Bryan Caplan  

Why Aren't the Italians Libertarians?

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James Buchanan often expresses admiration for Italian political thought - and, by extension, the wisdom of the Italian in the street.  Why?  Because they take it for granted that politics is a corrupt game, and that all the flowery talk is pure hypocrisy.  So far, so good.  But why then don't Italians also take it for granted that the government is best which governs least?  When irrational faith in government leads to socialism, at least there's an inner logic.  The marriage of cynicism and socialism is simply weird.

Over at reason.com, Eggers and O'Leary argue that this weird marriage is a general pattern:

Today, only 23 percent of Americans trust government to do the right thing. At first blush, this would seem to be an encouraging statistic for those opposed to "big government." After all, the less citizens trust government, the less willing they should be to give it big new responsibilities, right?

Wrong.

An important recent academic study called "Regulation and Distrust" shows that, paradoxically, the worse government performs, the more citizens demand greater government intervention. The authors' explanation for this curious finding is that in societies where people distrust large institutions--whether government or big business--the demand for more regulation and for more government is higher, even when government is incompetent or downright corrupt.

I don't think their summary of "Regulation and Distrust" is quite right; unless I'm mistaken, the paper doesn't even measure government performance.  The paper also seems to take a rational choice interpretation of the pattern; I'm predictably more sympathetic to the irrational voter story that Eggers and O'Leary seem to be suggesting.  Regardless, though, I'm willing to buy the general point that economic freedom and trust go together. 

Still, this pattern is open to an array of other interpretations.  In the GSS, confidence in e.g. government and business has a strong positive correlation (though almost no correlation at all with trusting other people).  Maybe optimism causes both trust in government and support for free markets?  Could free markets work so well that they cause trust?  Could trustworthiness lead to both trust in government and lower perceived need for government?

Ideas?  Feedback from readers from big-government/low trust societies is especially welcome.


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COMMENTS (25 to date)
MAtt writes:

Maybe people who naturally demand big government get big government. Thus the big government breeds corruption and therefore people who have big government and want it also learn to distrust big government, but think they can get the only good politicians in charge.

David N. Welton writes:

In Italy, people are certainly distrustful of the government, but also of pretty much everything. Also, while they may distrust the government, they're certainly going to push to get their 'fair share' of the spoils as well, which doesn't tend to push for a smaller state. For instance, the previous center-left government pushed for various, relatively minor liberalizations, such as allowing some supermarkets to have a pharmacy (although nothing so drastic as to simply let supermarkets sell over the counter medicines), and there was a big ruckus, where all the interested parties brayed mightily about what a mess it would cause.

The current, center-right government has of course not really bothered at all with any significant liberalizations.

So I think it's more that people think of the government as corrupt, but something they want on their side for the benefits it will bring.

And of course there is also a significant portion of the population that sees how well many countries further north work, and want something like those models for Italy.

Feel free to drop me an email if you'd like to hear more; I could probably go on for hours.

There's a very nice book called 'Il liberismo e` di sinistra' ("Liberalism is on the Left", very roughly) by Alesina and Giavazzi which nicely critiques some of the broken thinking of the Italian left, and takes a few digs at the various Berlusconi governments which have never done much in terms of reforms either.

http://www.ibs.it/code/9788842814580/alesina-alberto/liberismo-e-sinistra.html

Doc Merlin writes:

"Could free markets work so well that they cause trust? Could trustworthiness lead to both trust in government and lower perceived need for government?"

Yes actually. The experimental economists have shown that free-er markets cause trust.

In a free market you are making deals of trust with strangers. In a corrupt system you cannot trust strangers, but people feel they know how certain politicians and government types will behave. So, they will trust them to be themselves (better the devil you know). Thus corruption leads to lack of trust, which leads to less free markets which leads to more corruption.

agnostic writes:

The mistake here is assuming that the average person equates "business and industry" or "major companies" (as the GSS questions refer to them) with "free markets."

The public has no idea what the free market is. They are thinking about individuals (Bill Gates) or organizations of individuals (Wal-Mart) rather than the abstract process of buyer and sellers striking mutually beneficial exchanges.

Our brain is adapted to a pre-market economy era, to what North, Wallis, & Weingast would call a "natural state." From the dawn of agriculture until there were free markets in the middle of the 19th C., "business and industry" really was just another faction among the dominant coalition, along with the military, the clergy, politicians, royalty, etc.

So people's trust in one organization moves together with their trust in another because to them they're all just factions of a dominant coalition. If the dominant coalition seems to be getting along well, great. If one screws up, then the dominant coalition isn't doing a good job at holding itself together, and people freak out like they would have under natural states, fearing some kind of intra-elite civil strife (or war).

If freer markets engendered greater trust with a short time lag, I don't think we would've seen a global turning-inward and antipathy toward free markets for the 30 years between WWI and WWII, which followed an explosion in freeing up markets during the 19th C.

However, there is a mechanism whereby free markets produce greater trust with a longer time lag -- by genetic natural selection. You can't thrive in such an environment if you aren't basically trusting and trustworthy. Differences in these traits are associated with differences in genes. So the free market will tend to select out low-trust and untrustworthy people.

The only question is how fast, and does it fully weed them out (probably not). But the basic story sounds right.

John Humphreys writes:

The answer is key to my criticism of your general theory... you need to more fully understand why the political ignorati have a preference for dumb political ideas.

I suggest that evolutionary psychology can explain why humans have a preference for conservativism, control and being scared.

It is very difficult for a controlled, scared and conservative person to conceive of the idea of an uncontrolled, chaotic and unfamiliar system of "free markets & free society". They assume it's dangerous.

So as government grows, big government becomes the status quo and markets seem even more different, dangerous and risky. This effect trumps any distrust people have of government, and leads people to the French-statist solution to bad government (find "better" politicians), rather than the Scottish-liberal solution (reduce size of government).

Perhaps after we have 500 years of bad government people will lose faith in the "but if we just try it once more with meaning, it has to work" bullshit. Until then, the French interpretation of the enlightenment is winning out. :(

The only solution is jurisdictional competition.

Kurbla writes:

I think that hate toward government is the result of hard wired emotions: people feel the hate toward leaders. Evolutionary purpose of that is obvious: they want to become new leaders. However, people are not born with such knowledge, just like they are not born with knowledge about evolutionary purpose of sexual desire.

Majority of people rationalize their hate on the way they dislike leaders policies, or their parties. Libertarians (or classical liberals, or anarchocommunists) rationalize their hate on a slightly different way - you dislike institution.

I also think that today, the origin of hate toward wealthy people is mostly the same.

Of course, political theories are heavily used as rationalizations, it doesn't mean that theories are necessarily false. There is some signal in all that noise.

chipotle writes:

Professor Caplan,

If you want to understand why People X thinks certain way about Issue Y, you're going to have to delve into Intellectual History, Political Development and (GASP!) Culture Studies. You've already paid attention to the other hyper-important areas of economics, psychology, and (for lack of a better term) bureaucracy.

Start here.

roo writes:

road to serfdom

Ano writes:

Maybe corruption is highly correlated across institutions. If this were the case, a corrupt government would usually exist side-by-side with corrupt companies and community leaders (think mafia or warlords). People, then, might want more government to protect them from corrupt community leaders and companies, even if the government is corrupt or ineffective, because at least they exert some control over their lame MPs.

Nicholas Weininger writes:

It may also be that the Italians think they are stuck in a local optimum, where any incremental movement would make things worse, and the sort of large movement that would lead them to the higher hill in the distance is just inconceivable.

In this they may not be as wrong as we'd like to think, given the checkered history of so-called "privatization" and "liberalization" programs in the past twenty years. Would that we could save economic freedom from its professed friends.

Scott Sumner writes:

After 1980 high trust societies moved much more rapidly in the direction of free market reforms than low trust societies.

NZ writes:

I haven't read all the other comments, so pardon me if I'm repeating somebody.

I wonder if the explanation is in the wording of the question:

"Do you trust government?" is a lot different from "Do you trust this government?"

Perhaps a lot of people take for granted that the government here and now is corrupt. "They're only human, after all." But maybe they also believe that it's possible for a government, someday, to be pure and benevolent and good. That is basically the premise of Obama's book "The Audacity of Hope": "Politics is a messy, corrupt game full of mean, corrupt people...but I'm different and I think I can make politics different," and it seems to me a lot of people buy this message. "Hope," after all, was a major tenet of at least three presidential candidates' slogans in 2008.

Another possibility is that people (mistakenly, in my opinion) see government as something more than just an organization. Perhaps they see it as a kind of meta-institution; a glue that holds society together, and without which markets have no basis, and civilization would crumble into post-apocalyptic mayhem. (This might explain why people mistakenly equate anarchy with chaos.) So, while you can question the here-and-now decisions of the government, second-guessing the legitimacy of government as a whole is tantamount to anti-social mischief-mongering.

The third possibility I can come up with is that people suffer from an inability to accurately trace the causality of government failures. In the public view, when the market messes up, it's proof that the market doesn't work. When the government messes up, it's a sign that the government is suffering from too much similarity to markets (which would explain a lot of the uproar about the CU ruling).

Adriano writes:

I'm said to be ITALIAN!!!
I'm libertarian and we (with other italian libertarians) always think about that, even without getting a conclusion!!

My (not strong) opinion is that italian think:
1 "these" politicians are bastard, but not the "state"
2 politics sucks but, everyone try to get benefit before than others
3 politics sucks but, everyone try to get benefit in the short term
4 what could we do? disobeying is costly. Same reason why we accept maphia

Snorri Godhi writes:

Let me add the perspective of somebody who grew up in Southern Italy.
As far as I remember, I grew up with the intuitive notion that the sole purpose of government is the protection of life, liberty, and private property. However, when I started finding out about Italian corruption, it never occurred to me that the less government there is, the smaller the scope for corruption. Part of that was rational irrationality, I suppose; but there was more than that:

* I had no idea how the "amount" of government in Italy compares to that in other democracies.

* At the time, corruption was being exposed mostly by the "left-wing" press, to general indifference; ergo, if you wanted to vote against corruption, you should have voted for the "left" (or for the fascists, hardly less statist).

* The communist party used to run quite efficient local government in parts of Northern Italy.

* The social democracies of Scandinavia, the Netherlands, and to a lesser extent Germany were and are widely admired, rightly or not, for better government, not for less government. (Although in fact they have less regulation than Italy does.)

Finally, I note that the Italian fallacy, that corruption can be fought with more government, is no more delusional than the American "liberal" fallacy, that liberty can be achieved with more government.

Rubin writes:

A couple of French researchers (a sociologist and an economist, I believe) issued an amazing paper about low-trust societies a few years ago. Unfortunately, the only version I have of the paper is in French. It's called "A society of mistrust" (La société de défiance).

It can be derived from that amazing body of work that low-trust societies, usually because of historical trauma, feel the need for a "trust third party" to intervene in the daily dealings between their members, and this is what allow for big government to initially develop in those societies.

From that moment on, it's just a vicious circle: big government is tougher to govern than small government, and therefore makes more mistakes, which reduces its trustworthiness and, in turn, the amount of trust in the already low-trust society, which creates even more need for big government.

This is why many people in France, Italy and other countries consider the American system as a "libertarian jungle" in which the individual is left without any protection.

Ocean writes:

I would agree with several of the comments here. Having grown up in Italy as well, I don't think corruption was necessarily equated with "big government".
In fact, we'd figure the corrupt politicians would be finding ways to swindle money regardless, so it made sense to have more rules and regulations. If there were less government oversight they would be free to do as they wished.

It wasn't until I moved to the US that the concept of Libertarianism even entered my mind. I think you need to have a certain level of trust in government to believe that they aren't making back-handed deals with business and organized crime in a laissez-faire environment.

baconbacon writes:

My first guess is that it would be very similar to the "The Myth of the Rational Voter".

Lets say fighting corruption has a high cost, the corrupt person has power and influence and these present serious obstacles, so this seems pretty reasonable. The more corruption there is then means the more expensive it is to fight that corruption as the corrupt person will have more allies who are threatened by your anti corruption campaign as well as fewer powerful and influential allies to aid in fighting the corrupt.

The benefits of fighting corruption are low for the individual as well. If 1 member of the House of Representatives is thrown out in favor of a different candidate due to corruption there is still a chance the new member is, or will become, corrupt. Secondly all political systems use seniority, your new member of the House, or Parliament, or whatever will be among the most junior members and the least powerful. Thirdly the benefits of him fighting corruption are very dispersed, if your junior member discovers and prevents a $30 billion theft of some kind in the United States that would be a large success for him but the benefits of those savings would be ~$100 per citizen- it would barely be noticeable from year to year.

If fighting corruption is high cost and low reward its no wonder that few resources are devoted to it. So why go to a basketball game and root for the Washington Generals? Even more so when all of your friends are Globetrotter fans, you are just better off signaling to everyone that you are a progressive, compassionate voter just like all the others who just wishes that his government would be better.

Colin K writes:

From what I've heard, Italy has relatively high rates of tax evasion and regulatory noncompliance compared to, say, the US, UK, or Denmark.

Matt writes:

Things will start to work once our guys get in charge!

Why do Italians trust government over private institutions despite their cynicism about government actors?

Consider the Sicilian alternative.

Miguel Madeira writes:

You also should remember that many kinds of state regulation (example: minimum wage, unemployment benefits, etc.) are largely impersonal; they are abstract rules who work (or not...) independently of the particular decisions of the rulers (more or less in automatic pilot); then, you can have low trust in rulers and be in favour of these kind of interventions, because the honesty of the rulers it is almost irrelevant to the effects of these rules.

A related point - for many people, "the government who governs least" is not the government with less taxes, regulations, etc.; it is the government who makes less decisions. Then, after the moment that the regulatory machine is established, distrust by government could lead to a preference for a government that don't do nothing and don't change anything (in other words, for an interventionist government), while a reformist, libertarian government will raise suspictions that it is working to advance some obscure interests.

Finally, I wonder if the different meaning of "government" could affect the reliability of these kind of international comparisions - in Europe, "government" means the prime-minister and the ministers; I think that in US it means all administrative machine of the state

Mark writes:

I can't believe people think this is a paradox. Given that there are numerous examples of big, social democracy style governments that work pretty darn well, why should we be surprised when people who have corrupt, ineffectual governments ask to have a reasonably non-corrupt western-european style government instead?

You can rail all you want against the evils of, say, the Dutch or French or Swedish government, but I don't see how you can be surprised when someone who lives in a more corrupt state says they'd prefer a less corrupt one.

Snorri Godhi writes:

Mark:
Given that there are numerous examples of big, social democracy style governments that work pretty darn well

May I ask whether you live in one of them? if not [a] why don't you move? and [b] how do you know that they work pretty darn well?

why should we be surprised when people who have corrupt, ineffectual governments ask to have a reasonably non-corrupt western-european style government instead?

We don't.

I don't see how you can be surprised when someone who lives in a more corrupt state says they'd prefer a less corrupt one.

Again, we are not surprised that people want better government and less corruption. We are surprised that people want MORE government; especially when they already have more government than the social democracies you admire.

The big question is what *causes* trust or distrust. Is this entirely arbitrary, strongly correlated with objectively measured levels of corruption and effectiveness, or caused by something entirely different?

Italians are not libertarians because they mostly suffer from "cognitive dissonance". Read at Cognitive dissonance: the case of Italy.
Reasoning is often affected by a number of fallacies and hardly focused. Try to follow a debate on television and you will realize that. Facts and numbers become opinions.
Moreover the country is somehow regulated by the The Fundamental Laws of Human Stupidity described by professor Cipolla and outlined at Italy and the Fundamental Laws of Human Stupidity.

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