Cafe Hayek — where orders emerge

To Have Such Problems…

by Don Boudreaux on July 15, 2017

Here’s a letter that I sent several days ago to the New York Times:

Whatever your politics, you should be cheered that Mark Penn and Andrew Stein, in their inventory of issues that demand government action, include “Rural areas have been left without adequate broadband” (“Back to the Center, Democrats,” July 7).

America is a wealthy and thriving country indeed when among our most pressing concerns is this most First-Worldy of First World problems.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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Nancy MacLean Unraveled

by Don Boudreaux on July 14, 2017

in Books, Myths and Fallacies

Henry Farrell and Steven Teles write very critically, in Vox, about Nancy MacLean’s book Democracy in Chains. (Will Prof. MacLean now allege that even Farrell and Teles are operatives in a demonic right-wing conspiracy against her?) A slice from Farrell’s and Teles’s excellent article:

Public choice economics succeeded in part because it had valuable things to say. Politicians indeed sometimes care more about reelection than doing the right thing. Voters often fail to pay attention, allowing lobbyists to persuade politicians to enact regulations that favor the few rather than the many. These arguments may have been best articulated by right-wing thinkers, but they have value for the left too, because they identify real problems. When MacLean depicts people like Buchanan and Cowen as wicked monsters, out to destroy democracy, she excludes the possibility that she or her readers could learn from them.

Duke University political scientist Georg Vanberg carefully and eloquently explains why MacLean’s understanding of Jim Buchanan’s scholarship is deeply mistaken. A slice:

What then, of “chains on democracy”? It is true that Buchanan did not think much of unfettered, majoritarian politics and favored constitutional rules that restrict majority rule. But the foregoing discussion should already make clear that this conclusion was not based on an anti-democratic instinct or a desire to preserve the privilege of a few. Instead, Buchanan’s careful analysis, originating in his seminal work with Gordon Tullock, “The Calculus of Consent,” led him to the conclusion that in choosing a political framework (“constitution”), all individuals will typically have good reasons to favor some restrictions on majority rule in order to protect against the “tyranny of the majority.” As he argued, democracy understood simply as majority rule “may produce consequences desired by no one unless these procedures are limited by constitutional boundaries” (Buchanan 1997/2001: 226). In other words, what justifies “chains on democracy” for Buchanan are his commitment to individual autonomy and equality, and his emphasis on consent as a legitimating principle for political arrangements. To paint his endorsement of constitutional limits on the use of political power as motivated by an anti-democratic desire to institute oligarchical politics is to fundamentally misunderstand Buchanan’s sophisticated, subtle approach to democratic theory, which was committed above all to the idea that political arrangements should redound to the benefit of all members of a community.

Steve Horwitz again takes on MacLean’s delusional belief that the many challenges to her book are evidence of a plot to discredit her and to hide the ugly truth that she believes herself to have so brilliantly brought to light.

Hartmut Kliemt has questions for Nancy MacLean.

George Leef doesn’t like James Kwak’s book, but understandably finds MacLean’s to be even worse. A slice:

In fact, there has been so much criticism that MacLean feels the need to ask supporters to come to her defense. As we read in this July 12 Inside Higher Ed story, MacLean is said to have written, “I really, really need your help…. Koch operatives and the riders of their academic gravy train…are working hard to kill Democracy in Chains and destroy my reputation….”

So rather than admit she has written some indefensible things in her book, MacLean calls on loyal members of her “progressive” tribe to launch a counterattack to save her book and reputation. That’s not the way academics should operate. When their work is challenged, they should squarely face each challenge, not evade it with ad hominem attacks on the motives, operation, or funding of the critics.

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Quotation of the Day…

by Don Boudreaux on July 14, 2017

in Virginia Political Economy

… is from pages 6-7 of Vol. 19 (Ideas, Persons, and Events [2001]) of The Collected Works of James M. Buchanan; specifically, it’s from Jim’s 1990 article “Born-Again Economist” (original emphases):

There are subtle but important differences between the allocationist-maximization and the catallactic-coordination paradigm in terms of the implications for normative evaluation of institutions. In particular the evaluation of the market order may depend critically on which of these partially conflicting paradigms remains dominant in one’s stylized vision. To the allocationist the market is efficient if it works. His test of the market becomes the comparison with the abstract ideal defined in his logic. To the catallactist the market coordinates the separate activities of self-seeking persons without the necessity of detailed political direction. The test of the market is the comparison with its institutional alternative, politicized decision making.

DBx: Jim’s plea here – as it is throughout much of his writings – is for comparisons to be appropriate. Comparing ideal, Platonic apples to real-world oranges is pointless, at least if our goal is to choose to eat an apple or an orange. The appropriate comparison, if we’re trying to decide between eating an apple or eating an orange, is of real-world apples with real-world oranges.

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The Relevant Part of Buchanan’s Memo

by Don Boudreaux on July 14, 2017

in History, Myths and Fallacies, Reality Is Not Optional

Dr. Solomon Stein is playing a leading role in archiving my late colleague James Buchanan‘s papers. I thank Solomon for sharing with me Buchanan’s unpublished 1973 memo that Nancy MacLean quotes both on page 120 of Democracy in Chains and in her recent fantastical and mistaken assertion that she’s the target of “a coordinated and interlinked set of calculated hit jobs.”* The 1973 memo – which I mentioned yesterday in this post – is long. It was written as a set of notes in preparation for an upcoming meeting in Los Angeles of 14 senior free-market-oriented academics (including Buchanan), think-tank executives, and government officials. Much of this memo is in the form of phrases (rather than complete sentences) and it is filled with misspellings and poor punctuation.

Pasted below is the part of the 1973 memo (corrected only for obvious misspellings) from which MacLean quotes – the part from which, in her recent plea for help against the imaginary “set of calculated hit jobs,” conveys the impression that Buchanan thought of, and described as, a “gravy train” the assistance to higher education given by the Kochs. This impression is completely false.

But, more importantly, than these, need means of attracting new adherents. New young scholars. Personal experience. With force, young scholars can be attracted. And with money.

Current market for Ph D’s. Money talks. FREE-Center experience. Useful for spillover results, perhaps in long run far more important than short term results.

Project by project. Use not for purpose of generating results, per se, although this would be puich [unsure what this was meant to be, pitch?] But use as means or devices to get young scholars, many of whom are noncommitted, interested in and committed to set of values, notions. There seems nothing at all unethical in this. Simply using funds to accomplish both good research and to bring men into the fold. And this must be done. In one sense, this is what our opposition has done for decades. Nominally, funds for projects. But what short of projects, results did not matter. gravy train did. Federal funds used in this way. Why not use them in other ways.

……….

* Here’s the full quotation from the relevant part of MacLean’s plea for help: “This will sound nutty, I know, but it’s actually happening: the Koch operatives and the riders of their academic “gravy train,” as James Buchanan called it, are working very hard to kill DEMOCRACY IN CHAINS –and to destroy my reputation (as they have done to climate change scientists and others bearing inconvenient truth).

“It appears they are using Washington Post blogposts as a seemingly respectable pivot for a coordinated and interlinked set of calculated hit jobs. By using the WAPO blogposts, they make it appear to the ordinary web surfer that the WAPO itself is trashing my book when it’s really the Koch team of professors who don’t disclose their conflicts of interest and the operatives who work fulltime for their project to shackle our democracy. The other side was getting top placement because their team was clicking and re-clicking and sending embedded links, and the velocity of their activity drove up their links.”

MacLean is spot-on about the nutty part.

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James Buchanan Was Not Referring to Koch Contributions

by Don Boudreaux on July 13, 2017

in Books, Myths and Fallacies, Virginia Political Economy

Here’s a letter to Inside Higher Ed (links added):

Democracy in Chains author Prof. Nancy MacLean pleads for fellow progressives to help protect her from the many negative reviews that her book is receiving (“Stealth Attack on Liberal Scholar?” July 12).

It’s true that negative responses are coming fast and furiously from those of us who actually knew the subject of her book (the late Nobel laureate James Buchanan) and who know the subject-matter (public-choice economics) that MacLean bizarrely alleges to be part of a racist plot to silence the many for the benefit of the privileged few. But MacLean goes totally off the rails when she writes that “the Koch operatives and the riders of their academic ‘gravy train,’ as James Buchanan called it, are working very hard to kill Democracy in Chains – and to destroy my reputation.”

First, none of us are “Koch operatives” (whatever that term might mean). Second, our goal is not to destroy MacLean’s reputation but to protect Buchanan’s from her wildly inaccurate portrayal. Third, contrary to MacLean’s claim, Buchanan used the term “gravy train” to refer neither to the Kochs’ contributions to higher education nor to any benefits that market-oriented professors generally might receive from the contributions of private donors. The “gravy train” quotation – the source of which MacLean footnotes on page 270 of her book – is from an unpublished, informal 1973 memo written by Buchanan in which he suggests that one way to attract more graduate students and freshly minted PhDs (“New young scholars”) to do the kinds of social-science research that he believed should be done was to increase the size of their academic stipends and honoraria.

It is deeply disturbing that a professor of history who presents herself as having written a factual account of the life’s work of Jim Buchanan misquotes him in a way to give readers the impression that he said something that he quite emphatically did not say.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

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Bonus Quotation of the Day…

by Don Boudreaux on July 13, 2017

in Reality Is Not Optional, Virginia Political Economy

… is from page 46 of my late Nobel laureate colleague Jim Buchanan‘s superb 1979 article “Politics Without Romance,” as it is reprinted in volume 1 of The Collected Works of James M. Buchanan: The Logical Foundations of Constitutional Liberty:

Public choice theory has been the avenue through which a romantic and illusory set of notions about the workings of governments and the behavior of persons who govern has been replaced by a set of notions that embody skepticism about what governments can do and what governments will do, notions that are surely more consistent with the political reality that we may observe all about us. I have always said that public choice offers a “theory of government failure” that is fully comparable to the “theory of market failure” that emerged from the theoretical welfare economics of the 1930’s and 1940’s.

DBx: What sober-minded and mature person reads these words and concludes that they describe a stealthy, evil, racist scheme to unjustly silence the many for the benefit of the wealthy few? What sensible and scientifically minded person insists that truth and justice are assured only when the imperfect markets of reality are compared to the perfect political institutions that exist only in the imagination rather than to the imperfect political institutions of reality? Answer: no such person.

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These are Nancy MacLean’s Actual Words

by Don Boudreaux on July 13, 2017

in Myths and Fallacies, Reality Is Not Optional

(Read this Cafe Hayek post only if you commit to read it in its entirety.)

In her response to Russ Roberts’s post on her allegation that Tyler Cowen is an enemy of democracy, Nancy MacLean wrote

I support and would … be involved in any attempt to overturn the American democratic system of majority rule.

Wow! Who knew that Nancy MacLean wants to put democracy in chains?!

(Of course, in offering the above quotation I naturally used the standard and well-known practice of editing someone’s words for considerations of space and clarity.)

Now in truth, if you read all that Prof. MacLean says – in her response to Russ and elsewhere – as well as take account of the context of her words, it’s clear that she has no wish to “overturn the American system of democratic rule.” MacLean’s real view is precisely the opposite of the view that the unsuspecting reader would take away from reading only my above quotation of her. But my above intentional misquoting of her is no different from her careless misquotations of Tyler and of Jim Buchanan (or of David Boaz) – her misquotations of these scholars that give her readers reason to believe that Tyler and Buchanan (and Boaz) each wrote things that are precisely the opposite not only of the thoughts that each scholar intended to convey but the opposite also of what each scholar actually wrote.

A major theme of Jim Buchanan’s life work is the importance of rules. Everyone, he believed, ought to have an equal say in making the rules, and everyone who agrees to play by certain rules should play by them and expect everyone else who agrees to play by those rules to play by those rules. Among Nancy MacLean’s rules seems to be this: “It’s acceptable to misquote someone in order to make it appear as if that someone believes exactly the opposite of what that someone really believes.” So, under that MacLeanian rule, I would have been perfectly justified in ending this blog post immediately after my above quotation of her. She would have had no just cause for complaint.

Alas, though, I do not agree to play by that rule. It’s a bad rule. The rule I prefer is that authors should be quoted accurately and in ways that convey as fully and as unambiguously as possible their real meaning. Fortunately, the rule that I prefer is the rule that the vast majority of scholars and writers prefer and follow. But beware: Prof. MacLean does not play by this standard rule of accurate quotation. Her rule seems to be that inaccurate and misleading quotations are acceptable. As David Bernstein says in this comment on an earlier Cafe Hayek post:

As much more of a historian than an economist, I am more impressed with her misuse of historical sources. Every time I found something in the book that didn’t sound right, and I was able to check the sources, the sources don’t say what she says they say.

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Nancy MacLean’s Sloppy ‘Scholarship’

by Don Boudreaux on July 13, 2017

in Books, Truth-seeking & ideology

Steve Horwitz has found yet further evidence – in a 1996 review of a 1994 book – that Nancy MacLean is such a sloppy and unscholarly “scholar” that her work is not to be taken seriously. I paste below, in full, Steve’s short post, which appears at Bleeding Heart Libertarians.

A Devastating Review of Nancy MacLean’s Book on the Klan

Good fortune has brought me a review of Nancy MacLean’s 1994 book on the KKK. If you think Mike Munger’s review of the new book was devastating, this is worse. And the author of the review has no Koch connections whatsoever. Plus, do the quotations below from the reviewer sound familiar?

“Leaving Athens behind, MacLean roams the country picking out statements that fit her case that the Klan was radical and violent. if someone connected with the Klan claimed to be a devotee of the Constitution and only against lawbreakers, particularly those associated with Demon Rum, MacLean doesn’t believe him, does not bother to examine his motives or statements, and does not herself set forth any rule of interpretation that enables one to determine when Klansmen were speaking from the heart and when they were dissimulating. Perhaps all of their Main Street platitudes were self-conscious lies, but on what basis can we conclude that?…

Her argument is circular and ahistorical. It is circular because a lack of evidence is said to be proof of the Klan’s power to suppress it, and that alleged power is then hold to imply that there must have been much more violence than there is evidence to support.”

I have tried hard to treat her as a serious scholar who went off the rails with the Buchanan book, but now we seem to have a pattern here: cherry-picking evidence, circular reasoning, ascribing conspiratorial power to organizations when she lacks supporting evidence, and a refusal to grant any legitimacy to her sources’ own words. It’s the same pattern we see in Democracy in Chains

And this reviewer, again, has no taint of Koch, yet found all the same sorts of problems.

As they say, read the whole thing.

Published on: July 12, 2017
Author: Steve Horwitz

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Don’t Fear the Robots

by Don Boudreaux on July 13, 2017

in Agriculture, Growth, Innovation, Myths and Fallacies, Seen and Unseen, Technology, Work

Here’s a letter to the Washington Post:

Robert Samuelson wisely counsels against fear of robots (“Why robots won’t steal all our jobs,” July 12). But he stumbles a bit when he writes that this fear would be justified if the cost-savings made possible by robots “were saved and not spent.”

Even if all firms that adopt robotic techniques toss all of the extra monetary profits they earn into incinerators, economic growth will still occur and increased unemployment will still be avoided (at least as long as the price system continues to operate with reasonable freedom). The reason is that these innovations release real resources, including labor, to be used in other productive activities – activities that become profitable only because of this increased availability of resources. Entrepreneurs, ever intent on seizing profitable opportunities, hire and buy these newly available resources to expand existing businesses and to create new ones. Think of all the new industries made possible when motorized tractors, chemical fertilizers and insecticides, improved food-packaging, and other labor-saving innovations released all but a tiny fraction of the workforce from agriculture.

Labor-saving techniques promote economic growth not so much because they increase monetary profits that are then spent but, instead, because they release real resources that are then used to create and expand productive activities that would otherwise be too costly.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA 22030

And again I ask: If human-like robots are sure to create a permanent rise in unemployment, why haven’t those most human-like of substitutes for current human workers – namely, other humans (whose numbers have skyrocketed over the past two centuries) – created a permanent rise in unemployment?

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Quotation of the Day…

by Don Boudreaux on July 13, 2017

in Philosophy of Freedom, Virginia Political Economy

… is from page 63 of Vol. 19 (Ideas, Persons, and Events [2001]) of The Collected Works of James M. Buchanan; specifically, it’s from Jim’s 1992 essay “Virginia Political Economy: Some Personal Reflections”; note that Buchanan came to call the research project that he co-founded and led “Virginia Political Economy”; he did so for two reasons: Buchanan deeply admired the political ideas of 18th-century Virginians, especially those of James Madison, and, save for his one year on the faculty at UCLA, Jim spent the final 57 of his 93 years in Virginia (at UVA, then Virginia Tech, and finally – and for the single longest period – at George Mason University):

Underneath its abstract analysis, the Virginia research program has always embodied a moral passion that our adversaries have fully appreciated. This program has advanced our scientific understanding of social interaction, but the science has been consistently applied to the normatively chosen question: How can individuals live in social order while preserving their own liberties? Scholars associated with the program have consistently eschewed the question: How can the state exert more effective control over individuals? Those scholars who associate themselves with the interests of “the state” have never found, and will not find, Virginia Political Economy congenial.

DBx: Only the most childishly uninformed or ideologically blinkered of people interpret the asking of the normative question “How can individuals live in social order while preserving their own liberties?” to be evidence of some heinous wish or plot to sacrifice the well-being of the many to the greedy appetites of the few.

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