The Economics of the Police State | Thomas E. Woods, Jr.

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I think most of you probably know Tom Woods is a very prolific speaker very prolific writer very prolific teacher author scholars peers on major networks frequently he is the author of several books too numerous to go into here but I think a couple things are most important to us first and foremost is that I think his ability to write and speak across the incredibly broad range of topics brings to mind.

Murray Rothbard frankly and also his output just share output of Tom Woods is something that I think most academics could only could only aspire to obviously he has multiple degrees columbia and harvard allegedly and I I think I'll just introduce some finally by saying that everyone is nice is it extraordinarily proud that the tom is associated with the mises institute com [Applause].

Today of course I'm talking about police militarization but also the war on drugs because i think one has fed into the the other and every time i hear the federal government use some phrase involving wore it just sounds so Kremlin desk to me it reminds me of Richard Nixon's war on cancer and most people probably forgot nixon's war on cancer because of course we cured cancer under the Nixon administration so why would we need to think about it but he did promise though that at least by 1977 we would have wiped out cancer it's typical messianic presidential statement sounds like something right out of nikita khrushchev job citizen we're going to have a life expectancy of a hundred and eighty by 1981 and you know that everybody knows this is false but I think some people probably bought the Nixon war on cancer you know we are the government after all these are all our designated agents and they would mislead us well the war on drugs i say has has definitely played a role in the militarization the police we're going to try to look at why that is the title of my talk has to do with economics economics of course really is everywhere and there are certain economic factors that have played into what we've seen the transformation that we've seen in your typical local police into the paramilitary outfit we observe today first point i want to make is the great . that means himself made in 1920 and is great SI economic calculation and the socialist Commonwealth and there he identified the fundamental problem at the heart of traditional socialism not sweetened style socialism real socialism where private ownership of the means of production is forbidden and what he showed in there for reasons you can discover if you read the essay i have a youtube I think called why economic freedom.

Here's why and I give a layman's overview of the socialist calculation problem but the point that identified is that the socialist planning board does not have access.

The prices for the means of production and if you don't have access to prices of your inputs then you can't calculate profit and loss there's no air medical way to determine whether you're doing well or badly when there's no input costs to subtract from your sales revenues so you're completely in the dark and your allocation of resources and when allocating resources for an entire economy you're making decisions that involve well millions of products let's say which could be made in I don't be too technical here going to use the word aight gazillion possible ways to think of all the possible inputs that could go into all the possible goods all the production processes that could be employed to produce this tremendous array of goods and you can imagine there are many different possible combinations almost all of which would be ludicrous Leon economic and so what the market does through prices is to push entrepreneurs through profit and loss to engage in that combination of productive resources that is the least wasteful in terms of foregone opportunities to make sure that all the scarce capital goods we have and then inputs that we have are arrayed in a configuration in which the goods that consumers demand are produced in such a way that goods that they demand more urgently are not sacrificed in the interest of producing goods they demand less urgently that input if lumber is more urgently needed in this production process than this production process has the ability because there are multiple owners in a free market economy to bid those resources away from production processes that could get away with a process that uses less lumber and all these possible factors of where should I build my physical plant should I build right next to where my sales are going to be or should I build over here where the land prices are lower but my transportation costs will be higher and then how should I produce and in what quantities the socialist planning board is completely in the dark when answering these questions now a government like the united states on the other hand is not a socialist government in the sense that means is meant because we do have private ownership of the means of production but when government spends it is always in a kind of calculational darkness because although it does have prices of inputs it doesn't have any legitimate sales revenues unless we're going to go along with harry reid and say that when you send your check to the federal government this is your voluntary contribution to civilization.

No to the contrary of course that government acquires its revenues through force through violence or threats of violence i came over who said this forgive me but some somebody once said just think of it this way if you get a telephone call from the IRS or from apple computer which one are you more frightened of right i mean it so it there is that you know that mailed fist to an opening at beneath all this talk about contributions and civilization now what results from this that's relevant for us today is that as Jeff mentioned there is no profit and loss feedback mechanism in the case of security services that are provided by the government so how do they know what to provide what types of services to provide let's give them the benefit of the doubt that they wanted to provide us with something good even if they wanted to be hard for them to know exactly how should they have 8,000 judges or 25 judges should what should the police be doing watching the priorities of the police be how many police should there be.

You might say we should have as many police as possible okay but obviously we're not going to hire a hundred and fifty million police every police officer is somebody who's taken away from some other productive employment so we have to use the feedback of the market to figure sort all this out there is no such feedback and so what we've seen instead is that the government makes its own priorities for what the police should do not what the people want.

But what the government wants and the result has been what an old writer acquaintance of mine used to call a narco tyranny now he meant it in a different sense but.

I love that term anarcho tyranny it's a narco in the sense that the things you might theoretically want police officers to do basically police police offices all over the police departments all over the country do terrible jobs if you find out if you were to find out the percentage of murderers or burglars who are actually caught found guilty and legitimately found guilty and punished you would be shocked at how low it is you you wouldn't be sitting here you'd be out stocking up on weapons if you knew how low it is and of course they don't want you to know how low it is but it's long it's low single-digit percent maybe very low so they're terrible at that you get the sense they're not even trying on the other hand one thing they are great at is shows of force and intimidating the public that they're excellent their excellent going after people who have never done any physical harm to anyone but ingest a substance that the state doesn't want them to ingest they are excellent that they've in fact they're so excellent at it that the United States has a greater prison population than any country in the world and i don't mean per capita on a percentage basis as you might think i'm talking absolute numbers absolute numbers more prisoners in the u.s. so in this regard you have to say when it comes to destruction they do a decent job like making things providing civilized life while they're not so good at that but destroying things ruining people's lives that's what they specialize in the state and so what we have is a narco tyranny they don't do they don't protect you against threats to your life and property but they do make sure that peaceful people who were never going to hurt you are stuck in cages being raped because that's the most humane solution to somebody's drug problems when they get extra money for doing this by means of asset forfeiture laws well the choice is pretty easy.

My going to investigate your home break-in fix i still remember an incident when I was in graduate school I was at Columbia University and I'd never really lived in that sort of a city before and friend of mine from Connecticut came to visit while we were having dinner his car was broken into and some some items were stolen and it so happened that a police car was driving by so we flagged him down we said look my car was broken into and he told us that was a real shame and drove away another point for getting into specifics when people want something the market will supply it to them that is the law that government is fighting its best against people will get what they want one way or another and then finally there are vested interests at stake in the police militarization and in the drug war and this is why I think it's so disillusioning for young people when they say to themselves look I was the captain of the high school debate team so i can make a really good argument against the war on drugs so if I just make that argument the war on drugs will just melt away does it doesn't matter what your arguments are people's livelihoods are at stake here you can take your arguments and stick-up doesn't matter they were vested interests at stake economic interests to investigative journalist summarize the situation this way many police including beat cops now routinely carry assault rifles combined with body armor and other apparel many officers look more and more like combat troops serving in Iraq and Afghanistan Paul Craig Roberts who served in the Reagan administration reports today 17,000 local police forces are equipped with such military equipment as Black Hawk helicopters machine guns grenade launchers battering rams explosives chemical sprays body armor night vision and armored vehicles as John Whitehead what's it what began with the militarization of the police in the nineteen eighties during the government's war on drugs has snow balled into a full-fledged integration of military weaponry technology and tactics into police protocol for example in 1981 congress passed the military cooperation with law enforcement act that sounds good clip which granted the military the power to help local police forces wage the war on drugs by sharing equipment training and intelligence in 1997 congress approved the 1033 program which allows the secretary of defense to transfer surplus military supplies and weapons to to local law enforcement agencies without charge.

They just have to pay ship that's true by the way they just have to pay shipping there's no amazon prime for this.

They're getting assault rifles many tanks grenade launchers and my personal favorite remote-controlled robots in oxford alabama the 50-person police force there now has three million dollars worth of equipment m16 infrared goggles and an armored vehicle in des moines the police have to 180,000 dollar bomb robots in Montgomery County Texas the Sheriff's Department owns a $300,000 surveillance drone in cobb county georgia the police have an amphibious tank.

What on earth could be happening across the country in richland county south carolina the police have a machine gun equipped armored personnel carrier called the peacemaker this type of equipment had previously been seen only in war zones now we've heard a lot about the Bearcat so you may follow the free state project in New Hampshire these are people who believe in the non-aggression principle don't initiate physical force against anybody else but apparently believing in not initiating physical force is one of the most dangerous threats New Hampshire has ever faced and so there was a police department that got hold of of a Bearcat the issue they applied for it and they got it approved said we are under threat here domestic threat because we've got the Occupy movement and we've got the Free State Project who have never never hurt anybody.

Never here's what the Bearcat is it's a 16,000 pound bulletproof truck with battering rams gunports tear gas dispensers and radiation detectors cost almost a quarter million dollars and it's been sold over 500 local agencies had somebody on my program not long ago who talks about how to deal with the police and he's got frequently asked questions pages you know what to do if you're stopped what to do if there's a police miniature door I said I I knew I frequently asked question what to do when there's a Bearcat outside your house we can trace the decay of American society on the basis of the types of topics we need to cover in frequently asked question pages in 1980 there were fewer than 3,000 reported SWAT raids now the number is believed to be over 50,000 three-quarters of these are drug raids and most of these are low-level drug raids so I'm grateful to these two folks i mentioned for writing their books this year because they really opened my eyes to a lot of this I sort of knew this sort of on a casual level like I'd see headlines just like anybody else would but I didn't have an intimate acquaintance with this stuff the way I do now already by the late 1980s nearly every city with at least a hundred thousand people now had a SWAT team or was on the way to getting one now a few stories that indeed acknowledged are anecdotal but highly revealing there was at one time something called the law enforcement assistance administration on at the federal level and it it handed out money and equipment to police departments and the director was a guy named on santarelli and he recalls this is already in the early seventies already calling this he says they didn't talk about local police departments they didn't value education or training they valued.

Hardware whether it was armored personnel carriers tanks whatever they were asking for Los Angeles haven't helped us wanted a submarine he said anything the police chief's could dream up to make themselves look more fearsome they wanted.

I like these statistics too by the way to show how delusional people were on the subject the war on drugs you know let me point out by the way I'm the square easiest person probably whoever lived super square.

I've got four kids with the fifth on the way I Drive a minivan whereas bourgeois as can be i have never ingested any illegal substances in my life I am as dull and boring as can be but i believe in the great principle of mind your own business and 12 things thanks for hey you know what can I say I'm a great guy you know mind your own business but what I don't like I I don't like being lied to like I'm not going to use marijuana but I don't want to be lied to about it i don't want that second grade film strip that we got you know where they're showing here's the here's the guy the first day he uses it and he looks like pretty much a normal person there he is on the seventeenth day and he's like you know an old chrome and over the cane you know and hear his lungs and it's just like somebody took a black crayon and and you know and there are health issues related to marijuana but for heaven's sake right and nobody's overdosing on it nobody ever really so I don't like that and in particular it seems like because this war on drugs has penetrated into the American consciousness so much as something we must declare victory in now it's breaking down a little bit but there are a lot of people who would even consider having a different thought on this that they're willing to believe anything about it so in 1972 richard nixon claimed that every year heroin addicts were stealing the the equivalent of two billion dollars worth of property George McGovern even said they were stealing 4.4 billion dollars worth of property every year to get their fix Charles Percy in Illinois Senator said they were stealing between 10 and 15 billion dollars worth of property every year.

Turns out the total value of all reported stolen property by everybody heroin addict or not in the united states in 1972 by everybody 1.2 billion dollars everybody.

According to Nixon every year heroin addicts were engaging in 365 million burglaries you wanna know the total number of burglaries committed by heroin people and Darwin on heroin people put together in 1971 in the u.s. 1.8 million and yet I mean did anybody call them on this like that's a preposterous picked up people just accept what the government has identified a danger and why what what possible interest with the government have been exaggerating a danger I don't see you but here's here's an anecdote that i like because it's it's it's extremely revealing we had this federal campaign against marijuana production in early nineteen eighties this was going to bring in the National Guard to search out and destroy Northern California marijuana fields summer 1983 the federal government sent you to spy planes over California a u-2 spy plane you remember the YouTube spots u-2 spy plane that was the thing that scuttled the summit between Eisenhower and Khrushchev because they were flying over the Soviet Union pretending they weren't now they're just openly doing here and then the asset forfeiture laws kicked it and this allows the local law enforcement to keep most of the assets they seized if they were drug-related now supposedly they've got safeguards in place but they really don't in 1985 a DEA agent writing in his book cash crop very frankly said the biggest focus of what we're doing is is going to be on land seizures.

Anybody has grown marijuana on their land we're gonna take their land it's as simple as that.

It's done civilly through the federal system basically people have to prove that they weren't involved and didn't know about it all that should be a breeze.

I'll prove to you that I didn't know about it just the act of having marijuana grown on your land is enough to tie it up then you have to turn around and prove you're innocent it reverses the burden of proof yeah i see a lot of normal people would think that's a bad thing the whole reversal of the burden of proof but now this was just openly stain.

That's right it is a reversal of the burden of proof so it turns out that these dangerous terrible drug kingpins aren't so dangerous after all because the rule was that if you hand over your land will let you go free even though you're a menace to society will let you go free what we really want is the stuff we want the land what are the incentives that follow from this well what types of crimes are they more likely to go after are they as concerned about the burglary of your house as they would otherwise be another incentive this is also from from one of those books that i had a chance to read this last year another incentive is wait until the drugs are sold and then go after the drug dealers now supposedly they want to keep us safe from the drug dealers and from the drugs getting out into society.

So you think they want to stop the drug dealers before they can sell the drugs but it's much more common they want to wait until the drugs have become cash then we'll get them but i think i thought this was all about protecting me from from drugs but so the department wants the cash they wait for the and now there are studies that show this they wait for the transaction to be consummated and then they grab the cash it also turns out that agents are far more likely it so you've got a major metropolitan area you've got roads with lanes coming in and out car coming into that metropolitan area is full of drugs to sell in the metropolitan area the car coming out is gonna be full cash guess which lanes they're more likely to stop the cars.

But they're just trying to keep us safe right.

They're just trying to keep us safe and you get people like me who are in grades to come along and raise these objections Paul Craig Roberts noted that the asset forfeiture thing the main result of the efforts of the drug warriors buy by introducing this he said was the routine confiscation of the assets of the innocent Americans can be stripped of their property without a warrant on the basis of mere probable cause people can have the property taken away without a criminal conviction in fact an estimated $OPERAND eighty percent of people who lose their property in this way are never charged charged with a criminal offense they have to sue the government to get it back.

They have to file a petition very shortly after the seizure and post 10-percent bond and the government is not even obligated to explain the procedure to them the burden of proof as I say is on them to prove that their seized property had no connection to drug money now there's also a futility to all this.

There's a futility to it because of the point that i made right at the beginning when people want something very consistently the market is going to supply it so I like this particular anecdote because this this alone help to crack through any lingering sympathy I'm might have had in my old sort of previous libertarian days for the war on drugs in the late nineteen nineties judge volley brown recalled an incident in the early drug war under Nixon under the short-lived office for drug abuse law enforcement and judge Brown served as a staff attorney for them well his regional division of the office for drug abuse law enforcement decided to try to arrest all the known drug dealers in a given city at the same time so they chose san diego san diego law enforcement they're acting under the off auspices of this office managed to arrest all 39 members of the drug gang that was responsible for providing nearly.

All of the heroin that was sold their they did they got all 39 of them and for a whole week it was impossible to find heroin in san diego by the second week new suppliers began to appear within a month.

Things were back exactly as they were before except this time the authorities had no idea who was selling the herald judge Brown says it was not more difficult or more expensive to obtain illegal drugs than it was in the beginning we had failed to solve or even affect the drug problem with law enforcement if we've been given 10 or 20 times the resources we would still have failed i have learned from experience that there is no practical level of law enforcement that will prevent people from using the narcotics and dangerous drugs they wish to use about that Judge James Gray was a trial judge in orange county california late 1990s he returns from a two-week vacation so he asked his court reporter what did you what we're up to $TIME while i was gone and the court reporter said well we reported 25 felony preliminary hearings 21 of which were drug-related one involved a homeless man who pushed his belongings through the city in a shopping cart and who was arrested for selling ten dollars worth of cocaine and gray says a courtroom judge clerk court reporter and two bailiffs were taken were taken up by this hearing for half a day which did not include all of the preparation reports and efforts of a prosecutor public defender and 4 police witnesses he says the system wastes scarce resources churning low-level nonviolent drug offenders like the homeless man through the system to no effect of purpose now the nature of the drug war tends to push things in this way because the drug war is dealing with work sometimes called by libertarians victimless crimes a lot of people think the term victimless crimes is a cold heartless term to use because if you have a loved one who has a drug problem there is no doubt a great deal of emotional and spiritual anguish that companies that nobody denies that we say victimless we're talking about the traditional sense of having your person or property physically invaded and that doesn't happen in these drug cases and so because there's no traditional victim there's no one to report the incident is no need to worry about are people going to report burglaries that they're a victim of berkeley they're going to report it but a victimless crime there is no victim.

So how do we find the perpetrators not because somebody comes forward and then we know a crime has been committed and then we dispatch some people to go investigate it for people to find out about these drug offenses at all they have to employ the search power aggressively and that in turn gives rise to nearly irresistible tendencies toward abuse every year there are approximately 1.4 million drug arrests it seems to me unlikely that every case involves the voluntary disclosure of possession by a user or an officer seeing some quantity of a drug lying in plain sight numerous surveys have found the judges believe that false testimony regarding the legitimacy of searches is a common occurrence then we have bribery the economist David Rasmussen and Bruce Benson say the illicit drug market is probably the most lucrative source of police corruption that has ever existed in the United States and the reason for this is that police are in a position to protect certain drug gangs and protect their turf and also drive out competitors well-protected gang is prepared to pay top dollar in bribes for this valuable service now once in a while we hear statistics about drug seizures that can sound as if real progress is being made on the supply side but even the General Accounting Office admits the following seizure statistics can be especially misleading because they are often reported without context and in terms of street prices which far overstate actual costs to traffickers arrests and seizures are significant only when they helped raise costs and risks enough to deter traffickers and there is no indication they are approaching that point in fact it's been said that in order to achieve such a goal it would be necessary to introduce 75-percent of all drugs a figure needless to say that has never remotely been approached now even if all this suddenly became possible would be users would just turn to household products you can use paint you can use glue you can use gasoline you can use various cleaning agents as inhalants so maybe a paramilitary police state is not the solution to this problem maybe this is a family problem maybe this is a problem for friends to deal with and in fact your friends can often deal with your problem because of the drug war i talked about in this is the best book I've written that no one's ever heard of it's called rollback I had a couple of new york times bestsellers this this one though they made it the publisher i think was uncomfortable how radical it was because the my proposed title for the book was why everything should be abolished and they didn't like that so they thought that was too radical so instead they made it looks safe they made it look like I was just against Obama okay well done against obama for heaven's sake right but in there i've actually got some stuff on the little bit of stuff in the drug war and there's there's numerous incidents where kids are watching one of their friends basically died right in front of their eyes but they're afraid to call police because i don't want to get in trouble for being involved in drugs and so there have been cases where the police department have been told look couldn't have some kind of loophole here for when you're calling about your dying friend that we won't arrest you for drug use of your call about you dying friend and there and the answer was well that would send the wrong message so the right message is you should let your friend die rather than help like that that's the right message well on the supply side though the US government has poured enormous sums into helping the Colombian government fight drug production in their country and it just gets worse just gets worse law enforcement in Colombia admits it solves five percent of all crimes most murders are not even investigated by the late nineteen nineties over a hundred and thirty mayor's in Colombia had been killed by 1999 half of the remainder were threatening resignation this is the situation was impossible and yet the production of coca plants continue to set all-time records with producers able to create new supplies faster than military helicopters could destroy now this all seems pretty hopeless right seem like this seems like this is hopeless their vested interests here that make money off the seizures that they need this for their budgetary requirements that become more powerful and there are some people who like to exercise power over other people who like to terrorize people who like to exploit the position of dominance that they hold over others and so it seems as if no matter how much you argue there's no way you can win because the vested interests are firmly entrenched but but what it means the circle be without a note of hope and of course i'm i'm tom hope woods right that's what I'm all about giving you folks hope they're a couple of reasons for hope on this if that were true that vested interests are always going to dominate and a lot of Public Choice economist or this way you know you'll never get rid of that sugar quota because it benefits a concentrated few and the costs are dispersed so no one will ever organized against it and there is a certain that is compelling argument and it is going to be hard to get rid of sugar quota things like that that's true that's from that's a good point but that's not absolutely true because there are times that the general public becomes ideologically aware and they will overturn things that benefit concentrated groups the whole Soviet Union collapsed was an example of that the apparatchiks all benefited from that system and yet in Eastern Europe it just came down in Washington and Colorado we've seen what people have done there with regard to the drug war and marijuana very very interesting development and it's to the point where the federal government feels like it would be a hopeless fruitless use of resources to try to stop it now I know you're thinking but isn't that what the government specializes in hopeless fruitless uses of of resources yes but typically you will have a lot of times you'll have a president or a regime that wants to conserve its political capital and the expenditure political capital that would be necessary to go in with tanks and engage in raids all throughout those states is simply too great so it's not being done the homeschooling movement is very similar to this and this is this seems odd to juxtapose marijuana with homeschooling because these oftentimes these groups don't meet together but it's the same principle with homeschooling it started off as something only crazy people did you're doing what is that even legal what are you doing now it's to a point where so many people are doing it that it would be for all their tanks and Bearcats and peacemakers it would be impossible for the federal government to overturn that and yet talk about vested interests the teachers unions all the different institutions that uphold the traditional American institution of indoctrination by government education all those things are still in force and they could not stop this thing so it turns out that for all their technological advancement and all the huge equipment they have public opinion can still Trump it's the old view that we go over here a lot at mrs. events that public opinion ultimately if they want the public won't approve of something if the public won't even approve it in the form of passive resignation then the sphere of Liberty expands that is what the Mises Institute does and i took a little longer than i had allocated to me because we were a little bit ahead of schedule so I thought well you know I'm up here I might as well just keep talking that's what i've been doing as you noticed but i want to leave you with Murray Rothbard gets a very good way to leave people Rothbard thought that what the state tries to do is bamboozle the public and to portray it self as a wonderful institution that's just out to to bring about the public good it has no interests of its own that are different from yours.

In fact you are the government really so when we rule over you it's really you ruling over you so you shouldn't complain and they do this and they have various means by which they promote this myth and one of them of course is their educational system because you'll note that the government does try to help people supposedly who need food so they give them food stamps but they don't open government supermarkets they give them food stamps to go spend on food but with education they don't do that they do open the equivalent of government supermarkets they open government schools they open the school's it's not a coincidence that they do this because yeah okay putting a green pepper into your body government doesn't really care but putting ideas into your brain that's what they care about and so no wonder after year after year of government employees telling you how wonderful the government is by an interesting coincidence you go out of there believing the whole government myth you've been bamboozled Rothbart's says and it's the role of the libertarian thinker 2d bamboozle society and that above all is what the Mises Institute does not meet Institute does technical economic work in the Austrian tradition has an academic journal does tremendous work with its academic conferences but also reaches out to the public.

Jesus said you have to do both build the edifice of Austrian economics but also reach out to the public and in reaching out to the public.

I can tell you there is no better d bamboozling institution anywhere in the world than the Mises Institute and I hope that today you won't just enjoy the presentations and the good company that you'll enjoy but you will decide this is an organization that is worthy of my support and together let's dban boozle everybody thank you very much [Music].





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