Putting More on the Table Brings People With More to the Table

If you haven't been following this month's Cato Unbound discussion, then what are you waiting for?! You've got time to catch up now before the free-for-all blog discussion kicks off.

Jacob Hacker's essay is very good, I thought. But it sharpened my longstanding bafflement about what exactly it is that (non-libertarian) egalitarians think they are up to. Hacker argues that one of the most troubling things about economic inequality is its effect on the political process. The democratic ideal is equality of voice—equal say in the political process that determines our common terms of association. But the wealthy have the means to buy a louder voice and a disproportionate say in process.

So what do we do? Hacker here does not say. But I assume that he would like to see higher taxes on people in the upper income brackets, for both equality of opportunity and equalization of voice reasons. Is this a good idea? This is where I become baffled. Consider Hacker's reply here to a point of Schmidtz's:

“When we insist on creating enough power to beat the best players in zero-sum games,” Schmidtz claims, “it is just a matter of time before the best players capture the very power we created in the hope of using it against them.” The best (or at least the richest) players do seem to have captured power in American politics, but it is rather perverse to suggest that this is the fault of egalitarianism. Instead, what we have here is a classic story of cumulative advantages—people who have more are being heard more by political leaders, and what government does reflects this imbalance.

Is it in fact perverse to suggest that this could be a fault of egalitarianism? I think it is in fact what anyone sensitive to the power of incentives would predict from an increase in the power of the government to redistribute wealth.

Imagine you are wealthy. Now, ask yourself: If I have more at stake in what the government chooses to do, will I be less motivated to influence that choice? Of course not.

I will be more motivated. Putting more power and money on the table for the government to dispose of is a surefire way to ensure that the people with the most money and power to lose will come to the table to make sure that they don't lose it. Moving money around is a zero-sum game, zero-sum games are games of conflict, and the strongest players win games of conflict. The more motivated you are (I'm talking to you “progressives”) to make the strongest players weaker, the more motivated the strongest players will be to stop you. And they will win, because they are the strongest.

Suppose in round 1 the government is seen as having no power to redistribute income. So very few people devote resources to controlling the government, since government has so little to give. Suppose, though, that a bunch of altruistic social democrats who would like the government to do more downward redistribution take over (so little opposition!). In round 2 the social democrats increase taxes and redistribute the money downward. Social Justice! Yay! But in round 3, people who had their money confiscated will surely notice, and many will be motivated to populate the government with people who will give them their money back. So, suppose in round 4 the government is now populated by tax cutters, and they cut taxes, and cut the redistributive programs. Now, all the people who were benefitting from redistribution, who have come to depend upon it, will say, hey! But, lo and behold, the people with the most money find it easier to control the political process in each subsequent round. Any round that decreases the resources the wealthy have to spend on voice will only increase their motivation to spend their remaining resources on voice in the next round. They may, for a round or two, have a smaller relative advantage, but they will be more motivated to use it to full effect. The key point is: the social democrats' egalitarian motivation kicked off the process that led to the consolidation of advantages by the powerful.

The straightforward implication is that you can't reliably equalize wealth or voice by putting more money and power on the table. Putting money and power on the table further biases the process in favor of people with the most money and power. And, worse, putting money and power on the table provides a compelling incentive to invest in conflict instead of cooperation. This is doubly bad because over the long run the strongest win all the gains from conflict. The clearly optimal truce is to prohibit money and power from coming on the table, and to provide the best possible incentives to invest in cooperation. Even if the strongest take the larger share of the surplus from cooperation, the weakest at least get a share, unlike under conditions of conflict.

This is what I took Dave to be getting at. And this is perfectly consistent with Hacker's “classic story of cumulative advantages.” The more you try to use the state to take power away from the rich, the more you will lose. Then the rich will have the power that they had, plus the power of the state that you were trying to use against them.

I think liberal-democratic egalitarians are in a bind. I think Marx(ists) saw the game structure here. The only way to win a game of conflict against the stronger is to create a yet stronger coalition of the weaker through the sheer power of numbers. And then, basically, gang up to eliminate the strongest and redistribute their stuff. Of course, this doesn't work, either. Because the coalition of the weaker–“the Party”–simply becomes a vehicle for predation for a new class of the strongest. But if we've gotten to this point, then the cooperative game has been almost entirely destroyed, and all that's left is conflict and predation, and you get the most horrifyingly inegalitarian result imaginable.

OK. So we don't want that. So what do we do? Use liberal democratic means? I think that lands you right into the scenario I laid out above: the more money and power on the table, the more the powerful will dominate the table, and so you can't equalize money and power by trying to put more of it on the table. The only egalitarian solution in sight is: take money and power off the table.

[What do you think about this month's Cato Unbound essays? If you write a sharp blog post about one of them, we may publish it alongside our invited contributors. Here's Chris Bertram and Harry Brighouse's contribution from Crooked Timber. Our issues are intended as a launching pad for broader conversation, not a dais from which the elect instruct us. So dig in!]

Opposite Day

I really like Tyler's Tyrone posts, and so in the spirit of unoriginality, I propose to do a few in the same vein. My friend Liam will happily defend any (non-offensive) position that I am known to reject. The first subject mentioned three times wins.

(By the way, if I recall, the literature does not show that defending the “opposite” position makes you more likely to think you could be wrong. What makes you second-guess yourself is when you have to point out and explain the weaknesses in the position you do hold. So if the game was “gore your own ox” then we would take time to carefully explain the holes in our favorite theories, which is different from defending the contrary.)

Self-Deception and Self-Construction

A few years back, I had the opportunity to help organize a conference on self-deception with Tyler Cowen and Robin Hanson at Mercatus. I'm now at a Liberty Fund conference in St. Louis on “Liberty, Responsibility, and Lying.” All our readings have been about prohibitions and justifications for lies, deception, etc. The idea that self-deception can drive other-deception has come up a number of times, and this brought me back to the self-deception conference, and some thoughts I've subsequently had about it.

Tyler & Robin have a paper that says, very roughly, if we were rational, then we would be Bayesian updaters. If we were Bayesians, every conversation with someone who disagrees with us about some proposition, but who has access to equally good information, and is able to process information at least us well as us, and who is therefore at least as likely as us to be right, ought to lead us to revise downward the probability of truth we assign to the proposition in question. In which case, we would end up changing our minds a lot. (If Tyler or Robin, say, who are each way smarter than I am, and have each forgotten more about economics than I have ever learned, disagrees with me about a proposition in economics, I certainly ought to take that as evidence that I am wrong.) But we don't really change our minds that much. Instead, we're fairly instransigent. And sometimes we even revise our probabilities upwards in the face of contrary evidence. So, they argue, we must be pretty self-deceived about the relationship between our beliefs and the truth.

I've long been intrigued by this argument. And I've actually taken it to heart, to some extent. I'm convinced that I do overestimate the probability that my beliefs are true, and I'm convinced that I ought to take other people's comparative epistemic advantage more seriously than I am inclined to. (And you too.) And I think this has made me a marginally better person. But I'm not convinced that our failure to be good Bayesians implies self-deception so much as self-construction.

In The Mind's Past, Michael Gazzaniga argues forcefully that the function of part of the mind/brain (he calls that part the “interpreter”) is simply to make stuff up, to confabulate, in order to create narrative coherence in the stream of consciousness. There is a sense in which the self just is the narrative. But the narrative is constructed in part by confabulation on the part of the interpreter. There is a temptation, but I think it would be a category error, to say that the self is a “fiction.” Compared to what? A really real self? The point is that there is no such thing. No. Rather, the point is that the really real self, the only kind of self there is, is a narrative construction that is built by the mind/brain with little concern for veridical representation. The truth about us is that we, our selves, are streams of truth mixed with untruth. And that is just the way it is.

Now, this is narrative coherence at a very basic experiential level. I think we need it at higher levels, too. Agency requires it. If we're going to be active units that can choose ends, make plans, enact those plans, and coordinate with others in a way that benefits us, we need a relatively stable self-conception. If our plans, say, are a partial function of our beliefs, but we are willing to change our beliefs every time we confront somebody who knows more than us, then we will keep changing plans. But if we keep changing plans, we will never enact one. But we need to enact plans or we will cease to exist as active units. And, coordination . . . if I come home on Tuesday and announce to my wife that I am now a Democrat, and then come home on Wednesday and announce I am now a Seventh Day Adventist, and then come home on Thursday that I am now an ethical vegetarian and cannot eat the meatloaf, well, my wife isn't going to be my wife for long. If we were good Bayesians, we would be schizophrenic, we would disintegrate, the self would dissolve. Maybe you reach Nirvana when you destroy the self and become a true Bayesian. But you are not self-deceived in virtue of having a self.

We often associate integrity with being true to ourselves. But when ourselves are, in some sense, false, integrity is. . . what? Integrity, self-coherence, requires . . . falsehood. To be true to the self is to endorse the fabric of truth embroidered with untruth that is the self.

We all self-mythologize and confabulate to varying degrees. People with delusions of grandeur and convictions of surpassing personal exceptionalism may be annoying to the extreme. But there is no escape from some self-constituting delusion. (In my experience, some of the people with the grandest delusions are those living out a narrative of unflinching commitment to authenticity and truth. ) If selves are constructed in part by untruth, it raises vexing questions about our duties to the people we love. (And to ourselves, if we love ourselves.)

When are we required by love or the obligations of friendship to puncture their illusions and press them to center their selves more firmly in truth or more forgiveable fantasy? When we are openly disturbed by their illusions, can we be sure our complaints amount to more than a request that they exchange theirs for ours? When are we required to pass over benign self-constituting myths in silence? Are we required to reinforce and positively encourage them when self-constituting myths are a source of what we admire and love, even if we do not ourselves believe them? Are we required to amend our narratives so that we come to believe them, the better to reinforce and support the best in those we love?

I suspect that the answer to the last two questions is “yes.” And that makes me exceedingly uncomfortable. Because I like to think I have an unflinching commitment to authenticity and truth. But the present deliberation is in part a process of reconsidering the meaning of authenticity and the meaning of truth with regard to the self. So what is it exactly I am committed to? The standards have readjusted. Though a distinction between good self-constitution and bad self-constitution remains, I am wary of allowing too much and acquiescing to what is self-indulgent, rotten, and ignoble. So, we must go forward with wariness, and, let's hope, good faith.

Meet me in St. Louis!

If you're in St. Louis this evening, I'll be giving a talk sponsored by IHS and the Show-Me Institute (Show me the freedom! That's what!) on “Identity and the Psychology of Persuasion,” a version of the talk I've delivered the last couple years for Cato University.

Here's the deal:

Although armed with impressive logical and empirical arguments, you have probably discovered that your liberal and conservative friends aren't immediately persuaded by your devastating dialectical acumen. No matter how many times you explain the economics and philosophy of individual rights and free markets, many of your friends and family remain unconvinced.

Why do some people seem impervious to logical argument? You're invited to an event in the St. Louis area entitled “Identity and the Psychology of Persuasion.” Will Wilkinson, a friend of ours and a policy analyst at the Cato Institute, will draw together recent research in social and cognitive psychology that can help you become more effective at persuasion.

Will argues that political and moral beliefs aren’t just an embellishment tacked on to our personalities. We tend to see our beliefs as expressing or constituting our sense of who we are. We worry that if we change our minds, we’ll be selling ourselves out. That’s one reason why it is hard to argue somebody into a new position, even if you are right. Will’s talk touches on a wide range of psychological studies dealing with, among other things, religious conversions, coalitional thinking, personality traits, and the importance  of metaphor in respectfully and effectively navigating issues of identity when trying to persuade.

The event is co-sponsored by the Show-Me Institute, a new free-market think tank based in the St. Louis area. In addition to meeting Will and hearing his talk, you'll have the opportunity to meet SMI staff members and learn about its programs. If you enjoyed participating in IHS's programs, this is your chance to get involved in a sister organization in your home town. You'll get a free glass of Schlafly's beer, courtesy of IHS.

The event will be held at the Schlafly Brewery and Tap Room, located at 2100 Locust Street, at 7:30 PM on Wednesday March 8. More information about the location, including a map, is available here:


Thanks for your past participation in IHS programs, and I hope you'll join Will and the Show-Me Institute at the Tap Room on March 8.

If you'd like to attend please RSVP to Tim Lee: tlee -at- showmeinstitute -dot- org

And after that, I'll be at a Liberty Fund conference on “Freedom, Responsibility, and Lying.” The readings have been fascinating, and would have been useful when preparing my paper on Social Security as embodying an illiberal “noble lie.”

Bad Marriages

As I've been thinking through a number of different issues, I keep arriving at the utter stupidity of two contingent, harmful linkages in our social system. Both linkages should be dissolved immediately.

(1) The house-school linkage.

(2) The work-health care linkage.

Both of these connections are an accident of history, make almost no sense whatsoever, and make it very very difficult for people to create unique modes of living that suit their individual situation. If I could push a button and divorce houses from schools and work from health care, I would do it. I would prefer generous federal-level education vouchers, and generous federal-level universal insurance coverage over the status-quo. And I don't like either of those ideas very much.

(I will die in the last ditch, however, to prevent further government involvement in the provision, as opposed to the financing, of education and health care. Whether you can get redistributive taxpayer financing without terrible government provision and control is a question for the ages. Other things equal, you should be opposed to a policy roughly in proportion to the degree that it interferes with price signals.)

Are there any other bad policy marriages that need to be annulled?

David Schmidtz on Inequality at Cato Unbound

This month's Cato Unbound ought to be catnip for Fly Bottle readers. Dave Schmidtz kicks off this month's issue with a great little essay about “When Inequality Matters.” It draws from his new book, Elements of Justice, which is, to my mind, the best book in libertarian political thought since Nozick, and truly deserves wide attention.

Dave is one of my biggest philosophical (and personal) influences, and I can't help but think the world would be better off if he influenced more people's thinking. I hope you'll take a look at Dave's essay, buy his book, and if you have a blog, tell us what you think. Peter Singer will comment on Wednesday, Cato's Tom Palmer on Friday, and Yale's Jacob Hacker next Monday. Should be good stuff.

Institutions, Boundaries, and Useless Statistics

Don Boudreaux has been doing the Lord's work by pointing out that economies are not bounded by political borders. I've made the point before that the better a state's institutions are, the less the state level is the appropriate final unit of analysis. Good institutions within a state's borders are precisely what enables the people under the jurisdiction of a state to create complex networks of economic, political, and moral cooperation with people outside that jurisdiction. Which is a way of saying the good institutions in here increase our interdependence with people and institutions out there.

Nothing has brought this point home to me more than the lovely, truthy, graphics accompanying Richard Florida's Thomas Friedman takedown “The World is Spiky” [pdf] in the October 2005 Atlantic.

Scientific CitationsPatents

[click for full-size]

What is manifest in the pictures is that U.S. institutions, in addition to producing more wealth and using more energy, produce scientific discoveries at a rate far outpacing the rest of the world. Just glancing at picture, it appears that MIT and Cal Tech combined produce almost as much scientific discovery as all of of Europe, which in turn produces more science than the rest of the world. The market economies of the Pacific Rim produce a trickle of science, but produce on overwhelming proportion of the world's tehnological innovation as measured by patents.

Here is one of these pictures' 1000 stories. American institutions confer a fantastically huge positive externality, in terms of knowledge, to the rest of the world. Science is a root cause of economic growth. New knowledge enables new technologies, which enable increases in the productivity of capital, which enable growth. And good institutions are the root cause of science. If the U.S. produces most of the world's knowledge and Asia produces most of the world's technology, then the institutions that underpin epistemic and technical advance are chiefly responsible for growth in states that have different institutions, but which are able to import knowledge. Which is why it is nonsense to compare, say, American and French GDP growth, as if those growth rates were a function of American and French institutions in isolation from one another. Because institutions are not isolated. The interesting question is: what would French GDP growth have looked like if the U.S. had produced, say, only 10% of its actual scientific output? If the Japanese had made only a 10% of their technological advances? My sense is that French growth would not have looked good. (NB: I have picked the French because they are very good in science and tech, but even so, the point is, others are much better.)
And there's the point. French institutions are good enough to take advantage of American science and Asian technology, and so can remain stable because they are plugged into others' comparative advantages, and can power their system (literally: the French did not think up the nuclear reactor) on the uninternalizable positive externalities of other systems of institutions. The flip side, though, is that it would be a tragedy for the French, and the world, if American institutions produced less science. It is not just that the U.S. would be worse off if its institutions were more like France. France would be worse off if U.S. institutions were more like France.