Tag: libertarian

Hurting the Sick Is Not Good Politics

I was glad to see James Pinkerton engage my criticism of Louisiana Gov. Bobby Jindal’s (R) endorsement of federal price controls for health insurance.  I was even more pleased to see that Pinkerton has his own blog devoted to developing a Serious Medicine Strategy.

If I understand Pinkerton, his argument is essentially: it’s all well and good for some unelectable wonk in the “citadel of libertarian thinking” to “uphold ivory-tower free-market purity” by opposing price controls.  But Republicans need “art-of-the-possible solutions” to win elections, and 90 percent of the public support those price controls.  “Everyone has a right to his or her principled position,” Pinkerton writes, “but the majority has rights, too.”

Two problems.

First, Pinkerton suggests that libertarians oppose price controls for reasons that only matter to libertarians, and therefore may be safely ignored.  Problem is, price controls hurt people.  Were Pinkerton to explore the merits of Jindal’s proposal, he would soon conclude that imposing price controls on health insurance taxes the healthy, reduces everyone’s health insurance choices, and creates even greater incentives for insurers to shortchange the sick.  (Turns out that what Larry Summers said about price controls applies to health insurance, too.)  As John Cochrane explains, those price controls also block innovative products that would provide more financial security and better medical care to the sick.

But Pinkerton’s advice for Republicans is, essentially: “Do what’s popular now, even if it hurts people and voters end up blaming Republicans for it later.”  How is that a good strategy?

Second is this idea that “the majority has rights.”  Majorities don’t have rights.  Individuals have rights.  For example, you have the right to negotiate the terms of your health insurance contract with the individuals at this or that insurance company.  Majorities may attain power, but that’s the opposite of rights.  (See the Bill of Rights.)

Finally, a couple of important odds and ends.  Pinkerton suggests it is “un-libertarian” to be “pro-life,” or to “support the police, the military, and other upholders of public order,” or to “support government restrictions on…euthanasia.”  Writing from the “citadel of libertarian thinking,” I can assure him he is wrong.  Might I suggest Pinkerton read the relevant chapters from The Encyclopedia of Libertarianism?  (The health care chapter is a page-turner!)  Also, I did not “denounce Jindal” any more than Pinkerton denounced me.  I criticized his ideas, and I respect the man.

(Cross-posted at Politico’s Health Care Arena.)

Liberals in Power

Will Saletan writes that he and his colleagues at Slate seem to be increasingly engaged in libertarian sallies at the food police and other nanny statists. “Are we becoming conservative?” he worries, wringing his hands. Not quite:

We’re what we were five or 10 years ago: skeptics and fact-mongers with a bias for personal freedom. It’s the left that’s turning conservative. Well, not conservative, but pushy. Weisberg put his finger on the underlying trend: “Because Democrats hold power at the moment, they face the greater peril of paternalistic overreaching.” Today’s morality cops are less interested in your bedroom than your refrigerator. They’re more likely to berate you for outdoor smoking than for outdoor necking. It isn’t God who hates fags. It’s Michael Bloomberg.

Yes, that’s the same Jacob Weisberg who wrote In Defense of Government and blamed libertarians for the financial collapse. Older and wiser every day.

When Saletan takes on the stretches that the fat-tax advocates have to make to justify government regulation of what we eat, he would have done well to cite Glen Whitman’s Cato paper on paternalism.

And as genuine liberals recoil in horror at the actions of liberals with power, it’s a good time to read Damon Root’s new Cato Policy Report cover story on liberals who fled “right” from the economic and constitutional malfeasance of the New Deal. Let’s hope Saletan’s “new Whiskey Rebellion” spreads beyond the pages of Slate.

HT: Jacob Grier.

Why Chile Is More Economically Free Than the United States

42-16335429In the 2009 Economic Freedom of the World Report, Chile is now #5, one place ahead of the United States.

In 1975, of 72 countries, Chile was No 71. How did this happen? The explanation lies in what I call the “Chilean Revolution,” because it was as important and transformative to my country as the celebrated American Revolution that gave birth to the United States.

The exceptional political circumstances of this period have obscured the fact that from 1975 to 1989 a true revolution took place in Chile, involving a radical, comprehensive, and sustained move toward economic and political freedom (from a starting point where there was neither one nor the other). This revolution not only doubled Chile’s historic rate of economic growth (to an average of 7% a year, 84-98),  drastically reduced poverty (from 45% to 15%), and introduced several radical libertarian reforms that set the country on a path toward rapid development; but it also brought democracy, restored limited government, and established the rule of law.

In 1998, The Los Angeles Times described the importance of the Chilean Revolution to the world:

In a sense, it all began in Chile. In the early 1970s, Chile was one of the first economies in the developing world to test such concepts as deregulation of industries, privatization of state companies, freeing of prices from government control, and opening of the home market to imports. In 1981, Chile privatized its social-security system. Many of those ideas ultimately spread throughout Latin America and to the rest of the world. They are behind the reformation of Eastern Europe and the states of the former Soviet Union today… which demonstrates, once again, the awesome power of ideas.

The role and achievements of Chile’s team of classical liberal economists is well known. They were the ones who in 1975, once the quasi-civil war was over, decided to carry out a principled, “friendly takeover” of the military government that had arisen from the breakdown of democracy in 1973 (here is my essay, published in “Society”, on that drama). Much less well-known, however, is that they were also the foremost proponents of a gradual and constitutional return to a limited democracy.

In fact, on August 8, 1980, a new Constitution, containing both a bill of rights and a timeline for the restoration of full political freedom, was proposed and approved in a referendum. In the period 1981-1989, what Fareed Zakaria has called the “institutions of liberty” were created—an  independent Central Bank, a Constitutional Court, private television and universities, voting registration laws, etc—since they were crucial for having not only elections but a democracy at the service of freedom. Then on March 11, 1990, an extraordinary event happened: the governing military Junta surrendered its power to a democratically elected government in strict accordance to the 1980 Constitution (here is my note on the restoration of democracy in Chile).

Since 1990, Chile has had four moderate center-left governments and, despite minor setbacks on tax, labor and regulation policies, the essence of the free-market reforms are still intact. The 1980 Constitution is the law of the land, and has been amended by consensual agreements among all parties represented in Congress. Not only is Chile now at the top of rankings on free trade (number 3 in the world after Hong Kong and Singapore) and transparency (less corruption that in most western European countries), but it is expected to be a developed country by 2018, the first in Latin America.

Nobel Laureate Friedrich Hayek proved, again, to have been a visionary when he stated in 1981: “Chile is now a great success. The world shall come to regard the recovery of Chile as one of the great economic miracles of our time.”

Response to Matthew Yglesias re: Uncle Sam’s $4 Million Bike Rack

In response to my criticism of the new federally-financed $4 million bike center set to open at Union Station in Washington, DC, Think Progress blogger Matthew Yglesias says:

I look forward to the day when the Cato Institute does a blog post denouncing each and every publicly financed parking lot or garage in the United States of America.

I’ll take that bait…sort of…

I denounce each and every federally financed parking lot or garage in the United States of America on non-federal property.  I’m one of those quaint individuals who recognizes that the Constitution grants the federal government specific enumerated powers.  Using federal tax dollars to finance local parking garages, lots, bike centers and racks is not one of the powers granted to the federal government.  So let me rephrase my statement from yesterday: Look, I harbor no animosity against [car drivers], but under what authority — legal or moral — does the federal government tax me in order to build [parking garages or lots] for parochial, special interests?

By the way, for an excellent study on the problems with federal subsidies to state and local government, please see my colleague Chris Edwards’ “Federal Aid to the States: Historical Cause of Government Growth and Bureaucracy.”

Here are a few additional random thoughts…

I know so-called “progressives” like Yglesias don’t lose sleep over how much money the federal government spends, but $4 million to park a hundred or so bikes?  As Chris Moody noted to me today, if bike security is the major issue, why not pay a guard $12 an hour to stand watch?bike rack

Isn’t it possible, just possible, that a bike center with even more racks could have been built for a lot less?  Isn’t that the question that people like Yglesias, who want more people on bikes and less in cars, should be asking?

I don’t see anything inherently governmental about building and operating parking garages or bike centers.  The absolutely sorriest, most poorly run parking garage system I’ve ever experienced is the one managed by the State of Indiana where I used to work.  I recall an overcrowding situation – exacerbated by lousy management – in which the solution put forward was to just build another garage.  Hey, someone else is going to pay for it so who cares, right?  I often tell people that young libertarians should spend a couple years working in the bowels of government in order to reinforce their belief system with hands-on experience.  I’m starting to think “progressives” and other unwavering fans of all-things-government should do the same.

Washington Legal Foundation Opposes GBS Deal

Via James Grimmelmann, the Washington Legal Foundation, a group known for its defense of property rights, filed an objection to the Google book deal earlier this month focusing on concerns related to those I raised in my posts earlier this week.

WLF points out that the Supreme Court has mandated that plaintiffs seeking to certify a class must make a diligent effort to notify all affected class members. According to the high court’s Shutts decision, this effort must include—at a minimum—sending a letter to every identifiable member of the class. In this case, this would mean sending a letter to every address in the US Copyright Office’s database of authors. WLF questions whether this was done; the foundation reports that it never received notification related to any of the books for which it holds the copyrights.

Now, it might be objected that this process would be prohibitively expensive. But if the class is so large that it’s impractical to notify all of its members, then the class is certainly too large to expect a judge to verify that the interests of all class members is being served by the settlement. If the class is too large to notify, then it’s too large to certify.

WLF also points out that the sprawling and heterogeneous class of plaintiffs makes it unlikely that the plaintiffs’ lawyers can fairly represent all parties who would be bound by the settlement:

For example, only those class members whose works have already been copied by Google are entitled to cash payments under the Settlement Agreement. Thus, the financial interests of those whose works have been copied diverge from the interests of class members whose works have not been copied. The former have an interest in maximizing cash payments, while the latter would prefer to see a smaller portion of the settlement pot allocated to those cash payments and a larger portion allocated to compensation for copying to be performed by Google in the future.

Another distinction among class members involves orphan works – that is, works whose owners are difficult (if not impossible) to ascertain. The owners of orphan works (who may not even know that they hold any ownership interests) have an obvious interest in ensuring that a large portion of settlement funds is dedicated to identifying the ownership of orphan works. On the other hand, the owners of works whose ownership is readily identifiable have an interest in holding down such search costs. If less money is devoted to such search efforts, a correspondingly greater percentage of settlement funds will be available to provide compensation
to them.

The point here isn’t that the amount allocated to orphan works searches is too high (or too low), or that more (or less) should be allocated to pay for previously-scanned books. The point is that a settlement involving millions of plaintiffs will inevitably enrich some plaintiffs at the expense of others. This isn’t a problem that can be solved by changing the details of the settlement. It’s a problem that can only be solved by limiting the scope of the settlement to parties whose interests are actually represented by the plaintiffs’ attorneys.

Speaking in Nashville

I’ll be giving two talks in Nashville on Tuesday, September 29.

At 5:00 p.m., I’ll speak at the Vanderbilt University Law School, in the Moore Room on the second floor, on a joint Law School-Owen Business School panel, “Drug Legalization and Emerging Economic Opportunities.”  Audience will be mostly law and business students, but it’s open to the public.

Then I’ll speak on the current political situation at an event sponsored by America’s Future Foundation and the Tennessee Policy Center at Mulligan’s Pub in downtown Nashville (117 2nd Ave N., Nashville, TN 37201-1901).   Drinking will start at 6:30, and I’ll make remarks about 7:30. You can RSVP for that event here.

I hope to see Nashville-area friends at one or both events.

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