Tag: david henderson

Prop 19, Employment at Will, and Social Peace

Writing at CNN, my colleague Jeffrey Miron puts his finger on one reason for the disappointing defeat of California’s Prop 19:

Prop 19 failed also because it overreached. One feature attempted to protect the “rights” of employees who get fired or disciplined for using marijuana, including a provision that employers could only discipline marijuana use that “actually impairs job performance.” That is a much higher bar than required by current policy.

Like so many other developments in employment law in recent years, this would have chipped away at the basic principle of employment at will, which holds that in the absence of a contract specifying otherwise, either party to an employment relation may end that relation at any time for any reason or for no reason at all.

It was no doubt inevitable that the proposition would fare poorly among self-identified conservatives and older voters. But the “users’ rights” provisions were enough to raise doubts even among liberty-minded thinkers like David Henderson, who predicted that by signaling hostility toward freedom of association, such provisions would “make the drug-legalization hill even steeper.”

Marijuana of course remains illegal under federal law, which means that its consumption would at one and the same time have been 1) protected under employment-discrimination rules, and 2) illegal and subject to prison sentences. If this paradox seems vaguely familiar, maybe it’s because not that many years ago – before the Supreme Court’s 2003 decision in Lawrence v. Texas – there were localities where consenting homosexual conduct was simultaneously protected under one set of laws, and unlawful under another. Indeed, there were more than a few advocacy groups that worked to promote the new controls over employer decisionmaking and yet never troubled themselves to work for repeal of the still-on-the-books anti-gay prohibitions. If the goal is to achieve social peace, however, rather than wage constant culture war on each other, you’d think the “leave people alone” message would hold more appeal than the “fall in line or you’ll hear from our lawyers” message.

Jeffrey Miron surmises, no doubt rightly, that the problem of undislodgeable tenured stoners in the workplace would be more the exception than the rule. Yet it’s worth noting that the issue has already arisen in various lawsuits in which workers with a doctor’s note recommending marijuana use have contested firings. Lawyers have also eagerly cobbled together suits over related issues, as with this class action noted less than two years ago at my other website, Overlawyered:

Starbucks’s job application asked prospective baristas if they’d been convicted of a crime in the past seven years and added for “CALIFORNIA APPLICANTS ONLY”, at the end, that minor marijuana possession convictions more than two years old didn’t have to be disclosed, in accord with a state law along those lines. Entrepreneurial lawyers then tried to steam-press $26 million or so out of the coffee chain on the following theory: that the clarification was placed too far down the application after the original question; that Starbucks had therefore violated the California Labor Code; and that each and every Starbucks job applicant in California since June 2004, perhaps 135,000 persons, was owed $200 in statutory damages regardless of whether they had suffered any harm. Per John Sullivan of the Civil Justice Association of California, the lawyers also took the position that “it didn’t matter that two of the three job applicants who signed on as named plaintiffs testified in court that they read the entire application and knew they didn’t have to mention a marijuana conviction (which neither had anyway!)” The court refused to certify the class and made the following observations (courtesy CJAC blog):

* “There are better ways to filter out impermissible questions on job applications than allowing ‘lawyer bounty hunter’ lawsuits brought on behalf of tens of thousands of unaffected job applicants. Plaintiffs’ strained efforts to use the marijuana reform legislation to recover millions of dollars from Starbucks gives a bizarre new dimension to the every day expressions ‘coffee joint’ and ‘coffee pot.’”… “The civil justice system is not well-served by turning Starbucks into a Daddy Warbucks.”

Ilya Somin at Volokh Conspiracy notes that “the case against the War on Drugs and other ‘morals’ regulations is very similar to the standard conservative critique of economic regulation.” But if a much-needed rollback of morals regulation is made the excuse for an expansion of economic regulation, there may be grounds to wonder whether the goal is truly freedom at all.

What Is Regulation?

The New York Times tries to spin the work of Nobel laureates Elinor Ostrom and Oliver Williamson as not anti-regulation:

Neither Ms. Ostrom nor Mr. Williamson has argued against regulation. Quite the contrary, their work found that people in business adopt for themselves numerous forms of regulation and rules of behavior — called “governance” in economic jargon — doing so independently of government or without being told to do so by corporate bosses.

But none of us “anti-regulation” folks are against “rules of behavior that people in business adopt for themselves independently of government.” The world is full of rules, from wearing clothes in the office to customary trade practices to the rules for managing common-pool resources that Ostrom studied. Anyone who opposed such “forms of regulation” wouldn’t be a libertarian or even an anarchist – he’d be a nihilist. (Of course, one could sensibly oppose particular rules; but no one seriously wants a world without rules of behavior.)

David Henderson analyzes one of the misunderstandings about the laureates’ findings:

Some have summarized their work by saying that institutions other than free markets often work well. But that statement can mislead you to conclude that government solutions are the answer. Free markets are only a subset of free institutions. A better way to sum up their work is that what Ms. Ostrom and Mr. Willamson really show is that voluntary associations work.

The Concise Encyclopedia of Economics defines “regulation” this way: “Regulation consists of requirements the government imposes on private firms and individuals to achieve government’s purposes.” That’s the kind of regulation that is controversial among economists and often criticized by libertarians. It is entirely different from “rules of behavior that people in business adopt for themselves independently of government.” Those sorts of rules – often called “governance,” as the New York Times notes – are private and voluntary, made by the voluntary interactions of a few or many people.

The work of Ostrom and Williamson supports the idea of spontaneous order, an order that emerges as result of the voluntary activities of individuals and not through the commands of government. Spontaneous order can be hard to grasp, though it is the background of our entire world – language, common law, money, and the economy are all spontaneous orders (though government has intruded into some of those orders). It’s misleading to say that work of Ostrom and Williamson is somehow supportive of “regulation,” given the way that word is commonly used.

Sheldon Richman made a similar point back in June and wrote a Facebook note on the same paragraph that caught my eye.

Soaring Sales for “Road to Serfdom”

Cato’s new staff writer, Aaron Powell, told me he had recently seen two people on the Washington Metro reading The Road to Serfdom by F. A. Hayek. That prompted me to check the sales figures for Road to Serfdom at Nielsen’s Bookscan. And whattaya know? Sales have increased this year at an even faster pace than sales of Atlas Shrugged. (Atlas sells 10 times as many copies, but the percentage increase over last year is less.)

So far this year the most popular edition of Road to Serfdom has sold 11,000 copies. That compares with 3,000 copies at the same point last year. That’s a 263 percent increase for those of you keeping score at home.

Why? Well, no doubt huge new government spending programs and attempts to massively expand the welfare state send people looking for classic literature that makes the case for liberty and limited government. But what the Marxists call the “objective conditions” can always use a bit of help. And indeed, just as I found in investigating the sales bump for Atlas Shrugged, it looks like an op-ed in the Wall Street Journal was instrumental in boosting the sales of The Road to Serfdom.

On February 4, former House Majority Leader Dick Armey, now chairman of Freedomworks, published an op-ed in the Journal titled “Washington Could Use Less Keynes and More Hayek.” Sales of Road to Serfdom, which were in the low hundreds each week since the beginning of 2009, more than doubled over the next four weeks. It seems likely that Armey’s op-ed caused the new interest.

Armey didn’t actually mention The Road to Serfdom – he just talked about Hayek and his ideas generally – but when you go looking for Hayek, you’re going to find his most popular book. So maybe we could attribute the sales bump instead to David Henderson’s review of The Road to Serfdom – titled “Still Relevant–Perhaps More So” – in the Spring issue of Regulation. But the Wall Street Journal does have a larger circulation.

Update: This item has been edited to remove proprietary information.