Bruno Leoni

On a recent EconTalk, Michael Munger discussed the underrated economist, Bruno Leoni.  Leoni held that law should emerge in a manner similar to a market.  The current system of topdown legislation is just as backwards as central planning for an economy.  As an example, Munger suggested that rather than paving paths between buildings on a college campus, builders should wait a year and see where the muddy paths emerge.  That is where you pave.  Of course, we have all seen cases where the builders paved first only to find trails blazed through the grass thereafter.  By this system, law would emerge through judicial rulings: case law.  I have long disliked case law as creating bad precedents (e.g. Plessy v. Ferguson, Rowe v. Wade, etc.), but those eventually fell away by the same process that brought them into being.  Could this be a reasonable means of enacting law?

Bruno Leoni was an Italian economist who was unfortunately murdered at the age of 54.  However, such economists as James Buchanan and Friedrich Hayek - both Nobel Prize winners - credit Leoni for influencing their work.  Had Leoni lived longer, his works might be as well-known as theirs.

The idea of law emerging like a market seems backwards, but it does harken back to how it was done in earlier days.  There was a time when people would bring their disputes to the ruler and ask him to decide.  His decision became law.  As societies grew larger, this method became impractical.  Or did it?  Let the law emerge through judicial rulings.  Other judges may adopt the reasoning of a deciding judge or overrule it.  Over time, those muddy paths that persist will be paved while those that don't will see the grass return.

Seeing where legislatures have brought us, it looks like Leoni has a point.  A legislator is there to legislate.  That we already have far too many laws is beside the point.  If you are a hammer, all you see is nails.  If you are a legislator, you need to make laws.  It might be that the US had hit the perfect number and balance of laws in 1972 and everything since has just been busywork for bored lawmakers.  On the other hand, a judge exists to rule on the law.  The judge could give the same ruling scores of times, further paving that well-tread path.  The judge only needs to rule on those issues that are presented in court by plaintiffs, not write law suggested by lobbyists.  Leoni is onto something here.

Outstanding episode and highly recommended.

Thinking BIG

Michael Munger, PhD Economist of Duke, was on EconTalk to propose a transition toward a Basic Income Guarantee (BIG).  Basically, the government provides a minimum income to all citizens.  He argues in favor for two reasons.  First, some people - through no fault of their own - will find themselves displaced.  For example, if self-driving cars take over, lots of truck drives and cabbies will find themselves without jobs.  Second, we already have a very inefficient BIG program that is distributed through multiple programs (e.g. CHIP, TANF, SNAP, WIC, Public Housing, etc.) which could be streamlined into a BIG.  I am unclear on whether Social Security and Medicare are likewise to be streamlined; I would think so.  Of course, many of the programs that would be abolished are means tested while the BIG would be universal.  Munger proposed a $15,000 a year BIG which would be conferred along the lines of the Earned Income Tax Credit.

This idea has been around for a while but this is the most in depth discussion I have encountered so far.  Generally, it looks like a bad idea.  A guaranteed income will be a disincentive to work.  People on the dole tend to have lower self-esteem and little purpose in their lives.  However, Munger thinks jobs might become scarce with the rise of Artificial Intelligence (AI), thus his example of self-driving cars.  It is likely that many would work 'off the books' to get extra income while still benefiting from the full BIG.  That currently happens, so maybe that isn't really a mark against it.  It reminds me of the Roman Bread and Circuses, where Rome provided food and entertainment to the masses.  As Rome's affluence grew, the civic-mindedness of the people at the empire's core rotted away.  The Emperors kept them fat and happy, which also made them useless.

However, the AI argument does sound convincing.  Of course, we have had such waves of creative destruction before.  Think of the thousands of telephone operators who lost there jobs thanks to technology.  No mass unemployment.  What of the farmers who were replaced by tractors?  What of the 'computers' like those in Hidden Figures who were replaced by calculators and computers?  There has long been the belief that technology will eventually make humans obsolete but it has repeatedly not come to pass.  Is AI the silver bullet that will really dramatically reduce the need for human labor?  If so, the BIG may become a necessity.

Here is the transcript and there is a link to the podcast available too.