Economics Explained — Part IV: Loose Ends and Finishing Touches

This is the fourth installment of a long post. I may revise it as I post later parts. The whole will be published as a page, for ease of reference. In Parts I, II, and III I necessarily omitted many topics that might seem relevant to the principles of economics and their application in the real world. I address a few of those topics in this coda.

Macroeconomics

Macroeconomic aggregates (e.g., aggregate demandaggregate supply) are essentially meaningless because they represent disparate phenomena.

Consider Chuck and Debbie, who discover that, together, they can have more clothing and more food if each specializes: Chuck in the manufacture of clothing, Debbie in the farming and cultivation of foodstuffs. Through voluntary exchange and bargaining, they find a jointly satisfactory balance of production and consumption. Chuck makes enough clothing to cover himself adequately, to keep some clothing on hand for emergencies, and to trade the balance to Debbie for food. Debbie does likewise with food. Both balance their production and consumption decisions against other considerations (e.g., the desire for leisure).

Chuck and Debbie’s respective decisions and actions are microeconomic; the sum of their decisions, macroeconomic. The microeconomic picture might look like this:

  • Chuck produces 10 units of clothing a week, 5 of which he trades to Debbie for 5 units of food a week, 4 of which he uses each week, and 1 of which he saves for an emergency.
  • Debbie, like Chuck, uses 4 units of clothing each week and saves 1 for an emergency.
  • Debbie produces 10 units of food a week, 5 of which she trades to Chuck for 5 units of clothing a week, 4 of which she consumes each week, and 1 of which she saves for an emergency.
  • Chuck, like Debbie, consumes 4 units of food each week and saves 1 for an emergency.

Given the microeconomic picture, it is trivial to depict the macroeconomic situation:

  • Gross weekly output = 10 units of clothing and 10 units of food
  • Weekly consumption = 8 units of clothing and 8 units of food
  • Weekly saving = 2 units of clothing and 2 units of food

You will note that the macroeconomic metrics add no useful information; they merely summarize the salient facts of Chuck and Debbie’s economic lives — though not the essential facts of their lives, which include (but are far from limited to) the degree of satisfaction that Chuck and Debbie derive from their consumption of food and clothing.

The customary way of getting around the aggregation problem is to sum the dollar values of microeconomic activity. But this simply masks the aggregation problem by assuming that it’s possible to add the marginal valuations (i.e., prices) of disparate products and services being bought and sold at disparate moments in time by disparate individuals and firms for disparate purposes. One might as well add two bananas to two apples and call the result four bapples.

The essential problem, as discussed in the next section, is that Chuck and Debbie derive different kinds and amounts of enjoyment from clothing and food, and that those different kinds and amounts of enjoyment cannot be summed in any meaningful way. If meaningful aggregation is impossible for Chuck and Debbie, how can it be possible for an economy that consists of millions of economic actors and an untold variety of goods and services? And how is it possible when technological change yields results like this?

Buffalo (NY) journalist and historian Steve Cichon has an article on the Trending Buffalo website (“Everything from 1991 Radio Shack ad I now do with my phone“) featuring a full-page Radio Shack ad from the Buffalo News on February 16, 1991 (see graphic above). Of the 15 electronics products featured in the Radio Shack ad, 13 of them can now be replaced with a $200 iPhone according to Steve’s analysis. The 13 Radio Shack items in the ad (all-weather personal stereo, AM/FM clock radio, headphones, calculator, computer, camcorder, cell phone, regular phone, CD player, CB radio, scanner, phone answering machine, and cassette recorder) would have cost a total of $3,055 in 1991, which is equivalent in today’s dollars to $5,225. Versus only $200 for an iPhone 5S.

In hours worked at the average wage, the 13 electronics items in 1991 would have had a “time cost” of 290.4 hours of work at the average hourly wage then of $10.52 (or 7.25 weeks or 36.3 days). Today, the $200 iPhone would have a “time cost” of fewer than 10 hours (9.82) of work at the average hourly wage today of $20.35, and just one day of work, plus a few extra hours.

The piece is six years old and out of date in its details. But it’s nevertheless representative of almost all goods that have been produced since the founding of the United States, and almost all means of production.

GDP, in other words, is nothing more than what it seems to be on the surface: an estimate of the dollar value of economic output. Even at that, it’s not susceptible of quantitative modeling. (See “Macroeconomic Modeling: A Case Study” at this post.) Nor can real economic output — as opposed to government spending — be pushed upward by government spending, as I explain at length here.

GDP is certainly not a measure of “social welfare”, as most economists will admit — but for the wrong reason. They point to the “intangibles” that aren’t counted in GDP, one of which is the actual amount of happiness that each person derives not only from things counted in GDP but from the many things that aren’t counted in it (e.g., marital happiness, the love of children for parents, the malaise that prevails in times of prolonged international strife). In admitting that much, economists hint at — but fail to mention — the deeper reason that GDP doesn’t measure social welfare is that there is no such thing.

I will explain the non-existence of social welfare after tackling its running-mate: social justice.

Social Justice

This discussion covers a lot of ground. Little of it fits within my strict definition of economics — the voluntary production and exchange of goods — but it bears directly on two important byproducts of economic activity: income and wealth.

Social welfare (discussed below) is the implicit desideratum of seekers of “social justice”. Thomas Sowell has a better term for it: cosmic justice.

The seekers of cosmic justice are not content to allow individuals to accomplish what they can, given their genes, their acquired traits, their parents’ wealth (or lack of it), where they were born, when they live, and so on. Rather, those who seek cosmic justice cling to the Rawlsian notion that no one “deserves” better “luck” than anyone else. (For a critique of John Rawls’s theory of economic and social justice, see this.)

But “deserves” and “luck” (like “greed”) are emotive, value-laden terms. Those terms suggest (as they are meant to) that there is some kind of great lottery in the sky, in which each of us participates, and that some of us hold winning tickets — which equally “deserving” others might just have well held, were it not for “luck.”

This is not what happens, of course. Humankind simply is varied in its genetic composition, personality traits, accumulated wealth, geographic distribution, etc. Consider a person who is born in the United States of brilliant, wealthy parents — and who inherits their brilliance, cultivates his inheritance (genetic and financial), and goes on to live a life of accomplishment and wealth, while doing no harm and great good to others. Such a person is neither more “lucky” nor less “deserving” than anyone else. He merely is who he is, and he does what he does. There is no question of desert or luck. (I address luck in this post and those linked to therein.)

Such reasoning does not dissuade those who seek cosmic justice. Many of the seekers are found among the “80 percent”, and it is their chosen lot to envy the other “20 percent”, that is, those persons whose brains, talent, money, and/or drive yield them a disproportionate — but not undeserved — degree of fortune, fame, and power. The influential seekers of cosmic justice are to be found among the  “20 percent”. It is they who use their wealth, fame, and position to enforce cosmic justice in the service (variously) of misplaced guilt, economic ignorance, and power-lust. (Altruism — another emotive, value-laden term — does not come into play, for reasons discussed here and here.)

Some combination of misplaced guilt, economic ignorance, and power-lust motivates our law-makers. (Their self-proclaimed “compassion” is bought on the cheap, with taxpayers’ money.) They accrue power by pandering to seekers of cosmic justice and parasites who seek to gain from efforts to attain it. Thus politicians have saddled us with progressive taxation, affirmative action, and a plethora of other disincentivizing, relationship-shattering, market-distorting policies. It is supremely ironic that those policies have made most of persons (including many parasites) far worse off than they would be if government were to get out of the cosmic-justice business.

As Anthony de Jasay writes in “Risk, Value, and Externality”,

Stripped of rhetoric, an act of social justice (a) deliberately increases the relative share … of the worse-off in total income, and (b) in achieving (a) it redresses part or all of an injustice…. This implies that some people being worse off than others is an injustice and that it must be redressed. However, redress can only be effected at the expense of the better-off; but it is not evident that they have committed the injustice in the first place. Consequently, nor is it clear why the better-off should be under an obligation to redress it….

There is the view, acknowledged by de Jasay, that the better-off are better off merely because of luck. But, as he points out,

Nature never stops throwing good luck at some and bad luck at others, no sooner are [social] injustices redressed than some people are again better off than others. An economy of voluntary exchanges is inherently inegalitarian…. Striving for social justice, then, turns out to be a ceaseless combat against luck, a striving for the unattainable, sterilized economy that has built-in mechanisms … for offsetting the misdeeds of Nature.

In fact, “social justice” not only penalizes but also minimizes and ostracizes the kinds of persons who have been mainly responsible for economic (and artistic and social) progress in the Western world, namely, straight, white, heterosexual males of European origin and descent — including, notably, Ashkenzi Jews. Many members of the aforementioned group are themselves advocates of “social justice”, which is just another indication that they are among the spoiled children of capitalism who have lost sight of what got them to where they are — and it wasn’t kow-towing to lunacies like “social justice”.

SOCIAL WELFARE

Some proponents of cosmic justice appeal to the notion of social welfare (even some economists, who should know better) . Their appeal rests on two mistaken beliefs:

  • There is such a thing as social welfare.
  • Transferring income and wealth from the richer to the poorer enhances social welfare because redistribution helps the poorer more than it hurts the richer.

Having disposed elsewhere of the second belief, I now address the first one. I begin with a question posed by Arnold Kling:

Does the usefulness of the concept of a social welfare function stand or fall on its mathematical properties?

My answer: One can write equations until kingdom come, but no equation can make one person’s happiness cancel another person’s unhappiness.

The notion of a social welfare function arises from John Stuart Mill’s utilitarianism, which is best captured in the phrase “the greatest good for the greatest number” or, more precisely “the greatest amount of happiness altogether.”

From this facile philosophy (not Mill’s only one) grew the ludicrous idea that it might be possible to quantify each person’s happiness and, then, to arrive at an aggregate measure of total happiness for everyone (or at least everyone in England). Utilitarianism, as a philosophy, has gone the way of Communism: It is discredited but many people still cling to it, under other names.

Today’s usual name for utilitarianism is cost-benefit analysis. Governments often subject proposed projects and regulations (e.g., new highway construction, automobile safety requirements) to cost-benefit analysis. The theory of cost-benefit analysis is simple: If the expected benefits from a government project or regulation are greater than its expected costs, the project or regulation is economically justified.

Here is the problem with cost-benefit analysis — which is the problem with utilitarianism: One person’s benefit cannot be compared with another person’s cost. Suppose, for example, the City of Los Angeles were to conduct a cost-benefit analysis that “proved” the wisdom of constructing yet another freeway through the city in order to reduce the commuting time of workers who drive into the city from the suburbs. In order to construct the freeway, the city must exercise its power of eminent domain and take residential and commercial property, paying “just compensation”, of course. But “just compensation” for a forced taking cannot be “just” — not when property is being wrenched from often-unwilling “sellers” at prices they would not accept voluntarily. Not when those “sellers” (or their lessees) must face the additional financial and psychic costs of relocating their homes and businesses, of losing (in some cases) decades-old connections with friends, neighbors, customers, and suppliers.

How can a supposedly rational economist, politician, pundit, or “liberal” imagine that the benefits accruing to some persons (commuters, welfare recipients, etc.) somehow cancel the losses of other persons (taxpayers, property owners, etc.)? To take a homely example, consider A who derives pleasure from causing great pain to B (a non-masochist) by punching him in the nose. A’s pleasure cannot cancel B’s pain.

Yet, that is how cost-benefit analysis (utilitarianism) works, if not explcitly then implicitly. It is the spirit of utilitarianism (not to mention power-lust, arrogance, and ignorance) which enables politicians and bureaucrats throughout the land to impose their will upon us — to our lasting detriment.

Conclusion: Politics Trumps Economics

In sum, and despite all of the feel-good rhetoric to the contrary, the United States differs only in degree (but not in kind) from modern communism and socialism. It’s a “social democracy”, in which the demos (mob) dictates the economic (and social) order through its various political patrons. But the political patrons (including the affluent elites who play footsie with them) are in charge, make no mistake about it, and they freely demonize those segments of the demos which turn against them. They are able to do so because the franchise has been so extended (and will continue to be extended by untrammeled immigration) that they won’t run out of votes to advance their essential agenda, which is control of the social and economic affairs of all Americans.

Despite the advent of Donald Trump, and the lesson that it should have taught high-ranking politicos, most of them (regardless of party affiliation) remain wedded to the patronage system because it’s their path to power and riches.

What this all means, as I once explained to a very smart economist, is that politics trumps economics. Ignoring politics (and being ignorant of it) while trying to understand and explain economics is like ignoring the heart while trying to explain the circulatory system without which there is no life.

The Impeachment Effect: A Final(?) Report

The following graph depicts Trump’s approval ratings, according to Rasmussen Reports, since the onset of the failed effort to remove Trump from office by impeachment and trial:

Rasmussen’s polling method covers all respondents (a sample of likely voters) over a span of three days. The gaps represent weekends, when Rasmussen doesn’t publish the results of the presidential approval poll.

The Washington Post broke the story on September 20 about Trump’s July 25 phone conversation with the president of Ukraine. Thus the results for September 16 through September 20 didn’t reflect the effects of the story on the views of Rasmussen’s respondents. Trump’s approval ratings continued to rise after September 20, and peaked on September 24, the day on which the House officially initiated an impeachment inquiry. Trump’s approval ratings bottomed on October 25 but since then — despite much sound and fury, culminating in articles of impeachment and acquittal by the Senate —  they have returned to where they were on September 16, given the range of error advertised by Rasmussen (±2.5 percentage points with a 95-percent level of confidence.).

If the impeachment effort had any effect, it was to strengthen allegiance to Trump among the kind of voter who put him in office in the first place — the person who sees the Democrat party as the enemy of real people. It is far too soon to say that Trump’s re-election is assured. But it isn’t too soon to say that the impeachment effort made it more likely.

FDR’s Fascism, Underscored

I have written before about FDR’s fascistic methods. See, for example, “FDR and Fascism” and  “FDR and Fascism: More Data“. If you’re wondering how FDR could have been a fascist when he was a bitter enemy of the openly fascistic Axis powers, you need to understand what constitutes fascism (which is a thing apart from the dictatorships that prevailed in Germany, Italy, and Japan). A good definition (no longer online) was found in an earlier version of Wikipedia‘s article about fascism:

Fascism is a system in which the government leaves nominal ownership of the means of production in the hands of private individuals but exercises control by means of regulatory legislation and reaps most of the profit by means of heavy taxation. In effect, fascism is simply a more subtle form of government ownership than is socialism.

The two posts that I link to in the first paragraph give some examples of FDR’s brand of fascism. Paul Kengor, in “Franklin Delano Quid Pro Quo“, lays it on with a trowel. There was nothing subtle about FDR’s political thuggery. And it was orders of magnitude worse than Trump’s alleged pressuring of Ukraine for personal political gain:

[I]f you want to see a president who engaged in using explicitly public funds for his own explicitly political interests, look no further than FDR. In fact, no one did it more. What Trump is alleged to have done one time to Ukraine, well, FDR did incessantly to his own citizenry.

To show this, I’ll make things really easy, citing a single source: scholar and historian Dr. Burton Folsom. Among Folsom’s books on FDR, go to just one, his New Deal or Raw Deal?, published in 2008 by Simon & Schuster — a dozen years ago, long before anyone could ever imagine Donald Trump even seeking the presidency. Numerous books on FDR could be cited, but here I’ll stick with just this one.

Starting around page 85 of the book, Folsom addresses the first of at least a dozen examples of FDR abusing his powers and the public purse.

FDR’s chief instrument for shaking down his targets was the crown jewel of his New Deal: the WPA, the Works Progress Administration. The WPA was at the core of the New Deal and FDR’s vast administrative state. Quite literally tons of taxpayer coin went into this massive relief program, which FDR, in turn, redirected for political manipulation. For the record, WPA picked up from where FERA, the Federal Emergency Relief Act, left off. The wildly disproportionate share of FERA money that went to states like Pennsylvania (second only to Illinois in funds received), a state that had gone for Herbert Hoover in 1932, but which FDR hoped to flip in 1936, was scandalous and undoubtedly heavily influenced by the president’s political considerations.

But let’s stick with the WPA, under which FDR reformulated relief from FERA. WPA become the cash cow that FDR would milk not only for public jobs but for political patronage.

“The inefficiency and uselessness of many WPA projects was a serious problem,” Dr. Folsom writes, “but a greater problem was the increased politicization of relief under the WPA.” President Roosevelt had “much discretion in allocation and distributing” WPA money, not unlike a president’s discretion in allocating and distributing foreign aid — though worse because foreign policy is constitutionally the president’s prerogative. As Folsom notes, FDR would choose “which states would receive what,” and the main problem was that this “made relief a game of political manipulation,” at least in the hands of a manipulative president like Franklin Roosevelt. “The problems that plagued the FERA would sharply increase under WPA because more money was at stake,” Folsom notes. “Governors worried that their states would not get their ‘fair share’ of federal tax booty, and so they came to Washington, hats in hand, to curry favor with Roosevelt, Harry Hopkins, who became the WPA director, and other New Deal administrators.”…

“Although Roosevelt and Hopkins said they would not use WPA and other relief organizations to play politics,” Folsom notes, “the evidence suggests again and again that that is exactly what they allowed to happen.”

That’s for sure. And Folsom’s book is full of them. Every Republican (and every Democrat) involved in the Trump impeachment trail should grab a copy of Folsom’s book and read through the examples. Again, I’ll make it easy for them. Here’s a summary:

  • Pages 85–88 are loaded with quid pro quo specifics on the WPA
  • Page 92, last paragraph, is solid quid pro quo on the WPA
  • Page 117, middle paragraph, on Social Security
  • Page 135, the indented quote from Raymond Moley regarding FDR’s attitude
  • Page 157, next to last paragraph, is quid pro quo with FDR and Kansas City boss “Big Tom” Pendergast
  • Page 167 is quid pro quo on IRS investigations
  • Pages 170–77 are loaded with patronage quid pro quo by FDR
  • Page 184, middle of the page, quote from Sen. Hiram Johnson on subsidies for votes
  • Page 185 shows quid pro quo with FDR and the black vote
  • Pages 187–91 show tables regarding votes and where federal funds went
  • Pages 196–200 show federal funds used to court senators in FDR’s court-packing scheme

Read them and weep. It’s disgusting. To repeat all of them here would take several thousand words and constitute a virtual cut and paste from Folsom’s book. Still, I’ll note a few of them.

Harry Hopkins was well aware of the abuses taking place. He received mail regularly from people all over the country who were denied federal jobs or fired because of their political views or affiliations. There were so many of these letters that they’re today housed in state-by-state files at the National Archives in Washington in a large file labeled “WPA — Political Coercion.” The New Jersey file is especially fat. One WPA worker complained, “You are either on the WPA or employed in some government department and by virtue thereof you owe a duty to the [Democratic] Party to do your part in making the canvass.”

Of course.

Gavin Wright, a scholar and economist who carefully analyzed WPA spending state by state, concluded, “WPA employment reached peaks in the fall of election years. In states like Florida and Kentucky — where the New Deal’s big fight was in the primary elections — the rise of WPA employment was hurried along in order to synchronize with the primaries.”

FDR and his Democrat buddies were using WPA funds like a party war chest to help them win elections.

FDR’s own advisers were taken aback by his scheming, his ruthlessness, his ego. Particularly shocked was FDR’s speechwriter, Raymond Moley, who provided an assessment of FDR that we now hear every day from Democrats about Donald Trump. Moley was struck by “the utter lack of logic of the man [FDR], the scantiness of his precise knowledge of things that he was talking about, by the gross inaccuracies in his statements, by the almost pathological lack of sequence in his discussion, by the complete rectitude that he felt as to his own conduct.” He went on, adding that he was appalled at FDR’s “immense and growing egotism that came from his office, by his willingness to continue the excoriation of the press and business in order to get votes for himself, by his indifference to what effect the long-continued pursuit of these ends would have upon the civilization in which he was playing a part.” Moley was aghast at how FDR’s “political habits” were fueled by “the added influence of a swollen ego.” This was so bad, felt FDR’s own speechwriter, that he considered the president “dangerous in the extreme.”

Again, that appraisal sounds like any modern Democrat’s take on Donald Trump: the scant knowledge, the gross inaccuracies in statements, the dangerously swollen ego, the excoriation of the press, the extreme and almost “pathological” behavior, etc. But of course, here was a Democrat on a Democrat — an FDR speechwriter on FDR. And FDR is a hero to Democrats, the patron saint of their party….

Folsom also describes attempts by FDR to influence entire voting blocs, including black Americans. His analysis is backed by hard data, with several pages of tables.

Importantly, these are only some examples from a single book. Almost any non-hagiographic biography of FDR shows abuses like these. His vicious pursuit against Andrew Mellon, for example, again with the power of the public largesse behind him, and his extraordinary effort to nationalize everyone’s gold, are other stunning abuses of power. As to Mellon, the immensely talented former Treasury secretary was just one victim of FDR’s misuse of the IRS to punish, silence, and even ruin his political opponents. I personally knew one of Mellon’s nephews. He was extremely bitter at FDR for what FDR did to his uncle — an honorable man and dedicated public servant who ultimately was fully exonerated, even though the president’s lawyers went after Mellon like a pack of wolves with unlimited government dollars behind them.

“Roosevelt absolutely tried to ruin my uncle’s life,” Mellon’s nephew told me. “It was vicious.”

Folsom unavoidably addresses this as well. Mellon, he notes, became the object of a “massive and unrelenting IRS investigation.” Elmer Irey, head of the Intelligence Unit at FDR’s IRS, later confessed that “the Roosevelt administration made me go after Andy Mellon.” No less than Walter Lippmann would call FDR’s indictment of Mellon “an act of profound injustice.” This was done in large part to discredit the Mellon tax cuts that spurred the vast economic prosperity of the 1920s, given that FDR was literally pushing for a 99.5 percent tax rate on incomes over $100,000. He wanted to smear Mellon in order to smear the Mellon free-market philosophy….

As for FDR’s abusive antics, everyone knew about them, from congressmen to reporters. “The furor over the WPA and vote buying became so loud,” notes Folsom, “that Senator Carl Hatch of New Mexico introduced a bill barring WPA workers, and certain other appointees, from political activity.”

Moreover, most FDR historians know about this side of their man. They shrug it off. They treat their beloved New Dealing president with a wink and grin, chuckling at FDR’s wonderful political “horse-trading.” Like LBJ’s stunts — including spying on the Goldwater campaign in 1964 — they treat it like it’s fun, cute, endearing. (“Oh, yes, good ol’ Lyndon!”) Everyone does it, they shrug — until they judge that maybe a Republican might have done something like it, even just once. Put any one of these FDR–LBJ abuses in the hands of a Nixon or a Trump, and it’s impeachment time, baby….

Naturally, liberals today, in 2020, will ignore this. If you actually get this information in their face, they’ll dismiss it as whataboutism. But that’s nonsense, and unfair. Even if Trump were guilty as charged with the Ukraine, why would you impeach and remove a president for a onetime offense of something that the likes of FDR did daily throughout the worst decade and crisis in American history? It would be damned unjust. I personally couldn’t do it, regardless of whether I liked or voted for Donald Trump. Fair-minded people should understand that. Trump supporters will. And that’s yet another reason why they’ll ignore the Democrats’ histrionics about Donald Trump’s allegedly impeachable and removable abuse of power.

The left’s unremitting defense of FDR in the face of his well known, well documented strong-arm tactics is just another symptom of the left’s moral elasticity.

A Footnote to “Is the GAO Impartial?”

Yesterday I argued — based on experience — that the GAO’s about the illegality of withholding of military aide to Ukraine was politically expedient. Today, along comes Josh Blackman of The Volokh Conspiracy with this take:

The decision does not conclude that President Trump violated the ICA with respect to the withholding of funds. GAO did not, and indeed could not, find that President Trump personally violated the ICA with respect to withholding the funds….

[D]id GAO provide any evidence to show that President Trump personally directed his subordinates to withhold the funds? I hesitate before concluding that the President ordered his subordinates to violate the law, when there is a dispute about what exactly the law requires. Several people have cited Mick Mulvaney’s press conference, wherein he relayed a conversation with President Trump:

Mulvaney: “(Trump’s) like, ‘Look, this is a corrupt place. I don’t want to send them a bunch of money and have them waste it, have them spend it, have them use it to line their own pockets. Plus, I’m not sure that the other European countries are helping them out either.’

This is not evidence that Trump ordered his subordinates to withhold any funding. Trump merely expressed an opinion that he didn’t want to send money to Ukraine, which he viewed as a corrupt country….

Third, did GAO provide any evidence to show that President Trump directed his subordinates to deliberately violate the ICA? This question is premised on a disputed legal issue: was the withholding of certain funds, for some period of time, a violation of the ICA….

Four, did GAO find that President Trump violated the Constitution’s Take Care Clause? No. The decision states, “Faithful execution of the law does not permit the President to substitute his own policy priorities for those that Congress has enacted into law.” Did Trump violate the Take Care Clause? GAO will not say, but they are all too happy to insinuate a constitutional ruling. This driveby dictum is entirely unsupported.

Finally:

There are … unresolved factual questions: (1) what precisely the President did, (2) what he intended to do, (3) when did he do it, (4) what were the consequences (if any) of those decisions, and finally, (4) what were the likely consequences to follow when those decisions were taken. But GAO has not come close to resolving these factual issues or analyzing the complex legal issues in this situation. And it was truly reckless for GAO to suggest otherwise. They offered only a threadbare constitutional analysis, during this heated and polarized time, hours before the impeachment trial began.

Case (against GAO) closed.

A Footnote to “Peak Civilization”

I ended that post with this:

Every line of human endeavor reaches a peak, from which decline is sure to follow if the things that caused it to peak are mindlessly rejected for the sake of novelty (i.e., rejection of old norms just because they are old). This is nowhere more obvious than in the arts.

It should be equally obvious to anyone who takes an objective look at the present state of American society and is capable of comparing it with American society of the 1940s and 1950s. For all of its faults it was a golden age. Unfortunately, most Americans now living (Noah Smith definitely included) are too young and too fixated on material things to understand what has been lost — irretrievably, I fear.

My point is underscored by Annebelle Timsit, writing at Quartz:

The endless stretch of a lazy summer afternoon. Visits to a grandparent’s house in the country. Riding your bicycle through the neighborhood after dark. These were just a few of the revealing answers from more than 400 Twitter users in response to a question: “What was a part of your childhood that you now recognize was a privilege to have or experience?”

That question, courtesy of writer Morgan Jerkins, revealed a poignant truth about the changing nature of childhood in the US: The childhood experiences most valued by people who grew up in the 1970s and 1980s are things that the current generation of kids are far less likely to know.

That’s not a reference to cassette tapes, bell bottoms, Blockbuster movies, and other items popular on BuzzFeed listicles. Rather, people are primarily nostalgic for a youthful sense of independence, connectedness, and creativity that seems less common in the 21st century. The childhood privileges that respondents seemed to appreciate most in retrospect fall into four broad categories:

“Riding my bike at all hours of the day into the evening throughout many neighborhoods without being stopped or asked what I was doing there,” was one Twitter user’s answer to Jerkins’ question. Another commenter was grateful for “summer days & nights spent riding bikes anywhere & everywhere with friends, only needing to come home when the streetlights came on,” while yet another recalled “having a peaceful, free-range childhood.” Countless others cited the freedom to explore—with few restrictions—as a major privilege of their childhood.

American children have less independence and autonomy today than they did a few generations ago.

For many of today’s children, that privilege is disappearing. American children have less independence and autonomy today than they did a few generations ago. As parents have become increasingly concerned with safety, fewer children are permitted to go exploring beyond the confines of their own backyard. Some parents have even been prosecuted or charged with neglect for letting their children walk or play unsupervised. Meanwhile, child psychologists say that too many children are being ushered from one structured activity to the next, always under adult supervision—leaving them with little time to play, experiment, and make mistakes.

That’s a big problem. Kids who have autonomy and independence are less likely to be anxious, and more likely to grow into capable, self-sufficient adults. In a recent video for The Atlantic, Julie Lythcott-Haims, author of How to Raise an Adult, argues that so-called helicopter parents “deprive kids the chance to show up in their own lives, take responsibility for things and be accountable for outcomes.”

That message seems to be gaining traction. The state of Utah, for example, recently passed a “free-range” parenting law meant to give parents the freedom to send kids out to play on their own.”

“Bravo!” to the government of Utah.

Transport yourself back three decades from the 1970s and 1980s to the 1940s and 1950s, when I was a child and adoslescent, and the contrast between then and now is even more stark than the contrast noted by Timsit.

And it has a lot to do with the social ruin that has been visited upon America by the spoiled (cosseted) children of capitalism.


Other related posts:

Ghosts of Thanksgiving Past
The Passing of Red Brick Schoolhouses and a Way of Life
An Ideal World
‘Tis the Season for Nostalgia
Another Look into the Vanished Past
Whither (Wither) Classical Liberalism and America?

Is the GAO Impartial?

The latest hit on Trump’s dealings with Ukraine comes from the GAO (Government Accountability Office, formerly known as Government Accounting Office). Chrissy Clark at The Federalist has the story:

The GAO determined the Trump administration broke the Impoundment Control Act of 1974. This law creates a mechanism for the executive branch to ask Congress to reconsider a funding decision or appropriation that’s already been signed into law.

“Faithful execution of the law does not permit the President to substitute his own policy priorities for those that Congress has enacted into law. [The Office of Management and Budget] withheld funds for a policy reason, which is not permitted under the Impoundment Control act,” said Thomas Armstrong, General Counsel for the GAO.

The report also concluded that the Trump Office of Management and Budget did not provide all the information needed to fulfill their duties.

“[The Office of Management and Budget] and State have failed, as of yet, to provide the information we need to fulfill our duties under the ICA regarding potential impoundments of [Foreign Military Financing] funds,” Armstrong said.

Democratic Senator Chris Van Hollen of Maryland requested the GAO investigation in December.

“This bombshell legal opinion from the independent Government Accountability Office demonstrates, without a doubt, that the Trump administration illegally withheld security assistance from Ukraine,” Van Hollen told the Washington Post.

They key phrase in Van Hollen’s statement is that the GAO’s report is simply an “opinion.” Rachel Semmel, director of communications for the Office of Management and Budget, said the GAO’s decision has no legal baring on the Trump administration.

“We disagree with GAO’s opinion. OMB uses its apportionment authority to ensure taxpayer dollars are properly spent consistent with the President’s priorities and with the law,” Semmel said.

The GAO has a long history of attempting to stay relevant in the executive branch, even long before the current impeachment of President Trump. The GAO also has a record of flip-flops. They were forced to reverse a faulty opinion on legal grounds when they opposed the reimbursement of federal employee travel costs. They have consistently rushed to insert themselves into the impeachment discussion and the OMB is hopeful they will be forced to reverse their opinion again.

Notably, the Obama administration was also at fault under the GAO’s rules. A 2014 report found Obama broke the law when he failed to notify Congress about the impending prisoner swap between Sgt. Bowe Bergdahl and five Taliban leaders.

There was no legal action taken against the Obama administration for not abiding by the GAO in 2014. That same precedent should be upheld during the Trump administration as well. The OMB and Trump administration have no legal duty to abide by the GAO and their legal opinions.

I can tell you, from experience, that the GAO is once again “attempting to stay relevant”, that is, to get the “right” answer — the answer sought by the politician who requested the investigation. In this case, the “right” answer was a finding against the Trump administration.

Almost 30 years ago, the “right” answer was a finding against a kind of think-tank known as a federally funded research and development center (FFRDC). FFRDCs are an outgrowth of the operations research groups that were formed in World War II. The groups were staffed by civilian scientists, who were given access to highly classified and sensitive information that enabled them to provide timely and objective evaluations of military systems, operations, and tactics. The perceived success of the groups led to their continuation and expansion after the war. Their privileged relationship with the various armed services was denoted by their designation as FFRDCs.

Almost everything government does is either unnecessary or wasteful. The glaring exceptions are the provision of justice (when it is in fact provided) and national defense (ditto). Until the early 1990s, FFRDCs had been an integral and valuable part of the defense effort. Their privileged relationship with the armed services enabled them to do something that I would not ordinarily admit: They were superior to private, for-profit analysis firms.

I emphasize were because something happened in the early 1990s to undermine that privileged relationship. The something was a GAO investigation, instigated by some members of Congress at the behest of the Professional Services Council, a lobbying organization that represents for-profit analysis firms.

As the chief financial officer of an FFRDC sponsored by the Navy, I — like many other FFRDC officials — had to respond to long, probing questionnaires from the GAO’s investigative team. There were subsequent interviews to probe the written answers, and I recall that my interview (in company with a Navy rep) lasted at least a few hours.

I was struck by the GAO team’s studied inability to grasp the value of the privileged relationship between FFRDCs and their sponsors. What was the relationship like? And why was it so valuable to the defense effort? To answer the first question is to answer the second one as well.

FFRDCs were “bucket funded”, meaning that most of their funding came in a lump sum instead of being fought for and won project by project The continuity of funding had several beneficial results:

  • Analysts could be hired for their analytical skills; sales skills were irrelevant. This meant, in practice, that Ph.D. and Master’s degrees in quantitative sciences were more prevalent at FFRCDs than at for-profit firms.
  • Analysts could devote their efforts to analysis instead of scrambling for new contracts, often in areas where they had no great expertise (if any).
  • Analysts could work on similar problems for long periods of time, developing expertise and accumulating valuable data along the way.
  • Clients (the offices for which particular projects were conducted) could call on analysts to address emerging issues without having to go through lengthy contracting processes.
  • Funding wasn’t controlled by clients, but by a separate office. Thus there was little if any pressure to get the “right” answers — those that the clients might have preferred.

But all of that was irrelevant to the GAO team, which was bent on emphasizing the obvious fact that FFRDCs didn’t have to compete for contracts. Regardless of the benefits of the arrangement — and the minuscule fraction of the defense budget allocated to FFRDCs — the Defense Department had to change it ways because FFRDCs had an “unfair” advantage over for-profit firms.

The rest is history: FFRDCs were forced into the mold of for-profit firms, and much of the valuable continuity and analyst-client trust was destroyed in the process. “We’re just another contractor now”, is a refrain now commonly heard at my old FFRDC.

And why? Because GAO — certainly not for the first or last time — got the “right” answer, that is, the answer sought by the congressional sponsor of the investigation.

Economics Explained — Part III: The Principles Illustrated

This is the third installment of a long post. I may revise it as I post later parts. The whole will be published as a page, for ease of reference. If you haven’t read “Part I: What Is Economics About?“ or “Part II: Economic Principles in Perspective“, you may benefit from doing so before you embark on this part.

What follows isn’t meant to depict the historical evolution of economies and the role of governments in them. The idea, rather, is to contrast various degrees of complexity in economic activity, and the effect of government on that activity — for good and ill.

Communism: The Real Kind

Bands of hunter-gatherers roam widely, or as widely as they can on foot, with young children and old adults (perhaps in their 30s and 40s) in tow. The hunters and gatherers share with other members of the band what they catch, kill, and collect. The stronger members of the band presumably catch, kill, and collect more than their dependents do, and so they probably take more than their “share” because doing so gives them the strength to do what they do for everyone else.

This primitive arrangement — in which producers are necessarily consumer more than non-producers so that non-producers are able to survive — operates exactly in accordance with the maxim “from each according to his ability; to each according to his needs”. But that is not the system envisaged by Marxists and Millennials, in which the state takes from producers and given to non-producers because it’s “only fair” and in the spirit of “social justice”. Primitive peoples know on which side their bread is buttered, which is a lot more than can be said for modern “communists”, state socialists, and the parasites who believe that the goose will continue to lay golden eggs after it has been put down.

That’s what happens when people without “skin in the game” (i.e., political theorists, pundits, politicians, bureaucrats, naive students, and layabouts) get their hands on the levers of government power. But I am getting ahead of myself and will have much more to say about it later in this post.

Barter: An Economy of Relatives, Friends, and Acquaintances

Imagine a simple economy in which goods are exchanged through barter. Implicit in the transaction are the existence of property rights and gains from trade: The producers of the goods own them and can trade them to their mutual benefit.

There is, at this point, no money to clutter our understanding of the economy’s workings, though there could be credit. One producer, Arlo, could give some of his goods to another producer, Brenda, with the understanding that Brenda will repay the loan with a specified quantity of goods by a specified time.

Credit can exist in this barter economy because its participants know each other well, either personally or by reputation. Credit is therefore more firmly based on trust and knowledge than it is in economies that are more widely dispersed and involve total strangers, if not enemies. But credit always carries a cost because the creditor (a) usually has other uses for the goods (or money) that he lends, and must forgo those uses by lending, and (b) takes a risk that the borrower won’t repay the loan. The risk may be lower in a barter economy of friends, relatives, and acquaintances than in a dispersed, money-based economy, but it is nevertheless there.

Credit in a barter economy can finance investment. If Arlo is a baker and Brenda is a butter-maker, Arlo could offer to give Brenda additional bread in the future (over and above the amount that she would normally receive for a certain amount of butter) while he rebuilds his oven so that he can produce bread at a faster rate. (Here, we must assume that the capacity of Arlo’s oven is a bottleneck, and that the availability other resources — flour, for example — is not a constraint.)

Barter, whatever its social advantages — which shouldn’t be overlooked — is cumbersome. Even with the use of central marketplaces, much time and effort is required to arrange, in a timely way, all of the trades necessary to satisfy even a fairly simple menu of wants: food (of various kinds), clothing (of various kinds), construction services (of various kinds), personal-care services (e.g., haircuts) and products (e.g., soap). It is time and effort that could be put to better use in the enjoyment of the fruits of one’s labor and in the production of more goods (in order to enjoy even more fruits).

Then, too, there is the difficulty of saving in a barter economy. Arlo might stockpile bread, for instance, but how much bread can he stockpile before it spoils or loses value because Brenda can’t use as much as Arlo has on hand? Producers of services face more serious problems. For example, how would a barber save haircuts for a rainy day?

A Closed, Money-Based Economy

We are still in a close-knit economy, that is, a closed one. But money now enters the picture. It eases the task of acquiring goods by allowing the purchaser to acquire them at his leisure (subject to the risk of non-delivery, of course). This is called saving, which is also a form of credit. The purchaser of goods (who is also a producer of goods) needn’t trade all of his output for the output of others. He can defer his purchases, thus effectively giving credit to those who buy his goods while he puts off buying theirs.

How does it work? If Arlo makes bread and Brenda makes butter, Arlo, with Brenda’s consent, can give her some bread in exchange for money instead of butter. (Maybe Arlo doesn’t need butter at the moment, and would rather buy it from Brenda at a later date.) Arlo, at one stroke, is accepting money (as a measure of the value of the goods he can purchase in the future) and extending credit to Brenda.

The value of the money, to Arlo, depends on his confidence that Brenda will deliver to him the quantity of butter that he would have received by trading his bread for her butter on the spot. If Arlo is unsure about Brenda’s ability to deliver the desired quantity of butter at a future date, he will ask for the monetary equivalent of additional butter. This is equivalent to the issuance of credit by Arlo to Brenda; that is, he is giving her time in which to produce more butter, and getting a share of the additional output in return.

A money-based economy is, perforce, a credit-based economy. And the value of money depends on the holder’s assessment of his ability to get his money’s worth, so to speak.

The existence of money enables producers to save a portion of their income in a non-perishable, fungible form. This facilitates investment by, for example, enabling the investing party to subsist on what he can purchase from the money he has saved while turning his time and effort toward improving the way in which he produces his goods, devising new goods that might yield him more income, or even wandering far and wide to seek new buyers for his goods.

Thus money is a beneficial economic instrument — as long as the terms of its use are established by those who actually produce and exchange goods. This included the “middlemen” (i.e., wholesalers, retailers, bankers, lenders) whose services are sought and valued by producers of other goods. As I will discuss later, outside interference in the creation and valuation money will distort the terms of trade between producers, causing them to make choices that are less beneficial to them than the choices they would make in the absence of such interference.

In an economy where there is no outside interference in the issuance and valuation of money (and credit), defaults aren’t distorting; that is, they don’t change the “normal” flow of economic activity. Those who give and accept credit do so willingly and after balancing the risks involved (including the possibility of unforeseen calamities) against the gains from trade. Moreover, other “middlemen” known as insurers come to the fore. For a fee, which is paid willingly by the participants in this economy, they absorb the costs of losses from unforeseen calamities (personal injury and illness, fire, flood, etc.).

An Open, Money-Based Economy

An open economy is simply one in which goods are exchanged across territorial boundaries. This kind of exchange is inherently beneficial because it enables all parties to improve their lot by giving them access to a wider range of goods. It also fosters specialization, so that a greater abundance of goods is produced, given available resources. Though inter-territorial trade can be conducted through barter, money obviously facilitates inter-territorial trade, inasmuch as it is (by definition) conducted over a wider area, making direct trades even more difficult than they are within smaller area.

Inasmuch as government isn’t yet in the picture, there is practically no downside to inter-territorial trade. It is simply an expansion of what has gone before — voluntary exchanges of goods (usually through the medium of money) for the mutual benefit of the parties to the transactions. With government out of the picture, there are less likely to be distortions of the kind that are caused by tariffs and subsidization, both of which are aimed at benefiting the citizens (or elites) of one territory at the expense of persons in other territories.

An Open, Money-Based Economy with Government

It is time to introduce government. I am not suggesting that government is a necessary or inevitable outgrowth of a money-based economy. Government probably came first, in the guise of a tribal leader to whom certain decisions were referred and who was responsible for settling disputes within the tribe and seeing to its defense from outside force.

The point of introducing government here is to highlight its potential economic value, and to draw attention to the ways in which it can destroy economic value — and liberty as well. I must say, at the outset, that government, when it comes to domestic affairs, can do no better than enforce prevailing social norms that not only bind a people but also protect them from each other. Such norms include the prohibition of — and social punishment of — acts that cause harm, including the disruption of economic activity. They may be summarized as acts of force (e.g., murder, battery, theft, and vandalism) and fraud (e.g., lying and deliberate deception). There is a related peace-keeping function that is best performed by a third party, and that is the settlement of civil disputes, which in some cases must be done by government, as a referee of last resort.

The point of government with respect to such acts is to ensure the enforcement and punishment of prohibitions in an even-handed way by a party that is presumed to be impartial. (I won’t get into the many historical deviations from this ideal, but will later address how those deviations might have been minimized.) With the assurance that government will enforce and punish harmful acts, the populace as a whole — including its economic units — can more freely go about the business of life (and business) and spend less time, effort, and money on self-defense. In this way, government can be a boon to an economy, especially one that spans a large and diverse populace of strangers.

Ensuring that the business of business can be conducted freely (within the constraint that otherwise illegal transactions are prohibited and punished), requires the national government to prevent subsidiary governments from erecting barriers to trade between the territories of the subsidiary governments. The national government may, on the other hand, restrict trade between entities inside the nation and entities outside of it, where such restrictions (a) keep dangerous materials and technologies out of the hands of actual or potential enemies or (b) prevent foreign regimes from undermining parts of the national economy by subsidizing foreign producers directly or through tariffs on imports to the foreign country.

Government can also protect the populace (and the business of business) from attacks by outsiders. The ideal way of doing this is to mount a defense that is robust enough to deter such attacks. Failing that, the defense must be robust enough to defeat attacking outsiders in a way the prevents much of the damage that they might otherwise do to the populace and its economic activities.

(The problematic side of peace-keeping, both domestically and against outsiders, is that its costs must be borne in some manner by the people and economic units it protects. Further, those costs must be borne, in many cases, by persons who have some objection to peace-keeping; for example: outright pacifists, bleeding-hearts who loath to believe that certain classes of human beings are more prone to criminality than others, and yet-to-be-mugged innocents who simply believe the best of everyone. That said, there is no “fair” way to apportion the costs of peace-keeping, but there is a fairer way than the is now the case: the imposition of a truly flat tax.)

A government that is limited as outlined above must be subject to several checks if it is to remain limited:

  • A written constitution that specifies the powers of the national government and subsidiary governments.
  • Onerous provisions for amending the written constitution.
  • A judiciary that is empowered to review all governmental actions to ensure their consistency with the written constitution.
  • A mechanism for rejecting judicial decisions that are inconsistent with the written constitution.
  • Regular elections through which qualified voters pass judgment on government officials.
  • The restriction of voting to persons of mature age who have “skin in the game”.

The failure to institute and maintain any of these checks will result, eventually, in a system of government that routinely does more than defend the populace and ensure that the business of business can be conducted freely. In the United States, the lack of oversight of the judiciary and the expansion of the franchise (rather than its restriction) have proved fatal to the otherwise clever design of the original Constitution.

The result is an badly distorted economy, which produces things (or fails to produce them) in accordance with the desires (mostly) of unelected bureaucrats, and redistributes income and wealth (and such antecedents as jobs and university admissions) in accordance with the desires of persons without “skin in the game” (i.e., political theorists, pundits, politicians, bureaucrats, naive students, and layabouts). The economy isn’t only badly distorted, but as a result of myriad government interventions, it produces far less than it would otherwise produce, to the detriment of almost everyone, including the supposed beneficiaries of government interventions.

Macroeconomics

What I have discussed thus far is microeconomic activity — the actions of individuals and firms that result in the exchange of economic goods, either directly or with the aid of money and credit. I have also addressed the effects of government interventions, but mainly in terms of the microeconomic effects of such interventions.

What I have avoided, except in passing, is the thing called macroeconomics, which is supposed to deal with aggregate economic activity and things that influence it, such as the monetary and fiscal tools wielded by government.

Economics Explained — Part II: Economic Principles in Perspective

This is the second installment of a long post. I may revise it as I post later parts. The whole will be published as a page, for ease of reference. If you haven’t read “Part I: What Is Economics About?“, you may benefit from doing so before you embark on this part.

What Drives Us

Humans are driven by the survival instinct and a host of psychological urges, which vary from person to person. Those urges include but are far from limited to the self-aggrandizement (ego), the need for love and friendship, and the need to be in control (which includes the needs to possess things and to control others, both in widely varying degrees). Economic activity, as I have said, excludes matters of love and friendship (though not calculated relationships that may seem like friendship), but aside from those things — which influence personal economic activity (e.g., the need to provide for loved ones) — there are more motivations for economic activity than can be dreamt of by economists. Those motivations are shaped genes and culture, which are so varied and malleable (in the case of culture) that specific knowledge about them is useful only to the purveyors of particular goods.

Therefore, economists long ago (and wisely) eschewed models of economic behavior that impute particular motivations to economic activity. Instead they said that individuals seek to maximize utility (something like happiness or satisfaction), whatever that might be for particular individuals. Similarly, they said that firms seek to maximize profits, which is easier to quantify because profit is measured in monetary units (dollars in America).

Irrational Rationality

Further, economists used to say that individuals act rationally when they strive to maximize utility. Behavioral economists (e.g., Richard Thaler) have challenged the rationality hypothesis by showing that personal choices are often irrational (in the judgment of the behavioral economist). The case of “saving too little” for retirement is often invoked in support of interventions (including interventions by the state) to “nudge” individuals toward making the “right” choices (in the judgment of the behavioral economist). The behavioral economist would thus impose his own definition of rational behavior (e.g., wealth-maximization) on individuals. This is arrogance in the extreme. All that the early economists meant by rationality was that individuals strive to make choices that advance their particular preferences.

Wealth-maximization is one such preference, but far from the only one. A young worker, for example, may prefer buying a car (that enables him to get to work faster than he could by riding a bus) to saving for his retirement. There are many other objections to the imposition of behavioral economists’ views. The links at the end of “No Tears for Cass Sunstein” (Thaler’s co-conspirator) will lead you to some of them. That post and the posts linked to at the end of it also provide insights into the authoritarian motivations of Thaler, Sunstein, and their ilk.

The Rise of Corporate Irresponsibility

Turning to firms — the providers of goods that satisfy wants — I have to say that the profit-maximization motive has been eroded by the rise of huge firms that are led and managed by bureaucrats rather than inventors, innovators, and entrepreneurs. The ownership of large firms is, in most cases, widely distributed and indirect (i.e., huge blocks of stock are held in diversified mutual-fund portfolios). This makes it possible for top managers (enabled by compliant boards of directors) to adopt policies that harm shareholders’ financial interests for the sake of presenting a “socially responsible” (“woke”) image of the firm to … whom?

The firm’s existing customers aren’t the general public, they are specific segments of the general public, and some of those segments don’t take kindly to public-relations ploys that flout the values that they (the specific segments) hold dearly. (Gillette and Dick’s Sporting Goods are recent cases in point.) The “whom” might therefore consist of segments of the public that the firms’ managers hope will buy the firm’s products because of the firm’s pandering. and — more likely — influential figures in business, politics, the arts, the media, etc., whom the managers are eager to impress.

“Social responsibility” fiascos are only part of the picture. Huge, bureaucratic firms are no more efficient in their use of resources to satisfy consumers’ wants than are huge, bureaucratic governments that (at best) provide essential services (defense and justice) but in fact provide services that politicians and bureaucrats are “needed” in order to buy votes and make work for themselves.

The bottom line here is that the satisfaction of consumers’ wants has been compromised badly. And the combination of government interventions and corporate misfeasance has made the economy far less productive than it could be.

The Flip Side of Economics: Failure to Produce

Economics, therefore, is about the satisfaction of human wants through the production and exchange of goods, given available resources. It is also about the failure to maximize the satisfaction of wants, given available resources, because of government interventions and corporate misfeasance.

The gross underperformance of America’s economy illustrates an important but usually neglected principle of economics: Every decision has an opportunity cost. When you choose to buy a car, for example, you forgo the opportunity to buy something else for the same amount of money. That something else, presumably, would afford you less satisfaction (utility) than the car. Or so the theory goes. But whether it would or wouldn’t isn’t for a behavioral economist to say.

Individuals (and firms) often make choices that they later regret. It’s called learning from experience. But “nudging”, government interventions, and corporate sluggishness reduce the opportunity to learn from experience. (Government interventions and corporate sluggishness also prevent, as I have said, behaviors that are essential to economic vitality: invention, innovation, and entrepreneurship.)

Government interventions also incentivize economically and personally destructive behavior. There are many estimates of the costs of government interventions (e.g., this one and those documented quarterly in Regulation magazine) and a multitude of examples of the personally destructive behavior engendered by government interventions. It is impossible to say which intervention has been the most harmful to the citizenry, but if pressed I would choose the thing broadly called “welfare”, which disincentivizes work and is an important cause of the dissolution of black (welfare-dependent) families, with attendant (and dire) results (educational, occupational, criminal) that bleeding hearts prefer to attribute to “racism”. If not in second place, but high up on my list, is the counterproductive response (by government at the prodding of bleeding hearts) to homelessness.

Thus we have yet another principle: the “law” of unintended consequences. Unintended consequences are the things that aren’t meant to happen — but which do happen — when an actor (be it governmental, corporate, or individual) doesn’t think about (or chooses to minimize or ignore) when it or he focuses on a particular problem or desire to the exclusion of other problems or desires. Individuals can learn from unintended consequences; governments and, increasingly, corporations are too rule-bound and infested by special interests to do so.

None of what I have said about corporations should be taken as an endorsement of governmental interventions to make them somehow more efficient and responsible. (The law of unintended consequences applies in spades when it comes to government.) The only justification for state action with respect to firms is to keep them from doing things that are inimical to liberty and can’t be rectified by private action. In an extreme case, a business that specializes in murder for hire is (or should be) a target for closure and prosecution. A business that sells a potentially harmful product (e.g., guns, cigarettes) isn’t a valid target of state action because the harmful use of the product is the responsibility of the buyer, product-liability law to the contrary notwithstanding.

What about a business that collaborates (perhaps tacitly) with other businesses or special interests to prevent the expression of views that are otherwise protected by the First Amendment but which are opposed by the managers of the business and their political allies? There are good arguments for a hand-off approach, in that markets — if they are allowed to operate freely — will provide alternatives that allow the expression (and wide circulation) of “objectionable” views. If anti-trust actions against purveyors of oil and steel (two take two examples from the past) are inadvisable (as I have argued), aren’t anti-trust actions against purveyors of information and ideas equally inadvisable? There is a qualitative difference between economic rapacity and what amounts to a war that is being waged by one segment of the nation against other segments of the nation. (See for example, “The Subtle Authoritarianism of the ‘Liberal Order’“.) Government action to defend the besieged segments is therefore fitting and proper. (See “Preemptive (Cold) Civil War“.)

Economics and Liberty

This brings me to the gravest economic threat to liberty, which is state socialism and its variants: communism, fascism, and social democracy. All of them vest control of the economy in the state, when not through outright state ownership of the means of production, then through laws and regulations that dictate allowable types of economic output, the means and methods of its production, and its beneficiaries. The United States has long been burdened with what has been called a “mixed” economic system, which is in fact a social democracy — an economy that has many of the trappings of free-market capitalism but is in fact heavily managed by governments (federal, State, and local) in the service of “social justice” and various trendy causes.

The most recent of these is the puritanical, often hypocritical, and anti-scientific effort to rescue the planet from “climate change”. The opportunity cost of this futile undertaking, were it conducted according to the dictates of its most strident supporters, would be a vast share of the economic output of the the Western world (inasmuch as Russia, China, India, and even Japan are disinclined to participate), thus demoting America and Western Europe to Third-World status and rendering them vulnerable to economic and military blackmail by Russia and China. (Old grudges die hard.) You can be sure, however, that even in their vastly diminished state, the Western “democracies” would find the resources with which to cosset the ruling class of politicians and their favorites.

Proponents of state action often defend it by adverting to the paradox of collective action, which is that individuals and firms, acting in what they perceive to be their own interests, can bring about a disaster that engulfs them. “Climate change” is the latest such so-called disaster. What the proponents of state action always omit to consider (or mention) is that state action itself can bring about a disaster that engulfs all of us. The attempt to control “climate change” is just such an action, and it is of the more dangerous kind because government programs, once started, are harder to turn around than the relatively modest and inexpensive projects of individuals and firms.

You may think that I have strayed a long way from the principles of economics. But I haven’t, if you’ve been following closely. What I have done — or tried to do — is put economic activity in perspective. Which is to say that I’ve tried to show that economic activity may be important and even crucial to our lives, but it is not the only important and crucial thing in our lives. Economic activity is shaped by government and culture. If the battle to contain government is successful, and if the battle to preserve a culture of personal responsibility and respect for traditional norms is successful, economic activity will thrive and be worth the striving.

Wicked Problems: The Pretense of Rationality

Arnold Kling points to a paper by Horst W. J. Rittel and Melvin M. Webber, “Dilemmas in a General Theory of Planning” (Policy Sciences, June 1973). As Kling says, the paper is “notable for the way in which it describes — in 1973 — the fallibility of experts relative to technocratic expectations”.

Among the authors’ many insights are these about government planning:

The kinds of problems that planners deal with-societal problems-are inherently different from the problems that scientists and perhaps some classes of engineers deal with. Planning problems are inherently wicked.

As distinguished from problems in the natural sciences, which are definable and separable and may have solutions that are findable, the problems of governmental planning-and especially those of social or policy planning-are ill-defined; and they rely upon elusive political judgment for resolution. (Not “solution.” Social problems are never solved. At best they are only re-solved-over and over again.) Permit us to draw a cartoon that will help clarify the distinction we intend.

The problems that scientists and engineers have usually focused upon are mostly “tame” or “benign” ones. As an example, consider a problem of mathematics, such as solving an equation; or the task of an organic chemist in analyzing the structure of some unknown compound; or that of the chessplayer attempting to accomplish checkmate in five moves. For each the mission is clear. It is clear, in turn, whether or not the problems have been solved.

Wicked problems, in contrast, have neither of these clarifying traits; and they include nearly all public policy issues-whether the question concerns the location of a freeway, the adjustment of a tax rate, the modification of school curricula, or the confrontation of crime….

In the sciences and in fields like mathematics, chess, puzzle-solving or mechanical engineering design, the problem-solver can try various runs without penalty. Whatever his outcome on these individual experimental runs, it doesn’t matter much to the subject-system or to the course of societal affairs. A lost chess game is seldom consequential for other chess games or for non-chess-players.

With wicked planning problems, however, every implemented solution is consequential. It leaves “traces” that cannot be undone. One cannot build a freeway to see how it works, and then easily correct it after unsatisfactory performance. Large public-works are effectively irreversible, and the consequences they generate have long half-lives. Many people’s lives will have been irreversibly influenced, and large amounts of money will have been spent-another irreversible act. The same happens with most other large-scale public works and with virtually all public-service programs. The effects of an experimental curriculum will follow the pupils into their adult lives.

Rittel and Webber address a subject about which I know a lot, from first-hand experience — systems analysis. This is a loose discipline in which mathematical tools are applied to broad and seemingly intractable problems in an effort to arrive at “optimal” solutions to those problems. In fact, as Rittel and Webber say:

With arrogant confidence, the early systems analysts pronounced themselves ready to take on anyone’s perceived problem, diagnostically to discover its hidden character, and then, having exposed its true nature, skillfully to excise its root causes. Two decades of experience have worn the self-assurances thin. These analysts are coming to realize how valid their model really is, for they themselves have been caught by the very same diagnostic difficulties that troubled their clients.

Remember, that was written in 1973, a scant five years after Robert Strange McNamara — that supreme rationalist — left the Pentagon, having discovered that the Vietnam War wasn’t amenable to systems analysis. McNamara’s demise as secretary of defense also marked the demise of the power that had been wielded by his Systems Analysis Office (though it lives on under a different name, having long since been pushed down the departmental hierarchy).

My own disillusionment with systems analysis came to a head at about the same time as Rittel and Webber published their paper. A paper that I wrote in 1981 (much to the consternation of my colleagues in the defense-analysis business) was an outgrowth of a memorandum that I had written in 1975 to the head of the defense think-tank where I worked. Here is the crux of the 1981 paper:

Aside from a natural urge for certainty, faith in quantitative models of warfare springs from the experience of World War II, when they seemed to lead to more effective tactics and equipment. But the foundation of this success was not the quantitative methods themselves. Rather, it was the fact that the methods were applied in wartime. Morse and Kimball put it well [in Methods of Operations Research (1946)]:

Operations research done separately from an administrator in charge of operations becomes an empty exercise. To be valuable it must be toughened by the repeated impact of hard operational facts and pressing day-by-day demands, and its scale of values must be repeatedly tested in the acid of use. Otherwise it may be philosophy, but it is hardly science. [p. 10]

Contrast this attitude with the attempts of analysts for the past twenty years to evaluate weapons, forces, and strategies with abstract models of combat. However elegant and internally consistent the models, they have remained as untested and untestable as the postulates of theology.

There is, of course, no valid test to apply to a warfare model. In peacetime, there is no enemy; in wartime, the enemy’s actions cannot be controlled….

Lacking pertinent data, an analyst is likely to resort to models of great complexity. Thus, if useful estimates of detection probabilities are unavailable, the detection process is modeled; if estimates of the outcomes of dogfights are unavailable, aerial combat is reduced to minutiae. Spurious accuracy replaces obvious inaccuracy; untestable hypotheses and unchecked calibrations multiply apace. Yet the analyst claims relative if not absolute accuracy, certifying that he has identified, measured, and properly linked, a priori, the parameters that differentiate weapons, forces, and strategies.

In the end, “reasonableness” is the only defense of warfare models of any stripe.

It is ironic that analysts must fall back upon the appeal to intuition that has been denied to military men — whose intuition at least flows from a life-or-death incentive to make good guesses when choosing weapons, forces, or strategies.

This generalizes to government planning of almost every kind, at every level, and certainly to the perpetually recurring — and badly mistaken — belief that an entire economy can be planned and its produce “equitably” distributed according to needs rather than abilities.

(For much more in this vein, see the posts listed at “Modeling, Science, and ‘Reason’“. See also “Why I Am Bunkered in My Half-Acre of Austin“.)

Impeaching the President: Profiles in Partisanship

Profiles in Courage (1956), written by Theodore Sorenson (with a little help from John F. Kennedy, who accepted a Pulitzer Prize for it) is a

volume of short biographies describing acts of bravery and integrity by eight United States Senators, written by then-Senator John F. Kennedy…. The book profiles senators who defied the opinions of their party and constituents to do what they felt was right and suffered severe criticism and losses in popularity because of their actions.

I haven’t read the book, but I have a vague memory of the TV series that was based on it. The episode that sticks in my mind is based on the chapter about Senator Edmund G. Ross of Kansas, who (according to the Wikipedia article about the book) voted

for acquittal in the Andrew Johnson impeachment trial. As a result of Ross’s vote, along with those of six other Republicans, Democrat Johnson’s presidency was saved, and the stature of the office was preserved.

Whether keeping Johnson in office preserved the stature of the presidency is debatable, given his opposition to the Fourteenth Amendment, which granted citizenship to former slaves.

Whatever the case, the impeachment and trial of Andrew Johnson marked the first of four “serious” attempts to remove a president. Aside from the impeachments and trials of Johnson (1868) and Clinton (1998-99), there was the almost-certain impeachment of Richard Nixon (1974), which was mooted by his resignation, and the almost-certain impeachment of Donald Trump (2019), which will proceed to a Senate trial (2020). (The many “unserious” attempts to impeach presidents are recounted here and here.)

When the House of Representatives voted to impeach Johnson, a Democrat, only two Republicans voted “no”, as did all of the Democrats who voted. The resulting eleven articles of impeachment against Johnson were similarly approved along party lines. The votes reflected the essential issue between Johnson and congressional Republicans, which was how to proceed with the “reconstruction” of the South. Johnson, a Tennessean, had remained loyal to the Union but favored “reconstruction” measures that weren’t as harsh as those adopted by the Radical (abolitionist) Republicans, who controlled Congress. But seven Republican senators were having none of it, and voted for acquittal on the eleventh article (which was the first voted on). Ross, one of the seven, cast the final and deciding vote. (There were 35 “guilty” votes against 19 “not guilty” votes, but the Constitution’s two-thirds rule for conviction and removal from office required at least 36 “guilty” votes.) That broke the back of effort to remove Johnson, and the rest is history: Johnson remained in office through the end of his term (another nine months) as a lame-duck president.

Skipping forward 106 years, we find the House Judiciary Committee approving three articles of impeachment against Nixon, a Republican, with all the Democrats on the committee voting to approve two of them. The third article was approved despite two defections on the Democrat side. Two other articles were rejected because nine Democrats defected, joining unanimous opposition from Republicans (the only two cases in which Republicans held together). Nixon resigned before the House voted on the articles because it was certain that the House would adopt them, and enough Republicans might defect in the Senate to procure a conviction. If there was anything like a bipartisan impeachment of a president, this was it. But it is likely that Nixon got a bum rap, and was forced from office because he had been lynched by the media, which had long since become an outlet for left-wing propaganda.

Only 24 years later we come to the impeachment and trial of Clinton, a Democrat. I believe that the motive for the impeachment, at the hands of a Republican-controlled House, was resentment that Clinton had been elected in 1992 only because of the third-party candidacy of Ross Perot, who probably siphoned enough votes from George H.W. Bush to swing the election to Clinton. Be that as it may, some Democrats in the House joined the large Republican majority to approve impeachment proceedings, those being the days when there were still some old-line Southern (i.e., conservative) Democrats. Three articles of impeachment were approved by the House Judiciary Committee, two along party lines and the third with only one defection by a GOP member of the committee. The full House then approved the first two articles. The Senate voted to acquit Clinton on both charges because Democrats were united in their opposition to the effort to remove Clinton (evidence of guilt notwithstanding), and they held 45 seats (far more than the one-third-plus-one required to block conviction). Not a few RINOs joined the Senate’s 45 Democrats in voting for acquittal, so that Clinton was found not guilty by votes of 55-45 and 50-50, far from the 67 votes required to remove him from office.

Here we are, 20 years after Clinton’s acquittal, facing another impeachment trial, that of Trump. The House voted to initiate proceedings (even though they had already been initiated) with only a few Democrats and Republicans switching sides. The House Judiciary Committee voted strictly along party lines to approve two articles of impeachment against Trump. The House will vote the same way, and the Senate trial will end in acquittal because, paradoxically, in these polarized times the GOP is far more united around Trump (the neo-Republican) than it was around Nixon (the life-long Republican).

Economics Explained – Part I: What Is Economics About?

This is the first installment of a long entry. I may revise it as I post later entries. The whole will be published as a page, for ease of reference.

Economics, as a discipline, often seems counterintuitive, when it is not downright paradoxical. Perhaps the most counterintuitive principle of economics is that unregulated markets are the best mechanism for meeting human wants, given limited resources. Despite that principle, most economists emulate politicians and rabble-rousers in their penchant for second-guessing market outcomes and devising ways of manipulating those outcomes. This penchant does not negate the principle; it merely underscores the unwarranted vanity of the “intellectual” class.

Economics is mysterious to laymen because its practitioners have embellished it with unduly complex mathematical theorizing. In other words, when economics is not counterintuitive it is simply incomprehensible.

There is no need for economics to be counterintuitive or mysterious. Many writers have essayed simple — and correct — expositions of the principles of economics. The most notable effort, perhaps, is Henry Hazlitt’s Economics in One Lesson. Another good source is The Concise Encyclopedia of Economics at The Library of Economics and Liberty (a web site). (Good places to start there are “Basic Concepts” and “Ten Key Ideas“.)

Unfortunately, Hazlitt’s short book is more than 200 pages long. And the entries at The Library of Economics and Liberty are disjointed. What the world needs is a truly concise but coherent and comprehensive statement of the principles of economics. Thus this post, in which I use not a single equation or graph. Why? Because equations and graphs can be off-putting to readers who are not habituated to them. Moreover, equations and graphs imply a degree of precision that is not found in the real world; verbal explanations, hedged with qualifications, give a more accurate picture of reality (albeit one that necessarily remains incomplete).

I begin with the basic question: What is economics about? The answer to that question leads to observations about the principles of economics, which are shaped by politics and culture. From there, I illustrate the principles by working through an example that eventually takes them all into account.

What Is Economics About?

Economics is about the satisfaction of human wants through the production and exchange of goods (a term that encompasses information, services, and tangible products). That simple definition raises several issues, which are the fundamental subjects of economic inquiry:

  1. What are human wants, and how do they arise?
  2. Are all human wants (e.g., love) the proper domain of economics?
  3. By what mechanisms are resources transformed into goods and then matched (or not) to human wants?
  4. What determines the rate of output of all goods, that is, the aggregate degree of satisfaction of human wants?
  5. What is the proper role of government in the satisfaction of human wants?

The brief answers to these questions, upon which I elaborate below, are as follows:

1. Human wants arise from basic human requirements and impulses (e.g., the need for food, clothing, shelter, transportation, and status). Another way to say it is that human wants are both biological and emotional. Particular human wants, therefore, arise from a combination of biological impulses and cultural influences. Some wants clearly are essential to life (e.g., food); some wants clearly are nonessential but nevertheless fill emotional needs (e.g., yachts and mansions). But, like mountains and molehills, the extremes are distinguishable but they are connected by many indistinguishable intermediate stages; that is, there is no telling when wants transition from essential, to beneficial, to frivolous. Moreover — and this is an essential point to which I will return — the striving to fulfill what might seem to be frivolous wants can lead (by steps to be discussed later) to the creation of jobs that yield income from which the job-holders are able to fulfill essential wants (and others, as well).

2. Some human wants arise from impulses that economists should be wary of trying to analyze and measure. The most obvious of these is the kind of love that leads to marriage, sex, and children. Yes, there are sexual arrangements outside marriage that are purely economic transactions. But love of the kind that leads to marriage, sex, and children (and thence to love of parents for their children) is beyond the ken of economics. So, too, are other relationships that are non-transactional, such as friendship and membership in various voluntary organizations (churches, clubs, etc.).

3. Economics is therefore about arms-length transactions — transactions that aren’t bound up in non-contractual relationships like marriage, family, friendship, church, and club. Voluntary exchange and prices are the default mechanisms for matching goods with wants in arms-length transactions. The simplest example is barter: Andy makes bread and wants butter to put on it; Babette makes butter and wants bread for it: Andy and Babette strike a bargain that yields a rate of exchange between bread and butter (i.e., a price for bread in terms of butter and vice versa); the exchange makes both Andy and Babette better off (i.e., there are mutual gains from trade). The prices established by Andy and Babette also serve as signals (provide information) to others who seek to exchange bread and butter; for example, Chuck (a potential producer of butter) might be willing to make butter and trade with Andy on more favorable terms than those offered by Babette.

4. There is no such thing as an aggregate measure of the output of goods — though aggregation is implicit in macroeconomic constructs (e.g., gross domestic product). Thinking only of the United States, for example, how is it possible to aggregate the value of myriad goods that are produced and bought by dozens of millions of businesses and individuals? Hint: Because statistical sampling is arbitrary and uncertain, the answer cannot be found in the common denominator of money. It is nevertheless possible for an economy to move generally in the direction of growth or decline, with exceptions around the trend. It is obvious, for example, that most Americans use goods that are superior in number and quality to the goods that most Americans enjoyed 50 years ago. It is also obvious that during the episode known at the Great Depression, most Americans were materially worse off than they had been before the depression began, and that relatively few became better off. How such things happen, and how economic growth can be sustained and economic declines can be reversed, are valid subjects of economic analysis.

5. Voluntary exchange, unalloyed, can leave some persons “behind” (e.g., those who are incapable of producing bread in exchange for butter, those whose output is worth less to buyers than it used to be). But there is another human impulse (call it “altruism” for now) that leads to the voluntary redistribution of wealth and income, thus enabling the beneficiaries of the redistribution to buy more goods than they can afford on their own. Government action taken in the name of altruism displaces and discourages private altruistic action. More generally, government action throttles economic vitality, causes and exacerbates economic disruptions, and interferes with the constructive resolution of those disruptions. The proper role of government is to provide a framework of defense and justice within which economic actors can operate voluntarily and with little fear that their efforts to improve their lot (and the lot of others less fortunate) will be stymied by force or fraud. Government intervenes legitimately only when it prevents or discourages force and fraud (e.g., defending foreign sources of oil, detecting and preventing terrorism on U.S. soil, prosecuting thieves and murderers, prosecuting “boiler room” operators).

“Solomon” Horowitz Cuts the Baby in Half

If you don’t “get” the title, you should read this.

“Solomon” Horowitz is Department of Justice Inspector General Michael Horowitz, of course. According to many sources (including this one), the report that he issued today

criticizes some of the FBI’s actions in beginning an investigation of the Trump campaign’s connection with Russian election meddling, but does not conclude that political bias drove the agency’s probe.

Given the preponderance of evidence that political bias permeated the instigators and participants in the so-called investigation, Horowitz has to go down in history as the man who couldn’t see that the emperor was naked.

Horowitz, instead of getting at the truth, obviously tried to keep both of the warring camps happy, with the result that neither of them is happy. Discretion is seldom the better part of wisdom. It certainly wasn’t in this case. The truth is already out, but it will be underscored and reinforced when U.S. Attorney John Durham is finished with his probe.

Notably, Durham’s office issued a statement about the Horowitz report, which says in part:

Our investigation has included developing information from other persons and entities, both in the U.S. and outside of the U.S. Based on the evidence collected to date, and while our investigation is ongoing, last month we advised the Inspector General that we do not agree with some of the report’s conclusions as to predication and how the FBI case was opened.

Attorney General William Barr weighed in with this damning interpretation of the Horowitz report:

The Inspector General’s report now makes clear that the FBI launched an intrusive investigation of a U.S. presidential campaign on the thinnest of suspicions that, in my view, were insufficient to justify the steps taken. It is also clear that, from its inception, the evidence produced by the investigation was consistently exculpatory. Nevertheless, the investigation and surveillance was pushed forward for the duration of the campaign and deep into President Trump’s administration. In the rush to obtain and maintain FISA surveillance of Trump campaign associates, FBI officials misled the FISA court, omitted critical exculpatory facts from their filings, and suppressed or ignored information negating the reliability of their principal source. The Inspector General found the explanations given for these actions unsatisfactory. While most of the misconduct identified by the Inspector General was committed in 2016 and 2017 by a small group of now-former FBI officials, the malfeasance and misfeasance detailed in the Inspector General’s report reflects a clear abuse of the FISA process.

The Federalist is all over the story. See this, this, this, this, this, this, and this, for example. See also my page, “Spygate (a.k.a. Russiagate)“), in which I outlined the conspiracy many moons ago.

As for Horowitz, it’s possible (but unbelievable) that his job description kept him from spilling the whole truckload of beans about malfeasance in the FBI and Department of Justice. It’s more likely that he’s a bureaucrat’s bureaucrat, a tenured hack who hasn’t the backbone to tell it straight, even though he is in a cushy job from which he can retire quite comfortably. I say this as someone who took the risk of getting two incompetent bosses fired when I was not in a cushy position or anywhere near retirement age. I have no patience with mealy-mouthed cowards like Horowitz.

Good News from the Federal Government

According to The Wall Street Journal,

Congress has struck a tentative bipartisan agreement that would authorize 12 weeks of paid parental leave for all federal workers, in a potentially historic deal negotiated with the White House.

Draft language for a must-pass annual defense policy bill includes a provision that would allow 2.1 million civilians who work for the U.S. government across the country to take paid leave to care for a new baby after birth, adoption or the initiation of foster care, according to multiple people familiar with the deal.

Under current law, military service members can take up to 12 weeks of paid leave to care for a new child, while civilian federal employees get 12 weeks leave without pay. Civilian employees are paid during that 12-week period by using accrued annual or sick leave.

The change, if adopted, will mean that whenever a male federal worker qualifies for the benefit, he will almost always claim it. Currently, he is discouraged from taking time off because he must use annual leave or sick leave.

The good news is that there will be a lot fewer civilian federal workers on the job, which means that the federal bureaucracy will grind a bit more slowly when it does the things that it does to screw up the economy.

Come to think of it, all civilian federal workers should be given paid annual leave of 250 days (i.e., 50 weeks). That amount of paid leave, plus the two weeks’ worth of paid federal holidays, would allow the entire civilian federal work force to loaf full-time — but not at the office, where just going through the motions is damaging to the economy.

An even better idea is to abolish most of the civilian federal workforce and spend the money on defense. That would make us a lot better off, and more secure into the bargain.

The Trump Disadvantage

I keep a database of statistics compiled by Rasmussen Reports. One of the statistics is based on a weekly poll in which likely voters are asked about the direction of the country; specifically, whether it is going in the right direction or is on the wrong track. That’s a vague question, which leaves it up to the respondent to define what’s right and what’s wrong. A respondent might, for example, reply according to how he is feeling at the moment about the performance of the president. Whatever the case, I compute a weekly value for the ratio right direction/wrong track.

A second statistic is a direct measure of the president’s popularity. It is given by the following ratio: fraction of respondents strongly approving the president’s performance/fraction of respondents either approving or disapproving of the president’s performance. (This ratio disregards persons not venturing an opinion pro or con.)

(For more about these two metrics, see this post.)

Take Obama’s eight years as president (please!). Excluding the first several weeks of Obama’ first term, when his stratospheric approval ratings had more to do with hope than performance, here’s the relationship between the two metrics (with right direction/wrong track on the horizontal axis):

There’s a strong but not perfect relationship, which suggests that factors other than the president’s performance affect respondents’ views of the state of the nation. But it is evident that perceptions of the state of the nation do have a strong effect on judgments about the president’s performance (and vice versa).

Given that, the question arises whether Trump gets as much credit (or discredit) as Obama did for the perceived state of the nation. This graph covers Trump’s first term to date, and the same span of Obama’s first term, excluding (in both cases) the early “honeymoon” weeks:

Opinions of Trump have been so poisoned (with help from Trump, himself) that he can’t muster higher approval ratings than Obama did unless voters feel considerably better about the state of the nation under Trump than they did under Obama. A strong-approval ratio of 0.36, for example, was achieved by Obama with a right direction/wrong track ratio of about 0.7, whereas Trump can’t muster a strong-approval ratio of 0.36 unless the right direction/wrong track ratio is about 0.85.

What does that mean for Trump’s re-election? It won’t happen if between now and election day 2020 there is a sharp economic downturn, a severe stock market correction, or a major defense/foreign policy crisis of some kind. An impeachment trial, on the other hand, might be just the thing Trump needs to garner enough independent votes for re-election.

The Allure of Leftism

When I think of leftism, I often conjure my memory of Invasion of the Body Snatchers (1956). If you haven’t seen the film, here’s the premise of the action:

Dr. Miles Bennell returns to his small town practice to find several of his patients suffering the paranoid delusion that their friends or relatives are impostors. He is initially skeptical, especially when the alleged doppelgangers are able to answer detailed questions about their victim’s lives, but he is eventually persuaded that something odd has happened and determines to find out what is causing this phenomenon.

The essence of what follows is captured in the following excerpts of the script:

Dr. Miles Bennell:

Jack! Thank God [you’re here]! The whole town’s been taken over by the pods!

Jack Bellicec:

Not quite. There’s still you and Becky.

Miles, it would have been so much easier if you’d gone to sleep last night.

Relax. We’re here to help you….

There’s nothing to be afraid of. We’re not going to hurt you. Once you understand, you’ll be grateful.

Remember how Teddy [his wife] and I fought against it. We were wrong.

Miles:

You mean Teddy doesn’t mind?

Jack:

Of course not. She feels exactly the way I do.

Miles:

Let us go! If we leave town, we won’t come back.

Jack:

We can’t let you go. You’re dangerous to us.

Don’t fight it, Miles. It’s no use. Sooner or later, you’ll have to go to sleep….

Miles, you and I are scientific men. You can understand the wonder of what’s happened.

Just think. Less than a month ago Santa Mira was like any other town — people with nothing but problems. Then out of the sky came a solution. Seeds drifting through space for years took root in a farmer’s field. From the seeds came pods which had the power to reproduce themselves in the exact likeness of any form of life….

There’s no pain. Suddenly, while you’re asleep they’ll absorb your minds, your memories — and you’re reborn into an untroubled world.

Miles:

Where everyone’s the same?

Jack:

Exactly.

Miles:

What a world.

We’re not the last humans left. They’ll destroy you!

Jack:

Tomorrow, you won’t want them to. Tomorrow, you’ll be one of us….

[Later, Miles is trying to flee the city with his girlfriend, Becky]

Becky:

I went to sleep, Miles, and it happened….

They were right. Stop acting like a fool, Miles, and accept us.

Miles [interior monologue]:

I’ve been afraid a lot of times in my life but I didn’t know the real meaning of fear until I had kissed Becky.

A moment’s sleep, and the girl I loved was an inhuman enemy bent on my destruction.

That moment’s sleep was death to Becky’s soul just as it had been for Jack and Teddy and Dan Kauffman and all the rest.

Their bodies were now hosts, harboring an alien form of life, a cosmic form. which, to survive must take over every human man….

Miles [later, screaming at passers by]:

You fools! You’re in danger! Can’t you see?

They’re after you! They’re after all of us! Our wives, our children, everyone!

They’re here already!

You’re next!

You’re next!

You’re next!

You’re next!

You’re next!

Miles’s pleas go unheeded and the pod people seem destined to conquer humanity. Resistance is met by force, of course, because there must be no dissent from the true way.

So why not just let go of yourself and give in to the allure of leftism? It’s as easy as going to sleep.

All you have to do is forget …

the bonds of love and fellowship that attach you to family and friends … because all human beings (and animals, too) are brothers and sisters under the skin, and even unknown strangers half a world away must be treated as family, notwithstanding human nature (and the mendacious nature those who spout this nonsense);

the ancient, civilizing, and uniting moral code that is embedded in the Ten Commandments … for it teaches hate toward those who don’t observe it (hate being whatever offends the stated beliefs of those who spout this nonsense);

the derivative practice of taking others as individuals, judging them by their actions, and rewarding them for their contributions … for that is discrimination and it must be remedied by celebrating and elevating persons because of certain preferred characteristics that they happen to possess (skin color, sex, sexual orientation, gender “identity” — preferred characteristics that are subject to change without notice);

the vast improvements in the well-being of humanity that are due to the free exchange of products and services, and which are diminished by governmental dictation of the scope and kind of exchange (beyond obviously harmful products and services) … for it is not right that some persons (owing to their inborn intelligence, creativity, effort, and willingness to take risks) should reap “inordinate” rewards for having made and done things that benefit others (though it is right that those who spout this nonsense should be honored and rewarded for doing so);

the lessons of failure seen time and time again where the foregoing practices have been suppressed in favor of social and economic “equality” (though the rulers and the favorites have always been more equal than everyone else) … because the next time it (the suppression) will be done right.

As Miranda says in The Tempest, about another realm of magical thinking,

O, wonder!
How many goodly creatures are there here!
How beauteous mankind is! O brave new world
That has such people in ’t!


Related page and posts:

Leftism

Asymmetrical (Ideological) Warfare
An Addendum to (Asymmetrical) Ideological Warfare
Insidious Leftism
Intellectuals and Authoritarianism
Socialism, Communism, and Three Paradoxes
Understanding the “Resistance”: The Enemies Within
Leninthink and Left-think
The Subtle Authoritarianism of the “Liberal Order”
Society, Culture, and America’s Future
The Democrats’ Master Plan to Seize America

The Democrats’ Master Plan to Seize America

Although it remains unclear, even to Gordon Sondland, whether President Trump committed an impeachable offense in his dealings with Ukraine (formerly known as the Ukraine), Mr. Sondland has (perhaps unwittingly) abetted the Democrats’ master plan to seize the White House, Congress, and America.

By implicating Vice President Pence in the Ukraine affair, Sondland has laid the groundwork for the following chain of events:

  1. Trump is impeached by the House. He is then convicted by Senate, with a sufficient number of votes from GOP senators who are anxious to keep their seats and are therefore willing to believe that conviction is warranted by (media-driven) popular demand.
  2. Pence is then dispatched similarly. Even if he is president long enough to nominate a vice president, in accordance with Amendment XXV, the nominee would have to be approved by a majority of both houses of Congress — a majority that the House would not grant.
  3. Speaker of the House Nancy Pelosi then becomes president, according to the Presidential Succession Act of 1947.
  4. There is good reason to believe that the 1947 act is unconstitutional. But the Supreme Court’s weather vane — Chief Justice John Roberts — finds a clever way to uphold the 1947 act. Ms. Pelosi continues in the presidency until the inauguration of a Democrat president on January 20, 2021 — an outcome ensured by the impeachments and convictions.
  5. Democrats retain control of the House and gain control of the Senate, giving the fascist party a stranglehold on the federal government. Resistance from the Supreme Court (if Roberts re-grows a backbone) is nullified by court-packing.
  6. And that is that for America.

Far-fetched? Possibly. But don’t rule it out. Something like it has been in the works for more than a century, that is, since the ascendancy of Woodrow Wilson, champion of rule by “elites”.

The Shallowness of Secular Ethical Systems

This post is prompted by a recent offering from Irfan Khawaja, who styles himself an ex-libertarian and tries to explain his apostasy. Khawaja abandoned libertarianism (or his version of it) because it implies a stance toward government spending that isn’t consistent with the desideratum of another ethical system.

Rather than get bogged down in the details of Khawaja’s dilemma, I will merely point out what should be obvious to him (and to millions of other true believers in this or that ethical system): Any system that optimizes on a particular desideratum (e.g., minimal coercion, maximum “social” welfare by some standard) will clash with at least one other system that optimizes a different desideratum.

Further, the various desiderata usually are overly broad. And when the desiderata are defined narrowly, what emerges is not a single, refined desideratum but two or more. Which means that there are more ethical systems and more opportunities for clashes between systems. Those clashes sometimes occur between systems that claim to optimize on the same (broad) desideratum. (I will later take up an example.)

What are the broad and refined desiderata of various ethical systems? The following list is a start, though it is surely incomplete:

  • Liberty

Freedom from all restraint

Freedom from governmental restraint

Freedom to do as one chooses, consistent with traditional social norms (some of which may be enforced by government)

Freedom to do as one chooses, regardless of one’s endowment of intelligence, talent, effort, wealth, etc.

  • Equality

Equal treatment under the law

Economic equality, regardless of one’s intelligence, talent, effort, wealth, etc.

Economic and social equality, regardless of one’s intelligence, talent, effort, wealth, etc.

  • Democracy

Participation in governmental decisions through the election of officials whose powers are limited to those deemed necessary to provide for the defense of innocent citizens from force and fraud

Participation in governmental decisions through the election of officials who have the power to bring about economic and social equality

Governmental outcomes that enact the “will of the people” (i.e., the desiderata of each group that propounds this kind of democracy)

  • Human welfare

The maximization of the sum of all human happiness, perhaps with some lower limit on the amount of happiness enjoyed by those least able to provide for themselves

The maximization of the sum of all human happiness, as above, but only with respect to specific phenomena viewed as threats (e.g., “climate change”, “overpopulation”, resource depletion)

  • Animal welfare (including but far from limited to human welfare)

Special protections for animals to prevent their mistreatment

Legal recognition of animals (or some of them) as “persons” with the same legal rights as human beings

No use of animals to satisfy human wants (e.g., food, clothing, shelter)

It would be pedantic of me to explain the many irreconcilable clashes between the main headings, between the subsidiary interpretations under each main heading, and between the subsidiary interpretations under the various main headings. They should be obvious to you.

But I will show that even a subsidiary interpretation of a broad desideratum can be rife with internal inconsistencies. Bear with me while I entertain you with a few examples, based on Khawaja’s dilemma — the conflict between his versions of welfarism and libertarianism.

Welfarism, according to Khawaja, means that a government policy, or a change in government policy, should result in no net loss of lives. This implies that that it is all right if X lives are lost, as long as Y lives are gained, where Y is greater than X. Which is utilitarianism on steroids — or, in the words of Jeremy Bentham (the godfather of utilitarianism), nonsense upon stilts (Bentham’s summary dismissal of the doctrine of natural rights). To see why, consider that the blogger’s desideratum could be accomplished by a ruthless dictator who kills people by the millions, while requiring those spared to procreate at a rate much higher than normal. Nirvana (not!).

A broader approach to welfare, and one that is more commonly adopted, is an appeal to the (fictional) social-welfare function. I have written about it many times. All I need do here, by way of dismissal, is to summarize it metaphorically: Sam obtains great pleasure from harming other people. And if Sam punches Joe in the nose, humanity is better off (that is, social welfare is increased) if Sam’s pleasure exceeds Joe’s pain. It should take you a nanosecond to understand why that is nonsense upon stilts.

In case it took you longer than a nanosecond, here’s the nonsense: How does one measure the pleasure and pain of disparate persons? How does one then sum those (impossible) measurements?

More prosaically: If you are Joe, and not a masochist, do you really believe that Sam’s pleasure somehow cancels your pain or compensates for it in the grand scheme of things? Do you really believe that there is a scoreboard in the sky that keeps track of such things? If your answer to both questions is “no”, you should ask yourself what gives anyone the wisdom to decree that Sam’s punch causes an increase in social welfare. The philosopher’s PhD? You were punched in the nose. You know that Sam’s pleasure doesn’t cancel or compensate for your pain. The philosopher (or politician or economist) who claims (or implies) that there is a social-welfare function is either a fool (the philosopher or economist) or a charlatan (the politician).

I turn now to libertarianism, which almost defies analysis because of its manifold variations and internal contradictions (some of which I will illustrate). But Khawaja’s account of it as a prohibition on the initiation of force (the non-aggression principle, a.k.a. the harm principle) is a good entry point. It is clear that Khawaja understands force to include government coercion of taxpayers to fund government programs. That’s an easy one for most libertarians, but Khawaja balks because the prohibition of government coercion might mean the curtailment of government programs that save lives. (Khawaja thus reveals himself to have been a consequentialist libertarian, that is, one who favors liberty because of its expected results, not necessarily because it represents a moral imperative. This is yet another fault line within libertarianism, but I won’t explore it here.)

Khawaja cites the example of a National Institutes of Health (NIH) program that might cure cystic fibrosis or alleviate its symptoms. But Khawaja neglects the crucial matter of opportunity cost (a strange omission for a consequentialist). Those whose taxes fund government programs usually aren’t those who benefit from them. Taxpayers have other uses for their money, including investments in scientific and technological advances that improve and lengthen life. The NIH (for one) has no monopoly on life-saving and life-enhancing research. To put it succinctly, Khawaja has fallen into the intellectual trap described by Frédéric Bastiat, which is to focus on that which is seen (the particular benefits of government programs) and to ignore the unseen (the things that could be done instead through private action, including — not trivially — the satisfaction of personal wants). When the problem is viewed in that way, most libertarians would scoff at Khawaja’s narrow view of libertarianism.

Here’s a tougher issue for libertarians (the extreme pacifists among them excluded): Does the prohibition on the initiation of force extend to preemptive self-defense against an armed thug who is clearly bent on doing harm? If it does, then libertarianism is unadulterated hogwash.

Let’s grant that libertarianism allows for preemptive self-defense, where the potential victim (or his agent) is at liberty to decide whether preemption is warranted by the threat. Let’s grant, further, that the right of preemptive self-defense includes the right to be prepared for self-defense, because there is always the possibility of a sudden attack by a thug, armed robber, or deranged person. Thus the right to bear arms at all times, and in all places should be unrestricted (unabridged, in the language of the Second Amendment).

Along comes Nervous Nellie, who claims that the sight of all of those armed people around her makes her fear for her life. But instead of arming herself, Nellie petitions government for the confiscation of all firearms from private persons. The granting of Nellie’s petition would constrain the ability of others to defend themselves against (a) private persons who hide their firearms successfully; (b) private persons who resort to other lethal means of attacking other persons, and (c) armed government agents who abuse their power.

The resulting dilemma can’t be resolved by appeal to the non-aggression principle. The principle is violated if the right of self-defense is violated, and (some would argue) it is also violated if Nellie lives in fear for her life because the right of self-defense is upheld.

Moreover, the ability of government to decide whether persons may be armed — indeed, the very existence of government — violates the non-aggression principle. But without government the non-aggression principle may be violated more often.

Thus we see more conflicts, all of which take place wholly within the confines of libertarianism, broadly understood.

The examples could go on an on, but enough is enough. The point is that ethical systems that seek to optimize on a single desideratum, however refined and qualified it might be, inevitably clash with other ethical systems. Those clashes illustrate Kurt Gödel‘s incompleteness theorems:

Gödel’s incompleteness theorems are two theorems of mathematical logic that demonstrate the inherent limitations of every formal axiomatic system capable of modelling basic arithmetic….

The first incompleteness theorem states that no consistent system of axioms whose theorems can be listed by an effective procedure (i.e., an algorithm) is capable of proving all truths about the arithmetic of natural numbers. For any such consistent formal system, there will always be statements about natural numbers that are true, but that are unprovable within the system. The second incompleteness theorem, an extension of the first, shows that the system cannot demonstrate its own consistency.

There is the view that Gödel’s theorems aren’t applicable in fields outside of mathematical logic. But any quest for ethical certainties necessarily involves logic, however flawed it might be.

Persons who devise and purvey ethical systems, assuming their good intentions (often a bad assumption), are simply fixated on particular aspects of human behavior rather than taking it whole. (They cannot see the forest because they are crawling on the ground, inspecting tree roots.)

Given such myopia, you might wonder how humanity manages to coexist cooperatively and peacefully as much as it does. Yes, there are many places on the globe where conflict is occasioned by what could be called differences of opinion about ultimate desiderata (including religious ones). But most human beings (though a shrinking majority, I fear) don’t give a hoot about optimizing on a particular desideratum. That is to say, most human beings aren’t fanatical about a particular cause or belief. And even when they are, they mostly live among like persons or keep their views to themselves and do at least the minimum that is required to live in peace with those around them.

It is the same for persons who are less fixated (or not at all) on a particular cause or belief. Daily life, with its challenges and occasional pleasures, is enough for them. In the United States, at least, fanaticism seems to be confined mainly to capitalism’s spoiled children (of all ages), whether they be ultra-rich “socialists”, affluent never-Trumpers, faux-scientists and their acolytes who foresee a climatic apocalypse, subsidized students (e.g., this lot), and multitudes of other arrant knights (and dames) errant.

Atheists are fond of saying that religion is evil because it spawns hatred and violence. Such sentiments would be met with bitter laughter from the hundreds of millions of victims of atheistic communism, were not most of them dead or still captive to the ethical system known variously as socialism and communism, which promises social and economic equality but delivers social repression and economic want. Religion (in the West, at least) is a key facet of liberty.

Which brings me to the point of this essay. When I use “liberty” I don’t mean the sterile desideratum of so-called libertarians (who can’t agree among themselves about its meaning or prerequisites). What I mean is the mundane business of living among others, getting along with them (or ignoring them, if that proves best), treating them with respect or forbearance, and observing the norms of behavior that will cause them to treat you with respect or forbearance.

It is that — and not the fanatical (unto hysterical) rallying around the various desiderata of cramped ethical systems — which makes for social comity and economic progress. The problem with silver bullets (Dr. Ehrlich’s “magic” one being a notable exception) is that they ricochet, causing more harm than good — often nothing but harm, even to those whom they are meant to help.


Related pages and posts:

Climate Change
Economic Growth Since World War II
Leftism
Modeling and Science
Social Norms and Liberty

On Liberty
Greed, Cosmic Justice, and Social Welfare
Democracy and Liberty
Utilitarianism vs. Liberty
Fascism and the Future of America
The Indivisibility of Economic and Social Liberty
Tocqueville’s Prescience
Accountants of the Soul
Pseudo-Libertarian Sophistry vs. True Libertarianism
Bounded Liberty: A Thought Experiment
Evolution, Human Nature, and “Natural Rights”
More Pseudo-Libertarianism
The Meaning of Liberty
Positive Liberty vs. Liberty
Facets of Liberty
Burkean Libertarianism
What Is Libertarianism?
True Libertarianism, One More Time
Utilitarianism and Psychopathy
Why Conservatism Works
The Eclipse of “Old America”
Genetic Kinship and Society
Liberty as a Social Construct: Moral Relativism?
Defending Liberty against (Pseudo) Libertarians
Defining Liberty
The Pseudo-Libertarian Temperament
Modern Liberalism as Wishful Thinking
Getting Liberty Wrong
Romanticizing the State
Libertarianism and the State
My View of Libertarianism
The Principles of Actionable Harm
More About Social Norms and Liberty
Superiority
The War on Conservatism
Old America, New America, and Anarchy
The Authoritarianism of Modern Liberalism, and the Conservative Antidote
Society, Polarization, and Dissent
Social Justice vs. Liberty
The Left and “the People”
The Harm Principle Revisited: Mill Conflates Society and State
Liberty and Social Norms Re-examined
Natural Law, Natural Rights, and the Real World
Natural Law and Natural Rights Revisited
Libertarianism, Conservatism, and Political Correctness
My View of Mill, Endorsed
Rights, Liberty, the Golden Rule, and Leviathan
Suicide or Destiny?
O.J.’s Glove and the Enlightenment
James Burnham’s Misplaced Optimism
True Populism
Libertarianism’s Fatal Flaw
The Golden Rule and Social Norms
The Left-Libertarian Axis
Rooted in the Real World of Real People
Consequentialism
Conservatism, Society, and the End of America
Conservatism vs. Leftism and “Libertarianism” on the Moral Dimension
Free Markets and Democracy
“Libertarianism”, the Autism Spectrum, and Ayn Rand
Tragic Capitalism
A Paradox for Liberals
Rawls vs. Reality
The Subtle Authoritarianism of the “Liberal Order”
Liberty: Constitutional Obligations and the Role of Religion
Society, Culture, and America’s Future

The Subtle Authoritarianism of the “Liberal Order”

There is a smug kind of person whom I know well, having been trained in the economics of control; having worked for more than thirty years with economists, engineers, mathematicians, statisticians, and others whose penchant it was to find the “best” solution to every problem; and having known (too many) “right thinking” persons whose first reaction to every disaster, sob story, and inconvenience is that government experts should make it stop (liberty, unintended consequences, and costs are of no importance).

A small sample of the smuggies’ certainties: “Efficient” means of transportation (e.g., fast intercity trains, urban light rail) should be provide by government (i.e., taxpayers) because they’re obviously the “best” way to move people, the revealed preferences of consumers (and voters) to the contrary notwithstanding. Cities should be zoned to encourage density (because, you know, cities are “cool”, “climate change”, yadayadyada), the preference of actual people (and evidence against “climate change”) to the contrary notwithstanding.

The list goes on and on. You can easily add to it even if you haven’t had your morning coffee.

The kind of smug person who holds such views holds them for many reasons: peer influence, virtue-signaling, educated incapacity, public-school and university indoctrination, and good old-fashioned snobbery (the “deplorables” must be made to do what’s in their own interest). Most such persons are also financially comfortable — too comfortable, obviously, because they seem to have nothing better to do with their money than to pay the higher taxes that inevitably result from their electoral choices: candidates who believe that government is the answer; bond issues and other ballot measures that enable politicians to spend more money to “fix” things. The less-comfortable contingent (e.g., school teachers and low-level government employees) go along to get along and because they must believe that government is good, just as a young child must believe in Santa Claus.

The agenda and constituency of the “liberal order” parallel those of the so-called liberal international order, which Sumantra Maitra addresses in a review article, “The End Times of the Liberal Order“? (Spectator USA, October 26, 2018):

A liberal order is not natural. Robert Kagan admits as much in his new bookThe Jungle Grows Back, when he writes that the ‘the creation of the liberal order has been an act of defiance against both history and human nature’. Nor is a liberal order an ‘order’, or liberal in nature. It is a sort of hegemonic or imperial peace.

Nothing wrong with that, of course; peace, any peace, is important. Unfortunately, it is the liberal part, which causes the problem. An internationalist, utopian worldview, liberalism is full of crusaderly zeal, constantly ‘going abroad in search of monsters to destroy’. Liberal internationalists badly want to shape the world. When given the chance, they do manage to shape the world, very badly indeed….

[John] Mearsheimer’s The Great Delusion claims that liberalism itself is paradoxical. It supports tolerance, but it is a universalist paradigm, deeply committed to borderless values. There cannot be any compromise or cooperation, because everything, everywhere is an existential battle. This causes conflict both at home and abroad. Domestically, liberalism divides a nation into good and bad people, and leads to a clash of cultures. Internationally, it leads to never-ending wars.

Encore: Domestically, liberalism divides a nation into good and bad people, and leads to a clash of cultures.

The clash of cultures was started and sustained by so-called liberals, the smug people described above. It is they who — firmly believing themselves to be smarter, on the the side of science, and on the side of history — have chosen to be the aggressors in the culture war.

Hillary Clinton’s remark about Trump’s “deplorables” ripped the mask from the “liberal” pretension to tolerance and reason. Clinton’s remark was tantamount to a declaration of war against the self-appointed champion of the “deplorables”: Donald Trump. And war it has been. much of it waged by deep-state “liberals” who cannot entertain the possibility that they are on the wrong side of history, and who will do anything — anything — to make history conform to their smug expectations of it.


Related reading:

Joel Kotkin, “Elites Against Western Civilization“, City Journal, October 3, 2019 (examples of the smug worldview, from a non-smug academic)

Victor Davis Hanson, “The Globalist Mindset: They Hate You“, American Greatness, December 16, 2018 (more, from another non-smug academic)

Victor Davis Hanson, “The Military-Intellegence Complex“, American Greatness, November 3, 2019 (even more)

Lyle H. Rossiter Jr., M.D. “The Liberal Mind: The Psychological Causes of Political Madness“, Townhall, December 4, 2006 (a psychiatrist’s diagnosis confirms mine)

Related pages and posts (focusing on various aspects of delusional “liberalism”):

Abortion Q & A
Climate Change
Economic Growth Since World War II (see especially The Rahn Curve in Action)
Leftism
Modeling and Science
Political Ideologies
Spygate (a.k.a. Russiagate)

Hurricane Hysteria
“Tribalists”, “Haters”, and Psychological Projection
“Science is Real”
“Liberalism”: Trying to Have It Both Ways
Understanding the Resistance: The Enemies Within
Intellectuals and Authoritarianism
More Unsettled Science
Homelessness
Leninthink and Left-Think
More Unsettled Science
Not-So-Random Thoughts (XXIV) (especially The Transgender Trap: A Political Nightmare Becomes Reality and Assortative Mating, Income Inequality, and the Crocodile Tears of “Progressives”)
Climate Hysteria
Rawls vs. Reality

Rawls vs. Reality

I have never understood the high esteem in which John Rawls‘s “original position” is held by many who profess political philosophy. Well, I understand that the original position supports redistribution of income and wealth — a concept beloved of the overpaid faux-socialist professoriate — but it is a logical and empirical absurdity that shouldn’t be esteemed by anyone who thinks about it rigorously. (Which tells me a lot about the intelligence, rigor, and honesty of those who pay homage to it.)

What is the original position? According to Wikipedia it is

a hypothetical situation developed by … Rawls as a thought experiment to replace the imagery of a savage state of nature of prior political philosophers like Thomas Hobbes.

In the original position, the parties select principles that will determine the basic structure of the society they will live in. This choice is made from behind a veil of ignorance, which would deprive participants of information about their particular characteristics: their ethnicity, social status, gender and, crucially, Conception of the Good (an individual’s idea of how to lead a good life). This forces participants to select principles impartially and rationally.

As a thought experiment, the original position is a hypothetical position designed to accurately reflect what principles of justice would be manifest in a society premised on free and fair cooperation between citizens, including respect for liberty, and an interest in reciprocity.

In the state of nature, it might be argued that certain persons (the strong and talented) would be able to coerce others (the weak and disabled) by virtue of the fact that the stronger and more talented would fare better in the state of nature. This coercion is sometimes thought to invalidate any contractual arrangement occurring in the state of nature. In the original position, however, representatives of citizens are placed behind a “veil of ignorance”, depriving the representatives of information about the individuating characteristics of the citizens they represent. Thus, the representative parties would be unaware of the talents and abilities, ethnicity and gender, religion or belief system of the citizens they represent. As a result, they lack the information with which to threaten their fellows and thus invalidate the social contract they are attempting to agree to….

Rawls specifies that the parties in the original position are concerned only with citizens’ share of what he calls primary social goods, which include basic rights as well as economic and social advantages. Rawls also argues that the representatives in the original position would adopt the maximin rule as their principle for evaluating the choices before them. Borrowed from game theory, maximin stands for maximizing the minimum, i.e., making the choice that produces the highest payoff for the least advantaged position. Thus, maximin in the original position represents a formulation of social equality.

The social contract, citizens in a state of nature contract with each other to establish a state of civil society. For example, in the Lockean state of nature, the parties agree to establish a civil society in which the government has limited powers and the duty to protect the persons and property of citizens. In the original position, the representative parties select principles of justice that are to govern the basic structure of society. Rawls argues that the representative parties in the original position would select two principles of justice:

  1. Each citizen is guaranteed a fully adequate scheme of basic liberties, which is compatible with the same scheme of liberties for all others;
  2. Social and economic inequalities must satisfy two conditions:
    • to the greatest benefit of the least advantaged (the difference principle);
    • attached to positions and offices open to all.

The reason that the least well off member gets benefited is that it is assumed that under the veil of ignorance, under original position, people will be risk-averse. This implies that everyone is afraid of being part of the poor members of society, so the social contract is constructed to help the least well off members.

There are objections aplenty to Rawls’s creaky construction, some of which are cited in the Wikipedia piece:

In Anarchy, State, and Utopia, Robert Nozick argues that, while the original position may be the just starting point, any inequalities derived from that distribution by means of free exchange are equally just, and that any re-distributive tax is an infringement on people’s liberty. He also argues that Rawls’s application of the maximin rule to the original position is risk aversion taken to its extreme, and is therefore unsuitable even to those behind the veil of ignorance.

In Solving the Riddle of Right and Wrong, Iain King argues that people in the original position should not be risk-averse, leading them to adopt the Help Principle (Help someone if your help is worth more to them than it is to you) rather than maximin.

In Liberalism and the Limits of Justice, Michael Sandel has criticized Rawls’s notion of veil of ignorance, pointing out that it is impossible, for an individual, to completely prescind from [his] beliefs and convictions … as … required by Rawls’s thought experiment.

There is some merit in those objections, but they they don’t get to the root error of Rawls’s concoction. For that’s what it is, a concoction that has nothing to do with real people in the real world. The original position is an exercise in moral masturbation.

To begin at the beginning, the ostensible aim of Rawls’s formulation is to outline the “rules” by which a society can attain social justice — or, more accurately, social justice as Rawls defines it. (In what follows, when I refer to social justice in the context of Rawls’s formulation, the reader should mentally add the qualifier “as Rawls defines it”.)

Rawls presumably didn’t believe that there could be an original position, let alone a veil of ignorance. So his real aim must have been to construct a template for the attainment of social justice. The actual position of a society could then (somehow) be compared with the template to determine what government policies would move society toward the Rawlsian ideal.

Clearly, Rawls believed that his template could be justified only if he arrived at it through what he thought would be a set of unexceptionable assumptions. Otherwise, he could simply have promulgated the template (the maximin distribution of primary social goods), and left it at that. But to have done so would have been to take a merely political position, not one that pretends to rest on deep principles and solid logic.

What are those principles, and what is the logic that leads to Rawls’s template for a just society? Because there is no such thing as an original position or veil of ignorance, Rawls assumes (implicitly) that the members of a society should want social justice to prevail, and should behave accordingly, or authorize government to behave accordingly on their behalf. The idea is to make it all happen without coercion, as if the maximin rule were obviously the correct route to social justice.

To make it happen without coercion, Rawls must adopt unrealistic assumptions about the citizens of his imaginary society: pervasive ignorance of one’s own situation and extreme risk-aversion. Absent those constraints, some kind of coercion would be required for the members of the society to agree on the maximin rule. Effectively, then, Rawls assumes the conclusion toward which he was aiming all along, namely, that the maximin rule should govern society’s treatment of what he calls primary social goods — or, rather, government’s treatment of those goods, as it enforces the consensus of a society of identical members.

What is that treatment? This, as I understand it:

  • Guarantee each citizen a fully adequate scheme of basic liberties, which is compatible with the same scheme of liberties for all others.
  • Tolerate only those inequalities with respect to social and economic outcomes that yield the greatest benefit to the least-advantaged.
  • Tolerate only those inequalities that derive from positions and offices that are open to all citizens.

Rawls’s scheme is superficially attractive to anyone who understands that forced equality is inimical to economic progress (not to mention social comity and liberty), and that it harms the least-advantaged (because they “share” in a smaller “pie”) as well as those who would otherwise be among the more-advantaged. Similarly, the idea that all citizens have the same basic rights and social advantages seems unexceptionable.

But many hard questions lurk beneath the surface of Rawls’s plausible concoction.

What is an adequate scheme of basic liberties? The two weasel-words — “adequate” and “basic” — mean that the scheme can be whatever government officials would prefer it to be, unless the clone-like populace defines the scheme in advance. But the populace can’t be clone-like, except in Rawls’s imagination, so government can’t be constrained by a definition of basic liberties that is conceived in the original position. Thus government must (and certainly will) adopt a scheme that reflects the outcome of intra-governmental bargaining (satisficing various popular and bureaucratic interests) — not a scheme that is the consensus of a clone-like citizenry lusting after social justice.

Do basic liberties entail equal rights under law? Yes, and they have been enshrined in American law for a century-and-a-half. Or have they? It seems that rights are a constantly evolving and malleable body of entitlements, which presently (in the view of many) include (inter alia) the right to defecate on public property, the right to be given addictive drugs, the right not to be offended or “triggered” emotionally, and the right not to be shunned by persons whose preferences don’t run to sodomy and “gender fluidity”.

The failure to provide equal rights– whatever they may be at the moment — isn’t a failure that can be remedied by magically reverting to the original position, where actual human beings aren’t to be found. The rights of the moment must be enforced by government. But government enforcement necessarily involves coercion, and certainly involves arbitrariness of a kind that might even offend Rawls. For government, in the real world, is a blunt instrument wielded by politicians and bureaucrats who strike crude bargains on behalf of the sundry interest groups to which they are beholden.

Turning to economic inequality, how does one define the least-advantaged? Are the least-advantaged those whose incomes fall below a certain level? For how long? Who defines the level? If raising incomes to that level reduces the rewards of economically productive work (e.g., invention, innovation, investment, entrepreneurship) through taxation, and thereby reduces the opportunities available to the least-advantaged, by what complex computation will the “right” level of taxation by determined? Surely not by citizens in the original position, operating behind the veil of ignorance, nor — it must be admitted — by government, the true nature of which is summarized in the final sentence of the preceding paragraph.

And what about wealth? How much wealth? Wealth at what stage of one’s life? When a person is still new to the work force but, like most workers, will earn more and accrue wealth? What about wealth that may be passed from generation to generation? Or is such wealth something that isn’t open to all and therefore forbidden? And if it is forbidden, what does that do to the incentives of wealth-builders to do things that advance economic growth, which benefits all citizens including the least-advantaged?

In both cases — income and wealth — we are dealing in arbitrary distinctions that must fall to government to decide, and to enforce by coercion. There is no question of deciding such things in the original position, even behind a veil of ignorance, unless the citizenry consists entirely of Rawls’s omniscient clones.

I must ask, further, why the least-advantaged — if they could be defined objectively and consistently — should be denied incentives to earn more income and build wealth? (Redistribution schemes do just that.) Is that social justice? No, it’s a particular kind of social justice that sees only the present and condescends toward the least-advantaged (whoever they might be).

What about the least-advantaged socially? If social status is directly correlated with income or wealth, there is no need to delve deeper. But if it is something else, the question arises: What is it, how can it be measured, and how can it be adjusted so that the least-advantaged are raised to some minimal level of social standing? How is that level defined and who defines it? Surely not Rawls’s clones operating in complete ignorance of such things. The task therefore, and again, must fall to government, the failings and coerciveness of which I have already addressed adequately.

Why should the least-advantaged on any dimension, if they can be defined, have privileges (i.e., government interventions in their favor) that are denied and harmful to the rest of the citizenry? Favoring the least-advantaged is, of course, “the right thing to do”. So all that Rawls accomplished by his convoluted, pristine “reasoning” was to make a plausible (but deeply flawed) case for something like the welfare state that already exists in the United States and most of the world. As for his conception of liberty and equal rights, Rawls cleverly justifies trampling on the liberty and equal rights of the more-advantaged by inventing like-minded clones who “authorize” the state to trample away.

Rawls put a lot of hard labor into his justification for welfare-statism in the service of “social justice”. The real thing, which was staring him in the face, amounts to this: Government intervenes in voluntarily cooperative social and economic arrangements only to protect citizens from force and fraud, where those terms are defined by long-standing social norms and applied by (not reworked or negated by) legislative, executive, and judicial acts. Which norms? The ones that prevailed in America before the 1960s would do just fine, as long as laws forbidding intimidation and violence were uniformly enforced across the land.

Perfection? Of course not, but attainable. The Framers of the original Constitution did a remarkable job of creating a template by which real human beings (not Rawls’s clones) could live in harmony and prosperity. Real human beings have a penchant for disharmony, waste, fraud, and abuse — but they’re all we have to work with.

Why Are Interest Rates So Low? (II)

Six years ago, I opined that

borrowers have become less keen about borrowing; that is, they lack confidence about future prospects for income (in the case of households) and returns on investment (in the case of businesses). Why should that be?

If the post-World War II trend is any indication — and I believe that it is — the American economy is sinking into stagnation. Here is the long view [growth rates are inflation-adjusted, final entry updated]:

  • 1790-1861 — annual growth of 4.1 percent — a booming young economy, probably at its freest
  • 1866-1907 — annual growth of 4.3 percent — a robust economy, fueled by (mostly) laissez-faire policies and the concomitant rise of technological innovation and entrepreneurship
  • 1970-2010 2018 — annual growth of 2.8 2.7 percent – sagging under the cumulative weight of “progressivism,” New Deal legislation, LBJ’s “Great Society” (with its legacy of the ever-expanding and oppressive welfare/transfer-payment schemes: Medicare, Medicaid, a more generous package of Social Security benefits), and an ever-growing mountain of regulatory restrictions. [All further compounded by Obama’s expansion of Medicare and Medicaid and acceleration of regulatory activity, some of which Trump has reversed, but most of which still throttles the economy.]

Arnold Kling, citing a piece by Andrew McAfee, suggests another reason:

[C]ould this decoupling [economic growth with less resource use] be responsible for low interest rates?… As long as economic growth required more use of resources, you expect a positive return from storing resources. You get a positive interest rate out of that. But when growth is decoupled, you do not expect a positive return from storing resources. If you want to create a store of value with a positive rate of return, you need to find some productive investment.

But storing resources is only part of the picture. The interest rates that producers pay depend on (a) what they expect in the way of future profits and (b) the availability of funds. Even if profitability is rising because of more efficient resource use, rates could be falling because — as a commenter on Kling’s post notes — there is a steady increase in global savings.

Why would that be? Because households (and businesses with large cash balances) have more disposable income as real incomes rise (and profit margins grow). Some of that increment is made available to corporate borrowers through direct purchases of corporate debt and purchases of mutual funds and ETF shares. Even historically low interest rates on corporate debt will attract buyers because the alternatives (low rates on bank deposits and money-market certificates) are worse.

So it would seem that the long-standing slowdown in the U.S. economy isn’t the whole answer to the question. But it remains part of the answer. Interest rates would be higher if the dead hand of government were lifted from the economy’s carcass.