Arnold Kling  

Living in Bubbles

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David Warsh writes,


I expect the Democrats to dominate this election (and probably the next), the Tea Party to slowly shrink, the caucus of Republican pragmatists to grow, until one day the GOP credibly offers to take over and improve stewardship of what the innovators have accomplished, and, with that desirable "pause on the last movement," the cycle to go forward as before.

Warsh lives in Boston. On Friday, I had a conversation with a Republican hill staffer who believes that the "fiscal cliff" will be avoided because the Democrats will lose so badly that their members in the lame duck Congress will go meekly along with Republican proposals.

At least one of these folks is living in a bubble.

Larry Summers writes,


for the next three decades it will confront the reality that major structural changes in the economy will compel an increase in the public sector's fraction of the total economy unless there is a substantial scaling down in the functions that the federal government has long performed. How government can best prepare for the pressures that will come, and how greater revenues can be mobilised without damaging the economy, are the great economic questions for the next generation.

Progressives believe that they are and always have been on the right side of history. They embody a sort of Hegelian world spirit of moral wisdom, and their opponents can stand in the way only temporarily. This world spirit today is calling for green energy, government provision of health care, and higher taxes, among other things. In the past, it called for abolition of slavery, women's equality, civil rights, and Social Security. (It also called for Prohibition, eugenics, and wage-price controls, but we need not dwell on those experiments.)

What if we have reached a point where the scale and scope of government have become absurdly large? What you would observe is a growing gap between the theories used to justify government expansion and its practical impact. You would observe the cost of education and health care rising, without commensurate benefits. You would observe stimulus programs that increase employment according to computer models but not in reality. You would observe crony capitalism. You would observe budgets distorted by public-sector unions. You would observe fraudulent accounting that shifts costs for pensions onto future generations.

The progressives may or may not be the ones living in a political bubble. But in their view of an ever-expanding central government as an instrument of the world-historical moral spirit, what if they are mistaken?


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The author at Samizdata.net in a related article titled Samizdata quote of the day writes:
    "What if we have reached a point where the scale and scope of government have become absurdly large? What you would observe is a growing gap between the theories used to justify government expansion and its practical impact. You would observe the cost ... [Tracked on August 21, 2012 9:28 AM]
COMMENTS (22 to date)
They embody a sort of Hegelian world spirit of moral wisdom ... calling for green energy, government provision of health care, and higher taxes, among other things. In the past, it called for abolition of slavery, women's equality, civil rights, and Social Security. (It also called for Prohibition, eugenics, and wage-price controls ... )

Some disassembly is required. In the 1830s, it was Herbert Spencer and other liberals (free market liberals) who advocated for universal suffrage, at least based on the tax rate, rather than age and gender. Rights for women also began at this time, with women who held property in their own name able to vote locally in the UK and also in Kentucky, among other places.

Social security, eugenics, prohibition, and price controls are entirely different from that.

Marketing teaches that labels, branding, and collateral are often more important than the goods and services themselves. The word "fascist" has such a nasty ring to it today, but in 1916, the Bureau of the Mint of the US Treasury put the fasces on the reverse of the 10-cent dime coin. If you compare the reverse of a US quarter dollar from 1932 (our "Washington" quarter) with the obverse of a German 50-pfennig or half mark from the same period, the vocabulary of image, the semata are strikingly similar, only that their eagle clutched a swastika and ours still holds a sheaf of arrows.

Interestingly enough, liberals of the old school, as libertarians today, lack many such logos. (The dollar sign of the Objectivists might be durable for in-group recognition, but it carries no positive image with the public.) It is the burden of individualism that it lacks mass appeal.

RPLong writes:

Brilliant post.

Alas, they can never be mistaken because their "theories" are non-falsifiable.

8 writes:

In the short-term of the next 5 years, the left is deeper in the bubble, they still seem to think the debt problem is a Republican plot—and it doesn't even require complex math to understand. They may never (choose to) understand it and blame the Republicans, no matter who is in charge, when the lights go out. Both right and left establishments are in a bubble though, on private debt and the global standing/relative power status of the U.S. Choosing Republican or Democrat is a bit like being asked to "choose the form of the Destructor." Only in this case, the form of the scapegoat.

Jeff writes:
(It also called for Prohibition, eugenics, and wage-price controls, but we need not dwell on those experiments.)

You left socialism off that list. When you consider the 20th centuries' many disastrous experiments in collectivized farming and centrally-planned economies, the progressives' track record starts to look decidedly, well....less impressive, let's say.

David R. Henderson writes:

Arnold,
I’m confused. Are you saying that the world spirit called for abolition of slavery or that the progressives did? My understanding is that the progressives didn’t exist when U.S. slavery was ended.

Yancey Ward writes:

Warsh is definitely in a bubble with regards to November. No doubts about that.

The Republican staffer is likely to be in one, too, since I still give Obama about a 50% chance of winning the presidency, though the Republicans will easily hold the House, and have a good chance to pick up seats in the Senate, even with the potential debacle in Missouri.

I really liked Summers essay yesterday in that it describes the depth of the problem. The US government and the state and local governments are increasingly devoting their resources to the cash and in-kind transfers, and these are slowly cannibalizing the other functions that Summers claims must also get more spending in the future. I think something must give in the transfers for that to happen. Can one even imagine what it would cost today to build the interstate highway system in the US? I think government is doing less and less infrastructure because it simply can't accomplish very much that gets wide voter approval, and this explains why more and more resources are devoted to direct vote buying.

R Richard Schweitzer writes:

What ultimately transpires as governments become absurdly large (and intrusive) to the point of fiscal and administrative obesity are movements for "world" or "Supra" governments; things like the E U; subordination to international (usually unelected) authorities.

That's a bigger "bubble." It can hold a lot of social aspirations that will remain unfulfilled.

Lord writes:

Ah, Nixon, that paragon of liberalism. Crony capitalism? That has been around at least as long as capitalism and will continue until its end. More government is something we like when we are wealthier which is why it has been in a long term upward trend.

Everyone wants to be taller, more attractive, wealthy, and to pay less taxes. The question is what you are willing to do to attain them. Cutting everyone else's spending is not one of them. Only when enough people are willing to cut their own can we see room for change. Conservatives want to cut spending but don't even know enough what that means to claim they want less government, because in terms of spending they really don't. For that reason, in the near term, conservatives are in a bubble. Until they know what it is going to cost them and be willing to give that up, they are merely deluding themselves. Longer term if we don't see more economic progress, we probably will see less desire for government

Various writes:

I couldn't agree with you more. I think one of the large causes of what I perceive to be a distorted liberal world view is that many liberals are driving with their eyes fixated on the rear view mirror. This is a common tendency of many if not most of the population. But "Past investment performance isn't necessarily a good proxy for future results" as the saying goes. The United States federal government has been a driver of many tremendous accomplishments, including ridding the country of the horrible institution slavery by an act of war, womens rights, fighting and defeating Nazi Germany, civil rights, etc. But any noble institution can and likely will be corrupted over time if it is given monopolistic or oligopolistic powers (i.e., little oversight and competition). Democratic mechanisms in the form of the ballot box are not necessarily sufficient to prevent such corruption.

a Racoon writes:

Libertarians believe that being "right" is more important than being relevant. The gap we face is between goofy cult and public respectability (meaning, 5% of the popular vote and consequent federal election funding).

Why not abandon the name, (but maintain the creed as a personal philosophy) and advocate that great American tradition, Federalism? Our founders architecture was magnificent, designed so that "the Jealousy of all Parties combating each other would inevitably produce a perfect Freedom for each particular Party." A libertarian paradise, no?

Federalism has a popular story to tell, with reference to exceptionalist tradition and to popular Americans (not to odd Russians, academic Austrian immigrants and the Reason drug & prostitute crowd). Federalism opposes an enemy hated by most: 70% of Americans are not Republicans and 70% of are not Democrats.

Build the story around that existing hate: Two Parties have slowly overcome that "a Nursery of Animosity, Dissention and Disorder" lovingly created by Washington, Ben Franklin, and Thomas Jefferson and paid for by the blood of the heroes of 1776. (I know, a bit histrionic, but it can be modulated to audience). Nail these theses to a door:

  • The Parties have infiltrated each "separated" power of our government with Party apparatchiks whose primary loyalty is to the Party and its existence.

  • They have remade public offices held by Lincoln, FDR, and JFK into dens of simony, nepotism and ATMs for their constituents.

  • The Parties are so consumed by their survival, they have abandoned the Federal government's most sacred duty: protect individuals against the very government now suborned to Party venality.

  • Party apparatchiks have surrendered the states' plenary powers to Party Leadership in Washington, they have stolen power from local governments, the last refuge of ordinary citizen legislators.

  • The courts, final champions of the ordinary citizen, have been infiltrated by Party apparatchiks who serve Party first.

Let's restore the earlier times, when citizens rallied to single issues, both national like abolition, silver money, isolation and local like using tax dollars for a new school, a new hospital or that poor house. Once resolved, disaffiliate until the new issue arises.

Cryptomys writes:

So, who is going to win the election?

Or will it be a mixed result, with Obama being reelected and the Republicans controlling at least one house of congress?

RPLong writes:

Racoon -

Although this remark sort of panders to the goofy cult thing, a lot of us libertarians consider ourselves anti-federalists as opposed to federalists. This could maybe explain why your very good suggestion will probably not make much headway among most libertarians.

Having said that, I very much appreciate the gist of what you're saying.

roystgnr writes:

RPLong, could you explain your terms? "a Raccoon" seemed to be contrasting federalist to centralist government; however your use of the term "anti-federalist" could either be contrasting RPLong (i.e. pro-centralist) or echoing the original anti-federalists (i.e. even-more-pro-decentralization).

Either position could be compatible with libertarianism, even; many libertarians see federalism (or decentralization or centralization) as a means to an end - if you think that the median voter is pro-liberty then centralization sounds like a good way to prevent the creation of anti-liberty localities; if you think that some anti-liberty laws are inevitable then decentralization sounds like a good way to allow people to escape them.

Matt C writes:

The idea that a Republican sweep would cause us to *avoid* the fiscal cliff is one that really seems like the product of hallucinogen abuse to me.

We have seen what happens when the Rs rule the roost, and it is not pretty. Obama has kept us on our current fiscally disastrous path, but he's not the one who got us on it in the first place.

I do not see anything from Romney to suggest he is anything other than a centrist (in the modern big government sense) in some hastily borrowed conservative clothes.

If you look at Ryan's voting record--as opposed to his press releases--he is just a Bush II big government conservative.

Four more years of Obama, or an attempt to return to GB II, that's our choice this time around.

My guess (not paying much attention though) is Obama keeps the presidency and the Republicans keep Congress. I'm hoping for this actually, as it seems like the least destructive outcome.

jc writes:

Who will win the election? Let me consult my Magic 8 Ball.

The Winner Will Be...

RPLong writes:

roystgnr -

I meant "anti-federalism" in the Jeffersonian sense of the term.

I disagree with the idea that centralization is a viable means to a libertarian end. This is one of many things that puts me at odds with the an-cap crowd, for example. In my mind, Simon Bolivar proved conclusively that you can't create a libertarian government via centralization. The Hoppes of the world can enterain the idea of libertarian philosopher-kings, but to me, decentralization is the only way to go.

R Richard Schweitzer writes:

@ Various (above):

You write:

"The United States federal government has been a driver of many tremendous accomplishments, including ridding the country of the horrible institution slavery by an act of war, womens rights, fighting and defeating Nazi Germany, civil rights, etc."
[emphasis added]

That is an absolute fallacy. People, ordinary, blood-shedding people, did those things; often despite the organizational and institutional framework of the federal government. Up to Gettysburg, the composition of the federal government was disposed to a "negotiated" peace with the seceeding states without resolution of slavery; women were imprisoned by governments for seeking rights to vote;public rage, not polical determinations, gave us the force to win in Europe and Asia. What did federal government do in Vietnam without the people?

Governments are nothing but mechanisms. As their operations become institutionalized with objectives and means determined by those assigned operational functions, they stagnate and carry a permitting electorate down as well.

Steve Z writes:
Progressives believe that they are and always have been on the right side of history. They embody a sort of Hegelian world spirit of moral wisdom, and their opponents can stand in the way only temporarily.

Nice of you to cite Hegel rather than Marx, although both would be apropos.

Then, as now, Popper's "The Poverty of Historicism" ought to be required reading. If we don't learn from the past, we are bound to recapitulate its flawed historiography.

Various writes:

R Richard Schweitzer, I agree with the comments in your first paragraph, and perhaps my comment wasn't structured very clearly. Specifically, I acknowledge that the Federal government during the Civil War was not the same institution that it is today, and that much of the changes I cited were the result of public action. Nevertheless, I believe the U.S. Federal government had a meaningful role to play in a significant number of our nation's seminal events that were beneficial to the populace.

I also agree with much of your second paragraph. But my other point is that the government's decreasing efficacy over time is being glossed over by a large segment of the voting public because that segment places too much emphasis on the government's past accomplishments. This is an easy trap for any person to fall into who takes shortcuts in diligencing decisions. Many folks, myself included, sometimes look to signaling, pedigree and other less than highly accurate criteria when making decisions. For example, I may be a 1972 Harvard MBA, but does that mean I have my act together today? Similarly, our government may have done some noble deeds in the past, but does it have the same intentions today?

dry creek boy writes:

The question your post ends with is the sort of thing Walter Russell Mead is hammering on full-time now. He's someone with a lot of progressive sympathies who's thinking outside the bubble.

R Richard Schweitzer writes:

A very considerate response.

While finishing 88 years in the next few weeks, I suppose my prejudices against certan concepts of "government" will not be cured.

What you note about the "decreasing efficacy" of actions through the mechanisms of governments (at the various levels)is probably largely attributable to an "overloading" of the mechanism with more functions than the fundamental structure of the social order can sustain.

We see an example of that in the such things as the functions accreted to "schools." They are now to build "character," to imbue social awareness, to improve physical health, to substitute for functions of parenting - all of which reduces the effectiveness of the primary purpose of the facility; to-wit, to provide for learning through instruction and guidance. Too much is expected from the specific originatiing purpose of the facility.

The same occurs when the functions of the military are diverted to other objectives; the police to social matters, etc.

The facilities, be they schools, county commissions, states, or the federal government. are means, only means, for human actions in their cooperation for their existence in the social order; they are not the acting force.

Normative Libertarianism is framed by the impacts of the functions of governments on Liberty and thus to limit those impacts by limiting those functions.

stuhlmann writes:

"(It also called for Prohibition, eugenics, and wage-price controls, but we need not dwell on those experiments.)"

According to Wikipedia, "Prohibition was a major reform movement from the 1840s into the 1920s, and was sponsored by evangelical Protestant churches, especially the Methodists, Baptists, Presbyterians, Disciples and Congregationalists. "

Evangelical Protestants are normally associated with the Holy Spirit, not "the World Spirit", so maybe Prohibition should not be laid at the feet of Progessives. As for wage-price controls, weren't they tried by that arch-Progressive, Richard M. Nixon?

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