Wednesday, February 8, 2012

I admit I have enjoyed reading Robert H. Frank's books The Economic Naturalist and The Economic Naturalist's Field Guide. I respect economists who attempt to communicate economics to the layperson in everyday English (if only more professors would do that instead of focusing on math and "scientific" economics). Anyway, back to the point. I am not shocked obviously by Frank's lack of embracing the Libertarian/free-market ideology completely and I agree with a few of his points. However, I have a few comments that, while perhaps minor, I would like to make. I also recommend that you all go to this link:

In chapter one (Paralysis), I noticed Frank sometimes criticizes Libertarian ideology but he would not give substantive arguments. For example, it is debatable that workers are worse off today than in the past (see link above). He mentions that infracture "has been steadily falling into disrepair" and that "Water supply and sewage systems fail regularly." John Stossel had  wonderful examples of privatization in his special Stossel Goes to Washington. Perhaps infrastructure and water delivery is failing because of who is in charge--the government. What if private entities were in control (examples in the Stossel special dealt with water supply in Jersey City, air traffic control in Canada, and a private stretch of highway in California) instead of the government?

He goes on to write that "our political system is paralyzed." Many people measure Congressional productivity by the amount of legislation that is passed. I think maybe it's not so bad when Congress is in a gridlock! Moreover, Frank supports government "stimulus" when the economy is in a recessionary gap. But let us not forget that the money government uses to "heat things up" could be used in other ways or could be kept by the taxpayers and used in more productive ways.

Finally, on page 5, I come to agree with Frank. He believes that the government should provide defense and enforce property rights. Even though some Libertarians believe in the private provision of national defense, I believe it is a legitimate function of a limited government to provide a military and for the government to act as a referee in enforcing property rights. Where government goes wrong is when the "referee" gets involved in the game directly. For example, wouldn't it be a bit weird to hear, "Wow, did you see the referee knock Brady to the turf and then intercept his pass on the next play?" Referees are not supposed to hit the QB or intercept the ball!

On page 8, Frank refers to Thomas Schelling and his ice hockey example. He eventually asks, "What about the libertarian's complaint that helmet rules deprive individuals of the right to choose?" and on page 12, using the sprinter example, he writes, "Yet many self-described libertarians insist that it should be a sprinter's right to take performance enhancing drugs if he choose." This might be another minor point but I will make it anyway. I will not claim to speak for all Libertarians, but I have no problem with a private entity making up their own rules (i.e., the NHL or Olympic committee). If the rule is to wear a helmet and a player doesn't want to, they don't have to play. It's not a right to play in the NHL or run in the Olympics. However, when the government says people have to do something then that is coercion.

Toward the end, I again side with Frank's opposition to wasteful government spending and subsidies to oil and ethanol industries. However, it is clear from this chapter that Frank believes government has a larger role to play in the economy. Let's see what chapter two brings.

1 comment:

  1. It seems to be a common assumption that the government is responsible for infrastructure development and maintenance in the United States. This is noticeable every time the US infrastructure receives a low grade from the American Society of Civil Engineers and pundits call for action to shore up the nation's failing bridges, dams and roads. There are endless arguments about what is the minimum acceptable level for this public infrastructure. It seems like the wrong question to me, because it can only be answered: "acceptable according to whom?".

    All property has to be controlled by someone and when there are unclear rights about who the proper decision maker is the arguments are bitter and endless. Perhaps it's time to start looking at public infrastructure and seeing if privatizing it would solve these problems?