I care more about having good feedback/learning/innovation processes. The main reason that I tend to be wary of government intervention is that it more often creates processes with low levels of adaptation and innovation regarding technology and individual preferences.
That is my view, also. Hanson concludes,
So when I try to design better social institutions, and to support the proposals of others, I’m less focused than many on assuring zero government invention, or on minimizing “coercion” however conceived, and more concerned to ensure healthy competition overall.
Think of all the ways that the American Founders tried to instill competition in American government: regular elections; Federalism; different branches of government.
But nobody likes to face competition. Over many decades, our government institutions have become less competitive and more concentrated. I made that point in the widely-unread Unchecked and Unbalanced, and I made suggestions for making government more competitive again.
I mostly agree, but with two caveats:
– I’m less surprised when institutions become less competitive over time. History is full of institutions, from knighthood to the Chinese imperial examination system, which started as merit-based prizes but gradually got captured by entrenched interests and became essentially hereditary. Competition is unstable; eventually someone wins.
– Goodhart’s law. The criterion that decides the competition is usually an imperfect proxy for the goal society needs to achieve. The profit motive can inspire production and innovation, but also inspires fraud and pollution. Democracy is based on the idea that the candidate that gets the most votes will be good at governing, but many successful candidates seem to have little interest in governing at all.
I think both points are important and both amount to the idea that “mature systems are susceptible to being gamed”.
These observations don’t contradict Hanson’s point, in my opinion, they are serious issues that require application of Hanson’s “good feedback/learning/innovation processes”.
As high-value systems mature we becoming tolerant of low-value gaming. Also, we rarely revisit the core assumptions and goals of the metrics that were key inputs used as the system was first designed and matured. Processes that attempt to prevent and minimize gaming should be part of all good feedback/learning/innovation loops.
Step one is identifying when a system has entered mature stability and not falling into the trap of mislabeling this desirable state as stagnation. Everything else is well designed feedback loops with careful analysis and control.
– Saying that a system is “mature” amounts to saying that it isn’t likely to improve very much; it’s doing as well as it can. In a politically competitive environment, that’s probably not going to fly. A challenger will usually claim that the system would produce better results under new management.
— Yes, this means that functional systems are often “upgraded” to non-functional systems.
— See: the history of public education for the last half-century or so.
— See also: Dogbert’s book on management
– Your suggestions don’t apply at the highest political levels, because there is no disinterested higher authority able to design and implement better controls. The biggest winners always try to lock in their victory; eventually they usually succeed (for a while).
– Immature systems are also subject to gaming. They succeed anyway with a sufficient level of growth. The best definition of a “mature system” is probably “a system where achievable growth and process improvements are no longer sufficient to hide serious dysfunction”.
Your example of the Chinese civil service system is interesting, and it brings to mind the 16th century Dutch (United Provinces) republic: the Dutch, forward thinking as they were, had a republic quite early in European history, with the ‘stadtholder’ being head of state; over time, however, the position gradually became hereditary, until it was finally formally made hereditary under the rule of the House of Orange I believe. However, I always took this trend as indicative of the nature of the times, not of a timeless inevitability. Republican governance and political egalitarianism just weren’t competitive with monarchy and aristocracy in the 16th century, for technological and/or economic reasons. Though I suppose one could argue that modern meritocratic institutions merely succumb to other forms of ‘nepotism’ than the hereditary kind.
The drive of parents to try to secure a good future for their children, and to use every tool they have to do this, is a “timeless inevitability” or near enough. The last century has seen too much upheaval for a hereditary class system to form at the national level, but that comes and goes.
It’s kind of like “Anti-Trust for the Government”.
Anti-state bias (arguably justifiable, but it can go too far) resolves the tension in libertarian thinking which tends to oppose anti-trust imposition of higher levels of competition in the private sector but favors it in the public sector.
A more general approach would be to favor it for both, once the circumstances pass certain thresholds of concentration, pressure, and danger.
And we are here as on a darkling plain
Swept with confused alarms of struggle and flight,
Where ignorant armies clash by night.
-Matthew Arnold
“So when I try to design better social institutions…” See Hayek’s criticism of constructive rationalism. Better approach: start with what exists, and think modestly about whether some small change might be for the better, while being mindful that you probably don’t understand a lot about what exists.
There is a time and a place for continuous innovation. There is also a time and a place for Zero-to-One new innovations. Both require “good feedback/learning/innovation processes”.
There is nothing wrong with Hanson designing a new betting market institution with careful attention to feedback loops. This anti-institution instinct levelled against Hanson feels dogmatic. Are you against Startups and Venture Capital? Are corporations not institutions?
There is a difference between a system of checks and balances and a system of competition.
We had a recent post about density bias that illustrates the notion that our constitution does not facilitate competition among the states, it fights it. The reward for success is often a smaller representational share of the system per citizen, or an outflow of federal dollars.
The system is designed precisely to deter the federal government from being the position to dole out rewards for ‘demographic success,’ so I’m not sure this is such a bad thing.
Granted, sparse regions shouldn’t dictate policies for dense ones, but if I am to attempt to channel Madison, I would say the point of of the bicameral legislature is to allow the sparse regions (via the senate) to veto national policy initiatives by dense regions, and to allow the dense regions (via the house) to veto national policy initiatives by the sparse regions. In other words, to create a bias toward inaction at the national level, encourage citizens to pursue their favorite policies at the state level rather than national, and require super-majorities to get positive changes enacted at the national level. And I think this was the right way to do things, and this is why criticism of the electoral college/ the senate is completely unpersuasive, and will be until the right to secede is acknowledged (current constitutional law says secession is illegal I believe).
I think indignation over gerrymandering is more reasonable, though, in that it undermines the House of Reps’ proper functioning as the majoritarian house.
Yes, there are all kinds of biases toward inaction in the constitution. Which have mostly been circumvented over the last several decades. Unfortunately, in my opinion.
Chapter 3 of Unchecked and Unbalanced does indeed lay out some interesting pragmatic and incremental mechanisms for decentralizing power and market alternatives to competitions for votes: vouchers, charters, decentralized budget allocation, and competitive regulation. And indeed since 2010, we have seen these mechanisms play more prominent roles especially at the state and local levels.
In the book, however, campaign finance reform is deemed a less effective mechanism.
True.
But how about campaign finance deregulation?
If we want robust markets, why not free up lobbyists and let people get some real skin in the game? Money talks and conveys information. The current campaign finance system is founded in hopelessly infantile bigotries, is costly to administer and comply with, and employs way too many tax-exempt 501 ( c) (3) intermediaries whose methods play donor against donor. Opening up more efficient routes to its use in policy and politics could provide the feedback mechanisms Hanson talks about.
How?
(1) Restore tax deductibility of political donations, make the donations taxable income to the recipient.
(2) Repeal campaign donation limits.
(3) Eliminate tax exempt status for policy organizations and think tanks.
(4) Legalize foreign campaign donations.
(5) Repeal campaign donation disclosure requirements.
The only substantive outcome existing campaign finance regulations produce is full employment for an army of compliance specialists.
Most people will likely argue that this would open the door to bribery and corruption. Income derived from bribes would still count as income and would still have to be declared to the IRS. The IRS could add a block for bribes and a block for campaign donations received. Politicians could voluntarily make public their tax filings if they believed doing so would win them more votes. Chances are anyway that anything that is worth bribing a politician for is at least as economically productive as whatever outcome is produced by not allowing the bribe at all. And rich plutocrats already can spend as much of their own money as they want advancing their political agendas. Let them instead just make the political contribution generally and not have to go through inefficient back-channels like buying control of media corporations or programming algorithms on their web sites to produce their desired outcomes or paying think tanks to spew sophistry.
Admittedly a radical approach, but perhaps more palatable when paired with new checks and balances. Checks and balances are good and we need more of them since the ones we have don’t work. We also want youth to gain experience and knowledge of how government works, so rather than exposing them to the perils of life in a congressional office, why not create a Youth Congressional Review Board and a Youth Supreme Court Review Board.
Such review boards would consist of 100 each elected members, eligibility restricted to individuals 30 years or younger, elected on a national party-list proportional representation basis by all US citizens in a national election administered by the federal government every 5 years. Political parties with representation in the Congress would be banned from representation in the Review Boards. The elected members would have a salary and benefits. The purpose of the review boards would be to review each bill passed by congress and vote on a non-binding resolution as to whether the bill is in the public interest, within constitutional limits on government, and in the public interest, as well as any other resolutions the body may pass. Similarly, the Youth Supreme Court would review each Supreme Court decision and vote on a resolution as to whether the decision was within the Supreme Court’s constitutional authority, consistent with the Constitution, and reflective of sound juridical practice.
Even purely exhortatory bodies would serve to act as a check and balance and also provide the public with additional views and information that could inform their voting in regular elections.
Switzerland funds youth parties. And many advanced modern democracies have much more relaxed campaign finance laws than the US and outperform the US in terms of integrity of government and governance outcomes. Australia, the Czech Republic, Denmark, Estonia, Germany, Luxembourg, the Netherlands, Norway, Spain, Sweden, and Switzerland have no limits on contributions, and no limits on what candidates can spend. And many countries permit foreign donations. The Law Library of Congress has a web page on Campaign Finance: Comparative Summary the perusal of which strongly suggests that stricter and more complex campaign finance laws are inversely related to the integrity of governance.
An incremental step towards more substantive reform.
Re: “Think of all the ways that the American Founders tried to instill competition in American government: regular elections; Federalism; different branches of government.”
The Founders also tried to limit coercion—tyranny of the majority, and arbitrary government power—by enumerating various individual rights and by enacting also the 9th amendment: “The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.”
Regrettably, the 9th amendment hasn’t had much bite.
I once hard a joke that modern jurisprudence makes more sense if you rework the ninth amendment “The enumeration in this Constitution of certain powers, shall not be construed to deny or limit others wanted by the government.”
Arnold,
You say,
“But nobody likes to face competition. Over many decades, our government institutions have become less competitive and more concentrated. I made that point in the widely-unread Unchecked and Unbalanced, and I made suggestions for making government more competitive again.”
I’m about two-thirds done with Yuval Levin’s last book, The Fractured Republic and he hammers home this same theme (i.e. government is too big and non-competitive.) I think he also makes policy suggestions but I haven’t gotten to the end of the book. All you smart guys talk about the same stuff (and nobody listens!)