Tag: Cato Unbound

Government Electric

The recession has given the government an excuse for major interventions into markets, and the word “bailout” is found in business section almost daily. While there are justified concerns over government bailouts of large corporations, big businesses cashing in on the economic stimulus plan have flown below the radar.

In an essay for Cato Unbound on the issue of corporations and markets, libertarian theorist Roderick Long states: “Corporate power depends crucially on government intervention in the marketplace.” This dependency is on full display in an insightful Wall Street Journal story on General Electric’s overt efforts to hitch its future to billions of stimulus dollars.

The article is worth reading from start to finish, but here are some snippets:

The government has taken on a giant role in the U.S. economy over the past year, penetrating further into the private sector than anytime since the 1930s. Some companies are treating the government’s growing reach – and ample purse – as a giant opportunity, and are tailoring their strategies accordingly. For GE, once a symbol of boom-time capitalism, the changed landscape has left it trawling for government dollars on four continents.

‘The government has moved in next door, and it ain’t leaving,’ Mr. [GE CEO Jeffrey] Immelt said at the International Economic Forum of the Americas in Montreal in June. “You could fight it if you want, but society wants change. And government is not going away.’

A close look at GE’s campaign to harvest stimulus money shows Mr. Immelt to be its driving force… Inside GE, he pushed his managers hard to devise plans for capturing government money.

By January, Mr. Immelt had become a leading corporate voice in favor of the $787 billion stimulus bill, supporting it in op-ed pieces and speeches. Reporters who called the Obama administration for information on renewable-energy provisions in the legislation were directed to GE.

When the stimulus package was rolled out, Mr. Immelt instructed executives leading the company’s major business units “to put together swat teams to get stimulus money, and [identify] who to fire if they don’t get the money,” says a person who heard him issue the instructions.

In February, a few days after President Obama signed the stimulus plan, GE lawyers, lobbyists and executives crowded into a conference room at GE’s Washington office to figure out how to parlay billions of dollars in spending provisions into GE contracts. Staffers from coal, renewable-energy, health-care and other business units broke into small groups to figure out “how to help companies” – its customers, in particular – “get those funds,” according to one person who attended.

It speaks poorly for American capitalism when one of the nation’s biggest economic engines is assembling “swat teams” to go after taxpayer money. Instead of corporate America trying to figure out what products and services to bring to the marketplace, big business is taking its cue from politicians and bureaucrats in Washington. This isn’t socialism; it’s state corporatism and it bodes ill for long-term economic growth.

See this essay for more on the problems with special-interest spending. Also see this essay on why the excuses for government interventions in energy markets fall short.

Robert Wright at Cato Unbound

This month’s Cato Unbound features Robert Wright, who offers us an excerpt from his new book, The Evolution of God. He looks at the possibility of religious tolerance from a game theoretic and evolutionary psychology perspective: Is there a fundamental “clash of civilizations” between Islam and the West? Or just a communication failure? Wright argues that we can work toward understanding by realizing the limits and biases of human moral reasoning:

You might not guess it to read the headlines, but by and large the relationship between “the West” and “the Muslim World” is non-zero-sum. To be sure, the relationship between some Muslims and the West is zero-sum. Terrorist leaders have aims that are at odds with the welfare of Westerners. The West’s goal is to hurt their cause, to deprive them of new recruits and of political support. But if we take a broader view—look not at terrorists and their supporters but at Muslims in general, look not at radical Islam but at Islam—the “Muslim world” and the “West” are playing a non-zero-sum game; their fortunes are positively correlated. And the reason is that what’s good for Muslims broadly is bad for radical Muslims. If Muslims get less happy with their place in the world, more resentful of their treatment by the West, support for radical Islam will grow, so things will get worse for the West. If, on the other hand, more and more Muslims feel respected by the West and feel they benefit from involvement with it, that will cut support for radical Islam, and Westerners will be more secure from terrorism.

This isn’t an especially arcane piece of logic. The basic idea is that terrorist leaders are the enemy and they thrive on the discontent of Muslims—and if what makes your enemy happy is the discontent of Muslims broadly, then you should favor their contentment. Obviously. Indeed this view has become conventional wisdom: if the West can win the “hearts and minds” of Muslims, it will have “drained the swamp” in which terrorists thrive. In that sense, there is widespread recognition in the West of the non-zero-sum dynamic.

But this recognition hasn’t always led to sympathetic overtures from Westerners toward Muslims. The influential evangelist Franklin Graham declared that Muslims don’t worship the same god as Christians and Jews and that Islam is a “very evil and wicked religion.” That’s no way to treat people you’re in a non-zero-sum relationship with! And Graham is not alone. Lots of evangelical Christians and other Westerners view Muslims with suspicion, and view relations between the West and the Muslim world as a “clash of civilizations.” And many Muslims view the West in similarly win-lose terms.

So what’s going on here? Where’s the part of human nature that was on display in ancient times—the part that senses whether you’re in the same boat as another group of people and, if you are, fosters sympathy for or at least tolerance of them?

It’s in there somewhere, but it’s misfiring. And one big reason is that our mental equipment for dealing with game-theoretical dynamics was designed for a hunter-gatherer environment, not for the modern world. That’s why dealing with current events wisely requires strenuous mental effort—effort that ultimately, as it happens, could bring moral progress.

New at Cato Unbound: Ten Years of Code

Code and Other Laws of Cyberspace, Lawrence Lessig’s seminal work on Internet law, turns ten this year. To mark the occasion, Cato Unbound has invited a distinguished panel of Internet law experts to discuss the book’s enduring significance: What did it get right? What did it get wrong? And where do we go from here?

Joining us will be Adam Thierer, Jonathan Zittrain, and Lawrence Lessig himself. The lead essay, up this morning, is by Declan McCullagh. Readers of Code will recall that McCullagh was called out by name in the book’s final chapter, and his “do-nothing” cyberlibertarian views were criticized at length. Ten years later, is it time to reconsider? Join us and find out.

Cato Unbound Update

This month’s issue of Cato Unbound has drawn an extraordinarily hostile response from a couple of mainstream online publications. Writing at Salon, Michael Lind inferred, mistakenly, that our interest in Seasteading and other radical libertarian projects was due to our disappointment that Republicans lost in the 2008 election. Because this issue was my idea, I feel I can speak effectively to the charge.

As I see things, it was basically impossible to cast either John McCain or Barack Obama as a libertarian. Neither of them shared the policy goals of the Cato Institute to any appreciable degree. Speaking as a private individual, I didn’t vote for either of them, and I don’t regret my choice. I found both Democrats and Republicans profoundly unappealing this election cycle.

This issue of Cato Unbound was motivated solely by my desire to see one particularly radical branch of libertarianism publicly confront its critics. I wanted to see how well it could hold up. Whether it stood or fell, the issue would have served its purpose. Electoral politics had nothing to do with it.

As our disclaimer makes clear, Cato Unbound doesn’t necessarily reflect the opinions of the Cato Institute. No endorsement is implied. Instead, we strive to present ideas and arguments that will be interesting to libertarians and also, if possible, to the general public.

Sometimes this means soliciting opinions that are very, very far from the American mainstream, and also far from our own views. It was a proud day for me when a prominent climate change blog suggested that Hell had frozen over – because the Cato Institute had published a piece by Joseph Romm. But that’s just the kind of place that Cato Unbound has always tried to be. We court controversy.

Some of Lind’s harshest barbs were reserved for contributor Peter Thiel, and for his suggestion that, demographically speaking, women have tended to oppose libertarian policies:

According to Thiel, one problem with democracy is that women have the right to vote:

Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women – two constituencies that are notoriously tough for libertarians – have rendered the notion of ‘capitalist democracy’ into an oxymoron.

What could more beautifully illustrate the pubescent male nerd mentality of the libertarian than Thiel’s combination of misogyny with the denial of aging and death? We had a nice John Galt libertarian paradise in this country, until girls came along and messed it up!

Thiel continues:

In our time, the great task for libertarians is to find an escape from politics in all its forms – from the totalitarian and fundamentalist catastrophes to the unthinking demos that guides so-called ‘social democracy.’

After considering the possible mass migration (if that is not a contradiction in terms) of libertarians to cyberspace and outer space, he opts for Fantasy Island:

The fate of our world may depend on the effort of a single person who builds or propagates the machinery of freedom that makes the world safe for capitalism. For this reason, all of us must wish Patri Friedman the very best in his extraordinary experiment.

Here’s an idea. Thiel could use his leverage as a donor to combine the Seasteading Institute with the Methuselah Foundation and create a make-believe island where girls aren’t allowed to vote and where nobody ever has to grow up. Call it Neverland. It would be easy for libertarian refugees from the United States and the occasional neo-Confederate to find it. Second star to the right, and straight on till morning.

Emphasis added. Owen Thomas at Gawker jumped to about the same conclusion, but with even more ad hominem.

Yet Thiel’s claim is not that women should be denied the vote. He writes only that women have tended to favor policies and candidates he opposes, and which he thinks are bad for the country. This seems – to my mind at least – regrettable, but also generally true. Thiel might have chosen his words more carefully, but it’s still quite a logical leap from what he actually wrote to demanding the end of women’s suffrage. Of course women should be able to vote. It’s ridiculous to suggest otherwise. We libertarians just need to do a better job of convincing them that voting in favor of individual liberty and free markets are the best choices they can make.

Consider that a Democrat might complain that white evangelical Christians don’t support enough Democrats, and that this works out badly for the country. No one would ever conclude that Democrats want to take away the votes of white evangelical Christians. We would all figure that they are just confronting a failure of practical politics, and perhaps trying to do better at realizing their particular vision of the world. That’s what Thiel was doing too, albeit not via electoral politics. Something about libertarians, however, seems to demand that some people read us as uncharitably as possible.

Seasteading proposes to create a demonstration of how a libertarian society might work. Its proponents believe that if it works, everyone will be drawn to it, including women. Will they succeed? I have some serious doubts, to be honest.

That’s why I set up this issue of Cato Unbound, and why I think the discussion has been valuable.