The Eagle and the Insect

RevenueThe expansion of the state and the services it provides, well or badly as the case may be, inevitably changes the relations between citizen and state. Among other effects, it corrodes the idea of privacy and even the very possibility of privacy: for the more the state does for citizens, the wider its locus standi to interfere in their lives. It becomes, in the wonderful phrase of the Marquis de Custine about Nicholas I in his great book, Russia in 1839, eagle and insect: eagle because it soars above society, taking its capacity for an overview as an entitlement to direct everything, and insect because it bores into the smallest crevices of what lies below, though perhaps nowadays vulture and termite might be a better zoological metaphor.

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Are We Free To Reform Ourselves?

From afar, the defeat of the Republicans in Congress on the matter of the debt ceiling seemed fore-ordained and the inevitable consequence of political ineptitude on an almost heroic scale. Perhaps (and this is the best that might be said) they were staking their future claim to be able to say ‘I told you so’ when the financial catastrophe wrought by the western world’s addiction to spending money it has neither saved nor earns nor strikes not in the comparatively muted fashion that we have experienced hitherto, but in its full and terrible force.

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Rediscovering the Missing Element of the ‘Dismal Science’

Redeeming Economics
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This next Liberty Law Talk is with John Mueller, author of Redeeming Economics. Modern economic thought focuses on production, exchange, and consumption. Much of Mueller’s focus, however, is on final distribution, or the notion that a great deal of our economic activity is really about providing benefits or gifts to those we love. Mueller returns to Aristotle to articulate why this missing element is so important for understanding economics. In his Politics, Aristotle described the economy by using a household model oikos, the root of our word economics, where agents distribute goods to increase the flourishing of family members and friends. Augustine of Hippo, Thomas Aquinas, and the Scholastic school, as noted by Joseph Schumpeter in his History of Economic Analysis, refined and developed this notion of final distribution as a prime component of economic analysis. Our conversation turns to this missing element and seeks to understand what it adds to economic thought and what has been lost by its omission.

Silent Cal’s 6 Simple Rules for a Confused President Obama

In his new book, Why Coolidge Matters: Leadership Lessons from America’s Most Underrated President, Charles C. Johnson claims that ‘Silent Cal’ wasn’t so much silent as he was silenced. But today, thirty years since Tom Silver’s underrated book about America’s underrated thirtieth president, Coolidge and the Historians, that is changing. In addition to Johnson’s book, we also have Amity Shlaes’s new biography, Coolidge, a prequel of sorts to her bestseller, The Forgotten Man: A New History of the Great Depression. Undoubtedly, there is growing interest in Coolidge that, although somewhat delayed, is especially timely for the present. Here are six lessons for President Obama from the not-so-silent Cal Coolidge.

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Becoming Europe

Becoming Europe
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This Liberty Law Talk is a discussion with Samuel Gregg about his most recent book, Becoming Europe: Economic Decline, Culture, and How America Can Avoid a European Future. Recent events in Cyprus, to say nothing of the economic stasis that envelopes much of Europe, highlight America’s need to think deeply about the current trajectory of our fiscal and entitlements policies, among other weighty matters. Gregg’s book, however, is not merely a rehashing of dire spending problems and bankrupting entitlements and the predictably poorer future this promises, but is a discussion of the social and cultural commitments that are required to make economic freedom a reality in America. The erosion of these norms within Europe has made it much easier for the array of dirigiste economic policies pursued by so many nations on that continent. The good news, Gregg informs, is that we aren’t quite Europe. To avoid its fate America must reexamine the foundations of its own economic success and renew its commitment to them.

Additional Law & Liberty links: Theodore Dalrymple’s review of Becoming Europe.

End the State Tax Deduction

My colleague Alex Brill has come up with a revenue-neutral plan to make the tax code more progressive and pro-growth. Among his six proposals: phase out the federal deduction for state and local taxes.

That’s the right thing to do for any number of reasons. As Brill points out, the deduction acts as a subsidy to state and local governments, thus leading them to over-provide public services. The subsidy effect is largest in high-tax states with lots of high-income earners (who are most likely to itemize their deductions), such as New York and California. Phase out the deduction: the tax code would become more progressive.

I’d add this: the federal system would become more competitive. We’re being told to no end that states should serve as “laboratories of democracy.” I confess to my ambivalence about that notion. With Madison, I’m skeptical of “that inconstancy and mutability in the laws, which form the greatest blemish in the character and genius of our [state] governments.” (Federalist 62.) Be that as it may, though, no case can be made for subsidizing state experimentation from federal revenues.