Vulgar Libertarians Of The World Unite!

More "batshit insanity" and "wackjob blathering about how the 'entrenched political class' screws over the helpless little guy" from Donald Boudreaux, chairman of the economics department at George Mason University:

More likely, though, this call for industrial policy is a ploy by business executives to escape competition. By trying to plan the economic future, any such policy necessarily tramples innovation and consumer sovereignty. Anything at odds with the policy - such as an unforeseen new product, a creative new technique of production, or simply a change in consumers' tastes - must be squelched, for otherwise the policy falls apart. Many existing firms (especially large ones such as GM and Dow Chemical, who have the resources to influence government) will benefit from industrial policy - but only because such policy inverts the economy from one in which producers exist to satisfy consumers to one in which consumers (and taxpayers) exist to satisfy producers.

Positively leftist! Someone should tell Donald Boudreaux that if he is worried about GM and Dow Chemical taking over "industrial policy", for as low as $8 a trade, all he has to do is buy stock in GM and Dow Chemical. Then, vicariously, Boudreax would be in charge of industrial policy too.

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Better a bailout than a policy

I thought the bailout was terrible, but the spectre of industrial policy suddenly makes the bailout seem not so bad in comparison. The bailout is going to be a massive act of theft, rewarding the incompetent at the expense of the competent, and it will of course encourage incompetence and discourage competence. But that (with luck) will be the extent of it. At the end of it all, we will be free. Not so with an industrial policy, which will leave us harnessed to the state.

Your ignorance of the Law of Bitur-Camember

Sorry, Micha, but the influence of GM and Dow Chemical is already taken into account in the pricing of their assets. Unless you know that they do have some hidden influence unknown to the rest of the market, you cannot make a profit by buying their shares.

Similarly, the equilibrium price of any political benefit is equal to the expected value of the benefit, to be paid in lobbying, waiting in line, conforming to bureaucratic requirements, moving to the correct municipality and paying the rent premium, etc.

Of course, we're not at equilibrium and there are plenty of opportunities out there (an opportunity being by definition a discrepancy between reality and the imagined equilibrium). But the common knowledge that big companies influence government is no such opportunity -- precisely because it's common knowledge.

Completely right

I offered the same answer to Johnathan about betting. You can only make money to the extent that superior libertarian insight make you see that these companies will reap superior profits while others don't see it. Unlikely.

To be fair

Micha is satirizing Jonathan's argument, not espousing it himself.

I stand by

The "batshit insane" comment was about not buying the idea that corporations are the state. They're not. That idea is batshit insane. If that makes me a vulgar libertarian, so be it. I'm vulgar.

The rest of your response to my post is potentially worth debating, but

1) I think your interpretation is uncharitable (and that's probably my fault) especially if you believe I implied that the shareholder would be in charge of industrial policy.
2) Your argument is too emotional and I won't get into a pissing match.

This is my last word.

What's insane?

There is nothing either insane or leftist about recognizing that corporations can recruit government power to serve their special interest.

And if you start instituting a general "industrial policy", that power is likely to become greater and be the source more economic damage and restriction on liberty.

Not what I'm responding too

There is nothing either insane or leftist about recognizing that corporations can recruit government power to serve their special interest.

Absolutely agree. I've made that same argument many times on this blog. Standard public choice stuff. But the left-libertarian argument I've seen goes way way beyond that.

Even though I said it would be my last word above, I made an exception since I've been asking you (Tim) to blog/comment here for a long time and am glad you showed up.

Now this time, I really mean it, this is my last word.

Standard public choice

Standard public choice stuff. But the left-libertarian argument I've seen goes way way beyond that.

No, it really doesn't go way beyond that, and I think this is where our disagreement lies. Perhaps you can find a few self-described left-libertarians who say things like "corporations are the state", but they are mistaken, and they do not represent the more reasoned left-libertarians who say things like "corporations quite often recruit government power to serve their special interests." Those who characterize all left-libertarians as holding the view that "corporations can do no right" are just as wrong as those who characterize all right-libertarians as holding the view that "corporations can do no wrong."