Coyote Blog

A few weeks ago, in an interview about blogging, I was asked "why are there so many libertarian bloggers?"  My answer didn’t make the final cut for the article, but I thought it was worth repeating here**:

First, I am tempted to answer with a variation of the argument that the left uses to justify why so many academics
are liberal – ie, that we bloggers are all smarter and therefore libertarians.  I will eschew that one though, because I think the real reason is that libertarians have never had a really good outlet for our opinions and it is a relief to have a channel to be able to express our views without distortion. 

Part of this is because there are few good organized outlets for libertarians.  In the past, libertarians could perhaps find a voice in one of the two major parties, but that tends to just end in frustration as about the 50% of what either party espouses is inconsistent with a true respect for individual liberties.  At the same time, the formal libertarian party has often been a joke, fielding some pretty bizarre candidates with some pretty niche priorities.

However, a major part of the problem is that libertarianism resists organization.  Libertarianism tends to be a big tent that attracts everything from anarcho-capitalists to Cheech-and-chong-esque hempfest organizers to Larry-Flint style pornographers.  For this reason, libertarianism defies efforts to brand it, which is a critical shortcoming since the two major political parties nowadays are much closer to brands than ideologically consistent philosophical alternatives. 

Libertarians revel in differences and being different.  Almost by definition, none of us have the same message, or even believe that we all should have the same message. Many of us are suspicious of top-down organization in and of itself.  Blogging is therefore tailor made for us – many diverse bottom-up messages rather than one official top-down one.

Finally, since libertarianism is really about celebrating dynamism and going in a thousand different directions as each individual chooses, in some sense the Internet and blogging are not only useful tools for us libertarians, but in and of themselves are inherently libertarian vehicles.  Certainly libertarian hero F. A. Hayek would recognize the chaos of the Internet and the blogosphere immediately.  For a good libertarian, chaos is beautiful, and certainly the blogosphere qualifies as chaotic.   The Internet today is perhaps the single most libertarian institution on the planet.  It is utterly without heirarchy, being essentially just one layer deep and a billion URL’s wide.  Even those who try to impose order, such as Google, do so with no mandate beyond their utility to individual users.

When people are uncomfortable with the blog phenomenon, they tend to be the same people who are
uncomfortable with anything chaotic.  I have written several times, particularly here and here, that people across the political spectrum, from left to right, are united by an innate fear of and need to control chaos.  Conservatives don’t like the chaos of themes and messages found in movies and media.  Liberals insist on a unified public education system with unified messaging rather than the chaos of school choice and home schooling.  Socialists hate the chaos and uncertainty of the job market, and long for guaranteed jobs and pensions.  Technocrats hate the chaos of the market, and seek to impose standardization.  Everyone in the established media hates blogs, which threaten to upset the comfortable order of how-we-have-always-done-things.

** Which just demonstrates another reason why we all blog- no editors!  There is a saying that a lawyer who represents himself has a fool for a client.  It may well be that we bloggers are in the process of proving a parallel adage about being our own editors.

Steven Malanga has a fascinating analysis of electoral politics in big cities (via reason):

The electoral activism of this New New Left coalition–public-employee unions, hospitals and health-care worker unions, and social-services agencies–has reshaped the politics of many cities. As the country’s national political scene has edged rightward, thwarting their ambitions in Washington, these groups have turned their attention to urban America, where they still have the power to influence public policy.

In New York, this public employee coalition makes up a third of the work force and an even larger portion of the voters in the last election. 

An exit poll conducted by City Journal of the 2001 New York mayoral election found that private-sector workers heavily backed Michael Bloomberg, the businessman candidate who had been endorsed by Rudy Giuliani and had run on a pledge of no new taxes (which he broke after his first year in office), while those who worked in the public/health-care/social-services sectors favored his Democratic opponent, who ran on a promise of raising taxes to fund further services. In the race, Bloomberg won among private-sector voters by 17 percentage points, while the Democrat won by 15 points among those who worked in the public/nonprofit sectors

Read it all.

Several months ago in this post, I pointed out that the income tax system has become so "progressive" that:

Half of the people in this country pay more than 100% of the personal income taxes. The other half get, as a group, a free ride (though there are individuals in this group that pay paxes, net, as a group, they do not). We are basically at the point in this country where 51% of voters could vote themselves all kinds of new programs and benefits knowing that the other 49% have to pay for them.

Malanga’s article points out the other side of the coin.  We are also increasingly approaching the point where, at last in certain urban centers, half the workers can vote themselves government jobs (and pay raises, pensions, etc) at the expense of the other part of the population.

Recently, the government announced that it would take over the United Airlines pilots pensions in the government-funded Pension Benefit Guaranty Corp.  This move is irritating pilots, because their pensions get reduced, and it is annoying to me as a taxpayer, that I have to bail out a company that was too screwed-up to fully fund its pension obligations. 

This points up the biggest danger of government guarantees — it causes companies to be more reckless.  Back in the 80′s, banks and S&L’s made insanely risky investments with bank deposits.  The people who should have been most interested in this problem – bank depositors – ignored it because they felt safe that the government had guaranteed their deposits.  In the same way, airlines and other ailing businesses with defined benefit pensions cut back on pension funding when times were bad, and the very group that should have been crying foul – the company unions – did not, because they again counted on a bail-out.

I put the blame squarely on the company’s management, who made a commitment to employees and then failed to keep it, and now are using government pension gaurantees as a subsidy to close their cash flow gap.  However, it is interesting to look at the role of unions too.  For decades, unions have demanded defined benefit pensions (ones that promise a fixed amount per month at retirement) and have opposed defined-contribution pensions (ones where the company promised to contribute a fixed amount today into an investment fund).  I assume the main reason for this is that unions do not want workers to bear the market risks on investments.

Over time, though, defined benefit plans have, despite this opposition, gone the way of the dinosaur (at least in private companies – most government jobs still have them).  This is for a number of reasons:

• 401-K accounts now offer much of the same tax-deferral benefits for defined contribution programs that defined-benefit plans had
• Defined-benefit plans turn out to have market risk too.  One is inflation – benefits levels may be guaranteed, but unexpectedly high inflation can effectively reduce them, while defined contribution plans, if invested correctly, will likely produce returns to offset these inflation losses.  In addition, during go-go stock markets, holders of defined-benefit plans found out that they did not enjoy the benefits of higher investment returns – their employers pocketed them (by the way, may Americans are discovering the same about their Social Security benefits).
• As employees move around more, workers have found that defined benefit plans are not very portable, and tend to punish workers who do not stay for decades.  401-K plans are much more beneficial to workers who do not stay their whole career, or at least 20 years, in one place.
• As United pilots have found, defined benefit pension plans are hard to police by current employees- there are just too many variables that allow companies to argue that the pensions are OK.  On the other hand, defined contribution plans are very easy to police- one can check the amount of contribution each month against the amount promised.
• Finally, defined benefit plans rely on their company staying in business and fiscally sound for decades into the future.  This may have seemed a good bet at US Steel or United Airlines in 1950, but would anyone make that bet today?  For any company?