Libertarians routinely propose deregulating almost everything; mostly because they want to limit government, not because it makes sense. Deregulation may not solve the serious problems that initially led to regulation or it may undo regulatory capture. Most deregulation activity is part of corporate attempts at Obstructing Regulation And Regulatory Capture.
- Regulation (9 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.
- A Revisionist History of Regulatory Capture [More...]
- Chapter 1 of Preventing Regulatory Capture. Conservative pessimism about regulatory capture is fostered by a myopic focus on economics. Regulation's focus is often on political, not economic, issues such as "the unprecedented influence of large corporations on politics". An excellent read.
- Air Fail [More...]
- Deregulation of airfares saved us from regulatory capture and made the airline industry competitive. "Blame Jimmy Carter for all the airline bankruptcies. Or better yet, thank him [...] The story of airline deregulation is, in many ways, a cheering antidote to ideological bickering and cynicism about the political process."
- Cap And Trade (4 links)
- A very successful "deregulation" strategy that replaces government regulation and Pigouvian taxes on harmful externalities with government-limited, salable rights to externalities. In other words, government power can create markets and use market mechanisms. This brings market efficiency to regulation; thus businesses hate cap and trade.
- Drug Legalization (8 links)
- Long before libertarians advocated legalizing drugs, liberals advocated legalizing drugs. The difference is how they would be legalized: libertarians want unregulated drugs, and liberals want drugs regulated from a Public Health Approach by organizations such as the FDA.
- Economics is too important to leave to the experts [More...]
- "[...] it is entirely possible for people who are not professional economists to have sound judgments on economic issues, based on some knowledge of key economic theories and appreciation of the political and ethical assumptions underlying various theories. Very often, the judgments by ordinary citizens may be better than those by professional economists, being more rooted in reality and less narrowly focused.
- Economists Are Warming to Government Intervention [More...]
- Based on recent surveys, "... on many issues, economists are actually more likely than the general public to summon the guiding hand of the state."
- Food and Drug Administration (7 links)
- The FDA plays a very important part in moving health care from "buyer beware" to the informed consumers that market advocates think are necessary for optimum results. Labeling and evidence-based claims only infringe freedom to mislead the gullible for a buck. Libertarians uniformly hate the FDA because it bans their favorite illicit substances.
- Free Banking (1 link)
- The idea of replacing central banks by allowing banks to issue their own currencies, with or without various backings. An idea revived by Friedrich von Hayek, with a literature of supposed historical examples. Free banking has many problems.
- Globalization, Free Trade and Economic Freedom (32 links)
- Code for "let business run the world: the heck with the populace." The anti-liberal dominance of plutocratic property and business over popular sovereignty. Historically, we could extend these concepts to include buying, owning, and selling slaves. The arguments made then were the same. Used by propagandists to trump other freedoms. Also known as economic liberty.
- Living in a Second-Best World [More...]
- An introduction to why deregulation and competition may not create their intended benefits, due to the Theory Of The Second Best.
- Minimum Wage (15 links)
- Contrary to Economics 101 dogmas, minimum wage law has no harmful effects on employment according to many real-world studies. And definitely not the harmful effects long claimed by its opponents. Minimum wage does effectively reduce poverty.
- Obstructing Regulation And Regulatory Capture (25 links)
- Libertarians side with capitalist obstruction of harm-reducing regulations, including deregulation. Addictive drugs (such as tobacco), clean air, workplace safety, pollution reduction, prohibition of lead and mercury contamination, food safety, global warming, etc. They seem unaware that reducing some harmful freedoms can result in huge benefits (including freedoms) for others.
- Patterson and Kehoe, and the great lead debate [More...]
- How Robert Kehoe developed the strategy that the lead industry used to avoid regulation and liability over the course of decades of poisoning of millions. A strategy replicated for tobacco, innumerable other pollutants, and global warming denialism.
- Preventing Economists’ Capture [More...]
- Chapter 6 of Preventing Regulatory Capture. The same standard economic incentives that drive regulatory capture should also result in capture of economists by business interests. Economists seem unwilling to admit they have the same problem.
- Preventing Regulatory Capture: Special Interest Influence and How to Limit it (book) (2 links)
- An extraordinary academic book which surveys history, defining, measuring, and solutions to regulatory capture.
- Profits and pandemics: prevention of harmful effects of tobacco, alcohol, and ultra-processed food and drink industries (The Lancet) [More...]
- "Despite the common reliance on industry self-regulation and public–private partnerships, there is no evidence of their effectiveness or safety. Public regulation and market intervention are the only evidence-based mechanisms to prevent harm caused by the unhealthy commodity industries."
- Reading Hamilton From the Left [More...]
- An excellent overview of how Alexander Hamilton's Federalist, dirigiste vision of state-supported capitalism was the basis for the growth of American capitalism. As opposed to Jefferson's large, patrimonial, slave-owning, agrarian elites who exported primary commodities and imported finished manufactured goods from Europe.
- Rent Control
- Rent Control is frequently used as a libertarian example of economics opposing liberalism. It only works that way if you put on your ideological blinders.
- Robber Baron Recessions [More...]
- The virtual end of antitrust enforcement which began under Ronald Reagan seems to have brought about secular stagnation. "For we aren’t just living in a second Gilded Age, we’re also living in a second robber baron era."
- Ronald Coase, a Pragmatic Voice for Government’s Role [More...]
- "Mr. Coase’s work cannot be read as a case for minimal government. On the contrary, his message was more purely pragmatic: Because we can’t negotiate efficient private solutions most of the time, we must ask whether laws and other institutions can help steer us toward solutions we would have chosen if negotiation had been practical."
- Speed Limits (1 link)
- Libertarians often point to the autobahns of Germany as examples of why speed limits ought to be abolished. Even casual thought will show why that is a stupid idea, but it can also be shown analytically.
- The Elasticity of Demand With Respect to Product Failures; or Why the Market for Quack Medicines Flourished for More Than 150 Years [More...]
- Markets did not punish the quack medicine industry due to unusually low elasticity of demand with respect to product failure and bounded rationality. The conclusion mentions that recent resaerch shows the FDA increased consumer welfare.
- The Myth of the Libertarian Internet [More...]
- Matt Yglesias ridicules Peter Thiel for the foolishness of standard libertarian ideological analysis.
- The Tax Prep Industry (2 links)
- While libertarians complain about the complexity of filing taxes, they ignore that this feature is promoted by the tax preparation industry. Another example of privatizing profits by socializing costs.
- The TransPacific Partnership And "Free Trade" [More...]
- A short, clear, graphic-novel introduction to the how the wealthy collect the benefits of Free Trade and the rest of us bear the costs. It includes the loss of national sovreignty through trade agreements that force deregulation.
- The True History of Libertarianism in America: A Phony Ideology to Promote a Corporate Agenda [More...]
- "Before Milton Friedman was earning plaudits as an economic genius, he was a shill for the real estate industry and an early pioneer for big business propaganda known as libertarianism."
- There's Too Much Red Tape (But Only a Little) [More...]
- "Hardcore free-marketers often claim that the cumulative effect of regulation is very large, and that dramatic cuts in regulation could boost economic growth for many years. The problem is that it’s very hard to find solid evidence to back up this assertion."
- This Just In: “Responsible Consumption” is Bogus [More...]
- "While the responsible consumption myth offers a powerful vision of a better world through identity-based consumption, upon closer inspection, this logic harbors significant personal and societal costs.."
- Unfriendly Skies [More...]
- "It’s time to admit that airline deregulation has failed passengers, workers -- and economic efficiency."
- Unregulated Market (5 links)
- Includes black markets. In an unregulated market, you have the freedom to buy and sell whatever you want, no matter how noxious. Drugs, poisons, child prostitutes, slaves, beatings, torture, executions, military force, mass murder: all these are sold in unregulated markets. Libertarians generally oppose market regulation, and thus would produce these ills.
- Where Private Investment Fails [More...]
- Institutional economics. "[...] under rather common circumstances it is efficient (maximizing of profits, minimizing of long run average costs) for explicit rules, regulations, commands, organization charts, and social contracts to replace the invisible hand.
- Libertarians generally oppose zoning, turning a blind eye to the benefits. Zoning is actually an extension of property rights. Libertarian efforts to abolish zoning amount to uncompensated takings.
Normally, conservatives extol the magic of markets and the adaptability of the private sector, which is supposedly able to transcend with ease any constraints posed by, say, limited supplies of natural resources. But as soon as anyone proposes adding a few limits to reflect environmental issues -- such as a cap on carbon emissions -- those all-capable corporations supposedly lose any ability to cope with change.
Paul Krugman, "Crazy Climate Economics"
The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.
Joan Robinson, in Marx, Marshall And Keynes
The invisible hand of the market makes a very good pickpocket.
[...] a huge part of the problem is the Jeffersonian notion that “the government that governs best is the one that governs least.” While that is true as regards individual liberty, it is absolutely dangerous to think that way as regards the economy.
Christian Parenti, "Reading Hamilton From the Left"
Mr. Coase’s work cannot be read as a case for minimal government. On the contrary, his message was more purely pragmatic: Because we can’t negotiate efficient private solutions most of the time, we must ask whether laws and other institutions can help steer us toward solutions we would have chosen if negotiation had been practical.
Robert Frank, "Ronald Coase, a Pragmatic Voice for Government’s Role"
What’s curious is that conservative economists are well aware of the danger of “regulatory capture”, in which public institutions are hijacked by vested interests, yet blithely dismiss (or refuse even to mention) the essentially equivalent problem of democratic institutions hijacked by concentrated wealth. I take regulatory capture quite seriously; but I take plutocratic capture equally seriously.
Paul Krugman, "Sympathy for the Trustafarians"
It is really quite rare to find a buyer’s market for rented accommodation. Even if there is a slight oversupply of rental units for sale, time is almost always on the landlord’s side, because waiting is typically much more inconvenient for the party that has to wait without a house to do wait in. In general, when tenants and landlords are negotiating over the potential Pareto gain that could be made from renting the house, the landlord ends up capturing most or all of the surplus. The hot water and habitability laws are simply aimed at skewing things a bit in favour of the tenant and putting a floor on how bad a deal the tenant can end up accepting. It’s a standard game theory result that something which reduces your options can benefit you by reducing the number of bad options that you can end up agreeing to (most famously, the secret ballot has to be compulsory, because if you had the option to reveal your vote, you could be intimidated), and habitability laws are there for exactly this purpose.
Daniel Davies, "The correct way to argue with Milton Friedman"
Williamson borrowed from Coase the concept of "transactions costs" the idea that the market price in any transaction may fail to incorporate the full costs to the seller or buyer because of the very conditions of exchange. In particular, whenever there is uncertainty or the need for long-term relationships, the parties to a transaction are unlikely to be able to write contracts complete enough to cover all the contingencies or hidden costs. Furthermore, incomplete contracts encourage one or the other party to behave opportunistically, deliberately withholding information or broadcasting disinformation to get a better deal. In such cases, the transaction is likely to occur under a single roof, inside a "hierarchy" (that is, firm). This solution "internalizes" or reveals to the decision makers those otherwise hidden costs. Williamson showed that there are, even in pure theory, situations in which the inefficiencies of bureaucratic organization are offset by the greater predictability of the outcome. This is showing quite a lot, at least to academic economists. It says that under rather common circumstances it is efficient (maximizing of profits, minimizing of long run average costs) for explicit rules, regulations, commands, organization charts, and social contracts to replace the invisible hand.
Bennett Harrison, "Where Private Investment Fails"