Category: Political Science
I call this Mill’s Conjecture:
High wages and universal reading are the two elements of democracy; where they co-exist, all government, except the government of public opinion, is impossible.
That is from Mill’s State of Society in America. But is it true about China?
What are the best books and articles to read on this public choice topic? I am not looking for critiques of democracy per se. Your recommendations would be most welcome, government, corporate, and non-profit settings are all welcome…
“Any organization not explicitly and constitutionally right-wing will sooner or later become left-wing.”
That is the topic of my latest Bloomberg column, here is one excerpt:
Additional forces strengthen Conquest’s Second Law. Educational polarization increasingly characterizes U.S. politics, with more educated Americans more likely to vote Democratic. Those same Americans are also likely to run nonprofits or major corporations, which would partially explain the ideological migration of those institutions.
There are, of course, numerous U.S. institutions that have maintained or even extended a largely right-wing slant, including many police forces, significant parts of the military, and many Protestant Evangelical churches. Those institutions tend to have lower educational requirements, and so they are not always so influential in the media, compared to many left-wing institutions.
Furthermore, the military and police are supposed to keep out of politics, and so their slant to the right is less noticeable, although no less real. The left is simply more prominent in mass media, so Conquest’s Second Law appears to be truer than it really is. (Note that by definition the law excludes explicitly right-wing media.)
The common thread to these explanations is that left-wing views find it easier to win in spheres of reporting, talk and rhetoric — and that those tendencies strengthen over time.
It follows that, if Conquest’s Second Law is true, societies are more right-wing than they appear. Furthermore, it is the intelligentsia itself that is most likely to deluded about this, living as it does in the world of statements and proclamations. It is destined to be repeatedly surprised at how “barbarian” American society is.
There is also a significant strand of right-wing thought, most notably in opposition to Marxism, that stresses the immutable realities of human nature, and that people change only so much in response to their environments. So all that left-wing talk doesn’t have to result in an entirely left-wing society.
Conservatives thus should be able to take some comfort in Conquest’s Second Law. They may find the discourse suffocating at times. But there is more to life than just talk — and that, for liberals as well as conservatives, should be counted as one of life’s saving graces.
The data set used by Paul and Sridhar starts with the year 1960, when per capita income in Tamil Nadu was 51 per cent higher than UP’s. In the early 1980s, this difference had narrowed to 39 per cent. However, over the following decades the gap began to rapidly grow, and in 2005 an average resident of Tamil Nadu earned 128 per cent more than an average resident of Uttar Pradesh. (Statistics available online suggest that by 2021 the gap has increased to almost 300 per cent.)
Taking the South as a whole and the North as a whole, the book found that while the two regions differed only by 39 per cent in terms of per capita income in 1960-61, forty years later the gap had widened to 101 per cent. Now, in 2021, the gap has widened much further. Currently, the average annual per capita income of the four northern states profiled by Paul and Sridhar is about US $4,000, and of the four southern states, in excess of US $10,000, or roughly 250 per cent higher.
The data analysed by Paul and Sridhar show that there are two areas in which the South has done much better than the North. First, with regard to human development indicators such as female literacy rate, infant mortality and life expectancy. Second, in areas critical to economic development such as technical education, electricity generation, and quality and extent of roads. The first set of factors prepares healthier and better educated citizens to participate in the modern economy, while the second set enables much higher rates of productivity and efficiency in manufacturing and services.
Paul and Sridhar also found that the South fares substantially better than the North on governance indicators.
From causes which might be traced in the history and development of English society and government, the general habit and practice of the English mind is compromise. No idea is carried out to more than a small portion of its legitimate consequences. Neither by the generality of our speculative thinkers, nor in the practice of the nation, are the principles which are professed ever thoroughly acted upon; something always stops the application half way. This national habit has consequences of very various character, of which the following is one. It is natural to minds governed by habit (which is the character of the English more than of any other civilized people) that their tastes and inclinations become accommodated to their habitual practice; and as in England no principle is ever fully carried out, discordance between principles and practice has come to be regarded, not only as the natural, but as the desirable state. This is no an epigram, or a paradox, but a sober description of the tone of sentiment commonly found in Englishman. They never feel themselves safe unless they are living under the shadow of some convention fiction — some agreement to say one thing and mean another.
That is from Mill’s Vindication of the French Revolution of February 1848.
That is the topic of my latest Bloomberg column, here is one excerpt:
Japan seems to be approaching its energy infrastructure with politics at the forefront. It is making a big bet on hydrogen power, which is technologically iffy and expensive, currently about eight times more so than natural gas. Yet Japanese leaders are aware that Japan does not have its own solar power industry at scale, making the country dependent on China for solar panels. Hydrogen can also be used by existing (though modified) power plants, which both reduces cost and eliminates the need for new infrastructure. And if this all works, Japan could become known as the world leader in hydrogen power.
Greenpeace has criticized the Japanese approach, saying that its ammonia-reliant formula for hydrogen power is costly and will itself create greenhouse-gas emissions. That critique may well be right, but it’s also possible that Japan is thinking through the political questions at a deeper level.
The most relevant question about green energy isn’t necessarily about technology or cost. It may be about politics: “How many special-interest groups support this idea?” If there isn’t a decent answer, then maybe the idea doesn’t stand a decent chance.
There is much more at the link, including a consideration of other alternative energy sources.
Swiss-based multinationals such as commodities trader Glencore will receive subsidies and other incentives under plans Switzerland is drawing up to maintain its competitive tax rates, even as the country prepares to sign-up to the G7’s new plan for a global minimum tax on big businesses.
Bern is consulting its cantonal governments — which set their own corporate tax rates — to examine how measures such as research grants, social security deductions and tax credits could create a “toolkit” to offset any changes to headline tax rates, officials told the Financial Times.
Here is the full FT story by Sam Jones.
…democratic rule and high state capacity combined produce higher levels of income inequality over time. This relationship operates through the positive effect of high-capacity democratic context on foreign direct investment and financial development. By making use of a novel measure of state capacity based on cumulative census administration, we find empirical support for these claims using fixed-effects panel regressions with the data from 126 industrial and developing countries between 1970 and 2013.
The Californians have not been solely occupied with “the diggings.” They have found time also to construct a set of institutions…It is worthy of remark how instantaneously any body of American emigrants, as soon as they have formed a settlement, proceed to make a constitution; though European authorities of no small account in their own estimation, are never tired of assuring us that constitutions cannot be made. But while these sages are stoutly denying the possibility of motion, the Americans, one after another, like Diogenes, rise up and walk; and not one stumble has occurred to mar the completeness of the practical confutation. Whatever other faults have been found with the Anglo-American constitutions, no one has yet said that they will not work; a fate so often denounced against all constitutions except those which, like the British, “are not made but grow,” or, it should rather be said, come together by the fortuitous concourse of clashing forces.
Mill in particular praised that the California Constitution gave women the right to own their own property. From the Toronto edition of the Collected Works, vol.XXV.
Often yes, but this is a shibboleth of economics that doesn’t always fit the facts, as has been illustrated starkly by our behaviors during the pandemic. Many people have taken too much risk, or been too risk-averse, even with high stakes on the line. Here is one excerpt from my recent Bloomberg column:
You might wonder why we are getting these big, important decisions so wrong. I have at least two hypotheses. One is that anxiety causes people to make worse decisions. Facing the danger of a deadly pandemic, for example, the higher stakes might induce me to shift into denial, if only to protect my sanity and peace of mind. I might make worse decisions than if I were simply trying to avoid the common cold, for which the stakes are far lower.
My other hypothesis involves identity and the desire for belonging. It is no accident that red states in the U.S. are under-vaccinated relative to blue states; vaccine skepticism is in part an identity marker for Trump supporters. People tend to see big decisions as more important in shaping their identity than small ones. In essence, the significance of a decision induces all kinds of surrounding social forces to “infect” that decision with partisan influences, and that decision in turn becomes a truly credible signal of what we believe.
For most economic decisions, people do still make better choices when the stakes are higher — but this isn’t a universal principle. Are you so sure, for example, that decisions about who to marry are made more rationally than those about which TV show to watch? Maybe they are, but it’s not entirely obvious.
Note that it is now much easier to make good small stakes decisions, largely because of the internet:
An accompanying change is that low-stakes decisions are easier than ever, due largely to the internet, with one crucial caveat: The decision-maker must be relatively rational. Several decades ago, if you wanted to figure out the best paper towels to buy, you might have asked around and then collated a lot of information yourself. These days it is easy enough to search the internet for the answer. Or consider the example of credit-card rewards, which are far easier to collect, manipulate and use because of the internet.
The danger of course is that the sum of all these smaller triumphs convinces people that they are rational about big dilemmas too — despite the fact that they choose rather poorly on some of them. We are not used to a world where we are worse at big decisions than the small ones. But it has been hurtling our way for some while now.
Recommended. I also cite this: “Bryan Caplan, a colleague who studies human rationality, has put the individual Covid response in only the second percentile of “my initially mediocre expectations.””
Here is Ross Douthat at the NYT:
…there’s a pretty big difference between a world where the Chinese regime can say, We weren’t responsible for Covid but we crushed the virus and the West did not, because we’re strong and they’re decadent, and a world where this was basically their Chernobyl except their incompetence and cover-up sickened not just one of their own cities but also the entire globe.
The latter scenario would also open a debate about how the United States should try to enforce international scientific research safeguards, or how we should operate in a world where they can’t be reasonably enforced.
I agree, and would add one point about why this matters so much. “Our wet market was low quality and poorly governed” is a story consistent with the Chinese elites not being entirely at fault. Wet markets, after all, are a kind of atavism, and China knows the country is going to evolve away from them over time. They represent the old order. You can think of the CCP as both building infrastructure and moving the country’s food markets into modernity (that’s infrastructure too, isn’t it?), albeit with lags. “We waited too long to get rid of the wet markets” is bad, but if anything suggests the CCP should have done all the more to revolutionize and modernize China. In contrast, the story of “our government-run research labs are low quality and poorly governed”…that seems to place the blame entirely on the shoulders of the CCP and also on its technocratic, modernizing tendencies. Under that account, the CCP spread something that “the earlier China” did not, and that strikes strongly at the heart of CCP legitimacy. Keep in mind how much the Chinese apply a historical perspective to everything.
A number of you have asked me what I think of the lab leak hypothesis. A few months ago I placed the chance of it at 20-30%, as a number of private correspondents can attest. Currently I am up to 50-60%.
I will be doing a Conversation with him. So what should I ask?
You will note that Niall has a new book out Doom: The Politics of Catastrophe.
Here is the audio, video, and transcript, definitely recommended. Here is part of his closing statement:
COWEN: Last question. You wake up each morning. Surely you still think about central banking. What for you is the open question about central banking, where you don’t know the answer, that you think about the most?
CARNEY: I gave a speech at Jackson Hole on this issue, and I started — which is the future of the international monetary system and how we adjust the international monetary system.
I’ll say parenthetically that we’re potentially headed to another example of where the structure of the system is going to cause big problems for the global economy. Because it’s quite realistic, sadly, that we’re going to have a fairly divergent recovery with a number of emerging, developing economies really lagging because of COVID — not vaccinated, limited policy space, and the knock-on effects, while major advanced economies move forward. That’s a world where rates rise and the US dollar strengthens and you get this asymmetry, and the challenge of the way our system works bears down on these economies. I think about that a lot.
COWEN: If you’re speaking in a meeting as the central bank president, do you prefer to speak first or speak last?
CARNEY: I prefer — I tend to speak early. Yes, I tend to speak early. I’m not sure that’s always the best strategy, but I tend to speak early. I will say, one thing that’s happened over the years at places like the G20, I noticed, is the prevalence of social media and devices. The audience drifts away over time, even at the G20, even on a discussion of the global economy.
And from the horse’s mouth, so to speak, do note this:
CARNEY: …I think you’re absolutely right on that, there wasn’t. It is revealed that there wasn’t a liquidity trap.
Rooftops! Finally, on more important matters:
COWEN: Are the Toronto Raptors doomed to be, on average, a subpar NBA team due to higher taxes?
COWEN: What’s the best Clash album?
CARNEY: Fantastic question. London Calling, and one of my best memories — I was very fortunate; they came to Edmonton when I was in 12th grade in high school. I went to the concert and that was fantastic, yes.
COWEN: I also saw them, I think in what would have been 12th grade had I been in school that year. But London Calling is too commercial for me. I much prefer the Green album, like “Career Opportunities,” “Janie Jones.”
CARNEY: Well, “I Fought the Law” was the best song at the concert. I have to say, they had got to Combat Rock by this time, which was relative — [laughs] Combat Rock was more commercial, I thought, than London Calling, although they threw it all out the door with Sandinista!
Again, here is Mark’s new book Value(s): Building a Better World For All.
… a substantial share of Americans express readiness to sell their votes for cash: 12% of respondents would do so for just $25, as would nearly 20% for $100. Citizens who place low importance on living in a democracy are significantly more willing to sell their votes…
The British were obliged to design a state structure in India virtually from scratch, because the one Warren Hastings lashed together between 1772 and 1784 was considered to have failed. He had tried to adapt traditional Indian practice while adding a British top layer to it, but this compromise never worked well. Absence of supervision, abundant temptation, scarcity of reliable information and poor communication between Calcutta and the mofussil (rural areas) created multiple problems. When placed in Indian shoes, Europeans often behaved worse than their native predecessors. Hastings’s system lacked discipline, so British politicians resolved in the early 1780s to supply standards and enforce them. Pitt’s India Act of 1784 and the Cornwallis Code of 1793 were the results.
Traditional ruling practices in India were replaced by specific rules, designed to reduce personal discretion. What the British most feared in their own rulers — arbitrary power — they were determined, at least initially, to deny to those placed in authority in India.
Just as the US Constitution was designed to thwart the central executive, so the objective of the Cornwallis system of 1793, its near contemporary, was to restrain the EIC’s [East India Company’s] servants in India. The collective self-regulation that it set up, by means of boards and committees, worked fairly well in enforcing honesty within government in India after 1784, but not in achieving efficiency. Day-to-day government was not facilitated, and judicial decisions slowed to a crawl. Meanwhile tax revenues, instead of sticking to British fingers, stayed somewhere out in the rural areas, hid behind an opaque wall of legal and customary technicalities.
That is from Roderick Matthews’s excellent Peace, Poverty and Betrayal: A New History of British India. Here is my previous post on the book.