Tuesday, January 02, 2007

A Plan for Victory, Part IIb(ii)

Besides helping the Bad Guys run out of money, we should help the Good Guys get more. That's easy, in a sense: as Greg Mankiw recently put it in his Resolutions for Another New Year:

Adam Smith was right when he said, "Little else is required to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice."
Well, we can't actually provide those to our friends in the Gap, though the SysAdmin should push them wherever possible, but there's something missing on Smith's list, which Mankiw notes: free trade. We can provide that.

If we stopped "protecting" each other from competition whether by tariffs on that competition or by direct subsidies to agriculture etc, we'd do significantly better overall; our friends in Gap countries would do immensely better.

We should do both of those: unilaterally drop all protection of both kinds. Unfortunately, this is not going to happen. Part of the resistance is simply irrational, I think, and there are several bases for that irrationality which I might or might not try to address later. Part of it is rational: a realization that in a fully competitive world, risks would be larger for individuals as well as for corporations. That's real. What to do? Well, I would improve our safety net with a Friedmanesque negative income tax, part of which would take the form of vouchers for basic health insurance. Very basic, but still useful. (See? I'm leftishly libertarianish. Sort of. Maybe.)


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