Category Archive: Political Science

  1. A champion of “absolutely unlimited competition” in education

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    Americans concerned about the dismal state of public education in many schools increasingly want more choice, competition, and local control. Such people may draw inspiration from the wisdom of 20th-century theologian J. Gresham Machen, who affirmed the necessity of “absolutely unlimited competition” in education.

    Who was J. Gresham Machen?

    The famous journalist and skeptic H.L. Mencken wrote an obituary on January 18, 1937, that praised “a man of great learning” and “sharp intelligence.” That man was J. Gresham Machen, a Protestant theologian who taught at Princeton Theological Seminary before going on to found Westminster Theological Seminary in Philadelphia in the 1930s.

    Mencken was no Christian believer, but he did nevertheless “greatly admire” Machen’s consistent defense of freedom[1] and his “remarkable clarity and cogency” in argumentation.[2]

    “The worst fate into which any country can fall”

    In 1926, Machen testified before a congressional committee regarding a proposed federal department of education. Machen wasted no time in getting to the heart of the matter. In the first minute of his testimony, he explained that the purpose of the bill was “to promote uniformity in education,” which, he asserted, “is the worst fate into which any country can fall.”

    A radical position? Yes. But take a moment to consider some of the reasoning that led him to it.

    First, it will be of some value to point out that Machen was not blind to the obvious benefits of public education. He admits in the first chapter of his most famous book, Christianity and Liberalism, that “A public school system, in itself, is indeed of enormous benefit to the [human] race” and “a noteworthy and beneficent achievement of modern times” due to its delivery of at least a rudimentary education to larger portions of the population than had been known in most societies before modern times.[3]

    Moreover, Machen stated in his congressional testimony that in the absence of federally enforced uniformity in education that “there have been grievous sins in the sphere of education on the part of individual states,” not to mention “a lot of crazy private schools and church schools.” In other words, Machen admitted what we all must: liberty can be a messy affair.

    Nevertheless, the medicine of uniformity in education was, for Machen, worse than the disease of “crazy private schools.”

    We must consider, second, Machen’s response to the notion of uniformity: he demanded the circumscribing of any federal education system with the “absolutely free possibility of competition” from various types of private schools. Without this, governmentally enforced uniformity in education would be “the most perfect instrument of tyranny which has yet been devised,”[4] due to its power to control thought and to encourage widespread mediocrity.

    Machen left no room for doubt about his suspicions that a distant, centralized state had no authority, much less ability, to educate children well:

    Place the lives of children in their formative years, despite the convictions of their parents, under the intimate control of experts appointed by the state, force them then to attend schools where the higher aspirations of humanity are crushed out … and it is difficult to see how even the remnants of liberty can subsist.

    Instead, such a system would produce “one huge ‘Main Street,’ where spiritual adventure will be discouraged and democracy will be regarded as consisting in the reduction of all mankind to the proportions of the narrowest and least gifted of the citizens.” In brief, Machen feared that state-enforced uniformity in education would produce a mediocre populace unable to sustain a free society.

    [1] For example, during a national debate over a proposed child labor amendment to the U.S. Constitution, Machen called it “one of the most cruel and heartless measures that have ever been proposed in the name of philanthropy” due to the likely consequence that it would lead to a variety of unintended consequences including greater poverty in American society and harsher working conditions for children who would still find work but under less salutary conditions. Lawrence W. Reed, Real Heroes: Inspiring True Stories of Courage, Character, and Conviction (Wilmington, Delaware: ISI Books, 2016), 133.

    [2] Those interested in reading more about Mencken’s assessment of Machen are directed to D.G. Hart, Damning Words: The Life and Religious Times of H.L. Mencken (Grand Rapids, Michigan: Eerdmans Publishing, 2016).

    [3] J. Gresham Machen, Christianity and Liberalism (Grand Rapids, Michigan: Eerdmans Publishing, 2009), Chapter 1.

    [4] Ibid.

  2. Stop calling out the hypocrites

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    In a few short days, Donald Trump will assume the presidency, and America will be subject once again to something we’ve taken to calling the peaceful transfer of power. Its virtues are many. Peaceful transitions sure beat coups and violent uprisings, for one.

    More than this, though, the promise of a peaceful and orderly shift in political power strengthens the constitutional order by promising political players that, should they observe the rules, they’ll get their day in the sun.

    Of course, this setup has its vices. In particular, such an arrangement encourages (or, perhaps, requires) a certain looseness with one’s principles.

    Examples abound: The antiwar Left, whose email has been sending out-of-office auto-replies since 2008, is back at work. The investigation-happy Right, exhausted from ferreting out emails hosted on private servers, seems unable to muster the energy needed to look into this Russian hacking business.

    On executive orders, judicial appointments, political obstructionism, infrastructure spending, and war-making powers, rest assured: flips will be flopped, shoes will make their way onto the other foot, turnabout will be fair play, and libertarians of all stripes will be there to point out the hypocrisy.

    And why shouldn’t we? After all, there’s something a bit unbecoming about this kind of behavior. It is, as a matter of fact, intellectually and morally dishonest to oppose the use of particular powers “on principle,” only to adopt those powers when you’re at the top of the political heap. A principle so held is probably no principle at all.

    We want people to have principles, and we want people to stick to them. By consistently and loudly calling out their duplicitousness and hypocrisy, we can signal our commitment to principled behavior and to honesty.

    That’s all right and true.

    But now I’m going to propose that you, liberty-loving keeper of the flame, stop calling out hypocrisy — or, at least, that you do so more judiciously.

    I have three reasons for doing so, and I think at least one of these reasons will apply to you, no matter what kind of libertarian you are.

    1. Yes, you’re right. They are hypocrites.

    First, libertarians are rightly skeptical of the motivations of political actors. Students of public choice pride themselves on a certain clearheadedness, an economical clarity — on grasping the realities of “politics without romance.”

    A politics without romance is a politics without virtue, and it requires a theory of politics capable of recognizing self-serving opportunism in all its disguises — a theory of politics capable of recognizing incentives as the Newtonian forces setting actors into motion. The positive project of public choice is a constitutional project through which incentives reconstitute bad behavior into publicly useful outcomes.

    With such an approach in mind, railing against hypocrisy seems not only wrong but somewhat silly. In order for ambition to counter ambition, political actors have to be hypocritical; they play their role in opposition by making the strongest arguments available to them — including arguments they’ve made a habit of ignoring in the past.[1] Hypocrisy lubricates the gears of a constitutional order by allowing political actors the rhetorical maneuvers needed to alternate between ruling and opposing rule.

    2. You’re already almost alone.

    Second, libertarians are in the unenviable position of disagreeing, often vehemently, with most people, on most things. Particularly with regards to the War on Terror, the War on Drugs, the War on Poverty, and the actual wars the US churns out with such alacrity — we tend to find ourselves in a position of lonely if principled opposition.

    To put this another way: there is nothing libertarians need so badly as other people changing their minds. In loudly calling out hypocrisy, we raise the opportunity cost of doing just that — we say, very clearly, “We’re glad you’ve suddenly rediscovered your opposition to unilateral executive power, but first we’re going to make you eat shit.”

    3. What’s wrong with hypocrisy anyway?

    Finally, and far more broadly, libertarians need to get clearer about what sort of vice hypocrisy is. In particular, we need to be clearer about the costs — moral and otherwise — of the moral and political posture that places such emphasis on ideological purity.

    Often, libertarians refuse to acknowledge politics as a separate sphere — as a moral world attached to, but not coextensive with, the everyday demands of morality. And often, this refusal serves us well as an analytic tool, particularly with regards to the state-sanctioned use of force; it allows us to see the moral evil of war and police corruption with brutal clarity.

    At the same time, however, this posture has costs that must be assessed. If we write off politics as the realm of hypocrisy and politicians as, in some sense, equally and universally guilty by virtue of their respective hypocrisies, we blind ourselves in crucial ways to the present role of politics in realizing libertarian goals.

    [1] In fact, the Greek root of our word “hypocrisy” — hypokrisis — means, in part, “acting” or “playing a part.”

  3. Political parties are just shopping bags for ideas

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    Is Donald Trump shredding the Republican Party?

    Some commentators marvel at the statist implications of Trump’s vow to spend a trillion dollars on infrastructure projects — a vow that echoes both Obama’s stimulus package and FDR’s New Deal.

    Pundits tirelessly debate whether or not Trump is representative of the party he claims to lead, and the degree to which his policies are, or are not, Republican.

    Tacit in all this debate is the assumption that parties and their platforms ought somehow to be set in stone. But unlike ideological notions like conservative or progressive, which are relatively fixed, political parties have always been flexible and even disposable.

    I often use the analogy of a flimsy plastic shopping bag to explain how parties function: a political party is nothing more than a shopping bag designed to carry a set of ideas, coherent or otherwise, forward and into practice.

    So, even though many people think the Republican bag carries the liberty-friendly ideas of states’ rights and limited national government, that doesn’t mean that Trump or the Republican Party in the future will follow through on those ideas.

    The ideas can come out of the bag.

    In fact, US parties have already flip-flopped repeatedly about how activist our federal government should be.

    The First Flip-Flop

    The party known as the Jeffersonian Republicans began in the 1790s by resisting national government activism. The key point of contention was Alexander Hamilton’s four-point financial plan, the cornerstone of which was the creation of the first central bank.

    But after the War of 1812, that party dropped its opposition to the national government directing economic growth, embraced the creation of a second central bank, and jettisoned states’ rights.

    Eventually, these Jeffersonian Republicans brought on other national-government activists and changed their party name to the Whigs.

    Democrats for Limited Government

    For almost two decades after 1812, enough of an equilibrium existed between the national government and the states that there was little impetus for those espousing the ideas of states’ rights and limited national government to assert themselves in the form of a party. But when Andrew Jackson became president in 1829, he began endorsing those ideas very forcefully, and many of those who believed as he did began to coalesce into a formal party structure called Democrats. Meanwhile those who continued to support government activism fell in line as Whigs.

    By the 1850s, though, the Whig party had ceased to be an effective way of holding a set of political ideas together. Fatal to Whig unity was that the southern wing of the party endorsed slavery, while many in the northern wing wanted to contain its expansion if not abolish it outright.

    So southern Whigs moved into the Democrat party while northern Whigs became politically homeless. But the Whig party’s various ideas — abolition, national government activism, protective tariffs, etc., all still existed. They just needed a new bag.

    Republicans for Bigger Government

    The Republican Party quickly formed to pick up some of those ideas (most centrally opposition to slavery and the embrace of national government activism). And in the late 1800s after the Civil War, the Republican Party endorsed national government activism to a degree scarcely seen before in the United States. The Republicans used that activism to expand individual civil and political rights, while at the same time taking numerous powers away from the states.

    When I explain all this in my US history survey course, sometimes a student will raise a hand and hesitantly say “This isn’t in line with the parties today,” and my response is always “You’re right.”

    The label on the outside of the bag (“Republican,” “Democrat,” “Whig,” etc.) doesn’t matter much. What matters are the ideas inside the bag at any given time.

    After the Civil War ended, the Republican Party — now christened the “Grand Old Party” — became more national in scope, and while the Democrat Party suffered nationally from its association with secession and treason it did not completely lose its connection with states’ rights.

    The Second Flip-Flop

    In the last decades of the 1800s, new issues and new ideas arose to fill the bags. Popular concerns about industrialization became more clamorous, and Democrats began to reshape their identity. They became the party standing against pro-business legislation. Farmers and immigrants who felt powerless against the economic forces of Wall Street began to respond to the Democrat message.

    At the turn of the century, the interventionist impulse called Progressivism naturally adhered to the Republican Party because of its dedication to government activism. But divisions in the party over issues like reform and regulation widened — most obviously in the election of 1912 when Progressive and conservative Republicans supported different candidates.

    Meanwhile, reform-minded Democrats like Woodrow Wilson began to pick up Progressive ideas and endorsed a national activism that didn’t fit well with their party’s other positions.

    By 1918, the crusading interventionist Democrat administration — seeking to bring all war to an end — was hardly recognizable as the somewhat-limited-government party of the 1800s.

    In the 1920s, the slide to Progressivism abated briefly. In the election of 1924, both the Republican incumbent Calvin Coolidge and the Democrat challenger John W. Davis espoused lower taxes and less regulation. Without a major-party bag in which to carry forward their ideas, the Progressive activists temporarily rallied behind third-party candidate Robert LaFollette.

    Finally, under the strain of the Great Depression and the aegis of Franklin Delano Roosevelt’s “New Deal,” those Progressives gained control of the Democrat party. They entirely abandoned the idea of states’ rights, replacing it with a concept of national government activism that was similar, but far greater in degree, to the central idea held by the Republican Party since its inception.

    Suddenly the Republicans found that rather than being opposed by a states’ rights party, they themselves were now the party opposing the contemporary understanding of national government activism. As FDR’s legacy of national authority grew larger and more central to his party, the ideas of states’ rights and smaller government were left without a party, and the Republicans absorbed them. It was an astonishing reversal of position.

    Back to the Future

    So, with Republicans taking the Oval Office on a ticket of massive government intervention, are we on the verge of seeing another massive change to the current party system? Not likely in a dramatic thunderclap sort of way.

    Major party transformations usually happen slowly, requiring a decade or so to settle, because as one group abandons certain ideas, other groups have to respond and readjust.

    But Donald Trump has more potential of rearranging the ideas in the Republican bag than any other president in a long time, due to his celebrity and the fact that he’s only nominally a Republican. Trump, moreover, like Andrew Jackson — and to a lesser extent Woodrow Wilson — is an outlier, and those are the figures who tend to trigger party transformations. And, as with Andrew Jackson, personal opposition to Trump may be enough on its own to influence the development of the opposing party.

    Remember: parties are just shopping bags for ideas. It ought not to be particularly surprising when a shopping bag breaks — when the handles wear out or the bottom of the bag tears.

    There’s little historical reason to believe that past Republican tendencies will rein in Trump’s apparent embrace of massive stimulus spending and personal intervention in businesses’ affairs. Instead, Trump’s rise may herald a long realignment — or the slow destruction — of the Republican Party.

  4. Why schools should be businesses (sort of)

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    In an article called “Why Schools Aren’t Businesses,” a teacher is depicted challenging an ice cream company president on why schools can’t operate like ice cream companies. Ice cream companies, says the teacher, can send back ingredients that don’t meet their standards and can insist on only using the best ingredients they can afford. But schools, she says, do not have that luxury; they take the students they get. “We take them big, small, rich, poor, gifted, exceptional, abused, frightened, confident, homeless, rude, and brilliant… We take them all! Every one! And that, Mr. Vollmer, is why it’s not a business.”

    But are students analogous to the ingredients ice cream companies use to make their products — something to be packaged and sold to others? Or are students the patrons who benefit from the education schools sell? Ice cream companies may reject defective ingredients (just as schools may reject defective school equipment or curriculum packages), but schools’ not turning away students is more like the ice cream company that doesn’t reject customers it believes can’t benefit from their ice cream.

    Cleaning services don’t reject potential clients whose houses are too dirty. Doctors don’t turn down patients they believe to be too ill, though they may refer them to specialists.

    And if we are worried that schools-as-businesses would turn down students that they believe would cost too much to educate — perhaps the poor or the disabled — we can make those students more attractive to schools by designing vouchers or other programs to offer additional funding for those students. (Such weighted voucher systems have been proposed, most notably some decades ago in a book called Education by Choice).

    Democratic Education

    The article “You Should Run Schools Like Businesses… Well Not Really” suggests that “schools must be democratic if we want parents and taxpayers to have input into how schools are run. And schools must model democracy if we want children to be prepared to function in a democratic society.”

    Presumably, making schools businesses takes the “democracy” out of them.

    First, I’m not sure how many people would suggest that today’s public school systems allow parents and taxpayers any say outside of the ability to petition the school board or vote for its members. But it seems clear that a public system of schooling is not synonymous with allowing parents and taxpayers a real say in how schools are run.

    Second, we do live in a democracy, but we also live in a liberal market society. We buy goods and services much more often than we vote. Most of the goods and services we enjoy we buy through the market, and most of us understand why this is a good thing.

    Consumers get to shop around for what best suits their needs, producers are pressured to offer a product that keeps consumers coming back, and the involved parties transact directly. Markets mean that that consumer and producer can shop around and deal directly with each other. Markets empower.

    Neither does the profit motive create a problem for education. In fact, it provides the solution. We know that the companies we buy from strive to provide quality at least partly because of a desire for profit. And while some depict the profit motive as the only thing that drives people in the private sector, I find it hard to believe that the people who work at, say, Google, Apple, or your local supermarket are not in any way motivated by the personal satisfaction that comes from providing good service.

    I suspect that many folks who suggest schools shouldn’t be businesses have a particular type of business in mind: the large company that sells standardized widgets. If that is the kind of business we are talking about, I’d have to say that I agree: schools probably shouldn’t be those kinds of businesses. (Notice that the closest thing we currently have to that kind of business is the public school system.)

    But think about your local cleaning service, yoga studio, or — the more direct analogy — tutoring service. None of these is big and impersonal. None sells standardized widgets. All offer service tailored to the customer’s needs, or at least a variety of service packages to serve different needs. Maybe the critics of for-profit education aren’t thinking of the right kinds of businesses.

    This piece originally appeared at the Foundation for Economic Education.

  5. How to get millions of people working for you

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    How many people do you have working for you? Unless you own a business, it seems like a strange question. But even if you have nobody on your payroll, the reality is that you command the labor of more people than you can possibly imagine. Almost all of the goods and services you use on a daily basis are the product of the labor and cooperation of countless people.

    At this moment, there are thousands of people in your city ready and willing to prepare meals for you, tend to your medical needs, cut your hair, defend you in court, mow your lawn, clean your house, and even do your grocery shopping.

    These are a mere fraction of the services that others regularly provide for us. When you begin to think about how many people’s labor went into growing the food you eat, manufacturing the car you drive, and designing the device on which you’re reading this — and the amount of labor that went into helping all of those people — the number of people who have worked for you (or would like to) starts to reach into the millions.

    In The Wealth of Nations, Adam Smith defined wealth as the quantity of others’ labor you can afford to buy with the income you earn from supplying labor of your own.

    Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a very small part of these with which a man’s own labour can supply him. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase.

    How did it become possible for even people of relatively modest means to employ the labor of countless other individuals? Adam Smith attributed this type of widespread prosperity to the division of labor and specialization. By breaking down the production of goods and services into smaller components, and specializing in one part of the process and then trading with each other, we can create far more together than we could working in isolation. The more people we are able to freely exchange with, the more opportunities we have to extend this process of wealth creation.

    The division of labor makes us wealthier in a number of ways. When you specialize in one particular job, you gain experience and proficiency at it. You become accustomed to the work, exploring all of its nuances and learning unique ways to deal with any challenges that present themselves. This also puts you in a better position to discover innovative ways to save time and effort while completing your job. In addition, when we are focused on doing one specific job, we waste less time making the physical and mental transitions from one task to the next. As a result of this process, we become more productive overall. Instead of wasting time doing everything pretty badly, we all do one thing pretty well, and then we effectively trade a tiny bit of our labor for the tiny bits of thousands (or millions) of other people’s labor that went into making everything we see around us. Not only are there more goods and services for us to consume, there are also many more people cooperating to produce them.

    We rely on the labor of strangers to provide us with the goods and services we want in exchange for some of the income we earn providing specialized labor of our own. Even our most basic needs are met in this way. Few people living in developed countries possess the skills necessary to grow or hunt their own food, to make their own clothing, or to construct shelter. Those who do possess these skills have either specialized in them to earn a living, or they engage in these activities as a hobby. Our survival no longer depends on knowing how to do all of these basic things.

    Of course, there are plenty of tasks that we perform on our own, such as the work we do in our households and at our jobs. But even then, our tasks are continually made more pleasant and less time consuming because of tools and innovations produced by the ingenuity and labor of others. Think of all the sprays, mops, vacuums, and brushes that today seem indispensable to doing simple household chores.

    Smith goes on to say, “The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.”

    The division of labor not only allows us to command the labor of a larger number of people, it also reduces the amount of time and effort we spend supplying labor of our own. Robert Whaples compiled the results of several studies providing historical estimates of how many hours an average American spends working, relative to other activities. From 1830 to 1890, the average workweek for manufacturing workers fell from 69 hours to 60 hours. By 1929, the average manufacturing worker spent only 50 hours per week working, nearly an entire day less than a century before. Manufacturing workers were supplying 38.5 hours of labor per week on average by 1955. Similar decreases in hours worked are seen across other industries.

    What are we doing with all this additional time? In 1880, Americans could expect to spend about 80 percent of their waking hours working, in both the market and at home, and only 20 percent engaging in leisure activities. By 1995, Americans were using only 41 percent of waking hours to work, and 59 percent in leisure.

    Our ability to command an ever-increasing amount of labor and to consume an increasing diversity of goods and services — while simultaneously spending more time engaged in leisure activities — can be attributed to this collaborative process of specialization and the division of labor. In this way, even the poorest people in our society are wealthier than members of the nobility were in Smith’s day. If we truly care about improving the lives of the least well-off among us, we should focus on expanding the size and scope of our trade network. When we consider protectionist trade policies that reduce the number of people with whom we can exchange, we limit this process and with it our ability to grow wealthier and more prosperous.

  6. The international currency playoffs

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    College football playoffs are just around the corner.[i] By why limit playoffs to sports?

    I now present to you the first International Currency Playoffs, to find the best currency of 2016.

    There are 32 national currencies in these playoffs, from the 32 largest economies in the world. The winner of each currency-to-currency matchup depends on their exchange rates from January 1 to December 20, 2016.[ii] Whichever currency rose against the other wins the match.

    You can see the results of the bracket here. Congrats to our champion, the Russian Ruble!

    screen-shot-2016-12-30-at-1-16-59-pm

    The Ruble trounced its first-round opponent, the Thai Baht, with a 17% gain over the course of the year. But it encountered a real scare in the second round against the Brazilian Real. A ruble was worth 0.05410 reals on January 1 and only 0.05465 on December 20. That’s a mere 1% rise over the course of the year.

    Indeed, if the dates had been adjusted by just a few days either way, the Real would have won.

    From then on, the Ruble maintained double-digit wins all the way to the top, handily defeating the New Taiwan Dollar (with a 15% rise), the Australian Dollar (18%), and in the final round, the Indonesian Rupiah (14%).

    How did the American Dollar fare? After modest success in the early stages over European foes — an opening round victory over the Danish Krone (3.5%) and a second round triumph over the Swiss Franc (2.6%) — the greenback fell to a charging Canadian Dollar. $1 USD was worth $1.385 CAD at the start of the year and just $1.334 at the end, for a fall of 3.8%.

    Overall, countries with a “dollar” currency — like Canada, the US, and Hong Kong — did very well. But is there an underlying reason for that pattern, or is that just a coincidence? I look forward to longtime dollar fans’ insights.

    Southeast Asian currencies did far better than I’d expected. Half of the final eight currencies — Hong Kong, Indonesia, Philippines, and Taiwan — came from that portion of the world. Meanwhile, I would have expected Scandinavian currencies to fare better — alas, none of them made it past the second round.

    Does the tightest policy win?

    It’s also worth noting what is actually being rewarded here as we play off these currencies. I ran my currency bracket idea by Will Luther, a monetary economist at Kenyon College, and his immediate take was that this bracket simply crowns the tightest monetary policy over the last 12 months. The Bank of Russia’s current monetary policy is to achieve the goal of “reduc[ing] inflation to 4% by 2017 and maintain it within that range in the medium run.” Does that explain Russia’s win this year?

    Inflation certainly plays a considerable role in exchange-rate determination — a focus on limiting inflation would seem to help the ruble against competing currencies. Economic growth plays a role as well; Russia’s economic contraction throughout much of the year aids in a stronger ruble.

    Further, a one-year time period may not be sufficiently long to establish “champion currency” status. For certain, we can isolate a currency that rises over the course of the year against the rest — but that may be like isolating the stock with the biggest daily gain.

    Finally, it should also be noted that the particular dates — from the beginning of the calendar year to the end — may have benefitted the ruble in particular. As mentioned above, the second-round matchup between the Brazilian Real and the Russian Ruble was exceedingly close.

    One last bit: For all those opponents of state-controlled money, how would alternative monies fare in our competition?

    Gold

    The Ruble would have defeated gold with a 10% rise, though gold would have surpassed both the Indonesian Rupiah (3.7%) and the Australian Dollar (7.0%).

    Bitcoin

    However! There is a savior from the Ruble, and it rests in Bitcoin. Everybody’s favorite cryptocurrency walloped even the Ruble by a titanic margin — 1 BTC was worth 31566 rubles in January and 48922 in December. That’s a rise of 55%. Long live the blockchain!

    [i] For more on the strange economics of college football, read my recent article, “Let’s replace the college football selection committee — with math.” 

    [ii]In some sports, the seeding (who plays who in the first round, the second round, and so on) may matter a great deal to the outcome.

    But this is not true in contests with high transitivity. High transitivity means that if Team A beats Team B, and Team B had already beaten Team C, then Team A would almost certainly have beaten Team C as well.

    The higher the transitivity, the more we can expect a playoff structure to distill a true best participant from a group. Amongst major sports, football is arguably the sport where the better teams win the highest percentage of the time. Whether that’s true or not is a good debate to have over drinks with friends, but baseball certainly falls short of football on this margin. As such, we would expect a football playoff to better distill a champion from a group of teams than would an identical baseball playoff (i.e., same number of teams, same one-game-per-round format).

    Thanks to arbitrage, however, we can expect currency exchange rates to be awfully close to perfectly transitive. As such, if we simply pair off currencies to see which one rose against the other over the past twelve months, we should get a currency champion.

    Furthermore, the stronger the transitivity, the less important seeding is to the process. Imagine an eight-number playoff to determine which of eight different numbers is largest. The order in which numbers are paired for this playoff is immaterial to the ultimate outcome. The same can be said for currencies.

    So the Ruble (or, you might say, Bitcoin) is pretty clearly the true champion for 2016.

  7. 4 New Year’s resolutions for the Trump administration

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    It’s a new year again, which I always consider a time for making resolutions. Of course, it’s much more satisfying to make resolutions for other people. Now that Sen. Rand Paul has aired his annual Festivus grievances about his colleagues in Washington, I thought I’d offer them some suggestions for self-improvement.

    President-elect Trump doesn’t seem like the sort to  feel the need for self-improvement and resolutions, but maybe the prospect of becoming president of the United States would prompt reflection and resolve in anyone. So here are four unsolicited resolutions for Trump and his team, plus a bonus resolution for the rest of us.

    1) Bring back growth.

    People are worried that our economy is not strong and that our kids won’t have it as good as we do. And they have a point. From 2000 to 2015, annual growth in real GDP has averaged only 1 percent. The recovery from the 2007 recession has been the slowest and weakest since World War II.

    Here’s a simple relationship to keep in mind: presidential approval ratings depend heavily on economic growth. If you care about your poll ratings, re-election, or legacy, you’d be well advised to keep the economy growing.

    So how do you increase anemic growth rates? First, look at what government has done to drag down the economy. Taxes, government debt, and regulations are a burden on investment and economic activity. Higher taxes make investments less profitable and create a “wedge” between what the employer pays and what the employee receives, which reduces the number of jobs created.

    Regulations also add to the cost of doing business. The Obama administration’s Department of Labor has been on a veritable crusade to reduce U.S. employment. Its 2010 “guidance” discourages companies from offering unpaid internships, which are often the first work experience for students. The new overtime regulations, currently put on hold by a court decision, impose huge costs on management and reduce opportunities for workers. And still the regulations keep coming. Cut back on regulation, and you can expect stronger growth.

    One place to look for regulatory reform — where you could find some left-right agreement — is in cutting back on what Brink Lindsey calls “regressive regulation”: barriers to entry and competition that redistribute income and wealth up the socioeconomic scale. From doctors and lawyers to taxis and Big Sugar, many incumbent businesses are protected from free competition. Opening those markets to the little guys will be good for consumers, innovation, and growth.

    And remember, you don’t want to bring back the jobs of 1953, as George Will put it, but to help create the jobs of today and tomorrow.

    Along those lines:

    2) Don’t make a fetish out of campaign promises.

    Presidential candidates say a lot of things on the stump that aren’t actually good policy. You promised to bring back jobs that have been lost. But what you really meant was that you wanted more people to have better jobs. (This is what it means to say that voters took you “seriously but not literally.”)

    You shouldn’t try to recreate the jobs of 1953 or 1973 or even 2003. After all, in a typical year before the Great Recession, some 33 million American jobs were created, while over 30 million were lost. The point is not to try to “save” or “bring back” those 30 million but to create a growing economy where more people can find work and wages rise.

    It’s also been common for presidential candidates to promise to “get tough” with China or “renegotiate” international trade deals. Then they get elected and come to appreciate the downside of wrecking the world’s most important economic relationship and creating new international tensions. You want a growing economy and a more peaceful world. Focus on that, not on keeping campaign promises.

    3) Play more golf.

    Partisan critics always snipe at presidents for playing golf and taking vacations. But presidents do a lot less damage on the golf course than in the Oval Office. Hit those links. Let the country run itself with less direction from Washington. And while you’re at it, don’t worry about spending time in New York, Palm Beach, and Bedminster, New Jersey. Washington doesn’t need to be the center of the country’s attention.

    And speaking of downsizing Washington:

    4) Push for term limits — on Congress and the bureaucracy.

    You struck a chord when you talked about term-limiting Congress. Seventy-four percent of Americans agree, and only 13 percent oppose term limits. You’ll need a new Supreme Court justice or two to make this happen, but start the effort now.

    Meanwhile, federal employees stay in office even longer than members of Congress. “Few die, none resign” goes the pithy paraphrase of Thomas Jefferson’s complaint in 1801. Now we might say “few resign, none are fired.” A new book finds a vast gulf between how Americans think, and what federal administrators think of them. How about a little turnover there?

    The bigger problem here is the rise of the administrative state, in which legislative, executive, and judicial powers are concentrated in the executive branch, and even in single federal agencies. Take it on. Restore the separation of powers. Tell the permanent bureaucracy that they don’t make the laws, Congress does.

    That brings me to my final resolution, for the rest of us. Throughout the Bush and Obama administrations — but going back much further, at least to Franklin Roosevelt — we have seen a steady drift of power from the states to the federal government and from Congress to the executive branch, and more specifically to the president. A lot of people have worried recently about the powerful presidency that Barack Obama is turning over to Donald Trump. Some of us have been worrying about executive power and the potential for abuse for a long time.

    Now would be a good time for libertarians, liberals, and conservatives to resolve to rein in executive power. Recent presidents have blithely exceeded the powers granted to them under the Constitution. Congress bears a significant part of the blame for presidential excesses, and so do all of us who approved of presidential power grabs — as long as we liked the president or the particular exercise of power.

    Now we should demand that Congress assert its authority under Article I of the Constitution — “All legislative powers herein granted shall be vested in a Congress of the United States” — and stop delegating vast and vague authority to executive agencies. We should insist that presidents no longer take the country to war without congressional authorization, use “a pen and a phone” to usurp legislative authority, or use the power of the White House to intimidate private individuals and businesses.

    If the administration and the rest of us do these things, there’ll be a lot fewer grievances to air next Festivus.

    David Boaz is the executive vice president of the Cato Institute and the author of The Libertarian Mind (Simon & Schuster, 2015).

  8. Liberalism reconstructed for a world divided

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    So 2016 is limping to an end with an assassination of an ambassador, another “inspired” attack on innocents at a Christmas market, and the formal election of a master crony-capitalist to the office of the presidency of the United States.  We have angry tweets, mean tweets, and self-congratulatory tweets defining our age.  But our age requires something different.

    The liberal project must be reconstructed for a world divided by ethnic, linguistic, religious, nationalist, and economic class.  The liberal project has always been an evolving project, not fixed in time.  It has taken on different meanings at different historical junctures.  Now is no different, and to do the necessary reconstruction, there must be no divide between the humanities and the social sciences.  Philosophy without economics is daydreaming, and economics without philosophy has no purpose, and both without politics are sterile intellectual exercises.

    In this reconstruction, we may draw inspiration from Smith and Hume, Mises and Hayek, Friedman and Buchanan, Nozick, etc., but repeating their answers to the problems of their day will not work.  We live in the post-colonial and post-communist era, where the neoconservative project of a ‘world order’ has only exacerbated the social tensions that define our age.

    This post is designed for one purpose — to encourage young scholars of classical liberalism — be they philosophers, political scientists, economists, historians, sociologists, etc. — to pick up this challenge and apply all their talents to be students of our civilization.  If the best and the brightest don’t pick up the challenge because of academic conformity methodologically, analytically, ideologically, then the necessary reconstruction will not occur.  Note I am not saying “restatement”, I am saying reconstruction.

    My career as an academic political economist began with studying the history, collapse and transition from socialism in the former Soviet Union, it then switched to the institutional lessons to be learned from the failure of development planning in Africa, Latin America and Asia.  This has led to studies on economic calculation and complex coordination; institutional infrastructure and economic development; endogenous rule formation and analytical anarchism; and social epistemology and comparative institutional analysis.  But, these are at best inputs into a study that seeks to addresses the problems that plague our world and the reconstructed liberal project.

    We have serious problems that require serious attention.  Let’s get to work.

    This piece was originally published at Coordination Problem.

  9. Why riots happen

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    After the Los Angeles riot in spring of 1992, almost every pundit in the country took a turn at explaining why riots occur. The conventional wisdom on the subject went something like this: certain dramatic events such as political assassinations or unpopular jury verdicts crystalize riots from social rage.

    So to understand riots, one must understand the causes of social rage, usually said to be racism, poverty, lack of economic opportunity, and why people who experience this rage manage it in such a destructive manner. The usual suspects include breakdown of the family, television, and a generalized cultural disorientation.

    All of these explanations have some truth in them, but are evidently incomplete. First, they explain too much. The predisposing social conditions are with us all the time, yet riots are episodic.

    Second, they explain too little. Many mob actions, like European soccer riots or the increasingly predictable civil meltdowns in the home cities of National Basketball Association champions, are triggered by good news, and not obviously related to social injustice or existential anomie.

    Indeed, during the Los Angeles riots, anyone with a TV set could see that jubilation rather than fury best characterized the mood of the people in the streets. It is hard to credit that these exhilarated looters with their new VCR’s and cameras were protesting the jury system, the state of race relations in Southern California, or anything else.

    They were, in fact, having a party. Moreover, many of those who risked life and limb opposing the more outrageous excesses of the rioters were themselves poor, unemployed, and victims of racism.

    Conversely, a crowd is not an incipient riot merely because it assembles a great many people with the predisposing demographic characteristics. For example, every Fourth of July in Chicago’s Grant Park there is a fireworks display that usually attracts about a million spectators. In certain parts of the grounds, people are packed together like sardines, so that individuals substantially lose their ability to decide where to go. One goes where the crowd goes. Going against it is impossible, and even leaving it (unless one is near the edge) may be difficult.

    Some people dislike the experience, but whatever its discomforts, the Fourth of July crowd at Grant Park is not a riot in the making. The crowd is big, it is loud, it is unmanageable, it is filled with people who have suffered from racial discrimination and economic deprivation, it has, in aggregate, drunk a lot of beer (which is legally for sale at dozens of kiosks at the event); but it is only a crowd, not an incipient riot.

    Day in and day out in any big city, police blotters will reflect the existence of a fairly steady background supply of theft, mugging, arson, and homicide. But this jumble of criminal mischief does not amount to a “riot”; riots are the coordinated acts of many people. If they are coordinated, who coordinates them? Authorities looking for ways to explain why trouble has broken out on their watch sometimes ascribe exaggerated organizational powers to “outside agitators.”

    While, as we explain, there is definitely a leadership niche in the ecology of a mob, it seems to become important only after the crowd has assembled. Riots are not, as a rule, plotted and scripted affairs.

    It would be very difficult indeed to “stage” a riot. A person who set out to do so would encounter a series of difficult challenges. When should the riot be held? Where? How should the participants be notified? Once marshaled, how should they be instigated to behave in a way that would expose them to arrest? Trying to organize a riot as though it were a company picnic would quickly attract the attention of the police. And with the police watching, who would be brave enough to cast the first stone?

    How, then, do riots begin?

    Assembling the Crowd

    When something happens that causes a large number of riot-prone people to mass spontaneously in one place, while police cannot mass at a correspondingly rapid rate, the cost of starting a riot, as any one participant would figure it before the fact, would begin to decrease dramatically.

    It would decrease still more if it seemed to a prospective troublemaker that his own hopes and expectations about the potential behavior of the crowd were also the hopes and expectations of many of its other members, because in that case it would seem a better bet that if he did cast the first stone, many others would follow.

    The most obvious way to get a riotous crowd to assemble is the occurrence of what could be called a “Schelling incident,” after Thomas Schelling, the great master of strategic theory. In The Strategy of Conflict (1960: 90) Schelling wrote,

    It is usually the essence of mob formation that the potential members have to know not only where and when to meet but just when to act so that they act in concert. Overt leadership solves the problem; but leadership can often be identified and eliminated by the authority trying to prevent mob action.

    In this case the mob’s problem is to act in unison without overt leadership, to find some common signal that makes everyone confident that, if he acts on it, he will not be acting alone. The role of “incidents” can thus be seen as a coordinating role; it is a substitute for overt leadership and communication. Without something like an incident, it may be difficult to get action at all, since immunity requires that all know when to act together.

    It is not crucial, in the generative stage of a riot, that the participants act literally simultaneously. What is crucial is that offenses occur rapidly enough to overwhelm the police. From the rioter’s viewpoint, there is safety in numbers. There comes a point at which the police pass from inadequacy to impotence.  In the Los Angeles riot, the police actually pulled back from the trouble when it became obvious to everyone, including themselves, that there was nothing constructive they could do.

    Certain kinds of high-profile events have become traditional “starting signals” for civil disorders. In fact, incidents can become signals simply because they have been signals before. What ignited the first English soccer riot has been lost in the mists of history; but they had become a troublesome problem sometime during the nineteenth century, as Bill Buford (1991) makes clear in quoting old newspaper accounts in his Among the Thugs.

    Today, there is a century’s weight of tradition behind soccer violence. People near a football ground on game day know that a certain amount of mischief, possibly of a quite violent kind, is apt to occur. Those who dislike that sort of thing had best take themselves elsewhere. Certain people, though, thrive on the action — relish getting drunk, fighting, smoking dope; enjoy the whiff of anarchy, harassing and beating respectable people and vandalizing their property.

    Such people — hooligans — make a point of being where the trouble is likely to start. The sort of “soccer fans” about whom Buford wrote were mostly interested in barbarian camaraderie, not soccer. Some of them do not even go inside the stadium, and some spectators do not watch the game but pass their time in petty thievery. Hooligans’ game is being a part of the crowd that congregates near a soccer stadium, belonging to and sharing its power, especially its power to flout the law.

    A Schelling incident is not a signal that tells a person what to do. It is a signal that tells a person what other people will probably do. In the United Kingdom even an ordinary minor league soccer match might well be a Schelling incident. Buford gives several examples.

    In the United States, that sort of game would not be — but having one’s team win a National Basketball Association championship increasingly seems to be. In Detroit in recent years, “Devils Night” (the night before Halloween) has become a springboard for multiple, independent, almost simultaneous acts of arson. These are examples, baleful ones, of how culture, habit, and tradition can overcome major organizational barriers to cooperative social endeavors and lower the cost of transacting business.

    As word spreads of a conventional triggering event — whether it is shocking (like an assassination) or rhapsodic (a three-peat) — crowds form spontaneously in various places, without any one person having to recruit them. Each member of the crowd will know more about the intentions of fellow crowd members than people usually know about the intentions of strangers, because once a starting signal has been given, people know that a riot is impending. They gather into crowds because they want to participate and they know why the other people in the crowd, or at least a great many of them, have come.

    Not every crowd threatens to evolve into a riot. In fact, the opposite is more often true: people bent on criminal mischief usually do not want lots of witnesses and possibly hostile bystanders around when they commit crimes. And so the psychology of the crowd’s members is crucial. A significant number of the crowd’s members must expect and desire that the crowd will become riotous. That is, there has to be a critical mass of people in the crowd who are making accurate judgments, not about their own desires and intentions, but about the riotous desires and intentions of other members of the crowd.

    The Role of the Entrepreneur

    For a riot to begin, it is necessary but not sufficient that there be many people who want to riot and who believe that others want to riot too. One more hurdle has to be overcome. Even in an unstable gathering, the first perpetrator of a misdemeanor is at risk if the police are willing and able to zero in on him. Thus, someone has to serve as a catalyst — a sort of entrepreneur to get things going — in Buford’s account, usually by breaking a window (a signal that can be heard by many who do not see it).

    In civil rights, anti-war, or anti-abortion marches, it is probably pretty common to find participants eager to expose themselves to arrest in exchange for the chance to optimize the desired impact of their protest.

    This sort of self-sacrifice is certainly rare in ordinary riots, where potential rioters’ behavior is consistent, we suppose, with something like the following calculation: “If somebody else gets the riot started, I can participate without much risk. But if I stick my neck out and nobody follows, I’ll be the only one arrested. So I’ll wait for somebody else to go first.”

    If every would-be rioter reasoned thus, nobody would cast the first stone, and the riot would not ignite. This is a typical free-rider problem, as economists have called it. It is usually sufficient to prevent riots from occurring, even where there is a plentiful supply of disposed participants. Riots await events that surmount the free rider problem.

    The entrepreneur will throw the first stone when he calculates that the risk that he will be apprehended for doing so has diminished to an acceptable level. The risk of arrest declines as a function of two variables — the size of the crowd relative to the police force available to control it, and the probability that others will follow if somebody leads. This latter point could potentially be tricky, because as we have noted, crowds will generally be inhospitable to the commission of violent acts. But it is possible for a crowd to telegraph its willingness to riot.

    Buford’s account (1991: 81—85) of a soccer hooligan rampage in Turin furnishes an example. Members of the crowd marched themselves around in a spontaneous formation with a stilted, unnatural gait, chanting the name of their team. This unmistakable token of cohesion stopped well short of anything that the Italian police could plausibly charge as solicitation or incitement, but served to assure the members of the crowd that a critical mass had formed.

    Sometimes a crowd will not clearly commit itself to riot, and in such instances an entrepreneur will take more of a risk getting things started. But if he has done his implicit calculations properly, once the first plate-glass window is broken, the looting will begin and will spread and continue until the civil authorities muster enough force to make the rioters believe that they once again face a realistic prospect of arrest.

    The Formation of Action Nodes

    As we saw in the case of Los Angeles, riots do not occur everywhere at once. Most of the homes and businesses in south-central L.A. and Koreatown (which cover a number of square miles) were untouched by the riot. Damage was concentrated at certain intersections and along certain strips, what we call “action nodes.” How did the rioters know where these action nodes were?

    Schelling (1960: 54—58) again offers a framework for analysis by offering powerful evidence for the existence of focal points in social life. People who may never have met are nonetheless capable of coordinating their behavior under some circumstances. In one experiment, two people were instructed to think of a number between one and ten and told that both would be paid a reward if each arrived at the same answer. Subjects’ ability to psyche one another out far exceeded chance.

    Perhaps even more surprising, certain open-ended questions can elicit a high amount of agreement. For example, in one experiment Schelling asked his subjects what they would do if they were simply told to go and meet someone in New York City on a certain day. Out of all the possibilities for when and where to meet, a majority, trying to intuit where and when other people would expect them to be, would have converged at the information booth in Grand Central Station at high noon!

    Nothing paranormal is reflected in these experiments. Although it goes beyond what is definitely known to say what makes for a focal point, some features do seem to emerge pretty clearly from Schelling’s experiments. For one thing, uniqueness seems to be important.

    When asked to pick a point on a map to await another person with the same map but with whom no meeting place has been arranged, many people will select a house on a map with one house and many crossroads, but will select a crossroads on a map with one intersection but many houses.

    And, of course, uniqueness makes sense when selecting focal points. Even if both parties select a house in the latter instance, the chance that they will select the same house is small. If one of many houses is distinct, however, it may be selected by some participants — a single mansion may be selected as a focal point even on a map with many houses.

    Another element that seems to figure in establishing a focal point is what could be called contextual prominence — for example, the number “one” in a series of numbers, or the center of a circular area or a mountain rising from a plane.

    We cannot say how a resident of South-Central L.A. might go about selecting a focal point. In fact it seems consistent with Schelling’s experiments that there would have been a number of focal points, although substantially fewer than there were residents. For example, any of several major intersections, parks or schoolyards may have seemed the natural place for a large number of riot-disposed people to gather following the acquittals in People v. Powell (the original Rodney King beating case), which amounted to a Schelling incident at least in part because for weeks it had been advertised as such by TV and newspaper accounts of the trial.

    One can hardly doubt that many residents of South-Central bent on making trouble arrived at places they expected to be “focal” only to find them largely deserted. But Schelling’s work implies that a substantial number of others would have guessed right — would have gone to a major intersection, Korean strip-mall parking lot, or other public space and found the crowd they had expected to find nearing its critical mass — waiting for some of the outliers from non-viable focal points to find their way to more promising locations.

    But here is a problem. Those who selected a non-viable focal point — in other words, those who guessed wrong — would now have to find out where everyone else went in order to join them. How did they get this information? Los Angeles’ television stations’ aggressive news coverage of the disturbance from its very beginning seems to have played a key role.

    Within minutes after the verdicts were announced in Powell, minicam crews were doing news “live from the scene,” letting everyone in town know where the trouble was. Innocents thus learned what neighborhoods to avoid; but non-innocents, who wanted to take part in the looting, also found out where to go.

    Although inadvertently, the stations lowered the search costs for aspiring rioters. Without TV, other techniques would surely have been used by people trying to find out where to go in order to loot and burn with little fear of arrest. But the broadcast media are by far the best way to get accurate information to many people at once. Especially in spread-out places like Los Angeles, rioting would be less likely to occur if information about the location of viable focal points were harder to come by.

    The Role of Reputation

    Although the conventional “racism-poverty-lack-of-opportunity” explanation is overly broad and somewhat shopworn, we do think it useful in explaining the makeup of a riotous crowd. Racism and poverty would clearly merit social concern even if they had no connection to people’s disposition to engage in rioting. But these are indeed predisposing conditions. One seldom sees riots break out at a convention of orthodontists. Why?

    Respectability — a reputation for behaving in a predictable, socially benign manner — is an extremely valuable asset for most people who live in the middle-class world. It is one of the key ingredients in career and personal success, and the need for it serves as a sort of performance bond to keep middle-class people in line. A person to whom respectability matters much should demand better odds before risking arrest and disgrace than would a football hooligan or a member of the American urban underclass or any other socially marginal character to whom respectability is of relatively little value.

    Such a person has something that a middle-class person lacks — a great deal of nihilistic freedom of the “nothing to lose” variety. Such freedom, experience suggests, is a perplexing and often malignant possession. Any social policy that would materially improve the life chances of a potential rioter would concurrently raise the value of respectability to such a person, and thus dampen the incentive to participate in civil disorders.

    This is not to suggest that reputation matters less to a hooligan than it does to an orthodontist. The question is, reputation for what. A valuable reputation among the thugs is a reputation for hard partying, physical toughness, “sticking by your mates,” and, above all, an ability to engage in predatory behavior without being arrested.

    British football hooligans and members of American street gangs do not direct their aggressive behavior at members of their own group, but only at outsiders. Reducing these individuals’ disposition to violence would seem, therefore, to involve getting them to identify with the larger community — making them middle-class, in other words.

    Alas, that is easier said than done. Many years of heavy social spending and a “war on poverty” have established that social and economic privations are very difficult to remove even in the long run, and in the short run can hardly be influenced at all. It follows, therefore, that riots are likely to be with us recurrently for the foreseeable future, and that the focus of public debate about riot management should concentrate on symptomatic remedies. Here, at least, some constructive ideas seem worth exploring.

    Stopping a Riot

    Once it gets started, rioting is difficult to stop by authorities as constrained as American police forces are. Indeed, two different kinds of constraints are important. The more obvious are the rules of constitutional law, which set stringent limits on how police officers may behave toward those whom they try to arrest. Second are the budgetary facts of life that guarantee that modem urban police forces will always be staffed well below peak load demand levels.

    Both these constraints should affect the probability of riots occurring and their duration and severity if they do occur. Traditional deterrence theory teaches that in order to discourage crime at the margin, one or both of two things have to happen: either the probability of catching the offender has to be visibly increased, or the harshness of the consequences to the offender in case he is caught have to be tangibly enhanced.

    In the case of riots especially, there is not much that police forces can do about either option.

    It is hard to imagine that the public would be willing to staff the police department at levels sufficient to deal with a riot immediately if one should break out: it costs a city’s budget about $60,000 or more to add just one additional officer to the force. Nor will there ever be enough prosecutors to try every rioter that could be arrested, nor enough prisons to house them if convicted. Every rioter understands these practical constraints very well. They spell practical legal immunity so long as a riot continues.

    If the police try to cover most of the serious action nodes that develop, they will be spread too thin to do much good anywhere. If they abandon some action nodes to concentrate on a few, the trouble can be stopped at the selected locations, but the procedure is like nailing Jell-o to the wall. The riot simply flows around the impediment and goes to locations the police have not covered. Until the National Guard arrives, quadrupling or quintupling available manpower and increasing the apparent risk of arrest, matters simply run out of control.

    Of course, authorities prepared to resort to brutality can terminate riots promptly. Buford gives the example of how the Sardinian police militia smothered a soccer riot during the 1990 World Cup matches. Hundreds of rowdy English soccer fans had flown in on chartered planes, and were determined to find trouble. The police did not try to cover every action node at once; this would have left them outnumbered everywhere.

    Instead, following textbook military strategy, they massed forces and surrounded first one, then another group of hooligans inglisi, rendering each in turn hors de combat by beating them senseless with truncheons. Few of the Englishmen actually had to be arrested (which would have been very time-consuming for the police). Nevertheless, because they were not allowed to innocently transpire through police lines to re-appear at some less well-defended action node, the riot soon collapsed.

    No one would suggest that American police should emulate this style of riot control. And almost as objectionable for other reasons would be censoring television or radio news in order to impede the formation of action nodes.

    The Supreme Court has often stated (although not often acted upon) the principle that censorship for compelling reasons of national security does not offend the First Amendment. Even if this tenet is defensible in wartime, it stretches the point considerably to apply it to riots. Clearly there would be serious danger of political opportunism if authorities were permitted to interdict the flow of news merely because they asserted a fear that riots might otherwise ensue.

    Presently, every politically incorrect public manifestation would be subject to seizure or arrest. Such a thing actually happened in Chicago some years ago, when a gang of vigilante aldermen, on the unlikely premise that they were trying to forestall civil unrest, stormed an exhibition hall at the Art Institute and commandeered an oil painting that disparagingly portrayed the recently deceased Harold Washington, Chicago’s first black mayor.

    There is a third option, however, that might ultimately prove more palatable. According to our analysis, the proximate trigger of a riot is an entrepreneur’s calculation that he is unlikely to be arrested if he breaks a window. If as swiftly as they developed action nodes actually could be covered by the authorities, riots might not begin at all. Cities should consider how they might accomplish this objective.

    Experience has shown that the National Guard is not well adapted to the mission of early containment of a riot. It takes the Guard several days to get into action because when it is called, it is not merely foot soldiers that are summoned, but their entire apparatus of logistics and command that must be mobilized as well.

    Moreover, even the hint that authorities are thinking about calling out the National Guard could be seen as a provocative acknowledgement of a riot’s incipiency. Public appeals that the Guard be summoned may therefore amount to a sort of focal incident and do almost as much to choreograph the beginning of a riot as to deter its occurrence.

    Of course, once it gets into action, the Guard does seem to pacify full-blown riots fairly swiftly. This fact suggests that sheer numbers of anti-riot personnel may be more important than tactics, training, or other variables in quietening civil unrest.

    For this reason, cities might well consider the benefits of using a civilian auxiliary to reinforce and supplement the police force. Such a force could be deployed rapidly and demobilized just as fast once the trouble had died down because its command infrastructure, that of the municipal police, is always up and running. Of course it is out of the question for police departments permanently to maintain as many full-time officers as might be required by peak load demand.

    An analogy might be drawn to volunteer fire fighters, who receive training, though far less than their full-time professional counterparts, to enable them to meet contingencies too remote to justify commissioning full-time personnel.

    The original idea of the militia, as envisioned by the drafters of the United States Constitution, reflected something of the notion that ordinary citizens bore the final responsibility for the security of the communities in which they lived (Dowlut 1983: 93). When not burdened with a command and control superstructure, but simply used to supplement law enforcement resources already in place, a modem equivalent to the militia might well serve to stop trouble before it started.

    According to our analysis, riots are apt to be a more or less recurrent, if unpredictable, feature of social life. It is odd that our law enforcement apparatus seems to be designed for a world in which riots do not occur at all. With some imagination, public administrators could ensure that these destructive episodes become rare indeed.

    References

    • Buford, B. (1991) Among the Thugs: The Experience, and the Seduction, of Crowd Violence. New York: W.W. Norton & Co.
    • Dowlut, R. (1983) “The Right to Arms: Does the Constitution or the Predilection of Judges Reign?” Oklahoma Law RevIew 36(1): 65—105.
    • Schelling, T.C. (1960) The Strategy of Conflict. Cambridge: Harvard University Press.

    This article was first published in the Cato Journal in 1994 under the title “Understanding Riots.” © Cato Institute. All rights reserved. Reprinted with permission. 

  10. Rogue One and the Politics of Star Wars

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    Rogue One tells the story of how the Rebel Alliance got the plans to the first Death Star, setting up the iconic events of the original 1977 Star Wars film. In some ways, this is the best Star Wars movie since Empire Strikes Back. The story is strong and the characters compelling. In sharp contrast to the last four Star Wars movies, there are few notable plot holes. As Tyler Cowen puts it, in many ways “this is the real Star Wars movie that many of you have been waiting for.”

    In a review for Vox, Todd VanderWerff points out that Rogue One is also notable as the first Star Wars movie to focus primarily on the morality and costs of war. It pulls few punches in that regard. Many characters we care about suffer and die, often in painful ways.

    The awfulness of war is driven home by the fact that the heroic rebels in Rogue One are almost entirely ordinary people, with relatively ordinary abilities, rather than members of a Force-capable elite. Lead heroine Jyn Erso and her cohorts talk about how the Force is with them. But, with one marginal exception, none of them actually have the ability to use it as Rey or Luke Skywalker can. That makes their suffering — and their successes — more poignant and real.

    Despite its many virtues, however, Rogue One perpetuates several problematic aspects of the portrayal of political issues in the Star Wars series. I don’t blame fans who prefer to ignore the politics and just focus on the excitement and fun. But the politics of popular culture are worth examining, if only because they often reflect real issues and may have an impact on real-world political attitudes.

    What Are the Rebels Fighting For?

    More than any previous Star Wars film, this one focuses on the rebels and their reasons for rising against the Empire. Jyn and several other characters are victims of the Empire’s cruelty and oppression, which give them obvious motives to oppose it. But while we see what the rebels are fighting against, we have almost no sense what they are fighting for. What kind of regime does the Rebel Alliance intend to establish if it wins? Neither this movie nor its predecessors tell us.

    In Rogue One, we learn for the first time that the rebels are divided into radical and moderate factions. But it is not clear what, if anything, they disagree on, other than purely tactical issues.

    It is almost as if the rebels simply assume that, if the Empire is bad, virtually any alternative government is likely to be better. Such thinking has often proven dangerous in the real world. The Russian, Chinese, Cuban, and Iranian revolutions are among the many revolts against oppressive governments that ended up installing regimes even worse than those they supplanted.

    Many of the supporters of those revolutions backed them in part because they found it hard to imagine that anything could be worse than the terrible status quo. They turned out to be disastrously wrong. Even in democratic nations, voters often respond to a flawed status quo by backing “change agents,” without much consideration of whether the change they promise is actually likely to make things better.

    Star Wars could have done a valuable public service by questioning this kind of thinking. But it instead appears to buy into it, or at least ignore its potential flaws. That’s a shame. Would-be revolutionaries in any galaxy would do well to consider why the regime they seek to establish would be any better than the old.

    Dysfunctional Democracy

    Rogue One also continues the Star Wars tradition of portraying democratic institutions in a negative light. Whenever we see the Old Republic Senate in the prequel movies and the Clone Wars TV series, it is almost always either paralyzed by gridlock or actively causing harm, as when it gives Chancellor Palpatine the emergency powers he ultimately uses to establish the Empire. The New Republic government in The Force Awakens is little better. Despite the painful previous experience of the Old Republic, it allows the forces of the Dark Side to build up a vast armada under its nose without taking any action until it is too late.

    In Rogue One, the elected civilian leaders of the Rebel Alliance make terrible decisions that nearly lead to the rebellion’s demise. Such success as the rebels manage to achieve is largely due to heroic covert operatives and military commanders who disobey civilian orders.

    Having written a book on the dangers of voter ignorance, I can hardly claim that democratic institutions are infallible. Star Wars’ bleak portrayal of democracy has some elements of truth. Still, history shows that institutional flaws are usually best addressed through institutional solutions, not by trusting in a few heroes or great leaders. Star Wars, like many movies and TV series, tends to prefer the latter, more simplistic approach.

    That tendency is entirely understandable. It is much easier to tell an appealing story focused on heroic characters than one where well-designed institutions save the day. Star Wars would never have become a cultural icon if the Emperor were vanquished by the separation of powers or judicial review, instead of Han Solo, Luke Skywalker, and Princess Leia. But, however natural, this aspect of popular culture still risks reinforcing some of the public’s more dangerous political instincts.

    Not the Prejudice You Were Looking For

    Yale Law School Professor Stephen Carter offers a different political critique of Rogue One. Although the cast has been praised for its racial and gender diversity, he points out that the armed forces of the Rebel Alliance are overwhelmingly dominated by humans. If the rebels truly stand for equality against the “speciesist” Empire, “we should,” Carter writes, “have a rebellion that looks more like the galaxy.”

    This criticism is not entirely fair. Although the leading characters in Rogue One are almost exclusively human, as are the Rebellion’s foot soldiers and combat pilots, there are several prominent nonhuman rebel generals, admirals, and political leaders. If humans are nonetheless overrepresented in the rebel rank and file, there could be many noninvidious explanations for that. Few armed forces are perfectly representative of the populations they serve, even in the most egalitarian and liberal democracies.

    Star Wars does, however, perpetuate a kind of prejudice — just not the kind most of us are looking for. We may be sensitized to the evils of racism and sexism, but not the kind of discrimination most blatantly practiced in the Star Wars universe. Although the rebels seem to practice equality between races, genders, and intelligent biological species, they are largely oblivious to the oppression of droids.

    Droids are at least as intelligent as humans, and clearly feel emotions, such as hope, fear, and pain. K-2, the main droid character in Rogue One, has personality, free will, and a mind of his own to an even greater extent than C-3PO and R2-D2. Yet neither rebels nor imperials see anything wrong with treating sentient droids as essentially the slaves of biological beings.

    Much like many of the American Founding Fathers, the rebels are simultaneously freedom fighters and slave owners. Unlike George Washington and Thomas Jefferson, the rebels don’t even seem to realize that there is a contradiction between these two roles. Rogue One is a bit more sensitive to this issue than previous Star Wars films, but still shies away from squarely confronting it.

    The moral blindness here is not just that of the characters in the story. It is also shared by most of the audience, and perhaps most of the producers and writers as well. Unlike the shortcomings of democracy and revolution, this problem is not yet a significant issue in the real world. But it might well become so in the not too distant future. If one day we develop robots as intelligent and sentient as K-2, will we treat them as poorly as the denizens of the Star Wars universe have?

    Rogue One is a powerful and well-told story. But it’s still worth considering the subtle, but disquieting flaws in its approach to political issues. The questions they raise may not be confined to a galaxy far, far away.

    Ilya Somin is a law professor at George Mason University and the author of Democracy and Political Ignorance: Why Smaller Government Is Smarter (Stanford University Press, 2nd ed. 2016). He previously discussed the politics of Star Wars here and here.

  11. Does inequality make us miserable?

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    One politically-charged topic that has gained national prominence in recent years is income inequality: the fact that there is an ever-widening wealth gap between the rich and the poor.

    Libertarians have traditionally questioned whether wealth inequality warrants any concern at all — to say nothing of whether government intervention is justified to correct it. Indeed, classical liberals are usually much more concerned with the alleviation of poverty, rather than hand-wringing about who might have a larger slice of an ever-widening pie.

    Inequality and relative deprivation

    There is, however, another way of looking at inequality: specifically, though the lens of relative deprivation: the extent to which people believe that they (or a group to which they belong) are getting less than they deserve or should expect, relative to others. While absolute deprivation refers to the extent to which a person’s basic needs (food, clothing shelter) are met, relative deprivation refers to the extent to which a person “keeps up with the Joneses.” If my car is older than my neighbor’s car, my house smaller than my neighbor’s house, and my computer is slower than my neighbor’s computer, I might suffer from relative deprivation because I am in a comparatively disadvantaged position,  — even if, in absolute terms, I am quite well off.

    If the impact of relative deprivation on human wellbeing is significant, one might make the argument that growing inequality should be taken seriously, and possibly be addressed by government through redistribution. However, as I will argue, no psychological topic – including relative deprivation – lends itself to an easy policy fix.

    A history of relative deprivation

    The concept of relative deprivation goes back at least as far as Karl Marx, who observed that “our desires and pleasures spring from society; we measure them, therefore, by society and not by the objects which serve for their satisfaction. Because they are of a social nature, they are of a relative nature.” Elsewhere, Marx noted that “a house may be large or small; as long as the neighboring houses are likewise small, it satisfies all social requirement for a residence. But let there arise next to the little house a palace, and the little house shrinks to a hut.”

    More recently, relative deprivation has become a topic of interest to social psychologists. As early as the 1950s, social theorists were interested in how people evaluate their well-being relative to that of their neighbors. In one early publication, Faye Crosby proposed one of the first formal models of relative deprivation, which specified the various conditions under which a person might feel deprived of something (e.g., they must “lack a sense of personal responsibility for not having [it]”), as well as the emotional and behavioral consequences of that perception. Crosby argued that such consequences could range from personal stress to acts of violence against society (for example, rioting and looting).

    Does relative deprivation matter?

    Despite much theorizing and speculation, there is actually little empirical evidence that perceptions of one’s relative position in society have a palpable impact on overall well-being. For example, within the United States, the General Social Survey (GSS) contains data on both these questions from 1972 to 2014. While the two variables are correlated, the relationship is small; in fact, perceptions of one’s income relative to other Americans explains just 4% of the variance in overall happiness.

    There are numerous reasons why the relationship between relative deprivation and well-being is so tenuous. First, relative deprivation intersects with another important theory in social psychology: social comparison.  People do not only compare themselves with people who are better off (known as upward social comparison). In fact, there is evidence that, most of the time, we compare ourselves with those who are worse off (downward social comparison). Evaluating ourselves in light of those who are doing poorly serves an important psychological function: it makes us feel better about ourselves, even if we are not as well off as we would like. That is, it puts our problems in perspective.

    Moreover, people are not apt to compare themselves to individuals they believe are not like them in critical ways. Our social comparison targets are usually accessible: when engaging in upward social comparison, we must believe that it is (or ought to be) possible for us achieve as much as the individuals to whom we are comparing ourselves. Those who are extremely wealthy whom we have never met, such as rock stars, celebrities, and Fortune 500 CEOs, are probably not good candidates for social comparison, at least for most of us. As such, the sort of inequality so heavily criticized by the populist left is less likely to trigger feelings of resentment than more attenuated levels of inequality between ourselves and people we know.

    The value of upward social comparison

    There is also a benefit to upward social comparison: by comparing our circumstances to those who are slightly better off, we can create an attainable set of goals for ourselves. In this sense, what is one person’s relative deprivation is another person’s motivation to succeed. If a salesperson sees that his coworkers are earning more commissions than he is, he would do well to seek their counsel. If I see that my colleagues have outperformed me in terms of publishing, teaching, and contributing to our field, a productive response is not resentment but imitation. Competition is healthy, and upward social comparison has (often under-recognized) benefits.

    From a pragmatic perspective, we should also note that combatting human misery by reducing feelings of relative deprivation is a difficult task with a small payoff. For example, Thomas Piketty has argued in his book Capital in the 21st Century for a (probably impossible to implement) global wealth tax for the express purpose of making the very wealthy less so. An alternative approach with a much more favorable cost-benefit ratio would be to combat poverty by expanding economic liberty and creating prosperity for all. After all, there is abundant evidence that economic prosperity is strongly associated with happiness.

  12. Trump inherits a super-powered presidency.

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    Now that the Electoral College has made Trump’s 2016 win final, this a good time to start thinking about what powers he will have when he comes into office in January. While the Constitution technically provides certain constraints on presidential actions, many of these formal and informal restrictions have fallen by the wayside.

    This leaves Trump with a presidency more powerful and more unchecked than any in history.

    The Growth of Presidential Power

    The dramatic increase in government services and departments during the Great Depression, coupled with the expansionary effects of a world war, left the federal government, and the president in particular, with new and broad powers. Gazing upon the redesigned government, Eisenhower warned of a military-industrial complex, saying, “Our military organization today bears little relation to that known by any of my predecessors in peacetime, or indeed by the fighting men of World War II or Korea.”

    Nonetheless, many citizens did not worry as Johnson tried to create “The Great Society.”

    With Nixon, however, Americans awakened to the real problem of providing presidents with so much control over foreign and domestic affairs. Nixon claimed the power to unilaterally authorize the bombing of Cambodia (after Congress explicitly condemned any action in that country) and he authorized the NSA to spy on American citizens without a warrant. Congress attempted to check these actions, creating the Foreign Intelligence Surveillance Court intended to provide government oversight of domestic surveillance. Instead, it provided the government with judges they needed to rubber stamp warrants for domestic surveillance. They also passed the War Powers Resolution intended to contain presidential discretion over military affairs. Instead, it served to provide the executive with a way to legally justify unilateral action that falls below the 60-90 day threshold. Presidents came to have legal authority to engage in actions without having to go through Congress.

    For this reason, Reagan saw a genuine opportunity to maintain popularity and achieve his objectives as president by using the power of his office to dramatically increase the arms race in order to defeat the Soviet Union. His gamble paid off as the Soviet Union fell.

    Both George H.W. Bush and Clinton followed this model, seeing major domestic policies frustrated while enjoying heightened popularity when they intervened internationally.

    By the time George W. Bush came to power, the executive branch had an established focus on international crises, only paying lip service to any sweeping legislative changes. The War on Terror served as a shot of steroids to presidential unilateralism and continues juicing it to this day.

    While the president today has a variety of powers (enumerated, implied, discretionary and — more controversially — inherent ones), none are more controversial and disconcerting than the commander-in-chief power and the ability to authorize executive orders.

    The Commander-in-Chief Power

    As we all know from reading the Constitution (that’s something everyone does, right?) the president is the commander-in-chief of the armed forces. This provides him with the ability to initiate hostilities against any organization or country around the world at any time by ordering the armed forces into action.

    They are duty-bound to follow his orders. Even if the president orders an illegal action, such as waterboarding suspects or targeting the families of terrorists, it is likely that the military would have the same reaction as they did when George W. Bush ordered illegal actions — they obeyed and simply wrote memos outlining their legal and moral concerns.

    Referring back to the Constitution — that everyone reads — one might be tempted to say that Congress, not the president, has the power to declare war. Many legal scholars argue that Congress’s power to issue letters of marque and reprisal provides them with the exclusive power to initiate both large- and small-scale hostilities. By the letter, this is correct. By precedent, however, presidents have consistently initiated hostilities without prior authorization from Congress in most major and minor engagements.

    Executive Orders

    While Congress has the official law-making ability, presidents have used executive orders since the founding to engage in legislative actions. Executive orders come in many sizes and shapes. Some have limited impact on law and order, like Washington’s Thanksgiving Proclamation. Presidents have passed a little over 5,000 ceremonial proclamations similar to Washington’s.

    Other orders are more significant. Presidents have passed around 3,200 orders that impact both foreign and domestic policy. These include “settle down” proclamations that come as a response to domestic unrest, such as John F. Kennedy’s cease and desist order to opponents of civil rights legislation in Mississippi or George H. W. Bush reacting to riots in Los Angeles in 1992. Some of these initiate the use of the military to quash riots.

    Others shook the foundation of liberal democratic society, such as FDR’s order to intern Japanese Americans or George W. Bush’s order to forgo the Geneva Convention’s restrictions on interrogation techniques.

    Unlike the passage of legislation, which requires lengthy discussion and a great deal of compromise, executive orders exist outside the confines of agreement. To quote Obama on the subject, “We’re not just going to be waiting for legislation in order to make sure that we’re providing Americans the kind of help they need. I’ve got a pen and I’ve got a phone.” This, ladies and gentleman, is all one requires in order to create an executive order.

    Bending the Constitution

    The Constitution places constraints on the exercise of power in order to protect the rights of American citizens. The Founders created a system that separates legislative, executive, and judicial power into different sets of hands in an attempt to ensure that government has to engage in a collaborative effort in order to change policies. It is a system created to force “ambition … to counteract ambition.”

    It is therefore unsurprising that presidents, frustrated with the tedious process of obtaining congressional approval, seek to get around the legislative branch. It is problematic, however, when Congress and the Courts allow presidents to act that way. It is now possible for the president to unilaterally control military operations and create legally binding executive orders that can fundamentally undermine the very core of liberal democracy.

    This power will now be in the hands of a man who promises to “bomb the hell out of ISIS,” thinks we should “take out [the] families” of terrorists, and wants to suspend immigration from countries with “a proven history of terrorism.”

    Considering his current cabinet picks and his personality, it is likely that President Trump will bring the use of unilateral powers to a new level. Whether you support or oppose his views, this is a meaningful cause for concern. Constitutions can only bend so much before they break.