Intro. [Recording date: May 7, 2017.]
Russ Roberts: This episode of EconTalk is being recorded in front of a live audience in Washington, D.C. in honor of the 40th Anniversary of the Cato Institute. Our topic is the past, present, and future of liberty. And to talk about it we have three special guests, David Boaz..., P. J. O'Rourke..., and George Will.... So, I want to start with the state of liberty in America. Is the glass half full or half empty? David, why don't you lead us off?
David Boaz: We talked yesterday about whether this is a short term or long term question. In the long term, I'm still very optimistic about the future of liberty, because liberty works. And socialism and central planning, and indeed factism[fascism?] do not. And so, I'm optimistic. In the short term, we have a lot more liberty than we did 40 years ago, in a lot of ways. A lot of New Deal regulations were eliminated. You and I remember that the draft was a real threat. And we were 21. And now it is not. That's a good thing. There's been a lot of liberation in terms of civil rights, women's rights, gay rights: all of that is good. Marginal [?factrates?] came down. And went back up a little, but not so much. Still we have apparently an out-of-control welfare state in most developed economies. And today we are seeing new threats from what could in some way be called right-wing, authoritarian populism: We're seeing it in France. We have seen it in other places in Europe. And, there were elements of that in the Trump movement. We thought the Republican base was Reaganite, which--pro-Libertarian; it's not quite perfect, but at least on free markets and free trade; it's supposed to be a good thing. It turns out the Republican base was perfectly willing to vote for a determined perfectionist. So, lots of new threats to deal with in the next few years. P.J.?
P. J. O'Rourke: I would essentially agree with David except that I wouldn't call it a right-wing, authoritarianism that we're going through. I think you see it all over the political spectrum. I think Bernie Sanders was an example of the same sort of thing from the Left. It's also at least in the debriefings[?] and interviews and so on that I have done with people who have voted for--I found very few people who voted for Trump. I have discovered a huge number who voted against Hillary. I can understand the conundrum myself. Actually, I, in the end, because I was in a swing state; and my vote conceivably did matter; my wife and I talked about this. We voted for Hillary because of the VIX (Volatility IndeX, stock market ticket abbreviation). Those of you in the financial industry know--the Volatility Index. The measurement of fear. I figured we could live through another 4 years, the 8 years we lived through. And I just didn't know what this guy was going to do. So, in the end, I voted for--I made the safe vote for the ugly status quo, versus the devil I didn't know. But I do think we are generally moving in the right direction. But--the alarms of the modern world, as I was talking about earlier today are such that they tend to drive people toward those who claim that they can fix things. They can run things. So, the strong-man, strong-person it is now--phenomenon: let's hope nothing goes horribly wrong in France, tomorrow. But we see that rise of authoritarianism. It reminds us just enough about the period between the 1st and 2nd World Wars, which was the absolute, most horrible, bottom-of-the-pit period in the rise of authoritarianism. There is just enough echo from that, you know, history repeating itself as farce, I suppose--let's hope it remains a farce. Just enough echo of that to put my nerves on edge.
Russ Roberts: George?
George Will: What this conversation needs is a good, robust pessimism. And I'm here to--I'm here to be the wet blanket at this moveable feast. I subscribe to the Ohio-in-1895 theory of history, so named by me for the little known fact that in Ohio in 1895 there were two automobiles; and they collided. When Earl Weaver was managing the Baltimore Orioles--he was a short, irascible, dyspeptic, Napoleonic little figure--and when he was out of sorts which he always was by the third inning he was the scourge of American League umpires. He'd come barreling out of the dugout, stick his chin in the chest of a much larger umpired and shout, 'Are you going to get any better or is this it?' This is it. We see it on American campuses and we know that what happens on campus doesn't stay on campus. We see on campus a rising generation of extremely badly-parented young people who really do not like the 1st Amendment; and when it goes, everything goes. We have a nation--it's been 60, 70 years now since Lasswell and some other political scientists diagnosed the fact that the American people are ideologically conservative--meaning libertarian--but operationally, liberal--meaning statist. This seems to me it has gone on and demonstrated what they argued 60 years ago. The American people talk like Jeffersonians, insist upon being governed by Hamiltonians--a large omnipresent, omniprovident welfare state. They are loss-averse, which is to say once they've got something, they are not going to give it up. Case in point: the Affordable Care Act. The Affordable Care Act has never been more popular than it is today, because people said, 'Well, we've got it, and let's keep it.' So, as I say, my role here is to shoot down any little ray of sunshine.
Russ Roberts: I'm going to pile on. And I'll let David and P.J. react accordingly if they wish. So, David, you pointed out marginal tax rates have come down, but government hasn't gotten any smaller. Government continues to get larger. The nanny state continues to be more intrusive. Economics gets, as you say, the welfare state and various regulations--some have gone away. The cost of this is that everything that is bad about the current system is blamed on markets, even though it's not a market process. So, the fact that United once dragged a passenger off a plane with Federal agents is an indictment of deregulation now. I've actually read things like that. Or that airline travel is so horrible because it's just cheap. Or, the health care system proves that markets don't work--when of course we've managed to remove almost every bit of market process that could be there to start with. So, on the facts I think it's a tough argument that the glass is half full. Do you want to push back against that?
David Boaz: Well, look. It depends on where the glass started and what you're comparing it to. Compared to most of human history and most of the world today, the glass is at least half full in the United States of America. And I ask people sometimes--it's a common thing, and it's even sort of in Cato's boilerplate that goes on the side of all our books: Since the American Revolution, our liberties have eroded. Well, at the time of the American Revolution we had slavery. So, I'd say, on balance, better off today. What is the other period--the 1950s when so many kinds of people were excluded from the political and social and economic mainstream? Not such a good time. The 1950s also had all this New Deal regulation that we did wipe away a lot of, even though we added more. So, I think there is way too much government; and I could spend this whole hour talking about the nanny state. On the other hand, when you say nanny state, early in the United States there were a few states that still had state churches. That's nanny state. We had sodomy laws. We had Jim Crow. All of those things, much worse manifestations of the nanny state than the fact that they're regulating our light bulbs, as outrageous as telling us what light bulbs and toilets we can buy is.
Russ Roberts: P.J., you want to add anything?
P. J. O'Rourke: Well, I'm afraid whatever little glimmer of optimism I did have, George pretty well took care of. I do--again, I agree with David; and I think in terms of personal individual liberty, we are--if we hold the three branches of the libertarian menorah to be individual liberty, individual dignity, and individual responsibility, we're doing pretty well on the dignity front. And others, no doubt. There's nothing dignified about being someone's chattel, or not being able to vote. We're doing pretty well there. On the individual responsibility branch--yeah, I just, you know--the thing that truly frightens me about the growth of the state and the intrusion of the state into every little corner of life is I don't see it's stopping point. A mathematician friend of mine, when I was moaning about something years ago, once told me, 'Well, all curves are self-limiting by nature.' Well, I flunked math. I just don't see where this curve limits itself; or if it does limit itself, it limits itself in some sort of crisis. And one never wishes for a crisis. Even if the crisis involves entitlement programs that I wish would go away, you don't wish for a crisis based on those entitlement programs getting out of hand. So, yeah, I am more worried than pleased, overall.
Russ Roberts: I just want to say that I'm pretty sure that this is the first time that the word 'menorah' has been used on EconTalk. [Yes, first time, verified--Econlib Ed.] And it was not used by the Jewish host but by P.J. O'Rourke. So, P.J., that was really, um, that was special.
George Will: I think we need to make a distinction. When you talk about gay rights and integration of the American society and a more color-blind society, that means America is nicer than it used to be. And I think that's true. But you can be nicer in many ways without being freer. Maybe it's a good tradeoff; maybe we should say niceness is as important as being free. It's certainly an arguable position. But marginal tax rates, for example, they were at 35 and no one was paying 35--the corporate tax rate today is 35 but the average corporation pays about 25; [?] Boeing and General Electric pay nothing. So, that seems to me a weak measure of the status of liberty in society.
David Boaz: Well, let me just point out that marginal tax rates were 70.
George Will: And no one paid them, either. Because you have then a robust industry of tax avoidance--tax shelters and all the rest which skewed the allocation of resources and [?]--
David Boaz: And everything[?] was deductible.
George Will: That's right. So, what you did was you empowered, and it was a jobs program for lawyers and accountants.
David Boaz: Well, that's true, but as Russ would point out, spending lots of effort in tax avoidance is bad for the economy. And, it's an infringement on your freedom. You are right about nicer; but it's more than just nicer. We got rid of the restrictions of Jim Crow. Those were legal restrictions. With women, there were also various kinds of legal restrictions. And, you know, I think if we go back now and we look at what were the things that Ruth Bader Ginsburg was suing about as an activist lawyer, I tend to think of her as a state interventionist. But you look at the things she was suing about: There were things like women couldn't open a bank account without their husband's signature. So, that's not just niceness. That is an expansion of freedom. And obviously forgave people the face that they were excluded from marriage; they were actually subject to arrest for engaging in sexual activity. All of those things--in some sense the niceness preceded the legal changes. But it is freedom, as well.
Russ Roberts: So, we not only get menorah, we get a pro-Ruth Bader Ginsburg comment at the Cato Institute. It's an awesome day!
Russ Roberts: I want to turn to a cultural issue--we've mainly talked about size of government. One thing I've noticed--and my libertarian awakening occurred a few blocks from here. In 1976 I was reading The Machinery of Freedom, by David Friedman. And he said, 'If you want to get involved, you should...,' and he gave a list of things you could do. And one of them was to get involved with the Libertarian Party. And I noticed it was about 3 blocks away, on P Street off of Dupont Circle [Washington, D.C.]. And I walked over there. And I walked in. There were two people stuffing envelopes. One of them was Tom Palmer, who is a wonderful contributor to liberty here at Cato and has been for a long time. So, my journey--and this intellectual journey--is about 40 years old, also. And over that 40 years, one thing I've noticed is that our ideas are semi-respectable. They were not, 40 years ago. They were not. Most of the people in the movement, then, were weird people. Like me. And were socially weird, and uncomfortable. And now we have lots of normal people in the movement who are thoughtful and intellectual and wise; and it's okay to be a free market libertarian, whatever you want to call it--I call it classical liberal, mostly. But that's the world we live in. What depresses me is how little that has translated into results. It's to me the equivalent of people list Atlas Shrugged as the most influential book in their lives; then you wonder how we have such statist results in our public policy. So, I want you to reflect, if you would, on this cultural change--that our ideas have made it into the mainstream, to some extent, but don't necessarily seem to translate into political action. And, is that any cause for hope or sadness? Gentlemen, who'd like to comment on that? Anybody?
David Boaz: Okay. I think you are right. And it's very frustrating to a lot of us. We hear all the nonsense on campus today. But when I was at Vanderbilt--not an especially Left-wing campus--in the 1970s, I was not aware of a single libertarian or conservative professor. That would not be true today, at I think any campus. So, there has been that kind of change. And you are right--there are more libertarians or classical liberals with access to the national media and things than there were in the 1970s. And yet a lot of change hasn't happened. Part of it is what George said, that political scientists find, if you ask the American people, 'Is government too big? Do you think government interferes too much in your life?' you get pretty strong majority who say Yes. If you ask, 'Do you think the government should do more for health care, more for transportation, more for education, more to help women, or to help children?' then you get large majorities for all of those things. So, there is this disconnect: What is your definition of 'Government is too big?' On the other hand, there is, still, I believe, a libertarian core in America that makes us one of the freest countries in the world. One of the countries in the world with the most libertarian culture. On the Economic Freedom Index and the Human Freedom Index, the United States has dropped. It's in the top 20 instead of the top 5 or 10. But, still, one of the things that strikes me over the past few years--and this is where economics is harder to change--but not only is there the gay rights advantage and the marijuana legalization that's finally slowly moving--but, you know, we've had a lot of provocations that push people to advocate gun control; and yet we have not gotten gun control. And I think that's because there's a basic libertarian sentiment that includes the 2nd Amendment that Americans push against. Economics--giving people free things; and then it's hard to get them to give them up. Regulating something that people don't like--and this stuff with the airlines; they are already fairly regulated but now, one guy got dragged off an airplane; horrible video; and people, many people, want laws to stop that--whatever law that might be. Next, they will want a law to require that your airplane always be ready to go because there is a crew that got there on that plane that was coming in to Louisville, and businesses have to balance all of that. A lot of it is, I think, this philosophical, operational divide.
Russ Roberts: George?
George Will: The liberty movement benefited a great deal from Lyndon Johnson and the Great Society, because they passed things called Model Cities legislation. And you looked around years later, there weren't Model Cities. And people said, 'Things aren't working.' But to do a little history here: 1937, 1938, FDR [Franklin D. Roosevelt] 50-year[?] trust[?] packed the Supreme Court. Trust purged those then, in the Congress who opposed his measure to expand the Supreme Court and fill it with more congenial judges. He [?] wiped out in 1930, and everyone he had campaigned against wins[?]; between 1938 and 1964 there was no liberal legislating majority in Congress. Then, Goldwater campaign--I was one of the 27 million who voted for Goldwater, in my first Presidential vote. Got so badly trounced that for two years they had a liberal legislative majority again and they over-reached. And they set up a lot of things that made people skeptical about the gap between government rhetoric--the fancy labels on programs or what they actually produced. And at this time we began to get a more skeptical political science: James K. Worlson[?], Mike Glazer[?], Pat Moynihan, and all the rest. And Moynihan said, 'The point of social science isn't to tell us what to do. It's to measure results.' And therefore, the point of social science turned out to be [?] what's not working. Which was almost everything. So, we've had, in a sense we've had a long, decades' long now, tutorial in the limits of government. And a failure to measure up to the titles we've put on legislation. It's been said that the titles of bills in Congress are like the titles of Marx Brothers' movies: they tell you nothing about what's inside. Horse Feathers and all the rest. So, in that sense, yes, the country is more skeptical. But I don't see the fact that that skepticism exercises any inhibition on the legislative branch. Or, the impulse that people say, 'Let's ask for more again. This time they'll get it right.'
David Boaz: Or, indeed, restraining the executive branch from taking these vague laws and turning them into sweeping regulations governing every school system in the country and so on.
George Will: Yeah. The most ominous and intractable problem is to take the title of Gene Healy's book from this great institution, the cult of the presidency. We have absolutely magical superstition about the ability of presidents to cause things to happen: 'I will create jobs. I will bring peace to the Middle East.' All of this stuff. None of which is going to happen. But we expect the presidents to do this, and there have a kind of rancid disappointment, a little cloud hovering over the country, at all times, because the President has failed to live up to what they possibly, reasonably could be expected to do.
P. J. O'Rourke: Well, I have one thought about our failure, our failure to--even though people tend to agree with us, we fail to influence them in certain ways. And I go back to that candelabra, menorah, troika, whatever we have [?]. Everybody's totally down with the individual dignity part. And forget responsibility: we'll never sell them on that. Or, we'll just have to sneak that in like Mom putting spinach in the omelet. But, I think where we have failed as libertarians is explaining, getting it across to people how market liberty is the foundation of all liberty. And anybody who was active in the Civil Rights movement should absolutely understand that. I mean, first and foremost comes the ownership of yourself. And then comes the ownership of the works of your hands and your mind, the ownership of what you produce. And we have a public that tends to confound property rights with the marketplace. And this is a moment, because of radical changes in the marketplace, because of changes in the economy, where people really look at markets and it's opaque to them. It's very, very hard to understand markets at the moment. And the Internet has done this, for one thing; but so have derivatives and so have all sorts of complicated movements, hedge funds and so on, Black-Scholes formula, this, that, and the other thing--has all made this deeply confusing. What used to be the grocery and he bought at wholesale and sold at retail--everybody could understand it--now the markets are very hard to understand. And we have to back up and get back to that fundamental of it's about ownership of yourself, and investment in what you produce with your hands or your mind. And also, into the idea that, 'Listen, the marketplace is not something that's evil, or good, or positive, or negative.' It's a yardstick; it's a bathroom scale; and all the marketplace does is tell you what a given thing, what people are willing to pay for a given thing at a given moment and a given place. That's all it is. And you can say, 'The market fails.' The market doesn't fail, any more than your bathroom scale fails. I get on the bathroom scale and find I've gained 20 pounds. It is tempting to say that's a scale failure. And there is nothing contrary to basic libertarian principles to do things--when market truths lead to difficulties for people, there's nothing in our fundamental ideology that says we don't want something to keep people, a system to keep people from being beggared by medical costs. [?] it's my fundamental feeling that in a wealthy society like our own that nobody should lose their house because of medical costs. The boat, maybe, but not the house. There are ways to mitigate the effects. But we've got to get people back to those fundamentals or they lose hold of what the idea of liberty is. And they get confused by things the government gives them--for free--and all the rest of the goodies of the welfare state.
Russ Roberts: Do you agree with that, George?
George Will: Yeah.
Russ Roberts: Do you think economic liberty and our failure to understand the marketplace is a big problem for the overall picture?
George Will: No, I think if you convinced Americans in Western Pennsylvania--Donora, Monongahela, [?]--all these towns that have been devastated by the disappearance of that part of the American steel industry, and you said, 'Look, the greater good is served by this,' they'd say, 'I don't care. I don't live in the Greater Good. I live in Donora.' And the interesting question for you somehow is going to be when we have another election and nothing has changed in Donora, Pennsylvania. What are people going to want next? Because they wanted protectionism. Protectionism won't work--obviously. It's not going to bring back steel jobs. What's the mood of the country going to be after 4 years, when America isn't great again--as defined by those who say greatness is people in manufacturing jobs.
Russ Roberts: And what's going to happen when driverless cars, say, put a few million truck drivers and cab drivers out of work?
George Will: Well, Marine Le Pen--they are voting as we speak in France--Marine Le Pen said she is campaigning against the Uberization of the world. I mean, it's now become a verb, to Uber. It's a noun. It's an adjective. But she's right--she is campaigning against the uberization.
Russ Roberts: She's a Luddite. That's the ugly word for it. The attractive word is, 'I'm fighting against the uberization of the world.'
David Boaz: Well, I'll tell you what will happen with driverless trucks, is they'll pass a law and put a truck driver in there. A dozing teamster.
Russ Roberts: Yeah. I think it's a big challenge.
Russ Roberts: But, I'm interested in this cultural question, and I want to just hear if you agree with me, that we have--that my profession of economics has failed to communicate the central ideas of how the world works. I have a chapter in one of my books called, "The Goose that Lays the Golden Eggs." And, if you don't understand how the anatomy and physiology of a goose works, you are prone to try to do some stupid things to get more golden eggs now rather than later, and sacrifice some of that future for your children and grandchildren. And, I view it as a two-fold failure. We've failed to explain how it works. And, we've failed to romanticize it. I think people used to have a romantic view of how markets worked, like they had a romantic view of the frontier spirit and what guns would do. And there's a lot of danger of romance. But, when you don't have a lot of time to think carefully about philosophy--[?] most of us don't--you need to have some fundamental tenets to hold onto without thinking about them very much. And those tenets have changed in America over the last 50 years.
Guest: But your field, economics, is the only field that has moved to the right in the last 50 years. And it moved to the right, it seems to me, because people said, 'Yes, markets. We understand markets generate information; when you don't have markets, you are ignorant.' The key to this movement to the right was the universal acceptance of free trade. Everyone understands comparative advantage. They just don't like it when it doesn't serve their immediate or short term ends.
Russ Roberts: Or, as Milton Friedman liked to say, 'People in business are pro-capitalist, except for their industry.' Because that's always an exception. So, there's some truth to that. But actually, I think the academic part of my profession--economic policy has moved to the right in certain ways. The academic part of my profession has, I feel, has gotten increasingly interested in tinkering, in identifying minutiae and various things that would justify intervention. And I think it serves us well as economists but not so well as citizens.
David Boaz: We published a book here at Cato about 15, 20 years ago called, What Do Economists Contribute? And, it's a--
Russ Roberts: It's a short book.
David Boaz: It is a short book. But it was a collection of essays from some very distinguished economics as well as some practicing economists who were less famous. But it basically said: The fundamental value of economists is to teach the average person about things like incentives, tradeoffs, comparative advantage, and not to build new models and find technical tinkering opportunities. There may even be, some people say, a technical set of circumstances where protectionism could benefit a country. But the idea that a government--just take a look at a picture coming out of Washington of the people who would make the decision and ask, 'Do you want them to find the 1 in 100 places where protectionism might work?' Obviously not. But it's more interesting, I think, to economists to do complicated math, to do regression analyses, to build a model, to come up with an interesting new twist. There are people who do it; and sometimes we say, 'Who is the Henry Hazlitt of today?' Well, one of the reasons we can't identify the Henry Hazlitt of today is that there are multiple ones. Russ Roberts is clearly one, especially with his videos and his novels. But Don Boudreaux at George Mason every day writes a letter to the newspaper saying, 'You made an error in your economic analysis here.' Tyler Cowen does that. Steven Levitt has written books, Steven Landsburg. So, there are a lot of Henry Hazlitts around. We just need more people to see them. And one way you do that is you take them off the printed page, and turn them into video and podcasts.
P. J. O'Rourke: You know, one thing that really puzzles me about the steel towns you were mentioning--I grew up in Toledo, Ohio. And I can't quite figure out when it is that the American people forgot a very fundamental principle of America, which is knowing when to get out of town. Just get out of town. I took a look at Toledo when I graduated from graduate school. So did all my friends when they graduated from college. We took a look at Toledo; and we don't live there any more. There wasn't anything to do. I know one kid who inherited the local bank; I know another kid who inherited the local funeral home, a large chain of funeral homes--which is a big business in Toledo. And also a third kid who inherited a chain of nursing homes--also a big business in Toledo. They stayed. The rest of us left. I mean, get out of town. This country was based on a lot of kinds of mobility, not only vertical mobility but horizontal mobility, you know: 'If you can't get up, get out.' And, when did we start turning to a Presidential candidate in our rotten little town that anybody in their right mind would have left?
Guest: Well, you are quite right. I mean, the Joad family in Grapes of Wrath loaded all their material possessions on their tin lizzie and headed west.
David Boaz: That's right.
Guest: There are, however, reasons why people are less apt to do that today, and one of them is that they are enmeshed in a web of welfare provisions that root them in West Virginia. It's very difficult, it turns out to just get up and move, because you are leaving behind all kinds of entitlements and relationships you've developed with various social service providers, which tend to anchor people and keep them there, near their supplier of oxycontin.
Russ Roberts: Yeah. Well, that's a--it really is a tragicomic comment. I think that's a very deep problem.
Russ Roberts: I want to look at the other side of it, though, and get your thoughts. Which is: In yesterday's Wall Street Journal, Ben Sasse had a piece talking about the fact that, I think it was, the proportion of people 25-29 living with their parents has reached--I think, 25%. I might be wrong about the number. But it's a largish number by historical standards, and it's up dramatically from a decade ago; and we had an episode recently with Eric Hurst talking about these issues. It's an interesting social phenomenon. My simple explanation--my back-of-the-envelope explanation--for this is that marriage is dying out in America. If you are not married and you are young, you want to live in a place with lots of other young people. If you are married, you are happy with living out in suburbia, or even in Toledo. But if you are not married, you want to be where there's lots of young folks. And now, of course, that's also where work opportunity is--in cities. And so cities are magnets that they weren't 40 years ago, 25 years ago. Huge demand by young people, socially educated young people, to live in cities, pushing up the demand for housing. Cities have, over the last 40 years, passed a lot of regulations that make it hard to build new houses. So, in cities like ours, Washington, D.C., or my sister's city, San Francisco, or in New York City, the largest, most attractive places for young people to live are increasingly expensive. Frighteningly expensive. So, if you want to live in those cities, you are best off living with your parents, or living near your parents. But, it's hard to leave Toledo when, even Cleveland might be a little more expensive than it used to be. What do you think of that problem, for mobility?
P. J. O'Rourke: Didn't stop me. I didn't have any money--it was time to leave. You figure out, out of--you know, frighteningly expensive. I always found, you can look in any city you want, if you are willing to put up with the frightening stuff. I lived on Second Street, between Avenue B and Avenue C in the 1970s--a fire-based[?] Baker and fire-based[?] Charlie, as we called them. But my apartment cost $50/month. It balanced the fear--
Russ Roberts: It doesn't any more. That's mind-blowing.
P. J. O'Rourke: Well, not there.
Russ Roberts: Unless you have 10 or 12 roommates. Which is tricky.
P. J. O'Rourke: No, there's some place in the Bronx you can live that cheaply.
Russ Roberts: George?
George Will: Well, things--the market will speak. And as Manhattan became expensive, Brooklyn gentrified. Now, Brooklyn has gentrified and people are moving to Nashville. And Nashville is exceedingly expensive nowadays. So, this, too, is the market working. And people will move. Again, we're going to get a more stratified society, as those capable of moving--those who have, a). the resources, and b). the sort of pep, get-up-and-go will move. And those who don't will stay there. So, we're going to have a society increasingly--getting in the swing of my pessimism here--I mean, it's clear we have an increasingly cognitive stratification in society. And we're going to now, that will reinforce those other trends between those who are mobile, those who leave Toledo, and those who don't.
Russ Roberts: David, you want to add anything?
David Boaz: One of the problems with complicated regulation and complicated tax systems is that people with high cognitive skills are disproportionately able to maneuver all these bureaucracies and paperwork and tax forms and so on. So, one of the things that we should be focusing on is getting rid of regressive regulations that particularly hurt people who are poorer. One of those is land-use regulations that make a lot of these attractive cities more expensive. Occupational licensing that is now blocking off something like 25-30% of occupations. There are a lot of jobs that people could do without a lot of education, but there are written tests and procedures to go through in order to get those jobs. So, those kinds of things, I think are useful. But I agree with George: I think that the web of government benefits makes it--partly that it holds you there because you are enmeshed in it; partly it just makes it easier. The people in Kentucky and Tennessee who couldn't get jobs in the Great Depression, one of the things they did was they went north to Detroit. And maybe you don't have to do that now, if you have a safety net. And, I think one thing might be: If most couples have two incomes, then the loss of one income is not the devastating loss that it was to the Okies or the Kentuckians.
Russ Roberts: That's true. But again, it's going to be interesting to see, socially it's beyond the scope of this conversation, how the institution of marriage and relations between people are going to evolve over the next 20 and 40 and 50 years.
Russ Roberts: I'm going to switch us back to a much more narrow topic, which is: Think tanks. So, we're sitting here at the Cato Institute, an illustrious institution for 40 years now. I work at the Hoover Institution, but I've benefitted tremendously from Cato and other think tanks around the country and around the world. How important are we? Do we matter? Are we just a nice way to miss a lovely afternoon--we're all sitting here together and it's pleasant to have intellectual ideas and print, occasionally, in other media. But, how important is this, this enterprise? How important is the think-tank in America--which is a somewhat distinctive American phenomenon? How much has that contributed to--I'm not interested in legislation. I'm more interested in the culture and the intellectual environment that we live in, and sustaining certain ideas. If we went back, a lot of people would attribute the changes that I think George was alluding to, to the Mont Pelerin Society--a sort of pre-think-tank think tank of a smart, passionate people who felt that ideas mattered. How are we doing? How is the think tank movement doing, and what is our role to play over the next 40 years?
George Will: The bigger the government gets, the more government there is to analyze. More governmental results to assess. So, in that sense, the think-tank is more important. Furthermore, Henry Kissinger said, one of the lessons he learned from his service in Washington, was, that you run down the intellectual capital you bring. That, no one has time to recharge their intellectual capital. And I think that's true. I used to say that my friend--who was my best friend--had on the one hand wrote more books while he was in the Senate than his colleagues had read. And the Sasses of the world are very rare. And his new book, by the way, is absolutely sensationally good. But people here are so busy. Jim Buckley, who was a Senator from 1971-1977--and he told me at one point, he said that the workload he thought doubled in his 6 years, because when the Auburn, New York Fire Department's roof is a Federal problem--and it is that, [?] because there's no Federal firehouse roof program--that there is just no end of the claims made on your time. And they get handed a 3x5 card every morning with their schedule, their 3 things that, 11 o'clock, they can't be at two of them. So what this means, that the general scary nature of those in government, throws them back more and more on their staff. Their staff are 28 years old, fresh out of law school, and they don't know anything about anything. And therefore there is a growing vacuum, as it were, that should be filled by the think tanks.
Russ Roberts: P.J.?
P. J. O'Rourke: Yes--actually, I was going to make exactly the same point that George was: The more complexity, the more need for us. And the less thoughtful the politicians--whether it's because of time or some other factor--the less thoughtful the politicians become, the more the thinking is begun for them. I would personally like to see more outreach on campus. I think that AEI [American Enterprise Institute], since we are doing a really good job on that, I would like to see a sort of Cato-of-the-younger out there. Because, we have the kids' full attention on certain libertarian issues. They are very libertarian in the sense that you were talking about--how the glass is half full. They despise any of the kind of oppressions, the historical oppressions of America, that you can fault America for. But, they don't sort of realize the connection between that and, and, and economic liberty, and indeed personal responsibility. So, in that respect, that's the thing I would like to see happen in the future. But, I think, you know, as I said in my speech, I think it's now more than ever that we're needed.
David Boaz: Think tanks are certainly a booming industry. The professor at the U. of Pennsylvania who studies [?] has about 8000 on his list. I'm not sure what percentage are in the United States, but it absolutely is a very U.S.-based phenomenon that to some extent has spread--tax laws in the United States, plus our [?] and tradition of people getting together and doing things for themselves matter. To a great extent, the rise of the think-tank was because there was a rise in government of demand for creating legislation, building new models. All these New Deal, and especially Great Society programs came out of some of the early think tanks. Then, in the early 1970s, there was a surge in think tanks based on free market principles. And they, I think--and I think particularly of Cato and Heritage, but there are others--had more of an attitude, rather than simply building models and handing them to legislators to implement of changing public opinion. And so, Cato was founded in San Francisco. We moved to Washington--not so much because this is where the politicians are, but because this is where the journalists are, because the politicians are here. And therefore, we wanted to communicate, in a world before the Internet--you want to be talking to the journalists; you want them to take your message out there. One of the things that I think that spurs the development of think tanks is the impression that academia is getting increasingly esoteric--specialized, removed from normal concerns. Not exactly everyday people; but even of everyday government. And, therefore, you can get ideas in a think tank that are not really coming from the academy. But, think tanks also serve as a transmission bell[?]. So, to the extent that there are good ideas, being developed by economists or international relations theorists or political scientists, in universities, or law professors in particular, we can give them a platform and voice that they wouldn't have just through academic journals, and so on.
George Will: 46:21 Forty years ago, fifty years ago, sixty years--back when Kennedy came to town, it was considered, really required to have ornaments from academia in your administration: Schlesinger, Galbraith, the Rostow brothers, the Mac-Bundy [McGeorge "Mac" Bundy?] the Bundy brothers. No one in, no one thinks of the academia as anything other than a self-marginalized, frankly ludicrous, exotic flower that has no particular bearing. And that has had the good effect of elevating the alternative intellectual infrastructure--of which Cato and AEI and all the rest are a part. And the countless state-based think tanks. So, again: the market is working in the sense, the American people, they have a voracious appetite for reading American history, particularly the Founding period. I don't know--is Ron Chernow in an academic position? I doubt it. The man who wrote Hamilton, the musical [Lin-Manuel Miranda, based on the biography, Alexander Hamilton, by Ron Chernow--Econlib Ed.], David McCullough, all of the rest--most of the most widely-read, serious history is not being written in academia. And that's, again, a good sign.
Russ Roberts: We just need a musical called "Jefferson," I think.
Russ Roberts: Or Hayek's a better idea.
Guest: You heard it here, first. Well, we've got rap videos on Hayek. I think George should combine with somebody to write a Madison.
Russ Roberts: I did have an idea for a Keynes/Hayek musical--building on our rap videos with John Papola. But that's just a gleam in my eye. Exciting, though, isn't it? It takes a hot--what was your phrase? A hothouse--some exotic fragile flower to think that's a good idea. But anyway--
Russ Roberts: I want to give you a second here to think for a minute about legislation you might envision. We are not allowed to talk about pending legislation here on EconTalk. But, if you were dictator for a day and could pass one piece of legislation, what might that be? I want to go first so you can think about it. So, for years, mine has been to get government out of the schooling business. Totally. Not with vouchers, not with charter schools, but to allow private schools to exist, and to allow scholarships and other foundations to create schools for people who can't afford a private school. I think that would be the single biggest thing to make our country better. And free-er. And that would be mine. So, the rules of this game are you have to pick something that's imaginable. That's not literally imaginable for most people. They can't imagine it. But the rule is, you can't say, 'I wish people were nicer.' So, that's against the rules. But, if you can pick an actual public policy that you think is important--it could just be your pet peeve. Anybody want to go first?
Guest: Well, I endorse your plan. One can envision--I think we can at least imagine a Constitutional Amendment that provided for a separation of economy and state, as complete as the separation of church and press and state. Which is to say, we still have arguments about exactly where the line of separation of church and state, or separation of news and state, is. But separation of economy and state. I have a much simpler one, doesn't require a Constitutional Amendment, easily done by statute; could be done by a Republican Congress next month. End tax withholding. There is no way the government could collect half of what it does if people had to write a check at the end of the year. Since people would not have this much money at the end of the year, we could make it monthly: You have to write a check out for your taxes every month. Average people would be having to write, what, a $1000 check at the end of every month? I believe that would put some discipline in Washington.
George Will: [?] Every parent has heard coming through their phone the FICA scream [FICA: Federal Insurance Contributions Act]--when your child goes out and gets a job and calls you the next month and says, 'What the hell is FICA? And why is it [?] my income?' I would suggest two things. I'm still--although I know there are costs; there are costs to everything. I'm still for term limits. That is the best way to break the nexus between the--it's a Madisonian change in the sense that all it does is tamper with incentives. It changes the incentive for going into public office and it changes the incentives for behaving while in public office. Or, another way to get term limits is to say that anyone in Congress when the deficit is more than 1% of GDP (Gross Domestic Product) is ineligible to run for re-election. So, either you'll get term limits or you'll get a balanced budget.
P. J. O'Rourke: Well, I was thinking very much along the line--everybody, all of the ideas sound very good to me. But I've also felt for years--as a self-employed person, I do write a check every month. I mean, we used to do it quarterly, and figured out that it was less painful to do it--it's still painful. So, we do write a check. And I was going to do the same thing with the deficit: At the end of the year, whatever the government overspent, all the taxpayers would have to pay for it, a flat rate. Whatever got spent, more than came in, everybody would get a bill for it--everybody in the United States would get a bill for it.
Russ Roberts: We call it the 'Pass the Hat Bill.'
P. J. O'Rourke: Pass the Hat Bill. Yup. 'Came up a little short this year.' All of us who belong to civic organizations know this [?], or who have kids in private schools: 'A little shortfall this year.' [?] Except, you don't have a choice.
David Boaz: Let me say I have another plan, which I proposed in the Washington Post a year or two ago, and that is, that at the end of your 1040 Form, it says, 'We would like you to send this much'; and on the next page you list everything the government does and you write in how much you are willing to pay for it. But, this only produces discipline if at the bottom you are allowed to write in how much you want refunded to you. Now, I mentioned this idea to a good friend of mine who is a knowledgeable, long-time Washington observer and said, 'You know, I think this would result in the government getting less money. How much, do you think?' And he said, 'Ten or 15%.' And I said, 'Yeah, I think that's right. Why don't we try it?' Because I of course think the first year it would be about a 25% send-it-back to me; and the second year it would be 50% send-it-back to me. The obvious complication is the government does 800,000 things, and how do you group them on this form?
Russ Roberts: I'm going to ask an awkward question, which is: Somebody once said that--I think it's their Twitter description--that they have strong opinions, weakly held. And I like sometimes to think of myself that way. I feel very passionately about what I believe in, but I wonder, 'Maybe I'm wrong.' It's possible; it's not pleasant to think that. But maybe I have an incorrect perception of the world. But I've devoted a good chunk of my life, as have the other people on this panel, to making the case for a certain philosophical view of how the world works and what would make it better. And, you have to ask yourself: Why haven't we convinced more people? Right? We're pretty--I think most of us up here, we're pretty confident. We think we're probably right. Yet we must confront the fact that in the marketplace of ideas, we have a bigger share than we had 40 years ago. That's to be commended, saluted. You can argue that the trend is positive; that we're going to do better. But, it's interesting that our successes are limited. Now, Hayek had a very attractive idea, explanation for that. I'll leave that aside for the moment. But, I'm curious what you gentlemen think is the reason for--our failure, to some extent.
George Will: Anyone[?] want to go first?
Russ Roberts: George? No one wants to go first.
George Will: What we're arguing is that in the long term, the view we have of how the world works and how the institutions of society therefore should be structured. In the long run it is in our good. But, our argument is that capitalism doesn't just make us better off: it makes us better. And it makes us better by enforcing thrift, industriousness, deferral of gratification--all of which are unpleasant at some point or other. So, it's a choice between short term gratification or long term; and the short term is going to win every time. And we're not preaching short term. And there's no way to change that.
Russ Roberts: P.J.?
P. J. O'Rourke: I--you know, I mean, there's every reason for nobody listen to me, but I don't think anybody listens to anybody any more. I think we have created a world where everyone is on broadcast and no one is on receive. In my explanation.
David Boaz: There is what Hayek called the atavism of social justice--the idea that our brains evolve through many, many millennia, in a world of small groups and extended family--a clan. And in that small group, in your family, you generally practice something along the lines of 'From each according to his ability; to each according to his needs.' And that seems to have gotten deeply ingrained within us. And, it's hard to understand--
Russ Roberts: And it's a good thing, by the way.
David Boaz: Yes, that's right. Within the family; even within a small group of people who love or intimately depend on each other, it makes sense. Trying to get beyond that, see the larger world, what Hayek called the Great Society, has to operate by different rules. I think that's a real challenge. And that's been a problem for us. Then, it's also a problem that we don't seem to teach civics and the basic values of America, as well. And economics is counter-intuitive. To tell people that a minimum wage law will not help people who are currently making $7/hour--that is a tough thing to explain.
Russ Roberts: Yeah. I think--the thought that I was thinking of--the Hayekian thought--I think I have that right is that he said that intellectuals--because that's the other part of this argument: Why is it that most smart people are not on our side? It's one of the things to say the average person. But the smartest people tend to be more interventionist, more socialist. And his view was, 'Well, they benefit from it.' I think that's true. I fear that's part of my profession's attraction to interventionism and the constant observing of market failure, and so on--is it does increase the demand for our services. So, I always--my view, is that, taking economists' advice should be, you should do it carefully because we have a conflict of interest, most of the time. My other thought--this relates to what you just said, David, is that--it comes back to what I said earlier--I think we've failed. Dismally. Bad choice of word. But I think we've failed dismally in making the cultural case for liberty, and for economic freedom. I think back to a powerful piece that James Buchanan wrote in the Wall Street Journal--I think it's called "The Soul of Liberalism"--do I have that right? But it's an incredible piece, where he basically says, 'We've lost the moral high ground.' We don't make the case that freedom is the right thing. We might make the case that it works. We make the case often, to me, as a left-brain activity, for analytical people who like equations and charts and facts and grafts. But we don't speak to the soul. And we don't speak to the heart. And I think if we don't do that, we are in a great deal of trouble. So, I'll let you gentlemen react to that argument about culture. And then I'll--we'll probably don't.
David Boaz: Well, I certainly agree with that. And for me, the moral case for freedom is what fundamentally matters. I sometimes say in speeches, after going through arguments for liberty: As for me, I hold this truth to be self-evident. It is wrong to initiate force against innocent people. That's the fundamental value, I think. At a think tank, a public policy research institute, we inevitably spend most of our time talking about costs and benefits of particular policies. But, we do want to make a moral case: Don't you want to be free? Doesn't everyone want to be free? Isn't that what it means to be human instead of some other species?
Russ Roberts: P.J.?
P. J. O'Rourke: Yeah. That's--you know--as one raising kids, I try to get them back to those fundamental principals, you know, which is: Keep your hands to yourself. Along with, 'Pull your pants up, turn your hat around, and get a job.' That's also an important--
Russ Roberts: That's a longer bumper sticker.
P. J. O'Rourke: That's a longer bumper sticker, yeah. But it is that, and again I come back to that triad--you know, is that you want to be, if you want to be treated with individual dignity, you have to treat others with individual dignity. If you want individual liberty of your own, you have to allow it to other people, in them[?]. And, if you want other people--to, say, I'll ask them, works the opposite way--if you want other people to take responsibility, you've got to take responsibility. And so, I think it is possible to, to, to reach the, the, the heart with libertarianism. But it's always going to be, as I said last night: It's always going to be a tough political sell. Because the really good, the honest libertarian politician would stand up on the stump and say, 'I can do less for you.' 'I can do less for you? I'm the guy.' 'The less we can.' There's no bumper sticker.
George Will: It actually was the bumper sticker of the Libertarian candidate in Montgomery County in Maryland a few years ago. It's not enough to tell people that's [?[ that what you want to do to want to be free, because you have to have the argument, well, what freedom is. On our college campuses today there is a powerful movement--it's a winning--that it insists on freedom from speech--that freedom from the inconvenience of people annoying you with ideas that you find unconcongenial. That, we still have to make the argument--we'll never not have to make the argument--we'll never not have to make the argument--against positive freedom. That is, you were freer when you have good health care. That you were freer--not just healthier, not just happier, but freer when you have, um, regulation of the trucking industry. That argument never ends.
Guest: No. Absolutely. I think the very hardest thing, for me at least, to have tried to have gotten, tried to get across to my own kids, is the difference negative rights and positive rights: how to explain to them that negative is good; positive is, lousy. It's all about--the rights you want are the rights to be left alone. Not the, the--you know, obligation for other people to give you things. Because, you know--Goldwater--government that is big enough to give you everything is big enough to take it all away. But, I think it may be that sometimes our rhetoric about 'Don't tread on me,' and the right to be left alone sends a signal to people that we don't care about other people: that we don't want to be part of a family or a community. Students for Liberty has tried to deal with this by producing bumper stickers that say, 'Don't Tread on Others.' Or, 'Don't Tread on Anyone.' Because, it's not just about me. It is about principle: that shouldn't tread on others. And I'm absolutely in favor of the fundamental right of a free person is the right to be left alone. But I think there are a lot of people who hear the right to be left alone meaning, the right to be left alone. And nobody wants that.
Russ Roberts: And rightfully so. I think the biggest--tragedy of the liberty movement is the embracing of selfishness rather than self-interest. Self-interest is a human trait. Selfishness is not a virtue. And, Ayn Rand wrote a book called The Virtue of Selfishness, which I read at, I think 19 and thought it was fantastic. As a 62-year old, I think it's not the right way to be a fully connected human being to other people. And I do think we have a marketing problem there. George, you want to say one other thing?
George Will: No.
Russ Roberts: Well, we're done. I want to thank our guests....