Monthly Archives: February 2009

The Promise of Liberaltarianism

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I very much liked this passage from Mark Thompson at The League of Ordinary Gentlemen:

[I]n order for libertarians to more consistently act as political free agents, or even to sign on to a coalition with the political Left, something else will need to happen to free libertarian philosophy from the predispositions that have resulted from such a lengthy alliance with the political Right.  

I would propose, then, that the “something” to which I refer is “liberaltarianism,” “soft Hayek” as Jim Henley calls it, or “actual Hayek” as I like to call it.  The promise of this derivation of modern libertarianism is not that it attempts to paint libertarianism in a light that is palatable to modern liberals/Progressives, which our friend Kip rightly fears; instead, its promise is that it can help to rescue the fundamental worldview of libertarianism from the prejudices instilled in it by such a lengthy alliance with the Right.

Simply put, the promise of liberaltarianism is that it can help to build a libertarianism that is more true to its classically liberal roots.  In so doing, it is possible that it will become a libertarianism that modern liberals are willing to take seriously, and even learn from.  To be sure, if this were to completely succeed, I find it likely that libertarianism would eventually become as corrupted by the Left as it has been by the Right, thus creating the need for the cycle to start anew.

Right-leaning libertarians and libertarian-leaning conservatives are naturally very displeased with the idea of the de-rightification or re-liberalization of classical liberalism. And most contemporary liberals are indifferent or suspicious. But that’s okay. Twitter once sounded like the stupidest thing I’d ever heard of, and now I, like millions, totally love Twitter. And they still don’t make a dime. But they will.

Hey, I'm a Statist!

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I’ll try to respond at length to Jonah tomorrow. But a couple thoughts. Again, I’m not the one who’s trying to talk about partisan coalition politics. Its not my main interest, and it’s not my comparative advantage. I’m trying to show how attractive classical liberalism can be once it is scoured of the conservative barnacles of the now irrelevant Cold War alliance and once it begins to take seriously (rather than just ignore) the powerful arguments of the best contemporary liberal thought.

I think maybe one of our main issues is that Jonah seems to think actually-existing-politically-relevant conservativism is in some sense “anti-statist,” and that’s why libertarians ought to like that kind of conservative. (Jonah: “If the right ever loses its anti-statism, we will have a race-to-the-bottom between two statist parties, one cosmopolitan and socialistic one nativistic and nationalistic.”) I have some questions about what the anti-statism of “the right” amounts to. But, hey, I’m not an anti-statist! I’m statist! Lots of libertarians are! So maybe statism isn’t ipso facto socialism? Like James Madison, for example, I want a state, I want its power constitutionally limited, and I want it democratically governed. I am a proponent of free-market liberal democracy — like Hayek, Friedman, Buchanan, and I’d guess a whole lot of market-loving economists. I accept the public goods justification for the state, more or less. I accept that regulations which correctly price negative externalities tend to make everyone better off, and are worth doing. I am morally and methodologically anti-nationalist–which is more unusual–but that’s not anti-statism. I don’t mind the fact of country-sized public goods jurisdictions, nor do I mind tax-financing of genuine public goods by more or less legitimate states. I just wish national jurisdictional boundaries should better respect basic liberties by being more porous. Nor do I mind the tax-financing of education or welfare programs that actually help members of a polity to develop the capacity and ability to meaningfully exercise their rights and liberties. I am a liberal! “Rawlsekianism” is a ridiculous word, but I actually think a certain fusion of the best of 20th Century classical/market liberalism and welfare liberalism is the best political philosophy. I also think it may be possible to persuade many other people of this, and that they will find it attractive. In my experience, the people open to this view are already relatively liberal, in the usual sense, and tend to favor Democrats. That’s fine by me. 

But I do have some admittedly amateur thoughts about partisan politics, and I think Jonah’s commitments may have led him a bit astray, so I’ll try to say something about that tomorrow.

I'm No Diderot, but…

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I loved Ross’s headline about my reply to his worries:

When The Last Pentecostal Is Strangled With the Entrails of the Last John Bircher …

Let me emphasize that I’m a committed liberal pluralist, and I think freedom of conscience and state neutrality are bedrock virtues of a just society. At the same time, I think that a politics that takes the fact of pluralism seriously is perfectly consistent with vigorous culture war. Indeed, I think pluralist democracies demand culture war (call it “public reason” if you want to be fanciful). I think crazy conservative talk radio is a healthy part of pluralist culture war, and I think the attempt to whittle away the cultural prestige of people with crazy religion-saturated politics is also a healthy part of healthy pluralist culture war. I will go to the mat to defend the freedom of Pentecostals and John Birchers to do their things. And I will go to the mat to defend the idea that ours would be a better society if individuals come to be so embarrassed by Pentecostalism and John Birchism — by the ideas — that these communities of belief die peaceful natural deaths. Cultures become what they are through a process of selection, and this is a process we help along by arguing with one another. The reason there are so many meta-arguments about what we are going to count as good arguments–as good reasons, as considerations worth taking seriously–is that once we come to a broad social consensus on standards, some factions in the culture wars are left defenseless and end up an impotent doomed remnant. One reason I’m not that interested in partisan politics is that I think it is a higher-order manifestation of factionalism at a deeper level of the culture. I’m interested in engaging at that level. I’d like to argue for reason, science, the utility of the extended liberal order, and the authority of the liberal moral sentiments. I sincerely do not know what practical politics or partisan alignments this implies. It’s fun to guess, but I know our guesses are very likely to be bad ones. As Doug North likes to say, we live in a “non-ergodic” world.

Robert Mundell on Stimulus

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I just stumbled on this, and don’t think I’ve seen it anywhere else, so I offer for your consideration economics Nobel Laureate Robert Mundell on the stimulus in a January 9th Turkish TV interview :

Ipek Cem: There is talk of a stimulus package in the US. We also know that the average US citizen is highly leveraged as a consumer. And when we talk about stimulus we are also talking about consumer pending. How to make the two of them, you know work hand in hand?

Robert Mundell: Well there’s a lot of questions about “What a stimulus package really is?” And I don’t think the major has been taken called a stimulus package are going to be much of a stimulus. To a certain extent, monetary policy, an easy monetary policy, is stimulating for us. But that’s not the pack what we mean by a “stimulus package” because “Federal Reserve” can always do that. What they mean by that is government spending. But government spending doesn’t have that bigger effect. If you have a big increasing government spending, without monetary expansion, they have to finance that deficit by bringing bonds. So while the spending adds to demand, the selling of the bonds, takes away the demand. So if there’s a multiplier in one process, there is a negative multiplier with the other process. And the other fact is that the exchange rate is flexible. So if you sell more bonds with a stimulus pending interest rates rise a little bit. And the capital comes in, the current account deficit increases. The trade deficit increases. So a good part of that stimulus package goes to the rest of the world.

Ipek Cem: So what kind of policy measures would you be advocating at a time like this?

Robert Mundell: Well I think that the difficulty of all the banks, they need to recapitalize the bank, which everybody says it’s necessary. And is also true with corporation you need to recapitalize the corporations like “General Motors”, “Ford” and “Chrysler”. The glories, what used to be glories of American capitalism in the 20th century. American manufacturing. They need to be recapitalized, too. And instead of the government taking its stimulus package, the bailout package, recapitalizing, buying stocking these banks, it is much more important to look at what’s happenning right now, what the goverment is doing today to economy. What the government does to the corporation today is take thirty five percent of the profits of the corporation. And without putting anything in. So with the 35 percent of corporate tax, they take all that, draining the corporation from that, without putting anything in. And so what the best thing to do for stimulus is to reduce or eliminate the corporation tax. It is a double taxation anyway, because the capital pays the tax to the corporation and the profits are taxed at the corporate level after 35 % is taken out. And then there are also tax in the individual level. So eliminate it. By the way the revenue isn’t going to be very much because the corporate tax used to earn 5 % of GDP in revenue. It’s gone down about 1,5 % of GDP. So it doesn’t add too much. And in a recession period there won’t be any profits and tax, so the revenue will be very little. So you don’t loose too much, but you would, if you stimulate economy all the other taxes will increase. And the revenue then from the tax cuts of corporations will increase the tax of every other corporation. Just recently, Germany has cut it it corporation tax from 25 % to 15 %. That’s a very good move and that’s what the United States should do. I think, I was going to say from 35 % to 20 %, but it would be even better if they do it to 15 %.

Recap: Bond-financed spending doesn’t much help. Recapitalize banks and eliminate radically reduce the corporate income tax.

The Hope and Horror of Liberaltarian Alignments

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Tyler Cowen and Arnold Kling have both discussed some or all of this passage from Ross Douthat, in which he expresses concern for the possible damage of a possible flight of libertarian intellectuals toward the left. I’ll take it in two pieces. 

What could happen … is a bigger-tent liberalism – somewhat chastened, perhaps, by some big-government failures in the Obama era – that makes libertarian intellectuals feel welcome, engages them in conversations about smarter regulations and more efficient tax policy, and generally woos them away from their culturally-dissonant alliance with people who attend megachurches and Sarah Palin rallies. This would make for a smarter left-of-center in the short run, but I think in the long run it would be pernicious. It would further the Democratic Party’s transformation into a closed circle of brainy meritocrats, and push the Republican Party in a yet more anti-intellectual direction. And it would produce an elite consensus more impervious to structural critiques, and a right-wing populism more incapable of providing them. The Democratic Party would hold power more often, and become more sclerotic as a result; the GOP would take office less often, and behave more recklessly on those rare occasions when it did manage to seize the reins of state. 

First, I think Ross is right to see this as a game about the distribution of opinion elites. Second, I think he’s right to imply that a GOP with a weakened libertarian influence would become a more “right-wing populist” party. Which I think helps me make my point. Why would an intellectual libertarian want to keep company with a group of flag-waving moral reactionaries? Masochism? Now, if I interpret this as an argument aimed at people like me, it’s an exceedingly odd one. Ross seems to say that a more liberaltarian Democratic party would both produce better regulatory and tax policy and win more elections.

Why shouldn’t I, an incrementalist classical liberal, think that’s an awesome result? Because on the rare occasion the GOP manages to govern they’ll wreck the country? And so thinky libertarian types should remain the redheaded stepchild of old fusionism so that right-populists don’t actually indulge their terrifying instincts? I’m not sure that’s what Ross is saying, but that sort of sounds like what he’s saying.  

This is obviously a political gloss on what is essentially an intellectual project, and I know Will, like many libertarians I admire, prides himself on not thinking in terms of partisanship. But for anyone who cares about political outcomes, I think it’s important to consider the correlation of forces when you set out on ideological projects – especially in a country where the two-party structure has been as durable as it’s been in ours. I understand the impulse for smart, independent-minded libertarians to flee what seems like an increasingly anti-intellectual American Right and seek conversations and alliances with the friendlier parts of the left-of-center. But the vacuum on the Right also militates in favor of smart, idiosyncratic thinkers trying to fill it, instead of fighting for a seat at the crowded liberal table. That doesn’t mean registering as a Republican, attending CPAC, or casting a vote for McCain-Palin (or the next iteration thereof). But it means being open to the possibility that the old fusionism, battered and bruised as it is, may still hold as much promise for the advancement of libertarian policy goals as “liberaltarianism” ever will.

I’m glad that Ross sees that the American Right is increasingly anti-intellectual. But I don’t think that’s best combatted by sticking it out and raising the intellectual tone of an increasingly hostile group of egghead haters. As I think Ross agrees, the balance of elite opinion matters. And I think intellectual capital flight from the right really does threaten the GOPs future success. If Republicans keep bleeding young intellectual talent because increasingly socially liberal twenty-somethings simply can’t stand hanging around a bunch of superstitious fag-bashers, then the GOP powers-that-be might start to panic and realize that, once the last cohort of John Birchers die, they’ve got no choice but to move libertarian on social issues. Maybe. I like to imagine.

But Ross’s crystal ball is no better than mine. So I think my best bet is just to go ahead and try to come up with a more coherent and effective version of practical market-friendly liberalism. I’d like to think that would be attractive to the tens of millions of Americans who think conservatives are vile, that conventional liberals are too deep in the pocket of the Democratic Party to actually promote prosperity and opportunity, and that libertarians are dogmatic, weird, and irrelevant.

Inequality and American Exceptionalism

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Princeton sociologist Douglas Massey is one of my favorite scholars. The abstract from his new paper [gated] on “Globalization and Inequality: Explaining American Exceptionalism” will sound familiar to readers of other eminent Princetonians, such as Paul Krugman and Larry Bartels. I’m starting to think of it as “the Princeton Narrative” about inequality in the U.S. 

Globalization creates pressure for greater inequality throughout the world, but these pressures are expressed more fully in the United States than in other developed nations. Although the distribution of US income before taxes is no more unequal than other nations, after taxes it is considerably less egalitarian. This occurs because of specific institutional arrangements that fail to redistribute income effectively and allow the pressures of globalization to be fully realized. These arrangements represent a shift from the past and were deliberately enacted over the past two decades with divergent consequences for those at the top and bottom of the socioeconomic hierarchy. The realignment of the US political economy can ultimately be traced to America’s legacy of racism. Once leaders in the Democratic party sought to include African Americans in the benefits of Roosevelt’s New Deal, support for economic populism evaporated in the middle and working classes. The advantage of the wealthy is further enhanced by a political system in which those with money are better able to have their interests served legislatively than the poor or working classes.

I have not read the paper, just the abstract. So I will certainly do violence to the nuance in the argument. But here are a few thoughts loosely inspired by the summary.

First, I think there’s a good deal of truth in the Princeton Narrative. Second, racism aside, American exceptionalism has a good deal to do with our exceptional18th Century Constitution, the political culture that created it, and the political culture it subsquently reinforced. See Glaeser and Alesina and Persson and Tabellini.

Third, let’s say explicitly what is implicit here: the New Deal was democratically feasible because it catered to Southern racism. Which is to say that many of the policies of the “Great Compression” were predicated on the explicit exclusion of blacks from many programs, which is part of the point of Brink’s Nostalgianomics paper. The New Deal may have been economically egalitarian in the aggregate, but may have also helped to perpetuate more viciously inegalitarian Southern racial apartheid. The New Deal involved a magic button-style tradeoff between two kinds of equality. It’s not clear to me that a liberal egalitarian, more concerned about equality of rights and social standing than about equality of material holdings, should have pushed that button.

Third, Barack Obama, points (a) and (b). Barack Obama point (a): wealthy voters now seem to be trending to the more redistributive party, and it seems that extremely wealthy voters may have very strongly preferred Barack Obama. Barack Obama point (b): Barack Obama is black, and his electoral success certainly signals a weakening in American racial animus. So, if the major impediments to higher rates of downward redistribution are that wealthy people don’t want to redistribute, and most white Americans don’t want to redistribute because black people will get their money and they don’t like black people, then the success of Barack Obama in general, and among the rich in particular, is great news for egalitarians in two separate ways.

Fourth, it is a mistake to assume that equality of democratic voice improves the prospects of the poor and working classes unless the poor and working classes support policies that actually promote their interests. This is a pretty simple point many people have a hard time getting their heads around. But it’s pretty clear that populist socialist revolutions around the world have not been very kind to poor and working-class people, because populist socialism doesn’t tend to work very well. The now-vast public ignorance literature (subscribe to Critical Review!) would seem to suggest that the best case scenario for the poor and working classes is to have a relatively weak voice in a coalition with relatively strong-voiced highly-educated elites sincerely conerned with poverty alleviation and economic mobility. This presents another magic button for egalitarians. Suppose there is a button that simultaneously equalizes the democratic voice of the poor and working classes and reduces their expected lifetime income by 50%. Would you push it? Egalitarian liberals are going to continue to sound confused unless they can make up their minds about this.

Naomi Klein "Prebuttal" Lecture at U of Iowa Tuesday Night

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Here’s the info:

“Naomi Klein: A Prebuttal” 

Speaker: Will Wilkinson

Tuesday, February 17th

7 pm, 1505 Seamans Center

Co-sponsored by Advocates of Liberty and U of I Department of Economics

Naomi Klein will be on campus giving a UI Lecture Committee speech in February where she will be talking about her book “Shock Doctrine: The Rise of Disaster Capitalism”.  This book attempts to tie Bush’s corporatist big-business economic policies, the Iraq War, and most other bad things to the free market ideas of Milton Friedman. Will Wilkinson will defend “neo-liberal” free markets, defend Friedman against Klein’s scurrilous attacks, and reveal the many errors, factual and logical, in Klein’s bestseller.

In a lecture one night before Naomi Klein’s appearance on campus, Wilkinson will give a talk co-sponsored by the Advocates of Liberty and the UI Department of Economics.  Let the fun begin.

The Iowa Advocates of Liberty page is here.

Morality: A Kludge of Kludges

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If you’ve got a couple hourse to kill, listen to Stephen Stich explain why the human moral sense, such as it is, is a “hodge podge of multi-purpose kludges.” This is one of Stich’s fascinating 2007 Jean-Nicod Lectures. You can follow along with the slides below the video.

Here are the slides.

One upshot, among others, is that you’re not going to develop a useful normative moral theory by testing and refining your moral intuitions against cases. Another, closely related, upshot is that you can have the best scientific theory possible about the evolutionary basis of whatever sentiments and dispositions you think is central to morality, but it’s not going to leave you with anything like a useful or coherent theory of the right or the good. One thing I think some ev psych fans have a hard time getting their heads around is that morality–the system of norms that regulates individual behavior and enables social coordination–is variable by “design,” and that our evolved moral capacities are largely norm-acquisition devices which must wait to be calibrated by enculturation. We’re “fill-in-the-blanks slates” not blank slates. There are what you might consider “factory default” settings. (Which involves a lot of out-group slaughter, I’m afraid.) So, yes, certain configurations of moral sentiments, certain systems of norms, are more “natural” than others. But they lead to relatively terrible societies–nasty, brutish, short, etc. The norms that undergird the peaceful liberal order of impersonal, extended, massively positive-sum exchange are the result of generations of often self-conscious resistance to the “factory defaults.” Which is just to say, T.H. Huxley knew what he was talking about.