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The Boxer-Lieberman-Warner climate bill is being debated in the Senate: This is important stuff—the first real attempt in the United States to regulate greenhouse-gas emissions. Does the bill make sense?
Its main purpose is to create a cap-and-trade system, and there has been a recent debate in the blogosphere about whether a cap-and-trade system is better or worse than a carbon tax. The issue is probably moot: For no doubt political reasons, a cap-and-trade system is the only system on the table. But it is worth understanding the difference between the two.
Imagine that there are only 10 people who engage in activities that cause greenhouse-gas emissions; perhaps they each burn one gallon of gas per year in their factories. We decide that, from the standpoint of the climate, it would be better if a total of nine, rather than 10, gallons of gas are burned per year.
We could achieve this goal in two ways. Under a cap-and-trade system, we issue nine permits to burn one gallon of gas. You have to own a permit in order to obtain a gallon of gas. Voilà: We have solved our problem. Only nine gallons of gas will be consumed.
Under a tax system, we make anyone who buys a gallon of gas pay a tax. Suppose that each of our 10 people is willing to pay different amounts for a gallon of gas—because they gain more or less from burning that gallon. For example, one person is willing to pay $4, one person is willing to pay $4.20, the third person is willing to pay $4.30, and so on. Suppose the untaxed price of gas is $4 per gallon. To ensure that only nine gallons are consumed, we set the tax at 10 cents. Now the $4-person won't buy any gas; the others will. Our goal is achieved.
So, the two approaches have the same effect on the climate. One involves setting a price floor; the other involves setting a quantity ceiling. Most economists prefer the tax approach, however, because if you get the tax slightly wrong, the social costs are likely to be lower than if you get the quantity limit slightly wrong. To see why, suppose that there is an emergency and it suddenly becomes important for all 10 people to have a gallon of gas. Under the tax system, the lowest-value user can simply pay the tax; under the permit system, one person is out of luck. (The story is a bit more complicated than this; see here; and anyway, a cap-and-trade system can be given safety valves that perform the same function.)
Brad DeLong thinks that the two systems have different distributive effects. But we can distribute however we want to. For the cap-and-trade system, we could auction off the permits, charge a low price, charge a high price, or give them away for free. If we sell them, we can give the revenue to whomever we want to give it to. We could even give the money back to the buyers minus the tax that they would pay under the tax system, in which case the distributive effect would be the same as that of the tax system that I described above. Similarly, under the tax system, we could take the revenue we collect and give it back to everyone we taxed except for the 10th guy who refrained from buying the gas—and we'd have the same distributive effect as that of the initial cap-and-trade approach.
Everyone seems to fear that under the bill's cap-and-trade system, Congress will give away the revenue to people who don't deserve it. Maybe so, but Congress could do the same thing if it imposed a carbon tax. Revenues from the tax have to go somewhere, after all. Some people want Congress to give away the permits for free so that it doesn't obtain revenues that it would then squander. But if the cap-and-trade system means anything, it means not everyone will get a permit who would like one. That means Congress will have to pick and choose among those to whom it gives permits, and again we have the same risk of abuse, including lobbying and favoritism.
If the permits are auctioned off, what should be done with the trillions of dollars that are raised? Lieberman would invest it in research into clean energy. That's a bad idea: The government has no insight into where the research dollars should go. The whole point of a cap-and-trade system or (equivalently) a tax in the first place is to get industry to make those research decisions so that the government does not have to. If it won't do enough, then fewer permits should be issued, which will increase the pressure to find alternative sources of energy. Robert Reich says give the money back pro rata to American citizens. But why do that? The government gets revenue in all kinds of ways-say, by auctioning off the spectrum or by licensing lands for grazing or by charging fees for green cards-and no one thinks that the money should be returned to taxpayers pro rata. People think that Congress should spend this money or, if spending is already adequate, tax people less. The cap-and-trade money should go into the Treasury with all these other sources of revenue. Taxes can be lowered, debt retired, or ordinary spending increased. Congress can misspend our money, but that is true whether it gets our money from incomes taxes or permit auctions. There is no reason to treat the revenues from these two sources any differently.
Aside from the uncertainty issue, which favors the tax system, there is no reason to favor one system over the other. They have the same environmental effects for (roughly) the same cost to the economy. We can redistribute wealth however we want, as we always can, system or no system; and whenever Congress acts, it can misbehave if it chooses to, and lobbyists will be involved, regardless of the type of law Congress ends up enacting. So why the enthusiasm for the cap-and-trade system? Something about the absence of the word tax in its name?
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Thanks to D.C.-based "Convictions" reader Mark I. Levy for sending this late entry to last month's Recusal Quiz:
In answer to our question on seminal cases in which one more recusal would have compelled the Supreme Court to affirm without opinion—as it did last month in an Alien Tort Statute case—Mark points us to Chevron v. National Resources Defense Council (1984). Establishing a principle of deferring to administrative agencies known to this day as "Chevron deference," a unanimous court reversed the opinion below. That unanimity came in the form of a 6-0 vote; Justices Thurgood Marshall, Sandra Day O'Connor, and William H. Rehnquist did not take part. Thus, in Chevron as in the Shelley case cited a few days ago, one more recusal would have led to a far different result.
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I've always admired Rick Hills' facility with some rather dense intellectual material, so I hesitate to attack him for anti-intellectualism, even though he applies the label to himself. Maybe it's because I've just come back from three weeks in Germany and France, but I want to defend what Hill's derides as obscure intellectualism. I'd agree that sometimes difficult prose is deliberately obscure in the sense Orwell described in Politics and the English Language. (But wasn't Orwell more concerned with the jargon of bureaucrats and politicians than of philosophers and literary critics? His closest modern analogue is not Martha Nussbaum on Judith Butler but rather Harry Frankfurt's On Bullshit.)
But I think it's wrong to suggest that any writing that is not easily accessible must be in some sense dishonest. I can't claim to have fully grasped (OK, or fully read) Bodies That Matter-a notoriously difficult book. But I do think that difficult prose can have its virtues, even when I don't have the stamina to find them. Michel Foucault, for instance, changed the way a generation thinks about the relationship between knowledge, science, and power; Jean Paul Sartre offered a challenging account of the relationship between alienated modern society and individual integrity and responsibility. Their texts aren't for everyone, nor were they written to be. But why dismiss them as dishonest simply because most people don't have the taste or the patience for them? I don't care much for Free Jazz or the atonal compositions of Arnold Schoenberg, perhaps in part because I haven't taken the time to try to understand them (life is short, as Hills points out, and Miles Davis and Mozart offer layers of complexity in a more compelling aural package), but would it be fair to conclude that Ornette Coleman couldn't play the sax or Schoenberg was tone deaf? I'd say that difficult prose is a style, which offers a different experience than the popular essay; that unless we think we can easily sever content from style, the same ideas could not be expressed otherwise; that like popular writing, difficult academic writing can be both well and badly done; and that unless I've made the effort to read the text on its own terms, I'm not well positioned to know which is which.
I sympathize with Hill's frustration with needlessly obscure work, and there's no doubt that the legal academy produces its share. But we must not exaggerate the harm even the worst of it causes, as Hills does when he writes: "It takes the convoluted abstractions of a Carl Schmitt or a Heidegger to offer apologetics for Hitler; a Sartre, to temporize about Stalin; a Foucault, to defend Khomeini. In this respect, I stand with George Orwell who spent the 1930s and 1940s denouncing the obscurity of intellectuals' prose as a cloak for tyranny." But tragically Hitler did not need Martin Heidegger because he had Joseph Gobbels as well as plenty of other less obscure apologists in Germany, elsewhere on the continent, and for quite a while in England and the United States. And let's not forget that today it is not intellectual obscurantism that has managed to defend torture and indefinite detention without trial but rather conventional legalese, familiar political jargon, and some deceptively homespun abstractions. I think John Yoo and his ilk would be Orwell's target were he writing today-not Judith Butler or the students of Foucault.
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In the course of explaining why he is an "anti-intellectual," Rick Hills invokes Martha Nussbaum, Immanuel Kant, Carl Schmitt, Martin Heidegger, Jean-Paul Sartre, Michel Foucault, George Orwell, Pierre Bourdieu, and Socrates—all in a short blog post!—which raises the old question of whether there are certain positions that cannot be refuted without self-contradiction. (In a subsequent post, Hills cites Edmund Burke, Adam Smith, Samuel Johnson, Hannah More, William Godwin, Gouvernour Morris, Hegel, Heidegger, Searle, Quine, Derrida, Hamilton, Jefferson, Sartre, Kojeve, Putnam, Kripke, Davidson, Pirandello, Claudel, and Arendt.) Only an intellectual can understand the arguments of intellectuals, and so one cannot criticize intellectuals without destroying the basis of one's own credibility—like the Cretan who says "all Cretans are liars." Hills is really attacking a certain type of intellectual (the deliberate obscurantist) but confusing a subset of the class (to which he does not belong) with the class itself (to which he does belong). Then it becomes clear that Hills, an intellectual, is attacking a certain different type of intellectual: one who deliberately writes in an obscure way in order to conceal the weakness of one's argument while intimidating potential critics. We need a term for his error: how about (for lack of any other) synecdochic literalism—mistaking the part for the whole.
This error is common. People resent lawyers, politicians, and doctors because some lawyers, politicians, and doctors act badly. But self-refutation occurs only when the speaker belongs to the class that he confuses with the subset. Consider Obama, Clinton, and McCain—all members of the elite—claiming to be anti-elitist, in much the same way that Hills claims to be an anti-intellectual. Indeed, intellectuals belong to the elite. These synecdochic literalists can't be anti-elite without being anti-themselves. But they can oppose a type of elite, the type who uses financial, social, or (like the type of intellectual Hills criticizes) intellectual resources to shore up his position while claiming to speak for the masses that he secretly despises. So, why don't they just say this rather than making themselves vulnerable to charges of hypocrisy?
It's not so simple. In America, you can't claim to be a member of the elite—even the "good," public-spirited elite—without instantly losing all credibility, even though it is as plain as day that there is a tiny elite class that calls the shots within the very broad constraints imposed by the system of popular elections. (A zillion years ago this problem was debated by John Dewey and Walter Lippman.) Everyone wants to belong to that class, but no one wants to admit it, for it is a class that one can join only by denying that one belongs to it. It is this strange little fiction that keeps our democracy from falling apart. Rule by the people really means a kind of civility on the part of the elites.