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Biden Tries To Gloss Over His Long History of Supporting the Drug War and Draconian Criminal Penalties

Biden-ABC-town-hall-10-15-20

During his ABC “town hall” last night, responding to a question from moderator George Stephanopoulos, Democratic presidential nominee Joe Biden agreed that it was a “mistake” to “support” the Violent Crime Control and Law Enforcement Act of 1994. At the same time, he defended parts of the law, including the Violence Against Women Act, funding to support “community policing” by hiring more officers, and the now-expired federal ban on “assault weapons.” He also implied that the real problem was not so much the law itself but the way that states responded to it. “The mistake came in terms of what the states did locally,” he said.

Both the question and the answer were highly misleading. First, Biden did not merely “support” the 1994 law; he wrote the damned thing, which he has proudly called “the 1994 Biden Crime Bill.” Second, as much as Biden might like to disavow the law’s penalty enhancements now that public opinion on criminal justice has shifted, he was proud of them at the time. Third, the 1994 crime bill is just one piece of legislation in Biden’s long history of supporting mindlessly punitive responses to drugs and crime.

Biden is trying to gloss over a major theme of his political career. “Every major crime bill since 1976 that’s come out of this Congress—every minor crime bill—has had the name of the Democratic senator from Delaware, Joe Biden,” he bragged in 1993. Now he wants us to believe his agenda was limited to domestic violence, community policing, and gun control.

“Things have changed drastically” since 1994, Biden said last night, noting that “the Black Caucus voted” for the crime bill, and “every black mayor supported it.” In other words, now that black politicians and Democrats generally have rejected the idea that criminal penalties can never be too severe, Biden has shifted with the winds of opinion. But as Sen. Cory Booker (D–N.J.) noted during a Democratic presidential debate last year, that does not mean we should forget Biden’s leading role in the disastrous war on drugs and the draconian criminal justice policies that put more and more people in cages for longer and longer periods of time.

“The crime bill itself did not have mandatory sentences except for two things,” Biden said. He mentioned the law’s “three strikes and you’re out” provision, which required a life sentence for anyone convicted of a violent crime after committing two other felonies, one of which can be a drug offense. He said he “voted against” that provision, which is not exactly true. While he did express concern that the provision was not focused narrowly enough on serious violent crimes, he voted for it as part of the broader bill.

In any case, Biden did not just go along with the crime bill’s punitive provisions; he crowed about them. Like a crass car salesman hawking a new model with more of everything, he touted “70 additional enhancements of penalties” and “60 new death penalties—brand new—60.” He denounced as “poppycock” the notion, which would later be defensively deployed by Bill Clinton and Biden himself, that “somehow the Republicans tried to make the crime bill tougher.” Biden bragged that he had conferred with “the cops” instead of some namby-pamby “liberal confab” while writing the bill.

As for “what the states did locally,” the law was designed to increase incarceration. It provided $10 billion in subsidies for state prison construction, contingent on passage of “truth in sentencing” laws that limited or abolished parole. “What I was against was giving states more money for prison systems,” Biden said last night. But that is simply not true. As FactCheck.org noted last year, “Biden did support $6 billion in funding for state prison construction, but not the $10 billion that was part of the final bill.”

Despite Biden’s implication that he was not a fan of mandatory minimums, he zealously supported them in previous legislation, including the Anti–Drug Abuse Acts of 1986 and 1988. The latter law included a five-year mandatory minimum sentence for anyone caught with five grams of crack cocaine, whether or not he was involved in distribution.

As Biden explained it on the Senate floor in 1991 while holding up a quarter, “we said crack cocaine is such a bad deal that if you find someone with this much of it—a quarter’s worth, not in value, but in size—five years in jail.” To be clear: Biden was not marveling at the blatant injustice of that punishment. He was touting his anti-drug bona fides.

Biden also supported a sentencing policy that treated crack cocaine as if it were 100 times worse than cocaine powder, even though these are simply two different ways of consuming the same drug. Under the 1986 law, possessing five grams of crack with intent to distribute it triggered the same five-year mandatory minimum sentence as 500 grams of cocaine powder; likewise, the 10-year mandatory minimum required five kilograms of cocaine powder but only 50 grams of crack.

Because federal crack offenders were overwhelmingly black, while cocaine powder offenders were more likely to be white or Hispanic, the rule Biden supported meant that darker-skinned defendants received substantially heavier penalties than lighter-skinned defendants for essentially the same offenses. “We may not have gotten it right,” Biden conceded 16 years after he helped establish the 100-to-1 rule. Five years later, during an unsuccessful bid for his party’s 2008 presidential nomination, he introduced a bill that would have equalized crack and cocaine powder sentences.

The distinction between smoked and snorted cocaine “was a big mistake when it was made,” Biden admitted in a speech he gave just before entering the presidential race in 2019, nine years after Congress approved a law that shrank but did not eliminate the sentencing gap. “We thought we were told by the experts that crack…was somehow fundamentally different. It’s not different.” The misconception, he added, “trapped an entire generation.”

These are just a few examples of Biden’s enthusiasm for coming down hard on people who dare to defy the government’s arbitrary pharmacological decrees. You can read more about that here.

Nowadays, Biden opposes the mandatory minimums and death penalties he championed for decades. But his current position still reflects his commitment to using force against people engaged in peaceful conduct that violates no one’s rights.

“I don’t believe anybody should be going to jail for drug use,” Biden said last night. “They should be going into mandatory rehabilitation. We should be building rehab centers to have these people housed.”

While Biden considers that approach enlightened and humane, there is no moral justification for foisting “treatment” on people who do not want it and may not even be addicted. That policy strips people of their liberty, dignity, and moral agency simply because they consume psychoactive substances that politicians do not like. Biden, who in the late 1980s was saying “we have to hold every drug user accountable,” now wants to lock drug users in “rehab centers” rather than prisons. If that looks like an improvement, it is only because Biden’s prior record is so appalling.

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Before TMZ and Page Six, America Turned to Walter Winchell for Gossip

Winchell_1161x653

American Masters—Walter Winchell: The Power of Gossip. PBS. Tuesday, October 20, 9 p.m.

Walter Winchell once compared himself to a man sitting at an upstairs window, watching life parade by, perhaps dropping a flower on those below, perhaps a flower pot. As far as it went, that was accurate. What he failed to mention was that he was usually being paid—with sex or information or influence, if not cash—to choose between the petals or the clay pots.

The broadcaster-columnist Winchell is little-remembered these days, but he was very much a man of our time. Gossip as news, news as entertainment, fake news, tabloid news—as PBS’ American Masters episode Walter Winchell: The Power of Gossip recounts, Winchell was present at the creation of it all. He had a radar fix on the lurid and the tawdry and an awesome disregard for anything that smacked of professionalism or integrity—as if this or that newspaper gives a continental about ethics, as they are so amusingly called.”

Decades ahead of political correctness as we know it today, he whored on behalf of whatever was politically trendy: for Franklin Roosevelt’s New Deal and against fascism in the 1930s; for Joe McCarthy and anti-communism in the 1950s. He was the first multi-media journalist, with an empire that ranged from a syndicated newspaper column to a national radio show to television, and when he opened his broadcasts with a booming “Good evening, Mr. and Mrs. North America and all the ships at sea!” it was no bluster—at his peak, by some estimates, Winchell was reaching two out of every three Americans per week.

The Power of Gossip tells Winchell’s story in an appropriately punchy style, with considerable aid from Neal Gabler, author of the most comprehensive Winchell biography. It follows him from his days as a child vaudeville hoofer to the unveiling of his one-typed-page weekly gossip sheet on professional comings and goings in his troupe. What started as purely a hobby prompted by the gift of a typewriter from his wife—Winchell didn’t have a high school diploma, much less a degree or any background in journalism—quickly elevated him into the entertainment industry press and then the New York tabloids. His Broadway gossip column debuted in 1924 in the New York Evening Graphic, better known as the Porno-Graphic for its daily collection of near-nekkid showgirl photos.

Contrary to what The Power of Gossip suggests, Winchell did not invent the gossip trade. Paul the Apostle was already complaining about chatterers in his epistle to the Romans, in which he bitched about the “whisperers, backbiters, haters of God, despiteful, proud, boasts, inventors of evil things,” of whom there were many, right up through the nineteen-teens, when Hearst Newspapers’ Louella Parsons went to work scuttling the movies of rivals of Marion Davies, illicit paramour of her chain’s boss.

But Winchell enhanced the job into a weapon of mass dissemination. He practically devised a new language—slanguage, he called it—to load his poison pen. Couples slipping off to Nevada for a quickie divorce were “Reno-vating” their marriages. A promiscuous Hollywood maiden “has been on more laps than a napkin.” And Winchell was leeringly whispering about makin’ whoopee long before long before Eddie Cantor sang about it. He invented the three-dot-column, the stream-of-consciousness collection of brief items strung together by ellipses that beat Twitter to the punch by 75 years. (Often as not, those ellipses dripped down the decolletage of starlets with whom Winchell wanted to make whoopee.)

His other major innovation, as Gabler and The Power of Gossip note, was elevating gossip into a populist war club. Winchell often used his column to trash the swells, a popular pastime during the Depression. And after Roosevelt secretly invited him to the White House to ask for help in his war against the plutocracy, Winchell suddenly was boosting the New Deal as ardently as Sally Rand’s bubble dances.

Delighted, Roosevelt asked the gossip back to the White House, this time publicly, to talk about foreign policy. Soon, Winchell was emitting a steady stream of anti-Hitler items. And, ever one for efficiency, Winchell managed to combine his new disdain for Nazis with his gleeful homophobia. Typical quip: “Hitler is a homo-sexua-list, or, as we vulgarians say, an outright fairy.” It only made him more popular, a superstar. Hit records were sung about him.

Yet when World War II ended, with both Hitler and Roosevelt dead, Winchell drifted in search of a cause. He soon found it the anti-communist crusades of McCarthy and J. Edgar Hoover (“the person gangsters fear more than anybody,” Winchell liked to call him). It worked for a while. But the same progressive media that cheered on his idolatry of Roosevelt and his name-calling of Hitler weren’t so keen when the political tables were turned. And Winchell’s personal and political carelessness gave them an opening.

First he got into a vicious hair-pulling public feud with the popular black singer-dancer Josephine Baker, who accused him of failing to support her when she was refused service at the Stork Club where he held nightly court. Winchell sent letters to the FBI calling her a communist. She finally left America for European exile, but the stench of the squabble remained.

Then, the liberal New York Post blew the whistle on what had been an open but unreported secret in the media world: Almost the entirety of Winchell’s newspaper column was authored by ghostwriters. Around the same time, Winchell’s champion Joe McCarthy imploded during televised congressional hearings. Winchell’s public brutishness was no more (and no less) harsh than ever, but anti-communism had dropped out of fashion.

First his TV show was canceled, then his radio broadcast, then his syndication deal. Gabler argues that Winchell’s venture into television was what undid him. “When he was young, he was kind of puckish and funny,” Gabler said. “But when television came along, there was a meanness to him that worked very much against him. … Walter Winchell was too mean for television.” Tell that to Rachel Maddow or Tucker Carlson.

Whatever the exact cause, Winchell quickly fell from stardom to stupor. By 1959, he was known less for gossip or news or commentary than for his overwrought narration of the tough-guy cop show The Untouchables. When his newspaper folded following a strike in 1963, Winchell became a media unperson, as invisible as Sally Rand’s garments. In desperation, he took out a pleading ad in the Hollywood trade journal Variety seeking a job—“even an extra janitor.”

Nothing worked; his banishment was total, and final. It’s easy, and mostly fair, to deplore Winchell as an ugly mixture of cruelty and humbug, the original media hype, a reminder that the golden age of journalism that we hear so much about today as journalists bitterly protest the withering-away of their profession was in reality more than a little tarnished. And for all Winchell’s faults, he’s also an illustration of the perplexing but often accurate cliché that about-to-be-unemployed reporters use to describe themselves: that they’ve got ink in their veins. A few years ago, when I was talking to talk-show host Larry King, he told me he idolized Winchell as the consummate gotta-tell-you-something guy. “You know what Winchell was doing at the end?” King asked wistfully. “Typing out mimeographed sheets with his column, handing them out on the corner.”

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Before TMZ and Page Six, America Turned to Walter Winchell for Gossip

Winchell_1161x653

American Masters—Walter Winchell: The Power of Gossip. PBS. Tuesday, October 20, 9 p.m.

Walter Winchell once compared himself to a man sitting at an upstairs window, watching life parade by, perhaps dropping a flower on those below, perhaps a flower pot. As far as it went, that was accurate. What he failed to mention was that he was usually being paid—with sex or information or influence, if not cash—to choose between the petals or the clay pots.

The broadcaster-columnist Winchell is little-remembered these days, but he was very much a man of our time. Gossip as news, news as entertainment, fake news, tabloid news—as PBS’ American Masters episode Walter Winchell: The Power of Gossip recounts, Winchell was present at the creation of it all. He had a radar fix on the lurid and the tawdry and an awesome disregard for anything that smacked of professionalism or integrity—as if this or that newspaper gives a continental about ethics, as they are so amusingly called.”

Decades ahead of political correctness as we know it today, he whored on behalf of whatever was politically trendy: for Franklin Roosevelt’s New Deal and against fascism in the 1930s; for Joe McCarthy and anti-communism in the 1950s. He was the first multi-media journalist, with an empire that ranged from a syndicated newspaper column to a national radio show to television, and when he opened his broadcasts with a booming “Good evening, Mr. and Mrs. North America and all the ships at sea!” it was no bluster—at his peak, by some estimates, Winchell was reaching two out of every three Americans per week.

The Power of Gossip tells Winchell’s story in an appropriately punchy style, with considerable aid from Neal Gabler, author of the most comprehensive Winchell biography. It follows him from his days as a child vaudeville hoofer to the unveiling of his one-typed-page weekly gossip sheet on professional comings and goings in his troupe. What started as purely a hobby prompted by the gift of a typewriter from his wife—Winchell didn’t have a high school diploma, much less a degree or any background in journalism—quickly elevated him into the entertainment industry press and then the New York tabloids. His Broadway gossip column debuted in 1924 in the New York Evening Graphic, better known as the Porno-Graphic for its daily collection of near-nekkid showgirl photos.

Contrary to what The Power of Gossip suggests, Winchell did not invent the gossip trade. Paul the Apostle was already complaining about chatterers in his epistle to the Romans, in which he bitched about the “whisperers, backbiters, haters of God, despiteful, proud, boasts, inventors of evil things,” of whom there were many, right up through the nineteen-teens, when Hearst Newspapers’ Louella Parsons went to work scuttling the movies of rivals of Marion Davies, illicit paramour of her chain’s boss.

But Winchell enhanced the job into a weapon of mass dissemination. He practically devised a new language—slanguage, he called it—to load his poison pen. Couples slipping off to Nevada for a quickie divorce were “Reno-vating” their marriages. A promiscuous Hollywood maiden “has been on more laps than a napkin.” And Winchell was leeringly whispering about makin’ whoopee long before long before Eddie Cantor sang about it. He invented the three-dot-column, the stream-of-consciousness collection of brief items strung together by ellipses that beat Twitter to the punch by 75 years. (Often as not, those ellipses dripped down the decolletage of starlets with whom Winchell wanted to make whoopee.)

His other major innovation, as Gabler and The Power of Gossip note, was elevating gossip into a populist war club. Winchell often used his column to trash the swells, a popular pastime during the Depression. And after Roosevelt secretly invited him to the White House to ask for help in his war against the plutocracy, Winchell suddenly was boosting the New Deal as ardently as Sally Rand’s bubble dances.

Delighted, Roosevelt asked the gossip back to the White House, this time publicly, to talk about foreign policy. Soon, Winchell was emitting a steady stream of anti-Hitler items. And, ever one for efficiency, Winchell managed to combine his new disdain for Nazis with his gleeful homophobia. Typical quip: “Hitler is a homo-sexua-list, or, as we vulgarians say, an outright fairy.” It only made him more popular, a superstar. Hit records were sung about him.

Yet when World War II ended, with both Hitler and Roosevelt dead, Winchell drifted in search of a cause. He soon found it the anti-communist crusades of McCarthy and J. Edgar Hoover (“the person gangsters fear more than anybody,” Winchell liked to call him). It worked for a while. But the same progressive media that cheered on his idolatry of Roosevelt and his name-calling of Hitler weren’t so keen when the political tables were turned. And Winchell’s personal and political carelessness gave them an opening.

First he got into a vicious hair-pulling public feud with the popular black singer-dancer Josephine Baker, who accused him of failing to support her when she was refused service at the Stork Club where he held nightly court. Winchell sent letters to the FBI calling her a communist. She finally left America for European exile, but the stench of the squabble remained.

Then, the liberal New York Post blew the whistle on what had been an open but unreported secret in the media world: Almost the entirety of Winchell’s newspaper column was authored by ghostwriters. Around the same time, Winchell’s champion Joe McCarthy imploded during televised congressional hearings. Winchell’s public brutishness was no more (and no less) harsh than ever, but anti-communism had dropped out of fashion.

First his TV show was canceled, then his radio broadcast, then his syndication deal. Gabler argues that Winchell’s venture into television was what undid him. “When he was young, he was kind of puckish and funny,” Gabler said. “But when television came along, there was a meanness to him that worked very much against him. … Walter Winchell was too mean for television.” Tell that to Rachel Maddow or Tucker Carlson.

Whatever the exact cause, Winchell quickly fell from stardom to stupor. By 1959, he was known less for gossip or news or commentary than for his overwrought narration of the tough-guy cop show The Untouchables. When his newspaper folded following a strike in 1963, Winchell became a media unperson, as invisible as Sally Rand’s garments. In desperation, he took out a pleading ad in the Hollywood trade journal Variety seeking a job—“even an extra janitor.”

Nothing worked; his banishment was total, and final. It’s easy, and mostly fair, to deplore Winchell as an ugly mixture of cruelty and humbug, the original media hype, a reminder that the golden age of journalism that we hear so much about today as journalists bitterly protest the withering-away of their profession was in reality more than a little tarnished. And for all Winchell’s faults, he’s also an illustration of the perplexing but often accurate cliché that about-to-be-unemployed reporters use to describe themselves: that they’ve got ink in their veins. A few years ago, when I was talking to talk-show host Larry King, he told me he idolized Winchell as the consummate gotta-tell-you-something guy. “You know what Winchell was doing at the end?” King asked wistfully. “Typing out mimeographed sheets with his column, handing them out on the corner.”

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Who’s Worse on Housing, Trump or Biden?

reason-biden7

President Donald Trump’s pitch to the suburban voters he badly needs is that he saved their neighborhoods from destructive housing policies that a Joe Biden administration would reinstate and expand.

“Suburban women, will you please like me?” said Trump at a rally in Jonestown, Pennsylvania, on Tuesday. “I saved your damn neighborhood.”

It’s not a new pitch. Since this summer, the president has been touting the fact that his administration scrapped an Obama-era fair housing rule. That rule, he argues, would force low-income housing into tranquil suburbs; should Biden win in November, he says, that will be reversed.

“Biden supports Cory Booker’s Bill that will force low income housing in the Suburbs, which will lower property values and bring crime to your neighborhoods,” tweeted Trump last week. “If Dems win, GOODBYE SUBURBS!”

So how exactly would a President Joe Biden eliminate the suburbs?

The bill Trump is referencing is the Housing, Opportunity, Mobility, and Equity (HOME) Act, sponsored in 2019 by Sen. Cory Booker (D–N.J.). It would attach conditions to block grants from the federal Community Development and Surface Transportation, requiring states to implement strategies for making housing more affordable and “inclusive.”

Biden’s housing platform endorses the HOME Act. It also says that he would direct his transportation and housing secretaries to identify other federal grant programs that can be amended to require states and localities to amend their zoning codes.

The HOME Act would require recipients of federal housing and transportation funds to file strategic plans and annual progress reports detailing “transformative activities” they’ve taken to “reduce barriers to housing development, including affordable housing, and increase housing supply affordability and elasticity.”

The bill offers a detailed menu of policies that states and localities could adopt to boost affordable housing production, including removing restrictions on multi-family housing, eliminating off-street parking requirements, shortening permitting timelines, and removing height limits on new construction.

It is this—encouraging new construction in tightly regulated areas—that Trump calls the death of the suburbs that Trump. It’s also an approach some free marketers have embraced, given the deregulatory nature of many, though not all, of the HOME Act’s policies.

“Localities should show real progress in deregulating onerous barriers to housing development and righting the wrongs of redlining in order to receive HUD funding and even transit dollars,” says Michael Hendrix, state and local policy director at the Manhattan Institute.

Programs like the Community Development Block Grant program, he says, send a lot of money on a per capita basis to wealthy communities that maintain some of the most restrictive regulations on housing development.

“We should really question what exactly we are incentivizing here,” Hendrix tells Reason. “Are we incentivizing more regulation and more exclusivity? That hurts everyone.”

Before the president adopted his “war on suburbs” rhetoric this year, he favored a limited version of this very approach: requiring recipients of federal housing dollars to report on specific things they’re doing to deregulate their housing markets.

Booker’s HOME Act takes this approach further by also linking federal transportation dollars to local housing reform.

The idea here is twofold: to give the feds more leverage over the most exclusive jurisdictions (who might prioritize their own local zoning codes over federal housing dollars, but would hate to lose federal transportation funding), and to create a rational link between land use policy and transportation funding.

“Implicitly, the current regulations around the built environment point toward more sprawl,” argues Hendrix, saying that tighter restrictions in high-demand places push more housing development out toward the periphery of urban areas—necessitating more federal infrastructure spending.

On the other hand, the more leverage the federal government has over state and local governments’ land use policies, the greater the risk that leverage is used for policies that have little to do with free markets.

In addition to its deregulatory aspects, Booker’s HOME Act would also encourage states and localities to tax vacant land and ban landlords from considering a tenant’s criminal history or source of income. And while the legislation does encourage localities to eliminate specific policies that stymie housing development, it does so, in part, to encourage the construction of new below-market-rate units that are restricted to renters making specified incomes.

“It’s become quite popular among left-of-center urbanist types to see inclusionary zoning [where new construction is required to have a certain number of these below-market-rate units] as a panacea,” says Marc Scribner, a transportation policy researcher at the Reason Foundation (which publishes this website).

These programs don’t have a great record. New York City’s inclusionary zoning program has produced a paltry number of new units (about 2,000 in a city of 8 million), most of which have benefited from public subsidies.

Inclusionary zoning policies in the D.C./Baltimore area, according to one 2019 study, have been associated with increased housing prices, as developers increase prices to cover the costs of the below-market-rate units they’re required to build.

Hendrix acknowledges that giving the federal government more leverage over land use decisions comes with the risk that they’ll encourage counterproductive policies. But, he says, it’s a risk worth taking as long as those federal grant programs are there.

“For better or worse, the federal government funds a lot of transportation in America and doles out a lot of dollars in grants to localities,” he says. Attaching strings to those dollars so that they are not going to the jurisdictions with the most restrictions on housing development is an improvement on the status quo.

The ideal libertarian response might be just to eliminate federal transportation and housing grant programs. The feds wouldn’t have any leverage to encourage localities to deregulate their housing markets, but they also wouldn’t be subsidizing their exclusivity either.

As a matter of practical politics, that’s unlikely to happen anytime soon.

While budget plans put out by the Trump White House have called for eliminating Community Block Development grants and reducing federal transportation spending, none of those cuts were ever enacted. Since the president has also ended his administration’s efforts to retool fair housing rules to encourage local deregulation, Trump’s approach basically boils down to doling out the same amount of grant money while asking less of the jurisdictions receiving it.

Biden’s housing plan, meanwhile, would tie some deregulatory strings to the money going out the door but also greatly increase the amount the feds spend on housing. In addition to his embrace of the HOME Act, Biden backs more tax credits for first-time homebuyers and lower-income renters. He also promises to create a $100 billion Affordable Housing Trust fund.

Libertarians are left to decide which approach is the lesser evil.

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Who’s Worse on Housing, Trump or Biden?

reason-biden7

President Donald Trump’s pitch to the suburban voters he badly needs is that he saved their neighborhoods from destructive housing policies that a Joe Biden administration would reinstate and expand.

“Suburban women, will you please like me?” said Trump at a rally in Jonestown, Pennsylvania, on Tuesday. “I saved your damn neighborhood.”

It’s not a new pitch. Since this summer, the president has been touting the fact that his administration scrapped an Obama-era fair housing rule. That rule, he argues, would force low-income housing into tranquil suburbs; should Biden win in November, he says, that will be reversed.

“Biden supports Cory Booker’s Bill that will force low income housing in the Suburbs, which will lower property values and bring crime to your neighborhoods,” tweeted Trump last week. “If Dems win, GOODBYE SUBURBS!”

So how exactly would a President Joe Biden eliminate the suburbs?

The bill Trump is referencing is the Housing, Opportunity, Mobility, and Equity (HOME) Act, sponsored in 2019 by Sen. Cory Booker (D–N.J.). It would attach conditions to block grants from the federal Community Development and Surface Transportation, requiring states to implement strategies for making housing more affordable and “inclusive.”

Biden’s housing platform endorses the HOME Act. It also says that he would direct his transportation and housing secretaries to identify other federal grant programs that can be amended to require states and localities to amend their zoning codes.

The HOME Act would require recipients of federal housing and transportation funds to file strategic plans and annual progress reports detailing “transformative activities” they’ve taken to “reduce barriers to housing development, including affordable housing, and increase housing supply affordability and elasticity.”

The bill offers a detailed menu of policies that states and localities could adopt to boost affordable housing production, including removing restrictions on multi-family housing, eliminating off-street parking requirements, shortening permitting timelines, and removing height limits on new construction.

It is this—encouraging new construction in tightly regulated areas—that Trump calls the death of the suburbs that Trump. It’s also an approach some free marketers have embraced, given the deregulatory nature of many, though not all, of the HOME Act’s policies.

“Localities should show real progress in deregulating onerous barriers to housing development and righting the wrongs of redlining in order to receive HUD funding and even transit dollars,” says Michael Hendrix, state and local policy director at the Manhattan Institute.

Programs like the Community Development Block Grant program, he says, send a lot of money on a per capita basis to wealthy communities that maintain some of the most restrictive regulations on housing development.

“We should really question what exactly we are incentivizing here,” Hendrix tells Reason. “Are we incentivizing more regulation and more exclusivity? That hurts everyone.”

Before the president adopted his “war on suburbs” rhetoric this year, he favored a limited version of this very approach: requiring recipients of federal housing dollars to report on specific things they’re doing to deregulate their housing markets.

Booker’s HOME Act takes this approach further by also linking federal transportation dollars to local housing reform.

The idea here is twofold: to give the feds more leverage over the most exclusive jurisdictions (who might prioritize their own local zoning codes over federal housing dollars, but would hate to lose federal transportation funding), and to create a rational link between land use policy and transportation funding.

“Implicitly, the current regulations around the built environment point toward more sprawl,” argues Hendrix, saying that tighter restrictions in high-demand places push more housing development out toward the periphery of urban areas—necessitating more federal infrastructure spending.

On the other hand, the more leverage the federal government has over state and local governments’ land use policies, the greater the risk that leverage is used for policies that have little to do with free markets.

In addition to its deregulatory aspects, Booker’s HOME Act would also encourage states and localities to tax vacant land and ban landlords from considering a tenant’s criminal history or source of income. And while the legislation does encourage localities to eliminate specific policies that stymie housing development, it does so, in part, to encourage the construction of new below-market-rate units that are restricted to renters making specified incomes.

“It’s become quite popular among left-of-center urbanist types to see inclusionary zoning [where new construction is required to have a certain number of these below-market-rate units] as a panacea,” says Marc Scribner, a transportation policy researcher at the Reason Foundation (which publishes this website).

These programs don’t have a great record. New York City’s inclusionary zoning program has produced a paltry number of new units (about 2,000 in a city of 8 million), most of which have benefited from public subsidies.

Inclusionary zoning policies in the D.C./Baltimore area, according to one 2019 study, have been associated with increased housing prices, as developers increase prices to cover the costs of the below-market-rate units they’re required to build.

Hendrix acknowledges that giving the federal government more leverage over land use decisions comes with the risk that they’ll encourage counterproductive policies. But, he says, it’s a risk worth taking as long as those federal grant programs are there.

“For better or worse, the federal government funds a lot of transportation in America and doles out a lot of dollars in grants to localities,” he says. Attaching strings to those dollars so that they are not going to the jurisdictions with the most restrictions on housing development is an improvement on the status quo.

The ideal libertarian response might be just to eliminate federal transportation and housing grant programs. The feds wouldn’t have any leverage to encourage localities to deregulate their housing markets, but they also wouldn’t be subsidizing their exclusivity either.

As a matter of practical politics, that’s unlikely to happen anytime soon.

While budget plans put out by the Trump White House have called for eliminating Community Block Development grants and reducing federal transportation spending, none of those cuts were ever enacted. Since the president has also ended his administration’s efforts to retool fair housing rules to encourage local deregulation, Trump’s approach basically boils down to doling out the same amount of grant money while asking less of the jurisdictions receiving it.

Biden’s housing plan, meanwhile, would tie some deregulatory strings to the money going out the door but also greatly increase the amount the feds spend on housing. In addition to his embrace of the HOME Act, Biden backs more tax credits for first-time homebuyers and lower-income renters. He also promises to create a $100 billion Affordable Housing Trust fund.

Libertarians are left to decide which approach is the lesser evil.

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Afraid of Foreign Election Meddling? Worry More About America’s Sick Political Culture.

cnpphotos181161(1)

For a people famously disinterested in events outside their own borders, Americans offer up a lot of rent-free space in their minds to foreign political operatives. Liberals fret that Russians plot nefarious schemes to support President Donald Trump’s reelection effort, while conservatives worry that Chinese and Ukrainian energy companies are funneling funds to Democratic presidential contender Joe Biden through his son.

That foreign players have fiddled with U.S. elections in recent years is no revelation, though it seems unlikely that the efforts had much impact. That so many Americans find it believable that major presidential candidates are foreign-backed puppets is less testimony to the effectiveness of overseas scheming than to the fraught nature of U.S. political culture.

In an already volatile political climate, The New York Times recently reported that “President Vladimir V. Putin of Russia is most likely continuing to approve and direct interference operations aimed at raising President Trump’s re-election chances, a recent C.I.A. analysis concluded.” That squares with warnings from RAND Corporation that “Russia might try again to manipulate and divide U.S. voters through social media.”

Both analyses are just a hair more than speculative—the CIA has “moderate confidence” in its findings—but they follow up on reports of Russian dirty tricks in the 2016 election involving hacked emails released through Wikileaks and incendiary social media posts from front groups that were supposed to set Americans against one another (more than they already are, that is).

For anybody at this late date who doesn’t have at least a rough familiarity with the shenanigans, they’re covered in Special Counsel Robert S. Mueller’s report on the subject. While Mueller’s team uncovered a remarkable amount of political sleaziness and the tacit approval of the dirty tricks campaign by the Trump team, “ultimately, the investigation did not establish that the Campaign coordinated or conspired with the Russian government in its election-interference activities.”

That means Russia’s efforts were covert (not causally linked to the source) and carried out without the active participation of a contender for office. That, according to the University of Hong Kong’s Dov Levin, who studies such interventions, is the sort of fiddling that has a low likelihood of having an impact.

“Without the domestic actor’s cooperation in providing information (or ‘local knowledge’) about the electorate’s preferences and the best ways to intervene in its favor, the great power will usually see its chances of succeeding as too low to justify an electoral intervention,” he wrote in a 2016 paper published in International Studies Quarterly. Likewise, “a covert intervention carries far lower chances of a backlash due to the inherent secrecy in the provision of the electoral aid. However, the lower risk comes with reduced effectiveness.”

By contrast, coordinating with a party and openly endorsing its candidate—or threatening to, for example, cut aid if a disfavored candidate wins—carries more risks but a higher chance of success.

That’s not to say that covert operations are unknown—they make up the majority of the 117 electoral interventions by the U.S. and the U.S.S.R./Russia between 1946 and 2000 that Levin studied (yes, America has been a major offender when it comes to sticking its nose into other people’s elections). But covert operations still require a significant commitment, such as the millions of dollars the U.S. funneled to a Thai political party for that country’s 1969 elections.

By comparison, email leaks and hundreds of thousands of dollars for Twitter and Facebook political ads, even when coordinated by Russia’s modestly funded Internet Research Agency, is awfully low-rent. The campaign seems crafted less to affect the U.S. election than to let the officials of post-Cold War Russia flex atrophied muscles and—after the efforts were disclosed—convince the Russian public that their country is still an international player.

That same perspective needs to be applied to New York Post reports of Ukrainian and Chinese business executives paying Hunter Biden for access to his presidential-hopeful father. If verified, the correspondence published by the Post would confirm suspicions that Hunter Biden’s main asset through his many sketchy business dealings over the years has been his last name.

But a politician’s relative peddling promises of access is evidence of garden-variety corruption of the sort that plagues politics in good times and bad. It’s not confirmation of accusations that the politician is a foreign asset and “the Chinese Communist Party’s candidate for president,” as a very briefly serving former acting U.S. Attorney General alleges.

Which is to say there’s no proof that Biden is a willing participant in foreign political intervention covert, overt, or any other sort.

What we’re seeing through all of this is less evidence that foreigners are gaming American elections in any serious way than that Americans have eroded their own political culture. More to the point, too many of us now question the decency and the legitimacy of political opponents.

Fifty-five percent of Republicans and 44 percent of Democrats say the party opposing their own is “not just worse for politics—they are downright evil,” according to a 2019 YouGov survey. Thirty-four percent of Republicans and 27 percent of Democrats say the other party “lack the traits to be considered fully human—they behave like animals.”

“We find pronounced willingness by both Democrats and Republicans to dehumanize members of the out-party,” four political scientists noted in a 2019 paper published in Political Behavior. “By depriving political opponents, to even a small extent, of the complex thoughts and scruples we often associate with humanity, we make them easier to stereotype and we may more readily ascribe simpler, more base, and even nefarious, motivations to them.”

As a result, too many of us don’t just decline to vote for candidates we don’t like, or simply disagree with their supporters. Instead, those “others” must be utterly malevolent, dangerous, and unworthy of respect, with “base, and even nefarious, motivations” that may well include being willing servants of sinister foreign masters.

Foreign governments may try to exploit America’s political fractures. They may do so to actually shift the outcomes of our elections or to play to the audience at home. But Americans can only blame themselves for turning a centuries-old democracy into a playground for low-budget dirty tricks.

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Afraid of Foreign Election Meddling? Worry More About America’s Sick Political Culture.

cnpphotos181161(1)

For a people famously disinterested in events outside their own borders, Americans offer up a lot of rent-free space in their minds to foreign political operatives. Liberals fret that Russians plot nefarious schemes to support President Donald Trump’s reelection effort, while conservatives worry that Chinese and Ukrainian energy companies are funneling funds to Democratic presidential contender Joe Biden through his son.

That foreign players have fiddled with U.S. elections in recent years is no revelation, though it seems unlikely that the efforts had much impact. That so many Americans find it believable that major presidential candidates are foreign-backed puppets is less testimony to the effectiveness of overseas scheming than to the fraught nature of U.S. political culture.

In an already volatile political climate, The New York Times recently reported that “President Vladimir V. Putin of Russia is most likely continuing to approve and direct interference operations aimed at raising President Trump’s re-election chances, a recent C.I.A. analysis concluded.” That squares with warnings from RAND Corporation that “Russia might try again to manipulate and divide U.S. voters through social media.”

Both analyses are just a hair more than speculative—the CIA has “moderate confidence” in its findings—but they follow up on reports of Russian dirty tricks in the 2016 election involving hacked emails released through Wikileaks and incendiary social media posts from front groups that were supposed to set Americans against one another (more than they already are, that is).

For anybody at this late date who doesn’t have at least a rough familiarity with the shenanigans, they’re covered in Special Counsel Robert S. Mueller’s report on the subject. While Mueller’s team uncovered a remarkable amount of political sleaziness and the tacit approval of the dirty tricks campaign by the Trump team, “ultimately, the investigation did not establish that the Campaign coordinated or conspired with the Russian government in its election-interference activities.”

That means Russia’s efforts were covert (not causally linked to the source) and carried out without the active participation of a contender for office. That, according to the University of Hong Kong’s Dov Levin, who studies such interventions, is the sort of fiddling that has a low likelihood of having an impact.

“Without the domestic actor’s cooperation in providing information (or ‘local knowledge’) about the electorate’s preferences and the best ways to intervene in its favor, the great power will usually see its chances of succeeding as too low to justify an electoral intervention,” he wrote in a 2016 paper published in International Studies Quarterly. Likewise, “a covert intervention carries far lower chances of a backlash due to the inherent secrecy in the provision of the electoral aid. However, the lower risk comes with reduced effectiveness.”

By contrast, coordinating with a party and openly endorsing its candidate—or threatening to, for example, cut aid if a disfavored candidate wins—carries more risks but a higher chance of success.

That’s not to say that covert operations are unknown—they make up the majority of the 117 electoral interventions by the U.S. and the U.S.S.R./Russia between 1946 and 2000 that Levin studied (yes, America has been a major offender when it comes to sticking its nose into other people’s elections). But covert operations still require a significant commitment, such as the millions of dollars the U.S. funneled to a Thai political party for that country’s 1969 elections.

By comparison, email leaks and hundreds of thousands of dollars for Twitter and Facebook political ads, even when coordinated by Russia’s modestly funded Internet Research Agency, is awfully low-rent. The campaign seems crafted less to affect the U.S. election than to let the officials of post-Cold War Russia flex atrophied muscles and—after the efforts were disclosed—convince the Russian public that their country is still an international player.

That same perspective needs to be applied to New York Post reports of Ukrainian and Chinese business executives paying Hunter Biden for access to his presidential-hopeful father. If verified, the correspondence published by the Post would confirm suspicions that Hunter Biden’s main asset through his many sketchy business dealings over the years has been his last name.

But a politician’s relative peddling promises of access is evidence of garden-variety corruption of the sort that plagues politics in good times and bad. It’s not confirmation of accusations that the politician is a foreign asset and “the Chinese Communist Party’s candidate for president,” as a very briefly serving former acting U.S. Attorney General alleges.

Which is to say there’s no proof that Biden is a willing participant in foreign political intervention covert, overt, or any other sort.

What we’re seeing through all of this is less evidence that foreigners are gaming American elections in any serious way than that Americans have eroded their own political culture. More to the point, too many of us now question the decency and the legitimacy of political opponents.

Fifty-five percent of Republicans and 44 percent of Democrats say the party opposing their own is “not just worse for politics—they are downright evil,” according to a 2019 YouGov survey. Thirty-four percent of Republicans and 27 percent of Democrats say the other party “lack the traits to be considered fully human—they behave like animals.”

“We find pronounced willingness by both Democrats and Republicans to dehumanize members of the out-party,” four political scientists noted in a 2019 paper published in Political Behavior. “By depriving political opponents, to even a small extent, of the complex thoughts and scruples we often associate with humanity, we make them easier to stereotype and we may more readily ascribe simpler, more base, and even nefarious, motivations to them.”

As a result, too many of us don’t just decline to vote for candidates we don’t like, or simply disagree with their supporters. Instead, those “others” must be utterly malevolent, dangerous, and unworthy of respect, with “base, and even nefarious, motivations” that may well include being willing servants of sinister foreign masters.

Foreign governments may try to exploit America’s political fractures. They may do so to actually shift the outcomes of our elections or to play to the audience at home. But Americans can only blame themselves for turning a centuries-old democracy into a playground for low-budget dirty tricks.

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How Will Bitcoin Lead to More Freedom?

Salin and May

Katie Haun has one of bitcoin’s most improbable conversion stories. As an attorney at the U.S. Department of Justice, she prosecuted the two corrupt federal agents working the Silk Road case and created the federal government’s first cryptocurrency task force. “I’m the prosecutor who helped put some of the earliest bitcoin criminals in jail,” she boasted in a 2018 speech. 

But while learning about bitcoin as a crime fighter, it dawned on her “how profoundly this technology could change how we do all sorts of things.” Haun is now a general partner at the venture capital fund Andreessen Horowitz, or a16z, where she co-leads its crypto funds with over $350 million raised since 2018. The firm is betting on blockchain as a new computing platform that will, among other things, create a decentralized financial system and fulfill the web’s original promise as an open network controlled by its users. 

Blockchain computing “feels like the early days of the internet, web 2.0, or smartphones all over again,” according to a16z’s crypto thesis. Haun also sits on the board of the nonprofit organization overseeing Facebook’s cryptocurrency project Libra. At a 2019 congressional hearing, David Marcus, head of the company’s blockchain group, assured lawmakers, “Let me be clear and unambiguous: Facebook will not offer the Libra digital currency until we have fully addressed regulators’ concerns and received appropriate approvals.”

In their embrace of regulation, Haun and Marcus are at one extreme of the cryptocurrency community; on the other end, are the so-called bitcoin maximalists who have a name for projects like Libra: “shitcoin.”

“I would not be interested in bitcoin if governments didn’t want to ban it,” the software developer Pierre Rochard tweeted in 2017.

In a December 2019 essay titled “Cryptocurrency Is Most Useful for Breaking Laws and Social Constructs, Open Money Initiative Founder Jill Carlson wrote that cryptocurrency wasn’t designed to solve “mainstream problems.” It’s a tool used by “freedom fighters and terrorists, by journalists and dissidents, by scammers and black market dealers,” by “sex workers” or people “procuring drugs on the internet”—the type of person Katie Haun once worked to put in jail. Bitcoin maximalists, like Rochard, believe that governments will eventually attempt to ban bitcoin because it’s destined to replace fiat money, which will, among other things, eliminate their power to print money to finance the welfare-warfare state.

The divide over whether this technology is a tool for changing society by working within the system or by disrupting it from the outside predates the invention of bitcoin by a few decades. It traces back to a 1987 debate between the physicist Timothy C. May and the economist and entrepreneur Phil Salin, two early internet visionaries, whose difference of opinion laid the groundwork for the “cypherpunk” movement—a community of computer scientists, mathematicians, hackers, and avid science fiction readers whose work and writings influenced the creation of bitcoin, WikiLeaks, Tor, BitTorrent, and more. (Reason is publishing a four-part documentary series on the cypherpunk movement. The first two installments are available here and here.)

The bitcoin maximalists often use the “shitcoin” moniker to refer to cryptocurrency projects that are outright scams, technologically flawed, or cheap imitations of Satoshi  Nakamoto’s invention, when in reality the world only needs one currency. Bitcoin, they maintain, is best understood as sound money, and Silicon Valley’s infatuation with “blockchain technology” is “a great example of ‘cargo cult science,'” as the economist Saifedean Ammous wrote in The Bitcoin Standard: The Decentralized Alternative to Central Banking.

But the community’s divide is also partly rooted in a disagreement over whether cryptocurrency is essentially a technology of resistance that derives value from being impervious to government interference and control, or whether it’s a tool for transforming society from within, in which case government regulation won’t sink the entire enterprise. A careful look at the debate that started with May and Salin in the 1980s helps us understand the best arguments of both sides.

BlackNet: ‘A Technological Means of Undermining all Governments’

In 1987, before the launch of the World Wide Web, May and Salin were part of a small community of West Coast science fiction–obsessed technologists mulling the implications of a decentralized, global information network running on personal computers. It was clear to May and Salin that the internet would remake the world, but they disagreed on what kind of software would serve as the linchpin.

Salin saw technology as a way to gradually drive down the transaction costs that impede human activity, making it feasible to interact in ways that would otherwise be prohibitively expensive. “I’m interested in how to lower costs,” Salin told Reason in 1984. “The Austrian [School of Economics] insight is that any industry run as a planned economy for any time should be fertile ground for an entrepreneur.”

In 1986, he started the American Information Exchange, or AMIX, one of the first e-commerce startups. Salin, whose intellectual hero was the Austrian economist Friedrich Hayek, envisioned AMIX as a global marketplace for the buying and selling of local expertise that would enhance human cooperation and gradually replace central planning.

In a 1991 essay, Salin envisioned a “fluid, transaction-oriented market system, with two-way feedback” that could result in “crowding out monolithic, mostly government bureaucracies.” The same language could be applied to many projects in the modern cryptocurrency space. Facebook’s Libra, for example, promises to use blockchain technology to move money around the world in a manner that’s “as easy and cost-effective” as “sending a message or sharing a photo.” The project’s backers maintain that enabling “frictionless payments” for the 1.7 billion people around the world without access to banking will do wonders for alleviating poverty. Those frictions are mostly created by government regulation; what’s implicit in Facebook’s pitch is that those rules will be gradually crowded out, though not overthrown.

After being introduced to Salin by his friend Chip Morningstar, a computer scientist, in December 1987, May drove out to Redwood City, California to meet Salin and hear his pitch for AMIX. He grasped the idea immediately, but it bored him. “People aren’t going to be selling meaningless stuff, like surfboard recommendations,” May recalled telling Salin.

May didn’t think AMIX was a scam, like many modern cryptocurrency ventures that earn that descriptor shitcoin. But he was interested in upending society and didn’t see how AMIX would have much of an impact. 

May suggested to Salin that he reconceive of the project as an anonymous platform for selling company trade secrets, “such as plans for that B-1 Bomber or a process for a technology.” In a thought experiment, May later called his idea “BlackNet,” writing in a pretend advertisement for the service that it would turn “nation-states, export laws, patent laws, national security considerations and the like” into “relics of the pre-cyberspace era.”

In a series of personal notes following his meeting with Salin, which May shared with Reason prior to his death in 2018, he mused that BlackNet was a “technological means of undermining all governments.” Though some might say that “‘it won’t be allowed to happen’ technology would ‘probably make it inevitable,'” he wrote.

May’s ideas about BlackNet evolved over the years. In 1986, a friend had given him a photocopy of Vernor Vinge’s 1981 novella True Names, in which hackers inhabit a virtual world called the “Other Plane” where the government can’t decipher their real identities. It had a big impact on May, who melded the “Other Plane” with “Galt’s Gulch” from Ayn Rand’s Atlas Shrugged, which was a safe haven for rational and productive people protected from government coercion and taxation by an invisible shield. Instead of the Colorado mountains, May’s cyberspace Galt’s Gulch would exist on the internet, with cryptography providing protective cover.

“Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure,” May wrote in his 1988 manifesto, “so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions.”

Bitcoin isn’t BlackNet or a Galt’s Gulch in Cyberspace—it’s a decentralized form of non-governmental money. But it’s designed to be impervious to outside tampering so that the government can’t destroy it or undermine its value, and is roughly in keeping with May’s vision of an unstoppable technology. “The nature of sound money…lies precisely in the fact that no human is able to control it,” Ammous wrote in The Bitcoin Standard. Bitcoin “exist[s] orthogonally to the law; there is virtually nothing that any government authority can do to affect or alter [its] operation.”

The American Information Exchange: Exploiting the ‘Grey Areas’ 

The computer scientist E. Dean Tribble, who worked with Salin at AMIX, calls May “the shock jock” of the cypherpunk movement. “BlackNet is not a goal,” he says. “BlackNet is a negative consequence.”

Morningstar, the pioneering computer scientist who Salin hired to oversee the building of AMIX, recalls his boss’s skepticism of May’s ideas about escaping “the strictures and dysfunction of the mainstream-governed world.” The establishment “has had a long history of confronting new challenges and somehow having its way.”

Salin died of cancer in 1991 at age 41. His friend and colleague Mark S. Miller, a computer scientist, would flesh out the case that technology impacts society by gradually transforming it from within. Miller drew an analogy to a genetic takeover in biology, in which an alternate way of doing things slowly takes the place of an existing paradigm. 

Projects like AMIX, which was centrally controlled by a company, didn’t need to be completely “incorruptible” to have an impact because of all the grey areas where regulation doesn’t apply. Permissionless innovation pushes society in the direction of more freedom and decentralization. For example, “when people started doing credit card transactions over the internet, nobody knew if it was legal,” Miller tells Reason, “but they just started doing it.” 

Miller doesn’t consider Libra to be a worthless project despite Marcus’ commitment to cooperate with regulators. Once it starts operating, Miller says, there could still be experimentation happening “at the margins.” There could also be gateways to “trading between Libra and something permissionless,” which would help expand the cryptocurrency space.

Miller’s writings have often focused on how rules baked into computer code could replace aspects of the legal system. Along with K. Eric Drexler, the father of nanotechnology, he co-authored a series of papers applying economic insights to software design, which influenced the work of the computer scientist, legal scholar, and early cypherpunk Nick Szabo.

It was Szabo who coined the term “smart contracts“—self-executing arrangements written in code, and a common feature in today’s cryptocurrency projects. Szabo analogized his concept to a vending machine: A buyer drops in a coin and a machine provides the candy bar. “The fundamental logic here is automating ‘if-this-then-that’ on a self-executing basis with finality,” Szabo wrote. He also offered the example of a smart contract for auto repossession: “If the owner fails to make payments, the smart contract invokes the lien protocol, which returns control of the car keys to the bank.” 

A divide in the community over the definition of a smart contract also relates back to Salin’s debate with May. Do smart contracts have to be shielded from third-party interference to be worthy of the name? What if a government regulator has the power to stick a hand into the metaphorical vending machine to stop the candy bar from dropping into the slot? Does that undermine the purpose of smart contracts?

Miller and Morningstar consider AMIX to be “possibly the first smart-contracting system ever created” because it used software to mediate transactions between two parties. Deals on AMIX combined a written component, like a traditional contract, and a self-executing component: once a buyer and seller agreed on a price for a service, payment would be carried out by software. If there was a dispute, it would be resolved by humans.

AMIX software ran on a central server, meaning the company or a government regulator could theoretically interfere with the execution of a sale. According to Morningstar and Miller, the potential for interference doesn’t undermine the purpose of the smart contract.

“A smart contract that trusts a third party removes the killer feature of trustlessness,” wrote Jimmy Song, a bitcoin maximalist and influential figure in the space, in his 2018 essay, “The Truth About Smart Contracts.” 

Song applies his critique to a popular crypto business model, which Miller has also written about: using smart contracts to trade physical assets, such as land. Countries like Sweden and Georgia have explored operating a land registry that uses blockchains and smart contracts. Szabo explored this idea in a 1998 paper that predated blockchains and bitcoin titled “Secure Property Titles with Owner Authority.“

Physical assets are traded with smart contracts through what’s called tokenization. A property is assigned a digital tag with a corresponding private key. A seller uses that key to transfer ownership to the buyer, much like a bitcoin transaction. The record of ownership is encoded into a blockchain, which is a type of shared public database, so all parties know that it hasn’t been corrupted.

“There is an intractable problem in linking a digital to a physical asset whether it be fruit, cars or houses,” Song wrote. It “suffers from the same trust problem as normal contracts” because “physical assets are regulated by the jurisdiction you happen to be in.”

So if a judge refuses to honor that tokenized transaction, or a conqueror shows up at the door with an army, the smart contract will have accomplished nothing. “Ownership of the token cannot have dependencies outside of the smart contracting platform,” wrote Song, who sees smart contracts as useful only in systems like bitcoin, where the digital token itself holds value.  

Miller offered a rebuttal to this argument in a lecture titled, “Computer Security as the Future of Law” in 1997, predating Song’s article by 21 years. He laid out a vision for a gradual takeover of the existing law by smart contracts. We live in a world where different systems of rules are layered on top of each other, he explained. When Bobby Fischer and Boris Spassky played chess, they had to abide by the rules of the board, dictating, for example, that bishops can only move diagonally. They were simultaneously governed by another set of rules because the two men were “biological creatures…embedded in physics.” A Macintosh operating system is another example of a system that imposes a set of rules spelled out in software embedded in another set of rules—i.e., legal strictures, physics, and biology.

The rules on these different layers impact each other. For example, the physical world and the legal world have distinct sets of rules, but in legal disputes “physical possession has extraordinary influence in the actual outcome of the dispute, even if abstractly the law would have it otherwise.” If an object that belongs to you is in another person’s house, taking them to court to get possession of that object is rarely worth the hassle.

AMIX integrated computer-mediated contracts and human negotiated contracts. It’s true that humans, including government regulators, could override a transaction on AMIX, but for practical reasons that was unlikely to occur very often. Therefore, smart contracts on AMIX would have fulfilled their purpose in the vast majority of cases by reducing transaction costs with computer-mediated contracting.

Miller elaborated on this idea in a discussion of land registries in “The Digital Path: Smart Contracts and the Third World,” a 2003 paper that he co-wrote with Marc Stiegler. It acknowledges that a smart contracting system, “unlike government-based title transfer,” won’t be “backed by a coercive enforcement apparatus,” but the authors proposed various add ons to make it more likely that participants will “treat these titles as legitimate claims,” including a community rating system, and video contracting—an idea first proposed by Szabo—in which a conversation is recorded testifying to the validity of the arrangement in question. 

These tools don’t guarantee that governments will honor and enforce smart contracts, but there’s also a high cost to ignoring them. Szabo summed up this idea best in his 1998 paper: “While thugs can still take physical property by force, the continued existence of correct ownership records will remain a thorn in the side of usurping claimants.” 

Miller, Morningtar, and Tribble, who were involved with AMIX in the 1980s, have come together once again to try and make good on Salin’s vision. Miller and Tribble co-founded a startup called Agoric, which seeks to build a secure smart-contracting system that could serve as the backbone of a more decentralized internet, luring some high-level computer scientists away from comfortable jobs at the biggest software companies in Silicon Valley.

May passed away suddenly in 2018 at age 66. In the months leading up to his death, he was feeling disgusted with the proliferation of cryptocurrency conferences and regulated blockchain ventures. “I think Satoshi would barf,” he told CoinDesk. “Attempts to be ‘regulatory-friendly’ will likely kill the main uses for cryptocurrencies, which are NOT just ‘another form of PayPal or Visa.'” 

In May’s view, society still faced a “fork in the road…freedom vs. permissioned and centralized systems.” There are no grey areas.

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How Will Bitcoin Lead to More Freedom?

Salin and May

Katie Haun has one of bitcoin’s most improbable conversion stories. As an attorney at the U.S. Department of Justice, she prosecuted the two corrupt federal agents working the Silk Road case and created the federal government’s first cryptocurrency task force. “I’m the prosecutor who helped put some of the earliest bitcoin criminals in jail,” she boasted in a 2018 speech. 

But while learning about bitcoin as a crime fighter, it dawned on her “how profoundly this technology could change how we do all sorts of things.” Haun is now a general partner at the venture capital fund Andreessen Horowitz, or a16z, where she co-leads its crypto funds with over $350 million raised since 2018. The firm is betting on blockchain as a new computing platform that will, among other things, create a decentralized financial system and fulfill the web’s original promise as an open network controlled by its users. 

Blockchain computing “feels like the early days of the internet, web 2.0, or smartphones all over again,” according to a16z’s crypto thesis. Haun also sits on the board of the nonprofit organization overseeing Facebook’s cryptocurrency project Libra. At a 2019 congressional hearing, David Marcus, head of the company’s blockchain group, assured lawmakers, “Let me be clear and unambiguous: Facebook will not offer the Libra digital currency until we have fully addressed regulators’ concerns and received appropriate approvals.”

In their embrace of regulation, Haun and Marcus are at one extreme of the cryptocurrency community; on the other end, are the so-called bitcoin maximalists who have a name for projects like Libra: “shitcoin.”

“I would not be interested in bitcoin if governments didn’t want to ban it,” the software developer Pierre Rochard tweeted in 2017.

In a December 2019 essay titled “Cryptocurrency Is Most Useful for Breaking Laws and Social Constructs, Open Money Initiative Founder Jill Carlson wrote that cryptocurrency wasn’t designed to solve “mainstream problems.” It’s a tool used by “freedom fighters and terrorists, by journalists and dissidents, by scammers and black market dealers,” by “sex workers” or people “procuring drugs on the internet”—the type of person Katie Haun once worked to put in jail. Bitcoin maximalists, like Rochard, believe that governments will eventually attempt to ban bitcoin because it’s destined to replace fiat money, which will, among other things, eliminate their power to print money to finance the welfare-warfare state.

The divide over whether this technology is a tool for changing society by working within the system or by disrupting it from the outside predates the invention of bitcoin by a few decades. It traces back to a 1987 debate between the physicist Timothy C. May and the economist and entrepreneur Phil Salin, two early internet visionaries, whose difference of opinion laid the groundwork for the “cypherpunk” movement—a community of computer scientists, mathematicians, hackers, and avid science fiction readers whose work and writings influenced the creation of bitcoin, WikiLeaks, Tor, BitTorrent, and more. (Reason is publishing a four-part documentary series on the cypherpunk movement. The first two installments are available here and here.)

The bitcoin maximalists often use the “shitcoin” moniker to refer to cryptocurrency projects that are outright scams, technologically flawed, or cheap imitations of Satoshi  Nakamoto’s invention, when in reality the world only needs one currency. Bitcoin, they maintain, is best understood as sound money, and Silicon Valley’s infatuation with “blockchain technology” is “a great example of ‘cargo cult science,'” as the economist Saifedean Ammous wrote in The Bitcoin Standard: The Decentralized Alternative to Central Banking.

But the community’s divide is also partly rooted in a disagreement over whether cryptocurrency is essentially a technology of resistance that derives value from being impervious to government interference and control, or whether it’s a tool for transforming society from within, in which case government regulation won’t sink the entire enterprise. A careful look at the debate that started with May and Salin in the 1980s helps us understand the best arguments of both sides.

BlackNet: ‘A Technological Means of Undermining all Governments’

In 1987, before the launch of the World Wide Web, May and Salin were part of a small community of West Coast science fiction–obsessed technologists mulling the implications of a decentralized, global information network running on personal computers. It was clear to May and Salin that the internet would remake the world, but they disagreed on what kind of software would serve as the linchpin.

Salin saw technology as a way to gradually drive down the transaction costs that impede human activity, making it feasible to interact in ways that would otherwise be prohibitively expensive. “I’m interested in how to lower costs,” Salin told Reason in 1984. “The Austrian [School of Economics] insight is that any industry run as a planned economy for any time should be fertile ground for an entrepreneur.”

In 1986, he started the American Information Exchange, or AMIX, one of the first e-commerce startups. Salin, whose intellectual hero was the Austrian economist Friedrich Hayek, envisioned AMIX as a global marketplace for the buying and selling of local expertise that would enhance human cooperation and gradually replace central planning.

In a 1991 essay, Salin envisioned a “fluid, transaction-oriented market system, with two-way feedback” that could result in “crowding out monolithic, mostly government bureaucracies.” The same language could be applied to many projects in the modern cryptocurrency space. Facebook’s Libra, for example, promises to use blockchain technology to move money around the world in a manner that’s “as easy and cost-effective” as “sending a message or sharing a photo.” The project’s backers maintain that enabling “frictionless payments” for the 1.7 billion people around the world without access to banking will do wonders for alleviating poverty. Those frictions are mostly created by government regulation; what’s implicit in Facebook’s pitch is that those rules will be gradually crowded out, though not overthrown.

After being introduced to Salin by his friend Chip Morningstar, a computer scientist, in December 1987, May drove out to Redwood City, California to meet Salin and hear his pitch for AMIX. He grasped the idea immediately, but it bored him. “People aren’t going to be selling meaningless stuff, like surfboard recommendations,” May recalled telling Salin.

May didn’t think AMIX was a scam, like many modern cryptocurrency ventures that earn that descriptor shitcoin. But he was interested in upending society and didn’t see how AMIX would have much of an impact. 

May suggested to Salin that he reconceive of the project as an anonymous platform for selling company trade secrets, “such as plans for that B-1 Bomber or a process for a technology.” In a thought experiment, May later called his idea “BlackNet,” writing in a pretend advertisement for the service that it would turn “nation-states, export laws, patent laws, national security considerations and the like” into “relics of the pre-cyberspace era.”

In a series of personal notes following his meeting with Salin, which May shared with Reason prior to his death in 2018, he mused that BlackNet was a “technological means of undermining all governments.” Though some might say that “‘it won’t be allowed to happen’ technology would ‘probably make it inevitable,'” he wrote.

May’s ideas about BlackNet evolved over the years. In 1986, a friend had given him a photocopy of Vernor Vinge’s 1981 novella True Names, in which hackers inhabit a virtual world called the “Other Plane” where the government can’t decipher their real identities. It had a big impact on May, who melded the “Other Plane” with “Galt’s Gulch” from Ayn Rand’s Atlas Shrugged, which was a safe haven for rational and productive people protected from government coercion and taxation by an invisible shield. Instead of the Colorado mountains, May’s cyberspace Galt’s Gulch would exist on the internet, with cryptography providing protective cover.

“Just as the technology of printing altered and reduced the power of medieval guilds and the social power structure,” May wrote in his 1988 manifesto, “so too will cryptologic methods fundamentally alter the nature of corporations and of government interference in economic transactions.”

Bitcoin isn’t BlackNet or a Galt’s Gulch in Cyberspace—it’s a decentralized form of non-governmental money. But it’s designed to be impervious to outside tampering so that the government can’t destroy it or undermine its value, and is roughly in keeping with May’s vision of an unstoppable technology. “The nature of sound money…lies precisely in the fact that no human is able to control it,” Ammous wrote in The Bitcoin Standard. Bitcoin “exist[s] orthogonally to the law; there is virtually nothing that any government authority can do to affect or alter [its] operation.”

The American Information Exchange: Exploiting the ‘Grey Areas’ 

The computer scientist E. Dean Tribble, who worked with Salin at AMIX, calls May “the shock jock” of the cypherpunk movement. “BlackNet is not a goal,” he says. “BlackNet is a negative consequence.”

Morningstar, the pioneering computer scientist who Salin hired to oversee the building of AMIX, recalls his boss’s skepticism of May’s ideas about escaping “the strictures and dysfunction of the mainstream-governed world.” The establishment “has had a long history of confronting new challenges and somehow having its way.”

Salin died of cancer in 1991 at age 41. His friend and colleague Mark S. Miller, a computer scientist, would flesh out the case that technology impacts society by gradually transforming it from within. Miller drew an analogy to a genetic takeover in biology, in which an alternate way of doing things slowly takes the place of an existing paradigm. 

Projects like AMIX, which was centrally controlled by a company, didn’t need to be completely “incorruptible” to have an impact because of all the grey areas where regulation doesn’t apply. Permissionless innovation pushes society in the direction of more freedom and decentralization. For example, “when people started doing credit card transactions over the internet, nobody knew if it was legal,” Miller tells Reason, “but they just started doing it.” 

Miller doesn’t consider Libra to be a worthless project despite Marcus’ commitment to cooperate with regulators. Once it starts operating, Miller says, there could still be experimentation happening “at the margins.” There could also be gateways to “trading between Libra and something permissionless,” which would help expand the cryptocurrency space.

Miller’s writings have often focused on how rules baked into computer code could replace aspects of the legal system. Along with K. Eric Drexler, the father of nanotechnology, he co-authored a series of papers applying economic insights to software design, which influenced the work of the computer scientist, legal scholar, and early cypherpunk Nick Szabo.

It was Szabo who coined the term “smart contracts“—self-executing arrangements written in code, and a common feature in today’s cryptocurrency projects. Szabo analogized his concept to a vending machine: A buyer drops in a coin and a machine provides the candy bar. “The fundamental logic here is automating ‘if-this-then-that’ on a self-executing basis with finality,” Szabo wrote. He also offered the example of a smart contract for auto repossession: “If the owner fails to make payments, the smart contract invokes the lien protocol, which returns control of the car keys to the bank.” 

A divide in the community over the definition of a smart contract also relates back to Salin’s debate with May. Do smart contracts have to be shielded from third-party interference to be worthy of the name? What if a government regulator has the power to stick a hand into the metaphorical vending machine to stop the candy bar from dropping into the slot? Does that undermine the purpose of smart contracts?

Miller and Morningstar consider AMIX to be “possibly the first smart-contracting system ever created” because it used software to mediate transactions between two parties. Deals on AMIX combined a written component, like a traditional contract, and a self-executing component: once a buyer and seller agreed on a price for a service, payment would be carried out by software. If there was a dispute, it would be resolved by humans.

AMIX software ran on a central server, meaning the company or a government regulator could theoretically interfere with the execution of a sale. According to Morningstar and Miller, the potential for interference doesn’t undermine the purpose of the smart contract.

“A smart contract that trusts a third party removes the killer feature of trustlessness,” wrote Jimmy Song, a bitcoin maximalist and influential figure in the space, in his 2018 essay, “The Truth About Smart Contracts.” 

Song applies his critique to a popular crypto business model, which Miller has also written about: using smart contracts to trade physical assets, such as land. Countries like Sweden and Georgia have explored operating a land registry that uses blockchains and smart contracts. Szabo explored this idea in a 1998 paper that predated blockchains and bitcoin titled “Secure Property Titles with Owner Authority.“

Physical assets are traded with smart contracts through what’s called tokenization. A property is assigned a digital tag with a corresponding private key. A seller uses that key to transfer ownership to the buyer, much like a bitcoin transaction. The record of ownership is encoded into a blockchain, which is a type of shared public database, so all parties know that it hasn’t been corrupted.

“There is an intractable problem in linking a digital to a physical asset whether it be fruit, cars or houses,” Song wrote. It “suffers from the same trust problem as normal contracts” because “physical assets are regulated by the jurisdiction you happen to be in.”

So if a judge refuses to honor that tokenized transaction, or a conqueror shows up at the door with an army, the smart contract will have accomplished nothing. “Ownership of the token cannot have dependencies outside of the smart contracting platform,” wrote Song, who sees smart contracts as useful only in systems like bitcoin, where the digital token itself holds value.  

Miller offered a rebuttal to this argument in a lecture titled, “Computer Security as the Future of Law” in 1997, predating Song’s article by 21 years. He laid out a vision for a gradual takeover of the existing law by smart contracts. We live in a world where different systems of rules are layered on top of each other, he explained. When Bobby Fischer and Boris Spassky played chess, they had to abide by the rules of the board, dictating, for example, that bishops can only move diagonally. They were simultaneously governed by another set of rules because the two men were “biological creatures…embedded in physics.” A Macintosh operating system is another example of a system that imposes a set of rules spelled out in software embedded in another set of rules—i.e., legal strictures, physics, and biology.

The rules on these different layers impact each other. For example, the physical world and the legal world have distinct sets of rules, but in legal disputes “physical possession has extraordinary influence in the actual outcome of the dispute, even if abstractly the law would have it otherwise.” If an object that belongs to you is in another person’s house, taking them to court to get possession of that object is rarely worth the hassle.

AMIX integrated computer-mediated contracts and human negotiated contracts. It’s true that humans, including government regulators, could override a transaction on AMIX, but for practical reasons that was unlikely to occur very often. Therefore, smart contracts on AMIX would have fulfilled their purpose in the vast majority of cases by reducing transaction costs with computer-mediated contracting.

Miller elaborated on this idea in a discussion of land registries in “The Digital Path: Smart Contracts and the Third World,” a 2003 paper that he co-wrote with Marc Stiegler. It acknowledges that a smart contracting system, “unlike government-based title transfer,” won’t be “backed by a coercive enforcement apparatus,” but the authors proposed various add ons to make it more likely that participants will “treat these titles as legitimate claims,” including a community rating system, and video contracting—an idea first proposed by Szabo—in which a conversation is recorded testifying to the validity of the arrangement in question. 

These tools don’t guarantee that governments will honor and enforce smart contracts, but there’s also a high cost to ignoring them. Szabo summed up this idea best in his 1998 paper: “While thugs can still take physical property by force, the continued existence of correct ownership records will remain a thorn in the side of usurping claimants.” 

Miller, Morningtar, and Tribble, who were involved with AMIX in the 1980s, have come together once again to try and make good on Salin’s vision. Miller and Tribble co-founded a startup called Agoric, which seeks to build a secure smart-contracting system that could serve as the backbone of a more decentralized internet, luring some high-level computer scientists away from comfortable jobs at the biggest software companies in Silicon Valley.

May passed away suddenly in 2018 at age 66. In the months leading up to his death, he was feeling disgusted with the proliferation of cryptocurrency conferences and regulated blockchain ventures. “I think Satoshi would barf,” he told CoinDesk. “Attempts to be ‘regulatory-friendly’ will likely kill the main uses for cryptocurrencies, which are NOT just ‘another form of PayPal or Visa.'” 

In May’s view, society still faced a “fork in the road…freedom vs. permissioned and centralized systems.” There are no grey areas.

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Upcoming Virtual Harvard Kennedy School of Government Event on My Book “Free to Move: Foot Voting, Migration, and Political Freedom”

Free to Move—Final Cover

On October 22, 4-5:30 PM eastern time, the Harvard Kennedy School of Government will be hosting me for a virtual talk about my new book Free to Move: Foot Voting, Migration, and Political Freedom. The event is free and open to the public. You don’t have to have any Harvard connection to participate. Anyone interested can register here.

In addition to my talk, there will be commentary by Harvard economics Professor Edward Glaeser, one of the world’s leading experts on urban development and interjurisdictional mobility. It is an honor to take part in this event with him!

This presentation is co-sponsored by the Taubman Center for State and Local Government and the Rappaport Institute for Greater Boston.

The Introduction to my book, which provides an overview of the rest, is available for free download here. I have pledged to donate 50% of all royalties from the book to charities supporting refugees.

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