Category Archives: Political Animals

Herbert A. Simon – Administrative Behavior, 4th Edition: A Study of Decision-Making Processes in Administrative Organisations

Herbert A. Simon – Administrative Behavior, 4th Edition: A Study of Decision-Making Processes in Administrative Organisations

Realistic, subjective, and humble—probably a reflection of Simon’s time at the University of Chicago. Rather than the typical snake-oil management guru who pretends to know everything, Simon that there is no perfect structure for an organization. Every possibility has at least some drawbacks. Simon instead emphasizes the need to treat organizational structure as an ongoing process, rather than a finished product. Often personnel will dictate what structures work best, and personnel change over time. Technology has its own impacts, and Simon even in 1947 saw that computers would have significant effects on the workplace. Part of trial is error, and wise managers will accept this as part of the process. The trick is being humble enough to admit mistakes and being flexible enough to try different approaches with more promise.

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Randall G. Holcombe – Political Capitalism: How Political Influence Is Made and Maintained

Randall G. Holcombe – Political Capitalism: How Political Influence Is Made and Maintained

Excellent, though probably a difficult read for a layman. Most people have a two-axis view of politics—most countries are some blend of capitalism and socialism. Holcombe argues that there is a distinct third system, which he calls political capitalism. It has characteristics of market capitalism, such as private property and usually democratic political institutions. But political capitalism also features heavy control by elites. Because votes count for very little in any decent-sized election and because voters typically have low information, it is naturally easier for elites to control public policies with relatively little public accountability.

An underappreciated key point, first made by Mancur Olson, is that small groups have lower transaction costs than larger groups. A small group is easier to form, and it is easier to monitor members so they don’t shirk on the rest of the group.

Another point is that principled legislators have almost no chance of being influential under political capitalism. If a politician is known for sticking to their principles, other legislators will not bother trying to win their vote on bills. If they support a bill, they’ll vote for it no matter what. If they oppose it, their support cannot be bought, so it’s not worth spending resources on.

That means principled legislators aren’t offered choice committee assignments, fundraising assistance, or get introduced to powerful social connections. Principled legislators are doomed to ineffectiveness.

It is well known that political office naturally attracts certain undesirable personality types. Holcombe demonstrates that institutional structures actually reward them, so there is a natural selection process to put the worst on top.

Holcombe also makes several valuable contributions to the theory of rent-seeking. I wish I had known about these when Fred Smith and I were working on our 2015 rent-seeking paper, which would have greatly benefited from his insights. I will definitely be citing this book in the future.

Gabriel García Márquez on Partisanship

Times and places change, but much else stays the same. From pp. 241-242 of Gabriel García Márquez’s 1967 novel One Hundred Years of Solitude:

“The only difference today between Liberals and Conservatives is that Liberals go to mass at five o’clock and Conservatives at eight.”

Addressing the Gender Pay Gap: Culture, Not Legislation

A recent Washington Times article quotes me on Democratic presidential candidate Sen. Kamala Harris’s plan to address the gender pay gap. I could have given better quotes, frankly, but it’s difficult to treat a complicated issue with nuance in a couple of short sentences. Conservatives and progressives both make some good points, but ultimately fall short of addressing the issue constructively:

  1. Conservatives often downplay gender discrimination or deny that it is a problem. This is wrong.
  2. Progressives are right that discrimination is a problem, but with the pay gap, they are prioritizing the wrong facet of the problem.
  3. There is a culture gap, far more than a pay gap. Most politicians put the pay gap at 77 or 79 cents on the dollar. One ideologically motivated study puts it at 49 cents. These figures do not account for the fact that women are more likely than men to work part time or not at all for extended periods to provide child care or other family needs. Men who do the same thing are subject to a similar wage lag. In another comparison, Bureau of Labor Statistics data show a wage gap of six cents for women who have never married—which says more about cultural gender norms than about different pay for equal work. Men and women also often cluster in different occupations, which have different pay. Occupations such as kindergarten teachers and construction have heavy gender disparities, as well as different pay—often in men’s favor. Again, the causes for this are often cultural, not due to different pay for equal work. The pay gap is almost certainly not a myth, but it is almost certainly a smaller problem than many people believe.
  4. Focusing so intently on the pay gap has an opportunity cost: More important gender discrimination issues are being crowded out from popular attention. In the workplace, these issues are as serious as rape and sexual harassment. They also include cultural pressures against women making their own life choices. Different people have different preferences on working vs. staying home. Many people on both sides of the culture wars still don’t respect that. Gender discrimination also includes everyday rudeness, such as men being more likely to interrupt women in conversation, taking their ideas less seriously, or judging them on appearance and demeanor rather than merit. The list is long, and the combined effects are large.
  5. One reason for the undue attention to the pay gap is that wages are easy to measure, while “soft” discrimination is often difficult or impossible to measure. It’s an example of what economist Jerry Z. Muller calls The Tyranny of Metrics. People tend to focus on what they can measure, and ignore what they can’t.
  6. Not only is attention being focused on the wrong issue, but many progressives are only offering one tool, poorly chosen: legislation.
  7. Pay gap legislation is prone to unintended consequences, such as businesses hiring fewer women. This is not what anyone intends. But it would be the easiest way for a company to avoid compliance headaches, potential lawsuits, or as in Sen. Harris’s proposal, a tax increase. This easily predictable effect works against everyone’s shared goal.
  8. Addressing gender discrimination requires cultural change from the bottom up, not top-down legislation. Politicians’ limited vocabulary is hurting progress on a real problem.
  9. Convincing millions of  individuals over time to be more thoughtful to others is a slow, uneven process. It will also likely never end; civilization is not humankind’s natural state.
  10. The cultural change argument is aesthetically unsatisfying. It can’t be planned, controlled, or quantified, even when possible improvements are clear as day, as with gender discrimination. It is a long-term process, not a short-term result. Advocating for cultural progress just looks flat compared to more immediate offerings such as taxes, fines, or quotas.
  11. Emotionally, it is much more fulfilling to hear a fast, simple, and concrete solution at a candidate’s press conference. It gives people something tangible with a face and a name they can rally around. This is in tune with how the human brain works. It gives us an in-group to affirm and an out-group to vilify. A story with a hero and a villain makes for a more interesting story than personal reflection.
  12. In addition to the endorphin rush it provides, signaling support of a bill is far less work than a lifelong effort to treat people well.
  13. The measurement problem, the cultural change argument’s lack of charisma compared to magic bullet legislation, the abstract nature of culture, the difficulty for ongoing individual effort, our own brain chemistry, and the long-term nature of change all contribute to why people’s everyday cultural values aren’t discussed as much as they could be.
  14. Astute readers might notice that economic historian Deirdre McCloskey says similar things about cultural change and the origins of modern mass prosperity, which extends beyond one’s bank account to include the arts, life expectancy, political inclusion, technology, travel, family life, and more. Caring about gender discrimination and fighting against it is another important aspect of the larger classical liberal project.
  15. Gender discrimination is a complex problem with a complex solution. But then, Rome wasn’t built in a day.

Juan Reinaldo Sanchez with Axel Gyldén – The Double Life of Fidel Castro: My 17 Years as Personal Bodyguard to El Lider Maximo

Juan Reinaldo Sanchez with Axel Gyldén – The Double Life of Fidel Castro: My 17 Years as Personal Bodyguard to El Lider Maximo

Sanchez was Castro’s bodyguard for 26 years, and is now living out his old age in Florida. He saw a lot of things. The book contains plenty of juicy gossip, though from a well-placed source. But Sanchez also makes serious points about how power corrupts people, and the effect the Cuban Revolution has had on Cuba’s fortunes. He also gives insights into how the Cuban government works, what life is like for the elites versus commoners, how dissidents are treated, how the military is trained, and more. That is his real contribution, and it is a valuable one.

Republican Study Committee Releases 2020 Budget Proposal

Congress is supposed to pass an annual spending budget, though it rarely gets around to it. Instead, the government is usually funded through a mashup of individual appropriations bills, omnibus appropriations bills, and continuing resolutions. This makes government spending less transparent and less accountable. It also leaves the federal government vulnerable to shutdowns during political fights, which happened in January of this year.

Fortunately, the Republican Study Committee (RSC) has just issued a proposed budget. It is likely the only budget that will be introduced in Congress this year, though unlikely to pass a Democratic House. As with any issue-spanning document, one can quibble with its contents regardless of political persuasion. Still, the RSC deserves a great deal of credit for at least putting something out there.

Other parts of the GOP should also issue their own proposed budgets; unlike The Highlander, there can be more than one. Across the aisle, a Democratic budget(s) would face similar obstacles in a Republican Senate and White House. They still should release their own budgets to make their policy priorities more concrete.

The whole RSC FY 2020 Budget is here. The document cites CEI sources on a variety of issues:

  • Regulatory Reform. The budget gives an entire chapter to regulatory reform, beginning on page 17, and cites Wayne Crews’s Ten Thousand Commandments annual report—the 2019 edition of which will be released soon.
  • Energy and Environment. The budget’s recommendations for increasing North American energy production draw on the energy and environment chapter in CEI’s Agenda for the 116th Congress.
  • Export-Import Bank. On page 25, the budget would abolish the Export-Import Bank, citing my paper “Ten Reasons to Abolish the Export-Import Bank.” Ex-Im’s charter expires this September 30, and will close if Congress declines to reauthorize it.

Kudos to the RSC for putting out a tangible document that should serve as a starting point for debating federal priorities for the next fiscal year—and for attempting to fix a broken budget process. They also have excellent taste in finding sources for many of their ideas; interested readers can find more in CEI’s Free to Prosper: A Pro-Growth Agenda for the 116th Congress.

Amity Shlaes – Coolidge

Amity Shlaes – Coolidge

Presidents are often unremarkable people. They also often make for uninteresting biographies–Robert Caro’s series on Lyndon Johnson being a notable exception. Biographers also tend to glorify presidents who are in office during wars or economic disasters; most presidential rankings reliably improve when reversed. The best presidents are the ones who do little, and thus do little harm. They help quiet and stable times stay that way. They are also often forgotten—as, frankly, presidents should be. The executive branch has long been too powerful and too glorified.

That is precisely why Coolidge makes an interesting subject, and Shlaes does a good job with the material. Lyndon Johnson had a president’s typical bad qualities almost to the point of caricature; Coolidge’s quiet and calm make him come across as the anti-LBJ.  He almost comes across as though he did not want to be there. Yet he still willingly climbed the ladder: Massachusetts State Representative, Mayor, State Senator (and President of the State Senate), Lieutenant Governor, Governor, Vice President, and President. Pretensions to the contrary, he was a career politician. Part of his reputation comes from the fact that he first became President accidentally, when President Warren G. Harding died unexpectedly in 1923. Coolidge ran for and won his own full term on purpose, though he declined to run for a second.

That contradiction–that “I don’t want to be here, but I made it my life’s work to be here”–is a source of unresolved tension. Coolidge is a bit of a sphinx, and not necessarily in the Silent Cal way he was remembered. Shlaes’ biography focuses more on politics than personality, which suits her subject’s personality. But it would have benefited from more analysis of this part of Coolidge’s character.

Coolidge was also surprisingly tech-savvy. Shlaes notes that not only was Coolidge the first president to give a public address on radio, it was not a one-time experiment. He gave more than 500 radio speeches during his presidency, or roughly two per week, which is quite loquacious for a man nicknamed Silent Cal.

Coolidge was also not the free-market hero some libertarians have made him out to be in recent years. Shlaes is quite plain about this, yet has been accused of writing a free-market hagiography. This made me reluctant to pick up her book, and I’m glad I was not ultimately dissuaded. Coolidge, despite his penny-pinching reputation, did not shrink the federal government. It merely grew more slowly under his watch than under Woodrow Wilson or Herbert Hoover’s. If Coolidge was laissez-faire, it was in comparative terms, not absolute terms. He was also no free trader. He used powers granted him under the 1922 Fordney-McCumber tariff bill, which passed when he was vice president, to raise trade barriers. In proportional terms, Fordney-McCumber was an even larger tariff increase than the more famous 1930 Smoot-Hawley tariff.

To Coolidge’s credit, he was progressive on racial issues by the standard of his time, intentionally declining to nominate known Ku Klux Klan members to any position in his government. Though Coolidge was not particularly vocal on racial issues, that was seen as a deliberate statement at the time.

Coolidge also gave his activist Commerce Secretary, Herbert Hoover, a long enough leash to enact a host of interventionist measures. These presaged Hoover’s doubling of real federal spending, one-third money supply contraction (and accompanying rapid deflation), and Smoot-Hawley that would follow when Hoover succeeded Coolidge.

Outside of politics, Coolidge seems to have been a decent man. This is also rare among presidents. He was a loyal husband, and did not mix very well with the philandering Harding. He was also a caring father, and he lost a son, age 11, while in office. The boy cut himself while playing outside on the White House grounds and the resulting infection, easily curable today with penicillin, was mortal. Coolidge mourned deeply, well beyond what the stoic standards of the time allowed. He never seemed quite the same after the loss. The happiest moment of his presidency seems to have been a family vacation he took out West, far removed from day-to-day affairs. His retirement was similarly slow-paced, though rather lucrative, with several board memberships and a weekly column paying for an upscale home. He would live there until his 1933 death, four years after leaving office.