This post over at Marginal Revolution by Alex Tabarrok is a good example of the neo-Taylorism growing like a fungus over the ruling class. A century ago, the new technocrats that were born of the Industrial Revolution, were sure you could use engineering principles to fix human society. Just as you could organize people inside a factory or even in an army, you should be able to use the same strategies to organize society a a whole. It was technocratic utopianism.

Now, guys like Tabarrok are not trying to use engineering or even corporate management techniques to reorder society. Instead, they come at the problem from articles of faith within modern economics. They believe they can reform society by using the right combination of incentives. In fact, they reject the very notion of society and instead see nothing bu collections of moist economic units. Adjust the market conditions the right way and those economic units will respond accordingly.

Now, Tabarrok  is a fanatic. For instance, his enthusiasm for open borders is slightly deranged at times. This post is a good example. One can reasonably debate immigration. There’s no debating a fanatic celebrating Open Borders Day. Santayana said, “Fanaticism consists in redoubling your efforts when you have forgotten your aim.” That seems to be the point of the open borders crowd. They no longer know why they worship at that alter. They are certain they must do so every day.

Anyway, this is what stands out in his post:

Politics, however, began to intrude into this Coasean world in the 1940s and 1950s. Auto sales accounts for some 20% of sales taxes and auto dealers employ a lot of people so when it came to a battle in the state legislatures the auto dealers trumped the manufacturers. The result was franchise laws that were increasingly biased towards dealers. In essence, exclusive franchises became locked into place, manufactures lost the right to add dealers even with population expansion, quantity forcing became illegal and dealer termination became all but impossible.
A common feature in this crowd is the excessive use of the word “Coasean” whebever they are pushing a policy. Ronald Coase was a brilliant economist. The Nature of the Firm is a wonderful piece of work that has stood the test of time. He was not, however, a prophet. The priests of this cult have turned him into exactly that. They compulsively yammer about Coasean markets and Coasean outcomes. If Jesus was the son of God, Coase was the son of Efficiency, the top of their chain of being.

The result of dealer rent seeking has been higher auto prices for consumers, about 6% higher according to one (older) study by the FTC. Consumers have been stiffed in other ways as well. In some states, for example, manufacturers were required to reimburse dealers for a repair under warranty whatever amount the dealers would have charged consumers for the same repair not under warranty. As a result, dealers had an incentive to increase their price to consumers because that increased what they would be reimbursed for repairs under warranty. The franchise laws have also resulted in a highly inefficient distribution of dealers as populations have moved but dealers have been frozen into place. The inability to close, move or consolidate dealers has impacted the big-3 American firms especially because they have older networks. As a result, a typical GM dealer sells 377 cars a year while a typical Honda dealer sells 1,062 and a Toyota dealer 1,488.

Tesla wants to sell directly to the public but more generally what we need is to restore the Coasean balance, put dealers and manufacturers back on a equal footing and let the market decide the most efficient means of retailing and distributing automobiles.

That’s the thing with neo-Taylorism. The adherents talk a lot about freedom, liberty, choice and free markets, but when it gets down to it, they just want to impose their morality on everyone else. New Jersey has free and open elections. The people are as sovereign there as they are in any other state. Their representatives are just as crooked and dishonest as any other politicians, but that’s a constant in human societies. Any economic theory, religion or ideology that fails to recognize that is lunacy.
For the new utopians, God is a frictionless, efficient market. Just as Christians measure human action against the ideals of Christ, these guys measure public policy against the ideals of their faith. Like all iterations of the materialist creed, it willingly tramples on any human that gets int he way. In the case of New Jersey, Alex would love nothing more than to throw the men and women working in the car dealerships into the streets and see them starve if it pleases Efficiency.
Libertarian economists always bring to mind Whittaker Chambers take down of Ayn Rand. Like Libertarianism, this sub-cult is a sterile and pitiless dogma. If the choice is between crushing the citizenry in the gears of commerce and paying a little extra for a sedan, these people will feed your kids into the machinery without a moments hesitation. It also has the sort of foolishness to it that Kipling had in mind. It is is why neo-Taylorism is a good label for them, even if a little clunky.
The misappropriation of math and science to areas of life outside of pure math and science has its risks. Using statistics to judge baseball players is harmless entertainment and a reasonable way to determine the market for light hitting shortstops. Using arithmetic to dispose of the unfit is monstrously self-destructive. Economists will claim that the gas chambers are outside the bounds of their morality because of the harm it caused specific people. That’s fine, but they open it up for debate. Any moral code that leave open the possibility of murder being moral is inherently defective.
That’s what you see with Tabarrok. He is all for letting one group of people murder another group of people if it leads to cheaper cameras or cheaper lawn care. He does not put it in those terms because even Randian fanatics understand marketing. You’re not getting far advocating murder, but it is murder none the less. If one group of people invade the lands of another, replacing the native culture with their own, it is murder. It’s ethnic cleansing. Instead of being directed by an easily identified villain it set in motion by economists hiding behind the walls of their university.
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econ institute
10 years ago

Any moral code that leave open the possibility of murder being moral is inherently defective.

But what if killing one person can save the lives of many? The word murder versus kill have different meanings, the later alluding to premeditation and malice against an innocent subject.

I think you’re reducing the issue of free market capitalism the most extreme possible outcome, that somehow this justifies murder.

10 years ago

If you’re so concerned about the plight of the auto dealership workers what about the welfare of all the government employees you and those on the right constantly denigrate and threaten? It’s okay to protect a salesman’s job but a teacher – or retired teacher drawing a pension – gives the CMC fits. FWIW I believe the robots and software are killing jobs – evidenced by the collapsing LFPR – the sooner we close the borders and move to national basic income the better. But in the meantime I’m in favor of paying higher prices for stuff if it keeps… Read more »