2/2 Beware of the Big-Government Right by Richard A. Epstein via Defining Ideas, Hoover Institution. “Oren Cass’s new book contains a flawed game plan for America”

Dec 16, 2018, 05:07 AM

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[continued from previous podcast listing:]     . . . What Cass does not supply is an explanation of how growth makes American malaise more acute. His general laments about the state of American society sound awfully like the frequent jeremiads of Barack Obama, who bemoaned the lack of good jobs to help all the hard-working folks at home. Indeed, the claims of stagnant wages and low labor-market participation during the Obama years ring true, for his pious rhetoric was never matched by sensible programs on the ground. Indeed, there is a sense that Cass did not revise his argument in light of recent developments under the Trump presidency, flawed as it is on foreign trade and presidential decorum. As Michael Strain and James Pethokoukis point out, all the indicators to which Cass points on wage levels and job formation have turned upward, happily increasing opportunities for lower-income workers. Cass rightly insists that a solid employment market is essential for forming successful families and easing high levels of social anxiety and distrust. But it is a huge mistake to think that any program targeted toward low-income workers and their families is likely to work. The government needs to get out of the way, not to reform national character, optimize employment, or create some national purpose. One clear illustration of how government is the problem and not the solution involves collective bargaining laws under the National Labor Relations Act (“the NLRA”). The NLRA was meant to create industrial peace and higher living standards for workers. It has done neither. Cass rightly attacks it for its “disastrous effects” in creating “hyper-adversarial relationships that neither side wants.” But he offers no alternative strategy to achieve his goals. I have long held that it is best to start over, by returning to the pre-NLRA policy which allows firms to announce in advance that they refuse to hire any worker with union affiliations. Critics moan that this hard-line position spells the end of worker participation in the firm. But in fact, the opposite is true. One little-noticed provision of the NLRA is Section 8(a)(2), which condemns as an “unfair labor practice” the formation of company unions, i.e. those that are organized and dominated by the firm itself. Labor unions demanded this prohibition to avoid competition from firms whose worker committees could, and did, give workers a chance to participate in formulating company policies, without posing the risk of strikes and the burdens of collective negotiation. The targeted legislative boost to union monopolies raises wages and lowers consumer welfare. It does not heal the collective soul. To better meet Cass’s goal, we need less regulation—and more growth. Putting this stress on growth, moreover, does not denigrate the importance of caring for and assisting others. Indeed, one of the odd features of Cass’s work is that it uses a far too narrow definition of markets, which ignores the key role of private charity and philanthropic activities more generally. Of course, personal disabilities and natural catastrophes will persist no matter how much we preach the gospel of self-sufficiency. But massive government transfer payments are far from the best way to repair the social fabric. The government may be able to tax and spend, but it is hardly able to make sure that the assistance that is so desperately needed goes to the right recipients in the right form. One term that has gone out of common usage is the old expression “imperfect obligation,” which stated that people in all walks of life should take care of those who need assistance as a matter of personal conscience and social obligation. This notion is a central part of the classical liberal tradition. That principle often plays out modestly, entailing such actions as providing food and oth...