Topic: Political Philosophy

Solow’s Slippery Slope

By
Alberto Mingardi

Angus Burgin’s The Great Persuasion is a good book on how a handful of brave intellectuals “reinvented free markets” after the Great Depression. Readers of Cato@liberty may be familiar with this story. The founding of the Mont Pelerin Society, how Ludwig von Mises’s intellectual exile in the United States happened to breed a new generation of Austrian scholars, the establishment of the first free-market think-tanks (FEE by Leonard Read in the U.S., the IEA by Harris and Seldon in the UK) are part of the narrative of the revival of classical liberalism after a long period in which economics equated with Keynesianism. This story caught the eyes of outsiders to the libertarian movement too: the  books by Burgin and Masters of Universe , a far less intellectually polished work by Daniel Stedman Jones, are interesting, recent examples.

Burgin’s book was reviewed in The New Republic by heavyweight  Nobel Laureate Robert Solow. Solow’s review is interesting not so much because he affirms a point of view which is skeptical of the virtues of the free market - but because he does so in a rather peculiar way.

He does so by distinguishing between “a Good Hayek and a Bad Hayek”. The first was “a serious scholar who was particularly interested in the role of knowledge in the economy (and in the rest of society)”. The central insight of the Good Hayek made its way in the economic profession, according to Solow: “all economists know that a system of competitive markets is a remarkably efficient way to aggregate all that knowledge while preserving decentralization.”

But, Solow maintains, a “Bad Hayek emerged when he aimed to convert a wider public”. This “Bad Hayek” could be credited with the idea statism puts in place “a slippery slope,” so that state intervention almost inevitably calls for more state intervention, and thus the establishment of a national health service is nothing but the first step towards full fledged totalitarianism. “The Road to Serfdom was a popular success but was not a good book”, writes Solow, arguing that it set the apocalyptic tone which characterizes today those that he rather amusingly mocks as “Tea Party Hayekians.” The fact that “natural allies such as Knight and moderates such as Viner thought that he had overreached suggests that the Bad Hayek really was there in the text.”

If ever was a critic of determinism, that was Hayek. In The Road to Serfdom (as a quick reading of the introduction would suffice to establish) he did not maintain that interventionism inevitably and automatically lead to totalitarianism. By his own words, he was not “arguing that these developments are inevitable. If they were, there would be no point in writing this.” What Hayek wanted to explain was that “it would be a mistake to believe that the specific German rather than the socialist element produced totalitarianism. It was the prevalence of the socialist views and not Prussianism that Germany had in common with Italy and Russia”. A point that by now should be clear enough.

The founders of the Mont Pelerin Society, to quote Burgin, “perceived their roles as public intellectuals to be one of precipitating long term ideological change”. Being a public intellectual means to offer a narrative. Robert Solow may be right is in downplaying the influence of the Mont Pelerin Society, whose main function was in part “to maintain the morale of the free-market fellowship.” In years in which free-market leaning scholars were as rare as black swans, dispersed in a number of universities all over the world, and with no Facebook or Twitter to keep on a conversation at all time, that was in itself quite an achievement. (Tyler Cowen has sharply responded to Solow on the importance of  the Mont Pelerin Society.) But the central point of Solow’s critique is the insinuation that one cannot be a serious scholar and a libertarian at the same time.

Now, this argument leads indeed on a slippery slope. As Solow states, for a serious modern reader, the rhetoric is irrelevant or, worse, misleading, or, even worse, intentionally misleading. Everyone has known for a long time that a complicated industrial economy is either a market economy or a mess. The real issues are pragmatic.” The Milton Friedmans of this world find their place in the sun by manufacturing rhetorical devices that are then put at the disposal of political players - but this is more a demeaned political theater, than the glorious “war of ideas.”

Apparently, being a “serious modern reader,”  for Solow,  requires reducing all policy problems to “fine tuning”. A good social scientist should stick with that, without turning into his bad twin because of open advocacy of a serious and consistent set of ideas.

Maintaining that “ideas have consequences” does not explain everything - but it does explain something. The understanding of the basic institutions of the free society - or rather, the lack thereof - gets crystallized in fundamental prejudices shared by people. Public intellectuals are a strange kind of thermometer, that at the same time signals what are the prevalent views in society but also can preach and act to change the temperature.

After all, it was Robert Solow’s friend and fellow Nobel Laureate, Paul Samuelson, that famously said “I don’t care who writes a nation’s laws — or crafts its advanced treatises — if I can write its economics textbooks.” The debate on ideas enrich our societies - but it cannot take place, if one allows himself the luxury of considering others’ ideas as mere political stratagems, rather than complex world views worth examining. A slippery slope indeed.

Topics: 
General, Political Philosophy

The ‘Happy Planet Index’ Ranks Venezuela, Albania, and Cuba Far Higher than the United States

By
Daniel J. Mitchell

Rankings can be very useful tools, assuming the methodology is reasonable and the authors use robust data. I’ve cited many of them.

But I’ve also run into some really strange rankings since starting this blog, some of which are preposterous and others of which are rather subjective.

That last one was good for my ego. My only comment is that I wish that I had real influence.

Speaking of preposterous rankings, I have something new for the list.

There’s a group that puts out something called the “Happy Planet Index,” which supposedly is a “global measure of sustainable well-being.”

But it’s really an anti-energy consumption ranking, modified by life expectancy data along with some subjective polling data about lifestyles. And it leads to some utterly absurd conclusions.

Here’s their map of the world. All you really need to know is that it’s supposedly bad to be a red country.

 

I’m perfectly willing to agree that people in Afghanistan and Angola are not part of a “happy planet,” but do they really expect people to believe that the United States is in the bottom category?

I’m not being jingoistic. Yes, I am a patriot in the right sense of the word, so I would like the United States to be at the top of most rankings.

But my job is to criticize bad public policy, so my life would be rather dull if the crowd in Washington adopted a much-needed policy of benign neglect for the economy.

My real gripe is that some of the world’s main cesspools get high rankings. The United States is 105th according to the clowns who put together the rankings, while Cuba somehow came in 12th place.

Venezuela also ranks near the top, and other jurisdictions that score at least 50 places above America include Albania, Pakistan, Palestine, Iraq, Moldova, and Tajikistan.

It’s not just that those nations all rank above the United States. They also are ahead of Sweden, Canada, Australia, Iceland, Singapore, and Hong Kong.

And I’d rather live in any of those nations than live in any of the ones I listed that got good scores according to the poorly named Happy Planet Index.

Heck, I’d also prefer to live in some of the nations that score even lower than the United States, such as Belgium, Denmark, Estonia, or Luxembourg.

The Luxembourg ranking is particularly absurd. It is down near the bottom, with a ranking of 138 and trailing such garden spots as Burkina Faso and the Congo.

But it also happens to be one of the world’s richest nations according to World Bank data, in part because it is a very good tax haven.

But the nuts who put together the Crazy Planet Index give Luxembourg the second-to-worst ranking for its “ecological footprint,” and I guess you’re supposed to be unhappy if you have enough wealth to use a lot of energy.

Gee, too bad Luxembourg couldn’t be more like the nations that get the highest rankings for their “ecological footprint.” The people of Afghanistan and Haiti must be very, very happy about that high honor.

Topics: 
General, Government and Politics, International Economics and Development, Political Philosophy

You Can’t Go Home Again, cont’d

By
Brink Lindsey

In an earlier post criticizing Paul Krugman’s “Twinkie Manifesto,” I tried to make a simple point: just because economic policies produced good results at an earlier stage of economic development doesn’t mean they’ll work well today.

Now enter Brad DeLong and Matt Yglesias, two of the smartest progressives in Blogland, who in an effort to tweak me make exactly the same mistake Krugman did.

Let’s back up and review. Here was Krugman’s argument: (a) back in the ’50s the top tax rate was 91 percent, union density was high, and the economy boomed while incomes converged; (b) therefore, a return to dirigisme would be good for both growth and widely shared prosperity. I responded that correlation ain’t causation: the early post-WWII decades were an economic Golden Age, but that’s because the conditions for growth were so favorable that the country prospered despite the bad policies Krugman now longs for.

In identifying some of those favorable conditions, I mentioned, among other things, (a) the opportunities for catch-up growth in the South and West, facilitated by big advances in transportation (e.g., the U.S. highway system built during the ’20s and ‘30) and (b) the rapid accumulation of human capital as reflected in soaring high school and college graduation rates.

Yes, both of these factors involved public investment at either the local, state, or federal level, which led Brad and Matt to pounce. See, they argue, Big Government was good for growth!

First of all, I’m a Hayekian classical liberal, which means I’m fine with a government role in funding roads and schools. So Brad and Matt’s attempt to play “gotcha!” misses the target.

But back to the main point: what are the contemporary policy implications of the fact that some public investments in the first half of the 20th century – when government spending levels were much lower, and the economy was much poorer and less advanced – aided growth? As economists Vito Tanzi and Ludger Schuknecht show, returns to government spending in terms of social welfare declined rapidly in the second half of the 20th century. And now we’re in the second decade of the 21st. Hey Big Government, what have you done for me lately?

Let’s look specifically at education and infrastructure. Both sectors are dominated by government, and both are hot messes of waste and mismanagement. The way forward in both sectors will involve greater reliance on competition and private sector involvement, not less.

So sorry, Brad and Matt, I know it’s Thanksgiving and all, but you can’t go home again either.

Topics: 
Government and Politics, Political Philosophy

The Republican Problem

By
David Boaz

Today POLITICO Arena asks:

 Does the GOP need to loosen ties with Fox? Limbaugh?

I offered a somewhat different response from Roger Pilon’s:

The first thing Republicans should do is stop reading only the conservative media. The conservative echo chamber apparently convinced them that Romney was winning the election. Romney himself is reported to have been “shell-shocked” by his loss. I wasn’t, because I’d been reading the polls, including the swing-state polls. If the conservative media are going to tell Republicans what they want to hear, then smart Republicans had better start looking at a broader range of media.

My colleague Roger Pilon can’t think of much the Republican Party should change. I’ll try to think more creatively. Let’s see … the Republican Party might have avoided running up federal spending by a trillion dollars during the Bush administration, alienating libertarian and tea-party type voters in the past few elections. It might have avoided miring the country in two endless wars, undermining its advantage on national security issues. And it might come to grips with its decades-long alienation of black, female, Hispanic, and gay voters.

During the civil rights era, conservatives - including party-switching Democrats such as Strom Thurmond and Jesse Helms - adamantly resisted the push for equal rights and equal dignity for African Americans. When women began to demand an equal place in society, politics, and the economy, conservatives said that a woman’s place was in the home. After those positions were no longer tenable, conservatives and Republicans came to accept race and gender equality, and they don’t understand why they still face a gender gap and overwhelming opposition from black voters. In our own time Republicans have sent hostile messages to Hispanics on the immigration issue and to gay voters on marriage and other issues. And they are in the process of permanently alienating those voters, too. As former Reason magazine editor Virginia Postrel says, “Policy aside, people rarely vote for pols they think despise them.”

Conor Friedersdorf blames Rush Limbaugh for Republicans’ image problems among minority voters. Maybe so. But it’s a problem that began before Limbaugh, and certainly can’t be blamed entirely on him or other pundits. The idealized Republican/conservative message of individual liberty, limited government, and economic growth ought to appeal to most voters. But Republicans have to accept, as even Dick Cheney saw, that “freedom means freedom for everyone,” and then they have to be consistent in delivering and applying that message. The hole they’ve dug with voters outside their straight white male base will take time to climb out of. They’d better get started.

Topics: 
General, Government and Politics, Political Philosophy

What’s Next for the GOP?

By
Marian L. Tupy

In hope that somewhere – out there – there is a Republican who reads the Cato blog, here are a few of my thoughts on last night’s elections:

  1. Social conservatism à la Messrs. Murdock and Akin has no place in a modern political party. Opposition to abortion is no excuse for deranged comments about “legitimate rape” and “God intended” pregnancies from rape. The same goes for opposition to gay equality. The referenda in Maine and Maryland are harbingers of things to come. The electorate is growing ever more accepting of homosexuality and increasing number of voters feel that preventing gays from marrying is discrimination – pure and simple.
  2. It is foolish to bash the Latinos in the primaries and then be shocked when they turn out in mass numbers in support of your opponent. Demography is destiny and the Latino vote is going to grow ever more important in the elections to come. The GOP should get ahead of the curve and come up with a comprehensive immigration reform that will include a path toward legalization of undocumented voters before Obama does.
  3. Americans are tired of a jingoistic foreign policy and while many voters are appalled by Obama administration’s drone strikes in Pakistan, few are ready for another all-out war in the Middle East or elsewhere.
  4. Principles matter. During his political career, Mitt Romney was on every side of every issue, running as a moderate/liberal Republican in the Massachusetts Senate race and as a severe conservative in the GOP primaries. In reality, nobody could be quite sure what he believed or where he stood.

Defeats may be difficult, but they do provide an opportunity for renewal. With G W Bush, the GOP embraced a fiscal liberal and a social conservative who did a massive damage to the reputation of the Republican Party. With Mitt Romney, the GOP opted for a man who was everything to everyone all at once. Perhaps next time around, the GOP will select a person who reflects the political preferences of most Americans: fiscal rectitude combined with social moderation.

Topics: 
Government and Politics, Political Philosophy

Does “Pro-Life” Mean Government Control? To Thomas Friedman It Does

By
David Boaz

Thomas Friedman of the New York Times has a column today provocatively titled “Why I Am Pro-Life.” Of course he doesn’t mean that he wants the government to protect life in utero. Instead he turns to a standard Democratic theme: How can you say you’re “pro-life” and oppose welfare, environmental regulation, and every other government program? Friedman doesn’t miss a beat: “common-sense gun control…the Environmental Protection Agency, which ensures clean air and clean water, prevents childhood asthma, preserves biodiversity and combats climate change that could disrupt every life on the planet…. programs like Head Start that provide basic education, health and nutrition for the most disadvantaged children….”

But then he takes it a breathtaking step further:

the most “pro-life” politician in America is New York City Mayor Michael Bloomberg. While he supports a woman’s right to choose, he has also used his position to promote a whole set of policies that enhance everyone’s quality of life — from his ban on smoking in bars and city parks to reduce cancer, to his ban on the sale in New York City of giant sugary drinks to combat obesity and diabetes, to his requirement for posting calorie counts on menus in chain restaurants, to his push to reinstate the expired federal ban on assault weapons and other forms of common-sense gun control, to his support for early childhood education, to his support for mitigating disruptive climate change.

Thomas Friedman’s vision of “pro-life” policies is, in every case, a network of bans and mandates forcing us to live our lives in ways that are pleasing to him and Mayor Bloomberg. No “life, liberty, and the pursuit of happiness” for him. No, his pro-life vision is Ira Levin’s dystopia in This Perfect Day, a world in which the state takes care of our every need.

When Hayek, in his essay “Why I Am Not a Conservative,” wrote about “the party of life,” he described it as “the party that favors free growth and spontaneous evolution.” Not Tom Friedman’s party! And certainly also not the party that seeks to ban drugs, gay marriage, and the discussion of evolution in science class. In her book The Future and Its Enemies, Virginia Postrel wrote at length about “the party of life,” and she didn’t have in mind Friedman’s crabbed view of a government that “protects life” by snuffing out liberty.

Some years ago I wrote a column titled “Pro-Life,” and I too had the Hayekian, not the Bloomberg-Friedman, view of life and liberty in mind. But long before that, as usual, Alexis de Tocqueville, in “What Sort of Despotism Democratic Nations Have to Fear,” warned us that one day Thomas Friedman and Michael Bloomberg would come for our liberties:

Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living?

Thus it every day renders the exercise of the free agency of man less useful and less frequent; it circumscribes the will within a narrower range and gradually robs a man of all the uses of himself. The principle of equality has prepared men for these things;it has predisposed men to endure them and often to look on them as benefits.

After having thus successively taken each member of the community in its powerful grasp and fashioned him at will, the supreme power then extends its arm over the whole community. It covers the surface of society with a network of small complicated rules, minute and uniform, through which the most original minds and the most energetic characters cannot penetrate, to rise above the crowd. The will of man is not shattered, but softened, bent, and guided; men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence; it does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, till each nation is reduced to nothing better than a flock of timid and industrious animals, of which the government is the shepherd.

Topics: 
General, Political Philosophy

RIP George McGovern

By
David Boaz

George McGovern, longtime senator and the Democratic nominee for president in 1972, has died at the age of 90. I recall a friend at Vanderbilt University telling me, “The night McGovern was nominated, the Republicans and the hippies partied together.” Nixon won in a landslide, of course, as McGovern was accused of supporting “acid, amnesty, and abortion.” Not to mention opposing the Vietnam War. Someone – maybe Art Buchwald – said it was McGovern’s fault that Nixon was reelected, because if he had run unopposed he would have lost.

Over at Reason, Jesse Walker and Nick Gillespie offer libertarian appreciations of McGovern. Quoting Bill Kauffman, Walker reminds us:

In the home stretch of the ‘72 campaign, McGovern was groping toward truths that exist far beyond the cattle pens of Left and Right. “Government has become so vast and impersonal that its interests diverge more and more from the interests of ordinary citizens,” he said two days before the election. “For a generation and more, the government has sought to meet our needs by multiplying its bureaucracy. Washington has taken too much in taxes from Main Street, and Main Street has received too little in return. It is not necessary to centralize power in order to solve our problems.” Charging that Nixon “uncritically clings to bloated bureaucracies, both civilian and military,” McGovern promised to “decentralize our system.”

Would that have happened, especially under a president elected by a party heavily populated and directed by the people who run those bureaucracies? Probably not. But it would be nice to try it one of these days.

And the Wall Street Journal reminds us of what McGovern learned after he left the Senate and tried running a small business. If you’re not a Journal subscriber, Google “George McGovern in the Journal” or “A Politician’s Dream Is a Businessman’s Nightmare,” and you can probably find the article. But here’s a taste:

But my business associates and I also lived with federal, state and local rules that were all passed with the objective of helping employees, protecting the environment, raising tax dollars for schools, protecting our customers from fire hazards, etc. While I never have doubted the worthiness of any of these goals, the concept that most often eludes legislators is: “Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government reporting requirements with reams of red tape.” It is a simple concern that is nonetheless often ignored by legislators….

In short, “one-size-fits-all” rules for business ignore the reality of the marketplace. And setting thresholds for regulatory guidelines at artificial levels – e.g., 50 employees or more, $500,000 in sales – takes no account of other realities, such as profit margins, labor intensive vs. capital intensive businesses, and local market economics.

 

Topics: 
General, Government and Politics, Political Philosophy

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