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@pmaher_art

The basic argument is very compelling. There’s a market failure that should be addressed by a fee, and that fee should be distributed to everyone. But then I got to thinking how applying the same logic to other areas of the economy would result in similar conservative support for much of the liberal agenda. Here are a few examples:

CEO Pay – There is a market inefficiency that causes CEO pay to be higher than a true free market would allow. CEO’s are supposed to work for the shareholders, but shareholders can’t even vote up or down on executive pay. Instead, chummy board rooms give each other raises. It’s as if there’s a union that sets their own salary. Charge a ‘market correction fee’ instead of a tax, and use it to fund a basic income grant instead of a social program.

Fight for 15 – Walmart is able to pay sub-market wages due to the existence of a social safety net. Underpaid employees require lots of social services, so basically Walmart is able to shift costs for their workforce onto the government. Again, instead of tax and spend, it’s fee and dividend.

Healthcare – The entire industry is filled with market failures. Drug monopolies, opaque pricing, all those reasons healthcare costs keep going up. Put a ‘fee’ on the healthcare system and use it to purchase health insurance for everyone. There’s a podcast out there from either CATO or EconTalks (apologies I don’t have the cite) arguing for governments just buying insurance policies for everyone, which sounds a lot like universal healthcare.

The banking industry, military industrial complex, racism/sexism/homophobia (market failure here is that in a free market, companies would hire women and minorities because they are cheaper until that is no longer the case). Pretty soon conservatives start sounding like Elizabeth Warren. The point is, any time someone gets rich, there is a market failure that allows it to happen. While a liberal would say ‘behind every great fortune is a great crime’, a conservative would say ‘efficient markets would erode any rent seeking opportunities until goods are produced at the long run average total cost to produce them’.

Somewhere along the line, ‘free market’ became synonymous with ‘no government’, but any honest economist will tell you that is absolutely not the case. It takes a lot of work to keep markets free. And lately both parties have been doing a really lousy job of this.