— Libertarian bloggers
are real excited about the Francis Fukuyama
Op-Ed in the WSJ mounting a weak attack on libertarians for their
anti-war,
pro-cloning viewpoints.
Granted that we all love the conceit of “proving” the correctness of our
positions by ravaging a strawman, Fukuyama’s argument is most flawed in its
assumption that libertarians had any standing to lose on Sept. 11th in the first
place.
In all the major policy discussions of our time, including welfare,
drug policy, regulation of monopolies, global warming, and the encroachment
of Washington on the sovereignty of state and local government, libertarians are
non-combatants. While the rest of the spectrum is engaged in arguing, for
example, about how best to structure a welfare system so as to promote
self-dependence, libertarians simply argue that there shouldn’t be a welfare
system. And while the rest of the spectrum debates the relative utility of drug
courts and treatment to incarceration for drug offenses, libertarians simply
argue that there should be no drug laws. And while the rest of the spectrum
argues about what types of cloning and genetic engineering should be restricted,
libertarians simply say that the government should have no say in decisions that
could have more lasting impact on life on this planet than any technology ever
developed. It’s strange.
There are some policy debates where libertarians provide much-needed levity,
of course, which the Cato Institute does by arguing novel positions. Global
warming is a reality, Cato says, but it’s good for us (link not available because
their site’s down.)
Live from the WTC extends libertarian buffoonery into a new sphere with
this argument that monopolies are good for us:
So in the course of the discussion referenced below, Richard Bennett asked
why libertarians fall silent on the subject of antitrust. And in the course of
answering that (short answer: it doesn’t do any good), I came across a very
interesting piece of data: after the break up of Standard Oil, prices rose.
Actually, I pointed out that libertarians don’t want to talk about monopolies,
since one had said they don’t exist and another that they’re all government-created
before Megan said you can’t do anything about them anyway. Reading her piece,
it’s not clear whether she means gasoline or kerosene prices rose after the SO
break up, but it’s certainly an entertaining viewpoint. Megan also engages in
another fun project, proving that global warming is no big deal by ripping the
Kyoto Treaty. Frankly, I have no problem with the fact that Kyoto is a bogus
approach to dealing with global warming, if there is such a thing, but its defects
don’t tell us anything at all about climate change and the models thereof.
It hurts me to see intelligent people give their minds over to cultish systems,
and there’s no doubt in my mind that libertarianism, in its native guise or when
dressed-up as “Objectivism” or as “Dynamism” is a cultish system, providing
simple answers to complex questions and alienating its practitioners from the
mainstream. It’s always the smart people that are drawn to these quick-fix,
answer-to-everything, pseudo-philosophical systems, of course, because of their
superficial intellectual appeal and their many labor-saving virtues. The thing that
libertarians never seem to grasp is that all mainstream political philosophy is
concerned with liberty, but the differences come in when we consider what things
are the genuine threats to liberty, and how to best limit their effects.
But liberty
isn’t the sole aim of political philosophy: justice is right up there among the top
principles as well, and the most interesting (and important) debates consider the
tension between these two competing values. Libertarians, by focusing solely on
freedom, are literally one-armed men (or people, if you must) in these debates,
and their one-dimensionality leads toward a kind of fanaticism. But it does save
time, of course, knowing what you believe even without understanding the issues.
So what’s up with these new-fangled variations on libertarianism, like Ayn Rand’s
“Objectivism” and Postrel’s “Dynamism?” While they may make some sort of
contribution to the libertarian ideal that I don’t get because I’m not immersed
in the doctrinal struggles of that movement, on the face of it they appear to be
little more than cults of personality centered around a would-be dominatrix.
Postrel says all the traditional distinctions of political philosophy are wrong, and we
simply have to be concerned about dynamism and stasis. Excuse me, but I’m not
personally inclined to throw out Plato, Aquinas, Burke, Voltaire, Locke, Hayek,
and Mansfield just because some redhead from Dallas who likes sexy shoes says
they’re like so last century, dude. This is fundamentally a false distinction, because
nobody seriously argues that change for its own sake is a virtue. We have too
much power for that.
So the message is pretty simple, but hopefully not too
simple: if you want to debate politics, learn something about it. If you then want
to toss aside the Western tradition, fine and dandy, at least you know what you’re
discarding. Similarly, if you want to debate social policy, learn something about
it, don’t just come crashing in with a doctrinaire viewpoint and a small set of received
ideas. That’s not too thuggish, is it?
If you want the Republican party to succeed, maybe you should be a little more sympathetic and respectful towards a group whose protest votes have helped at least 3 current Senate seats go Democratic.
I will do what I can to keep libertarian-leaning voters from associating the Republican Party with the hostility towards their opinions you’ve just demonstrated.
Richard:
You’ve misstated my position on global warming. I haven’t said it’s not happening; I’ve criticized others for taking just that position. I’ve said that the data seems to me to be insufficient to make the sort of changes that would be required if it is as dangerous as its advocates claim. I’ve also said that its advocates are usually ignorant of the actual effects, as opposed to the mildly imagined ones, that such changes would entail. I tend to focus on the economic effects, because that’s what I’m competent to talk about; I’ve been having an engaging discussion on my blog with a climatology hobbyist who’s leading me through some of the finer points of the modeling. It’s been educational, and I’ve certainly refined my knowlege of global warming.
As for monopolies, I’m afraid the data’s on my side. The fact that my position disagrees with yours does not make it self-serving or specious; I came to that position through the economic data, not my political preconceptions.
I used the prices for Kerosene, because that was the bulk of Standard Oil’s market at the time of the anti-trust laws; gasoline didn’t surpass Kerosene until WWI. I followed time-series data on wholesale kerosene prices from 1880 to 1925, which is available for free at NBER. There’s a perfect inflection in the curve at the time of the breakup, in 1911.
More broadly, the effect of breaking up large “natural” monopolies seems to be a rise in prices; I know that this was true for Alcoa (another “natural” monopoly), and am told that it was for other monopolies. AT&T, of course, was heavily regulated and therefore not the same.
The technology industry hates Microsoft; that I can understand. But the fact that they’re nasty and their code is bloated does not automatically imply that consumers would be better off if they were broken up; only that Silicon Valley engineers would be. For one thing, the network effects are valuable; getting rid of them by law would increase users’ economic costs. For another, the monetary price of the software would probably have to rise to support the fixed costs of multiple companies. Not to mention the fact that the breakup would be extraordinarily destructive of value; there are no clear lines, the way there were with Standard Oil, etc.
Silicon Valley types always go back to the good companies that were bought and shelved, or put out of business; but they rarely address whether consumers would really have cared enough to pay the associated costs of a breakup. The purpose of anti-trust law is not to produce neat technology; it’s to protect the ordinary consumer.
And finally, I expect Microsoft’s dominance to wane when Bill Gates & Ballmer retire in 10 years or so, so I think the cure is worse than the disease.
Standards are good; in technology, standards enable interoperability and the stimulate competition. The computer industry invests a lot of money in standards endorsed by the IEEE, ANSI, ECMA, and other organizations in which industry and government come together. Monopolies are a route to standards, and in the sense that they develop them, they do a service to these consumer weenies, no question about it. But standards that arise out of an open process level the playing field for all competitors, while standards that come out of a back room at Microsoft or IBM or AT&T and are only partially shared with the world don’t benefit the marketplace.
I personally don’t see any value in splitting the OS and Browser divisions of Microsoft into separate companies, and I therefore believe that the proposed remedy in the Microsoft case is less than ideal, just as the Kyoto Treaty is a less-than-ideal solution to anthropogenic global warming, which is likely to decline on its own as we exhaust the stocks of fossil fuels in a few decades.
But it is the case that Microsoft and Cisco have both engaged in rapacious acquisition strategies in order to limit competition in their respective markets. The companies they’ve bought and killed were, for the most part, selling stuff that people were buying, stuff with a future, and stuff that the hegemon didn’t have. The strategy behind these acquisitions is an open secret, of course. So even if Windows is great and IE is the best browser (which it is,) monopoly behavior, on balance, is bad: in many cases, we’re forced to use candles because the light bulb companies have been bought and killed. Surely that’s not good.
As far as pricing goes, you have to look at the effects of monopolies on commodity pricing in the last phases of product life cycle – that’s when the monoply extracts maximum profit, according to the methods that Texas Instruments teaches its managers.
Well, the fact that prices were declining during Standard Oil’s reign doesn’t prove that the monopoly was good; the technology was also improving, and it’s hard to dis-associate the two things. But when the price inflects right at the breakup, it’s a clear indication.
The point is not that Microsoft is a fabulous, unalloyed good; the point is that remedying the problem would, any way you cut it, be a cure worse than the disease. Break up the company and you have a disaster. Don’t break up the company, but get a judge to run it, and you have a legal boondoggle that costs millions and slowly puts Microsoft out of business, which would make programmers happy until they realized they now have to code for 8 Operating Systems, their average salary has gone down by 30% (one estimate I saw of the effect of Microsoft on programmer salaries; possibly wrong, I grant); and the tech sector has crashed so badly that it will be a cold day in hell before they IPO. OR you get what we’re pretty much doing, which is to put the fear of God into Bill Gates and hope it works.
I’m not really a libertarian — more of a fellow traveler. But my position certainly isn’t that everything a corporation ever does is fabulous; it’s that you have to look at the costs, as well as the benefits, of instituting a remedy. And other than in cases where the original source of the monopoly was a government grant, I haven’t seen any benefit in the data.
Actually, I kinda knew you weren’t a true libertarian when you weighed in on this monopoloy deal, because a true lib would just say “there ain’t never been a monopoly, and I know because Ayn Rand told me so” so don’t identify with my remarks about the True Believers.
I can think of a couple of reasons for kerosene prices to rise at time when demand for gasoline was growing, given that both juices are made from the same stuff and refinery capacity is finite and that sort of thing – supply and demand. It could also have been the case that SO kept kerosene prices low in order to depress demand for electricity, which didn’t turn out to be a winning strategy. I dunno – I never studied that case, so I can’t say what’s behind the numbers.
As to whether the medicine is worse than the disease, I think this is often the case when a fat, sloppy, federal government gets into the details of a big company, but not intrinsically so. The Feds could simply require MS to publish all the APIs used by its applications, and put the breaks on any new MS acquisitions, and I’d be happy. Making them spin the non-OS businesses off into a separate company wouldn’t be a bad deal either, but it wouldn’t necessarily help a lot either. Making MS separate the browser from the OS is just plain silly, however, for technical reasons. Making MS contribute to a VC fund to be used to promote competition is the thing I would most like to see the courts do, because that would be downright poetic justice. Government-created VC funds can be very successful, as Singpore has shown us.
It seems to me that the TB libs are missing the boat by not being more federalist – federalism is the best cure for government excess, because it forces governments to compete for jobs. It’s really quite a nifty deal.