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What is the Classical Liberal's answer to Corporate America's co-optation of government?

A friend who's exploring Libertarian ideas just wrote to me with the question, "What is the Classical Liberal's answer to Corporate America's co-optation of government?". I thought I'd give my answer here so others could correct me or elaborate.

Classical Liberals recognize the problem of business influence on government, but refer to it by different names than do members of the left. The Classical Liberal stubbornly insists that "Capitalism" is given its original meaning--an economic system where capital is held privately and transactions can occur between willing sellers and buyers without government intervention. By definition, this should exclude collusion between business interests and government, which Classical Liberals will typically refer to as Corporatism, Mercantilism, or Fascism.

The Classical Liberal recognizes that all humans want to fulfill their goals in life--whether these are as simple as being fed and sheltered, or as complex as achieving world-wide literacy. Classical Liberals distinguish between two methods of realizing these goals--either through productive effort and trade with willing partners, or by using force to steal, defraud, and extort. The first method respects the life, liberty, and property of others, the second does not.

Government, by definition, is that organization which has a monopoly on the legitimate initiation of force within a geographic area. Inherently, it must use force and the threat of force to impose its rules on others, no matter how these rules were derived. The minarchist believes that government action should be limited to only enforce those rules that protect life, liberty, and property. The libertarian anarchist believes that it is never legitimate to initiate force, and thus all governments are illegitimate (libertarian anarchists do allow for non-monopoly organizations to respond with proportional force in order to protect the individual).

Ideologies of the left attempt to limit government-business collusion by increasing the power of government. They promote government as the antagonist of business and suggest that greater regulation of business by government could put an end to collusion. This is puzzling, since government is at the same time a party to the collusion and the regulator of the collusion. To be fair, the collective term "government" includes a lot of different individuals, some of whom could be guilty of collusion and some of whom could be investigating and punishing collusion; the fact remains that whoever can secure control of the monopoly regulator can act without fear of regulation.

The Classical Liberal takes issue with colluding businesses, but not with business per se. Those businesses whose members neither commit crimes nor contract anyone else to commit crimes on their behalf can only continue to exist through productive effort (or by the savings of past productive effort). The focus of the Classical Liberal in stopping collusion is that institution that is committing the harm--the government enforcers who threaten to fine and jail whomever does not follow the rules born of the collusion.

In a Classical Liberal society, those businesses that committed crimes would be prosecuted at the request of the victims of those crimes. Those businesses that did not commit crimes, but merely showed poor taste--say the suppliers of puppy-skin coats--would be regulated by the market. The more objectionable the business, the fewer individuals who will want to deal with them, either as customers or suppliers.

To see how important the definition of "Capitalism" is to understanding this issue, watch this discussion between leftist Michael Moore and a Classical Liberal GWU student:


Democracy for the Modern Era

Democracy, government accountable to the Will of the People: many set it on a pedestal, as the highest ideal of government, or even morality. Others call it mob rule, two wolves and a lamb deciding what to have for lunch. I stand in between. Democracy may be mediocrity, but given the nasty predilections of many monarchs and juntas, I’ll take mediocrity – at least as long as nations are large enough to make government shopping prohibitively expensive. If government is to be a natural monopoly, let it be a consumer coop.

Our democracy has many problems because it isn’t. We don’t have democracy at the national level. We have a representative republic. Given the size of congressional districts and the enormous advantages of incumbency, our republic is not all that representative. Special interests, political parties, and the civil service are heavily overrepresented.

This is not to say I favor direct democracy. Legislation takes time, even for limited government. And why spend the time if your vote is only one of millions? Rational ignorance is no way to run a nation. So I’m game for choosing representatives, but I’d like a real choice.

Under our current system we usually get stuck with two choices: a Democrat and a Republican. This is not the fault of unfair ballot access laws or a sinister conspiracy by The Duopoly. This is a result of the plurality-take-all voting system we use for federal (and most state) elections. Put three or more viable candidates on a ballot and plurality-takes-all breaks down. Consider this ballot in a conservative district:

  • Rudolph Giuliani
  • Newt Gingrich
  • Nancy Pelosi

If conservatives split their votes between Giuliani and Gingrich, Pelosi wins, even though conservatives are a majority. This is hardly representative. And so, conservatives try to line up behind one and only one candidate before the general election. (I’ll leave it to the reader to devise a converse scenario for a liberal district. I’ll stick to this same conservative scenario for the rest of this article for brevity’s sake, not to endorse conservatism or the Republican Party.)

Most viable/moderate Libertarian candidates come off sounding more conservative than liberal, and so they rob more votes from the Republican candidate. A maxed out Democratic donor could thus aid his cause by donating to such Libertarians. This is rather perverse. And so, the people usually ignore third party politicians even when they aren’t on the fringe. The people rationally vote for the lesser of two evils.

The standard American ballot allows the user to express his (positive) opinion about only one candidate per office. If there are only two candidates, this implicitly provides an opinion on the second candidate. With three or more candidates, the missing information is significant. In the scenario above, a Gingrich voter cannot express a preference between Giuliani and Pelosi.

Many election reformers propose some form of ranked choice ballot to provide the missing information. A conservative voter could thus mark the above ballot:

  • 2 Rudolph Giuliani
  • 1 Newt Gingrich
  • 3 Nancy Pelosi

Counting such ballots is surprisingly tricky. Political scientists have devoted thousands of big-brain hours to the problem with no satisfactory solution. The gold standard solution is the method of Condorcet (which was used by the Free State Project to choose New Hampshire). Under Condorcet Voting, we look at each pair of contestants: Giuliani vs. Gingrich, Gingrich vs. Pelosi, and Pelosi vs. Giuliani in this scenario. We can take the ranking from each ballot and assign the vote to one of the two candidates in each pairwise contest. The ballot above would go to Gingrich, Gingrich and Pelosi respectively. If Gingrich beats Giuliani overall and Gingrich beats Pelosi, the Gingrich wins – which might be the case for a solid conservative district. However, if the liberal minority overwhelmingly prefers Giuliani over Gingrich, and moderate conservatives split, then Giuliani wins. The liberal minority doesn’t get their preferred candidate, but they still have influence. The entire district is in some sense represented. This is unifying.

Alas, Condorcet counting is confusing. A two-dimensional table is required to display voting results. This is hard to read and takes up scarce newsprint area. But far worse, Condorcet counts are not transitive. We could get Gingrich beats Giuliani, Giuliani beats Pelosi and Pelosi beats Gingrich! This is a recipe for civil war!

Instant run-off is simpler, and more familiar, than Condorcet. Unfortunately, it leads to the same two-party duopoly as our current system. Moreover, it can produce perverse results. Suppose most conservatives pick Gingrich, Giuliani, Pelosi; liberals pick Pelosi, Giuliani, Gingrich. Moderates divide between Giuliani, Pelosi, Gingrich and Pelosi, Giuliani, Gingrich. Under instant run-off, Giuliani loses in the first round. If moderates plus liberals outnumber conservatives, then Pelosi wins, even if conservatives outnumber liberals. Our current system of primaries, where in this case conservative voters could consider the electability as well as the desireability of the Republican during the primary, is less perverse.

Fortunately, a better system exists: Score Voting. Score Voting is how multiple judges decide between multiple contestants. If you’ve ever watched figure skating, high diving, gymnastics, or a beauty contest, you’ve seen Score Voting in action. Each judge assigns a numerical score to each contestant. The scores are added up or averaged and the contestant with the highest score wins. Score Voting is also how most schools pick their valedictorian. Grade points are scores. We do a better job of choosing beauty queens and top figure skaters than we do choosing our president and congresscritters.

Score Voting is an old system – for judging contests – but it is largely forgotten in a political context. The only political context I know of is the ancient Teutonic tradition of beating on shields in favor and shouting down in opposition to a measure or candidate. Score Voting is too much work for counting thousands of votes in the days of hand-counted ballots and so it disappeared in the political context. In the computer age, Score Voting is very easy to implement, however, so it is high time to give it a new try.

Mathematician Warren Smith is leading the charge to bring Score Voting back for political contest. His Center for Range Voting web site features in-depth analysis of Score Voting vs. other systems, and how Score Voting defies Arrow’s Theorem. (Range Voting was his original name for this system.) Take special note of his simulation studies, on how Score Voting minimizes Baysian regret. This is rather important. When Baysian regret gets too high, people die!

Consider a nationwide ballot in Iraq featuring the following candidates:

  • A Shiite extremist
  • An Arab Sunni extremist
  • A Kurdish separatist
  • A moderate social democrat
  • A moderate classical liberal

With plurality-take-all voting, the Shiite extremist wins — and the rest of the population takes up arms. Similar failure modes happen in other deeply divided countries around the world. When racial, tribal, linguistic, religious or ideological divisions grow too deep, democracy leads to dictatorship or civil war. This is the sad story of the Third World.

Now, consider the ballot above using 0-10 Score Voting. Shiite extremists may still give their man a 10, but they are likely to give the other divisive candidates zeros. Ditto for Arab Sunni extremists and Kurdish separatists. Under such an environment, unifying candidates such as the social democrat and the classical liberal have a real chance of winning, even though they have small enthusiastic bases. Score Voting favors candidates that are “less bad for all” vs. “best for the biggest gang.” The political culture should become less poisonous over time, and peacekeeping troops can come home after peaceful democracy takes root.

Of course democracy is not the same thing as freedom. In fact, many of you reading this may fear the spread of democracy, as it does lead to lefty governance. The poor outnumber the rich, so keeping the masses from looting the treasury is a problem. Moral arguments can help, but try explaining why are lazy poor people collecting welfare checks is bad while lazy rich heirs collecting interest is acceptable? This is an important objection, and I’ll deal with it in depth in future posts. For now, let’s look at the benefits of improved representation:

  • Incumbents can no longer hide behind fear of the other party. A corrupt conservative can be challenged by a fresh conservative without fear of electing a liberal. Ditto for corrupt liberals.
  • New ideologies can be explored: libertarianism, eco-conservatism, free-liberalism, Georgism, etc.
  • While more ideologies can be explored, they will be explored incrementally. Extremism loses under Score Voting. Excessive change in government is bad. People can adjust to even bad laws if they don’t change. Think of our ever changing tax code or ever changing monetary policies.
  • Score Voting applied within legislatures provides clear accountability. We will know where legislators stand.
  • Score Voting applied within legislatures might allow legislatures to take powers back that they delegated over to regulatory agencies.
  • Improved democracy might allow us to weaken the power of the civil service.
  • More efficient democracy might render state and local government competent enough to forgo help from the federal government. This could be a step to restore federalism.

Some of these benefits are conjectural. Experiments are required. But the experiments can be done. I’ll detail how in a future post.


Comparing centralized defense and distributed defense

We've discussed the success of the passengers of United 93 at thwarting the 9/11 attacks before. I was reminded of it recently when I heard this quote from Ralph Raico's 2009 Mises University lecture "On War and Liberty" (at 27:09):

Some Defense Department! When 9/11 came, after having spent trillions of dollars, the Pentagon was not even able to defend its own headquarters from attack.


Why the U.S. Constitution Works

Mencius Moldbug decries democracy and points to its many failures. Meanwhile the United States struggles to deploy democracy in Iraq, displacing millions in the process. The Ottoman Empire ruled the region with more success. Latin America continues to oscillate between revolution and reaction. Africa went rapidly from post colonial democracy to corrupt despotism and or civil war in most countries.

Cherry pick the right examples and Moldbug’s case seems ironclad. But then there are those notable exceptions, such as the United States, the richest, most powerful nation on earth, and surprisingly, one of the oldest governments. Our democratic republic is more stable than most modern monarchies.

Sure, we have our problems. Our crime is excessive, our prisons overflowing, and or debts piling high. We could be near the end of our golden age, but not if I can help it. Our problems have solutions, no reboot necessary.

The important question is: why are we so successful where so many other countries have failed in short order? Why do we merely get Roosevelts where others get juntas and Hitlers? Why is our Constitution so successful? Can we export this success elsewhere instead of wallowing in bloody and futile nation building exercises?

True, it may have nothing to do with our Constitution. It may be our Northern European heritage. The Scandinavians and Germanic tribes practiced democracy back in ancient times, when much of the civilized world worshipped god emperors. We may be carrying over habits from those times, and have institutions which survived the feudal era making democracy natural for us even as it is unnatural for many other cultures. But then again, Germany sure had a bumpy ride returning to democracy in the 20th Century. The Weimar Republic and the Nazi eras were none too pleasant.

Maybe it’s our extremely Christian roots. Many of the early colonists came to escape persecution and/or establish religious utopias. The Bible contains a law code suitable for anarchy, and America’s Founders were well-versed in the Bible – even those who were not Christians. With a culture well-versed and amenable to in an anarchy-friendly legal code, citizen policing, trials by jury, and amateur legislatures worked well. And when people get their public morals from an ancient book, leaders become accountable to outside powers. No more god emperors. That said, the Puritans had a few mishaps on the way to establishing successful democracy; the early Pilgrims were communists, after all.

Perhaps it was our frontier. With cheap land available out west to all brave enough to fight for it, ambitious members of the working class went west instead of becoming union rabble rousers or socialist revolutionaries. To this day, our more frontier oriented states feature major party politicians which more resemble libertarians; note Mike Gravel and Sarah Palin of Alaska. But I don’t think this is the whole story. Our settled states have most of the population, and our republic has yet to collapse.

Most democracies outside the U.S. are parliamentary democracies. Parliamentary democracies are intentionally unstable. Power flips over radically to whichever coalition musters a majority. Our constitution provides for more stable government. We have the benefits of gridlock: presidents and congresses of different parties. We have powerful courts which reflect the views of multiple past administrations; this filters the effects of political victories over time. We also have a strong civil service system – a stabilizing feature in addition to our constitution – which provides a check on the current chief executive.

The features above are appreciated by many, but they too are not the whole story. Part of the magic of our Constitution lies in the ugly bits: the bits leading to pork, gerrymandering, constituent service, and the two-party system. We have district based elections.

District based elections are the bane of third party politicians. Duverger’s Law states that with plurality-take-all district elections, only the top two candidates are worthy of consideration. Third parties thus get squeezed out. Libertarian Party chairman Bill Redpath has long called for proportional representation. This would allow the Libertarian Party some seats at the legislative tables. It would also give seats to socialists, communists and racists. Proportional representation is a dangerous idea. Adolph Hitler gained his foothold using proportional representation.

District elections keep our elections a bit dumb and uninteresting. They keep principled libertarians out of government. They are also a key to the success of our republic. District based plurality-take-all elections provide the following stabilizing features:

  1. They keep the wacky radicals out of Congress and the state houses. You have to be middle of the road enough to be in the mainstream of your district to get elected.
  2. They weaken the importance of political parties. “All politics is local” is a U.S. mantra. Politicians are more accountable to the people in their districts than the party machines.
  3. Gerrymandering produces safe districts. The resulting perpetual incumbents are relatively immune to the political tides of the moment. Each chamber of Congress has both its commons and its lords.
  4. Local accountability turns legislatures into ombudsmen as much as they are lawmakers. “Constituent service” keeps the civil service on its toes.

This combination of features produces legislatures which are reasonably stable from term to term and are able to function. A legislature fractured by radical factions can be so divided that its members refuse to work together productively. Increased executive power, by dictatorship or junta, is a frequent solution under these circumstances. The constraints of district elections tend to tame radical factions and make them more humane. To have influence, radicals must package their programs into manageable bites, no Great Leap Forwards allowed. They must learn to play nice with others, including moderates and remoras, and work within the squishy two-party infrastructure.

And so, when top-down technocracy was all the rage, and the Great Depression provided a convenient crisis, we suffered the Roosevelt Years. Bad, and borderline dictatorial, but the Constitution survived, albeit bruised and battered. Alas, the same factors which saved us from socialism during those dark years also prevent rapid recovery. The journey back to a limited government republic must be a long one. The debt is high and the entitlement obligations higher. There are no real tax cuts in our near future. Libertarians must embrace this reality and behave like grownups if they want to govern and get us out of this morass.

Our system is stable, but by no means perfect. While moderate parties are good, having only two parties is not. Neither existing party embraces the solutions we need, even in mushy moderate form. The system is now biased to badness, and some reform is called for. Either a new coalition needs to take over an existing major party, or we need a new major party. The latter is extremely difficult, but perhaps not impossible; two possible loopholes in Duverger’s Law present themselves.

But it may be even easier to fix the system than it is to get good people elected under the current system. The reform needed is very mainstream and understandable to the masses. It could be presented to service clubs and civics classes. Moreover, it could be embraced by peaceniks. The reform I contemplate may be effective elsewhere, even in those lands now resistant to stable democracy. Fix the flaws in democracy and nation-building works faster, and our troops can come home.

I’ll detail this important reform in my next post. For now, appreciate what we have and realize we can do better.


Is This What the PUA Types Call a 'Neg'?

Everyone's favorite crazy politician, Silvio Berlusconi, strikes again:

An indignant wave of political opponents, women’s groups and online activists are clamouring for the Italian Prime Minister Silvio Berlusconi to apologise for a sexist insult that he made to a female politician during a live television show.

Mr Berlusconi appeared on the late-night talk show Porta a Porta hours after the country’s highest court stripped him of his immunity to prosecution, reactivating a series of criminal court cases against him.

When he was interrupted by Rosy Bindi, a politician in the Democratic Party, he told her: “I recognise you are increasingly more beautiful than you are intelligent.”

What a charmer!


Punishment and the Public Interest

There's an interesting debate going on in the comments section of econoholic's post on Polanski. I started writing a rather longish comment, before deciding just to post the whole thing here. The crux of the debate seems to boil down to those who think that only a crime victim's wishes count and those who think that society has some interest in preventing certain types of crime. But there is a great deal of confusion among those holding these views.

Curunir and econoholic defend (rightly IMO) the view that society has some interest in preventing certain types of crime. Here's econoholic:

On the other hand, if you accept that you personally lose something if other people are regularly murdered in your neighborhood and not just the direct victim, then there is a sense in which he has committed a crime against others as well, and he should be punished for it at the discretion of these others.

This, it seems to me, is another way of saying that certain types of crimes carry a negative externality. Where murder is rampant in a neighborhood, there is a (really high) cost to be paid by the direct victims of murder. But that cost doesn't full capture the total cost of the action. People fear for their lives, refuse to go out at night, purchase home security equipment, etc. Those are real costs, and while they are admittedly far less bad than the cost of, you know, dying, that doesn't entail that those aren't still costs.

If you take this notion seriously, then it's not absurd to suggest that, to the extent you think punishment is about restitution, criminal sanctions will have two components: the cost of making the victim whole plus the cost of the externality. Or, crudely, sanctions S = Restitution of Victim (RV) + Cost of Externality (CE).

Now several people point out that RV is more important than CE. And I don't deny that at all. In nearly every case RV > CE. Moreover, there are probably a lot of cases in which CE is close enough to zero as to be negligible. But it doesn't follow from either of those general observations that CE is always zero. And I don't think it's hard to make the case that, at least sometimes, CE is reasonably big.

In the Polanski case, we have a strange situation. For in this instance, we have a victim stating that RV = 0. It's hard to see how someone could argue with that. Who better than the victim knows what it takes to make her whole? Certainly not I.

But, and here's the rub, that doesn't automatically entail that CE is also zero. So when Micha asks "Does the people's interest outweigh the interest of the victim?" that's a sort of category mistake. The people's interest isn't something that one weighs against the victim's interest. RV and CE are on the same side of the equation. IOW, even where RV = 0, there may still be a good case for having some sort of sanctions.

I think that this case probably is one in which jail is merited, whatever the wishes of the victim. There is something to be said for living in a society in which being rich or talented or famous or a citizen of another country doesn't allow you to harm others and then prance away as if nothing happened. (And, no, I don't think that being forced to make all your movies in Paris counts as punishment.)

But whatever our arguments about the value of CE in this particular case, it's worth being clear on how the logic of punishment works. The cost of the externalities of crimes and the cost to the victim are additive. It's a mistake to think that because one outweighs the other, the smaller value just doesn't matter.


Rape as political sport

Pandagon complains about conservative complaints about Robert Polanski:

I happened to pop on over to Hot Air, and saw that the conservative bloggers are all of a sudden deeply concerned about rape. Was there a moral epiphany, I thought, and can we count on them to stand firmly against rape in the future?

She tries to paint inconsistency here where there doesn't really seem to be any.

Polanski drugged and viciously raped a 13-year old girl. The Duke lacrosse team stupidly hired a stripper. I don't think these actions speak all that well of Polanski or the lacrosse team, but I can understand (even as a feminist, non-conservative) why one is worth prosecuting and the other is not.

Pandagon tries to point to the hypocrisy of conservatives here, and I don't quite see it. Yes, conservatives do make a big deal out of Chappaquiddick, but then again, Republicans seem to be generally willing to roast their own politicians too. Getting caught cheating on one's wife is not exactly a woman-friendly action, but it only costs you your job if you have an (R) by your name. [Update: OK, this may not be true. See comments.] [I do think Chappaquiddick has added relevance for the elephants since Ted was a donkey. I don't mean to say otherwise.]

While conservatives may be accused of bias, unfortunately it is liberals who must be charged and convicted of outright hypocrisy on this matter. It is liberals who are signing this disgusting petition to free an admitted, unrepentant child rapist and concocting supporting arguments on the internet. Unfortunately, Polanski's identity as their respected artist and/or friend has led them to abandon their respect for the personhood of women.

I am happy to see that feminist bloggers generally see the light. This includes Pandagon herself, Latoya, and Jill. Even among feminists though, not everyone is on board:

"My personal thoughts are let the guy go," said Peg Yorkin, founder of the Feminist Majority Foundation. "It's bad a person was raped. But that was so many years ago. The guy has been through so much in his life. It's crazy to arrest him now. Let it go. The government could spend its money on other things."

I think though, that feminists largely understand the issue and support bringing Polanski to justice.
Q: What about all the others?

A: I think what is going on is that class and racial identity has trumped feminist concerns. When the Duke case came up, the races and classes of the accused and the accuser took center stage and ended up actually harming the case for women claiming rape to be taken seriously when it turned out that everyone got way ahead of themselves. No one much cared that much about making the public take rape seriously. They instead wanted people to listen to a compelling story about race.

When the Polanski case came up, the class of the accused was what matters most. Yes, he was rich, but he was the right kind of rich, making movies about incestuous capitalists and the like (Chinatown). Once more, the actual interests of advancing women's rights took a back seat.

Many people on this issue and others have sold feminism down the river. It is sad because rape is actually a serious offense. It shouldn't really be politicized by anyone for any purpose. These fair-weather feminists have done much damage.


Olympics: Who Cares?

I admit it: I'm usually out of the loop in social and entertainment developments. I didn't know about Jon and Kate until after they broke up. I don't understand the point of Twitter; I don't text message. I still don't understand why so many of my friends were excited about the premiere a new show (Glee) I had literally never heard of.

So maybe I'm just not that connected, but could someone please tell me when the announcement of the Olympics host city became such a big deal, especially outside of sports media? I can see why it was important in my current hometown in Chicagoland. But outside of that, what's the big deal?

Is all of this hoopla because of Obama? If so, I find that pretty sad (why should people care so much what he does), but also fairly hilarious (that it went so poorly for him).

Or am I just totally wrong, and this announcement has always been so major?

(For the record: I'm delighted not to have to deal with the mess Olympics bring.)


Female Unhappiness and Revealed Preference

At Double X, the womens-interest section of Slate, Sharon Lerner argues that America's workplace policies are responsible for a decline in happiness among women:

The United States is a glaring exception in the developed world and beyond in having no mandatory paid maternity leave, no nationwide childcare system, few flexible work options, and, as we’ve heard lately, no universal health coverage. So while mothers in the Czech Republic can choose between having their paid leave stretch either from one to three years after giving birth, and every French parent can count on low- or no-cost preschool, women in the United States are bearing the brunt of working motherhood with far fewer supports.

It's certainly a plausible-seeming theory. But it directly contradicts the paper from which the factoid about womens' happiness is taken. Justin Wolfers and Betsey Stevenson are quite explicit about their findings:

There are no statistically significant differences in the trends for women with and without children nor are their differences between these groups in the trend in happiness for men (or the subsequent trend in the happiness gap). Along with the decline in marriage has come a rise in single parenthood, both through growth in out-of-wedlock births and through divorce. Thus, we disaggregate the fertility results to consider trends in happiness separately among single parents and married parents, and, to account for the duel burden of working parents, between employed parents and non-employed parents. Once again, we see similar trends in happiness across these groups, casting doubt on the hypothesis that trends in marriage and divorce, single parenthood, or work-family balance are at the root of the happiness declines among women.

Moreover, it's a bit strange to look to this study for support for European policy. Virtually the same trends are observed in Europe as in the United States. (Note: While women in the U.S. report a slight decline and women in Europe a small increase, I would caution against reading too much into that; for one thing, the questions asked in the surveys are not identical.)

These increases in subjective well-being have been experienced to a greater degree by men, leading to a pervasive decline in well-being among women relative to men. Indeed, women’s happiness fell relative to men’s in all but one of the countries in the sample, and while the pattern is by no means uniform, the magnitudes are remarkably similar. The only exception to this rule is West Germany, although even there, the data are not clear cut.

The Stevenson-Wolfers paper is fascinating and well worth reading. The cause of this gender gap in happiness is an interesting discussion to have. But this paper doesn't lend easy support to any side of the political debate, weak attempts to do so notwithstanding.

But there's an even more fundamental question I'd like to ask: Is it really true that the United States is hostile to working mothers? The question itself seems ridiculous, in light of European family policies. And yet, here's an interesting tidbit from Lerner's article:

While an American woman still typically has around 2.1 children over her lifetime, in other rich countries, family size has dropped significantly as women have gained access to jobs and education. More than 90 nations throughout Europe and Asia now have fertility rates well below ours. Second, even while we’ve continued to raise sizable families, American women have achieved the very highest rate of full-time employment in the world, with 75 percent of employed women working full-time.

So while the United States is supposedly so bad for working mothers, the women (1) have more kids, and (2) work more. At least superficially, then, it seems as though the U.S. is better for working mothers, not worse.

Now, one can certainly argue against this behavioral argument. Maybe men in the U.S. are so poorly paid relative to Europeans that the women have to work. (I think this is clearly untrue.) Or maybe the lack of universal health care means people don't want to risk only having one person with employer-provided insurance (more plausible to me). But the burden of proof is clearly on those who claim the U.S. is on a whole worse for working mothers, since so many more of them seem to be choosing the lifestyle. And the question of how the U.S. might really be better for working women is an interesting one, but one I think I'll defer, since this is getting long already.


Personal Effect of Government Shutdown

In the news recently, there have been talks of possible government shutdowns at the State and National level if a budget is not passed by the deadline.

How would a government shutdown affect you? Would you even notice if the government shut down for a short time? Who would be most affected by government shutdown?

Anybody from California - You had some budget issues recently, could you share how it actually affected you?


In Defense of Democracy

In perusing the Seasteading Institute’s website, I came across a blog ecosystem challenging democracy (including democratic republicanism). Interesting stuff, but I find the suggested alternatives – monarchy, dictatorship, colonialism – to be rather unsettling. At times these systems do work better than democracy, but their failure modes can be most catastrophic. Indeed, even in equilibrium such governments can be very unpleasant. I’ll take W. Bush or Barack Obama over a shogun or pharaoh any time.

Democracy is not great, but it is not horrible. Democracy is mediocrity – by definition. At least, democracy represents the median when it works. Actual implementations can diverge from the median, sometimes catastrophically. But these are not failures of democracy per se; these are failures of particular implementations. Many implementations of democracy could use some serious reengineering. Even the U.S. system could use significant fixes, though it is more stable than most parliamentary forms.

In a deeply divided society, however, the median has little support. In such cases tribal anarchy, empire, or a redrawing of boundaries might be preferable to countrywide democracy. Such are not the conditions in the United States nor in most other First World countries. To suggest a “reboot” or “reaction” is typical libertarian wishful thinking, in the tradition of Atlas Shrugging or the unmasking of the Rockefeller/Rothschild axis. (Seasteading and Free State migration are considerably more realistic options.)

Given that at least one writer on this website has taken part in this attack on democracy, I decided to join this community in order to enter the discussion. For this is a very interesting discussion, much more so than the eternal quibbles among LP partisans. Mencius Moldbug, in particular, is a most entertaining writer.

So, let us consider some of the failure modes of democracy:

  1. The masses vote themselves a free lunch.
  2. Special interests vote for special privileges.
  3. The civil service becomes independent of its democratically elected bosses.
  4. The elected chief executive uses his executive powers to become tyrant. (Huey Long, innumerable El Presidentes.)
  5. Warring tribes use the democratic central government to smash rivals.
  6. The dominant religious faction uses the government to persecute rival religions.
  7. A radical faction (Nazi, communist) seizes control using the democratic process to get a foothold.
  8. Losing factions give up on the process and start a civil war. (U.S. Confederacy, and the near breakdown after the Florida recount.)
  9. Rotation in office results in a churning, contradictory legal system. (U.S. tax code.)
  10. Vote buying results in perpetual deficits, eventually bankrupting the government. (Our current looming crisis.)
  11. Two-party systems lead to one-dimensional thinking. (Particularly bad in the U.S.)

Most of these problems can be fixed – incrementally. We can get there from here; no reboot necessary.

Of course, “there” is not libertarian paradise. Democracy is mediocrity. But mediocre government is good enough to live a good life. And if the laws are relatively stable, the people can adapt to the laws, even bad laws.

And for those willing to work for something better, there is always separation. If the median is libertarian, then even democracy will result in a libertarian government. But to achieve such separation, it still behooves freedom lovers to make the U.S. government less bad. Currently, it is broke and aggressive, unlikely to tolerate seasteads or free states.

To this end, I will address possible fixes in future posts.


Virtual Worlds and the DMCA

Well, it seems that the metaverse is all a-twitter about how Linden Labs, the coding authority behind Second Life, is being sued under the DMCA... but I've heard nary a peep of this case in the usual cyberlibertarian circles yet. I guess the underlying reason may be that this seems like a pretty typical application of that law once one looks past the novelty of the "virtual worlds" element to it: Service providers have to respond to takedown notices by IP holders, and not doing so can get you sued. Voila.

An analysis of the case's legal merits can be found on the Second Life Herald, but I find it disappointingly superficial. Firstly, I highly doubt that a reading of the ToS which implies that individuals completely surrender their copyright protections in Second Life when they upload content would be enforceable. Secondly, even if this were the case, one would have to interpret the infringement by third parties as having been licensed by Linden Labs, which seems like quite a stretch. Third, it wouldn't address the issue of trademark infringement, which is an important part of the lawsuit overall.

I imagine that this dispute will be resolved by Linden Labs agreeing to take a more active role in dealing with knockoff goods in Second Life. The main question is how costly this will end up being, and how those costs will be passed along to Second Life's users. One could actually imagine a trademark registry being relatively simple to add to the client... for example, if a user trademarks a term, it'll appear in a special font when they use it or make an object that uses it, and the font will indicate authenticity. Registration fees could cover the review process and maybe even a little extra. I won't claim that this issue is a no-brainer to resolve (I'd be very surprised if this ideal hasn't been discussed before), but I doubt that Linden Labs has any real interest in allowing for massive trademark infringement to run rampant. Maybe my simple solution wouldn't satisfy trademark-holders, but the nice thing about being able to implement rules and institutions at the code layer is that they can be very costly to circumvent.

As a tangential note, I'm consistently amazed at how issues of virtual world economics will induce even tech-savvy individuals to express disbelief in the notion that virtual goods can have real monetary value to people. It's a stark reminder that subjective value theory really, really runs contrary to the intuitions of most people.


Disappointed with Rich Trumka, AFL-CIO's new president's choice of words, middle class?

see www.aflcio.org

"Because today the American middle class isn’t being squeezed: We are being crushed. The mirage of prosperity through borrowed money has dissolved—and now we’re left with the reality of a hollowed-out economy and a broken financial system."

He is right about the state of the economy but why does he think his membership is "middle class?" The letter he sent noted:

"John Sweeney has renewed our commitment to organizing, restored our voice in government and reminded us that organized labor isn’t just an institution; we are a movement."

My best guess is that most of the people in Sweeney's old union, the SEIU which pulled out of the AFL-CIO last year (2 years ago?) make less than $10/hour.

Ten bucks an hour is middle class? Our owners have castrated the labor movement by substituting the word, "middle" for "working." 100 years ago, we had rich people, working people (the working poor) and the poor people (the mostly non-working poor?). Now days we have rich people, middle class, and people on welfare.

No one wants to admit that they are "working class" and that is killing us. Half the people who came through Ellis Island "went into service." 100 years ago the middle class were doctors, lawyers, engineers, small business owners and most of them had live in servants. They were maybe 15% of the population with 80% being poor and working poor, the rest, stinking rich.

I propose that (in general) any family that needs two working adults to pay the bills is a working class family no matter what the politicians call us. These days I would classify a family "as middle class" one who paid all the bills with one person's salary and who could afford to send their kids to good private schools.

The husband and wife who work full time to pay the bills and call themselves "middle class" are fooling themselves because they are economically no better off than a working poor family was 100 years ago. They may be living easier but this is because of increased productivity, not because of economic status.


Be careful what you endogenize...

I'll admit upfront to only having a passing and most likely superficial familiarity with the issues explored by the transhumanist community. But as I was (metaphorically) thumbing through the latest issue of H+ magazine, I was struck by how... constrained many of the articles are. Futurology is a notably (and often comically) imprecise "science", and it's easy to be blind to the ways which technological developments will fundamentally transform the issues we face - which tends to lead to comparably absurd extrapolations of current trends into the indefinite future. Some believes that the shift from extensive (Malthusian) to intensive economic growth that began in roughly the 19th century is a temporary blessing which will be reversed by the advent of cheaply-replicable silicon brains.

This might strike one as intuitively undesirable, but not an absurd possibility if brain emulation or general artificial intelligence becomes sufficiently advanced to seriously blur the general distinction between labor and capital. But what strikes me as odd about many of the writers from H+ - and again, maybe this isn't representative of transhumanists in general - is what they want to keep constant in their arguments. Oftentimes there's a clear hedonist tendency to act as if technology will simply make it easier for us to achieve our desires, rather than actually shaping and redefining our desires. This isn't merely to say that the cultural changes which accompany technological growth will change the particulars of what we want, but that the broad nature of our appetites will become an endogenous variable that can be shaped by technology. Who says we'll seek pleasure, as it's currently understood, let alone particular avenues to pleasure such as sex, or "fun", or a satisfaction of our current set of appetites? It seems likely that there would be selection pressures which would favor beings with motivations geared towards self-replication - and in the future, the optimal set of motivations might not be very recognizable as "human" in either their attitudes or underlying architecture. These beings wouldn't be as arbitrary as paperclip maximizers, but I think it's easy to see how inhuman a person who was solely focused on self-replication would strike us as (assuming we could see past the personable attitudes which he would instrumentally employ.) To borrow the jargon of Tyler Cowen, expanding - or innovating, rather - neurodiversity and being able to select over cognitive profiles would have a transformative effect on social evolution, and I'd venture to say that our highly limited abilities to do so are a necessary condition of our being able to construct an ideal of what is "human."

Are transhumanists blind to this possibility - nay, likelihood? I doubt it, and I'm sure I'm beating someone's dead horse here. But if so, at least this post touches on the problematic esotericism (is that a word?) which seems to exist in some circles. In the end, I think the possible desirability of moving beyond the human condition deserves discussions and debate, and I have to wonder whether transhumanists purposely avoid this for PR reasons. Live forever! Expand your mind! Leap tall buildings in a single bound! It sounds nice, but it brushes aside the fact that new technologies really will have even broader social consequences than most critics would recognize. But I do believe that a lot of transhumanists really believe that new technologies will simply make it easier for people to acquire pleasure, either because the technologies will be developed selectively (no one will make AIs / emulated brains with motivations significantly different than ours) or because they're simply blind to the full set of possible consequences of new technologies.

Myself, I do see a hedonistic race to the bottom (so to speak) in the future, and that sometime in my lifetime people these issues will become salient enough that we'll have to seriously consider the merits of allowing the engineering of "alien" cognitive profiles. It'll be an interesting debate, for sure.

(Authors' note: Since this is my first post here, I figured I'd add a quick blurb. I'm a second-year PhD student of economics at George Mason University, and I like being involved in a lot of the discussion that occurs in this section of the blogosphere, and hence I'm trying to make my own contributions as I find inspiration. Future posting will probably be somewhat contingent on the quantity and quality of comments I receive, so don't be shy if you have any thoughts on what I've written... though I'm not sure if I should expect too many readers on this post, we'll see. In any case, that's all for now.)


Friedman Admires Autocracy

Thomas Friedman compares the U.S. with China in the New York Times:

The only way for us to match them is by legislating a rising carbon price along with efficiency and renewable standards that will stimulate massive private investment in clean-tech. Hard to do with a one-party democracy.

Because China has Cap & Trade? Pffft.


Obama's Health Care Speech Tonight

Obama assures America that there is nothing in his plan that will prevent individuals from keeping the insurance they have.

Then in the very next breath he explains at length how he's going to screw the insurance companies - for instance by compelling them to cover pre-existing conditions.

Decoded: You can keep the coverage you have, BUT we're rewriting it.

His great advantage is that there is not much in the way of principled opposition to socialism in American politics. What politician is willing to affirm that hospital emergency rooms ought to be free to turn away patients who can't pay?

And short of that, you agree with the main thrust of what Obama said more or less explicitly tonight: To each according to his need.


Sympathy for Despots

Thomas Friedman recently stuck his foot in his mouth with an ode to the "leadership" of China:

One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century.

Unsurprisingly, this has ignited a fair amount of controversy. And yet, I'm not sure he's 100% wrong, although I couldn't quite express why I thought this way.

John Derbyshire finally put into words why I felt a twinge of sympathy for Friedman's rather outlandish position:

A lot of us, including a lot of conservatives (remarks by Mark Steyn and George Will come to mind) feel that we have become so bureaucratized, lawyered-up, regulated, and PC-whipped that great national projects of the past — the trans-continental railroad, the transformation of Manhattan, the interstate highway system, wars we can actually win in less than a decade, . . . — are no longer possible. Our system has seized up somehow, and no innovation much bigger than a hand-held gadget stands a chance.

To us, stuck in this glue-trap, the sheer ability to get things done is bound to have some appeal, even when the agent of it is a brutish and callous despotism like China's.

Yep. A few weeks ago, I complained about our inability to dream of anything big anymore. But I think I undershot the problem, because I was talking about not being able to think of grand, new things. It's worse than that. It's difficult to even imagine building things that are already in existence.

To borrow a phrase from Arnold Kling, my "most wrong belief" is that productivity growth in construction has actually been negative over the last, say, 75 years.[*] I mention this to people, and they tend to chalk it up to improvements in safety standards, but I'm not so sure. It's difficult to even imagine constructing something like that Empire State Building in sixteen months. I'm not even confident we've made positive progress, let alone approaching anything like the growth we've seen in other manufacturing sectors.

And that's private sector. The situation in government is even worse. Subway systems largely built at the turn of the last century are bigger and better than what we can turn out now. Highway construction is a non-starter in urban areas.

So, like Derbyshire, I can see why Friedman gets frustrated. Unlike him, I don't want to see despotism. Deregulating at the national and state level would be a large step forward in allowing things to actually get built. We will still be stuck with the local NIMBYs, of course, but at least progress will be made somewhere. Maybe.

[*] A friend of mine, on hearing a rant from me on this topic, dug up some statistics and found that the total factor productivity growth rate in the U.S., for the construction sector, was -0.02 from 1970 to 1987. So that's something, although I don't know where that statistic came from.


Immigration and National Health Care

Ryan Avent argues that failing to include illegal immigrants in a national health care plan is shameful:

We’ll treat an immigrant kid with tuberculosis, because we don’t want him infecting our American kids, but you know, we’re not about to acknowledge the basic humanity of people who are enduring many hardships to give their families a better life, just as the ancestors of most of the population of America did.

This whole health care mess is enough to make a man lose his faith in people.

Derek Thompson (from whom I found the above) concurs:

Again, I'm with Ryan all the way morally. I think every person in America deserves health care. I think it's an issue of morality, of human rights. And immigrants are people, too.

I realize that few readers of the DR are both (1) in favor of immigration limits, and (2) in favor of national health care. But those are probably both majority opinions on the left, and so I hope someone here can explain this to me.

Here's my question, and I mean it in a completely non-snarky, honest-inquiry way: How can it possibly be the case that by breaking the law of a country, one acquires a claim against its inhabitants?

Consider: Virtually no one would argue that American taxpayers have an obligation to pay for the health care of a Nicaraguan in Nicaragua[*]. But if that person comes to the United States illegally, then apparently it becomes an obligation of Americans to care for him.

So what is it that the illegal immigrant has done that suddenly entitles him to my taxes to pay for his health care? Thompson thinks he deserves health care because he is "in America". But if health care is a "human right", then surely it belongs to the Nicaraguan while he was in his native land.

Maybe it's because the illegal immigrant contributed to the economy here? But I don't see how that can be the case. Suppose the person had remained in Nicaragua as a farmer exporting his entire crop to the United States. Then he is economically linked with Americans just as the immigrant is, but few argue he is entitled to health care.

Now for something like a communicable disease, then one rationale for providing health care would be naked self-interest. But I don't see how that applies to something like cancer or heart disease.

And I think it violates many (most?) peoples' sense of propriety to reward people for breaking the law, even if they don't agree with it. I spoke to several people during the immigration debates of '06 who were outraged about the amnesty proposal despite being in favor of continued (and even increased) immigration. They just did not think it was right that someone from India who had trouble keeping his visa (to take one example I know of) got nothing out of the amnesty, while someone who came here illegally did. And I have very strong sympathy for that viewpoint. Even if you think bad laws should be disobeyed, does it then naturally follow that legal advantages should accrue to that person? That is very odd to me.

So, I'm posing this question to Avent, Thompson, or anyone else who holds positions (1) and (2) above: Suppose there are two brothers in Nicaragua. Brother A illegally comes to the United States and gets cancer. Brother B stays in Nicaragua and gets cancer. Why should I pay for Brother A's chemo and not Brother B?

I'd like to avoid a discussion here of the morality of immigration restrictions and national health care, if possible. I'm saying that taking those as given, why should illegal immigrants here get preference over, say, those who stayed in their native countries?

[*] I'm going to use Nicaragua as a random example of a foreign country from whom many immigrate illegally to the United States here for concreteness sake, but I do not intend to stereotype.


Freedom, Exit and Question-begging

Jonathan has a nice post up laying out the current debate about charter cities. He cites Arnold Kling's discussion of freedom as exit, calling it "elegant and powerful." I agree with Jonathan that this is a really good defense of exit.

But I also think Will has a good point in his response, namely, that defining freedom as the absence of monopoly may be question-begging. After all, if I live in a world of Hobbesian thugs, it's hard to make the case that I have any meaningful freedom, even if such a world is free from monopoly. It's not, however, question-begging in the way that Will thinks it is.

This, as with many other intra-libertarian debates, really boils back down to the whole rationalist-pluralist distinction. Arnold and Jonathan fall pretty solidly in the pluralist camp. And if you're a pluralist then the freedom = no monopolies construction does sound about right.

But if you're a rationalist, then such a construction is in fact going to look illiberal. Or, at the very least, it's going to look like something that doesn't guarantee liberalism. For those three people here who haven't already read Levy's piece, here's his definition of rationalism:

On the other we see a rationalist liberalism, committed to intellectual progress, universalism, and equality before a unified law, opposed to arbitrary and irrational distinctions and inequalities, and determined to disrupt local tyrannies in religious and ethnic groups, the family, the plantation, feudal institutions, and the provincial countryside.

I think that this is probably what Will has in mind when he calls charter cities illiberal. They fail to do anything like the liberalism that a rationalist champions. Oh, they might do so. But they are hardly a guarantee. But, more importantly, charter cities (and seasteading and exit in general) remove the very possibility of achieving any sort of universal rationalist liberalism. At the end of the day, Exit effectively puts its stamp of approval on "local tyrannies in religious and ethnic groups, the family, the plantation, feudal institutions and the provincial countryside" telling those who don't like it (i.e., any potential reformers) just to leave.

My own sympathies are with Will, though I think that I'm probably less committed to a pure rationalism than he. Exit (arguably) provides more opportunities for experimentation, something that the utilitarian in me approves of. After all, how else are we to discover what really works and what doesn't? But those same utilitarian impulses make me worry about the children we doom to grow up in religious fundamentalist societies where the little girls are taught that they should obey the boys and given little education in anything other than, say, cooking and making babies. And I worry, too, about the little boys who grow up learning that the Jews killed Jesus and that God sanctioned slavery right there in the Old Testament (it comes right after the part about killing the gays).

In liberal democracies, people are welcome to have such views. But they are not welcome to isolate themselves away with others who hold such views. Or, more to the point, they aren't allowed to raise their children in in such isolate enclaves. They must, instead, put those views into the mix of other different competing views. Their ideas must win out in the marketplace of ideas before they can become established law.

Deliberative democracy forces local illiberalism out into the open, where it must compete with (and ultimately lose out to) liberalism. Exit essentially provides protected spaces for illiberalism to continue.

Yes, I know that the argument is that eventually, when liberal experiments succeed and illiberal experiments don't, people will switch. But that assumes that people are capable of recognizing failure and have the basic education and knowledge to switch successfully. Unfortunately, exit doesn't guarantee that those preconditions will obtain.

Anyway, at the end of the day, I think this quibbling is unnecessary. My own view is that something like liberal democracy is going to turn out to be the best way we have to organize a society. Patri's seasteads are all going to turn into smaller liberal democracies with open immigration policies. At the same time, current liberal democracies are going to get more liberal and, eventually, go with open immigration policies. IOW, I expect both approaches will reach the same endpoint. The only debate, really, is over which one will get there first. I see no harm in trying both.


Paul Romer: He's Kind of a Big Deal

I suspect that the majority of readers of the DR are also interested in seasteading and related matters, so this is probably old news to most of the people here. But I think it's important enough to warrant at least a passing mention.

Stanford's Paul Romer recently launched a project very related to seasteading that he's calling Charter Cities. The basic idea is that governments in Third World countries should contract with other countries to manage parts of their territory. Think Hong Kong being run by the British but staffed by the Chinese. True, governments are still involved, so it wouldn't satisfy the ancaps here. But it has the advantage of (maybe) being more acceptable to governments and more likely to take off, and (definitely) easier from an engineering perspective.

(Which is easy for me to say I suppose. Although I'm quite enthusiastic about seasteading, I'm probably not nearly as radical in my beliefs as the average interested person. Singapore + drug legalization/end of conscription is probably good enough for me.)

Now, I'm not sure what Paul Romer thinks of seasteading, although I see that he's speaking at the Seasteading Institute conference this fall. But Charter Cities would be a major step in the direction of "intentional government", and strikes me as one of the most hopeful methods for helping the global poor that I've heard in a long time. I'll probably have more to say about that in some later posts. That alone bodes well for seasteading.

But here's my elitist reason for why I view this as such an incredibly positive development for the seasteading movement. As I see it, seasteading suffers from the view that it's about rich people evading taxes or smoking dope. But even more than that, it suffers from a overall weirdness factor that's difficult to overcome.

But Paul Romer is not some random grad student blogger like yours truly. He's not some kook railing about the evils of fractional reserve banking in 10000 word screeds. He's one of the more important economists alive today, a man who fundamentally reshaped how we think about economic growth. He's mainstream, and he's certain to win a Nobel Prize, probably in the near future.

The engineering challenges of seasteading are high, but perhaps more difficult is developing the idea that the government you live under should be a competitive choice. To the extent that mainstream, respected people promote this view, seasteading becomes more probable. Having people on your side like Paul Romer is a major step in that direction.