Reasonable Bias

The Republican nominee for president of the United States in 2012, if anything, is a very successful businessman.  And Mr. Romney, along with his supporters, would have you believe that his business experience is one of his (if not the) primary qualifications for serving as our country’s 45^th chief manager of the national economy.  For, as they argue, the stuff of good business executives is substantially the same as the stuff of good presidents.

As his opponents point out, however, business experience should have little relevance to presidential potential simply because businesses bear little resemblance to countries.  Paul Krugman, perhaps most prominently, has noted this on many occasions, writing in one instance:

Making good economic policy isn’t at all like maximizing corporate profits. And businessmen — even great businessmen — do not, in general, have any special insights into what it takes to achieve economic recovery.  Why isn’t a national economy like a corporation? For one thing, there’s no simple bottom line. For another, the economy is vastly more complex than even the largest private company.  Most relevant for our current situation, however, is the point that even giant corporations sell the great bulk of what they produce to other people, not to their own employees — whereas even small countries sell most of what they produce to themselves, and big countries like America are overwhelmingly their own main customers.

To be sure, Krugman’s point that the national economy is more complex than even the largest company is clearly true, but insufficient by itself to distinguish meaningfully a nation from a business.  If the distinction were merely one of complexity, then a corporate CEO might be prepared for the presidency in the same way that a high school basketball coach might be prepared for the NBA.  This is not an entirely outlandish proposition, as the best high school basketball coach, although unlikely, may indeed be well-suited for a successful NBA career.  For the core, the primary substance of what one does as a basketball coach, is the same, no matter how complex the setting – which is to say that high school basketball is the same kind of thing as professional basketball.  Because of this, the skills suitable for one naturally translate to the other.  So if business were something like the minor leagues of government, Mr. Romney’s experience as an incredibly successful businessman may very well have prepared him for the Oval Office.

But the distinction between a nation and a business goes much deeper than complexity.  A business, no matter the industry, is always a group of people who organize their labor and assets in order to do one thing: make money.  And the performance of a business is easily judged, quantitatively, by the amount of money it makes – the “simple bottom line.”  By contrast, at least according to the US Declaration of Independence, government, the managers of a nation, is instituted to secure the unalienable rights of all people, among which are life, liberty and the pursuit of happiness.  There is no “bottom line” correlative to this standard, a standard which is notably, and by design, ambiguous.  So on the one hand, we have business, a group organized to maximize a single, easily quantifiable thing, and on the other hand we have government, a group organized to maximize an ideal, a concept, something that perhaps can be approximated, although not uncontroversially, by the term, the “general welfare.”

A nation, and the government that manages it, is thus not just much more complex than business, it is an entirely different kind of thing.

When Krugman indicates that the customers of business are mostly external while the customers of a nation are mostly internal, this is another way of underscoring the categorical difference between the two.  A business can layoff half of its workforce and be better off for it, so long as the layoffs have a positive effect on the bottom line.  In fact, the jobs created by business are not just dispensable, they are costs that always negatively affect the bottom line.  If a business could reduce its costs by firing all of its employees and replacing them with robots, it would not hesitate to do so.  Indeed, in certain instances the managers of the business may even have a fiduciary obligation to the owners to do this!  On the other hand, job loss is always a bad thing for a nation because people suffer when they lose employment.  Put another way, something that is clearly a benefit to a business’s bottom line can, and often is, a detriment to the general welfare.

Similarly, the same business that will not hesitate to replace its workforce with robots will also not pause to pollute the environment.  If the Onceler can sell more Thneeds and thereby make more money, it matters not that the river next to his factory has turned into gluppity glup and shloppity shlop.  Perhaps the community will object to this practice by refusing to buy Thneeds.  The Onceler may then tweak his factory in response.  But he would not be doing this out of concern for the general welfare of the community, he would be doing it because he could make more money without polluting.  Just as easily, if he could make more money by, rather than stopping the pollution, spending a few dollars on a misleading ad campaign to damper the community outrage against the gluppity glup and the shloppity shlop, the Onceler would not waver.

This is all to say that jobs and pollution are examples of business externalities – jobs are positive, pollution negative, both subordinate to the business’s primary task of making money.  And in this way, the business of government is not business at all, for those things that are external and subordinate in business, are the principal concern of government.

It follows from this that a business wizard, as Krugman writes, would have no special insight into the task of government.  And as it turns out, a seasoned business executive may even be particularly unqualified for government, as she may have the inclination to run government like a business, ignoring its fundamental directive to promote the general welfare.

Consider the Republican obsession with deficit reduction.  On the same web page where Mr. Romney touts his experience at Bain Capital, a banner heading reads, “We have a moral responsibility not to spend more than we take in.”  This is a very business-like approach to government.  The national debt looks something like a bottom line – it is quantitative and relatively simple to track.  The bigger the number gets, the larger the country’s long term obligations.  So in one important sense, deficit reduction is good insofar as it helps to lessen our long term burdens.  And if deficit reduction is made an end in and of itself, government indeed begins to mimic business with the clear implication that business experience is absolutely relevant to the work of government.  The former CEO, a skilled profit maximizer, will more naturally be able to treat cutting government services like cutting business costs.  Like the cost of labor to a business, which when eliminated helps the bottom line, the cost of, say, education, can also be discarded in order to help that bottom line. 

The obvious problem here is that with debt reduction as a primary concern (or any other narrowly conceived quantifiable measure), the effects of diminished government services become subordinate, even external.

To view government in this way is, charitably, a banal and gross oversimplification, realistically, a pernicious dismemberment of the one institution that is designed to protect the interests of all.  With debt reduction replacing the general welfare as government’s primary concern, the victims of austerity whose interests must necessarily be considered for the general welfare, become bothersome externalities, like gluppity glup and shloppity shlop.  One need look no further than Florida, where former business executive Governor Rick Scott, during its worst tuberculosis outbreak in 20 years, supported closing the state’s only tuberculosis hospital, citing budget constraints.  This decision no doubt helped the state in one sense by reducing the financial burden of the tuberculosis hospital.  But at what cost to society?

Government, in order to do what our Declaration of Independence says it is to do, must balance the many values, some of which are competing, that comprise the general welfare.  A business executive is particularly unsuited for this task, as the inclination to impose a simple bottom line upon the populace, as we’ve seen in Florida and elsewhere, is too strong.

Mr. Romney says we have a moral responsibility not to spend more than we take in.  Mr. Jefferson says we have a responsibility to secure the unalienable rights of all people, among which are life, liberty and the pursuit of happiness.

I’m with Jefferson.

Nate Silver has written a nice piece analyzing the effects of voter ID laws.  The take away?  The laws definitely have a negative effect on turnout, but perhaps not a very big one.  My position is the same, that these laws are bad for democracy - our problem is turnout, not fraud.  And generally, I believe that the supporters of any law that is not a Pareto Improvement (makes someone better off without making anyone worse off) bear the burden of presenting a cost benefit analysis in support of the law - in this case, that the fraud problem is so bad that a reduction in voter turnout is justified.  I have yet to see this analysis. 

This is fantastic article from Andy Kroll at Mother Jones for anyone interested in learning about the history of US legislative (and judicial) attempts to address the corrupting influence of money on politics. 

On April 15, 1947, Jackie Robinson stepped onto Ebbets Field in Brooklyn, the first American of black African descent to don the uniform of a Major League Baseball team.  While the future Hall of Fame player didn’t help his team much that game – he failed to get a hit – he did that day change the game forever.  Robinson, a sadly necessary American hero, famously broke what is often referred to as the “Color Line” in American baseball.

Today, our democracy has a similar line, a “Money Line”, and this line is in dire need of breaking.

Now, in one important sense, we all have equal access to our democracy – on election day.  But as I’ve written before, democracy does not begin and end on election day.  On the contrary, election day is but the culmination of the 364 previous days during which the hard work of democracy actually happens.  Indeed democracy occurs every day, in many different forms, through the exercise of our sacred, constitutionally protected right to free speech.  And this right, as with all of our rights, is bestowed upon us equally, in accordance with the fundamental assumption of democracy – that, as Thomas Jefferson wrote in our Declaration of Independence, we are all created equal.

Thus, if we analogize democracy to baseball, our ability to speak correlates to a baseball player’s ability to step onto the field. In this sense, when we are silenced, we are prevented from stepping onto the field of democracy.

But alas, speech, that indispensable precondition of democracy, is a complex concept.  It is much more than just the utterance of vibrations from one’s oral cavity.  It is the wearing of a ribbon, it is the flying of a flag, it is any number of limitless symbolic gestures.  Speech is, in a word, communication.  And the form of such communication is only limited by the human imagination.  As such, certain actions, call them speech-acts, that are undoubtedly speech, are often also undoubtedly other things.  In extremely limited circumstances, the speech element itself of a speech-act can be restricted (think shouting “fire!” in a crowded theater).  And in other limited circumstances, when the non-speech element of a speech-act involves an action that is or can be deleterious, we as a society are confronted with the challenge of balancing the speech-value of the entire speech-act against the potentially harmful consequences of its non-speech elements.  Thus under certain very limited circumstances where the inimical effects of a speech-act are deemed to outweigh its speech-value, the speech-act may be properly regulated.  These balancing maneuvers are the primary concern of the law of free speech.

In this regard, money most certainly is speech.  Or perhaps more precisely, the act of spending money is one kind of speech-act.  And this kind of speech-act contains a unique peculiarity that demands enhanced scrutiny.  For money is the great commodifier.  When we spend money, we necessarily purchase something, often many things, both explicit and implicit.  If, for example, a person purchases $100,000 worth of television advertising attacking the opponent of an incumbent member of Congress, that person most obviously purchases time on our televisions.  But less obviously, that person also purchases a number of other things, including a larger voice than most of us can afford as well as access to the incumbent member of Congress that is not available to the general public.  In this way, the speech manifold of money allows those with more money to participate in democracy, legitimately and illegitimately, on a level that is entirely inaccessible to the overwhelming majority of citizens.

American law has recognized this problem of the corrupting influence of money on politics for over 100 years.  Yet due to two relatively recent (1976 and 2010) Supreme Court decisions, it is now unconstitutional to limit the amount of money spent on political (so-called) independent expenditures (for individuals, Buckley v. Valeo, and for corporations and unions, Citizens United v. FEC).

As a result of this breakdown of law regulating political expenditures, a “Money Line” in American democracy has been drawn.  On the one side sits the monied citizens, David and Charles Koch, Sheldon Adelson, George Soros, who partake in the Big Leagues of democracy.  On the other side sits the rest of us, relegated to the stands.  All the while the egalitarian foundation of our democracy disintegrates, as Jefferson’s Declaration, that we are all created equal, is replaced by Orwell’s maxim, that “all animals are equal, but some animals are more equal than others.”

Which brings us back to Jackie Robinson.  His breaking of baseball’s Color Line was a general achievement for the game itself, not for any single team.  Similarly, a shattering of the Money Line would be an achievement for democracy itself, not for any single political party.  Accordingly, the Money Line should be a non-partisan issue that even the most diametrically opposed ideologues should be able to rally against.  But just like baseball’s Color Line, democracy’s Money Line is not an explicit rule.  It cannot be found in any law or regulation.  It is an implication, an understanding, a manipulation of otherwise innocuous-seeming adornments.  In baseball, baleful racism was concealed under the veil of freedom of contract.  In government, sinister plutocracy is wrapped in the husk of freedom of speech.  As a result, change of any non-trivial import is notably arduous.  The efforts of no one individual will suffice.  For while Jackie Robinson is singly credited with breaking the Color Line, his efforts, although heroic, were but the last drop in the bucket previously filled with the sweat and blood of countless others, from the thousands of Negro League baseball players to the armies of civil rights activists.  In the same way, breaking the Money Line won’t happen overnight and will require massive effort from a great many citizens.

But the first step of any problem is acknowledgment.  If you are frustrated with your government, if you feel like you have no say, perhaps you are sitting on the wrong side of the Money Line of American democracy.  In which case, I implore you to engage this problem.  Consider the possibility of publicly financed elections and a constitutional amendment to ensure the integrity of our democracy.  Look at the work of and get involved in grassroots organizations dedicated to the return of government to the people, such as Rootstrikers, Wolf PAC and The Coffee Party USA.

Most importantly, refuse to let your voice be consigned to the back stage of democracy.

The tag line to this blog is a an attempt to liken Libertarianism to alcoholism.  This seems to have confused some readers.  My apologies for the (apparently) failed witticism!  I may change the line when I think of something better.

In any case, while I now cringe at Libertarian reasoning, I once embraced it.  Its hollow notions of freedom can be intoxicating, especially to people who don’t like authority (see youth support for Ron Paul).  As such, it was the perfect recipe for my adolescent mind.

One glance at the substance of this blog, however, will reveal that I have long since abandoned Libertarianism.  But somewhere, deep in the (putrid) bowels of my brain, there remains a few ounces of empathy for the Hayek worshipers of the world.  It is from those few ounces, as buried as they may be, that I muster the optimism necessary to convince myself that perhaps, like a younger me, some Libertarians can be reached.

Accordingly, when I get around to it, I hope to deliver a longer reasoned argument designed to lure thinking Libertarians.  Until then, I’ll have fun linking to others discussing the subject: for now, see here, here, and here.

Tomorrow, Wisconsin voters will decide whether or not to recall their governor and four of their state senators, all Republicans.  The catalyst behind this recall effort is 2011 Wisconsin Bill 10 which, among other things, reduced the compensation packages and removed the collective bargaining rights of many of Wisconsin’s public employees.

In defense of this Wisconsin law, and others like it around the country, Conservative commentators often point out with condescending zeal that public sector worker compensation is on average higher than corresponding compensation in the private sector.  This, they proudly declare, is incontrovertible evidence that public sector workers are overpaid!  Indeed, the Wisconsin recall is thus excoriated as “populism of the privileged”.  Never mind for a moment the veracity of their empirical claims, which are quite a bit more nuanced than the political right would have you believe.  Data alone will not get us from the proposition that a worker is paid something to the claim that the worker ought to be paid something else.  After all could we not just as easily pronounce, pointing to the same evidence, that it is not the public sector workers who are overpaid, but the private sector workers who are underpaid?

If Jack makes $10/day and Jill makes $20/day, can we say that Jill should make less or Jack should make more without knowing first how much it costs to sustain a decent life?

This is a question about the principle that guides us to our definition of fair and just compensation.  It is this principle that is the real catalyst behind the recall election in Wisconsin.

With those conservative commentators and their Republican champions, the principle in question seems to be the free market itself.  That is to say that compensation is just if and only if it is dictated by the free market, i.e. some combination of a number of market factors such as the competition among employers for workers and the value of the corresponding work for an employer’s bottom line.  A worker’s compensation, and thus his ability to sustain a decent life, is only a byproduct of his market worth.  The worker’s individual interests are completely irrelevant to the market principle calculus.  So if $19/day is necessary to sustain a decent life, the market principle proponent will still claim that Jill is grossly overpaid, pointing to Jack and his personally inadequate yet market-blessed wages.

Of course, such proponents will invariably argue that a rising tide lifts all ships.  While it is possible that the Jacks of the world could be left behind, so the polemic would go, in reality, his life will ultimately be better because of all the innovation and other wondrous achievements of the free market.  But even if this spurious claim were true, is it not backwards?  Shouldn’t it be the primary purpose, and not just a beneficial byproduct, to lift all ships?

We are defined not by the level of the tide, but by the number of ships run aground.

So let us start with a principle of fair and just compensation that seeks to provide for a decent living wage to all workers.  From this perspective, when evaluating public sector compensation, similarly situated private sector compensation may still be informative, but it is most certainly not dispositive.  How completely out of touch with reality and removed from any non-vapid notion of morality does one have to be to call a fight for the teachers of Wisconsin a sort of “populism of the privileged”?  As if advocating for Jill and advocating for Jack were mutually exclusive endeavors.

And this brings us to the question, or smokescreen, of hard choices.  The Republicans who passed the Wisconsin bill did so in the name of fiscal responsibility.  Wisconsin’s budget was undoubtedly in turmoil.  Something had to be done.  But to strip collective bargaining rights and force reduced compensation without even attempting to negotiate is to give a haircut with a guillotine.  If the Republicans had made a good faith effort to negotiate a shared sacrifice, the recall probably would never have happened.  Instead, they proclaimed “let them eat cake” and proceeded with reckless abandon.

And here we are.

Stand with the public servants of Wisconsin.  Even if the recall effort fails, let it serve as a message: that fair and just compensation is not derived from the free market, but from the interests of the people to live a decent life.

A comment to my previous post eloquently stated a frustration that I think is rather common among Americans, that we have “a “stake” [in government] in the same way that flotsam has a stake in the ocean currents.”  This vivid metaphor strikes a chord with me because it embodies the sort of cynicism that can cancerously eat away at democracy.

By contrast, consider the following quote from the New York Times, covering the historic free elections held in Egypt this week, “”It is like honey to my heart,” said Mohamed Mustafa Seif, 36, an accountant voting in downtown Cairo. “For the first time in my life, I feel like I have a role to play. My vote could possibly make a difference.”“

Why is it that we Americans, who enjoy historically unprecedented freedom and quality of life, feel like flotsam in the ocean, whereas Mr. Seif, whose freedom is nascent and fragile, feels like Winnie the Poo?  Is Mr. Seif simply tied to an irrational hope, a child not yet burned by the embers of reality?  Or do we have something to learn from him?

Mr. Seif believes that for the first time in his life, he has a voice.  This voice is certainly no panacea.  By all honest accounts, it is unlikely that daily life in Egypt will improve dramatically after the election.  But after generations of forced silence, the voice of the people will finally be heard.  For any single vote, even if defeated, there will be a record showing dissent.  And the ability to lodge such dissent, without the fear of reprisal, is what makes each individual vote profound.  For one dissenting opinion begets another, and the amalgam of dissenting opinions begets social power.  The voice of a single vote is itself a signal, a call, a communication to political allies, that while we may not win this election, we will be heard.  And perhaps, if we organize and persuade effectively, we may win and thus affect policy in the future.

Mr. Seif’s hope is the hope of democracy itself. 

Now he does have a role to play.  Now he can make a difference.

Under Hosni Mubarak, Mr. Seif was indeed like flotsam, being sloshed about by the tyrant’s unilateral current.  Now, he is part of an engine, cobbled together from equal parts, competing, among other similarly cobbled engines, for a chance to move that current.

If Mr. Seif’s engine is to be powerful enough to move the ocean’s current, however, it must be made up of much more than just votes.  It must contain a mechanism by which like-minded others are compelled to vote.  This is the hard work of democracy, manifested informally around the dinner table, at the water cooler and in the local bar, formally through political writing, activism and campaigning.  Mr. Seif himself does not have to forsake his career as an accountant to become a political activist, but hopefully, he will be free to do so if he chooses.  Only time will tell if his body politic will successfully preserve those freedoms, of speech, of expression, of organization, that are preconditions for the hard work of democracy.

Democracy does not lie at the end of a road like a pot of gold.  It is a process, an evolution.  Democracy is the road, littered with potholes and brigands, but nevertheless, as Mr. Seif seems to acknowledge, worth taking.

We in the United States find ourselves further down that road, yet we have become cynical.  Many of us seem to have forgotten that democracy does not begin and end on election day.  We cast our ballots and are done with democracy until the next election.  When we become dissatisfied by the state of our government, instead of engaging in the hard work of democracy as we are free to do, we opt to check out and thereby condemn ourselves to feeling like flotsam in the ocean.

But this feeling is self-inflicted.

We have a choice.  A precious choice.  A choice earned by the sweat and toil of our ancestors.  We are free.  We are free to debate.  We are free to organize.  We are free to persuade.

We are free to do the hard work of democracy.

So the next time you feel like flotsam in the ocean: knock on doors or make telephone calls for your favorite candidate, go to a town hall meeting, write an article, attend a Tea Party or Occupy rally, start a movement.  And if you still need motivation, think of the 80 million Egyptians and countless other people around the world who are hungry for the freedoms that you enjoy.

Cherish your vote.  Cherish your democracy.

Governor Roemer

Governor Buddy Roemer is an independent presidential candidate effectively running on a single issue: ending the corrupting influence of money on American politics.  Because I believe campaign finance is perhaps the one issue that must be resolved before anything else gets resolved, I am paying attention to Governor Roemer.  If you care at all about this issue, so should you.  If you do not care about this issue, take a few minutes here and here and, if you have some more time, read this book.

Alas, I don’t agree with the former Republican Governor on much other than his hallmark issue (I am far to his left), so I will not vote for him.  But because he may be the only viable national voice on the money in politics issue, I will do what I can to get people to pay attention to him.

Voter ID Laws

In an effort to learn more about Governor Roemer’s other positions, I participated in a Twitter town hall meeting that he held a little over a week ago.  One of my questions made the cut, here is the exchange:

—-

@ricsezen: Do you support voter ID laws such as the Texas law currently under judicial review? #AskBuddy

@BuddyRoemer: #AskBuddy @ricsezen Haven’t read the law in Texas but I don’t see what’s wrong with showing an id when you go vote. (1/2)

@BuddyRoemer: #AskBuddy @ricsezen It’s the most-important thing we do as citizens. I don’t believe in discriminating voters though. (2/2)

@ricsezen: @BuddyRoemer Do you then believe that voter fraud is a bigger problem than low voter participation? #AskBuddy

@BuddyRoemer: #AskBuddy @ricsezen No. We need more participation

@ricsezen: @BuddyRoemer If a voter ID law were shown to stifle participation, you wld be agst it even if it may prevent some kinds of fraud? #AskBuddy

—-

Governor Roemer’s equivocation makes it difficult to determine his position on the issue.  He is indeed a politician!  Nevertheless, he does at least seem to acknowledge what I think is the primary concern over these laws, namely that there is a tension between competing democracy-promoting values: the prevention of voter fraud and the encouragement of voter participation.  If we embrace one of these values without paying attention to the other, we risk doing more harm than good.  Accordingly, the issue demands empirical analysis.  That is, we need to determine whether or not there is in fact a voter fraud problem that warrants legislation and we also need to know how such legislation may actually affect voter participation. 

Here is a useful link describing the various voting laws around the country, including those introduced but not yet in effect.

I strongly oppose the Texas voter ID law as well as other similar laws around the country.  There is at least presumptive evidence that these laws would significantly stifle voter participation.  The Brennan Center for Justice at NYU has done some compelling work on this, particularly in addressing the “problem” of voter fraud.  I have not found a similarly compelling report supporting the opposing position.  Most of what I’ve seen focuses primarily on anecdotal evidence of voter fraud.  A bi-partisan commission has made a good faith effort to bridge the gap between the positions by issuing a report that is worth reviewing, but, I believe, ultimately falls short.

In the end, I believe that the voter ID laws popping up around the country at best solve a minor or non-existent problem and at worst intentionally disenfranchise likely Democratic voters.  But don’t take my word for it, look at the data and make your own decision.

They are in Afghanistan, five of them, killed by US bombs.  Today at least, tomorrow who knows.  All “collateral damage” for which the US military is “greatly saddened.”

Are you also greatly saddened?  Or have you been able to so internalize the moral justification for such killings that you find them unnewsworthy?

Perhaps you hadn’t heard the story at all, that a woman and five of her children, three girls and two boys, were killed Friday night by an errant US airstrike in southwestern Afghanistan.  Maybe you were watching CNN, where much of its news coverage focused on a failed plot, originated in Yemen, to destroy a civilian jet airliner.  The news media’s choice to highlight the sinister intrigues of the “bad guys,” no matter how serious, helps remind us why [insert euphemism for killing innocent people] is necessary.

It’s a good thing too, because if they didn’t, we might be forced to think about that Afghan family.

The clarity with which we enter our wolf suits and accept the case for war and human suffering in Afghanistan may be obfuscated by the forest of thoughts growing in our heads.

We may have to sail through the treacherous waters of moral deliberation, conceivably through night and day, possibly in and out of weeks, maybe even almost over a year.

We may consider the terrible screams of those dying children, the bloody tears in their terrible eyes, or the stiff lifelessness of their terrible hands.

It is conceivable that we could tame those thoughts by taking them on directly, without blinking once.  We could rule them, like kings.  We could engage in a wild rumpus of moral discourse, contemplating simultaneously the abstract specter of bellicose schemes and the hard, tangible fact of dying children.

But such a lugubrious rumpus can be lonely business, especially when we can smell, across the world, the sweet scent of certainty.

Why think about the cracking bones and ripping flesh of those poor children?    Why try to feel the horror their mother felt as she witnessed the massacre of her loved ones as she herself perished?

It is difficult to be the king of these facts.  If you’re not nimble, they may eat you up.

So let us cry “No!” to the terrible screams of those dying children, the bloody tears in their terrible eyes, and the stiff lifelessness of their terrible hands. 

Let us escape these wild things, wave goodbye and sail back, over a year, and in and out of weeks, and through a day, to our very own news media, where we will find intoxicating certainty…

And it will still be hot.

I would like to respond to Professor Rajan’s recent article entitled The Trouble with Libertarian Paternalism, published at Project Sydicate.

I take Professor Rajan not to be criticizing libertarian paternalism itself, but just those forms of it where the free choice offered “leaves paternalism largely unconstrained.”  Indeed, Rajan asks at the end of his article, “Would it not be far better to force conscious choice in order to limit the consequences of paternalistic mistakes?”  But what, I ask, would be left if we were to force a so-called conscious choice?

One part of the Thaler/Sunstein thesis in Nudge that I find very compelling is the concept of “choice architecture.”  The backdrop to this concept is the idea that all choices are made in context and that sometimes the context of the choice has as much to do with the choice as the substance.  Nudge highlights many examples of this phenomenon, from the placement of groceries in a store, to the size of a container of food, to (as Rajan notes) the default option in a financial savings plan. If we accept this phenomenon, Nudge argues, then we can realize that we may implement paternalistic policies in a softer, less coercive manner by constructing the context that may lead to, rather than force, a particular choice.  This construction of context is “choice architecture.”  

With this in mind, Rajan’s complaint about certain forms of libertarian paternalism is that the choice architecture manifested therein is too overbearing and thus dangerous because of the inevitable blunders of the government’s reliance on conventional wisdom.  For example, let’s say that people are overwhelmingly likely to choose a default option investment plan, regardless of its substance (and for whatever reason).  Rather than going through each option and weighing its pros and cons against his or her particular preferences, people can, and tend to, rely on the judgment of the government.  But why, Rajan argues, is the  government’s judgment any better than the individual’s?  The  government typically tries to enforce conventional wisdom and conventional wisdom is often sorely wrong.  So why don’t we try to avoid the government’s debilitating adherence to the prevailing fad and have no default option?  Force conscious choice and the individual will emerge like a phoenix from the morass of the government’s paternalistic mistakes!

Alas, the picture is compelling, but upon closer examination, we see that Rajan’s phoenix traverses the morass only to find itself in an equally icky muck.

Perhaps a key point worth noting is that the absence of choice architecture is not the same as the absence of context.  Indeed, there can never be an absence of context as we do not make choices in a vacuum.  Maybe a person did not construct the context of the choice.  Nevertheless, there is still, at least in its barest form, a natural context, such as weather and time and other factors, that may have nothing to do with the choice, but still have a (sometimes substantial) effect on it.  

But more importantly, the government is not the only potential choice architect.  On the contrary, in our modern globalized society we constantly suffer an onslaught of solicitation from legions of would-be choice architects.  Turn on the television, perform a Google search, or simply drive down the highway and you will see (and be pushed rather than nudged by!) the work of sometimes pathetic but often brilliant choice architects.  Quite tellingly, Nudge is often sold in the business section of bookstores.

If we remove a default option investment plan, therefore, we are only removing the work of one choice architect, the government.  In embracing this path, Rajan fears the ability of the individual to resist the hidden and thus sinister paternalism of the government.  But why, I ask, should this fear stop at the pillars of congress?  Are people more likely to unearth and not be fooled by the sinister paternalism of, say, Apple, Walmart or Blue Cross Blue Shield?  Or are the overtures of the free market somehow less sinister than those of the fumbling dolts in government?  A choice made under government-originated choice architecture is no more a “semblance of choice” than a choice made under any other choice architecture.

Now, certainly the government holds a unique position, with coercive power unlike that of any for-profit corporation.  But to highlight only this aspect of government is to ignore an equally important distinction, that government is uniquely accountable to those over whom it wields its coercive power.  We elect our government and in so doing hold it accountable for its failings (and its successes).  By contrast, a for-profit corporation is accountable only to its shareholders.  Succeeding in business is not tantamount to promoting the general welfare.  If it were, then perhaps the work of choice architecture for choices affecting the general welfare would be best left to the free market.  But even Professor Rajan acknowledges the need for some choices to be coerced by government.  Indeed, he argues that social security, a forced savings plan (more than just a coerced choice!), is “necessary in civilized societies.”  I whole-hearted agree with this assertion and I question why this context should be any different than any other context having to do with the general welfare.

As much as we may like to embrace the notion of free choice or choices unaffected by outside factors, our choices will always be made in context and thus may be susceptible to context-driven behavioral phenomena.  So if we must choose a choice architect, let us choose one with proper incentives and accountability.  For all its failings, government is uniquely suited to matters of the general welfare and thus uniquely suited as a choice architect in such matters.  The answer to a government failing is not to hand over its responsibilities to the craftiest bidder, but to rework government so that it may get it right the next time.