Category: Political Science
Words of wisdom, from David Leonhardt
“If the long-term issue is entitlement reform,” says Joel Slemrod, a University of Michigan ist, “the fact that the political system cannot say no to $250 checks to elderly people is a bad sign.”
The full coverage is here.
Successful government bureaucracies
Jason asks:
What are some examples of successful government bureaucracies?
Wars aside, here is a short and very incomplete list: the NIH, the Manhattan Project, U.C. Berkeley, the University of Michigan, Fairfax County, the World Trade Organization, the urban planners of postwar Germany, some of the Victorian public works and public health commissions, most of what goes on in Singapore, anywhere that J.S. Bach worked.
The European Union has been very good for eastern Europe. I'll leave aside the health care issue because we've debated that plenty already. The real question is what all these examples have in common.
From the comments
Isn't it only fair that if companies can bribe and threaten politicians
(by contribution to them or their opponents), politicians should be
able to bribe and threaten companies?
The source is here, from comments on the last post. Arnold Kling comments on related matters.
Sentences to ponder
The EU, Canada, and Japan are in the aggregate much more significant trade partners than China/Mexico/Brazil. And the case for them charging us carbon tariffs seems about as good as the case for us charging the Chinese.
That is Matt Yglesias. Here is more, including a good chart on which countries are our largest trading partners.
Elinor Ostrom and the well-governed commons
Elinor Ostrom may arguable be considered the mother of field work in development economics. She has worked closely investigating water associations in Los Angeles, police departments in Indiana, and irrigation systems in Nepal. In each of these cases her work has explored how between the atomized individual and the heavy-hand of government there is a range of voluntary, collective associations that over time can evolve efficient and equitable rules for the use of common resources.
With her husband, political scientist Vincent Ostrom, she established the Workshop in Political Theory and Policy Analysis in 1973 at Indiana University, an extraordinarily productive and evolving association of students and professors which has produced a wealth of theory, empirical studies and experiments in political science and especially collective action. The Ostrom's work bridges political science and economics. Both are well known at GMU since both have been past presidents of the Public Choice society and both have been influenced by the Buchanan-Tullock program. You can also see elements of Hayekian thought about the importance of local knowledge in the work of both Ostroms (here is a good interview). My colleague, Peter Boettke has just published a book on the Ostrom's and the Bloomington School.
Elinor Ostrom's work culminated in Governing the Commons: The Evolution of Institutions for Collective Action which uses case studies to argue that around the world private associations have often, but not always, managed to avoid the tragedy of the commons and develop efficient uses of resources. (Ostrom summarizes some of her findings from this research here). Using game theory she provided theoretical underpinnings for these findings and using experimental methods she put these theories to the test in the lab.
For Ostrom it's not the tragedy of the commons but the opportunity of the commons. Not only can a commons be well-governed but the rules which help to provide efficiency in resource use are also those that foster community and engagement. A formally government protected forest, for example, will fail to protect if the local users do not regard the rules as legitimate. In Hayekian terms legislation is not the same as law. Ostrom's work is about understanding how the laws of common resource governance evolve and how we may better conserve resources by making legislation that does not conflict with law.
Can a Nobel Peace Prize make peace harder to achieve?
David Axelrod spoke:
“I’d like to believe that winning the Nobel Peace Prize is not a political liability,” said David Axelrod,
a senior adviser to Mr. Obama. “But this isn’t something I gave a
moment of thought to until today. Hopefully people will receive it with
some sense of pride. But I don’t know; it’s uncharted waters.”
Putting aside domestic responses, can holding a Peace Prize make it harder to bring about peace? I believe the answer is yes. The positive scenario is that holding the Prize signals strength and induces other bargainers to jump aboard your winning bandwagon, for fear of being locked out of an eventual agreement. The more negative scenario arises when the Prize holder is expected to pressure Country X, Ruritania. If the Prize holder secretly wishes to favor Ruritania in negotiations, a President without a Prize can to some extent feign or credibly signal weak bargaining power: "I'm sorry, Ruritania just won't budge; you'll have to move closer to their position." It's harder for the Prize holder to send this same signal, since everyone expects him to get Ruritania to budge (if not, the Prize holder also doesn't have any bargaining advantages either). The Prize holder may find it harder to deal with truly intransigient nations; fortunately we don't have many of those in the world right now.
Related arguments are that a Prize can make it harder to practice strategies of "creative ambiguity" or "low expectations."
David Frum suggests the Prize makes it harder for Obama to be hawkish.
China committee of the day
Today's Financial Times writes about the Central Organization Department of China:
To glean a sense of the dimensions of the organization department's job, conjure up a parallel body in Washington. The imaginary department would oversee the appointments of US state governors and their deputies; the mayors of big cities; heads of federal regulatory agencies; the chief executives of General Electric, Exxon-Mobil, Walmart and 50-odd of the remaining largest companies; justices on the Supreme Court; the editors of The New York Times, The Wall Street Journal and The Washington Post; the bosses of the television networks and cable stations; the presidents of Yale and Harvard and other big universities and the heads of think-tanks such as the Brookings Institution and the Heritage Foundation.
All equivalent positions in China are filled by people appointed by the party through the organization department.
I would not want to be on the bad side of the Central Organization Department. The full article, which is interesting throughout, is here. It's also related to why I don't see China just evolving into a normal democracy.
“Too big to take a pay cut”
Here is my latest column. It's about how politicization is behind the financial crisis (in part), why we haven't learned very much from the financial crisis, why we are treating the health care sector just as we have been treating the banks, and why Atlas Shrugged is selling so many more copies.
Excerpt:
We should stop using political favors as a means of managing an
economic sector. Unfortunately, though, recent experience with health care reform
shows we are moving in the opposite direction and not heeding the basic
lessons of the financial crisis. Finance and health care are two
separate issues, of course, but in both cases we’re making the common
mistake of digging in durable political protections for special
interest groups.
One disturbing portent
came over the summer when it was reported that the Obama administration
had promised deals to doctors and to pharmaceutical companies under the
condition that they publicly support health care reform. That’s another
example of creating favored beneficiaries through politics.
If these initial deals are falling apart, it is only because reform
met with unexpected resistance. Even after Mr. Obama’s speech Wednesday
night, we’re still at the point where the medical sector is enshrined
as “too big to take a pay cut,” which is not so far removed from the
banking motto of “too big to fail.” In finance and health care, a
common political dynamic has created similar trends, namely,
out-of-control costs, weak accountability, and the use of immediate
revenue patches to postpone dealing with fundamental problems.
Even
worse, these political deals threaten open discourse. The dealmaking
may be inhibiting some people in health care from speaking out in
opposition to the administration’s proposals. Robert Reich, who served
as secretary of labor in the Clinton administration, deserves credit
for complaining about this arrangement, but not enough people are asking where such dealmaking might stop.
The banking sector has been facing similar constraints; if bankers criticize the Treasury
or the Fed, they risk losing their gilded cages and could get a bad
deal when the next bailout comes. When major economic sectors can be
influenced in this way, are we really very far from the nightmare
depicted by Ayn Rand in “Atlas Shrugged”?
The conclusion is this:
In short, we should return both the financial and medical sectors and,
indeed, our entire economy to greater market discipline. We should move
away from the general attitude of “too big to take a pay cut,”
especially when the taxpayer is on the hook for the bill. If such
changes sound daunting, it is a sign of how deep we have dug ourselves
in. We haven’t yet learned from the banking crisis, and we’re still
moving in the wrong direction pretty much across the board.
The French carbon tax
France is finding is hard to pass a stiff carbon tax, though of course they already use lots of (non-carbon) nuclear power:
Details are finally emerging about the country’s planned “carbon tax,” to be put in place next year. And the idea is anything but popular.
The center-right French government wants to levy a tax of 14 euros per ton of carbon dioxide starting in 2010; carbon taxes are popular with many economists and business leaders because they are seen as easier to implement than carbon-trading plans, which France also belongs to.
In reality, France’s carbon tax is basically just a gasoline tax–and a tiny one at that. The electricity sector, overwhelmingly powered by emissions-free nuclear power, isn’t part of the plan [TC: Duh!], Prime Minister Francois Fillon told Le Figaro. The tax will basically fall on liquid fuels–raising pump prices 3 euro cents a liter (that’s roughly 15 U.S. cents a gallon).
In theory it will be revenue-neutral but most French voters are nonetheless opposed to the measure. Here is further information:
Large CO2 emitters, such as oil refiners and steel makers, will be exempted from paying the new tax. The government will propose special compensations for fishermen, farmers and truckers…
What is conservatism?
I've already done What is Progressivism? so here is another installment. This isn't what conservatives today necessarily believe, it's a retranslation of a mishmash of conservatism into a language which I can understand and, in part, present to others. Here goes:
1. Evil is real and there exist evil nations in the world; the relatively virtuous Western powers require strong states to fend off such evils. This distinct from "big government" in the sense advocated by modern liberals.
2. In international affairs, in the twentieth century, the United
States in particular has been unselfish to a remarkable degree. We
therefore should trust the United States with unprecedented power. In
fact we have no alternative. Some cultures really are better than
others.
3. The spread of nuclear weapons, and other forms of WMD, to irrational, evil and undeterrable
powers is the number one foreign policy issue. It runs the risk of
equalizing the balance of power between virtuous and evil agents in the
world.
4. On the domestic front, education is the keystone issue. Societies succeed if strong family structures support an emphasis on learning and acculturation. While this does not rule out public sector education, if public sector education works the credit is not to be found in the public sector.
5. When in doubt, side with the laws and customs that have, over time,
been associated with the Western powers and their growth into powerful
and durable societies. It's hard to judge a lot of customs using pure,
unadulterated reason, as Oakeshott and Hayek have suggested. Defending traditional values is an enterprise which itself requires a mix of law and custom. If you're focused mainly on "policy proposals," you are missing the point.
7. We do not have either the resources or the norms to remake society in the direction of a fully-comfortable-for-everyone social democracy. We do need welfare states to keep a polity in running order, but we should be modest about what such regimes can accomplish. They cannot overcome a fundamental lack of proper values as found in many poor or disadvantaged communities.
8. Fiscal conservatism is part and parcel of conservatism per se. A state wrecked by debt is a state due to perish or fall into decay. This is a lesson from history. States must "save up their powder" for true crises and it is a kind of narcissistic arrogation to think that the personal failures of particular individuals — often those with weak values — meet this standard.
9. For conservatism, small government is a means, not an end. It is a means to the values which lie behind Western civilization and it is a means toward the prosperity we need to live well and defend ourselves. Capitalism is important but capitalism itself relies upon particular values held by the citizenry.
10. Responsibility is a more important value than either liberty or equality.
Here is Julian Sanchez on what such exercises might mean. I don't know exactly what they mean. For me they are a means of thinking through ideas.
Addendum: Arnold Kling comments.
What if John Kerry had won?
A loyal MR reader writes to me:
I love when you think through counterfactuals, so here’s
one that’s been on my mind. Imagine John Kerry wins in 2004. What are
the implications for the 2006 midterms and more importantly the 2008
presidential election? We probably pull out of Iraq without ever attempting the
surge, and leave the country in chaos. But more importantly, the housing
bubble collapses on a Democrat's watch, not [a] Republican's. Regardless of what
anyone says, the housing bubble was going to burst. Maybe the collapse takes a
different path under Kerry than Bush, but it still happens, leaving his administration
to deal with it. Does he win re-election? Is McCain still the Republican
candidate? And what becomes of a little known back bencher named Barack Obama?
I am sorry to disappoint such an excellent reader but I genuinely do not know what would have happened, if say Kerry had been more personally appealing to more voters (that counterfactual more or less holds constant other factors which are more directly political). I do know this is a reason why I think it is very hard to forecast the net impact of a single election. Do you remember the furor and then the agony from 2004?
China hunch of the day
My hunch is that consciously or subconsciously, the urban residents of
China are not thrilled by the idea of a pure democracy that would
effectively turn the country over to the rural poor.
That's Scott Sumner and the post is interesting throughout.
Will there be another Milton Friedman?
Dan Klein, guest-blogging at AustrianEconomists, poses the question and says no, there will not be a classical liberal advocate of comparable stature. At least not anytime soon:
With
the postwar re-awakenings, bold thinkers defied the cultural ruts of
their times. They rediscovered pieces of the liberal understanding.
Mises, Hayek, Friedman, Buchanan, Tullock, Rothbard, Kirzner, Alchian,
Sowell, Coase, Bauer, Simon and Demsetz developed new statements of
parts of liberal wisdom. Because it had been dead and buried, it now
seemed fresh and original. They earned status as epic figures by fresh
pioneering and academic kudos. But what they formulated and taught to
all of us was the low-hanging fruit of all that had been forgotten. I’m
not saying that everything they teach had been taught 150 years prior.
But a lot of it had, and the basic verities pretty much all had….
I don’t think that a clone of Milton Friedman could today become Milton Friedman. To get on in Econ he’d have to do a lot more math, and identify with “normal scientists.” Back in the day, Hayek, Coase, and Buchanan could eschew math and still end up with Nobel prizes. Not today.
Normal scientists won’t embrace you academically if you don’t seem like their
kind. You would have to become their kind. You wouldn’t develop liberal
vision and motivation. Or, if you did you wouldn’t become first among
your peers at a top department (even, that is, if you had the
endowments of a Milton Friedman).
The culture generally is becoming more fragmented, because of technology. But technology is making the academic discipline more integrated and monolithic, even at the international level. There is no “freshwater” vs.
“saltwater” and so on. It is like the baseball player market, one big
pyramid. The top departments are alike and the rest strive to maintain
their standing in the pyramid.
Regardless of academic standing, how is the modern clone of Milton Friedman to cut
a figure? The low-hanging fruit has been plucked and digested by the
liberal movement. A new young brilliant dynamo could write a nice book
like Free to Choose or Road to Serfdom, but who would care? It’s all available in another dozen books that have appeared since 1960.
There is more at the link and of course you can see the link to David Hume's ideas about the posts of honour being filled. I agree with Dan.
How to deal with power-addicted politicians
This has been a fruitful dialog. Two days ago Matt Yglesias made a list of how progressives should respond to the public choice critique of big government:
– This is why it’s important to be a civil libertarian and to be much
more skeptical than the political/media mainstream is of the idea that
what’s at stake in these debates is really a “balance” between a
“security” imperative and some airy “values.” It is overwhelmingly
likely that various secret police powers are simply going to be abused,
rather than put to some productive-but-liberty-infringing use.
– This is also a reason to be skeptical of ideas about discretionary regulatory fine-tuning. You always could
improve outcomes by abandoning rigid rules (with “do what you want”
counting as a rigid rule) but in practice you probably won’t.
– I think this also counts on a reason to prefer systems that rely more on career civil servants
and less on political appointees. Bureaucrats have their own
distinctive psychopathologies, but they’re different, and it’s helpful
to have them in more tension and balance than exists in the United
States.
– It’s also important to have in place systems for effective
monitoring of elected officials. A Canadian voter elects one federal
official–a Member of Parliament. An American elects four–a President,
two Senators, and one Representative. Americans don’t have four times
as much time as Canadians to pay attention to what politicians are
doing or to learn the issues; our politicians are just being monitored
less. When you consider the proliferation of things like independently
elected school boards, district attorneys, sheriffs, etc. keep in mind
that this diffusion of responsibility is a good way for the egomaniacal
to evade responsibility.
– If that leaves us with too few veto points, the thing to do is not to have additional houses of legislature, but Swiss-style (as opposed to California-style) direct democracy, where the actions of a unicameral legislature can be checked by the voters.
I agree with much of the list (for one thing, however, I think voting for a fewer number of politicians will have a very small beneficial effect in terms of voter attention); the question is what should be added to it. "Smaller government" is a question-begging answer even if you favor that outcome. It's a list of what will get you to better governmental outcomes, whatever you think those might be.
The addictions of fame and power
Matt Yglesias writes:
At the same time, I’ve come to be increasingly baffled by the high degree [of] cynicism and immorality
displayed in big-time politics. For example, Senators who genuinely do
believe that carbon dioxide emissions are contributing to a global
climate crisis seem to think nothing of nevertheless taking actions
that endanger the welfare of billions of people on the grounds that
acting otherwise would be politically problematic in their state. In
other words, they don’t want to do the right thing because their
self-interest points them toward doing something bad. But it’s
impossible to imagine these same Senators stabbing a homeless person in
a dark DC alley to steal his shoes. And what’s more, the entire
political class would be (rightly!) shocked and appalled by
the specter of a Senator murdering someone for personal gain. Yet it’s
actually taken for granted that “my selfish desires dictate that I do
x” constitutes a legitimate reason to do the wrong thing on important
legislation.
Making it all the odder, the level of self-interest at stake isn’t
all that high. Selling the public good down the river to bolster your
re-election chances isn’t like stealing a loaf of bread to feed your
starving children. The welfare rolls are hardly stocked with the names
of former members of congress. Indeed, it’s not even clear that voting
“the wrong way” poses particularly serious threats to one’s
re-election. But even if it did, one might assume that people who
bother to dedicating their lives to securing vast political power did
so because they actually wanted to accomplish something and get in the history books, perhaps, as one of the big heroes of their era.
I don't intend any particular point about cap and trade, but viewed more generally it's stunning how true this is. (In fairness, note that the title of this post is my framing, not necessarily Matt's.) Many people — especially those who become politicians — really do want fame and power and it is amazing what they will talk themselves into to get there and to stay there. They don't even want fame in the sense of being recognized, in the longer run, for having done the right thing. They want more personal influence and power now.