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Political Creationists

August 4, 2010

Bryan Caplan approvingly quotes Don Boudreaux:

And It said “Let there be higher wages. And there was.”

[…]

So why are so many people enthusiastic about statutes such as this one [the living wage]?

Proponents of such legislation are economic creationists. They do not grasp the fact that beneficial economic arrangements emerge – and emerge only – without being designed by an altruistic higher power (namely, government). Widespread prosperity and economic order are taken on faith as resulting from the conscious intercession of a sovereign superior whose incantations, ceremonies, and commands work miracles.

Yet Don Boudreaux any many other libertarian economists constantly (as I have commented) commit Political Creationism:

And It said “Let there be better policies. And there was.”

[…]

So why are so many people enthusiastic about policies such as this one [laisse-faire]?

Proponents of such legislation are political creationists. They do not grasp the fact that political arrangements emerge – and emerge only – without being designed by an altruistic higher power (namely, economics professors). Widespread harm to prosperity and economic disorder are taken on faith as resulting from the lack of intercession of an enlightened superior whose arguments, essays, and rhetoric work miracles.

We’ve had many decades of brilliant rhetoric and clear exposition of the principles of a free economy by giants such as my grandfather Milton Friedman, Ayn Rand (still selling hundreds of thousands of copies a year), more recently Ron Paul, and of course, Don Boudreaux himself. Yet our economy is far from free, and getting worse. Furthermore, thanks to public choice economics, we now have theoretical and empirical evidence for why democracies produce bad policies. We can no longer plead ignorance and stick with the gut hypothesis of Political Creationism – that better policies will come from wise economics professors speaking louder and more often. As I said in a recent talk to a Silicon Valley audience:

Those of you who are into politics and cheering for the red hats or the blue hats or whatever, I don’t know how to say this gently so I’ll just say that you’re looking at things totally wrong, futzing with little implementation details and bringing on new software architects when the reason things keep breaking is that the OS is 234 years old and buggy as hell and we’ve known for decades that the basic algorithm is wrong.

If anyone should understand why we need to fix the damn incentive system and not just cheer, it should be economics professors, particularly free market ones. Yet my experience is that Political Creationism is the rule in this group. Which is disappointing – it’s as if public choice theory is only real to them when they are teaching it, and not when they are writing letters to the editor or coming up with strategies for change.

Fortunately, a good strategy like seasteading, one which can withstand the public choice arguments that Boudreaux’s strategy cannot, does not require convincing economics professors. Instead of trying to provide the public good of economic education, we can offer the private good of low-regulation real estate. As the market grows, costs come down, which further grows the market in a virtuous circle, like any new technology.

And once we have truly free cities competing for citizen-customers, it should delight economists, especially libertarian ones. Perhaps they will even, finally, believe that their own theories apply not merely in the classroom, and not merely to criticizing politics, but also to fixing the problem.

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8 Comments
  1. xout permalink
    August 5, 2010 3:26 pm

    Public choice theory applies to Mr. Boudreaux too, since an anti-democracy stance would be comparable to an anti-George Mason one.

  2. azmyth permalink
    August 5, 2010 4:18 pm

    But where do the people come from to live in these new communities? Why would other governments not attack and annex them? There has to be a basic level of appreciation for the problems with big government and a societal acceptance of those who want to do something about it. I believe the median voter hypothesis is about 60% right. A democracy will not have significantly different levels of freedom than their voters want. Governments will not support or allow devolution unless their voters support it as well. In order to get voters to support policy solutions like those advocated on this blog, they need to understand why competition in governance is so important.

    Don Boudreaux is tireless in his efforts to educate both his students and the world at large about basic economic reasoning. He writes letters to the editor of major newspapers several times a week in an effort to reduce the staggering level of economic ignorance in the media.

    One of the great debates in economics was between George Stigler and Milton Friedman. Stigler argued that everyone optimizes their behavior based on the current state of knowledge, so exhorting them to be more laissez-faire was a waste of time. Friedman instead spend a great deal of effort educating the public with his lectures and books. I do not think that effort was in vain. Educating the masses is a hard discouraging slog. There are always new ignorant generations of people coming into the world, but science also advances one funeral at time. Which way the flow of history will take us depends on those willing to relentlessly advance their ideas, both in academia and in the public forum. What you are doing on this blog is vitally important. It is work that needs to be done, but it is not the only thing that needs to be done to build a free society.

  3. August 6, 2010 3:36 am

    Good post. Given that it’s policy all the way down, some policies (those that change incentive structures) are better than others (those that change other policies). I don’t think we should eliminate the latter entirely; we still need educational efforts to accomplish the former. But we should be investing most of our resources in the former type of policy.

    How would you complete this phrase? “Just as prices are determined by supply and demand, so policies are determined by _____.” This could be a nice one-liner showing the need for changing incentives, not policy.

  4. Peter St. Onge permalink
    August 7, 2010 11:04 pm

    I think your analogies are off. Boudreaux is arguing for an action (deregulation) which he expects, correctly, will automatically lead to good things. Similarly, you argue for an action (foundation of seasteads which you also hope, correctly, will automatically lead to good things.

    In contrast to you both, and Don’s point, the statist argues for an action (passage of living wage) which he falsely hopes will lead to good things (here, presumably, higher incomes for the low-human capitaled of the world).

    I’m sympathetic to your point that working outside the system might be more productive than playing the democracy game, but I think Don is being no more ‘creationist’ than you.

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