Tag: Cato Unbound

Cato Unbound: Property, the State, Libertarians, and the Left

Talk between libertarians and the left usually follows one of two scripts, each of which frustrates me.

In the first script, both sides find things that they can safely dislike together – war, eminent domain, small business licensing – while carefully avoiding all the contentious areas. They’re a lot like that recently divorced couple at the Christmas party you’ve just attended, chattering as much as they dare… but mostly about the weather.

In the second script, someone yells “Taxation is theft!” or “You hate the poor!” and it’s not long before someone gets a drink thrown in their face. Perhaps also like that Christmas party you’ve just attended.

If I may say so myself, this month’s Cato Unbound has been quite different. The disagreements have been sharp, but well-informed and polite. (Even the libertarians are disagreeing among themselves; it’s a good sign that our movement isn’t just a set of dogmatic propositions, as some have claimed.)

As readers may already know, the December issue is about the role of property rights in social democracy. Discussants Daniel Klein, David D. Friedman, Ilya Somin, and Matthias Matthijs are arguing about whether social democracy entails the concept of overlordship – that is, the idea that the state must be the final, true owner of all property in a social democracy. If it’s not explicitly and by declaration, then at least it’s implicitly and by inference from its actions.

Klein shows that social democrats were once quite explicit on the point, and did indeed portray themselves as would-be overlords. Today they have to be cagier, but the claim remains logically implicit, he says.

Friedman argues that property has existed without the state, and perhaps even before the dawn of the human race. The state might claim any number of things, but we should judge it by what it actually accomplishes.

Somin suggests that today’s social democrats aren’t really overlords; they’re pragmatists without much in the way of theoretical principles at all.

And Matthijs actually is a social democrat. A proud one, by the look of it. He’s even European! Rights aren’t meaningful unless something enforces them, he argues, and the state does the work we all depend on. In this sense, all rights are artificial; all rights are created by the state. And he’s gamely defending his claims against a barrage of libertarian criticism.

Is your blood boiling? Or are you giggling behind your hand? Either way, grab yourself another egg nog, promise not to throw it at anyone, and go read the discussion for yourself.

Deirdre McCloskey at Cato Unbound

This month’s Cato Unbound features a lead essay by economist and polymath Deirdre McCloskey. Though she’s been professionally associated with the Chicago School, her ideas are anything but predictable, and she’s been one of the strongest critics of the mainstream of her discipline.

Economic activity, she argues, is driven primarily by forces outside of conventional economic theory. Sure, there’s supply and demand, and we all know the story, and there’s nothing terribly wrong with it, at least as far as it goes. Elaborations on the model aren’t wrong either – externalities, transaction costs, asymmetrical information, problems of coordination and public goods – these too are fine, as far as they go.

Where she disagrees is in her claim that a whole lot of things have to happen inside people’s minds before these things become terribly interesting to talk about. The decision to enter a marketplace, or to behave in ways that we might call “a market,” or even just the decision to look for economic incentives, all depend on some fairly deep value judgments. The creation of a highly market-driven society implies a commitment to a set of values.

What values are we talking about? Here’s a sample:

The Big Economic Story of our times has not been the Great Recession of 2007–2009, unpleasant though it was. And the important moral is not the one that was drawn in the journals of opinion during 2009 — about how very rotten the Great Recession shows economics to be, and especially an economics of free markets. Failure to predict recessions is not what is wrong with economics, whether free-market economics or not. Such prediction is anyway impossible: if economists were so smart as to be able to predict recessions they would be rich. They’re not. No science can predict its own future, which is what predicting business cycles entails. Economists are among the molecules their theory of cycles is supposed to predict. No can do — not in a society in which the molecules are watching and arbitraging.

The important flaw in economics, I argue here, is not its mathematical and necessarily mistaken theory of future business cycles, but its materialist and unnecessarily mistaken theory of past growth. The Big Economic Story of our own times is that the Chinese in 1978 and then the Indians in 1991 adopted liberal ideas in the economy, and came to attribute a dignity and a liberty to the bourgeoisie formerly denied. And then China and India exploded in economic growth. The important moral, therefore, is that in achieving a pretty good life for the mass of humankind, and a chance at a fully human existence, ideas have mattered more than the usual material causes.

A society that denigrates small businesses, small landowners, entrepreneurship, thrift, and innovation will see less of each. It will have different laws, customs, and institutions. Its resources will be used differently. Even its class structure will be different.

Societies that make a place for the artisan, the entrepreneur, the innovator – societies that see these people as valuable – will prosper. That’s the essence of the argument, anyway, and I’m only disappointed that we can’t present it in more detail (McCloskey is in the middle of a four-book series on this one very big idea).

Through the rest of the week, we have a lineup of notable response essayists, including U.C. Davis’s Gregory Clark, science journalist Matt Ridley, and Yale University’s Jonathan Feinstein. Be sure to stop by often, or just subscribe to our RSS feed.

Slippery Slopes and the New Paternalism

At Cato Unbound this month, economist and Cato adjunct scholar Glen Whitman discusses “soft” paternalism – the attempt to manage consumers’ choices in such a way that their “real” preferences come forward.

One often-cited example takes place in the cafeteria: Put fruit and healthy snacks up front, and people will be more likely to choose them. Put the chocolate cake first, and that’s what they pick instead. Paternalism, the argument runs, lies on a continuum, and some forms of it are really quite harmless. It’s not (or not only) a boot stamping on a human face forever. It’s also the nice lady at the cafeteria, who helps you pick out healthy food. Healthy food is what you really wanted anyway. So what could be wrong with that?

Whitman, however, turns the argument around a bit: Legislators, too, suffer from bias. What if paternalistic legislation proves sort of like that chocolate cake? By placing it up front, and by making it look appealing, legislators may choose it too often, and they may neglect the healthier – but to them less appealing – choice of freedom. What if a little paternalism now turns into a lot of paternalism later? And where are our “real” preferences, anyway? Whitman offers arguments for why a slippery slope may very well exist here, and examples of how the theory of soft paternalism has developed teeth in practice.

Joining him later this week will be noted economists Richard Thaler, Jonathan Klick, and Shane Frederick, for a discussion that should last through the next couple of weeks. Be sure to stop by often and see it develop.

We’re #1 !

Cato@Liberty is the #1 U.S. political blog available on Kindle. Or at least it’s the #1 U.S. blog in the “News, Politics, and Opinion” category, and the #3 Politics blog in the same category. What’s the difference? Beats me. So as far as I’m concerned, we’re #1.

Note that you can also get Cato Unbound on Kindle. And both the blog and Cato Unbound are available for the low low price of just 99 cents a month!

Of course, they’re free 24 hours a day right here at the Cato websites.

And don’t forget that all recent Cato books are available in Kindle and also as e-books from the Cato store.

Weekend Links

  • Health care insurance mandates: Why it is unconstitutional for the government to force you to purchase a product you don’t want to buy.
  • The end of globalization? Cato’s trade policy expert Daniel Griswold debates.
  • Doug Bandow on the minaret ban in Switzerland: “Swiss voters underestimated the impact on religious liberty when they voted to ban minaret construction. But Muslims whose nations persecute Christians, Jews, and other religious minorities have no standing to complain. The Islamic world needs to respect religious liberty at home before lecturing the West about intolerance, racism, hatred and Islamophobia.”

Tuesday Links

  • Why the Supreme Court should strike down the Public Company Accounting Oversight Board: “Imagine a government agency with the authority to create and enforce laws, prosecute and adjudicate violations, and impose criminal penalties. Then throw in the power to levy taxes to pay for all the above. And for good measure, make the agency independent of political oversight.”

Monday Links