- Paul Krugman’s Ad Hominem Defense of Central Banking - August 4, 2020
- Gold and Free Banking Versus Central Banking - July 28, 2020
- “Systemic Racism” Theory is the New Political Tribalism - July 21, 2020
What is the role of government in society? This has been and remains the most fundamental question in all political discussions and debates. Its answer determines the nature of the social order and how people are expected and allowed to interact with one another – on the basis of either force or freedom.
The alternatives are really rather simple. Government may be narrowly limited to perform the essential task of protecting each individual’s right to his life, liberty, and honestly acquired property. Or it may be used to try to modify, influence, or dictate the conduct of the citizenry.
In the first case, the government is assigned the duty of impartial umpire, enforcing the societal rules against assault, murder, robbery, and fraud. All human relationships are to be based on mutual consent and voluntary association and exchange.
In the second case, government is an active player in people’s affairs, using its legitimized power of coercion to determine how the members of the society may live, work, and associate with each other. The government tries to assure certain outcomes or forms of behavior considered desirable by those who wield political authority.
More Government Means Increased Government Force
We need to remember what government ultimately is all about. The Austrian economist Ludwig von Mises concisely explained this:
“Government is in the last resort the employment of armed men, of policemen, of gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating, killing, and imprisoning. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom.”
Under a political regime of liberty, each individual gives purpose and moral compass to his own life. He is treated as independent and self-governing; as long as he does not violate the rights of others he is sovereign over his own affairs. He may choose and act wisely or absurdly, but it is his life to live as he pleases.
If any of us – family members, friends, or just concerned fellow human beings – believe someone has chosen a path to perdition, we may try to persuade him to mend his ways. But we are expected to respect his freedom; we may not threaten or use force to make him change course.
Nor are we allowed to use political power to manipulate his options so that he does what we want him to do. Using taxation and regulation to induce conduct more to our liking is no less a political imposition than the sterner and more explicit police power.
The totalitarian systems of the twentieth century used the direct means of command and prohibition to get people to do what a Stalin, Hitler, Mussolini, or Mao wanted done. In the interventionist-welfare state such brute means are normally shunned for the more indirect and subtle method of influencing people’s behavior through manipulation of incentives.
Government Control Through Choice Manipulation
Suppose an individual stands at a crossroads and is told he may choose which way to go. But in front of one of the roads is a government tollbooth that charges him a fee if he chooses that route; while in front of the other is a machine that dispenses a cash subsidy from the state, if the individual decides to follow that road. The choice is his, but the tradeoffs he faces have been manipulated to influence his decision.
In the 1950s the French coined a term for this type of political control: indicative planning. Through the use of fiscal and regulatory powers the government could get people to do what the politicians, bureaucrats, and various special-interest groups wanted, all the while maintaining the illusion that people were freely deciding where to invest or work or carry on their business.
We see this at work in America with government tax credits up to 30 percent of the purchase and installation costs to induce people to invest in solar panels on the roofs of their homes or office buildings; or the use of a similar tax credit of up to $7,500 if an individual purchases the Tesla electric automobile.
On the other hand, there is the use of taxes to induce less consumption or use of a product. A leading example of this is taxes on cigarettes. To the manufacturers’ retail prices are added “sin taxes” for indulging in a “vice” that others in society consider disgusting and/or an unnecessary health risk.
While in Missouri it is as low as merely 17 cents per pack, in New York City, the state and municipal taxes add an additional $5.85 per pack to the manufacturers’ retail price. Chicago has the highest of these sin taxes in the United States, with $6.16 in taxes added to the price of a pack of cigarettes.
The new code name for this type of political paternalism is “nudging.” Those in power and those among the behavioral “experts” who claim to know how individuals should better live their lives than when left on their own, do not assert the right to directly command people to live “right” and “rational” for themselves or society.
No, instead, they merely wish to influence and modify the incentives in society to get people to live and act in that better way, when if they were as enlightened as the government-advising experts those people would realize was the way they should and would live and act without the manipulation of the trade-offs people face in the marketplace.
The Danger from “Soft” Tyranny
We might call this a “soft” tyranny under which the commanding hand remains hidden behind an outward veneer seeming to respect the right of people to live and choose as they like and desire, but all the time manipulating the taxing and regulatory surroundings to see that the citizenry really ends up doing what the regulators and planners want them to do, or at least more it.
This form of “democratic despotism” over the conduct of the citizenry was, of course, explained, feared and warned about 180 years ago in Alexis de Tocqueville’s deservedly famous Democracy in America, written in the 1830s after an extended visit by the Frenchman to the United States:
“After having thus taken each individual one by one into its powerful hands, and having molded him as it pleases, the sovereign power extends its arms over the entire society; it covers the surface of society with a network of small, complicated, minute, and uniform rules, which the most original minds and the most vigorous souls cannot break through to go beyond the crowd; it does not break wills, but it softens them, bends them and directs them; it rarely forces action, but it constantly opposes your acting; it does not destroy, it prevents birth; it does not tyrannize, it hinders, it represses, it enervates, it extinguishes, it stupefies, and finally it reduces each nation to being nothing more than a flock of timid and industrious animals, of which the government is the shepherd.
“I have always believed that this sort of servitude, regulated, mild and peaceful, of which I have just done the portrait, could be combined better than we imagine with some of the external forms of liberty, and that it would not be impossible for it to be established in the very shadow of the sovereignty of the people.”
There is a duel hubris in the thinking and attitude of such paternalistic “experts.” First, they presume to possess superior knowledge and insights greater than and superior to that of the ordinary citizen about how best people should live their lives. Second, they unreflectively presume that they, even though mere mortals as like the rest of us, do not suffer from similar behavior, psychological and social shortcomings, and therefore are intellectual demi-gods sitting atop a self-positioned political Mount Olympus far above the common man.
The Hubris of the Paternalist
Some psychological and behavioral scientists frequently claim that they are able to demonstrate the failings and conceptual and logical errors that the ordinary man commits, and on the basis of which they can assert a judgment concerning the “rationality” or “irrationality” of human beings and their choices and decision-making.
For instance, the person who consumes large quantities of “junk food” when they get anxious or depressed; or the cigarette smoker who can’t quit because he needs the “nicotine fix” during or after a rough day at the office; or the individual who doesn’t weigh on the basis of objective, rational statistical calculation whether it is really worth spending money on a lottery ticket; or a person who fails to logically plan for his own future retirement needs when they are in the 20s or 30s. And on-and-on.
The fact is that these and similar human “failings” have plagued mankind for all of its time on this earth. Read the accounts of the ancient Greeks written 2,500 years ago by those living among the people of that time, or the words of advice on good and ethical living given by the ancient Chinese philosopher, Confucius, to his disciples and the political leaders of his time, also around 2,500 years ago.
It soon becomes clear that human nature, when compared and judged against some notion of a machine-like rational calculating device, appears to be stumbling, bumbling, and unfit for successful existence on this planet.
Human Improvement Without the Political Paternalists
Yet, here we are, the human race having survived in spite of its frailties, imperfections and less than perfect rationally logical thinking processes. Of course, we have become more intelligent, informed, and rational. We no longer pray to rain gods for precipitation or (well, at least, rarely!) throw human beings into volcanoes to appease the angered gods; we stopped burning people as witches or heretics (at least in the Western world for the most part); and we’ve learned to harness the forces of nature to serve man’s purposes (and often without too much of a screw up).
With only a limited degree of nagging and bullying, the number of people smoking in the U.S. has decreased from over 42 percent of the population in 1965 to barely more than 14 percent fifty years later in 2015. “Sin taxes” have certainly raised the cost of smoking, but it is also likely the case that a large majority of those who have given up the habit, did so because they decided to live a healthier life, through information and non-coercive peer-pressure by family members and friends – a method far more consistent with liberty than armies of busy-buddies playing political paternalists.
Obesity has increased from around 45 percent of the U.S. population in the 1960s to nearly 65 percent in the early part of the twenty-first century. But in one sense this is an indication of how wealthy we are and how inexpensive in general foods of all kinds have become compared to the past. In 1900 Americans spent around 43 percent of their family budget on food; in the first decade of the twenty-first century that had fallen to around 13 percent, or a 70 percent decline in the cost of putting food on the family dining table.
But at the same time, over the decades a significant number of people have gotten off the couch and gotten to the gym or on the park trails to run or bike regularly. More people try to eat and drink right. Since 1980, per capita alcohol consumption in the U.S. has decreased by about 15 percent.
Life expectance has dramatically improved over the last 75 years in the United States. In 1940 the average expected life span of all Americans was about 63 years; by 2010, this had increased to almost 79 years, for around a 25 percent increase in how long you can, on average, look forward to living. (For whites, in general, there has been a 23.5 percent increase in life expectancy between 1940 and the present. For blacks, in general, the increase in life expectancy during this period has been a dramatic 41.5 percent!)
Now, certainly, a good part of this improvement in the human condition has been due to advances in medicine, and improved education and information accessibility. But, nonetheless, the changes for the better are also due to people making their own choices and decisions about how to live their own lives based on what they consider to be a good and happy existence in a general economic and social environment of improved opportunities and choices.
In other words, Americans have not needed paternalist “experts” to control and manipulate their lives and twist the choice sets that such political elites think is necessary and “good” for the masses of the population.
Whose Life: Yours or the Government’s?
And this gets, I would suggest, to the heart of the matter. Whose life is it anyway? Even if individuals make decisions and act in ways that others may consider misguided and harmful to themselves, the first principle of any free society should and must be that the individual is sovereign over his own life.
Otherwise, he is a pawn to the paternalistic presumptions of those who arrogantly claim a right to control his existence in both small and great ways. Which gets to the second assumption behind the thinking and desires of the political “nudgers,” that they have the knowledge, wisdom and ability to know better the right choices that people should make for a rational, productive, and meaningful life.
Are not some of these “experts” the same people who were shown in the release of confidential emails a few years ago that they were determined to suppress and professionally bury any scientific evidence that ran counter to their absolute certainty that global warming was man-made and a threat to all living things on Earth?
Are not some of them the same people who have been found occasionally to falsify statistical and related data in their professional articles upon which they attempt to build their academic careers for purposes of position and financial reward?
Are not some of them the same people who before their appointment to positions as an economic advisor or bureaucratic overseer in government may have said that economic theory and historical evidence demonstrates that minimum wage laws tend to cause unemployment by pricing the unskilled or the low skilled out the labor market, but once in those positions of political authority suddenly say that such government regulations have little or none of such negative effects on such workers in general, if that fits in with the ideological and political agenda of those whom they serve in government?
In other words, are they not people just like some of the ones they criticize and “scientifically” sneer at for their claimed “irrationalities” and presumed emotional short-sightedness, for which they say there is only one answer: their guiding hand to dictate or “nudge” the “common man” into the elite’s conception of the “good,” the “right” and the “rational”?
Paternalism on the “Left” and the “Right”
At the same time, too many people believe that the only problem with all this is that the “wrong” individuals have been given such power and authority. Too often both American “progressives” on the political left and political conservatives on the right want government to intervention, regulate and “nudge” people into directions different than the ones they might have peacefully followed if left alone; their only difference being into which direction they want people to be nudged and who they would like to see elected or appointed to do the regulatory restricting, manipulating and controlling.
For too long, too many conservatives have forgotten or chosen to ignore in their quest for political control that once the state is given the responsibility to see that we do the “right thing,” they have no certainty that those empowered to implement the necessary policies will share their values and beliefs. They may be setting up or reinforcing or extending the political institutional mechanisms for the government to undermine the very ideals, values and beliefs you hold most dear when others they don’t like get into power.
It is only in the arena of freedom that individuals can find their own way, guided by their own beliefs, values and purposes without the fear of some others attempting to bend them to a vision, ideal or a meaning for life different to their own.
But to secure the opportunity to live your life and practice the values you consider important, there must be a “first principle.” That first principle must be the right of the individual to his own life, liberty and honestly acquired property without violence or political manipulative interference by the government powers-that-be.
This requires, at the same time, a rejection of the prevailing alternative first principle of modern society: the collectivist premise that the individual is subordinate and subject to the national, ethnic, religious, or social groups or tribes into which accident of birth or circumstances have placed him.
This should be the burning issue and alternatives debated and discussed in an election year: individualism versus collectivism. Instead, the campaign trail is filled with those who are more focused on trying to persuade the electorate on how they, respectively, have the “plan” to set everything right and assure every one of a better life and a happy future.
All of them are implicitly paternalistic “nudgers” and manipulators, merely arguing over how they each would better design society and control various aspects of people’s lives.