Tabarrok v. Rodrik

by Henry on August 10, 2007

Alex Tabarrok and Dani Rodrik have moved from arguing about industrial policy into arguing about the blinkers (or otherwise) of libertarianism.

Dani

It is in that spirit that I have been mulling about the derision and incredulity with which my recent post on industrial policy was met among some libertarian bloggers. … The real revolutionaries here are the libertarians. They envisage a real good world out there that looks like nothing we have now (or have ever had), and they want us to get there. Second, there are really deep philosophical differences here that have nothing to do with economics per se. Most importantly, I believe government can be a force for good; they do not. But third, libertarians hold on to their priors so strongly that they seem impervious to evidence. They shrug off the fact that there is more freedom and more wealth in those parts of the world where the government is stronger, not weaker. With respect to industrial policy proper, they refuse to engage with the fact that every nation that has grown rapidly has made use of it. I look at the world and see some government programs that work and others that fail. I want to understand what determines these outcomes, and to know how we can improve the ratio of the first to the second. When libertarians look at the same programs, they see one wreck after another.

Alex

Dani Rodrik responds here to my pointed remarks on his argument for industrial policy. Rodrik’s response, however, is along the same lines of his earlier – “I’m sophisticated, your simplistic” – post on why economists disagree. In this case, it’s ‘libertarians are ideologues who are immune to evidence.’ Rodrik, however, has painted himself into a corner because he cannot at the same time say that the “systematic empirical evidence” for market imperfections in education, health, social insurance and Keynesian stabilization policy is “sketchy, to say the least” (also “difficult to pin down” and ‘unsystematic’) and also claim that libertarians are ideologues who are immune to evidence. Say rather that libertarian economists are immune to sketchy, unsystematic, difficult to pin down evidence. Rodrik is thus right that he is “not as unconventional as I sometimes think I am. The real revolutionaries here are the libertarians.” The libertarian economists are revolutionaries, however, not because they are immune to evidence but because they respect evidence so much that they are unwilling to accept “conventional wisdom” simply because it is conventional.


My tuppence worth: I think that Rodrik is too quick here to lump all libertarians together (one of the lessons that I’ve had to learn over the last few years in the blogosphere is that you can’t and shouldn’t do this). Some libertarians, most notably Tabarrok’s co-blogger Tyler Cowen, have been willing to argue that government can be a force for good, and that other libertarians need to accept this (n.b. however that Tyler argues that the “vice” of “retreat[ing] to a mental model where the quality of government is fixed and we compare government to market” is widespread among libertarians). On the other hand, contra Tabarrok, I think it’s nearly inarguable that libertarians are far from ‘immune’ to “sketchy, unsystematic, difficult to pin down evidence” when that evidence seems to support the generic claim that markets are better than governments. And this results in exactly the kinds of unwillingness to re-examine priors that Rodrik is talking about; the superiority of markets to other modes of social organization is taken as a given. The best and most pointed take on this that I know of was written by Cosma Shalizi, natch; it’s worth quoting in extenso :

Libertarian capitalism … is a curious ideology in many ways. The one which concerns us today has to do with its advocacy of capitalism. On the one hand, the sanctity of private property and private contracts is held to be a matter of inalienable natural right, guaranteed by the fundamental facts of morality, if not a basic part of Objective Reality; capitalism is the Right Thing to Do. On the other hand, much effort is devoted to arguing that unfettered laissez-faire capitalism is also the economic system which will produce the greatest benefit for the greatest number, indeed for all, if only people would just see it. Natural right therefore coincides exactly with personal interest. A clearer example of wishful thinking could hardly be asked for. It’s not hard to see what function this plays, rhetorically. Many people who are not persuaded by the natural right argument can be lead to go along with libertarian proposals by considerations of economic efficiency. (I imagine the number of people who are unpersuaded of the economics, but buy the sanctity of property, is much smaller.) …

Now, I am the last person to deny that the invisible hand is a very powerful and valuable concept, and I’m certainly not going to deny the fundamental theorems of welfare economics; Debreu’s Theory of Value is one of my favorite books. Under certain precisely specified mathematical conditions, perfectly competitive markets inhabited by perfectly rational agents will allocate scarce resources in ways which cannot be altered without making some people worse off. Whether those conditions are satisfied by any economic system in the real world is an empirical question, and the answer is of course No. Given that those theorems do not apply, the efficiency of markets is another empirical question, or rather a whole series of questions, with answers depending on the market and the tasks they are being asked to perform. There are many situations where markets are a very valuable and powerful social technology, a useful way of coordinating actions, allocating resources, and eliciting valuable efforts. … There are other situations where they produce awful, even perverse results, and still others where they’d never begin to get off the ground, like funding basic research or national defense. …

Now, if the empirical track-record of what are conventionally called free markets is decidedly mixed, there are three courses of action open to the libertarian. (1) Embrace the natural-liberty argument wholeheartedly, and say that we should adopt laissez-faire even when it hurts us, because it’s the right thing to do. Unsurprisingly, moral austerity in defense of liberty finds few takers, though it has some. (2) Argue that the empirical track-record of alternative economic arrangements is actually no better than that of free markets (that, e.g., every instance of market failure is at least matched by an instance of “government failure”), so that’s a wash, and accordingly we should go with the market solution, since that respects natural liberty. (3) Argue that, appearances to the contrary, free markets really are optimal. This option, unlike the other two, is incompatible with intellectual honesty; it is also by the far the most popular, perhaps because it can be well-paid.

This seems to me to set out the intellectual problem pretty clearly. If your starting point is that markets are necessarily optimal, you never even get to the question that Cosma identifies of their relative efficiency for specific tasks, and thus can’t begin to participate in the debates that Dani would like to see happening. There’s no doubt in my mind that some libertarians (of the Economist leader writing variety) believe this most of the time, or purport to believe this in public. I don’t think that Alex is this unsophisticated – I imagine that he would agree in principle that markets are likely to be inefficient in the real world. However, I’m not sure what kinds of empirical evidence might lead him to concede that government may be better than the market at solving a particular problem in the real world, apart perhaps from the very minimal problems of protecting private property etc where most libertarians agree that the state can play an important role. This isn’t to say that there mightn’t be be such evidence; rather that after a few years of reading his blog posts, I’m not sure what it would be (I would be very interested in finding out if he’s willing to respond), and that I think that an explicit openness to having one’s mind changed, even on very important priors, by evidence, is an important pre-requisite to real debate.

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1

derek 08.10.07 at 7:30 pm

One of things I’ve noticed in my experience of the libertarians I have argued with on the Internet these ten years or more is that they can become so addicted to the zing! they can give themselves when they defend a position that looks counterintuitive (“freedom through slavery”, to recall one unforgettable example) that they seek out such situations.

“I know it sounds crazy to say that eating broken glass can improve your digestion, but it’s counterintuitive!”

Once they get that far, I know I can no longer carry on trying to find evidence that it sounds crazy because it’s actually not true. They’ve become too fond of the idea of it being a crazy-sounding truth.

Alex Tabarrok’s challenge to conventional wisdom sounds like that to me. I prefer the Firesign Theatre‘s version.

2

bi 08.10.07 at 7:51 pm

And about the “conventional” part: I think these libertarians(*) need to make up their mind as to whether their doctrine is “conventional” or not. On the one hand, they argue that they’re the True Intellectual Heirs of the US Founding Fathers, and how there was no (or little) poverty, no starvation, in the Good Old Days; on the other hand, they talk as though their programme is so new that it’s totally different from anything that’s come before.

(*) specifically, the Vulgar Libertarians

3

yabonn 08.10.07 at 7:53 pm

one of the lessons that I’ve had to learn over the last few years in the blogosphere is that you can’t and shouldn’t do this

All hail your endurance.

All I’ve learnt reading them is wondering at the socio-economic conditions that led to that cosmic-sized synchronized flatulence that sent them all on this scintillating orbit around their navels.

Or at what we are are going to do with all the morlocks, once we are all, us normals, shiny promethean entwepweneurs.

Or at the birth of a new science : applied teratology, the study of monsters.

… Left me laughing meanly at the Rand-bots too, but that goes without saying.

4

Ginger Yellow 08.10.07 at 8:06 pm

I’ve never really understood why hardcore libertarians of the “markets are always best” variety don’t go the whole hog and endorse anarchism. Genuine question: why, given that prior, should government be necessary to protect property rights through courts or monopoly of violence? Why not WTO style organisations and mercenaries?

5

engels 08.10.07 at 8:11 pm

I may have said this before: there are as many different kinds of libertarians in the world as there are different kinds of lunatics. Taking the views of just one of them to be representative of the rest is as unfair as taking one inmate to be speaking for the whole asylum.

6

David 08.10.07 at 8:19 pm

4: Well, the best, pithiest definition of libertarainism I’ve ever heard is: anarchy for rich people.

7

Thomas 08.10.07 at 8:26 pm

Rodrik isn’t just arguing for libertarians to reconsider their priors. He’s arguing for “moderates” to do so: “My rhetoric was meant to entrap middle-of-the road economists, who see nothing wrong with governments playing a significant role in these other areas, but have an instinctive aversion to industrial policy.”

Alex, I think, would agree that it’s an effective trap for the targeted audience.

8

engels 08.10.07 at 8:27 pm

anarchy for rich people

For some reason they always reminded me of this guy.

9

Bruce Baugh 08.10.07 at 8:39 pm

I like the Shalizi quote. In my experience, libertarian arguments will tend to converge on his #1 stance (you should suffer for the sake of the market) when it comes to something the libertarian isn’t really interested in but the other person is and #2 or #3 (the state can’t ever do it better, so we should leave it to the market; no matter how it looks, the market way is better) when the libertarian is as much or more interested in it as the other person. There are, as ever, exceptions in the form of libertarians who actually do seem willing to sacrifice some of their own possible gain as well as others’ for the sake of the market, but as a general thing, the list of tolerable state activities or just ones that (for whatever superficial reason) should be set aside for dealing with later matches up quite well with the list of what benefits the arguer most directly.

10

aaron_m 08.10.07 at 8:52 pm

Nice post Henry.

What you should expect from libertarians in the face of evidence that welfare efficiency is better served by government involvement in some sector is an appeal to welfare associated with individual liberty as more important. When face with evidence that liberty is better served by government intervention we can expect an appeal to efficiency as more important, usually magically turned back into liberty somehow(although if you pay attention the group in focus usually needs to be shifted somewhat to make this move work).

Anybody else notice that they seem to be assuming something strange about why, for example, many argue that education should not be provided through markets.

It is not because of market failure. Rather it is because markets will fail to give all individuals access to a comparable education. This is exactly what an efficient market in education should do, i.e. we don’t say that the housing market fails because it fails to provide everybody with a house. The objection is simply that such a market in education is morally wrong, i.e. children’s’ access to education should not be determined by their parents’ wealth.

11

John Emerson 08.10.07 at 9:21 pm

This is the part that boggles me. not just with libertarians, but also most free-market globalizers:

With respect to industrial policy proper, they refuse to engage with the fact that every nation that has grown rapidly has made use of it.

We’ve been reading forever about South Korea and Taiwan as free-market triumphs, but they both were protectionist, as was Japan during its rise. I’m less sure about Singapore and Hong Kong, but these city-states probably aren’t good models for anyone except other city-states. Has any nation ever risen to prosperity by following the World Bank IMF rules? Chile is supposed to one, but they’re about equal to Russia in GDP-PPP per capita.

12

John Emerson 08.10.07 at 9:24 pm

The best definition of libertarianism is “Republicans on drugs”.

And what Engels said.

13

John Emerson 08.10.07 at 9:28 pm

The startling thing about PPP-GDP per capita comparisons is that there are 54 countries poorer than Bolivia. Venezuela is the median and Mexico is well above the median.

14

P O'Neill 08.10.07 at 10:46 pm

Singapore was “free trade” in the sense of tariffs and quotas. But many key economic entities are government owned. And Dubai, often hailed as a “unbridled free market” is nothing of the kind, except in the sense of lighter regulation in the free zones. The government, in effect the Emir, owns lots of things that would be private in either countries. Such as an aluminium company. And an important part of the dynamic of Hong Kong is driven by government ownership of land. So once you start digging in the actual details of the city-states, the favourite libertarian examples, there’s a lot more than meets the rose-tinted eye.

15

Bruce Baugh 08.10.07 at 11:12 pm

I’m going to make an apology. I’ve been harshing on libertarians in several threads here and elsewhere lately, and I have to remind myself: these folks are not, in my view, the serious enemy. Insofar as they keep doing dumb and wicked things like championing the conservative movement in exchange for libertarian lip service, yes, they’re aiding and abetting…but precious few of them have any real influence in the institutions whoe leaders and followers are really harming my nation and the world. Regents University has supplied the Justice Department with many bad, hypocritical Christians, for instance; if there are many libertarians among the attorneys general, I don’t know about it. The Iraqi reconstruction was sabotaged in part by free marketeer ideologues, but also by simple corporate greedheads and fools of other kinds, too. Some self-identified libertarians like the bunch at the Volokhs’ place defende policies of torture and other abuse, but there aren’t enough libertarians to fill the ranks of torture planners and executers. It’s not libertarians turning the military academies into religious indoctrination centers and subsidizing private groups to preach what they call crusades in the Middle East. And so on.

Many libertarians annoy me – though some remain people I’d trust with my life, wealth, and health at a moment’s notice – but they’re not pulling the levers of power any more than I am. And it’s not fair of me to carry on as though they’re making the nightmare of the day.

Sorry for loss of perspective.

16

Russell L. Carter 08.11.07 at 1:21 am

What Bruce in #15 sayeth. Even though I’m a long time MR reader too and I’m not all pursuaded that Alex has a sophisticated guiding philosophy. DeLong’s attempts to periodically rehabilitate him are an oddity, too. Still, Henley’s crew are sane, and I wouldn’t want to lose them.

Rodrik did put himself in a hard place here. The dogmatic libertarians love that generalization thing. You have to stay concrete, in this universe, with this system, with its unjust history, etc.

17

Seth Finkelstein 08.11.07 at 1:28 am

john / #12 – The way it’s typically put is “Libertarians are Republicans who like to take drugs”.

bruce / #15 – Yes, but they are annoying. I’ve called Libertarians “the street preachers of the information superhighway”. They have little real political power, but they can generate a lot of noise, and in earlier net-days they’d often take-over over open discussion forums (less of a problem now).

18

Seth Edenbaum 08.11.07 at 1:42 am

bruce baugh, I think you’re mistaken. Religious fundamentalists view all questions through the lens of their simplistic moral philosophy. Libertarians and other market fundamentalists think moral philosophy pointless to discuss since all questions have been resolved already. The two fundamentalisms were born to mirror each other.

But arguing with someone about the meaning of the words on a page -whether that page is from the bible or the constitution- leads eventually to conversation and compromise. it may take a while, even decades but it happens. Arguing with someone who claims to have reason on their side cuts off all contact.

Posner’s utilitarianism is more dangerous than the rantings of all but the most apocalyptic of our religious fanatics. Restrictive social roles can be and in the end always are relaxed over time. Posner’s philosophy is anti-social, it has nowhere to go.
And Cowen and Tabarrok are two of the most offensively unsophisticated minds that I have ever come across: offensive only in that they imagine themselves to be sophisticated; and dangerous in that as with Posner so many others agree.

19

grackle 08.11.07 at 2:12 am

My suspicion for some time has been that Libertarians are persons who think Ann Rand is a serious thinker, which I will only grant that she is, but only for 14 year olds.

20

Bruce Baugh 08.11.07 at 2:15 am

Seth F: I certainly won’t argue the “can be really annoying” part, and as a veteran of the pre-Web net I remember not happily how things could collapse under the weight of doctrinair onslaught.

Seth E: I can’t say I’m greatly moved by the intensity of the distinction you make; these seem to me fairly closely related failure modes. I do at least agree that they’re different in evolution, and so for what they mean for people around them.

And since I am very admittedly angry and stressed and discouraged about a lot of the social and political context, it’s entirely possible that I’ll get more moved as it all sinks in.

21

Barry 08.11.07 at 2:25 am

Rusell L. Carter: “DeLong’s attempts to periodically rehabilitate him are an oddity, too. “

More and more I see situations where once you’re in, you’re in forever, *unless* you violate core doctrine. And in most cases, lying fraud, criminality up to mass murder don’t seem to be violations of core doctrine. Even violating proclaimed doctrine (e.g., Mankiw could spout whatever nonsense Bush required) doesn’t seem to be much of a problem.

I think that what happens to many groups is that they warp into protecting their own, even at the long run expense of the group.

22

Bruce Baugh 08.11.07 at 2:36 am

Barry: True enough. It just turns out to be really, really, really hard to build institutions that help support a continuing commitment to be correct rather than to be doing the same old thing. Even when everyone knows the dangers and want to do it right. Human nature’s a bugbear sometimes.

This isn’t at all to excuse the problem, just to appreciate its magnitude. When stakes are this high, it’s got to be dealt with even though it’s hard.

23

Seth Edenbaum 08.11.07 at 2:37 am

bruce,
I’m actually almost optimistic that a secularizing and modern Islam will bring a rigorously argumentative kick to this debate. Islam is or will be the new judaism in western intellectual life.
Fundamentalist christianity is anti-intellectual by comparison.

24

Bruce Baugh 08.11.07 at 2:43 am

Seth E, your #23 is something I’ve seen some interesting speculation about in recent years, and still strikes me as well within the range of plausibilities.

25

John Emerson 08.11.07 at 2:56 am

Seth E. is right about Posner. He’s really awful, and very influential.

26

bi 08.11.07 at 5:27 am

Bruce Baugh #15:

I’d still say they’re still dangerous. There’s no single small group of really powerful libertarians, but “opinion is king”, especially in a democracy.

And the libertarians’ opinions provide a sort of populist ‘justification’ for the greedy elites’ efforts to be greedy. There’s some real power in opinion.

27

Brett Bellmore 08.11.07 at 10:11 am

“And the libertarians’ opinions provide a sort of populist ‘justification’ for the greedy elites’ efforts to be greedy.”

While the liberals provide a sort of pseudo-moralistic ‘justification’ for the non-elites to be envious and spiteful, in case you haven’t noticed. Because this eases the way for politicians to buy the masses’ votes with the elites’ money, by suppressing any guilt pangs people might feel about it, the result is that you get a lot of support from political institutions. But not, you might notice, for the parts of your program which are inconvenient to politicians.

Really, both libertarians and statists have their own characteristic flaws, and if I had to identify the latter, I would say it is a reflexive rejection of the concept of the ‘necessary evil’, leading you to think that once you’ve demonstrated that some evil is necessary in extraordinary situations, you can just add it to your tool box, and use it whenever it strikes your fancy. Your approach to taxation is rather like the fellow who, having discovered that it’s ok to hotwire a car to get a heart attack victim to the emergency room in time, starts jacking cars to go grocery shopping.

28

Bruce Baugh 08.11.07 at 10:17 am

Brett, of course, spent considerable time arguing that because Democrats didn’t pursue every possible scandal among their own with enough zeal to satisfy him in the ’90s, they’re now morally unfit to question Republican abuses of power. I’m not sure what to call that: maybe the flip side of the “necessary evil” would be something like the “impossible good”, something desirable and perhaps even encessary but set out of bounds because of standards that in practice can never be filled? It’s a common enough libertarian debating tactic, certainly.

29

bi 08.11.07 at 10:29 am

Brett Bellmore:

What a load of bollocks.

For one thing, where does anyone even get the whole idea that when a politician help the little guy — which they should be doing in the first place — it’s equivalent to the corrupt practice of “buying votes”? Oh great, the right thing to do is for the masses to elect an elite into power, so that it can pursue _the elite’s own interests!_

And more importantly, your impassioned rant is totally free of fact. Bush, Gonzales, Alito, Wolfowitz, Bremer, Enron, etc. — they all came into positions of power (and abuse of power) by “buying votes” from those evil tax-loving librulz? Right!

Yes, it’s _libertarians_ who are aiding and abetting this whole corrupt crapfest… and they’re aiding and abetting it in a very big way, by making the corruption look like it’s good for the Free World.

30

Slocum 08.11.07 at 11:21 am

If your starting point is that markets are necessarily optimal, you never even get to the question that Cosma identifies of their relative efficiency for specific tasks, and thus can’t begin to participate in the debates that Dani would like to see happening.

I don’t know exactly what kind of libertarian I am — certainly not a libertarian party member libertarian. I’ve never gotten around to reading any Rand, and ‘true believers’ of any type generally make me nervous.

So I certainly don’t think markets produce optimal results in all cases and conditions. Optimal results, in fact, are probably almost never achieved. But I do think that government interventions into markets produce self-dealing, rent-seeking behavior on the part of powerful interests and, therefore, significantly worse results than the imperfect market. Markets produce sub-optimal results, yes, but government interventions ‘for the common good’ tend to make things worse.

Exhibit A — insane, expensive, damaging ethanol subsidies. Supposedly an example of how the government can do long-term thinking on energy policy that ‘the market’ can’t or won’t do, it’s actually a perfect example of the baptists and bootleggers pattern. And it really is a disaster — we’re wasting billions, driving up the cost of corn (not just for Americans but much poor people who rely on it as a basic food), and building an ethanol infrastructure for a system that consumes almost as much energy as it produces. And, it is almost certainly keeping some private money on the sidelines — there are enormous potential fortunes to be made in truly useful non-petroleum energy technologies, but the government pouring money into subsidizing ethanol is certainly going to slow that down. Left to it’s own devices, the market would do a far better job in devoting resources to alternatives with real promise. (And don’t try to tell me it’s because the Republicans are in power — the leading Dems are every bit as much ethanol whores as the Republicans).

31

stostosto 08.11.07 at 11:39 am

Re your remark on the Economist leader writers, I’d like to note that they’re not libertarians at all. They are on principle advocates of free trade, and they do advance the “government failure” argument sometimes (and sometimes its entirely appropriate), but they’re by no means averse to the idea of government as a force for good. See e.g. their take on global warming.

32

Seth Edenbaum 08.11.07 at 12:53 pm

“both libertarians and statists”
That’s the popular dichotomy but it’s not that useful; both assume a natural individualism that requires liberty or restraint. On the other hand anarchism, socialism and social democracy all assume the constitutive base of the social. That division is also the basis [I'll make this brief since I say it all the time] of the division between Anglo American and “Continental” thought.
The popularity of libertarianism in the/our academy says a lot about the unwillingness or inability of people to imagine themselves as products of their linguistic and political environment; Europeans and most other cultures take this for granted. American political intellectuals are so terrified of determinism that they refuse to see it as a category and refuse to recognize it. And our conservatism is absurdly contradictory, since it’s made of market liberals and religious reactionaries.
But in general Americans don’t see themselves as “Americans” though everyone else does[!] That’s our problem. Libertarianism is just an extension of that logic.

33

bi 08.11.07 at 1:21 pm

Slocum:

“Left to it’s own devices, the market would do a far better job in devoting resources to alternatives with real promise.”

How do you know? Specifically, how do you know that laissez-faire for ethanol (which reportedly has never been tried) is bound to be superior to some other sort of government regulation (which, well, has never been tried either — bingo!).

The only real answer I’m hearing from libertarians is the good old “we don’t know, therefore we know” argument.

34

Tim Worstall 08.11.07 at 1:49 pm

Slocum: Bravo! Not so much a libertarian argument as a classically liberal one perhaps?

Seth:

Mill: “The only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not sufficient warrant.”

Classical liberals are therefore those who think that others should be able to take whichever drugs they wish.

35

Hidari 08.11.07 at 2:08 pm

I have (at least) two major objections to libertarians. The first one goes right back to the ‘original’ debate with the German Historial School in which (and I’m aware that I’ve been boring everyone senseless with this point for some time now) in some senses, I think the ‘wrong guys’ ‘won’. That is, libertarians (either of the Austrian School variety or the neo-classical variety) tend to underestimate (greatly) the impact of politics, science (technology) and other forces (not least environmental) in terms of the ‘creation’ and management of markets. They don’t really understand, therefore, how markets arose or why, and so they tend to assume that they have ‘always’ been there, or that markets arose ‘spontaneously’ or something of that sort.

The classic example is of course the ‘rise of the West’. It’s been established by a number of economic historians, for example, that the West adopted protectionist anti-free trade policies to ‘greenhouse’ their indigenous industries (cotton, steel) and only started to adopt ‘laissez faire’ policies when it was in their interests to do so. It’s almost certainly the case that this was the right thing to do, too, and that ‘premature’ adoption of laissez faire policies can lead to your industries being wiped out. (Libertarians also invariably ignore the effect and point of economic imperialism….the British invaded India and China because both these countries produced better quality goods than the British did in terms of a number of industries and it was simply quicker and easier to destroy their competitors militarily than to invest in the technology that would result in ‘beating’ their competitors ‘on a level playing field’.)

The second point is related to the first. Libertarians tend to adopt a very simple (indeed, simplistic) utilitarian approach to the questions ‘what’s best’? But this ignores the question : ‘whats best for whom‘.

Take Slocum’s point about subsidies. Now there is absolutely no doubt that (for example) the CAP is a disaster: it leads to wine lakes, butter mountains etc, and also to the dumping of goods on African markets who can’t compete: hence African (and South American) farming is destroyed. So a ‘lose lose’ situation.

Except…not. CAP does benefit some people. French farmers for example. Also, who says that Europeans actually want Africa to do well, economically? More economic power means more political power means more economic power: there are good reasons as to why Western elites would not want forces hostile to ‘Western values’ (whatever they are) to arise any more than they want them to arise in the Middle East or South America.

So from this point of view, CAP works, and so do other subsidies. But the basic point I’m making (that economics can never be an ‘autonomous’ science: that it can and should always have links with anthropology, psychology, sociology, politics and history) is not one that libertarians tend to be too keen on.

36

Brett Bellmore 08.11.07 at 4:05 pm

“For one thing, where does anyone even get the whole idea that when a politician help the little guy—which they should be doing in the first place—it’s equivalent to the corrupt practice of “buying votes”?”

I said buying votes, and I stand by that: Whatever high minded rationalizations the left might have for ‘progressive’ taxation and the programs it funds, to the politician it’s about one thing, and one thing only: Maximizing votes by pissing off as few people in the getting of the loot, and pleasing as many as possible in it’s distribution.

37

aaron_m 08.11.07 at 4:22 pm

Slocum

“And, it is almost certainly keeping some private money on the sidelines—there are enormous potential fortunes to be made in truly useful non-petroleum energy technologies, but the government pouring money into subsidizing ethanol is certainly going to slow that down. Left to it’s own devices, the market would do a far better job in devoting resources to alternatives with real promise.

Why would the market do that?! The reason we want alternatives is because the current energy sector is polluting the atmosphere. But this is an externality in that current actors in the market do not have to pay for this pollution and the negative effects will almost exclusively hit people other than the relevant actors (including all of us). Instead it is overwhelmingly people in the future and in other places that will suffer the costs of atmospheric pollution. Left to their own devices rational actors following the logic of markets do not have incentives to do something about these externalities.

Every thinking libertarian I suppose would agree that global warming is a case of a real market failure if looked at from a long term perspective. I guess what they would say is that this problem is just one of those extremely rare kinds of market failures that can only be resolved through government institutions (like law and order and national defense). This is because it is not workable to parcel out ownership of the atmosphere to achieve “efficient” levels of environmental protection as one might be able to do for an over-polluted lake (i.e. something where owners could exclude usage in a cost effective way).

This does not of course mean that libertarians should think that ethanol subsidies are the right way to go. But even the logic used by libertarians commits them to the conclusion that government intervention is necessary if we are to succeed in doing something about global warming.

The problem is that there seems to be an awful lot of libertarians that do not appear to be committed to really working out the implications of their normative premises combined with their economic theories. Instead they operate as knee jerk cheerleaders of the market. This is why those few that appear to be able to combine both tasks with at least some degree of openness, like Cowen, gain much broader attention and regard than the rest.

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Bruce Baugh 08.11.07 at 4:22 pm

It’s very convenient to believe that an entire decision-making class has bad motives, particularly when the base motive in question comes with an absolute denial of all other intellectual and moral concerns. Why, it’s almost as if one were to wish to avoid engaging in anything of substance in the thoughts and debates of that class.

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Slocum 08.11.07 at 4:43 pm

bi: How do you know? Specifically, how do you know that laissez-faire for ethanol (which reportedly has never been tried) is bound to be superior to some other sort of government regulation (which, well, has never been tried either—bingo!).

I know for certain that markets, left to their own devices, could not have produced the current ethanol-from-corn clusterf**k for the very simple reason that ethanol from corn makes no economic sense without massive subsidies (and makes no environmental sense with or without subsidies). So free markets (appropriately) would not result in ethanol as a preferred alternative energy solution (with the exception of Brazilian corn-from-sugar-cane or unless there is a technical breakthrough in producing ethanol from waste biomass).

Let the inventors and entrepreneurs and venture capitalists place their bets on the most promising, most economic forms of alternative energy.

hidari: Except…not. CAP does benefit some people. French farmers for example. Also, who says that Europeans actually want Africa to do well, economically? More economic power means more political power means more economic power: there are good reasons as to why Western elites would not want forces hostile to ‘Western values’ (whatever they are) to arise any more than they want them to arise in the Middle East or South America.

So to sum up, CAP makes Africans and South Americans worse off economically and politically, and it makes Europeans who are not farmers worse off economically, but what it does do ‘successfully’ is to keep Africans and South Americans poor and politically powerless and, therefore, keeps Europe politically strong in comparison? So Europeans might ‘rationally’ prefer to keep CAP around because although it makes themselves a bit poorer it really keeps the poor, brown-skinned people in their proper places?

Lovely vision that, but I think I’ll stick with libertarianism (or classic liberalism or whatever you want to call it).

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Bruce Webb 08.11.07 at 5:10 pm

Very interesting discussion.

But I have to disagree with Slocum on ethanol. To me it is much the same as Clintonian Welfare Reform and Medicare Part D, good ideas with generally good outcomes but implemented in inefficient ways that benefit certain special interests.

Was Welfare Reform passed in a form designed to be punitive? Well yes it was. Per Gingrich et al poor women who want to stay at home with their kids are lazy slackers, whereas middle class women who want to stay at home and home school their kids are paragons of American Motherhood. Okay granted that Republicans wanted Welfare Reform in the worst possible way and delivered (the plan being almost the worst way possible), it did break the perverse link that tied health care for children to welfare. Previously getting a job in many cases meant losing health coverage for your kids, well that was just nutty. Having broken that barrier are we closer to universal health coverage not just for kids but for everyone? Well yes we are.

Was Medicare Part D designed with Big Pharma profits in mind? Well now that you mention it. Is drug coverage under Medicare a good thing in itself? Of course it is. Previously we had a system that could only supply patients drugs if they were hospitalized. Once again we had nutty and perverse outcomes and incentives. But having broken this barrier are we likely to have better and cheaper health outcomes going forward? Well certainly, and we can take Big Pharma on when we get the opportunity. This one is not over.

Same with ethanol. Is the subsidy program as designed simply a huge giveaway to corn farmers? Well yes, offset only by the fact that corn prices were in fact too low at $2/bushel. Will corn be the long term source of ethanol? Probably not, the future is in switchgrass (http://bioenergy.ornl.gov/papers/misc/switgrs.html) and sugar cane. But in the mean time we can use Big Ag to set up a distribution system from coast to coast, and then battle out the political and economic costs later.

I am a New Deal Democrat. DId FDR line up a coalition that knowingly included some pretty dirty political machines? Did FDR drag his feet on certain civil rights issues? Yep and yep. But you do what you can with the tools you have. Given the Congress he had Clinton did the best job he could. Did his triangulation infuriate the purists? Boy howdy. Does this mean we should go off in a huff and vote Green? Not on your life.

You can call any or all of these things Dirty Deeds Done Dirt Cheap. I call it political realism, you take what you can how you can and when you can. The New Deal is a process, not an event.

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aaron_m 08.11.07 at 5:26 pm

“Left to it’s own devices, the market would do a far better job in devoting resources to alternatives with real promise.”

because

“there are enormous potential fortunes to be made in truly useful non-petroleum energy technologies,”

so the obvious thing to do is

“Let the inventors and entrepreneurs and venture capitalists place their bets on the most promising, most economic forms of alternative energy.”

Are cows purple and the sky green polka dot in your world?

Following the logic of everything you say it must be the case that market actors have already solved the energy/climate problem. Or maybe not but this must mean that the market is wildly irrational, hardly an argument for leaving up to them.

The more plausible explanation is that there just are not the kinds of economic incentives that could effect a change in the energy sector of the magnitude we need and at the rate we need (CO2 peaks by 2015 and 50-85% below 2000 emissions levels by 2050).

The lack of free market economic incentives explains why the vast majority of private investment remains overwhelmingly in traditional fossil fuels and not in alternatives.

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Russell L. Carter 08.11.07 at 5:42 pm

Ah, good, we can actually get back on topic, ergo, is it possible for the government to implement an intelligent industrial policy that improves outcomes over what the free market would otherwise produce? I say yes. Just institute a carbon tax of the equivalent of $3/gal gas (or more), earmark half (or more) of it for some sort of rebate structured to minimize the tax’s otherwise hideous regressiveness, and then let the market figure out the most efficacious solutions to the C02 and peak oil problems.

Sorry Alex, you lose. Back to bounty hunters you go.

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will 08.11.07 at 5:45 pm

slocum, I don’t think the absurdity of corn-based ethanol subsidies is a revelation to any of us. (Bob Park has been discussing this in his newsletter for months, if not years.) What you have yet to explain is how the market would naturally adopt any sort of alternative fuel, so long as the cost of oil does not reflect the environmental damage it inflicts, or CO2 mitigation scheme, so long as no one is held accountable for emissions. The market will provide the likes of TerraPass to concerned urban liberals, I suppose.

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Slocum 08.11.07 at 6:04 pm

aaron_m: Following the logic of everything you say it must be the case that market actors have already solved the energy/climate problem.

Of course not — because only recently has oil gotten expensive enough and (this is critical) only recently has it become a good bet that oil will stay expensive enough that alternative technologies have a good chance to be economically competitive.

Now some will make the argument that governments can be more far-sighted and make the needed investments even *before* there’s a reasonable prospect that the alternative technologies can pay off. But in practice what we get are not ‘far-sighted investments in our energy future’ we get a massively expensive, moronic corn-from-ethanol program that isn’t going to do a thing for our energy future (except screw it up even worse by setting us down a futile path which will be hard to reverse) and has all kinds of nasty side-effects, but is essential for…winning the damn Iowa caucuses.

Climate is clearly a different issue however — I would not expect markets to solve those problems independently without proper incentives (such as Pigovian carbon taxes). But we’re probably not going to get Pigovian taxes (which are difficult for politicians to exploit). What we’re likely to get instead are carbon-credits that politicians can hand out to supporters and local industries in their districts.

I will say, though, that markets do have the potential to filter the politics out of risk assessments to some extent. For example — has the value of real-estate in low-lying coastal areas collapsed?

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aaron_m 08.11.07 at 6:15 pm

Climate is not a different issue, it is the issue we have been talking about since you started on ethanol. That is just one example of a government attempt to create ‘the right kind of incentives.’ And you made general claims to the effect that we do not need these kinds of efforts from government, instead we should just ‘let the market bring us into the future.’

Nobody is claiming that markets don’t have a central role to play. What were are complaining about is the typical pseudo-libertarian knee jerk cheerleading of the market and unreflected rejection of the role of political institutions.

A more honest characterization of our discussion is that upon reflection your original claims prove to be false.

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Mike Huben 08.11.07 at 6:28 pm

Cosma’s argument seems to come very much from Jeffry Friedman’s What’s Wrong With Libertarianism and it’s sequel, The Libertarian Straddle. These point out that libertarians rely on combinations of consequentialist and non-consequentialist arguments in ways that don’t actually support each other.

These and many other criticisms of libertarianism are linked at my web site, Critiques Of Libertarianism.

When Rodrik speaks of libertarians as “impervious to evidence”, what I think of is a steadfast ideological refusal to use common sense, instead relying on mere doubt or claims that “markets could do it better.” Common sense shows that markets can’t educate the populace better because no nation has achieved a well-educated populace without huge government financial support. Likewise roads, defense, health, infrastructure, etc. There have been enormous numbers of political experiments in private and public production, and this vast experience shows that governments tend to be better than markets at many tasks, and compliment markets at many others. This is strong evidence, and libertarians ignore it on ideological principal.

Another reason I think libertarians are “impervious to evidence” is because they have no theory for explaining government success. They have plenty of theories (such as rational choice) for explaining government failure, but no way of explaining why government isn’t doing worse than it is. Without such a framework for accepting evidence, they suffer from extreme confirmation bias.

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bi 08.11.07 at 6:45 pm

Why in the nine hells is Brett Bellmore actually arguing politicians should serve the interests of the few and not the many? Oh, and the privileged few deserve to be privileged because… hey, because they’re privileged! The very fact that they’re privileged shows that they deserve to be privileged!

And Brett Bellmore’s “truths” about how the Evil Forces of Librulizm are destroying America are… still independent of fact. Then again, if you jump up and down and scream “I’m wrong, but I’m still right! I’m wrong, but I’m still right!” often enough, you can turn unfact into fact.

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Brett Bellmore 08.11.07 at 6:54 pm

“Why in the nine hells is Brett Bellmore actually arguing politicians should serve the interests of the few and not the many?”

That would indeed be a strange thing to argue, were I actually arguing it. The fact is, I don’t want the government to rob the few on behalf of the many, or the other way around. I don’t want the government robbing people at all. You’re doubtless confused on this point by the typical liberal tendency to characterize a failure to transfer wealth in the direction you want as a transfer in the other direction.

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bi 08.11.07 at 7:13 pm

Brett Bellmore:

Oh, the poor “rich people” who are getting “robbed”! Oppressed white males such as Michael Ignatieff, Bill O’Reilly, Steve Milloy, etc. who can help contribute so much more to the world if only we’ll stop robbing them!

And, just to bring Balance to the Force: if we stop “robbing” Stephen Colbert by way of taxes, perhaps he’ll truly be able to turn reality into what we want it to be. And when that happens, Brett Bellmore will be able to make certain facts go away simply by ignoring them. And once taxes are removed, all this and more will be possible.

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bi 08.11.07 at 7:33 pm

Bruce Webb:

Speaking of the New Deal, I wonder why libertarians keep forgetting that the US was led out of the depression with the New Deal. Or why they don’t try to explain how the Depression came about in the first place.

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Slocum 08.11.07 at 7:38 pm

aaron_m: Climate is not a different issue, it is the issue we have been talking about since you started on ethanol.

Sorry, no — here in the U.S., ethanol is primarily about ‘energy independence’ and $70 oil not Kyoto. We’d have an ethanol program with our without concerns about greenhouse gases (you may have noticed that Republicans who are not keen on Kyoto are, nevertheless, quite enamored of corn ethanol).

Of course it’s true that corn ethanol sucks as much as means to address climate change as a means to achieve ‘energy independence’, so it’s a double failure by government: as an industrial policy and (secondarily) as an environmental policy.

And you made general claims to the effect that we do not need these kinds of efforts from government, instead we should just ‘let the market bring us into the future.

I made no such general claim. I did claim markets would be much more effective in allocating resources to promising alternatives to fossil fuels (and couldn’t possibly create a disaster like the U.S. ethanol program).

What were are complaining about is the typical pseudo-libertarian knee jerk cheerleading of the market and unreflected rejection of the role of political institutions.

My suspicion of industrial policy is by no means ‘unreflected’, but derives from concrete examples of government programs being subverted by powerful interest groups and politicians and turned to their own benefit with the original ‘do good’ rationale serving as a fig leaf (‘energy independence’ and ‘climate change’ in the case of ethanol).

Furthermore, I suggested a specific kind of role for government (Pigovian taxes) which I strongly prefer because they cannot easily be subverted into goodies to be handed out by politicians to powerful interests.

Were you surprised when European governments handed out huge piles of carbon credits to favored industries providing them with windfall profits and generating no reductions in CO2? And are you surprised that we may see a repeat performance? Were you surprised to discover many of the schemes to ‘produce’ and sell carbon credits turned out to be fraudulent? If you were a libertarian, you would not have been surprised — because the incentives are such as to produce just these kinds of results.

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aaron_m 08.11.07 at 7:59 pm

And you made general claims to the effect that we do not need these kinds of efforts from government, instead we should just ‘let the market bring us into the future.

“I made no such general claim. I did claim markets would be much more effective in allocating resources to promising alternatives to fossil fuels “

First off – Hun!?

Two- Markets are not more effective in perusing alternative fuels for climate or self-sufficiency reasons because the incentive structures are not there independent of government. The dependence on government intervention is the relevant issue between libertarians and the rest.

Sure lots of climate and energy policy can be bad, but markets “left to their own devices” are guaranteed to fail. Even the economic theories libertarians support commit them to this conclusion. So when you say stuff like “leave the market to its own devices” that IS unreflective nonsense.

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Brett Bellmore 08.11.07 at 7:59 pm

“I wonder why libertarians keep forgetting that the US was led out of the depression with the New Deal.”

Probably because we notice that the US, which had a track record of going into and then naturally climbing back out of recessions lingered in the Great Depression for an extraordinarily long time, and strongly suspect that it was the New Deal that put the “Great” in the Great Depression in the first place. And WWII that got us out of it, not the New Deal.

Yes, Bi, I understand liberals have to know who is being robbed, before deciding if robbery is bad or good. As a ‘justification’ for envy and spite, this rather follows.

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Bruce Baugh 08.11.07 at 8:23 pm

From time to time I get curious about the history of obsessions. Tim Lambert’s outstanding work on the history of attacks on DDT, showing how they originated in tobacco companies’ efforts to distract world health organizations from their own products, is a good example. One might well wonder: why ethanol? I mean, yeah, it’s wasteful and it’s a dead end as far as expecting relief from climate change, but broadly speaking nobody’s dying from it or even getting made miserably sick by it. So wh aren’t libertarians using high fructose corn syrup as an example of subsidies doing real harm? Or the problem of slave labor in China being so crucial to American commerce now?

Well, okay, the latter is easy. Libertarian think tanks’ corporate sponsors benefit from the slave labor, and the general libertarian rule is that customers are welcome to protest but never to organize in any way that might actually affect corporate profits. But do they actually get a lot of money from sugar growers? Why ethanol, exactly, in a universe of alternatives?

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Bruce Baugh 08.11.07 at 11:06 pm

Random thought: Libertarian philosophy rests on the assumption that Adam Smith was wrong.

Or rather at least that Smith was only partly right. Sure, magic happens when everyone’s greedy and self-interested in the marketplace, but (so the stock libertarian interpretation runs) this is all within boundaries. Governments might conspire to cover up costs and shift externalities onto others even to the point of innocents’ death and suffering, but corporations just won’t, if they can’t use government power to do it. Corporations are just better than that – if they’re turned loose, they will not immediately seek to grab all the powers the state used to have and use them in just as self-interested a fashion.

The lesson the modern conservative movement is teaching us all over again is, among other things, that the corporate world includes people who are as serious about untrammeled power as any other sort of would-be authority.

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robertdfeinman 08.12.07 at 12:17 am

Some random comments:

1.When tangling with libertarians they will deny the data if it works against their beliefs (this got Mark Thoma annoyed the other day).

2.If that fails they will attack the person that they disagree with, usually with derision and if that doesn’t work obscenity.

3. Why libertarians are important is because their leaders are paid shills that work for a small group of super wealthy conservatives. This group has for decades set up “think tanks”, endowed chairs at universities, sponsored events and even run major print outlets. Scratch a libertarian and you will probably find he bleeds money provided by Scaife, Coors or one of their circle. People don’t realize what a concerted effort this really is. Most people don’t think it is possible that a 100 or so wealthy families could really change national policy.

4. The intellectual veneer provided by the shills gives right wing politicians the justifications they need to promote the interests of the super wealthy. An instructive case has to do with the debate over the estate tax. A recent report traced the majority of the support for repeal to just 18 families. The Waltons alone stand to save something on the order of $40 billion in taxes.

5. It is not the hapless fan club that is important, it is the paid shills. We, the great unwashed, may not get much traction, but when serious economists and social philosophers start dissecting their arguments we may finally see some progress in discrediting this school of thought.

6. Doesn’t anyone find it odd that libertarians only have a role in the US? If their truths were so universal wouldn’t there be major thinkers elsewhere? (I’ll grant a small subcult in the UK.)

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Megan 08.12.07 at 12:23 am

Why ethanol, exactly, in a universe of alternatives?

I have no answer, but I wanted to say that I love that type of question. Why this oddity, when there are lots of oddities that could serve the same purpose?

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Bruce Baugh 08.12.07 at 1:15 am

Sometimes, of course, it’s as simple as “X grabbed an example and random, and it worked, and it lives on because there are prior citations on it”. But I’m still curious.

Robertdfeinman: Well, libertarians often assure the rest of us that national health service wouldn’t work here because we’re full of busybodies. (As opposed to all the European nations, Taiwan, and so on, but never mind, this is the argument.) So it would be a vehicle of untrammeled tyrannical interference in each others’ lives. And of course we have military spending to rival the entire rest of the world. Given two data points on the hypothetical “we are uniquely vile” curve, one can easily imagine a third in the form of “we have a substantial libertarian presence in intellectual discourse, as opposed to the rest of the world which has already faced up to capital’s troubles”.

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I don't really want to stop the show... 08.12.07 at 8:26 am

54:…I understand liberals have to know who is being robbed, before deciding if robbery is bad or good.

Income redistribution from the top to the bottom and to the middle is sometimes called ‘robbery’, but only rhetorically. Obviously it’s not really the same as robbery. You call it ‘robbery’, I call it ‘justice’ – and here we are: we’ve cancelled each other’s rhetoric and now you still have to explain why you think a from-the-top-down income redistribution is bad or unfair. You haven’t done it so far.

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hidari 08.12.07 at 9:56 am

‘So Europeans might ‘rationally’ prefer to keep CAP around because although it makes themselves a bit poorer it really keeps the poor, brown-skinned people in their proper places?

Yeah but that’s my point: CAP doesn’t make all Europeans poorer. The existence of elites and their disproportionate influence on the political/economic process is something that (American style) libertarians seem to have difficulty getting their heads around.

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Tim Worstall 08.12.07 at 10:39 am

“So wh aren’t libertarians using high fructose corn syrup as an example of subsidies doing real harm?”

I can’t speak for libertarians as I’m not one. But I, along with other classical liberals, have indeed used this very example of subsidies doing real harm. Protecting the (miniscule) number of sugar growers in the US has lead to the internal to the US price of sugar being some three times world levels. This ruins the Everglades, impoverishes more efficient sugar farmers elsewhere and has lead to the development and use of HFCS as a replacement sweetner. And to things like the Lifesavers factory moving to Canada.
Given the power of the corn lobby (which isn’t likely to change given the position of Iowa in the Presidential campaign trail) plus the sugar lobby, we end up with ridiculous things like high duties on hte importation of sugar based ethanol from Brazil etc. etc.

Actually, thinking about libertarians, I think you’ll find that Cato has used this ver example a number of times.

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Brett Bellmore 08.12.07 at 11:48 am

“Obviously it’s not really the same as robbery.”

I’ll grant you that, I was rushed when I posted that comment. It’s actually, really the same as extortion.

You’ll recall that in 1984, Newspeak used a drastically reduced vocabulary to prevent people from speaking about, and thus thinking about, certain important distinctions. In the real world, statists use the opposite technique, having a separate, redundant vocabulary for certain actions when done by government, in order to make it easier for people to draw distinctions which aren’t really justified.

“and now you still have to explain why you think a from-the-top-down income redistribution is bad or unfair.”

Because it’s morally indistinguishable from private sector actions which we already agree are bad. One of the key elements of libertarianism, after all, is not pretending that government is, simply by virtue of being “government”, somehow entitled to do all manner of things which we would find objectionable if done by non-government organizations.

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Slocum 08.12.07 at 12:00 pm

Two- Markets are not more effective in perusing alternative fuels for climate or self-sufficiency reasons because the incentive structures are not there independent of government. The dependence on government intervention is the relevant issue between libertarians and the rest.

What markets will do is invest in those technologies that have the most promise to produce energy that is competitive with $75 oil. Which is exactly what we want (though that’s not all we want).

Is there a role for governments playing a role in providing incentives for clean rather than dirty alternative energy? Yes, there is but — but not the kind of hands-on ‘industrial policy’ role that involves subsidizing politically favored technologies like corn ethanol.

Contrary to the rather cartoonish ideas here, many libertarians do acknowledge the need for a government role here (see the Pigou Club), but they have specific ideas about how the government should (and should not) play that role. So libertarians think Pigovian carbon taxes are a far superior idea to industrial policy for alternative energy (which is already proving to be a disaster).

Shorter libertarian version — establish a Pigovian carbon tax and let the market sort out the best alternative energy technologies given the costs of developing the technologies themselves and also the cost of carbon emissions.

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Hidari 08.12.07 at 2:34 pm

Yeah but this is the sort of thing that really gets me about libertarians.

‘Given the power of the corn lobby (which isn’t likely to change given the position of Iowa in the Presidential campaign trail) plus the sugar lobby, we end up with ridiculous things like high duties on hte importation of sugar based ethanol from Brazil etc. etc.’

Yes of course! But since when have libertarians objected to the lobbying of government by business? However at least Tim Worstall gets what Slocum ignores: it is in some people’s interests to have subsidies, protectionism etc. and these people are always going to lobby for these actions. Since many/most of these people are themselves going to be businessmen and women, what libertarians have to say about this is a bit of a mystery.

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J Thomas 08.12.07 at 2:54 pm

I like the Pigouvian carbon tax idea, in principle.

Put a high tax on fossil fuels. Say, $70/bbl on oil, imported or domestic. I’m not sure what the tax should be on coal, maybe on the order of $100/ton. We need to get the taxes to be more-or-less equivalent.

And then take the money and distribute it equally to citizens. If the tax brings in, say, a trillion dollars a year, write out checks to each citizen for $3000+ each. Make that $250 per month. For a family of 4, that’s $1000/month.

So if they drive, they can spend their tax windfall on expensive gasoline, or if they find ways to economise on gas they have the money to spend on whatever else they want.

People who consume more fossil fuel or more things that used a lot of fossil fuel to make, pay more. People who do less of that get more tax money than they lose.

It would have exactly the right effect. Just what we need.

But in practice what would actually happen? The government would keep part of the tax. And each year the government would keep more of it. It would wind up being just another tax, and a somewhat-regressive one at that.

The trouble is, you can mostly depend on private industry to do the wrong thing, and you can mostly depend on government to do the wrong thing. And you can mostly depend on the public to do the wrong thing too. I’m real unclear what to do about it.

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robertdfeinman 08.12.07 at 3:54 pm

To add to my point above “Why libertarians are important is because their leaders are paid shills that work for a small group of super wealthy conservatives.” This group has for decades set up “think tanks”

In the case of Alex Tabarrok and his co-blogger Tyler Cowen the connection is quite explicit. Both work at GMU (and various associated “think-tanks”). The driving force behind this has been the Koch family which has given $23 million to GMU over the years. Koch also founded CATO and several other similar organizations.

You can read a nice summary of the Koch family’s activities here:
Media Transparency

Sorry to be singing the same note over and over, but the power of the plutocracy to determine national policy just isn’t appreciated enough. This is not a philosophical debate, it is a bunch of academics arguing with a professional propaganda machine.

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Dan 08.12.07 at 4:47 pm

Russell, Slocum, j thomas and perhaps others all appear to support Pigovian carbon taxes. The problem appears to be pessimism, as reflected in Slocum’s post no. 45, that politicians will not pass a carbon tax when they can instead enact a cap-and-trade program and give carbon credits to supporters and local industries.

The Carbon Tax Center has proposed a revenue-neutral carbon tax of $37/ton of carbon, increasing by that same amount each year for 10 years. That works out to approximately 10 cents a gallon of gasoline ($1.00) after ten years. The carbon tax would be phased in so that energy users have time to adapt either through using less energy or by substituting less carbon-intensive sources of energy. Since the elasticity of demand for gasoline is less than that for electricity, it may well make sense to include a higher gasoline tax. Russell suggests $3.00 a gallon. The obvious question is whether that level is politically feasible.

Ah, political feasibility? Is any carbon tax politically feasible? Our answer is “yes.” There is increasingly a recognition that we have to do something about climate change and that the something should include “putting a price on carbon.” Assuming Congress does not act pass a cap-and-trade program before the next election, which seems to be fair assumption, there should be plenty of time to carefully compare carbon taxes and cap-and-trade.

Politically, a carbon tax does have that inconvenient “T” word. But, cap-and-trade really isn’t any better politically. Don’t forget, the idea of both a carbon tax and cap-and-trade is to put a price on carbon to reduce carbon emissions. Guess what happens when you put a price on carbon? Somebody has to pay. Where does the money go? With a revenue neutral carbon tax, such as that proposed by the Carbon Tax Center, the revenues flow back to Americans through a reduction in payroll taxes or rebates. With a cap-and-trade system, the revenues go to polluters if the allowances/permits are allocated rather than auctioned and to all the lawyers, consultants, brokers and traders looking for a profit. My guess is that when cap-and-trade is closely examined, people are going to prefer the revenue neutral tax.

A carbon tax is far easier to administer than a cap-and-trade system. The carbon tax is administered by the existing tax system and should be relatively uncomplicated. A cap-and-trade system, by contrast, is far more difficult to implement and administer. Unfortunately, that complication means the benefits of putting a price on carbon will be delayed for many years. We don’t have time to waste. See the Carbon Tax Center’s paper comparing carbon taxes to cap-and-trade.

Please check out our web site and tell us whether you think we’re moving in the right direction.

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better dead than red 08.12.07 at 6:16 pm

Slocum#30 says -
“Optimal results, in fact, are probably almost never achieved. But I do think that government interventions into markets produce self-dealing, rent-seeking behavior on the part of powerful interests and, therefore, significantly worse results than the imperfect market. Markets produce sub-optimal results, yes, but government interventions ‘for the common good’ tend to make things worse.”

Powerful Interests don’t need government intervention to engage in self-dealing, rent-seeking behavior; they do that quite well with or without government assistance. In fact, I would argue government intervention mitigates the behavior of powerful interests and improves upon sub-optimal outcomes by constraining the actions of those with power. “Government intervention,” or the creation of “rules and regulations,” criminalizes certain bad behaviors, bad faith actions, and malfeasance; certain costs are internalized through criminal or civil penalties that would otherwise be borne by a much larger yet less powerful group.
Markets produce sub-optimal results, yes, but in certain instances, government interventions ‘for the common good’ tend to improve things by mandating a certain minimal level of good faith behavior between the powerful and the less powerful.

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J Thomas 08.12.07 at 7:05 pm

Dan, I looked at your website. I think you’re heading in basicly the right direction, nd I liked some of the specific ideas.

I think you should pay careful attention to the intention. Is the intention to reduce US CO2 emissions? If so, then it would mske sense to to tsx by weight of CO2 produced, not by BTU. If one fuel delivers BTU with less CO2, tsx it less.

But I think the effort should be to use less fossil fuel. Then if we desire the tsx come out to $2/gsllon for gssoline, we’d try to set the other levies so we don’t get cross-substitution. Set cosl low enough to get investment in gssoline from cosl which wouldn’t be done otherwise, would not be good.

You suggest returning money for systems which seguester C. This might be good for reducing CO2 but useless to reduce fossil fuel. It promotes corruption too. i’d suggest keeping it out of your effort. Do the C seguestering in s different bill. Keep this one simple.

Similsrly, don’t do revenue-neutrsl by reducing psyroll tsxes. Give citisens their tsx-free checks. Give every bit of the income to them. Then you need to psy to run the progrsm, but it’s obvious to voters where the money goes. They get it. When the government keeps some of it, it’s obvious. When the government keeps some of the money, it’s only s mstter of time before they keep the whole thing snd it won’t be revenue-neutrsl st sll.

My opinions. I think you’re doing very well even though I see some possible improvements.

(Sorry sbout missing the first letter of the slphsbet, I’ll get s new keybosrd soon. It just guit.)

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Robert 08.12.07 at 8:24 pm

According to James Galbraith, advanced economic theory no longer supports “libertarianism”. I have usually found living “libertarians” to not have a good understanding of economics.

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Eric H 08.12.07 at 9:07 pm

Mike: “Common sense shows that markets can’t educate the populace better because no nation has achieved a well-educated populace without huge government financial support. Likewise roads, defense, health, infrastructure, etc.”

Common sense? Actually, IIRC, literacy in the US was well over 90% and climbing before compulsory schooling (and well before “huge government financial support”), and likewise roads, health, and infrastructure. Spending does not equal quality (a basic assumption that Rodrik seems to share). Also, you really must consult one of the logical fallacy listings like those on your website; it seems like every time you enter a discussion of policy A, you end up with a list of legitimate activities that goes, “defense, police, A” as if they were on a continuum.

rdf: “2.If that fails they will attack the person that they disagree with, usually with derision and if that doesn’t work obscenity.

“3. Why libertarians are important is because their leaders are paid shills that work for a small group of super wealthy conservatives.”

Your third point is an example of the tactic described in your second point. Ditto your follow-up post.

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John Emerson 08.12.07 at 9:53 pm

Galbraith is regarded as heterodox, though.

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Dan 08.12.07 at 10:51 pm

J Thomas,

Yes, the intent is to reduce CO2. We’re proposing a Pigovian tax that internalizes the costs of carbon. That’s why we’ve proposed a tax on a per ton of carbon basis. Our focus is on CO2, for environmental reasons, as opposed to fossil fuels. Substituting natural gas for coal-fired electricity generation is something that we want to encourage. Of course, substituting solar or wind for fossil-fuels would result in greater CO2 reductions and would be preferable.

We propose a credit for sequestration, since sequestered SO2 is not released to the atmosphere where it will contribute to climate change. There will obviously have to be carefully developed protocols to avoid corruption and to ensure that sequestered carbon dioxide is not released to the atmosphere at a future date.

We are indifferent to whether the carbon tax revenues are returned via offsetting tax reductions or monthly rebate checks.

Thanks for sharing your thoughts.

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Brett Bellmore 08.13.07 at 12:17 am

“But since when have libertarians objected to the lobbying of government by business?”

Since never, in as much as “lobbying” is nothing but free speech. What we object to is the government having the power to actually DO anything for business in response to the lobbying… Which lack would, one presumes, substantially reduce the motive to engage in it.

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Hidari 08.13.07 at 9:03 am

‘What we object to is the government having the power to actually DO anything for business in response to the lobbying’.

But your argument (not logically, but empirically) contradicts itself. To repeat, as Tim Worstall pointed out (and most libertarians are in practice very loathe to admit this), in the modern world, most pressure for subsidies, protectionism, etc. comes not from ‘the left’ but from businessmen themselves, as they see these things (rightly) as being in their own self-interest (this is particularly the case with the military).

And these people fund political parties, especially of the Right and expect to have (and do) an effect on the policies pursued (if you think ‘lobbying’ is simply another word for free speech you really should get out of your ivory tower more. Lobbying is another word for what we used to call ‘bribery’: ie I give you money, you do what I tell you).

So parties of the Right are (as one might expect), in favour of subsidies and protectionism that benefits their donors and parties of the Left are in favour of subsidies and protectionism that benefit their donors (i.e. trade unions….except in the case of Britain where both Labour and the Conservatives are in favour of subsidies and protectionism for private donors (‘lobbyists’)).

This is the ‘left-right’ divide. He who pays the piper etc.

And this will never change until party funding changes, but libertarians tend not to be in favour of this as it restricts ‘free speech’, and so a logical trap is created.

The only alternative is that some libertarian party might be swept into office with a radical libertarian agenda. And here is where the libertarian’s view is so different from what is actually the case. There are dozens of libertarian parties in almost every country. They remain small and powerless (i.e. politically…they may control think tanks etc.) because, overwhelmingly, people do not want to vote for them, and this is not because people are misinformed about libertarianism but because they are informed too well.

Libertarians also tend to be fantasically naive (or ignorant) about how markets actually function in the real world (as opposed to how they ‘ought’ to function), how they arose in the first place (libertarians tend to assume that markets have ‘always’ existed, which is false), and how politics and markets interact (not least in terms of the function of wars and empire) but that’s enough to be going on with for now.

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Tim Worstall 08.13.07 at 10:15 am

“But your argument (not logically, but empirically) contradicts itself. To repeat, as Tim Worstall pointed out (and most libertarians are in practice very loathe to admit this), in the modern world, most pressure for subsidies, protectionism, etc. comes not from ‘the left’ but from businessmen themselves, as they see these things (rightly) as being in their own self-interest (this is particularly the case with the military).”

I think you’re slightly misusing the word libertarian there. Cato is probably the poster child for a libertarian think tank in the US (whether funded by Koch as above or not) and even a casual reading of their blog (let alone any of their position papers) shows that they are in no wa “loathe to admit this”. They rail against corporate subsidies, the buying of them through lobbying, with the best of them. Archers Midland Daniel is a particular bugbear.
In the UK, an equivalent organisation might be the Adam Smith Institute (whose blog I write for) and most certainly there is an equal amount of arguing against such favours. It was, after all, Adam Smith himself who warned about meetings of businessmen and conspiracies against the public.

I agree that much of modern day politics is indeed the lobbying for, the buying of, favours by one special interest group or another (unions, companies, etc. etc.) but I tend to regard the libertarians/classical liberals as the (or perhaps one of the) group crying “a pox on both your houses”.

Might not get anyone elected, but then when has truth been an important part of politics?

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Hidari 08.13.07 at 11:24 am

Tim

what’s the ‘classical’ (i.e. Adam Smith) position on, for example, the Competition Commission (previously the Monopolies Commission)?

You seem to imply that the ASI would be against it but surely the existence of such an agency strengthens rather than weakens the state?

And a final point: yes ok perhaps the Cato institute does rail against corporate subsidies. But do they accept that corporations want subsidies not because they are irrational but, on the contrary, because they are being only too rational? In other words, are they arguing that corporations want subsidies because they are being ‘irrational’ and don’t know what’s best for themselves, or do they admit that corporations are entirely rational and that free markets are best ‘for the public good’ (but not necessarily for individual corporations/businesses)?

This isn’t a loaded question: I don’t know much about libertarianism and would genuinely like to know.

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J Thomas 08.13.07 at 11:33 am

Most libertarians agree that we need a court system and police to enforce the laws, since without that we depend on individual initiative to stop corporations that compete by blowing up each other’s factories etc.

And we need somebody — like a legislature — to update the laws.

I haven’t seen the discussion about how to keep rich people from bribing the legislators to make bad laws.

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Hidari 08.13.07 at 11:43 am

‘I haven’t seen the discussion about how to keep rich people from bribing the legislators to make bad laws.’

And how could you possibly have that discussion without discussing strengthening the state, at least in some respects?

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reason 08.13.07 at 1:27 pm

bb … Whatever high minded rationalizations the left might have for ‘progressive’ taxation and the programs it funds, to the politician it’s about one thing, and one thing only: Maximizing votes by pissing off as few people in the getting of the loot, and pleasing as many as possible in it’s distribution.

I think we need to have a more basic discussion about political systems (not all the same), public service psychology (some people really want to have a useful role) and implicit contracts. The split between us is deeper than you seem to think. (I like the bit in the Galbraith link about defining inconvenient outcomes as assumptions.)

The real problem is the acceptance of NATURAL LAW as being something valid and supportable. (Property in REAL nature, is what you personally can defend, by yourself or in alliance with somebody else. If we are not talking about that sort of nature then we are talking about implicit contracts where the right of property comes with constraints and responsibilities.)

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reason 08.13.07 at 1:35 pm

I would also point out to bb that historically democratically systems have a better record of promoting free markets than any other sort of government, in spite of occasionally being corrupted by plutocrats (giving the opportunity for populists to fight back). I know that Libertarians imagine some sort of robot dictatorship, but I personally prefer dynamic, evolving democracy.

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reason 08.13.07 at 1:37 pm

And this doesn’t mean I won’t agree with Libertarians on individual issues. I just happen to think that externalities and rent extraction are much more perversive problems than they do.

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robertdfeinman 08.13.07 at 8:35 pm

Libertarians and funding.
Both the George Mason economics department and CATO have gotten the bulk of their funding from a single person – Charles Koch.

I said above that many pundits were shills. Here is some data that I’ve collected on the connections. You can draw your own conclusions:

Charles Koch and Libertarianism – How to “Buy” a University

Despite my title there is no editorializing on my part in the paper.

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notsneaky 08.13.07 at 11:59 pm

Good God!! A libertarian privately supporting a libertarian university!! What’s next!?! The state supporting state universities?!

Despite the numerous punctuation marks above there is no editorializing on my part in this post.

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robertdfeinman 08.14.07 at 2:09 am

Notsneaky:
GMU is supposed to be a state school, what do you mean by a libertarian university?

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notsneaky 08.14.07 at 2:43 am

It went better with “state university”. “Liberterian department” if you’d like. The point is the same. So what?

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Alex Tabarrok 08.14.07 at 2:49 am

Rich people give to universities all the time – they endow chairs, put their names on buildings and fund science that interests them. Where do you think Harvard gets it money from? The idea that Charles Koch has given $23 million to fund Tyler and I as corporate shills is pretty damn funny. I guarantee you our words are not worth that much! :)

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Joe S. 08.14.07 at 3:09 am

Libertarians are apologists for feudalists, who use the language of the Enlightenment to explain why their funders should remain lords of the castle.
My apologies to non-funded libertarians.

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SG 08.14.07 at 4:20 am

notsneaky, do you seriously deny that the ranks of corporate shills are heavy with libertarians?

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notsneaky 08.14.07 at 5:28 am

I just had a deja-vu of Paul Krugman defending himself against charges that he was a “shill” in the late 80′s early 90′s just because he was, if not completely in support of free trade, at least sympathetic to it, and someone jumping up and down over the fact that someone somewhere who could have somehow benefited from lower tariffs at some point donated some money to MIT while he was a professor there.

Robertfeinman, go back to arguing that libertarians have “authoritarian personalities”. At least that was funny. And at least other commentators on this thread had the simple decency to say “well, we think Libertarian ideas are stupid, but it’s not like they’re super powerful or nothing”.

sg,

I neither affirm nor deny, seriously, half-jokingly, in half-jest, with a raised eyebrow, or a touch of irony, that your question is really freaking stupid.

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SG 08.14.07 at 6:04 am

when people say “shill”, notsneaky, they don`t mean a person defending their ideological view that a particular social arrangement might be better for everyone – like, say, Paul Krugman defending free trade.

No, what we mean is a bunch of cheap, extremely morally flexible prats taking money from very partisan sources to attack the facts behind issues that affect everyone`s health and wellbeing, to the benefit of those partisan sources.

Or perhaps you have been sleeping through the debates about tobacco, DDT and global warming?

Still, you stand up to libertarian form, telling others that their opinions are “really freaking stupid”, and yet being too conservative to say “fucking”. There can be no doubt, half-jokingly or in half-jest, that you are a dick.

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Robert 08.14.07 at 8:53 am

I’ll say this about Austrian economics being propaganda for the rich: who else can afford books in Routledge’s “Foundations of the Market Economy”? Each book is $170.

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Anarcho 08.14.07 at 9:51 am

The fact that this discussion is about “libertarians” and assumes that they are all right-wing free marketeers says it all about the power of money to distort political discourse.

Until the 1970s, libertarian meant in America (as it still does, in other countries) an anti-state socialist like Proudhon, Bakunin, Goldman and so on. For these libertarians, “property is theft” (see “An Anarchist FAQ” — http://www.anarchistfaq.org) The right-wing appropriated the name for their form of extreme capitalism. With the amble funding by right-wing millionaires, the original use of the word has been forgotten.

Needless to say, genuine libertarians do not consider rule by capitalists and landlords as being remotely libertarian or anarchistic. After all, what is “libertarian” about a boss banning unions (i.e., freedom of association and speech) on their property?

If the state interfered as much as bosses do in the lives of their subjects, most people would agree it was tyranny. The task of right”-libertarianism” is to justify the power of property and the authoritarian social relations it generates. A better word to describe them would be “propertarian.”

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Tim Worstall 08.14.07 at 10:40 am

“But do they accept that corporations want subsidies not because they are irrational but, on the contrary, because they are being only too rational? In other words, are they arguing that corporations want subsidies because they are being ‘irrational’ and don’t know what’s best for themselves, or do they admit that corporations are entirely rational and that free markets are best ‘for the public good’ (but not necessarily for individual corporations/businesses)?”

I can’t speak for Cato…can’t really speak for the ASI either, I’m a freelance writer for them, not a policy maker. But taking the risk:

The ASI would say that the existence of the Competition Commission is a good idea in principle (even if not in each and every detail of its operation). There are indeed times and places when the State should be strong and making sure that there is no illegitimate cornering of a market is one of those.

As to companies seeking favours: they are being entirely rational. They’re responding to the incentives in front of them to increase their profits. However, this is to the disbenefit of the greater economy, the public at large. Those special favours are paid for, in the end, by the consumer/taxpayer, it’s a flow from them to the corporation and its shareholders.
As the aim is (in the ASI’s view, and my own) the maximisation of the consumers’ benefits, such rent seeking/subsidy is to be deplored and where possible, done away with. This holds whether it is a corporation seeking such or a union seeking benefits for its members at the expense of that same wider society (or profession, individual etc etc).

In the end, free markets (with some appropriate adjustments: the definition of “appropriate” is where the argument really lies) are best for the public good for they force those different suppliers to compete for the custom of the consumer, preferably without any legal, regulatory or financial thumbs on the scales.

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Brett Bellmore 08.14.07 at 10:53 am

“Most libertarians agree that we need a court system and police to enforce the laws, since without that we depend on individual initiative to stop corporations that compete by blowing up each other’s factories etc.”

Well, yes, that’s the problem with anarchism: Corporations would evolve into states! Until we find a way to stop this, we’re best off having a state around to avoid ending up with a worse state. But acknowledging this is scarcely the same as going, “States are good, rah rah rah!”

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notsneaky 08.14.07 at 1:20 pm

Or perhaps you have been sleeping through the debates about tobacco, DDT and global warming?

Yes, I believe at the time I was busy watching the reruns of My Little Pony.

Or sorry. I should stand up for my Libertarian credentials, make sure I differentiate myself from those stinking conservatives and have the courage to say that I was actually watching the reruns of My Little FUCKING Pony.

There. Does that make you feel better?

And yeah, I got no problem with being a dick to people who obviously deserve it.

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notsneaky 08.14.07 at 1:26 pm

I’ll say this about Austrian economics being propaganda for the rich: who else can afford books in Routledge’s “Foundations of the Market Economy”? Each book is $170.

Oy. Try getting books on the Cambridge Capital Controversy. That, um, Them, Ponies, will run you into 700$ or so. Labor theory of value and all you know. It took a lot of “socially necessary labor” to produce’em. As opposed to the above where it’s obviously the very high level of subjective valuations that makes for high prices.

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SG 08.14.07 at 1:35 pm

ah yes, the classic libertarian rebuttal. A known piece of libertarian crappery is presented; libertarians crawl out from under their rocks to claim it never happened; when specific examples of libertarian crappery are provided, they snidely avoid the example with a petty aside. And of course, they find a way to call their interlocutors names.

Charming as ever. But you know notsneaky, I have this sneaking suspicion that if we were arguing in person you would never have told me I was “freaking stupid”. Or said I deserved to witness the spectacle of you being a dick (which is an insult to me how, precisely?). I think this style of argument must be a libertarian stock in trade. Comes from being dweeby economists in real life, I have no doubt.

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notsneaky 08.14.07 at 1:48 pm

You think I was just joking, but it’s true. It’s all propaganda for something or other:

http://www.ifilm.com/video/2744648

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notsneaky 08.14.07 at 1:59 pm

sg,

If we were arguing in person I’d call you “freaking stupid” and then maybe, if you’re purty, offer to buy you a beer. Ummm… . You know, you’re the one who brought up this “dick” thing, I just played along. And now you’ve brought up another serious charge – wait… you also wrote that first paragraph which doesn’t make any, um, fu.., no, freakin’, sense whatsoever – and maybe I should address it. Hmm, yawn, No. Anyway. I believe what you called me was Dweeb.

Sure. Why not. Guilty as charged. I’m a dweeb. You feel better now sparky? Can I admire your non-economist real-life biceps sometime?

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Robert 08.14.07 at 2:01 pm

“notsneaky” is being silly. Cohen and Harcourt’s expensive collection is obviously targeted at sales to libraries for their non-circulating references, not individual academic researchers. Not that I don’t think both sets are too expensive.

And I don’t know what the Labor Theory of Value has to do with anything.

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robertdfeinman 08.14.07 at 2:51 pm

I was trying not to get into Alex and Tyler’s behavior/motives/funding on their own web site, I do have a white paper I’m working on about that:
Charles Koch and Libertarianism.
But since Alex decide to defend himself I’ll summarize my general feelings on the subject of “shills”. I’m not stating that they are shills in the sense that they think I mean, we can leave that for another time and place.

1. There is a movement in the US which is commonly called “libertarian”. This may be a perversion of the original use of the term, but it’s in common use and makes a handy shortcut. So to all the objectivists, Randians, anarchists or whatever – sorry, but you get painted with the same brush.

2. This movement is funded by a small set of extremely wealthy individuals. I believe that Charles Koch really holds these philosophical views, but many others in his circle are buying intellectual cover for what is essentially an autocratic view of the world.

3. Those who get their funding from this group have much more visibility than they would if they weren’t funded by deep pockets. See how many people pay attention to the work of Henry George as a comparison.

4. Those who earn their livelihood from the largess of an ideological backer are not independent agents. If they stray from the ideological positions of their backers they quickly find themselves out the door and being attacked by their former colleagues. I’ll skip citing the host of recent examples.

5. There are those who then follow the lead of the intellectuals. They think (being libertarians) that they are independent spirits and take offense when I say they are authoritarian followers. But one only has to look at their response when one of their idols is attacked. They need to “believe”. This is true of all ideologues, left, right and libertarian. It’s a personality trait.

So to summarize with an economic argument:

1. The super wealthy are acting rationally they are trying to preserve their wealth and privileged position by spending some of their money on activities towards this end.

2. The pundits are acting rationally, they are getting paid for doing the bidding of their sponsors. They may think they are independent, but without the millions used to set up the institutions where they work they would most likely be doing something else. Libertarianism is a fringe discipline which doesn’t exist without financial support from a self-interested group.

3. The followers are not acting rationally (in the economic sense). They are not getting paid for being a cheering section, they are not members of the super wealthy class and their interests are diametrically opposed to these people. The chances of becoming a billionaire are essentially zero and the money that the wealthy keep could be used to benefit society more generally. Even Ayn Rand stated that people should look out for their own self interest. The fan club doesn’t even follow the advice of one of their key philosophers.

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SG 08.14.07 at 3:18 pm

notsneaky, my point is merely that in real life most people are too polite to divert a conversation away from an inconvenient fact by calling their interlocutor stupid. I’m sorry if by extending this (perhaps too charitable) assumption to you I gave you the mistaken impression that there was some kind of boast about my biceps involved. You don’t have to be touchy about it though – just answer the original question (or ignore it, if you really honestly think that it is so mind-bogglingly stupid).

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notsneaky 08.14.07 at 4:18 pm

“notsneaky” is being silly.

Of course. But so is arguing that one can determine the relative affluence of some ideological group based on a price of some particular book. Hey, Bastiat is free on the intranets. In the true language of liberte no less:
http://bastiat.org/fr/les_deux_haches.html

All them papers you link to are not. Does that mean anything? No.

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notsneaky 08.14.07 at 4:26 pm

sg, i guess this needs to be spelled out for you. Your question was in the classic “do you deny that you still beat your wife?” spirit, hence not even worthy of the mocking attention that I’ve given it so far.

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J Thomas 08.15.07 at 3:28 am

notsneaky, do you seriously deny that the ranks of corporate shills are heavy with libertarians?

Imitation libertarians? Libertarian poseurs?

It’s usually embarrassing when philosophies etc are called to atone for the crimes of their proponents.

If I ever come up with a wonderful idea to improve the world by encouraging people to practice simple decency, and then somebody tries to take over the world and gets billions of people killed in the name of my idea, I am going to be pretty upset. At least if I survive to hear about it.

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SG 08.15.07 at 4:01 am

yeah notsneaky, if the question were presaged by presentation of a medical certificate, photos of the bruises, and a signed confession of a history of beating. Then “do you deny that you still beat your wife” is a slightly different question, no? Especially if the person being asked the question had popped up at a public discussion to imply that it never happened, or it’s normal behaviour or something.

Libertarians are shills. Their leading “thinkers” (if such a word can be applied to a rabid ideology) are paid by big companies to defend those companies’ interests. The unpaid libertarians all cheer on the deceptions and thuggery of their paid counterparts, and accept everything they are told unthinkingly. The paid shills routinely accuse scientists of making up science in order to get money from the government, but their cheer squad get very upset when the same accusation is made of them. In the process of engaging in this dirty little circle jerk, libertarians have attempted to drag the reputation of whole branches of science and public health through the mud.

This is all well known, except apparently to libertarians and their fellow travellers, who seem to think that money only corrupts when it is given by governments to scientists.

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Robert 08.15.07 at 8:15 am

“notsneaky” and I are agreed. Neither of us thinks much of the other’s attempts to tell jokes – E.g., my 93.

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reason 08.15.07 at 9:06 am

J. Thomas

If I ever come up with a wonderful idea to improve the world by encouraging people to practice simple decency, and then somebody tries to take over the world and gets billions of people killed in the name of my idea, I am going to be pretty upset. At least if I survive to hear about it.

Sounds like Karl Marx to me. Do you have somebody else in mind?

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tzs 08.15.07 at 2:13 pm

Reason, sounds like a lot of religions as well. I still think I’ll put the death rate of Christianity up against the Marxists.

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notsneaky 08.15.07 at 4:14 pm

I think we were just joking past each other. For what it’s worth I knew you weren’t being serious and replied in the same spirit but then it occurred to me that quite likely some people around here might take that at face value, hence my later comment.

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J Thomas 08.16.07 at 6:38 am

Reason, I don’t have any particular libertarian founder in mind, but I can imagine there have been honest prominent libertarians who would be appalled at what the fake-libertarian shills are doing to the name “libertarian”.

There are probably Republican founders who’d feel the same way.

FWIW, I believe it would be possible to build a workable libertarian society that wasn’t particularly a plutocracy. It would require a legal system and a method to update the laws, etc. It might have various problems we don’t have, all of which are probably solvable. For example, rather than apply eminent domain to build railroads and such, they might have lots of low-flying dirigibles that are dragged by cables from a series of discrete towers. Something along those lines might work as well as railroads or even better.

But the central thing that makes it fail, is that people aren’t raised to live in a libertarian society. People are raised with a family structure that prepares them to live in a monearchy. Every libertarian I’ve known well, grew up in a family where the father was overbearing.

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