Asking for it
Posted by aogTuesday, 26 May 2009 at 08:49 TrackBack Ping URL

The impending financial collapse of the state of California has drawn a lot of weblogging attention. I am firmly in the “blame the voters” camp.

One can look at Governover Schwarzenegger’s political trajectory to see this. The Governator tried to get some reforms enacted in 2004 but was crushed at the polls. The voters made a clear statement that they had no interest in accepting any of the downsides of maintaining the fiscal health of the state and the Governator (understandably, but not to his credit) gave the voters what they wanted, good and hard.

Even the putative “voter revolt” in the rejection of the recent ballot initiatives is much less than it has been portrayed. The turnout was, to the best of my knowledge, less than 25%. So it could easily be that a majority still favors high spending and intrusive government. It’s easily possible that every single “no” vote was from someone who also voted against then candidate Obama and nothing, really, has changed.

I also want to dismiss the complaints of “jerrymandering”. I certainly think jerrrymandering is a Bad Thing and should be avoided as much as possible, but ultimately it’s just an excuse. People still vote, the elected still get the majority of votes of voters in their actual district, and the districts must contain roughly equal numbers of citizens. In a state where a legislastive majority is held by a thin margin, jerrymandering can mean frustrating the actual will of the voters. But given California’s massive party imbalance, that’s clearly not the case in that state.

As far as I can see, California is still checked in to the Hotel, the voters still suffering from reality dysfunction, wanting low taxes with high spending, extensive government economic intervention without affecting business, and strong public labor unions with effecient government services. Good luck with that!

Comments — Formatting by Textile
Bret Tuesday, 26 May 2009 at 11:04

As goes California, the United States as a whole will follow. Have you read Jonathon Rauch’s Demosclerosis or Mancur Olson’s The Rise and Decline of Nations? Both books (and many more studying Public Choice Theory) describe how special interest driven agendas overwhelm voter wishes and will ultimately cause our systems to become increasingly dysfunctional. It’s inherent in the system and there’s nothing we can do about it (shy of a federalism amendment of revolution, neither of which is gonna happen).

At least California will be bailed out by y’all.

I’m not sure who’s gonna bail out the U.S. when it gets to the same point as California.

Annoying Old Guy Tuesday, 26 May 2009 at 13:30

This is one of the reasons I am a libertarian / minarchist, as it seems to me that the only bulwark is a general prohibition on such things. Once you put a crack in that, regardless of how noble or beneficial that specific crack is, you’ve doomed yourself to this end state. That’s what I have over the years failed to communicate to Mr. Eagar, and what I think the most fundamental flaw in his policy view. It ties back to the discussion on externalities and how one can deal with those without ending up like this.

AVeryRoughRoadAhead Tuesday, 26 May 2009 at 15:45
I am firmly in the “blame the voters” camp.

Me too, I agree so much that it hurts. Those who pay attention have seen this coming from a LONG way out, even when Cali was booming.

I’m not sure who’s gonna bail out the U.S. when it gets to the same point as California.

The rest of the world. While the U.S. are going to experience a universe of pain, we’re still better-off than are most of the G-20 with regard to natural resources, industrial and post-industrial development, and demographics, excepting at least Canada and Brazil - and maybe India.

So while “bailed-out” might not accurately describe what’s going to happen, it seems very likely that we’ll be relatively less-hurt and more-attractive, which may amount to the same thing.

Bret Wednesday, 27 May 2009 at 00:24

aog,

It’s easy to say that if we were a libertarian minarchy then lo, special interest driven sclerosis wouldn’t happen. I’m skeptical for a number of reasons including the following:

  1. The US in 1783 was not all that far from a minarchy (at the federal level), and the founders even gave keeping it that way a pretty good shot given the way they wrote the consitution, but that didn’t stop us from evolving to the current state of affairs.
  2. There’s never been a minarchy that has existed in conjunction with the economic complexity we have - it’s far from proven that there could be such a thing.
  3. If there had been no government restraints on business size, my guess is that eventually some set of corporations would have been much larger and probably more powerful than the minarchy and that seems to me to be an unstable situation.
  4. Even minarchies have boundaries that would be “cracks” in the “bulwark”. For example, just what sort of clauses are allowed in contracts, how big should the military be, when should wars be fought, etc.

It’s sad to watch the decline of our nation, but I think it’s inherent in any prosperous human political system.

Annoying Old Guy Wednesday, 27 May 2009 at 08:01

I wasn’t claiming a minarchy would prevent demosclerosis, only that it’s the best we can do.

pj Wednesday, 27 May 2009 at 09:16

Bret -

Re #2, on the contrary, only countries with minarchic government have developed economic complexity. Countries with large governments have stagnated. You can live off inherited institutions and an inherited culture for a human lifetime or so, but once they’re out of living memory, society stagnates or regresses.

Re #3, a minarchy is not a non-existent or even weak government. Anglo-Saxon England’s government is commonly referred to by historians as a “strong state”, even though it was minarchical and limited, because it was capable of enforcing its laws, which most European governments at the time (650 - 1066 AD) were not. Usually, the more extensive the government, the weaker it is and the more subject to infighting among special interests; the more limited the government, the more effective it is at enforcing agreed-upon laws.

Harry Eagar Wednesday, 27 May 2009 at 12:36

Howard Jarvis, phone your office.

I, too, blame the voters.

Bret Wednesday, 27 May 2009 at 13:17

pj,

The current economic complexity is vastly greater than any time in history. I read somewhere (but can’t find the link now), that Walmart alone sells more different products today than existed in the entire world when the U.S. was founded. Tellingly, in my opinion, there are no minarchist governments ruling any country with a significant population (e.g., more than 10 million people).

joe shropshire Wednesday, 27 May 2009 at 13:40

Oh, I think the voters are doing just fine.

David Cohen Wednesday, 27 May 2009 at 18:51

Note that Harry blames the voters for not being willing to pay more taxes, which is not what I take AOG, et al., to be saying.

joe shropshire Wednesday, 27 May 2009 at 20:02

Yes, of course, and God bless those voters. May they keep digging until you can see the smoking hole from orbit.

pj Friday, 29 May 2009 at 17:34

Bret - Complexity of the economy is inversely correlated with average size of government over the prior human lifetime. The less government, the more social complexity.

This is what you’d expect on theoretical grounds, for reasons that Hayek noted: complexity depends on having many decision-makers, having a small number of decision-makers (i.e. government) forces economic simplicity.

Harry Eagar Friday, 29 May 2009 at 17:46

That can’t be right, or the American economy would have gotten less complex after 1940.

It also flies in the face of the experience of the UK and Germany in the late 19th c. and of Japan in the late 20th c.

Bret Friday, 29 May 2009 at 19:03

pj,

I hate to agree with Harry :-), but I’m skeptical. Do you have a link handy?

But even if so, it doesn’t address the fact that once the economy grows more complex, it may need a larger government to deal with that complexity. Again, the global economy is the most complex ever and the governments are the largest ever. It’s impossible to say, “hey, let’s go back to a minarchy”, and be sure that you’re not throwing the baby out with the bathwater.

pj Friday, 29 May 2009 at 20:20

There’s plenty of large-numbers-of-nations studies linking economic freedom and size of government to GDP per capita. GDP and complexity rise in parallel, so these studies are on point.

If larger government diminishes complexity (and GDP with it), as it does in theory and in empirical evidence, then why should we want to respond to complexity with more government?

The fact that government has grown recently doesn’t show that more government causes complexity or that complexity causes (or requires) more government. On this issue, a wide range of views are represented among economists. Some argue that more wealth makes voters feel they can afford bigger government, so they indulge their preference for it even though it’s wealth diminishing. Another issue is that long time scales may be needed to evaluate institutional changes. Was the end of the Roman Republic and the steady growth of Roman authoritarianism, taxation, and serfdom under the Empire needed to deal with the rising complexity of Roman society? Most historians agree that Roman tyranny grew steadily worse and eventually undermined the empire, but from the fall of the Republic it was 200 years to the peak in Roman GDP, and 500 years to the fall of the western empire. The costs of big government may be largest after some delay, as it corrupts the culture: it may take a human lifetime or longer for the culture to change decisively. So it’s premature to say that increasing government since 1940 hasn’t hurt the US, or won’t in time substantially diminish economic complexity. Remember also that technology advances tend to increase economic complexity, so government can be harming complexity/GDP, just not so much as to overcome technology advances.

Harry Eagar Saturday, 30 May 2009 at 12:23

I’d say that technology = complexity, and ‘nuff said.

And there’s plenty of evidence, from Renaissance Venice, from ancien regime and Napoleonic France, from antebellum America, from Wilhelmian Germany, (in reverse) from Victorian Britain and from post war Japan — even, most compellingly from Stalinist Russia and Maoist China, that increasing government drives economic complexity.

That would depend upon the newly large government’s being interested in driving economic complexity. That was not the case, for example, in the Ottoman Empire, and, eh voila! economic complexity failed to develop.

pj Saturday, 30 May 2009 at 15:57

Harry - Technology is not social complexity. Nigeria has access to the same technology the US does, but that doesn’t mean they can achieve social complexity.

You think Stalinist Russia and Maoist China were economically complex? They were organized in the simplest possible system — a hierarchy.

Bret Saturday, 30 May 2009 at 22:53

Since I was the first one to use the word “complexity” in these comments, what I specifically meant was basically total number of different products, with some weighting by value and other factors, produced in an economy.

For the purposes of complexity by this definition, it doesn’t matter how society is organized. If it produces millions of products with large value, it has a complex economy, even if centrally planned. If it only produces a limited number of products with limited value, then it is not a complex economy (by my definition), even if there are hundreds of millions of works acting totally independently.

Harry Eagar Sunday, 31 May 2009 at 23:41

That was what I thought you meant.

However, I have no idea what social complexity might mean. Nigeria is socially various, with its hundreds of tribes, which have different religions, legal systems etc.

In college, I wrote a paper once on divorce laws in Papua. They have way more ways of divorcing than we do. Is that socially complex or socially simple? Irrelevant to the economic discussion, I suppose, but many conservatives (like, eg, Mencken) thought that America was becoming less socially various, because the old traditions of individualism were, in their minds, being swamped by conformity.

cjm Thursday, 04 June 2009 at 12:30

as a 4th generation californian, what has happened to my state is very sad. ironically, it was the huge influx of east coasters over the last 30 years that has led to this sorry state of affairs. locusts have nothing on this bunch.

AVeryRoughRoadAhead Thursday, 04 June 2009 at 15:13

LOL

That’s funny because the other Western and the Nor’western states have the same complaint about Californians: That they’ve been leaving Cali in droves for over a decade, for various economic reasons, and wherever they congregate in large numbers they try to change the local society and gov’t to resemble that which they fled.

Harry Eagar Thursday, 04 June 2009 at 20:37

Californication, it’s called in Hawaii.

At least nobody is blaming the Mexicans. Or are they?

cjm Friday, 05 June 2009 at 13:54

the “californians” messing up neighboring states are the same locusts that devastated california, and are now moving on to greener pastures.

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