Thursday, October 25, 2007

Progressivism and Authorianism

I am beginning to read Peter Levine's New Progressive Era: Toward a Fair and Deliberative Democracy (Lanham, MD., Rowman and Littlefield, 2000. 255 pp.) and am intrigued by Levine's discussion of deliberation in a democracy. The concept of deliberation resonates with me, in part because of its Aristotelian foundation (deliberation is the foundation of Aristotle's ethical model in Nichomachean Ethics). But the progressive model that Levine proposes is totalitarian in its implications. The campus left's intolerance of and refusal to hire political conservatives, for instance, is intimately linked to its claim to be deliberative via collegial processes. Excessive emphasis on deliberation induces tyranny of the majority and suppression of minority views. It is only through the limited state that deliberation's implicit authoritarian threat can be contained.

The problem with the deliberative solution is that it faces the cost and information constraints that all democratic processes face. Deliberation devolves into authoritative nostrums proposed by authoritarian progressives.

Importantly, the advantages of marginalism are lost when the public becomes overzealous in making decisions. Most or all economic actors make errors. Distorted decisions result in social losses. If there is no equation of marginal costs and benefits, the errors become massive. Such massive errors are characteristic of totalitarianism. Marginalism involves the equilibration of costs and benefits by firms and consumers who bear the costs of their own decisions. They also must cope with the possibility of counter-strategies by economic actors who have insights (either because of intuition or better information) that counteract the mistakes of the infra-marginal establishment. Much of the establishment is made up of conformists who are wrong much of the time. Mutual fund managers do not beat the stock market, for example. Without marginal decision making society will become stagnant. Nikola Tesla, the eccentric inventor of AC electricity, could not have succeeded in a deliberative society. If Peter Levine has his way, we will be living in primitive huts working in farming as serfs. It is only marginalism that can induce progress, not deliberation.

The results of excessive emphasis on deliberation are extremism, poverty and exclusion. Levine does not address what to do if democratic processes result in, for instance the Nuremberg Laws. Indeed, these outcomes have been intimately linked to progressivism in the past. The first "progressive" state was Bismarck's Germany, which preceded Hitler's Germany by fifty years.

Levine's discussion of deliberative democracy and the progressives' ideas is inspiring, but deliberation's totalitarian implications become evident when he talks about the "marketplace" (p. 17). He emphasizes that economic power is distributed unequally, suggesting that markets are inequitable. But he neglects to comment about the skewness in progressives' definitions of the terms of public debate that typically also are distributed unequally.

Thus, for instance, intelligent debate about the Federal Reserve Bank is difficult when the field of economics, the news media and politicians cloak a simple relationship between money supply and inflation in nonsensical terminology such as "reducing the federal funds rate" and claim, as does the Economist this week, that the people who expand the money supply at the Fed are geniuses whose work in causing inflation is really fighting inflation and cannot be understood by ordinary people. Levine does not address this kind of distortion, on which most of the progressives' successes have depended. Rather he emphasizes that sellers of goods are larger than buyers.

Worst of all, Levine claims that "through the democratic process I can advocate general rules that will bind me and all of my fellow citizens permanently." This is a frightening argument. Levine argues that although people say that they would be willing to pay more for a better environment, when it comes to actually buying they do not favor environmentally friendly merchandise. So Levine feels that it would be advantageous to for people to be able to force each other to live by the self-important statements they make to polling agencies.

It doesn't occur to Levine that mass psychology and cognitive dissonance favor nice-sounding public statements, but those statements may be unrealistic. Millions of Germans saluted Hitler. Levine seems to think that it is all to the good that they weren't forced to pay up out of their own pockets for the policies that Hitler implemented, the war, the concentration camps, etc., all of the massive costs that deliberation in Germany caused.

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