De interessante stukken zijn in 't vet gezet.
Het onderscheid tussen dogmatische en pragmatische libertariërs lijkt me bijzonder zinvol.
Scott Sumner wrote:4. Epistemic closure
When I was on vacation I was wondering if the case against Goldman Sachs was really as weak as it seemed at first glance. I figured that right-wingers would rally to GS’s defense, but wondered what the left would think of the case. Here is Paul Krugman:
If you want to argue that Wall Street is corrupt, fine; but don’t use emails showing Goldman employees crowing over their success in shorting housing — which is ugly but doesn’t amount to wrongdoing — to make your point.
Here I’ll make the slightly disreputable argument that “if even the other side agrees with me, I must be right.”
I made a nice return on ‘junk bond’ investments in the 1990s, so count me as someone not shocked by the colorful adjectives in GS emails. Does this mean GS did not violate the law? Here is where I would fall back on my post-modernism. There is no yes or no answer to that question. If one wants to get highly technical, I suppose that every single big bank in America is violating the law on an almost daily basis. How could it be otherwise? Our business law system is unimaginably complex, the legal equivalent of the distance to Alpha Centauri. (“Show me the man and I’ll find you the crime.”) The real question is: If the SEC knew these facts about GS, but the 2007-08 financial crisis had never occurred, would GS have been prosecuted? Or to put it another way; is the prosecution political?
Brilliant intellectuals who dabble in politics will often find themselves disappointed by the reasoning skills of many of their supporters. In the Krugman post he scolds other liberals for making a series of foolish arguments. This must feel awkward, as the liberal blogosphere has recently revived the meme of conservative stupidity (a theme that goes back at least to Mill.) There are actually two separate issues here; stupid elites and stupid rank and file. For instance, this post by Yglesias argues that the GOP rank and file are ignorant on health care reform, and asks whether right-wing pundits will point this out. In fact, lots of right-wing pundits have criticized the phony Republican arguments about taking Medicare away from grandma and also noted the hypocrisy of Mitt Romney during this debate. In an earlier post I complained about the anti-intellectual attitude among many Republicans during the health care debate.
But calling rank and file voters stupid is actually pretty silly. Of course average people are not experts. Of course average people are prone to hold silly conspiratorial views. Lots of Republicans believe conspiratorial theories about Obama, and lots of Democrats believe conspiratorial theories about Bush and 9/11, or oil companies and gasoline prices. Indeed even among Congressman it is easy to find silly statements by members of both parties. Has Guam tipped over yet?
In this post Krugman makes a different argument, that the intellectual elite of the right has a closed mind on macroeconomic issues. In my view there really is a difference between the right and left wing elites, but it is more complicated than Krugman and others realize. Off the top of my head I’d guess that 80% of intellectuals are left-leaning liberals, 10% are conservatives, 5% are dogmatic libertarians and 5% are pragmatic libertarians. Because I am in the latter group, I naturally feel we are the smartest. If forced to defend that proposition I’d point to the highly disproportionate number of economics Nobel Prizes won by pragmatic libertarians (defined as those who support small government policies for broadly consequentionalist reasons.)
On the other hand people like Bartlett and Yglesias are probably on to something when they point to the differences between liberal and conservative intellectuals. If the liberal talent pool is 8 times bigger, and if roughly the same number of liberal and conservative positions must be filled as Congressional staffers and think tank members, then maybe the average conservative intellectual really is less bright.
This raises the more fundamental question of why intellectuals tend to lean to the left. I have argued that as one becomes more educated, one becomes more utilitarian. You see “the other” in a more sympathetic way if you’ve travelled a lot, or (what amounts to the same thing) read a lot of high-brow novels. Intellectuals tend to care about the downtrodden, and also see lots of “unmet needs” that it would, at first glance, seem to call for more government programs.
Then why are so many Nobel Prize winners to the right of center? Not because they aren’t utilitarians, but rather because they take a second glance at the effects of government programs. If you want to talk about epistemic closure, consider how few left-of-center intellectuals realize that the standard model of economics, even as presented in textbooks written by economists who are left of center, gives very little support for the great mass of government programs that are cherished by liberals. Here are the key market failures:
1. Inequality—The solution is redistributive taxes.
2. Externalities (and second-hand smoke is not an externality)—The solution is Pigou taxes.
3. Monopoly—The solution is antitrust laws. And with free entry the only plausible problem is price-fixing cartels. Even anti-merger laws are of dubious value.
4. Public goods—only a few goods such as lighthouses and medical research meet the criteria, and even lighthouses are a dubious example.
But that’s about it. The SEC? The FDA? OSHA? I have no idea how these or 90% of other government activities can be justified.
Does imperfect information call for regulation? I doubt it, but if so then provide the information. The free-rider problem with medical insurance? OK, but Singapore has shown that this problem can be solved with the government spending 1% to 2% of GDP (plus forced saving), not the 8% contemplated by Obama. There really is no justification for big government in the sort of model provided in economic textbooks written by liberals. Most left-leaning intellectuals don’t realize this; indeed they find my views to be slightly nutty. That’s epistemic closure.
Here’s a quotation from Krugman:
It’s been painfully obvious since the crisis broke that people at Minnesota, or even many people at Chicago, have no idea what New Keynesian economics is all about. I don’t mean they disagree, or think it’s garbage, they literally have no idea what the concepts are.
I think Krugman exaggerates this problem (to some extent they simply don’t buy the Keynesian model), but I do agree that the fresh water economists have grown increasingly ignorant of the importance of demand shocks. But at a broader level exactly the opposite problem occurs. Most right wing liberals (including me) know far more about left-leaning liberals, than vice versa. Why? Partly for the reason that Canadians know more about Americans than Americans know about Canadians. There are far fewer of us. But also because right wing economics is much more counterintuitive that left wing economics. Thus the left tends to assume that free market supporters like me are either motivated by greed, or stupidity, or by a sort of religious fervor, aka “market fundamentalism.”
PS: I wasn’t able to keep up with things while on vacation. Marginal Revolution was all I had time to read. I had planned a post defending utilitarianism after reading Tyler Cowen’s defense of Bryan Caplan. But perhaps it’s time to move on. So I’ll just leave you with the slightly enigmatic title of my planned defense of utilitarianism; if you wish you can try to work out my convoluted argument:
http://www.themoneyillusion.com/?p=4915
