Topic: Political Philosophy

Hayek, Regulator?

Angus Burgin has written a valuable book The Great Persuasion, which accounts for an interesting, political science reading of the development of the Mont Pelerin Society and the progress of free market advocacy in the post WWII period. It is a thoughtful book, coming from a scholar who is definitely not a libertarian but at the same time understands and values the role of ideas in the political debate.

Professor Burgin has more recently published a rather shocking - at least to me - op-ed on Bloomberg.com. His point is aptly summarized by a slightly esoteric title: “As Republican Hail Hayek, Their Plans Advance Friedman”. Personally, I rejoice at seeing history of political thought to progress to the stage of political commentary. Plus, Hayek appears to be the good guy of the story: two cheers for Professor Burgin.

He aims to vindicate Hayek’s subtleties, from an inappropriate use of the Austrian economist as a rallying point. To this end, he goes back to one of the central points of his book. According to Burgin, within the Mont Pelerin Society and the classical liberal movement at large, we  havemoved from a Hayek-hegemony to a Friedman-hegemony. Whereas the first was more focused on first principles, the latter was more policy-oriented (see also this EconTalk with Russ Roberts). “The rise of Milton Friedman represents both the realization of Hayek’s dream of inspiring broad popular support for the benefits free markets have to offer, and the failure of his ambition to create a new social philosophy that would moderate the excesses of prior modes of market advocacy”. This is a controversial reading: for one thing, there are differences between Manchester and Chicago but also, quite frankly, the free market movement does not look like that much of a well ordered army, ready to follow his generals, at least to me.

My Heart Breaks and Tears Flow When I Read about Sequestration Being a Big Defeat for Lobbyists

I believe in the First Amendment, so I would never support legislation to restrict political speech or curtail the ability of people to petition the government.

That being said, I despise the corrupt Washington game of obtaining unearned wealth thanks to the sleazy interaction of lobbyists, politicians, bureaucrats, and interest groups.

So you can imagine my unfettered joy when reading about how this odious process is being curtailed by sequestration. Here are some cheerful details from story in Roll Call.

…sequester cuts…reflect not only Washington’s political paralysis but a bitter lobbying failure for K Street interests across the board. From university professors and scientists to cancer victims, defense contractors and federal workers, hundreds of advocacy, trade and labor groups have lobbied aggressively for months to head off the cuts. They’ve run ads, testified on Capitol Hill, staged demonstrations and hounded lawmakers, all to no avail. …the path forward could be a lobbying nightmare.

Reading the story, I recalled a Charles Addams cartoon from my childhood. Thanks to the magic of Al Gore’s Internet, I found it.

Slightly modified to capture my spirit of elation, here it is for you to enjoy.

Except I like to think I’m a bit more prepossessing than the Uncle Fester character, but let’s not get hung up on details.

What matters is that sequestration was a much-needed and very welcome victory for taxpayers. Obama suffered a rare defeat, as did the cronyists who get rich by working the system.

To be sure, all that we’ve achieved is a tiny reduction in the growth of federal spending (the budget will be $2.4 trillion bigger in 10 years rather than $2.5 trillion bigger). But a journey of many trillions of dollars begins with a first step.

William Letwin, R.I.P.

Economic historian William Letwin passed away, age 90, a few days ago. Professor Letwin belonged to a prominent family: his wife, Shirley Robin Letwin, was a philosopher and social critic, author of, among other things, of “The Pursuit of Certainty”  and of the very perceptive “The Anatomy of Thatcherism.” His son, Oliver, is a British politician and currently Minister of State for Policy. The Letwins were fond of social life and held a salon in their house—the most prominent guest being Michael Oakeshott, the dean of conservative philosophy, a mentor to Shirley and a colleague to William (who moved from Chicago to the London School of Economics).

Letwin was no libertarian, and is mostly overlooked by libertarian scholars. However, his work is well worth remembering—not least for his mastery of the English language. Letwin’s works are both insightful and a pleasure to read.

Libertarians should be better acquainted with at least two of his contributions: his book Law and Economic Policy in America, and his introduction to a 1975 edition of The Wealth of Nations. His little book, The Origins of Scientific Economics: English Economic Thought 1660-1776, is another jewel.

Law and Economic Policy in America is a learned work on the origins of the Sherman Act, sharply narrated with all their political economy implications. Letwin examined both the (rather stretched) common-law rationale for competition policy, and the politics of competition policy, in its genetic moment. As the saying goes, if you like laws and sausages, you should never watch either one being made. But perhaps watching how competition policy was (and is) made will be an eye-opener for some.

Letwin’s book is still a masterpiece in explaining how antimonopoly sentiment built up in American public opinion. 

Letwin distinguished between the attitude towards contract “in restraint of trade” as emerged through the complex working of common law jurisprudence, and the way in which a widespread skepticism towards ever-larger corporations grabbing the advantages of economies of scale at the detriment of smaller businesses smoothed the way for a very different kind of legislative measure. 

Crimes Against the State

William Wan writes in the Washington Post that in China

Citizens have been punished for crimes as trivial as writing an unflattering blog post about a local official.
Trivial indeed. Worse than trivial. Not crimes at all. Just normal speech in a free society.  But of course China isn’t a free society. Despite its moves toward markets and profits, China remains a one-party state still characterized by state ownership of the commanding heights of the economy. And that party is the Communist party, a party born to eradicate capitalism, a party that as it came to power in 1949 spoke of “the extinction of classes, state power and parties,” of “a socialist and communist society,” of the nationalization of private enterprise and the socialization of agriculture, of a “great and splendid socialist state” in Russia, and especially of “a powerful state apparatus” in the hands of a “people’s democratic dictatorship.” That’s a vision that doesn’t fit very well with “unflattering blog post[s] about a local official.” The problem is endemic to socialism. Robert Heilbroner, a distinguished American intellectual who called himself a socialist (though the New York Times declined to be so rude in its obituary), was admirably candid in explaining the place of dissent in a socialist society in a 1978 article in, well, Dissent:
Socialism … must depend for its economic direction on some form of planning, and for its culture on some form of commitment to the idea of a morally conscious collectivity… If tradition cannot, and the market system should not, underpin the socialist order, we are left with some form of command as the necessary means for securing its continuance and adaptation. Indeed, that is what planning means… The factories and stores and farms and shops of a socialist socioeconomic formation must be coordinated … and this coordination must entail obedience to a central plan… The rights of individuals to their Millian liberties [are] directly opposed to the basic social commitment to a deliberately embraced collective moral goal… Under socialism, every dissenting voice raises a threat similar to that raised under a democracy by those who preach antidemocracy.
That is, even an unflattering blog post about a local official threatens “the basic social commitment to a deliberately embraced collective moral goal” under the direction of “a powerful state apparatus” in the hands of a “people’s democratic dictatorship.” So we deplore China’s use of labor camps “as an expedient way to silence critics,” in the words of the Post, but we shouldn’t be surprised by it. Indeed, a front-page article in today’s Post on Hugo Chavez’s legacy refers to
the tenets of what Chavez called 21st-century socialism—intervening in the economy, putting state institutions under the executive’s control and corralling opponents and the press.
Sounds a lot like 20th-century socialism.

Letter to the WSJ: Armen Alchian’s Wise Economics

My letter to the editor was published in today’s Wall Street Journal. In response to the obituary of Prof. Alchian, the WSJ published on 20 February 2013, I wrote the following:

David R. Henderson’s obituary of the great economist and pedagogue Armen Alchian (“An Economist Who Made the Science Less Dismal,” Feb. 20) brings back fond memories from the summer of 1966, when I was one of Prof. Alchian’s students.

One of the many take-aways from Alchian’s 1966 lectures was his “95% Rule”—95% of what you read in professional journals that passes for economics is either wrong or irrelevant. Over the years I have verified this and regularly conveyed Alchian’s rule to my students.

Prof. Steve H. Hanke

The Johns Hopkins University

Baltimore

Prof. Alchian met his maker on 19 February 2013. He was 98 years old.

The Moral Authority of the State

If everyone judged the state and its agents by the same moral standards that they used for ordinary people, then nearly all of us would be libertarians. Judged in this way, essentially all governments behave appallingly.

“Yes,” comes the standard reply, “but we don’t judge governments by the same standards. The state is different, you see.”

Of course, it’s only fair to ask why that might be the case. This month at Cato Unbound, philosopher Michael Huemer does just that, addressing several of the standard reasons why the state purportedly has license to behave very differently from the rest of us. He finds them all lacking in one way or another.

Huemer’s essay draws on his new book, The Problem of Political Authority, in which he addresses nearly all of the most common justifications for treating the state as a moral agent with legitimate powers beyond those of the rest of us. For those who usually shy away from philosophy, Huemer is an intuitionist—he doesn’t build abstract systems of thought, which may or may not be convincing or even comprehensible. He begins instead with common, widely shared intuitions, in the hope that nearly all of us, whether utilitarians, deontologists, virtue ethicists, agnostics, or otherwise, will find his conclusions compelling.

To discuss with him, we’ve recruited a panel of distinguished thinkers of varying persuasions: George Mason economics professor Bryan Caplan, libertarian scholar-activist Tom G. Palmer, and Binghamton University philosophy professor Nicole Hassoun.

As always, Cato Unbound readers are encouraged to take up our themes, and enter into the conversation on their own websites and blogs, or on other venues. We also welcome your letters. Send them to jkuznicki at cato dot org. Selections may be published at the editors’ option.

Whip Illegitimacy Now (WIN)!

You just know a David Brooks column featuring the refrain, “my dream Obama would…” is going to be exasperating. And it is: especially when he suggests that his “dream Obama” could and should:

… talk obsessively about family structure and social repair. Every week we get another statistic showing how social and income inequality is dividing the nation. …. while childhood obesity is falling among kids whose parents graduated from college, it is still rising among kids whose parents have a high school degree or less.

Because of his upbringing, President Obama is uniquely qualified to talk about family structures. Traditional values are an investment in the young, and he could do what he can to restitch the social fabric.

It’ll be tough to “restitch the social fabric” when you need at least one hand free to bend the arc of history, but no doubt President Obama believes he’s up to the task. Still, why does David Brooks think it would help to have the president “talk obsessively about family structure and social repair”?

Barack Obama has been talking obsessively about capital-‘h’ Hope for nearly a decade, and during his administration, as with his predecessor’s, many more Americans think the country’s on the “wrong track” than think it’s moving in the “right direction.” (.pdf).

The evidence that the presidential “bully pulpit” reliably sways the public’s policy preferences is weak enough, as Ezra Klein documents here. What evidence is there that presidential jawboning about family structures changes anyone’s behavior? Birth rates for unmarried women went down in the era of Monica Lewinsky and Gennifer Flowers, resuming their upward trend under family values president George W. Bush. Do people really make their choices about marriage and family under the influence of presidential rhetoric or with an eye toward the example he sets?

The campaign Brooks envisions would be about as effective as Gerald Ford’s little Whip Inflation Now (WIN) buttons. Maybe it’s time for a little less magical thinking about our presidents.