• Uncategorized

    Obama and the Olympics

    Let me just say that if the Obamas do manage to bring home the Olympics for Chicago, I’m looking forward to reading the inevitable Victor David Hanson article about “bread and circuses“.  If he hasn’t written it already.  It’s pretty embarrassing that these empty spectacles are entering into the patron-state, client-citizen relationship just as they did in decaying Rome.

  • Beware of Specialists

    Beware of Specialists – Sowell

    I just finished reading Sowell’s Knowledge and Decisions and thought I should transcribe one of his critiques of expertise for this series.  It’s difficult to decide what part of the book to offer, as one of the book’s main two themes is a criticism of “rule by experts”.  Three fourths of the last eighty-page chapter constitute a sustained blistering criticism of the political contributions of “intellectuals”.  But I think the heavily abridged selection below from pages 102-104 presents a coherent (and less polemical) version of his argument.

    Sowell contrasts different decision making processes.  He calls the process of intellectuals “articulation” – linguistic elaboration of premises and logical conclusions.  Social and economic processes, on the other hand, may be completely unarticulated, in that no particular individual may be able to explain why they are beneficial.  Nonetheless, through price (and other feedback) systems they effectively convey objective knowledge about costs and preferences, despite their silence on the exact source of this information.

    Given the imperfections of language and the limitations of specific evidence, it is by no means a foregone conclusion that the mere formally logical articulation is in fact more rational, much less empirically correct  When the choice between the two processes is not within one individual but between one individual and another (or between one group and another), it is even less likely that the more articulate position  is the more valid position.  This is not an argument for mysticism rather than logic.  It is simply a recognition that the weight of generalized but unrecorded experience – of the individual or of the culture – may be greater than the weight of other experience which happens to have been written down and spelled out….

    When culture is conceived of as an evolutionary product – an ecology of human relations – it is by no means clear that any and all well-articulated reasons for changing particular parts of this social ecology must be valid.  Even if plausible in the specific case, a policy’s unintended consequences throughout a complex system is a weighty consideration.  Articulated rationality can seldom predict very far or very specifically, and much depends on the speed and accuracy of social feedback mechanisms – and on whether the feedback includes incentives to adjust or abandon counterproductive policies….

    In short, the Darwinian “natural selection” principle may mean a natural selection of the “fittest” situation or process, not necessarily individuals.  The degree of rationality in the process is by no means limited to the degree of rationality of the individuals, as is often erroneously claimed.  Rather, “mankind has achieved things which have not been designed or understood by any individual,” though their value has been retrospectively authenticated by millions who could judge the results without being able to judge – much less design – the process.

  • Beware of Specialists

    Beware of Specialists – Hayek

    A large part of the political narrative is the celebration of elites and denigration of populism, or vice versa.  Personally, I find myself instinctively disgusted by the tone and politics of most politicians commonly described as “populist”.  But I doubt that a more or less complete political ideology requires that one affiliate with one of the two camps.  Definitions of elitism and populism range so widely as to border on absolute incoherence.

    But there is one sense in which I think a philosophy glossed as “populist” has a crucial advantage over “elitist” conceptions.  That is to the extent that populism distrusts the policy “solutions” of experts and specialists.  In short, specialists err because of an insufficiently general viewpoint.  While well informed as to the benefits of a certain market intervention, they rarely consider or care for the costs that these interventions will impose in areas outside of their purview.  Furthermore, they often mistake the subjective preferences of some experts within a certain field for an objective preference.

    Rather than trying to unfold this criticism in all its complexity myself, I will be initiating a Commentarius series quoting various theorists’ contributions to this series.  The first quote is an extensive set of excerpts from pages 98-99 of Hayek’s Road to Serfdom.  Hayek notes that specialists are frustrated by what they often fail to recognize is the multiplicity of ends.  Their frustration can yield a desire to simply impose their own, necessarily subjective, desired ends.

    There is little question that almost every one of the technical ideals of our experts could be realized within a comparatively short time if to achieve them were made the sole aim of humanity.  There is an infinite number of good things, which we all agree are highly desirable as well as possible, but of which we cannot hope to achieve more than a few within our lifetime, or which we can hope to achieve only very imperfectly.  It is the frustration of his ambitions in his own field which makes the specialist revolt against the existing order.  We all find it difficult to bear to see things left undone which everybody must admit are both desirable and possible.  That these things cannot all be done at the same time, that any one of them can be achieved only at the sacrifice of others, can be seen only by taking into account factors which fall outside any specialism, which can be appreciated only by a painful intellectual effort – the more painful as it forces us to see against a wider background the objects to which most of our labors are directed and to balance them against others which lie outside our immediate interest and for which, for that reason, we care less….

    In our predilections and interests we are all in some measure specialists.  And we all think that our personal order of values is not merely personal but that in a free discussion among rational people we would convince the others that ours is the right one.  The lover of the countryside who wants above all that its traditional appearance should be preserved and that the blots already made by industry on its fair face should be removed, no less than the health enthusiast who wants all the picturesque but unsanitary old cottages cleared away, or the motorist who wishes the country cut up by big motor roads, the efficiency fanatic who desires the maximum of specialization and mechanization no less than the idealist who for development of personality wants to preserve as many independent craftsmen as possible, all know that their aim can be fully achieved only by planning – and they all want planning for that reason.  But, of course, the adoption of the social planning for which they clamor can only bring out the concealed conflict between their aims….

    The hopes they place in planning, however, are the result not of a comprehensive view of society but rather of a very limited view and often the result of a great exaggeration of the importance of the ends they place foremost.

  • Uncategorized

    Constitutional Law – Barnett v. Kerr

    There is a great debate going on at the Volokh Conspiracy on the meaning of constitutional law.  It reminds me of the more lively Volokh of old.

    A snippet of Barnett’s blistering criticism:

    In support of his reasonable prediction, Orin offers the following equally reasonable proposition: “If there is a federalism issue that doesn’t have a lot of practical importance, there’s a decent chance five votes exist for the pro-federalism side. . . . As soon as the issue takes on practical importance, however, the votes generally aren’t there.” But what type of proposition is this? Is it “the Constitution”? Is it even “constitutional law”? If it is neither, then I do not see how it is responsive to the question of whether a mandate to buy private insurance in constitutional, unless one redefines “constitutional” to mean “whatever the Court can be predicted to rule.” THIS is what Orin calls a “semantic” issue, which it is, but it is not merely semantic. It is also substantive and very important issue to boot.

    And Kerr’s essentially agnostic response:

    Of course, Randy is welcome to use his label, in which his vision of the Constitution is “the real Constitution,” while the Constitution that others believe in are false idols. I envision Randy coming down from Mt. Sinai with a copy of Restoring the Lost Constitution, as the Israelites look up from their worship of the golden calf of the United States Reports. My point is only that the choice of label is a rhetorical move, not a jurisprudential one. I recognize it is an important rhetorical move: the believers-in-the-true-God-versus-the-heathens meme has worked for millenia, and I gather from what Randy says that it is a key part of trying to popularize his view of how the Constitution should be construed. But I think it’s important to recognize the rhetorical move.

  • Quote

    Mises on God?

    An interesting quote on theology from Mises’s Human Action:

    Scholastic philosophers and theologians and likewise Theists and Deists of the Age of Reason conceived an absolute and perfect being, unchangeable, omnipotent, and omniscient, and yet planning and acting, aiming at ends and employing means for the attainment of these ends. But action can only be imputed to a discontented being, and repeated action only to a being who lacks the power to remove his uneasiness once and for all at one stroke. An acting being is discontented and therefore not almighty. If he were contented, he would not act, and if he were almighty, he would have long since radically removed his discontent. For an all-powerful being there is no pressure to choose between various states of uneasiness; he is not under the necessity of acquiescing in the lesser evil. Omnipotence would mean the power to achieve everything and to enjoy full satisfaction without being restrained by any limitations. But this is incompatible with the very concept of action. For an almighty being the categories of ends and means do not exist. He is above all human comprehension, concepts, and understanding. For the almighty being every “means” renders unlimited services, he can apply every “means” for the attainment of any ends, he can achieve every end without the employment of any means. It is beyond the faculties of the human mind to think the concept of almightiness consistently to its ultimate logical consequences. The paradoxes are insoluble. Has the almighty being [p. 70] the power to achieve something which is immune to his later interference? If he has this power, then there are limits to his might and he is no longer almighty; if he lacks this power, he is by virtue of this fact alone not almighty.

  • Americans for Tax Reform,  Health Care

    Inside the Twisted Mind of a Government Tax Planner

    This post was originally written for Americans for Tax Reform, where I was an Associate (intern):

    Title 1, Subtitle D of the Senate Finance Committee’s Chairman’s Mark establishes “Shared Responsibility” requirements for individuals and employers. For employers, this requirement entails a tax linked to the number of their employees receiving subsidies in the General Fund.

    For each full time employee (defined as working 30 hours or more each week) enrolled in a state exchange and receiving a tax credit, the employer would be required to pay a flat dollar amount… equal to the average tax credit in the state exchanges.

    The tax is no doubt intended to strong-arm employers into providing insurance. But what does it actually do? In essence, the fine punishes employers who hire low-wage employees. The value of subsidized employee’s productivity decreases by the amount of the tax the employer is expected to play – so their market wage will drop by the same amount. If this wage falls below the minimum wage – likely, because their wages are already low – then many employers will simply fire them.

    Realizing this dilemma, the tax planners attempt to “fix” this problem with an arcane tax cap:

    The assessment is capped for all employers at an amount equal to $400 multiplied by the total number of employees at the firm (regardless of how many are receiving the state exchange credit).

    Baucus’s planners provide a helpful scenario to demonstrate how the cap will affect incentives:

    For example, Employer A, who does not offer health coverage, has 100 employees, 30 of whom receive a tax credit for enrolling in a state exchange offered plan. If the flat dollar amount set by the Secretary of HHS for that year is $3,000, Employer A should owe $90,000. Since the maximum amount an employer must pay per year is limited to $400 multiplied by the total number of employees (for Employer A, 100), however, Employer A must pay only $40,000 (the lesser of the $40,000 maximum and the $90,000 calculated fee).

    Because the employer is paying a $400 penalty per employee, rather than a $3000 penalty per subsidized employee, the employer has no specific incentive to decrease the wages of subsidized workers. Problem solved, right? Wrong.

    Now the employer has an incentive to lower the wages of all of his workers (or fire them if they are already at minimum wage). Instead of “fixing” the costs created by the original tax, the government planners have spread it across a new group of employees. The tax penalty is of course lower – but this simply means it will be less successful in achieving its questionable objective.

    And what if the company in the above example had only 13 workers receiving subsidies? Then the penalty paid would be $39,000 (13 subsidized employees times the $3000 average tax credit, which is less than the $40,000 cap). Now of course, the incentive is to decrease the wages or fire only the subsidized workers. And because the tax is higher, it affects each of these subsidized (and therefore “low-wage”) workers more strongly.

    Other costs abound. Because the fee is applied only to subsidized employees working for more than 30 hours a week, companies can dodge the fee by reducing these employees’ hours. Only companies with more than 50 employees are subject to fees, so companies have an incentive to reduce the scale of their operations, or to spin off part of their business as a smaller subsidiary. Seeking these new arrangements bears a cost on the company and the economy at large. Even determining what arrangement is most efficient bears a cost on a company – even if it ultimately decides the best option is to provide health insurance!

    The tax planners have attempted to “fix the market’s behavior, and then fix the perverse consequences of their original intervention. Inevitably a new perverse consequence is created. All of this for what? Wages are determined by productivity – this measure only strong-arms employers into offering compensation in a less liquid form than cash. However undesirable the other health care goals of central planners may be, none of them require an employee mandate. Planners could just as easily force citizens to buy health care with an individual mandate – then consumers would have at least the option of directly picking their preferred level of insurance. Community rating, guaranteed issue, pre-existing coverage, and deductible caps do not rely in any important sense on an employer mandate. Only Baucus’s arbitrary desire that employer insurance dominate the market is satisfied by this harmful web of byzantine regulations. Employers, workers, and taxpayers, as usual, are left with the bill.

  • Uncategorized

    Who Cracks the Code?

    One often hears that this or that political statement traffics in “coded” racist imagery.  McCain commercials showing white women or black men or even white men used coded racial imagery.  Libertarians complaining about “government thugs” must be appealing to coded racist terminology.  Political cultural cliches are inevitably a racist code.  Fears about redistribution are really coded fears of racial redistribution.  As Matthew Yglesias puts it:

    Well, obviously you could read just about anything as a coded racist appeal. And I think a case could be made that you’d be right to.

    But what good is code?  Self-described racists like the Aryan Nation don’t bother to traffic in codes – they rely on explicit appeals to racial solidarity.  If racists made up a vast majority, or even a large plurality, of the committed opposition to President Obama, couldn’t they more effectively communicate their complaints to each other without relying on obscure and hard to understand codes?  A code only increases the costs of political coordination.  Only those who take the time to deconstruct the racial meanings will get the message.  Or, you can only find the racism if you are looking for it.

    Inevitably, this means that progressives will crack the code first.  As remarkable as it may seem, few conservative or libertarian Americans support candidates and movements merely for the strength of their rhetoric’s racist undertones.  If they did, they would have candidates and movements with worse actual tones – much more relevant to the only vaguely political majority that they must win over.  The cost of good racist codes would be the opportunity cost paid in foregone good rhetoric.  Progressives, on the other hand, are generally disinterested in absorbing core conservative or libertarian beliefs.  Policing rhetoric for accidental racial double-entendres is much more politically fruitful.

    Cryptologist-in-Chief Jimmy Carter recently determined that “an overwhelming portion of the intensely demonstrated animosity toward President Barack Obama is based on the fact that he is a Black man.”  He is not alone, judging from Politico’s Arena. Progressives, as usual, can see far more racism than conservatives.  James Zogby explains how they do it:

    Look at the signs, read the slogans, listen to the speeches, look into the eyes of the marchers and taunters!

    I was present at the 9-12 DC rally against President Obama, so perhaps I am a part of the “intensely demonstrated animosity”.  I certainly didn’t feel like a violent, hate-filled, racist troglodyte.  More like a cheerful, hopeful, freedom-loving idealist.  And that’s how I interpreted the crowds around me.  Perhaps Zogby knows better than I do.  Or perhaps when our methodology consists in “looking into the eyes” of our opponents, we see just what we want to.