To regulate commerce with foreign nations, and among the several states, and with the Indian tribes.

So here’s the point-in-a-nutshell question. What practical difference would it make, in light of the last century of Commerce Clause jurisprudence, if the clause instead had said:

To regulate commerce.

…or even:

To regulate economic affairs.

It’s hard to think of any. Even the odd outlier decision like Lopez, cast as some kind of reactionary rollback of congressional prerogatives, would likely come out the same under this broader wording.  I realize this is a horse that long ago left the barn, but I figure it’s worth pointing out now and again anyway.

Without the bailouts we would have had many more failed banks, very strong deflationary pressures, a stronger seize-up in credit markets than what we had, and a climate of sheer political and economic panic, leading to greater pressures for bad state interventions than what we now see.  Milton Friedman understood all this quite well, which is why argued bailouts would have been a good idea in the 1929-1931 period. [...]

If you are a libertarian, is not our current course more favorable for liberty than would have been a repeat of 1929-1931?  If not, I would be curious to hear your counterfactual version of how matters would have proceeded, without the financial bailouts.  Is it that you think the regional banks would have raised the financing to pick up the entire bag and keep the banking system afloat?  Or is it that natural market forces would have somehow avoided a wrenching surprise deflation?  Or do you think the authorities for some reason would have not nationalized the major banks?  Please let us know.

I’m not inclined to debate economic policy with Tyler and Megan, so I won’t presume to take a position on the ultimate wisdom of the approach that was taken, but this sounds an awful lot like the old debate trick I’ve previously referred to as the fiat shuffle. Just to refresh: The way the trick works is that, for the purposes of arguing the merits of a given policy, you assume away various real-world political barriers to the policy’s being enacted—in debate lingo, you get to “fiat” the policy and restrict the argument to whether this would be a good thing without fussing over whether you could get the votes in the House (or whatever) to do it. The shuffle comes when you assume the same political constraints back in again as part of an argument that the proposed policy would create pressure for other salutary reforms, or to dismiss alternatives as infeasible.

Now, this isn’t a clear case of fiat shuffle, because it’s easy to imagine that we might have had the political will to resist the bailouts, but that this would not have been sufficient to forestall still more aggressive intervention later assuming things would have gotten far worse. Still, despite a an initial defeat in the house, the bailout ultimately passed by a 3-to-2 margin there, and by an even more lopsided 3-to-1 vote in the Senate. Which is to say, the world in which we didn’t do the bailout is clearly a world with a pretty radically different political culture, presumably populated by legislators with a very different average worldview. When would the inhabitants of that world have given up their resistance to intervention, and how much more dramatic would the intervention have been when they did? Damned if I know, but projections based on the current composition and views of Congress probably don’t apply.

Update: I didn’t think this post made the claim that “if legislators had had the guts to stop the first bailout, they would also have had the backbone to stop a second one,” but I suppose I should train myself to start talking that way in case I ever need to do cable news.

Now, someone might object that if health care reform will have winners and losers, you could believe that the people who think it will be better for them and the ones who think it will be worse are both likely to be correct. And maybe many of them are. But I suspect that for a lot of people, their view of whether reform will be good or bad for them is pretty tightly bound up with what they think the system will look like on the whole.  If you’re totally without coverage now, you can guess that almost any reform has a good chance of being an improvement, and if you’re extremely happy with your current coverage and cost, you might reasonably expect that tinkering is more likely to muck things up than to result in still further improvement.  If you’re somewhere in the middle, though, your opinion probably turns on which of a range of general scenarios you find most plausible. That is, it’s not so much anything specific to do with you, but rather how you answer broad questions about the systemic effects of the policy: Will costs be controlled? Will rationing be severe? Will patients have more or less control over the course of their care? Will innovation be encouraged?

To the extent people’s predictions turn on those sorts of questions, “knowing what’s good for you” just  amounts to “knowing whether the policy is good.” And while we should expect people to routinely be in the best position to know what’s good for them—to know what their own values and priorities are, what their specific options and constraints are, and how to trade off between them—there’s not much reason to expect that expertise to translate to national-level policies, even when those policies will naturally have some effect on the welfare of each individual. Insofar as there’s sharp disagreement, it’s practically a tautology that large numbers of people will turn out to be wrong about “what’s good for them” in this sense.

I mention all this, by the way, not because I have any interest in defending Obama’s health proposals, but because I’m loath to see anti-paternalist rhetoric conscripted in service of crude majoritarianism.

Where does the right to health care come from? Did it exist in, say, 250 B.C., or in A.D. 1750? If it did, how was it that our ancestors, who were no less intelligent than we, failed completely to notice it?

If, on the other hand, the right to health care did not exist in those benighted days, how did it come into existence, and how did we come to recognize it once it did?

Now, I assume—or at least hope—Dalrymple is perfectly capable of thinking of any number of genuine rights that ancient societies failed to recognize. Indeed, our ancestors “failed to notice” a great many of the rights we now consider fundamental at very many times in the past, so he can’t just mean that historically neglected rights are necessarily invalid. What I think he means is that rights are usually thought of as being universal, what people are in principle entitled to in any time or place just by dint of their humanity. We can say of Medieval serfs that they should have been treated very differently than they were by their societies, but since “ought” implies “can,” it seems absurd or incoherent to suggest that they should have had access to antibiotics or chemotherapy or any of the myriad other relatively recent innovations that constitute modern health care, let alone that they had a right to these things. What sort of right is it, after all, that cannot even in principle be satisfied? But supposing rights are universal, the thinking goes, they must have enjoyed (in principle) the same rights that we do, so a right that would have been impossible for them to claim must not be a genuine right today, even if such a purported right is now technologically satisfiable. Which I think is what Bandow is getting at when, in his own post, he asks precisely what level and kind of health care we’re all entitled to—the idea being that any concrete answer will either seem to wish away scarcity or appear contingent or arbitrary in a way we don’t expect abstract rights to be.

If the “right to health care” were really a claim on specific set of goods or services, the argument would go through well enough.  But we can conceive of this right—and of positive rights generally—in another, more plausible way. What we can instead say, speaking very roughly,  is that people have a right to the aid of others in avoiding severe harms when the cost of providing that aid is relatively low—a right that others help me when the burden of helping on them is relatively slight compared with the benefit to me. Alternatively, we might frame this as a sort of share right, either to some minimal proportion of social resources, or to a quality of life not too radically short of the prevailing level when this is possible. I’m not arguing that there is such a right, I’m just arguing that there isn’t a formal problem with asserting such a right timelessly and universally.

If this sounds doubtful, consider some less controversial negative rights that just about everyone thinks we have—rights against the imposition of certain kinds of harms. In a small and technologically primitive community, we can probably think of all sorts of harms that individuals simply cannot realistically help but impose upon each other: the spread of various lethal contagious diseases, air and water pollution from human waste or cooking fires. It is not literally impossible to avoid imposing these externalities—everyone could go off into the mountains and commit suicide or, less dramatically, refrain from cooking their meat—but insofar as that would leave everyone very much worse off, the burden of avoiding these harms is too high to generate a binding duty or a corollary right. At a different level of development, the interest in avoiding these harms might be much greater relative to the cost of refraining from the behaviors that impose them, and we might say that there is such a duty and right. Now, in one sense, my neighbor and I both have some “new” rights not enjoyed by our ancestors: to wit, the right that the other not leave bonfires or big mounds of human feces in the front yard. But jumping up a level of abstraction, we’ve got the same conditional right not to be involuntarily subjected to relative diminutions of quality of life above a certain level, when the relative cost to each of us of not subjecting the other is below a certain level. Whether I’ve picked especially good examples here is less important than whether we think it’s plausible to conceive of our particular rights and duties varying across technological contexts, while the rights functions that determine our concrete obligations and entitlements  remain fixed and universal.

We can say something similar about this argument from Wesley J. Smith:

I think the biology of the matter is important because it raises the question of how can meat-eating be immoral when an omnivorous diet is not only natural but offers us the best balance of nutrients. Vegans, for example, must take a supplement to obtain Vitamin D. Hence, I don’t see how eating a naturally human diet can ever be considered immoral.

Now, I’m not entirely sure how Smith thinks this argument is supposed to work, why he imagines “naturalness” is relevant, why he imagines modern factory farming is plausibly described as “natural,” or how the balance of nutrients fits into it. (I presume he would consider it beside the point if we discovered tomorrow that toddler is the most nutritious sort of meal.) But one way it might work is along these lines: Our ancestors would probably not have survived had they not killed and eaten animals; it cannot have been wrong for them to do what was required to survive; therefore killing and eating animals must be morally permissible. I don’t think I’d actually accept the second premise without qualification, but I think it’s probably fine in this context. Now, this is a little different from the previous case, because we might think that what we owe our fellow humans depends on the reciprocal obligations we’d impose on each other in a social contract formed under certain idealized bargaining conditions, and not so much when it comes to cows. Partly for that reason, I’m extraordinarily reluctant to use the language of “rights” when talking about how we ought to treat animals. But I don’t find it inconceivable, as Smith seems to, that it could have been perfectly moral for our ancestors to kill and eat animals to avoid death or serious illness, while it is not so moral for us to do the same—or, more accurately, to do rather worse in terms of how livestock are typically treated—in order to avoid the need to take Vitamin D supplements.

Update: I should probably be clear that I do still agree with the original sentiment this far: A “right to health care” isn’t going to make sense as a fundamentally distinct category of entitlement, but only as the upshot under certain conditions of a general duty to aid. So it’s not that there’s something metaphysically special about health care, but rather that if you think there’s such a duty to aid, provision of health care might turn out to be the most efficient way to satisfy it, to the extent that it’s both important to people’s welfare and hard for them to obtain on their own. An obvious upshot of this is that a practical “right to health care” as an entitlement in a particular context can’t be an unbounded one—it can’t mean that you have a right to whatever treatment might help ameliorate your condition or extend your life,  regardless of cost.

1. Cato-influenced (for lack of a better word).  There is an orthodox reading of what “being libertarian” means, defined by the troika of free markets, non-interventionism, and civil liberties.  It is based on individual rights but does not insist on anarchism.  A ruling principle is that libertarians should not endorse state interventions.  I read Palmer’s book as belonging to this tradition, broadly speaking.

2. Rothbardian anarchism.  Free-market protection agencies will replace government-as-we-know-it.  War is evil and the problems of anarchy pale in comparison.  David Friedman offered a more utilitarian-sounding version of this approach, shorn of Misesian influence.

3. Mises Institute nationalism.  Gold standard, a priori reasoning, monetary apocalypse, and suspicious of immigration because maybe private landowners would not have let those people into their living rooms.

4. Jeff Friedman and Critical Review: Everything is up for grabs, let’s be consequentialists and focus on the welfare state because that’s where the action is.  Marx is dead.  The case for some version of libertarianism ultimately rests upon voter ignorance and, dare I say it, voter irrationality.

5. “Hayek libertarianism.”  All or most of the great libertarian thinkers are ultimately compatible with each other and we have a big tent of all sorts of classical liberal ideas.  Hayek and Friedman are the chosen “public faces” of this approach.  “There’s a classical liberal tradition and classical liberal values and we can be fuzzy on a lot of other things.”

This seems off to me—and uncharacteristically messy, actually. For one, it blurs together a bunch of different levels of taxonomy. Mises and Cato both have institutional cultures that are distinct from whatever ideological strains somone might associate with them—and in the case of Cato, at least, I think there’s substantial enough internal diversity that I’d be hesitant to use it as a tagline for any particular form of the philosophy. Which is as it should be at a policy shop.  I’m not disposed to sit around making elaborate lists all day, but if you wanted to do this, I think you’d want a set of cultural categories and a set of philosophical ones, though of course certain pairings are a lot more common than others. Tyler’s list is more of a philosophical breakdown, but it reads oddly. Jeff Friedman runs an interesting journal and some great seminars, but his name looks odd juxtaposed with “Rothbardian Anarchism” as a category. A more intuitive grouping would put him in with a much broader bunch of public choice–minded consequentialists, alongside those Rothbardian Anarchists, a generic group for “non-aggression principle” deontologists, Chicago Schoolers, paleolibertarians, Objectivists (who are libertarians in every ordinary-use sense of the term, even if they don’t like it), and ecumenical Hayekians. I leave the cultural subdivisions as an exercise for the reader. My comments regarding Jeffrey Friedman notwithstanding, Starchild is actually his own category here.

Brad Plumer has a very nice post on why the Congressional Budget Office has, historically, predicted that pollution regulations would cost much more than they actually did. When Congress went to create a cap-and-trade plan for sulfur dioxide in the early ’90s, the CBO figured that permits would sell for $750 a ton. By 1997, they were $100. And that’s not an isolated example.

The basic story, as Plumer explains, is that “markets almost always tend to be smarter than forecasters, and adjust in ways that no one expected (and, as such, are hard to build into the models).” Technological innovation tends to emerge much more rapidly than CBO’s predictions admit. And there’s a reason for this. The CBO plays by “all-else-being-equal” rules. Asked to evaluate cap-and-trade, they essentially ask, all else being equal, what will this do to the economy?

Ezra and Brad are mostly concerned with why this means the CBO is unreliable on environmental regulations. But I think there’s a larger point here libertarians and free-market types ought to be interested in.  If we think markets are generally going to be pretty good at adapting to changing circumstances in unpredictable ways, we need to look at whether they’ll also be robust enough to deal reasonably well with regulation. Apropos of the example above, folks like Julian Simon long argued that dire environmentalist predictions of resource depletion were wrong because ingenious humans responding to price signals would find substitutes and more efficient uses for scarce goods. That argument has held up pretty well, but then the same should be true if oil gets more expensive because of a carbon tax, say. The flip side is that if you want to claim that some awful cataclysm—like the recent financial implosion—can be laid at the feet of government, it’s worth asking whether that level of instability and sensitivity to tampering isn’t itself a problem. A theoretically optimal system that blows up at the slightest perturbation is not a great real-world solution.

So when is regulation just one more changing circumstance we should expect the market to adapt to pretty well, and when should we expect it to cause  serious problems? Two obvious kinds of cases where you might expect trouble come to mind. The first is when the market actually does adapt “correctly” to a regulation that’s sending the wrong signal. Price controls are the clearest example here: The shortages that result from price caps aren’t a market failure, they’re the right response to a false measure of demand. In this case, it’s the market adaptation that’s actually the problem—just as many disease symptoms are actually the result of the immune system’s reaction. The other obvious sort of case is a regulation that actually targets the underlying adaptive mechanism itself—a rule that limits the flow of information, or that bars whole classes of transactions or contracts.

These are not, I realize, especially novel observations, but a lot of public debate seems to treat “regulation” and “deregulation” as fairly homogenous. If the case for markets consists in their generally being smarter than we are, we should infer that, in most cases, narrow regulations will end up being less burdensome than one would expect, because the market will adapt in ways that can’t be predicted in advance. Regulations that target the adaptive mechanisms will be costlier than they seem, because the loss is in the form of adjustments or innovations that don’t happen. If that’s right, though, it might be a reason to worry that cost-benefit analysis of regulation—Cass Sunstein’s new gig at OIRA—will be systematically skewed toward the wrong type. My first instinct was “well, surely they’ve thought of this and attempt to compensate in some way,” but if the estimates are based on CBO-style “other things equal” scoring, maybe not.

Rachel: do the libertarian wonks supporting seasteading intend to continue their wonkery once they move to the sea colony? or would they have to like, build stuff for the first few years?

Julian: Build stuff? Don’t be silly.  The Market will provide

Rachel: So the equilibrium is a place populated partly by libertarian escapists, and partly by non-libertarian teachers and nurses and radio dispatchers who work there because none of the escapists could do those jobs (or in sufficient quantities to meet demand)?

Julian: Who said anything about teachers and nurses?  The Market will do it.
Julian: In a pure libertopia, the Market will be so efficient as to dispense with the need for human intermediaries, like a Lovecraftian Elder God who casts aside the husk of an avatar to bestow the touch of madness with its own deathless tentacles.

Rachel: Sweet.  I’m moving.
Rachel: Ready the dinghy.

Julian: Also, I’m having T-shirts with the slogan “ready the dinghy” made up.

Rachel: awesome
Rachel: The dinghy WITH NO MAKER.  Because I demand one and will pay, it shall appear.
Rachel: Or does that just take effect once I’m a’stead?

Julian: Time and causality have no meaning in a frictionless market
Julian: As God constantly creates Himself outside of spacetime
Julian: So supply creates its own demand
Julian: Your desire for a dinghy is merely the tesseract shadow cast by the four-dimensional dinghy itself

Rachel: Man, there was a lot I missed in that Patri Friedman post.

Julian: Not all are prepared for the Higher Efficient Markets Theory.

An unsettling proportion of my IM conversations look vaguely like this.

Update: I should probably clarify that this is just a bit of silliness on my part, not really a dig at any particular experiment in living, and certainly not at Patri, who clearly doesn’t hold the sort of panglossian view I’m caricaturing here.