continued growth of government is not inevitable. But a word of caution: Neither is big government’s demise inevitable. Sometimes conservatives and even libertarians predict that big government is doomed. Some point to modern technology as the savior: The rise of personal computers and the microchip, along with the move away from mass production toward small batch, specialized production, was supposed to mean that modern, top-down bureaucracy was obsolete. But it hasn’t worked out that way.
The essay is hard to excerpt, because it is fairly tightly integrated. Thanks to Jonah Goldberg for the pointer.
I do think that modern technology creates more complexity and more local knowledge than central government can handle.
But how would we get to limited government?
a) The leaders will wake up one day and decide to give it to us.
b) Lots of people will one day wake up and demand it.
c) Competition for strong central government will emerge.
I vote for (c). Even though the Free State Project looks like a long shot, and Seasteading looks like an even longer shot, they are interesting.
After Iain Murray’s talk yesterday, a woman who works for a small libertarian organization in France told me that half of recent French graduates of top universities are currently residing outside of France.
Mencius Moldbug would have us consider undesired government programs, regulations, and taxes as a form of rent that we pay. George Lakoff prefers to think of “membership dues.” Perhaps the rent in France has gotten too high for some of the best and brightest there, so they are moving to the UK and the U.S.
This suggests that the real technological fix for libertarians would be enhanced mobility. By the way, I once heard Robert Metcalfe say that the ultimate killer application for the Internet would be teleporting, so that your physical location is not a constraint. If that were possible, would government rents go way down?
READER COMMENTS
Peter Twieg
Apr 30 2008 at 9:59am
This suggests that the real technological fix for libertarians would be enhanced mobility.
Unfortunately, although correctly, statists have come to see transnational mobility as a problem which needs to be addressed by an evolving (read: more positive) conception of human rights which would gradually lead to world-wide regulatory standards which are not necessarily controlled by global bureaucracies, but via the threat of sanctions against those rogue states that don’t adopt new “global standards” concerning minimum wages, state-provided health care, high income taxes, etc.
By invoking this global ethic, a libertarian state would be rendered as a pariah. And short of having something equivalent to a Galt engine, I have difficulty believing that a small, essentially closed libertarian state would be able to do as well as a group of interconnected social democracies.
Matt
Apr 30 2008 at 10:00am
Though it sounds undemocratic, we want people to have influence in government in proportion to their wealth. Progressives complain, but efficient market theory overrules them, and the poor would be better off.
We need a trade off between progressive taxes and increase influence of the wealthy in government. Economists should be able to balance the two so that the wealthy comfortably use their influence to right size government rather than trying to game government.
It is like a feedback amplifier, and can be dangerous to use, I admit, but we do this with adaptive linear filters all the time.
We apply an artificial limit on the estimate that the rich hedge on future government, we force them to predict a milder government cycle by ensuring that any larger cyclic prediction would result in a rapid rise in their marginal tax rate.
The result is that the rich would be less rich, but they would force government volatility back down into the economy.
8
Apr 30 2008 at 10:06am
Mobility is not a solution in itself because governments can and will agree to share information. If an American works overseas, they are required to pay U.S. income taxes. Even with teleportation, your body may move but your property is increasingly online.
Privacy is most important because governments tax, regulate and control what they see. We need a powerful government (Switzerland is too small) that allows people to hide within its networks.
The global free market was built by the British and American navies protecting the lanes of commerce. Similarly, a global minarchy will be created by a state that hides the lines of commerce.
spencer
Apr 30 2008 at 10:31am
The claim that over half of recent French gradates of top school are living outside France is a suspicious stat. Is there any way it can be fact checked?
Arnold Kling
Apr 30 2008 at 10:50am
Seems like a fact worth checking.
Here is one story on French expats in the UK:
http://www.guardian.co.uk/uk/2008/mar/23/immigration.france That story has only anecdotes.
The Grandes Ecoles graduate 5000 students a year, so if half of them are abroad that would be 2500 per year. I think that the woman who gave me the stat was giving me a statistic, not a wild number, but I can’t find anything to corroborate.
Brad Hutchings
Apr 30 2008 at 12:04pm
Look to Denmark if you want an example of the talented and the (even moderately) wealthy taking their talent and wealth off-shore. It is funny… The Danes I knew who offshored themselves didn’t necessarily hate the government. They had a fondness for other places and they weren’t stupid with their money. I think that adds kind of a twist to your scenario C.
Kyle M
Apr 30 2008 at 12:21pm
Two points:
1) I find it distressing that you read Jonah Goldberg. I just hope your BS filter is on 11 when you read his site.
2) For a really long shot/strange look into the future of government mobility, imagine what will happen if privatized space travel leads to privatized space colonization. How would you govern what happens on the Virgin Galactic space station or the Lockheed Martin moon colony? Could you?
Dan Weber
Apr 30 2008 at 12:57pm
I’m hardly a die-hard liberal, but this sends off big alarms. (And I’m very willing to hear alternatives to democracy, like Moldbug’s.) But wouldn’t a fully rational Bill Gates use his influence in government to say that he is above the law?
Matt
Apr 30 2008 at 1:15pm
“But wouldn’t a fully rational Bill Gates use his influence in government to say that he is above the law?”
We do not give up democracy, we use it a bit more intelligently.
The better example is Jim Gross (the bond king) , who is buy up cheap debt and advocating that government will “have to”, not should, subsidize housing. The trick is simple, if Jim wants us to “predict” subsidized housing, we will, but along with that is a steep progressive tax. Guaranteed that will be the last time Jim Gross, Solos, or Buffet hedge a government bailout.
This is quite typical, by the way, when the rich want their socialism, it is for the better of us all. Jim Gross is just as socialist as the worst of the progressive Dems.
Troy Camplin, Ph.D.
Apr 30 2008 at 2:05pm
I’ve decided that if we really believe in bottom-up processes, then we should be trying to make changes where it counts: at the bottom. Politicians follow the people, and the people are influenced by (and create) the culture. Thus, it seems to me that it makes more sense to try to affect the culture than to affect politicians. The senators from Florida may agree with you that it is better for the U.S. and Cuba both if there is open and free trade between the two countries, but they are not going to commit political suicide by voting for it, because Cuba-Americans oppose it. If we change their minds, they will encourage their senators to vote for free trade with Cuba. The question then becomes, how do you change the minds of the people? How do you educate them? Certainly we can’t expect government-run schools to educate people about the problems with and flaws inherent in government. But most people aren’t actually educated in schools anyway. They are educated by the culture at large. Thus we need to make changes in the culture. Criticism isn’t going to do it. The Left doesn’t criticize — they are busy making cultural products like art, literature, TV shows, films, etc. They are busy actually affecting the culture. If we want to effect long-term change, we need to contribute to the creation of cultural products which educate the average person.
TGGP
Apr 30 2008 at 3:06pm
Mencius Moldbug analogizes a country to a corporation (the U.S actually did start out as one) and claims ours is badly managed, with much of the rent being informal. He seeks to replace all the regulations and programs with increased taxation that will go directly to the shareholders (those who held informal power that will be formalized).
I argue against Kessler’s view and for Charles Lindbergh here. I think Robert Higgs, author of “Crisis and Leviathan”, would agree with me and Ron Paul (with Paul being the most moderate of the bunch, and possibly favoring our actions in WW2).
You guys make Denmark sound much worse than it actually is.
Mr. Econotarian
Apr 30 2008 at 5:32pm
Our only hope is that the Internet can bring the knowledge of economics to more people.
liberal
Apr 30 2008 at 8:26pm
Mr. Econotarian wrote, Our only hope is that the Internet can bring the knowledge of economics to more people.
God forbid, if the “knowledge” is as ignorant as the original post and following comments, given that the biggest wealth transfer conducted by government is from producers of wealth into the pockets of landowners in the form of land rent. (Maybe people who use the word “rent” should reflect on its origin in classical economics?)
Troy Camplin, Ph.D.
Apr 30 2008 at 10:01pm
The internet isn’t going to do anything of the sort, because people will have to seek it out online. The only hope is if we can get popular culture to accurately represent economic reality. People will learn all about economics if you put it in a sit-com or reality game show.
John Fast
May 1 2008 at 1:40pm
1. Arnold, have you read the chapter of The Machinery of Freedom where David Friedman compares anarcho-capitalism to living in a mobile home, i.e. where any time a government or police service does something unpopular it will lose all its customers?
2. Matt, one way of implementing what you suggest would be to give people a voice in government, i.e. votes in elections, proportional to the amount they pay in taxes.
An even better way would be to allow people to directly control the allocation of the federal budget of the amount of taxes they paid.
An even better way would be to privatize everything, of course.
Isegoria
May 5 2008 at 9:05am
One of his key points is that the government will tax its citizens, but our government has little incentive to do so efficiently. Politicians must find clever, if wasteful, ways to reward their cronies.
A profit-maximizing joint-stock company, on the other hand, would have a clear right to keep the profits, so it wouldn’t invent new bureaucracies and divert funds into pork-barrel programs.
He points to Hong Kong, Singapore, and Dubai as city-states that approximate the profit-maximizing model.
(Does anyone have any recommendations for how to perform a leveraged buy-out of a sovereign state?)
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