Progressivism vs. Dynamism, 2/13
Beware of government-led change
Manchin represents a centrism of stasis and obstruction, while Biden represents a centrism of progress and dynamism
The belief that dynamism comes from government strikes me as off base. It is the thesis of Mariana Mazzucato’s The Entrepreneurial State.
Almost a quarter century ago, Virginia Postrel published The Future and its Enemies. That book advocates for dynamism. But unlike Smith and other smug advocates for active government, Postrel articulated the libertarian view that dynamism comes from decentralized experimentation.
Progressives are misguided about progress. If you want a dynamic society, don’t root for government to lead the way. Instead, root for government to create a background of order that permits progress to proceed.
I have an aphorism that progress comes via the three e’s: experimentation, evaluation, and evolution. It does not come via intelligent design.
Most new ideas are wrong. The key to progress is to test new ideas carefully, using a process that keeps the good ideas and rejects the bad ones.
Experimentation means trying many ideas. Evaluation means measuring whether or not an idea worked. Evolution means keeping the ideas that worked and rejecting the bad ones.
Smug progressives act as if these three e’s are unnecessary. They act as if they can be certain ahead of time that none of their ideas are wrong. Under these assumptions, government only fails when it fails to enact progressive policies.
Once we take seriously the fact that most new ideas are wrong, we can compare the market and and government as processes for sifting new ideas. From the standpoint of the three e’s, this comparison strongly favors the market.
When it comes to experimentation, a decentralized market is able to generate many more experiments than a centralized government. How should we address the harms that come from Facebook and Twitter? Government could turn major social media companies into regulated utilities, which would perpetuate their dominance and force all would-be competitors to fit a single regulatory mold. Or the market can continue to experiment, with entities like Clubhouse and Substack and innovations yet to be discovered, until platforms emerge that provide more satisfying experiences.
When it comes to evaluation, the market measures costs and benefits using the unforgiving criteria of profits and losses. If an enterprise provides less value than the resources that it uses, it will suffer losses. Only those enterprises that improve the use of resources will enjoy profits and expand.
In theory, government can evaluate programs according to costs and benefits. But these evaluations are rarely undertaken, and they are never tested for accuracy. There is no check against government officials who overstate benefits and understate costs, or who ignore the benefit-cost criteria altogether.
Finally, with government programs evolution is stymied. In the market, most new firms fail. They go out of business, their ideas having been coldly discarded by the profit-and-loss system. But government programs almost never get discarded. Whether they are helpful or harmful, with benefit-cost ratios that are high or low, they persist in perpetuity.
The worst intellectual error is to act as if your beliefs are free of error. Instead, in a world that allows for error, one should keep an open mind and look for ways to test everyone’s ideas.
Progressivism is dynamic only if one can presume that the beliefs of progressive are free of error. But given that most new ideas are incorrect, true dynamism requires the three e’s: experimentation, evaluation, and evolution. Government activism does poorly at all three. President Biden, with his agenda for expanded government, does not represent “progress and dynamism,” as Noah Smith would have it. He represents the opposite.
I like Matt Ridley's observation along these lines from "How Innovation Works": “Evolution does not tell you anything about whether or not God exists; it simply proves that, if he does exist, he really hates top-down central planning.”
Smith's article is a fantastic, unintentional demonstration of the mindset that infects bureaucracy everywhere, not just the government. Doing things is seen as an absolute good, and simultaneously as proof that the organization serves a vital purpose. If the Office for Doing Things didn't exist to Do Things, then the Things simply would not get done. Therefore, this office should not only exist, but receive more funding and personnel to ensure it continues to do things.
It misses both the fact that most experiments fail, and many experimental ideas turn out to be unsound policy, and the fact that plenty of private enterprises and local governments exist to do the same things