This weekend’s New York Times brought the interesting story of AquaBounty’s genetically modified salmon, which are genetically engineered to grow twice as fast as normal Salmon.
To make a long story short, they first applied to the FDA for approval to sell the product in 1993, and to this day the FDA is still soliciting comments. Jonathan Haidt portrays conservatives as having a stronger “purity” focus than people on the Left. I think this is a counter-example.
In response to some pushback on this post.
Should we treat state officials differently from other people? Suppose someone puts on a siren and goes speeding through traffic. Why should we defer to them?
One answer is that it depends solely on their purpose. A vigilante who puts on a siren to pull over a driver who is violating the speed limit has just as much right to authority as a police officer who does so. Conversely, a police officer who arrests someone for ingesting a plant is just as wrong as a vigilante who does so.
I do not think that answer holds up. At some point, we need more than just on-the-spot moral intuition. We need articulated laws. Who articulates the laws? Going with the principle of treating government officials no differently from anyone else means that laws articulated by legislators are no different from laws articulated by anyone else.
I continue to believe that it makes sense to think about government officials having rights and responsibilities that differ from that of other citizens. Although we certainly can and should make moral judgments about how they exercise those rights and responsibilities, I do not think that the simple heuristic of “what if an ordinary citizen did that?” can settle the issue.
If you do the math, you discover that in the long run, income levels and initial wealth (factors 1 and 2 from above) are not the main determinants of wealth. They are dwarfed by factors 3 and 4 — savings rates and rates of return. The most potent way to get more wealth to the poor and middle-class is to get these people to save more of their income, and to invest in assets with higher average rates of return.
Is this true? If so, it strikes me as a very conservative proposition. It suggests that the civilization-barbarism axis is what drives inequality of wealth, because deferred gratification is one of the civilized values in the conservative pantheon. In effect, Smith is saying that wealth comes from civilized behavior and lack of wealth comes from barbaric behavior.
Utterly oblivious to irony, Smith proceeds to recommend that government teach people to save.
Pointer from Mark Thoma.
Nearly three-quarters of the spending increases in Medicare over the next two decades can be attributed to aging alone. And, as I will explain, the remaining increase in costs due to health care inflation will be very difficult to avoid because even that amount of projected growth is lower than anyone realistically believes we can sustainably achieve. Thus, the major problem in Medicare really is one of an aging population. In this case, the Medicare problem is no different than the Social Security problem.
Kudos to Mark Thoma for providing the pointer. The essay contradicts the world view of many of those with whom Thoma usually sides.
until the age of 35, an individual should be able to choose to have 12.4 percent of his salary paid not to Social Security taxes but instead into a restricted savings account covered by deposit insurance, from which savings can be used only to make a down payment on a house. The down payment (using this and possible other savings) must be a minimum of 20 percent, the house must be bought to live in, and the related loan must be a sound credit which is a “qualified mortgage,” as now defined by regulation. The point will be to create retirement savings in the form of equity in property, as a partial alternative to earning benefits from a troubled government pension program.
A major motivation behind the idea is a desire to steer government policy away from encouraging people to buy homes with little or not money down.
Charlie Quidnunc spotted this one:
the Department of Agriculture is proposing to purchase 400,000 tons (with a “t”) of sugar from domestic producers
This is why we don’t need to worry about the government Budget. This sort of spending is what grows the economy, right?
the question of political authority is not “Should we have government?” The question is: Should the government be subject to the same moral constraints as apply to private agents? The failure of theories of political authority means that we must apply to the state the same moral standards that we apply to private agents. If a private agent would not be justified in using coercion to achieve a particular goal, then the state is also not justified in using coercion to achieve that goal.
The state is an institution, not an individual. Individuals play roles within this institution, such as legislator, policeman, or citizen. These roles are defined partly by law and partly by custom. When one talks about applying moral standards to the state, what I think this means is that we are applying moral standards to its laws and customs. For that purpose, using the metaphor of the individual to characterize these laws and customs may be helpful but it is not obligatory.
Consider another institution–a business. Should we say that a business is like a family, and the owner should be subject to the same moral standards as apply to a parent? Some people might find that analogy attractive, but I do not.
I think that the term I am looking for here is “category error.” Saying that a business or “the state” belongs in the same category as an individual strikes me as such an error. Instead, I think that “the state” belongs in a category that is closer to “relationship” or “institutional arrangement.” Within that institutional arrangement, we give authority to firemen to break traffic laws in the line of duty. When they are off duty, they are subject to the same laws as the rest of us. There are many relationships and institutional arrangements in which we authorize people to do things to us that differ from what we would permit a random stranger to do.
The problem I have with government is with the scope and scale of monopoly control. I think that the laws and customs in the United States today give too much authority to government officials. I wish that everyone had much more freedom to choose laws and customs without being forced to accept the territorial monopolies that we call government. However, I would not lean on Huemer’s arguments to make that case. Instead, I focus on the knowledge-power discrepancy.
I wrote about Huemer’s book here, and we had a follow-up exchange here.
The second of my essays on the function of banks. In this one, I talk about their relationship with government.
Think of two friends who walk to a neighborhood bar every Saturday night. On a given Saturday, the first friend may be too drunk to walk without assistance, and he may have to lean on the second friend in order to make it home. The following Saturday, it could be the second friend who needs to be supported in order to get home. However, if both of them get too drunk and try to lean on one another to get home, they may collapse together.
This is how I picture the current situation in Europe. Many European banks are unsteady. They need government guarantees and capital injections in order to stay in business. At the same time, many European governments are heavily indebted and running large deficits. They need banks to continue to lend to them in order to fund their spending.
Read the whole thing. My prescription for addressing the relationship between banks and governments is to try to apply the approach of “limited guarantees, for limited purposes.”
Richard W. Fisher and Harvey Rosenblum write,
we would roll back the federal safety net—deposit insurance and the Federal Reserve’s discount window—to apply only to traditional commercial banks, and not to the nonbank affiliates of bank holding companies or the parent companies themselves, where the safety net was never intended to be.
This is one of several proposals that they make to try to reduce the power of big banks.
The opposite choice is the Gary Gorton approach. That is, acknowledge that the financial sector has changed, and expand the government insurance umbrella to include new instruments, such as repurchase agreements. I may not be characterizing Gorton’s views charitably. I have always disliked them.
The Dodd-Frank legislation is an awkward compromise between these two approaches. It probably satisfies no one. It certainly does not satisfy those of us who want to cut the big banks down to (a much lower) size.
1. Russ Roberts talks with long-time Web visionary Doc Searls on econtalk.
2. At MRUniversity, I am trying to have weekly video chats as part of my course on housing finance. Here is a recording of the first one.