2/04/2020

The Pretense of Intuition

"Joe's excellent critique of "state capacity libertarianism" picks up on something I also noticed when reading Tyler Cowen's piece. As Joe puts it, Cowen's ideal state is "a nonmarginal actor whose task is to achieve certain collective outcomes intuited by Cowen or some other political philosopher." Cowen provides a laundry list of societal challenges he claims only a highly capable state can solve—traffic congestion, secondary education, climate change, etc.—without discussing any in detail. Of course, each issue has been analyzed many times in the libertarian literature, using the standard concepts, theories, and frameworks such as marginal analysis, demonstrated preference, opportunity costs, Austrian price theory, comparative institutional analysis, and so on, and no evidence for "market failure" has surfaced. But Cowen's intuition tells him markets aren't good enough in one area or another. 

This is actually Cowen's long-held view. You may remember his 2014 article "The Lack of Major Wars May Be Hurting Economic Growth," which echoed the Mariana Mazzucato position that government spending is the main source of technological progress. I remember a friendly argument with Cowen some twenty years ago about NASA, which he insisted was an example of benevolent government intervention. I brought up the standard counterarguments—theoretical (how do you measure benefits and costs, including opportunity costs?), empirical (lots of case study evidence suggesting widespread waste, fraud, and long-term negative effects on the direction of science and technology), and deontological (is it okay to coerce people to support transfer payments that they see as against their self interest?). He wasn't buying it. Space exploration is just so cool that the usual arguments don't apply."