Financial Civil Disobedience

PART 1: Onion Futures

I bought The Futures by Emily Lambert because I wanted to know more about the Onion Futures Act, a United States law banning the trading of futures contracts on onions as well as motion picture box office receipts. This is a stupid law.

A futures contract is simply a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Because what is being promised is a commodity, the origin of what is being delivered doesn’t matter, as long at it meets certain requirements. It works great for financial instruments, for example, I might sell you a contract that says in six months I’ll deliver you 100 shares of KmikeyM. The amount you would pay for that contract is based on what you think 100 shares of KmikeyM would be worth in six months.

There is an NPR story about Onion Futures.

And it’s a fantastic tale because the choice to ban onion futures is such an obvious band-aid to the problem. If onion futures are bad, then there must be issues with pork bellies, soybeans, oil, and other futures. But all those, and more, are perfectly acceptable. The Onion Futures Act was just a political act to win favor.

Part 2: Civil Rights

In a 1964 New York Times article titled “Is It Ever Right To Break the Law” which asks:

Does the individual have the right—or perhaps the duty—to disobey the law when his mind, his conscience or his religious faith tells him that the law is unjust?

And then makes two points I really like:

  1. Resistance to law, justified in the name of higher moral principles like “freedom,” “equality” and “national independence,” has been a conspicuous feature of our period, and one of its most effective techniques of social action.
  2. Resistance to law is by no means confined only to supremely glorious or dangerous causes; nor is it used only by revolutionaries, underdogs or outsiders.

This second point is important to me, because it justifies caring about small things and not just the greatest threats to humanity.

The article then states that we can’t create a ironclad set of rules or criteria for when it is or isn’t justified, but hopes to present some principles that can act as guidance. And as the article points out, there is no legal defense in breaking a law, but perhaps there can be an ethical defense.

Unfortunately for me the article then goes on to argue that civil disobedience is serious business and shouldn’t be undertaken lightly. They were talking about some serious civil rights issues.

When looking for justifications for civil disobedience online you will come across a lot of middle school lesson plans. The idea of justice and and the sometimes not-overlapping legal system is being taught to the children of America. This makes sense because our entire nation is based on civil disobedience. We have to justify it in order to justify our own country.

One has not only a legal but a moral responsibility to obey just laws. Conversely, one has a moral responsibility to disobey unjust laws.

Martin Luther King, Jr.

3. Financial Civil Disobedience

The course of action seems pretty clear to me:

  1. The Onion Futures Act is unjust, so I have a moral responsibility to disobey it.
  2. I live in Los Angeles, California, where I can grow onions.
  3. I have a community of shareholders who could be interested in buying contracts on my future onion production.

Coming in 2020: Farmer Mike’s Onions.