*American Amnesia*

That is the new book by Jacob S. Hacker and Paul Pierson, and the subtitle is How the War on Government Led Us To Forget What Made America Prosper.  It is well written and will appeal to many people.  It is somewhat at variance with my own views, however.  Most of all I would challenge the premise of a “war on government,” at least a successful war.  How about a “Dunkirk on government”?

Most forms of regulation continue to rise, noting that the stock of regulatory law is rising, and increasingly constraining, even if the flow is steady or declining, which I believe it is not.  Government as a percentage of gdp is roughly constant, and since gdp is growing that means government is growing in absolute terms.  If at least some of government is public goods, government should not grow in proportion to population (e.g., the nuclear umbrella), so some of this percentage constancy is a kind of real increase.  Long-run trends are for more of the economy to flow into the relatively regulated, government-intensive area of health care, and so with population aging, government as a percentage of gdp is slated to go up.

You may or may not agree with all of that government, but who exactly is winning this war?

I would better characterize the authors’ complaints as old people winning a war against young people for control of government.  And I agree with much of what they have to say on this.  But then tales about extreme right-wingers (mostly failing right-wingers, I might add) are then injected into the narrative to make it seem that this is a successful war against government per se.


Here is an interesting thought I saw at Instapundit, "Analysis: True." "Because government is a force-multiplier for evil, a vote for the small government candidate is a vote for good." Bookworm Room blog. .

Banks and car companies are part of the government now too...so their contributions to GDP should be considered "government" gdp.

Government is definitely a force multiplier for coercive people; then it simply becomes a question of your trust distribution when it comes to people interested in competing to become coercive...

Yeah, those coercive doctors, nurses, firefighters and social workers (cops clearly deal on coercive-- but are they mostly good or bad?) are the American counterparts of the Red Guards or the SS...

You haven't seen a nurses strike yet have you.

I see no reason why you cannot pay for doctors just like any other service

Cops, too? Military? Firefighters? No public education? By the way, I pay for medical services, but I think there must be provisions to protect those who cannot afford healthcare (specially insurance against catastrophic medical bills), and so seems to think those who want Government to keep its hands off their Medicare.

This is how I, as a Californian, consider ¨Obamacare¨, iwhat I have witnessed was a propaganda drive which stated that physicians wanted to take care of patients, regardless of their ability to pay; that it was far better for us to take care of the ill, regardless of their ability to pay, owing to the idea that their illnesses would only progress if left unattended, which would result in higher costs to the health care system down the road; that taking care of the uninsured was the only humane thing to do. And so, in many instances, foreign citizens arrived to the US for free medical care, sometimes quite lengthy and costly medical care, which was predicatable. At the same time, many very wealthy corporations were able to forego health insurance for their poorly paid employees, with the public at large picking up part of their tab.
And, what all of this did, quite deliberately so, was to drive thousands of medical facilities into near bankruptcy, because the government refused to adequately compensate these institututions, so that their spiraliing costs, owiing to inadequate compensation for the medical services, they provided drove them into near insolvency. This is exactly what was intended, and it benefited the political class, because people greatly enjoyed the near free medical services, and it greatly benefited the political class, because they received a vast amount of political donations from the medical conglomerates, who were wating in the wings to buy up all of those long standing local and regional hospitals and medical facilities, which were then swept up into their national portfolios. Again, the politicians believed that this served their interests, because of the increased economy of scale which resulted, the idea being that the growing conglomerates, creating such massive monopolies, would be able to provide bulk medical care at lower costs to consumers, while these same giants would be guaranteed something that the defunct institutions were not provided in the earlier phase of the national scheme, and that is where ¨Öbamacare¨ kicks in, owing to the mandatory insurance requirements, which had not previously existed, and which are meant to serve the interests of the health care conglomerates, so that it can be said that such policies are step by step, irregardless of the political administration of the president in power, however, whenever a governent promises us transparency, and then meets behind closed doors with insurance and medical industry giants, during a press blackout, claiming that the outcome of such meetings will offer substantial benefits to the American consumer, you can be most certain that we are about to be shafted.

Of all the coercive evils I fear, the greatest is public sector teachers. They indoctrinate our children into politeness, toy sharing, anti-bullying pussiness, and even worse, try to brainwash children into thinking that there are indeed benefits from public education (whereas in fact education is merely a ploy by union teachers who secretly hate children and want to tape all their mouths shut, and just go through the sharade in order to extort money from the public, sometimes even earning a salary which is as outrageously high as the average accountant!). T

hankfully, we have an alternative in the form of private education, where the deep truths of the values of treating people like garbage, stealing toys if/when we can possibly trick anyone out of their toys, lessons learned from beating the crap out of each other and trying to drive each other to suicide on social media, and the inherent values of private sector education as opposed to public education (you see, these private sector teachers just LOOOOOVE children, as proven by the fact that they aren't Marxist extortionists who turn everyone into pussies, although we hope they will in fact earn higher money in the private sector).

But the coercive evils that really keep me up at night are street sweepers, water treatment facilities and solid waste removal (literally). On my dime! Like, who are they to coercively steal my money and allocate it to taking cigarette butts and broken glass from MY neighbourhood streets, engaging in theft of MY piss and shit, and removing all MY household trash without even asking me where to put it all!

What really makes me lose all hope for a free and just society, however, is draconian labour regulations designed for the express purpose of destroying the economy and capitalism entirely, by forbidding the freedom to contract for years on end at $0 an hour (as we all know, education provides negative knowledge, so employers need to see several years of evidence before they should be expected to part with their hard won pennies) or the freedom to enjoy being booted to the curb for any old reason whatsoever on zero notice.

I yearn for freedom. Some days the evil coercions makes me feel suicidal, but then I see videos of black thugs (unarmed yes, but that's just evidence of how thuggish they all are) getting gunned down by our disciplinarians, and this gives me hope. It disappoints me, however, that they are so pussyfooted about unarmed Muslims and Hispanics, who threaten our treasured values of freedom from government tyranny. These groups need to be taught a stronger lesson in American freedom, via God's second amendment to the American constitution, which will surely lead away us from the coercive evils referred to above.


Seriously though, I think you were saying that those with coercive intent could abuse their position via authority in government positions, and moreover seek those positions for precisely those purposes. Just playing ...

>whereas in fact education is merely a ploy by union teachers

If you disagree with that view, what is your explanation for this graph?


Teachers want to teach and genuinely care about children (there are exceptions). But they also rationally advocate for their group interests. What more is there to the story?

If the public wants to play hardball come negotiation time, we should not play dirty games to convince people that teachers are as a general rule incompetent and spiteful, rather, that there are finite resources and they simply aren't gonna get any more. (I'm not strictly convinced that teachers are generally paid too much though, although I'm pretty sure you can dig up some cases where unions have been altogether too effective in advocating for their membership.)

I support bans on both union and corporate money in politics, to prevent various things including unions giving lots of money to politicians who then go easy on them come negotiation time. Democracy should be funded by individuals, in limited amounts, not by special interest groups and multi-million dollar purchases of influence. Those special interest groups, however, should retain access to elected officials in order to make their wants/needs known in relation to their special areas of activity - just without the corrosive influence of financial campaign support.

Exactly this. This would do more to clean up politics than anything else suggested.

Teachers want to teach

Of course they do, but the worst teacher that I ever had my mother had had 30 years earlier. He could not control the class and just yelled the whole period. I had another teacher that my mother had and she was out of the class for half the day in the teachers lounge.

But I am a believer in Arnold Kling's null hypotheses so I think it does not make much of a difference and so I think we should just try to push K-12 per pupal spending back down to what it was in 1960 adjusted for inflation. I think that was about 1/2 what it is now. If people want extra cheese they should pay for it directly as it seems to help the pupils very little.

I’m not strictly convinced that teachers are generally paid too much though

Less I be misunderstood, neither do I. The cuts should be elsewhere.

Institutions evolve towards their own self-interest. That is why institutions with monopolies that have outside income (tax payer sources) unrelated to Performance evolve towards larger staffs and lower productivity. You can put all good people in an institution and get an evil or non-productive outcome.

I have yet to meet an individual who holds a master´s degee who can hold a conversation in the field of their study for more than five minutes. What I observed in university was that a great deal of indoctrination takes place, in which professors go through a process which is intended ¨to control the modes of thought and analysis¨. A lot of psychological knee jerking takes place as a result, and students further learn to submit to authrority,and to move in lock step through rote learning, or to fall behind in terms of grades and academic career.

private education, where the deep truths of the values of treating people like garbage, stealing toys if/when we can possibly trick anyone out of their toys, lessons learned from beating the crap out of each other and trying to drive each other to suicide on social media -

Are there any statistics on this? Do children in public schools behave better, share toys more often, get in fewer fights, and treat each other more kindly on social media, than those in private schools? Let's see some data.

Perhaps it wasn't clear through the sarcasm. I imagine that the social values promoted as a part of educating a child are broadly similar in both public and private education (perhaps cheerleaderism in private schools promotes a little snobbery though, but I think this is more a business decision than a desired educational output).

As an aside, I've recently adopted a new strategy with students who become (smalltime) violent in class. I watch the student on the receiving end of the attack very very carefully. When I start to berate the attacker, MOST of the time the student who gets punched is stifling smiles or even a laugh. So I lay off on the attacker, tell them not to mind the asshole who taunts them, and give severe shit to the tauntee who instigates the whole thing. I can see how this would seem troublesome, but add in some appropriate body language to communicate that the attacker should play the role of the disdainfully superior person who looks down on people who would taunt him, and perhaps it makes a little more sense.

Key point: a lot of teaching/discipline strategies are very personality specific, and there are no silver bullets.

I got the sarcasm. My point is the the actual observed behavior of public vs. private school kids kind of contradicts the point of your jesting. If you're trying to make fun of the idea that public school teachers are indoctrinating kids with bad values, you aren't picking very good examples.

Your point is well taken. It wouldn't pass the sarcasm-corrected Ideological Turing Test, to be sure.

I've definitely encountered plenty of folks who truly believe that the education system is turning children into pussies (not sure of a better word - I don't like how this implies that women are weak, but that's what they say). And the play about stealing toys relates to claims that children are being indoctrinated into socialism.

Honestly, it is not clear to me what public school teachers are supposedly indoctrinating into children. I think there are concerns that anti-discrimination principles will turn children gay or make boys want to be girls and girls want to be boys. It seems that across the population there are just some minority of people whose brains are wired in some sort of strange ways, but rather than acknowledge this, some people promote the idea that accepting them as who they implies encouraging these behaviours among people who are not wired that way (the "wired that way" being irrelevant to those who do not acknowledge any biological basis for these behaviours).

Those concerns I can sort of understand, even if I believe they are rooted in ignorance (not knowing). But the notion that public schools are indoctrinating children into Marxism or promoting anti-capitalist views, and similar such views? I just do not think that reflects reality.

I would like to better understand these perspectives, but most of the time it just does not seem grounded in any sort of experience I've ever had or observed in relation to education. (Apparently some behaviours on campus these days are a different story, but this seems to be organically student driven, for better or worse, not top-down.)

My person experience with public schooling was in Canada, so it may not apply to the US. But in that case, there was a significant amount of indoctrination with supposedly "Canadian" values, and their supposed superiority over American ones, especially universal health care and multiculturalism.

@Nathan W wimps is the word that you are looking for.

Sorry, but we created most of the mess in the Middle East, and at this point, with ISIS targetting people for mass execution, owing to their political and religious affiliation, as well as their ethnicity, they are the closest thing to NAZISM the world has seen in a long while. And, do try to recall that Jews fleeing persecution and war during the late 1930´s and into the 1940´s, were being denied entry to safe havens around the world, in fact, many nations enthusiastically deported Jews to NAZI Germany! Let us not make that mistake again.

Old people are winning if you only think in terms of fiscal policy. In terms of crime, culture, and attitudes to behavior, the median old person has long lost the battle and will therefore do their best to hang on to what they have. Citing the long term decline in crime doesn't change the fact that a lot of this has been achieved by forcing the old to relocate, which is not the same thing as controlling crime. If they lost the culture, they'll at least have the kids' money and destroy future growth. An eye for an eye.

Well then you better elect Sanders and/or Trump. They seem like the best bet to break that fiscal policy deadlock.

"not the same thing as controlling crime. If they lost the culture, they’ll at least have the kids’ money and destroy future growth."
If they really thing so (that is, if they are evil as opposed to just greed or stupid), then Amrica has an Oldster Problem and needs a Final Solution for it. Fifth--Columns must be crushed.

These old people are big winners: http://nailheadtom.blogspot.com/2012/12/californias-most-prominent-politicians.html

How about a “Dunkirk on government”?

I LOL'ed. Reminds me, in 2008 when Ron Paul was riding a populist, minarchist tide and the GOP shut him down, declaring low taxes and limited government the ideals of "angry white guys." So they nominated creaky old John McCain, who didn't campaign and lectured base on how hateful they were.

Lesson learned: vote for a strongman who hates your enemies. #Trump2016

Republican voters nominated John McCain. Ron Paul trades in goldbuggery and isolationism, both of which have their basis in historical fantasy. About 89% of Republican voters have the sense never to vote for him.

How is Isolationism a historical fantasy? The U.S. was relatively isolationist from 1790-1913 and the country was prosperous as a result. How does being the world's policeman help the average American? Why are we wasting a ton of money on hopeless middle eastern countries when the result will end up the same whether we intervene or do not intervene.

"the country was prosperous as a result."

Correlation is not causation.

"How does being the world’s policeman help the average American?"

We help keep disputes from boiling over into full scale wars. We enable a system of free trade to flourish that increases our prosperity.

"We help keep disputes from boiling over into full scale wars. We enable a system of free trade to flourish that increases our prosperity."

Wise words. I wonder if people such as yourself regret years of lost opportunity to discuss, educate and learn vs. the relentless focus on fighting the enemies from the other party.

IOW, in exchange for "free" trade, US taxpayers have to spend more on what they are euphemistically told is their "defense" than everybody else, count several thousand or more of their young men killed or maimed every ten years or so, and live in a consumptive, multicultural polity where the Pakistani who stepped off the plane with his six children 15 minutes ago is considered more "American" than them. Plus an immense national security and civil rights bureaucracy to manage all the vibrancy.

If we are going to be an Empire let's do it right, and a lot of stupid, frivolous countries can just suck it up and do what we tell them.

"the Pakistani who stepped off the plane with his six children 15 minutes ago is considered more “American” than them..."

Is this a sincere viewpoint? Do some people really feel that things are like that? In Canada, the "a Canadian is a Canadian is a Canadian" comment attracted a lot of respect. But, realistically, it takes 5 years to get citizenship, not 15 minutes, or not even a few months or year or two for that matter.

I imagine the Pakistani is routintely reminded that "you're not really one of us", although some people will feel the need to express the opposite, in part in order to provide for better integration and social relations.

How difficult is it to propser when you're busy hoovering up half of a continent that was half empty due to disease-related depopulation of the former inhabitants, all the while attracting the types who yearned for freedom from various levels of autocracy? There's more to the story than that, and I don't want to sell America short, but seriously, how hard is it?

Why wasting money in the Middle East? For starters, oil matters. Also, there is the matter of who vills the void, and if that is Russia and China this could develop unfavourably for America in the long run. As for East Asian military, fears of a turning tide leading to the eventuality of Chinese nuclear subs, destroyers and airfcraft carriers circling the American mainland are not entirely irrational. Think, like, 50 year and 100 year time frames.

That having been said, I think America spends a lot more than necessary, and sticks its nose in a lot of places it shouldn't (e.g., that long list of CIA-supported coups and civil wars that a lot of Americans like to deny or pretend never happened, or a handful of completely retarded and insanely expensive invasions - Vietnman and Iraq come to mind), at great cost both to the economy and its reputation.

For a lot of Americans, I think they just love knowing that they are the most powerful country in the world, and like regulary reminders of that in the form of unambiguous military victories (even when it's basically in the form of 100 goliaths coming together to obliterate a dzed and confused David). Also, boys and their toys line of thinking, as Trudeau put it, loving to "whip out their F-35s", whether or not it actually makes strategic sense to do so. Also, Saudi and Isareli tails wagging the American dog - we don't want to be anti-semitic and fail to do whatever Israel instructs.

that long list of CIA-supported coups and civil wars that a lot of Americans like to deny or pretend never happened,

Because they generally did not happen, except in the imagination of ideologues and the entrepreneurs who call themselves 'investigative reporters'.

" goldbuggery"

Certainly the use of rare metals for a medium of exchange has been going on for uncounted centuries while the use of fiat printed money, and now, enpixelated money that has no concrete existence, has been prevalent for a relatively short time. Why not ask the Mexicans and Argentines, to name only two among many, just how things have worked out for them with fiat money? And if " goldbuggery" is such a negative why do central banks have tons of it in storage?

Why not ask Argentines who lived through the period running from 1999 to 2004 how a currency board worked out for them?

If I pay an academic enough will they write a hagiography about American Motors, or IBM, or any other failed or failing companies?

Honest, we mean well. We over promise and under deliver by orders of magnitude, we cannot function on our revenues, we require even more intrusive means of control to accomplish less, and if they could figure out a way 3/4 of the country would happily blow our heads off. But don't worry we can control the cost of the debt we incurred, our pensions will bleed the nation dry, we can't win a war, but we have our sinecures. Proof of our excellence is the fact that Washington and surrounding counties are prospering!

Haven't these blithering fools figured out that the relocation of manufacturing and economic growth is directly caused by the high cost and inefficiency of government?

And by the way, anyone who doesn't factor in cost of regulation in the cost of government is simply prevaricating.

Tyler Cowen: If at least some of government is public goods, government should not grow in proportion to population"

How would you support this assertion?

Caplan says this a lot, arguing that adding one more immigrant doesn't require incremental defense spending or more EPA.

But empirically, it seems to be false as government grows with population, even in areas that seem superficially non-rival. Probably there are fewer public goods than we think. Defense, for example, probably really does need to grow with population.

Probably also our system is not good at figuring out what is and what isn't a public good and spending on it. It seems to err towards viewing things as public goods when they are not. The EPA might fit better here.

Environmental protection might be a public good that grows in proportion to population. This would follow, if: 1. increasing population --> 2. increasing number of transactions --> 3. increasing intensity of externalities, which cross a threshold that negatively impacts the environment. Market forces may not catch this in time. (Although simple prohibitions by law may sometimes be a less costly response than complicated regulations.)

Maybe. I don't feel really certain about it.

It usually seems to have a very local effect, which means that if I consume more environmental protection, you get no benefit and in fact have less government money to spend on your environmental protection.

If it was all about global impact, say CO2 emissions, then sure. But a lot of it is just policing factories which has no impact beyond a few thousand feet.

Are you writing about loud sound regulations?

I happened to be thinking of groundwater contamination. I've got a buddy who works in the area. But it was just an example.

What if environmental regulations increase costs of doing business in the jurisdiction and the net result is more pollution of a more dangerous kind somewhere else? The regulation could arguably have made the situation worse than when they started.

I grew up in a jurisdiction that had probably the most stringent regulations on the construction industry. You could not paint your neighbor's window frames in exchange for money unless you had a contracting license and were a qualified painter. The rationale was safety, quality and pay. The net result was that more than 50% of the construction industry was underground, not regulated at all. No taxes were collected on payrolls or profits or sales taxes, no safety regulations were followed, no fees to WCB, no building permits, etc. The construction industry is a substantial part of the economy, more than 10%, so the consequences were noticed. It took the rabble rousing by other government departments who were facing budget cuts and pointing out that there was about 5% or more of the economy not being taxed as a direct result of a flawed regulatory implementation, and the regulations were made more in tune with the reality on the ground.

I deal with a similar situation in my business. There are probably a dozen agencies who want a finger in my business, the net result is that my costs are increased. Someone did a study in the largest metropolitan area in Canada and found that only 20% of the construction projects were compliant with all the regulations. Someone who did everything according to the rules was 30% high on the bids, so you had a choice of either limiting yourself to government contracts, shrinking your business or responding to the reality on the ground. One anecdote tells of a fellow doing a project in a residence, all permits and fees paid, everything done right. In the same block there was a similar project with no permits, and his commute to the job site passed another half dozen. Every week some regulator would show up and cost him money. He took to following them around and found he was the only one that they paid any attention to. It was the last time he did any job by the book.

I honestly think these academics should get out a little more.

A more dangerous example relates to asbestos removal. Laws for removing asbestos are usually very strict, and only very expensive and large firms can meet all the requirements. So, house owners prefer to hire small contractors and never tell them about the asbestos. Not all the small contractors are naive as to the situation, but once you've neglected to spend the many many thousands of dollars to meet the bare minimum requirements, why not go all in and skip out on even a basic mask? There are definitely cases where "too much" regluation, even when very important and a seemingly amazing and necessary idea on paper, can have perverse impacts. For the asbestos example, they could make a different rule for projects < 5k, where a lot of these small contractors operate, and at least require them to wear a decent fask mask, but not go whole hog on having to get lots of special equipment and spend loads of time sealing off an entire construction site from the air.

I am afraid that none of these stories will support the assertion that government will not grow due to increased population, quite the reverse.

Couldn't it be just as true that adding one more immigrant leads to incremental increases in tax funding, which then gets hoovered up regardless of necessity?

The fact that government grows with population isn't necessarily evidence of government providing less public goods than we might otherwise expect if you can perform the trivial task of identifying alternative causal relationships.

"Couldn’t it be just as true that adding one more immigrant leads to incremental increases in tax funding, which then gets hoovered up regardless of necessity?"

That's kind of my second point (about not recognizing when spending isn't on public goods). But the typical immigrant is a big negative on the accounting ledger, with expenditures far exceeding tax revenue. This is maybe especially true of immigrants, but it's actually true of most of the population. You need to be well into the six-figure income range to pay for the government you receive. So it's not like "Hey, a new person, let's spend all the money we're getting from him!" It's like "Hey, a new person, and we've got all these capabilities sitting around that can spend money on him!"

People take up space and generate waste and not every immigrant is a PhD-level mechanical engineer from Bavaria. Third World immigrants consume EASL, subsidized lunches, worker's comp, tort, disability, court interpreters, Medicaid, EBT, policing. Caplan has no idea what he's talking about. He brags about how isolated he is.

Lord Action: "But empirically, it seems to be false as government grows with population, even in areas that seem superficially non-rival."

As the population increases--and becomes more demographically diverse--the level of general trust declines. IOW, the more of us there are, the less we trust each other. This leads to greater appeals to authority to both arbitrate disputes and take measures to try and prevent future ones. Hence, explosive growth of the regulatory state. Hence, prodigious use of the courts.

You want less government? Restore a greater level of general trust. Take steps to make sure consistent inputs result in consistent outputs. Punish cheating and "might makes right" behavior fiercely and relentlessly. Get more people to stop being assholes.

Because Trump will lead to smaller government? I rather doubt this one too.

Doesn't sound like a book worth mentioning much less reading. In fact, probably any book with a title "The War on X" is probably not worth reading.

The Hacker-Pierson premise is that 'government' made America prosper. TC expresses an oddly wishy-washy view of that definitive premise. The role of government in real world economics and economic theory is hardly a novel or neglected subject. Apparently, pro-government books are so rare, that TC feels compelled to highlight new ones for deep contemplation.

The strict libertarian position iis that government is fundamentally a negative force upon society, hindering prosperity and liberty overall. American government is enormous and steadily growing. None of the major U.S. Presidential candidates advocate smaller government; the public education system and mainstream media cannot even grasp the concept of smaller government.

It might as well have been titled: "Why conservatives are stupid and wrong and we're right. Issue #5,738"

Do we have any historical examples of successful nations with shrinking governments? No.

Go read up on the northern democracies during the 80's and 90's.

OK, not over 10-20 year periods, but over the long haul. No.

This is not meant to be a defense of that fact. But there are plenty of forces that cause it that won't go away (capture, richer countries have more money to waste, etc).


Perhaps you are unfamiliar with American historical period 1776-1789 -- quite a reduction in the original government span of control.

But how large should government be, in your view? Is there some maximum limit where you ever would firmly state that it is too big?

How about taxes -- in your opinion, is there any specific upper limit to the percentage of one's overall income that the government may rightfully seize ? (10%, 20%, 25%, 40%, 75%...110% ??)

I guess there are two kinds of people. One says what should tax be, and let's even good works run out of steam when the limit is hit. The other asks what services should be, what public goods are reasonable, and lines up funding.

Cain's 9-9-9 caught the imagination of the first group because it capped "whatever" by implication.

IMO a sane plan would work it from both ends but would rely heavily on the bottom-up. We need to decide what we want to do, and not just take less or more as slogans. For instance what does a better education system look like? Can it cost less? Where do we raise the money?

The average voter barely has the attention span to notice that there's a relationship between spending levels and taxation levels; expecting a serious conversation about more nuanced policy topics, like how that money is actually spent, seems a pipe dream.

Dodging the question is unhelpful. How big should government be?

All economic science is based on scarcity -- there are never enough resources to meet human needs and wants... priorities must be established and resources used efficiently. One cannot just ignore existing levels of resources when planning and budgeting. Optimism is good but there is no Santa Claus coming to compensate for irrationality and wild extravagance.
Have you noticed the U.S. National Debt/Deficit lately?

I could name a bundle of successful nations (the US, Canada, Denmark, France, Germany, Japan, South Korea) and note that while the range of tax burden seems large to "a political", it isn't really.

All work in practice for their citizens. All are fine with me.

One thing I don't like is the old US joke "38% tax free market, 40% socialism!"

yes, those on the left always decline to be specific about the maximum acceptable levels of government and taxation... because they usually never considered it and honest answers would undermine their perceived ideological basics.

I am not on the left, which makes your response all the more sad.

Tobias - the maximum size of government should be dictated by how well free markets serve the needs of the economy (including ethical social obligations, a politcal question rather more so than economic) and the ability of the government to effectively play roles where free markets do poorly, given existing levels of organizational/institutional competence. This will differ by cultiure, level and type of economic development, and probably a lot of non-obvious factors. Off the cuff, it seems thta 20% of GDP is woefully insufficient, but 40% is probably straying into problematic territory unless there is a fantastically good institutional structure for public sector activities (in which case, upwards of 50% doesn't seem to be disastrous in a few cases, while meeting social expectations of what the economy will deliver for the public).

This is the concept of the "fair share" of taxes.

Politicians will never, every define unambiguously what they mean by the "fair share".

It certainly IS NOT the amount that the law requires. It includes an additional "moral tax obligation".

China. However, it starts from an extreme point and I think is not instructive for most countries. Namely, the share of SEOs in the economy has declined steadily over the last 30 years and the space for free markets has coincided (virtually certain causally) with the longest run of high growth seen in the history of the planet. BUT, when looking at the expenditures that feature in discussions of smaller government in the West, such as health or social transfers, China indeed has very small government in these respects.

On the other extreme, we have example of countries with very small government like Somalia. In such cases, small government is indeed a major societal problem.

Also, Canada of the 1990s saw major declines in the size of government at the federal level, which coincided (not causally, I think) with comparatively high growth. I don't think it is remotely proven that the growth experienced in the 1980s and especially 1990s in northren democracies was causally related to retrenchment of government, although in some cases (again, Canada) it was necessary to preserve fiscal health.

"Do we have any historical examples of successful nations with shrinking governments? No. "

The UK.

The right winger element is just about which parts of government are seen as acceptable.What we are seeing is not less regulation, but different regulation, which arguably is helping us less: The ultimate, expected outcome of lobbying running amok.

Government was perceived as a force for good (space exploration, constructing interstate highways, promoting the development of computers, funding basic research) until government started helping Those People. Now, after the war on government for its sin of helping Those People, government is an army and a check book, the latter the larger function, which is to collect taxes and distribute them to the Right People, both to the obvious, seniors and doctors and hospitals, and also to the not so obvious, banks and college professors and administrators and owners of football and baseball teams and farmers. Americans celebrate Alexander Hamilton while abjuring his ideas. As is the natural propensity of people to look backward rather than forward, the world economy is quickly moving on to another phase. Of the first order, all that money shifted to places like China is finding its way back to America. http://www.nytimes.com/2016/03/15/business/dealbook/unpacking-a-chinese-companys-us-hotel-buying-spree.html?ref=business. While the world looks forward, however, American business continues to look backward, as American business continues to shift money out of America to tax havens with complex tax avoidance schemes with little or no substance. Think about the irony: Chinese business is shifting money to America while American business is shifting money out of America. One or the other is stupid; they both can't be smart.

For what it's worth I'm not sure that defense spending is best thought of as requiring a fixed expenditure regardless of the size of your economy. The bigger your economy is, the greater is your actual or potential military power, and the more will other powers seek to counter this with their own spending, or undermine you by forming alliances, backing separatist movements, funding and arming proxies, and agitating among disenfranchised minority groups.

Call it another flavor of the Hobbesian trap. Switzerland's neighbors are content to leave her alone, knowing that Switzerland is largely capable of posing a threat outside her own borders even the Swiss wanted to.

Excuse me, but why are you wasting your time reading, let alone responding to, such drivel?
Is your reading list not long enough already without adding partisan doggerel to the mix?

Because leftists who produce drivel of this sort number in the five digits and land handsomely compensated and secure jobs at research universities (this fellow Hacker) or obtrusive teaching institutions (Corey Robin). Non-leftists who do this number in the two digits and land indifferently compensated jobs at opinion magazines or the butt end of policy shops. It all makes sense if you understand that academe is status games.

I imagine that Koch-funded (and similar) research institutes pay a lot more than academia, and come with a more obvious route into very highly paid positions in the corporate world.

Lol. You would be wrong.

That's a pretty strong statement given that they don't release salary information to the public. If they don't pay more, then how do they attract people? The only alternative explanation consistent with your claim that they would be paid less is that only ideological purists with strong agendas would be hired.

Or ... you don't think that pro-business researchers in pro-business think tanks have an easier road into high corporate positions than regular academics?

That’s a pretty strong statement given that they don’t release salary information to the public.

Except that the salaries of the Chief Executives of philanthropic concerns are commonly public information, as well as data which allow you to divine typical compensation for their salaried staff. Outlets like the National Journal will collate some of this for their readers from time to time, as will Charity Navigator and Guide Star.

"Excuse me, but why are you wasting your time reading, let alone responding to, such drivel?
Is your reading list not long enough already without adding partisan doggerel to the mix?"

If you don't read what your ideological opponent writes, you probably can't effectively rebut it. And your opponent is probably correct about some of what they write.

I agree, but given the overwhelming number of opponents, it is probably more efficient to confine your rebuttals to the highest caliber opponents, than to spend a lot of time arguing with the dregs. Pearls before swine and all that.

I'm guessing that Tyler has a pretty good eye for the political importance of certain authors and their books. Plus, he reads a large volume of books. So, I'd assume he probably has a good idea of what's above his importance threshold.

I fancy I have a pretty good eye myself, and this one, just going by the title, I admit, sounds much like any of a dozen polemical political screeds that may have been written in the last year.

There are librarians at GMU who can produce bibliographies for him if he asks. You can also check references in work on the new book shelf. The Journal of Economic Literature will also have abstracts of new literature in it. It's not that difficult to find your way to the meat of the nut.

The smart money says this fellow from Yale isn't writing for Tyler Cowen. He's writing for reviewers at outlets like The New Republic or the New York Times Book Review, or writing for people in the apparat at NPR so they interview him, or writing for hacks like Mark Schmitt.

Again, irony of people on the Internet disparaging government as a source of innovation. I mean, you have to wilfully ignore history to talk about government as an evil multiplier on their wonderful invention, one empowering citizens around the world.

I am with the book's authors. Government does much good in practice, people oppose it in one of those generic slippery slope arguments. Sure the US government is mostly good NOW but ..

Tyler is making his own weak objection, that when you look at the rules keeping E Coli out of our food they are rules! And we all know rules are bad, right?

"Any Fool Can Make a Rule & Any Fool Will Mind It"

How many government rules are enough? Is there any maximum limit?

Guess how many American government rules are in force today?

A fool says 100 rules are OK, but 110 are too many.

A reasonable person puts forward specific rules to be added or removed.

One of the painfully humorous events in the Obama administration was when he put forward rule reductions, and the Right ignored him because they were too busy calling him a big socialist.

That's the tragedy of our Dunkirk.

This is a gross oversimplificaton of the libertarian position.

Libertarians aren't against all functions of government, but we want a system of simple, minimal, and universally applicable rules. There is already a rule against allowing E. Coli into the food, in the form of tort law. In fact, this system applies universally to any sort of harmful thing that might wind up in the food supply, thus there is no need to add extra additional rules specifically covering E. Coli.
Libertarians support the government's role in enforcing rights, adjudicating disputes, establishing liability for wrongs, and doing all that in a universally fair and equitable manner. What we're basically objecting to is rules that either serve no useful purpose in protecting people from harm (i.e. victimless crimes), do not apply equally to everyone (progressive taxation, regulations that narrowly target specific businesses), or favor some individuals at the expense of others (government subsidies, targeted tax breaks, and things like the regulatory mandates in the ACA).

It is certainly a cardboard argument to say old rules are good so let's draw the line now. If food safety is old and drones are new, we need no drone rules because "government?"

If a 3 year old gets run down by a drone in a park, her parents will be fully satisfied that they can sue for funeral expenses?

Or you could read Hazel's comment.

You mean at the fantasy level? Where we have tort but not a health department? I read and rejected that, replied to the real world.

So, you didn't reply to my comment then. You replied to what you wanted to reply to.

Why do we need regulations beyond tort law ? Why is that such a preposterous concept?

How does Kosher food labeling work? How does Halal work?

Sorry Hazel, even if you think a lawsuit only-system would work, it is too far off my radar. Because, I appraise the political possibility at 0%.

But if there are more urban fantasists here, dig in.

Well, not strictly lawsuit only. I would also mandate carrying some sort of liability insurance suitable to cover the possible damages consistent with the risks of whatever activity is involved. And then allow the insurance market to decide who can purchase such insurance and at what price. In other words, if nobody is willing to sell you liability insurance to cover your rat-infested restaurant, or if you cannot afford such insurance, then you don't get to open your restaurant. This creates financial incentives in the very immediate present to avoid doing things that will raise your insurance rates. So, no, you don't have to wait until after someone gets E. Coli poisoning for the market to punish unsafe practices. Anything that makes the insurance company nervous will cause your premiums to go up.

I'm sure there are soi-disant libertarians with that viewpoint. As to why most soi-disant libertarians get out of bed in the morning, most seem to be monetary cranks, or in a continual snit about the drug laws, or promoting OPEN BORDERS uber ALLES.

Yes, I do get a tad snitty about young people being sent to prison for years over victimless crimes and having their lives ruined. You've got me.

If they're getting sent to prison its likely that (1) they're in the dealer network or (2) they're recidivists or (3) both. Whether or not their lives are 'ruined' is up to them upon release.

Yes. Libertarians only want the government to do things they feel help them and not do things that help other people. The things they want are rights and things other people want are coercive theft.

(your example of tort law is hilarious considering ostensibly libertarian influenced politicians call for general "tort reform" all the time with tort reform only ever meaning "make access to the court system more difficult".)

No, we want the government to treat everyone strictly equally, regardless of any distinguishing characteristics, including how much money they make. It's not about helping US and not helping others. It's about not helping anyone, or helping everyone equally - crucially, by playing fair and adjudicating all disputes in a strictly equitable fashion. This is what actual "justice" consists of, as opposed to the kind of "justice" peddled by the left, which consists of government helping the identity group with the most votes.

Second, those politicians peddling tort reform are probably not libertarians at all. You're confusing us with conservatives.

Tort is insufficient because it can be too easily gamed, especially when you can separate corporate and individual profit/costs. Say, I run a company with e-coli risks. I rationally decide to provide socially subtopimal protection against ecoli, even in the face of tort laws which, at face value, provide sufficient protection.

How so? Especially in the early years, I can take lots of risks. With little to lose and much to gain, it really doesn't matter if you sue me for every penny I've gotten, because I don't have many pennies. I could do this socially suboptimal calculation for a long time, until I've amassed quite a lot of wealth, and eventually decide that it's worth offering the "socially correct" level of risk given "socially optimal" tort law. However, it gets worse. I can place 100% of the risk in the corporate body, pay myself a million dollars a year out of the profits as CEO, and get fantastically rich. When doomsday come, tort law comes chasing the company, the companies pays out all of its money and folds. But now I have many millions of personal dollars, so I can open a new company, rinse and repeat.

This is not irresolvable, but do you consider it as credible that a libertarian state would hold such a CEO/owner personally liable? Would a libertarian state abolish limited liability? I mean, there are some really big benefits (apparently) for the risk taking this enables.

Better to just make some explicit rules about the e-coli prevention strategies which must be implemented, imo.

I think the strategy of requiring liability insurance would cover this problem. If you can't afford to pay for the liability insurance then you can't afford to provide socially suboptimal protection against e. coli poisoning. The insurance company, presumably, is large enough that it is worthwhile to sue THEM, right? (otherwise they will get wiped out by one large claim and cease to be in the market.) And they have a profit incentive in correctly pricing the insurance. They want to make sure you pay for the risks you create, otherwise, they lose money.

To state correctly. It's worthwhile to sue you if you are covered by liability, because the insurer presumably has enough money to pay the damages.

Ah, OK, it would be that easy.

At least much simpler (and cheaper, and fairer) than attempting to craft detailed specific rules for every possible area of human activity.

We've got huge regulatory apparatuses that specify everything, right down to allowable kinds of gloves and hairnets. Surely this isn't the optimal solution.

@Hazel Meade: "Libertarians aren’t against all functions of government, but we want a system of simple, minimal, and universally applicable rules."

Baked into this statement is the assumption that people, in general, can be trusted to behave virtuously, rationally, and with foresight. The problem is that they can't. Without some kind of authority, formal or otherwise, to actively enforce a code of behavior, people degenerate into selfish, unscrupulous, dog-eat-dog behavior. Human nature, on its own, is shit.

The informal mediating institutions--local community, strong civic organizations, church, extended family, etc.--that promoted and cultivated virtue, reason, and foresight have either decayed severely or been corrupted. The state, for better or worse, has expanded into the void they left behind. You want less government? Resurrect informal mediating institutions.

You want less government? Resurrect informal mediating institutions.

I agree. But perhaps you have the cart and the horse mixed up. Those mediating institutions withered because of the state, they state didn't step in because they withered.

I agree that the state came first, withering second, but in an era where much/most economic activity is not at the local level where such traditional mediating institutions were active, this seems almost necessary (although traditional structures may stlil have an important role to play, just vastly diminished).

Is Jacob Hacker related to Andrew Hacker? The latter is quite excellent (his book Money: Who Has How Much and Why is very well written, as in pithy and to the point). Since both authors write about inequality, I bet they are somehow related.

The latter is quite excellent

It was pointed out the better part of a generation ago by Alan Wolfe that Hacker's arguments reveal him to be barely numerate.

I'm talking about a specific book, not anything else. Apparently both these guys are social scientists with the usual share of sniping I imagine.

The US had the largest economy in the world by 1900, before the Progressive/New Deal explosion of government regulation.

Federal regulation of the economy before 1900 was minimal. No income tax either.

We were already on home plate before government had any significant role.

Let me guess.

Our growth was due to immigration.

I know that's what you want to say.

Bob, if you missed the humor, the cause of the largest economy before 1900 was an ample supply of horses.

Or, you could say, that the largest economy in the middle ages was due to an ample supply of serfs.

" We were already on home plate before government had any significant role"

It was all good until that dastardly Upton Sinclair!


Why would the goal of a war on government necessarily be to shrink government? That's not really 21st century warfare, you know? Much better to degrade government's ability to perform (at least when said government is controlled by unfriendly forces).

Which, incidentally, is exactly what the American right has managed. This has been the official position of the elected leadership of the Republican party. Just because they didn't do what some oil money-funded economist in a crappy suburb of DC wants doesn't mean they're not waging a war.

Government is growing? Have you been looking at government employment levels the past 7 years? No sign of growth there.

"Government is growing? Have you been looking at government employment levels the past 7 years? No sign of growth there."

If the government is continually passing new regulations it's growing, regardless of specific pay roll numbers.

So, late to this party, but anyone want to guess how many faculty members have been added to the GMU econ. dept. in the last 2 decades? Anyone want to further guess how much that growth in taxpayer funded, lifelong guaranteed employment has cost?

And does anyone think that the expansion of his dept. at GMU represents a Dunkirk in Prof. Cowen's view?

That lifelong guarantee means they can say whatever the hell they want and not fear reprisal. Worth every penny and more. But thankfully academics are not usually very greedy.

Let me introduce you to this public policy institute - 'The Mercatus Center at George Mason University is the world’s premier university source for market-oriented ideas—bridging the gap between academic ideas and real-world problems.' That 'at' is very carefully chosen, by the way, as the Mercatus Center is explicitly free from any restrictions that taxpayer funding would entail, not being an actual part of GMU at all. Avoiding such problems as not being able to fire tenured scholars, or actually anyone they employ, for their expressed opinion.

Now let me introduce you to who is charge of a policy center explicitly created to ensure that its 'scholars' and 'academics' will always reflect exactly what the Mercatus Center represents - 'The Mercatus Center is led by a faculty director who is appointed by the provost of George Mason University. Tyler Cowen, a professor of economics at George Mason University, is the current faculty director of the Mercatus Center.'


Prof. Cowen is part of the special breed of GMU hypocrites which have infested the university in several areas since the very early 1980s. People who decry a growth in government spending, while happily cashing their taxpayer funded paychecks (there is actually a single exception to this, but that man's name is simply the sort of thing that apparently is too controversial for this web site, though one would think that he would be proudly held up as a model of libertarian virtue, if not corporate adulation).

I don't think you understand. You can't fire professors for their expressed opinions. That's the whole point of tenure, so you don't get someone come into politcal office and fire everyone who holds the "wrong" views. It is THE bedrock of intellectual freedom of the academy.

Anyways, economics if stock full of professors who decry government spending, but also enjoy both academic freedom and a lifetime guaranteed job. There is nothing whatsover special about this happenign at GMU, and anyways, TC is definitely NOT dogmatically anti-government, although he seems to be implying that maybe it's a little larger than it "needs" to be.

The presence of some number of small government advocates in the academy is a sign of good health of the academy. The contrary would be troublesome, because economics is precisely the field which is best suited to advocating for this side of the argument (well, both sides of the argument, as it were).

I'm going to read the book because it annoys me that so many people who haven't read it are trashing it. I wouldn't have minded a couple of such people chiming in, but a chorus of such people is too much. I like to get people to read books, especially ones that question their belief, and I value book recommendations in return. At least check out the sample pages before deciding.

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