I think it is fair to say that my free-market views are more extreme than most. Non-economists do not appreciate how well markets work. Most other economists do not, in my opinion, appreciate how poorly government works.
Naturally, I expend great effort trying to articulate my outlier views and to sell them to others. But sometimes one can have doubts about that effort.
1. Hansonian doubts. If I am such an outlier, why does that not make me wrong?
2. Cowenian doubts. Just because I believe something, why do I wish others to believe it? Maybe I am better off if others believe something that I regard as false. (I believe that when Cowen uses the term “Straussian” he means something like “keeping ideas obscure in order to limit their spread.”)
Maybe if everybody believed that we would be better off with competitive government instead of democracy we would lose a lot of social capital.
READER COMMENTS
Alex J.
Sep 30 2010 at 7:21am
The costs of being wrong about how well or poorly the market as a whole or government in general work are very low. Therefore, common systematic error is plausible, and I hope your Hansonian doubts are allayed.
While any hopes of getting most people to share your beliefs via your efforts are quixotic, I doubt that’s really your motivation. When the costs of error are low, people hold beliefs because they appeal to their instincts (free market bad) or because they signal virtuous belief (government good) or in-group affiliation. On the other hand, a disagreeable sort might want to signal that he understands how things work despite their counter-intuitive or politically incorrect nature.
I once read that Hobbes’ Leviathan was harmed by men claiming to be “Hobbists”, not because they found the book to be especially informative, but in order to become “an object of scandal”. If you’re going to have doubts about your views, I’d be careful about taking positions just because they’re controversial, rather than taking positions because they are most likely to be true, in spite of the fact that they are controversial.
(Though, wanting to be the object of scandal is the least-bad reason to be a Hobbist.)
RPLong
Sep 30 2010 at 7:33am
Economics is about meeting human’s resource needs in order to ensure human survival. Free markets are the only ethical way to achieve that, not to mention the single best, most efficient way to do it.
So don’t have doubts. The truth isn’t a popularity contest and the truth always wins out in the end.
dave smith
Sep 30 2010 at 9:25am
Caplan confirmation: Maybe you are an outlier because you are smarter/know more than everyone else.
fundamentalist
Sep 30 2010 at 9:29am
Regarding Hansonian doubts, why assume that the majority is right? That’s odd epistemology. If you use logic and evidence to arrive at truth, then there is no reason to doubt your truth just because others haven’t got it yet. After all, entrepreneurs make money by knowing things that others don’t. Very few entrepreneurs make money, but making the money proves them right and the majority wrong.
As for Cowen doubts, you have empathy for your fellow man and want him to do well, also.
I think history shows that capitalism has always been unpopular with the majority. If you assume the Dutch Republic instantiated the first capitalist nation, capitalism was very unpopular. But the Dutch didn’t have a democracy; they had a Republic run mostly by wealthy businessmen who had the courage and confidence to ignore the will of the majority. In the early days of the US, when we were still a republic, the Constitution and the business elite who dominated politics ignored the will of the majority. But as we have become more of a democracy and the restraints on the majority have disappeared, the majority have finally been able to kill the capitalism that they have hated for so long.
Ryan
Sep 30 2010 at 10:02am
I’m convinced that the type of free-market appreciation and skepticism of centralized power that you (and I, incidentally) have will never be mainstream. A few reasons for this:
1. The workings of the market are much harder to understand than simple decrees of government. If Congress passed a law to “stop China from taking our jobs”, many would take that at face value.
2. People aren’t rational, as Caplan has discussed at length. It’s next to impossible to combat faith in government with a hyper-rational exposition on free markets.
3. Most people aren’t job-creators, and mathematically, the majority can’t be. They are only equipped to consider the demand side of most economic circumstances.
4. As Hanson would say, people can’t separate what they believe from what they wish others to perceive that they believe. Progressivism sounds caring, irrespective of utilitarian outcomes.
Dewey Munson
Sep 30 2010 at 10:08am
“Non-economists do not appreciate how well markets work.”
This brings up 2 questions of importance.
1.What is a non-economist?
2. What is a market intended to do?
The second question is most pertinent since it falls to an “economist” to make the market work.
To the point. If money is an economic goal it works.
If JOBS are the goal it fails.
Increase of “Output per man hour” is and has been a valid goal for my 44 years in manufacturing. Our current situation emphasizes the lack of economic rules which will produce a desirable effect, so I ask:
Is wealth distribution a valid economic success measure?
Is a JOB for everyone a valid economic success measure?
As to Non-economists – aren’t we all?
Several weeks ago you sponsored a review of economists by other economists without a conclusion
I should make at least one suggestion.
We earn during i/3 of our lives. If our money retained its “store of value” then I could be using money from my earning years instead of Social Security which is an inefficient effort to compensate loss of value.
The Gold Standard which economists hate would exert some control over our fiat money. My financial friends dislike this because they depend on the steady rise to make money.
RPLong
Sep 30 2010 at 10:12am
Assuming non-rationality violates the fundamental assumption of economics. Moreover, believing that people are just stupider than those who know better isn’t a very pleasant value to hold.
Steven Landsburg points out that most people simply don’t have enough time or desire to learn about EVERYTHING. Consequently, they focus on the things that are most important to them and the rest suffers.
So most people don’t dwell on free market economics (a shocking though to us economists, right? :p). This explains why most people don’t understand market functions as well as we do.
It’s not irrationality, it’s scarcity of time dedicated to acquiring knowledge. You can’t expect everyone to know everything all the time.
Les
Sep 30 2010 at 10:35am
Arnold asked: “If I am such an outlier, why does that not make me wrong?”
Because it did not make Archimedes wrong, or Euclid wrong, or Newton wrong, or Adam Smith wrong, or Einstein wrong, or Edison wrong, or Steve Jobs wrong.
N.
Sep 30 2010 at 11:33am
Dewey Munson, I like your point. It seems obvious, but I don’t think I’ve heard it expressed quite so succinctly.
It also brings up a question that I would like to see addressed here at some point: what is a practical policy stance to be taken in regards to economic losers in times of structural market shifts? Answers should take into consideration the extent to which those losers are (a) disgruntled and (b) each have a vote.
Rebecca Burlingame
Sep 30 2010 at 12:01pm
Always know what is important: not necessarily each of your (or anyone’s) specific solutions, but that this is the prime time to present ideas for people to choose from when systems break down . The more solution possibilities that people have to work with in the years ahead, the better the new (eventual) equilibrium might be.
Philo
Sep 30 2010 at 1:39pm
“If I am such an outlier, why does that not make me wrong?” Was this question inserted to elicit praise from your audience? Let me join several others (above) in pronouncing you smarter, more knowledgeable, more thoughtful, and more honest than the great mass of people whose disagreement with you makes you an “outlier.”
“Maybe I am better off if others believe something that I regard as false.” In this case that is very unlikely; what “loss of social capital” do you have in mind? Do you really doubt that you (and most other people) would be better off if society were more libertarian?
Matt
Sep 30 2010 at 3:12pm
The advice given to new entrepreneurs seems to apply with special force here.
“Don’t worry about competitors stealing your ideas. If the ideas are any good, you’ll have to shove them down people’s throats.”
Michael Strong
Sep 30 2010 at 9:25pm
Berreby’s “Us and Them: Understanding Your Tribal Mind” provides a good pop sci. evolutionary psychology account of coalitional psychology. Academia vs. business are one of the deepest “Us and Them” tribal divisions in contemporary life; see Richard Hofstadter’s “Anti-Intellectualism in American Life” for a summary of the intellectual’s indictment of business as of 1964.
My theory of why the intellectuals are so anti-capitalist is largely based on coalitional psychology, combined with the “Why Altruists are Punitive” argument from my book. I think that intellectuals sincerely believe themselves to be altruists, and thus are instinctively punitive. When that is combined with a coalitional logic, in which even their hormones tell them to gang up to attack the businessmen, one is left with an intellectual class that has a biological disposition to search and destroy any intellectual who says positive things about business. After all, the second greatest human pleasure, after sex, is ganging up to attack our enemies. And free market economists are not doing their share to punish the enemy, therefore they too, must be punished.
As a consequence, very few intellectuals are very free market, because they are attacked as an alien species when they are. The immune system of the tribal ideology of academia activates the antibodies as soon as it perceives “the other.” As a consequence, often intellectuals who are somewhat free market attempt to pose as civilized citizens of the normal galaxy of intellectuals rather than be exposed as weirdos. This, in turn, inhibits thought, the expression of thought, and the advancement of understanding.
A few weirdos just go ahead and keep thinking through the implications of voluntary activity vs. large-scale coercive activity, and they discover the interesting world of competitive governance. Voila!
P.S.; I’m still very interested in reading a detailed intellectual biography of how you moved from MIT Keynesianism to libertarianism to competitive governance. Ideas? Experience? Maturity? Empirical data? A sudden flash of insight?
Chris Koresko
Oct 2 2010 at 6:30am
Arnold: I think it is fair to say that my free-market views are more extreme than most.
How much is that perception biased by living in a city in which the President’s approval rating is roughly double what it is for the country as a whole?
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