Russ Roberts

Glenn Reynolds on Politics, the Constitution, and Technology

EconTalk Episode with Glenn Reynolds
Hosted by Russ Roberts
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Glenn Reynolds of the University of Tennessee and blogger at Instapundit talks with EconTalk host Russ Roberts about the political malaise in America, whether it could lead to a Constitutional Convention, and what might emerge were such an event to occur. Reynolds also gives his thoughts on the suggestion advanced in a recent episode of EconTalk that we should ignore the Constitution. The conversation concludes with Reynolds's views on the decentralizing power of technology and Reynolds's music career.

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0:33Intro. [Recording date: February 13, 2013.] Russ: I expect we'll talk about a variety of subjects today, but I want to start with a recent piece you wrote for USA Today, "A Revolution in the Works?" There's a question mark at the end of that title. You're suggesting the possibility of fundamental political change in the United States. What kind of change are you imagining, and what evidence do you see for that change? Guest: Well, you know, in the words of Han Solo: I don't know. I can imagine an awful lot. What triggered the column is a poll from the Pew [Pew Research Center] people which showed that more than half of Americans view the government as a threat to their freedom. And what's especially interesting about the Pew poll is it's not just--you'd think obviously Republicans and gun owners are going to be unhappy with the Democratic Administration's proposing gun control--but actually 38% of Democrats, which is rather a lot, and 45% of non-gun-owners shared this view of the government as a threat. So, it's a pretty large number. And then you've got a Rasmussen poll from last fall that said that only 22% of likely voters think that America's government has the consent of the governed. Well, that's pretty drastic. And then, I didn't really mention this in the column, but the other thing that's troubling is that we've seen a number of polls that the only really respected institution in our society is the military. And, call me crazy, but in a democracy where people see the government as a threat to their freedoms and don't think it has the consent of the governed, but do respect the military a lot, that seems to me to be sort of an unstable and unfortunate combination. Russ: I agree. Although you suggest--you provide evidence that there's some broad-based anxiety about threatening the government. I wonder how deep that is. Guest: Well, it's hard to say. One response that I've seen some people make to the Pew poll is, really, you don't trust the government and you don't respect these politicians, but you keep electing these people; what's the hell is wrong with you? And that's a fair critique, right? If a majority of Americans think the government is a threat to their freedom, how come they re-elected the vast majority of incumbents? Russ: Which they regularly do. Guest: But, you know, the response to that I think is to say: They are not actually presented a choice of voting for somebody who would fundamentally change the system in that way. There's nobody who says--outside of a small number of Tea Party candidates, who sometimes win--but there's sort of no mainstream Democrat or Republican who says: I'm going to shrink the government down to 1910 levels and then you won't have to be scared of it any more. So, the point is basically a case of choosing your poison. It's not as if voting Democrat or Republican makes that big a difference. Russ: Do you really think, though, that that trend, that there isn't--don't you think that's a long-standing trend in American history, that they don't trust the government? I think if you ask folks if they trust their own representative in Congress, they say: Congress is a bunch of bums, but not my guy. And they also say the same thing about [?] corporations: My boss is decent; most of them, awful. Isn't that a common long-standing view of most Americans? Guest: To some degree, sure. Our country is literally founded on distrust of government. But Pew does say that the numbers are the worst they've been since they've been asking the question. So, the trend is not our friend. Trust in the Federal Government is at a historic low. And they say it's the first time a majority of the public has said the Federal Government threatens their personal rights and freedoms. So I do think there is more than what I would regard as a healthy distrust of government. I think that it goes a bit beyond that. And I think one of the changes--in the column I quoted a science fiction writer named Jerry Pournelle, pretty old, he's been around a while; and he wrote in 2008, he said:
We have always known that eternal vigilance is the price of freedom. It's worse now, because capture of government is so much more important than it once was. There was a time when there was enough freedom that it hardly mattered which brand of crooks ran government. That has not been true for a long time—not during most of your lifetimes, and for much of mine—and it will probably never be true again.
And I think that is the reason why distrust in the government is so profound. Now people realize that if the wrong people are in power, they can really screw with you. The government's got a lot of power; it's got a lot of reach; it does a lot of things. And it's no longer a case of the old Chinese proverb: Heaven is high and the emperor is far away. The government is in your face. And, the more powerful the government becomes, the more valuable and prized it is, so the more dirty and underhanded things people are willing to do in order to seize the prize. And the more afraid they become when somebody else has control. So, all of that I think contributes to a rational increase in fear of government that is independent of just a general sense that it's a bunch of politicians who would sell out their own grandmother. Russ: Well, government is certainly more powerful than it was 50 years ago. But do you think, in particular, it's things like the drone activity, or the Troubled Asset Relief (TARP) bailouts--just to pick two that I find particularly unpleasant that are causing people to be worried about threats to their personal freedom? Guest: Well, I think there's a lot of that. Sure. You had the growth of a surveillance state, which at one level was inevitable, and at another level you can say really existed in the 1990s, as it did. But people are much more aware of it, and it's become much more intrusive. And the other side of it is, when you look at stuff like the TARP bailout, I do think there was a sense at one point that there were things the country just wouldn't stand for, that politicians would be afraid to do. And I think now that we've seen hundreds of billions of dollars essentially handed to political cronies, people realize, you know, there's really not that much that they'd stop at.
7:27Russ: My listeners know, I'm particularly worried about this trend. But I do see some swinging back against that trend. Right? I think giving money to cronies is slightly out of fashion. It's gotten a little harder maybe than it was before. But that's an empirical question, I suppose. Guest: Yeah, I'd like to believe that. Russ: We'll see. It's hard to know. I'd rather not see. But we may, unfortunately. Now, you propose some solutions to this trust problem and this fear of threat. And your first--I have to say it because it's in the piece--I'll try to say it with a straight face: We just need to elect people who are trustworthy. And a lot of people feel that way, I think. Guest: Right. That would work out great. The problem with that is that there aren't any politicians that everyone trusts. And, as I say in the piece, if we did have somebody that everyone trusts, the odds would be good that that trust would just be misplaced. And that would mean that we've found somebody who is really good at fooling us. Russ: My professor the late George Stigler used to call it the Ralph Nader theory of regulation: you just need the right people involved. So, all the agencies that have been captured and serve the special interests rather than the general public are just run by bad people; we just need to get the good people in. Of course, good people become bad people when they are facing the same incentives as everybody before them. Guest: My position is more like Milton Friedman's, unsurprisingly, who said what we really want is a system that has incentives such that even the bad people will behave well. Russ: Yeah. That's a beautiful quote. I love that. So, that's the challenge. So, your second solution is to reduce the power of government. Guest: Yes. Russ: And is that going to work? Guest: Oh, I think that absolutely would work. I just think that it's hard to do because--well, you've probably seen the movie Blazing Saddles. Russ: Yes, I have. Guest: And there is a scene in it--which I regard as one of the most powerful metaphors for our political situation every produced--and it's the one where Mel Brooks, playing Governor Le Petomane, has all his cronies around a big conference table and he says: Gentlemen, we've got to protect our phony-baloney jobs. And the problem with making the government smaller is it threatens a lot of people's phony-baloney jobs. I think it's a mistake that a lot of economists make--not just economists but a lot of other critics of government--to think that the only question is just sort of money. I think the other issue that people guard almost as vigorously, and maybe more vigorously, is the non-monetary economy of self-importance. Russ: Oh, yeah. Guest: Which I think for politicians is really what drives them more than anything else. I think the sense of being a big man. There's actually a great story called Clockers, which is about drug dealers. And it explains that the most important reward of being a low-level drug dealer isn't really the money--because actually you don't make that much money for all the risks you take. But it's that when you walk into a room full of druggies, everybody's face lights up because they are happy to see you and you are an important person and respected in their lives. And that's why you'll do it, even though you may not make any more money than at McDonald's. I think for politicians, they are basically just like drug dealers only more so. Some of them don't even--I was shocked when Bob Menendez had to cough up the money for those private jet trips. It was a big chunk of his net worth. He's not that rich. He's getting his rewards in non-monetary form. There's a lot of ego boost to it. And I think that a big, powerful government makes politicians, and not only politicians, and not only bureaucrats, but also journalists and the people that cover them, feel more important. Journalists seem to always sort of slant in favor of bigger government. And you sort of wonder why. Because they are often critics of particular things the government does. Russ: Correct. Guest: But they are sort of cheerleaders for big government in general. And I think it's because if you cover the government, the more important the government is, the bigger and more important you are. Russ: Yeah, there's some truth to that. I certainly agree that the political establishment as you describe in your piece are going to fight very hard against making government smaller. But they have the natural ally of those who think government ought to be bigger because they think that makes the world a better place. So, it's a classic bootlegger and Baptist coalition--one group that has the moral high ground--those are the people who think that bigger government helps the children, or the elderly, or stimulates the economy. And then you have the people who like living in that world--the economists and politicians and others who get to play with the levers of power and get people to pay attention to them because they are powerful. And that's a pretty powerful--those two combined, we're not doing such a good job against them. Guest: It's funny--one of my friends, who has been a long-term, upper level bureaucrat in Washington said to me his favorite phenomenon to see is these people coming through these usually politically-appointed jobs and, he says: They think everybody loves them. And then they leave the job and they realize that everybody just loved the job. And that once they are not in the job any more they realize they don't have nearly as many friends as they thought they did. The smarter ones do know this. And that's why so many[?] hang onto power. Russ: Someone once told me--I may have told this story before. It always bears retelling. Someone got a job at an influential position at a very large foundation, the ability to hand out large sums of money. Which of course politicians share that opportunity. And when he was thinking of taking the job, his friend told him: Congratulations; you'll never have to pay for dinner again; and you'll never get an honest compliment. And that's what politicians, I think--that's the world they live in. They do pay for dinner now and then. But they are loved because of their ability to command resources. And it's, for some people, very pleasant. Guest: I think it's actually for a lot of people it is addictive. And I actually mean that in the most literal sense. I think that people are addicted to the dopamine rush they get from feeling really important. It's interesting--they were talking about why Frank Lautenberg might run for another term, at least in 1989, having trouble deciding to retire from the Senate. But if you look at these guys, they last in those jobs for a long time, but usually they retire and they go down pretty fast. Once they don't have all that emotional gratification. So, I think people really like it.
14:20Russ: No doubt. So, given those two realities, that it's hard to imagine electing trustworthy people, and it's challenging to get government smaller, what's going to stop this trend toward bigger, more powerful government? How are we going to reverse it if the people in power are going to fight it, and there's a lot of people who support the growth of government? Guest: Well, the big ally of this is Stein's Law. Herbert Stein said--and I really think this is the quote for the current decade: Something that can't go on forever won't. The current trend can't go on forever. The Federal Government is fundamentally broke, although in denial, and able to make[?] it out for a while. The path of increasing the path and power of government is fundamentally unsustainable. And it's always funny to me that the people who go on the most about sustainability in other areas seem the least concerned about sustainability when it comes to things like government and spending. But that means that something that can't go on forever, won't, won't go on forever. The question is sort of what comes next. And there are a lot of different possibilities, ranging anywhere from civil war and a military coup--which I think is not especially likely but it's probably more likely than it's been in my lifetime, given those poll numbers we started out talking about. I think those are warning signs we should[?] be scared of that. To sort of a hard economic collapse and a Federal Government that goes broke--certainly has not been unthinkable in lots of other countries when the government goes broke, which is actually to shrink and cut back and do less. To a softer landing, and possibly to a situation in which the people, who are right now unhappy, distrustful, think the government doesn't have the consent of the governed, but not least because of the efforts of the political class--not having those feelings crystalizes any particular plan of action, suddenly crystalize. And at that point I think you might see something like a Constitutional Convention. And I know Randy Barnett favors that. A lot of people favor that. I am not as strongly in favor of that as they are. But I am not as scared of it as some people are, either. I think ultimately anything you do has to pass 3/4 of the state legislatures. And although, you know, some dumb Constitutional Amendments have managed to clear that hurdle, it's pretty hard. Russ: How would a Constitutional Convention--for those of us who don't remember the first one; I don't mean to suggest that you do, but you know a little bit more about it. What would be the logistics of a Constitutional Convention? We've had one. What would a second one--what are the rules of the game? Guest: That's actually an interesting question. The way it would work is that Congress calls it, which it can do on its own but which it most likely would only do when forced to by getting calls from 3/4 of the state legislatures. Once you do that, delegates are elected from each state, and they go to the Constitutional Convention, where they produce whatever amendments they want. Which could be minor changes or which could be an entire new Constitution. Followed by sending those out for ratification to the states. And they bypass Congress, on the Convention route. The Convention route was put into the Constitution because the framers figured that Congress would be unlikely to approve Constitutional Amendments that reduced its power. And it never has. Russ: They were onto something, weren't they? Guest: Yeah, they were. So, they wanted a bypass route, and the Convention method is that. Now what's kept the Convention from happening in the past is whenever it looks like a Convention is going to be called, Congress generally gives ground and proposes an amendment that satisfies the main complaint. And that's pretty good. As I say, the value of the Sword of Damocles is that it hangs. Not that it falls. And the threat of a Convention is often enough to spur something less. But if you really believe that the whole system is broken, then maybe what you want to do is start over. Russ: So, how would that actually--you've got 100, whatever it is--is it 50 states only get delegates? Guest: Yeah, the states get delegates. Russ: District of Columbia doesn't? Guest: I don't know about that. Russ: Okay. But there's 100 or so people hanging around. Guest: The state delegations would be elected, and once it is completed it goes back and gets ratified in the states, which actually could be by state legislatures or could be by specially-elected conventions in the states. Russ: But there are no rules for how that Convention is going to be run. So there could be a group of people who say we have to start from scratch. Could be a group of people who say there's just one amendment that's crucial. And there could be another group that say we need 50 or 60 amendments, we're in such bad shape. Guest: Right. And that's exactly how the First Constitutional Convention went. There was not a lot of thought--at least not publicly expressed--to the idea of starting from scratch. They were going to just clean up the Article of Confederation somewhat. As it turned out they did a lot more. Russ: So, let's say we going to unradical route of a Convention that proposes a certain number of amendments. Those would go back to the states; some of them might pass, some of them might not. The Constitution would be amended and that would be the end of it. Right? Guest: Right.
20:03Russ: So, given this mood in the country that you've talked about, what amendments might emerge from something like that that would change the malaise that we have about our political system. It's not obvious to me what those might be. Have you thought about that at all? Guest: That's sort of hard to say, and the reason is, in fact, as I say, there's a lot of malaise, there's a lot of general dissatisfaction, but it hasn't crystalized into a program. And indeed, I think one of the great ongoing efforts by the political class is to make sure that doesn't happen. And to keep people sufficiently divided and distracted that no matter how generally unhappy they are, it doesn't turn into any concrete plan that threatens the political class. Now, I've made some proposals of my own. Harvard Law School had a conference on Constitutional Conventions last fall, and it was very interesting. Larry Lessig put it together with the Tea Party group, the Tea Party Patriots, and Move On. It was a very interesting cross section. It's surprising how well people got along. But a couple of proposals I've had are, Number One, you might call it the no representation without taxation proposal; it would essentially be a uniformity requirement that everybody has to pay taxes. Such that you don't have a substantial class of people who get benefits but don't kick in. And if I were starting from scratch I would require that everybody pay a significant enough percentage of their income that it hurt. No matter what the income level is. And that that go up and down every year as Federal spending goes up and down. And I think that would provide an amazing amount of discipline. All you have to do is look at how much resistance there is to even minor increases in things like local property or sales taxes, that voters feel very directly, compared with the way deficit spending let the Federal Government sort of spend and not have to face the political backlash. Russ: Along those lines, one of my favorite policy changes would be to get rid of the fake wall between payroll taxes and income taxes. Because I think a lot of people don't perceive their payroll taxes--half of them are paid by their employer, at least on paper, probably coming out of their own paycheck, but most of us don't see that directly so we don't notice it. And then so many people then don't pay any income tax right now. I just saw the statistic recently that a family of four, husband, wife, and 2 children, who earn $51,000--and this may now be a different number--exempts you from income tax. Now it's true you still pay payroll tax if you are employed. But that doesn't seem like it's good for democracy to me. Guest: No, I agree. And I think that's one of the important things that really ought to be controlled. Again, my goal is to create things that regulate based on political pressure, sort of following the Milton Friedman approach rather than the Nader approach, and I think that's a good one. Something I'm a little more agnostic about, because I suspect people could get around it, are things like a balanced budget amendment. We had a whole bunch of balanced budget amendment proposals, but if you actually read most of them, they tend not to have a lot of teeth. They've usually got a lot of loopholes, exceptions: if there's a military conflict, which there usually is-- Russ: always is-- Guest: [?] a majority that isn't really big to waive them. Or whatever. So, they're not very good. I'm not against it, but I don't think it helps. I'm also pretty much agnostic on term limits. I used to be opposed to them. And as I see how effective gerrymandering is, which I think is one of the reasons people hate Congress but love their Congressmen, or at least tolerate their Congressmen, because of gerrymandering, I think that's something that is difficult to deal with and probably wouldn't be helped that much by term limits. If you've got a gerrymandered district, especially with modern gerrymandering technology, the new guy who gets elected in it is likely to look an awful lot like the old guy because the district is so one-dimensional. Russ: I think part of the problem you pointed to earlier, which is that you ask why we keep electing people that we don't seem to respect. One answer is we respect ours but not the others. But even for those of us who don't like ours, which would be me, it's sort of the nature of the system. Once you have a system that says this group has the ability to pass laws that affect lots of people and you can't opt out of them--can't opt out of Social Security, got to pay property taxes even though you don't send your kid to the public school, etc., etc.--by definition almost, not definition, the incentives are such that the median voter model, the Hotelling model, the models that look at political choice--if you only have two candidates they are going to push toward the middle. And anyone else is going to be pretty unhappy when it's over. Guest: You don't really have two candidates. Because in the gerrymandered district-- Russ: Well, that's true. Guest: For example, in my district we have a guy--and I like him okay because he's a Republican but he's about as Libertarian as Republicans who are likely to get elected--he's okay. I don't hate him. But my wife managed a Libertarian campaign against him, back in 1996, and the Libertarian candidate I think ended up getting more votes than the Democrat who ran against him, who was just a local activist with no money. And that's sort of typical to how it is. There's always--my Congressman, Jimmy Duncan, who has the same seat his father had and I think his grandfather had, basically runs effectively unopposed every time. And so when people say, You shouldn't keep re-electing these people--what's the alternative, really? And there are a lot of districts like that. Probably half the Congressional districts in the country are that way. One way or another. I mean, maybe they've got Sheila Jackson Lee in them instead of Jimmy Duncan, but still they're not really open. I think I would be very happy to entertain a Constitutional Amendment that would limit gerrymandering, but short of making Members of Congress at-large, I don't really know how you do that. It's a curious thing that now we see more turnover in the Senate, which the Framers thought was going to be sort of the long-serving, aristocratic house than we do in the House of Representatives. Because of gerrymandering people can stay there for a long, long time, and unless the state changes its complexion enough that you get redistricting, there just isn't much of a threat. Russ: I raise it because, when you think of a Constitutional Convention, one of the things you think about is changes in the actual structure of governance, right? We could move to a parliamentary system. I don't think Americans have much taste for that, but you could imagine at least things like the Electoral College being eliminated. Other things--maybe Congress wouldn't have the same term length; maybe there would be term limits or not. But maybe you could change the length of the terms. You could change the Senate and the House. Do you think anything like that could possibly happen? Guest: Yeah. I do. And in fact I have a proposal along those lines of my own. It wasn't original with me. But it is to create a third house of Congress, which I call a House of Repeal, in which people run for election in which their only power is to repeal laws. And if that one house repeals a law, that law is repealed. And when you go before the voters every two or four years or whatever term you choose for it, the only thing you've got to run on is which laws you struck down. Because right now, one reason why we've got growth of big government is there is literally nobody in the government with an institutional incentive to shrink government. Courts can strike down laws as unconstitutional, and they do sometimes, but it doesn't do anything for them institutionally to do so. The other two branches are all about making government bigger. And everybody runs for election and tells voters what they are going to do for them; it would be nice if we could have somebody run for election and tell voters what they are going to undo for them.
28:35Russ: That brings me back to my previous point: While there is, I think, a lot of distrust of government, your view I think and mine are very much in the minority. I think most people are happy the government is bigger. They may not like this piece or that piece--they don't like the drones or they don't like the bailouts or they don't like the Transportation Safety Authority (TSA) making me take off my shoes. But if you ask them: Do you want to keep Social Security? Do you want to keep Medicare? Do you want to keep a strong military presence generally? There's a big, giant consensus for those large projects of government. So isn't our real challenge to get more people to join our views? Guest: Well, I think it cuts both ways. I think actually one of the reasons people that is that's all we talk about. Again, everything you hear from a politician is what new law they are going to pass, what new program they are going to start to make things better. If you heard other politicians talk about getting rid of things to make things better, and if people were running campaign commercials about that, I think attitudes might very well shift to follow that as well. Russ: It's a cheerful thought. I like that. I wish it were true. Could be. Guest: I'd like to find out. Russ: Yeah, I would, too. Right now it doesn't happen very often, so it suggests it is not a good position to sell to the voters. I'm interested in a project to try to find ways to make that more appealing. Guest: I think part of it is you want to have your ducks in a row for when the opportunity presents itself. And the Obama Presidency is I think proof of that. Ten, fifteen years ago we seemed to have a neo-liberal consensus that the era of big government was over, and all of that. And the people who didn't think that just basically hung around and waited until we had a combination of an economic crisis and an open presidential seat, and the Republican Party, that had overstayed its time and lost its mojo; and they swept in and they just started doing stuff. And one of the things that is both cheering and troubling to me is that a lot of the stuff they are doing is stuff they never would have been elected to do if they'd sold it in 2008. But now that they're in, people kind of go along. The cheering part of that is I think that works the other way, too. Russ: I can imagine a candidate--I'm not sure what that person's name is, but one could imagine a candidate who could galvanize support for smaller government. Although the ones who claim to be that candidate in our lifetime actually presided over larger government--so-called conservatives like Ronald Reagan-- Guest: Well, nobody's ever presided over smaller government in my lifetime. Russ: No, they haven't.
31:16Russ: I want to shift gears. Related, though. We had a recent guest on the program, Louis Michael Seidman, and he suggested the Constitution is out of date. It makes us beholden to a group of dead people who lived over 200 years ago, and we should just ignore it--unless something in it makes sense. Like, if you happen to be a defender of the Second Amendment, which is nice, who wouldn't get rid of that? Or the First Amendment, he likes that one, too. But basically we should keep good laws and get rid of bad ones, keep good practices, get rid of bad ones. You just avoid the Constitutional Convention altogether. You just stop using the Constitution. Guest: I call this the Raj Koothrappali approach to Constitutional law. I don't know if you watch "Big Bang Theory." Russ: I don't. Guest: Raj--is Indian, of course--and he's lecturing his sister from India on Hindu rules about modesty and sexual propriety. And she just looks at him and says: You are talking to me about this as you are eating a cheeseburger. And he just looks at her and says: Some of it makes sense; some of it is crazy; what do you do? And that's basically the Seidman approach to the Constitution, right? The parts he likes makes sense and the others are crazy; what do you do? Here's the problem with public officials--because that's really his audience--deciding to ignore the Constitution. If you are the President, if you are a member of Congress, if you are a TSA agent, the only reason why somebody should listen to what you say instead of horse-whipping you out of town for your impertinence is because you exercise power via the Constitution. If the Constitution doesn't count, you don't have any legitimate power. You are a thief, a brigand, an officiant busybody, somebody who should be tarred and feathered and run out of town on a rail for trying to exercise power you don't possess. So, if you are going to--if we are going to start ignoring the Constitution, I'm fine with that; the first part I'm going to start ignoring is I have to do whatever they say. Russ: But his argument is that we already ignore the Constitution. It's not really much of a binding document. Guest: Oh, well then I'm free to do whatever I want. And actually, that is a damning admission. Because what that really says is: If you believe Seidman's argument, if you believe that we already ignore the Constitution anyway is that in fact the government rules by sheer naked force and nothing else. If that's what you believe, all this talk of revolution suddenly doesn't seem so crazy and seems almost mandatory. Russ: Well, he would say--I won't speak for him, but some would say that there's a social contract; we've all agreed to kind of play by these rules of-- Guest: Oh, really? Russ: electing officials and-- Guest: Wait. The rules I agreed to electing these officials are the Constitution. I thought we were going to ignore that. That's my social contract. Russ: And so, would you propose to--what's your answer to his point that we don't pay attention to it and we just indulge our prejudices anyway. At the Supreme Court level. His argument is that the Supreme Court really doesn't use the Constitution. If they think it's a good law they just find something, they find a penumbra if they have to, a subtlety if it wasn't obvious; and if they don't like it they find a reason to strike it down. Guest: Well, that's just one [?] legal realism. There's a certain amount of truth to it. I wrote a piece back 20 years ago in the Columbia Law Review called "Chaos and the Court," in which I used chaos theory to argue that something made up of 9 individuals with different views could never use coherent and consistent rules over any period of time. Which I think is true. That's not the same as saying we should deliberately ignore the Constitution and just do what we want. Call me crazy, but I'm pretty sure that whenever somebody writes a piece in the New York Times saying we should ignore the Constitution and do what we want, it's, again, they want more government and more power. And I'm not inclined to play along. Again, the only reason why I have to listen to anything any of these people say is twofold. One is if they've got a gun and the other is that the Constitution says I should listen. Only one of those isn't vitiated if I don't just get a bigger gun. Russ: Yeah, it's true.
35:25Russ: Let me ask you, for those of us who think that the Constitution has been ignored--in one direction, which is the direction of it's supposed to restrain government. It's not been very effective at it. I've argued, when I had Professor Seidman on the program, that we need to go in the other direction. It's true, I agree; we do ignore it most of the time; we should honor it. What are the prospects for that? One view says--not one view, my view; your view probably--is that we want a smaller government. Why don't we just honor the Constitution? And I think the answer is, since most people don't want it, they've ignored it. Guest: Yeah. I think one argument is that we are already living in Seidman's world. But actually I'm a little more hopeful than that. One reason is, if you look at some areas, you see real progress. We're currently in a national debate about gun control, for example, but the fact that we're in this national debate and the fact that not much is happening is evidence that we've gone a long way since 1994 when they passed the Assault Weapons Ban. Now that's, they say, pretty much off the table. And part of that is that people have actually decided that the Second Amendment does actually restrain the government, at least somewhat. And the Supreme Court, which I think nobody thought 20 years ago would rule that, has gone along. The Second Amendment decisions from the Supreme Court I think follow the culture more than lead it. Which is not that unusual for the Court. But I think, for people who say--and this is something I actually hate--is this sort of gloomy strand of libertarians and conservatives, which is: we're always going down, things are always getting worse, it's a one-way ratchet away from liberty. It's much more fluid than that. And I think things can improve rather than just go downhill. There are certainly powerful institutional forces in favor of the government grabbing more power and doing more. But there are also powerful forces the other way. And I think that you have to fight the fight. You can't just give it up. Russ: I like being optimistic, too. I think one sign that's encouraging is the number of people who are alarmed about the size of government. And I compare it to my youth, say, the 1960s and 1970s, when I felt much more lonely and I was surrounded by much stranger people who agreed with me; and now I feel a much larger and more normal group of people shares my views. And yet, government just keeps getting bigger. So, maybe it's not enough. Guest: Culture comes before politics. And politics come before law. So, I think that the culture has to change first. I think to some degree it has. I think libertarianism doesn't look nearly as weird as it used to. I think you see shifts on a number of attitudes. And if you actually look at the popular discussion--I mean, there's a fairly dumb article in Salon that says we can have gun prohibition because, look, we have gay marriage. But if you look at the things that have changed in American society, generally in terms of social movements, the ones that succeed are in favor of more individual liberty, not less. Russ: Well, that's true. Guest: The gay marriage movement basically has worked not because Americans have any huge excitement about gay marriage per se--because a majority of heterosexuals don't really care much--but they have a general bias in favor of letting people do what they want. Russ: That's true. Guest: I think that's driven the failure of the gun control movement, too. So I think there's a lot to be said for that, and I think that's a hopeful sign. I don't think that that's a reason to relax and be certain that nothing bad can happen in this best of all possible worlds. But at the same time I do think that there's a strong tendency for libertarians to get kind of gloomy and to think that nothing can happen. And if you actually look at the daily lives of average people in the United States over the last several decades, in many ways they've gotten much freer. Russ: I totally agree. The only difference is that small area called your pocketbook. But other than that--which I don't want to understate how important that other aspect of our lives are, the other kind of freedoms. But I think the economic freedom part is the thing most at risk. And it does underpin civilization to a certain extent. So I'm a little worried about it. Guest: You're right. But that's one of the things--I think Milton Friedman once said the reason you won't get to a fully libertarian society was that if you got halfway there everybody would be so rich and happy they'd quit trying. The optimistic view is to say that's kind of what happened. Russ: Yeah, there's something to that. Guest: We lightened up in the 1980s with a lot of deregulation and such, and people got a lot richer and happier. And so they kind of got complacent and quit trying. And it may be that one of the things that we need is to go through this Obama economic stagnation and malaise, for people to realize that this stuff actually makes a difference. That you can't just take it for granted that a big wave of prosperity and freedom is going to always be cresting under you without any effort on your part. And I think the key to having that happen is actually for us to make sure that people realize: why they are stagnating, why something that can't go on forever won't, and what won't go on forever, and why it can't. And I think that's a message to get out. That's actually been my long-term strategy with this series of columns in USA Today, to try to get this kind of stuff out to people who are outside the usual libertarian fold. Russ: I have to--I like your argument about complacency, although I do think some of the deregulation of the 1980s is greatly overstated. In the late 1970s. It's nice to get rid of some of the regulations of transportation and air travel and trucking and those things. They were replaced by different regulations that limited freedom elsewhere. But there have been some moments of actual freedom.
41:45Guest: Well, the biggest breakthrough was the Internet, which simply grew faster than the regulators could keep up. Unfortunately, that's coming to an end. The Internet is still the most free place in terms of activity in the economy. And it will probably stay that way for a while. But the regulators, the special interests and all the others are definitely trying to carve things up and get a bigger piece of the pie and more control, and you can't rely on that forever. I think the Internet made a lot of people over the last 20 years complacent as well. Russ: Well, talk about what you are worried about coming there, because it seems to me there is a tremendous cultural force to "leaving the Internet alone." I understand that what we observe in our day-to-day lives isn't actually what the regulatory environment is actually about. But for example, the attempts to tax the Internet haven't been very successful. What regulations are you worried about for the Internet? Guest: There is already some pretty draconian regulation of the Internet, stemming from the Digital Millennium Copyright Act and things like that. Intellectual property stuff. Now, it tends to be somewhat under-enforced, which I think is great. But it does give them an opportunity to go after people when somebody is targeted. I think we are going to see more of that. We've had the SOPA, Stop Online Piracy Act, last year which failed, and apparently was a sufficiently painful experience for members of Congress that they are a bit gun-shy now. But that won't last forever. The way these things work is they keep trying until they get what they want, typically. Or until they are beaten down so bad that they don't try for a while. Russ: Well, yeah. It's the Willy Sutton theory of regulation, right? Willy Sutton when asked why you rob banks: That's where the money is. It's hard for politicians to ignore the Internet. It's where the action is, the money, the activity. So, it is a constant temptation. Guest: I think that's right. I think the optimistic look at the SOPA battle was they came at it the same old way and we beat them in the same old way. But the pessimistic look is to say: And they'll be back again. It's a constant back and forth on that front. Russ: Vigilance, vigilance.
44:11Russ: Let's turn to your book, An Army of Davids, which came out 7 years ago, where you noted the phenomenon of the decentralization of power away from traditional centralized nodes of power. Media being an obvious example, and your success with Instapundit, which has been extraordinary; it's an incredible blog. What did you say in your book about decentralization at the time? What do you think has happened in the meanwhile that's either reinforced or changed your mind? Guest: The basic thesis of the book was that technology was changing a lot of things. We went through sort of the industrial era with its emphasis on economies of scope and scale, where to do a lot of things worthwhile in an efficient way, you had to be big. When a steam engine had to be big enough to power a factory, pretty much all you were going to do with steam engines was power factories. And a lot of stuff worked that way, and we got to the point where bigger was better. I was watching, not that long ago, an old movie from the 1930s. It was H. G. Wells's Things to Come. And when you see the future--I think it was supposed to be the 22nd century or something like that--what are they but a bunch of huge locomotive-sized machines chewing up mountains. Because to somebody in 1930, that was the future. Big, big things. Russ: That would be a big deal. Guest: It reminds me of--I quote this in the book: When the tide started to change was the joke from the old Soviet Union: Introducing the Soviet microchip, the world's largest! The Soviets were always bragging about having the world's biggest this and the world's biggest that. The biggest airplane. They were an industrial age economy taken to the point of absurdity. Well, now, that's not the way things go. Just for example with this podcast, and things like that, with a laptop computer and an iPhone, you've got capabilities that TV networks didn't have a couple of decades ago. And as a result you see all kinds of journalism and opinion and other stuff being done that never would have made it in the old days. You see that in all kinds of micro-manufacturing and sales. I know people--they all seem to be women--who make money selling handcrafts on Etsy and all seem to make a living that way. And people who sell stuff on e-Bay individually. If you are an e-Bay power seller you can get health insurance. So there are all kinds of ways you can make a living now and do stuff as an individual or small group that used to require a big organization. So that's the basic theme of Army of Davids. I walk through that in a variety of areas--media, music, manufacturing, all that stuff. How do I feel--I think that holds true to a great degree. And one thing I'd say that's sort of a cheerful sign is you don't even need a free country for that to work. For people in China, one of the interesting things that's happened is, the army used to drive all over people's property and not worry about it. And then everybody got cell phones, and they started complaining. And weirdly, even in what's fundamentally a military dictatorship, when a lot of people complain they start to notice. And they changed their ways. Russ: Yeah, that's an amazing thing. How would you sum up the impact of technology--we are talking about this podcast, or other media changes? Certainly the blogosphere has given a lot of entertainment to a lot of people. What do you think its impact has been on media, actually? How important is it? Guest: Well, if you look at the fact that traditional media organizations are going broke--Newsweek doesn't even have a print edition and barely even exists any more--I think there's real impact. In terms of my own media habits and the people I know, I spend a lot of time on things that are not big-media productions. And my brother teaches history and one of the things he's done several times is he's asked his class of undergraduates to name their favorite band. And what he finds is not only do basically all of them have different favorite bands, most of them haven't even heard of each other's favorite band. It's not like in the 1960s or 1970s where half the class would say Beatles and half the class would say Stones. Or something like that. Now the culture is sufficiently diverse that there is sort of nobody that really markets the whole thing. Russ: I love that. I think that's just a beautiful thing. But a lot of people--I'm not one of them--are alarmed by the death of traditional media, thinks we are listening to too many echo chambers; it's not healthy; it's not good for democracy. Do you agree or disagree? Guest: I think that their complaint is that we have more than one echo chamber, and it's not the one they control. I think that traditional media--you talk about how in the 1960s or 1970s if you were libertarian you felt like a weirdo. Well, that was because libertarianism didn't really get any attention in the traditional media. Russ: Well, I didn't say I felt like a weirdo. I felt lonely. People around me were mostly weirdos. Guest: That's right. Russ: It could have included me. I'm not ruling that out. I just want to get the facts straight. Guest: Well, I really think that that argument is fairly weak--the argument that we are all in a bunch of echo chambers talking to each other. That's originally Cass Sunstein's original argument, Republic.com, and even in the second edition of that he kind of backed away from it. But the other side of it is, I think that if people really believe that, if, for example, I ran the NY Times and I believed that that was so bad, then it would I think behoove me to make my newspaper a lot more inclusive than the NY Times is. Or most of the other places that you hear about this. Russ: Well, they have struggled to stay competitive for a variety of reasons, one of which is their unwillingness or inability to respond to the change. A lot of cultural reasons for that, blindness, myopia is part of it. It's been interesting to watch. What do you think is coming to the blogosphere? More of the same or anything different? Any trends you see that are worth noting? Guest: It seems to me that the blogosphere is in a fairly stable state right now. You still have--which I think is interesting--people who appear and sort of become stars pretty rapidly. So I think it's still open to new entrants. I don't think it's locked in. But the sort of style and format of blogging have now been stable for a number of years. Twitter was going to be the next big thing, and my sense is it's never quite been the next big thing. Journalists love Twitter because Twitter is great when you are standing in line waiting to get into a Congressional hearing and you've got your smartphone out: you can click through it and snipe at each other and that sort of thing. On the other hand, I find it sort of unsatisfying; and the bad thing about Twitter is it's emotionally agitating if you pay a lot of attention to it. I find it harder to-- Russ: Why is that, do you think? I've heard that claim. I feel a little bit of it myself in my tweet activity. Why is that? Guest: I think a lot is the format. You get exposed to a lot of different stuff. The 140 character limit I think encourages people to be more provocative. There's something about Twitter that encourages just back and forth [?], and I think that's a lot of it. But I don't know; I just don't like it. Facebook as a social media forum is more social and less media. I think Twitter on the other hand doesn't have much of a social aspect, really. And I think that it just seems to be harsher. Like people driving by and yelling out the window at each other. Russ: Yeah, I feel that sometimes. Obviously we just need to increase the characters to 150. We need a government regulation to increase the minimum and it would be fine. Stability would reign. Maybe it's 160. We could debate--we'll fill it out.
53:09Russ: Let's close talking about your music career. Tell us about it. Guest: Well, it's pretty much on hiatus now. I was involved in music off and on. In college I managed a rock and roll band for quite a while and wrote songs for it, various other stuff. On occasion sang backup or played something. My main musical training was the cello, so that doesn't work that well with rock and roll. I played "Dust in the Wind" once on request. That dates it, doesn't it? Russ: Yes, it does. Guest: But then in the 1990s I got involved again, producing rock and roll, and blues, to start with; and then later got interested in techno. And started producing my own. My brother and I went through this period--it was a very fertile period for both of us--where we would make up the name of a band first. Then we would decide what kind of band would have that name. Then we would write songs and produce and record an album for that band, and release it on the late-lamented MP3.com. And some of them were just complete goofs. Like, we had an eco-folk band called the Meadowlark, whose big song was "How Many Flowers Must Die" about the cruelty of Valentine's Day. Russ: Is that available anywhere? Guest: You know that stuff--I still have the CDs, but MP3.com just died, and all that stuff went off line. I used to have it on iTunes, because I had a distribution deal through Disgraceland Records that had it on iTunes, but then they went away. Right now I don't think you can get that anywhere. Russ: I'd like to say that's a shame. But I'm hopeful. Guest: It actually charted fairly well on Valentine's Day, I think 2000 or something. A couple of the bands were bigger. Like, Mobius Dick, a techno--comes from a math joke: What's non-orientable that lives in the sea (C)? Mobius Dick. So that we decided had to be a techno band. So I started doing that. I really liked that. That was pretty good, and one of those albums actually was the Number One album on MP3.com for several weeks, which I was kind of proud of. Russ: This was on the side. You were doing this with a day job of law professor? Guest: Right. Yeah, I was working that stuff at night after my wife and daughter went to bed. Russ: That's impressive. Guest: We did that for a while though. It was fun. We had an all country band called Nebraska Guitar Militia, and actually I was pretty proud of the lyrics I wrote for that. I think it was pretty good. But what I found that's weird is, I started blogging. Blogging uses the same part of my brain. Like being a law professor, writing Law Review articles, teaching classes does not use the same part of my brain as doing music does. But blogging does. So that it's not a vacation from blogging to do music or a vacation from doing music to blog. So I think it's all just crowded out. Russ: The well needs to fill up. And your creativity needs to recharge. And if you are doing one of those it's harder to have anything left over for the other probably. Guest: I guess that's right. I've sort of compared blogging, at least the way I do it, to DJing, which is that you know you are sort of spinning the tunes and taking the samples from one thing or another and putting them in an order that you think is pleasing and interesting. So maybe it really does use the same part of the brain. Russ: It's very possible. I think it's the creative part, which is not saying anything against your law work. But I think of it sometimes as there's some exuberance of feeling alive when you do something creative and novel. A good blog post or a great song, they have that character if you do them well. And I think it's a similar part of your something somewhere--brain, soul. Guest: Yeah, I really think that's right. Russ: So, what's next for Glenn Reynolds? Guest: I hate to say more of the same. That sounds so uncreative. But honestly, I think my life rocks. So pretty much more of the same. I have just put out on SSRN a piece called "Ham Sandwich Nation: Due Process When Everything is a Crime", which is one of the things--I don't know if you've ever had the experience--but this is something I started trying to write in the mid-1990s. I had the idea clear in my head but it just never seemed to write. Every summer I would say this is my summer project; and then I wound up writing something else instead. And then after the David Gregory and [?] sports thing sort of back to back, I got motivated, sat down, and wrote it pretty much over a weekend, and right now it's number 1 for 'law' on SSRN; it's got 12,000 downloads. I actually want to look further into this question: prosecutors' discretion. So you've got this weird thing where when the police investigate you, you've got a lot of due process protection. And if you go to trial and court you have a lot of due process protection. But when prosecutors are deciding what to charge you with and what plea bargains to offer or accept, they have almost complete discretion. And yet that's where about 95% of the criminal justice system actually operates. Russ: Seems like a good thing to focus on. Guest: It's sort of funny; once you raise it, it's like: Yeah, I wonder why nobody's talked about that before. But I think that's pretty much a big issue. And I think it ties in with the expansion of government. We have all these criminal laws that are essentially regulatory. They are not intuitive. There's no possible way any average person can know them all. And yet, ultimately, if you believe Harvey Silverglate, and I do, you are averaging three felonies a day.

COMMENTS (36 to date)
Josh writes:

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Greg G writes:

This was an interesting and thought provoking podcast, as always, but I think there are a few obvious problems with the arguments advanced here.

-- Your guest starts by concluding, from the answers to a few vaguely worded poll questions, that a Constitutional Convention or military coup are significant possibilities here. Few things are more subject to manipulation or misinterpretation than opinion poll results.

The fact is that about half the country sees their freedom as threatened from the right and about half sees it threatened from the left with a few that swing both ways. That is the thing that accounts for the stability of the system. The idea that the current system is stable because we lack the real choice of candidates who would "shrink government to 1910 levels" is silly. Even if that is a good idea, there is vanishingly little support for it outside of sites like this one.

-- The idea that there was some prior era of much greater freedom due to smaller government would come as a surprise to many women, blacks, disabled, gays, and ethic and religious minorities of all types.

-- The argument is made here that far too few people pay any income tax. The argument is also made that payroll taxes are just a disguised form of income taxes. The second of these arguments undermines the first.

Taft B writes:

Oops, sorry my comment was directed at a different podcast - it should be associated with "Seidman on the Constitution"

[fixed--Econlib Ed.]

Mark Crankshaw writes:

@GregG

The idea that there was some prior era of much greater freedom due to smaller government would come as a surprise to many women, blacks, disabled, gays, and ethic and religious minorities of all types.

There was, in fact, some prior era of much greater freedom due to smaller government, especially in the economic sphere. It was the morals and opinions of American society rather than the imposition of remote government edict that in the past impinged upon the freedoms that the groups you listed. The "bigotry" of the past had substantial public consensus and support across all classes of society. Only when the morals and opinions changed for substantial numbers of Americans did the government allow greater rights or "freedoms" for minorities. Public sentiment drove government action rather than vice-versa.

Your quote above seemingly implies that larger government was the causal agent of cultural change. I contend it was not. Had the morals, opinions and toleration of bigotry remained intact and a consensus, a larger more powerful State would not automatically make the situation better. On the contrary, a large powerful state has great potential for oppression and the brutal enforcement of bigotry.

Likewise, contrary to the implicit argument you have made on behalf of the groups you listed, a return to a smaller, less centralized State does not necessarily imply that those freedoms would be imperiled. If those freedoms have wide cultural support amongst a large segment of Americans, then the State need do little, if anything, to enforce them. The key again is consensus.

The decline in the trust in government, in my judgement, reflects the erosion of consensus of morals, beliefs and opinions among the American public. I think liberals glibly assumed that the destruction they initiated of the consensus that existed, by and large, prior to the sixties would inevitably lead to the coalescence towards a consensus more to their liking. I find that their expectation of a consensus around left-leaning morality to be unlikely to occur. I agree that the prior consensus has been destroyed, however, a new consensus may not form in its place. Instead, I find it more likely Americans will remain deeply divided, perhaps permanently and possibly violently, about the size, purpose and scope of government.

While the bigotry in the past had broad public support, it is unlikely that government action, no matter what it is, will have broad public support. Consensus is dead. Americans no longer have any philosophical or moral "glue" to hold them together. Consequently, most government action, being devoid of any meaningful consensus, will seem to ever increasing numbers of Americans alien, distant and threatening.

Greg G writes:

@ Mark
When you look at American history as a whole, it is the relatively harmonious consensus in the two decades following WWII that is the anomaly. It is worth noting that consensus (and that anomaly) included a willingness to pay taxes at much higher rates than any other time in American history.

During the rest of our history we have always been, to use your phrase, "deeply divided...about the size, purpose and scope of government." I have no problem agreeing that a "substantial public consensus" drives change much more than government does. That cuts both ways though. It also applies to the policies that you perceive as resulting in a loss of economic freedom.

There is always a tendency to romanticize the past. I don't believe that any other era in our history had a better combination of freedom and prosperity than this one. In a sense, the eagerness to engage in this debate is and always has been the "glue" that holds us together as a country.

Jay Stannard writes:

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Jim Feehely writes:

Hi Russ,

I continue to try to imagine a 'small government' world to which you aspire. Whilst I do not favour 'big government', I am in favour of the effective regulation of corporate and business excess.

I have come to the conclusion that 'small government' is a purely economic aspiration. The social imperative is that government, big or small, empowers individual and collectives of citizens, remembering that corporations are not citizens.

As I have noted on your excellent blog before, it is the corrosive influence of corporate interests on corporatised government that is the real enemy of democracy, not the size of government per se. What societies' voluntary organisations require most is resources - communications, research, secretariats etc so that society can wage a fair fight against corporate interests. And that is the palpable support government (big or small) should be providing to society, rather than massive welfare provided to corporations that is never recognised as welfare.

Can I suggest that you devote one of your discussions to what, in practical terms, should be deleted from government to achieve the smaller government you advocate so those of us who have difficulty imagining what is meant by 'smaller government'.

Regards,
Jim Feehely.

l0b0t writes:

Mr. Feehely

Many of us who pine for smaller government would be quite happy if our nation returned to a proper reading of the Constitution, absent all the contortions and shenanigans of the Progressive movement to expand federal power through "emanations and penumbras". Article 1, Section 8 is quite clear and concise as to exactly what the duties and responsibilities of the federal government entail. I would posit that anything that is not specifically enumerated as a duty of the federal government needs to go. The majority of the alphabet soup agencies should be eliminated - DOE, FDA, DoEd, HUD, DoAg, DEA, FBI, ad nauseam. The standing army is blatantly un-Constitutional, despite the fiction of 2 year appropriations, and may be safely eliminated (an air force and a navy with a naval infantry component are wholly sufficient for national defense). This would be a good start.

[comment edited with permission of commenter--Econlib Ed.]

Mark Crankshaw writes:
During the rest of our history we have always been, to use your phrase, "deeply divided...about the size, purpose and scope of government." I have no problem agreeing that a "substantial public consensus" drives change much more than government does. That cuts both ways though. It also applies to the policies that you perceive as resulting in a loss of economic freedom.

Thanks, Greg. I agree that divisions deeply and violently have scarred the American past. The American Civil War was a classic example of a lack of consensus on the substinative issues of the day (slavery, tarriffs, industrial policy) that called into question the very legitimacy of the Federal Government and the Union it ruled. The result: over 600,000 dead, the evisceration of the peaceable union of soveriegn States to be replaced by the more typical (and tawdry) conquer-subjegate pattern of State formation, and a bitter hostility between regions of the country that has not entirely disappeared to this very day.

Those policies that I dislike are disliked by millions of Americans. The only question is how this will play out. Perhaps, like Civil Rights, public opinion may form a new consensus about those policies (obscene bail out of banks and political insiders, malintent central bank fiat currency, corrosive redistrbutive policies, etc. etc.) either for or against. If for, I'll no doubt gladly and without regret leave this country if it becomes a socialist basketcase a la Venezuela. If against, even better.

However, to me this lack of consensus is more likely to result in a scenario closer to that of the Civil War. Bitter, sectarian, and acrimonious divisions that grow only more bitter, sectarian, and acrimonious with each passing year. Those who depend upon the State and those who desire to use State power to enrich themselves pitted against those who must foot the bill and desire to roll back state power and the ability of politcal operatives to exploit the system for personal financial gain or power.

I certainly entertain no romantic vision of the past. However, it is obvious that the State (not just in the US but in the West in general) has become more intrusive, manipulative, and far-reaching than it once was. I agree that as the State has grown, so too has our prosperity. The qiestion that may separate us is: is State growth (and hence intrusion, manipulation, and reach) a necessary prerequisite to prosperity or the respect for minority rights?

Jim Feehely, for example, supports a position contrary to my own when he states:

The social imperative is that government, big or small, empowers individual and collectives of citizens...

If one inserts the word "may" as in "the government, big of small, may empower individuals and collectives of citizens" then I'd agree. However, without the "may", I emphatically disagree.

Those of us who see the government as a potential threat can point to innumerable historical examples in which the government, particularly a large enough one to be far reaching, intrusive, and manipulative, that violently oppresses individuals and collectives of citizens. Such governments have been guilty of theft on a massive scale, mass murder, and even genocide. We can also point to innumerbale illustrations of government power being directed to enrich the few at the expense of the many as well government power being directed to enrich the State and a subsection of the many at the expense of the few (Chavez in Venezuela, Kirchner in Argentina, Obama in the US).

While I agree that there has never been a time of greater prosperity, I'm afriad that I can not see that we have greater freedom. The War on Drugs, the War of Terror, and similar government initiatives have increased the ability and propensity of the State to interfere, monitor, and manipulate American citizens in a way that was unimaginable just decades ago.

Is there a trade-off between prosperity and this loss of freedom? I think not.

Is there a trade-off between prosperity and the modern Western Welfare State? Again, I think not. I think that many (particularly on the Left: see Barrack Obama) have causality reversed: the West has generous social welfare States because they are capilatist and wealthy and can afford the dead-weight loss of the bloated dysfunctional public sector. We are not wealthy because we can afford generous social welfare and the bloated dysfunctional public sector. Their argument is analogous to asserting that rich people are wealthy because they have maids and butlers rather than wealthy people have maids and butlers because they are wealthy.

I argue we can enhance our prosperity and increase our individual freedom by eliminating the excesses of the Warfare/Welfare State through diminishing the size, scope and reach of the government. There is plenty of increasing of freedom to be had (for example: end War on Drugs/Terror, ending our ability and willingness to play world cop, reduce unearned and unnecessary subsidies to individuals/farms/banks/corporations/charities just for starters...)

Steve Sedio writes:

This podcast is my type of echo chamber....

I believe the Democrats and Republicans get together to craft vitriolic talking points, with no middle ground to keep us fighting amonst each other, instead of focusing on the stupid stuff government is doing. Unfortunately, fanning the flames of anger increase the likelihood of violent rebellion.

I see the Democrats far better at showing immediate suffering caused when spending is cut (or even, not increased), than the Republicans & Tea Party are at showing the suffering of future tax payers. Unless that changes, we will sail merrily off the fiscal cliff.

If that is what triggers the rebellion, that also increases the likelihood of violence.

The media perpetuates the problem, and I appreciated Glenn's insights as to why that is. That same love of power, augments what Bruce Bueno de Mesquita has said in his (wonderful) podcasts.

I agree, the solution is to crystalize a platform most Americans can get behind. I think the right platform would have immense power.

I would like to suggest Russ have a podcast with as diverse a group of people possible, to discuss that topic.

James writes:

I have to agree with the comment from Greg G. Blaming our problems on the lack of choice between congressional candidates is blaming a symptom not a cause. It is like complaining that people like pop music or McDonalds.

The fact that two candidates are very similar is only a short-term problem. If people felt strongly about smaller government they would continually vote for whoever leans more toward small government (however slightly) until they were electing libertarians. Remember even in republican-dominated districts there is a choice between different republicans. That doesn't happen because not enough people feel strongly enough about small government.

The "problem" is that 90% of American are actually quite happy with the way things are, despite the hot-air they spew online or to a pollster. We make plenty of money, we've got health care, clean air, big houses, 1000 TV channels, cheap food, great video games, etc. All the political complaining you hear is more for entertainment value than real political will. It will take much more than bank bailouts or mild corruption to spur real action.

Mads Lindstrøm writes:

Greg G wrote:

-- The argument is made here that far too few people pay any income tax. The argument is also made that payroll taxes are just a disguised form of income taxes. The second of these arguments undermines the first.
The point is that payroll taxes is a hidden form of income taxes. That is, people may not perceive payroll taxes as something that hurt their after tax income, even though it is. Thus people may vote for higher spending, thinking that other people will pay for the spending though income tax or employers though payroll taxes. What actually happens, is that they unknowingly pay for the higher spending themselves though payroll taxes.

Therefore it may lead to decreased pressure for government spending if all payroll taxes were converted to income tax, as people would get a truer picture of their tax burden.

Greg G writes:

@ Mark
I expect we have quite different views about the Civil War. I would certainly consider the pre-war country where our government supported slavery to be much more "tawdry" than the post war one that got rid of that particular economic freedom. I'm not suggesting that you think of the option of holding slaves as an economic freedom but the southerners of that time surely did.

As for your hints of possible civil war to come, I think that is unlikely but if you want to fight the Civil War again, you will lose it a second time.

The central problem in figuring out how to minimize violence and coercion does not involve getting everyone to agree on a particular result on particular issues. It involves getting everyone to agree on a process for getting a peaceful decision when people disagree strongly.

Of course government is a potential threat. So is anarchy. There have been many places in history that have had very little central government. None of them developed into prosperous modern economies that respect individual rights. None! The only places where that has happened have been places with a tradition of respecting individual rights and the rule of law AND maintaining a strong enough central government to enforce the rule of law as determined by the majority in a constitutional democracy.

Jim Feehely writes:

I should clarify to other correspondents on this blog that my comments are made as an Australian lawyer, who is a mere observer from afar of US politics and society.

I agree with Greg G to the extent that he points out that the kind of individual freedoms we now enjoy has paralleled to growth of central government. Certainly the kind of freedom that so many equate with meaningless consumerism is one of the features of modern society that necessitates big government.

It seems to me that we get 'big government' because the majority in western society has demanded greater regulation and grander schemes of wealth re-distribution. Government has not grown solely as a consequence of an internal conspiracy of government.

To 10b0t, I refer you to the discussion with Louis Seidman 2 weeks ago and his sensible caution to not reify written constitutions. Constitutional legalism is not the way to a fairer and more just society. Going back to an 18th century (or in Australia's case a 1901) prescription for government is not the way to the future. But adherence to the basic principles of a constitution is often a useful guide to social equity. If the constitution of the USA is the touchstone of freedom, why did it take the USA over 200 years to meaningfully recognise that 'all men (and women) are born equal'? Great Britain and New Zealand achieved that realisation much sooner that the USA without written constitutions.

What we need is more anarchy, properly defined. Anarchy is not chaos. Anarchy simply requires that an institution exercising power over society constantly justify that authority as being good for society. If the institution cannot justify its authority in those terms, it should be dismantled. Therefore, many correspondents here are, in fact, true anarchists. Bravo!

I reiterate that, in my view, the greatest erosion of individual freedom is caused by the powerful influence that corporate lobbying has on government. Corporations are structurally self-interested, non-altruistic and constitutionally amoral. Smaller government, without substantially diminishing the power of corporations (who are not citizens and cannot vote) will leave the leave corporate business as the most powerful institutions in society. And that will be a disaster for social equity. That is why I worry about what is actually meant by 'smaller government'. I will probably be less worried if I understood what 'smaller government' is supposed to look like and what is supposed to achieve.

Regards,
Jim Feehely.

Greg G writes:

@Mads
I think it is true that most people do not perceive the employer's portion of payroll taxes to come out of their own compensation. Good luck convincing voters and politicians to switch to a system that both find more painful.

The biggest part of the "fake wall between payroll and income taxes" that Russ refers to is more often seen as the fact that that money is spent as it comes in rather than existing in some proverbial lock box. Of course, when you and I buy Treasuries, that money is spent as it comes in also and we don't view that as a problem.

Certainly everyone understands that the employee's portion comes at their own expense and reduces their take home pay. That was precisely the intent. It was intended that the employee's contribution would create political support for the program by making the employee feel entitled to the benefit promised.

Like it or not Social Security is one of the most popular government programs ever - present company excepted of course.

Paul Downs writes:

I enjoyed the evisceration of the political class, but I do want to rise to the defense of the New York Times. If you have been reading the printed paper, then yes, it looks like nothing much has changed in the last few years. I am proof that you can't say the same for the online edition. Two years ago I wrote a letter to one of the editors of the business section, and ended up as a regular blogger, relating my experience running a very small business. I am not a journalist, have had no training as a journalist, am not famous, and am not wealthy, and yet my experiences and opinions are now broadcast to the world. You have to give the Times some credit for being willing to expand their vision of who can write for them. Also, many of their stories now include a comments section, open to the public. These are edited, but they act as a forum for debate, and present a wider range of viewpoints than might otherwise be expected.

I normally contribute comments to Econtalk, which I love with all my heart, under another name. This time I'm using my real identity. If you are interested in what citizen journalism can look like, here is a link to my posts.

Mark Crankshaw writes:

@ GregG

I expect we have quite different views about the Civil War.

On that we most definitely can agree! I have a golden rule about wars: all wars are about gold. That is, wars are promulgated with the view of enriching the ruling elites who wage them. During the war, of course, the ruling classes concoct a fictitious “holy crusade” narrative to justify themselves. After the war, sympathetic historians build on that fabrication by engaging in historical revisionism and propaganda in favor of the victors.

The US Civil War is the quintessential example of this. The Civil War, like all wars before and since, was about money and power. The disagreement about slavery was an issue, sure, but largely served as a wedge and pretext for hostility over economic issues. Had the war been about slavery, the Emancipation Proclamation would have been signed in 1861 rather than 1863 (a full 2 years after the war started). In contrast, the Lincoln administration passed an extremely large increase in the tariffs paid by Southerners for European manufactures in the very first month in office. The war started a week later. The Lincoln administration in 1861 was not beholden to extreme abolitionists and during the presidential campaign of 1860 Lincoln tirelessly reiterated the claim that he would not interfere in the “peculiar institution” of slavery in the South proper. Slavery was abolished throughout the Western world without recourse to war, usually through some form of compensation to slave holders.

However, the Lincoln administration was beholden to Northern industrialists (they financed the Lincoln presidential campaign) who favored high tariffs on finished imports. Southerners deeply resented the tariff since the imposition of the high tariff forced them to buy inferior Northern manufactures at higher than going European manufacture prices. Slavery was a significant wedge between North and South, but it takes an economic motive to get to war.

The American Republic was formed without coercive force. This was exceptional perhaps even noble. The Civil War undid all that. The United States post-1865 was held together through conquest and subjugation. You may well argue that “the ends [ending slavery] justified the means”. I would counter that every other country achieved that end without the very bloody means. That goes down as a tragedy in my book.

I have no desire to repeat such a tragedy. Ironically, all of my ancestry was Yankee down to the man. Yet I cannot believe that their cause was just. I believe slavery to be a heinous institution—war, however, is equally so. The fact that the war also resulted in immense and unearned profits to the Northern industrialists who helped instigate it is to me very unjust.

The central problem in figuring out how to minimize violence and coercion does not involve getting everyone to agree on a particular result on particular issues. It involves getting everyone to agree on a process for getting a peaceful decision when people disagree strongly.


Agreed. I am not only a libertarian, I am also a pacifist. I will leave this country but I won’t fight out of principal. In what I wrote, I certainly did not envisage myself as perpetrator of coercion and violence but rather as a victim of leftwing coercion and violence. I can see many examples nearby the US where “getting everyone to agree on a process for getting a peaceful decision when people disagree strongly” isn’t happening. Violence, intimidation and official corruption are how leftwing dictatorships like Cuba, Venezuela, Bolivia, and Argentina (to name just a few) make decisions. Plenty of people within those countries disagree strongly with those decisions, but to no avail. However, I do not see those on the left in the US as “interested in creating a process for getting a peaceful decision when people disagree strongly” either. I believe they would be quite willing, perhaps even eager, to suppress political dissent through corruption and violence just as their ideological brethren in other parts of the world have done again and again. All they need is enough political power.

The only places where that has happened have been places with a tradition of respecting individual rights and the rule of law AND maintaining a strong enough central government to enforce the rule of law as determined by the majority in a constitutional democracy.

The problem I have with this idea is that my ideological enemies do not simply want a “strong enough central government to enforce the rule of law” and no further. On the contrary, they pine for a central government powerful enough to fulfill all their absurd statist fantasies. The problem being that a government as powerful as they want is a government strong enough to dispatch the rule of law, can subvert democratic constitutions at will, and send me and my family to a death camp if I protest. I don’t believe that the left wants the rule of law subverted and me sent to a concentration camp. However, I think they may unwittingly bring a government to power than can and will do so and, if other leftist societies are a guide, they wouldn’t lift a finger to save me as long as they got whatever baubles they wanted from the State.

Greg G writes:

@Mark
You say that, "the American Republic was formed without coercive force." That is an astonishing bit of revision. There was a little thing called the Revolutionary War that was absolutely essential to the founding of the American Republic. A very significant percentage of the colonists were loyal to Britain. They were coerced.

And yes, your "golden rule" does apply here. Most of the key Founders were wealthy men who stood to profit from independence.

You make the point that every other country ended slavery without civil war. Know what else every other country achieved without war if they waited long enough? Independence from Britain.

I am always amazed at how many self described libertarians are more outraged by the idea that some people would fight to end real whips and chains slavery than that they would fight because they thought they were taxed too much.

If you leave this country for a freer land, where will you go?

Shayne Cook writes:

@Jim Feehely:

The premise of your assertions here seem to be borne of several serious logical inconsistencies, especially regards corporations and government. For example, you state ...

"The social imperative is that government, big or small, empowers individual and collectives of citizens, remembering that corporations are not citizens."

Regards your "social imperative", you have it exactly backwards. Constitutionally, in the U.S., citizens empower government, not the reverse. With regards corporations, you are correct - they are not citizens or people. They are indeed inventions, and thereby fictions of the law - precisely the same as governments are inventions and fictions of the law.

In your second comment here (last paragraph), you seem to continue to propagate your logical inconsistency ...

"Corporations are structurally self-interested, non-altruistic and constitutionally amoral. Smaller government, without substantially diminishing the power of corporations (who are not citizens and cannot vote) will leave the leave corporate business as the most powerful institutions in society. And that will be a disaster for social equity."

Inasmuch as corporations (and governments) ARE only fictions of the law, mere inventions, and NOT citizens or people, they are incapable of "self-interest", "altruism" or "morality". I'm amused by folks who argue, "Corporations are not people!", in one breath, and then accuse corporations of being endowed of inherently human characteristics such as "self-interest", "non-altruistic" and "amoral" behavior in the very next breath.

With regards to the "power of corporations" you seem to fear, you may want to consider that whatever "corporate power" exists - to any degree - is derived vastly more as a result of the firm's social benefit contribution than via government lobbying efforts, or any other alleged "anti-social" activity.

I teach college level business management and economics courses. The first question I ask of my students on the first day of class is: "Why are businesses in business?" Invariably, I get the same wrong answer: "To make money!".

ALL firms, whether they are corporations, "for-profit" or "non-profit" tax designated, and irrespective of size, exist to produce wealth. Furthermore, the wealth they produce MUST ALWAYS BE IN BOTH of 2 FORMS:

1.) In the form of Return On Investment - for both the capital stock owners AND labor, and
2.) In the form of produced goods and services that make people's lives better.

And I can assure you that, if there ain't no Form 2 wealth production, there ain't gonna be no Form 1 wealth production either.

Mark Crankshaw writes:

@GregG

And yes, your "golden rule" does apply here. Most of the key Founders were wealthy men who stood to profit from independence.

I most readily concur. Albert Jay Nock, in this book "Our Enemy The State", expounds in great detail the undeniable truths of your statement above. Most of what is "taught" in American schools regarding American history is Disney-esque muck.

I evidently wasn't clear enough earlier; my only point was, relative to how most States have been formed throughout history, the political Union formed by the US States in 1789 had an extraordinary level of popular support, and the US Constitution was an attempt, however imperfect, to accomplish the laudable goal that you proffered earlier:

getting everyone to agree on a process for getting a peaceful decision when people disagree strongly
.

This is a relative comparison rather than an absolute comparison. States are, by nature, coercive institutions, after all. Some are less coercive than others.

Most States throughout history and throughout the world have been formed through war, violence, and conquest where the subjects of the State were presented with a fait-accompli that they could reject only on pain of death. After 1865, the US became, in my view, just another tyrannical government, as sordid as all the rest.

If independence from Britain could have been attained without war, then I would favor that route. With the benefit of hindsight this is a very agreeable option. However, those living at the time did not have that benefit. I therefore can not judge them as if they did.


I am always amazed at how many self described libertarians are more outraged by the idea that some people would fight to end real whips and chains slavery than that they would fight because they thought they were taxed too much.

I'd agree with you if I believed that "some people [faught] to end real whips and chains slavery". I simply don't. Most Northern troops faught to "preserve the Union" and were as racist as their Southern counterparts. They were in accord with Lincoln when he said in 1862:

If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that. What I do about slavery, and the colored race, I do because I believe it helps to save the Union; and what I forbear, I forbear because I do not believe it would help to save the Union

I am equally amazed at how many apparent statists actively support political rape.

When a woman rebuffs a mans' sexual advances, in my moral framework, the woman's right to do so should be respected regardless of her reasons for doing so. The rapist does not rape in the interest of his victim. It is a base act of selfish exploitation. Likewise, if a marriage becomes injurious to one or both parties, then I contend that the marriage contract should be open to being legally dissolved.

Yet statists seem not get the idea that political activity-- activities that deeply affect the person and property of an individual-- should operate under the same moral framework.

I naturally sympathize with any groups (or individuals) that say "No!" to the political ambitions of powerful political groups they feel alienated towards. Whether it's Taiwan, Tibet, the Basque region of Spain-- any and all groups that wants politically out of a regime has my sympathy. Any regime that denies them autonomy and independence has my antipathy. Taken this inclination to its logical conclusion-- at the individual level, I have natural sympathy for the anarchist and visceral antipathy towards the collectivist. A political "sodomizer" doesn't forcibly sodomize "to benefit his victim" any more than a bodily rapist. These conflicts are proof positive that the clumsy metaphorical "seduction" of the regime has entirely failed and they must resort to rape.

If you leave this country for a freer land, where will you go?

I will preface my answer by saying that I have left before. I left the US and moved to the United Kingdom with no intention of ever returning. However, I got a job offer in the US that enticed me back. Had I known what I know now (Obama, Obamacare, the insufferable slide to the left in this country), I certainly wouldn't have come back. I deeply regret having done so, but for family reasons I can not immediately return.

I would think any English speaking country should be kept in mind. My wife (a US/Greek dual citizen) and I own property in the Evritania region of Greece-- a beautiful part of the world, but sadly in a dysfunctional country. Rather than put all my eggs in the US basket-- I'll keep my options open.

The experience of living abroad was a very eye-opening one for me. In England, I had no "political rights" yet I felt no less free there than here. I felt as an outsider there, yet the culture and people were very agreeable and familiar. Upon my return to the US, I maintained a feeling of being an outsider, although US culture is not as agreeable, it is rather vapid and off-putting. I may live in the US, but I'll never again feel "American". That cultural/political affinity within me is simply forever dead.

Jeffrey K writes:

I, like @GregG, found the guest's conclusions regarding the likelihood of a military coup to be troubling. That is the kind of sloppy inference that I've come to depend on Russ to challenge outright during his interviews; I was disappointed that it was allowed pass unexamined.

Greg G writes:

@Mark
Certainly far more Northerners fought to preserve the Union than to end slavery. That is true. But many others did fight to end slavery. They were the abolitionists and they were precisely the Northerners that the South was MOST enraged by. Surely you cannot be unaware of this.

Your analogy between a woman fighting to defend herself against rape and the South fighting to preserve the institution of slavery just might be the most twisted I have ever seen. It is doubly ironic since the "rights" of the slaveholder included the right to rape the slaves.

Mark crankshaw writes:

@GregG

Certainly far more Northerners fought to preserve the Union than to end slavery. That is true. But many others did fight to end slavery. They were the abolitionists and they were precisely the Northerners that the South was MOST enraged by. Surely you cannot be unaware of this.

I disagree. When enemy troops invade intent on murder, rape, and pillage (crimes the Northern troops committed with great frequency), then I wouldn't think it would matter why the enemy troops were there or what their motivation was. Shoot first, psychoanalyze later. The Northern troops looked to the Southern troops (most of whom didn't own slaves, by the way) exactly as the British redcoats did to the Colonists 80 years prior. A murderous foreign invading force needing to be repelled.

Your analogy between a woman fighting to defend herself against rape and the South fighting to preserve the institution of slavery just might be the most twisted I have ever seen. It is doubly ironic since the "rights" of the slaveholder included the right to rape the slaves.

Come on, Greg, this is kindergarten ethics here. I am sure you've heard the phrase: "Two wrongs do not a right make". The institution of slavery was a wrong--a heinous institution. I am not debating that point and I am not defending said institution in anyway whatsoever. But it is equally wrong to murder hundreds of thousands of men and forcibly corral millions of men, women, and children at the end of a bayonet into a political relationship that they emphatically want no part of. If you refuse to see the obvious analogy between this type of political violence and rape, that is certainly your prerogative...

Dan B writes:

I enjoyed this episode and the conversation around "why do politicians keep getting re-elected?".

I'm sympathetic to the argument that in order to have real political change, we need to change the incentives facing politicians, and the best way to do this is through electoral reform.

Organizations like FairVote.org exist to promote reforms like this. Among the policies they recommend, both proportional representation and instant runoff voting seem like they would be improvements over our current system.

Jim Feehely writes:

In response to Shane Cook.

You are right that government derives its authority from the people. And that is precisely why the imperative of government must be to empower the people, not corporations.

In respect of your assertions about the nature of corporations, whilst I readily agree that corporations are legal fictions, it is also the law that endows corporations with almost all of the rights and obligations of an individual. However, only the law imposes ethics and morality on corporate conduct.

I suggest your formulation of the social objective of a corporation is purely theoretical and not borne out by actual evidence. It is objectively the practice of corporations to heavily influence and distort government policy and that influence is obviously more powerful than the power of the electorate. That is just one example of the fictional person that is a corporation acting aggressively in its self-interest. There are many other examples - sucking R&D out of government organisations at a substantial discount, paying for 'research' that accords with the corporation's objectives etc. Therefore, I reject your criticism that corporations do not have a 'personality'. The law and culture very clearly give corporations 'personality', but a personality devoid of inherent morality or natural ethics.

Are you suggesting that society would be better governed by corporate power than a government?

I also reject your proposition that corporations derive their 'power' from the social good they allegedly do. Even your formulation makes clear that corporations are interested in social good only to the extent that allows them to sell their commodities or services to create wealth only for their shareholders. Certainly that proscribes the limit of corporate 'morality'. It does not prove any social benefit.

Regards,
Jim Feehely.

SaveyourSelf writes:

I enjoyed the teaser conversation in this podcast about Constitutional change. I would like to add my one good idea to those already mentioned :

Remove from Article 1, section 8, clause 1 of the US Constitution the words “and general welfare” and replace them with "and specific functions expressly detailed in this Constitution" AND remove entirely Article 1, section 8, clause 3.

Article 1, section 8, clause 1 gives congress the power “To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
Article 1, section 8, clause 3 --called the Interstate Commerce Clause--gives the legislature the power "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;"

Removing these statements from the Constitution will instantly dissolve the majority of the present government, leaving only essential government functions. The argument goes like this: All laws passed by congress are justified by some portion of the US constitution. Those that do not are unconstitutional--by definition. I believe the majority of the present law code use one of these two clauses as their constitutional justification. Certainly Social Security, Medicare, and Obamacare use them and “Social Security and Medicare are the two largest federal programs, accounting for 36 percent of federal expenditures in fiscal year 2011” (http://www.ssa.gov/OACT/TRSUM/index.html).

Any law that uses the general welfare clause or the interstate commerce clause as a constitutional foundation is contrary to the welfare of society. The entire proof is book length. Here is the short-short version:

Assuming any trade is 1) voluntary (Justice prevails for all parties); 2) competitive (there are many people competing for the trade); and 3) well informed (all parties have a large amount of relevant information); then the outcome of that trade is guaranteed win-win. [If it were not win-win, the trade would not occur.] Win-win is an excellent and desirable economic outcome. How could any Government hope to improve an outcome that is already win-win? It is really not possible, because if it were possible, another trade would naturally occur to capture the unrealized gain before the government could hope to discover it.

The only way a third party outside a trade—like the government—could hope to improve on these natural economic outcomes is when the assumptions necessary to guarantee win-win outcomes are absent or false. If, for example, the market environment contains coercion, or there are barriers to entry or exit that reduce competition, or the parties have substantial differences in their relevant knowledge, then bad outcomes [win-lose or lose-lose] become possible. When trades have a potential for making people worse off rather than better off, then trading becomes risky. When trades are risky, a third party like the government can add value by working to rectify the economic assumptions necessary to guarantee the win-win outcome. If successful, the government's efforts reduce risk. The value-added from the risk-reduction can then be used--in whole or in part--to pay the third party actor in a separate trade. This secondary trade is called a "tax", and it is usually in the form of a percentage of the original value of the trade. This is, I believe, the economic justification for both taxes and government. Proper Governments activities add value to trades by reducing common and well known trading risks (misinformation, monopoly, and coercion).

The fact that a "tax" is a "trade" is EXTREMELY important! That fact allows us to questions the assumptions of the trade between citizens and their government. Is that tax-trade made under conditions that are voluntary, informed, and competitive? If any of those assumptions are false, the trade between a citizen and the government might harm one or both parties. This formal economic approach to evaluating the Constitution reveals some brilliant economic insight by the framers’. Their greatest economic insight was allowing the states to retain enormous political independence so they compete with one another and compete with the federal government for tax revenues. Competition is one of the required conditions to ensure good economic outcomes. The framers’ second big economic insight was the formal spelling out of responsibilities for the federal government which task it to maximize economic assumptions between trading states, trading nations, and trading citizens. Unfortunately, that second economic insight is diminished by the negative economic impacts from Article 1, section 8, clause 1 and Article 1, section 8, clause 3. “The General Welfare” means, in practical terms, the welfare of the government and whomever it chooses to favor at the expense of whomever it chooses to tax. “Regulate” means, in practical terms, the army can use violence or threat of violence to favor one trading party’s interests over the other, or even to favor the interests of the government over the interests of both traders. Exercising these Constitutionally granted powers guarantees someone will get hurt. Since prevention of harm is the whole economic foundation for government, the use of either of these clauses undermines the very foundation that the government is built upon. It pits the interests of citizens against each other and against their government. Removing these clauses will go a long way towards ensuring America’s present and future prosperity.

Shayne Cook writes:

@Jim Feehely:

"Are you suggesting that society would be better governed by corporate power than a government?"

Not at all. I am suggesting that society is often better served by corporate power than a government - or at least as well.

Again, both governments and corporations (all business forms) are inventions of "society" - invented to serve "society". And by far, corporate "power" is more easily and readily controlled by "society" , to the end of serving "society", than is governmental power. If I am a corporate shareholder (which I am) I can "fire" defective management of a company I own at any time the stock market is open, simply by selling my shares - and I often do. I can also effectively "fire" a defective corporation by not purchasing its product.

"Even your formulation makes clear that corporations are interested in social good only to the extent that allows them to sell their commodities or services to create wealth only for their shareholders."

You've misstated "my formulation". I suggest you re-read my first comment. No business form can exist for any significant length of time "only creating wealth for its shareholders". In order to be viable at all, every business entity MUST create wealth in both of the two forms I described in my first comment.

I suspect your (and others) assertion that corporations somehow only produce wealth for shareholders is a result of your misunderstanding of the inherent limits of accountancy - and the further fallacy that wealth can only be money.

One of the most interesting aspects - and weaknesses - of economics is that the discipline recognizes the existence and significance of Consumer Surplus. Consumer Surplus is the "wealth" created, but not measured in monetary terms, as a result of voluntary transactions. But while economics recognizes the existence of Consumer Surplus, it has no mechanism for accurately, rigorously measuring Consumer Surplus in monetary terms.

Conversely, accountancy cannot recognize the existence of Consumer Surplus, precisely because it can't be accurately, and rigorously measured in monetary terms. That is the effect of the Objectivity Principle, underlying the rules of accountancy, at work.

Corporations are required by law to report their accountancy, while consumers of goods/services produced by those corporations are NOT similarly required to report whatever wealth they have gained from having purchased those goods/services. But it is a grave fallacy to presume that Consumer Surplus, and the wealth creation it represents, doesn't exist, simply because accountancy reports utterly fail to include a monetary measurement of it.

You are also gravely mistaken about the nature of the law in the United States. The law in the United States does not grant rights. Indeed, the very underpinnings of U.S. law are based on the principle that only individual people have rights - "endowed by their Creator", NOT endowed by government. As a result of that principle, the law here, and especially the laws defining government, establish limits and constraints, not rights. Government here does not empower people, it serves people.

And there is no aspect of U.S. law that "endows" what you call "personality" characteristics to corporations or any other human inventions. Human inventions do not have personalities, or human characteristics. Those are defective assignments of your creation, not of U.S. law.

As an aside, I'm always quite flattered when folks extend me the common courtesy of spelling my name correctly.

Pedro Bossio writes:

Who is more responsible for the political maladies of a country like the USA? The corrupt politicians who take advantage of their position and society's ignorance to enhance their power and wealth? or, is it society, which elects these people and decides not to say or do anything about it? I think the American society has a big part of the blame for not holding their politicians accountable for their actions, and the latter know and take advantage of that.
I find it vexing that American society will polarize on gay and gun rights (and these issues are important, dont get me wrong), but will not discuss holding the government accountable.

Imagine that the system forced candidates to submit their proposals. Periodically, a panel, society, or some kind of social entity, would revise the politician's proposals made prior to election, and would "evaluate" their performance: has this politician actually acted and pursued his/her proposals? If he/she passed, then he/she could continue its political career. If not, thats it, term revoked, the politician is ousted, and may even face criminal charges.

No? Too idealistic? I think it would help avoid so much rambling and actually make incentives to have politicians run on stuff they actually can act on - and their constituencies could hold them accountable for that. Extend that to agencies like the Fed, CIA, Treasury, etc. Who, indeed, would be part of the evaluating entity is in itself a conflict, but at least there woul dbe something that would check politicians' actions. Im open to suggestions/corrections.

The problem, in my opinion, is human nature - no matter who it is, there will always be danger of corruption and abuse of power. I think we just need to come up with methods to make those who are in power responsible. And that responsiblity is society's, no one else's. Ours.

Shayne Cook writes:

@ Jim Feehely (follow-up):

I'd love to continue our chit-chat here, but I'm afraid I'm out of time. Wall Street chose today (Thursday) to put ownership shares of some of the most wealth-producing business organizations in human history on sale at greatly reduced prices. So I'm off to the market to go shopping - for corporations.

But I have taken some of your concerns to heart. I give you my solemn promise that I won't buy any bad corporations.

Seth writes:

"...it is the corrosive influence of corporate interests on corporatised government that is the real enemy of democracy, not the size of government per se." -Jim Feehely

I'm curious, Jim. Do you include in corporate interests any group that might form an organization to lobby government or are you limiting this criticism only to business interests?

If the latter, why? There are many lobbying organizations that are not voting citizens.

And, when I think about smaller government, I do specifically think about one without the influence of special interests. For, if you couldn't peddle government's coercive force, government would be small.

Peter A. Taylor writes:

Two comments, although these have been touched on earlier:

1. I wonder how effective Instant Runoff Voting would be in mitigating gerrymandering. What is the Australian experience? Is there any public choice literature on this?

2. I could argue either way on whether our political problems are mainly due to principal/agent problems (the ruling class) or voter irrationality. TARP looks like a principal/agent problem, but Social Security looks like voter irrationality. I tend to think that voters deserve a much larger share of the blame than Prof. Reynolds gives them.

Wayward Arena writes:

Jim Feehely writes:
“I have come to the conclusion that 'small government' is a purely economic aspiration.”

Maybe and maybe not!

“Governing a great nation is like cooking a small fish - too much handling will spoil it.”
Lao Tzu

“The government is best that governs the least”
Thoreau

Do not worry too much about business until there is some control over the government. In my view much of the trouble with business is link to how the government is operating

Re areas to cut and change watch:

Watch Milton Freidman “ Free to choose”
Watch “Milton Freidman Speaks” (I really like this one)
Watch Milton Freidman on “Uncommon Knowledge”

I also would like it if Econtalks could do a podcast on areas to cut

john thurow writes:

I am not a big fan on constitutional amendments but rather, I would like to see two in particular be repealed. They are the 16th and 17th amendments. Income is private property and should not be confiscated and States need national representation. Repealing these two amendments would go a long way to reducing the size and scope of the Federal Government and turn it back to its federalist roots.

Brian writes:

Just catching up on this podcast and the comments...
The opening discussion on the troubling state of the public's opinion of government was just plain weird. I would suggest looking at some polls or research on topics other than government. I think you will find the same self-contradictory answers from the public. Polls that vague require more digging before any conclusions can be drawn. I have to agree with Greg, each half distrusts the other half, and the fundamental disagreement isn't over big or small government, its over which half to cut.
The idea of 'no representation without taxation' seems to be enforced voluntarily. Half the country doesn't vote. I haven't seen a recent break down of demographics of those who vote versus who don't, but I have a guess that top-tax payers get their say. Kind of crazy to say that you can't vote if you don't earn an income. But that does seem more in-line with our very elitist founders who felt that only property owners should vote.
Russ mentioned drones at the top. That seems like a real concern with the potential for tyranny. But some if these complaints about government I hear often seem to defining tyranny way down. There is no conspiracy driving us into debt. We are choosing it democratically. Programs aren't being forced on us, we are choosing them. Reagan ran on defense spending, Bush ran on tax cuts and more federal control of schools, and Obama ran on health-care reform. The problem is, as mentioned in the podcast, no one ever runs, and wins, and providing less. Ironically, the drone program is overwhelmingly popular! Most of the 'big government' programs draining us popular. Is the problem really a lack of choice in candidates? Or is the problem that we are actually getting what we choose?

Jim Feehely writes:

Hi Seth,

I include within the corrosive elements of organised lobbying only those lobbying on behalf of corporate business interests.

Other organised lobbies that represent collectives of real citizens cannot corrupt democracy. In fact, that is democracy actually working. Corporatised lobbying organisations for the environment, social fairness and justice etc are clearly only 'corporatised' because that has become the only structure recognised by society, which itself is an indictment against corporate business.

For example, have you ever wondered why the west is so suspicious of Islam. I posit that a major reason for that suspicion is that Islam has no 'head office'.

Regards,
Jim Feehely

michael pettengill writes:

The essential point you missed when disucssing the constitutional convention that created our current US Constitution was the gridlock that prevented Congress from solving any of the problems of the United State becaus Congress could not taa and could not pay the large debt Congress incurred to gain independence. And the States were failing to deal with the problems facing the United States or even the problems of each State.

The first and second enumerated powers of Congress are first and second for a reason.

Republicans and the Tea Party are taking the position of Rhode Island until it was threatened with being a foreign nation in all respects to the 12 United States.

What you are failing to address is the nature of democracy and the nature of scale. Why didn't Rhode Island say "we would rather be a nation that subject to the coersive big government dominated by the slave States who have profited us to greatly in the trade in slaves and demon rum"??

You also ignore the popularity of the Federal government engaging in the massive redistribution of wealth in its land reform policies that took the land from those who lived on for thousands of years and gave it to cronies and corporations and on occasion some common folk, mostly to prevent revolution. The end of the land redistributioon was under FDR as he focused on conservation of public lands for enjoyment by all.

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