In a recently published article for the journal Democracy, Michael Lind of the New America Foundation lays out “The Case for Goliath” (registration required) — i.e., for returning to the good old days of price-and-entry regulation and cartelized industries. No, seriously.

I’ll give Lind credit for daring to go where his fellow devotees of “nostalgianomics” fear to tread.  Many on the left these days look back fondly at the ’50s and ’60s when activist government and strong unions coincided with a narrowing income distribution. What they fail to recognize, or at least admit, is that the political economy of that supposed golden age rested on a systematic muting of competition, both by circumstance and deliberate policy.  The devastation of Europe and Japan in World War II, price-and-entry controls, high trade barriers, and the threat of antitrust enforcement against industry leaders all combined to make heavy unionization and above-market wages for union workers economically viable.

This glaring oversight is understandable. There is, after all, overwhelming economic evidence that competition beats cartelization of industry hands down. When government restricts entry by new firms, the predictable result is a stifling of innovation. For example, consider this admission by former FCC chairman Michael Powell: “Because the history of the FCC is, when something happens that it doesn’t understand, kill it. We tried to kill cable. We tried to kill long-distance. When [MCI founder] Bill McGowan starting stringing out microwave towers that threatened AT&T, the FCC tried to stop him. The FCC tried to kill cable because it was going to threaten broadcasting.” (For more details on the the FCC’s lamentable track record, see here.)

The upshot is that progressive fantasies of a return to the good old days are just that — fantasies. Private-sector unions have withered and shrunk not because of changes in labor law, but because unionized firms haven’t been able to hack it in the new, more competitive marketplace (see “Auto industry, U.S.”). So the only way to get back to the days of Big Labor is by throttling the main engine of innovation and productivity: competition. And, well, that just doesn’t sound very progressive, does it?

Lind, though, grasps the nettle and chooses cartels and unions over economic progress. He does try to argue that we can have our cake and eat it too, but his case boils down to a crude post hoc ergo propter hoc fallacy: the big move toward cartelization in the ’30s was followed by good times in the ’50s and ’60s (let’s not talk about the ’70s), so therefore cartelization was good for the economy!  Yes, and the Union won the Civil War with inferior generals, so perhaps poor military leadership is a key to victory. The fact is, the strong economic performance of the early postwar decades occurred in spite of, not because of, widespread restrictions on competition.

Though the anticompetitive nostrums Lind peddles are pure poison, he nonetheless deserves commendation. By identifying correctly the link between cartelization and strong unions, Lind highlights the essentially reactionary nature of progressives’ infatuation with Big Labor. He has therefore, however unwittingly, performed a public service.

Michael Lind’s Economic Philistinism is a post from Cato @ Liberty - Cato Institute Blog

If you’re unclear what’s wrong with conservatism these days, I urge you to check out the tragicomic dustup accidentally provoked last week by my colleague Jerry Taylor at National Review Online’s “The Corner” blog.

I don’t want to give a blow-by-blow recount of the fracas, but happily a convenient compendium of the relevant links is provided here. Go read the whole thing; you’ll be entertained, that’s for sure. For present purposes, suffice it to say that Jerry made two basic points: (1) talk radio hosts Rush Limbaugh and Sean Hannity are not popular outside the conservative movement; and (2) the two have a habit of making “dodgy” arguments even when their positions are sound. He might have added that the sky is blue and A comes before Z. For his effrontery Jerry was verbally beaten to a pulp by his fellow Cornerites.

The whole thing seems like an updated version of the Emperor’s New Clothes, except this time the crowd turns on the truth-telling kid and gives him the Rodney King treatment. And that response to Jerry’s innocent and obvious points captures the essence of what has gone wrong with the conservative movement. That the flagship publication of the movement will brook no criticism of demagogic blowhards like Limbaugh and Hannity says it all:  A movement founded on the premise that “ideas have consequences” has suffered a calamitous decline in intellectual standards.

Richard Posner agrees. In a recent blog post, he offered this withering assessment of the state of the conservative mind:

My theme is the intellectual decline of conservatism, and it is notable that the policies of the new conservatism are powered largely by emotion and religion and have for the most part weak intellectual groundings. That the policies are weak in conception, have largely failed in execution, and are political flops is therefore unsurprising. The major blows to conservatism, culminating in the election and programs of Obama, have been fourfold: the failure of military force to achieve U.S. foreign policy objectives; the inanity of trying to substitute will for intellect, as in the denial of global warming, the use of religious criteria in the selection of public officials, the neglect of managment and expertise in government; a continued preoccupation with abortion; and fiscal incontinence in the form of massive budget deficits, the Medicare drug plan, excessive foreign borrowing, and asset-price inflation.

By the fall of 2008, the face of the Republican Party had become Sarah Palin and Joe the Plumber. Conservative intellectuals had no party.

I don’t endorse every detail of Posner’s bill of indictment, but the broad thrust is correct. Movement conservatism has regressed to something like the days before National Review was founded — back when Lionel Trilling could say that conservatism consisted of nothing but “irritable mental gestures which seek to resemble ideas.” And as Jerry’s trip to the woodshed demonstrates, those gestures can be very irritable indeed! Conservatism today has degenerated into a species of especially unattractive populism, pandering to the pro-torture-and-wiretapping, anti-gay-and-Mexican prejudices of a dwindling, increasingly sectarian, increasingly regional “base.”

Some who sympathize with libertarian and free-market causes are cheered by the anti-government rhetoric and Tea Party theatrics now increasingly in evidence on the right. Perhaps, they think, the old Goldwater-Reagan conservatism is making a comeback. Sorry, but I seriously doubt it. On the contrary, I worry that good free-market ideas are going to get tainted by association with an increasingly brutish identity politics for angry white guys and the women who love them.

In order to make gains for the cause of limited government, we need to convince smart people that we are right. We need to win the battle of ideas in the intellectual realm by making better arguments than our opponents, and we need to educate the public so that it is less susceptible over time to “rational irrationality.” None of this can be accomplished by consorting with and apologizing for merchants of intellectual junk food, or by making common cause with some of the ugliest cultural attitudes in contemporary America. Greater economic freedom will not come with pitchforks and torches; it will come, as it has in the past, by reshaping the elite consensus.

The Closing of the Conservative Mind is a post from Cato @ Liberty - Cato Institute Blog

In a recent post commenting on my new Cato paper, Matt Yglesias just doesn’t get why I would accuse Paul Krugman of peddling nostalgia for the good old days of his boyhood. Indeed, Matt says my whole argument is “kind of silly.” Here’s the gist of Matt’s critique:

In his paper, Lindsey takes the unusual-for-a-libertarian tack of agreeing with Krugman (and others) that public policy changes have played an important role [in increasing inequality]. But he argues that the changes have mostly been changes that, on net, are positive. So it’s wrong of Krugman to espouse nostalgianomics and support a return to the policies of the 1950s. Which is fine, except I read almost every Krugman column and I’ve read Conscience of a Liberal (and, indeed, other works of Krugmanania such as Pop Internationalism and Peddling Prosperity) and it’s not as if the book ends with a call for the return of comprehensive regulation of airline fares or the re-establishment of the AT&T monopoly. To observe that the growth of inequality has policy roots isn’t to say that the right response to it is to methodically reverse every policy change of the past thirty years. It’s simply to deny the previous conventional wisdom — that it would be impossible to reverse the growing inequality of our society.

I think Matt misunderstands both my argument and what Krugman has been doing. I quite agree that Krugman doesn’t want a full-scale reinstatement of the corporatist, cartelistic policies of yesteryear. I say as much in the paper. What Krugman does want, however, is to portray the economic policies of the early postwar decades as an inspiration for progressives today — an example of how activist, interventionist government can simultaneously promote growth and reduce inequality. To quote Krugman’s Conscience of a Liberal: “During the thirties and forties, liberals managed to achieve a remarkable reduction in income inequality, with almost entirely positive effects on the economy as a whole. The men and women behind that achievement offer today’s liberals an object lesson in the difference leadership can make.”

To get to that ideologically convenient punch line, Krugman is forced to systematically misrepresent the policies and culture of the early postwar decades. He has to leave out all the things he doesn’t like, all the things that virtually all his fellow economists and fellow progressives don’t like, about the supposedly good old days — for example, the widespread cartelization efforts of the thirties, farm supports, price and entry controls on large sectors of the economy, restrictions on retail competition, high trade barriers, racist immigration laws, and the sexist confinement of working women to a pink collar ghetto. All of these contributed to the compression of incomes, yet they don’t serve Krugman’s ideological purposes. So he ignores them. That’s nostalgia-mongering, plain and simple: the selective recall of the past to make it seem better than it really was.

The relevance of all this to today’s situation is both real and important. Progressives have returned to power, and because of the current economic crisis the policymaking environment is incredibly fluid. Big changes are possible, indeed almost inevitable. In particular, proposals to substitute government control for market competition on a massive scale are now on the table: large-scale industrial policy in the name of creating “green” jobs, a full-court press to restore the power of private-sector unions, a qualitative increase in government’s role in health care, and “temporary” (such a dangerous word in Washington) government control of large parts of the financial system. We run the risk right now of making disastrous mistakes that will haunt us for many years to come. And that risk is exacerbated by the nostalgic fantasy, peddled by Krugman and others, that the record of the early postwar decades shows that Big Government and Big Labor are actually good for the economy.

Nostalgianomics: If the Shoe Fits… is a post from Cato @ Liberty - Cato Institute Blog

In an article for Slate (another version appears in Newsweek) entitled “The End of Libertarianism,” Jacob Weisberg mocks libertarians and other free-market supporters for arguing that interventionist government policies contributed to the financial crisis. In italicized exasperation he cries, “Haven’t you people done enough harm already?” According to Weisberg, it’s already clear that, when it comes to what caused the meltdown, “any competent forensic work has to put the libertarian theory of self-regulating financial markets at the scene of the crime.” Consequently, he argues, libertarians in general have now been utterly discredited. “They are bankrupt,” he concludes, “and this time, there will be no bailout.”

In firing this broadside, Weisberg poses as the pragmatic, empirically minded anti-ideologue. In fact, he is engaging in the lowest and most intellectually trivial form of ideological hack work.

As every good hack does, he bulls ahead with completely unjustified certainty. We’ve just experienced a global disruption of financial markets on a scale not seen in seven decades. And we’re still in the middle of it: the ultimate extent, severity, and consequences of this crisis remain unknown. Yet Weisberg can already sum up the story in a single sentence: the libertarians did it!

But consider the fact that it wasn’t until Milton Friedman and Anna Schwartz’s Monetary History of the United States — published in 1963, three decades after the event — that our contemporary understanding of the causes of the Great Depression began to take shape. That understanding has been further refined by contributions from, among others, Ben Bernanke and Barry Eichengreen during the 1980s and ’90s.

So serious people will be debating what triggered the current crisis for a long time to come. I’ve been reading voraciously in recent weeks, trying to get some handle on what’s going on, and I can tell you that there is nothing like a consensus among scholars yet — and certainly not a consensus in favor of some simple, monocausal explanation.

With regard to government interventionism as a cause of the crisis, Charles Calomiris and Peter Wallison have marshalled strong evidence that Fannie and Freddie played a major role in inflating the real estate bubble. Despite the fact that these two gentlemen have forgotten more about financial markets than Weisberg will ever know, Weisberg dismisses their analysis as not only wrong, but risible.

Here’s what I think, at least at this point. I think the whole system failed. Without a doubt, private actors succumbed to bubble psychology and perverse incentives, and their risk-taking grew increasingly reckless. Yet Weisberg’s simplistic morality tale that good prudent liberals were foiled by go-go free-marketeers doesn’t come close to mapping reality accurately. When exactly did Democrats try to arrest and reverse the steady relaxation of lending standards? When did they try to rein in the GSEs? Meanwhile, European banks are being battered by this crisis as well. Does anybody really think that European financial regulators are closet libertarians?

Far be it from Weisberg, though, to let such inconvenient questions get in the way of his cheap ideological point-scoring. Indeed, he isn’t content just to blame libertarianism for the financial crisis. He goes so far as to claim that libertarianism as a whole has now been decisively repudiated. Wow, talk about contagion! Because of what some people said about financial regulation, we no longer have to pay any attention to what other people say about trade, health care, energy, taxes, federal spending, etc. Here Weisberg further burnishes his hack credentials by demonstrating his facility with the wild, unsubstantiated smear.

To be truly shameless, a hack needs to mix his smears with double standards. And, bless him, Weisberg comes through once again. If one (alleged) error means we never have to listen to someone again, why is anybody still listening to Jacob Weisberg? After all, Weisberg admits that he “blew the biggest foreign-policy decision of the past decade” by supporting the Iraq war. (Full disclosure: I blew it, too, but my colleagues at Cato — whom Weisberg wants to write off for all time — got it right.) By his own standard, then, Weisberg should have had his pundit card permanently revoked.

All too aware of my own fallibility, I’m a more forgiving sort. But with this sloppy, shoddily reasoned attack on me and my colleagues (Cato and Reason, where I’m on the masthead as a contributing editor, are both mentioned by name), Weisberg is definitely testing my limits.

The End of Jacob Weisberg is a post from Cato @ Liberty - Cato Institute Blog

I read in Robert Novak’s column this morning that Mike Huckabee held a fundraiser earlier this week at the Houston home of Dr. Steven Hotze. As Novak notes, Hotze is “a leader in the highly conservative Christian Reconstruction movement.”

Christian Reconstructionists, for those unfamiliar with the term, are Religious Right radicals who believe that America, and the rest of the world besides, should be governed in accordance with strict Biblical law. And yes, that includes stoning adulterers. Here’s a snippet from “A Manifesto for the Christian Church,” a 1986 document from an outfit called the Coalition on Revival that was signed by, among others, Steven Hotze:

We affirm that the Bible is not only God’s statements to us regarding religion, salvation, eternity, and righteousness, but also the final measurement and depository of certain fundamental facts of reality and basic principles that God wants all mankind to know in the sphere of law, government, economics, business, education, arts and communication, medicine, psychology, and science. All theories and practices of these spheres of life are only true, right, and realistic to the degree that they agree with the Bible.

For more, check out this audio clip of Hotze from back in 1990. Over the years, Hotze has achieved some prominence for his anti-abortion and anti-gay activism. Also, the good doctor appears to be a total quack.

Meanwhile, Novak reports that among the members of the fundraiser’s host committee was Baptist minister Rick Scarborough. The founder of Vision America and a self-described “Christocrat,” Scarborough made news earlier this year when he argued that the HPV vaccine improperly interferes with God’s punishment of sexual license.

Just when you thought the Huckabee campaign couldn’t get any creepier….

[cross-posted from www.brinklindsey.com]

Follow Huckabee’s Money is a post from Cato @ Liberty - Cato Institute Blog

Paul Krugman’s transformation into a Howard Beale wannabe continues to (take your pick) astound/amuse/sadden. In today’s column, Krugman blasts Barack Obama for his “naïve” refusal to demonize those with whom he disagrees on public policy issues. Siding instead with John Edwards, he endorses the view that “America needs another F.D.R. — a polarizing figure, the object of much hatred from the right, who nonetheless succeeded in making big changes.”

Hmm, who’s the one being naïve here? Let’s recall that F.D.R. won the presidency in the depths of the worst economic cataclysm in American history — public blame for which fell squarely on his partisan and ideological opponents. Consequently, F.D.R. entered the White House with 313 fellow Democrats in the House and 61 in the Senate. Under the circumstances, it is entirely understandable that he didn’t worry too much about maintaining bipartisan good feeling.

But does anybody think that the political environment in 2009 will be remotely similar to that of 1933? Even assuming that a Democrat wins the White House and Democratic majorities in both houses of Congress are maintained, how likely is it that “big changes” are going to occur without some significant level of Republican support?

Based, no doubt, on the direct line to vox populi afforded him by his twin perches at the New York Times and Princeton University, Krugman is convinced that the hour of the angry populist is at hand. “[T]here’s every reason to believe,” he writes, “that the Democrats can win big next year if they run with that populist tide.” Krugman cites as confirming evidence CNN and FoxNews focus groups that declared Edwards the winner of the most recent Democratic debate. He’s curiously silent, however, about all the other polls that show Edwards trailing badly behind the more centrist Hillary Clinton and Obama.

At the end of his column, Krugman accuses those who long for a less vitriolic politics of “projecting their own desires onto the public.”

That’s funny.

[cross-posted from www.brinklindsey.com]

Krugman’s Populist Fantasies is a post from Cato @ Liberty - Cato Institute Blog

Michael Lind is at it again, proclaiming the death of libertarianism on the op-ed pages of the Financial Times. “The two great trends now,” he writes, “are the collapse of libertarianism as a political force and the rise of economic populism.”

In the piece Lind provides a potted history of America’s evolving political economy. In the opening act of 1932-1968, New Deal welfare-state liberalism occupied the political center, flanked on the left by economic populism and on the right by Eisenhower-style “dime store New Deal” conservatism. Then came the shift to the right during 1968-2004, when welfare-state liberalism was shunted to the left, a newly assertive libertarianism occupied the right, and moderate conservatism commanded the center. Now, according to Lind, anxieties over globalization have led to the rout of the libertarians and the rebirth of populism. So we’re back to where we began, with welfare-state liberalism in the center (where, according to Lind, it rightfully belongs).

I’ll concede that we’ve seen a cyclical shift in recent years somewhat along the lines Lind describes. The political terrain has become more difficult for supporters of free markets and limited government, and more inviting for Lou Dobbsian populism.

But we need to be careful to distinguish between cyclical and secular change. Lind focuses on the back-and-forth of the pendulum and misses the fact that the whole clock has been moving. And it’s been moving in a generally libertarian direction.

Lind merrily proclaims that welfare-state liberalism has reclaimed the center that it occupied during 1932-1968. But he ignores the fact that welfare-state liberals today are dramatically more libertarian on economic issues than their predecessors in their parents’ and grandparents’ generations. Nobody these days seriously supports a return to a 70% top income-tax rate, or Keynesian fine-tuning, or interest-rate controls for banks, or the phone monopoly, or regulated trucking; nobody touts nationalization or wage-and-price controls as cures for what ails.

The economy today is dramatically more competitive and entrepreneurial today, and markets are dramatically less regulated, than was the case a few decades ago. And notwithstanding Lind’s fond hopes for a return of the New Deal liberal ascendancy, there is little reason to believe that this huge secular shift is going to be reversed in the foreseeable future.

Lind on Libertarianism is a post from Cato @ Liberty - Cato Institute Blog

In a recent appearance on bloggingheads.tv with Mark Schmitt, I expressed disdain for the current spate of conservative-bashing books by Jonathan Chait, Greg Anrig, and Paul Krugman. Now don’t get me wrong: conservativism deserves some fairly spirited bashing these days. But what I objected to about these books was their crude partisanship — specifically, their grossly distorted, black-hats-versus-white-hats version of recent American political history.

I didn’t get a chance there to flesh out my criticisms in any detail, so I’d like to do a little bit of that here. And thanks again to bloggingheads.tv (if you’re not familiar with it, it’s really a terrific site), I’ve got an excellent jumping-off point: an interview of Paul Krugman by none other than Mario Cuomo. Cuomo, it turns out, is an excellent interviewer, carefully drawing out Krugman’s views and gently challenging him at a number of points. And the picture of Krugman that emerges is one of a man completely besotted with ideological enthusiasm.

You have to remember who Paul Krugman is, or at least who he was: an immensely talented economist, winner of the John Bates Clark medal, capable of analytical ingenuity at the most rarefied level and simultaneously a gifted popularizer of complex economic ideas. So how can someone with so much brainpower, with such talent for subtlety and insight, say something like this? Or this?

Let’s focus on these two snippets. In the first, Krugman says that the middle-class society he grew up in (i.e., the American political economy of the quarter-century after World War II) did not evolve by the invisible hand of the market; it was created by FDR and the New Deal. Meanwhile, the “second Gilded Age” we now live in (i.e., the American political economy of the past quarter-century) was created by Reagan and other right-wing politicians.

And in the second clip, Krugman defines liberalism as the idea that we are our brothers’ keepers, and that government needs to ensure a basic minimum for all citizens. Conservatives, on the other hand, believe “you’re on your own.”

In these clips we see, not subtlety or insight or analytical ingenuity, but the Manichean worldview of the true believer: one mass political movement, defined by its noble intentions, accomplishes unalloyed good, while a rival mass political movement, motivated by base and selfish values, works to undo that good.

For an alternative to Krugman’s stick-figure morality play, you can read my book on the coming of mass prosperity and its cultural and political consequences. For present purposes, though, note just a few things that Krugman’s FDR worship/Reagan demonization skips over:

• the extent to which widespread prosperity was the result of impersonal market competition rather than benevolent politicians
• the extent to which the “great compression” of the early postwar decades was created by the cataclysms of depression and total war
• the extent to which the New Deal included policies that most economists today of whatever ideological persuasion would regard as utterly wrongheaded (e.g., the farm subsidies regime of the Agricultural Adjustment Act, and the industrial cartelization attempted by the National Industrial Recovery Act)
• the heavy reliance of the New Deal political coalition on support from southern segregationists, and the consequences of that reliance for the shape of many New Deal policies
• the fact that the postwar system of political economy led after a couple of decades to stagflation and a breakdown in productivity growth
• the fact that one after another unionized American industry proved incapable of keeping pace with foreign competition during the ’70s and ’80s, and thus that business as usual was unsustainable
• the fact that Great Society social programs were followed, not entirely coincidentally, by an explosion of crime, urban riots, family breakdown, and welfare dependency
• the fact that Cold War liberal internationalism produced the Vietnam debacle
• the fact that the New Left and the ’60s counterculture exerted powerful influences on reshaping the character of American liberalism, with important consequences for the appeal of that liberalism to traditionally Democratic working-class constituencies
• the fact that the sweeping economic deregulation of the ’70s and ’80s enjoyed bipartisan support (much of it occurred during the Carter administration)
• the extent to which the increase in measured income inequality reflects demographic rather than economic or public policy changes (e.g., more single-parent households, more dual-earner households, more immigration, older population, better-educated population)
• the fact that, according to virtually every conceivable physical indicator, material living standards for Americans across the board have risen dramatically over the past quarter-century (i.e., the so-called “second Gilded Age”)

How can someone as intelligent and informed as Krugman concoct an interpretation of the post-World War II era that does such violence to the facts? How can someone so familiar with the intricate complexities of social processes convince himself that history is a simple matter of good guys versus bad guys? Because, for whatever reason, he has swapped disinterested analysis and scholarship for ideological partisanship. Here, in a revealing choice of phrase, he paraphrases Barry Goldwater’s notorious line: “Partisanship in the defense of liberty is no vice.”

To be a partisan is, by definition, to see the world partially rather than objectively: to identify wholeheartedly with the perspectives of one particular group and, at the extreme, to discount all rival perspectives as symptoms of intellectual or moral corruption. And the perspective Krugman has chosen to identify with is the philosophically incoherent, historically contingent grab bag of intellectual, interest group, and regional perspectives known as postwar American liberalism.

Of course, over the period that Krugman is addressing, the contents of that grab bag have changed fairly dramatically: from internationalist hawkishness in World War II and the early Cold War to a profound discomfort with American power in the ’70s and ’80s to a jumble of rival views today; from cynical acquiescence in Jim Crow to heroic embrace of the civil rights movement to the excesses of identity group politics to a more centrist line today; from sympathy for working-class economic hardship to hostility to working-class culture and back again. Yet with a naive zeal that leaves even Cuomo visibly nonplussed at several points in the interview, Krugman embraces the shifting contents of this grab bag as the one true path of virtue.

I understand the us-versus-them pleasures of ideological partisanship. In my younger days, I indulged in them with gusto. But at some point, ideology joined Santa Claus and the tooth fairy in my attic of discarded beliefs. Firm values, yes; definite points of view on contested empirical questions, to be sure — but to see a country as diverse, yet blessedly prosperous and stable, as this one as an ongoing war between angels and devils is to live in a fantasy world.

[cross-posted from www.brinklindsey.com]

Paul Krugman and the Unbearable Lameness of Partisanship is a post from Cato @ Liberty - Cato Institute Blog

… and Harold Meyerson is not pleased!

In his Washington Post column today, Meyerson bemoans the sinister influence of “Wall Street Democrats”:

The younger masters of the universe who work on Wall Street like as not are liberal on cultural issues and appalled at Republican foreign policy, though they’re no fans of regulating capitalism. They give big-time to such Democrats as Barack Obama (who supported legislation moving class-action lawsuits from state to federal courts, a bill intended to reduce the size of jury awards in such lawsuits) and Chuck Schumer (who has opposed a fairer tax rate for hedge fund operators)….

The problem is that the drift of much of Wall Street toward the Democrats on noneconomic issues coincides with Wall Street’s creation of inscrutable and unregulated investment devices that imperil the entire economy, as the current mortgage crisis makes painfully clear. On gay rights, say, the nouveau financiers are 21st-century progressives; on economic oversight, they are 1920s speculators, determined to keep their machinations free from public oversight.

Last year, in a piece called “Liberaltarians,” I wrote that conservatism’s crackup had created the possibility that libertarian-leaning “economically conservative, socially liberal” types might shift their loyalties to the Democratic Party. I was urging liberals to meet them halfway, and that certainly hasn’t happened yet. But maybe it doesn’t matter.

After all, if small-government voters come to think of themselves as Democrats because of social and foreign policy issues, sooner or later they’ll try to make their influence felt on economic matters as well. Will they be able to make a discernible impact on the Democratic Party’s longstanding love affair with Big Government? Who knows, but the very idea is giving Harold Meyerson heartburn — and, surely, that’s an encouraging sign.

[cross-posted from www.brinklindsey.com]

The Liberaltarians Are Coming… is a post from Cato @ Liberty - Cato Institute Blog

Naomi Klein, darling of the loonie left, has a new book out called The Shock Doctrine: The Rise of Disaster Capitalism. The basic idea is that the insidious forces of neoliberalism take advantage of wars, economic crises, and natural disasters to impose their evil schemes on disoriented and distracted publics. The career of Milton Friedman, the occupation of Iraq, and the bungled response to Katrina are all supposedly cases in point.

Klein is not a serious person, and in this book she does not mount a serious argument. But she does raise an interesting issue: the political implications of crises. It is certainly true that the waves of liberal reform (political as well as economic) that swept the world in the ’80s and ’90s were often triggered by economic crises. Indeed, I wrote a book on the subject in which I interpreted the current episode of globalization as a response to the often cataclysmic breakdown of various state-dominated models of economic development.

There’s nothing terribly surprising about this. Inertia is a powerful force in politics: every status quo has vested interests that benefit from it, while advocates of change push in all different directions and frequently cancel each other out. A crisis, though, can discredit the status quo and demoralize its supporters, while galvanizing particular pro-reform camps and boosting their credibility. Politics suddenly becomes more fluid; rapid and sweeping changes that had no chance of being enacted beforehand now occur in rapid succession.

But it’s ridiculous to portray this dynamic as somehow uniquely favoring one side of the political spectrum. Recall the great triumphs historically associated with the left: the French Revolution was made possible by the financial distress of the ancien regime; the Paris Commune was founded after defeat at the hands of the Prussians; the Russian Revolution was catalyzed by military failures in World War I.

In our own country, it was a one-two punch of cataclysms – the Great Depression, followed by World War II — that brought Big Government to the United States and then consolidated its hold. The unprecedented economic collapse made traditional American attitudes of laissez faire and individual responsibility seem hopelessly outdated; by contrast, the frenetic activity of the New Deal, regardless of the decidedly mixed results, projected boldness and vigor and hope. The subsequent mass mobilization for total war reinforced the shift in political culture. If you watched any of the wonderful new Ken Burns documentary on “The War,” you saw that the “home front” wasn’t just an expression: the diversion of the country’s industrial might to war production, price controls and rationing, extremely high tax rates, war bond drives, and incessant propaganda combined to thoroughly collectivize American society. And it worked: the economy boomed, people reaped the psychological satisfactions of banding together against a common and abominably evil enemy, and in the end America triumphed.

Today people on the left are filled with nostalgia for the political economy of the early postwar decades. I don’t think many of them recognize, though, how heavily their Golden Age depended on the lingering economic and cultural effects of destruction on a mind-boggling scale. They call themselves progressives, yet they pine for the good old days of disaster collectivism.

[cross-posted from www.brinklindsey.com]

Disaster Collectivism is a post from Cato @ Liberty - Cato Institute Blog

This eerie video clip of a 1994 interview with Dick Cheney has been making the rounds in recent days:

In it, Cheney defends the Bush 41 administration’s decision not to proceed to Baghdad after expelling the Iraqi army from Kuwait. His description of the downsides of occupation now sounds downright prophetic.

Seeing this clip reminded me of a personal experience along similar lines. Back in 1998, when I was running Cato’s then-new Center for Trade Policy Studies, we held a conference on unilateral economic sanctions called “Collateral Damage: The Economic Cost of U.S. Foreign Policy.” And our luncheon speaker at that event was none other than Halliburton CEO Dick Cheney.

Looking back at the transcript of his talk, you can see that it’s not just Cheney’s views of the wisdom of occupying Iraq that have undergone an amazing transformation. So has his attitude about engaging versus confronting Iran:

[O]ur sanctions policy oftentimes generates unanticipated consequences. It puts us in a position where a part of our government is pursuing objectives that are at odds with other objectives that the United States has with respect to a particular region.

An example that comes immediately to mind has to do with efforts to develop the resources of the former Soviet Union in the Caspian Sea area. It is a region rich in oil and gas. Unfortunately, Iran is sitting right in the middle of the area and the United States has declared unilateral economic sanctions against that country. As a result, American firms are prohibited from dealing with Iran and find themselves cut out of the action, both in terms of opportunities that develop with respect to Iran itself, and also with respect to our ability to gain access to Caspian resources. Iran is not punished by this decision. There are numerous oil and gas development companies from other countries that are now aggressively pursuing opportunities to develop those resources. That development will proceed, but it will happen without American participation. The most striking result of the government’s use of unilateral sanctions in the region is that only American companies are prohibited from operating there.

Another good example of how our sanctions policy oftentimes gets in the way of our other interests occurred in the fall of 1997 when Saddam Hussein was resisting U.N. weapons inspections. I happened to be in the Gulf region during that period of time. Administration officials in the area were trying to get Arab members of the coalition that executed operation Desert Shield/Desert Storm in 1991 to allow U.S. military forces to be based on their territory. They wanted that capability in the event it was necessary to take military action against Iraq in order to get them to honor the UN resolutions. Our friends in the region cited a number of reasons for not complying with our request. They were concerned with the fragile nature of the peace process between Israel and the Palestinians, which was stalled. But they also had fundamental concerns about our policy toward Iran. We had been trying to force the governments in the region to adhere to an anti-Iranian policy, and our views raised questions in their mind about the wisdom of U.S. leadership. They cited it as an example of something they thought was unwise, and that they should not do.

So, what effect does this have on our standing in the region? I take note of the fact that all of the Arab countries we approached, with the single exception of Kuwait, rejected our request to base forces on their soil in the event military action was required against Iraq. As if that weren’t enough, most of them boycotted the economic conference that the United States supported in connection with the peace process that was hosted in Qatar during that period of time. Then, having rejected participation in that conference, they all went to Tehran and attended the Islamic summit hosted by the Iranians. The nation that’s isolated in terms of our sanctions policy in that part of the globe is not Iran. It is the United States. And the fact that we have tried to pressure governments in the region to adopt a sanctions policy that they clearly are not interested in pursuing has raised doubts in the minds of many of our friends about the overall wisdom and judgment of U.S. policy in the area.

Note again that Cheney gave these remarks in 1998 — when Iran’s nuclear ambitions were already well known, and two years after the Khobar Towers bombing in which Iran was believed to be complicit.

9/11 may not have changed everything, but it sure changed Dick Cheney.

[cross-posted from www.brinklindsey.com]

Invasion of the Cheney Snatchers is a post from Cato @ Liberty - Cato Institute Blog

Cato adjunct scholar Bryan Caplan has a fantastic new book out from Princeton University Press called The Myth of the Rational Voter: Why Democracies Choose Bad Policies. In it he argues that misguided policies can’t just be blamed on special interests and the “concentrated benefits/dispersed costs” dynamics explored by public choice economics. According to Caplan, voter irrationality — systematic erroneous biases in public opinion — is a major culprit as well.

Which is to say, Caplan confirms the wisdom of H. L. Mencken’s observation: “Democracy is the theory that the people know what they want and deserve to get it good and hard.”

In my opinion, Caplan’s book makes a major contribution to our understanding of the sausage grinder of democratic policymaking. So buy it and read it!

But if you’re short on time, here are some shortcuts for getting up to speed on what Caplan has to say. First, Cato released last week a new Policy Analysis that is an excerpt from the book. In particular, I’d heartily recommend this paper to all those who fancy themselves members of the “reality-based community” yet blithely cling to social-scientific illiteracy when it comes to basic principles of economics. The “assault on reason,” it turns out, is a pincer movement involving both sides of the political spectrum.

Also, you might want to check out this “diavlog” between Caplan and Cato policy analyst Will Wilkinson on bloggingheads.tv.

Ahead of the curve as always, Cato Unbound devoted its November issue last year to an in-depth discussion of Caplan’s thesis.

And just to whet your appetite, take a look at this profile of Caplan from the New York Times magazine.

The Myth of the Rational Voter is a post from Cato @ Liberty - Cato Institute Blog

Today is the official release date for my new book, The Age of Abundance. In it I offer a new interpretation of American history since World War II — one that focuses on the sometimes exhilarating, sometimes disorienting social changes triggered by the advent and deepening of mass prosperity. The civil rights movement and the sexual revolution, environmentalism and feminism, the fitness and health care boom and the opening of the gay closet, the withering of censorship and the rise of a “creative class” of “knowledge workers,” the decline of machine politics and the mad proliferation of subcultures and lifestyles — all, in my telling, are the progeny of economic abundance. Furthermore, I argue that the upshot of all these changes is a much more libertarian America, although politics has not yet caught up to the new social reality.

I’ve also started up a weblog, www.brinklindsey.com, as a companion site for the book. The idea is to comb the Internet’s massive historical archives for materials and imagery that relate to the book’s themes. Check it out!

Abundance Has Arrived is a post from Cato @ Liberty - Cato Institute Blog

I have a review in today’s Wall Street Journal (subscription required) of Benjamin Barber’s new book Consumed, which examines the supposed perils of material plenty. The book’s unsubtle subtitle makes it clear enough where Barber stands: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole.  

Here’s a sample of my take on Barber:

[Barber] sees the explosion of consumer choices today and assumes that Americans are growing ever more materialistic: The more gadgets, gizmos and fripperies the marketplace serves up, the more deeply we fall under commerce’s evil spell. In fact, the opposite is true.

Political scientist Ronald Inglehart has exhaustively documented a world-wide shift toward “postmaterialist” values, in which, as he puts it, the “emphasis on economic achievement as the top priority is now giving way to an increasing emphasis on the quality of life.” The more stuff we have, the less interested we become in simply accumulating more and the more we seek out instead the intangible satisfactions of memorable experiences, meaningful work and self-realization.

The existence of books like Mr. Barber’s proves the point. In an amusing irony, the progress of capitalist development creates a continuing demand for fulminations against the evils of materialism. Thus do anti-market intellectuals like Benjamin Barber find their niche in the consumerist cornucopia they so revile.

For my further thoughts on the revolutionary social consequences of capitalist mass affluence, check out my forthcoming book (out next month) The Age of Abundance: How Prosperity Transformed America’s Politics and Culture.

Review of Barber’s Consumed is a post from Cato @ Liberty - Cato Institute Blog

In a blog post yesterday, my colleague John Samples tried to pour cold water on my idea of libertarian outreach to the left. Specifically, he cites depressing polling data that show strong support among Democratic voters for increased government spending. Alas, the appetite for free ice cream from Washington isn’t restricted to Democrats, as I point out in an essay for this month’s issue of Cato Unbound. I’ll concede, though, that Democratic voters are especially unlikely to pressure their representatives to show spending restraint.

Does that mean libertarians have no business seeking common ground with liberals? Let me make just a couple of quick points.

First, polls aren’t everything. After all, as Cato’s Stephen Slivinski has written, real federal spending increased at an annual rate of only 1.5 percent under Bill Clinton, as compared to a 5.6 percent rate of growth during George W. Bush’s first term. So Democratic politicians can run and win on a record of fiscal prudence. Yes, it’s true that Clinton’s good spending record was due in significant part to the fact that he faced a GOP Congress for most of his time in office. But this just shows that people who care about controlling spending would do better to rely on divided government than on Republicans’ small-government rhetoric. And you can’t have divided government without electing some Democrats!

Second, spending isn’t everything. The cause of limited government has many other dimensions besides the degree of budget bloat. How, I wonder, do Democratic voters compare to Republicans in their attitudes on getting out of Iraq? Getting into Iran? Torture? Warrantless wiretapping? Immigration? The drug war? Whatever voters tell pollsters, it’s clear that Democratic politicians are more likely than their GOP counterparts to resist government overreaching in these vital areas.

The sad fact is that libertarians have few allies today in either political party. Why on earth then should we refuse to seek common ground with those Democrats who hold relatively pro-market attitudes?

More on Libertarians and Democrats is a post from Cato @ Liberty - Cato Institute Blog

In his cover story for the new issue of National Review, “Conservatives on the Couch” (not yet available online), Ramesh Ponnuru devotes considerable ink to debunking the recent Cato study by David Boaz and David Kirby on “The Libertarian Vote.” I think he misses the point.

Here’s Ramesh:

David Boaz and David Kirby … have recently made an ambitious attempt to claim that libertarians are the swing voters at the center of American politics. Their chief evidence: The 15 percent of voters whom they identify as broadly “libertarian” gave Bush 72 percent of their votes in 2000 and only 59 percent in 2004….

They seem unaware that their data tell more against than for their thesis. The electorate as a whole swung toward Bush during those years: He increased his percentage of the overall vote from 48 to 51. Libertarians swung one way; the remaining 85 percent of the electorate swung the other way, and swung far enough to overwhelm the libertarians. Could it be that the same actions that alienated libertarians won Bush the support of these other voters? Well, yes, it could.

For those keeping score at home, here’s how my card reads: Ramesh, 1; Straw Man, 0!

Ramesh does a fine job of marshaling evidence in support of the utterly obvious. Of course libertarians aren’t the kingmakers of American politics. Of course it’s possible to ignore particular libertarian concerns and profit electorally. If those things weren’t true, much of American history would be inexplicable.

As I read it anyway, “The Libertarian Vote” makes more modest claims than those Ramesh seeks to refute. And Ramesh’s critique leaves those modest but important claims intact.

The fact is we don’t know why libertarian support for Bush declined between 2000 and 2004. Was it the war? Big spending? Social issues? The overall stink of incompetence? Or some or all of the above? We just don’t know.

We therefore don’t know what overlap there is between the issues that underlay reduced libertarian support and those that underlay increased overall support. It’s possible that an alternative-universe Bush administration could have taken positions that maintained or increased libertarian support while increasing support from other quarters as well – thus producing an even bigger victory in 2004 than the one that occurred here (which was pretty anemic for an incumbent with an expanding economy).

Here’s what we do know after reading “The Libertarian Vote.” The group of broadly libertarian, “economically conservative but socially liberal” voters makes up around 15 percent of the population. Historically, these voters have strongly favored Republicans, but their level of support fluctuates and has been trending down of late.

And what does that mean? It means that Democrats might be able to capitalize on those recent trends if they made any concerted effort at all to appeal to libertarians. And by so capitalizing, they might be able to change the outcome of close elections.

And if Democrats started winning by attracting libertarians who used to vote GOP — as it appears they have begun doing in Western states, according to Ryan Sager — libertarians could actually end up as a bona fide swing constituency, actively courted by both sides. And wouldn’t that be fun?

We’re not there yet. Right now, the libertarian vote is only a potentially important swing constituency. It has come into play for reasons we don’t understand well. But it’s big enough, and volatile enough, that it could lend decisive aid to either party that courts it.

Ramesh’s message seems to be that small-government types are unpopular nerds who should content themselves with being allowed to run with the social-conservative cool kids. (Yeah, I know that sounds funny — the conservative cool kids, I mean, not the libertarian nerds.)

I say libertarians can do better than that. And the data in “The Libertarian Vote” show that isn’t just an idle fantasy.

Ponnuru Misses the Point is a post from Cato @ Liberty - Cato Institute Blog

Perplexity over economic statistics – in particular, the decades-long trends of flat median real wages and increasing income inequality, combined with a recent disconnect between productivity growth and wage increases – is provoking serious, sober-minded people on the center-left to worry whether there might be something badly wrong with America’s economic system.

In a well-written piece (subscription required) for The New Republic, Jonathan Chait chronicles how the economic numbers are undermining confidence among Democrats in Clinton-style, pro-growth economic policies. The bottom line: what good is economic growth if it only benefits those at the very top?

Ezra Klein of The American Prospect is among the anxious. He’s written frequently on this point, but here’s a typical formulation of the perceived problem as he sees it: 

What worries me about inequality isn’t what it does, but what’s doing it, namely, a decades-long decline in worker bargaining power and the resultant redirection of productivity increases and corporate profits away from compensation and salaries. 

And here’s another:

[T]hrough mechanisms we’re not entirely sure of, the very richest are siphoning off the economic growth before it flows through the middle and lower classes.  

And here’s yet another that suggests what needs to be done: 

The right has tried to explain this accelerating inequality as an unstoppable structural feature of the new economy: It’s the meritocracy, or computers, or benefits, or global trade. Unfortunately, those explanations are largely bull****. Europe also has computers, and trade, and mobility, and benefits, and has easily avoided the widening chasm we’ve seen. So what makes us different?

In a word, power. Or the distribution of it. Europe has strong unions and active governments; countervailing powers that wrest a portion of the pie for their constituencies. We don’t.  

It’s one thing to be concerned generally about inequality: to hope that all people can participate in the blessings and opportunities that modern capitalism affords, and to look for policies that help those who are lagging. It’s quite another when that concern curdles into a belief that the capitalist system is fundamentally unfair – that workers are failing to get their fair share of the value they create because people at the top are hogging the gains from growth. It’s the difference between being an egalitarian liberal and being a collectivist. Or, in other words, between being a progressive and being a reactionary.

Here’s my question for Ezra et al.: is there something wrong with labor markets? Is there some market failure that is resulting in the systematic exploitation of workers?

I can’t imagine what that market failure would be. Labor markets are pretty vanilla, with lots of buyers (firms) and lots of sellers (workers). Local monopsony problems (e.g., the company town scenario) are unlikely to be significant in a diversified, modern economy with a highly mobile work force. I don’t know of any basis for thinking that firms’ competition for workers is less than robust. Accordingly, there are very strong reasons for thinking that wages and salaries are generally bid into line with the value of the various uses to which labor at a given skill level can be put.

As University of Chicago law professor Richard Epstein puts it:

The single most important thing to understand about the operation of a standard labour market in the world today is that it is immensely boring. It should be thought of in terms of the traditional intersection of supply and demand. It does not present any difficult transactional problems or generate negative externalities that require government control. 

In particular, there is no good reason to think that high earnings for managers and professionals at the top of the pay scale are coming at the expense of everybody else. Firms need workers at various skill levels. Exactly the same incentives guide firms when they are hiring highly skilled workers and when they are hiring less skilled workers. On the one hand, competition will cause them to bid up the price of labor to attract workers away from other job openings; on the other hand, concern with profitability will deter them from overpaying. There isn’t some pot of money in the company safe that’s dedicated to wages and salaries, so that more for some means less for others. Hiring and pay decisions are made at the margin: does adding this worker at this price improve our bottom line? For every new hire, whatever the job description or skill level, firms face strong pressures against either underpaying or overpaying.

(Note: I’m leaving aside for now the question of compensation for top executives, which raises complex issues of corporate governance. For now, it suffices to say that, even if CEOs are being overpaid, the problem affects only a tiny portion of the overall labor market.)

So I just don’t see those “mechanisms we’re not entirely sure of” that Ezra talks about. And just asserting they exist, without providing any theory or evidence of how they might work, won’t cut it as serious analysis.

But what about the decline of private-sector unions? Hasn’t that reduced workers’ bargaining power to their detriment?

Yes, it is true that, through collective bargaining, workers can obtain above-market prices for their labor – just as it is possible for price-fixing cartels to obtain above-market prices for their products. But it is also true that, over the long term, unionization has proved a disaster for affected U.S. industries. By cutting into profits, unions have deterred investment and R&D; the rigid work rules they imposed have hampered innovation and competitiveness; and the unsustainable pension and health care commitments they extracted have turned out to be financially ruinous in the long run.

A resurgence in union power wouldn’t improve the system. Union power distorted the system, ultimately with dismal consequences. Yes, some people came out ahead, but many others have suffered from the effects of underinvestment, inefficiency, and burdensome legacy costs.

Contrary to the fears of Ezra and the rest, America’s labor markets are working fine. Strong incentives are in place for companies to pay people what they’re worth. The system isn’t broken.

Of course you can be disappointed that more people aren’t doing better. In which case, you have a couple of options. Option one is to try to supplement the competitive market system. Let the system work, and accept that the prices it’s generating are offering reasonably accurate information about the economic value of different kinds of work. Then try to find policies that will (a) help people increase their value in the marketplace and (b) mitigate hardships for people with relatively low human capital.

Option two is to try to supplant the system by ignoring market signals and squelching competition. In other words, go against everything we know about how best to encourage innovation and wealth creation. Sure, a lucky minority may get windfalls, but everybody else will suffer from the reduction in economic growth.

Option one is egalitarian liberalism; option two is reactionary collectivism. As a libertarian, I am obliged to point out that perverse incentive effects and political dynamics make it very difficult for option one to work well. But option two is flat out doomed to make matters worse.

Taking Labor Markets Seriously is a post from Cato @ Liberty - Cato Institute Blog

Once upon a time, way back in 2002-03, I had my own blog. Unsurprisingly, given the times, I wrote frequently about issues relating to the war on terrorism. I took a hawkish line, supporting the U.S. invasion of Iraq and the resort to force, if necessary, to prevent other terror-sponsoring states like Iran from developing nuclear weapons. Based on my blog writings, I was invited to participate in a Reason online debate with John Mueller back in November 2002 on whether to go to war with Iraq. I argued vociferously in the affirmative.

The views I expressed were extremely controversial within Cato and the larger libertarian camp. Cato’s foreign policy scholars, reflecting the “orthodox” libertarian opposition to an interventionist foreign policy, strongly opposed the Iraq invasion. But for a minority of policy staffers at Cato, as well as many other libertarians, waiting for the other guy to take the first swing no longer seemed to make sense in a post-9/11 world.

Since the fall of Baghdad, I haven’t written a word about foreign policy. Virtually all my writing energies have been directed elsewhere: to a book, due out next spring, that examines the effect of mass affluence since World War II on American politics and culture. Much has changed in the past three-plus years, including my own views as I struggle to make sense of ever-changing circumstances. As a one-time outspoken “libertarian hawk,” I feel a responsibility to explain where I stand now and how I got here. Given recent (and incorrect) speculation about my views on the brewing crisis with Iran, now is as good a time as any.

First, on Iraq, my support for the invasion was based on the assumption of active biological and nuclear weapons programs. That assumption, of course, proved incorrect. I also failed to anticipate the Sunni insurgency that has been at the root of Iraq’s post-Saddam problems. And, perhaps most egregiously, I placed my trust in the Bush administration to assess the Iraqi threat accurately and do all within its power to make the occupation of Iraq a success. That trust, however foolishly offered, was badly betrayed.

So, if I had it to do all over again, would I oppose the invasion? Honestly, I don’t know. I just can’t quite bring myself to wish Saddam back in power and, with the sanctions regime probably moribund by now, enjoying $75 a barrel oil and emboldened by having survived the Gulf War and its protracted aftermath. On the other hand, I certainly wish that the United States had not assumed responsibility for Iraq’s post-Saddam future. That mission was undertaken on the basis of totally erroneous expectations regarding its difficulty and without any Plan B in the event of unforeseen problems. Consequently, the occupation has been a fiasco – failing to accomplish its objectives, costing thousands of U.S. lives and hundreds of billions of dollars, tying down a major chunk of the U.S. military in what appears to be an exercise in futility, and highlighting the limits of U.S. power and resolve in a way that encourages our enemies.

And what to do now? For a long while I kept hoping that political progress in Iraq would lead to progress in subduing the insurgency. It hasn’t, and now the country seems to be spiraling into sectarian civil war. I don’t see any prospect for things to get better in the foreseeable future, and thus I see no U.S. interest in maintaining our presence there. So I’m in favor of getting out. We rid Iraq of a horrible tyrant and gave the country a new constitution and government. It’s up to the Iraqis now, for better or worse.

Meanwhile, the experience of the past few years, including but not limited to the experience in Iraq, has led me to reconsider my earlier support for preventive military action against Iran. I cannot say that there are no conceivable circumstances under which I would support such action. But for the time being, I do not think that preventing an Iranian bomb is worth hazarding another war – especially since it is probably the case that we still have several years before Iran succeeds in its quest for nukes, and it is certainly the case that our non-military options are far from exhausted.

My change in views is not due to any deep-seated philosophical reversal. Today, as before, I’m afraid I’m immune to the attractions of any grand foreign-policy abstractions, whether realist, idealist, or otherwise. And I’ve yet to find refuge in any bright-line rules on when military force is and isn’t called for. To my mind, international relations is a field that just isn’t amenable to much theoretical illumination.

As a libertarian, I have a healthy appreciation of the law of unintended consequences. Accordingly, I start with a strong presumption against doing anything as drastic as going to war. Unlike many of my fellow libertarians, however, I believe that this presumption can be rebutted in cases other than an outright or imminent attack on the United States.

So I muddle along, weighing the risks of action against the risks of inaction on a case-by-case basis. What has changed, for me, since the spring of 2003 is the weight I assign to the relevant risks. In particular, I currently consider the threat of Islamist terrorism to be far less grave than I feared it to be in the wake of 9/11. Yes, it is a very real threat, and one that should be addressed with the utmost seriousness. But my best reading of the available evidence tells me that both the scale and the sophistication of anti-U.S. terrorist activity are currently rather limited. Consequently, I am less persuaded than before of the need for bold and risky moves against terror-sponsoring states. At the present time, I therefore prefer a more cautious approach in dealing with rogue regimes.

But I stand prepared to flip-flop once again should changing circumstances warrant. In the words of Keynes (whom I don’t get to quote very often), “When the facts change, I change my mind — what do you do, sir?”

Confessions of a Former (and Maybe Future) Hawk is a post from Cato @ Liberty - Cato Institute Blog

This year’s World Cup hasn’t converted me to soccer fandom, but it did motivate me to read a good book. I’m talking about TNR editor Frank Foer’s How Soccer Explains the World: An Unlikely Theory of Globalization.

The book, which came out in 2004, offers a series of fascinating, compulsively readable profiles of soccer’s cultural and political underbelly — its connection to, among other things, war crimes, sectarian conflict, racism and anti-Semitism, political corruption, and culture wars. The beautiful game, perhaps, but what goes on off the pitch is frequently anything but. The picture, though, isn’t all bleak: Foer also tells how soccer has figured into resistance to fascism in Spain and Islamist tyranny in Iran.

The book is heavy on storytelling and light on argument, but through soccer’s prism an interesting picture of globalization emerges. And my apologies to Frank if I’m stretching here, but the picture is quite similar to that offered in my own book about globalization. Soccer, of course, is the global game par excellence — played and loved and marketed around the world. The best teams compete for talent and fans without regard for national boundaries. At the same time, though, this thoroughly cosmopolitan product is consumed in a world where national boundaries — and racial, religious, ideological, and class divisions as well — remain very real and continue to exert an often pernicious influence.

Soccer, then, is the global economy in microcosm. Goods, services, and capital flow across political boundaries as never before, but the global division of labor must contend with local institutions, interests, and mindsets that are frequently profoundly hostile to the market order. At the World Cup as in the larger world economy, the invisible hand of the market and the dead hand of anti-market forces struggle for mastery.

Whether or not you follow soccer, the book offers a wealth of great stories and an overarching perspective that makes our highly interconnected, highly conflicted world a little more comprehensible. And if you are a “football” fanatic, you might also want to check out Frank and friends’ World Cup blog as we head into the final weekend.

How Soccer Explains the Dead Hand is a post from Cato @ Liberty - Cato Institute Blog

Jonah Goldberg over at National Review Online cites David Boaz’s recent post on the Webb-Allen Senate race, agrees with its substance, but then objects to the notion of a “libertarian center.” “[S]omeone really needs to come up with a better analytical framework than the one(s) which always seem to claim the good guys are in the center,” Jonah writes. “Who says? Besides, if libertarians are in the center, everyone is and no one is.”

I understand Jonah’s distress, since centrism all too often boils down to muddled, sloppy thinking and compromise for compromise’s sake. But the fact remains that the center—i.e., where the swing voters reside—will always be prized territory in democratic politics. Accordingly, much of the action in politics consists of trying to define the relevant issues so that people in the center identify more with your side than with the other guys. That’s why the definitions of left and right change so much over time (compare the priorities of left-wingers and right-wingers a half-century ago with those of their counterparts today, and you’ll see there’s not much overlap)—ideologues in pursuit of power are chasing the ever-changing, ever-elusive center.

Another way to put this is that the location of the center depends on the alignment of the political axis. If the axis of politics at a particular time is the size and scope of government, the center consists of one group of constituencies. If the axis shifts to cultural issues, the center relocates and includes a very different set of voters.

When, from the 1930s through the 1980s, the role of government in the economy was a major, defining issue in American politics, libertarians clearly were not in the center. But how about now? In recent years, the axis has shifted to cultural “red” vs. “blue” issues. As Edward Glaeser and Bryce Ward note in an excellent recent paper entitled “Myths and Realities of American Political Geography,”

[An] important truth captured by the red state/blue state framework is that political parties and politicians have had an increasing tendency to divide on cultural and religious issues rather than on economic differences.

Glaeser and Ward are right. There is little principled difference between the R’s and D’s these days about the size and scope of government. On that score, the main disagreements now are about which favored groups get to feed at the government trough at the expense of the rest of us. By contrast, the really fundamental issues today, the issues that define ideological loyalties and drive voters to the polls, are cultural questions: abortion, stem cell research, gay marriage, guns, immigration, nationalism. Church attendance is now a better predictor of voting patterns than income.

And so, whether Jonah likes it or not, libertarians are in the center of the American political debate as it is currently framed. In the red vs. blue culture wars, libertarians find themselves in the middle, along with that large, nonideological chunk of the electorate that is equally squeamish about the religious right and the countercultural left. This is a new and unaccustomed position for libertarians to be in, but I am coming to believe it represents a unique opportunity for us if we can figure out how to take advantage of it.

The Libertarian Center? is a post from Cato @ Liberty - Cato Institute Blog