Recently I linked a Wolfers-Stevenson tax commentary about behavioral biases and tax expenditures as well as some follow-up by Will Wilkinson (from before and from this morning). The post that I linked this morning had an especially inspiring paragraph:
Now, we’re still stuck with crazy endogeneity problems. Whether public spending or private investment will do better in a particular case may be a function of shared beliefs, trust, public-spiritedness, etc. If we treat mental models, belief systems, cultural values, ideologies, etc. as fixed points, we may be able to determine whether public or private investment is more “expensive.” But if we don’t, and acknowledge that belief systems and policy systems are reciprocally influencing, it may be impossible to identify in any clear way the ideal baseline, in which case there may be no identifiable fact of the matter about whether public spending on this or that costs money or makes money. We’re going to have to guess a lot of the time, and hope.
This quote, to me, really highlights the symphonic messiness of republics; the democratic underpinnings typically pull the society to a libertarian stance, while conversely the social contractarian trajectory (regarding equality, justice, etc.) tend to push things away from a libertarian culture position. This push and pull somehow works out into a hindsight appearance of a moderate/cooperative society. Simply put, a messy process creates masterful results.
So in a system that fosters libertarians that see property as unilaterally defined by possession on one extreme, social contractarians that would prefer to pool resources and reallocate them in a neo-Marxist process based on optimized utility, and literally everything between the two (in fact most of society is concentrated in this latter amalgamation of groups).
As an adendum to Will Wilkinson’s above commentary on the challenge of endogeneity within this question, I would add a consideration for a posivite observer effect whereby acknowledge and further relating the fact of moderation within a republic could lead to a moderation of principles rather than a retreat to extremes. In tax policy this could manifest itself as a move towards the gray area between all taxation as stolen property and all tax expenditures and subsidies as unfair payments. This is not a move solely towards the utility maximizing level of the social contractarians, but it is a move away from a possession only approach to property. Reality in a republic seems to dictate this cooperation.
Jake
Tyler
Thanks for the thought fodder. Wilkinson thinks the endogenous factors are fuzzy, but I think Hayek’s Serfdom captures human nature well: when people feel a sense of personal ownership over a resource, they will be more prudential and thrifty with it.
The twentieth century has demonstrated what happens when social contractarians take things too far: staggering misallocations of resources. Moderation may be a practical necessity, but the history of modern economies shows the indispensibility of property ownership.
Just to be clear I in no way was writing against private property rights but rather I critiqued in part a might makes right assumption that ownership is defined by possession.
By might makes right, are you referring to the force that backs libertarians’s rule of law or else enables social contractarians’ revolutions? Is there any system extant or upcoming which in some way wouldn’t rest on some incarnation of “might?”