Saturday, May 02, 2009

Nudging Revisited

Tibor R. Machan

Ideas do have consequences and this is quite evident with the current administration's adoption of what has been labelled--or mislabelled--"libertarian paternalism." It was two political economists, Richard Thaler and Cass Sunstein, who proposed the notion that what government should do is not intervene in the market forcefully, the way champions of the New Deal would advocate, but by establishing numerous incentives that would nudge people to do the right thing. (This approach is nicely laid out in Franklin Foer and Noam Scheiber, "Nudge-ocracy," The New Republic, May 6, 2009.)

The approach favored by Thaler and Sunstein is one that is gaining much respect from center-left liberals because it avoids the failed and not too popular policies of aggressive interventionism, the sort that in fact had a lot to do with America's current economic mess. (It involved, for example, requiring mortgage providers to offer very low rates, ones that would never have been possible in a bona fide market economy.) Not ever wishing to give up on the policy of messing with the market instead of leaving it to its own resources, left of center liberals are happy to embrace nudge-ocracy since it keeps a bunch of conceited technocrats in charge of society. And here is where the problem lies, a problem that I do not see any of the advocates of this new approach confronting.

Thaler, Sunstein, Foer, and Scheiber simply ignore one of the most important insights of modern economics, namely public choice theory. Advocates of nudge-ocracy divide the country into two groups--economic market agents whose judgments they do not trust because they are supposedly baffled by the myriad of choices available to them, versus the politicians and bureaucrats in Washington and other corridors of power who have the benefit of superior wisdom, foresight, prudence, and even omniscience with which to manage the economy.

But as public choice theory shows, first and foremost these politicians and bureaucrats are not disinterested, neutral parties but have agendas of their own. Furthermore, considering how difficult if not impossible it is to know just what objectives should be pursued and foisted upon the citizenry by government intervention--including by means of nudging--there is the additional problem that partisan, biased regulators (or nudge-ocrats) cannot help but advance their own priorities as they make policy.

Just consider how difficult, if not outright impossible, it is to know all the details of the public interest, the general welfare, or the common good. (The American founders got it right: the public good is simply for everyone to be free to pursue his or her happiness!) Interventionists suffer from the conceit that they know what people ought to choose and proceed to set up their structure of incentives accordingly. But this is a fatal conceit, as F. A. Hayek so aptly described it--these folks do not know how people should choose; they only imagine they know. They have all kinds of nifty ideas of what sort of insurance programs are best for us all, what retirements programs workers should sign up for, whether people should save or spend money, etc., etc. The nudge-ocrats make no secret of their confidence that they know it all for the vast numbers of Americans. But this confidence is entirely unjustified. The problem is that since they do not know what is best for us all, when they make general policy they cannot get it right. There is simply no way to get it right for millions and millions of people with their highly varied priorities and opportunities.

But the nudge-ocrats insist that they do know it and proceed to forge elaborate schemes to steer us in the direction they believe we all ought to aim for. Since, first of all, this is a myth and, second, they have goals of their own which they mistake for the goals of those whom they propose to nudge, they will mostly foul things up good and hard. (Now and then, of course, they can get things right, too--as with the broken clock that gets the time right twice a day!)

With just a bit of attention to Hayek's thesis of the fatal conceit and the Tullock-Buchanan's thesis of public choice, the error of nudge-ocracy could become evident. But the conceit prevents these folks from even considering these obstacles to their outlook!

Friday, May 01, 2009

Assumptions of Democracy

Tibor R. Machan

One interesting aspect of democracy is that today and indeed in most epochs some of its foundations are threatened and even violated by its application. For example, democracy assumes that everyone in society who isn't a criminal has a right to participate in political decision making. This is simply an implication of everyone's basic right to liberty. Taking part in political decision making may not be undermined just as taking part in work or education or any other peaceful conduct may not be undermined or forbidden. Free men and women have the right to liberty which includes the right to participate in peaceful political affairs. No majority may breach this.

Political democracy is but the outcome of the right to liberty--adults are not to be hindered in their politically relevant actions any more than they are in other kinds of actions. Their right to liberty implies this, plain and simple. And the democratic endeavors of free men and women have limits, just as do any other endeavors. Everyone is free to work or travel or build homes or write books but no one may violate the rights of others to do the same thing or anything else that's peaceful. So if democratic endeavors involve limiting the rights of others, those are not justified. Put simply, no one may interfere with another's rights to life, liberty, pursuit of happiness, etc., even if one has joined a majority of the population in doing so. That is what is implied by the system of basic rights everyone has in a free society--no one, not even a majority of the citizenry, may violate those rights. Thus democracy is limited by everyone's basic, natural rights to be free.

One can put this in very practical terms. No majority may pass some law or public policy that violates anyone's rights, the right to life, liberty or property, just as no individual, however powerful, has the authority to do this. Thus democracy has a rather limited scope in a country in which the law protects individual rights. Fareed Zakaria, in his book The Future of Freedom, makes a valid distinction between liberal and illiberal democracies, the former being constraint by the rights of individuals while the latter is not, so majorities may do whatever they will. It is pretty plain to see that the fact that a majority chooses to act in some way that violates rights does not make such violation any less wrong than if it were some powerful single individual who did. The famous case of the lynch mob illustrates this perfectly well. (In that case the majority breaches the imperative of justice to follow due process.)

All of this is important to understand in the current eagerness of politicians to make policies that violate individual rights, such as providing funds to bail out failing companies from the future taxes of the citizenry. No individual has the authority to commit another individual to fund such bailouts, not without the consent of those who will be required to pay. Coming together and forming a majority does not change this.

Unfortunately too few people appreciate that policies that have the backing of a majority do not thereby become justified. Sadly democratic theorists failed to make this point even though without it the very foundations of democracies are undermined. Just as a majority isn't authorized to abolish democracy, as it has done on numerous occasions throughout history--most recently in Venezuela where Hugo Chavez gained near absolute power through the so called democratic process--neither is a majority authorized to perpetrated anything else that amounts to the violation of individual rights. This really ought to be crystal clear in a country that has as its founding documents the American Declaration of Independence and the Bill of Rights and has experienced the injustice of democratically supported slavery.

Unfortunately the place where this would come to light in the education of a citizen, during primary and secondary education, the system itself contradicts the very point. America's primary and secondary education is founded on the belief in unlimited majority rule! How can those teaching in such a system be expected to explain to their pupils that democracy has limitations, namely, the rights of individuals (including those being unjustly taxed so as to keep the institution funded)?

Wednesday, April 29, 2009

Problems with Pragmatism

Tibor R. Machan

Given that on several occasions President Obama has made it clear that he is no ideologue but a pragmatist, it could be useful to consider what these terms mean. What makes someone an ideologue? What makes one a pragmatist?

Ideologues are those who approach problem-solving from a general framework which they or someone they trust have found to be sound, at least in the long run. A Marxist or utilitarian or libertarian could each be an ideologue by bringing to the table certain principles that will guide the way he or she will solve problems. Most of us are ideologues about some things—for example, we tend to believe that people have rights and when we go about solving our problems, we must not violate these rights even if it seems convenient to do so. In matters of political economy there can be ideological thinking with a certain general orientation, so that, for example, in approaching the current economic mess bailouts will be unacceptable because of a firm belief in private property rights. Or imposing equal burdens on the citizenry will be considered proper, whatever the results. And ideological thinking can sometimes degenerate into dogmatism, lack of thoughtfulness.

Let me detour for a bit here. Sometimes “ideological” means “blinded by preconceptions or presuppositions.” It could also mean being guided by ideas that hide one’s true motives. But the most common use of “ideology” means “a general viewpoint.”

Now what about pragmatism? This outlook was forged by people who are very skeptical about any general viewpoint, any set of general ideas or principles, so that they embrace, instead, a flexible outlook. Thus they make it possible to do nearly anything they find appealing, no holds barred. A pragmatic politician, for example, will champion whatever policy that seems to him or her workable, practical, never mind any principles of ethics or politics that the policy might violate. An example would be someone who advocates a massive government stimulus package by which to try to solve the current economic mess regardless of whether this policy violates the notion that only those who are responsible for the mess ought to be burdened with the cost of solving it. This latter concern would show one to be bound by principles and pragmatists reject this. (Not even logic is treated as a firm system of principles in pragmatism—such pragmatist philosophers as C. I. Lewis, for instance, argued that logic is a mere invention the rules of which we may bend when we like.)

In the current political climate to be pragmatic is often seen as a mark of sophistication because unlike ideological thinking it looks open-minded, flexible, and freewheeling (unconstrained by notions laid out in a written document such as the U. S. Constitution). Pragmatists generally consider such loyalty a mark of laziness when contrasted with their open-mindedness. But pragmatism also has serious liabilities. It is, to begin with, very difficult to apply and can make it fairly easy to rationalize bad conduct and public policies. That's because no one can tell ahead of time what will work to solve the problems at hand, thus allowing for any option whatever. Why should we exclude theft, for example, if no principles are defensible, or torture?

If principles are excluded as valid means for guiding conduct, why would even the most dastardly policies be objectionable? Only principles, based on past experience and careful reflection, can give us sensible guidance. So, in fact, pragmatists rarely if ever stick to their pragmatism. Instead they tend to cherry pick their principles. In our time we see this with how righteously friends of the Obama administration criticize the Bush administration's use of water boarding, of torture, as a means to try to achieve the worthwhile goal of gathering important information. In this case, it seems, some principles would be binding on us all.

In other words, what being pragmatic makes easier is to switch principles in mid course. Professing to be pragmatic liberates one from the limitations of personal integrity--when principles serve one's purpose, then let's use them, but when they stand in one's way, toss them.

Unfortunately some of those who are invoking pragmatism in their thinking and public posturing are well enough educated so as to gain the upper hand in debating the issue of what approach is most appropriate when it comes to governing. Few folks can handle the cleverness of Mr. Obama and Co., when they claim to be pragmatic while also opposing torture, for example, on principle! In fact, however, these clever moves are mostly ways to escape responsibility for one's ideas and policies. They cover up fundamental confusions in one's thinking and in how one sets out to govern, instead of making governing sensible and coherent.

Tuesday, April 28, 2009

Torture and Pragmatism

Tibor R. Machan

Torturing someone involves inflicting pain and misery on the victim in the hope of obtaining something he or she is unwilling to give up. The purpose can vary from simple cruelty, as when youngsters on the playground torture one of their kind to see the reaction, to seeking information from the victim that may save the life of some innocent person. The current concern with, for example, water boarding falls within the second category.

In either kind of cases torture as a rule must be avoided. That’s just part of civilized conduct. But is it always morally wrong? In very rare cases it would not be. This is when it’s used against someone whose information could save innocent people from carnage.

In a civilized society, however, there is no room for torture as official public policy, even when someone may deserve to be punished for a vicious crime or fails to help the authorities to rescue innocent victims. This latter is, of course, the sort of situation when it is most tempting to make official use of torture. Nonetheless, it would be wrong to make use of the method even then. It is a basic feature of a civilized human community to prohibit the use of physical force against someone other than in certain rare cases of defending innocent people. No offensive use of physical force is justified.

In the current debate about whether the Bush administration’s authorization of the use of water boarding was morally--and should have been legally--wrong, the case against torture stands, as a general principle. What is odd, however, is that the practice is being attacked by people in President Obama’s administration since the president has quite often explained that he is a pragmatist and eschews ideology, by which he must mean that he has no principled objection to any practice if it achieves a worthy purpose. That is what is meant by “pragmatic,” the refusal to be bound by principles and caring only about results.

So if some uses of water boarding yielded valuable information that might be used to rescue innocent victims of terrorists, the Obama administration would have no basis for objecting to it. The central tenet of pragmatism is never to discount anything as a method for achieving some valuable goal. It if works, it is then permissible. This is one reason why granting former Vice President Dick Chaney’s request to make public all the information on the uses of water boarding could be important. For if water boarding did in fact yield valuable information, then by the pragmatic approach advocated by President Obama it could be considered proper. And then the criticism of the Bush administration on the basis of its use of torture would fall apart since by their own standards Obama & Co. would have to approve of torture if it works.

Of course, one problem with pragmatism is that it makes it permissible, morally and politically, to use whatever policy one likes or believes might be of some use. Ahead of time it is never possible to know for sure if a policy is going to work--that remains to be seen. The point of a principled--if you wish, “ideological”--approach to actions, private or public, is that it uses what we have learned in the
past to form certain general principles that would guide our conduct at least until they have proven to be unworkable. For example, the dictum “Honesty is the best policy” is based on the widespread experience that lying gets us into trouble while honesty doesn’t. No, this is no absolute guarantee against a different outcome in the future but it is a good reason, nevertheless, to avoid lying.

Whenever a politician or indeed anyone proclaims to be pragmatic, the most reliable expectation from that is that the person wants no principles to constrain his or her actions. Carte blanche! And the plausibility of this stance comes from the fact that now and then, under very strange, exceptional circumstances, general ethical or political principles will not work. But as the saying goes, “Hard cases make bad law,” meaning, exceptional instances should not be generalized.

One thing is for sure--you cannot claim to be a pragmatist and also uphold a principled stand against water boarding or other forms of torture. For by your pragmatic outlook, if water boarding or torture may work to some benefit, you should use it. So it looks like the pragmatic critics of the Bush Administration’s policies vis-à-vis torture, including President Obama, have no basis for their objections. Since ahead of time no one can know whether water boarding is going to work in this particular case, why not use it then?