Transcripts For CSPAN2 The Permission Society 20161226

Federalist society were hosting todays forum. I want to thank the Federalist Society, dean righter and julie nix who are with us today, for their assistance in organizing this forum. I also want to welcome those who are seeing us through cspan and our Live Streaming audience as well. Were here to discuss an important new, an important subject, the Permission Society, the title of a new book from encounter books by the Goldwater Institutes tim sandefur. Subtitled, how the ruling class turns our freedoms into privileges and what we can do about it. This book documents the many ways, especially since the progressive era, that the presumption of liberty, the freedom at the heart of our founding principles and documents, has been extinguished in favor after presumption for government, with individuals having to obtain permission from government officials before being able to act. Property owners have long experienced this reversal of course. Today they often find before they can make any changes in their property they have to obtain a range of permits from the local zoning board to all the way up to the Environmental Protection agency and the u. S. Army corps of engineers, resulting often in extremely huge expenses and lengthy delays. But it isnt the use of property alone that the modern Permission Society restricts. It is speech, starting and running a business and so much more. All of which tim sandefur covers in this important new book. Our forum today will discuss this issue in some detail, both pro and con. I will introduce each of our speakers before he speaks, starting with tim, who will talk for about 20 to 25 minutes about the book. Well then have comments from our two other guests for 10 to 15 minutes each. And then brief comment from tim before we open it up to the q a from you in the audience and for lunch upstairs in the george m. Yeager Conference Center. Tim sandefur is Vice President for litigation at the Goldwater Institute in phoenix, arizona. As i write in the blurb for this new book, with this, his fourth magnificent book plus countless articles, speeches and legal briefs, tim sandefur has emerged as one of americas most important upandcoming political and legal theorists. A graduate of hillsdale college, Chapman University school of law, tim served for 15 years as a litigator at the Pacific Legal foundation before joining gold water. At plf he won important victories for economic liberty and several states, some of which he will discuss today. He is the author of four books, cornerstone of liberty, Property Rights in 21st century america, coauthored with his lovely wife christina, which came out earlier this year. The right to earn a living, which came out in 2010. The conscience of the constitution, in 2014. And now the Permission Society. Plus some 45 scholarly articles on subjects ranging from Eminent Domain and economic liberty, to antitrust, copyright, slavery and the civil war and political issues in shakespeare, ancient greek drama and star trek with, a range of interests, those accomplishments at such an early age. Were proud to have tim as adjunct scholar here at cato. Please welcome tim sandefur. [applause] thank you very much. Its an honor to be here and kind of hard to see but i see some old friends out there, including alan gura one of the inspirations for this book. What came to mind in conversations that alan and some other friend and i were having a passage from James Madisons 1792 essay charters. Madison starts out by saying in europe, charters of liberty have been granted by power. America has set the example of charters of power granted by liberty. This revolution in the practice of the world may with an honest praise be pronounced the most triumphant epic in its history. What madison meant was, that unlike the old documents of the english civil war, of the glorious revolution, those documents all gave freedoms to the people or purported to where as the American Revolution was founded on the opposite principle, that people are basically free and create the government through the their own agreements through the constitutions and so forth. Contrast this, for instance, contrast the opening of the declaration or the constitution with the language of the magna carta. We celebrated the anniversary of magna carta last year, 800th anniversary of magna carter, it is great document and all that, sure but when you actually read the document, it is surprising the language it uses. John by the grace of god, king of england to his loyal subjects greeting. To all free men of our kingdom we have granted all the liberties written out below to have and to keep for them and their heirs from us and our heirs. So the magna carta is very clear. I, the king, am giving you the following freedoms. It lists out those freedoms. That is the opposite of the principles of the declaration or constitution start out by saying all men are created equal. All people are basically free. They then create the government by agreement and give it certain powers most listed in article i, section 8 of the constitution. What the Founding Fathers they did, they reversed the older conception of freedom and did so on the basis of a basic principle enunciated by john locke. This is important, because we philosophize what is freedom . Is a person too poor to afford things really free, that sort of argument. I think those are distractions from what freedom really is and that is freedom means not having to ask for permission. John locke says, freedom is not told a liberty for every man to do as he does, who could be free when every other mans humor might dom near over him, lists his persons property within allowance under those laws which he is is and not to be subject to the arbitrary will of another but to freely follow his own. Not to have to ask permission from someone before using your property or whatever. Subject to the same laws that apply to everyone else. Now this was a revolutionary idea in the 1770s because the older model of freedom was this magna carta principle we tend to call this principle in the law, prior restraint. Prior restraint was the old rule with it came to freedom of press. That is where we normally hear the term when were talking about freedom of press. Prior restraint was the rule that said you had to get the governments permission before you could publish something and in the 17th century this was overturned and became the pride of british subjects that no prior restraint could be placed on a person before that person published his sentiments or gave a speech. He might be punished afterwards if he committed slander or threats but couldnt be required to ask permission before uttering his views but the same principle applies across the board. Religion in particular is the model that i use in the book. Under the british system, the british, like if you read William Blackstone and his commentaries in the 1760s, blackstone is very broad that british subjects enjoyed more religious toleration than people of any other nation. He is very proud of this and rightly so he is right. He says in the commentaries we even let catholics own property which was pretty liberal by the standards of that day, right . But the principle behind the british system was toleration. Once again the king was tolerating religious difference, giving religious liberty about, not liberty but toleration to the people. The founders repudiated this concept. Thomas payne said, toleration is not the opposite of intoleration but the counterfeit of it. Both are despotisms. One assumeses to itself the right of with holding the liberty of conscience and other of granting it. One is the pope armed with fire and stake, the other is a pope selling or granting indulgences. Jefferson says the same thing in virginia when he is talking about the proposal what became the virginia statute for religious freedom. Our rulers can only have authority over us as we submitted to them. Rights of conscience which never submitted. Were answerable for them to god but legitimate powers of government extend only to such acts are injurious to others but he does mean no injury for my neighbor to say there are no gods or 20 gods. It neither picks my pocket or breaking my leg. My favorite jefferson quote, neither picks my pocket or breaks my leg so it is none of the governments business. In his old age, James Madison was very proud, he wrote a little memoir he told this story when he was young in his 20s, he served on the committee that drafted the virginia declaration of rights. The primary figure on the committee was george mason, respected elder statesman of virginia politics and mason in his original draft all people would enjoy total toleration of religion. Madison, this then, basically unknown young up start, this intern, jumps up and says, no, no, you cant use the word toleration, you must use the word liberty. He persuaded mason to replace the word. He was very proud of that what the founders did here and elsewhere the presumption were basically free, not that were unfree until the government gives it to us. That is reflected in the text of the constitution which speaks of the securing the blessings of liberty that says our rights shall not be abridged. No law respecting the freedom of speech shall be passed. Right of people to do soandso shall not be infringed. The ninth amendment makes clear that the list of rights is not exclusive. Just because it is not listed in the rights, just because the constitution doesnt say you have the right to run barefoot through sprinklers on hot summer day doesnt mean you dont have that right. That is what ninth amendment says. It says government is not list your freedoms. It is listing a few of your freedoms in the bill of rights. How have we come to the point today you basically need to get governments permission for a wide variety of thanks you spend your hailly life doing . You need a permit to build a house, own a gun, get a job, buy things sometimes, run businesses, pay your employees, even freedom of speech now often comes with some sort of permit requirement. We have these colleges and political conventions setting up free speech zones, which are basically cages where youre allowed to express your opinion inside of the cage. As popular saying has it, i always thought america was a free speech zone. This is, it is also a subtle sort of thing. You find it in places where you wouldnt expect it. An example i use it in the book is Architectural Design review. Architectural Design Review occurs when an architect, has planned out maybe a single building or subdivision and goes before the city zoning board and city zoning board officials look at it complies with all the safety codes i just dont like the way it look. I would prefer it be colonial or neocolonial instead of whatever style its designed in, purely or aesthetic reasons. I hold that architecture is a form of sculpture. It is artictic expression should be protected by the First Amendment as form of free speech same way other times of sculptures are protected as free speech. No one can walk through a Frank Lloyd Wright building or im from pasadena a green and green masterpiece like the blacker house in pasadena without experiencing the aesthetic feelings that great artists seek to convoy. It is a form of free speech. Architectural Design Review sub students the governments es at the timic preferences for the government owes own. Fortunately no architect has been found with the guts to litigate that point. What is happening in these and other areas were replacing free society with Permission Society. A society youre not free unless the government gives you permission. Now the model that lawyers use for this that i describe in the book is difference between the nuisance system and the permit system. The nuisance system is built on the ancient classical legal principle, something, something, something, something, i dont know latin. What that means is, you have the right to use your property as you want so long as you harm no other person. As opposed to permit system which says you are not allowed to do this thing unless the government allows you. Now there are problems with the nuisance system. One of the problems is, it is basically reactive. It allows people to commit harms and then you can sue them or get an injunction against them, more or less after they committed the harm or right immediately before theyre going to commit the harm. The permit system proposes to be proactive. It says, no, no, you have to prove to us that you are qualified, honest and so forth before you act. The problem is, that there are many more problems with the permit system than with the nuisance system. For example, rentseeking, the phenomenon if the government can hand out benefits to people it becomes best interest to spend time and money to get government 20 do that in favor. The knowledge problem, identified by frederick hayak, no government can no possibly all the information necessary to run an entire economy. The classic example by leonard reed is the pencil. Nobody in the world knows how to build a pencil because to build a pencil you need graphite and wood, to get the wood you have to have lumber. To get lumber you have to have lumberjacks. To have lumberjacks you have to feed them which means you have to have farms a few steps along the reasoning and entire worlds economy is spent building a single pencil. The way it works by decentralized process of Decision Making that avoids the knowledge problem. The permit system cause as knowledge problem. To take example in kentucky, i litigate ad case in kentucky in defense of a entrepreneur wanted to start moving company. In kentucky as most states youre not allowed to start a moving company until you first get permission from all the existing moving companies within the state. Not making this up. This is the law in half the states and most major metropolitan areas. Called a certificate of public convenience and necessity law. You have to prove to government bureaucrats there is need for new moving company in kentucky before they give awe permit. Any existing moving company can object there is no need for more competition against them. Guess what . They often say that, right . We took this case to court. In the deposition i asked how do you, how do you bureaucrats decide whether theres a public need or even worse a future public need for a moving company somewhere down the line . And the bureaucrat answering the question said, there are no objective criteria. What . There you go. That is another problem with the permit system, is the vagueness of criteria that usually operate. For instance in the bun permit area you cant have a gun unless there is good cause. What does booed cause mean . Whatever the bureaucrats say it means. Even deep every than deeper than this there is more problems with the permit society. It violates the permission of equality. An inferior has to act permission of a superior, right . Slaves have to ask permission. Children have to ask permission. Until recently women recently had to ask permission to own property, get jobs, sign contracts and so forth. Right . So be, to have to ask permission from someone else typically means flattering or appeasing that person rather than treating them as equal citizens or even as Government Employees who stand beneath the citizens in that sense. It substitutes political for economic power. The permit system, this rentseeking phenomena creates a class of people who have access to the government decisionmakers and can use that power to benefit themselves. The soviet union called this the nomenclature system. There is always a class of people whose brother served on board or brother served on committee, for exchange of a Little Something might get you some time in front of the contractca. That is another problem with the permit system. It allows those in power to demand something in exchange for a permit. In the land use context we see this, where you apply for a permit to build something. The government comes back demands property or even cash from you in exchange for a permit. The Supreme Court said this is unconstitutional in many cases but local land use officials continue to do it nevertheless. I did a case in san diego area several years ago where my client was forced to give up his right to vote in exchange for a building permit. But the most offensive part of the permission system across the board is how it deters innovation. It restricts opportunity simply by existing. Think of this, of an entrepreneur doesnt have a lot of capital, comes up with a great new idea, new innovation, he thinks wow, this could really help people and they would be willing to pay for it. I could make a lot of money on this. He thinks of all the permits he will have to get. All the hearings he will have to go to. Maybe special lobbying to get a special law parsed to exempt him from existing bureaucratic regime and so forth. He says to himself, you know, this is too much trouble. We can never assess that cost because it vaporizes instantly. It never comes into existence. How much middle east occurred, how many jobs might he have created and how much wealth would he have created and how many innovations come about because of his innovation that vapor rised. As the great poet, John Greenleaf whittier, of all saddest words that come tongue or pen, the saddest are these, what might have opinion. We never know what might have been because of government apparatus barring innovation unless you prove to the government there needs to be a new business in that area. Ive been libertarian since i was in high school. I remember how often i would Say Something about freedom is good. Answer is yes but you have to have responsibility. This is often of the response i get when i talk about the problems of permission system. The permission system is supposed to impose responsibility of the problem that responsibility can take two different meanings. It can either mean dont hurt people, which is, sic something, something, something, that is the nuisance principle. Or it can mean, do what we say. That is the permit system. I think the nuisance system is by and large the better way to approach social problems. That means presuming people free unless theyre going to harm some other person. Unfortunately i believe were sliding more and more into the society presumes you unfree unless you get the governments permission. As we move toward the per milks society, were moving away from principles of freedom upon which our constitution is based. In 1946 at the nuremberg trials, Justice Robert jackson, serving as prosecutor of the nazi war criminals was looking for just the right way to describe the freedom that hoped would rise from the ashes of europe and he found those words in a poem by rudyard kipling. All we have of freedom, all we use or know, this our fathers bought for us long and long ago. Ancient rite unnoticed as the breath we draw, leave to live by no mans leave underneath the law. Leave to live by no mans leave is the essence of freedom of the more were required to ask someone for permission the more the government presumes that we are not free unless the government says we are, the less freedom that we have. And thats, there is no reason for it. It is offensive and unjustified. Because in fact, we, accept the idea that people are basically free through most of their lives. In fact most of the Dangerous Things that we do in our lives, driving, or eating, we dont have to get the governments permission before we do those things. Why cant we trust our fellow citizens with freedom . And if we cant trust them with freedom, whom can we trust with ours. Thank you. [applause] well, thank you very much, tim. Once again we are here to mark the publication of tims new book, the Permission Society. Which those in the awed expense can purchase outside along with tims other books. Please feel free to do so. He would be glad to sign it for you. While you were talking, tim, my colleague elliot shapiro, sent email, just breaking news, your circuit, judge williams, has struck massive unchecked power of the Consumer Bureau director. So, keep talking, tim. [laughter]. All right, now, to offer a somewhat different perspective perhaps, were going to hear from an old friend of the Cato Institute. He has spoken here more than once, professor alan b. Morrison, who is the Lerner Family associate skeen for Public Interest and Public Service at George Washington University School of law. For most of his career dean morrison worked for the Public Citizen Litigation Group which he cofounded with ralph nader in 1972. Directed for over 25 years. His work involved law reform litigation in various areas including open government, opening up the Legal Profession, suing agencies that failed to comply with the law, enforcing principles of separations of powers, protecting rights of consumers and protecting unrepresented class members in class action settlements. He has argued 20 cases in the Supreme Court including victories in goldfarb very Virginia State bar, holding lawyers subject to antitrust laws for using minimum fee schedules. Virginia state board of pharmacy for virginia citizens consumer council, making commercial speech subject to the First Amendment fortunately. And inv v. Chata very famous case that struck down over 200 federal laws containing legislative veto as violation of separation of powers. The dean morrison currently teaches civil procedure and constitutional law and previously taught at harvard. Nyu, stanford, hawaii, and American University law schools. He is a member of the American Academy of appellate lawyers and was his president for 1999 and 2000. Graduate of Yale University and harvard law school. Served as commissioned officer in the u. S. Navy and was assistant u. S. Attorney in new york. Please welcome, alan morrison. [applause] thank you, roger. The thesis of this new book is that our society is inverted and that we need permission instead of having the freedom to do what we want to do. No doubt in my mind that permission is it needed for many things of society and my ring of the book and so society it has it inverted nowhere near the ratio the books title and the book would suggest in terms of permission versus freedom. And, as i thought about the few stories in the book, some which are very interesting and i agree with, i remember that the old saying that the plural of anecdote is not data and so i thought i would start by a story of my own about the real Permission Society and it occurred when i was a, at the end of my first year in college i was on an naval rotc cruise. I love the word cruise but it is what they called it. It was very hot and it was lunchtime and went down below and got ice cream and brought it up on deck. A person who outranked which basically was everybody, came up to me and said, what are you doing with that ice cream . I said im eating it. Who told you could eat the ice cream hire . Nobody told me i couldnt. He said did anybody tell you could . That is what i knew difference being in the navy and being a civilian. Being in the navy i couldnt do anything unless somebody told me when i could. That would be the true Permission Society as i envision it. But i dont find that so be the Permission Society in the world at large today. But let me start with a couple of areas of agreement both with respect to licensing and the certificate of necessity. The first time i ever had a matter with the Cato Institute was back when the Cato Institute was in a small townhouse on first street northeast and i came over to talk to them about some cases i had involving the unnor rised practice of law. At the time i was representing a legal secretary who was being prosecuted by the Florida State bar for typing up divorce papers for people who couldnt afford to have lawyers and we had some challenges to that and other similar activities and cato was very much in line with us then. I had a lot of cases involving the Legal Profession as you heard. Many of them successful but unfortunately in the area of unthorpe rised practice of law i have been largely unsuccessful. I have thought to try to bring cases in that area, raising a First Amendment challenge that after all, rosemary fuhrman, my client was speaking and writing. That was First Amendment protected activity but always thought that was not a winning argument. That it was conduct that people were trying to regulate. I didnt believe and i still do not believe that all licensing of lawyers is a bad idea. It is just that they have gone much too far in the areas which only lawyers are allowed to provide the necessary services. The book talks about other licensing, among them the tour guides have to be licensed. And its one thing to have them licensed in the sense of having a bond or being able to identify them or find out whether they have criminal activities but here in the district of columbia i think it was your office or maybe somebody else similar brought a case involving tour guides because they had to take an examination of the 100 most important monuments in the city and be able to correctly identify them les people would be misled. The case got to the d. C. Circuit and eventually got settled by the district wisely repealing that requirement but the tour guide rules still apply in louisiana and other places. And while, could i envision some harm occurring from a misinformed tour guide . I suppose that i could. The question is, is it serious enough to do anything about it . The trouble is, how do we deal with the problem like that . The book proposes several tests, page 213 to suggest ways in which the licensing matters can be reduced. For example, there has to be a genuine need, clearly endangers the public, tough analysis before passing, what he would do about the current laws already on the books. The trouble with all those is, if you asked the legislators or the regulators, they would say theyre already complying with them. They dont contend, were not regulating anything frivolous. Were only doing really important things. The problem how do you get a handle on that . My own view is that the first payment is not the right way to go. There have to be better ways to approach that problem. I suppose that we could have a situation in which the federal trade commission could come in, given the authority to preempt state and local regulations. I doubt that would be a popular solution here in this building but you have to sometimes decide which is worse, licensing or not. And the same is true for the certificate of necessity. I personally encountered something the other day, we tried our gw to do a lot of pro bono projects for our students. One of the areas students are particularly interested in is helping veterans with their problems. Including their ability to get proper pensions, based on their disability and inability to perform any kind of work at all after coming back from war zones. The second area that we talk about in the book im fully supportive is a necessity. Id not heard about these moving Company Problems before. Certificates and necessity i heard about, in welcome for example, the ability of the hospital to open a new place in a town when they were seeking funds to do so before weather is necessary to do that with the expensive equipment. I have not heard about this before and i applaud the efforts to go after those. Im not sure the First Amendment the First Amendment is the right way. Im not sure if basic constitutional freedoms are substantive due process is the right way. Surely a Commerce Clause with the interstate moving companies be a fruitful ground for attack. I dont know how many of you have heard about the problems the tesla Automobile Company has had in trying to open up the americas. Tesla had an idea that they wanted to sell their cars directly to the rumors. A number of states including virginia and new jersey have lasting value may not sell cars unless you have a dealership interstate that provides full Services Strikes me as being a plain violation of a Commerce Clause that is plainly interferes with the interstate companies to do business in the state. It does not help consumers at all. Theres nothing wrong with the market for automobiles in this regard that cant be cured by allowing tesla to come in. It does business and provides proper service. People will know about it. If it doesnt come it doesnt commit people it doesnt come at people and that it also appeared tesla worker stays for a while and i saw the other day they filed a lawsuit on Commerce Clause grounds challenging these laws as they properly should. When i saw the title ii this book i got a b. This is going to be about the fda and epa but there is surprisingly little limit. I think that is a recognition that in our society the nuisance theory only works so far, that we need some kind of protection in cases. I dont understand. The problem is one of line trying in how we decided who is going to decide which areas need protection and which of them dont. The more i thought about it, the more i thought the problem was not in the generality, but in way into specifics. Take the precautionary principle which the book talks about. Thats a general notion that if we dont know about something new coming on the market and it has a potential for being dangerous, pesticides, for example, or new drugs, all of which can order it should do their work must have side effects. The question is are they harmful side effects and is the drug do with it is intended to do. The precautionary principle says wait a second, if we are not sure we should perhaps not allow something to go on the market or put it on with conditions including post marketing surveillance. And its not that everybody is concerned about this thinks we should either take everything off or put it on without conditions. Their interim conditions and not those interim conditions to vote. I really like the quote and have used it several times since then from st. Thomas aquinas reported to have said if its the captain of the vessel, we are solely concerned about the vessel safety. He would never leave the forest spirit thats an interesting way of thinking about it. We dont know what i did not happen if allow to see. On the other hand, sometimes being important Decision Maker if we have a hurricane having your vessel smashed against these symptoms its better to take a little rest and go out in the sea. As i was wondering about that profession the society, i thought of a recent phenomenon, Driverless Cars. Should they have to get permit in order to be out on the road . Are we willing to allow the law of nuisance to decide whether all of us are going to be subject to having Driverless Cars or should there be some kind of restrictions, permissions, authorizations, checks in advance and if so, who should decide in what should they be . How about speed limits . Is that a provision that we should all drive as fast as we want. Or what do we do about uber and eric b. And b. Should they be regulated at all . And if so, in what regard do we worry about the interests of the workers who were subject to the conditions or should we say they are all right. You dont have to worry about them. They are different from employees for whom had to worry about minimum wage. In any event, what we do about the customers . There is a piece in the post a couple weeks ago about racial discrimination. If they are completely unregulated, what can we do about that as well . The book contains an early references and praise for the decision leaving aside the specifics of how gunmakers in that community got together and pass the love only applied for bankers is a bigger question is this appropriate for a federal court to essentially review because they dont like the economic regulation that has been passed by our legislators are regulators. My own view is that the harms that come from excessive economic regulation are relatively modest and that the danger of having the court step in and review all economic and other regulation are substantive due process violation is a greater harm. That is the idea that it may not be bad for everybody in the room. The last point i want to make as i was rather surprised to the enemy was in this book. The enemy is the ruling class which i translate to be elect dead and appointed officials. The question is are we better off or worse off with having democracy . Be our guide in these areas. It is true of course in many cases we are beset with regulatory and legislative capture in the book is clear that doesnt occur in all situations. The question is how do we try to deal with them and how do we try to draw a better line . The book suggest that litigation may be useful not simply as an opportunity to turn back a bad lot, but as a means of exposing the silliness behind the laws that we have. Its a wonderful opportunity when the government has to make to your complaint. They have to put on a live witness under a and you get many answers essentially a defense to go. All of this is part of a broader Education Program is whether litigation, which is that much of my life doing is actually going to win some cases. But it also serves function of reminding society that we all are entitled to rational responses to the questions we asked. Thank you very much. [applause] well, thank you. Weve gone nearly three quarters of an hour before lackner came up, which is a long time in this auditorium we are now going to your finally from judge Stephen Williams who was appointed to the United States court of appeals for the d. C. Circuit in june 1986 and took seniors ed s. In september 2001. Like dean morrison and hes a graduate of your college and the harvard law school. He was engaged in private practice from 19621966 and became an assistant u. S. Attorney for the Southern District of new york in 1866. From 1969 until his appointment on the bench, judge williams talked at the university of Colorado School of law. During this time he served as visiting professor of law at ucla from the university of Chicago Law School and Southern Methodist university. And he was a consultant to the administrative conference of the United States and the federal trade commission. He is a noted expert on oil and gas law, coauthor of cases on oil and gas law, which appeared in the sixth edition of 1992. His most recent work is entitled liberal reform in an illiberal regime made tina 61915, the creation of private property in russia, a book we featured at the Cato Institute when it came out in a book that has been described by former acting Prime Minister of russia igor tigar is absolutely lended. Please welcome the absolutely splendid judge Stephen Williams. Id really rather be here. Go ahead. Maybe theres one person deprived of an opportunity to see me. I thought the book was generally very good assessment of regulation. But i dont think its really consistent with the norms of judicial picks. For me they try to do an equivalent of what allen dead were a rebuttal of what allen said. We are not supposed to be about the specific policy issues that are likely to come up in front of us as so many of these potentially could. But i do think what is useful for me to focus on is the fundamental question of how a permit system actually differs from regulatory systems in which the government acts after the citizen has acted. Tim used the metaphor these systems. But ill just call it nonpermit systems, which cover a lot. At the very end of the book, tim has a very brief section which he enumerates what he thinks are the distinctive drawbacks to a permit system. I will argue except for one, a very important one i hate to say, except for one, they are ubiquitous across regulatory systems. First, the president of permit systems is also president even in the form of afterthefact regulation known as antitrust law, which i think is the form of regulation probably most accepted by adherents of freemarket. Not that your finally accept it, but nonetheless most accepted. And as you know, for a long time, not so much under current doctrine, but for a but for a long time, antitrust law was devised a witch people could take up their competitors ironically. In any event it works that way. Tim identifies the knowledge problem, which to him is an implicit claim the government has more better knowledge than private citizens. First i would say basically theres a lot of regulation that really doesnt depend on that at all. Regulation depending upon either the transaction costs are too high for an optimal solution to be worked out by normal contract and property right or asymmetries of information. The drug issue for example being a clear case for those. In any event, it is equally present in nonpermit systems. Both systems are vague. I would argue that the vagueness of a permit system despite the less dangerous than the vagueness of a nonpermit system and with the nonpermit system for government crashes down on you after you have committed resources, probably since you to jail because he could a particular regulation. Fourth, demanding payoffs. Yes, of course a history of their certificates of public convenience which is a wonderful chapter recounts many episodes of that, but they seem to function in nonpermit systems. The example that comes to my mind most clearly is the situation where the government believes that the bank has committed fraud and starts to investigate and the very fact that the investigation clouds the banks prospects, an indictment would be fatal, let alone a conviction. The recent Deutsche Bank episode suggests that even rumors of an agreement on a settlement can be merely fatal to a bank. So again, they need for payoffs, which result from the department of justice criminal pursuit is present across the two systems. Now i come to the one that i think is strongest and i will return to it again. But because the double layer of to prevent. He points out that with his idiosyncrasies without a permit or in defiance of limit of a permit, he is going to lose even if the denial of the permit or its limitations were illegal. That certainly is a double effect. Associated with that is the fact that the permit system delay operates against the system in favor of the government. The citizen has to wait until the government had finally pulled together to act. I want to focus on that more later. Let me just quickly take the other two objections that he poses stifling innovation, surely in the case of afterthefact regulation. Again, antitrust is a good example. Finally, the government is superior. While company gas. Other systems involved a government exercising its coercive power, monopoly on the use of force to propel citizens to stop doing something that you pay a fine for having done it. So i want to come back to the issue of essentially that delay coming out the expense of the citizen after. The key problem bear is that it means that the adverse effects of the regulatory system tend to be hidden. So compare a system regulation of crackers under wage you have to get a permit to go into the business or you can be fined or imprisoned by the government if you entered the business and the government signs that your activities havent had a first effect on the Economic Prosperity of the preexisting truckers to compete. And not jim someone who thinks he liked to go in a truck in under a second set of the government is going to pop down menu afterwards. This track starts providing services. Maybe he start to get pretty good at it, pretty successful. You get the second trial, or tribe, has by this time quite a few customers. Maybe a little reputation. At that point, the preexisting competitors asked the Government Agency from the u. K. To move against the sky. He is clearly violating the norm, which is true. They go after him. In that context, their ability to get the result they like her than the permit system. By this time people know about it. If hes done even a decent job and if he hasnt hes probably going the business will die on its own. If hes done a decent job, people will be upset. They should be either coke News Coverage of the government attacking this person. And he has i would say a far better chance of escaping the regulatory memo says dan who was under the permit system. Alan brought up bluebird on tread bluebird. Entirely speculative, but uber by the time it became controversial had a lot of customers who werent many of them really quite they were members of the elite to put it simply. And i think that has made it harder. It means that the Companies Whose entitlements are jeopardized the uber in our name out barring a much bigger system than regulating services at the outset. The concept of prior restraint on the spread free speech and i think you have the same situation. If a person can publish first and the premise can be that there is a mana, free speech in this hypothetical society, is published hours. Then when the government goes after you, quite a few people, presumably will know what it is yours hanging and 95 of the time, government going after you on the grounds of what you said is a little extraordinarily silly whereas they simply cut it off in a censorship program. Nobody essentially would know about it. The mana, free speech is important. I dont think it would make any difference whether the permit system was used coming after you with exactly the same. But thats because there is no way in which publications they didnt represent the party line could actually go ahead. Basically the proposition is one of strangling things in their cradle. Tim spoke to mind a favorite poem of mine, all about people whose potential is never realized. Its a nice solution to some glorious melting him a rest. It goes on and on in that they. And a trucker may not seem equivalent. But i think when we recognize the creativity that is associated with entrepreneurship in general, you see that not such is really manifested that becomes important where permit system misuse. We show that one thing, though. It seems to me clear that in certain cases they will vastly prefer a permit system. Suppose you are about to set up a line of production of cars that you now have to meet the criteria for emissions. You want to know before you spend 200 million under production line that youre not going to have trouble on the technology you use in the car you produce on this production line. So that is at least in instead where a permit system is to the advantage of the permittee. I have some other thoughts they get a chance in the discussions. Well, i want to begin by saying how happy i am a member of os. I account for and we should make it a rule that cato should ensure that these three posts are quoted in every presentation. I only have a brief period, so i want to say that think a lot of these comments are so intelligent and deep that they would require a much more thorough discussion which is why i wrote a whole book and response and actually other books. I notice. I noticed some of the record is. The enemy is democracy. I dont think that is quite accurate, but to discuss my views on that should consult my lab book, constitutions of the constitution that discusses the democracy. Administrative agencies that typically enforce permit requirements are the least democratic thing you can imagine. Most of the laws under which you live your life are imposed not by elected officials but by unelected hired eurocrats an administrative ease that cannot be fired because they are covered members. The basic thesis of my book is the idea of prior restraint should apply to all permit since regardless of subject. The Supreme Court is set in the 50s theres basically three roles for when prior restraint is acceptable. There must be a time of it in which the permit would be granted or denied. There must be clear unambiguous criteria. Not big spenders like good cause and a right to read judicial review if youre wrongly denied the permit. Not some sort of fake review in the mistreated. With the prosecutor is paying the judge. That argument is basically this principle should be applied across the board to all kinds of permit and licensing requirements. With regard to licensing, i addressed this in my 2010 book and i explain i agree that the First Amendment is not always the best route to go that way. The right route is substantive due process. Unfortunately, that doctrine which is the oldest and most important of all constitutional protections is largely undermined that both left and right. Fortunately, with the Goldwater Institute have a solution. One of them is their right to argue that an act which is legislation that would requires a court to impose a higher level of review than rational basis when it comes to legal challenges to restrictions on liberty. When i address the test set out to be applied to whether a permit requirement is valid or not, that gets a little bit bag. Under the rational basis, basically anything goes. The government wants to impose liberty and basically is free to do so up. The right to earn a living act when enacted would require courts to ensure economic liberty directly protect Public Safety and are now broader necessary. When it comes to the fda, our right to trial legislation is a First Step Towards rationalizing the currently a rational process of Drug Development and approval by the food and Drug Administration and takes as much as a decade and a billion dollars to approve medicines that save peoples lives. The right to earn a living act allows people terminally ill to use medicines approved for basic safety that are not yet fully approved for sale by the fda. As far as certificate of need laws, doesnt be the right to argue that the inactive file the problem. Keep in mind we are not talking about Interest Rate certificate of need laws. It is within the state. That the problem and that can only be addressed by legal reform and the 14th amendment that prohibits the government from arbitrarily denying people their economic liberty. I think judge williams has a good point that bradley the question between reactive and give them prior restraint versus punishment afterwards. It is true that you will encounter a lot of similar problems in punishment afterwards that he would encounter in prior restraints. That is also true is beach. Lawyers had a long debate since the constitution was written over how much further the First Amendment goes than the old rule against prior restraint. Erin agrees, ever accept the Supreme Court is part of the First Amendment. Prior restraints are never allowed. One thinks that the passage when the animals emerged to find no animal trade has been changed to no animal shall drink to excess. The prior restraints to excess. In any case, part of the debate between proand then react davis can you really punish a person after they speak . Amazingly, early federalists said yes. Its okay to punish people after they speak for the words that they either and courts have developed up terms that allow threats, but for the most part protect free speech. If you get the same vigilance were applied when it comes to economic liberty and the other issue i talk about, we would be imitators it than we are now in. I book doesnt try to to chart using line configures the solution to the problem because they do a great there are cases where it is appropriate, but they have to fall into those criteria. Specific timeline, clear criteria for the granting or denial before they can be even considered appropriate. Thank you very much. We look forward to your questions. [applause] thank you very much, tim. Do we have any short discussion here . Lets open it up to your questions. Please wait for a microphone to get to you. Identify yourself in any affiliation that you may have been sending one person on one aisle. Another person on another item so we can get in as many questions as possible. Please ask the question. Dont give a speech. Lets begin with this gentleman right here. High, michael, washington d. C. I work in the field of Mental Health and for the number of licenses to do that in the various local jurisdictions. One of the things involved in getting this license says are a number of prerequisites. It has been my belief for some time that the prerequisites were a discussion of the inability to accurately measure whether or not somebody should be allowed to practice the profession. I just wanted comment on that. I argued that the psychologist should be abolished acrosstheboard parapsychology is nothing more than talking. As the poster psychiatry which is prescribing the period psychology is a talking cure. It is no different than the discussion and the one between a tenant and his priests, between myself and my mother, between myself and my best friend. People talk about their problems. When you look at the statutes for the legal definition, you find these terms very broad. Helping people with their human problem. Does that satisfy the void against the criteria. The answer comes youre dealing with depressed people who might kill themselves if you give them bad advice. The same could also be said of conversations with my mother. Just kidding. Just kidding. Banister of conversations with your priest in someone. That is why these laws are riddled with discussions. Lawyers can practice psychology. Im a licensed attorney so i can practice psychology. I guarantee you i have no expertise in psychology. I think those kinds of rules should be completely abolished and not only is it that these standards reflect the ability to come up with a site standards, but the inability gives an opportunity for rent seeking by those who have licenses to prohibit competition against them and that is the real problem. [inaudible] i think in some cases it can be. Me see your hand to be continued. The next gentleman is right over here. Jewel, im an attorney at washington. Isnt it sufficient to say that you must have at least a masters degree or a phd . As a prerequisite that doesnt involve a lot of government regulation, but nevertheless protects the admitted mental problems that would be fair from being injured . And second, my understanding is that a number of days, psychologist of cotton or actively trying to get the right to prescribe medicine to patients just the way psychiatrists would. That begins to weaken the second part of your argument. At the profession is different, criteria should be different. I would favor some amos says you have to have a masters degree up or something more vague think you have to prove your skill. I guess its a question of how much are you willing to accept and define problems like discussion in the book which a columnist on the newspaper advice column this was a cicada for psychology without a license. Because this column ran in another state where he did have a license, he was prosecuted for this. It goes without saying that the licensing of advice columns if not compatible with the First Amendment. Americas first columnist is Benjamin Franklin who never went to college about who is called dr. Frank when he did not have a doctorate in the often made up the questions he answered in his newspaper. It wouldve been inconceivable that the First Amendment without the right the licensing requirement in that regard. The menacing rules are a form of permit required for possessing medicine. As a libertarian, i am fine with all of it being equal. If there is a restriction it is to be as unambiguous and is fairly enforced as possible. The kentucky doctor ultimately won his case in a decision. Advice column reminded me when i type special ethics at law schools used to use ann landers reiterates ice columns about giving michael at dice. Can i do this in such and such and she would give advice and i would ask my students, issued practicing law without a license and if so, what jurisdiction . The other thing i want to say if theres an interim position and that is a certificate that says if you have a certificate to say you are a psychologist and that has some projective criteria. If you dont have a certificate, you can practice anyway. Its sort of an indication you are more qualified than i would be. Im embarrassed to say i forgot to discuss that there are private Market Alternatives to government licensing and regulation that are almost invariably preferable. When i go to a restaurant, i dont look at the licensing history. I looked them up on yelp. I ask my friends who say dont go there i got the stomach flu and i dont go there. Thats the most people do. They provide a Rating System for drivers which is not provided in any effective way of fighting rages see except in competition now. There are alternatives available and keep in mind that the Supreme Court in the Playboy Enterprises case look to the availability of private Market Alternatives as part of its narrow tailoring analysis and part of the question of whether there were less restrictive means available. At this time to push that point. If theyre alternatives to government regulations, that this regulation is broader than necessary. Would it make a difference with the psychologist youve just spoken to the advice were given free rather than commercially . I did make a difference in the unauthorized practice boggles. Quite clear doesnt whether you give up or you rise to the same is true in medicine subject of course to your mothers exception for telling you to take some aspirin and go to bed. If you are a mom or your brotherinlaw gives you legal advice, he is guilty of practicing law without a license. Yes. Of course somebody has to notify the authorities and decide whether they are going to come after you. But technically yes. Is legal doctrine of professional speech were the government can regulate the professionals tell their client more directly than it can regulate other kinds of speech. The doctrine that not only has never been discussed or endorse but its never even been discussed in a single majority opinion in the history of the United States Supreme Court. Lower courts have a top did the doctrine that an elected legislature who has no expertise at all in psychology or whatever the profession might be is in a better position to tell a doctor what he can tell his patients than im. That doesnt make any sense whatsoever. [inaudible] [inaudible] is that if the message i gave, i am greatly sorry because of course the doctrines of human liberty endorser. During that era was true for all people everywhere and i would be ashamed of myself if i had said anything that was narrower than not. Steve wants to follow up. I just want to underscore that. This is spirited 99 by tims reference to magna carta. Magna carta. I got into a fight of magna carta because its fairly explicitly purports to represent a continuation of ancient liberties, and then when you see it under koch, that seems in effect to be very akin to natural law. The source of these liberties is complicated. Koch and dr. Bottoms case was one involving the licensure requirements of the city of london with respect to a doctor. Of a great admirer of lord coke. Hes the greatest of all time. What he said about magna carta is not really what magna carta says, but i believe the decision in the 19 tens that said he was such a great lawyer that even his mistakes are the common law. Appear, please. I just found out he wrote the new book. Could you speak up a little bit . The question is about your book. What are some of the good outcomes that you found in your research and we can actually this. It is a good theory, but i wasnt clear in terms of what you discussed and how to actually implement bad in terms of understanding that getting permission is about from your days. Will come in the thesis of my book is we should be required to ask permission in the first place. I actually found so many positive outcomes as i was putting together the examples that i sort of had a hard time finding negative examples because a lot of times people take on cases and win them. The psychologists writing a newspaper column ended up winning his case. That is because in his case the institute for justice but other organizations that represent people for free were going to take on that case. We can never know how many people wouldve been scared away by a threatening letter from the Kentucky Department of psychology licensing. We dont know whether the outcomes are good or bad and its impossible to do Empirical Research of that source. I give a lot of positive examples of how in the end people have taken on the system. And in the business of taking on the system and i hope winning. Lets take this problem on. It is a real problem. The louisiana forest of lives. They met a date. At the time that case went on, you were graded on the beauty of your floral designs, for example. He has to protect customers from now. Hes not making that up. This gentleman right appearing this gentleman here. Im an endangered species that the fcc had not three times, your honor, at the d. C. Circuit. I am an entrepreneur. Professor, it occurs to me that was required from Saint Dominic and the holy father and if that wasnt obtained, the consequent should have been significant. A little bit of flat here, do you agree, professor, that to draw the line, benefit costs as a way to go if regulation is potentially desirable or not and too little of it is done in the article to agencies. And your honor, regarding the Team Forgiveness rather than permission, do you think the cost of capital is a regulating factor . Its the risk of not getting permission upfront and getting punished later is fairly high. The cost of capital can self regulate that for an enterprise or ranch burger. I can see how the cost of capital makes a permit to send, increases the way in which the permit system is preferable in my example of the automobile manufacturer. But i am not sure how that is selfregulating in the sense that cost of capital is brought to bear on our legislators when they are deciding between different approaches. [inaudible] system has to be has to be set up to allow that. Im not quite sure i understood the question. But the question is do or agencies take costs into account in a proper way, the answer is i think so but im not sure. I dont know how i would be able to measure whether they did it properly other than the factory had judicial review at various times and political review appeared if you are not sure, if you are confident it he agencies able to take these into consideration. A bowler does or doesnt properly. Probably willing more than able. Some agencies are welcome and some of them are struck dead and may not take safety into some administrations. Even sure for mr. Centerburg. Project taken on the defensive at a mini after they were expelled from eating the forbidden fruit. Im delighted to have a null reference. I urge you to do so. That gives the best possible defense of adding many, especially adam who chooses to eat the apple limits in a fallen world rather than without youth. Snake made some representative. We only have one side of the story. After all he got a bum rap. And it isnt succumbing to the temptation. That is a lesson for corruption of political officials as well. Its not attempting and succumbing to which Many Political opportunities have done. Also in the back we have a handout. And the other hand, see them. On church messenger. Im a High School Senior at the high school in maryland. There was some discussion of due process and im writing my senior thesis on the state of freedom of speech in the First Amendment in universities, particularly public universities. I was wondering if you could comment on the public universities in denied due process. I have a section of the book in which i make an analogy between the recent enacted just means yes for in california and the Permission Society as a form of a requirement for sex where you are presumed unless you can prove afterwards at every stage and invoke it afterwards. Which is a plain violation of due process. Undermines the most basic physical of epistemology itself which you assert a claim must prove it. At the origin of our principle in that innocent until proven guilty. The reason is not a arbitrary preference of our society. Is the laws of logic that is impossible to disprove something truly and therefore it is makes no sense to put the burden of proof that he did not commit the crime. That is a real problem. With regard to free speech i have to admit im astonished by what is going on the university and College Campuses nowadays. I did not see this coming. I am amazed by the degree to which it seems schools are cracking down on unpopular thought. Its a disgrace and a company that not only prides itself on freedom but his long prided itself on its generation to cherish and protect principles of freedom. We defend freedom here or it is gone and if we dont defend it, but in my stellar grandchildren but we found more precious than freedom. It is disgraceful that we are facing a situation or even the most innocent remark or a hollow when cost and can give people in serious trouble with universities that are after all Government Entities and have a constitutional obligation to students before punishing them. I escaped that they go into a college that receives no government funding. Though they also have a disciplinary restriction on free speech. In any event i think it is a shame and i dont talk about that part at great length in the book. Even in private schools, there are contractual revenue is often invoked by such organizations as the foundation for individual rights in education and you can go to to long speeches on the progress of free speech and is absolutely right was going on today. It is very different from back in the 60s when the students were clamoring as in berkeley, california today the students were clamoring for safety and it is those who want to be sheltered from anything uncomfortable. A lot of people are familiar with her work. Let me put in a word for another organization which ive been at rates enough for many years. Next question. Adam watkins, Cato Institute. Without crossing that line of asking for permission. First of the registration requirement, whether you dont ask permission which are required to inform the government before you do it. The second one is some type of odd so a word zoo violated the rules that you have some way of punishing someone that has no money and the last with being the case were the case for reduced which to a permission list to send, say favorite. They contradict Bank Regulations and ask whether such as touch a thing would violate the law and the safe harbor they say that it would. Would you perhaps go into many of the same problems for such a system like that . Arlette the other panelists gophers. To identify continua in terms of the degree of it bans review. But most of the problems and identifies with the permit us to acrosstheboard. In partial response the question is what is the substantive standard because it is granted or have some and is a difficult and defining word that will express, tim doesnt bite that cause, but the problem is trying to find some enough in various circumstances that will work in the context of the regulation. Good cause means Something Different for firearms whether something can be discharged. Yeah, so in my Perfect World i wave my wand and get rid of the Permission Society. There still are some very similar to permit requirement to buy insurance companies. If i start a business and insurance in case the place burns down. We will ensure you, but you have to show us that you build your house on a fireproof for your business out of Fireproof Materials or Something Like that. In fact historically, in order to adopt its own criteria that imposes burning permit requirements. That would be my solution. There are Market Alternatives on the benefit is they are more flexible. Dig zoning for example. 100 years ago zoning was going to be rational to induce my name. We wont have a in the parlor. We will have businesses over here and residences over there. First of all it was immediately captured and which are of course still goes on subtly. And if you look at zoning map of manhattan today, it is every bit as crazy quilt as it ever was a century ago except there is a difference that all the exemptions and grandfather a man and excuses in all these different roles, those have been triggered by a political Decision Making is that of of the people who want to have consumers in supply and demand. Instead is based on what they know somebody at city hall in Research City hall to get an exemption amounts thursday. Especially in the competitive Insurance Market allows for costbenefit analysis to be brought in a rational way that unfortunately ages these are less able. This is by roger has two people on one side. He cant resist. Is absolutely right. When you do ill come to the rescue. Weve got time for one more question. All the way in the back. National service for Public Policy research. As you hold the microphone closer to you . Monaco national publics service. Jean morrison reference your use of the term ruling class. But he seemed unclear as to what he meant by it. So could you tell us briefly what she meant by the class when you refer to something in this essay a few years ago. I guess it sort of has some parallel. What i mean when you have a system that saves to a permission system. You have to look at superiors and asked for permission to do your thing. What happens this overtime, that coalesces into a permanent overclass and the people who have to ask permission coalescing to an underclass. Kentucky wouldnt allow a new competition in the moving industry, but existing industry could sell or give their licenses to others. So typically they gave or sold to two friends and family members. Gradually what you see happening as there is a class of people who have licenses in a class of people who done and the more the system turns into a permission requirement, the more separated and rigid does class distinctions become. I think what happens this overtime does tend to polarize around racial distinctions. The sanctions on socioeconomic status or the beginning point and if this malady continues to worsen, what you end up if Something Like the old regime of friends or the 18th century england were rigidly coalesces into insider status and those of us who dont. One of the great revolutions of the 18th century westerberg system down. Jefferson talks and review of the pamphlet that got him a job writing the declaration of independence. He said its illegal for the columnist to make things out of iron. Economists are required to send the iron to be shipped back to the colonies for years. What he means is this class of people who have political protection so they dont have to compete fairly. The great idea of our Economic System is we should classes to issue the personal merit. Theres another old word that capture this regime of the ruling class well beyond the government officials. I would think of the star valley snitches. They have stars on their bellies and we dont and not system gets worse and worse over time. Regard, we are here to know that and please avail yourself of the opportunity to pick up a copy outside. Tim will be glad to sign it for you as well as his other books. Also, and went, i want to again thank the Federalist Society for their cosponsorship of this program. I want to thank cspan and its audience for joining us in this program here lets not had up to the georgia digger Conference Center for lunch. Before we do, give a warm round of applause. Clock not [applause] [inaudible conversations] [inaudible conversations]. The associate professor and chair of the department of history