On Government and Carpetbaggers
Over at Blue Oregon, one of their bloggers has used Bobby Jindal’s speech as a launching pad to explain why “sometimes government is exactly what we need.” To wit:
One of the more ruinous myths within the American story is that private enterprise, the great domain of the individual entrepreneur, is where we find our nation’s greatest innovators, achievers and success stories; government, on the other hand, is composed of scoundrels, carpetbaggers, fools and sycophants. For almost thirty years, we’ve lived with Reagan’s big lie, that “government is the problem.” Yet it was Reagan who grew the national government’s reach and cost to unprecedented size while simultaneously leaving fewer and fewer Americans under that government’s care and protection — or able to pursue the American Dream. And even as quickly as we are seeking to forget Bush, let us understand that he outdid Reagan’s lies, growth of government, and abandonment of citizens by huge margins. And let us remember as well that he, like the Gipper, was a conservative, no matter how vociferously conservatives seek to deny him.
Oh, so Bush is conservative because you decide he is. How convenient. Well, I might as well point out this new study by George Mason University economist Daniel Klein and graduate student Jason Briggeman which finds that “conservative” magazines (y’know, the kind that defend Bush and his policies) don’t actually support liberty and limited government. From Reason:
On issues related to drugs, gambling, and sex, Klein and Briggeman find, these magazines have been more likely to support the status quo or increased restrictions on freedom than to advocate liberalization. The one partial exception has been National Review, especially in the area of drug policy, where pro-liberalization articles outnumbered those favoring current policy or calling for greater government intervention by a ratio of more than 2 to 1 from 1955 through 2007. But by and large, say Klein and Briggeman, the leading conservative magazines are not “real champions of liberty” because they “more often than not fail to oppose government intrusion into America’s bedrooms, gambling places, and drug activities.”
So yep. Still scoundrels and carpetbaggers as far as I’m concerned.
Well first off, yes, the Ancient Greeks so on are partially to credit for the iPod, which emerged out of a long tradition of human civilization that eventually created the environment that made possible, and necessary, its development. This is certainly not to say we should go back and make sure that everyone since Socrates gets paid for every song sold on iTunes, which you seem to think is what I believe, but rather to recognize that innovation is not random or independent, but the result of a number of important societal forces – and often, cannot exist without the presence of those societal forces, whatever they may be. Labeling this realization as “collectivist” obscures the point, which is that you can’t, and really shouldn’t, isolate private sector innovations from public sector policies and claim them to be “completely independent.”
I could explain exactly how the government had something to do with Jobs and Wozniak’s creations, detail by detail, but as I said I don’t really want to get into a “fact war” over this. My point is simply that nothing ever happens “independent of government interference.” Its interference is but one force of many that shapes the world we live in such that innovations that world creates are made possible. Doesn’t that seem reasonable and worth considering? And if forces do behave in this way, isn’t it important we try to understand them as interconnected and not assert a universally regular superiority – or independence – of one interference from another? I would say so.
Everything is connected. At the very least, the private entity will have some employee that was educated in the public schools or have received in the past some government assistance that allowed it to operate in some context
I think you’re stretching your argument to the breaking point, here. By this reasoning, we should be thanking the ancient Greeks, the Roman Catholic church, the golden age of Arabic civilization, etc. for the iPod because at some point down the line a few centuries ago, some bloke passed on knowledge to someone else who passed it on to someone else, etc. until it all got handed down to Steve Jobs who made use of all that aggregate knowledge to come up with a good way to market a digital music player.
Of course that’s nonsense. Jobs is an inventive guy and he and Woz and the rest of hi cohorts have come up with a lot of smart ideas over the years. The government had nothing to do with any of them. I think it’s totally disingenuous to argue that, since someone happened to go to a public school, the government therefore somehow deserves a share of the credit for their life’s work. It’s a creepily collectivist notion, actually.
And in any case, I didn’t say “in a vaccuum.” I said “independent of government interference.” There’s an important and not-so-subtle distinction there.
I think it
Matt – seeing contract and property rights as the purview of government is useful, but not necessary for constructing a system which has both. And, if you pay attention long enough, you’ll stop trusting the value of democracy*.
The thing is, and this is where I think a lot of modern left and right folks get off track, that regulatory agencies are just as subject to malformed incentives and informational problems as any market. Perhaps more so, given that power is more concentrated and there are fewer actors to deal with. Actually, the whole TARP business is a great example of regulatory capture — the guys at Treasury and the Fed need expert advice about what to do, but all of the experts directly benefit from some of the possible actions the Fed could take…obvious incentive problem.
The problem I have with both the left and right wings is pretty simple: they are very eager to point out any potential flaws, real or imagined, in consensual transactions between private parties; but, at the same time, completely ignore the pitfalls of regulatory or government agencies. It’s like they think voting is some kind of magic panacea, and that people get into politics or government for reasons wholly different than why people do anything else: money, power, and sex.
* Voting theory is a very interesting area of research, and even a cursory reading will make you wonder if the outcomes of the kinds of elections we have in the US really measure anything useful at all…let alone the aggregate preferences of 300 million people.
just as nothing can be attributed 100% to the government, it
And some really, really dank marijuana. But that’s beside the point, which is more specific in this case: that government does in fact fund, create, or regulate into existence an environment which inspires innovation in various ways that private market might not always be able to, due to market failures, the inaccessibility of capital to new entrepreneurs, and maybe some other various reasons – as Vincent pointed out. Furthermore, we must never forget that the government creates markets by enforcing property rights and contracts – which we all of course know, if we’re having this conversation – so the government clearly has a role in making sure they carry out that very charge as effectively as possible, which might in some cases mean increasing regulations.
Anyway, I’m not seeking to attribute the internet 100% to the government, by any means. I’m actually saying I think what you are, but in different terms, which is that just as nothing can be attributed 100% to the government, it’s a similarly dicey proposition to attribute it 100% elsewhere. I think that private entities are in fact best and most efficient at creating innovation in a wide *number* of areas, but not particularly as well suited to accomplishing other things that we might value as a society. Saying this does not contend that it’s a “myth” private markets create innovation, nor does it acknowledge it’s a “myth” that innovation sometimes comes from government. I generally think neither proposition is really safe.
I don’t really want to get into the specifics of every kind of market failure, just because that’s a whole life’s work for some people. I will admit that it’s impossible for regulators or anyone else to know everything about the “best” choice, but I don’t agree that even the worst regulators are selected “arbitrarily,” at least as long as I continue to give lip service to the value of democracy. I will admit that the preference for democracy and this particular structure of it is indeed somewhat arbitrary, but nonetheless reasonable.
And as for “progressive”: I put that in quotes in my original post for a reason. I don’t really understand the moniker either. I’m progressive, of course, and I’m also liberal. I’m also libertarian, and then somewhat socialist. And environmentalist, and also capitalist. I don’t know. I just used “progressive” in this case because that’s whatever someone else used. Of course, boiling my actual political views down to a clear label I can share with a large group of people is difficult, as it is for us all.
I gotta go… this is an interesting discussion, as always, though.
A number of firearms can be attributed to the government. Certainly the government didn’t do the innovating, but without the government pushing the designers may never had created the weapons.
The 1911 was designed by John Browning specifically for US Cavalry troops. The M-16 (AR-15) was designed by Eugene Stoner specifically to replace the M-14.
I’m pretty sure flamethrowers only exist because of government too. Then you got all those tanks, fighter jets, air craft carriers, nuclear submarines.
Holy smokes, the government sure has the neatest stuff.
According to this, the microwave oven was originally patented by Raytheon after a self-taught engineer working for that company accidentally discovered that you could cook stuff with microwave energy.
The Jeep was also developed by a private firm, Willys-Overland based on a prototype by a different firm, though in that case, it was because the government was looking for someone to build a “light truck”.
The Jeep example, however, reminds me that the original VW Bug (KdW-Wagen, or something) was, in fact, developed by Ferdinand Porsche for use in the Nazi government’s “Strength through Joy” program whereby Germans could save up vouchers taken from their paychecks and get a car after enough had been saved. Most of the money was just taken by the government for rearmament and, if I’m not mistaken, no KdF-Wagens were ever delivered to anyone in Germany for civilian use.
Matt – serious question, propose a mechanism by which a third party to a transaction has more information than the two involved parties. Let’s assume a bilateral arrangement for simplicity sake.
Also, should informational asymmetry be corrected when it benefits the small party at the expense of the large, or only in cases where the asymmetry benefits the large (read: deep pocketed) entity? For example – One of many reasons we see a homogenization of premiums across an insurance pool is informational asymmetry. I have much more knowledge of my health than the actuary who’s making the rate decisions does. Therefore (and we’ll ignore things like coverage requirements, again for ease), we have an informational asymmetry. I know more than my insurer.
If I am a healthy person, this disadvantages me – because the premium will be higher based upon the average risk profile for the pool. If I’m unhealthy, this advantages me because I pay a lot less than I otherwise would.
Now if we correct that informational problem somehow, and let’s pretend we can – the insurer benefits most because it can now price individual policies accurately and BOOM captures more surplus. Also, the relatively healthy people win because they’re paying a price that’s much closer to their marginal benefit. The unhealthy lose, because their subsidy goes away. Should we correct this asymmetry? The same holds true of a creditor/borrower situation – or (as in the paper that made this idea famous) between buyer/seller of used cars.
Externalities are just as tricky…how does a regulator determine the cost in order to properly administer a Pigouvian tax and get to the pareto optimal level of pollution? What are the public choice incentives involved if we try to institute property rights and use Coase bargaining? What are the transaction costs?
You see, most of us “free market” types aren’t walking around with copies of Atlas Shrugged and mumbling about parasites. It’s just that the relationships between entities in the economy are very complicated, as are the incentives facing any given regulator (especially elected ones), and we doubt very sincerely the ability of an arbitrarily selected individual or cabal to make “the best” choice. I doubt even the existence of a “best” choice, depending on how you really want to define best, because the aggregation of preferences is extremely difficult to accomplish in any meaningful way. Even provided that a best exists and that someone can identify and select it, I doubt that it will work its way through the legislative process intact. Look at something as obviously a good idea as school vouchers, or forcing Social Security to use proper accounting, or even elimination of the AMT.
Lastly, I cannot for the life of me fathom why the mid to far left in this country has settled on “Progressive” as their new moniker. At least this means that classical liberals such as myself might get to take the liberal label back from them, but given that the original Progressives were a bunch of eugenics-loving racists, I really don’t understand the kind of myopia that can lead a person to adopting their name.
And crack cocaine.
Microwave. Pretty sure that’s one of the few things directly invented by the government.
Also jeeps.
Attributing “the internet” to “the government” is a dicey proposition, given that ARPANET was based on technologies developed by researchers from a number of different universities nationwide and implemented on computer hardware developed by private firms like DEC and IBM.
That “innovation emerges organically” is unquestionably true, and government funding is often very useful for private entrepreneurs who might not otherwise have the resources to work on projects that might or might not pay off. But acknowledging that government money can be crucial is far different from asserting that it’s a “myth” that the private sector is where the best and fastest innovation is happening.
Looking around at what’s here on my desk or thinking about what I have in my room at home, I can think of exactly zero things that I can say are the direct product of government work (I’m not saying there is nothing, just that I can’t think of any). By contrast, nearly everything I see can be directly attributed to a private enterprise trying to make money (or, in the case of free open-source software, a group of individuals collectively working on projects with no profit motive at all).
Also: Innovation does come from government, the internet is an example. Often, government-funded innovations lend later to market-driven improvements, and vice versa. Saying innovation “only” comes from either the market or government alone, acting in isolation, is a huge mistake. Innovation emerges organically out of an environment, economic, political, or social, which demands it, and is influenced and improved upon by the work of people in both private and public sectors.
First of all, I don’t think anyone wants to argue that Bush was really a “fiscal conservative, no matter how much he tries to deny it.” The truth is, you’re right, the GOP is hardly “fiscally conservative,” although they claim otherwise when it suits them politically. The point of people like Blue Oregon, I think, is to use Reagan, the Bushes, and Clinton as examples of how the alignments of the parties has been changing since the 1960s; generally speaking, Democrats are actively establishing – and even want to achieve – a better track record in terms of actually being fiscally conservative. I mean, yeah, the stimulus probably shows they could do this much better, but their point basically still stands: in the last 30 years, only a Democratic administration has achieved a balanced budget. More importantly, a huge number of people in the left wing base (myself included) are not the Welfare Statist left of the Great Society. We want the deficit ended, unnecessary spending cut, the overburdening income tax repealed, and hopefully as soon as possible.
Second, I can’t speak for Blue Oregon, but as a “progressive,” I can say that I myself do not expect “equality of outcome,” by any means. Such a notion is absurd, and reasonable “progressives” do well to reject it. I do think, however, that market failures like externalities, monopolies, and asymmetry of information will need be corrected if we are expected to have “equality of opportunity,” and to this end, the various spheres that both create and shape the economic – political, social, spiritual and artistic – must be expected to play a role. Focusing solely on the capabilities of the economic sphere of the “free” “market” to solve our problems is, I believe, too limited an approach. (Also, I think, and I hope you agree, that currently there is in practice no such thing as a true “free market”). That’s of course not to say that free market strategies should not be employed at all, as many idiotic “progressives” contend, at their fault.
Also amusing is the assertion that “private enterprise, the great domain of the individual entrepreneur, is where we find our nation
1) I’m tired as hell of hearing people invoke Reagan, Bush, or the Republicans every time a fiscal conservative criticizes the size/reach of the government. The GOP is a party that talks the talk but very rarely walks the walk.
Unfortunately, I’ve noticed that the Blue Oregon folks usually can’t (won’t?) distinguish between “Republican” and other sorts of conservatives. So when they pronounce that Bush was a conservative “no matter how vociferously conservatives seek to deny him,” it’s mainly a reflection of the fact that they either cannot or refuse to conceive of any sort of conservative thought that isn’t part of the of the fiscally liberal/socially conservative straw man they’ve constructed.
2) Speaking broadly, the “progressives” that Blue Oregon caters to do not adhere to a philosophy of “equality of opportunity.” They’re more concerned with “equality of outcome”, which almost invariably necessitates massive government intervention to make sure no one group gets ahead of anyone else.