• About

Sacred Cow Chips

Sacred Cow Chips

Tag Archives: Joseph Stiglitz

Interventionists Love You and Demand You Change, or Else

19 Friday Aug 2022

Posted by Nuetzel in Central Planning, Industrial Policy, Uncategorized

≈ Leave a comment

Tags

CHIPS Act, David McGrogan, Dierdre McCloskey, Don Boudreaux, Industrial Planning, Inflation Reduction Act, Jason Brennan, Joseph Stiglitz, Lionel Trilling, Lockdowns, Pandemic, Paul Krugman, Scientism, Solyndra

Statistics and measurement might not be critical to the exercise of the authoritarian impulse, but they have served to enable the technocratic tyranny idealized by contemporary statists. Certain influential thinkers have claimed our ability to compile statistics helps give rise to the bureaucratized state. I ran across a great post that led with that topic: “The Brutalization of Compassion” by David McGrogan. The mere ability to compile relevant statistics on a population and its well being (income, jobs, wages, inequality, mortality, suicide, etc… ) can motivate action by authorities to “improve” matters. The purpose might be to get ahead of rival states, or the action might be rationalized as compassion. But watch out! McGrogan quotes a bit of cautionary wisdom from Lionel Trilling:

“‘When once we have made our fellow men the objects of our enlightened interest,’ he put it, something within us causes us to then ‘go on and make them the objects of our pity, then of our wisdom, ultimately of our coercion.’”

Ultimately, to pursue their vision, interventionists must impose controls on behaviors. In practice, that means any variance or attempted variance must be penalized. Here’s McGrogan’s description of the steps in this process:

“The conceptualisation of the population as a field of action, and the measurement of statistical phenomenon within it – the taking of an ‘enlightened interest’ in it – gives rise to both ‘pity,’ or compassion, and the application of ‘wisdom’ to resolve its problems. What is left, of course, is coercion, and we do not need to look far to identify it in the many means by which the modern state subjects the population to a kind of Tocquevillian ‘soft despotism,’ constantly manipulating, cajoling and maneuvering it this way and that for its own good, whether through compulsory state education or ‘sin taxes’ or anything in between.”

Follow the Scientism

I can’t neglect to mention another important condition: the hubris among apparatchiks who imagine the state can improve upon private institutions to achieve social betterment. They will always fail in attempts to replace the action of the private markets and the price mechanism to process information relating to scarcities and preferences. Absent that facility, human planners cannot guide flows of resources to their most valued uses. In fact, they nearly always botch it!

Government provision of public goods is one concession worth making, but the state capacity needed to fulfill this legitimate function is subject to severe mission creep: we frequently see efforts to characterize goods and service as “public” despite benefits that are almost wholly private (e.g. education). Likewise, we often hear exaggerated claims of “harms” requiring state intervention (e.g. carbon emissions). These situations often hinge purely on politics. Even when legitimate external benefits or costs can be identified, there is a pretension that they can be accurately measured and corrected via subsidies or taxes. This is far-fetched. At best, it’s possible to vouch for the directional appropriateness of some interventions, but the magnitude of corrective measures is variable and essentially unknowable. Too often we see government failure via over-subsidization of politically favored activities and over-penalization of politically disfavored activities.

One of the most egregious errors of intervention is the over-application of the precautionary principle: if risks are associated with an activity, then it must be curtailed. This often relies on measurements of highly uncertain causes and effects, and it involves aggregation subject to its own biases.

Just as questionable is the ability of “experts” to model natural or behavioral processes such that outcomes can be “predicted” over horizons extending many decades forward. That interventionists tend to ignore the uncertainties of these predictions is the most blatant and damaging conceit of all, not least because the public and the media usually have limited knowledge with which to assess the phenomenon in question.

Public Health Tyranny

The Covid pandemic presented a compelling excuse for precautionists in government and even private institutions to impose radical controls under a set of claims they called “the science”. These claims were often false and really antithetical to the principles of scientific inquiry, which calls for continually questioning hypotheses, even when they represent “consensus”. Yet a series of questionable scientific claims were used to justify abridgment of basic freedoms for the general population, most of whom faced little risk from the virus. This included lockdowns of schools and churches, business closures, cancellation of public events (except of course for protests and riots by Leftists), deferred medical care, vaccine mandates, and mask mandates. The damage these measures inflicted was fierce, and in the end we know that it was almost entirely unnecessary. Still, the public health establishment seems all too willing to ignore the facts in its readiness to repeat the whole range of mistakes at the slightest uptick in what’s now an endemic infection.

Standard Issue Cronyism

In the wake of the pandemic, we’ve witnessed a surge in calls for government to enhance the security of our nation’s supply chains. Too large a share of the critical goods required by domestic industries are produced overseas, which has made supply disruptions, and the threat of future disruptions, especially acute. Right on cue, advocates of industrial policy and planning have arranged for the federal government to provide $85 billion to domestic producers of semiconductors under the so-called CHIPS Act. But semiconductor producers are in no need of government incentives to “re-shore” production:

“… there has been even more chipmaking investment dedicated to the U.S. market, even as federal subsidies have languished. Construction is now underway at four major U.S. facilities and will continue with or without subsidies—something even Intel reluctantly acknowledged when it delayed the groundbreaking ceremony on its much‐ballyhooed Ohio facility to protest congressional inaction. This is because, as numerous experts have explained over the last year, there are real economic and geopolitical reasons to invest in additional U.S. semiconductor production—no federal subsidies needed.”

Moreover, the global shortage of computer chips appears to be ending. The subsidies will unnecessarily enrich industrialists and their shareholders, provide a source of graft to bureaucrats and various middle men, and likely over-allocate resources to domestic production of chips. Industrial planning of this kind has a long history of failure, and this time won’t be different.

Climate Fascists

We also see repeated over-application of the precautionary principle and rising dominance of industrial policy in climate and energy policy. Enormous sacrifices are imposed on consumers for the sake of minuscule changes in global carbon emissions and the “expected” long-term path of future “global” temperatures. The interventions taken in pursuit of these objectives are draconian, limiting choices and raising the cost of virtually everything produced and consumed. They distort the direction of physical investment, disfavoring reliable sources of base load capacity needed for growth, and also disfavoring the safest and most reliable zero-carbon alternative: nuclear power. The renewable energy sources foolishly pushed by the state and the ESG establishment are environmentally costly in their own right, and they don’t work when natural conditions are unfavorable. As one wag says about the climate provisions of the ironically named Inflation Reduction Act, “Gonna be a lot more Solyndras coming”.

And talk about sloppy! Our “trusted representatives” in Congress could hardly be bothered to pretend they’d done their homework. They neglected to provide any quantitative carbon and temperature impacts of the legislation. This must be a case of true honesty, because they really have no idea!

Delusions of Central Planning

One great weakness (among many) of arguments for state industrial planning is the assumption that government agents are somehow more competent, efficient, and “pure of heart” than agents in the private sector. Nothing could be more laughable. On this point, some of the most incisive commentary I’ve seen is provided by the masterful Don Boudreaux, first quoting Georgetown philosopher Jason Brennan before adding his own entertaining thoughts:

The typical way the left argues for the state is to describe what economists in the 1850s thought markets would be like under monopoly or monopsony, and then compare that to a state run by angels. Both halves of the argument are bad, and yet philosophy treats this as if it were rigorous and sophisticated.

“Far too many policy proposals are nothing more than prayers to the state-god. ‘We entreat you, Oh Powerful and Sacred One, to relieve our people of this or that misery, blemish, and market imperfection! We beseech you to bestow upon us – your faithful servants – cosmic justice, safety from new pathogens, unkind thoughts, and microaggressions, and protection from each and every burden of reality that we can imagine being cured by an omniscient, benevolent, and omnipotent deity! If we obey – and sacrifice to you without complaint our treasure and our freedoms – you will provide!’

I do not exaggerate. Pick at random any proposed government intervention offered by the likes of Progressives or national conservatives, and you’ll discover that the workability of this proposed intervention, when evaluated honestly, rests on nothing more solid than the above absurd faith that the state is – or, when in the right hands, will be – a secular god.”

On the idealization of government’s ability to “plan the economy” rationally, here is more from Boudreaux, first quoting the great Deirdre McCloskey:

Deep in left-wing thought about the economy, and in a good deal of right-wing thought, too, is the premise, as Isaiah Berlin once put it with a sneer, that government can accomplish whatever it rationally proposes to do. As has been often observed about leftists even as sweet as John Rawls, the left has no theory of the behavior of the government. It assumes that the government is a perfect expression of the will of The People.

“And nothing is more unscientific – indeed, more mystical – than is this still-commonplace practice of most Progressives, and also of very many conservatives, to analyze the economy and society, and to offer policy recommendations, using such a juvenile ‘understanding’ of the state. Yet such an ‘understanding’ of the state permeates the work even of some Nobel laureates in economics – laureates such as Paul Krugman and Joseph Stiglitz. This ‘understanding’ of the state is inseparable also from the work of pundits too many to count…

That these professors and pundits think of themselves as scientific – and are widely regarded as being especially intelligent, thoughtful, and scientific – testifies to the strength of the cult of democratically rubber-stamped coercion.”

Conclusion

Humans have proven to be incredible documentarians. The advent of measurement techniques and increasingly sophisticated methods of accounting for various phenomena has enabled better ways of understanding our world and our well being. Unfortunately, a by-product was the birth of scientism, the belief that men in authority are capable not only of measuring, but of fine-tuning, the present and future details of society and social interaction. Those pretensions are terribly mistaken. However, the actions of Congress and the Biden Administration prove that it’s adherents will never be persuaded, despite repeated demonstrations of the futility of central planning. Their words of compassion are no comfort — they must coerce the ones they “love”.

Hillaryeconomics: Swelling the State

30 Sunday Oct 2016

Posted by Nuetzel in statism

≈ Leave a comment

Tags

Affordable Care Act, Anthony Weiner, Bill Clinton, Buffet Rule, Carried Interest Rule, Clinton Foundation, Daniel J. Mitchell, Exit Tax, Hillary Clinton, Hugo Chavez, Infrastructure bank, Joseph Stiglitz, Minimum Wage, Paid Family Leave, Peter Suderman, Public Option, Redistribution, Solyndra, Venezuela

14523095_10207590802749873_5458832984536437934_n

Who cares about Hillary Clinton’s economic plan while her campaign quivers in the shadow of Weiner’s hard drive? Despite all the hubbub over Mrs. Clinton’s sloppy security practices, and her lies and destruction of evidence regarding those practices, it’s a good idea to remind ourselves of some of the frontrunner’s policy proposals and the general philosophy that informs them. Daniel J. Mitchell must have been feeling jovial when he took a crack at deciphering Hillary Clinton’s economic plan. He offered translations of each of 42 Hillary catch-phrases, but the translations were identical:

“Notwithstanding all the previous failures of government, both in America and elsewhere in the world, I’m going to make American more like Greece and Venezuela by using coercion to impose more spending, taxes, and regulation.“

Mitchell highlights two general themes at the start: one is the left’s constant misuse of the term “investment’ to describe spending on almost any government initiative; the other is the still fashionable Keynesian theory that a low-productivity government can make the economy grow by a multiple of any claim on resources it deigns to make.

I’ll try to do Mitchell one better. Here’s a run-down of the catch-phrases he cites along with my own interpretations:

  • “…support advanced manufacturing” — because the government is adept at picking winners with taxpayer money, like Solyndra. Does “advanced manufacturing” involve politically-favored outputs, as opposed to market-favored outputs? Does it involve robots, or workers? Is it somehow preferable to “advanced services”?
  • “a lot of urgent and important work to do” — there oughtta’ be more laws;
  • “go out and make that happen” — we must impose the heavy hand of the state;
  • “enormous capacity for clean energy production” — …if only we can provide our cronies with enough subsidies on your dime;
  • “if we do it together” — …kumbaya; we’ll wreck the private economy together;
  • “things that your government could do” — like, wreck everything;
  • “I will have your back every single day” — …with a sharp knife, in case it’s in my interest to betray you;
  • “make our economy work for everyone” — we’ll redistribute your wealth;
  • “restore fairness to our economy” — be prepared to share your success;
  • “go to bat for working families” — …by punishing your employer; but look, we have freebies!
  • “pass the biggest investment” — mandatory campaign promise;
  • “modernizing our roads, our bridges” — shovel-ready” projects;
  • “help cities like Detroit and Flint” — redistribute resources to poorly-governed communities and impose federal oversight;
  • “repair schools and failing water systems” — because local needs and the federal government are a perfect match;
  • “we should be ambitious” — about government domination;
  • “connect every household in America to broadband” — even if they don’t want it, and even if they’ve chosen to live in the badlands; at your cost, of course;
  • “build a cleaner, more resilient power grid” — reduce carbon emissions by inflating your utility bill; dismantle markets and direct energy resources centrally;
  • “creating an infrastructure bank” — we need another big federal agency, extending control and conjuring opportunities for cronyism and graft;
  • “we’re going to invest $10 billion” — Whew! I thought you were going to say $100 billion. But… can you define “investment”?
  • “bring business, government, and communities together” — …we’ll be as one at the federal level;
  • “fight to make college tuition-free” — so that even the least qualified have a strong incentive to enroll, on your dime;
  • “liberate millions of people who already have student debt” — because meeting the terms of a contract is a form of enslavement;
  • “support high-quality union training programs” — with federal subsidies on your dime; non-union training programs would be so …exploitative;
  • “We will do more” — …cause we’re from the government, and we’re here to help!
  • “Investments at home” — Invest? Can you define that? Do you mean “spend”?
  • “we need to make it fairer” — … by redistributing your income to others;
  • “we will fight for a more progressive…tax code” — reduce those ugly private work incentives and quash the bourgeois tendency to save and invest in physical capital;
  • “pay a new exit tax” — don’t get the idea it’s YOUR company; you didn’t build that;
  • “Wall Street, corporations, and the super-rich, should finally pay their fair share” –because the highest corporate tax rate in the industrialized world is not high enough, and besides, we can pass the booty back to elites in myriad ways, as long as they give to the Clinton Foundation;
  • “I support the so-called ‘Buffett Rule'” — …to quench the thirst of class warriors;
  • “add a new tax on multi-millionaires” — we must tax wealth because a high income tax rate just isn’t enough to encourage capital flight;
  • “close the carried interest loophole” — cause we think that loophole actually exists, and hey, it sounds good to class warriors;
  • “I want to invest” — Invest? Can you define that? Do you mean “spend”?
  • “affordable childcare available to all Americans” — …so that no parent need pay any attention to price; but your tax credit will diminish if you earn extra income, so don’t earn too much, for God’s sake!
  • “Paid family leave” — …because it isn’t expensive enough to hire you already;
  • “Raising the federal minimum wage” — … so the least skilled will be jobless and dependent on the state;
  • “expanding Social Security” — …so what if it’s already insolvent? Oh, you must mean “expanding” payroll taxes!!
  • “strengthening unions” — …because we mean to kill the sharing economy, and it isn’t expensive enough to hire you already;
  • “improve the Affordable Care Act” — if it’s broke, break it more thoroughly;
  • “a public option health insurance plan” — …shhh… don’t say single payer!
  • “build a new future with clean energy” — in our judgement, your inflated utility bills will help all mankind; besides, we want to take control, and wreck something.
  • Bonus: “wage equality once and for all” — because it should be illegal for employers to pay based on occupational risk, demands for paid leave and flexible hours, skill differentials and available supplies.

Lest you think my interpretation of that bonus quotation is unfair, remember: the so-called gender wage gap is almost entirely explained by the factors I’ve listed.

Hillary Clinton’s economic view is straight out of the statist theater of the absurd. Joseph Stiglitz, one of Hillary’s economic advisors, in 2007 endorsed Venezuelan socialism under Hugo Chavez, which proved to be disastrous. Was she forced to the left by Bernie Sanders? To some extent, perhaps. But Peter Suderman notes that Clinton’s current policy agenda constitutes a thorough rejection of Bill Clinton’s economic policies. The irony!

Follow Sacred Cow Chips on WordPress.com

Recent Posts

  • The Case Against Interest On Reserves
  • Immigration and Merit As Fiscal Propositions
  • Tariff “Dividend” From An Indigent State
  • Almost Looks Like the Fed Has a 3% Inflation Target
  • Government Malpractice Breeds Health Care Havoc

Archives

  • January 2026
  • December 2025
  • November 2025
  • October 2025
  • September 2025
  • August 2025
  • July 2025
  • June 2025
  • May 2025
  • April 2025
  • March 2025
  • February 2025
  • January 2025
  • December 2024
  • November 2024
  • October 2024
  • September 2024
  • August 2024
  • July 2024
  • June 2024
  • May 2024
  • April 2024
  • March 2024
  • February 2024
  • January 2024
  • December 2023
  • November 2023
  • August 2023
  • July 2023
  • June 2023
  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • July 2017
  • June 2017
  • May 2017
  • April 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
  • October 2014
  • September 2014
  • August 2014
  • July 2014
  • June 2014
  • May 2014
  • April 2014
  • March 2014

Blogs I Follow

  • Passive Income Kickstart
  • OnlyFinance.net
  • TLC Cholesterol
  • Nintil
  • kendunning.net
  • DCWhispers.com
  • Hoong-Wai in the UK
  • Marginal REVOLUTION
  • Stlouis
  • Watts Up With That?
  • Aussie Nationalist Blog
  • American Elephants
  • The View from Alexandria
  • The Gymnasium
  • A Force for Good
  • Notes On Liberty
  • troymo
  • SUNDAY BLOG Stephanie Sievers
  • Miss Lou Acquiring Lore
  • Your Well Wisher Program
  • Objectivism In Depth
  • RobotEnomics
  • Orderstatistic
  • Paradigm Library
  • Scattered Showers and Quicksand

Blog at WordPress.com.

Passive Income Kickstart

OnlyFinance.net

TLC Cholesterol

Nintil

To estimate, compare, distinguish, discuss, and trace to its principal sources everything

kendunning.net

The Future is Ours to Create

DCWhispers.com

Hoong-Wai in the UK

A Commonwealth immigrant's perspective on the UK's public arena.

Marginal REVOLUTION

Small Steps Toward A Much Better World

Stlouis

Watts Up With That?

The world's most viewed site on global warming and climate change

Aussie Nationalist Blog

Commentary from a Paleoconservative and Nationalist perspective

American Elephants

Defending Life, Liberty and the Pursuit of Happiness

The View from Alexandria

In advanced civilizations the period loosely called Alexandrian is usually associated with flexible morals, perfunctory religion, populist standards and cosmopolitan tastes, feminism, exotic cults, and the rapid turnover of high and low fads---in short, a falling away (which is all that decadence means) from the strictness of traditional rules, embodied in character and inforced from within. -- Jacques Barzun

The Gymnasium

A place for reason, politics, economics, and faith steeped in the classical liberal tradition

A Force for Good

How economics, morality, and markets combine

Notes On Liberty

Spontaneous thoughts on a humble creed

troymo

SUNDAY BLOG Stephanie Sievers

Escaping the everyday life with photographs from my travels

Miss Lou Acquiring Lore

Gallery of Life...

Your Well Wisher Program

Attempt to solve commonly known problems…

Objectivism In Depth

Exploring Ayn Rand's revolutionary philosophy.

RobotEnomics

(A)n (I)ntelligent Future

Orderstatistic

Economics, chess and anything else on my mind.

Paradigm Library

OODA Looping

Scattered Showers and Quicksand

Musings on science, investing, finance, economics, politics, and probably fly fishing.

  • Subscribe Subscribed
    • Sacred Cow Chips
    • Join 128 other subscribers
    • Already have a WordPress.com account? Log in now.
    • Sacred Cow Chips
    • Subscribe Subscribed
    • Sign up
    • Log in
    • Report this content
    • View site in Reader
    • Manage subscriptions
    • Collapse this bar
 

Loading Comments...