This IS what Democracy Looks Like!

The day before yesterday, I received a call from a friend I went to junior high school with. We hadn’t spoken in decades. Yesterday, my father left a voice mail for me to call him. Throughout this past week, several students sent me emails to organize an impromptu group discussion. Occupy Wall Street was on all of their minds.

Yesterdays’ roundtable went well. Students and faculty commented upon the lack of cohesion amongst the occupy movement. They struggled to come to agreement about what the movement believed in, stood for, aimed at, or intended – a sentiment that seems to be shared by the occupiers themselves.

We all questioned deeply but admittedly uncertainly, what specific conditions of our social world caused this unique form of activism? Could it work to change the world? How?

It seems unarguable that ideas are in the air. People are upset, some at Wall Street, others at Washington. Some seem to be growing upset with one another. All that is agreed upon is the persistence of disagreement.

I believe Vincent Ostrom (1997) would say the protestors are correct when they chant, “this IS what democracy looks like!” Social processes are complex. It is difficult to understand the meanings that motivate democratic actions and lead to social outcomes. But disagreement, competing factions, and intergroup animosity, all stand as points of evidence that group decision-making and collective actions are vulnerable to bias and capture.

Perhaps Alexis De Toqueville (1835) was also right. It was not a sense of unity or a shared vision of solidarity that made the New America exceptional. Aristotle reminds, “[f]or the things we have to learn before we can do them, we learn by doing.” Americans learned to get along by engaging one another in, as De Tocqueville termed it, “a delicate art of civil association.”

Early Americans were honest with themselves and with one another. They recognized each others’ different preferences, worldviews and competing interests. They feared the dominance of any particular group to the expense of others. They were forced to think critically, not about how to guarantee their own interests, but instead they thought about how to assure reliable constraints upon individuals and groups whose disagreements could threaten their otherwise functional community. They also thought about how to constrain the interests of those other groups whom they did not even yet know of. They admitted their ignorance and their bias, and they recognized those same traits in one another.

Any occupier’s suggestion for political arrangements that fails to realize that there will always be tea-partiers willing to empower corporate interests; and any tea party suggestion for policies that fails to realize that there will always be occupiers willing to empower government interests – are both equally naive and doomed to failure.

In the past, we learned much about designing fair rules from playing against presumably unfair opponents. Today we retain this distrust, but seem to have replaced uncertainty with prejudice and entitlement. We are no longer welcoming or tolerant to opposing interests, we point fingers and blame others for infecting our otherwise ideal society, our otherwise ideal system of politics, and our otherwise ideal economy. Our current framework places emphasis upon compromise and breeds resentment against those unwilling to amend their ideological preferences. We have forgotten that in De Tocqueville’s America, the forms of compromise that worked were not political bargains, policy trades nor log rolling exchanges; “if you support my bill, I’ll support yours.” The compromises that worked well in the past, instead took form as simultaneous and mutual constraints upon power. Our framework of political economy should begin from the premise that people’s ideological preconditions are very inelastic.

If De Toqueville was right in the structural features of democracy, and his perspective gives insight to causes of these current rabbles, might he also prove useful for prescribing cures to the social problems that have caused them?

During yesterday’s conversation I was puzzled and uncertain, what would De Tocqueville suggest or imply for us to do today? How can these competing, uncertain and ambiguous crowds learn through a comparable process of social interaction? How can they engage within an art of association to develop the skills of constitutional craftsmanship? Perhaps more importantly, how can they learn those lessons quickly?

I believe that something serious can be learned here, but I fear that we are diverting attention from it. Democrats or Republicans, Wall Street or Washington, who’s to blame? These are not the right questions if our social problems stem from the institutional arrangements of democracy itself. They are certainly not the right questions if social change is only possible through fundamental changes to the institutional structures that organize our democratic system. As protests, riots and recessions rage around the world we know that unrest transcends beyond our national confines. Any explanatory cause found within our nation must also be found to pervade beyond those political boundaries.

If only for a moment, I suggest we perceive these occupations without ideology. Let us ignore the reasons or the comments of these crowds and instead merely assess the trend. Watch some YouTube videos on mute. Do not read the placards. Simply ask, what objective social processes are occurring? I suggest that what has transpired gives insight into both what is causing our strife and what may stand to cure it.

Activism aimed to bring about structural change to the arrangements of our society have brought out the worst characteristic responses from those institutions which depend and benefit most from the status quo. Any democracy is no different, no better informed, and no more enlightened or benevolent from those individuals and groups who comprise it. The power of government is different and distinctively unique from the masses of ordinary individuals in so far as it possesses a unique monopoly upon law enforcement to apply violence and physical force without any oppositional constraint. And it is this characteristic feature that has risen to the surface of these events.

By convenient consequence, the individual interest groups of De Tocqueville’s America lacked the abilities to impose their wills upon others. They were too dispersed, they possessed too rudimentary technologies, and they were too in need of peace for productions’ and survivals’ sake. As Tyler Cowen (2011) has put it, they lived within a system of “government by oxcart.” Today’s technologies of force are a horse of a different color, a different beast entirely.

Again, if only we could see these events without ideology. If groups were assembled simply to argue the relative superiority of dragons compared to unicorns, I would be most puzzled to think that anyone, be she an ordinary citizen or a political representative, would think that men dressed in Kevlar and armed with guns could possibly accomplish a good resolution. Such actions literally stomp out the learning De Tocqueville suggested was the source of peace and prosperity.

If no other lesson is learned from these events but for a resonating distaste for police brutality then perhaps it has all been worth it. But, more lessons could be learned by actually performing those peaceful alternative behaviors and interactions. My advice is to simply do more of them. We are unlikely to reach a planned and rational resolution for deep-seated disagreements and conflicts. I suggest we pause such constructivist debates and efforts to design an ideal world, instead we should simply engage in the social behaviors we know unarguably to be good if only because in relative terms they are objectively non-violent and non-harmful to social interaction and social learning.

Those at the occupy zones should consider their opportunities to make, trade, eat, drink, play and live. They should strive to do the things within the confines of their occupied territories that they perceive as those very things that they hope to bring about throughout their ideal society. Perhaps then we will all learn by doing, to recognize that the interactions between police and protestors that we are watching accumulate the internet airwaves, are merely a more potent form of the same relationship that pervades our society between police and citizens.

Learn by doing, and grow the amounts of what we do so large as to decimate in shear quantity and magnitude the efforts of those who would use force against it. Rather than occupying Wall Street let our society occupy every street against the forms of violence that endanger the lives of our friends and neighbors.

Citations:

Cowen, Tyler (2011). The Great Stagnation: How America Ate All the Low Hanging Fruit of Modern History:Got Sick, And Will (Eventually) Feel Better. Penguin: E-Special.

De Tocqueville, Alexis (1834-40 [2011]). Democracy in America. Indianapolis: Liberty Fund.

Ostrom, Vincent (1997). The Meaning of Democracies and the Vulnerability of Democracies: A Response to De Tocqueville’s Challenge. Michigan: University of Michigan Press.

 

 

 

A quick thought…

Ostrom seems to take the best and leave the worst from the Chicago and Austrian schools. From Chicago she shares an affinity for rational choice behavioral assumptions. And the patterns of functional institutions she describes garner much of the same political economy implications as spontaneous order theory. It is difficult to plan better than the patterns of institutional diversity that emerge naturally because many of the forms and stocks of knowledge that contribute to the development and adaption of functional institutions are inherently tacit processes.

Her unique contribution: knowledge problems occur when institutions are centrally planned as they occur when production is centralized.

Her case study approach leaves aside modeling formalism and strictly deductive methods.

Is this the result of the Bloomington school’s appreciation for methodological pluralism and interdisciplinary research? If not then what?

 

Update on Austrian Masters Program at Loyola

I posted versions of the following response to the news report at The Maroon and Stephan Kinsellas blog post at mises.org.

Thank you for the kind write up.

I will say that I remain very optimistic about the expansion of our programs here at Loyola – both undergraduate and graduate. As far as this initial denial is concerned, it is not entirely surprising nor completely discouraging.

 

Trust me when I say that this process is extremely complicated and resource intensive. As such, it has been a learning experience for all of those involved. What we have learned thus far is that for the proposal that we had put together to have been approved last Spring, it would have required many dispersed stars to align so to speak – and very quickly at that. These stars included but were not necessarily limited to, significant fund raising, endowment accrual, faculty searches and hires, curriculum designs and implementations, as well as processes involving University and college accreditation.

 

As the proposal was submitted we admittedly did not have complete or certain answers to all of these questions. In fact, by undergoing the procedures we have experienced, we have only now learned the many tasks and necessary components to moving towards our goal. In turn, I think that this initial denial may become a blessing in disguise.

 

The development of a masters program in Austrian economics remains a formal component of our college of business’s strategic plan. What we hope to do in the upcoming years is close a significant portion of the uncertainty window that was tied to this earlier proposal. In other words, we are currently investigating grant and fund raising opportunities in order to expand our faculty base and undergraduate student programs.

 

With additional funded faculty added to our staff we hope to offer our undergraduate students more diverse electives, interactive student research opportunities and extra-curricular learning processes such as seminars, conferences and reading groups. If we succeed in these short term goals of departmental expansion, then we will have a more informed vision as to how viable designing, staffing, funding and implementing a masters program will be in the future. Ideally so to would a committee responsible for approving such a proposal also have that clearer vision.

 

I periodically receive follow up emails from our online survey designed to garner the demand side interest for such a masters program. I ask that those interested in staying up to date on our program and program expansions in the future fill out the survey here:

http://www.business.loyno.edu/master-economics

 

I plan to draft a sort of informational memo to all survey respondents sometime within the next week or so to keep them abreast of the above information as well as to gain a vision of potential fund raising sources to support our department in these crucial processes moving forward.

 

To make a long story short we are moving forward and in many ways we are moving forward more tangibly and quickly than we would have been able to had our initial proposal been approved as it had been drafted.

 

Again, I thank you for the kind write up and your general support of our efforts to spread the ideas of Austrian economics, free markets, peace and liberty.

 

Sincerely,

Dan D’Amico

We don’t need aliens, we need Michael.

Paul Krugman recently argued, if the world were duped of an imminent alien threat, then many of the problems of our economy could be resolved. In a way I guess he’s right. If significant focused production were aimed at avoiding exogenous costs, those efforts could lead to technological innovations with significant spill-overs. Spending, employment, GDP… the macro guys would be content to call it a day.

Given that the benefits of Krugman’s plan would be tied to actually avoiding an alien invasion, which wouldn’t have actually happened, we shouldn’t consider it when balancing costs to benefits. Therefore only left are the benefits from the coincidence that intergalactic weaponry can be productively used in consumer industries.

Ahem, Austrians think the capital structure is heterogeneous in infinitely varied and complicated ways as a consequence of subjective tastes and preferences. Making the likelihood of conveniently multi-specific capital innovations from military to consumer value ever more difficult in an ever non-physiological economy.

And this all presumes that those innovations are continually efficient and don’t impose unsustainable costs.

It’s not that I don’t think nuclear technologies have done more good than harm, I’m not intimately familiar with the numbers, but I would be morally and philosophically comfortable to say that they have. What I am far less comfortable with is thinking about how likely nuclear innovation would have still taken place without military subsidy and under what time line? Because at that point, you realize that all those lives were lost as a trade off just against that difference in time.

I also wonder what our society’s relationship to nuclear energy would be like without the military legacy of the twentieth century polluting its bloodline.

Or maybe, Krugman just wants to fight some really inexpensive aliens, could be.

But it certainly doesn’t seem likely that we would make level headed decisions concerning vital and scarce resources in the immediate presence of global annihilation. Seriously, watch some sci-fi.

Krugman’s strategy reveals more about his own creativity or lack there of, than it does anything profound about macroeconomics. The power in such proposals is in the exogenous shock, not in the mechanism for multiplying economic production. Technically the multiplier should operate regardless to the source of the shock. The only power in warfare for the economy has been its convenient ability to lower the transaction costs associated with collective action.

I propose an alternative to Krugman’s war. I call it the Michael Jackson effect. It is composed of a similar exogenous shock, way lower social costs and a super higher likelihood of awesomeness. Instead of waking up tomorrow and working hard to fend off aliens, we should wake up and fervently commit ourselves to Michael Jackson fandom. Music, film, performances, fashion, food, etc… the entire world could be remade in the image, likeness and influence of the King of Pop.

It is my contention that the Michael effect would be preferable to Krugman’s war because the likelihood of spillover gains surpassing costs seems far greater. A decade of MJ austerity would be good for the world. We could still do massive amounts of spending, subsidizing and regulation if people are so concerned about spending cuts amidst recession. But the only guns made will be used as props in smooth criminal renditions and rather than couching their work in the functions of war to attract subsidy, scientists would have to, however loosely, connect the relevance of their work to the overarching mission of promoting Michael-ness.

Friedman’s insights about stable expectations through constitutional credibility is another point for Michael. In other words, I’d rather try to guess who my elected official thinks is paying Michael the best tribute (so long as he was honestly operating according to that standard), than know what industry will yield revenue in the future given today’s level of regime uncertainty.

My boldest suggestion would be that a global Michael decade could lower rates of war perpetually and generally promote a society wherein people shared a common cultural legacy and experience. Jim Henson had a similar vision for Fraggle Rock – unrelated but also awesome!

This certainly sounds silly, but silly is always and everywhere better than living in the cultural aftermath of a mass hysterical bout with the extra-terrestrial apocalypse.

It’s not so much that Michael has the power to unite us as a people (even though I believe he does). Instead we should admonish, just as Krugman’s proposal would require an elaborate ruse, the Michael effect would require a systematic change in culture and subjective preference just to get off the ground.

Which is itself revealing: how significant the coordination problem for centrally planned solutions to economic recession is. It is as difficult as changing the fundamental beliefs, opinions and preferences of our entire society.

I don’t think we would be foolish enough to try to centrally plan for a world where everyone really did like Michael Jackson. Preference and culture are too personal a journey and they are the true opportunity costs to chasing Krugman’s war.

In Praise of Jersey Shore

A friend and colleague linked to this commentary on MTV after thirty years. I like the linker a lot more than the link.

According to the article byline, “Dr Kieth Ablow, is a psychiatrist and member of the Fox News Medical A-Team,” and according to his website, his “message is always the same: By harnessing your innate capacity for courage, faith, truth and compassion you will find the power to reach most any goal.”

For lack of a more sophisticated response – thumbs down, dislike, shenanigans. In paper workshops during graduate school, economic historian John Nye was fond of prodding the question, “why can’t I just say the opposite?”

Repeatedly in his tirade against the music television network, Ablow ponders,

How else can we explain the readiness of the network to pioneer the dissemination of an even more potent and potentially destructive (though very occasionally worthwhile) drug—reality television? How else can we explain that MTV hooked teens on The Real World, which wasn’t real at all, but staged and cut (like heroin) to provide high impact dramatic moments (kind of like music videos)? How else can we explain that the network moved so fluidly to suggest to young Americans that they were all celebrities, all worthy of staring in their own videos? How else can we explain Jersey Shore and My Super Sweet 16 and Teen Mom—all programs that require actors to pretend they are not acting, which is the equivalent of encouraging the rest of us to behave like we are acting.

“Potentially destructive?” Prove it? “How else can we explain?” Allow me to try. Social order and its associated culture are not creatures of elitist snobbery nor design they are instead the accumulated product of disjointed human actions but not of any singular human design.

First, I think Ablow’s model of causation is insulting to younger generations, but that is a topic for another time. More importantly I am concerned that this belief treats the cultural content of MTV as a concerted marketing effort rather than recognizing it for the meaningfully representative cultural residue that it is. In other words, if MTV were truly conspiring to make the youth self indulgent and consumerist there are probably more affordable ways to do so. Secondly, why do so many other network shows and cultural products highlight similar cultural themes? From Glee to Gaga there is a clear and consistent message in American pop culture – individuality is in. Furthemore I want to argue, that this is a good thing! – even in the form of Jersey Shore.

Virginia Postrel is on to something when she argues that women’s high heeled shoes are perhaps the greatest testament to human civilization. Never before in human history could something so un-functional be tolerated let alone embraced to the extent of our fashion trends.

And then we have The Jersey Shore – a group of unapologetic obnoxious heathens. They want nothing more from life than fun, sex and physical attractiveness. While many find their behaviors brutish or curt, I say hooray for them and hooray for our society that can afford to host such extravagant silliness – recessions and financial crisis aside.

When you go the gym you sweat. Sweat smells bad, but you cannot eliminate or plan for a change in that outcome without disrupting the beneficial process that leads to it. In fact, I would suggest that Ablow’s aesthetic intolerance is a far greater threat to society than Snookie or the Sitch’s promiscuity or low brow social commentary.

If you actually watch the show, you will see that characters are not a-moral or degenerate but they operate according to standard of social tolerance and anonymity that Dr. Ablow could perhaps benefit from. “You do you, I’ll do me.”

 

 

 

 

 

 

Updated website

I recently updated my website, which means my latest CV is most recent and includes all my media and public speaking appearances. More importantly there are some publications available now for download that haven’t been posted before. In particular:

my appreciation piece on Peter Boettke,

my July 4th article from Freedom’s Pheonix and

my book chapter on hurricane Katrina and the recovery of New Orleans’ underground music communities.

Enjoy!

 

 

 

Friday on Freedom Watch

Here’s the clip for those who missed.

The internet is the most complex network of telecommunications that the universe has ever known. It hosts billions of dollars of economic exchange. In its fast rising to dominance, the cyberworld has had to quickly evolve social institutions so that contracts could be enforced. Though quick and relatively young these processes have proven well against many of internet tradings unique enforcement challenges.

So you are quite right to be concerned and ask critically if law makers considered that there might be costs associated with this new ISP law. Mandating that ISPs record, preserve and make available for governmental search all users’ digital histories for a year would, I’d imagine, significantly alter the way many people use the internet. Hence also disrupting the processes of institutional innovation currently at play in the digital world.

Law makers instead busily named it “the protecting children from internet pornographers act.” Why do I feel like the people who wield the power to regulate our technological future probably couldn’t be relied upon to program a TiVo?

Update: link should be fixed

Criminal versus civil law; wake up neocons!

So the interns at Cato and IHS battled it out in their annual debate a few days ago. It was a great discussion.

In my mind a major point of victory for team liberty over team virtue was that libertarians continuously insisted upon justifying the state’s use of violence and force when using legislating against behaviors. In other words, libertarians recognize the essential differences between the criminal law and civil processes; whereas the conservatives in the debate treated state made legal processes as a homogenous black box.

I’m tempted to challenge more forcefully the belief that drug use or even murder crimes have harmful effects upon some methodologically dubious definitions of “society.” Through most of human history these actions were effectively detered by civil rather than criminal legal mechanisms.

Prohibition, incarceration and militarization harm society far more explicitly and to greater magnitude.

Randian robot sex, and hard ons for social progress.

Though it’s been several months since my premier night viewing of Atlas Shrugged, I thought I’d write up my first impressions nonetheless.

Unfortunately, as a stand-alone film it gets an objective thumbs down. If you don’t know anything about Rand or her ideas you’re probably not going to leave the theater a true believer, probably not even a true understander.

On the other hand, fanboys (which I’ll admit to being to a certain degree) will definitely swoon when hella-romantical Henry gifts his wife a bracelet forged from the first batch of metal. For non-noobs to Rand, I suggest inviting thoughtful friends too impatient for a 2000 page schlep and discussing themes over dinner and drinks thereafter.

I am willing to defend the film and Rand from a certain form of criticism that I hear frequently – more frequently since the premier. To many readers, Rand doesn’t know how to write. Her characters are stiff emotionless clones of one another – what gives?

I get frustrated hearing this criticism of Rand, because I think it communicates more about the critic than about the nature of Rand’s ideas or style per se. In other words, “Rand’s characters are two dimensional” is just something that people who don’t understand Rand tend to say.

To many, Rand’s characters feel like robotic automatons akin to the creepy cyborgs of formal neo-classical economics. They act as if they are only motivated by money and self-interest. When these readers get to the parts of Rand’s novels about romantic relations it’s an awkward experience to say the least. Randian robot sex is cold, stiff and unpleasant. But this is the wrong way to read Rand, and unfortunately the opportunity for this misinterpretation is exaggerated rather than ameliorated by the cinematic adaptation.

My complaint about Rand in general is a minor one, she labeled and titled things poorly. Had only she had not been so overly confident as to call her system Objectivism. Randianism would have been just fine and arguably would have avoided many of her philosophical and or meta-physical shortcomings.

Selfishness is another word that Rand misuses in reference to her own ideas and characters. The romantic relationships between Rand’s characters do not reflect a strict definition of selfishness per se. The heroes of Rand’s novels are connected with regard to a common principle. Rather than awarding social approbation according to traditional social conventions (he’s so nice, she’s so hot, he’s so giving and caring), they award respect and admiration with regard to the real outcomes and influences of one another’s actions (Dagny runs one heckuva railroad). This is fundamentally a Smithian point – a methodological perspective that Rand borrows from economic science and in doing so she is an extremely talented writer in so far as she can articulate its complexity in the unconventional setting of fiction.

From this perspective the film suffers because society itself is a missing character. When one goes the long way through the written tome, she turns page after page of descriptive text about the state of Rand’s fictional world. Political drama, economic processes, union conflicts, etc. they are all described in detail with regard to how they effect the real populations of people out and about living within the world. Dagny’s incredible rails and Rearden’s nifty metals make these peoples’ lives better and the world itself a better place to live within. When one reads about what Rand’s heroes have done for the world, it is not as hard to see why one might get a hard on about it. Aside from a few swift montage sequences, this experience is relatively absent from the film.

Admittedly, I have no idea how such themes could have better been included.

Mike mofo’n Munger!

BAMF extraordinaire as usual!

The political law of the U.S. is a set of arbitrary, intrusive rules backed by overwhelming, irresistible physical force. It is the unavoidable implicatoin of the corrupt bargain made by those who think the alternative to coercive law is the Hobbesian state of nature. Letting people make their own choices is just not an option to you folks. So enjoy your police state, and STFU.

 

I agree with Munger as to the nature of the law, but I also doubt cops would spend much time shaking down children’s lemonade stand if there weren’t so many of them funded by so many dollars. Hard budget constraints and real resource scarcity make for a greater proportion of law enforcement resources to be used protecting against violence and property crimes relative to enforcing prohibitions and regulatory control. The better funded our police the more the police act according to the Public Choice interests of the state and the less responsive they are to the underlying preferences of our societal interests.