Vernon Smith's view of the world:
Posted by DeLong at November 15, 2002 02:24 PM | TrackbackRedwood Dragon: Experimental Libertarian: Vernon L. Smith is an experimental economist who recently won the Nobel Prize for Economics "for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms." He started his intellectual odyssey as a socialist, but as he learned more about economics, and began conducting experiments to test the received wisdom of the field, his socialist tendencies faded and he now calls himself a libertarian. Interviewed in the December 2002 issue of Reason Magazine (not yet online), he describes libertarianism as follows:
For me, libertarianism is tied to a certain set of recognitions: that all organizations have the problem of decentralized information, that decentralized mechanisms are the best way to organize that information to produce good outcomes, and that the best results come when the individual is free to make his or her own tradeoffs while aggregating information. That's true whether we're talking about politics or economics or even social interaction. The best systems maximize the freedom of the individual, subject to the constraint of others in the system.
It's reassuring to read that experimental economists think like that... And I must say that I kind of like this definition of libertarianism...
Posted by: Jean-Philippe Stijns on November 15, 2002 03:45 PM"The best systems maximize the freedom of the individual, subject to the constraint of others in the system."
Who would disagree? Talk about the devil being in the details.
Best,
Posted by: Stephen J Fromm on November 15, 2002 05:53 PMThis sorts of Libertarian talk always assumes that the information necessary to make informed decisions is just floating out there waiting to be used. As if.
To take just one example, look at how high-end data-bases go through amazing legal contortions to make sure that users simply are not allowed to publish their experiences regarding the speed of the software. Or look at how closely a company like Microsoft guards information about how much is charges different customers for Windows.
In the absence of the state, exactly where does the information necessary to make these decisions come from?
Why do libertarians always come across as so absurd? Let us have libertarian soldiers and police and fire fighters and public [oops] school teachers and roads and traffic signals and airports and, well, everything. Wish I were so naive.
Posted by: on November 16, 2002 01:36 PM"The best systems maximize the freedom of the individual, subject to the constraint of others in the system."
Stephen Fromm writes, "Who would disagree?"
Every single elected Democrat in Washington DC! And virtually every single elected Republican...with the exception of the honorable Ron Paul of Texas, former Libertarian candidate for President.
Let's look at the present airport security mess, to take only one example of not "maximizing the freedom of the individual":
Last I checked, there is a NATIONWIDE ban on parking within 100 yards (or whatever nonsensical distance it is) from airport terminals. Talk about centralized and stupid decision-making! It wipes out THE most valuable short-term parking here at the Raleigh-Durham (NC) airport...and I imagine in many other airports. Probably costs RDU alone several thousand dollars per day.
I heard a radio interview of an airport manager who bemoaned the "one-size-fits-all" federal government restrictions on "his" airport. He pleaded to be allowed to make an *individual* choices for his airport. Tell him what the security concerns are, and he'd come up with a way to address them. For example, the RDU terminals have virtually NO glass facing the parking lots, where many airports have massive amounts of glass facing the parking lots. Surely, for example, it's just as safe to have parking within 50 yards, if there are walls, rather than glass and 100 yards?
And then there's the matter of pilots carrying guns. Why can't each *airline* choose whether or not their pilots carry guns? Why does the *federal government* have to make such a decision...again, "one-size-fits-all"?
For that matter, there's passenger screening...presently, the feds require that silly "take-off-your-shoes and open your carry-ons" for every "X" customers. Even if that "X" customer is a grandmother with her 5-year-old-grandkid! When, in entire history of aviation, or even in the entire history of crime, has a hijacking, armed robbery, assault, etc...been carried out by a grandmother with her 5-year-old grandchild?!!! It's positively insane! And the next customer, who isn't checked, is a 6'-2" 20-something, with first name Mohammed. (Which Transportation Secretary Mineta insists MUST make no difference in checking procedures!) Why in the world, once again, can't each individual airline decide who to screen (if anyone) at the gate?
Moving on: Don't even get me started on the federal government (under both Democratic and Republican administrations) over-riding state referenda-based laws, and persecuting/prosecuting SICK AND DYING people, whose only "offense" is that they and their doctor's agree that medical marijuana may help relieve their symptoms. That is not simply outrageous and unconstitutional, it's *immoral* and evil.
And surely no one thinks that Social Security (to name only one socialist program) "maximizes freedom of the individual"? It's a completely mandatory system! Young folks (i.e., post-baby boomers) can't "opt out" of the system, no matter how lousy a deal they are going to get. (And many of them are going to get a very lousy deal.)
In summary, there is virtually NOTHING "libertarian" about the federal government of the United States today.
That can clearly be seen by the fact that Libertarians, so far, haven't come even close to being elected to federal office (except for Ron Paul, who had to switch parties to do it).
Mark Bahner (lonely in libertarian land)
P.S. Except for an inordinate number of libertarian economists: e.g., Vernon Smith, Milton Friedman, Thomas Sowell, Walter Williams, Peter Boettke, Richard Eberling, George Selgin, Mark Skousen, Stephen Moore, the late Julian Simon...and others whose names presently escape me.
P.P.S. Oh, throw in David Friedman, too. He's technically an anarchocapitalist...but that's merely a step or two towards smaller government.
Posted by: Mark Bahner on November 18, 2002 09:39 AM"In the absence of the state, exactly where does the information necessary to make these decisions come from?"
You're right. Without the omniscient (and omnipotent...or is that omniimpotent?) State telling us everything we need, we wouldn't even know that it's not a good idea to use a hair dryer in the shower.
P.S. How does what Microsoft charges *other* customers help one in deciding whether or not to purchase Windows? There's a price tag, and one either wants it at the advertised price, or one doesn't. (It seems to me that the only important pricing information is between Windows and competitors, e.g. Linux, Apple. THAT information is certainly available.)
Posted by: Mark Bahner on November 18, 2002 09:50 AM"Why do libertarians always come across as so absurd?"
Possibly because you're never even spent a minute thinking about the necessary and unnecessary activities of government?
"Let us have libertarian soldiers and police..."
And THIS shows you don't know anything about libertarianism, either. There would be NO difference between "libertarian" soldiers and police, and "non-libertarian" soldiers and police. Except that *libertarian* U.S. soldiers wouldn't be stationed in 100(!) countries, all around the globe. And *libertarian* police wouldn't be wasting their time busting pot-smokers, while rapists and murderers roamed free.
" and fire fighters and public [oops] school teachers and roads and traffic signals and airports..."
Yes, let's *have* all those things. Experience has shown that all of those things can be provided--often with improved performance--by free markets.
Posted by: Mark Bahner on November 18, 2002 09:57 AM
Mark - Amen.
Posted by: JT on November 18, 2002 12:09 PM"Why do libertarians always come across as so absurd?"
Oh, and one more thing. This question also shows that you have absolutely no concept of the history of the U.S. government.
The U.S. government was founded mostly by men who were "libertarian"...with the huge exception of their position on slavery.
In fact, federal government spending during peace time never exceeded about 4% of GDP until the New (aka, Raw) Deal. Contrast that with current federal government spending of 19% of GDP.
http://www.house.gov/jec/growth/govtsize/fig-3.gif
But libertarianism *doesn't* "maximise freedom". It's explicitly not a maximising doctrine. For example, if my freedom could be momumentally increased by abrogating Vernon Smith's property rights (say, by stealing his pencil to sign the papers that let me out of jail), libertarianism would not allow this.
Libertarianism is the doctrine that property rights be infringed as little as possible ('twould be more accurate to call it "propertarianism").
I think that the phrase "subject to the constraint of others" in Smith's formulation is about as weasel as I have seen words this year!
Posted by: DD on November 21, 2002 05:03 AM"Libertarianism is the doctrine that property rights be infringed as little as possible ('twould be more accurate to call it "propertarianism")."
No, the most accurate term for libertarianism is "liberalism." But, of course, "liberals" have made the word "liberal" offensive to any TRUE (aka, classic) liberal.
To call "libertarianism" "propertarianism" ignores the fact that libertarians are much more liberal on a host of social issues than are "liberals." For example, how many "liberals" have called for a complete end to the War on Some Drugs? How many "liberals" support allowing same-sex marriages? How many "liberals" think laws against prostitution should be abolished?
"I think that the phrase "subject to the constraint of others" in Smith's formulation is about as weasel as I have seen words this year!"
Yeah, right! So your alternative is to allow people the freedom to physically hurt or defraud others? Smith's observation merely paralleled your own example (without being so extreme). Smith is merely pointing out the widely accepted homily that, "Your freedom to swing your fist ends at my nose."
Posted by: Mark Bahner on November 26, 2002 02:29 PM