The limits of the state

Another post prompted by my recent reading.  In this case, two very different books about the role of the state:

The Tyranny of Utility should probably be read by all those in the sorts of public agencies and departments that dot Wellington and other capital cities, and which offer advice, and champion public action, newly-inspired by the insights of behavioural economics. As Deirdre McCloskey writes in her blurb “Saint-Paul stands courageously in the middle of the new road to serfdom” –  the no doubt well-intentioned paternalism that puts little or no intrinsic value on freedom, including the freedom to fail or to choose ‘badly”, in diet, education, health, savings, or speech or whatever.  As Saint-Paul notes, it is a critique of the economics approach more generally, which “does not value individual freedom per se”, only as an instrument or means.   it It is a bracing critique, and perhaps the more encouraging for coming out of France, which has been a bastion of statism.  If there is less new than in Piketty, the rather more prominent French economist, a larger proportion of this book would withstand close scrutiny.

The Fourth Revolution is written in that brisk, slightly breathless, style that characterises The Economist.   They gather a lot of interesting material, including potted accounts of interesting experiments from around the world, although for me the value in the book was as much the scrawls of disagreement that it prompted in the margins.  There is a huge degree of China-boosting that seems to lose sight of both the corruption and injustice that riddles the Chinese system, and of the fact that it will be decades, if ever, until China again approaches the living standards, and levels of productivity achieved in the West.  Singapore is lauded, but it would have been interesting to have included some discussion of Taiwan: I don’t think it is mentioned at all, and yet with more democracy and more-market than either Singapore or China it has been a hugely successful story, despite its awkward relationships with most countries.  The authors don’t directly address the sorts of issues Saint-Paul raises, and I suspect they can’t quite make up their minds what the role of the state is, or should be: at times they worry that “the state will keep on expanding,gradually reducing liberty”, but in other places they seem enthusiastic about local councils in Britain that place tight restrictions on what can and can’t be put out for rubbish collections.  More than I would, the authors emphasise fiscal policy and the need for entitlement reform. Perhaps that reflects North Atlantic priorities.  But they give too little weight to the seemingly inexorable, and probably more threatening rise, of the regulatory state.  And barely any attention at all to the incentive and knowledge problems – too easily ignored or assumed away by the well-intentioned – that bedevil so much of what government does.  Government is as double-edged sword –  and the side that is the biggest threat to life, liberty, freedom (and affordable housing in our big cities) does not get anywhere enough weight in this book.

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