Two Verdicts on Two Replies to Two Replies
By Bryan Caplan
1. Garett and Me on Evil
I’d be much more impressed by an experiment showing that subjects spontaneously try to hurt others. Suppose you tell them they can pay some money in order to change
others’ endowments. Start with an example where one player pays money
to increase others’ endowments. Then see if anyone spontaneously tries
to pay money to decrease endowments.
Garett’s reply to me:
This experimental literature went in a lot of directions, but one
matters for us: Some economists added a chance for players to punish
other players by taking away their money (usually at a cost to the
punisher). The thought was that if people suspected they’d be punished
if they didn’t contribute, they’d contribute more. And of course,
that’s just what happened.But something awful happened too:
Some players punished people who were highly cooperative! So here was a
power that–to any casual observer–was specifically designed by the
experimenter to punish the wicked.What did a substantial number of players do with that power? They punished the saints. Given a chance to spur cooperation, they “spontaneously [tried] to hurt others.”
Verdict: I’m persuaded. Well-played, Dr. Jones.
2. Sumner and Me on Economic Freedom
My point is not that redistribution, rather than regulation, is The Key
to economic freedom. My point is that economic freedom has Two Keys.
A solid measure of economic freedom wouldn’t merely take points off for
both redistribution and regulation. A solid measure of economic
freedom would only classify countries as “economically free” if they had
low redistribution and low regulation – and would classify countries as “economically unfree” if they had high redistribution or high regulation.
Sumner’s reply to me:
[G]overnment spending and taxes as a share of GDP can be highly
misleading. It doesn’t tell us how much “redistribution” is occurring,
for instance. To a large extent the Nordic social welfare programs take
money from the middle class and then return the money to the middle
class. In contrast, Singapore forces people to take care of their own
medical/retirement, etc. So the “official” level of government spending
in Singapore is very low. And I do prefer the Singapore approach,
which involves less redistribution and lower MTRs. But the G/GDP ratios
vastly overstate the difference between the Nordic and Singaporean
models. That’s why I focus on variables like MTRs and tax complexity,
which do a far better job of picking up the extent of market distortion.