October 31, 2006

Far from the Meddling Crowd¹

The first time I drove across the state of Utah was in 1989. Leaving Salt Lake City, I'd climb over the Rocky Mountains, through Wyoming, and then descend into the plains of Nebraska. I'd pass through vast ranches, marked by hundreds and hundreds of miles of cattle fences along the I-80. Occasionally, a chimney stack would rise above the rocks, sending smoke signals to signify the sparse presence of humanity. Nebraska was again a tapestry of endless corn fields and soy farms stretching into the horizon.

It wouldn't strike me then, but only when I would drive back from Minneapolis along the same highway. Thereafter, every time I drove back and forth between Minnesota and California, I'd wonder how far removed these ranches and their owners were from the meddling crowd in Washington D.C., not just physically, but mentally, too.

What a contrast it was from the crowded cities andd towns along the coasts! Fresh from India, and after the first few days of winter in Cornell University, my friend, Anamika, wrote to me, "...I miss the crowd here. Human population is too sparse, which is a pity, as a crowd like Chennai's would have generated enough heat to keep the roads and everything warm." If that's how she felt about a New York college town, she ain't seen nothing yet! What Anamika wrote about Chennai, India, applies equally to Tokyo, Hongkong, Paris, and Los Angeles. The cities and towns that I have seen, and been in, long enough, to know the difference.

What does human proximity do to your economic and political views? To what you believe the society and its representative government care or do about your life? Why are the densely populated industrial and coastal states blue, and the sparsely populated middle America red?

Five years among some of the staunchest neo-classical economists in UCLA (there is a reason why it is a.k.a. the University of Chicago at Los Angeles!) had exorcised the vestiges of Marx and Mao in me by 1989. In the process of my interaction with the likes of Armen Alchian, Eugene Fama, and Jack Hirshleifer, I learnt my lessons in economics and finance. Lessons that'd tell me to be wary of the bleeding heart and the foggy brain.

I was alerted to rational expectations and moral hazards, and why the lemons crowded out the better of the used cars because of adverse selection. I learnt why wealth must be produced before it could be distributed, fairly or unfairly. I read what John Nash wrote about how self-interest and incentives played out in the games of life and trade that we played with each other. Evolutionary game theorists like John Maynard Smith taught me how the study of animal conflicts could illuminate human conflicts as well. So on and so forth to the altars of Friedrich Hayek, Milton Friedman, and Richard Dawkins.

The Utah ranchers may not have heard of agency theory or selfish gene. The Nebraska farmers, neither. With little more than a telephone line and I-80 connecting them to the remote corridors of UCLA and the U.S. Capitol, routes that they rarely traversed, they must have learnt their lessons in the old-fashioned way.

They are not fooled easily by the empty promises made on the campaign trail every two, four, or six years. They have seen their tax dollars disappear into the black holes of war and welfare, time and again. They have learnt not to trust those who play poker with the OPEC sheiks, and those who send their children to exclusive private schools, while advocating public education for the rest of us. Over the centuries, they had learnt how to bootstrap themselves, with only a little help from their friends and neighbors. They know that any magic wand to wave their woes away, wielded by a far away meddling crowd in Washington D.C. and State Capitols, is as much of a myth as the Excalibur.

The Utah ranchers, and their Wyoming and Nebraska neighbors, have learnt their economics, not from the books of Adam Smith and Paul Samuelson, but from the books of rugged individualism and splendid isolation.

¹The title was inspired by the novel Far from the Madding Crowd by Thomas Hardy, 1874.
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