Why 2021 is Making Me Nervous

John Stuart Mill once gave expression to what he felt was a commonplace, namely that:

a party of order or stability, and a party of progress or reform, are both necessary elements of a healthy state of political life; until the one or the other shall have so enlarged its mental grasp as to be a party equally of order and of progress, knowing and distinguishing what is fit to be preserved from what ought to be swept away. Each of these modes of thinking derives its utility from the deficiencies of the other; but it is in a great measure the opposition of the other that keeps each within the limits of reason and sanity.

For limited creatures like us, wisdom in politics requires that we face opposition from those who see things differently. Because we are narrow-minded and partial beings, approximating truth in politics must take the form of “the rough process of a struggle between combatants fighting under hostile banners.” 

James Madison was more skeptical of this kind of combat, at least in democratic contexts. He feared that competition between factions (groups organized around sectarian ideologies) might result in one becoming dominant. If it did, a purely democratic government would tyrannically enforce the interests of the dominant faction, at the expense of the common good. The remedy, Madison thought, was to adopt a republican constitution capable of cooling factional disagreement. Only a system of checks and balances, including a formal separation of powers, could stop a dominant faction from becoming tyrannical.

And yet Madison was clear that this remedy was unlikely to be successful absent a diverse civil society composed of competing factions vying for representation in government. Inspired by Mill, we might say something somewhat stronger: the powers of government, once separated, ought not to be distinct merely in the sense that they lie in different hands, but also in the sense that those in whose hands they lie have conflicting visions—some conservative, some progressive, say. Without this tension, we might worry that political change will happen more quickly and with less foresight and minority input than is desirable.

It’s true, of course, that executive, legislative, and judicial allegiance to the constitution can itself provide some source of tension independent of any substantive policy disagreements. (We saw, for example, that a court composed of largely Republican appointees was nevertheless able to restrain some of former President Trump’s more extreme excesses.)

But when many of our political disagreements are precisely over the interpretation of that founding document and the degree to which it constrains legislative, executive, and judicial bodies, it’s not hard to see that a legislature which shares the political goals of an executive which shares in turn the political goals of a judiciary might be less likely to “check” one another than they might be in the presence of more disagreement. 

This brings me to the respect in which the politics of the moment make me nervous. 

Along with a Democratic executive, we have a House of Representatives with a sizable Democratic majority and a democratically controlled Senate. The latter has an increasing capacity  to pass legislation with no Republican support.

Currently, the largely Republican appointed judiciary is the only source of robust “opposition” in the sense sketched above. In normal circumstances, it might be enough. And yet, there are increasingly loud calls for congress to “pack the court” as a means of sanctioning recent republican opportunism. If these calls are heeded,  the court would lurch leftward as well. 

Naturally, even in the event of a packed court, recourse would remain to the less formal civil society checks on majority excess the founders thought so important. But many of the most prestigious media outlets exhibit a bias friendly to the Democratic Party. So too with social media platform executives. And the leftward tilt of most colleges and universities indicates that they are only inadequately positioned to provide an appropriate counterweight. Commercial interests, long opponents of progressive economic policies, are coming around on many of them.  To make matters worse, the broader population, still reeling from the pandemic, is more welcoming of government action than usual, creating a kind of popular authorization for some fairly radical changes to economic policy

It isn’t, then, merely that we have a government increasingly in the control of persons with a predominantly progressive vision. We have a civil society, the major aspects of which also share that vision. 

Moreover, things aren’t likely to improve in this dimension, at least not in the medium term. The republican party platform (to the extent that there is one) is massively unpopular among young voters. Its flirtation with xenophobia will make it unpopular with immigrant voters. It has long lost favor with racial minorities and women. Thus unless the Democratic Party fractures along the fault lines it is clearly showing (or the GOP recovers some sense of itself), I imagine that we’ll see a sustained period of single-party dominance in each branch of government. Absent a cultural shift that seems as unlikely as it might be undesirable, our civil society will continue to lean heavily in a progressive direction.

Some might hasten to say that the GOP itself bears the primary responsibility for all of this. And they’d be (at least partially) right. The party has ceased being a principled proponent of limited government. It has become increasingly willing to wield its power to arbitrarily punish commercial actors that it dislikes (even when this is anathema to its stated commitments). We witnessed this in Trump’s lashing out at big tech firms and abuse of executive orders, and we’re seeing it now, as major GOP actors opportunistically threaten the MLB with sanctions for its recent opposition to Republican legislation.

But though the Republican Party may bear primary responsibility for the state of affairs that has me worried, it would be shortsighted to celebrate its (perhaps deserved) decline—at least so far as one is moved by the Millian reasons rehearsed above.

Montesquieu famously wrote that “every man invested with power is apt to abuse it, and to carry his authority as far as it will go.” The above reflections suggest that democrats have a substantial mandate for exercising their own newly won authority. And yet one does not have to be as pessimistic as Montesquieu was to worry that the accountability mechanisms of the current climate leave something to be desired. 

Those yearning for an end to gridlock may, in short order, have their wish. For those of us who appreciated the virtues of slowed political action, little is left but to hope that we are every bit as paranoid as we sometimes seem to our critics. The well-being of the nation depends on it.

Free Speech and Anti-woke Legislation

In a recently published paper, I defend what I call U.S. free speech exceptionalism (FSE) against recent objections from philosophers. FSE refers to the constellation of legal norms and precedents that makes it difficult in the United States to prohibit various kinds of undesirable speech. In the U.S., for instance, hate speech is protected as is much obscenity and defamatory speech that is liable to legal limitation abroad.

Critics of FSE often worry that it is irrational. After all, the reason to constitutionally protect free speech is that doing so realizes several crucial positive goods. These are varied, but a typical list will include (among other things): discovery of the truth, autonomy, diversity, and enabling better democratic deliberation. But—and here’s the problem for FSE—it is easy to imagine that there are circumstances in which we better achieve those goods by limiting, rather than protecting, speech.

Far from promoting truth and democratic deliberation, FSE tolerates misinformation (including false defamatory or libelous statements uttered in the absence of actual malice). Far from promoting diversity, FSE tolerates hate speech, which issues in patterns of exclusion and dignitary harm. Far from promoting autonomy, FSE tolerates demeaning pornography which silences women where it can most matter to hear them speak.

One response on the part of FSE is to deny all of this. Another is to say, sure, there’s bad speech. But the best response to bad speech is more, better speech. I’ve never found these replies satisfying. The best response, in my view, is to own up to these facts, admitting that free speech does not always advance the values that justify it, admit that more speech will not always be forthcoming, and to say that, nevertheless, FSE deserves our allegiance. In virtue of what?

You can read the paper for the full answer, but the short version is that we should accept FSE because departing from it creates new powers on the part of governmental bodies to act in tyrannical ways. (As J.S. Mill recognizes in chapter 5 of On Liberty.) Knowing what we do about human psychology and political power, we have good reason to think that these new powers will be wielded against unpopular minorities. Even if we are convinced that the people that wield the powers in the near term will use them for good, perhaps progressive, ends, we should not be very confident that future leaders will. More than that, we should expect that those silenced by the good people in charge now will be eager to vie for power themselves and silence those who silenced them. By hypothesis, those silenced will not deserve that kind of treatment.

It’s easy to respond to this argument with skepticism. Indeed, I’ve received plenty of sideways glances when I’ve told people why I’m a fan of U.S. free speech jurisprudence.

Well, the politics of the moment has seen an uptick in proposals for legislation that, I think, makes the argument credible. Such legislation aims to suppress the proliferation of radical ideologies. A bill currently under debate in New Hampshire is a good example. It would make it unlawful for a state agency (or contractor thereof) to advocate for or train persons to believe certain tenets of critical race theory, among other things. To take a concrete example, the law would arguably bar a public university from paying a speaker who thinks that the history of the United States is inherently racist. There are several proposed laws like this. Jeffrey Sachs calls them the new anti-woke laws.

At least some of these laws seem to me unconstitutional, violating first amendment rights of educators, contractors, and state employees. For that reason, I do not expect them to be passed (at least not in their current forms). If they are passed, I expect them to be struck down by the courts. But these expectations are expectations formed in a context in which the judicial commitment to FSE remains strong. Weaken that commitment, and I’m less sure.

Liberals worried about these kinds of laws should renew their faith in strong protections for free speech and norms tolerating heterodoxy. Conservatives inclined to support these laws (due to worries that state agencies sometimes use their power to promote fringe ideologies) should instead embrace the constitutional norms that would in some cases lead to their being struck down. For eroding those norms will also make space for progressives to gain power and legislate in similar ways regarding “reactionary” ideology.

Mill was right when he observed that liberal toleration for freedom of speech was rarely principled. He saw this clearly in the reformation, when it was clear that early Protestants usually held toleration up as an ideal only when they perceived their powerlessness to impose their ideology on others with impunity. Generally, the human disposition to “impose [one’s] own opinions and inclinations as a rule of conduct on others”, Mill writes, is “hardly ever kept under restraint by anything other than but want of power” (OL: 13).

But it doesn’t have to be this way. Instead, we could embrace the imperfect modus vivendi that is FSE and convert opportunistic support for toleration into principled support. This, rather than attempting to sustain political power longer than our enemies (Sachs’ proposal), seems like the best way forward for our imperfect political union. Or so it does to me.

* Note: Thanks to Andrew J. Cohen for feedback on an earlier version of this post.

Personal Responsibility, Moralism, and The American Right

Consider the idea that individuals ought to try to be self-reliant, willing and able to take responsibility for themselves and their loved ones.  This used to be thought of as a reason to oppose state assistance (welfare, food stamps, etc.), and so a reason to oppose “liberals” of the sort in the US Democratic party.  Those liberals, the story goes, pushed the view that the government was there to ensure your well-being, enabling you to reject personal responsibility. 

Notice, though, that a central tenet of the new American right—common to former President Trump’s followers and many of those who rejected him—is a hostility toward and skepticism of immigrants. Those with this skeptical stance seem to believe immigrants are somehow likely to be criminals, simply too different from us to be allowed to join our society, likely to try to replace Christianity as the main religion, or likely to take “our” jobs.

This anti-immigrant stance, it seems to me, is quite opposed to an ideal of self-reliance. Instead of relying on themselves for their well-being, these opponents of immigration allow themselves to be upset about immigrants and happily rely on the federal government to keep out foreigners—as a way of (supposedly) protecting their (or what they see as “our”) well-being, which it seems, is too fragile to deal with immigrants.

While protection from genuine (harmful) criminal activity is always a reasonable concern, there is little reason to believe immigrants are more likely to engage in such behavior than are than non-immigrants. (See this and this, for some discussion.) But leave that aside; it’s clearly not the only concern and its not an invocation of a nanny state (nor of moralism).

Many of those who oppose immigrants seem to think they are simply too different from “us” or are likely to be committed to a religion that would compete with Christianity in some problematic way. They think that their (or “our”) way of life must be protected; they may think our Christian (or, they might say, “Judeo-Christian”) values must be protected.

Finally, these opponents of immigration may think immigrants will take their jobs (or the jobs of other compatriots)—and thus want the government to keep out immigrants as a way of protecting “American jobs” (and salaries), and thus, their well-being and that of their fellow “real” Americans. Such people seem to fear they cannot compete with immigrants in the picture—either for the jobs they currently have but fear immigrants will take, or for other jobs they might apply for.

My point here is that those on the right adopting an anti-immigrant stance seem happy to rely on the federal government to guarantee or at least promote their welfare. They worry about the erosion of “the American way” and want the federal government to assist them in fending off that erosion. This is not being self-reliant. Self-reliance in this picture would be to think something like “well, things change; I will change along with them as needed.”

One possible response to what I’ve said would be something: “Look, one happy side-effect of keeping out immigrants is (we think) that we do better, but that isn’t why we want them kept out (or ‘limited to legal immigration’—but when the laws are made more and more constraining, there is no real difference). We don’t want them kept out to protect us as individuals, but to protect (as you said) the American way and Christian values. So it’s not about rejecting personal responsibility at all.”

If the response works, it shows that the criticism of rejecting self-reliance and welcoming the nanny state (that the right has traditionally criticized) is not a fair criticism of the anti-immigrant right. It would, though, leave the anti-immigrant right wholeheartedly endorsing a moralism of the sort that I have discussed in previous posts (for example, here). It leaves them committed to a goal of getting other people to do, believe, or live as they want, without any concern for those others as individuals or the rights they supposedly believe we all have. The goal is just to impose their preferred way of life on others. The desire some of us might have to marry or hire someone from another country is simply deemed unworthy.

In a nutshell, the anti-immigrant stance by those on the right commits them to either preferring a particular sort of nanny state that protects them from cultural changes, challenges to their religious beliefs, and competition for jobs OR its a disturbing moralism that demands legal assistance to protect the “moral fabric of society” where that “fabric” is really just their preferred way of life without those cultural changes, challenges to their religious beliefs, and increased competition for jobs. Stated that way, the two options seem not very different. The moralism is, after all, an insistence that the their desired way of life be imposed because they like it and the way of life it provides them–so the nanny state ought to protect it. It might be pitched in terms of what is good for society overall rather than what is good for some group of individuals, but that pitch is exceedingly weak. None of this should be acceptable to those advocating personal responsibility, self-reliance, and individualism.

*Note: Thanks to A.I. Cohen and J.P. Messina for comments on a draft of this post.

For more on immigration, see Bryan Caplan’s book and, very soon, Chandran Kukathas’s. (RCL earns commissions if you buy from these links; commissions support this site; we make no profit from them.)

Moralism, Nationalism, and Identity Politics

In a previous post, I began discussing moralism, which I take to be a commitment to the view that some acts must be forbidden, socially or legally, because they are (a) judged wrong by the general populace, (b) in some way opposed to the continued survival of the community qua a somehow unified group (I had said “general populace,” but this is clearer), or (c) simply immoral even if no one is hurt by them.

I have been seeing, once again, posts on social media about the loss of national identity (and praise for a few places that seem to still have such). My response to such posts is always the same: why would anyone value a national identity? That is the same response I have to those who seem to identify with a political party, ideology, racial or cultural groups, groups with the same sexual preferences, etc. I always wonder why anyone thinks that a group has any independent substantive value rather than just being a set of people that happen to share something in common.

Identifying with a group could just be recognizing that one has something in common with others (those also in the group), but it—or “taking a group identity”—has become something more. It is, we might say, an entryway into valuing that group for its own sake—that is, it’s the starting point to thinking of the group as having some value above and beyond the value of the individuals in the group. Nationalism is no exception—the whole point (it seems to me) is to encourage people to think of the nation as an entity of moral value all its own. Granted, that value is meant to be somehow good for the people within the nation, but how that works is mysterious. (But not to the point here.)

What do those who bemoan a loss of national identity (or who seek to revive such) want? They want to convince others to live as they think all ought to live. Or at least how all who live here ought to live. This looks like the first sort of moralism—they believe those who act differently are somehow acting wrongly. But what is it that they do wrong? So far as I can tell, it is nothing more than the refusal to live as the advocates of nationalism want.

Why are advocates of nationalism so concerned about people acting differently? This is where the second sort of moralism comes back in: what nationalists want is to be assured their group will survive; they thus fear anyone not going along with them as it means their national group does not have the allegiance of everyone and is thus threatened. It is the survival of the group that matters, after all, not the survival of the individuals within the group.

To be clear, so far as I can tell, nationalism is no different from any other form of political identity. Each group wants all of its members to “fall in” and be what the group is self-portrayed as. Those who act differently or in any way challenge the supposed identity of the whole are a problem to be dealt with, perhaps excised from the group, excommunicated, shunned, cancelled, or deported; perhaps (the topic for a future post) jailed or killed. Here I note only that I prefer the liberal ideal: I like that we live in a society with people who have different backgrounds, beliefs, religions, heritages, skill sets, etc. 1000 flowers blooming is far more attractive than 1000 clones.

The Minimum wage and symbolic behavior

President Biden wants to raise the minimum wage (MW) to $15. Many politicians, labor unions, and others support this policy. The non-partisan Congressional Budget Office, however, predicted that raising the MW will cost 1.4 million jobs.

Economists already knew this, of course. By a simple application of the law and supply and demand we can predict that raising the MW will create unemployment: if employers are forced to raise their salaries they will hire less workers.

To be sure, the literature is not unanimous. A well-known paper by Card and Krueger used empirical data to question the conventional wisdom that the MW reduces employment. However, their findings have been repeatedly challenged (see especially here). I cannot adjudicate the issue here, but an intellectually honest examination (such as the one conducted by the CBO) must acknowledge that, given the extant specialized literature, there is at least a serious probability that raising the MW will cause unemployment.

Yet, in my conversations with supporters of the MW I have found a stiff resistance to even consider the objection. Some deny that the MW causes unemployment, often citing the Card & Krueger paper. This position is implausible if the MW supporter refuses to consider the evidence and arguments against Card & Krueger, especially given that the weight of expert opinion is on the other side. An honest observer should not cherry-pick the evidence and at the very least remain agnostic or cautious in support of the MW.

But caution is not what we see. Setting aside the evidence, some say that the MW is required for moral reasons. This is an interesting position, because it seeks to block empirical considerations in the evaluation of the MW. This is odd, however. If the MW has bad consequences, what could possibly be the non-empirical reasons in its favor? Maybe this one: support for MW expresses support for the poor, here represented by the lowest-wage earners. But if the MW causes unemployment, that means that by supporting the MW one fails to support the poor, since the unemployed are generally poorer than the MW earners.

Maybe the MW supporter can argue as follows:
(1) No one knows for sure if the MW creates unemployment.
(2) Supporting the MW expresses solidarity with the poor.
(3) Expressing solidarity with the poor is noble.
(4) Therefore, I am justified in supporting the MW, since in doing so I perform a noble action that does not have obvious bad consequences.

The two first premises are questionable. Premise (1) misrepresents the status quaestionis, as I indicated earlier. Economists have studied the issue, and the consensus is that there is at least a serious question that the MW will reduce employment. Premise (2) is dubious, because the expressive value of MW support is entirely parasitic on the mistaken belief that raising the MW helps wage earners without producing any bad consequences. This is a violation of Hazlitt’s injunction that in order to evaluate a policy, we must consider not just its effects on the group that benefits, but also its effects on other social groups. A policy must be evaluated by both its seen and unseen effects. Since (1) and (2) are false, (4) is false.

If the MW supporter instead claims that those already employed are morally deserving beneficiaries of the raise, then he must not only justify why them, and not others, deserve this benefit, but, as important, openly acknowledge that the policy will hurt many others. MW supporters never do this. They just deny or ignore these bad consequences.

I happen to believe that the best explanation of why many people support the MW despite the evidence is that they are grandstanding. They signal their compassion by taking advantage of the ignorance of the public about the functioning of labor markets. This is an instance of discourse failure: the public assertion of a falsehood where the speaker has truth-insensitive reasons for saying what she says.

But even taking the MW supporter at her word, that there are non-empirical, or moral, reasons for such support, the position doesn’t hold. Symbolism may have a place in certain contexts. Think, for example, of a public expression of solidarity with victims of genocide. Even if such act does not save the victims, the symbolic expression of support may be an appropriate or commendable act.

But symbolism has no place in the realm of economic policy, where outcomes control. If people support the MW in the name of helping workers, and it turns out that the MW hurts more workers than those it helps, then that should end the debate.

The goal of corporations should not be maximizing profit for shareholders

Back in 2019, the Business Roundtable, a nonprofit whose membership comprises most of the US’s top CEOs, issued a statement endorsing the view that the purpose of the business corporation is to deliver value to all stakeholders, not just to advance the interests of shareholders. The World Economic Forum, best known for hosting an annual winter meeting in Davos, Switzerland for bigwigs from business, international politics, and journalism, has also declared its allegiance to the stakeholder approach to corporate governance. Some advocates have celebrated these announcements as a shift toward a more enlightened form of capitalism.

Classical liberals and defenders of free markets are suspicious of stakeholder capitalism–rightly so, in my view. The relationship between a corporation’s management (i.e., its officers and directors) and its shareholders differs in important respects from the relationship between a corporation’s management and its non-shareholder stakeholders. Notably, management has a fiduciary duty to run the firm according to the interests of its shareholders that does not apply to non-shareholder stakeholders. Stakeholder approaches to corporate governance deny this, or at least neglect it.

But market-sympathizing skeptics of stakeholder theory go too far when they insist that the only proper goal for a corporation’s management is to maximize profit for shareholders. In his recent Wall Street Journal op-ed criticizing stakeholder capitalism, Alexander Salter writes that profits “are an elegant and parsimonious way of promoting efficiency within a business as well as society as large.” I agree with that. But Salter continues: “Stakeholder capitalism ruptures this process. When other goals compete with the mandate to maximize returns, the feedback loop created by profits gets weaker.”

It is one thing to claim that the profit motive is an important component of a proper understanding of business corporations, or that management of a corporation owes a fiduciary duty to shareholders. An adequate understanding of corporate purpose clearly needs to account for these facts. However, it is quite another thing to say that corporate purpose boils down to a mandate to maximize returns for shareholders. This is not a defensible claim, and defenders of market institutions and the profit motive should stop making it.

Consider the following cases, which are stylized simplifications of real life situations:

  1. The e-cigarette company Juul can either (a) maximize profit by maximizing its appeal to potential young smokers, developing flavors and social media marketing strategies that appeal to adolescents and young adults (who, if addicted to nicotine at a young age, are likely to remain customers of nicotine products for the rest of their lives), or (b) settle for less profit by eschewing the younger demographic, and actively seeking market share only among older cigarette smokers for whom e-cigarettes function mainly as a replacement for smoking combustible tobacco.
  2. River Blindness is a disease caused by a parasitic worm that results in severe discomfort and, eventually, blindness. The drug company Merck has discovered a new drug, Mectizan, that prevents River Blindness. However, Merck knows it will not be profitable to bring Mectizan to market–River Blindness is only common in economically less-developed countries in the tropics, and those who suffer from River Blindness are too poor to pay a price for treatment drugs such that it would be profitable for Merck to produce them. Merck can either (a) maximize profit by not devoting any further resources to developing and producing Mectizan, or (b) settle for less profit by devoting some of its resources to developing, producing, and distributing Mectizan.

It seems to me that there is a strong argument to be made that the right choice in both of these cases is (b), the non-profit maximizing choice. At least, that’s my intuition. Intuitions about cases like these seem to provide reason to doubt that we can reduce business ethics to shareholder value maximization. If I am right, it is not just that there are moral and legal restrictions on what firms can do in pursuit of profit maximization—which I take to be obvious—but that the very idea of profit maximization is misguided way to understand what the purpose of corporations should be. 

Of course, when we’re trying to adopt well-justified ethical beliefs, intuitions are more like the first words than last words, and further reflection may prove our intuitions wrong. So let me briefly consider, and respond to, a few objections.

 A defender of shareholder value maximization might argue that cases like the Juul scenario can be addressed by adding constraints to the imperative to maximize profit. People who say corporations should maximize shareholder value don’t think corporations can employ just any means at their disposal for the sake of profits: Milton Friedman , for example, in his famous essay in defense of the profit motive, mentions rules “embodied in the law and those embodied in ethical custom” as legitimate constraints on profit-seeing. The US and many other countries already have laws in place prohibiting marketing and selling nicotine products to youth. Those who advocate shareholder value maximization defend pursuing profits within the rules of the game established by the law. So they arguably have the resources to justify choice (b) in the Juul case.

There are a couple of issues with this response. First, it seems to rely on an unduly optimistic picture of laws and law-making processes in the real world. We can’t depend on flawed political systems to establish definitively what kinds of business conduct are beyond the ethical pale—in a world in which some laws are unjust, it’s naive and dangerous to rely too heavily on the law as a minimal baseline for morality. Second, even if there are laws prohibiting marketing and selling tobacco products to individuals under the ages of 18 or 21, that doesn’t mean that it is straightforwardly permissible to attempt to maximize returns by figuring out the most effective ways to get 19 or 22 year-olds addicted to your product. It may be permissible to sell addictive nicotine products to young adults of a certain age—I think it is, at some point—but that doesn’t mean that the right way to approach such transactions is to try to literally maximize the profit they generate. Of course, defenders of shareholder value maximization could follow Friedman and appeal to ethical custom, in addition to the law, as a legitimate source of ethical constraint on profit maximization. But then there’s some serious work to do in specifying the content of these ethical customs. And, of course, the resulting view is going to be pretty different from what most people are likely to understand when somebody says that the only proper purpose of corporations is to maximize profits.

Unlike the Juul case, case 2 involving Merck doesn’t just implicate constraints on how profit may be pursued. Justifying non-profit maximizing choice (b) in the Merck case would seem to require endorsing Merck’s pursuit of a goal other than profit maximization, rather than just endorsing a constraint on how Merck may permissibly pursue profit.

Defenders of shareholder value maximization might say that, while producing Mectizan seems like a nice thing for Merck to do, it’s not the proper function of a shareholder-oriented corporation like Merck to be diverting some of its resources from profitable employments expected to produce returns for shareholders to charitable employments that are not.

I’ve already said that I agree that an adequate normative account of organizations like Merck requires recognizing a fiduciary duty on the part of management to run the organization in a way that’s broadly in the interests of shareholders—we should not expect companies like Merck to mainly pursue charitable initiatives. But what reason do we have for thinking that it is never even permissible for companies like Merck to devote corporate resources to good charitable causes, as a commitment to shareholder value maximization would appear to imply?

Some people think that the answer is found in the law: corporations are under a legal obligation to maximize shareholder value. But that’s not true. Neither state corporate law, nor typical corporate charters, impose a legal duty on corporate managers to maximize returns for shareholders. In fact, corporate law contains a well-established doctrine called the business judgment rule, which holds that courts will not second-guess decisions made by a corporation’s board of directors, even when those decisions predictably reduce profit or share value (as long as the board makes reasonable efforts to become informed and avoids personal conflicts of interest).

Some people think that shareholder value maximization is required because corporations are owned by shareholders. But the legal ownership rights shareholders have over corporations are highly attenuated: (1) they are residual claimants (i.e., if the corporation is wound down, they are entitled to whatever, if anything, is left over after it has met all of its contractual obligations), and (2) they have the right to elect and remove directors. Even these rights are extremely limited: for example, in practice, the costs of mounting a proxy battle for corporate board seats are insurmountable for dispersed shareholders. So it does not appear that shareholders’ ownership of the corporation, such as it is, can justify shareholder value maximization in a way that avoids begging the question.

It may well be permissible to establish and run a corporation that adopts shareholder value maximization as its single goal (provided that the corporation also adopts appropriate constraints on how that goal will be pursued). But defenders of shareholder value maximization argue for something stronger: that it is impermissible for corporations to adopt goals other than maximizing shareholder value. But why should we think that? What is wrong with people voluntarily coming together to participate in a corporate entity that adopts the goal of seeking profit along with other goals (e.g., for Merck, improving “the health and wellness of people and animals worldwide”). It seems, well, illiberal to insist that the only goal that corporations may adopt is maximizing shareholder value. Says who? On what authority?

To return to the point from Salter’s op-ed, it may well be the case that agency costs make it difficult to effectively monitor and control the management of firms that adopt multiple goals, rather than the single goal of maximizing profit. But it’s an empirical question whether some business organizations are able to successfully overcome this impediment to effectively serving their goals. The point about agency costs, though important, does not allow us to dismiss the possibility of an efficient and effective corporation that pursues goals other than just profit a priori.

Critics of stakeholder models of corporate governance are right to highlight how stakeholder views fail to account for the importance of the profit motive in market contexts, or for the special fiduciary duty that corporate management owes to shareholders. But we can recognize these truths without adopting the extreme and untenable position that the only thing corporations should be doing is maximizing the value they deliver to their shareholders.

I would like to dedicate this post to Waheed Hussain, who died recently at a tragically young age. Waheed was a philosopher at the University of Toronto. His writings about business ethics, including an article referenced in the post above, have taught me a lot over the years.

I would also like to thank Andrew J. Cohen for his feedback on an earlier draft of this post.

Is it Useless or Wrong for Libertarians to Vote For Pro-Liberty Candidates?

Some libertarians believe that voting is wrong because it makes you complicit in the state’s oppression. This argument goes back to 19th century abolitionists, most notably William Garrison and Wendell Phillips, who argued that even voting for an abolitionist, anti-war candidate makes you complicit in the oppression of the state. This is because all government officials have to take an oath to uphold the pro-slavery Constitution, and judges have to enforce its pro-slavery provisions, such as the one that “required states to return runaway slaves to their master (Art. 4, sec. 2)”. An oath, according to Phillips,  is a “contract between him [the official] and the whole nation.” Even if the official’s aim in seeking office is to ultimately bring about a Constitutional amendment to end slavery, he has to support the Constitution till he succeeds (Garrison). So if you vote for a candidate, you will be partly responsible for his pro-slavery oath and actions. “What one does by his agent he does himself” (Phillips).

Garrison’s and Phillips’ arguments work, if they do, only if they are right that the Constitution is pro-slavery. But if it is anti-slavery, as Lysander Spooner and Frederick Douglass argued, and your candidate shares their belief, your vote for him does not make him – or you – complicit in supporting oppression.

However, even if the Constitution is pro-slavery, and your candidate believes that it is, he also knows that the Constitution allows speech critical of slavery, and thus of the Constitution. The Constitution also provides a process for amending it, and allows people to run for office in order to amend it. In other words, even if the Constitution is pro-slavery, it contains within itself the seeds of its own reform. So fidelity to the Constitution by someone committed to doing his part in ending slavery does not entail support for its pro-slavery provisions. Rather, it entails a rejection of these provisions. Hence, if this is why an anti-slavery candidate runs for office, he is not complicit in the oppression of the state, and neither is the voter.

We don’t have slavery any longer, but Garrison’s and Phillips’ rejection of electoral politics is still influential. Contemporary libertarians who reject electoral politics sometimes argue that to vote for a candidate, even a pro-liberty candidate, is to participate in the oppression of the state because no candidate is consistently libertarian. So if you vote for such a candidate, you are partly responsible for her oppressive actions. However, if your reason for voting for an imperfectly libertarian candidate is to defeat the anti-liberty candidate and reduce oppression, how can it make you complicit in the former’s oppressive actions? And even if it does, how can allowing the far more anti-liberty candidate to win not make you even more complicit in the perpetuation of oppression?

No doubt the anti-voting libertarian would reply (and I would agree) that there Is a difference between doing x and letting x happen. Letting someone drown when you can easily save her is not morally equivalent to throwing her into a river tied to a rock. But it is, nonetheless, wrong to sit on your hands instead of trying to save her. Likewise, under analogous circumstances, that is, when voting is easy and the pro-liberty candidate has a good chance of winning, I believe not voting for her is mistaken. And if  there’s nothing else you are doing to further your pro-liberty values, your not voting for her is wrong.

My brief in favor of voting might seem naive, since one vote makes no difference to a candidate’s chances of winning in a Presidential election. But not all elections are Presidential and not all “one votes” are truly one. If the race is a local one (county or municipal), and influential libertarians vote and defend voting for a local libertarian candidate, many others will also vote, and the candidate could win. This might also be possible in a state election. In any case, there’s a ‘performative’ contradiction in influential libertarian bloggers telling a readership of hundreds or even thousands that one vote doesn’t make a difference, as though every person’s “one vote” stays in its own corner instead of getting added up to every other person’s “one vote” to make hundreds or thousands of votes for the pro-liberty candidate. If the “one vote” argument were sound, it would apply as well to arguing for libertarian principles in books, blogs, or articles, since no one book, blog, or article makes a difference to people’s understanding of or support for libertarian principles (just think of how many have argued for these principles over the last 350 years, and how few they have persuaded).

In any case, victory at the polls is not the only goal of voting. Strong electoral support for a libertarian candidate even in a Presidential election can bring libertarianism to people’s attention the way blogs, articles, or books do not.

Libertarians are right that most people should not vote because they are ignorant of the issues, or because their views are mistaken, or because they can do more good by using their time for other ends. But they are not right to discourage libertarians from voting for pro-liberty candidates. Insofar as they do this, they play a significant role in the victory of the anti-liberty candidate, and become complicit in his oppression. They are like the non-rescuer who urges other people not to rescue the drowning victim. Libertarians are also wrong to discount the possibility of positive results from an electoral victory. Slavery was ended not by the intellectual and moral groundwork laid by abolitionists alone, but also by the electoral victory and actions of an imperfectly anti-slavery President, Abraham Lincoln.

What Shouldn’t Be Surprising about Democracy

The following is a guest post from John Hasnas of the McDonough School of Business at Georgetown University.


One of the drawbacks of not being a committed supporter of democracy is that one loses the ability to be continually surprised by the discovery of the obvious. Currently, the intelligentsia is shocked to find that significant percentages of the public 1) subscribe to “conspiracy theories”–the current euphemism for beliefs held without supporting evidence and in the face of strong disconfirming evidence–and 2) don’t seem committed to the preservation of democratic institutions. But to those of us who view democracy dispassionately rather than as true believers, there is nothing surprising about this at all. It is precisely what we would expect. 

1) Under democracy, the person or policy that receives the most support prevails. But majority support has no necessary connection to the facts of reality. For example, a majority that wanted to stop illegal immigration could vote for a politician who promises to build a wall across the southern border of the United States, even though, as a matter of fact, this would have almost no effect on illegal immigration. Or a majority that wanted to help the poorest members of society could vote to raise the minimum wage to $15 per hour, even though this would reduce employment for the poorest unskilled workers.

When we make decisions for ourselves, most of us pay close attention to the facts of reality. We look both ways before we cross the street. When we drive, we stop at red lights and refrain from driving 90 miles an hour through residential streets. We consider how much money we make in deciding how much money to spend. We comparison shop, consider the prospects for return before making investments, perform regular maintenance on our cars and homes, and purchase automobile, life, health, and homeowner’s insurance. We don’t just walk up and take other people’s stuff. 

We do this because each of us would personally suffer the consequences of ignoring the facts of reality. Failure to look both ways means that we might be hit by a car. Reckless driving means that we might crash. Profligate spending means that we might go bankrupt. Failure to comparison shop, invest carefully, perform necessary maintenance, and purchase insurance means that we may suffer financial losses. Failure to observe property rights means that we may be punched in the nose. 

Things are different when we vote. Because voting one way rather than another imposes no direct consequences on us personally, there is little reason to consider the way the world actually works. Thus, we are free to indulge our imagination and vote for the way we want the world to be. We can imagine that a big, beautiful wall across the southern border will stop illegal immigration, so we vote for the politician who promises to build it and have Mexico pay for it. We feel compassion for low skilled, low wage workers, so we vote to give them all $15 per hour. 

The incentive structure of democratic decision-making encourages people to indulge their fantasies and vote in ways that make them feel good about themselves. This good feeling can be obtained by signaling that one cares about the poor or that one cares about family values, or that one supports his or her team or that one is a loyal member of the tribe. There is no need for one’s vote or other political activities to be tied to the facts of reality to obtain these psychological benefits. After watching large segments of the population believe that a border wall will stop illegal immigration, that Russian interference determined the outcome of the 2016 election, that the Chinese pay tariffs rather than American consumers, and that deficits don’t matter, can it really be surprising that many people believe that there was widespread voter fraud in the 2020 election? Since the believer suffers no personal harm from indulging in such a belief and can gain significant psychological benefit from doing so, how can we be surprised by the prevalence of political conspiracy theories?

2) And it surely should not be surprising that the abstract support for “democratic institutions” disappears when one’s side loses an election. In the first place, supporting democracy in the real world borders on the irrational. A commitment to democracy requires one to believe that the policy of the candidate who receives the greatest number of votes should be adopted. But when one votes, he or she is expressing a personal belief about the desirability of a proposed policy. If our committed democrat’s opponent receives more votes, he or she must now simultaneously believe that the policy of the candidate he or she opposed should be adopted based on the belief that social policy should be determined by the democratic process and that the policy of that candidate should not be adopted based on his or her personal belief. 

Imagine that a candidate runs for President on a platform of building a wall across the southern border of the United States, temporarily banning Muslims from entering the United States, and imposing tariffs on products manufactured overseas. Also imagine that Debbie Democrat, a firm believer in democratic governance, strongly opposes all of these measures and believes that their adoption is both immoral and would be disastrous for the country. Accordingly, she votes for the opposing candidate. Assume however that after the votes are counted, her candidate loses. Debbie Democrat is now in the uncomfortable position of simultaneously believing that a wall should be built across the southern border of the United States, Muslims should be temporarily banned from entering the United States, and tariffs should be imposed on products manufactured overseas based on her belief that social policy should be determined by the democratic process and that none of these measures should be adopted based on her personal belief that they are immoral and counterproductive. 

How surprising can it be that the losers of an election will try to obstruct the will of the majority whether through protests, lawsuits or other procedural impediments, civil disobedience, or even intimidation and violence? What wouldbe surprising would be for Debbie and those who voted with her to say, “Well, we lost the election, so we should do all we can to help put the will of the people into effect and support building the wall, banning Muslims, and imposing tariffs at least until the next election.” 

For most people, democracy is like religion. Belief that democracy is a morally justified and necessary form of government is accepted as a matter of faith. It is only we few heretics who actually examine democracy’s features. We are the ones who notice that democracy is a zero sum game; that under democracy, all must conform their behavior to the will of the majority, and that this makes democracy a winner-take-all game that creates an incentive to defeat one’s opponents at all costs.

In Chapter 10 of his 1944 book, The Road to Serfdom, Freidrich Hayek explained why, in a winner-take-all political system, adherence to principle is self-eliminating. The politician whose commitment to principle prevents him from doing what is necessary to gain power is washed out of the system, or as Bill Clinton more succinctly put it when asked why he lied during the 1996 Presidential campaign, “You gotta do what you gotta do.” In a democracy, any politician whose commitment to abstract moral or political principles prevents him or her from doing what will generate the most votes, loses. This makes politicians’ explicitly hypocritical behavior and application of double standards, which is so shocking to democracy’s true believers, such a mundane observation to us. It is also why we know that it is pointless to exhort people to eschew “whataboutism” as a form of political argument. Far from an aberration, such argumentation is baked into government by electoral majority. 

Many intellectuals seem surprised that Republican politicians who were running for their lives from a mob whipped up by President Trump on January 6 could vote overwhelmingly not to impeach Trump less than three weeks later. But to those of us with a realistic view of the incentive structure of democracy, nothing could seem more natural. You don’t get to make policy if you don’t get elected. So, in the words of Bill Clinton, “You gotta do what you gotta do.”

Two Reasons for Conversation. When stop?

There are two basic reasons for conversation.

First, we converse to convey information, either providing others (what we take to be) true claims or being provided such claims by them. We do this in schools, of course, but also in our daily lives. We ask, for example, about the weather so that we know if we need to dress warmly, for rain, etc. We ask about meetings others attend, for a different example, to learn if we missed something important. We ask about our loved one’s day, for a final example, because we are interested in their lives.

But we also converse—here’s the second reason—to develop or maintain relationships. We comfort our spouse who is upset about a bad day by listening and perhaps suggesting reasons to believe things will get better. This is in addition to genuinely wanting to know about what went wrong (the first reason), but may be the primary reason we speak in the situation. In some cases, it may even be the only reason. Perhaps one is unsure and unconcerned if one’s spouse is giving an accurate portrayal of what happened, but wants to maintain, develop, and deepen, the spousal relationship. Differently, you don’t speak with your four year old child you just saw fall off a bike because you need any information; you simply talk to them to sooth and thereby help the child and also help deepen the parental relationship.

The two reasons for conversation often overlap; we often have both reasons for having a discussion. But not always. If one goes to couples counseling, one learns to speak in “I statements” to indicate, for example, how one feels when the other leaves the dishes out, rather than using “You statements” which, apparently, are necessarily (perceived as?) judgmental (“you always leave the dishes out!”) and cause the other to dig into the fight more—even if they are also true.

Braver Angels is a great organization. Its premise is essentially that we can teach people to speak with one another about politics or anything else without digging in and weakening the relationship, just as marriage counselors do with couples. And just as with couples, we might even strengthen the relationships. Having participated in Braver Angels workshops, I believe this is all true. I’ve witnessed it and it works.

But as the economist Glenn Loury suggested to John Woods of Braver Angels, sometimes it seems the project is misguided: we know the truth, the others’ views are misguided and we should just shut them down. With Richard Freen, we might think “enough is enough;” ridiculous views should simply be met with ridicule and, if that doesn’t encourage those with such views to reconsider them, they should be condemned.

Speaking as someone who wants to encourage more speech, I admit to being torn. My worry comes from the difference between the two reasons for conversation: if one is engaged in conversation with another only to maintain or improve the relationship, one is engaging in a relationship with a significant limit—call it a “truth deficit.” For that part of the relationship, one is giving up on the sharing of truth. One is “agreeing to disagree” and not improve anyone’s (one’s own or the other’s) understanding about the topic of disagreement. It’s true that both parties are likely to gain greater understanding of each other and may find some common ground in shared beliefs they take as even more important than what they disagree about, but about the substantive issue in question, the truth deficit will remain—as the discourse participants agree not to dig in to their positions, they also stop digging into the issue to figure out anything more, as if unconcerned with truth in that regard.

In many cases, this resting easy without uncovering the truth—accepting the truth deficit there—is unproblematic. If one’s spouse had a bad day, one does not need to know if the spouse misinterpreted any events. Presumably, the two share enough true beliefs, that this one is insignificant. Not something to be concerned about. But is the truth deficit present when someone responds to the conspiracy theorist Trumpian by saying “I understand that you doubt the legitimacy of the election; I don’t share that doubt, but we don’t have to agree about it to get along” insignificant? Is the truth deficit present when someone responds to a flat-earther by saying “I get that you believe the earth is flat rather than spherical; I think you are mistaken, but we don’t have to agree about it to get along” insignificant? (How about similar responses to those that want mandatory equal incomes for all? Or those that think that individuals just are whatever they think they are (“identify as”)?) Are those gulfs large enough that one says “there is simply no point in maintaining this relationship?” If they are, does America have such a gulf (or gulfs)? If it does, what should we do?

As much of what I am interested in these days has to do with reducing those gulfs and the truth deficits they create, I am happy to take comments about this one. Suggestions about how to get past the gulfs without creating truth deficits especially welcome.

Why aren’t more women Libertarians?

Clearly, climate is an issue and one that should be addressed by everyone.  Libertarians want less government and fewer laws, which means that civil society – communities, organizations, families – needs to take on roles that government has taken on.  That means using our influence to dissuade others from poor behavior: holding ourselves to high standards of behavior, critiquing harmful and rude behavior out loud, restraining those who persist in poor behavior from opportunities to do so.  

So why aren’t more women committed to libertarianism?

Women are pros at building and maintaining civil society. Women still complete a disproportionate share of household chores for their own families, giving up their leisure and market work time to raise children and care for elderly parents.  Women are more likely to attend religious services regularly. Women are more likely to volunteer.   I presume that women engage in other community building activities more often, too, even when it’s not well measured in surveys.  Neighbor had surgery? A woman probably baked that casserole or organized that meal train to bring over for dinner.   Spouse is sick?  A woman probably took your kids out for the day to give you time to rest.[1]  Christmas and New Years’ cards, birthday greetings, celebration planning – all those interactions that maintain connections among friends and family are more often made by women.  

Consider a thought experiment of what might change as government shrunk. Certainly, I expect entrepreneurs to deliver some services – more private security, more private schools, health care services produced and priced for lower income households, and the like.  And, given the literature on crowd out (here or here or here, for example), I expect philanthropists to expand their charitable endeavors when government reduces its transfer activities.  Given opportunities to retain more of their earned income, generous people in our communities would give more, and more effectively, to help the less fortunate.

Less government increases the need for civil society in all its forms: charitable organizations of all sorts, religious institutions, civic institutions (like Rotary International), community groups, professional organizations, and more.  One hesitation some might have about the feasibility of less government is whether and how much groups like these will step up to help the less fortunate.  And, like many courses of action that liberty-lovers advance, it is impossible to say for sure what will emerge. Spontaneous order is annoying like that. 

But women know this: they know they’ll step into the gaps.  Cooking extra to bring to the neighbor in need. Organizing a coat drive for the trailer park residents as winter approaches.  Checking on the elderly neighbor for a chat and to make sure her heat functions, then sending an older child over to shovel snow from her driveway. Filling the Little Free Pantries and Little Free Libraries around town. Women are the backbone of civil society.   Women build the trust and the community and care for their friends and neighbors.  We know these transfers of time, money, energy, and love can happen in a free society. Because they happen every day. 

I suspect many women understand that, unless more men step up to the community-building plate, that less government means more unpaid, and too often unrecognized, work for women. I suspect some turn away from smaller government ideas, not eager for more of this load of worrying about and caring for those in need.   

For me, seeing people care for their friends and neighbors reassures me that good people in our communities already work to help the less fortunate. Just in our small town, we have a woman who collects items for new foster children (and others) who may arrive to new homes with only the clothes on their backs; a couple who helps the homeless and nearly homeless find or keep their homes, providing emergency supplies and assistance; angel trees to provide Christmas gifts for children whose parents might not be able to afford them. 

There are organizations and businesses run by people who have taken their passion for their community and love for their neighbors, gotten to know the specific needs, and found ways to collaborate to meet them. There are friendship networks and support systems that look out for changing needs and work to meet them, efficiently and effectively providing assistance in ways government welfare programs don’t. I mean, when’s the last time the Department of Social Services baked a casserole for an overwhelmed family? 

In a society with less government, more of that work may need to be done. I firmly believe that local knowledge allows private charitable behavior to more efficiently and effectively meet the needs of the less fortunate. I hope, though, that men will join women in taking on these tasks instead of waiting for women to manage even more of the caring. 

Thanks to Andrew J. Cohen and Sean Mulholland for conversations about the above.  


[1] Not saying men don’t do these things. They do! You can see it in the surveys on volunteering. Men are just less likely to do so.  But it happens, both formally and informally. One small example: when my husband was sick recently, his friend Bill picked up our energetic dog every afternoon to exercise her. Thanks Bill!