Matt Yglesias: Closet Left-Libertarian?

Matthew Yglesias may be the most left-libertarian friendly liberal commentator out there. Not only is he unusually open to free market ideas, but he’s also repeatedly shown strong sympathies for open-source and post-scarcity approaches to economic organization. In fact, he’s practically built his brand around setting himself against the two defining features of American liberalism as it emerged in the 20th century: Managerialism and Hamiltonianism.

From its origins as the ideology of the managerial and professional classes in the Progressive Era to its heyday in the corporate-state gigantism of the mid-20th century, liberalism has always equated large, hierarchical institutions and the bureaucracies that run them with “progress.” Its response to the economic crises resulting from technologies of abundance — which reduce the amount of capital and labor required to produce a given level of output — has been Hamiltonian:  That is, to artificially inflate the demand for capital and labor through artificial scarcity, in order to keep their prices up.

Ygelesias has repeatedly fallen afoul of both these approaches. He has pointed out, more times than I have space to relate, the effects of licensing and zoning laws in creating barriers to self-employment and artificially raising the minimum cost of comfortable subsistence. And in a wonderful column three years ago (“Intellectual Property in the Anti-Trek Economy,” Think Progress, July 14, 2011), he pointed to the effect of so-called “intellectual property” in enclosing technologies of abundance as a source of rents for economically privileged classes rather than allowing their benefits to be socialized through free competition. Had strong patent law existed in the future of Star Trek, the result would have been an “Anti-Trek economy,” in which matter-energy replicators were a proprietary technology. Not only would replicators be DRM’ed so they couldn’t be freely reproduced (meaning people would have to buy them from the companies that held the patents), but the digital file for “tea, Earl Grey, hot” would also be someone’s “intellectual property” and you’d have to swipe your debit card every time you ordered it (that is, just incidentally, what the “progressive capitalism” model promoted by Bill Gates and Warren Buffett really amounts to).

Now Yglesias gores those same oxes again (“A Burrito Stomping on a Human Face — Forever,” Slate, February 28, 2014). He argues that peak labor hours, the mechanization of most high-paying manufacturing jobs and the predominance of low-paid service labor in the jobs that remain are virtually inevitable. But rather than repeating the standard conservative and liberal prescriptions of tax cuts for the rich, job retraining and higher minimum wages, he proposes instead the use of abundance as a weapon:

“… real wages and living standards have both a numerator and a denominator. The most sustainable way to tackle the problem of stagnating or falling working-class incomes is to work on the denominator — on the various regulatory privileges used by the wealthy and powerful to entrench their income and raise costs for everyone else.”

That means eliminating professional cartels like that of physicians (which would “raise real wages for everyone who needs medical care”) and radically scaling back or eliminating patents. It means eliminating “snob zoning laws” that prohibit trailers where land is cheap and high-density apartments and cohousing complexes where it’s expensive.

I’ve long argued that the only problem with labor-saving technology is that its full benefits aren’t internalized by workers and consumers through competition. If a self-employed farmer discovers a more efficient way of doing things that enables her to produce just as much corn while working half as many hours, she doesn’t worry that she won’t have enough work. This is because she receives the entire benefit of increased efficiency. While the amount of work she does is decreased, her consumption level remains exactly the same.

But at the level of society as a whole, the benefits of abundance are appropriated by rentier classes through artificial scarcities and artificial property rights like enclosure of vacant land, regulatory prohibition of cheaper and more efficient production techniques, and product prices that result mostly from embedded patent rents rather than actual labor and materials cost. Cheap, vernacular building techniques are criminalized by building codes, self-employment is criminalized by licensing and home-based production is criminalized by zoning.

The traditional liberal approach is to organize the economy as a Hamiltonian Rube Goldberg machine so as to provide sufficient profitable investment vehicles for Buffet’s capital and keep everyone working forty-hour weeks. Rather than allowing radical deflation of the cost of living, the idea is to keep costs artificially high so as to provide sufficient returns to fully employ labor and capital. Ours must be the opposite: To see that what is naturally free is actually free to the consumer, and whatever necessary labor hours remain are evenly distributed.