Quiggin, defended vehemently by Daniel Davies in the comments, then concluded (quelle surprise!) that regulators should be empowered to interfere with markets so as to correct these sorts of irrationalities, e.g. by imposing capital controls. Extensive debate ensued. James Surowiecki brought up, but didn’t do much with, the question of how to choose such regulators, and the impact of the choice process on the expected effectiveness of the regulators at (so to speak) beating the market.

Seems to me Converse’s work provides a powerful elucidation of Surowiecki’s point, and a devastating critique of Quiggin’s conclusion. For the irrationality-correcting regulators must either be chosen by representative-democratic processes, or some other way. If the former, you run up against the fact that democratic processes suffer from a much bigger helping of the same irrationalities the regulators are supposedly going to correct. If the latter, you have to try and legitimate a non-democratically-chosen regulator in a democracy-loving world.

I think pragmatism is something libertarians–with the notable exception of Richard Posner–have unfortunately ignored, probably as a result of the influence of Objectivism (as I’m sure you know, in Objectivist circles, calling someone a pragmatist is about the worst possible thing you can say).

I think it’s also a function of libertarians calling themselves “individualists” as opposed to “collectivists”, which gives the wrong impression and leads to nonsense like this.

I like your comment about pragmatism. The Deweyan idea that piecemeal experimentation can solve the predicaments of social life fits better with a Hayekian view of markets than with a Rousseauean view of democracy.

Well, what are your points of comparison? Democracy may be superior to monarchy (although Hoppe makes some good arguments to the contrary), party dictatorship, aristrocracy, feudalism, etc. But surely democracy is not superior to markets? Insofar as a given issue can be addressed by market exit or by democractic voice, shouldn’t we always prefer exit? In cases where you believe legitimate public good arguments hold–military defense, for example–and where government failure is less-bad than market failure, that and that alone is a reason to prefer democracy to the alternatives. But I think those cases are few and far between, and I lean toward non-existent.

It’s reassuring to see Menand express skepticism about the wisdom of political voice. In the Metaphysical Club and Pragmatism: A Reader, he seems to side with his fellow pragmatists like Rorty and Dewey who can’t sing enough hoshanas about the wonderfullness that is democracy. The pragmatist project should really be stressing the wisdom of crowds and social groups, and not necessarily the wisdom of specific political mechanisms.

Well, what are your points of comparison? Democracy may be superior to monarchy (although Hoppe makes some good arguments to the contrary), party dictatorship, aristrocracy, feudalism, etc. But surely democracy is not superior to markets? Insofar as a given issue can be addressed by market exit or by democractic voice, shouldn’t we always prefer exit? In cases where you believe legitimate public good arguments hold–military defense, for example–and where government failure is less-bad than market failure, that and that alone is a reason to prefer democracy to the alternatives. But I think those cases are few and far between, and I lean toward non-existent.

It’s reassuring to see Menand express skepticism about the wisdom of political voice. In the Metaphysical Club and Pragmatism: A Reader, he seems to side with his fellow pragmatists like Rorty and Dewey who can’t sing enough hoshanas about the wonderfullness that is democracy. The pragmatist project should really be stressing the wisdom of crowds and social groups, and not necessarily the wisdom of specific political mechanisms.

I like your comment about pragmatism. The Deweyan idea that piecemeal experimentation can solve the predicaments of social life fits better with a Hayekian view of markets than with a Rousseauean view of democracy.

I think pragmatism is something libertarians–with the notable exception of Richard Posner–have unfortunately ignored, probably as a result of the influence of Objectivism (as I’m sure you know, in Objectivist circles, calling someone a pragmatist is about the worst possible thing you can say).

I think it’s also a function of libertarians calling themselves “individualists” as opposed to “collectivists”, which gives the wrong impression and leads to nonsense like this.

Quiggin, defended vehemently by Daniel Davies in the comments, then concluded (quelle surprise!) that regulators should be empowered to interfere with markets so as to correct these sorts of irrationalities, e.g. by imposing capital controls. Extensive debate ensued. James Surowiecki brought up, but didn’t do much with, the question of how to choose such regulators, and the impact of the choice process on the expected effectiveness of the regulators at (so to speak) beating the market.

Seems to me Converse’s work provides a powerful elucidation of Surowiecki’s point, and a devastating critique of Quiggin’s conclusion. For the irrationality-correcting regulators must either be chosen by representative-democratic processes, or some other way. If the former, you run up against the fact that democratic processes suffer from a much bigger helping of the same irrationalities the regulators are supposedly going to correct. If the latter, you have to try and legitimate a non-democratically-chosen regulator in a democracy-loving world.