What Happens to Power and Freedom When Deregulating Businesses?

Saturday, April 27, 2019

A common argument for capitalism and de-regulation is that it frees average people from soul-killing bureaucracy, oppression, tyranny and other evils. That raises the question: What happens to power when capitalism is freed and regulations are removed?

When government regulations are removed, most of the resulting new power flows from government to elsewhere. New power arises from freedom from regulations and burdens, including taxes. Power or freedom can flow to individuals or citizens generally, and/or various special interests including businesses and social and religious organizations such as political parties and specific religious denominations.

The business of business is business: Obviously, special interests will take as much of the new power as they can. For example, if environmental regulations are removed, businesses will pollute more and whatever costs are associated will be externalized to the local region, the entire nation or even the whole planet, depending on what pollutant(s) is involved. That will lower costs. Individuals and consumers may or may not see most of the cost savings. That will depend on market conditions.

In another example, deregulation of product safety standards for products will shift the burden of loss or injury from businesses to consumers. That will tend to favor businesses because going to court is expensive and often or usually not worth the time and expense. In that regard, most of the newly created power will flow from government to businesses. The lost regulations favored consumers. That protection is largely gone.

Similarly, deregulation of the payday loan industry, which the Trump administration recently accomplished, will make it easier for more consumers to go bankrupt. Apparently, most of the new power will flow to those businesses.

The business of government is protecting the public interest: On balance, deregulation will tend to free businesses and organizations to a significantly greater extent than individuals and consumers. In essence, power and freedom will flow to the private sector, whose focus is profit, not the public interest.

In theory, government is more accountable to individuals and consumers than private sector interests. At least politicians face elections. CEOs and investors in businesses do not face elections, and when business sectors are significantly deregulated, they do not face regulatory sanction when individuals and consumers are cheated or harmed.

THE QUESTIONS: 1. Is the net effect of deregulation usually more freedom enhancing for special interests or individuals-consumers?

2. Is the net effect of deregulation usually more freedom enhancing or freedom sapping for individuals-consumers?

B&B orig: 4/10/19

White Identity Politics

Friday, April 26, 2019


An interview by Vox reporter Sean Illig with political scientist Ashley Gardina discusses evidence that social unease, tinged with some racism, has fueled the rise of white identity politics among about 35% of white Americans. Vox writes:

When people talk about “identity politics,” it’s often assumed they’re referring to the politics of marginalized groups like African Americans, LGBTQ people, or any group that is organizing on the basis of a shared experience of injustice — and that’s a perfectly reasonable assumption.

Traditionally, identity has only really been a question for non-dominant groups in society. If you’re a member of the dominant group, your identity is taken for granted precisely because it’s not threatened. But the combination of demographic shifts and demagogic politicians has transformed the landscape of American politics. Now, white identity has been fully activated.

This is the argument Duke political scientist Ashley Jardina makes in her book White Identity Politics. Drawing on a decade of data from American National Election Studies surveys, Jardina claims that white Americans — roughly 30 to 40 percent of them — now identify with their whiteness in a politically meaningful way. Importantly, this racial solidarity doesn’t always overlap with racism, but it does mean that racial identity is becoming a more salient force in American politics.

Sean Illing: You open the book with a great quote from James Baldwin about how identity is “questioned only when it is menaced.” What’s the significance of this quote?

Ashley Jardina: It was so fitting when I was thinking about what gives rise to an identity like white identity, or really any dominant group identity. The important thing to note about dominant group identities is that we often think of them as invisible — and part of the reason is because dominant groups like whites in this society typically haven’t been forced to think about their identity.

Prior to a couple years ago, whites felt secure in the belief that they held a disproportionate share of economic and political and social resources, so their lives weren’t over-determined by their race. But now white identity has become salient as white Americans feel more and more threatened, and that fear has activated identity in a way we haven’t seen for some time.

Jardina argues that her research is showing that demographic change is fueling white social unease: “At this point today, it’s projected that whites will cease to be a majority by the middle of the century. This fact, which was brought into sharp relief by the election of Barack Obama, ignited a wave racial awareness among white Americans, and I think we’re still reckoning with the political consequences of this. . . . . In many ways, it’s about feeling that the privileges and status that whites have by way of their race are somehow being threatened or challenged.”

Is it social unease, economic complaints or both?: Shortly after President Trump won the electoral college in 2016, most commentators pointed to economic complaints grounded in decades of slow wage growth. After that, some research suggested that the most important factor was social unease in view of the impending white majority to minority majority demographic change. Currently, some evidence is accumulating that suggests the social unease may be easing, maybe significantly due to Trump's efforts at immigration control, and economic concerns are now coming to dominate.

At the moment, it is hard to tell whether social unease or economic complaints dominate with white identity voters. That uncertainty aside, demographic change-fueled white identity politics does seem to be a real phenomenon. If so, it is a lesson in how sensitive societies can be to demographic change.

B&B orig: 4/26/19

Capitalism Being Questioned

Thursday, April 25, 2019

An undercurrent of questioning of the benefits of capitalism is beginning to be noticed. Senate majority leader Mitch McConnell recently commented: “I never thought in my lifetime we’d be having a debate about the virtues of capitalism. For goodness sake, we are.” He indicated that the strategy for republicans to run in 2020 will be as a “firewall against socialism.”

The Washington Post writes: “For the first time in decades, capitalism’s future is a subject of debate among presidential hopefuls and a source of growing angst for America’s business elite. In places such as Silicon Valley, the slopes of Davos, Switzerland, and the halls of Harvard Business School, there is a sense that the kind of capitalism that once made America an economic envy is responsible for the growing inequality and anger that is tearing the country apart.

Americans still loved technology, [California democratic representative] Ro Khanna said, but too many of them felt locked out of the country’s economic future and were looking for someone to blame. ‘What happened to us?’ he imagined people in these left-behind places asking.

Part of Khanna’s solution was to sign on as co-chairman of the presidential campaign of Sen. Bernie Sanders (I-Vt.), the democratic socialist who rose to the national stage by railing against ‘the handful of billionaires’ who ‘control the economic and political life of this nation’, and who disproportionately live in Khanna’s district.

The other part of Khanna’s solution was to do what he was doing now, talking to billionaire tech executives like Larsen who worried that the current path for both capitalism and Silicon Valley was unsustainable.”

It may be the case that wealth inequality and limited growth in real wages for average workers (a point that is disputed) is beginning to lead some to question the merits of capitalism. The rise of democratic socialists in the democratic party is probably also helping to raise the issue in many people's minds.

The 2020 elections could hinge mostly on concerns related to capitalism vs socialism. If so, that would suggest that racial and social concerns over illegal immigration and demographic changes that dominated the 2016 election have been replaced by economic concerns as the top voter issue. If wealth distribution strongly skewed to the top is a factor, maybe the virtues of capitalism are being seriously questioned.

Intensifying Republican Attacks on Science

Thursday, April 25, 2019


A database, the Silencing Science Tracker, to follow political efforts to silence science is continually being updated. An article in Scientific American comments:

Journalists and whistle-blowers have exposed some alarming moves by federal and state governments to restrict science research, education or communication. But the Silencing Science Tracker, updated continuously online, shows just how pervasive the attempts have been since the 2016 U.S. national elections. Tactics run the gamut from censorship and funding cuts to destroying data, twisting studies and removing scientists from advisory boards (main graphic).

Some deeds have been “really outrageous,” says Romany Webb, a senior fellow at Columbia Law School, who runs the site. Actions by states have been rising recently (map), especially to manipulate education. “It's concerning to imagine a generation of schoolkids not learning basic principles such as climate change and evolution,” Webb says. But she thinks committee leaders now in the House of Representatives are ready to push back on federal abuses, which she finds “very encouraging.”

B&B orig: 4/23/19