Often, there is a tendency to divide liberal thinkers into two categories: social or welfare liberals (e.g. Rawls, Mill) and market or classical liberals or libertarians (e.g. Hayek or Nozick). However, this distinction may be overemphasized and not as fundamental as it seems. In the end, they all support private property, free enterprise and many other liberties. The real question asks to what extent people should be free to pursue their goals and to what extent their actions should be limited by the state. For instance, while Mill supported a high tax on luxury goods and inheritance, he was for proportional income tax.

A more crucial distinction of liberal thinkers is whether they are pluralists or rationalists. Jacob Levy argues that this divide of liberalism is much older than the welfarist and market-orientated divide.
Pluralist liberalism is hostile toward central state authorities and supportive of local and voluntary communities and associations. Rationalist liberalism is supportive of state-centralized power to impose unified law, emphasizes equality before law, does not want to make exceptions for local communities nor weigh in their distinctions in implementing the law. It rests on the assumptions of progressive individuals and the universality of its doctrine.

A typical representative of pluralist liberalism is F.A. Hayek. Hayek talks of liberal society as a Great Society in which various other partial societies and groups exist.Each individual may be simultaneously a member of the Great Society and the groups within the Great Society. Government has a special position in the Great Society, bearing a function which “is somewhat like that of a maintenance squad of factory, its object is not to produce any particular services or products to be consumed by citizens but rather to see that the mechanism which regulates the production of those goods and services is kept in working order.” Hayek stresses that this function of government provides an essential condition for the preservation of that overall order. Hayek is critical of government’s efforts in trying to create laws that cover every particular situation and interest of every particular group within society.In many ways, Hayekian liberalism, with its emphasis on pluralism and the importance of localized dispersed knowledge that enables a price mechanism to work smoothly by giving proper signals to all actors, is closer to Burkian conservatism than to radical utilitarian liberalism of Mill and that of Bentham.

On the opposite side, the liberal views of John Stuart Mill are certainly rationalist. Mill’s hostility toward religion, purely religious education and tradition, and the tyranny that might exist within a family in regard to treatment of women clearly points in thisdirection. Mill brings out specific dangers that illiberal groups in society may pose by limiting the liberties of other individuals. Of course, tyranny of the majority in a liberal society can be protected by a constitution that gives equal rights to all citizens. However, maintaining the liberal framework, including these constitutional rights, requires political support. Mill’s approach in creating a coherent liberal society is to educate its citizens and encourage all individuals to become liberal. In this sense Mill offers a more proactive agenda than Hayek and other pluralists, because moderate social engineering helps to maintain the liberal society.

Mill´s rationalism and critique of illiberal ways of life are strongly founded in the concept of individuality. For Mill, free development of individuality is one of the essential elements of well-being. However, according to Mill, the difficulty of each individual developing personal individuality arises in the inability of the majority of people to recognize its importance. “The majority, being satisfied with the ways of mankind as they now are…, cannot comprehend why those ways should not be good enough for everybody…,” writes Mill.

Particularly, following customs and traditions made the realization of full potential of individuality impossible. From this perspective, there is a trade-off between having a society based on customs and traditions and a society thatallows full realization of individuality. Illiberal groups that impose their customs and traditions on society block the realization of individuality of other individuals. In the context of discussing limits of society’s authority over the individual, Mill gives the example of religious groups who could gain the majority in government and by doing so becoming a potential threat to the liberties of other individuals.

This is a fundamental question because a crucial element of liberal society based on individuality is the possibility of exercising choice. Illiberal groups who impose their views on the rest of society or practice their customs within their group limit an individual’s choice, thereby keeping individuals from developing their own individuality and, on aggregate, undermining the whole liberal society. “Human faculties of perception, judgment, discriminative feeling, mental activity, and even moral preference, are exercised only in making a choice. He who does anything because it is the custom makes no choice.” Hence, the Millian solution to the problem is to liberalize parts of society that do not follow liberal principles by using liberal state paternalism.

Rawls makes a distinction between comprehensive liberalism and political liberalism. He acknowledges that liberalism as a comprehensive doctrine favors individuality and autonomy over community and associations. He argues that his concept of political liberalism is neutral toward the aims of different comprehensive views in society. However, his view does not imply procedural neutrality, because the public policies of society are based on the framework of political liberalism. Rawlsian political liberalism has clear advantages over comprehensive liberalism, because “As a political conception it aims to be the focus of an overlapping consensus….It seeks common ground – or if one prefers, neutral ground – given the fact of pluralism.” Rawls points out that his concept allows those who would like to withdraw from modern life to do so as long as they honor the political arrangement of liberal society.

For example, he discusses the example of children’s education and the requirements imposed by the state. Comprehensive liberalism as followed by Mill will lead to a state requirement to teach values that foster autonomy and individuality. Rawlsian liberalism requires only that children know their political rights that allow them to “be fully cooperating members of society.”

John Gray argues that the Rawlsian contractarian framework of liberal society, which is “authentically individualist”, is closer to classical liberalism than the “moral collectivism of Mill’s utilitarianism.” Gray points out that the Rawlsian approach “despite its egalitarian orientation, had many links with classical concerns for the priority of individual liberty within a rule-governed constitutional order.” Hence, on this pluralists vs. rationalists divide in liberal doctrine, the Rawlsian approach is in many ways closer to the ideas of Hayek than those of Mill. Certainly, Rawlsian social contract is much more extensive than the Hayekian minimal government. But in essence, the degree of pluralism afforded by the Rawlsian approach is much higher than in the Millian approach. Rawls could be seen as a middle-way between hyper-pluralism and rationalism.

This blog post is a summary of my talk at the Mises Circle in Tallinn and is based on the term paper that I wrote for liberalism course at Harvard University in 2004, which is available here.

The Economist has published a piece on citizens lawmaking online which refers to my research on Estonia.

Citizen lawmaking
Government by (all) the people
Getting citizens to write laws is a nice idea. When it works
Oct 29th 2011 | TALLINN | from the print edition

RUSSIA may sound an unlikely place for a bold experiment in participatory democracy. But Wikivote, an online forum where citizens collaborate in redrafting laws, seems to be enjoying unlikely early success there.

The website displays a draft law and lets users propose rewrites of each paragraph; others can vote on the suggestions. In another section they can debate “thorny questions”. A reputation-rating system gives serious users’ votes more weight; invited experts get even more. The site’s first full-scale test came earlier this year, when protests erupted over a new fisheries bill that proposed charging Russians for their beloved pastime of fishing in public waterways. At the government’s behest, Wikivote posted the draft bill; it went through two redrafts with over 1,000 proposed modifications, according to Vasiliy Burov, one of the project’s creators. On the site now is a longer and trickier education bill.

Successful examples of legislation by the masses are rare. Most people don’t know how to write laws. Tim Bonnemann, the founder of Intellitics, an American firm specialising in public-participation tools, says a better method is to canvas views widely but use a small team to write a draft. The hard part is not the technology (a simple online discussion forum is adequate) but creating a fair and transparent process that assures people their voices have been heard.

Another problem is that even a public consultation, let alone public law-writing, takes a lot of time and money to do well, especially when large groups are involved. Tom Steinberg, the director of MySociety, a British e-democracy organisation, says most attempts in collaborative lawmaking, whether run by governments or do-gooders, are one-offs that never gather enough steam and public interest.

A third problem is that government websites of this sort are often clunky, and poor at drawing in the public debate that thrives elsewhere online. Professional lobbyists willing to plough through the process therefore often have a big advantage. America’s site for rewriting government rules, regulations.gov, displays the comments on a draft bill as a list of the commenters’ names. These may run into the hundreds and the visitor must click on each name separately to see what was said. That makes getting the overall picture dauntingly tedious. Even Estonia, a world leader in e-government, had lacklustre results when it launched osale.ee, a portal for public comments on bills, in 2007. In the first two years, according to a study by Meelis Kitsing of the University of Massachusetts in Amherst, the most comments any bill got was 27 (one-third got none). In contrast the Brazilian parliament’s cheerful and friendly e-Democracia site is often cited as a rare success story: it channels comments straight to the parliamentary agency that advises MPs.

Non-governmental sites, on the other hand, may be easier to use, but officials are wont to ignore them. Two students who founded a site called Lexpop earlier this year think they may have got around this problem: a Massachusetts state legislator, Tom Sannicandro, has agreed in advance to propose a bill on “net neutrality” that the site’s users will draft. (Drafting hasn’t yet begun, though, and some doubt that anything coherent will emerge).

The big difficulty for such projects in advanced democracies is that they have to break into lawmaking systems that often function tolerably well. Wikivote, by contrast, trades on the fact that some Russian ministries produce legislation so shoddy that it does not work. “The goal of the state is to get higher-quality laws,” Mr Burov says. “It’s not about being more democratic. So much of what’s idiotic in Russia happens not because somebody wants it that way, but because there’s nobody to prevent idiocy from happening.”

Source: http://www.economist.com/node/21534760

Policy & Internet has published my article which gives overview of e-government development in Estonia. My analysis incorporates both public sector initiatives and private sector developments which have contributed to the evolution of e-government. Private sector agents are seen as endogenous, not exogenous, in explaining e-government performance. Ultimately, the development of Internet banking by the private sector was fundamental in enabling the government to launch interactive online services. The findings reveal that the implementation of Estonian e-government is considerably more heterogeneous than previous studies have indicated. Basic service delivery and platforms for participation vary significantly across functional areas. Some ministries have provided innovative online services for the last ten years while others still struggle in making basic information available online. The availability of innovative platforms for online political participation has delivered remarkable outcomes in the last elections, while they have consistently failed to engage the public in the legislative process.

Here is a piece on the Estonian internet voting that I published in the Public Service Europe at on March 17, 2011

In the Estonian parliamentary elections in March this year, almost 25 per cent of voters submitted their ballots online. This indicates widespread adoption of internet voting since it became available in 2005, when less than two per cent of people voted online in municipal elections.

The popularity of internet voting has grown steadily through five elections that have taken place between 2005 and 2011. The parliamentary election in 2007 saw over five per cent of citizens used the method, while in the 2009 European Parliament and municipal elections around 15 per cent of votes were cast online.

On one hand, this has cut transaction costs and made voting easier because people don’t have to leave their home or office. On the other, it requires an Estonian ID card and ID card reader attached to the computer. As the Estonian ID card was launched less than a decade ago and its use diffused slowly in the early years, it is not surprising that over 60 per cent of all internet voters in 2005 and almost 40 per cent in 2007 were using their card online for the first time.

By the 2009 elections, the share of first time users had dropped below 20 per cent, while the relative share of internet voters tripled. The voting initiative can be characterized as a typical process where early adopters show the way and others follow. As the use of the ID card spread in Estonian society and other services became accessible, participation in internet voting also increased. In other words, the online ballot has benefited from network effects as the ID card system is used for a variety of public and private sector services – such as submitting taxes online, registering companies, making bank transactions and so on.

So online voting can be seen as transactional in nature. Fundamentally there is no difference between submitting a tax declaration and a vote on the web. But this does not mean that internet voting is neutral – there are certainly distributional effects. The current centre-right coalition received a higher share of internet votes than the populist centre-left opposition. Indeed, the main opposition Centre Party came second in the elections but fourth among online voters. This trend has existed since the launch of online voting but its importance has increased has more people use the technology. It is a demonstration of the digital divide as the poorer, older, less-educated and Russian-speaking population tend to support the Centre Party while Estonians, wealthier and better-educated groups tend to support centre-right parties.

There is no clear evidence about whether a significant percentage of internet voters would not have voted at all if this method was not available. In the 2009 municipal elections the increase in the percentage of internet voters correlated with increased turnout compared to 2005. However, the turnout in the 2011 parliamentary elections was only one percent higher than in 2007 in spite of the almost fivefold increase in the percentage of internet voters. Several scholars have studied the 2007 elections and found evidence that 10-14 per cent of internet voters would not have voted if this option had not been available. Other studies have found that internet voting did not contribute to the increased turnout. If the latter claim is correct, then the distributional impact is quite limited –voting was simply made easier for supporters of certain political parties.

The internet voting initiative may create the impression that Estonia is moving ahead of others its delivery of e-government. This is hardly true. This initiative has received a lot of attention but it reflects the different priorities that Estonia has in comparison with other countries. In general, the implementation of e-government remains quite heterogeneous in Estonia. There are some good initiatives and ‘islands of excellence’ but certainly a lot of areas are lagging behind.

According to the United Nations E-Government Index, Estonia is ranked among top 20 in the world. The World Economic Forum’s Network Readiness Index ranks Estonia 25th in the world. And the percentage of Estonian households and companies with broadband access is higher than the EU average – though not as high as in Finland, Sweden and the UK. All of these are good, but not fantastic, achievements. Most importantly, internet voting makes casting a ballot easier but it would be a fallacy to think that it improves the quality of democracy.

Source: http://www.publicserviceeurope.com/article/110/estonias-e-ballot-gains-popularity

The Economist’s Democracy in America blog discussed uncertainty last week as a central concept in the Keynesian economic thought. According to the blog entry “Are they all Keynesians again?” government economic policies can reduce uncertainty. This claim is a non-starter because the blogger as well as many modern economists engage in conceptual stretching when they use term uncertainty. They use uncertainty as if it would be synonymous with risk.

In reality, these are two different concepts. Risk is “known unknown’, which implies that we can assign probabilities to happening of future events and design economic policies accordingly. Uncertainty is “unknown unknown”, which implies that we simply do not know what might happen, we cannot assign odds to future events, we cannot calculate risk and design policies. If the current state of economy is characterized by uncertainty, it is impossible to see how government intervention can reduce uncertainty because we simply do not know what the future holds for us. In this sense, doing nothing and doing something may or may not equally reduce uncertainty.

The blogger is surprised that the concept of uncertainty is so popular with the right. It goes to the great lengths to demonstrate how this concept is central to the Keynesian thought while classical and new classical economists assume uncertainty away in their rationalistic general equilibrium models where agents make decisions with perfect information. At best, this is a caricature of the Western economic thought of the last two centuries.

Keynes was not alone in highlighting the importance of uncertainty (the concept which has been ignored by many of his followers who transformed his ideas into “hydraulic” macroeconomic models found in many contemporary textbooks). The blogger attacks the Chicago-based economists but ignores that Frank Knight, the founder of Chicago School of Economics, distinguished between uncertainty and risk. After all, Knight wrote a volume titled “Risk, Uncertainty and Profit”.

Furthermore, uncertainty has been a central concept of the Austrian School of Economics since the 19th century. This idea has been essential in questioning the government’s ability to direct the economy as well as the whole notion of macroeconomics. Hence, the proper question to ask would be “Are they all Austrians now?”

It’s a pity that Russia has not made much progress in the last decade. Seven years ago I published an article on Russia where I compared Putin’s reforms to building a Potemkin village. If published today, the article would still be an accurate description of Russia. At that time, my points seemed perhaps too harsh as Putin had served as the president for three years and Russia was in the middle of economic recovery. However, the recent special report on Russia by the Financial Times makes similar points.

Putin’s social contract for delivering increasing living standards in exchange for political passivity is no longer working. This outcome is not surprising given that the contract is based on something so volatile as the price of oil. No wonder that the Kremlin has decided to engage in the expansive interpretation of continental shelf and seeks opportunities for oil production in the Arctic.

Most importantly, citizens do not think that economy is improving and middle-class savings have been exhausted. Some experts argue that Russia looks more and more like the Soviet Union and point out similarities with the Brezhnev era. Sure, the GDP and real incomes doubled in the last decade. But this achievement had little to do with good governance and economic reforms. The growth relied on oil exports which created complacency and reluctance to carry out both economic and political reforms. Money from oil exports was used to buy political support and keep “semi-feudal” governance structures in place.

As the Financial Times points out “Kremlinology” is back in fashion as experts are looking for clues whether Putin or Medvedev will run for the president in 2012. Something as important as the choice of next president is characterized as a decision between two people. In this context, the description of governance process as a semi-feudal would be understatement. It is simply feudal.

The debt crisis suggests that not much has changed in Greece since the first performance of the Oresteia in Athens in 458 BC. Similarly to the Oresteia, there are no good choices available. Whatever path is chosen, politicians will be tormented by the Furies making it impossible to have a peace of mind. You will be damned if you do, damned if you don’t. Greece is cursed.

The choices are complex and difficult because it is not a temporary crisis of liquidity but that of solvency. Throughout the last decades Greece has not been able to raise sufficient government revenue to match its growing expenditure. The constant gap between expenditure and revenue was exacerbated by the financial crisis. As Dr. George Pagoulatos, Associate Professor of Politics at Department of International and European Economic Studies of Athens University of Economics and Business, pointed out in his presentation on March 24 at Harvard University: “This is crisis of our own doing.”

According to Dr. Pagoulatos, Greece lived through “the decade of complacency” after the euro entry in 2001. There was rapid credit extension because interest rates were lowered and it was cheaper to borrow. This concealed structural weaknesses of the economy. GDP growth relied on consumption which was fuelled by bank credit. Dr. Pagoulatos argued that this is really a crisis of Greek economic model.

The nature of crisis shows that Greece has operated like a huge socialist enterprise under what Hungarian economist Janos Kornai called “soft budget constraint”. The decision-makers have not had incentives to impose financial discipline because government was always able to issue more bonds with low interest rates in order to finance its debt. There seems to have been implicit assumption that if the situation turns worse, then assistance can be given by fellow eurozone governments. Dr. Pagoulatos pointed out that there is no rationality in budget process of many Greek government agencies. For example, public hospitals have accounting problems and do not submit balance sheets to government. Similar problems exist in local governments. The situation is made worse by wide-spread corruption.

The key to understanding the crisis and offering solutions is to figure out how to change incentive structure of and institutional constraints faced by Greek decision-makers. Dr. Pagoulatos argued that “Greece was not adequately monitored and sanctioned by the EU and the Greek government did not receive enough pressure from the EU.” This sounds like blaming murders in the House of Atreus as characterized by the Oresteia on the Trojan War. There might be indirect connection but this is not a cause of the tragedy.

Certainly, EU governments should have enlightened self-interest to assist Greece. Many of their financial institutions hold Greek government bonds. Greece is a small country but its crisis may have contagion effects on other EU countries. For instance, the Asian financial crisis in 1997 started in Thailand and spread from there to larger economies such as Indonesia and South Korea. However, at the same time EU governments must not create moral hazard and keep in mind that the whole Greek economy needs fundamental restructuring.

Most importantly, many macroeconomic analyses of the crisis ignore basic political economy. The root cause of the crisis stems from the nature of Greek interest groups. These groups are militant and narrow-minded demanding fulfillment of their pockets without any consideration of the consequences of their actions on overall economy. Greek politicians have found it easier to cave in. They have raised public sector wages, created more jobs in public sector and increased benefits. No wonder that government increased wages and pensions by 10.5 percent in 2009 – even if signs of the crisis were hard to ignore at that time.

It is hard to imagine that IMF and EU can impose conditionality, which would fundamentally alter this existing political economy equilibrium. Hence, the change has to come within Greece. The internal devaluation by cutting wages by 20 % or more could bring about “Creative Destruction” and get the Greek economy out of death spiral. The Oresteia is untypical tragedy because Athena intervenes and the play ends on a happy note. Why shouldn’t the Greek economic tragedy have a happy ending?

Is the Left taking over Germany? Is Germany becoming more isolationist? Is the country returning to the 18th Century provincialism? According to Jacob Heilbrunn’s article in the National Interest, the answer is affirmative to all these questions. However, I find this beautifully written characterization of modern-day Germany puzzling. This perspective seems to be suggesting that Germany is almost about to become another Italy – except with better mass market car production. Let me point out some points about the beauty of Germany capitalism.

Free market supporting Free Democrats gained seats in the 2009 parliamentary elections. Center-right Christian democrats did much better than their former coalition partner Social Democratic Party. The results of last elections show a strong support the center-right political agenda despite of the financial crisis. The success of the extreme left party Die Linke stems from the weakness of Social Democrats and populism of Die Linke’s leaders such as Oscar Lafontaine (who retired in January).

Opinion polls suggest that more Germans see capitalism as the best possible system than Americans, Brits, Australians, Canadians and of course, French, Italians and Spanish do. The Economist (February 13) issue shows that less than 10 % of Germans agree that capitalism is fatally flawed and a different economic system is needed. Roughly 13 % of Americans and 42 % of French agree with this statement.

The recent Economist survey suggests that Germany has become more Anglo-Saxon in its economic policy reforms. In this context, Rammstein’s song “Amerika ist Wunderbar” should be seen as a sincere statement – not sarcastic one. The government has reformed some elements social welfare system and it looks in much better shape than other continental European countries. Germany has been much more successful than the US and UK in implementing conservative fiscal policy and is a strong supporter at European Central Bank of sound monetary policies.

As far as isolationism is concerned, German politicians have sent troops to Balkans and Afghanistan despite of wide-spread pacifism at home. They may be reluctant to commit more troops (they are already third largest contributor) to Afghanistan and making more straightforward contribution by lifting the limits for engagement. Similarly, German politicians may be reluctant to bailout Greece but it is not clear why this reluctance to help other countries in the middle of debt-crisis has to be seen as a sign of isolationism. If we factor in historical, constitutional and political economy factors for the limited military engagement and the reluctance for bailout, then it is hardly a sign of German isolationism.

Most importantly, Germany is more engaged with the world through international trade than almost any other country. Even if the country is no longer the largest exporter in the world (the place was recently taken by China), it is the second largest exporter. Germany has managed to bring down real wages which has boosted the competiveness. As many small and medium sized firms are becoming more and more involved in international markets, it is difficult to argue that the country is moving towards greater isolationism.

The success of export-driven model has led to another type of criticism that Germany is not increasing its consumer spending and investments. Higher consumer spending and investments would increase demand in Germany for imports. This would allow Germany to export more as markets in its partner countries would expand. This criticism is offered from a particular macroeconomic perspective and it may have merit in the world of stylized economic models. As a matter of political economy, it is difficult to see how politicians could pull it off in the country that relies on the principles of fiscal conservatism and social equality. Lowering taxes requires cuts in government budget which would decrease social spending. Tax cuts without spending cuts would increase budget deficit.

All of this is not to say that Germany does not have any problems – certainly there are many such as rigid educational system, high unemployment in some regions and among some groups, too generous welfare state and so on. However, there is certainly more hope for Germany’s future than some commentators suggest. Fiat lux!

Conventional wisdom suggests that the Internet enhances democracy. Estonian as well as other policy-makers keep following this wisdom by making investments into public initiatives aiming at engaging citizens online. The proof seems to be in the pudding. In the last four elections people have been able to submit their vote online and percentage of voters using this opportunity has increased constantly in Estonia. There is even a correlation between increased participation and votes submitted online in the last municipal elections. But we should not fall for the fallacy of electoralism – tendency to focus on elections while ignoring other political realities. Elections are necessary but certainly not sufficient prerequisites of democracy. Hence, we should look a bigger picture how the Internet affects democracy.

Matthew Hindman’s recent book The Myth of Digital Democracy (Princeton University Press 2008) is great help for policy-makers in understanding the interactions between the Internet and democracy. I just published a review of his book in the Journal of Politics (Volume 72, Issue 1, January 2010). The following discussion is based on this review. Hindman provides comprehensive and methodologically vigorous research supported by extensive and detailed data. The data is based on the United States but should be relevant for policy-makers in other parts of the world as well. The findings are compelling enough to be taken seriously by researchers with diverse specializations as well as policy-makers with different persuasions, as Hindman covers a wide array: online campaigning, blogging, link structure, traffic and search and other issues are tackled in the book.

Without much theorizing on his part, the author lets the data speak for itself. He demonstrates that the Internet has not increased political mobilization and has not significantly broadened political discourse. These findings certainly challenge conventional wisdom on the democratizing power of the Internet. For instance, media reports tend to characterize online politics as being dominated by young people and used by politicians as a means to engage new generations. Hindman points out that while 43 percent of all World Wide Web traffic is generated by eighteen to thirty-four year olds, they only account for 32 percent of visits to news sites and 22 percent of visits to political sites.

The significance of his contribution comes out best in the discussion on link structure, traffic and search of political websites. Hindman establishes how so-called Googlearchy (referring to “the rule of the most heavily linked” web sites) shapes the role of political websites. This makes the link structure of the Internet a fundamental element in understanding online political activity. In collaboration with Kostas Tsioutsiouliklis and Judy Johnson, Hindman used computer science techniques to explore millions of political web pages and found that “a small set of hypersuccessful sites receives most of the links”. Substantial overlap between search results of leading search engines such as Yahoo and Google contributes to the winners-take-all patterns of online politics. This keeps public attention highly centralized. While search engines may provide opportunities for finding new sources of information, they also make it easier to visit known web sites. Most importantly, political websites are visited by an insignificant percentage of all web users: just slightly more than 0.1 percent of overall web traffic.

Extensive data in the book provides plenty of opportunities for expanding on some unexplored issues. For instance, Hindman points out some evidence for supporting the view that political websites are essentially online political echo chambers. This means that people with set ideological beliefs will visit certain websites in order to confirm their opinions rather than to seek out alternative explanations. However, the findings are not conclusive. Many political websites send or receive only trivial amount of traffic across ideological lines. Such political polarization is not the case for at least twelve of top 50 political sites, as a significant amount of traffic flows over to websites presenting competing viewpoints. Nevertheless, Hindman’s The Myth of Digital Democracy profoundly challenges the conventional wisdom about the democratizing effect of the Internet. Policy-makers should ignore this book at their own peril.

“Cui Bono” as defined by the eternally comprehensive Wikipedia:

“To whose benefit?”, literally “as a benefit to whom?” – is a Latin adage that is used either to suggest a hidden motive or to indicate that the party responsible for something may not be who it appears at first to be.

For the authors of this blog “cui bono?” is also a question that’s remarkably unavoidable when discussing the economic aspects of public policy or questions of political economy more generally. While we never pretend to have an answer to this humble two-word question we believe it’s a question worth asking more often than not and our sometimes specualtive answers are worth sharing with our readers.

The Cui Bono blog will be written mostly in Estonian with an occasional post in English for people outside Estonia who are interested in what classical liberal minded Estonians are writing about. Occasionally there will be posts in English that will provide an alternative point of view for questions that concern Estonia and Estonians for our non-Estonian followers.  There are three people – Paul, Meelis, Jüri – writing the blog and you can read more about them on the authors page.

There are already about 10 posts in Estonian as we officially launch the blog. Paul had the honor of the inaugural post with a short piece concerning the schizophrenic editorials of the Estonian leading business newspaper followed by a post, where Meelis points out the difficulties of predicting economic growth and the (un)reliability of forecasts.

Jüri touched on the absolute limits of economic growth, while Meelis looked at the history of economic growth and in a following post on the Nobel memorial prize winner Elinor Ostrom he discussed property rights as they pertain to her work.

In his second post Paul looked at the almost mythic aspects of deflation through an Austrian lens while Jüri offered up a post with an alternative vision of how to organize and finance health care.

In connection with municipal elections in Estonia Meelis had a post on how rational voters actually are that was inspired by public choice insights, which in turn was followed by a post from Jüri on stories and narratives and how they shape our understanding of such economic question as alternative cost.

Finally, Meelis asks, “what’s in a name” and goes on to discuss the confusion, history, and the seemingly tragic question of what geographic region should be called Macedonia.

All of the mentioned posts are in Estonian, but you’ll find in them quotes in English as well as links to external sites, articles or papers that are also in English.

We’ve also provided a special RSS feed for our English posts, which should make following Cui Bono blog a simple matter of adding us to your favorite RSS aggregator.