The Larry White Privatization Plan

I would enthusiastically endorse the Larry White plan if it was possible for the state to credibly commit to refusing benefits to people who fail to invest.

Here's Larry's idea:

Here's how it works: we give Ms. Smith, a worker, the right to opt out of paying $100 in social security payroll taxes provided she also opts out of (say) $103 in future Social Security benefits. She can now save her $100 privately. She will consider herself better off opting out if she thinks she can earn a return of better than $103 for each $100 saved. Voila, who could object?

Maybe we can throw in a little benign paternalism, and have the payroll taxes automatically roll into some kind of investment account by default.

Anyway, nice idea.

The Most Opposite Thing Ever

This absolutely arbitrary and wonderful Observer article about indie guys who also happen to like football contains some gems. My favorite:

And what about the girls? Indie-rock girlfriends, who thought that when they started dating music boys they were leaving football Sunday behind forever, are pissed off to discover that they thought they were getting Joe Strummer but actually got Joe Buck. In fact, at the league-championship party in Bushwick, the host’s girlfriend took off during the game to do the most opposite thing ever—make a mix tape on the occasion of her friend’s little sister’s first period.

The most opposite thing ever!

Obligatory The Arcade Fire Post

Yes, Missy, I was there. And though I hate to perpetuate the conventional wisdom, it really was pretty great.

I still wish DC people weren't so lame, and would dance or at least bop more, but I guess that can't be helped.

I loudly booed that Owen wanker from Final Fantasy when he said that we should all love taxes, because “it makes us into a community” or some such frostback nonsense. I brayed my disapproval apparently alone, although the guys standing next to me gave me a smile and an approving nod meant to communicate solidarity, but which communicated only cowardice. Note to Republican hill staffers who like good music: you paid to hear good music, not a CBC editorial. Go ahead, let 'em know you hate it. The hipsters are more afraid of you than you are of them and will not beat you. And, finally… Note to DC canuckophile “progressives”: Do it. Really. Go. Seriously. It really is better there. Go. Do it. It's a glittering frosty wonderland of social justice. Live the dream! Go!

(Note: I get to say “frostback,” etc. because I am half Canadian … like if I was half black, I could make fun of black people, Chris Rock style. I am not, as it happens, half black, so I will never ever ever make fun of black people. But I do reserve the right to mock Canadians.)

The Proper Pre-eminence of Immanence

In the course of a fascinating post in which he discusses Geoff Pullum's claim that there is a kind of third way between linguistic descriptivism and prescriptivism, Glen Whitman wonders about the relative merits of internal versus external normative critique of systems of social rules. In the process, he quotes the ubiquitous Uncle Fritz (from LLL, vol. II), and then comments:

If we are to make full use of all the experience which has been transmitted only in the form of traditional rules, all criticism and efforts at improvement of particular rules must proceed within a framework of given values which for the purpose in hand must be accepted as not requiring justification. We shall call ‘immanent criticism’ this sort of criticism that moves within a given system of rules and judges particular rules in terms of their consistency or compatibility with all other recognized rules in inducing the formation of a certain kind of order of actions.

Hayek’s argument hinges on two aspects of his thought – first, his severe doubts about the ability of human beings to fully comprehend the functionality of their social norms (an epistemological position); and second, his belief in an imperfect but usually beneficial process of cultural evolution. If one doubts either of these positions, external critique might seem more sensible.

I agree with Glen, but there's more to the point of internal critique than just this, I think.

Hayekian immanent criticism bears a close resemblance to Rawlsian reflective equilibrium (RE). I believe the most overlooked aspect of Rawls account of RE is that the raw material for reflective moral deliberation flows from from the same capacity that accounts for moral motivation. If we use commitment A to criticize commitment B, and vice versa, and end up with a new commitment C, we can marshall the motivation associated with our initial commitments into the service of C. The problem with external criteria of the right is that they may have no connection to the commitments that govern our moral motivation. The external criterion may tell us that we ought to have commitment D. But there may be no plausible psychological path from here to there. So a system of rules constructed according to an external criterion (the principle of utility is an excellent example) will be regarded by actual people as alien and offensive to their moral sensibility, and will not gain their willing compliance. A system of rules arrived at through a process of reflective equilibrium or immanent criticism will generally have a connection to our prior tendencies of judgment and motivation, and will therefore be more likely to gain willing compliance, and will therefore more likely be stable and viable as a system of rules for real people.

Reliance on immanent criticism is, I believe, a hallmark of a genuinely liberal, non-utopian cast of mind. Because people don't like to comply with rules generated by external criteria — because we don't recognize them as binding — those committed to these criteria may get it in their heads that the little people need to be forced to follow the rules, or have their moral sensibility “re-educated.” For their own good, of course. In this respect Rawls and Hayek are very much on the same liberal team against socialists too much in the grip of an external theory about an optimal order.

NB: the line between a highly refined and developed internal critique and an external one is fine indeed.

What Do You Deserve?

Chris Dillow usefully collects a number of pertinent Hayek quotes regarding the debate about income and desert.

I think it's useful to clearly reiterate what Hayek's argument about the connection between distibution and overall moral desert really is. I think this is basically the argument:

The setup:

Gather the names of everyone inhabiting a certain social order (pretend that there is some non-arbitrary way to draw the boundaries between orders or societies). On the first list, List A, order the names according to some standard of overall moral virtue or praiseworthiness, from most virtuous to least. On the second list, List B, order the names according to last year's income, from high to low.

Conclusion:

If you pick a name at random, there will not be an especially tight correlation between its place on List A and List B.

Reasoning:

Income is determined for the most part by the supply and demand for different forms of labor, and the supply and demand for capital (which determines rates of return for those with savings or investments), and an individual's overall moral merit has almost nothing to do with the overall supply and demand for labor and other forms of capital. If computer programmers are in short supply, for example, they will command high wages, whether or not they are saints or sinners.

That's the argument.

Now, Hayek's larger argument about social justice is that it is incoherent to look at List B and criticize it for failing to map onto List A, or to map onto any other list ordered according to whatever normative standard you like as long as the general system of rules (both formal and informal) is desirable.

And we should

“. . . regard as the most desirable order of society one which we would choose if we knew that our initial position in it would be decided purely by chance.”

Or

The Good Society is one in which the chances of anyone selected at random are likely to be as great as possible.” [LLL, vol. 2, p. 132]

Now, crucially, there is nothing in this argument that says that Gary (picking a name from list B) did not deserve $50,00 in 2004. The argument is that it is incoherent to say that Gary deserves his ranking on List B, which is determined by Gary's income, which happens to be $50,000, and the number of people who brought in a greater income.

Suppose Gary inhabits a fairly Good Society in Hayek's terms. Now it turns out that Gary entered into an agreement with the Institute for the Study of Distributive Justice that says that Gary will be paid $50,000 over the course of 2004 if he completes a number of tasks to the satisfaction of the ISDJ. And he did complete these tasks to the satisfaction of the ISDJ. So Gary straightforwardly deserves, has a genuine moral claim on, exactly $50,000 from the ISDJ.

And the ISDJ pays, as justice requires. Now, Gary's $50,000 earns him a certain place on List B. Suppose Gary is on line 1000 of List B (it's a very small society). Does he deserve to be on line 1000? Hayek's argument tells us that this is an ill-formed question; it contains a category error. As Will Munny so wisely observed in a different context, “Deserve's got nothin' to do with it.”

If the winds of supply and demand throughout the economy had blown differently, Gary might have moved up or down List B, and this obviously has nothing to do with anything Gary can take credit for. So there is something pretty contingent and normatively arbitrary about his rank on List B. A butterfly spits in a pitcher of lemonade and he moves up to line 1001. Whatever. Nonetheless, Gary really and truly morally deserves $50,000. But not from society, which makes no sense. Gary has no claim against you and your sister. He has a claim against the ISDJ, with whom he entered into an agreement within the context of the rules of a pretty Good Society. They owe him, because that's the amount they agreed on, and Gary came through. He has it — the agreed-upon amount — coming.