I spent most of the last day of 2018 defending the political sociology of the @NiskanenCenter-style project of uniting self-identified or previously self-identified libertarians with progressives. Today I offer an intellectual critique and explain why I am no fellow traveler.
Let me start with a few caveats. First, I will focus almost exclusively on critique today. Many reading this will be familiar with my solution set; those who are not should check out e.g. radicalmarkets.com, papers.ssrn.com/sol3/papers.cf…, papers.ssrn.com/sol3/papers.cf…, @RadxChange
Furthermore, because I will only offer critique, I expect that nearly all of what I will say will be congenial to a group of folks I often strongly disagree with, such as @MattBruenig, @JuliusKrein and @MazzucatoM.
My perspective lies at the intersection of their intellectual critique of neoliberalism and the political sociology of the @NiskanenCenter worldview.
Second caveat, this will be relatively long, and yet only as long as can be sane on Twitter. I'd welcome a chance to present these views in detail in person as I view those attracted by @NiskanenCenter's vision as natural allies.
Third caveat, I will express my points mostly in the language of economics, not because I think this is the only or the best language, but because I think this is the language most deeply accepted by adherents of this school and thus least likely to be ignored by them.
Finally, while I am directly responding to the @NiskanenCenter project and most specifically to this document (niskanencenter.org/wp-content/upl…), my critique applies to a wide range of other views in the liberal individualist tradition.
This includes most of what usually goes under the heading "left-libertarianism", most people who think UBI and like ideas are cure-alls, most close adherents of philosophers like John Rawls, Ronald Dworkin and @pvpbrussels, etc.
One more caveat: I am going to focus on one particular line of critique, not because it is the only possible one nor because I believe it is exclusive or exhaustive,
But because I believe it is the deepest and most pernicious failure in this philosophy and the one whose solution would require the most systematic rethinking of the whole project, rather than just tweaks along the edges.
That issue is the problem of what one might call public goods, but is much broader than how many economists usually think of public goods and thus I will label the issue of increasing returns.
The structure of my argument is: 1) increasing returns are *the* central problem of political economy, 2) unsurprisingly given 1, they are at the center of almost every major political question today,
3) standard neo-liberalism capitalism, no matter how much social insurance you pile on top, offers no framework for grappling with increasing returns, 4) that the @NiskanenCenter project makes no progress on this and in fact willfully ignores pressing related policy questions
5) therefore the @NiskanenCenter project, as currently constituted, is an intellectual cul-de-sac and dangerous distraction from the serious project of moving beyond the Milton Friedman-style neoliberal project to something up to the challenges of our time.
First, why are increasing returns so important? Very simply, civilization is by definition, about increasing returns. If there were not increasing returns, we could all live in isolated huts or villages and be just as well off as we are today.
Cities, which are literally the basis of terms like "citizen" and "bourgeoisie", are increasing returns phenomena. All of the network technology over which this tweet storm is going out and all of the motivation for the project of political philosophy is increasing returns.
Thus any political philosophy, political economy, etc. that does not put increasing returns at its center and have a comprehensive approach to dealing with it is dead on arrival and simply misses the point of the whole exercise.
Second, beyond these abstract points, a majority of the major political problems of our time should be seen as outgrowths of a failure to deal with the problem of increasing returns in a coherent way. Let me give a few examples.
Network and data economies of scale effects are classic increasing returns phenomena and are widely seen as the reason for extreme market power in technology. Treating such systems as private property thus inevitably leads to monopoly.
There are huge economies of scale in portfolio management that are responsible for the horrific institutional investor monopoly problem.
The issues around zoning and land use on which so many left-libertarians focus these days are largely disputes over complementarities across plots' use and spillovers at different levels (@devonzuegel is particularly eloquent on this: devonzuegel.com/post/for-the-g…?).
Insurance pools have increasing returns, because of selection dynamics, and thus many of the issues around social insurance of various sorts should be thought of as issues of increasing returns.
Investment in information goods, whether "innovation" or news quality, is one of the most extreme examples of increasing returns as important information is available to all.
And most environmental issues are best seen as resources that bring benefits to many people if preserved. Global change is the most extreme example, where anything we do to the climate affects the welfare of literally everyone living on the planet.
Third, standard neo-liberal capitalism (think the most generous reading of Milton Friedman's Capitalism and Freedom, the Niskanen document or @lindsey_brink and Steve Telles's book) simply has no coherent framework for dealing with increasing returns.
There is an endless stream of work showing that the type of private property-and-competition based markets neoliberal capitalism utilizes do not work (well) in contexts with increasing returns. Hotelling (1938), Samuelson (1954), etc.
There are different ways to phrase it: with increasing returns, marginal cost pricing does not cover average costs; there is natural monopoly with increasing returns; there is a free-rider problem; private provision of public goods leads generically to only one contributor.
Now, you can put bandaids on this problem: a little tax-funded R+D here, a bit of social insurance there, a sprinkly of antimonopoly policy, etc. but ultimately these are all precisely the sort of kludgeocracy that @NiskanenCenter folk denounce.
Furthermore, to the extent that there is any method behind all of this, it is democracy based on a paradigm of one person one vote, which simply has never been claimed to have any of the virtues that are touted for markets under any remotely broad circumstances.
Now again, you can wrap 1p1v in a thousand kludges, with judges, representatives, checks and balances etc, and you probably do get somewhere better, just as with capitalism, but again, this is precisely the sort of kludgeocracy and elitist technocracy that
a) is really hard to explain to anyone especially among the public, b) is profoundly inelegant and usually adapts poorly to e.g changing social circumstances and technology, c) therefore regularly faces crises of legitimacy, as it is facing today.
And if that is the answer that in effect neoliberal capitalism offers to the central problem of political economy, I submit that is really not much of an answer at all.
Fourth, does the @NiskanenCenter project do anything on this issue? I would actually submit it makes backwards progress relative to our current intellectual milleu. I don't think our current milleu has grappled well with these issues, but there are seeds.
There is a growing anti-monopoly movement. There are growing attempts to use open source approaches to deal with collective goods. There is the excellent work of Elinor Ostrom and others on ways of addressing commons using informal mechanisms.
There's phenomenal work in sociology moving past atomistic conceptions of the economy. And there are some reasonably coherent attempts to address these issues by @JuliusKrein and @AmericanAffrs on the right and @MattBruenig and @PplPolicyProj on the left.
I do not agree with most of the substance in either of these visions and in fact believe both would lead us in a deeply dark direction, and in fact I view much of my goal to avoid and resist these dark directions. But again, staying here away from my solution set.
The key point is that the @NiskanenCenter focus on social insurance, "regulation" and a simplistic conception of the migration issue and total lack of attention to enormously growing concentrations of private power, lack of fundamental research funding, news quality
Looming environmental catastrophe, and pretty much anything else that falls under the heading of a public goods or increasing returns issue completely sidesteps and ignores essentially everything that is leading to the present crisis of the liberal order.
Thus while, again, I am deeply sympathetic as a matter of political sociology to their project of uniting self-identified libertarians with self-identified progressives (though I think they have pursued this in a way too elitist, technocratic, narrow and exclusionary way).
And I deeply share their terror at many of the profoundly illiberal solution sets that are out there and thus will probably end up voting in 2020 as most of their members will for whomever seems most likely to keep the boat aloft a bit longer to give us time to imagine solutions
As an intellectual project there is nothing I have seen yet that feels to me other than a reheating of precisely the sort of Milton Friedman-style neoliberalism that got us here.
Such leftovers are at this point beyond being rancid to the point of literally being poisonous, especially when they pose as a way out of our current quagmire, because they distract from the desperate task of actually formulating a liberal solution to the crisis we confront.
Despite the fact that on most direct policy issues they actually discuss I am basically aligned, this sort of thing has gone beyond being the opium to anyone and have become the opiod crisis of the policy and technocratic elites who are rapidly headed for a lethal overdose.
Also throw in here @EmmanuelMacron and @enmarchefr, the bulk of mainstream academic economists, most people in the top 10-.1% of the US income distribution who live in cosmopolitan cities, @tylercowen, and, to a far lesser degree, moderate Liberal Radicals like @TheEconomist.
So this is really not about picking on @NiskanenCenter per se (they are more a concrete representation of a far broader and more dominant tendency).
