An angle I’m not sure I’ve heard before. Glad Jonathan Zasloff acknowledges he would actually be to the left rather than complaining about how awful Republicans are now compared to the good old days. For myself I’ll say that part of my childhood identification as a Republican (before I heard of libertarianism) owed in part to the image of a serious grown-up in a suit who understood how business worked.
December 2, 2010
Entitled to an Opinion 
December 3, 2010 at 10:51 am
Trouble is, the Rockefeller Republican understanding of how business works is that it works hand in glove with the government. It’s an outlook that made a certain amount of sense back in the days when a few blue-chip companies – GM, IBM, GE, etc – were corporate America and these functioned in a manner not too dissimilar to the US government.
The world has changed a lot since then, but the Rockefeller Republicans are still with us and still have the same outlook.
December 3, 2010 at 1:14 pm
If Obama is a Rockefeller Republican, who now fills the slot in the Democratic party once occupied by Hubert Humphrey or Scoop Jackson?
They were certainly to the left of Rockefeller, with whom they were contemporaries; yet Democrats of the Humphrey type seem to me to be distinctly to the right of today’s Democrats, Obama included. For example, I never recall Humphrey being as hostile to small business as Obama is. Obama harps on how people making over $250,000/year are “rich” and deserve to be taxed more highly; yet today’s $250,000, adjusted for inflation, is probably equivalent to about $25,000 in 1960’s money. I remember Humphrey well, and he did not engage in Obama-style class warfare against people enjoying such incomes.
The flavor of today’s Democratic party is distinctly McGoverrnite. It may be recalled that McGovern supported not Harry Truman but Henry Wallace in the 1948 election. The Wallace faction, heavily influenced by Communists, was what Hubert Humphrey threw out of Minnesota’s Democrat-Farmer-Labor party sixty years ago. Today, they are back, and they rule the national Democratic party as well as Minnesota’s DFL.
December 3, 2010 at 9:50 pm
A Humphrey-Muskie campaign brochure:
http://www.4president.org/brochures/humphreymuskie1968brochure.htm
I often hear complaints that the Democratic party is full of Scoot Jacksonites and that they’re deathly afraid of association with McGovern, but that’s usually in the context of foreign policy.
I went to westegg.com/inflation and got this result:
What cost $250000 in 2009 would cost $37153.59 in 1965.
Also, if you were to buy exactly the same products in 1965 and 2009,
they would cost you $250000 and $1717674.27 respectively.
The top marginal tax rate was above 75% throughout the sixties, it has been in the 30s since the nineties.
Households currently making $250,000 are at the 98th percentile.
December 3, 2010 at 11:54 pm
Very interesting to read that old campaign brochure. Yes, lots of government programs, but no kvetching about “the rich” like we hear all the time from Democrats today. This is a change, and a big one, associated with doctrinaire socialists from academia having taken the party over from working-class social-democrats.
Have you noticed the lack of actual working-class people in the Democratic party and the labor union movement today? Humphrey started in life a drugstore clerk at his father’s small-town pharmacy. George Meany, who had actually been a plumber, was head of the AFL-CIO. Contrast this with Obama, a law professor, and Andy Stern, recently of the SEIU, a graduate of the Wharton School who became a welfare case officer, but never worked at a blue-collar job in his life.
More below on inflation and taxes.
December 4, 2010 at 11:03 am
The pre-mcGovern Democrats were still somewhat to the left on economic issues – look at FDR. The dramatic change in the Dems was from being the more socially conservative party into being one which was culturally left in the Frankfurt School sense. Up to that point America had never seen one of its two parties be overtly hostile to it.
Before McGovern the Democratic party had its faults, but it never saw the American people as an enemy to be overcome.
December 4, 2010 at 12:09 pm
McGovern was about as American as its possible to be — born in a South Dakota farm town, educated himself out of poverty, WWII pilot. The notion that his campaign represented some sort of anti-Americanism is one of those typical ludicrous counterfactuals beloved of the right (I just saw another one, in a WSJ editorial by the loathsome crank R. Emmett Tyrell, that claimed that one of Reagan’s chief values was balanced budgets). His campaign actually represented one of the last fleeting efforts of real Americans to assert their interests over the national security state, which has been riding high in the saddle ever since.
December 4, 2010 at 1:16 pm
“McGovern was about as American as its possible to be — born in a South Dakota farm town, educated himself out of poverty, WWII pilot.”
I don’t see the relevance to the matter of whether his beliefs were hostile to America.
In any case if you take the trouble to read just a little more carefully, you’ll notice that I was commenting on the pre and post McGovern Democratic party rather than on George McGovern the individual. I did not claim that he personally brought about the transformation.
As far as “real Americans” are concerned, the post-McGovern Democratic party has been characterized by it’s belief that “real Americans” are incorrigibly evil and need to be replaced by immigrants (preferably non-white) as quickly as possible.
December 4, 2010 at 9:56 pm
I’ll give McGovern credit for this – late in life he tried to manage a small business (an inn, if I recall correctly). He wrote an article about this experience for the Wall Street Journal, in which he acknowledged that he was surprised by the heavy burdens of regulation and taxation that he encountered for the first time. Better late than never, I suppose.
December 3, 2010 at 11:39 pm
What cost $250,000 in 2009 would cost $37,153.59 in 1965? Not if it were silver or gold. Since they were the basis of our currency until the 1965 demonetization of silver and Nixon’s abandonment of Bretton Woods, they should be assigned some weight. The CPI historically understates inflation.
Based on a price of $35/oz for gold in 1965 as opposed to a price of $1400/oz today suggests a 40-fold inflation. $25,000 in gold at 1965’s price would equal $1 million today. Silver’s monetized price in 1964 was $1.29, at which price the 90% silver U.S. coin then in circulation was worth its face value. Engelhard’s industrial silver price per today’s Wall Street Journal is $28.86/oz. This translates to a more than 20-fold inflation from 1965 to the present; i.e., $25,000 face value of pre-1965 U.S. silver coin would today be worth more than $500,000, not accounting for numismatic premiums.
The top marginal tax bracket from 1960 through 1963 was 91%, but it applied only to incomes over $400,000. Using the inflation calculator to which you linked, that amount would today be worth $2,865,382.60 in today’s money.
In 1964, the top marginal rate dropped to 77% on incomes over $400,000. From 1965-67 the marginal rate was 70%; in 1968 it was 75.25% on incomes over $200,000, in 1969 it rose to 77%, and in 1970 it was 71.75% on incomes over $200,000. A chart of these rates may be found at: www,truthandpolitics.org/top-rates.php
Your contention that “the top marginal tax rate was above 75% throughout the sixties” is hence shown to be incorrect.
More relevant to my point, in any event, would be the question, what was the marginal rate in 1960 on an inflation-adjusted equivalent to $250,000 of 2009’s money – i.e., using your calculation, $37,153.39? That rate would have been much more modest than 91%. A small businessman making $25,000 – $40,000, which might have been reasonable amounts for such a person to earn at that time, would not have been taxed anywhere near 91%, or even 77% or 70%.
It must also be remembered that the ‘sixties were a great time for small businesses to incorporate. My late father had two corporations at this period, so as to take advantage of the low bracket for each one. The U.S. corporation income tax on the first $25,000 of income was 30% from 1952-63, and 52% over $25,000. In 1964 the rate on the first $25,000 of income dropped to 22% and on income over $25,000 dropped to 50%. From 1965-67 the rates were 22% on the first $25,000 and 48% on income over that amount; in 1968-69 they rose to 24.2% on the first $25,000 and 52.8% on income over it; in 1970 they fell to 22.5% and 49.2% respectively. This information may be found at: http://www.irs.gov/pub/irs-soi/02corate.pdf
It will be seen that by incorporating two entities to handle different facets of a family business (typically one to own the manufacturing, farming, wholesaling, or retail business; the other to own the building(s) and land in or on which they were carried on; the former paying rent to the latter), $50,000 in income could be realized and taxed at 30% or less throughout the 1960s. According to the inflation calculator you cite, that $50,000 in 1965’s money would be worth $358,172.82 in 2009’s money.
At that period, too, what could be deducted as corporate expenses and passed along as perquisites to owners and managers was fairly generous compared to the present – e.g., city and country club memberships, business travel and entertainment, etc. The ‘sixties were the heyday of the three-martini lunch. It was easy to live large and write it off on one’s taxes.
The ease with which small-business income could be shielded from taxation at personal income tax rates is one reason why Federal tax revenues have not fluctuated very far from an average of 18% of GDP since the end of WWII, despite vast fluctuations in the personal income tax rate. Anyone who believes that increasing top marginal income tax rates will yield a proportionate increase in federal revenues is whistling past the graveyard. History provides little reason to believe this.
People with substantial assets tend to be very well informed about strategies for legal tax avoidance. Like hydrostatic pressure, money always follows the route of least resistance. Good tax lawyers and accountants are quite accomplished in engineering that route.
December 4, 2010 at 1:03 am
Rockefeller Republicans were generally sane, so they would have no home in today’s Republican party. It would be nice to have a political faction that was conservative in the genuine meaning of the term: prudent, adult, fiscally responsible. Too bad we don’t have one. When I was a kid we had a Rockefeller Republican, Charles Percy, as our Senator, who was pretty good — pro-civil rights, a dove on Vietname, for instance. Different world.
Labeling Obama a Rockefeller Republican doesn’t make much sense to me. The RRs were a product of a particular time and a political ecosystem that no longer exists. To me, Obama is just a black Bill Clinton — a few progressive moves and allies, but basically beholden to the same powers that everyone else is (Wall Street and the national security apparatus, mainly).
December 4, 2010 at 9:51 pm
Obama seems to me to resemble Jimmy Carter more than Bill Clinton. He has Carter’s aloofness, inflexibility and thin skin – all traits that Clinton conspicuously lacked, to his great advantage.
December 5, 2010 at 2:52 am
I think this is uncharacteristically simple (in a distortingly wrong way) from you, mtravern.
“Beholden to wall street and national security institutions” is too simple a way to describe Obama or past Presidents, IMO. It works for Matt Taibi, but your demonstrated capacity for analysis is higher.
Also, I disagree with the point that there are no technocrat politicians in today’s Republican party. Mitt Romney is the very essence of a technocrat Republican, and he’s a leading presidential candidate. There’s a small but existing bench of others, notably Jeb Bush and hopefully soon General Petreus -although it’s unfortunate that they lost Bloomberg. There’s ridiculously strong anti-technocrat resistence in the Republican party that’s not symmetric to the relatively marginalized anti-technocratic elements in the Democrat party.
December 5, 2010 at 11:25 am
Well, I’m not going to post a complete analysis in a blog comment. What I said may be simple, but seems basically right, and if you disagree you need to say why.
Romney may be a technocrat at heart but if he wants to be nominated he has to cave to the extremist wing of his party, which he’s been busy doing the last few years. This is quite different from the RRs who were willing to stand up to Nixon.
December 5, 2010 at 12:08 pm
There’s a difference between cave theater and behavior indistinguishable from ideological capture. For example, I think at their best, Obama’s team highly performs the art of cave theater while quietly moving in a technocratic direction. I don’t see that Romney has to behave in office in a way indistinguishable from if he’d been ideologically captured.
December 5, 2010 at 12:09 pm
Also, I’m probably more ignorant than you, but I’ve seen Nixon on balance as technocratically inclined. In what technocratic way did RR’s differe from Nixon?
December 5, 2010 at 12:24 pm
I don’t hold “technocratic” as the highest possible value for judging a politician, so we may be talking past each other. Certainly someone who can manage the country into prosperity is preferable to a crazed ideologue.
In Nixon’s case, he was not much of a technocrat, he was basically a criminal willing to do anything, such as prolong wars or commit burglary, for his own purposes. He was not very ideological, but willing to use ideology to split the country for political gain — Rick Perlstein’s book Nixonland is a very good political hisatory of the era that emphasizes this role.
December 5, 2010 at 2:24 pm
“In Nixon’s case, he was not much of a technocrat, he was basically a criminal willing to do anything, such as prolong wars or commit burglary, for his own purposes.”
I guess you really are more simple in your analysis than I thought in the past.
December 5, 2010 at 6:39 pm
Sorry to disappoint you; I seem to have that effect around here.
December 5, 2010 at 5:24 pm
Nixon was a technocrat in the sense that he really believed that government could fine-tune the economy. He abandoned Bretton Woods for fiat currency, imposed price controls, and proclaimed “we are all Keynesians now.” These are his real crimes, not the continuance of the Vietnam War (which was really LBJ’s blunder) or the Watergate break-in, which was no worse than many things done by his predecessors in both parties.
Price controls ended disastrously, creating shortages which were promptly relieved as soon as they were lifted – and many prices ultimately fell afterwards, in any event. Nixon’s Keynesianism, like all Keynesianism going back to the time of Keynes, failed to “stimulate the economy.”
The policies begun by Nixon bore their ultimate fruit during the Carter administration, with gas lines and “stagflation,” which decisively exploded the Phillips curve hypothesis that there was a trade-off between unemployment and inflation. Staglfation proved we could have both simultaneously, undermining a key tenet of 1970s Keynesianism.
Recent economic studies have shown that the business cycle’s fluctuations have been more pronounced since the abandonment of Bretton Woods than they were before it, confirming what has always seemed evident to me, namely that the Fed’s “management” of the economy may have slowed the frequency of the business cycle, but has increased its amplitude.
Score, on price controls, Bretton Woods, and Keynesianism: Classical economics 3 – Nixon 0.
December 5, 2010 at 5:39 pm
Michael, your approach to govt. and economy seems to me to be more a posture than a comprehensive assessment, although I think it’s implied in your commentary that you think some institutional structure in relation to human economic interaction is optimal (for example, that gold standard comes from somewhere, and you seem approving of JP Morgan’s (the historical man, not the current instution) anti-panic manipulations.
December 5, 2010 at 6:50 pm
You must be using some private definition of “technocrat”, since in common use it means letting decisions get made by those with the actual skilla and knowledge necessary to make them.
December 6, 2010 at 1:13 pm
Technocrat is a combination of the Greek noun “techne” (art or craft) with the verb “krateo,” to be strong and mighty, to rule or to hold sway. Combining the two suggests rule by art or craft, i.e., of state, rather than by a particular person (autocracy), class of persons (aristocracy) or by the deme or tribe as a whole (democracy).
One need not have command of the particular art or skill in order to be a technocrat; a chief executive may, and usually does, put persons deemed specially expert or skilled in positions of operating authority under him. This is what Nixon did, just as Johnson, Kennedy, and other presidents before him did. To the degree that they believed in and relied upon the rule of experts, they were all technocrats.
The history of this kind of technocratic approach in this country perhaps goes back to Woodrow Wilson and his advisor Edward Mandell House. House, it may be recalled, wrote a novel entitled “Philip Dru, Administrator,” in which the eponymous protagonist was the exemplar of a technocrat. In the ‘twenties, Walter Lippmann was the great advocate of technocracy. In his book “Public Opinion” he portrayed the citizenry as a chaotic mob incapable of self-government, who needed to be governed by “a specialized class whose interests reach beyond the locality,” composed of experts, specialists and bureaucrats. This has been the predominant attitude in American political leadership since at least the administration of Franklin Roosevelt, with his “brains trust.”
It is important, pace mtraven’s definition “letting decisions get made by those with actual skills and knowledge necessary to make them” that it is not the case that those who are called technocrats have “actual skills.” It is sufficient that they be thought to have actual skills. The fact is that in most cases, they have not.
Take, for example, Robert S. McNamara. He was the star technocrat of the Kennedy administration: as a Harvard MBA and president of Ford Motor Company, he was somehow thought competent thereby to run the U.S. armed forces. The title of David Halberstam’s book “The Best and the Brightest” summarizes what was sincerely believed of McNamara and his cohort at the time of their installation, even though by 1972 when the book was published, it could only be applied to them ironically.
Just as McNamara failed abjectly as Secretary of Defense, we find that many other supposed technocrats in whom great faith was placed at the time failed similarly. FDR, despite all the advice of his “brains trust,” was unable to revive the economy during the nineteen-thirties: unemployment, having peaked at 25%, was still at 18% in 1939, ten years after the Great Crash. World War II was the deus ex machina that plucked the country from the Depression.
The policy advice of Keynes, the archetypal advocate of economic technocracy, has indeed a very spotty record. Government experts, it seems, always bat less than .500. In the private sector, it is no different. The majority of “expertly” managed mutual funds do not outperform indices such as the Dow Jones industrial average or the Standard & Poor 500.
THe gold standard comes from the long experience of the human race, and I suggest that just about any social or economic arrangements that have much chance of stable function must make primary reference to the same. I suggest that it is a mistake to suggest that the conceptual structure of applied science or technology is a useful model for the government of nations. These are valuable tools, but only for their purpose. One cannot pound nails with a screwdriver, nor drive screws with a hammer. Trying to “scientifically manage” an economy or a society inevitably comes a-cropper. One might as well try to square the circle. The task is not amenable to the proposed method.
December 6, 2010 at 5:42 pm
For any possible governmental problem, there are roughly three approaches:
(1) do nothing.
(2) take an action motivated by political considerations or ideology.
(3) take an action motivated by object consideration of the situation and likely consequences.
In practice I don’t think the last two are anywhere so neatly separable. But the meaning of ‘technocrat’ is supposed to suggest a strong tendency towards (3), someone who makes decisions based on objective considerations. In practice it often means focusing on narrow pragmatic considerations and ignoring the broader moral or political context (McNamara is the canonical example here).
But you seem to be deliberately conflating (2) and (3) to allow yourself to label anybody who advocates that the government do anything as a technocrat. That’s just stupid. Nixon didn’t impose wage and price controls based on technical considerations, he did it to get re-elected.
December 6, 2010 at 10:21 pm
Nixon imposed wage and price controls because he had no firm principles. If he had been a genuine conservative, he’d have realized they were 1) outside the authority of government as envisioned by the Framers to impose, and 2) wouldn’t in any event work to attain the objective of controlling inflation, because it was not created by the private sector, but rather by Federal monetary policy. Nixon thought he was taking a pragmatic step, but it didn’t come out the way he thought it would. So, he was a technocrat – a believer that direct government intervention in markets could do good – and an inept one.
The correct solution, which was finally implemented by Paul Volcker, was not to meddle in private sector wage and price decisions, but to rein in monetary expansion, an option that didn’t occur to Nixon or his house experts. One could say Volcker was a better technocrat, but I would argue it was because he had sounder principles.
I do not advocate that the government “do nothing”; I advocate that it do what is within its proper authority, and not do what is not within it. Government is, like the applied sciences, an instrument of limited purposes. They are limited not only by the Constitution and the common law, but by the very nature of government. When politicians have extravagant illusions about what they are capable of accomplishing, they predictably get into trouble. Thus my scepticism of so-called technocrats.
December 7, 2010 at 12:38 am
Further, to say that Nixon imposed wage and price controls “to get elected” presumes that there was much of a contest. McGovern was a hopeless candidate in 1972. As it was, McGovern garnered only 37.5% of the popular vote to Nixon’s 60.7%, and Nixon won by 520 electoral votes to McGovern’s 17.
McGovern’s platform included such planks as a 100% estate tax on estates over $500,000. That’s a play straight from the “Communist Manifesto,” entirely befitting a former partisan of Henry Wallace.
Surely Nixon didn’t have to engage in any economic dirigisme to win against such an arch-dirigiste as McGovern. If the contention is that imposing wage and price controls was purely a political stratagem to ensure Nixon’s re-election, the persons making that contention must demonstrate that having done so was a necessary condition for Nixon’s victory. Clearly it was not. Any Republican, however “wet” – and Nixon was plenty damp, at the least – could have won in 1972 against a candidate like McGovern with his extreme left-wing platform.
December 7, 2010 at 4:39 pm
“Technocrat is a combination of the Greek noun “techne” (art or craft) with the verb “krateo,” to be strong and mighty, to rule or to hold sway.”
This is unfair, but this seems to me to be a widespread middlebrow (I think that fits it better than “hack” or “cliche”) approach to a topic by breaking down a word or topic name down to its etymological components and/or providing its definition from some academically prestigious source.
December 7, 2010 at 5:37 pm
How else are we supposed to define such a word? Presumably those who coined it understood its roots, which perhaps differentiates them from those who use it carelessly today. Such are the consequences of the decline of classical education, which was in any event never a “middlebrow” institution.
December 15, 2010 at 7:35 pm
Looking at etymology is often useful, but frequently misleading. Words take on new meanings as the fruits of the previous definitions ripen.
‘Aristocracy’, after all, originally meant “rule by the best”. The basic concept doesn’t require that being an aristocrat is something that is passed down to offspring, or that a ‘ruling class’ is established.
December 18, 2010 at 3:37 pm
Indeed, aristocracy as envisioned by Aristotle is something different from what is exemplified in Burke’s Peerage. However, both are distinct from technocracy.
The Aristotelian aristocrat is “best” not in terms of his technical ability, but in terms of his virtues: arete (moral excellence) and philotimia (love of honour, liberality).
A technocrat would appear to me to be one who is clever in the mechanical aspects of rule, irrespective of or perhaps in spite of virtue; Machiavelli’s prince. Technocracy simply implies an oligarchy made up of such clever amoral persons.
December 6, 2010 at 12:45 am
H.A, would you identify anti-technocratic forces as those generally labeled “populist”?
I think Romney might behave in office as basically technocratic (though we should remember that someone governing Masachussetts will likely behave differently than when governing the U.S). I do think Romney has basically been captured by the worst part of the Republican party, the national security wing. As a domestic pol that’s not really his bailiwick so he’ll just defer to their “expertise”.
Nixon was a smart guy who did some destructive things as president (like Woodrow Wilson). Patching things up with China does make up for some of it.
Has H.A been reading the same mtraven I have? I never thought of traven as the type to appeal to H.A as some sort of wise analyst.
Nixon did end the Vietnam war, but he also continued it while angling for “peace with honor”. There isn’t some limited amount of blame to go around, we can blame both him and LBJ (just as we can make Obama take some responsibility for how he handled wars Bush started).
I presented a Hubert Humphrey brochure earlier. I think someone should present some comparable evidence for the post-Humphrey Democratic party to verify claims that they are more anti-American or whatever.
I don’t consider the changes in gold/silver prices to be that important since they make up such a small portion of expenditures.
December 6, 2010 at 1:34 pm
I do not know to what you are referring when you say that you “don’t consider the changes in gold/silver prices to be that important since they make up such a small portion of expenditures.” Gold or silver as industrial commodities are indeed of small significance. But that has never been their primary historical purpose. That was and is as economic benchmarks, and as internationally acknowledged instruments of exchange. Gold served this purpose until 1971 under Bretton Woods.
The benefit of gold is that it cannot be created ex nihilo by nations or their central banks, as (for example) Federal Reserve Notes can be. Its use as a medium of exchange disciplines politicians and prevents their indulging their worst instincts. It is true that some other similar commodity or ‘market basket’ of commodities might serve a similar purpose. The benefit of such a standard might be vitiated by the ease with which the makeup of the market basket might be arbitrarily changed. This is of course the problem with the CPI. It can be and has been rejiggered periodically, as have the Dow Jones 40 industrials, SAT scores, and other presumed benchmarks. By comparison, gold is “semper eadem.” That is why it has been valued since the memory of man runneth not to the contrary.
December 6, 2010 at 4:14 pm
I might add that the fact that gold cannot be created ex nihilo was not always acknowledged. It is a curious point that chrysopoietic alchemy was perennially patronized by rulers in the sixteenth, seventeenth, and eighteenth centuries. Perhaps its last royal adherents were the rulers of the small, often financially troubled German principalities. Some of these pursued the philosophers’ stone almost to the end of the eighteenth century.
Historians have perhaps made a mistake in assigning the alchemists to a developmental phase in chemistry (the conventional approach) or to treating their activities as a psychological phenomenon (as Jung did). Alchemy belongs at least as much to the history of economics as it does to that of chemistry or psychology.
Any Renaissance prince worth his salt had his alchemist and his astrologer. The Holy Roman Emperor Rudolph II, for example, had Sendivogius as his alchemist, and Kepler as his astrologer. They occupied positions in his court at Prague, I suggest, approximately equivalent to those of Ben Bernanke and Larry Summers, respectively, in Washington. Now there’s technocracy through the ages, in a nutshell!
December 8, 2010 at 8:53 pm
Nixon did indeed win an overwhelming victory. But he still had the Committee to Re-elect the President get up to all sorts of skullduggery.
I’m guessing H.A is a descriptivist rather than prescriptivist, following Horace’s Law of Custom. Knowing ancient Greek etymology would be useful if we were conversing with ancient Greeks, for whom an atom was by definition indivisible.
We were comparing incomes at different time periods, which we had to adjust for inflation. The CPI is based on “baskets” of goods that people actually buy, which I think makes it better for the purpose we are discussing. I am not here claiming that gold is a bad investment, a “barbarous relic” or serves no purpose. I just don’t comparing it’s value over time is very helpful for this purpose.
I agree that a lot more things were considered business expenses in the past. Alan Reynolds has often written about the Reagan-era tax-reform distorts our view of increasing income inequality (since so much previously existing inequality was disguised for tax purposes). This may be related to Nick Rowe’s observation that the really rich get their returns from labor rather than capital.
I tried looking up some info on estate taxes, this link reported that in a speech to the UAW he proposed limiting inheritances to $5 million (he was booed as a result).
Since we’ve been discussing old vs current Democrats, it appears that they haven’t actually done worse among low-income whites in recent decades.
December 9, 2010 at 1:55 pm
Whatever may be the top marginal bracket on personal income taxes, in the post-WWII era, federal revenues have rarely moved very far from their long-term average of slightly less than 19% of GDP. See: http://www.americanthinker.com/blog/2009/09/graph_of_the_day_for_september_9.html
Those who use static assumptions and argue that extending a low tax rate will “cost” X billions of dollars in revenue, with the implication that allowing it to revert to a higher rate would raise revenues by such an amount. They need to say why that will be the case this time, when it has never been in the past.
People with substantial capital will always find the lowest-tax vehicles for it. When personal tax rates were high, they incorporated their proprietorships and closely-held partnerships as C corporations, which were taxed at lower rates. When personal rates fell, they converted them into S corporations. If personal rates rise to a level where it is more favorable to reconvert to C corporations, they will do so. There are always municipal bonds for a completely tax-exempt return on capital. Whole life insurance policies were very much favored back in the 1950s when personal tax rates were high. The value that built in whole life policies was never taxable to anyone, either the holder or the beneficiary. Holders of whole life policies could borrow against them at nominal rates if they wished to access their effectively tax-free savings. If personal tax rates rise, look for whole life policies again to become more popular. Such methods of legal tax avoidance had more to do with the level of revenues during the days of 91% top bracket rates than did deductions, though of course those were more generous then than they are today.
Punitive tax rates do have an effect, though. It is generally to divert capital from its most efficient use, and to discourage the formation of more capital. We may look at the post-WWII Attlee ministry in Britain, when extremely high capital taxes were in effect. The British economy grew very little during this period; indeed, food rationing persisted for several years after the war. Germany, even though it had been defeated, and its physical plant devastated, performed much better under Ludwig Erhard’s “Wirtshaftswunder,” which basically amounted to getting government out of the way of the private sector.
I, not H.A., am following a descriptive rather than prescriptive definition of the word “technocrat.” While I did explain its etymological origins, I followed this by writing (vide supra), that:
“… it is not the case that those who are called technocrats have ‘actual skills.; It is sufficient that they be thought to have actual skills. The fact is that in most cases, they have not.”
It seems clear to me that McNamara and the rest of the “best and brightest” set were appointed to the offices they held because they were thought to have actual skills in the art of government, and that they could thereby surmount all sorts of problems that old-fashioned statesmen and soldiers had found impossible to solve. So, McNamara is a shining exemplar of a technocrat, in spite of his shining ineptitude. I do not mean to be partisan in this: Republicans have their exemplars as well. Donald Rumsfeld is the Republican counterpart of Robert McNamara,
H.A. and mtraven seem to think that technocrats can actually succeed in governing, as seventeenth-century German princelings thought that alchemists could actually transmute lead to gold. They are the prescriptivists, not I.
To define a technocrat as someone who has “actual skills” is like defining an alchemist as one who actually transmutes lead to gold. There are, to be very charitable, very few examples of either technocrats or alchemists that fit these prescriptive definitions.
Yet people like H.A. and mtraven apparently believe that successful technocracy is possible, just as some impecunious settecento margrave or Kürfürst hoped that the next “hermetic philosopher” to call on his court might actually fill his empty coffers with gold. Hope springs eternal!
December 11, 2010 at 4:02 am
Your form of optimized social organization seems to me to rely on technocrats, Michael (JP Morgan, the central bankers and diplomats at the heigh of the British Empire, whoever optimizes the efficent design and collection of minimally punitive taxes). I get the sense that you want to posture as more classically liberal than thou. But your own comprehensive stance seems to me to be fundamentally technocratic. You just want to see yourself as less technocratically inclined than your discussion partners.
December 11, 2010 at 7:59 pm
your own comprehensive stance seems to me to be fundamentally technocratic.
That’s because one of the definitions of technocrat you are using is “anyone in a position of power who does a good job”. Did the British East India Company do a good job administering the Empire in India? If so, it’s because they were technocrats! And if not, it’s because they weren’t. Heads you win, tails you win.
December 12, 2010 at 4:14 am
Flenser,
I disagree.
First, it’s possible for a non-technocrat to do a good job at something. For example, lottery statistics experts enter every major lottery, yet a nonexpert usually wins. On the other hand, who do you want to pick your loterry ticket for you? I want the lottery statistics expert.
The same principle applies to governance. Throughout history, by chance alone (I’m not claiming that’s the only factor) less expert and non-expert administrators have outperformed more expert administrators. That’s not a reason to select the lesser expert.
So, I don’t define technocrats by winning. I define technocrats as having the best before-hand set of leadership traits.
I’m pointing out that Michael also has a set of preferred leadership traits (and I’d add to that, that the traits are a technical mix of topic literacy and professional behavior) -so, from a comprehensive persepective, he’s a technocrat.
JP Morgan and the London central banker might well have failed managing large organizations in a system as complex as ours. That wouldn’t have kept them from being (Michael’s favorite) technocrats.
Flenser, do you get the distinction?
December 12, 2010 at 4:16 am
“I’m pointing out that Michael also has a set of preferred leadership traits (and I’d add to that, that the traits are a technical mix of topic literacy and professional behavior) -so, from a comprehensive persepective, he’s a technocrat.”
should read
“I’m pointing out that Michael’s FAVORITE LEADERS also HAVE a set of preferred leadership traits (and I’d add to that, that the traits are a technical mix of topic literacy and professional behavior) -so, from a comprehensive persepective, he FAVORS TECHNOCRATIC GOVERNANCE.”
December 14, 2010 at 12:21 pm
Throughout history, by chance alone (I’m not claiming that’s the only factor) less expert and non-expert administrators have outperformed more expert administrators. That’s not a reason to select the lesser expert.
Well, yes, it rather is. Or to be more precise, it’s a reason to question whether your “expert administrators” are really more expert than your “non-expert” ones.
If your theory of how things ought to work is contradicted by the empirical data, the rational thing to do is to adjust or even scrap your theory. Only the ideologue sticks doggedly with his theory and insists the data is wrong.
December 13, 2010 at 12:28 am
Michael’s remark about the relatively constant percent going to federal revenues gave me a failing of deja vu. I linked to a similar analysis in the previous jumbo-thread.
mtraven seems to define a technocrat as an official who is concerned with carrying out a policy rather than the merits of the policy itself. H.A seems to define it based on the actuall possession of relevant skills for the organizational task. I agree with H.A that in his sense you really do believe in adequately skilled technocrats, though you may think modern officials (or their principals) perceive their responsibilities too radically differently for them to be lumped together.
December 13, 2010 at 2:06 am
I’ve no idea how you manage to read that into anything I’ve said.
December 13, 2010 at 4:41 am
Agreed, I think we’re operating on the same definition of technocrat (me & Mtravern). Although I like how TGGP framed Michael here.
December 13, 2010 at 12:36 pm
Here’s a good article (a lot more sympathetic than I would be) on McNamara’s career as somehow paradigmatic of a certain generation of mangers. Via.
December 13, 2010 at 12:33 pm
H.A., I don’t see how TGGP “framed” me. He simply pointed out the similarity of my observation about marginal income tax rates vis-à vis federal revenues paralleled a similar analysis to which he had previously linked.
Here’s another Hayek quote:
“The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.”
Exactly so! The so-called social sciences are laughably far from being developed to such a level that applying them to a successful “technology of governance” is possible. Every time some person or group of people have imagined they can design some new order of society, it has failed lamentably. Marx conceived of his ideas as “scientific socialism”; Lenin described Bolshevism as “socialism plus electricity.” Look at how abjectly their technocratic dream ended!
If there is a technic of government at all, it has not developed very much since Machiavelli summarized it in “The Prince.” Poor old Nick (and think of who or what else that soubriquet came to suggest, because of that book) – the fact is that he was an ardent, small-r republican, who loved his native Florence and did not wish to see it fall under the kind of ruler he so aptly portrayed. I suppose we could say that the Sforzas and Borgias were successful practitioners in their day of technocracy – the pure art of government without constraint by, or even reference to, anything so antiquated and impractical as moral tradition.
December 15, 2010 at 7:40 pm
Moral tradition? Give me a break. The people who talk the most about tradition are usually the ones advocating practices that go back a few decades or perhaps a few centuries at best.
The moralities of the ancients are almost without exception distressing to even the most basic aspects of the modern sensibility.
To the degree that human beings are capable of any true progress, it’s by rejecting tradition and authority in favor of skepticism and empiricism – and those things do not favor any moral tradition of which I am aware.
December 16, 2010 at 2:54 pm
Melendwyr, what about Aristotle’s “Nichomachean Ethics” or “Politics” is “distressing to even the most basic aspects of the modern sensibility”? I find little in them with which to disagree, though perhaps I’m not very exemplary of “the modern sensibility.”
Of course, the pagan ancients did differ with us today in some particulars that are distressing. Had Western civilisation not become Christian, there would not now be the present disagreements over abortion. Unwanted children would simply be disposed of by abandoning them on remote hillsides. I doubt there would be the sort of controversy there is about “same-sex marriage.” The ancients would have laughed the idea of two adult men marrying to scorn. Anyone of Graeco-Roman sensibility would have known that the ideal eromenos was a boy aged perhaps from 12 to 16, and that one didn’t marry him, because he was to be discarded when he began to sprout a beard. Marriage existed to beget children, while sex with boys was for pleasure. See Virgil’s second Eclogue, or the twelfth volume of the Palatine Anthology. Like so much else of classical antiquity, this oddity, revived in the Renaissance by Politian and Michelangelo, is now preserved only in certain purlieus (heterodox, to be sure!) of the Church of Rome.
But these distressing aspects are, I think, relatively few, and constitute exceptions rather than the rule. Western moral traditions are, in the main, those of Jerusalem and Athens, as modified by the Christianisation of Europe that had largely taken place by the time of Charlemagne. Of course, that may be your “few centuries at best.”
December 13, 2010 at 1:17 am
I believe that the primary requisite of a good ruler is ethics, not technics. Governance is, above all, a moral exercise. So is economic activity. When J.P. Morgan was called to testify before the Pujo committee in 1912, its counsel Samuel Untermeyer asked him “Is not commercial credit based primarily upon money or property?” Morgan answered, “No, sir; the first thing is character.” Untermeyer interjected, “Before money or property?” Morgan responsed, “Before money or anything else. Money cannot buy it… Because a man I do not trust could not get money from me on all the bonds in Christendom.”
Curiously, the last time my bank had a “compliance” exam from the FDIC (this is not a safety-and-soundness exam), one of the things the regulators told us to do was to remove reference to the “character of the applicant” from our lending policy. They wanted lending to be based on more “objective” criteria such as credit scores. This is quite symptomatic of the problems our society faces under a government that is obsessed with technics and indifferent to morals. Heavens – we might be discriminating between good and bad! Can’t have ANY discrimination!
Hayek summarizes my feelings about H.A.’s advocacy of technocracy perhaps better than I can:
“To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which we in fact do not possess, is likely to make us do much harm.”
Those who pretend to be technocrats – again, for example, McNamara – Hayek termed “intellects whose desires have outstripped their understanding.”
I share Hayek’s scepticism of governance as technic. The wise and benign ruler should have a similar scepticism of his own capacities, for if he does not, he will surely “do much harm.”
December 15, 2010 at 3:38 am
Classic posturing. An accurate way to describe your position, which is I posture you probably would dislike aesthetically, is “Michael thinks government administrators should meet ethical and technical competence threshholds.”
My greedy definition of tecnical competence includes ethical competence as a subcomponent.
December 15, 2010 at 3:01 pm
Since when did you ever acknowledge that right and wrong had anything to do with the duties of a ruler? I never saw you say that before.
December 16, 2010 at 12:27 am
Michael,
We probably differ there. I think “right” and “wrong” are either zombie or capture algorithms when not tied narrowly to a system’s persistence optimization.
My definition of ethical competence fits within that framework.
December 16, 2010 at 1:17 pm
“zombie or capture algorithms when not tied narrowly to a system’s persistence optimization.”
Are you trying to position yourself as a successor to Professor Irwin Corey?
December 16, 2010 at 2:32 pm
Further to Hayek’s points, and to mtraven’s proposed menu of choices: 1) do nothing, 2) take an action motivated by political considerations or ideology; or 3) take an action motivated by object [sic] consideration of the situation and likely consequences –
Social sciences, and economics in particular, seem to be to be at a point in their development that medicine was in its development in the late eighteenth century. There is theoretical conflict today about the causes of economic malady just as there was in the eighteenth century about the causes of disease. And the received Keynesian orthodoxy is rather like that of the allopathic physician of the eighteenth century, full of dubious remedies tailored to fit dubious explanations of illnesses. The remedies are often harsh and in some cases do more to hurt the patient and shorten his life than the underlying illness; bleedings, purges, and clysters.
In medicine, a reaction set in to these drastic interventions during the nineteenth century. Oliver Wendell Holmes, Sr., the “autocrat of the breakfast table,” was representative of this school of thought when he remarked that if all of the materia medica of his day were to be sunk to the bottom of the sea, save for opium and quinine, it would be all the better for men and all the worse for the fishes. Such doctors were mindful of the old maxim, “primum est non nocere” – the first principle is to do no harm. They knew the best they could do was to palliate the patient’s pain, and hope that the body’s own recuperative powers – the “vis medicatrix naturæ” – would enable him eventually to return to health. This approach hearkened back to the sixteenth-century surgeon Ambose Paré’s properly humble statement: “I dress the wounds; God heals them.”
Is it “technocratic” for a ruler to recognize the severe limits of the social sciences, and of the remedies it proposes for various problems” What I’m suggesting is that sometimes, taking an object[ive] consideration of a situation and its likely consequences, as proposed in mtraven’s point no. 3 above, the best action to take is to do nothing, his point no. 1.
Let’s take as an example of this the current recession, and previous recessions or depressions. The Austrians, Hayek, Mises, and their predecessors posited that recessions were the consequence of an excessive expansion of credit, which is followed inevitably by the bubble’s burst. This explanation is valid for the current recession, and it also explains all of those in the past century.
The remedies of the Keynesians, like those of eighteenth-century allopaths, have proven either lacking in efficacy or dowrnight harmful. The Great Depression was not ended by the Keynesian remedies (some of them avant-la-lettre) of FDR’s New Deal; unemployment was still 18 or 19% in 1939, ten years after the crash of 1929, while FDR’s punitive taxation of business and “the rich” ended in a “strike of capital” (see Amity Shlaes’ “The Forgotten Man). Britain and Canada, which had no equivalent to the New Deal, recovered more quickly from the Depression than did the United States.
The “malaise” of the 1970s, for which the Nixon and Carter administrations’ wage/price controls, Keynesian ‘stimulus’, and expansionary monetary policy were advanced as remedies, led only to “stagflation.” The experiment ended with the Volcker/Reagan policies which effectively withdrew harmful economic intervention and got the government out of the way of the private sector’s creative capacity by cutting taxes. Once the quack treatments were ended, the patient recovered.
Would it not have been better, in such cases, to have avoided these debilitating “therapies” advanced by the technocrats of the day, in favor of the policy of first doing no harm? By the time the economy has been deliberately debauched by such massive doses of government-fuelled credit expansion as (for example) provided by Fannie and Freddie as a “remedy” for the supposed deficiencies of the private-sector housing industry, it is too late to do anything, other than to avoid doing further harm.
Let’s now look at mtraven’s points no. 1 and no. 2. It is not, of course, the same thing to take an action “motivated by political considerations” as it is to take one motivated by “ideology.” “Political considerations” refer either to the service of a vested interest, or to the sort of compromise summarized by the phrase, “you scratch my back, and I’ll scratch yours.” This is the very antithesis of ideology.
Nor is “ideology” always descriptive of the same sort of concepts. Marxism, for example, is an ideology. The Communist Party of the old Soviet Union used in fact to have official ideologists. That ideology was as completely elaborated in its day by such commentators or exegetes as, perhaps, Judaism is by the Talmud, or Catholicism by the authors collected in Migné’s Patrologia latina and Patrologia græca. If we contrast such full-blown systems to the cautious and sceptical approaches of (say) Burke to politics, or of Hayek to economics, we can hardly call the latter “ideological” in any sense. They’re just a few simple principles applied by the use of ordinary logic.
But, in any event, by the application of those principles, a person of reasonable intelligence, without special “technocratic” skills, might very well have governed better than any number of the best-and-brightest with their intricate and false theories and harmful “remedies” for suffering that was, if we may borrow the term, iatrogenic in the first place.
December 17, 2010 at 5:37 pm
Amity Shlaes is a right-wing hack taken seriously by nobody, as far as I know. I don’t generally bother arguing about macroeconomics since it seems like an area where ideology trumps all other considerations, and I don’t really have anything to say about it, but at least I know better than to take my cues from people like that.
Hayek is the Marx of the contemporary wingnut sphere. I’m guessing he wouldn’t relish that role, but Marx wasn’t too fond of Marxists either.
It is quite true that nobody really knows how to manage complex societies. However, inaction is a choice like any other. Hayekian ideology has led to a massive underinvestment in the kinds of capital that make society function, from education to bridges. A technocrat might not always know the right thing to do, but would presumably at least know that deferring maintenance on infrastructure just leads to more costs later, or loss of functionality.
this discussion continues on my own blog.
December 18, 2010 at 3:18 pm
Mtraven writes that “Hayekian ideology has led to a massive underinvestment in the kinds kinds of capital that make society function, from education to bridges.” I suspect Hayek would be surprised to learn that he had so much influence on the state.
As I have noted elsewhere in this thread, federal revenues have varied very little from the baseline of 19% of GDP over the past 65 years. This datum makes clear that either Hayek nor anyone else Mtraven demeans as a ‘wingnut’ has had any success in shrinking the state, much as they might have wished to do so.
Therefore, if we wish to know the reasons why infrastructure has been neglected, we must look elsewhere for someone or something to blame. I suggest we look at how that 19% of GDP has been parcelled out by our government.
To give one example of infrastructure, the interstate highway system was begun under the Eisenhower administration. Thus, it got its start before Lyndon Johnson’s massive redirection of federal funds into social programs such as his “Great Society,” “War on Poverty,” and Medicare. Subsequent years have seen more and more federal money flow into such entitlements and correspondingly less into infrastructure.
The reasons for this are easy to understand. They’re explained by Mtraven’s option no. 2, which is to take actions based on political considerations or ideology. The Democrats have for a long time succeeded by using the taxpayers’ money to buy votes. But whereas public works projects have been so used (as for example, FDR’s WPA), they are not nearly so effective as direct subsidy. Entitlements produce a more loyal class of voters than do ‘shovel-ready’ projects. That’s why there are relatively fewer of the latter.
This reasoning is evident in the Democrats’ strategy over the past two years. They spent far more effort and political capital on passing a vast new entitlement to ‘universal’ medical care than they did on reducing unemployment. The ‘stimulus’ bill contained relatively little in the way of the aforementioned ‘shovel-ready’ projects. Obamacare, if it proceeds as intended and the individual mandate is not thrown out as unconstitutional, will eventually create a locked-in dependent constituency, just as Social Security, Medicare, and the Great Society programs have done.
The country might stand a better chance of improving infrastructure if it could pare back entitlements and re-direct revenues into roads and bridges as it did in the ‘fifties, but there is little chance this will happen given the strength of the constituencies that have been created by entitlements.
As for Amity Shlaes, Mtraven’s ad-hominem attacks do not detract from the validity of the data she cites. Her book is a convenient summary, but the high unemployment rate in 1939 and the depression-within-a-depression created by FDR’s tax regime may be confirmed from other sources, including U.S. government records. It may give Mtraven some satisfaction to deride Ms. Shlaes as a ‘right-wing hack,’ but you’ll note he hasn’t refuted these points. That’s because he can’t. My late father, who lived through both events, used to say to me – “The New Deal did not pull the country out of the Dpression – World War II did.”
December 18, 2010 at 5:20 pm
“It is quite true that nobody really knows how to manage complex societies. However, inaction is a choice like any other. Hayekian ideology has led to a massive underinvestment in the kinds of capital that make society function, from education to bridges. A technocrat might not always know the right thing to do, but would presumably at least know that deferring maintenance on infrastructure just leads to more costs later, or loss of functionality.”
TGGP, this is the Mtravern that I admired, and the reason I was surprised by some of the lower quality posts earlier in this thread.
December 18, 2010 at 5:32 pm
Michael, I’m about as far from being an expert on this topic as you seem to be, but it seems intellectually disengenous to deal with the social cost of health care on an entitlement vs. zero cost continuum.
I think you have to grapple in good faith with the concept that a rationing government better polices high health care costs (where a lot of the high spending seems based on either deluded or wastefully hedonistic consumers) than relatively laissez faire regulation plus mandatory emergency room intake which seems to me to be how our health care system differs from a lot of otherwise similar countries.
December 18, 2010 at 10:43 pm
There are many things wrong with the delivery of medical services in this country, none of which will be made better by the intrusion of government. Indeed, the problems we face in this area are largely the result of previous government intrusions, particularly the introduction of price controls on medical services through the ‘back door’ via Medicare. If you would like me to explain this in more detail, I’d be happy to, but do not wish to take the time just now. Needless to say, price controls always create artificial scarcities, and medicine is no exception.
The politicians have been complaining about the high costs of medicine since office calls cost $3 and house calls cost $6. And look at how much costs have come down due to those politicians’ efforts!
December 14, 2010 at 10:43 pm
mtraven, this is the statement of yours I was referencing, though I didn’t actually reread as I was writing and may have misrepresented you:
“focusing on narrow pragmatic considerations and ignoring the broader moral or political context”
flenser, it sounded to me that the large number of non-experts plus chance means there will be times when a non-expert outperforms an expert. It didn’t sound like he was saying non-experts have a better track-record than experts, which would be a reason to select the lesser expert.
I agree that I attempted to “frame” mtraven (a frame which he disagreed with), it doesn’t seem like I did that to Michael here though I have done so in different threads.
Michael, have credit scores underperformed as an indicator?
December 15, 2010 at 3:39 am
Flenser, I don’t think you’re smart enough to comment in this blog space.
December 15, 2010 at 3:45 am
” I agree with H.A that in his sense you really do believe in adequately skilled technocrats, though you may think modern officials (or their principals) perceive their responsibilities too radically differently for them to be lumped together.”
Perhaps I misread, but I thought this part was about Michael, not MTravern, because I didn’t see MTravern as claiming not to be pro-technocrat. So I agreed with framing Michael as “really do believe in adequately skilled technocrats”.
December 15, 2010 at 2:59 pm
All I can say about credit scores is that Fannie’s and Freddie’s credit policy relied on them, and said nothing about the borrowers’ character. By their fruits shall ye know them.
We complied with the whippersnapper from FDIC and took character out of our written policy to get him off our back, but our lending officers still consider it. That is why we have never been unprofitable.
December 15, 2010 at 5:33 pm
Really? Perhaps if I write deliberately obscurantist pseudo-scientific gobbledygook in your fashion you’ll develop a higher opinion of me.
Until that time, why don’t you elaborate on why the technocrats of the Soviet Union did such a poorer job than the strikingly non-technocratic “gentleman adventurers” who established the British Empire.
December 15, 2010 at 5:57 pm
It didn’t sound like he was saying non-experts have a better track-record than experts
Regardless of whether he was saying it or not, “non-experts” do have a better track record than “experts”.
Let’s recap HA’s conception of technocrats (or “experts”) from a previous thread.
I don’t think there’s anyone “smarter” than my preferred choice of technocrats. I think the size of population and global resources one manages should be proportionate to one’s relative intelligence. So for global technocratic administrators we’re talking about least 1 in a hundred thousand (to create a pool of 60,000 large enough to draw from).
A great deal of ideological struggle has gone on over the last hundred years or so over exactly this question. Can an intelligent and enlightened group of “expert” technocrats really make a better world for everyone?
The general consensus we’ve arrived at is “No”, for reasons laid out by Hayek and others as well as from the real-world results of the technocratic state in action. The “experts” can never posses sufficient expertise to substitute for, let alone exceed, the “wisdom of the masses” in broad matters of economics and sociology.
That’s not to say that there are not specific limited areas where technical expertise is not valuable. I’d rather drive over a bridge designed by an expert engineer than one designed by a committee of random people chosen by lottery. If that were all HA is arguing for, they’d not be much argument here.
But it’s clear that he is trying to make the case for “technocratic” control of all aspects of life. And so far he’s doing a piss-poor job of it.
December 21, 2010 at 4:42 pm
Remember also that IQ scores don’t indicate anything about the sophistication of higher-order ‘executive’ thought.
In other words, they can show how clever someone is, but not whether that cleverness will be appropriately applied.
When dealing with massively complex, multi-variable systems like reality, wisdom is more important than intelligence.
December 16, 2010 at 1:06 am
My comment to “We are lucky to have Shirley Sherrod Among Us” (it’ll almost certainly be deleted from DeLong’s blog):
“Hopefuly Anonymous said…
Between Sherrod, Vilsack, Jealous, and Obama, the clearest villian I see here is Pollit, for drawing from the well of Palin with the idea that Sherrod is the best candidate to replace Vilsack because of this soap operatic narrative.
It’s quite possible that Sherrod, Vilsack, Jealous, and Obama all made good individual decisions here. Just because one is wrong or has a bad outcome doesn’t mean one used the best decision making process going into an event. To posture otherwise seems to me to be hedonism without virtue.
Reply December 15, 2010 at 11:04 PM”
December 18, 2010 at 4:03 am
Update: yup, comment deleted.
I feel like Prof. Delong’s epistemological deformations have large ripples in our society that eminate from him. It’s an unfortunate combination of frontrunner intellectual competence and possession by multiple demonic animal spirits deforming the quality of his social epistemological participation.
December 16, 2010 at 10:55 pm
H.A, I was indeed referring to Michael rather than mtraven there. I guess I overlooked that comment when responding to him.
I thought Mencius frequently referred to Aristotle’s discussion of natural slaves, though I could be confusing him with Plato. I endorse the Greek approach to unwanted children.
It’s funny that the slogan “first do no harm” has been around since “the father of medicine” and yet physicians regularly harmed their patients with negligible benefit to show for it.
Most Austrians I’ve read deny that the ABCT explains all business cycles. But I’d rather not get into a discussion of that theory here, such comments can go in this thread.
FDR’s tax policies arguably made his administration not very Keynesian. He inherited high taxes from Hoover, whose term was arguably more Keynesian than FDR’s first. It has been suggested that FDR was more influenced by the American “institutional” school of economics than Keynesianism.
flenser, we agree that there are limits to the capabilities of experts. But you need to provide some evidence that the masses have any wisdom. I know Galton from Galton we have the “wisdom of crowds”, but in a comittee much of that wisdom would be lost and a poll of experts would display similar wisdom. And H.A has just stated that he considers the administrators of the British empire to be technocrats.
Michael, I’ll have to see if I can find some studies done on how credit ratings predicted default.
December 17, 2010 at 1:33 pm
H.A has just stated that he considers the administrators of the British empire to be technocrats.
Which takes us back to my observation above that HA has one definition of technocrats as being anybody who delivers good results, and non-technocrats as being those who deliver bad results. This definition is not compatible with some of the others he uses – see the cite of him I have above.
December 18, 2010 at 4:00 am
Flenser,
I’m not gaining anything by discussing with you. You’re arguing the same general position as Michael, except poorly. I think you’re dragging down the quality of discussion here.
December 18, 2010 at 6:24 pm
Goodness me! Well, if this were your blog I suppose it might matter whether or not you think that I’m dragging down the quality of the discussion.
Meanwhile, I continue to note the flaws and inconsistencies in your position and you continue to earnestly wish I’d shut up.
December 19, 2010 at 12:28 am
Further to the issue of credit ratings, etc.
You DO understand the difference between a “compliance” exam and a “safety-and-soundness” exam, don’t you?
It was during a compliance exam that we were encouraged to remove reference to character from our written lending policy. This was NOT done in an effort to render our policy more rather than less stringent as to credit quality. No safety-and-soundness exam we’ve had ever saw a problem with the reference to character.
The compliance examiners wanted our policy to be less stringent rather than more so. That’s the point of the story.
December 17, 2010 at 8:59 am
TGGP, do you really endorse abandoning a baby outside to die? Do you have kids?
December 17, 2010 at 11:44 am
Surely I distinguished adequately between “the Keynesian remedies of the New Deal” (spending) and “FDR’s punitive taxation of business and ‘the rich’.” Taken together they may not led to as much Keynesian ‘stimulus’ as the spending would have done by itself, but the New Deal was certainly in line with Keynes’s ideas.
As for FDR’s tax policy, bear in mind that Keynes was hostile to saving, which he believed withdrew money from circulation and led to disequilibrium that resulted in depression. Thus, from his point of view, taxes that tended to discourage saving – taxes on ‘the rich’ whose incomes exceeded their current spending – were desirable. Keynes also is on record as favoring the “euthanasia of the rentier.” In other words, he disapproved generally of private fortunes and people who drew incomes from them. FDR’s overall policy was in line with this view.
Credit ratings didn’t predict default very well in the investment markets, did they? Look at how highly rated Fannie’s and Freddie’s securities, and other mortgage-backed securities, were – and how badly they actually performed! The failure of the rating agencies to assess credit risk properly was what was behind the implosion of AIG, which sold credit insurance at unrealistically low premiums. When the extent of default in the underlying securities became evident, AIG’s liabilities were clearly in excess of its ability to meet them. Ergo sunt lacrimae rerum!
The unrealistically high ratings given by the agencies to mortgage-backed securities were themselves the product of unrealistically high ratings given to the mortgages that backed them – mostly made by brokers whose interest it was to sell the mortgages they originated on the secondary market. At the originators’ level, there was lots of fraudulent inflation of collateral value and of the borrowers’ capacity. They knew they could get away with this because the buyers on the secondary market were purely mechanical in their underwriting; no one ever looked too deeply into the realities.
When I compare the delinquency rate at my bank, and the amount of OREO on its balance sheet, when I look at our Texas ratio, and compare these figures to those of other lenders, they are much lower than theirs. I believe that the main reason for this is that we get to know our customers much better than they know theirs. We do not just feed data into a computer that lets us know whether to make a loan, and if so, how to price it. That is what other lenders have done, and it’s why so many of them have failed or are now in severe distress.
We do take credit scores into account, but they are properly just adjuncts to a much more thorough underwriting process. That includes an honest appraisal of the collateral, an assessment of the borrower’s reputation in the community, and our own knowledge of how he handles his responsibilities – in short, his character. Finally, it’s far better, just before handing over the loan check to a customer, to look him in the eye and ask him, “now you ARE going to pay us back, aren’t you?” All this, taken together, results in much lower delinquency than does relying solely on mechanical underwriting.
December 20, 2010 at 12:51 am
J, yes I endorse the practice and no I don’t have kids. I’m not about to kill someone else’s baby as I imagine they’d be upset with me.
Michael, these heterodox economists claim the New Deal owed more to Institutionalist ideas than Keynesian ones, which were being implemented even before the General Theory.
mtraven, one can always claim poor outcomes are proof of underinvestment in education, but per pupil expenditures have been soaring while performance has remained flat. From what I recall (correctly after checking the paper), Republicans actually tend to spend more on roads while Dems prefer rails to gas-hogs. I suppose you can take comfort that the same source says Dems spend more on education and Reps waste more on health/hospitals. Regarding infrastructure, it seems some Canadians are jealous. Looking over time, it seems that state spending took a plunge in the 70s but recovered, while federal spending has had a more stable and mild rate of increase.
Hayek doesn’t seem to have the central position that Marx does. Ayn Rand would be a better analogue, since there really are Randians/Objectivists analogous to Marxists. Mises/Rothbard also play a somewhat similar role among a subset of libertarians. Hayek is sometimes thrown out as a name-check, with one among several. The ridiculous thing is how often Road to Serfdom is assumed to be an attack on social welfare spending when he specifically endorses it (healthcare in particular) in that book. It may be Hayek at his most pinko accomodationist!
H.A, I doubt many people would disagree that Delong has epistemological deformations which inhibit honest discourse, but I hadn’t considered the downstream implications. Roger Pielke Jr. ranks Delong alongside Joe Romm, below Tom Friedman & Paul Krugman but above Tim Lambert.
Michael, an even worse indictment of Amity Schlaes is that she has joined the Council on Foreign Relations. Their initiation ceremony doubtlessly involves bathing in baby blood. Regarding WW2 and the depression, Robert Higgs says it didn’t get us out.
H.A, I don’t know what you’re getting at with “entitlement vs. zero cost continuum”. Are you saying that the government should provide a negative subsidy (i.e tax) on healthcare or health insurance?
Michael, you may like Roderick Long’s How Government Solved the Healthcare Crisis.
December 22, 2010 at 12:58 am
TGGP,
I think I was alluding to the Hansonian critique that a huge portion of all medical expenditure is wasteful (or at least nontransparently hedonistic), both public and private. I recall recent discussions indicating that taking medical expenditure out of the private sector would make it easier to reduce the overall share it has on our economic activity.
I’d like to see Michael’s best (as opposed to laziest) critiques of that line of thinking as articulated by experts and best proponents (as opposed to articulated by my hazy recollection).
December 22, 2010 at 2:12 pm
Is medical care really a right or a public good?
Food, clothing, shelter, and transportation are all arguably greater necessities to life than medical care. We need to eat, dress, house, and move ourselves daily in order to survive, whereas we need medical care only occasionally. Yet it is not assumed that we have a right to eat equal food, dress equally, be housed equally, or transport ourselves equally. We accept without cavil the fact that some will eat at Lutèce and others at McDonalds; that some will dress in Savile Row suits and others in Chore Boy overalls; some will live in mansions, others in tenements; some will fly in private jets, and others will go via Greyhound. Why should it be assumed that all have a right to equal medical care, when it is accepted that inequality in the greater necessities of life is normal?
It is arguable that some aspects medicine fall into the category of public goods, such as sanitary water supplies and sewers, the extermination of malaria and yellow fever carriyng mosquitoes, etc. Vaccination traditionally falls into this category but we see much popular resistance to it even so.
However, treating people individually for maladies that do not pose serious epidemiological risk does not seem to me to be either a public good or a right. The consumption of medical services is and ought to be an individual decision based on economic capacity and personal preferences, much as the decision to have caviare and champagne vs. pretzels and beer, or a Bentley vs. a Hyundai is.
If we accept that medicine is a market commodity as are food, clothing, shelter, and transportation, it ought to be evident that markets will do a better job in allocating it than rationing. The current path of asserting a universal right to medical care of an equal standard is going to lead to the medical equivalent of 1960s Red China, in which everyone wore the same “Mao suit” of plain tunic and trousers. The parallel ought to be evident even to Hoperfully Anonymous.
The problems of our medical care system have, as I observed earlier, a great deal to do with the backdoor price controls imposed by Medicare. A physician who agrees to accept Medicare patients cannot, by law, bill any other patients at a different rate for his services than he bills Medicare. This has led to a system in which nominal billing rates are high, and both Medicare and privately-insured patients’ bills are paid by the respective third parties at various discounts set or negotiated between them and the physicians. Once a patient’s illness has been diagnosed, it falls into a numbered “diagnostic related group” (DRG) for which a formulary prescribes certain treatments in the order of preference, typically based on lowest cost first. The doctor has almost no discretion once diagnosis has been made. The medical profession is thus given incentive to make extensive diagnostic tests before recording a diagnosis – as if ‘defensive medicine’ based on fear of malpractice claims did not encourage this enough already. These procedures, undertaken as a perverse response to third-party payers’ cost-cutting measures, tend in fact to increase costs overall.
The typical privately insured patient’s bills are paid at about 60% of nominal rate, and the insurer takes 90 to 270 days to pay. Medicare’s discounts are greater. Reading the financial statements of a medical practice is a specialised art, because of these discounts and cash flows.
The real plight of the uninsured is not so much that they are uninsured as that they are the only ones who ever pay 100% of the billed rate, and they are typically required to pay it on the date of service. This is entirely the opposite of just about all other business, in which the cash customer gets the lowest price. However, as noted, this anomaly is brought about by existing government regulation.
The notion of mandatory emergency room treatment is another driver of costs. A young friend of mine did a post-doctoral fellowship in maxillofacial surgery at a nearby hospital. Because it serves a metropolitan area and has good emergency facilities, people injured in accidents and wounded by criminal violence are often brought there. My friend described to me once the case of an adolescent member of the criminal underclass who was brought to this hospital after having been shot in the face. His wounds were serious and potentially fatal, but the emergency staff saved his life. He then underwent several surgeries to rebuild his face, at a total cost of nearly $100,000, none of which was likely ever to be paid. And to what good end? To revive and restore to health a young man who already had a long rap sheet, whose intelligence was sufficiently low that he would not learn anything from his experience or amend his ways, who was most likely to end up dead in short order anyway, either at the hands of rival gangbangers or of the police, or in prison for a good long term. The way of compassion for all involved would have been to let him bleed out after giving a sufficient dose of morphine to assure painless oblivion. Insistence on equality of medical treatment in this case simply wasted a large sum of the taxpayers’ money to resuscitate someone who can never be anything but a liability to society. What utter folly!
In my view, people ought to pay their own doctor bills, or buy medical insurance in a truly competitive market, untrammelled by the present bureaucratic restraints. Medical costs would almost certainly fall. Even such baby steps towards returning personal responsibility for medical expenses to the patient as Health Savings Accounts have brought about this result. If it were done on a larger scale, imagine how much greater the reduction in costs would be.
December 22, 2010 at 4:05 pm
I don’t see a good faith effort here to overcome your incoherence as you zig from iq determinism and zag to notions of “personal responsibility”.
I do like your distinguishing between clear public goods health interventions like vaccination and sanitation, and wasteful redistributions like elements of universal emergency room care.
I think the waste of resources on anti-hansonian forms of healthcare by people that can afford it is still a social problem, and we should at least look critically at benefits of pigovian taxes on that type of “irrational” spending.
I’m introduced by you to an awesome poetic phrase “euthenasia of the rentiers” that you attribute to Keynes or keynesians. Though I think it mistakes an asymptotic subgoal for the primary goal (maximizing persistence odds), rentiers tend to be a good ball for populations to keep their eyes on.
December 23, 2010 at 1:30 pm
H.A., you are very ready, I notice, to accuse people of lacking good faith. When I have asked you in the past how I lacked it you have not seen fit to explain. I do not think such ad hominem attacks add anything to this discussion.
I mentioned nothing about “IQ determinism.” I did say the young criminal whose face was reconstructed at effectively no cost to himself was a person of low intelligence who was unlikely to mend his ways. This was not based on any IQ test result that I am aware of, but on the record of his prior conduct. Only a person who was both stupid and vicious would have behaved as he did. And as far as ‘personal responsibility’ is concerned, here was one individual who never took any for anything in his life, including the cost of saving it. I offered the example as an illustration of the folly of regarding equal access to medical treatment of the highest standard as some sort of right.
In general, I believe that apart from such obvious and longstanding public health measures as those I mentioned in the earlier post, people should pay their own doctor bills or insure themselves voluntarily. “Universal health care” either on the model of Obamacare with its individual mandates, or on that of Britain’s NHS, are not optimal means of allocating medical care, any more than systems of price control and rationing are when applied to any other commodity. I’ve tried to show, in my illustration of how Medicare has introduced these already to the American health-care industry, that they are in fact responsible for most of its aspects that leave patients aggrieved with it.
If markets work better than a command economy for the distribution of food, clothing, and shelter, the same is surely going to be true for medical care. Conversely, if you wish to argue that command and control will work better than markets for the delivery of medical care (and we haven’t really had a free market for medical care since the introduction of Medicare/Medicaid), you should be prepared to show how much better they will work for food, clothing, and shelter. Down that path, of course, lie the empty shelves of Soviet department stores, and the worse privations of Mao’s “Great Leap Forward.”
December 24, 2010 at 6:35 pm
“H.A., you are very ready, I notice, to accuse people of lacking good faith. When I have asked you in the past how I lacked it you have not seen fit to explain. I do not think such ad hominem attacks add anything to this discussion.”
Michael,
It’s a fair thing for you to police. I perceive myself to be on the side of angels in expressing what I think our deformations in our microsocial epistemological team and its subcomponents (consisting primarily of you, me, and TGGP). Hopefully the most accurate picture emerges from the three of us (and others) in critical interaction.
December 27, 2010 at 9:56 pm
“expressing what I think our deformations in our microsocial epistemological team”
should read
“expressing what I think ARE deformations in our microsocial epistemological team”.
December 20, 2010 at 1:16 pm
I’m familiar with Higgs’s point about WWII. I suppose it depends upon what is meant by getting out of the Depression. Certainly from the standpoint of reducing unemployment to single-digit levels, it worked. Of course it did so by conscripting a vast number of young men and sending them overseas to fight, going at least part of the way towards Senator Wheeler’s sarcastic description of FDR’s foreign policy as “plow(ing) every fourth American boy under.” Higgs is right that the real restoration of American prosperity came after WWII.
A useful chart showing the various components of federal expenditures may be found at:
en.wikipedia.org/wiki/File:U.S._Federal_Spending_-_FY_2007.png
The graph is for FY 2009, despite the date 2007 in the URL.
Note that Social Security makes up 20%, Medicare and Medicaid 19%, and “other mandatory” 17%, most of this consisting of means-tested entitlements. Defense consists of 23% and interest of 5%. “Other discretionary” at 12% is the category into which most infrastructure spending falls. When we consider that Medicare/Medicaid did not exist till the mid-‘sixties, and many other means-tested entitlements in the “other mandatory” category also are of that or more recent date, it’s easy to see why big infrastructure projects like the interstate highways of Eisenhower’s time aren’t being funded like they used to be. The money is being spent elsewhere, and there’s just not that much left for them any more.
December 22, 2010 at 1:16 am
I’ve heard somewhere that executive function is just fluid g.
Hanson’s reasoning might support such a view, though he hasn’t gone into the public choice of Medicare without private alternatives. Other than cutting medicine in half and municipalizing it, he hasn’t given that much though to how we might structure it. You should challenge him on what he thinks of taking it out of the private sector (by itself without further reforms).
On education, Sailer notes that we spend more per student than any country other than Luxembourg. Someone explain to me how we are underinvesting in education! I’ve put down Austrian Business Cycle Theory before, but this is good place for their notion of “malinvestment”.
December 22, 2010 at 4:29 am
It seems to me Prof. Hanson is saying here that Americans are culturally less deferential to “central bureacrats” than are citizens of other similar countries that have national, rationing, health care systems.
http://www.overcomingbias.com/2009/06/municipalize-medicine.html#comment-424969
Intuitively I think we could get away with rationing, but I grant its an empirical question.
December 28, 2010 at 4:28 pm
The question is, WHY should you want to “get away with rationing?” Just to satisfy your appetite for dirigisme? What is wrong with the market’s allocation? Before answering, consider whether what is wrong is nothing inherent in the operation of markets generally, but rather results from the distortions caused by already existing dirigisme over medical services, which is (as I have pointed out before) quite extensive.
December 29, 2010 at 4:08 am
I think the major distortions may be due to people overvaluing high medical expenditure. TGGP articulated below why I think we could get away with NHS-style bureacracy mediated rationing better than simple pigovian taxes.
December 29, 2010 at 12:26 pm
I have pointed out earlier how Medicare introduced price controls into the field of medicine through, as it were, the back door; and how this has resulted in the usual a shortages and misallocations associated with price controls. You have not addressed this point at all, preferring to suggest that somehow people overvalue high medical expenditure. What evidence is there for this? Have you compared the level of medical expenditures before Medicare with that after it came into full sway?
Of course people will overuse medical services when they perceive that someone else is paying for them. Why not return the responsibility for payment to the consumer? Then everyone may use medical services to the extent his own means and priorities permit. That solves the problem without the need for a vast bureaucracy of supposed experts.
Why should medical care, much less uniform access to it at a high standard, be considered a right? You haven’t answered that question. It is hardly a given. As I pointed out earlier, no one suggests everyone should have equal food, clothing, shelter, or transportation as if by right. These are daily necessities of life, which medical care is not. Why is medicine the government’s concern at all, beyond such public-health measures as public sanitation? All of these questions deserve answers before there is any justification of government involvement.
Government, in the final analysis, exists only for coercive purposes. One does not draw a sword or pistol without suitably grave reasons for employing them. It is just so with the coercive power of government. You have not made an adequate case for its use, much less demonstrated that the problems you purport to solve have not been caused by its previous misuse.
December 29, 2010 at 5:05 pm
“Why not return the responsibility for payment to the consumer? Then everyone may use medical services to the extent his own means and priorities permit.”
A simple solution aesthetic to you may not be the optimal solution for anything broader than conforming to your social aesthetics. What’s your endgame, Michael, beyond being a servant to some aesthetic algorithm?
December 29, 2010 at 7:13 pm
I’m not entirely sure how to evaluate the NHS hypothesis. I think a lot of it is status-quo bias and so if medicine has long been subsidized and widely available people will expect and demand it be so. If we had started out by penalizing rather than subsidizing medical expenditures people might expect that as well. Now personally I don’t give a damn if other people waste their own money on medicine, but pigovian taxation means we can reduce other taxes and have the profligate subsidize the frugal.
December 29, 2010 at 9:04 pm
My position is based on history, principle, and interest.
History shows that dirigisme usually brings about more suffering than markets do – as illustrated in the examples I have previously cited.
My concern about this is not aesthetic but ethical. Less suffering is better. That is principle.
Finally, my interest is as an owner of property. Naturally I wish government to assure the security of private property and to place the high value on property rights that Madison, Ames, and other Founders, along with the Anglo-American common law, do. Experience shows us that where property rights are well-secured, there is prosperity as well as freedom; where they are deprecated, there is poverty and oppression.
Hence, open markets and property rights are to be preferred insofar as we prefer prosperity and liberty. You seem to prefer dirigisme – may we infer that you also prefer privation and tyranny?
December 29, 2010 at 10:55 pm
“Now personally I don’t give a damn if other people waste their own money on medicine”
based on what, your own genetic disposition towards something like libertarianism? Otherwise this looks like hiding from epiphanies insteading of engaging the best social science critically to me.
December 29, 2010 at 11:02 pm
Michael,
Everything you value seems absurd to me in the context of information theoretic death? I consider that to be a bit of a privation. That’s why I asked about endgame. You seem to value to persistence of “ethics, property rights, and freedom” for the agent class of humans over maximizing persistence odds for the class of currently existing humans. That is (information theoretic) death cult madness from my perspective.
Hence I value optimized diversified experimentation and best practice implementation over perpetuating the basket of policies and philosophies implemented by Madison and company a couple hundred years ago, to the degree the former leads to persistence maximizing outcomes.
As for your specifics on Medicare, I don’t have time to answer it now, I encourage any other reader to jump in and do so.
December 30, 2010 at 11:42 am
I do not know what you mean by “information theoretic death.” Principles are timeless. They do not die. Their application, or the failure to apply them, and the results of either, are amply demonstrated by history. I do not find much evidence in history that the centrally planned state yields better results either in terms of liberty or of prosperity than do markets. Do you? It seems to me that you wish to continue proceeding down one of history’s proven blind alleys.
December 30, 2010 at 2:57 pm
I think information theoretic death has a wikipedia entry. Think Ted Williams and Ray Kurzweil.
I’m not an advocate for central planning, I’m for existential risk minimizing social coordination, grounded in the best empirical social science. But you must know this by now.
December 31, 2010 at 12:24 am
The Wikipedia entry on information-theoretic death refers to it as “the destruction of the human brain (or any cognitive structure capable of constituting a person) and the information within it to such an extent that recovery of the original person is theoretically impossible by any physical means.” In more common parlance, it is ‘brain death.’
What this has to do with political and economic principles by which the state and civil society do or ought to operate, you have not made clear.
Moreover, one should not speak of ‘perpetuating’ the policies and philosophies of Madison and other founders, but rather of restoring them. They were abandoned long ago, and this is in large part the reason for the problems we now face.
What FDR and his comrades imposed on this country was basically the economic components of fascism – in other words, state seizure through taxation of the lion’s share of business profits, and state seizure through regulation the greater part of business owners’ ability set business policy. Unlike classical socialism, this arrangement leaves nominal ownership in private hands, together with a minority share of profit and control and, normally, all of the liability in the event things should go badly. This last aspect is now being modified through bail-outs, ‘structured bankruptcies’ that favor politically influential constituencies (like the UAW in GM’s case) and stiff others (e.g., GM’s bondholders).
When we see what distortions and misallocations state intervention has caused in so many fields already, it seems foolish indeed to expand it yet further. That is like supposing that if a few minims of prussic acid are going to kill you, then a quart of it is just what you need to put you in the full bloom of health.
December 31, 2010 at 3:05 am
why do you care if your goal is for all of us to be dead in 100 years?
December 31, 2010 at 10:58 am
It isn’t my ‘goal’ that everyone (or all but a few who are infants today) will be dead in 100 years, it is the normal operation of nature. Unless someone discovers the elixir vitæ sometime within the next century, it will continue to be.
You remind me that Keynes observed that in the long run, we are all dead. But, as I think Schumpeter observed, Keynes’s emphasis on consumption and the short term reflected Keynes’s sexual inversion. A man who had children wouldn’t have thought quite as he did. Those who do naturally think of their families, and the legacy they will leave them. Preserving our liberty and property for our descendants is a worthy aim, and it should be facilitated rather than impeded by law and the state.
December 31, 2010 at 1:07 pm
“Preserving our liberty and property for our descendants is a worthy aim, and it should be facilitated rather than impeded by law and the state.”
Why? It’s your goal to not interfere with “the normal operation of nature” to prevent them from all being dead too.
This is where in my mind we part ways and you become a zombie, having failed my version of the Turing test.
It seems like noise trading to me your preference for property rights 10 generations from now and information theoretic death for intermediate generations. You could just as noisily prefer eating brains.
December 31, 2010 at 3:23 pm
Why? If I have to explain to you the advantages of liberty and prosperity over oppression and penury, you are more confused than even your convoluted prose gives evidence.
I believe liberty and prosperity to be obviously good things, and I wish each generation of my kinsmen to enjoy them in their turn. That each generation will die is inevitable; but as the dead stump of an old tree yet sends forth green shoots, so one generation may succeed another, each receiving and passing its inheritance in turn, augmented (we may hope) by the fruits of prudent enterprise.
What you believe is not entirely clear to me, but your vision of society does not seem to me to be one in which I should like to live, nor in which I should wish my descendants to live. The failure of technocracy to produce the benefits it claims seems evident to me from history, and none of your prolixity and neologism to date has shown otherwise.
If you want to continue this dialogue, you might persuade me of your points more effectively than you have so far by giving an example of a successful planned economy.
December 31, 2010 at 3:54 pm
“I believe liberty and prosperity to be obviously good things, and I wish each generation of my kinsmen to enjoy them in their turn. That each generation will die is inevitable”
How is this different in kind than a death cult aesthetic?
December 31, 2010 at 4:14 pm
If you will tell us what a ‘death cult aesthetic’ IS, perhaps one might be able to answer your question.
In the mean time, a preference for liberty and prosperity over tyranny and poverty does not seem to have anything to do with ‘death cults.’ Indeed, the cult of death seems to have more to do with tyranny. Consider as examples the Totenkopf SS, or Codreanu’s Iron Guard in Roumania, with its odd slogan, “long live death!”
The feature which distinguishes the state from all other human institutions is its possession of the power to coerce lawfully by the threat of death, and to kill those who resist coercion. As de Maistre observed, it rests ultimately on the hangman – though his role has been diminished by that of the armed policeman, a functionary little known in de Maistre’s time.
You appear to wish the expansion of the state, hence an expansion of its death-dealing. If anyone is the death cultist it is you. I wish to restrict the state to relatively few and essential functions.
Surely you do not propose that technocracy, or central planning, or rationing, or whatever it is that you believe in, can eliminate the normal life cycle that all natural organisms, including man, share? Its usual consequence has been only to shorten it.
December 31, 2010 at 5:33 pm
You lose me with “I want everyone to die, but not too quickly”.
December 31, 2010 at 6:29 pm
I never said “I want everyone to die…” That is simply absurd. Death is not something that my wants or anyone else’s can prevent.
They may be able to postpone it a little, and my feeling is that if a person has the wherewithal to do this and wants to, he should. If he doesn’t want to, then he shouldn’t. It should be his choice and not that of some technocrat who thinks he knows better.
Finally, if the person doesn’t have the wherewithal, tough bounce for him. The fable of the ant and the grasshopper comes to mind. The decision to accumulate resources for some future eventuality or to spend them on current consumption is also a choice, and the ability to acquire them is a matter of individual intelligence, diligence, and luck. Inequality in these matters is also a fact of life that is substantially beyond our control. If you think otherwise, then say why. You have not so far done.
December 26, 2010 at 6:14 am
posted to isteve:
“Steve,
I thought you might appreciate the bizarre situation in the Ivory Coast right now, where a Civil War is threatening to errupt over a University of Paris History PhD’s reluctance to cede power democratically to a University of Pennsylvannia Economics PhD.
Hopefully Anonymous
http://www.hopeanon.typepad.com“
December 26, 2010 at 2:14 pm
Quite a long time ago – it was shortly after the Sons of the American Revolution sold their Washington, D.C. Headquarters building to the Ivory Coast for their embassy – I recall reading a news item reporting that a member of the Ivory Coast parliament , having returned to his riding to campaign for the then-upcoming election, was slaughtered and eaten by his constituents.
Can you imagine the conversations amongst the assembled gourmands? “What do you think of Sen. Bongobongo?” “He’s a bit overdone for my taste. I like my politicians medium rare.”
Life imitates art – in this case, Evelyn Waugh’s “Black Mischief.”
December 26, 2010 at 9:01 pm
Hopefully Anonymous, you have a fan.
Mark Kleiman made a similar point about west europeans being more deferential to the more educated professional civil service and I challenged him on his particular point.
I have always been annoyed by the phrase “side of angels”. But I’ve probably complained about that here before.
I have family in Pennsylvania, so I am of course rooting for the econ phd.
December 27, 2010 at 11:58 am
I prefer constructive critics to fans (at least of my attempts to model reality and my persistence strategies), but this guy doesn’t seem super-useful as a critic.
“I have always been annoyed by the phrase “side of angels” -interesting, I suppose I should be too, but I find it super-useful as a way to transcend quantitative and other epistemological weight to get to what my intuitions tell me should be prime concerns.
For example, the meat of debates between Mankiw and DeLong are over my head, but I often intuit which one is on the “side of angels” -at which point, that turn of phrase seems to me to be more useful than alternatives I recall.
December 27, 2010 at 2:13 pm
I really like the guy from Penn’s thumbnail cv. It seems to me a norm of macroeconomist prime ministers (Austria, India) may be developing.
I wonder how governors of large population regions and technocratic credentials distribute.
In a healthy world I think it would be something like 20% macroeconomics PhDs, 30% MPA’s, 15% MBA’s, 15% other quantitative social science Ph.D.’s and professional similarly relevant professional and masters degrees, 20% autodidacts with high quantitative public administration literacy (many still highly educated in unrelated or weakly related fields).
December 27, 2010 at 9:23 pm
From what I dimly recall, Bloomberg and Lee Kuan Yew are your favorite administrators. The “outside view” would recommend looking at a larger number of such folks in order to estimate what the profile of a good administrator should look like.
December 27, 2010 at 9:53 pm
2 of my favorite.
I think Dr. Chu is my favorite potential future POTUS. Though I’d like to see him do a term as SecDef and then California governor first.
December 28, 2010 at 8:32 pm
Michael, my guess is for H.A’s view is something along the lines of claiming that popular demand for “insulation” and existing policies to that effect are so entrenched that it may be futile to try fighting them. Choking off the supply of expensive medical innovations while maintaining the cover story that it’s “the best we can do” a la the NHS may deliver the best results at lowest cost. If one uses Hanson’s signalling story, then even without state interference we may consume an inefficiently large amount of health care (the standard economic prescription in that case would be a tax rather than outright rationing).
H.A, I thought Gates was SecDef. And it occurs to me we don’t have many prominent east asian elected officials. This guy apparently rose from state college president to senator thanks to prominent hippie-punching (metaphorically, of course).
December 28, 2010 at 9:15 pm
“H.A, I thought Gates was SecDef.”
TGGP, fuck your snark.
December 28, 2010 at 9:21 pm
“(the standard economic prescription in that case would be a tax rather than outright rationing).”
I feel like rationing would be politically more palatable than high taxes on things like end of life care. Which is probably why organs for transplant are rationed instead of taxed?
I’d like to see more good faith discussion, though.
December 28, 2010 at 11:15 pm
Perhaps H.A. is one of those who believe in the slogan ‘form each according to his ability to each according to his need,’ and fancies himself just the fellow to determine what the abilities and needs of lesser folk than himself are. That’s the usual allure of dirigisme of that particular variety amongst those who consider themselves the intelligentsia.And it will continue to come a-cropper just as it always has, not without a lot of the usual needless suffering in the process.
December 29, 2010 at 4:05 am
Michael,
No, I favor diversified experimentation and empirical resolution of how to achieve regulatory optimization.
You seem to me to want to be the guy in the social epistemological team who calls for less regulation.
Let’s do something more than spin in circles.
December 29, 2010 at 9:16 am
I do not want “less regulation” – what I want to know is why you think any government interference with this or any other markets, beyond enforcement of contracts and prevention of fraud, is justified.
What induces you to think you, or any technocrat, can do better in allocating goods and services than a market can? This vain hope seems to spring eternal, despite the massive evidence that exists to show otherwise – again, the empty shelves of Soviet department stores, the famine and oppression of Maoist China – even the comparative privation of victorious Britain following WWII, under the Attlee/Cripps régime of high taxes, nationalization, and rationing, which may usefully be contrasted with the “Wirtschaftswunder” achieved contemporaneously in defeated Germany by Ludwig Erhard’s simple abandonment of dirigisme for open markets.
I agree with Fisher Ames that “the chief duty and care of all governments is to protect the rights of property and the tranquillity of society.” Rationing, price controls, and other such regulatory interference in the function of the marketplace go well beyond this chief duty. They are almost always counterproductive as well as tyrannical, the few exceptions perhaps being in circumstances of dire emergency calling for the imposition martial law.
Nor is “experimentation” called for under a proper and just government. The lives of people are not to be toyed with as if they are laboratory specimens.
December 29, 2010 at 5:08 pm
So Michael, you’re on a march to information theoretic death championing a certain government aesthetic? It seems alien to me.
December 29, 2010 at 8:52 pm
Again, why do you think government interference is justified? What induces you to think it can bring about a better result than markets? Lay off the double talk and give us answers.
December 30, 2010 at 4:31 am
Another technocrat, this one for Liberia:
http://www.newsobserver.com/2010/12/29/886578/nccu-professor-bids-to-lead-liberia.html
December 31, 2010 at 5:25 am
0.1% of the planet follows Kim Kardashian on twitter, which I think is a fairly impressive accomplishment.
January 1, 2011 at 7:40 am
For diversion, I often search youtube for videos with the word “professor” in them, ranked by page views for the past 24 hours.
This is one of the weirdest I’ve seen, a rap performance where Professor Michael Eric Dyson wraps it up at the 2min14sec mark (I think this was in a sociology class he taught at Georgetown University).
I think a sociology professor would have to have strong quantitative chops to be competent. I haven’t noticed much evidence of Prof. Dyson’s quantitative chops -but from wikipedia I know he graduated with a PhD in religion from princeton some years back. He’s published a lot of books, but does he have any heavily cited, quantitatively rigorous publications in respected social science academic journals?
January 1, 2011 at 8:05 am
I’m surprised. I started by investigating Prof. Dyson’s georgetown page. No journal publications listed. No quant courses taught. I hypothesized that he would be abberant for Georgetown’s Sociology dept. I would’ve guessed almost every other georgetown sociology professor would have journal publications listed and that at least 1/3 would have a quant methods course syllabi listed.
But my results:
5/12 faculty members have journal publications in their georgetown bio page
2/12 faculty members have quant courses in their syllabi.
My conclusion: Prof. Dyson is not abberantly unqualified on technical competence grounds to be on Georgetown’s Sociology faculty.
I wonder if the Georgetown sociology faculty itself is aberrantly deficient in technical competence compared to the sociology faculties of peer universities?
January 1, 2011 at 8:56 am
Pretty cool microsociology syllabus.
Like a lot of microsoc, lacks a quant methods angle.
http://www.stanford.edu/~dmcfarla/courses/trad-microsoc-syl.htm
January 1, 2011 at 2:24 pm
Fascinating article on several levels. I stopped after the introductory paragraphs. I didn’t know Baylor University, a respectable research university that in my mind is worse than rice but better than smu, required 100% of its faculty to be evangelical christians.
I think that can still be a strong enough talent pool for a couple competitive research universities, although purging a faculty member that loses their faith has a medieval feel to it.
January 1, 2011 at 2:24 pm
http://www.dallasnews.com/sharedcontent/dws/news/texassouthwest/stories/DN-starr_26ent.ART.State.Edition1.148bb58.html
(the article)
January 2, 2011 at 6:08 pm
I don’t recall Schumpeter making that remark about Keynes, but I only read “Capitalism, Socialism and Democracy”. Sounds more like Hans Herman Hoppe.
H.A, what do differing goals have to do with Turing tests?
Michael keeps arguing about the role of the state, which is not your primary interest, while you go on about persistence maximization, which isn’t his. What you actually disagree on would be particular state actions which increase the probability you expect to persist but infringe on what Michael would consider liberty. No need for a long “Why I am not a libertarian” essay, just a concrete example of where you differ.
Michael, “long live death!” is a wicked slogan (which may have originated with Spanish Falangists). Reminds me of Hellhammer’s “Only death is real”. By “death cult” he is presumably referring to something like the parable of the dragon-tyrant. The totenkopf however seems to date back to 18th century Prussia without cultish overtones. H.A is a singularitarian (or at least has inclinations that way) and rejects the action/omission distinction. To favor anything other than maximizing probabilities of persisting forever is to him equivalent to wanting everyone to die. The distinction plays a greater role in my thought and so I would categorize my position as one of indifference. He doesn’t appear to place much weight on the existence of others (except in so far as they may be necessary to ensure his persistence), nor has he demonstrated much concern with inequality. He views others as means rather than ends.
There are some sociologists with quantitative competence, but I always thought of it (to a lesser extent than cultural anthropology) as a haven for people who aren’t into quant but don’t want to go the humanities/law route.
I’ve often heard that SCOTUS is Catholic-heavy because Republicans can’t rely on mainline Protestants and evangelicals don’t have enough qualified members. So it’s surprising that Bush Sr. passed up as Starr as “too liberal” and picked…Souter.
Harvard has been secular for so long one thinks of it as always having been that way. I should look up when it changed. I was surprised to read in the article that the University of Chicago was once Baptist. The post to read is No fear of Patrick Henry College – the Borg shall assimilate.
The linked article says a charter change “blocked a fundamentalist takeover of the school”. Wouldn’t it be more accurate to say it took over the school from the fundamentalists who created it?
January 2, 2011 at 10:46 pm
In attributing the slogan ‘long live death’ to Codreanu’s Iron Guard I am following the indication of the late Prof. Ioan Coulianu, who should have known. Perhaps it was also used by the Falangists. No doubt the Roumanians, being (according to Coulianu) great practitioners of protochronism (Ceausescu devoted large resources to “protochronism studies”), would claim to have invented it first.
I believe Hoppe said in as many words that Keynes’s short term focus was ‘homosexual economics.’ Schumpeter said something to the effect that Keynes’s dislike for saving was characteristic of a man who had no children – of course, he had to be more delicate in his day than Hoppe needs to be today. Give me time and I’ll find the exact words of Schumpeter on this point.
The Duke of Cambridge’s Own, the 17th Lancers (formed from the 17th Light Dragoons) have used since 1822 the crest of death’s head above an escrol bearing the words “or glory,” death or glory being a conventional military exhortation. The uniforms, banners, etc., according to the regimental history are supposed to have been copied from Polish, not Prussian, sources. The British are not protochronists, at least in this case. Beyond that I know not.
Does H.A. really harbor illusions of discovering the elixir vitæ? This ‘singularitarian’ business appears to be quite remote from any actual possibility. Why anyone should wish to engage in rationing for other than egalitarian reasons in this day and age is a puzzle. In the remote past sovereigns enacted sumptuary laws, to limit the possession of certain personal adornments to certain classes, so as to prevent people from pretending to status they didn’t possess, but I’m reasonably certain this isn’t H.A’s motivation. In modern societies there are two ways to allocate scarce goods: the auction and the queue. Those who favor liberty favor the auction; those who favor quality, favor the queue. H.A. is plainly against the auction and in favor of the queue. The inference of his reason for preferring it is inescapable.
January 2, 2011 at 10:49 pm
N.B. – Third from last sentence should read “..those who favor equality, favor the queue.”
January 9, 2011 at 11:10 pm
I intended to respond to H.A on why I don’t care what other people waste their money on, but forgot to. There are zillions of things I could possibly care about and I don’t need reasons not to, it is simply the default. I need reasons to give a damn, and most of the time I don’t.
“Protochronism” is a cool sounding word.
I don’t think H.A expects to discover anything himself, he just views all possibilities other than eternal life to be absolutely worthless. It puts me in the mind of Pascal’s Wager. His willingness to embrace queues may reflect a second-best response to political realities and a belief that medical services are mostly useless.
Brad Delong wrote a pretty good econ 101 explanation of why prices are better for rationing than queues, but I’m too lazy to look it up.
January 10, 2011 at 9:59 pm
Over 100,000 likes
http://online.wsj.com/article/SB10001424052748704111504576059713528698754.html
From a statistical, empirical perspective this article seems silly (1 billion straight A students? A Yale law professor describing herself as the typical Chinese mother?)
But that the article has 100,00 likes (I don’t think its 100,000 frenemies) indicates Prof. Chau’s success in capturing a subpopulation’s (Chinese American mothers?) self-identity with a well-written, well-timed, well-placed narrative.
Law professors seem to me to fail to be what we need them to be as empirically-grounded social scientists, or creators of a public good as educators of a body of professionals. But as individual entrepreuneurs of population self-identities, they seem deviantly successful. It’s strange to me because that’s not explicitly what they study. I think the microsocial goffman-type theory embedded in critical legal studies may be one of the indirect ways they study being micro-macro bridge entrepreneurs. But I intuit the self-selection of the people that choose law is the major factor.
January 10, 2011 at 11:07 pm
Sailer once noted that celebrity culture is more obsessed with babies than breakups. I think we’re seeing some of that. I see ads all the time referencing “moms” or “a mom”, so that’s a very salient identity.
I’m not aware of Chua having any background in CLS. I’m going to take a guess and say she didn’t actually study it.
Law professors aren’t social scientists and usually don’t claim to be. They are probably closer to the humanities (if we include history there rather than the social sciences) and philosophy. It seems to me they have long been among the elite. Tocqueville called lawyers the closest thing to an American aristocracy. Ironically, Edmund Burke complained that the French parliament was too full of provincial lawyers to have a properly aristocratic character.
Chua’s “World on Fire” is a favorite of mine.
What do you think of the recent hubbub on the overproduction of law grads?
January 11, 2011 at 12:36 am
TGGP,
Wow you beat me more or less to this:
http://www.law.yale.edu/faculty/chuacurriculumvitae.htm
Chau actually has surprisingly (to me) strong quantitative credentials.
Her professional work is a strange zig zag to this latest theatrically innumerate incarnation, which doesn’t do much to highlight her quantitative competence.
I think I’ve posted elsewhere (delong? yglesias?) on the general overproduction of a lot of different majors and degree programs. Law grads are high visibility but I’m not sure that as a percentage they’re what we should be paying that much attention too. I suspect most of the waste comes from non-elite private college bachelor and partial bachelor degrees. But you and I run in a more lawyerly milleiu so that’s probably more salient to us than the crush of people with 3/4 of a English bachelors degree.
Also, I think I pretty clearly said that I think law professors SHOULD be social scientists, not that they ARE social scientists.
January 11, 2011 at 1:03 am
“Law professors seem to me to fail to be what we need them to be as empirically-grounded social scientists”
That could be read as either “what, as social-scientists, we need” or “what we need: social-scientists”.
Since you have an interest in the qualitative side of social science, here’s Fabio Rojas saying sociology differs from economics in incorporating that kind of research:
January 11, 2011 at 2:42 am
Rojas: First, some people just seem to have a problem with calling something a science if it’s about people or “fuzzy” things like identity or emotions. It has to be “hard” like atoms.
HA: I agree w/ Rojas.
Rojas: Economics gets a pass from some people because money is “real.”
HA: Bullshit. It’s because Econ is more mathematical and because it shares the same cultural enemies as the hard sciences and engineering, more or less.
Rojas: Second, sociology is low tech. We lag behind in the use of mathematics and computing.
HA: I agree.
Rojas: Third, we tell people we aren’t a science. The “party line” is that we’re a sort of humanities and science hybrid, even if almost all research faculty operate in a normal science mode.
HA: Believable.
Rojas: Fourth, we study people who are often marginal, which doesn’t seem scientific.
HA: Self-flattering bullshit.
Rojas: Fifth, our undergraduate teaching is oriented towards topics and not theory and data. Lot’s of courses on race or crime, few that lay out sociology as a set of models.
HA: True, and that’s a sin of undergraduate teaching in sociology. I’m guessing that sociology has been getting a lot of its elective students from undergraduates that need to fulfill diversity requirements, or looking for identity havens to fill electives while completing more practical majors.
January 15, 2011 at 8:54 pm
Apparently the hits may be due more to WSJ editing than Chua’s provocatory powers:
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/01/13/apop011311.DTL
January 16, 2011 at 12:30 am
Meh.
I recommend keeping an eyebrow arched with regard to spin.
January 16, 2011 at 7:29 am
Cool concept and set of panel participants:
http://www.nicholas.duke.edu/econmodeling/speakers.html
(modeling of economic impact from federal climate legislation)
happened back in 2007.
July 7, 2012 at 7:07 pm
I wish we had another FDR, Harry Truman,JFK, or LBJ in the White House. We have not had a true Democrat as president since these men. Clinton was nothing but an Eisenhower Republican;Hillary was a former Goldwater Republican, and Obama is a Rockefeller Republican, a fiscal conservative and social liberal. I cannot vote for Romney since he is nothing but a rich man’s Hoover Republican. We are heading for a severe degression. I wish the Democrats would nominate a Progressive Democrat. Progressives have no one to vote for. God help us.
Charles E. Miller, Jr.
Former Officer, Bank of America
January 18, 2015 at 2:06 pm
We are nearing another presidential election in 2016. I thank God that President Obama cannot seek a third term. I would like to see Bernie Sanders, Senator from Vermont, to make an attempt for the office of president. He need to run as a Progressive Democrat. An independent just can’t make it!
January 18, 2015 at 2:47 pm
I think Sanders couldn’t get elected either way, but a member of the two party oligopoly certainly has a better chance than an independent.