When it comes to economic policy, the popular understanding is that libertarians and conservatives are more or less fellow travelers. When it comes to social policy, libertarians tend to go along with liberal progressives. But what if there were some economic issues upon which libertarians and left-liberals agreed?
In this interview with the talented leftish economist Dean Baker, we probe some of these areas. While Baker and I don’t agree on everything, there are a lot of interesting overlaps—certainly places worthy of exploration.
Broadly, we should agree with Dean Baker that any policy that has the effect of transferring wealth from poor to rich is not good policy.
While not all libertarians agree about intellectual property rights, I’m increasingly of the mind that certain kinds of patents are an illiberal form of rent seeking. So on this point, I mostly agree with Baker.
But let me be clear: While we might agree with Baker on deep problems associated with a drug patent regime—e.g. that it inflates the price and thus the availability of medicine—there could be some problems with simply dismantling the patent system without looking at other areas.
Drug companies like patent monopolies for more than just the rents they hope to extract. Some argue, quite plausibly, that patents help these companies recoup the costs associated with a lengthy and onerous FDA regulatory process, as well costs associated with research and development that competitors are ready to benefit from without sharing the costs of investment.
That said, most libertarians are coming around to the view that the social costs of a drug patent regime—especially to the poor—are simply too high. Could libertarians and left-liberals find compromise in the idea of reducing both the regulatory burden and the patent window for medicines?
It’s true that few people of any political stripe are wild about the too-big-to-fail banks. These banks have long rendezvoused in K-street brothels with Washington's political elites. And they seem to be unstoppable. Baker thinks the banks are not only encouraged to take on inordinate risks (moral hazard), but that this encouragement is due to market-distorting subsidies. (Ironically, these big banks have received permanent regulatory protection and bailout guarantees under Dodd-Frank.)
The Federal Reserve
We will probably part ways with Baker when it comes to his views of Fed policy, except to agree on the vaguer point that Fed policy often harms the poor. Baker’s concern seems to be with whether monetary policy works to stimulate job growth as opposed to controlling inflation. This is far too big a topic to settle here. Let’s just say two out of three points of agreement ain’t bad for one five-minute video.
In any case, it is most refreshing to find areas of overlap with progressive economists. If we are going to make meaningful social change that benefits all people in society, we are going to have to seek out these areas of overlap and work from there. It’s not just about being right, after all. It’s about forming meaningful coalitions and exploiting realistic opportunities wherever they arise.