Ross Douthat is right to say that worrying about what would happen if Ron Paul seized ultimate power and decreed America a minarchy probably isn't a good use of anyone's time. But where Douthat thinks that minarchy is used as a way to dismiss libertarians, in practice, I've tended to find it their first line of defense -- the right's version of "well, Marxism has never really been tried."
To some degree, you see it in Douthat's post, when he quotes Conor Friedersdorf lamenting "that libertarians hold very little power in this country." The reality is that the sort of incremental libertarianism that aligns with the interests of rich individuals and corporations has quite a lot of sway in Washington, but it routinely manages to escape the consequences of its ideas because, libertarians argue, the world we live in isn't the world they would've built, and so how can they be asked to answer for it? It's the "don't blame me. I voted for minarchy" defense.
But if the argument is that incremental libertarianism deserves more respect, then it also deserves more accountability. Desperate storytelling about Fannie Mae and Freddie Mac aside, the financial crisis was, in large part, the product of the idea that massive financial markets that we didn't understand would effectively regulate themselves. Alan Greenspan, perhaps the only man in America with the unilateral power to have prevented the blowup, has been quite clear on the flaw in his thinking: "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity — myself especially — are in a state of shocked disbelief."
To a first approximation, that was a failure of not just a crucial pillar of libertarian economic thought, but of libertarian practice: We spent the '90s not just deregulating, but much more dangerously, refusing to enact new regulations even as the financial system changed dramatically. One of the key players there was Sen. Phil Gramm, who certainly has his fans at the Cato Institute. His was the sort of libertarianism that is politically potent because it is backed by lots of money and lots of elites who combine to push it into the public discourse.
Taxes are another example. Plenty of libertarians have lined up for repeated tax cuts under the theory that they would stoke enough growth, and force enough compensatory budget cutting, to put the country on a more sustainable fiscal path. Plenty of wealthy individuals and firms have pumped a lot of money into propagating that theory and rewarding politicians who vote they way it asks them to. That theory, however, has been a disaster as a policy matter, even as the individuals and firms have made a lot of money.
And there's a lot of power, of course, lined up against anything that gets us close to single-payer health care. Most of the arguments made in that debate are fundamentally libertarian ones: that it will reduce freedom, or that government programs are inevitably bloated and wasteful ("Like going to the DMV? You'll love government health care!"). Cato's policy wonks spent much of 2009 on television arguing against reforms that would mean more government intrusion into the marketplace. Politicians and political organizations, meanwhile, received a lot of money and support in exchange for making those arguments. But it's of course true that America, being the developed country with the least nationalized health-care system, also spends the most and has the highest rate of uninsurance.
So when Douthat says that "a more-empowered libertarianism could have a salutary impact on debates over, say, the future of the entitlement system," it's worth asking what impact semi-empowered libertarianism has already had on debates over the entitlement system. That libertarian dreams of a privatized (or completely dismantled) Medicare system haven't come to pass is no more relevant than dreams of minarchy. What has come to pass is an aggressive and successful effort to stop America from following other countries' paths to national health-care systems. And the result can be seen here: If our costs had followed their costs, we'd have no budget deficit to speak of. Libertarians shouldn't have to answer for minarchy. But they do have to answer for that.
Business cycles and the essence of long-run economic growth are distinct issues. Preventing recessions is not the key to growth, as these are regrettable but unavoidable companions to an economy directed by a capital allocation process that is susceptible to systematic failure. Preventing the last failure is pretty irrelevant, because the next systematic failure will be different. Last I checked, only the US government is offering low-down payment loans, and no one offers no-documentation loans, so our government is not really helping here. As for creating growth via something new, if centralized governments could do that, the Soviet Union would still be around.
That decentralized, self-interested, people can collectively make such large errors seems irrational or corrupt to many, but they should remember that growing economies require people to be making things better, which means, new ways of doing things. New ideas are often wrong. Economics has gone onto intellectual cul-de-sacs many times (socialism, Keynesian macro models, input-output models, Hilbert spaces in finance, Arbitrage Pricing Theory, Kalman-filter macroeconomic models, etc.). Other scientific disciplines have their own mistakes, and political mistakes--stupid wars--are also common. These are rarely conspiracies, but rather, smart people making mistakes because the ideas that are true, important, and new, are really hard to discern, and tempting ones are alluring when lots of other seemingly successful people are doing it.
My Batesian Mimicry Theory posits that recessions happen because certain activities become full of mimics, entrepreneurs without any real alpha who got money from investors looking in their rear-view window of what worked and focusing on correlated but insufficient statistics. For example, people assumed a nationally diversified housing prices would not fall significantly in nominal terms, because they had not for generations; people assumed anything related to the internet would make them rich in the internet bubble, conglomerates would be robust to recession in 1970, that the 'nifty fifty' top US companies had Galbraithian power to withstand recessions in 1973, that cotton prices would not fall in 1837, etc.
As in ecological niches, there is no stable equilibrium with when mimics arise to gain the advantages of those with a real, unique and costly, comparative advantage. Every so often there are too many mimic Viceroy butterflies, not enough real poisonous Monarch ones, and a massive cataclysm occurs as predators ignore the unpleasant after-effects and start chomping on all of them. The Viceroy population grows until this devastating event occurs, a species recession. Next time, it won't happen in butterflies, but rather, among frogs or snakes. They key is, some ecological niche is always heading towards its own Mayan collapse (distinct from the 2012 Mayan apocolypse).
The key to wealth creation is doing less with more--destroying jobs at the micro level and creating jobs at the macro level by reallocating capital and labor to more valuable pursuits. The computer got rid of things from typesetters, secretaries, to engineers working with slide-rules, but these people didn't stay unemployed, they did something else, making the economic pie bigger. This is antithetical to government and unions who think creating a permanent 'job' creates productivity--stability at the micro level and stagnation at the macro level. Wealth is created by having decentralized decision-makers focused on simple goal of making money, which means, they oversee transactions where revenues collected are greater than expenses paid. If externalities are properly priced (I know, most liberal think this never happens), this implies value is created. The continual improvements in method (ie, productivity, wealth creation) merely maintain profits in a competitive environment; to do nothing would see their profits eaten away by competitors would could easily copy what they did and just undercut their prices.
The key to this is having managers who keep their workers focused. A good example is a story I heard second-hand about a football player for Minnesota Vikings in the 1970s. Coach Bud Grant called this marginal player into a meeting, and said, 'Here's what I need you to do...'. The player, an articulate fellow quite confident in himself, interrupted with an explanation of why he wasn't doing better and suggestions about how to correct it, mainly focused what others were doing wrong. Grant cut him off: 'You don't understand. This isn't a negotiation. Do what I'm telling you, and you have a role here. Otherwise, you don't.' Hierarchies only work well when people have clearly defined goals, and managers who manage their direct reports singlemindedly.
Private firms can do this much more quickly and often than government, and are rewarded with investment and retained earnings to the degree they do it well. When the government wants to do something, like build a light-rail system, it instead satisfies all its stakeholders who have no financial downside, only veto power, and so the cost/benefit calculus is almost irrelevant. The probability that benefits will outweigh costs when not prioritized is negligible, as highlighted by the fact that companies have to work very hard to make this positive when all those other considerations are ignored.
Thus, Minneapolis's light rail, at the cost of $1.1B for 12 miles of track, takes me longer to go downtown than a car because it stops 19 times at places no one wants to go because these 'hubs' were then sold as development opportunities, and an unusual number of ex-city councilmen are part owners of coffee shops and stores near these stops. Ridership does not even cover their marginal costs. It could have worked if they had an express train that went non-stop from end to end, but doesn't because it was not designed with the goal of making money, only the hope.
Good companies like Facebook, Apple and Google, have this sense of really understanding their users. Lots of simple things that making going to their sites and getting what you want. Their inferior competitors are relatively ugly, cluttered, and clunky. These generally weren't genius ideas like the ideas needed to create the first transistor, or Cantor's diagonal argument, in that there competitors had similar raw competence in these field, but it did take people looking to do things better than others, and decisive people who could empathize with their customers created really great things.
Robin Hanson had a neat article about the Myth of Creativity, where he criticizes Richard Florida's vision of bohemian lead productivity:
This is a Star Wars vision of innovation: "Feel the force, Luke; let go of your conscious self and act on instinct." And it is just as much a fantasy as that celluloid serial. Innovation is no more about releasing your inner bohemian than it is about holding hands, singing Kumbaya, and believing in innovation.
In truth, we don't need more suggestion boxes or more street mimes to fill people with a spirit of creativity. We instead need to better manage the flood of ideas we already have and to reward managers for actually executing them.
Sure, it's good to punish fraudsters, and be wary of the stupid ideas that were passed off as brilliant in the prior cycle (eg, Angelo Mozilo winning the American Banker's Lifetime Achievement Award in 2006, celebrated by politicians on the right and left, prized by Fannie Mae, and Harvard, is now an example of the 'unregulated predatory private sector'). But this is like learning not to put one's hand on a hot stove--good to know, but old news to most. Our priority at the top level should be to get out of the way, and so government should focus on its essential but limited perennial tasks as opposed to creating some new engine of growth. Leave that for the millions of people making sure millions of small changes are constantly made to daily procedures. Such changes do not require vision from politicians, subsidies, or tax breaks, but are rather the natural by product of people trying to make a buck. It's the standard Hayek/Friedman view of macroeconomics, and it's still the best description of how the complex adaptive system of our economy works.
surface encounters noblesville surface encounters michiganJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters macomb surface encounters michiganJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters noblesville surface encountersJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters michigan surface encounters noblesvilleJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters macombsurface encounters noblesvilleJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters rock topssurface encountersJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters macomb misurface encounters macomb miJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounterssurface encounters noblesvilleJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters noblesvillesurface encounters rock topsJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounterssurface encounterssurface encountersJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters macomb misurface encounters rock topsJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters macombsurface encountersJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters noblesvillesurface encounters macombJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters rock topssurface encounters rock topsJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters michiganJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters noblesvillesurface encounters macombJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounterssurface encountersJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters macombsurface encounters rock topsJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters michigansurface encounters rock topsJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters macomb misurface encounters rock topsJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters noblesvillesurface encounters macomb miJorge the DH, Pettitte (the wait and the Hall), the Hall in general, and Soriano.
Most of you likely won't be watching “Friday Night Lights” until the NBC run later in 2011, but for the dedicated few tuning into DirecTV, please join our swoony recapage of the series' final season.
But programmers don't think this way, and I guess most programmers aren't news junkies. Because it was impossible to get through to them. No matter, the market eventually decided. A lot of wasted time, which sucks, but hardly the end of ...
surface encounters
