Having spent much of my professional life at the Competitive Enterprise Institute, I found Paul Rubin’s recent Wall Street Journal piece “How to Roll Back the Demonizing of Markets” intriguing. Just as CEI has since its inception, Rubin argues that markets are cooperative, rather than competitive institutions. A business will compete with a few rivals, true. But to stay in business, it must cooperate with thousands of customers, employees, shareholders, suppliers and neighbors.
The popular mind tends to associate capitalism with competition, but there is actually far more cooperation. As CEI’s “I, Pencil” movie shows, these cooperative links extend outward from the company to engage millions throughout the world.
Rubin’s point is important. Competition does focus on the win/loss nature of creative destruction. But throughout that competitive contest, both sides are seeking to cooperate with their customers (each seeking to demonstrate their superiority in such cooperation), with their workers, suppliers, and shareholders. In a sense, companies compete with each other to be the better cooperator.
Rubin is discussing what we all know, but rarely take to heart: words matter. Market defenders have been too passive — too willing to adopt the anti-market rhetoric that has dominated discussions about markets since the days of the Muckrakers. Those of us who believe capitalism to be a virtuous institution must develop a positive rhetoric and an array of “I, Pencil”-style positive narratives.
CEI won’t be changing its name, but we and others should focus more on rhetoric. No one cares what you know until they know that you care. Capitalism is more “caring” than any other known institutional system. We must find ways of making its concern more apparent.
In a speech at a 2012 Google Zeitgeist event, British journalist Matt Ridley gave an evocative illustration of the power of connectivity, reminiscent of CEI’s short film version of Leonard Read’s classic essay, I, Pencil.
“Counter-intuitively,” he said, “we’ve become more prosperous as we’ve moved away from self-sufficiency. The more we work for each other, the better off we are. The more we rely on our own efforts, the poorer we are. That’s why we call it subsistence. Self-sufficiency is indeed another word for poverty.”
In his talk, Ridley, the 2012 winner of CEI’s Julian L. Simon Memorial Award, exalts human progress by contrasting a computer mouse with a primitive weapon used by homo erectus. Both tools are the same size, built to fit snugly in the human hand. The difference, besides hundreds of thousands of years and the Industrial Revolution, is that many parties made the computer mouse while only one hand molded the primitive weapon.
And that’s precisely the point. No one person can make a computer mouse. No omniscient brain determines where technology or industry may go, as the invisible hand of the market guides where a single brain does not. Technology is brilliant because of the many hands that mold the parts, not because of some guiding master mind.
Of course, in an age of paleo diets and buying local, a primitive weapon screams CHARM! and BRING WEAPONS BACK TO OUR ROOTS! Equally charming, though, is clicking on that perfect Etsy item or finding the newest episode of Portlandia with a computer mouse made by many hands.
Every now and then one sees a cute article like this Los Angeles Times piece lamenting that Congress is “ineffective” because it passed only a few laws in 2013.
Some people — most, perhaps — truly believe in no bounds; government should be doing a lot of stuff all the time.
All you have to see is this new Rolling Stone article rallying millennials to the causes of government-guaranteed work for everybody and collective ownership of everything.
After soaking in government schools for 12 years, few recognize anymore that it’s supposed to be hard to pass laws. There shouldn’t be all that many in a free country. Meanwhile, Rolling Stone calls for dictatorship.
Nineteenth-century lawyer, abolitionist, and political philosopher Lysander Spooner was more hard-core than anybody else in opposing that viewpoint, calling “All legislation whatsoever an absurdity, a usurpation and a crime” in his essay Natural Law.
If we don’t have the right to push around or tax our neighbor, we don’t gain the right by assembling a mob to “vote.” Government operates solely by force; we should endeavor to improve society by persuasion, not force.
Usually, to turn the famous phrase on its head, “There ought not be a law,” because most things are not and should not be public policy issues.
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Apple recently released an ad for the new iPad Air that — whether intentionally or not — mimics CEI’s I, Pencil short film. In the new ad, a pencil sits on a table as the narrator describes the many purposes of this simple machine. At the end of the 1:03 ad, the pencil lifts to reveal an iPad Air that’s been hiding behind the slim writing tool.
Hark, Leonard Read fans! Take heart, disillusioned entrepreneurs! The iPad is a wonder of capitalism just like the pencil. And contrasting a pencil – seemingly simple, but used far less in our digital age – with an iPad reminds us that the collaboration that made possible the manufacture of old tools still works the same way today.
An iPad and a pencil aren’t that different, after all. As the ad notes, both can “start a poem or finish a symphony;” both are “extremely simple and yet extremely powerful.” And just as importantly, the process of making each of these items hinges on the expertise of many parties, working independently of one another to advance their own interests.
With our I, Pencil short film recently winning the first Reason Video Prize, this pencil ad holds special value to us here at CEI. Hopefully, it will encourage all who enjoy Apple products to also consider the beauty and wonder in uninhibited creative energies.
Another ad on Apple’s website offers an expansive, beautiful montage of all the daring, innovative activities people around the world are doing with the iPad’s help. Yet another shows Apple’s design team raving about the device’s lighter design and longer battery life. One man describes the A7 power chip in the Air as “rigid but nothing precious about it.” But that could be said of any product. There’s “nothing precious” about anything until people find it useful. By that standard, a pencil and an iPad are both very valuable indeed.
Last night the Boston Red Sox won the World Series after coming back from a worst-place season in 2012. Their 6-1 defeat of the St. Louis Cardinals capped a remarkable turnaround that resulted from a mix of a new coach, a blockbuster trade to the Los Angeles Dodgers, seven free-agent acquisitions, and a “culture of excellence.” Sabermetrics undoubtedly played its important role, as it does for almost every ball club. But to a player, they created and bought into a team spirit that maximized their talent to reach their goal – and had fun doing it.
Here’s one report of how the team coalesced:
Red Sox players loved coming to the park early and finding several teammates ready to go to work with them to refine the subtle details of their games. They practiced together to improve their execution. And when they did not practice, they discussed their execution so that they could do a better job of preparing for game situations.
The result was a team striving for greatness in the details. And as the players sensed that shared purpose, they recognized the logical conclusion of the undertaking. The players felt empowered to set critical standards for each other, foremost to play the game with maximum effort and intensity, with perfection of execution.
This soon created the identity of a team that believed it could do something extraordinary.
Red Sox General Manager Ben Cherington, in discussing the additions to the roster that made a difference, was reported as saying:
He wanted players who had reputations for being good clubhouse guys. He wanted players who understand that playing for the Red Sox is a unique experience — that is, expectations are high, and players are held accountable.
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Steven Teles tells us in the fall issue of National Affairs that over the next decades, the challenge of “kludgeocracy” will come to the forefront of national politics:
In recent decades, American politics has been dominated, at least rhetorically, by a battle over the size of government. But that is not what the next few decades of our politics will be about. With the frontiers of the state roughly fixed, the issues that will define our major debates will concern the complexity of government, rather than its sheer scope.
Teles is certainly right that the underappreciated costs to our economy of administrative complexity and regulatory compliance ought receive more attention in spending debates. The first step is to think about regulation as a form of government spending itself. When we usually think of government spending, we imagine the government taxes individuals and firms and spends their money for them. But government can also spend money in a different sense by issuing spending directives to those individuals and firms themselves. As documented in CEI’s Ten Thousand Commandments: An Annual Snapshot of the Federal Regulatory State, the costs of regulation reached over $1.8 trillion in 2013.
A bigger challenge Teles presents for libertarians, however, is his argument that “kludgeocracy” is the result of our political system’s numerous obstacles to political action and Americans’ ambivalent attitudes toward government:
American institutions do, in fact, serve to constrain the most direct forms of government taxing and spending. But having done so, they do not dry up popular or special-interest demands for government action, nor do they eliminate the desire of politicians to claim credit for new government activity. When public demand cannot be addressed directly, it is met instead in complicated, unpredictable ways that lead to far more complex legislative solutions
One of the clearest findings in the study of American public opinion is that Americans are ideological conservatives and operational liberals. That is, they want to believe in the myth of small government while demanding that government address public needs and wants regarding everything from poverty and retirement security to environmental protection and social mobility. The easiest way to satisfy both halves of the American political mind is to create programs that hide the hand of government, whether it is through tax preferences, regulation, or litigation, rather than operating through the more transparent means of direct taxing and spending.
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Tea Party conservatives were beside themselves when they discovered that a Yale political scientist named Daniel Kahan had seemingly admitted that Tea Party members were more scientifically literate than the general population. Kahan went on to say:
I’ve got to confess, though, I found this result surprising. As I pushed the button to run the analysis on my computer, I fully expected I’d be shown a modest negative correlation between identifying with the Tea Party and science comprehension.
But then again, I don’t know a single person who identifies with the Tea Party. All my impressions come from watching cable tv — & I don’t watch Fox News very often — and reading the “paper” (New York Times daily, plus a variety of politics-focused internet sites like Huffington Post & Politico).
I’m a little embarrassed, but mainly I’m just glad that I no longer hold this particular mistaken view.
Of course, I still subscribe to my various political and moral assessments–all very negative– of what I understand the “Tea Party movement” to stand for. I just no longer assume that the people who happen to hold those values are less likely than people who share my political outlooks to have acquired the sorts of knowledge and dispositions that a decent science comprehension scale measures.
Tea Party favorites like Glenn Beck were ecstatic:
Glenn Beck and his radio co-hosts Pat Gray and Stu Burguiere discussed the poll on Thursday…
All three agreed that it was a “positive” development to find someone “honest enough to go through and run the data.”
“I hope you have tenure, Dan, because Yale’s not going to keep you around, dude,” Beck said.
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In a recent article in The Freeman (“The Abolition of the Playground”), Jeffrey Tucker decries public regulation of elementary school playgrounds. He makes a good point, especially in his criticism of the makers of silly rules, but misses one important aspect of freedom.
A disclaimer: I can’t remember a time I had fun on a playground. In elementary school, while my classmates played kickball on the acre plot allotted our school, I liked to sit by a tree with bulbous roots and read. I begged my teachers to let me stay inside, and some did. I dreaded the period of “play” after lunch every day. I found sunlight oppressive and physical activity nauseating. I went to a private school, played in “a good private playground, with clear rules and maximum choice within the rules” and had “an early experience of freedom itself.” It was bleak, mostly because “freedom itself” did not include the choice to opt out of playground time.
Children exercise very little autonomy. Such is the nature of childhood, and it can be a joyfully ignorant period of life. I take umbrage, though, at adults advocating for “liberty” from state imposed regulation for the sake of children’s happiness and free-spirited play. And a playground is, by definition, prey to “regimentation and central dictate” because the definitions of play are so limited.
Tucker notes that, “the point of the playground is the teeming activity of many individuals that somehow emerges into a micro social order without direction from above.” Yes, play time can help children learn about cooperation. But a true education of what freedom entails requires the choice to opt out of the faux-social order. Adults trying to reform our top-down state education system should consider what freedom could actually look like for students.
In a recent New York Times column, David Brooks describes American culture as “mentally lazy.” Overcoming that, he argues, requires a dose of what he calls “social paternalism” in public policy.
Is he right?
I thought about that yesterday, as I drank a can of pink grapefruit-flavored San Pellegrino while sitting in an old family friend’s living room. The friend had just returned from swimming laps and wore Speedo jammers—knee-length, spandex-tight swim trunks, a jarring sight on an adult male. “Mary,” he said. “Here’s the problem with the media today: No one can just sit with someone they disagree with and listen to their point of view anymore.” (Was I not listening to a man in Speedo jammers with all manner of civility?)
He continued, “America wants a media outlet that will provide civil disagreement; she just doesn’t know it yet.”
He presented, in effect, an interesting anomaly. Conflict around an idea creates buzz. Yet, bombast causes sources to lose credibility with media consumers. “News” coverage and opinion pieces dwell in a Catch-22: The ridiculous get attention while the substantive get lost in the fray—and then the ridiculous get dismissed anyway. Subsequently, the public, though engaged in a whirlwind of dramatic press, tunes out.
Where I differ with AMiJ (Adult Male in Jammers) is on what it is the public wants. Why search for an even-keeled news sources when loud commentary and feuding pundits attract so many eyeballs? A talk show where two or more parties calmly discuss current events without exaggeration would not do as well as the over-the-top pundits.
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Fred Foldvary’s article “Do Markets Promote Immoral Behavior?” in September’s issue of The Freeman considers an important question for defenders of markets—the moral status of market behavior. While a popular and scholarly consensus sees markets as necessary for growth and a useful technique for allocating resources, it nonetheless regards market institutions as either a necessary evil or morally neutral. Thus, markets occupy a fragile position in which they’re tolerated, but constantly under suspicion.
Foldvary argues against the conclusions of a recent study in the journal Science, which apparently shows that a simple isolated choice to be paid $10 or save a mouse’s life produced morally superior outcomes to those of an extended market. But purposes of this post, however, the conclusions of the study are irrelevant. What matters is the Foldvary’s framework for arguing against the study, which is flawed.
In brief, Foldvary wants to argue that the moral basis of markets reduces to consent. But despite the appealing tidiness of Foldvary’s argument, I think there are two big problems:
First, Foldvary is wrong to build so much of his argument on the moral value of voluntary exchange. Economists usually assume that exchanges will be mutually beneficial only if the exchange is voluntary on the assumption that people are the best judge of their own preferences and that third-parties aren’t any better. But while this is a useful statement of epistemic modesty by economists, it doesn’t tell us anything by itself about the fundamental moral value of voluntary exchange. As Nozick once asked, why should freely-made choices be worthy of respect in and of themselves? In the case of markets, Foldvary thinks we can understand their moral basis from the fact that buyers and sellers voluntarily participate. But his inference is ill-founded. There is nothing about voluntary action as such that makes it either moral or immoral.
Second, his account talks past critics of markets rather than to them. Critics of markets often want to block even market transactions that are clearly voluntary, which suggests that the interesting disagreement is over something else. Arguing that paying your kids to read, or charging your neighbor for using your generator after a hurricane, or charging for sex, is acceptable if and only if it’s voluntary misses the nature of the objection to those transactions.
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