Jeffrey Friedman’s latest essay in Critical Review. A snippet:
On a question of values, as Max Weber recognized, one’s decision is simple, for values are matters of axiomatic faith: there one stands and can do no other. Empirical issues, while not nearly as dramatic as valence issues, are much harder to decide.
Recently, I was asked to write a short piece on why it is that economists who support a welfare state tend to also support a regulatory state, and conversely. I claim that economists have common values but differ on the empirical issue of whether or not technocrats are able to improve market outcomes. I came to take this view in part because of years-ago conversations with Friedman.
The focus of the essay is on thinking about what political actors believe. One particularly interesting issue concerns when elites hold different opinions from the democratic majority. In such cases, is it best to have a political system that defers to elites or one that defers to the majority? If you need an example, think of open borders.
The issue of Critical Review is self-recommending, but I am just getting started with it.
Possibly relevant: Cass Sunstein, who writes,
It’s not easy to solve the knowledge problem, but in the modern era, regulators are in a far better position to collect dispersed information from the public. On this view, the goal of notice-and-comment rule-making is emphatically not to conduct an opinion poll, to take some kind of political temperature, to see how much applause a proposal is able to attract, to defuse public opposition, to engage in some communications strategy, or to collect the digital equivalent of postcards (even though a number of those are sometimes sent in). Instead, the goal is overwhelmingly substantive, in a sense even Hayekian—to fill gaps in knowledge and to see what might have been overlooked. In particular, the agency’s assessment of the likely consequences of regulations is subject to close scrutiny. If the agency has inaccurately assessed costs and benefits, public participation can and often will supply a corrective. Democratization of the regulatory process, through public comment, has an epistemic value. It helps to collect dispersed knowledge and to bring it to bear on official choices.
As is often the case, I do not find Sunstein persuasive.
If elites are to be deferred to in areas of disagreement, then they will be deferred to in all areas and we can call it a day. One clear cut purpose for having elites at all, is in matters in which the public hasn’t thought about, wont think about, or doesn’t care, but still need to be addressed.
“In such cases, is it best to have a political system that defers to elites or one that defers to the majority? If you need an example, think of open borders.”
I suppose the answer to that question depends on whether you believe that the political system should be judged by (1) how well the regime serves the interests of the majority of the citizens (within moral, prudential and constitutional limits) or, on the other hand, (2) how well the regime serves some other interest (for libertarians and free market ideologues, aggregate global utility; for leftists, whatever “social justice” obsession is currently in fashion). If you take the view that the political system should be judged by how well it serves some interest other than that of the majority of citizens, the desirability of a democratic political system is questionable, to say the least.
Is your take on Sunstein something you’d be comfortable sharing?
I’ll second Andrew’s request. I don’t find anything obviously wrong with the Sunstein quote.
I think that “notice and comment” is less than some wonderful way to bring dispersed knowledge to the center. It is mostly a way for insiders to fine-tune their rent-seeking.
I had the same reaction as other commenters, that Sunstein was relatively persuasive. But now it does seem disingenuous and not at all Hayekian. Feedback solicitation is good for identifying issues but not for weighting them.
It helps nudgers to know what we want and give it to us good and hard.
Some of us have problems with it based on bureaucrats (i.e. “regulators” in Sunstein’s euphemism) we have known. Allowing for selection bias that experience is not encouraging.
For instance I was in a meeting this spring of a committee of Risk Managers for the nuclear power plant industry. It was my first time there, and I noticed the NRC representative. His primary function seemed to be sucking up time with platitudinous restatements of obvious goals. At one point the committee chairman, an aging materials scientist, interrupted him and said, “We get it, you’re here to help;” which put an end to it. A good friend, who’d been part of the committee for about a year, assured me this sort of behavior was typical.
A big theoretical problem, it would seem to me, for what Sunstein wants to claim is that the regulated are making at least as much use of Moore’s law as the regulators. In other words: as long as the means to collect and process information in the marketplace remains as available to private sector actors as to public sector actors the behavior of a given private sector actor is likely to grow more complex and particular, relative to an outside observer, because the private sector actor has more information about what it wants/needs and the means to act more quickly in response to that information. I think what we’re going to see is that knowledge problems are getting worse, not better.
Yeah, it is strange of him to argue that we can now get technocracy right because the world is more complex.
What drycreekboy said.
Exactly.
Sunstein seems to use libertarian terms, ie, “hayekian” in a way libertarians would say demonstrates significant misunderstandings. I think it makes his “gentle-unless-its-really-important” technocracy sound libertarian when it really isn’t close.
Upon thinking about the passage some more, I think you are right that Sunstein is misuing Hayek. The price mechanism is a Hayekian form of aggregating decentralized information, because it is a function of decisions that people make based on local knowledge. Notice-and-comment rulemaking is more like voting: comments are just voicing opinions or reflecting an interest. That’s a wisdom-of-the-crowds mechanism, maybe, but not Hayek.
1. The Politicians are generally elites, so they think more like the elites.
2. The Politicians risk problems if they institute bad policy if things get worse, even in the case where the people are for the policy before it is enacted.