Cronyism

The problem of congested roads is explained by the absence pricing. For some strange reason, most analysts call this a "market failure".  Here is one of many examples.  But the failure to impose a policy is more accurately a policy failure (or government failure). The error shows up in most discussions of road pricing I have seen. 

(A notable exception is the best guide to highway planning I have read in recent years, Bob Poole's  Rethinking America's Highways.)

In this week's Econtalk, Russ Roberts interviews Anat Admati on the causes of the 2008 financial crisis. Both are unhappy that while Ben Bernanke and friends now take victory laps for having "saved us" from financial ruin, these are the people who got us into the mess by accepting low capital requirements and over-leveraging. Roberts and Admati agree that nothing has been learned and over-leveraging is still accepted -- as are "too big to fail" and bail-outs as an option.

Towards the end of the podcast, Admati calls it a "market failure" Roberts chimes in and says "government failure." They leave it at that.

It is both, it is crony capitalism, about which we do not talk enough. I went back to Baumol et al's Good Capitalism Bad Capitalism and found that cronyism is missing from their survey. Randall Holcombe's "Crony Capitalism By-Product of Big Government", as the title suggests, hits the nail on the head.

What to do? How do we get to smaller government? To a less over-reaching government? Both U.S.  political parties are big-government parties. Our third party, Trumpism, has rolled back some regulations but has embraced mercantilism in a big way. Holcombe alludes to the various economic freedom indices as a way to identify the problem. But a better index is needed.

We keep an eye on separation of church and state. An equal devotion is needed to the separation of business and state. No government agency can keep an eye on this. The documentation job awaits some of the bright folks at the various libertarian-leaning think tanks -- of which we now have a few.

Confusion

Socialists avoid confronting socialism's failures (and tragedies) by claiming that the "real" socialism has not yet been tried. The dodge seems to work in some circles. The leftward drift of half of America means ever more of this.

Writing almost 30 years ago, James Buchanan noted that "Socialism is Dead; Leviathan Lives ... The loss of faith in socialism has not been accompanied by a faith in markets. There remains a residual unwillingness to allow the market to organize itself." (WSJ, July 18, 1990).

Jonah Goldberg explores how and why the loss of faith has been avoided (by some) and why Leviathan is still with us. "Modern society's most important divide is between the external impersonal order of contracts, commerce and the personal order of family friends and community. We live in both realms simultaneously, even though the rules for different realms could not be more different ... Humans were not designed to live in the market order of contracts, money or impersonal rules, never mind the huge societies governed by a centralized state." (2018, p. 62). This is a leaf out of Hayek.

The centralized state Goldberg mentions is likely to rely on force and terror because it has no way to win people's minds and heart. But from a safe distance, this awfulness gets a pass via the strange logic mentioned at the top of this post. Goldberg cites "social-ism" the willful and dangerous delusion that the personal order of family friends and community can succeed at any scale.

Voting

Cognitive dissonance (holding two opposing ideas at the same time) is supposed to be stressful. Perhaps and perhaps not.

"Every vote counts" is uttered and repeated an uncountable number of times. But it is not true. At the margin, votes that count (in majoratorian situations) are the ones that tip the outcome. Such results are exceedingly rare to say the least. This means that the odds of my vote having any significance are almost zero.  When I tell my friends that I do not plan to vote tomorrow, most are incredulous. My simple explanations fall on deaf ears -- to be polite about it.

Go to a country that does not have a history of the popular vote and see people line up, often for hours, to cast their ballots. The thought that their integrity is respected to the point where they are invited to cast their vote thrills them. In that way, it thrills me too.

Trouble is that in our secular age, political action attracts those who need to believe and to join. The urge to say and do reprehensible things for "the team" is less than thrilling. 

Philosophers and social scientists

Here is Russ Roberts writing about lonely men with guns. Do read the whole essay.

I don’t think it’s a coincidence that almost all of the acts of mass murder and terrorism are committed by men, mostly lonely men, disaffected, alienated from modern life, alienated from the standard of success our culture aspires to, disconnected from those around them. No one pays much attention to them until people are forced to pay attention at the point of gun. No one pays much attention until the headlines that scream that these lonely men have finally achieved something people are going to have to notice.

Roberts writes about people with no love in their life. This is the real inequality, not the one we hear about so much from politicians and pundits.

We encounter many of the broken as street people in our major cities. Having a loose bill in hand to give them is all I can think of.

Philosophers write about the human condition and often end up wringing their hands via a nihilistic theoretical conclusion.  Desperation and the absence of happiness have been themes at least since the thinkers in Athens BC.  John Gray offers a wonderful and concise tour of many more writers' thoughts -- even including the views of grand nihilist, Marquis de Sade. Many of these thinkers are themselves serious depressives.

Social scientists tend not to be depressives or philosophers and, instead, they dig for explanations (stories) that suggest a "fix". Many espouse "programs". In quotes because the word has become cringy.

But does anyone really know how to confiscate millions (hundreds of millions) of firearms? Does anyone know how to treat the alienation from modern life that Roberts mentions?  Honesty demands that they admit they do not know.  Roberts essay is a good place to start.

Here is Timothy Taylor on kinlessness. Again, no "program" in sight that would make a difference. Offer a hand to the broken people you encounter.