Do States Have a Right to Secede?

Upon ratification of the U.S. Constitution, did the several states merge (part of) their sovereignty into a nation? Or, did they form a federation of independently sovereign states, joined together for convenience, but free to withdraw at will? Although the American Civil War put an end to the debate for some time, the issue is not dead nor is it irrelevant. Twenty-two percent of Americans, according to one poll, believe that states have a legal right to secession. However, it seems that none of these believers in secession taught my classes in primary and secondary school. My lessons about the Civil War left me with an impression that the Confederates were a senseless, if not evil people, who rebelled against the Constitution. After studying the issue more closely, I have concluded that, indeed, states have neither a moral, nor a legal right to secession. But, the all too common straw man representations of the Confederate views on secession, I think, are erroneous. The argument for secession deserves a proper rebuttal.

            My understanding of the argument in favor of a right to secession can be summed up in the following syllogism:

All sovereign states have the moral and legal right to secede from the Union at will. All of the states of the United States are sovereign states. Therefore, states have a moral and legal right to secede from the Union at will.

            Secessionists claim an extra-legal, moral right to secession as well as a legal right of secession implicit in the Constitution. They argue that the federal government is an agent of the states and that the states can withdraw their delegated support at any time. My main quarrel is with the second, minor premise of secessionists, which holds that the states are independent sovereigns.

            As a threshold matter, it is important to recognize a difference between a right of revolution and a right of secession. The right of revolution, as I view it, has important preconditions to its exercise and, revolution almost inevitably implies a war in which both sides are justified. The right to secession, on the other hand, is without significant preconditions and implies that the larger government has no right to use military power to force unity upon the seceded state. In my opinion, advocates of a right to secession sometimes conflate a right to revolution with the right to secession. Concerning the Civil War, the comportment of Congress and of President Lincoln did not come anywhere close to satisfying the preconditions of a right to revolution.[1] The South didn’t have a problem with the text of the Constitution nor was their quarrel about the political process (their constitution copies both substantially); the South disagreed with the policies ,which were properly enacted according to the Constitution. Using the terms of the Declaration of Independence, the “Form of government” was not oppressive or detrimental to the interests of the South, only the policies of the People playing by the rules of the Form of government. Regardless, in this essay, I focus on rebutting the argument that the states were independent sovereigns with a right to secede from the nation, not that they hadn’t the Lockean right to revolution.

The secession argument hinges on the claim that states were independent sovereigns after the ratification of the Constitution. The arguments for and against secession as taken from the text and history of the Declaration of Independence and Constitution seem to me, in their aggregate, ambiguous or slightly in favor of finding the states consolidated into one nation. Some of the documents and records speak of the states as independent while others take the view that the states “were independent not individually, but unitedly.” Some of the states ratifications seemed to side with the right to secession while others explicitly rejected it. Though none of the historical accounts are unambiguous. James Madison, known as “the Father of the Constitution” during his life, wrote to the New York Convention, “The Constitution requires an adoption in toto, and for ever.” Three states reserve the right to claim independence if the federal government “perverted” the Constitution to oppress the people. But, this looks more like a Lockean right to revolution than an Antebellum right to secession as it is pre-conditioned on perversion of the form of government and oppression. Regardless, the Declaration of Independence is not binding by itself because it does not describe the feelings and beliefs of the people in forming a Constitution to correct the problems of the Articles, it justifies revolution by proving that the preconditions to the right of revolution were satisfied.

My survey of the history and text of the Constitution also gives no clear response. But, Patrick Henry and others favored the Articles of Confederation over the Constitution largely because they envisioned that the Constitution would bind the states together and subject them to too powerful a federal government. Furthermore, Amendments to the Constitution are binding on states even if the state voted against it—isn’t that somewhat contrary to an implied right to secession? How could an agent of the states force new and unconsented policy upon the supposedly independently sovereign states?

The Constitution does not mention state sovereignty outright. Advocates of both sides, in my opinion, get too caught up in words and phrases like “perpetuity,” “People,” “States,” “compact,” “union,” and “United States.” Both sides seem to attribute more clarity to the words than their usage actually merits. That something is a compact between states does not imply that there is a right to secession any more than there is a right to secession from a contract or international treaty. A union need not be at-will. Indeed, contracts and compacts, in law, are assumed perpetual unless the text makes it clear that a more limited time frame was intended. And, in contracts, you can’t pull out because things don’t go how you had hoped.

The Supremacy Clause provides, “This Constitution, and the Laws of the United States . . . shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the constitution or laws of any state to the contrary notwithstanding.” Secessionists read the Supremacy Clause as if it has an exception for secession that is not in the text. The Constitution provides legitimate methods for altering the Constitution, the law, and judicial actions: by the vote and by advocacy in the marketplace of ideas. Implicitly then, other methods of changing federal policy—like secession—should be illegitimate.

The Ninth Amendment provides, “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” And, the Tenth Amendment provides, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the People.” The Ninth Amendment clarifies that the Bill of Rights is not an exclusive list of rights. The Tenth Amendment’s meaning is more enigmatic. Some members of Congress wanted the word “expressly” to appear in the Tenth Amendment. Ultimately, it was rejected because the Representatives thought that such a restriction would cripple the federal governments productivity.  The Tenth Amendment does not reject powers implied by the Constitutional provisions and by the Necessary and Proper Clause. James Madison seemed to view the Tenth Amendment as not guaranteeing any particular rights to the States, but as a truism or simple residuary clause. He said that the Tenth Amendment was “superfluous” except for emphatic effect. Furthermore, explicit powers of the federal government preclude state independence. How can you be an independent sovereign if you cannot make treaties, coin money, control naturalization, command armies, or lay taxes? You can’t. Thus, the arguments that appeal to the Ninth and Tenth Amendments in favor of a legal right to secession strike me as insufficient.

 Turning to policy considerations, it seems most reasonable to assume the Framers, as a whole, did not contemplate a right to secede from the constitutional compact without the consent of the other states. The reasons the Constitution was adopted to replace the weak Articles of Confederation was to ensure peace, facilitate commerce, and protect against collective-action problems and systematic races to the bottom. An alliance of states with a right to secede fails to accomplish any of these basic objectives, to the detriment of American wellbeing. Independent sovereign states that share a border have almost never maintained peace over the centuries. A right to secede gives rise to conflicts of interest antithetical to good policy and overcoming collective-action problems. It would increases the risks of factional struggle, reduces the prospects for compromise, raises the stakes of properly-made political decisions, introduces irrelevant considerations into the decisions (e.g. we can’t do what is right because South Carolina is getting uppity again), creates dangers of blackmail and other forms of exploitation, and generally endanger the prospects for long-term rule of law and self-governance. Lastly, free trade is compromised by a right to secession. It seems to me most plausible that there is therefore no right to secede from the constitutional compact.

The Antebellum supporters of a right to secession were not unreasonable; the case is a rather close call—but, in the end I believe the North was justified in enforcing the rule of law through warfare and that the South was not justified in seceding from the nation without meeting the preconditions to the right of revolution.

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[1] President Lincoln apparently had substantial respect for the Constitution. He consistently and often persuasively squared his positions with the Constitution, he cooperated with an intrusive congressional oversight committee. He sought congressional approval, at times, even when he probably did not need it. He stood for election when he was least popular and during a time of war and set up policies for an orderly transition should he be defeated. Dictators and tyrants simply don’t do these kinds of things. I am not convinced that the South was under the foot of any tyranny or oppression and therefore had no right to act extra-constitutionally to secede. John Locke and the Declaration of Independence affirm a right to revolution only where the “Form of government” leaves the people with not legitimate or plausible recourse and is tyrannical or oppressive. I sometimes see favorable arguments for secession quote supporters of a right to revolution to support a right to secession (e.g. James Madison); but the two things are quite separate.

The Academic Elites: Enlightened or Deluded?

           Image: Dave Cutler

 The “intellectual” class of academic elites has a powerful role in policymaking in this country. Although they have no direct responsibility for practical affairs—little or no first-hand experience, they wield ideas and words to advocate their values. Since their ideals are circulated through university teaching, the press, the media, scholarly journals, etc., their influence is disproportionately strong. Members of the class might even suppose that their disproportionate influence is deserved—after all, they did have the highest grades and test scores. Indeed, the elite class often writes abstrusely, which, perhaps paradoxically, enhances their influence through a halo effect (“I don’t understand it so it must be right”). So, is the influence of the academic elites for the better or worse?

            Success as an academic depends almost entirely upon one’s ability to publish and to be cited by other scholars. The pressure on professors to publish de-emphasizes the importance of effective teaching and leads to prolixity. The requirement to publish frequently favors overly critical and negative viewpoints and disfavors support for the status quo and tradition. Publications in the social sciences, liberal arts, and legal studies are, in effect, nihilistic. This is the case because it is easier (and more appreciated) for scholars to criticize and point out weaknesses of current policies and theories (and those of other postulating academics) than it is to publish support of tradition or to adequately promote a positive theory (this problem is most prevalent in “critical theory,” which doesn’t even try to assert any positive theory to replace what it criticizes). The tone of academic writing is decidedly negative-- which gives an impression that things are worse than they really are.

A recent study found that the ratio of Democrats to Republicans among humanities professors is eight to one. Perhaps largely, this is the case because liberals self-select to become professors while elite conservatives tend to go into practice. However, the hard liberal slant certainly favors liberal academics and the propagation of liberal thought. Although the left slant of academia is doesn't seem to block conservatives from entering the career field, they have more hurdles to clear to establish themselves in the profession once they get there. Scholarly discourse unduly proceeds on a level of liberal assumptions and liberal groupthink.  Academics, in general, become more leftist through their career due to a desire (or necessity) to conform with other academics and to join the "cutting-edge" conversation, which often proceeds on egalitarian assumptions. Many professors benefit financially from liberal politics (e.g. high tuition, cheap and easy student loans, high government employee benefits, etcetera). Some scholarly journals even have, at one point or another, discriminated against conservative authors in choosing who to publish (e.g. here). As a result of all these facts, radical egalitarian thinking disproportionately and for no adequate reason influences culture and politics; especially through the most impressionable among us, e.g. college students and less-educated cable news watchers.

That said, academic thought has had many beneficial results (even in the liberal arts—the hard sciences and engineering have had tangibly good effects on life, aren’t ideologically as slanted, and are not the subject of this post). Academia has had a constructive effect, for example, in bringing about civil rights for racial minorities and women. I would argue that American professors have encouraged the improving tolerance worldwide and even to a more peaceful world. Academia also serves to counterbalance some of the excesses of a market driven economy (e.g. environmental concerns). However, the beneficial results of academic discourse in these areas during the past century, in my opinion, would have worked just as well without the scholarly disregard for tradition, religion, and moral absolutes.

It is my contention, however, that academia has contributed to increased decadence characterized by an erosion of self-restraint and moral traditions of our society. Although individual scholars profess moral codes and many indeed write for good causes, in practice and in the whole, scholarly discourse and university curriculum promotes the notion that moral truths are arbitrary and subjective unless confirmed by scientific evidence. It encourages moral relativism. In place of the pillar of Judeo-Christian morality of American history, academics build a vapid chamber that echoes “tolerance” (which is frequently conflated with “acceptance”—or else you’re a bigot) and  “do what you want as long as you don’t hurt anyone else.” As G.K. Chesterton points out, “When people stop believing in God, they don’t believe in nothing, they believe in anything.” Too many classes today are cynical towards American tradition and religion. For one example, I had a professor who smugly chided Christopher Columbus for not having discovered America and for instituting slavery then, that very class, cited Nietzsche and called him a "discerning" thinker. Why not mention that the Carib indians Columbus enslaved practiced cannibalism and that Nietzsche suffered severe depression throughout his life? Or that Columbus, a true underdog, overcame many obstacles to discover America? The bad should be put in perspective with the good. Today, we are supposed to applaud everyone's religious and moral beliefs (unless your Christian) and everyone's heritage (unless you have European blood). Such a view is skewed. Regardless of creed, culture, race, or socio-economic background, the good and the bad of history and our heritage should be taught on equal footing and in proper perspective.

Academia, as a whole, is failing to bring about enlightenment; it shames the only solution to the collective action problem: faith and morality. It has utterly failed to supplant Judeo-Christian ethics as a source of community good will, temperance, freedom, and wisdom in America. Abraham Lincoln observed, “The philosophy in the classroom in one generation is the philosophy of government in the next.” Academics are leaving students with a confused moral compass. They prepare students only to deconstruct (and disrespect) tradition and the current situation through Marxist, feminist, Freudian, and other critiques. Students are not taught prudence, gratitude, or morality. As the radical egalitarian and morally relativistic project of academia gains traction in politics and culture, Americans will need to trade in more liberties for safety and more collective virtue for equality and “tolerance.” If you ask me, the bargain is a poor one.

Individual academic elites are both enlightened and deluded. But, the incentives and structure of the tertiary education system are in trouble. They need to be reworked if we are to best progress towards a more virtuous society. Superior teaching is equally important as research and publication. Schools should accommodate faith and morality. The heritage and positive theories within subject matter areas (the good) should be emphasized with critiques of the past and present (the bad). Institutional diversity in schools should be encouraged by national policy. Critical thinking is good; but so is gratitude and prudence. We need to align the education incentive structure to continue reaping the benefits of critical thought without incurring the costs of academic nihilism. 

Capital Gains Overview

INTRODUCTION-- WHAT ARE CAPITAL GAINS?

With all the recent talk about Mitt Romney's taxes and the impending "fiscal cliff," I realized that I, as well as many people, had only a rudimentary understanding of the taxation of capital gains. Indeed, I feel many retain some misinformation on the topic.

Long-term capital assets receive preferential tax treatment under the Internal Revenue Code. Long-term capital assets are any property held for more than a year EXCEPT for property that is the normal source of business income (e.g. inventory held for sale, business equipment, office space, etc.). Perhaps the most familiar form of capital gains are those associated with stock in companies. For those realizing capital gains whose marginal tax rate is 15% or lower, they pay NO tax on capital gains (0%). For those in higher tax brackets, capital gains are taxed at a maximum rate of 15%. However, the rates on capital gains are slated to go up to 20% on December 31, 2012 unless Congress does something to change it (part of the "fiscal cliff").

PROS & CONS OF PREFERENTIAL TAX TREATMENT ON CAPITAL GAINS

Justifications advanced for the preferential treatment of long-term capital assets are generally threefold:

1. Part of the gain realized on the sale of capital assets represents inflation. Thus, although the market price of property increases after ten years, the true value has not after factoring in inflation. Taxes should be lower on capital gains to take inflation into account.

2. Lower taxes on capital gains incentivizes responsible savings. 

3. Preferential tax treatment of capital gains makes for mobile capital and more efficient markets. Lower taxes on capital gains makes it easier for investors to take money out of stagnant or failing companies and put it into more promising businesses. Lower capital gains taxes helps socially beneficial or popular enterprises raise capital.

But, there are strong counterarguments too:

1. Differentiating gains and losses as capital or ordinary requires complex and hard to understand regulations. The administration of preferential treatment of capital gains, this argument goes, is too expensive and cumbersome to be worth it. Opponents of lower taxes on capital gains argue that there are better ways to accomplish the purposes of favorable capital gains treatment. For example, tax bases can be adjusted for inflation. 

2. The strongest repost of opponents is that favoring capital gains is just not fair. Only those with lots of capital with which to invest have capital gains. In 2010, the top 1% of income earners realized over 70% of the capital gains.

SOME SUGGESTIONS FOR CHANGE

Regressive Capital Gains Tax: Clayton Christiansen of the Harvard Business School, and others, suggest taxing capital gains regressively over time. In other words, the longer you hold on to an investment, the lower the tax rate should be on that investment. He believes that the relatively minor loss in tax revenues for the government ($38 billion in 2012) are well worth the increase in capital available for job creation and innovation. Indeed, many or probably most economists agree that lower capital gains increase revenues in the long run through quickened economic growth. But, this notion is challenged. The true effects of high and low capital gains rates are hard to measure because there are so many other historical factors that affect the state of the economy. Evidence seems to support and deny the benefits of low taxes on capital gains.

No Capital Gains Tax: There are many voices calling for the government to stop collecting taxes on capital gains entirely. This would have effects on businesses' choice of entity (i.e. pass-through entities like LLC or LPs may lose importance) which may require some legislative tweaking; but, would increase capital mobility and, in theory, make for a more efficient market.

No Preferential Treatment for Capital Gains: Another option would be to tax all gains at the ordinary rates. Whether a gain is realized on stock or through lending services, the tax on income would be the same. This would raise government revenues and make for more equality and result in more fairness. After all, why should income from labor be taxed more than income from investments in big corporations.

Comprehensive Change: Perhaps my idea would be to alter the entire structure of the Code. I would widen the base and flatten the taxes for all but those making more than $5 million per year except for income from patent and copyright royalties. The rate could then be steeper from there. I would do away with a number of counterproductive tax subsidies. I would cut spending and regulation. Perhaps I will elaborate my nascent tax plan in a forthcoming post.