Tuesday, August 16, 2011

The libertarian solution to inequality



The libertarian movement often has a very odd notion of "liberty." Here is yet another case in point.

Reviewing a book about happiness, George Mason University professor and Cato Institute blogger Bryan Caplan writes:
[The author] suggests that large differences in relative income can have a large influence on happiness...[but even if he] is right about the unhappy effects of income comparison, you shouldn't conclude that redistribution is the solution. Yes, you could fight inequality of income. But you could just as easily fight comparison of income. Instead of praising those who "raise awareness" about inequality, perhaps we should shame them, like the office gossip, for spreading envy and discontent.
So, the libertarian solution to the problem of inequality is to socially persecute anyone who talks about inequality?

Maybe I'm in the crazy minority here, but it seems to me that this kind of social persecution would make people feel less free, not more. Who wants to live in a society in which certain topics are verboten? Would we really be happier if the words "Gini coefficient" were NSFW? And, more fundamentally, when did restricting the free flow of information - by any means, governmental or social - increase our liberty?

Like I said, a very odd notion of what the word means.

Add to this the fact that Caplan's solution probably wouldn't work. Michael Lewis describes something like this in Liar's Poker, in which no one at his company ever mentions money, bonuses are kept secret, etc. The hush-hush attitude only makes people more determined to ferret out the information, and everyone at the company remains obsessed with relative pay. Information wants to be free, Dr. Caplan! But even supposing this "shame" system could suppress information about inequality, I have a feeling it would just make people all the angrier on those rare occasions when the fact of inequality made itself apparent. A problem you're not allowed to talk about is twice as annoying. Shouting "Quitcherbitchin" is not going to raise our aggregate happiness.

The bottom line, libertarians, is that people care about what they care about. Telling them "No, do NOT care about that, care only about my arbitrary, rigid, and counterintuitive definition of liberty!" is not going to win your movement a lot of followers in the long term.

36 comments:

  1. Steve9:40 AM

    I don't know. We're all aware of the plethora of evidence showing that if you shame people for their natural inclinations (e.g. homosexuality, premarital sex, overeating) they completely lose the inclination and emerge healthier than before. FWIW, in ON LIBERTY Mill explicitly claims public shaming is as impermissible as legal sanction.

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  2. DrDick9:47 AM

    Libertarians have very odd (and generally counterfactual) notions of pretty much everything.

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  3. Pierre9:58 AM

    Well, as far as I know, education en environement do play a role in what people think.
    So there is a possibility that you can change how people perceive inequality. It's even possible that is a pure meritocracy, they would accept the inequalities.
    I rather doubt that getting there is just as easy a redistributing though. It would be interesting to learn how they intend to do it?

    For what it's worth, in France where I live, we usually don't discuss how much we make, it's rather against the etiquette. I did not notice people being more happy for not speaking about it...

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  4. I always use "Gini coefficient" when the wife asks me to talk dirty to her.

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  5. It's almost as if you don't even listen to your own rhetoric. You say that "social persecution" decreases liberty, and yet what is this post but a "social persecution" of Caplans position? Have you somehow limited his freedom by publicly shaming him? You routinely put up posts that ridicule and belittle people whose position you don't like. Don't stop, that's why people come back here, but you should try to pay attention to your own writing.

    What do you have against libertarians anyway? Do the less than 1% of people who vote libertian in this country, and the two or three elected libertarian officials have the greatest ability to do harm? The basis for your attacks are silly as well. If we didn't have public schools all hell would break loose. You know this from watching a movie. The libertarian stronghold of Japan is terrible because you had to deal with your own trash. Now this. There are some silly libertarian arguments out there, but you can make some of them seem reasonable by comparison.

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  6. Darf, you wound me.

    Look, dude, there is a difference between criticism and social persecution. I am not going to explain that so think about it.

    The libertarian movement annoys me because I feel like it's sucked up a lot of mental energy, creativity, and idealism that could have been put to better use - like the communist movement did generations earlier. I think it did some good, but it's a maximalist, package-deal ideology, and like all such ideologies it's gone into la-la land. I don't think it's killing the country but I think it's done some damage. So there you go.

    Plus the movie was good.

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  7. I find it ironic than in a post arguing against shaming people, you come pretty close to shaming libertarians, but whatever.

    I think you pretty clearly misinterpreted what Bryan meant. I doubt Bryan is arguing against measures of inequality or discussion of economic inequality abstractly. Whenever most pundits talk about changing inequality, it almost always smacks of spreading envy and discontent. You won't find a liberal pundit who just gives the data and moves on. They will tend to try to spin the data into a discussion of how rich people are evil. Bryan is calling on us to shame people who engage in the behavior of trying to encourage envy. Also, we shame people for their beliefs all the time, and rightfully so. We have every reason to shame and persecute those who espouse racist or misogynist speech. Yet, I doubt you would make a post defending the liberty of bigots to not be shamed by others. There is nothing wrong with shaming people, you just disagree with it in this context because you think those that envy the rich have a valid grievance. Finally, even accepting that instinct is purely biological, rather than guided by social and cultural factors as you seem to presume, I still don't see how it follows that one can't condemn instinct on the grounds "people are who they are." If an instinct is morally wrong or foolish, we condemn it, even if it's an instinct. Individuals with a certain variant of the MAO-A gene, coupled with a violent upbringing, tend to be violent people themselves. Do we accept their violence because it's "instinct." Or it appears to be psychological instinct to engage in things like the gambler's fallacy. Do we not try to educate people that this thinking is wrongheaded because it is instinctual? Of course not. Using reason to counter gut "instinct" is one of the chief differences between humans and non-human animals. I don't see how it is particularly radical to say that some people's instincts are stupid and misguided and then attempt to change them.

    I agree with Caplan for a different reason than he has in mind. I can't stand the whining American middle class complaining about "inequality," since these complainers are almost always in the top 10% of global income distribution - and usually much higher. I don't know how these people argue with a straight face that they deserve some rich guys income, after they just bought a new car - while simultaneously some child in East Africa is starving to death. If these complainers really bought their own conception of "just income distribution," rather than just being selfish, greedy people hoping to take money from someone else - then they would be calling for their own income to be redistributed to those truly poor. But I don't expect that to happen any time soon.

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  8. Libertarians generally view income distribution as 'natural'; it arises in a vacuum between two equally powerful, well informed parties who do not have influence over one another. It is not affected by government policy.

    Therefore, anyone who disapproves of it is simply 'jealous' which is a bad trait for people to have because it isn't in the economic models.

    Also, something that strikes me as odd about libertarians is that they try to use global inequality as a way to justify the vast amounts of wealth at the top. Strange stuff.

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  9. If it makes Brian's review any more palatable you interprete it as "criticism of those that make a big deal about income inequality might be a better remedy than trying to redistribute income".

    When you talk about libertarians you seem to have in mind randian objectivism more than libertarians. There are quite a few pragmatic libertarians that have a much more subtle understanding of issues than you give them credit for (e.g. Tyler Cowen, Milton Friedman, Armen Alchian and Scott Sumner). To make blanket claims about libertarians thinking that individuals freedom to maximize profit is the only thing that matters is painting with too broad a brush, in my opinion.

    And yes, it was an awesome movie.

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  10. The libertarian movement certainly seems to have sucked up a large portion of Noah's "mental energy, creativity, and idealism", driving the agenda and conceptualizations of this blog.

    I wouldn't confuse conservative libertarianism with a genuine philosophy, open to considering reasoned objections. Bryan Caplan is a libertarian, because that's his job! It is a completely synthetic ideology, deliberately manufactured by a cadre of full-time professionals. And, I don't think their employers intend to make the masses any smarter about the economy or society. In short, libertarians are a product of increasing inequality; of course, they are in favor of increasing inequality, and would prefer that no one draw attention to its deleterious effects; libertarianism is one of increasing inequality's deleterious effects!

    Normal people do not observe modern America (or Japan) and worry about "inequality" in the abstract, or the effect of envy on happiness. They worry about the predatory conduct by the rich and powerful, which finances concentrated wealth, while driving disinvestment. They worry about the "freedom" of people driven into debt peonage and poverty and financial insecurity, by having no options for a career, by losing their house if they had one, by losing their pension, etc.

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  11. @Noah - Love you man, but re. the communism / libertarianism metaphor, I think it's fair to say that the communist movement sucked up far less national energy and creativity than the near-fanatical efforts to eradicate it. The parralel with anti-libertarianism may be a bit too easy to carry forward, no matter what terminology you use.

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  12. kebko2:13 PM

    A healthy, progressing world will have some level of inequality. And, to the extent that it can be measured, there will be stochastic movement in that measure.
    But, in political discourse, we simply see a constant drumbeat of claims of the poor losing at the expense of the rich. At your next cocktail party, I dare you to try to suggest that it might be reasonable to see a period of increasing inequality. Yet, this clearly must be true sometimes, unless you really think the only healthy long term equilibrium for the world is some sort of uber-egalitarian stasis.
    So, since this topic is so clearly muddied with social posing, how exactly do you propose a libertarian should address the issue?
    And, really, if you plucked anyone from any point in history and placed them in the modern west, can you really claim with a straight face that their reaction would be, "Wow, it looks like an economic system based on property rights and free exchange has left this landscape littered with a sorry mass of have-nots!"?

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  13. Anonymous2:19 PM

    Can one be both free and ignorant? or are the libertarians just proposing that the little people be kept ignorant for the sake of their mental health?

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  14. Anonymous2:23 PM

    The Libertarians are like the mathematician in the joke who says "first we assume a can opener".

    The Libertarians start with: "assume the existence of property rights and a functioning legal system" - but they don't understand it is the punchline to a joke not the foundation of a coherent theory of society.

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  15. The implicit tyranny at the heart of libertarianism. We've all seen it before: many highly intolerant and standoffish people claim to be libertarians. Coincidence? I think not.

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  16. James8:32 PM

    Why do you think it's libertarians who have an odd notion of liberty? Shaming people who talk about inequality only makes them feel less free if their notion of freedom involves saying whatever they please without even the possibility of a disapproving response. I don't think any notion of liberty could be odder.

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  17. Julian12:07 AM

    It seems like an awfully roundabout way of dealing with inequality to heap scorn upon those who raise the issue. Wouldn't it be better to identify the roots of inequality and try to provide a level playing field, especially in those cases where the "causes" are generated by unfairness in institutions and/or social conditions? Furthermore, what harm does it do to promote a more egalitarian society? It has not destroyed the economies of the states in Europe with a more complete welfare state apparatus. All the hype about "Eurosclerosis" is overdone. Maybe having a somewhat higher unemployment rate would be more tolerable if there was a better social safety net for the many who face unemployment and poverty.

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  18. Julian12:09 AM

    I meant the few who face unemployment and poverty...

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  19. The bottom line, libertarians, is that people care about what they care about.

    Sorry, I missed the first part of your post. You're a traditional conservative telling Bryan Caplan and other libertarians that we shouldn't shame people for being racist or try to get them to be pacifist and avoid war, because both of those things are part of human nature and what people care about.

    Some libertarians like Rand Paul have questioned whether the Civil Rights Act reduced liberty-- seems like you're going even farther in claiming that even making people feel bad about being racist reduces liberty.

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  20. Anonymous7:39 AM

    Mr. Caplan is right. Nobody likes a sore loser. Most especially when he comprises 90% of the population. (see: Arab Spring - Hosni, yes, but I like it too.)

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  21. Excellent post.

    It is amusing to see all the bizarre libertarian comments that attempt to distract from the subject with assorted ad-hominem and nit-picking criticisms.

    Bruce Wilder is spot on with his comment.

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  22. Anonymous11:46 AM

    Libertarianism is nothing more than narcissistic sociopathy attempting to wear the robes of philosophy.

    There was a time when I argued with libertarians, just as there was a time as a young parent that I argued with my clever 5 year old. Both efforts were fruitless.

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  23. @ Mike - agreed. Thanks for putting that so succinctly.

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  24. Steve1:09 PM

    The comparisons to shaming racism and the like are utterly bizarre.

    First, racism is wrong. We hold people morally responsible for wrongdoings (and, to some extent, wrongthinkings). Shaming people is one way of holding them responsible. Are Caplan and others asserting that disliking inequality is morally wrong such that shaming is an appropriate reaction of moral accountability? I don't think that they are. But then why is it appropriate to shame? They are making a utilitarian argument - everyone will be happier if we just stop talking about inequality. But that is the very point at issue - realistic people think that that is simply a libertarian fantasy.

    There's a second point - the progress made by shaming racism and sexism comes from informing and educating people with facts and discrediting false theories (cf. Murray's "Bell Curve"). We point out the very real effects of discrimination and we also expose people to the fact that instances of racism, sexism, etc. are all baseless or unjustified since there are no relevant differences between races and sexes in the relevant cases. But the advocates of shaming in this case are trying to keep people UNINFORMED! They advocate shaming people for exposing the truth! This is really the anti-libertarian aspect, as J.S. Mill would argue.

    Last, shaming of racism and sexism has certainly been part of positive movement to change institutions and official policies. But it certainly has not come even close to stopping people from privately being racist or sexist. But the proper comparison is the private one, not the public one. A person's psychology is affected by inequality in his or her society regardless of what official policy is.

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  25. Anonymous1:23 PM

    The fact is that as the GINI index of income inequality has steadily risen since about 1980, subsequent real GDP growth has decelerated. No trickle down here. Move along. Nothing to see.

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  26. "I find it ironic than in a post arguing against shaming people, you come pretty close to shaming libertarians, but whatever."

    With all respect, I don't think that this is actually shaming. I strongly doubt Dr. Caplan feels "shamed."

    Further, I don't think that the claim that what we need to do is lower people's envy at others' good fortune really holds water here. The reason I say this is that the claim that Dr. Caplan advances is very conservative, at its heart. If one wants to affect change, one is going to have to do so on the basis that one's situation is far less than optimal, something that is absent from Dr. Caplan's example. The set-up that Dr. Caplan uses presupposes something like a nice stable office environment. Well, it really isn't like that at the moment, where many American workers have real fears concerning job stability and longevity. If we changed the example a little--"we are reducing the workforce by 10%, whilst those at the top get 30% raises"--then what happens to the notions of "envy" or "jealousy" in play here? Sure, you can talk about "envy" but is that the emotion actually in play here?

    Under Dr. Caplan's view, it would be easy to dismiss the resulting emotion as "envy." What about "righteous indignation"? If so, then this would suggest that freer information may increase social instability (an undesirable ideological outcome from a conservative perspective). It might also generate energy for desirable change, at least as seen from a different ideological perspective. Just a thought...

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  27. I don't think the problem is bloggers talking about "Gini coefficients" (I don't know what that is and I have a PhD from Harvard). The truly poor are not seeing those posts. The real problem is the advertisers.

    Typical folks are getting thousands of messages a day about how they would be happier if they drove a better car, wore flashier clothes, ate better food, had all the latest high tech toys and consumed all of the expensive entertainment. If folks are too poor to have all that, the advertisements make them unhappy.

    On the other hand, I don't think the libertarians are calling for an end to advertising, they would regard that as protected speech.

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  28. Anonymous9:19 PM

    Ralmond, the GINI index is just simple math that in this case measures what percentile of the populace has what percentile of the country's income. Total income is overwhelming and increasingly held by a smaller and smaller percent of the country. This is not a perception but,rather, an actual fact. Advertising is hardly the issue.

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  29. RE: shaming people who point out income differences - This is commonly done today. When the middle class calls for taxing the wealthy, they are accused of "class warfare".
    Sounds to me like good old-fashioned social darwinism applied to income instead of race.

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  30. Anonymous4:56 PM

    I think you took what is obviously a wry joke from a purposely contrarian libertarian a little too seriously

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  31. Anonymous4:37 PM

    Unsafe neighborhoods make people unhappier. We should simply shame people who talk about how crime is so much higher in certain areas. The police should not be allowed to publish crime statistics. What you don't know can't hurt you, right?

    I think the problem is that Caplan (I won't extend it to all libertarians, but I don't think one would be all that far off to do so), simply doesn't recognize when someone talks about inequality, they are actually talking about actual people working 2 jobs but with kids who are malnourished. And these people see all these folks driving around in limousines all day.

    All Caplan seems to see is a curve, and a number.

    Getting rid of the curve and the number won't make those people feel any better that their kid is entering life with a huge disadvantage.

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  32. ezra abrams5:10 PM

    "information wants to be free"

    surely an economist should know that this is one of those totally wrong memes
    Infact, information, as energy (think 2nd law thermo here) wants to be charged for
    Information is as valuable as a barrel of oil, and a lot harder to get

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  33. Wow! Caplan, the self proclaimed libertarian has apparently never read the seminal libertarian text, Mill's "On Liberty".

    Here is Mill on the illegitimacy of social pressure to coerce opinion:
    "The object of this essay is to assert one very simple principle, as entitled to govern absolutely the dealings of society with the individual in the way of compulsion and control, whether the means used be physical force in the form of legal penaltities, or the MORAL COERCION OF PUBLIC OPINION. That principle is that the sole end for which mankind are warranted, individually or collectively, in interfering with the liberty of action of any of their number, is self-protection."

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  34. Anonymous7:11 AM

    I would suggest we're already there. EVERYTHING has become "political."
    ..
    I work for a public authority involved in workforce development and job placement. Even data-driven discussions on the effectiveness of further fiscal stimulus, monetary policy or the President's jobs bill are frowned upon because many of our board members are Republican and may be offended.
    ..
    In the current environment, at least in the American South, "yur fer us or agin us."

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  35. Anonymous11:08 AM

    Comparison of "criticizing" and "publicly-shaming" and through that pointing out the self contradictory nature of this post would be a fair argument if this post's position were discarding all possible criticism, public-shaming and alike. But it isn't. However, Noah's attack on a libertarian argumentation as such has a merit (unlike the counter arguments of "critique equals public shame" group), given that public-shame is a level of control on the members of public that is inconsistent with the core principles of libertarianism.

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  36. Oh for Heaven's sake. Re: the 'Noah's post is hypocritical' crowd: shaming and criticism are, of course, different.

    The way that criticism works is that you take something that's wrong (false, untrue) and work out what's broken about it. Racism, for instance, can be criticised on these grounds (following which, a holder of racist views might be socially shamed).

    There is nothing untrue about the assertion: 'income and wealth inequality in the US is crazy-high and getting higher'. So that puts it beyond the purview of criticism. You might dispute its impact or relevance (my two cents is that it's crucial), but that's a different thing.

    Caplan is arguing not that we should dispute its impact or relevance, but rather that everyone should just wear (more of) it and STFU.

    As an lefty, my mouth is wide open. But if I was a libertarian, my mouth would also be... wide open.

    ps. Anonymous@7:11 - being offended is not the end of the world. Being (diplomatically) told your ideological blinkers are on and you're wrong and hey, here's the data that demonstrates it, is okay. The poor darlings will make it.

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