Work, Social Production, and Inequality
Matt Yglesias links to an interesting discussion about the growth of activities that raise our standard of living without being captured in economic statistics. Wikipedia is a great example of this: it’s tremendously valuable to hundreds of millions of Internet users, but because it’s given away for free that value is not reflected in our economic statistics.
I think this general insight is right, but I don’t agree with John Quiggin’s conclusions about the social implications. In particular, Quiggin writes:
It seems unlikely that large inequalities in income are beneficial to anyone except the recipients of high incomes.
If improvements in welfare are increasingly independent of the market, it would make sense to shift resources out of market production, for example by reducing working hours.
The first point ignores the fact that rich people are a crucial part of many public-spirited enterprises. Jimmy Wales was able to finance the initial development of Wikipedia (then called Nupedia) because he had previously earned profits building commercial websites. The Ubuntu project, creators of an extremely popular Linux-based operating system, is supported to the tune of millions of dollars a year by successful entrepreneur Mark Shuttleworth. Brewster Kahle used the profits from his successful Internet businesses to build the Internet Archive, a crucial repository of public domain works. John Gilmore, who made his fortune as one of Sun’s first employees, has used his wealth to promote a variety of free software projects, including GNU radio and Gnash. I could provide plenty of other examples.
The important thing to recognize is that these projects could only exist because of the combination of their founders’ expertise and their money. Without cash, these folks would have been unable to provide the support necessary to get these projects off the ground. But even more important, these projects also wouldn’t have succeeded without their deep understanding of their fields. Only someone with years of experience in the software industry would have the judgment and the relationships necessary to make a project like Ubuntu successful.
Who’s Blogging about Cato
Here’s a round-up of bloggers who are writing about Cato this week:
- Writing at the Adam Smith Institute blog, Phillip Salter discusses Patrick J. Michaels’s proposal that scientific articles should be available online for public comment.
- Penning his thoughts on Obama’s plan to raise taxes on oil and gas usage, Wintery Knight cites Jerry Taylor’s research that shows why similar price control programs didn’t work in the 1970s.
- Reihan Salam quotes William Niskanen on The Atlantic‘s Washington blog in a post about the “starve the beast” theory that says lawmakers can slow government’s growth by lowering taxes and running up deficits.
- Think Progress blogger Matthew Yglesias responds to Michael Cannon’s work on health care reform in a post about Obama’s White House health care summit.
- Dr. Paul Hsieh of FIRM (Freedom and Individual Rights in Medicine) and Brian Schwartz of Patient Power cite John H. Cochrane’s Cato paper on free market solutions to health care security.
- CrimLaw started his review of Tim Lynch’s new book In the Name of Justice.
Filed under: Cato Publications; General; Government and Politics; Health Care
Will the ‘Rise of the Counterinsurgents’ Lead to Fewer Counterinsurgency Wars?
Matt Yglesias picks up on the Bacevich review I referenced below and points to a post from counterinsurgency (COIN) scholar Andrew Exum in which Exum argues that learning to do counterinsurgency better will lead to our doing less of it:
No one who really understands COIN wants to do it. Liberal interventionalists and neo-conservatives are likely to be much more enthusiastic than the practitioners themselves. Counter-insurgents, often knowing something of what they speak through practical and hard-won experience, realize all too well just how difficult and costly big schemes drawn up in Washington become when they have to be operationalized. Counter-insurgency is hard. Best to avoid it, actually.
This doesn’t make much sense. Exum has previously excoriated COIN skeptic Gian Gentile for pursuing an “anti-COIN crusade.” But by Exum’s reasoning above, it is Exum who should be on an anti-COIN crusade. Instead, Exum thinks that DOD needs to allocate more resources to doing COIN.
Academically, Exum is interested in insurgencies. And indeed — they’re interesting. But for the COIN clique to think that their realistic appreciation of the difficulties of COIN and their private reticence to do it is going to outweigh their technocratic advice and willingness to obey orders in the minds of policymakers, I think they’re gravely mistaken. The work of the COIN crowd is going to create the impression in the minds of policymakers that the military knows how to win counterinsurgencies and therefore we don’t need an “Iraq syndrome.” But we do need an Iraq syndrome.
Take, for one example of my argument, the thinking of Bush NSC official Peter Feaver.* He thinks, as I do, that making COIN doctrine central to American foreign policy thought is going to create a future in which US foreign policy will continue to look like that of President Bush. Except for Feaver, that’s a feature, not a bug:
The problem with Chris’s post on COIN is that it takes the existing debate at face value, as if it really were a debate about the best way to do COIN or its place in American national security. I don’t think it is.
Let’s stipulate for the sake of argument that all of the COIN critics Chris cites are sincere patriots who honestly believe what they have written and have no deeper agenda. Setting them aside, the larger debate seems driven by one of three deeper considerations. First, anti-COIN is a convenient way to argue against American military involvement in any fashion because the most urgent near-term threats requiring military operations involve COIN. So if your ideology tells you that the dominant problem in the world is American militarism; if you look at recent history and can only find cases where we did use military force and shouldn’t have and can find no cases where we did not use military force and should have; if you think that getting defeated in Iraq (or Afghanistan) would have a salutary chastening effect on American adventurism; if any or all of that applies, then it makes sense to argue against Gates’ emphasis on COIN now. If the U.S. military cannot or will not do COIN, then the U.S. military cannot and will not be operational.
Does Exum think this policymaker’s view is wrong? Aberrant? I think its descriptive content is exactly accurate and characteristic. Orienting planning and resources more toward COIN is likely to lead to more counterinsurgency wars. I’m pretty confident in this prediction. If somebody disagrees, I’d like to hear a better fleshed out argument behind the idea that telling policymakers “we now know how to do COIN pretty well” will lead to those policymakers to decide we ought to do it less.
UPDATE: Professor Feaver writes in to say that by “Let’s stipulate for the sake of argument that all of the COIN critics Chris cites are sincere patriots who honestly believe what they have written and have no deeper agenda” he meant to make the positive statement that these people are patriots with noble intentions and didn’t mean to intimate they could be insincere patriots of questionable honesty with deeper agendas. He also disputes the factual accuracy of the Times article linked above and points to this Commentary piece as the definitive account of his work at the Bush NSC.
Nostalgianomics: If the Shoe Fits…
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.
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