Monday, May 7, 2012

Unlearning Economics - Libertarians and Homogeneous Government

Ultimately, the ‘state’ doesn’t actually exist – it’s a web of different classes and individuals using the tool of legislation to advance their own interests, either through representatives or more directly through lobbying and political movements. Libertarians appear to think that cutting back any of this spending has an impact on all of it, but what we actually need to do is ensure that the interests of relatively few people do not have a disproportionate impact on the state’s activities – unfortunately, this is not currently the case.
Read it at Unlearning Economics
Libertarians and Homogeneous Government

This highlights what I believe to be a crucial, unrecognized feature of the deregulation era. Removing regulations regardless of purpose and interaction with other regulations will not necessarily bring the economy closer to equilibrium (if one exists). One might be able to argue that a disproportionate number of regulations were maintained that support “the interests of relatively few people.” If that is true, it could partially explain why deregulation has led to more severe inequality and higher unemployment.

Note: Although often described as an era of deregulation, the past 30 years have actually seen an enormous increase in the number of federal regulations, even in the financial sector.

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