What
Should Liberals Liberalize?
by
Daniel B. Klein
Do
"liberals" generally favor
liberalization? Do they favor greater
freedom to choose? Liberalization is the
loosening of restrictions on individual
liberty.
Or do
"liberals" generally oppose
liberalization?
The
Democrats have done well at all levels
nationwide. Are the Democrats liberals?
Do they favor liberalization?
If the
Democrats are liberals and care about
the poor, here are some things they
should move to liberalize —
School
choice.
Giving parents the purchasing power to
choose schools for their children
improves education. Sweden has vouchers
and it works well. Evidence increasingly
shows that choice works and top-down
government control doesn't.
Immigration.
Let more in, including the low-skilled.
Most Mexicans who come are much poorer
than poor Americans, and they send part
of their earnings to family members
abroad. Their experience in the United
States imparts liberal norms and they
spread those norms abroad. Why should
concern for the poor end at the border?
International
trade. When two people engage
in voluntary exchange, they both expect
to gain, even when they live in
different countries. When Americans
trade with Brazilians or Indians, there
are mutual gains. The trading partner
abroad is often poorer than the
American. As Paul Krugman and many
before him have explained, free trade
allows firms anywhere in the world to
take advantage of scale economies,
producing more for humanity while
consuming fewer resources. Everyone
wins. Economists overwhelmingly support
freer trade.
Agricultural
subsidies and protectionism.
Prices of certain agricultural products
are propped up by an array of
governmental restrictions and cartel
measures. Everyone pays the price at the
grocery store, and the impact is
regressive. Most economists support
liberalization and the reduction of farm
subsidies.
Drug
prohibition. Most of the
hundreds of thousands caged in prison
cells on drug violations are poor. The
illegal drug trade especially ravages
poor neighborhoods. Those who suffer
from impure, ill-labeled black-market
drugs are poor. Most of those injured in
black-market violence are poor. Most
economists who publish judgments on the
issue favor liberalization.
Occupational
licensing. Licensing
requirements restrict the supply and
variety of services and raise prices.
They also prevent poorer people from
entering trades. Economists who write on
the subject say that voluntary
certifications, reputation, and other
assurances work well, and they favor
liberalization. Morris Kleiner of the
University of Minnesota and Alan Krueger
of Princeton University find that
occupational licensing affects upwards
of 25 percent of the workforce. Both
have published judgments favoring
liberalization.
The
minimum wage. Unskilled workers
have to compete against higher-skilled
workers, machines, and anything else
employers might do with their money. The
minimum wage law strips unskilled
workers of their primary means of
competing: Lowering their price. Even
when the minimum wage does not put them
out of work, it affects the non-wage job
attributes. It stands to reason that
unskilled workers who get jobs at the
minimum wage tend to face higher work
demands, less flexibility, less
on-the-job training, less non-wage
benefits, and less recognition and
consideration. In a depressed economy it
is important that labor markets remain
fluid and flexible.
The
Food and Drug Administration control of
pharmaceuticals. All drugs and
devices are banned until individually
permitted by the FDA. The costs, delays,
and uncertainties suppress the
development of drugs that would have
saved lives. Economists who publish
judgments on the matter resoundingly
support liberalization.
Urban
transit. State and local laws
prevent market forms of transit —
shuttles, jitneys, mini-buses,
share-ride taxis, and smart carpools.
Free-market forces have been largely
forsaken to protect and serve
governmentally run or planned systems
that ill-serve the goals of mobility and
efficiency. Economists who write on rail
transit largely agree that most rail
transit projects are ill conceived.
Rent
control. Roughly 200 localities
still have rent control. Economists who
publish on the matter largely agree that
it reduces the supply and the quality of
rental-housing and generates conflicts.
It increases prices of housing outside
the rent-controlled sector. Very likely
in the long-run it increases rents even
in the controlled sector.
Do we
think the Democrats will move to
liberalize any of these?
What will
they liberalize?
Why again
do we call them "liberals"?
Daniel
Klein is an Adjunct Scholar for the
Cato Institute, professor of economics
at George Mason University, and editor
of Econ Journal Watch.
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