DISQUS

Greg N. · 1 year ago

I wonder if there is an "invisible hand" equivalent for rent-seeking corporations. We like to point out that businessmen seeking their own advantage make others better off through markets. Is it possible that some businesses, seeking only their own gain at the federal trough, could (unintentionally) trigger the creation of regulations that might have beneficial effects (e.g., solving social issues saddled with public goods and free rider problems like global warming)? Is there some kind of spontaneous order that emerges from the competition of rent-seeking businessmen?

I think there might be something there. But then again it could just be the NyQuil and Sudafed talking.

John · 1 year ago

Oh, and why have all these big players lined up behind cap and trade and not a tax? Wouldn't the equivalence thesis predict indifference? I suspect that the answer is that their expected competitive advantage given a tax is lower than their expected advantage given cap and trade. In which case, that's a pretty significant real-world failure of equivalence, no?

That's exactly why they're doing it. And the specifics of the kinds of cap-and-trade policies that they're advocating for - auctioned credits vs. free ones, and so on - are entirely in alignment with their economic interests, too. Obviously corporate interests should get to speak their piece about how they want things to go, but you'd think that the results of their lobbying would be met with a bit more skepticism.

Pithlord · 1 year ago

This reminds me of some arguments I have had with economic determinists over the Iraq war. Yes, for any public policy, the genius of capitalism means someone is going to try to profit from it and, yes, those people will fund a push for the public policy. It does not follow that the original impetus for the policy is profit-seeking. And since this is just a universal fact about all policies whatsoever, it doesn't tell you much about whether the policy is wise or stupid, just or unjust.

Somebody is going to make money from lowered trade barriers, and that somebody will pay something for lobbyists. Someone would make money out of the end of the drug war, or school vouchers, or whatever. If they became serious subjects of possible political action, there would be rent-seeking. So what?