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Belmont Club

by Richard Fernandez

God Bless This Stress

January 26th, 2013 - 11:44 pm

Leo Linbeck III

Nassim Nicholas Taleb, the author of The Black Swan: The Impact of the Highly Improbable and a subject of considerable conversation here at the Belmont Club a couple of years back, is back with a new book: Antifragile: Things that Gain from Disorder.

He recently sat down with Reason’s Nick Gillespie for an interview: Taleb makes an interesting comment at 2:05:

TALEB: The human body needs some stressors, and everything organic and complex communicates with the environment via stressors.

Later, he talks about the importance of having “skin in the game.” He criticizes academics for never being held accountable for their erroneous predictions, and bankers for crashing the system in 2008 and then turning around and paying themselves record bonuses in 2010.

Finally, at 55:50, he shares his definition of “living”:

TALEB: My idea of living is taking risks for causes.

Stressors, “skin in the game,” risks for causes: life for Taleb is a struggle, a battle between man and his environment, man and the systems he creates, and ultimately man and himself.

Contrast this with what we hear out of Washington DC.

Vice President Joe Biden has spearheaded the push for gun control in response to the tragic shootings in Newtown, CT. His rationale for cracking down on guns, from a Washington Post article:

“We cannot remain silent in the country,” Biden said. “What happened up in Newtown: beautiful little babies, 6 and 7 years old, riddled — riddled — with bullets, 20 of them dead. I met with most of their parents. It is a national tragedy and a window into a vulnerability people feel about their safety and the safety of their children.”

Translation: guns are stressing people out, and stress is bad for them, and for the nation. So we must act to remove that stress. Rest assured that once all of the guns are off the street, the average national blood pressure will fall.

And it’s not just Democrats who have this propensity. Consider President George W. Bush’s statement when he signed into law the expansion of Medicare Part D, which provides drug benefits to senior citizens:

Drug coverage under Medicare will allow seniors to replace more expensive surgeries and hospitalizations with less expensive prescription medicine. And even more important, drug coverage under Medicare will save our seniors from a lot of worry.

In fact, you could say the purpose of just about every expansion of government program is designed to reduce stress. Poverty is stressful; unemployment is stressful; saving enough for retirement is stressful; obesity is stressful; raising a family is stressful; terror attacks are stressful; lack of health insurance is stressful.

(This last one is particularly problematic because we’re told that stress can cause health problems, so if you don’t have health insurance you’re going to get sick, and then fall back on the public system for health care. This means that Obamacare, which is supposed to make health insurance available to and affordable for everyone, will decrease costs, right? Hmmm, it’s not looking so good. Well, don’t worry; if premiums do go up, we can just create a program to “cushion cost increases.”)

And, to make matters worse, all of this stress is stressing out our elected officials. They’re stressed about the extreme partisanship at both the federal and state level; they’re stressed about what is said about them in the media; they’re stressed about having to face voters in the 2014 primaries; they’re stressed about not being able to alleviate the stress of the special interests who are daily calling on them to do something because they’re under so much stress.

But is stress a feature or a bug? Taleb makes the argument that stress is how we communicate with our environment, so essential to our survival. Fragile systems cannot handle stress; antifragile systems thrive in it. Black swans destroy fragile systems; black swans are killed, plucked, and eaten by antifragile systems, emerging stronger than before.

So what about the U.S. Constitution? Which kind of system does it define? Fragile or antifragile?

Michael Greve, one of our greatest living constitutional scholars, might have an interesting answer to that question: both.

In his latest book, The Upside-Down Constitution, Greve maps the transformation of the American system from competitive federalism to cartel federalism. It is a compelling and persuasive synthesis of the history of American constitutionalism.

Competitive federalism, according to Greve, is the historically correct way to describe the American system in the 19th Century, but is not explicitly embedded in the Constitution. Rather, the competitive federal order rose principally on the foundation of what I have called the Constitution’s “institutional commitment” principles. The working out of the constitutional rules was largely left to the Supreme Court, which ensured that it would proceed on precompetitive terms.

Cartel federalism, on the other hand, arose out of the abandonment of those “institutional commitments” in favor of anticompetitive system under the guise of intergovernmental cooperation. By abandoning its procompetitive practices, the Supreme Court turned the Constitution upside-down.

It is clear that our political system has centralized over the past 100 years. However, Greve makes two arguments that are not part of the standard narrative regarding that centralization of power:

  1. The Founders did not trust the states any more than they trusted the federal government; in fact, they may have trusted states less. They viewed the states as corrupt, parochial, and protectionist. Yes, they were distrustful of concentrated federal power, but that was in large part because they were distrustful of any concentrated political power, having experienced its effects at the state level.
  2. The Federal Government grew in power at the demand of the states, who insisted upon federal protection of state monopolies and cartels. The states were anxious to avoid regulatory competition, which became more problematic as the nation grew more mobile and sophisticated. They wanted to run a cartel; competition was a pain. And only a strong Federal Government could effectively enforce a cartel of states.

These arguments ring true to me. States are highly dysfunctional (albeit at a smaller scale than the federal government). And it is my observation that, contrary to popular belief, lower level officials often push for more regulation, not less. School districts competing to hire teachers will plead for state regulation of teacher certification, compensation, professional development, and grievance processes. State-level regulation preempts competition among districts. And states are often delighted to have the federal government preempt their decisions, as it gives them someone else to blame, and prevents the need to compete.

Let’s face it: competition is stressful. It’s a lot easier to run a cartel – which is why private firms often try to set up cartels, and we have laws to stop them. The problem, of course, is that cartels extract exorbitant rents and require an enforcer. Saudi Arabia is the enforcer of OPEC, and the federal government is the enforcer of state government cartel.

The movement from competitive federalism to cartel federalism was a move from an antifragile to a fragile system. Instead of a system with dispersed authority, kept competitive through Supreme Court jurisprudence, we now have a cartelized system where state, federal, and local governments (including the courts), together with big corporations, big labor unions, and big non-profits, work to “harmonize” the American way of life.

“Harmony” sounds like such a nice word. But it’s a dead end. Without competition, there is no stress, and without stress there is no long-term survival. I think it’s the point that Wretchard makes when he highlights the absurdity of the “buy the world a Coke” paradigm.

So we should embrace the stress, and not be discouraged by it. Yes, it’s tough, but it also toughens. And that toughness will valuable in the near future. It will make you antifragile, so the next time a Black Swan appears, you can enjoy it.

Deep fried. Cajun-style. Washed down with an ice-cold Coke.

 

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