There’s a simple alternative to regulation: liability. We don’t need to tell companies how to be safe if we make them legally responsible for negligence.
It’s as though Mass’s government decided that back-to-school season calls for creating real-life rent seeking examples for my class. They’re going to start taxing ride-sharing customers $0.20 per ride with five cents of that going to the taxi industry.
“The law says the money will help taxi businesses to adopt ‘new technologies and advanced service, safety and operational capabilities’ and to support workforce development.”
New technologies like an app that gets more use out of otherwise idle cars? Or an app that makes it easy to hail a ride with little wait? Or an app that brings supply into harmony with demand when demand surges? Oh wait! We’ve already got that and it’s the thing that’s being taxed!
There are a few important economic lessons that Massachusetts’ electorate is evidently in need of. Let’s start with taxes.
Taxes don’t stick
“Riders and drivers will not see the fee because the law bars companies from charging them.” They won’t see the fee, but that doesn’t mean they won’t pay it. A business only exists by collecting money from customers and paying some portion of that to suppliers. The government cannot tax a business without taxing that business’s customers and suppliers.
Granted, part of the cost will be reflected in lower profits (although profits aren’t as big as people think) which means Uber’s shareholders will face part of the tax. But what does that mean? It means 1) a little less money in pensions, and 2) potential investment capital is moved from the people who gave us the best version of taxi travel to the people who gave us the worst version of it.
Money is fungible and I don’t know how to run a cab company
Safety, new technology, and workforce development all sound good, but taxi companies (at least those that deserve to stay in business) will already be doing these things. Safety is important because accidents are costly (especially if your fleet size is limited by regulation). New technology is being adopted by every other (competitive) industry without government support. Other companies invest in their employees.*
Supporting workforce development is part of a larger trend of people supporting specific fringe benefits without appreciating the tradeoff between monetary and non-monetary compensation. And all these ideas reflect a faulty logic: just because something is good, doesn’t mean we need to force people to do it.
Voters simply aren’t in the right position to know if some good thing is good enough relative to other options. If you go into the backrooms of any industry you aren’t already familiar with you will surely learn about techniques and tools you had no idea existed before. So why should we expect that cab companies need regulators to tell them what to do? Let them learn from their trade magazines.
But there’s good news. If we mandated that cab companies use this new revenue stream to pay for new tires, they wouldn’t simply waste the money by buying superfluous tires. They’d stop buying tires out of their own revenues and start buying them from Uber’s. Telling someone to pay from their left pocket simply leaves more money in their right pocket for everything else.**
Extra money in cab company coffers could allow them to invest in better service, happier employees, “and help so taxi owners could buy ‘flagship’ vehicles like a 1940s Checker or a Porsche.” But cab companies are already free to reinvest their profits if they think doing so would create value (i.e. greater future profits). The more likely outcome is that they will simply have more money than before.
Competition is not the problem, it’s protectionism
When we see problems in the world we need to look for their root causes if we want to actually make things better. More often we act like a doctor diagnosing cancer is the cause of the cancer. Don’t want cancer? Outlaw doctors!
Cab companies aren’t as successful as they previously expected and the apparent culprit is Uber. But they only exist because an inefficiency in the market created a profit opportunity. Cab companies are doing poorly because they don’t provide as much value per dollar. And that’s largely because of regulation that prevents competition. Much of it was put in place specifically to protect incumbents from competition.
A lot of these regulations sound nice enough, but they still created the market niche that Lyft and Uber filled. And they protected cab companies from competition right up until ride-sharing became feasible.
Regulation is not the answer
Let’s give cabbies the benefit of the doubt for a minute. Let’s assume that they aren’t really in it for the cash-grab and that they just want to help people get around safely and conveniently. Let’s even assume that NYC’s medallion system is about congestion rather than competition.
If that’s the case, then there are better ways to address the root causes of the problems cabbies tell us to worry about. We don’t need to address each of these problems individually if we can find a few key causes at the root of each of them.
Cabs have medallions but civilians don’t, so congestion will still be a problem in cities until congestion fees are implemented that balance the demand for road access with its limited supply. Safety is important, but mandating extra inspections for only some types of cars is a half-assed way of dealing with it.
There’s a simple alternative to regulation: liability. We don’t need to tell companies how to be safe if we make them legally responsible for negligence. This is an important lesson for how we think about regulation in all industries. The basic logic is also why economists vastly prefer pollution taxes to specific regulations; it’s usually better to name the outcome we want and create a cost for failure to meet it rather than mandate specific behaviors.
Perhaps this means we should modify the laws that require all drivers to be insured so that some drivers have higher minimum liability coverage. That would be far less invasive and do far more to alleviate the concerns Uber’s critics raise than mandating specific behaviors.
Concentrated benefits dispersed costs
Okay, so maybe this is too small an issue to be concerned with. If that’s not by intentional design, then it at least reflects an evolutionary logic. This policy is likely to survive because the people it taxes will face a cost so small it isn’t worth doing anything about. Yes, Uber and Lyft have incentive to lobby against it, but it’s so close to invisible that they’ll probably be able to pass it almost entirely on to drivers and passengers.
This is going to cost millions… with a tiny little m. At first I read it as a 5% tax and quickly realized that Uber rides are so cheap that I won’t even notice it. And 20 cents a ride is even less than 5%.
So why worry? Precedent. The problem with death by a thousand cuts isn’t any one cut.
*Of course we can argue about whether they do enough of that. There may be a tragedy of the commons if there’s asymmetric information between people looking to make human capital investments and businesses looking to gain access to specific human capital. Such a situation might create an opportunity for government to do some good by investing in public goods or subsidizing on-the-job training. But if that’s the case, it calls for very different programs (education reform, etc.) than taxing successful companies to subsidize their competition.
**Why is this good news? Because if cab companies did change their behavior it would imply they’re doing something where cost exceeds benefit. It would destroy value. Remember those stories of WWII rationing? Imagine that situation but with cab companies buying twice as many tires and just storing extras in the garage. It would clearly be a bad thing. Scarcity isn’t so urgent nowadays, but the basic logic remains the same.
Hopefully, the US election will start getting out of the he-said-she-said of assassination attempts and badmouthing parents of military personnel and start being about actual policy issues. Unfortunately, that isn’t going to happen at all, but in a minuscule and futile attempt to help get us there, I’m going to blog about some policy issues for a minute.
Trump’s campaign released a brief memo about his healthcare positions recently. For the most part the positions—though not quite detailed enough to really call a “plan”—are fairly decent. They contain most of the reforms free-market analysts have been proposing for decades such as opening insurance competition across states, allowing for Health Savings Accounts, and streamlining Medicaid funding. Notably missing was abolishing the employer mandate to reduce price fragmentation, as Milton Friedman proposed, although Trump proposes taking steps in that direction by introducing a tax deduction for individual insurance plans.
But what stuck out to me was that Trump, surprise, surprise, made xenophobia an element of his health care proposal by furthering the myth that immigrants are a further drain on our healthcare and welfare programs:
Providing healthcare to illegal immigrants costs us some $11 billion annually. If we were to simply enforce the current immigration laws and restrict the unbridled granting of visas to this country, we could relieve healthcare cost pressures on state and local governments.
Meanwhile in reality, undocumented immigrants actually contribute more to Medicare than they withdraw. It is unclear where Trump is getting his $11 billion figure, but he is ignoring the increased payroll taxes undocumented immigrants pay into these programs. A 2015 study found that, in fact, between 2000 and 2011 immigrants paid up to $3.8 billion more into Medicare than they took out. From the results of the study:
From 2000 to 2011, unauthorized immigrants contributed $2.2 to $3.8 billion more than they withdrew annually (a total surplus of $35.1 billion). Had unauthorized immigrants neither contributed to nor withdrawn from the Trust Fund during those 11 years, it would become insolvent in 2029—1 year earlier than currently predicted. If 10 % of unauthorized immigrants became authorized annually for the subsequent 7 years, Trust Fund surpluses contributed by unauthorized immigrants would total $45.7 billion.
Thus Trump’s campaign is being factually dishonest by claiming that restricting immigration will help fund government healthcare systems, it will actually make Medicare go insolvent sooner. Which is especially concerning given that, until this memo, Trump has shown no interest in any meaningful entitlement reform.
This refrain—that immigrants are a fiscal drag on America’s welfare programs—has been among the most common refrains from Trump, and has even been popular among libertarians who are otherwise sympathetic towards immigration. But, as I’ve argued extensively in the past, it is completely false. Almost every major study shows that immigrants, at worst, pay as much into welfare programs as they get out of them.
I think Donald Trump has the attention span of a two year-old and the potty mouth of a six year-old reared by an indulgent grandmother who is also hard of hearing. I also think he is deeply ignorant on a very important issue (international trade) and I disagree forcefully with him on another (illegal immigration from the south). Finally, I believe there is little chance that a President Trump’s foreign policy would reverse the Obama precipitous decline of the US on the world stage, which I think is dangerous for Americans.
Not a pretty picture overall. So, it takes serious concerns for a dedicated, generally well-informed rationalist like me to vote for him. Here are the reasons why I will.
First, Trump has already told us whom he would appoint for the Supreme Court which sets the life conditions of American society for a generation or more. All his potential appointees are fine by me. It’s not difficult to guess that no Clinton appointee would be acceptable, not one, zero. Any of them would facilitate the creeping abrogation of the US Constitution we witnessed under Obama.
Second, I am certain – because it’s difficult to imagine otherwise – that a President Trump would try to stop and reverse most the climate change cult nonsense and relegate it to the level of a private religion where it belongs. His administration would allow an energy revolution sufficient in itself to rekindle economic growth. I see no prospect of normal economic growth under a Hillary Clinton presidency. (I mean 3% per year and over.) She has said herself that she would continue Pres. Obama’s paralytic policies.
Third, through the example of his sheer verbal brutality, Trump would lift some the yoke of political correctness. This is not a superficial or a light reform. I believe that political correctness actually paralyzes Americans’ criticality on nearly all issues. (Examples on request.)
My last reason is Democratic candidate Clinton of course, even if I leave aside every single one of the leftist policies she is likely to try to implement. Mrs Bill Clinton is still bought and paid for. The fact that I don’t know exactly by whom or by what only makes it worse. (Someone who would not braggingly share her $250,000 a shot speeches with the public is unthinkable to me.) On that account alone, if I had to choose between H. Clinton and Al Capone for president, it would be a toss-up. We know what interests Al was serving, after all.
There is worse: Her lies about her lies, her lies that have zero chance of being believed have become a proof that she is delusional, at least part of the time. By contrast, Trump ‘s untruths are like those of a little boy who can’t help himself from opening his mouth before he talks.
Presidential elections are not only about the presidency, of course. They give the winner’s party a confirmation of the validity of the principles it proclaims and of the policies it embodies. This is obviously true for well defined policies such as Obamacare. It’s true, more subtly, about cultural policies both explicit and implicit. Seven and half years of Obama administration have established firmly – with Big Media complicity – the language of envy and the spirit of beggardliness in American political discourse. Public speech is now built around platitudes, clichés, half-truths, and big lies repeated so frequently that they have become truth, Goebbels-style. The new liberal language is disgusting but completely predictable and thus boring. It’s also a form of child abuse. (Individuals who were 10 during Pres. Obama’s first campaign are now 19. They have never known public sanity.) As for Demo principles, there aren’t any. I count my blessings!
Donald Trump on his part, is his own buffoon. He is only an epiphenomenon. His objectionable traits are not part of a cultural movement. He is not contagious. There is zero chance the Republican Party, or the conservative movement are going to adopt his crudeness. Neither could if they tried.
I am angry about this cultural deterioration because I believe that in the long run what people do, what they accomplish collectively, is strongly constrained by culture. The contemporary American left-liberal culture shackles the imagination, and by doing so destroys many possible futures. Again, the Obama/Clinton conceptual swamp is vastly more of a lasting threat to America than the childish vulgarity and the ignorance Trump displays so frequently.
Being on the side of Trump often puts me in embarrassing company, I admit. But being on Clinton’s side would place me knowingly in vicious company. It would also range me squarely on the side of an intellectual class that has spent decades consolidating its collective blindness and its collective deafness about the reality of the world. It’s a class I know well because much of it lives in universities. There is no doubt that Trump as president is a big gamble. But Clinton is no gamble at all; her evilness is predictable.
Sometimes, to be a man of conscience, you have to gamble. That’s what I plan to do, on my behalf and on your behalf.*
* Public persons often contribute unwittingly to me finding my bearings: If Harry Reid, the corrupt real estate and proud deliberate liar loudly condemns Trump, there has to be something right about supporting Trump.
I am based in Turkey and have been at the edge of some dramatic events. Before I was in Turkey, I was in the Turkish sector of Cyprus (officially designating itself the Turkish Republic of Northern Cyprus, but only recognised as such by Turkey), where I followed the Postmodern or Indirect Coup of 28th February 1997 when military representatives on the National Security Council were able to force the collapse of a coalition government under an Islamist Prime Minister. Later that year I relocated to Istanbul where I experienced sporadic terrorism from Kurdish separatists and Jihadists. In June of this year I landed at the Atatürk airport just after an ISIS suicide attack. In a more gradual way I saw the disappearance of a Turkish political system under the guardianship of Jacobin laicist army generals, known as Kemalists after the first President of the Republic of Turkey, Kemal Atatürk.
The changes in Turkey came about through a de facto alliance between a party with Islamist roots, the AKP (JDP, Justice and Development Party) and the followers of Fetullah Gülen. Gülen was himself a product of Nurcu Islam, which developed in the early years of the Republic before World War Two as a reaction against the state-led secularisation of Turkey. Gülen was a not very well educated preacher who operated in the context of a fragment of the Nurcu movement, which is not as a whole connected with him. Given the enormous tension between laic Kemalists and the religiously observant population, there was room for a movement devoted to developing conservative Muslim power in civil society and the state.
The Gülenists were preceded in this by the Nakşibendi community, which targeted the state bureaucracy and had followers in politics, notably Türgüt Özal, Prime Minister and then President in the 1980s. Secretive and manipulative politics has been a feature of Turkish and Ottoman politics for a long time. The power of the Janissary elite military and bureacratic corps during the Ottoman period was tied to a religious community, the Bektaşis, creating a parallel system to the legal power of the Sultan until they were violently crushed in the late eighteenth century.
The Committee of Union and Progress, which came to power with military support in the last phase of Ottoman history, developed into a conspiratorial organisation rather than a parliamentary political parry, and a secret arm of it was at the centre of the destruction of Anatolian Armenians in 1915. Secretive groups of Unionists provided a power base for Kemal Atatürk when he revolted against the restored power of the Sultanate and its subservience to the partition/occupation of what is now Turkey after World War One.
The idea of a secret part of the state was maybe not so strong during the early years of the Republic when a one-party system (though in principle the republic was under popular sovereignty) under the dominance of Kemal Atatürk and then İsmet İnönü maybe made it less necessary. Nevertheless, the conditions were established for a revived politics of manipulation behind the scenes. Unfortunately, İnönü’s decision to join the west after World War Two played a part in this. The reorientation resulted in free elections in 1950, with a change in government, and Turkish membership of NATO in 1952.
As in some other countries, the Gladio units played a role in dark political activities. These were the units established to engage in resistance in the event of a Soviet invasion. They had a secretive army within an army aspect and were inevitably a magnet for the most fiercely anti-communist officers, including Alparslan Türkeş, who played an important role in the 1960 Coup. Türkeş was expelled from the coup government, which found him too radical, but he founded the extreme right party in Turkey, Nationalist Action, which is comparatively moderate now, but was heavily involved in political destabilisation and terrorism along with the most anti-communist parts of the state.
What came later was infiltration of the state by Nakşibendis and then Gülenists. Their activity was rather overshadowed by the darker activities of the army and its extreme right allies, often also connected with the Mafia. This network is often known in Turkey as the Deep State. It tended to favour a secular democratic system in terms of formalities, but with concessions to religious conservatism along with an anything goes attitude to covert war against communists and then more importantly Marxist Kurdish autonomists, as well as very limited tolerance for the Left. The hard right element of the army with a base in Gladio was not the whole story. There were far left army officers, particularly up to 1971 and a general staff that tended to be in the middle, though the middle tended to move further right from 1960 to 1980, and then became unwilling to launch anymore violent coups after the 1980 military council stepped down in 198. The general staff itself became increasingly concerned about infiltration by Islamists, including Gülenists.
As it turns out the army’s fear was more than justified. The country liberalised, from a very illiberal base, in the late 1990s, and while the army to some degree went along with that, it launched a peaceful ‘post-modern’ coup in 1997 against the Islamists and was left with the image of the pillar of anti-democracy and anti-liberalism in Turkey. This is an important part of the background to the AKP ‘moderate’ Islamist/conservative democrat electoral victory of 2002 along with the economic crisis of 2001, which along with the 1997 coup left the secular parties very fragmented. The AKP gained a lot of liberal and libertarian support (a very small proportion of Turkey though) and more general reformist support from those who believed it would be a vehicle for reducing the military role in politics and for generally less nationalist-statist politics.
The AKP had very few supporters in place in the military, in the state bureaucracy, or in senior positions in education. The Fetullah Gülen campaign to turn his supporters into the dominant force in Turkey meant they had people in these positions, partly through infiltration of state institutions and partly through founding private educational institutions. This was just one part of the Gülen empire, which include major media groups, banks, and industrial companies in Turkey, and in many countries outside Turkey including the USA. Gülen himself moved to the USA to avoid prosecution by the Kemalist old guard before AKP came to power, claiming to have no links with the economic and educational empire of his supporters which is clearly less than honest of him.
The Gülenists expected a large role in the AKP government and served them most spectacularly in purging the armed forces after an attempted website coup in 2007. In that year the armed forces, unwilling to launch an outright coup, hoped to influence public opinion and the political process by placing a message on its website proclaiming the army’s guardian role in relation to secularism. This turned into the final political defeat of the army’s Kemalist guardian-tutelary role. The AKP won a general election and a referendum to change the method of electing the President. This triumph of civil electoral politics was, however, undermined by the trials of supposed armed coup plotters in the armed forces. Such trials gave the impression of completing the civilian dominance over the army, but were themselves rigged using weak and outright faked evidence. The judges and prosecutors were from the Gülen movement and were creating space for their own people to take the high offices in the armed forces.
The AKP began a campaign against the Gülenists after making its own illiberal core attitude very clear in 2013 in its highly intolerant and authoritarian reaction to the Gezi protest movement. It was increasingly clear to the (even then) most enthusiastic of liberal fellow travellers with the AKP that it was Islamo-nationalist and statist at its core, reducing democracy to the unlimited will of the party elected to government. The Gülenists and the AKP now found the state was not big enough for both of them and the Gülenists decided to use conspiratorial methods against the AKP. Audio files and video tapes of AKP figures and associates, which had evidently been kept in reserve and which suggested widespread corruption were released. Recep Tayyıp Erdoğan (then Prime Minister and now President) and the AKP government succeeded in sacking, retiring and transferring enough Gülenist police officers, prosecutors and judges to stop this evidence coming to court. They then declared the Gülenists to be a parallel state and a terrorist group, entering into a process of purging the state of Gülenists and seizing their assets in the media, educational and other sectors. The coup conspiracy convictions against army officers, and others, were overturned and it became widely accepted that Gülenists had rigged the trials.
On 15th July this year, I was at a small party on a terrace in the Üsküdar district of Istanbul, overlooking one of the Bosphorus bridges, though by quite a large distance. We could see traffic interrupted on the bridge and news began filtering through of a confrontation between police and army units in what was described as an anti-terrorist operation gone wrong, but was beginning to sound like the beginning of a coup. It turned out that a coup had started and for a brief part of the night it appeared that the old Kemalist-Guardian army had come back to dispose of a government that was elected but increasingly authoritarian. Any welcome in the party where I was, of secular anti-AKP Turks and foreigners was strongly outweighed by a fear that a coup regime would be authoritarian, would create new problems, and the AKP or something like it, if not worse, would be in power for ten or twenty years by way of reaction. This turned out to be the mood of anti-AKP and anti-Erdoğan Turkey. It also became increasingly reported and accepted across the political spectrum that though the putschists had adopted Kemalist language, they were for the most part Gülenists rising up before a purge of the army in a last grasp at domination of the Turkish state.
Since then a purge has unfolded against the Gülenists in state and society, covering the universities (the sector where I work), which has already led to the sacking and arrests of about 60 ooo, including constitutional court judges, army generals and university rectors. The number will certainly at least double before the purge and the current state of emergency is over. Such sweeping action is understandable up to a point given the violent actions of 15th July, and the accumulating evidence over the years of Gülenist infiltration to create a Gülenist-controlled state and society, but clearly the potential exists for massive and systematic individual injustice with abuses of state power affecting over enemies of the state, real and imagined. Some of the language President Erdoğan has used since the coup has been highly polarising and vengeful, demanding submission to state power; some of his rhetoric has been more conciliatory, recognising that all political parties opposed the coup and that deputies across the spectrum sheltered together in the basement of the National Assembly fearing for their lives. I cannot say I am hopeful that the post-coup atmosphere will be beneficial to liberty, but we should hope for and work for the best in Turkey, while being vigilant in working against further declines of liberty.
I have been debating classicalliberalism and the EuropeanUnion with Edwin van de Haar. For the moment at least, I think the debate should end or we will risk repetition of previously made points. I would like to thank Edwin for a constructive debate and to invited readers to read through it themselves. Now is the time to move onto a more concrete discussions of the UK referendum vote to leave the European Union.
The UK referendum vote to leave the European Union is not producing the consequences its most eloquent supporters and ideologues had predicted. It is of course very early to have a complete view of the consequences of Brexit, but a large part of Brexit journalistic, campaigning and intellectual elite have argued for leaving the EU on the grounds it would enable a mıore free market UK, one less burdened by regulations ‘imposed’ from Brussels.
A disproportionate part of this elite claims to be libertarian or conservative libertarian, operating in party politics via the Conservative Party and the UK Independence Party and operating in libertarian to conservative campaigning groups. Employees of the most important classical liberal and libertarian policy institutions, the Institute of Economic Affairs and the Adam Smith Institute were divided on this issue. However, some part of the Brexit elites were High Tory, that is traditionalist conservative.
The insistence on sovereignty and national institutions outweighs a commitment to free markets and individual rights. Immigration in particular comes off badly here. The High Tory narrative dominates the Brexit narrative in practice. Some Brexit enthusiasts welcome the supposed opportunity to boost defence spending (though this has nothing do with the European Union which places no limits whatsoever on national defence spending) and believe Brexit will allow restoring the UK’s Great Power status. This is already very high by general European standards and given the inherent limits of the UK’s resources compared with the USA, Russia and China, it’s hard to see how great power status could be attained and why the UK should try. It is clearly not compatible with retrenchment of the state.
David Cameron announced his resignation as Conservative Party leader and Prime Minister straight after the referendum result. His replacement Theresa May began her term of office with a speech suggesting greater state involvement in the economy and society. As Home Secretary she has a particularly illiberal record in civil liberties, immigration and drugs. She has announced support for changes in company law to force firms to accept employee representatives onto boards and restriction on takeover laws.
These measures have led the ‘Red Tory’, Philip Blond, to announce compatibility with his views and enthusiasm for her leadership. Blond runs the policy institute, ResPublica (http://www.respublica.org.uk). He was a colleague of mine in graduate programs at the University of Warwick in the late eighties, though I have not been in touch with him since. He moved from a period of research and university teaching in theology (he was studying European philosophy since the early nineteenth century when I knew him) into the policy world.
The contemporary theologian who influenced him most is John Milbank, an adherent of a version of the Christian tradition which tends to advocate community above individual, or at least would seem to do so if its social philosophy is turned into state enforced actions. There is a strong element of Medieval nostalgia for an organic society in Blond’s social and political thought. He is arguing for less not more free markets and individualism. Now there is no reason to think that Blond’s ideas will have a major influence on May, but if he feels so comfortable with her then that is reason to think there will be strong streak of communalist conservatism in the post-referendum government and even a hint of Christian socialism.
May’s approach has also been compared to that of Joseph Chamberlain, a nineteenth century advocate of interventionist local government and then of a protectionist, state-welfare orientated British Empire; he was as well considered by some to be the strongest advocate of Empire ideology in his time.
Previous free market advocates, who found it easy to be advocates when the EU served as a scapegoat for any and every overextension of state activity in the UK (whether or not in reality it originated with the EU), have become less clear in their commitment given that some EU support for open markets, such as bans on subsidies to keep bankrupt companies afloat, are no longer available. With some institutional supports for free markets removed, the Brexit liberty advocates find themselves in a world of paying off voters who voted for ‘leave’ because they don’t like ‘neoliberalism’ and blame any difficult consequences of technological invention and market innovation on Brussels Bureaucrats along with immigration from EU countries.
One key theme of the more ostensibly libertarian parts of the ‘leave’ campaign was to argue that they did not want to reduce immigration, but globalise it by replacing automatic rights of EU citizens to live in the UK with an Australian points system, which allows people to enter from anywhere in the world who has sufficient points with regard to educational level, scarce skills, money to invest and so on. However, it is clear that many ‘leave’ voters just want a reduction in immigration and May has distanced herself from a ‘points’ system in favour of absolute reduction.
The ‘leave’ vote won based on the anti-immigration, anti-globalist and anti-‘neoliberal’ instincts of a significant section of the ‘leave’ vote. It is not the whole of the ‘leave’ vote, but ‘leave’ could not have won without it. The evidence so far is that whatever the intentions of the libertarian to conservative element of ‘leave’ thinking that the government is now driven by the wish to follow that aspect of public opinion. The UK is headed towards communalist corporatism, or even protectionist/mercantilist, security-state Great Power nationalist versions of conservatism. Clearly there is much work for liberty advocates to do in the UK counteracting this disaster.
In another thought-provoking post on Facebook (does the guy ever write mediocre stuff, I wonder?) Barry raised the question of the relation between classical liberalism, nationalism and cosmopolitanism. He wrote the following:
“On the capture of classical liberal/libertarianism by anti-cosmopolitans. This is very influential at the heart of the ‘leave’ ‘elite’ in the UK, and can only be destructive of classical liberalism/libertarianism. The immediate political consequence of Leave is the elevation of Theresa May to Tory leadership/Prime Minister’s office on a much more ‘Red Tory’, communitarian, corporatist foundation than existed under Cameron. ’To the extent to which the current wave of populism maps into a conflict over national versus transnational identity (Dan Drezner is unconvinced), the problem is not an excess of cosmopolitanism but rather its absence, especially on the conservative, free-market right.”
He seems to take a positive relation between classical liberalism and cosmopolitanism as the default position. Of course Barry did not provide definitions in a FB post, but here I take cosmopolitanism to mean “the idea that all human beings, regardless of their political affiliations, belong to a common moral community. Cosmopolitans often believe that all individuals have the same basic moral status, and tend to downplay the importance or desirability of national political institutions. [They are] opposed to nationalism” (source: Matt Zwolinski (editor), Arguing About Political Philosophy, Routledge, 2009).
I argue that Barry overlooks that classical liberalism combines a cosmopolitan side, with a strong defense of national political institutions (e.g. the state). The cosmopolitan side is perhaps easiest to see, if one takes the idea of free trade as the guiding principle. Free trade is by nature morally neutral for the individuals involved, and has numerous positive economic effects; it fosters cultural exchange as well as innovation and knowledge sharing. In that sense classical liberalism is indeed related to cosmopolitanism.
Yet this stops where the national state comes into play. Classical liberals never predicted any positive political effects of trade (see my earlier notes on this topic) and, just as importantly, they actually favor a strong state, with a limited number of tasks. At the same time, from Hume and Smith onwards to Mises and Hayek, they strongly dislike the idea of transnational political institutions, because these lack any substantial emotional basis which nations do posses. Also, these large political institutions easily become a threat to individual liberty, even more so than national states with too many tasks. So, there is no really no relations between political cosmopolitanism and classical liberalism at all.
There is also no relation between nationalism and classical liberalism. A preference for the national state does not lead to nationalism, which is the vicious and poisonous belief in the superiority of one’s country, often accompanied with a dislike of allegedly inferior neighboring countries or peoples or groups. This is collectivism turned even worse, which is a double ‘no’ from a classical liberal perspective. This said, if patriotism is defined as national pride, then classical liberalism and patriotism can and will go together. There is a fine line between the two sometimes, but patriotism is not violent and dividing, but a binding force between individuals sharing a national state.
The last point is on the European Union. Hayek and Mises have been on record with strong support for a European Federation, primarily as a remedy to war-torn and nationalism-infected Europe. In these circumstances the default position of an international order as a society of states no longer functioned, so there was a need to seek an alternative. Needless to say their federation had little resemblance with the current super state we know as the European Union, which has become a classical liberal nightmare in terms of liberty and property rights violations it commits on a daily basis.
The current EU has some classical liberal traits (the imperfect common market is the single most important one), which is of tremendous use to all European individuals. It is, however, way too cosmopolitan in the bad political way. A likely consequence of Brexit is that this will become even worse, now that the French and their allies will get more room for their collectivist fallacies.
Past Friday, 51.9% of the British have voted to leave the European Union against 48.1% of those who have voted to remain. The details of the EU referendum can be found on BBC’s EU referendum page. Although it is still unclear what shape the relationship between Britain and the EU will take, I expect that the Brexit will offer good economic opportunities for Britain provided that they can reach free trade agreements with all nations within the EU and provided that they will continue to open up their markets for free trade with other countries outside of the EU.
An Exit of the Netherlands, or a Nexit, will have more consequences than a Brexit as the Netherlands are also participants in the European Monetary Union. A Nexit could therefore lead to an end of the Euro. An analysis of the EU is a political analysis and as politics is always complemented by power, this analysis should hence incorporate insights on power struggles and competing visions. Each country has its own interests within the EU, just like any politician within the EU has his own special interests that he is serving. Participation in the EU is often represented as an exercise of solidarity and political appeasement, however it is still politics with politicians’ usual desire for self-enrichment.
There have always been two competing visions of the EU. The first one is a classical liberal vision, led by German speaking Christian democrats Schuman (France), Adenauer (Germany) and Alcide de Gasperi (Italy) with the Treaty of Rome (1957) as the greatest achievement of this classical liberal vision for Europe. The Treaty sought to deliver the following four freedoms: free movement of goods, freedom of movement for workers, the right of establishment and freedom to provide services, and free movement of capital. The other vision was a socialist vision led by mainly French politicians, such as Jacques Delors and François Mitterrand whose goal was to create a supranational state.
Treaty of Rome.
Classical liberal vision The first vision promotes political competition between the EU’s member states by opening up borders. When a person is discontent with the excessive taxes in his country, he could leave his country for another. Competition between member states would lead to smaller governments, lower taxes, and political respect for people who would want to pursue their individual freedoms in another member state. It would represent a return to the political model that was prevalent in Europe from the Middle Ages to the 19th century when different political systems coexisted independently. There were independent cities or city states in Flanders, Germany and Northern Italy. There was the kingdom of Bavaria, the republic of Venice, and small city states like Ghent and Bruges embraced their autonomy. The German writer and poet Johann Wolfgang von Goethe (1749-1832) had expressed the beauty of such a political system as follows when he discussed a Germany that was still splintered in 39 independent states:
“I do not fear that Germany will not be united; … she is united, because the German Taler and Groschen have the same value throughout the entire Empire, and because my suitcase can pass through all thirty-six states without being opened. … Germany is united in the areas of weights and measures, trade and migration, and a hundred similar things. … One is mistaken, however, if one thinks that Germany’s unity should be expressed in the form of one large capital city, and that this great city might benefit the masses in the same way that it might benefit the development of a few outstanding individuals. … What makes Germany great is her admirable popular culture, which has penetrated all parts of the Empire evenly. And is it not the many different princely residences from whence this culture springs and which are its bearers and curators? … Germany has twenty universities strewn out across the entire Empire, more than one hundred public libraries, and a similar number of art collections and natural museums; for every prince wanted to attract such beauty and good. Gymnasia, and technical and industrial schools exist in abundance; indeed, there is hardly a German village without its own school. … Furthermore, look at the number of German theaters, which exceeds seventy. … The appreciation of music and song and their performance is nowhere as prevalent as in Germany, … Then think about cities such as Dresden, Munich, Stuttgart, Kassel, Braunschweig, Hannover, and similar ones; think about the energy that these cities represent; think about the effects they have on neighboring provinces, and ask yourself, if all of this would exist, if such cities had not been the residences of princes for a long time. … Frankfurt, Bremen, Hamburg, Lübeck are large and brilliant, and their impact on the prosperity of Germany is incalculable. Yet, would they remain what they are if they were to lose their independence and be incorporated as provincial cities into one great German Empire? I have reason to doubt this.”[1]
In addition to the advancement of political competition, the vision also promotes economic competition. A German employee would not be obstructed from working in France anymore, a Dutchman would not be taxed by the government if he transfers money from a Dutch to a Spanish bank or when he decides to buy stocks on the Italian equity market. Nobody would withhold a Belgian brewery from selling beer in other countries within the European free trade area.
Socialist vision The second vision promotes a European central state that holds the power to enact more regulations, redistribution of wealth, and harmonization of legal systems within the whole Union. A strong central political body is to coordinate such efforts. The consequence is that its member states would increasingly have to give up their sovereignty. This is clearly visible from the political events in Greece and Ireland during the financial crisis of 2008 when Brussels demanded from Greece and Ireland how they should deal with their deficits and what austerity measures they should take. The socialist vision of Europe is an ideal for the political class, bureaucrats, interest groups and the subsidized sectors that want a powerful central state for their self-enrichment. Political competition among its member states, something that the classical liberals supported, should be eliminated. Doing so, Europe becomes less democratic and political power is increasingly shifted into the hands of bureaucrats and technocrats in Brussels. Historically, such plans for concentrated political power had been realized by such figures as Charlemagne, Napoleon and Hitler. The difference with our times is that the creation of a modern European superstate does not directly require military means. The introduction of new institutes like the European Central Bank, a common currency like the Euro, and extended power of the European Commission would suffice. Similar socialist intentions were already visible from the start of the European integration in the European vision of Jean Monnet, the intellectual father of the European community. Fearing an independent and emerging Germany after the second World War, an integration of Germany into Europe was considered to be a good thing. Next to that, the French wanted to have control over the Rühr area and they wanted to keep other vital German resources out of solely German hands. After losing her colonial powers in Indochina and Africa, the French ruling elite were also looking for new influence and pride which they eventually found in the European community.[2] The French premier in 1950 had for example proposed a plan to install a European army under the leadership of the French.
Why it is good for the Netherlands to leave the European Union I believe that the EU should never have had more ambitions than the free trade zone that requires no supranational institutes, except for a European Court of Justice that is restricted to supervising conflicts between the member states and guaranteeing the four freedoms. The EU has become so far removed from the classical liberal vision of political and economic competition that it is not worthwhile anymore for the Netherlands to participate. It has declined into a malignant cartel of states that can tell its members with whom and how they should conduct their trade. A good example were the quotas and import levies on Chinese solar panels in 2013 under the disguise of ‘anti-dumping’ measures. Several countries like the Netherlands and Germany had first opposed to these measures as they would like to maintain good relationships with China. Nonetheless, the European Committee, apparently under influence of solar panel lobbyists like those of the German producer Solarworld AG, introduced ‘anti-dumping’ measures. The eventual winners of such measures are European solar panel producers and its victims are the European people that simply want to buy cheap solar panels. Another example are the sanctions that the EU had imposed on Russia since the Ukrainian conflict – a conflict that was provoked by American imperialists and NATO.[3] The deteriorating trade relationships between the EU and Russia is also detrimental to the wealth of ordinary European citizens. Another recent example is the prohibition of high-powered vacuum cleaners and possible future bans on other energy appliances such as kettles and hairdryers in order to reach environmental targets.[4] Those who profit from such measures are mainly large legacy organizations such as Bosch and Siemens that have enough capital to meet the strict EU regulations.
Another reason why a Nexit would be good for the Netherlands is that it offers an opportunity to extricate oneself from the Euro and the implicitly pledged financial aid when a future financial crisis will tear through Europe.
The tragedy of the Euro The introduction of the Euro has proven to be a huge mistake, because it has enabled fiscally irresponsible governments of such countries like Portugal, Italy, Greece, Spain etc. to conduct unsustainable economic policies. In the past, when these states had their own currency, their governments had to finance their budget deficits through the sales of government bonds which resulted in higher government debts. The higher government debts manifested itself in higher interest rates on their government bonds, and a greater money supply would lead to devaluations of their currencies.
To illustrate how the process of government bonds financing works in the European Monetary Union, we could look at the development of 10-year government bonds. The graph below shows the interest rates that governments have to pay to the financiers of their 10-year government bonds from 1995 to 2011:
Interest rates on 10-year government bonds from 1995-2011.
The y-axis represents the rates of interest that an investor receives from 10-year government bonds. Countries that are economically stronger and fiscally more conservative are rewarded with lower interest rates due to the smaller risk that these governments will not pay back their loans. In the case of Germany, a country with traditionally a stronger economy, a more conservative Bundesbank, and a fiscally more responsible government than many other European nations, investors received 7.5% interest on their 10-year government bonds in 1995. Greek government bonds had a yield of 18% in 1995. 1995 was the year in which the European Committee had announced that the Euro would arrive in 2002. Interest rates on government bonds consequently converged in the following years. At the end of 1997 all rates of interest on Portuguese, Irish, Spanish, Italian, French and German 10-year government bonds were more or less equal despite the fact that many of the governments of these countries still spent more than they received in tax incomes. The consequence of sharing a common currency with fiscally more responsible countries like Germany and the Netherlands is that fewer price signals in the form of higher interest rates on government bonds of fiscally irresponsible governments emerge. Irresponsible governments can issue government bonds to the banking sector that transfer these bonds as collateral to the ECB in return for loans. The interest rate that banks pay for the loans of the ECB are issued as profits to their governments. This is in short how ‘seigniorage’, the profits derived from money creation when the costs of money production and the distribution of money are lower than the value of money itself, is created.
Sovereign debt financing in the European Monetary Union.
This process leads to inflation, but the costs of inflation in the EMU are not solely borne by the respective country that issues the government bonds, but by all countries that participate in the EMU. A country like Spain can for example issue government bonds that traditionally would correspond with 10% inflation. However, when other countries like the Netherlands and Germany issue an amount of bonds that corresponds with 5% inflation, Spain benefits from seigniorage as the inflation created by Spain is higher and borne partly by the Netherlands and Germany. A Euro in this regard is beneficial for fiscally irresponsible governments. It is actually a “Tragedy of the commons”. Abusing the Euro in this way is exactly what countries like Portugal, Italy, Ireland, Greece, Spain and France have done. This works until a financial crisis shows how insolvent the governments of these countries actually are. That has happened in 2008, the moment when interest rates on European government bonds started diverging. The ECB had even decided to buy up Greek government debts in May 2010 in order to lower the interest rates on Greek government bonds. In June 2010, a temporary European Financial Stability Facility (EFSF) was founded with guarantees of up to €440 billion to combat the European sovereign debt crisis. It has provided financial assistance to Ireland, Portugal and Greece. The EFSF was later replaced by the European Stability Mechanism (ESM) in October 2012 with a total described capital of around €700 billion of which the Netherlands has pledged €40 billion in capital participation. The Dutch prime minister, Mark Rutte, had promised the Dutch in 2011 that the Netherlands would receive back the money it has loaned out to Greece in May 2010.[5] The total sum that was loaned to Greece by the Dutch was €3.2 billion. However, in 2012 when the Netherlands loaned out €14.5 billion of the second financial aid package of €130 billion that was pledged by Europe and the IMF to Greece, the Dutch minister of Finance, Jeroen Dijsselbloem, admitted that the Netherlands were losing money. Rutte also admitted that he could not guarantee that the Dutch loans to the Greeks would not be forgiven.[6] Three years later, on July 13 2015, the Netherlands loaned out another €22.6 billion to Greece.[7] It has become clear that such financial pledges of the Netherlands to fiscally irresponsible governments like that of Greece are not beneficial for the Dutch. Even in the long run it is not beneficial for the EU as it supports and prolongs a socialist European system that is deeply rotten to its core and destined to fail. What the EU needs is a radical return to decentralization and political competition.
The EU has become a sinking ship. It appears to me that the Netherlands should leave the Union as soon as possible. I do not see how Europe can maneuver itself safely through the next financial crisis that is at the point of breaking out as more banks are on the brink of collapse.[8] I also expect greater centralization of political power within the EU and a greater loss of individual member countries’ sovereignty. On June 27, 2016, the Polish media had reported that France and Germany were taking matters into their own hands and are using the Brexit to unveil their plan to morph the continent’s countries into one giant superstate. Under their radical proposals,
“EU countries will lose the right to have their own army, criminal law, taxation system or central bank, with all those powers being transferred to Brussels.”[9]
Conclusion
A sensible Netherlands would leave the European Union and the European Monetary Union in order to preserve political and economic sovereignty. They would have free trade agreements with all countries within and outside of the EU. EenVandaag, a popular Dutch TV programme, had published the results of their 27,000 large online poll on Sunday June 26, 2016 in which 54% of the Dutch would like to hold a referendum about the Netherlands’ participation in the EU. 48% of the poll wanted the Netherlands to leave the EU against 45% who would like to remain in the EU.[10] In the meantime, the Remain camp will continue their nauseating snobbery accusing the Leave camp of being racist, nationalistic, isolationist or simply ignorant.
References Bagus, P. (2010). The Tragedy of the Euro.
Footnotes [1] From Johann Peter Eckermann’s Conversations with Goethe (1836-1848).
[2] Tony Judt writes in Postwar: A History of Europe Since 1945 (2006) that “[U]nhappy and frustrated at being reduced to the least of the great powers, France had embarked upon a novel vocation as the initiator of a new Europe” (p. 153). He also writes that “[F]or Charles de Gaulle, the lesson of the twentieth century was that France could only hope to recover its lost glories by investing in the European project and shaping it into the service of French goals (p. 292).”
[3] See for example Prof. John McMurtry’s “Ukraine, America’s ‘Lebensraum’. Is Washington prepared to wage war on Russia?” for an analysis how Washington had provoked the Ukrainian conflict with Russia.
[4] See “First they came for the vacuum cleaners: will it be kettles next?”
Leaving the European Union would not be a gain for liberty in the United Kingdom. This is true as a matter of general principles and is reinforced by the nature of the Leave campaign which has targeted sections of the population hostile to immigration, open markets, and free trade. Much of the Leave campaigning which has not appealed to such base arguments has at the very least appealed to a version of populist democratic sovereignty at odds with the restraints on government and the state at the heart of classical liberal and libertarian thought.
Even if we try to separate some pure classical liberal version of the Leave campaign from the crudity of the campaign, as some natural supporters of leave wish had happened to the extent they ate voting for Remain rather than go along with such an obnoxious campaign, we are still left with the question of why it liberty advocates should support Leave.
I have sometimes seen references to national sovereignty as a classical liberal doctrine. If this means never sharing sovereignty at a transnational level, then it is simply a false claim. Immanuel Kant advocated a world federation to prevent war. Kant is not often put at the centre of the history of classical liberal thought. His ideas about political institutions, individual rights, and the limits of government certainly belong in the classical liberal sphere. We should distinguish between what Kant said and what later German Idealists said, a rather big issue, and appreciate how close he is to the way of thinking of Montesquieu and Smith and even advances upon them in showing a clearer understanding of the role of representative assemblies in modern politics.
More recently F.A. Hayek advocated federation between liberal democracies. The creation and evolution of the European Union has been and continues to be supported by European political parties of a classical liberal persuasion, those liberal parties which remained most true to the principles of their nineteenth century founders and precursors. Thinkers on the left, like Albert Camus and George Orwell, known for their particular commitment to liberty and their opposition to an authoritarian state were enthusiasts for European integration. Many conservatives of the more free market and limited government sort like Ludwig Erhard (founder of Germany’s post-war, post-Nazi market economy) and John Major (UK Prime Minister from 1990 to 1997, who went further than Margaret Thatcher in privatisation and deregulation) have been and are advocates of the European Union.
The unrestrained sovereignty of the nation-state is not only not an inherently liberal idea, it is dangerous to liberalism. There is nothing illiberal in transnational rules and institutions that restrain states from violence against their own citizens, attacks on individual rights, economic protectionism, and market rigging. The European Union is particularly successful with regard to the economic and market issues at the national level. It adds huge institutional weight to the work of the Council of Europe which promotes human rights through its court in Strasbourg. The existence of the European Court of Justice is of profound importance in ensuring that national governments and peoples are accustomed to regarding the decisions of nation states as subordinate to and accountable to a judicial process enforcing transnational laws.
The EU is open to a great deal of criticism with regard to its tendencies towards over-regulation, but this represents the median attitude of the member governments, not an imposition on the nation-states of Europe. Since the UK economy is at the more free market deregulated end of the European Union, there is some plausibility in saying the UK might go further down that road if it left the EU. However, before it joined the EU it was looking less market oriented than the EU states of the time. The period during which the UK has moved from the more statist to the more limited state end of the European nations has been during the period of EU membership. The precedents do not favour the UK becoming more classically liberal because it leaves the EU and the Leave campaign has appealed to the most insular, nationalist, anti-immigrant, anti-foreigner, and anti-free trade sections of the UK population.
It is possible to imagine the UK as a more libertarian kind of place in the EU, but a much more plausible use of the liberal imagination is to think of ways in which the UK can work with allies in the EU for a a less regulatory and centralised EU. This has already worked as in the adoption of the European Single Market and the diminishing role of the European Commission, the ‘bureaucratic’ part of the EU. The Commission employs as many bureaucrats as the larger local government units in the UK and is tiny compared with any national bureaucracy. Its members are nominated by national governments subject to confirmation of the European Parliament. Power has shifted from the Commission to the bodies in which national government representatives meet, the European Council and the Council of the European Union.
The Leave campaign in the UK, including self-styled free marketers in the Conservative Party, is committed to leave the Single Market as well as the European Union itself, in large part to terminate free movement of EU citizens across its borders. The reasoning offered to prevent this movement of human capital is in terms of anti-foreigner sentiment. This is not something than can be recognised as a pro-liberty program. The pro-liberty choice is to keep free movement of goods, investment, and labour within the EU while working to reform the more interventionist tendencies of the European Union, to stymie the regulatory drift which started hitting industrial market economies decades before the EU was created and which cannot be solved by smashing up the EU.
Five Thirty Eight had a disappointing discussion of an interesting issue: the cost of child care for working parents. The basic issue is that kids are expensive in time and money. Unfortunately, the discussion mostly revolved around questions of how to engage in economic engineering by government in order to expand access to child care and parental leave.
The hosts see these policies as having costs and benefits, and they see the value in studying alternatives empirically, but they miss an important issue: providing these sorts of goods doesn’t require screwing up markets by adding an extra layer of complexity to the tax code. If these goods are worth providing (that’s another couple of cans of worms) then just give money to new parents. Better yet, move to a basic income guarantee.
Another important point they miss is that if some good is difficult to get, it’s worth figuring out what to do about the root problem rather than just throwing money at the issue and hoping someone will figure out the important stuff later.
This is a follow up to part one, where I discuss under what conditions a libertarian can engage in foreign policy beyond pursuing free trade and so whether the creation of a NOL Foreign Policy Quiz is even worthwhile.
In this post I outline how to design a foreign policy quiz.
For starters I imagine two major axis:
Soft vs. Hard Power and,
Nationalist vs. Internationalist
The first axis corresponds to whether an individual prefers using soft non-coercive actions to achieve their foreign policy goal or hard coercive actions. The second axis would correspond to whether someone prefers to act unilaterally, a “Nationalist”, or through multilateral institutions such as the United Nations, an “Internationalist”. Combined the two axis produce the below spectrum.
The questions themselves would be formatted something like the below:
Question: A foreign policy question on defense, trade, or resources/environment.
Answer 1: Nationalist, Hard Power action.
Answer 2: Nationalist, Soft Power action.
Answer 3: Internationalist, Hard Power action.
Answer 4: Internationalist, Soft Power action.
Answer 5: Do nothing.
On each question respondents would be given two points, one for the Soft/Hard axis and another for the Nationalist/Internationalist axis. A respondent’s coordinates would be the average score for the two respective axis.
For simplicity I think we ought to limit the NOL quiz to ten or so questions, but if a longer version were developed we could also assign scores on whether the question was about defense, trade or resources/environmental issues. That way we could further distinguish foreign policy views dependent on the type of issue at stake.
Note the inclusion of a fifth answer for all questions – to do nothing. This is an essential option as there are times, especially for the libertarians among us, where all available options are just awful. In those scenarios it may be better to simply not act at all.
I suspect that most of us who are based in the United States will tend to be most ‘nationalist’ than others all else held constant. Beyond that I am not sure where most libertarians would fall on spectrum. To be sure I think many would elect the fifth answer – “Do nothing” often and gravitate towards the center, but I’m doubtful many would be perfectly in the center.
Thoughts? Opinions?
In part 3 I will hopefully have an actual quiz developed so that we can have fun calling one another statists.
Over at EconLog, Italian political theorist Alberto Mingardi has a great post up on defining national socialism. Here is the money shot:
So, the nationalists are going to be more socialist, because they want to vindicate the power of the nation state in taking control of the national economy, and the socialists are going to be more nationalist, because strengthening regulation and advancing redistribution is all the more difficult in supranational arrangements, where a cooperative understanding is seldom reached.
My own mind was drawn to this insight, though:
I fear there is a symmetric problem for libertarians. If we take Applebaum’s points seriously, as we should, we are put in a very awkward position: which is defending the status quo, made of relatively free international trade plus relatively weak supranational institutions, as the least bad of all possible worlds. And yet libertarians are highly critical of the status quo and won’t feel well in the company of the current global elites.
This is largely correct. Libertarians are right, I think, to be critical of the status quo (even though it is the least bad of all possible worlds, and has been for the last three decades), but they veer off in the wrong direction when they start emphasizing exit and autonomy over entrance and interconnectedness.
This is not just a complaint about rhetoric, either. When libertarians constantly focus on exit and autonomy, a tendency begins to develop where these two concepts become harder and harder to critique and develop into more coherent ideas about liberty and freedom. Just look at all the support for Brexit by libertarians, or the support still given to the Confederate States of America (!). These libertarians have become so obsessed with exit and autonomy that they end up failing to even entertain the notion that you can’t have exit without entrance, or autonomy without interconnectedness.
Widespread strikes in France, many turning violent. There are big-time shortages of gasoline so that many people can’t go to work if they want to. The strikes are not directed against “the corporations.” They are directed squarely at the government. What government? The government of the French Socialist Party. That’s an instance of “democratic socialism” if there was ever one.
What did the Hollande government do to attract such working class anger? It has tried to modify slightly the labor laws, to make it easier for example, for employers to offer more than 35 hours a week to their employees if the latter want them (IF they want them).
France is a country with around 10% unemployment for about twenty years. For the young it’s been around 25% . Also, there has not been real economic growth for about ten years (+1% GDP annual is a cause for celebration). Meanwhile, Germany and Switzerland next door are thriving. A great deal of French public opinion is simply in bad faith and refuses to see the obvious: If it’s too difficult to fire people, employers don’t hire and even suppress growth to avoid hiring.
The Minister of Labor in charge of making the French kiss and even swallow that frog is a woman with an Arab name, a Muslim name. Do I think the French Socialist Party is twisted? I am not sure.
Please, thing of sharing, especially with Sanderites.
That’s the subject of my newest paper, which was just published by India Quarterly. Here is the abstract:
Both the Bangladesh state and society are yet to settle the questions over and narratives related to the Liberation War of 1971. Broadly, there are two groups with contradictory and conflicting interpretations of the events related to that war. This has also led to the mushrooming of militant groups in the country. The beginning of trial of perpetrators of Liberation War crimes since 2010 and the execution of a few of the leaders has further polarised the society and politics of Bangladesh. The existing debates over the Bangladesh Liberation War cannot be studied without looking into the roles of India and Pakistan. The two countries have their own interpretations and political fallout of the 1971 liberation war.
In the previous part of my democracy series, I took note how the notion of democracy as a “deliberative” means of policymaking is a myth. Contrary to John Dewey, Sidney Hook, and Joshua Cohen, who characterize democracy as an application of the scientific method to political problems and as deliberative “intelligence” directing society, democracy is really the rule of the irrational and ignorant, as public choice theory teaches. Deliberative reasoning does not determine policy in democracies, but rather whoever can cater the best to systemically biased and rationally ignorant voters. Voters don’t give deliberative reasons for their policies, and if they do they, contra Cohen, clearly do not have an equal say in the formation of policies as, according to public choice theory, special interests have the most control over it.
However, I neglected one important other reason why actual political democracies are anything but “deliberative:” voters rarely chose their candidates based off of careful deliberation of issues; they instead chose candidates based off of cultural associations with the candidates. Christopher Achen and Larry Bartels recently took note of this in the New York Times:
The notion that elections are decided by voters’ carefully weighing competing candidates’ stands on major issues reflects a strong faith in American political culture that citizens can control their government from the voting booth. We call it the “folk theory” of democracy.
…But wishing so does not make it so. Decades of social-scientific evidence show that voting behavior is primarily a product of inherited partisan loyalties, social identities and symbolic attachments. Over time, engaged citizens may construct policy preferences and ideologies that rationalize their choices, but those issues are seldom fundamental.
That last note is very reminiscent of another point made in my last article on democracy about how evidence from moral psychology, specifically Jonathan Haidt’s The Righteous Mind, shows that voters do not use reason to determine their political or moral views, but rather reason serves as a servant to the passions. In this case, far from deliberatively and intelligently choosing policy preferences, it seems voters are letting their deliberation serve passions that are influenced by social and cultural affiliations rather than actually informed policy stances.
Achen and Bartels show how this is in action specifically in the recent Democratic Primary:
…It is very hard to point to differences between Mrs. Clinton and Mr. Sanders’s proposed policies that could plausibly reflect account for such substantial cleavages [in polls]. They are reflections of social identities, plausible commitments and partisan loyalties.
Yet commentators who have been ready and willing to attribute Donald Trump’s success to anger, authoritarianism, or racism rather than policy issues have taken little note of the extent to which Mr. Sanders’s support [sic]is concentrated not among liberal ideologues but among disaffected white men.
More evidence casts further doubt on the notion that support for Mr. Sanders reflects a shift to the left in the policy preferences of Democrats. In a survey conducted for the American National Election Studies in January, supporters of Mr. Sanders were more pessimistic than Mrs. Clinton’s supporters about “opportunity in America today for the average person to get ahead” and more likely to say that economic inequality had increased.
However, they were less likely than Mrs. Clinton’s supporters to favor concrete policies that Mr. Sanders has offered such as remedies for these ills, including a higher minimum wage, increasing government on health care and an expansion of government services financed by higher taxes. It is quite a stretch to view these people as the vanguard of a new, social-democratic-trending Democratic Party.
Achen and Bartels further note that, despite the enthusiastic support from young Democrats, these younger voters actually disagree more with Sanders on specific policy issues than older democratic voters, noting that “even on specific issues championed by Mr. Sanders” such as “increased government funding of healthcare,” “a higher minimum wage,” and “expanding government services,” younger Democrats tend to disagree with Sanders’ more than older ones. In fact, I would be willing to bet that most of Sanders’ voters that Achen and Bartels write about are completely rationally ignorant of their disagreements with their favorite candidate in the first place. I also would add these cultural influences on voting at the expense of policy deliberation to Caplan’s theory of “irrational rationality;” cultural associations and symbolic commitments decrease the costs of holding an irrational political belief.
It is clear, then, that this “folk theory of democracy” in which voters deliberately consider policy alternatives and make reasoned, rational decisions for why they prefer one candidates’ policies to another is a myth. If it is the case that voters are not only rationally ignorant and irrational, that democracy is more controlled by concentrated interests at the expense of the public good, and that voters make their electoral decisions based off of cultural associations rather than deliberations about policy, what can be said about political democracy’s aim at philosophical democracy? What can be said of the existence, or possibility, of intelligent, deliberately directed democratic institutions? It seems that democratic institutions in reality completely undermine democratic aspirations in theory.
PS: No, this is not the fourth part of the democracy series, should be up this weekend.
[H/T Jason Brennan]
Je suis en contact intermittent avec un copain de lycée (presque 60 ans plus tard!) Dernièrement, il m’ a écrit ceci:
“…c’est vrai que je n’ai pas récemment formulé d’avis sur tes dernières livraisons [sur Facebook et sur mon blog-J.D.] dont beaucoup se rapportent à des sujets typiquement américains sur lesquels je n’ai pas d’opinion très argumentée. Je m’intéresse cependant beaucoup aux élections avec la crainte que Donald (un président avec un nom de canard!) finisse par l’emporter. Simplement çà serait tellement du n’importe quoi à tous les étages que çà serait passionnant à observer. Si cet événement terrible se réalisait il répondrait probablement hélas à une question que je me pose régulièrement:qu’est ce qui initiera le déclin de l’Amérique.”
Je comprends que les Francais, y compris mon copain qui connait bien l’Anglais – soit éberlués. Je vais essayer d’expliquer un peu ce qui se passe y compris mes propres actions à venir. Mais avant tout, je dois répondre à sa question sur le déclin de l’Amérique: Indubitablement, c’est la présidence de Barak Obama, un homme médiocre, vaguement gauchiste, élu seulement parce qu’il est noir (et encore, pas tellement -une remarque que j’expliquerai volontiers si on me le demande).
La popularité de Donald Trump auprès d’une grosse partie de l’électorat, autant que son impopularité pour une encore plus grosse partie, ressortent du même phénomène psycho-social. Curieusement, il y a un recouvrement considérable entre la popularité de Trump et celle du Démocrate de gauche Bernie Sanders, des révolte populistes.
Apres 8 ans de marasme économique – pas très grave selon les critères français mais inhabituels ici – après huit ans de déclin géopolitique américain, assaisonné du spectacle pitoyable de marins à genoux, les mains croisées sur la tête dans le Golfe Persique, apres un “accord” nucléaire catastrophique autant qu’extra-constitutionnel avec la meurtrière République Islamique d’Iran, après de nombreux autres débordements extra-constitutionnels de l’administration Obama (dont “l’accord” en question n’est qu’un exemple), beaucoup de conservateurs habituellement modérés sont furieux. Ils se demandent pourquoi le Congrès a servi a M. Obama sur un plat d’argent tout ce qu’il voulait après deux victoires consécutives du Parti Républicain aux élections partielles. A quoi sert d’avoir une majorité aux deux chambres si le président continue à faire ce qu’il veut sans se soucier des voeux de plus de la moitié des électeurs, ses concitoyens, on se demande?
Le phénomène Trump est donc surtout et avant tout un rejet massif d’une classe politique Républicaine jugée trop passive. Le parallèle avec les progrès du Front National en France est limité mais foncièrement valide. Trump exprime un ras-le-bol politique dont Sanders est le pendant à gauche, (pour des raisons seulement partiellement différentes).
Etant donné le caractère emotionel de ce phénomène, les débordements de Trump, ses déclarations loufoques, même sa fréquente grossièreté, ne le desservent moins qu’il ne renforcent sa popularité auprès de la grosse minoritédes conservateurs qui ressentent le plus ce ras-le-bol. On respecte son espèce de franc-parler, en quelques sorte, même si on trouve qu’il va un peu loin.
Que faire quand on est un conservateur, un “ultra-libéral” rationaliste et peu sujet aux engouements – comme moi, par exemple? L’analyse pertinente n’est pas si compliquée qu’on peut le penser.
Aux élections présidentielles de Novembre, bien que d’autres partis soient representés, seulement deux candidats auront la moindre chance de gagner, Trump et Clinton*. Mon copain de lycée a raison: un Président Trump risque de faire un peu n’importe quoi. En plus, de mon point de vue “d’ulta-libéral” ce n’est même pas un vrai conservateur. Ses positions hostiles vis-à-vis des accords de commerce international, par example, en eux mêmes me sont complètement inacceptables. Bien qu’il s’en défende, c’est un protectioniste de la vieille école. En plus, son ignorance macro-économique est choquante, même pour un ancien prof comme moi, endurci par l’expérience et que les étalages d’ignorance choque rarement.
De l’autre côté, nous avons l’ex-Première Dame, protectrice des ignominies adultères de son mari et de son parejure public, sous-serment, et dont le bref passage au Senat est passé (heureusement) inaperçu, l’ex-Secrétaire d’Etat (Ministre des affaires étrangères) au mandat à la fois incompétent et mensonger. Nous avons aussi en elle une escroque garantie et déjà vendue par avance àplusieurs pays étrangers par le biais de la fondation- machine-à-soux qu’elle a créee avec son mari Bill, un véritable repaire de voleurs.
Dans mon esprit, voter pour Trump c’est voter pour l’inconnu plus un peu de connu que je n’aime pas du tout. Voter pour Clinton, c’est voter pour l’incurie garantie et pour la malhonnêtetée systémique. (Je constate bien sur que m’abstenir est une sorte de vote pour Clinton.) Pas un choix facile. Heureusement, Trump a fait dernièrement ce qu’il fallait pour trancher le noeud gordien.
Les commentateurs avertis nous disent que le prochain président se verra dans l’obligation de nommer, deux, trois et même peut-être quatre juges de la Court suprême fédérale. Or, la Court suprême legifère de plus en plus, un fait contraireà la Constituion et que je regrette vivement, ce qui ne m’empêche pas d’ être conscient de ses profondes implications socio-politiques. (Ces juges sont nommes a vie.)
On sait d’avance qui Clinton nommerait, essaierait de nommer à la Cour Suprême: des gens choisis pour leur apartenance à une catégorie sociale donnée(fille-mère noire et lesbienne d’origine asiatique, par example; je plaisante mais pas beaucoup). Surtout des juristes qui continueraient la dérapade anti-constitutionnelle et le glissement vers une société américaine ressemblant aux sociétes bloqués et inertes de l’Europe. (Oui, comme la France, par example).
Trump lui, a produit il y a quelques jours une liste de onze candidats potentiels àla Court Suprême. Après examen par des périodiques conservateurs sérieux, dont le Wall Street Journal et le Weekly Standard, tous me seraient acceptables. Pour moi, c’est la fin du dilemme. Je voterai pour Trump, que je n’aime toujours pas du tout. Vote du moindre mal s’il en fut!
Un écart possible: Si les sondages indiquent juste avant les élections un ras-de-marée probable en faveur de Clinton, je donnerai mon vote au petit parti Libertarian qui n’a aucune chance de gagner mais dont le programme constitue un recherche intellectuelle et morale sur la réduction de la surface de l’Etat vis-à-vis de la société civile. Ce serait donc un vote de principe sans portée politique directe.
*Bernie Sanders: La seule chance que M. Sanders devienne le candidat Democrate serait que l’enquête actuelle du FBI aboutisse enfin et que M. Obama autorise sa copine la Ministre fédérale de la justice (“Attorney General”) àinculper Mme Clinton pour ses divers délits. Ça m’étonnerait, ça étonnerait tout le monde, surtout Mme Clinton d’ailleurs. Si l’impossible arrivait, j’aurais une longue conversation avec moi-même sur la possibilité de voter pour un crypto-communiste. J’aime bien le Senateur Sanders. Il a mon âge. C’est indéniablement un homme intègre. Et puis, il croit virtuellement tout ce que je croyais à l’âge de 25 ans! Il n’a pas changé d’une virgule. Si par extraordinaire, il devenait président, ce serait chouette, le retour de 1968!
Notes On Liberty 