Friday, November 10, 2006

Let the Games Begin

For everyone that suspected, it's official: Iowa Governor Tom Vilsack announced yesterday he's running for president in 2008. Not more than a week after mid-term elections, it's no surprise that Vilsack is first to offically start his campaign. Compared to his other (potential?) competitors (Clinton, Edwards, Kerry, Gore), he is by far the least known. No mystery why he's starting now.

As an Iowa native, I can tell you little is remarkable about the governor. Like all politicians, he enjoys enlarging the government and padding his position. A quick sampling of his governing:

-To try to encourage businesses to move to Iowa, the government used a half-billion dollar grant fund (the Values Fund), though Vilsack expressly vetoed cutting business taxes or reducing regulation.

-He backed Iowa's anti-meth laws (read more here), which made it much more difficult to purchase certain drugs.

-He vetoed an Iowa House bill that would drastically restrict the use of eminent domain, claiming the requirement of "just compensation" (paying the market value) was good enough.

I find that last item particularly upseting. If "just compenstation" was really just, you wouldn't need eminent domain.


jeremy h. said...

On Halloween I went to Target to purchase some goodies for the kids. There were already taking down the Halloween displays and putting up the Christmas ones. I think this is a similar phenomenom.

SmoothB said...

It's not that early, really -- the primaries start in a trifle over a year. Given the schmucks the two parties have put up for election recently, I think a year and a half to figure out who should be the most powerful person on earth is quite clearly not enough time.

By the by, I certainly don't want to defend the travesty that eminent domain has become, but I don't think it's so clear that we should actually get rid of it. The point is to reduce transaction costs -- there's no reason to believe that the Coase theorem would take care of the problem.

David said...

(1) The point of eminent domain is not to simply reduce transaction costs. In theory, it is to make sure the government can get a bit of land for the public's use. I'll even defend the law for last-resort, end-of-the-world sort of security/defense measures. (Like to put a base on a key piece of land if an obvious conquerer was trying to attack North America.)

(2) Now you can say all these things are reducing transaction costs. Maybe they are, but then why not do eminent domain for other things? Instead of going to the store, I should just get the police to take it for me and leave whatever money they think is fair. That way I wouldn't have to waste time standing in line. Just because there's a market price doesn't mean everyone is willing to buy or sell at that price (indeed, it wouldn't be much of an economy if that was true). In fact, if you have to use eminent domain to pull off an exchange, it is by definition unfair.

SmoothB said...

If the point is to take whatever the government wants, whenever it wants, why do you suppose they haven't always used it for everything and never ever paid squat? But I don't know if we get anywhere this way. The idea behind eminent domain is that social benefit probably exceeds private benefit, but that since the property is owned by many people, the transaction costs are very high, while the fact that everyone knows that a road will be built means that there's an incentive for everyone to hold out for the entire surplus. Combined, both of these facts mean the road will never be built.

But hey, that's just a thought. We could always just say that it's just plain evil, by definition.

David said...

Well of course it is evil by definition; I'd figure that would go without saying.

The theory behind ED is the transaction cost point. The practice behind ED is pure politics. (Just as the theory behind the state is looking out for the whole of society while the practice is the vote/budget maximizing politician/bureaucrat.)

So why doesn't it happen all the time? Well, there are political costs, so it's not constant but because voters are rationally ignorant and/or irrational, it happens more than it should. The bright side of the Kelo case is because the violations are so blantant, politicians have a strong incentive to restrict its use (Vilsack clearly has different priorities: no doubt more concerned with attracting businesses to Iowa even at the expensive of the right to property.) One must wonder if the public outcry would have been as great if it was a union that took Kelo's house instead of a "faceless corporation."

SmoothB said...

Vilsack didn't personally take ownership of someone's property, right? So how does it make sense to say that eminent domain is used in a bad way only when voters are being irrational or not paying attention? No, if eminent domain is at all times simply a way of expropriating things of value, then it should be precisely when voters are rational in the economic sense that we see what you're saying is the default saying. Then the majority gets everything all the time. And why would there be any public outcry by this "theory"? The majority is getting the rents, so why would they care? C'mon, man.

And in point of fact, eminent domain is a very old practice that does not simply consist of expropriation. Unless you're going back to your definition of eminent domain as expropriation, in which case I'm really not clear on why you'd acknowledge the transaction cost point. But that's the only point I'm trying to get you to concede -- that there is some reasonable sense to eminent domain, that it can be used in some appropriate sense, and that it has been used in that way in the past. Otherwise, we're stuck in the old game of decrying everything and accomplishing nothing.

David said...

If you recall an earlier comment, I noted ED can be used for good. I never said it was always a thing to be avoided (only that it can be a necessary evil).

Vilsack is approving the use of the state to give property from one private citizen to another. The reason for this is politics: if he can increase jobs, he can improve his political perception. Voters are rationally ignorant. He tells them there's an increase in Iowan jobs, which is true. But the reason for that job increase was because he awarded firms land at a cheap price, land "bought" from others under ED. Thanks to the high costs of knowing and understanding that, voters don't know about it.

True to the logic, voters tend to defend ED when it comes to providing obvious public goods: parks, schools, roads, etc. It takes the private-to-private transfer (as well as media attention) for voters to freak out. It probably is rooted in the public's disdain for corporations ("evil corporations will take my stuff"). Once again, we see that the players matter. The government takes stuff and its "used for the people" so it's tolerated or encouraged. A company does the same thing and it's evil.

But because voters are rationally ignorant (or rationally irrational, which is probably more appropriate here), they don't know that both of these are problems. They are morally opposed of a firm robbing them, but not a government, even if it is true that the firm will yield more taxes for public goods (as Vilsack claims; the more jobs thing).

SmoothB said...

I still don't see how you're producing a model of rational ignorance or of rational irrationality. In your story, no voter acts irrationally. Even when eminent domain is abused, the vast, vast majority of voters suffer no cost and gain a slight benefit. A perfectly informed, infinitely rational voter with unconstrained calculating abilities would make precisely the choice you are saying is irrational or rationally ignorant. It seems to me that what you really mean is that they aren't voting on the correct values.

Of course the players matter. If you were to take money from me, that would be stealing. If you were to raise an army, again, evil. I never understand this logic of "if I did X, it would be wrong, ergo, when the government does something similar to X, the government is wrong." In no way does that follow. It really, really doesn't follow when you factor in motivations. Keep in mind, I'm not calling for a nanny-state here, just solid reasoning.

I agree that eminent domain (I'm avoiding the abbreviation so as to avoid my predilection for bad jokes) has been used badly recently. But I still maintain that, used properly -- i.e. as it historically has been used -- it's not evil. Not really. It served a good function, wasn't intrinsically related to bad motivations, and increased social net value. I realize I'm being nitpicky here, but it just seems to me that if we made less expansive claims, we could achieve more good. You once had a post where you asked how libertarianism could accomplish more. Well, here's my suggestion. Let's stop letting the perfect be an enemy of the good.

David said...

Claiming ED was often used for good is an emperical (and philosophical) matter. I'm not sure if your claim is true.

I also don't think I'm falling for the "perfect as enemy of the good" problem as I mentioned ED can be used to increase social totals. But my requirement for that is a high standing (like urgent national defense).

I can also find something that increases social totals to still be immoral. The examples are few and far between but let me illustrate with a scenario: suppose to save the human race, one person must die. Is it moral to execute the person against their will? Possibly, but I say it isn't. Similarly, the government can do something morally wrong but still increase social totals.

ED is theft. It has a nice-sounding name and can be used for the common good, but it is still theft. Some people believe governments are immuned to such immorality; I do not. If doing something is wrong, and someone does it (like a government agent) then that action is wrong. It is completely logically valid:
-All acts of theft are immoral.
-ED is an act of theft.
-Thus ED is immoral.

(Again, sometimes we need to do bad things to increase social totals, like violate property rights. When this should be allowed is a completely different discussion.)

So how are voters rationally ignorant? Rationally ignorant simply means that it is totally appropriate that people don't know about everything. If someone is perfectly informed, then they cannot be ignorant, by definition. But because they don't know about all cases of ED abuse (they are ignorant), ED is allowed to happen more than it should.

So how are voters rationally irrational? Many people are emotionally committed to the idea that government is out there for them, even when it isn't. Even if they discover an abuse they are more likely to believe they are better off (esp if they are told that it's not an abuse).

You're right in the sense that this is hard to untangle. Hell, even an abuse can make the voters better off. But it can also make them worse off even if they get more government services (as those crowd out private services). Let's suppose extra revenues thanks to an ED case leads to Canada-style universal health care. But since people are rationally irrational, they don't realize this is a bad idea and approve the use of ED. It's an extreme example but the idea's the same on the smaller scale.

SmoothB said...

Your syllogism would be logically valid if it was, in fact, a syllogism and if both major and minor premise involved only clearly defined terms and generally acknowledged statements. But it's a tautology -- you've started from your conclusion. The entire question is (a) whether eminent domain always and at all times consists of theft, or (b) why, if you expanded your definition of theft to encompass eminent domain, theft is always bad. But hey, maybe I'm completely out in left field when I suggest that maybe we're overreaching and saying things that aren't going to convince, well, anyone who isn't likely to show up at an IHS seminar. And maybe you're right -- maybe the best way to go about minimizing the abuse of government powers is to *start* by condemning everything but defense on moral grounds. But that is the important empirical question, now isn't it? How's that working out?

David said...

A valid arguement is when the conclusion follows from the premises in a logically correct manner. A sound argument is a valid arguement with true premises. To judge if the premises are true, clarity is paramount but not needed for validity (unless you're checking for unbounded middle or other fallacies). So are my premises true? I think so; you clearly disagree.

But you asked a more interesting question: how does this methos work? I think it works pretty well to remind people of the fundamentals, especially this point's logical cousin: all trade is mutually beneficial. (Thus increases aggregate utility and forms a solid foundation for noting that it is a strictly moral act.)

By noting ED is always (or often) immoral and backed by force and trade is always (or often if you include asymetrical information) moral and backed by voluntary action, others can witness a fundamental difference why ED tends to lead to a poorer society and trade to a richer one.

The moral grounds of respecting property and the impact on social totals is quite harmonious, as often the case in libertarian thought. Ultimately, I think it's useful to remind people the state is forged from force and the market is forged from voluntary exchange.