In my opinion, the seeming inevitability of Orszag-like migrations points to a potentially fatal tension within the progressive strand of liberal thought. Progressives laudably seek to oppose injustice by deploying government power as a countervailing force against the imagined opressive and exploitative tendencies of market institutions. Yet it seems that time and again market institutions find ways to use the government's regulatory and insurer-of-last-resort functions as countervailing forces against their competitors and, in the end, against the very public these functions were meant to protect.
We are constantly exploited by the tools meant to foil our exploitation. For a progressive to acknowledge as much is tantamount to abandoning progressivism. So it's no surprise that progressives would rather worry over trivialities such as campaign finance reform than dwell on the paradoxes of political power.
JONATHAN CHAIT of the New Republic takes issue with some of the lessons I drew earlier this week in my post about Peter Orszag's trip through the Washington-Wall Street revolving door:
I don't think private capture of public functions represent a major, recurring problem with liberal governance. Does the minimum wage result in regulatory capture? Does Social Security? The Earned Income Tax Credit? Moreover, when such capture does occur, liberals can un-capture it, something that happened with student loans, Medicare Advantage, and so on. Libertarians are very interested in the phenomenon of regulations being turned into weapons of business power, but this phenomenon seems like the exception rather than the rule.
First, I should clarify that I did not mean to be pointing out a huge hole in the logic of liberal redistribution. Rather, I was pointing out a problem for the classical progressive idea of the regulatory state as a check on concentrated economic power. In any case, I must say I'm dazzled by the audacity of Mr Chait's claim that the "private capture of public functions" is rare.
Let me give two shorter excerpts of Wilkinson
"to acknowledge as much is tantamount to abandoning progressivism"
"I was pointing out a problem for the classical progressive idea"
Either admitting that an approach has any problems is tantamount to abandoning it, or Will Wilkonsin is lying about what he wrote.
My comment on Brad's blog follows.
Wilkinson and Chait are, among other things, arguing about the correct interpretation of something written by Wilkinson. I call that debate for Chait. Wilkinson's paraphrase of Wilkinson is innaccurate. Not to put too fine a point on it, Wilkinson has chosen to lie about what he wrote.
The key passage of Wilkinson's post is "For a progressive to acknowledge as much is tantamount to abandoning progressivism." Now he claims "Rather, I was pointing out a problem for the classical progressive idea "
BullSh*t. The fact that some approach must face some problems proves that we are on planet Earth. To aknowledge as much one does not need to abandone everything. Resistent bacteria are a problem for the physicians who rely on antibiotics. Is Wilkinson going to argue that we should abandone antibiotics ?
Wilkinson said that acknowledgement that regulatory capture is and always will be a problem implies abandonement of the classical progressive project. That's just as sane as my argument against antibiotics. If it has a problem abandone it is his implied logic.
He has conveniently forgotten about his stated conclusion.
Wilkinson also lied about what Chait wrote. Chait wrote "I don't think private capture of public functions represent a major, recurring problem with liberal governance." Wilkinson claims " Wilkinson wrote 'Mr Chait's claim that the "private capture of public functions' is rare."
Wilkinson is making it obvious. I'm sure there are cases in which an honest person has constructed a sentence partly by quoting and partly by rewriting. I can't think of any such case, but people have been writing for a long time. Wilkinson just decided to suppress the word "major". He must know that his use of quotation marks is fraudulent. He must understand that he is cheating. I don't think that he understands how gross this second lie is, because I don't think he is capable of grasping the concept "major." He shows no capability of understanding degrees, quantitative differences, anything between 0% and 100%.
Another point of contention is that Wilkinson was writing about "the classical progressive idea ..." that is thought from the progressive era. This is comprehensible from context, but Chait can't be blamed for assuming Wilkinson used "progressivism" the way everyone else has for decades.
Of course practically everyone who ever lived and breathed understands that regulatory capture is an inevitable problem with any regulation (including the regulations that establish the institution of private propertyvconclusion and pretends he just said that there is a problem. (Brad's implied claim that Marx's thought on the subject was original is absurd -- in this case, he like Wilkinson was pretended he had discovered something which was well known to all)).
Sane people do not therefore become anarchists or decide to eliminate private wealth completely. Insane people might become anarchists or, if they are insane and incapable of following their arguments to their conclusions libertarians or Christian Scientists or who knows what.
The worst problem with Wilkinson is not that he wrote something stupid (everyone does from time to time). It isn't even that, when challenged he lied about what he wrote. The problem is that he can't see any shade of grey.
His argument is that progressivism can't be perfect and that if progressives recognised this they would have to abandon progressivism. He can write such nonsense, because he thinks in false dichotomies. If money can be used to influence regulators, then regulators serve only money and all regulations become tools of concentrated interests. He does not recognise anything between no influence at all and total control.
This means that he doesn't notice that there is a difference between reducing the impact of a regulation and reversing the impact. Let's imagine a simple world with one variable x and a regulation which would cause x to increase by 10 if regulators were completely immune to any influence. But a few are bribed (not important) and many know about revolving doors and all that and as a result x increases only by 9. Wilkinson would claim that the proof of influence (such as Orszag's current employment) proves that the regulation caused x to decrease. Oh and that if he can think of 20 such cases then he can conclude that regulation always helps concentrated interests.
Of course people who control lots of money can influence other people (not quite all but many other people). This does not mean that regulations aiming to restrain business have the opposite of the intended effect.
Consider the example of financial regulation. Wilkinson is saying the classical progressives were wrong about regulation. If he really thought that, he would think that regulation should return to the way it was before the progressive era. His solution to the fact that Orszag's actions in office were problem influenced by the prospect of getting his current job if he didn't piss off Citibank managers is to eliminate financial regulation. We tried a little tiny bit of that and it didn't work.
He is almost completely indifferent to evidence and deeply profoundly innumerate (well that's shades of grey again).
Some of his claims about the freequency of regulatory capture --
"it seems that time and again ...."
"We are constantly exploited by the tools meant to foil our exploitation. "
A claim about what "seems" becomes an unqualified claim in the indicative. "Time and time again" becomes "constantly"
Now it becomes "... regulation is very, very, very often turned into (or originally fashioned) as a weapon of business power."
Wilkinson fails entirely to note that cases in which regulation is originally fashioned as a weapon of business power offer no him no support. That would be the law of intended effect. He is incapable of grasping the fact that progressives didn't create all regulations (he specifically cites regulation in the 1920s when progressives were all powerful as we know). But Wilkinson is a liberaltarian so he doesn't bother over the distinction between progressives, and Republicans. They all have something to do with government and Wilkinson imagines that, if he can prove that government is imperfect, he has proven that he is a genius and member of a tiny enlightened elite.