ZenPolitics

Perhaps I am one of the dumb people Bryan Caplan might allow fewer votes to in emulating pre-1949 Great Britain, but I had a hard time chewing through David Estlund’s Reaction Essay at Cato Unbound. Maybe he just would have had me shipped to Australia. I’ll just highlight some of the areas I struggled and perhaps people more intelligent than I can provide some clarity in the comments section herein.

1. I don’t understand why the term “democracy” is used as an alternative to the concept of “markets.” The two are not mutually exclusive, and it doesn’t even make sense to me to frame the issue the way Estlund does. Democracy can be a protector of markets if the electorate has faith in them, and democracy can lead to anti-market regulation when a majority of voters have little faith in markets. This really bothered me because I see this as basic political science. I get that Caplan could have been a little clearer in his Lead Essay, but why take an error and run with it? Why not correct it?

2. I’m not sure that Estlund has a good grasp of why consumer choices are better than voting choices, and that undermines, to me, a lot of his analysis. He uses an example of peach pits curing cancer better than chemotherapy, wondering why the market would fix that better than a regulatory scheme. That he cannot seem to grasp the “why” is a real mystery to me. The politician and/or regulator–or the average voter–has no immediate, vested interest in his own continued existence, at least in the same context that a cancer patient does except in the rare instance of overlap. Regulations leverage delayed accountability and entrench iron triangles, creating lobbying firms/jobs where not only are we spending tax dollars on the regulatory scheme itself but because this is one of a thousand different potential voting issues it is unlikely that a politician is going to feel any pressure to correct a poor or procrastinating regulatory mechanism. The regulatory mechanism itself generates political contributions through industry, and those contributions may secure more votes than votes lost over failure to perform oversight over a poorly performing regulatory agency. Contrast that with a market in the same field where you are going to have consumers highly motivated to make informed decisions based on results, and their evaluation is not going to be watered down by extraneous questions like foreign policy, immigration, same-sex marriage, etc. The market is a highly focused decision-making mechanism that provides direct rewards to rational actors. That does not mean that all consumers act rationally, only that, unlike voters, there is a more direct reward for informed decisions and a more direct consequence on the goods or service provider. Had I read Estlund’s last two paragraphs first I doubt I would have gone back and read the rest of the article.

3. Estlund says:

How could markets take the place of the political decision whether or not to open the borders?

Here is another misconflagaration of “democracy” with “markets.” You do have to make a threshold political decision that the market for labor should be less regulated, a market cannot openly subvert the political process (although there are plenty of examples of markets finding ways around the political process). You make a political decision that economically it makes much more sense to open up the borders and the following things happen: 1. The market will reflect the appropriate ebb and flow of immigration based on economic need, 2. law enforcement resources, freed up from hunting down and deporting people coming to the country looking for work, can now focus on actual criminals. To that end I find Estlund’s follow-up questions confusing:

If you’re pro-market you might like the idea of open borders, I get that. But that isn’t responsive to the question: should immigration policy be made politically or (somehow) by markets? Which decisions about immigration (if any) does Caplan think should be moved from democratic to market control?

I think this is negligently or intentionally misunderstanding the point Caplan was trying to make by leveraging confusion Caplan built into his own post, which I took as politically you have two choices–a free market or a regulated market (there are more choices but those are the primary two we’re dealing with). Caplan, however, didn’t help his case any when he said:

Why not take more issues off the agenda?

I’m assuming Estlund took this to mean that Caplan was proposing that there is a mechanism by which the market can take an issue off the political table, which it can’t, not in a democracy. If you went Caplan’s direction with an educated aristocracy/democracy combination then that question makes somewhat more sense but in retrospect it was still pretty confusing.

I think at the end of the day Estlund hit upon the only thing that matters, although I don’t know whether he realized it because it was almost a throwaway line:

That settles nothing, since there is no entitlement to rule others based simply on the fact that you know what is best.

Maybe democracy is fatally flawed, and “best” way forward is a true line of benevotent dictators/enlightened despots/philosopher kings, but democracy is really the only form of government that carries with it what I would call moral legitimacy, with the will of the people. Without that, I really don’t like the alternatives.