Category Archives: Philosophy

I, Pencil Meets Today’s Political Realignment

Conservatives are different than they were just a few years ago, and it isn’t just because of Trump, who is more a symptom than a root cause. There is a larger political realignment underway, as happens every couple of generations. Previously, conservatives saw communism as the enemy, and favored free markets as a bulwark against it. But the Cold War ended a generation ago. Today, the debate isn’t over communism vs. capitalism, it’s over open vs. closed.

The latest data point in the current political realignment comes from The American Conservative’s Declan Leary, in a piece taking on Leonard Read’s classic free-market pamphlet I, Pencil (see also CEI’s video adaptation). Leary’s article is titled “We Are Not Pencils,” though the article’s URL contains the phrase “pencils are from the devil.”

This is quite a change from the days when President Ronald Reagan was photographed reading The Freeman, the magazine published by I, Pencil author Leonard Read’s Foundation for Economic Education.

At the same time, the old and new conservatives aren’t as different as they seem, despite their differences on trade, free markets, antitrust, industrial policy, and Eastern European dictators. Their different views come from the same inborn human tendency to see the world in terms of in-groups and out-groups.

Those groups can be defined by almost anything, whether serious or silly—language, race, religion, nationality, political party, sports fandom, views on whether pineapple belongs on pizza, and more. People can simultaneously belong to several of these groups, and flit between them seamlessly as social situations dictate. A Democrat and a Republican can be friends at a baseball game where they cheer for the same team, for example, then go back to bickering after the game.

I, Pencil celebrates openness, giving that 1958 pamphlet a clear position in today’s realignment. Read’s point is that cooperation is so fundamental to the human condition that no one, by themselves, can make something as simple as an ordinary pencil. Interconnectedness makes modernity possible.

Making a pencil requires millions of people working in concert. These include loggers, miners, tool makers, paint producers, truck drivers, box makers, machinery designers, farmers and restaurant workers to feed them all, retail clerks, and more. Not only that, but nobody is in charge. Nobody is following any plan. This complicated order emerges spontaneously, guided by little more than the price system and social norms.

But where Read sees a source of wonder, Leary sees a source of fragility. “The Invisible Hand wrenched away not just American jobs but America’s very capacity to produce things,” he writes. What if a link in the supply chain breaks? What if China decides to cut off America’s supply of rare earth elements? What if some politically woke truck drivers go on strike?

It would be better, Leary argues, to turn inwards a little bit. Going full Juche, as North Korea calls its philosophy of self-reliance, is obviously harmful. But on the spectrum from open to closed, Leary argues that we have gone a bit too far toward the open side, and become too vulnerable because of that. Out-groups aren’t as trustworthy as the in-group, in that view.

But has the invisible hand really “wrenched away American jobs?” Look at the data for the size of the U.S. labor force, going back to 1948:

Labor force size is tied most closely to population size, not how open the American economy is to foreign trade. In 2000, the labor force was 143 million people. As of September 2021, it was 161 million. That’s a net gain of 18 million jobs, even accounting for the 3 million jobs lost during the pandemic that have not yet come back.

Leary is asking the wrong question. What is important is not how many jobs, but what types of jobs there are, and how much value those workers create. A subsistence farming economy has full employment, but low living standards. A globalized, high-tech economy also often has full employment, but its similarly sized labor force has much higher living standards and longer life expectancies.

So Leary’s argument about jobs doesn’t hold. What about “America’s very capacity to produce things?” Let’s look at the St. Louis Fed’s total index for industrial production from 1920 to the present. Notice that it is near an all-time record high right now, despite a COVID-related dip:

So Leary’s argument doesn’t hold there, either. To be fair, this record was set by fewer manufacturing workers. There were 12.8 million manufacturing workers when COVID hit, compared to a peak of 19.5 million workers in May 1979. That is concerning. But why is manufacturing output still higher? Because today’s workers are more productive than they were a generation ago.

This productivity surge—driven by technology, openness, and specialization—has freed up millions of people’s time and talent for other pursuits. Not only do Americans manufacture more stuff than ever before, we are also creating more service-related value, with less effort. It’s not manufacturing or services when productivity increases; it’s manufacturing and services. The pie gets bigger.

The key to mass prosperity is doing more with less. Politically directed industrial policy attempts to treat a healthy patient, while harming the rest of the economy by taking away its resources.

Moreover, the service jobs to which workers are migrating tend to pay better and have better working conditions. There is something to be said about working in an air-conditioned office or from home, rather than a noisy factory floor with potentially dangerous machinery.

Average hourly pay, as of September 2021, is $24.18 in manufacturing, versus $30.85 for the economy at large. Since wages are tied to productivity in the long run, a major reason for workers’ migration away from manufacturing is that the new types of jobs tend to create more value than the old ones.

Using government policy to migrate workers back to manufacturing jobs would mean paying many of them less. It would also mean that their hard work would create less value for people. That would be a double blow to worker’s egos, which is almost certainly not Leary’s intention. But as the economist Thomas Sowell likes to say, intentions are not results.

What about the theoretical case for more economic self-sufficiency? The first response is a simple one: Don’t put all your eggs in one basket.

Leary argues that elaborate supply chains are vulnerable. If one link breaks, the whole chain becomes useless. Fortunately, supply chains are nothing like chains. A link in a chain is connected only to the link directly ahead of it, and the one directly behind it. Real-world supply chains are more like webs or networks, where each piece is connected to nearly every other piece. That is a source of strength.

Breakages happen all the time in the real world. It’s important to have as many ways as possible to adapt and reroute. As the economist Israel Kirzner pointed out, entrepreneurship is all about alertness. Markets and supply networks are never perfect, and are always changing. Every flaw, and every vulnerability, is an opportunity for improvement. The economy is an ongoing process of experiment, trial, error, and adaptation.

But people will have fewer ways to make improvements and shore up against vulnerabilities if policies limit who they can cooperate with or confine their talents to certain industries. Industrial policy and self-sufficiency make people more vulnerable against threats because they lock people into old patterns, distort prices that convey important information, and make it more difficult to adapt. This is true whether the threat is a global pandemic, a foreign adversary, or a local labor dispute.

The economic case for why openness is more resilient than self-reliance is not new. It is not even controversial, at least among economists. But in politics, issues are often not about the merits. If Leary really is arguing against the economics, he has not succeeded. But if he’s staking out a cultural or political identity and attacking out-groups, then mission accomplished.

Leary also deserves credit for using the word “liberal” closer to its original and correct meaning—valuing freedom and openness—than do most commentators.

The insight that national conservatives and populists often care more about cultural identity than policy is key to understanding today’s political realignment. That is not to pick on conservatives; many progressives are no different. For them, too, signaling is often more important than real-world policy effects.

Affirming the in-group and vilifying the out-group is harmless at a ballgame, or in an argument about whether Star Wars or Star Trek is better. But in public policy, the stakes are higher. An old impulse that had survival benefits in hunter-gatherer times can have the opposite effect in the modern world—especially when COVID-19 is still a going concern.

It isn’t often that a pamphlet about basic economics offers insights about a political realignment that happens 60 years after its publication. But that is the case with I, Pencil. Leary would not have bothered writing about Leonard Read’s defense of openness if it didn’t strike a nerve. Fortunately for the economy and for our ability to respond to the COVID crisis, Leary’s criticisms do not hold up against real-world data or economic theory. If he instead wants to engage in culture war identity signaling, perhaps he should find ways to channel that impulse in ways that would not make America more vulnerable to threats both domestic and foreign.

For more on “I, Pencil,” see CEI’s video adaptation. See also my review of CEI Julian Simon Award winner Johan Norberg’s book Open.

John Stuart Mill on the Limits of Economics

We must never forget that the truths of political economy are truths only in the rough: they have the certainty, but not the precision, of exact science.

-John Stuart Mill, Principles of Political Economy, Book 2, chapter XVI.4, p. 422.

Fighting Bias and Misinformation, from Pierre Bayle’s 17th Century to the Social Media Age

Many people insist that media bias and misinformation are getting worse in the social media age, and we need to do something about it. Depending on whether one leans Democratic or Republican, tech companies are either not doing enough to stop right-wing misinformation from spreading, or are censoring legitimate conservative content. Some conservatives feel so aggrieved they are even pushing to revive the fairness doctrine, which they used to oppose.

Bias and misinformation are impossible to measure, which puts a rather obvious damper on peoples’ certainty about them. Ironically, this is at least partially because of the human brain’s built-in biases, such as recency bias, availability bias, and pessimistic bias. In fact, media bias and misinformation are nothing new, and have likely gotten neither better nor worse over time.

These problems have been around so long that the 17th century philosopher Pierre Bayle wrote in an issue of his 1680s periodical Nouvelles de la République des Lettres (News from the Republic of Letters):

“History is dished up very much like meat. Each nation and religion takes the same raw facts and dresses them in a sauce of its own taste, and each reader finds them true or false according to whether they agree or disagree with his prejudices.”

More than 300 years later, this holds up well. And it’s not just with history. People also put their own tastes on current events. Different people take identical facts and prepare them differently, usually in line with whatever their ideological priors are.

Just being aware that everyone does this can go a long way toward minimizing the harmful effects of bias and misinformation. Beyond awareness, there are also many simple, low-effort actions one can take, some of which Bayle might endorse if he were alive today:

  • Avoid cable news channels. They do not inform people, so much as get them riled up. People who feel outraged click on more articles, keep the TV on, and generate more ad revenue. Outlets encourage this by framing news stories as us-vs.-them struggles first, and only secondarily by presenting information. These are two very different things! Learn to tell them apart. If you find yourself getting outraged over something a personality figure from the other political party said, or about the culture war story of the day, that’s usually a good sign that you’re getting riled up rather than informed. There are better uses for your time, and for your blood pressure.
  • Purge low-quality sources from your social media feeds (or abstain entirely). Use those mute and block buttons on people who post low-quality content that does not add value to your feed. That’s your space, and you can curate it however you want. If someone’s posts are mostly outrage stories, your social media feed will likely be both more enjoyable and more informative if they are not part of it. Spend some real-life time with that person instead, which will likely elicit better social etiquette. People are more considerate of others when they are face to face rather than venting their spleen, alone, into a keyboard.
  • Put a little effort into statistical literacy, and be skeptical of too-good-to-be-true stories that appeal to your ideological priors. Arming yourself with the right tools is as easy as picking up a layman-friendly book or two. Financial Times columnist and BBC presenter (and friend of CEI) Tim Harford’s latest book, The Data Detective, is an excellent guide that is also a delight to read. I also recommend Hans Rosling’s Factfulness, which I reviewed earlier on this blog. Jonathan Rauch’s new book The Constitution of Knowledge has a lot wisdom, which he also shared earlier this year at a CEI online event. My colleague Iain Murray strongly recommends his old boss’ book, David Murray, Joel Schwartz, and S. Robert Lichter’s It Ain’t Necessarily So: How the Media Remake Our Picture of Reality. Reading a chapter a day from any of these books is a far better use of 30 minutes than getting outraged over Tucker Carlson or Rachel Maddow’s latest rant.
  • Keep an eye on the longer arcs of history, not just today’s ephemeraElizabeth Nolan Brown’s recent Reason article “40 Ways Things Are Getting Better” is one example of journalism that gets this. There are plenty of reasons for short-term pessimism; that keep groups like CEI busy. But there is also a strong case for long-run optimism. Both can simultaneously be true, as CEI founder Fred Smith captured in his “Despairing Optimist” letters. Matt Ridley’s The Rational Optimist and his new book How Innovation Works, for which he also did a CEI event, are immensely helpful for seeing the big picture.

Notice that none of these strategies involve government regulating political speech. They are all ideas that you and I can implement right now; change begins at home. Ultimately, individuals hold power over bias and misinformation, not the other way around. We should learn to use that power wisely, and not delegate it away to Washington, where it will get politicized and misused. It takes some effort, which is why many people don’t bother. But the payoff is worth it.

Pierre Bayle had a good sense of this dynamic. He was an important bridge figure between the Scientific Revolution and the Enlightenment—which means he helped to inspire modernity as we know it. He emphasized the virtues of tolerance and skepticism by individuals, in part because he was forced into exile from his native France over his religious beliefs. He settled in the more tolerant Netherlands, where he produced works in astronomy, philosophy, religion, literature, and even produced the Dictionnaire Historique et Critique (Historical and Critical Dictionary), an early encyclopedia that predated Denis Diderot’s more famous 1751 Encyclopédie by 60 years. France’s outrage-induced loss was the Netherlands’ gain, and ours.

We live in better times. But the lessons Bayle took from his day’s outrage culture are still useful in dealing with today’s excesses. Times change, but people are people, wherever you go. That is mostly to the good—though as we see in the news and on social media, not entirely. There is always reason for optimism, if we know how to look for and act on it.

The Progressive Playbook? Thoughts on a Slippery Slope

Is there a master plan behind the blunders of governments? Or are politicians just making it up as they go along? The cabal model is tempting. A lot of people tend to believe that it is not enough for their opponents to wrong; they must also have bad intentions. But usually, less sinister explanations, such as fallible politicians responding to incentives, are a better guide to fixing today’s political mess.

For example, President Biden recently announced that he is asking the Federal Trade Commission to consider using antitrust enforcement to fight rising gas prices. The economist Jeff Eisenach tweeted in response:

The Progressive Play Book: Step 1: Use regulations to restrict supply. Step 2: Blame the oil companies for rising prices. Step 3: Invoke antitrust. Step 4: See e.g., CITCO, Pemex. We are at Step 3.

One should not read too deeply into tweets. They lack enough space either to explain nuances or to define terms clearly enough to prevent misunderstandings. Sometimes, people are just making a snarky point, and they don’t have room for a disclaimer in a 280-character tweet.

Any or all of these situations could be the case here, but Eisenach’s playbook theory tweet has a clear—and common—slippery-slope logic that is worth a closer look. This is not to single out Eisenach, but to highlight a tendency among people of all political persuasions: to assume bad motives and master plans where there probably aren’t any.

Progressives often favor adding new economic regulation, and rarely favor rolling them back. So, it makes sense that progressives would respond to rising gas prices—largely caused by regulations—with more regulations. In Eisenach’s playbook model, this story presumably repeats until the energy sector is nationalized, as with Pemex, which is owned by the Mexican government, and Citgo, in which the Venezuelan government has a stake (though it cannot benefit from Citgo’s U.S. holdings because of sanctions).

This isn’t entirely drawn from thin air. Sen. Bernie Sanders (D-VT) really has proposed nationalizing the energy industry. The Green New Deal may not be a serious proposal, but it really was introduced as legislation.

But is the slippery slope really so deliberate? Just like the GOP’s own populist extremists, the Democratic party’s progressive wing has a high decibel level, but lower numbers and influence. Yes, progressivism touts lofty ideals, such as economic equality, democracy, and environmental protection, but in practice, progressive policies tend to be less lofty and more concrete.

If some people are having trouble making ends meet, pass a law raising the minimum wage. If other people have too much money, raise their taxes. If rents are too high, use price controls or impose a moratorium on evictions. President Biden’s antitrust threat against oil producers is similarly direct. Gas prices are going up, so do something about it. Such moves don’t involve much abstract thought about long-term competitive processes, tradeoffs, unintended consequences, or rent-seeking—what economist Thomas Sowell calls thinking beyond stage one.

If anything, President Biden’s proposal mixes a layman’s misunderstanding of the 1970s oil shock from early in his career with today’s hottest political trends, such as inflation and antitrust. Availability bias is a far likelier driver for his proposal than a playbook to eventually nationalize the energy industry.

Inflation and high gas prices were important issues in the 1970s. The two are linked together in a lot of peoples’ minds to this day. Today, inflation is back over 5 percent and gas prices going up again. In his speech, President Biden even singled out OPEC, which is long past its prime as a global economic villain.

Another factor that makes the current gas price increase appear even starker is that prices are rising from a low starting point. On April 23, 2020,  gas prices averaged $1.77 per gallon, the lowest since the 2008 financial crisis. Since then, gas prices haves been on an upward trajectory, rising to $3.17 per gallon by August 16, 2021. While that is a sharp increase, thanks in large part to that low starting point, gas is still cheaper than it was for almost all of the period between 2011 and 2014.

Inflation is also not the main driver of rising gas prices. Inflation is what happens when the supply of money gets out of whack with the supply of goods and services. If it isn’t monetary, it isn’t inflation. Today’s inflation is likely responsible for about 10 cents per gallon of the price increase, out of roughly $1.40. Most of the rest comes from a mix of supply, demand, and bad regulations.

The Jones Act of 1920, which is essentially a Buy American bill for the maritime shipping industry, makes shipping domestic gas artificially expensive and increases reliance on imported oil. Both of these make gas prices higher and more volatile. The Biden administration’s decisions to deny drilling and pipeline permits and to raise some regulatory burdens are also raising prices and squeezing supply. These are not inflation, but they are raising prices.

Coincidentally, higher prices and restricted supply are the same indicators used in finding consumer harm in antitrust cases, adding potential confusion to any antitrust cases stemming from Biden’s proposal. His recently proposed carbon tariffs on imported oil would further worsen the problem.

Repealing existing regulations and walking back proposed burdens would do more to lower gas prices than adding new restrictions—but that would require admitting mistakes. Politicians generally prefer to shift the blame and then publicly punish some supposed bad guys. That is not a conspiracy; it is rational political behavior.

The state of politics is unhealthy. There are lot of changes needed at the cultural, institutional, and policy levels. While conspiratorial allegations of political playbooks and slippery slopes are tempting as explanations, a lot of bad policy simply involves politicians responding to the incentives they face with the limited knowledge they have—the same as everyone else does.

The economic recovery and the continuing long-run rise in living standards would be better served if reformers would focus their scarce resources on these, rather than on exposing sinister narratives that aren’t really there.

Different Attitudes Towards Life

In today’s polarized discourse, there is a stark difference between thinkers who spend most of their time being for something, and those who spend most of their time being against something. One attitude is healthier than the other, and is more likely to lead towards truth, and is likelier to succeed in persuading others and getting its policies enacted.

Think of it as the difference between between favoring liberalism, openness, and dynamism on one hand; and owning the libs or the cons, depending on one’s tribal affiliation, on the other.

Which makes this passage from near the end of Evelyn Waugh’s 1943 novel Brideshead Revisited especially poignant (p. 383 of the Back Bay Books edition):

I said to the doctor, who was with us daily: “He’s got a wonderful will to live, hasn’t he?”

“Would you put it like that? I should say a great fear of death.”

“Is there a difference?”

“Oh dear, yes. He doesn’t derive any strength from his fear, you know. It’s wearing him out.”

Who Bears the Burden of Proof in Justifying Regulations?

John Stuart Mill gave his answer on p. 938 of the Liberty Fund edition of his Principles of Political Economy, in volume 3 of his collected works:

“[T]he onus of making out a case always lies on the defenders of legal prohibitions.”

The modern legal scholar Randy Barnett calls this the presumption of liberty. People are presumed to be free to act. If a third party wants to intervene, the burden is on them to prove why they should be allowed to.

Upcoming CEI Event: Bart Wilson on The Property Species

At noon ET on Thursday, February 11, CEI is hosting an event with the experimental economist Bart Wilson, author of The Property Species: Mine, Yours, and the Human Mind. He is also a frequent collaborator with former CEI Julian Simon Award winner Vernon Smith.

Near the end of The Property Species, on p. 194, Wilson shows how the custom of property is essential for natural conservation efforts (footnotes omitted):

When some people are allowed to say, “This elephant is mine,” they defend attacks against the elephant like they defend against attacks against their own person. In contrast, when government agents are tasked with defending elephants against attacks, they are not as effective—the evidence strongly suggests—in protecting elephants about which they cannot say, “These are mine.” Think about it natural-historically: Isn’t it astonishing that people who can say, “This elephant is mine” will protect and defend the life of a distantly related fellow mammal against members of their own species who wish that distant relative harm? Isn’t it furthermore prudent for such people to do so? And isn’t it then morally incumbent upon us to consider the possibility that property can save elephants from extinction? Consider, for the moment, the beautiful and humane thoughts made possible by mine.

CEI has a long history of supporting private conservation, and here Wilson makes a powerful point in its favor.

Wilson also discusses other concepts in the book, such as his view that property is not a right; it is a custom. This view avoids some of the problems of rights theory while emphasizing property’s inherently social and cooperative nature.

Property, Wilson argues, is not just the ability to say “this is mine.” Any dog with a bone thinks that. Property is the ability to also say “that is yours.” Dogs do not have that ability. Only humans have made this cognitive leap. Property is unique to us. It is also universal among us. Every society on Earth, without exception, has social customs that involve notions of both “this is mine” and “that is yours.” This human universal is what makes non-violent trade possible. Property is what lets people act on Adam Smith’s natural propensity to truck, barter, and exchange.

As Wilson argues on p. 179, “we have to be open to the possibility that commerce may be an integral part of that socializing and ethicizing process.” Property is a fundamental concept in designing sound public policy, and in enabling virtuous and prosperous societies to emerge. There is much more to property than armchair philosophizing.

There is also more to property than commerce. The custom of property gives a convincing answer to the question that all social scientists seek to answer: how people find ways to get along with each other. Many people view property as an exclusionary, anti-social concept. This is a mistake. It requires multiple people for the concept of property to even exist. And those people must cooperate with each other for it to work. It does no good to say “this is mine” if other people do not agree to respect that, and expect to have their own claims respected.

Property is an ongoing dialogue between people. it requires listening, not just speaking. There is a reason why economics and related disciplines–nearly all of which Wilson draws from in the book–are called social sciences.

Wilson, of course, has much more to say on the matter. Click here to register for the February 11 event. The book is here. I highly recommend both.

Best Books of 2020: Joseph Henrich – The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous (New York: Farrar, Straus, and Giroux, 2020)

It’s early, but The WEIRDest People in the World: How the West Became Psychologically Peculiar and Particularly Prosperous by Joseph Henrich will likely be one of the new decade’s most influential books. Henrich complements work by Joshua GreeneRichard WranghamJonathan HaidtSteven PinkerMichael Shermer, and others on the psychological underpinnings of modern liberalism—liberalism in the more-or-less original sense of the word.

Henrich’s book has two main arguments. One is historical: The Catholic church, completely unintentionally, set off a social chain reaction that created modernity. The second is psychological: People in modern societies are psychologically distinct than people in traditional kin-based societies.

He uses the acronym WEIRD for Western, Educated, Industrialized, Rich, and Democratic, to describe the unusual people in modern market-liberal societies. If you are reading this book review, then you are probably WEIRD, and so is nearly everyone you know. But we WEIRD people are the outliers in human history. Outside of Europe, East Asia, and North America, there are very few of us.

Most human societies are built on kin-based structures. This was true during our hunter-gatherer past, which was about 190,000 years of our 200,000-year history—95 percent of our species’ time on Earth. Societies remained kin-based through the agricultural revolution, and through the birth of cities about 6,000 years ago. And it is still true today in most countries. Despite occasional flowerings, there were no enduring WEIRD societies in human history until about two centuries ago. This is maybe one tenth of one percent of human existence, and even then, most societies remain kin-based. Again, it is WEIRD people who are unusual.

What is a kin-based society? In these, business partnerships, social networks, and marriages are confined to networks that rarely stray outside the extended family or clan. People tend to be wary of non-kin, and have a strong in-group-vs.-out-group worldview. People tend to look out for their clan’s collective interest over their individual interest. In kin-based societies, nepotism isn’t frowned upon; it’s the norm. WEIRD Americans today look askance when a president appoints inexperienced family members to be senior advisers. But in most other societies, this would have been acceptable, even normal behavior.

By contrast, WEIRD people are more individualistic and more trusting of outsiders. Kin-based families often arrange marriages for their children. WEIRD people usually marry for love. Kin-based people are expected to enter the family business. This is why so many of us have occupation-based surnames, such as Smith, Baker, or Fisher. WEIRD people usually prefer to choose their own line of work, which is one reason why today’s Smiths, Bakers, and Fishers rarely practice those occupations.

Kin-based people are reluctant to do business with strangers and foreigners. WEIRD people are more open to trade and more trusting of potential business partners they have never met. Nobody is purely meritocratic, but WEIRD people are closer to that ideal than most people.

So now that we know the difference between most people and WEIRD people, what is Henrich’s historical argument about the Catholic church accidentally making today’s WEIRD-ness possible?

The Catholic church blew up traditional kin networks through what Henrich calls its unofficial “Marriage and Family Program (MFP).” In short, the Church prohibited cousin marriages. The incest taboo is a human universal. But its boundaries vary from place to place. The church decided to push them progressively further out over a period of centuries. In many places, it eventually prohibited marriages closer than second and third cousins. In a few places it briefly went as far as eighth cousins.

This was a bigger deal than it sounds. Back in, say, the 12th century, people lived isolated lives. Few people lived in cities. Many people lived their entire lives within a 30-mile radius. They met few, if any, people outside of their extended families. And the wanderers they did meet were often beggars, vagrants, or outlaws. The Church’s MFP forced these isolated people to look outside their villages and kin groups for marriage partners. This forced openness, in the long run, ended up wiring people’s brains differently.

Young people are impressionable. When they are of marriageable age and are forced to meet and interact with strangers, and travel among them, traditional closed-kin psychological barriers gradually break down. They are gradually replaced with growing degrees of WEIRDness. It is a long, gradual process with many degrees. But over centuries, the effects add up.

None of the changes Henrich describes are genetic. None of them are racial, and none of them are peculiar to Europe. The conditions that make individuals WEIRD are cultural, intellectual, and psychological.

Using cousin marriage rates as a stand-in for how strong the Church’s Marriage and Family Program operated in different regions, along with historical records, Henrich finds that the MFP was the single biggest cause of everything from per capita GDP to interest rates to murder rates. Interestingly, regional cousin marriage rates closely track religious divisions and regional church influences. Henrich himself was skeptical about the MFP’s cultural influence, so he checked his results every way he could.

So, while openness is the real engine of WEIRDness, in Europe’s case, Church doctrine was what drove the process of opening up.

The differences between kin-based and WEIRD people show up in psychological tests. The Church’s MFP turns out to have changed people’s personalities and psychological profiles. In my recent review of Virgil Storr and Ginny Choi’s excellent Do Markets Corrupt Our Morals?, I noted their finding that people from market societies play decision-making games differently than do people in non-market societies. Henrich argues that this is because they are psychologically different.

From birth, WEIRD people from market societies have been more exposed to outsiders and more likely to trust them. No wonder they tend to play lab games that way. They tend to be more trusting of other players and more willing to use long-term strategies. People from kin-based societies are more likely to do the equivalent of a dine-and-dash from a restaurant. If the other player is not from their in-group, they feel fewer compunctions about cheating that other player.

Kin-based and WEIRD people even assign blame differently. Most WEIRD people see classroom teachers’ disciplinary tactic of punishing an entire class for one student’s offense to be morally wrong. Kin-based people see this as normal, and are fine with it. They think more in terms of collective responsibility than individual responsibility. In fact, criminal justice systems in many kin-based societies punish whole families for one member’s crime.

There is a reason for this. In most human societies, life was precarious. One bad harvest could mean starvation. Very strong conformity norms were a survival advantage. Collective punishment helps to reinforce conformity norms. Maybe someone does have a new idea for planting a crop differently. But if it fails, the stakes are life and death. It’s probably not worth it. Better to make sure that everyone sticks with what he or she knows works.

When most people’s only experience with foreigners is with either castoffs or invading armies, they probably aren’t going to trust them. They’d probably return the favor when possible. Unlike trade, theft and war are zero-sum interactions. When these are someone’s sole experience with out-groups, they are less likely to trade with foreigners and realize the benefits of division of labor. Safer to do it all yourself.

Henrich has written a provocative book that builds on an already robust literature. Despite its deep historical and psychological content, The WEIRDest People in the World is also highly relevant to modern public policy. The regulations and legislation that groups like CEI deal with on a daily basis do not come from a vacuum. They come from longstanding political institutions. And these system-level institutions in turn come from culture. All three of those levels matter. A reformer who works on only one of them will fail. Henrich has come up with a plausible framework to explain how they interact over the long run, and how they can shift. Where people are relatively WEIRD, people will build relatively market-oriented political institutions—and eventually, policies. Where they are kin-based, they probably won’t.

Without the Church’s unofficial Marriage and Family Plan, European culture likely would have remained insular and kin-based. That tendency still exists, and is expressing itself in the European Union’s trending towards becoming a protectionist trading bloc. Reformers need to push back and remind people that WEIRD-style openness has massive benefits, especially for the poor.

What about the rest of the world? Fortunately, the Church’s MFP is not the one and only way for people to become psychologically WEIRD. Ideas can be imported and exported, same as goods and services. America was a relatively WEIRD society from the start, as was Australia. The Asian tigers such as Japan, Korea, Singapore, and Hong Kong, saw the economic success of WEIRD countries, and followed their example. China is at a weird midway point psychologically, and its institutions are still extractive and kin-based by WEIRD standards. This may limit China’s future growth as a global power.

The point is that setting a good example can do a lot more good than people think. This puts today’s nationalists and economic protectionists in an awkward position. They are not the future. They are throwbacks to an impoverished, unhappy past.

The post-1800 Great Enrichment that billions of people are enjoying today has deep and distant causes operating at multiple levels. Henrich’s thesis of WEIRD psychology, cultural openness, and economic prosperity will have a major impact on future work in geopolitics, economic development, political polling, immigration, and free trade for a long time to come.

Book Review: Eric Metaxas – Bonhoeffer: Pastor, Martyr, Prophet, Spy

Eric Metaxas – Bonhoeffer: Pastor, Martyr, Prophet, Spy  (Nashville: Thomas Nelson, 2010)

Who was Dietrich Bonhoeffer? He was a German pastor who became a prominent resistor to Hitler’s Third Reich. He helped people to escape Germany, was part of a group that plotted to assassinate Hitler, and died in a concentration camp.

This book would have been about two thirds shorter if it had stuck to its subject. Instead, much of the book is theological discourse. A hero’s courageous life story was regularly interrupted with digressions on obscure theological interpretations and debates—including an out-of-nowhere rant about abortion during a chapter on Bonoeffer’s time in Tegel prison.

Even while listening to the Audible narration at 2.25x speed, there was a great deal of tedium, and not enough about the remarkable man whose name is in the book’s title. There are occasional flashes of (possibly unintentional?) humor, as in Hitler’s description as an “irascible vegetarian.” These moments are few, though.

Bonhoeffer was born in 1906 into a prosperous, intellectual household with several siblings, including a twin sister. His childhood was happy, his parents raised him right, and Bonhoeffer showed high character from the start. He also had enough musical talent to seriously consider becoming a professional musician.

He instead decided to become a pastor. He received his doctorate at age 21, and was ordained at 25. Though protestant, he was tolerant of other denominations, including Catholics, making friends and attending their services. Bonhoeffer’s ecumenicism made him stand out as a little bit of a liberal hippie type by the standards of the day, though a straight-laced one.

The young Bonhoeffer also had an adventurous spirit. He traveled to Rome and Spain, though he spent much of those trips attending church services and in theological study. He was also able to spend a great deal of time studying his favorite sculpture, Laocoön and His Sons, located in the Vatican.

While on a trip to America, Bonhoeffer took a 4,000-mile road trip from New York to Mexico. Bonhoeffer did not know how to drive, and failed a driving test right before the trip. He drove anyway, though with a friend, and essentially taught himself on America’s highways.

During this period he read Erich Maria Remarque’s anti-war novel All Quiet on the Western Front and saw its movie adaptation. To that point, it was the 20th century’s best-selling novel. Bonhoeffer lost an older brother during World War I, and Remarque’s frank depictions of things his older brother experienced, and the way he humanized the soldiers, helped to turn Bonhoeffer into a pacifist.

Bonhoeffer and his similarly liberal-minded family were disturbed by Hitler’s rise from well before he took power, but didn’t take him very seriously until it was too late. But the problems were far larger than one man.

A German Christian movement arose in Germany, embracing the trendy new nationalism and supporting Hitler. Bonhoeffer denounced the movement—which did not come naturally to the inclusive Bonhoeffer—and began to earn a higher profile, and the attention of the authorities. In a theological distinction that actually mattered, Bonhoeffer argued that Hitler was converting the German Christians, not the other way around.

He also struggled with depression, starting around the mid-1930s. In 1939, before the war started in September, Bonhoeffer managed to escape Germany and return to America. But he was restless and unhappy, because he knew that he could help the resistance. So he ended up going back to Germany. He would not survive the war.

He joined the Abwehr, an underground resistance group that ultimately aimed to assassinate Hitler. They nearly succeeded several times, most famously in the failed Valkyrie plot. They also whisked away Jews and others to safety outside Germany, and tried to communicate clandestinely with Allied governments.

Bonhoeffer took seven trips over the Swiss border and back helping the Abwehr cause. He was imprisoned in 1943, just seven miles from his parents’ house. He also became engaged to an 18-year old, though he was 36 at this point. They wrote each other frequently, but saw each other in person a total of 17 times during his imprisonment. As the tide of the war turned against Germany, they both believed Bonhoeffer would spend a year in prison at most.

They were not far off. In February 1945, Bonhoeffer was transferred to the Buchenwald concentration camp, site of some of the Nazis’ worst medical experiment atrocities. He was hanged on April 9, 1945. Allied forces liberated the camp two days later. He was 39. Bonhoeffer’s Letters from Prison were published posthumously, and remain in print today.

Best Books of 2020: Virgil Henry Storr and Ginny Seung Choi – Do Markets Corrupt Our Morals? (Palgrave MacMillan, 2019)

Most people see markets as dens of greed and moral corruption. In their new book, Do Markets Corrupt Our Morals?, Virgil Henry Storr and Ginny Seung Choi, of the Mercatus Center at George Mason University, argue the opposite. In fact, they go one step further: Markets make people more moral. Make that two steps further: Because markets have moral benefits, restrictions on markets have moral costs. They back up their argument with a healthy mix of theory and evidence. Along the way, they make a case for rethinking how people approach markets. Their arguments, rather than traditional “markets are efficient” arguments, are the liberal movement’s best hope for the future.

Storr and Choi describe their main thesis on p. 225:

But the evidence suggests that the consensus is wrong. Markets do not corrupt our morals. Not only are people wealthier, healthier, happier, and better connected in market societies, market activity makes us better people. Markets are spaces where we discover who is virtuous and can expect many of our vices to be revealed. Additionally, markets reward virtue and punish vice. As such, markets are moral training grounds.

In short: Less of Alfred Marshall’s supply and demand graphs, and more Adam Smith’s Theory of Moral Sentiments. Less Homo economicus, more Homo sapiens.

Their phrase “moral training grounds” is important. One of the most common mistakes in economics is the Nirvana fallacy. This says that because markets are not perfect, government can make things better. Storr and Choi know that perfection does not exist. Markets fail, but they also have a built-in improvement mechanism. Markets are an ongoing discovery process. People have to learn from experience what works and what doesn’t. They make mistakes, learn from them, and make changes. But because conditions are always changing, the adaptation process never ends.

People use markets to learn how to trust and to be trustworthy. This takes practice. It takes trial and error. The feedback people get from profit and loss help. So does learning what it takes to earn someone’s trust or their repeat business. Evidence from experimental economics shows that people who participate in markets learn these things more quickly than in other systems.

In one-shot games in lab experiments, people can cheat and get away with it, like doing a dine-and-dash at a restaurant in a town you’ll never visit again. Despite this, people in these studies who come from market-oriented societies cheat far less than one would expect from a traditional blackboard-economics model. They also cheat less than people from non-market societies who play the same games.  

Repeat-play games give the opportunity for cheaters to learn from their moral decision. Other players can punish cheaters in future rounds. They will often do so even when punishment also comes at a cost to the punishers. Upholding honesty is important enough that most people are willing to pay for it. In the long run, this reduces cheating. In fact, it happens almost automatically.

Without coaching, players often spontaneously settle on a tit-for-tat strategy. You start by assuming the other players are trustworthy, but if they cheat, return the favor. Depending on a game’s rules, this may mean punishing cheaters, or simply refusing to do business with them again. Regardless of whether the players come from countries with free markets or not, they tend to behave better in repeat-play games than in one-shot games. And again, players from market societies cheat less often than players from non-market societies.

Storr and Choi also take a tour of the different ways in which markets affect morals. The obvious one is that because people in market societies are richer, they can afford to be more moral. They can afford to give to charities. They can also afford a fuller life. Education, literature, the arts, and world travel all cost money. Dollars are nice, but they aren’t really wealth. Wealth is being able to treat others well, to have leisure to spend time with family, and to pursue friendships, hobbies, and to try new things. Market societies can afford far more of these life enrichments than non-market societies—and these experiences positively shape people’s characters.

Moreover, people in market societies have longer life expectancies, lower infant mortality, are more respectful of women’s rights, minority rights, and LGBT rights, are more religiously tolerant, go to war far less often, and have lower crime rates. All of these are moral outcomes. All of them are backed by abundant data. All of them are made possible by embracing markets. The moral conclusion is obvious.

Storr and Choi represent the future of the liberty movement. The Cold War is a generation in the past now. People still throw around the word “socialist,” but usually just to mean they don’t like something.

But markets are still very much under attack in the current political realignment. The in-groups and out-groups people are using are different now; capitalism-vs.-communism is out, and populist nationalism-vs.-liberal cosmopolitanism are in. Yet, most libertarians are still using the same materialist arguments.

Yes, markets are efficient and create more wealth than other systems. That’s important, but that also isn’t the main point. Markets have other positive effects that are ultimately more meaningful—and more persuasive in today’s society. Not only is Storr and Choi’s moral defense more versatile in today’s intellectual climate, it is more in tune with most people’s values. As CEI founder Fred Smith argues regarding values-based communication, it is important to speak to people in their language.

Most people don’t care about adding an extra decimal point to this quarter’s GDP growth, even though that is important in the long run. They do care about their kids growing up to be decent people. They don’t care that subsidies and taxes cause market distortions. They do care about having a well-rounded life.

Many market liberals only speak a niche language of efficiency. This is one reason why they remain a curiosity. Their disconnect is a major reason why so many people continue to oppose markets despite their moral benefits—hardly anyone makes the moral case.

Storr and Choi are not the only thinkers trying to correct this oversight. CEI Julian Simon Award winners Deirdre McCloskeyJohan Norberg, and Steve Horwitz are among them. But Storr and Choi just might be the ones to do it best. They deserve far more company.