Structure vs. Belief

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Many libertarians embrace public choice theory as a sophisticated, intellectually rigorous political analysis that is consistent with libertarian ideas. This does not mean that libertarians should accept it uncritically.

Public choice theory looks at politics through a lens that treats politicians as selfish actors striving to maximize their power and self-interest, not as people chiefly motivated by the public good. Public choice theory has identified several structural defects in the American political process that lead politicians to destroy liberty as a byproduct of their self-interest. One such defect is the dispersion of interests problem, the fact that a rent-seeking law imposing taxes to help a special interest group has a highly concentrated interest group to lobby for it, whereas the interest to lobby against it is dispersed over the entirety of the taxpayers. Individual taxpayers aren’t sufficiently aware of the tax to be highly interested in fighting it.

Another defect is the fact that politicians usually get noticed by the media for what they do, and not for what they don’t do, so election campaigns tend to reward politicians for being active, which leads to bigger government. Because of the fame that attaches to moralistic crusades, the structure of democracy also rewards legislatures for passing new criminal laws, which leads to overcriminalization.

It is the beliefs of the people that caused the decline of liberty and the rise of big government in post-New Deal America.

But despite public choice theory’s analytical value and libertarian leanings, I would argue that it is mistaken about the fundamental cause of statist laws. As an alternative to public choice theory I would present the rule of intended consequences: the reason for the existence of any given law in a republican democracy is the voters’ belief that the law is good and performs a just purpose; the unintended consequences of a law are usually not the primary reason for that law’s existence. This rule holds that the best way to get an unjust law repealed is to persuade the voters that the law is unjust, so that voter pressure will lead the politicians to repeal it.

For example, the reason why gambling is illegal is that mainstream American voters have inherited a Puritan conservative Christian morality dating back to the colonial era, and they feel that gambling is evil and should be illegal. The Indian casino owners and the casinos in Las Vegas and the state lotteries all benefit from the anti-gambling laws. And they all have lobbying power. But despite the lobby whose interest is favored by criminalization, the primary reason for the anti-gambling laws is the feelings of the voters, not the lobbying of the special interests who benefit from the law. If the voting public did not believe that gambling should be illegal, then it would be legalized.

I doubt that any amount of lobbying or special interest funding could keep gambling from being legalized if the politicians thought that the voters strongly favored its legalization. Legislators who fought the tide of public opinion would simply be voted out and replaced by legislators who would obey the public will. Gay marriage and Prohibition are two other examples showing that the law tends to change when the beliefs of the voters change. The rise of gay marriage laws and both the start and end of Prohibition illustrate the fact that politicians will adopt policies that were once unpopular if they see that the mainstream beliefs of the public have changed.

I would characterize the debate between public choice theory vs. the intended consequences rule as a quarrel between structure and belief. Public choice theorists think that the structure of a republican democracy disadvantages liberty and favors the growth of government. In contrast, I think it is the beliefs of the people that caused the decline of liberty and the rise of big government in post-New Deal America. The rise of socialist sympathy in the Democratic Party in the 1930s coincided with the seepage of socialist theories from the late 19th century into the consciousness of the American public. The expansion of our government has followed Americans’ abandonment of the libertarianism of the American Revolution and their acceptance of modern liberal dogma.

If I am correct, then the key to restoring liberty is not to alter the institutional structures of the nation. Instead, the key is to persuade the voting public to believe in liberty, to transform the people’s moral sentiments so that they feel that statist laws are unjust. This challenge may seem difficult to meet, but altering beliefs would be easier than the task presented by public choice theory, which would be nothing short of fundamentally altering the structure of American government. Public choice could probably succeed only through a series of libertarian constitutional amendments, which seems unlikely. The war of ideas and persuasion is the right path for libertarians to focus on.




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Visitor

First you make the explicit claim that economics is not a science. When I dispute that claim -- and I explicitly state that I am disputing only that claim -- you:

1) Try to defend a different position without acknowledging the switch
2) Explicitly deny the switch when I call you on it
3) Boast about how many articles you've had published
4) Point out that you rarely write about economics and don't claim to be well-informed about economics
5) Make clear that you nevertheless consider yourself to be an expert on economics
6) Spend more time calling me a coward than you spend defending your original assertion

In none of your comments have you provided a scintilla of evidence for your claim. The closest you've come is to refer to Deirdre McCloskey's writings, but it's apparent you haven't read her books or papers. Yes, the subtitle of one of her books is "Why Economics Can't Explain the Modern World," but the book is not by any stretch an attack on the science of economics. What's more, despite your off-hand conclusion that her "criticisms" have not been disputed, her thesis has in fact been disputed. (I take here no position on her thesis, but I reiterate that it is in no way a debunking or refutation of mainline economic thought.)

So much for your side of the argument. Before I give just a few successful predictions that economic theory has made -- to even scratch the surface would take many volumes -- I'm going to briefly address your "it's a science when it suits me" view of economics.

In your newest article ("Is the GOP Terminally Stupid?") you shamelessly assert that "economists say" that a prolonged government shutdown will lead to a slowing of economic growth. Very convenient -- when you find (or claim to have found) an economist whose views coincide with yours, economics is (by implication) a science. By the way, are those nameless economists expressing a consensus view? Are they making that claim to their peers or merely to the economically ignorant ideologues who read their column in the New York Times? No matter: nameless economist agrees with Harrison, so for the moment, economics is science and we ignore its predictions at our peril.

Of your further assertions in that article, the ones that touch on matters economic are unfounded. I have not yet decided whether it is worth the time to debunk them; if I do, it will be in comments to that article. I will limit myself here to pointing out that those economists who maintain that bailouts are counterproductive have been getting much the better of the debate, as even a cursory perusal of the relevant literature will confirm. (Why wouldn't they? The facts are on their side.)

Now, for just a few real-world predictions that come from standard economic theory and have proved correct:

1) Minimum wage laws hurt those they purport to help. This is non-controversial amongst economists, and every time it's been tested it's turned out to be correct. (There are a handful of economists who dispute this, just as there are a handful of physicists who maintain that the laws of physics lead inexorably to a benevolent god. Real science has room for disagreement.)

2) Campaign finance laws will protect incumbents. The data shows this is true.

3) Restrictions on payments for organs will lead to a shortage of available organs.

4) Ceteris paribus, more TSA equals more deaths. (The cost of flying goes up relative to the cost of driving; there are more deaths per mile driving than flying.)

5) Prohibition will have little effect on overall consumption of drugs, but it will increase the profits (and the risk) of selling the drugs. (The only substantial effect it will have on consumption is the substitution of one substance for another.)

6) Huge bailouts won't help the economy. (One can make a theoretical case that they will help given certain assumptions that ignore the branch of economics known as public choice and make a few other assumptions that might or might not be correct. [I'm convinced the further assumptions are unjustified, but I cannot prove it.])

7) Large industries under our form of government (and under many other forms of government, but not all forms) will eventually control in large part any institutions meant to regulate them.

8) Voters will not (and arguably should not) take the time to educate themselves on the issues. ("Should" is of course a normative claim, which one cannot justify on economic grounds. What I really mean is that it the education will have costs but it will not effect the election.)

9) The FDA -- assuming it does anything at all -- will cause some people to die. Maybe it will save more lives than it costs -- in principle that question is subject to analysis.

10) Higher tax rates will not produce greater tax revenues. Despite the mocking that the media showered on the Laffer curve, it accurately describes reality.

Jon Harrison

But all you've done is give a list of your own beliefs, or more accurately, prejudices. What does the FDA killing people have to do with the topic I was discussing?

I've provided no evidence in my comments because I see no need to do so for your benefit. You're just some anonymous commenter, apparently fixated on a topic that's of marginal interest to me. We're not in school and I'm not taking an exam. The evidence for the mistakes made by economists -- in both theory and practice -- is mere mouse clicks away for anyone who wants to go through the depressing facts in detail.

This is the comments section of an online magazine. I posted a comment about someone else's piece. You took the opportunity to go after me, which is okay. But beyond attempting to explain just what I was trying to express, I see no need to engage you.

The volume and vitriol of your comments just keeps increasing, to a point that has gone beyond normal discourse or argumentation. As I read each new and ever longer effusion from you, I find myself laughing and feeling weary at the same time. It just seems rather ludicrous to me. I blame myself for being drawn in even this far. I should have stuck to my "Absolutely!" For while you may not lose any sleep over me, it certainly appears that you have just a wee bit too much free time on your hands.

Jon Harrison

Absolutely!

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