I'm from Hong Kong. I see you put something like our present-day skyline on the cover of your book, I guess alluding to Friedman's Free to Choose TV work? Do you know much, or have much interest about our city, or have any plans to visit? Unfortunately we aren't nearly as laissez-faire as when that program was made 😃
What do you think of Hoppe's thesis on monarchy, Dr. Caplan? You are a prominent critic of democracy. But is Hoppe right? I think a monarchy made more difficult to impose protective tariffs by its small size, decentralization, and freedom of immigration can offer very satisfying freedoms. Example: Dubai.
I think Hoppe is crazy, and refuted by virtually the whole history of monarchy. Monarchy existed for millennia and was, on average, even worse than democracy. Dictatorships, monarchy included, do have higher variance, and that's how I'd explain the successes of the Gulf states.
What's theoretically wrong with Hoppe? The leaders of even the poorest nations are fabulously rich, so they can afford to destroy wealth on a massive scale for trivial and sadistic reasons. See my notes on Dictatorship: http://econfaculty.gmu.edu/bcaplan/e854/pc11.pdf
I also think Hoppe's thesis doesn't work for large states, because of the diminishing marginal utility of money and a few other reasons. But if it comes to micro states, I think it's something like the situation you're talking about in your article: https://www.betonit.ai/p/anarcho-capitalism-isnt-crazy-just
"The version I have in mind: A society where businesses contractually acquire sizable tracts of land, then provide police, courts, and so on as part of a package deal. When conflict spills across their “borders,” they adjudicate their disputes much as the U.S. and Canada do today."
The German states failed to prevent armies rampaging through them during the 30 Years War, but it's not like anarcho-capitalism has demonstrated a better track record on that front.
By the way, I also read your Tiebout series. A mayor cannot make a profit, but imagine putting a king in charge of this municipality. The Tiebout model could work in this case. Hoppe may be right for at least this much.
I don't think "high variance" suffices to explain the Gulf monarchies (it's not like Singapore being just one polity that functions well with one-party rule). They seem to be systematically superior to their republican neighbors. Constitutional monarchies in Europe also tend to be better than their republican neighbors. One takeaway is that revolutions tend to be bad.
I know you loathe engaging in discussions of current events, but I feel like when current events are highly relevant to your areas of expertise you could do a lot of good by weighing in to help tip the scales of the public debate in favor of sound economic reasoning. Would you consider writing on the harms of tariffs to help center right people who are otherwise open to what you have to say see the potential harm of Trump’s tariff hikes?
If Congress, the President and all the state and local governments woke up one day and realized “By god, that Caplan guy is right!” and deregulated everything you think they should do you have any idea on what that could to improve GDP growth? 5% more than we have now? Triple?
One common criticism of capitalism from some on the left is that it encourages a belief that happiness can be achieved by purchasing things and degrades people and society because of that.
Personally, I think a desire for status and/or things is just built in to people (people with the means in ancient societies built palaces or pyramids and I don’t think they did it because they were influenced by advertising by Big Palace.
To what extent would you endorse Robin Hanson’s futarchy model of governance? He has suggested that it could be tried in small scale experiments which could be scaled up if they worked. Do you think this is a good idea, or would you lean toward the view that think it has fundamental flaws that make it unworkable and thus not worth pursuing?
It's a great idea to try for corporate governance. But at the society-wide level, I think it's too hard to define "maximize GDP+" in a non-disastrous way.
- What would be the maximum extent of government powers in a functioning libertarian society? ie which government functions do you believe cannot be successfully and/or efficiently managed by private enterprise?
- In one of your posts (sorry, can't remember the specific one), you suggest that private charity should be sufficient to cover for unfortunate edge cases (basically children without responsible adult care and adults who are impaired from working / otherwise supporting themselves) without the need for a government-provided social security that coerces other taxpayers who fund it. How did you reach that conclusion, given that we know from historical records that prior to the welfare state, unfortunate edge cases were clearly not sufficiently catered for by private charity?
- What would be the maximum extent of government powers in a functioning libertarian society? ie which government functions do you believe cannot be successfully and/or efficiently managed by private enterprise?
>Ultimately, I think anarcho-capitalism is promising, though we can't count on it to work anytime soon. Full privatization of roads is especially hard, though it would be easy for governments to price them.
- In one of your posts (sorry, can't remember the specific one), you suggest that private charity should be sufficient to cover for unfortunate edge cases (basically children without responsible adult care and adults who are impaired from working / otherwise supporting themselves) without the need for a government-provided social security that coerces other taxpayers who fund it. How did you reach that conclusion, given that we know from historical records that prior to the welfare state, unfortunate edge cases were clearly not sufficiently catered for by private charity?
>Simple: People were MUCH poorer historically! Charity couldn't solve child hunger in 1800 because there were too many hungry kids and too few rich donors. Conditions are dramatically more favorable now.
I'm convinced by the work saying that colonialism was almost never profitable for the home country, but of course it could still be profitable for political insiders. I suspect that businesses conquering even small countries using solely their own resources virtually never happened, but I haven't studied it in detail.
Do you have views about market design and/or mechanism design?
Nothing strong. See the essay on "Firm Functionalism" in the book.
I'm from Hong Kong. I see you put something like our present-day skyline on the cover of your book, I guess alluding to Friedman's Free to Choose TV work? Do you know much, or have much interest about our city, or have any plans to visit? Unfortunately we aren't nearly as laissez-faire as when that program was made 😃
What is the best textbook to learn economics?
Cowen and Tabarrok is very good. Supplement with Landsburg's *The Armchair Economist* and *Free to Choose*.
What do you think of Hoppe's thesis on monarchy, Dr. Caplan? You are a prominent critic of democracy. But is Hoppe right? I think a monarchy made more difficult to impose protective tariffs by its small size, decentralization, and freedom of immigration can offer very satisfying freedoms. Example: Dubai.
I think Hoppe is crazy, and refuted by virtually the whole history of monarchy. Monarchy existed for millennia and was, on average, even worse than democracy. Dictatorships, monarchy included, do have higher variance, and that's how I'd explain the successes of the Gulf states.
What's theoretically wrong with Hoppe? The leaders of even the poorest nations are fabulously rich, so they can afford to destroy wealth on a massive scale for trivial and sadistic reasons. See my notes on Dictatorship: http://econfaculty.gmu.edu/bcaplan/e854/pc11.pdf
I also think Hoppe's thesis doesn't work for large states, because of the diminishing marginal utility of money and a few other reasons. But if it comes to micro states, I think it's something like the situation you're talking about in your article: https://www.betonit.ai/p/anarcho-capitalism-isnt-crazy-just
"The version I have in mind: A society where businesses contractually acquire sizable tracts of land, then provide police, courts, and so on as part of a package deal. When conflict spills across their “borders,” they adjudicate their disputes much as the U.S. and Canada do today."
Historically, even small monarchies didn't work so well. See the Germanies during the era of the Holy Roman Empire.
The German states failed to prevent armies rampaging through them during the 30 Years War, but it's not like anarcho-capitalism has demonstrated a better track record on that front.
By the way, I also read your Tiebout series. A mayor cannot make a profit, but imagine putting a king in charge of this municipality. The Tiebout model could work in this case. Hoppe may be right for at least this much.
Yes, but don't give him credit for originality on that point!
Hmm, so would a standard democracy but with local governments ruled by kings be an improvement on the status quo?
As long as there is a strong norm of allowing mobility, yes.
I don't think "high variance" suffices to explain the Gulf monarchies (it's not like Singapore being just one polity that functions well with one-party rule). They seem to be systematically superior to their republican neighbors. Constitutional monarchies in Europe also tend to be better than their republican neighbors. One takeaway is that revolutions tend to be bad.
Agree. The other big issue is that voters in the Middle East are especially likely to vote for terrible policies.
Textbooks aside, what book or article do you think makes the best case against substantially free markets?
Maybe James Fitzjames Stephens: https://oll-resources.s3.us-east-2.amazonaws.com/oll3/store/titles/572/Stephen_0021_EBk_v6.0.pdf
I know you loathe engaging in discussions of current events, but I feel like when current events are highly relevant to your areas of expertise you could do a lot of good by weighing in to help tip the scales of the public debate in favor of sound economic reasoning. Would you consider writing on the harms of tariffs to help center right people who are otherwise open to what you have to say see the potential harm of Trump’s tariff hikes?
I'm currently in discussion to do a whole graphic novel on international trade, so stay tuned!
Yay!!! I really hope that happens. Thanks!
What is your high-level, business advice for people writing and selling books?
Step 1: Build an audience with gratis and freemium writing. The Substack model!
Step 2: If and when you have, say, 1000 subscribers, start marketing yourself to larger venues.
Step 3: If and when you have, say, 5000 subscribers, start trying to sell books.
If Congress, the President and all the state and local governments woke up one day and realized “By god, that Caplan guy is right!” and deregulated everything you think they should do you have any idea on what that could to improve GDP growth? 5% more than we have now? Triple?
One common criticism of capitalism from some on the left is that it encourages a belief that happiness can be achieved by purchasing things and degrades people and society because of that.
Personally, I think a desire for status and/or things is just built in to people (people with the means in ancient societies built palaces or pyramids and I don’t think they did it because they were influenced by advertising by Big Palace.
Thoughts?
To what extent would you endorse Robin Hanson’s futarchy model of governance? He has suggested that it could be tried in small scale experiments which could be scaled up if they worked. Do you think this is a good idea, or would you lean toward the view that think it has fundamental flaws that make it unworkable and thus not worth pursuing?
It's a great idea to try for corporate governance. But at the society-wide level, I think it's too hard to define "maximize GDP+" in a non-disastrous way.
Which of your books have been most criticized, and which have been most praised ?
Sorry for the formatting issues!
Book Praise (0-10) Criticism (0-10)
MRV 8 6
SRHMV 6 4
CAE 8 8
OB 7 5
BBB 5 2
Interesting, because I think that the Case Against Education is actually the best supported out of all your well-supported ideas!
Yes, but almost every academic loves education and so resists the evidence.
Yep, 100%
thank you
education is definitely a controversial topic
Tyler’s “markets in everything” posts are fun. What are the markets that most interest you at the moment?
In terms of my spending, custom art by Third World artists.
Also, just learning new music (and karaoke) from Youtube is huge for me.
- What would be the maximum extent of government powers in a functioning libertarian society? ie which government functions do you believe cannot be successfully and/or efficiently managed by private enterprise?
- In one of your posts (sorry, can't remember the specific one), you suggest that private charity should be sufficient to cover for unfortunate edge cases (basically children without responsible adult care and adults who are impaired from working / otherwise supporting themselves) without the need for a government-provided social security that coerces other taxpayers who fund it. How did you reach that conclusion, given that we know from historical records that prior to the welfare state, unfortunate edge cases were clearly not sufficiently catered for by private charity?
- What would be the maximum extent of government powers in a functioning libertarian society? ie which government functions do you believe cannot be successfully and/or efficiently managed by private enterprise?
>Ultimately, I think anarcho-capitalism is promising, though we can't count on it to work anytime soon. Full privatization of roads is especially hard, though it would be easy for governments to price them.
- In one of your posts (sorry, can't remember the specific one), you suggest that private charity should be sufficient to cover for unfortunate edge cases (basically children without responsible adult care and adults who are impaired from working / otherwise supporting themselves) without the need for a government-provided social security that coerces other taxpayers who fund it. How did you reach that conclusion, given that we know from historical records that prior to the welfare state, unfortunate edge cases were clearly not sufficiently catered for by private charity?
>Simple: People were MUCH poorer historically! Charity couldn't solve child hunger in 1800 because there were too many hungry kids and too few rich donors. Conditions are dramatically more favorable now.
What, if anything, can we learn from the history of colonialism as a profit-seeking enterprise? (Not always accompanied by state-sanction btw)
I'm convinced by the work saying that colonialism was almost never profitable for the home country, but of course it could still be profitable for political insiders. I suspect that businesses conquering even small countries using solely their own resources virtually never happened, but I haven't studied it in detail.
If you aren't the leading libertarian economist, then who might be?
John Cochrane
Jeff Miron
Lant Pritchett
David Friedman (of course)
I didn't know Lant Pritchett was a libertarian. I think I've also been confusing him with Lane Kenworthy.
How would a free(er) market solve US healthcare costs?
Easy. Ending supply restrictions and demand subsidies would crash prices.