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发帖数: 29846 | 1 June 23, 2012 by Charlie Quidnunc
People sometimes say that the Republicans are the pro-business party, and
the Democrats are the pro-consumer party. I would prefer to think of it,
perhaps naively, that the Republicans are pro-market, and the other guys are
pro-regulation. When given the chance many business people will do whatever
it takes to make money, skirting as close to the law as possible, seeking
favors from powerful politicians to defeat their competitors, and generally
trying to maximize their personal wealth at the expense of their customers.
That’s human nature, and conservatives recognize that. We trust the market
to help the better products thrive and punish the losers. As Arnold Kling
and Nick Schultz say in the introduction to “From Poverty to Prosperity“:
Traditionally, the debate over markets has been between the “Chicago
school” and the “Harvard-MIT school.” The Chicago school says, “Markets
usually work. That is why we need markets.” The Harvard-MIT school says, “
Markets often fail, that is why we need government.”
Economics 2.0 says, “Markets often fail. That is why we need markets.”
I love that formulation. Instead of reflexively saying that since people are
flawed we need other people, who presumably have no flaws, to watch them,
Kling and Schultz argue that markets will take care of the problem better
than government regulation.
Here’s Deirdre McCloskey describing the distinction between High Liberalism
, as she calls it, and free market capitalism:
The story is, in a few brief mottos to stand for a rich intellectual
tradition since the 1880s: Modern life is complicated, and so we need
government to regulate. Government can do so well, and will not be regularly
corrupted. Since markets fail very frequently the government should step in
to fix them. Without a big government we cannot do certain noble things (
Hoover Dam, the Interstates, NASA). Antitrust works. Businesses will exploit
workers if government regulation and union contracts do not intervene.
Unions got us the 40-hour week. Poor people are better off chiefly because
of big government and unions. The USA was never laissez faire. Internal
improvements were a good idea, and governmental from the start. Profit is
not a good guide. Consumers are usually misled. Advertising is bad.
Thus Anderson: ”Externalities, asymmetrical information, and other
collective action problems are . . . pervasive in economic life. Countless
ways of conducting business reap gains for some while imposing unjust costs
on others. Create a cartel. Stuff rat feces in sausages.” Thus Freeman: “
It is a truism to say that in order to achieve the benefits of an efficient
market economy (increasing productivity, greater economic output, increasing
productive capital, etc.), the basic rules of property, contract, and
exchange must be structured [by government] to realize efficient market
relations.”
Dr. McCloskey answers such nonsense:
No. The master narrative of High Liberalism is mistaken factually.
Externalities do not imply that a government can do better. Publicity does
better than inspectors in restraining the alleged desire of businesspeople
to poison their customers. Efficiency is not the chief merit of a market
economy: innovation is. Rules arose in merchant courts and Quaker fixed
prices long before governments started enforcing them.
I know such replies will be met with indignation. But think it possible
you may be mistaken, and that merely because an historical or economic
premise is embedded in front page stories in the New York Times does not
make them sound as social science. It seems to me that a political
philosophy based on fairy tales about what happened in history or what
humans are like is going to be less than useless. It is going to be
mischievous.
As I read that, I felt my pro-market, pro-competition, pro-wealth heart soar
. And then I read this in Rolling Stone. You might have missed it:
The defendants in the case – Dominick Carollo, Steven Goldberg and
Peter Grimm – worked for GE Capital, the finance arm of General Electric.
Along with virtually every major bank and finance company on Wall Street –
not just GE, but J.P. Morgan Chase, Bank of America, UBS, Lehman Brothers,
Bear Stearns, Wachovia and more – these three Wall Street wiseguys spent
the past decade taking part in a breathtakingly broad scheme to skim
billions of dollars from the coffers of cities and small towns across
America. The banks achieved this gigantic rip-off by secretly colluding to
rig the public bids on municipal bonds, a business worth $3.7 trillion. By
conspiring to lower the interest rates that towns earn on these investments,
the banks systematically stole from schools, hospitals, libraries and
nursing homes – from “virtually every state, district and territory in the
United States,” according to one settlement. And they did it so cleverly
that the victims never even knew they were being cheated. No thumbs
were broken, and nobody ended up in a landfill in New Jersey, but money
disappeared, lots and lots of it, and its manner of disappearance had a
familiar name: organized crime.
A slightly less literary description in the Wall Street Journal:
A federal jury convicted three former employees of a General Electric Co
. GE +1.43% unit for their role in an alleged bid-rigging conspiracy the
government said deprived municipalities of competitive investment returns.
Dominick P. Carollo, Steven E. Goldberg and Peter S. Grimm were each
found guilty of various counts to commit wire fraud and to defraud the
United States, the Justice Department said Friday.
They face up to five years in prison and a $250,000 fine for each count,
though the maximum penalties can be raised to twice the gain or loss
stemming from each crime.
Prosecutors had accused the three former employees of GE Funding Capital
Market Services Inc. with helping manipulate the bidding process used by
cities and states to invest the proceeds of municipal bond offerings.
I have to ask: What market could possibly have ended the scheme? We clearly
need the rule of law on top of markets. But knowing where to draw the line
between regulation and law is sometimes challenging. |
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