Saturday, May 21, 2011

Learning from Evidence: Not

This morning I listened to a commencement address by a former judge. It struck me as an interesting example of the failure to modify beliefs on the basis of evidence.

The speaker began by saying that every American had a legal right to health care, education, financial aid. He took for granted, and obviously approved of, one of the major changes in America over the course of the past century, the shift from a system where almost all goods and services were provided by voluntary transactions on the marketplace to one where many are provided by government, paid for by taxes, allocated by government bureaucracy.

Much of his talk dealt with his own experience with the latter system, the result of his and his wife taking responsibility for, eventually adopting, a young relative with severe autism and related developmental disabilities. Under existing law, she was entitled to a wide range of medical and educational services. When he tried to obtain those services for her, however, he found himself involved in a tangled web of bureaucracy, detailed and inconsistent rules, phone conversations with a computer on the other end. He suspected that insofar as he finally succeeded in working his way through that tangle to a successful outcome, it was at least in part because a federal judge was better able to get attention and favorable treatment from government bureaucrats than most other people would have been. He concluded that the young law graduates to whom he was speaking should devote their lives, at least in part, to seeing that poor Americans got from the government the things to which they were legally entitled.

It apparently did not occur to him that the contrast between his experience in getting services provided by government and his experience buying groceries on the private market, where you simply pay your money and walk out with what you have bought, might say something about the relative workability of the two systems for providing goods and services. Nor that if a system introduced in large part on the theory that it would even out differences between rich and poor turned out to serve higher status people much better than lower status people, perhaps the theory was wrong, perhaps government production and distribution was creating, rather than eliminating, inequality. When a judge goes to the grocery store, he gets the same groceries at the same price as anyone else. 

His conclusion was that these were real problems with the existing system, and the solution was to make that system work better. Institutions which, on the evidence of his own first-hand experience, were still functioning badly seventy or eighty years after they were first designed and built, were to be reformed by the wave of a magic wand with the aid of lots of well intentioned young lawyers inspired by a commencement address.

The experience reminded me of a passage by George Orwell that I recently read. Orwell spent his final months in a private hospital, attempting to recover from the tuberculosis that ultimately killed him. Commenting on the difference between that and the (presumably government supported, although he does not say) hospital he had been in earlier, he wrote:

"The routine here ... is quite different from that at Hairmyres Hospital. Although everyone at Hairmyres was most kind & considerate to me—quite astonishingly so, indeed—one cannot help feeling at every moment the difference in the texture of life when one is paying one's own keep."

Orwell was a convinced socialist. One cannot tell from the comment whether it occurred to him that he was observing one of the advantages of the free market. 

That observation would not, of course, have been a sufficient reason for him to have changed his views; he could reasonably enough have pointed out that a few years earlier, before the success of Animal Farm, he could not have afforded the private hospital, and the public one was considerably better than nothing. But one would like to know whether he thought about the question, whether, if he had lived a few years longer and considered the implications of a variety of observed contradictions between his socialist beliefs and his experiences, his beliefs might have changed. 

Unfortunately, he didn't.

31 Comments:

At 2:55 PM, May 21, 2011, Blogger Jonathan said...

Well said.

 
At 3:22 PM, May 21, 2011, Blogger Jonathan said...

"When a judge goes to the grocery store, he gets the same groceries at the same price as anyone else."

Small note: This assumes that he goes to the same grocery store as anyone else. If he's a rich judge, he may choose a high-class grocery store with prices that deter ordinary people. The free market is more egalitarian than many people may realize, but it's not perfectly so.

 
At 5:03 PM, May 21, 2011, Anonymous Contemplationist said...

Orwell was a committed socialist but he was not irrational. If all socialists were like him, I might even become so from their example!

http://thomasgwyndunbar.wordpress.com/2008/10/09/george-orwell-review/

Check out the above Orwell's review of Hayek's Road to Serfdom. Compare this with any vapid and vacuous contemporary leftist review of Hayek.

 
At 9:00 PM, May 21, 2011, Anonymous Anonymous said...

> contrast between his experience in getting services provided by government and his experience buying groceries on the private market

Anarchy is like communism - nice in theory, murder in practice.

 
At 9:41 PM, May 21, 2011, Anonymous Anonymous said...

There is evidence the poor in the US are worse off, relatively and absolutely, than in, say, France or Sweden.

 
At 6:12 AM, May 22, 2011, Anonymous martin said...

There is evidence the poor in the US are worse off, relatively and absolutely, than in, say, France or Sweden.

On the contrary:

http://mises.org/daily/955

 
At 7:27 AM, May 22, 2011, Blogger TheVidra said...

how is communism nice in theory, again?

 
At 9:25 AM, May 22, 2011, Anonymous Kid said...

^ Yeah exactly. If something is nice in your theory but doesn't work in practice, you discard your theory and find one that does fit reality.

 
At 9:31 AM, May 22, 2011, Blogger David Friedman said...

To Contemplationist:

The Orwell review of Hayek and Zilliacus was, along with a Heinlein story, the inspiration for a course I once taught at the University of Chicago. It's natural to assume that if there are only two solutions to a problem and you have shown that one of them doesn't work, you should choose the other. What's impressive about both the Orwell piece and the Heinlein story ("Solution Unsatisfactory") is taking seriously the possibility that there may be no solution.

The course covered a variety of issues where I was willing to argue, at least for purposes of the course, that neither of the alternative solutions worked.

 
At 10:19 AM, May 22, 2011, Anonymous Mike said...

Hairmyres Hospital is in Scotland, and George Orwell was there when he was writing 1984. He was actually the first patient to receive streptomycin in Scotland. Today, the hospital is a private finance institute, which uses private capital to fund public infrastructure. And yes the hospital was established by government, the Lanarkshire County Council, and it was under NHS in 1947 after Orwell had left. just thought this was interesting.

http://en.wikipedia.org/wiki/Hairmyres_Hospital

 
At 10:23 AM, May 22, 2011, Anonymous PPS said...

When the bureaucracy doesn't work the bureaucrat replies with more rules.

When the law doesn't work the lawyers reply we need more laws.

In the meanwhile the people affected by all of htose rules and laws grow more confused and less satisified.

 
At 11:56 AM, May 22, 2011, Anonymous BLBeamer said...

I read the linked review by Orwell. This paragraph jumped out:

"Professor Hayek is also probably right in saying that in this country the intellectuals are more totalitarian-minded than the common people. But he does not see, or will not admit, that a return to ‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led, and since the vast majority of people would far rather have State regimentation than slumps and unemployment, the drift towards collectivism is bound to continue if popular opinion has any say in the matter."

Orwell displays no better understanding of free enterprise (capitalism always leads to monopoly) - or socialism (no slumps or unemployment under socialism) - than any current pundit or sociology professor. Sad.

 
At 5:15 PM, May 22, 2011, Blogger 49erDweet said...

Great post. Logical and informative. Something must be wrong. I'll have to read a few of the daily print media again to spot the fallacies in your viewpoint.

 
At 5:43 PM, May 22, 2011, Blogger John David Galt said...

Two dissimilar comments here.

(1) The paragraph BLBeamer quotes from Orwell reflects a very commonly believed fallacy, and that is the assumption that a market that works the way Chambers of Commerce and similar business groups seem to want it (that is, a market place with lots of government intervention on business' behalf) is the same thing as a free market. The two are not the same thing, but I don't see libertarian economics making any headway against this fallacy unless we do a better job of distancing ourselves from the "pro-business" viewpoint -- especially when business-targeted media such as Forbes and the Wall Street Journal are constantly spreading the "pro-business" gospel while wrapping themselves in the flag of supporters of the free market.

(2) This line struck a chord:

It apparently did not occur to him that the contrast between his experience in getting services provided by government and his experience buying groceries on the private market, where you simply pay your money and walk out with what you have bought, might say something about the relative workability of the two systems for providing goods and services.

Some parts of the free market do work that way, but some just don't. It has always annoyed me, for example, that when looking for the most essential things most of us really need from the marketplace -- a job, or rental housing, or a loan -- the person who needs these things cannot simply choose them, pay for them, and walk out with them. Instead he must invariably sign a pretty outrageous contract, then wait to see if the vendor who provides these services will choose him or not -- because the vendor of these things always has the attitude that he, not you, is the customer.

Even the most total believer in the free market, if he has experienced unfair rejection at the hands of some of these vendors of necessities, must naturally become at least partly sympathetic to the view that we need to have employees' rights laws, tenants' rights laws, and the like just to keep bigots from forcing members of unpopular groups into homelessness. It's certainly theoretically possible for such discrimination laws to be rendered unnecessary by popular campaigns insisting on tolerance -- backed by naming and shaming and possibly boycotts -- but I've never heard of a case where this was actually tried, much less worked. If you know of any, I'd love to hear about it.

 
At 7:14 PM, May 22, 2011, Blogger Brandon Berg said...

JDG:
It's certainly theoretically possible for such discrimination laws to be rendered unnecessary by popular campaigns insisting on tolerance -- backed by naming and shaming and possibly boycotts -- but I've never heard of a case where this was actually tried, much less worked.

Homosexuals, to give a recent example. But really, this is the norm, not the exception. Private firms are always ahead of the democratic majority when it comes to tolerance, for the simple reason that you can't get a democratic majority to favor tolerance unless at least half the population is already tolerant.

And if half the population is tolerant, chances are that well over half of businesses are, because business owners tend to be more intelligent and/or better educated than the general population, and also because discrimination is expensive.

...just to keep bigots from forcing members of unpopular groups into homelessness.

When has that ever happened? This is really only possible if the overwhelming majority of the population is bigoted. And if that's the case, how are you going to get anti-discrimination laws passed?

 
At 5:52 AM, May 23, 2011, Anonymous Miko said...

JDG: Even the most total believer in the free market, if he has experienced unfair rejection at the hands of some of these vendors of necessities, must naturally become at least partly sympathetic to the view that we need to have employees' rights laws, tenants' rights laws, and the like just to keep bigots from forcing members of unpopular groups into homelessness.

You might cf. chapter 1 of David's Law's Order, particularly the bit on habitability laws. A change in one area is likely to be counterbalanced by a corresponding change elsewhere, so general legal rules tend not to work well towards this end. As a leftist, my solution is to challenge the "necessity" assumption instead: the more alternative institutions we have (food and energy co-ops, workers co-ops, mutual banks, shanty towns on homesteaded land, etc.), the less power the necessity monopolist has. Since the main obstacle to doing this is laws making these things illegal and/or artificially expensive to organize, the proper solution is to strive to create a freer market, not to blame the amount of freedom in the existing market.

 
At 1:13 AM, May 24, 2011, Anonymous Anonymous said...

Don't you think that the problem of favourable treatment by the government is also acute in countries without a welfare state? I have visited Dubai recently, and its economic policies have much in common with those of the USA before WWII. Corruption is endemic there. The only way that a man not born a citizen can acquire UAE citizenship is through bribery.

I know that you advocate a society with no government whatsoever, but we are centuries away from such a thing.

 
At 6:40 AM, May 24, 2011, OpenID ThomasD said...

...he may choose a high-class grocery store with prices that deter ordinary people.

Perhaps, but he, like anyone else who chooses to enter a 'high-class' grocery store still gets the store's wares at the same price as everyone else.

Freedom means the ability to make unfettered choices. It is axiomatic that true choices create consequences, else there was no choice in the matter. Therefore freedom must include consequences.

Any attempts to lessen consequence or restrict free choices is an imposition upon freedom. Subsidy is merely a means of lessening or denying consequences. The net result is nothing more than an insidious means of perpetuating inequality.

Egalitarianism, imperfect or otherwise, is not compatible with freedom, nor true equality.

 
At 4:15 PM, May 24, 2011, Anonymous Andrew said...

How about posting the judge's name so perhaps he can respond to your complete trashing of him?

 
At 4:19 PM, May 24, 2011, Anonymous Andrew said...

The speaker was Carlos Moreno, Retired California Supreme Court Justice, 2011 Commencement Speaker for Santa Clara University School of Law.

He was nominated twice for his position by Republican governors and twice by Democrats.

 
At 11:51 PM, May 24, 2011, Blogger Jonathan said...

ThomasD: "Egalitarianism, imperfect or otherwise, is not compatible with freedom..."

Oh, I agree with you, and with the original post. I just felt that the sentence I quoted was giving a slightly oversimplified picture of how people shop.

 
At 6:17 AM, May 25, 2011, Anonymous Anonymous said...

Orwell: "...‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them."

From the linked review. This is a good example of how a smart person accepted without thinking the "zero sum game" fallacy, and how words used carelessly ("competition") can mislead. I'll use this in teaching. --Eric Rasmusen

 
At 9:16 AM, May 25, 2011, Anonymous Roger said...

Free market helps temper and balance competing interests and biases. Builders prefer to build more houses whether the market already has too many houses or not. Lawyers prefer to lawyer (including expand government) when another solution might be more efficient. Maybe it helps to understand the benefits of the free market if we understand better the destabilizing forces that is manages so well, if allowed.

 
At 2:41 PM, May 25, 2011, Blogger John David Galt said...

"...just to keep bigots from forcing members of unpopular groups into homelessness."

Brandon Berg said:
When has that ever happened?

Here.

 
At 8:44 PM, May 25, 2011, Blogger Brandon Berg said...

JDG:
"Located mostly outside the traditional South, these towns employed legal formalities, race riots, policemen, bricks, fires and guns to produce homogeneously Caucasian communities...."

Your claim was that laws against private discrimination were necessary to prevent this. And as evidence you cite the use of violence, both public and private. Brilliant.

 
At 9:20 PM, May 25, 2011, Blogger Nathan said...

Re: Bigots forcing unpopular groups into homelessness

One need look no further than the present to see that the exact opposite is the case. Landlords are willing to rent to anyone; states and municipalities are passing laws forcibly preventing them from renting to people deemed undesirable because of an accident of birth, namely, where they were born. (The same, of course, goes for employment.)

 
At 11:47 AM, May 26, 2011, Anonymous dr said...

I heard the speech and thought the same thing -- this liberal judge will never understand the irony of what he just said. He also didn't get the irony of the fact that, in large part, lawyer-politicians created the mess he was describing, and his solution seemed to be that we need more lawyers to help people get through the mess other lawyers created (not that I am anti-lawyer).

 
At 12:47 PM, May 26, 2011, Anonymous Anonymous said...

"buying groceries on the private market, where you simply pay your money and walk out with what you have bought"

See "Food Stamps"

 
At 7:34 AM, May 27, 2011, Anonymous Simon said...

Welfare state institutions favoring the articulate, the well-connected, and the tenacious... and ignoring or punishing the timid and the uneducated. A very familiar pattern to those of us who have lived in Sweden and in France.

 
At 10:13 PM, May 28, 2011, Anonymous Rex Little said...

the vendor of these things [jobs, rental housing, loans] always has the attitude that he, not you, is the customer.

In the case of a job, he is the customer. You're supplying labor, he's purchasing it.

 
At 4:28 PM, November 05, 2011, Anonymous robert said...

Perfectly simple, divide the chits equally among all of the people and everyone buy what they want, so simple that it would actually work. No rich no poor just people buying what they need. I like it.

 

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