Brink Lindsey Proposes a Growth Plan with Appeal Across The Political Spectrum

It turns out that small government libertarians like myself and large-government progressives actually have something in common -- we both fear accumulations of unaccountable power.  We just find such power in different places.  Progressives fear the accumulation of power in large corporations and moneyed individuals.  Libertarians fear government power.

I won't try to take Caplan's ideological Turing test today, but will just speak from my own perspective.  I wonder how Progressives can ignore that government has guns and prisons while corporations just have the ability to sell you something or hire you (though perhaps not on the terms you prefer).  When pressed to explain why the Left is more comfortable with government power, their explanations (to my taste) depend too much on assumptions that competent versions of "their guy" pull the levers of power, and that power itself and the vagaries of government incentives will not corrupt this guy.

On the other hand, progressives ask me all the time, "how can you trust corporations so much" and then list off a justifiably long list of examples of them acting poorly.  This, I think, is where the real difference comes in, and where the confusion often comes int he public discourse.  I will answer that I don't trust anyone, government or corporations.  What I trust are the incentives and the accountability enforced in a market where a) consumers can take their money elsewhere if they get bad products or services; b) employees can take their labor elsewhere if they are treated poorly; and c) entrepreneurs can make a fortune identifying shortcomings in incumbent businesses and offering consumers and/or employees a better deal.

Unfortunately, when a person or organization finds itself very successful in this game, there is a natural tendency to want to protect their winning position.  But nothing in the market can stop a challenge from a better product or service, so successful entities tend to turn to the government (which has a monopoly on guns and prisons and asset seizures and the like) for protection against upstart challengers.  If successful, these restrictions tend to hobble growth and innovation -- imagine if IBM had successfully used government influence to halt the PC revolution or if AT&T had blocked the growth of cell phones.

This dynamic is at the heart of Brink Lindsey's new white paper at Cato (pdf).   As has been his wont in several past works, Lindsey is looking for proposals that bridge the gap between Left and Right.  So, rather than stake out the 98th salvo in an area where there seems to be a hopeless ideological divide (e.g. minimum wage or low-skill immigration), he focuses on four areas one could imagine building a broad coalition.  Lindsey focuses on attempts by successful incumbents to use government to cement their position and calls them "regressive regulation" because they tend to benefit the already-successful at the expense of everyone else.

In the following sections, I examine four major examples of regressive regulation: (a) excessive monopoly privileges granted under copyright and patent law; (b) protection of incumbent service providers under occupational licensing; (c) restrictions on high-skilled immigration; and (d) artificial scarcity created by land-use regulation. In all four examples, current government policy works to create explicit barriers to entry. In the first two cases, the restriction is on entry into a product market: businesses are not allowed to sell products that are deemed to infringe on a copyright or patent, and individuals are not allowed to sell their services without a license. In the other two cases, actual physical entry into a geographic area is being limited: on the one hand, immigration into the country; on the other, the development and purchase or rental of real estate.

One can immediately see how this might appeal across ideologies.  Libertarians and market Conservatives will like the reduction in regulation and government scope.  Progressives should like the elimination of government actions that primarily help the wealthy and powerful.**

I said "cross ideologies" above rather than bi-partisan because things get messy when actual politics intrude.  All of these protected constituencies wield a lot of political influence across both parties -- that is why the regressive regulation exists in the first place.  And they all have finally honed stories about how these restrictions that prevent new competition and business models are really there to protect the little people (just watch the battles between Uber and the taxi cartels and you will see what I mean).

Never-the-less, this strikes me as a pretty good list.  For whatever barriers there may be, it is a hell of a lot easier to picture a bipartisan agreement on any of these issues than on, say, low-skill immigration.  I haven't finished reading to the end -- I have to get on now with my day job -- so I have yet to see if there are any concrete proposals that look promising.


**The ideological problem here, of course, is that libertarians think that these restrictions are the primary way in which the wealthy unfairly benefit while most Progressives would (I suppose) see it as a side issue given that they believe that even the free-est of market capitalism is inherently unfair.

  • roystgnr

    Wasn't this the blog in which I read about how libertarians had to back off from a local gay rights cause, lest they do more harm than good by scaring away some of the liberals?

    In hindsight, wouldn't it have done less long-term harm to nip that sort of thinking in the bud? Otherwise we live in a world where cross-ideology support is a *liability*, not a benefit. Get a mix of voices supporting high-skilled immigration, for example, and you'll be fighting for low-information voters' minds against a tangle of suspicion: "Do they *really* want to benefit the immigrants, or just to lower the wages corporations have to pay for that skill level?" vs. "Do they *really* want a stronger America, or just more reliably-leftist voters?"

  • vikingvista

    Progressivism is very much an opportunistic ideology. Corporate cronyism that supports the progressive cause, like Federal subsidies into the green industries or tax advantages to labor unions, will always be greedily defended by progressives, at least until overt nationalization of those industries occurs.

    The only common ground you will ever be able to find with progressives will be something that progressives think increases the size and scope of state institutions. So the only libertarian common ground with progressives will be on issues where one is mistaken about the ultimate impact on state power.

  • Mike Powers

    It's entirely possible, though, that progressives will never respond to any market-based reasoning. A former friend of mine was telling me all about how great Uber was. "They'll come out to my apartment in (area of the city that's nowhere near the tourists) and the cabs take, like, an hour to get here, when they show up at all!" I pointed out that the cabs would happily drive out there if they could charge enough to make the trip worthwhile, which is what the Uber cars do but which cabs are prevented by law from doing. "Yeah, but cabs suck, they don't come out here! Uber is great because they come out here!"

    It was like talking to a wall. I kept trying to find ways to get through, to re-state "the regulations make it unprofitable to pick you up and that's why they don't come out", but it was like I wasn't even saying anything. Uber was great, cabs sucked, he didn't care about the reasons why.

  • Thomas Reid

    I accidentally tried out the Uber vs. taxi argument with some Progressive friends with whom I have little political common ground this weekend and found out that we have common ground on protecting Uber from increasing regulation on Uber. So, score 1 for Lindsey's list.

  • mesocyclone

    I think the concern with big corporations is still very important (btw... I'm a conservative, generally). Big corporations can achieve inordinate power in a several ways...

    They can use their size to rent the government's power (it's guns, so to speak). This is increasingly common. A solution to this problem is hard from the libertarian and conservative side, because one can say "government shouldn't do that" but government does, and it's not clear how to stop it.

    Unrestrained, they can form monopolies. In theory, monopolies eventually are defeated by the free market. But eventually can be too long a time. Another problem for the libertarian and conservative side.

    Finally, they can become "too big to fail." We saw this with the financial crisis, and it is a real problem, and growing worse. Answers? Mine is to cap the size (by some metric) of big corporations, using, yes, the government and by default, its guns.

  • slocum

    But I'd say that this common ground was entirely the product of Uber's genius strategy of making their service available immediately without asking for permission to operate and even often in defiance of cease and desist orders. Progressives would have been almost uniformly negative toward a proposed unregulated Uber service vs existing regulated taxis if they had not experienced the new service personally.

  • vikingvista

    Behind any accused free market sustained monopoly, defined e.g. by its effect on prices, is a sustained government act. In any sense which should alarm consumers, monopoly is everywhere and always a product of the state.

    For all intents and purposes, the same is true of too-big-to-fail in the modem developed economy.

    The notion that free markets naturally tend to monopoly is a mistake of marxians and a small band of full reserve banking Austrians.

  • MB

    Governments have shown an ability to change for the better, and the levers to do so are pretty well known. Corporations, not so much.

    Speaking of incentives, I'd note that some of the items on that list (occupational licensing, land-use regulations) have some pretty significant non-economic and external effects too. Would be interesting to see a proposal that could successfully balance Libertarian and Progressive interests on both sides of those.

  • markm

    The only way governments improve is when they catch up to the 18th century and move from monarchy or dictatorship to a republic - and then they keep trying to revert to a dictatorship in fact, cloaked by the form of a republic. E.g., Executive Orders have been a danger to the American system of government at least since Nixon. What are the levers to change governments for the better? Voting rarely does it; you usually get a choice between two candidates, a Democrat who is openly for expanding government power everywhere, and a Republican who will do the same but lies about it.

    In contrast, the levers to force corporations to improve are obvious and actually available to each individual - stop buying from the bad ones.