
                Ignored
                says:

                Damon,
                Okay, Here’s one. (Well, I’m a liberal. Calling me a statist is a bit of a slur, but I’ll allow it). In order to kill the most amount of puppies possible, the best solution is a very well propagandized (and Profitable!) no-kill animal shelter.

                Done. (Yes, it’s a going concern. I think my friend won the shelter in a bet…)

                And yes, that’s not a state solution, and yes it is a solution to a very real problem of “too many dogs.”

                …. maybe getting the guy who’s been attacked by dogs to run the shelter wasn’t the wisest move if you didn’t want puppies to be killed…Report

              • Avatar Damon in reply to Kim
                Ignored
                says:

                Kim,

                I don’t use “statist” as a slur. I find it’s a better label for people than “liberal” or “conservative” given BSDI. I consider it a higher level descriptor.

                Statist: one you supports using the force of gov’t to enact change, and defauts to that vs seeking alternative methods.. Then below that are liberals and conservatives. They support the use of gov’t to force change but HOW to use it differs.

                No offense was intended. Again, I don’t view it as a slur. Well, certainly not worse than liberal or conservative. 🙂Report

              • Avatar DavidTC in reply to Damon
                Ignored
                says:

                @damon
                One of the criticism of statists is that their only solutions is to use gov’t. There’s a problem. Use gov’t to fix it. Undesirable unintended consequence pops up from gov’t intervention. Let’s use gov’t to fix THAT too.

                See, this is just silly.

                In politics, we are talking about what *the government* should do. We are getting together, and debating government action. *Of course* we’re proposing government action. That is *literally* the purpose of politics, to decide what the government should do.

                If you think something *else* should solve the problem, you feel free to go over to *them* and get them to solve it. Nothing is stopping you.

                Actually, often, those ‘other’ entities already exist, and are already trying to solve the problem, so the question becomes..why do you think that’s working, when the problem still clearly exists?

                Half the time, what libertarians are often trying to say, without actually saying it, is that they think *problems shouldn’t be solved*. That the problem is not real, or big enough to worry about. So they just sorta *handwave* in the direction of some entity that *could* solve it, instead of just admitting ‘We don’t actually think that’s a problem’.

                The other half the time, what they seem to be saying is ‘problems *should* be solved by the government, but in a completely different way and extremely indirect manner, for example via reducing taxes, or involving a random third party for some reason’.Report

              • Avatar Oscar Gordon in reply to DavidTC
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                says:

                DavidTC: Half the time, what libertarians are often trying to say, without actually saying it, is that they think *problems shouldn’t be solved*. That the problem is not real, or big enough to worry about. So they just sorta *handwave* in the direction of some entity that *could* solve it, instead of just admitting ‘We don’t actually think that’s a problem’.

                So that Texas law about abortion clinics having to conform to hospitals (or was it abortion providers have to have privileges at a hospital?), the one the courts just upheld. As a libertarian, I’m going to come right out & say that this is very much a problem that did not need solving, and that the remedy the law provides for this non-problem is a bad thing.Report

              • Avatar DavidTC in reply to Oscar Gordon
                Ignored
                says:

                As a libertarian, I’m going to come right out & say that this is very much a problem that did not need solving, and that the remedy the law provides for this non-problem is a bad thing.

                Well, congratulations on that, I guess?

                I didn’t say that libertarians refused to say *anything* wasn’t a problem. Libertarians say things aren’t problems all the time.

                I said when they said it *was* a problem, *but* then proposed that some sort of mysterious and vague undefined force would solve it instead of the government…half the time what they really seemed to be thinking it wasn’t *actually* a problem, but were unwilling to admit that.

                Being willing to step forward and say ‘Abortions happening in clinics is not a problem and we should not attempt to solve it’ does not prove a willingness to step forward and say ‘Income inequality is not a problem and we should not attempt to solve it’.Report

              • Avatar Oscar Gordon in reply to DavidTC
                Ignored
                says:

                Fine, income inequality* is not a problem, and is actually a good thing.

                Extreme income inequality is not really much of a problem, although it can be indicative of a problem.

                The actual problem is the continuous tightening of the population of people who control the bulk of wealth & property. This new elite/economic aristocracy can be problematic. That is something that needs to be examined for structural problems that enable the concentration of wealth**.

                *To my ear, talk about income inequality on it’s own is a great way to set economic classes against each other.

                **And AFAIK, such concentrations are not in line with a libertarian philosophy, just as monopolies aren’t.Report

              • Avatar Damon in reply to DavidTC
                Ignored
                says:

                ok

                ‘Income inequality is not a problem and we should not attempt to solve it’.

                Happy now?Report

              • Avatar DavidTC in reply to DavidTC
                Ignored
                says:

                Guys, the fact *you* will say it here on a blog where it has no repercussions doesn’t mean that people actually running for office as ‘libertarians’ will say it.

                Also, everyone take note of what has actually been admitted here, because in a couple of months we will be back to libertarians saying ‘Government regulation is not the best way to solve the problem of income inequality.’ instead of them just admitting ‘We don’t want to solve that, as it’s not a problem.’Report

              • Avatar Oscar Gordon in reply to DavidTC
                Ignored
                says:

                Oh, you want a libertarian politician to say that! Well why didn’t you say that?

                Ummm, do we have any libertarian politicians…?Report

              • Avatar Damon in reply to DavidTC
                Ignored
                says:

                “In politics, we are talking about what *the government* should do. ”

                See that’s the issue right there. You’ve already defined the issue one way. Here’s something better: We should be talking about how best to address the problem. Should it be gov’t action or something else? But you’ve already jumped past that initial question to “gov’t must fix this”.

                That’s a pretty good definition of the word “statist”.Report

              • Avatar Kim in reply to Damon
                Ignored
                says:

                Damon,
                No, he’s not. He’s saying the problem space is what the government should (and, importantly, Should Not) do. Libertarians, as a result of their mindset, tend to find the places where government is doing something it shouldn’t. Liberals find places where the government may help matters (R&D on solar WILL lead to less government, via the decentralization of the power grid eliminating the need for utility companies). Is that a use of government that you can support? Long term versus short term can be a bit of an issue for everyone, sad to say.Report

              • Avatar DavidTC in reply to Damon
                Ignored
                says:

                @damon
                See that’s the issue right there. You’ve already defined the issue one way. Here’s something better: We should be talking about how best to address the problem. Should it be gov’t action or something else? But you’ve already jumped past that initial question to “gov’t must fix this”.

                As I said before (Edit: although possibly not in this discussion. Hrm.): The only way ‘we’, as in society, have to do *anything* is via the government. There is not some other ‘us’, we are not a hive mind.

                And while *this place* is not specifically politics, it’s worth pointing out that politics *is* politics, and politics is about what actions the government takes. That is, again, all elected officials have control of. Of course everything an elected official proposes to solve problems is going to relate to the government….that is the only power they have to solve problems.

                As someone who is extremely liberal: Literally this week, in some other discussion here, I explained why how, in about two decades, a lot of crime was going to vanish without the government doing a thing at all, and even possibly the government standing in the way. (Specifically, if everyone can record a 24/7 video record of their life that the courts are barred from accessing, but they can turn over parts of if they want. All eye witnesses suddenly have perfect recall, and everyone except the criminal has an alibi. Crime over.) The idea that some people can’t see any solution *except* government solutions is nonsense.

                But when we talk about *politics*, it’s in the framework of *politics*, which is, by definition, what the government should do.

                And, of course, all this is basically nonsense, because libertarians are attempting to alter the government as much as, or even *more*, than everyone else…they’ve just decided there’s a fundamental difference between altering it in one direction vs. the other, or decided that altering the government so that a private solution is more likely to appear somehow doesn’t count as ‘government action’.Report

              • Avatar Damon in reply to DavidTC
                Ignored
                says:

                “The only way ‘we’, as in society, have to do *anything* is via the government. ”

                So i stopped right there, because that’s your baseline reaction that “we” doing something has be through gov’t.

                no…we….do….not.
                “we” can do something together outside of gov’t. You know, like people used to to back in they when the community got together to build a barn. Did we hire a bunch of contractors to build that barn and tax everyone to pay for the labor? No. Everyone came together, or not, as they chose, and helped or not build that barn.Report

      • Avatar LWA in reply to Damon
        Ignored
        says:

        @damon
        This is part of the incoherence I see, similar to what zic sees and the poor use of language.
        First, you say that “free markets” don’t exist in contemporary societies like USA or Scandinavia;

        OK, so then you go on-
        “in which the laws and forces of supply and demand are free from ANY intervention by a government, price-setting monopoly, or other authority.” (caps mine)

        ANY intervention? ANY at all, ANY whatsoever?

        How should a reasonable person interpret this, then, when a person says they want “free markets”?

        Doesn’t it seem reasonable that they are asking for the total abolition of the state, since, you know, the state establishes the very definition of property, and regulates how property is handled in markets, and decides what contracts the state will or won’t adjudicate.

        What is it you are really saying here? What is this magical trigger or line that separates the market free of ANY intervention, from the bastardized market you don’t want?

        ETA- I see Richard H has covered some of my points; I only add that Damon’s definition of “free market” is not only different than what most economists and lay people use, its different even from other libertarians. So much discussion becomes pointless talking past each other, everyone referring only to their own definition.Report

        • Avatar Damon in reply to LWA
          Ignored
          says:

          “ANY intervention? ANY at all, ANY whatsoever” Yes. That’s why it’s called a free market. Really, my definition is SO different. Hell, I pulled that from wikipedia. As I recall, it’s basically the same thing that was described in my econ classes.

          Of course it doesn’t exist currently. One could argue it did in certain circumstances “back in the day”. I don’t know where you get the idea that the state establishes the concept of property. That’s been hashed out a lot on libertarian sites.

          How should a reasonable person interpret this, then, when a person says they want “free markets”? Well, I never said I wanted free markets. I provided a definition. I said, perhaps not here, but in other places, that it was a GOAL. I use the term “freer markets”.Report

          • Avatar LWA in reply to Damon
            Ignored
            says:

            “Freer” markets is like “Onerous” regulations, meaning nothing.

            See, this is why most libertarian arguments go in circles- there are just fragmentary thoughts, platitudes like “Things should be more voluntary/ more free” which mean nothing because they are unfalsifiable or the classic tautology of the NAP.

            They are fragments, because they are aimed at nothing in particular. Which regulations should the market be freed from, and what would be the consequences? How would property claims be enforced absent a state?
            The question inevitably gets answered with ever more astract and utopian visions, with massive leaps of faith and logic that would make a creationist blush.

            Many regulations for example, regulate how property claims are established and recognized- recording of deeds, their proper form and content; how real estate sales contracts are handled, how liens are created and enforced and so on and so forth.
            Should we sweep these away? I doubt many libertarians want to do this- but who knows and how can we tell?

            There isn’t a consistent logic that guides us to a generalized principle- libertarian position can be anything from wanting merely to fiddle with the capital gains tax slightly, or the complete abolition of the state- its everything and nothing all at once, it can support or oppose nearly anything.Report

            • Avatar Oscar Gordon in reply to LWA
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              says:

              Have you not listened to a single libertarian on this site talk about specific, concrete examples of bad regulations & classes of regulations that are problematic?

              I know you have, because I’ve seen you discussing such things with me, with others, even acquiescing the problems.

              Stop being an ass.Report

              • Avatar LWA in reply to Oscar Gordon
                Ignored
                says:

                There are in fact libertarians who hold that we should merely trim the size and scope of the state, while leaving it more or less intact. I disagree with them, but acknowledge they have coherent positions.

                I’m criticizing the ideological fixation that jumps from “this regulation is bad” to “Regulations are bad” to “The state is unnecessary”.

                This isn’t nutpicking- this is an idea well within mainstream libertarian thought.
                But like all stateless utopias, it disappears into a fog the more you try to grab hold of it.Report

              • Avatar Oscar Gordon in reply to LWA
                Ignored
                says:

                And many mainstream liberals would like X, where X is a nice ideal/target that is very attractive to them but is practically unworkable, yadda yadda yadda.

                Most libertarians, even fans of the stateless utopia, are more than cognizant of the unworkability of the distant ideal, just as most liberals are cognizant of the same within their own ideology.

                How’s about instead of sniping at each others distant fantasies, we work together on the problems at our feet, figure out our areas of common ground, has out some compromises that nobody is happy with but that get the job done, and try to be nice to each other?Report

              • Avatar LWA in reply to Oscar Gordon
                Ignored
                says:

                @oscar-gordon

                I understand completely- there is the idealized pure free market without any sort of state, then there is the modified version we have right here today.

                But that is exactly my original point- the thing on the New York Stock Exchange is the Scotsman, and the thing in Galt’s Gulch is the True Scotsman.

                Which wouldn’t be a problem except- as illustrated by the dozen or two comments following mine- there is this interweaving and deliberate confusion of the two.

                Why is there so much wealth in America? Because we have the Free Market!

                Why is there a persistence of poverty in America? Because we don’t have a Free Market!

                And around and around it goes…Report

            • Avatar DensityDuck in reply to LWA
              Ignored
              says:

              “Many regulations for example, regulate how property claims are established and recognized”

              “established common practice codified into law” is not the same thing as “regulation”.Report

              • Avatar Mike Schilling in reply to DensityDuck
                Ignored
                says:

                No, regulations are evil.Report

              • Avatar LWA in reply to DensityDuck
                Ignored
                says:

                @densityduck

                How is that not an arbitrary and ideological difference?
                E.G.
                A common law ruling that states that all property have a natural right to street frontage: Good.
                A state regulation that all properties must include street frontage: Bad.

                I’m dwelling on this point because for most of the people I encounter, what seems like broad philosophical concepts derived from reason are really just personal moral preferences.

                Like how “fiscal conservatives” will gas on at length about Burke and Jefferson, Mises and Hayek, when really, they just object to TANF and SNAP and not much else.

                Or how “free market” advocates rail against regulation when really, its regulation that hinders the action of property owners over consumers, employers over employees, and the rich over everyone else.

                Like how is it that “free trade” agreements require 1,000 pages of new laws and regulations? How come the agreement isn’t just “We, the undersigned agree not to restrict any behavior by people wishing to produce and trade goods”?

                Because “free trade” like “free market” requires enforcement and compliance with laws and regulations so as to ensure rights are protected.Report

  7. Avatar DensityDuck
    Ignored
    says:

    Everybody’s a literalist. We’re just literalist about different things. Some people are quite literal about “well-regulated militia”, for instance, but not so much with “interstate commerce”.Report

  8. Avatar LeeEsq
    Ignored
    says:

    PBS is funded the way it is, through pledge drives and donations, because American conservatives did not want to create the American equivalent of the BBC. (This is in response to Todd’s links about NPR and public broadcasting).

    A lot of the arguments against NPOs made by certain conservatives and libertarians is basically tribal. They closely associate the United States and the Constitution with free market capitalism. Anything less than their version of free market capitalism is ipso facto un-American. They also see NPOs, especially public broadcasters, as being inherently liberal. Since liberalism is ipso facto un-American in their world view than NPOs are explicitly revolutionary, subservice organizations. Its the same impulse that leads some conservatives to denounce kid’s movies that are basically product placement as anti-capitalist.Report

    • Avatar Kolohe in reply to LeeEsq
      Ignored
      says:

      PBS is funded the way it is, through pledge drives and donations, because American conservatives did not want to create the American equivalent of the BBC.

      I’m skeptical of this framing. The Corporation for Public Broadcasting was created out of legislation passed in the tail end of the Great Society (i.e. 1967, when Johnson had lost a lot of seats in the 66 midterms but still had control of the agenda). It’s main backers were Dead Plutocrat Foundations that had got into the not-for-profit educational TV &radio biz and were looking to get out of the nuts and bolts of running things (and paying the entire bill).

      In the 60s, the BBC was more than just a ‘public option’. It had government enforced monopoly on radio broadcasts, and TV production was (and is) famously bankrolled not from progressive taxation, but on a license fee paid by every TV set owner. So putting general funds into CPB is *more* progressive than how the UK did it.

      The whole BBC enterprise was and is a legacy of the early to mid 20th British practice of *actual* socialism – i.e. State ownership of the means of production in several industries – and which was starting to ebb by 1970 until reaching a tipping point toward privatization when Thatcher came into power. This dynamic was never a thing in the US overall, or in broadcasting in particular.Report

  9. Avatar Burt Likko
    Ignored
    says:

    Bear in mind that “literalism” is not necessarily the same thing as “originalism” or “textualism.” The Constitution only refers to the President with masculine pronouns: does this mean that women are not eligible to serve as President since a woman cannot be a “he” or a “him”? A risible proposition indeed!

    But, once you allow for the possibility of a female President, now you aren’t reading the text “literally.”

    Once you allow for the possibility of a female President, you aren’t sticking to the original understanding of the Framers, who to a man would have gasped and guffawed at the idea of a female President. (Except maybe for John Adams.)

    Once you allow for the possibility of a female President, you’re using a contemporary understanding of the way the text of the Constitution uses the masculine pronoun: like a modern person, you’re including the feminine within the masculine so as to be inclusive of all people. This is the sort of textualism I advocate and have done so here for a long time. Of course we can have a woman President. Isn’t that obvious?

    So of course, the OP and its author, by eschewing Constitutional literalism, demonstrate wisdom, intelligence, alacrity, and justice — because they agree with me.Report

    • Avatar Mike Schilling in reply to Burt Likko
      Ignored
      says:

      If the prospect or interracial marriage was brought up at all when the 14th Amendment was being debated, it would have been as a scare tactic, with the amendments’ proponents denying in the strongest terms that it could ever be construed to invalidate anti-miscegenation laws. So I don’t want to hear about how those same lawmakers couldn’t possibly have intended it to support the legality of SSM: been there, done that, caught the bouquet. I’m also not interested in hearing about how the overweening federal government is trampling states’ rights by supporting the rights of individuals.Report

    • Avatar Kim in reply to Burt Likko
      Ignored
      says:

      Maybe Franklin would have listened too. The old skirt chaser…Report

  10. Avatar DavidTC
    Ignored
    says:

    because all non-profit and charitable organizations are by their very definition rent-seekers

    Erm, how?Report

    • Avatar Tod Kelly in reply to DavidTC
      Ignored
      says:

      This is a bit tricky to answer, since ‘rent seeking’ appears to mean many different things to different people (see the main point of the OP above), but for the sake of ease let’s just assume that the definition Google gives us is workable enough for this conversation:

      “When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.”

      This is almost by definition what a non-profit organization does.

      Nonprofits, remember, are only non-profit in terms of restrictions with investors. They’re not companies that don’t make a profit, and in fact those that aren’t profitable go out of bunnies’ just like everyone else. They compete against, to one extent or another, against for-profit companies in the marketplace, and part of how they do that is to have legislation that skews the market to their advantage.

      They don’t really give back to society via the creation of wealth, or at least not in any non-indirect way that you couldn’t argue any other rent seeking organization does.Report

      • Avatar Burt Likko in reply to Tod Kelly
        Ignored
        says:

        Who says non-profits don’t reciprocate benefits back to society through wealth creation? We need to define “wealth,” of course, and if “wealth” means “dollars” then I guess that might be right. (Or not, but that takes a rather special sort of non-profit.)

        But if “wealth” means “valuable goods and services,” then it may very well be the case that a nonprofit takes from a willing donor, say, $10,000 worth, and then generates food to distribute to the hungry. The food that it distributes may well be worth more than $10,000 by the time it reaches the end user by virtue of being cooked and distributed. And, every hungry mouth fed by the nonprofit is not a hungry mouth that has to be fed by way of social welfare.

        Not to mention that, of course, people are employed along the way. Even if you disbelieve in the economic multiplier effect, it is still the case that people earn compensation. Whether that be professionals running the nonprofits, or in the case of Goodwill people using the nonprofit as a “starter” or “re-starter” job, they get money and that gets spent on other goods and services (and doesn’t have to be made up for in social welfare).

        Not to get all “thousand points of light” on y’all, but I suspect it may be the case that nonprofits are indeed economically efficient.Report

        • Avatar Tod Kelly in reply to Burt Likko
          Ignored
          says:

          Then I’m confused. Can you give me an example of a rent seeking corporation that you could not make a similar argument about?Report

          • Avatar Gabriel Conroy in reply to Tod Kelly
            Ignored
            says:

            This is a historical example, and not of a non-profit, but US Steel, which benefited from tariffs on steel. The “rent” was the amount it could charge over what it would have had to charge if it competed with non-US steel corporations.Report

            • Avatar Tod Kelly in reply to Gabriel Conroy
              Ignored
              says:

              Great example.

              So, that rent would kind of be like that money that non-profit would have to charge its customers if they didn’t receive advantageous treatment from the tax code, or donations from people who got to write that money off their own taxes, or subsidized wages, or federal grant money. Yes?Report

              • Avatar Gabriel Conroy in reply to Tod Kelly
                Ignored
                says:

                Maybe. I haven’t thought it through.

                I think part of the equation is who’s competing against whom and for what. Is Goodwill competing against Target? In a sense it is, and one reason I do most of my clothes shopping at Goodwill and not Target is because the clothes at Goodwill are cheaper, and one part of the reason that they’re cheaper is the tax breaks and whatever. Another reason is that they take donated clothes while Target does not. And frankly, if I had a job where I had to dress up, I’d probably shop more at Target because it’s harder to find clothes just my size at Goodwill. (I still shop at Goodwill because I like to wear oversized clothes….not always acceptable at jobs with stricter dress codes.)

                Are Goodwill and Target competing for employees? In a meta-sense, maybe, in that the more people Goodwill employs, the fewer job seekers there will be. But I understand that part of Goodwill’s mission is to help people find work who might not otherwise be hired at places like Target.

                But contrast all that with, say, credit unions. They seem more rent-seeky to me because they seem to be more in competition with banks, at least when it comes to things like securing deposit accounts and small loans. I would need to know more about cu’s before opining further, though.Report

              • Avatar DavidTC in reply to Gabriel Conroy
                Ignored
                says:

                But contrast all that with, say, credit unions. They seem more rent-seeky to me because they seem to be more in competition with banks, at least when it comes to things like securing deposit accounts and small loans. I would need to know more about cu’s before opining further, though.

                Yes, the credit union, owned jointly by the account holders, which does not distribute any sort of profit to the owner and thus lets the account holder keep more of their money…is more ‘rent-seeky’ than the bank, owned by random people, who takes a certain percentage off the top and distributes it to the owners.

                Sure, let’s pretend that makes sense.

                Does *anyone* here actually know what ‘rent-seeking’ means?Report

              • Avatar Gabriel Conroy in reply to DavidTC
                Ignored
                says:

                I’d go with Tod’s definition above as a start.Report

              • Avatar DavidTC in reply to Gabriel Conroy
                Ignored
                says:

                @gabriel-conroy
                I’d go with Tod’s definition above as a start.

                Which is:
                “When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.”

                So your assertions is that banks create wealth, and credit unions don’t?

                I’d love to hear the logic on that one!

                It is possible to argue that both banks and credit unions create wealth, by providing loans and whatnot. And banks and credit unions do this equally. (However, this argument is somewhat bogus. You don’t create wealth because you hold people’s money and give it out to others to create wealth. You might be a net positive, but you are not ‘creating wealth’.)

                OTOH, providing a service of ‘safe, accessible money’ is arguably a ‘service’, which would be creating wealth. However, banks and credit unions do this *equally*, so again, no idea what you’re talking about.

                In reality, both credit unions and banks are both slight rent-seekers. A system has been set up where people need one of those to keep their money in, so banks/credit unions operate sorta as parasites, sucking money out of the pockets of people in return for not very much. People don’t use banks/credit union because of the ‘service’ they’re buying, they use them because systems have been put in place basically requiring the usage of them. (Hell, the government asserts the right to just *take* cash from people, no justification needed.)

                And credit unions take *less* money from account holders, because they don’t have owners they need to pay. (Or, rather, the owners are the account holders.) Which logically makes them *less* rent-seeking.

                I think it is worth pointing out that *paying stockholders* does not, in any way, shape, or form, count as ‘wealth creation’. They can, of course, be paid with proceeds *from* wealth creation, but the actual act of issuing dividends is not ‘wealth creation’.Report

              • Avatar Gabriel Conroy in reply to DavidTC
                Ignored
                says:

                So your assertions is that banks create wealth, and credit unions don’t?

                Actually, I think banks are rent seekers, too, but probably for different reasons from what you suggest in the other part of your comment. (And so passeth my knowledge of rent-seeking and banking.)Report

              • Avatar DavidTC in reply to Tod Kelly
                Ignored
                says:

                Why do you think non-profits have ‘subsidized wages’? Please explain where you got this idea.

                Why do you think non-profits have ‘advantageous treatment from the tax code’? You do realize that *any* company (non-profit or for-profit) that makes no profit in a year pays no income tax, right? (It’s just non-profits are barred by law from distributing a profit, so *can’t* owe any corporate income taxes.)

                The Federal tax advantages of non-profits are thus: If they are 501(c)(3) organizations, aka ‘charities’, donations *to* them are tax deductible. And state law usually exempts such organizations from property tax and paying sales tax. That’s it.

                And, finally, government grants to nonprofits are basically a myth. (Hell, *grants* are almost a myth.) I mean, take the National Endowment for the Arts, the *largest* grant-giver (Both government and private) to non-profits. They spend a grand total of $150 million a year in grants, which is basically nothing compared to the US budget.

                Meanwhile, Pell grants are $30 *billion*. And to pick a random industry, coal received $100 *billion* in subsidizes.

                Yeah, the government sure is tilting the playing field towards non-profits.Report

              • Avatar Kim in reply to DavidTC
                Ignored
                says:

                David,
                I’m pretty sure you get TONS of grants for making Meaningful Use.Report

      • Avatar dragonfrog in reply to Tod Kelly
        Ignored
        says:

        I’m not sure how you can argue that a non-profit doesn’t create wealth but a for-profit does.

        Unless they’re the federal mint, they don’t create money that wasn’t there before – they have incomes and expenditures, and they are bound, unlike for-profits, not to have surpluses out of which to pay dividends to their owners. But they same amount of money comes in as goes out, like with all businesses.

        Is the alleviation of poverty not a creation of wealth? Granted, a charitable organization doesn’t require the recipients of those “dividends” to buy in in the first place, but they’re still increasing someone’s wealth, right? They don’t accumulate wealth, but that’s something else.

        Perhaps I’m not understanding what you mean by the creation of wealth.Report

        • Avatar Saul Degraw in reply to dragonfrog
          Ignored
          says:

          @dragonfrog

          There are some not entirely invalid and maybe more valid than we would like arguments that non-profit work hinders native economies. I’ve heard this mainly in the case of developing economies. No one eats Haitian rice because they prefer American and Asian donations. Clothing donations to Africa hinder the development of domestic textile industries in the African economy.Report

          • Avatar DavidTC in reply to Saul Degraw
            Ignored
            says:

            @saul-degraw
            There are some not entirely invalid and maybe more valid than we would like arguments that non-profit work hinders native economies. I’ve heard this mainly in the case of developing economies. No one eats Haitian rice because they prefer American and Asian donations. Clothing donations to Africa hinder the development of domestic textile industries in the African economy.

            It’s less ‘non-profits’ causing the problem as ‘free stuff’ causing the problem. It doesn’t really matter how it gets provided…there’s as much problems if for-profit companies just dump surplus stuff into those economies for a tax write-off. (All those losing team sporting shirts go somewhere.)

            Economies cannot function if everything appears out of thin air for free….which would be perfectly fine if everything actually *did* appear out of thin air (Aka, a post-scarcity economy), forever, but this is not actually true.

            Of course, this is a pretty hard problem to solve. You could, instead of providing imported food, pay farmers to grow it and give that away…but now you’ve screwed up the price for people who should actually be able to buy it, and probably caused inflation.

            The real problem is one of scale. If there are five hundred meals eaten in an area a day, charity providing another 20 meals is perfectly fine. But charity providing an infinite amount of free meals breaks the system.

            The best sort of charities provide something that the people absolutely cannot make themselves, like various medicines or mosquito netting. Or, even better, combine that with capital that allows people to make things they already can make, but better. Like give a village some solar powered electricity…it’s not like there was some guy making solar panels in his backyard you undercut. If the problem is food, then give all the local farmers access to fertilizers or something.Report

        • Avatar Oscar Gordon in reply to dragonfrog
          Ignored
          says:

          You are confusing wealth with money.

          Short example. An author writes a book over the course of a year. Their total expenses (food, shelter, etc.) is $100K. They put the book up on Amazon, pay the fee, etc. for Amazon, and by a stroke of luck the book is a hit, selling lots of copies. Author rakes in $500K.

          That $400K of profit is created wealth.Report

          • Avatar dragonfrog in reply to Oscar Gordon
            Ignored
            says:

            Well it’s profit, which by definition a nonprofit doesn’t make. But they still pay rent on their premises, wages for their employees, etc. They still cause money to circulate through the economy, there’s just one particular flow of money that doesn’t happen – diverting money from the activity of the business to pay investors. I’m not sure why that would depress the economy.

            The example discussed above seems not to be based on the profit vs nonprofit status so much as on the activity of the business. Walmart is accused of depressing economies in the same way.Report

            • Avatar Oscar Gordon in reply to dragonfrog
              Ignored
              says:

              @dragonfrog

              Oh, sorry, I misunderstood your question.

              DavidTC lays it out rather well elsewhere in this thread. In short, a properly run social service charity increases wealth by enabling people to become net contributors to the economy, instead of liabilities. Goodwill does it by helping people become employable, the Red Cross does it by helping people recover from a disaster, etc. Sometimes the benefit is not always obvious, but unless it’s a complete scam, or an elite jobs program, or a vanity charity, it’s going to do more good than not.Report

              • Avatar DavidTC in reply to Oscar Gordon
                Ignored
                says:

                @oscar-gordon
                DavidTC lays it out rather well elsewhere in this thread. In short, a properly run social service charity increases wealth by enabling people to become net contributors to the economy, instead of liabilities.

                That was not really my point. While charities do that, my point was that the actual charitable behavior of charities almost always involves some form of actual wealth creation.

                In a soup kitchen, donated money is used to purchase raw food, which is cooked. This is creating wealth. At a blood bank, a renewable natural resource is harvested that would otherwise be wasted. This is creating wealth. In Habitat for Humanity, raw materials are turned into houses. This is creating wealth. A youth group might make and sell some nick-nack to fund a trip. This is creating wealth. Etc, etc.

                The charity I volunteer at is a non-profit theatre, and we produce plays, which we then sell tickets to. This, too, is creating wealth. (Yes, services are a form of wealth.)

                Charities don’t just accept donations of money. They accept donations of time, which means they have ’employees’, and those ’employees’ are almost always doing things that *create wealth* on behalf of the charity. (Which might be given away, or sold as fundraising, or whatever…but that’s not important.)

                And these time donations, because people are not getting paid for them, are usually in *addition* to normal jobs and stuff. I.e., any other wealth production does not suffer, the economy essentially gets added wealth production while having the same amount of people doing labor. It’s magical added wealth creation.

                Now, there *are* charities that just take in money at one end, and hand it out at the other, creating no wealth in the middle. But I suspect a large portion of those charities are scams, and you’ll always find, somehow, that they end up paying their own people a lot of overhead even if not actually ‘a scam’. Those are the charities to stay away from.

                Back to your point, on *top* of that wealth creation, a lot of charities do help the economy by, as you said, acting as a stopgap to various problems people might be having.

                And pretty much none of this is ‘rent-seeking’, as far as I can tell. Even the charities that exist to just pass money along…they exist *off* rents, I guess, but no one *forced* people to give money to them instead of the charities that they passing just a fraction of the money to. (Scammy pointless middle-man behavior is not automatically ‘rent-seeking’.)Report

              • Avatar Oscar Gordon in reply to DavidTC
                Ignored
                says:

                Sorry David, didn’t mean to imply that my example was the be all, end all. I was typing on a phone while my 3 year old was asking me questions. Brevity won out.Report

              • Avatar DavidTC in reply to Oscar Gordon
                Ignored
                says:

                Well, no, I’m glad you commented, because you’re right…not only do charities create wealth, like I said, they also impact productivity in a lot of other positive ways.Report

        • Avatar Kim in reply to dragonfrog
          Ignored
          says:

          M3 means that banks, by floating loans, are indeed creating wealth.Report

      • Avatar DavidTC in reply to Tod Kelly
        Ignored
        says:

        Okay, so @tod-kelly ‘s answer to ‘How?’ is ‘Tod does not know what rent-seeking is.’.

        Making money via rent is when someone owns something, and, instead of actually using that to generate wealth themselves, make money by renting it to others.

        Rent *seeking* is generally when that happens via things people would be perfectly happy to own, but the system is set up otherwise, either via monopolies or laws. This has been generalized to things past ‘rent’, people inserting themselves into a system and providing no benefit at all, just leaching money out of it.

        That…doesn’t describe any non-profits. Not only are they not ‘rent-seeking’, almost no non-profits is in the business of renting out anything at all, or trying to make it where you have to pay them for no apparent reason.

        Non-profits, in fact, mostly exist to generate wealth, which they do via some people donating their money, and other people donating their time to turn that donated money into *more* wealth.

        There are plenty of for-profit businesses that do not generate wealth. Entire industries.

        There are very few non-profits that don’t. (Mostly the sort of scammy charities that simply pass on 80% of your donation to another charity, and uses the rest to pay their people.)Report

        • Avatar aaron david in reply to DavidTC
          Ignored
          says:

          You’re pretty much on target, with only the specific action of seeking political favoritism as the mechanism missing. And yes, both for-profits and non-profits do this, but I do think this would be more common on the for-profit side. We libertarians oppose this on both fronts. Not because businesses are trying for greater market share, but because of gov’t favoritism.

          Edited for a grammar error that was galling.Report

          • Avatar DavidTC in reply to aaron david
            Ignored
            says:

            You’re pretty much on target, with only the specific action of seeking political favoritism as the mechanism missing. And yes, both for-profits and non-profits do this, but I do think this would be more common on the for-profit side.

            There are a lot of non-profits where ‘rent-seeking’ doesn’t even make sense as a goal, because ‘getting more money’ doesn’t make much sense as a goal, and certainly not any sort of *personal* goal.

            For-profit owner: Hey, if I manipulate the system so people are forced to pay the organization money for no reason, I can make $X more a year!
            Non-profit volunteer: Hey, if I manipulate the system so people are forced to pay the organization money for no reason…uh, the non-profit can buy more food to give away?

            As I’ve mentioned before, non-profits have a hell of a lot less reason to ‘cheat’ in a lot of ways. People break laws, or get their employees to break laws, when it *personally benefits* them. No one’s going to run around ordering non-profit employees to break laws.

            And on top of that, a lot of non-profit work is done by volunteers anyway, and I’m pretty certain the people in charge of the non-profit demanding those workers break the law or ‘get fired’ would just be met with laughs as the volunteers walked out the door and over to the police.

            For-profits are structured in such a way that there is incentive to cheat in various ways. Non-profits are not. When non-profits *do* start cheating, it’s usually because the non-profit *itself* is a scam, something that exists solely to give a certain person a nice high executive salary, and that person wants a higher one.

            Now, sometimes non-profits do rent-seek. For example, in the UK, the book Peter Pan is perpetuity copyrighted via specific law (It would have otherwise expired) to a non-profit that uses those licensing fees as part of their budget. And, in a very odd sense, the Post Office could be considered a rent-seeking non-profit.

            But that sort of thing is pretty rare, and it’s usually something specifically set up *for* that purpose, by the government, and it’s really just a very odd way to do taxes and spending. It’s not something existing non-profits try to make happen.

            We libertarians oppose this on both fronts. Not because businesses are trying for greater market share, but because of gov’t favoritism.

            …although, of course, libertarians are legally required to have a blind spot about how current ownership distribution is the end result of centuries of political favoritism, and thus the government enforcing that *at all* is a form of rent-seeking on the part of the people who claim to own everything. 😉

            Kidding not kidding.Report

            • Avatar aaron david in reply to DavidTC
              Ignored
              says:

              ” No one’s going to run around ordering non-profit employees to break laws.”
              The Clinton Foundation would like a word with counsel…

              As for “centuries of political favoritism,” we would like to at least move in the direction of ending it, absent Dr Whom actually being real.Report

              • Avatar DavidTC in reply to aaron david
                Ignored
                says:

                Technically, no one at the Clinton Foundation is accused of committing any crimes. No one there who accepted any checks *there* did anything illegal, even if the allegations are 100% true. Despite the news media often being confused about this.

                The alleged illegality come from the behavior of Hillary Clinton trading favors *for* those donations, which doesn’t require *anyone* at the Clinton Foundation to do anything illegal, or even understand what was going on. Non-profits don’t call back donors and says ‘Was this donation actually an attempt to get Hillary Clinton to send government contracts your way?’

                Now, the CF *could* have been in on this alleged misbehavior…but why?

                Not that I actually believe these allegations. There seems to be a lot of unsourced ‘Everyone knows the way to get what you want to was to donate to the CF’, but no one who *donated* appears willing to step forward and say that. (And you’ll forgive me if I stopped believing random unsourced rumors aimed at the Clintons two decades ago.)Report

              • Avatar Kim in reply to DavidTC
                Ignored
                says:

                *snort* This is the Clintons, they play nice. They don’t send their enemies to jail, they cross them off their Christmas List.

                Don Barbara on the other hand…Report

            • Avatar Mike Schilling in reply to DavidTC
              Ignored
              says:

              libertarians are legally required to have a blind spot about how current ownership distribution is the end result of centuries of political favoritism

              The “Coase” Theorem (scare quotes because Coase himself say it isn’t his) “proves” that they don’t have to, because the initial state doesn’t matter.Report

  11. Avatar Saul Degraw
    Ignored
    says:

    @tod-kelly

    Here is the real problem with non-profits, they engage in hippie punching!

    http://www.northcoastjournal.com/humboldt/the-war-on-hippie-christmas/Content?oid=2928213Report

  12. Avatar Brandon Berg
    Ignored
    says:

    I don’t have time to get into the substance of the post, and it looks like it’s been mostly retracted anyway, but I’m a bit surprised that no one has pointed out that Adams and Jefferson wrote the Declaration of Independence, and were not involved in the Constitutional Convention, both having been in Europe on diplomatic work at the time.Report

  13. Avatar Kazzy
    Ignored
    says:

    Ugh… you couldn’t even get the strikethrough right… sigh… :-p

    FWIW, re-reading Vikram’s post, I see my name was brought up quite a bit. My ignorance about Goodwill was mostly present when I was a child. I didn’t even know it was a store. I just knew that we filled bags with clothes for poor people. I just assumed the clothes went directly to poor people to wear. Once I learned it was a store — probably during college? — I understood it much better and figured anyone who wanted to could shop there but it was far more likely that poor folks would. Eventually, I understood the full purpose of it.Report

    • Avatar Chris in reply to Kazzy
      Ignored
      says:

      Yeah, your childhood perception of any business, for-profit or otherwise, is probably not a good measure of anything.

      I admit that I’m still surprised that there are grown-ass people who don’t, or didn’t know what Goodwill does, but I guess “worldly” or at least “engaged with the world” are not as common as I thought, particularly among folks with money.

      We should make everyone ride the bus.Report

      • Avatar Kazzy in reply to Chris
        Ignored
        says:

        @chris

        Well, I think it’d be fairly easy to get pretty far in life and simply never interact with a Goodwill store ESPECIALLY if you have money. The problem is, when we say “worldly”, we’re usually talking about particular worlds… and not the kind that are serviced by buses and Goodwill stores.

        I’m actually mentally writing a post about how being pro-‘intellectualism’ (as opposed to being ‘anti-intellectualism’ means calling my 2-year-old son a dick because you’re really just talking about a VERY narrow band of intellect. Should be fun!Report

  14. Avatar DavidTC
    Ignored
    says:

    This is some stuff I’ve mentioned in various places in the comments, but I thought a top level comment might help:

    Non-profits are not subsidizes *anywhere* near as much as people seem to think.

    Non-profits do not make any net corporate income, and hence would not pay any corporate income tax *even if they were a for-profit*. It would be perfectly possible to create a for-profit company, owned by a particularly charitable dude, that did not have an net income, and paid no income tax. (Hell, it’s easy enough to *hide* income and pay no property tax, considering how a lot of large corporations do it.)

    As for tax deductions…let’s look at Goodwill.

    Donations to Goodwill are tax deductible…and do you know how many people actually *take* those tax deductions? Probably somewhere around 20%. (Yes, I plan to deduct the *three dollars* worth of clothes I donated off my taxes. I’m sure it’s worth keeping up with a receipt for that. If I donate half of what I own, it might come to enough that it’s worth itemizing deductions!) And *then* we have to ask the question: Of the people who did deduct, how many of those people would *not* have donated without the tax deduction? A quarter of the 20%?

    Percentage-wise, this incentive is…nothing. It’s meaningless.

    The reason that tax deductions to non-profits exist is not for things like donating junk to Goodwill, because normal people don’t care about the slight tax help. (Which is not really help, because they don’t itemize deductions.) It’s to encourage *rich people* to donate to reduce their tax liability…and rich people are not donating to these ‘competing’ non-profits like Goodwill, they’re donating to places like, uh, Harvard, apparently. The only place normal people *might* run into it at all is via large-ish regular donations at their church…which, again, not competing with businesses.

    That’s all the Federal help…let’s look at local help.

    First, there’s sales tax. In almost all locales, non-profits that are selling things have to collect sales tax, just like everyone else. However, they *sometimes* get an exemption on buying stuff for their own use, like shelves and printer paper and stuff. (And, of course, if they buy things to resell, they don’t have to pay sales tax when they buy it, just like all businesses.) I am not sure how large this exception comes to, or how common it is, or how often non-profits use it.

    Now, there is one exemption that does matter a bit…Goodwill is probably not paying property taxes on their store properties, which can be quite valuable commercial properties that should be bringing in tax revenue. (Goodwill is sorta weird here…almost all non-profits that own real estate are churches or schools, or non-profits that exist *to* operate a building. Other non-profits rarely run around buying real estate. At best, they have a rented office somewhere, and many not even that.)

    So basically both the tax exceptions that matter (maybe, maybe not) for non-profits are both local ones, which makes it really odd the two tax exemptions people think of for non-profits are the Federal ones. (The income tax thing isn’t really an exception at all!)

    Addendum: And also government grants to non-profits do not exist in any meaningful sense. The largest grant-giver in the US (private or government) is the National Endowment for the Art. They get $150 million a year in government money. This is, proportionally, literally pocket change…and it’s *not just* for non-profits.

    The oil industry gets $100 *billion* in subsidizes.Report

    • Avatar zic in reply to DavidTC
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      says:

      It would be perfectly possible to create a for-profit company, owned by a particularly charitable dude, that did not have an net income, and paid no income tax. (Hell, it’s easy enough to *hide* income and pay no property tax, considering how a lot of large corporations do it.)

      I know this is state law; but some states require that corporations be profitable after so many years (3 in mine,) or be dissolved. I don’t recall if there’s federal tax law here or not; but corporations are created at the state level, so I presume it’s mostly going to be state law, and that there will be some variety.Report

      • Avatar Kim in reply to zic
        Ignored
        says:

        They do the same thing for nonprofits, particularly ones that the state has an interest in.

        Another link:
        http://www.post-gazette.com/business/businessnews/2013/04/10/Highmark-reports-15-2-billion-in-revenue-net-profits-slide/stories/201304100153Report

      • Avatar DavidTC in reply to zic
        Ignored
        says:

        I’m pretty sure the rule is that they *not* be *unprofitable*, not that they actually return profits to anyone.

        That said, they could easily make a single dollar profit and not *really* pay any income taxes.

        You guys really focused on the ‘not pay taxes’ things, didn’t you? That isn’t actually the point…the point is how stupid the concept of suing a business that is given the ‘special right’ of not paying income taxes…when, in reality, *no* business has to pay income tax when it has no profit.

        I.e., you can come pretty damn close to constructing something like Goodwill as a for-profit company and it wouldn’t pay *much* more taxes than it does currently. (And those wouldn’t be income taxes.)

        It’s pretty much exactly akin to a guy suing an 11 year-old because she don’t pay any income tax, which the lawsuit claims is due to ‘child labor laws’ given her an advantage. Uh, dude, those laws aren’t what stopping her from paying income tax, the fact she has no income is what’s stopping her from paying income tax. The law you pointed at just prohibits her from having an income. And you, *also*, are allowed to not have an income if you so choose, and you then wouldn’t have to pay income taxes either.Report

    • Avatar Kim in reply to DavidTC
      Ignored
      says:

      David,
      Bullshit.
      http://www.bizjournals.com/pittsburgh/news/2014/08/21/upmc-increases-revenue-margin-in-tough-environment.html

      Well upward of 100 million dollars in operating profit.

      Many nonprofits are REQUIRED to operate profitably.Report

      • Avatar DavidTC in reply to Kim
        Ignored
        says:

        UPMC is exactly why non-profits should both have salary caps, *and* property-tax-exemption caps. (A million dollar seems reasonable for both of those, to start with.)Report

        • Avatar Kim in reply to DavidTC
          Ignored
          says:

          A property tax exemption cap would cripple several functional non-profits, in that the economies of scale for both universities and hospitals (and insurance companies) lead to the necessity for having large conglomerations.

          Also, you’d truly fuck over the Catholic Church if you did that, and all churches in NYC would probably have to close their doors.

          If these are not “expected consequences” for your caps, you need to think harder.

          Do you think that all the best neurologists should work for private companies? I’ve seen the top 20 list of UPMC paid people, and at least some of them are paid market rate.Report

          • Avatar DavidTC in reply to Kim
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            says:

            A property tax exemption cap would cripple several functional non-profits, in that the economies of scale for both universities and hospitals (and insurance companies) lead to the necessity for having large conglomerations.

            …why do you think non-profit insurance companies own a lot of land?

            And a goodly proportion of non-profit hospitals *and* universities are what I consider only partial non-profits.(1) They’re running around paying millions or even hundred of million of dollars in total salaries to people…they certainly can pay some property tax too.

            Property tax exemption should basically be reserved for tiny non-profits that bought a house to operate out of or something.

            Also, you’d truly fuck over the Catholic Church if you did that, and all churches in NYC would probably have to close their doors.

            Each Catholic church is a *separate* 501(c)(3)s, and most of them don’t own a million dollars worth of real estate, so no.

            As for New York City, obviously the cap should reflect relative property values, going higher in some places with expensive real estate. Hell, different states appraise property differently, and we’re talking about state law, anyway.

            I’m just saying, instead of a blanket *total* exception of property tax for non-profits, there should just be an exception for the first $X dollars of property tax. (Either owed, or appraised, however people want to structure that.)

            1) In my book, a real non-profit has almost no one in a decision making capacity getting paid. I’ll accept needing a manager or something and paying them, that’s okay, but at some point in size, the total yearly money flowing out of the organization going into the *paid pockets of people* becomes the point of the organization, instead of their actual mission. At that point, it just sorta becomes a for-profit business without any owners.

            And I’m not saying those things shouldn’t exist, I have nothing against them. I’m saying we shouldn’t treat something like UPMC exactly the same as a free clinic that the doctors in town donate their time to, which just bought a new building. One of those *clearly* can afford to pay property tax, the other probably can’t.Report

            • Avatar Kim in reply to DavidTC
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              says:

              You do realize that UPMC and everyone else do pay taxes, even property taxes, right? They’re just voluntary, and at something of a discount.

              http://www.post-gazette.com/news/health/2012/09/26/UPMC-among-nonprofits-eager-to-avoid-paying-property-taxes/stories/201209260169

              I’d say that’s something practical…Report

              • Avatar DavidTC in reply to Kim
                Ignored
                says:

                Erm, so what you’re saying is that my idea, or something like idea, is so popular and obvious that UPMC, in an attempt to ward off calls for them to pay property taxes, which would be a state law, has started voluntarily paying *half* what their taxes would be in *some* places.

                I did not know that, but I think it pretty much proves my point: People are tired of these gigantic non-profits with huge bankrolls and large cashflows screwing over local governments by not paying any property taxes, while still using local services and occupying expensive land.

                People have gotten so tired of it that those non-profits are getting worried enough that they are trying to undercut complaints.

                The things, this is bullcrap. UPMC, in places it has agreed to make payments, is only paying 50%…and that’s actually a pretty *high* percentage for non-profits that make PILOT donations. Often, it’s 25%. And this is something that local government have to negotiate and fight over.

                It needs to go way past that. They should be paying normal property taxes, minus the first million in appraised value, or minus the first $10,000 in tax, however we want to do that. Hell, exempt the first *ten* million, I don’t care.Report

              • Avatar Kim in reply to DavidTC
                Ignored
                says:

                Highmark and UPMC and UPitt and CMU simply Wouldn’t Pay, if you made them pay the property taxes of private corporations. They’d move first, and if that meant leaving the state, well, WV seems awful happy to have just about anything…Report

              • Avatar DavidTC in reply to Kim
                Ignored
                says:

                Highmark and UPMC and UPitt and CMU simply Wouldn’t Pay, if you made them pay the property taxes of private corporations. They’d move first, and if that meant leaving the state, well, WV seems awful happy to have just about anything…

                ..at which point the state now has a perfectly functional hospital with a bunch of already-employees that live nearby, and some *for-profit* place can buy it and run it…and pay property taxes.

                Oh noes!

                And, again, I have no idea why you think an insurance company owns a lot of real estate…and now I’m even more baffled as to the idea an *insurance company* can move to another state. How the hell does that even work?

                And if you *really* think schools are going to move their entire campuses to another state…wow. Just wow.

                But, anyway, that sort of nonsense is how you get no property taxes *at all*.Report

    • Avatar Brandon Berg in reply to DavidTC
      Ignored
      says:

      because normal people don’t care about the slight tax help. (Which is not really help, because they don’t itemize deductions.)

      Half of returns with AGIs in the $50k-75k range are itemized

      Also, while non-profits can’t distribute profits to owners, they can earn a net profit in any given year to save for use in future years. When a for-profit corporation does this, the retained earnings are subject to income taxes.

      That aside, I don’t have any major objection to the main point of your comment. It’s not entirely clear to me who you’re arguing against, but I haven’t read all the comments in this post.Report

      • Avatar DavidTC in reply to Brandon Berg
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        says:

        I’m not sure what your itemized point is about. Having only *half* of the people who make from $50k-$75k even itemize *at all* sorta proves my point.

        And just because they do itemize deductions, doesn’t mean they itemize things like donations to Goodwill, which you only get to deduct for the amount that Goodwill is going to sell them for…which means you have to actually wait until they appraise the value.

        ‘Yes, please, I would like to stand here for an hour until you can get around to looking through what I’ve given you and give me a receipt for $50, which will save me a grant total of $15 on my taxes, if I carefully keep track of it for seven years in case I get audited. Why, that’s earning almost double minimum wage! This seems like a productive use of my $60,000 a year life.’

        Now, people do actually get receipts and use them for their deduction when they give *money*…but most of these dumbass lawsuits about ‘competing non-profits’ are about things like Goodwill, complaining how they get given stuff that’s tax deductible. Technically, yes, people *can* give to them and get a deduction, but in reality that’s a few people who donate entire contents of houses or thousand dollar coat or something…the vast majority of donated stuff is not deducted.

        People don’t donate clothes to Goodwill because of a ‘tax deduction’ they can hypothetically take advantage of. They donate to Goodwill because they own something still useful that they don’t want anymore.

        I volunteer at a non-profit theatre, and we have people bring stuff in all the time, like sofas and tables and even clothes, for use in shows, and then let us keep it. You know how often people ask for receipts for that donation, or for some sort of evidence to give the IRS of the show’s rehearsal schedule and whatnot so they can deduct mileage driving to and from while volunteering in a show? Never. Literally, never.

        It’s moderate-to-large *monetary* donations that end up deducted. (Which we, and everyone else, *do* give receipts for.)

        Also, while non-profits can’t distribute profits to owners, they can earn a net profit in any given year to save for use in future years. When a for-profit corporation does this, the retained earnings are subject to income taxes.

        …except when they go through one of the dozen ways to not count that as profit, like depreciation and stock options, allowing them to magically move money between years. 😉

        But, anyway, my hypothetical was something more like Goodwill trying to exist in a universe where there was no special non-profit part of the law. A company where the owner wants *nothing* out of it, and exists solely to provide jobs, as a public service.

        This is somewhat *harder* without non-profit rules, they’d have to keep an eye on the balance sheet at all times, but the company could just give away a lot of Christmas bonuses. And I already explained that the ‘they get tax deductible donations’ is a nonsensical complaint about Goodwill. The only real difference is, in that universe, that Goodwill would have to pay property taxes. That’s pretty much it.

        Of course, even if this hypothetical for-profit Goodwill *did* end up paying some minor taxes, they’d still not be paying out any sort of profits, so would *still* probably undercut any businesses run to make a profit. People who sue places like Goodwill are delusional. You remove the need for a profit margin from a business, and give them enough goodwill (hehe) that people will just *give* them stuff to sell, and, hey, they’re going to sorta undercut other people in the market. Duh.Report

        • Avatar Kim in reply to DavidTC
          Ignored
          says:

          Anyone who donates a car gets a bluebook value. It’s not the government’s fault if some donations are harder to quantify.

          Every time I donate a book to the local college library, they want to give me credit (I refuse to take it, because they aren’t really MY books… i inherited them).Report

        • Avatar Brandon Berg in reply to DavidTC
          Ignored
          says:

          I’m not sure what your itemized point is about

          It’s about the fact that itemization is very common, not something a handful of rich people do. Overall over a third of returns are itemized, but that understates things a bit, because the itemized returns are more likely to be married couples filing jointly.

          That’s it. There’s no broader point I’m trying to make. Like I said, I don’t object to the main point of your comment. In general, I doubt anyone donates to Goodwill for the deduction. Most people just want to get rid of stuff.Report

          • Avatar DavidTC in reply to Brandon Berg
            Ignored
            says:

            In general, I doubt anyone donates to Goodwill for the deduction. Most people just want to get rid of stuff.

            Yeah, that was basically the point I was trying to make. People donate stuff to get rid of stuff. They might choose *where* to donate based on the reputation of a charity, and some of them are probably anal enough to actually get a receipt for their trivial tax deduction, but that’s not *why* they donated.

            The tax deduction is a reasonable factor in charity cash giving, it’s a complete non-factor in charity ‘random crap I’m not using anymore’ giving.

            And then idiots come along and try to sue Goodwill for ‘getting tax deductible donations’, as ‘unfair competition’, and tries to get the government to remove this ability. (Or to let people take tax deductions whenever ‘donating’ to anyone, which would totally screw up income taxes, but whatever.)

            The apparent conclusion in their head is, afterwards, people will say ‘Wow, I now have a choice in donating, instead of donating to Goodwill, I can now donate here! So this guy profits instead of poor people! I’ll do that! Woo!’.

            Instead of the more likely ‘Hey, it’s those asshats who screwed up Goodwill’s tax status. Why would I donate there?’

            At some point, you’d think they’d google ‘goodwill’ and realize it’s not just the name of a non-profit. 😉Report

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