Category Archives: Politics

The American Affairs Platform

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The editors write,

We will continue to offer ideas on trade agreements and other specific measures. At bottom, however, rethinking trade means rethinking the theoretical foundations of economics and moving beyond the textbook abstractions that have justified decades of failed policy.

We support recent administration efforts to impose countervailing duties on various products.

I predict that departures from free trade will, in practice, continue to protect those who need and deserve protection the least.

In general, we support universal health care administered by the government. This could involve an outright “single-payer” system—which we have no ideological objection to—or something like a “Swiss system,” which continues to involve private parties but under which premiums exceeding a certain percentage of income are straightforwardly subsidized by the government. The government should also take a much clearer role in controlling costs and setting prices for procedures and prescription drugs.

Forcing down prices is not the same thing as controlling costs. That this is not understood shows a failure of basic economic education.

we oppose efforts to “reprivatize” government-sponsored enterprises (GSEs) such as Fannie Mae. The GSEs cannot serve two masters. As long as their business model depends upon a government guarantee, they should remain wholly owned by the government.

I happen to agree, although I would add that steps can and should be taken to reduce the GSE’s role in housing finance and in credit allocation in general. I disagree with everything else the editors say about financial regulation.

When American Affairs first was launched a few months ago, it struck me that as one of the few publications that leans in the direction of Donald Trump. I still hold out hope for good things from President Trump. I cannot say the same for this journal.

The Theory of Mind

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I just finished reading The Enigma of Reason by Dan Sperber and Hugo Mercier. They look at the process by which we arrive at reasons for actions. The following thought occurs to me:

You probably assume that understanding your own mind is prior to having a “theory of mind” about other humans. However, it could be the other way around.

Sperber and Mercier do not make this sort of claim. However, I do not think that it is terribly inconsistent with their views.

A theory of mind seeks to explain why agent X performs action A. What I am suggesting is that we arrive at this theory not through introspection but instead by observing action A followed by consequence B repeatedly. After we have seen this happen enough, we develop the insight that perhaps agent X is performing action A in order to achieve consequence B. Call this the basic theory of mind, or at least a theory of what motivates others. Note that we might hold such a basic theory of mind or motivation about animals or even about an inanimate object.

Given that we have a basic theory of mind and that we assume that others have similar basic theory of mind, we can engage in a new form of teaching. If I tell you that I am performing action A in order to achieve consequence B, then you can get the point of performing action A without my having to repeat action A many times.

This explanatory form of teaching is very efficient. With cultural communication so important in humans, we have become very good at explaining to others why we do things. Moreover, explanation and justification are similar functions. We develop the ability to justify to others why we do things.

We are concerned with what others think of what we say and do. As I read Sperber and Mercier, they argue that the natural function of reason is to try to gain respect and approval of others for our actions. I think that Sperber and Mercier do not give enough credit to the role of reasons in making teaching more effective. Imagine telling a child to look both ways before crossing a street without telling the child why they should do so. The child could perform the ritual exactly as directed and then walk right in front of moving car.

But the role of reasons in teaching does not address the enigma to which Sperber and Mercier refer. The enigma is that our reasoning process evolved to be biased rather than optimized to arrive at truth. Their explanation is that our reasoning process evolved as a mechanism to explain and justify our actions to others. The goal of reasoning is not to seek Truth but to defend our status. Biased reasoning is helpful for defending status. Bias is less helpful when we are trying to make decisions, but when we make decisions we are simply adapting our reasoning tool to a less natural context.

Sperber and Mercier make another claim, which is that when we argue with one another, we arrive at more reasonable conclusions than when we reason on our own. They say that this is because when we evaluate our own reasons we lack objectivity. They think we are more objective when we evaluate others’ reasons, so that our evaluations are more reliable. I do not find that persuasive. I think that part of defending our own reasons is attacking our opponents’ reasons, and I believe that we tend to be uncharitable to those who disagree with us. I am more inclined to ascribe the benefit of arguing to exposure to reasoning that we have not considered, rather than to a greater objectivity in hearing others’ points of view than in evaluating one’s own.

If reasoning evolved to justify our actions, then how do we get to a point where we use reasoning to make decisions? I think that the most consistent application of their idea would be to say that when we make decisions we anticipate having to defend our actions. As we go through this mental process, we may decide that some actions are unwise. Anticipating my wife’s reaction should I come home drunk, I stop drinking.

It could be that people with poor self-control have difficulty engaging in this exercise. That is, they either lack the ability to anticipate the reactions of others or they are less sensitive to such anticipated reactions.

It is interesting to note that I have often advised people in the throes of making a decision to imagine explaining that decision to a variety of other people. If you are thinking of quitting your job, imagine explaining that to your family, to close friends, to co-workers, and so on. I have suggested that such an exercise can help to clarify your thoughts.

Anyway, what occurs to me is that we obtain our theory of mind “outside-in” rather than “inside-out.” That is, by observing other people and listening to their reasons, we develop a theory of how our own minds ought to work.

Thoughts on the new class war

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Michael Lind writes,

the theory of the managerial elite explains the present transatlantic social and political crisis. Following World War II, the democracies of the United States and Europe, along with Japan—determined to avoid a return to depression and committed to undercutting communist anti-capitalist propaganda—adopted variants of cross-class settlements, brokered by national governments between national managerial elites and national labor. Following the Cold War, the global business revolution shattered these social compacts. Through the empowerment of multinational corporations and the creation of transnational supply chains, managerial elites disempowered national labor and national governments and transferred political power from national legislatures to executive agencies, transnational bureaucracies, and treaty organizations. Freed from older constraints, the managerial minorities of Western nations have predictably run amok, using their near-monopoly of power and influence in all sectors—private, public, and nonprofit—to enact policies that advantage their members to the detriment of their fellow citizens. Derided and disempowered, large elements of the native working classes in Western democracies have turned to charismatic tribunes of anti-system populism in electoral rebellions against the selfishness and arrogance of managerial elites.

This is a theme of a number of recent essays. In a review of Richard Baldwin’s book on globalization, Christopher Caldwell writes,

But only a tiny fraction of people in any society is equipped to do lucrative brainwork. In all Western societies, the new formula for prosperity is inconsistent with the old formula for democracy.

In the same publication, Angelo M. Codevilla writes,

The 2016 election and its aftermath reflect the distinction, difference, even enmity that has grown exponentially over the past quarter century between America’s ruling class and the rest of the country.

…The government apparatus identifies with the ruling class’s interests, proclivities, and tastes, and almost unanimously with the Democratic Party. As it uses government power to press those interests, proclivities, and tastes upon the ruled, it acts as a partisan state. This party state’s political objective is to delegitimize not so much the politicians who champion the ruled from time to time, but the ruled themselves.

A few remarks.

1. Keep in mind that if a few tens of thousands of votes in key states had come up differently, we would be less interested in essays of this sort.

2. As the authors are aware, the class differences have been simmering for a long time and have been noted by many writers. Lind starts with Galbraith and James Burnham. One could move on to Robert Reich’s “symbol analysts” and David Brooks’ Bobos.

3. I might use the distinction of abstract workers and concrete workers. Concrete workers work with stuff. They are in construction, mining, agriculture, manufacturing, and transportation. They might own small retail and service businesses (think of repair). Abstract workers work with words, numbers, and computer programs. Think of lawyers, accountants, software developers, teachers, and bureaucrats. This abstract-concrete distinction is not a perfect dichotomy (health care, for example, combines a lot of both), but it is useful if we do not get too carried away with it.

4. The status of workers in the concrete sector is threatened in many ways. Outsourcing, machine substitution, ease of firing a non-performer, inefficient firms going out of business, and industries with productivity rising faster than demand all could cause the loss of a concrete sector job.

5. The status of workers in the abstract sector is protected in many ways. A public school teacher or industry regulator need not worry about outsourcing, machine substitution, being fired as a non-performer, having an inefficient employer shut down, or facing a decline in demand. Many abstract workers have protection from having their wages pressured by competition from people who lack their credentials. Workers in the concrete sector believe that their wages can be pressured by competition from people who do not even have citizenship papers.

6. Government and management are mostly abstract functions. So the natural order of things is for the Abstract class to rule over the Concrete class.

7. You have to wonder whether (5) is to some extent a result of (6). That is, maybe the Abstract workers who make the rules have set things up to protect Abstract workers but not Concrete workers. As policy makers rescued the economy from the financial crisis, a lot of Concrete workers lost their homes, but financial executives did not lose their mansions.

8. Lind argues in favor of policies that add protection to workers in the Concrete sector. The libertarian alternative is to provide less protection and government indulgence to workers in the Abstract sector. I do not much care for Lind’s vision. But the libertarian vision is surely a non-starter in reality.

Interesting Sociology

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From a Joint Economic Committee Report.

In the early 1970s, nearly seven in ten adults in America were still members of a church or synagogue. While fewer Americans attended religious service regularly, 50 to 57 percent did so at least once per month. Today, just 55 percent of adults are members of a church or synagogue, while just 42 to 44 percent attend religious service at least monthly.

…Between 1970 and the early 2010s, the share of families in large metropolitan areas who lived in middle-income neighborhoods declined from 65 percent to 40 percent. Over that same time period the share of families living in poor neighborhoods rose from 19 percent to 30 percent, and those living in affluent neighborhoods rose from 17 percent to 30 percent.

…Between 1974 and 2015, the share of adults that did any volunteering who reported volunteering for at least 100 hours increased from 28 percent to 34 percent.

Pointer from Timothy Taylor.

Interesting throughout. Some, but not all, of the findings relate to what I have called Narrower, Deeper, Older. That is, people are drifting away from the sort of lowest-common-denominator activities that require a modest commitment of time. Instead, people prefer narrower niche activities in which they become more deeply involved.

If you look at associational life in terms of the broader, shallower associations of 1960, our social capital is going down. But looking at it in terms of the narrower, deeper associations of today, the analysis is more complex.

Have I changed my mind?

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A reader asked,

In light of everything that has happened in the last few years, have you changed your mind on anything.

In the context, this was a question about politics. I think that in general I have become more pessimistic about American political culture.

I think that I would have preferred that the elite stay “on top” as long as they acquired a higher regard for markets and lower regard for technocratic policies. What has been transpired is closer to the opposite. There was a seemingly successful revolt against the elite (although the elite is fighting back pretty hard), and meanwhile the elite has doubled down on its contempt for markets and its faith in technocracy.

I am disturbed about the news from college campuses. A view that capitalism is better than socialism, which I think belongs in the mainstream, seems to be on the fringe. Meanwhile, the intense, deranged focus on race and gender, which I think belongs on the fringe, seems to be mainstream.

The media environment is awful. Outrage is what sells. Moderation has fallen by the wayside.

It seems increasingly clear that no matter who wins elections, my preferences for economic policy get thrown under the bus. The Overton Window on health policy has moved to where health insurance is a government responsibility. The Overton Window on deficit spending and unfunded liabilities has moved to where there is no political price to be paid for running up either current debts or future obligations. The Overton Window on financial policy has moved to where nobody minds that the Fed and other agencies are allocating credit, primarily toward government bonds and housing finance. The Overton Window on the Administrative State has moved to where it is easier to mount a Constitutional challenge against an order to remove regulations than against regulatory agency over-reach.

Outside of the realm of politics, things are not nearly so bleak. Many American businesses and industries are better than ever, and they keep improving. Scientists and engineers come up with promising ideas. Reading Technology Review is a wonderful antidote to reading, say Regulation Magazine. The latter is the most depressing thing I do all month.

Yuval Levin on Conservatism

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He says,

I think of alienation as a sense of detachment from one’s own society. It’s looking out at the society you live in and thinking, “That’s not mine” and feeling no connection, no links—seeing it as distant, as hostile, even seeing it as boring. We should never underestimate the power of boredom in social life. That kind of alienation was very much on display in the last election and in some people’s—especially early on in the Republican primaries, in the most devoted Trump supporters—there was a sense that “This society isn’t ours. We have got to blow this up and try again.” I think that’s dangerous in general, but it’s particularly dangerous to conservatism because conservatism in a sense is a sense of attachment and ownership and defensiveness of one’s own society.

…I think America doesn’t deserve that. We have a lot of problems, our institutions are in real trouble, but things are not nearly as bad as the way in which Trump described them.

Later in the interview (conducted by James Pethokoukis):

I think Twitter encourages the worst of our instincts and habits in modern America, especially in our political culture. My inclination to respond to the speeding up of everything by slowing down.

I agree. I let most of my posts sit for several days before they appear. Sometimes I wish commenters would do the same (although lately the comments have been better than they used to be).

In the article to which the interview refers, Levin writes,

The vague feeling that what had become of our society was somehow remote and incomprehensible—that it was insane, or at the very least not America as we knew it—was a prominent feature of the kind of frustration that many early Trump supporters articulated. The idea that there was something fraudulent about our social order and its institutions was everywhere in Trump’s rhetoric—directed at various points to the electoral process, the media, the political parties, the legal system, the judiciary, the IRS, the FBI, and on and on among our institutions. The sense that this incomprehensible fraud perpetrated on the public by its own elites had robbed America of hope was key to the willingness of many on the right to overlook Trump’s own shortcomings and welcome the potential for disruption that he introduced.

…The sense of lacking a stake in the nation’s governing institutions—the feeling that those institutions are remote and unresponsive—makes it difficult to know what to do when they fall into your possession.

here is a concise version of the conservative creed:

we value long-standing institutions and practices. They have stood the test of time, which is a trial-and-error process carried out across generations confronted with essentially the same kinds of problems rooted in the nature of the human person.Change and adaptation in response to new circumstances is best carried out through the institutions and traditions formed by that process rather than around them so as to give us a chance to build incrementally on what works in order to address what does not.

A sentence to ponder:

shifting emphases of our two broad political coalitions suggest an underlying shift in our common life from an American politics that expresses above all a yearning for freedom to one that at least alongside that expresses a powerful yearning for solidarity.

Think of what the left’s yearning for solidarity as expressed on college campuses. Think of what the right’s yearning for solidarity as expressed in hostility to immigrants. Is there a more constructive way to channel a desire for solidarity?

Neoliberalism vs. Boboism

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Tyler Cowen recently linked to some interpretations of the 2016 election that differ from mine.

My most pronounced views are:

1. Be careful not to over-interpret the election. It was very close. Had the ball bounced differently, we would be reading few essays about the populist revolt and many essays about the political strengths of Mrs. Clinton and the Democrats. I believe that the election of President Obama was assigned excess significance by pundits, and I believe that the election of President Trump is being assigned excess significance squared.

2. I believe that the best interpretation of the populist revolt is that it reflects anti-Bobo sentiment. Bobo, of course, is David Brooks’ shorthand for bourgeois bohemian. It describes those of us who are well educated, well off financially, socially liberal in outlook, bourgeois in important respects, and bohemian in superficial respects. In his book published in 2000, Brooks painted a mostly favorable portrait of the Bobos.

However, it turns out that many Bobos became increasingly smug about their cosmopolitan social morality, to the point of not being able to hide their contempt for those who do not adopt the Bobo ethos. They became moral narcissists, meaning that

What you believe, or claim to believe or say you believe—not what you do or how you act or what the results of your actions may be—defines you as a person and makes you “good.”

One of Tyler’s links goes to Andrew Sullivan.

Modern neoliberalism has, for its part, created a global capitalist machine that is seemingly beyond anyone’s control, fast destroying the planet’s climate, wiping out vast tracts of life on Earth while consigning millions of Americans to economic stagnation and cultural despair.

I have grown wary of the term “neoliberalism.” It gets used as an undefined all-purpose boo-word. Want to explain the financial crisis? Blame neoliberalism. Want a simple theory to explain the phenomena cataloged in Coming Apart and Our Kids? Blame neoliberalism. Upset that Donald Trump won the election? Blame neoliberalism.

The term also comes up in the other essay to which Tyler links, by Henry Farrell.

They also provide, potentially a diagnosis of what has gone wrong since the 1980s. Embedded liberalism is dead, and neo-liberalism has triumphed in its place.

If neoliberalism is the ill-defined boo-word, then social democracy is the ill-defined yay-word, which Farrell employs enthusiastically. He all but insists that social democracy is what Trump voters really need, and they just need to learn what is good for them.

Again, I read the election differently. The way I see it, in 2016 there were some voters in key states who decided that they would be better represented by an anti-Bobo in the White House.

Firm, Soft, Militant, Moderate

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Suppose that your beliefs can be firm or soft, and that your tone can be militant or moderate. This yields a matrix:

Firm Soft
Militant True Believer Tribal
Moderate Principled Weathervane

The True Believer expresses anger and contempt for those who disagree.

Tribal means that you care most about group status. An example would be an economist who is a deficit hawk when one party is in power but a deficit dove when the other party is in power. Or an economist who uses a high estimate of labor demand elasticity when arguing for more immigration and a low estimate of labor demand elasticity when arguing for a higher minimum wage (or an economist who does the opposite).

Principled means that you care more about your beliefs than about tribal loyalty. However, you are willing to tolerate and even respect people who disagree.

Weathervane means that you want to just “go along to get along,” to please people and further your ambitions.

1. David Brooks, in Bobos in Paradise (2000), seems to me to have suggested that people with firm beliefs tend to have to be militant in tone in order to be successful as public intellectuals. That is, the public does not respond to the category I call Principled as well as it does to the category I call True Believer. People may even mistakenly treat a militant tone as a signal of firm beliefs.

2. I think that in the media, the biggest growth over the past twenty years has been in the Tribal category. The other categories are losing out. Both the strong pro-Trump camp and the strong anti-Trump camp strike me as Tribal.

3. I am disturbed by the increasing use of violence and speech suppression by the True Believers on the left.

4. You can argue that the Weathervane category is what holds the country together. Politicians who can change with the mood of the country and compromise make democracy more comfortable than politicians who stick to their guns. Many people look at Macron in France as a sort of Weathervane savior.

My bottom line is that I like the Principled category the most and the Tribal and True Believer categories the least. I lament that the media culture rewards and amplifies militants over moderates.

Where Conservatives and Libertarians Part Ways

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A commenter writes,

I am confused by the conservative libertarian laments of the French and US realities. . .why are conservatives lamenting the towns so much? I think there is a degree of nostalgia for a better time and these towns better represent small c conservatism, but according to creative destruction doctrines we should let them fail.

I think that libertarians take exactly the “let them fail” position. And I think that most libertarians fall on the Bobo side of the Bobo vs. anti-Bobo axis. Don Boudreaux offers an almost daily dose of anti-Trump posts, strictly on the trade and immigration issues.

On the other hand, many conservatives are focused on lowering the status of progressives. You will notice that I am often in that camp. I hate the smugness of progressives so much that I do not wish to partake in the Trump-bashing that Don and my other libertarian friends dish out.

One of my progressive friends posted a picture of herself on Facebook carrying a sign at a demonstration that read, “Climate change is not an alternative fact.” I have adopted a rule of not commenting on politics on Facebook, but I was so-o-o tempted to write, “Indeed, it is an alternative religion.”

Deep State?

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Tyler Cowen writes,

I don’t believe in many (any?) conspiracy theories, and if there hasn’t been talk about “the deep state” on MR to date, there is a reason for that. Still, I have been wondering how one might think about the deep state in public choice terms, even if you have a rather modest view of what it is all about. Day to day, we mostly get “the shallow state,” so what might the deep state mean?

I immediately think of J. Edgar Hoover. A lot of Presidents did not like him, but no one dared to get rid of him. To me, that is the ultimate in “deep state” power. It is the ability of some bureaucrats, particularly within the national security apparatus, to hold onto their budget and autonomy even when their policies and/or personalities clash with those of the “shallow state” (elected officials).

I also think of Mark A. Zupan’s Inside Job, which I have just read. He talks about the ability of government officials to act on behalf of proprietary interests, including their own. It is a depressing book. The least compelling chapter is the one where he suggests reforms to try to improve the situation. As long as the public, particularly the educated public, has such a naive support for government power, things seem pretty hopeless to me. In some sense, perhaps the real Deep State is the education establishment, which serves as an anti-market, pro-government propaganda machine. That may be more important than the leverage that the security establishment has with politicians.