EconLog
Bryan Caplan, David Henderson, and Arnold
Kling

Steinbrenner U.

Arnold Kling

Inside Higher Ed reports,


A small number of colleges have become much more competitive over recent decades, according to Caroline M. Hoxby, an economist at Stanford University. But her study -- published by the National Bureau of Economic Research -- finds that as many as half of colleges have become substantially less competitive over time.

Tyler Cowen finds a link to the new paper.

I am not sure that I buy Hoxby's explanation for the phenomenon, which is that high school graduates nowadays are willing to travel farther to go to college. I suspect that high school graduates nowadays are the product of assortive mating, and college has become the ultimate status good for their parents. Affluent parents want their children to attend the colleges that the children of other affluent parents attend. This creates a highly skewed equilibrium.

Think of Harvard as like the Yankees. Enough money to buy whatever it needs to be a contender every year. Think of the typical college as like the Orioles or the Blue Jays. If they are fortunate, they can groom a few stars, but they will have too many weaknesses to be able to compete with the Yankees. Harvard's advantages are actually more durable than the Yankees'. One can imagine the O's or the Jays winning it all one of these years. Not so with Rutgers or George Mason.

By the way, in this metaphor, the analogue to Sabathia and Teixeira is not necessarily the faculty (even though you probably think this song is about you). I am thinking more about students. Steinbrenner U has a much larger share of outstanding students than outstanding faculty. If you have a Ph.D and want an academic position where you can encounter highly intelligent colleagues, you can go to any of at least three hundred institutions. But if you want to teach high-ability undergraduates, do not sink below the 40 most selective institutions. And if you want high-potential graduate students, do not sink below the top 10 graduate schools in your field.



As Bryan has mentioned, Monday, November 9 will be the 20th anniversary of the fall of the Berlin Wall. In Chapter 3 of my book, The Joy of Freedom: An Economist's Odyssey, I tell that story and integrate it with my recollections of explaining my excitement back then to my 4-year-old daughter, Karen.

I wrote most of the book between 1998 and 2001 and, for the passage about Karen, went from memory. But a year ago, while cleaning out stuff in my home office, I found a diary I kept occasionally about Karen when she was younger. I had written this passage on November 29, 1989, when my memory of what had happened earlier that month was much fresher. Here it is:

On Friday morning, November 10, I came into Karen's room while Rena [my wife] was waking her up and told her [Rena] all excitedly about the Berlin Wall coming down.

A couple of days later, when the new Newsweek came out with a cover story on the Wall, I decided to try to explain to her [Karen] what was going on. It was one of those significant events I really wanted her to understand, and I thought I could do so without prejudicing her but simply by telling her the facts.

I told her that the Wall was built to prevent people from leaving a certain area and that it was built when I was a young kid. If people tried to climb over it without permission, I told her, the men who built it shot them and tried to kill them. "That's not nice," said Karen. "That's rude."

But, I told her, the people who built it decided that it was wrong to stop people from leaving. And now I'm excited, I said, because they can leave. Then I showed my excitement. I said, "Now they can do things that they've always wanted to do like, like . . ." "Go to Disneyland!" said Karen. "That's right," I said. "And they can go to stores and buy neat things they haven't been able to buy like . . ." "Candy!" shouted Karen excitedly. "That's right!" I said. "Oh, boy!" [My notes don't make clear who said "Oh, boy!"] We got all excited together.

I think the two things she focused on are things that the Berliners really would think of first. (The media reported a few days later that the candy shops in West Berlin had sold out.) And by putting it in her terms, Karen understood a lot of the excitement and importance of the event.

CATEGORIES: Regulation , Trade Barriers


If all goes well this link will take you to an article (with cool charts!) where I make an empirical case for telling the Recalculation story rather than pretending that we have the same economy that existed in the 1930's when John Maynard Keynes developed his model.

I'm scheduling this post to appear on Saturday, when the article itself is scheduled to appear. I hope that the link is correct.



Book Update

Arnold Kling

It looks like I will have two books come out in the same month. The first one will be out in two weeks, but you cannot pre-order it on Amazon. The second one will be out in three weeks, and you can pre-order the book, called Unchecked and Unbalanced, now.

I think it will particularly interest those of you who have been following my arguments in favor of competitive government and against democracy. The book spells out those arguments and proposes ways to shift more decisions on "public goods" to markets.



After Singapore's Law Minister used my article in Ethos to rebut international criticism, Singapore's Online Citizen asked permission to run a longer version of "Two Paradoxes of Singaporean Political Economy."  Reactions were... mixed.  Several readers backed me up:
I would say that resignation explains the paradox of Singapore's political economy. Even the supposedly "rebellious" SDP are more or less jogging on the spot. Opposition politics is a broken record in a Singapore. This actually shows the Opposition Parties' lack of energy in vision.

People, we only have ourselves to blame for the current situation.

Why get upset and work out over an article. We should not blame the writer but 66 pct of Singaporean that make it happened.

Most readers, however, were not happy campers.  One common complaint is that I am just repeating the propaganda of the civil servants I met:

Through his own admission, his views were mainly based upon the inputs given to him by the 80% of his time spent with top civil servants. These civil servants, as Singaporeans know, are either secret PAP members, pro-PAP, pro-government (which cannot be otherwise because they are working for the govt and their paymaster is the govt), pro-establishment, under bondage, relatives of those PAP members in power, or beholden one way or another to at least one of the people in power, or a by character balls-carriers and sycophants. Most important of all, these civil servants have not experience the sufferings and problems Singaporean commoners and opposition politicians have been suffering.

My response:

1. While I did spent a lot of time talking to civil servants, they were happy to distinguish between their own views and the broader public's.  When I tested their claims against the available Singaporean public opinion data, they held up.  The data show that that Singaporean "commoners" are very satisfied, not "suffering."

2. The civil servants I met in Singapore were much more willing to criticize their government and entertain contrarian views than they would be in the U.S.

Other readers accused me of ignoring important undemocratic features of Singaporean politics.  Highlights:
[T]he PAP has created a thought-control system that Goebbels would be proud of. By controlling the media and most forms of input, the PAP can shape the thoughts of the young. This is manifested through simple things like singing national day songs, equating Singapore with the PAP and the muzzling of dissenting views.
My reply: Even if Singapore used to have a Nazi-level system of thought-control (and it certainly didn't), the internet has destroyed it.  It is now easy for Singaporeans to hear and voice anti-PAP views.  But this doesn't seem to have made a dent in the PAP's dominance.  So how important could this thought control have been in the place?
A Singaporean's sole loyalty is to himself. So, he votes for the party that he thinks can secure his personal survival and prosperity. He has no regard for what is good for his neighbor or for his country.
My reply: Even if Singaporean voters are selfish (which I doubt), there's nothing undemocratic about selfish voting, and little reason to think that selfish voting leads to bad outcomes.

Here's the single strongest list of my sins of omission, with my replies interspersed:

1.) GRC system (number 1 offender), gerrymandering and last minute redrawing of boundaries, very few days given for political rallies and host of minor things that is detrimental to opposition getting votes.

True, but in many other countries, far more severe electoral disadvantages fail to keep the opposition from winning elections.  What's different about Singapore?

2.) Total control of Mass Media, such that PAP is always portrayed positively and opposition portrayed negatively.

If the Mass Media is so biased and out of touch, why don't Singaporeans just switch to the web?

3.) Control of many companies providing essential services. Being the largest employer means voters working for the government and PAP will hesitate to rock their rice bowl.

Fair enough.  But if these companies are ripping off the rest of Singapore to buy their workers' votes, why don't the victims prefer the opposition?

4.) Intimidation of opposition and supporters, using ISA laws to unfairly detain people of credibility, making them migrate or a fugitive of the law. If ISA is not used, then other things like tax evasion or defamation will be used.

True, but see my reply to #1.

5.) The use of fear. By putting numbers on voting slip, some who wants to vote for opposition are afraid to do so for fear that it would be tracked and they will suffer consequences for it. Also scaring voters to think that if PAP is no longer government, Armageddon will happen the next day or if their constituency is managed by opposition, it will become slums.

I'm skeptical about the first fear.  If I asked random Singaporeans off the record, how many would actually tell me they're afraid of being "tracked"?  The second fear is more credible.  But it's just another way of saying, "Voters believe that the PAP will do a much better job than the opposition."

Meta-question: How should the fact that Singaporeans are even having this conversation affect your evaluation of our arguments?



Arnold Kling on Money

David Henderson

In his post today on money, Arnold writes:

However, as you know, I prefer to think of money as designed top down, to serve the needs of government.

But shouldn't what you "prefer to think" count for literally zero? What if I prefer to think that taxation has no deadweight loss and that the government will spend our money more efficiently than we would? Shouldn't people object that my preferences about x have nothing to do with what's true about x?

A better way to pursue truth on an historical issue is to check the history.

CATEGORIES: Money


George Selgin writes,


Economists generally take for granted, if only tacitly, a teleological view of money's historical development, according to which it first takes the "primitive" form of mundane commodities such as cowrie shells and cacao seeds, and then advances through various stages, culminating in the national fiat monies most economies rely upon today.

Money, Markets, and Sovereignty offers a spirited rebuttal to this naively "whiggish" perspective. Instead, its authors -- Benn Steil and Manuel Hinds, senior and former fellows, respectively, of the Council on Foreign Relations -- argue that the principal effect of national monies consists, not in their contribution to economic prosperity, but in their capacity to assist national governments in their efforts "to extract wealth from their population and to exercise political control over them."

In some ways, it is appealing to think of money as an emergent phenomenon, arising to serve the needs of market exchange. However, as you know, I prefer to think of money as designed top down, to serve the needs of government. The warlord wants to write a contract with soldiers, promising them booty in exchange for service. That contract takes the form of coins. Initially, those coins can be used by soldiers to claim their share of booty from the warlord. However, because they are accepted by the warlord, they are also accepted by other people within the warlord's jurisdiction, so that they circulate as money.

Evidently, there is some overlap between my views and the views of the book that Selgin is reviewing. Thanks to Don Boudreaux for the pointer.

CATEGORIES: Economic History , Money


Two Links

Arnold Kling

Both feature Tyler Cowen.

Here (or perhaps you should start here), he talks about stories. It is classic Tyler, playing cat and mouse games with your head. Basically, he is saying that stories have an advantage in that they serve as a filter for viewing the world, making them very economical in terms of memory and understanding. However, they have a disadvantage in that they serve as a filter for viewing the world, which means that they filter out information that might help us see reality with fewer biases. But watch it yourself. It's funny and insightful, and well worth your time.

On a completely different note, also worth your time is Steven Randy Waldman's account of a meeting between bloggers and Treasury officials.


Tyler is a master at synthesizing diverse strands. At a certain point, he took control of the meeting, and teased out what was common to our often conflicting comments -- skepticism that unsustainable aspects of the financial system that preceded the crisis were actually being changed, a sense that problems were being papered over or accommodated rather than solved.

I was not invited to the meeting. Although I would have enjoyed it, my sense is that I would have added little or no value at the margin. My sense is that the meeting served to underline the differences between insiders and outsiders. The bloggers represent outsiders who, regardless of ideology, are skeptical of the ability of regulators to supervise large institutions.

Our view is best expressed by Baseline Scenario's Simon Johnson and James Kwak, who apparently were not at the meeting in person although were likely represented in spirit. That is, regardless of the intentions of regulators, when financial institutions are large, they become politically powerful. It is a variation on the cliche that if you owe the bank one dollar, the bank controls you, but if you owe the bank a million dollars, you control the bank. Small institutions can be controlled by regulators. With large institutions, the control shifts in the other direction.

Naturally, the officials in the regulatory community are less likely to see things that way. They are more likely to overestimate both their own ability to regulate large financial institutions and the value that those institutions provide to the economy.

Having said that, it could be there are people within Treasury who are quite sympathetic to the outsider point of view. They might have been trying to get that point of view more "air time" within Treasury. Or they might have been trying to bestow some credibility on that point of view by making it known that they were willing to sit down with bloggers.

Steven, who was there, takes a less charitable view, as you can tell from his must-read report. But my guess would be that somebody at Treasury genuinely sympathizes with the outsider point of view and is trying to bring it more into play.



Wisdom Worth Repeating

Arnold Kling

Tyler Cowen repeats a tweet, and I will too. It comes from Masonomist Garett Jones.


Workers mostly build organizational capital, not final output. This explains high productivity per 'worker' during recessions.

This is yet another difference between the labor force today and the labor force of the 1930's. Back then, workers mostly produced final output, not organizational capital.

Yet another reason not to try to apply 1930's Keynes to today's economy. Yet another reason that we could see a jobless recovery persist until profits improve.



The Broward Sherriff's Office is engaging in entrapment operations to catch unlicensed contractors. On this tape, at about the minus 1:45 point, Detective Daniel Belyeu explains that right now many people are desperate for work. His solution? Make them more desperate.

H/T to William Grigg.

CATEGORIES: Regulation


Law and Order's Economics

David Henderson

My student, Mike Williams, sent me the following last night:

I don't know if you watch Law and Order Special Victims Unit but they had a rather frustrating take on the pharmacutical companies tonight.

In the episode one of their witnesses to a crime was suffering from heroin withdrawals. The doctor told the cops that he had to put the witness on methadone to help compensate for the withdrawal symptoms. But, he said, there was a better drug out there that could cure him of his heroin addiction, had side effects that were smaller than methadone, was in pill form (methadone apparently is administrated via IV), etc. Basically it was a wonder drug (can't remember what they called it).

So of course the cops ask the doctor why he is not using it and the doctor explains that the patent for this new drug has run out and since the FDA has not approved it yet no drug company is willing to run it thru the FDA trials to get it certified in the United States because they will not be able to make any money off it. Of course the cops start bad mouthing the "evil" drug companies and their lack of morals.

What I found interesting is no one bad mouthed the FDA: the true culprit in this "crime." I was hoping (yes it was a slight hope but still a hope) that the cops would have discussed the fact that the FDA is keeping the miracle drug off the shelves in the United States thru its arcane regulations and testing requirements. Instead the cops bad mouthed drug companies making profit over helping people out. To take the cop logic to its conclusion (at least from my point of view), I would have loved it if the cops had then looked at themselves and decided that they were making a "profit" off their cop salaries, sat down and calculated out exactly how much they needed to sustain themselves every month, and then decided to return that salary back to the City so that the City could use it to help people out in other ways.

Sir, it always amazes me when people attack profit like it is a bad thing.

Just thought I would let you know economics is not a strong point among the writers of Law and Order.



In The Road to Serfdom, Hayek quoted Trotsky thusly: "Where the sole employer is the State, opposition means deaths by slow starvation."  Libertarians have repeated this line ever since, often without realizing that the source is Trotsky, not Hayek.  It wasn't until today that I checked the context of the quote.  Here is it, straight out of The Revolution Betrayed:
During these years hundreds of Oppositionists, both Russian and foreign, have been shot, or have died of hunger strikes, or have resorted to suicide. Within the last twelve years, the authorities have scores of times announced to the world the final rooting out of the opposition. But during the "purgations" in the last month of 1935 and the first half of 1936, hundreds of thousands of members of the party were again expelled, among them several tens of thousands of "Trotskyists." The most active were immediately arrested and thrown into prisons and concentration camps. As to the rest, Stalin, through Pravda, openly advised the local organs not to give them work. In a country where the sole employer is the state, this means death by slow starvation. The old principle: who does not work shall not eat, has been replaced with a new one: who does not obey shall not eat. Exactly how many Bolsheviks have been expelled, arrested, exiled, exterminated, since 1923, when the era of Bonapartism opened, we shall find out when we go through the archives of Stalin's political police. How many of them remain in the underground will become known when the shipwreck of the bureaucracy begins.
Worth noticing: While Trotsky meant what libertarians think he meant, the man's sheer evil still shines through.  He doesn't mind if the socialist state starves human beings.  He was delighted to wield this power when ran the Red Army.  No, Trotsky is outraged because the Soviet Union is turning its totalitarian might upon fellow Communists.  Was there ever a better time to snark that "Those who live by the sword shall die by the sword"?

CATEGORIES: Economic Philosophy


Alex Tabarrok highlights a post by David Beckworth on the sharp decline in nominal spending in 2008-2009. Alex writes,


We could use some inflation to get back on track. Nominal wages are simply not flexible enough to get the job done in short order

I would caution that lower real wages are only part of the solution to the Recalculation problem. The process also will involve transitions into and out of industries and occupations.

But it certainly would not hurt to reduce real compensation. Some ideas for doing this:

1. Cut the employer contribution to the payroll tax. Bryan first proposed this, and others, including Alex and myself, have pushed it since.

2. Reduce employer-provided health benefits, but not by taxing those benefits. Instead of expanding the government mandate for employer-provided health insurance, the government should mandate cuts in employer-provided health benefits. I am not saying that this is good health care policy (although I could make a case that it is), but it is certainly good recession-fighting policy.

3. Direct stimulus funds toward flexible-wage sectors of the economy. That is, not toward state and local governments. Or else tie state and local stimulus funds to provisions requiring salary freezes at recipient governments. Require state and local governments to use the lowest-cost contractors, rather than go with union contractors.

4. Reduce the leverage of labor unions generally.

Of course, a political party dedicated to increasing labor's share of income (at least for those fortunate enough to have jobs) is not going to enact any of these policies. The friend of labor is the enemy of full employment.



I'm a firm believer that (a) all publicity is good publicity, (b) the more attention my memes get, the better - even if if I get no credit.  And in the past, The New Yorker has done me nothing but good; its review of The Myth of the Rational Voter was more than fair.  Yet despite my lackadaisical standards and pent-up goodwill toward his employer, John Cassidy has managed to aggravate me by calling his New Yorker blog "Rational Irrationality."
 
I coined the phrase "rational irrationality," over a decade ago to capture human beings' tendency to be less irrational when the private cost goes up.  My first publication with "rational irrationality" in the title appeared in 2000 and the concept was central to my 2007 book.  Still, if Cassidy were merely adopting my concept without attribution, I'd consider it a favor: I want my memes to live!

Unfortunately, not only does his usage diverge sharply from mine; he strangely uses "rational irrationality" as a synonym for garden-variety collective action problems:
Unfortunately, the real causes of the crisis are much scarier and less amenable to reform: they have to do with the inner logic of an economy like ours. The root problem is what might be termed "rational irrationality"--behavior that, on the individual level, is perfectly reasonable but that, when aggregated in the marketplace, produces calamity.
My question: If Cassidy needs a sexier name for "collective action problem," what's wrong with "Prisoners' Dilemma" - a phrase that he uses later in the article?  Was it really necessary to mangle my catch phrase?

Update: In the comments, several readers point out some pre-2000 appearances of the phrase "rational irrationality."  Point granted, but these earlier uses were basically dead ends.  When I was first publishing this work, I did my due diligence - and none of these references turned up on google or Jstor.  If Cassidy had done the same, he would have found  lots of references to my work - and avoided needless conceptual confusion.



Armen Alchian

David Henderson

In this month's Featured Article, Fred McChesney pays tribute to the work of Armen Alchian and makes the case that he deserves the Nobel prize in economics. I already knew most of what McChesney writes because, after all, I studied under Armen at UCLA. But one thing I hadn't known until Fred wrote it was that Armen did an event study in the early 1950s, well before the financial economists started doing them, that led him to estimate, correctly, the key ingredients in the hydrogen bomb then being developed.

In my own unpublished tribute to Alchian, I lead with the following:

In 1975, I attended a week-long conference in Hartford,Connecticut at which the star attraction was economist Friedrich Hayek. Hayek had shared the 1974 Nobel prize in economics with Swedish economist Gunnar Myrdal, and he was doing a kind of victory tour of the United States. I told him that I thought Armen Alchian, one of my mentors when I earned my Ph.D. in UCLA's economics program, also deserved the Nobel prize. I asked Hayek what he thought. Hayek gave his characteristic wince, paused, and said, "There are two economists who deserve the Nobel prize because their work is important but won't get it because they didn't do a lot of work: Ronald Coase and Armen Alchian."

Sixteen years later, in 1991, Ronald Coase did win the Nobel prize. When I got the news, I called Armen and told him the story. He got a kick out of it and seemed to have a new hope that he would win. Of course, he didn't.



Book Update

Arnold Kling

The book that Amazon does not want you to read can now be ordered from Barnes and Noble. The cover image is incorrect. The book itself is something that Nick and I are very proud of.



I Optimized

David Henderson

One of the conclusions that emerges from "thinking on the margin," one of the Ten Pillars of Economic Wisdom that I teach my students, is that just as you shouldn't underinvest in something, so also you shouldn't overinvest. In fighting Measure J, the measure on the Pacific Grove ballot that went down to defeat last night, I optimized.

The measure required a two-thirds vote and received 65.23%. Therefore it failed. Because October was the busiest month of my year, I did very little to fight the measure besides helping write the rebuttal in the voter's handbook and going with lawyer Carl Mounteer to make our case to the Monterey County Herald. I didn't do what I normally do, which is write a couple of letters to the editor. Nor did I set up a table in front of the Post Office, one of the things people traditionally do in my town. Nor did I spend money on signs: had I done so, my expenditure in money (excluding time to distribute signs) would have been about 1/4 of the present value of my stream of savings from defeating the tax increase.

This 65 to 35 outcome was a little too close for comfort; my gut feel had been that the final tally would be about 62 to 38. A swing of just 24 votes from No to Yes would have pushed the other way. Next time, I would invest a little more time in making arguments for how to extend library hours without the tax increase. Nevertheless, ex post, I optimized.

CATEGORIES: Cost-benefit Analysis


Scott Sumner's latest deserves comment.

Before I do that, however, I want to say that yesterday I was trying to teach the consequences of paying interest on reserves to my bright high school students. They got, correctly, that paying interest on reserves lowers the money multiplier (it makes banks want to hold more reserves, which lowers the amount of lending they do for a given supply of reserves from the Fed) and is therefore contractionary.

But one student asked, "Doesn't paying interest on reserves increase the deficit, and isn't that expansionary?" My response was to say that this is correct and then to wave my hands and claim that the contractionary monetary effect would be larger than the expansionary fiscal effect. As if I have some empirical basis for that claim.

Several students asked why, if we were in a deep recession, we would have a contractionary monetary policy. I said that in fact the Fed poured lots of reserves into the banking system, and it paid interest on reserves to try to offset some of the expansionary implications of that huge injection of reserves.

But then another student asked, "Why didn't the Fed just raise reserve requirements? It would have been better for the deficit."

At this point, I was cornered. I had no choice but to say what I really believe about what the Fed was doing. In spite of all the sophisticated rhetoric about "quantitative easing" and "new tools for monetary policy," the only way that I can understand what the Fed was doing is to say that the goal was to stimulate bank profits, not the economy. If your goal were to stimulate the economy, you would inject enough reserves to do that and not pay interest on reserves. That might require buying some long-term bonds or mortgage securities, but not the hundreds of billions that the Fed actually bought.

Everything the Fed has been doing over the past fifteen months makes sense if you think of their goal as transferring wealth from taxpayers to banks. If you try to explain it as an attempt to implement an expansionary monetary policy, you won't even get past my high school students.

Now, on to Scott Sumner.


MORE

CATEGORIES: Macroeconomics


R & R

Arnold Kling

Meaning Ken Rogoff and Carmen Reinhart, of course, both of whom appeared on the PBS New Hour November 2 (fast forward to about minute 27), talking about our financial crisis in the context of historical crises. Rogoff's first sentence is about "ignorance and arrogance." By the end, they are talking about prospects for sovereign debt defaults.

Commenters on this blog have said that my worries about U.S. indebtedness are overblown, because other countries also have high indebtedness. From Rogoff's perspective, that is a reason to worry about sovereign debt defaults in other countries, not to be sanguine about our prospects. As always, keep in mind that both R&R and I would count a large unanticipated inflation as a default.

Pointer from Kalpa



Singapore is widely regarded as a dictatorship.  Even the contrarian Gordon Tullock joins in the chorus; in Autocracy, he remarks that, "The dominant form of autocracy has been the non-totalitarian type presented by Franco, Lee of Singapore, or Mobutu of Zaire."  In researching the political economy of Singapore, however, I discovered that these accusations are baseless.  Despite its peculiarities and the near-total dominance of the People's Action Party, Singapore is a democracy.  Legal opposition parties compete regularly in Singapore's free, non-corrupt elections.  They just don't win.

Now that we're on the same page, it's time to play "Truth is Stranger Than Fiction."  Believe it or not, Singaporean Law Minister K. Shanmugam recently relied on my arguments to defend his government at an international conference in New York!
IN CHICAGO, Democratic mayors have won without interruption since 1931. In San Francisco, they have done so since 1964.

And while Democrats have not monopolised the mayor's office in New York City, they have near-PAP dominance of the city council, where they hold 45 out of 48 occupied seats.

'But nobody questions whether there is a democracy in New York,' Law Minister K. Shanmugam said on Wednesday, referring to the frequent questioning of Singapore's democratic credentials given the 50-year dominance of the ruling People's Action Party.

Drawing on arguments by American economist Bryan Caplan in a recent article, he said Singapore was viewed as a deviation from the democratic norm because it was seen primarily as a country.

'This is where most people make a mistake...I have tried to explain that we are different. We are a city. We are not a country,' he told 200 lawyers, many from America, at the New York State Bar Association International Section's meeting here.

Mr M. N. Krishnamani, a panellist and president of the Supreme Court of India Bar Association, asked if it was true that with the ruling PAP in power for some decades now, the opposition was unable to survive or win cases in the courts.

Mr Shanmugam anticipated such a question and came prepared with Dr Caplan's article, published in July. Reading extracts, he told his audience it was the best response he could provide to the question...
As a libertarian, I certainly don't want governments to hide their crimes behind my words.  But truth comes first.  People who call Singapore a dictatorship are factually mistaken, and if the Law Minister of Singapore wants to use my research to correct the record, I do not object.

Still, lest I be mistaken for a PAP apologist, this is a great time to air Singapore's real dirty laundry.  The Singaporean government has many disgraceful policies.  My top picks:

1. Conscription.  Though they laughed at me in Singapore, this is clearly state slavery - and there are plenty of less draconian means to defend the city-state from conquest.  (Like... paying soldiers market wages).  Only a democratic fundamentalist would imagine that the right to vote is more important than the right to say "No" to a job offer.

2. The death penalty for drug trafficking.  Jailing people for capitalist acts between consenting adults is bad enough.  Murdering people for selling intoxicants to willing buyers is sheer barbarism.

3. State ownership.  While Singapore's state-owned companies act surprisingly like capitalist firms, why settle for second-best?  And if you needed further empirical evidence that state ownership undermines personal freedom even if it is "run like a business," take a look at the Straits Times or Singaporean television.

4.  Defamation law.  Letting people sue people who badmouth them is bad enough.  But Singapore takes defamation law to its logical, absurd conclusion: You can't even badmouth government officials unless you can prove that your charges are true.  The problem with these laws isn't that they're undemocratic - after all, Singapore still allows criticism of policies.  The problem is that they violate human freedom.  People should be allowed to say what they like about whoever they like, whether or not they can prove it, and whether or not they're right.

5. Censorship.  The Internet has made Singaporean censorship largely obsolete, but it's still an outrage that you need the government's approval to stage a public performance.

Bottom line: Singapore's critics have plenty of genuine grievances to denounce.  (And under Singaporean law, it's legal to do so - just don't get personal!)  So why do the critics keep complaining about "lack of democracy" when the real story is that most Singaporeans persistently prefer the PAP to the opposition?

CATEGORIES: Political Economy


Return to top
Blogroll (Offsite Links)
OUR REGULAR READING:
Tyler Cowen and Alex Tabarrok
Lynne Kiesling
Russell Roberts and Don Boudreaux
Denis Dutton
Stan Collender, Pete Davis, Andrew Samwick
William Parke
James Hamilton
Greg Mankiw
Robin Hanson
Megan McArdle (Jane Galt)
Will Wilkinson, et al
Scott Sumner
WE TRY TO KEEP UP WITH:
Steve Antler
Stephen Bainbridge
Gary Becker and Richard Posner
Eric Crampton
Brad DeLong
Chris Dillow
(was Catallarchy) Brian Doss, et al
Richard Florida
Nicolai Foss and Peter Klein
The Economist
David Friedman
Peter Gordon
Stephen Karlson
Stephen Kirchner
Edward Lotterman
Virginia Postrel
Greg Ransom
Reason Online
Mark Steckbeck
John Taylor
TCS Online
David Tufte
David Warsh
A FEW MORE:
Greg Blankenship
Kevin Brancato
J. S. Irons
Tim Kane and Bob Litan
Steven Levitt and Stephen Dubner
Kyle Markley
Bob McTeer
Michael Munger
Craig Newmark
Share
Twitter:

Save EconLog to del.icio.us

Technorati links to EconLog: Technorati links
Return to top