"In Defense of the Corporation"

In Defense of the Corporation

[NOTE: This piece was written in 2008 (I believe), discussing Robert Hessen's 1978 In Defense of the Corporation.]

There is a charming moment in Robert Hessen’s thin treatise, when he says, “The entity idea and its corollary—that a corporation cannot derive rights from its members—is false and should be discarded.” Hessen goes on to explain that any organization is only a collection of individuals, and therefore is only a useful construct. From this he derives one of his central tenets: “…when rights are imputed to a corporation, what we really are referring to are the individual rights of its members—the shareholders, directors, and officers.”

Charming, in an “if only it were true” sense. Skip the obvious rights of individuals that cannot, apparently, be transferred to a corporation: the right to vote, to bear arms, to be free of cruel and unusual punishment. There are also burdens on individuals that cannot be transferred to their corporate surrogates, most notably, of course, the inevitability of death within a (so far) inelastic period of time after the attainment of majority, say, 80 years. Following from that, of course, are all the evils to which men are subject: the need to eat, and breathe, and rest. Corporations experience none of these burdens, so it is perhaps more accurate to say that individuals, rather than transferring their own rights to corporations, seek to create privileges and indemnities, by creating corporations, that they do not themselves possess.

Hessen’s book was written at the end of the 1970s, when scholars at the Hoover Institution, its publisher, could perhaps be forgiven their worry concerning the onward march of Socialism (a Democrat was in the White House). The book’s intention is to defend the American corporation against the attacks of Ralph Nader, who in those days had mounted a spirited attack against corporate structure. It is instructive to read Hessen’s characterization of Nader’s arguments, if only to see how distant some of Nader’s prescriptions now appear. Nader’s notion (as described by Hessen) that the solution to the evil excesses of corporate America is federal chartering seems today not only questionable. It seems hopelessly naïve to believe that the federal government can be a force for restraint against rampant capitalism, in an age when taxation itself is viewed by a substantial portion of the electorate as unpatriotic, and the notion of graduated tax rates as “socialism.”

So Hessen’s book is, largely, a curiosity. He does have some interesting things to say, however irrelevant to our current problems they may be. His book breaks down roughly into two partially overlapping sections. He begins with an explication of the origins of corporations, with a grade-school sort of step-by-step (“Now imagine that the original group of general partners is growing old …”) description of how inevitable is the progress from sole proprietor to international corporate behemoth.

In his first four chapters Hessen is at some pains to explain how medieval guilds and boroughs and the like are not the legal or logical precursors to the modern corporation. This presentation is interesting because of its reminder that, in Western society, all rights, no matter to whom belonging, were at one point considered to derive solely from the dispensation of an absolute monarch. But the right of individuals to contract with one another for private purposes, rather than any state-granted status, is the source of corporate existence.

The last half, roughly, of Hessen’s book addresses the questions of corporate democracy, shareholder rights, and state statutes relating to corporate governance. It is here that he parries the Nader attack; and he does so rather easily, both by citing some apparent procedural errors in different versions of Nader’s Taming the Giant Corporation and by examining some of Nader’s substantive claims and proposed remedies. The former approach would seem to have been hardly necessary, except that it is testimony, read now in Nader’s dotage, to the respect he once enjoyed: showing that the great man was capable of slipshod work was deemed important to an academic such as Hessen in attacking Nader’s arguments.

And what arguments they are! According to Hessen, Nader advocates a series of complex devices aimed at ensuring, for example, that all shareholders vote on virtually all significant operating decisions of a corporation. This, of course, is a non-starter; were it to be somehow enacted it would simply end corporate activity as we experience it today; and Hessen’s presentation leads one to the suspicion that Nader, if he is being represented accurately, simply wanted to force the dissolution of these large organizations.

Indeed, in his chapter “Dismantling Big Business,” Hessen presents Nader’s arguments that size itself, in business, is evidence of malfeasance, or at least, ill intent. Size offends the competitive spirit; it leads to foreclosing consumer choice; it produces unused industrial capacity and resulting unemployment and suppression of wages; it allows companies to manipulate consumer demand. Hessen counters most of these assertions with common-sense defenses, but his most effective answer to Nader is this: assuming you are correct, why is your proposed solution an improvement?

It is a difficult question. The truth is, American corporations have indeed produced great societal benefits, as well as important ills. But the interest of this subject, not to say Hessen’s text, is provided by the environment in which we find ourselves. It used to be possible to say that there was a feeling of resentment, in some quarters, against the real or imagined depredations of large corporations against the average consumer. In 2008, it is possible to sense the rage of, perhaps, a majority of Americans against the greed of what has begun to be seen as a plutocracy. The government, moreover, is seen as the source of a solution only by a minority of people, and often, by them, only reluctantly. Hessen, in this book, has nothing to say about this; he is defending the picnic against the ants: “…we are told that the evil of capitalism is prosperity and that giant corporations must be destroyed because they depend on and are committed to economic growth…”

We face a different scene today. Dissatisfaction with American business, as well as government, has seldom been greater. Government and business are seen as having gone, hand-in-hand, into enterprises aimed at creating a privileged class. Business writes the rules by which it consents to be governed, and government, through collusion or bribery, consents; the will, and the interest, of the people is everywhere given lip service, and nowhere respected.

We are at war with ourselves, as in the cell-phone commercial where the corner-office executive mutters with satisfaction, “it’s my way of stickin’ it to The Man.” When the office boy reminds him that he is The Man, he muses, “…maybe.” No one really believes, however, that this man waits interminably on hold for customer service, or fills out infuriating forms and cuts off product-code labels to get his fifty-dollar mail-in rebate, or takes off his belt and shoes for the edification of a three-hundred pound mouth-breather with a government emblem on the pocket of his straining white shirt in the line at the airport. Government and business, by moving closer towards one another in the regulation of the citizen and the consumer, have managed to become conflated in the minds of many.

This has not worked to the advantage of business. Pharmaceutical and insurance giants are seen as the new malefactors of the economy, now joined by “Wall Street” and the financial services industry generally. The question that Hessen, were he writing now, would ask is, “What has gone wrong with the American corporation?” It cannot do what it was not designed to do, of course: improve the culture, create general prosperity, right our social or political wrongs. But is it making these problems worse, through its pursuit of profits, heedless of external costs it may be imposing? Is unfettered capitalism a reasonable way to organize one of the pillars of any society, its economy? And, in the end, what, if anything, should be the role of government in business?

Hessen’s ultimate argument is that, as the rights of corporations are simply the rights of individuals, any attempt to restrain corporations is an attack on individual liberty. It is tempting to say that he would be unlikely to have a helpful prescription for what ails us. Certainly American business, which has always been characterized by pragmatism and practicality, does not today show itself eager for reform; adjustments are necessary, to deal, for example, with what critics call socializing losses while leaving profits strictly private. But there is no groundswell, among its defenders, of sentiment that American business has gone too far. Indeed, blame for the financial crisis is generally directed at a few imprudent egomaniacs in sensitive positions, and an army of irresponsible individuals who had the temerity to think that they should be deserving of the temptations that were being waved under their noses.

Other examples exist, however. European capitalism, which has had all the sharp corners knocked off by 140 years of state welfare policies, has nevertheless been able to produce some of the benefits of modern corporate achievement. European society, many observers agree, has produced a better way of life for the average citizen than has American society. Infant mortality in America, to cite one statistic, is behind that of most of Europe, including Greece and Portugal, as well as Cuba and some Asian countries. Clearly, if huge corporate enterprise is necessary for societal well-being, it is certainly not sufficient. Could the missing element be government-applied restraint?

To go back to Hessen’s argument, he spends most of his time showing that, because interactions between corporations and third parties are invariably voluntary, no one should be harmed by the corporation’s existence, at least, not repeatedly (George Bush: “Fool me twice … you can’t be fooled again”), because consumers, like shareholders, have choices. And it is certainly true that if you don’t like Cellular One, you can try Verizon.

But in a sense, the attack against Nader is against a straw man. To say that nationalizing all significant corporate activity won’t solve any problems is not to say that there aren't problems. And it would seem that modern American business has succeeded reasonably well (with government nudges) in preserving competition, in encouraging innovation, and in producing a steadily increasing Gross Domestic Product, not to mention its first purpose, which is to make profits for its owners. The issues are elsewhere. Here are a couple of them.

First, there is the issue of Hobbesian or Darwinian struggle. If life, like Donald Rumsfeld, is nasty, brutish, and short, should there be, in an advanced society, no mitigation of the worst life has to offer in a state of nature? There is a tension between allowing failure, it would seem, and protecting individuals against the worst consequences of failure. The most unreconstructed laissez faire capitalist would presumably rather not see people starving in the streets of American business districts. In this century, I mean.

No one, presumably, would argue that the secretaries at WorldCom or Lehman Brothers got what they deserved. Hessen’s assertion that a corporation is just a collection of individuals notwithstanding, it seems a signal characteristic of American business that, while the profits go disproportionately to the executives (much more than to the owners, by the way), when ruin comes it is the employees least able to recover who suffer the most.  This is particularly true during a wholesale collapse like the one we seem to be witnessing now.

Corporations, like all of us, enjoy enormous benefits provided by government and the society at large, some of which they help pay for: streets and sewers; a more or less peaceful society governed by a generally accepted social contract; reliable enforcement of commercial contracts; predictability, within a wide margin, when it comes to economic, social, political, and legal norms. It was, for most of the 20^th century, more or less accepted that some minimum of social welfare system is a reasonable price to pay for those benefits; that some minimum redistributive efforts are appropriate to promote social stability in an environment that encourages rapid and drastic economic adjustments. The question always in play is, what minimum, at what price?

Second, it is also true that consumers have choices, sort of. But, just as the nature of competition is to encourage innovation in order to satisfy perceived needs of consumers, competition allows, sometimes, for the degradation of standards or, at least, their suppression. To put it another way: if my competitor is not doing something, then doing it may help me at the margin; but not doing it will also, at the margin, not hurt me. If no one has live human beings answering the phone, no one is at a competitive disadvantage who follows suit. If no provider of cell phone service, or manufacturer of personal digital assistants, standardizes the charger interface, then no one else must do so to remain competitive, with the result that every upgrade or model change requires a new plug-in device that costs an extra $20. Those of us who remember the introduction of cable television can recall the promise that, because we would be paying for the programs, there would be no commercials, as, once upon a time, there were none in movie theaters.

These trivial examples point to one way in which the drive for profits overrides considerations of efficiency and the avoidance of waste, and results in consumer dissatisfaction. To say that the consumer has a choice, in other words, is the type of truth that can obscure a larger, countervailing truth. We can all still get a hamburger the way we like it; but does anyone believe this would be true if McDonald’s and Burger King (having it my way notwithstanding) could create barriers to entry on the scale of those enjoyed by Toyota and Ford?

The point is, while some products naturally require commercial enterprises of large scope to produce, that very fact encourages some (and only some) behaviors that are not in the interest of the society at large. The anticompetitive practices of the commercial dairy industry in attempting to suppress certain organic milk producers is another example of the corporate use of economic power to deny consumer choice. In other words, the invisible hand does not everywhere function optimally.

Corporations are both the heroes and the villains of the piece. The challenge is to take advantage of their strengths while hampering their ability to do harm by the over-enthusiastic exploitation of those strengths. Recognizing that corporations (and limited partnerships, etc.) possess advantages that individuals do not serves only to highlight the need for serious consideration of public policy initiatives.

This is not an argument for a command economy; but it does point out that “free-market capitalism,” in the phrase of the immortal Larry “I’m for keeping America strong!” Kudlow, is not without its shortcomings. Hessen’s Defense is successful in countering Nader’s arguments; but as those arguments were never a threat to American capitalism, his effort might have been better spent in identifying and addressing the societal dislocations that corporations and their milieu help exacerbate. It is only prudent, when evaluating any construct, to assess both its strengths and its weaknesses. Hessen, at most, gets us halfway there.

A Response to Ross Douthat

Dear Mr Douthat:

Your column today focuses on the ‘betrayal” of President Obama, and you cite the departure of his (expected) action on immigration from “precedent or proportion or political normality.” You acknowledge the “precedent” of President Bush’s signing statements, which were methods of simultaneously making law while asserting his unwillingness to enforce the same law. You might have added the “non-precedential” ruling of the Supreme Court in Bush v. Gore, in which one branch of the government overrode both precedent and the Constitution, not for some putatively greater good, but explicitly to benefit one party and one individual.

How about the “proportion” involved where one house of Congress votes over 50 times to repeal a law that the same house passed less than 5 years earlier? Or, to take that example, the “proportion” involved in one party refusing to engage at all in crafting a piece of legislation that both candidates in the then-recent presidential election had espoused and made a centerpiece of the campaign, because that party’s guy lost? That refusal to participate is then compounded by incessant attempts to sabotage the same law.

“Political normality?” Are you referring to the political climate in which several Republican senators, including the majority leader, voted against the bill they had sponsored, after hearing the President say that he thought it was a good idea? Or perhaps the “political normality” of the majority leader announcing that his primary objective for the new Congress would be to make sure that the President serves only one term?

Well, surely, having captured the Senate earlier this month, Mr. McConnell will make his first order of business the restoration of the previous Senate rules concerning the filibuster –anti-democratic in the extreme, by the way—that the treacherous Democrats had done away with? Well, not exactly: overturning Obamacare appears to be the first, futile matter for business in the Senate.

The Right warns Obama that any action he takes on immigration will “poison the well” for any subsequent “politically normal” compromise legislation. That is, the threat is that, having failed to negotiate with the President on virtually anything for the past 5 years, the Republicans really mean it, this time.

The popular will was enunciated in this election; sure. Fifty-one percent of thirty-six percent of the voting public, after years of actions aimed by the Republicans at depriving people of the right to vote, expressed the overwhelming popular will. How about the popular will on gun control? Environmental regulation? I could go on, but never mind.

The “political normality” you long for is one in which it has become an article of faith for members of one party to refer to a Democratic congressman as a “Democrat” congressman, a coinage developed specifically as an attempt to belittle by Bob Dole, who is what passes for an elder statesman in the Republican Party. You should acknowledge that, for much of the Right, any Democratic President –heck, any Democrat at all-- is, essentially (and, in the case of some celebrated Right spokespersons, explicitly) a traitor. If the Democrat is also black … well, that speaks for itself.

You invite the President to avoid the immigration “power grab,” ignoring the fact that, no matter what this President does, he will be vilified for having done it, or for not having done it; and this demonization will include simple lying –about him personally (his origins, religion, and the notion that he “hates America,” all endorsed implicitly and in some cases explicitly by members of Congress), or his policies (he’s a socialist who refused to nationalize the banks when a lot of non-socialists were recommending it), or his actions (he bailed out the banks, although this took place during the Bush Administration) as well as dire threats and hollow predictions. Faced with the unrelenting hostility of the Republican Party, why should he care about some additional, theoretical “disgrace?” 

Read what the Europeans are saying: Obama is popular, but America is exceptional –exceptionally dysfunctional, with corrupt politics--, and so cannot be relied upon to do even what is in its own interests.

The democracy is poisoned, all right. It is poisoned by animus, by money, and by the rage of those whose way of life seems threatened. But most of all it is poisoned by the attitudes of those in power, whose goal is not the betterment of the country, but the possession of the power itself. You are right about the “will to power.” The only question is, power to be used for whose benefit? In this regard, I think the score is 99 to 1, and the Republican “1” is the 1 percent.

Black Peter and Chief Thunderthud

When I was a boy, in the early years of national television, my favorite shows were "The Howdy Doody Show" and "The Lone Ranger." Howdy Doody was a marionette with an eclectic group of friends, among whom were a serious-acting Indian --uh, Native American-- known as Chief Thunderthud. Also, there was an Indian princess, Princess Summerfall Winterspring. The Lone Ranger, of course, had his "faithful" Indian companion, Tonto.

These were the conventions of my childhood: the Indians were faintly ridiculous, as Chief Thunderthud's name was meant to suggest, or exotic go-fers, like Tonto ("There's some medicine in my saddlebag Tonto --get it"). There were no Negroes, of course: they were beneath notice, even for comic relief, at least until Jack Benny came along with his --valet?-- Rochester. The joke among fifth graders one year had the Indian asserting superiority over the Negro because, "Nobody ever played cowboys and niggers." Funny, huh?

There were other ridiculous characters, of course, who were ordinary white people: Jingles P. Jones, played by Andy Divine as the high-pitched, warbly-voiced (Divine had been gassed in the trenches of WWI), faintly incompetent sidekick and comic foil of the earnest, straight-shooting Wild Bill Hickock. But the Indians were the ones who were invariably not to be taken seriously. When they were not villains, they were sort of silly.

That was racist, of course; and yet some of those old stereotypes are intrinsic to some of my fondest memories of childhood. We've pretty much discarded those old images, haven't we? Certainly, we don't take them seriously; they were the furniture of our innocence, perhaps, but we do not cherish them.

Nowadays, the Washington Redskins and certain other professional sports teams face mounting criticism of their nicknames and their mascots; and some of those teams, professional sports being what it is, look likely to hang on for a while to their monikers which are derided as outdated by non-partisans. An early casualty of what is derided as "political correctness" was the nickname of the Pekin, Illinois high school football team: they were the Chinks.

And this month, in the Netherlands, a blackfaced, red-lipsticked, Afro-haired critter known as Black Peter is getting lots of attention from those who find his character insulting to the growing diversity of that country. As in other such cases, fans of Black Peter have rushed to the defense of this helper (one anti-Peter commentator said, "slave") of Santa. Black Peter is a fond childhood memory, his defenders say. Some of them threaten violence against those who call the figure a racist relic. "He makes the little children happy," one journalist in Rotterdam said on NPR tonight, "he hands out candies."

Now, little children could as easily be made happy by a Blue Peter; they have no memories to overwrite. But the Black Peter stalwarts accuse those who object to him of racism themselves, which is a bit hard to fathom. They say that Black Peter is a cultural emblem, and they are threatened by what they perceive as the steady erosion of their "culture" by outsiders. I wonder if the original inhabitants of New Amsterdam may have felt the same way. The Dutch did a pretty good job of eliminating the culture of the natives of Manhattan Island.

I believe that, no matter how innocently intended, such unconscious racial and cultural stereotypes have to go. Sure, you didn't personally mean anything against black people when you laughed with joy at the appearance of Black Peter; how could you? You were six years old. But unconscious racism is still racism, in that it is a cultural milieu, affecting the dominant and the subservient alike, and poisoning any possibility of honest accommodation between them. As to the threats against a cultural symbol, I recall no outcry in Cincinnati when, in 1954, the baseball team that had been known as the "Reds" for fifty years suddenly became the "Redlegs" for a few seasons. The old name was just too uncomfortable in its association with the targets of Senator McCarthy; the "culture" adapted readily enough to permit the new name to appear on baseball cards and news stories.

So, thanks, Tonto, for all those enjoyable half-hours, when I didn't know any better. I will always remember you. But, Johnny Depp notwithstanding, you are properly relegated to history, a victim and a beneficiary of the gradual progress of humanity, which moves, ever to slowly, in the direction of recognizing your own.

And the Dutch will just have to adjust.

Hobby-ism

I must be missing something obvious, here.

The Supremes have granted certiorari to the Hobby Lobby case, in which the owners of that corporation, devout Christians who believe that the government should leave them alone so that they can patrol the bedrooms of their employees, insist that a requirement of Obamacare would force them to act in a fashion that is inimical to their free exercise of religion.

The Hobby Lobbyists are opposed to contraception , on religious grounds. Obamacare (aka the ACA) requires that insurance policies cover contraception. Thus, a federal mandate contravenes the religious conviction of the Green family, which owns the company, and so of the company itself.

First, a few riffs:

• Could the Hobby Lobby convert to, say, Islam? I mean, is it possible?
• Has the Hobby Lobby been baptised? If not, is it destined to burn in Hell?
• How does David Green, paterfamilias of the Green clan (which includes his wife and their three         --hmmmm-- children), know what the religion of the company is?
• In what fashion does the company, as opposed to Mr. Green himself, exercise its religion? I mean, other than by denying a valuable benefit to those whom it employs?

As to this last question, the company's stores are closed on Sundays. It's not Sunday, so I can't try to buy something on the website; but I bet I could do so. The company won't let its website observe the Sabbath, even though it does so itself?

Arguments that have surfaced, so far, deal with the Establishment Clause, with the distinction between speech and religious observance, with the lack of precedent --although the ACA itself unhelpfully exempts religious organizations and companies with fewer than 50 employees, among others, from the contraception mandate.

But I see (or, I think I see) another issue entirely. The fact that I don't find it anywhere being advanced makes me think I've missed a critical point. But here it is:

If the Hobby Lobby can be exempted from observing a law because of its religious convictions, can an Amish Hobby Lobby be exempted from withholding and paying Social Security Tax? (I guess my riff about converting to Islam wasn't such a silly lark, after all.) I mean, independent contractors who are Amish are so exempted; what's the distinction? Size? Does size really matter (sorry; just had to say that)?

We could conjure up even crazier cases. My religion requires that I sacrifice my first-born when he reaches age nine. I've been careful to raise him in isolation, promising him 47 virgins as a prize, etc, so that he is entirely willing to be sacrificed. Can I do it? 

My religion proscribes the education of women, and mandates that they be beaten daily, and that my daughters be married to octogenarians once they reach the age of six. All Okay?

I am a pacifist, and my company is a Quaker. Can my company refuse to pay half its income tax, because that portion of the federal budget is used for the Department of Defense?

I thought these are well-settled issues. I thought that, just because I live in Wyoming, I cannot legally avoid supporting the Coast Guard, which I don't need. But I hear daily someone complain that he shouldn't have to buy an insurance policy that includes coverage (maternity care, etc) that he can't possibly use. Well, I have no use for the NSA; and Texas Governor Rick Perry has no use for the Deparetment of Commerce, and the Department of Education, and ... what was that other one? Oops! So can he just refuse to let his taxes be used to support those functions?

All these arguments for exception are of a piece: I am not responsible for anything other than my own requirements, and those of whoever I choose to support. There's no such thing as societal, or community, responsibility or interdependence. those who say otherwise are socialists. And I shouldn't have to pay to maintain anything to which I am opposed.

Well, so be it. But what the Hobby Lobbys of the world, and their numerous offshoots and avatars, are really saying is that they believe in liberty only for themselves. Worse, they are willing to step on someone else's rights, and deny to the needy what they could easily provide them, in order to sustain their own privilege, their own conceit. These people do not participate in the American social and political covenant, except when they are forced to do so. The rules, they believe, are not for them.

"Thought" Leaders

Maybe it means that someone thought this person was a leader:

... monetary authorities' chatter about a "little inflation" guarantees that younger Americans will have to pay 1980s-level interest rates on their first homes."

So from Amity Shlaes in Forbes (10/7/13), surely the silliest and least substantive "business" publication in wide circulation. Ms. Shlaes wants "hard money" --paradoxically, so that interest rates can rise. In this, she is in the company of the rentier class, those who believe that, having amassed significant wealth, they should now be paid for having it. Note that the above quote, like pretty much all of what Ms. Shlaes says, is unaccompanied by an argument --it's just an assertion.

There are two things about this column that strike me: First, that Shlaes is worried about inflation; and second, that she is offended that a consensus is emerging in favor of "easier money no matter what direction interest rates take or what history's record suggests we do".

As for inflation; those with whom Shlaes agrees have been warning about hyper-inflation for 5 years. How long must we wait for this dire prediction to come true? Her concern for "history's record" is odd, given her resolute unwillingness to ignore the history of the past half-decade (or, in Japan, the past 2 decades). In much of the developed world, deflation is a greater worry than inflation.

And second, one of the reasons, of course, that a consensus is emerging (to the extent that this is the case) is that the many of those in the Shlaes cohort have slowly recognized that stimulus, including the Fed's Quantitative Easing policy, has not produced inflation.

As for the "1980s-level interest rates" she thinks is facing the next generation, she forgets that few of them appear to be inclined, or able, to purchase a first home. You have to be employed in order to do that.

 

Outrage Hits New Heights!

The Republicans made some tentative moves to reach an accommodation with the Democrats and President Obama today. At day's end, they announced an "encouraging" meeting with the President.

Perhaps the government shutdown, and the prospect of a default, will soon be resolved.

Of course, the fierce fighters of the Right aren't going to give up unconditionally; they're tough, dedicated, take-no-prisoners guys. There will be a hard price for Obama to pay. The Repubs have focused on the one issue that is, above all, raising howls of outrage from the American People, and they won't agree to anything until it is addressed.

They're still working on the slogan. Something along the lines of "Fifty-Four Forty or Fight!"

But no matter what, they demand, absolutely demand, alongside the millions who are marching in the streets, an end to the universally hated 2% tax on medical devices.

The Root of the Problem

Paul Krugman, in yesterday's column, points to the basic problem with the Republican Party: it's the Dunning-Kruger effect, which describes the relationship between incompetence and self-confidence. We've all experienced it: the guy at the next table, or on the bus, who loudly proclaims how something works, or what something means, when we know with certainty that he is far off base. Usually, it's someone, a "lay" person, who is spouting off about, say, a key aspect of our own professional life. 

I have gotten this from an employee who, hearing that the top marginal tax rate is about to increase, demands that his salary be held at one dollar below the threshold at which the top rate begins to apply. He'll show 'em! Of course, he's making the mistake of assuming that the top rate applies to all the earnings of a person who hits that threshold; either he doesn't know that we have a graduated income tax, or he doesn't know what that means.

In the Dunning-Kruger Effect, the less a person knows, the more he is likely to overestimate his own competence or sophistication. In contrast, the more someone knows, the more he is likely to be uncertain. It's why some very smart people appear unable to give simple, straightforward answers to questions about which they are highly knowledgeable: they are too aware of nuances.

The Republicans, and especially the Tea Party, have seriously emphasized doctrinal rigidity. No surprise, their candidates tend to toe the line on issues. When that happens, someone who thinks deeply is at a disadvantage against someone who does not: the latter guy can confidently and boldly assert the truth. And the "truth" is by definition not nuanced at all: it's obvious, there for anyone to see.

So Republicans elect more and more "true believers" who do not admit to doubt or complexity. And governing the country involves hugely complex matters involving a lot of uncertainty. Their solution? Find someone who can be labeled an "expert, and who says that which you want to hear. There is then no need to delve deeply into any issue. And, by the way, the average person is often attracted to bold assertions of opinion (especially when labeled "fact") from political leaders, because it gives them comfort: these guys must know what they're talking about. This completes the circle, if you will, of incompetence.

Now, if we have the Truth, the other guys must be wrong; and, if they're evidently smart, they must also be devious because they know what they're saying is wrong. It's a short step from that to the notion that they are liars who Hate America. If they are also very different from Us --they are dark-skinned, or have odd names--, well, QED: of course they hate America: they're not even American.

So we come to the notion that the debt default won't really be a problem, because we'll still have enough revenue to pay the basic bills. After all, most of what the government spends is wasted, right? So we'll just get Paul Ryan's budget cuts, all at once. Next stop: prosperity!

So do not expect that the Republicans will limply give in, when confronted with the Disaster: they are cognitively incapable of appreciating that it could possibly be a disaster.