If the Only Way You Can Get Your Great Idea Implemented…

Economics textbooks are full of clever-and-appealing policy proposals.  Proposals like: “Let’s redistribute money to the desperately poor” and “Let’s tax goods with negative externalities.”  They’re so clever and so appealing that it’s hard to understand how any smart, well-meaning person could demur.  When critics appeal to “public choice problems,” it’s tempting to tell the critics that they’re the problem.  The political system isn’t that dysfunctional, is it?  In any case, reflexively whining, “The political system will muck up your clever, appealing policy proposal,” hardly makes that system work better.  The naysayers should become part of the solution: Endorse the clever-and-appealing policy proposals – and strive to bring them to life.

When you look at the real world, though, you see something strange: Almost no one actually pushes for the textbooks’ clever-and-appealing policy proposals.  Instead, the people inspired by the textbooks routinely attach themselves to trendy-but-awful policy proposals.  If you point out the discrepancy, they’re often too annoyed to respond.  When they do, reformers shrug and say: “The clever-and-appealing policy never has – and probably never will – have much political support.  So we have to do this instead.”

Examples?  You start off by advocating high-impact redistribution to help poor children and the severely disabled… and end defending the ludicrously expensive and wasteful Social Security program.  “Unfortunately, the only politically viable way to help the poor is to help everyone.”  Or you start off advocating Pigovian taxes to clean the air, and end up defending phone books of picayune environmental regulations.  “Unfortunately, this is the way pollution policy actual works.”

Don’t believe me?  Here’s a brand-new example courtesy of Paul Krugman:

But if a nation in flames isn’t enough to produce a consensus for action — if it isn’t even enough to produce some moderation in the anti-environmentalist position — what will? The Australia experience suggests that climate denial will persist come hell or high water — that is, through devastating heat waves and catastrophic storm surges alike…

[…]

But if climate denial and opposition to action are immovable even in the face of obvious catastrophe, what hope is there for avoiding the apocalypse? Let’s be honest with ourselves: Things are looking pretty grim. However, giving up is not an option. What’s the path forward?

The answer, pretty clearly, is that scientific persuasion is running into sharply diminishing returns. Very few of the people still denying the reality of climate change or at least opposing doing anything about it will be moved by further accumulation of evidence, or even by a proliferation of new disasters. Any action that does take place will have to do so in the face of intractable right-wing opposition.

This means, in turn, that climate action will have to offer immediate benefits to large numbers of voters, because policies that seem to require widespread sacrifice — such as policies that rely mainly on carbon taxes — would be viable only with the kind of political consensus we clearly aren’t going to get.

What might an effective political strategy look like? … [O]ne way to get past the political impasse on climate might be via “an emphasis on huge infrastructural projects that created jobs” — in other words, a Green New Deal. Such a strategy could give birth to a “large climate-industrial complex,” which would actually be a good thing in terms of political sustainability.

Notice the pattern.

Step 1: Economics textbooks offer a clever-and-appealing policy proposal: Let’s tax carbon emissions to curtail the serious negative externalities of fossil fuels.  It’s cheap, it’s effective, it provides great static and dynamic incentives.  Public choice problems?  Don’t listen to those naysayers.

Step 2: Argh, Pigovian taxes are going nowhere.

Step 3: Let’s have a trendy-but-awful populist infrastructure program to get the masses on board.

So what?  For starters, any smart activist who reaches Step 3 tacitly concedes that public choice problems are dire.  You offer the public a clever-and-appealing remedy for a serious social ill, and democracy yawns.  To get action, you have to forget about cost or cost-effectiveness – and just try to drug the public with demagoguery.

Note: I’m not attacking Krugman for having little faith in democracy.  His underlying lack of faith in democracy is fully justified.  I only wish that Krugman would loudly embrace the public choice framework that intellectually justifies his lack of faith.  (Or better yet, Krugman could loudly embraced my psychologically-enriched public choice expansion pack).

Once you pay proper respect to public choice theory, however, you cannot simply continue on your merry way.  You have to ponder its central normative lesson: Don’t advocate government action merely because a clever-and-appealing policy proposal passes a cost-benefit test.  Instead, look at the trendy-but-awful policies that will actually be adopted – and see if they pass a cost-benefit test.  If they don’t, you should advocate laissez-faire despite all those shiny ideas in the textbook.

Krugman could naturally reply, “I’ve done the math.  Global warming is so terrible that trendy-but-awful policies are our least-bad bet.”  To the best of my knowledge, though, this contradicts mainstream estimates of the costs of warming.  That aside, why back a Green New Deal instead of deregulation of nuclear power or geoengineering?  If recalcitrant public opinion thwarts your clever-and-appealing remedy, maybe you started out on the wrong path in the first place.

Unfair?  Well, this is hardly the first time that Krugman has rationalized destructive populism when he really should have reconsidered.  Krugman knows that immigration is the world’s fastest way to escape absolute poverty.  He knows that standard complaints about immigration are, at best, exaggerated.  But he’s still an immigration skeptic, because:

The New Deal made America a vastly better place, yet it probably wouldn’t have been possible without the immigration restrictions that went into effect after World War I. For one thing, absent those restrictions, there would have been many claims, justified or not, about people flocking to America to take advantage of welfare programs.

Notice the pattern.

Step 1: You start with the textbook case for a welfare state to alleviate domestic poverty.  Public choice problems?  Bah.

Step 2: Next, you decide that you can’t get that welfare state without horrible collateral damage.

Step 3: So you casually embrace the status quo, without seriously engaging obvious questions, like: “Given political constraints, perhaps its actually better not to have the New Deal?” or even “How close can we get to the New Deal without limiting immigration?”

The moral: If the only way you can get your great idea implemented is to mutilate it and/or package it with a pile of expensive junk, you really should wonder, “Is it still worth it?”

Well, is it?

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The Dream of Open Borders

Like Martin Luther King, I have a dream: that my four children will one day live in a world where human beings will not be judged by the nation of their birth, but by the content of their character.

My dream, in short, is that my sons and daughter will live to see a world of open borders.  If the arc of the moral universe bends toward justice, our descendants will view the immigration restrictions we continue to casually accept with the same horror that we now reserve for Jim Crow.

I wrote Open Borders hoping to make that arc bend a little sooner – to show everyone ages seven and up that radical liberalization of immigration is not just our moral duty, but an amazing policy opportunity for all humanity.

Happy MLK Day!

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The Speech of Heroes

Almost everyone loves the idea of “speaking truth to power.”  Standing tall, talking boldly, consequences be damned – how heroic!

Yet on reflection, this Speech of Heroes takes two radically different forms.

The most common Speech of Heroes, by far, upholds Social Desirability Bias.  Example: “Everyone should be completely equal” sounds wonderful, but no actual society follows through.  Many self-styled heroic orators respond along these lines:

Equality!  We all say we believe in it.  We know it’s the right path.  Yet we are a den of hypocrites!  We pay lip service to the ideal of equality, but when inequality glares at us from every corner, we avert out eyes.  Shame on us!  Shame!  I say unto you, we must practice what we preach.  Let us live the equality we love.  Put apathy aside, my brothers and sisters.  Let us tear down all the inequalities we see.  Then let us ferret out every lingering pocket of inequality.  We must tear power from the grasp of all the corrupt leaders who casually say they oppose inequality but never do anything about it.  Together we can, should, will, and must build a totally equal society!

This kind of heroic rhetoric is standard in religious societies.  The sacred texts provide a strict blueprint for life, yet the government makes only a token effort to strictly implement the blueprint.  In response, the heroic orator sticks out his neck, decries the hypocrisy of the Powers That Be, and demands strict adherence to the holy book.  Which is music to the ears of every pious members of this society.  See the Protestant Reformation or radical Islamism for nice examples.

Notice, however, that this heroic rhetoric also dominates socialist and nationalist oratory.  Step 1: Loudly and clearly affirm a crowd-pleasing ideal.  Step 2: Decry the obvious hypocrisy of the status quo.  Step 3: Promise to strictly implement the crowd-pleasing ideal.  You’ve got socialist slogans like, “Social ownership of the means of production,” “Complete equality,” or “From each according to his abilities, to each according to his needs.”  You’ve got nationalist slogans like, “Death before dishonor,” “Germany for the Germans,” or “The safety and prosperity of all our people.”  In each case, the speaker presents himself as a hero by puritanically appealing to popular sentiment.

Once in a long while, however, we encounter a radically different form of heroic oratory.  Instead of upholding Social Desirability Bias, the hero frontally attacks it.  As in:

Equality!  You all pay lip service to it, but who really believes it?  Why should people who produce and contribute the most receive the same treatment as people who do little or nothing?  You love to denounce the hypocrites who say they believe in equality but fail to deliver it.  But I say to you: Those hypocrites keep you alive!  In a totally equal society, there’s no incentive to do anything but kvetch.  If you’re tired of hypocrisy, remember that there are two ways to end it.  You could strictly implement this monstrous ideal of equality.  Or you could proclaim the truth: Equality is a monstrous ideal!  Let’s raise the banner of meritocracy, and thank our greatest producers instead of scapegoating them.

In a religious society, the analogue would naturally be rationalistic atheism: “Forget these pathetic ‘holy’ books, fantasies written long ago by ignorant fanatics.”  In a nationalist society, the analogue would be along the lines of, “Patriotism is the last refuge of a scoundrel,” or even, “Our country is not the best in the world.  It’s not even average.  It’s below average – and things won’t improve until we admit our failures and humbly emulate the winners.”

Which form of oratory is more heroic?  Once you take Social Desirability Bias seriously, the answer is clear.  You can’t “speak truth to power” unless you speak the truth.  Implausible scenarios where Social Desirability Bias and the truth coincidentally converge, appealing to Social Desirability Bias is deeply unheroic.  Even villainous.

And truth aside, challenging your society’s fundamental values takes a lot more courage than merely decrying the violation of those values.

Yes, when you damn ruling elites for hypocrisy, those elites often retaliate.  Rhetorically, however, you’re still taking the path of low resistance.  You start with simple-minded feel-good slogans with broad appeal.  Then you point out corruption flagrant enough for anyone to see.

When you denounce your society’s fundamental values, however, you outrage elites and masses alike.  When you merely attack hypocrisy, elites have to worry about making a martyr out of you.  When you spurn Social Desirability Bias, in contrast, elites win popular support by teaching you the price of arrogance.  Who but a hero would openly challenge such a powerful pair of enemies?

Do I hold myself out as a man who embodies the Speech of Heroes?  Barely.  While I routinely challenge Social Desirability Bias, my society remains highly tolerant.  No one’s going to jail me for my words.  Indeed, since I have tenure, no one will even fire me for my words.  If I lived in a normal repressive society, I would publicly say far less than I do.  A gold-star hero would publicly express thoughts like mine… while living in Communist China or Saudi Arabia.

While I wouldn’t advise you to try this, anyone who does so is my hero.

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The Social Conservatism of Hollywood

[warning: spoilers]

The new Uncut Gems is further evidence for a thesis I’ve long maintained: Contrary to popular opinion, Hollywood makes a lot of socially conservative movies.  When you strip away the glamorous actors and cool music, the message is clear: Live a responsible bourgeois life or you will soon be severely punished.

This is most obvious for hard-boiled crime films.  The lead characters in such stories engage in an array of impulsive, brutal, and parasitical behaviors.  Before the movie ends, almost all of the characters have been shot, stabbed, beaten, imprisoned, or ostracized.   Many are dead, often in grotesquely inventive ways.  Howard Ratner, the lead character in Uncut Gems, repeatedly commits fraud and adultery.  He spins a web of lies and makes high-stakes gambles.  In each scene, he acts on his worst impulses.  For every success his duplicity brings, two failures spring.  When he thinks he’s won, another criminal murders him.  Even if Ratner had survived, though, his dishonesty and lechery would have cost him his family.

The same goes for The Godfather saga, Goodfellas (or any Scorsese crime movie), Pulp Fiction (or any Tarantino crime movie), Fargo (or any Coen brothers crime movie), Snatch (or any Cockney crime movie), as well as Scarface, New Jack City, and Boyz n the Hood.  In crime movies, people who engage in criminal behavior suffer, usually at the hands of their fellow criminals.  If they don’t get you, the cops will.

While crime movies focus on men, their female characters also catch hell.  Women who sleep with criminals – usually against their family’s advice – end up pregnant and abandoned, if not beaten or murdered.  Don Corleone treats his wife with old-world gentility, but she still lives to see her eldest son full of lead.  (Michael, her youngest son, has the filial piety to delay the murder of his elder brother until after her death).

The message of all this cinema: Follow the path of bourgeois virtue.  Work hard, keep the peace, abstain from alcohol, have very few sexual partners, and keep your whole family far away from anyone who lives otherwise.  Think about how many fictional characters would have lived longer if they never set foot in a bar.

Is this the message the writers intend to send?  Unlikely.  Instead, they try to create engrossing stories – and end up weaving morality tales.

True, Hollywood could make movies where criminals are “victims of their toxic social environment.”  It could make movies where the people who face retribution are the self-righteous bourgeoisie who “created toxic social environment in the first place.”  (This is arguably the plot of Natural Born Killers, though that’s giving it too much credit).  Such stories, however, would be sorely lacking in emotional truth.  You can’t credibly depict the life of a criminal without showing his choices; and when you see his choices, you see all the ways he could have done otherwise, “toxic social environment” notwithstanding.

Similarly, you could make crime movies that end before the criminals get their comeuppance.  Yet such stories would be dramatically inert.  If a bank robber gets killed on his eighth heist, audiences want to see heists number 1, 2, and 8.  If the bad guy gets it in the end, who cares about his intermediate successes?  Let’s fast forward to the Day of Reckoning.

Does this mean that Hollywood movies actually crime?  I doubt it.  The viewers most in need of lessons in bourgeois virtue are probably too impulsive to reflect on the moral of the story.  They’re captivated instead by the gunplay and machismo.  Yet if you’re paying attention, the moral of these stories remains: Unless your parents are criminals, listen to your parents.

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Socialism: The Failed Idea That Never Dies

I’ve easily read a hundred books on the evils of socialism.  I was quite surprised, then, by how much I learned from Kristian Niemietz’s Socialism: The Failed Idea That Never Dies, available for free download.  Yes, I already knew that socialist regimes go through a popularity sequence, starting at “This socialist regime is a model for the world” and ending with “That’s not real socialism.”  Niemietz, however, describes this sequence with great precision and eloquence:

1. The honeymoon period

The first stage is a honeymoon period, during which the experiment has, or at least seems to have, some initial success in some areas. During this period, its international standing is relatively high. Even anti-socialists concede, grudgingly, that the country in question has something to show for it.

During the honeymoon period, very few dispute the experiment’s socialist character; almost nobody claims that the country is not ‘really’ socialist. On the contrary: during the honeymoon period, large numbers of Western intellectuals enthusiastically embrace the experiment. Self-declared socialists claim ownership of it, and parade it as an example of their ideas in action.

2. The excuses-and-whataboutery period

But the honeymoon period never lasts forever. The country’s luck either comes to an end, or its already existing failures become more widely known in the West. As a result, its international standing deteriorates. It ceases to be an example that socialists hold against their opponents, and becomes an example that their opponents hold against them.

During this period, Western intellectuals still support the experiment, but their tone becomes angry and defensive. The focus changes from the experiment’s supposed achievements to the supposed ulterior motives of its critics. There is a frantic search for excuses, with the blame usually placed on imaginary ‘saboteurs’ and unspecified attempts to ‘undermine’ it. There is plenty of whataboutery.

3. The not-real-socialism stage

Eventually, there always comes a point when the experiment has been widely discredited, and is seen as a failure by most of the general public. The experiment becomes a liability for the socialist cause, and an embarrassment for Western socialists.

This is the stage when intellectuals begin to dispute the experiment’s socialist credentials, and, crucially, they do so with retroactive effect. They argue that the country was never socialist in the first place, and that its leaders never even tried to implement socialism. This is the deeper meaning behind the old adage that ‘real’ socialism has never been tried: socialism gets retroactively redefined as ‘unreal’ whenever it fails. So it has never been tried, in the same way in which, in Orwell’s Nineteen Eighty-four, the government of Oceania has always been at war with East Asia.

This is not a conscious process, let alone a purposefully orchestrated one. There is no equivalent of an industrial standards body, which awards a ‘real socialism’ certificate of authenticity, and then withdraws it again with retroactive effect. Socialists do not hold clandestine conferences in secret hideouts; they do not deliberately cover up their former support for the regime in question. They simply fall silent on the issue, and move on to the next cause.

At some point, the claim that the country in question was never ‘really’ socialist becomes the conventional wisdom. Since it is only the opponents of socialism who still refer to that example, while socialists themselves no longer do, it is easy to gain the impression that it must be a straw man argument. This book will show that these alleged ‘straw men’ were all once very much alive. They are not straw men at all. They are the failed utopias of yesteryear.

In short:

The not-real-socialism defence is only ever invoked retrospectively, namely, when a socialist experiment has already been widely discredited. As long as a socialist experiment is in its prime, almost nobody disputes its socialist credentials. On the contrary: practically all socialist regimes have gone through honeymoon periods, during which they were enthusiastically praised and held up as role models by plenty of prominent Western intellectuals. It is only after the event (i.e. once they have become an embarrassment for the socialist cause) that their version of socialism is retroactively redefined as ‘unreal’.

Niemietz then provides long list of case studies of self-labelled socialist regimes.  The two biggest examples – Soviet Union and Maoist China – fit his sequence to a tee.  So do North Korea, Cambodia, Albania, and Venezuela.  The chapter on the latter was especially eye-opening for me.  Choice passages:

Chávez defined his version of socialism explicitly in opposition to previous models. This was not empty rhetoric. Under Chavismo, there were genuine attempts to create alternative models of collective ownership
and democratic participation in economic life. In particular, the formation of worker cooperatives and various forms of social enterprises was heavily promoted. Exact figures are hard to come by, but, according to Piñeiro Harnecker (2009: 309), the number of worker-run cooperatives increased from fewer than 1,000 when Chávez was first elected to well over 30,000 in less than a decade. By the end of Chávez’s second term, cooperatives accounted for about 8 per cent of Venezuela’s GDP and 14 per cent of its workforce (ibid.).

Venezuelan socialism would later show many of the negative features associated with earlier forms of socialism, but it was never government policy to replicate any of those earlier models. When Western Chavistas insisted that the Venezuelan government was trying to create a different model of socialism, they were not deluding themselves.

At that point, the tone among Western Chavistas changed noticeably. Pro-Venezuela articles, which had so far tended to be hopeful and optimistic, became angry and defensive. The emphasis shifted from the supposed achievements of Chavismo to whataboutery, and to questioning the motives of Chavismo’s critics both in Venezuela and internationally.

In 2014, Owen Jones wrote an article for the Independent entitled ‘Socialism’s critics look at Venezuela and say, “We told you so”. But they are wrong’. Jones acknowledges the existence of ‘recent economic troubles’, but the emphasis of the article is on the problems of the pre-Chávez era (‘let’s have some context’), and on the violence committed by parts of the opposition. It culminated in the claim that ‘[t]hose who relish using Venezuela’s troubles for political point-scoring have no interest in the truth’.

Since this is a high-quality book, Niemietz searches for counter-examples to his own thesis, and identifies two.  Cuba doesn’t fit because after decades of tyranny, many socialists still admire it.  East Germany doesn’t fit because it never had much of a honeymoon period.  Overall, though, these are minor deviations.  The socialist big picture is at once bizarre and horrifying, especially as so many young people negligently convert to this once-dying creed.

P.S. This spring I’ll once again be debating “Capitalism vs. Socialism,” this time at the University of Wisconsin versus Brian Leiter of the University of Chicago.

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Explain Your Extremists

No matter how controversial your political views are, there are always people on “your side” who hold a more extreme position than you do.  How do you account for such people?

Top scenarios:

1. The extremists are actually right, but their proposals are “politically impossible.”  It’s better to ask for half a loaf and get it than demand a totally unattainable whole loaf.

2. The extremists are actually right, but their proposals are politically unstable.  Even if the extremists prevailed in the short-run, the long-run effect would be a mighty backlash, leading to a crushing defeat for your side.  It’s better to ask for half a loaf that you can actually keep than demand a whole loaf that will soon be confiscated.

3. The extremists would be right, except that foolish and/or knavish resistance to their proposals would be extremely costly.  As a result, it’s better to pursue your more moderate approach, which is inferior in principle but elicits less strident opposition.  It’s better to peacefully obtain half a loaf than to fight a bloody battle for a whole loaf.

4. The extremists are wrong because they take a good idea too far.  A moderate move in your preferred direction makes the world better; an extreme move, however, makes it worse.  It’s better to eat half a loaf and remain at a healthy body weight than to eat a whole loaf and become morbidly obese.

5. The extremists are wrong because they take your side’s rhetoric too literally.  Yes, moderates like you often exaggerate and oversimplify, but you know you’re doing it.  Your extremists, in contrast, naively believe your side’s exaggerations and oversimplifications, leading them to advocate ineffective or even dangerous policies.  Just because your slogan loudly proclaims that “Bread is the staff of life” doesn’t mean you should follow an all-bread diet.

6. The extremists are wrong because they fail to grasp the intellectually sophisticated position held by moderates such as yourself.  If they would just patiently listen, they’d discover the intricacies of your worldview.  Alas, they rarely bother.  Thus, you derive the value of a half a loaf of bread from a detailed examination of human nutritional requirements – and the extremists childishly fixate on getting “all the bread.”

The meta-point, naturally, is that there are also always people on your side more moderate than yourself.  So when you dismiss your extremists, you really should wonder: How confident am I that people more moderate than myself couldn’t rightfully dismiss me?

All of which leads to three questions for discussion:

1. Where do your extremists go wrong?

2. Where would your moderates say that you go wrong?

3. What makes you think you’ve discovered your side’s “Golden Mean”?

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