Friday, April 8, 2011

Bryan Caplan's thoughts on life

Bryan Caplan has an interesting list of 40 things he's learned in the last 40 years. There's some interesting stuff on there - it's worth looking at. I was surprised to find myself agreeing with almost all of them in the economics, philosophy, and life lists. I agreed with much less on the "politics" list, which to me seemed to let a little naivete in as a result of his own identity. In the economics list I agreed with everything but #4 and the second clause of #8 (I agree with #8, just think he's overstating it). I agree strongly with a lot of his philosophy list (it has a very pragmatist bent to it), although I'm agnostic in #10 on that list. No objections to his "life" list.

The "politics" list is where it gets interesting. #1 is fine. #2 is OK to a certain extent, but quite naive. On the margin now, government does pose a real risk of creating more externalities than it solves. This is, of course, why I'm always so careful to closely interrogate precisely the nature of the externality on the table. But that's only on the margin that we're currently sitting on. If you consider government vs. no government, I don't think the tables are so decisively turned against the government. The rule of law, property rights, basic infrastructure, basic education, basic security, etc. There is a boatload of stuff where the government's ability to solve externalities far exceeds any negative externalities it may create. That's why we have governments after all. They're an efficient product of an emergent social order. At the margin we're currently sitting on, of course it gets more dicey. But that's what optimization is, isn't it? You do something until the marginal cost starts to exceed the marginal benefit. It makes sense we have to think more carefully about the net benefit of more government than, say, Somalia does. Always be suspicious of corner solutions. Bryan's point on #2 is locally correct. Globally, it is incorrect.

#4 on politics is wrong too I think. If that was the most internally consistent argument, I'd probably be a libertarian. #5 confuses the lack of a state with the presence of freedom - a mistake libertarians make a lot (it's hard to be a libertarian without making this mistake, although many non-libertarians make it too). #6 is good, but I find it interesting he leaves it at Republicans and Democrats only. This is where you see some of his own identity politics creeping in. #9 is incomprehensible. I don't know what he means by that. I'm not sure what perceived difference in station, role, or rights would have lead him to say that... again, I think it's the naivete of his own identity politics that is creeping in here.

Under economics I would personally add "Accounting identities are not behavioral laws", and "Macrofoundations are as important as microfoundations, but neither are strictly necessary if you do the science well", and "Economic calculation relies on incentives, and incentives rely on institutions". Under philosophy I would add "The correspondence theory of truth is not so much wrong as it is a cause of unnecessary consternation and empty speculation", and "Logic is a language for talking about ideas in a rigorous way, it is not evidence". Under politics I would add "Libertarianism is less distinct among political philosophies than it supposes", and "The excesses and problems with democracy are real, but they are not as damning as many suppose; any possible alternative, from fascism on one end to anarchism on the other, solves the excesses of democracy by excessively curtailing human self-government".


  1. #5 of politics is correct.

    School vouchers, for example, are Friedman's crack-brained idea for "privatizing" schools. And that will be a solution worse than either complete private schools or complete public schools.

    Ludwig von Mises, in the book Bureaucracy, explains that government departments, agencies, or programmes should not be made more "market-oriented" or "business-like". They should be made to operate more like bureaucracies, because that's what they are. The incentives here change completely.

    von Mises' contribution to the Mexican railway system was to suggest NOT privatizing it. He knew that if privatization was to be done, it would be either nominal privatization with government still holding ever more indirect control or a really bad attempt at business by bureaucrats unqualified with business. Instead, he proposed a series of rules, checks-and-balances, and division of work that would make mistakes less likely to occur.

    Was von Mises not more sensible and practical in this respect than Friedman?

    This discovery was made by Richard Ebeling while going through von Mises' private papers and seeing records of his work in Mexico, by the way.

  2. More on my previous post.

    Jonathan M. F. Catalan, the last person you'd suspect, actually said nationalisation of medical insurance is now a superior alternative.


    The halfway private system today is fraught with problems. He explained that the mixture of perverse incentives here is such that government protects and subsidises private mistakes, but does it without any power to control those mistakes. And where it does focus on regulating to prevent such mistakes, it brings other unintended consequences.

    It would be impossible to privatize it now, because private HMOs would have too much to lose. They gain so much from the government. On the other hand, governments running medical insurance indirectly will not be able to keep up.

    So, again, like Catalan said, "clean nationalisation" is the only alternative.

  3. "If you consider government vs. no government, I don't think the tables are so decisively turned against the government."

    That really depends. In many historical (and current) circumstances it would be better to have no government, than government.

    This is the primary problem with advocates of government; they think of government as the best version of government we have seen so far and then run with that as a comparison to no government, when in fact, most of the time government does not even remotely resemble the "best form" or even a really good version of that form.

    As for some of your examples, well the "rule of law," most of the time it has way to many transactional costs to do anyone any good. Indeed, a society which depends on it too much is probably headed for a lot of trouble and then some. You can go in that vein about the supposed fruits of the state.

    Anyway, what government is a giant principal-agent problem; far worse than anything the market presents people, and thus far more damaging.

    #4 is spot on; paternalism is what politics is about. You see this on the right and the left daily - nanny over here and nanny over there.

    #5 It depends on your definition of "freedom" actually. I take my freedom as the individual variety, shaken not stirred.

    #9 is comprehensible; as is evidenced by the collective freakout liberals and conservatives had about libertarians in 2008 - splashed across the pages of the major journals, newspapers, etc. of the republic was an effort to blame libertarians for the financial crisis.

  4. I also generally regarding his comments on the burden of religion in the U.S. - though there are exceptions of the geographic variety.

  5. Democracy excessively curtails human self-government.

  6. I'm not sure why you think I'm comparing the "best version of government" with no government exclusively, Gary. I'm saying the Caplan's point is right on the margin but it is too limited to answer any sort of "government is good/government is bad" question. I think you should be well aware by now that I am aware of and critical of the excesses of government. I don't know how you managed to turn what I said into precisely the opposite - I'm saying that you can't take a local view of the relative merits of government and say something about whether government is good or government is bad. That would seem to confirm precisely the point that you are trying to make to me (and suggesting I've missed).

    re: "Anyway, what government is a giant principal-agent problem; far worse than anything the market presents people, and thus far more damaging."

    I would agree, of course, that the government is "far worse" than the market. Again - the idea that you think this is a bone of contention makes me wonder how close you've been reading. But the point is this - despite principal agent problems, agents still use principals! Even in the market! Why? Because despite the inefficiencies of government there is some value to what the governments do. Of course government presents a much bigger principal-agent problem than the market. That's why the ENTIRE LIBERAL TRADITION holds that markets should allocate resources. That's a limited view, though. If government provides other things of value, presumably the costs of the principal-agent may be out-weighed by the benefits of action. Recognizing that is not a denial that principal agent problems in government everywhere and always exceed principal agent problems in the amrket. That poit is the very foundation of public choice theory, Gary.

  7. "Because despite the inefficiencies of government there is some value to what the governments do."

    The problem always is this - once the government has some one area of purview it quickly jumps to another and another and another. Thus in individual instances it might be helpful, but it is impossible to hold the line there.

    "That's why the ENTIRE LIBERAL TRADITION holds that markets should allocate resources."

    Such utilitarianism is the basis for one element of the liberal tradition, but isn't why I support markets - I support markets because they are the best way to allow for consent and for Mill's "experiments in living" (there is some utilitarianism in there mentioning Mill of course, but it is mostly about Lockean natural rights). Diversity and toleration is reached via markets, conformity via the state. Hume makes similar comments about markets; they allow for diversity and promote a variety of lifestyles whereas the state promotes, well, martial values.

  8. Like I've always said, it is not surprising that in nearly every endeavor the state uses the language of war to describe it.

  9. Gary - it's only utilitarianism if you thought I was making some sort of exclusive statement, which I gave you no reason to think.

  10. Fine.

    So you're an advocate of the notion of natural rights then?

  11. I liked the part about questing for friends.

  12. Yes :)

    It's funny... transitioning into the "real world" makes you realize that friendships, like all relationships, are something you really have to work at. In college, for example, you are living around and seeing friends regularly so maintaining friendships is easy and doesn't require much investment. In "the real world" you really notice how cultivating friendships takes effort... not exactly "questing" as Bryan talked about, but it's the sense that friendship is something you work for.

    I feel that way on this blog too, actually. I feel like to maintain this mini cyber community I can't just throw stuff of, there has to be an effort at maintenance, cultivation, engagement, etc.

  13. "So you're an advocate of the notion of natural rights then?"

    Um, no. One need not see rights as self-evident, Platonic, things-in-themselves to think that they have intrinsic value.

    Does your materialism diminish the value of other human beings for you? Of course not. I'm a materialist when it comes to rights :)

  14. Daniel,

    In your second to last post I concur with every thing you have written.

  15. Anyway, Caplan's remarks about friendship reminded me of one of my favorite chunks of text from the first book of "The Once and Future King":

    "Perhaps he does not want to be friends with you until he knows what you are like. With owls, it is never easy-come-easy-go." - T.H. White, _The Sword in the Stone_


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