Sumner Gets Blockian
Walter Block on measuring economic freedom:
[I]t has long been my experience that whenever any person reasonably
but not fully sophisticated in economics sees the findings of these
studies [of economic freedom], he invariably objects on the ground that
his own country is rated far too highly. My explanation for this
phenomenon is that most moderately informed people know the situation
in their own nation significantly better than for others. They are
thus intimately acquianted with the machinations of their own
politicians, warts and all. They think that if ever there was a
country to which the honorific “economic freedom” does not apply, it is
their own. But they do not realize that other countries are in the
same boat, and sometimes a far worse one.
Scott Sumner on measuring Adam Smith’s support for economic freedom:
Mark Thoma recently
linked to a Gavin Kennedy post that argued Adam Smith did not favor
laissez-faire. I don’t agree. The evidence cited was a one page list
of government interventions that Smith favored. The US, by contrast,
has enough government interventions to fill a New York City phone book,
if not a small library. And the US is regarded by the Europeans as
“unbridled capitalism.” Even Hong Kong intervenes in far more ways
than Adam Smith contemplated. Of course Smith was not an anarchist,
he did favor some government intervention in the economy. But relative
to any real world economy, his policies views were extremely
I see this as a common cognitive bias. The Gavin Kennedy list
posted by Thoma certainly looks impressive, but when you think more
deeply about the issue it is a trivial set of policies. I’m reminded
of what happens when I discuss Singapore, which usually ranks number
two in the world in lists of economic freedom. People will often
respond by telling me about all the ways the Singapore government
intervenes. My response is “so what?” They could intervene in a 1000
different ways and still be vastly more laissez-faire than the US
government. Laissez-faire is a relative concept, and always has been.
I’ve read The Wealth of Nations, and Adam Smith is clearly a pragmatic libertarian.
Mar 8 2010 at 10:32am
So what do you have to say about this, Bryan?
Mar 8 2010 at 10:39am
I think part of the reason for this sort of response from Sumner is that people are talking past each other.
When libertarians criticize non-libertarians, they think non-libertarians are crazy about all these extra interventions that the U.S. does that Singapore might not do. Generally speaking, I don’t think you have to be a libertarian to think that the U.S. intervenes excessively. Those regulations and interventions are there because special interests know how to get them, not because non-libertarians want them. Take a look at Arnold’s recent post on “liberal elites” and you get the exact same misdiagnosis.
People who say they are not libertarian usually say that because they think of libertarians as unnecessarily dismissive of the state as an important social institution – and they’re thinking about roles that Smith was talking about, roles that the Singaporean state plays, etc. etc. Libertarians point to Singapore and say “maybe it’s a little more than I’d want, but that’s what real freedom looks like”. Non-libertarians look at a place like Singapore and say “that’s what a good, responsible, intervening state would be like if it weren’t dominated by special interests”. They’re largely talking past each other – it’s like non-libertarians embrace all the numerous American interventions. Just because you don’t like it doesn’t mean that we do.
Mar 8 2010 at 10:40am
I’d also note that what’s important about Smith is that even in the relatively underdeveloped, largely agricultural economy of his day (which arguably requires less intervention), he recognized important principles of public goods, externalities, etc. He might not have explicitly advocated every intervention that modern non-libertarian economists advocate, but we would argue that he THINKS ABOUT state intervention in the same way that we think about it, and NOT the way that libertarians think about it.
Mar 8 2010 at 10:42am
* it’s NOT like non-libertarians embrace all American interventions.
Mar 8 2010 at 10:52am
You may be correct in that most people don’t either know/care/want those excessive interventions. However, the libertarian frustration against progressives is precisely because progressives rarely, if ever, spend an ounce of energy trying to find the myriad web of complex regulations which serve no purpose other than corporate welfare.
Mar 8 2010 at 11:05am
I’m a bit confused by your statement that Adam Smith “THINKS ABOUT state intervention in the same way that we think about it, and NOT the way that libertarians think about it”, on grounds that he “recognized important principles of public goods, externalities, etc.” If I heard someone I did not know arguing against a bunch of state interventions, and then allow for some interventions in cases of public good or externality (and only in some cases of those), I would think that person is probably a libertarian. I certainly wouldn’t take any of that as evidence that the person was not a libertarian.
I would also say that I find many of the things on that list deeply unimpressive as evidence of non-libertarian sentiments. “Enforcement of contracts”? Police? Taxes and regulations specifically for the purpose of defense? These are standard fare of the “nightwatchman state.” And “rights of farmers to send farm produce to the best market” and “free exportation of corn” (albeit except in case of famine)? Isn’t that the definition of laissez faire?
Mar 8 2010 at 11:33am
It is only the very moderate progressive that would try to claim Adam Smith is not laissez faire. Proud socialists (of many stripes) consider Smith the ultimate bourgeois laissez faire economist – the one who started the centuries long defense of the capitalist state.
Mar 8 2010 at 11:49am
“If I heard someone I did not know arguing against a bunch of state interventions, and then allow for some interventions in cases of public good or externality (and only in some cases of those), I would think that person is probably a libertarian. I certainly wouldn’t take any of that as evidence that the person was not a libertarian.”
I suppose I just think the libertarian that takes public good and externality issues seriously is very rare. It’s not incompatible with libertarianism, but it’s deliberately minimized. Smith’s presumption in favor of free trade, a limited state, and the market isn’t something that only libertarians embrace. That’s not really a “libertarian” idea – it’s a classical liberal idea that a lot of people share. Are you under the impression that only libertarians get behind that facet of Smith? If you are then I guess we just agree to disagree on that one. I think it’s another case of talking past each other that I think libertarians have really deluded themselves on – the idea that they’re the only ones that have faith in the market.
I agree with your second paragraph that most of the list isn’t especially distinguishing. It’s the discussion of public goods and externalities that is what is really so impressive about Smith, not that he’d advocate public funds for a night watchman or contract enforcement.
It’s also important to note the different conditions that Smith was writing in. If I lived in Smith’s time I’m sure I would be more of a libertarian too. Context matters. What has always impressed me about Smith is the way he thinks through the issues, not necessarily the conclusions he reaches – which are obviously going to be context-specific.
Mar 8 2010 at 12:00pm
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Mar 8 2010 at 12:03pm
When I hear someone describe themselves as a “classical liberal”, I am almost certain that they are a libertarian (though perhaps one who doesn’t like the word “libertarian”).
It is certainly true that libertarians don’t think anything and everything is an externality or a public good, but I wonder who you’ve been talking to if you think that libertarians are in general against public goods and externalities. (This is true of some libertarians, of course. But then, almost no one thinks there should intervention in all cases of externality — e.g., the externality caused by unrequited love.) In my experience, the people who are sticklers about “intervention in case of externality” are libertarians — a non-libertarian will often abandon this position after much argument at all. That they don’t necessarily agree with you about what constitutes an externality or a public good (or what’s the best intervention in a specific case) doesn’t mean they’re not libertarians.
Mar 8 2010 at 12:18pm
I think the massive litmus tests that separate most modern day progressives from a hypothetical non-libertarian who worries about externalities center on redistribution explicitly for purposes of equalizing incomes and wealth rather than for funding classic public goods. Thus, progressive income taxes on the rich and large welfare for the poor — NOT Adam Smith. Indeed, the progressive income tax was a central plank of the Communist Manifesto. (Many conservatives would support VERY minimal welfare handouts but not redefining “decent standard of living” to lower middle class levels). Indeed, although the military is a classic public good, most left liberals would prefer to cut the military drastically and to expand the welfare state further. Again, contra Smithians broadly speaking. (Of course, libertarians and anarchists tend to be anti-military as well).
And really, all this debate about Smith is just signalling. Of course, most liberals would never accept Smith’s policies, they just point up his deviations from purity to embarrass libertarians.
Mar 8 2010 at 12:30pm
Mar 8 2010 at 2:10pm
I don’t think Sumner is getting “Blockian.” Sumner is just being Sumner. Saying that he is being Blockian is reminiscent of your “Hayek said the sky is blue” example.
Mar 8 2010 at 3:21pm
RE: “That they don’t necessarily agree with you about what constitutes an externality or a public good (or what’s the best intervention in a specific case) doesn’t mean they’re not libertarians.”
Certainly not – that’s why I made sure to mention general impressions only. Externalities and public goods are not what defines a libertarian – nor is dedication to the free market, for that matter. Lots of people accept the logic of public goods and embrace the free market. Some consider themselves libertarian, some don’t.
Honestly, now that I think about it I’m not sure what really differentiates a libertarian from others in the classical liberal tradition. I suppose primarily emphasis and self-identification. I think that’s often how ideology works – people’s actual thoughts are along a broad spectrum. Who they choose to affiliate with ideologically is informed by where they fall on that spectrum, but it’s as much attributable to attitude and emphasis as anything else.
Mar 8 2010 at 3:39pm
It’s not that libertarians don’t take public goods problems seriously. We just don’t trust people in the government any more than we trust people outside of the government.
If I suggested that you let me withhold a fraction of your paycheck at my own discretion so that I could deal with climate change, protect you from foreign invasion and stabilize the financial system, you’d rightly be very skeptical of such a proposal no matter what you think about public goods and externalities. Libertarians are just people who react the same way whether the person proposing such an arrangement is a politician or not.
If any group seems to disregard public goods problems, it’s people who so eagerly embrace political solutions to public goods problems. What non-libertarians nearly always miss is that increasing the power of government always introduces a new public goods problem: The people in the government may use that increased power in harmful ways. Anyone who expends the effort and resources to stop such abuses from happening bears the full cost of such efforts but receives only a tiny fraction of the benefit if they are successful. I’ve never observed any advocate for more government intervention actually address this.
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