Showing posts with label Tyler Cowen. Show all posts
Showing posts with label Tyler Cowen. Show all posts

Saturday, 30 August 2025

Tyler Cowen vs Rebecca Lowe on positive freedom

 Free means the opposite of Slave just as tall means the opposite of short. In a recent podcast, Tyler Cowan comments on the 'bimodal nature of the distribution of how people talk about freedom'. Equally there is a bimodal distribution of how people talk about height and weight and other observables which carry a normative charge. Nobody likes being called a short, fat, slave. Nevertheless, there is an underlying continuum. 

The philosopher, Rebecca Lowe, asks if countries are the kind of things which can be free. The answer is yes. If the leaders can be easily removed and their powers are strictly limited and subject to judicial scrutiny, the country is free. True, there may be exigent circumstances limiting current freedom but the expectation is that this is a temporary state of affairs. 

Cowen replies that 'no one really has a very clear definition of freedom.

They can have clear definitions of types of freedom- e.g. freedom of expression or economic freedom. These are Hohfeldian immunities which, however, are defeasible. One may certainly look at the trade off between restrictions on such immunities and their cost and benefit.  

 But if so many good things are bunched together so tightly that the distribution of countries as free or not free is so bimodal, it may mean we don't need a fully tight definition.

That 'bunching' may be due to Tardean mimetic effects or else arise by 'convergent evolution'. If so, definitions may be useful for improving mechanism design. 

We can simply look around and try to build up the elements of the bundle, which will have these other good effects like prosperity, right? Maybe greater opportunity, better aesthetics in some cases, other philosophic values, and that takes a bit of the pressure off freedom to carry the whole water.

Contracts are about giving up Hohfeldian entitlements or immunities for consideration. The 'Social Contract' as a contract of adhesion can certainly be evaluated in terms of Costs and Benefits. However, it is an incomplete contract. We are having to guess at future states of the world. Provided there is free entry and exit, there will be something like 'Tiebout sorting'- i.e. people move to jurisdictions with the fiscal mix that most appeals to them. 

The most important element of freedom to me is what George Stigler called positive freedom,

i.e. an expanded choice menu. It is 'positive' in that people would pay money to have access to that menu- e.g. paying a fee to Costco so as to be able to shop at Costco prices.  

which he associated a little too quickly with wealth, but I think it's closely connected to wealth. And it's simply what opportunities do you have with your life and also in terms of purchasing power?

If, ceteris paribus, people are willing to pay to relocate to a jurisdiction where they have a bigger choice menu, then a capital value can be placed on the increment in freedom available there.  


Now, negative freedom also matters.

absence of coercive constraint 

But I think in a pinch, people prefer positive freedom. And most definitions of negative freedom, in fact, turn out to be parasitic on other understandings of positive freedom and what really matters in terms of consequences.

Rebecca mentions Gerald MacCullum's  'triadic relation', in which "x is (is not) free from y to do (not do, become, not become) z'. Thus I am free from you when it comes to my murdering the Post Man. This is because you live far away. Sadly, I am not free from the Police and thus have decided not to murder anyone today. Speaking generally, there is no 'triadic relation' involving some named third party. One's immunities and entitlements arise under a vinculum juris binding on everyone. 

Tyler responds thus- But I bet if you sat down, you could come up with 57 different kinds of freedom that are relevant. Look at Amartya Sen’s Paretian liberal paradox. Well, what would you choose if the choice affected only you? For him, that's a significant part of liberty. I think it's an insignificant part, but if he insists on putting it on his list, okay, it can go on the list.

A Paretian liberal would recommend a Coasian solution. Prude can pay Lewd not to read Lady Chatterly or vice versa. Like 'triadic relation', Sen's contribution is worthless. You can get rid of all 57 philosophical kinds of freedom and just stick with the choice menu. One may say that for prudential reasons, some sacrifices (i.e. choices with an opportunity cost) have to be made to ensure that the existing menu remains available. Consider the UK and France in the inter-war period. Had they known Hitler could endanger their freedom, they'd have happily spent much more on Defence. 

REBECCA

So I think, to my mind, one of the things that the Sen paradox shows is that you can't just reduce freedom down to preference satisfaction.

Because of Knightian Uncertainty, expected utility maximization is wrong. You should go for 'regret minimization'. This is the prudential aspect I mentioned previously. 'Guns vs Butter' was a crude utilitarian but wholly misleading and mischievous trade-off. It turned out that the guys with the guns could come and take all your butter. You need guns to keep your butter.  

And I think even framing it in terms of ‘it's bad if you don't want to listen to the Benjamin Britten song that I propose that you listen to because I think you’d get value from it’.

That's informative. Regret minimization may cause you to listen to the song just in case you are missing out. If it is horrible, you gain new information- viz. the guy who made the recommendation was either pranking you or is a some sort of snobbish shithead. You give him a wide berth in future.  

I feel like this again is just reducing freedom to something too thin. Is that fair?

Either 'freedom' has a well defined extension- e.g. a choice menu- or it is subjective and perhaps ineffable. One may say 'the day I truly felt free was when I was riding a camel in the Gobi desert'. If asked to explain why this was, the reply may be 'I can't put it into words. All I can say was that the feeling of freedom was sublime.' 

Rebecca thinks Sen is

getting at something like what's important is you deliberate on your choice.

Deliberating on anything Sen says will soon convince you he is a waste of time.  

What's important isn't just that you're allowed to go along with what your base preference is in some first-order sense. It's that you have to have the freedom, the right even, which is the other kind of horn of the paradox, in order to be able to determine how you live your life, even if it doesn't match what your preferences are.

Why stop there? Why not say it is important to have the freedom to have the freedom to have the freedom to have the freedom, the right even, to go on deliberating without making any choice whatsoever because you have lost your job and have no fucking money?

Tyler- But that will typically collapse into positive freedom. So the sheer or mere right of deliberation, even very bad systems, would give you a lot of that. The Soviet Union, you could deliberate all you want. People there, I think, deliberated more often than Americans do. But at the end of the day, you couldn't choose the thing.

Sen and his best pal from Shantiniketan wrote a paper in the early Seventies where they explained that guys doing 'Project appraisal' had no fucking importance whatsoever. He who paid the piper called the tune. He might also pay a bit of money for an appraisal saying the tune was enchanting. If you said something different, you might not be offered another such gig.  

So I don't view the Paretian liberal paradox as being about deliberation at all.

It was silly. Still, in life, we find that storing up grievances or bizarre preferences of our own are a good way to checkmate boring cunts who want to gas on about Gaza or whatever. My technique is to start talking about racism in Ireland. Iyers have been expelled from the Emerald Isle by homosexual Maratha leprechauns like Leo Varadkar. The UN is refusing to take up the matter. It's coz I iz bleck- right?  

That might make it more interesting, but it's just about can we find a reason why we might object to what are in fact practical gains from trade?

Sen's generation of Bengali economists were against Trade. Sen ran away from India after trading in his wife for that of his best friend. Manmohan, who had studied Trade, remained faithful to his wife and to his country and eventually triumphed. Punjabis are like that only. 

And Sen being more or less anti-market is wanting to do that.

REBECCA So when you talk about positive freedom, I think maybe what you're talking about is something like an agent-focused framing of freedom.

Only time-wasters talk like that. Either agents are free, in which case anybody who tries to do 'framing' is just spinning his wheels, or they aren't free in which case they should focus on emigrating or bringing down the regime.  

So I think one of the problems with the kind of negative framings generally, so if we think about the classic, particularly on the kind of liberal/libertarian side, people might want to say something like freedom is non-interference, freedom is non-coercion. The republicans might say it's non-domination.

What value are they adding? None at all. Still, if you decide to study stupid shit, you will have to listen to stupid shit.  

One risk with these things is I think it avoids centring the person who it is who's doing the free thing, the person who has freedom, the agent. Is that fair?

It is deeply unfair that poor bleck peeps don't know how deeply unfair we think it is that we are so much their superior and they don't even know it because they think we are useless tossers.  

TYLER Yes. One way to think about it is let's say you can either be killed by a lightning bolt from the sky, which is not libertarian aggression against you, or you can be killed by a robber.

In both cases there are prudential 'regret minimizing' actions you can take. But there is also a collective action problem. There may be economies of scope and scale in solving it in that manner.  

Now, you might prefer to be killed by the lightning bolt because you couldn't say your rights were infringed. And if your rights were infringed, there's something extra bad about that. But at the end of the day, you're dead either way. And if you're too focused on that as truly the big deal, the constituent important part of freedom, I think you're just missing the boat about what people actually care about.


REBECCA I think this is right. I think libertarians who say, look, your freedom is only being infringed if your rights are being violated are missing the point.

Libertarians don't say that. They think the State has limited rights. Individuals don't. 

TYLER Right.

REBECCA But I also think there's a sense in which you think about, if you think about something as freedom as non-interference,

why do so? Either there is a Hohfeldian immunity or there isn't. This is a justiciable matter.  

then you could say, well, I don't know, the field isn't being interfered with. Or you could say the moon interferes with the tides of the sea.

People don't say that. The moon is inanimate. Gravity probably arises out of the 'positive geometry' of Space Time.  

This seems to me to be crazy in an ordinary sense: we don't talk about the sea being free or not free. It seems like you need some kind of agent, some kind of, I don’t want to go as far as to say person, but some kind of living thing that has this capacity. I think this is the advantage of an agent-focused conception of freedom.

It is not much of an advantage to have a conception which applies only to living things when, in fact, no one has ever denied this to be the case.  

TYLER I don't know. This talk is making me nervous. So maybe I think more in relational terms. So I don't agree with George Stigler and the purely consequentialist view that all that matters is wealth or opportunity.

But all that matters can be given a cash-value or depicted as a possible trajectory or 'world-line'.  

I think if, say, someone comes along and murders an innocent baby, to choose the simplest possible example, there's something wrong with that above and beyond the GDP impact or the suffering of the baby.

We may say the thing is repugnant. Economists know about repugnancy markets.  

There's something relational about treating the baby that way, that above and beyond the lost happiness is deeply wrong and bad.

What about a foetus? Is Tyler pro-life?  

REBECCA That's right. But we also, I mean, I don't think it makes sense to say freedom is the only element of the good anyway.

But nobody, except some useless philosophers, says anything of that sort. We get that some jurisdictions, at some times, can only be ruled if freedom is severely curtailed. The opportunity cost is what matters. The alternative to this curtailment is even less freedom- e.g. England's Defence of the Realm Act which curtailed freedom but which prevented Hilter conquering and enslaving the country.  

So just when we're thinking about is this a good or a bad thing, the idea that we're going to be able to determine that just in terms of whether freedom has been lost seems to me overly thin anyway.

It isn't 'thin'. It is a matter of detailed calculation. Was France right to surrender to Hitler? Yes. It took far less casualties than in the First War and bounced back quicker.  The Brit policy of relying on the Air Force wasn't too shabby. Again, the UK took far fewer casualties- though more than the cheese eating surrender monkeys.

TYLER Yeah, I agree.

REBECCA So I guess there's two criticisms here. One is, is freedom just about rights?

Rights without remedies are meaningless. Freedom is about choices directly linked to outcomes.  

And the other is, is the good just about freedom, even if the conception of freedom goes beyond rights.

It can be. But many feel 'the good' has something to do with God.  

TYLER But practically speaking, I think Stigler's approach, looking at positive liberty and wealth, it gives you the right answer in virtually all cases. Done as a rule at the societal level.

REBECCA That's right. So I think in a descriptive sense, you might want to say something like, if we're considering whether country X is freer than country Y, you want to think about things like opportunity. This seems to me to make sense.

if Norwegians spend good money to emigrate to Switzerland, we can put a cash value on the greater economic freedom they get there. In some other respect- e.g. sexual freedom if they move to Dubai- they may lose out. Again, a cash value can be given to this. 

The question for me, the deeper question is, why do we care about opportunity?

Because it is linked to productivity which is linked to prosperity and national security.  

We don't just care about it in terms of, hey, counting up GDP.

Forecasts of GDP trends can look at how the configuration space changes as opportunities of various kinds increase or decrease.  

We care about it because the kinds of creatures who are in that society are the kinds of creatures that have the capacity to be free.

Hens are the kinds of creatures which have the capacity to be free. We prefer it if they are kept in coops and lay eggs for us to eat.  

Is that fair?

It is silly.  

Like, why does it matter? Who does freedom matter to? Freedom doesn't matter to the sea. Does freedom matter to your dog?

It matters to a wolf. As for your dog, it doesn't want to be kept chained up all day. It wants to be taken walkies. So do I. Sadly, nobody is willing to pick up my poop.  Is it coz I iz bleck?

Does freedom matter to you? There's clearly a sense in which it makes sense to talk about you as free. I think there's a sense in which to talk about your dog as free, at least if you compare your dog with a little electronic dog. But talking about the sea as free doesn't make sense.

It is poetic. My beloved is in America. The sea is free to go and meet her. I am not because nobody takes me walkies and scoops up my poop.  

Talking about Belgium as free only really matters if

we are thinking of relocating there. It is classed as 'moderately free' in Economic terms. But financial and monetary freedom is higher than average.  

we're talking about what are the conditions that conduce within Belgium for the kinds of things for which freedom matters.

This is well studied by people who advise companies on where to relocate.  

TYLER  Sure, the Belgians will be happier with a fair degree of freedom.

Maybe not for Islamists.  

REBECCA But again, happier. Is it just about happiness? No, I think we've already addressed that.

It's about entry and exit. If smart people are running away that's bad. If rapists and terrorists are running away people feel very happy.  

TYLER No, but that's the single biggest and most important component is human well-being, that people flourish…

It really isn't.  Survival is what matters. After that the question is whether your progeny will multiply faster than the other guys progeny. 

REBECCA But the risk then is that...


TYLER… and then sustainability. So free societies appear to be pretty good at defending themselves against their enemies.

If they have nukes. Ukraine gave them up. Look at it now.  

And that's critical. So you need enough wealth and GDP to buy defence and have alliances. And that's going to trump most other considerations, because if you're enslaved by someone else, it's just the end of the line and the debate, so to speak, is over.

REBECCA So one of the objections, the republicans, these people who want to see freedom broadly as non-domination…

Nothing wrong with a bit of S&M between consenting adults and one really promiscuous chicken.  

TYLER
You mean the philosophical republicans...
REBECCA Yeah, I mean, that's right, the people like Tim Sellers, and Philip Pettit, Quentin Skinner. These people want to see that the notion of freedom that's operative or should be operative within the society is the idea of non-domination. So this is going further than non-interference. It's saying something like a lack of arbitrary interference.

It can be taken further to mean that Neo-Liberalism and the Cash Nexus and Gender dimorphism and the invidious distinction Society makes between human babies and my cat baby should all be overthrown. Otherwise, nobody is really free. Also, why is the Government not putting LSD in tap water? 

And one objection they would have to the non-interference idea is something like, you've got the slave and the slave master, and the slave master seems terribly benevolent. Maybe the slave has all of the opportunities they want. Maybe they live a happy life in the sense of gaining access to the goods and services that they want. Maybe they can get married, all of these things.

Sadly, even the most Islamic states have now abolished slavery- at least on paper. 

But the republican objection is: any day now, the slave master could just on a whim, because they're having a bad day, impose some arbitrary restriction on the slave. One thing you could take from this objection is the suggestion that it's not just about how good your life looks. It's also about the power you have to determine stuff for yourself.

It is prudent not to become a slave just in case you get 'sold down the river'. 

TYLER It's too loose a concept.

It is the first step to psychosis.  

I also would point out it cannot handle what you might call children's rights at all, and especially in earlier societies where life expectancy is not long, being a child is a significant chunk of your life. Arguably, it's the most important part of your life. There's no way to avoid the sense that in some significant regards, children are dominated. You don't have to believe in hitting them or even spanking them.

Students are dominated as are folk who listen to their confessor or Rabbi. Soldiers are dominated. So are employees in most firms. So what? 

But at the end of the day, their parents tell them what to do and discipline them and bring them up and sort of induce or force certain views on them.

Kids can sue for emancipation. In some countries, they have all sorts of channels of legal redress.  

And that's inevitable. You could even say it's desirable. Maybe today we don't even do enough of it. And if you start with non-domination as fundamental, I just think you hit a huge mess. And a very important question.

REBECCA I generally think that the children objections aren't as strong as people think they are. Largely because you can just deal with it by saying, look, a child isn't yet a fully reasoning creature.

Nor are people who teach Philosophy. So what? Most of us are as stupid as shit. We outsource important decisions.  

A child isn't yet the kind of creature that's capable of all of the things that we think, therefore, they should be treated as a free individual in themselves.

No one is as yet.  That's a good reason to 'let go & let God'. 

TYLER I think they're incredibly smart. And none of us or few of us are willing to take the reductio that therefore say people with Down syndrome are not fully reasoning or have fewer rights. So we're pulling things out of a hat that we don't really need.

Nothing wrong with protecting people with diminished capacity. That may be our own fate soon enough.  

REBECCA I totally agree. But I think you can deal with those problems by saying the person with Down syndrome, you can even go as far as to say the person in the coma, has rights qua being the kind of thing that has these capacities, whether they're just kind of potentially held.

Humans have certain Hohfeldian immunities and entitlements. The question is whether an effective remedy will be provided under a vinculum juris. This raises the question of incentive compatibility if the obligation holder is a private entity and of fiscal headroom if the obligation holder is the State. It is likely that, at the margin, the benefit will be rationed.  

If you separate out the capacity from the exercise of the thing,

you can also separate out the capacity to have the capacity and so on. Sen's approach sucks ass big time.  

which is one way I think you can get into thinking about what freedom means in terms of having freedom, as opposed to doing things freely or being free.

We have already done so by saying positive freedom is a menu of choice.

So if you separate out the noun from the adjective or the adverb. Then you can deal with these objections by saying, look, the person in the coma is still a person.

as is the person who isn't in a coma.  

A person, with these capacities.

People who are not in a coma have the capacity to not give a fart for those who are in a coma.  

And that's why you need to respect their rights.

I don't need to respect shit.  

The risk...

is that if we stop respecting the rights of people in a coma, we may absentmindedly eat them. What if Bleck peeps are disproportionately at risk of being eaten because there is a higher probability of their being eaten. Then, we'd not just be cannibals- we would be racist cannibals!  It is to avoid this terrible fate that it is worth doing a PhD in stupid shite. 

TYLER The word qua makes me nervous there. [Laughter.] I think I prefer the Straussian view that we're not sure what are the rights of people in comas, especially if they're probably never going to come out. But for slippery slope reasons, and because we want these strict lines around human life as a value, we're going to treat it that way. Though deep down, we're really pretty uncertain about the finally correct philosophic answer. That's how I would handle people in comas.

People who get paid to handle such people, handle such people. We don't.  Canada leads the world in euthanasia. Maybe they are onto something. 

The word qua, you're getting into metaphysics.

or jurisprudence. Qua links to an identity class.  

You're not going to win that battle. And then there's plenty of other intermediate cases. Like try considering abortion. It's a very tough issue. You inject the word qua into an abortion debate, you're not going to get anywhere.

REBECCA Every time I say qua, Tyler, from now on in the rest of our lives, and as you know I think we're going to live forever, please just assume I'm meaning as, or in the state of, or something like that.

TYLER But there's a reason why you pick the word qua. And this Aristotelian sense of these hidden potentialities that maybe, in no feasible universe can be realised, but you still want to invoke them. I'm probably opposed to that, but at the very least, it makes me too nervous to want to embrace it.

Yet Courts and Policy makers have to deal with identity classes which in turn determine entitlements or immunities.  

REBECCA Okay, so if you just take a really simple approach in which you compare the person in the coma with the rock, there's a sense in which the person in the coma is much closer to the person outside of the coma than the rock.

The coma patient may have family or friends or may belong to a particular community. I hear that life support has been turned off for a fat Tamil man. I don't like it because I am a fat Tamil man. Is Society discriminating against the likes of me? Fuck you Society! Fuck you very much! Then I learn that the fat Tamil man is that cousin of mine who refused to invite to his birthday party. I think 'good riddance to bad rubbish. Still, I should call. His widow might be hot?'  

What are the qualities that these two things share? One way of approaching it is that they are the kind of thing that has these capacities, whether or not they exercise them.

This particular rock has the capacity to cause a horrible Dictator to trip and fall and break his neck. We must protect and cherish this rock. That cousin of mine in a coma should be sent straight to the crematorium.  

So a human being is the kind of distinct thing, like ontologically, that has these capacities.

Nobody knows their own capabilities let alone those of other people or rocks or trees or whatever.  

TYLER That’s so Aristotelian, come on. [Laughter.]

Aristotle was incredibly stupid. Still, he was Alexander the Great's tutor.  

REBECCA What's wrong with that? Isn't Aristotle the greatest thinker of all time?

No. He was a pedant who taught useless shit.  

TYLER I'm more or less a nominalist. So the rock is an extreme example. But if you compare the human in a coma to a non-human animal, probably the non-human animal does better.

If its your granny in the coma you don't want life-support to be turned off ever. It is so comforting to visit her. The whole family has come together as never before.  

But we do not completely protect their rights, or try to police nature, or promise never to take away their homes by building our homes and so on.

We don't completely protect any rights whatsoever. This is because obligations are defeasible. If the State has no money it reneges on its obligations. Since it has sovereign immunity, nothing can be done about it.  

So I think you'll find other examples that will defeat that attempt at a counter.


REBECCA That's right, but if we're really strict in separating out the kind of definitional work,

lawyers have done this well enough. Currently, US courts recognize that a hippopotamus can be an 'interested person'. Sadly, they still haven't achieved legal 'personhood'. 

working out what kind of thing the human is, what kind of thing the dog is, what kind of thing the rock is, that seems to me a good starting point to thinking…

in a utterly useless fashion. It is a different matter that studying dogs may enable better techniques of dog rearing such that both the dog and the family get more out of the relationship.  

TYLER There's just more Aristotelianism. I think one has to accept the fact, especially as biosciences advance and there's more genetic manipulation, more human evolution, different branches of people may change in different ways, there’s people with disabilities, we just need to accept some of these fine lines aren't there.

Structural Causal Models of rocks or dogs may be very useful. Philosophers can add no value.  

Then we need to decide where do we need to draw them. I would be pretty strict with that, because I worry about the actual logic and dynamic of coercive power as I observe it in the real world. But I don't want to rely on Aristotle there. I want to cite public choice theory for these strict lines.

Sadly, it is 'anything goes'.  

REBECCA OK, so let's take a step back. What kinds of things does freedom matter for then? You don't want to divide things up neatly into humans and dogs and rocks. Can we say something, though, like there are certain kinds of things in the world that it doesn't mean anything to say that freedom matters for those things?

No. Anything at all can be meaningful to some person. I see a rock. I feel it should be free to fly through the air and hit you on the head. Thus, it will have fulfilled God's plan and get a better reincarnation.  

TYLER Freedom for rocks does not matter. Agree.

I throw a rock at Tyler. He catches it. It turns out to be a pure gold nugget. I want it back. He says the rock exercised its freedom to fly through the air and land in his hand. It should be free to depart with its destined owner. That's a case where the freedom of a rock would matter greatly to Tyler. 

REBECCA Why is that?

TYLER What's a rock? It's a rock, right?

If it is a rock which is 90 percent gold and is worth 10,000 dollars it is more than a rock.  

Until we learn more about rocks, there are a few panpsychics running around out there, but they haven't persuaded me. And in the meantime, you can just kick a rock.

REBECCA Why can you kick a rock? It seems to me like...
TYLER Isn't that how they refuted Bishop Berkeley? [Laughter.] I refute him thus and he kicked the stone. It's fine to kick the stone.

REBECCA Why is it fine to kick the stone, and not to kick the person in the coma or not to kick the baby or not to kick the dog?

It is fine to do so if you are a solipsist. The trouble is you may get beaten or bitten.  

I think pretty quickly we're going to get onto something like it's living,

No. If kicking living humans is wrong, kick-boxing would be banned.  

and then we're going to want to make some kinds of distinctions like having intentions or being conscious.

No. Intentions or consciousness may mitigate the wrong. But what is wrong remains wrong. Why? The law says so or Society has a norm in this respect.  

Even you accept we're conscious, right?

TYLER Right. Sure. Even I, except we're barely conscious, but we are a little bit. There might be some arguments in the biodiversity direction, but with the environment, where kicking the stone can be this big mistake. I'm still not persuaded of them, but I wouldn't rule them out entirely. I could imagine, you know, three years from now, maybe I'm persuaded by them. But that would still be viewing the rock in terms of some larger ecosystem. And the rock per se is not carrying the value.

It is if it contains gold or diamonds.  


REBECCA Just one more attempt, though, at thinking about the kinds of things that can have freedom. Can a non-conscious thing be free?

Yes. Researchers can take a bacteriophage out of the wild and reduce its functionality till it becomes a Speigelman's monster which would die if were free.  

Does it mean something? If you compare your dog with the electronic dog, the little battery-operated dog running about, you might want to say something like, if nobody's constraining it, if nobody's interfering with the direction it runs in, you might want to say it's free. This seems to me crazy.

It isn't. Depending on the sort of computer chip it has, its 'free' behaviour conveys information.  

REBECCA I still think there's a sense in which if we aren't the agents of change, if we aren't capable

then maybe we are women and have to sit down to pee. Also, we are probably being dominated and are being brainwashed into thinking cat babies aren't just as good as human babies.  

… I mean, you started by talking about positive freedom. So one reason people might care about positive freedom is they say, look, it's just not enough for there not to be barriers in the sense of interference or coercion or domination. You have to be able to control what you're doing for yourself.

Also, you should have a penis and not have to sit down to pee 

Whether that's in terms of project formation, whether that's in terms of having your own preferences that can be satisfied.

I didn't ask to be a woman. The world is totes unfair! 

This to me speaks of being an agent in the sense of having some kind of capacity,

like peeing standing up 

some kind of control, at the extreme some kind of power to determine things.

Call no man free till he is POTUS. Call no POTUS free till every country does what he wants. Also, POTUS should be allowed to tell Death to fuck off. 

How do you have… Why does this positive sense of freedom matter if you think that the kind of thing that has it isn't something that can cause stuff?

Both free and unfree, animate and inanimate, things can cause stuff. The question is what is the 'efficient cause' of the thing? I didn't make my computer. But I was part of the demand curve for it and in that sense am the efficient cause. But what a paltry sense that is! The chain of causation in human affairs may be well enough uncovered for a judicial or commercial purpose but it eludes itself in the process. 

REBECCA But what does it mean to choose if choice doesn't mean, if you don't have open choice in the sense that you could have gone for the other option, what does it mean to…

It means ontological dysphoria- you are not at home in the world as it presents itself to you. Do the 'Eat, Pray, Love' thing. There may be somewhere else, this side of the grave, where you do feel at home.  

TYLER You're part of the causal chain.

oikeiosis is related to feeling at home in the world. Where it breaks down, there is ontological dysphoria.  

But say if you live in the United States, there's 30 brands of ketchup on the shelf. And if you were back in old school communist China, there wasn't ketchup at all. And that's a big difference. And it really matters to people.

REBECCA But does it matter at the level of you choosing?

Nothing wrong with doing 'discovery'. Try something new. You might like it.  

That's the question. It's not, are you going to have the better life? It's not, are you passively going to be the recipient of the better life…

being passive is bad. Girls should be on top.  


REBECCA You could imagine a kind of zombie society,

apparently there is a type of psychosis where the patient believes everybody else has become a robot 

though, where people go around having what seem like more options, having what seems like better access to the bundle of goods, but without having any kind of these other concepts you're talking about, like choosing. Is that fair?

It is very unfair. I used to try to explain to Amartya Sen that it was very  unfair that he was forced to devour nothing but dog turds as had been proved by Arrow's theorem. Sen denied he was a Bengali economist. He pretended to be a Punjabi lady. That was very unfair of him. I think it's coz iz bleck. 



Sunday, 16 July 2023

Tyler Cowen wrong on Externalities

Externalities are benefits received or damages inflicted outside the market.  They exist even if no market exists. There may be a legal framework or customary conflict resolution mechanism such that 'torts'- i.e. harmful actions by another- or benefits received from another but not properly reciprocated- give rise to some sort of sanction or mandatory transfer of assets. 

Equally, when exchanges occur on the basis of presumed reciprocity or equity, one party who feels aggrieved that the other gained much more benefit may be able to gain compensation. Since, in Life, most 'contracts'- other than open market transactions- are 'incomplete', even the stupidest Economist now understands that 'relationships'- which is what you actually end up having with those you only wanted sexual relations with- are what actually binds our Lebenswelts together such that such a thing as Society exists.

Open markets- i.e. one's where no one has 'market power'; everybody is a 'price taker'- are situations where you can't complain that the seller gained more than you, the buyer, because the seller could have been anybody and the buyer could have been anybody. There is no real 'relationship'. There is only a transaction. But, though 'transactions' have burgeoned- I buy and sell a lot of goods and services off the internet now whereas, though I was richer forty years ago, most of my significant transactions were relationship based. That's why I used to talk with a posh accent back then and took some little trouble not to look like a big fat loser of a slob.

Tyler Cowen doesn't get this- essentially 'Old World' Oikumene aspect of the notion of externality. This is because, as Ronald Coase pointed out, Americans also don't understand the global nature of the concept of opportunity cost.

Thus Cowen writes-

Externalities occur when one person's actions affect another person's well-being and the relevant costs and benefits are not reflected in market prices.

Relevant costs and benefits are never reflected in market prices because Knightian Uncertainty is pervasive. If it weren't, we would never have evolved into Language speakers. An Arrow Debreu world is one where all possible future states of the world are known and agents are either in a Leibnizian Occasionalist monads synchronised  in a pre-established harmony, or else the elementary particles of the ultimate Grand Unified Theory whose 'atomic propositions' have the property of 'carving up the world along its joints'.

This is Theology. Americans may be better Christians, or Taoists, or Hindus than yours truly, but they don't get that a non-dissipative Economia- or Artha Shastra- must concern itself exclusively with what is Secular about Relationships- that is Society- not Theological or Teleological. 

A positive externality arises when my neighbors benefit from my cleaning up my yard.

This may be reflected in market prices if there are restrictive covenants or else well enforced local by-laws. People may pay more to live in such areas. 

If I cannot charge them for these benefits,

They may be entitled to them. That is a justiciable matter. The law may say that your neighbour has a legal right to enjoying a salubrious neighbourhood. Your backyard is not salubrious. The Court forces you to clean it up. Suppose your neighbour does not bother to complain about your dirty backyard. Then you have a situation analogous to petty theft. The neighbour has been deprived of something illegally but can't be bothered to go to law over the matter.

Contract enforcement is a service which costs money. No externality is involved if you choose not to pay for that service. This is not an externality because if the cost of gaining redressal was low enough, people would avail of that service. 

I will not clean the yard as often as they would like.

It is a separate matter that other people may want me to change my behaviour but are unable to do so because I have a Hohfeldian immunity in that respect. But they can offer me money to do what they want me to do. There is no externality here.  

(Note that the free-rider problem and positive externalities are two sides of the same coin.)

Not if there are Hohfledian entitlements which are not being asserted because it is too costly to do so. In that case, there is no externality though there may be a case for finding ways to lower the cost involved.  

A negative externality arises when one person's actions harm another.

Not if that harm is done through the market. I am harmed if a guy who owns a dog moves in next door because I have a deathly fear of dogs. But the law permits him to own a dog. Indeed, most people like dogs and become friendly to the neighbour dogs or cats. This is a case of bad luck, not market failure. I suppose I could move to a place where no pets are allowed. There may be a premium on such properties.  

When polluting, factory owners may not consider the costs that pollution imposes on others.

Just as thieves may not consider the costs that theft imposes on the victims of robbery. Either you have bought the right to pollute- which may involve paying a premium or moving to a place which is already extremely shitty- or else what you are doing is analogous to theft.  

Policy debates usually focus on free-rider and externalities problems, which are considered more serious problems than nonrivalrous consumption.

This is because policy debates are stupid. Courts, as well as Legislatures, can create remedies and public policy can lower the cost of making those remedies cheaper and more accessible Sadly, such interventions may be counterproductive. 

The notion of externality becomes empty if any and every thing you don't like is described as a negative externality. The fact is, if a market for a remedy to the nuisance you are complaining of exists, then the problem is that its price is too high or your real income is too low, or you simply can't be arsed to get the remedy because you enjoy complaining about it. 

Consider the notion of a 'pecuniary externality' which is merely the Slutsky 'Income effect' of a price change. But if substitutability is high then this should not matter. If wheat becomes more expensive but potatoes remain at the same price, then people aren't really any worse off. Being flexible in these matters is itself a good thing. 

Cowen writes- 

Economists try to make a distinction between pecuniary externalities — changes in price which merely redistribute wealth

in the short term when demand is inelastic- sure. But medium to long-term, demand is elastic because substitutes become available or relatively attractive. So the 'economic rent' accruing to the producer vanishes. 

If people are changing their behaviour on the basis of price changes, that is actually a good thing. The question of the illicit use of market power, however, is a separate matter. 

— and non-pecuniary externalities, which involve a real good or service being provided or denied at the margin. If the price of wheat rises, wheat consumers suffer a pecuniary externality.

No. There is no external effect. There is merely an 'Income effect' which, however, disappears as people switch to potatoes or rice etc. They may come to prefer their new staple foodstuff.  

If you dump garbage on my lawn,

you have committed a crime. 

that's a non-pecuniary externality,

No. It is a crime. Similarly, if you are sodomized and decapitated by a maniac you have not suffered a non-pecuniary externality. You have been the victim of a horrible crime.  

although it may be accompanied by a pecuniary externality, namely a decline in the value of the house. In the meantime, the lawn stinks.

Which won't matter to you if your neighbour has sodomized and decapitated you.  


The distinction is often a tricky one, especially in the absence of perfect markets.

It is utterly foolish. 

A lot of the complaints about health care markets are actually complaints about pecuniary externalities, namely that some people get priced out of the market

No. These are complaints about market power more particularly where the marginal cost is low. Being priced out of a market doesn't matter if there is a good enough substitute. I might whine about not being able to attend the Opera, but watching it on TV is good enough for my purposes. 

. Alternatively, the risk of facing high prices for cancer treatment may

as opposed the risk of dying of cancer 

make people nervous and insecure. The notion of "risk"

relates to possible states of the world. 

often bundles together pecuniary and non-pecuniary externalities in a not-too-easy-to-separate form.

There is no externality here. Either cancer treatment is being provided by the market, in which case it is rationed by price; or, it is provided by the State, in which case it is rationed in some other way.  

Efficiency and distribution are not always possible to separate, no matter what the first and second welfare theorems seem to imply.

Pareto efficiency depends on information availability and the cost of transactions. The internet has increased the one and reduced the other. That's why I can sell stuff I no longer use and buy stuff some other guy half way around the world wants to get rid off. Distribution depends on mobility which determines elasticity. If you have perfect substitutes, nobody can extract rent from you. The message here is simple. Encourage things which 

1) improve information availablity

2) lower transactions costs 

3) increase elasticity of supply and demand thus eliminating 'rent extaction' or 'Marxian exploitation'. 

Babbling about 'externalities' is fine provided you are finding Coasian 'mechanism design' type solutions. But that's not what Cowen is doing. 


What about people near subsistence? Say you redistribute $500 from a poor Haitian

Try it, and she will kick your head in. Haitians threw out the French. They are not weak or cowardly. 

to a somewhat less poor Mexican, and the Haitian dies and the Mexican buys a used motorbike. Is that "just a transfer"?

No. It is theft. But the Haitians will track you down and kill you or, at the very least, set Baron Samedi on your trail.  

Or is it "a real resource loss"? I say it's the latter, but then virtually any redistribution will destroy some complementary value from the portfolio of the individual losing the money. What is then left to count as a pure transfer?

A pure transfer is the poor Haitian gratuitously sending money to the Mexican- perhaps for an altruistic reason.

There is also no such thing as a pure lump-sum transfer when population is endogenous, either through child-bearing decisions or through taking risks with one's life.

Nonsense! Anybody is welcome to make a pure lump-sum transfer to anybody else.  


The distinction between pecuniary and non-pecuniary externalities is useful,

only if you also like talking about your experience of being beaten and sodomized as a 'negative externality' you received.  

and hard to do without, but its foundations are shaky. In practical terms the weakness of the foundations matters most when we are doing health care economics or analyzing food subsidies (or comparable forms of aid) in poor countries.

In other words, this shite is only used by people paid a little money to say 'other-people's-money' is being appropriately wasted by some bunch of bureaucratic shitheads.  

The richer and healthier the people are, the more likely the distinction can be invoked without much trouble.

Because talking stupid shite doesn't affect rich, healthy, people. 


And Samson is correct to think that large numbers of transactions involve pecuniary externalities,

only if 'market power' exists. Where everybody is a 'price taker' there are no externalities though, in the short run, there may be 'income effects' because of low mobility/ elasticity. BTW a free-rider is, by definition, not a 'price taker'. Some additional mechanism may be needed to ensure that he is. Thus, a Cinema may employ people to check that customers have tickets. This stuff aint rocket science.  

at least whenever the particular actions of a buyer or seller influence market price.

In which case there is 'market power' and thus comes under the rubric of competition policy. The Coase Posner Law & Econ tradition can take account of external effects while a 'deontological'- i.e. rule based- competition policy may treat any instance of 'market power' as prima facie illegal. 

Friday, 14 July 2023

Tyler Cowen wrong on congestion charges

A NIMBY- i.e. one who says 'not in my backyard'- wants higher economic growth for the economy but doesn't want the negative 'external effects' associated with higher growth to show their ugly face in his own neighbourhood. This isn't irrational. It is an example of rational self-interest. 

If everybody is a NIMBY, then, in a large enough, democratic, market economy with good factor mobility, there will be something like 'Tiebout sorting'. Some areas will have a regulatory environment/local authority fiscal mix, and level of economic activity (this is called a 'Tiebout model') which appeals to wealthy enough, or non-materialistic enough, NIMBYs and everybody else puts up with growth in the hope of getting rich enough to retire to NIMBY-land. 

Tyler Cowan invites us to consider the case of the YIMBY- i.e.  someone who says 'Yes in my backyard! I want higher population density/ hostels for paroled paedophiles/Nuclear reactors etc. in my neighbourhood.' 

Such people don't exist. It is a different matter that we may trade off greater congestion or other nuisances in return for money or sex or some ideological or moral gratification.  But, ceteris paribus, everybody is NIMBY, not YIMBY just as everybody is for sending bad guys to jail unless that bad guy happens to be their own beloved son. 

Cowan writes on his blog- 

Ask a YIMBY person: “What about the extra traffic from all those new people moving in?

New people moving in, as opposed to commuting in, would reduce road congestion. Property taxes would rise as would revenues for Club Good providers which would mean more investment and thus quality improvement over the medium to long term. If people are moving out, rather than moving in, infrastructure provision is bound to decline sooner or later. 

Won’t the ambulance arrival times be slower?

They would be slower if more were passing through rather than moving in. It might be less if those moving in are more productive than average which means more ambulance crews paid for through higher property taxes.  

Won’t the air pollution be worse?

Not necessarily. Places which get richer by doing smarter things have the resources to improve air quality.  

Won’t….?” and you will get a reassuring answer that a) yes there will be some problems but they can be managed by other means,

a locality which is good at 'managing by other means' is one which will attract better quality migrants which means more tax revenue. 

and b) the external benefits of new arrivals will outweigh those problems.

A locality with some control over regulations and fiscal-mix is a Tiebout model. People moving in are buying a set of services from the Local Authority. Thus, no Cost or Benefit is being received outside the market. Thus no 'externality' is involved.


Fair enough.

But then ask that same YIMBY person: “What about the extra traffic coming from all these out-of-NYC visitors?” …and you will get a very different answer. “Tax them!”

Because they don't pay local taxes. They are free-riders. Also, a tax is a screening device such that those gaining little 'consumer surplus' are deterred. High value adding transactions don't fall because the tax is trifling relative to the consumer or producer 'surplus'. Also there is a 'signalling' aspect. Putting in congestion charges suggests that the locality is serious about improving quality of life. At the margin, this can affect quality of 'entry'. 

So the basic view, at current margins, is “residents good, visitors bad.”

No. The view is 'paying customers are good. Free-riders are bad.'  

Maybe! But, to follow up on the recent debate, that differential treatment is never justified.

Paying customers should be treated better than free-riders.  

What if a guy starts visiting a girlfriend in the East Village — by car — for one night every two weeks?

Charge him by all means. If he values the girl he will pay otherwise he'll choose a slut in a cheaper neighbourhood. This may actually be good for the girl.  

Then he is a visitor to be taxed. Say the relationship goes well, he is there 2/3 of the time, and he rents a space for his car

in which case, some of that rental expense goes to the local authority. This is not an externality. The thing is reflected in a market transaction.  

in her apartment building garage and uses it periodically. Is he then “a resident”? Are his per hour externalities for the world then suddenly so much more positive? (Does he stop spitting on the sidewalk?)

If he is paying rent, he is contributing, albeit indirectly, to the property tax take.  Some of that money may be used to curb nuisances. 

Again, maybe, but you can see the a priorism embedded in the standard “YIMBY plus congestion tax” mix of proposals. Somehow the differential views on residents and visitors do not need to be justified.

Because residents are not visitors. Residents either pay property tax or local income tax or 'rates' or 'community charge' or something of that sort or else their landlord does. Some visitors may be contributing to property taxes levied on local retail and other such enterprises dependent on the tourist trade. But, ceteris paribus, it is better to get high value adding residents rather than scraping the bottom of the tourist barrel. 

If you wish, think of the cars issue in terms of quantity allocation. There is only so much space for cars in lower Manhattan. How much of that space do you wish to allocate to residents with cars or to visitors with cars? (This question can hold whether you are doing the allocating with prices, with planning, or by some other method.)

Residents want to park close to home. The market for resident parking permits has a political component. Residents have votes. The profit maximizing solution is pre-empted. Local authority parking meter market faces competition from private car-parks. There is also the cost of collection to be factored in. A congestion charge is a different matter. The monopolist can do price discrimination to a greater degree and thus extract more surplus. The actual allocation between residents and visitors will change but, what's important, is that the revenue will be predictable. That's what matters for the Local Authority. More stable, predictable, revenue means better budgeting. 


If you favor YIMBY plus a congestion tax, in essence you think resident car use is better than visitor car use.

Which is rational. If you are a resident, you favour residents. If you are a visitor, you feel that residents should lick your boots and offer you the virginity of their nubile daughters. 

But how do you know that? Repeating to me on Twitter that pollution is bad, traffic in NYC is too slow, externalities are present, and so on is a non sequitur that does not address the question.

There is an uncorrelated asymmetry here. If you are a Resident, your 'bourgeois strategy' is to favour Residents. If only residents have votes in local elections, sooner or later. they will prevail.  

Alternatively, you might think visitor car use is better at the margin.

If you are a fucking tourist trap incessantly lowering standards, sure.  

Then you might place bigger taxes on cars garaged in lower Manhattan,

because Wall Street isn't generating tax revenue. It's the out-of-towners who keep the City solvent by buying hot-dogs and pretzels  

and lower the tolls on the George Washington Bridge.

Why not pay visitors to come buy a hotdog in your fair city?  

I don’t see a good a priori case against the visitors. Maybe there are diminishing returns to being exposed to the genius of NYC,

There is a 'Pareto Law' at work here. A congestion charge or a change in transport policy won't destroy the advantage of the biggest City. However, if the City goes off a fiscal cliff, it may experience self-segregation and fewer of its people will be exposed to 'genius' as opposed to muggers. 

and at the margin we want to encourage the dad who drives from Westchester County with his 15 year old son to see a concert at the Village Vanguard, to get the kid excited about the saxophone.

Why not get him excited about fentanyl?

Or maybe there are increasing returns to being exposed to the genius of NYC (you have to soak up book wisdom at the Strand for twenty years running), which would then cut the other way.

People who excel at the saxophone or in 'book wisdom' are bound to end up in NYC or some other such great City. 


We do observe a lot of people living in NYC for a few years when they are younger, and then leaving for saner pastures.

We also see a lot of young people working in second tier Cities before finally getting the big promotion to Head Office in NYC. 

But they move there to be moved and inspired for a while.

Or they move there after they have become famous but their inspiration has run out.  

That suggests there is some temporary nature to the net benefits from the exposure to NYC.

Individuals get old and die. Everything is temporary for them. But, centres of excellence may remain so from generation to generation. What matters is fiscal solvency and military security.  

We also see more generally, for political economy reasons, that status quo urban policies tend to favor residents and punish visitors to an undue degree.

Not necessarily. It depends on what those urban policies were to start off with. It is possible they favoured visitors and so 'residents' tended to move out only to be replaced by a transient population.  

And, if we stick with the pro-YIMBY intuitions and reallocate more road resources toward residents, do we not have to worry about the traffic, noise, and congestion from the required extra construction?

YIMBYs may like 'extra construction' because it confirms them in their belief that they will be richer by and by. But traffic and noise can certainly be curbed.  

These arguments don’t prove any conclusion, but they do suggest there should not be an a priori bias against reallocating some traffic space away from residents and toward visitors.

It is perfectly proper for people to be biased in their own favour. Milking visitors is what townsfolk have done since the time of Hammurabi.  

The point here is to have consistent views across YIMBY and a congestion tax.

YIMBYism is only consistent with utility maximization if the expected value of the gain in Wealth compensates for present disutility.  A person m-otivated by ideology or other non-economic considerations is unlikely to display consistent behaviour. Indeed, the fellow may be a hypocrite or virtue signaler. It doesn't matter what nonsense we utter when we are lying or talking merely for the sake of creating an effect.

And if you think we should reallocate vehicle space more toward residents and away from visitors, please make a comparative argument to that effect.

Residents have the advantage in filling up local 'vehicle space'. Parking meters and pricey 'resident parking permits' (which charge more for a second or environmentally less friendly car) constrain the amount of 'vehicle space' residents can take up. Venues frequented by visitors are welcome to pay for parking for their customers. Mass transit systems can increase profits by providing underground or other such parking facilities at specific 'loop' locations. The fact that there are two types of customer militates for price or product differentiation. 

Repeating observations about crowding and externalities is not an argument on either of these questions.

Arguments don't matter. Money talks. Bullshit walks. There is a 'bourgeois strategy' here. It favours high value adding residents. It takes a dim view of 'trippers'. On the other hand, great Cities have always been associated with 'Zip Code' segregation. The servant class can't be too far away from the Bosses' mansions. The aspirational and the criminal and the refugee will get stitched into this patchwork. But, fucking over the out-of-towners one way or another is what the City has always been about. 


Addendum: For an extra point, “throughput” and “demand” are not the same.

Effective demand can find a way to sway the decision making process such that uncorrelated asymmetries and bourgeois strategies prevail. Sadly, academic economists and other such shitheads can prevent this happening and thus do much to reduce our quality of life.


I’ve been seeing this error frequently. Congestion pricing may well increase throughput, 
which is how many users get through a road or some other chokepoint in a discrete period of time, say an hour.

But effective demand is a function of expected journey time which is a function of throughput.  It is obvious that the big selling point of congestion charges for voters is that some of them will get lower opportunity cost of daily travel. 

It is much harder for congestion pricing to increase overall demand.

No. Poorer people will take cross-town buses to get to jobs which previously they could not take because traffic congestion meant round-trip travel time of three or four hours. The same is true for salesmen and entrepreneurs who have to factor in travel time. Less traffic means a delivery service can cater to a wider area.  

For instance, at a zero explicit price the ride takes much longer but overall more people will travel through than if you charge them $20 to do the trip.

We don't know that. If you get paid to sit in traffic, fuck you care about throughput? The guys who pay for people to sit in traffic, however, have an incentive to increase throughput. But this means that more people who don't get paid to sit in traffic are zipping along the roads the way God, or Henry Ford, intended. 

Currently, bus users in Karnataka are facing much longer journey times because women, who have recently been granted free travel, are filling up the buses and going sight-seeing. But this means the number of people using buses will decline because women with nothing else to do are spending their day hopping from bus to bus.  

That said, the $20 price may well increase throughput, but if it decreases demand there is still an opportunity cost from the policy.

There is an opportunity cost to everything that costs money to somebody or other. In Karnataka, the opportunity cost of gangs of elderly women sightseeing on buses is the fact that some workers may well quit commuting and return to subsistence farming. 

Don’t use the possibility of higher throughput to argue the congestion toll does not have costs for many of the visitors (of course some visitors will gain due to heterogeneity effects).

Visitors are heterogenous. Where there is a social cost of a journey higher than the price paid, it is perfectly rational to impose a Pigouvian tax. This does not mean that meritorious travel can't be separately subsidized. 

NYC does indeed have wonderful galleries and concerts and so forth. Why not make them free so that homeless people can spend their days there? True, this may deter connoisseurs of the Arts. Fathers may not be too keen to take their 15 year olds to such places so that they can experience the delights of being stabbed or sodomized. 

On the other hand,  wonderful Artistic and Intellectual venues, which charge money to deter people with little interest in what they purvey, can subsidize access for those who have the ability to appreciate their product but who currently lack the means to pay. 

Local businesses which benefit from serving wealthy connoisseurs pay taxes to the City. Some of that money can be spent on the homeless and others who lack recreational opportunities more suited to their needs. 



Sunday, 21 August 2022

Tyler Cowan, India & Leontief paradox

 Tyler Cowen has a post on India titled 

Some simple analytics of Indian growth, economic and cultural

I think of India as, throughout much of its history, as having a surfeit of human talent

Cowan is biased because the Indians in America tend to belong to small cognitive elites from lineages which specialized in knowledge work. His mistake is to think they are representative of the entire population. The plain fact is that the majority of people have low productivity and low educational attainment. They may still be better off than most of their ancestors going back many centuries. It is natural that the proportion of the population that comes from the traditionally educationally backward castes will rise as the affluent have fewer or no children.  

but a scarcity of good infrastructure.

It had good infrastructure in places thanks to the Brits. What it didn't have was a hukou internal passport system.  This meant that people from the countryside could swarm and overrun cities and make them increasingly uninhabitable. Politically, their votes counted for more than the people who paid taxes and thus funded public goods. Look at the Railways. They became more and more unproductive as there was political pressure to create jobs and keep prices low- or non-existent for fare dodgers. Industry had to shift to road transport because of cross-subsidization and long delays. Air transport should have flourished. But Air India was nationalized and turned into a big loss maker. Port development and shipping were neglected till recently. Infrastructure will always be neglected because the political compulsion is to give 'freebies' and expand public sector employment. This means wages and pensions plus interest charges consume more and more of the budget. 

  Infrastructure serves as a bottleneck for further advances

No. Advances generate profits. This attracts politicians who, if not killing the golden goose, significantly constrain its growth.  

.  Thus, many of India’s most significant advances are densely packed with talent, but capital goods are relatively scarce. 

India's crazy Labor laws militate for high capital output ratios in the organized sector. But the bigger problem is that land appreciates whereas physical capital depreciates. Why bother making things when you can borrow from Nationalized Banks to finance real estate development? If the bubble bursts, the Banks take the hit while you retire to your mansion in Belgravia.  

For instance:

1. Indian classical music is super-high G-loaded, but the instruments are relatively inexpensive, compared say to a symphony orchestra.

But Indian classical music isn't that popular. I imagine that top performers and composers- like AR Rahman- don't stint when it comes to music software and hardware.  

2. Indian mathematics and computational advance, such as we find in say Ramanujan

a Tamil Brahmin- a very small minority. Tamil Nadu has an extremely anti-Brahmin political culture.  

and the broader South Indian tradition, is high on mental facility and low on capital goods.

Not any more. Applied Math and Computing is lucrative and Indians are perfectly happy to embrace this. Indeed, philosophically, Indians tend to be Brouwer type intuitionists or constructivists.  

3. Religious contemplation is another Indian specialty, ditto.

Or pretending to be doing religious contemplation while actually looting and raping your disciples. Gandhi belonged to a sect whose head kept fucking the wives of his devotees and thus giving the great spiritual gift of syphilis. There's a good reason Gandhi kept banging on about celibacy. Otherwise people would have assumed he was fucking everybody in his Ashram.  

4. Indian food has lots of ingredients, but many of them are relatively inexpensive, for instance vegetables, lentils, or native spices.  The combinatorial achievements however are remarkable.

But most Indians eat meat though some aren't comfortable with fish. Some spices- e.g. saffron- are very expensive.  

And so on.

As Indian economic growth proceeds, infrastructure will improve dramatically and indeed this process already is underway.

How long will this continue to be true? Some States look ready to go off the fiscal cliff. If Modi is defeated in 2024, it is likely that the Centre will go the same way. The problem is that there may be no Manmohan style reform the next time there is a forex crisis.  

  That will enable India to make contributions in a broader range of areas, and for those contributions to spread around the world more readily.

If Modi wins- sure. But what if he doesn't? Will more prosperous states really transfer resources so politicians can buy votes in the backward, but more populous, regions?  

We are in essence entering a world where physical infrastructure and “ingredients” are no longer the binding constraint on Indian cultural development. 

It never has been. India embraced new technology- Cinema, Music Software- if allowed to do so. One reason Indian Cinema looks so different from Western movies is because the Government prevented the proper development of TV till the Nineties.  

In cuisine, this is mirrored by the rise and spread of Indian “fusion” cuisine, including in India itself, and Indian molecular gastronomy.

I must admit this is a welcome development. I couldn't really say the food in a 5 star hotel restaurant was better than what you could get at a dhaba but molecular gastronomy does justify the vastly greater expense.  

Indian culture (and exports) will continue to rise in influence.  But many Indians will miss the older approach. 

Not if they live in India rather than just visit from time to time.  

They expect talent-intensive cultural contributions, and have come to love them. 

Nonsense! K.L Saigal was a typewriter salesman. Many great Ustads and Pandits claim him as an influence. The Wadali brothers were wrestlers before they took up singing. They seem pretty good to me.  

(Do you really want Pandit Kumar Gandharva to be replaced by a collaboration with some guy playing a mellotron?)

I can imagine Ravi Shankar collaborating with George Harrison who did play the mellotron.  

  The next wave of Indian cultural exports

India's biggest cultural export is Movies. Was a Bacchan or Rajnikanth movie 'talent intensive'?  

will be less talent-intensive, less cognitively challenging,

India does not export cognitively challenging stuff. Boring stuff- sure. The food can be very challenging. But Tagore and Ray are suitable mush for the brain dead.  

and to many people they will not feel “entirely Indian.”

But Indians be kraze for phoren- innit?  

Precisely as India succeeds in spreading its influence, its culture will seem just a bit stupider. 

Tagore and Gandhi were plenty stupid. The Maharishi promoted 'yogic levitation' and laughed all the way to the Bank. Nothing can be stupider than India's contribution to Econ and Poli Sci.  

This will be reinforced by the likelihood that the global marginal customer is not so cognitively well-equipped to understand the greatest glories of Indian civilization.

The greatest glories of Indian civilization were quickly taken over and indigenized by the Chinese the Japanese and so forth. There are superb Yoga teachers of all ethnicities around the globe.  

Indians wielding capital will become increasingly influential, relative to Indians wielding talent.  Vishny Anand as Indian leader will be replaced by ????.

Adani 

#Heckscher-Ohlin

 which says 'countries export the products which use their relatively abundant and cheap factors of production, and import the products which use the countries' relatively scarce factors'. Sadly the Planning Commission thought there was some turpike theorem such that India should concentrate on capital intensive stuff. India still hasn't unshackled manufacturing industry. Maybe it will never do so. What if A.I kills of BPO and decimates knowledge based service industries? You'd have a Leontief paradox. India might still retain a niche in boring shite but smarter and smarter people will be doing that boring shite. Meanwhile the stupid will run the country- unless, like Rahul, they really don't want to coz Granny and Daddy were assassinated to the great benefit of the Congress Party. Come to think of it, Mahatma Gandhi too was assassinated. There's a pattern here is all I'm saying. 

Monday, 6 January 2020

Tyler Cowen's silly State Capacity Libertinism.

Tyler Cowen is now advocating something he calls 'State Capacity Libertarianism'- as opposed to Libertinism which is about expatiating on the capacity of your rectum to accommodate yet more of the State's demands- which he defines in terms of a number of propositions:
1. Markets and capitalism are very powerful, give them their due.
Where are markets powerful? Only where there are coordination problems in the exchange of scarce goods such that preference and endowment diversity meets a Goldilocks condition and there are external economies of a certain type. However, wherever there is a coordination game, it is regret minimizing to hedge on a discoordination game. So the more 'powerful' markets are the more a countervailing power is likely to exist or else the market equilibrium becomes anything goes because of hedging and income effects. In other words, the thing is powerful if it is dangerous and innocuous otherwise.

If by Capitalism is meant the regime of residuary control rights over a factor of production, then the thing is only as powerful as the class that wields those rights. Suppose this class is, or becomes equivalent to, an ethnic monopoly. It may have no real power of its own or else that power may be repugnant.
2. Earlier in history, a strong state was necessary to back the formation of capitalism and also to protect individual rights (do read Koyama and Johnson on state capacity).
Don't. It consists of shite like this-
 State capacity describes the ability of a state to collect taxes, enforce law and order, and provide public goods. 

The State of Manchukuo is generally described as a 'puppet state'. In the last century, there were many such. On paper, they collected taxes, enforced laws and provided public goods. But they had no capacity whatsoever. When the strings were cut, they collapsed.

People my age grew up thinking Ceaucescu's Romania had plenty of 'state capacity' of a certain type. But that wasn't the case. Indeed, Saddam Hussein's 'State Capacity' over large swathes of Iraq turned out to be illusory.

France, in 1939, looked like it had kick-ass State Capacity. A year later- not so much. Hitler or Mussolini went from exemplifying State Capacity, to dying like dogs.

It is pointless to gas on about State capacity. All one can say is 'that State looks kick-ass while that other State looks like it isn't capable of punching its way out of a paper bag. I mean, look at America at the end of 1941. It was a complete mess. Jews and Blacks were roaming free. The Japs had just bombed Pearl Harbor. America clearly had very little State capacity. Hitler was right to declare war on it. At the beginning of the War, the US military was smaller than that of Portugal- though it was slightly bigger than Bulgaria. Obviously, even if America introduced conscription, it would take decades before it got up to speed and had enough 'state capacity' to protect itself. But, to do that, it would have to eliminate Jews and Blacks and Gays and mouthy women and that theory of Relativity bullshit and animalistic Jazz and so forth.'

This notion of State capacity is Germanic and arises out of the 'liberalism of the officials'- beametenliberalismus- which initially embraced Adam Smith in the belief that the cool thing about the market's invisible hand was that it would tug at the State's dick till it turned ginormous. What was the ultimate result? The German State lost the capacity to prevent lots of people getting raped and killed. It lost a lot of territory and had to reconstitute itself, under alien occupation, as a country wholly without military capacity. Currently, the German army does rifle drill with broomsticks.
As a concept, it has its origins in the work of political scientists and fiscal sociologists (Tilly, 1975, 1990; Skocpol, 1985; Mann, 1986; Ertman, 1997) who in turn built on a tradition in German scholarship associated with Otto Hintze and Joseph Schumpeter.1 More recently, it has also entered the lexicon of development economists, international agencies, and mainstream economics (for a recent survey, see Bardhan, 2015)
So we know the thing is stooopid.
2 This essay seeks provides a historical analysis of the rise of high-capacity states in Europe and the rest of the world. It further aims to better understand the relationship between state capacity and the emergence of modern economic growth.
This is silly. Europe was a place where 'low capacity' states were gobbled up if the 'Balance of Power' permitted. Furthermore, there were strong mimetic effects. Thus 'high capacity' was not a endogenous, it was a mimetic or strategic, phenomenon. It is pointless looking at what was happening inside a country when whatever capacity it ended up with was based on something either imposed or imitated.
3 Understanding economic history is critical for comprehending the importance of state capacity.
Sadly, to understand economic history, you have to understand economics. But, if you understand econ, then you can make a lot of money right now and help poor countries double their income every decade. So just do that already and then we'll listen to you if you want to gas on about the importance of economic history, or state capacity, or metachlorians, or drinking your own urine, or anything else you like.
In historical terms, the emergence of well functioning states is a relatively recent phenomenon.
Nonsense! States precede History and Literature and the collective memory of Mankind.
For many premodern polities, even the term state is an anachronism: there was no state in much of Europe prior to the late middle ages.
Rubbish! In no large contiguous part of Europe was this the case. Wherever you went, there was a Chief who himself had a Chief. Even if these guys were illiterate or pagan- as in Lithuania- there was a State. It may have been called a 'Nation' in Latin, but it was a State nevertheless. Shakespeare has Hamlet's Danes contend over what is 'terra nullis'-a little patch of ground/That hath no profit in it but the name - precisely because the thing could not exist in Europe.  Whatever land existed must belong to a State because States were contiguous and in constant competition.
Otto Heinze observed that feudal rulers ‘lacked the attributes of sovereignty—that is, independence beyond its borders and exclusive rights within them’ (Hintze, 1906, 1975, p. 192).
Hintze lived in a country with a lot of Kings who lacked the attributes of sovereignty. After the Kaiser fell, they were not able to reassert their authority. There used to be a lot more enclaves and 'sovereign orders' and various types of 'Liberties' and immunities within the borders of States. However, some continue to exist. There are Spanish enclaves in France. The Vatican is a mini-state. The Knights of Malta are a sovereign order. However, a more significant type of limitation of sovereignty is represented by the presence of foreign military basis which may, effectively, have extraterritoriality depending on the status of forces agreement with the host country.
In medieval Europe, characterized by fragmented political authority, overlapping and competing legal jurisdictions, and private armies—the modern concept of a state—has little empirical purchase (Strayer, 1970).
One could say this with greater truth of the two German Republics after the war, or of the Warsaw countries. The fact of the matter is that few modern states don't have areas where 'private armies'- gangs- not the police, are in charge. At the margin, the authority of the state, like that of any other entity, is contested.

Concepts don't have much 'empirical purchase'. Economics is idiographic not nomothetic.
The word ‘state’ only came to acquire its modern meaning in English at the end of the sixteenth century (Skinner, 2009).
From the fourteenth century onward, European countries were using a word of this provenance for a concept which already existed. In English law, it was the Norman Conquest which marks the notion that all land ultimately belongs to the Kings. No other estate is wholly allodial. No doubt, it was convenient to have a notion of limited monarchy. But the power of that monarch, if exercised with a scrupulous observance of limiting protocols, is absolute.
This was not merely a semantic change; when ‘the word ‘state’, l'etat, stato’ or Der Staat came into usage in the early modern period it was ‘a word for a new political experience’ (Oakeshott, 2006, p. 361).
All experience of significant political change is a new experience for a given cohort. Indeed, my experience of middle age still feels like something new for me. But, though the experience is new, the concept is old.
State capacity can be thought of as comprising two components. First, a high capacity state must be able to enforce its rules across the entirety of the territory it claims to rule (legal capacity).
So, the US does not qualify coz it can't enforce its rules re. drugs and homicide and so forth.
Second, it has to be able to garner enough tax revenues from the economy to implement its policies (fiscal capacity).
Nonsense! It could be predatory, parasitical, or use royalties from mineral or other wealth. The Turks and the Mongols and so forth did not establish great Empires with a lot of 'State capacity' because their nucleus had fiscal capacity. On the contrary, their expansion was driven by the fact that they were as poor as shit. A stationary bandit would starve. By contrast, States which did have fiscal capacity- like a lot of Indian Kingdoms- stopped being independent States

Lack of 'fiscal capacity' is an explanation for how many modern states were created. The Franks had shit fiscal capacity, so they conquered France and gave it their name. Same with the Angles who created England and the Normans who created Normandy and the Lombards who created Lombardy and the Gujjars who created Gujerat and so forth.
State capacity then should be distinguished from either the size or the scope of the state. A state with a bloated and inefficient public sector may be comparatively ineffective at implementing policies and raising tax revenues.
So a state with high fiscal capacity may have little executive or defensive capacity. Why not simply admit that capacity doesn't matter. What matters is whether a people are doing smart things or stupid shite.
Furthermore, historians agree that the eighteenth century British state had high state capacity even though it played a very limited role in the economy.
Coz the Brits were doing smart, not stupid things- save in the case of how Mad King George handled some of the American colonies.
Similarly, state capacity requires a degree of political and legal centralization, but it should not be identified with political centralization per se.
State capacity depends on its people's capacity to choose to do smart, not stupid, things.
The rulers of feudal society in which many legal and fiscal choices were devolved to local lords indeed had low state capacity. But the concentration of political authority in the center may cause inefficiencies and thereby undermine state capacity (Oates, 1999). As Weingast (1995), argues, federalized states have provided conducive environments for both effective governance and economic development.
The US appeared to have little state capacity. But, because its people were smart, they could come together when attacked to very quickly become the mightiest nation on earth with vastly greatly state capacity than that of any combination of hostile powers.
We begin by surveying the history of state development first in early modern Europe and then in other parts of the world (Section 2). The path to high state capacity was different in different parts of Europe and we argue that these differences had important implications for subsequent economic and political developments.
This is nonsense. Different parts of Europe did different types of stupid shite for idiographic reasons but, often enough, this did not really matter. There were mimetic and strategic reasons for convergence to models with sufficiently robust capacity to endure.
In East Asia, the failure of imperial China to invest in state capacity led in part to the economic and political disasters China experienced between 1850–1950, while the comparatively higher level of state capacity in Tokugawa Japan set the stage for that country's successful program of modernization and economic growth.
Nonsense! The Chinese were slower to stop doing stupid shite. The Japanese were quicker off the mark in embracing mimetic effects. That's it. That's the whole story.
Notice China began to rise economically when it imitated South Korea and so forth.  Thirty years on people would gas on about how the Chinese Communist Party did not have the capacity to control the economy and so China was bound to transition to Yeltsin type Demo-kakocracy
Meanwhile many of the problems that beset sub-Saharan Africa can be traced to weak and fragmented states.
But those weak and fragmented states reflect the weak and fragmented condition of their people. The problems which beset Eritrea- whose people strike us as very smart- are similar to the problems which beset North Koreans- who, I assume, are as smart as South Koreans. Nobody would say Eritrea's or North Korea's problem is that the Government is not strong enough or lacks the capacity to fuck over anyone who does not get with the program.
Having established a correlation between the rise of state capacity and modern growth in Section 2, in Section 3, we evaluate possible causal mechanisms linking state capacity with modern economic growth.
So, by doing some Junk Social Science and deriving some spurious correlations you get to talk worthless shite.
We provide several historical case studies in which the rise of more effective states in early modern Europe lead to greater market integration, better enforcement of the rule of law, and to the establishment of a common national identity.
This is just a case of junk social science. Frequently, an American researcher publishes a silly paper. Then the actual historians, with expert knowledge, wades in and explains all the many different ways the ignorant American fucked up.
In Section 4, we explore what factors have enabled some societies to successfully build effective states.
All that matters is that the corpses of predecessor states are hygienically disposed off. It's a dirty job. But someone has to do it or there will be tears before bedtime.
We connect the economic history literature on state capacity with the literature on the deep determinants of development. One insight from recent research on the deep determinants of sustained economic growth is that both geography and population level characteristics, such as the level of human capital or the degree of ethnolinguistic fractionalization, are important predictors of development and the effectiveness of political institutions.
In other words, evidence of lack of capacity is a predictor of lack of capacity.
Finally, in Section 5, we conclude by pointing out areas for future research.
One area for future research suggests itself immediately- viz. showing how evidence of evidence is a predictor that predictions will be made.
Returning to Cowen's crap post- we find the following equally valuable gem of wisdom-
Strong states remain necessary to maintain and extend capitalism and markets.
The Singaporean State is so mighty that the Chinese Communist party decided to imitate the manner in which they had extended capitalism and markets.  We must compliment the Singaporean State for not trying to conquer China- whose State was so weak.

Strong states may grab territory and resources. But they won't use free markets or globalized capitalism to control that territory or extract those resources. A weak State may do so. Indeed, that's a reason its citizens may want it to stay weak.
This includes keeping China at bay abroad and keeping elections free from foreign interference, as well as developing effective laws and regulations for intangible capital, intellectual property, and the new world of the internet. (If you’ve read my other works, you will know this is not a call for massive regulation of Big Tech.)
All of this means an increase in interference by Government bureaucrats in the private sector. Increasing State Capacity means hiring more civil servants and increasing compliance costs for businesses. Keeping China at bay may mean more aircraft carriers and naval basis along key trade routes. At some point, a new nuclear doctrine will also be needed.
3. A strong state is distinct from a very large or tyrannical state. A good strong state should see the maintenance and extension of capitalism as one of its primary duties, in many cases its #1 duty.
 A state is strong or weak depending on its ability to maintain its territorial integrity and preserve a monopoly of legitimate coercive power within its boundaries.  Extending capitalism may weaken a state and lead to its dissolution. It is a different matter that we may want to live in a state which can use its strength to do more of things we like. However, it is not the case that a state where more of that stuff is to be found is necessarily stronger.
4. Rapid increases in state capacity can be very dangerous (earlier Japan, Germany), but high levels of state capacity are not inherently tyrannical.
Doing stupid shit is dangerous. Capacity is irrelevant. Of course, if you are weak, there's a lot more things which count as stupid shit.
Denmark should in fact have a smaller government, but it is still one of the freer and more secure places in the world, at least for Danish citizens albeit not for everybody.
Denmark has a young, Left wing, Prime Minister. Even if one likes small government, it is good for a State to be able to ramp up or down its administrative capacity. It is regret minimizing not to be doctrinaire in this- or indeed any other- point of Political Economy.
5. Many of the failures of today’s America are failures of excess regulation, but many others are failures of state capacity. Our governments cannot address climate change, much improve K-12 education, fix traffic congestion, or improve the quality of their discretionary spending. Much of our physical infrastructure is stagnant or declining in quality. I favor much more immigration, nonetheless I think our government needs clear standards for who cannot get in, who will be forced to leave, and a workable court system to back all that up and today we do not have that either.
The failures here arise largely because of preference falsification- people pretending to want stuff they don't really want- and good old fashioned stupidity. Econ contributes to this with its worthless academic cascades.
Those problems require state capacity — albeit to boost markets — in a way that classical libertarianism is poorly suited to deal with.
No. These problems can only be tackled if you do away with virtue signalling and have better mechanism design. Often, this will mean eliminating perverse market based incentives and trusting professionals to do their jobs.
Furthermore, libertarianism is parasitic upon State Capacity Libertarianism to some degree. For instance, even if you favor education privatization, in the shorter run we still need to make the current system much better. That would even make privatization easier, if that is your goal.
This is the trouble with Cowen's approach. He assumes that essentially ideological interests have an economic substructure. If this were really true, Marxism would have succeeded. The truth is people will allow institutions they depend on to turn to shit rather than compromise their 'principles'. Thus, what sensible people should be saying is 'ignore economists. They have ideologies. Their brains are full of shit. For forms of Government, let fools contest. Whatever is best administered is best.'
6. I will cite again the philosophical framework of my book Stubborn Attachments: A Vision for a Society of Free, Prosperous, and Responsible Individuals.
Cowen's book is silly. We don't know what sustainable growth is because we don't know the future.  It is pointless to say we should mazimize this.
7. The fundamental growth experience of recent decades has been the rise of capitalism, markets, and high living standards in East Asia, and State Capacity Libertarianism has no problem or embarrassment in endorsing those developments. It remains the case that such progress (or better) could have been made with more markets and less government. Still, state capacity had to grow in those countries and indeed it did. Public health improvements are another major success story of our time, and those have relied heavily on state capacity — let’s just admit it.
Only mimetics matters. China started imitating countries like South Korea and Taiwan. India started mimicking China- but had to give up. That's it. That's the whole story. Capacity did not matter. Either it came into existence because of a mimetic drive or it was useless.
8. The major problem areas of our time have been Africa and South Asia. They are both lacking in markets and also in state capacity.
But, as Edward Lim of the World Bank noted, they are not lacking in 'activists' backed by International NGOs. Frustrating growth pays better than permitting it.
9. State Capacity Libertarians are more likely to have positive views of infrastructure, science subsidies, nuclear power (requires state support!), and space programs than are mainstream libertarians or modern Democrats.
Cowen says this as if 'State Capacity Libertarians' are a large and easily distinguishable sub-species. I may say 'Nicaraguan horcrux Socioproctologists are more likely to have positive views about being nice.' But, no such beasts exist in nature. I'm just talking up my nonsensical creed is all. 
Modern Democrats often claim to favor those items, and sincerely in my view, but de facto they are very willing to sacrifice them for redistribution, egalitarian and fairness concerns, mood affiliation, and serving traditional Democratic interest groups. For instance, modern Democrats have run New York for some time now, and they’ve done a terrible job building and fixing things. Nor are Democrats doing much to boost nuclear power as a partial solution to climate change, if anything the contrary.
Modern Democrats, like Modern Republicans, are a bunch of fools or knaves or fools and knaves. So what? They can be fooled or entrapped into permitting sensible programs being implemented. Thus has it always been. 
10. State Capacity Libertarianism has no problem endorsing higher quality government and governance, whereas traditional libertarianism is more likely to embrace or at least be wishy-washy toward small, corrupt regimes, due to some of the residual liberties they leave behind.
Only fools endorse meaningless shite. Also, don't do regime change. The thing will turn around and bite you in the ass. Play with yourself if you want to feel you are a big man. Don't dick with small regimes because you think they could be less corrupt or misogynistic or should have a better looking leader with a Doctorate from Chicago. 
11. State Capacity Libertarianism is not non-interventionist in foreign policy, as it believes in strong alliances with other relatively free nations, when feasible.
Sheer stupidity. A relatively free country may want to enslave yours. A completely unfree country may want to fuck up that relatively free country. It may be expedient to ally with it.
The US was relatively freer than the USSR. India allied with the latter because the US was sponsoring a genocidal military regime in Pakistan. 
That said, the usual libertarian “problems of intervention because government makes a lot of mistakes” bar still should be applied to specific military actions. But the alliances can be hugely beneficial, as illustrated by much of 20th century foreign policy and today much of Asia — which still relies on Pax Americana.
Some parts of Asia and North Africa have been fucked over by Pax Americana. The US should concentrate on winning wars, not ensuring peace. Its Army can't and won't do 'Nation building'. 
It is interesting to contrast State Capacity Libertarianism to liberaltarianism, another offshoot of libertarianism. On most substantive issues, the liberaltarians might be very close to State Capacity Libertarians. But emphasis and focus really matter, and I would offer this (partial) list of differences:
a. The liberaltarian starts by assuring “the left” that they favor lots of government transfer programs. The State Capacity Libertarian recognizes that demands of mercy are never ending, that economic growth can benefit people more than transfers, and, within the governmental sphere, it is willing to emphasize an analytical, “cold-hearted” comparison between government discretionary spending and transfer spending. Discretionary spending might well win out at many margins.
This sounds reasonable. But the devil is in the detail. The fact is 'State Capacity Libertarians' are as stupid as shit. Their 'cold-hearted' comparisons evidence a head heated by foolish nostrums. Disintermediate the cunts.
b. The “polarizing Left” is explicitly opposed to a lot of capitalism, and de facto standing in opposition to state capacity, due to the polarization, which tends to thwart problem-solving. The polarizing Left is thus a bigger villain for State Capacity Libertarianism than it is for liberaltarianism. For the liberaltarians, temporary alliances with the polarizing Left are possible because both oppose Trump and other bad elements of the right wing. It is easy — maybe too easy — to market liberaltarianism to the Left as a critique and revision of libertarians and conservatives.
But there is nothing here which isn't utterly facile. If a guy really is smarter than average let him make money and use that money in some socially beneficial way. Then we'll listen to him even if he calls himself a State Incapacity Fruitarian. 
c. Liberaltarian Will Wilkinson made the mistake of expressing enthusiasm for Elizabeth Warren. It is hard to imagine a State Capacity Libertarian making this same mistake, since so much of Warren’s energy is directed toward tearing down American business. Ban fracking? Really? Send money to Russia, Saudi Arabia, lose American jobs, and make climate change worse, all at the same time? Nope.
Warren is running for President. She is bound to say all sorts of things which are best ignored. What matters is jumping on the right bandwagon. Actual policy will be decided after the election. Manifestos mean shit. 
d. State Capacity Libertarianism is more likely to make a mistake of say endorsing high-speed rail from LA to Sf (if indeed that is a mistake), and decrying the ability of U.S. governments to get such a thing done. “Which mistakes they are most likely to commit” is an underrated way of assessing political philosophies.
The most common mistake a guy who calls himself a 'State Capacity' whatever, is likely to make is to be completely wrong about what is or isn't State Capacity and how it can or can't change things. By contrast, if everybody is saying 'That dude, X, sure transformed the Dept. of Motor Vehicles. It is a pleasure to renew one's license. Somebody should put X in charge of a bigger, more 'mission critical' Department.'
You will note the influence of Peter Thiel on State Capacity Libertarianism, though I have never heard him frame the issues in this way.
Thiel made his own money. That is why people listen to him.
Furthermore, “which ideas survive well in internet debate” has been an important filter on the evolution of the doctrine. That point is under-discussed, for all sorts of issues, and it may get a blog post of its own.
Here is my earlier essay on the paradox of libertarianism, relevant for background.
However, a superior alternative would be to judge people by their track-record in doing smart stuff rather than looking at the label they attach to themselves. I say this as a White Supremacist Lesbian seeking a soul mate. Strangely, such Frauleins as Skype me refuse to send me air-fare to get to them. Why? They feel a fat black bearded man isn't really the grand-daughter of Eva Braun. They express incredulity at my self-reported track-record of Sapphic encounters with Hollywood celebrities. Cowen may feel this dismal outcome is the consequence of the wrong sort of Libertarianism having gained currency. But there may be a simpler explanation. You can't fool all the people all the time. Just concentrate on shitheads who studied Econ, rather than something worthwhile, at Uni. Better still, concentrate on those who teach it there. To be an Economist means never having to say you are sorry, you have nothing sensible to say. The thing would be otiose.