Questions for you, a lot of criticism of the free market is
not unique to the free market. For example, there is greed, and
there is dog-eat-dog competition and it can disrupt and disorder.
And there's no guarantee of my safety.
Well, that all applies tenfold to the state because you dance
data, funding them and they have no competition.
Do you think there's anything that uniquely applies negatively
to the free market? That justifies the existence of
a state? I really don't think there is a
really don't think there is I Sigh.
I'm I tend to believe that states are kind of inevitable in
that. There's always going to be an
organization with a comparative advantage in violence, which is
kind of the way that my advisor to find a state when I was in
graduate school, but I don't think it's necessary.
So we're like this song in The Sound of Music with a girl
singing. Anything You Can Do, I Can Do
Better. I would say anything states, can
do markets, do better and I don't think the state is
necessary for any of the Problems that we any of the
problems that we, that we, that we want to fix or any of the
problems that we want to solve. I think the last four years have
been a really nice illustration of the difference between
between the market and the state.
When you consider the administration of Donald Trump
and a lot of people are horrified at Donald Trump.
As just it just a crass. Human being who is just as an
opportunist and assume for sake of the sake of argument that
everything everybody says about Trump is right.
It is right that he's he's the Worst of the worst?
Okay. Well, would you, would you
prefer a world in which he's doing suspect real estate deals
in New Jersey and New York. To a world in which he has his
finger on the nuclear button. And I think the answer is.
Yes, I would much rather Donald Trump be confined his confined
his efforts to, to trying to make money in the real estate
market rather than trying to make America great Again by
pursuing. All sorts of boneheaded
policies, like immigration, restrictions and tariffs.
Yeah. In your book, political
philosophy and introduction and in your book.
Why not capitalism, you mentioned this excellent book,
the problem of political Authority, and examination of
the right to coerce and the duty to obey by Michael humor.
Well, what is so important about this book?
Yeah. It is one of my favorite books.
So one of the main questions in political philosophy is what if
anything justifies government? And in particular, government's
claim to have two special moral Powers, which That means they're
different words and ones. He uses.
I call them legitimacy and Authority legitimacy refers to a
supposed governmental power to create and enforce rules within
over certain geographic area against certain people.
So, governments are a proper subset of a society, which
claimed the right to have Monopoly power in coercively
enforcing rules. That's what they are.
So, what makes government legitimate?
If anything, why would it have the right to create these rules?
Why would it be allowed to enforce rules that others
cannot? Not Authority is another
purported power of government where to have authority, as to
have something like a power to impose.
Another is an obligation to obey.
So, if I say to you right now, you may not smoke marijuana.
You don't think you have any obligation to follow my orders,
right? I'm I order you.
Not to smoke pot. You're like, who are you?
You don't have to listen to you, but when governments order us,
not to smoke pot, most people believe that we acquire an
obligation, not to do it in virtue of government, issuing,
that order. So, The perplexing, why would
government have legitimacy? Why would it have authority?
And what Mike doesn't that book is very carefully, goes through,
you know, a couple thousand years of arguments, trying to
show that governments have authority and legitimacy and
it's amazing how bad these arguments are.
It's like, basically, they all fail, you know, so the argument
that you get in Heist, like in Middle School that your teachers
tell you is well government has Authority because you consent to
government and it's like, no. You don't.
There's no interesting. There's no plausible.
Interpretation of the relationship between you and
your A government under which its consent, they'll make other
kinds of arguments as well. So my can Ferry carefully goes
through and shows that none of these arguments work.
He then gives us a psychological diagnosis about why we might
believe in government Authority even though we don't have any
good arguments on its behalf. And that's the first half the
first half, you just basically shows.
We don't have any reason to believe in Authority or
legitimacy. The second half then asks is
anarchism feasible. So if we don't have reasonably
even Authority or legitimacy, what about the alternative
anarchism and Mike says look, we don't With it would work.
Maybe it would be a disaster. But he gives us some grounds for
thinking empirically, that it would work better than people
think a lot of the things they think would happen under
Anarchy. Just, it's not as bad as they
think and some other books you might read on that you're
interested in, in Turk is among there's a book called Anarchy
Unbound, which is a nice kind of case study in how anarchism is
actually, I think the subtitle is why anarchism works better
than you think. And another book by Edward
string and called private governance, where he points out
that. As a matter of fact, this is an
empirical claim. Most of the government are
governance, the rule enforcing that protects your rights in
your own life is not done by government.
It's done through extra legal channels.
It's incredible that he can be. So skeptical about market
failure, but doesn't hold those same principles to the state.
So people don't have tons of information in the market.
So, they make bad decisions. What are people omniscient about
politics and politicians? Of course.
Well, there's greed in the Place, there's greed in
politics. Do you see anything that
uniquely applies to the monitor? The free market in a unique way
that - and unique to the market that doesn't apply to the state
tenfold? Considering you can't opt out of
funding them and they don't have competitors.
Well, let's see. It's a tough question.
It's a good one. I'll, let me come back to that
in just a minute. So mean, here's the way, was
very revealing to me about Paul Krugman.
Now, Tyler Cowen did an interview with him and Tyler.
Is able to actually ask him some really hard questions about why?
Exactly. Would you think the government
would do? Well, and here's the thing.
Paul Krugman doesn't think the government's do, well, when you
actually get them on on that topic.
So, yeah, this government really screwed up royally screwed up.
And Tyler actually had what to me, is the million-dollar
question of like, you're like, you know, you're very partisan
Paul. You're very you really hate the
Republicans. You really like the Democrats
and yet, if we look at a bunch of states, where they have one
party Democratic rule. Happy with Ivan what they've
done. So dude, what gives right and
Paul did not Dodge the question. He did have some thoughts that
were satisfactory, but he did acknowledge the issue and even
went and said yeah, well, you know when like your one party
Democratic stage, they wind up getting a lot of good ol, boys,
club is basically and they're kind, they're corrupt and they
don't really worry about pleasing voters anymore.
And sometimes they'll get a pragmatic, Republican governor
in the Northeast and that works out kind of make it better, but
no, it's not quite so, Say that. But that was the gist of it.
So, you know, I mean to me, it really comes down to like at a
core level. Can you just say?
I just think I just think the government is going to mess it
up or is it just a matter of it's messed up a bunch of times.
But there's no General lesson in other words, like I think for
someone like Paul Krugman, he's happy to admit.
The government is screwed a bunch of times but doesn't want
to draw the lesson of. We should expect government to
keep screwing up in similar ways in the future.
So he wants to think of that as Sort of accidental Sonia for him
government failures, more accidental.
It just happened. Where's market?
Failure is systematic. It's the way the system works.
And if you were say, yeah. Well, that's the way the
government works to in a way would just be very hard for him
to deal with that and he does Dodge that but he's not blind
till he's a super smart guy, right?
And again when you frame it in the right way, then he does
actually acknowledge things that you might be surprised to see
colleges. Something that was one of my
favorites and counters from I mean, I wasn't there but your
Favorite expressions of his love the way that he thinks in terms
of problems that markets have, the government's don't have ten
times over. Let's see, I guess then we have
a like the the probably the best answer is the problem of get it,
of, of the transactions costs. So the key thing about markets
is to make things happen. You've got to get people to
agree, and sometimes that is so expensive that it's just, no way
to get it to accomplish it and government, basically, The
ability to pull out a gun and saying, you know, we're going to
save a lot of money on a negotiation now guess we're just
going to do it my way. Shut up.
All right. Now that head causes a bunch of
other problems, but it does save on negotiation costs.
All right, I'll give that one to you.
But but for the same reason we wouldn't say, you know,
negotiation costs are high. Therefore the Koch brothers have
the right to initiate aggression, against peaceful
people to lower them. We shouldn't give it to Doug
Ducey or Donald Trump either. Yeah.
I agree, but still kind of thing.
I would point to excellent. Thank you.
Thank you for I'll often ask people if I don't like what
Olive Garden's doing and I go there, can I stop working there,
or going there or what? If I do the same with Walmart?
And people look at me and say, Obviously, of course, you have
the right to stop funding them. However, when it comes to
government services, people don't extend that same courtesy,
how was it that people have been tricked or people understand
government, to be held to a total different moral standard
than All other organizations. Yeah, well in general, you know,
I work a great length on political psychology and a lot
of my work is on thinking about what political psychology tells
us about the justification of democracy and voting behavior.
And in general, you what political psychologist find is
that most people don't really have an ideology.
They don't really have strong political beliefs.
And the people who do for most of them.
It's kind of a post-hoc rationalization.
Where the model is almost like this would be sort of personal.
To me. It's like you're an Irish guy
from northern, Massachusetts. Irish guys are more than
Massachusetts. Tend to vote Democrat.
Not because there's anything special about the Democrats
helping them, but just because that's what people like us do in
the same way that like you root for the Patriots.
If you're in from the Boston area, right?
And then a small percentage of those people will then post hoc
rationalization agree with the beliefs of their party.
So I think when you look at what people believe about politics,
you can't really get too excited by that.
It's not the purpose of as Robin Hanson would say, the Piece of
politics is not policy. Politics is not about policy.
People's political beliefs are not about describing how they
think the world really works or should work.
It's rather we use our political beliefs in the same way that we
use these t-shirts. It's a way of showing certain
people that I'm on their side and in part of their Coalition,
so, yeah, you know, the fact that there's an inconsistency in
most people's beliefs is not surprising because they're not
using those beliefs to form a rational theory about the world.
They're using them for another social purpose, but you're
right, there is there is a huge tension there in that the
reasons that people give on against monopolies against it
socially mandatory Monopoly. Why would it be bad?
If Walmart were the only retailer and you were be forced
to shop at Walmart? If there were no permission to
have competition, they're going to give you some account for
that. And if you ask them the same
question, well, why doesn't your anti-monopoly argument apply to
government there? It's they're going to give you
their it's not clear how they overcome that.
The main thing that they're going to say, of course, is
well, we Have to have a monopoly on violence.
Violence is different governments?
Enforce the rules with violence. And if we had competition, what
that would mean is that we have warring factions on the street
constantly fighting place for say and police force B would be
shooting each other to try to maintain dominance.
And so, you know, is that true. Well again, I think you would
look at that book, Anarchy and bounds by a release and and Mike
humors book, the problem of political authority to give you
an account of why, this view of Anarchy is probably not right
that and Our kids on would not mean just constant violence on
the streets between warring factions and gangs a lot of
criticism of the free market. You'll hear things like, well,
there's corruption and there's greed and people don't have a
lot of information, so they often get manipulated.
The problem with virtually all of these criticisms is they
apply tenfold to government intervention because you can't
opt out of it and they don't face competitors to which you
can go to. If you're not satisfied with the
product or service. Do you see that?
There's Any unique criticism of the free market.
That doesn't also apply to Socialism or the state know,
what would that be? And I mean the the corruption
thing definitely. I mean if You have to go to 11
bureaucrats, to start a business, or get your permit or
license requirement. That's eleven bureaucrats, who
can force you to pay bribes to do it.
And that's one of the biggest problems in many poor countries.
You know, when I go, when I'm being to Kenya, people tell me
in the slums that they have a saying that it's not safe to
carry cash around here, because there are too many policemen and
the policemen. They see.
Oh, you got a store here, would be sad.
If something happened to that. I you Of a permit, right?
So just pay up. So the fewer restrictions and
regulations the fewer opportunities for for
corruption. Well, is there anything unique
you can say about the problems of a free markets that doesn't
apply to it? They would have to be more.
I think psychological. It would have to be something
about Are we overwhelmed with Choice?
Perhaps? We don't want as much Freedom as
we have in a more open economy, perhaps it's better if someone
tells us what to do and I think there are some intellectuals who
are trying to make make that argument.
Well, we have Cass sunstein who wrote the book not judge who
says yeah, unfortunately people have too much choice and it's
the role of the state to coerce them into doing otherwise, so,
unfortunately, That is one. But for the same reason, I
oppose the state forcibly stopping me.
I also oppose Walmart from stopping me and Amazon.
So I just hold them to the same standard.
I told anyone else. Yeah.
Choice is bad, but it doesn't give me the right to go around
violently. Dominating Johan, Norberg.
I'm going to need to see a copy of the book before I allow it to
be published because you have too many choices with what you
want to write about. So that it's always the other
guys choices. That's a problem.
Right? It's never your own have to be
restricted. Stood, of course.