Libertarianism and Paternalism

It is clear to me that there is much involved in a system of torts. I do not claim that the many systematic and idiosyncratic determinations that must be made under such a system are easily made or have obvious outcomes. I acknowledge that the very existence of a system of legal protection requires a great deal of value-laden judgment. Of course the rights of both parties are at stake in a tort judgment. I only mentioned those of the victim because I was highlighting the injustice of that particular situation, where the tortfeasor seems secure in his rights.

As far as Nozick's ideas go, they do sound odd. I will say a thing or two based upon my limited understanding of them, let me know if I'm off the mark.

It seems very odd to suggest that a liberal state is the natural outcome of anarchy. I have often said that either anarchy does not exist or we are living in it right now. People are so accustomed to living under a large impersonal state that they are unaccustomed to think of what government fundamentally is. As I have said before, and as you are surely already aware, government is merely superiority of force. If gangsters have the run of a city and the official authorities are powerless to contradict their decrees, then the 'authorities' are no longer sovereign, and the gangsters are a government unto themselves. Advocates of anarchy, in suggesting the abolition of government, either fail to understand what, fundamentally, government is, or are making the absurd assertion that it is possible to do away with the physical inequality of parties and the resulting power differential. Anyplace where there are two people there is government. The point of this is that anarchy is either an insubstantial philosophical construct or it is universal. Assuming the former, Nozick's assertion is merely a theoretical exercise; assuming the latter, Nozick's assertion is disproved by the repeated evidence of history. Why on earth would power groups, in the absence of formal government, restrict themselves to selling their protection, when they could quite easily force defenseless parties into a state of clientage and then extract whatever portion of the client's production they desired? They wouldn't. The evidence of history shows quite clearly that they haven't. As for such power groups being rights protecting… lol. There is certainly no guarantee that governments will be good.

As far as using defaults in existing programs. I'm all for it. I may doubt that a program is the most effective way to achieve the ends aimed at, but so long as we're going to do it we ought to do it as well as we know how in order to minimize the loss we incur by not following the optimal path. I do think that, in the context of the programs he mentioned, Sunstein's defaults would cause them to realize their ends more effectively. If you sell defaults as a way of making intervention more effective I won't argue. It is only when they are sold as a way of making intervention not intervention that I object.

When I said that "[determining a rational set of defaults] through the auspices of modern democratic government virtually guarantees that we will botch the process", I was speaking in very broad terms. I was talking about culture as a default. It is definitely the government's role to create defaults within the proper sphere of government. I am only talking about government setting defaults in private decision making. When it does this, I call it 'intervention', and I think it a mistake.

Your next point is very important: "a state will always be subject to pressures (of varying intensities) to do non-libertarian things. The state will always have the power to do those things; it is inherent in being a state. That power cannot be ignored, and there is no structural way to make it go away". Absolutely (my discussion of the constitution was not suggesting that a constitution could protect an ideal of government; I was just noting that the idea of defaults provides an interesting insight into why constitutions have any effect at all). One might say that good government is not a state of law and institutional organization, but rather a state of culture. No set of laws can cause a culturally destitute people to govern themselves well and no rule can be so detrimental as to prevent a culturally rich people from doing so. This is why I have lost interest in practical politics. What is the point of struggling for changes in laws when what really matters in not the virtues of government but the virtues of the people? This idea is highlighted in the ridiculous programs of 'democratization'. There are groups of people who are culturally democratic, and with such groups no power can hold them back from democracy. There are other groups who lack the cultural prerequisites for democracy and who will not become properly democratic no matter how hard you shove the institutions of democracy down their throats. This goes back to the recognition that government is power. We tend to confuse government with institutions, but if the institutions do not have the support of the people they do not have power and thus have nothing to do with government.

That idea is at the heart of my political philosophy. Good government is the product of a strong culture. It is a recursive model of societal improvement:

The ancients who wished to illustrate illustrious virtue throughout the kingdom, first ordered well their own states. Wishing to order well their states, they first regulated their families. Wishing to regulate their families, they first cultivated their persons. Wishing to cultivate their persons, they first rectified their hearts. Wishing to rectify their hearts, they first sought to be sincere in their thoughts. Wishing to be sincere in their thoughts, they first extended to the utmost their knowledge. Such extension of knowledge lay in the investigation of things.

Things being investigated, knowledge became complete. Their knowledge being complete, their thoughts were sincere. Their thoughts being sincere, their hearts were then rectified. Their hearts being rectified, their persons were cultivated. Their persons being cultivated, their families were regulated. Their families being regulated, their states were rightly governed. Their states being rightly governed, the whole kingdom was made tranquil and happy.

Confucius, The Great Learning

This is why my own investigations focus not on how to impose change on people externally but rather on what culture is and how it is transmitted. This, I think, is the road to improvement. If we can understand why some groups of people spontaneously generate wealth, creativity, and good governance, while others seem trapped in a state of degradation, then we might actively promote the welfare of mankind.

Finally, I do not agree that such policies as redistributive taxation and financial regulation reduce people's clamoring for more intervention. In fact I think such policies lead to more regulation. I believe that these policies result in outcomes that are the opposite of their intended aims. So if redistributive taxation makes people poorer and financial regulation makes markets more dangerous, then obviously you enter into an unstable feedback loop. One might call it a slippery slope. The more you intervene, the worse the problem becomes, and the more people demand intervention. I think this sums up the story of twentieth century governance nicely. Take the war on drugs as an example. The more effort they put into fighting the drug trade the more valuable drugs become. The more valuable drugs become, the stronger become those who traffic in drugs and the more difficult it becomes to stop them. So the harder you fight the problem the more virulent it becomes (and the harder you try to fight it, ad infinitum). An argument that supplements this perfectly sufficient point is that interventionist concessions create a norm. Interventions give people a sense of entitlement and this begets greater expectations of future paternalism.

A Response on Libertarian Paternalism

First off, I have to admit to not watching the video, although I believe I listened to an audio file of the same lecture (or a similar one by Sunstein) some time ago. Henry's post hits pretty close to some stuff my political theory course has been covering (particularly Robert Nozick's Anarchy, State, and Utopia), and that I discussed briefly with V recently (hopefully he'll chime in). I'm going to respond in chunks, hopefully it won't fragment the discussion too badly.

In the case of the car accident loss being left where it fell, the government is clearly failing to protect the rights of the victim. The goal of the government (under the aforementioned philosophy) is to secure individual's rights to life, liberty, and property. It would be ludicrous to suppose that this could be accomplished without torts (or likewise without the use of police power to try to prevent wrongful conduct)

Even accepting that a tort system is a necessity, this still leaves a huge range of determinations to be made with respect to process and defaults. Default legal burdens of proof and persuasion, burden-shifting rules, rules of evidence and courtroom procedures, etc. And to suggest that only the victim's rights are implicated neglects the fact that the tortfeasor's property rights are equally implicated. A faulty or unfair process could easily result in an unjust invasion of his rights. Protecting everyone's rights is a complicated business, packed with value-laden judgments.

In fact, one of my (many) objection's to Nozick's theory is that he imagines there will be numerous regimes of justice developed by individuals and associations in the state of nature, and he is indifferent to which one prevails (which would occur through economic competition of the associations). Any rights-protecting regime is apparently as good as any other in his view. But process can be slanted heavily to favor particular groups and actions, and it seems to me fairly important that there be a conscious and rational effort to create the "best" system, rather than the one most appealing to those with the greatest economic power.

I sincerely believe that the principle is merely a backdoor approach to regulation, and that his use of the word libertarianism is a usurpation of the term (this is the slippery-slope argument that Sunstein says is silly). Many of his examples involve at least some components which are involuntary and do not allow for choice. My second point along this line is a much more interesting one. Can such policies really be implemented (meaningfully) without imposing upon the liberty of the parties involved?

Sunstein's argument is fairly limited in this regard. I don't think he wants to get into the argument about whether or not programs like the 401k program should exist, but rather given that it already does exist wouldn't it be smarter to set the defaults in a manner that will produce the socially optimal result? We can get into the topic of what optimality means (and I will below), but let's assume Congress created the 401k program for some purpose and that purpose can be furthered by adjusting the default as Sunstein suggests. It would be a paternalistic change to an existing regime that creates no additional burden with respect to interfering in anyone's rights and that produces a better outcome. That seems fairly unobjectionable.

So it makes sense that we would be better off providing people with a rationally determined set of defaults to prevent their credulity mechanism from accepting a bunch of random crap. But this is harder than it sounds. I mean the 'determining a rational set of defaults' part. It can be done, but it requires a great deal of thoughtfulness, trepidation, and investigation. From my point of view, doing so through the auspices of modern democratic government virtually guarantees that we will botch the process.

Modern American government warrants a healthy dose of cynicism, but this is more like nihilism. Our institutional system is a bit of mess, and in my view needs some significant reform. But that stands entirely aside from the discussion of libertarianism as far as I can tell. Even the classic night watchman government requires a structure of governance. And if that system of governance sucks, you kiss your night watchman government goodbye in short order.

This, in fact, has always been my biggest objection to libertarian theory. I simply cannot see how a libertarian government could ever remain so for any appreciable length of time. The initial structure of the government will not bind it in libertarian form, even if you had a constitution without amendment procedures. It was not a constitutional amendment that allowed the development of the administrative state in the US, but judicial interpretation. And it wasn't just uppity judges responsible for that (although I'm not sure it would be significant to my argument even if it were), but intense political pressure placed on them by political branches motivated by quite serious concerns about social stability and unrest (and rising socialist sentiment). Whether it's a Great Depression and populist outrage or rent-seeking businesses and other economically powerful interests, a state will always be subject to pressures (of varying intensities) to do non-libertarian things. The state will always have the power to do those things; it is inherent in being a state. That power cannot be ignored, and there is no structural way to make it go away. It just sits there begging to be used.

I have a strong suspicion that some of the policies necessary to keep those pressures at bay (to the greatest degree possible) are themselves non-libertarian (e.g. some level of redistributive tax policy and regulation political speech financing, etc.). In the end, I tend to believe that our rights (which may or may not be limited only to life, liberty, and property) are likely best protected by a state that overtly recognizes the threat of instability and subversion of state power and is structured to best address that threat, even if that structure is not a strictly libertarian one. The state may need to be more powerful and far reaching than a night watchman state in order to be a stable, free-standing system. What good is the night watchman if it ends up being overthrown by communists or turning into a plutocracy?

Defaults and "Libertarian Paternalism"

I just watched a lecture by Cass Sunstein titled 'Libertarian Paternalism is Not an Oxymoron'. I'm not so sure. It seems to me that there is something important in the idea of libertarianism that is anti-meddling. It also seems that there is something fishy about Cass's idea of Libertarian Paternalism.

Sunstein says that there must be some default in any government decision. I guess that's true, but he reads a lot more into this than I think is warranted. First he mentions the notion that a no fault law regarding an auto accident is not an instance of government non-intervention, but rather an instance of the government granting privilege. The driver who caused the accident is not forced to compensate the innocent driver, yet the innocent driver is restrained from demanding compensation on his own. Sunstein later compares this to the presumption that an employer can fire an employee when and as they wish unless the specific employment contract states otherwise. He specifically says that this is not an instance of government non-intervention, but rather an entitlement granted to the employer by the government. Since what here appears to be non-action by the government is really a form of pro-business action, the question of whether or not the government should intervene is nonsensical. It is a 'mystification', as Sunstein notes in the Q&A. Since inaction is really a form of covert intervention the question of whether or not to intervene is trivial. We can only argue how we ought to intervene.

This seems to advocate a point of view that I find abhorrent. It suggests that life, liberty, and property are not fundamental rights to be protected but privileges to be granted at the pleasure of government. I would much prefer a philosophy of government in which the fundamental goal of governance is to secure these rights as firmly as possible. Under this assumption there is a default response to each of the situations mentioned in that last paragraph which is obvious and, I think, optimal. In the case of the car accident loss being left where it fell, the government is clearly failing to protect the rights of the victim. The goal of the government (under the aforementioned philosophy) is to secure individual's rights to life, liberty, and property. It would be ludicrous to suppose that this could be accomplished without torts (or likewise without the use of police power to try to prevent wrongful conduct). But in the latter case (that of job security), it is clearly in the interest of the liberty rights of both parties (and very likely the property right of the employer) that they be allowed to structure their contract as they see fit. Within the bounds of this minimalist framework we can do away with the absurd (or so it seems to me) nullification of the concept of non-intervention. Non-intervention would be to adhere to the principle of maximizing individual enjoyment of the rights to life, liberty, and property.

Rather than carry on in this line I will discuss the obvious objection to my discussion thus far. Sunstein is not proposing that we remove people's contract rights, but rather that we impose default contract structures that can then be negotiated away from. First I will say that this is at times quite fuzzy (e.g. the job security argument i.e. I thought that defaults weren't entitlements) in his expression. I sincerely believe that the principle is merely a backdoor approach to regulation, and that his use of the word libertarianism is a usurpation of the term (this is the slippery-slope argument that Sunstein says is silly). Many of his examples involve at least some components which are involuntary and do not allow for choice. My second point along this line is a much more interesting one. Can such policies really be implemented (meaningfully) without imposing upon the liberty of the parties involved? What if I own a business that has never had any sort of structured savings plan? If the government mandates that employees be defaulted into a certain sort of plan, would I not be obligated to set up such a plan? If not, is the program really being meaningfully implemented? Or, say that the government requires that the default employment contract include a provision supplying job security. What does this mean? Either the employer's liberty is unaffected, meaning that they have just as much right to opt out of the default as the employee does, or, only the employee has this right (i.e. the employee has the right to demand a contract with job security) and the 'default' infringes upon rights the employer previously enjoyed. If the employer can just opt out of the default, then nothing is changed and the default is not meaningful.

I also think that Cass glosses over the argument that the 'science' of what makes a good decision is controversial. The sciences (mostly social sciences ) from which these recommendations come, tend to be consensus sciences in which group think is common and people with an agenda can easily push the herd toward a predetermined position. Sunstein thinks that it will be easy to tell when personal interests are involved or when the science is fuzzy. I doubt this.

I don't think that the underlying idea of defaults is bad. There is no doubt that people do tend to stick with defaults. I think that the phenomenon originates in the inherent credulity of cultural animals. The evolution of culture is, or rather was during the course of human evolution (i.e. several thousand years ago and earlier), an ongoing numerical optimization (by randomized search) of a highly chaotic system with regard to the contents of behavioral instruction. The powers of this computational process dwarf those of the human mind. So it would be shocking if the human mind did not possess mechanisms to keep it from rejecting the output of that process: received culture (i.e. defaults). It is also perfectly reasonable to suggest that, given that we no longer live in a culture shaped by the evolutionary process, these mechanisms are defunct. So it makes sense that we would be better off providing people with a rationally determined set of defaults to prevent their credulity mechanism from accepting a bunch of random crap. But this is harder than it sounds. I mean the 'determining a rational set of defaults' part. It can be done, but it requires a great deal of thoughtfulness, trepidation, and investigation. From my point of view, doing so through the auspices of modern democratic government virtually guarantees that we will botch the process.

I think a great example of rational default setting is the creation and adoption of the U.S. Constitution. It's hard to figure out what it is that makes a Constitution distinct from the body of ordinary law if it contains a provision for its own amendment. The real distinction of the Constitution is that it is the supreme default of the land. It has all of the power of social proof behind it. I have said before that I think it is very much a rationally conceived document. So it's a rational default. The tragedy is what the Supreme Court has done to the constitution. They have dismembered our glorious default. It is far easier for a small group of highly educated individuals to overcome their preference for the default than for a great big congress and a huge unruly populace to do the same. So whenever a significant proportion of the population want to change the Constitution, it almost always ends up being easier to have the court skew its interpretation than to get congress to change the actual wording. This path of least resistance is the weakness that undermines the constitutional fortress. The justices have been smart enough to overcome the default but not wise enough to understand why they shouldn't.

Some Nifty Essays

I told Joe recently that I have been making an effort to learn to program in a language called Lisp. This sort of autodidactic project requires a lot of scouring the infosphere for material. Tonight I happened upon some essays by Paul Graham that I have found extremely diverting. I'm sure you're all very busy but if you happen to have some time for pleasure reading you might enqueue an essay or two.