Friday, November 14, 2008

In Defense of libertarians

I've been sick with a nagging cold this week, which is why the blogging has been so light. I had read this Matthew Yglesias piece, calling out libertarians for being corporate shills, earlier in the week, but I figure better late than not make the party at all. Here's the particularly insufferable part.

That said, the larger problem is that libertarianism, even at its very best, tends to suffer from an impoverished set of ideas about how corporate domination of the public policy space might be prevented. The political left has, by contrast, the tradition of community organizing, a set of public interest advocacy organizations, allies in the trade union movement, efforts to improve the quality and independence of the civil service, and various notions about changing the methods by which campaigns are financed in the United States. This is hardly a perfect toolkit, and it can be enhanced in some ways by drawing on libertarian insights, but it’s something. And libertarians tend to be either indifferent or hostile to it, campaigning against public financing, strong labor unions, and the civil service.

It's the corporate domination of the public policy space line that gets me. Not because it's wrong or not important, but because corporate power and influence is a notion that gets lobbed around like a nerf ball but never gets seriously discussed. Corporations are simply trashed or lauded, which is kind of funny, given that corporations are no different than people- some good, some bad, all of them trying to do the best that they can. My point is that there's no reason to consider corporate domination of the political process as any different than domination of the political process by any other group or individual. The issue should be democracy, not corporate bogeymen.

Anyone who's ever studied regulation or been involved in a regulated industry can tell you about regulatory capture, the notion that the regulatory process ends up being dominated by those who are supposed to be regulated. This happens precisely because a regulatory structure exists in the first place. The more highly regulated an industry is the more likely it is that some form of regulatory capture will be going on. The libertarian argument is that limiting regulation in the first place will not only make regulatory capture less likely, it will make the regulatory process more transparent. It's relatively easy for corporation A to skew laws and regulations to their favor when the laws and regulations are so complex that few non-experts can understand them, but when regulations are simple or non-existent, it is much more obvious when company A goes to the government for a favor.

Now, I know Yglesias isn't specifically talking about regulatory capture and is probably speaking more generally in terms of generally applicable laws and campaign contributions. The problem here is I'm not sure the evidence of corporate domination of the public sphere exists in this regard. As flawed as it may be, American democracy is still far too robust to allow such blatant manipulation by special interests. Such abuse occurs at the margins for sure, as the influence of both corporations and supposed public interest groups occurs with regularity. But this is a symptom of large government, where special interests dominate because the public at large doesn't have the time to understand the details of every government policy.

When it comes to the big issues, I'd challenge anyone to point out the obvious examples domination by corporate or any other special interests. Just look at the big bailout bill of a month ago. Most of the extremely conservative Republicans voted againast it on idealogical grounds. Most of the extremely liberal Democrats ended up voting for it because they judged it to be in the best interests of the American people. The moderate Republicans that ended up changing their minds and voting for the bill didn't all do so because of some corporate quid pro quo. Nor were the liberal Democrats who voted for the bill simply doing the bidding of some secret corporate backers.

To sum up here, my answer would be that democracy actually tends to work on the big issues. Democrats won big in Congress in 2006 because of a backlash to the big ticket items of the Bush administration- the War in Iraq and the way in which the war on terror was being conducted. Special interests, be it business or other special interests, do tend to dominate their own relative spheres, but again, this is a literal symptom of big and complex government. Yglesias seems to think that corporate interests and so-called public interest groups fighting it out is a better than nothing solution, ignoring just why the problem exists in the first place.

Libertarians lobby for less regulation, the effect of which would be to remove a large number of special interests of all sort from government. I suppose the argument againast libertarians goes something like, "well, given that government is the way it is, and it's not likely to change, why don't you do something practical to make things better." It's a bit like asking an abolitionist seeking to change the Constitution to specifically ban slavery why they haven't been doing anything practical to help the slaves. Maybe you're right that there are other things the ideologically minded could be doing, but that doesn't mean that working to change the system is a bad idea.


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