Dead To Rights

I’d say Frank Rich has these guys pegged pretty accurately.

Free Markets and Glibertarianism

I don’t think anyone wants this blog to turn into a wonkfest, but I would like to defend two Balloon Juice catchphrases, one of which some (* cough *) think is an indicator of epistemic closure.

The first is “Free Markets Solve Everything”. I think ED is spot-on with this analysis of the role of redistribution in free market economies, and I also think John is right about the callous nature of some advocates of the free market. But my main gripe about the term “free market” is that it has become an overused, shorthand term, devoid of any real meaning, used mainly to justify corporate rights over individual liberty.

So, for example, a discussion of net neutrality or Internet pricing, which is at its heart a discussion of the regulation of public utilities operating as (at best) part of an oligopoly, gets sidetracked by discussions of “the free market” of Internet services. This is a classic category error — if the ISP market is a “free market’, then I don’t know what “free market” means. ISPs string their wires on or under private and public property that is allocated to them by the government, there aren’t enough ISPs to provide actual competition, and the facts about the service provided are hidden from the purchaser. This is a hell of a lot different from the market for, say, shoes, where purchasers can choose a clearly defined product produced by a variety of companies who don’t owe their very existence to an act of government. Treating the purchase of a service provided by a public utility as if it were a trip to the shoe store is the kind of sloppy reasoning that gets a “Free Markets Solve Everything” tag.

Sloppiness about “free markets” is often accompanied by blinders about threats to those markets. The free market defenders who are often tagged “Glibertarians” here are those who think that the only threat to free markets is excessive (or any) government regulation. My view is that the opposite is often the case — the biggest threat to free markets is regulatory capture by corporations who seek to rig the market to serve the interests of big incumbent players. When I call someone a “glibertarian”, it’s mainly because they’ve used free market rhetoric where it doesn’t belong, or because they don’t understand the necessary role of independent regulators in the maintenance of a free market.

Ron Paul may have many failings, but he at least acknowledges that corporatism exists. McMegan and the Reasonoids seem to have forgotten that, if they ever knew it in the first place. For them, the perjorative “glibertarian” is richly deserved. While I agree that it’s probably tossed around a little too freely, it is firmly rooted in a legitimate critique of some widely-accepted stupidities about the role of government in markets.

About That Free Market

Something I’ve been tossing around the last couple of days while not ranting or stressing is that it has occurred to me there are differing conceptions of the free market. To me, when I say the free market, I think of people being able to freely and openly share their wares, to purchase what they want and need, and with some degree of happiness on both the buyer and seller’s end.

It seems to me, though, that the folks who most discuss the free market and are the biggest free market advocates just don’t see things that way. They sort of view things much like the “pain caucus,” who seem to be unable of thinking a policy is acceptable unless a majority of the nation eats shit in the name of patriotism and fiscal responsibility. Instead of viewing the “free market” as I have described it, their vision of the free market is an economy in which those with power are able to freely fuck over everyone else. The free market needs energy, so those of you living in towns with your water polluted by mine runoff can fuck off and die, because any government intervention messes up the “free market.” The market demands oil, so Allah forbid we get in the way of oil spills that might ruin the Gulf forever- witness the freakout over a mild cessation in deep sea drilling by “free market” advocates. The free market advocates that there be Randian geniuses who vacation at the Hamptons after fleecing people who tried to do the right thing investing.

In short, it has become obvious to me (belatedly), that when a lot of free market advocates talk about the free market, what they mean is the right to fuck people over with no recourse. Hey- you should have invested better! Hey- you should have known those Iowa eggs were shit! It seems as if in their minds (and I’m thinking of total shitheads like Welch, Gillespie, and McMegan), there simply can not be a free market unless someone is getting screwed, which is completely contrary to my understanding of the “free market.” In my understanding of the free market, things are a win/win scenario, not a tilted table with a win/lose situation where the winner is predetermined by influence and power and connections and societal standing.

It’s just crazy and a really warped way of thinking, and it turns everything on its head. Maybe this is why there is such a resurgence in buy local- you deal with your producers, and know what you are getting. I dunno.

Like I said, just babbling.

Matt, you’re glib

While I very much enjoyed ED’s two posts on regulation and health cartelization, I find the anti-barber-licensing Matt Yglesias posts that inspired them extremely annoying. Yes, part of this is that dozens of commenters, both here and there, point out good reasons why barbers should be licensed. But, more than that, I find this type of libertarian rhetoric annoying: start with a serious issue — in this case, the often exorbitant cost caused by unnecessary regulation and barriers to entry in certain professions — and reduce to a smart-ass thought experiment about a profession you don’t take seriously. Some of the rules about licensing barbers are undoubtedly silly, but if these rules are such a serious barrier to entry, then why isn’t there a shortage of barbers and why is it possible to get a cheap hair cut?

There’s no question that the cartelization of medicine helps drive high medical costs. But the barriers to entry there are immense — years of one’s life and hundreds of thousands of dollars. This is entirely different than nuisance requirement about straight edge proficiency, which likely requires at most a few days of practice. It’s not as much fun to talk about doctors, though, because they are Serious People while barbers are not.

Maybe I’m blind to the charms of replacing complex issues with simplistic, humorous examples: I’ve never understood why Robert Nozick’s Wilt Chamberlain example was so brilliant, either (by the way, for an amusing, if probably misinformed, discussion of this topic, see these pieces on the Daily Howler). A philosopher friend of mine tells me that it is partly because it seemed cool for a Harvard don to talk about a black basketball player — while it’s grossly unfair to compare an eminent late philosopher to a Reason staffer, I’ve always thought that Nick Gillespie dresses like an extra from Cruising to achieve a similar effect.

What I dislike most about clever glibertarian thought experiments/examples is that, while they seek to clarify, they too often evade and oversimplify. You start with a wrong-headed discussion of barbers licensing, and pretty soon you’re making order of magnitude economic errors.

Three good reads

Three good reads, two slightly wonkish, that I don’t know how to make into full posts, but thought I’d summarize briefly with links.

1. Apropos of Kain’s post on passenger rail, the Economist has a piece on American freight rail, which is among the cheapest and most used (in terms of share of the freight market) in the world. Some of the roots of American freight rails’ success lie in the deregulatory Staggers Act of 2008 1980. According to this article, the freight rails are worried about increases in passenger rail service, since freight and passenger often share the same lines (though they won’t with any of the new very high-speed services). Some of the piece sounds a bit like anti-regulatory propaganda for the freight rail industry, but still interesting.

2. Crooked Timber has a great piece about differences between American and European economies. In recent history, the US has had about third to a half higher per capita GDP than most European countries, caused in roughly equal parts by higher rates of unemployment, productivity, and average hours per worker. The gap in rate of employment has leveled fairly dramatically in some cases and the gap in productivity is in single digits when one compares with France, Germany and the Netherlands. Now, the difference in per capita GDP is mostly a result of the fact that Americans work longer hours.

3. The New York Times (h/t reader d) has a piece on the paradox of Alaskan glibertarianism, summed up well by one of the authors of the state constitution:

“There’s all this verbiage that says we’re the frontier, rough and ready. The Feds paid for everything, but the conflict runs through our history.”

There’s a side of it I can sympathize with. They like living in a less populated, more wilderness-like area in part because of an apparent live-free-or-die ethos. But such an area is prone to have fewer employment opportunities, higher infrastructure costs per capita (footed by the federal government), and more federal representatives per capita (because of the structure of the Senate) leading to more earmark money. So it’s a recipe for self-styled frontierspeople becoming dependent on federal money.

I’m thinking of doing posts like this on the weekend more regularly — let me know if you think it’s a workable format or an annoying snooze.