I think you make an interesting point, but allow me a bit of push back. The world government would set the rules of how federated entities would interact. This would be like standards and protocols. You are correct that a set of shared standards can allow for enhanced competition, of the good variety (what I call constructive competition). This would be a good thing.
However the same shared standards would lock in the world to one set of protocols, thus reducing the discovery via variation and selection of the shared institutions themselves.
Thus we would see more short range constructive competition between states, and less long term exploration of new and potentially better institutional standards.
This is from Rojelio. He is pushing back against my argument in favor of world government from a libertarian point of view. He’s right, of course. There’s two points I need to do a better job of clarifying when I advocate for world government from a libertarian point of view:
The importance of exit needs to be addressed and institutionalized in a proper federal order. This is difficult to do, but not impossible. My argument is to make exit difficult, but not too difficult. The difficulty of exit should be somewhere on the scale between a constitutional amendment (too difficult) in the US order and Brexit (too easy) in the Westphalian order.
The bottom line is that a more libertarian world will likely be composed of a large federal polity that protects the freedoms of the vast majority of its citizens better than most nation-states do today. The other 15% of the world would live under despotism (which will center around “cultural cores”), or under sparsely-populated democratic republics (i.e Australia), or within free-riding microstates that otherwise rely on the protection of the large federal unit.
If, say, England, Tamaulipas, and Duyên hải Nam Trung Bộ were to federate with the United States tomorrow, these polities would not be agitating for exit after 10 years of experimentation in self-governance. If, say, Texas or Vermont wanted to exit after 10 years of federation with those 3 polities, they would have to go through a process (via all of the legislative branches involved) to do so. A simple majority vote would be disastrous. It is unlikely, then, that Texas or Vermont would leave such a federation. Pure freedom would be unrealized, but billions of people would be much freer.
If two politicians are equal in every other respect but one was better at basketball… I guess go with that one? I mean, all else equal they’re maybe a better team player or something. But that line of thinking doesn’t mean we should only ever vote for ex-NBA stars.
There are plenty of similar potentially attractive signals: veteran status, success in business and/or being a fake billionaire, academic success, acting, etc. Some signals are stronger, and some imply a smaller pool of candidates. If there are more successful business people in the world we should expect to observe more of them transitioning to politics than, say, world-class bowlers. Likewise, if the signal is more relevant (e.g. law degree vs. paleontology degree), it makes sense to see more of them in the wild.
That 18% of German politicians have PhD’s seems wild to me. Maybe I’m biased because I work in an organization full to the brim with PhD’s. But that many politicians with degrees seems about as reasonable and as likely as having half of Congress be elite athletes.
I remember when Obamacare was first being debated. The political right had so many strong arguments to make and they abjectly refused. Instead, Obama was declared a secret Muslim whose secret plan is to turn the frogs gay.
Here we are with that political tribe having ascended to the White House and now the political Left has so many strong arguments to make. And they’re refusing. Instead, the federal government needs to be made more powerful for the next time a Trump gets elected.
2020 has not been kind to my view of humanity. So I’m listening to The Rational Optimist (finally). And I’ve got to say, it’s just what the doctor ordered. Life is pretty good on balance, even with the bad stuff.
Here we are, 20 years into the distant future, and the newspaper of record now includes musical opinion pieces. Don’t get me wrong, I love Weird Al, but I’m sure he’d agree that a world where he’s writing songs for the Times is a world that’s broken.
It would be comforting to imagine this is the fault of the Illuminati. But the truth is our society is the collective outcome of all of our actions. There are constraints keeping us away from Utopia (limited time and resources, path dependence, etc.), but within the bounds of those constraints we get the outcome that we want. And apparently the outcome we want (i.e. want enough that we’re willing to work for it) is a dumpster fire.
Get your shit together humanity. It doesn’t have to be this bad. But it’s not going to get better if we keep rage tweeting about how awful it is how the other side keeps rage tweeting.
Kevin recently wrote a post that really tickled my brain. It touches on the computational aspect of entrepreneurship. There are a couple points I’d like to follow up on.
First I’d argue that the uncertain entrepreneur is not the analog of the blind watchmaker. This is a minor quibble, but I think it’s good to keep our language tidy and that includes clarifying our metaphors. The Blind Watchmaker is a perfect metaphor for the emergent order in markets. But the watch is the market as a whole. Any one entrepreneur is just a tiny component of the system–potentially an ingenious component, but always dwarfed by the genius of the system as a whole. The watch maker in biology is the process of evolution. In markets, the closest idea we have is the invisible hand–also an evolutionary process.
Second and more importantly, I’d like to poke at the genetic component of the metaphor to show how much harder social evolution is than biological evolution.
Evolution is a process that acts on the substrate of “replicators”. DNA replicates (in genes) and so do ideas/jokes/norms/etc. (in memes). I guess we could just say “a business model is a type of meme!” and be done with it. But even thinking about what Internet jokes spread means stepping away from the abstract genetic alphabet of strings of A’s, T’s, C’s, and G’s.
The replicators of entrepreneurial evolution occur at more than one level (as I understand it, the idea of multi-level selection is controversial in biology, but inevitable here): little patterns of behavior make up larger patterns. A burger restaurant is sort of like a buffalo. And the business model (e.g. McDonald’s franchise) is sort of like the species as a whole or perhaps something even broader. All the various ways to market burgers compete across a range of niches, but we don’t have a literal genetic code to analyze. We might, hypothetically, be able to isolate the appropriate atomic unit of economic life, but I’m skeptical it would be terribly useful (at least for human understanding).
Still, what entrepreneurial and biological evolution have in common is that they are, fundamentally, complex sets of computations (in out-of-equilbrium systems) on a non-silicon medium. Entrepreneurs indeed face a different situation than genes, but that’s only because they’re dealing with multiple (tangled) layers of evolution spanning large scale things like:
economic patterns and business models,
through medium-scale things like the particular landscape of a particular market at a given time and place, down to micro things like the particular ISO specifications of some particular size of bolt.
It’s true that “unlike evolution, you…are trying to achieve something beyond replication…” as an entrepreneur. But at the end of the day a) your apparently high minded goals are really just their own evolving and replicating memes, and b) your apparently high minded goals are really just setting the stage for the atomic unit of evolution that really matters: the proper size and shape of a paperclip. It’s like Dawkins wrote in The Selfish Gene: It’s not really the organism (entrepreneur) that matters, it’s the gene (atomic unit of whatever sort of evolution).
Political/ideological debates have a lot of moving parts, and there are a lot of timely issues to address. Given the marginal impact of anything we do in this sphere (e.g. voting, sharing a blog post on Twitter, or being a solitary voter in a vast sea of the entire 6200 people in this country), it’s only natural that we have to economize on information and argument and that results. We can’t help but deplete the intellectual commons.
What are some low cost ways to improve the quality?
Value Intellectual humility.
Devalue the sort of behavior that makes things worse.
It bears repeating: value intellectual humility. It’s not easy. I’m as drawn the confident claims as you are. I’ve got a lot of smart people in my bubble and when they boldly declare something, I tend to believe them. But the “I honestly don’t know” posts deserve more attention and are less likely to get it. Let’s adjust in that direction. I’ll try to write more about things I don’t know about in the future (although I don’t know what that’s going to look like).
It’s a statistical impossibility that, of all of the people burned at the stake for heresy or witchcraft or whatever, nobody deserved some punishment received in an unfair process. Don’t get me wrong, witch hunts are a bad thing in general, but we can’t discount them as entirely (maybe just 99.9%) unjustified. But cancel culture is, like good old fashioned witch hunts is doing a lot of harm to the intellectual commons. I’m they catch more bad guys than 17th century Puritans, but lets not leave cancellations up to Twitter mobs. Particularly when it comes to cancelling ideas.
Far be it from me to peddle unreplicated psychological research (confirmation bias alert!), but I tend to believe that there’s something to the claim that the extreme poles of the ideological landscape exhibit some unsettling traits: narrow-mindedness, authoritarianism, and apparently Machiavellianism, narcissism, and psychopathy.
“Narcissistic psychopath” is not a label I’d like to see bandied about because it’s just too close to ad hominum. But “authoritarian” is a term I’d like to see more widely used as a pejorative, regardless of the position taken by would be authoritarians.
Let’s quit with the shouting, cancelling, flag waving, and blindly taking reactionary positions. Invite debate, and invite holding people accountable. But letting Twitter be the last word is as absurd as letting Helen Lovejoy-esque moral scolding decide how things should be.
A system of individual rights can allow widespread cooperation and human flourishing.
The world is full of emergent orders, like markets, with aggregate outcomes that are more than the sum of their parts.
But commitment to the first idea often blinds us to the full implications of the second.
Complex adaptive systems involve an infinity of illegible signals involving cooperation and competition in networks so complex that it would be impossible to replicate their success in any conceivable top-down system. The market is a discovery procedure. But the “it” that is the market is a collective thing. It’s a jointly produced phenomenon and it’s impossible to split it up without fundamentally changing it.
Likewise, a system of rights (including the rights underlying a functioning market) is a jointly produced common good.
Why does it mean anything to say that I own my laptop? Because when push comes to shove (if I’m willing to shove hard enough), other members of my community are willing to act in ways (formal and informal) that enforce my property right. (Interesting aside: If I reported my laptop stolen to the local police, they wouldn’t do anything about it. Perhaps this reflects the median voter’s level of regard for other people’s property rights…)
Ownership is not as simple as “I own this piece of property, period.” Instead, to own something is to have some bundle of rights to make particular decisions. I can decide what to plant in my garden, but I can’t decide to build a nuclear reactor in my front yard. I don’t need to go through some elaborate chain of natural rights reasoning to argue that your negative right to avoid externalities supersedes my positive right to do a thing. Doing so might be a useful exercise to see how (in)consistent our ruleset is. But the real system is much simpler (and much more ad hoc). Rights are as rights are enforced.
What am I driving at here? First, that we should be dealing with property decision rights as they are more than we deal with them as they ought to be. Second, individual rights require collective support. This puts constraints on how we move towards our Utopias.
Debating/convincing our intellectual opponents is necessary, but it’s really just a negotiation tactic. Discounting idiotic opponents is reasonable in the intellectual sphere, but we can’t just overlook the fact that those opponents are part of the environment we’re trying to shape. We don’t necessarily have to throw them a bone, but when we don’t make some group part of our coalition, we have to expect someone else will.
Our normative theories will convince us that group A can’t make group B’s lives worse for the sake of A’s ego. But if A perceives the subjective value of that ego boost to be high enough, and if A has the relevant rights, then B had better look out.
Improving the world isn’t simply a matter of making the right arguments well. We have to be entrepreneurial, and keep an eye out for how others might do the same. Political entrepreneurship means looking for the under-priced voters which is exactly what Trump did in 2016. He found a group A full of low-status voters who had been discounted by the political establishment. And because their rights to shape the collective outcome went unexercised so long, it was that much more disruptive when they were finally brought to the table. Likewise, BLM protests reveal that there is a group B that is ready to throw their weight around.
It’s election season (those quite weeks between October and November three years later) which means a resurgence in political economy superstitions! A particular tempting one is the Throw the Bums Out Theory of Governance.
The theory goes like this: things are awful, awful people are in positions of power, therefore we need to get rid of those awful people.
As instincts go, it’s not the worst. But it’s Twitter level thinking. Yeah, it’s worth celebrating the regression to the mean that will be the end of Trump’s presidency. I’m looking forward to the “regular” amounts of corruption and embarrassment. But those “regular” amounts are still problematic. The lesser of two evils still sucks. The mean we’re regressing to is the real problem.
In other words: the political outcomes we get reflect the underlying political reality (give or take). As Mencken said: we get what we want good and hard. Political outcomes involve (mostly bad) luck, but Trump wasn’t some utterly random accident. He happened because enough American voters wanted that (more than the next best alternative, anyways).
Throwing the bums out is cathartic, but there’s no shortage of bums to replace them.
The problem is not the bums, it’s the system as a whole. Trump was able to screw things up so badly because we’ve set up ground rules that a) gave him the ability, and b) required more competence than he was ready or able to apply. But elections don’t choose the qualified candidates, they choose the popular candidates. And if one thing is obvious in 2020, it’s that we can’t count on magically educating our political opponents into having the enlightened views necessary for us to make sure the best candidates are always the most popular.
In the long-run, the task is to make incompetent morons less important–something I hope everyone can agree is a worthwhile goal (#neverHillary, #neverTrump). The current system means ideological tribes have to be constantly warring with each other to make sure presidential power doesn’t get into the wrong hands. Can we please agree that this is a terrible system?
We can lower the stakes. We can push power back to the state and local level (and give people an incentive to actually pay attention to local issues!). Let’s take a break from partisan entertainment–as fun as Project Lincoln is, let’s face it, they’re not convincing anyone–and get to the hard task of being a self-governing society. Let’s ask how we could set things up so we don’t have to worry about the next Clinton or Trump.
Until we change the system, we’re going to keep seeing more of the same. Let’s shift the conversation away from “that candidate’s terrible, how can we defeat them?” and towards “this setup attracts terrible candidates, how can we fix that?”!
My general point has to do with this anti-democratic argument:
[…] where are the masses to stand up against war, bank bailouts, taxation, police aggression etc?
These are all Bad Things that democratic governments do, but they are also Bad Things that all governments do. And, in turn, these Bad Things are much less prevalent in democratic societies than they are in non-democratic societies.
In fact, it is only in democratic societies that you can complain about these Bad Things. It is only in democratic societies that you can do something about these Bad Things (even if it’s just blog-ranting).
This simple observation leads me to conclude that anti-democratic libertarians have it back asswards when it comes to democracy. Democracy is a byproduct of liberty. Maybe anarchy would lead to even less “war, bank bailouts, taxation, police aggression etc,” but as of now it is in democracies that these Bad Things have been made less prevalent.
Anti-democratic libertarians aren’t thinking on the margin when it comes to democracy. (Hence the dogmatism you find in certain anarcho-capitalist circles.)
I took a look at the table Easterly & Kraay provided in the paper that you cited (here is an ungated pdf; it’s on pg 22) and all of the rich small states save for The Bahamas (which is 50 miles away from Florida) enjoy military protection from larger polities.
Bahrain and Qatar have the US Navy looking after them, Iceland is in NATO, Bermuda is a Crown Colony, and Luxembourg is nestled comfortably in between France and Germany (and people say the EU is worthless!). If you throw Macau and Hong Kong into the mix you’re looking at a well-protected group of microstates.
It’d be very interesting to see how empirically robust this observation is, but I suspect it won’t be done because most people who focus on microstates tend to have a soft spot for them. To acknowledge the deep intertwinement that successful microstates have with larger polities is to acknowledge the prominence that incoherence and messiness enjoy when it comes to existence of states and the issue of sovereignty.
An interesting result from behavioral/experimental economics is that bubbles can happen even with smart people who should know better. But once those people go through a bubble, they do a better job of avoiding bubbles in the future.
I think this result has major implications for society more broadly and I think we’re seeing it play out in the news. In the ’70s people learned a lot of hard lessons about things like stagflation (and racism–but ask a sociologist about that) that made the following decades easier. But those people gradually retired and were replaced with people who weren’t inoculated to certain ideas (like the idea of inflating your way out of a supply-side recession).
We’re now living in a world where the median voter and her elected representatives have unlearned those hard lessons. And so we’re going to live through the 1970’s again. Hopefully. If we’re not so lucky we might live through the 1930’s again.
There’s a whole set of simple but profound lessons that, if I were being lazy, I might call “the economic way of thinking.” We move through a hand-me-down world, solving some problems and creating new problems, adjusting and adapting, and shaping the world that we pass on to the next generation.
I just stumbled on a lovely example in an article about ballpoint pens and the end of cursive. A technological change changed the nature of handwriting, but the structure of human capital lagged behind. Specifically, the widespread adoption of ballpoint pens meant the old way of writing–how to hold the pen, how to form the letters, etc.–was poorly suited to the tool being used. This should have been an opportunity to test unchecked assumptions (e.g. about what the “correct” way to write is) but instead an inefficient practice (cursive writing with a bic pen) persisted in the face of increasing obsolescence.
I particularly like the idea of trying something new (fountain pens) can lead to a realization that some old method has a lot more going for it than was obvious to the non-alert.
I wonder how many other mundane skills, shaped to accommodate outmoded objects, persist beyond their utility. It’s not news to anyone that students used to write with fountain pens, but knowing this isn’t the same as the tactile experience of writing with one. Without that experience, it’s easy to continue past practice without stopping to notice that the action no longer fits the tool. Perhaps “saving handwriting” is less a matter of invoking blind nostalgia and more a process of examining the historical use of ordinary technologies as a way to understand contemporary ones. Otherwise we may not realize which habits are worth passing on, and which are vestiges of circumstances long since past.
Learning takes time. So in a dynamic society, it’s natural that there will always be some sort of practice outliving its utility. The only other way I see is stagnation: no new methods, no new problems, and we eventually setting into a “making the best of it” equilibrium.
The discovery of each of these inefficiencies creates some pocket of entrepreneurship. Sometimes it’s a massive, market oriented bit of entrepreneurship–like Bic industrializing the process of making cheap, reliable pens. Sometimes it’s a niche community of hobbyists (who might be incubating the next big thing). But that entrepreneurial reaction to inefficiency is pretty exciting. Realizing how my bad handwriting is the outcome of a technical problem makes me want to try fountain pens.
Paid sick leave is something I want more people to have. Of course it’s a good thing. Sick leave is valuable, but it’s not free so we have to ask it it’s worth it.
Right around the 11:30 mark is a tragic and hilarious line: “Dildos are not essential items. Books for kids, yes, but dildos? … No!” Good for John Oliver noting that deciding what is essential isn’t straight forward–apparently frivolous things might keep people inside and so serve the public health.
This is a classic Austrian point: prices (are supposed to) communicate information about how urgently people want a product. We run into trouble trying to prevent prices from reflecting the underlying economic crappiness of a crisis. Price gouging should be allowed for toilet paper and especially for grocery/Amazon workers. And the price of grocery workers should be passed on to consumers.
What we’ve got now requires each of us to not only ask “am I willing to pay this price?” but also engage in a moral calculus that is hard. I have to ask (as a person striving to be moral) if it’s really worth ordering X, Y, and Z from Amazon. But as a person who has to strive to be moral, it’s entirely too easy to fall for bad rationalizations.
So how do we help these essential-yet-replaceable* workers? Paid sick leave sure sounds good. And given the externalities involved in a pandemic, there’s a strong argument for mandating it.
But it’s worth remembering (particularly as a long run policy) that if we push on one part of a compensation bundle, something’s going to give. If we require employers to provide a company car (or simply encourage company cars through preferential tax laws), we shouldn’t be surprised to see monetary compensation fall. The same logic applies to paid sick leave.
But I’m my own devil’s advocate, so let me make a counter argument. I rarely use my sick days. I think I’ve taken 2 or 3 in the last 6 years. (I’m absolutely reevaluating that position now!) There’s this idea floating around in the back of my head that tells me to just tough it out and keep working. This isn’t because I carefully weighed pros and cons, it’s just received “wisdom” picked up by osmosis from the broader culture.
American culture values work over value. There’s no shortage of bullshit work because we’re in a work-too-hard equilibrium. This is not to say that hard work doesn’t have benefits. I’m happy when ambitious entrepreneurs work “too” hard to provide greater value. But there are a lot of cases where we create work for its own sake (especially in the higher ed racket, but apparently we’re not alone).
Essentially, we’re all playing a coordination game where we choose between “[appear to] work to make things better” and “stay home instead of passing your illness to other people.” Given American work culture, the Schelling focal point is <work, work>.
On the compensation end of things employers have to decide between offering more sick leave or some other compensation (like money). In this end, there is some benefit to zigging where other employers zag. If I’m running the only business to offer paid paternity leave, I get my pick of the best family-oriented workers while my competitors have to outbid each other to get the best of the other workers. But any mid-level HR manager is more likely to play the risk-averse strategy of following “best practices.”
So we’re in an equilibrium that underrates sick leave. We want to be in an equilibrium where it’s just good business sense to offer sick leave during a global pandemic. But coming from our current equilibrium, offering sick leave is a costly decision to privately provide a public good; it’s unlikely to happen unless the culture already promotes it.
I think we can get that equilibrium. I think we’re already moving towards it (ask yourself: would the board of the East India Company be more likely to offer sick leave than Amazon?). But we’re not there yet.
Paid sick leave should be good business sense right now**. But it depends on a culture where such behavior is widespread. I’m not convinced we could flip a switch and get that culture over night. Given that, I’m at least somewhat okay with contradicting my libertarian priors and calling for emergency mandates for paid sick leave. 2020 America isn’t likely to coordinate on the “right” short-term solution and coercion is probably the most efficient*** way to deal with this common pool problem. But outside of a public health emergency we shouldn’t allow top down mandates about the mix of compensation offered in markets (certainly not with the sort of people we elect to be on top).
(A couple rhetorical points: First, John Oliver isn’t speaking the language of those on the right. They won’t even be convinced that the issues he’s talking about are important. I think that’s a shame. Second, this is a tough time to try to argue against paid sick leave. In 2020 America, mandatory paid sick leave is probably required because we’re at the wrong Schelling point. Again, I don’t think conservatives or right-libertarians will find Oliver’s motivations convincing, but I believe that they could be persuaded. But that’s another blog post.)
(Two important counterpoints to the above: first, price increases hurt the poor. The way to solve that is to give charity money to the poor, not to try to make markets communicate information about relative scarcity and act as charity–that’s half-assing twice and it’s bound to be more inefficient than the charity would be costly. Second many people categorized as “essential” aren’t in a position to demand higher wages*. I don’t have an easy solution to this issue. Let’s talk about it in the comments.)
*Which is to say, workers who are in the same position as water in the diamond-water paradox. **Not to say it would be cheap or easy. ***There you go. Now my friends on the left can accuse me of being a bloodless economist for opposing paid sick leave in general, and my friends on the right can accuse me of being a bloodless economist for supporting
In my industry there’s been a ton of discussion about how to handle grading for this spring semester. Campuses shifted to online instruction mid-semester. Students are losing jobs, struggling with home responsibilities, and otherwise being utterly thrown into the deep end of an unfair situation.
Here’s the thing: we all get it. C+ this semester will be a mighty impressive accomplishment for a lot of students this year. Nobody looking at and subjectively interpreting a transcript will fail to appreciate that. If I’m looking at your transcript, I’m going to look at your GPA for before this and heavily discount this semester’s GPA if it’s anything different than it was in the fall.
For some students, this pandemic will be a minor hiccup, or even a chance to rise to the occasion and excel. Good for them. For other students, it will be such a significant disruption that they won’t be able to learn the material they’re ostensibly in school for. And if they can’t pass the class, that sucks. Pandemics suck, and their impact on people’s educational progress is part of that suckiness.
We absolutely should look for ways to reduce the impact on those students. We need to grant exceptions for things like scholarships requiring certain timelines and GPAs (like my favorite NY state program). But life happens, and a if grades are worth having at all (which we should debate), then we shouldn’t abandon them now. We should just abandon the stakes we’ve attached to them.