14 Jul 2011

Morality By Popularity Contest

Economics 29 Comments

I don’t mind the smugness of this Daily Beast piece (HT2 LRC); that’s to be expected. After all, it does sound like a crackpot idea to default on the federal debt, if you haven’t thought about the issue too much. So I don’t mind the average pundit’s incredulity that people could be openly advocating default.

Yet this conclusion seemed rather odd to me:

Obviously, [James] Buchanan at least is a highly distinguished person, and the others to varying degrees have produced some measure of credible work. But these ideas are from some other planet. If you want to believe that the public debt is immoral and that taxation is theft, go right ahead and believe those things. But acting on them in a world that does not agree with you is a different matter. I can believe that driving on the left side of the road is a superior method of locomotion, but if I try it on the way in to work in the United States, I’ll be a public menace, endangering myself and my fellow citizens.

Huh? Some people argue that they think a particular practice is immoral, and the response is to say, “Maybe so, but most of us disagree.” ? For one thing, the only reason it would matter, is if the “crackpots” convince enough other people to go along with them. It’s not as if Buchanan has the power to default on 1/300 millionth of the federal government’s debt.

Also, by picking something that is clearly a social convention–driving on one side of the road versus the other–the writer loads the deck against the people who think taxes are immoral. Suppose instead he had written:

In the South in the year 1800, if you wanted to believe that slavery was immoral and that you should free the slaves you’d inherited from your dad, you could go right ahead and believe those things. But acting on them in a world that did not agree with you would be a different matter. You’d be a menace to other plantation owners, and you might endanger your family’s well-being once your own operation folded.

Now that doesn’t sound so great, does it?

29 Responses to “Morality By Popularity Contest”

  1. Michael J. Green says:

    It seems like no one else is making this point, so maybe I’m just way off base, but isn’t the author making a completely wrong comparison? The suggestion throughout the piece is that there will be disastrous economic consequences for a default. How then does it make any sense, at all, to cite these authors’ *moral* arguments!? The argument that, “default wouldn’t be that catastrophic,” is completely separate from Buchanan’s argument that, “default could not be considered to be morally unjustified.”

    I imagine that Buchanan and Rothbard have made economic arguments as to why a default would not be disastrous, and not only a non-economic, moral value judgment. And if they didn’t, I’m sure both would say, “Whoa there, I’m just saying there is nothing immoral about a government default. I didn’t say anything about the economic consequences of a default, and surely such an economic analysis would change given various historical circumstances, such as the actual amount of debt in question. Defaulting in 1987 may not be the same thing as defaulting in 2011.” I just… it’s a horrible, incredibly deceitful piece, isn’t it? It says absolutely nothing.

    And as you say, even if we were talking morality, his retort that “acting on them in a world that does not agree with you is a different matter” is also completely irrelevant and out of nowhere. What side to drive on the road is a matter of coordination; the number of people who ‘agree’ with the coordinating rules is incredibly relevant. When it comes to the validity of a moral or economic argument, the number of people in agreement is irrelevant.

  2. Tel says:

    Ahhh , history will be kind to me.

    For I intend to write it,

  3. Daniel Kuehn says:

    It loads the deck, but no more than you’re loading the deck by using the slave analogy.

    That’s the whole heart of the contention, after all. What is it more analagous to – traffic laws or slavery? Of course you’re going to have different views on what constitutes “loading the deck”. This is only to say that I understand your frustration at the article because this is precisely what reading a lot of libertarian material feels like.

    In other words – it’s hard to fault the article for anything until you’ve convinced people you’re right, and if that’s accomplished it all becomes a moot point.

    After all, I could just as easily analogize the libertarian refusal to let communities collectively decide things for themselves to slavery (it’s not far-fetched at all – Jefferson called that sort of thing “tyranny”, and we generally look up to Jefferson).

    • Daniel Kuehn says:

      I’m not trying to disagree with you here – I think this is fundamentally your point about the article too.

      • bobmurphy says:

        Daniel, right. I purposely picked something where we all agree with the underlying moral judgment. So I’m trying to show that his argument crucially depends on rejecting the moral view of Rothbard et al., yet the guy acted like we could safely put that to one side and just focus on the consequences of acting on the view.

  4. MamMoTh says:

    Default is equivalent to raising taxes.

    So those who are against the government raising taxes but in favour of it defaulting on its debt are either morons or hypocrites. Maybe both.

    • JSR08 says:


      Stop insulting others with whom you disagree with such threadbare comments. Why don’t you try writing more than two sentences per post and actually explain why what you assert is true.

      • MamMoTh says:

        I already did explain it several times.

        Both raising taxes or defaulting on government debt destroy net financial assets of the private sector, so they are equivalent.

        • Silas Barta says:

          *sigh*, yes, and you keep relying on (tacitly) the assumption that “net financial assets of the private sector” is the same thing as “government debt holdings” because of the clean partition between the two.

          But no one should care about *that* definition or group of assets. If I had decided to “save” (in the normal sense of the word” by plowing my real resources into building a widget-maker, how does the government defaulting on its bonds involve destroying (part of?) my widget-maker? That makes no sense!

          You can certainly argue that the government will try to slap higher taxes on my widget-maker or its output in their reaction to the default crisis, but that doesn’t mean that the default itself “destroys” the private assets we actually care about.

          Your argument is and always has been an argument from definition, and not a very fruitful one.

    • Bob Roddis says:

      Since most of the debt was incurred to pay for things that are not within the enumerated powers of the federal government, there is certainly no moral reason to repay it. But wait. I thought we didn’t really have to “repay” it because the government is NEVER revenue constrained and that taxes are assessed just to control inflation. Except, of course, when Abba Lerner makes you trade with someone for the right to raise every single price under penalty of law.

      Speaking of morons, how about those strange people who say that government debt is necessary to provide “savings” to the “private sector”?

      Speaking of popular morality, those vile Democrat-passed southern Jim Crow laws were sure pretty popular back in the day. Therefore, how was it even possible back then to conceptualize a criticism of them? We’ve got Krugman, we’ve got the MMTers and we’ve got “popular makes right”. As I have been preaching for decades, our opponents are universally cement-heads.

    • bobmurphy says:

      Mammoth, barring the printing press (or selling federal assets), the only way to continue servicing the debt is to continue taxing people. To refrain from taking money from Citizen Group A and handing it over to Citizen Group B, is not obviously “raising taxes.” You’ll have to spell it out more if you want me to consider my hypocrisy or moronitude.

      • MamMoTh says:

        All I am saying is that raising taxes and defaulting on the debt are the same.

        So you might consider that they are necessary for whatever reason.

        But, since they are equivalent, arguing against one of them and being in favour of the other is either sheer stupidity or hipocrisy.

      • Blackadder says:

        Mammoth, barring the printing press (or selling federal assets), the only way to continue servicing the debt is to continue taxing people

        Quite right. And as we all know, ‘taxation is theft.’ Therefore, the government is morally obligated to inflate away its debts.

        • Subhi Andrews says:

          We all know that inflation is a tax too. So can’t inflate away without stealing.

  5. Bob Roddis says:

    Since the government does not need or use taxes to fund itself (it only taxes to control inflation) and it just burns the money it collects in taxes, taxes destroy net financial assets.

    That’s self evident, right? I mean, who hasn’t always known that?

  6. Silas Barta says:

    Also, Bob_Murphy, it’s a bit unfair to characterize their argument as “morality by popularity contest”. They were specifically appealing to the *harms* that result from a course of action, not simply the fact that others disagree about its morality. That is pretty much the same as how you would reply to someone advocating carrying unprotected, volatile explosives through a crowd of people. It wouldn’t be fair for someone to say back to you, “Oh, great, there goes Bob_Murphy, yakkin’ about how most people wouldn’t like to be accidentally blown up, blah blah blah…”

  7. Bob Roddis says:

    On the topic of the debt ceiling, we now have the VERY FIRST professionally done libertarian campaign ad of my lifetime: