Markets get distorted

Bryan Caplan misses an obvious explanation when addressing this issue:

Libertarians love to preach the virtues of markets. Yet in the “marketplace of ideas,” their bundled product has been regularly and thoroughly rejected for over a century. Until libertarians acknowledge that market verdict and re-think either what they’re selling, how they’re selling it, or both, they will remain on the margins of American political life.

Caplan points to some explanations:

  1. There may be large negative externalities in the market for ideas. So the costs of irrationality in the market for ideas are imposed on others. Maybe. Yet he ignores positive externalities – so when a a few libertarians get it into their heads that, say, a mining tax is bad idea and blog and op-ed about how silly the idea is until almost everyone realises that it is silly and the tax gets dropped, the benefits to society are very large, yet society has not become “libertarian” and those libertarians remain on the margins of political life.
  2. Then he suggests that the market is ideas is about truth while consumers in that market are more likely to demand “comfort and entertainment”. Maybe. Yet it seems to me that truth could be a bundled product.

That is all well and good but it seems to me that the market for ideas – like all markets – can be, and is, distorted by government intervention. The most obvious mechanism to distort the market for ideas is public education. Thirteen years of free and compulsory statist brainwashing is very likely to distort the ideas that people are likely to find more or less attractive. Public broadcasting too. Government financed NGOs – whose primary function is to then lobby government – publicly funded “think” tanks, and increasingly the university system are all institutions that crowd out civil society more broadly and constrain the market for ideas. This is even before we get to legislation that makes certain ideas unlawful.

So my answer would be to say that libertarians may be on the fringes of society, yet can and do make massive contributions to public policy and do so despite the massive distortions generated by government intervention in the market for ideas.

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44 Responses to Markets get distorted

  1. Fisky says:

    3. Far too many public libertarian intellectuals like Caplan are autistic robots who instantly turn off any potential supporters.

  2. Fisky says:

    Libertarians love to preach the virtues of markets. Yet in the “marketplace of ideas,” their bundled product has been regularly and thoroughly rejected for over a century. Until libertarians acknowledge that market verdict and re-think either what they’re selling, how they’re selling it, or both, they will remain on the margins of American political life.

    Maybe supporting Merkel’s insane invitation to the world’s goat herders, as libertarians like Caplan did, was not such a hot idea for building public support.

  3. Kool Aid Kid says:

    Not a good example Sinc. Essentially your view rests on the assertion that our schools are statist brainwashing factories. Which says to me that you either have no kids or you don’t talk to them much?

  4. Sinclair Davidson says:

    Kool Aid Kid – my 4 children don’t attend state schools.

  5. Aussiepundit says:

    The most obvious mechanism to distort the market for ideas is public education. Thirteen years of free and compulsory statist brainwashing is very likely to distort the ideas that people are likely to find more or less attractive.

    How many Australian school-leavers understand that free-market capitalism is the reason that Western nations became wealthy?
    Pretty few.
    (and conversely, what proportion think it was entirely due to colonialism, oppression of the poor, etc?)
    Libertarian philosophy won’t ever get traction if the basic facts about civilisational success aren’t agreed on.

  6. Aussiepundit says:

    Essentially your view rests on the assertion that our schools are statist brainwashing factories. Which says to me that you either have no kids or you don’t talk to them much?

    No need – just read the news.

    In a lesson on same-sex attraction, students as young as 11 are told to imagine they are 16-year-olds who are “going out with someone they are really into’’. The class is divided into students pretending to be going out with someone of the same sex, and classmates pretending to like someone of the opposite sex.

  7. H B Bear says:

    Being popular has never borne any relationship to being correct.

  8. robk says:

    I’m a committee member of two rural private property rights groups. They are voluntarily positions. The committees struggle to be heard in the morass of green NGOs,( many of them receive at least some public funds e.g.EDO).
    The paradox I find in the farming community, and likely amongst small-government advocates generally, is that they are less likely to act en masse, tend to be self reliant and keep to themselves so they can focus on their output. This is virtuous but a big handicap when trying to combat a philosophy which has as it’s central edict “lots of free stuff”.

  9. Aussiepundit says:

    The paradox I find in the farming community, and likely amongst small-government advocates generally, is that they are less likely to act en masse, tend to be self reliant and keep to themselves so they can focus on their output.

    The left, and particularly the green-left, has a fantastic ground game in rural Australia.
    One of their very efficient tactics is to set up ‘local’ “grass roots” environmental campaigns that focus on a single issue or a single location.

  10. robk says:

    Sinc,
    I take your point that the education system is skewed to the left, generally. I’m not sure private schooling immunizes kids from the eco lunge.
    My boys are product of state schooling but have no leftist leaning, though they are now enjoying a city life. Parenting helps.
    Perhaps kids in country schools give a bit of push back to their teachers.

  11. robk says:

    AussieP,
    Yes, an immense thrust of resources and human bodies that are chipping away. Their media presence is much bigger than the representative views of those with “skin in the game”in my area at least.

  12. Infidel Tiger says:

    Having witnessed a great deal of the people who make up society, I’m comfortable being on the fringes.

  13. Alex Davidson says:

    I’ve always found Caplan to be a bit of a demagogue, with a misplaced sense of his own importance. The essence of libertarian thought isn’t markets, but self-ownership and respect for property rights, contract, and consent.

    Markets are merely an emergent phenomenon – a way to describe the voluntary exchange of scarce resources. That’s not really applicable to ideas, except in the artificial case of intellectual ‘property rights’, and it puts the cart before the horse to focus on markets rather than the underlying property rights and ownership issues.

    What Caplan is referring to is better described as marketing, and yes, the presentation of libertarian ideas could be improved. Too many confuse libertarian with libertine, for example…

  14. Nicholas (Excentrality!) Gray says:

    Markets cater to many tastes. Libertarianism is like the Rolls-Royce end of the market, whilst other cars cater to the broad market. If we wanted to be popular with all the masses, we’d be socialists.

  15. rich says:

    What Caplan is referring to is better described as marketing, and yes,

    Not sure it is possible to market libertarian vegetables over “free” socialist sweets

    tend to be self reliant and keep to themselves so they can focus on their output. This is virtuous but a big handicap when trying to combat a philosophy which has as it’s central edict “lots of free stuff”.

    The agrarian is the mentality that gave birth to the US constitution the 1) private property 2) leave me alone (freedom) 3) dont be a jerk (virtue). In an industrialised, urbanised society it’s hard to stay to those three principles, but in the Age of the Maker perhaps such values would come again. That is, if the Industrialists allow it to happen before they assemble a police and surveillance state.

  16. robk says:

    Nicholas,
    There’s plenty of times when the masses have had a gutful of socialism. Usually when the money runs out.

  17. Empire says:

    Most of my peers consider me to be hard right, yet none has successfully mounted a rational counter argument to my policy positions. Some have conceded over time that what I propose makes sense but they aren’t comfortable saying so in “polite company”.

    There is no question that indoctrination aka education has an impact. The state imposes a curriculum on all schools. The only independent schools are home schools. I was educated at both state and private schools. Apart from one rabble rousing commie union rep teacher I had one year at the state school, I don’t recall any significant difference, aside from the facilities and extra curricular opportunities. The primary difference was my old man had no hesitation im bollocking the bullshitters when he was paying direct rather than via the tax system. I was frequently in strife at school for challenging progressive orthodoxy.

    Libertarians won’t be moving from the fringes any time soon. The centre is currently way left. The challenge for mavericks is to learn to organise along Gramsci lines.

    The left has wrecked the joint. There really isn’t much left to save. So our job is to wreck the cesspool they created and time is against us.

  18. Stimpson J. Cat says:

    3. Far too many public libertarian intellectuals like Caplan are autistic robots who instantly turn off any potential supporters.

    Fisky did you get beaten up by an autistic kid at school or what?
    Find a new meme.
    This is a safe space.

  19. Stimpson J. Cat says:

    Essentially your view rests on the assertion that our schools are statist brainwashing factories.

    They are.
    Your role as a parent is to brainwash your children and turn them into the next economically literate charismatic popular libertarian political leaders this world needs, nay deserves, nay craves.
    The success rate over the past century is abysmal.
    I blame women.
    And tv.
    I’m trying but I’m bravely battling severe mental illness and can’t be relied upon for anything other than awkward humor.

  20. Tel says:

    Liberty in a classical sense (not perfectly free, but free within a fairly broad context) was popular for more than 100 years during most of the 18th century and early 19th. The shift started during the Napoleonic Wars (where government adopted conscription and mass warfare), but really swung towards government power after the two world wars in the 20th Century.

    In other words, there was never a “marketplace of ideas,” there was a battle of ideas… and the power of the state comes from mass warfare and industrial scale destruction. That’s what brought us to where we are now.

    Well there’s a tiny bit more to it… governments enjoying unlimited power during wartime simply could not stand to give it up during peace. They declared war on poverty, war on drugs, war on terror and basically just kept finding reasons to keep their war powers… one way or another. The only “idea” they came up with was maintaining a constant state of fear amongst the population.

  21. Empire says:

    The Fabians achieved in just one hunded and twenty years what the Bolsheviks couldn’t in fourteen. Voluntary adoption of socialism.

    I agree Tel, the two wobblies, especially number two, made their job much easier. They have boiled the frog to perfection.

  22. Kool Aid Kid says:

    Ok Sinc: then you have no personal experience of public education. can I tell you I have in my family three graduates of public schools. One is a very successful engineer now on his second major international project. The middle one is a double degree graduate from a sandstone Uni who is now in a management job with an Australian multinational. The third is doing her PhD in a research project at Tokyo University. None shows any hint of the malaise you seem so certain of.
    Can I suggest you temper your language?

  23. Entropy says:

    Obviously looked at what their old man did/thinks and did the opposite.

  24. Lem says:

    So my answer would be to say that libertarians may be on the fringes of society, yet can and do make massive contributions to public policy and do so despite the massive distortions generated by government intervention in the market for ideas.

    Since when was aiming for freedom a fringe society behaviour, Sinclair?

    Surely freedom is the default position. Why the apologia?

  25. rebel with cause says:

    This particular ‘marketplace of ideas’ is also grossly distorted by compulsory voting in Australia.

    The other thing Libertarianism has going against it is that, as pointed out by Thomas Sowell, it requires a capacity for second stage thinking. You’ve got to have a little bit of smarts to work out why ‘free stuff’ isn’t really free. Sadly with the dumbing down of society the number of people that can think that far ahead is dwindling.

  26. Lem says:

    I hate to agree with Kool aid kid, but seriously. Having put five children through very expensive private schools, I can tell you, the product at the end has more to do with the material (the child), and their abilities, than the teachers. Seriously, private schools spend all their time talking up how great they are (have to, with the fees they charge!) and trying to jam kids into “university” (whatever that is these days, just a giant cradle to the grave gravy train for basket weaving it seems) that leaves parents and children impoverished and disillusioned.

    I put it to the audience that both public and private education are a rort, practiced on the hopeful, and for the benefit of the education machine, no matter how they get the money.

    What is wrong with admitting there are some things you need a tertiary education for, according to your inherent abilities of the student,and the needs of the market, and some things where you would be better getting out into the workplace from day dot to learn and hone skills?

    Do we want to be a nation of unemployed pissed off lawyers?

  27. Sinclair Davidson says:

    Ok Sinc: then you have no personal experience of public education.

    Actually no. I myself went to primary school in the public system.

    I have in my family three graduates of public schools.

    You’re telling me about technical achievement – I’m talking about brain washing, not stupidity.

    Can I suggest you temper your language?

    You may be used to dealing with slaves being a product of the public education system and all – we are free men and women here who speak their minds.

  28. rebel with cause says:

    There’s some basic political economy at work too. Like for example, it’s hard to claim credit for not doing stuff. So the incentive governments face is to intervene.

    I think Texas has it right by having a part-time legislature (and low pay). This curtails opportunities to intervene and helps keep politicians grounded.

  29. Lem says:

    I’m talking about brain washing, not stupidity.

    Sorry Sinclair. Are you saying public schools brainwash students and private don’t?

  30. Empire says:

    I put it to the audience that both public and private education are a rort, practiced on the hopeful, and for the benefit of the education machine, no matter how they get the money.

    There is no private education, with the exception of home schooling.

    All schools are recipients of state funding. So called private schools are really parent subsidised state schools. Herein lies the problem.

    Private schools are advantageous because parents’ concerns at least get a hearing. Try bollocking a state school for allowing the teaching of thermageddonism and you’ll receive a visit from the jackboots at the witching hour.

  31. Sinclair Davidson says:

    Lem – it’s a matter of degree and there are exemptions to every rule as situation. What I am saying is that through its ability to control the syllabus and hire and fire teachers the state has control over young minds and can distort the market for ideas. I fully accept that it will not always succeed and subversives will always operate to undermine the state.

  32. Sinclair Davidson says:

    … and situation … not as situation.

  33. Lem says:

    Sinc, from the look of the syllabus my 5 kids were subjected to, it is no different in private schools,.

    Luckily, they had parents who were not only willing to pay, but also up for some contrarianism. Gosh, I wrote some good letters of objection to that Head, who is long gone now.

    It wasn’t worth $500,ooo, though.

  34. Kool Aid Kid says:

    Sinc: “slaves’? What are you talking about?

  35. Kool Aid Kid says:

    And I am a product of a selective public school and a very posh private one.

  36. rebel with cause says:

    Even private schools have to get their teachers from the same cookie cutter production line.

  37. Pyrmonter says:

    ^ Sinc – Lem has a point: though the management and personnel may be (somewhat) different and there may be differences at the edges of the curriculum, are the independent schools that different to the state ones? They recruit from essentially the same pool of teachers, and the inmates are expected to complete essentially the same means of assessment, whether one of the domestic ones, the IB or something obscure like the UK equivalents. Or am I brainwashed by 12 years of state education (+another 7 years or so of study at a “public” university”).

  38. 1234 says:

    Bullshit – 13 years of statist education, ABC, NGOs etc. To call 13 years of education “statist brainwashing” is laughable”. Oh, and why no mention about the influence of big business and the advertising industry in shaping the “market of ideas”. On commercial tv about 13 minutes in every hour is dedicated to instilling the idea of never ending consumption. Hey Sinclair, how about opening your other eye for a change.

  39. Sinclair Davidson says:

    1234 – that vein in your temple is throbbing again. Be sure to stay on your medication.

  40. Sinclair Davidson says:

    Pyrmonter – there is a difference in culture, attitude, and approach.

    Will chat about it when I’m next in Sydney.

  41. Sinclair Davidson says:

    a selective public school and a very posh private one.

    Excellent.

  42. 1234 says:

    Piss off Sinclair if that is all you have to offer.

  43. Kool Aid Kid says:

    Sinc: “slaves”?

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