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Members: How Politics Matter For Upgrading Civilization - Join CiVL.COM · Words & Numbers

• 0:00
  I have found that as a political scientist operating in Trump's
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  America, things happen so quickly and so often that it's
• 0:10
  almost impossible to keep up. And that's that's the that's
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  this administration's goal is to keep heaving so much.
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  This is out of the Steve Bannon playbook to keep he been doing.
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  This since yeah. Just keep so much coming at us
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  and at the various governing institutions that a lot's going
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  to slip through, a lot's going to get rejected in the courts,
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  and some things will be deemed perfectly legitimate.
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  But regardless, everybody else, all of his opponents are on
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  their heels all the time. So he never comes off offense.
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  He's just never playing defense. And presidents, if you think
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  back in, I don't know, sense, at least Bush the first are often
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  on defense, but they have Congress pushing back on them
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  and public opinion to deal with their I mean, there's all kinds
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  of things. And it's weird, isn't it,
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  because of all the presidents you would expect to have to be
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  in that position of playing defense, you would think it
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  would be someone like him. You, you would.
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  But I think the lesson that we take away and the lesson that
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  future presidents are going to take away is that raw aggression
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  pays off, right? This is this is the new approach
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  that Trump brought to the office that no one else, at least no
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  one else for hundreds of years or 100 years or so has really
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  tried. And it, it works.
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  Now you have to have the personality for it.
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  And you know, Trump is a singular type.
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  It's hard to see who could follow in his footsteps on the
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  right. I think it's it's easier to see
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  who might follow in his footsteps on the left.
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  And Alexandria Ocasio Cortez kind of comes to mind pretty
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  quickly. Yeah, yeah.
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  Well, you know, now that you now that you mention that, the, the
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  thought occurs to me, of course, there's a there's a lot of time
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  to go. This what's his name, the mayor
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  of New York City. You think he has a chance at the
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  next presidential election? Oh, oh God, no, no, no, no, I
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  don't. I don't even think was he even
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  born in the. US.
• 2:41
  Oh, I don't know. I don't think he was.
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  Yeah. I I'm not certain.
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  I don't pay a lot of attention to New York City politics, or
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  for that matter, to city politics.
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  And it's just a level at at which I, I become disinterested.
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  He's an interesting guy. So I paid a little bit of
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  attention to that election, but I didn't dig too deeply into his
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  past. I know his parents were not born
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  here. I don't know if he was.
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  So I I leave that to somebody out in the ether to tell us.
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  This this session of Words and Numbers Live where we put a call
• 3:23
  out to listeners to throw us some interesting questions.
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  We got a whole bunch of things from e-mail from Words and
• 3:31
  Numbers backstage. I want to start off with one
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  from George Walker, one of our long time listeners, who who
• 3:40
  sent me sent me an article that I had actually written.
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  I'd forgotten I'd written this a long time ago and ask for
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  comment in the title of the art. This is an academic article is
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  human development and the optimal size of government.
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  You and I talked about writing a book on this very topic.
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  Right, Yeah. And if if you look at our look
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  at our book Cooperation and coercion, the last chapter
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  touches on this same topic. And James, if you recall, we
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  did, we wrote a chapter in that book something Liberty
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  prosperity. It was a philosophy book and and
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  we covered this as well. But but here's the thing.
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  There have been a number of studies that have asked the
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  question, what level of government is most conducive to
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  economic growth? You know, understanding, look
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  and forget about the, you know, Libertearing's theory that,
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  well, we shouldn't have government at all.
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  Think about this from a practical perspective that you
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  need some practically speaking, some sort of governmental entity
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  in place to do the sort of heavy lifting that you won't you
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  either won't get from markets or you would get it, but you're
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  going to have to wait a while for the thing to come out.
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  So I'm thinking about things like simply, look, we're going
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  to through through the judicious use of eminent domain, we're
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  going to and taxation, we're going to build a bunch of roads
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  and it's going to get done. And then from that point
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  forward, you know, markets start to build businesses and
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  communities around this, this sort of thing.
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  So there've been there've been plenty of studies that have
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  asked the question, what's the optimal size of government when
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  it comes to economic growth? The idea of being, of course,
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  you know, you probably want something, but you'd want, don't
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  want so much that it becomes onerous.
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  In this article that George Walker sent, I asked a slightly
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  different question. I said, what is the optimal size
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  of government to maximize human development in human
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  development? This is a this is a measure that
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  comes from the UN. And I love using this because,
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  you know, no one ever accused the UN of being conservative,
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  let alone libertarian, right? So if I can pull UN data and use
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  it to help bolster an argument for limited government, all of a
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  sudden I've got people listening to the argument who wouldn't
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  have listened before. So nonetheless, UN has this
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  thing, Human Development Index. And what they do with this is
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  they, they ask the question, what's the quality of life in a
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  country? And they look at all kinds of
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  things, longevity, education, income does matter, of course, a
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  whole bunch of things. They put together this, this
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  index. And you can argue that whether
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  they should or should not leave, put in or take out certain
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  things. And I, I don't, I'm not
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  interested in that argument for the moment.
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  I'm just going to say, look, they came up with this.
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  And according to the UN, the higher you score on this, the
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  the better quality of life the people in your country have.
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  Now picture this human development index, and you've
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  got a number for every country on the planet.
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  And this is repeated over multiple years, multiple
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  decades. So you've got this very rich
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  data set. And I'm asking the question as I
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  look over at all of these countries across all of these
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  years and I compare their human development index to their
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  government footprint, how big is their government relative to the
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  size of their economy? And I asked the question, given
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  that, what level of government gives you the maximum human
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  development, James, it's a purely metric thing.
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  Well, you've, all I'm saying here is you've got, you know,
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  you've got the data, you run the model, you get an answer.
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  Can I guess? You got to guess. 18%.
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  Yes, yeah, astoundingly, it's about 18%.
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  And what's astounding about that is, you know, you and I have,
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  have observed this for a long time that it, it seems to be the
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  case that regardless of what the federal government taxes,
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  regardless of what rate it taxes at, if you add up all of the
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  federal government's tax revenues as and divide that by
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  the, the, the size of the economy, what you find is the
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  government collects 18%. There's something magical about
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  this 18%. That's where that's the answer
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  you end up with. And lo and behold, I run this
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  thing and that same number comes out in the wash.
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  I'm not of the I. Wish I could say 18.
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  Percent. Wish I could say I was surprised
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  but. Is this founding?
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  I whenever anybody asks me a question that has anything to do
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  with numbers in politics and economics, I automatically go to
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  18% and say I'm just guessing, but is this the right number?
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  And like a universal constant or something.
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  It's, you know, it's like the old schoolhouse Rock 3 is a
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  magical number. Do you remember, turns out 18%
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  is a magical number. All right, so I've got some
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  follow up questions for you. Obviously that's not really the
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  answer you get in the US. That's just the answer you get
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  at the federal level, right? And then there's all kinds of
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  other things, right? We we know that from the tax
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  foundation that are are are rough.
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  Our rough tax exposure is about 3033%.
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  Yeah, if you put state and local.
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  In there as well, state, local fees, everything all in right,
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  including sales taxes and what have you.
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  So it's not exactly 18%. So OK, I've been to most
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  European countries, they're nowhere near 18%.
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  The Scandinavian countries aren't near 18%.
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  Now, clearly the Asian countries buy it.
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  Well, let me back, Let me back up a giant step.
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  Japan isn't near 18%. I don't think South Korea is
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  either. So who is?
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  Yeah, at at the federal level. Odd that you ask that because
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  for a completely different reason, I looked up these
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  numbers. Let me see if I've got anybody
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  I've got huh? Mexico at around 2020%.
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  Now the, the number I'm quoting you is not directly comparable
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  to the to the number we were discussing, but ballpark it's
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  not going to be too terribly off.
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  Mexico, New Zealand 21%, Israel 23, Switzerland 23.
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  Now that's interesting when you think about New Zealand,
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  Switzerland, South Korea's at 25, they're starting to get up
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  there now. But those are those are
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  countries that economically are quite solid.
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  Yeah, I I was almost certain you were going to give me a list of
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  developing countries that have been doing quite well recently.
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  Ah, yeah, Now there I don't have because the the list that I'm
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  looking at and I looked it up for a different question, one of
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  our listeners sent, this is only the OECD country, so I don't
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  have developing countries here, but I will.
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  But you do remind me in this, in this study, I looked at all
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  countries and then I split them into developed and developing
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  and found something interesting. First off, in both cases,
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  developed developing, there's an optimal size of government,
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  right? Is it gets bigger, things get
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  better, and then it gets two big things start to get worse.
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  But the interesting thing when you divide the countries into
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  developed and developing, the optimal size of government for
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  the developing countries is lot is larger.
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  The optimal size of government for the developed countries is
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  smaller. Which at a gut level you can see
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  makes sense. If you've got a developing
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  country, you want the government to have a a bigger footprint in
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  developing infrastructure. Get in, get infrastructure in
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  place, get some universities in place, get things moving, and
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  then as your economy picks up, step out of the way.
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  Yeah, You're making the case now for institutional arguments,
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  right? That it's the government's
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  responsibility, by and large, to foster or even found
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  institutions and then give up control of them.
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  Yeah. And I, I back off a little bit.
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  I I don't want to say I'm making the argument that government
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  should be doing that. This is an empirical study
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  numbers are making. I'm simply saying that the
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  numbers are pointing in that direction.
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  Now, whether the government should do it or somebody else
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  should do it, I can't say. What I can say is that you see
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  this phenomenon. Yeah, that's all interesting.
• 13:02
  And then, you know, there's a set of follow up questions about
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  the size of government and the level of freedom of people
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  experience. Right.
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  Right. And that's.
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  Very, because those two are going to go in.
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  Not always, but they will not always go in opposite
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  directions. And you know, because we can
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  point to a reasonably well off place or a very well off place
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  like Singapore where you're not particularly free, right?
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  You have you have a certain degree of economic freedom, but
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  very little social freedom. Or, or maybe it would be better
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  to say much less than we are accustomed to.
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  Right. Yeah.
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  So there, there are interesting things out there right there.
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  I suspect I, I think I would go so far as to say that I'm
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  absolutely certain there's no one-size-fits-all answer here.
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  There's just ballpark answers that are going to make different
• 14:06
  places a lot of sense in a lot of ways and and then in other
• 14:10
  places no sense whatsoever. Words and Numbers Live is a
• 14:13
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• 14:17
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• 14:19
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• 14:22
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