I was somewhat fascinated by Randy Barnett’s post yesterday touting a short propaganda film from The Fund for American Studies that explains how capitalism makes everyone rich. One example, he writes about the film, is that rich people serve as early adopters of new technologies like the Internet, thus lowering their costs for everyone else. (I haven’t seen the movie yet, but I trust it mentions that vast amount of public money that went into the development of the Internet.) My view on this would only be worth a comment on the post, but since Randy has disabled comments I must perforce post here instead.
The post was so complimentary that I was driven to look up the Fund and its Form 990, only to discover that its president, Roger Ream, has one of those classic Washington career paths that involves working for Congress, then for various funds, foundations, and think tanks, then a brief stint back in Congress and then right back to the nonprofit sector. I’m sure it doesn’t make the film any more or less correct. But I still find a certain amusement in being lectured on the glories of the market by someone who, as far as his bio makes out, has never worked a day in the private sector in his life! Now, as a pro-capitalist academic, I can hardly criticize him; each of us, it seems, enjoys lecturing others on markets and competition while doing our level best to avoid both. But, as I say, I can still find it amusing. Although I do envy him his salary, which is around $250,000. Clearly I need to find a richer group of donors to flatter.
Posted by Paul Horwitz on July 8, 2011 at 06:25 AM
Comments
Yeah, we really should discount Adam Smith. I mean, he spent his entire career as either a tutor, university lecturer, academic scribbler, or government bureaucrat. What the hell did he know?
For that matter, did John Rawls ever exist behind a veil of ignorance? Time to jettison his theory!
Posted by: Lance | Jul 12, 2011 10:13:05 AM
Orin,
That’s what I understood you to be suggesting. But if you think *experts* are plagued by confirmation bias, why should anyone (including, and maybe especially, those experts) think that *you* are free of confirmation bias when you judge them?
Among other things, how can you judge how much of an expert’s views are the result of priors and how much the result of evidence if you don’t have expertise yourself?
Posted by: jonah gelbach | Jul 10, 2011 10:06:32 AM
Thanks, Jonah. Just to be clear, I wasn’t suggesting that confirmation bias had any special role in the views of professional economists — I was just suggesting that in judging the views of a group of experts, we need to know their priors.
Posted by: Orin Kerr | Jul 9, 2011 4:43:20 PM
Orin,
No sweat concerning your speculation on my social circle–I took no offense.
My reference in suggesting that you might be unlikely to be convinced by evidence was this statement of yours:
“My sense is that people who decide to study economics come in with a lot of prior views about markets: In a world governed by confirmation bias, I would be surprised if many people change their mind from what they believed before they began their studies and work.”
If confirmation bias is the dominant feature of trained economists’ views on positive economic questions, then surely things are much worse on average among the sample of people, including yourself, who haven’t chosen to specialize in economics. One of the things about actually studying economics is that it tends to be very de-biasing about economic questions. That’s because the field (at least in microeconomics) involves a generally accepted analytical framework so that points of disagreement can be sequestered into those that have to do with axiomatic assumptions and those that have to do with facts about the world that could in principle be measured.
Really, though, I was just trying to make a subtle point about the slippery nature of the confirmation-bias slope. Having read your own blog posts on law, which I think are insightful and thoughtful, I certainly don’t think you are unconvinceable by evidence, at least concerning your field of competence and expertise. So perhaps I was being a bit flip myself.
I am glad, in any case, that we agree that more people should study economics!
Posted by: jonah gelbach | Jul 9, 2011 1:42:21 PM
“But I still find a certain amusement in being lectured on the glories of the market by someone who, as far as his bio makes out, has never worked a day in the private sector in his life!”
This makes as much sense as “I still find a certain amusement in being lectured on the glories of modern medicine by someone who refused to even take high school biology, much less become a medical researcher himself.”
Maybe less so: one of the glories of the market is that it creates sufficient excessive wealth for the establishment of think tanks and whatnot.
Posted by: David Bernstein | Jul 9, 2011 8:01:24 AM
Jonah,
First, my apologies for my flip comments about you not hanging out with libertarians and the like — that was uncalled for, and a bit silly of me.
On the merits, I think the problem is that there are two different issues: The libertarian position on a given issue, and the views of people who are self-described libertarians. I see them as distinct questions. The libertarian position on any question is a theoretical question, based on a particular understanding of what libertarianism is. On the other hand, real people who call themselves libertarians have much more complicated and messy views, reflecting the reality that real flesh-and-blood people can use labels like “libertarian” only as some sort of shorthand for what they think. Given that, it seems obvious to me that there is a difference between the libertarian position and the views of people labeled libertarians: One is an abstraction about an ideal, the other is the actually-held positions of real people.
Finally, I’m not sure why my question seeking data suggests I would be unpersuaded by data. I meant the question genuinely, and I’m really curious what the answer actually is. And of course I agree that it would be good for more libertarians to study more economics. I would broaden that: It would be good for everyone to study more economics, whether they are libertarians or not.
Posted by: Orin Kerr | Jul 8, 2011 10:05:42 PM
Orin,
I think my comment was quite clear that, in stating that “libertarians seem to have the same policy preferences in all settings” was responding to your statement that “The libertarian position is … that society is better off in various ways with less government intervention in individual choices, whatever those choices are.” [I tried to underline the word “whatever,” but I appear to have failed; maybe the emphasis would have made my point clearer.]
Moreover, I think my criticism of that position is also quite clear–that there are good reasons to disagree with it on analytical and instrumental grounds; that leaves, of course, first principles as a basis to accept *your* statement of “the libertarian position.” And the role of first principles in libertarians’ economic policy views (less regulation is always better than more) was my point.
I’m surprised that you seem to see no contradiction between your original statement of “[t]he libertarian position” concerning the desirability of “whatever” choices people make in markets with your later libertarians-are-so-heterogeneous statement. Look, either libertarians have a core position that government should stay out of the economy, or they don’t. If they don’t, then you have mis-stated “the libertarian position.” If “libertarians” are open to regulations that improve social welfare in the utilitarian sense, then they aren’t in any important way different from liberals (or neoclassicals, to use the economics profession’s term).
As for your speculation about economists and confirmation bias, well, your premise suggests you may be unlikely to be convinced otherwise, even by evidence. But I can tell you that my views changed quite a bit as a result of studying, teaching, and publishing in economics. And actually, they changed in the direction of favoring less, rather than more, regulation as a rule. One of the things I like about economic methodology is that taking it seriously typically leads people to reconsider their baseline beliefs. So, to parry your claim, maybe it would be a good thing if more libertarians studied economics more seriously. Maybe you could even start a trend–I can tell you that it’s an intellectually rewarding thing to open oneself up to a new discipline.
Finally, you may think I don’t hang out with a lot of libertarians, but you are wrong about that. So, perhaps the more pertinent point is that you don’t know much about the people I hang out with!
Posted by: jonah gelbach | Jul 8, 2011 6:09:44 PM
What’s amusing to me is the assertion that capitalism makes everyone rich. That’s risible. It’s always interesting to see the next iteration of arguments the rich proffer to lower and middle-class people to excuse why the wealthy accumulate more and more fruits of American capitalism. “You’re poor because we bought the first cell phone” is certainly creative though.
Posted by: Brando | Jul 8, 2011 2:33:31 PM
Jonah,
I disagree, as I believe you are confusing the fact that someone has a view with the process of coming to hold that view. The fact that someone has a view does not tell you why they have that view: People have libertarian views for the same weird mix of reasons why people have other views. Your generalization that “libertarians seem to have the same policy preferences in all settings” makes me think you don’t hang out with a lot of libertarians. In my experience, at least, self-described libertarians have the same mix of views that other people have: There is no one uniform view, or an automatic application of it in “all settings.” That’s my experience, at least.
As for the views of economists, I think the relevant question is not what views economists hold, but rather whether studying and working in economics changes the views that people hold. My sense is that people who decide to study economics come in with a lot of prior views about markets: In a world governed by confirmation bias, I would be surprised if many people change their mind from what they believed before they began their studies and work. But if there’s any real data on that point, I’d be interested in knowing what it is.
Posted by: Orin Kerr | Jul 8, 2011 1:01:06 PM
I’ve long thought that economic libertarianism is a religion whose policy conclusions are really just axiomatic premises. Perhaps Orin agrees; above, he writes:
“The libertarian position is … that society is better off in various ways with less government intervention in individual choices, whatever those choices are.”
I think this is well stated. And it’s also why so many economists–who spend much of their time thinking carefully about how markets work–are not libertarians. There are some types of goods and services for which there are good reasons to think unregulated markets will work well. And there are others for which there are good reasons to think unregulated markets don’t work very well. Yet libertarians seem to have the same policy preferences in all settings.
Posted by: jonah gelbach | Jul 8, 2011 11:45:08 AM
And to respond to your last point, I certainly assume that private foundations endowed by wealthy people or their estates are in no way consistent with libertarianism. Similarly, I think one can be an egalitarian liberal who works at a white-shoe law firm or large corporation, or a strong believer in federalism and states’ rights who wouldn’t be caught dead clerking for a state court or working in a state legislature. I just think those choices are influenced not by deep philosophical views than by a concern for prestige and because, to put it briefly, the cocktail parties are better the higher up you go.
Posted by: Paul Horwitz | Jul 8, 2011 11:00:27 AM
Orin, I admit that I tend across the board (to be slightly skeptical of arguments [even by the person in question] of this sort, or perhaps more precisely I tend to think that these choices reveal a variety of preferences (for prestige, wealth, self-image, and other sorts of personal utility) rather than some kind of self-sacrificing nobility. (And I’m not critical of that! I just think this more accurately describes the set of human motives.) But while I might therefore describe things differently, I have no real problem with anything you’re saying. Heck, I don’t even think I used the term irony! Even if there are reasons for these choices, I think one can still be amused by them (as I am, for instance, by myself and other academics and our self-images) without being especially harsh or catty about it or thinking it proves some deep inconsistency.
Posted by: Paul Horwitz | Jul 8, 2011 10:55:53 AM
I should add one more thing, which is perhaps obvious but perhaps not: The libertarian position is not a position that everyone should be in the for-profit sector. It is also not a position that everyone should want to get as rich as they can get. Rather, it’s a position that society is better off in various ways with less government intervention in individual choices, whatever those choices are. As a result, a person’s individual decision to work in a thinktank versus work at a hedge fund or sell widgets is not a choice that has any particular valence from the standpoint of libertarianism.
Posted by: Orin Kerr | Jul 8, 2011 10:54:44 AM
Paul,
Anything is possible: I don’t know Ream, and have never heard of him until your post. At the same time, I know a lot of smart libertarian activists who have decided that they are more passionate about helping the world than getting rich themselves, and who therefore have decided not to go into finance or biglaw and to instead have a public interest job pushing free markets.
Perhaps the problem is that there is a pretty important difference between (a) believing that less regulated markets are better for society as a whole than are more regulated markets, and (b) deciding to spend or not spend one’s time in the for-profit sector. The former is about the impact on society of a particular set of legal rules, and the latter is a decision of what jobs to do among the options available to you in the present market. I think they’re pretty different questions, so I don’t think I see the irony you see.
Posted by: Orin Kerr | Jul 8, 2011 10:44:47 AM
Fair enough, Orin. Note that I merely pronounced myself amused, not outraged. The only thing I might take issue with is any implication (not that you necessarily implied it, but your comment could be read that way) that the individual in this case, or many such individuals cosseted in these sorts of institutions, actually want to do the job they are advocating about but too busy advocating about it to actually do. I have never met him and I don’t want to overassume, but of course it is just possible that Ream, who appears to be a champion of the private sector and skeptical of government bureaucracies, actually wanted to be a government bureaucrat and then be well-paid in the nonprofit sector, and has relatively little interest in exposing himself to the hazards and indignities of the private sector. Those are his revealed preferences, aren’t they? Similarly, I suspect that many well-paid, comfortably living academics who write about direct action, social movements, street justice, or what have you are not people who would go out and do those things if only they weren’t tied down to a tenured position and a nice three-course load at some university.
Posted by: Paul Horwitz | Jul 8, 2011 9:50:41 AM
I suppose it’s the conundrum of the committed advocate: Being an advocate can be a full time job, and it means you can’t do the job that you are advocating about.
Posted by: Orin Kerr | Jul 8, 2011 9:37:59 AM