Patri Friedman — son of David and grandson of Milton — wants libertarians to move beyond folk activism, to stop proposing plans to our tribe:
Unfortunately, the problem is not that our legislators lack for good ideas, but that democracy is a flawed method for choosing among them, because politicians respond to incentives too. So while we could argue for weeks about the most effective way to stimulate the economy, effectiveness is not the primary criterion by which lawmakers evaluate policies.Libertarians pour much of our resources into dissecting policy and proposing alternatives. But agitating for a specific policy is like complaining about a price — and forgetting that it’s set by supply and demand. While policy analysis is certainly an interesting field, as a method for improving political performance it is about as useful as price-fixing is for improving economic performance. And while not without benefit, policy debates feel far more important than they actually are. Our cognitive bias is to assume that we have a voice equivalent to an individual in a Dunbarian hunter-gatherer tribe, and so we comment on nationwide events with a passion to match — even when no one is listening. (Now you understand blogs and bar conversations!) These debates function as a mirage which distracts us from the more fundamental structural reforms that would actually achieve liberty in our lifetimes.
His father is less pessimistic on winning the war of ideas:
I see democracy as equipped, like a microscope, with a coarse control and a fine control. The fine control is special interest lobbying, the coarse control is majority voting. It is coarse because of rational ignorance. Voters know their vote has a negligible effect on outcomes and so have no incentive to acquire the information they would need in order to do a good job of making sure that governments do good things instead of bad things. The result is that how they vote and the outcome of their voting are largely driven by free information — what everyone knows, whether or not it is true.Consider a few examples. At the moment, “everyone knows” that recent financial troubles threaten economic catastrophe on the scale of the Great Depression. It probably isn’t true — my guess is that the current cure is considerably more likely to create economic catastrophe than the disease it is supposed to be curing — but, true or false, a lot of people believe it. The result is that it has been politically possible for Obama and the Democratic majority in Congress, with some help from the Republican minority, to engage in a program of vastly expanded government spending financed mostly by an enormous increase in the national debt — a program that would not have been politically viable five or ten years ago.
Or consider the longstanding issue of free trade vs protectionism. All economists know that tariffs, as a general rule with perhaps some exceptions, injure the country that imposes them as well as its trading partners. Everyone who isn’t an economist “knows” that tariffs help the country that imposes them by protecting its industries from the threat of foreign competition and are bad only because other countries are likely to retaliate with tariffs of their own.
Part of the reason people believe that may be the same hard-wired hunter/gatherer mindset that Patri discusses in a different context, this time taking the form of a view of almost all issues as us against them. But another and perhaps more important part is that the wrong analysis of foreign trade is easy to understand, the right analysis is hard to understand, which is why the right analysis was not discovered until the early 19th century when David Ricardo worked out the theory of comparative advantage. One result of the mistaken popular understanding is to lower the political cost of passing tariffs and so to lower the cost to industries of buying such legislation.
Since political outcomes are in part driven by the free information that affects the political cost of alternative policies, one way of influencing outcomes is by influencing that free information. Patri’s grandfather provides a striking example. His writing, speaking, and television programs had a substantial effect on what very large numbers of people believed, and so affected political outcomes. Other examples, working in the opposite direction, would be George Bernard Shaw and John Kenneth Galbraith. A still more important example, two centuries earlier, is Adam Smith.
In that realm, David Friedman is still proud of his growing Hondas analogy:
There are two ways we can produce automobiles. We can build them in Detroit or we can grow them in Iowa. Everyone knows how we build automobiles. To grow automobiles, we begin by growing the raw material from which they are made — wheat. We put the wheat on ships and send the ships out into the Pacific. They come back with Hondas on them.From our standpoint, “growing Hondas” is just as much a form of production — using American farm workers instead of American auto workers — as building them. What happens on the other side of the Pacific is irrelevant; the effect would be just the same for us if there really were a gigantic machine sitting somewhere between Hawaii and Japan turning wheat into automobiles.
He concludes, Tariffs are indeed a way of protecting American workers — from other American workers.