Arnold Kling  

The Moral Rot Factor

Two Scott Sumner Posts... The Solow Model and Soviet Gro...

Bryan has brought up the issue of economics textbooks that over-rated the Soviet Union's economic prospects. For some reason, Brad DeLong feels obliged to go after Bryan about this.

My view on the Soviet Union is that it collapsed because of moral rot. In that sense, I think Ayn Rand is more relevant than Hayek. I think that the Soviets could have survived their misallocations of capital and the problems with socialist calculation. What they could not survive was the corruption that permeated their system. It is this moral rot, as represented in Atlas Shrugged by Wesley Mouch, that destroys state-run economies.

What is disturbing is the extent to which this sort of corruption has seeped into our own society. The cumulative effect of bank bailouts, unfunded liabilities in entitlement programs, and environmentalist energy planning (the Energy Secretary turning taxpayers into unwitting and unwilling venture capitalists in the electric car industry) will be to create serious moral rot. And the only force standing in the way is the Tea Party.

Have a nice day.

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CATEGORIES: Political Economy

COMMENTS (11 to date)
shecky writes:

Gloomy Arnold is speaking again. And given to fits of drama, to boot. The only force standing in the way is the Tea Party? You so funny!

SydB writes:

Ohhhh noooozzzz!!!!! I finds out government funds electric car efforts.

Interesting tidbit: I think Ayn Rand predicted it said funding in that ginormous Atlas speech (it's encoded, just play the speech backwards, you'll hear the funding prediction--even with dollar amounts adjust for inflation).

Thank goodness the tea party folks will stop that.

And I wish oh wish the tea party people would have stopped the funding of BBN, UCLA, and the likes when the government gave them our hard earned tax dollars to build the arpanet.

Oh wait, but then Mr Kling couldn't have started his internet company. And the Tea Party couldn't organize on it.

This is so complicated.

Cliff Styles writes:

Rand's point that you allude to is that initiated coercion eats the soul of both perpetrator and victim. I don't see much talk about the consumed soul in economic theory. The moral point of freedom is that an individual is free to make his or her own moral identity without interference.

I like the fact that you appreciate the dual market that is always at work: the market for the good or service, and the market for all the coercive rules that influence outcomes in that market. Most of the bargains in that latter market are Faustian, for both the buyers and sellers.

Stan writes:

So Caplan, Iglesias, and DeLong are wrong. Heh.

The Tea Party although great obstructionists, do not inspire confidence. Sounds like a real American political party.

I am a member though, if one can be.

Boonton writes:

Your ignorance of US history is only matched by your ignorance of what the USSR was if you think 'unfunded entitlements' or bank bailouts are even on the same scale as the Soviet Union.

Michael writes:

Re: 'The only thing standing in the way are Tea Party Activists.'

I just listened to an interview on the radio program On Point with Tea Party activists, who, among many other such claims, expressed belief in the following:

1) The decline in real wages for the American middle class can be laid squarely at the feet of wealth transfers from said middle class to third world nations.

2) Obama is a Red Communist who, but for the ever present vigilance of conservatives, would turn us into c. 1960's era Red China.

3) a. The health care bill is just like National Socialism, and therefore, all Jews should be very afraid.

Let me my own hyperbole: isn't this is a bit like saying that the only thing standing in the way of tyrannical Czarism are the Bolsheviks?

And anyway, you can't possibly believe your own point about moral rot: try to come up with some model of 'moral rot' based on the Soviet system and apply it to regimes across history--I'm sure you'll find it doesn't do very well.

Boonton writes:

Speaking of which, if Kling thinks 'moral rot' caused Russia to change the policies he hates then wouldn't increased 'moral rot' in the US have the same effect?

guthrie writes:

Yikes! The claws have come out! You hit a nerve, Arnold!

Komori writes:

"isn't this is a bit like saying that the only thing standing in the way of tyrannical Czarism are the Bolsheviks? "

I think this was kind of his point. This post is not optimistic about the future, after all. We're getting stuck with the choice between worse and worst.

Or to put it another way, how many positive influences can you name in US politics? Fiscal responsibility is pretty close to nill, cronyism is huge on both (all) sides, political lies are not only expected but accepted and rewarded. Seems like the best we can expect is the Tea Party to obstruct things and cause gridlock so things can't get worse any faster than they already are.

Bo Zimmerman writes:

Moral Rot? Do people (including 'crats) no longer respond to structural incentives? Do they act strictly according to the degree to which they have "Moral Fiber"?

We should find an economist to respond to Dr. Kling.

George X writes:

Calm down, Boonton. Nowhere does Arnold say we have rot at the "same scale" as the end-game USSR.

And calm down, everyone talking about the Tea Partiers. As Komori pointed out, Arnold's not pleased that they're the "only force standing in the way"; his dislike of them is well-documented.

Good comment threads are all about reading comprehension.

My take on the original post is that (a) "moral rot" is badly defined: does it mean deviation from Communist ideals? or from human rights? or from common and traditional moral principles? (b) 40% of the economy going to the military seems like a pretty good way to wreck an economy even without any moral rot of any kind. At a certain point, growth will cease, and then it's just a matter of time before the West can easily crush the Red Army militarily.

Stepping back, I understand Arnold's pessimism on a gut level, but I also think it's impossible to predict the mid-future state of the country. So the reasonable response would be to be neither pessimistic nor optimistic, but agnostic. (OK, sustained 3% GDP growth sometimes pushes me over into optimism, but we can always find a way to screw that up via our political system.)

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