WIP study guide #1: takeaways from “Political Economy 101”

- political economy

A few months ago, I set out to give myself an introduction to “something like” political economy. It was a conveniently vague way to assemble a reading plan around some things I’d been wanting to read for a while at the intersection of philosophy, economics, history and technology.

Though a bit scattered, doing this surfaced a few distinct topics and questions for me to pursue in future:

1. Epistemology, or the “theory of knowledge.”

“…reputed to be the most abstract and remote and altogether irrelevant region of pure philosophy. Hume, for example, one of the greatest thinkers in [epistemology] predicted that, because of the remoteness and abstractness and practical irrelevance of some of his results, none of his readers would believe in them for more than an hour,” said Karl Popper.

Epistemology doesn’t sound like a subject that you pick up for a bit of light reading. However, it’s one of the two repeated themes in my “syllabus,” and I’ll be investigating it more directly in the near future.

The limits of our ability to know make the ultimate argument for free markets and general optimism about the future. The cost of “what you know that just ain’t so” may be low in an experimental physics lab, but extraordinary and destructive in the context of policy-making, when you deal with human lives. We don’t actually have a great handle on what will cause change, so we shouldn’t fool ourselves that solutions are limited to our ability to imagine and predict them. And as the proliferation of software means that means of production grow more accessible and abundant, the need for planning shrinks. We can trust more in emergent order. This is a common thread underlying the work of Hayek, Popper, Taleb, Hirschman, and Rao.

However, in large part inspired by David Chapman’s work at Meaningness (and subsequent reading of Robert Kegan’s work), I realize I’m entering in the middle of things…Hayek, Taleb and co. vociferously critique the overuse and abuse of rationality, the ultimate tool of Modernity. While their arguments are compelling, my appreciation for the origins and fruits of rationality is relatively weak. So my next step will be to learn some Western philosophy/history, and more deliberately practice critical thinking.

2. Cronyism & regulatory capture

Listen to Marc Andreesen, Chamath Palihapitiya, Russ Roberts, Nassim Taleb, Naval Ravikant…you’ll hear them all complain about cronyism and regulatory capture hinder innovation, economic performance, and social welfare and cohesion. An awareness of these issues seems to motivate their dedicated support of entrepreneurship. 

They make a compelling narrative. There are good guys and bad guys. But it smells a bit too simple to me. I’m not convinced that companies or government officials are acting in bad faith, which suggests to me that there’s something more fundamental and impersonal going on. And outside of more entrepreneurship - hopefully provided with a democratizing tailwind in the form of software eating the world - it so far does not seem like a workable or even avoidable issue. Or maybe we just need to fight harder for antitrust enforcement? That also seems too simple…but maybe I’m wrong!

One specific question occurred to me while I read the following sentence in David Chapman’s Meaningness

“Particularly in the past decade, more and more, the developed economies are devoted to rent-seeking: systems that stand in the way of people doing useful things, and charge fees to let us past.”

This echoes Jonathan Tepper’s claims in The Myth of Capitalism. As it applies to oligopolies and monopolies that receive explicit or implicit government support, I’m all in…down with the rent-seekers!

But, to what extent is rent-seeking in America endorsed or supported by some level of government, and to what extent have rent-seeking situations been achieved against the spirit or letter of the law? If the answer is “not so much,” on one hand I’d be glad to hear that cronyism and lawlessness don’t run so deep…but on the other hand, how could we justifiably regulate or limit rent-seeking dynamics that were earned fair and square?