Lemonade, Taxis, Victims and a Comment Rescue or Two

Jonathan McLeod

Jonathan McLeod is a writer living in Ottawa, Ontario. (That means Canada.) He spends too much time following local politics and writing about zoning issues. Follow him on Twitter.

Related Post Roulette

168 Responses

  1. Turgid Jacobian says:

    I agree with your logic.Report

  2. Brandon Berg says:

    As I see it, someone who buys a taxi medallion or any other government-limited asset is innocent of any wrongdoing if he hasn’t lobbied to create or preserve the limits on competition. It’s not his fault the government decided to limit competition, and he’s not hurting anyone by operating his business. Moreover, if he bought the license at fair market price, he probably hasn’t even benefitted from the rules, since the value of the privilege was priced in.

    None of this is relevant to the question of whether we should repeal the limits on competition. When you make an investment, you have to be prepared to lose money on it, no matter how great a person you are. That doesn’t mean that the government should go around screwing over investors just to raise some extra money, but it does mean that we shouldn’t let the fact that investors might lose money prevent us from ending bad policy.Report

  3. Will H. says:

    I think the real-world factor both views are missing is the pre-transition stage.
    Markets are highly reactive, and based more on psychology than rational market forces. In fact, the case can be made that some of the most irrational of human faculties (other than [ left blank as a courtesy ]), i.e. fear and geed, drive greater fluctuations in the market than alteration of value.
    And there’s usually a buzz before something big happens.
    The hammer wouldn’t fall out of the blue.Report

  4. Jim Heffman says:

    “If the market were to open up, starting a cab company wouldn’t be as easy as setting up a lemonade stand on your front lawn. There barriers to entry. There are regulations that have to be followed. There are investments that must be made and funding that must be arranged. As the established provider, the monopoly seller will still have an advantage in this newly open market.”

    Well, they’ll have an advantage in the legally-mandated monopoly market. But what if that entire *market* isn’t what consumers want? To go back to your taxi example, look at things like Uber. “opening up the market” involves more than just increasing the number of taxi licenses to infinity.Report

  5. Jim Heffman says:

    “In our scenario, the secondary seller knew that he was buying a government-enforced monopoly. He knew that the money he was planning on earning would be gifted to him by politicians. He knew that this was a privilege that the politician giveth and the politican can taketh away. ”

    It’s like when someone opens up a restaurant. They should just *know* that they were buying into a government-enforced monopoly on food preparation and service; a monopoly enforced by things like zoning laws, health code requirements about sinks and stoves and refrigerators, ADA requirements on bathroom access and door size, tax laws dictating the cost of operation.

    Aaaaaand then food trucks come along and they don’t have to worry about any of that. But, hey, the restauranteur should have *known* that it was a government-enforced monopoly, right?Report

    • Fnord in reply to Jim Heffman says:

      Well, that’s perhaps a less clear-cut case of knowing they were buying a government granted monopoly. But it’s also a less clear-cut case of someone’s exact business model getting yanked. At some level, isn’t there an assumed risk in ANY business that some disruptive innovation is going to come along and change the shape of your industry? It’s the buggy whip manufacturers again.Report

      • Jim Heffman in reply to Fnord says:

        “At some level, isn’t there an assumed risk in ANY business that some disruptive innovation is going to come along and change the shape of your industry?”

        But is it really “disruptive innovation” to exploit a regulatory loophole?

        All these electric-car manufacturers keep coming out with three-wheel car designs. This is not because three wheels is inherently better than four; this is because a three-wheel vehicle is considered a motorcycle and therefore not subject to regulations on crash safety.Report

  6. Gerry says:

    I remember the same thing happening a few years ago in Dublin. When I moved there first there were 1900 taxis in a city with just less than a million people in the area served. The number had been constant since 1979. The average wait time for a taxi at any the of day was 48 minutes and if you needed a cab after 12am, it was routine to wait more than 2 hours. Only 25% of people who called for taxis actually got one. Taxi licenses were being sold for 60-70,000 each and everyone recognized that the situation was untenable. Except the taxi lobby which fought long and hard to keep things as they were.

    Deregulation, when it occurred, did hurt some people who had recently bought into the market. However, as in Ottawa, there had been noises for years that this was going to occur and they should have known better. One group that was trotted out as being especially deserving (?) were the widows of former taxi drivers who were renting out their plates and were going to lose their only source of income. In the end, common sense prevailed and the system was deregulated with benefits for all (except for a minor cabal of plate holders). It should be said that the majority of plates were not held by individuals but by companies who regarded them as a valuable investment. Yes, the government created this problem but that does not justify its continuation.Report

    • NewDealer in reply to Gerry says:

      The taxi thing happens everywhere as far as I can tell. It happens in Dublin, New York, Ottawa, San Francisco, any major metropolitan area. Also probably most minor ones.

      Most taxi drivers are quite poor. At least in NYC. The medallions tend to be owned by large companies who lease them out to drivers at a premium. From what I’ve read, taxi drivers are lucky if they make around 30,000 a year and they also have to pay for their own expenses like gas and upkeep.

      At least in the States, companies like Uber and Lyft are trying to subvert the taxi cab medallion market. Of course those companies have their own issues of being inaccessible to people without a smart phone and a credit card because everything is app based. I don’t know if Uber and Lyft are trying to penetrate the non-American market yet.Report

    • NewDealer in reply to Gerry says:

      San Francisco has a love-hate relationship with the tech community especially if you are not directly involved with the tech community.Report

  7. zic says:

    This whole conversation reminds me of many discussions I’ve had here about jobs.

    Rent seeking for the owner’s private property rights — owning the company with some political advantage — should not be protected any more then the jobs of people displaced by advancing technology or out sourcing.

    Creative destruction doesn’t just have to apply to ingenuity, innovation, or global accounting advantages, it ought to apply to eliminating government policies that create monopolies and disrupt competition.

    And remember: there are lots of ways to gain a monopoly (or better phrased, to limit competition) through politics, that’s why it’s worth paying a professional lobbyist big bucks. I suspect the return on that salary or consulting fee is regularly far greater then anything Bernie Madoff every promised.Report

  8. Roger says:

    I agree with this completely, Jonathan. But please let me elaborate.

    The reason I was elaborating on secondary privilege is of course not that it should JUSTIFY or EXCUSE rent seeking (which is probably better called privilege seeking), but that it EXPLAINS a particularly pernicious aspect of it.

    Most complex social institutions are rigged to some extent. The various players have strong incentives to rig privileges for themselves. Often this is selfish. Often though it is not. As the games get bigger and more complex ANY given change to rules are bound to privilege some at the expense of others. For example a fair shift to require superior grade lemons (completely for the benefit of consumer safety) can result in relative winners and losers based upon the marketing strategy of different lemonaid firms.

    Then we have secondary entrants come into the market. Yes, they are entering a privileged game, but in their eyes every game is privileged. That is the way the world works, and thus they will rationally play it too.

    But the problem gets even thornier… As the rules of the game get complicated enough ANY change will tend to hurt some subset of incumbents. Thus incumbents rationally resist change. Some of them are bound to be harmed’ and there is a well known power differential between incumbents and new entrants. We see incumbents both resisting necessary change AND seeking privilege. They even hire professional intellectuals to weave complicated rationales for their rent seeking. (see economists waffle on something as obvious as minimum wage).

    Thus privilege accumulates and cements itself into the system. The system becomes more and more sclerotic and unfair over time. I believe this is built into the fabric of complex institutions. It occurs in corporations, states, markets, and so on. Libertarians and classical liberals seem to “get” this, but it does not seem to resonate as clearly to those of a more progressive nature.

    The solution is first and foremost to keep the rules of the game as simple and unbiased and unactivist as possible. Once privilege is introduced, it will tend to grow like cancer. The game play must occur wherever possible on the playing field, not in the room where rules are determined or enforced. I tried to explain this using a sports analogy last year, but just managed to infuriate Mike S.

    Second, wherever possible there must be competition at the level of rules. New entrants will rationally enter into fair and unbiased games. There needs to be some institutional competition which seeks an arms race toward an even playing field, especially against incumbents.

    Third, new instititutions need to be constantly forming to offset the inherent tendency of the old ones to decay into sclerotic privilege.

    Most importantly, we need to have a shared cultural ethos that privilege is wrong and that too much interference at the level of rules backfires into disaster. This seems obvious, but as I argued in the prior post, progressives constantly lobby for and rationalize the opposite.

    Shorter answer: nobody should have ever been given monopoly taxi medallions.Report

    • maxl in reply to Roger says:

      I haven’t read the Tainter book discussed in the link below, but I have forwarded this Clay Shirky piece many times to colleagues in the tech industry.

      http://www.shirky.com/weblog/2010/04/the-collapse-of-complex-business-models/s Clay Shirky piece many times.

      I am skeptical that any society dealing with the transition of abundance to relative scarcity can actually downsize in an orderly way when the status quo is institutionalized and sclerotic. I am guessing you are familiar with both this short piece and the original source material, but it’s still a good link to add to the thread.Report

      • Roger in reply to maxl says:

        I read Tainter’s book. I found it worthwhile, but I think he was a bit simplistic in his complexity self amplification. I heard him on a radio interview on his views subsequent to the book, and found his perspective had advanced quite a bit.

        My view is that complexity self amplifies and so does privilege seeking, incumbency protection, internal exploitation and so forth. Sclerosis. Eventually we jump to a new institutional set, as the prior one is a total mess.Report

    • BlaiseP in reply to Roger says:

      Progressives have always opposed monopolies, going back to the era of Theodore Roosevelt. It’s been the Classical Liberals and the Libertarians, who, despite their much-talking about Competition and other such notions, have opposed trade reforms,

      Jobs outsourced to other countries without labour laws? That’s just fine, we’re told. In fact, it’s wicked old Gummint Regulations which cause the problem: we could easily create more jobs. When it comes to the Freedom to Oppress, I have yet to see a Libertarian who sees oppression arising from any other quarter than government.

      Austrians claim monopolies are impossible without governments to create and maintain them. From this, we may infer price fixing, turf wars and cartels are equally impossible, though they appear everywhere government doesn’t intervene. In point of fact, competition only arises where government can attenuate barriers to competition.

      Privilege does grow like a cancer. Cancers have three characteristics: they are immortal and won’t obey shutdown commands. They are metastatic, able to slough off migrant cells to take up home elsewhere. And they’re able to summon up a blood supply for themselves. Privilege is always unearned: old tumours do not enter sclerosis: they’re some of the most robust cells in nature.

      It’s been the progressives who’ve diagnosed this problem from its beginning. Yes, governments have the power to shut down lemonade stands, using ordinances against the selling of food and suchlike. If government abuses its powers, it abuses them to private ends. That’s the part the Classical Liberals never quite understood, still don’t.Report

      • Blaise,

        I’m probably in a minority among those who study the “progressive era,” but I have a hard time discerning any identifiable group that can be called “progressives” in the early 20th century, unless we’re talking of the “progressive” parties or self-identified “progressive” factions in the GOP and Democratic parties. And even then, I have a hard time finding a lot of common ground among them.

        In my view, they–assuming we can identify a “they”–were all over the map when it came to curbing “monopolies” (or even defining what counted as a “monopoly” or “trust”) and when it came to enforcing free(er) competition. Even TR (and even in his 1912 campaign) seems, to me, to have been more willing to reach an accommodation with the “trusts,” by allowing them their privilege but subjecting that privilege to governmental oversight. I think Wilson had a similarly con-, but pro- view of monopolies, at least in practice.Report

        • BlaiseP in reply to Pierre Corneille says:

          The Progressive agenda lives in in outfits such as Center for American Policy and Congressional Progressive Caucus.

          Very few monopolies survived the Clayton Act. Major league baseball was the only one I can think of at the moment. Perhaps a few such instances of allowing the “trusts” their privileges might clarify what you’re implying.

          At any rate, the rest of my comment stands.Report

          • This might become one of those conversations where I press you to find a discrete progressive movement in the early 1900s, and you say that “the Progressive agenda” is alive and well now. In other words, we’ll end up talking past each other on that point and I’ll just say that you’re right.

            I have a hard time seeing how “very few monopolies survived the Clayton Act.” Do you mean that very few of the monopolies that were prosecuted survived prosecution? Do you mean that businesspersons were so intimidated by the law that they almost never tried to restrain trade after 1914? What about subsequent revisions to antitrust that allowed or seemed to tolerate cartel-like behavior? (You mention MLB, but you could also have mentioned the National Recovery Administration, much of the FTC’s experimentation in the 1920s and, later, its role as de facto approver of mergers, such laws as Miller-Tydings and Robinson-Patman, or court cases like Colgate or Leegin)

            How are you defining monopoly here? Restraint of trade? Cartel behavior? Big corporation that dominates market through “unfair” means? Big corporation that dominates market through fair means but exerts what some consider an anticompetitive effect?Report

            • BlaiseP in reply to Pierre Corneille says:

              This might become one of those conversations where I press you to find a discrete progressive movement in the early 1900s, and you say that “the Progressive agenda” is alive and well now.

              It might, if either Teddy Roosevelt or Louis Brandeis’ existence were in doubt.

              I have a hard time seeing how “very few monopolies survived the Clayton Act.” Do you mean that very few of the monopolies that were prosecuted survived prosecution?

              Yes. Standard Oil did not. Northern Securities did not.

              Do you mean that businesspersons were so intimidated by the law that they almost never tried to restrain trade after 1914?

              Clayton Act arose in response.

              What about subsequent revisions to antitrust that allowed or seemed to tolerate cartel-like behavior?

              Which such cartels arose? National Recovery Act was ruled unconstitutional in 1935. Wagner Act arose in response, as Clayton Act had clarified the Sherman Antitrust Act. Colgate only governed resale price, not Sherman and Clayton Act price fixing, still illegal.

              Both Sherman and Clayton Acts remain in effect, subsequent case law notwithstanding. Both are the direct result of the Progressive movement.

              How are you defining monopoly here? Restraint of trade? Cartel behavior? Big corporation that dominates market through “unfair” means? Big corporation that dominates market through fair means but exerts what some consider an anticompetitive effect?

              I invite you to read the Sherman and Clayton Acts for yourself, especially Section 2 of Sherman, which governs.Report

              • “It might, if either Teddy Roosevelt or Louis Brandeis’ existence were in doubt.”

                Yes, I guess we are talking past each other. Sigh. Brandeis and Roosevelt may have both been technically republicans, but they had very different views of competition. And they sided with different people in 1912: TR with himself, Brandeis with the Democratic contender.

                Northern securities and Standard Oil fell before Clayton was even passed. Well, northern securities fell. Standard oil just got broke up into regional monopolies.

                “Colgate only governed resale price, not Sherman and Clayton Act price fixing, still illegal.”

                It modified and distinguished a rule devised against resale price fixing, and that rule had arisen in a court case under the Sherman Act.

                “I invite you to read the Sherman and Clayton Acts for yourself, especially Section 2 of Sherman, which governs.”

                I invite you to read the decades worth of jurisprudence that tried to figure out what the heck those two acts mean by “monopoly.” I haven’t actually read them all (and perhaps not a representative sample, either) myself. So you’d have leg up on me.

                You’re right about NRA and I even agree with you that Wagner Act arose in response (at least partially….it was in the works before the NRA got its death blow). Can I name any cartels? It’s hard to do, because cartels don’t identify themselves as cartels when cartels are illegal. What about the permissions on newer restraints of trade from FTC experimentation in the 1920s, its later role as de facto approver of mergers, and such reforms as Miller-Tydings and Robinson-Patman?

                I guess I have to give you props for that one and resort to the quasi-negative argument of “if monopolies didn’t survive the Clayton Act, why have there been so many antitrust prosecutions afterward? (If it was so effective, why would it need to be invoked repeatedly?)” I probably am committing a fallacy here.

                “Both Sherman and Clayton Acts remain in effect, subsequent case law notwithstanding. Both are the direct result of the Progressive movement. ”

                But how do you define “progressive movement”? I have a hard time discerning anything that can be called a “movement” in the early twentieth century. And Sherman was passed in 1890. Perhaps there was something like a “progressive movement” that early, but that’s not the standard story. (Of course, just because that’s not the standard story doesn’t mean you’re wrong.)Report

              • BlaiseP in reply to Pierre Corneille says:

                Years ago, when Microsoft was in court on antitrust charges, I started debating with one of the cleverest men I ever met on NYTimes fora, well, it wasn’t one, it was a pair of them, writing under a single shill sockpuppet identity. They knew Microsoft API internals and antitrust law. I believe I ran him, or rather, them — to ground, in fact I’m sure I did. Confronted, neither wrote me back to deny it. I am not a nice guy. But then, neither were they.

                Learned an awful lot about antitrust law from those guys. Here’s the basic problem: markets only work when they’re efficient in an optimal Pareto sense of efficiency, Kaldor-Hicks, et. al. But competitors don’t like to compete when they can collude or rig bids or otherwise create market distortions. Some of these fucks, notably Microsoft, gave their competitors no quarter and killed them outright: the true story of Nathan Myhrvold and the rise of Windows is a truly cautionary tale.

                I have read the jurisprudence. I’ve read every page of the Microsoft cases, both in the US and in Europe. I’ve read the Standard Oil cases. I’ve read the AT&T cases, Nixon and ITT, Alcoa, Lorain Journal, Griffith, Schine Chain, Jefferson County Pharmaceutical both cases, one on pricing the other on tying, Brunswick — I might not be a lawyer but I haven’t met many people who’ve paid this much attention to antitrust as I have. Don’t condescend to me about reading the jurisprudence. I invite you to also read Posner on Antitrust: I did.

                A monopoly only runs afoul of the law when it acts like a monopoly. If you want to take this up seriously, I’m more than willing to do so. Antitrust cases continue to emerge for the reasons outlined above: competition is hard and collusion is easy.Report

              • Stillwater in reply to BlaiseP says:

                competition is hard and collusion is easy.

                Man, ain’t that the truth.Report

              • BlaiseP in reply to Stillwater says:

                Now, if only we could get these Libertarians to ever admit the obvious. They won’t, of courseReport

              • Stillwater in reply to Stillwater says:

                Well, I don’t know about that. I think they’d say that the deleterious effects of collusion in the absence of government regulation are less bad than the deleterious effects of gummint trying to prevent collusion. That’s an empirical argument, it seems to me (so … no apriorism allowed!). But even then, it seems to me that reasonable libertarian would concede that some regulatory/statutory restrictions on collective profit-seeking behavior are warranted.Report

              • Stillwater in reply to Stillwater says:

                To follow up on that…

                I mean, look: most libertarians think that the way (the only way? the best way?) to eliminate regulatory capture is to eliminate gummint. And that’s precisely what leads to the claims of strawmen and lack-of-charity and so on. When I first came to the LoOG, the prevailing position was that the antidote to regulatory capture was to dismantle regulatory apparati. So the view – at least in terms of my experience here at the League with what are identified as “reasonable Libertarians” – is not a strawman.Report

              • BlaiseP in reply to Stillwater says:

                I do know about it. Three solid years of fighting on this subject force-marched me through Sherman and Clayton and Hart-Scott-Rodino and never a break did I get along the way. I have been told more lies, fended off more FUD — want to know where I got so goddamn vicious toward Libertarians? NYTimes Microsoft as Monopoly forum.

                Antitrust is difficult law. It’s a difficult case to make, even more difficult to get a conviction. I don’t have to wonder what Libertarians would say — I know what they said then and I know what Cato’s saying about it now. And not one of them has a good thing to say about antitrust legislation. Quite the contrary.Report

        • Barry in reply to Pierre Corneille says:

          “Even TR (and even in his 1912 campaign) seems, to me, to have been more willing to reach an accommodation with the “trusts,” by allowing them their privilege but subjecting that privilege to governmental oversight. I think Wilson had a similarly con-, but pro- view of monopolies, at least in practice.”

          Given their power, even that would have been an massive improvement.Report

          • Pierre Corneille in reply to Barry says:

            Perhaps, although I’m skeptical that the “trusts” were as powerful or as easily definable as the rhetoric from that time might suggest.

            But TR’s accommodationism was a far cry from the free(er) competition that in Blaise’s account supposedly reigned among “the progressives.”Report

      • If government abuses its powers, it abuses them to private ends. That’s the part the Classical Liberals never quite understood, still don’t.

        I don’t think this is right. It seems to me that one of the principal criticisms from classical liberalism is that government enables the abuse of power to private ends. That seems to be Adam Smith’s argument against mercantilism, and it seems to be the modern-day libertarian’s argument against regulation-qua-something-that-can-enable-capture.

        Or perhaps I’m misunderstanding your point?Report

        • Brandon Berg in reply to Pierre Corneille says:

          At the risk of implying that he actually has a point, I think that he’s saying that government abuses power to private ends, as opposed to government abuses power to private ends.Report

          • Stillwater in reply to Brandon Berg says:

            Yeah, that’s the way I read it too. You have to amPHAsize the right syLLABle.Report

            • BlaiseP in reply to Stillwater says:

              At the risk of implying someone might actually have critiqued what I said, over and against which Syllable I might have Emphasised, I do attempt in my own feeble and inept manner, to logically construct comments and paragraphs. Let’s summarise:

              Governments can shut down lemonade stands. Health departments can also shut down entire grocery stores, force recalls, many another wise and non-abusive use of its powers.

              Presuming some folks around here are capable of parsing an English sentence, let’s review the form of that Troublesome Sentence:

              Government’s powers ought to be used in the enforcement of laws, independently of persons. Abuse can be defined as a misuse of power, either in a failure to enforce a law for the benefit of a specific person or enforcing it upon a specific person to the exclusion of a cabal of others, digging up some obscure statute to keep some Unwanted Entity at bay.

              There is no risk of anyone around here conceding I have a point. That would presume they’re actually reading what I write, not what they think I’m writing.Report

              • I agree with your second to last paragraph here.

                However, that might be cold comfort to you given my deficiencies in understanding the English language and my apparent inability to parse a sentence. After all, I’ve only been at this “English” business for about 38 or 39 yeas. But never fear! I’m working hard to understand.

                And I’ll add–if someone as lacking in sentence-parsing skills as myself be not regarded impertinent for doing so–that your second to last paragraph seems to be very close to the point of my comment (at 6:53 pm) you were responding to.Report

              • BlaiseP in reply to Pierre Corneille says:

                The sentence could not be clearer. Government abuses its power to private ends. By every definition of Austrian economics, markets are self-organising and lead to optimal outcomes, left to their own devices. If those outcomes include monopolies, price fixing, shoddy and dangerous goods, the markets shall solve all our problems: we don’t need more regulation, we need less. I conclude we are asked to divest ourselves of the polite fiction of the puppet government and accept the naked fist of the puppeteer.Report

              • If you have to say “[t]he sentence could not be clearer,” it’s possible that it isn’t as clear as you might think, unless you’re assuming bad faith or incompetence among your interlocutor(s).

                At any rate, peace out!Report

        • BlaiseP in reply to Pierre Corneille says:

          You have revealed the nut of the classical liberal fallacy. What did mercantilism do? It responded to competition with tariffs. But it did so on behalf of established interests. The Libertarians haven’t even gotten as far as Adam Smith, still preaching their Gold Bug nonsense. Their viewpoints only see the actions of the government, not the private interests with their hands up the government’s fundament, wiggling its jaws.

          Tariffs still remain a viable response to dumping, still an ongoing problem.Report

          • Where’s the fallacy? I think many (most?) libertarians would agree with you about the origin of mercantilism and tariffs, or at least be sympathetic to the claim that those tariffs protected established interests on behalf of those interests.

            Some might even be on board with anti-dumping provisions when dumping can be established (their burden of proof might be higher, and some might not be on board at all….Perhaps I’m venturing too far here).

            Goldbuggery? They’re not all Ron Paul. Some are, but not all.Report

          • Jaybird in reply to BlaiseP says:

            Their viewpoints only see the actions of the government, not the private interests with their hands up the government’s fundament, wiggling its jaws.

            There are a number of complaints about “capture” above, ftr. Or below. One of those.Report

            • BlaiseP in reply to Jaybird says:

              Then wherein lies the Libertarians’ complaint? Where are the cries of outrage about a Free Market reaching its terminus in the By-Us For-Us regulators? You may not have it both ways: clearly The Wicked Ol’ Government has enough power to hold those pesky corporations at bay and actually regulate them. Why doesn’t it?

              The Libertarian seems to be yelling at the puppet, like so many children at the Punch and Judy show.Report

              • Jaybird in reply to BlaiseP says:

                Why doesn’t it?

                Because it’s been captured?Report

              • Stillwater in reply to Jaybird says:

                Heh. {{That was easy.}}Report

              • BlaiseP in reply to Jaybird says:

                That’s hardly an answer in any meaningful sense. It’s the last few paragraphs of Animal Farm: when you can’t tell the pigs from the men, you know you’re in trouble. When the regulators and the regulated can’t be distinguished, let us have none of this nonsense about the Efficacy of the Free Markets from the Libertarians. Want free markets with real competition? (spreads arms high above his head like some wild-eyed Pentecostal preacher) The skies have parted and angels from the Austrian Paradise beckon.

                Dream on. Libertarians have never once condemned anyone but the government on this front. Banana Republicans, every one of them.Report

              • Jaybird in reply to BlaiseP says:

                My solution for corporations remains easy: don’t buy their crap and, if they fail, LET THEM FAIL. Let someone else buy the pieces for pennies on the dollar. Maybe they’ll be able to do something useful with them.

                The places where I think the government can do the most good is with stuff like anti-SLAPP legislation and protection of such things as First Amendment rights of journalists. I know, it is to laugh.Report

              • BlaiseP in reply to Jaybird says:

                Jaybird, you’re a great guy, thoughtful, really about as good as they come in terms of classical liberalism. I have such tendencies myself. But opting out isn’t an option, not in the real world. Regulatory capture is a contradiction in terms. Once captured, there’s no regulation. And furthermore, there’s no market.

                Want markets? Want competition and all the niceties of life, including success and, yes, failure? You’re going to have to accept regulation on those things. Without that regulation, there’s no confidence in anything you’re buying. There’s no competition.

                All the things the Classical Liberal wants out of life, minimal government and the like — he wants all the good things brought on by the Industrial Revolution but he won’t accept that capitalism is amoral and requires more regulation as it gains more power. I’m not laughing when I say you really don’t have an option to not buy their crap. If you have an option, that’s because competition gave you the option to buy something else. Competition is worth preserving in law.Report

    • Pierre Corneille in reply to Roger says:

      As the rules of the game get complicated enough ANY change will tend to hurt some subset of incumbents. Thus incumbents rationally resist change. Some of them are bound to be harmed’ and there is a well known power differential between incumbents and new entrants. We see incumbents both resisting necessary change AND seeking privilege.

      Even though, or because, I agree with this is, paradoxically, one reason I do not fully endorse what I understand to be libertarianism. I think the micro-exchanges and organic development of any society erects a very complicated set of privileged relationships that people buy into (or are denied) in a very intractable sort of way. And I think it’s hard to wipe the slate clean by simply chipping away at privilege or rent-seeking.

      That doesn’t mean we ought not to do some chipping away. Ottawa’s taxi plate system seems like a bad idea and I think things would be better if Ottawa ended it. You could probably cite numerous examples everywhere. But I don’t see the freeing up of competition as an identifiable “thing” that can be done, even if I’m likely to endorse many such projects on a case-by-case basis.

      I’m not trying to bait all libertarians as minarchists, either. I respect the “marginal libertarianism” outlook. But I do think (perhaps in partial agreement with the marginal libertarians) that privileges are so ensconced in society, it’s hard to disagregate them and establish a free-floating “freer economy.”

      I hope what I’m saying is not too confusing. (I’m confused.)Report

      • Stillwater in reply to Pierre Corneille says:

        {{Man, youi’ve been hitting outa the park on this thread.}}}

        I’d say it isn’t confusing, but that might be because you’re confusion about this matches exactly onto my worries.Report

        • Thanks, Still. If some day I ever write a general critique of libertarianism, it would probably be somewhat along those lines, but I do fear wandering over into straw man territory on the one hand, and falling into a blathering incoherence on the other.

          I think I need a beer!Report

        • Roger in reply to Stillwater says:

          I think “chipping away” sounds great.

          “But I don’t see the freeing up of competition as an identifiable “thing” that can be done, even if I’m likely to endorse many such projects on a case-by-case basis.”

          Tell me more, Pierre. Seems that placing value on competition and a level playing field is a higher level, albeit abstract, “thing” that is important as we attempt to move forward. Said another way, there are strong arguments that what separates more functional from less functional societies are the ethos, paradigms and world views shared by the participants. I think our views on the role and nature of constructive competition are part of this critical worldview.Report

          • Pierre Corneille in reply to Roger says:

            Roger,

            Unfortunately, I don’t have an answer and I’ll have to rethink all this. Deep down, I do agree with you that some societies are more functional than others, and that that functionality somehow relates to “the ethos, paradigms and world views shared by the participants” and that “the role and nature of constructive competition” play an important role.

            I might disagree with you on the specifics, especially what makes competition “constructive,” but even then, I suspect we’re probably in close agreement on a lot of things.

            I *think* I’m saying that while there are better ways and worse ways to run/manage/experience/participate in a society (or economy or whatever), which is better and which is worse is not always easy to discern, and even steps taken toward the better sometimes come with costs and people who lose out through little fault of their own. (Perhaps that’s what’s motivated your original comment about how rent-seeking can become so pernicious in the case of the lemonade monopoly. Not that you’re defending the second-hand monopolist, but that you’re illustrating how quickly such rent-arrangements can take deep root.)

            By the way, I’m sorry I missed you all at Leaguefest. It was a combination of me being too busy, too lazy, and too shy with large(ish) groups of people. Do you make it down into the city often? If so, maybe we could meet up (I work not far from the Loop).Report

            • Roger in reply to Pierre Corneille says:

              Yeah, we had a fun time yesterday at the Leaguefest. Great people.

              I would be happy to drive down to the city to meet up for lunch. I’m heading out of town surfing again for most of the month, but would absolutely love to meet up any time in July. Let’s make it happen.

              I am fascinated in the topic of competition and how it relates to the underlying problem at the heart of this post, namely the nature of harm. Competition can of course be very destructive and harmful, but, when structured properly, it can be creative and constructive. The devil of course is in the details..Report

              • Pierre Corneille in reply to Roger says:

                Cool. You probably have my email from the leaguefest mail list. I’ll contact you through there. (Were you the one who just sent a photo of you all?)

                I might not be able to meet until August or so because I’ll be out of town for half of July.Report

  9. maxl says:

    A good friend of mine runs a couple of large barber colleges here in California. Matt Yglesias has convinced me that this pet rock of his is a great example of arbitrary rules put in place to limit competition where the market could easily determine the value of any particular barber. I have to admit to having an inward chuckle when my friend complains about the state constantly auditing him for trivial compliance issues. Apparently these audits have become doubly oppressive ever since his students became eligible for state student aid to pay for his school’s tuition of $6000. State/taxpayer funding of a state mandated limit on barbering competition is, apparently, highly regulated. Go figure that, eh?

    After a few beers, I have told him that my sympathy for his predicament is pretty low – he would have no business at all if the state didn’t place this weird licensing restriction on barbering in the first place. My friend is usually an even handed and thoughtful man even if I am an ass, but those conversations don’t go well. They sort of prove the truth of Sinclair’s old saw, “It is difficult to get a man to understand something when his salary depends upon his not understanding it!”Report

    • Marchmaine in reply to maxl says:

      It all starts with one improperly placed leech.Report

    • NewDealer in reply to maxl says:

      The way I see it is:

      1. What is the purpose of a particular regulation?

      2. Does the good of the particular regulation outweigh any negative costs, side effects, or externalities?

      I think most of these debates are often on these issues and what people see the regulation is for. I think health and safety regulations are perfectly legitimate use of government authority and these are broad.

      Matt Y and a lot of neo-liberals like to complain about how licensing regulations against aesthecians (sp?), dental hygenists (including needing to be teamed with a dentist), and others are bad because most of these positions are filled by working-class women and it suppresses their wages.

      I am willing to concede that this might be true but I don’t think the direct purpose of the regulations are to be against working class women. Dental cleansings can be deadly if a person has a heart-murmur or other cardio condition. IIRC these people need to take antibiotics before getting their teeth cleaner or they can die from the germs and grime falling into their blood stream. There was a singer or actor who died this way either Edie Fisher or Perry Cuomo, I can’t remember which one.

      Likewise, aesthecians apply wax and chemicals to people, they should be trained and regularly tested to make sure negligence does not happen.

      So a lot of these battles are the back and forth between what is the purpose of the regulation and whether the negative things are worth the regulations. Neo-liberals and libertarians often seem to think no. Liberals are a mixed bag of yes and no.

      Artificially low limits on taxi medallions are bad but I can see a good reason to want to avoid congestion and traffic by giving them to all comers. Especially because of environmental issues and wanting to encourage the use of public transportation.Report

      • Concerning dental hygienists: I agree.

        Concerning aestheticians (I, too, am unsure of the spelling), I guess it depends and I would need to know more about them. What it depends on is how closely tailored to the goal of safety regulations of aestheticians actually are. And I don’t know the answer.

        Concerning medallions: in the abstract, I think you have a point. But I also suspect the sticking point when it comes to lessening pollution or protecting the environment, and encouraging use of public transit is usually not the taxi system. I suspect (again, here I am in ignorance) that more pollution is emitted by long commutes from the outer to the inner city and not by taxis. I stand to be corrected, and my impression of taxis is that they’re “always” running (again, it’s an impression….I don’t know much about taxi work).

        For public transit, I imagine a not insignificant number of people would prefer to use public transit if it were more convenient or perhaps cheaper. One way to make it “cheaper,” I suppose, is to make alternatives like taxis more expensive (e.g., through a medallion system), but that strikes me as relying on a causal chain that is hard to pin down. I’m not saying medallion systems would be irrelevant to such goals, just that the effectiveness of such a system in encouraging mass-transit use is hard to gauge.

        One point where I see a stronger connection would be in medallion systems regulating congestion. Even there, though, I wonder if that’s the type of thing the market might not sort out. Perhaps you can justly accuse me here of adopting the same sort of hard-to-pin-down causal chain I criticize in the preceding paragraph. But when I think of inner-city congestion, cabs strike me as only part of the picture.Report

  10. Kolohe says:

    One doesn’t have a ‘right’ to a business model.Report

  11. Jaybird says:

    There are a lot of ways to enact barriers to entry to the market. Some of them even present as “perfectly reasonable”. Ahem:

    A Taxi Medallion Spokesperson explains that it’s very important to make sure that Your Taxi Specialist has received Official Taxi Specialist Training. Would you want to ride in a taxi where the driver hasn’t received this training? Would you want *CHILDREN* to ride in such a taxi???

    The Medallion ensures that your children will be safe. There are umpteen kabillion accidents every day. Don’t get into a cab that is likely to be one of them!

    This game is played with more than just taxis… they’re licensing people who braid hair or advise on interior design.Report

    • Brandon Berg in reply to Jaybird says:

      Would you want to ride in a taxi where the driver hasn’t received this training? Would you want *CHILDREN* to ride in such a taxi???

      As I’ve said before, populism is the handmaiden of cronyism. Cronyist regulations and subsidies are almost always sold to the public on populist grounds. This regulation protects the people from predatory or incompetent businesses. This subsidy will create jobs. Green jobs! We need to protect our industry—our jobs!—from cheap foreign competition.Report

      • LWA in reply to Brandon Berg says:

        So is the reverse true?
        Can we just assume that any regulation with the public good as its goal is inherently bad?

        Or is there some more careful way to assess the benefits and costs of policy?Report

        • NewDealer in reply to LWA says:

          ConcurredReport

        • greginak in reply to LWA says:

          Sure there might be a way to determine if a reg is good, but its much easier to go with the generic libertarian comment.Report

        • Jaybird in reply to LWA says:

          Seriously: look at how powerful that bait is. In a discussion about privilege using the government to entrench itself further, all it takes is pointing out one of the big arguments privilege uses to change the topic from “entrenched privilege” to “well, we have to regulate things, lest children die.”

          Entrenched privilege isn’t saying these things because it believes them: It’s saying these things because it knows that *YOU* believe them.Report

          • Stillwater in reply to Jaybird says:

            “Nothing appears more surprizing to those, who consider human affairs with a philosophical eye, than the easiness with which the many are governed by the few; and the implicit submission, with which men resign their own sentiments and passions to those of their rulers.”Report

          • LWA in reply to Jaybird says:

            Are you arguing that we don’t have to regulate things?

            Or is this going to be yet another session where after a hundred posts you exclaim “But of COURSE we need to regulate things! I have always said that!”Report

            • Jaybird in reply to LWA says:

              Dude, I’m a white male with entrenched privilege. The more regulation, the more entrenched my interest. On top of that, I even have people on the left (THE LEFT!!!!) protecting my entrenched interest for me against those who would remove it. On top of that, I can get them to argue that a *LOOSENING* of these regulations would be an effective *REMOVAL* of these same regulations.

              And I don’t have to do anything but point at the kids I don’t have to do it.Report

              • Stillwater in reply to Jaybird says:

                Dude, I’m a white male with entrenched privilege. The more regulation, the more entrenched my interest.

                Does the second sentence follow from the first? It seem to me like it doesn’t. The first sentence talks about cultural privilege. The second refers to legislatively imposed regulation, which I guess you’re using as a marker for the word “privilege.”Report

              • Jaybird in reply to Stillwater says:

                To what extent is someone with a great deal of cultural privilege likely to navigate legislatively imposed regulation better than someone with fair-to-middlin’ levels?

                Who do you think knows more lawyers? Who do you think will be more likely to know a guy who knows a guy?

                Hell, let me give an example from my own life when it comes to working with the government: The Fiance Visa. I’m sure you’ve heard the story ad nauseum so I’ll just point out that I called my congressman’s office and talked to the INS liaison and we worked through the paperwork and got my wife-to-be here like clockwork. Now, I’ve had it pointed out to me that that particular story betrays a buttload of privilege.

                How easy would it be for me to argue “hey, I went through the proper channels! I followed the rules! I did what I was supposed to!”?

                In the same way, cultural privilege perpetuates itself and this degree of licensure (and certainly the egregious medallion program) is perpetuating the cultural privilege. And if I were someone who was deeply invested in maintaining that cultural privilege, I would argue that licensure is keeping people safe. It’s keeping them from being killed in car accidents. It’s keeping them from getting diseases. It’s keeping them from dying.

                Let’s say that I made that argument: is it really *THAT* unreasonable to think that people (even with the best of intentions!) won’t line up to help me keep my cultural privilege going strong?Report

              • Stillwater in reply to Jaybird says:

                I think the hypothesis you’re working under here is that government is necessarily a reflection or instrument of entrenched privilege. But I think the history of social progress in the US – at the legislative level! – undermines that hypothesis.Report

              • Jaybird in reply to Stillwater says:

                In every single case, without exception? Of course not.

                When it comes to the creation of barriers to entry into the market? I think the safe money is usually on regulatory capture.Report

              • Stillwater in reply to Stillwater says:

                So, you’re conceding that it’s not a fully general complaint against gummint?

                That’s enough for me. But I always wonder why you don’t phrase things this narrowly at the beginning of a discussion rather than at the end. (???)

                Politics.Report

              • Jaybird in reply to Stillwater says:

                Because I despair that the conversation becomes one of “do you agree that there is at least *ONE* reasonable regulation out there?” when it seems to me that the interesting point is how easy it is to capture regulation by making noises about how many people you’d be protecting thereby.

                Heck, how long was it between my pointing that out and accusations of preferring anarchy showed up?Report

              • Stillwater in reply to Stillwater says:

                Man, I feel bad about your despair. Would you gain any comfort knowing that you’re not alone?Report

              • Jaybird,

                I think I see where you’re coming from, and I think I agree, at least in the broad brush strokes.

                But I also believe that society is emmeshed in different forms of privilege, and the question of “whether regulation dismantles privilege or entrenches it” ought to be replaced by “in what ways does the regulation under discussion dismantle privilege and in what way does it entrench it? and for whom?”

                I think there’s a tendency in libertarianism to postulate an ideal state in which no privilege exists and each individual is an autonomous entity. I’m not saying libertarianism believes that ideal exists or can ever be completely realized (the non-whacko libertarians live in the real world), but it seems predicated on the notion that there exists state-enforced privilege and all that needs to be done is chip away at that privilege and get us closer and closer to that ideal (if never fully realizable) situation of no state-enforced privilege.

                This is, I think, one reason I cannot fully sign on to libertarianism, because I think we’ll always have messy inter-enmeshings of privilege. That’s not to say I disagree with the practicalities of your point: i.e., regulations and rules and licenses tend to benefit the people who already enjoy a fair amount of privileged access to complying with them and give the privileged people a leg up against the lesser privileged people.

                This is the spirit of the comment I offered above (at 1:38 pm).Report

              • Thanks, Pierre. I’m not really pushing for an ideal state in which no privilege exists. (I’m one of those who sees some kinds of privilege as non-zero sum… and I do my best to provide this sort of privilege to my nephews as best I can. Books, books, books, music, and books.)

                I’m just frustrated at the ease in which capture is possible (quickly followed by frustration at the quickness with which this capture is defended).Report

              • Jaybird,

                I don’t really mean to mischaracterize your (or others’) position. And I’m on board in general with your critique of “how regulation often works.” I’m also on board with the notion (which I assume you agree with) that some regulatory regimes/statist regimes are more just (or less unjust) than others.Report

              • LWA in reply to Jaybird says:

                So regulations are bad.

                Only 97 more posts to go.Report

              • NewDealer in reply to Jaybird says:

                How do the Civil Rights Act of 1964, the Voting Rights Act of 1965, the Environmental Protection Act, and the Clean Water Act, benefit you while damaging the rights of minorities?Report

              • Jaybird in reply to NewDealer says:

                Wow. You only had to go back 50 years to get four really good examples of really awesome laws.

                How many years do you think I’d have to go back to get four laws that would make excellent examples for my position?Report

              • greginak in reply to Jaybird says:

                Lily Ledbetter act was also good. National Parks rock…if i took a few minutes i could come up with quite a few more recent acts. And getting rid of lead in gas was in the 70’s.Report

              • Stillwater in reply to Jaybird says:

                How many years do you think I’d have to go back to get four laws that would make excellent examples for my position?

                But here’s the thing Jaybird. Your position is offered as an analysis of government. If that’s the case, then any single legislative act inconsistent with your view constitutes a counterexample and suffices to refute the analysis. If you’re not offering an analysis but a cautionary-tale type thing instead, then you can cite stuff all the way home and make your point. And most liberals wouldn’t disagree with you about lots (not most!) of your examples.Report

              • Jaybird in reply to Stillwater says:

                Let’s just hammer this out: You get to argue against me as if I am arguing for anarchy and it’s unfair of me to argue against you if you support the laws as they exist because of course there are excesses and no one has ever argued that there aren’t.Report

              • Stillwater in reply to Stillwater says:

                I think you’re conveniently missing the point I made. Since you conveniently (??) didn’t respond to it.Report

              • Jaybird in reply to Stillwater says:

                Well, let’s see if I can instead bite the bullet.

                I think we can agree that the laws that are passed that overrule other laws that have been passed are not the best example of government not screwing up. It shows that the government has a capacity for self-correction, sure… but if Law B overrides Law A, it’s an example of Law A being a problem.

                As for the EPA and CWA, if I can find a couple of examples of these guys handing out waivers to some and denying them to others, would you agree that they are examples of what I’m talking about rather than counter-examples? Think I can find some examples of waivers for these?Report

              • Stillwater in reply to Stillwater says:

                Jaybird, I’m not disagreeing that there are examples of what you’re talking about. I’m pointing out that even if those examples exist, they don’t constitute an analysis of government (tho they support that analysis). And what you’ve been offering is an analysis. Hencethereforeergo, any example inconsistent with that analysis refutes it.

                Is your complaint that government policy can and sometimes does impose rent-seeking, liberty-constraining, special-interest-catering, privilege-preserving, liberty-undermining, coercive laws? If so, I won’t object.Report

              • Jaybird in reply to Stillwater says:

                Well, of course there are examples of the government doing good things and passing good laws that help people and are mostly good.

                I think I’ve figured out what my main argument is: Just as governments can be captured, ideologies can be.

                And, before we go there, I’m sure you can point to examples where libertarianism was captured by Corporatism in the past and you won’t even have to go that far back.Report

              • Stillwater in reply to Stillwater says:

                Just as governments can be captured, ideologies can be.

                An “ideology is the enemy” type thing perhaps?

                I can think of two ways your claim might be true. I wonder what you mean by it tho. Especially in the context of this thread. It sounds interesting.Report

              • Jaybird in reply to Stillwater says:

                I don’t think ideology is the enemy. I mean, necessarily. When Ideology is blind to What Actually Happens, it tends to be bad.

                That’s not where I was going with this, though. I was just thinking about the various things that I would argue if I had a medallion and wanted to keep the medallion system and the number one thing I’d argue is that people who have medallions have demonstrated competence at driving safely including mastery of such driving conditions as “driving with a baby in the vehicle” and “driving with gramma in the vehicle”.

                Then I’d let the do-gooders argue against my opponents as if they were arguing against anarchy. Let them make sneering jokes about how their opponents want to live in a society where a taxi driver needs no more training than the average 16 year old. They’re more than happy to do that.

                With minimal effort on my part, I can generate enough friction to keep things from moving and thus I can keep my medallion system.Report

              • Stillwater in reply to Stillwater says:

                Are you saying that you’d argue that way if you (Jaybird) were a medallion holder? Or are you saying that you can see someone else who isn’t you arguing that way?

                Cuz if you’re saying that you (Jaybird) would argue that way if you were a medallion holder, then you’re effectively conceding that the game of politics is inextricable from human interaction. If you’re not saying that, then it seems to me that you’re reducing the views of people you don’t to a trivial (and very convenient) psycho-political analysis, one that you apparently reject, one that expresses a high level of cynicism, and one that you apparently don’t – as a matter of fact – live by (hence, you’re ability to judge it so well).

                Man I really wish you would’ve gone in the other direction.Report

              • Jaybird in reply to Stillwater says:

                I was saying that Evil Jaybird would argue that way.

                If I had a medallion and I were all “Eff You, I’ve Got My Medallion!”, the best way for me to keep it would not, in fact, be for me to say “EYIGMM”.

                It would be for me to talk about Children and Gramma and about how I want to make sure that they get from Third and Vine to 17th and Maple without being long-hauled, without being treated poorly, and without being killed.

                “That’s what this medallion means”, I’d say in the ad. “It means that you and your family will get to where you need to go, safely, in one piece, and at a fair price.”Report

              • Stillwater in reply to Stillwater says:

                Well sure you would. I would too. If is was motivated to preserve my medallion. I’d paint in the post positive political light possible, independently of the facts. If I was motivated to preserve my medallion.

                Fact is, lots of people are motivated to preserve their medallions. So simply observing that people play politics to maximize their self-interest isn’t that interesting. Is it? (Am I wrong in thinking this is just trivially obvious?)Report

              • Jaybird in reply to Stillwater says:

                Again: what surprises me is not that the medallion holder will lie to keep his medallion and others from also getting one.

                It’s the number of people who will trample others on the way to the microphone to explain that the medallion holder ought to keep his medallion and others from getting one independently of the truth of the medallion holder’s claims.Report

              • Stillwater in reply to Stillwater says:

                It’s the number of people who will trample others on the way to the microphone to explain that the medallion holder ought to keep his medallion and others from getting one independently of the truth of the medallion holder’s claims.

                Sure. You find that … disconcerting. {{Cue melodramatic music…}} This is where I repeat something I often repeat to the point of hacknification: people are what they are and not another thing. It would be wonderful if people thought as clearly as you – or me! – about these types of things. Problem is, most people with strong opinions think they’re the clearest thinking person on the planet and it’s everyone else who’s a blithering idiot.

                I mean, we’ve talked about this before. I think. (Now I don’t know, but it feels familiar.)

                It’s one thing to argue with me about a view. It’s another thing to argue with me about other people’s views. Not a lot I can say about that except to commiserate about how stupid so many people really are.Report

              • Stillwater in reply to Stillwater says:

                One other thing: I think you’re being overly uncharitable when you say that the medallion holder would lie about safety issues and whatnot. In fact, I don’t see that there’s any advantage in accusing that person of deliberately distorting the truth. It may be something they sincerely believe.

                I think the better way to go – this ISN’T advice – is to just stick to the claims being made and argue them on the merits. If they’re wrong, it doesn’t matter whether the person is deliberately lying or just honestly wrong.Report

              • NewDealer in reply to Jaybird says:

                I enjoyed the sarcasm that ignored the substance of my question.Report

              • Jaybird in reply to NewDealer says:

                Ahem: Well, of course there are examples of the government doing good things and passing good laws that help people and are mostly good.

                So instead of saying that the government always serves entrenched privilege at the expense of the citizenry at large, I should have added “sure, maybe you’ll find a couple of laws every generation or so that serve everybody… but even a law as wonderful as Obamacare will do more for Insurance Companies than it’ll do for college students.”

                Would you have been okay with that? (Note: I know that Obamacare is based on a Heritage Plan.)Report

              • LWA in reply to NewDealer says:

                So what is your point?

                “government always serves entrenched privilege at the expense of the citizenry at large”

                So then we should… do what?
                Wring our hands in helpless rage?Report

              • greginak in reply to NewDealer says:

                Yeah the ACA…it is a shame liberals didn’t push for a gov option for everyone or even more. damn liberals not pushing for more than we got. i am truly embarrassed.

                PS i’ll just point out for my own amusement since its irrelevant, but Bismark style plans with heavily regulated private insurance companies and gov subsidies works well in germany and switzerland.

                PPS i know a few people who’ve been able to keep their college student kids on their insurance due to Ocare. So they have been helped already.Report

        • greginak in reply to LWA says:

          Using a simplistic cliché to mock the use others using simplistic clichés has a more that a bit of amusing irony. Children in all caps and the mocking children are gonna die are the libertarian version of “what about the children?”

          There is no actual discussion of any specific case, nothing about the context. Of course, as BB points out, cronyism can hide in regulation. But unless you are just going to go with strict dogma, which many will, there needs to be discussion of specifics. In some cases, as LWA asked, maybe we need to look at the costs and benefits of specific policies. Libertarians can be real good that and have a lot of good insights, although i don’t always agree with their conclusions, when the do that.Report

        • Brandon Berg in reply to LWA says:

          Or is there some more careful way to assess the benefits and costs of policy?

          There is, of course. Cost-benefit analysis doesn’t test well against populist appeals to emotion, though.Report

          • Stillwater in reply to Brandon Berg says:

            Not to harp on a pretty weedy issue, but if utility is subjectively determined and in principle inaccessible to empirical determinations, then there really isn’t. We might be able to infer those subjectively determined utility calculations insofar as we think revealed preference is an accurate-enough reflection of subjective valuations. But if that’s the case, then preferences derived from emotionally based decisionmaking are consistent with both subjective utility as well as revealed preference.

            What you’re talking about is an objective measure of utility, I take it, one measured in terms of objectively observed costs and benefits. Not subjectively determined costs and benefits. I don’t have any problem with that, of course. But I recall you being one of the people who thinks value is defined in terms of subjectively determined utility functions. If that’s so, then I have real trouple understanding how you can then move to an objective measure of utility to argue against other people’s subjectively determined value hierarchies.Report

            • Stillwater in reply to Stillwater says:

              Oops. The first sentence got chopped off midway. Sorry about that. I don’t have any idea at this point how it was supposed to end.Report

            • Brandon Berg in reply to Stillwater says:

              My objection is to people choosing policies that don’t reflect their true values because they don’t properly understand the consequences of those policies. I think that, fundamentally, most people have broadly similar values, and that most political disagreements can be traced to differences in understanding of the effects of policies.Report

              • Stillwater in reply to Brandon Berg says:

                What you’re saying is very similar to a standard complaint liberals use against conservatives: that they consistently vote against their own self-interest. But it strikes me as slightly incoherent for a (certain type of) libertarian to make a judgment about what constitutes another person’s self-interest.Report

              • Brandon Berg in reply to Stillwater says:

                If someone tells you that he’s willing to split the $50 million estate of a recently deceased African dictator with you, you may believe that it’s in your best interest to send him the $10,000 he’s requested to help deal with the red tape. I can agree that a $25 million return on a $10,000 investment is a pretty good deal while still telling you that you’re a fool to wire the money.Report

              • Stillwater in reply to Brandon Berg says:

                But that conflicts with the premise that individuals determine their own utility functions based on subjectively determined value preferences.

                You’re talking about an objective standard of economic rationality, or objective rationality. That’s inconsistent with subjective rationality by definition.Report

              • Stillwater in reply to Stillwater says:

                “..objective rationality full stop.”Report

              • zic in reply to Stillwater says:

                Interesting that the government is to blame for the regulatory capture, but not the people who set out to gain advantage for their economic endeavors via regulatory capture.

                There’s an element of this that reminds me of gender; men out to seek sexual opportunity not held accountable for what they do, ‘boys will be boys’ and all that, while the women they knock up/rape are held accountable.

                It seems there’s a common tick to cast the government in the role of the ladies.Report

              • Jaybird in reply to Stillwater says:

                If only government had more power, perhaps it could hold those pesky corporations at bay?Report

              • zic in reply to Stillwater says:

                No, JB. I did not say or suggest that. I pointed out the weakness of your argument — only blaming one side.Report

              • greginak in reply to Stillwater says:

                The libertarian argument about regulatory capture and how gov power is used is a good argument. Let me restate that. It is a good argument. Is that clear. It doesn’t really answer though that even if flawed as gov can be there is no other way to solve some problems. The enviro isn’t kept clean by the magical market, worker safety isn’t left under the pillow by the safety fairy, lead didn’t get out of gas by its own choice. I’d agree we could get rid of plenty of regs. Do i need to restate that i think we could get rid of some regs or have i been unclear. But that never gets to how we figure out what regs we need and what are the costs and benefits of them.Report

              • Jaybird in reply to Stillwater says:

                Zic, the stereotypical answer is always something to the effect of “if I don’t want to drink Coke, I just don’t drink Coke. I can opt out. It’s much more difficult for me to opt out of USG.”

                So when corporations act badly, I can punish the corporations by not participating. When USG acts badly? What options are available to me?

                Somalia?Report

              • Stillwater in reply to Stillwater says:

                Do i need to restate that i think we could get rid of some regs or have i been unclear.

                Every thinking liberal should adopt this view. As should every thinking person. To think we’ve reached the end state of government’s relationship to individuals and society is ridiculous.Report

              • zic in reply to Stillwater says:

                JB, Somalia has a distinct lack of functional government. It does seem to be what you’re yearning for, I’ll grant you that.Report

              • BlaiseP in reply to Stillwater says:

                There are some elementary tests to working out the form, substance and nature of government involvement, independent of subjective utility.

                The best argument against “Gummint Tyranny” e.g. War on Drugs, Gitmo, etc. is simple cost accounting. Imprisoning addicts is more expensive than getting them cleaned up. There’s also the misuse of government resources: why should we have military policemen guarding Afghan civilians? The MP system was engineered to cope with military offenders.

                The per-prisoner costs at Gitmo are twice to three times as expensive as a supermax prison, and I’m not convinced most of the Gitmo Guys even warrant a supermax confinement. Put aside the gravity of their crimes, which in some cases are really awful — the best argument against these injustices is simple cost. Tyranny is expensive and whole industries grow up to support it.

                Best argument for any economic regulation ought to be a demonstration of how it makes markets sounder and increases consumer confidence. The reason American marques do so well overseas: perceived quality. Can’t go wrong shooting for higher quality.

                We’re faced with a continuing problem though: maybe we need to evolve on this subject somewhat. Every time we pass a law, we create a need to enforce that law. So — we create a bureaucracy to enforce it. The enemies of a given law wander around, brandishing some worksheet, decrying the cost of enforcement. They never get around to the costs associated with not enforcing laws: those costs are hard to round up, since an effectively enforced statute has attenuated those costs. It’s not much different an argument than the Anti-Vaccination Lunaticks.

                But bureaucracies become self-perpetuating. The US military has a strategy to avoid stagnation: every so often, they’ll reflag units, changing what’s called the Order of Battle, adapting the resources to the threats, real, perceived and yet unknown. We do need a Bureaucratic Class. I’d like to see it become as professional as the military. Too much connivance and revolving-door-ism to suit me.Report

              • Turgid Jacobian in reply to Stillwater says:

                Zic your comment at 6:38 is great. I’ve made that observation before to folks… The dudes I was talking to didn’t get it.Report

              • MikeSchilling in reply to Stillwater says:

                “if I don’t want to drink Coke, I just don’t drink Coke. I can opt out. It’s much more difficult for me to opt out of USG.”

                And if the air is full of toxins, you can move someplace that doesn’t have air.Report

              • BlaiseP in reply to Stillwater says:

                @Mike: Heh. A new life awaits you in the off-world colonies! A chance to begin again in a golden land of opportunity and adventure!Report

              • LWA in reply to Stillwater says:

                “When USG acts badly? What options are available to me?”

                If only there were a way for citizens to control the behavior of government!

                We should form a study group to see if this Gordian knot can be cut.Report

              • LWA in reply to Brandon Berg says:

                What causes you to think the policy doesn’t reflect their true values, or that they don’t properly understand the consequences?

                You are assuming that the objective analysis completely and correctly captures and frames the issue.
                What if it doesn’t? What if there are factors beyond what a rational analysis demonstrates, that intuitively cause people to reject your preferred policy?

                What I’m referring to is the concept of the sacred and taboo, which is usually the trigger for populism- the idea that some red line of outrage has been crossed.

                Its like when liberal try to argue that welfare doesn’t really go to lazy moochers, using all sorts of charts and graphs. It doesn’t register, because we aren’t addressing the underlying social taboo of mooching.Report

              • Jim Heffman in reply to LWA says:

                “What causes you to think the policy doesn’t reflect their true values, or that they don’t properly understand the consequences?”

                Because they say that they want to help the powerless little guy, and they do that by championing policies and regulations that give the powerful big guy even more power.Report

            • Roger in reply to Stillwater says:

              ” We might be able to infer those subjectively determined utility calculations insofar as we think revealed preference is an accurate-enough reflection of subjective valuations. But if that’s the case, then preferences derived from emotionally based decisionmaking are consistent with both subjective utility as well as revealed preference.”

              Great points, Stillwater. My response would be that you are pointing to an inherent danger in democracy as recognized in the Federalist Papers.

              My suggestions are that we, where possible and practical, provide education (spread knowledge) so people aren’t as ignorant, pursue a shared ethos that helps us defend against acts of foolishness, that we try to restrict human interactions to ones that are mutually voluntary so that people can experience personal feedback on their decision quality (rather than deciding for others and letting others deal with the consequences). And that we keep coercion, regulations and government scope (people telling each other what they have to do) to a narrow and well focused area.

              Of course what I just described aligns with Classical Liberalism. Surprise.Report

            • J@m3z Aitch in reply to Stillwater says:

              Not to harp on a pretty weedy issue, but if utility is subjectively determined and in principle inaccessible to empirical determinations, then there really isn’t

              Hmm, I wonder how the same economists who believe utility is subjective ma aged to develop cost-benefit analysis, then?Report

          • LWA in reply to Brandon Berg says:

            Are you confusing populism with demagoguery?Report

          • zic in reply to Brandon Berg says:

            Breast cancer screening might be a good study on this; because it certainly had women dealing with an emotional topic — annual mammograms are the best way to prevent cancer — in a data-driven way; that they actually resulted in a lot of unnecessary treatment.

            My suspicion remains that it goes deeper, that the annual x-ray dosage aggregates enough damage to trigger breast cancers, and we’ll finally hear about that from some future study; I hope I’m wrong. I suspect we won’t know until they have a decade or more worth of data from women not having annual mammograms.Report

      • MikeSchilling in reply to Brandon Berg says:

        Would you want to ride in a taxi where the driver has no driver’s license, or do we trust Newton’s Laws of Motion to eliminate the unskilled?Report

        • zic in reply to MikeSchilling says:

          I think an inspected, registered, and insured vehicle might be in order, too.

          I have to admit to some pretty sketchy cab rides in Central America.Report

        • Kolohe in reply to MikeSchilling says:

          At least on the east coast, taxi cab drivers don’t seem to obey many of the laws of physics or man.

          (they’re also the worst at queuing if there’s a road blockage. Or even if the lane ending is longstanding and well known)Report

          • Brandon Berg in reply to Kolohe says:

            Arguably best at queuing, not worst. Look up “zipper merge” or “late merge.” Merging as late as possible is regarded by experts as best practice.Report

            • Roger in reply to Brandon Berg says:

              Plus one!

              I actually considered writing a guest post on merging. I was going to ask who preferred merge early vs merge late. It always seemed to me to be stupid to merge early, causing traffic delays. On the other hand, the early mergers clearly get pissed off at late mergers.

              It is fascinating to see that traffic specialists have weighed in in favor of zipper merging.Report

              • MikeSchilling in reply to Roger says:

                http://en.wikipedia.org/wiki/Late_merge

                The late merge method has not been found to increase throughput (throughput is the number of vehicles that pass through a point in a given period of time). However, it considerably reduces queue (“backup”) length (because drivers use the ending lane until its end) and reduces speed differences between the two lanes, increasing safety

                Which makes sense; the single, post-merge lane is used at capacity in either early or late merge, so both result in the same throughput. What makes zipper merge work is that both merging lanes are treated as equals and take turns fairly. If cars in the lane that continues refuse to let cars in the lane that ends take their turns, then fewer people will use the ending lane, making it faster and used predominantly by drivers who don’t mind bulling their way in uninvited. This leads to resentment and an increased risk of accidents.

                This is a case where each driver pursuing his own interest without considering the whole leads to a suboptimal result. It’s in the interest of a driver in the continuing lane not to let anyone merge in front of him, while it’s in the interest of a driver in the ending lane to wait as late as possible to merge, and to do so immediately when a gap appears. This maximizes the likelihood of a collision.Report

              • Roger in reply to MikeSchilling says:

                Thanks Mike. A case where we can use norms and protocols to facilitate coordinated behavior.

                I do suspect a lot of the early mergers feel late mergers are cheating or cutting. This pisses off the early mergers and can actually reinforce their tendency to merge early so as not to be a cheater. Of course this self amplifies.

                Are there any early merge champions out there?Report

              • MikeSchilling in reply to Roger says:

                There’s a variant of this I often drive through: a four-lane freeway where the two left lanes go straight to the Bay Bridge and the two right langes exit to join a different freeway that goes towards Berkeley. The latter are often congested in the evening, leading drivers to merge into them at the last minute, even at the cost of blocking or partially blocking the lane they’re merging from. That’s more obviously cheating.Report

              • Kazzy in reply to Roger says:

                Roger,

                I won’t pretend to have any research on the matter, but I’ve always thought early merging to be preferable because it gives you more time and space to merge. If 200 cars need to get from 2 lanes into 1 lane, it would seem that doing so gradually over the course of a mile would be smoother than everyone trying to do it in a matter of feet.Report

              • J@m3z Aitch in reply to Kazzy says:

                It seems to me like what game theorists would call a mixed strategy, where there’s some optimal proportions of early v. late mergers.

                And as to late mergers, I don’t think you necessarily have to wait until the very last moment, but cruise along past the early mergers until you find a hole you can slide into without causing the car you’re merging in front of to break, which can cause a chain reaction that works its way backward, slowing up every early merger behind. Smooth merging is the ideal, when you can manage it, IMO.Report

              • Kazzy in reply to Kazzy says:

                Agreed. So long as you merge without causing others to “break stride”, I don’t think we need more than that.

                Something that bothers me to no end is the people who, when everyone else is patiently working their way through traffic, take it upon themselves to drive on the shoulder. I understand if someone is in a true emergency, but the frequency with which I see it tells me that can’t be the case.Report

    • Fnord in reply to Jaybird says:

      While I agree that licencing is, in some areas, getting out of hand, taxi medallions are in a whole ‘nother category. There might be some shadow of a point if they were actually awarded based on training, testing, certification, etc. But that’s not how they work; the supply can’t be expanded by people noticing the excess demand and going to taxi driver school.Report

      • Will Truman in reply to Fnord says:

        Yeah. While I admit to a degree of skepticism over licensure more generally, it is necessary in places. Sometimes you just give out licenses so that you can revoke them if there are complaints. Sometimes you want to demand specific training and requirements.

        I struggle to think of very many circumstances where I would require licensure simply to reduce supply. Actually, I can’t think of any, though I am willing to leave the possibility open that there is something I am not thinking of.Report

        • Stillwater in reply to Will Truman says:

          I struggle to think of very many circumstances where I would require licensure simply to reduce supply. Actually, I can’t think of any,

          I think it’s sort of a logical problem. If a thing is permitted – that is, there is a government-approved (!!) market for it – then supply ought to be determined by market principles. If not, then prohibit supply. There really isn’t a middle ground.Report

          • clawback in reply to Stillwater says:

            Carbon emissions trading is a good example of an attempt to permit but limit supply.Report

            • Stillwater in reply to clawback says:

              Yes, thanks. That’s a great example.Report

            • Stillwater in reply to clawback says:

              Wait a minute. maybe I’m confused (heh!) but is the mechanism limiting carbon emissions achieved by limiting licensure to carbon emitters? I didn’t think it worked that way…Report

              • Brandon Berg in reply to Stillwater says:

                That’s how cap-and-trade works, isn’t it?Report

              • Stillwater in reply to Brandon Berg says:

                I don’t know. I thought the mechanisms was to cap and then allocate a specific amount of carbon emission credits or some such thing. Not that the goal of lowering emissions was to be accomplished by limiting the number of carbon-emitting-licenses to firms. (Of course, a quick jaunt to Wikipedia would probably answer the question, but I’m incredibly lazy right now.)Report

              • Stillwater in reply to Stillwater says:

                Just checked. No mention of licensure in the wiki page.Report

              • clawback in reply to Stillwater says:

                You can think of there being a limited number of “licenses” issued, each allowing the holder to emit a certain amount of carbon.

                But in the case of emissions trading there’s no concept of qualifying to get a license by passing a test or some such. If you’ve got enough money to buy a license, you’re “qualified”.Report

              • zic in reply to Stillwater says:

                Stillwater, I’ve always heard the term ‘permit’ used in the context of emissions. A the regulatory process permits pollution up to certain levels; and the application/renewal process is called a permitting process. The same terminology spills over into carbon trading, where the term is ‘allocation permits.’Report

              • Stillwater in reply to Stillwater says:

                zic, if you mean the term “permits” as a synonym for “holding a license to ….” then you’ve answered the question. Licenses are required to engage in cap and trade. I just haven’t heard that part of the proposal before (which probably shows my own ignorance about the topic).

                As nitpick, tho, this question pops into my mind: is the goal of lowering emissions achieved by limiting the number of licenses of permittees, or is it based on capping total emissions and trading those credits?Report

              • zic in reply to Stillwater says:

                I think it’s intended to limit loads; certainly old emitters could clean up their act and then sell their permits to other businesses; that amount of carbon would still be allowed into the atmosphere, it wouldn’t reduce loads into the atmosphere.

                But now that you ask, I too feel it’s all fuzzy and vague, which was one of the big problems with cap and trade from the get go.Report

              • Brandon Berg in reply to Stillwater says:

                The licenses don’t limit the number of firms, but rather the amount of carbon that can be emitted. Taxi licenses work on the same principle. You don’t buy a license that entitles you to operate as many taxis as you want—you have to buy a medallion for each taxi you want to operate.Report

              • Stillwater in reply to Brandon Berg says:

                You have to have a license to drive a cab in a medallion system, yes?

                Does a firm have to have a license to buy carbon emissions to purchase or receive carbon credits under cap and trade?Report

              • Brandon Berg in reply to Brandon Berg says:

                I think you’re just getting hung up on the term “license.” A license is just permission by the issuing authority to do something specific. Sometimes that requires you to demonstrate basic competence (a driver’s license, e.g., or a license to practice law). Sometimes it’s just something you have to pay for because the government wants to limit consumption of a scarce resource, internalize externalities, or raise revenue. For example, fishing licenses, carbon emission permits, or vehicle licenses (plates and tabs, not driver’s licenses).Report

              • Stillwater in reply to Brandon Berg says:

                Yeah, could be. Functionally they seems pretty indistinguishable.Report

        • Stillwater in reply to Will Truman says:

          Now that I think about tho, I think there is a case to be made about drugs and licensure that approaches the issue you’re talking about but doesn’t quite get there. For a long time and maybe even currently, one of the prevailing views explaining why drugs remain illegal is that the CIA generates too much revenue and other ancillary benefits from illegal drug trafficking. The argument gained lots of currency during the Vietnam war (the Politics of Heroin is a good treatment) and … well … since then… That’s not a case of limiting licensure in the way you’re understanding it tho. It’s more like the limiting case, where government approved licensure is limited to zero.Report

          • BlaiseP in reply to Stillwater says:

            As someone who was pretty close to all that, the scurrilous old charge of CIA involvement in heroin trafficking is pretty much nonsense. Here’s what really happened.

            Vang Pao was Our Man in Laos. The CIA used his Hmong warriors to their own ends but Vang Pao used the CIA to his: the Hmong had no love for either the Vietnamese (who had oppressed the Hmong for centuries) or the Vientiane government, still a nasty Communist state to this day.

            The heroin trade out of SE Asia was not dominated by the Hmong, but by the KMT operating out of Burma. The Hmong did grow poppies as do the Afghan people today but not Vang Pao’s boys. KMT did fight for Vang Pao and the CIA: every merc in the hemisphere did at one point or other. KMT were involved in the heroin trade and everyone knew it. But to posit the CIA’s involvement in the transshipment of heroin belies the facts: Air America didn’t move anything out of Laos. It moved stuff into Laos. Long Tieng / LS98 only moved stuff out at the very end, when it evacuated in 1975.

            It doesn’t make any logistical sense. Heroin’s a labour-intensive operation. The big deal is covering your tracks, refining it. Raw opium moves out of Afghanistan into Pakistan and Iran now, not onto American aircraft.Report

  12. While reading this post, I was going to object, and say, well, why can’t Ottawa deregulate its taxi industry gradually, but then Jonathan said:

    As James notes, the economic benefits of opening up these markets should be greater than the specific loss suffered by the monopoly sellers. Consequently, we can compensate them to help with the adjustment. Further, we can implement a gradual transition to an open market. The monopoly seller will then have time to prepare for the change.

    So I really have no quibble.Report

    • Barry in reply to Pierre Corneille says:

      “As James notes, the economic benefits of opening up these markets should be greater than the specific loss suffered by the monopoly sellers. Consequently, we can compensate them to help with the adjustment. Further, we can implement a gradual transition to an open market. The monopoly seller will then have time to prepare for the change.”

      In this case, there is a concentrated interest capable of extracting money, but in the general sense this is the argument of neliberalism ,and has proven false more often than not.Report

      • Pierre Corneille in reply to Barry says:

        Barry,

        I don’t quite understand. Which part of the argument is false? I’m not necessarily disagreeing. I’m just not understanding your point.

        Also, while I don’t think I have a good definition of what “neoliberalism” is, the idea of compensating entrenched interests to help them adjust to a freer market doesn’t seem particularly neoliberal, or rather, it strikes me as a way to soften the impact of otherwise neoliberal policies. On the other hand (….and here I’m thinking out loud….) maybe the willingness to soften the blow is what makes the policy “neo” rather than full-bore liberal.Report

  13. clawback says:

    These people asked for no favours from the government, they just recognized the game the government was playing, learned the rules and decided to play along.

    Yep. And one of the rules of the game is that the government can revoke the privilege at any time. Any player in this market knows, or should know, those rules. Presumably the price of the monopoly privilege reflects that risk.Report

  14. Stillwater says:

    they just recognized the game the government was playing

    Hmmm. This is exactly where my standard and probably tiresome (at this point) objection rears it’s ugly head.

    Government is a natural, fluid, and inevitable result of individual people having individual desires. So in that sense government is not an entity with distinct and seperable ontological status than social life in general. It is continuous with it. A constitutive part of it. The “game” government is playing is not distinct from the game individuals play and have always played and will continue to play because individuals generally prioritize their own desires over others and use whatever means are at their disposal to accomplish those ends.Report

  15. greginak says:

    So i just read at OTB that Vermont has just decriminalized pot. They still have a fine for getting caught with less than an ounce But what shocked me was, apparently 17 states don’t have a criminal penalty for pot. Is that common knowledge? I never realized so many states didn’t have a criminal penalty. Not that still having a fine is cool, they should all ditch that to.Report

  16. Roger says:

    Jonathan,

    Nice job of summarizing various comments into a coherent post.Report

  17. J@m3z Aitch says:

    JM,

    I’m almost wholly in agreement with you. As to “harm,” I was using it in the legal sense, where the loss could potentially constitute grounds for a legal action. In that respect it can sometimes be far removed from any moral sens of harm. But I didn’t make that clear, so any differences in emphasis are my fault.

    I’ve talked a lot about cab markets, and as a public choice theorist and firmer cabbie, I am wholly in agreement with you on that example. Were I can czar I would only require clean driving records, adequate insurance, and regular safety inspections.Report

  18. Damon says:

    As said before, “rules of the game”. That’s why monopolist lobby (bribe) gov’t hard…to preserve their monopoly.Report

  19. Cletus says:

    Libertarians might suggest that the taxi plate owners instead follow the example of their foremother, Henrietta Green. A little “thrift” and a lot of free riderism and tax avoidance will do you wonders even if it costs your children a leg or two.Report