Public choice and market failure: Jeffrey Friedman on Nancy MacLean

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Jeffrey Friedman has a well-argued piece on interpreting public choice in the wake of Nancy MacLean’s conspiratorial critique of one of its founding theorists, James Buchanan. While agreeing that MacLean is implausibly uncharitable in her interpretation of Buchanan, Friedman suggests that many of Buchanan’s defenders are themselves in an untenable position. This is because public choice allows theorists to make uncharitable assumptions about political actors that they have never met or observed. In this sense, MacLean is simply imputing her preferred own set of bad motives onto her political opponents. What is sauce for the goose is good the gander.

I think Friedman’s arguments are a valid critique of the way that public choice is sometimes deployed in popular discourse. A lot of libertarian commentary assumes that those seeking political power are uniquely bad people, always having self-interest and self-aggrandisement as their true aim. Given that this anti-politics message is associated with getting worse political leaders who are becoming progressively less friendly to individual liberty, this approach to characterising politicians seems counterproductive. However, I don’t think Friedman’s position is such a good fit for Buchanan himself or most of those working in the scholarly public choice tradition.

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Adam Smith: a historical historical detective?

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Adrian Blau at King’s College London has an on-going project of making methods in political theory more useful, transparent and instructive, especially for students interested in historical scholarship.

I found his methods lecture, that he gave to Master’s students and went onto publish as ‘History of political thought as detective work’, particularly helpful for formulating my approach to political theory. The advantage of Blau’s advice is that it avoids pairing technique with theory. You can be a Marxist, a Straussian, a contextualist, anything or nothing, and still apply Blau’s technique.

Blau suggests that we adopt the persona of a detective when trying to understand the meaning of historical texts. That is, we should acknowledge

  • uncertainty associated with our claims
  • that facts of the matter will almost certainly be under-determined by the available evidence
  • that conflicting evidence probably exists for any interesting question
  • that interpreting any piece of evidence through any exclusive theoretical lens is likely to lead us to error

To make more compelling inferences in the face of these challenges, we can use techniques of triangulation (using independent sources of evidence together). This could include arguing for an interpretation of a thinker’s argument based on a close reading of their text, while showing that other people in the thinker’s social milieu deployed language in a similar way (contextual), and also showing how helpful that argument was for achieving a political end that was salient in that time and place (motivation).

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Could the DUP push UK Conservatives towards a ‘Norway Option’?

Last year, Britain voted to leave the European Union under a banner of anti-immigration and protectionism. Since then, both social democrats and classical liberals have been waiting to catch a break. Ever the optimist, I hope they may have just got one, from an unlikely source, the Democratic Unionist Party. They are a Northern Ireland-based Protestant party that is usually at the margins of national British politics. Thanks to the outcome of the latest general election, they may be in a position to force the British Conservatives towards a more trade and immigration friendly Brexit.

In April, Prime Minister (for now) Theresa May called a snap election. She didn’t need to face the electorate until 2020, but decided to gamble, thinking that she would increase her working majority of Conservative MPs. Instead, as we discovered yesterday after the polls closed, she did the opposite, reducing the slim majority that David Cameron won in 2015 to a mere plurality. This was against one of the most radically left-wing opponents in decades, Jeremy Corbyn.

This was a dismal failure for the Conservatives but the result is a relatively good sign for liberals. I feared that Theresa May’s conservative-tinged anti-market, anti-human rights, authoritarian corporatism was exactly what centrist voters would prefer. It turns that Cameron’s more liberal conservativism actually won more seats. Not only is an outward-looking liberalism correct, de-emphasizing it turns out not be a popular move after all.

Without a majority, the Conservatives need to form a coalition or come to an informal agreement with another party. This seems likely impossible with Labour, the Scottish Nationalists or the Liberal Democrats who have all campaigned heavily against the Conservatives and disagree on key issues, such as whether Britain should leave the European Union at all. This leaves the DUP.

In terms of ideology, the DUP is far to the right of most British Conservatives. Their opposition to gay marriage, abortion, and occasional support for teaching creationism, means that they have more in common with some Republican Christian groups in the United States than the secular mainstream in the rest of the United Kingdom. Historically, at least, they have links with pro-unionist paramilitaries that have terrorized Irish Catholic separatists.

There is, however, one way in which the DUP are comparatively moderate. While content with the UK leaving the European Union, they want to keep the land border between Northern Ireland and the Republic of Ireland (an EU member) open. Closing it would reduce critical cross-border trade with an economically dynamic neighbor and re-ignite violent tensions between the Protestant and Catholic communities in Northern Ireland.

How could this be achieved? Leaving the EU while keeping a relatively open trading and immigration relationship is similar to the so-called Norway Option. Norway is within the single market but can exempt itself from many parts of EU law. In return, it has no direct representation in EU institutions. If the EU could accept such an arrangement, then the DUP may be able to make Conservatives commit to it.

Of course, the DUP will extract other perks from their major partners as part of any deal. But their social policy preferences are so far to the right of people in England, Wales and Scotland that this will hopefully have to take the form of fiscal subsidies to their home region (economically damaging but could at least avoid infringing civil liberties).

It might seem paradoxical that an extreme party may have a moderating influence on overall policy. However, social choice theory suggests that democratic processes do not aggregate voter, or legislator, preferences in a straightforward way. Because preferences exist along multiple dimensions, they are neither additive nor linear. This can produce perverse and chaotic outcomes, but it can also generate valuable bargains between otherwise opposed parties. In this case, one right-wing party produces an authoritarian Brexit. But two right-wing parties could equal a more liberal outcome.

That’s the theory. Has something like this ever happened in practice? Arguably, Canada is an outstanding example of how a minority party with many internally illiberal policy preferences produces liberal outcomes (see the fascinating Vaubel, 2009, p.25 for the argument). There, the need to placate the separatist movement in Quebec involved leaving more powers to the provinces in general, thus keeping Canada as a whole much more decentralized than Anglo-Canadian preferences alone could have assured. Will the DUP do the same for Britain? We can but hope.

Is persecution the purpose?

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Last week, Rebecca Tuvel, an Assistant Professor of Philosophy, had her recent article in Hypatia, ‘In Defence of Transracialism’, denounced in an open letter signed by several professional scholars (among others). They accused her of harming the transgender community by comparing them with the currently more marginalized identity of transracialism. William Rein, on this blog, and Jason Brennan at Bleeding Heart Libertarians, have written valuable defences of Tuvel’s right to conduct academic research in this area even if some find it offensive.

Events have moved fast. The associate editors initially seemed to cave in to pressure and denounced the article they had only just published. The main editor, Sally Scholz, has since disagreed with the associate editors. Critically, Tuvel’s colleagues at Rhodes College have given her their support so it looks like the line for academic freedom might be holding in this case. Without wishing to engage too much in the hermeneutics of suspicion, I think there are grounds to doubt the depth of the critics’ attitudes. I base this on my reading of Judith Butler, who is one of the signatories to the open letter arguing for Tuvel’s article to be retracted.

Seven years ago, I managed to read Judith Butler’s Gender Trouble. Although there are many variations in the movement, Butler is a central figure in the post-structuralist , non-gender-essentialist, feminism that inspires much of the contemporary ‘social justice’ movement. When I got past Butler’s famously difficult prose, I found a great deal of ideas I agreed with. I wrote up a brief piece comparing Butler’s concerns with violently enforced gender conformity to classical liberal approaches to personal autonomy. I also identified some problems.

First, Butler’s critique of the natural sciences seems to completely miss the mark. Butler associates gender essentialism with the study of genetics, when, in fact, genetics has done more than almost anything else to explore the contingency and variation of biological sexual expression in nature. The same applies to race and ethnicity.

Second, more importantly, Butler insists that there is no underlying authentic gender or sexual identity. All identities are ultimately constituted by power relations and juridical discourses. You find this argument repeated among social justice proponents who insist all forms of identity are products of ‘social construction’ rather than ever being based on natural facts. As a result, all personal identity claims are only ever historical and strategic. They are attempts to disrupt power relations in order to liberate and empower the subaltern and oppressed albeit temporarily

I don’t think this is perfectly factually true but lets accept it for now as roughly true. This means that transracialism itself might become, or could already be, another example of the strategic disruption of contemporary juridical discourses, this time about race and ethnicity. The same people currently denouncing Tuvel could very easily insist on the acknowledgement of transracial identity in five or ten years time, and denounce those who hold their current views. From their own position, which explicitly rejects any ultimate restrictions on identity formation, we have no warrant to know otherwise.

In this sense, Tuvel might not be ‘wrong’ at all, just slightly ahead of the social justice curve. And her critics wouldn’t actually be changing their minds, just changing their strategies. Meanwhile, people who actually take their identities seriously should be wary of their academic ‘allies’. They can quickly re-orientate their attitude such that a previously oppressed identity comes to be re-configured as an oppressive and exclusionary construct.

If all claims in this area are strategic, rather than factual, as Butler claims, then why try to damage a philosopher’s career over it? Why provoke an academic journal almost to self-destruct? Rather than working out which ideas to denounce, we should critique the strategy of denouncement (or calling out) itself. In that vein, much as I disagree wholly with the stance of its editorial board, I think calling into question Hypatia’s status as an academic journal, is premature.

Ricardo and Ringo for a free-trade Brexit

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My colleague, Shruti Rajagopalan, points out that today is the 200th Anniversary of the publication of David Ricardo’s  On the Principles of Political Economy and Taxation. It was here that the notion of comparative advantage began confounding protectionists and nativists. Shruti offers this famous example of it in practice:

Apparently, when asked if Ringo Starr is the best drummer in the world, John Lennon quipped, “Ringo isn’t the best drummer in the world. He isn’t even the best drummer in the Beatles.” And while Lennon may have fancied himself a better singer, guitarist, songwriter, and drummer, than Ringo, the Beatles are still better off with Ringo at the drums.

The essence of comparative advantage is that you don’t need to possess a great talent to benefit from trade within a group, whether we are talking about individual people or nations. So long as there exists some variation in relative talents, people will be able to benefit from specialization and trade.

This message is as relevant as ever. The British Parliament has just voted to hold fresh elections. This is supposedly to strengthen the Prime Minister’s hand when negotiating new terms of trade when Britain leaves the European Union. Politicians act as if trade is dangerous, always a threat to the national interest unless carefully constrained. They negotiate complex deals and regulation on market access, essentially holding their own consumers hostage, preventing them from buying foreign goods unless other countries agree to open their own markets. They fear that their domestic producers will be out-competed by superior, or cut-priced, businesses from abroad.

What comparative advantage shows is that even if that happened to be true for every single industry, domestic businesses could still specialize so as to be competitive on the world market, and improve domestic living standards at the same time. Britain could open its ports and wallets to foreign goods and services with no tariffs, even without any reciprocal deal from the EU, and yet still benefit from trade.

Why? Because it doesn’t matter if you have to be the drummer, just so long as you are in the band.

What makes robust political economy different?

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I encountered what would later become important elements of Mark Pennington’s book Robust Political Economy in two articles that he wrote on the limits of deliberative democracy, and the relative merits of market processes, for social and ethical discovery, as well as a short book Mark wrote with John Meadowcroft, Rescuing Social Capital from Social Democracy. This research program inspired me to start my doctorate and pursue an academic career.  Why did I find robust political economy so compelling? I think it is because it chimed with my experience of encountering the limits of neo-classical formal models that I recount in my chapter, ‘Why be robust?’, of a new book, Interdisciplinary Studies of the Market Order.

While doing my master’s degree in 2009, I took a methodology course in rational choice theory at Nuffield College’s Center for Experimental Social Science. As part of our first class we were taken to a brand new, gleaming behavioural economics laboratory to play a repeated prisoners’ dilemma game. The system randomly paired anonymous members of the class to play against each other. We were told the objective of the game was to maximise our individual scores.

Thinking that there were clear gains to make from co-operation and plenty of opportunities to punish a defector over the course of repeated interactions, I attempted to co-operate on the first round. My partner defected. I defected a couple of times subsequently to show I was not a sucker. Then I tried co-operating once more. My partner defected every single time in the repeated series.

At the end of the game, we were de-anonymised and it turned out, unsurprisingly, that I had the lowest score in the class. My partner had the second lowest. I asked her why she engaged in an evidently sub-optimal strategy. She explained: ‘I didn’t think we were playing to get the most points. I was just trying to beat you!’

The lesson I took away from this was not that formal models were wrong. Game theoretic models, like the prisoners’ dilemma, are compelling and productive analytical tools in social science, clarifying the core of many challenges to collective action. The prisoners’ dilemma illustrates how given certain situations, or rules of the game, self-interested agents will be stymied from reaching optimal or mutually beneficial outcomes. But this experience suggested something more complex and embedded was going on even in relatively simple social interactions.

The laboratory situation replicated the formal prisoners’ dilemma model as closely as possible with explicit rules, quantified ‘objective’ (though admittedly, in this case, low-value) payoffs, and a situation designed to isolate players as if they were prisoners in different cells. Yet even in these carefully controlled circumstances, it turns out that the situation is subject to multiple interpretations and understandings.

Whatever the textual explanation accompanying the game, the score on the screen could mean something different to the various players. The payoffs for the representative agents in the game were not the same as the payoffs in the minds of the human players. In a sense, my partner and I were unwittingly playing different games (although I lost within either rules of the game!).

When we engage with the social world, it is not only the case that our interests may not align with other people. Social interaction is open-ended. We do not know all the possible moves in the game, and we do not know much about the preference set of everyone else who is playing. Indeed, neither they nor we know what a ‘complete’ set of preferences and payoffs would look like, even of our own. We can map out a few options and likely outcomes through reflection and experience but even then we may face outcomes we do not anticipate. As Peter Boettke explains: ‘we strive not only to pursue our ends with a judicious selection of the means, but also to discover what ends that we hope to pursue.’

In addition, the rules of the game themselves are not merely exogenous impositions on us as agents. They are constituted inter-subjectively by the practices, beliefs and values of the actors that are also participants in the social game. As agents, we do not merely participate in the social world. We also engage in its creation through personal lifestyle experimentation, cultural innovation, and establishing shared rules and structures. The social world thus presents inherent uncertainty and change that cannot be captured in a formal model that assumes fixed rules of the game and the given knowledge of the players.

It is these two ideas, both borrowed from the Austrian notion of catallaxy, that makes robust political economy distinct. First, neither our individual ends, nor means of attaining them, are given prior to participation in a collective process of trial and error. Second, the rules that structure how we interact are themselves not given but subject to a spontaneous, evolutionary process of trial and error.

I try to set out these ideas in a recent symposium in Critical Review on Mark Pennington’s book, and in ‘Why be robust?’ in Interdisciplinary Studies of the Market Order edited by Peter Boettke, Chris Coyne and Virgil Storr. The symposium article is available on open access and there is a working paper version of my chapter is available at the Classical Liberal Institute website.

How school choice can benefit teachers

Betsy DeVos was narrowly confirmed as US Education Secretary this week. Of all Trump’s nominees, she seems to have attracted the most rancor, which is a shame considering Trump’s pick for Attorney General, Jeff Sessions, is an outspoken supporter of the US’s brutally racist drug war. Concerns with DeVos’s background and experience are very well-founded. Concerns with her support for school choice, however, are not.

Others, including Nick Gillespie, have already covered the important student-centric case for school choice, pointing out in particular how greater choice benefits minority students and students from disadvantaged backgrounds. I will focus instead on the benefits to teachers as I see them based on my research in school choice systems in the United Kingdom and Sweden.

A great deal of opposition to school choice is based on the perception that it is necessarily an attack on the teaching profession (it is certainly the way teaching unions portray it). Indeed, it is too easy for generically anti-state advocates of school choice to fall into the assumption that there is a pitched conflict between the supposed special interests of publicly-funded teachers and the interests of students. On this narrow account, the purpose of school choice is to compel teachers to work harder, for longer, in order to produce better results for their students.

The reality is that teachers and students share a lot of common interests, namely having a safe, productive and enjoyable working environment. The broader case for school choice is that a competitive framework allows for these environments to emerge more readily than with a monopoly public provider. This does not necessarily mean importing a ‘competitive ethos’ inside the school gates. If anything, it is school administrators, or proprietors in the case of private schools, that need to be exposed to competition, not the teachers themselves.

How do teachers benefit from school choice in practice? First, schools exposed to competition are encouraged to devote more money to teachers’ salaries (for teachers both in public and private schools). Arguably, this is because retention of quality teachers is more important than more visible expenditure that are often more attractive to policymakers. These include new buildings and electronic classroom aids that officials think can give the public the impression of long-term ‘investment’ in a way that simply paying teachers more does not, even if that is, in fact, what works best.

Second, such schools can allocate training resources more effectively to teachers. I found in Sweden, which has an extensive school choice system, that one private network of schools had developed and provided their own continuing professional development curriculum rather than outsourcing it to consultants.

Third, multiple competing providers combined with the possibility of establishing new schools give more career options for teachers. Conversely, a public monopoly can easily succumb to group-think. This ends up excluding good teachers who happen to disagree with the prevailing orthodoxy. The career trajectory of British teacher, Katharine Birbalsingh, is a useful illustration. She was a successful state-school teacher who made the mistake of appearing at a Conservative Party conference in order to advocate for a more traditional pedagogy and to discuss problems of discipline in the school system. She was suspended from teaching as a result and essentially forced to resign her position.

Under a purely public school system, an outspoken teacher who disagrees with the way the majority of schools are run might be frozen out from further employment indefinitely. They would have to move to the fee-paying private sector instead in order to continue teaching at all. In the United Kingdom, however, we now have array of state-funded but independent schools called free schools. This allowed Birbalsingh to open a new school, the Michaela Community School, which so far appears to be enjoying some success. It is also an attractive employer for other teachers seeking an environment that supports greater discipline in the classroom. Thus she was able to continue contributing to public education. In this sense, a diverse range of schools, based on different pedagogical principles, does not only benefit students who can find a school that better matches their needs. It also gives teachers a wider range of environments in which to work.