Friday, June 16, 2006

Kossacks trying to win over libertarians

Kos recently wrote a post about so-called "libertarian Democrats", claiming that he was one. The concept isn't preposterous in itself, after all Democrats are usually fairly libertarian on social issues, so they're halfway there. It's not stranger than being a libertarian Republican, where you have to find a way to make common cause with religious voters who want government imposing their own moral preferences.

The problem is that Kos is only doing some creative framing here in an attempt to woo libertarian voters to the Democratic side. Try to emphasize Democrats' libertarian stance on social issues, while trying to explain how authoritarianism in economic matters will increase our freedom. It's clever, but most libertarians in the blogosphere seem to have seen right through it.

I do believe he has a point about some things, like health care. A case can be made that if the government takes on some risks, then it gives us greater freedom of action, thus offsetting the loss of liberty inherent in any universal health care system. Most doctrinaire libertarians would scoff at this, but at least the logic has some merit, at least from a Democrat's perspective. One could make the same case about a social safety net and Social Security. It's not exactly your father's libertarianism, but it can work, especially since it's unlikely libertarians will ever defeat that status quo anyway.

Where he goes off the rails is in believing that the corporation is more dangerous to our liberties than the government necessary to exert the amount of control that Kos deems necessary. He also misrepresents a libertarian belief, stating that libertarians only believe that government and individuals can threaten your liberties. Libertarians see corporations as a threat as well. The difference is that we recognize that their power comes from government. Government which they can use to extort money from taxpayers. Government which can pass anti-competitive laws and regulations.

Kos's most important line:

The key here isn't universal liberty from government intrusion, but policies that maximize individual freedom, and who can protect those individual freedoms best from those who would infringe

So basically, the government, with its virtually unlimited ability to use force, will protect us from corporations, whose ability to use force is limited. I don't find that convincing at all, for obvious reasons. It's fox watching the henhouse type stuff.

Now of course there are a few things that corporations are doing that hurt us more than what government is doing to us. The most frequently cited is pollution. Okay, fine. I'm okay with environmental regulation. Provided we do cost-benefit analysis. No more forcing businesses to spend $50 billion to achieve a .0001% reduction in arsenic in the water, or forcing car companies to add a $1000 widget to every car where the widget would only save a dozen lives a year. Cost/benefit analysis is a must, and something resisted by Democrats in the past. If Kos and other Democrats can meet us in the middle there, we can deal.

Another thing that corporations do to us is corrupt our political system. Well, not actually, at least no more than any other interest group. If you check out Open Secrets you'll find that corporations' effect on the political system, while significant, is not as dominant as Democrats' would like to portray it. Also important in the process are trial lawyers, doctors, unions, single-issue PACs, the AARP, minority groups, and even foreign governments. Secondly, corporations don't have a single agenda, so their influence is neutered to some extent. Some corporate sectors donate and lobby more to Democrats, some more to Republicans.

But let's say they were in fact dominating and corrupting our political system. Why are they doing that? Because government has something they want. A few things they want, actually. The first 2.5 trillion things they want is your money. Government hogs almost 20% of GDP, so naturally there's quite a bit of goodies to compete for. Corporations are hardly alone in trying to get their share of all this loot. Pay $5 million in lobbying and campaign donations and you can get a $5 billion subsidy. What a deal! Now how do you stop this kind of thing? It's ridiculously easy: Stop granting government the power to hand out money to special interests. Then those millions in lobbying dollars and campaign donations becomes a bad deal.

The other thing corporations want is the ability to harm their competitors or get special advantages for themselves in the market. Many of the largest corporations are highly dependent on government regulation keeping out upstart competitors. The auto industry is a prime example. The regulatory hurdles to starting your own auto company are so extreme that the very idea of starting such a business today seems laughable. Might as well get into the space tourism business. But it wasn't always so. Anyone who has seen Tucker knows how business and government collude to keep smaller competitors out. Businesses can afford to comply with the labyrinth of regulations better than they can afford to constantly adapt and compete. Once again, sharply restrict the ability of government to do this kind of thing, and corporations have no reason or incentive to get so involved in the political system.

If we could just establish a few basic guidelines for regulation and other government powers, then libertarians and Democrats could do business:

1) Regulations should only be to promote safety, prevent fraud, and stop anti-competitive practices. We can also throw in environmental regulations for industries that pollute.
2) All such regulations should be subject to cost/benefit analysis.
3) No outlays for local or individual interests. That means no earmarks or corporate welfare. There is not a single state that can't build its own bridge to nowhere with its own taxpayers' money. Any corporation that can't compete doesn't deserve to exist.
4) Don't screw with the political system. After you've eliminated corporate welfare and the ability of corporations to kneecap their competitors using government power, all that's left is lobbying in defense of shareholder assets, which is a GOOD thing. There are many groups that want to foist unfunded mandates or even try to seize property from corporations. Shareholders are every bit as human as AARP members or union members, and thus have a right to defend themselves from rent seekers. A good example is a group of doctors trying to get the government to force restaurants to label their menus or reduce portion sizes. These policies would have a very real effect on shareholders as it would increase costs. If corporations were banned from lobbying, which some Democrats have suggested doing, that means rent-seeking groups get to lobby while shareholders are defenseless from groups trying to pillage them.