Moscow on the Adriatic

Nothing original here, this was inspired by some recent Matt Yglesias posts:

1.  Russia is a mafia-ridden corporatist state.

Italy invented the term ‘mafia.’

2.  The Russian government controls the media.

Berlusconi owns the media.

3.  The Russian government likes to have reporters killed.

Berlusconi likes to joke about it.

4.  The Russian government is soft on Qaddafi

Italy is too.

5.  Putin jokes about ruling until he’s 120.

Berlusconi does too.

6.  Putin projects a macho image.

So does Berlusconi.

Consider the following quotation from Tyler Cowen (which I strongly support:) 

SHAFFER: What’s one economic lesson you wish all politicians would learn?

COWEN: A simple one is to do the right thing. That sounds naïve, but if you think about these people, if they don’t get reelected, the jobs and lives they fall into are remarkably good. And I don’t just mean by the broader historical standards of the human race, compared to the Stone Age, but even compared to other wealthy people in 21st-century America. So most politicians ought to have the stones to vote for what they think is right, even if it may be an idea I disagree with, and say to the voters, “Send me back to my life as whatever. I’m willing to do this to address our fiscal problems, or fight for the right kind of reform, and risk my office.” And I just don’t see much of that. And that’s disheartening.

Forget about whether a country is ruled by the left (Chavez, Kim Jong Il) or by the right (Putin, Berlusconi.)  The success of governance is highly (and negatively) correlated with how much contempt their leaders have for Tyler Cowen’s admonition.  If they don’t agree with Tyler, then their governments are both corrupt and ineffectual.  In the modern world the terms ”left” and right” are becoming increasingly meaningless.

A few weeks back I got push-back from commenters who seemed to think I was naive in arguing that politicians shouldn’t favor the special interest groups that got them elected.  Politics is about doing deals (they argued)—I help your special interest, you help mine.  But if it was so easy to do Pareto-improving deals, then why are the economies of corrupt countries so messed up?  

I’m afraid that altruism is our only hope.  Without at least somewhat idealistic politicians, there is no hope, no safety net to stop us from falling into into a gangster state.  And we won’t have civic-minded politicians without a civic-minded public.  All over the world (except Denmark) moms are inculcating dictator values into their cute little babies—raising the next generation of Putins and Berlusconis.


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23 Responses to “Moscow on the Adriatic”

  1. Gravatar of mbk mbk
    2. March 2011 at 20:27

    Scott,

    have you considered that politicians may actually mostly think that they are doing the right thing? Or at least, that they are trapped in circumstances that leave few degrees of freedom, so that whenever they do employ questionable tactics they are once again feeling subjectively justified?

    I can be as cynical as it gets but I have to admit, the few times I came in closer contact with politicians of some caliber, they struck me as highly competent and genuinely motivated (as people) to use what they tought was the proper way to a greater good. This, regardless of whether I liked their policies or not.

  2. Gravatar of Doc Merlin Doc Merlin
    2. March 2011 at 20:31

    I have to disagree completely. The “good” can be worse than the evil, if just because the “good” are driven by their consciences to try to control your life.

  3. Gravatar of Benjamin Cole Benjamin Cole
    2. March 2011 at 20:50

    As a rule, I do not like rules, but we may need an edict, or diktat, that at least 70-80 percent of GDP is left in the private sector, as unmolested by regulation as possible.
    Then, government can make mistakes etc, but the competitive private sector will keep chugging forward.

    BTW, even Milton Friedman in his later life recognized the need for strong civic government that enforced property rights and contract law, and fair competition.

    Russia is what you get without that. A thug state.

  4. Gravatar of Doc Merlin Doc Merlin
    2. March 2011 at 21:12

    @Benjamin Cole:
    “70-80 percent of GDP is left in the private sector, as unmolested by regulation as possible”

    I could go for that, cutting the size of the government by between a quarter and half would be something I would be willing to work towards.

  5. Gravatar of Mark A. Sadowski Mark A. Sadowski
    2. March 2011 at 21:13

    Scott,
    You wrote:
    “I’m afraid that altruism is our only hope. Without at least somewhat idealistic politicians, there is no hope, no safety net to stop us from falling into into a gangster state. And we won’t have civic-minded politicians without a civic-minded public. All over the world (except Denmark) moms are inculcating dictator values into their cute little babies—raising the next generation of Putins and Berlusconis.”

    You’ve re-earned my respect. This is an extraordinary diatribe that belongs next to my copy of “Common Sense”.

    Seriously, though, research is on your side. There’s fast growing body of literature that suggests corruption free nations are the ones who develop the fastest. (And perhaps oddly to you and others, because of my Eurocentric research focus, let me offer Botswana in particular as anecdotal evidence.)

  6. Gravatar of Morgan Warstler Morgan Warstler
    2. March 2011 at 22:04

    I disagree as well.

    I think there is only one possible outcome on a long enough horizon, and along the way there will be kludge, and the more kludge there is – like tension in a rubber band, the faster and more forcefully we snap back or forward in our history long lesson.

    Politicians do not have the luxury of controlling where on the timeline they enter, or whether the band of history is being pulled forward or from behind.

    The good politician is one who whichever way it is going lessens the violence of the coming snap, or recognizes there is still some pull left in it.

    Thus Clinton facing the deficit kludge, was a good politician, and Obama facing it not so much.

    Republicans are judged on a longer time line, they are fighting back from before FDR, and that means spending all the money – they are creating the kludge – uses fire to fight forest fires.

    I think we could be 4 or 5 Republican President deep since Reagan who spend all the money, before Democrats finally GIVE UP, and start to play another strategy.

    I’ll call a Balanced Budget Amendment by 2030 a 100 year lesson about the perils of Democracy.

  7. Gravatar of Mike Sandifer Mike Sandifer
    2. March 2011 at 22:10

    There is one realistic solution here in the states, if only partial. That is, vote Democrat, right down the line.

    Yes, there’s corruption, and maybe all manner of other immorality going on in the party, but they really are the lesser of two evils. Again, I only joined the Democrats out of exasperation, recognizing it really is our only hope.

    I don’t like most things about the party. Good intentions are certainly part of their MO, but again, they are corrupt to a degree, lack courage of convictions, and can’t seem to favor any policy that isn’t vastly suboptimal. But, I’d much rather live in the country they want to see rather than the ones the Republicans are trying to bring on.

    Were things really so bad between the end of the FDR era and 1994? I’d go back and live in that time versus where Republicans seem to want to take this country in a heartbeat. Better yet, give me Euro-sclerosis. Sure, it may kill us, but it’s a Hell of a better way to go.

  8. Gravatar of Morgan Warstler Morgan Warstler
    2. March 2011 at 23:31

    Vote Democrat and you destroy this country.

    Whatever brought us here is the very thing no one else has to teach us.

    Cowboys and wildcatters – free market genius – FDR was none of those, let’s burn his edifice to the ground.

    Mike Sandifer, no one can hear your pipsqueak voice over the roar of the engine. Don’t worry we’ll fix your children.

  9. Gravatar of hattip hattip
    2. March 2011 at 23:52

    !) Putin is not “of the right”; he is a former KGB officer, for Pete’s sake. It is absurd to continue the “Big Lie” of professional Marxist propagandists that cast “authoritarian movements” or “authoritarian regimes”, of the 20th century ae “Right Wing”; and that contemporary “conservative movements” are ideologically somehow connected to these sort of regimes. This is nothing but the baldest rhetorical dodge of “guilt by association” and should not be tolerated by rational and civilized minds.

    2) Berlusconi does not “own the media”; he owns a media corporation. Moreover, he made is wealth in the private sector, not the public one. He has been pushing for a smaller state and a taming of the private sector.
    If you had spent any time in Italy, or even the EU, you would know that the Socialist political machine, including the Socialist controlled media, have engaged in same sort of slander and defamation of this man as they have done to conservative figures over here. They in fact engage in it most vociferously and do so night and day. Berlusconi is in no way a criminal nor does he run a “criminal organization”, and your parroting of slander against him is immoral on the face of it.

    You analysis would most aptly apply to Collectivist, and their enablers such as our American RINOS, than it does to what you term “the right”. In fact, there is no “right wing mafia” or “Conservative criminal syndicate”. History is amply filled with “left wing” instances of such things–it is part and parcel of the the very essence of political collectivism.

    You are falling into a trap of seeing moral equivalence where there is none. Shame on you.

  10. Gravatar of Britmouse Britmouse
    3. March 2011 at 00:52

    A hot topic in the UK, as our Coalition plough on sticking stakes through every single special interest group (a.k.a current recipients of government subsidy) they can find – especially those they made promises to pre-election.

    I generally sympathise with your view: altruism uber alles, and I do find it genuinely inspiring to see those SIGs get staked.

    But the question is this: how do we select our politicians if we know that every campaign promise is a lie, simply bait to snare a SIG vote? Should we select them on character alone, policy be damned? This does not seem ideal.

  11. Gravatar of Liye Zhang Liye Zhang
    3. March 2011 at 01:35

    It is pretty easy to understand why politicians don’t do what Tyler wants them to do – people who acts like that are being selected against at every level of government. Even if a lot of people think that way, by the time that they reach the national level, it will mostly be dominated by people who are good at winning elections.

  12. Gravatar of Schismatism Schismatism
    3. March 2011 at 06:22

    This made me think of something Felix Salmon wrote just a few days ago about white collar criminals thinking they’re good people.

    http://blogs.reuters.com/felix-salmon/2011/02/28/annals-of-white-collar-crime-james-altucher-edition/

    =======

    …and in any case there are lots of aggressive entrepreneurs who never commit these kind of crimes.

    James Altucher isn’t one of them. An admitted criminal, he posted “10 Confessions” yesterday, including these…

    In the comments to his post, Altucher says that his crimes “helped me ultimately to look forward and be a better person,” whatever that’s supposed to mean. His readers are lapping it up: one of them writes that “Your blog has skyrocketed to among my top 10 within 3 weeks of subscribing. Mostly because of how insanely honest you are.” Altucher replies, without any visible sense of irony, “thanks. I’m afraid that honesty is a scarce quality in the financial community.”

    It’s common to see people like Altucher fall back on the “everybody does it” argument in cases like this — Altucher’s basically saying that all entrepreneurs behave this way, and he’s just being more honest about it. I don’t believe him.

    There’s also the “let he who is without sin” defense — essentially saying that no one can criticize what Altucher did unless they have never committed any kind of crime themselves. That’s just silly — but I do feel comfortable saying I’ve never done anything like this. Run a red light on my bike? Yes, I’ve done that from time to time. Lied under oath? Hacked into e-mail? No. Maybe that helps explain why I’ve never started a company, but I wouldn’t want to ever start a company if such flexible morals were in any way necessary.

    The fact is that white-collar criminals are, in general, incredibly good at deluding themselves that they’re good people, even when they clearly aren’t. The classic example being Bernie Madoff:

    He can’t bear the thought that people think he’s evil. “I’m not the kind of person I’m being portrayed as,” he told me…

    He said to me, “I am a good person.” …

    “Does anybody want to hear that I had a successful business and did all these wonderful things for the industry?” he continued. “And got all these awards? And so did my family? I did all of this during the legitimate years. No. You don’t read any of that.” …

    He sees himself at this stage as a kind of truth-teller…

    Bernie Madoff is still keeping his own moral ledger, adding things up in his own way, telling himself that someday, he’ll come out ahead.

    The point here is that self-forgiveness is incredibly close to self-delusion. Altucher is currently basking in the attention of people who are reading his confessional blog entries in a fascinated manner, much as they might read a crime-filled memoir. But that doesn’t mean he’s forgiven.

    =======

    There’s a bit more in the post, but what Felix wrote pretty much shows that to simply argue politicians should just do the right thing is short-sighted. I’m sure these people felt they were doing the right thing at one point, or even to a degree still feel they did no wrong. If they were guilty of anything, they would be made alright by forgiveness as it’s not really their fault. Denmark might not be making these sociopaths left and right but we definitely do it in the US.

  13. Gravatar of Scott Sumner Scott Sumner
    3. March 2011 at 06:45

    mbk, You said;

    “have you considered that politicians may actually mostly think that they are doing the right thing? Or at least, that they are trapped in circumstances that leave few degrees of freedom, so that whenever they do employ questionable tactics they are once again feeling subjectively justified?”

    Way too deterministic. If true, why do politicians behave so differently in Denmark and Russia? Or Minnesota and Louisiana? Or Bologna and Naples?

    Sure, there is some corruption everyone, but the amounts differ greatly. I do agree with your point about them often sincerely believing in what they espouse. It’s a very Darwinian struggle to reach the top in politics. If you can look into the camera with soulful eyes and say “I did not inhale” and mean it, you have a bright future in politics.

    Doc Merlin, But on average the good will be better.

    Benjamin. I agree, but even small states can do lots of harm.

    Mark, Thanks. By the way, a new study just came out that I need to link to. They studied entrepreneurship around the would. Guess which country is number one? Hint, it’s the least corrupt, most egalitarian, most free market and happiest place on Earth.

    Morgan, Hopefully the battle over government size will soon end (there’s no money for new programs) and we’ll move on to making government more efficient. Next stop, Copenhagen.

    Mike, You said;

    “Were things really so bad between the end of the FDR era and 1994?”

    That’s odd, I thought the 6 years after 1994 were the best.

    hattip, You said;

    “He has been pushing for a smaller state and a taming of the private sector.”

    Berlusconi as a neoliberal? I don’t think so. The only deregulation Berlusconi favors is ending the right of prosecutors to prosecute the specific crimes that he has engaged in. The government is merely his plaything, used to boost his fortune. He stocks the parliament with bimbos from his media empire. I like the way you imply he just happens to own “a media corporation.”

    Yes, it makes no sense to describe Putin as right wing–wasn’t that the point of my post? Ditto for Kim Jung Il. I’m simply describing the arbitrary way that society classifies them. Corruption knows no party.

    Britmouse;

    “But the question is this: how do we select our politicians if we know that every campaign promise is a lie, simply bait to snare a SIG vote? Should we select them on character alone, policy be damned? This does not seem ideal.”

    We can’t make progress by simply selecting different politicians. Politicians:

    1. reflect our culture
    2. reflect the nature of our political system.

    Have money be raised and spent locally (as some of the Nordic countries do, or Singapore.) Decentralize government. Decentralizing spending alone won’t work, BTW. Taxes as well. Reduce the agency problem.

    Change the culture by expressing contempt for special interest politics in all forms of life.

    Liye, You said;

    “It is pretty easy to understand why politicians don’t do what Tyler wants them to do – people who acts like that are being selected against at every level of government. Even if a lot of people think that way, by the time that they reach the national level, it will mostly be dominated by people who are good at winning elections.”

    See my first response up top, it applies equally to your comment. Culture matters.

  14. Gravatar of mbk mbk
    3. March 2011 at 08:38

    Scott,

    “Way too deterministic. If true, why do politicians behave so differently in Denmark and Russia? Or Minnesota and Louisiana? Or Bologna and Naples? ” and “Culture matters”

    Well this is contradictory isn’t it? Yes culture matters, this is why politicians tend to behave differently according to location. And that provides indeed at least some determinism, not just on the giving end (the culture the politician is from – this he might occasionally want to try harder to escape from) but also on the receiving end (the culture the politician must operate in – this he might not escape from so easily, witness the two recent murders of socially liberal politicians in Pakistan).

    On the other hand I did not mean to imply that there are no resort and no solutions for countries that start out corrupt. My points were that self perceived righteousness is already present in politicians (Schismatism’s comment goes in the same direction) and that selection pressure from the system exists.

    FWIW Machiavelli’s “Discorsi” already dwell a lot on the same subject. Democracies once corrupted are very hard to bring back. Usually they go through a phase of authoritarian rule first in the process. The issue I have with the vision that “Democracies seldom fight each other” is that countries are not “born democracies” that always stay that way. Sure, democratic Weimar Germany did not fight democratic Great Britain. It turned fascist first. Democracies are vulnerable to self immolation in case of crisis. And while Weimar may get blamed for enabling Hitler, it completely escapes being blamed for WWII.

  15. Gravatar of MikeDC MikeDC
    3. March 2011 at 11:36

    Public choice theory doesn’t have a good model of leadership and its limits. It’s a rare politician who can do the right thing because he leads a vast array of aligned politicians. While the guys at the top can retire to the good life even if they’re voted, the guys underneath not so much.

    CEO’s of large corporations are limited by how much they can change the “corporate culture”, and they have lots more power over the ‘middle management’ than the average president has over congressmen, governors, legislative staff and mid-level bureaucrats.

  16. Gravatar of johnleemk johnleemk
    3. March 2011 at 12:47

    Scott,

    Couldn’t agree more re altruism. The problem with heeding Tyler’s admonition, I think, is that people think at the margin. The marginal effect of not being reelected is in the vast majority of cases a negative.

  17. Gravatar of Benjamin Cole Benjamin Cole
    3. March 2011 at 13:07

    Scott-

    Yes, it is not too early to start militating for QE3. A weak, feeble Japanese monetary policy would be the worst choice right now.

  18. Gravatar of dirk dirk
    3. March 2011 at 15:16

    “All over the world (except Denmark) moms are inculcating dictator values into their cute little babies—raising the next generation of Putins and Berlusconis.”

    Good observation. One cultural value that seems to have changed in the U.S. over the past few decades is cheating in school. It used to be rare and treated as a serious matter while now it seems like the norm on both the high-school and college undergrad level. Yet how many moms would prefer their children cheat and get good grades than not and get bad ones?

  19. Gravatar of Greg Ransom Greg Ransom
    3. March 2011 at 20:26

    Institutions need to be structured so that pols see it in their self interest to do the right thing.

    Friedman nailed it.

  20. Gravatar of Doc Merlin Doc Merlin
    3. March 2011 at 20:34

    @ Greg Ransom

    Agreed. This is why groups like the tea party are important towards creating actual spending cuts. This also means primary-ing republicans who vote against cuts.

  21. Gravatar of Scott Sumner Scott Sumner
    5. March 2011 at 10:58

    Schismatism, Bad people claim everyone else does it, and perhaps at some level they even believe it. Of course it’s not true. It’s not even true of businessmen.

    mbk, I’m afraid I don’t follow your argument. Are you saying culture can’t change? My point is that we need to change cultures.

    MikeDC, You said;

    “Public choice theory doesn’t have a good model of leadership and its limits.”

    I know very little about public choice theory, but that doesn’t surprise me at all.

    johnleemk, Why bother even voting, except out of altruism?

    Benjamin, I agree.

    Dirk, That’s sad if it’s become the norm. In Bangladesh students once went on strike over the right to cheat. I doubt the Danish students ever did that.

    Greg, I agree. Decentralization is the best way, but I’m sure there are others. But I also think cultural change is important–a contempt for corruption. Some American states have it and some don’t.

    The Tea Party seems to have failed, as the GOP is basically a big government party.

  22. Gravatar of mbk mbk
    6. March 2011 at 07:27

    Scott, I agree people need to change cultures in some places (and get better institutions too). And yet. My first point was that many politicians (not all) are subjectively honest and passionate in those dysfunctional places. They believe their approach is the only one that works in the situation. And of those who disagree and do try to change cultures some may pay with their lives which probably dampens the enthusiasm. My second point was that once a system is dysfunctional it may well be very difficult to improve without intervening cataclysmic crisis. It may have found a suboptimal local maximum.

  23. Gravatar of Scott Sumner Scott Sumner
    6. March 2011 at 09:11

    mbk, Those points may or may not be correct, but they don’t contradict anything I said.

    BTW, in my view positive change is more likely to be evolutionary than catastrophic.

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