Monday Bonus Norway Blogging

Daniel Mitchell thinks it's hypocritical for Norway's government to favor international action against tax havens, while Norway's government-run pension fund invests in companies that take advantage of tax havens.

The hypocrisy here entirely escapes me. I don't understand why libertarians pretend not to understand this, but it's not at all hypocritical to simultaneously say "insofar as X is permitted it's rational for me to do X, and therefore I will do X" and also "X should not be permitted." Generally the idea is that absent a prohibition on X, it's rational for many individuals to do X, but that prohibiting X would serve the common good. The rationality of doing X (polluting, investing in tax havens, defrauding investors, etc.) is generally the basis for thinking that regulation of Xing is required.

Comments

This tactic has always particularly bugged me. We play by the rules that are in effect, even if we are advocating a rule change - otherwise we handicap ourselves in the competition. Seems simple, but dishonest debaters manage to score a lot of emotional points with these types of arguments.

It's rather similar to the line that Al Gore is hypocritical because he advocates energy conservation but flies around the world to give speeches. Well, how convenient this is for the other side! It's OK for conservatives to fly anywhere they want to advocate their views, but it's not OK for liberals to do the same.

Posted by Virginia | July 16, 2007 9:33 AM

Are rationality and hypocrisy really mutually exclusive?

Posted by MattP | July 16, 2007 9:46 AM

It is the old "law as morality" vs. "law as policy" confusion.

Posted by Armando | July 16, 2007 9:53 AM

As a purported "creative artist," I cringe in sympathy when I see what P2P has done to the music industry.

But there's no way I'm gonna pay $17.98 for a CD, either.

Posted by James Gary | July 16, 2007 10:25 AM

Hit "post" too soon. The comment should read:

As a purported "creative artist," I cringe in sympathy when I see what P2P has done to the music industry. I'm entirely in favor of cracking down on torrent tracking sites and similar measures.

But there's no way I'm gonna pay $17.98 for a CD, either.

Posted by James Gary | July 16, 2007 10:27 AM

Matt is right.

It's analogous to the public policy versus personal action dichotomy. For example, it is possible to believe in extreme environmental action at a national level and simultaneously believe that personal environmental action is mostly symbolic. Such an individual would be willing to make personal sacrifices if they were part of a national action and if they were part of a widespread, national or international action, and choose not to make personal sacrifices if they are symbolic and part of an ineffectual action. It's not hypocrisy.

Conservatives like to use the "hypocrisy" charge. Sean Hannity almost always uses it when he has liberal guests. Hypocrisy means saying one thing and doing another. It is hypocritical to say that "all individuals should do X" and you do Y. It is not hypocritical to say that "our nation should do X" and you do something that seems contrary, since you are suggesting national action, not personal action. Hannity and others use the hypocrisy charge to avoid the question of whether the underlying policy proposal is good or bad.

Posted by john | July 16, 2007 11:14 AM

Some libertarians have this problem b/c they refuse to acknowledge collective action problems. They're so wedded to the magic of the free market that anything people chose to do in that market must be good and more 'efficient'. So you can't do something and also advocate banning it, b/c that wouldn't make sense to them.

Posted by mpowell | July 16, 2007 11:15 AM

Although you don't hear from them as often, alot of liberals buy into this sort of 'if you believe in global warming why aren't you living in cave' thinking. Sometimes it makes sense and if enough people do it then it will make a difference other times it's simpy unproductive.

Posted by ChrisB | July 16, 2007 11:23 AM

It is a bit of bite-and-switch argument. More precisely, it is reasonable in one context, unreasonable in another.

Suppose that someone postulates that prostitution should be illegal as immoral and sinful for both parties involved. Then it is hypocritical to hire such services.

However, if someone thinks that financial regulation should be altered not because they are immoral but because, upon careful analysis, they are not beneficial in the current shape, there is nothing immoral in obtaining benefits from these regulations. It merely means that on balance, they do more bad than good.

A good example is that one can think that prices of taxi rides should not be regulated. Should one organize an auction among the drivers before getting a ride? Or refrain from using taxis?

Global warming is an intermediate situation. I happen to think that the best solution would involve a lot of new nuclear power plants, and it is not hypocritical that I myself do not build any. But one can make lifestyle choices that make difference. But only up to a point: if poor people "emit" less carbon, it does not oblige one to become poor.

Posted by piotr | July 16, 2007 2:18 PM

Yes. In general, I find that libertarians ignore the
Tragedy of the Commons.

Posted by Jason | July 16, 2007 2:24 PM

Jason,

I was thinking of mentioning that, but didn't. Have you ever tried to explain this concept to a libertarian? It is amazing the contortions they will go to to avoid this problem.

Posted by mpowell | July 16, 2007 2:31 PM

Jason, mpowell:
That's kinda strange, I've heard many a libertarian use the Tragedy of the Commons to argue that everything should be a form of property and nothing communal. The idea being that everybody should own their inventions ("intellectual property"), their share of the environment/air-quality, etc. Not that it's exactly reasonable for individuals to start suing companies for polluting their share of air...

To get back on topic, I agree with Matt in general, but not in this particular case. A government could believe that a concerted agreed-upon action is necessary against tax havens, but that until that happens it's irrational for companies to individually and voluntarily stop.

However, the linked article says the Norwegian Finance Minister has "harshly criticized" companies that use tax havens, and said that they are a "provocation against Norwegian taxpayers". She clearly seems to think these companies *should* be taking individual, voluntary action in the absence of a law--hence the hypocrisy when she decides differently for government corporations.

Posted by vasi | July 16, 2007 10:56 PM