Tyler Cowen: "Which are the true perils facing democracy?"

So what have you done for me lately is perhaps one of the deepest expressions of ingratitude one can express. Fortunately, when it comes to Cass Sunstein, there is always an answer to this question. Cass has always done something for us lately, as evidenced by his columns, books, and blog posts. So to try to conceptualize the contribution of Cass Sunstein is especially difficult exactly for this reason. And if there's anyone Cass reminds me of, if I may draw a parallel from a very different universe, it's actually Bob Dylan, who has had so many different styles, so many different periods, so many different ideas. And I think about 2 months ago I emailed Cass and I said, "Oh, they invited me to give some remarks on your behalf. You know, any suggestions for what it is I should talk about?" And Cass, of course, maybe completely, slightly, partially tongue-in-cheek said, "Oh, you've got to talk about Bob Dylan." I'm not going to talk about Bob Dylan, but I'll mention a Bob Dylan analogy to structure this talk. And there was a director named Todd Haynes in 2007. He wanted to make a movie about Bob Dylan. And how can you possibly make a movie about Bob Dylan without Bob Dylan? So the imperfect substitute he resorted to was to have 6 different actors, actresses play the role of Bob Dylan in the movie, and thus only imperfectly could he express something about the essence of Bob Dylan. So to think about what I'm gonna say, you're not getting Cass Sunstein, he's here sitting in front of you. You're really not even getting Tyler Cowen. Think of yourself as getting Tyler Cowen as an actor playing Cass Sunstein. So if I had to boil down, like, my takeaways from Cass— and there's not a "the Cass," there are multiple Casses— but if I were to put it in terms of 4 principles, here's Tyler Cowen, the actor, playing Cass Sunstein. First, as I see it, Cass believes it is possible to have a society based on some notion of maximum toleration. So I always like to think, who is a thinker arguing against? I think of Cass in a sense as the ultimate anti-Hobbesian. So for Hobbes, there's some irreducible clash of negative and zero-sum games in society. I think Cass has a much more positive vision that it's possible to expand the scope of human freedom, liberty, democracy, not without limit, but really quite far along the positive line. I'm always struck by how Cass compares his nudge idea to GPS. GPS doesn't make you drive the car any particular way, it nudges you to go a certain way. If you ask a simple question, can we have everyone on the road using GPS? The answer absolutely is yes. And actually in the longer run, this will make GPS better. So this ideal of maximum toleration. Second point that I read into Cass is simply the stress on the very simple idea that prosperity is good.

And important.

In this regard, he's arguing against Rousseau, who saw maximum virtue in a more Spartan-like society. Cass, in his role as an actual political agent at OIRA in the Obama administration, he oversaw the regulatory process, and he was constantly stressing the need to have regulations that would increase wealth rather than limit wealth. But again, we have to ask, who is Cass arguing against here? And suddenly in the background, I think he is rejecting the Chicago older Richard Posner idea that the goal of policy is to maximize wealth. So Cass, for the most part, I view as defending cost-benefit analysis. He's the one waving that banner, bureaucracy now, cost-benefit analysis. But at the same time, there's some subtle recognition that if you just maximize wealth, you are not supporting the preconditions of democracy. So to have this idea of a flourishing people existing in a state of maximum toleration, You need to always be modifying cost-benefit analysis by nudges applied to cost-benefit analysis itself to make sure that you are pinning down the democratic preconditions. Third point I read into Cass: Reason is highly imperfect, therefore we must use reason. Again, this is not him, this is not me, this is me the actor playing him. But you heard Cass before tell you how many disagreements he thinks are judgments of fact. So in so much of Cass's articles about polarization, about the need for nudge behavioral economics, there is a sense that decisions are imperfect. But the actual remedy for this is not to abandon reason or not to move to overly strict rules, but actually, ultimately, to apply more reason using a standard that Cass at times has called judicial minimalism. But I think of this notion of judicial minimalism as running throughout his work kind of little nudges from every direction. So Cass the legal scholar, Cass the nudger, Cass in government, they're kind of multiple people, but at the same time, they're all the same person. So here I think Cass in part is arguing against Hayek. Hayek stresses the importance of the spontaneous order. You can't have government interfere in the spontaneous order. You need strict rules constraining government. As I read Cass, government is part of the spontaneous order. It's not simply an interference. For the spontaneous order to work well, you need judicial minimalism, bureaucratic minimalism throughout government, tweaking the system, iterating, evolving better toward this regime of maximum toleration. So it's kind of a redo on Hayek that if you can have metaphysically light, simple tweaks of the system with experimental feedback coming from government, that actually you end up in this apparently paradoxical position. Well, reason is highly imperfect, and yet we must use reason because reason is what we have. And there is a way to use reason that is not based on dogmatism, not based on excess metaphysics, and actually can get us somewhere. So to think about this overall, you know, humanistic vision of Cass Sunstein, maximum toleration, prosperity is good, and important, reason is highly imperfect. The final plank of this, again, under my reading, is simply that democracy is indeed possible and it is possibly stable. And if you think of a society that is wealthy, wealthier nations, oil aside, tend to be democratic. If you think of a regime of near maximum toleration, if you think of the use of reason as being possible, and indeed desirable, I think you can gently glide into this vision of modern society where democracy can indeed be permanent. It can work pretty well. We will always be disappointed by it, but nonetheless, it's the game we have where we both acknowledge the imperfections of reason and also the power of reason. And if you ask, who is Cass arguing against here? I would say he's arguing against the elitists, the autocrats who are these days growing more powerful, and also implicitly arguing against the cynical populists who on the surface are all pro-democracy, but ultimately they seek to subvert what I've called the democratic preconditions. If I may cite another one of Cass's interests, that's Star Wars, which he wrote a wonderful book about. Padmé, who was played by Natalie Portman, in one of the early prequels, she has a quite well-known line, And she says, quote, "So this is how liberty dies, with thundering applause." And that's what she says when the Empire in Star Wars is about to take over the Republic. And as I read Cass, he has refuted her. That has to be wrong. In Cass's worldview, as I understand it, Padmé should have said something like, "So this is how liberty dies, with a 40% approval rating." Now, one thing striking about all these perspectives on the Cass Sunsteins is how much they relate to Ludwig Kohlberg, who of course is the inspiration behind this prize. Ideas of the Enlightenment, reason, tolerance, even diversity. In his, uh, Swifty and Travel memoir, he expressed a quite contemporary appreciation for the benefits of diversity. But most of all, this notion that there is such a thing as the freedom of the will, which can be used to shape a better world. Central insight in Holberg, I think also central insight in the works of Cass Sunstein. Now, on the Holberg website, there are all these questions that they said we should answer. And I know they didn't think anyone was going to take them literally. But I have a bunch of these questions.

I'm reading them off the website.

And me, Tyler Cowen, as actor playing Cass Sunstein, I'll try to address them. As I think maybe Cass would. Question 1— this is all taken from the Holberg website, I'm paraphrasing a bit— should democracies be more technocratic? I think it's not exactly maybe how Cass would ask the question. So there's a belief in deliberative democracy, and technocracy needs to be a nudge. It cannot and should not be autocratic. So think of technocracy as actually part of the spontaneous order of a liberal society, not something opposed to it. So it's not like more technocratic or less technocratic, but it's the right kind of experimental technocracy based on a minimum of metaphysical presuppositions with a lot of experimental feedback. Question 2: What kind of threat is posed by tribalism? It's a very interesting question. It's always struck me whenever I've studied actual tribes, like empirical tribes out there in the world, they're not like the cliché of tribalism.

That is, the tribe itself tends to be quite divided. So when we say tribalism, like, here's my group, here's your group, tribes aren't that way.

So the problems that we call tribalism, I think they're often quite modern problems and not always ancient problems and should be addressed as modern problems.

So maybe here again Cass is addressing Hayek. So Hayek thinks of the fundamental issue in society is there some kind of atavistic tendencies in human beings. That is, we're programmed to live in small groups, but we're thrust into large modern society. And the problem is that we still act as if we're in these small groups. So it's our tendency to revert to how we were in the past. But again, in a modern age, I suspect the real problems are problems of modernity, not tribalism. Maybe the people in groups we're upset about, if only they were as uncoordinated as the tribes, we'd be a lot better off. How is deliberative democracy possible with social media, another of the questions. Cass wrote a Facebook post on this you all should go read. And it's striking, he more or less starts and ends the Facebook post with the invocation of John Dewey. And I think of John Dewey as one of the most important thinkers and inspirations for Cass. So Dewey stresses democracy is always a work in progress. Social media also always a work in progress. They have a fantastic emancipatory and liberating potential.

That's not all they have.

In fact, any technology with that kind of potential also can be really extremely dangerous. But I think if we believe reason is possible, There is a kind of open, unfettered environment on social media, and there is a kind of turf for reason to operate, for progress to iterate.

These are new technologies.

How long did it take us before we started using the printing press really well? Are we there yet? I'm not sure, but I think social media will in some regards, regards, go down a similar road. So again, if we go back to this idea of a work in process, and imperfections. Reason is imperfect, but we should and must use reason. I think we'll be actually cautiously optimistic about social media no matter what flaws we may see in them. Another Holberg question: How does bounded rationality fit with democracy? I don't view bounded rationality per se as a problem for democracy. Bounded rationality It does make people do irrational things, or they may vote for the wrong candidate. They may not gather enough information. They may have irrational prejudices in the public arena. But at the same time, the very expressive dimension of human life stems in part from what is called bounded rationality. Why are we expressive, symbolic beings rather than pure rational calculators? It is because, in part, We have bounded rationality. So the very existence of a public sphere of politics, of the electoral arena, that is all depending on part on bounded rationality. I don't like calling it irrationality, but let's just say elements of human decision-making that do not fit very narrow models of rationality. And the desire is to show ourselves to the world, to tell other people, tell other people things, to instruct them, to guide them, to be guided by them. To somehow be aspirational. Those are not all necessarily rational in the narrow sense of the world. So this arena where reason competes with unreason, it really requires a lot of bounded rationality. And we should not think of this as in any way really the death of democracy. It's actually, oddly enough, one of the democratic preconditions. Question 5 on the Holberg site: Is John Stuart Mill's harm-to-others principle now obsolete? You may recall John Stuart Mill, On Liberty, one of the great classical liberal works. I think also, in my view, an inspiration behind the work of Cass Sunstein. Mill straddles classical liberalism and modern liberalism. He suggested that people had liberties to do certain things provided they did not harm others. I think in the contemporary world, this doesn't quite apply as Mill stated. The world has become so complex, so globalized, chains of causation are so distant, so indirect, that what constitutes harm to others is not as easy to specify as maybe it was in Mill's time. So the idea that you need a judicial and legal and economic and humanistic understanding of harm to others as something that's more systemic, whether you're considering climate change or this idea of democracy having microfoundations, preconditions. I don't think the simple notion of, does this harm others? In stretching out my arm, did I punch someone in the nose? I think we need to go much further than that. And I think of a lot of Cass's work as providing guidance for jurisprudence and actually for judges in particular of how we might develop legal reasoning behind these ideas of judicial minimalism and nudge and use of reason in an environment where reason is highly imperfect, but maximum tolerance is possible, that we need to spell out this much more complex sense of what harm to others means, where we look at the entire system and not just whether, you know, my fist happened to end up hitting your nose.

Now here's two questions I'll take together. One is, should social media—Facebook, Twitter—be regulated?

The second, are social media, or should they be, self-regulating? Really the same question.

So that's a very tough one, I think. It's one of the toughest questions on the list. So when you face a really tough question, what is it you do? Well, you don't think, right?

You go to Google. So I just entered in, you know, Cass Sunstein Facebook regulation. Like, what am I gonna find? But with Cass, Google is dangerous. I'm not sure there's any thinker where Google is more dangerous than Cass.

A lot of writers, if you Google their name and the topic, whatever comes up, you can conclude that's what they said on that topic.

But with Cass, the amount of writing is great enough. He probably has 3 unpublished, maybe 2 yet unfinished books on whether or not Facebook and Twitter should be regulated. That won't turn up in Google. But I'll tell you what I found. Here's the clearest instance I found of CAS's policy position on whether Facebook and Twitter should be regulated. And I quote— this is from Bloomberg— quote, "The question deserves sustained attention." I think that's actually the right answer. So as I interpret—

and I stress the word interpret CAS— Tyler Cowen, he has suggested that social media start by introducing more randomization and bringing people more into contact with ideas outside their bubble.

That is a suggestion, it's a tweak, it's a kind of nudge.

And I think after that, maybe we don't really know, but let's start with that nudge as part of a democratic process.

Let's see what happens.

Let's not take other options off the table.

But it's really striking that an issue where Cass has thought and written so much, you know, the clearest quote I find is, "The question deserves sustained attention." And I would take that answer very, very seriously. So again, think in terms of the broad system. How is it that we solve problems? Cass's answer to me seems quite consistent with other parts of his work. Question 8, how do we square the rise of China with democracy? Well, this is a tough one. I think the world right now is in what Cass, in some of his work, has labeled a cascade. There can be a cascade based on a rumor. The rumor gets repeated. Something goes viral on Twitter. There can be a cascade of regulation. You get some regulation in an area, a lot more follows, or a lot of countries copy the initial regulation. I think right now we're seeing the beginnings of an autocratic cascade. So I was just in Ethiopia, which is probably the best performing economy in Africa. They've been averaging 10% growth for a decade. It's not a democracy. It's not clear that the Ethiopian elite in the short run aspire to be a democracy. They look at China. China's the major investment in Ethiopia. China is doing well. They think, well, maybe we can copy China. Rwanda would be another example. Turkey would be another example. So in a world where at least superficially the most successful institution appears to be the Communist Party of China, whether or not you think that's true, I think we are seeing this cascade and it is an unfortunate one. You might look to the writings of Cass and think, Well, how is it that we're going to limit or reverse cascades? You know, in the zigzag of history, how do we get from the zig to the zag? You know, right now, are we in the zig or the zag? I prefer the zig to the zag. So I think right now we're in the zag and we want to get back to the zig. There's not any simple monolithic answer, but I think it gets back to this idea of reason is imperfect. We have no alternative but to use and embrace reason. No guarantee of success. The good news is democracy is extraordinarily robust, most of all here in Norway, I would suggest, but not only. And on that, you know, we need to ride the waves and do a better job of applying reason. Other question on the Holberg website: Where does Hayek's emphasis on dispersed knowledge stand today? Someone needs to write an essay. You know how Mill wrote that essay, you know, Bentham and Coleridge? I'd love to see someone write an essay like Sunstein and Hayek. Where do they agree and where are they different? And I think this idea that Hayek did not trust democracy. He grew up in the Austro-Hungarian Empire. He witnessed the rise of fascism and Nazism. He was a mature adult when he wrote Road to Serfdom, and I believe in, you know, 1946. Forget about 1942, but 1946, how many stable democracies were there in the world? Single digits, and it wasn't 9. So I don't agree with Hayek's skepticism about democracy, but I think I can at least understand where it comes from. Cass, of course, growing up in the postwar era, America doing well, Western Europe rebuilding, rising to unprecedented glories. Much of East Asia becoming democratic. There's a cascade in favor of democracy. So it's much easier today than it may be in 1948 to see democracy as part of the iteration of dispersed knowledge and then to ask, how can we make that iteration better? A final question on the Holberg website that I could see was, what is the best Taylor Swift album? Cass actually has written on this too, and he's a world-famous squash player. I don't have time to discuss that point, but Cass and Hayek don't agree on that either. Overall, when you put together like everything Cass has written, said, thought on democracy, I think it's a remarkably vivid and robust pro-democratic vision. I think it's quite optimistic, but it's not at all naive about the imperfections of human reason. So one might suggest this is a vision we very much need today, more than ever before. And if I may go back to Bob Dylan, if I'm gonna contrast Cass with all these people, well, some ways he's like Dylan, but here's a way in which he's different. Dylan in 1983 on his Infidels album, Cass knows it, Famous song Union Sundown, Dylan wrote, and I quote— it's pessimistic, by the way, brace yourself— democracy don't rule the world, you'd better get that in your head. The world is ruled by violence, but I guess that's better left unsaid. We need a response to this much more than before because we're in somewhat of this autocratic cascade. And if we're looking for responses I would suggest you all consider visiting, more visiting, revisiting, whatever the right word would be, the works of Cass Sunstein. Now, I've been the Tyler Cowen as an actor playing the role of Cass Sunstein, but let me just step back into being Tyler Cowen. I've tried to tell you a lot as an actor about Cass Sunstein, but that's Cass the thinker, the writer, the blogger, the speaker. I mean, ultimately what's important, me speaking as not an actor, is Cass, the human being. And I'll describe him in two ways that I feel are remarkably strong and account for so much of his influence and for so much of the energy that has gone into this incredible body of work. And here are my two words. The first is enthusiastic and the second is gentle. And finally, if you're asking what are the other preconditions of democracy, I would suggest studying those two qualities also and the people who embody them. Thank you all very much.