Ryan Avent's Innovations in the Game Theory of International Relations?

In response to my point below about the transparently inconsistent reasoning about public goods employed by many defenders of the woeful cap and trade bill, Ryan Avent writes:

This seems almost deliberately dense. In particular, it makes no distinction between the world of billions of daily, anonymous transactions and the world in which a handful of great powers attempt to hammer out a diplomatic agreement. Unsurprisingly, it’s very difficult to get millions of urban denizens to voluntarily come together to build and fund a road network or transit system in the absence of a coercive mechanism. The benefits are too broadly shared, and the incentive to free ride too great. But the smaller the number of players, the more concentrated the benefits, and the easier it is to find a mutually beneficial agreement.

I certainly wasn’t being deliberately dense. Ryan is, as always, quite charitable in allowing that my denseness might have been involuntary. I am grateful. Perhaps it is this very denseness that prevents me from grasping how I was being dense. I persist in thinking that the standard mode of reasoning about collective action problems applies. So I patiently await instruction.

Ryan evidently believes it is almost obvious that the structure of the strategic problem in securing global climate policy coordination is less complex than the problem of putting together standard-issue public goods, like a system of roads. In the case of global climate policy coordination, we’re talking not about diffuse millions but a mere “handful of great powers,” who will enjoy such concentrated benefits from an agreement that the normal worries about credible commitment, assurance, free-riding, and so forth do not really apply. So the absence of a coercive enforcement mechanism is pretty much irrelevant. Not only shouldn’t we worry about the standard logic of interdependent strategic action, but it’s almost deliberately dense to do so. My bad.

If only we’d known that global coordination problems among “a handful of great powers” was such a breeze, we’d have arrived at Kant’s global federation of perpetual peace centuries ago. Come to think of it, why were there two massive World Wars and a Cold War last century? It’s almost as if the great powers were being deliberately dense. But I guess we now know the trick of aligning the perceived interests of great powers: just make some kind of effort to cooperate. Go ahead and move unconditionally, even if your own country’s move actually signals quite clearly that there is next to zero political will to bear the costs of an agreement with teeth. And then what you do is you wait for other great powers to be impressed and encouraged and convinced by the immense advantages that will accrue to them once they jump on board. It’s easy once you know how.

Or maybe that’s not how Ryan thinks it goes. But then how does it go? I still don’t get it.

Other things I don’t get:

(a) The idea that “great powers” are headed by some kind of unified intelligence or agency that can make agreements and just stick with them. I thought the governments of states–even authoritarian ones–were semi-stable coalitions of various and often conflicting interests subject to the vagaries of mass public opinion.

(b) The idea that the benefits of global climate policy coordination — which will not be realized for many decades — will accrue to the relevant state decisionmakers and so provide them with sufficient incentive to make and stick to an agreement, but that the costs of coordination — which will be significant and immediate — will somehow not be borne by those decisionmakers (e.g., “the people” will not complain about these costs in a politically threatening way) and so will not overwhelm the posthumous payoff in the political accounting.

(c) The triviality of time inconsistency problems. I had thought that time inconsistency problems–that the government now cannot really bind the government later–were endemic to politics. This makes it almost impossible for a current government to credibly promise that a policy will persist over time. I had thought you needed some kind of mechanism (which we do not appear to have) to align the incentives of the parade of future decisionmakers to sticking with it over time.

(d) The option value of empty gestures. The Waxman-Markey bill appears to everyone–even advocates like Ryan–to be mostly a bust, if not a complete bust. It remains unclear to me why a transparently bad bill does more to improve the U.S.’s bargaining position than no bill.

I don’t see that Ryan addresses any of this as he goes on:

[T]here are fewer than ten relevant players, and only two really relevant players not already committed to reductions — the US and China. Given that climate negotiations are part of a repeated game between the two great powers (that is, they’re more or less constantly talking about one economic or political issue or another), it seems very likely indeed that an American pre-commitment to emission reductions would facilitate a similar Chinese commitment.

India? Cheap talk?

The repeated game between the U.S. and China looks to me trickier than this. First, it’s better for China in the short and medium term if we tax carbon emissions and they don’t. They sure will be happy to see us go first. (It will, among other things such as encouraging capital flight to China, give them more slack with which to clean up things like SO2 that really do matter to them in the short term.) So then what do we do if they don’t play along? Impose carbon tariffs? Then we have probably just started a trade war with our chief source of inexpensive manufactured goods. Is this the repeated game Ryan has in mind?

Ryan sums up:

Will Wilkinson works for Cato, and Jim Manzi writes for National Review, two great outposts of climate change denialism and do-nothingism. It occurs to me that if more of their compatriots were willing to discuss the issue responsibly, then upwards of 90% of the GOP might not be committed to a policy based on utter stupidity, and a better bill might be feasible. Instead, they’re busily arguing against Waxman-Markey. That’s their right, but it certainly says quite a bit about their priorities.

I wonder if Ryan would like to be more explicit about what he thinks my priorities are. I’ll tell you what I think my priority is: to make people, especially poor people, better off. I am against this bill because I honestly believe it will leave many people worse off and make almost no one other than politically-connected domestic interest groups better off. I think Ryan has a different assessment of its likely effects, but I don’t see any need to slyly impugn his motives. If he thinks his argument is so winning, then it might benefit him to drop this kind of well-poisoning rhetoric, which is beneath him, and start actually winning the argument.

Author: Will Wilkinson

Vice President for Research at the Niskanen Center

27 thoughts

  1. No cigar, Will. Ryan and other 'progressives' have the reigns of the State, and hence care not to make definitive cases anymore. This is simply the other side of the Bush/Republican coin. Expect more nasty, well-poisoning, ad-hominem tactics for the next 8 years…or i guess till the end of time, as party identification matters, not..power does.

  2. One thing I thought while reading your post was about the interesting phenomenon among non-libertarians of implicitly believing a bad bill is better than no bill at all. I believe that non-libertarians often conceive of bad legislation as 'at least trying' whereas doing nothing is tantamount to not trying.This seems to treat Congress as one big person, which it isn't. But it also suggests that Congress is a very, very stupid person, who would rather do something awful rather than nothing just so he can feel better about himself.That said, nice take down of Avent. One of these days a truly liberal coalition will be strong enough to at least put up a fight against guys like him.

  3. I think the parallel folks have in mind is something like free trade – although the usual economic analysis sees unilateral tariff reduction as win-win, it certainly isn't seen that way politically, so you have a similar N-person public-good game as far as political payoffs go, roughly.And whatever else you think of it, GATT/the WTO has succeeded immensely in its stated mission, reducing tariffs and other barriers to trade. It's true that some remain, sure. But the change from what they once were has been amazing, and it's really hard not to see a causal relation there.Internationalists would say, look: the answer here is analogous to what it is in a domestic context – institutions, institutions, institutions. The answer isn't simply to write a nice agreement (parchment barriers and all that), but to write an incentive compatible one, which is much easier if the agreement itself *creates* new institutions that make it so. The dispute-resolution process of the WTO, the argument goes, can turn substantive disagreements into procedural ones; it's not “banana tariffs or not” but “defy the WTO tribunal or not”, and at that level, acquiescing is more politically palatable. (Why? Good question; I suspect the answer is halfway between the RCT IR folks and the constructivists– in a lot of places, voters, esp. elite ones, might take “defying international tribunals” as a content-independent reason to oppose a party/politician, just as constitutionalists hope they do w.r.t. constitutional norms … that's the hope, anyway.)Now, the difference between this and the normal constitutionalist dilemma is usually characterized as the lack of coercion as an potential tool of enforcement, but this is a false dichotomy. Most of what makes political order self-enforcing, when they are, has little to do with the army or police; talk about it relying on violence “in the last instance” or what-have-you distorts more than it reveals. And on the other side of things, think about the EU: it *lacks* the major hallmarks of this sort of coercive power (independent military / police). But it has absolutely succeeded at just the sort of governance that once would have been thought to require a nation-state with its Weberian monopoly etc.Now I haven't been paying much attention to the Waxman bill, etc. I can't add anything helpful to the specific discussion there. Except to say that I suspect the logic of any eventual global emissions reduction regime is something like what I've outlined, with the emphasis in presentation varying depending on where the person in question falls along the hard-core rat-choice-theory-vs-constructivism dimension. And so I suppose the idea of this helping our bargaining position lies precisely in a bill like this *not* being cheap talk, but (hypothetically) involving a genuine institutionalization of emissions reduction. (Once you set up the infrastructure to deal with cap and trade or a carbon tax or what have you, it's a lot easier to ramp it up than it would be to go from ground zero, I guess; think the VAT or pick your least favorite tax / bureaucracy.) A costly signal, and one that, beyond the signaling value, makes further change less internally costly.Anyway. Like I said, I stay away from this issue, but I do like to think I know a fair bit about social science institutionalist thinking, and that's my take on your framing of the problem in that manner. =)

  4. Will again assigns a multiplier of 0.0 to moral leadership. If we go first and China goes second, we're the dupes. Leading by example is for suckers.And btw global warming isn't happening.Or, it's already happening, and it's too late to do anything about it.Or, even if we can do something, too many people will be without Lexus SUVs so forget it.Or, I'm a utilitarian for the poor, and global warming treaties will kill people. I would be more impressed if pro-poor utilitarians would lead by example (go to where poor people are and DO SOMETHING – DO – start a business, etc, vs blog), rather than fall back on the nice functionalist line, like being a public intellectual is actually helping poor people more vs directly DOING. I'm guessing that's what all the Cato utilitarians tell themselves.

  5. Little known fact: Slamming a public intellectual in a blog comment has proven effective in curing malaria. Seriously, it's true. Look it up.

  6. An effective retort when aimed at a utilitarian. Did you know that Will doesn't think WW2 was worth fighting? A worldview like that – that takes pride in being obtuse – doesn't have much to offer. The shifting, results-oriented position on global warming is a particularly good example. When it comes to a serious problem that requires coordinated action by government, libertarians have aneurysms. They can't grapple with the problem or allow for such an obvious place for government action, so they mount guerilla warfare on the facts, on the science – endless doubt on government action, instant acceptance of the most facile market-oriented solution.

  7. Steve C,What's your multiplier, and what facts do you base it on?Will's criticisms seem valid to me, and if you have a counter-argument, then perhaps you could make it.If not, verbal tantrums are unlikely to impress anybody here but you.

  8. Use more arguments and less invective and guilt-by-association; it'll make these discussions a lot nicer for everyone.

  9. Will, I think it's worth distilling Ryan's actual point in that last paragraph and talking about it. He is uncharitable in the extreme, but I think he's mostly right: National Review is the place intelligence goes to die, and the libertarian intelligentsia (with Cato as sort of the leading institutional voice) seems more interested in telling us why this specific bill is bad than in telling us what would be good.Ryan's right that the GOP's default position is climate change isn't real – which is just scientifically unsupportable – and that, even if it is, doing anything about it would be worse than doing nothing – which is more controversial but probably also stupid. And part of the reason the GOP's default position looks like that is because the people who have influence over conservative policymakers don't seem all that interested in making a case otherwise. If Cato (and folks like you) spent more time telling us that climate change is real, bad, and worth doing something about, the conversation might shift in important ways.Then again, it also might not. But I think Ryan's got a point when he says that conservatives and libertarians would do everyone a favor by approaching this debate with an eye on actually fixing the problem at hand rather than simply telling us how the liberals are bollixing it up yet again (which, we agree, they are).

  10. I support a carbon tax offset by cuts in payroll and capital gains taxes. I think the actual tax would end up not being set at levels effective to do much about climate, and that international cooperation still would not be forthcoming, but I think it wouldn't hurt. In the end, the deep disagreement is over predictions of the future. I think the probability that technology in the future will take care of the entire problem is much higher than the probability that ANY bill we could pass now will make a difference. That's why I have so little sense of urgency about “doing something.”

  11. Ryan,Someone who claims that private toll roads are much more difficult to organize than world peace hardly has a reasonable claim to be more intelligent than National Review, yet isn't that what Ryan Avent is doing below:

    Unsurprisingly, it’s very difficult to get millions of urban denizens to voluntarily come together to build and fund a road network or transit system in the absence of a coercive mechanism. The benefits are too broadly shared, and the incentive to free ride too great.

    And yet private toll roads predated world peace. Fancy that.

  12. But of course the reason the probability is so small that any bill we could pass now would make a difference is precisely that one entire side of the political spectrum uses a significant portion of its time telling us that no bill we can pass now will do anything (worst sentence ever published in English? You decide!). I don't assume that libertarians have a particularly large microphone vis a vis conservatives, so it's probably all a moot point as long as the National Review denialists control one side of the debate, but why not a full-throated libertarian defense of a carbon tax?A full-time position of skepticism and lack of urgency may be philsophically appealing in a lot of ways, but it's hard to control a policy debate that way.

  13. The thing about roads is absurd. Roads are the perfect example of governments problems. 40,000 people die every year, millions more wait for hours on freeways in bumper to bumper traffic. Private roads would save us a significant part of that 40,000 from dying and trillions of wasted hours in traffic.

  14. 0.5? Not sure exactly?I understand that libertarians want metrics that involve cost comparisons in dollars before endorsing any option. That completely misses out on huge swaths of everyday reality. Which is the kind of thing that makes Will question the value of intervention in WW2 (look it up).It makes libertarians in general unreliable in the defense of the less-quantifiable-but-important. You all seem to be willing to follow utilitarianism – and in general, anything that seems mathematicky – over a cliff.You have two choices – a government-oriented attempt at the beginnings of a solution to the climate problem. On the other, a facile market-based solution. But libertarians are stuck in paralysis at various stages here: is there a problem at all? (y/n?) There's a problem, but is it worth it to do anything about it? Some might think we should do something about it – ok it better be market-oriented!Fortunately the reality-based world is moving on. You're chosen not to be part of the solution by being unserious, and it's kind of hilarious when you re-enter the debate at some early stage and expect people to be patient with your arguments.

  15. Ok, so I guess your argument is that one isn't being serious unless he gets onboard with a big-government attempt at a solution whose efficacy you have no idea about.Got it.

  16. I know exactly as much as you do about its efficacy. The difference is that all confirming evidence that government solutions cannot work is immediately accepted without question by libertarians (or at least, by the small percentage who believe global warming is happening, and that there's a case to be made that anything ought to be done at all).

  17. Steve C.– Some points.A) Take a deep breath before you respond. Let the emotion subsideB) Stop bringing up WWII. (And don't spend 100 words explaining/defending why you brought it up. I know why you did and it's tangential at best.)C) “Less-quantifiable-but-important” Less quantifiable means the importance becomes more subjective. More subjective means more wiggle room to get things wrong. Fault me for being a skeptic if you must, but I think it only reasonable to have some grasp of the cost-benefit of a policy.D) “the reality-based world is moving on” It is moving on to a bill that amounts to corporate welfare under the veneer of controlling climate change. At the very least, they could auction off the permits/vouchers/whatever.E) “it's kind of hilarious when you re-enter the debate at some early stage” Better we wait until a late stage?I find this bill hard to defend. The moral leadership aspect is one of those squishy less-quantifiable-but-important issues. I'll give you a more quantifiable issue. Our public debt is exploding and it will only get worse as Medicare and Social Security come due. Just this week, the rating's agencies considered downgrading US Treasuries from AAA. And they're supposed to be the “risk-free rate.” What foreign entity holds the most US debt? China. What if they don't follow our moral leadership? Trade war? They'll tell us to piss off, dump a bunch of treasuries, raise the price of borrowing for the US government, and put us in a deeper hole. Eventually it will take either 75% tax rates or 10% inflation to get us out. For the record, I support a carbon tax phased in over time.

  18. Ryan hates poor people and thinks Obama can just use his magic wand to fix problems. All Obama needs is magic words on a magic piece of paper to make it happen.Democrats are delusional.

  19. “C) “Less-quantifiable-but-important” Less quantifiable means the importance becomes more subjective. More subjective means more wiggle room to get things wrong. Fault me for being a skeptic if you must, but I think it only reasonable to have some grasp of the cost-benefit of a policy.”No one would argue with that. But placing a lower value on the subjective merely because it *is* subjective excludes anything that cannot directly be valued in dollars and cents. In its dense and blind way it ignores the power of ideas, of moral example, which move people to action at least as much as their economic situation….as far as the rest of your argument goes, it's strikes me as non-sequitur, but I will sign on to raising the retirement age significantly, but also point out that debt levels (post-stimulus) aren't a serious issue when you look historically or compare to other western-style democracies. PS:”A) Take a deep breath before you respond. Let the emotion subside”Is that geek for “fuck you”?

  20. Hey Vinni, you are quite right about it, I feel the same way, you put it right.

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