I gave two quotes last week and asked who said them. There were a number of answers and two people got both right.
Those who got it right were:
Steve Fritzinger
Steve Horwitz
The first quote was from Mussolini, the second from Franklin D. Roosevelt.
Now here’s why I asked. I hear people say often that the more complex a society, the more we need government to plan. As I wrote in the original post, Hayek argued that the opposite is true. I agree with Hayek.
I had seen the Mussolini quote many times. Indeed, the first place I saw it was at the start of a chapter of The Road to Serfdom. The chapter is titled “The ‘Inevitability’ of Planning.” Even if you don’t read or reread the whole book, I recommend reading that chapter to see Hayek’s argument.
Here’s part of Hayek’s argument:
Far from being appropriate only to comparatively simple conditions, it is the very complexity of the division of labor under modern conditions which makes competition the only method by which such coordination can be adequately brought about.
I hadn’t known of the FDR quote until someone suggested on Facebook that I read FDR’s 2nd inaugural address. That’s where I found the quote.
Postscript:
In researching this, I found someone on the Daily Kos admitting, and being troubled by, FDR’s admiration for Mussolini.
READER COMMENTS
Ted
Aug 10 2020 at 9:06pm
RE: the DailyKOS writer, it’s pretty clear he’s in fact arguing against (leftist) critics of Obama, who appointed someone they objected to to an agency position. The comments make that pretty clear.
So, no, he didn’t really have any problem with FDR & Mussolini.
Phil H
Aug 11 2020 at 12:33am
I’ll happily push back against this. In a more complex world, we need government to plan more. We also need companies to plan more, and individuals.
With companies, the obvious examples are those massive and sometimes global supply chains associated with the big retailers – Apple and Walmart and so on. But obviously the companies that do highly complex engineering, the Boeings and Airbuses of this world, must do incredibly complex planning because of the nature of their business. The difficulty that the UK is having unwinding its phone system from Huawei is another case in point.
With individuals, we now routinely balance complex financial products (mortgages), select from a bewildering array of education and healthcare options that were never available before, and choose careers unimaginable in the past.
In a world this complex, the government has to run just to stand still. It must become more complex (and probably bigger), not because it is doing more complex things, but because it is dealing with more complex citizens.
john hare
Aug 11 2020 at 4:46am
The necessity for companies and individuals to plan their own futures as best they can is hindered by the attempts of governments to tell them how to do it.
Phil H
Aug 11 2020 at 5:56am
Such is the ideological claim. I understand it. But on the surface, it isn’t true. Governments today are much bigger and more intrusive than they were 200 years ago; people’s lives are also better and richer.
MarkW
Aug 11 2020 at 6:52am
Governments today are much bigger and more intrusive than they were 200 years ago; people’s lives are also better and richer.
People’s lives are better and richer because of the incredible amount of market-driven economic growth that started with the industrial revolution, not because government has become bigger and more intrusive. But also compared to the 1930s or even 1960s, there many ways that life has become better and richer because the government has become much less intrusive over time, for example:
Jim Crow laws are gone
Laws against interracial and gay marriage and sex are gone
The military draft was ended
Home-schooling is legal (as is home-brewing as is home-growing of marijuana in many states)
The airline and trucking industries were deregulated
Fireworks are legal in most states (they weren’t when I was a kid)
Divorce is much more readily obtainable
Involuntary commitment to asylums is greatly reduced
Both FDR and Nixon imposed wage and price controls — something that would be unthinkable now
Government enforced eugenics is also unthinkable now (did you know that between 1907 and 1963 over 64000 Americans — mostly women — were forcibly sterilized and that Hitler cited these practices in support of his own eugenics programs?)
And there is more–that’s just a list off the top of my head during my first cup of coffee.
john hare
Aug 11 2020 at 6:54am
The lives are not better and richer because of government planning. It is because of millions of people making decisions that benefit them personally and the rest of us indirectly. Some government is necessary. Unfortunately it spirals out of control rapidly and detracts from progress.
AK
Aug 11 2020 at 7:13am
This argument tends to be made a lot, especially in regards to tariffs. People love to point to the late 1800s to justify why we should have higher tariffs for better growth.
But, if you really look at the data, tariffs most probably did not cause that growth, and may have hindered it instead.
Garrett
Aug 11 2020 at 9:32am
Do you agree with Caplan’s claim that open borders would double global GDP? If so, that is an example of government intrusion that is making the world about half as rich as it would be otherwise.
Jon Murphy
Aug 11 2020 at 9:50am
One must always look beyond the surface. We must avoid post hoc ero propter hoc.
The world is wealthier than it was 200 years ago, yes. But is that because of or in spite of government?
Mark Z
Aug 11 2020 at 6:00pm
There’s obviously a question of causality here: do larger governments foster more prosperous societies, or do more prosperous societies foster larger governments? I think it’s the latter. I even once out of curiosity did some cursory linear regressions on publicly available data from the world bank to see if GDP growth better predicted future growth in size of government or vice versa, and growth in GDP was in fact more predictive of than predicted by growth in size of government.
Garrett
Aug 11 2020 at 9:36am
This is a non sequitur. You’re saying people are more complex, therefore government must be more complex. But you’re not explaining why.
Phil H
Aug 11 2020 at 10:56am
Thank you, all. Rather than answer each post individually, I’ll put the answers together here:
First: post hoc propter hoc. Yes! I absolutely am committing that fallacy. And if that were the end of my argument, it would be a bad one. Of course, it’s not. But seeing as neither DH nor John Hare, to whom I was responding, made *any argument at all*, I didn’t really feel it was necessary to get into the long grass. Just a bit of basic correlation is enough to start the day with. The actual arguments must come later. But just a bit of basic, “Does the thing my ideology claims seem to be vaguely true on a global level?” is often a good place to start!
Second: Bad things governments do. Mark W – great list; Garrett – borders. Both excellent points. I agree those are bad things that governments do. BUT governments are not the only people to have done them. Mark W mentions divorce – that originated in the church. Involuntary commitment to asylums was previously done by families. Wage and price controls are the actions of many cartels. And borders? People have privately enforced borders for millennia. Putting those things into the hands of government opened them up to sunlight, and ultimately ended them. The process wasn’t pretty, but I see no evidence that in the long run, government is the factor that *increases* e.g. involuntary commitment. Quite the opposite.
Third: AK’s point about 18th century growth – only people who don’t know their history say that. 20th century growth was much much better than 18th century growth.
In general, here is the challenge for all of you: Make more than half an argument.
Half an argument says this: government is bad.
A complete argument would have to say this: government is worse than the alternative.
John Hare
Aug 11 2020 at 1:07pm
I thought I was responding on your lack of points I have seen considerable government hindering progress and quite little government assistance of progress.
KevinDC
Aug 11 2020 at 1:08pm
Hey Phil –
I don’t agree with your defense of using the post hoc fallacy. Simply saying “the person I was responding to didn’t make an argument for their views” does not somehow make it okay to offer up a logically fallacious reply.
Second, I think it’s more than a bit misleading to say David didn’t make an argument. Misleading (rather than literally false) due to the fact that David did, in fact, reference the relevant argument in his post. He pointed out that to people like Mussolini, the greater complexity of society made it more important for government to have greater control over the planning of society, and that Hayek argued the opposite was true – the greater complexity of society made the prospect of central planning more and more infeasible. He endorses Hayek’s argument, provides a quick quote from it, cites where it came from, and advises the readers to go check out the argument in full. This makes your complaint that David didn’t make an argument seem more than a little disingenuous.
And it’s not as though Hayek’s argument and its implications are some kind of contentious libertarian ideology. His argument has been accepted and endorsed by people of all political stripes, including by left wing thinkers like Joe Stiglitz in his own contributions to information and economics:
Also, you said:
I disagree. I think this is a uniquely bad place to start. Everyone thinks that the claims of their ideology seem at least vaguely true on a global level. (Or at least, if there is anyone who thinks the claims of their own ideology seem obviously false on a global level, I’ve never met them!) Indeed, the phenomena and correlations you were pointing to which seem vaguely true to you, seem obviously false to me. Maybe they only seem that way to you because your ideology is skewing your interpretation. Or maybe that’s true of me. Or both of us! In any case, as a starting point, this seems highly unpromising if the goal is to make any progress.
Lastly, regarding your claims about half arguments and challenges to make a full argument – this, again, seems more than a little disingenuous on your part. Blog comments are very limited formats – a handful of paragraphs at most. They best they can do is usually elucidate a claim, but providing a full argument is usually beyond their scope. Which is why what people usually do is point to a fuller statement of the arguments and where to find them. David did that here by referencing a chapter of Hayek’s book. And I know in previous conversations with you here, I and others have in fact pointed you towards works that contain the arguments in full. I know at various points I’ve pointed you towards Jeffrey Friedman’s Power Without Knowledge: A Critique of Technocracy and Thomas Sowell’s Knowledge and Decisions, the first two volumes of Hayek’s Law, Legislation, and Liberty and The Fatal Conceit, a few books by James C. Scott (particularly Seeing Like a State), multiple academic papers, and more. And as far as I can tell, you haven’t followed up on any of these. And it’s fine if you don’t have the time or inclination to read up on the literature – but if you’re going to ignore the bodies of work that are being cited and instead insist on blog comment explanations instead, I think you’re making things a bit too easy on yourself.
David Henderson
Aug 12 2020 at 9:45am
Thanks, KevinDC. Your arguments are well stated and to the point. I might have held back on the disingenuous language. But other than that, this was a very tight argument on your part.
KevinDC
Aug 12 2020 at 11:01am
Thank you David, and you’re right, I shouldn’t have used terms like disingenuous. That was unduly cranky on my part. I think “unfair” might have been a better term, or perhaps “unreasonable.”
My apologies, Phil, for the uncharitable snark on my part.
Phil H
Aug 14 2020 at 11:37pm
Sorry it took me ages to get back to this. Busy week.
Yeah, I messed up there. Sorry to DH, I really just missed that Hayek quote, which I agree is a substantive argument.
“I think this is a uniquely bad place to start.” – I like this as an idea. It’s pleasingly counterintuitive. And I take your point, that from the myriad of things that happen in the world, it’s ridiculously easy to find confirmatory evidence.
In fact, I misstated what I was doing. My suggestion that big government have made the world better isn’t just a naive grabbing of confirmatory evidence. I said “basic…seem to be vaguely true,” but it’s not that; it’s a considered position based on ideas from Weber and Sen and lots of development economists and historians. It is, though, empirical, and empirical in an important way: I think recognising the big “sweep of history” facts accurately is super super super important for organising our thinking. The thing about growth is an important example – there is a persistent canard about high growth in the 18th and 19th centuries, and it massively twists this debate. If people knew that 20th century growth was much higher than 19th century growth, there wouldn’t be nearly so much confusion. Understanding the basic truths of history is really vital, and prior to any claims about causation.
The “half an argument” thing. It’s not really to do with how much of your scripture I’ve read. You’re right, I haven’t read enough, and no doubt I can learn more. But if these guys have concepts that I don’t know then you should just be able to tell me what they are. Or at least the educators on this blog should.
But part of the reason I’m here arguing is because it is my job to make my arguments better – which is why I say thank you for pointing out my errors. And it’s your job to make yours better. That quote once again talks about “agglomeration of information” – and once again you’re going to tell me that they don’t *really* mean agglomeration of information, I should understand it in the light of eight other books, or maybe ten. But if they didn’t mean agglomeration of information, they really should have used other words, and so should you. It’s not hard! If the problem is that data on consumer preferences *does not exist yet* because it is only formed at the time of purchase, you can say that! I just did! And Hayek certainly did. Which is why, when Hayek (and anyone else) says “collection of data”, I think we should read them as meaning collection of data. And when they say information does not yet exist, we should read them that way. I will take them at my word, and I’m glad when you take me at mine, and correct me when I’m wrong. (I will not respond by telling you that I’m actually right, you just have to go and read ten books before you can understand me.)
@DH, yeah, of course, anyone who disagrees with you is disingenuous. You and your Republican commander in chief really share a style of argument there.
KevinDC
Aug 15 2020 at 11:34am
Hey Phil –
David was not calling you disingenuous. He was gently chiding me for having used that term, which is why in my reply to him I agreed it was wrong for me to have said it and apologized to you for doing so.
Regarding what Stiglitz means by “agglomeration of information”, you predicted I was going to say a number of things but…nope, I wasn’t going to say any of that 😛 Stiglitz does indeed use information in the trivial sense. My point here was that even from the perspective of a very left wing guy like Stiglitz (and also socialists like G. A. Cohen, to use another example), even the issue of mere information is decisive on the central planning debate. Stiglitz argues that having enough information for central planning to work is impossible, even in principle. Hayek’s arguments and insights go a step further than that, transcending the relatively trivial questions regarding information, and talking instead about more complex issues like knowledge. So the argument’s I’m referencing aren’t simply part of what you rather weirdly call my “scripture,” unless you define “scripture” to mean “anything I’ve read.”
Regarding your insistence that certain terms should simply be read in their apparent, plain English definition – here, I think you’re making a crucial intellectual mistake. Let’s pivot to a slightly different author as an example – Karl Marx. Marx’s writings are full of terminology that have normal, everyday meanings, but in his writings are used in a way that are the product of both his time, and his own intellectual framework and vocabulary. Terms like “alienation” or “contradiction” or “value” or “wages” in Marx’s writings can be read in their ordinary, everyday meaning and create a coherent impression of what he’s saying – but an incorrect one, which would lead you to completely miss the point of his arguments. To properly understand Marx, you need a full understanding of Hegelian philosophy (including Marx’s specific understanding of it, the teachers he learned it from, and how he distinguished his own philosophical framework from Hegelianism while retaining much of its language) and things like the specifically Ricardian definition of terms like “wages” and “value,” and what it means for wages to rise or fall in Ricardian language. Just as one example, you can have a situation where workers are earning larger paychecks, prices are falling, and workers can buy more and more things – but would still be described in Marxian terminology as “falling wages” for workers.
One could read Marx with the insistence you have here, eschewing the idea that we need to study the full background of ideas, their context, understand the specific use of terminology, and declare that “when Marx writes ‘wages will fall’ we should read that at face value.” But doing so would simply be poor and sloppy scholarship. Sometimes if you want to understand an idea you need to absorb the full bodies of work around it and the intellectual history and context in which it was written and how the terminology was formed.
Also, you said:
Well, yes, but you’re missing the point I was getting at. I agree that I and others can indeed tell you what these concept are. That’s the easy part! Merely telling someone what the concept is, can be done in the space of a blog post or comment. But that’s not what you asked for. You were asking for full on arguments – which is far beyond the scope of either. For example, one of the books I referenced, Power Without Knowledge, the mere concept behind the book can be readily understood with just a snippet from the dust jacket:
I would expect exactly zero people to be convinced of anything simply by reading a description of the concept, though. What’s far more convincing is the hundreds of pages of arguments and evidence the book contains. But I’m not going to attempt to sum up said arguments and evidence here. I’d only be able to give a very limited, very partial description, that would lack any nuance, and have lots of holes and obvious objections. If you’re genuinely interested in the argument, you know where to look.
(And as a postscript, I really do find your use of a term like my “scripture” rather bizarre. Jeffrey Friedman, for example, is a political scientist who is a staunch critic of libertarianism, and in the book cited he’s extremely critical of economists and the economics profession. Joseph Stiglitz a leftist economist who is also very critical of libertarian ideas. Jame C. Scott is an anthropologist and identifies as a Marxist. G. A. Cohen was a hardcore socialist. I could also have mentioned other socialist writers like John Roemer, who in his book A Future for Socialism also agrees with and endorses the idea that government economic planning is impossible, even in principle. Etc. Part of the point I was attempting to demonstrate is that the impossibility of central planning due to both information and knowledge problems is widely accepted by thinkers of a broad variety of academic disciplines and political ideologies. This in turn, I think, undercuts your previous statements about these issues merely being examples of “libertarian ideology” or some kind of personal “scripture.”)
(Second postscript – to paraphrase a quote from someone I can’t remember to attribute – if I’d had more time, I’d have written a shorter comment 😛 )
Danno
Aug 12 2020 at 2:12pm
“First: post hoc propter hoc. Yes! I absolutely am committing that fallacy. And if that were the end of my argument, it would be a bad one. Of course, it’s not. But seeing as neither DH nor John Hare, to whom I was responding, made *any argument at all*”
Tu quoque fallacy
MarkW
Aug 12 2020 at 8:53pm
BUT governments are not the only people to have done them. Mark W mentions divorce – that originated in the church. Involuntary commitment to asylums was previously done by families. Wage and price controls are the actions of many cartels.
The point I was making was that in many ways the U.S. government has become less intrusive over the past 90 years or so. Lives are richer because in these ways, our governments do actually leave us alone more than they did before during the bad-old-days of the early-to-mid 20th century.
That said, in your response, you’re missing the point (which fans of government power usually do) that monopoly on force that government possesses and wields in the service of the powerful and well-connected is what makes the abuses possible. Nobody could legally commit a relative to an asylum without legal backing. Religious organizations may have prohibited divorce for their adherents (as I believe the Roman Catholic Church still does) but the only punishment the church can impose is excommunication. Only when religious groups gain control of government power can they actually legally prevent divorces. And with cartels and monopolies — those, too, have nearly always depended upon the state to provide both the muscle and imprimatur of legitimacy. OPEC is, after all, a cartel of governments. Medieval guilds had their monopolies enforced by the king, and modern guilds here (like the AMA, state bar associations, and others) do the same with prohibitions against anybody practicing law, medicine (or in some places whitening teeth, braiding hair or doing interior design) without the imprimatur of the guild insiders who control the various state licensing boards.
Thomas Hutcheson
Aug 11 2020 at 8:26am
This seems like the wrong level of generalization. Maybe we need more planning of some aspects of life in order to avoid more intrusion. Wouldn’t a (planned) tax on the net emission of CO2 be less intrusive than a “green new deal?” Could we not develop a (planned) market in NYMBY buy-outs to avoid more intrusive zoning and land use intrusion? Would a vastly expanded (in some way planned) system of employer-sponsored immigration be less intrusive than what we have?
robc
Aug 11 2020 at 9:55pm
You are arguing for the good (or at least the slightly better) and ignoring the perfect which is sitting right there in front of you.
Tom DeMeo
Aug 11 2020 at 9:38am
More complexity requires more planning. The question is whether it also requires increasing the scope of what the public plans. More people means more utilities, roads, schools, etc… It means more transactions at the Town Clerk’s office and more building inspectors. Does it also mean something else? That’s where we need to be very very careful.
Jon Murphy
Aug 11 2020 at 9:49am
Planning by whom? We want plans by the many, not by the few
Phillip Nagle
Aug 11 2020 at 6:00pm
We should never forget that FDR’s National Recovery Act (NRA) was pure fascism. We were very fortunate that the Supreme Court quite correctly found it unconstitutional, something I am not sure they would do today. The day the Supreme Court did away with the NRA, is the day we won WW II.
Mark Brady
Aug 12 2020 at 2:51am
“The day the Supreme Court did away with the NRA, is the day we won WW II.”
But the federal government implemented extensive control of the economy, including a draft, price controls, and high taxation, during the Second World War.
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