Archive for the ‘Capitalism & Libertarian Philospohy’ Category.

Libertarians Are Terrible At Persuasion in the Social Justice Language of Power and Privilege, and We Should Be Better At It. There is Definitely Common Ground to Be Explored

Why use the language of Power and Privilege at all?

One of my favorite political books is Arnold Kling's Three Languages of Politics (free download here).  It is a great reference for understanding why so much of politics devolves into talking past one another, and is a great guide for those who want to be persuasive outside of one's own tribe.

As background, I am a life-in-the-real-world (LIRW) libertarian who is most comfortable arguing on the freedom-coercion axis and based on economic efficiency.  LIRW libertarian means that I don't answer every policy question with a knee-jerk anarcho-capitalist get-the-government-out-of-the-way policy prescription.  I accept that government coercion is not going away and I can accept some state coercion in support of certain policy goals.   However, in doing so I assign something I call the Cost of Coercion to policy proposals in balancing out the costs and benefits and the coercion cost I assign will be high.  As such, then, I tend to discuss policy in terms of meeting goals with maximum economic efficiency and minimum levels of coercion.

In this article I want to talk about my (and other libertarians') attempts to engage (or failures to engage) Progressives on their preferred Oppressor-Oppressed axis.  While I think everyone benefits from learning to engage with folks who speak different political languages, doing so is particularly important for libertarians in the United States because we are the odd man out in the current two-party system.  Half our issues (e.g. free markets, limited government) require common cause with Conservatives while the other half (e.g., open immigration, drug legalization, gay marriage) require making common cause with Progressives.  In this article I want to talk about my (and other libertarians') attempts to engage Progressives on the Oppressor-Oppressed axis.

To start, I feel like I am pretty good at understanding the Progressive point of view on many issues (e.g. my intellectual Turing test here on Progressive arguments for the minimum wage).

However, on the airplane yesterday I was looking back at my proposed trans-partisan plan on climate action and found I did little in it to excite Progressives.  I still think that this is a very fair plan that could appeal to both Progressives and Conservatives, but I realize in retrospect that it does almost nothing to sell the plan to Progressives.  The article is mostly economic efficiency arguments that can sway Conservatives (at times) but seldom have a lot of power with Progressives.  Sure, the plan gives Progressives what they are asking for (a carbon tax) but I acknowledge in the article that there is evidence from the Washington State carbon tax vote that Progressives don't actually understand the benefits of a carbon tax very well.  Here, for example, is how I discussed the shift from a myriad of scattershot government interventions to the carbon tax:

Point 1: Impose a Federal carbon tax on fuel....So what is the best way to reduce CO2 -- by substituting gas for coal?   By more conservation?  By solar, or wind?  With biofuels?  With a carbon tax, we don't have to figure it out or have politicians picking winners.  This is why a Pigovian tax on carbon in fuels is going to be the most efficient possible way to reduce CO2 production.   Different approaches will be tested in the marketplace....

Point 3:  Eliminate all the stupid stuff...[in turn] I propose that we eliminate all the current Federal subsidies, mandates, and prohibitions that have been justified by climate change. Ethanol rules and mandates, solar subsidies, wind subsidies, EV subsidies, targeted technology investments, coal plant bans, pipeline bans, drilling bans -- it all should go.  The carbon tax does the work.

Picture the social justice warriors at some college today -- are they going to be excited by this?  I doubt it.  But what if I said this instead:

We should shift climate efforts from all the disparate, scattershot efforts today to a neutral carbon tax that is impossible for the powerful and privileged to game to their advantage. Current climate programs are all more likely to benefit Wall Street bankers and crony political interests than they are to help the climate.  For example, the Koch brothers have publicly admitted that their company is one of the largest beneficiaries of the current ethanol program, which was meant to benefit the climate but instead just pumps profits into a few well-connected multi-billion dollar corporations, while taking food from the poor and feeding it into people's gas tanks.

This second version, while it needs some polish, is clearly more compelling to a Progressive, and all of it is something I believe -- It's just not the first way I naturally defend the plan.  I need to get better on this.

Power and Privilege are a Useful Framework (among others) for Analyzing History and Public Policy

I have studied a lot of history in my life, mostly as a hobby.  When I first started studying history in secondary school in the 1980's, it was almost all presented as "great man" history -- i.e. history can be described as driven primarily by the actions of prominent individuals.  Julius Caesar did this and Henry the VIII did this other thing, etc.   Really, this approach to history was being overtaken even 100 years earlier than this, but I didn't really get exposed to other approaches until college.  There, I began to learn that Marxist historians in the 20th century brought a different view, that most of history was driven by big social and economic and demographic changes rather than individuals -- think Hari Seldon if you know that reference.

But the Marxists had a familiar problem (other than the obvious one where they explain every event in history as a class struggle and proto-Marxist revolution): They brought a great new tool to the analysis of history but then declared that it was the ONLY correct tool.  But there are plenty of historical turns where individuals mattered.  The revolution in Rome from the Republic to the Empire was probably inevitable from the large forces at work, but was the end of the civil wars in favor of decades of peace inevitable without the acumen of Augustus?

Other groups have contributed yet more lenses for looking at history.  I remember when it became de rigueur that history courses include lectures on life of the common person, the experience of women, and on other groups that don't have a big presence in the traditional historic record.  I initially rolled my eyes thinking that this all was a politically correct placeholder, but I eventually found it fascinating -- to the extent that I have since taken whole courses solely on the experience of common people in the Middle Ages and the Roman Empire.

To this same end, power and privilege is yet another useful framework for analyzing history.  The problem in my mind comes in the fact that so many students go through college, even graduate from college in history, looking at the world ONLY through this one lens.  To me this is madness.  It is like trying to play golf with just a 2-iron or to do math with just cosines.

Libertarians and the Power & Privilege Language

As demonstrated in my climate example earlier, there is no reason libertarians cannot engage progressives on the power and privilege or oppressor/oppressed axis.  Libertarians care a lot about the ability of the individual to be able to make decisions and live their life without coercion.  Many of the same things that upset progressives -- racism, sexism, various sorts of sexual prohibition, narcotics prohibition, fraud, migration restrictions, military interventionism -- also upset libertarians.  Libertarians and progressives both talk a lot about power and abuse of power, though granted they fear different sorts of power: libertarians tend to have more fear of government power, while progressives tend to fear any sort of economic power.  But even getting that far is at least a basis for meaningful discussion.  If you want to have an interesting discussion with a progressive, do what I did with one of my progressive in-laws and watch Michael Moore's Capitalism: A Love Story together.  The progressive will gladly watch it with you because they will think you are about to get schooled.  But watch as the movie unfolds -- failure after failure that Moore wants to describe to capitalism are in fact mostly due to crony government interventions to which libertarians are strongly opposed.  There is a surprising amount of common libertarian-progressive ground in the movie if you look past Moore's interpretation of these failures and pay attention to their actual causes.

This is what I had in mind when I wrote my recent article in Regulation Magazine, "How Labor Regulation Harms Unskilled Workers", to try to write something about labor regulation that was pitched more to progressives than to libertarians and conservatives.  Too often articles on the minimum wage focus solely on economic efficiency, or worse, on how labor market interventions negatively impact businesses.  When progressives see that something negatively impacts businesses, their first reaction is "awesome, let's do more of it!"  Not a great sales approach.   In my article, I was never going to convince progressives to give up on regulation of the terms and conditions of labor altogether -- it is simply too deeply ingrained in their philosophy that workers are powerless in the face of employers and need external protection.  But it might be possible to show progressives why something like the minimum wage can be a bad anti-poverty program that it actually tends to hurt the poorest and most vulnerable and least skilled.

The absolute best example I can think of how libertarian attempts to engage progressives have been terrible is the book by Nancy MacLean called Democracy in Chains.   The book makes the weird and not very well substantiated claim that James Buchanan, who won a Nobel Prize for his work in public choice theory, was heavily influenced by southern slavery supporters like John Calhoun, and thus, uh, public choice is racist or evil or something.  The book tends to get lauded by people who mostly like its thesis but did not read it and torn apart by academics who are hugely skeptical about its logic and factual basis.  The most amazing thing about the book is just how incurious Ms. MacLean is about public choice theory itself -- the head of the national organization of public choice economists is a professor on her own campus, with an office just a short walk away, yet she never consulted anyone in the field.

Here is why I highlight it, and not to beat up on a progressive who in turn beat up on a libertarian icon.  Public choice theory -- as I and most people who have studied it understand it -- should be tremendously interesting to progressives, so much so I think it could be a core text they study.  Not because I want to make them not-progressives (I will send them to Hayek for that) but because public choice theory says so much about how power and privilege are created and sustained.  Want to understand why Wall Street makes so much money and is so seemingly immune to accountability, check out public choice theory.  Want to know why you and I spend billions to subsidize profitable corporations like Boeing or Koch Industries, check out public choice theory.  Want to understand why public interventions often fail so you can make better interventions in the future, check out public choice theory.

The reason progressives don't look at public choice theory this way is in large part because libertarians have adopted public choice theory as their own and use it most often to push back on nearly every government intervention.  In particular, the Koch Brothers and Cato love public choice theory and use it to argue for small government, so in the tribal politics of the day, this means that progressives have to hate it.  I would argue that the best description of Nancy MacLean's approach to James Buchanan and public choice theory in her book (and her  more-than-apparent lack of desire to learn anything about it) is the fact that public choice theory is associated with the Koch Brothers and thus she wanted to bring it down to help bring down the Koch siblings who have become a progressive bete noire (despite their actually supporting a lot of progressive causes like gay marriage).  Ironically, from my limited reading, James Buchanan appears to have treated public choice more as a guide to good government than a trump card to be played against any government intervention.

This is why the book I would most like to write, if I had the academic chops and time to write it, would be "Public Choice for Progressives:  What James Buchanan can teach good government and equalizing power and privilege."  There are a lot of things libertarians and progressives are never going to agree on, but there are enough that we can agree on to make it worthwhile to learn their language.

What Socialists (and Most Other People) Don't Understand About The Oil Industry

This same failure has happened over and over, at one time or another in Russia and Mexico and now in Venezuela.  Some tried to make it happen in the 1970's in the US, and Elizabeth Warren would still like to try, I bet.  Socialists take over the oil industry and revel in the first months about all they money they are able to divert to "social" expenditures.  Then, in a few year, it all comes crashing down.  This tweet from Michael Moore five years ago gives you a good idea of the thinking.

Socialists have always seen production and wealth creation as some sort of magic, a fountain in the desert where piggy rich people push to the front and take more than their fair share.  Oil looks to them as the ultimate example of this -- wealth just flows out of the ground and evil rich people at Exxon grab it all for themselves.

But in fact, oil is just the opposite of the magic fountain.  It takes a huge quantity of money and brains to get even one drop of it in usable form to your car.  Imagine trying to figure out where even to look for oil when it is hiding far under ground.  Or having to poke holes a mile into the ground from structures standing in 1000 foot deep water in the Gulf of Mexico.  And then transporting the oil hundreds or thousands of miles by pipeline and ship and train and truck.  And then carefully refining the oil almost molecule by molecule in multi-billion dollar facilities.  And then getting the usable parts to the right people, including distribution outlets for you and I on almost every corner of town.

Right now gasoline in Phoenix goes for about $2.85 a gallon, which is about $2.40 before taxes.  This is 60 cents a quart, which compares to the retail price of a bottle of water of about $2.00-$2.50 a quart.  It's a freaking miracle of modernity that you can fill your car this inexpensively.

Anyway, it turns out that oil is the ultimate "you have to spend money to make money" kind of business.  And once you spend all that money, you investment immediately starts dying.  Oil companies have to completely rebuild retail gas stations every 20-30 years.  Refineries have to be constantly updated with really expensive improvements to take advantage of new technologies, to adjust to changing markets and regulations, and to handle different types of crude oil.  And then there is oil production.  Drill a well today and the moment you open it up, the production starts to fall off.  The flow will drop, the percentage of water might increase-- a million things can happen and all of them bad.  To keep wells flowing companies constantly have to reinvest their profits in reworking the wells (fracking and such) and adding enhanced recovery systems.  As fields deplete, new wells have to be drilled in new locations or at new depths, or else whole new fields have to be developed to replace them.

The "greedy and short-term-focused" oil companies reinvest much of their earnings to make sure the supply of oil is sustained.  The "enlightened" socialists harvest all the cash they can and hand it to their cronies, allowing the production assets to fall apart and, eventually, their economy to collapse.

If Socialists Understand the Free-Rider Problem, Then Why Are They Socialists?

There was a funny sideshow to the recent Supreme Court Janus v. AFSCME decision.  That decision essentially made it impossible for local or state governments to require that all employees pay support to certain public employee unions, even if they are not a member of that union and/or don't support that union's activities and, particularly, that union's political speech.  Progressives, many of whom feel increasingly confident to admit that they are socialists, rushed to point out that this was a death knell for these unions because of the free rider problem.  If workers who benefitted from the union's collective bargaining activities were not forced to pay, then what incentive exists for any one employee to pay the union if they still will enjoy the benefits without paying.  Soon, everyone will become a free rider and the union will die.  America's most famous socialist Bernie Sanders demonstrates that he understands the free rider problem completely in this

Sanders’ bill, called the Workplace Democracy Act, would remove several of the major barriers to organized labor’s growth.

It would ban “right to work” laws, which allow employees to opt out of paying union dues even though the union must still bargain on their behalf, leading to what unions call “free-riding.”

This is all very ironic.  Socialism fails for a number of reasons, but perhaps the easiest one to explain to laymen is the free-rider problem.  Anyone who has had to do group projects in school likely understands the concept to its core.  If all output belongs to the collective, and is divided up based on need rather than productivity or innovation or even diligent work, then where is the incentive for an individual to do anything?   The collectivization of agriculture in both China and Russia was a disaster (meaning millions died of starvation) because of this free rider effect.  If socialists understand the free rider problem, as they clearly do (at least in Janus v. AFSCME), how can they be socialists?

The answer to my question may also be in this legal case.  For the free rider problems in public unions in this case (and in private unions as well in the Sander plan linked above), progressives intend to use force as a solution.  If people don't see value in the union and don't want to pay, well they are going to have to be forced to do so anyway.  Literally, we will put free riders in jail.  You can probably get away with this solution for a niche issue like union dues is a generally law-abiding country like this one.  But even Stalin and Mao were not successful in getting more agricultural or industrial production at gunpoint, though they killed a lot of folks trying.  And if force did not work on rice production, imagine how well it will work, say, trying to get innovation out of someone's mind when that person has zero incentive to do anything but just show up for work.

A Few Thoughts on Recent Supreme Court Decisions

Trump vs. Hawaii More Interesting Than I Thought

The Conservative and Progressive responses to the Supreme Court's Trump vs. Hawaii decision that upheld v3.0 of the travel ban are pretty predictable -- Progressive writers have argued that of course it violated the first amendment because Trump made clear any number of times that he was animated by distrust of Muslims, while Conservatives said it was clearly not just aimed at Muslims (he included Chad!) but anyway it was a bad precedent to infer intent from campaign speeches even before he was President.

What I didn't know until I read Eugene Volokh was that there are some really interesting precedents that make immigration law one of the few areas effectively outside the Bill of Rights.  I don't really like what I see in this, but it is an issue I never understood before.  You really need to read the whole thing to get the gist, but here is his summary:

The U.S. has nearly unlimited power to decide when foreigners are admitted to the country, even based on factors (such as ideology, religion, and likely race and sex) that would be unconstitutional as to people already in the country.

Janus v. AFSCME Council 31 In An Alternate Universe

In this case, a state worker was suing to prevent a public employee union from deducting an "agency fee" from his paycheck despite the fact that he did not want to join the union.  The union argued that the employee benefited from their collective bargaining and should have to pay something for it.  Apparently the case turned on First Amendment issues -- while technically the union could not spend these agency fees on political speech, the reality is that money is fungible and at some level almost everything a public union does is political.

As a quick background, I totally support private union bargaining as a fundamental right under the First Amendment, though we could argue whether current law overly tips the power balance toward or away from unions vs. a free market.  On the other hand, I have deep, deep doubts about public sector unions, largely because there is no real bargaining going on.  In most cases, the public sector unions and the officials they are nominally bargaining with are on the same side and opposed to taxpayer interests.

So I am not unhappy to see public unions take a hit here, but addressing my concerns should be a legislative issue (as exemplified by a number of "right to work" states that have banned this practice).  But this is a judicial case and should not be dealing with legislative issues but issues of the law, and the case confuses me because I could easily see the Right and the Left arguing opposite sides on legal issues of this case given a slightly different world.  After all, requiring employees to pay these fees is a condition of employment -- wouldn't we expect Conservatives to support the right of employers to freely set the conditions of employment?  If these are too onerous, Conservatives would argue people would just not work there.  In this world, wouldn't we expect, then, Progressives to argue against such open-ended freedom for employers to set work conditions on the argument that there is a power imbalance between employer and worker -- exacerbated because the employer is the state in this case -- and they can't easily fight these onerous conditions?  Huge swaths of employment law, written mainly from the Left, are dedicated to circumscribing allowed employment conditions.

Milton Friedman, The Prophet

Milton Friedman once wrote, "If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand."

Today Simon Constable writes that Venezuela "which has the largest oil reserves in the world, is now considering the idea of importing the stuff."

Why Communism Always Devolves Into Heavy-Handed Authoritarianism

Every time one points out a historic failure of communism (most recently, for example, in Venezuela), Marxists will argue "well, that is not true communism."  Somehow they think that communism without heavy-handed exercise of state power is possible.  It is not.

Here is the latest example, from our own peoples' republic in California.  For reasons that are simply beyond me, no one in California wants to use market mechanisms and the power of prices to match supply and demand for water.  We use these market tools successfully in pretty much every other market, but not in water.  The result is that increasingly heavy-handed exercise of government power is necessary to match supply and demand.

Senate Bill 606 establishes a “governing body” to oversee all water suppliers, both private and public and will require extensive paperwork from those utility companies.

Assembly Bill 1668 is where it gets personal.  This establishes limits on indoor water usage for every person in California and the amount allowed will decrease even further over the next 12 years.

The bill, until January 1, 2025, would establish 55 gallons per capita daily as the standard for indoor residential water use, beginning January 1, 2025, would establish the greater of 52.5 gallons per capita daily or a standard recommended by the department and the board as the standard for indoor residential water use, and beginning January 1, 2030, would establish the greater of 50 gallons per capita daily or a standard recommended by the department and the board as the standard for indoor residential water use. The bill would impose civil liability for a violation of an order or regulation issued pursuant to these provisions, as specified.

If you’re wondering how the government would know how much water your family is using, the utility providers will be obligated to rat you out of face massive fines. And they’re encouraged to spy in all sorts of creative ways. They “shall use satellite imagery, site visits, or other best available technology to develop an accurate estimate of landscaped areas.”...

If you don’t plan to comply it’s going to be way cheaper to move. Here are the fines Californians will be looking at – and it’s not a typo – these fines are PER DAY.

(1) If the violation occurs in a critically dry year immediately preceded by two or more consecutive below normal, dry, or critically dry years or during a period for which the Governor has issued a proclamation of a state of emergency under the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code) based on drought conditions, ten thousand dollars ($10,000) for each day in which the violation occurs.

(2) For all violations other than those described in paragraph (1), one thousand dollars ($1,000) for each day in which the violation occurs.

All of this could easily be replaced with the simple expedient of allowing the price of water to rise until supply and demand matched, a solution that works for everything else and would provide the added benefit of giving financial incentives to seek out new sources of water.  If they are worried about prices for the poor, then they can have a subsidized rate for the first X gallons and then a market rate above that.  There are at least two reasons I think politicians don't do this, beyond just their socialist assumptions and distrust in markets

  1. The people who would most be hurt by market pricing for water -- farmers, golf course/resort owners, etc -- have a lot of political pull in the state and would prefer a regime where high-value uses are curtailed to save water for their potentially lower-value uses.  Just look at the carve-outs in the law for swimming pools, water features, and golf courses.
  2. Politicians like rationing, or more accurately they like being the rationers.  You can't generate political contributions from market pricing of water. But if you are the person doing rationing, then everyone is going to come to you and try to curry favor.

The simplest way to explain why Marxism fails is "incentives and information" -- planned economies shift economic decision-making from individuals who have the information and incentives to make the proper tradeoffs for their own set of circumstances and preferences and on to politicians whose main incentive is to see who is willing to do the most to curry favor with them.

Most Depressing Thing I Read Today

On the Dell web site, at the head of a no-export agreement I had to sign:

The U.S. government views exporting as a privilege, not a right.

Of course, my home state of Arizona considers every commercial transaction to be a privilege, not a right.

My View on the Source of Wealth in the Modern World

About 15 years ago, I wrote something I wanted to repeat here just because I keep looking for it and a lot of my old Typepad blog era stuff is hard to find.  The original post is gone but I quoted from it in 2005.

Since 1700, the GDP per capita in places like the US has risen, in real terms, over 40 fold.  This is a real increase in total wealth, created by the human mind.  And it was unleashed because the world began to change in some fundamental ways around 1700 that allowed the human mind to truly flourish.  Among these changes, I will focus on two:

  1. There was a philosophical and intellectual change where questioning established beliefs and social patterns went from being heresy and unthinkable to being acceptable, and even in vogue.  In other words, men, at first just the elite but soon everyone, were urged to use their mind rather than just relying on established beliefs
  2. There were social and political changes that greatly increased the number of people capable of entrepreneurship.  Before this time, the vast vast majority of people were locked into social positions that allowed them no flexibility to act on a good idea, even if they had one.  By starting to create a large and free middle class, first in the Netherlands and England and then in the US, more people had the ability to use their mind to create new wealth.  Whereas before, perhaps 1% or less of any population really had the freedom to truly act on their ideas, after 1700 many more people began to have this freedom. 

So today's wealth, and everything that goes with it (from shorter work hours to longer life spans) is the result of more people using their minds more freely.

At the time, perhaps to my shame, I had never even heard of Deirdre McCloskey nor her work that has been published in three volumes called the Bourgeois Era explaining what she calls the "great enrichening" (which I am slowly plowing through).  My thinking when I wrote this seems reasonably consistent with her conclusions, though she has obviously been a lot more systematic in thinking about it.  This exchange with Gregory Waymire is a short but quite readable window on her thinking.  She writes in part:

You're adopting a conventional and somewhat silly view that the bourgeoisie were especially diligent, when it is not true as fact and is anyway not the character of the bourgeoisie that
mattered to the Great Enrichment (which by the way was a factor of 30 per capita in countries that fully adopted economic liberalism, not the factor of 10 you quote: look at the passage again, and read slower and longer). Weber sometimes got this right, sometimes wrong. But people tend to read him as saying that higher savings and more diligence, Ben Franklin style (and even Ben did not actually do it), is what made us rich.

One trouble which such a conventional argument is an economic one that Solow-type models (and Smith- and Marx- and Weber- type models) that reduce growth to savings and labor effort are radically mistaken. What matters is human creativity released from ancient trammels....

What made us rich, I argue at no doubt tedious and unreadable length in the Bourgeois Era trilogy, is imagination, ingenuity, radical ideas released. They were released in turn by liberalism, Smith's "liberal plan of [social] equality, [economic] liberty, and legal [justice]."

The Conservatism of Progressives

Despite having a lot of respect for the intellect and the insane eclecticism of its author Tyler Cowen, I have never read the Complacent Class.  The title really did not intrigue me, and frankly from that title probably had the wrong vision of what the book was about.  That is, until I read George Will's recent review, in which he said in part:

In 1800, McCloskey says, the world’s economy was where Bangladesh’s economy now is, with no expectation of change. Today, most of the jobs that existed just a century ago are gone. And we are delighted that this protracted disruption occurred. Now, however, the Great Enrichment is being superseded by the Great Flinch, a recoil against the frictions and uncertainties — the permanent revolution — of economic dynamism. If this continues, the consequences, from increased distributional conflicts to decreased social mobility, are going to be unpleasant.

Although America is said to be — and many Americans are — seething about economic grievances, Tyler Cowen thinks a bigger problem is complacency. In his latest book, “The Complacent Class: The Self-Defeating Quest for the American Dream,” Cowen, professor of almost everything (economics, law, literature) at George Mason University and co-author of the Marginal Revolution blog, argues that the complacent class, although a minority, is skillful at entrenching itself in ways detrimental to the majority....

For complacent Americans, a less dynamic, growth-oriented nation seems less like an alarming prospect than a soothing promise of restfulness. In a great testimonial to capitalism’s power, “The Communist Manifesto,” Karl Marx wrote: “All fixed, fast-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones become antiquated before they can ossify. All that is solid melts into air.” Complacent, because comfortable, Americans have had enough of that.

Hmm, I suppose I should read it.  I don't want to judge the premise of the book from a few lines of a 3rd party review, but the themes here are strikingly similar to something I wrote 13 years ago (!) on this blog in a post titled "Progressives are too Conservative to Like Capitalism".  I still agree with much, though not all, of what I wrote there so I will pare it down a bit:

Most "progressives" (meaning those on the left to far left who prefer that term) would freak if they were called conservative, but what I mean by conservative in this context is not donate-to-Jesse-Helms capital-C Conservative but fearful of change and uncomfortable with uncertainty conservative.

OK, most of you are looking at this askance - aren't progressives always trying to overthrow the government or something?  Aren't they out starting riots at G7 talks?  The answer is yes, sure, but what motivates many of them, at least where it comes to capitalism, is a deep-seated conservatism.

Before I continue to support this argument, I must say that on a number of issues, particularly related to civil liberties and social issues, I call progressives my allies.  On social issues, progressives, like I do, generally support an individual's right to make decisions for themselves, as long as those decisions don't harm others.

However, when we move to fields such as commerce, progressives stop trusting individual decision-making.  Progressives who support the right to a person making unfettered choices in sexual partners don't trust people to make their own choice on seat belt use.  Progressives who support the right of fifteen year old girls to make decisions about abortion without parental notification do not trust these same girls later in life to make their own investment choices with their Social Security funds.  ... [this would also make a good example:  Progressives oppose school choice because they don't think the poor capable of making good education decisions]

Beyond just the concept of individual decision-making, progressives are hugely uncomfortable with capitalism.  Ironically, though progressives want to posture as being "dynamic", the fact is that capitalism is in fact too dynamic for them.  Industries rise and fall, jobs are won and lost, recessions give way to booms.  Progressives want comfort and certainty.  They want to lock things down the way they are. They want to know that such and such job will be there tomorrow and next decade, and will always pay at least X amount.  That is why, in the end, progressives are all statists, because, to paraphrase Hayek, only a government with totalitarian powers can bring the order and certainty and control of individual decision-making that they crave.

Progressive elements in this country have always tried to freeze commerce, to lock this country's economy down in its then-current patterns.  Progressives in the late 19th century were terrified the American economy was shifting from agriculture to industry.  They wanted to stop this, to cement in place patterns where 80-90% of Americans worked on farms.  I, for one, am glad they failed, since for all of the soft glow we have in this country around our description of the family farmer, farming was and can still be a brutal, dawn to dusk endeavor that never really rewards the work people put into it.

This story of progressives trying to stop history has continued to repeat itself through the generations.  In the seventies and eighties, progressives tried to maintain the traditional dominance of heavy industry like steel and automotive, and to prevent the shift of these industries overseas in favor of more service-oriented industries.  Just like the passing of agriculture to industry a century ago inflamed progressives, so too does the current passing of heavy industry to services.

In fact, here is a sure fire test for a progressive.  If given a choice between two worlds:

  1. A capitalist society where the overall levels of wealth and technology continue to increase, though in a pattern that is dynamic, chaotic, generally unpredictable, and whose rewards are unevenly distributed, or...
  2. A "progressive" society where everyone is poorer, but income is generally more evenly distributed.  In this society, jobs and pay and industries change only very slowly, and people have good assurances that they will continue to have what they have today, with little downside but also with very little upside.

Progressives will choose #2.  Even if it means everyone is poorer.  Even if it cuts off any future improvements we might gain in technology or wealth or lifespan or whatever.  They want to take what we have today, divide it up more equally, and then live to eternity with just that.   Progressives want #2 today, and they wanted it just as much in 1900 (just think about if they had been successful -- as just one example, if you are over 44, you would have a 50/50 chance of being dead now).

Don't believe that this is what they would answer?  Well, first, this question has been asked and answered a number of times in surveys, and it always comes out this way.  Second, just look at any policy issue today.  Take prescription drugs in the US - isn't it pretty clear that the progressive position is that they would be willing to pretty much gut incentives for any future drug innovations in trade for having a system in place that guaranteed everyone minimum access to what exists today?  Or take the welfare state in Continental Europe -- isn't it clear that a generation of workers/voters chose certainty over growth and improvement?  That workers 30 years ago voted themselves jobs for life, but at the cost of tremendous unemployment amongst the succeeding generations?

Wealth Is The New Normal

Today, we spend a lot of time trying to understand the roots of poverty.  This was not so 200 years ago.  When Adam Smith wrote "The Wealth of Nations" his task was to explain why a very few nations at the time seemed to be getting wealthier.  Poverty at the time and through most of history was accepted as the norm.  Only the advent of free inquiry and (relatively) free markets has changed that norm.

[Fill in Name of Government Program] Would Have Worked Had the Right Person Been Running It

I have disputed the meme in the post's title on many occasions.  For example:

  • No person running any government agency has access to the same information that millions of individuals might have in making decisions for themselves
  • No person running any government agency can create an optimal solution, because millions of citizens all have different values and make different tradeoffs, so an optimum for one is not going to be an optimum for many others
  • No person running any government agency has the right incentives to make good decisions.  They will always optimize for increasing the size and scope of their organization and signaling virtue over actually being virtuous.

But researchers have found yet another reason:  power causes brain damage

A spate of recent articles corroborate what I already suspected, that holding elected office is the neurological equivalent of getting kicked in the head by a donkey.

"Subjects under the influence of power," Dacher Keltner, a professor atUniversity of California, Berkeleyfound, "acted as if they had suffered a traumatic brain injury—becoming more impulsive, less risk-aware, and, crucially, less adept at seeing things from other people's point of view."

In other words, power turns people into sociopaths.

This isn't a huge surprise to the vast majority of us who rant about power on election day and every day afterward. Republicans and Democrats want power and scramble for it, like a football. Classical liberals see power more like Frodo's ring—a corrupting influence better chucked into a volcano. In light of recent studies we ought to consider it a bit more like a concussion.

Keltner, brought into the public spotlight through a recent piece in The Atlantic, likens the accruing of power to actual brain trauma: "My own research has found that people with power tend to behave like patients who have damaged their brain's orbitofrontal lobes (the region of the frontal lobes right behind the eye sockets), a condition that seems to cause overly impulsive and insensitive behavior. Thus the experience of power might be thought of as having someone open up your skull and take out that part of your brain so critical to empathy and socially-appropriate behavior."

For the Record, I Fear Pure Majoritarian Democracy as Well

One of the themes of Nancy Maclean's new book on James Buchanan as the evil genius behind a conspiracy to unravel democracy in this county.  In critiquing her critique, I meant to also make it clear that whatever Buchanan may have believed on the subject, I am certainly skeptical of pure majoritarian democracy.  For me, protection of individual rights is the role of government, and populist majoritarianism can easily conflict with this goal (this is not a new finding, we pretty much figured this out after Julius Caesar, if not before.  Here was a piece I wrote years ago I will repeat here:

Every Memorial Day, I am assaulted with various quotes from people thanking the military for fighting and dying for our right to vote.  I would bet that a depressing number of people in this country, when asked what their most important freedom was, or what made America great, would answer "the right to vote."

Now, don't get me wrong, the right to vote in a representative democracy is great and has proven a moderately effective (but not perfect) check on creeping statism.  A democracy, however, in and of itself can still be tyrannical.  After all, Hitler was voted into power in Germany, and without checks, majorities in a democracy would be free to vote away anything it wanted from the minority - their property, their liberty, even their life.   Even in the US, majorities vote to curtail the rights of minorities all the time, even when those minorities are not impinging on anyone else.  In the US today, 51% of the population have voted to take money and property of the other 49%.

In my mind, there are at least three founding principles of the United States that are far more important than the right to vote:

  • The Rule of Law. For about 99% of human history, political power has been exercised at the unchecked capricious whim of a few individuals.  The great innovation of western countries like the US, and before it England and the Netherlands, has been to subjugate the power of individuals to the rule of law.  Criminal justice, adjudication of disputes, contracts, etc. all operate based on a set of laws known to all in advance.

Today the rule of law actually faces a number of threats in this country.  One of the most important aspects of the rule of law is that legality (and illegality) can be objectively determined in a repeatable manner from written and well-understood rules.  Unfortunately, the massive regulatory and tax code structure in this country have created a set of rules that are subject to change and interpretation constantly at the whim of the regulatory body.  Every day, hundreds of people and companies find themselves facing penalties due to an arbitrary interpretation of obscure regulations (examples I have seen personally here).

  • Sanctity and Protection of Individual Rights.  Laws, though, can be changed.  In a democracy, with a strong rule of law, we could still legally pass a law that said, say, that no one is allowed to criticize or hurt the feelings of a white person.  What prevents such laws from getting passed (except at major universities) is a protection of freedom of speech, or, more broadly, a recognition that individuals have certain rights that no law or vote may take away.  These rights are typically outlined in a Constitution, but are not worth the paper they are written on unless a society has the desire and will, not to mention the political processes in place, to protect these rights and make the Constitution real.

Today, even in the US, we do a pretty mixed job of protecting individual rights, strongly protecting some (like free speech) while letting others, such as property rights or freedom of association, slide.

  • Government is our servant.  The central, really very new concept on which this country was founded is that an individual's rights do not flow from government, but are inherent to man.  That government in fact only makes sense to the extent that it is our servant in the defense of our rights, rather than as the vessel from which these rights grudgingly flow.

Statists of all stripes have tried to challenge this assumption over the last 100 years.   While their exact details have varied, every statist has tried to create some larger entity to which the individual should be subjugated:  the Proletariat, the common good, God, the master race.  They all hold in common that the government's job is to sacrifice one group to another.  A common approach among modern statists is to create a myriad of new non-rights to dilute and replace our fundamental rights as individuals.  These new non-rights, such as the "right" to health care, a job, education, or even recreation, for god sakes, are meaningless in a free society, as they can't exist unless one person is harnessed involuntarily to provide them to another person. These non-rights are the exact opposite of freedom, and in fact require enslavement and sacrifice of one group to another.

I will add that pretty much everyone, including likely Ms. Maclean, opposes majoritarian rule on many issues.  People's fear of dis-empowering the majority tends to be situational on individual issues.

[Fill In Government Program Name or Name of Socialist Country] Would Have Worked if Only the Right People Had Run It

Sent to me by a long-time reader.

Creating the Government Monster Truck

A reader sends me this (I never can remember which folks say its OK to use names -- if you want me to credit you, please say its OK in your email).

"The politician creates a powerful, huge, heavy, and unstoppable Monster Truck of a government," P.J. O'Rourke writes in his new book, How the Hell Did This Happen? (Atlantic Monthly Press). "Then supporters of that politician become shocked and weepy when another politician, whom they detest, gets behind the wheel, turns the truck around, and runs them over."

Which sounds like what I have written for years, eg here

Technocratic idealists ALWAYS lose control of the game.  It may feel good at first when the trains start running on time, but the technocrats are soon swept away by the thugs, and the patina of idealism is swept away, and only fascism is left.  Interestingly, the technocrats always cry "our only mistake was letting those other guys take control".  No, the mistake was accepting the right to use force on another man.  Everything after that was inevitable.

History's Most Common Epistemology

The other day I was explaining to a young person what the word "epistemology" means.  To keep things simple, I said it is how you know what you know, or in terms of political discussion, how you know you are right.  They asked for an example.  I said that the use of logic and reason beginning from a set of givens or first principles is one approach to epsitemology.  They said they assumed everyone used that approach.  I told them that I thought not -- that, by my observation, the most common epistemology through history has been: "I was told it by a high status person in my family or tribe."  Based on sampling of social media, I still think this is still the case today.

Scooped George Will By A Decade

George Will has a good article making the point that you are almost certainly richer today, in terms of the products and services you have access to, than a billionaire was in 1916.  Loyal Coyote Blog readers will have read roughly this same article over a decade ago.  In that nearly ancient post, I compared a middle class home-owner in my neighborhood to the owner of one of the largest mansions in America in the late 19th century:

House1aHouse2b

One house has hot and cold running water, central air conditioning, electricity and flush toilets.  The other does not.  One owner has a a computer, a high speed connection to the Internet, a DVD player with a movie collection, and several television sets.  The other has none of these things.  One owner has a refrigerator, a vacuum cleaner, a toaster oven, an iPod, an alarm clock that plays music in the morning, a coffee maker, and a decent car.  The other has none of these.  One owner has ice cubes for his lemonade, while the other has to drink his warm in the summer time.  One owner can pick up the telephone and do business with anyone in the world, while the other had to travel by train and ship for days (or weeks) to conduct business in real time.

I think most of you have guessed by now that the homeowner with all the wonderful products of wealth, from cars to stereo systems, lives on the right (the former home of a friend of mine in the Seattle area).  The home on the left was owned by Mark Hopkins, railroad millionaire and one of the most powerful men of his age in California.  Hopkins had a mansion with zillions of rooms and servants to cook and clean for him, but he never saw a movie, never listened to music except when it was live, never crossed the country in less than a week.  And while he could afford numerous servants around the house, Hopkins (like his business associates) tended to work 6 and 7 day weeks of 70 hours or more, in part due to the total lack of business productivity tools (telephone, computer, air travel, etc.) we take for granted.  Hopkins likely never read after dark by any light other than a flame.

If Mark Hopkins or any of his family contracted cancer, TB, polio, heart disease, or even appendicitis, they would probably die.  All the rage today is to moan about people's access to health care, but Hopkins had less access to health care than the poorest resident of East St. Louis.  Hopkins died at 64, an old man in an era where the average life span was in the early forties.  He saw at least one of his children die young, as most others of his age did.  In fact, Stanford University owes its founding to the early death (at 15) of the son of Leland Stanford, Hopkin's business partner and neighbor.  The richest men of his age had more than a ten times greater chance of seeing at least one of their kids die young than the poorest person in the US does today.

Hopkin's mansion pictured above was eventually consumed in the fires of 1906, in large part because San Francisco's infrastructure and emergency services were more backwards than those of many third world nations today.

Here is a man, Mark Hopkins, who was one of the richest and most envied men of his day.  He owned a mansion that would dwarf many hotels I have stayed in.  He had servants at his beck and call.  And I would not even consider trading lives or houses with him.  What we sometimes forget is that we are all infinitely more wealthy than even the richest of the "robber barons" of the 19th century.  We have longer lives, more leisure time, and more stuff to do in that time.   Not only is the sum of wealth not static, but it is expanding so fast that we can't even measure it.  Charts like those here measure the explosion of income, but still fall short in measuring things like leisure, life expectancy, and the explosion of possibilities we are all able to comprehend and grasp.

I have a similar reaction every time I tour the mansions in Newport, RI.  They are magnificent in their way, but they are also cold, and to my modern eye, unlivable.  Think of it this way -- You are trapped alone on a desert island.  A plane airdrops you a crate of diamonds.  You are rich, right?

 

 

Voting and Freedom

Years ago I wrote a post called "I don't necessarily treasure the right to vote" wherein a discussed a number of individual freedoms that were far more important than voting.

The other day, Don Boudreaux said it more succinctly:

Freedom is not a synonym for the right to vote in fair and open elections.  Fair and open elections with a wide franchise might – might – be a useful instrument for promoting freedom.  But contrary to much shallow thinking, the right to participate in such elections is not itself “freedom.”  Freedom is the right to choose and act as you please, with this right bound only by the equal right of every other peaceful individual to do the same.  (Or to quote Thomas Sowell, “Freedom … is the right of ordinary people to find elbow room for themselves and a refuge from the rampaging presumptions of their ‘betters.'”  I would add that freedom requires also elbow room from the rampaging presumptions – and from the enviousness, ignorance, myopia, and even the good intentions – of one’s peers and, indeed, from those of everyone.)

No Matter What They Actually Say, the Public Trusts Private Corporations More Than Government, And I Can Prove It

As a libertarian, I find myself constantly saying to folks something like:  "private actors (corporations, businesses, individuals, etc. are inherently more trustworthy than government because they cannot legally interact with you through force or fraud -- the government is free to do both.  If you don't like what a private actor is doing, you can simply refuse to interact with them further, an ability one does not have with the government."  This seems like such an obvious point but few people, particularly on the Left, will ever agree with me.  But I have recent proof that in their hearts, most people understand this perfectly.

What is my proof?  The universal, bipartisan freakout over the man who was dragged off by force from a United flight.  People are focusing on this event for the very fact that this example of a private company deploying force against its customers is so incredibly rare.  The Internet is filled with similar or in fact much worse examples of the government abusing its authority -- false arrests, petty harassment, asset seizures without due process -- but people just yawn and these videos gets 236 views  vs. millions for the United video.  Because, presumably, people have come to expect such abuses from the government but not from private companies.

And to a large extent, this particular example of private violence is the exception that will prove the rule.  Because United is going to experience real accountability.  It is already getting a firestorm of bad press that will cost them current and future business.  They will face lawsuits and possible government action.  But the average police officer or government official (or VA or IRS administrator) who abuses their power retain their jobs for life with no negative consequences from their actions.  Also, we should note that it was a government agent in this case who was the one who actually used force and dragged the passenger off, not a private United employee.  Almost every time one looks deeply at an abuse by private companies, at the end of the day that company is enabled or protected in doing so by so some sort of crony relationship with the government.

So I suppose we should ask, if people really in their hearts understand that private "power" is much less menacing than government power, why do they still support increasing the power of government over private actors?  And the answer must be that they believe (or hope, or expect) that use of this government power will achieve some end they want that they cannot achieve without force.  The problem with this of course is that it is naive -- it assumes that once you give great power to the government, government employees will use this power in the way you would use it, for the same goals and ends.  But this is seldom the case, certainly over the long haul.  I argued for years that the Left under the Obama administration was supporting Presidential power on the assumption they would hold the White House forever and thus get to wield all this power.  Which is why, I suppose, there has been so much freakout over Donald Trump's victory.

Postscript:  Here is an example video of government brutality just from my news feed today.  It will get no real traction because everyone has come to expect the government to act in this manner.

Number of Private Jobs Created By all Past Presidents Combined: Zero

For eight years, I had to endure articles from the Left about all the jobs Obama had created.  Now that the White House has changed hands, it is all the bloggers on the Right breathlessly reporting job creation by Trump and heralding the February job figures (example).  Though the Left is still trying to credit Obama (example)

  1.  Presidents do not create private jobs.  Period.  Even so-called infrastructure spending and stimulus merely take private money from whatever it was being used for previously and applies it to investment projects that politicians want.  Sure, there are new easy to see infrastructure jobs from these projects, but what is also there, largely unseen, are whatever jobs would have been created (or not lost) had the money used for these projects been left to private individuals to spend or invest as they see fit.
  2. Presidents do have long-term effects on prosperity, but these are usually based on regulatory and tax policy that can take years to play out -- not the span of days from January 20 to February.  The main effect government officials can have is negative, by creating drags on private enterprise.  The best they can achieve is generally removal of past negatives.
  3. To the extent individual companies credit Trump with various job growth steps, this is a function of our corporate crony state, not any underlying economic reality.  I have been at the highest levels of Fortune 50 companies (not as an executive but as a consultant and later as executive staff).  Corporations do not suddenly make changes in business strategy and capital investment plans based on elections.  They do make changes based on real changes, e.g. this tax policy was changed or that regulation was changed, none of which has yet occurred.  Of course, they may credit the new President as responsible for certain investments or changed decisions, but this is generally flattery attached to actions that would have happened anyway, or crass calculations meant to garner higher crony status in the future.

RIP Michael Novak

This is probably not someone readers would expect me to honor, but way back when I was 19 my first college internship was working for Michael Novak at AEI.  Mr. Novak was a friend of my dad's, and I always secretly wonder if my dad saw that I was migrating away from traditional Conservatism and thought some time with Mr. Novak would head this off.

I ended up going in a different direction from Mr. Novak, but I had an enjoyable summer working with him.  I spent most of my time in the Georgetown University library researching papal encyclicals and commentary on them.  For someone who grew up around much more fundamentalist religions in the South, the more overt intellectualism of Catholic writing was fascinating.  I learned a lot, and Mr. Novak was as kind and generous as someone could possibly be.  He did a lot to defend capitalism in a world where it was increasingly questioned, and even if I have very different epistemology than he, I thank him for his work.

Coyote's first rule of government authority: Never support any government power you would not want your ideological enemy wielding

Way back in 2014 I wrote:

I often wonder if Democrats really believe they will hold the White House forever.  I suppose they must, because they seem utterly unconcerned, even gleeful in fact, about new authoritarian Presidential powers they would freak out over if a Republican exercised.

Coyote's first rule of government authority:  Never support any government power you would not want your ideological enemy wielding.

As Damon Root writes:

In December 2007 presidential candidate Barack Obama told The Boston Globe that if he won the 2008 election, he would enter the White House committed to rolling back the sort of overreaching executive power that had characterized the presidency of George W. Bush. "The President is not above the law," Obama insisted.

Once elected, however, President Obama began to sing a different sort of tune. "We're not just going to be waiting for legislation," Obama announced. "I've got a pen and I've got a phone...and I can use that pen to sign executive orders and take executive actions and administrative actions."...

To make matters worse, many of Obama's fervent liberal supporters pretended to see nothing wrong with such obvious abuses of executive power. For example, consider the behavior of the prestigious editorial board of The New York Times. Back in 2006, when George W. Bush had the reins, the Times published an unsigned editorial lambasting Bush for his "grandiose vision of executive power" and his foul scheme to sidestep the Senate and unilaterally install his nominees in high office. "Seizing the opportunity presented by the Congressional holiday break," the Times complained, "Mr. Bush announced 17 recess appointments—a constitutional gimmick."

But guess what the Times had to say a few years later when President Obama had the reins and he utilized the exact same gimmick? "Mr. Obama was entirely justified in using his executive power to keep federal agencies operating," the Times declared in defense of Obama's three illegal appointments to the National Labor Relations Board. (Those three NLRB appointments, incidentally, were ruled unconstitutional by a 9-0 Supreme Court.)

I remember a conversation with my mother-in-law, who is a fairly accurate gauge of New England Left-liberal thought.  She was absolutely adamant that the Republican Congress, from the very beginning, had dug in and refused to work with Obama and that the resulting gridlock gave Obama the absolute right to work around Congress and govern by fiat.   I remember asking her, are you comfortable giving President Lindsey Graham that power too? (Trump was not even a glimmer in the eye of the body politic at that point so Graham was the best Republican bogeyman I could think up on short notice).  I don't remember an answer to this, which reinforced the sense I had at the time that Democrats honestly did not think they would lose the White House in their lifetimes -- I suppose they thought that 8 years of Obama would be followed by 8 years of Clinton.

Well, the freak out is officially here and I will happily embrace all Democrats who want to make common cause in limiting Presidential power.

 

Update:  Glenn Greenwald makes many of the same points

Sen. Barack Obama certainly saw it that way when he first ran for president in 2008. Limiting executive-power abuses and protecting civil liberties were central themes of his campaign. The former law professor repeatedly railed against the Bush-Cheney template of vesting the president with unchecked authorities in the name of fighting terrorism or achieving other policy objectives. “This administration also puts forward a false choice between the liberties we cherish and the security we provide,” he said in 2007. Listing an array of controversial Bush-Cheney policies, from warrantless domestic surveillance to due-process-free investigations and imprisonment, he vowed: “We will again set an example for the world that the law is not subject to the whims of stubborn rulers.”

Yet, beginning in his first month in office and continuing through today, Obama not only continued many of the most extreme executive-power policies he once condemned, but in many cases strengthened and extended them. His administration detained terrorism suspects without due process, proposed new frameworks to keep them locked up without trial, targeted thousands of individuals (including a U.S. citizen) for execution by drone, invoked secrecy doctrines to shield torture and eavesdropping programs from judicial review, and covertly expanded the nation’s mass electronic surveillance.

Blinded by the belief that Obama was too benevolent and benign to abuse his office, and drowning in partisan loyalties at the expense of political principles, Democrats consecrated this framework with their acquiescence and, often, their explicit approval. This is the unrestrained set of powers Trump will inherit. The president-elect frightens them, so they are now alarmed. But if they want to know whom to blame, they should look in the mirror.

Why This Election Is Awesome -- Making It Easier NOT to Give Power to these Losers

The other day at dinner, I told a group of folks with more, uh, conventional political views than my own that this election was great.  When pressed on my seeming madness, I said that I was tired of people fetishizing politicians, starting with the cult of the Presidency.  History is written as if these losers drove most of history, when in fact the vast vast majority of our wealth and well-being today results from the actions of private individuals, private individuals who typically had to fight politicians to make our lives better.   Anything we can do to cause people to think twice about giving more power to these knuckleheads, the better.  And thus, this election is great -- like Dorothy stumbling on the wizard behind the curtain, perhaps going forward people will be a little less willing to blindly accept politicians as their betters.

Hey, Someone's Listening!

New Pacific Legal Foundation attorney Jeremy Talcott generously gives me some credit for his interest in defending liberty.   At about the 5:50 mark.  While blogging, one is so disconnected from the readers it sometimes feels like lecturing in a pitch black auditorium and wondering if anyone is in the audience.  PLF is one of the half dozen top organizations in the country using litigation to protect liberty (along with others like the IJ, Goldwater, Mackinac, etc.)

In Defense of Profits -- Why They Are At Least As Moral as Wages

Quick background:  my company privately operates public parks, making our money solely from the entry fees voluntarily paid by visitors and campers.  We don't get paid a single dollar of tax money.

A major partner of ours is the US Forest Service (USFS), which actually operates more recreation sites than any other agency in the world (the National Park Service has a higher profile and the Corps of Engineers has more visitors, but the USFS is the most ubiquitous).  Despite the USFS being an early pioneer of using private companies to reduce the operating costs of parks and campgrounds, the USFS still has a large number of employees opposed to what we do.  The most typical statement I hear from USFS employees that summarizes this opposition -- and it is quite common to hear it -- is that "It is wrong to make a profit on public lands."

It would be hard to understate the passion with which certain USFS employees hold to this belief.   I discovered, entirely accidentally through a FOIA request my trade group had submitted to the USFS, that a Forest Supervisor in California (a fairly senior person in the USFS management structure) whom I have never met or even had a conversation with circulated emails through the agency about how evil he thought I was.

This general distaste for profit, which is seen as "dirty" in contrast to wages which are relatively "clean" (at least up to some number beyond which they are dirty again), is not limited to the USFS or even to government agencies in general, but permeates much of the public.  As a result, I thought I would describe a conversation I had with a USFS manager (actually this is the merger of two conversations).  The conversation below had been going on for a while discussing technical topics, and we will pick it up when the District Ranger makes the statement highlighted above (a District Ranger is the lowest level line officer in the USFS, responsible in some cases for the land management functions of an area the size of a county.  I have cleaned up the text (I am sure the sentences would not be as well-formed if I had a transcript) but I think this captures the gist of it:

Ranger:  I think it's wrong that you make a profit on public lands

Me:  So you work for free?

Ranger:  Huh?

Me:  If you think it's wrong to make money on public lands, I assume you must volunteer, else you too would be making money on public lands

Ranger:  No, of course I get paid.

Me:  Well, I know what I make for profit in your District, and I have a good guess what your salary probably is, and I can assure you that you make at least twice as much as me on these public lands.

Ranger:  But that is totally different.

Me:  How?

At this point I need to help the Ranger out.  He struggled to put his thoughts on this into words.  I will summarize it in the nicest possible way by saying he thought that while his wage was honorable, my profit was dishonorable, or perhaps more accurately, that his wage paid by the government was consistent with the spirit of the public lands whereas my profit was not consistent

Me:  I'm not sure why.  My profit is similar to your wage in that it is the way I get paid for my effort on this land -- efforts that are generally entirely in harmony with yours as we are both trying to serve visitors and protect the natural resources here.    But unlike your wage, my profit is also a return on the investment I have made.  Every truck, uniform, and tool we use comes out of my profit, whereas you get all the tools you need paid for by your employer above and beyond your salary.  Further, your salary is virtually guaranteed to you, short of some staggering malfeasance.  Even if you do a bad job you likely would just get shunted to a less interesting staff position at the same salary, rather than fired.   On the other hand if I do a bad job, or if one of my employees slips up, or even if some absolutely random occurrence entirely outside my control occurs (like, say, a flood that closes our operations) my profit can completely evaporate, or even turn into a loss.  So like you, I get paid for my efforts here on public lands, but I have to take risk and make investments that aren't required of you.  So what about that makes my profit less honorable than your wage?

Ranger:  Working on public lands should be a public service, not for profit

Me:  Well, I think you are starting to make the argument again that you should be volunteering and not taking a salary.  But leaving that aside, why is profit inconsistent with service to the public?  My company serves over 2 million visitors a year, and 99.9% give us the highest marks for our service.  And for the few that don't, and complain about a bad experience, every one of those complaints comes to my desk and I personally investigate them.  Do you do the same?

Why do I make such an effort?  Part of it is pride, but part is because I understand that my margins are so narrow, if even 5% of those visitors don't come back next year -- because they had a bad time or they saw a bad review online -- I will make no money.  Those 2 million people vote with their feet every year on whether they think I am adequately serving the public, and their votes directly affect how much money I make.  Do you have that sort of accountability for your public service?

Postscript:  Interestingly, though perhaps not surprisingly, the government ranger did not bring up what I would consider the most hard-hitting challenge:  How do we know your profits are not just the rents from a corrupt, cronyist government contracting process.  Two things let me sleep well at night on this question.  The first is that I know what lobbying I do and political connections I have (zero on both) so I am fully confident I can't be benefiting from cronyism in the competitive bid process for these concession contracts.  Of course, you don't know that and if our positions were reversed, I am pretty sure I would be skeptical of you.

So the other fact I have in my favor, which is provable to all, is that the recreation areas we operate are run with far lower costs and a demonstrably higher level of service than the vast majority of recreation areas run by the government itself.  So while I can't prove I didn't pull some insider connections to get the work, I can prove the public is far better off with the operation of these parks in private hands.

Your Good Intentions Mean Virtually Nothing

I am exhausted with folks, particularly on the Progressive Left, judging themselves and each other based on their intentions.  Your intentions mean virtually nothing.  I suppose it is better to have good intentions than bad, but beyond that results, particularly in the public policy arena, are what should matter.  And the results of most Progressive well-intentioned legislation are generally terrible.  For example, as I wrote earlier today, poverty in this country is mainly caused by lack of work rather than low wage hours, but Progressives preen over their good intentions in introducing higher and higher minimum wages that will only serve to reduce the work hours of low-skilled poor people.

Via Mark Perry comes this great article on Progressive good intentions in Seattle collapsing into rubble.  It does not except well, so I recommend you check it out, but I will summarize it.

Begin with a libertarian goal that should be agreeable to most Progressives -- people should be able to live the way they wish.  Add a classic Progressive goal -- we need more low income housing.  Throw in a favored Progressive lifestyle -- we want to live in high density urban settings without owning a car.

From this is born the great idea of micro-housing, or one room apartments averaging less than 150 square feet.  For young folks, they are nicer versions of the dorms they just left at college, with their own bathroom and kitchenette.

Ahh, but then throw in a number of other concerns of the Progressive Left, as administered by a city government in Seattle dominated by the Progressive Left.  We don't want these poor people exploited!  So we need to set minimum standards for the size and amenities of apartments.  We need to make sure they are safe!  So they must go through extensive design reviews.  We need to respect the community!  So existing residents are given the ability to comment or even veto projects.  We can't trust these evil corporations building these things on their own!  So all new construction is subject to planning and zoning.  But we still need to keep rents low!  So maximum rents are set at a number below what can be obtained, particularly given all these other new rules.

As a result, new micro-housing development has come to a halt.  A Progressive lifestyle achieving Progressive goals is killed by Progressive regulatory concerns and fears of exploitation.  How about those good intentions, where did they get you?

The moral of this story comes back to the very first item I listed, that people should be able to live the way they wish.  Progressives feel like they believe this, but in practice they don't.  They don't trust individuals to make decisions for themselves, because their core philosophy is dominated by the concept of exploitation of the powerless by the powerful, which in a free society means that they view individuals as idiotic, weak-willed suckers who are easily led to their own doom by the first clever corporation that comes along.

Postscript:  Here is a general lesson for on housing affordability:  If you give existing homeowners and residents the right (through the political process, through zoning, through community standards) to control how other people use their property, they are always, always, always going to oppose those other people doing anything new with that property.  If you destroy property rights in favor of some sort of quasi-communal ownership, as is in the case in San Francisco, you don't get some beautiful utopia -- you get stasis.  You don't get progressive experimentation, you get absolute conservatism (little c).  You get the world frozen in stone, except for prices that continue to rise as no new housing is built.  Which interestingly, is a theme of one of my first posts over a decade ago when I wrote that Progressives Don't Like Capitalism Because They Are Too Conservative.

Postscript #2:  So, following the logic above, one can think of building restrictions and zoning as a form of cronyism.  Classic cronyism is providing subsidies to politically favored companies and restricting the ability of new competitors to arise to compete with them, granting them an effective monopoly and the ability to jack up their prices.  So what do we do with housing?  We give massive subsidies to home-owners and restrict competition from new housing that might reduce their home value, thus granting current homeowners an effective monopoly and the ability to jack up their prices.  I challenge anyone to tell me that rising home prices in Palo Alto are not driven by the exact same government actions for favored constituents as are rising prices for Epipens.

Postscript #3:  I will ask a question using Progressive terminology -- you were worried about these young renters and their power imbalance vs. development companies and landlords.  So how much more powerful are they now with a thousand fewer rental units on the market?  Consumers have power when supply is plentiful.  Anything done to reduce supply is going to reduce consumer power.