Friday, November 21, 2008

Will the left ever call for deregulation?

Matthew Yglesias writes:
Horwitz cites minimum wage laws and occupational licensure requirements as examples of non-beneficial programs. I’m not sold either way on the minimum wage, but definitely agree about the licensing. At the same time, things like rules that prevent dental hygienists from practicing without being supervised by a dentist aren’t being perpetrated by “the left,” they’re being perpetrated by dentists. It’s a classic example of concentrated benefits and diffuse costs. And the question, to my mind, is what is to be done about it.
How about eliminate the rules? If the left really wants to claim that they aren't perpetrating this, then how about someone on the left calling for the elimination of these rules that are in place? These rules serve only to reduce competition. They place a barrier to entry on the hygienist profession, and tying those that exist to dentists. Thus they make hygienists more scarce and raise the price that they can command. This is the case, not just for dental hygienists, but for plumbers, doctors, and believe it or not, interior designers! That's right. You need a license from the government to design interiors. Because, heaven knows the dangers that could accrue to the public if this was done without a license.

So if the left sees the issue of licensure as destructive, what do we see coming from them? Do we see them calling for elimination of government rules? Do we see them calling for decreasing the size and scope of the government? Of course not. We see the left constantly asking for *MORE* government involvement in this process to correct previous bad results. Let me know when the left starts trying to solve the problems caused by government, without calling for more government.

Now, of course, Yglesias also points out that we don't see this kind of thing from the right either:
If it were the case that electing politicians who are given to waxing effusive about the virtues of free markets (i.e., Republicans) was likely to mitigate such abuses, I would look more kindly on such politicians. But in practice, it doesn’t seem to make much of a difference.
On this point, he is, of course, correct. Which I would think would lead the left to exploit an opportunity to find the libertarian voters. But given that we're not as powerful as the interior design segment, that's not likely to happen.

The main point of Yglesias' article is that there needs to be a subtlety when it comes to deciding which government programs are effective and which ones cause harm. He would prefer a scalpel to a hatchet (to steal terms from the campaign). I think he's right that there are some programs that are doing good, but I take a much more conservative approach. In my opinion, history shows government programs mostly causing harm, and occasionally doing good. As a result, get rid of all of them. Then later on, put forth a case for why a particular program will be of net benefit. Make sure to use economics in the analysis, and then, and only then, should we consider bringing those programs back.

If we take the scalpel approach, we'll spend all of our time trying to demonstrate why the first program is doing harm, and miss the chance to cut most of the harm causing programs. If you agree that the vast majority of government programs cause more harm than good, this is a recipe for never changing anything. Which is exactly where we have been for the last 70 years.

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