Economists Dissing Economics

The entire “discipline” of macroeconomics, with its over reliance on math, equations, aggregates and equilibria, is essentially a farce.

Unlearning Economics

For whatever reason, I found myself compiling a list of 20 or so quotes, mostly from well known economists, criticising mainstream economics. What’s most interesting is that although the quotes come from a wide range of economists, with different political views and from different times, they seem to have a lot in common.

The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.

― Joan Robinson

Economics is extremely useful as a form of employment for economists.

― John Kenneth Galbraith

The only function of economic forecasting is to make astrology look respectable.

― John Kenneth Galbraith

…the discipline of economics has yet to get over its childish passion for mathematics and for purely theoretical and often highly ideological speculation, at the expense of historical research and collaboration with the other social sciences.

― Thomas Piketty

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Bring Back the Despots

Let me state this at the outset: foreign policy is hard.

It is particularly hard for libertarians and non-interventionists when global conflagrations are on the rise, as they are today. So I don’t pretend to have the answers. Better to profess ignorance than to claim to have all the knowledge. Someone once called that wisdom.

When an awful atrocity like the beheading of an American journalist occurs and is broadcast proudly, tauntingly to the world by the barbarians who comprise the Islamic State, it is tempting to cast the the absurdly complicated conflicts of the Middle East in black and white, good vs. evil lines. No doubt, ISIS is evil. Basic human decency and threads of common morality running through disparate cultures are in accord with the need to confront this type of evil directly. In times like these, emotion almost always prevails over sobriety, and here the appropriate emotional response is likely the visceral one.

And I am not even going to say that sobriety should necessarily prevail here. My instincts upon hearing of the beheading of James Foley were to unleash holy hell on militant jihadists the world over and to rigorously condemn the global obsession with “multiculturalism,” the phenomenon which undoubtedly provided the space for such an absurd circumstance as a British citizen’s decapitating an American civilian on YouTube to materialize. By encouraging large quantities of Muslim immigration and requiring little to no assimilation in host countries, the EU and UK have created pockets of Muslim populations in Europe who do not see themselves as European or Western, and are quick to revive tendencies such as anti-semitism. The predictable results of un-assimilated populations experiencing poverty from their preferred atomization from western society is what we’re seeing today: thousands of European and British citizens flocking to Syria and Iraq to join the cause. This is maddening, and makes one want to do something about it. And yet, once the emotional rage subsides, as it inevitably does, it behooves us to consider the broader implications of whatever retaliatory measures we select.

It is beyond ridiculous that the great existential threat to human decency of three years ago – Bashar Assad – is now poised to be our great ally in the existential fight against ISIS. Likewise with Iran, who will undoubtedly launch a pseudo invasion of Iraq if ISIS manage to conquer Baghdad. Your average western citizen could be forgiven for suffering from a major case of logic whiplash: recent history has preached the necessity of confronting the evil of Iranian hegemony and the specific threat to global freedom that would entail should they acquire nuclear weapons capability. Even more recently we have been told that Assad “needs to go” because he was a vicious and evil dictator prone to the comprehensive abuse, torture and murder of his own people. And before we found out about the immediate threat to our way of life posed by ISIS, we endured the spectacle of Russians on the march.

The same voices that wished us to intervene on behalf of “the rebels” to counter Assad’s vicious brutality in Syria are now admitting that we in fact require the Assad regime’s assistance in confronting ISIS. What I take from this is that it’s best to not rush to judgment about who the good and bad guys are in a cauldron as unpredictable and volatile as the Middle East. The more difficult takeaway is the one nobody likes to verbalize, yet everyone is beginning to understand to be the hard truth: that as long as the Middle East is engulfed in a vicious Sunni-Shia civil war (going on 1300 years now) and religious doctrine that (for whichever of the numerous reasons) breeds only contempt for western values and economic prosperity, the only bulwark against chaos and anarchy is despotism.

It feels vulgar to even express this sentiment, but the Middle East was simply less volatile and less of a threat to the West (and really, even to its own people) when it was largely governed by despots and tyrants. Saddam Hussein, Hosni Mubarak, Bashar Assad and Moammar Qaddafi were/are terrible human beings who abused their own subjects, but they were also effective corks on their respective nations’ bubbling discontents. Remove the corks, as the United States did in Iraq and Libya and the Arab Spring served to do in Egypt, and the resulting vacuum is filled not by democratic pluralists but by fundamentalist Islamists. I think we have enough evidence now to conclude this to be more than a trend. It is an inescapable reality.

I think the only thing that can heal the Middle East in the long run is the injection of some Deng Xiaoping style market reforms, so that those subjected to such violence and suffering can instead have a little wealth and prosperity. But until the Middle Eastern Milton Friedman emerges, the only way to stop the madness over there, unfortunately, is to bring back the despots. I wish it were not so, but it is. In the meantime, I think the responsible non-interventionist position is to continually highlight the perils of even trying to figure out which rebels are “good” or “moderate” and to discourage emotional reactions that lead to irrational commitments to nation building or other general efforts at imposing order on a permanently disorderly part of the world.

Ultimately, when it comes to the Middle East our position should heed the wisdom of Socrates and admit the truth: “we know nothing.”

 

Administrative State

For a hundred-plus years the progressive vision has sought to overturn the constitutional vision of separation of powers; of separate branches in conflict. Because the latter vision makes it purposely hard to enact laws, the former vision became frustrated and sought to find ways around the separation of powers. Hence the administrative state: a fourth branch of government that gained power through Congress willfully ceding their own. The oppressive administrative state under which we live today is answerable to no one, behaves as if it’s the aristocracy, and fights like hell to protect itself rather than serve the people it is tasked to serve. It is the nature of bureaucracy.

And progressives love it because a) it angers those of us who take constitutional democracy and separation of powers seriously and b) because it allows their preferences to be enacted on the country with minimal resistance. Congress won’t pass cap-and-trade? There’s an EPA for that. Congress won’t pass labor laws you like? There’s an NLRB for that. Won’t pass campaign finance restrictions? The IRS will take care of it. And on and on.

The thing they don’t realize because their ideological vision begins and ends with “must attain power,” is that as the administrative continues to grow and grow, often it’s going to establish entities that progressives hate. The DHS, the war on drugs, the militarization of police, Pentagon bloat…. this is all the result of Republicans using the administrative state to their liking (not to mine!) and to the chagrin of progressives.

People need to wake up and realize that, like the UK ceding most of its autonomy to Brussels via the EU, we are doing the same with the administrative bureaucracy, which is unelected, unaccountable, and makes most of the rules we have to live under quietly and in darkness.

Hypothetical Hospitals

Kelli Goff at The Daily Beast asks the question:

I’m injured in a plane or car crash. There is one hospital located in the town in which the crash has taken place. Do you believe the hospital has a right to refuse to treat me on the basis of race, and that the government has no moral or legal imperative to require the hospital to treat me?

It is a powerful hypothetical, but one wholly contradictory to her own worldview, if she bothered to examine the issue critically. That worldview which meets its every encounter with limited government or libertarian philosophy with the rejoinder that says “your philosophy sounds great, and probably works as an academic exercise, but it just doesn’t work in the real world.” Well Kelli, if we’re dealing in “real world” empiricism, I might ask the same of your hypothetical: who, in the real world, would ever deny treatment to a plane crash victim on the basis of race, in 2014 America? For one, we have federal laws that require hospitals and physicians to deny no one access to emergency care, and these are not race-based but comprehensive statutes already on the books. More important is the impossible to measure yet difficult to argue with reality that an overwhelming majority of Americans of every race, creed or religion would not hesitate to treat a wounded victim in an emergency.

Libertarians understand that the perfect should not be the enemy of the good. We accept that ideological principle must cater to the world as it is, not as we wish it was. Thus, we accept the necessity of the Civil Rights Act, especially in the real world of 1965. But whether through evolution of general human understanding and tolerance, or through federal intervention to prevent institutional racism, the real world of 2014 is not that of 1965. Yet that does not mean the libertarian project of this century aims to dismantle the CRA. It does mean however, that the social realities of today have improved and therefore the tendency to suggest that worst case scenarios would be imminent as a result of libertarian policy is unhelpful.

Accepting real world realities means libertarians wish to unwind the federal government’s involvement in civil society at the margins first. Every libertarian trains his eye on reducing the bureaucracy’s influence over education, for example, long before he lands (if he ever does) in the realm of undoing all federal involvement in society. Medicaid is an awful program rife with waste, replete with fraud, and provides no measurable gain in health or general well-being when compared to those in similar economic strata who do not participate in the program. Still, libertarian efforts to block grant this money back to the states are efforts to allow more flexibility and thus provide greater service at less cost, rather than an attempt to destroy the program in full or to literally take benefits from those most in need. Goff’s hypothetical is of a piece with the unwelcome habit of scaremongering; claiming the absolute worst possible outcomes would necessarily flow from pragmatic, nee real world libertarian prescriptions.

By always assuming the worst in the abstract, critics miss the obvious and tangible good that would flow immediately from many libertarian reforms. On the drug war, sentencing disparities, economic opportunity and educational choice, libertarians have been at the vanguard of these lonely efforts to buck the status quo and improve the lots of African-Americans. Unlike our self-anointed altruists of the left, whose prescriptions are paternalistic in their insistence that only the enlightened bureaucracy can solve your problems (i.e. “we’re smarter than you, let us plan your path out of poverty from remote Washington D.C.”), we mean to empower black Americans through more choice. Lower taxes and fewer one-size-fits-all central plans on healthcare and education. No more public monopolies on services but an extension of services through local competition and an eradication of public union thuggery. Ultimately, libertarians believe that black Americans have been promised endless aid in the form of other people’s money and that this has utterly failed to lift large swathes of blacks out of poverty. Why not try something different?

If ever given the opportunity, libertarian ideas can show the skeptics how our policy positions do not begin from the philosophical extreme of the ideology. Even it was our goal, anarchy wouldn’t be achievable overnight. And anarchy isn’t really our goal, not in the real world. So can we stop posing hypothetical gotchas against libertarianism that insist we operate from such rigid dogma? Politics is the art of the possible, even for libertarians.

The answer Kelli is, of course you would be treated. The question you should be asking is will my children be better off stuck in the public monopoly on education run by selfish, ‘me first’ union reps, or would competition and choice mean a world of advancement and fulfillment for the black community?

It’s not an easy question to demagogue, which is why it isn’t often asked.

 

Amash

On Tuesday Justin Amash crushed opponent Brian Ellis in Michigan’s third district primary, and made sure to let the world know how awful the establishment Republicans had treated him throughout this nasty campaign.

Those on the right who have a problem with Amash’s victory speech are either not familiar with the level of rancid demogoguery deployed against Amash by the establishment, or they just have a problem with libertarians.

Scores of beltway conservatives, from Joe Scarbrough to Aaron Goldstein to staffers at Daily Caller and National Review knocked Amash for a lack of decorum and suggested that his enmity for cheap establishment tactics and smears would redound negatively for the larger cause of conservatism.

Nonsense.

Amash sent a message to the Republican establishment that you better think twice before going after constitutional conservatives. The grass roots and the voters at large are on to the rigged game the establishment wishes to perpetuate. No longer is the conservative movement going to be a party to insider dealing, crony relationships or big business corporate welfare; in other words, conservatives are done with the Chamber of Commerce.

This tendency has been admirably consistent among conservatives since the rise of the Tea Party in 2010. It hasn’t always translated into insurgent primary victories for the Tea Party, but when it has, the winners have gone on to become immediate leaders in the Republican Party (see: Rand Paul, Mike Lee, Ted Cruz, Thomas Massie, Marco Rubio). The revival of constitutionalism on the right is the most encouraging development in American politics since 1988. It is a visceral reaction to crony capitalism and big government “compassionate conservatism.” And it is not going away any time soon.

But neither is the opposition. The Amash case is illuminating. After coming to Congress as part of the 2010 Tea Party wave, Amash immediately asserted himself as a principled libertarian-conservative, forming the House Liberty Caucus and endeavoring to record his reasoning behind every vote on Facebook in order to provide true transparency for his constituents. He has never missed a vote.

After nearly causing a bipartisan political earthquake in 2013 in his staunch advocacy against any intervention in Syria, House Republican hawks committed fully to his defeat this year. John Boehner and his allies were already on record as believing Amash to be an “asshole” and had removed him and other like-minded liberty Republicans from their committee posts following the 2012 election, but his efforts to thwart the NSA as well as the administration’s plans in Syria caused Republicans like Mike Ridgers and Devin Nunes (he of the “Amash is al quada’s best friend in Congress” infamy) to raise the volume on getting Amash primaried.

Enter Brian Ellis, a businessman who claimed to care more about the bottom line than the Constitution when it comes to making policy, who quickly racked up endorsements from elite Republican entities from the Chamber to Michigan Right to Life (based on an erroneous and scurrilous charge that Amash is pro-choice) and other crony interests who purport to espouse conservative ideals. Despite having an ample warchest and no compunctions about lying and smearing Amash in a scorched-earth campaign, Ellis had his ass handed to him and may now crawl back under whatever special interest rock from which he was chiseled.

Ellis’ campaign ran ads accusing Amash of voting mroe often with Pelosi and Reid than with his party, suggested he didn’t care about the unborn, and used his votes in favor of closing Guantanamo and against Iron Dome as proof of his sympathies for jihad.

Never mind that all of these charges were lies, that every vote he takes is grounded in ardent principle and strict fiscal conservatism, or that as the only Arab-American Republican in Congress the ads piggy-backing on Nunes’ claim amounted to cold, calculating racism.

Amash put his faith in the intelligence and wisdom of Third District voters, knowing that an informed and engaged grass roots will always triumph over a removed, elite establishment charge mounted in D.C. He also understood that libertarian and constitutional conservatism are waxing not waning on the right, and that a clear and cogent message highlighting the dead end that is big business corporatism would carry the day.

So forgive me if I do not begrudge Amash one iota his taking a few exultant jabs at the very sources of this nasty and libelous campaign. Ross Kaminsky agrees. The right wing establishment needs to be called out and shamed every chance we get, or else they’re going to continue believing that the grass roots are mere puppets to pandered to every other November. I say more elected Republicans should deploy words like “disgrace” and “obscurity and irrelevance” and “you owe me and this community an apology” the way Amash did in his victory speech. We can have decorum when the ideological war within our own party is won.

Social Politics

Progressives view American culture the same way that Vladimir Lenin viewed politics: “Who, whom?” Who will dominate whom? The rest is just noise.

Lenin’s understanding of political struggle turned out to be fatally flawed, as the twentieth century showed how societies are actually stronger when the operative impulse is less domination and more facilitation. Because what are democracies and republics if not vessels for facilitating free association and cooperation? Allied victory over totalitarianism was above all a triumph of capitalism over socialism, yes, but it was also vindication for a way of life over that of the martial collective operating with scientific efficiency and with one communal voice, visions shared by Hitler, Stalin, Mao, Mussolini and Roosevelt. The New Deal can be understood as one big effort to copy what Hitler and Mussolini were doing in the 30’s. Western elites and progressives were utterly enamored with Il Duce’s model in particular. What leftists of every stripe loved about these regimes was the way they used “science” to justify their vision and also guard them against criticism. Let the left and right argue over dogma; we disinterested observers are here with the science!Those wishing to turn politics into an empirical science are adopting a stealth approach to Lenin’s axiom. By claiming their so-called “pragmatism” will use disinterested and data-driven analysis to solve complex social problems, these wizards are promising an impartial politics of efficiency and prosperity attained through expert administration. But there is no algorithm that unlocks the secret to the free society. There is, however, that nagging question of “who, whom?” and still far too many who subscribe to the Hobbesian vision of nature that says man’s domination over man is the default condition of humanity. Those claiming the expertise have no expectation of landing on the whom side of the equation. And while we who stand athwart the collectivists know that Lenin’s question is ultimately wrong, we still must contend with the myriad forces that seek nothing less than total domination, even those who do so under the guise of disinterested civil servants.

Marx and the socialists were ostensibly defeated with the end of the Soviet Union. Communism’s ultimate discrediting was supposed to mean the end of history, when the superiority of capitalism was beyond dispute. But you don’t exist as a revolutionary movement for a century and a half and go quietly into the night, and socialism’s strictest adherents were never going to surrender their ideological commitments just because the Cold War ended. Rather, in their obscurity they re-evaluated where they had been successful and vowed to rise again against capitalism, through means other than purely economic. Thus do we see the utterly socialist aims of modern environmentalism, third-wave feminism and other movements of the anticapitalist left.* If they cannot dominate through economic doctrine, the war must be fought on the cultural plane.

Identity politics is just Marxist classism dressed up as enlightened diversity. The ultimate aim of Marxist-socialist theory was to give agency to disaffected and disadvantaged classes of people, and to encourage them to rise up and be heard in a world ostensibly dominated by rapacious capitalists. But as the economic prescriptions favored by these classes and their advocates proved utterlydisastrous, it was inevitable that the focus would shift from economics to culture. For it is just as easy to agitate on behalf of those superficially marginalized by race or gender as it is to do so on behalf of the poor. But what happens when such agitation is successful, as the cultural revolution of the 1960’s surely was in advancing equality under the law? Victory, right? Wrong. There is always be more oppression to fight, and always another injustice in need of eradicating. Thus is the great progress made on behalf of racial, gender, sexual and religious minorities deemed insufficient. It is not enough to ensure equality under the law; the new normal must be celebrated, not merely condoned. Thus does critical theory emerge and meld with postmodern instincts to treat truth as malleable. Moral relativism reigns. This is how modern academia comes to regard Israel as the enemy and Hamas as the victim. Truth is subordinate to injustice because facts are not as compelling as grievance.

Culture warriors understand a fundamental truth of human nature: we understand what we know and care about what we see. Economics escapes the average person’s understanding and concern because it is difficult for him to see it operate in tangible form. Culture, on the other hand, is ubiquitous. It is impossible to be indifferent towards culture because one is forever awash in it. And those whoinstigated the culture war in this country understandably became addicted to the psychic satisfaction that comes from expanding access to natural rights hitherto denied to certain people. (That the belief that successful movements for women’s rights and minority civil rights actually meant the initiation of new rights rather than the restoration of natural ones escaped them is another discussion altogether.) It makes sense then, that this social vanguard would continue looking for victims to unshackle, but at some point you just run out of victims, at least as far as the law is concerned. Suddenly we are concerned with a person’s “right” not to be offended, or we overcorrect to the point of seeing mysoginy everywhere. This is how suchabsurdities as #YesAllWomen and trigger warnings enter the lexicon.

And this new century of ours is particularly vulnerable to outright implosion if social politics continue to define us. Much of the advancement in tolerance, diversity and general acceptance is owed to the laudable impulses of the original culture warriors who came onto the scene in the 60’s. But just as Marxist economics failed because it lacked limiting principles, the culture wars will end badly because the agitators simply don’t know when (or don’t want) to stop. (Abraham Maslowwould agree.) In one respect, it is not hard to see why: playing identity politics and demanding new rights for an ever increasing number of victims will inevitably lead to bigger government and more bureaucracy. If it ain’t broke… That the aims of anticapitalists coincide with the culture warriors’ is also no coincidence. The desire to destroy laissez-faire through regulation does not meet pushback from those looking to invent new rights (right to healthcare, right to housing, right to food), usually because they’re the same people. And when the anticapitalists and social justiciars congregate – in academia, in federal bureaucracies, in Hollywood – the only thing that stands out is the utter lack of any actual diversity, that is, diversity of thought.

The cult of diversity has become so strong and pervasive that among young people in the 21st century it is now obviously safer to tow the line of superficial tolerance (i.e. to conform) than it is to express a heterodox opinion about something,especially something involving the hollow vapidity of our hallowed “diversity.” The word has literally come to mean the opposite of its literal meaning, as Daniel Hannan says. And yet, our future leaders are overwhelmingly consumed by the cult of physical (shallow) diversity. Millennials define themselves politically by social issues, not economics. It is a positional good, a way of signaling one’s status as a member of the tolerant, progressive, enlightened crowd, the group that shuns religion and tradition in favor of “science.” They are happy to tell you that they are better than you, owing not to any particular achievement or education, but simply to the fact that they are not the “other.” Despite marching in lockstep conformity of thought, they impugn their perceived enemies as hopeless and ignorant neanderthals, secure in the knowledge that their identity and worth are defined by what they are not.

It’s morality on the cheap; wholly unearned, but bolstered all the same by a profound sense of “being on the right side of history,” a Marxist trope if ever there was one. Culture matters, and caring about injustice is basic human nature. Much of the social progress that has been made in America and around the globe owes a debt to our friends of leftwing persuasion, even the virulent anticapitalists among them. But you must have a limiting principle, and leftists simply do not. The American Revolution was about restoring limiting principles to society, whereas the French Revolution had the Terror, the guillotine and ended in Napoleanic despotism precisely because there was no philosophical appreciation for such principles. The Jacobins believed they could remake the world entirely anew, that the past was irrelevant, tradition useless. The same phenomenon is again taking place today, only it is confined blessedly (for now) to the culture wars. Increasingly, these battles are bleeding into our politics, and that is a problem. Even worse, future generations are coming to view politics as merely an extension of cultural arguments, rather than of debate and deliberation on eternal matters like the composition of the state, the laws of economics, and the propensity for man to abuse power even when he doesn’t intend to.

If millennials continue to define themselves politically over the social issues they care about, this republic will be lost. The basic truth that 20th century tyrants understood about this country is even more profound today: America can never be destroyed by conquest, but only from within. The next few generations bear a heavy responsibility to not succumb to the cheap satisfactions and faux-morality of “social justice,” which is just a rebranding of class warfare in the most destructive sense. The kids need to get over themselves and their identity politics and understand that there is so much more to the relationship between citizen and state than a fleeting promise of more free stuff, like contraception. Whatever the government today grants you as your “right,” it can tomorrow take it away from you. Only our natural rights are sovereign and unassailable, and it is only the government that can infringe on those.

So this curmudgeonly millennial will end with a plea to his fellow generation: please stop with the identity and social politics. If Reason continues polling young people and continues hearing that they care less about economics and role of government than social issues, we as a nation are sunk. And as the carpenter said to Lord Business at the end of the Lego Movie, “you don’t have to be the bad guy,” so do I say “you don’t have to be the who, and we don’t have to be the whom.” Nobody has to dominate the other, culturally, politically, economically or otherwise. We are all equal under the law and free to live cordially in a pluralistic society that allows for wildly disparate opinions and perspectives. We are all “the special.”