Does federation unite or divide?

I am reading a lot on federation lately, for an article I would like to contribute to Brandon’s special issue of Cosmos + Taxis. I am going back to the debate about federalizing (parts of the) the democratic world which was very lively in the 1930s and 1940s. Reading the texts, for example the best-selling Union Now! (1939) by American journalist Clarence Streit, you can feel the scare for the authoritarian rulers and their nationalistic and militaristic policies. As an anti-dote, Streit proposed the federation of all the grown democracies in the world at that time, 15 in total, spread over the globe. This Union of the North Atlantic had to include a union citizenship, a union defense force, a union customs-free economy, union money and union postal and communications system After the war broke out, Streit published a new version, now calling for a union between Britain and the USA. Needless to say, none of these or other proposals went anywhere. Still some interesting perpetual questions remain.

Ludwig von Mises and Friedrich Hayek also wrote on federation during this period, as I described in Classical Liberalism and International Relations Theory (2009). I now went back to their writings, which is a treat. It is nice to have a fresh look, I also have deeper insights now (at least – I think!) than I had about 15 years ago when first encountering these ideas.

One of the divides between Mises and Hayek (which they never openly discussed, as far as I am aware) revolved around the alleged pacifying effect of federations. Mises made the point that joining a federation would lead to a larger loss of sovereignty than was normally conceived in the debate. It was not just about pooling some powers at the federal level. In an interventionist world, Mises argued, the number of policies that are dealt with from the center, or the capitol, continually rise. After all, the call for intervention will be made from all corners of the federation, all the time. This leads to a call for equal treatment, which in turn lead to a larger number of policies and regulations administered from the capitol. Consequently, the member states increasingly lose sovereignty and eventually end up as mere provinces. This would be a new cause of division, especially when the member states of the new federation used to be powerful countries on their own. Hence, a federation divides, not unites. Therefore, he proposed a much more radical solution in his plan for Eastern Europe: no federation but a strict central union (administered by foreigners, in a foreign language he even once suggested) where the members would basically have no say at all over all the important legislation normally associated with sovereignty. The laws and regulations would be limited, ensuring maximum economic and political freedom for the individual citizen.

This blog is not meant to discuss the merits of Mises’ ideas. It solely aims to point at a division between Mises and Hayek. Hayek, and most thinkers on federation with him, Streit included, had different expectations about the political effects of federation. They expected that federation would be a force of unity.  In a federation you arrange the most difficult and divisive policies at the center (for example defense, foreign policy and foreign trade), while leaving all other policies to the constituent parts. This allows room for different policies in those states, while taking away their instruments to start violent conflict. Yes, this would mean less sovereignty, but also less trouble, while the freedom within the federation still ensured as much or as little additional policies as the individual states see fit. Hayek would favor his idea the rest of his life, also proposing it for the Middle East, for example.  

Who was right? That is impossible to say, I think. There are elements of both Misesian and Hayekian arguments in the real-life experiences of federations around the globe. For some it is indeed a good way to pool the core of sovereignty, while remaining as diverse as possible. Although most them do not disintegrate with violent conflict, the increase of all kind of policies at the federal center has certainly happened. However, this is not unique to federations and most importantly, it is not a question of formal legal organization. It is a question of mentality of both politicians and populations. This is another reason to keep fighting ‘the war of ideas’, because ideas have the power to change societies.

Nightcap

  1. Aliens Robin Hanson, Overcoming Bias
  2. War, Peace, and the State (pdf) Murray Rothbard, The Standard
  3. The new ruling class (h/t Michalis) Helen Andrews, Hedgehog Review
  4. Free speech and socialist dictatorships Sharansky & Troy, Tablet

A Tribute to Mary Lasker

In the early twentieth century, cancer assumed a more prominent place in the popular imagination as the threat of contagious diseases reduced and Americans lived longer. In this regard, the American Society for the Control of Cancer (ASCC), founded in 1913, had identified three goals: education, service, and research. However, until midcentury, largely due to the limited budget, the society contributed little to cancer research.

Enter Mary Woodard Lasker

One of the most powerful women in mid-twentieth-century New York City, and perhaps North America, Lasker demonstrated that women could command transformations in medical institutions. Born in Wisconsin in 1900, Mary Lasker, at the age of four, found out that the family’s laundress, Mrs. Belter, had cancer treatment. Lasker’s mother explained, “Mrs. Belter has had cancer and her breasts have been removed.” Lasker responded, “What do you mean? Cut off?” Decades later, Mary Lakser would mention this early memory that had inspired her to engage in cancer work.

After having established herself as an influential New York philanthropist, businesswoman, and political lobbyist, when Mary Lasker inquired about the role of the ASCC in 1943, she learned that the organization had no money to support research. Somewhat astounded by this discovery, she immediately contemplated ways to reorganize the society. She wanted to recreate the society into a powerful organization that prioritized cancer research.

Well-versed in public relations, connected to the financial and political circles of the country, Lasker played a central role in the mid-1940s. Despite notable opposition, Lasker convinced the ASCC to change the composition of the board of directors to include more lay members and more experts in financial management. She urged the council to adopt a new name, the American Cancer Society. She also convinced them to earmark one-quarter of its budget for research. This financial reorganization allowed the ACS to sponsor early cancer screening, including the early clinical trials. The newly formed American Cancer Society articulated a mission that explicitly identified research funding as its primary goal.

By late 1944, the American Cancer Society had become the principal nongovernmental funding agency for cancer research in the country. In its first year, it directed $1 million of its $4 million in revenue to study. Her ardent advocacy for greater funding of all the medical sciences contributed to increased funding for the National Institutes of Health and the creation of several NIH institutes, including the Heart, Lung, and Blood Institute.

Mary Lasker continued to agitate for research funds but resisted any formal association. As she explained it, “I’m always best on the outside.” Undoubtedly, Mary Lasker’s influence and emphasis on funding cancer research contributed to promoting the Pap smear in U.S. culture. As a permanent monument to her efforts, in 1984, Congress named the Mary Woodard Lasker Center for Health Research and Education at the National Institutes of Health.

A portion of a letter ACS administrative director Edwin MacEwan wrote to Lasker encapsulates her contribution to our society. He wrote, “I learned that you were the person to whom present and potential cancer patients owe everything and that you alone really initiated the rebirth of the American Cancer Society late in 1944.”

“If you think research is expensive, try disease.”
Mary Woodard Lasker (November 30, 1900 – February 21, 1994) 

Source:

  1. The Lasker Foundation (http://www.laskerfoundation.org/about/)
  2. Mary Lasker Papers, Columbia University Rare Book and Manuscript Library, New York, N.Y.
  3. Early Detection: Women, Cancer, & Awareness Campaigns in the Twentieth-century United States by Kirsten Elizabeth Gardner

John Rawls at 100

Neoliberal Social Justice available April 2021

John Rawls, the most influential political philosopher of the 20th century, was born 100 years ago today. He died one year before I first read A Theory of Justice as part of my undergraduate degree in philosophy at University College London. This year, Edward Elgar publishes Neoliberal Social Justice: Rawls Unveiled, my book which updates Rawls’ approach to assessing social institutions in light of contemporary economic thought.

Mike Otsuka (now at the LSE) introduced us first to the work of Robert Nozick and then to Rawls, the reverse of what I imagine is normally the case in an introductory political philosophy course. Most people ultimately found Rawls’ the more attractive approach whereas I was drawn to Nozick’s insistence on starting strictly from the ethical claims of individuals. I wondered why something calling itself ‘the state’ should have rights to coerce beyond any other actor in civil society.

Years of working in public policy and studying political economy made me recognise a distinctive value for impersonal institutions with abstract rules. Indeed, I now think the concept of equal individual liberty is premised on the existence of such institutions. Although the rule of law could theoretically emerge absent a state, states are the only institutions that have been able to generate it so far. Political philosophy cannot be broken down into applied ethics in the way Nozick proposed.

Some classical liberals and market anarchists are increasingly impatient with the Rawlsian paradigm. Michael Huemer, for example, argues that Rawls misunderstands basic issues with probability when proposing that social institutions focus on maximising the condition of the least advantaged. Huemer argues that Rawls ultimately offers no reason to pick justice as fairness over utilitarianism, the very theory it was directed against.

I think these criticisms are valid for rejecting the blunt assessments of real-world inequalities that some Rawlsians are apt to make. But I do not think Rawls himself, nor his theory when read in context, made these elementary errors. Rawls’ principles of justice apply to the basic structure of social institutions rather than the resulting pattern of social resources as such. Moreover, the primary goods that Rawls take to be relevant for assessing social institutions are essentially public goods. It makes sense to guarantee, for example, basic civil liberties to all on an equal basis even if turns out to be costly. I can think of two reasons for this:

  1. In a society not facing acute scarcity, you would not want to risk placing yourself in a social position where your civil liberties could be denied even if it was relatively unlikely.
  2. Living in a society where basic liberties are denied to others is going to cause problems for everyone, whether through regime instability or fraught social and economics relationships that are not based on genuine mutual advantage but coercion from discretionary powers.

To be fair to utilitarians, J.S. Mill went in this direction, although one had to squint to see how it fit into a utilitarian calculus. But if Rawls was ultimately defending a more principled approach to social relationships using the tools of expediency, I see that as a valuable project.

So, I think that the Rawlsian approach is still a fruitful way to evaluate the distinctive problem of political order. His theory offers the resources to resist not just utopian libertarian rights theorists, but also socialists and egalitarians who similarly fail to account for the distinctive role of political institutions for resolving problems of collective action. Where I think Rawls erred when endorsing what amounts to a socialist institutional framework is on his interpretation of social theory. Rawls argued that people behave pretty selfishly in market interactions but could readily pursue the public good when engaged in everyday politics. I argue otherwise. Here is a snippet from Neoliberal Social Justice (pp. 96-97) where I make the case for including a more consistently realistic account of human motivation within his framework:

Problems of justice are not purely about assurance amongst reasonable people or identifying anti-social persons. Instead, we must consider the anti-social person within ourselves: the appetitive, biased, narrow-minded, prejudicial self that drives a great deal of our every-day thoughts and interactions (Cowen, 2018). If we are to make our realistic selves work with each other to produce a just outcome, then we should affirm institutions that allow these beings, not just the wholesome beings of our comfortable self-perception, to cooperate. We have to be alive to the fact that we are dealing with agents who are apt to affirm a scheme as fair and just at one point (and even sincerely mean it), then forgetfully, carelessly, negligently or deliberately break the terms of that scheme at another point if they have an opportunity and reason enough to do so. Addressing ourselves as citizens in this morally imperfect state, as opposed to benighted people outside a charmed circle of reasonableness, is helpful. It means we can now include such considerations within public reason. The constraints of rules emerging from a constitutional stage may chafe at other stages of civil interaction. Nevertheless, they may be fully publicly justified.

Nightcap

  1. Extending human habitability to outer space Claire Webb, Noema
  2. A widow on imagination Victoria Ritvo, Bat City Review
  3. Assigning blame for the blackouts in Texas (h/t Mark from Placerville) Judith Curry, Climate Etc.
  4. The failure of Welsh devolution Rhianwen Daniel, spiked!

Nightcap

  1. That brutal uncivilizer of nations (pdf) Jens Bartelson, CAL
  2. […] the Taliban, who have long made international recognition and legitimacy a priority.
  3. The end of the interstate system (pdf) Giovanni Arrighi, JW-SR
  4. Habsburgs, Ottomans, and British anti-slavers (pdf) Allison Frank, AHR

Nightcap

  1. Driving alone, listening to talk radio Addison del Mastro, New Urbs
  2. My history of manual labor Tyler Cowen, MR
  3. My first year in the Covid lockdown Maria Farrell, Crooked Timber
  4. Biden finally called up Netanyahu Michael Koplow, Ottomans & Zionists
  5. The Strastnoy of Ayn Rand Roderick T. Long, Policy of Truth
  6. Brand India Ravinder Kaur, Aeon

Power outages in Texas

From an email I sent my principles of economics students:

Since we can’t have classes this week and the midterm is postponed a week, I felt chatty and wanted to share at least a few thoughts about why so many people are without power.

tl;dr: see the graph below. Prices are fixed. Supply shifts left, demand shifts right = instant shortages. This is not an easy problem to solve.

Issue #1 is that bad weather events increase demand – demand shifts to the right. Issue #2 is that energy prices are really sticky. We’ll be getting to this in March, but in energy markets we sign contracts with our energy providers that lock in the price of electricity for 1-2 years at a time. When demand increases, the price doesn’t! Further, some contracts allow us to smooth the bill out over 12 months, so if I need extra $12 of electricity today, I don’t actually pay for it today: I’ll pay for it by having a $1 higher electricity bill over a 12 month period. That does two things. a) It means that energy demand curves are really vertical, a small change in price doesn’t change my electricity consumption much; and b) when demand increases, prices don’t. That ruins the market price signal that tells you and me to conserve electricity. Issue #3 of course is that it is really amazingly expensive to increase electric capacity. That means that energy supply curves are also really vertical. Even if energy firms COULD raise prices, they can’t increase the quantity supplied in the short run. In the longer run, we have time to build more plants and add capacity, but in the short run we’re stuck with what we have. 

The graph above shows the marginal cost of different types of energy. Some are energy that is easy to turn on and off, but expensive (eg. oil). Some are energy that is really, really hard to turn on and off at will (eg. nuclear) but very cheap. And producing more energy than you need is bad. So you build enough cheap stuff that you know for 100% positive will always be needed, and then you build expensive stuff to handle changes in demand. That’s the short version, anyway. It means that producing a little extra electricity is really expensive and there is a hard limit to much extra we can produce – eventually supply curves are completely vertical!

My friends on the right tend to send blame towards green energy. And they have a point! Renewables are temperamental – with too many clouds solar doesn’t do anything, and frozen blades can’t turn wind energy turbines. The impact of the storm is to shift energy supply curves to the left, and the more the grid relies on renewables, the bigger that shift is. The basic problem renewables have had is that it’s really difficult to STORE their energy for future use. If we could create really large energy reservoirs, we could store Texas’ abundant solar and wind energy for a literally-rainy day. 

So we have supply curves shifting left at the same time demand curves are shifting right and prices can’t move … the final result is massive shortages! Now what could be done about that?

My friends on the left tend to blame deregulation. Sadly, not one of them is spelling out exactly what regulation they think would solve this problem. Let me be generous to them and imagine they mean the following: if the government ran (rather than regulated) the energy grid, they would build a greater capacity than we typically use. 

And they have a point. Energy is like the opposite of the hotel industry. In the hotel industry, you don’t build the hotel based on AVERAGE, normal operations. In Stephenville, you build a hotel large enough to accommodate people who come for graduation. The cost of having unused rooms is fairly low – you still need to keep the room cool in case someone needs it, and you want to hire someone to dust it, but it just sits there most of the time. Then you rake in big money when demand suddenly increases. The energy industry is the opposite: it is very expensive to build capacity and it is also expensive to maintain it. Whether you are a private firm or a government, the money to maintain unused generators has to come from somewhere.

How do we afford that? In the market, energy prices are actually set a little bit higher than equilibrium so that supply > demand. That ensures we have plenty of electricity to handle normal, typical demand fluctuations. We pay for that excess capacity during the normal part of the year so that when temperatures are particularly high or extra low, the grid can handle it.

The government has a different problem, though. If electricity is publicly-run, they will tend to set the price lower than the market would and make up the differences with taxes. That further divorces energy use from the price paid. We would have a higher quantity demanded at all times (wasteful). Add in that governments generally do a bad job running businesses (wasteful) and in order to have that excess capacity we would have to be willing to pay higher taxes (and lower energy bills) for many years to make up for the extra expense. Most governments, like most markets, will therefore tend to undersupply for an emergency because the voters don’t want to pay higher taxes and there is no such thing as a free lunch. So it’s not 100% clear that this would solve the problem. Europe has power outages that affect millions too. 

Why? Healy and Malhotra: Governments respond to incentives, and voters give the wrong incentives: “Do voters effectively hold elected officials accountable for policy decisions? Using data on natural disasters, government spending, and election returns, we show that voters reward the incumbent presidential party for delivering disaster relief spending, but not for investing in disaster preparedness spending. These inconsistencies distort the incentives of public officials, leading the government to underinvest in disaster preparedness, thereby causing substantial public welfare losses. We estimate that $1 spent on preparedness is worth about $15 in terms of the future damage it mitigates. By estimating both the determinants of policy decisions and the consequences of those policies, we provide more complete evidence about citizen competence and government accountability.”

Bottom line: there isn’t an easy solution to weather events that happen once in a hundred years, whether it’s floods or hurricanes or … whatever this white, powdery substance is that’s blanketing my lawn. The basic problem is scarcity in a market where price signals don’t work (by design) at a time when supply shifts left and demand shifts right. To the extent climate change means more frequent extreme events, this will be a growing problem.

Nightcap

  1. Depicting extraterritoriality Mathew Hart (interview), JHIBlog
  2. America’s plot for world domination Robert Merry, TAC
  3. Beyond the !Kung (but no Wilmsen?) Manvir Singh, Aeon
  4. In high praise of Parler Eugene Volokh, Volokh Conspiracy

Exit, federation, and scale (from the comments)

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:

  1. I don’t think federating the entire world is a good idea. I think the piecemeal federation of political units is what libertarians ought to aim for. (I think the US interstate order is the best avenue for achieving this aim.) A healthy “world federation” would govern (say) 85% of the world’s population. This brings me to my second point I need to clarify.
  2. 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.

Nightcap

  1. We need to talk about the British Empire Sunder Katwala, CapX
  2. Nazi political economy Pseudoerasmus
  3. Liberty isn’t free Irfan Khawaja, Policy of Truth
  4. Institutional oceanography Chris Shaw, Libertarian Ideal

Affirmative Guilt-Gradient and the Overton Window in Identity-Based Pedagogy

Yesterday, I came across this scoop on Twitter; New York Post and several other blogs have since reported it.

Regardless of this scoop’s veracity, the chart of Eight White identities has been around for some time now, and it has influenced young minds. So, here is my brief reflection on such identity-based pedagogy:

As a non-white resident-alien, I understand the history behind the United States’ racial sensitivity in all domains today. I also realize how zealous exponents of diversity have consecrated schools and university campuses in the US to rid the society of prevalent racial power-structures. Further, I appreciate the importance of people being self-critical; self-criticism leads to counter-cultures that balance mainstream views and enable reform and creativity in society. But I also find it essential that critics of mainstream culture don’t feel morally superior to enforce just about any theoretical concept on impressionable minds. Without getting too much into the right vs. left debate, there is something terribly sad about being indoctrinated at a young age —regardless of the goal of social engineering— to accept an automatic moral one-‘downmanship’ for the sake of the density gradient of cutaneous melanin pigment. Even though I’m a brown man from a colonized society, this kind of extreme ‘white guilt’ pedagogy leaves me with a bitter taste. And in this bitter taste, I have come to describe such indoctrination as “Affirmative Guilt-Gradient.”

You should know there is something called the Overton Window, according to which concepts grow larger when their actual instances and contexts grow smaller. In other words, well-meaning social interventionistas easily view each new instance in the decreasingly problematic context of the problem they focus on with the same lens as they consider the more significant problem. This leads to unrealistic enlargement of academic concepts that are then shoved down the throats of innocent, impressionable school kids who will take them as objective realities instead of subjective conceptual definitions overlaid on one legitimate objective problem.

I find the scheme of Eight White identities a symptom of the shifting Overton Window.

According to Thomas Sowell, there is a whole class of academics and intellectuals of social engineering who believe that when the world doesn’t reconcile to their pet theories, that shows something is wrong with the world, not their theories. If we are to project Thomas Sowell’s observation on this episode of “Guilt-Gradient,” it is perfectly reasonable to expect many white kids and their parents to refuse to adopt these theoretically manufactured guilt-gradient identities. We can then —applying Sowell’s observation—predict academics to declare that opposition to the “Guilt Gradient” is evidence for many covert white supremacists in the society who will not change. Such stories may then get blown up in influential Op-Eds, leading to the magnification of a simple problem, soon to be misplaced in the clutter of naïve supporters of such theories, the progressive vote-bank, and hard-right polemics.

We should all acknowledge that attachment to any identity—be it majority or minority—is by definition NOT a hatred for an outgroup. Assistant Professor of Political Science at Duke University, Ashley Jardina, in her noted research on the demise of white dominance and threats to white identity, concludes, “White identity is not, a proxy for outgroup animus. Most white identifiers do not condone white supremacism or see a connection between their racial identity and these hate-groups. Furthermore, whites who identify with their racial group become much more liberal in their policy positions than when white identity is associated with white supremacism.” Everybody has a right to associate with their identity, and equating one’s association with an ethnic majority identity is not automatically toxic. I feel it is destructive to view such identity associations as inherently toxic because it is precisely this sort of warped social engineering that results in unnecessary political polarization; the vicious cycle of identity-based tinkering is a self-fulfilling prophecy. Hence, recognizing the Overton Window at play in such identity-based pedagogy is a must if we have to make progress. We shouldn’t be tricked into assuming that the non acceptance of the Affirmative Guilt Gradient is a sign of our society’s lack of progress.

Finally, I find it odd that ideologues who profess “universalism” and international identities choose schools and universities to keep structurally confined, relative identities going by adding excessive nomenclature so they can apply interventions that are inherently reactionary. However, isn’t ‘reactionary’ a pejorative these ideologues use on others?

Afternoon Tea: Allegory of the Peace of Westphalia (1654)

This is by Jacob Jordaens, a Flemish painter, and it is not even one of his most famous paintings. Here’s Jordaens’ wiki page. The Peace of Westphalia ended the 30 Years War. The Habsburgs weren’t necessarily the bad guys. The Peace of Westphalia didn’t establish state sovereignty in a system of equal (in theory) nation-states within an interstate order. The Peace of Westphalia solved a religious constitutional question within the Holy Roman Empire and ended the war between the Dutch and the Spanish. The Westphalian state system that we speak of and live in today is not appropriately named. Here’s the best article (pdf) I’ve read on the Peace.

If we were to appropriately name the interstate order that we have today, it would be named the Napoleonic interstate system. Alas. It’s called the Westphalian system. The US, and a couple of other big states like China and Russia, have trouble fitting in to the “Westphalian” state system because they established their own regional state systems long before being wrangled into European imperial entanglements. It goes without saying that polities in Africa, Asia, and the Americas also had trouble fitting into the “Westphalian” state system.

What if one of the regional orders established by the US, Russia, or China were embraced as the new global order, instead of the “Westphalian” (really Napoleonic) system based on nation-state sovereignty? I don’t think this would be a bad thing, and in their own way, the US, China, and Russia have been trying to do this since the end of World War II.

Nightcap

  1. Who wants common sense? Robin Hanson, Overcoming Bias
  2. Theory versus common sense: the Dutch Notes On Liberty
  3. Scotland’s new blasphemy law Madeleine Kearns, L&L
  4. Academic corruption: government money Arnold Kling, askblog

Nightcap

  1. Fascinating piece on Ming China’s censorial system Branko Milanovic, globalinequality
  2. On the farmer’s protests Jeet Singh, Time
  3. Understanding the rise of socialism Brad Delong, Grasping Reality
  4. Understanding middlebrow Scott Sumner, Money Illusion