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How I see the world: politics and political economy

August 8, 2014 Leave a comment

Brad DeLong tries to make sense of Hayek.   At the risk of making an @$$ of myself, I have to respectfully disagree.  The way I see it, libertarian-ish types have been trying to “claim” descendance from Adam Smith for generations.  The problem is that, if Smith is “classical liberalism” incarnate, then libertarians have no more claim to him then the socialists do.

To try and illustrate why, I’m including a cladogram of the major currents of thought in the philosophy of political economy.

My view of the evolution of economic political philosophy

My view of the evolution of economic political philosophy

Maybe this is right, maybe it’s wrong.  But let’s just assume it’s right for the moment.  I want to discuss the branches I’ve labeled 1-4.

  1. The classical liberalism of Adam Smith.  It is “classical” because Smith more-or-less invents the subject as it is now understood.  Smith has some libertarian-ish views, or libertarians would not try to claim him, which include things like opposition to monopoly (in the day, entirely government created) and a belief in the effectiveness of market solutions (“invisible hand”).  He also had some non-libertarian views such as the dangers of private collusion (“[capitalists] seldom meet… but the conversation ends in a conspiracy against the public”) or the benefits of social well-being (“… some principles in [man’s] nature… interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it”).
  2. Marx.   It’s hard for me to look at Marx and not see Adam Smith: look how close they are!   The truth is that Marx is best thought of as one branch of the first major split in classical liberalism.  I want to get back to that split for (4), but for now just think of socialism as classical liberalism with a heavy emphasis on the well-being of the worker-class.   This strain of liberalism has a complicated relationship with government (Marx himself is probably closest to the Left Anarchists).
  3. Same thing as with Marx, the Laissez-Faire branch of liberalism is one of two major branches which lead away from classical liberal thought.  In this case, though, there is a heavy emphasis on the well-being of capitalists and a complicated view of monopoly.   Unlike libertarians out there, I tend to view this strain as all but dead as an intellectual force, but there are lines of influence from these ideas to more modern theories.
  4. Ricardo and the direct intellectual descendants of Smith.  Ricardo himself may have leaned right-ish a bit, but I think it’s fair to characterize his view as opposed to landed aristocracy.   As such he imbodies both socialist (pro-labor) and laissez-faire (pro-capital) views.  Ricardo may have leaned more towards capital politically, but his theory of comparative advantage was built assuming that labor is the only important input.

My takeaway from this is that the most important cleavage in liberal thought has to do with the factor of production that each strain identifies with.

Laissez-Faire thought identifies with the capitalists and quickly incorporates Nietzeschian notions of “supermen” to justify the super-wages which the capitalists earn within this otherwise liberal tradition.  The incorporation of Nietzesche makes the Laissez-Faire  strain the least classical, since Adam Smith himself is (I think, but I could be wrong) borrowing from Kant as his moral philosophy guide.

Socialist thought identifies with labor, but quickly recognizes that labor needs to band together in some way (recognizing a power disparity between owner and worker).  Thus, along this strain there is a mighty back and forth over the role of government where the importance of the debate is often obscured by the fact that all these strains agree on the goal of an empowered workforce.

Then, there’s the neoliberal tradition.  Direct descendants of Smith, this is basically the mainstream of the economics profession.   What separates this tradition is precisely the indifference between labor and capital which are handled interchangeably.   I don’t include every branch here, but I’d place Polyani along with the instutionalists.

Hayek is not here, obviously, along the neoliberal branch.  Instead it’s hard for me to view the Austrian school as anything other than the last surviving branch of the laissez-faire strain.

Now maybe all this is wrong.   Although, all I’m really doing here is classifying schools of thought using a standard clade-like (i.e. evolutionary) approach–strains of thought are related which are most alike.   But if I’m am wrong, I’d like to know why.  Rearrange the family tree and show me.

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When Liberals get close-minded

April 23, 2014 Leave a comment

[Spoiler Alert: this post contains minor plot reveals for the Wheel of Time series.]

Via Brad DeLong (in a post well worth reading on its own terms), I was disturbed to read this post by Abigail Nussbaum.   The context are the Hugo award nominees for 2014.  This, however, is one of the meanest, most condescending things I’ve read online in a long time:

As for the Wheel of Time series making it onto the best novel ballot, I’d just like to say to anyone who voted for this: feel ashamed, because you don’t even have the excuse of being a reactionary troll to justify your bad taste.

Wow.  I’d be insulted even if I wasn’t one of those who should feel ashamed because I don’t even have the excuse of being a reactionary troll to justify my bad taste.  I liked the series and I’m not going to make any excuses for that.  I liked deLong’s reply:

Similarly for Wheel of Time: after the third book I looked forward and saw no narrative closure anywhere, only an uncountable number of pages on which pairs of breasts would fold their arms… 

Now I could see Abigail trying to convince those who nominated… the Wheel of Time that they should not have… But that is not what she is doing.

[Quoting Lois Bujold:]

It’s increasingly clear to me that the reader and viewer–the active reader or viewer–does a lot more than he or she is ever given credit for. They fill in the blanks. From hope and charity, they explain away plot-holes to their own satisfaction. They add background from the slimmest of clues. They work. 

I LIKE books that challenge my priors.   I LIKE stories that make me work.   A story which does all the work for me is useful only as a cure for sleeplessness and an artist who thinks that her interpretation of her work is the only valid interpretation is a really bad artist.   Filling in the blanks is what makes reading 500 pages or 15,000 pages worth doing.

The Wheel of Time is not the best written series.  Neither was Babylon 5 a well written show but I stand by it as one of the best TV sci-fi series ever.   Snappy dialogue and cleverly reveled plot are just not as important as writers seem to think they are.

So why do I like Wheel of Time?  I think there are two things I really enjoyed.

First, the series is absolutely littered classic fantasy novel tropes which are almost without fail subverted in some way.  For example, when the damsels are in distress (as they often are), they tend to save themselves… and get angry at the “hero” for trying and getting in the way.   The rogue of the series is constantly trying to get himself out of trouble, instead it’s the girls who are always getting themselves into trouble–mostly through pure over-confidence.  The story as a whole is a Manichean struggle to find… balance.   Not victory for the light, balance… at the end that’s an important plot point.   There are many, many more examples of this variety, but the point is that these are Easter Eggs for those familiar with the fantasy genre.   And you know what?   Finding the Easter Eggs is fun.

The second thing I liked about the series is the thematic elements.   The story doesn’t just take Feminism as a primary theme, Jordan tries to subvert Feminism too!   If you’re truly a devoted Feminist, I think you should really take a moment to consider what Jordan is actually saying.

Consider, for example,  the infamous (constant) arms-crosssing-over-breasts-scenes.   This is a serious thematic element of the series.  Seriously… read the books… if you read carefully and don’t rush to judgment (oooh, he mentioned her breasts!   objectification!   oh noes!) you might notice that the one’s crossing their arms are always powerful women and they are doing so to express displeasure with the men around them–who they almost without fail believe they outrank.  Get it?  His conception of Feminism is based on power relationships not on sexuality.  The juxtaposition of the two serves to underline the point.   This is a matriarchal society because the women have more power than the men.   Men become more powerful as the story continues…  the relationships more equal… but I suspect that’s the balance theme again.

I’m not a Feminist, but I think that’s a much better basis on which Feminists should base their thinking.   Power, not sexuality, is the problem.

If you’re not yet convinced, consider another example: the gender roles for the Aiel.  The Aiel, of course, practice polygamy.  The subversive thing, though, is that the polygamy as the Aiel practice it is presented as more… Feminist, for lack of a better word… than the monogamous marriage in the rest of the world.   How could that be?   Easy. the Aiel simply believe that the relationships between two women are more important than their relationship to their husband.   At this point I could add that in the Aiel society it’s women who own the property and dominate politics (since Wise Ones hand pick each clan leader).

I don’t know what Robert Jordan’s actual views are.   Nor do I really care.   His books challenged me and made me see things differently.    Shame on you, Abigail Nussbaum, for being too arrogant to appreciate that some readers find that more important than florid prose and perfectly crafted plots.

 

Categories: About Me, liberalism

Don’t CRI(NO) For Me

Via Krugman, I see that John Sides has a great post up on another issue that I’ve been thinking about.   There were some complementary (in both senses of the word) that I wanted to add to this.  First, the key grafs:

Looked at this way, almost 30 percent of Americans are “consistent liberals” — people who call themselves liberals and have liberal politics.  Only 15 percent are “consistent conservatives” — people who call themselves conservative and have conservative politics.  Nearly 30 percent are people who identify as conservative but actually express liberal views.  The United States appears to be a center-right nation in name only.

This raises the question: why are so many people identifying as conservative while simultaneously preferring more government?  For some conservatives, it is because they associate the label with religion, culture or lifestyle.  In essence, when they identify as “conservative,” they are thinking about conservatism in terms of family structure, raising children, or interpreting the Bible. Conservatism is about their personal lives, not their politics.

I’ve been aware of this result for a while (probably from reading John Sides in the past), and I think that, in retrospect, this might be the most unsurprising result in all of political science.   I say that because it has all the hallmarks of a branding effect:  more to the point, a branding effect which clearly favors Republicans.

So what do I mean by a branding effect… let me give an example.   The classic branding effect comes from an advertising campaign by Pepsi.  Back in the day (if you’re as old as I am, you may even remember this), Pepsi started producing commercials pointing out that Pepsi consistently won head-to-head blind taste tests verse arch-rival Coca-Cola.   That shouldn’t be surprising since Pepsi is in fact sweater than Coke.  Nevertheless, when the taste tests weren’t blind, Coke would consistently win.

It’s rather remarkable when you think about it: people would swear up and down that they prefer Coke, until the don’t know they’re drinking it.   Coke was apparently so spooked by this that they tried to change their formula (some reading this may remember “New Coke”)–it was a disaster.

It’s hard for me not to see the parallel.   People like being “Liberal” in the same way that they like to drink Pepsi: as long as they don’t know they’re doing it.  The point is further reinforced by surveys showing that people support policies with the “conservative” label attached to them (sadly I can’t find the link, but I know it’s out there).   No, they don’t like conservative policies, they like policies which are described as conservative.

So, what’s the lesson?   Well, I think the insight here are twofold.    1) The republican/conservative “rebranding” effort is doomed to failure, since they are already living off a much better brand:  i.e. this is the “New Coke” strategy.   2) The conservative branding advantage could still last a long, long time: last I checked Coke still had a brand advantage to Pepsi… what is it now, 20, 3o years since it was first noticed?

 

A monopoly for coercion

July 5, 2012 1 comment

Following on my last post, I’d like to discuss an issue that I didn’t really get to (that post was already going far too long).   Libertarians at least have a theory, i.e. (as summarized by Holbo)

  1. maximize property and contract rights, so as to
  2. maximize “freedom”–especially for the worthy–whatever that is suppose to mean, for the purpose of
  3. maximizing human welfare

It’s a good theory:  intuitive and with a grain of truth to it.

I made the argument in my last post that regulation could in theory improve welfare and “freedom”.   I never got a chance to expound a political theory, however, on the limits–or possibly the lack thereof–of interventions.   After all, if you think that regulations (i.e. government coercion) are OK then why aren’t private forms of coercion?

This is the converse of the libertarian problem that I spent so many words on in that post.    I think libertarians are wrong, but what do I as a progressive believe which would make an intervention right?   Managers are people too, so why can I take away their options?

The problem as I see it, is succinctly explained by Keynes:

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.

Libertarians have ideas–they are wrong, but they are influential.   Yet it is not enough to fight the encroachment of libertarian ideas, we have to offer an alternative.

A few possibilities:

  • welfare/utilitarianism:  There is a declining marginal utility of options, to restrict options for those who have many and reallocate options to those with few is welfare improving.
  • the need to fight power and wealth as self-reinforcing phenomena:  I’ve made this point before.   Consider this.   Give 100 people each a $1 bill. Have them match up, and bet on a fair coin toss an amount equal to half the wealth of the poorer individual.   Repeat.   It is not hard to see that, asymptotically, all the wealth will be in the hands of a single individual.   This result is robust–as long as the coin toss is fair, it is truly unfair because those with more wealth can afford a loss.   The problem remains even if someone is more “skilled”–using an unfair coin–the wealth buffer matters more than a rigged coin toss.   You can apply this idea to an entire economy and get the same result.
  • coercion as a form of violence:  The government is the monopoly supplier of violence.   This has been the case for a long time as the alternative caused more problems than it solved.   But coercion is a form of violence, so why isn’t the government the  monopoly supplier of coercion?   Hence the title of the post.

A basic theory on the use of coercion in society

Like the libertarians, I want to be somewhat utilitarian–as an ultimate, but ultimately unreachable goal human welfare should be maximized.

However, unlike libertarians, I recognize that property and contract rights will not work.   In addition to the good they do, property rights protect the powerful and as such harm the rest of society, since wealth and power are self-reinforcing.

So here goes.

  1. Property and contracting are privileges given by the rest of society and may be revoked at any time by that society (which granted those privileges in the first place).
  2.  All forms of private coercion are anathema to a free and fair society.    I would accept this as a definition of “free and fair”, being that these ‘freedom’ and ‘fairness’ are hard to define otherwise.    Call this the “my right to swing my arms ends at your nose” principle.
  3. The government has a monopoly on the use of violence and hence coercion (as a form of violence).   It is not possible to have a society without the threat of both–there is a no-trade theorem (which should be the subject of another post)–so the provision must be relegated to someone.
  4. By 2 and 3 (and recognizing that governments are run, ultimately, by private individuals), a free and fair society is one run by the rule of law.
  5. By 2, and recognizing that laws are written by private individuals, a free and fair society is one in which all people must have the options of voice at all times over those laws which will apply to them and the right of exit must be respected.   Call this the democratic principle.   For example, the people of Hungary are less free than they used to be because they have less voice over new laws moving forward.   This, I hope, answers Hayek’s objection.

I think this sums up my political philosophy.   Its definitely not as sexy as the “contract and property rights = freedom = maximal human welfard”, but I think its more right.

If you have some objections/corrections, let me know.

A model for efficient regulations

July 5, 2012 2 comments

[Edit:  I changed the title of this post since I never explained the old title–BSE]

[Edit II:  see also the excellent post by Noah Smith on this topic.]

There’s been a fascinating back-and-forth on the nature of public and private coercion and labor markets.

To start things off Chris Bertram, Corey Robin and Alex Gourevitch (BRG) argue that libertarians ought to care as much about private modes of coercion as they do about public modes.   Specifically, they should care about coercion in the workplace.   If you truly believe in a philosophy of maximizing freedom why would you accept a situation in which workers are forced to endure a thousand indignities  which they did not specifically contract for?

Critical to their point is that exit (i.e. quitting) from a bad job situation is not sufficient to ensure worker freedom–exit is expensive (lost wages), uncertain (the next job may be as bad, if it comes along at all) and bosses may use a “boiling frog” strategy in which individual humiliations are added one at a time and none of them are so horrendous to induce workers to up and quit.   I might add that homo economicus might leave in such a situation, homo sapien would not.

Tyler CowenAlex Tabarrok and Adam Ozimek (CTO) respond by asking (to paraphrase) what would workers be willing to sell their freedoms for?   A very strange opinion, in my view, for libertarian freedom lovers, but Adam adds the distinction between ‘static’ and ‘dynamic’ freedom.   I think his argument is entirely missing the point, but that’s me.

In defense of BRG, Miles Kimball makes a good argument that worker protections can certainly be justified, morally and economically (he uses the example of ‘worker’ protections in the military).    My favorite response, though, comes from John Holbo; which I’ll discuss in a moment.

Surprisingly, Matt Yglesias enters the fray (here and here)  on the side of the libertarians.   He argues that as long as there is full employment in the labor market, then exit is a credible threat and so having no labor market regulations will be efficient.   To quote Matt:

…But you have to make the argument that tighter regulation of permissable work rules will in fact benefit the intended beneficiaries in a world where labor market regulation isn’t going to suddenly increase employers’ benevolence…

Challenge accepted.   My response will mostly be geared toward Yglesias, and I will have a model!   I love ya Matt, but I gotta bring some economics beatdown…

That’s a lot of reading, but interesting.   Before I get to my model, let me first make a couple of points.

 This is a problem for Libertarians, not Liberals
Via Holbo, Hayek argues that someone who contracts out their freedom is not more free, but less so;
The danger of confusion here is that this use tends to obscure the fact that a person may vote or contract himself into slavery and thus consent to give up freedom in the original sense. It would be difficult to maintain that a man who voluntarily but irrevocably had sold his services for a long period of years to a military organization such as the Foreign Legion remained free thereafter in our sense; or that a Jesuit who lives up to the ideals of the founder of his order and regards himself “as a corpse which has neither intelligence nor will” could be so described. Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one’s government is not necessarily to secure freedom. Moreover, it would seem that discussing the value of freedom would be pointless if any regime of which people approved was, by definition, a regime of freedom.
Think about the context that Hayek has in mind:  he’s arguing against the social democrats who define permissible government behavior as anything supported by the majority of the people.   Hayek is saying that if the people elect a tyrant, they are still slaves whether or not there was an election.
Holbo (as well as BRG) are simply pointing out that this same principle applies as well to private as to social contracts.   Liberals, who do not view contracting as a sacred right but a practical and useful tool, are quite comfortable with the idea that contracting may reduce freedom.   For liberals like me, the Bill of Rights exists precisely because we recognize the possibility that the social contract may be a source of un-freedom.    It is a set of principles that can never be renegotiated.
Libertarianism and un-freedom
The point is that libertarianism is a philosophy of un-freedom one way or another.   To quote Holbo
…libertarians are unconcerned with maximizing freedom…Different ways of regulating the workplace will plausibly increase freedom-as-non-coercion relative to the levels that a libertarian regime will produce, and libertarians are not willing to go for it. They are unwilling in principle. From which it follows that libertarians are not concerned to maximize freedom.   They are maximizing contract rights and property rights. They don’t see they are not, hereby, maximizing freedom because they make the mistake Hayek diagnoses…: contracting away your freedom is not tantamount to keeping it.
 …Libertarianism does not take freedom as an end but as a means. Hayek is a utilitarian…
To quote Hayek,
If there were omniscient men, if we could know not only all that affects the attainment of our present wishes but also our future wants and desires, there would be little case for liberty.
So why all the liberty talk from libertarians?   Hayek points directly to the informational issue (which will play a role in my model), Holbo adds some thoughts:
…because the thing that actually belongs on the pedestal can’t be directly aimed at… In part we don’t even know what it is: the true standard of overall welfare for humanity…Maximizing freedom is the best proxy for maximizing welfare for humanity…So how do you maximize freedom? Here rubber meets road. You don’t maximize it by ensuring property and contract rights the way Hayek and other libertarians want. As BRG say, this will sometimes result in less freedom
Now as Yglesias says, this could all be a red herring.   True, he says, but so what?    Show that labor market regulations increase freedom (at full employment).   As Matt says
…in almost all political contexts, including this one, both the concept of freedom and the concept of property rights are red herrings. A political movement genuinely focused on freeing people from the coercive authority of the state would spend a ton of time tackling the everyday tyranny of traffic signals, lane striping, jaywalking laws, and the dozens of other similar regulations that impinge upon the day-to-day lives of hundreds of millions of law-abiding American citizens. By the same token, a movement obsessively focused on property rights would be outraged by the fact that every automobile driver and factory owner in America is causing fine particulate emissions to traspass on people’s backyards all across this fine land.
Fair enough, so let’s deal with the practical issue.   After all, both Holbo (speaking for the libertarians) and Yglesias have reduced the problem to a practical one.   Libertarians have this theoretical problem that contracts and property rights won’t maximize what they say they want, but what about the alternatives?   Could labor regulations make sense?
Libertarianism is the philosophy of the powerful
Before I get to that, one more Holbo quote–because he already deals with this objection–and then I’ll discuss my model:
Libertarianism isn’t a philosophy that blows different directions in the shifting winds of the labor market – coming out against unions when they get bloated and corrupt and exclusive but turning against management and capital when they are, as they certainly may be, objectively greater threats to freedom than any actually existing labor union. Actually existing libertarianism is the philosophy of treating as axiomatic that maximizing contract/property rights is tantamount to maximizing freedom…
…Hayek fails to see that he is not actually interested in maximizing freedom because, actually, he thinks that some people’s freedom is a lot more valuable than other people’s freedom. Liberals always want to ensure the maximum freedom consistent with enjoyment of that freedom by all. Hayek is definitely not on board…:“To grant no more freedom than all can exercise would be to misconceive its function completely. The freedom that will be used by only one man in a million may be more important to society and more beneficial to the majority than any freedom that we all use.”  Ideally, we would find that one man and even make all others his slaves, if that is what it took to let him exercise his freedom to the fullest… But obviously the point would not be that the man might have some preposterously bottomless capacity to be free. Rather, Hayek is saying that a world with much less freedom – a world in which this one-man-in-a-million is even a tyrant, perhaps – is better than a world full of freedom.
 In my own words, Hayek (and all libertarians) believe in the right of the powerful–presumably Galt-like supermen–to take away yours [rights].   As Holbo says of Hayek’s philosophy, “We can pick out a class of people who are likely to be better users of freedom. This is no part of Hayek’s official philosophy, but the reason he sees coercion on one side (workers) not the other (employers)”
An example of labor market regulations increasing freedom and welfare
 I’m going to use the example of workplace safety.   Workers value “safety” in their workplace, but of course they differ on exactly how much wages they would trade to be certain they will not be injured on the job.   Working in “un-safe” conditions does not guarantee injury any more than “safe” workplaces guarantee non-injury.   This means that safety is valued to the extent that it has an insurance value.
Workplaces chose their level of safety which all workers will share.   Presumably, this safety is expensive to supply but there is an opportunity for smart entrepreneurs to offer optimal trade-offs to potential employees on the “safety” vs. “wages” choice.   In particular, the “true” wage is the sum of worker’s willingness to pay for their safety (i.e. the insurance value of that safety which I’ll refer to as the “safety wage”) and the actual (i.e. money) wage.   In a full information equilibrium, workers will self-select into jobs whose safety matches their own preferences and the system is efficient.
So what’s the problem?   How exactly do workers know before they accept their jobs and start working what the insurance value of the job will be?   For example, they don’t see missing fingers until they start working the assembly line.   Signals require realizations.   The safety wage is unobservable at the time of contracting.
What all this means is that there is an informational asymmetry at the heart of the labor market–potential workers don’t know if their potential workplace is the sort of place where fingers are lost until they see it for themselves, but bosses certainly know what they’ve spent on safety.   Thus, firms cannot attract workers by offering higher safety wages and so the industry wide money wages must equalize.   Given this, bosses offering higher safety wages (which are costly for firms) will either lose employees or be forced to raise prices–which would drive away customers from their product.   So bosses offering higher safety wages will either drop out of the market, or they will cut back on safety.
In equilibrium all workplaces are unsafe–workers don’t have the option of finding better working conditions since the market has driven a race to the bottom in terms of safety.
The same model, of course, applies to boss ‘jerkiness’.   Boss’s jerkness is not observed by workers until they are on the job and ‘non-jerkness’ is clearly costly.   Bosses are not just being capricious when they are jerks, as Cowen himself points out
I had a job in the produce department of a grocery store.  They made me wear a tie.  They did not let me curse.  Even if there was no work at the moment, I could not appear to be obviously slacking for fear of setting a bad example.  They had the right to search me, including for illegal drugs
 Failing to search would be costly–presumably–in terms of more stoned cashiers.    Presumably there are some, unlike Cowen, who do not like being felt-up for drugs.

There is no escaping labels

April 13, 2012 Leave a comment

Adam Ozimek had a great post this morning responding to Caplan and Wilkinson about the benefits or dangers of labels. Here’s the response I left after Adam’s post:

… I think all this talk about labels being beneficial or dangerous tends to miss the obivous point that labels are both beneficial and dangerous. This need not be an either/or proposition.

When I was young, I listened to Rush Limbaugh, called myself a staunch conservative and defended the Republican party from most attacks. In my mind, this was not because I so cherished the label as much as it was the fact that I listened to these people and their arguments seemed to make sense to me. When I slowly began to realize the weakness of their arguments I went searching for new labels, because what was I supposed to believe unless someone told me?

The real issue here is that a coherent worldview is not something that you can really build up from scratch from your own experiences, that’s not enough. An ideology like libertarianism took the lifetimes of many thinkers to flesh out; I couldn’t match that if I tried. Shortcuts are sometimes necessary.

It is also clear that having adopted shortcuts that that will introduce bias; not every problem has an ideal solution and this is an example of that. If you want to understand how that works, just read some Tversky and Kahnman papers… taking shortcuts which introduce bias is a universal problem in human decision making.

As for me, I spent my youth and early adulthood traveling the ideological spectrum from conservative to libertarian to self-concious centrist and finally to liberal/social democratic. In not one of those steps did I change a core belief, but each step I saw the world differently and I reacted differently to events.

I’m sure it helps to try and see the world as your opponents do, but that’s not a solution. There is no solution, except to do the best we can.

I’m not entirely sure if this puts me closer to Caplan (a rare event) or Wilkinson (much more common), but I do have to say that I see a lot of my own journey in what Wil has gone through. You just don’t realize all the subtle pressure to conform to your tribe until you’re on the outside looking in (not to mention the not-so-subtle influence of who you choose to listen to). But then, someone-who-listens to Wil-Wilkinson-more-than-Bryan-Caplan is itself a label.

I think politics, as Wil suggests, really is different, but only in the degree of tribalism and groupthink. I’m inclined to be convinced by Tversky and Kahnman because I’m a person who has been convinced in the past, but that doesn’t mean that they are or were right. Tthey may be those things anyway, but my inclination to believe them comes from my own bias, not from them. This is a form of tribalism… I’m a behavioral economist, and not a neoclassical one. For example I have a couple posts up on a common mistake I think most behaviorally inclined make in dismissing utility theory (a mistake going back to Tversky and Kahnman, incidently)… but I used to agree with them.

A truly rigorously-thought-out idea is a rare and valuable thing. I say keep the labels, but be aware that it messes up your thinking.

Steal-cage death-match: Kochtopus Vs. Cato Edition

March 19, 2012 Leave a comment

I’ve been meaning to write about the Koch brothers take-over attempt of the Cato Institute since I first heard about the story (from Brad DeLong–here is a good summary). I once considered myself to be a libertarian (long long ago, in a galaxy far far away) so I feel as if I should have something to say. Sadly, I don’t really think I do. Nothing terribly interesting at any rate.

Still, its going to bug me until I vent a little bit, so here goes.

My feeling is that the modern libertarian movement (as it actually exists) in the US is a terrible force of evil, not just here but in the world as a whole (I’ll refrain from citing examples for now, but I may come back to the topic in the future). This is a tragedy, and not just because libertarians are a powerful political force. In fact, I would go so far as to say that an idealized libertarian movement would form the best of all possible opposition parties to the progressives… that sounds like I mean the whole political culture ought to be significantly rightward of its current center of gravity, but that is not what I mean, so let me explain.

As I see it, politics is an N-person bargaining problem (where N is some very large number), but the N-person bargaining problem doesn’t have a single (known) solution. Still, we can say something about the fairest possible outcome of the N-person problem–for example if everyone earns his or her shapley value this would be a notion of the “fairest” bargaining outcome. Suppose also that the overall solution of this bargaining problem only admits solutions with two main parties. You might then ask which two parties best balance long run growth and equity of its citizens. My contention is that “close enough” to this shapley value solution to the bargaining problem, the two parties which best optimize growth subject to equity concerns are the progressives and libertarians.

The idea is that in order to maximize growth, a society needs to be constantly changing and evolving. To me, this suggests the need for an agenda-setting party and a skeptic party to keep the agenda-setters honest.

If there is one thing that unites progressives it is the idea that collectively we can solve societies problems–although we are indifferent, generally, as to how and disagree mightily as to what. This means that progressives are a great agenda-setting party (at least, we are at our best). As a bonus, it is probably best that the agenda-setters are the party most interested in equity, since the market will generally produce inequities all on its lonesome, which provides a steady stream of “change” that needs doing.

Libertarians, meanwhile, are dedicated to (what I usually think of as a somewhat strange notion of) liberty. There is a bit of paranoia in their single-minded focus on less government and a frustrating lack of awareness of the liberty-destroying abilities of powerful individuals. Yet, overall, I see libertarians getting more things right than wrong. They would be bad agenda-setters because of their rather awful blind spots, but their careful reasoning and market-oriented thinking make them excellent skeptics (even in command-and-control economies, markets tend to pop up on their own).

This is all pretty weak praise (for one thing implementing a shapley-value solution is probably impossible with a voting mechanism, I think actual voting mechanisms will get you something in the Core, so my intuition here is in a practical sense useless). Still, I think it’s fair to say that, at their best, libertarians make our political discourse healthier. I would not make the same claim for conservatives, broadly.

Whatever its practical faults, Cato comes the closest of all the major political organizations on the right to that elusive ideal of what libertarian thought ought to look like. To the extent that its ideas do filter back into the rest of the republican party and change the bilateral debate with the democrats, we are all better off for it. But precisely because kind of libertarianism does not advance the goals of conservatism or the republican party will move Cato further from what they should be. Then again, this is a very communitarian argument, which no self-respecting libertarian should buy into (read that DeLong post to see how well that fact has kept the libertarians from making precisely this case).

On the merits, though, the Kochs win the SCDM: the Koch’s membership shares are their own property and the attempt by Ed Crane to prevent them from reaching majority control amounts to theft of this property. I have no problem with this, because I understand that ownership and markets are not enough to guarantee optimal outcomes, but I can practically hear the cognitive dissonance as millions of libertarian’s brains change gears as one and take the communitarian side against property and markets. Score this one for the Kochs, but I think we all lose.