The Left Libertarian Nanny State

Dean Baker’s book, The Conservative Nanny State, is now available online on PDF. The basic premise of the book is that capitalism is inherently based on a nanny state that keeps things in order for the upper class via subsidies to business, selective enforcement of laws, restrictions on immigration of professionals, etc.

The book does a fairly good job at driving home the point that a lot of conservative economic policies are far from free-market. Unfortunately, it also engages in a lot of nuttiness by pretending that some of the total deregulation solutions will work. Further, by not invoking the things changing which is too clearly indefensible, the book understates its thesis.

The number one benefit the rich get from the government is property rights protections. The people who live on Central Park West don’t have to worry about their own security because they trust that if someone murders them and takes away their money, NYPD will arrest the perpetrator and hand him over to the court system, which will throw him into jail for tens of years. This is the classical benefit of the capitalist state, but it’s also so uncontroversial that it’s impossible to raise a populist case against it.

The things Baker actually suggest range from moderately reasonable to insane. For example, on free trade he notes that free trade agreements remove protectionist laws that apply to the lower classes, like tariffs and quotas, but not ones that apply to professionals, like licensing requirements. He then suggests an international system of licensing doctors, which will make it easier for an Indian doctor to practice medicine in the US without having to do an internship all over again.

So far, so good. But then he suggests that schemes like this will make things significantly better by depressing physician salaries, increasing the level of competition, etc. Unfortunately, like so many other Americans, he fails to look at existing countries that allow skilled professionals in with ease, like Canada. While Canada is better than the US when it comes to not abusing immigrants, which is good in itself, it’s ridiculous to argue that its professionals are significantly less shielded than the USA’s (incidentally, even its physician salaries aren’t that much lower – the average in 1997-8 was $135,000).

The book is a good left libertarian critique of the idea that some governmental practices like incorporation are natural. But left libertarians are still somewhat libertarian in their concern for reality. The solutions in the book are only about reducing government, except when it’s too blatantly against left-wing orthodoxy, as on health care. And even then, Baker suggests letting every American register for Medicare, even though a serious health care reform will be more along the lines of the far more efficient VA system.

It’s legitimate to point out that current governmental practices privilege capital over labor and the rich over the poor. But all that pointing this out does is show that the right-wing conception of a free market is not normative. Serious economists don’t take the free market as normative; instead, they go out and produce evidence why it’s good, and why at the same time there need to be patent restrictions, licensing requirements, etc. There’s evidence that counters that, but Baker seems less interested in actually finding that evidence and more in trying to play a more-libertarian-than-thou game. In a political climate where the best thing the left has going for it is reality, that makes little sense not just logically but also rhetorically.

3 Responses to The Left Libertarian Nanny State

  1. whig says:

    The number one benefit the rich get from the government is property rights protections.

    Hence you might think carefully about why you might prefer to raise revenue from real estate than from those who are not so wealthy as to be required to earn a living which they cannot now even do, pay taxes and still afford health insurance.

  2. Alon Levy says:

    Honestly, I have no problem with taxing wealth, as long as there’s a suitably high threshold that will ensure that middle-class people can accumulate savings. In fact, such a tax can go hand in hand with a sales tax, because taken together they’ll be progressive, but they’ll still encourage the lower and middle classes to save more (the upper class already saves enough).

  3. whig says:

    A wealth tax would encourage people to conceal their assets, and would invite invasive enforcement.

    A sales tax is regressive, and even if laid on luxury items will hit the workers who manufacture them.

    A real estate tax, especially one on land valuation, is unconcealed, everyone who owns real property registers their deed with the state, and although transfers can take place under the table, rents cannot if landlords want them enforced at law, and assessments are public record.

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