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Government Capture

January 22nd, 2008 · 7 Comments

While I have some quibbles with the rest of this post, this is actually a very strong point:

One point of dispute, though, is that to me the idea of state committed to neutral and effective administration of justice around laissez faire lines seems like an illusion. The alternative to reasonably effective democratic institutions and a viable left-wing political movement isn’t free markets but the capture of the state by large economic interests as during the Gilded Age or, indeed, the Bush administration.

This is essentially the same point upon which Noam Chomsky based an old lecture called “Free Market Fantasies.” The hope, of course, is that a sufficiently small government won’t be worth capturing. But this has always struck me as one of the stronger objections to a libertarian program.

Tags: Libertarian Theory


       

 

7 responses so far ↓

  • 1 Brian Moore // Jan 22, 2008 at 5:37 pm

    Fair enough, but if we ignore the “small government is less worth capturing” point, then I’m not sure I see the difference between a libertarian government and a government with “reasonably effective democratic institutions.”

    I think libertarians (and most people) fall into the Winston Churchill camp on democracy: “It has been said that democracy is the worst form of government except all the others that have been tried.” There’s no reason you couldn’t have a “libertarian program” and then have a democratic process like we do today to protect the state from capture. I’m not convinced they actually do a good job of protecting, but that’s another debate.

    Secondly, I assume that he’s implying that a “viable left-wing movement” would reduce the chance of capture because those people (upon election to office) would be biased against being pawns of corporate interests — but I think it would certainly be possible to find libertarian-types who would also feel the same way. And perhaps without the desire to be beholden to other interests, since evil CEO’s aren’t the only lobbyists in DC.

    It seems to be an argument that “if only MY guys were in office, they’d be honest and pure!” I find the “good systems” argument of democratic institutions more compelling, but in a world where companies stand to benefit so much from subverting the government, I think the only possible method is to reduce the benefit they can get, by reducing governmental power. This has the also agreeable-to-Yglesias benefit of reducing the amount of damage those pesky Republicans commit when they manage to get into office.

  • 2 Chris // Jan 23, 2008 at 4:26 pm

    If you can buy off the businesses that stand to lose from creative destruction and obstruct economic progress, it makes it more likely that you’ll get less inhibited wealth-creation. That’s log-rolling, and simply part of the nature of a separation-of-powers political system.

    But, yes — a government big enough to free up a huge market is also big enough to take a share of the profits that result. I think Hamilton and Madison knew this when he advocated for continental government. Though, on balance, I don’t think that’s such a terrible thing…

  • 3 Jaap Weel // Jan 24, 2008 at 3:59 am

    I wrote a wordy reply to this, because I think there’s something dreadfully fundamental somewhere about whether or not one accepts the Chomsky-Yglesias line here.

  • 4 Jaap Weel // Jan 24, 2008 at 6:32 am

    Chris,

    As for the buying off: I think that option is not considered often enough. A typical example is farm subsidies. How much would you have to pay the farmers once to be able to abolish subsidies in the future?

    Now of course the dynamics of democratic politics could well be such that you end up buying them off and then later re-instituting the subsidies anyway…

    But it’s a strategy that deserves to be thought about.

  • 5 Brian Moore // Jan 24, 2008 at 10:42 am

    “If you can buy off the businesses that stand to lose from creative destruction and obstruct economic progress, it makes it more likely that you’ll get less inhibited wealth-creation. That’s log-rolling, and simply part of the nature of a separation-of-powers political system.”

    But the business doesn’t look at it as “buying off” they see it as an important payment to preserve their Vital American Industry (or whatever wonderful reason they have). If they realize that the government is throwing that many dollars around, they’ll start to come up with new reasons to need that money.

    The only way to prevent/minimize that, short of magically incorruptible politicians, is to make it less valuable to co-opt this system. The end point is where the shady corporate lobbyist meets the senator at the hotel room with $100k in a briefcase, but the senator can only offer him a subsidy of $200k, and the lobbyist says “we can get that kind of margin by actually making products! The hell with you!” And then the lobbyist suffers a massive heart attack, as God realizes he has no more purpose in life.

  • 6 dave w. // Jan 24, 2008 at 9:16 pm

    J. learns.

  • 7 dave w. // Jan 24, 2008 at 9:17 pm

    oh, yeah, and: Sherman Act: learn it, luv it, live it!

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