Transcripts For CSPAN2 The Permission Society 20161030

America ha first foreignborn first lady since luiza adams or former president as first gentleman . Learn about the influence of americas president ial spouses from cspans first ladies, now available in paperback. First ladies, give readers look into personal lives of every impact of every first lady in history. And features interviews with the nations leading first ladies historians. Each chapter offers brief biographies. First ladies in paperback, published by public affairs. Available also as an ebook. Welcome to the Cato Institute. Im director of cato center for constitutional studies. And together with the Federalist Society, were hosting a todays forum. I want to thank the Federalist Society. Dean righter, julie nix, for their assistance organizing this forum. I want ii want to welcome thoseg us through cspan and Live Streaming audience as well. Were here to discuss an important new, important subject the Permission Society, title of new book from encounter book from Goldwater Institute tim sandefur. How the ruling class turns our freedoms into privileges and what we do about it. This book documents many ways especially since the progressive era, freedom at heart of our founding principles and documents has been distinct in favor of government. Having to obtain permission from Government Officials before to act. Property owners long experienced this reversal. 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 all the way up to the Environmental Protection agency and u. S. Army core of engineers, starting and running a business, all of which tim sandefur covers in the new book. I will introduce each speakers before they speak starting with tim who will talk 20, 25 minutes from the book. Well have comment from two other guests for 10 to 15 minutes each. A brief comment from tim before we open it up to q a from you in the awe yens. For lunch upstairs in the George Yeager Conference Center. Tim sandefur is Vice President of litigation at Goldwater Institute in phoenix arizona. As i write in the blurb for this new book, with this, his forth magnificent book, plus countless articles and speeches and legal briefs tim has emerged as one of americas most important upandcoming political and legal theorists. A graduate of hillsdale college, and Chapman University school of law, tim served for 15 years as a litigator at the Pacific Legal foundation before joining goldwater. At plf he won important victories for economic liberty in 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 can sense of the constitution in 2014. Now the Permission Society. Plus some 45 scholarly articles on subjects ranging from Eminent Domain to economic liberty, antitrust, copyright, slavery and the civil war and political issues in shakespeare, ancient greek drama and star trek with a range of interests of those accomplishments at such an early age. Were proud to have tim as an adjunct scholar here at cato. Welcome tim sandefur. [applause] thank you very much. Its an honor to be here. Kind of hard to see. I see old friends out there including alan gura who is one of the inspirations of this book. What came to mind that alan and some other friends of mine were having a passage from James Madison 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 about. 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, unlike the old documents of the english civil war, of the glorious revolution, those documents all gave freedoms to the people or purported to. Whereas the American Revolution was founded on the opposite principle, that people are basically free and create the government through the their own agreements to the constitutions and so forth. Contrast this for instance, contrast the opening the declaration with the constitution with the language of the magna carta. We celebrated the anniversary of magna carta, 800th anniversary of magna carta. Its a great document and all that, sure. When you read the document it is surprising the language that is uses. John bit grace of god, king of england, to his loyal subjects, greeting. To all free men of england we granted out the liberties written out below to keep for his heirs and our heirs. The magna carta, it is very clear, i the king give you the following freedoms, it lists out the freedoms. That is the opposite of the principles of the constitution that start out by saying, all men are created equal. All people have basically free. They then create the government by an agreement and give it certain powers, most of which are listed in article i, section 8 of the constitution. What the Founding Fathers did, they reversed the older conception of freedom and they did so on the basis after basic principle enunciated by john lock. We philosophize a lot, what is freedom . Is a person who is too poor to afford things really free . That sort of argument. But i think those are distractions from what freedom really is. That is, freedom means not having to ask permission. John lock says, as we are not liberty for every man to do as he lives, who can be free when everybodys mans humor might dom near over him. Freedom to dispose, person, actions, possessions whole property within allowance of those laws which he is, 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 same laws apply to everyone else. This was a revolutionary idea in the 17 70s, the older model of freedom the magna carta, we call this principle in the law, prior restraint. Prior restraint was the old rule when it came to freedom of press. We normally hear the term when we talk about freedom of press. Prior restraint that said you had to get the governments permission to publish something. In the 17th century this was overturned and became the pride of british subjects that no prior restraint could be placed on person before he published his sentiments and gave a speech. He might be punished afterwards if he gave slander or threats but he couldnt be required to ask permission before uttering his views. The same principle applies across the board. Religion in particular is the model i use in the book. Under the british system, like if you read William Blackstone and his commentaries in the 1760s, he is very broad that british subjects enjoyed religious toleration than people of any other nation. He is very proud, rightly so because he is right. 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 differences, giving religious liberty, not liberty toleration to the people. The founders repute did i eighted this concept. Thomas payne said toleration is not the opposite of intoleration but counterfeit of it. Both are despotisms. The one assumes the right of withholding liberty of conscience and other of granting it. One is the pope armed with fire and stake, the other is the pope selling or granting indulgences. Jefferson says the same thing in virginia when he talking about list proposal what became the virginia statute for religious freedom. Our rulers can only have authority we submitted to them. The rights of conscience we have never submitted. Were answerable from them to god but legitimate powers of government extend only to such acts injurious to others but it does mean no injury for my neighbor to say there is no god or 20 gods. It neither picks my pock or breaks my leg. My favorite jefferson quote. It neither picks my pocket or breaks my leg so it is none of governments business. In his old age, James Madison was proud where he told the 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. Mason in original draft that all people would enjoy the total toleration of religion. Madison, 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 was the presumption we are all basically free, not that were basically unfree until the government gifts it to us. That is reflected in the text of the constitution which speaks of securing the blessings of liberty. Our rights shall not be abridged. Says no law respecting freedom of speech or whatever shall be passed. The right of the people to do soandso shall not be infringed and of course the ninth amendment, which 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 mean doesnt mean you dont have that right. That is what the ninth amendment says. Government is not giving you freedom. It is simply a few of your freedoms in the bill of rights. So, how have we come, how have we come to the point today you basically need to get governments permission for a wide variety of the things that you spend your daily life doing . Think of things you have to ask government permission to do . You need a permit to build a house, own a gun, buy things, have a job, pay your employees. Even freedom speech often comes with some sort of permit requirement. We have 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 the popular saying has it, i always thought america was a free speech zone. This, 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, Architectural Design review. Architectural Design Review occurs when architect planned out maybe a single building or subdivision and he goes before the city zoning board and city zoning board officials look at it complies with all the safety codes but i just dont like the way it looks. I would really prefer it be colonial or neocolonial, instead of what over style it is designed in. Purely for aesthetic reasons. I hold that architecture is a form of sculpture. It is artistic expression. Therefore should be protected by First Amendment as form of free speech, exactly the same way or the kinds of sculptures are protected as free speech. No one can walk through a Frank Lloyd Wright building or building by labusie, im from pasadena, green in green masterpiece like the blacker house in pasadena without experiencing the he can set tick feelings great artists seem to convey. It is form of free speech. Architectural design substitutes the architects preferences. So far no architect has been found with the guts to litigate that point. What is happening in these and other areas were replacing the free society with Permission Society. You are not free unless the government gives you permission. Now the model that lawyers use for this that i describe in the book is the difference between the nuisance system and the permit system. The nuisance system is built on the ancient classical legal principle something, something, something, i dont know latin. What that mean is, you have the right to use your property as you want so long as you harm no other person. As opposed to the 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, that its basically reactive. It allows people to commit harms. 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. Permit system proposes to be proactive. No, no you have to prove to us that you are qualified honest and so forth before you act. The problem is there are many more problems with the permit system than with the nuisance system. For example, rentseeking, the phenomenon where the government hands out benefits to people it becomes in their best interest to spend their time and money to get the government to do that in their favor. The other is the Knowledge Problem, identified by hayek. No government can possibly know all the information necessary to run an entire economist. Classic example given by leonard reed is, pencil. Nobody in the world knows how to build a pencil because to build a pencil you need graph fight and wood. To get wood you have to have lumber b to get the lumber you have to have lumberjacks. To get lumberjacks you have to feed them which means you have to have farms few steps along the reasoning the entire World Economy is spent building a single pencil. The way it works by decentralized process of Decision Making that avoids Knowledge Problem. Permit system causes Knowledge Problem. Take an example in kentucky litigate ad case in kentucky in defense of a entrepreneur who wanted to start a moving company. In kentucky, in 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 about half the states and most major metropolitan areas. Certificate of public convenience and necessity law. Tough prove to government bureaucrats there is need for new moving company in kentucky before you permit. Any existing moving company can object saying there is no need for competition against them. Guess what . They often say that, right . So we took, we took this case to court. In the deposition i asked how do you, how do you bureaucrats decide whether there is 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. There you go. Thats another problem with the permit system. The vagueness of the criteria thaw they usually operate. For instance in the gun permit area you cant have a gun unless there is good cause. What does good cause mean . Whatever the bureaucrats say it means. But even deeper than this, i think there is even more fundamental problems with the permit society. One of them is, it violates the principle of equality. Who has to ask permission. Inferior has to ask permission after superior. Right . Slaves have to ask permission. Children have to ask permission. Until recently women had to ask permission to own property, get jobs, sign contracts and so forth, right . 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 phenomenon create as class of people who have access to government decisionmakers and can use the power to benefit themselves. The soviet union called this the nomenclature system. There is always class of people whose cousins served on the board or brother on committee, in exchange for a Little Something might get you time in front of the bureaucrat. 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 you apply for a permit to build, the government comes back and demands property or even cash from you in exchange for a permit. The Supreme Court has said this is unconstitutional in many cases but local land use officials continue to do it nevertheless. I did case in san diego area several years ago where my client was forced to give up his right to vote in exchange for building permit. But the most offensive part of the permission system across the board is how it deters innovation. It restricts opportunities 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. They would be willing to pay for it. I could make a lot of money off this he thinks of all the permits he is going to have to get. All the hearings he has to go through. Maybe even special lobbying to get a special law passed to exempt him from a existing bureaucratic regime. Says you know . It is just too much trouble. We can never assess that cost because it vaporizes instantly. It never comes into existence. How much might have occurred, how many jobs might even been create, how much wealth might he have created and how many other innovations would have come about base of his innovation vaporize in that instant. As great poet john green leave whittier, said, of all sad words of tongue or pen the saddest of are of those. Whoo might have been. Unless you can prove to the government there needs to be a new business of that kind in that area. Ive been a libertarian since i was in high school and, i remember how often i would say about freedom is good and answer would come back, yes, but you also have to have responsibility. This is often the response that i get when i talk about the problems of the permission system. The permission system is supposed to impose responsibility. The problem is that responsibility can take two different meanings. It can either mean dont hurt people, which is sijture, something, something, something. That is the nuisance principle or can mean, do what we say. That is the permit system. I think that the nuisance system is by and large the better way to approach social problems and that means presuming people free unless they will harm some other person. Unfortunately i believe were sliding more and more into society presumes you are unfree as you get government permission. As we move toward the Permission Society, were moving away from principles of freedom upon which our constitution is based. In 1946 at the nuremberg trials Justice Robert jackson who was serving as the prosecutor for the nazi war criminals was looking for the right way to describe the freedom that he hoped would rise from the ashes of europe and he found those words in the 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 right 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. The more were required to ask someone for permission, the more the government presumes that we are not free unless the government says we, the less freedom that we have. And that, 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 . If we cant trust them with freedom, whom can we trust with ours . Thank you. [applause] thank you very much, tim. Were here to mark the publation of tims new book the permission sew site those can purchase outside and along with tims other new books. He will glad to sign it for you. While you were talking kel i dont think shapiro, 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 learner family associate dean 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 and 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 separation of powers, protecting the rights of consumers and protecting unrepresented class members in class action settlements. He has argued 20 case in the Supreme Court. Including victories goldfarb v. Virginia state par, holding lawyers to antitrust laws for using minimum fee schedules. Virginia state board of pharmacy where citizens of Virginia Consumer Council making free speech subject to the First Amendment. The ins, very famous case that struck down over 200 federal laws containing the legislative veto as a violation of separation of powers. 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 its president in 1999 to 2000. He is 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 our society is inverted. We need permission instead of having freedom to do what we want to do. No doubt in my mind permission is needed for many things in society but my reading of the book and knowledge of society is it has got it inverted and there is nowhere near the ratio that 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 of which are very interesting and you agree with, i remember 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 a naval rotc cruise. I love the word cruise but what they called it and it was very hot and i, it was lunchtime and i went down below and got an is ice cream and brought it up on deck. A person who outranked me, basically anybody, said, what are you doing with the ice cream . I said im eating it. Who told you could eat the ice cream here . I said, nobody. He said, i said nobody told me i couldnt. He said did anybody tell you could . That is when i knew the difference being in the navy, being a civilian. Civilian i could do anything i wanted unless somebody told me that i couldnt. Income the navy i couldnt do anythings in somebody told me i could. That is Permission Society but that i doesnt find that to be Permission Society at large today. Let me start with couple areas of agreement with respect to the licensing and certificate of necessity. 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 unauthorized 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 is 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 Legal Profession as you heard, many of them successful but unfortunately in the area of unauthorized practice of law ive 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 simply speaking, writing, that was First Amendment protected activity but always thought that was not a winning argument that it was actually conduct that people were trying to regulate. I didnt believe, 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 it is one thing to have them licensed in the sense of having a bond or being able to identify them and find out whether they have any criminal activities but here in the district of columbia i think it was your office that, 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 lest people would be misled. The case got to the d. C. Circuit. It 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 i could. The question is, is it serious enough to do anything about it . The trouble is how do we deal with a problem like that . And 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 we would do about the current laws already on the books. The trouble with all of those, if you ask legislators or the regulators, they would say theyre already complying with them. They dont contend, no, were not regulating anything frivolous. Were only doing really important things. The problem is how do you get a handle on that . My own view is that the First Amendment 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 . The same is true for the certificate of necessity. I personally encountered something the other day. We tried at gw to do a lot of pro bono projects for our students and one of the areas students are particularly 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. Turns out that something in congress, and i dont know who it was, has now got requirements in there that in order to be able to assist a person filing for benefits, you have to be accredited, and that applies whether you are a lawyer or somebody else, and if you are a lawyer, not only do you have to apply to be accredited but you have to take three hours of continuing Legal Education to help a veteran file a application. Nobody is allowed to do this unless they are accredited. I thought that we were supposed to try to help our veterans, and the danger of somebody not helping them out as opposed to having them have to do it themselves seems completely misplaced and but, this is fairly recent statute, because all the veterans organizations have to get their own persons accredited as well. The area that he talked about is a book that i fully support is certificate of necessity. I confess i had not heard about these moving Company Problems before. Certificates of necessity that i had heard about, involved, for example, the ability of a hospital to open a new place in a town when they were seeking hill burton funds to do that, and in that situation before the government spent money they had to decide whether it was necessary to do that, and the same thing is true with buying very certain expensive equipment. I had not heard about this before. I applaud the efforts to go after those. Im not sure the First Amendment is right wray to go after it. Constitution small freedoms or substant tiff due process is the right way. Commerce clause in interstate moving companies be fruitful round of attack. I dont know how many you heard the problems that the tesla Automobile Company has had in trying to open up new markets. Tesla had the idea they wanted to sell their cars directly to consumers. Number of states including virginia and new jersey have laws you may not sell cars unless you have a dealership in our state that provides full service and warranty. Violation of dormant Commerce Clause. Interfierce with companies to do business within a state. Does not help consumers at all. Nothing wrong with the market for automobiles in this regard that cant be cured by allowing tesla to come in. If it does business and provides proper service, people will know about it. If it doesnt, people will know about it also. Tesla tried to work with some of the states for a while. I saw the other day they filed a lawsuit on Commerce Clause grounds to challenge the laws as they properly should. When i saw the title of book i thought it would be about the fd a e pa but there is surprisingly little in it. I think that, that is a recognition in our Permission Society the nuisance theory only works so far. That we need protections in other cases and i dont understand that tim disagrees. The problem is line drawing, and how we decide and who is going to decide which areas need protection and which of them dont. The more i thought about it, the more i thought that the problem was not in generality, but in the weighing the specifics. Take the precautionary principle which the book talks about. That is 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, in order to do their work must have sideeffects. The question is are they harmful side effects and does the do what it is to do. Precautionary principle says if were not sure, we should not allow something to go on the market or put it on with conditions, including postmarketing surveillance. It is not that that everybody, concerned about this, thinks that we should either take everything off the market or put it on without conditions. There are interim positions. The question is, are those interim positions sensible . I really like the quote, and i have used it several times from st. Thomas act wine has. St. Thomas aquinas was purported to said, if the captain of the vessel solely concerned about the vessels safety he would never leave port. That is an interesting way of thinking about it. The point you made earlier, tim, we dont know what wouldnt have happened if we dont let people go out to sea. On the other hand, sometimes being in port is not as safe as being out at anchor or out perhaps even at sea, if we have a hurricane, instead of having your vessel smashed against the dock, sometimes it is better to take a little risk and go out to sea. All right. So as i was wondering about this, about the permissionless society, i thought about a recent phenomena, Driverless Cars. Should they have to get permits in order to be out on the road . Are we willing to allow the law of nuisance to decide whether all of us will be subject to having Driverless Cars . Or should there be some kind of restrictions, permissions, authorizations, checks, in advance . If so, who should decide and what should they be . The, how about speed limits . Is that a permission that we all should be granted or permitted to drive as fast as we want . Or what do we do about uber and airbnb should they be regulated at all or in what regard . Should we worry about workers subject to conditions or they are all right. Are they different than employees like worry about minimum wage which they may be opposed to yet. What about customers . Piece not post about Racial Discrimination in air n bnn. If theyre unregulated what do we do about that as well. The book contains early references and praise for decisions in lochner. Leaving aside the specifics how the bakers in that community got together and passed a law that was only applied to work for bakers, the bigger question is, is is it appropriate for our federal courts to essentially review because they dont like the economic regulation that has been bassed by our legislators or our regulators . My own view is the harm that come from excessive economic regulation are relatively modest and danger of having the court step in and review all economic and other regulation for substantive due process violation is greater harm. But that is my view. It may not be that of everybody else in the room. The last point i want to make, i was rather surprised who the enemy was in this book. Now the enemy is the ruling class, for which i translate to be elected and appointed officials. And the question is, are we better off or worse off with having democracy . Because that is what were talking about there, be our guide in these areas . It is true of course, in many cases were beset with regulatory and legislative capture. The book is clear however that doesnt occur in all situations. The question is how do we try to deal with that, and how we try to draw better lines . The book suggests that litigation may be useful, not simply as an opportunity to turn back a bad law but, as a means of exposing the silliness behind the laws that we have. That its a wonderful opportunity when you, when the government has to answer your complaint. They have to put on live witness who will say under oath why theyre doing what theyre doing. You get many answers essentially indefensible. All this is part after broader education program. Whether litigation, which i spent much of my life doing is actually going to win some cases, that is nice and important and serve as function of reminding society we are entitled to rationale responses to the questions that we ask. Thank you very much. [applause] well, thank you, alan. Weve gone nearly 3 4 of an hour before lochner came up which is a long time in this auditorium. Were now going to hear finally from judge stephen williams, appointed to the United States court of appeals in the d. C. Circuit in june 1986, and took senior status in septan. Like dean morrison, he is a graduate of yale college and harvard law school. He was engaged in private practice from 1962 to 1966. He became an assistant u. S. Attorney for the Southern District of new york in 1966. From 1969 until his appointment to the bench judge williams taught at the University Colorado school of law. During this time he also served as a visiting professor of at ucla, 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 and coauthor of on cases of oil and gas law which appeared in the sixth edition in 19892. His most recent 1992. His most recent work is entitled, liberal reform in illiberal regime, 19061915, the creation of private property in russia, a book we featured here at Cato Institute when it came out and a book that has been described by former acting Prime Minister of russia igor gidar as absolutely splendid. Please welcome the absolutely splendid, judge stephen williams. [applause] steve, you want to come up here . I would really rather be here, all right . Go ahead. Yes. One person who is he deprived of opportunity to see me but he can move. I thought the book was generally good assessment of the pathologies of regulation. I dont think it is really consistent with the norms of judicial ethics for me to try to do either equivalent of what alan did or rebuttal of what alan said. Were not supposed to speak about the, about the specific policy issues that likely to come up in front of us as so many of these potentially could. But i do think that what it is useful for me to focus on is the fundamental question of how permit system actually differs from regulatory systems in which the government acts after the citizen has acted tim uses the metaphor, nuisance systems but i, ill call it nonpermit systems which are, cover a lot and at the very end of the book tim has a very brief section what he enumerates what he thinks are distinctive draw backs to a permit system but i will argue that exempt for one, a very important one, i hasten to say, except for one, they are ubiquitous across regulatory systems. First, rentseeking. Thats, not only present in permit systems, it is also present even in the form of after the fact regulation known as antitrust law, which i think is the, form of regulation probably most, most accepted by adherents of free markets, not uniformly accepted but nonetheless, the most accepted. And, as you know, for a long time, not so much under current doctrine, but for a long time, antitrust law was a device by which people could take out their competitors, ironically, but in any event it worked that way. So rentseeking was at work even there. Tim identifies the Knowledge Problem which to him is implicit claim the government has more or better knowledge than private citizens. First i would say basically there is a lot of regulation that really doesnt depend on that at all, regulation depending upon the proposition that either that transaction costs are too high for optimal solution to work out by normal contract or Property Rights or asymmetry of information, the drug issue for example, being clear case of those. In any event, it is equally present in nonpermit systems. Availingness, yes, both systems are vague. I would argue that the vagueness of permit system is slightly less dangerous than the vagueness of a monday permit system, with a monday per minimum system, the government crashing down on you after you have committed resources, possibly sends you to jail and so forth because you misunderstood a particular regulation. Forth, demanding payoffs. There is history of the certificates of public convenience and necessity 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 a bank has committed fraud, starts to investigate, and. The very fact of the investigation clouds the banks prospects, and indictment would be fatal, let alone a conviction the reason recent Deutsche Bank episode suggests even rumors of an agreement on a settlement can be nearly fatal to a bank. So, again, they, the need for payoffs, which result from the department of justice criminal pursuits, is present across the two systems. Now i come to the one that i think is his strongest. I will return to it again. What he calls the double layer effect of permits. And, he points out that where the citizen proceeds without a permit, or in defiance of limits on a permit he will lose even if denial of permit or limitations is illegal. So that is certainly a double effect. Associated with that is the fact that in the permit system delay operates against the citizen in favor of the government. Citizen has to weight until the government finally pulls itself together to see if the government itself acts. I want to focus on that some more later. Let me quickly take the other two objects that he poses. Stifling innovation. Surely true in the case of after the fact regulation. Again antitrust is a good example. Finally, the government is superior. Well yes, the other system involves the government exercising coercive power, monopoly on use of force to compel citizens to stop doing something or to pay a fine for having done it. So i want to come back to the issue of the essentially the, the delay coming at the expense of the citizen actor. I think the key problem there is that it, it means that the adverse effects of the regulatory system tend to be hidden. Compare a system of regulation of truckers, under which 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 fines that your activities have adverse effect on the Economic Prosperity of the truckers preexisting truckers with whom you compete. Now, imagine a, someone who thinks woe like to go into trucking and under the Second System the government is going to clamp down on you afterwards. He buy as truck. He starts providing services. Maybe he starts to get pretty good at it or pretty successful. He gets a second truck, a third truck, he has by this time quite a few customers. Maybe a little reputation. At that point the preexisting competitors ask the government agency, hey you have to move against this guy. He is clearly violating the norm which is probably true and they go after him. I think in that context their ability to get the result they like is, is going to be weaker than in the permit system because by this time people know about it. If he has done even a decent job, if he hasnt done a decent job, he is probably going, his business will die on its own. If hes done a decent job, people will be upset. There should be, i would hope, News Coverage of the governments attacking this person. And, he has a, i would say a far better chance of escaping the regulatory nemesis than he would under the permit system. Alan brought up uber. One of my, this is entirely speculative, uber by the time it became controversial had a lot of customers who were, many of them, really quite, you know, they were members of the elite, put it simply. And i think that has made it harder. It means that the taxicab Companies Whose entitlements are jeopardized by uber, are in much weaker position to oppose it than they would have been before some agency regulating its services at the outset. Now the concept of prior restraint comes from the free speech. And consider it there. I think you have the same situation. If a person can publish first the premise can be there is a modicum of free speech in this hypothetical society. If you publish first, then, people. When the government goes after you, quite a few people presumably will know what it is that youre saying. And 95 of the time, government going after you, on the grounds of what you said, is going to look extraordinarily silly. Whereas, they simply cut it off in a censorship program, nobody potentially would know about it. The modicum of free speech is important. If this was russia i dont think it would make any difference whether a permit system was used or the nkvd would come after you, works exactly the same. That is because there was no way in which public publications that didnt represent the party line could go actually ahead. The basically the proposition is one of strangling things in their cradle. Tims book brought toe mind a favorite poem of mine, greys ellegy in a church graveyard. Talking about peoples potential is never realized. Illusion to some mute or glorious milton may rest, goes on and on in that vein and a trucker may not seem the equivalent of milton, presumably is not. When we recognize the creativity that is associated with entrepreneurship in general, you see the message grays ellegy is really manifest and becomes important where a permit system is used. I should add one thing though. It seems to me clear that in certain cases the regulatee would vastly prefer a permit system. Exposure about to set up a line of production of cars that you know have to meet some criteria for emissions, of nox and so forth, you want to know before you spend 100 million, 200 million on your production line that youre not going to have trouble on the technology that you use in that, in the car that you produce on this production line. So, that is at least an instance where a permit system is to the advantage of the permittee. I have other thoughts. Maybe get a chance in the discussion to work them in. [applause] well, i want to begin by saying how happy i am at the number of poets who have been mentioned in this conversation. I count four and i think we should make it a rule that cato should insure that at least three poets are quoted in every presentation. I only have a brief period so i want to say i think a lot of these comments are so intelligent and deep that they would require much more thorough discussion, which is why i wrote a whole book in response and actually other books. I noticed some of the references, for instance, dean morrison said the enemy is democracy. I dont think that is quite accurate but to discuss my views on that question, you would should consult my last book, the conscience of the constitution that discusses the dangers of democracy and so forth. I will added a administrative agencies that typically enforce these permit requirements are the least democratic thing you can imagine. Theyre not staffed by elected officials. Most of the laws under which you live your life are not imposed by elected officials but hired bureaucrats in minute straight tiff agencies who can not be fired because theyre in union members. The thesis of my book, prior restraint should apply to all. Supreme court said in the 50s, there are basically three rules when prior restraint is acceptable. That is there must be a time limit which the permit will be granted or denied. There must be clear and unambiguous for the granting denial of permit, not vague standards like good cause and right to real judicial review, if youre wrongly denied the permit, not some sort of a fake review in administrative hearing where the prosecutor is paying the judge. My argument is basically those principles 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, right to earn a living and i explained i agree i think the First Amendment is not, 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 in western civilization has been largely undermined by both left and right. Fortunately we at the Goldwater Institute have a solution for these problems. One of them is our right to earn a living act which is legislation that would require state courts to impose a higher level of review than rational basis when it comes to legal challenges when it comes to restrictions on economic liberty. Because dean morrison is right, when i addressed the tests that ought to be applied to whether a permit is required or not that gets a little bit vague. The reason for that because at present under rational basis test it is basically anything goes. The first step toward rationalizing the currently irrational process of Drug Development and approval by the federal drug and food administration. It often takes a decade and 1,000,000,000 a billion dollars medicines which could save peoples lives. The right to living act allows people to use medicines that have been approved for basic safety but are not yet approved for sale by the fda. The right to living act would resolve that problem, keep in mind were not talk about intrastate need laws those were abolished in the 80s. Its intrastate, thats the problem. That can only be addressed to you legal reform or by tape chords taken seriously amendment which prohibits from arbitrarily tonight people their economic liberty. The question is between reactive and proactive or prior restraint and punishment afterward. Its too that you will encounter a lot of similar problems and punishment afterward afterward that you would encounter in prior restraint. That is also true in speech, lawyers had a long debate since the constitution was written over how much further the First Amendment goes than the old rule. The old rule seems to agree that is part of the First Amendment. Prior restraints are never allowed. The Supreme Court says except when. You think of the passage in the animal farm when the animals emerge to find no animal shall dream show no animal shall drink to excess. No prior restraint to excess. In any case, part of the debate between proactive and reactive is can you really punish a person after they speak . Is that okay under the First Amendment. Early federalist said yes. Its okay to punish people after they speak for the words they alter. Courts have developed doctrines that allow, in some cases like libel or threats but protects free speech. I think its assist if the same vigilance were applied to economic liberty and the other issues i talk about we would be in a better state than we are now. My book doesnt try to draw easy lines and say heres a Clean Solution to the problem, i agree there are cases, i think rare cases one of prior restraint role as appropriate, but they have to fall into the three criteria, clear criteria for the granting of your nile before they can be even considered appropriate. Thank you much. I. I look for to your questions. [applause] thank you very much. Do we have any short discussion. Lets open it up to your questions. Please wait for microphone to get to you. Identify yourself in any affiliation you may have. As im setting one person and one ill all send another person on another aisle so we can get as many questions as possible. Please ask a question, dont give a speech. Lets begin with this gentleman right here. Hello. Michael from washington, from washington, d. C. I work in the field of Mental Health hold a number of licenses to do that. In various local jurisdictions. One of the the things that is involved in getting the licenses are number prerequisites, it is been my belief or sometime that the prerequisites are expression of the governments inability to devise a test that accurately measured weather not summary should be allowed to practice the profession. I wanted to comment on that. Theres a package in the book in which i argue psychologists licensing should be abolished across the board. Psychology is nothing more than talking. As opposed to psychiatry which is prescribing medicine, psychology is a talking cure and it is in principle no different than the discussions that go on between someone in their priest, between myself and my mother, between myself between myself and my best friend, people talk about their problems. When you look at the statutes for the Legal Definition of psychology thats what you find. Defined terms very broad like helping people with their human problems. Does that satisfy the void holy cow. And the answer typically comes yes, but youre dealing with depressed people might kill themselves if you give them bad advice. The same could be said of conversations with my mother, at just kidding mom. That is true with conversations of your priest and so on so thats why the laws are riddled with exceptions. They dont apply to members of the clergy, lawyers can practice psychology. I. I guarantee you i have no expertise in psychology. So i think those kind of role should be completely abolished. Not only is it that the standards reflect the governments inability to come up with the precise standards, that inability gives an opportunity for rent seeking by those who have licenses to prohibit competition against them and thus real problems. [inaudible] i think in some cases it can be. Again. Let me see your hands so we can see this gentleman right over here. Im an attorney at washington. Come back from the psychologists , is it sufficient to say that you must have at least a masters degree or a phd as a prerequisite that does not involve a lot of government regulation but nevertheless protects somebody has mental problems or wouldnt be there from being injured. And second, and second, but understanding is in a number of states psychologists have gotten or are trying get the right to prescribe medicines to patients just the way a psychiatrist would. With that begin to weaken your second part of your argument. Of the profession is different the criteria should be different. I would favor something that say you have to have a masters degree over something that is more vague like you have to prove your skilled and competent or Something Like that. I guess its a how much of camels knows are you willing to accept. You find problems like the case in the book were columnists is prosecuted for practicing psychology without a license. He was a licensed psychologist in the home state because the column ran in another state without a license he was prosecuted. It goes without saying the licensing of advice columns is not compatible with the First Amendment. Americas first and advice columnist is Benjamin Franklin who never went to college and although he is called doctor doctor franklin he never had a dr. He often made up the russians he answered. It wouldve been inconceivable that the First Amendment would authorize that. The medicine rose are form of permit requirement for possessing medicine. As a libertarian im fine with all of it be legal. If it is going to be a restriction is going to be as unambiguous as fairly enforced as possible. The dr. Ultimately won his case in a decision by a Federal District court. The advice column reminded me when i talk professional ethics but i used to use ann landers, her advice columns about giving legal advice. Simply was a can i do this and she would give advice. So i would ask my students, issue practicing law without a license and if so what jurisdiction. The other thing i want essays there is an interim position on the psychologist and that and that is a certificate which says if you have a certificate in order to say that has subjective criteria. If you dont have a certificate you can practice anyone but its an indication that you are more qualified than i would be. Im embarrassed to say that i forgot to discuss that their private Market Alternatives to government licensing that are almost invariably preferable. When i go to a restaurant i dont look up their licensing history with the department of hell. I look them up and asked my friends who say i dont ask their friends and they saddle go there. Uber provides a Rating System which is not really provided in any effective way by taxing Regulatory Agency except with uber now. I think there are alternatives in the private market. Keep in mind the Supreme Court look to the availability of private Market Alternatives as part of its analysis and whether or not there is less restrictive means available. I think the the time is come to push it. If there are private Market Alternatives than their regulations are broader than necessary. Would it make a difference with the psychologist if the advice were given free rather than commercially . Of course that it make it a difference in the unauthorized practice law rules. Its clear doesnt matter if youre giving out free advice the same is true in medicine. Subject of course to your mothers exception to telling you to take aspirin to go to bed. So if youre not lawyer brotherinlaw gives you legal advice hes guilty of practicing law without a license . Yes. Of course someone has to notify the authorities and decide whether the going come after you. Technically, yes. This is important. This this legal doctrine of professional speech that the government can regulate which professionals tell your clients more directly than they can regulate speech. A doctrine that hasnt been discussed by the Supreme Court but its never been discussed in a single majority opinion in the history of the United States up in court. Lower courts adopted this same Government Official who has no expertise at all in psychology, or whatever the profession might be is in a better position to tell a dr. What he can tell his patients than i am. That doesnt make sense. [inaudible] [inaudible question] if that is the message i gave, and gravely sorry. Of course the doctrines of human liberty the founders endorsed our doctrines that are not always true for all people everywhere. I would be ashamed of myself if i said anything anything that was an error than that. Steve, i just wanted to underscore that. This was in my mail to the reference of magna carta. I thought he unduly slighted magna carta because he fairly explicitly reports to represent the continuation of ancient liberties. And then when you see it under and this seems to be very akin to natural law. The source of the liberties is complicated. In the doctors case it was woven involving the licensure requirements of the city of london with respect to a doctrine. Im a great admirer and hes the greatest lawyer of all time. What he said is not really what magna carta says. I believe there was a decision in the 19 tens the said lord cook was such a great lawyer that even his mistakes of the common law. [laughter] i just found out that you wrote the new book. The question is what are some of the good results or outcomes that you fountain your research that you can say that we can actually practice. I think its a good theory but it wasnt clear in terms of what you discussed on how to actually implement that in terms of getting permission is all about from your perspective. The thesis of my book is that we typically shouldnt be required required to ask permission in the first place. I actually found somebody positive outcomes as i was putting together the examples that i had a hard time finding negative examples. A lot of the time people take on the cases and when them. The psychologist was right in the newspaper column ended up winning his case. Thats because the institute for justice and other organizations that will represent people for free were willing to take on the case. We can never really know how many people wouldve been scared away a threatening letter from the department of kentucky licensing. We dont know if the outcomes are good or bad and its impossible to do research of that sort. I give positive examples how in the end people have taken on the system and im in the business of taking on the system and help winning. So lets take this problem on but it is a real problem. The louisiana floor stood lose. They did, in louisiana you have to have a license to be a florist. At the time and you are graded on the beauty of your floral designs for example. You make it a bad floral arrangements you have to protect customers from that. Hes not making that up. This gentleman right appear. I i am an endangered species at the fcc is now three times at the d. C. Circuit. Im an entrepreneur. It occurs to me that an interim monitor was required from Saint Dominic and the holy father and if it wasnt obtained the consequence couldve been significant. So i think a little bit of latin here, do you agree professor that to draw the line benefit cost is the way to go if regulation is potentially desirable or not . And too little of it that an article article to agencies. In an regarding seeking forgiveness rather than permission to rethink the cost of capital is a self regulating factor. If the risk of not getting permission in front and getting punished later is very high the cost of capital can self regulate that for an enterprise or entrepreneur. Good points. I can see how the cost of capital makes a permit system increases the way in which the permit system is preferable in my example of the automobile manufacturer, but im not sure how that selfregulating in the sense that cost of capital is brought to bear on our legislators when they are decided between different approaches. [inaudible] the system has to be set up to allow that. A try to answer the question, im not quite sure i understood the question. If the question store agency take cost into account in a proper way, the answer is, i think so but im not sure. And im not sure how id measure if they did it properly or not other than the fact that we have judicial review at various times in particle review. If youre not sure how or why is it that you are confident the agency is able to take these into consideration . Able, or does come art does probably . Probably will he more than able. I dont know. I think some agencies are more willing than others. Some are instructive to take safety into account and they may or may not take it into account. In some administrations and not in others. The epa is notorious in that regard. The question, would you have taken on the defense of adam and even after they were expelled from the garden of eden for eating the forbidden fruit. Im delighted to to have a milton reference to go. No milton was one of the four i already counted. If none of you read it i urge you to do it. No man ever wished it longer. I think milton gives the best possible defensive adamant he, especially adam who chooses to eat the apple live in a fallen world rather than live without eve. Which is the most beautiful love poem i have ever read. Of course its the snake that needs representation. We only have one side of that story. After all he got a bum rap. The sin is not in the tempting its in succumbing to the temptation. It was free speech. And thats a lesson for corruption of political officials as well. Its not in of tempting its in thes upcoming of it. All of the way in the back we have a handout. If you you could go back there. Any other hands . Im a High School Senior at the school in maryland. There is some discussion of due process and im ready my senior thesis on the state of freedom of speech and the First Amendment and universities. Particularly public universities. I was wondering if you could comment on the state of free speech in public universities and in particularly tonight due process . I have a section in the book where you make an analogy between the recently enabled yes means yes like california and the permission of the society. As a form of permit requirement for sex. Where you are presumed to rapist unless you can prove afterwards that you get consent from your partner at every stage and that she did not revoke it afterwards. Which is a plain violation of due process, it it undermines most basic process of the law which is who asserts the claim must prove it. Thats the origin of our principle of innocent until proven guilty. The reason for it is not a preference im just an arbitrary preference of our society, its written into the laws of logic that its impossible to disprove something truly. Therefore it makes no sense to put the burden of proof of the defendant to make sure and prove that he did not commit the crime. I think thats a problem. In regard to free speech i admit, i am astonished i am astonished by what is going on these university and college campuses. I did not see this coming. Im amazed by the degree to which it seems schools are cracking down on popular thought. Its a its a disgrace in a country that prides itself on freedom and has long prided itself on the rising generation to cherish and protect freedom. Reagan says we defend freedom here or it is gone. If we dont defend it then we must tell her grandchildren what it was that we found more precious than freedom. It is disgraceful that we are facing a situation where even the most innocent remark or Halloween Costume can get people in serious trouble. Universities are Government Entities and have a constitutional obligation to accord due process lights to students. I skate that by coin to school that receives no government college, hillsdale college. They have they have a disciplinary restriction on free speech. I think it is a shame and i dont talk about it, and that part at great length. Even in private schools there are contractual remedies that are often invoked by such organizations as fire, the foundation for individual rights in education. You can go go to my website and find two long speeches on the subject of free speech in academia. What is going on today is very different than what is going on in the 60s when there students are clamoring for free speech in berkeley california. Today the students are clamoring for safety and they cry bullies as it is who want to be sheltered from anything that makes him uncomfortable. A lot of people are familiar with fires at work and i will talk while the Student Press law center which i been a great fan of for many years. The next question. I have a question about the extent of government powers without crossing that line and asking for permission. So the first would be a registration requirement. Where you dont ask permission but your required to inform the government. And afterwards the last would be in a case where we do switch to permission less system. Say the government writes vague regulation allows you to ask the government whether such and such a thing would violate the law in advance and gives you safe harbor they say it was. Would you be going to many of the same problems in such a system like that. All at the other panelists go first. My remarks to be that you would, yes. Youre right to identify continuum in terms of degree of advance review, but most of the problem that identifies associates with the permit system apply across the board. Some partial response the question is what is the the standard for which you can be granted or denied a permit or be punished and have something happen to you afterwards. The difficulty in designing words that will express good they dont like good cause, but the problem is trying to find Something Else in various circumstances that will work in the context of a particular regulation. It could mean different for firearms than for someone to be discharged. In my Perfect World i wave my wanting get rid of the Permission Society. Theres still something with permit requirements and estimate Insurance Companies. Five to start a business i need insurance, Insurance Company comes to mises will ensure you, but you have to show us that you built your house out of fireproof material or Something Like that. In fact historically government often looks at the criteria that was invented by Insurance Companies to adopt its own criteria that it imposes in form of building permits. Thou be my solution. There are Market Alternatives and the benefit is there more flexible. Takes zoning for example, when i was invented and it was going to be rational landuse plan to planning. I have the businesses over here in the residences over there. It was immediately captured through rent seeking by people who wanted to exclude racial minorities and it was used to block that from happening which of course still goes on subtly. And if you look at the zoning map of manhattan today, it is every bit as crazy as it was a century ago. Except theres this difference that all the exemptions and grandfathering in and excuses those have all been triggered by particle decisionmaking instead of by the economic decisionmaking of the people who want to use the property and consumers in supply and demand. Instead its based on whether you know someone at city hall. Whether you whether you can persuade them to give you an exemption. The use of Insurance Companies especially in a competitive market allows for costbenefit analysis allows that to be brought in an irrational way. This is why roger has to am outside one on this. He cant resist. And is absolutely right. Now that you need it, what you you dont come to the rescue. We have time for one question. , the National Center for Public Policy research. Hold the microphone closer to you. Im with the National Service for Public Policy research. They reference the term ruling class, but he he seemed unclear as to what you meant by it. So could you tell us briefly what you meant by the ruling class . Were you referring to something what angela wrote about in his assessment a few years ago. I guess it has some parallels, what i mean is that when you have a system that we have a permission system you have to look up superiors and asked for their permission to do your thing. Those superiors, what happens is overtime that coalesces into a permanent overclass and the people have to ask permission coalesce into a permanent underclass. The kentucky would not allow new competition in the moving industry but existing moving companies could sell or give their licenses to others. Typically they gave or sold them to friends and family members. What you see happening is a class of people who have licenses in the class of those who dont. The more the the system turns into a permission requirement in the more separated and rigid those become. I think what happens over time as they tend to polarizer around racial distinctions and distinctions around socioeconomic status from the beginning point. If that continues to worsen what you end up this Something Like the old regime of france, or the 18th century england where it coalesces into insider status and those who dont. One of the great revolutions of the 18th century was to break this system down. Some have a right to british america, the job talk about economic liberty. Its illegal illegal for the columnists to make things out of iron. At that time they were required to send the iron to britain to be made into consumer goods and ship back to the colonies for use. He says to protect not men but machines in the island of great britain. What he means is this class of people who up Legal Protection protection so they dont have to compete fairly. The great idea of our Economic System as i was not have those classes. It should be up to personal merit and hard work. Theres another old word that captures this regime of thrilling class that extends well beyond the Government Officials and its called syndicalism. They have stars on their bellies and we dont again the permissions to society please avail yourself of the opportunity to pick up a copy outside. We be glad to sign it to you as well as his other book i want to take thank the Federalist Society and i want to thank cspan for joining us in this program. Lets head up to the George Yeager Conference Center for lunch. Before we do, give give a warm round of applause. [applause]