Topic: Political Philosophy

On Following the Money

Thomas Frank writes in the Wall Street Journal,

Consider the poor Washington libertarian. Everywhere else in America his type is an exotic species, a coffee-shop heretic who quotes from “Atlas Shrugged” and steers every conversation toward Ron Paul or gold. Take him or leave him, he doesn’t care. He is his own master.

Not so the Beltway variety. Here, in the very home of the taxing, regulating leviathan, the libertarian is such a commonplace and unremarkable bird that no one gives him a second glance. Here he is a factotum of the establishment, a tiny voice in a vast choir assembled by business and its tax-exempt front groups to sing the virtues of the entrepreneur.

And therein lies his dilemma. Almost by definition, our young libertarian’s job is to celebrate the profit motive from the offices of a not-for-profit organization. He is subsidized, in other words, to hymn the unsubsidized way of life. Rugged individualism may be his creed, but a rugged individual he ain’t.

This is more than just an abstract problem, as I discovered last week at a panel discussion hosted by America’s Future Foundation, one of the lesser libertarian nonprofits in the city. The questions that night were whether nonprofit work constitutes a “real job” and if moving to the private sector was “selling out” — ideas well known to any liberal do-gooder.

No, let’s not consider the beltway libertarian. Or at least, let’s not consider him all alone. Instead, let’s look at a couple of money trails. Here’s the first one:

1. Consumers buy products because they want or need them.

2. An entrepreneur, who has supplied these products, collects the money, which the consumer has given of his own free will.

3. The entrepreneur gives some of this money to his investors, some to his employees, and some he keeps for himself as a just reward.

4. The entrepreneur, his investors, or his employees give a portion of that money to a libertarian think tank like the Cato Institute. (Nearly all of Cato’s money comes from individual donors, not corporations or foundations.)

5. I work for the Cato Institute, and it pays me a salary.

There’s something remarkable about this money trail: every step is voluntary. Every step is the product of a private, individual decision. None of them are coerced.

Maybe I don’t live on the shores of Walden Pond. But it’s still hard to see how my individualism has been compromised. I might easily change my career direction; my boss might decide he doesn’t need my services; the donors might get fed up with Cato and stop giving; the entrepreneur might liquidate his business; the consumers might stop buying the products. At every point in the chain, the individual is in charge, and the same would be true if my own place in the chain were at position #3 rather than position #5. Either way, it’s all voluntary, and my libertarian conscience is clean.

Yes, yes, I might make more money elsewhere. But money is just one dimension of personal satisfaction. Although money is important, other values are worthwhile too. There’s nothing wrong about wanting a job that is personally satisfying, or that is intellectually stimulating, or that furthers your vision of the good. A libertarian appreciates the value and purpose of money (possibly more than most), but he’s allowed to have other values, too. It’s only cartoon plutocrats who refuse to care about anything else.

Now let’s look at another money trail. I have a hard time thinking it’s the better one:

1. The government takes your money in taxes. If you don’t pay, you’ll find an unscheduled appointment on your agenda, possibly involving men with guns.

2. The government turns this money over to “nonprofits.” Or perhaps to plain old profit-seeking corporations.

Bit of a difference there, isn’t it?

Cato does not accept any government money, and if it ever does, I suspect that many of us will exercise our voluntary choice and leave the organization. This is the money trail that libertarians should — and do — reject. Once again, my conscience is clean. This is also why Frank gets it wrong when he writes,

Private-sector Washington is one of the wealthiest places in America. Public-service Washington lags considerably behind. The chance of ditching the one for the other is what accounts for everything from the power of K Street to the infamous “revolving door,” by which a public servant takes a cushy corporate job after engineering some extravagant government favor for the corporation in question — or its clients.

The libertarian nonprofits that line the city’s streets often serve merely to rationalize this operation after the fact, giving a pious shine to the policies that are made in this unholy manner.

I don’t deny that it happens. But I do deny that these people are libertarians, whatever they happen to call themselves. One thing that separates the Cato Institute from many other public policy shops is that it has been perhaps the loudest in denouncing exactly these sorts of abuses. Here’s hoping we keep at it.

Will 2009 be 1965?

Forty four years ago today Lyndon Baines Johnson traveled to Ann Arbor, Michigan, to deliver a speech that outlined the vision that would guide his administration. The speech may be read profitably today. 

LBJ began that spring day by stating a goal: “The purpose of protecting the life of our Nation and preserving the liberty of our citizens is to pursue the happiness of our people. Our success in that pursuit is the test of our success as a Nation.”

The statement may be usefully compared to some earlier words about the purposes of American government: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” These words from the Declaration of Independence reflect the individualistic, natural rights philosophy of the American founders.

LBJ’s words reflected a fundamentally different philosophy, Progressivism. Individuals do not pursue happiness within a framework of rights; government pursues happiness for them or rather for “our” people. Johnson noted two means to that collective end: the life of our Nation and the liberty of our citizens. The first is tautological, the second is revealing. The liberty of the individual is not a goal of government; it is rather the means for the collective pursuit of happiness.   The Great Society would realize that collective happiness. In the Great Society , “men are more concerned with the quality of their goals than the quantity of their goods.” They put aside “unbridled growth” and “the demands of commerce” to fulfill “the hunger for community.” Mere business and trade do produce a “soulless wealth” that is far short of national aspiration.  

The reader who sees in LBJ’s words as call to secular spirituality through government are not far wrong. He said to the students and faculty of the University of Michigan: “You have the chance never before afforded to any people in any age. You can help build a society where the demands of morality, and the needs of the spirit, can be realized in the life of the Nation.” The speech ends with the hope of a “new world,” a remaking of the nation.

Ironically, in light of what actually happened later, LBJ also claimed that “The solution to these problems does not rest on a massive program in Washington, nor can it rely solely on the strained resources of local authority. They require us to create new concepts of cooperation, a creative federalism, between the National Capital and the leaders of local communities.” Over the next decade, federal spending tripled.

Like LBJ, Barack Obama sees in politics and governing the possibility of secular transcendence. He is a far better orator than LBJ was, and his skills might well bring a third phase of Progressivism to the United States in 2009.

However, there is room for doubt. Obama lives in a different world than LBJ.

In 1965, Democrats held more than two-thirds of both chambers of Congress. As LBJ said on his inaugural night, “We can pass it all now.” Democrats may gain seats in Congress this year, but they will not have the same majorities LBJ had. President Obama will not say as LBJ did:“We can pass it all now.”

LBJ began his quest for the Great Society by cutting taxes. Obama will have to raise taxes to pursue his dreams. Excuse me, “our” dreams. Once “hope” and “change” cost real money, Obama may find Congress less willing to dream.

1n 1964, 76 percent of Americans trusted the federal government to do what is right almost always or most of the time. The Pew Research Center for the People and the Press recently reported that ”positive views of the federal government are at their lowest point in at least a decade. Americans may not be in the mood for a new crusade to change the world through collective coercion.

People skeptical of the beneficence of the federal government have reasons to be pessimistic in 2008. Neither candidate shares their skepticism fully. But the spring of 1964 was much worse. Barack Obama may expect to renew the left’s quest for a secular spirituality rooted in politics and government, a religion to replace the older faiths. But 2009 is unlikely to be 1965.  

A David Brooks Two-fer!

David BrooksCouple of notes on recent David Brooks-related program activities. First, he calls the small-government wing of the conservative movement un-American. No, honestly, he does:

At the end of [1995], when the radical conservatives in the Gingrich Congress shut down the federal government, they learned that the American public was genuinely attached to the modern state. “An anti-government philosophy turned out to be politically unpopular and fundamentally un-American,” Brooks said. “People want something melioristic, they want government to do things.”

Then, in today’s column for the Times, Brooks points out how screwed up the legislative process is, a function of myriad rent-seekers, lobbyists and special interests. His foil? The farm bill:

Interest groups turn every judicial fight into an ideological war. They lobby for more spending on the elderly, even though the country is trillions of dollars short of being able to live up to its promises. They’ve turned environmental concern into subsidies for corn growers and energy concerns into subsidies for oil companies.

The $307 billion farm bill that rolled through Congress is a perfect example of the pattern. Farm net income is up 56 percent over the past two years, yet the farm bill plows subsidies into agribusinesses, thoroughbred breeders and the rest.

The growers of nearly every crop will get more money. Farmers in the top 1 percent of earners qualify for federal payments. Under the legislation, the government will buy sugar for roughly twice the world price and then resell it at an 80 percent loss. Parts of the bill that would have protected wetlands and wildlife habitat were deleted or shrunk.

My colleagues on The Times’s editorial page called the bill “disgraceful.” My former colleagues at The Wall Street Journal’s editorial page ripped it as a “scam.” Yet such is the logic of collective action; the bill is certain to become law. It passed with 81 votes in the Senate and 318 in the House — enough to override President Bush’s coming veto. Nearly everyone in Congress got something.

Funny thing, though: I bet I can think of a much, much better example of what Brooks is driving at here. After all, at least there was broad elite consensus that the farm bill was depraved. But where could we find an example of a legislative product where literally all interests are tied up in rent-seeking and resource extraction? Ah, right:

In current national security politics, there is debate, but all the interests are on one side. Both parties see political reward in preaching danger. The massive U.S. national security establishment relies on a sense of threat to stay in business. On the other side, as former defense secretary Les Aspin once wrote, there is no other side. No one alarms us about alarmism. Hitler and Stalin destroyed America’s isolationist tradition. Everyone likes lower taxes, but not enough to organize interest groups against defense spending. A scattering of libertarians and anti-war liberals confronts a bipartisan juggernaut. The information about national security threats comes to Americans principally from people driven by organizational or electoral incentives toward threat inflation.

Physician, heal thyself. Yet more evidence the that contemporary Right offers nothing of value to libertarians.

Can You Trust Cato?

After noting that “some of my best friends work for think tanks,” The Atlantic blogger Megan McArdle contends that these organizations cannot be trusted because the purported ideological homogeneity of their employees renders them intellectually blindered, lazy, and compromised. Since Cato was apparently the first think tank Ms. McArdle thought of in the context of school choice (and I’m not even one of her best friends!), I couldn’t resist the temptation to respond.

All human institutions are flawed (I used to work for one of the most successful corporations in the world, and it was no exception), but I haven’t noticed the crippling “groupthink” that McArdle warns of in my time at Cato. I have had stimulating debates with colleagues on a host of issues, including education policy. As it happens, I’m not alone. Cato made waves in the blogosphere not so long ago due to a very public disagreement among its staff over domestic surveillance law and policy. One of the bloggers who noted this lack of ideological groupthink at Cato was… Megan McArdle. Cato scholars have at times publicly disagreed on high profile foreign policy questions as well.

Getting to the heart of her argument, though, I’m puzzled as to why someone conversant with public choice theory would imagine that think tanks are categorically different from other sources of scholarship when it comes to ideological bias. McArdle contends that donors would balk if think tanks produced publications at odds with the donors’ preferences. Some do. Cato has in fact lost donors on a number of occasions for this reason. But this incentive system is not fundamentally different from what obtains in the academic world. In academia, career advancement is tied to journal publication, but journal editors and peer reviewers have their own biases (as do academic authors themselves), and these are felt in their decisions of what to publish. Hence, there is pressure on academics to conduct studies they expect to be more rather than less publishable.

The most notable difference between academic and think tank papers is that naive some readers grant academic papers an unwarranted presumption of impartiality. The same applies to government publications. For think tanks, the absence of that presumption means that our work is more stringently checked by the media when the ideological flavor of the medium is different from the presumed slant of the think tank. Since there are few libertarian media outlets, Cato output is subjected to more extensive fact checking by the media than is the typical academic paper, government pronouncement, or the media’s own reporting. For example, I recently wrote an op-ed noting that the press grossly understates per pupil spending in DC public schools. In making my case, I observed that local media had claimed “$8,322 is spent for each student” and then I showed that when the district’s total budget is divided by its enrollment the real figure is over $24,000 per pupil. The editor of the paper publishing my piece asked for my source for the inaccurate media figure, claiming that his own paper knew better. I pointed him to an article in his own paper that used it (among others).

This is not unusual. It is far more common that we at Cato point out inaccuracies in the mainstream media and in government claims and reports than the other way around. 

In a world in which everyone who collects and analyzes data invariably is subject to complex economic pressures, there is only one reliable path to the truth: read their publications critically and assess them for yourself, on their intrinsic merits. In cases where you lack the expertise to critically evaluate a study yourself, the next best thing is probably to seek out a proxy reviewer – an expert in the field whose conclusions you have reason to trust. But simply dismissing an entire category of scholarly institutions due to a misplaced faith in the impartiality of the other categories is an epistemological error.

Harold & Kumar Discover the Spirit of America

Four years ago the movie Harold & Kumar Go to White Castle was celebrated mostly as a “stoner” movie: smart young Asian guys smoke pot and get the munchies. When I finally got around to watching it, it was funnier than I expected. And very near the end of the movie, after an all-night road trip in which they encountered more obstacles than Odysseus, when Harold finally gives up and says he can’t make the last leg of the epic journey to White Castle, came this wonderful speech from Kumar:

So, you think this is just about the burgers, huh? Let me tell you, it’s about far more than that. Our parents came to this country, escaping persecution, poverty and hunger. Hunger, Harold. They were very, very hungry. They wanted to live in a land that treated them as equals, a land filled with hamburger stands. And not just one type of hamburger, okay? Hundreds of types with different sizes, toppings, and condiments. That land was America! America, Harold! America! Now this is about achieving what our parents set out for. This is about the pursuit of happiness. This night … is about the American Dream! Dude, we can stay here, get arrested, and end our hopes of ever going to White Castle. Or, we can take that hang glider and make our leap towards freedom. I leave the decision up to you.

Escaping persecution, poverty and hunger … to find ample food and unlimited choices … the pursuit of happiness … the American Dream. Yes, I think writers Jon Hurwitz and Hayden Schlossberg were on to something.

And now comes the sequel, Harold & Kumar Escape from Guantanamo Bay. After another improbable road trip, the fugitive youths literally drop in on George W. Bush’s Texas ranch. In the increasingly fantastic plot, the president invites them to join him in hiding from the scary Cheney, shares his pot with them, and then promises to clear up the unfortunate misunderstanding that landed them in Guantanamo Bay. An uninhibited but still skeptical Kumar says, “I’m not sure I trust our government any more, sir.” And President Bush delivers this ringing libertarian declaration:

Hey, I’m in the government, and I don’t even trust it. You don’t have to trust your government to be a patriot. You just have to trust your country.

Harold & Kumar: more wisdom than a month of right-wing talk radio. Hurwitz and Schlossberg get what America is about.

Back to the Past

Lyndon Baines Johnson, May 22, 1964, at the University of Michigan:

The challenge of the next half century is whether we have the wisdom to use that wealth to enrich and elevate our national life, and to advance the quality of our American civilization…. For in your time we have the opportunity to move not only toward the rich society and the powerful society, but upward to the Great Society….

The Great Society … is a place where the city of man serves not only the needs of the body and the demands of commerce but the desire for beauty and the hunger for community…. It is a place where man can renew contact with nature. It is a place which honors creation for its own sake and for what it adds to the understanding of the race. It is a place where men are more concerned with the quality of their goals than the quantity of their goods….

Worst of all, expansion [of the economy]  is eroding the precious and time-honored values of community with neighbors and communion with nature. The loss of these values breeds loneliness and boredom and indifference….

The solution to these problems does not rest on a massive program in Washington, nor can it rely solely on the strained resources of local authority. They require us to create new concepts of cooperation, a creative federalism, between the National Capital and the leaders of local communities….

For better or for worse, your generation has been appointed by history to deal with those problems and to lead America toward a new age. You have the chance never before afforded to any people in any age. You can help build a society where the demands of morality, and the needs of the spirit, can be realized in the life of the Nation…Will you join in the battle to build the Great Society, to prove that our material progress is only the foundation on which we will build a richer life of mind and spirit?…There are those timid souls who say this battle cannot be won; that we are condemned to a soulless wealth. I do not agree….”

David Brooks, May 9, 2008, everywhere:

It used to be that American conservatives shaped British political thinking. Now the influence is going the other way….

[T]he central debate of the 21st century is over quality of life. In this new debate, it is necessary but insufficient to talk about individual freedom. Political leaders have to also talk about, as one Tory politician put it, “the whole way we live our lives.”…They’re trying to use government to foster dense social bonds…. They’re offering something in tune with the times….

American conservatives won’t simply import this model. But there’s a lot to learn from it.”

Question: How do these two differ?

Answer: They don’t. Both “hunger for community.” Both condemn a “soulless wealth.” Both promise decentralization. Both believe in the end that community can and should be created by coercion.

More, Um, Praise for Medicare Meets Mephistopheles

Nearly two years after its release, David Hyman’s satire Medicare Meets Mephistopheles is still generating reviews – and controversy. 

In the April 2008 issue of the Michigan Law Review, Michigan law professor Jill Horwitz raves:

Hyman is extraordinarily knowledgeable about health care regulation and his exposition is succinct. The book is filled with informative and accurate summaries of Medicare’s complicated program design and related laws. The summaries of fraud and abuse law, for example, make my heart sing. I’ve seldom seen such an accessible and accurate primer.

It would be a stretch, however, to claim that Horwitz and Hyman see eye-to-eye.  Horwitz concludes her 19-page review thus:

Medicare Meets Mephistopheles is a terrific overview of a troubled system, but a missed opportunity to help reform Medicare. Providing health care fairly and efficiently is a complicated process that necessarily involves a heavy dose of government. Libertarian railing against big government, regulation, and all lefty foolishness that market proponents despise doesn’t get one very far in determining how to get health care to 300 million people. In the end Hyman doesn’t offer any realistic alternative to this government-regulated muddle because, God knows, his plans are unacceptable anywhere but in hell.

Ay caramba!