Far be it from me to question the superior economic skills of Kenneth Rogoff, a Harvard economist and public policy expert. But it bothers me to read articles that build up to a point and then drop it in favor of what appears to be a partisan argument. Rogoff was onto something in his article on Project Syndicate, entitled “Malthus, Marx, and Modern Growth.” He points out that externalities (such as environmental degradation) are very damaging and that governments have a role to play in mitigating them. I do not disagree with that, externality mitigation is a fundamental role of government. But he moves onto topics such as funding old age and regulating technology. There may be some consumer protection issues when it comes to technology and regulation, but every argument he makes leads me to think that the government should leave these fields alone. After all, if it already made a mess of them, why let government continue? Regulating technology? What kinds? Why? The most dangerous technology in use is employed by the government. The government has offices full of troglodytes spying on us; we walk through x-rays every time we get on an airplane. Government run technologies are the only ones of which I can think that are compulsory; otherwise, I can choose to not participate in the technology market in question. What about unhealthy eating habits? Maybe if people were responsible for their own internalities (like getting fat from soda) then they would have an incentive to consume less shit. But because there are no consequences, such as paying for your own health care, they have no incentive. To me, its an argument for the government to get out of peoples lives and stop regulating and stop mitigating the consequences of peoples’ poor decision making. Provide people information letting them know its unhealthy, and then let them make their own choices. If you get fat, suffer declines in productivity, and eventually die from metabolic disease, you have no one to blame but yourself. As it stands now, people find ways to blame the government, the corporations, or the ever ubiquitous “racism,” but never find it in themselves to take some responsibility. I eat healthy because I want to enjoy my life. I pay for my own insurance, so if I got fat, it would be my economic and social loss. What happened to a culture of personal responsibility? But this quote is the kicker for me:
All of these problems have solutions, at least in the short to medium run. A global carbon tax would mitigate climate risks while alleviating government debt burdens. Addressing inequality requires greater redistribution through national tax systems, together with enhanced programs for adult education, presumably making heavy use of new technologies. The negative effects of falling population growth can be mitigated by easing restrictions on international migration, and by encouraging more women and retirees to enter or stay in the workforce. But how long it will take for governments to act is a wide-open question.
Capitalist economies have been spectacularly efficient at enabling growing consumption of private goods, at least over the long run. When it comes to public goods – such as education, the environment, health care, and equal opportunity – the record is not quite as impressive, and the political obstacles to improvement have seemed to grow as capitalist economies have matured.
(Okay, there are many things wrong with the ideas in the first paragraph. I could write entire papers on some of those contradictions, but I will ignore them in favor of my original point). In the first paragraph, he explains the problems and how government can overcome them. Followed immediately in the next paragraph by him pointing out how bad government is at providing services and how great the private sector can be. So a better question might be: how can incentives be put in place to encourage private actors to do what’s best for society? How is it that the extreme leftist ideologues can’t fathom that government might actually be the problem, not the solution? If government is slow and stupid, then maybe more of it is not the answer.
On a side note, it bothers me to see economists, even highly regarded ones, fall for this ideological trap. It is what turned former economist Paul Krugman into a joke among real economist and what keeps the economics profession from being taken seriously.