Thursday, November 15, 2007

Peter Levine's "New Progressive Era"

I had previously blogged about Peter Levine's New Progressive Era when I was starting it. Now that I've finished it, I conclude that my initial reaction was correct. The ideology of the progressives, and of Levine, ignores long run effects; bounded rationality; processes of experimentation that are necessary to innovation; the importance of private property and the private sphere; the importance of individual rights to be free from the progressives' endless taste for attacking the individual; and the importance of free markets to create a wealthy society.

Deliberation and democracy are only beneficial if there are limits set to their scope. As de Tocqueville argued, tyranny of the majority is the chief threat to American democracy.

Having grown up in New York, the state and city where the deliberative state has grown most extensively, I grew up seeing the failure of Levine's ideas first-hand. In New York, progressivism degenerated into Robert Moses's capricious abuse of power. Although Levine argues that the earlier progressives were ambivalent about unions, Levine is very pro-union. In New York, I watched the business base disappear; property values soar to the point of crippling unaffordability; and the growth of the rat population in the subways. (The city had confiscated the subways during the post-progressive era thanks to the moronic deliberation of that era). The City has increasingly become an elite playground that excludes the middle class thanks to the practical effects of Levine's ideas, specifically, special interest pressure to support public sector unions who have fought for high taxes; special interest eminent domain actions that have closed small factories and destroyed inexpensive housing; and the use of urban renewal and the tax system to squelch start-ups that have yet to prove themselves.

Despite its claim to be democratic, progressivism is anti-democratic. It is anti-democratic because it aims to apply democratic deliberation inappropriately to economic issues and so must fail. Levine does not appear to grasp the concept of marginalism or marginalist decision making; nor does he leave sufficient room for the possibility that an artist, intellectual, inventor or entrepreneur might have ideas which the majority would rather suppress because it does not understand them. This has been the consistent failure of progressivism. Deliberation and progressivism are fine in the limited scope of public decision making as defined in the nineteenth century. The slightest expansions make them untenable. In areas like monetary policy, which are not that complicated, special interests leap to make the topics seem complicated, and the public is easily bamboozled. The result is the special interest constituencies, which Howard S. Katz has called the "paper aristocracy" in the case of money supply, who argue vehemently for the "stabilization of credit markets" and similar kinds of meaningless, self-serving nonsense in order to justify public subsidies. The public is deferential toward the quack claims of academics, and so democracy becomes a matter of special interest, privilege and fake authority.

The public is simply not equipped to engage in debates about engineering; economics; architecture; construction; manufacturing, etc., etc. This is understandable because no one has the mental capacity to absorb all of these issues. In arguing for the public to engage in debates about such a wide range of issues, Levine and his fellow progressives are paving the way to totalitarianism. This is not surprising because it happened in Germany, the first country to adopt a progressive policy.

The end result of Levine's progressivism is dictatorship. Far from being a reform movement, the "new progressivism" leads to the kind of totalitarianism to which Bismarck's progressivism led Germany.

There are more than a few evidences of authoritarianism in Levine's book. For instance, Levine implies that those who "admire the market" should not "have disproportionate political power as a result of their wealth". But this kind of distinction leads to suppression of speech. For instance, is it fair that people with higher IQs have disproportionate political power and so can manipulate the government to serve their interests as the financial community has been able to do with the Federal Reserve Bank and as business has been able to do with the department of labor and the federal trade commission? The fact is that Levine singles out business as a manipulator, when the only conceivable outcome of his progressivism is manipulation by special interest groups.

Given the repeated failure of the progressives' ideas, one would hope that their ideas would have been consigned to the trash bin. But their emotional hatred of business, which they cannot dominate and control, inspires their endless speculation as to how to suppress entrepreneurs and those who do not pay attention to their stale ideas.

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