Wednesday, May 10, 2006

Baker on the Conservative Agenda

Economist Dean Baker has a new book called "The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer." The theme of the book is related to my previous post on Crony Capitalism. Baker thinks that American conservatives are not in favor of capitalism with free, competitive markets, as is often claimed, but instead want to use the power of the state to make the rich even richer. Baker does not use the term "crony capitalism" to describe the conservative economic agenda, but it is surely in the spirit of his argument.

Baker writes on his blog:
The book argues that conservatives (or at least those in power) support a wide range of government interventions that have the effect of distributing income upward. This list includes a trade and immigration policy that places less-skilled workers in direct competition with workers in developing countries, while protecting highly paid professionals from the same sort of competition. Another item on the list is Federal Reserve Board policies that deliberately weaken the bargaining power of less-skilled workers in order to keep inflation under control.
Skimming through the book shows that, to a degree, cronyism is in the eye of the beholder. For example, Baker takes aim at copyright and patent protection, expressing a view of intellectual property very different from mine. Here is the beginning of his Chapter 4:

Bill Gates – Welfare Mom: How Government Patent and Copyright Monopolies Enrich the Rich and Distort the Economy

In policy discussions, patents and copyrights are usually treated as part of the natural order, their enforcement is viewed as being as basic as the right to free speech or the free exercise of religion. In fact, there is nothing natural about patents and copyrights, they are relics of the Medieval guild system. They are state-granted monopolies, the exact opposite of a freely competitive market.

Because my textbooks are copyrighted, I suppose that I am a crony, using the power of the "conservative nanny state" to enrich myself as the expense of poor students around the world.

Although I disagree with Baker on a wide range of topics, I will give him credit for one thing: He is not a hypocrite. Baker is distributing his new book free over the internet.

As for me, if you want one of my books, you will have to fork over the cash.