Monday, June 28, 2010

Roberts on Hayek

Russ Roberts's piece in the Wall Street Journal on Hayek today left a little to be desired, but I suppose there's only so much you can expect from an op-ed.

He asks: "Why the sudden interest in the ideas of a Vienna-born, Nobel Prize-winning economist largely forgotten by mainstream economists?"

Name me a single mainstream economist that has "largely forgotten" Hayek. Hayek is a major figure in 20th century economics. I think what Roberts means is that mainstream economists don't think of Hayek in the same way that he does. That's not quite the same as Hayek being "forgotten". Would it be accurate for me to say that Roberts has "forgotten" Keynes? Perhaps it would be, since he goes on to write: "First, he and fellow Austrian School economists such as Ludwig Von Mises argued that the economy is more complicated than the simple Keynesian story. Boosting aggregate demand by keeping school teachers employed will do little to help the construction workers and manufacturing workers who have borne the brunt of the current downturn." Keynes offers a simple view of the economy relative to Hayek and Mises? That's news to me! But then again, this sort of straw-man version of Keynes shouldn't be surprising to anyone who has seen Roberts's Hayek vs. Keynes rap.

It's also sad that Roberts writes something like this: "But now that the stimulus has barely dented the unemployment rate, and with government spending and deficits soaring, it's natural to turn to Hayek." No one who talks about Bastiat as much as Roberts does (not to mention anyone who teaches economics at the university level) should have to have the concept of a counterfactual explained to him. My guess is Roberts understands the concept perfectly, he just deliberately presents a disingenuous picture of the stimulus in this article because it furthers his own narrative. That's unfortunate. If you can't make a fair, honest case in an op-ed this short, that's understandable - but it doesn't give you license to distort the evidence to make a dishonest case.

Even David Henderson is a little hesitant on Roberts's claims about what Hayek means for Fed policy under Greenspan. But again, Roberts has his own narrative of how the crisis went down. For him it's a simple story, not a complicated one (which makes his earlier critique of Keynes espeically ironic) - and he's not going to let the evidence get in the way of that.

I'd dispute some reckless applications of this statement, but you can't really contest Roberts here: "Third, as Hayek contended in "The Road to Serfdom," political freedom and economic freedom are inextricably intertwined."

Also here: "The fourth timely idea of Hayek's is that order can emerge not just from the top down but from the bottom up. The American people are suffering from top-down fatigue." The point he's making in the first sentence is self-evident, but his application is shaky. I'd argue the election of Obama is just a culminating event in a bottom-up movement to retake American self-government in the wake of 1990s passivity and Bush-era top-down leadership. Even the opposition now (the Tea Party) is a grass-roots opposition to what is fundamentally a grass-roots governing majority (the Obama movement), in contrast to the Bush years where a top-down administration's only organized opposition for most of the first decade of the 21st century was a Democratic Party establishment that was largely complicit in the Iraq war and in most of Bush's domestic excesses as well. That started to change towards the end of Bush's presidency, and by the 2008 election we had a genuinely grass-roots movement behind Obama and a genuinely grass-roots movement on the Republican side that continues to this day.

I take issue with some of what the administration has done as being too centralized. The health reform package, for example, is not the package that I would have put together. But Roberts makes this bizarre case that anything emanating from the federal government is "top-down", no matter how "bottom-up" its origins are. Essentially, if you don't agree with Russ Roberts's libertarianism you're "top-down". If you do what he thinks should be done (namely, reducing federal spending and action), then it's bottom-up. This is patently absurd. It's another example of this weird phenomenon among libertarians where they can't comprehend their own propensity to ride roughshod over human liberty, despite the fact that it's blatantly obvious to the rest of us.

25 comments:

  1. Keynes offers a simple view of the economy relative to Hayek and Mises?"

    Roberts was talking exclusively about Hayek. What was the point of bringing up Mises? Is Hayek not his own man?

    And yes, Keynes' nearly Cartesian vision of human beings is rather simplistic in comparison to Hayek's. Then again, Hayek had the benefit of living longer and gaining wisdom by such.

    "I'd argue the election of Obama is just a culminating event in a bottom-up movement to retake American self-government in the wake of 1990s passivity and Bush-era top-down leadership."

    I'd argue that the 2008 election was driven by frustration with the failures of the Bush administration, not for some desire for self-government.* There is really no reason to think this was about some desire for self-government. Same with the Tea Party; they don't represent self-government in any substantial way.

    "I take issue with some of what the administration has done as being too centralized."

    The Obama administration for the most part is the Bush administration on steroids. Across the board the Obama administration has been an incredible disappointment even where he was supposed to be "good."

    *What surprises me is just how bad the Obama election campaign went in comparison to just how negative a view the public had of the Bush administration. Obama should have crushed his lacklustre opponent; instead the spread between then was in the low single % percentage points.

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  2. It is a great day for libertarians, BTW: http://reason.com/blog/2010/06/28/libertarians-respond-to-mcdona

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  3. RE: "Roberts was talking exclusively about Hayek. What was the point of bringing up Mises? Is Hayek not his own man?"

    You jump on the keyboard to comment way too quickly, Xenophon.

    RE: "I'd argue that the 2008 election was driven by frustration with the failures of the Bush administration, not for some desire for self-government.* There is really no reason to think this was about some desire for self-government. Same with the Tea Party; they don't represent self-government in any substantial way."

    That's an awful simplistic way of looking at it (while we're on simplification). There are positive and negative elements behind both Obama and the Tea Party, but a substantial element of both is rejection of rule by an elite and a demand for accountability of Washington to the aspirations of the people.

    RE: "What surprises me is just how bad the Obama election campaign went in comparison to just how negative a view the public had of the Bush administration. Obama should have crushed his lacklustre opponent; instead the spread between then was in the low single % percentage points."

    I think this is a little too harsh on both Obama and McCain. Up until August and Sarah Palin, I was quite happy with our options, and felt like I would have been genuinely satisfied if either were elected. I think a lot of people felt this way. McCain isn't the most exciting candidate, but I and I think many others saw him as a solid, dependable one. Sarah Palin quickly made that ticket a non-starter for me, and as we entered the financial crisis I became convinced that Obama would handle it better than McCain - but I can understand why the spread was as narrow as it was. Add in disgruntled Hillary supporters (THAT was a bruising primary fight for them), and a little latent racism which obviously exists to a certain extent, as well as the non-sensical accusations of socialism and the spread isn't particularly surprising.

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  4. A great ruling - and not just for libertarians, although they're celebrating as well.

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  5. "A great ruling - and not just for libertarians, although they're celebrating as well."

    Exactly. Can't forget the street gangs!

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  6. Daniel,

    Self-described libertarians (some associated with CATO of course) were the primary moving force behind the litigation that brought this and the previous ruling (Heller) about. Remember, in the D.C. case (Heller) that the NRA did not at least initially support it because it apparently feared an adverse ruling. So we - the libertarians - won this when no one else was willing to take on.

    McCain was even more of a neo-conservative candidate than Obama; so McCain was always a non-starter. And for anyone actually following what McCain stood for from the late 1990s would realize this. I realize that this is not CW, but it is entirely reflected in his policy positions for well over a decade. Of course this was the ironic thing about McCain, many of his supporters thought of him as the anti-war candidate.

    "...but a substantial element of both is rejection of rule by an elite and a demand for accountability of Washington to the aspirations of the people."

    Wrong. They reject an elite they are uncomfortable with; this is reflected in the fact that every successful "Tea Party" candidate is someone well established within Republican party politics. Similarly once Obama was in power Democrats en masse stopped criticizing the very things they were criticizing when Bush was doing them.

    "You jump on the keyboard to comment way too quickly, Xenophon."

    The question was entirely fair.

    Evan,

    The street gangs already have guns; just like they already have drugs.

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  7. On McCain I'd suggest Matt Welch's excellent "Myth of a Maverick."

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  8. Evan,

    The street gangs already have guns; just like they already have drugs.


    I was just trying to ruffle feathers.

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  9. 1. Amicus briefs were filed by more representatives and senators than any other case in history - and you can count on one hand how many of them are libertarians. 30-odd states filed amicus briefs supporting the petitioner - how many of those state houses are controlled by libertarians? Most of the organizations that submitted amicus briefs weren't ideologically oriented at all - they were groups specifically supporting second amendment rights and/or sportsman/gunowner groups. The ideological groups were mostly conservative, and there were a few identifiable libertarians. I don't know why you're so damned territorial. All I'm saying is a lot of people are celebrating this, and even more should be.

    2. I don't think I really had any illusions about McCain. I don't know anyone who thought of him as an "anti-war candidate", although some bought into that "maverick" monicker. I think he was the most reasonable republican option with the possible exception of Romney (although I don't know him too well). He is not particularly doctrinaire, although you're right - he's a little hot-headed, particularly when it comes to foreign policy. Indeed, that's where I think Obama had the biggest advantage.

    RE: "Wrong. They reject an elite they are uncomfortable with; this is reflected in the fact that every successful "Tea Party" candidate is someone well established within Republican party politics."

    (1.) They've ousted establishment Republicans, and (2.) I'm not sure I'd entirely identify the Tea Party as a protest movement with the libertarianish/populist candidates that have been associated with the Tea Party. I think their election is enabled by the Tea Party, but they are not one and the same.

    RE: "Similarly once Obama was in power Democrats en masse stopped criticizing the very things they were criticizing when Bush was doing them."

    That's a stupid thing to say. You really generalize far too much, Xenophon. Some Democrats certainly do this. Many do not. And many, many Democrats are now criticizing Obama for not being as liberal as they expected him to be.

    RE: "The question was entirely fair."

    No, it was a bad question. In the sentence where Roberts refers to Keynes's alleged simplicity, he references BOTH Mises and Hayek. If you weren't so quick to comment you would have noticed that.

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  10. Evan,

    I would just note that even organizations like "The Brady Campaign" no longer support outright gun bans.

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  11. (1) The amicus briefs don't matter; what matters is who brought the case in the first place and who supported it - that being libertarians.

    "I don't know why you're so damned territorial."

    It is a simple but for statement; but for a group of libertarians this litigation result would not have happened.

    (2) "I don't know anyone who thought of him as an "anti-war candidate", although some bought into that "maverick" monicker."

    It was reflected in the polling of those who voted for him; something like 1/3rd of those who voted for him (if I recall correctly) saw him this way.

    "He is not particularly doctrinaire..."

    He is a doctrinaire neo-conservative. Right down the line. Look at his record; what he stands for.

    "Indeed, that's where I think Obama had the biggest advantage."

    Obama only buys into the "essential nation" thesis the same as McCain does. They just have slightly different outlooks on what that means. There is a Washington consensus on that subject; which is why Obama is nearly a mirror-image of Bush regarding FP, national security, etc. concerns.

    "(1.) They've ousted establishment Republicans..."

    And in almost all cases (as small a number they are - we're talking about six or seven at this point) their opposition are people who have been rising through the Republicans for at least four to six years.

    "That's a stupid thing to say."

    No, it is an incredibly intelligent thing to say and quite true. Where are the massive protests over the war in Afghanistan as it collapses around Obama's ears? Where are the relentless op-eds by Democratic public intellectuals attacking Obama for his flip-flop on Baghram and Gitmo, on citizen privacy, on whistleblowers, etc.?

    They are almost entirely silent on the above matters. Indeed, that's what makes Glenn Greenwald such a stand up guy (even though we disagree on all sorts of policy matters). He's willing to go out on a limb and criticize Obama for tapping Kagan - and look at the circle the response to that. Can you give me another example of someone like Glenn Greenwald? Name me ten and I'll withdraw my remarks. There is nearly no push back from liberals and Democrats regarding what Obama has done so far. It isn't shocking, because it is exactly the same type of Team Red behavior one saw with the Bush administration.

    "No, it was a bad question."

    Since I cannot read the entire article, well, you get the point. So, it was an excellent question.

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  12. "Where are the massive protests over the war in Afghanistan as it collapses around Obama's ears?"

    The concern with Bush was almost exclusively about Iraq, not about Afghanistan!!!!

    And are you kidding me - there's been substantial criticism of Obama over Guantanamo.

    RE: "Since I cannot read the entire article, well, you get the point. So, it was an excellent question."

    You can read what I copy-and-pasted, can't you?

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  13. Full disclosure: I held my nose and voted for Bob Barr.

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  14. "The concern with Bush was almost exclusively about Iraq, not about Afghanistan!!!!"

    Yet the same conditions pertain in Afghanistan today as existed throughout the Bush administration in Iraq (and exist today in Iraq for that matter - sure the inter-communal violence is down, but hey, Iraq has successfully segregated itself via intra and inter migration).

    If Democrats were remotely consistent on the matter they'd be asking for Obama's performance in "Obama's war."

    "And are you kidding me - there's been substantial criticism of Obama over Guantanamo."

    Where? Examples? Where? It has almost gone without notice. Where is the major debate in Democratic circles about this? Where is it? The fact that John Stewart is one of the few liberal voices making public statements about the situation with regards to the treatment of enemy combatants ought to tell us something about the Team Blue echo chamber that exists right now.

    Like I wrote, give me ten examples, and I'll retract my statement (I've already given you two - so you really only need eight).

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  15. Anyway, I have my own vacation to get prepared for.

    We probably agree more than we disagree on, but what we disagree on is also likely fundamental to how we view the world. I'll try to keep this in mind in the future.

    That said, I hope you have a fantastic time in France.

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  16. RE: "Yet the same conditions pertain in Afghanistan today as existed throughout the Bush administration in Iraq (and exist today in Iraq for that matter - sure the inter-communal violence is down, but hey, Iraq has successfully segregated itself via intra and inter migration)."

    I'm getting the sense that you have a very tenuous grasp of what we were all mad at Bush for - which is especially strange since you're obviously not a fan of Bush.

    I wasn't mad at Bush because he prosecuted the war badly. I was mad at Bush because he prosecuted it at all. I have no such concerns about Afghanistan, and I don't think I'm alone in this.

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  17. Andrew Sullivan, Scott Horton, Brandt Goldstein, Andy Worthington, Thomas Andrews, Tina Foster, Jonathan Hafetz, Ken Gude, Laura Murphy, Aziz Huq, Joe Klein, Brian Beutler, Matt Yglesias, Luke Johnson, and lots of Congressional Democrats.

    That's from recollection and about ten minutes of googling.

    Oh ya, and in the more amateurish blogsphere, Evan and I both on this blog (although I'm not sure we strictly count as "liberals"), and Scott Kuhagen at the very least.

    There's been a lot of talk on this, if you've been paying attention. Part of the reason there may be less than there could have been is that Obama hasn't simply stood stony-faced in opposition. He's made a few moves in the right direction, and signaled he might make more. That's going to blunt criticism. But there certainly has been criticism.

    I believe my standard set of liberal links - DeLong and Krugman - have both raised the issue as well, but I'm not going to comb through their mostly economics posts right now.

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  18. I agree with Daniel that Xenophon's point is a bit exaggerated, but at the same time I sympathize with his criticism... I think we in the U.S. are quite good at talking shit and then sort of sitting back and not doing anything about it. Depending on what the standard is for opposition (mass protests? riots? strikes?), I think it's reasonable to say that Obama isn't getting much resistance. The difficulty, of course, is that by those standards Bush didn't get all that much resistance from us either, so the contrast between administrations fails with the defense of our supposed opposition.

    Also, I'm not a Democrat, so I don't know if I would count with what Xenophon's discussing here.

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  19. I'll call myself a Democrat, but usually it's followed by "by default". I don't really think of myself as a "liberal", and definitely not of the variety that insists on the "progressive" label.

    But this is the problem with these sorts of assessments. The labels are so fluid people can justify whatever perception they want to about the nature of Obama's base and opposition.

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  20. Daniel,

    "I'm getting the sense that you have a very tenuous grasp of what we were all mad at Bush for - which is especially strange since you're obviously not a fan of Bush."

    I'm getting a sense that you have a very tenuous grasp of why most Democrats/liberals ended up opposing the Bush administration on Iraq. This sort of obvious for anyone familiar with the backboneless Democratic party.

    "I wasn't mad at Bush because he prosecuted the war badly. I was mad at Bush because he prosecuted it at all."

    And that would put you in the small minority of Americans who initially opposed the war. Quite obviously I wasn't talking about that.

    "That's from recollection and about ten minutes of googling."

    And the links are where exactly? I mean, I have to actually evaluate the claim after all.

    "There's been a lot of talk on this, if you've been paying attention."

    Actually, there has been nearly zero talk on these subjects - which is why discussion of Gitmo has near zero for almost a year now.

    "He's made a few moves in the right direction, and signaled he might make more."

    Is Gitmo closed? Is it closed? Is it likely to close by 2013? No, it isn't. Greenwald on Gitmo, Obama and Obama's supporters (note how Greenwald specifically mentions Yglesias): http://www.salon.com/news/opinion/glenn_greenwald/2010/06/26/guantanamo/index.html

    Let's move on to Baghram ... Obama is using Baghram and other overseas locales to hold people indefinitely just like Bush did.

    Let's move on to rendition ... oh, that's right, we are still doing it ... despite Obama's statement that this practice would be ended.

    The list is endless. On and on and on. There has been no improvement whatsoever.

    Now do tell me about all these "improvements."

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  21. Apparently my comment was eaten...

    "I'm getting the sense that you have a very tenuous grasp of what we were all mad at Bush for - which is especially strange since you're obviously not a fan of Bush."

    I'm getting the sense that you don't understand why most Democrats/liberals opposed Bush on the war - that is its performance. There has been a huge flip flop on this issue.

    "That's from recollection and about ten minutes of googling."

    Links? I have to evaluate the claim.

    "Part of the reason there may be less than there could have been is that Obama hasn't simply stood stony-faced in opposition. He's made a few moves in the right direction, and signaled he might make more."

    He's made zero moves to improve the situation. Greenwald has a nice discussion of what is actually going on: http://www.salon.com/news/opinion/glenn_greenwald/2010/06/26/guantanamo/index.html

    A few topics - where is Obama improving things on (a) rendition; (b) domestic surveillance; (c) Gitmo; (d) torture; (e) whistleblowers; (f) the holding of people claiming they have no habeas corpus rights; and (g) Presidential power.

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  22. Obama on torture: http://www.cato.org/pub_display.php?pub_id=11228

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  23. Xenophon,

    Daniel can wiggle and slip out faster than a catfish.

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  24. He can also float like a butterfly and sting like a bee. While we're using odd animal references.

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  25. sandre,

    There is always noodling.

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