Hugh McDermott for Prospect

The End of Loser Liberalism: Making Markets Progressive

In his new book, The End of Loser Liberalism: Making Markets Progressive, Dean Baker argues that progressives hurt their cause whenever they accept the conventional wisdom that conservatives are for the “free” market while progressives are for government intervention in the market economy.  In a much-needed counter-narrative, Baker stresses that this is both bad policy and bad politics.  He takes apart this fundamental misframing of economics and details how conservatives actually use the government to twist markets to their advantage and points out that they are just smart enough not to own up to it.

Using real-world examples and plain language, Baker, economist and co-director of the Center for Economic and Policy Research, explains that markets are an incredibly valuable tool and asserts that progressives should look to structure them in ways that lead to more equality, just as conservatives have structured them to help the wealthy get wealthier. He asserts that by accepting conservative-influenced market outcomes largely as a given, then restricting their battles to redistribution after the fact, liberals have condemned themselves to a losing position.

Baker also demonstrates how the government’s key economic policy levers — for example, the Federal Reserve’s control over inflation and unemployment rates as well as the value of the dollar — have enormous impact on how the economy affects regular people. He shines light on many other ways that the government has massive influence on markets, but which rarely appear on political radar screens — such as patents on prescription drugs that multiply their prices, trade barriers that maintain high incomes for highly paid professionals at the expense of those who pay for their services, and the implicit government subsidies enjoyed by “too-big-to-fail” banks.

Baker points out that amount of income and wealth shifted towards the rich by such government policies swamps the sums at stake in most other economic policy debates. He urges progressives to go to where the money is — by exposing how conservatives depend on the government to intervene in markets in their favor — and not condemn themselves to fighting what will mostly be losing battles over the crumbs.

By releasing The End of Loser Liberalism: Making Markets Progressive under a Creative Commons license and as a free electronic download [http://bit.ly/p0kq5B], Baker walks the walk of one of his key arguments — that copyrights are a form of government intervention in markets that leads to enormous inefficiency, in addition to redistributing income upward. (Hard copies will be available for purchase, at cost, in the near future.)  Distributing the book for free not only enables it to reach a wider audience, but Baker hopes to drive home one of the book’s main points via his own example.

Source: Real-world Economics Review Blog