Not-So-Random Thoughts (XX)

An occasional survey of web material that’s related to subjects about which I’ve posted. Links to the other posts in this series may be found at “Favorite Posts,” just below the list of topics.

In “The Capitalist Paradox Meets the Interest-Group Paradox,” I quote from Frédéric Bastiat’s “What Is Seen and What Is Not Seen“:

[A] law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

This might also be called the law of unintended consequences. It explains why so much “liberal” legislation is passed: the benefits are focused a particular group and obvious (if overestimated); the costs are borne by taxpayers in general, many of whom fail to see that the sum of “liberal” legislation is a huge tax bill.

Ross Douthat understands:

[A] new paper, just released through the National Bureau of Economic Research, that tries to look at the Affordable Care Act in full. Its authors find, as you would expect, a substantial increase in insurance coverage across the country. What they don’t find is a clear relationship between that expansion and, again, public health. The paper shows no change in unhealthy behaviors (in terms of obesity, drinking and smoking) under
Obamacare, and no statistically significant improvement in self-reported health since the law went into effect….

[T]he health and mortality data [are] still important information for policy makers, because [they] indicate[] that subsidies for health insurance are not a uniquely death-defying and therefore sacrosanct form of social spending. Instead, they’re more like other forms of redistribution, with costs and benefits that have to be weighed against one another, and against other ways to design a safety net. Subsidies for employer-provided coverage crowd out wages, Medicaid coverage creates benefit cliffs and work disincentives…. [“Is Obamacare a Lifesaver?The New York Times, March 29, 2017]

So does Roy Spencer:

In a theoretical sense, we can always work to make the environment “cleaner”, that is, reduce human pollution. So, any attempts to reduce the EPA’s efforts will be viewed by some as just cozying up to big, polluting corporate interests. As I heard one EPA official state at a conference years ago, “We can’t stop making the environment ever cleaner”.

The question no one is asking, though, is “But at what cost?

It was relatively inexpensive to design and install scrubbers on smokestacks at coal-fired power plants to greatly reduce sulfur emissions. The cost was easily absorbed, and electricty rates were not increased that much.

The same is not true of carbon dioxide emissions. Efforts to remove CO2 from combustion byproducts have been extremely difficult, expensive, and with little hope of large-scale success.

There is a saying: don’t let perfect be the enemy of good enough.

In the case of reducing CO2 emissions to fight global warming, I could discuss the science which says it’s not the huge problem it’s portrayed to be — how warming is only progressing at half the rate forecast by those computerized climate models which are guiding our energy policy; how there have been no obvious long-term changes in severe weather; and how nature actually enjoys the extra CO2, with satellites now showing a “global greening” phenomenon with its contribution to increases in agricultural yields.

But it’s the economics which should kill the Clean Power Plan and the alleged Social “Cost” of Carbon. Not the science.

There is no reasonable pathway by which we can meet more than about 20% of global energy demand with renewable energy…the rest must come mostly from fossil fuels. Yes, renewable energy sources are increasing each year, usually because rate payers or taxpayers are forced to subsidize them by the government or by public service commissions. But global energy demand is rising much faster than renewable energy sources can supply. So, for decades to come, we are stuck with fossil fuels as our main energy source.

The fact is, the more we impose high-priced energy on the masses, the more it will hurt the poor. And poverty is arguably the biggest threat to human health and welfare on the planet. [“Trump’s Rollback of EPA Overreach: What No One Is Talking About,” Roy Spencer, Ph.D.[blog], March 29, 2017]

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I mentioned the Benedict Option in “Independence Day 2016: The Way Ahead,” quoting Bruce Frohnen in tacit agreement:

[Rod] Dreher has been writing a good deal, of late, about what he calls the Benedict Option, by which he means a tactical withdrawal by people of faith from the mainstream culture into religious communities where they will seek to nurture and strengthen the faithful for reemergence and reengagement at a later date….

The problem with this view is that it underestimates the hostility of the new, non-Christian society [e.g., this and this]….

Leaders of this [new, non-Christian] society will not leave Christians alone if we simply surrender the public square to them. And they will deny they are persecuting anyone for simply applying the law to revoke tax exemptions, force the hiring of nonbelievers, and even jail those who fail to abide by laws they consider eminently reasonable, fair, and just.

Exactly. John Horvat II makes the same point:

For [Dreher], the only response that still remains is to form intentional communities amid the neo-barbarians to “provide an unintentional political witness to secular culture,” which will overwhelm the barbarian by the “sheer humanity of Christian compassion, and the image of human dignity it honors.” He believes that setting up parallel structures inside society will serve to protect and preserve Christian communities under the new neo-barbarian dispensation. We are told we should work with the political establishment to “secure and expand the space within which we can be ourselves and our own institutions” inside an umbrella of religious liberty.

However, barbarians don’t like parallel structures; they don’t like structures at all. They don’t co-exist well with anyone. They don’t keep their agreements or respect religious liberty. They are not impressed by the holy lives of the monks whose monastery they are plundering. You can trust barbarians to always be barbarians. [“Is the Benedict Option the Answer to Neo-Barbarianism?Crisis Magazine, March 29, 2017]

As I say in “The Authoritarianism of Modern Liberalism, and the Conservative Antidote,”

Modern liberalism attracts persons who wish to exert control over others. The stated reasons for exerting control amount to “because I know better” or “because it’s good for you (the person being controlled)” or “because ‘social justice’ demands it.”

Leftists will not countenance a political arrangement that allows anyone to escape the state’s grasp — unless, of course, the state is controlled by the “wrong” party, In which case, leftists (or many of them) would like to exercise their own version of the Benedict Option. See “Polarization and De Facto Partition.”

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Theodore Dalrymple understands the difference between terrorism and accidents:

Statistically speaking, I am much more at risk of being killed when I get into my car than when I walk in the streets of the capital cities that I visit. Yet this fact, no matter how often I repeat it, does not reassure me much; the truth is that one terrorist attack affects a society more deeply than a thousand road accidents….

Statistics tell me that I am still safe from it, as are all my fellow citizens, individually considered. But it is precisely the object of terrorism to create fear, dismay, and reaction out of all proportion to its volume and frequency, to change everyone’s way of thinking and behavior. Little by little, it is succeeding. [“How Serious Is the Terrorist Threat?City Journal, March 26, 2017]

Which reminds me of several things I’ve written, beginning with this entry from “Not-So-Random Thoughts (VI)“:

Cato’s loony libertarians (on matters of defense) once again trot out Herr Doktor Professor John Mueller. He writes:

We have calculated that, for the 12-year period from 1999 through 2010 (which includes 9/11, of course), there was one chance in 22 million that an airplane flight would be hijacked or otherwise attacked by terrorists. (“Serial Innumeracy on Homeland Security,” Cato@Liberty, July 24, 2012)

Mueller’s “calculation” consists of an recitation of known terrorist attacks pre-Benghazi and speculation about the status of Al-Qaeda. Note to Mueller: It is the unknown unknowns that kill you. I refer Herr Doktor Professor to “Riots, Culture, and the Final Showdown” and “Mission Not Accomplished.”

See also my posts “Getting It All Wrong about the Risk of Terrorism” and “A Skewed Perspective on Terrorism.”

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This is from my post, “A Reflection on the Greatest Generation“:

The Greatest tried to compensate for their own privations by giving their children what they, the parents, had never had in the way of material possessions and “fun”. And that is where the Greatest Generation failed its children — especially the Baby Boomers — in large degree. A large proportion of Boomers grew up believing that they should have whatever they want, when they want it, with no strings attached. Thus many of them divorced, drank, and used drugs almost wantonly….

The Greatest Generation — having grown up believing that FDR was a secular messiah, and having learned comradeship in World War II — also bequeathed us governmental self-indulgence in the form of the welfare-regulatory state. Meddling in others’ affairs seems to be a predilection of the Greatest Generation, a predilection that the Millenials may be shrugging off.

We owe the Greatest Generation a great debt for its service during World War II. We also owe the Greatest Generation a reprimand for the way it raised its children and kowtowed to government. Respect forbids me from delivering the reprimand, but I record it here, for the benefit of anyone who has unduly romanticized the Greatest Generation.

There’s more in “The Spoiled Children of Capitalism“:

This is from Tim [of Angle’s] “The Spoiled Children of Capitalism“:

The rot set after World War II. The Taylorist techniques of industrial production put in place to win the war generated, after it was won, an explosion of prosperity that provided every literate American the opportunity for a good-paying job and entry into the middle class. Young couples who had grown up during the Depression, suddenly flush (compared to their parents), were determined that their kids would never know the similar hardships.

As a result, the Baby Boomers turned into a bunch of spoiled slackers, no longer turned out to earn a living at 16, no longer satisfied with just a high school education, and ready to sell their votes to a political class who had access to a cornucopia of tax dollars and no doubt at all about how they wanted to spend it….

I have long shared Tim’s assessment of the Boomer generation. Among the corroborating data are my sister and my wife’s sister and brother — Boomers all….

Low conscientiousness was the bane of those Boomers who, in the 1960s and 1970s, chose to “drop out” and “do drugs.”…

Now comes this:

According to writer and venture capitalist Bruce Gibney, baby boomers are a “generation of sociopaths.”

In his new book, he argues that their “reckless self-indulgence” is in fact what set the example for millennials.

Gibney describes boomers as “acting without empathy, prudence, or respect for facts – acting, in other words, as sociopaths.”

And he’s not the first person to suggest this.

Back in 1976, journalist Tom Wolfe dubbed the young adults then coming of age the “Me Generation” in the New York Times, which is a term now widely used to describe millennials.

But the baby boomers grew up in a very different climate to today’s young adults.

When the generation born after World War Two were starting to make their way in the world, it was a time of economic prosperity.

“For the first half of the boomers particularly, they came of age in a time of fairly effortless prosperity, and they were conditioned to think that everything gets better each year without any real effort,” Gibney explained to The Huffington Post.

“So they really just assume that things are going to work out, no matter what. That’s unhelpful conditioning.

“You have 25 years where everything just seems to be getting better, so you tend not to try as hard, and you have much greater expectations about what society can do for you, and what it owes you.”…

Gibney puts forward the argument that boomers – specifically white, middle-class ones – tend to have genuine sociopathic traits.

He backs up his argument with mental health data which appears to show that this generation have more anti-social characteristics than others – lack of empathy, disregard for others, egotism and impulsivity, for example. [Rachel Hosie, “Baby Boomers Are a Generation of Sociopaths,” Independent, March 23, 2017]

That’s what I said.

The Capitalist Paradox Meets the Interest-Group Paradox

An insightful post at Imlac’s Journal includes this quotation:

Schumpeter argued the economic systems that encourage entrepreneurship and development will eventually produce enough wealth to support large classes of individuals who have no involvement in the wealth-creation process. This generates apathy or even disgust for market institutions, which leads to the gradual takeover of business by bureaucracy, and eventually to full-blown socialism. [Matt McCaffrey, “Entrepreneurs and Investment: Past, Present, … Future?,” International Business Times, December 9, 2011]

This, of course, is the capitalist paradox, of which the author of Imlac’s Journal writes. He concludes with these observations:

[U]nder statist regimes, people’s choices are limited or predetermined. This may, in theory, obviate certain evils. But as McCaffrey points out, “the regime uncertainty” of onerous and ever changing regulations imposed on entrepreneurs is, ironically, much worse than the uncertainties of the normal market, to which individuals can respond more rapidly and flexibly when unhampered by unnecessary governmental intervention.

The capitalist paradox is made possible by the “comfort factor” invoked by Schumpeter. (See this, for example.) It is of a kind with the foolishness of extreme libertarians who decry defense spending and America’s “too high” rate of incarceration, when it is such things that keep them free to utter their foolishness.

The capitalist paradox also arises from the inability and unwillingness of politicians and voters to see beyond the superficial aspects of legislation and regulation. In Bastiat‘s words,

a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

The unseen effects — the theft of Americans’ liberty and prosperity — had been foreseen by some (e.g., Tocqueville and Hayek). But their wise words have been overwhelmed by ignorance and power-lust. The masses and their masters are willfully blind and deaf to the dire consequences of the capitalist paradox because of what I have called the interest-group paradox:

The interest-group paradox is a paradox of mass action….

Pork-barrel legislation exemplifies the interest-group paradox in action, though the paradox encompasses much more than pork-barrel legislation. There are myriad government programs that — like pork-barrel projects — are intended to favor particular classes of individuals. Here is a minute sample:

  • Social Security, Medicare, and Medicaid, for the benefit of the elderly (including the indigent elderly)
  • Tax credits and deductions, for the benefit of low-income families, charitable and other non-profit institutions, and home buyers (with mortgages)
  • Progressive income-tax rates, for the benefit of persons in the mid-to-low income brackets
  • Subsidies for various kinds of “essential” or “distressed” industries, such as agriculture and automobile manufacturing
  • Import quotas, tariffs, and other restrictions on trade, for the benefit of particular industries and/or labor unions
  • Pro-union laws (in many States), for the benefit of unions and unionized workers
  • Non-smoking ordinances, for the benefit of bar and restaurant employees and non-smoking patrons.

What do each of these examples have in common? Answer: Each comes with costs. There are direct costs (e.g., higher taxes for some persons, higher prices for imported goods), which the intended beneficiaries and their proponents hope to impose on non-beneficiaries. Just as importantly, there are indirect costs of various kinds (e.g., disincentives to work and save, disincentives to make investments that spur economic growth). (Exercise for the reader: Describe the indirect costs of each of the examples listed above.)

You may believe that a particular program is worth what it costs — given that you probably have little idea of its direct costs and no idea of its indirect costs. The problem is millions of your fellow Americans believe the same thing about each of their favorite programs. Because there are thousands of government programs (federal, State, and local), each intended to help a particular class of citizens at the expense of others, the net result is that almost no one in this fair land enjoys a “free lunch.” Even the relatively few persons who might seem to have obtained a “free lunch” — homeless persons taking advantage of a government-provided shelter — often are victims of the “free lunch” syndrome. Some homeless persons may be homeless because they have lost their jobs and can’t afford to own or rent housing. But they may have lost their jobs because of pro-union laws, minimum-wage laws, or progressive tax rates (which caused “the rich” to create fewer jobs through business start-ups and expansions).

The paradox that arises from the “free lunch” syndrome is…. like the paradox of panic, in that there is a  crowd of interest groups rushing toward a goal — a “pot of gold” — and (figuratively) crushing each other in the attempt to snatch the pot of gold before another group is able to grasp it. The gold that any group happens to snatch is a kind of fool’s gold: It passes from one fool to another in a game of beggar-thy-neighbor, and as it passes much of it falls into the maw of bureaucracy.

[The interest-group paradox] has dominated American politics since the advent of “progressivism” in the late 1800s. Today, most Americans are either “progressives” (whatever they may call themselves) or victims of “progressivism.” All too often they are both.

Related posts:
Democracy and Liberty
The Interest-Group Paradox
Is Statism Inevitable?
Inventing “Liberalism”
The Price of Government
Fascism and the Future of America
The Indivisibility of Economic and Social Liberty
Law and Liberty
The Devolution of American Politics from Wisdom to Opportunism
The Price of Government Redux
The Near-Victory of Communism
The Mega-Depression
Tocqueville’s Prescience
Accountants of the Soul
Ricardian Equivalence Reconsidered
The Real Burden of Government
Rawls Meets Bentham
Is Liberty Possible?
The Left
The Divine Right of the Majority
The “Forthcoming Financial Collapse”
Estimating the Rahn Curve: Or, How Government Inhibits Economic Growth
The Deficit Commission’s Deficit of Understanding
Our Enemy, the State
Understanding Hayek
The Bowles-Simpson Report
The Bowles-Simpson Band-Aid
The Stagnation Thesis
America’s Financial Crisis Is Now
Utilitarianism and Psychopathy
Estimating the Rahn Curve: A Sequel
Lay My (Regulatory) Burden Down
The Burden of Government
Economic Growth Since World War II
More Evidence for the Rahn Curve
Obamacare, Slopes, Ratchets, and the Death-Spiral of Liberty