Ever since economists failed to predict the Great Recession of late 2007 to 2009, a growing number scholars in the field have added a greater historical and philosophical sense to their empirical research. It is no surprise that these economists are mostly of the Austrian school or influenced by it, since that school’s founders—Carl Menger, Ludwig von Mises, and F.A. Hayek—viewed economic data with suspicion. Their heirs in America include Russ Roberts, Michael Munger, Deirdre McCloskey, and Tyler Cowen.
One of the glories of our constitutional structure is competitive federalism. Under the original Constitution, the states had very substantial powers of regulation. But they were disciplined in large measure because they were forced to compete in a market for governance. If a state imposed too many burdens on their citizens through either taxation or regulation or failed to provide needed public goods, citizens could leave.
For competitive federalism to work well, the federal government, however, does need to facilitate it. Most important are the constitutional rights that ease movement. Article IV of the original Constitution requires each state to extend the privileges and immunities it extends to citizens within its state to citizens of other states. Presumably that right effectively guarantees free movement in, out and, within the state for out-of-state citizens since states universally grant that right to their own citizens. The self-ownership assured by the Thirteenth Amendment eliminated a legal obstacle that African Americans faced travelling from state to state. The First Amendment assures that citizens can hear about conditions in other states and compare it to their own.
But it is not only the Constitution but federal statutes that can make a difference to the vibrancy of state competition.
Those who live in a bubble had best admit it, and apparently I do.
In his most recent New York Times column, Tyler Cowen writes about two competing goals concerning economic distribution:
Income equality is about bridging the gap between the rich and the poor, while economic mobility is about elevating the poor as rapidly as possible. Finding ways to increase economic mobility should be our greater concern.
I agree completely. In fact, I find it hard to understand how anyone can be concerned with income equality rather than economic mobility.
First, it seems clear that people should be concerned with economic mobility. If one is concerned about the poor, the relevant normative question is not how much poorer than the rich they are, but how high their standard of living is. If the only choice is increasing a poor person’s income by $100 while also increasing a rich person’s by $1000, one should do it. Otherwise, you do not really care about the poor.
Economic inequality in the country is rapidly increasing. But our libertarians are right that inequality, by itself, hardly undermines the case for liberty.
A free country is a place where everyone is getting better off, although some, because of their hard work and natural gifts, more than others. Libertarians always point to the progress of technology as benefitting us all. Everyone is living longer, or at least everyone responsible enough to attend to what we can all know about avoiding the risk factors that imperil our health. In our march toward indefinite longevity and even the Singularity—the moment in time when machines are smarter than humans— it might be reasonable to hope that few will be left behind. And almost everyone benefits from the constant improvement and plummeting cost of the “screen”—from the smart phone to the tablet and laptop to the huge flat-screened TV.
I am grateful for to Peter Lawler for his interesting comment on my post. I agree with much of it. My focus in The State of Our Liberty—an implicit response to the State of the Union– was on the effects our government is having on liberty, which I think are generally not happy. Lawler believes, and I do as well, that technological developments may nevertheless help foster liberty.
Indeed, I am even somewhat more optimistic than Lawler in this regard, because I do not believe technology poses as much risk to equality as he appears to think. As I have written on this blog, technological innovation helps equality in important respects, because innovations create a pool of cheap and free goods that everyone soon enjoys. Middle class people and the very rich have more equal lives today than did the middle class and very rich in previous times, because both spend an increasing amount of time on the internet and their experience there is not dissimilar. And innovations like smart phones go down the income scale much more rapidly than do previous innovations like refrigerators.
Moreover, the social media of today equips a much broader group of people to spend a large part of their lives writing and otherwise expressing themselves through blogs and even Facebook postings. As Clive Thompson has written in his excellent book, Smarter than You Think, the personal creativity enabled by social media dwarfs that of the letter writing of old. Thus, I do not agree that even a robotic future will relegate people to lives of passive entertainment, which appears to be the view Peter Lawler ascribes to Tyler Cowen. They will be able to follow their passions in ways that are inexpensive and largely free.
I appreciate John McGinnis’s account of the state of our liberty. He’s right that by some objective measures liberty is on the decline. But, a consistent individualist might say, liberty is on the march when it comes to same-sex marriage, legalized marijuana, and the general front of “lifestyle liberty.”
From this interesting interview with Tyler Cowen: I turn to politics. What does he look for in a candidate? “What I would like to vote for is a candidate that is socially liberal, a fiscal conservative, broadly libertarian with a small ‘l’ but sensible and pragmatic and with a chance of winning. That’s more or less the empty set.” The closest to this he ever found were the Free Democrats in West Germany. This inevitably leads us to today’s Germany and the eurozone crisis. “Well I think I’ve always been the hopeful one,” he says once the kidfo is scoffed. For Cowen, it is vital…