Does the Ruling Class Exist?
A book review of
The Ruling Class: How They Corrupted America and What We Can Do About
It
by Angelo Codevilla (ISBN: 978-0-8253-0558-0),
The New Road to Serfdom
by Daniel Hannan, and
Get Out Of Our House: Revolution! A New Plan for Selecting Representatives
by Tim Cox (ISBN 978-1-934454-03-9)
Reviewed by Peter A. Taylor, October 31st, 2011
The danger is not that a particular class is unfit to govern: every class is unfit to govern.
— Lord Acton
There is a broad consensus nowadays that American democracy is desperately ill, but there are a number of competing stories about how to apportion the blame. Angelo M. Codevilla presents one of these stories in The Ruling Class: How They Corrupted America and What We Can Do About It. In his view, the good guys (the Country Class) outnumber the bad guys 2-to-1 (p. 86, or 85%-to-15%, p. xi), but the bad guys (the Ruling Class) have subverted democracy, largely by co-opting any outsiders who attain political office. In places (p. 69), Codevilla's story is astonishingly similar to the Occupy Wall Street (OWS) story (who claim to be part of a 99% majority):
...the upper tiers of the U.S. economy are now nothing but networks of special deals with one part of government or another.
The difference between Codevilla and OWS is the specific minority that they blame. Codevilla blames a political Ruling Class that wants wealth to be distributed politically. OWS likes wealth to be distributed politically, but feels betrayed because the political process doesn't produce outcomes they like, and wants to blame wealthy people in general, and in particular, wealthy people who don't pay lip service to the principle that wealth should be distributed politically. I side with Confucius here. The question should not be, "How much money do you have?" but "Did you acquire it honorably?"
In a country well governed, poverty is something to be ashamed of. In a country badly governed, wealth is something to be ashamed of.
I imagine attitudes towards the Objectivist banker, John Allison, as a sort of litmus test. Allison studiously avoided having anything to do with reverse mortgages or other predatory lending practices. He needed no bailouts. But he is wealthy and he is opposed to wealth being distributed politically. I regard him as a hero. I expect the OWS crowd to regard him as a villain.
But both the "neoreactionary" (Arnold Kling's term) Codevilla and the "progressive" OWS crowd believe in some sort of a malevolent Ruling Class. This is in contrast to
It's particularly difficult to reconcile Codevilla with Caplan, but I see evidence for both views. I tend to take Caplan's view on high-profile issues like Social Security (the median voter owns that big bucket of FAIL!). On low-profile issues, I tend to side with Codevilla. In many cases, especially on intermediate-profile issues, in order for special interests to get their way, they have to camouflage their predation behind high-minded appeals to regular voters. See Bruce Yandle on "Bootleggers and Baptists." Prohibition was great for bootleggers, but they needed help from the Baptists to get it passed. Lawnmower regulations are for the benefit of large, established lawnmower manufacturers, but they had to sell these by making disingenuous appeals for "safety." TARP (the Troubled Asset Relief Program) is an exception to this high/low rule, a case where a group of insiders appear to have gotten their way on a very high-profile issue in the face of massive public opposition. Immigration appears to be another exception.
But mostly this argument over whether the Ruling Class exists is a semantics argument. Maybe "clique" (p. x) would have been a better word than "class." "Class" sounds too much like "socio-economic class," which makes it sound too much like the OWS story that it's the wealthy people who are the bad guys.
As a reader, I feel pulled in several directions. Is the Ruling Class about money or power (p. 28)? Is it a comparatively small, venal group of professional rulers (Codevilla warns on p. 68 against trying to replace one group of professional rulers with another), or is it a comparatively large group whose salient characteristic is intellectual arrogance (p. 22)?
Rather, the sense of intellectual and social superiority over the common herd is arguably the main component of millions of people's self-conception. Such people can no more believe that a Christian might be their intellectual and moral equal than white Southerners of the Jim Crow era could think the same of Negroes.
I (not Codevilla) describe this group as "large" because I socialize with lots of arrogant progressive partisans who are nowhere near the levers of power.
Or is this about religion (Christianity) vs. quasi-religion (the latest bowdlerized version of Marxism)? Codevilla is jarringly defensive about his Christianity in several places in the book. Do I have to know someone or be rich and influential to be a part of the Ruling Class, or can I simply convert to it? Or is it like an army, and I can simply enlist?
Daniel Hannan, in The New Road to Serfdom, looks at the modern American Tea Party movement from a British perspective, and suggests that what we are seeing is the third act of the English Civil War (the American Revolution being the second act). I like this way of looking at modern politics because it calls to mind Thomas Babington Macauley's poem, "Naseby," a view of a crucial battle in the English Civil War from the perspective of a Roundhead infantryman who lets us know what he really thinks about the Cavaliers. Rather than talking about Codevilla's Country Class and Ruling Class, I prefer to talk about the Roundheads and the Cavaliers. If the Cavaliers are ever moved to ask, "Why do they hate us?" the answer is obvious. Roundheads hate Cavaliers not so much because of the latter's incompetence and venality, but because of their haughtiness and condescension. The modern Cavaliers respond to legitimate complaints and criticism (e.g. fiscal irresponsibility) with character assassination and libel (e.g. accusations of racism). The Roundheads hate the Cavaliers because the Cavaliers are so, well, cavalier.
The English Civil War analogy also suggests an answer to some of my questions about Codevilla. Codevilla writes (p. 86), "But America's majority long since withdrew its confidence from a class that has earned, and has no means of shedding, the image of pretentious, incompetent losers." How can an unpopular minority be so politically successful for so long? And how do I reconcile "incompetent losers" with their being "professional?" Are they a small group of insiders or a large quasi-religious movement? The answer is that, among the Cavalier forces, you really need to distinguish between the "officers" and the "enlisted men." People like Jim Johnson, Jamie Gorelick, and Angelo Mozilo are officers. There are relatively few officers. The overwhelming majority of people at OWS or at a typical Unitarian Universalist church are enlisted men. The officers may see substantial material rewards, but the far more numerous enlisted men fight for tribalistic or quasi-religious reasons. Non-conformist is to Catholic as Christian is to Marxist.
Alternately, we could borrow Bruce Yandle's "Bootleggers and Baptists" model. One problem with this is that you generally can't see inside someone's head well enough to be confident enough of his motives to be able to classify him. I think Barack Obama is a "Baptist" (a True Believer), but I know he is an "officer."
What about the middle of the bell curve? There is a large proportion of the voting population that claims to be independent and to despise the vicious bullshit of partisan politics. Both the neoreactionaries and the progressives claim to represent these people's interests and to have their support, except for the brainwashing and dirty tricks of some version of the Ruling Class. Hannan quotes a beautiful passage from Edmund Burke:
Because half-a-dozen grasshoppers under a fern make the field ring with their importunate chink, whilst thousands of great cattle, reposed beneath the shadow of the British oak, chew the cud and are silent, pray do not imagine that those who make the noise are the only inhabitants of the field; that of course they are many in number; or that, after all, they are other than the little shrivelled, meagre, hopping, though loud and troublesome insects of the hour.
Hannan also says that the main difference between the U.S. and Britain is that the U.S. uses primary elections, which tend to make U.S. political parties more responsive to public opinion than British ones. This supports Codevilla's view of U.S. political parties as being corrupt and unresponsive, up to a point. One also hears complaints from across the political landscape, including from intense partisans, that there isn't much practical difference between the major parties. This is also true, up to a point. The closeness of the major parties could be a good sign if it means that they are in intense competition for the median voter, but it is a bad sign if it means that they are both dominated by the same non-centrist ideology or special interests. Codevilla clearly believes the latter. In his view, what we have is a principal-agent problem. In Caplan's terms, Codevilla believes the politicians have too much "wiggle room" and are misusing it.
In contrast, consider this anonymous Czech view of the situation in the U.S. (via Natalie Arceneaux):
The danger to America is not Barack Obama but a citizenry capable of entrusting a man like him with the Presidency. It will be far easier to limit and undo the follies of an Obama presidency than to restore the necessary common sense and good judgment to a depraved electorate willing to have such a man for their president. The problem is much deeper and far more serious than Mr. Obama, who is a mere symptom of what ails America. Blaming the prince of the fools should not blind anyone to the vast confederacy of fools that made him their prince. The Republic can survive a Barack Obama, who is, after all, merely a fool. It is less likely to survive a multitude of fools such as those who made him their president.
My reaction is that Arceneaux's view is the more realistic. The Roundheads have been losing ground for the last 100 years because the Cavaliers have been able to field more infantry. The reason the Cavalier enlisted men feel betrayed rather than feeling that they are winning is because their policies are counter-productive. Prohibition doesn't cure men of character flaws, it merely empowers the bootleggers. Ex ante, progressives are usually in favor of bold government action, but ex post, they are usually opposed to the results, for which they refuse to take responsibility.
The reason the Roundheads feel betrayed is because the concept of "conservatism" is too ambiguous. Americans who self-identify as "conservative" may outnumber those who self-identify as "progressive" (or "liberal" in modern U.S. usage), but any politician who depends on these "conservatives" to exhibit a consistent pattern of support for limited government is in for a rude awakening. A politician who tells a group of "conservatives" that he wants to reform Social Security is likely to suddenly feel like he's in a Dr. Who episode, being chased by Daleks shrieking "Exterminate! Exterminate!"
A voter may be deemed "conservative" because he takes a Biblical view of homosexuality, even though he also takes a Biblical view of usury. A voter may be deemed "conservative" for being vaguely nationalistic, while being a big fan of FDR. Most likely, a voter may be "conservative" in the Hayekian sense of objecting to the speed at which a "progressive" politician wants to engineer the New Socialist Man, rather than having any objection to the direction of travel. What we need is a substantial majority of classical liberals. What we have is a large number of nominal Christians whose ideas about politics and economics are generally confused. As "Lifeofthemind" put it at Richard Fernandez' website, "What the totalitarians have succeeded in doing is poisoning the fruit of the wisdom of crowds." (Fernandez also has a book out, Storming the Castle, that appears to argue that the West is suffering from a principal-agent problem, but it is only available in Linux-incompatible electronic form.)
As a libertarian atheist, I would much rather deal with economically confused Christians than with progressives. A Christian's self-conception doesn't require him to stay confused about economics. A progressive's self-conception does. The latter's "sense of intellectual and social superiority over the common herd" is likely to be obliterated if he starts taking F. A. Hayek seriously. Thus "liberaltarianism" always seemed like a non-starter to me.
In the median voter's defense, the alternative to Barack Obama was John McCain. Codevilla is clear that the Ruling Class has captured the establishment in both parties. He described G.H.W. Bush (p. 25) as a "Pharisee" who told Gorbachev, "Reagan is a conservative, an extreme conservative. All the dummies and blockheads are with him." This party capture story gives some plausibility to the claim that conservatives have a genuine majority (and suggests that it would help to have more than two viable political parties). But the U.S. government has been dominated for most of the last century by the Democratic Party, and it's hard to argue that the Democrats have been closer than the Republicans to being a party of limited government during this time.
Codevilla also blames machine politics for the success of the Ruling Class (pp. 27-31). The establishment pays off its supporters with public money. Bills are long (e.g. a 2700 page health care bill) in order "to codify bargains" among the political actors.
Nowadays, the members of our Ruling Class admit that they do not read the laws. They don't have to! Because modern laws are primarily grants of discretion, all anybody has to know about them is whom they empower.
Machine politics could partially explain how an unscrupulous minority could maintain power in a democracy, but the effects of machine politics are like the effects of gerrymandering. Yes, it can make a difference, converting the support of slightly less than a majority into an electoral majority. But there are limits to the role it can play. A few swing voters can be bribed, but if you have to pay a large proportion of the voters in other people's money rather than with ego strokes in order to get them to vote for you, the losers will be very unhappy, and this gives your opposition a lot of wiggle room to make counter-offers (see The Calculus of Consent, by James M. Buchanan and Gordon Tullock, available free online). In order for machine politics to be more than marginally effective, the voters need to be "irrational" in some sense. One possibility is that the victims don't realize that they're being bribed with their own money (see again David Friedman, The Machinery of Freedom). Alternately, Tyler Cowan writes,
Parties will attempt to exploit voter self-deception and indeed we can think of parties as organized vehicles for this purpose (among other purposes). In particular, parties will try to buy off extremists by making it easier for them to self-deceive.
Glenn Reynolds calls this "fanservice." Or as Jamie Whyte put it,
Modern politics is just as you should expect it to be when votes are cast by ignorant people taking advantage of a low-cost source of emotional gratification.
These "party capture" and "machine politics" stories require ignorance and self-deception on the part of the voters. So we are back to Bryan Caplan's diagnosis: irrationality (lack of mental discipline) on the part of the voters.
This brings me to another book, Get Out Of Our House: Revolution! A New Plan for Selecting Representatives, by Tim Cox, and the GOOOH movement he has started. GOOOH attempts to be a non-partisan, bottom-up solution to the principal-agent problem. He claims (p. 3),
Eighty percent or more of the country is on our side.
There are two things Cox gets brilliantly right. One is that he has found a workaround for Duverger's Law. Duverger's Law states that the relationship between plurality elections (the type normally used in the US) and the two-party system comes as close as anything does in the field of sociology to being a natural law. A third-party candidate acts as a "spoiler," tending to draw votes away from the more similar major party candidate, which is futile when it is not actually counter-productive. Instead, Cox proposes to run candidates against the incumbents in either major party in Congressional (U.S. House only) primary elections. This doesn't run afoul of Duverger's Law because it doesn't actually create an independent political party, but if you believe that the problem with the two-party system is a principal-agent problem, then GOOOH achieves the principal objective of having a permanent, viable third party.
The other thing Cox gets right is that the major political parties' internal processes are at least as important as the voting system used in the general election. Instead of a conventional primary campaign, GOOOH holds a series of 10-person meetings that function like sports playoffs, starting from a broad base. Money and publicity would ostensibly be useless in this process. I expect that, once GOOOH demonstrates the ability to win primary elections, major political players will try to game this system, but GOOOH is bottom-up by design. The internal election system Cox proposes is a point system (similar to the "notorious" Borda Count), which I would recommend changing (e.g. to Instant Runoff Voting), but that's a small quibble.
Leo Linbeck III has some similar ideas with his Alliance for Self-Governance.I would describe Cox as a populist, or perhaps a "Hayekian" conservative, rather than as a neoreactionary, a libertarian or a consistent limited government conservative. One minute he's demanding limited government, and the next he's calling for 5%/year CO2 reductions (p. 106). Cox refers repeatedly (e.g. p. 240) to a Samuel Adams quotation,
If ever a time should come, when vain and aspiring men shall possess the highest seats in Government, our country will stand in need of its experienced patriots to prevent its ruin.
I think these "experienced patriots" Cox writes of are essentially the same people V. O. Key (?) described as "attentive voters." One model of political organization is that, on any given political issue (e.g. space policy), there is a sort of information pyramid. There is a small number of very well-informed people at the top, but the reason they are well-informed is because they have some special interest. At the bottom, we have the "mass public," who are numerous and have little or no conflicts of interest, but who are very poorly informed. Hopefully there are a moderate number of people in between, the "attentive voters," who have little conflict of interest but who are moderately well-informed. These are the sort of people one would want to have running political parties as much as possible, and a healthy political party would serve as an information conduit from the attentive voters to the mass public.
Cox seems to think that these attentive voters are a relatively plentiful resource, waiting to be rallied to the cause of better government. He also thinks that this will solve the problem (the principal-agent problem). I think that they are a scarce resource, and that they are already overworked. But the more basic disagreement I have with him is that I don't buy his diagnosis. I do believe that politicians and various special interests exploit the voters, but I think this has more to do with voter irrationality than with inadequate supervision on the part of the voters. As Caplan argues, rational voters would take their own ignorance into account when granting authority to the politicians, as rational buyers of used cars do when making an offer to a car seller (they bid low). In fact, if my politically active acquaintances are any indication, I'm afraid that most of the "attentive voters" I deal with may actually be a good deal less rational than the mass public.
Many cases of broken political promises are the result of politicians having made contradictory promises to different groups of voters. Is this evidence of a principal-agent problem or a voter irrationality problem? The voters don't seem to mind much. It's as if the main purpose of these promises is to maximize the number of voters who can claim bragging rights for "their" candidate winning, rather than because the voters actually care about policy.
My motive for wanting to get around Duverger's Law is that I want to restore the health of "the wisdom of crowds." Like Codevilla, Cox is also jarringly defensive about religion (pp. 78, 96), but there is a "religious" component to this. (See Guenter Lewy, Why America Needs Religion.) People have irrational tendencies, and part of the function of religion is to limit this irrationality and steer people in benign directions. For example, Catholicism teaches that envy is a sin. I view Progressivism as a quasi-religion that treats envy as a sacrament. I look to libertarianism as the antidote to progressivism, as a competing quasi-religion in some sense, and I look to the Libertarian Party (or some successor third party) primarily as a propaganda tool. The problem with our political duopoly (and Codevilla's incestuous Ruling Class) is not just that it limits voters' immediate choices, and sometimes ignores voters' wishes, but that it dominates and restricts the flow of ideas. Contrary to what Cox says, I regard the progressives (including their "compassionate conservative" fellow travelers) as controlling what I call society's "opinion-forming organs," or what Tom Wolfe called "the Clerisy." For example, anti-War on Drugs candidate Gary Johnson was shut out of the Republican presidential debates. Cox wants GOOOH to be non-ideological. For me, this partially defeats the purpose (although the opportunity to debate with other disaffected attentive voters is valuable, provided it is in addition to having a separate libertarian sanctuary). Cox wants common sense politics, where I think common sense is what tells you that the Earth is flat.
Cox also errs in overselling his system. He promises an end to pork barrel projects (p. 23). But bills are not written with the words "pork barrel" in their titles. In Kansas or Oregon, manned space might be regarded as pork barrel, but in Texas US House District #22, it is widely considered legitimate and essential. We can't end pork barrel because we can't agree on what it is when we see it. Thus we end up with overwhelming numbers of voters mad at Congress as a whole, but not mad at their own representatives, whom they almost always re-elect. The problem with Pete Olson from Kansas' standpoint is not that he doesn't represent his constituents' views, but that he does.
In places, Cox himself expresses frustration that politicians represent their constituents entirely too well. He complains that politicians won't do what is necessary to fix Social Security (pp. 73, 144) because they will lose their jobs. He goes to great lengths to ensure that GOOOH candidates who win election can be held to their promises, by force of law if possible. Yet he wants them to do unpopular things. He never reconciles this contradiction.
Cox is in love with term limits (e.g. p. 16). But think about "lame ducks" such as John Adams after Jefferson's election. Would term limits make the government more responsive or less? Or do they just encourage corruption? Political scientist Nelson Polsby (The New Federalist Papers) thinks term limits would shift power even further from elected representatives to lobbyists and permanent staffers.
I am not comfortable with either the Tim Cox (populist) or the OWS (progressive) story about money in politics, either from a philosophical or a practical standpoint. From a classical liberal, natural rights, "life, liberty, and property" standpoint, "crony capitalism" is generally a 3-player game. First we have a victim, someone whose natural property rights are being violated or threatened, typically a taxpayer, but often a consumer who is being coerced, or a landowner whose land is seized (e.g. for a football stadium). Second, we have the politician, entrusted with the task of protecting those rights, but who instead uses the state's coercive powers in order to violate them. I regard this politician as the main villain of the story. Morally, he is a violent criminal (using coercion). He is also a traitor. Third, we often have an accessory, typically wealthy, perhaps the owner of the football team, who may be a major campaign contributor to the politician, or performing any of a myriad favors, financial or otherwise. If players 1 and 3 are distinct, and player 3 is the instigator, this is de facto bribery. If 1 and 3 are the same person and 2 is the instigator, it is extortion. As Mike Munger explains,
Had a friend, Michigan legislature in the 1970s. At beginning of session they would put maybe 20 bills in the hopper, legislation on a particular industry. As soon as they received compensation from that industry, the bill would be removed from the hopper. Serious? Absolutely. Just understood. Liberal Democrat; says in retrospect it was a little embarrassing, but that was just the way things worked.
The usual progressive narrative makes the wealthy accessory (or in some cases the actual extortion victim) out to be the main villain, and tends to treat the politician as an innocent victim rather than a traitor. Any morality tale that blames someone for being wealthy rather than for engaging in coercion and treachery makes me deeply suspicious. It doesn't sound morally serious. It sounds like an excuse for robbery or a pogrom.
I get even more suspicious if the remedy being proposed for a violation of one person's rights is to curtail someone else's rights. And it makes me yet more suspicious if the proposed remedy is one that would be obviously ineffective, or worse, counter-productive or likely to create opportunities for further abuses. This brings me to the practical considerations.
The McCain-Feingold act has been nicknamed "The Incumbency Protection Act." It's apparent purpose is to suppress effective political speech. Public financing strikes me as a euphemism for self-dealing on the part of the government. The most one can reasonably hope for from legal restrictions on campaign contributions is to force wealthy donors to be more indirect, as with Hillary Clinton's cattle futures scandal (wikipedia version). Nelson Polsby suggests in The New Federalist Papers that a better approach to campaign finance would be to tighten up the reporting requirements. Bear in mind that the New York Times is owned by a corporation. Do you want to nationalize all of the newspapers in the name of "democracy?"
Then we have the problem known in the economics literature as "rent seeking," what David Friedman called "the economics of theft." Even if the politician gets no benefit at all from from the recipient of the taxpayers' money, we are still caught in the logic of rent seeking. For example, the amount of resources grant seekers spend competing with one another in preparing grant proposals tends to approach the value of the grants. Mike Munger calls this process a Tullock lottery. It's like an auction, except that you can't just "bid" on the prize, you have to actually spend the money, which from society's standpoint is wasted. We end up with Friedman's Second Law: "The government can't give anything away." In some circumstances, the amount wasted can exceed the value of the prize: the real world differs from Munger's classroom in that you don't necessarily have the option not to bid.
Do politicians tend to win election because they are well-financed, or do they attract donations because they are expected to win? The fact that major donors often contribute to both sides in an election suggests the latter. Maybe congressional elections are different from presidential elections, but according to Polsby and Wildavsky, (Presidential Elections 1988) in presidential elections, once a candidate gets the nomination of a major political party, there is enough money available for advertising that voters are effectively saturated, and at that point, differences in political spending are not very important. As they write on p. 48, "The problem, then, is not to explain why money is crucial, but, on the contrary, to explain why it is not." They also argue that voters in a general election are very heavily influenced by party affiliation (ie. Cowboys fans are pretty consistent in cheering for the Cowboys rather than their opponents), which also tends to make "late money" relatively unimportant. Money plays a much more important role in winning party nominations, when no candidate has a unique claim to his party label. (This is also an argument against plurality voting in primary elections. Other systems, such as Instant Runoff, don't have the same tendency to turn "front-runner" status, which can be bought with money relatively easily early on, into a self-fulfilling prophesy.)
The U.S. economy is worth trillions of dollars per year, and there is not much of it at this point that politicians can't jack with if they put their minds to it. If money spent on lobbying is generally effective in influencing the government, why doesn't the amount of money spent trying to influence politics approach the full value of the entire economy? We complain about political campaigns that cost millions. The challenge for economists like Dennis Mueller (Public Choice II, pp. 243-6) is to explain why the problem isn't five orders of magnitude worse.
The entire federal budget can be viewed as a gigantic rent up for grabs by those who can exert the most political muscle.... We are back to the need for fairly fundamental constitutional reforms to attack rent seeking seriously.
Cox blames money for having corrupted politics (p. 193). I think he's got it backwards. A breakdown of voters' respect for property rights corrupted politics, and the amount of money being drawn into the system is just a symptom. Cox envisions a country where money acts like it isn't interested in politics. But politics is still interested in money. Once voters have decided that wealth should be distributed politically, it's game on.
Hannan's book is the most pleasant of the three to read*. Cox's is the least. Hannan's tone is also quite a bit different from the other two. It is the difference between the politics of persuasion and the politics of mobilization. Hannan addresses himself to the typical American voter, including many of the people I am calling the "Cavalier enlisted men," and pleads to us not to follow our elites down the path they have been leading us. He sees American voters not so much having been betrayed, but merely misled by these Burkean grasshoppers. These "grasshopper" elites may be ideologues, and are not persuadable, but they are small in number, and rule only at the pleasure of the median voter. Codevilla and Cox, on the other hand, are committed to the view of America's problem as a principal-agent problem. Theirs are stories of betrayal. They believe the Roundheads already have overwhelming numbers and are trying to mobilize them.
But even Hannan, I think, lets the median voter off too easily, as rational, but having been misled. Social Security is probably the clearest example of where Caplan's irrational voter story beats the principal-agent story, and I don't think the "bad leadership" story is tenable here either. In my view, politicians can't reform Social Security because they can't talk about it honestly, and they can't talk about it honestly because the median voter doesn't want to admit a basic fact: Grandpa is an embezzler. My grandparents' generation hired politicians to force their neighbors' children to intermingle their savings with the older generation's, and then the older generation ran off with the lion's share of the money. Cox proposes giving parents proxy votes for their underage children (p. 145), but it's not clear why he expects the second generation to treat their children any more honorably than the first generation did. The second generation appears to hope to be able to retire and die before the system collapses, consigning the third generation to "the devil and statistics." But self-deception is such that they do this with a clean conscience. As Frederic Bastiat put it centuries ago,
Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.
I concede that TARP is strong evidence that we have a principal-agent problem. But the financial problems associated with entitlements like Social Security are far worse, and these appear to be entirely the result of voters wanting to believe in Bastiat's "fiction."
American voters, this FAIL belongs to you. Own it!
* Hannan also quoted a verse from Rudyard Kipling's poem, Norman and Saxon:
The Saxon is not like us Normans. His manners are not so polite.
But he never means anything serious till he talks about justice and right.
When he stands like an ox in the furrow — with his sullen set eyes on your own,
And grumbles, 'This isn't fair dealing,' my son, leave the Saxon alone.