This post is just some thoughts about perspective. I apologize for any lack of organization.
My academic influences include North, Weingast, Coase, Hayek, the field of Public Choice, and others. I’m not an ‘adherent’ to any school of thought. Those guys just provided some insights that I find myself often using.
What lessons did they teach? Plenty. When I see the world of firms, governments, and other institutions, I maintain a sharp distinction between intention and outcome. Any given policy that’s enacted is probably not the welfare maximizing one, but rather must keep special interests relatively happy. So, the presence of special interests is a given and doesn’t get me riled up. When I see an imperfect policy outcome, I think about who had to be enticed to vote for it. We live in a world where ‘first bests’ aren’t usually on the table.
Historically, or in lower income countries, I think about violence. Their rules and laws are not operating in a vacuum of peaceful consent. There is always the threat of violence. Laws are enforced (or not) conditional on whether and what type of violence that may result. All of the ideal legislation is irrelevant if theft and fraud are the lay of the land.
I think about institutional evolution with both internal and external pressures. I’m a bit worried about the persistence of the US republic, or at least worried for its pro-growth policies. I’m not worried about China in the long run. I don’t think they have the institutions that get them to ‘high income’ status. I do think that they are a tactical concern in the short run and that the government does/will have access to great volumes of resources in the medium run. That’s a bit of a concern. But like I said, I’m not super worried in the long run.
One consequence of my long-term thinking is that I have a placid view of contemporary politics. There is a bunch of mess, always. I can’t watch cable TV because its all hysterical all of the time. People take the word of politicians as if it is meaningful. While it can be meaningful, a broken clock is also right twice a day. As you can imagine, this makes me a bit of a stick in the mud when conversations turn toward politics. People have strong feelings and forecasts. And my unsatisfying answer is ‘maybe’. Maybe something will happen, maybe not. Maybe there will be a backlash, maybe not. Maybe the culture will change, maybe not. Hysterics are only reasonable when a really bad thing has a really high probability of occurring (I know that’s ill-defined). Given that I’ve never voted for a sitting president, the criteria for me is not whether I disagree with whoever the current one is.
But are we living in exceptional times? Everyone always seems to thinks so. Let’s take something that’s currently in the news: Immigration and Customs Enforcement (ICE) activities, civil rights violations, and murder/manslaughter/self defense (depending on your perspective). It seems that some US citizens are dying and that even more foreign-born people in the US without legal status are dying too. That’s bad.
I also think about the massacres in the late 1800s and the early 1900s. Catholics were murdered en masse and their houses burned down. I think about nativist and WASP riots against Irish people and Mormons and loads of violence. Hundreds of people died in big batches. On the economic side, I think about historical price controls, wartime economies, agricultural boards, and various exclusionary labor laws. Those were also bad, and we have less of them now than prior.
It’s not that I don’t think that the current bad things don’t matter. It’s more like the bad things are sometimes coupled with good things that come later or that we don’t recognize when the good things are complements with the bad things. At risk of sounding like equivocation, there are also always ‘bad things’. I’m not swayed much by the aesthetics, salience, or mood affiliation of the moment.
I do have concerns. My concerns are that we are decreasingly interested in small, effective government, strong property rights, and freedom of association. Some of these are getting better, such as with the spread of school choice and voucher programs. But that seems less about principles and more about pragmatic alternatives. How strong is my concern about our republican values? Not super concerned. After all, the English common law tradition was also not concerned about abstract principles in the day-to-day business of living. Rather, it was highly pragmatic in nature. In fact, the liberal English principles grew out of that pragmatism by a process of selection. The principles weren’t established ahead of time. They were discovered. Therefore, my concern about liberal values mediates once I realize that they were probably never so stable nor pervasive. Again, the analysis tends toward placidity rather than hysterics.
The Drawback
The drawback of the emotional detachment, pragmatic liberalism, and interest in long-term institutional structure is that it makes me bad at being a political enthusiast or revolutionary. I get to have a somewhat aloof self respect, but I also fail to recognize when the water is slowly coming to a boil around me. The murder, theft, and exploitation of years gone by was definitely bad. And we’d also like to avoid repeating it if possible. So when I compare the historical hundreds of deaths to the current few, my apparent shrug may miss the other details that make this time different.
Economist Writing Every Day 