Tuesday, October 13, 2009

Resisting Statism

Tibor R. Machan

 A recent exchange between Michael Moore, the filmmaker, and Sean Hannity, the increasingly famous commentator at Fox TV-News, went surprisingly well, considering how both men are widely seen as unrestrained hotheads.  Instead of badmouthing each other, this time they actually debated a few important points—at least gave it a try, although without complete success since both insisted on interrupting the other no matter how he pleaded to be heard out.

Nonetheless, some points came across from both, which is probably more than what happens in similar circumstances (ever since Crossfire ruined the art of TV conversation).  One particularly important point that came up and is worth exploring occurred when Hannity tried to make the case for restricting the scope the federal government, especially as regards the current efforts of Obama & Co., to practically nationalize the health care/insurance industry. (By the way, “nationalization” as National Socialism has taught us, doesn’t have to involve actually taking over and running an industry.  It can simply involve making various industries subject to extensive government direction, regulation,regimentation, supervision or, as some would say, nudging!) 

In reply to Hannity’s expression of concern about this prospect, Mr. Moore gave the perfect answer: We already have the US Postal Service, AMTRAK, all the national and state highways, public schools—including colleges and universities—and a myriad other state run endeavors—Moore actually included the military—throughout the country.  So, the implication came across clearly, surely you cannot make any kind of principled objection to doing the same with healthcare/insurance?  Especially when you already have Medicare and have had it for decades without it being seriously challenged by Republicans, the only opponents or critics of Obama’ plan who are worth considering in the eyes of someone like Michael Moore and even Hannity.

Moore is right, of course.  To object consistently now to what Obama & Co. are embarking upon it would have been necessary for the opponents to protest most of the statist measures Moore rattled off.  Why do the Republicans accept so complacently that the federal government runs a postal service? Moore mentioned that this is a vital service that benefits the poor and so it is fully justified. Actually, of course, by that account the federal government should nationalize the shoe industry and hundreds of others that clearly provide goods and services to poor folks.  All of agriculture would have to be removed from the free or semi-free marketplace.  Grocery stores everywhere would also have to become state enterprises.  Poverty isn’t decisive and freedom is better for it, anyway,that is statism.

The point is that Hannity and his anti-Obama pals just have no leg to stand on when it comes to objecting to the state taking over any portion of the society, having completely acclimated themselves to public institutions galore.  What about parks, forests,lakes, oceans, highways, streets, museums, theaters, and on and on,endlessly?  What basis is there for the highly selective, even arbitrary opposition to the government’s takeover of the society?  Only newspapers and churches are provided with a reasonably solid protection against this trend, and only so long as the U. S. Supreme Court escapes being packed by someone like the president who appears to believe that everything is the province of the state,just as it used to be under monarchies of the past and in certain places around the globe globe today.

Of course, the American Founders had a much better,principled, consistent answer to Mr. Moore and all the others who believe that the feds and other governments really should be running everything.  As they put it in the Declaration of Independence, governments are instituted so as to secure the rights of the citizenry, and that’s it.  Today a few legal theorists, like Randy Barnett at Georgetown University’s law school,and most hard-nosed—or as Harvard University’s Amartya Sen calls them, “no-nonsense libertarians”—are in the position to argue against Obama & Co.’s runaway statism, along with the more incremental sort that’s been around for decades if not centuries.  After all, the all-powerful state cannot be dismantled in one fell swoop, so despite the Founders’ efforts,America is still hostage to its statist past, not to mention to all those who never found much wrong with statism from the outset (e.g., Alexander Hamilton).

What Mr. Hannity has to learn is to bite the bullet and fess up to the insight that human liberty is indivisible.  Unless this is realized, the statists are always going be able to have the logical upper hand.
Brooks Gets Giddy

Tibor R. Machan

So David Brooks attended a neuroscience conference in lower Manhattan and got giddy from all the youth taking part in works in this relatively recent field. We learn this from his Tuesday, October 13, 2009, column in The New York Times.

Most of his report is fluff but he does say at one point something provocative and basically misleading. He writes, that “Economists, political scientists and policy makers treat humans as ultrarational creatures because they can’t define and systematize the emotions.”

In fact economists and the rest simply posit the generalization--mainly for purposes of thought experimentation--that people act rationally and by this they mean nothing much more fancy apart from the fact that people normally think about how to achieve their goals, whatever those goals may be. That is the extent of the rationality these folks assume and so the idea that they “treat humans as ultrarational creatures” is bunk. (Why, by the way, “ultra”?)

From such folks as the leading Austrian economists Ludwig von Mises to Milton Friedman, economists tend to work with the conception of human action as instrumentally rational, yes. All this means is that we tend to consider the most effective means by which to achieve our ends. Hey, even lower animals do this much “thinking”. There is nothing ultra rational about it.

Milton Friedman made it clear, in his seminal paper on economic methodology, that the assumptions with which most economists work are not strictly realistic but more along lines of the assumptions we make in applied geometry about straight lines, circles and such. None of those in real life are perfect but when we analyze the world with the aid of such geometrical objects, we assume them to be perfect. Not much harm in this if we mind our ways. Economists and such are indeed advised not to take their theoretical assumptions too literally but they do the work of making the world more understandable, just as the assumption would that David Brooks probably pays attention to what he writes when he writes his columns (even though in fact he may get up for a cup of coffee or even to answer the phone in the middle of it all).

But Brooks seems to be gaga about findings the show that the theoretical model with which the social scientists work does not perfectly match the actual world. (He must not have read his Plato very carefully who taught that point many moons ago!) Moreover, Brooks should listen more closely to the people conducting the neuroscientific research who themselves attribute far less significance to their discoveries. Mostly what they have found confirms what those awful economists, political scientists and policy makers have believed by way of a close inspection of the brain with the aid of cat scans and MRIs.

Nor did most of those older folks ever contend that people are always, uniformly rational--i. e., ultrarational--even instrumentally, although because they mostly left it open what people’s goals must be, they did suggest that even the craziest among us calculate well enough how to get where they wish to go. Why not?

Surely there are other important questions left once this is decided but this much is not negligible. We can figure, with this assumption, that when David Brooks wants to write a column about something, he will most likely find a way to do it that doesn’t waste a lot of his resources but instead economizes with them. Not a brilliant but certainly useful assumption about people, most people, not everyone!

But I guess there is no fund in reporting that neuroscientists are confirming common sense. They mostly are, actually, even the most radical of them. They have even given some measure of credibility to free will, what with the introduction, by Benjamin Libet, of the notion of the brain’s veto power when people undertake their various activities. They can, at the last nanosecond, opt out if they deem their plans to be unwise. What a finding that is!

Monday, October 12, 2009

Why the Nobel for Obama?

Tibor R. Machan

OK, I will no longer try to resist the temptation to chime in on this one. I try not to jump on the bandwagon with every hot topic but this one bothers me because so many people feign mystification. What is the big deal here?

Back when F. A. Hayek received the prize in economic science, in 1974, the committee felt so uncomfortable about rewarding a champion of the free market that it split the prize between him and Gunnar Myrdal, and Swedish supporter of the welfare state. Over the years the prize in economic science has gone back and forth, with Chicago School people some and Keynesians or similar big government interventionists winning others. with a few technicians to break up the pattern. Clearly then whenever there is some chance of brouhaha about the prize, the committee has played it safe.

Perhaps with the Peace prize it is a little different, although it is hardly likely that it would be won by someone who helped bring down the Berlin Wall, given that however much the soft Left didn't like Stalin's system, socialism is still the ideal it is committed to realizing, somehow, even if it takes squaring the circle. Norway is, after all, a welfare state and no one likes to admit that as with so many mid-eastern countries, what sustains it is oil, not political economic wisdom.

Another way to stick it to capitalism--never mind that there isn't and hasn't been any evidence of that system in its unvarnished form in America--is to give some prize, any prize, to someone like Barack Obama, an avowed leftist who hasn't had a good thing to say about the distinctively American idea of applied free market economics. Even though Obama has himself held an adjunct professorship at the University of Chicago where the late Milton Friedman lead the Chicago School of free market economics, he was in the School of Law and probably never bothered to learn anything about how bad a mistake it is to entrust the economy to a bunch of politicians and bureaucrats. He is in fact a celebrity on the American political stage who is, since FDR, one of the few making no bones about liking statism, about trusting some people to micromanage the lives of others. Since the Nobel committee is firmly committed to that kind of system, it made perfectly good sense to give the peace prize to Obama, never mind how misnamed it was for him. (They already gave the economic science prize last year to a like-minded fellow, Professor Paul Krugman, a most enthusiastic champion of the political management of the economy.)

Sure, it is a bit gross to give out this prize to someone who hasn't done much for peace except to talk it up on and off but, hey, why be picky? After all, everyone in Europe and a whole lot of people in America are enamored of him, so giving Obama the prize is a gesture toward the Left without much substance or risk.

There was just one comment from someone about this that I found sensible. This was that Mr. Obama should have turned the prize down saying, "Get back to me later, once I have achieved some of what I want to in the direction of peace around the globe." Would have shown some class, me thinks. Alas, that might have been too much to ask for someone who seems to be fond of power the way Mr. Obama clearly is. Anyone whose solution to all the problems of a country amounts to nothing more subtle than through borrowed or printed--i. e., fake--money after it cannot be counted upon to show tact and subtlety. Yet this may not be feasible, actually. that is because there is a famous and highly influential moral philosophy that may have something to do with the award of the prize to Mr. Obama at this point of his presidency.

I am thinking of Immanuel Kant, the German thinker who argued, in the 18th century that what matters in moral matters is that one has a good will, nothing else. It is the thought that counts, in other words, since human beings have no effective impact on the world which is governed by the impersonal laws of nature. The only thing that is free is the will, which governs ineffectual intentions and nothing else. I don't know if the Nobel committee is staffed with Kantians but what happened here suggests it. The consequences of Mr. Obama's policies do not matter--all that matters is his his good intentions, period.
Magical Wishing

Tibor R. Machan

Whenever I encounter the sentiment expressed in the following, I get pretty pessimistic about how today's commentators tend to think: "Goodman [the author of a free market bashing book, Past Due (Henry Holt, 2009)], a fair-minded reporter and a clear writer, demonstrates how both Bernake and Summers, along with most other major economists and Well Street plutocrats of the past two decades, became entranced by the Greenspan-Chicago School notion that financial institutions can be trusted to police one another in the absence of rigorous government oversight...." (NYTimes Book Review, 10/11/09, p. 17) Just consider that while the reviewer, the†Business Week managing editor Paul M. Barrett, shares Goodman's severe dislike of free markets and those who consider it, or whatever bits and piece of it exist, a promising instrument for dealing with the country's economy, he has complete faith in "rigorous government oversight."

How is this possible for any person who has even the slightest claim to being rational? The market, after all, is a place where economic decisions are made by agents who normally pay a heavy price for making mistakes. †Maybe not immediately but in time--the Enron fiasco is a case in point, as is the recent meltdown within what amounts to, in fact, a highly mixed--rather than a free market--American economy. No one in his right mind believes that market agents are all omniscient and/or supremely decent. There are rogues in all areas of life.

However it takes a very foolish individual to notice mistakes in the market--market failures, so called--while being oblivious to errors made by bureaucrats--political failures, that is. The so called rigorous government oversight is treated by such foolish folks as somehow guaranteed, as if people who move to Washington and other centers of regulatory power cannot err and all their oversight will be pure and wise. Not only is such an outlook naive and ignorant of one of the best ideas to emerge from economics, namely, public choice theory. †I is simply self-contradictory. †People in free markets are so prone to corruption while people in government are not! †How is this possible when both groups are people and in centers of power the incentives to guard against error are virtually nil?

Of course, the claim that Bernake, Summers, and Wall Street were all "entranced by the Greenspan-Chicago School notion" is balderdash to begin with. †Geenspan's early admiration for Ayn Rand's political economic philosophy has had very little if any impact on his work at the Fed. †Te very idea of the Fed is anathema to Rand's viewpoint and in the end also of the views of the late Milton Friedman who wrote Capitalism and Freedom (1961). †Ad the self-interest Greenspan referred to in October 2008 as the culprit has nothing at all to do with Rand's classical notion that what people ought to do in their lives is promote their rational self-interest, to pursue their human happiness in their lives.

So the premise of the idea Goodman advances and Barrett supports is flawed to the core. But even more importantly, where is the common sense of these people as they express such total faith in rigorous government oversight when, in fact, the government has had the power of such oversight since the Fed was founded back in 1913? A the Harvard economists Niall Ferguson pointed out in, of all places, The New York Times Magazine, back in May 2009, "The biggest blunder of all had nothing to do with deregulation...."

Someone needs to explain to Goodman and Barrett that when people have political power at their disposal, they cannot be counted upon to apply it fairly, sensibly, consistently, and competently to the task of managing other people, including those in the economy. What they can be counted upon to do is to push for an agenda of their own. This is for two reasons. First, they have no clue what their job description as "public servants" means since the public is, of course, a huge variety of human beings with extremely diverse interests; and most of these folks have goals of their own they are free to pursue with impunity while in office. That is what having sovereign immunity means, not having to answer personally to objections from the citizenry! †S that rigorous government oversight is but magical wishful thinking, nothing else.