Honorable Intentions

Having witnessed several noble debacles, I’ve come to believe that principled ideologues have some obligation to outline how their preferred policy choices would function in a real-world setting. It would have been nice, for example, to have had a robust national debate on the merits of occupying Iraq before we started lobbing smart bombs through the desert.

So while I enjoyed reading Roderick Long and John Schwenkler on corporatism and libertarianism, I’m left wondering how exactly one would go about liberalizing a broad range of economic activities in our current political environment. I’ve always thought that the idea of regulatory capture was one of the more persuasive rebuttals to various progressive policies, but I’m not sure why corporations would suddenly cease to influence the political process in the midst of a thorough-going effort to liberalize the economy. Long actually discusses this problem in the context of conflating libertarianism with the interests of big corporations:

Similar concerns apply to that other conservative virtue-term, “deregulation.” From a libertarian standpoint, deregulating should mean the removal of governmental directives and interventions from the sphere of voluntary exchange. But when a private entity is granted special governmental privileges, “deregulating” it amounts instead to an increase, not a decrease, in governmental intrusion into the economy. To take an example not exactly at random, if assurances of a tax-funded bailout lead banks to make riskier loans than they otherwise would, then the banks are being made freer to take risks with the money of unconsenting taxpayers. When conservatives advocate this kind of deregulation they are wrapping redistribution and privilege in the language of economic freedom. When conservatives market their plutocratic schemes as free-market policies, can we really blame liberals and leftists for conflating the two?

This is a real PR hurdle, but corporatism also poses an immense challenge to the good-faith implementation of libertarian policies. Despite our best intentions, the deregulatory process would remain extremely vulnerable to all sorts of political pressures. Given these structural constraints, I sometimes envision deregulation as a sort of libertarian dystopia – think Bush’s Prescription Drug Benefit on steroids – where corporate priviliges remain largely untouched while welfare programs are systematically dismantled in the name of “curbing government waste.” If we’re going to be stuck with a massive regulatory apparatus, I’m a lot more sympathetic to saving programs aimed at addressing real social needs, and I worry that libertarians and other small-government advocates risk providing intellectual cover for a political process that isn’t very liberal at all.

UPDATE: Edited for clarity.

2 Comments

Filed under Economics, Libertarianism

2 responses to “Honorable Intentions

  1. Pingback: Good Governance «

  2. Pingback: Cato Unbound » Blog Archive » When Corporations Hate Markets: Best of the Blogs

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