Out of Egypt:

libertarian questions, pt. 2

Are Constitutional rights and Locke's "natural rights" one and the same? Are you certain that the framers of the Constitution got it right based on empirical grounds or do you simply accept that as a presupposition of your system?

Do the differences between an 18th-century agrarian economy and a 21st-century post-industrial economy have any bearing on how the political order should be run?

1) Pretty much, as the framers of the constitution were relying on much of Locke's theory.
2) No.
3) Yes.

However, what makes me a libertarian is not a commitment to any specific form of government, but to the general principle that "less is more." As Madison noted, in an ideal world, where "all men were angels," we would have no need for government. So I think government is necessary (there are few anarchist libertarians). And where there are more people, there will be more need to protect them. However, government is made up of the same people who don't seem to be angels, meaning that there needs to be checks on government power as well as on, say, corporate power. Where do those checks come from? Quite possibly from treating government like salt--a little of it flavors the food and provides life-giving nutrient, but too much will give you a heart attack. I honestly feel government should be the last--not the first--resort to problem-solving.

As far as government controls on food: the Better Business Bureau is a privately run check and balance system. Businesses who participate and pass the rating system get a stamp of approval. People who care about getting quality service will choose the businesses that got a good BBB rating. I think that theoretically the same thing could be done for food. You couldn't mandate every ag/food company to comply, but those that did would gain the public trust and earn the right to use the label (to get certified). The one downside would be that better quality food would be more expensive for a while (perhaps always?). The poorest people would be stuck with the crappy quality food. But that would be the case even with the government-regulated food industry. There will always be a need for benevolence (private sector) or yet another government program (food stamps) to offset inequality. And if the public sector were working with the private sector in tandem, there would just be a little less government than if the public sector shouldered the whole burden.

Posted by: funke at June 22, 2008 4:06 PM

That's a lot to think about, and I can't answer it all now. All I'll say for now is that preventing inequality is not the only reason for government regulation of food. Government regulation is also important to prevent "the tragedy of the commons." A voluntary certification program wouldn't stop companies like Monsanto from either a) polluting (as they did in Alabama with PCBs) or b) releasing crops that threaten biodiversity (Roundup Ready soybeans). It was only government coercion (in the form of lawsuits) that ended the pollution. The GMOs are still being planted.

If "all men were angels", then, yes, government would not be necessary. However, if all men were angels, a socialist economy would work also.

I am far from opposing limits to governmental power. What I do oppose is when people say that deregulation is always good, and leads to more freedom. In an agrarian economy, before the rise of multinational corporations (with the standing of "artificial persons" before the law), that might well have been true. However, for the past century or so the corporation has much more going for it than the individual consumer. Individuals have much less accumulated wealth and property than corporations, as well as less information about market conditions, and thus less bargaining power.

To take a somewhat different example, remember the Joads in The Grapes of Wrath. They were not able to find jobs that could sustain them. The glut of potential laborers had depressed wages so far that there was little chance that they could return to a fair market price on their own. Government benevolence is not an ideal solution by any means, but sometimes the government is the only institution big enough to correct for systemic inequality.

Anyway, hope you're enjoying your vacation! :)

Posted by: Evan Donovan at June 23, 2008 9:51 AM

I miss you. Can you tell? :)

Regarding the Joads and the Depression--it was probably necessary for the government to step in, but it wasn't the New Deal that ended the depression. The depression was still in full swing all through the 30s. It was the onset of WWII and the fact that the rest of the Western world's industry was pretty much decimated by the time it was all over that pulled the American economy out on top...which I concede is probably not the most ethical way to build a strong economy...

All that to say, it seems to be very messy no matter what side you are on (i.e. government aid/New Deal=didn't really work vs. WWII=worked but at expense of rest of world).

Posted by: funke at June 23, 2008 3:01 PM

I know the New Deal didn't end the Depression. That wasn't really my point. My point was simply that wages don't always go to a fair amount based on market forces alone. There is inequality between employers and employees - part of it because of information asymmetry, part of it because the surplus of laborers can get to a point where the price the market sets on labor is below what anyone can live on.

The information asymmetry is similar in the case of food & drug regulation. The BBB would find itself woefully inadequate to inspect the drugs that come on the market these days. We wouldn't want to go back to the early 1900s era of "patent medicines". Just see how well that is working right now in the field of nutritional supplements, where people can basically say whatever they want.

Posted by: Evan Donovan at June 23, 2008 3:12 PM

Haha I feel a little weird popping into this conversation, but your question reminded me of this Krugman column I read recently: http://www.nytimes.com/2008/06/13/opinion/13krugman.html

Now, he's solidly in your camp (more regulation) but I found it interesting how his example almost reinforced the libertarian notion of "less is more" that Sarah mentions. Because government shifts with the political atmosphere, it's easy to corrupt regulatory agencies as Bush did with the head of the FDA. In that sense, the true goal of the FDA (or similar institutions) is to serve its political master, rather than the consumer (yes, they serve the consumer too, but if management were independent of political leadership, then I believe a more cohesive, consistent program focused solely on the protection of the consumer would be in place). There are far too many other examples of thsi sort of behavior in government.

Regulation, particularly of our food products, is obviously important. But I would trust a private, profit-making institution far more than a governmental one -- if the incentives were properly aligned (see Moody's/subprime crisis for an example of how it can go horribly wrong when rating agencies link their profits with those of the businesses they are rating). With a private corporation, if they let bad product through, they are financially ruined. With the FDA, at best, it leads to a change in management. At the core of most libertarian economic arguments is increased efficiency and properly aligned incentives (at least that's the way I interpret them).

Posted by: Melinda at June 24, 2008 4:05 PM

Melinda--Evan never listens to me anyway, so thanks for jumping in. You articulated what I wanted to say much more succinctly.

:P

Posted by: funke at June 24, 2008 5:15 PM

Sarah, you know I listen to you :)

Thanks for your comments, Melinda. You make a really good point. There's a bit about this in the Monsanto documentary, about the revolving door between the regulatory agencies and the corporations they're supposed to be regulating.

I guess my remaining concern is how an institution could profit from the regulation of foods & drugs, especially in such a complex market.

Another complication I foresee is the length of the supply chain - there are several steps between the Roundup-Ready soybeans and the consumer's purchase of soymilk, or whatever. This presents more opportunities for dishonesty.

But in any case, I'm a pragmatist (though not in the philosophical sense): if a non-government institution can do it better, then by all means go with that. What puts me off about libertarians (or leftists) is when they seem to care more about consistency of thought than what actually has been proven to work.

Show me the public policy proposal, and I'm all for it. Political philosophy, not so much.

Posted by: Evan Donovan at June 25, 2008 12:03 AM

The fact of the matter is that you listen to me far more than I deserve. :)

(I have now successfully derailed the original argument from a public conversation about libertarianism to a private exchange of sweet nothings. Ack. Sorry. Carry on.)

Posted by: funke at June 25, 2008 2:03 PM

Haha you two are adorable.

I have lots of opinions on these subjects, but unfortunately, very little time at work (ha) to address them. But I will say this, I think that in an era of really imperfect, inaccessible information, government agencies may have made sense as the regulatory solution. But the truth is, the internet and all of its implications in regard to the sharing of information should be revolutionizing our political environment, but little has changed. Consumers have more access than ever to information, yet we use the same old structures. Basically, we're not in The Jungle anymore - if even oppressed Burmese can blog about corrupt dealings, what's to stop a factory worker or anyone else?

Is it perfect information? Of course not - that's a theoretical ideal, rather than something actually attainable. But we're moving in the right direction, further empowering the consumer, voter, etc. Government agencies were created because they could force businesses to provide information / comply with regulations / etc. in an era when individuals had no way to do it themselves - the media was too established and interlinked with these businesses to truly rouse a large group to action. But our economy is becoming more responsive to consumer behavior because of this increased information and the power of consumer trends - for example, all the investment in sustainability, even when there aren't government incentives involved. To me, that signals that this free market thing might be working - plus I've read far too many tales of government involvement having unexpected consequences (I can provide many, many examples). Yet, all we ever seem to propose is more government programs, rather than scaling back ones that are becoming obsolete. In the economy, this "creative destruction" is an integral part of what keeps it moving forward and developing and refining itself to meet the real needs of people. But what are the motives in government? No one makes any profit, taxpayers are forced to keep coughing up as much money as you'd need, you can borrow from China, etc. So what incentive is there for efficiency? How do we hold government programs accountable? I read Paul's book recently, and while I don't agree with everything, I would highly recommend it. There's an astonishing example of bureaucracy and it's stunting effect on productivity -- basically it went something like the Catholic School system in New York educates a fairly similar number of students as the public school system, but has a much higher success rate for students, budget surpluses, etc. He called to see how many bureaucrats there were in the system - I believe the answer was around 8. Public school system (which has been in constant danger of collapse for at least a decade, I believe) - more than 10,000, I think. Clearly, one is more efficient. So we have these governmental organizations that essentially should run more or less like businesses (cash in, cash out, goals to be met, etc.) with no incentive for efficiency or accountability or progress of any sort (notice it took private firms to allow us to do our taxes online...). Now I know we started our talkign about regulation, but truly, it's astounding how much productivity is lost through this model.

I think I have to stop and get back to work, even though I haven't fully completed my argument, if one can call it that. We should have a fuller discourse. Take care, you two.

Posted by: Melinda at June 25, 2008 7:31 PM

Melinda: You are, as always, providing a unique slant on current affairs. I appreciate your opinions more than pretty much any political columnist's, because you combine a leftist's sense of social responsibility with a libertarian's take on economic theory.

Too bad none of our current choices for president (or really any high office) have the same perspective.

Sarah: At best, I listen to you as much as you deserve. Oftentimes, I could do better.

Posted by: Evan Donovan at June 25, 2008 9:24 PM