Monday, July 24, 2006

OK, I'll get down to business.

The Conservative Nanny State by Dean Baker. Here's my damn review:

I read this book becuase it came on good recomendation and it was free to download and cheap to buy. The promise of the original review was that it was chock full of new ideas and I'd say that at first I was expecting "new ideas" to mean "new policy proposals". The book does indeed have that but more importantly it has genuinely interesting new ways to think about things.

But before I get to that I want to talk about my expectations. I was expecting to hear yet another tirade about conservatives and how their policies are bad. Baker obviously thinks that, but doesn’t seem interested in proving conservative policy is bad. Instead, he merely wants to show that conservative arguments for those policies are bad.

Take for example copyrights and patents. He argues that if we accept that protectionism is bad because it distorts the market then we must accept that Intellectual property rights in general are bad since they distort the market far more. Now, obviously all good liberals like you and I know why this line of reasoning is oversimplified: we have to distort the market to encourage innovation. I wondered why Baker didn’t see fit to tackle this argument but then it finally hit me like the last 5 minutes of a M. Night Shyamalan` movie: He’s trying to force conservatives to argue for their policies on liberal grounds. Whoa! Also, Bruce Willis was dead the whole time.

This trick of arguing against the argument instead of the thing itself would be a neat parlor trick on it’s own but here Baker does it for a purpose: Once he’s forced you onto liberal ground he sucker punches you with some far out new ways of thinking about things. In the case of IP this is rather straightforward: Baker is an economist and so he’s come up with some alternatives to the copyright system which should be reasonably familiar with anyone who reads the liberal blogs (vouchers?!). He gives the subject a more thorough treatment than I’ve seen elsewhere.

But he talks about a lot more than IP. Here’s a novel argument against conservative complaints of “double taxation” of corporate profits: since the limited liability of a corporation is a product of big government, big government can charge whatever it sees fit for the privilege. If would-be corporate owners don’t like the terms they can just form a partnership without government involvement.

Or how about free-trade agreements: if we were really concerned about making the economy more efficient through trade we’d focus on the places where trade with other countries would help the most. Currently, this isn’t cheap mass-produced goods, but middle-class professions specifically doctors.

But these aren’t airy-fairy musings on Baker’s part, he has actual policy proposals: for the last example, an international standard for doctors that would allow qualifying doctors to practice in any country signing the agreement. For dealing with white-collar tax cheets: automatically deduct taxes from transactions just like we do for wages. To help make taxes more progressive: start taxing internet transactions. Tax fund transactions. And – Gasp – try to fid a better way to hold down inflation besides having the FED put a bunch of poor people out of work.

Anyhow, you should really read the book. With a price of $0 and a breezy 100 pages there’s really no excuse.


Paul said...

What's to stop the libertarian from calling the liberal's bluff here about LLC status? I would think a serious economic libertarian wouldn't blink to hard at having to deny the legitimacy of LLC status in the first place.

So, if I'm a libertarian, why don't I just get to say, "See how ridiculous it is to have all of these special privileges granted by the government?"

Tommaso Sciortino said...

Ha. Well, it depends on what kind o libertarian. Don't you know? We're all libertarians now. Apparently you can be a libertarian and still advocate for Universal health care.

I guess people could *make the argument* that LLC should be aboloshied but those people might as well bash their heads against a wall: LLC is one of the foundations of modern capitalism. It has too many interests protecting it and it provides a service that is too valuable to the economy to get rid of. A libertarian (or whatever) could argue against LLC but then they might as well spend their time arguing for the gold standard or for getting rid of Social Security.

Beetle Aurora Drake said...

Heyo, folks. I just stopped by. Skimming the IP section of the book, it says "The government will not allow someone to sell their copy of Windows (at least not without Bill Gate’s permission) because it has given Microsoft a monopoly on the sale of this product, through copyright protection." Is he being intentionally misleading? We don't have copies of Windows, we have licenses, and agree to EULAs to that effect. There doesn't seem to be any need to go beyond basic enforcement of property rights and contract agreements, which I've never seen interpreted as market-distorting interventions. (In any case, I've never seen any mainstream claims that such interventions are inappropriate by either conservatives or libertarians, though libertarians may complain about the enforcement mechanisms)

Tommaso Sciortino said...

Yes well, that's what I meant by "he's not making complete arguments", just arguing against bad conservative ones.

He's pointing out the mumbo-jumbo hidden in your phrase "basic enforcement of property rights". There is no fundamental right to intellectual property. Indeed, unlike real property copyrights and patents are specifically mentioned in the constitution as existing only to “promote the Progress of Science and useful Arts”. They only exist if congress feels like it.

So we have a goal which Lazie-fare doesn't do a good job at: encouraging innovation.
We have chosen to set up a big-government program to attain this goal: big government temporarily gives the inventor the "right" to license the ability to use his/her invention, something which would otherwise be public. But we have other government goals we wouldn't dream of promoting this way. We want to help homeless children. We *could* help them by giving each child the right to license the ability to cross the street where they live. They could surely raise a lot of money that way. But everyone I think recognizes that this would also be distortionary. Is it more distortionary as raising taxes to fund welfare? Yes. Is handing out copyrights more distortionary than the other scheme Baker lists for encouraging innovation? We should talk about that.

Intellectual "Property" is a big government program. It may be a good one (as you pointed out, his argument is incomplete) but we should be open to other ideas. The ones he advocates are intriguing.