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Link Archipelago

November 11, 2009

Winds of Change: Competitive Gov In The UK

November 11, 2009

A Thousand Nations regular Sconzey sends us news from the UK–editor

Jeremy Clarkson. He’s an automobile “edutainment” show co-host, author, columnist, and Prime Ministerial candidate. He’s irreverent, infantile, hideously politically incorrect–the British love him. He rails against the nanny state, burdensome regulation and taxation. He offends truckers, he offends all. He is the vox populi–the demagogue, giving voice to every Brit’s inner “Little Englander” negative-libertarian streak (although I doubt he self-identifies as such).

In his latest spiel he strays into unusual territory (very unusual for a Brit!)–competitive governance. Clarkson complains:

It’s a lovely idea, to get out of this stupid, Fairtrade, Brown-stained, Mandelson- skewed, equal-opportunities, multicultural, carbon-neutral, trendily left, regionally assembled, big-government, trilingual, mosque-drenched, all-the-pigs-are-equal, property-is-theft hellhole and set up shop somewhere else. But where?

You can’t go to France because you need to complete 17 forms in triplicate every time you want to build a greenhouse, and you can’t go to Switzerland because you will be reported to your neighbours by the police and subsequently shot in the head if you don’t sweep your lawn properly, and you can’t go to Italy because you’ll soon tire of waking up in the morning to find a horse’s head in your bed because you forgot to give a man called Don a bundle of used notes for “organising” a plumber.

You can’t go to Australia because it’s full of things that will eat you, you can’t go to New Zealand because they don’t accept anyone who is more than 40 and you can’t go to Monte Carlo because they don’t accept anyone who has less than 40 mill. And you can’t go to Spain because you’re not called Del and you weren’t involved in the Walthamstow blag. And you can’t go to Germany … because you just can’t.

The Caribbean sounds tempting, but there is no work, which means that one day, whether you like it or not, you’ll end up like all the other expats, with a nose like a burst beetroot, wondering if it’s okay to have a small sharpener at 10 in the morning…

Where indeed? He reels off this list of countries that he believes are as equally unpleasant as Britain, bemoaning the lack of anywhere with a pleasant climate, a liberal jobs market, socially permissive values, and yet, that’s nevertheless cheap (in terms of regulatory burden) to move to.

Wait, I know just the place… and it’s got a sea-view too…

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Hayek To Olson: Democratic Sclerosis

November 11, 2009

Via @Openworld, Amity Shlaes in Bloomberg Markets:

“‘Emergencies,’” Hayek wrote, “have always been the pretext on which the safeguards of individual liberty have eroded.”

For a number of decades the main thing about Hayek seemed to be that he was wrong. Britain did head to the left, far to the left. After the war, the U.S. also institutionalized government planning in new areas. Yet neither Britain nor the U.S. went socialist or trampled personal freedoms.

But this low estimation of Hayek fails to appreciate his central thought: the economic damage is subtle and is evident only over time.

Expanded health care, which the Democratic-controlled Congress is attempting to adopt, provides the best example. In 1964 the Democratic Party platform document contained a passage on health care. “We will continue to fight until we have succeeded in including hospital care for older Americans in the Social Security Program and have insured adequate assistance to those elderly people suffering from mental illness,” the platform said.

At the time, the idea seemed radical. Something beyond Social Security for seniors? This was the new, final benefit. But once a hospital-care program was in place lawmakers decided that wasn’t enough, and added doctor visits to the benefits list. In later years they expanded yet more, including, under President George W. Bush, the inclusion of Medicare Part D and prescription drugs in the offering.

Hayek’s Prescience

Even that didn’t suffice, which is why House Speaker Nancy Pelosi and Senate leaders are trying to ram through a vastly expanded public health program this month. The various health- care bills, with their proposed mandates on individuals and their new taxes on wealthy earners or on gilded health-insurance policies, are probably something Lyndon Johnson himself never envisioned.

But Hayek did. Hayek understood that a good decade where government expansion seems to stall — the 1990s — doesn’t mean government won’t expand when the next crisis comes.

The recent pattern of following a war and a financial collapse with the creation of a new entitlement is a perfect example of the Hayekian dynamic in action. No doubt, a new health-care program would be only the first in a number of government incursions, no matter how Republicans do in the midterms.

Amity’s analysis is excellent, but at the end she veers off-track, failing to pursue her ideas to their inevitable depressing conclusion:

Hayek was such a dire fellow that many tend to resist his ideas. Even those of us with serious concerns at seeing a great portion of the economy tip into the public sector were buoyed this weekend by the anniversary of the fall of the Berlin Wall. If a big thing like the Wall can come down, then surely it won’t be impossible to kill off a small thing like the surtax on gold- plated health plans.

I and plenty of others think that Hayek is wrong. The U.S. won’t necessarily tip into socialism. It will eventually again embrace markets. Too bad we’ll all have to endure the long wait to find out if we’re right.

The Berlin Wall fell because the barrier to customer choice could not hold up against consumer pressure. It was a victim of competition, beaten fair and square by democracy. But there is nothing yet effectively competing against decaying Western social democracies, nor will there be until we open the next frontier. Just like any huge entity which would rather focus on enjoying its power rather than innovating and competing, the US will not embrace markets until it has to.

Unless you have some specific theory as to why things will move in a good direction if good people don’t act, waiting is not much of a strategy. In this case, unfortunately, theory says the opposite. The time for waiting is over.

Reflections on the Berlin Wall, The Sequel: Towards a Hierarchy of Moral Outrage

November 10, 2009

A few years ago when I was still running schools I did an analysis of all the leading AP World History textbooks, and none of them described the crimes of Stalin and Mao. There were only a few paragraphs saying something like “it was alleged that many people starved during this period” while continuing to praise the idea of communism as noble. Even today, most college-bound high school seniors in the U.S. have never heard of the 20th century communist mass murders. We are outraged when the Iranian president denies the Holocaust, but essentially all of mainstream K-12 and university education in the U.S. continues to conceal the much larger crimes committed by the communists.

The fact that the academic left has failed to take responsibility for their complicity in the nightmares of communism is consistent with their ongoing lack of perspective on appropriate moral outrage. The issue of intellectual integrity, and freedom of inquiry, remains a profound issue in the academy, despite denials to the contrary. Suppose we state as a proposition:

  • Moral critiques of capitalism and big business are more welcome and pervasive in academia in 2009 than are moral critiques of statism and the concept of the coercive nation-state.

Would anyone claim that this proposition is false?

And yet governments, per se, are almost always more evil than are corporations, even bad ones. A few years ago I read an article titled “Bhopal: The Biggest Crime You’ve Never Heard Of,” a title that strikes me as absurd given that:

  1. Many people have heard of the Bhopal disaster.
  2. There are countless crimes routinely committed by governments that are far larger in scale.

Even the relatively unknown crimes of the U.S. government, as documented by Chomsky and others, dwarf the scale of the Bhopal disaster. There is no doubt that France has committed much larger crimes than did Union Carbide. And, again, whatever one thinks of the Bhopal settlement, it was an accident for which the company did pay victims some compensation. France refuses to acknowledge its even larger level of culpability in the Rwandan genocide, let alone pay any victims. Which is more “socially responsible,” and which is more criminal, Union Carbide or France?

If one moves beyond the crimes committed by the more benign (yet still very often lethal) governments such as U.S. and France to the regimes of Stalin, Mao, Pol Pot, or even the “mild” Tito, who murdered more than a million people, then the notion that Bhopal is the “Biggest Crime You’ve Never Heard Of,” is about as insightful as calling Lesotho the “Most Powerful Nation on Earth.” How could someone even claim such an absurdity if they knew anything about other major crimes that are rarely talked about?

A reasonable, quick-and-dirty sketch of a more legitimate hierarchy of moral outrage might start with:

  1. The leaders and ideologies of really nasty nation states: Stalin, Mao, Hitler, and Communism and Nazism.
  2. Those ideologists and apologists for the nastiest nation states (with respect to communism, a significant percentage of 20th century academia.)
  3. The leaders and ideologies of only normally nasty and incompetent nation-states: for instance, France and India with their normal militarism and socialism.
  4. Those ideologists and apologists of these only normally nasty nation states (with respect to soft Franco-socialism and Nehruvian socialism, this includes probably 99 percent of 20th century academia and most founders and leaders of NGOs).
  5. The leaders and ideologies of the relatively more benign nation-states: Scandinavia and the Anglo-American nation-states, which are relatively more market economies so at least they alleviate poverty and human misery while also committing routine nation-state crimes (putting Scandinavian market-based welfare states and Anglo-American market-based corporatist nation-states together is complicated, but for now let’s lump them together).
  6. Those ideologists and apologists of the relatively more benign nation-states (on the intellectual side, pretty much everyone except the anarcho-capitalists).
  7. Bad corporations, the very worst of which have probably done less harm than all but the very most benign of nation-states.
  8. Ideologists and apologists for bad corporations (which include many right-wing and libertarian ideologues who deny the bad corporation stories)

I could go on into more nuanced forms of crime, but my main point is that despite the legitimate need to criticize bad corporate behavior, as done so vigorously by many in academia, it should usually take place after more vigorous critiques of communism, socialism, and those who stupidly supported communism and socialism, and even then after critiques of the coercive nation-state per se.

It should be clear to readers of our blog that we are not against governance per se; we are against monopolistic or oligarchic nation-states and globally-enforced systems of nation-state oligarchies. We believe that it should not be an impossible stretch of the imagination to envision a world in which there is more choice with respect to the vendors of government services. As there is more choice, and more competition, with respect to the purchase of government services, we expect the monopolistic nation-state model to be less harmful to the human condition. We long to live in a world in which Union Carbide, or Blackwater, or Enron produced the biggest crimes on earth – if only the scale of “violent” aggression were no greater than the Bhopal tragedy!

The foregoing hierarchy of moral outrage presupposes that others are capable of the imaginative act described above. But as long as the existing system of nation-state oligarchy remains a de facto assumption, the routine crimes of monopolistic government will receive a free pass, with specific politicians and political parties receiving the blame rather than the global system of coercive nation-state oligarchy itself. Since Marx, academia has seen “capitalism” as a pernicious system. They need to learn to see the globally-enforced system of nation-states to be an even more pernicious system, one that is entirely unnecessary. In order to help others see this option, we have an obligation to create a theory of responsible, non-violent secession combined with norms of inter-community behavior suitable to a world of voluntary communities rather than coercive nation-states. A world of increasingly wealthy jurisdictions, competing efficiently to “Make Everybody Rich” will be a world with steadily decreasing levels of human suffering and violence.

Seasteading And The Wall Of Dirt

November 9, 2009

Today is the 20th anniversary of the Berlin Wall, and it’s worth reflecting on the connections between the famous event and the topics we cover here.  After all, Letting A Thousand Nations Bloom is, like communism, a political experiment (or rather a meta-experiment).  However, it is one of a profoundly different character.

Berlin WallThe Wall was a deep symbol of the inferiority of communism.  A successful political system does not need walls to keep people in[1].  The Wall was necessary, not because half of Berlin was prettier, had better resources, or better people than the other, but because one half had better rules.  And over time, the half with the better rules flourished compared to the half with worse rules.  That difference in quality, as with any product, created consumer pressure to switch.

The Wall thus represented the brute force attempt of the USSR, purveyor of an inferior product, to lock-in its customers.  It was literally, directly, physically a means of increasing the cost of switching government.  Which makes seasteading, in a very real sense, the anti-Wall.

In most cases there is no literal wall stopping people from expatriating, but our buildings and territory are locked into place by a Wall of Dirt.  One of the benefits of seasteading is that on the ocean, very large objects can move around relatively cheaply.  Hence seasteading reduces customer lock-in, because you can vote with your house, your factory, or your office building.  With countries competing for existing capital (in the form of buildings and platforms), not just new capital, the pressure on them to provide good services will increase[2].  And good old-fashioned competitive pressure, which broke down the Berlin Wall, will break down the current government oligopoly.

You can slow down competition, but it is an inexorable force.  It may take another twenty years, but eventually we’ll be able to celebrate the fall of the Wall of Dirt, and the creation of a world where even the foundations of our cities are free to move between competing political systems.

[1] A truly successful political system does not even need walls to keep people out, although perhaps a moderately successful one like modern western social democracies does.

[2] In another sense, however, seasteading will bring about the opposite effect from the fall of the Wall.  The lowered barrier to entry of allowing any small group to form a new country will lead to de-unification, rather than re-unification.

Drama on The Fall of the Wall and Communism

November 9, 2009

Two recent works stand out for me. If you haven’t seen it yet, get your hands on a copy of Von Donnersmarck’s film The Lives of Others. It’s about a ruthless Stasi officer who must put a dissident playwright under total surveillance. What follows is one of the most compelling and moving character transformations I’ve ever seen.

The other is Tom Stoppard’s play Rock ‘N’ Roll. It’s not as good as Arcadia–Stoppard’s masterpiece–but like The Lives of Others, it’s so thematically rich and philosophically insightful, I insist you see it.  Max, a professor of Marxism at Cambridge, visits his former student, Jan, in Prague. It’s 1971 and Husak has tightened the screws. Max is having a bit of trouble dealing with a bout of cognitive dissonance. His theory doesn’t match communist practice. And then:

Max: ‘From each according to his abilities, to each according to his needs.’ What could be more simple, more rational, more beautiful? It was the right idea in the wrong conditions for fifty years and counting. A blip. Christ, we waited long enough for someone to have it.

Jan: A blip. Stalin killed more Russians than Hitler. Perhaps we aren’t good enough for this beautiful idea. This is the best we can do with it. Marx knew we couldn’t be trusted. First the dictatorship, till we learned to be good, then the utopia where a man can be a baker in the morning, a lawmaker in the afternoon and a poet in the evening. But we never learned to be good, so look at us. A one-legged man showed up at my school once. He waited outside the classroom. It turned out that the man with one leg had come to say good-bye to our teacher. Afterwards, the teacher explained to us his friend lost his leg in the war, so as a special favor he’d been given permission to go and live near his sister somewhere in north Bohemia. ‘You see,’ our teacher said, ‘how Communism looks after its war heroes.’ So I put my hand up. God, I must have been stupid. I really thought it would be interesting for them, so I said in England anyone could live anywhere they liked, even if they had two legs. My mother was questioned and she lost her job at the shoe factory, but the point is the other kids in the class. They thought I was telling travellers’s tales. They couldn’t grasp the idea of a country where someone, anyone, could decide to move to another town and just go there. Suppose everybody wanted to live in Bohemia when their job is in Moravia! How would such a society work?

I also found Tom Rob Smith’s two novels to be quite good. Child 44 is a cracking good read. And Ian McEwan’s The Innocent is a tight, dark thriller about a botched effort to dig a tunnel under the Soviet controlled section of Berlin. Any other suggestions?

Reflections on the 20th Anniversary of the Fall of the Berlin Wall

November 9, 2009

Compared to my mainstream left-liberal friends, I feel obsessed with the issue of communism. I feel a tremendous sense of betrayal that leftist academics who aggressively advocated for communism, and aggressively attacked the free enterprise system, have not yet apologized for their mistaken judgments.

I spent most of the 1980s in academia, where the primary debates were between the communists and the socialists. Advocates of capitalism were marginalized and ridiculed; outright libertarians were outcast (except, say, at the University of Chicago economics department). At one point, while at Chicago, I met a student from the political science department at a lecture by David Friedman. We had previously met in a political science course, but seeing me at the lecture he joked, “This is like being seen in a whorehouse together!” Decent, responsible graduate students were not to be seen going to a libertarian lecture, even at Chicago: it was that simple. Meanwhile, discussions of whether violent revolutions were necessary for the (obviously desirable) transition to socialism were entirely mainstream academic conversation. Within academia up through the 1980s, discussions of revolutions in which violent death is routine were acceptable, but envisioning a society without legitimized aggression was disreputable. I wondered: Were these people insane?

Call me naïve, but after communism fell I actually expected that the thousands of communist academics would pull together to pay for a full page ad in the New York Times saying something like:

We’re so sorry; we were so wrong. There is nothing that we can do to atone for the profound mistakes in our judgment, less alone to bring back those millions who have died due to our stupidity, but we hereby salute those courageous individuals, such as Mises, Hayek, Friedman, and thousands more, who stood up to our persecution of them in the academy for the last several decades.

Do you remember seeing such a full-page ad? Please let me know if I missed it. If there are individual leftists who made such confessions, I feel obliged to give them full moral credit.

On November 9, 2009, the 20th anniversary of the fall of the Berlin Wall, it is appropriate to reflect on the extraordinary human capacity for delusion. It is now widely conceded that communist nations murdered tens of millions of people. According to R.J. Rummel, one of the most careful students of democide, communist governments murdered more than 140 million human beings, far more than the 20 million murdered by the Nazis. Yet despite these atrocities, intellectuals celebrated the communists over and over again throughout the 20th century.

The sociologist Paul Hollander, a Hungarian scholar who escaped from behind the Iron Curtain in 1956, subsequently built a career documenting these delusions. Here are a few choice quotations from Hollander on the delusions of intellectuals, in memoriam for those who died. They come from Hollander’s article “Judgments and Misjudgments” in Lee Edwards’ essay collection, The Collapse of Communism:

“It is noteworthy that the most favorable assessments of the Soviet Union prevailed during the early and mid-1930s, the period of the catastrophic collectivization, the famines, the Great Purge, the show trials, mass arrests and murders, and the consolidation of the compulsory cult of Stalin. . . . In a somewhat corresponding manner Western intellectuals’ admiration of communist China peaked during one of the most destructive and bloody chapters of its history: the Cultural Revolution of the late 1960s.”

“The Soviet system, according to Malcolm Cowley, the American writer, ‘was capable of supplying the moral qualities that writers missed in bourgeois society: comradeship in struggle, the self-imposed discipline, the ultimate purpose . . . the opportunity for heroism and human dignity.’ Leon Feuchtwanger, the German writer, rejoiced in the ‘invigorating atmosphere’ of the Soviet Union where he found ‘clarity and resolution.’ John Dewey compared the ethos prevailing in the Soviet Union to ‘the moving spirit and force of primitive Christianity,’ and Edmund Wilson confessed that ‘you feel in the Soviet Union that you are on the moral top of the world where the light never really goes out.’ J.D. Bernal, the British scientist, found ‘sense of purpose and achievement’ and was persuaded that ‘the cornerstone of the [Soviet] Marxist state was the utilization of human knowledge, science and technique, directly for human welfare.’”

“Particular leaders were also often grotesquely misperceived, among them Stalin, Mao, Castro, Che Guevara, Ho Chi Minh, and the ‘commandantes’ of Nicaragua. Sidney and Beatrice Webb considered Stalin ‘the duly elected representative of one of the Moscow constituencies to the Supreme Soviet . . . accountable to the representative assembly for all his activities.’ Anna Louise Strong was reminded by ‘Stalin’s method of running a committee . . . of Jane Addams . . . or Lillian D. Wald. . . . They had the same kind of democratically efficient technique, but they used more high pressure than Stalin did.’ Ambassador Joseph Davies observed that Stalin’s eyes were ‘exceedingly wise and gentle. A child would like to sit on his lap and a dog would sidle up to him.’ Franklin D. Roosevelt, no starry-eyed intellectual, after his return from Yalta . . . described Stalin to his cabinet as having ‘something else in his being besides this revolutionist, Bolshevik thing’ . . . this might have something to do with Stalin’s earlier training for the ‘priesthood.’ . . . ‘I think that something entered into his nature of the way in which a Christian gentleman should behave.’ Hewlett Johnson, the dean of Canterbury . . . discerned in Mao ‘an inexpressible look of kindness and sympathy, an obvious preoccupation with the needs of others.'”

Rummel estimates that Stalin was responsible for roughly 60 million deaths and Mao for roughly 80 million deaths.

In Alcoholics Anonymous, after one has become sober, one faces an obligation to seek out those individuals one has harmed. Indeed, facing up to one’s failures is a key to spiritual growth in most religious and spiritual traditions. This principle of human psychology rings true even for this secular humanist. May those academics still living who were intoxicated with the dream of a Marxist utopia step forward with some small gesture of atonement for their nightmarish misjudgments.

Link Archipelago: Fall of the Wall Edition

November 9, 2009

Health Insurance Mandate Creep Show: Coverage for Prayer, Amen!

November 4, 2009

In yesterday’s LA Times:

Backed by some of the most powerful members of the Senate, a little-noticed provision in the healthcare overhaul bill would require insurers to consider covering Christian Science prayer treatments as medical expenses…While not mentioning the church by name, it would prohibit discrimination against “religious and spiritual healthcare.” It would have a minor effect on the overall cost of the bill — Christian Science is a small church, and the prayer treatments can cost as little as $20 a day. But it has nevertheless stirred an intense controversy over the constitutional separation of church and state, and the possibility that other churches might seek reimbursements for so-called spiritual healing.

A couple weeks ago Tyler Cowen warned us not to forget the mandate creep. You may spread risk by coercing the young and healthy into the same insurance pool as the old and poor, but, he asked, what constitutes adequate coverage? Once a mandate is on the table, highly motivated coalitions will clamor for a piece of that pie:

A further problem is “mandate creep,” which we’ve seen at the state level, as groups lobby for various types of coverage — whether for acupuncturealcoholism and fertility treatments, for example, or for chiropractor services or marriage counseling…Because mandates don’t stay modest for long, health insurance would become all the more expensive. The Obama administration’s cost estimates haven’t considered these longer-run “political economy” issues.

“But ahhh,” so the democratic prayer treatment goes, “surely legislators will know real medicine when they see it. Surely they will know what constitutes reasonable coverage. After all, everyone knows chiropractors are quacks! The so-called mandate creep is a red herring.”

When the highly motivated few impose highly distributed costs on the many–this is a feature, not a bug, in democratic governance. (Cue Mancur Olson.) The LA Times article worries about the separation of church and state. I worry about the separation of democratic fundamentalism and state. I weep over the slow, steady erosion of freedom by millions and millions of $20-a-day prayer treatments. Spiritual healing today, subsidized sexual healing tomorrow!

700 Million Would Prefer to Emigrate

November 3, 2009
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Credit Gallup

So says a research report from Gallup based on surveys conducted in 135 countries over the last two years. What’s strange is the black and white thinking underpinning the survey. Gallup didn’t bother to ask whether respondents would prefer a world in which they could work, build wealth, and travel back and forth between their native homeland and where ever it is they find employment. Permanence is so final. It ignores the “sea turtle” trend where people leave their homeland (say, China) to study and start a career in the U.S., only to return back home in 10 or 15 years time with much greater human capital.

And yet it is sobering that so many would chose permanent emigration, just the same. The surveys also add some support for the cause of competitive government: 700 million is a huge, untapped, if poorly skilled labor market. These people don’t necessarily want to live in the U.S. or get into the E.U. They merely want a better life. Let us build a floating Hong Kong, or a Singapore in Senegal, and many will come to it.

[Hat tip: Richard Florida]