Things Government Should Do
There are plenty of ideas of what governments should do born out by long history of where governments have been successful and where markets have failed. Not just defense, but things like basic research, infrastructure, social insurance and a host of other practical needs.
- Public Goods And Club Goods (17 links)
- Libertarians often refuse to recognize public goods and club goods, or that governments have a role in their provision. The list of important goods with substantial public or club goods components is very long, and includes education, law, safety, health, transportation, research and much more. (Club goods are like public goods but excludable and only rivalrous with congestion.) Markets underproduce these because of the free rider problem.
- Agrarian Justice (book, online)
- Thomas Paines' prescient proposal which advocated the use of an estate tax and a tax on land values to fund a universal old-age and disability pension, as well as a fixed sum to be paid to all citizens on reaching maturity.
- Child Labor (6 links)
- Many libertarians defend child labor because the alternative is for popular, labor, and government action to end the cycle of poverty, low education, and child labor. The obvious utilitarian argument against it is that lifetime earnings of a child laborer are MUCH smaller than those of an educated child.
- Civil Rights (5 links)
- The civil rights movement has been one of the great libertarian bugaboos: it is a classic example of non-market application of government to relieve widespread oppression.
- Diamond Shaped Society (3 links)
- The diamond shaped society is a term coined by Charles Wright Mills and revived by David Brin for majority middle-class societies in the first world. Libertarianism, being conservative and aristocratic, is harmful to the diamond shaped society.
- Eminent Domain (5 links)
- Libertarians hate this limitation on property rights, ranting incessantly. And when used corruptly, it is detestable to all. But it does have an important role to play in overcoming a common market failure called the Tragedy Of The Anticommons. The key concept is that property ownership is not an unmitigated good, and, worse yet, it can lead to economic gridlock and underutilization of resources.
- Health Care (40 links)
- Despite superior results from socialized health care in every developed nation, libertarians insist on privatizing. Public health is the outstanding government success story. The sewers of Rome have saved far more lives than the legions of Rome ever killed. Killing by governments is tiny compared to the lives saved by government-eradicated smallpox alone. Libertarians frequently insist that Private Charity could replace socialized health care, but it has never done this anywhere in history.
- Infrastructure (8 links)
- We use infrastructure as we breathe the air: we hardly ever think about it unless it fails. But the infrastructure of roads, communications, education, science, defense, law, and many other institutions is largely a product of government efforts.
- Innovation (12 links)
- Libertarians ignore the enormous history and pervasiveness of government innovation to claim that innovation is primarily from the private sector. Both sectors are very important. Nor is innovation always beneficial, as we've seen from private financial innovation, which caused the great recession.
- Market Design (4 links)
- Markets don't just spontaneously happen in their final (or current) form. They evolve or are designed by government and participants. Without such design or evolution, markets are rife with failures. Government must be involved to shape the laws and regulations that give order to the market.
- My Take on the Seven Things We Need to Focus on for Equitable Growth in America [More...]
- Brad DeLong presents seven progressive ideas that promote growth and simultaneously reduce inequality.
- Natural Monopolies (5 links)
- Libertarians like to deny the existence of natural monopolies in roads, sewers, and many other services (like Google search) that have increasing returns to scale. Or they make crazy arguments that they should not be produced or regulated by government.
- Norway’s gargantuan sovereign wealth fund, by the numbers [More...]
- This is how society should be run. Not to prop up billionaires, but to support everybody. "Since its founding in the late 1990s, the fund has amassed its vast wealth with the intention of paying for pensions in future generations, when Norway’s population ages and its oil wells run dry."
- People’s Policy Project [More...]
- People’s Policy Project (3P) is a think tank founded in 2017 by Matt Bruenig. The primary mission of 3P is to publish ideas and analysis that assist in the development of an economic system that serves the many, not the few. Funded through Patreon, to avoid the compromises typically demanded by monied interests.
- Public Expansions Of Liberty (17 links)
- Government creation of enforceable rights makes markets for those rights, as in cap and trade. Public safety protects us from crime and accidents, giving us the freedom to use our resources productively rather than protectively. Infrastructure such as roads lets us travel and do many things more freely.
- Public Housing (3 links)
- Long derided by conservatives and libertarians as programs that are worse than their alternatives, there is strong evidence that public housing is an effective approach to poverty. Cities such as Singapore have long used public housing to promote their economy.
- Regulation (27 links)
- Regulation can protect important liberties, such as freedom from poisoning by pollution. Regulation can benefit by eliminating some bad choices or protecting from side effects. Complaints that regulation "destroys jobs" are laughable because ordinary productivity increases routinely destroy vast numbers of jobs. How many of us have farm jobs any more? Meeting regulatory requirements may even create new jobs.
- Research (5 links)
- Scientific research and statistical information gathering are vastly better performed by government, and underproduced by private actors. There’s a clear pipeline from government-funded discoveries to private-sector innovations. These are classic public goods.
- Rewriting the Rules of the American Economy: An Agenda for Growth and Shared Prosperity (book, online)
- How the current economic system privileges the upper class (which libertarians support, though they claim not to), and how to reform it to foster the middle class with recommendations that libertarians oppose.
- Roads (10 links)
- The "who will build the roads?" question has become an inside joke for libertarians. So much so that they don't even debate or discuss it anymore. They just regurgitate "privatize everything!" despite the fact that history shows their solutions don't work except in rare cases.
- Social Wealth Funds (12 links)
- Also known as Sovereign Wealth Funds. An alternative for public ownership of wealth that has been widely used around the world. See also Basic Income, which could be funded by these.
- Social Welfare (13 links)
- Often derided as the "welfare state", social welfare produces the best lives for all by standards of low poverty, health, long lives, employment, education and many other measures. By modern methods of measuring poverty, poverty in the USA has dropped from 19.5% in 1963 to 2.3% in 2016. There are many varieties, including Basic Income. Conservatives and libertarians create many myths about welfare failures. But even John Locke said the poor have rights to the wealth of the rich for basic needs.
- Socialized Medicine (7 links)
- The proven method to the most economical and broadest provision of health benefits to a nation's populace. Rejected by libertarians because it is a government program; that is more important to them than the life and health of people.
- Sweatshops (2 links)
- There is a huge literature on the known harms of sweatshops, but these are usually excused by theoretical benefits. Now literature is appearing that shows the supposed benefits aren't really there.
- Take Away the Entire Welfare State From Employers [More...]
- "The phrase "employer-provided welfare state" might seem to be a contradiction, but it's an apt description of what we have in this country. Employers don't just pay out cash incomes to workers, but are instead tasked -- whether by law or not -- with running complex social insurance schemes among their workforce."
- The Connection Between Work and Dignity [More...]
- An efficient economy leaves unemployment high: some inefficient but useful jobs can alleviate unemployment and create dignity for the workers. "If we work hard and produce something of tangible value, we tend to feel a sense of self-worth when society rewards us for it with a decent, middle-class life."
- The Economics of Belonging: A Radical Plan to Win Back the Left Behind and Achieve Prosperity for All (book, online)
- "[E]conomics remains at the heart of our widening inequality... Sandbu contends that we have to double down on economic openness while pursuing dramatic reforms involving productivity, regional development, support for small- and medium-sized businesses, and increased worker representation. He discusses how a more active macroeconomic policy, education for all, universal basic income, and better taxation of capital could work together for society’s benefit."
- The importance of redistribution [More...]
- "democratic egalitarianism"--the idea that individuals flourish best in a free society that allows them to choose democratically the rules that govern their lives, with the understanding that the institutions must be sustainable and must allow all individuals to flourish, not just a select few.
- The Public Really Can Own Everything [More...]
- The genius of modern finance has been to create corporate ownership arrangements that allow basically anyone, including the government, to own shares of any company in any sector while being as involved (or uninvolved) as they want to be in steering the company. A federal social wealth fund, like the one I advocate, should be able to take advantage of modern shareholding institutions to expand public ownership into every aspect of the US economy.
- The Second Bill Of Rights: FDR's UNfinished Revolution-- And Why We Need It More Than Ever (book, online)
- FDR proposed 8 economic rights: employment, with a living wage; food, clothing and leisure; farmers' rights to a fair income; freedom from unfair competition and monopolies; housing; medical care; social security; education. A foreshadowing of the Capability Approach.
- The US Gov’t as Venture Capitalist: Why Go There? [More...]
- Jared Bernstein writes: "The question of should the government backstop investments in new areas of research is actually an odd one, because it’s been doing so since before we were even a nation [...]"
- Timely Abraham Lincoln quote: Who defines Liberty? [More...]
- "The shepherd drives the wolf from the sheep’s throat, for which the sheep thanks the shepherd as a liberator, while the wolf denounces him for the same act as the destroyer of liberty, especially as the sheep was a black one."
- Transportation (4 links)
- Transportation is rife with market failure, including natural monopoly, positive and negative externalities, coordination problems and conspiracy to manipulate markets. This necessitates an active government program of regulation, deregulation, anti-monopoly and socialized production.
- Voluntary Failures (3 links)
- Just as there are market failures and government failures, there are also voluntary failures such as philanthropic insufficiency, philanthropic particularism and philanthropic paternalism. Where voluntary and market efforts fail, government should step up.
- What Is Living and What Is Dead in Social Democracy? [More...]
- "The common theme and universal accomplishment of the neo-Keynesian governments of the postwar era was their remarkable success in curbing inequality... It was social democracy that bound the middle classes to liberal institutions in the wake of World War II..."
- Why the Richest, Freest Economies Belong to Countries With Large Powerful States [More...]
- "The private sector and the public sector are not antagonists, as libertarian ideology would have it. On the contrary, they are necessary complements: The health of the former depends on the health of the latter." Marred only by some libertarian propaganda about Hayek and Schumpeter.
We are going to need a bigger and better government. The private unregulated market does not do well at health-care finance, at pensions, or at education finance. The private unregulated market does not do well at research and early-stage development. The private unregulated market does not do well with commodities that are non-rival, or non-excludible, or produced under conditions of greatly-increasing returns to scale. We are, in all likelihood, moving into a twenty-first century in which these sectors will all be larger slices of what we do. Thus in the twenty-first century a well-functioning economy will need a larger government share in the economy than was needed in the twentieth century.
Brad DeLong, "My Take on the Seven Things We Need to Focus on for Equitable Growth in America: Thursday Focus"
It seems to me that there are five areas in which government spending has a demonstrated superiority over the private sector -- health and disability insurance, education, old-age pensions, infrastructure spending, and military spending. It seemed to me that structural changes in our economy and society were driving the amount of money we ought to spend in sum on those five up, hence the enlargement of government.
Brad DeLong, "Nick Eberstadt and the "Takers" Once Again: More Reflections on the General Theory of the Moocher Class"
Urban street gangs in under-policed neighborhoods, mafias in under-taxed countries, and groups like Hezbollah in Lebanon invariably step in to fill the void where government fails. When the Japanese government wasn't able to adequately help the population after the earthquake and tsunami, the yakuza helpfully stepped in to do it for them. The devolution of local authority and taxation into the hands of criminal groups willing to provide a safety net in exchange for their cut of the action is the invariable pre-feudal result of the breakdown of the government-backed safety net. It happens every single time. The people will want a safety net where utter chaos doesn't prevent it: they'll either get it from an accountable governmental authority, or from a non-governmental authority of shadowy legality. Both kinds of authority will levy their own form of taxation, be it legal and official, or part of an illegal protection scheme.
David Atkins, "The "No True Libertarianism" fallacy"
The shepherd drives the wolf from the sheep’s throat, for which the sheep thanks the shepherd as a liberator, while the wolf denounces him for the same act as the destroyer of liberty, especially as the sheep was a black one.
Abraham Lincoln, "Timely Abraham Lincoln quote: Who defines Liberty?"