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Brad DeLong speaks at a Cato event
Here is the closing part of his summary:
One way to understand Keynes's General Theory is that Say's Law is false in theory but that we can build the running code for limited, strategic interventions that will make Say's Law roughly true in practice. The modern American liberal economist's view of libertarianism is much the same: libertarianism is false in theory, but it is very much worth figuring out a set of limited, strategic interventions that will make the libertarian promises roughly true in practice.
Here is much more.
Posted by Tyler Cowen on January 15, 2009 at 07:35 AM in Philosophy, Political Science | Permalink
Comments
“Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.”
If only Delong and the rest of the Keynesian acolytes only really how much that applied to them.
Posted by: Winston at Jan 15, 2009 8:03:38 AM
It seems to me, the liberal take on libertarianism often boils down to "libertarians believe that natural forces work to establish or restore liberal preferences. And, because our preferences are not naturally enacted, libertarianism fails and we need government intervention."
I am willing to tolerate the downsides of industrialists having more power and individuals having more freedom. They are willing to tolerate the government having more power and its downsides. Often, they don't even consider the downsides to be downsides.
Posted by: Andrew at Jan 15, 2009 8:35:44 AM
DeLong says, "Adam Smith expected the imminent collapse of slavery."
Huh?
Smith lamented, "This institution therefore of slavery, which has taken place in the beginning of every society, has hardly any possibility of being abolished." Though unproductive in Smith's eyes, slavery persists because of the "love of domination and tyrannizing." (Lectures; 1762-3, 114-117, pp. 186-187 of my Glasgow edition)
I made the same comment on his blog. I won't hold my breath waiting for a reply.
Posted by: Roger Koppl at Jan 15, 2009 9:04:13 AM
Roger Koppl - Interesting. I hadn't heard that before. I also hadn't heard DeLong or anyone else mention Smith believed slavery would end, though, on its own. What might DeLong be talking about?
Posted by: jason voorhees at Jan 15, 2009 9:06:45 AM
DeLong's point about Say's Lay is false, I think, but at least coherent. But his second claim makes no sense. If the government has to achieve something by intervention, it's sure not libertarian. It's like saying, "Protestantism is false, but the Pope can approximate it."
Posted by: Bob Murphy at Jan 15, 2009 9:15:55 AM
He is wrong about the butcher. A truly self-interested butcher wouldn't kill his customer and sell him, because one of the customer's friends might come and take revenge. Cooperation serves everyone's best interests, even without a central authority.
Posted by: fin-tastic at Jan 15, 2009 9:20:25 AM
I agree with fin-tastic. DeLong's comment about the butcher is clearly wrong. I stopped reading.
Posted by: dave smith at Jan 15, 2009 9:38:33 AM
I don't believe that most modern American liberals think of their desired policies as "limited strategic interventions." Perhaps that's what DeLong would like them to think. It seems to me that Dan Klein's idea of "The People's Romance" is more important than anything whatsoever that is limited and strategic. Liberals commonly consider (sometimes implicitly in their arguments, but sometimes also explicitly) the institutions of public schooling and free health care to be more important than pesky claims about actual health and education outcomes.
One ballot can feed one persons desire to participate in people's romance. One ballot doesn't do much for improving one person's policy outcomes. Critical thinking about limited strategic interventions emotionally conflicts the people's romance.
Posted by: Alex J. at Jan 15, 2009 9:56:28 AM
One ballot can feed one persons desire to participate in people's romance. One ballot doesn't do much for improving one person's policy outcomes.
Maybe a PET scan will show the same areas activated by voting for socialists are activated when buying Powerball tickets.
Posted by: 8 at Jan 15, 2009 10:13:50 AM
Ok, this calls for liveblogging "Rehabilitation of Say's Law" by William Harold Hutt.
Posted by: Mr. Karla at Jan 15, 2009 10:43:37 AM
This calls for liveblogging "A Rehabilitation of Say's Law", by W. H. Hutt.
Posted by: Mr. Karla at Jan 15, 2009 10:47:18 AM
As a liberalish-libertarianish interested observer, I was disappointed with this defense of modern liberalism. As Andrew mentioned, I think he should have spent much more time addressing the downsides and critiques -- public choice economics being the most important challenge. In other words, moving forward, what are the engines for ensuring that gov't intervention is less corrupt, less a platform for rent-seeking, and less destructive of aggregate welfare?
I think there are interesting responses to these questions, involving possibilities such as:
1) New constitutional checks on power (e.g. a ban of "outright rent-seeking behavior", with some help from the Supreme Court to figure out the boundaries),
2) A much more robust pattern of civic engagement (encouraged by social networking technologies), combined with new government transparency regulations that propagate well-organized and comprehensive information on the internet,
3) More economics education in secondary school,
4) A new emphasis on individually directed morality, to reduce the need for some interventions.
I like Brad's idea that we should all strive for a self-directed world, even though we disagree on what if any interventions are justified in this world. I wish he had fleshed the point out a bit more though.
Posted by: mk at Jan 15, 2009 10:56:34 AM
Jason,
I think it's just made up hooey. Let's look quickly at DeLong's four points.
1. The Gilded Age was bad. Sure, if you object to improved welfare for the common man it was a disaster. That's why the US had so many immigrants.
2. The Great Depression was market failure. Sure, if you count the Fed as part of the market. The Federal Reserve System is privately owned, you know.
3. The persistence of unfree labor. Sure, if you ignore the role of capitalism in freeing the serfs and of the state in enforcing chattel slavery.
4. The information economy is pushing us from a Smithian world into a Schumpeterian world. Sure, if you think lower costs of publishing and disseminating ideas will discourage market entry, then the information age is an obvious threat to decentralized sources of information.
I think it's quite possible to be an informed, thinking, intellectually honest "liberal"in DeLong's sense. It's easy enough to make a list of prominent examples. I'm completely stumped, however, by DeLong's list of reasons for preferring his brand of liberalism to the real thing. How could he think that silliness is persuasive? Perhaps I lack imagination, but it's a complete head scratcher for me.
Posted by: Roger Koppl at Jan 15, 2009 11:12:35 AM
I agree with dave smith and fin-tastic. His comment about the butcher was so clearly wrong I'd have been embarrassed to make it.
I think he would have a difficult time explaining just how homicide is in the butcher's interest.
If the butcher..well, butchers (forgive me) his customers he denies himself the means by which he would provide himself with the other things that he needs. You don't build a house with steak, clothes with turkey, or take a chicken to work.
Posted by: MnM at Jan 15, 2009 12:54:08 PM
I *almost* stopped reading after the murderous butcher for the same reasons as dave, fin, and MnM. But I went through and decided the article wasn't too bad. DeLong's main point seemed to be that people are not economically rational, so the simple "libertarian" ideal market story isn't reality. That much I can agree with, but of course the obvious response is that there's no reason to think government is any more rational.
Liberals rarely seem to address that point. My theory is that most liberals are good people that want to do the right thing, and so they assume given the right election results it is not too difficult to assemble an able, benevolent executive branch. Personally, I think this is false because "managing" the economy is too complex to work, and also because government actors are under too many irrational external constraints.
Posted by: Dave at Jan 15, 2009 1:37:36 PM
DeLong completely bungles the case for classic liberalism. He starts off with an especially clueless piece by Keynes, in which Keynes argues that natural economic liberties must not exist since individuals don't always act in the 'public interest'. Not that they should not exist, mind you, but that they do not exist. Talk about a non-sequitur.
This sets the stage for a stream of blog posts about whether butchers acting in their own self-interest will murder their customers, the evils of the gilded age, is govenment intervention beneficial, and so on.
Posted by: Paul Johnson at Jan 15, 2009 1:58:45 PM
For the second time in 3 months I find myself completely disagreeing with Brad deLong in every possible way. Every.Possible.Way. Understand what this means from an Overcoming Bias point of view.
And yet I am a liberal. deLong makes me want to pull my hair out. Srsly. Aaaarrrgh. Eric Alterman could do this argument sooo much better, and did at Brooklyn College on Sept. 15.
Posted by: StreetWalker at Jan 15, 2009 2:34:13 PM
For the second time in 3 months I find myself completely disagreeing with Brad deLong in every possible way. Every.Possible.Way. Understand what this means from an Overcoming Bias point of view.
And yet I am a liberal. deLong makes me want to pull my hair out. Srsly. Aaaarrrgh. Eric Alterman could do this argument sooo much better, and did at Brooklyn College on Sept. 15.
Posted by: StreetWalker at Jan 15, 2009 2:34:34 PM
For the second time in 3 months I find myself completely disagreeing with Brad deLong in every possible way. Every.Possible.Way. Understand what this means from an Overcoming Bias point of view.
And yet I am a liberal. deLong makes me want to pull my hair out. Srsly. Aaaarrrgh. Eric Alterman could do this argument sooo much better, and did at Brooklyn College on Sept. 15.
Posted by: StreetWalker at Jan 15, 2009 2:35:50 PM
Agreed. I couldn't make it past his claim that a truly self-interested butcher would believe that murdering his customers improves the prospects for his business. No doubt he thinks the sentence clever but as any trial lawyer will tell you, beginning your argument with an easily refuted absurdity is invariably fatal to your case - just as murding your customers would doom your business (excepting the Grim Reaper's).
Posted by: Thanatos Savehn at Jan 15, 2009 6:09:54 PM
DeLong fails from the outset in that he doesn't understand libertariansim; he claims that libertarians believe that economic actors are entirely self-interested
This isn't a libertarian belief at all,* and the opposite is closer to the truth. That most people have at least some honesty and concern for others is an argument in favour of libertarianism, as it reduces the need for state intervention to force people to act as though they were honesty and charitable.
*except for the odd Ayn Rand fanatic, and even they are far more self-interested in theory than in reality.
Posted by: Timothy at Jan 15, 2009 6:44:25 PM
I think DeLong's confusion is more profound than the statement on his website today. The problem with the entire discussion seems to come from the basic theory behind the Stanford conference. From his site, it states that:
"That liberals and libertarians share philosophical origins is clearly implied by the common Latin root for both words, liberalis, meaning open or generous. Both philosophies advocate civil liberties, individual autonomy, limited state interference in private affairs, and a non-bellicose foreign policy."
The assumption that both words come from the same Latin root is correct, but the misconception comes from the fact that the definition of the word liberal his been discontinuous throughout the history of the English language. That is to say, liberal comes from the Latin, but "Liberal" and "Libertarian" come from two distinct, and contradictory meanings of the English word liberal. The best, or original, work on this is Berlin's "Two Meanings of Liberty," which distinguishes the positive from the negative. The fact that today's "Liberals" were yesterdays progressives, and simply adopted the word because of the connotations, and not the denotation, is what leads to the very important disconnect between the two schools of thought. That this has not happened in other Romance languages, languages much closer to Latin, is another indication of the fact that the similarity in wording is a function of obfuscation, and not of genuine root similarities. To attempt, as the organizers did, to harmonize the two disparate theories based on some similar views, and a similar word, is to engage in ad hoc argument of the worst kind.
So, DeLong starts from a fallacy, and that is the genesis of his error. Today's "Liberal" must rely, as DeLong states, on a central power to correct the ills he sees in society. Now, that may be a reasonable view, or it may not be, but the simple reliance on that central power puts it in direct opposition to what Libertarianism is, or what "liberalism" was, but that is to be expected when working forward from a contradiction. Were I to summarize his quote, I would say that today's Liberalism is simply the religion which leads certain individuals to believe that what a man does, and what he produces is not what he wants, and the aggregate actions and production of men in society is not what they want, and that what they really want is what our modern liberal wants, and, of course that the only way to fix that is through centralized action. Whether it is true religion or not, it certainly doesn't have much to do with the negative conception of liberty which forms the backbone of modern libertarianism.
Posted by: Matt at Jan 15, 2009 6:46:56 PM
1. The Gilded Age was bad. Sure, if you object to improved welfare for the common man it was a disaster. That's why the US had so many immigrants.
As Delong points out, what was bad about the Gilded Age was the increase in inequality and attendant increases in labor unrest and socialist/anarchist movements. Today, two of the most unequal countries in the world are Brazil and South Africa and I wouldn't hold out high hope for these two countries going down the path of free markets.
3. The persistence of unfree labor. Sure, if you ignore the role of capitalism in freeing the serfs and of the state in enforcing chattel slavery.
Sure, the state enforced slave owners "property rights" but what if it didn't? Do you think that slavery would have disappeared from the U.S. the minute the fugitive slave acts were repealed? The point here is that some optimists held that slavery was economically inefficient and would crumble under the weight of its wastefulness and inefficiency (I don't remember if Smith made this argument or not, but others certainly have). The available evidence from cotton plantations in the U.S. and sugar plantations in Brazil and tropical regions suggests otherwise.
4. The information economy is pushing us from a Smithian world into a Schumpeterian world. Sure, if you think lower costs of publishing and disseminating ideas will discourage market entry, then the information age is an obvious threat to decentralized sources of information.
Barriers to entry may simply be a consequence of consolidation and information clustering. As Delong himself has pointed out, it would be much more difficult to establish himself as a popular blogger if he were just starting out now rather than having started several years ago. Another example: it's not hard to start up a search engine at all yet this fact hasn't eroded Google's market share at all. The information business seems just as prone to winner-take-all outcomes as heavy industry. Yes, minor players can disseminate information cheaply and some will eventually dethrone the behemoths like Google (and become the new behemoths themselves) but it's clear there are major lock-in effects and economies of scale in the information economy.
Posted by: Ricardo at Jan 15, 2009 9:55:16 PM
Tyler, do you really think DeLong is worth paying attention to these days? Almost everything in his post is baseless or incorrect. He seems either ignorant or purposely attacking a straw man.
Posted by: Joe Banks at Jan 15, 2009 10:07:02 PM
Matt,
"Today's "Liberal" must rely, as DeLong states, on a central power to correct the ills he sees in society."
Exactly. All statist philosophies suffer from the fallacy of the divine state. They argue that liberty isn't possible, but then, the divine state isn't possible either. Hobbes has a point that the natural state of man is a war of all against all, but he neglects to mention that the natural state of the state is exploitation of the population under its control. Leviathan, therefore, can never be more than a temporary solution.
Posted by: Randy at Jan 16, 2009 4:19:12 AM
