Tag: Tyler Cowen

On Trade

You’re talking history, right? I’m talking now. Because down here, it’s still “Who’s your old man?” ‘Til you got kids of your own and then it’s, “Who’s your son?” But after the horror movie I seen today… Robots! Piers full of robots! My kid’ll be lucky if he’s even punchin’ numbers five years from now. And while it don’t mean shit to me that I can’t take my steak knives to Dibiago and Sons, it breaks my fucking heart that there’s no future for the Sobotkas on the waterfront!

~Frank Sobotka, The Wire

One of my favorite concepts in economics is the Theory of the Second Best.  While it can be a bit technical, in summary, the theory is that if, for whatever reason, the required conditions for the optimal outcome are impossible to achieve, the second best outcome may require deviating from the conditions which were required to make the optimal outcome possible.  To use an analogy, most Democrats preferred ranking of the last three candidates for President was Obama, Clinton, McCain.  But one of the required steps to the optimal outcome of Obama’s election was his nomination, which made the second best outcome impossible.

The second-best problem is one which has particular resonance for me as a libertarian.  Many libertarians allied themselves for years with the Republican party, to try and establish the required conditions for a libertarian state.  However, the outcome of a libertarian state is further away than ever; responsibly, a libertarian must consider which of the desired conditions for our optimal outcome are negotiable in order for us to achieve our second-best outcome.  Of course, this is hardly only true for libertarians.