What We Do at Cato

Once again, The Onion has the scoop

Political Scientists Discover New Form Of Government

October 30, 2007 | Issue 43•44

WASHINGTON, DC—Political scientists at the Cato Institute announced Monday that they have inadvertently synthesized a previously theoretical form of government known as megalocracy.

“We were attempting to recreate a military junta in a controlled diplomatic setting, and we applied too much external pressure,” said head researcher Dr. Adam Stogsdill, a leading expert in highly reactionary ruling systems. “The resultant government has the ruthless qualities of a dictatorship combined with the class solidarity of a plutocracy—it's quite a remarkable find.”

Stogsdill explained that megalocracy is extremely unstable and can only exist in idealistic conditions for a few minutes before collapsing into anarchy.

Stogsdill is an underrated innovator. He was, by the way, demonstrating what happens when grandiosely interventionist foreign policy attempts to prop up puppet regimes. For my part, last week I had a functioning Rawlsekianism going strong inside a Mount Rushmore snow globe.

Pluralism and Political Entailments

In the newish Public Reason blog, Robert Talisse writes:

I’ve been working on Berlin-style value pluralism lately. I’m particularly concerned with the attempt (made by Galston and Crowder, among others) to derive liberal political commitments from value pluralism. My sense is that value pluralism has no entailments regarding politics. But that’s a topic for another day.

Nope. It's a topic for today! My sense is that every value theory has no entailments regarding politics. Whatever value it is you're after, it's an empirical question what institutional arrangement will produce it. Which is why political philosophers are useless in that Kantian “concepts without experience are empty” sort of way without a bit of social science. Liberal neutrality is a practical way of dealing with the fact of moral disagreement — with the fact of pluralism in moral conceptions. You don't need the deeper truth of value pluralism to generate the fact of pluralism. But actual value pluralism, if true, would help explain why observed pluralism is deep — people are out there responding to all these different actual values and prioritizing them in different ways — which would tend to reinforce the need to accommodate diversity in moral conceptions, which would tend to support liberal toleration and liberal state neutrality. That's not an entailment. One does not derive it. But given the historical fact that liberalism has been a fairly practically successful way of dealing with the fact of religious and moral diversity, its pretty easy to understand how metaethical value pluralism might be thought to point toward liberalism. Right?

Is the Welfare State Justified? by Daniel Shapiro, Comments from Jason Furman

Are you in or around D.C.? Well, you're invited!

POLICY FORUM
Monday, October 29, 2007
12:00 PM (Luncheon to Follow)

Featuring Daniel Shapiro, Associate Professor of Philosophy, West Virginia University, with comments by Jason Furman, Senior Fellow and Director of the Hamilton Project, Brookings Institute and Will Wilkinson, Policy Analyst and Managing Editor of Cato Unbound, Cato Institute.

In his new book, Is The Welfare State Justified?, philosopher Daniel Shapiro insightfully combines moral and political philosophy with contemporary social science to argue that proponents of the welfare state — egalitarians, communitarians, and liberals alike — have misunderstood the implications of their own principles, which in fact support more market-based or libertarian institutional conclusions than most people realize. Please join us for a discussion of this important and controversial new book on the missing moral foundations of the welfare state.

Cato events, unless otherwise noted, are free of charge. To register for this event, please fill out the form below and click submit or email events@cato.org, fax (202) 371-0841, or call (202) 789-5229 by noon, Friday, October 26, 2007. Please arrive early. Seating is limited and not guaranteed. News media inquiries only (no registrations), please call (202) 789-5200.

Sign up online at the Cato events page.

Pre-Tax Inequality and Distributive Versus Allocative Justice

Thanks to Tyler for linking the pre-tax inequality post below. Not unusually, Tyler's comments are cryptic but suggestive:

This is all well worth knowing, and it does help counter the view that growing inequality of income is a poliical [sic] conspiracy. But oddly both the critics and the defenders here are missing one major inequality-related difference between Germany and the United States, namely social norms. We have weaker families, weaker social pressures to conform, deeper bayous, and as a result more flat out lunatics, losers, and violent psychopaths. (Did I mention we also have more innovation?) That’s inequality too, though the usual political recipes aren’t likely to provide the cure.

My gut tells me that I agree with Tyler about his conjecture that America has higher variance in sanity, though I'm not sure what to make of this. However, Ryan Avent thinks Tyler's speaking nonsense:

I can only imagine that he added all that bizarre stuff about bayous to cover the fact that his first sentence makes absolutely no sense at all. If pre-tax inequality isn’t all that unusual in America, relative to similar nations, but income inequality after taxes and transfers is unusual, doesn’t that suggest that the tax and transfer process might be contributing to inequality in a fairly significant way? And mightn’t that be because American tax policies favor the rich to a degree unmatched in other developed nations? How does this, in any way, debunk the notion that political efforts to protect the rich are in fact protecting the rich?

If it helps, here's what I had in mind while writing the original post: John Rawls's distinction between distributive and allocative justice.

Nozick had accused Rawls of offering the idea that social justice is a pattern of holdings. However, if people are able to make whatever voluntary exchanges they like, they will constantly disrupt the pattern. And so, if Rawls is right that justice is a pattern, the state will have to constantly interfere with individual's rights and liberties in order to reinstate the pattern that is constantly ruined by free exchange. There seems to be a conflict between liberty and justice-as-pattern. So said Nozick.

Now, Rawls said that this confused allocative justice for distributive justice — which is what Rawls's theory is supposed to be a theory of. A theory of distributive justice is a theory about the way the “basic structure” of a society's institutions distribute opportunities and goods. Once you've got the basic structure right, such that the least-well off are generally doing as well as they can given the feasible institutional alternatives, then whatever pattern that emerges from that is fine, more or less. It will not in fact require the constant, meddlesome re-allocation of goods from some people to others.

Rawls likes a system that he called “property-owning democracy” (which I still for the life of me don't really understand) which he contrasts with what he called a “market welfare state” (or something like that — this is off the cuff). If I remember right, Rawls thought that market welfare states didn't really fairly distribute opportunities and goods at the level of the basic structure, and substituted tax-and-transfer policies of material reallocation as a kind of pale approximation of the kind of true-blue social justice that comes from getting the basic structure right.

OK! So the reason that graph was interesting to me is that I had a strong sense from reading Rawls and his students that the European social democracies are thought to be much closer to a proper “property-owning democracy” than the U.S. market welfare state, and so I found it telling that the U.S. and Sweden, say, are only negligibly different in terms of pre-tax inequality. For whatever reason, their basic structures are generating similar levels of inequality. And so the difference in final inequality may not so much reflect a difference in distributive justice, in the Rawlsian sense, but a difference in policies of re-allocation, which Rawls did not consider central to justice.

However, reading Tyler's addendum containing the thoughts of his “very eminent source,” I see the similarities in pre-tax inequality do have quite different underlying causes: in the U.S. people get really extraordinarily rich; in a lot of Europe, a good chunk of the working-age population don't have jobs at all, and so basically have nothing before transfers. So, in terms of basic structure, it may well be: advantage America! In Rawlsian terms, a basic structure that creates a high ongoing unemployment rate is going to be denying many of the least well-off with “the social bases for self-respect,” one of the most important Rawlsian primary goods.

Now, I understand not everyone (anyone?) shares my special interest in applied Rawlsianism. So, to actually address Ryan's point, here's why the pre-tax numbers may seem to cut against a “conspiracy” argument. My original thought was that if greater U.S. inequality was a function of uniquely weak unions, uniquely shifting compensation norms (allowing CEOs salaries to rise, e.g.), uniquely wild superstar markets, uniquely high levels of opportunity hoarding by the already privileged, etc., then U.S. pre-tax inequality ought to stand out more than it does. But since it doesn't, the relatively high U.S. level of post-tax and transfer inequality is more likely a reflection of the simple fact that high-ish levels of inequality bother Americans much less than it bothers Europeans.

I think the main reason for this, culturally, is that modern Europe emerged from a system of predatory aristocratic privilege and rigid class stratification, whereas the U.S. started out as a relatively egalitarian society. So, to caricature the difference, Europeans see inequality as a sign of intolerable exclusive advantages while Americans see inequality reflecting the fact that some people, who are to be admired an emulated, have made good on the abundant opportunities America affords. If the difference in post-tax-and-transfer inequality simply reflects different cultural attitudes about inequality, then remaining complaints about the relatively high U.S. level of inequality are really just complaint about what Americans believe.

The Economist Debates

As Tyler announced last week, The Economist newspaper is importing its series of debates, already a big success in London, to these United States, and in the inaugural U.S. event, Tyler and I will be debating on the negative  side of the proposition “That America is failing at the pursuit of happiness” against economist-to-the-stars Jeffrey Sachs and Penn economist and happiness researcher Betsey Stevenson. The Economist's executive editor Daniel Franklin will moderate.

Here's the basic details:

Saturday, November 10th
3:00 – 4:30pm
Gotham Hall
1356 Broadway (@ 36th Street)
New York, NY 10018

It's one of those Oxford-style debates where the audience votes before and after to gauge who was most persuasive. If you'll be in New York, or can be in New York, and are looking for some rousing live intellectual-on-intellectual action, you can buy your tickets here. I have to admit: I'm a little nervous and a bunch of friendly faces would help. It's the same price as the Decemberists show, but with more famous economists and many fewer songs about sailing vessels.

Belgium and the Global Polycentric Order

I highly recommend Alex Massie's reply to Jonah Goldberg's column on how the EU has enabled the fragmentation of states like Belgium.

Goldberg seems to think that the EU has failed since it wanted to destroy national identity but that’s not really true: it wanted to change the way we think of nationality and, in the European context, it’s largely succeeded in doing so, decoupling patriotism from nationalism in ways that have been overwhelmingly healthy.

Matt Zeitlin also has a smart retort:

The EU is not about dissolving nationalism or national feeling, but sensibly moving certain supra-national market functions and policies up to a larger level so that markets and regulatory policies can be more easily integrated and harmonized. Thus, these states like “Britain” or “Belgium” or “Spain” which have a history of jamming together disparate ethnic, linguistic and cultural groups largely in the pursuit of some great power struggle, are less and less necessary.

The question is about the optimal size of public goods jurisdictions. There are very local public goods, such as a sewage or mass transit systems, and supranational public goods, like legal frameworks for international trade. The jurisdictions for various goods can overlap or not and in various ways. A polycentric system allows for the provision of public goods at the efficient level of administration for the good's geographic scope without imagining that jurisdictions are nested one inside the other like Russian dolls. The Age of Nationalism has created vast inefficiencies by inflating what should be local jurisdictions, on the one hand, and, on the other, by insisting on “sovereignty” — that is, on the national level as ultimate and authoritative — basically leaving many supranational public goods to go unprovided.

Elinor and Vincent Ostrom are our greatest sources of wisdom on the matters of the scope of jurisdictions. Here [pdf] is Elinor Ostrom:

The presumption that locals cannot take care of public sector problems has led to legislation throughout the world that places responsibility for local public services on units of government that are very large, frequently lacking the resources to carry out their assignments and overwhelmed with what they are assigned to do. One should stress that this is not the way that Europe developed. Since the 11th century, thousands of independently established Waterboards were established in the delta of the Rhine River with their own rules and physical structures, drained the swampy land, and protected the land from being inundated except during extreme storms (Toonen, 1996; Andersen, 2001). In Switzerland, alpine peasants devised a variety of private and common-property systems to gain profitable income from an extreme and diverse ecology (Netting, 1981). More than 1000 free cities with their own charters and legal traditions flourished in Europe during the middle ages and were the foundation for modern constitutional democracies (Berman, 1983).

Contemporary legislation assigning regional or national governments with the responsibility for local public goods and common-pool resources, removes authority from local citizens to solve local problems which differ from one location to the next. We need to unlock their capabilities and enable them to be recognized as citizens and local public officials with the power and authority to take action to solve local problems. We need to think of the public sector as polycentric system (V. Ostrom, 1999) and not as a monocentric hierarchy.

Now, there's a good case that moving central banking, and some trade and labor market regulation up to a supranational level makes good sense. That's a better level. And if other public goods are most sensibly provided relatively locally, as Ostrom emphasizes, then some European states, as presently configured, may make little sense as public goods-providing jurisdictions. Now, many badly confused people think a sense of collective identity is one of the goods states should provide. But then why shouldn't Scots, Basques, Walloons, etc., have their own states — especially if that these turn out to be, in practical terms, something like a very grand garbage collection jurisdictions with monetary policy, defense, and other big ticket public goods outsourced to the larger supranational jurisdiction? If the more encompassing jurisdiction reinforces a cosmopolitan sense of identity that balances local ethno-cultural identities, then all the better.

Discussion questions:

When the North American Union finally arrives, should we expect Quebec finally to successfully secede? How about the Western provinces? California?

If Bob Wright is correct about the inevitably widening scope of positive sum games, isn't polycentric federalism the structure the global order will take?