Might liberal democracy (an open-access order) gradually regress substantially to a limited-access order, not by means of repression, but via elite consolidation around "pedigree," self-sorting, and entrenchment?
I have in mind interrelated demographics in career access via selective universities, peer marriage, the deep state, zoning, selection bias in media, and the like.
Might real-existing meritocracy willy nilly diminish open access?
Maybe we are moving towards that type of limited access but I don't see that as the same as the type he is concerned about. His is by force and rule or law, this seems not. Maybe the end result is similar though. I'm skeptical but maybe so.
Note our current President went to Delaware and Syracuse. What you say is mostly or entirely true of SCOTUS but I'm not aware of anywhere else there aren't many exceptions to the selective Univ issue. And I'm skeptical it makes much difference other than entry level. Peer marriage is definitely an interesting change from the past. It might be the biggest and least appreciated demographic factor in our recent past and going forward.
In 1984 O’brian notes that if it were necessary the inner party would entirely replace itself with proles so long as it maintained the nature and ideology of the inner party. Allegiance to its ideology, which essentially amounts to power for the sake of power, is the only real criteria for necessary criteria for membership.
We have an open order system in that anyone (however unlikely, but everyone) can build themselves up so long as they hold the fundamental tenets of the ideology and don’t deviate from them. The same applies to institutions.
The question then becomes how restrictive that ideology is. How much does one give up to belong?
A year ago when I went to the playground near DC I saw 99% of parents masking their toddlers outdoors in 100 degree heat even without being forced to. So that’s one thing it demanded.
I think it is incredibly naive to think open-access orders are stable by their inherent nature. I think open-access societies are the exception rather than the rule, and that it takes a specific kind of people and a specific time to build such societies, and once those people and their immediate progeny are dead, reversion to the mean occurs. I look around me, and I see major reversion to the mean going on in the US and western Europe.
Bob Haywood, ED of the World Economic Processing Zones Association (WEPZA) for the last decades of the 20th century, made the case that special economic zones were an under-appreciated path for moving closer in the direction of open access orders. In his experience advising dozens of zones around the world, he found that often zone advocates were not the inner elite, but rather cousins, nephews, younger brothers, in-laws, etc. They would ask for permission to create a zone that focused on export processing, thus not interfering with existing rent-seeking concessions in banking, media, transportation, etc. The oligarchs would let it happen, see the prosperity that resulted, and then allow a bit more economic liberalism. Haywood makes the case that zones preceded greater economic liberalism in Mauritania, Mexico, Ireland, China, and elsewhere. He sees them as an under-appreciated path to economic development generally, and more specifically as an under-appreciated strategy for getting around the problem of the "natural state" (closed access).
About 15 years ago I organized a conference on zones at which Bill Easterly acknowledged that development economists had mostly ignored them, in part because of a focus on nation-state data sets typically used for regressions. Since then there has been a bit more focus, but still all too little.
I submit that the US since the New Deal has been a limited-access order masquerading as an open-access order. Organizing large companies is not directly forbidden (though the government retains the ability to shut them down by withholding business licenses), but most occupations are licensed and the credentials are deliberately made difficult and expensive for outsiders to obtain, especially in service industries such as banking, on whose goodwill all other businesses depend.
The main difference between the situation now and 50 years ago is that technology, beginning with cable TV and satellites, has enabled the communications industries to escape federal control. The feds don't like that and are attempting to crack down again. We're all hosed if they succeed.
For liberty to prevail, the public needs to stop believing that credentialed "experts" as a class are trustworthy. The present and upcoming scandals regarding measures purported to protect us from Covid-19 and from climate change, if handled correctly by our side, can do that job for us. But we need ways to puncture the bubble within which big-media consumers don't currently hear the truth.
I agree that licenses can be an obstacle but I'd argue that they are not barriers in the ways Kling refers. Also, most of them exact the same effort from all applicants.
Good essay and excellent differentiation between limited & open - access order.
Tho the US "Woke" elite culture war can be characterized by elites claiming open-access but enforcing limited access. See how they cancel Republicans in colleges & most top media.
Seems that according to these definitions, the US effectively stopped having an open-access order with the Civil Rights Act. Every major institution is forced to hire clients of the ruling political coalition (to avoid "disparate impact") and has to act in such a way that it doesn't strongly contradict the ruling coalition (to avoid "hostile environment"). Seems basically analogous to China, where anyone can organize an enterprise, but you have to hire members of the ruling coalition and you'd better do what the govt says if they ask.
I think the main hope for a liberal order lies in basic disagreements among illiberals. Social Justice Warriors and White Supremacists cannot cooperate to overthrow Open Access.
Fantastic post, thank you. I wonder if you plan to integrate these essays into a book. If so, I would encourage that. As to the marketing of a book, I recall you previously commenting on the difficulty involved. You probably already thought of this (but just in case you haven't) your buddy Tyler Cowen might be helpful. Not sure how he did this, but he successfully broke through the barrier from wonky economics-type book to something much bigger. I would think he likely knows the recipe
"In China, [a limited-access order] only members of the Chinese Communist Party are able to control large corporations. Those outside of the party have no ability to build large firms".
Plenty of billionaires built their firms without being Party members but, once they achieved success, either installed a Party secretary or joined the Party to participate in policy development in their industry.
The CPS is not a faction within a party (as the Democrats are a faction within our informal Capitalist party), it is the constitutionally mandated body responsible for keeping the sacred flame of Chinese civilization and ensuring its survival.
Our informal Capitalist party has no responsibility for anything except personal enrichment.
This is all very informative, but if the idea is that open-access and closed access orders are descrite stable points, then that is wrong.
The world is replete with intermediate forms. For every Switzerland and Iran there is also an Argentina and Sri Lanka.
And there is the lie in the narrative about how unreformable places like Afghanistan are. We can only guess whether years time Afghanistan will not be more free and stable than Sri Lanka.
For that matter there is no knowing where America will rank by then.
Russ Roberts interviewed Barry Weingast in 2007 and he talked about some of these things with actual GDP per capita numbers for various countries at the time. The limited access order countries had numbers around $10,000 per year and below and the open access had $20,000 and up. They talked about this gap and described countries currently in transition, at the time South Korea was talked about as in transition. https://www.econtalk.org/weingast-on-violence-power-and-a-theory-of-nearly-everything/
If we note that real ownership is control over the disposition and use of assets it is easy for open-access systems to have the elite government regulators take over all real ownership. From the viewpoint of the regulatory elite, they end up with authority and no responsibility which is "real power".
Your essay seems to imply that both open and limited access orders are equally resilient to changing into the other, which if I recall comes from NWW (been a long while since I read the book so I am not certain). This seems entirely inconsistent with calling the limited access order "natural", not to mention the observation that most governments in history have been limited order styles. The empirical evidence suggests that open orders tend to drift towards limited access orders, or get conquered by them, more often than the other direction.
That might have once been true but more recent evidence suggests the drift has changed direction for whatever reasons. The percent of people living in open access has increased dramatically in the last 50-100 years. Whether we are currently at a local max or not, the drift is mostly in the right direction.
I am not certain that is entirely true. I think it might be overestimating how far towards "open" most countries are these days. And at least in a standard "count the people" sense, lots is going to rely on China and India, and I am not sure they are a lot more open than they were in 1970. Maybe India is.
It does seem to me though that many western nations have been sliding away from open order since the 1930s, at a greater or lesser rate. Where do you see the biggest increases in open order happening since 1920?
Well, while China certainly isn't completely open, I don't see how one could argue they haven't moved in that direction. I'm not quite sure where Eastern Europe stood in 1920 but surely it has improved drastically without USSR. But maybe you exclude those because they didn't exactly even have limited-access prior to allowing free market exchange.
I think it is clear that most of Asia outside of India and China has become more open. Changes in Africa have been much smaller but I'd say it has mostly moved toward open. S America has seen losses, especially Venezuela, but to me that seems small in comparison to other continents.
Might liberal democracy (an open-access order) gradually regress substantially to a limited-access order, not by means of repression, but via elite consolidation around "pedigree," self-sorting, and entrenchment?
I have in mind interrelated demographics in career access via selective universities, peer marriage, the deep state, zoning, selection bias in media, and the like.
Might real-existing meritocracy willy nilly diminish open access?
Maybe we are moving towards that type of limited access but I don't see that as the same as the type he is concerned about. His is by force and rule or law, this seems not. Maybe the end result is similar though. I'm skeptical but maybe so.
Note our current President went to Delaware and Syracuse. What you say is mostly or entirely true of SCOTUS but I'm not aware of anywhere else there aren't many exceptions to the selective Univ issue. And I'm skeptical it makes much difference other than entry level. Peer marriage is definitely an interesting change from the past. It might be the biggest and least appreciated demographic factor in our recent past and going forward.
In 1984 O’brian notes that if it were necessary the inner party would entirely replace itself with proles so long as it maintained the nature and ideology of the inner party. Allegiance to its ideology, which essentially amounts to power for the sake of power, is the only real criteria for necessary criteria for membership.
We have an open order system in that anyone (however unlikely, but everyone) can build themselves up so long as they hold the fundamental tenets of the ideology and don’t deviate from them. The same applies to institutions.
The question then becomes how restrictive that ideology is. How much does one give up to belong?
A year ago when I went to the playground near DC I saw 99% of parents masking their toddlers outdoors in 100 degree heat even without being forced to. So that’s one thing it demanded.
I think it is incredibly naive to think open-access orders are stable by their inherent nature. I think open-access societies are the exception rather than the rule, and that it takes a specific kind of people and a specific time to build such societies, and once those people and their immediate progeny are dead, reversion to the mean occurs. I look around me, and I see major reversion to the mean going on in the US and western Europe.
Bob Haywood, ED of the World Economic Processing Zones Association (WEPZA) for the last decades of the 20th century, made the case that special economic zones were an under-appreciated path for moving closer in the direction of open access orders. In his experience advising dozens of zones around the world, he found that often zone advocates were not the inner elite, but rather cousins, nephews, younger brothers, in-laws, etc. They would ask for permission to create a zone that focused on export processing, thus not interfering with existing rent-seeking concessions in banking, media, transportation, etc. The oligarchs would let it happen, see the prosperity that resulted, and then allow a bit more economic liberalism. Haywood makes the case that zones preceded greater economic liberalism in Mauritania, Mexico, Ireland, China, and elsewhere. He sees them as an under-appreciated path to economic development generally, and more specifically as an under-appreciated strategy for getting around the problem of the "natural state" (closed access).
About 15 years ago I organized a conference on zones at which Bill Easterly acknowledged that development economists had mostly ignored them, in part because of a focus on nation-state data sets typically used for regressions. Since then there has been a bit more focus, but still all too little.
I submit that the US since the New Deal has been a limited-access order masquerading as an open-access order. Organizing large companies is not directly forbidden (though the government retains the ability to shut them down by withholding business licenses), but most occupations are licensed and the credentials are deliberately made difficult and expensive for outsiders to obtain, especially in service industries such as banking, on whose goodwill all other businesses depend.
The main difference between the situation now and 50 years ago is that technology, beginning with cable TV and satellites, has enabled the communications industries to escape federal control. The feds don't like that and are attempting to crack down again. We're all hosed if they succeed.
For liberty to prevail, the public needs to stop believing that credentialed "experts" as a class are trustworthy. The present and upcoming scandals regarding measures purported to protect us from Covid-19 and from climate change, if handled correctly by our side, can do that job for us. But we need ways to puncture the bubble within which big-media consumers don't currently hear the truth.
I agree that licenses can be an obstacle but I'd argue that they are not barriers in the ways Kling refers. Also, most of them exact the same effort from all applicants.
Good essay and excellent differentiation between limited & open - access order.
Tho the US "Woke" elite culture war can be characterized by elites claiming open-access but enforcing limited access. See how they cancel Republicans in colleges & most top media.
Seems that according to these definitions, the US effectively stopped having an open-access order with the Civil Rights Act. Every major institution is forced to hire clients of the ruling political coalition (to avoid "disparate impact") and has to act in such a way that it doesn't strongly contradict the ruling coalition (to avoid "hostile environment"). Seems basically analogous to China, where anyone can organize an enterprise, but you have to hire members of the ruling coalition and you'd better do what the govt says if they ask.
I applaud the creativity of your analogy. It might even be accurate but I have a hard time believing they are comparable obstacles.
I think the main hope for a liberal order lies in basic disagreements among illiberals. Social Justice Warriors and White Supremacists cannot cooperate to overthrow Open Access.
Let us hope that is the case!
Fantastic post, thank you. I wonder if you plan to integrate these essays into a book. If so, I would encourage that. As to the marketing of a book, I recall you previously commenting on the difficulty involved. You probably already thought of this (but just in case you haven't) your buddy Tyler Cowen might be helpful. Not sure how he did this, but he successfully broke through the barrier from wonky economics-type book to something much bigger. I would think he likely knows the recipe
"But I think that NWW would say that open-access orders are quite robust. It is unlikely that we will be taken over by illiberal forces."
It seems the last sentence is your opinion. If so, I have an even harder time understanding what I see as your general pessimism.
"In China, [a limited-access order] only members of the Chinese Communist Party are able to control large corporations. Those outside of the party have no ability to build large firms".
Plenty of billionaires built their firms without being Party members but, once they achieved success, either installed a Party secretary or joined the Party to participate in policy development in their industry.
The CPS is not a faction within a party (as the Democrats are a faction within our informal Capitalist party), it is the constitutionally mandated body responsible for keeping the sacred flame of Chinese civilization and ensuring its survival.
Our informal Capitalist party has no responsibility for anything except personal enrichment.
Different strokes..
This is all very informative, but if the idea is that open-access and closed access orders are descrite stable points, then that is wrong.
The world is replete with intermediate forms. For every Switzerland and Iran there is also an Argentina and Sri Lanka.
And there is the lie in the narrative about how unreformable places like Afghanistan are. We can only guess whether years time Afghanistan will not be more free and stable than Sri Lanka.
For that matter there is no knowing where America will rank by then.
Russ Roberts interviewed Barry Weingast in 2007 and he talked about some of these things with actual GDP per capita numbers for various countries at the time. The limited access order countries had numbers around $10,000 per year and below and the open access had $20,000 and up. They talked about this gap and described countries currently in transition, at the time South Korea was talked about as in transition. https://www.econtalk.org/weingast-on-violence-power-and-a-theory-of-nearly-everything/
If we note that real ownership is control over the disposition and use of assets it is easy for open-access systems to have the elite government regulators take over all real ownership. From the viewpoint of the regulatory elite, they end up with authority and no responsibility which is "real power".
Excellent article!
Your essay seems to imply that both open and limited access orders are equally resilient to changing into the other, which if I recall comes from NWW (been a long while since I read the book so I am not certain). This seems entirely inconsistent with calling the limited access order "natural", not to mention the observation that most governments in history have been limited order styles. The empirical evidence suggests that open orders tend to drift towards limited access orders, or get conquered by them, more often than the other direction.
That might have once been true but more recent evidence suggests the drift has changed direction for whatever reasons. The percent of people living in open access has increased dramatically in the last 50-100 years. Whether we are currently at a local max or not, the drift is mostly in the right direction.
I am not certain that is entirely true. I think it might be overestimating how far towards "open" most countries are these days. And at least in a standard "count the people" sense, lots is going to rely on China and India, and I am not sure they are a lot more open than they were in 1970. Maybe India is.
It does seem to me though that many western nations have been sliding away from open order since the 1930s, at a greater or lesser rate. Where do you see the biggest increases in open order happening since 1920?
Well, while China certainly isn't completely open, I don't see how one could argue they haven't moved in that direction. I'm not quite sure where Eastern Europe stood in 1920 but surely it has improved drastically without USSR. But maybe you exclude those because they didn't exactly even have limited-access prior to allowing free market exchange.
I think it is clear that most of Asia outside of India and China has become more open. Changes in Africa have been much smaller but I'd say it has mostly moved toward open. S America has seen losses, especially Venezuela, but to me that seems small in comparison to other continents.