The Anti Rent-Seeking Amendment, Part II: The Amendment

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  1. Avatar LeeEsq says:

    Section 2-I like how you bring copyright and presumably patent law under control. One of the worst aspects of rent seeking is how media corporations are attempting to create perpetual copyrights for their intellectual property and property created by others. This really dampers creativity and needs to be brought under control

    I’d include language to give the federal government the power to regulate for health, safety, and welfare of the people in order to save the FDA among other things. I’m not much of a fan of federalism though.Report

  2. Avatar Roger says:

    I am a big fan of baby steps in the direction of more freedom and less exploitation (which is what rent seeking is). This is as you say, not perfect, but it is much better than a baby step. It is a massive improvement and IMO would lead to substantial gains in average welfare.

    The concern I still feel liberals will have with this are that they believe a legitimate role of the state is to grant privileges which offset advantages that other economic agents have. This amendment would eliminate offsetting privilege granting. You and I see this as a good thing on net. My guess is Creon wouldn’t.

    As an example, one purported reason to privilege unions to be able to require employees to join is that it offsets an unfair power or advantage that employers have. Again, I totally reject the argument, but I am pretty sure they disagree with me.Report

    • Avatar Kim in reply to Roger says:

      If your choice is to die now, or to die horribly later, what choice do you really have?
      And what sort of a bastard am I for giving it to you?
      http://www.publicintegrity.org/2013/10/29/13623/more-breathless-and-burdened
      (this is stateside. naturally it’s always worse in China).

      I don’t know. When employers routinely violate known civil laws, I think there’s a good justification that they’ve got an unfair power or advantage. Of course, I also think the same when the corporation comes with machine guns or tanks.Report

    • Avatar Scott Fields in reply to Roger says:

      Those liberals who believe, as I do, that the advantages that other economic agents hold stem fundamentally from a disproportionate capacity to lobby, rather than natural market outcomes, would also see this amendment as beneficial on net. It would all depend on the execution of Section 3 effectively dismantling what you call incumbent privilege.Report

      • Avatar J@m3z Aitch in reply to Scott Fields says:

        Those liberals who believe, as I do, that the advantages that other economic agents hold stem fundamentally from a disproportionate capacity to lobby, rather than natural market outcomes,

        Very much, yes. Would you try explaining that to LWA? He’s never going to allow himself to hear it from a libertarian, but maybe someone non-evil can explain it to him?Report

      • Avatar Kim in reply to Scott Fields says:

        I believe that markets are naturally unstable things, that tend towards wealth aggregation in unproductive ways over time.Report

      • Avatar Scott Fields in reply to Scott Fields says:

        James –

        I’m likely insufficiently non-evil to help you make the case to LWA. This amendment strikes me as significantly anti-corporatist. Maybe you could sell him on that.

        Kim –

        I’d contend that a naturally unstable system that tends to favor the wealthy over time is preferable to an artificially stable system that skews dramatically in favor of the wealthy all at once (i.e. what we have now).Report

      • Avatar J@m3z Aitch in reply to Scott Fields says:

        Scott,

        This amendment strikes me as significantly anti-corporatist.

        Absolutely. That is the primary target, which is why I’ve so carefully couched it to explicitly protect general regulatory powers.

        Maybe you could sell him on that.</em<

        I doubt it. He seems to see ending the ability of corporations to lock in privilege as being pro-corporatist.Report

    • Avatar Michael Cain in reply to Roger says:

      Yeah, one way to put it — particularly in the case of large corporations — is that absent a requirement to negotiate with the union, shareholders are allowed to operate cooperatively on the question of compensation and working conditions, but workers are not. There are reasonable arguments that shareholders have to delegate that authority in order to make the business manageable, but it still leaves the equipment owners with a significant advantage over equipment operators.Report

    • @roger

      As an example, one purported reason to privilege unions to be able to require employees to join is that it offsets an unfair power or advantage that employers have.

      I do think it would be a special privilege if the state has a default requirement that employers negotiate with a union, with accepting a union shop being a sign of legal “good faith” bargaining. But I’m not sure it really counts as a special privilege to allow unions to negotiate for a union shop contract. I’ll grant that “unions to be able to require employees to join” implies a state-enforced contract, but one can regard it as an agreement between employers and their workers and not as a state-granted privilege per se.Report

    • Avatar DavidTC in reply to Roger says:

      As an example, one purported reason to privilege unions to be able to require employees to join is that it offsets an unfair power or advantage that employers have. Again, I totally reject the argument, but I am pretty sure they disagree with me.

      You reject the argument that it offsets it, or you reject the argument employers have such an advantage?

      But, hey, I actually think this it would make unions stronger. Why? Because it makes ‘right to work’ laws illegal.

      A ‘right to work’ law is a law forbidding a union from entering an exclusivity contract with a corporation. You know, _exactly_ the sort of exclusivity contract corporations enter all the time.

      In my state, Georgia, it is perfectly legal for my hypothetical restaurant to sign a contract with your soft drink company to only sell your soft drinks in my restaurant. (Assuming this in some way doesn’t create a monopoly or trust.) It is, however, _illegal_ for my restaurant to sign a contract with a union to only employ its workers. This is called a ‘right to work’ law. Why is it illegal for my restaurant to do that? To keep unions from forming.

      If I understand what this amendment is trying to do, that would now be unconstitutional, assuming that ‘unions’ are now an ‘industry’ under the meaning of it. (Which seems to be the assumption here, otherwise unions wouldn’t be affected at all.) So if organizations can form exclusivity agreements, unions can too.

      Likewise, sympathetic strikes? Oh, look. They’re now legal too!

      Union members refusing to provide services to non-union companies? Also legal! (Hell, it probably will end up _in their contract_.)

      And public workers can now strike also. That seems somewhat debatable, but I don’t see how the law can treat public sector unions differently.

      A lot of people don’t understand that the law treats unions different in _many_ ways, and like to whine about how the law is ‘nice’ to unions. Which is, in fact, totall bullcrap, and unions are literally the most restricted ‘industry’ in the US, outside of nuclear power and a biological labs and a few rare example.

      People don’t quite understand what sort of hell exactly would break loose if you set unions free and removed all restriction on them.

      (Of course, right now unions are excluded from anti-trust regulations, and presumably that would go away also…but the simple fact is that most unions are not anywhere near a ‘monopoly’ in the first place and so that exception is complete nonsense anyway.)Report

      • Avatar DavidTC in reply to DavidTC says:

        Heh, and I see that everyone else already pointed this point. Nevermind.Report

      • Avatar Mad Rocket Scientist in reply to DavidTC says:

        And as @pierre-corneille pointed out above, & elsewhere, laws requiring companies to negotiate with a union would be struck as well (i.e. workers could vote to form a union & employers could elect to fire everyone; as well as unions could not block replacement workers).Report

      • Avatar Roger in reply to DavidTC says:

        When you say all hell will break loose, are you speaking pro hell? Was this a euphemism for good and powerful forces would be unleashed? That is how I read it.

        Yes, sympathetic strikes would be legal (and should be IMO). Yes, a union could ask for a contract that only union suppliers can be used. Yes, the union could ask the company to only hire union laborers.

        Are you not equally worried though that companies would only hire those contractually promising not to unionize? That companies would threaten to close any office which unionized? In other words, it seems that the hell released would be point and counterpoint.

        I am sure some companies would be infiltrated by very successful and powerful unions, but this would just create a huge competitive advantage for any company or off shore factory which was successful at avoiding any unionization. This however may be partially bought with better wages and working conditions there. Point counterpoint.

        As to public service unions, these are a privileged monopoly by definition. They work for a firm which consumers have to buy from and have to use a specific entity with no allowable competition. This is two levels of privilege. If firms could compete with them, and customers (citizens) were not required by law to buy the service, then I would agree they should be free to unionize and strike.

        There really is a deeper point here though. You seem to think wages or prices in a competitive market are a struggle of wills rather than set by supply and demand. Correct me if I am wrong. I would suggest that over the long haul this paradigm is incorrect or at least unstable and subject to dynamic decay as market forces work themselves out.

        I have no idea what would happen short term to wages relative to prices with this amendment. Longer term, I suspect substantially more (basically full) employment and substantially more productive economy and higher average standards of living. It will not be because unions won some struggle. It will be because the economy becomes more efficient and productive.Report

      • Avatar DavidTC in reply to DavidTC says:

        Are you not equally worried though that companies would only hire those contractually promising not to unionize?

        I am uncertain why that would be relevant. Surely they’d just do it _in secret_.

        That companies would threaten to close any office which unionized? In other words, it seems that the hell released would be point and counterpoint.

        Are you not worried the Teamsters would stop work?

        I am sure some companies would be infiltrated by very successful and powerful unions, but this would just create a huge competitive advantage for any company or off shore factory which was successful at avoiding any unionization

        And are you not worried that the dockworkers would stop unloading their goods at port? Or just _breaking_ their stuff? (And now unions can’t be punished for that sort of deliberate illegal action. At least, not without other corporations being punished for that sort of thing.)

        When I said all sorts of hell, I meant it.

        And in an out and out war between labor and capital, in _this_ day and age, with modern communication technology and police forces that won’t illegally round up workers and courts that are forbidden by constitutional amendment from demanding striking workers stop….

        Labor wins. Holy shit does labor win if you take the gloves off.

        The only way labor was stopped last time was via _illegal means_, and then their tactics were _strictly_ restricted, while granting them some concessions to keep _legal_ unions in play. The laws, as is, _cripple_ unions, but are designed to stop just short of crippling them so much labor will illegally cause problems. (And even then, it doesn’t work…witness all the unions restricted from striking that still illegally ‘strike’ in various ways.)

        I know for some reason the right seems to delusionally think otherwise, that laws ‘give unions power’, but the right is completely, utterly, near-pathologically incorrect about this. You remove restrictions on unions, and the entire damn labor market has a meltdown.

        As to public service unions, these are a privileged monopoly by definition. They work for a firm which consumers have to buy from

        That does not make _them_ privileged, that make the people buying their services (Aka, their employers) privileged. That is the _opposite_ of a monopoly. If an EPA regulator, for example, wants to find another job, his choices are limited because the people he is selling to is a monopoly, as there is only one EPA.

        and have to use a specific entity with no allowable competition.

        And why would there be no allowable competition? What are you talking about? You do remember we’re talking about a universe with no union regulation, right? And hence there certainly could be other unions.

        Of course, just like _any other government contract_, the government might choose one supplier of labor or another, presumably via some sort of bidding.

        This is two levels of privilege. If firms could compete with them, and customers (citizens) were not required by law to buy the service, then I would agree they should be free to unionize and strike.

        You’ve just successfully argued that _governments_ are privileged, which is a nice fun argument, but completely moot. We were talking about unions that supplied things to governments, not governments.

        You seem to think wages or prices in a competitive market are a struggle of wills rather than set by supply and demand.

        Erm, the supply of labor is almost entirely due to ‘will’.Report

      • Avatar Kim in reply to DavidTC says:

        Roger, David,
        I think both sides would be happy to see some competition in public service unions.
        I’m having trouble understanding how that would work (other than management chooses which union, which is probably dirty pool), but I find the entire concept interesting and deserving of more thought and effort.Report

      • Avatar Roger in reply to DavidTC says:

        “Labor wins.”

        Labor wins what?Report

      • Avatar DavidTC in reply to DavidTC says:

        Labor wins what?

        Basically, labor wins everything. I wouldn’t be surprised to labor negotiating some sort of profit-sharing scheme, perhaps it even becoming standard for labor to have a seat on the board of directors and being granted stock. In time, I expect to see many corporations being forced, at ‘union-point’, to convert to basically employee-owned businesses.

        I _also_ wouldn’t be surprised for the thing that anti-labor people thinks happen all the time, but does not really happen, actually start happening sometimes. That is, for labor to accidentally destroy the company it’s working for because labor over-estimated their demands and the company had to give in. OTOH, this is really no different than any of the other ways that companies miscalculate and kill themselves, so I’m not actually worried about it…labor, at least, has no incentive to do that on purpose.

        Of course, I would also expect to see many internal struggles within unions and unions amassing power for their leaders and not the union members…but with no forced negotiation, either the union will work for the workers, or the workers will just start another union.

        The only thing, throughout history, that has managed to keep labor repressed is action by the people in power. Illegal action, legal action, whatever. Remove that, make laws doing that unconstitutional, and introduce modern technology for coordination, where workers can organize _in secret_ and the first sign the company has there’s a union is when no one shows up for work, and where entire _other industries_ can sympathetic strike, resulting massive pressure to agree to the demands? In a world of ‘just in time’ shipping, where a week of striking blows up an entire distribution system?

        Uh, wow. We, fairly shortly, get the predicted revolution of Marx.Report

      • Avatar Roger in reply to DavidTC says:

        @davidtc

        Fascinating!

        I wonder if employees will prefer to work for employee-run companies? It seems intuitive that they would, but I have my doubts. I would welcome them having the choice. Interestingly if working for an employee owned company was perceived as superior, wages would gravitate LOWER for those companies. Ironic huh?

        Average wages and benefits will still be set by supply and demand. To the extent they get more stock (many companies offer stock today) they will get less wages. Employee run companies can’t overcome the power of markets. They could get a higher perceived value though.

        “Uh, wow. We, fairly shortly, get the predicted revolution of Marx.”

        Not sure I have heard anybody that thought that was a good thing for a decade of more now.Report

      • Avatar DavidTC in reply to DavidTC says:

        I wonder if employees will prefer to work for employee-run companies? It seems intuitive that they would, but I have my doubts. I would welcome them having the choice. Interestingly if working for an employee owned company was perceived as superior, wages would gravitate LOWER for those companies. Ironic huh?

        Average wages and benefits will still be set by supply and demand. To the extent they get more stock (many companies offer stock today) they will get less wages. Employee run companies can’t overcome the power of markets. They could get a higher perceived value though.

        Erm, no, they’d get _actual_ higher value. As in more actual money. Which is why working for those companies would be perceived as superior.

        You sorta just made the equivalent inverse argument to ‘Supply and demand says that if X is cheaper than Y, then X will become more popular Y so the cost of X could rise higher than Y!’

        People will wish to work as employee-owned businesses because the amount of money they would end up with would be higher. (I would call that ‘wages’, but some of it would be stock dividends and profit sharing and whatnot.)

        Yes, thanks to supply and demand, that would drive the amount of money they make lower, but clearly it can’t get lower than it currently is. If it did, people would _stop_ working for those companies, and demand for employees would go back up.

        Now, there might be some _other_ benefits of working for employee-owned companies, like they would rarely attempt to fire half the work-force or gut pensions to temporarily boast the stock price, and it is possible, all things being equal, employees would be willing to work for slightly less.

        But, of course, there’s no actual reason such companies _should_ pay less. If the majority of the owners _are_ the employees, than I’m baffled as to why they would decide to reduce their own wages in order to…what…have more of their money in profits? What exactly is the theory here? Supply and demand doesn’t work when _both sides are the same people_.

        “Uh, wow. We, fairly shortly, get the predicted revolution of Marx.”

        Not sure I have heard anybody that thought that was a good thing for a decade of more now.

        Hey, _I_ didn’t propose this amendment. I was just pointing out what would happen.

        While I would like to see labor unchained, I think instantly unchaining it in this manner would be, uh, really really really disruptive.

        OTOH, I’m not entirely sure that we can get any reasonable changes in labor restrictions, and I’m pretty well convinced that if we keep going the direction we’re currently going that we will, in fact, have some sort of labor revolution. So, I dunno, maybe unchaining labor would be a reasonable thing to try…it’s better than looting and seizing of property.Report

      • Avatar Roger in reply to DavidTC says:

        @davidtc

        David,

        The reason I question whether employees would make more is because of my understanding of how the market would play out.

        Dynamic number one.

        Let’s say employees took over and agreed to a 25% across the board wage increase. Day one they would get exactly what you think they would. However, once a company pays significantly above market rates then any time they have an opening then they will attract people. Indeed, it would make sense for anyone anywhere near and quite a bit above that skill level to apply. They would get thousands of applicants for any job. Thus they would logically choose the best applicant.

        But the very best applicant would not be overpaid by 25%, she would be paid exactly what the market price is. She would be paid exactly where supply met demand. Over time, the company would get a better quality work force and the dynamic attractor does not stop until every position is filled with workers which are the best that can be attracted. I realize that this never gets to exactly 25%, but that is what it is pulled toward.

        If you pay workers substantially above market clearing wages, you will attract better workers until you approach market clearing wages. Supply will try to meet demand.

        Dynamic number two.

        Any company which pays 25% higher wages has that much less to reinvest in new products, new factories, new markets and new ideas. Either that or they have correspondingly higher prices or lower quality. Thus they will lose market share to any company which does not pay 25% above clearing price. This is exactly the dynamic that unions face today. To the success they exploit rents, they destroy market share. I can link you to studies which track the trend. Unions extinguish themselves to the extent they extract rents.

        An employee run company which somehow evaded dynamic number one will in fact work at a competitive headwind and over time destroy itself.

        Dynamic number three

        But, you might ask, can’t the higher quality work force offset the higher wages.YES! However if it is economically feasible, you have to assume a reasonable company in a competitive industry has already tried this strategy.

        For example, I was an officer in a company which paid higher than industry average wages, had great profit sharing and was annually ranked as one of the best companies in the US to work for for employees and families and minorities. This was not out of benevolence. It was our hiring strategy. We wanted better employees and less turnover and paid for these things. This was not above the market rate, it was the market rate.

        Make sense?Report

      • Avatar Mike Schilling in reply to DavidTC says:

        she would be paid exactly what the market price is. She would be paid exactly where supply met demand.

        If that were a well-defined value, which of course it is not, and we all know that perfectly well. If you have a position you want to pay $50K for, and an amazing candidate insists on $52K, does he get it? Probably. Would someone who’s been out of work long enough take it for $45K? Again, probably. Does the person who’s mulling over your offer of $50K know what his prospective peers make, or what your competitors are paying for a similar position? Probably not. So when I see these assertions that there is a precise market wage for a job, and that paying a cent above that would be ruinous! ruinous! I just wonder who you’re trying to fool.Report

      • Avatar Mad Rocket Scientist in reply to DavidTC says:

        @mike-schilling Actually Mike, most professionals have a pretty good idea what the market range is for their profession. Hell, in college, we were told exactly how to find out what the market range is for the national & local markets (career assistance offices have all the info).

        For instance, I know right now I make a bit less than the average in the area for my field, but that is in large part thanks to Boeing, which pays generously relative to a lot of the smaller companies & thus skews the curve quite a bit. Of course, the shorter commute, lack of aggravation, and improved opportunities for advancement in my current job offset the loss a bit, so it’s worth it to me.

        Now maybe some people don’t know what the salary range for their skill set is, but that is not because the information is not out there, it’s because they haven’t looked.Report

      • Avatar greginak in reply to DavidTC says:

        MRS- I don’t doubt that is true for some jobs although not all. I think the issue for me as i read the thread, and Mike’s point, is that the reasoning is circular. As in, the proper wage is where supply meets demand, which defined how exactly? It is just saying “this is what we are willing to pay.” So the proper wage is just what someone will pay, which doesn’t seem like much of a point. Agitating for higher wages is wrong because it isn’t at the Supply/Demand point, but that point has no real concrete meaning.Report

      • Avatar Mike Schilling in reply to DavidTC says:

        When I was looking recently, I found quite different salaries offered (or suggested if things hadn’t gotten that far). Sometimes it was because a startup was offering options rather than cash, but also some very established firms just don’t like to pay much. The culture that salary is something a gentlemen doesn’t discuss hides a lot useful information as well.Report

      • Avatar J@m3z Aitch in reply to DavidTC says:

        The culture that salary is something a gentlemen doesn’t discuss hides a lot useful information as well.

        And the theory of perfect markets assumes perfect information.

        So when employers discourage the revealing of wages, we see once again that capitalists don’t actually like real markets.Report

      • Avatar Roger in reply to DavidTC says:

        @greginak @mike-schilling

        Fascinating discussion. There is something about market dynamics that is obviously counterintuitive, especially for those used to thinking top down.

        First let me address Greg’s point. The market price is not an absolute number. It is a number which is discovered or revealed in the act of exchange. A person is willing to exchange their labor for a wage.

        In a world with multiple potential employers and multiple potential applicants, employers seek the best candidate at the lowest price, and applicants seek the best position at the highest price. Where (and if) the two interests intersect, a hire is made. This establishes a market price. It is created in the act of voluntary market based exchange. Prior to the exchange it did not exist.

        This does not require perfect markets, and it is a dynamic number. The very fact that a person of certain caliber took a job at a certain wage reveals something about the expected going rate for the next hire. But it is just a hypothesis. If you got ten good hires at ten dollars an hour, it does not prove that you can get the eleventh hire at this price. The position may go unfilled until you raise it to $10.50. When the position is filled, the market price — like magic — is now revealed. Tomorrow it may change again.

        If you take a market revealed price of $10 hour and arbitrarily increase it because you believe workers are objectively worth exactly 25% above the place where supply met demand last week, then funny things will happen.

        Any future opening will attract a better caliber of worker. $12.50 per hour jobs will interest workers that would not consider a lowly $10 per hour job. The net effect will be to crowd out the workers who would have taken the best job they could get and replace them with workers who are basically overqualified. You have probably made the economy less efficient. Workers capable of doing something more demanding are now employed in less demanding jobs.

        Here is a way to think about it. Paying substantially higher wages than the market price can actually be done two ways. You can pay more. Or you can intentionally hire a lower quality applicant. Indeed, the two approaches are pretty much equivalent. But note that no company wants to hire bad candidates. It makes no sense. Why should I offer a job that two people want to the worse candidate? That is not fair, is it?

        In addition, employees don’t like working around lesser qualified coworkers. It makes their job tougher. So once one gets hired, even if one is an under qualified idiot, they will still pressure the company to hire better quality candidates.

        The place where supply meets demand is what is discovered. Nobody knows this number until the transaction occurs.

        “If you have a position you want to pay $50K for, and an amazing candidate insists on $52K, does he get it? Probably. Would someone who’s been out of work long enough take it for $45K? Again, probably.”

        You need to reverse your thinking, Mike. There is no market value for the position until two parties agree. If the employer accepts the less qualified at a lower price the revealed price is simply that this employee is worth this price to do this job according to this employer on this day and that no better applicants could be found and that no employer offered anything better.

        But, doesn’t the threat of the job going to the better qualified candidate prove I am wrong? No. If the firm decides they prefer the better candidate at a higher salary, they are buying a different good at a different price. A good toaster is worth more than a bad toaster, as revealed by my purchase. A bad toaster is still theoretically worth something to someone. If it is purchased its price is revealed.

        “So when I see these assertions that there is a precise market wage for a job, and that paying a cent above that would be ruinous! ruinous! I just wonder who you’re trying to fool.”

        Mike. I do not come to this web site and waste an hour trying to fool someone. I explain what I believe to be true. If I am wrong in any way, please correct me. The benefit of laying out my position is that I can learn, either to explain better, or to improve my understanding.

        On your question, there is no precise number until an exchange is made. At that time it is discovered or revealed. Paying an amount above this number because you think the world will be a better place is a hypothesis with very sketchy logical support. It basically reveals that you don’t get markets.

        If I pay higher wages I will get different applicants. If I hire the best candidate I will still be paying the market rate, I have effectively traded up low wage offers to lesser workers for higher wages to better workers. What has really occurred is that I have mis priced the job.

        Employers who mis price jobs operate at a competitive disadvantage to companies which do not. All else equal, they will go extinct over time until they learn to not mis price labor. In other words, lost profit is the market feedback that the company is stupid at paying employees.

        There are a lot of nuances to how markets operate. It is more a dynamic attractor than an absolute. They are pulled in certain directions. But it helps to understand the dynamic attractors,

        Also, do note caveats I explained in my first post on different company strategies in regards to employee quality. If you want a real discussion, I am game. No snarky gotchas, please.Report

      • Avatar Roger in reply to DavidTC says:

        One other side comment.

        As a classical liberal, I always find it odd that progressives choose favorites. In the sale of bread there is a buyer and a seller. Where the money and bread change hands a market price emerges.

        Same with exchange of labor for wages. I find it odd that progressives think labor needs help in the exchange. First it is odd that they perceive the laborer as at some kind of inherent disadvantage to employers in a reasonably large and free market.

        Second I find it odd that they believe addressing this perceived disadvantage leads to a better world.

        Third, it is odd that they mis-perceive this interaction as a struggle between employer and employee. In reality it is a pure act of cooperative exchange. The only conflict is on the terms of the cooperation, and the nemesis here is not the employer, it is the existence of competing applicants. The heart of the competition is between candidates for a job, not between the employer and employee. I honestly believe fewer than one in a hundred progressive gets this.

        Fourth thing I find odd is that my failure to share this world view or defective framework implies I secretly favor the employer. See point three why this is mistaken.

        I favor fair, transparent transactions that are voluntary with no coercion or fraud. If you want to argue that workers and employers would be better in a more free market, I agree.Report

      • Avatar DavidTC in reply to DavidTC says:

        @roger
        Any company which pays 25% higher wages has that much less to reinvest in new products, new factories, new markets and new ideas. Either that or they have correspondingly higher prices or lower quality. Thus they will lose market share to any company which does not pay 25% above clearing price.

        Erm, no.

        The premise here isn’t that companies just magically pay employees more.

        The premise is that companies are owned by the employees, and hence get a cut of the _profits_.

        Corporate profits are already things the company does not have available to spend on things. They are always going on the door. It’s just, in this case, instead of going to unrelated owners, they would be going to employee-owners. (Whether they go as ‘wages’ or ‘dividends’ is a bit moot.)

        And I would wager there also would be some rejiggering and reduction of executive salaries, as that is almost entirely due to the incestuous CEO/board system we’ve built in this country that an employee-operate board is unlikely to put up with. But, that money is already going out the door too.

        This is exactly the dynamic that unions face today. To the success they exploit rents, they destroy market share. I can link you to studies which track the trend. Unions extinguish themselves to the extent they extract rents.

        I have no idea how you’re using the term ‘rents’. Supply labor in return for money is quite literally the opposite of ‘rents’ in my book. As is paying someone to negotiate on your behalf to get a better price for your labor. It’s not even forcing people into exclusivity contracts with you because you have something they desperately need, like union shop contracts are.

        ‘Rent’ is when you control something that requires _no or very little effort on your part_, and you require other people to pay to use it. Especially if that ‘control’ is just some sort of legal artifact and they’d be perfectly happy to not have you involved at all. ‘Rent’ is not a word that means ‘profit I don’t like’ or even ‘profit that is unethical’.Report

      • Avatar Art Deco in reply to DavidTC says:

        Same with exchange of labor for wages. I find it odd that progressives think labor needs help in the exchange. First it is odd that they perceive the laborer as at some kind of inherent disadvantage to employers in a reasonably large and free market.

        Second I find it odd

        Well, what gets them out of bed in the morning?

        “She’s the sort of woman who lives for others – you can tell the others by their hunted expression.”

        — C.S. LewisReport

      • Avatar Stillwater in reply to DavidTC says:

        As a classical liberal, I always find it odd that progressives choose favorites. In the sale of bread there is a buyer and a seller. Where the money and bread change hands a market price emerges.

        As a classical liberal, do you think progressives are choosing favorites when they advocate for SSM? If you do, is that advocacy arbitrary or is there a non-ad-hoc argument justifying that advocacy?

        Same with exchange of labor for wages. I find it odd that progressives think labor needs help in the exchange.

        A consideration of historical evidence might help you understand why progressives think this way.

        First it is odd that they perceive the laborer as at some kind of inherent disadvantage to employers in a reasonably large and free market.

        If you take a moment to consider the historical as well as actual asymmetries in information, bargaining power, leverage, flexibility, etc between the two, you probably wouldn’t find it odd at all. You would probably still disagree with progressives, but the perceived “oddness” of the view would dissolve.

        Second I find it odd that they believe addressing this perceived disadvantage leads to a better world.

        Why? If they think the perceived disadvantage is a bad thing, then as a matter of logic they think addressing it would be a good thing. I have a hard time believing you find that logical relationship “odd”. What I can easily understand, tho, is that you find the mechanisms (you think) progressives advocate to be counterproductive or even aligned with villany.

        Third, it is odd that they mis-perceive this interaction as a struggle between employer and employee. In reality it is a pure act of cooperative exchange….

        In the ideal case.

        The only conflict is on the terms of the cooperation, and the nemesis here is not the employer, it is the existence of competing applicants….

        In the ideal case.

        The heart of the competition is between candidates for a job, not between the employer and employee.

        In the ideal case.

        I honestly believe fewer than one in a hundred progressive gets this.

        Do you?

        Fourth thing I find odd is that my failure to share this world view or defective framework implies I secretly favor the employer. See point three why this is mistaken.

        Well, I don’t have any comment on that myself: I don’t think you “favor” the employer over the employee.

        I favor fair, transparent transactions that are voluntary with no coercion or fraud.

        Sure. I think everyone understands that so the disagreement isn’t about what you advocate. It’s about something else.

        If you want to argue that workers and employers would be better in a more free market, I agree.

        I think that’s what the something else is. People disagree about that, Roger, on a bunch of levels.Report

      • Avatar Mike Schilling in reply to DavidTC says:

        @roger

        That is, each transaction has a market price, which is the price at which that transaction occurs. Sure, I can’t argue with that, but it conveys no information beyond “every transaction occurs at some price.” You might as well say “Every job has a target height, which is the height of the applicant who’s eventually hired.”Report

      • Avatar Roger in reply to DavidTC says:

        @mike-schilling

        “That is, each transaction has a market price, which is the price at which that transaction occurs. Sure, I can’t argue with that, but it conveys no information beyond “every transaction occurs at some price.” You might as well say “Every job has a target height, which is the height of the applicant who’s eventually hired.””

        It conveys information on the tradeoffs between scarce resources — which is revealed by their transaction prices. This, along with pursuit of profit and avoidance of loss, leads people to dynamically respond to conditions in such a way as to create economic value for each other. A giant network of cooperation and exchange forms. Value is created — like magic!

        Your height analogy misses the point by about six feet. Nobody is selectively hiring for just for height. The information which is revealed at the intersection of supply and demand is that a worker of this skill will do this job under these conditions in exchange for this amount. The employer can compare this wage price to alternative actions, including hiring another worker or investing in a machine. This allows the employer to optimize resources. Similarly, workers can compare offers between employers and choose the best job. This creates a dynamic process which seeks an equilibrium and never achieves it as market conditions change and evolve.Report

      • Avatar Roger in reply to DavidTC says:

        Thanks for responding, Stillwater. And yes, I am stretching my case a teeny bit for arguments sake. Just a bit though.

        “If you take a moment to consider the historical as well as actual asymmetries in information, bargaining power, leverage, flexibility, etc between the two, you probably wouldn’t find it odd at all. You would probably still disagree with progressives, but the perceived “oddness” of the view would dissolve.”

        The historical evidence provides absolutely no ammunition that employees are at a systemic disadvantage in “a reasonably large and free market.” The historical evidence reveals that it is coercion, regulation and violation of free markets which harms whichever party happens to be weaker in that circumstance.

        History may reveal that at certain times and places that average wages are less than progressives think it should be. However, what they think it should be is something they pulled out of their asses. They made it up and are injecting it into the situation. Average profit is low or non existent some times too. Again the odd question is why do progressives choose sides in voluntary agreements?

        I do not buy the implications of the asymmetry of information and bargaining power arguments, but am glad you brought them up. In a reasonably large and free market, if an employer offers one dollar below market clearing price for that quality of worker, every other prospective employer can “steal” these employees from the skin flint employer by bidding up the wages. Thus they will bid the error away until the employee gets an offer for the place where supply meets demand.

        Bargaining power is not something which plays out between the employer and the employee as much as between prospective employees (or between competing employers). Again, the fundamental framework is wrong. It is like saying I am getting screwed by Walmart when I shop there because they are so big and powerful. What keeps Walmart honest is Target and the threat that I will shop there instead.

        Note I am not arguing that markets couldn’t work better if it was somehow easier to change jobs or fire workers. They would, in both cases.

        If you think the dynamic only works in the ideal case then I disagree. It just works better in the ideal case. But the logical move here is to make the situation more ideal, that is to free markets more and remove barriers and regulatory capture.Report

      • Avatar Mike Schilling in reply to DavidTC says:

        Nobody is selectively hiring for just for height.

        Try telling that to Doug Flutie.Report

      • Avatar Roger in reply to DavidTC says:

        @davidtc

        For a company to be owned by the employees they have to either buy it, steal it , or get it in lieu of other wages and benefits. There is absolutely nothing preventing buying it or getting it along with lower wages today. Lots of companies have profit sharing paid in company stock plans. Old news.

        I disagree that most employees would rather be paid primarily in stock than wages. Plus, to the extent they do, they are putting all their eggs in one basket. Usually a risky move. The other defect here is to assume the employees have any useful feedback as owners that they can give only as owners and not as employees.

        Finally, note that getting a share of profits means getting a share of the losses and owning the risk of bankruptcy. Most prudent employees if paid primarily in stock would logically sell it.

        I won’t restate the definitions of rent seeking. The initial post did so wellReport

      • Avatar Stillwater in reply to DavidTC says:

        “Nobody is selectively hiring just for height.”

        From Wiki:

        Some jobs do require or at least favor tall people, including some manual labor jobs, law enforcement, most professional sports, flight attendants, and fashion modeling. US Military pilots have to be 64 to 77 inches (160 to 200 cm) tall with a sitting height of 34 to 40 inches (86 to 100 cm).[10] These exceptions noted, in the great majority of cases a person’s height would not seem to have an effect on how well they are able to perform their job. Nevertheless, studies have shown that short people are paid less than taller people, with disparities similar in magnitude to the race and gender gaps.[11][12]

        A survey of Fortune 500 CEO height in 2005 revealed that they were on average 6 ft 0 in (1.83 m) tall, which is approximately 2.5 inches (6.4 cm) taller than the average American man. 30% were 6 ft 2 in (1.88 m) tall or more; in comparison only 3.9% of the overall United States population is of this height.[13] Similar surveys have uncovered that less than 3% of CEOs were below 5 ft 7 in (1.70 m) in height. Ninety percent of CEOs are of above average height.[14]Report

      • Avatar DavidTC in reply to DavidTC says:

        @roger
        For a company to be owned by the employees they have to either buy it, steal it , or get it in lieu of other wages and benefits.

        Uh, yeah, they’d be getting it in lieu of other wages. In lieu of _increased_ wages.

        However, I’ve finally figured out the confusion here: You think increases in wages would be coming from operating expenses.

        Most people here are assuming they will come from the massive salaries that CEOs make, or out of company profits. The company would keep operating with the money it has, the unions would just demand that more outgoing money go it instead of management or owners.

        This actually seems so utterly obvious no one bothers to actually _say_ it.

        The other defect here is to assume the employees have any useful feedback as owners that they can give only as owners and not as employees.

        Speaking of things coming out of operating expenses, it is _corporate profits_ that, all too often, come out of operating expenses, to ‘bump up’ shares. As part of the general trend, whereupon a company cannibalized itself for a small stock bump, selling facilities and laying off workers.

        Employee-owned corporations, presumably would be less likely to do that, so they probably _would_ manage themselves better, or at least equally as well.

        Of course, there is the hypothetical new mismanagement problem in that the _workers_ could cannibalize the company with too-high wages, or stock dividends. OTOH, I’d rather companies dismantle themselves into the hands of their employees than dismantle themselves into the hands of the superrich. (Cue accusations of class warfare in 3…2…1…)

        Finally, note that getting a share of profits means getting a share of the losses and owning the risk of bankruptcy. Most prudent employees if paid primarily in stock would logically sell it.

        You’re assuming payments in some sort of standard stock, which could be resold. But there are a _lot_ of ways to structure stock.

        Hell, you could even have the union itself own the stock. Or it not even be ‘stock’…perhaps each employee is simply give the equivalent of one shareholder’s vote for every 100 hours work the previous year.

        Trying to figure out what it would eventually look like is a bit silly.

        I won’t restate the definitions of rent seeking. The initial post did so well

        And as I pointed out, assuming that unions being ‘rent seeking’ is not at all obvious.

        Rent-seeking, in the original post, appears to be meaning ‘If people would do it for less, anything about that is rent. This is a fairly stupid definition of rent seeking, but, even under that…if corporations will pay what unions ask for (And they pretty much will pay by definition, because if they won’t pay lower, they _don’t_ pay lower. So the union instead either aims lower or ceases to exist.) than that means that unions aren’t rent seeking.

        Of course, the obvious problem in that assumption is that i turned it around backwards from how you had it (If people will work for less, than anything about that is rent), which points to the rather obvious stupidity of that definition. Namely, prices are a _range_, and the solution in an ideal world is not to pin them to one end and call anything else ‘rent’. (As that is literally impossible, simply because, from the other direction, it’s _not_ the lowest…it’s the highest.)

        Rent-seeking, in the _actual_ universe, is when entities attempt to get get something for nothing or almost nothing. It’s when a piece of paper, a monopoly, a regulation, entitles them to something they would not otherwise have, or, in a free market, would have made a lot less.

        It’s not when they _freely_ negotiate prices slightly higher than one entity would have accepted…because ‘negotiating prices slightly higher than one entity would have accepted’ is literally _every single transaction that exist_.

        In any free market exchange, each person thought they came off better than before (duh), and hence they almost certainly would have accept some slightly lower amount. That ‘excess’ is not ‘rent’ as both you and James Hanley seem to be defining it. (Or alternately, as you are defining it and he’s poorly explained something else as.)Report

      • Avatar Roger in reply to DavidTC says:

        David

        I agree that we are operating under completely different assumptions and definitions.

        I will agree that the idea of employee owned companies is very interesting. I would love to see more experimentation here.Report

      • Avatar Rod in reply to DavidTC says:

        @roger , you might want to check out Mondragon Corporation.

        The MONDRAGON Corporation is a corporation and federation of worker cooperatives based in the Basque region of Spain. It was founded in the town of Mondragón in 1956 by graduates of a local technical college. Their first product was paraffin heaters. Currently it is the seventh-largest Spanish company in terms of asset turnover and the leading business group in the Basque Country. At the end of 2012, it employed 80,321 people in 289 companies and organizations in four areas of activity: Finance, Industry, Retail and Knowledge.[1]

        Report

      • Avatar Roger in reply to DavidTC says:

        Thanks Rod. Never heard of this one. Very cool.

        Isnt United partly union or employee owned?Report

  3. Avatar Kazzy says:

    “I’m not a god…”

    Well, there is your problem. Not necessarily being not a god, but admitting it.

    Two questions:
    1.) Why do you have a section about why liberals might get on board but not a corresponding section for conservatives? Is it your assumption that conservatives would be more likely to support the amendment?
    2.) When it comes to occupational licensing, is the objection to their mere existence or what they are artificially limited? Speaking only for education, I know that there is no cap on the number of licenses. So their requirement doesn’t necessarily curtail corruption. And my experience tells me that they are certainly not a form of rent-seeking on behalf of teachers unions as teachers unions generally oppose the licensing and credentialing system. Of course, they have their own forms of rent-seeking and competition-limiting behavior they prefer, so they aren’t without fault.

    Public education presents perhaps a unique situation because the government is the employer and thus their licensure requirement is essentially stating their own minimum requirements in a standardized format. It would seem odd for the government to say, “We are going to employ these people, but we’re going to ask an outside, private agency to determine whether they are of sufficient quality.”Report

    • Avatar J@m3z Aitch in reply to Kazzy says:

      Conservatives claim to be free market. They’re not, in my mind, as much as they are pro-business. But I still think it’s easier to get them on board with this. Plus, in this post I’m primarily speaking to OTers, of whom there are, I think, few conservatives who would object to the general idea.

      As to your other question, that’s a good distinction. I think again it comes down to intention and effect. A standard may not facially be geared toward the purpose of limiting for limiting’s sake, but could have that effect. Or in other cases it might not. I think the key would be in distinguishing whether the standard was really rationally related to a goal other than limiting entry, and whether it achieved that goal without unduly limiting entry (where “unduly” is one of those legal weasel words meaning, “in this case we think it’s within allowable tolerances”).Report

      • Avatar Kazzy in reply to J@m3z Aitch says:

        That make sense.

        I should also make clear that I might seek to carve out an exemption for public schools not because education is unique, but because the public system is.

        The private system(s) of education function rather well without government regulation (save for some very basic things, like child:adult ratios for young children). Their oversight bodies are private entities and state certification is required only if a particular school opts to use it as such.

        Whereas I do think medicine might be unique enough on its own right to qualify as an exemption, education itself is not, but the public education system might be.Report

      • Avatar Kim in reply to J@m3z Aitch says:

        Kaz,
        We talking “Teach for America” style credentials, or the full BA in Teaching? (is that BS?)Report

      • Avatar Scott Fields in reply to J@m3z Aitch says:

        @jm3z-aitch

        I had the same question as Kazzy on the lack of selling points for conservatives. Because you are right that Conservatives are more pro-business than free market, I’d think they’d have massive problems with Sections 3 and 4.

        If pro-business factions were okay with Sections 3 and 4 that would throw into question the whole amendment for me, as that would indicate business was confident that the systemic advantages they’ve secured through collusion with government would survive the amendment mostly intact.Report

      • Avatar Kazzy in reply to J@m3z Aitch says:

        Kim,

        I’m not sure I understand your question. TFA teachers, like all public school teachers, eventually need to acquire the necessary credentials in their state.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Scott,

        I think conservatives are pro-business in practice, but can normally be brought to realize when they’re going against their expressed beliefs (especially if you point out that favoring Joe’s Business hurts Bob’s Business, so they’re not really protecting “business”).

        That’s what I’m banking on, anyway. Perhaps I’m being a bit naive, though, and need to bulk up that side of the argument.Report

      • Avatar Roger in reply to J@m3z Aitch says:

        I would just add that absent TVD there really aren’t any conservatives that argue much on this site any more. When we attack conservatives nowadays we get…. Crickets.

        Some of the major “victims” of this are big agriculture, which has a heavy influence in the early primary states with the GOP. Seems to me this is the type of amendment that republicans would give great lip service too while killing off in a back room.Report

      • Avatar Patrick Bridges in reply to J@m3z Aitch says:

        They wouldn’t have to kill it a back room. It only takes 13 states opposed to keep any amendment from passing. How many rural states receive significant farm subsidies and so would never pass it? Just look at the list of states that are top recipients of farm subsidies (http://farm.ewg.org/progdetail.php?fips=00000&progcode=total&page=states&yr=2012&regionname=theUnitedStates), and do the math yourself.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Patrick,

        That’s why we quickly shift to saying, “Oh, won’t somebody think of the children who are going to grow up with weak bones because the milk-rent’s too damn high?”

        Run ads showing a farmer in a brand-spanking new combine, with tuxedo-style overalls, running over hungry little children on the way back to a 5,000 square foot marble-columned farmhouse.

        For the bigger recipients of ag subsidies, it’s pretty close to the truth.Report

    • Avatar Mad Rocket Scientist in reply to Kazzy says:

      James, when someone asks you if you’re a god, you say “YES”!Report

  4. Avatar NewDealer says:

    On Intellectual Property:

    What about trademarks? Obviously this is not a super-important part of the Intellectual Property reform system because most of the focus is on patents and copyright. In theory a trademark can last in perpetuity but it has to be in use and not common lingo. Bayer famously lost the trademark on Aspirin because it just became a common way to refer to any headache medicine. Xerox spent a lot of money to keep their trademark because Xerox was about to become common slang for “make a copy.”

    I think this section is going to damn you. As I understand it most copyrights and patents are not worth much beyond their original time frame if not before then. The NY Times used to like to print the wackier patents granted during their annual Year in Ideas issue. However there are some copyrights that are worth holding in perpetuity like Harry Potter, Mickey Mouse, Spiderman, Superman, etc. The comics are almost a loss leader and the real profits come from licensing and merchandising agreements. So Big Media is going to be deadset against this.

    Though I think a world with Mickey Mouse in the public domain would be a rather interesting one.

    On Unions:

    Would corporations be able to use this amendment to prevent strikes? Say a union votes overwhelmingly to strike (65 percent of members or more). Would their free speech rights trump or would or would this amendment?

    Other questions:

    Are do not compete and do not recruit agreements forms of rent-seeking or agreements between two parties?Report

    • Avatar J@m3z Aitch in reply to NewDealer says:

      Trademarks…yeah, forgot about them. Would the lack of mention lead the Court to conclude the status quo stands with them, or would it lead it to conclude that the amendment intends to ban them? Thoughts?

      Prevent strikes? No, I don’t think so. But the strikers would not legally be able to prevent anyone from crossing the picket line.

      Do not compete agreements. Interesting. They’re technically private-party contracts, so would seem to be outside the scope of this. But they’re enforced by government so by analogy we could treat them like restrictive covenants and say they can’t be enforced, right? But that seem a bit of a stretch to me, especially as unlike restrictive covenants they don’t pass down in perpetuity, so I’d say they’re private party contracts and outside the scope of the amendment.Report

      • Avatar Cathy in reply to J@m3z Aitch says:

        I think by the fact that of the phrase “intellectual property rights,” the subsequent time limits would be applied to trademark as well. Given “use it or lose it,” and the way trademarks are (usually) used, I’m not sure that’s necessary or even desirable. Maybe a change to “copyrights and patents” instead?Report

      • Avatar NewDealer in reply to J@m3z Aitch says:

        This is the California view on DNC/DNRs:

        “16600. Except as provided in this chapter, every contract by which
        anyone is restrained from engaging in a lawful profession, trade, or
        business of any kind is to that extent void.”

        From the Business and Professions Code.

        There are a few exceptions but California has been pretty hardcore on this since 1872. I’m rather fond of their stance.Report

      • It’s worth pointing out that trademarks provide consumer protection while the other two are primarily for the sake of innovators. You can say “Well, fraud laws would prevent HTC from releasing a phone called the iPhone…” but I think trademark laws do a lot of the heavy lifting there. It allows Apple to enter into an understanding with the consumer: if you trust Apple, you can trust products with our name and logo on them. If you like the iPhone, here is how you know whether you are buying an iPhone or something else. The companies that own the trademarks are the gatekeepers, as with patents and copyrights, but I’d argue that the consumer is served as directly as the corporation, in this case.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Cathy, good point. I agree.

        ND, interesting. I doubt the amendment would supersede that in any way.Report

      • Avatar LeeEsq in reply to J@m3z Aitch says:

        @jm3z-aitch, New York state courts are not really that big on do not compete agreements, especially when they are aimed at former employees. Its viewed as robbing people of their livelihood. They are still a standard clause in many contracts but its not something that courts like to enforce.Report

      • No, I don’t think so. But the strikers would not legally be able to prevent anyone from crossing the picket line.

        Isn’t this largely the way things are now? Under the present regime, if I understand correctly, striking employees can suspend work (if it’s a “legal” strike), but employers usually can hire replacement workers (although I understand there are some legal limits on their ability to do so), and strikers are not legally permitted to forbid crossing of picket lines.Report

    • Avatar ScarletNumbers in reply to NewDealer says:

      Bayer famously lost the trademark on Aspirin because it just became a common way to refer to any headache medicine.

      Actually they lost the trademark as part of the reparations of WWI. The trademark still applies in Canada, among other places. #TheMoreYouKnowReport

  5. Avatar Cathy says:

    By what standard is this being judged? If anyone can think of any way, even a slight or future effect, in which the law MIGHT privilege one group over another, in practice, is it invalid? Or does this just take aim at laws that do so on their face? If A, that leaves room for endless litigation and an effective stripping of a lot of regulatory power, notwithstanding Section 2. If B, that’s a glaring loophole.Report

    • Avatar Cathy in reply to Cathy says:

      Oops, HTML fail. I meant to ask: “Neither Congress nor any state or political subunit of a state shall make any law privileging any business, firm, industry or economic competitor (potential or real) over any other.” – By what standard is “any law privileging any business over any other” being judged?Report

      • Avatar J@m3z Aitch in reply to Cathy says:

        That’s why I stuck in the reference to Article 1, section 8. If the law clearly has purpose and effect of a general regulation, then it will be legitimate.

        E.g., a new fire safety code in retail stores might work to the detriment of small mom and pop stores that can’t afford to upgrade, and so to the benefit of Wal Mart, Target, etc. But that’s not rent-seeking (unless, perhaps, that trial discloses that Wal Mart, Target, etc. lobbied for the enhanced code, instead of just enhancing their own fire safety); it’s just a general regulation that is a cost of business that not all firms can manage to meet.

        Conversely, a law that said all retail establishments had to have parking lots capable of holding 1,000 cars would clearly have no general public purpose, but would be designed to benefit Wal Mart, etc., at the cost of Joe’s Bait Shop.

        In the middle grounds, with less clear cases, it becomes a balancing act. I don’t expect many people to find that a particularly comforting answer, but the fact is that the Court uses balancing acts all the time in deciding whether a rule manages to nudge its way on to the legitimate side of things, or whether it’s across the vague line of illegitimacy.Report

      • Avatar Cathy in reply to Cathy says:

        That makes sense. The existence of a balancing test deals with a lot of “but what if EDGE CASE?!” hypos, if one has faith in the courts to look at realities (or Congressional findings, not necessarily the same thing) and use common sense.

        The details of your reply bring up another issue, though; if we really expect the fact of lobbying(as opposed to its content, but nobody would ever admit to lobbying against their competitors) to figure into the judicial balancing test, where it weighs against the thing being lobbied for, doesn’t that present a First Amendment issue? Not directly, but in terms of chilling speech? I’m all for addressing the lopsided character of lobbying, but having a venue for various interest groups to address the government isn’t inherently a bad thing.

        You did address this issue in the comment on Part 1, I believe (something about targeting rent-granting, not rent-seeking per se), but while the text of the amendment doesn’t by itself generate a problem, if the interpretation is that your speech to the government can effectively weigh against you in court… I’m not sure I like that. Even if it is Big Business’s lobbying money that seems most directly implicated.Report

      • Avatar J@m3z Aitch in reply to Cathy says:

        Cathy,

        Somewhere in the other thread I mentioned the Church of the Lukumi Babalu Aye v. City of Hialieah, Florida (best case name everrrrr!). The church is of the santeria faith, and practices the sacrifice of chickens. The city passed a law that superficially appeared to be general purpose, limiting the killing of chickens to licensed butchers in their shops. But there was plenty of indication from the words of city councilmembers and citizens speaking at meetings that the real purpose was to stop the church’s animal sacrifices.

        The Court relied, in part, on that evidence. Is that chilling of protected speech by those who dislike very non-mainstream religious practices? Arguably so, I guess. But nobody is targeted for their speech, they suffer no repercussions. So I don’t think the chill rises to a constitutional level.

        I could still freely go to my state rep and beg him to pass a law protecting me from competition, and I’ll never be punished in any way.Report

  6. Avatar Rod says:

    I’m curious how this might affect the Right-to-Work laws as they currently exist. Conta the astroturf naming and stated intent by proponents, they’re anything but neutral or just establishing a level playing field. One of the worst provisions I’m aware of compels a union to represent all employees, whether they are members and pay dues or not. This clearly sets up a situation whereby it’s obviously advantageous for any employee to claim the advantages of union membership without paying for it. That sure looks like a rent situation to me.Report

    • Avatar J@m3z Aitch in reply to Rod says:

      That’s an interesting question. I might defer to others, or would at least like to hear from them, but at least facially I think you might have a good point there.

      Anybody who’s spent more time thinking about unions than I have want to wade in here? Does that type of right-to-work law actually provide special privilege to the business by making it harder for unions to recruit dues-paying members?Report

      • Avatar LeeEsq in reply to J@m3z Aitch says:

        @jm3z-aitch, right to work laws makes it harder to organize workers by creating a situation where union’s have a free rider problem. If a worker could get union benefits without paying union dues, why join a union is the logic behind the laws. Combined with other artificial difficulties placed in the way of unionization it works.Report

      • Avatar LWA in reply to J@m3z Aitch says:

        Which is the logic behind people’s right to distort the market, to intervene in contracts when they perceive the outcome as being harmful to the public interest.

        The market fundamentalist logic- “We will make a level playing field and let the chips fall where they may”- assumes that the people should not have this power.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        The market fundamentalist logic

        Good, LWA, good. As long as you get to define me with pejorative labels you don’t actually have to make a substantive argument.

        That’s how it works, right?Report

      • Avatar North in reply to J@m3z Aitch says:

        I agree with Lee and Rod, I think you’re underestimating the ways your ammendment could conceivably help unions in the US James.

        There are regulations a mile long fencing and penning in the allowable actions and times that unions may disrupt or pressure management to deal with them. I can’t see how any of them could stand judicial review* under your new ammendment since they all effectively privledge capital over labor.

        *This is assuming that they’d be able to get a fair shake at it. You might be surprised how opposed businesses and pro-business conservatives might be to your ammendment if they honestly thought that their long con on labor was coming to an end. This is without even factoring in agribusiness.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        I agree with Lee and Rod, I think you’re underestimating the ways your ammendment could conceivably help unions in the US James.

        There have been a truly amazing variety of cases people have brought up in these threads, and I’m truly gratified by that. It’s been great to have the opportunity to clarify some cases, and also to be forced to think about challenging cases I never thought of on my own.

        But this, the potential benefit to unions, is the one that has caught me the most off-guard. That I had underestimated the potential benefit is a bit stunning to me. I wanted to be cautious about overselling it, because I knew damn well pro-union folks would (rightly) jump all over me if I did, but this is about more than me being cautious; I just didn’t really imagine this kind of thing. It’s fascinating. I’ve known union folks who grumbled about how business friendly laws relating to unions in the U.S. are, but it’s just not an area of study for me, and so I wrote their grumbling off as akin to the grumbling from businessmen about how union friendly labor law is in the U.S.* I think I should start listening more carefully.
        __________________________________
        * Not that I am in any way adamantly opposed to unions–I’m all in favor of voluntary organizations of people with common interests, and I have been a negotiator for my own union–but for both my wife and me, our experience with unions has been, less than pleasant. Both of us as children had parents out of work for considerable periods of time due to un-strategic union actions, with financial costs that were never recouped by the marginal gains the action secured. And in one place where we both worked, our unions (we were in different ones) were dominated by the type of people who were perfect case studies for Hayek’s chapter about why the worst get on top. In her case, people of appalling stupidity and pettiness; in my case a guy who had phenomenal political skill (awe inspiring, in fact), but who I would classify as evil, even Stalinesque. So from personal–and perhaps idiosyncratic–experience, we have a tendency to be as distrustful of union folk as we are of businessmen who promise us their first concern is the customer.Report

      • Avatar Dan Miller in reply to J@m3z Aitch says:

        @jm3z-aitch I have a fundamental problem with all of these arguments that this will end up being great for unions, which is that it has to be interpreted by the current courts. I would not be at all surprised to see them destroy all the pro-union implications of this, while leaving the anti-union implications intact. It seems like a very risky move at best, with little realistic upside for the labor movement and the chance to end horribly.Report

      • Avatar Roger in reply to J@m3z Aitch says:

        I am not following the logic here. Assuming this amendment favored unions, why would that be a bad thing? Or said the other way, wouldn’t it be a good thing?

        On the other hand, I do not understand why it would be pro union. This seems to assume it is regulations which effectively prohibit widespread unionism today. My reading of economics is that the real nemesis of widespread flourishing of unions is in one word COMPETITION. To the extent a union becomes a CARTEL (which is a bad thing for economically empirical reasons), then the cartel is exposed to dynamic forces which virtually guarantee it’s long term collapse absent state privilege or violence. (James already touched on these in his prior post).

        Said another way… Unions can only achieve wages, benefits and working conditions substantially above the market clearing price by rent seeking. An amendment against rent seeking effectively guys their ability to operate as a cartel. It also would prohibit the employers from operating as a cartel, if that helps.Report

      • Avatar Kim in reply to J@m3z Aitch says:

        Roger,
        to what extent do you think that a union enforcing health safety standards is asking for a wage above the market?

        To what extent is black lung an unaccounted for externality?Report

      • Avatar Roger in reply to J@m3z Aitch says:

        I think unions asking for better or safer work environments is a great thing. This is exactly the type of things unions should do to represent workers.

        Do note that supply and demand establish whether positions are filled. As working conditions improve, the clearing wage and benefits, all else equal will be lower.

        Thus when a union represents workers and says safety is more important they are also saying wage levels are less important. They are dealing with trade offs, ones which the workers themselves experience.Report

      • Avatar Kim in reply to J@m3z Aitch says:

        Roger,
        I think you’ll find that O’Neill’s example at Alcoa shows that you can increase (or at least hold steady) wages while increasing worker safety (the hidden variable being “workers compensation”, which is inherently semi-random).
        It’s also an excellent example of a CEO using the union as an ally, rather than as an opponent.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Dan,

        True, true. I’ve been eager to emphasize that point all along, so I can’t pretend otherwise now.Report

      • Avatar North in reply to J@m3z Aitch says:

        @Roger I think you’re highly uncharitable to unions. Unions are, fundamentally, organized labor; corporations are, fundamentally, organized capital. I do not see how you could be so sanguine about one but assume that the other can only operate as a cartel.

        You also seem to not be aware of how heavily Taft-Hartley restricts the activities of unions. Honestly, unions are massively regulated organizations, restricted enormously in how they are allowed to organize, operate and above all how they are allowed to put pressure on corporations. In that these regulations privilege organized capital (corporations) over organized labor I do not see how any court* would be able to let those regulations stand under the rule of the Prof’s suggested amendment.

        I’m fascinated watching you make such blanket statements about the only ways unions can bring their influence to bear when you simultaneously extend such charity to corporations under the banner of innovation, market freedom etc. Do you honestly think that it’s impossible that unions, freed from heavy regulations, might develop into new forms that’d allow them to serve their traditional role of counterbalancing the interests of capital? Do you honestly think that’d be a bad thing?

        I can’t say with certainty that unions in such a new deregulated environment would suddenly flourish but I certainly don’t think that it’s impossible or deplorable that they would. I have to admit I’m surprised that you seem to take that position. It’s not like unions don’t fill massively useful and constructive roles in other forms, Germany for instance.

        Prof, yeah I’m surprised you hadn’t considered the union impact. That said it’s all very theoretical so some of the other commenter’s points that there’d be real existing liberal sacred cows getting gouged and only theoretical liberal benefits still stands as a cautionary.

        *Assuming the court was not captured by corporate interests.Report

      • Avatar Roger in reply to J@m3z Aitch says:

        @north

        You really, really need to reread what I wrote. Your reply reads like you are responding to a comment that has been garbled through four or five versions of telephone tag. I started by saying they are “a good/great thing.” Twice. Go look. I was not being facetious.

        I did not say they can only operate as a cartel. I said that the only way unions can succeed in achieving “substantially above market” wages and benefits is as a cartel, and that the only way the cartel’s success can be maintained is by rent seeking or violence. The phrasing is critical.

        You are assuming that the only value I believe a union can add is to achieve above market (RENT SEEKING) wages. I disagree and said so above. Unions can act as representatives for employees this can lead to more efficient benefit packages.

        “You also seem to not be aware of how heavily Taft-Hartley restricts the activities of unions.”

        It actually doesn’t matter to my argument. I am aware of regulations, but you are making the assumption that absent regulations that unionized employees will — note the key phrase here — make above market wages. This is incorrect. The final wages may be higher or lower after the regulations are eliminated, because market conditions change, but unions will be unable to achieve wages substantially above the market at that time. Is the distinction clear?

        You then accuse me of being “sanguine” about corporations as compared to unions. No. I specifically mentioned that corporations (employers) will not be able to form cartels either. This too is a great thing. Producers will not be able to earn above market profits, nor to pay below market wages.

        “I do not see how any court would be able to let those regulations stand under the rule of the Prof’s suggested amendment.”

        My best guess is that you are assuming I am arguing that wages will not be higher than they are today after this amendment. I am making no such argument at all. I have no idea what wages will be after this amendment. You are arguing against an opinion I do not hold and did not make.

        “Do you honestly think that it’s impossible that unions, freed from heavy regulations, might develop into new forms that’d allow them to serve their traditional role of counterbalancing the interests of capital? Do you honestly think that’d be a bad thing?”

        Again, I said unions are a great thing. How does that get converted to a bad thing? I said rent seeking cartels are a bad thing.

        “I can’t say with certainty that unions in such a new deregulated environment would suddenly flourish but I certainly don’t think that it’s impossible or deplorable that they would. I have to admit I’m surprised that you seem to take that position.”

        Because I didn’t and don’t.

        Let me be clear. I think unions are great. I think rent seeking sucks. With this amendment the rent seeking would stop. As such, unions could no longer function as a device to achieve substantially above market wages. They could certainly survive in another capacity, and that would be awesome. Really.Report

      • Avatar DavidTC in reply to J@m3z Aitch says:

        Does that type of right-to-work law actually provide special privilege to the business by making it harder for unions to recruit dues-paying members?

        Right to work laws _deny_ unions privileges that all other corporations have as a matter of course: To enter into exclusivity contracts as they so choose.

        I.e, it is legal for Coca-Cola to present a contract to McDonalds saying McDonalds will only sell Coke products in their restaurants as one of the clauses of the contract. (Probably for lower prices from Coke, but it can be for whatever consideration the contract may offer.)

        In my state, a ‘right to work’ state, it is _not_ legal for a union to present a contact saying that McDonalds will only hire union works. Hell, it’s not even legal for a union to present a contract saying McDonalds will _pay_ the union anything. (The union, instead, collects union dues from people who have bothered to join the union.)

        So it’s less a special ‘privilege given to corporations’, and more a denial, to unions, of the basic right to enter into any contract they feel like. I.e, it would be a violation of laws that ‘serves to create a barrier to entry to any industry or occupation’Report

      • Avatar North in reply to J@m3z Aitch says:

        I apologize if I’m misreading you Roger but aren’t you talking in circles here? If a union can get a higher wage for its members then that wage is by definition the market wage for unionized workers. I can imagine multiple ways a union could achieve such a benefit for its members without rent seeking, worker quality, higher productivity, forcing capital to pay for increased productivity instead of merely permitting it to pocket it in higher profits.

        You still seem to take the position that it isn’t regulation but rather competition that is sinking unionism which feels like base stealing to me since I don’t believe it’s been established definitively what exactly is hampering unionism overall. That said I’m delighted you’re more pro union then I initially read you as sounding.Report

      • Avatar Roger in reply to J@m3z Aitch says:

        All is good, North. I have the highest respect for you and I am aware my writing is often unclear.

        ” If a union can get a higher wage for its members then that wage is by definition the market wage for unionized workers. I can imagine multiple ways a union could achieve such a benefit for its members without rent seeking…”

        I can imagine benefits as well and mentioned them to Kim. Unions will need to adapt and evolve in this direction to survive. Perhaps doing so will even allow them to flourish in a new and more benign way.

        The amendment only prohibits cartels, restrictions on competition, and government granted privilege being used to achieve above market wages. Successful unions today can and do achieve higher wages for members via these types of rent seeking activity.

        “..forcing capital to pay for increased productivity instead of merely permitting it to pocket it in higher profits.”

        The amendment would eliminate the ability to “force” employers to do anything (and vice versa!). Unions could certainly request pay for productivity contracts, and employees could certainly try to do so collectively (they cannot “force” employees to do so though)

        “You still seem to take the position that it isn’t regulation but rather competition that is sinking unionism….”

        Competition and freedom of entrance into the market is the nemesis of rent seeking. To the extent unions today use government granted privileges to restrict entry into a profession or require union membership, then they are acting as rent seeking organizations and the force which will offset this is market dynamics. If a union captures one firm or factory with government aided privilege and achieves wages above that dictated by supply and demand, then any other firm or factory will have a competitive advantage all else equal. The market will adjust over time and market share will move to those factories, firms and industries which are not captured by rent seeking unions.

        Competition undermines rent seeking unions. (Rent seeking anything) This is a logical argument and one which James made explicit, but in terms of unions I have supported it in the past on these pages with various empirical studies. I can supply them again.

        Competition does not undermine benign unions as described above.

        You are correct that rent seeking regulations can also work the other way — preventing unions from forming. But absent any government privilege, we already agreed the rent seeking unions self implode. It is thus only benign unions which are being interfered with.

        So yes absent any privilege granting, there may be substantially more unions of a different and more constructive type. This would be a good thing.Report

      • Avatar Patrick Bridges in reply to J@m3z Aitch says:

        North: Roger, I think you’re highly uncharitable to unions.
        Roger: Competition does not undermine benign unions

        Roger, you do realize what most liberals will think you’re saying about modern unions when you call your ideal unions benign, right? The perceived libertarian attitude of historical and modern unions as malignant is exactly why liberals will never sign onto something like this; phrasings like this simply reinforce liberal preconceptions that libertarians are merely crypto-neocons.Report

      • Avatar Roger in reply to J@m3z Aitch says:

        Patrick,

        Rent seeking is malignant.

        The best justification I can imagine being presented pro rent seeking is as a counter force to other systemic disadvantages. This was my first hypothetical argument to James on his intro. I am surprised the progressives at this site have not used it more in opposition.

        If YOU want to argue that rent seeking (forming government backed cartels) is a good thing, then lay it out there. Be specific. Feel free to borrow my suggested line of attack as above. Let’s bring it out to the light of day….

        If you think my opposition to rent seeking is “crypto neocon” then I suspect you are not getting why classical liberals reject coercive interference with market competition.

        I am against union rent seeking, corporate rent seeking, producer rent seeking, public employee rent seeking, consumer rent seeking. I am even against rent seeking to offset rent seeking.

        I am against rent seeking in all its manifestations. The reason is because it reduces the potential productivity and efficiency of human cooperation. It is a form of exploitation. It is malignant. It makes humanity less effective.Report

      • Avatar Patrick Bridges in reply to J@m3z Aitch says:

        @roger I think you’re mistaking a critique of your ideas with a critique of a presentation of your ideas.

        In terms of content, I agree that rent-seeking is toxic, and am interested in approaches to curtail it. James proposed doing so by restricting the granting of rents; it’s an intersting approach, though I have my concerns with it. The discussion of what it prevents unions from doing is interesting, as is the discussion of what it prevents employers from doing. The contrast to campaign finance reform that seeks to directly prevent rent-seeking itself is also interesting.

        In terms of presentation, though, it really matters how you present your ideas if you want to engage in productive conversations with progressives, as opposed to saying things which will close down conversations. When you critique rent-seeking behavior by unions (or government against unions!) as malignant, progressives may listen. When you say that modern unions have primarily used rent-seeking behavior to achieve their aims, that’s hard to argue with. When you say that, under James’s formulation, unions would have to use a different set of techniques to achieve their aims but could have different techniques available to them, too, that can lead to productive discussions.

        When you, however, state things that come across to a stating that unions themselves are malignant, don’t be surprised if you don’t get a constructive response from a modern liberal/progressive.Report

      • Avatar Roger in reply to J@m3z Aitch says:

        @patrick-bridges

        I am quite content with where the conversation went. As you can see, I believe we should be as concerned with our support of rent seeking as we would our support of racism or theft.

        If unions are being used as a malignant force — which we apparently all agree that rent seeking is — then unions are being used in a way which is harmful to general prosperity. I am indeed pushing this uncomfortable fact out there.

        Progressives can attempt to defend it (none have yet), or we can all hope that unions evolve into a more benign type of entity.

        Right?Report

      • Avatar Patrick Bridges in reply to J@m3z Aitch says:

        Roger, I’m telling you what tends to put my hackles up as someone who has a more progressive bent than you do. I’m generally more sympathetic to libertarian arguments than most progressives/liberals, and your phrasings sometimes irritate me in ways which make me either want to stop posting or respond, um, non-constructively. I’m trying to avoid both of those outcomes, and a little help would be appreciated. 🙂

        If unions are being used as a malignant force — which we apparently all agree that rent seeking is

        You seem to have a particular disdain for rent-seeking by unions; I haven’t heard you speak of “large companies as a malignant force” despite the fact that basically every large company rent-seeks. That difference in attitude seems to be that if a big corporation rent-seeks, it’s unfortunate but understandable, but if unions do so, it’s malignant. That’s pretty striking to me. Maybe I’m wrong (it happens often), but that’s just how it comes across to me.

        Let me make a simple proposition: Neither unions nor employers should be blamed for rent-seeking today!

        Why not? The relationship between a union and an employer in this case is a classic prisoner’s dilemma. Unions rent-seek because they believe it’s in the best interests of their members if employers rent-seek. Employers rent-seek because they believe its in their best interests if their employees rent-seek. Both the union and the company would be better off if neither used government-granted rents against the other, but neither can rely on this, however, so they both engage in rent-seeking.

        That’s a main reason why what James proposes is so interesting – it changes the equilibrium in this game in a way that could be better for both sides.Report

      • Avatar Roger in reply to J@m3z Aitch says:

        Patrick,

        In three years of posting here I have never once said a kind word toward rent seeking by any entity. I have bemoaned corporate rent seeking constantly, including several times in this thread and once in my above comment to you. I totally believe corporate rent seeking is much worse than union. Much, much worse. A classical liberal or libertarian doesn’t need to highlight their disdain for rent seeking. You can pretty much take it as an article of faith.

        That said, the reason nobody is discussing corporate rent seeking is that there is nothing to discuss. Nobody on this web site is pro corporate rent seeking. It is a non issue. It is like asking why I am not arguing against killing babies. There is no debate to be had as nobody is going to argue the pro side.

        I very much like your final comment. Well said. That is indeed my position. In a world of potential exploitation and cheating in a the prisoners dilemma, it makes rational sense to cheat. Indeed I made a similar comment using the prisoners dilemma scenario to Kim two days ago on the initial post.

        This is why classical liberals believe the appropriate course is to stop all rent seeking. We need to call a credible, enforceable truce. This will lead to unions either disappearing or changing their role and focus.Report

    • Avatar Kim in reply to Rod says:

      Me too. Also, is your job going to be at risk under this?
      Trucking seems to be one of those industries prone to
      rent-seeking, at the moment. (NHS being a giveaway,
      also the continued maintenance of such).Report

      • Avatar Rod in reply to Kim says:

        Sorry I took so long to get back to you on this, Kim. My job at risk? Not particularly as I see it. I’m pretty sure the NHS would survive as a general welfare provision. Besides, do you have any idea how much the average truck pays yearly in fuel taxes? Say 125,000 miles/year divided by maybe 7 mpg times an average of (guessing here) about $0.40 / gallon? That’s at least $7000 / year per truck. Close to double for team drivers. Compare that to your average car at maybe 12k miles and 25 mpg. A case can be made that trucks cause disproportionate damage to the road being so much heavier so I’m not sure how that all balances out.

        Besides, if our costs need to go up then so be it. You’ll just end up paying a bit more for practically everything since practically everything you buy spends some time on a truck.Report

      • Avatar Kim in reply to Kim says:

        Rod,
        I figure you’re right. PA turnpike has about triple the price of a passenger vehicle to take an “average truck” (okay, so I just pulled 3axle and class5, no idea if that’s really average) across the state.

        I wouldn’t mind paying extra to have trucking be paid more fairly (even if it’s a lot more — there are secondary benefits, too).

        I have much more trouble conceptualizing “what the hell happens” with James’ idea when we push it outside of one industry, though.Report

    • Avatar Mad Rocket Scientist in reply to Rod says:

      So a right to work state where employers are fee to treat union & non-union employees differently would be OK?

      That actually sounds good to me.Report

  7. Second, while unions would be legal under this provision, I doubt whether laws mandating that firms bargain with them could stand, because that’s a form of special privilege for the union. With the decline in unioniziation, perhaps this is an acceptable price to pay. Perhaps it would stimulate unions to quit relying on what is clearly no longer a successful formula for promoting membership and force them to get more creative about their mission and methods. They might even find ways to provide sufficient value to firms that the firms are voluntarily willing to engage in collective bargaining. I do believe those things, but I don’t anticipate that I’ve been very persuasive. So this caveat may be a killer. Or maybe you can persuade me that enforced collective bargaining is not a special privilege, but just an evening of the playing field. I doubt I’ll be persuaded, but possibly a majority of the Supreme Court would.

    A few things on this point: first, I suspect you’re correct insofar as this would prohibit laws requiring bargaining with unions, but that isn’t the only effect this would have on labor law, and I think you do your argument a disservice by not recognizing those other effects. Specifically, I don’t think you can call those laws rent-seeking without also concluding that things like “right to work” are rent-seeking. Even more importantly, I don’t think you can reach the conclusion that laws requiring that firms bargain with unions are rent-seeking without also reaching the conclusion that laws limiting the right to strike to situations where unions comply with various requirements are rent-seeking. As I’ve argued at length several times before, labor’s greatest asset in obtaining leverage vis a vis management is it’s ability to create economic uncertainty via things like wildcat strikes and secondary boycotts, etc.; as much as the NLRA, Taft-Hartley excluded of course, is perceived as being a wholly pro-labor piece of legislation, the reality is that it’s a lot more of a compromise position than is generally assumed.

    E.g., https://ordinary-times.com/blog/2011/02/23/labor-roundtable-why-market-anarchy-favors-laborReport

  8. Avatar LWA says:

    Well, similar to my comments previous, I don’t see any rights that are being protected here.

    Other than giving privilege to the existing holders of power, by constraining the power of the people to intervene in the marketplace when they deem it in their interest to do so.Report

    • Avatar J@m3z Aitch in reply to LWA says:

      I see, yet again, assertions without substantive argument, and not even a hint that you read, much less understood, a single thing I’ve said.

      I see a pattern.Report

      • Avatar LWA in reply to J@m3z Aitch says:

        Which human right is being protected? What is it called?

        Why is section 2, the power to enact regulation, subordinate to section 1? Doesn’t this mean that any regulation that has any apparent benefit to one entity or another is invalid? What if it were the other way round?

        And why should the people have to meet so stringent a hurdle to meet their goals? Doesn’t this, by design, reduce their power over the holders of market power?

        For example, for most of the constitution, the people are free to enact any law they wish; They are only constrained from infringing on the rights of their fellow citizens.
        Yet this is designed deliberately to constrain the power of the people, for no other reason than to effect an economic outcome that is considered ideologically desireable.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Re: “human rights”: Re-read my answer on the other thread.

        Why is section 2, the power to enact regulation, subordinate to section 1? Doesn’t this mean that any regulation that has any apparent benefit to one entity or another is invalid?

        No, it doesn’t mean that at all. But I don’t expect you to listen to me, so I recommend you ask Burt or Mark.

        For example, for most of the constitution, the people are free to enact any law they wish;…
        Yet this is designed deliberately to constrain the power of the people, for no other reason than to effect an economic outcome that is considered ideologically desireable.

        Everything in the constitution is part of an ideology about in what ways the power of the people should be constrained and in what ways it should be expressed. What else is there? The idea of due process, for example, is based on the idea that it’s better to let a guilty person go free than to wrongly convict some number of innocent people. That’s an ideological position, not a position you can empirically prove.

        They are only constrained from infringing on the rights of their fellow citizens.
        Tautological. You’ve already said rights are only meaningful when they’re recognized by society. So based on your own position, all this says is the people are only constrained from infringing on what they’ve agreed they’re constrained from infringing on. And I’m not asking them to do anything different than that.

        However, breaking out of your tautology, it sounds as though you’re treating this as an illegitimate attack on the power of the people. But by the terms of your own logic, it can’t possibly be any such thing. It would take the power of the people to pass (it cannot bypass their power) and if they did pass it, then you would be compelled to view it as the will of the people, which definitionally makes it legitimate.

        You know, LWA, if you could just forget about the fact that a wicked libertarian proposed this and look at what your fellow liberals here are saying–because by god they’re all doing a bang-up job while you’re looking like a partisan hack–you might actually understand what I’m getting at. You might not agree, but that’s absolutely fine, nobody has to agree with me. But as things stand, you’re still misunderstanding it in a way that nobody else who’s commenting is.Report

      • Avatar LWA in reply to J@m3z Aitch says:

        This answer?
        “It ensures that John Q. Citizen can choose for himself whether to choose from a lower price competitor, and use the savings toward some other benefit for himself (whether that’s savings or other consumption), rather than being told he must buy from a sole provider at a higher price. It also protects the right of the would-be competitor to enter into a market and try to succeed by providing an alternative that people find more desirable.”

        I don’t see a recognizable right in there. Do you, or does anyone else?Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        {long pause…bites tongue…4 drafts later manages to delete most of the vulgarities]

        The world you are defending is a world in which business owners can get legal permission to raise prices above market rates, so that they can charge more to, oh, for example, part-time Wal Mart workers without providing them any corresponding increased benefit. In your view it seems, the Wal Mart workers have no right to try to get the maximum value in goods and services for their income; it’s acceptable to drive down their real income as a matter of law for the benefit of those who are better off than them, and the poor have no right against having their wealth redistributed upwards.

        Or let me try this real-life example. When I drove a cab in San Francisco, limited medallions and regulated fares (regulated for the benefit of me, not the passenger) kept fares high. Late nights I often times drove poor women home to bad neighborhoods because the bus, while vastly cheaper, was much more dangerous. Several times I had an anxious young woman in the back of my cab nervously watching the fare-ticker, and stopping me several blocks from home because it had reached her cash limit.

        In a truly competitive cab market, she would have had enough money to get home safely. In a cartel market she was legally obligated to expose herself to dangers. She has no recognizable rights?

        No right to the service that will get her safely home at the lowest cost the market will bear? No right not to feel deeply embarrassed that the cab driver took her to her door anyway and she can’t afford to give him what the law says she is obligated to give him, when the market would have left her with her dignity?

        Damned if I can even begin to comprehend you. Seriously. You seem to think you’re standing up for the least privileged, while you’re actually standing up for those with political connections and stomping on the necks of the less privileged. It’s perverse. In your ideological rigidity you remind me of the little right-wing Limbaugh fan-boy students I get from time to time. They’re impenetrable; can’t learn a thing that doesn’t already mesh with what they already “know” to be true.Report

      • Avatar LWA in reply to J@m3z Aitch says:

        Actually, James, I don’t disagree with some of the rentseeking behavior you condemn. I really, really don’t.
        Taxi medallions, hair stylist licences, even my own field of architecture, are not things I would fight strenuously to regulate as they are now.

        I’m more at the level of how we arrive at our chosen outcomes (and I recall saying this in my very first post).

        If this were a proposed state ordinance, I might even sign on, for some of it.
        But a constitutional right to pay low cab fares?
        Seriously?
        Wouldn’t it be laughable if I proposed the converse? The Constitutional Right to Safe and Secure Taxicabs? The Constitutional Right to High Quality Hair Styling?

        What makes this so alarming to me is enshrining this desired outcome of yours as a right, changeable only by a massive and mostly unattainable constitutional change.
        More so, since you openly acknowledge that this is by design- to strip future Congresses (and the people they represent) of the power to make changes.

        There are in fact, times when it is perfectly legitimate, morally legitimate, for the people to intervene in the workings of the marketplace, even if this results in higher prices. Obviously, this is a highly debatable point!

        But that is exactly why this is a matter for legislatures and the political process, not the Constitution.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        So do you recognize a right or not? Because you said there weren’t any rights there. Tell me, does the girl in the cab have a right not to be overcharged by me, as a matter of law, at risk to her own safety?

        Wouldn’t it be laughable if I proposed the converse?

        Yes, a proposal to permanently redistribute money from the less well-off to the more well-off would be laughable. Also evil. But a proposal to permanently ban that kind of redistribution? Not so laughable at all.

        There are in fact, times when it is perfectly legitimate, morally legitimate, for the people to intervene in the workings of the marketplace, even if this results in higher prices. Obviously, this is a highly debatable point!

        Again, assertion, without argument. Are you under the impression that just repeating an assertion enough time amounts to an intellectual defense of it?

        But let me consider it, because as written it reveals the deep morass of incoherence in which you are wallowing. See, it’s such a vague statement that we can’t know what type of policies it’s referring to. Are you referring to general safety regulations? They’re an an intervention in the marketplace that raises prices. Do you think I’m opposing them? Do you recognize that I’ve repeatedly stated that this amendment does not touch such regulations?

        So, if you’ve actually read and understood, you can’t believe I’m talking about such things. If you’ve read and understood–which you have given me no reason to believe you’ve actually done the first, much less the second–you know I’m just talking about the granting of rents. So are you defending rent-seeking? And if so, why don’t you give some explicit examples of government granted rents, ones that cannot be justified as general regulations, that you support?

        A coward hides behind vague words; a person who knows what he’s talking about digs down into the details. To date you’ve been a coward, and I’d like to know if you can move past that and get into details.

        Now get this one last thing; you’ve put yourself into a bind. You say this would be inappropriate in the Constitution, but your own previous arguments about majority will make that an impossible position to maintain. To get into the Constitution this amendment would have to pass through multiple supermajorities, so by your own logic it would be the will of the people, therefore legitimate and appropriate. It’s either not in the Constitution, or it’s the will of the people. Your own position makes that unavoidable.

        Frankly, with you just repeating undefended assertions over and over, and creating such contradictory and incoherent positions, I think it’s safe to say you don’t even know your own position. You want to attack mine, but you can’t even articulate your own.

        So to recap, I want to hear your answers to two questions. 1) Does the girl have a right? 2) Are you arguing for the granting of rents, outside of generally applicable economic regulations?Report

      • Avatar LWA in reply to J@m3z Aitch says:

        1) Does the girl have a right?
        Allow me to fill in what I believe is the right you are asserting, taken from the post previous-
        1a. No right to the service that will get her safely home at the lowest cost the market will bear?
        1.b No right not to feel deeply embarrassed that the cab driver took her to her door anyway and she can’t afford to give him what the law says she is obligated to give him, when the market would have left her with her dignity?

        Flatly, no. Unequivocably, no.

        A right to the lowest market fee for anything? What the hell kind of right is this? I could just as easily argue she has the inalienable right to free taxi service at public expense.
        A right not to be embarrassed? I’m embarrassed you even made such a claim.

        2) Are you arguing for the granting of rents, outside of generally applicable economic regulations?

        I am arguing that the public has the moral right to determine if granting rents, or manipulating the market outcomes is in their best interest. Regardless of whether it results in the lowest price or not.
        Since, as is shown extremely clearly by the other hundred posts here, what one person call illegitimate rent another can call legitimate public interest. E.g., half of the public stadiums built seem like foolish boondoggles to me. But I support the right of the people to do it, it they think it advances their interest in some way.

        The right of the people to manage their governmental affairs should only be restricted when it infringes on rights of the minority. This seems like an entirely reasonable proposition to me.Report

      • Avatar Cathy in reply to J@m3z Aitch says:

        @lwa To some extent this feels like a fight I shouldn’t be getting in the middle of, but I feel compelled to comment on two particular points anyway, which have confounded me since you started and continue to do so.

        1) Why are you characterizing a Constitutional amendment as a countermajoritarian measure? It takes, as has been noted (including by you!), several rarely-reachable super-majorities to make it happen. No amendment can possibly be adopted that does not massively embody the will of the people, in any conceivable sense of that term. Is your point that this issue is too contentious and changing to put beyond the reach of a future simple majority? If so, if it really is so contentious, it won’t be passed in the first place. So, I’m really not sure what your concern is.

        2) Your stance about only human rights concerns belonging in the Constitution is confusing to me. As a personal opinion of what the Constitution SHOULD be, you’re certainly entitled to it, but the fact is that the Constitution is not, at present, such a document. Beyond the many provisions in the main body that have nothing to do with safeguarding basic human rights (because that’s not the point of the main body), there are several amendments that don’t do that either; most notably, #16, which allows income tax. Is your view that this was erroneously included, and an illegitimate use of the Constitution, and that we should repeal it? It seems to be exactly the kind of thing you are railing against in principle, as an interference in the economy that the majority cannot overcome except by extreme measure. Or are you only concerned with provisions that limit government authority?

        Also, in general, it seems that to some extent you and James are always going to be talking past each other a bit, because you are coming from fundamentally different characterizations of “the government.” Where you are using “the government” and “the people” to refer to the same thing (a reasonable idea but one I disagree with), James, from what I’ve read of him, sees them as wholly distinct and frequently adversarial entities. In Column A, restricting the power of the government restricts the freedoms of the people; in Column B, it increases them. If those are the axioms of each side, the amount of agreement that can be reached about appropriate levels of government power is quite limited from the get-go.Report

      • Avatar Michael Drew in reply to J@m3z Aitch says:

        Cathy,

        Recall that under Senate rules, the ACA had to reach a supermajority in the Senate to pass. So it took something of a political perfect storm for ACA to be passed, akin perhaps to the kind of wave the Founders imagined would be necessary to amend the Constitution (maybe not quite that strong, but it seems clear they didn’t imagine it being as difficult as it hs turned out to be). In the case of the ACA, if the political winds were to blow in such a way that a Congress were elected that was inclined to repeal it and a president elected that was inclined to sign off, it could be repealed, potentially under different Senate rules. However, in the case of a constitutional amendment, the requirement for the relaxation of this new requirement are that a political wind bow that would be strong enough to again satisfy the amendment requirements of Article V. While admittedly, in the case in which the amendment passes, that is occurring in the opposite direction, it’s still the case that raising the bar for change away from the new requirement that high is countermajoritarian. If Article V amendment requirements had to be satisfied to repeal Obamacare, that would be countermajoritarian; likewise any constitutional amendment is countermajoritarian in its legal durability, even though it’s adopted pusuant to a majority’s (or a supermajority’s) will. (It’s worth pointing out, though, that if it’s adopted under the requirement of a supermajority, then, even though the measure is consistent with a majority’s will, in fact the political event in question is more an example of countermajoritarianism in action, where a supermajority and not just a majority is required for action, than of majoritarianism, where “merely” a majority is required.)

        The other reason this amendment would be countermajoritarian is that it restricts the flexibility of the government to pass laws. This makes it more countermajoritarian than some other constitutional amendments that have been considered or proposed by some in recent years. For example, some have suggested amendments that would allow the government to regulate campaign finance and/or end corporate personhood. There aren’t a lot of laws that these amendments would disallow; rather their purpose (and, I suspect, their effect for the most part) would be to lessen certain restrictions that governments have faced (mostly pursuant to the First Amendment) in what laws can be passed (theoretically pursuant to democratic majorities). These amendments might be said to be substantiviely pro-majoritiarian in that way, i.e. that, to the extent legislatures would follow majorities’ will on these questions, they would be more free to do so with these amendments than without. (The amendments would continue to be countermajoritarian in the previous sense I mentioned, where, even if a majority came to want them repealed, by provision, a supermajority would be necessary to get them changed.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        A right to the lowest market fee for anything? What the hell kind of right is this? I could just as easily argue she has the inalienable right to free taxi service at public expense.
        A right not to be embarrassed? I’m embarrassed you even made such a claim.

        Notice, no arguments developed here.

        I am arguing that the public has the moral right to determine if granting rents, or manipulating the market outcomes is in their best interest. Regardless of whether it results in the lowest price or not.

        Notice, no arguments here; once again nothing but assertions.

        LWA, I’m done with you. You have yet to actually make an argument for your position. Either you are unwilling to do so, in which case you are not arguing in good faith, or you are unable to do so, in which case you are just unintelligent. Whatever the cause, I can think of few less productive uses of my time than engaging with you.Report

      • Avatar LWA in reply to J@m3z Aitch says:

        @cathy
        I don’t like being in a fight either. Which is why I don’t. I argue without taking offense.

        You raise good points that I should clarify.
        Its true that not all the Amendments are strictly concerning human rights. But they all concern rights, either to clarify what they are, or aren’t, or to fix an error in the existing document.
        The 16th clarified the constitution to establish that the government had the right to levy a tax on income; the 18th, that the there is no right to drink alcohol. So they at least clarify something about the rights of citizens versus the power of government.

        Otherwise, what marks the line between a simple congressional act, versus a constitutional amendment? There has to be something that gets at the heart of the workings of the republic, something more than “I want to prevent future Congresses from being able to change this”.
        This proposed amendment doesn’t do anything like that. It establishes some sort of right to enjoy the workings of the free market, which I don’t believe exists.

        Generally speaking, the constitution allows the people a pretty free hand to make any laws they want, no matter how stupid or ill-advised. (And once again, I agree with James that many rentseeking practices ARE stupid or ill advised).
        Basic rights and the essential structure of the government, however, are protected by a very difficult barrier.
        I think that is a pretty good principle to honor.Report

      • Avatar Mad Rocket Scientist in reply to J@m3z Aitch says:

        @LWA

        Quibble – People have rights, governments have powers. So this:

        The 16th clarified the constitution to establish that the government had the right to levy a tax on income
        should be
        The 16th clarified the constitution to establish that the government had the power to levy a tax on income

        The constitution, in it’s bulk, establishes & limits the powers of the government, and explicitly lists some very specific rights the people (individuals) hold, but also states that the people (individuals) hold other rights not explicitly laid out in the constitution (10th Amendment).

        In that, I see James proposed amendment not as protecting or harming the right of the people in general, but rather it limits the power of the government to use the force of law to enrich or protect one sector of a market without some very strong overarching public good in play.

        Now, James has laid out numerous strong examples of how rent granting harms the public, you’ve laid out one weak counter example (stadiums, really?). If you are going to keep on hammering James, perhaps you can put forth some examples of how such an amendment would harm the public good, or limit the rights of individuals (not the people as a collective).Report

      • Here are the harms to the public good as I view them.

        Prevent the government from making all sorts of worthwhile distinctions among companies and prevent government targeting of resources to particular “businesses, firms, industries, or economic competitors (potential or real)”. The Minority Business Development Agency, US Small Business Administration, Overseas Private Investment Corporation, Export Import Bank of the United States, Fannie Mae, Freddie Mac, other government-sponsored enterprises, and In-Q-Tel seem likely candidates for elimination (or at minimum, drastic scaling back) under the terms of the amendment. If you think any (or all) of these are providing valuable services, you see harm to the public good.

        Prevent, or slow, the government from acting in cases of economic emergency. The Troubled Asset Relief program and government help to GM and Chrysler could have been stopped or delayed by this amendment. What would a court delay have meant in the midst of a financial crisis? as markets were convulsing over perceived congressional dithering and credit markets seizing up as financial institutions didn’t trust their counterparts viability day to day? Unfortunately, the financial sector has a habit of getting itself into a spot of bother (S&L crisis, Long-Term Capital Management’s potential crisis), requiring government help in stabilizing and unwinding difficulties.

        Altogether, putting a set of policy options constitutionally beyond reach. Touching quite an array of government activities undertaken today: encouraging women and minority owned businesses, economic development zones, loan guarantees for exporters, incubating small businesses, advancing technologies of interest to the intelligence community…

        Overall, if you want a smaller role for the state in the economy you’re free to cheer. If you think the government should stay well away from picking winners or crafting industrial policy, break out the confetti and the bunting. But I think LWA brings up wholly reasonable questions as to whether these kinds of disputes can be better settled in the political branches rather than being made subject to constitutional precommitments akin to those granted freedom of speech, freedom of the press, etc.Report

      • Avatar Kim in reply to J@m3z Aitch says:

        Creon,
        GM and Chrysler are clearly national security (light infantry vehicles).
        So’s verizon, and our banking network.

        Gov’t agility will not be compromised by this, I dont’ think, so long
        as the problems are vast enough.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Creon,

        Obviously you and I will disagree on whether those are all harms or not, but let’s set that aside. The really significant question is whether all those things really will be forbidden by this amendment, and while I think some of them would, I don’t think all of them would (for reasons given in response to many other specific cases discussed on this page). And it may be possible to tighten up the text a little more to clarify that some of those things are not.

        I’m afraid I can’t go into more detail right now. I’m back to work after more than a week out ill (thank god for these discussions, because it’s all that kept me from going stir crazy), and now I’m backlogged to hell and back.

        But thank you for making a substantive argument for that position that went far beyond the simple platitudes given by that other commenter. That I am inclined to disagree does not mean I don’t think the argument is in any way illegitimate, or that it should be overlooked. God forbid any proposed change to the Constitution should have the counterarguments simply overlooked.Report

      • @kim
        any law privileging any business, firm, industry or economic competitor (potential or real) over any other

        Along with the robust standing provision of Section 4, “even if the harm is diffuse and individually insubstantial”, is a recipe for court challenges.Report

      • Avatar Mad Rocket Scientist in reply to J@m3z Aitch says:

        @creon-critic

        Let’s say the amendment passes with the spirit James intends intact. Would not the new reality that government is constitutionally forbidden from granting rents cause the paradigm to shift? Wasn’t part of the reason for the 2008 mess was because business figured they could get a bailout from Uncle Sugar should they overplay their hand? If they know it’s impossible, or extremely unlikely, or even something that could be tossed into legal limbo for a long time, they might not be so eager to play fast & loose.

        In other words, we can’t just look at how an amendment would have interfered with what did happen under a did happen under the existing paradigm, but rather how it would fashion a new paradigm.

        Take LWAs stadium example. Prohibiting rent granting would not prevent a city from building a new professional sports stadium, but it would prevent a city from granting exclusive rights to the property to a single corporation. It could take bids on allowing a corporation operating privileges, or it could grant a ball club exclusive usage rights at certain times (game days, practice times, etc.), but the stadium would be a public good, and on any day the ball club did not need the stadium, it would be made available to any outside interests, such as concert venues, minor league or little league sports, etc.Report

      • @mad-rocket-scientist
        …they might not be so eager to play fast & loose.

        Or greed will prevail and we’ll just have another Great Depression instead of a Great Recession. In the battle between greed coupled with masters of the universe overconfidence in their own abilities on the one side and having a stable financial sector on the other side, I think the repeated financial-caused recessions/crises have shown that greed and overconfidence routinely win. At least once every two or three decades.

        how it would fashion a new paradigm.

        And some people claim liberals are ambitious about the government’s ability to refashion human nature. Are you promising no more financial crises from now on? Even supposing the US got the regulatory system exactly right, who’s to say an exogenous shock from abroad wouldn’t create a crisis for US financial institutions. Could the government still stand aside in the face of a major sovereign debt crisis say? Or a rogue trader, Barings Bank-type huge losses out of the clear blue sky scenario? JP Morgan recently lose $7 billion (London Whale). Just in our lifetimes: sh*t happens. Unexpected, random, potentially cataclysmic sh*t happens.

        Regarding stadiums, I’m less concerned with those. I imagine quite a few lawsuits in service of enforcing the amendment against the entities I mentioned. Remember the text, barring “privileging any business, firm, industry or economic competitor (potential or real) over any other,”. Large business sues the Small Business Administration because of loan guarantees to small businesses. A non-exporting business sues the Ex-Im Bank because it is not eligible for working capital simply because its customers are not abroad. Tech Company A sues In-Q-Tel for providing venture capital to Tech Company B. A company outside a business incubator, enterprise zone, or other similar government constituted district/program, sues to dismantle the preferential treatment given inside the district/program. Given the text of the amendment, I don’t see how a court rules in favor of the Ex-Im Bank, In-Q-Tel, etc., etc.

        It is unclear to me why we can’t argue out each instance of rent-granting on a case by case basis and decide them on their respective merits or lack thereof. Why just put them together in one basket of rent-granting and disallow the government from making distinctions amongst companies, industries, and goals. All in the political branches where the competing sides can air their differences with hearings and consideration of all the externalities. The amendment, as written, is a blunt instrument and courts are a similarly blunt instrument, when a much finer grained analysis of each instance is necessary.Report

      • Avatar Roger in reply to J@m3z Aitch says:

        “It is unclear to me why we can’t argue out each instance of rent-granting on a case by case basis and decide them on their respective merits or lack thereof. Why just put them together in one basket of rent-granting and disallow the government from making distinctions amongst companies, industries, and goals. ”

        Because doing so as an amendment makes for good conversation and debate. Mission accomplished.Report

      • Avatar Mad Rocket Scientist in reply to J@m3z Aitch says:

        @creon-critic

        Actually, I’m not promising a dearth of financial shenanigans and crises, people are people & greed is greed. Rather, I’m putting forth that the lack of a guarantee of a bailout will change how the game is played, ostensibly for the better. And that is not to say that a government bailout can not happen, but it would have to be structured differently, more focused on the public good, less on just covering the debts & losses of specific players.

        It is unclear to me why we can’t argue out each instance of rent-granting on a case by case basis and decide them on their respective merits or lack thereof.

        Because the courts have a habit of finding rent-granting to be legal, because it is; and law making bodies won’t stop doing it because it greatly benefits the members of such personally. In short, no one is doing anything about it at all specifically because it benefits so few at the relatively minor expense of so many.

        An amendment against it will force each case into the light & require that it be defended or cast aside.Report

  9. Avatar Burt Likko says:

    Under this amendment, do non-U.S. manufacturers get to bid on contracts to supply the Air Force and Navy with aircraft? Airbus, for instance, would love to be able to sell cargo, supply, and armed craft to the biggest customer in the world, the U.S. military.

    Simply buying from ABC Corporation is favoring one company over its competitors, but I presume that open bidding circumvents this — as a market participant, the government seems like it ought to be allowed to make smart decisions with its money and pick vendors. And no one would suggest that price be the only consideration when the government lets a contract.

    But as I see it, there are legitimate security concerns regarding access to and distribution of advanced technology contributing to why there are only three primary competitors, all based in the U.S., who actually bid on military airframe contracts. Of course, these three competitors very much enjoy having their largest customer deliberately not solicit bids from the likes of Chengdu and United Aircraft of Russia, or more realistically, Airbus. Still, excluding these foreign (and in some cases, foreign-state owned) competitors from the market sure looks like it would run afoul of not only the wording but the intent of the proposed amendment.

    I’ve picked airframes as a specific example, but of course it might be anything that the government buys.Report

    • Avatar Kim in reply to Burt Likko says:

      Polartec is a compelling government interest.
      So are Light infantry vehicles.

      So is FOOD.

      Now, how much have we really fucked with anything
      with this amendment?Report

    • Avatar J@m3z Aitch in reply to Burt Likko says:

      National security trumps everything, Burt. I could explicitly add a section saying national security concerns may not be considered in evaluating contracts, and national security concerns would still trump everything. They’ll be used to absolutely limit the scope of this amendment when it comes to the military. But maybe in some cases (polyesther cloth for uniforms?) the national security trope will prove too weak to persuade the judges.

      If it’s peacetime.

      And there’s been no terrorist attacks in the last two generations.

      And there’s only one polyesther cloth producer in the U.S.Report

      • NobAkimoto NobAkimoto in reply to J@m3z Aitch says:

        The other problem is industries where you’ve seen so much consolidation of “middle product” companies, like in autoparts (there’s only 1 or 2 automotive air conditioner manufacturers left in the US IIRC), you’re going to start having a lot of tangles between what constitutes a national interest, what might constitute harm to the general welfare, etc. Is letting Raytheon go out of business a national security interest? What about Lockheed Martin?

        Can you still build humvees if the only domestic autoparts manufacturer for widge A which is in all cars goes out of business when Ford fails and you can’t bail it out? I wonder how badly you could abuse national security interests in that case.Report

      • I also think that adding a “national security” exemption might have the effect of being the wedge that grants nearly unlimited power to the federal government….something can be declared a “national security” issue and that clause could be cited in defense of such a claim, even if it’s included in an amendment about regulation.Report

    • Avatar Marchmaine in reply to Burt Likko says:

      Having sold to the Federal Government, there is no danger at all of this happening.

      “as a market participant, the government seems like it ought to be allowed to make smart decisions with its money and pick vendors.”Report

  10. Avatar Patrick Bridges says:

    The reason that liberals are going to have trouble with what you’ve said, James, is that ways this amendment helps things that liberals like are implicit and indirect, while the ways this amendment hurts things that liberals like are explicit and direct. In addition, the benefits for liberals are long term while the costs are immediate. Unions, affirmative action, and a lot of other liberal sacred cows will be gutted immediately (well, in three years), while corporate money only gradually leaves politics. So, why should they listen to an article that doesn’t even need a “why should conservatives support this” section?

    You might help a little by starting “Section 1. To reduce the impact of money on political decision-making, ” a la the second amendment. 🙂

    In terms of examples to think about:
    1. Congress passes a carbon tax. 50% of the income from the tax is set aside for fixed dollar value taxpayer subsidies to offset increased energy costs, while 50% is assigned to the EPA, NSF, and DOE to use for competitive research grants and contracts in technology areas such carbon sequestration, alternative energy, and related technologies. Exxon (among others) sues, claiming this unfairly targets the petroleum industry, claiming the law is just providing rents to alternative industry companies (even though they apply for and receive alternative energy grants financed by the tax).
    2. Mitt Romney sues the U.S. government, claiming the progressive income tax system, SNAP, medicaid, and unemployment and disability insurance target the wealthy to the benefit of the poor who just “want free stuff”. Warren Buffett also sues the U.S. government, claiming that reduced capital gains tax rate unfairly benefits the wealthy over the poor.
    3. The Loyal Order of the Moose sues the state of New Mexico, claiming that the combination of state laws that forbid gaming (even by non-profits) and their gaming compact with the state Indian casinos unfairly benefits Native Americans over regular state citizens.
    4. The Quakers sue the U.S. Government, claiming that federal defense contracting is rent that unfairly privileges defense contractors like Lockheed Martin over non-defense firms. (Here’s your chance to really win over liberals, James. 🙂Report

    • Avatar Kim in reply to Patrick Bridges says:

      2 I find especially troubling.
      I’m no friend to Indian casinos, so 3 is something i’d actively cheer.Report

    • Avatar J@m3z Aitch in reply to Patrick Bridges says:

      Patrick,

      I think your first sentence is very perceptive. I hadn’t thought of it that way.

      I hate preambles, but you might be right.

      Have to pick up my daughter from school, so I’ll wait until I can give fair thought to your examples before commenting on them. But I really wanted to say I liked your first sentence.Report

    • Avatar Patrick Bridges in reply to Patrick Bridges says:

      Yeah, I’m mainly trying to push the edges to see how far such an amendment would go, because the more I look, the farther it pushes to both extremes. How about government research grant programs, James? Is that just rent-providing for scientists?Report

    • Avatar Cathy in reply to Patrick Bridges says:

      Between the text of the proposed amendment and James’ various interpretive guidelines, this is what those hypos look like to me:

      1. Probably valid. If everyone is being taxed, for a reason common to everyone (pretty sure most entities aren’t carbon-neutral, though some are clearly worse than others), and it was passed because Congress wanted to help the environment, rather than kick back to their favorite lobbyists, and if the grants aren’t restricted to “alternative energy companies,” but truly are going to valid proposals regardless of source… then this looks like a law of general applicability, even though some entities may pay more in taxes than others, and some industries may be more affected than others.

      Actually, this one would be a good litmus test for the amendment, in my mind; if it’s valid, then Section 2 means something, and government regulatory power is sufficiently preserved; if it’s not, then in my opinion we have a problem.

      2. Mitt loses. “The poor” are not a “business, firm, industry or economic competitor.” Buffett also loses, for the same reason.

      3. The Moose almost certainly wins. This looks like a case of exactly what the amendment is aimed at.

      4. The Quakers probably lose. First, the government also contracts for non-defense expenditures, and for non-weapons stuff within DoD expenditures. So it’s not really the case that one industry is being privileged over another, necessarily. Also, fundamentally, one industry having more business than another industry isn’t rent, it’s just economics. If the government decides it wants $20 billion of tanks and only $2 billion of office supplies, that’s not privileging the tank builders, it’s meeting organizational priorities.

      Now, if you could show that the $20 billion number was arrived at because various Congresscritters wanted to bring jobs to their home states, which are home to the defense contractors… you might have a better case. But I imagine that it would be difficult to get SCOTUS to rule that Congress’s military spending was set by pork priorities and not legit national defense ones. They don’t like to second-guess Congress like that, generally.Report

      • Avatar J@m3z Aitch in reply to Cathy says:

        Thanks, Cathy. I’m pretty sure I’m in complete agreement, and couldn’t have said it any better than that.Report

      • Avatar Patrick Bridges in reply to Cathy says:

        I generally agree as well, Cathy, but the last interpretation, though probably most likely, is also highly problematic. It makes a lot of the value of the proposed amendment moot. Have we just said that Lockheed spending large amounts of money to support candidates who will fund the F-35 is just fine? Same for petroleum industries lobbying congress for Keystone XL? Same for Huntington Ingalls lobbying for the construction of a next generation of nuclear aircraft carriers?

        James’s amendment doesn’t need to be perfect; indeed it can’t be. However, defense spending is probably the biggest and most egregious single source of rent seeking in the federal government today. If this amendment can’t curtail that at all…Report

      • Avatar J@m3z Aitch in reply to Cathy says:

        Patrick,

        Yes, I doubt it could stop the single biggest source of rent-seeking, but tackling national security claims…man, that’s just a whole new level of difficulty. But what this amendment would do is stop lots and lots of smaller sources, so many that cumulatively they amount to considerably more than the national security rent-seeking. I truly believe that’s a worthy gain.Report

      • Avatar Kim in reply to Cathy says:

        Patrick,
        a lot of national security rent seeking could be controlled by forcing there to be markets (not monopolies).
        Big Auto, not Malden Mills.Report

      • Avatar Cathy in reply to Cathy says:

        @patrick-bridges
        I don’t think the amendment does anything about campaign financing at all; that’s a separate (though connected) issue. If Lockheed wants to spend money on a candidate it THINKS will be pro-defense, or even specifically pro-Lockheed, it can do so.

        I’m also a bit confused about your conflation of defense spending and rent-seeking. Though there may well be many practices currently in place wrt defense contracting that amount to rent-seeking, the two are not inherently connected. As I said above, if Congress (or the Pentagon, whoever makes decisions at this level of detail) decides that the US military needs 87 new tanks and 32 new fighter jets, for Legit National Defense Reasons (TM), and then they award that contract to Lockheed because they have the best value bid, what exactly is the problem?

        Now, to the extent that Lockheed is involved in convincing Congress that it really needs 32 new fighter jets, that might be a problem, particularly if this results in Congress ordering those jets from Lockheed in a no-bid contract or a non-transparent process. However, government-as-market-participant is very different from government-as-regulator. The defense industry is a bit special here, as only the government can buy things like missiles (right??), but unless you’re going to say that fact makes the entire defense industry one giant ball of rent-seeking (which I don’t agree with), I’m not sure what you mean.

        If the government makes the decision that it needs X thing for Y reason, and it’s going to get it from Z company, then if we credit reason Y, the only question left is whether the choice of company Z is a result of rent-seeking or not. If the bid process for defense contracts is principled and transparent (two things that I currently understand it is not – is that the source of your calling them all rent-seeking?), then I don’t see the problem.

        What would be the result if “excessive” defense spending were declared rent-seeking and unconstitutional under this amendment? I’m not sure there’s any principled way to make a distinction between spending for legitimate reasons, and “excess” spending solely for pork, unless you have some sort of smoking gun.Report

      • Avatar Patrick Bridges in reply to Cathy says:

        @cathy The amendment seeks to control rent-seeking indirectly by limiting congress’s ability to grant rents. As James and I discussed in Part 1, it doesn’t say you can’t lobby; it says that congress can’t give you certain things, so you have less incentive to lobby.

        So, let’s forget the Quaker’s example, and take a different one. James decides to sue over this one replying on Section 4 to deal with standings issues of how his tax dollars are being spent: http://www.dailymail.co.uk/news/article-2316117/Congress-insists-spending-436million-dollars-new-tanks–Army-DOESNT-want-them.htmlReport

      • Avatar J@m3z Aitch in reply to Cathy says:

        Patrick, I could only hope and pray that would work!

        And also put an end to the unwanted 2nd engine for the JSF, coincidentally produced in John Boehner’s district.Report

      • Avatar Cathy in reply to Cathy says:

        @patrick-bridges Yeah, that’s what I was thinking too, but your comments about “So is it still ok if These Companies lobby for This Product?” confused me on that point… because it clearly is. But yes, if the only reason Congress is contracting for tanks in the first place is because they want to help out their buddies the lobbyists – that’s rent-seeking, as you’ve said, and I’m not sure what the solution is, or that this amendment provides it. Maybe shift the itemized budgeting to the military itself, subject to Congressional approval? Why is Congress in the business of this level of budgeting, anyway?Report

  11. Avatar Kim says:

    I’d be curious to know how this works out.
    Is this another version of the English/American System?
    (Whereby it’s actively bad for America to do this, even
    if it is overall net positive?)

    I’d also love for you to list “actual prices” sans subsidies.
    I think it would be very, very instructive.Report

    • Avatar J@m3z Aitch in reply to Kim says:

      I’d be curious to know how this works out.
      The future is the undiscovered country.

      I’d also love for you to list “actual prices” sans subsidies.
      Generally not possible, as prices are the product of markets. Sans markets, we can only make guesses. But one I do know off the top of my head is that with sugar tariffs the U.S. pays, iirc, about twice the price per pound as on the world market.

      That part doesn’t bother me as much as the fact that protection is all that makes sugar producing in the Everglades profitable, so we’re effectively tricked into paying for the destruction of that incredible natural resource. And then taxed to pay for fixing the damage. There’s one of the lovelier specific outcomes of rent-seeking.Report

  12. Avatar Rod says:

    I would like to add that on balance, this liberal could sign on. I think if such an amendment were to pass a lot of people would be caught off guard a few years down the road. Why? The rents you hate are the rents you tend to notice. We’re really good at constructing comforting rationales.

    Sadly, of course, this will forever be entirely academic. Between the farm state senators and the corporate lobbyists this thing doesn’t have a snowball’s chance in hell.Report

  13. Avatar Mike Schilling says:

    I ran across this just now:

    The Atlanta Braves announced Monday they will leave Turner Field for a new 42,000-seat, $672 million stadium about 10 miles from downtown Atlanta in 2017. It’s not clear how much the proposed ballpark will cost taxpayers.

    They currently play at Turner Field, which is all of 17 years old.

    This illustrates one of the best features of the proposed amendment: team owners, Walmart, etc. wouldn’t be make localities bid against each other any more, because they’d all be forbidden to take part in the auction.Report

    • Avatar Chris in reply to Mike Schilling says:

      What happens to local programs that provide tax breaks for businesses that pay a living wage (for construction, say). Under the definitions here and in the previous post, this looks like rent granting, but both sides benefit, so…Report

    • Avatar J@m3z Aitch in reply to Mike Schilling says:

      This absolutely would be one of my preferred outcomes.

      But how would you feel about baseball losing its anti-trust exemption? (Honest question; I have no idea where you stand on that, but you’re such a baseball guy I’m sure you have some thoughts on it.)Report

      • Avatar Patrick Bridges in reply to J@m3z Aitch says:

        Baseball Prospectus had a nice piece on the impact of repealing the anti-trust exemption a bit more than a decade ago, actually. It’s a really informative piece. Basically, the minor leagues would suffer, but college baseball and international baseball leagues would probably benefit: http://www.baseballprospectus.com/article.php?articleid=1286Report

      • Wow, Patrick, that is an awesome link. Thank you so much for sharing it. That puts me in a bit of a bind: I’m not a fan of the anti-trust exemption, but also cite the farm system of the MLB as being significantly preferable to that of the NFL. This is going to force me to sort some things out.Report

      • Avatar Mike Schilling in reply to J@m3z Aitch says:

        But how would you feel about baseball losing its anti-trust exemption?

        I honestly have no idea what the practical meaning of the anti-trust exemption is. It was issued when the existing major leagues were trying to strangle an upstart league, but there’s no plausible threat of that now. It gets brought up sometime when a team wants to move against the wishes of the other owners (nowadays, it’s the A’s wanting to go to San Jose), but it’s not clear that having to obey the rules of a league they have signed agreements with is really an anti-trust issue. Nor is it clear the A’s would still want to move if San Jose couldn’t build them a stadium.Report

      • Avatar Mike Schilling in reply to J@m3z Aitch says:

        Or I could have read Patrick’s comment first.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Looking at that article reminds me… baseball’s exemption from antitrust was first ruled on in ’22, with the Court saying baseball was a local affair, not interstate commerce. That was a bit iffy, perhaps, even pre-New Deal court. But it was reaffirmed in the 50s and 70s, long after that kind of local/interstate distinction had long been swept away. That’s probably as good a proof of Holme’s claim that “the life of the law is not been logic, it has been experience,” as one could ask for.Report

      • Avatar Jaybird in reply to J@m3z Aitch says:

        Finally, an answer to the question “what is *NOT* an example of Interstate Commerce?”!

        And it’s Major League Baseball.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Exactly, JB. And to think my argument in favor of this amendment relies in part on asking people to have faith in the Courts.Report

    • Avatar J@m3z Aitch in reply to Mike Schilling says:

      Thinking more about building stadia, I’m not sure this amendment would actually prevent a city from doing so. After all, cities build all kinds of recreational facilities. Where it would work, probably, is on the back end, what kind of contracts the clubs could negotiate with municipalities. The ones that leave the taxpayers holding all the costs while the clubs rake in all the parking and food revenues, those would hopefully be seen as the clear rent-seeking that they are.Report

  14. Avatar Patrick Bridges says:

    Thinking a bit about Russell’s post of Medical Licensing and James’s posts, how much of the licensure vs. credentialing issue is about an individual’s ability to meaningfully evaluate and amortize risk? As an individual, I have relatively little at stake when I go to Amazon and purchase a book – I risk little money at each purchase, I make lots of small such purchases and can continually evaluate Amazon, and if something goes wrong, I can take my business elsewhere.

    With legal and medical services, the amount risked by the individual and the number of transactions across which risk is amortized is much smaller. One bad lawyer or doctor, and I am *literally* going to be incapacitated for years or put to death; while my next of kin might have a resulting tort, that is little comfort to me.

    Yes, I’ve seen the libertarian argument of this creating additional markets to help evaluate the risk, to me that just begs the question. Do I want to go to the doctor accredited by the Medical Association of America, the American Medical Association, the Association of American Medical Professionals, or what? Again, there seems to be an imbalance of risk here, where the organizations can amortize their risk across a lot of doctors, while I don’t have that luxury.Report

    • Do I want to go to the doctor accredited by the Medical Association of America, the American Medical Association, the Association of American Medical Professionals, or what?

      I’m once again encountering a comment thread that’s already so long at my first glance that I feel I’m probably missing a lot of answers to questions I’d be inclined to pose, but thankfully this one jumped out at me.

      This is precisely the kind of question that a medical license is meant to answer for patients. The board of licensure in your state is charged with determining if the doctor who’d like to take your money to treat you went to a school accredited by the LCME or one that’s “accredited” by the Association of Health Education Institutions (an entity I just made up) or some other gimcrack organization that gives ersatz cover to lackluster medical schools for a reasonable enrollment fee. It mitigates the risk you face if you lack the resources to parse that distinction.Report

      • Avatar J@m3z Aitch in reply to Russell Saunders says:

        This does ask us to put all our trust in the state’s regulatory agency.

        There may be reasons we find it less comfortable to choose between competing accreditors and a monopoly creditor.Report

      • Well, FWIW (and I really honest and for-truly plan to write about this soon), if you wanna talk monopoly accreditor, let me tell you about the American Board of Pediatrics (and, presumably, all the other similar specialty boards). You pretty much can’t get a job as a pediatrician without board certification, the standards for which are subject to change without notice and with no real hope of change should participating pediatricians find them unduly onerous, time-consuming or pointless. As I said either in my OP or the comments (I can’t recall which), there is at least some notional relationship between the state licensing board and elected officials, probably more tenuous the bigger or more populous the state, and pressure on the latter could conceivably effect results much more efficiently (IMHO) than any collective grousing to the ABP.Report

  15. Avatar Heisenberg says:

    “Neither Congress nor any state or political subunit of a state shall make any law privileging any business, firm, industry or economic competitor (potential or real) over any other, or that serves to create a barrier to entry to any industry or occupation, or that limits competition between potential competitors within any industry through any form of cartelization, or that provides to any business, firm, industry or economic competitor any form of subsidy, including preferential tax treatment, other than for not-for-profit entities.”

    Congratulations – now the government has to buy its office supplies, in equal amounts, from Staples, OfficeMax, Home Depot, Wal-Mart, Target, etc…

    The government can also no longer contract for services from the private sector. It now has to do all of its business in-house. The Air Force can’t buy planes from Boeing – it has to make them.

    Oh, and how will the Air Force get supplies for its planes? It’ll have to start its own mining and smelting company for metal!Report

    • Avatar J@m3z Aitch in reply to Heisenberg says:

      Oh, no, no. Competitive bidding, for both supplies and contracts, satisfies all that perfectly. A proper competitive bidding process puts all competitors on an even playing field, and they will bid away the rents.Voila, there is no rent-seeking, and no party actually receives any economic “privilege.” This is not an accurate critique at all.Report

      • Avatar Heisenberg in reply to J@m3z Aitch says:

        Why doesn’t doing business with one firm or another not constitute “privileging any business, firm, industry or economic competitor (potential or real) over any other”? The firm that gets the contract is privileged over a firm that doesn’t.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Because the contracting process treats them equally. All are competing on the same playing field. If you win on a level playing field you haven’t been privileged, you’ve won a fair contest.

        Did the NBA “privilege” the Miami Heat with the NBA championship trophy last year? If I tell the two neighbor kids that I’ll hire whichever of them offers to mow my lawn for the lowest price am I actually privileging one? You’ve stretched the concept of privilege beyond recognition.Report

  16. Avatar Alex Knapp says:

    “Section 2. This provision shall not be construed to deny any authority granted to Congress under Article 1, section 8, provided such regulations do not conflict with this provision, and provided that no intellectual property rights may last more than 20 years beyond the life of the creator, or a maximum of 50 years, whichever limit is first met.”

    This provision would violate several international treaties that the United States is a part of, FYI.Report

    • Avatar J@m3z Aitch in reply to Alex Knapp says:

      Give us more? It wouldn’t violate the patents rule of the WTO, unless I remember incorrectly. Is the copyright out of line?

      IIRC, our copyright rule is more extensive than required by treaty, so I’m happy to just bring it back down to our current treaty obligations, just to lock an actual limit into the big C.

      But “several” has me at a loss, so I’m all ears.Report

      • NobAkimoto NobAkimoto in reply to J@m3z Aitch says:

        All of the TRIPS based treaties, and FTAs, including the most recent KORUS.

        If you look at the text of KORUS it says:

        4. Each Party shall provide that, where the term of protection of a work (including a photographic work), performance, or phonogram is to be calculated:

        (a) on the basis of the life of a natural person, the term shall be not less than the life of the author and 70 years after the author’s death; and

        (b) on a basis other than the life of a natural person, the term shall be:

        (i) not less than 70 years from the end of the calendar year of the first authorized publication of the work, performance, or phonogram; or

        (ii) failing such authorized publication within 25 years from the creation of the work, performance, or phonogram, not less than 70 years from the end of the calendar year of the creation of the work, performance, or phonogram.

        There’s a number of treaties on this including the WIPO treaties and most of the recent US-whoever FTAs that basically force life + 70 year copyright terms.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        OK, so my memory misled me. Consider the amendment rewritten to match our international agreements, which was my (very poorly handled) intent.Report

      • NobAkimoto NobAkimoto in reply to J@m3z Aitch says:

        I would honestly prefer that TRIPS be changed to match your numbers. I would hate to see horrible patent and copyright terms being embedded in a constitution. (That said, this might be a great way to get some industries to buy into this)Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Well, yes. I’m at a bit of a loss on this part now. I guess I should just redact it to the clarification that it’s not eliminating patent and copyright.

        (And now that you’ve corrected me on TRIPS, that sounds exactly right to me. I did some work on that stuff years back with a grad school colleague, but years back. But since I’m teaching a course on Globalization for the first time next term, I’d better make damn sure I get all these pesky little facts straight.)Report

      • Maybe the rewrite could stipulate that the US honor existing treaties, but keep the 20 year/50 year prohibition for future agreements.Report

  17. NobAkimoto NobAkimoto says:

    I like the substantive text of the amendment in general.

    I suppose I’m a little worried about practical implementation.
    For example:

    Nor shall this provision be construed to deny the authority of states and their political subunits to create economic regulations or to regulate for the health, safety and welfare of the people, provided such regulations do not conflict with this provision.

    The language in the latter half of the provision makes it sound like this provision actually has supremacy over the concerns of health, safety, and welfare of the people. I think in this case something akin to the European Convention on Human Rights, which states that some laws may override certain provisions if they can be demonstrated to be required for things like human dignity. Now granted, that’s probably going too far into the opposite direction from your intention, but I do think crafting the exception rules here carefully is going to be important.

    Section 4. Any person harmed by any such law or regulation, even if the harm is diffuse and individually insubstantial, shall have standing to challenge said law or regulation in the federal courts.

    This one scares the bejeesus out of me, simply because this would send even more work to a judiciary that’s clearly already suffering from being understaffed.Report

    • Avatar J@m3z Aitch in reply to NobAkimoto says:

      Nob,

      If the text explicitly says the rule cannot be construed to deny regulatory authority, I hardly think it could be sovereign over that authority.

      As to 4, yes it’s a stretch. And there might be enough directly harmed parties to attack all the laws that need to be attacked. That is the part I’m least certain about.Report

      • NobAkimoto NobAkimoto in reply to J@m3z Aitch says:

        ….provided such regulations do not conflict with this provision

        I’m blockquoting this because this is the language that has me a little confused. This sounds like the authority only exists if it doesn’t run afoul of the provision in any way, rather than these examples being exceptions.

        As for section 4’s overload problem…

        Thing is…I rather LIKE the idea of something like Section 4. Something a lot of modern constitutions have, but the US Constitution doesn’t explicitly have, is something like a rights guarantee redress clause. I know technically the US Constitution is SUPPOSED to do some of those things with a combination of various amendments and the basic redress provision, but in practicality we have things like courts denying cert on issues of life and death for technicalities. Anything that would address the imbalance between individual grievances and those of favored parties is a boon, and your section 4 is nice in that way. The problem to me is that if it’s placed over the current “triage” based system of judicial review, it’s not likely to get implemented fairly, whatever the intentions.Report

  18. Does the amendment do away with zoning laws and related restrictions, as applied to businesses? A height restriction, for example, not just disadvantages, but completely bans, businesses that require tall smokestacks from certain locations. Who gets to define “health, safety, and welfare”? The design for my small leading-edge printed circuit fab line, to be built on a piece of land near major residential developments, conforms to all applicable safety regulations; but within those safety regulations, I’m going to be installing large tanks containing a number of different toxic gases.Report

    • Or to pick one that’s currently a hot topic in Colorado… can a city say that a hydraulically-fractured natural gas well is okay if the wellhead is 501 feet away from the grade school, but not if it’s 499 feet away?Report

    • Avatar J@m3z Aitch in reply to Michael Cain says:

      Who gets to define “health, safety, and welfare

      Ultimately, SCOTUS.

      I think land-use regulations would generally be acceptable. It’s hard to argue that not allowing a chemical factory to be built in an established neighborhood is simply rent-seeking.

      As to 499 v. 501, those are always funny issues, aren’t they? We have to draw lines somewhere, but each line ends up looking ridiculously artificial. But the Court realizes that, and focuses on whether that distance is generally reasonably selected. If “`500 feet away” is what the experts say is safe, then the Court would be satisfied with either 499 or 501 probably. But if your plant is 499 feet away, and mine 502, the Court’s likely to be a bit suspicious about the justification for selecting 501 as the line.Report

      • Avatar Dan Miller in reply to J@m3z Aitch says:

        Imagine that a city is selling off a lot it owns. Developer A offers $10 million for the parcel and plans to build single-family homes. Developer B offers $20 million, but only on the condition that he’s allowed to build a 20-story condo tower. Is the city obligated to sell to B? What grounds are sufficient to select A instead?Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Dan,

        Your example actually is occurring, although with an odd twist, in Detroit. The city has sold of a bundle of residential lots it owns to a guy who’s going to plant a tree farm. Many local residents are unhappy, because they see it as a residential neighborhood, not agricultural, and they thought the city should have sold the lots off to them at a much lower price than the tree farm developer paid. That doesn’t quite fit your scenario, of course, but I find it fascinating as an urban policy issue (although what I know about urban policy probably wouldn’t fill a teacup). But it raises the question, what if the city had decided to sell the land, for less, to local residents?

        My tentative response would be twofold. One, I think there are legitimate zoning regulations (not all such regs are legitimate, but zoning regs in general are not illegitimate in concept), and I think a city could rely on those to say, “sorry, this has been zoned a low-density residential area, not high density residential or agricultural.” The issue there is largely about the potential negative externalities of a project, the effects on people who bought with a pretty strong promise that the neighborhood would remain low-density residential. So their investment in that neighborhood was premised in part on that expectation–they would have paid less to live there without that expectation.

        Obviously things evolve, and there’s no absolute guarantee that our expectations will work out. And I personally–emphasize the personal there–don’t think regulations should be so strict that they try to protect us from all the vagaries of life. For example the lady kitty-corner across the street from me painted her house a horrendous shade of light green. It may have a marginal effect on my property values, and I know that it has a marginal effect on the quality of life of some of the neighbors because it’s aesthetically displeasing to them. One neighbor even called the police to complain. Me, I think that’s asking too much out of life, to think nothing should ever inconvenience me, and it ignores the fact that my preferences for a different color, if they were controlling, would likewise inconvenience that lady. But in the case of zoning, there’s a sort of official promise that “things won’t change too much.” It allows people some reasonable expectations on which to rely, and a dramatic violation of the promise to ensure those reasonable expectations is in some respects a broken contract.

        There’s no bright line between reasonable and unreasonable expectations (or regulations), of course.

        Second, I think it’s at least arguable that if the city owns the property, it’s more or less theirs to dispose with as they wish. If they want to keep a neighborhood low density residential, that’s their choice, I think. Where the amendment would kick in is if they decided that they did want an apartment building erected there, but rigged the bidding process to ensure only Joe the Developer could win it, or if Joe the Developer bought some lots and they created rules that allowed his, and only his, lots to have an apartment building.

        I hope that all makes sense, and at least clarifies the type of things I’m thinking about with this amendment.Report

      • Avatar Dan Miller in reply to J@m3z Aitch says:

        @jm3z-aitch It does clarify–thanks for the thoughtful reply! I’m most familiar with urban policy and development in Washington DC, which shaped my question. Here, some development is done by-right, but frequently, people who are building a new development will seek variances from the zoning code in one way or another–for instance, allowing additional units or building less parking than the code would otherwise require. The city can grant these exceptions or not, in consultation with a hyperlocal governing board called the Advisory Neighborhood Commission; oftentimes, the developer will offer various concessions to the neighborhood in exchange for the ANC not raising a fuss (paying for a bikeshare station, offering incentives to an especially attractive tenant like a Wegmans, etc). I am betting that these type of arrangements wouldn’t survive your proposed amendment, which might not actually be a bad thing but would certainly represent a major change.Report

    • Avatar North in reply to Michael Cain says:

      Out of curiosity Michael, why do you wish to locate your circuit fab line on expensive residential real estate, likely with annoyingly constricted transport access, with the headaches of furious neighbors calling in complaints on you from everything from noise to environmental issues when you could locate your factory on a much cheaper plot of land in a business park or commercial location that eliminates all of those issues?Report

      • Avatar Will Truman in reply to North says:

        I’ve commented before that one of the obstacles of getting companies to relocate from expensive parts of the country to inexpensive parts of the country is that executives want to live in the former. Their employees might be better off in Austin than Silicon Valley, but the executives don’t want that. Which is one of the reasons why a lot of the tech jobs that Austin gets are satellite offices and branches. Let’s the employees live there and the executives stay where they want to be.Report

      • Avatar North in reply to North says:

        On a national scale, Will, I agree entirely but on an urban level that arguement doesn’t hold since virtually no manager of a unpleasant industrial plant would want said plant located in his back yard.

        Dan, that may be, but frankly if someone is shrieking about an office building being built in their neighborhood I don’t have much sympathy. What the fish is the negative externality of an office building? It’s doesn’t impact its neighbors any more than a residential building and is arguably quiter than one (office buildings don’t have big parties on the law or screaming kids running around them).Report

      • Avatar J@m3z Aitch in reply to North says:

        North, are you sure you’re a liberal? 😉Report

      • Avatar Kim in reply to North says:

        North,
        Parking, if nothing else.Report

      • Avatar North in reply to North says:

        Closer to neoliberal Jame, but yes, Liberal. I view libertarianism as a razor, not an ideology. Also I can’t get around the commons. Waiting to see what happens with the atmosphere long term or tuna short term.Report

  19. Avatar david says:

    Badly phrased. Section 2 distinguishes by intent rather than by effect, so any legislation that might be prohibited by Section 1 can be easily validated by adding the magic words “for the [general?] welfare of the people”.

    You also need to be more aware of existing jurisprudence. What you are trying to do can be more readily achieved by adjusting the criterion of rational basis test.

    This may be more easily achieved than you think. In economic regulation, the prevailing precedent as per Williamson v. Lee Optical Co. is to apply weak scrutiny to economic regulations that are transparently constructed with rent-seeking in mind. The standard allows the court to accept legislator’s claims as to what effects the legislation may have in order to satisfy a rational basis for government interest.

    However, in areas of civil rights, the court has regularly applied a somewhat tighter standard of rational basis, the so-called “rational basis with bite”, where the ability of the legislation to actually achieve the claimed aims is discussed, and also the documented motives and statements of legislators.Report

    • Avatar J@m3z Aitch in reply to david says:

      Badly phrased. Section 2 distinguishes by intent rather than by effect, so any legislation that might be prohibited by Section 1 can be easily validated by adding the magic words “for the [general?] welfare of the people”.

      My take is that the Court isn’t always so easily fooled by boilerplate like that, but I’m open to your argument, and if you have a suggestion for improved language I’m happy to hear it.

      What you are trying to do can be more readily achieved by adjusting the criterion of rational basis test.

      Not so, because we have no way as citizens to force the Court to do so, nor would it force them to hold to that course if they did at one time change.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        I should emphasize, that your first point is particularly the kind of critique I’m interested in. Insightful analyses into how the Court would be likely to handle the text as written, based on their general interpretive methods, is crucial to avoiding big head-slapping D’Oh! moments after the fact.Report

  20. Would (targeted) government loan guarantees, say like those to build the transcontinental railroad, stand up to a challenge under this amendment? How would Fannie Mae, Freddie Mac, the Export-Import Bank of the US , and proposals for a national infrastructure bank fair? Would the Troubled Asset Relief Program be permissible? Must the government treat homebuyers and renters alike and eliminate the mortgage interest deduction?Report

    • Avatar J@m3z Aitch in reply to Creon Critic says:

      Ahh, too many! All fair, of course, but I don’t think they all come out the same.

      Can you choose one or two to start with?Report

      • This isn’t exactly helping, but one more came to mind after I posted. The government’s venture capital firm for the intelligence community, In-Q-Tel. By definition one of the purposes is to pick winners in ways that could run afoul of the proposed amendment.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Not helping at all, since I’ve never even heard of it. 😉

        Let me pick two?

        Trans-continental railroad. That process was so corrupt and renterific that I think there’s no way it could have stood up to the law. And the Great Northern was privately funded, so the argument that the model for the UP, et al was justified by public need doesn’t really fly. (IMO, of course.)

        TARP. My take or what I expect to be the SCOTUS take? I think it was clearly rentastic, but I suspect the Supremes would have upheld it. Hell, there were enough economists–relevant experts–saying something like it was necessary to prevent the financial system from imploding completely that I can’t imagine the justices standing up against that (possibly well-justified) fear.

        The others are harder and I don’t have immediate answers. Keep in mind, I’m just kind of playing the role of one counsel before the Court here. My answers are indicative of what I both want and think the amendment would accomplish, but most of these cases may have reasonable counterarguments. Unfortunately, if this ever passed it’s interpretation would be taken out of my hands.Report

      • To me, one person’s rents are another person’s essential investments for the future of the nation. In an effort to stop rent granting, you may also endanger the “investments for the future of the nation” side of the ledger.

        Great Northern versus first transcontinental, well, there’s a difference between 1893 versus 1869. I don’t know what tens of millions of 1860’s dollars translates to today, but the history of government backed major infrastructure projects is long and storied (as with, I acknowledge, the potential corruption, rents, mismanagement etc.). The private sector, rarely assembles enough capital to carry off these major projects ab initio. US interstate highways, Panama Canal, Pan-American Highway, European and Japanese high speed rail… the list of public megaprojects goes on and on.

        Then there is the policy side. Burt Likko already brought up the national security / dual use technology type issues upthread. But there are all sorts of less interesting “The government would like to discourage/encourage X” cases. Helping US exporters, helping home buyers, saving too big to fail financial institutions from collapse, encouraging sustainable use of natural resources… The sort of psuedo-neutrality, higher scrutiny for rent granting, you call for steps on quite a few toes.

        And “pseudo-neutrality” because we can’t undo the past, considerable subsidies to those who’ve already received them. Oil, gas, and coal come immediately to mind versus wind, wave, and solar. Terminating the government as incubator of infant competitors (relatively speaking) role comes to the advantage of mature competitors. Oil is far beyond the exploratory subsidy phase for instance, wave power may not be.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        steps on quite a few toes.

        Damn right.

        And “pseudo-neutrality” because we can’t undo the past, considerable subsidies to those who’ve already received them.

        Yep, and we can’t make up what we’ve done to Native Americans, so by all means let’s continue committing future injustices.Report

      • Compare a libertarian’s and a liberal’s list of the government would like to discourage/encourage X cases. The liberal’s wishlist is going to be considerably longer and government intervention heavy. Libertarians are naturally going to greet an additional veto point on government action with acclaim. Liberals, speaking for myself anyway, likely to be more wary. I mean, doesn’t the US system already have enough veto points? Both in the Constitution and the norms of the institutions (see, US Senate)?Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Agreed with that assessment.Report

      • Yep, and we can’t make up what we’ve done to Native Americans, so by all means let’s continue committing future injustices.

        See, the problem is I probably would’ve favored the exploratory subsidies at the time the oil industry wanted them – infancy of industry phase (in contrast to the oil industry today, which I’d call mature). To me, it wasn’t an injustice then. I also favor similar types of subsidies to the renewable energy sector. If anything, they have a stronger case to make re: climate change challenges and the sustainability of their sources of energy. The amendment you propose, correct me if I’m wrong, prevents the government from performing this industry incubator role.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        Creon,

        Like most in the economics discipline, I don’t buy the infant industry theory. It’s simply not right to take money from other people to support a new industry. If the industry is actually economically valuable, it will not need the help. I would certainly hope this amendment prevented the government from playing that role, which inevitably leads to waste and corruption.Report

      • Avatar Kim in reply to J@m3z Aitch says:

        James and Creon,
        I think the “infant industry” is best dealt with by more resource investment in science.Report

      • @kim
        I’m all for additional science investment. But I think government can play a positive, catalytic role through business incubators for instance. Despite all the public choice theory critiques, government can also bring a positive mix of values into the market when it intervenes. I’m skeptical of the idea that there is some optimal allocation of government resources out there, absent a host of important value decisions that need to be considered on their own terms. @patrick-bridges mentions affirmative action for instance. Can government encourage more women and minority owned businesses? Or another value, can government support transitioning away from fossil fuels towards sustainable energy via loan guarantees, direct investment, or other subsidies? The pace of change is certain to be impacted by whether the government is permitted to put its own resources into the renewable resources effort.Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        The pace of change is certain to be impacted by whether the government is permitted to put its own resources into the renewable resources effort.

        Undoubtedly, but pace of development of new industries can be suboptimally fast. Keep in mind that resources put into one venture are not available for others. If we’re talking about contributing other values into the market, well, yes. But if we’re talking about increasing efficiency, well, probably not. And I tend to be more skeptical of government’s values, probably, than you.Report

      • NobAkimoto NobAkimoto in reply to J@m3z Aitch says:

        Somewhat tangentally: Where does this leave things like business incubators and tech incubators at public universities? Would university research programs in general that are connected to a certain industry be considered suspect if they have joint programs or technology commercialization programs?Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        There’s our undiscovered country, I think.Report

    • @jm3z-aitch
      but pace of development of new industries can be suboptimally fast.

      Part of the climate change argument is the urgency of the need to transition.You’re unlikely to get arguments that we’re switching to renewables too quickly.

      Keep in mind that resources put into one venture are not available for others.

      Programs can be structured to minimize this problem. Loans and loan guarantees are one means of leveraging government funds. Looking at some of the products of the Export-Import Bank for instance I don’t see how some of them run into this problem. Say for instance you have a cash flow issue, your business has firm orders from abroad that you need to turn to cash, the Ex-Im Bank can offer you working capital borrowing against those firm orders. Have I taken from one venture to put into another? Also, tax expenditures may get around this limitation in significant ways. If the government grants favorable tax treatment to Activity X it is unclear that we’ve depleted the resources for Activity Y. Yes, the overall pool of tax expenditure is limited (though the capacity of the US to engage in this activity is pretty large), but in terms of head to head competition, I haven’t taken from Y to give to X. Or am I thinking about that the wrong way with respect to the Ex-Im Bank or tax expenditures?Report

      • Avatar J@m3z Aitch in reply to Creon Critic says:

        Since we’re extremely unlikely to shift to renewables quickly enough to actually reduce the amount of CO2 in the time span we’re told is necessary to avoid serious warming, even with gov’t investment, it’s quite likely those resources should be put toward adaptation. Or they might produce more benefit to humans by developing sources of clean drinking water for everyone in the world. Or they might even do more good left in the market to produce more wealth that enables us, either socially or individually, to better afford whatever mix of expenditures makes us, on net, better off.

        The problem is, nobody actually knows which course is best because it’s not knowable. It’s such a complex a problem, with such a vast number of unknown and unmeasurable variables, that it is literally beyond human knowing. Anyone who claims certainty that a faster shift to renewables is the best solution for humanity’s well-being is not being honest with us.Report

      • @jm3z-aitch

        I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the Earth.

        There’s a good reason for the government to set stretching goals. Sometimes we manage to achieve them. In terms of the switch to renewables, Germany has made great strides in a short period of time. Would the US following Germany’s course be enough? Should we focus more on adapting to the climate change that’s locked in due to past reliance on fossil fuels? Excellent questions. But I’d want to leave latitude for the political branches to answer them rather than prohibiting a toolbox full of policy options, or subjecting those options to the courts for judicial review. There’s much less room to have these arguments (effectually, as in we get to put the policy into action) on the merits when a set of options has been cordoned off as rent-granting.Report

      • Avatar Michael Drew in reply to Creon Critic says:

        Regardless of certainty, for me preserving government flexibility to respond to challenges like this with the kinds of policies that the amendment would disallow is a concern that is likely to be fatal to potential support for this amendment to me. There are certainly good arguments against infant-industry subsidies and the like in many, many cases. But it seems to me that exogenous challenges like climate change, as well as other concerns that might elevate aims other than market efficiency among the legitimate aims of government action, constitute reason to leave these determinations to the legislative process, not constitutionally predetermine the right policy approaches. It seems like what we’re going for here is not actually the elimination of rent-granting, but the governing of it according to best policy considerations, with a burden of proof on granting the rents. It seems to me it the job of the legislature to maintain that policy posture, not of the courts to maintain constant review of a kind of moderate burden of proof on the justification for a given rent-granting (in effect) policy, which is the consensus that seems to me to be emerging. I suppose I could tolerate an amendment that enunciates the specifics of that balance/burden, or proscribes outright a much more narrowly defined set of pernicious rents, but in honesty I think that would be an undue burden on already stressed courts (not so much the narrow set, which I could still get on board for, but the constant balancing). Creon’s example of industry support in response to a discreet real threat like climate change has persuaded me to lean against the basic vision of the amendment as laid out. It’s the job of the legislature to make these determinations about, as he puts it, necessary social investments versus unfair privileging of particular firm and industries. I don;t believe the courts as currently constituted even conceive of themselves as well-placed to review those determinations. The solution to corrupt or socially valueless economic privileging by government is scrupulous reporting and (attempted) shaming of those sustaining the privileges, with the resulting response from the privileged about the social value of their privileges weighed against the indictment by the people and its representatives. I think it’s a dubious prospect to think that courts are up to the challenge of adjudicating all those disputes in a satisfactory manner.

        I do remain persuadable, however.Report

      • Avatar J@m3z Aitch in reply to Creon Critic says:

        Creon,

        A. Germany is really screwing itself over with high electricity prices. In one of the world’s most developed nations there’s a crisis of people unable to afford enegy. link

        B. I don’t believe national goals are particularly coherent or wise. For one, it reinforces a dangerous sort of nationalism, I think, and nationalism is in my mind a scourge on the earth. For two, just because government can stretch us toward a goal doesn’t mean it’s a wise goal, or that it’s wise to stretch toward it that fast (which was the point of my prior comment).Report

      • Avatar J@m3z Aitch in reply to Creon Critic says:

        But it seems to me that exogenous challenges like climate change, as well as other concerns that might elevate aims other than market efficiency among the legitimate aims of government action, constitute reason to leave these determinations to the legislative process, not constitutionally predetermine the right policy approaches.

        I don’t understand the assumption that we can’t respond to climate change without granting rents. That seems to me a fundamental misconception. Perhaps a colossal failure of imagination.Report

      • Avatar J@m3z Aitch in reply to Creon Critic says:

        P.S., Michael,

        Paragraphs, man. Don’t they teach paragraphs in Badgerburg? Honestly, I just won’t read such long blocks of undifferentiated text. I stop after about two sentences.Report

      • Avatar Michael Drew in reply to Creon Critic says:

        As you have seen, sometimes I put in graf breaks, other times I get in a hurry and don’t – usually when I’m just getting the ideas out there, not expecting people to necessarily care what I’m saying.

        But since you’re interested, here you go:

        Regardless of certainty, for me preserving government flexibility to respond to challenges like this with the kinds of policies that the amendment would disallow is a concern that is likely to be fatal to potential support for this amendment to me. There are certainly good arguments against infant-industry subsidies and the like in many, many cases. But it seems to me that exogenous challenges like climate change, as well as other concerns that might elevate aims other than market efficiency among the legitimate aims of government action, constitute reason to leave these determinations to the legislative process, not constitutionally predetermine the right policy approaches.

        It seems like what we’re going for here is not actually the elimination of rent-granting, but the governing of it according to best policy considerations, with a burden of proof on granting the rents. It seems to me it the job of the legislature to maintain that policy posture, not of the courts to maintain constant review of a kind of moderate burden of proof on the justification for a given rent-granting (in effect) policy, which is the consensus that seems to me to be emerging. I suppose I could tolerate an amendment that enunciates the specifics of that balance/burden, or proscribes outright a much more narrowly defined set of pernicious rents. But in honesty I think that would be an undue burden on already stressed courts (not so much the narrow set, which I could still get on board for, but the constant balancing).

        Creon’s example of industry support in response to a discreet real threat like climate change has persuaded me to lean against the basic vision of the amendment as laid out. It’s the job of the legislature to make these determinations about, as he puts it, necessary social investments versus unfair privileging of particular firm and industries. I don’t believe the courts as currently constituted even conceive of themselves as well-placed to review those determinations.

        The solution to corrupt or socially valueless economic privileging by government is scrupulous reporting and (attempted) shaming of those sustaining the privileges, with the resulting response from the privileged about the social value of their privileges weighed against the indictment by the people and its representatives. I think it’s a dubious prospect to think that courts are up to the challenge of adjudicating all those disputes in a satisfactory manner.Report

      • Avatar Michael Drew in reply to Creon Critic says:

        Of course we can, but it takes a broad category of tools out of the hands of policymakers. If your amendment affirmatively (and even primarily) wants to take industry-growing subsidies out of the hands of policymakers even at times when the policy problem can be reasonably argued to elevate concerns outside of economic efficiency as legitimate ends for government action, as it does for climate change, and I, now that CC has prompted me to think about it, affirmatively want to keep those tools potentially in their hands for use at appropriate times, then I’m not sure what we have to talk about wrt to this amendment in particular. (Though I would be on board with other ways to try to govern their use at other times better, possibly to include a much more modestly conceived amendment, though as a practical matter it seems like other means of reform are probably better subjects for discussion in this area).Report

      • Avatar Michael Drew in reply to Creon Critic says:

        …I know that sounds weird on the paragraphs. To explain a bit more, I thought this discussion with you Creon was the best so far on the topic, and it was really influencing my thoughts on it. I wanted to try to record the fact that I was influenced by the discussion without really meaning to intervene in it, because it was so productive. Somehow, that translated into just writing that out really fast and hitting submit with a kind of I-don’t-really mean-to-enter-this-discussion intention. Obviously, the words don’t appear any lighter on the screen if I do that, so it just led to frustration. Sorry about that. Point is: this was a great discussion between you two. Well-done. And as I say, I remain persuadable.Report

      • @jm3z-aitch
        Thanks for the link to the Spiegel piece, it was an interesting read. Three points jumped out at me.

        After the Fukushima nuclear accident in Japan two and a half years ago, Merkel quickly decided to begin phasing out nuclear power…

        I’m not certain as to my thoughts on nuclear power, but this is a significant point when looking at the energy costs criticisms leveled at Germany I’d have appreciated more exploration of the point in the piece.

        Two-thirds of the price increase is due to new government fees, surcharges and taxes. But despite those price hikes, government pensions and social welfare payments have not been adjusted. As a result, every new fee becomes a threat to low-income consumers.

        The entire regressivity issue is easily solved for me given my other policy preferences.

        Third, the Swedish policy that’s highlighted as preferable to Germany’s also seems to run afoul of the amendment: state mandated renewable quotas, fines for failing to meet quotas, and tradable credits. Correct me if I’m wrong, but those policies grant significant advantages to the renewable sector.

        I don’t believe national goals are particularly coherent or wise.

        Are there particular types of goals that you are against? I can’t imagine you mean goals like lower unemployment, less gun violence, less child poverty… Did you mean specifically the German-type targets X% renewable energy generation by the year 2020, those types of goals? It seems like part of governing is imagining what you want the world to look like in such a way that it is impossible to stay away from goal-setting.Report

      • Avatar J@m3z Aitch in reply to Creon Critic says:

        he Swedish policy that’s highlighted as preferable to Germany’s also seems to run afoul of the amendment: state mandated renewable quotas, fines for failing to meet quotas, and tradable credits. Correct me if I’m wrong, but those policies grant significant advantages to the renewable sector.

        Should we be focusing on the renewable sector or the energy sector? I always think of the Microsoft case where the judge at times treated Apple as a competitor, but then when deciding whether Microsoft was monopolistic unjustifiably narrowed the relevant sector down to PCs. So the drawing of lines between business sectors is, shall we say, something of an art form. And there are already energy firms a-plenty that operate both fossil and renewable energy plants. Additionally, fossil fuel plants have significant negative externalities–not requiring them to internalize those costs is itself a type of rent.

        Are there particular types of goals that you are against? I can’t imagine you mean goals like lower unemployment, less gun violence, less child poverty… Did you mean specifically the German-type targets X% renewable energy generation by the year 2020, those types of goals?

        Yes, good clarification there. I’m not opposed to the type of things you listed there, but I’m opposed to anything that smacks of national industrial policy or just showing off how great “our nation” is. I see frequent references along the line of “America used to be great–we built all these grand projects, etc. etc.” But I don’t think we need publicly funded pyramids to be a country that’s a great place.Report

  21. Avatar trizzlor says:

    I’m confused over how this will impact regulation. If a state sets stricter workplace safety rules for coal-mines than for convenience stores, is that privileging one industry over another? If certain businesses are required to carry insurance policies of at least X amount, is that considered a barrier for entry? If the NIH/NSF partition out scientific grants using a review-board process, is that providing a preferential subsidy? What if it’s the FDA deciding what drugs can go to market? What if it’s the AMA restricting what doctors can practice?

    Basically, how un-competitive does the bidding/regulatory process have to be before it runs afoul of the law?Report

    • Avatar J@m3z Aitch in reply to trizzlor says:

      Turtle-man,

      Coalmines and convenience stores are not only different, they’re not competing against each other, so different regulatory standards really don’t even have a whiff of economic privilege about them. Now if convenience stores and drug stores had different standards, it would be suspicious.

      Regarding the insurance policies, I think the courts would do a balancing test to decide if the requirement was legitimated by a desire to ensure it could cover costs suffered by customers, neighbors in case of fire, etc, or if it was set higher than necessary to accomplish that, so that–at its level, not in its very fact of existence–it created an illegitimate barrier to entry.

      Somebody else asked about NSF grants, and I’m still pondering it. In general, I would say any competitive bid process is not rent-seeking. On the other hand, my profession just put in a fair amount of lobbying to preserve its share of NSF funding. Open debate on this one, still.

      FDA, as long as they can continue to persuade us that their regulatory procedure saves lives (there’s some debate there, although they’re handily winning it) is in the clear.

      AMA isn’t a government agency, so they’re OK, unless they get the de facto power to dictate legal standards.

      Basically, how un-competitive does the bidding/regulatory process have to be before it runs afoul of the law?
      That’s the kind of question that is impossible to answer without detailed examples. But essentially any time the outcome is rigged it’s likely to run afoul of the law.Report

  22. Avatar Kazzy says:

    @jm3z-aitch

    I assume this would prevent the sort of anti-Walmart legislation that the DC city council was pursuing and I wrote about a few months back?Report

    • Avatar J@m3z Aitch in reply to Kazzy says:

      K,

      I would think so. It’s certainly one of the types of things I’m targeting. Not because I care about Wal Mart, but because such a power can be used against anyone who happens to be unpopular at the moment.

      This ties the idea into one of my fundamental political positions, which is what I call the sports rule–if you’re willing to use a rule against someone else you have to be willing to have it be used against you; if you are unwilling to have the rule be used against you, then you have to forgo your desire to have it available to use against others.Report

      • Avatar Kazzy in reply to J@m3z Aitch says:

        I try to impart a similar logic on my student.

        “If you hit people and don’t take responsibility for it, that means our classroom allows hitting. That means people will hit you.”
        -or-
        “I know you want to go first. And I’d love to let you go first all the time. But everyone wants to go first all the time. So I’d have to let all of them go first, too. And everyone can’t go first.”

        Re: the anti-Walmart bill, in a nutshell it basically required a higher minimum wage for non-unionized businesses over a certain square footage. This basically excluded everyone but Walmart from the rule. And the few big box retailers who would have met the criteria were grandfathered in for a certain period. So, it basically applied just to Walmart.

        The weirdest thing was the economic arguments made in favor of it. Now, I’m know economist, but the primary argument was that Walmart’s lower wages would depress wages elsewhere. So basically Home Depot would say, “Walmart is only paying its employees minimum wage while we are paying minimum wage plus a buck? Well, screw that. Minimum wage for us, too.” My hunch was that the opposite would happen. Why work for Walmart for minimum wage when you can work at Home Depot for more? Walmart would have to raise wages to compete for employees.

        But now I’ve digressed into a topic I am woefully and admittedly ignorant of. Heh…Report

      • Avatar J@m3z Aitch in reply to J@m3z Aitch says:

        No, you’re right. If Home Depot (or whomever) could get the labor productivity they wanted at the lower wage they’d already be paying it. The fact that Wal Mart might be satisfied with lower labor productivity in exchange for lower wages does not mean another firm will.Report

  23. Avatar Michael Drew says:

    I think I’d want the endorsement of legitimate regulation built into the main provision rather than separated. If the intention is to instruct courts to balance legitimate regulatory intent against differential impact on different firms or industries, then you might as well just say that straight out. The language in the second section saying that regulation will be legitimate where it doesn’t conflict with the first section doesn’t protect regulation from the first section at all. I.e., if there’s a legitimate regulation that has a different impact on different firms in an industry, the regulation, according to this language, would still have to be tossed. I think the first section should just say

    Neither Congress nor any state or political subunit of a state shall make any law privileging any business, firm, industry or economic competitor (potential or real) over any other, or that serves to create a barrier to entry to any industry or occupation, or that limits competition between potential competitors within any industry through any form of cartelization, or that provides to any business, firm, industry or economic competitor any form of subsidy, including preferential tax treatment, other than for not-for-profit entities, unless that law is passed pursuant to a legitimate regulatory interest of the United States as granted to Congress under Article 1, section 8, or of the states and their political subunits, to create economic regulations or to regulate for the health, safety and welfare of the people, and is suitably crafted to accomplish that purpose, and does not create such privileges or subsidies to any extent not necessary for carrying out said legitimate purpose.

    I realize that’s a hash. In my view, though, the language we see in the post doesn’t achieve a balancing instruction: it just says all regulation previously allowed under I/8 or under the state police power must now be fully consistent with Section 1 of the proposal, where in fact there’s no balancing test. Perhaps it’s implied and likely to be the way it’s applied, but if it’s the intent, why not make it explicit?

    Then I’d probably want a section laying out what it is for a regulatory interest to be legitimate for the federal government, though I suppose that would just be a rewriting of Article I. (Which would be pretty okay with me, tbh – if we’re going to accept that Congress has some fairly broad regulatory powers, I think we might do well to have a document that’s slightly less sketchy about what those are and aren’t.)Report

    • Avatar Michael Drew in reply to Michael Drew says:

      Thoughts? Anyone?Report

      • Avatar J@m3z Aitch in reply to Michael Drew says:

        Sorry, still pondering it from a legal interpretation perspective (stretching my mind back to when I used to actively think about Constitutional Law) and trying to decide if it actually works out to any substantive difference in interpretation. I’m not sure it does, which means I also don’t think it’s any worse than what I’ve written. In fact I’m more sure that it’s not any worse than I am that it’s not any better, so maybe it’s better.Report

      • Avatar Michael Drew in reply to Michael Drew says:

        I’ll be honest and say I think it significantly weakens the amendment, which I would understand if you opposed simply because you have it calibrated the way you want it. We’d probably part ways based on this (though I’d be open to more restrictive language, somewhere between these two), but that’s just because I’m only open to the idea, not attached to it in any way. But from the way you’ve talked about your vision for the effects, I feel like this is closer to it, not to gainsay your drafting ability. As I’ve said, I think that what you’ve written would significantly narrow the field of what would be allowable under the I/8 and the state economic powers, while what I’ve written would basically defer to it, while necessitating a more thorough delineation of what’s legitimate under I/8 and the state powers.

        I think the real upshot here is that what you propose would require a broad re-clarification of what is and isn’t legitimate economic regulation under the various provisions that allow it as of now (though, in the case of the state powers, this new limit would completely reshape that, since as of now, there’s basically no limit on it other than equal protection, nondiscrimination, etc.). We can’t say what would be allowed by this amendment because it’s allowed by Article I unless we know what Article I allows, and that;s a can of worms that is very much open. And then there’d be the question of whether that interpretation should be altered in view of this new imperative from the new amendment. That’s why I say that if we were to do this, we might as well just go whole-hog and clarify what kinds of regulatory aims and powers are legitimate for the various levels of government to begin with – because those questions would be entirely intertwined with this new principle, and they’ll inevitably mutually affect each other anyway. If you try to pull off the leg, the thigh will come with it messily if not neatly cut, so you might as well just make the cutup high (or something like that – gobble gobble).Report

      • Avatar J@m3z Aitch in reply to Michael Drew says:

        I guess I’m just not seeing that the Court would necessarily read the two versions very differently. Not that I couldn’t be wrong about that. I’ll keep pondering it.Report

      • Avatar Michael Drew in reply to Michael Drew says:

        They definitely could read them the same, and I agree it’s likely they would. This would just make it less uncertain that they would, and, again, in my view simply make the intended operation of the amendment more clear. The only reason not to adopt something like my proposed change IMO is to keep open the possibility that courts might read this as a whole new interpretive lens for Article I. Again, keeping in mind that, in the short term, the operative enforcers here are “courts,” not “the Court,” and that, when cases do finally reach the Court, some significant amount of interpretive momentum will already have been established.

        But I’ll stop pestering you and let you think.Report

      • Avatar J@m3z Aitch in reply to Michael Drew says:

        But I’ll stop pestering you and let you think.

        How come I never hear that from my kids?Report

      • Avatar Kim in reply to Michael Drew says:

        I am happier with Mike’s revisions, though I must confess to wondering if i’d have been as happy had they been proposed in the first place.

        Confounded brain!Report

  24. I have to go to work soon, and I have a few suggestions and comments.

    First, instead of referring to “this section” in your provisos, why not refer to “section 1.” “This section” seems a bit confusing, implying, to me, the section in which the proviso is stated and not “section 1.” I admit, that’s a nitpicky point.

    Second, as for standing, I am a bit concerned about such a “diffuse” harm standard. It seems to go against the principle of “case or controversy” you pointed out in the explanatory portion of your OP:

    I can only suggest advisory opinions, and I am (we are) constrained in our judgements for the same reasons the Court doesn’t do advisory opinions—unless there’s an actual case or controversy it’s hard to flesh out all the arguments on each side to their fullest.

    A too-diffuse standing standard, and we approach something like advisory opinions. I am, however, convinced that with even such a standard, the courts would fashion stricter rules than the text implies. However, if the text of the amendment could signal a more workable standard (I’m not sure what that would be), then the courts’ interpretations would be more channeled to a certain standard and they won’t have to devise one unpredictably and de novo. (I hope that’s clear. I’m not opposed to extending standing so much as I’d like it to be done in much more explicit terms.)

    Third, also regarding section 4, why not permit state courts to enforce the amendment? I suppose they already could, because the amendment applies to state governments and the supremacy clause means that state courts are obliged to enforce applicable elements of the federal constitution. So perhaps an explicit grant of authority is not necessary.

    Fourth (this is a concern/comment more than a suggestion): how would this amendment affect local so-called “natural monopolies” (e.g., utilities, in which competition is not always possible, although I am aware that some are making attempts to introduce competition) or grants of privilege in exchange for public service. I imagine that in any case, the courts would fashion an exemption for true instances where competition wouldn’t work. But it’s one concern.

    Fifth (this is perhaps a perfect being enemy of the good argument?), isn’t the amendment you propose akin to the equal protection clause of the constitution, a way of saying, “we’re re-enacting the clause, and this time, we REALLY MEAN IT!” I do wonder how much effect it would have. But again, that’s probably not a fair argument. The amendment is something, and as long as one agrees with the starting assumptions (I’m not sure I do, but I’m not sure I don’t), then something is usually better than nothing.

    Those are just first impressions, after reading the amendment and the comments here. I’ll need to think about this some more.Report

    • Addendum: I’m not sure what I think about the effect of this amendment on unions. I imagine the effect would be salubrious, but then, I’m pretty lukewarm about unionization.Report

    • Avatar J@m3z Aitch in reply to Pierre Corneille says:

      Good points, Pierre. Thanks, especially on the wording and standing issues.

      First, yes, it is a sort of equal protection clause. I appreciate that you recognize that.

      As to natural monopolies, that is a tricky spot, isn’t it? On the one hand, regulations are necessary, in the absence of an real prospect for market competition. On the other hand, do those same necessary regulations work to preclude entry? The ideal would be regulations that function to control a natural monopoly but do not effectively restrict entry if new technology breaks down the naturalness of the monopoly. I’m honestly not sure how easy or difficult it would be to write such regulations.Report

  25. Avatar J@m3z Aitch says:

    Thinking somewhat randomly, I probably should have called this the OWS amendment. In a lot of ways, that’s really what it’s about, breaking–or at least somewhat loosening–the business community’s grip on government policy. OWS was a mess, no doubt about it. I’ve been pretty vocal in excoriating them for their lack of direction and coherence. But that doesn’t mean they didn’t have a point at the bottom of it all. That’s why it’s so frequently commented that there’s a core–albeit unfulfilled–relationship between OWS and the Tea Partiers.

    While obviously not everybody has enthusiastically signed onto my proposed amendment, so far it seems like the only ones who are absolutely appalled are corporatist Democrats.Report

  26. Avatar North says:

    It’s a very interesting ammendment, might plausibly do some good. Not a snowball’s chance in hell of ever getting passed of course, flag burning would be a more likely one to get through in comparison but it’s a fun thought experiment.Report

    • Avatar J@m3z Aitch in reply to North says:

      Not a snowball’s chance in hell of ever getting passed of course,

      True, and I’m under no real illusions. But if nobody ever proposes it, it’s guaranteed nobody will ever consider it. There was consumption value just in the writing of it, and the faint hope that maybe a few economics bloggers might stumble across it and start writing favorably about it, and then maybe Matt Y and his ilk of public intellectuals might bring it to a wider audience.

      Highly unlikely, no doubt. But as our Presidents like to say, I’d like to start a national conversation.

      (Having used both the phrases “public intellectual” and “national conversation,” I’m now off to flagellate myself with thorny branches in penance.)Report

  27. Avatar Mad Rocket Scientist says:

    This is very cool!

    Man prints prosthetic hand for son.

    And dovetails nicely into the discussion, ala the last paragraph:

    Because a 3D printer can make perfect replicas of many kinds of object, manufacturers may seek to brand it a “piracy machine” and demand additional measures to protect their traditional way of doing business. Mr Weinberg worries that they may behave rather like the record industry did when its own business model—based on selling pricey CD albums that few music fans wanted, instead of cheap single tracks they craved—came under attack from Napster and other file-swapping networks.

    Report

  28. Avatar Dan Miller says:

    I just had a thought as I was reading an unrelated article, but it seems like this amendment would nullify the common anti-choice tactic of writing “health regulations” that are dubiously related to actual health but instead are aimed at closing abortion clinics (for more on this tactic, start reading here). So there’s another reason to support it (if you’re a liberal) or oppose (if not).Report

  29. Avatar Kazzy says:

    @jm3z-aitch

    What do you think of liquor licenses, which are often limited with various justifications given for the practice?Report

    • Avatar Patrick in reply to Kazzy says:

      I’ll chime in here.

      Typically, sin licenses are significantly artificially restricted, without reasonable cause.Report

      • Avatar J@m3z Aitch in reply to Patrick says:

        What Patrick said.

        I would probably still allow for some zoning control, though. Just because you’re the nth person who wants to open a bar or strip club in a neighborhood of single family homes doesn’t mean there aren’t actual negative externalities…in fact it plausibly means there are extra negative externalities from doing so. But if there’s enough demand in the town for another bar or liquor store, well, the market’s actually a form of democracy, too, and as LWA keeps telling me, we need to listen to the people.Report

  30. Avatar NewDealer says:

    @jm3z-aitch

    http://deadspin.com/heres-how-cobb-county-will-pay-for-the-braves-ballpar-1464404976

    Would your rent seeking amendment prevent the use of public/government money for the building of private sports stadiums?

    What remedies would ordinary citizens have to bring suit against actors and/or the government for rent seeking?

    Would the citizens of Cobb County be able to sue for an injunction if they wanted?Report

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