Leviathan in Chains: Michael Munger on Public Choice Economics
2017-09-10 · Guest: Michael Munger (Professor at Duke University) · 52:23
Public Choice Economics and Political Authority
Bob Zadek and Professor Michael Munger discuss the principles of Public Choice Economics, challenging the romanticized view of government decision-making. They critique Nancy MacLean’s controversial book Democracy in Chains, explore the “Munger Test” for state intervention, and examine why government authority should be viewed with the same skepticism as private interests.
Topics: Public Choice Economics, James Buchanan, Nancy MacLean, Democracy in Chains, Political Authority, Methodological Individualism, Behavioral Symmetry, The Munger Test, Friedrich Hayek, Regulatory Capture, Majority Rule
Speakers: Bob Zadek, Michael Munger, Caller (Dave), Caller (Jacob)
The Nature of Political Authority [00:00]
Bob Zadek: Good morning, everyone. Welcome to the Bob Zadek Show, the only live libertarian talk radio show on the air all weekend. Thanks so much for listening on this Sunday morning.
On this day in history, the United States of America became the United States of America. Before its adoption of its official name, the United States of America, it was known simply as the United Colonies. Congratulations, United States of America. Also on this day in history, Nathan Hale, the patriot spy for the Americans working behind the lines in British North America, was captured and was hung. He famously pronounced those words, “I only regret that I have but one life to give to my country.” Maybe he said it, maybe he didn’t, but it sure is inspiring.
This morning, our show will inquire into what’s so special about government. What is there about governmental decision-making that makes it so right and so accurate? Why are we so confident about the decision-making of government that we allow that special institution to carry guns to enforce its decisions once made? We don’t allow private businesses, we don’t allow churches, we don’t allow civic institutions to carry guns to enforce their decisions once made. Why do we allow government to carry guns to enforce their decisions? Are we that confident that government is so right, they cannot be wrong, that we empower them to point a gun at our heads, to have us face a prison cell if we don’t abide by their decisions?
Ever think about that? To help us understand the important concept of the decision-making of government and why it should be as questioned as the decision-making in private business, in other civic institutions, I’m happy to welcome back to the show Professor Mike Munger. Professor Munger has joined us once before, a couple of years ago, when I was happy to have him share his offer of “Who Wants to Buy a Politician?” I remember the show like it was yesterday. I’m happy to welcome back to the show, Mike Munger. Mike, good morning. How are you?
Michael Munger: It’s great to be on the show. Thanks, Bob.
Defining Public Choice Economics [02:56]
Bob Zadek: Now, Mike, my introduction wondered about the decision-making methods and accuracy and wisdom, the decision-making of government, and why the country seems to, in a growing degree, imbue the decision-making of government with a certain high level of faith and accuracy and honesty and integrity and pure motives, so that government becomes the only institution that we are so sure they’re right that when government decides something, they and only they can enforce their decisions with guns and with the denial of liberty. In short, we are talking about a concept, Mike, that you of course know quite a bit about, as did your colleagues at Duke and other economic institutions, a concept called Public Choice. Public Choice, a somewhat unfortunate label—it doesn’t help very much. So we are going to discuss this morning, to some degree, the concept of Public Choice and how it’s recently been in the media in a rather strange way. So tell us about, Mike, what is the theory of Public Choice? What are the premises of Public Choice Economics?
Michael Munger: Well, let me take one step before that. The deep question that you raised is the one called political authority. And the question of political authority is: when can anyone, including the state, command someone else to do something using coercive force? Or what amounts to the same thing: when are citizens obliged, morally—I don’t mean because you’re compelled by force, but when are you morally obliged to obey the instructions of someone else?
And the problem of political authority in the time of monarchy was because God had given us this great person called a king. And there were understandably some reactions to that, saying, “Well, no, we’d like to have rule by the people.” And what many people would call rule by the people is democracy. Now, Public Choice is in some ways a reaction to that. We’re trying to unpack the idea of democracy and say, “What exactly constitutes the origin of this authority that we’re bound to accept?”
There was a famous trial in 1960 of Adolf Eichmann, the Nazi who had orchestrated the execution of many, many tens of thousands of Jews by making the system more efficient, making the trains run better. He was captured in Argentina in 1960 and brought back to trial, and his entire defense—and I think people of a certain age are likely to remember this—his defense was, “Well, I was just following orders. The state told me to do that, and so I was obliged to do it.”
Well, most of us think that Eichmann was not right about that. But why not? If you think that the state is the source of authority, why was he not obliged to do just what the state said? You could say, “Oh, those were Nazis. Our government is different.” Well, why? What’s the basis of this authority? is the question that Public Choice tries to ask.
The Three Premises of Public Choice [05:00]
Michael Munger: Now, an answer that many people would give, as I said, is democracy. That is, something like majority rule. But when you ask, people don’t really believe in that either. Many people who say they believe in democracy also believe that abortion rights should be available to women just based on their own conscience, on their own choice. Well, the reason we have that is not because a majority wants it. In fact, in most states, a majority want to limit abortion. The reason we have it was a Supreme Court decision called Roe v. Wade in 1973 that prevented the majority from working its will.
So one of the things that Public Choice would start with about democracy is that democracy has to represent a balance between the protecting the rights of individuals and giving the majority the right to enact its will within the boundaries that are set, within the fence that’s set by the Constitution for being legitimate for politics. And I think when you ask someone to define democracy, they’ll say, “Oh, well, that’s just good government. I really favor it.” If you ask them, “Do you think that any command that the state gives because a majority favors it should be obeyed by the people?” They’ll say, “Well, I’m not so sure about that.” In fact, they can give many examples where in the South where I grew up, a majority of people because they were white wanted to use Jim Crow laws to kind of reinstitute slavery in an apartheid system. Fortunately, that was prevented, but it was prevented by the US Supreme Court after Brown v. Board of Education in a way that prevented the majority from having its will.
So one of the questions Public Choice asks is: what is the basis of political authority? And then how are we to evaluate real government institutions, the way that governments actually choose in a democracy using particular real-world methods? So Public Choice actually has three premises, and they’re a little bit complicated, but I’ll simplify them.
First is the idea that people don’t change that much if they go into the voting booth or they take public office. So a lot of people, I think, have this notion that corporations are greedy, but any public official wants what’s good for everyone. Well, that seems unlikely. The incentives may be a little bit different, people may behave a little bit different in the public sphere, but by and large, we’re looking for what we think individually is the right thing to do. So that’s called methodological individualism. We’re going to take that idea that we’ll start with individuals.
And then behavioral symmetry, or the idea that people are basically the same whether they’re in the grocery store or the voting booth, is the second premise.
But the third is what James Buchanan, the Nobel Prize winner—and we’re going to talk more about him in a little bit, he won the Nobel Prize in 1986—he thought it was still important, even if you think, “Well, politicians aren’t that different from the rest of us,” politics still may be important. We have a lot of things we have to work together in groups to accomplish, and markets are not very good at accomplishing this. Markets can’t use the price mechanism and private property to solve problems of the environment, pollution, externalities, maybe information that not everyone has. So there may be a role for the state, but the role for the state would have to be one that was based on consent, not on the imposition of the will of the majority on a minority that doesn’t want to have it. So again, the real answer to your question, the real insight of Public Choice, is working to find the right balance between the rights of individuals and minorities compared to the ability of the majority to impose its will, because that’s how we get things done. And so when I hear someone say, “Well, what we need is more democracy,” and it doesn’t matter how much we have, more democracy is always better, I don’t even know what that means. Because democracy is inherently a balance between the rights of individuals and the desires of the majority. So more or less doesn’t make any sense to me. The question is finding the right balance.
Government as People: The Trump Example [07:10]
Bob Zadek: Now, I have two thoughts as you were speaking, Mike. Number one is—and this show, my show, never gets very personal. I don’t speak very much during my show with my guests about an individual politician and my likes and dislikes and characteristics, that smarmy stuff. I just don’t do it. It’s not interesting to me. However, Donald Trump is quite interesting in this conversation. We imbue government with a certain, to some degree, infallibility. “Let government do it, pass more laws.” Pass more laws means government can make decisions for us better than we can make decisions for ourselves. And then we have Donald Trump, a non-politician, a business person, who had a certain very public code of behavior, a very public way of doing business. And Donald Trump, by a confluence of a whole lot of really weird political factors, Donald Trump became president. Now, he is now government. So all of the gauzy-eyed, romanticized views one might have that government can take care of it and government is looking out for us, Donald Trump disproves that only in the sense that he didn’t become more godlike, he didn’t become wiser, he didn’t become more anything positive simply because he now changed sides and became part of government. It’s the same person. And government collectively is a whole lot of the very same people who you would have interacted with in other walks of life, except now they work for the government. They are just people, as I think Mike will explain to us.
And number two, Mike, just a minor point in the margins. You stated as a kind of a given that things like the environment couldn’t be resolved by the marketplace. I just want to mention that there are many wise economists and environmentalists who believe that to a substantial degree, the environment can be resolved in the marketplace by private action, by civil interactions, by the courts and the like. So I would just quarrel a tiny bit in the margins that maybe it’s not so much of a given that the environment is an area where control has to be ceded to government rather than the marketplace. But those are just very minor comments.
So why is—now, Public Choice, I guess, Mike, is the principle that humans do not change simply because their employer becomes government. Why is that very common-sense observation, why has that become controversial?
The Munger Test and Non-Market Cooperation [08:38]
Michael Munger: Well, I think it’s interesting that we have a kind of naive faith in a non-existent thing called the state. A state is a kind of fiction, because the state and the government are actually made up of individuals. But the notion that we will create an institution called government that will look out for all of us is something that’s pretty useful for politicians.
I have proposed to my students that they employ something I immodestly call the Munger Test. So when someone says, “Oh, markets can’t do this, so therefore the state should do it,” take out the word “state” and put in actual politicians that you know who have won elections that are often dominated by organized interest groups. And you basically just did that, you performed the Munger Test. So “the state should do all these things.” All right, take that out and put in Donald Trump, or Nancy Pelosi. This is not a partisan point. And see if you still believe it. Because a lot of people, when they—a lot of people that I know that are the biggest fans of the government just hate Donald Trump. They think he’s completely incompetent. But yet they persist in thinking that there’s a difference. That, I think, is the mistake.
And on the environment, you took up a point that I—right away, you caught right away a point that I wanted to bring up later, so let me talk about it now. All I said was that markets as markets are not very good at handling that. I never said that other civil institutions that are not the state could not handle that. So one of the things that Public Choice wants to argue is that there are actually three institutions here. One are markets, in situations where private property rights and prices handle things, and there’s a lot of those. The other is the state, where coercion is required and we can’t act cooperatively. But the third is voluntary private institutions, and I would include courts in that, because a court system is one that we might all agree will be bound by rules like the common law that are not statutory but are the emergent properties of a long period of judge-made interpretation.
So the original title of the journal Public Choice—and I was the editor of that journal for five years—the original title of it was Papers in Non-Market Decision Making. It wasn’t Papers in State Decision Making. It was in non-market decision making. So people recognize problems. And let me give a brief example. So in the middle of the 19th century in England, a number of economists pointed out that lighthouses had to be provided by the state. The only way that—because a lighthouse can’t charge for its services, you know, it’s up there on the hill, it’s a light, it keeps the ships from hitting the rocks. There’s no way for them to charge anything for that. Well, Ronald Coase, another Nobel Prize-winning economist, just went and looked at the records, and it turns out at the time that this was written in the 1850s, the 1860s, 75% of the lighthouses in England were actually private. But they were private cooperative systems. They were not the state. It was not enforced or run by the state, it wasn’t owned by the state. It was a cooperative arrangement between a harbor that collected fees and then paid the lighthouse keeper to keep the lighthouse open because it made the harbor much more valuable. So I think one of the insights of Public Choice is to say there’s a lot of kinds of non-market cooperation that are also not the state. We shouldn’t just go straight from “Well, markets can’t really do this” and “Therefore this enormously imperfect, incompetent institution called the state should do it,” because the Munger Test would tell us a lot of times you’re going to get Donald Trump.
The Founders’ Skepticism of Democracy [10:37]
Bob Zadek: So now we have this very common-sense, almost too obvious concept that humans do not change based upon who their employer is—non-state employer versus state employer—and that therefore whatever imperfections in decision-making are attributable to private business and private people making mistakes, those same mistakes can happen by government. Yet somehow we say government can enforce those wrong decisions with guns and with prison cells. Why is that controversial? Who would resist that? Who feels threatened by such an obvious concept?
Michael Munger: I think we want to believe that there’s someone watching out for us. And the idea of a state, of a sort of collective that represents all of us, is very attractive. Now, I understand what it means to say I’m a patriot and I care about the nation called United States. And it is interesting, people in Europe tend to conflate the nation and the state. So whatever it is that the state says, if you disagree with that, you must not be patriotic. To be fair, that’s a little bit less true in the United States. A lot of Americans will say, “I really love my country, but I don’t trust my government.” Nonetheless, I don’t fully trust my government. But nonetheless, I think a lot of us sort of elide that over.
I often have debates with a Duke colleague of mine who is a famous behavioral economist. His name is Dan Ariely, and he wrote a book called Predictably Irrational, and he talks about how consumers don’t have enough information to make the choices that we want them to make. They’re going to buy Cokes that are too big, they’re going to buy the wrong kind of car because they don’t have enough information. And so we need the government to fill in the information that consumers don’t have and maybe even tell them what to buy because the state is smarter. So I say, “Dan, you’re not talking about consumers, you’re talking about human beings. And every flaw in consumers is worse in voters.” So I think that’s the best simple summary of Public Choice that I can think of. Every flaw in consumers is worse in voters. After all, when I’m shopping for a car, I actually get the car that I choose. If I’m shopping for a president, I may or may not get the president that I vote for. So my incentives to learn about the president are much worse than my incentives to learn about the car. People vote for president based on emotions, all sorts of misinformation. Every flaw in consumers is worse in voters. I don’t think you can say that often enough. And I’ve actually found a number of people on the left, when I point that out, say, “Well, I never thought of that.” Now, your question would say, “How could you possibly never have thought of that?” Well, fair enough. I don’t think the distinction between state and nation is made often enough. So I just try repeating: every flaw in consumers is worse in voters.
Bob Zadek: And the decision-making of consumers is often complicated, and yet government feels it necessary to interfere to some degree in the marketplace by mandating what you must buy and prohibiting what you cannot buy, or discouraging you—think cigarettes, think alcohol, all these other “vices.” So government through its action expresses very little confidence in a consumer’s ability to make decisions even on the smallest level, and yet we empower voters to make these massive, complicated decisions like who ought to be president, who ought to be a senator. Those are complex decisions, and we entrust and we have this blind faith in the voters to get it right. It’s kind of bizarre.
This is Bob Zadek, I’m speaking with Professor Mike Munger on Public Choice, subtitled “What’s So Special About Governmental Decision-Makers?” To join my conversation with Mike, 424-BOB-SHOW. Now, Mike, we have talked a lot about democracy, about majority rule. And of course, to dip back into history, the Founders had very little faith in majority rule, and the Founders bent over backwards to diminish the control that majority rule had over life in our country. In fact, as we all know, in the original Constitution, only one-half of one-third of the government was popularly elected—the House of Representatives. Everything else was indirectly elected. So the Founders wisely were intensely skeptical of majority rule and were determined to protect the rights of minorities. Therefore, under the Founders’ scheme of things, yes, majority does rule, but only in a fairly modest subset of decisions. And in most of the decisions, whatever the majority wanted, they had no power, such as the protected rights in the original Constitution, the enumerated rights in the Bill of Rights, and the unenumerated rights in the Ninth Amendment. So the Founders were no fans of democracy, and democracy was to the Founders a tool, a somewhat modest tool, but a tool to help control the excesses of government. It was not the goal in itself.
Democracy in Chains and the Critique of James Buchanan [13:09]
Bob Zadek: We have talked a lot about Public Choice this morning, of which your colleague James Buchanan, Nobel Prize-winning economist, was a strong proponent. But it’s no accident that we happen to be discussing the subject of Public Choice at this time and in this place. There was a bit of a flap caused by a recently published and then resoundingly criticized book entitled Democracy in Chains, written by Professor Nancy MacLean. Tell us, if you will, in a few words if you can, the story of Democracy in Chains. What is the book about, and why does that lead us and why does that bring Public Choice so much into the public economic conversation?
Michael Munger: Overall, I certainly think that Professor MacLean, who I should acknowledge is my Duke colleague—she’s a professor in Duke’s history department—I think that Professor MacLean has done a big favor to Public Choice by elevating it to such a position of prominence. A lot of people, after having read her book, have read a bunch of other things and then decided they’d make up their own minds about whether her claims about it were true. But the result is that Public Choice in general and James Buchanan in particular have a much more prominent place now in the kind of intellectual history and the way that people think about the development of American democracy since about 1960.
Professor MacLean said she had seen James Buchanan’s name mentioned in a couple of footnotes, one of them in a book about education segregation and the other in the creation of the Constitution of the South American country of Chile during the Pinochet regime, during the military dictatorship of Pinochet. And she thought, “Well, that’s kind of odd that he’d be mentioned in these two different contexts.” So she went to George Mason University and spent quite a bit of time, to her credit, looking through the archives and found letters and things which she decided implied that James Buchanan had had a central role in what she sees as a conservative revolution which has tried to repress voting rights, prevent majorities from being able to enact their will, and install a kind of plutocracy, a rule by the very wealthy in the United States. And her claim was, in the ’60s and ’70s, the intellectual groundwork for, in effect, Donald Trump and the Republican takeover of all three branches of government was laid.
And so I think part of the reason that her book has been such—gotten so much interest—Oprah Winfrey said it was one of the 10 most important books of the summer. So, you know, people are reading this in sitting in a beach chair and drinking a boat drink. So it really did get a lot of attention. Part of the reason for that was Donald Trump’s unexpected victory, I think, and the timing of the release of the book in May of 2017. A lot of things lined up in her favor. Plus, I should say, having reviewed the book myself, it’s well-written and it’s interesting. It’s written in a sort of breathless, almost detective novel kind of style that when you read it, you think, “This is amazing! I can’t believe that this is true.” The problem is it’s not true. She actually—fabricated is too strong. What she did was she found a set of salient documents which she then stitched together a narrative that she thought was plausible. Problem with history is that many things are plausible. You actually have to look at the gaps between them. And the way that she filled in the gaps is just mistaken. This is not a history book. It’s a narrative fiction book about a past in the US that never actually happened.
Bob Zadek: And also, it was an interesting side note. NPR commissioned a review of the book, and as it was non-fiction—the book is non-fiction, of course, and it was history—
Michael Munger: Well, you say! I would claim it should be under fiction. As a fiction writer, it was perfect. That’s exactly the genre that it belongs in.
Bob Zadek: They picked a novelist to review a purported non-fiction history or economics—have your pick—book, and they picked a novelist. They had to back off a little bit and somewhat in an NPR kind of way apologize for the episode and for their choice of reviewer. And they explained that, well, the reviewer wasn’t really commenting on content but only on style and persuasive quality. And as a conspiratorial novel, perhaps it flows kind of nicely. But that’s besides the point.
Michael Munger: I think NPR there sort of revealed something about—having someone who has no expertise in history or Public Choice review the book means that you’ve already decided that its content is correct. You’re just trying to decide how to advance it, how to give it positive publicity. So I think NPR did kind of make a misstep there. But the irony is that I would argue having a fiction writer review a fiction book makes perfect sense if it were admitted by the publisher. And that’s what I think is going to be interesting given the number of factual mistakes, mistakes of interpretation, the misuse of quotations where Professor MacLean reverses the clear meaning of the quote if you take it in context. It’s really pretty egregious.
Bob Zadek: And of course, she got—there was so much commentary, intellectually sound commentary, pointing out every error that she made, that the book right now has pretty much in the mainstream lost its credibility as non-fiction. It may exist for those who are looking for another book to trash the Koch brothers or some such thing as that, or to find conspiracies where none exist. But nobody, I don’t think, other than those people who simply want it as more red meat, would rely upon the book as good scholarship.
And in the book, of course, she—and this is one of the points of our show this morning—in the book, she suggests, accuses James Buchanan and other like-minded economists who promote Public Choice as trying to point out the flaws and the weaknesses in governmental decision-making as an attack on the very concept of government in order to weaken government and by extension give transfer more power to the private sector and to the hated billionaires in America who she sees as the beneficiary of any weakening of governmental power. So she finds it an attack on the very civic fabric of America, an attack on government. And of course, Public Choice theory is a, as Mike has and will explain, a simply common-sense theory that almost states the obvious. But by stating the obvious, if the obvious leads to an incorrect conclusion, the left feels challenged by it. Is that pretty much what’s going on in the political discussion of Democracy in Chains and Public Choice?
Michael Munger: I think you’re too optimistic. There was a very positive review in the New York Times. There have been a series of very positive reviews in The Atlantic and a number of pretty reputable outlets. And I think it is in fact taken seriously. The argument would go like this: Nancy MacLean is a famous and well-regarded historian, and any critique of her credentials or interpretation of history is just mistaken. Therefore, these people must be getting paid by the Koch Foundation. And in fact, I have said that what the left does is just perform an incantation like the witches in Macbeth: “Hocus Pocus Charles Kochus.” And if you can show that that’s true, there’s some connection somewhere, we can just dismiss this. And that means that any criticism of MacLean’s book, since she’s a competent historian, can’t possibly be true, and it must mean that whoever is criticizing it, regardless of their academic stature, must be in the pay, in the thrall of this right-wing conspiracy. So it sort of reminds you of crazy movies, a crazy person in a movie when they’re talking about a conspiracy and they learn there’s someone else who they trusted who’s part of the conspiracy also, who then starts saying to themselves, “Oh, it goes all the way to the top.”
So the very evidence she cites a couple of times, the fact that James Buchanan doesn’t specifically mention segregation as evidence that he knew he should try to hide his true purposes. Whereas of course, the actual interpretation that’s more charitable is he wasn’t interested in segregation, and his support for vouchers was often—he often was worried about the problem of segregation. There were two articles in the last couple of weeks in the Washington Post—and it’s a little surprising the Washington Post is publishing this—but two articles in the Washington Post publishing contents of letters that James Buchanan had written that show he actually was very concerned about segregation and was interested in trying to have institutions that would desegregate education. But it’s not making any impact. I don’t see that we’re making much progress in discrediting this book as an intellectual source because people are not interested in facts. The story is such a good story that, well, it ought to be true. Even if these particular facts are not true, the essential truth here is that James Buchanan and Public Choice are simply being paid by the far right wing to give an intellectual vanguard.
Vaping and Regulatory Capture [17:30]
Bob Zadek: We have a caller, Mike. Dave, welcome to the show this morning, and how can we help you?
Caller (Dave): Okay, I was listening to what Mr. Munger was saying, and I really liked the analogy of going into the voting booth and you really aren’t a person that changes whether you’re from business or going into the public sector. And just this morning, I was reading the Journal regarding vaping and what the FDA is doing. They’re moving vaping as a tobacco product. And this is evidence of people not changing. People want to advance. They want to have a bigger job, they want to have more staff, etc. So if all these discussions go back to basic incentives, it puts a good light on the whole picture.
Bob Zadek: It sure does, Dave. And Mike—by the way, it’s Professor Munger, Dave—and Mike, that of course is part of the core of Public Choice, is that if an individual in the private sector is motivated upon making more money, becoming more powerful—whatever that may mean in the private sector—becoming more important, that motive doesn’t get left at the door when you join, when government becomes your employer. So Mike, if you would expand upon that for Dave.
Michael Munger: Notice what a good example Dave came up with. So in the private sector, if I want a bigger staff and more pay, it must be because I’m selfish. But in the public sector, in the case of the FDA, well, they’re working for the public good. And I’m an expert. And so when I want more staff, it must be so we can do better research. When I want more pay, it’s because I’m working so hard for the public. And so we often think in terms of selfishness—selfishness can often be redressed as altruism. Suppose I have a nonprofit organization I want to work for to end homelessness. Well, of course, I’m still going to want more staff, I’m going to want more income. It’s not true that people are narrowly selfish, but they do want to impose their view of the good on everyone else.
And the vaping example is really a great one. I’m glad Dave called in, because it might well be that the people at the FDA are not craven, selfish people that are lying about vaping. They may actually think this is the right policy. The problem is that it disenfranchises individuals in terms of their personal autonomy and substitutes the judgment of someone who is far away, who has expertise but maybe not many contacts with actual medical problems. Vaping is probably an improvement in many ways over smoking cigarettes. But the opposition to vaping is, “Well, it’s still a tobacco product.” So Dave’s example is a great one. I’m not saying that people in government are always selfish and trying to get what they want for themselves, but they convince themselves that the public good is their objective. And so when they get more staff, they get more pay, it’s because they’re working so hard for the public.
Bob Zadek: Dave, any last comments? But thank you for your comment about vaping, it was right on target.
Caller (Dave): Okay, no, I listen to your show all the time, and you’ll probably hear from me again.
Bob Zadek: Thanks a lot, Dave. Thanks for the call this morning.
Why the Worst Get on Top [18:56]
Bob Zadek: Now, Mike, to me, the core issue in terms of having individuals understanding under Public Choice theory that individuals do not change based upon who is paying their salary—it is the same human—but working for the government gives you certain powers you don’t get in the private sector. In government, if you make a decision about something that the consumers or the public should or should not do, you get to enforce that decision with a gun and a prison cell. In the private sector, if you make a decision about what the public ought to buy—your product or your service—you have the mission of persuading the government, hoping you’re right, and the public is free to say, “Well, we don’t think it’s such a good idea after all to buy your product,” and you will lose. Why are we so quick to give the same human who has an idea, give them a gun to enforce their decision if they are working for government, but yet give them no such tools in the private sector? Would we be willing to take that same individual in the public sector, put them at Amazon, and let them force you to buy the product under the threat of loss of life or your freedom? It’s kind of strange. And there is a self-selecting—or am I being too cynical—as to the people who take a job in government versus the private sector? Do they take the job because they get to enforce their decisions, they don’t have to merely beg and persuade the way the private sector is? Is there a self-selecting going on about who works for government, or is that a bit of a stretch?
Michael Munger: Oh, there has to be at least some. So one of the things that we learn from just labor theory in economics is that, well, who’s going to be a garbage man? Probably the people who work as refuse collectors are those that are not particularly disgusted by garbage and whose noses—it doesn’t mean they like it, but they dislike it less than others. So the question is: what sort of person would self-select into a job where the pay is relatively low, but you have a position of authority and you get to order people around and if they disobey, you get to use guns to enforce your will? That’s certainly a different sort of person.
It’s also true, though, that many of the people who work for the government genuinely believe that they’re helping the public. They’re experts, they have PhDs, law degrees, they have experience. So it also does attract people who are interested in public service. I don’t want to minimize that. The thing that I would rather than say much more, because we’re going to run short on time, there’s a wonderful article that comes from Friedrich Hayek’s books, Law, Legislation and Liberty, and the title of it is “Why the Worst Get on Top.” Why the worst get on top. And I’m afraid this, I guess, reveals something about my own political views—this says something about Donald Trump. What you need is a complete, utter certainty in your own judgment. What you need is a lack of self-doubt and a willingness to order other people around. Voters actually choose people like that. If instead you say, “You know, this is really complicated, and experts even disagree, it’s not clear what we should do,” we don’t like that. Well, the result is, as Friedrich Hayek put it in “Why the Worst Get on Top,” is that there’s a particular selection. And I think one thing that’s interesting is that people in Central and Eastern Europe and people in China, when they read Hayek, say, “Oh, I recognize this. This is exactly how it is in a state that’s completely run by the state.” Well, it’s also true in a state like ours that’s more mixed between capitalism and the state. Still, much of the time the worst get on top. There is a self-selection. It’s not always the case, there’s many people in government who want to work for the public good and who are actual experts. I don’t want to minimize that. Nonetheless, it is a problem.
Individual Rights vs. State Coercion [21:52]
Bob Zadek: We have one last caller. Jacob, welcome to the show this morning, welcome back. And we’re running out of time, Jacob, so your comment as briefly as possible, please.
Caller (Jacob): Professor Munger, recently in the state of Utah, there was a confrontation between an emergency room nurse, a registered nurse, and a police detective who was sent by his police department to get blood specimens. Specimens had already been taken for defending the person in his predicament—he was badly burned, unconscious patient, could not give a choice, no consent could be given. How does your theory, the Public Choice and democracy, apply to that situation, a real situation? How do you apply that when the person is unconscious, Professor Munger?
Michael Munger: Well, it’s a terrific question. And the answer, I think, is that in this case, you have a comatose patient. The police wanted to take—they had no probable cause. They wanted to take a blood sample just so they could look and see if he had any drugs in his system that they might use against him. The nurse said, “No, you won’t do this.” And there was a confrontation where the nurse stood down these armed policemen. It was a very brave act. So I think the thing about Public Choice is it’s about the importance of rules. And in this case, the nurse used the correct rule, that is, the protection of the individual against the state that should be part of democracy. So the point you raise is a great one. The police probably were acting on behalf of the majority—we need to get rid of drugs. The nurse was acting on behalf of the individual. So Public Choice says: don’t forget about the individual. That confrontation is an excellent example of what Public Choice would say is the right thing for government officials—and in this case, the nurse was acting on behalf of this patient, but in a way she was doing what the state should have done and acting against the majority that was represented by the police.
Bob Zadek: Thank you very much for the call, Jacob. Mike, you snuck one by me. You used a phrase I’m not crazy about, which is “public servant.” Hardly servant—well-paid, well-compensated, and the same motivations as those in the private sector. But you get one free pass before you use it again—you snuck it by me. The nurse was a—she was a true public servant. The police was not.
Now, one last comment as we’re running out of time, just an observation. That one of the reasons that I and so many others look to minimize the power of government is that government, when you empower any institution to use force and to take away your liberty or your life, when you empower them to have that power, you had better limit their sphere of influence, limit the areas where they can act. Because if they are wrong, the consequences are profound. A human loses their liberty, something to be cherished, or loses their life. Therefore, those of us who favor a minimal, a diminished role for government do so not because of government per se, but because government carries guns and they have cells. That is the reason. It is not a per se animus against government, it’s because once you empower an institution to deny you your life and your liberty, you had better limit the areas where they can act.
Now, Mike, how can our friends out there follow your writing and your blog postings and what’s coming down the pike by way of books you’re working on?
Michael Munger: Well, probably the thing to look at is my Twitter account, which is just @mungowitz, which is—there’s a long story behind and I won’t tell it, but if you’re interested in following on Twitter, I post all sorts of other links there, and that’s just @mungowitz. I write often for Learn Liberty, which is a blog site that’s run by IHS, and you can find that—just Learn Liberty. I have something coming out this week that I’m very proud of about permissionless innovation and Twitter. And then my new book is called Tomorrow 3.0. It’s coming out with Cambridge University Press early next year, and it’s about the sharing economy. And the reason I called it Tomorrow 3.0 is I think we’re in the midst of the third great economic revolution. And these are big. The first was the Neolithic or the move to fixed agriculture. The second was the industrial. We’re in the middle of the third, and it’s going to change our lives in ways that are hard to predict but that we ought to be thinking more about. So Tomorrow 3.0 will be out with Cambridge University Press early next year. I’m in the very final stages of working on the proofs, and I’m very excited about it.
Bob Zadek: IHS is the Institute for Humane Studies, a very important organization. If I may, I am a regular follower of Learn Liberty. It is a great publication and blog and video. I commend it to all of my listeners out there. We have regretfully run out of time. Bob Zadek saying on behalf of Mike Munger and myself, thanks for listening. So long for now, and enjoy the rest of the weekend. See you next Sunday.