Authoritarians

I always get a kick out of the uber-pedantic tone of robertdfeinman's comments on various econ-related forums. He is one of those I describe as practicing the ideology-free ideology: he, among all of us, has somehow managed to purge himself of all bias and has become the unbounded rationalist. After getting some attention from similarly unbiased Mike Huben for an article which dissects Masonomists such as Tyler Cowen, Alex Tabarrok, and Bryan Caplan by pointing out that they must be wrong because - ready? - their institution received funding from Charles Koch [1], Mr. feinman has discovered a new whipping boy: Bob Altemeyer.

Bob Altemeyer is a professor of psychology and author of a book, freely available over the internet, called The Authoritarians. It's definitely worth a read. This is a mostly even-handed book about people who have authoritarian tendencies. It includes a quiz which becomes the basis for a wide variety of experiments to test what authoritarians will do. He calls the quiz score the "Right Wing Authoritarian (RWA)" scale.

Curiously, by "right-wing", he doesn't mean "Republican". At times, I get the impression that he may actually be a Republican who happens to resent the takeover of that party by religious conservatives (except that he's Canadian and would therefore be something altogether different, eh?). And he cautions readers to avoid conflating "conservative" with "Right wing authoritarian"; he says

Authoritarian followers usually support the established authorities in their society, such as government officials and traditional religious leaders. Such people have historically been the "proper" authorities in life, the time-honored, entitled, customary leaders, and that means a lot to most authoritarians. Psychologically these followers have personalities featuring:

1) a high degree of submission to the established, legitimate authorities in their society;
2) high levels of aggression in the name of their authorities; and
3) a high level of conventionalism.

Because the submission occurs to traditional authority, I call these followers right-wing authoritarians. I'm using the word "right" in one of its earliest meanings, for in Old English "riht" (pronounced "writ") as an adjective meant lawful, proper, correct, doing what the authorities said.

In North America people who submit to the established authorities to so you can call extraordinary degrees often turn out to be political conservatives, them "right-wingers" both in my new-fangled psychological sense and in the usual political sense as well. But someone who lived in a country long ruled by Communists and who ardently supported the Communist Party would also be one of my psychological right-wing authoritarians even though we would also say he was a political left-winger. So a right-wing authoritarian follower doesn’t necessarily have conservative political views. Instead he's someone who readily submits to the established authorities in society, attacks others in their name, and is highly conventional. It's an aspect of his personality, not a description of his politics. [emphasis added]

Indeed, in his 1996 book, The Authoritarian Specter, he includes a chapter on Left-Wing Authoritarianism (LWA). It is perhaps best to understand the RWA in the context of what he has to say there:

When I began talking about "right-wing" authoritarianism (RWA, p.152), I was not using the phrase in an economic or political sense. Instead I was (brazenly) inventing a new sense, a social psychological sense that denotes submission to the perceived authorities in one's life. In many instances, the established authorities tend to be people who hold right-wing economic and political views -- but not always. In Communist countries, the established authorities in society held a decidedly left-wing economic philosophy, but after so many tears in power, the party leaders had become the Establishment. So I predicted persons who scored highly on the RWA scale in the USSR would support the Communist leadership and oppose democratic reforms (EOF, p. 264), and by thunder they did.

Revolutions such as those in eastern Europe call off all bets for a while. But the situation in stable countries seems more predictable. Psychological right-wingers (by definition) support the perceived established authorities in society, and psychological left-wingers [emphasis in the original] (as I am using the term) oppose them.

I am not assuming anything about what the "opposers" stand for. Some may simply want society reformed so that disadvantaged groups can share more of the power. The African National Congress and civil rights groups in the united States come to mind. But others may want to seize all the power themselves, from either the far reaches of the political left (Communists) or the political right (Nazis, the Posse Comitatus, Lyndon LaRouche's National Caucus). Such extremist groups, while submissive to their own perceived "legitimate authorities," would be psychological [emphasis in the original] left-wingers on a societal level during their opposition to the Establishment. But should their movement attain power in the flash of a revolution, their strong submission to the new societal authority would make them psychological right-wing authoritarians on that level, as they became in Germany and Russia.

In other words, when robertdfeinman conflates "conservative" with "RWA", he dramatically misinterprets Altemeyer's work. An RWA is someone who supports The Establishment. Given that robertdfeinman and his allies enthusiastically support The Establishment, and that even Dani Rodrik says, "The real revolutionaries are the libertarians," I think it quite funny that robertdfeinman uses Altemeyer's work to accuse libertarians of being RWAs [2]. One wonders why the Libertarian Party would have contracted with Altemeyer to measure authoritarianism in the US if they were in favor of it. But those are questions that fall outside the ideologically-free ideologue's scope when "considering all sides".

That said, I don't understand why Altemeyer keeps coming back to statements that imply RWAs tend to be found in the Republican Party. No doubt, he can support this by his own empirical evidence. However, in my opinion the test he uses is based upon highly charged words that naturally select right-wing (political sense) biases toward those aspects of "traditional authority" which were traditional in, say, the 1950s or earlier. Were he to test RWA with biases toward the authority that has become traditional since then, I have little doubt that he would discover high correlation with RWA in the Democratic Party.

What do I mean?

• Why does statement 4 in his test state "Gays and Lesbians are just as healthy and moral as anyone else?" Politically right wing people are going to perceive the subject of the statement as both anti-establishment and politically let-wing. What would happen if you were to substitute, for example, "Homeschoolers". Homeschoolers are perceived by the left-wing as both anti-establishment and right-wing. See how Huben reacts on David Friedman's Ideas blog.
  
• Why does statement 5 use the phrase "rabble-rousers" in "It is always better to trust the judgment of the proper authorities in government and religion than to listen to the noisy rabble-rousers in our society who are trying to create doubt in people's minds"? That's a standard reference to anti-establishment left-wingers. What would happen if you subsituted "libertarians"?
• Statement 6 puts up atheists against regular church-goers. What if you put up anarchists against regular voters? In each case, you have anti-establishment vs. establishment, but one appeals to politically right-wing, the other to politically left-wing.
  
• Statement 8 asks you to pass judgement on nudist camps. What if it were Seasteading? Think that such utopian adventures would be ignored by the left? You would be wrong.
  
• In 10, why is it "perversions eating away at our moral fiber and traditional beliefs" instead of "runaway greed eating away at our moral fiber and traditional beliefs"? Surely I jest.
  
• In statement 12, the use of "old-fashioned values" is slanted at political right-wingers. What if "democratic values" had been substituted?
• In 13, the changes included abortion rights, animal rights, and abolishing school prayer. What if they had been natural gas deregulation, vouchers, and abolishing tariffs? In both cases, you are asking about their reaction to change of the status quo, but in one set you include changes favored by the political left, and in the other, changes favored by the political right.
• In 14, what if you ask whether the strong leader should crush greed and corruption instead of evil? Evil is a moral judgment favored by the political right, greed and corruption are moral judgments favored by the left.
• In 15, instead of "Some of the best people in our country are those who are challenging our government, criticizing religion, and ignoring the 'normal way things are supposed to be done,'" suppose it was "Some of the best people in our country are those who are challenging our government, criticizing corporations, and ignoring 'business as usual'"?
• In 16, instead of "God's laws about abortion, pornography and marriage must be strictly followed before it is too late, and those who break them must be strongly punished," what if it were, "Democratic laws about trusts, outsourcing and pollution must be strictly followed before it is too late, and those who break them must be strongly punished."?
• In 18, instead of "A 'woman's place' should be wherever she wants to be. The days when women are submissive to their husbands and social conventions belong strictly in the past," how about "A businessman's social responsibility should be whatever he wants it to be. The days when people are submissive to the government and social conventions belong strictly in the past"?

And so on. In other words, Altemeyer's framing appears to combine both psychologically and politically right-wing frames. I suggest combining psychologically right-wing and politically left-wing frames; I predict that you would find that the Progressives, Democrats, and (surprisingly or not) the non-ideological ideologues (collectively, progdemoniis) will get a high RWA score.

In fact, it is surprising that Altemeyer hasn't seen this himself. In the quoted section above, he notes that politically left-wing groups would shift (psychologically) from being left-wing to right-wing upon winning a revolution. Given that the progdemoniis were the revolutionaries 100 years ago, and have been the Establishment since then, and given the rabid defense that some of them make (spend an hour or so perusing the posts and comments on Daily Kos, Making Light, Crooked Timber, Mark Thoma blogs to see whether "rabid" is an unfair characterization) for the state, it seems remarkable that he didn't note this already. While Republicans are busy fighting for God and Country, Democrats argue for the existing State and Social Control. In each case, they are really defending their religion and traditions, respectively, where religion is "that which is taken on faith (the facts be damned)" and traditions are "that which we do because we always have".

Incidentally, it should be noted that my own RWA score was 40. It would have been lower, but I tended to be less radical whenever I thought the question was ambiguous. For example, if the question was "Atheists and others who have rebelled against the established religions are no doubt every bit as good and virtuous as those who attend church regularly," I see where the anti-authoritarian answer would have been strong agreement, but only if you also agree that regular church attenders are good and virtuous, or that atheist rebels like V. I. Lenin are in any way good or virtuous. I believe a person's claimed religious views may be completely independent of their goodness and virtuosity, but I didn't see a way to map that into the question as posed.


-----------------
[1] ad hominem:

The person presenting an argument is attacked instead of the argument itself. This takes many forms. For example, the person's character, nationality or religion may be attacked. Alternatively, it may be pointed out that a person stands to gain from a favourable outcome. Or, finally, a person may be attacked by association, or by the company he keeps.

For a longer list of variants on the theme, there is Dean and Marshall VanDruff's Conversational Terrorism: How NOT to talk. For a rule of thumb, try not to think of your opponent as DIE: Dumb, Insane, or Evil. And of course you want to avoid the Devil Shift.

[2] Judge for yourself how easily rdf's statements fall into the DIE regime of ad hominem argument. It might help to realize that Evil is an extreme description of corruption, Insane is the opposite of psychological health, and Dumb is an extreme form of ignorance:

First, are those who owe their livelihood to these corporate backers. ...

Second, are the unaffiliated libertarian or "free market" ideologues. These are the "faith based" people implied above. Like all ideological followers their need for a coherent picture of the world governs their belief system. It's a psychological thing.

Then there are the liberals who think that since their environment is a meritocracy and a bit anarchic that this must be true of their opponents as well. They tend to doubt that that can actually be a quasi-secret cabal behind the entire movement. It seems so un-American and unlikely.

Springtime

With the return of Spring, it's time to get back on the bikes. Not only does Kathleen commute, but I like it to get around and to exercise when I'm off work.

One of the things we like to do is to ride over to the Saturday morning Farmer's Market. Somewhere, I remember reading that McKibben's Deep Economy contains a statistic to the effect that 10 times more conversations are struck up in local markets like this than at Wal-Mart. I believe it - I usually don't bother asking Wally World employees for help because they generally are about as familiar with their own stock as I am. But the employees at both the local co-op usually know where to find stuff. Sure enough, the FM didn't disappoint.

The animal shelter was out with a pack of dogs. I met an old friend who was working with them; she said they had adopted out 7 dogs that day. I would have guessed 7 per week was about normal.

Then we came across a bluegrass band (The Salty Dogs). Many dogs sitting around, beckoning the wife to pet them. I struck up a conversation with Matt, who was riding a modified bicycle he used for "bike tramping". It was modified with an Xtracycle, which I thought would be something useful for grocery shopping. Matt had some, um, unorthodox views of the world, including a belief (that we did not explore) that the current economic downturn was intentionally arranged; that fluoride (which he described as an "iron oxide" class of chemical) was used to dumb down the population, a trick we picked up from the Nazis; that Kissinger was a criminal; that Godzilla-derived foods from Monsanto were poisoning us and causing diabetes; that those foods and water in plastic bottles were causing cancer; that this nation has a scary hive mentality; and some kind of anti-immigrant thing. As we parted, I realized that it's probably a good thing I keep my mouth shut since I probably come across the same way to the average person.

After that, my wife stumbled upon someone selling sewn goods [1] right across from someone with a ... is that? Yes, it's a Nolan Chart with dozens of little stick-on stars on it. No doubt as to who these people are. They were just packing up the booth (we got there late), so I stopped to confirm my suspicions. They saw me eyeing the chart, asked if I wanted to take the World's Smallest Political Quiz, I pointed to the top corner and told them I could save them some time if they would just put my star "here". They wanted to know if I wanted to join and I made a crack about being president of the Anarchy Club. "Oh, no, we're not anarchists, but someone called us ... what was that? Minimists?" I suggested, "Minarchists?" "Yeah, that was it." Er, several years ago, the Chair, the lonely, lonely Chair, asked if I would like to be Vice Chair of the county LP. I turned him down. Even then, I thought there was something vaguely wrong, and now I know (thanks to Kevin Carson) that the thing that bothered me most (still does) was the vulgarity of the LP. Anti-tax, anti-regulation, but not necessarily anti-large corporation. As if Wal-Mart sized organizations sprung up shortly after the foundations of the Ziggurat of Ur were laid.

Next up: someone advertising an Earth Day bicycle ride.

Then a woman selling some really interesting red chile sauce mix (note to MR readers: "chili" is a greasy concoction of beans and hamburger meat favored in Texas, "chile" is a red or green fruit noted for its spicy hotness and used in Mexican cuisine). Very good, less than half the price of the canned stuff we were using for enchiladas (its a very particular, locally canned sauce that we like), and much spicier.

Then, two people who were sitting in for the abuelita who sells fresh local herbs and spices (she may be a curandera?). Turns out she is the mother of one. Her meticulously packed plastic bags are hand-labeled, sometimes with very interesting descriptions and misspellings.

Then, our favorite vendor. We usually get a few sticks of incense from her for the shop. Today, she has a new dog that she just adopted (Buddy).

Then, we look at the interesting homemade breads, grains, nuts, and other stuff sold by a family who practices their own faith that seems to be an eclectic mix of Mennonism and Seventh Day Adventism. Good snack cakes, we got there too late to get any. On to the Asian artist who sells really, really decadent deserts, coffee cakes, etc.

Yeah, this is a lot more fun than Wally World or the Sons of Albert.

[UPDATE: Oh yeah, now I remember what Matt's anti-immigrant thing was: actually, it wasn't anti-immigrant so much as it was pro North American Union. He had implied that there was no real enforcement of immigration laws because, as we all know, the USA and the dollar are going to be gone in the next couple of years. Lest it be thought that I am tring to make him out to be a crackpot, let me say that he seems like a really nice guy and someone you'd probably want around in a Mad Max scenario.]

------------------------
[1] I learned from her that Albertson's is offering a $0.05 discount if you bring your own bags. I bought reusable bags from the Albertson's in Albuquerque. I take them into Wal-Mart with me. Gradually, I hope to get their checkers trained to hand stuff to me so I can load my own bag.

An example tied to the bold conjecture

So, my not-so-modest conjecture accused pragmatists of deriving ought from is. I don't think that any 21st century pragmatists are going to agree with any of the following, but I wonder whether their 18th and 19th century counterparts would have done so.

If you are going to look at a current state of affairs and conclude that, well, whatever is best for everyone, efficiency, progress, and all of that may be used as the bases for judging a policy (I don't, but then I'm an ideologue in their eyes), then I suggest that you must conclude that certain out-of-style labor policies in US history were good policy. Why?

As Pietra Rivoli relates in The Travels of a T-shirt in the Global Economy, Gavin Wright found institutional failure in the agricultural labor market in the south in the 18th-19th century. Cotton required labor to be available, sometimes on a moment's notice, to hoe weeds and to pick the cotton when it was ready. The weed-hoeing depended on rainfall in the spring, while the harvest went on for four months in the fall. Further, harvesting could not take place while the bolls were wet from rain, but then again, the bolls have a tendency to fall to the ground and/or get spotted and weak from rain, so the labor had to be available during harvest, within about 4-7 days after a rainfall. Markets for such labor could not exist in an era with poor communication and transportation.

Further, cotton yields apparently increased with farm size up to 600 acres. Thus, a large plantation was more efficient than a small farm. However, it would have been difficult for would-be large plantation owners to find white labor because they had to compete with a pesky competitor: land was relatively cheap, and almost no capital was required (not even a mule in the early days), so most white laborers could have run their own family farm. Since the family farm would have needed the same irregular attention as the plantation, no plantation could have gotten off the ground while the family farm existed. [1] Legally sanctioned slavery, practiced by paternalist owners, resolved the failure.

Dr. Rivoli proceeds to find similar issues in the post-slavery era. Sharecropping was another effective method of resolving the labor market problem, but there were two new problems (from the landowners' perspective): first, the tenants might borrow money from someone besides the landowner, breaking the dependency cycle, and second, the tenants might find higher paying work elsewhere. The former was thwarted through the passage of crop lien laws, cutting off the tenants' access to capital markets, while the latter was thwarted through such methods as vagrancy and anti-enticement, what Rivoli calls "alienation of labor", laws. Later, during WWII, the labor shortage created by wartime demand led to the creation of the Bracero program. Once again, the special conditions of cotton growing created institutional failure, which was addressed by (1) having the Department of Labor screen the workers for health, potential productivity, and absence of certain political tendencies; (2) restricting the laborers to only one employer so that they couldn't be bid away to the highest bidder; and (3) having specific numbers of workers ready to be picked up on the farmers' schedules.

In summary, the benefits are quite clear: cotton and then textile production sparked the Industrial Revolution, and later kept the Southern and then the West Texas economy afloat. The institutional failures are also quite clear: large farms reap economies of scale, but in the days when cotton production was labor intensive, there was no way to obtain the labor when and where it was needed, and at a reasonable price, because of the lure of family farms, other farmers, and competitive capital markets. We can see that your average, pragmatic, non-ideological, empiricist would have found the Bracero restrictions, and before them the legal restrictions on sharecroppers, and before them slavery, to be good things and beneficial state policies. Those pragmatists would have included Northern industrialists dependent on the cotton trade (especially the Lowells, but also New York shippers and financiers) as well as those who relied on the South as a market for manufactured goods, but certainly no small number of intellectuals supportive of Hamiltonian means would have defended the policies on the basis of the undeniable outcome. Those people who were committed to certain -- yech! -- Manchesterite, hyperindividualistic ideologies might well have been found in the company of the much-hated, unreasonable abolitionists.

I can hear the protests now: "Oh, but that's not what we mean! We're not in favor of efficiency at all costs."

Really?! Is there some sort of universal moral axiom that was violated by those policies?

-----------------------------

[1] We know from more recent experience that state intervention to increase the effective size of the farm is thought by empiricists to have been a good thing because it increased the percentage which any farmer could have left fallow. See, for example, this review of Tim Egan's The Worst Hard Times.

A Bold Conjecture

I have the germ of an idea that I need to present in three parts today, with an example in the near future. The three parts are An Interpretation, a Reinterpretation, and The Question Begged.

If we look at political economic history, we find that the state, especially the national government of the US, has evolved from a very simple set of rules (the Constitution was a few pages) to a very complex set of interlocking and sometimes contradictory rules, interpretations, agencies, and so on (the CFR is several volumes, best measured in linear inches rather than pages). The growth is due to the fact that at every stage, the rules created conditions for new problems which have to be addressed by new rules. For example, the rules which allowed transnational railroads to prosper led to the industrialization described by Chandler (energy + transportation => scale economy), creating the conditions for labor exploitation and unrest, followed by a new round of rules to constrain the industrialists and protect the workers, creating ... and so on. The explanation provided by the defenders of state intervention is that each of these changes has been largely beneficial, and that the few negative consequences may easily be managed by a new round of regulations that are also largely beneficial. They lay claim to pragmatism and empiricism, setting those in opposition to dogmatism or ideology, noting that they simply want to use the best means for achieving the best ends. We are all better off, so those policies were beneficial.

We could reinterpret this by working backwards. Today, we are better off than a generation ago, and a generation ago was better off than the previous generation, and so on. Thus, in order to get the improvements that we need today, it was good that they enacted those policies a few years ago. In order to get to the preconditions for today's prosperity, the need for previous policy choices are obvious. Thus, we should be grateful for those policies and for the idea of state intervention in general. For example, we need the current transportation system, so it was good that the state built roads. And to get the cars that ply those roads, we needed the railroads, so it was good that national regulations to govern railroads were put in place.

But this begs a question: What do they mean by "need"? In one sense, their argument is circular: in order to have the existing set of social, economic, and political mechanisms that we need to perpetuate the existing system, we had to have made those choices in the past. But why do we need the existing system? Indeed, why did the people in the 19th century need the railroad choices? "Need" means that a person or society can not continue to exist without those things. If anything, the fact that society had existed and evolved for thousand of years to that point without those institutions or policies is proof that those things were not needed in any meaningful sense of the word.

When the word "need" is used or implied, red flags should be raised. Who needs (or needed) it? Why? And is (was) the proposed policy the only way to achieve the need? And what, exactly, is needed? Remember this the next time you encounter one of the world's Polanyist, William Jamesist, pragmatic empiricists, who suddenly seem to have shed their pragmatism in favor of some Platonic ideal toward which their programs are working. Did society "need" the specific policies that were involved in the creation of transnational railroads? The railroad owners would appear to have needed them more than society at large; people wanting to farm profitably further west, further from water routes, markets, and hungry customers needed them; politicians wanting to influence the type of farmer in order to influence the type of state (pro- or anti-slavery) needed them; people wanting to enlarge the market for their manufactured goods and thereby increase profits (McCormick, for example) needed them; but those groups do not come close to comprising a majority of the citizens of the country. And if they had not gotten those policies -- laws regarding incorporation, bankruptcy, interstate regulation, subsidization and land transfers -- they still would have had other options, most of which would simply have been more expensive in the short run, but perhaps less so in the long run. For example, prior to the massive build-out of railroads, private roads and canals were all the rage. Fogel, in his response to Rostow, even noted that a horseless carriage existed in 1830 and that "not only the fundamental internal combustion engine theory, but even that of the diesel engine was published as early as 1824," citing D. C. Field's "Mechanical Road Vehicles" and Orville Charles Cramer's "Internal Combustion Engine" in A History of Technology (Charles Singer, ed., 1958) and Encyclopedia Britannica, (1961), respectively (see also Samuel Morey). As these predated the discovery of oil, they would have led to the creation of a more local, environmentally friendly, efficient (in the sense of having fewer externalities) transportation system and if a national system had evolved, it would have been more organic, i.e. the economies of scale would have driven the system rather than the system driving the economies of scale.

Bold enough?

Road conditions

A recent article on NPR stated that it would take $2 billion over the next decade to repair roads in Maine and "[t]he congressionally appointed National Surface Transportation Policy and Revenue Study Commission estimates that the cost of needed repairs is $220 billion -- at a minimum -- per year" to repair all of the nation's roads. This is seen as a crisis that requires federal subsidization and massive increases in federal and state funding. They are therefore starting to look at increasing gasoline taxes.

The last substantial increase in federal gasoline taxes took place in 1993. Given that we "only" used about 142 billion gallons of gasoline in 2006 (and similarly for 2007; high prices have caused a stagnation of fuel consumption), that means the federal government "only" collected about $26 billion. Given that the aggregate state collection is similar (state fuel taxes vary considerably, but average right around $0.18 as I recall), then "only" about $50 billion or so of the $220 billion is being collected. Your fuel taxes therefore need to climb from a combination of around $0.36 per gallon to something more in the neighborhood of $1.62, an increase of $1.26 per gallon.

May I suggest something else? What about supporting tolls? Though perhaps not very practical for intracity driving, they are eminently practical for freeway and bridge traffic. But first, there is a substantial obstacle to overcome: the belief, widely held in the US, that driving cars is a right and that roads should always be free. Clearly, we understand that roads and bridges are not really free, but the costs are hidden rather than explicit [1]. Tolls are a way of making those costs explicit.

As an exercise in noting how bad the anti-toll and especially anti-private infrastructure bias is, I will cite the Forbes article cited recently in the comments at MR as an example. The Ambassador Bridge is a privately built, privately owned bridge from Canada to the US near Detroit. It is the most popular bridge in the Great Lakes region: 3.3 million cross on the Ambassador vs. 3.6 million on the other four bridges combined. On 9/11, local government officials closed off the nearby car tunnel, and traffic subsequently backed up on the Ambassador. Truck wait times went to 12 hours because of the lack of border Patrol and Customs inspectors.

The tone of the article is as follows: Because some private person had the foresight to build a bridge at that location 75 years ago, and because it is the most popular truck crossing today, and because the state has not built a competing bridge nearby, somehow the owner is a bad guy. And because 9/11 brought about panic and security precautions that caused backups, the owner is a bad guy. And most of all, because he doubled toll rates for trucks and quadrupled them for cars in the past 25 years, he is a bad guy. Bottom line: private infrastructure is bad [2].

The point about toll raises is misleading. If there are four hour weight times at rush hour, this is a sure signal that the tolls are not high enough; perhaps they should consider higher tolls during the rush hour, the same way commuter trains do. If cars are Teh Bad because of pollution and AGW, then tolls should be higher everywhere, not just at the bridge (that's essentially what a carbon tax is). Here's the Environmental Defense Fund on the subject. Furthermore, bridge and road tolls have increased nearly everywhere in the past few years, not just on this private bridge. The tolls on the publicly operated San Francisco Bay Bridge were $1 in 1988, but are currently $4. That's a quadrupling in twenty years, quicker than the cited period of 25 years for the Ambassador. And London has famously begun charging congestion tolls to enter the gridlocked inner zones.

I think we can all agree that we rely on the transportation infrastructure and that we would like for it to be properly maintained. That is essentially a public good (not a pure public good, though). Every unavoidable pot-hole creates potential additional maintenance for the car owner. We would also like to see traffic reduced to the point that we don't experience delays and frustration. But fuel taxes are just one of several responses. Tolls that are reinvested in the roads are a better way of both directing the money to the most used infrastructure and directing the traffic to the best infrastructure. For example, if you had to raise tolls on a freeway to keep up the maintenance due to heavy truck usage to the point that shippers began shifting more of their traffic to more efficient railroads, that would be a good thing, no?

Oh, you did remember that railroads in the US are (for the most part) privately operated and maintained, didn't you?


-----------------------------------
[1] Note the parallel to education: we all know that school buildings, teachers, and books cost money, but the phrase "free education" is used without irony. May I also suggest a small, means-tested toll at public schools? You can call it whatever you want -- "tuition" or "user fee" -- so long as you collect it.

[2] Don't tell the people who believe that private infrastructure is impossible. They prefer the impossibility theorem to the malevolence theorem, but will fall back to the latter when it suits them.

Nth best, Posner-inspired

There are people out there who believe in this simple model:










This is a decision tree that says there are two choices: transactions with no problems -- no institutional failures, no externalities, a perfect market transaction -- and those that must be regulated. Of course, any regulation can be justified after the fact. If nothing else sticks, you can always invoke asymmetric or imperfect information, the last refuges of scoundrels.

But Posner makes an interesting point in Economic Analysis of Law that is rarely acknowledged by fans of regulation. He says,

Monopoly, pollution, fraud, mistake, mismanagement, and other unhappy by-products of the market are conventionally viewed as failures of the market's self-regulatory mechanisms and therefore as appropriate occasions for public regulation. This way of looking at the matter is misleading. The failure is ordinarily a failure of the market and of the rules of the market prescribed by the common law [emphasis added]. Pollution, for example, would not be considered a serious problem if the common law remedies, such as nuisance and trespass, were efficient methods of minimizing the costs of pollution. The choice is rarely between a free market and public regulation. It is between two methods of public control -- the common law system of privately enforced rights and the administrative system of direct public control -- and should depend upon a weighting of their strengths and weaknesses in particular contexts.

We can diagram this as:










But wait: it would be rare that a transaction would have a single institutional (market) failure, would it not? In fact, many if not most transactions are subject to multiple failures. The problem for the knee-jerk regulator is that they don't all work in the same direction. As I argued here, they may frequently cancel:

The state ownership of oil and the corresponding ease with which OPEC should be able to cartelize should raise the price, while externalities imply an artificially low price - which dominates? We know that the cost of our interventions in oil-producing regions is not accounted for in the price, but the risk premium brought about by the unstable regimes and regions that happen to possess the oil and our interventions in them is. Now add Hotelling into the calculus, and figure that the cartel members are going to cheat to drive prices downward, while federal taxes and regulations (not all of which are rational or efficient) raise the price.

So our decision tree now has four branches: no failure, self-canceling failures, common law, and regulation.









We can also add in the self-enforcing means open to private actors as suggested by Second Best Economist Dani Rodrik: repeated interaction, reputation, and collective punishment.













And since we're differentiating between types of self-enforcing agreements, why not differentiate between regulations? There are at least four; regulating inputs (as in the original Clean Air Act which mandated scrubbers), regulating outputs (as in mandating the use of MTBE in boutique fuels), taxation (alcohol) or user fees, and cap & trade (exemplified by sulfur dioxide markets created by the 1990 Clean Air Act).














This now looks like a rich spectrum of responses, many of which are open to private actors and therefore anarchists. I think it should be apparent now why I believe that regulations -- especially of the inputs or outputs -- are frequently a simplistic, unimaginative response to the particular class of institutional failures, real or perceived, known as market failures. True, not all are appropriate in a given situation, but it is rare to find a politician or state enthusiast who even recognizes that there are other options.

Promise of American Life (again)

In The Promise of American Life (part I here), Croly seems to accept the moral basis for socialism, but soundly rejects the Marxist formulas. Maybe this is what is meant by American exceptionalism?

In Socialism: Utopian and Scientific, Engels makes demands for gradual state takeover of private property. "In any case, with trusts or without, the official representative of capitalist society -- the state -- will ultimately have to undertake the direction of production. This necessity for conversion into State property is felt first in the great institutions for intercourse and communication -- the post office, the telegraphs, the railways." This nationalization was expected to lead to the whithering of the state:

Whilst the capitalist mode of production more and more completely transforms the great majority of the population into proletarians, it creates the power which, under penalty of its own destruction, is forced to accomplish this revolution. Whilst it forces on more and more of the transformation of the vast means of production, already socialized, into State property, it shows itself the way to accomplishing this revolution. The proletariat seizes political power and turns the means of production into State property.

But, in doing this, it abolishes itself as proletariat, abolishes all class distinction and class antagonisms, abolishes also the State as State. [1]

Croly would have nothing to do with that; in his estimation, the men (Hill, Harriman, Morgan) who built the great industrial concerns contributed to the national efficiency. Rather than banishing them, Croly wanted to harness them (and maybe control the amount of money they made [2]). His methods of regulating therefore consist of removing impediments to them, including the Sherman Act, and replacing it with a system of commissions who would review their decisions and make them more transparent. To what end? National efficiency, of course (the man had an efficiency fetish). But Croly was unsatisfied with the idea of a commission, since efficiency would normally require responsibility to be placed with one man; but by favoring national commissions, at least it gives him a way to preserve private property even as he expands the scope of the national government. Sounds like ... ?

The constructive idea behind a policy of the recognition of semi-monopolistic corporations is of course the idea that they can be converted into economic agents which will make unequivocally for the national economic interest; and it is natural that in the beginning legislators should propose to accomplish this result by rigid and comprehensive official supervision. But such supervision, while it would eradicate many actual and possible abuses, would be just as likely to damage the efficiency which has been no less characteristic of these corporate operations. The only reason for recognizing the large corporations as desirable economic institutions is just their supposed economic efficiency; and if the means taken to regulate them impair that efficiency, the government is merely adopting in a roundabout way a policy of destruction. Now, hitherto, their efficiency has been partly the product of the unusual freedom they have enjoyed. Unquestionably they cannot continue to enjoy any similar freedom hereafter; but in restricting it, care should be taken not to destroy with the freedom the essential condition of the efficiency. The essential condition of efficiency is always concentration of responsibility; and the decisive objection to government by commission as an efficient solution of the corporation problem is the implied substitution of a system of divided for a system of concentrated responsibility.

This objection will seem fanciful and far fetched to the enthusiastic advocates of reform by commission. They like to believe that under a system of administrative regulation abuses can be extirpated without any diminution of the advantages hitherto enjoyed under private management; but if such proves to be the case, American regulative commissions will establish a wholly new record of official good management. Such commissions, responsible as they are to an insistent and uninformed public opinion and possessed as they inevitably become of the peculiar official point of view, inevitably drift or are driven to incessant vexatious and finally harmful interference. The efficient conduct of any complicated business, be it manufacturing, transportation, or political, always involves the constant sacrifice of an occasional or a local interest for the benefit of the economic operation of the whole organization. But it is just such sacrifices of local and occasional to a comprehensive interest which official commissions are not allowed by public opinion to approve. Under their control, rates will be made chiefly for the benefit of clamorous local interests, and little by little the economic organization of the country, so far as affected by the action of commission government, would become the increasing rigid victim of routine management. The flexibility and enterprise characteristic of our existing national economic organization would slowly disappear, and American industrial leaders would lose the initiative and energy which has contributed so much to the efficiency of the national economic system. Such a result would of course only take place gradually, but it would none the less be the eventual result of any complete adoption of such a method of supervision. The friends of commission government who expect to discipline the big corporations severely without injuring their efficiency are merely the victims of an error as old as the human will. They "want it both ways." They want to eat their cake and to have it. They want to obtain from a system of minute official regulation and divided responsibility the same economic results as have been obtained from a system of almost complete freedom and absolutely concentrated responsibility.

This section of the book reminded me of those sections of Gabriel Kolko's Triumph of Conservatism, in which he traces Teddy Roosevelt's preference for regulating behavior by the Good Ol' Boy method. TR, the renowned trust-buster, didn't really like to bust trusts, but preferred to try to persuade the less civilized among them (read: non-Harvard men) to change their ways. Those who didn't go along, such as J. P. Morgan and (IIRC) John D. Rockfeller, felt his wrath and it was upon their necks that Roosevelt's mythological Trust-Buster reputation was built. Perhaps it was no coincidence that Croly expressed admiration for Roosevelt (one chapter features a comparison between Roosevelt, William Jennings Bryan, and William Hearst as reformers, with TR as the hero), and later, after the publication of TPoAL, Roosevelt based his New Nationalism upon some of Croly's ideas.

And it was much the same when discussing unions. First, the Sherman Act should be repealed, and second, unions should be recognized with a deal that brings their activities in line with the national efficiency. The highest accomplishment to which a man can aspire in the Crolyist world was to place his talents at the service of the nation. You know, for the sake of efficiency.

The alternative [preferred] policy would consist in a combination of conciliation and aggressive warfare. The spokesman of a constructive national policy in respect to the organization of labor would address the unions in some such words as these: "Yes. You are perfectly right in demanding recognition, and in demanding that none but union labor be employed in industrial work. That demand will be granted but only on definite terms. You should not expect an employer to recognize a union which establishes conditions and rules of labor inimical to a desirable measure of individual economic distinction and independence Your recognition that is must depend upon conformity to another set of conditions imposed in the interest of efficiency and individual economic independence. In this respect you will be treated precisely as large corporations are treated. The state will recognize the kind of union which in contributing to the interest of its members contributes also to the general economic interest. On the other hand it will not only refuse to recognize a union whose rules and methods are inimical to the public economic interest, but it will aggressively and relentlessly fight such unions. Employment will be denied to laborers who belong to unions of that character. In trades where such unions are dominant, counter-unions will be organized and the members of these counter unions alone will have any chance of obtaining work In this way the organization of labor like the organization of capital may gradually be fitted into a nationalized economic system.

...

[T]he union should have the right to demand a minimum wage and a minimum working day. This minimum would vary of course in different trades in different branches of the same trade and in different parts of the country and it might vary also at different industrial seasons. It would be reached by collective bargaining between the organizations of the employer and those of the employee. The unions would be expected to make the best terms that they could and under the circumstances they ought to be able to make terms as good as trade conditions would allow. These agreements would be absolute within the limits contained in the bond. The employer should not have to keep on his pay roll any man who in his opinion was not worth the money, but if any man was employed he could not be obliged to work for less than for a certain sum. On the other hand, in return for such a privileged position, the unions would have to abandon a number of rules upon which they now insist. Collective bargaining should establish the minimum amount of work and pay, but the maximum of work and pay should be left to individual arrangement. An employer should be able give a peculiarly able or energetic laborer as much more than the minimum wage as in his opinion the man was worth and men might be permitted to work over time provided they were paid for the over time one and one half or two times as much as they were paid for an ordinary working hour. The agreement between the employers and the union should also provide for the terms upon which men would be admitted into the union. The employer, if he employed only union men should have a right to demand that the supply of labor should not be artificially restricted, and that he could depend upon procuring as much labor as the growth of his business might require. Finally, in all skilled trades there should obviously be some connection between the unions and the trade schools, and it might be in this respect that the union would enter into closest relations with the state. The state would have a manifest interest in making the instruction in these schools of the very best and in furnishing it free to as many apprentices as the trade agreement permitted.

Translation: The state must control industry, preferably monopolies, and then control the labor that works in those monopolies. If the unions won't go along, we'll start state unions (where have we seen this?). And the state won't countenance any shenanigans from you workers: you can bargain for a minimum wage and then shut up. This isn't for you, it's for the nation.

I am reminded of Chris Nyland's article, "Taylorism and the Mutual Gains Strategy" (Industrial Relations, Vol. 37, No. 4, Oct 1998), in which he describes Taylor's attempts to reconcile with various labor unions and convince them that efficiency was something they ought to embrace. The alliance between the Taylorists and unionists is attributed to (among others) Louis Brandeis: close associate of Croly, the coiner of the term "scientific management", and the leading spark for the Efficiency Movement. One of those unionists, Sidney Hillman of the Amalgamated Clothing Workers Union, entered into collaboration with members of the Wisconsin school of industrial relations [3], but disagreed with them over the scope of union-management negotiations. The Wisconsinists believed that the scope should be limited to wages and hours, but the unionists believed the scope should include more, including investment, plant layout, and promotions.

These dalliances between labor and the Taylorists continued right through the 1920s and the Depression, during which the Wagner Act was passed. In 1940, the creation of a bargaining agreement between GM and the UAW was influenced by the back and forth between unionists, Taylorists, and the Wisconsin school. According to Nyland,

In 1940, George Taylor [not Frederick Winslow] was appointed umpire of the newly signed UAW-GM contract. At the time, this development must have appeared a great opportunity to extend the mutual-gains model. Optimism that the model would be extended was common not ony within SAM, the AFL, and the CIO but also in wider industrial relations circles. For example, Sumner Slichter in 1941 devoted some two hundred pages of Union Policies and Industrial management to an examination of the history of union-management cooperative schemes for increasing production, quality improvement, and cost reduction. Slichter was aware that such schemes tended to have a high mortality rate and had been embraced by only a small number of employers. [...]

The hope that unionization of the automobile industry would assist the growth of the mutual gains model was, of course, not realized. As in the 1920s, it tended to be small, unionized enterprises experiencing difficult times that took up the mutual-gains option. As Leichtenstein [...] notes, while GM took much from the bargaining model that George Taylor had helped develop in the garment industry, the company was very selective as to the parts of the garment program it adopted. As a consequence, the company institutionalized a form of union-management closer to the model advocated by the Wisconsin school than that favored by [the Society for the Advancement of Management, or SAM, the name the Taylorist Society had chosen when it absorbed the Society of Industrial Engineers], and it was this model that was subsequently widely emulated through industry. Leichtenstein [...] has explained why this was so:

General Motors had a very different conception of how the grievance system and umpire machinery might function. the company, which had closely observed the way in which [George] Taylor handled disputes in the hosiery industry, wanted to avoid the freewheeling, all-inclusive style pioneered there. The largest corporation in the world had no need for the kind of economic tutelage so often meted out by those industrial relations "fixers" who had pioneered in the economically chaotic clothing trade.

In short, GM rejected "joint management" and instead institutionalized that amalgam of work practices, formalized grievance procedures, limited seniority, and constrained bargaining that subsequently became known as "New Deal Industrial Relations."

So Croly and his friend Brandeis got their way after all, at least with regard to unions. The Wagner Act, far from being the labor success it is frequently claimed, was a means of restricting labor's control over their work environment. Those aspects of work that today we call Taylorist should have been called the GM-Wisconsin model. As I argued in this article, it was GM's size and an accident of history rather than any special power of efficient management that led the world to adopt their accounting system, and so it is with their labor control system. In both cases, the adoption has been assisted by the federal government: in the first case by its adoption as the GAAP and the SEC, in the second by Wagner and the NLRB.

--------------

[1] I guess I was wrong about the terminology of socialization and nationalization in this post, but the outcome is the same: fascists must have the state, Marxists seek to abolish it.

[2] At that time, they still naively believed that the Constitution had to be amended before you went off and assumed a power like taxing income. We have learned so much since then.

[3] Somewhere, I read that the ILGWU instituted the first Industrial Engineering program, but I don't recall where. I think Kevin Carson would suggest that the "mutual-gains strategy" will be effective right after the workers take ownership of the factory. But then it's a "worker-grains strategy," isn't it?