Matt Yglesias has been going the rounds with various other bloggers on left-neoliberalism. I think of my politics as “bottom-up” liberalism, or neoclassical liberalism, which I really don’t think are far off from “neoliberalism”. I just really hate the term neoliberal.
Anyways, Matt’s latest is a post I agree whole-heartedly with:
I see breaking up the barber cartel and increasing competition for barbering services as a progressive measure, because if you reduce the cost of things that poor people buy, you increase their real living standards. A contrary view espoused in comments is that since barbering is a working class occupation, we ought to favor cartelization as a means of increasing working class income.
This, for the record, is exactly what I had in mind when in an earlier post I said that policy ideas need to be “workable.” We need to ask ourselves if it’s actually true that barber licensing is an egalitarian measure. I’m almost certain that it’s not. Clearly, if we restrict entry into the barbering industry what we do is redistribute real income away from the customers of barber shops and to the incumbent barbers. In effect, you’re setting a kind of price floor. But the important thing to note about this is that haircuts are already sold at a wide range of price points. Rich people — the kind of people it would be progressive to stick it to — are not buying the cheapest available haircuts. Indeed, they’re not even close. And there’s little reason to think that the de facto price floor on haircuts is having any impact whatsoever on the price that they pay for haircuts. The people impacted by the haircut price floor are going to be the people shopping for the cheapest haircuts. That, by and large, is going to be relatively low-income people.
This, for the record, is exactly what I had in mind when in an earlier post I said that policy ideas need to be “workable.” We need to ask ourselves if it’s actually true that barber licensing is an egalitarian measure. I’m almost certain that it’s not. Clearly, if we restrict entry into the barbering industry what we do is redistribute real income away from the customers of barber shops and to the incumbent barbers. In effect, you’re setting a kind of price floor. But the important thing to note about this is that haircuts are already sold at a wide range of price points. Rich people — the kind of people it would be progressive to stick it to — are not buying the cheapest available haircuts. Indeed, they’re not even close. And there’s little reason to think that the de facto price floor on haircuts is having any impact whatsoever on the price that they pay for haircuts. The people impacted by the haircut price floor are going to be the people shopping for the cheapest haircuts. That, by and large, is going to be relatively low-income people.
But to perhaps gesture at a “theory of politics” issue, I think part of what bugs people about the barber issue is that they’ve developed the implicit view that for progressive politics to succeed we need to raise the social status of “big government,” and that it’s counterproductive to this mission to highlight any misguided “big government” initiatives. It’s acceptable to criticize excessive spending on the military and on prisons, because the conservative critique of “big government” often exempts those institutions. But if conservatives attack “regulation,” then “regulation” must be defended or, when indefensible, ignored. My view is that this is backwards, and that the public is skeptical about supporting “big government” precisely because they doubt that its advocates are invested in ensuring that higher taxes will lead to quality services. Progressive insouciance about the question of whether or not regulations are, in fact, serving the public interest feeds cynicism about the role of the state.
This, in turn, cedes all ground on properly limiting government to conservatives and libertarians and leaves little breathing room on the left for discussion of deregulation even when that deregulation is, as Matt notes, progressive in nature. Which is odd considering the real federal-level push for deregulation happened under Jimmy Carter with the help of Ted Kennedy.
Note: I meant to blockquote that last paragraph (just added it now). I was responding to that last graph with my only little bit there at the end…
I think the problem here is basically trust. I trust Jimmy Carter and Ted Kennedy to make regulatory changes that resulted in a better economic market. Not that Democrats can’t make mistakes when it comes to deregulation (Hello Bill Clinton!) obviously.
But, when I hear a developer or a conservative politician talking about deregulation being good for small business because of x and y, my BS meter immediately goes off because I know the real reason for this deregulation is reason z.
Now, I have my own problems with Yglesias blind spots in policy because I’ve been reading him for years, but that’s beside the point. For instance, I don’t think he has even thought of the idea that barber’s licenses could be a thing of the past _and_ barbers could organize to drive up their wages.
Are you actually advocating in favor of collusion among providers?
I meant organizing in the same sense that your local Chamber of Commerce organizes or the National Car Dealers Association does. If all the barbers in DC want to create a DC Barbers Organization that work together on supplies of products they need and other such things, I don’t see a problem as long as they don’t try to reinstall licensing requirements.
Which kind of gets to the guts of it. When my side does it, it’s okay, because my side is trustworthy (as often as not). But if they try to do the same thing, it is better off opposed because they are bad people and/or people that want to do bad things.
Mitt Romney was looking for a way to apply market forces to health care in Massachusetts. But the PPACA was part of Obama’s mission to turn us into a socialist state. It’s quite helpful to know what they’re really thinking.
Culture11 had a great article on some state’s proposed regs – New Jersey, I think – which essentially said “If you want to cut hair, you have to take classes and learn about chemical dyes.” Which made me think of my grandfather, an old-school barber who just wanted to cut hair.
All that being said, for reasons involving sanitation (and chemicals, for those that want to use them) and the like, I’m not opposed to licensure and a degree of regulation over haircutting. Something to take away from those that operate recklessly. But too often they’re used as barriers to entry, which is much more problematic.
Thanks for pointing this post out. It’s the best I’ve read from him yet in defense of his somewhat infamous barber licensing standpoint (what a world, where this sentence is utterly serious…).
I found his answer compelling; I was heretofore on the fence with this one; I’m not now.
But I’m *lit’rally* confused by your closing graph. I don’t mean this in a “confused, i.e., I think you’re wrong” way — I actually don’t get what:
“This, in turn, cedes all ground on properly limiting government to conservatives and libertarians and leaves little breathing room on the left for discussion of deregulation even when that deregulation is, as Matt notes, progressive in nature.”
Is the “this” the kind of knee-jerk defense of regulation for its own sake that he gets into later on in the post?
Uhm, yeah, I accidentally chopped off the last graph when I was quoting Matt. So…I added it and now it makes sense! (I hope)
Yep! Good addition to his argument. Now I’d like to see him (or you!) mount a similar defense of taking on, in a limited sense, teachers’ unions. I think with barbershops, he establishes rather clearly how the cost/benefit ratio is decidedly skewed in favor of deregulation, even granting the symbolic or “political” consequences. But when it comes to a constituency as big, powerful and important within the Democratic Party as is teachers’ unions, I’d need more persuading.
Teachers unions are tricky. They’re big, powerful and definitely can work their voodoo for evil, but they’re also sort of tricky to imagine living without. I’m not sure how well civil service laws would protect teachers from parental/political backlash or whether the political will to actually pay teachers well in lieu of backended benefits would be there once the unions were gone. So it’s easy for me to be philosophically opposed to the unions, but harder on a pragmatic level to imagine them gone and what sort of fallout/unintended consequences we’d see.
Hence we should tinker and experiment with things like charters, intra-district choice, etc.