Arnold Kling  

Proposals for Liberalization

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In the course of putting together a critique of a critique of the 2005 Economic Report of the President, Daniel B. Klein and Michael J. Clark surveyed 11 economists at George Mason University and came up with a top ten list of economic liberalization policies.

Diminish trade restrictions (tariffs and quotas).
Phase down all agricultural subsidies and liberalize agricultural regulations.
Reduce FDA regulations on pharmaceuticals, devices, and information.
Lighten the Federal Trade Commission and Department of Justice's anti-trust enforcement and restrictions.
Reduce regulations on healthcare facilities and professionals.
Repeal legal restrictions on competitive delivery of mail.
Decrease the size of the Drug Enforcement Administration in conjunction with liberalizing the drug laws.
Repeal the expansion of money laundering laws held within the Patriot Act and the Bank Secrecy act of 1970 that require some businesses to keep tabs on customers and report activity to the federal government.
Revisit Sarbanes-Oxley regulations.
Liberalize the control or enforcement of equal opportunity/anti-discrimination in employment.

Then came a list of privatizations (schools do not appear on the list because they are primarily controlled locally, not federally).

Disaster insurance (make private and eliminate any subsidy)
U.S. Postal Service (along with liberalization of entry)
Social Security accounts (even if only a small percentage of pay-ins)
Space exploration (NASA)
Power and electric infrastructure
All job training and workforce assistance programs
Disaster response agencies
Water infrastructure (excluding natural channels and rivers)
Federal loan programs

My own top priority is to phase out Medicare.

Thanks to Greg Mankiw for the pointer. Mankiw also points to an article by Robert J. Samuelson on Medicare. Samuelson shares my concern with the problem, but fails to provide a solution. He really needs to read Crisis of Abundance.

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The author at Economic Investigations in a related article titled GMU, the New Chicago? writes:
    Is George Mason the new Chicago School? See for yourself: Proposals for Liberalization. I’m going to answer with a definite “Maybe.” As for the text itself, it shows how far ahead is the US, even taking into account these issues.... [Tracked on September 13, 2006 7:26 AM]
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Scott W writes:

This list looks a lot like Milton Friedman's in "Capitalism and Freedom."

Justin writes:

This is why I love Mason.

Hi, Scott W. You said:

This list looks a lot like Milton Friedman's in "Capitalism and Freedom."

I'm looking at Friedman's Capitalism and Freedom but not finding the list you refer to.

Do you have a page number or other reference?

RogerM writes:

I would vote for eliminating the Departments of Energy, Education and HUD and the Small Business Administrion.

Russ Roberts relayed that the page Scott W. may be referring to is at the end of Chapter II. of Capitalism and Freedom, 1962, U. of Chicago Press, pp. 34-36. It reads as follows:

Yet it is also true that a government would have clearly limited functions and would refrain from a host of activities that are now undertaken by federal and state governments in the United States and their counterparts in other Western countries. Succeeding chapters will deal in some detail... but it may help to give a sense of proportion about the role that a liberal would assign government, simply to list, in closing this chapter, some activities currently undertaken by governments in the U.S., that cannot, so far as I can see, validly be justified in terms of the principles outlined above:

  • 1. Parity price support programs for agriculture.

  • 2. Tariffs on imports or restrictions on exports, such as current oil export quotas, sugar quotas, etc.

  • 3. Governmental control of output, such as through the farm program, or through prorationing of oil as is done by the Texas Railroad Commission.

  • 4. Rent control, such as is still practiced in New York, or more general price and wage controls as were imposed during and just after World War II.

  • 5. Legal minimum wages, or legal maximum prices....

  • 6. Detailed regulation of industry...

  • 7. A similar example, but one which deserves special mention because of its implicit censorship and violation of free speech, is the control of radio and television by the Federal Communications Commission.

  • 8. Present social security programs...

  • 9. Licensure provisions in various cities and states....

  • 10. So-called "public housing" ....

  • 11. Conscription ....

  • 12. National Parks ....

  • 13. The legal prohibition of carrying mail for profit.

  • 14. Publicly owned and operated toll roads....

  • This list is far from comprehensive.

    I think Friedman's list and ideas were a tremendous influence on current thought, but the route of that influence may have been via face-to-face communication and word of mouth rather than that exact published list.

    Cliff writes:

    Interesting that neither property rights nor freedom of commercial speech are mentioned.

    Dezakin writes:

    It would be most useful to discover why things like the softwood lumber dispute exist before we tackle larger problems such as agricultural subsidies and then medicare.

    The canadian/american softwood lumber dispute rewards a tiny lobby with punishing tariffs on canadian lumber, raising the operating costs of housing and other fields that rely on inexpensive lumber. Its fairly obvious to see how the politics of social security are self-perpetuating on ignorance and fear, but I can't see at all how the softwood lumber dispute has gone on with the electorate being apathetic about it and much larger lobbies (construction and housing) bearing significant costs.

    Kent Gatewood writes:

    Given the size of the trade deficit, it is hard to believe there are significant tariffs and quotas left. Any data would be appreciated.

    On agriculture would country of origin labels be feasible? I'm not sure I want to buy food from Iran or North Korea.

    Limiting the discussion to federal spending is annoying. My wife is a professor at a private university, and I might be able to consume at a higher level if she weren't competing against subsidized state universities

    Mr. Econotarian writes:

    It would be nice if someone would link a list like this with relevant supporting research references!

    liberty writes:

    Why is Medicare/Medicaid not in the privatization list? I would also like to see welfare in there, though I appreciate the "all job training and workforce assistance programs" bit.

    These should be permanent lists that we refer to every year before compiling the budget, each time moving closer to completely privatizing and liberalizing these areas before allocating any taxpayer money to any area.

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