Solving vs. Profiting from Problems
posted by Frank Pasquale
One of the classic conservative critiques of legal system is that lawyers just redistribute resources; they don’t actually create them. Given the state of countries that lack a strong rule of law, I’ve been skeptical of characterizations of lawyers as “mere redistributors.” But I’m wondering if those who find America “overlawyered” might be willing to extend their critique to military spending as well. For example, Naomi Klein notes that
[T]here are two distinct business models that can respond to our climate and energy crisis. We can develop policies and technologies to get us off this disastrous course. Or we can develop policies and technologies to [conduct] resource wars . . . while simultaneously shielding ourselves from the worst of both war and weather. . . .[D]espite all the government incentives [for green technology], the really big money is turning away from clean energy technologies and banking instead on gadgets promising to seal wealthy countries and individuals into high-tech fortresses.
Regardless of what one thinks of Klein’s politics, she raises serious questions about whether market forces will lead to a clean energy–or will simply lead to more investment in the type of miltary might that can guarantee access to resources. She quotes a venture capitalist on the risks of the former strategy:
Douglas Lloyd, director of Venture Business Research, a company that tracks trends in venture capitalism[, says] “The failure rate of security businesses is much lower than clean-tech ones and, as important, the capital investment required to build a successful security business is also much lower.” In other words, solving real problems is hard, but turning a profit from those problems is easy.
Or perhaps easy enough to be skeptical of claims that the miracle of the market will solve all our problems.
December 3, 2007 at 8:03 am
Posted in: Economic Analysis of Law, Politics
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Responses (4)
Maryland Conservatarian - December 3, 2007 at 9:18 am
…and the alternative to markets is what? a select group of elites doing what is best for the rest of us?…I hope you can appreciate why those of us who would be ideologically ineligible to be part of that elite group (you know, because we’re registered Republicans, Fed Society members and/or Pro-Life) are skeptical
geoff - December 3, 2007 at 1:12 pm
Are you kidding with this, Frank? There are two business models for responding to these crises? Did you happen to notice that this allegedly complete universe of responses both actually entail government domination of the process? Klein is a demogogue, at best. She is so blind that she actually thinks that she has offered a “government can guide the course gently” solution and a “the market left to its own devices will just perpetuate war and class conflict.” But how does a thinking person miss the fact that the solutions she offers are actually just two different versions of “government does it?” One is shiny and happy and the other is ominous and mean. Naomi — and you — believe that shiny and happy will predominate. I believe you are kidding yourselves. Either way, you’re not giving the market–which, unlike government, has never started a war–a chance at all, even though you think you’re talking about the market here. Naomi doesn’t even begin to “raise serious questions [I'm tempted to just end the quotation here] about whether market forces will lead to clean energy.” This is crappy scholarship, even for blogging. Quote a stupid demogogue’s demogoguery as “fact,” fail to question the glaring idiocy of that quote, and then, QED, conclude that the market is evil. Nice going, Frank.
Oh, and, yes, I’m suspicious of military spending as all free marketeers (libertarians) are (for some reason you claim to be talking about “conservative” market defenders. Who are these people? Most of the Republicans I see running for office are practically as anti-market as the next guy, they just use better rhetoric). But that’s just the point: It’s your precious and noble government that gets us into and spends money on war. Even — horrors — Democrats! As I said, the market never started a war. By all means, while reducing the size of the bloated government, reduce military budgets, as well. But while you are picking and choosing all the ways to expand the government (the litany of Frank Pasquale-endorsed paternalistic endeavors aimed at crushing those evil “positional goods”), you should realize that over-spending on military is far more likely to accompany overall overspending than a mindset devoted to shrinking the government and promoting the market. You should realize this, but I’m not holding my breath.
hkjhbjh - December 3, 2007 at 3:55 pm
This post sidesteps a significant debate: whether it is more efficient for society to reduce pollution or to design a work-around to allow the world to function even when temperatures are higher. It might be the case that it costs $1 trillion to reduce pollution enough to stop global warming, but only $500M to deal with the consequences of global warming. If this is the case, society should chose the more cost-effective solution.
Frank - December 3, 2007 at 5:31 pm
hkjb makes an interesting Kaldor-Hicks point; I’ll accept it more readily when we have some international mechanisms that can guarantee that the “winners” compensate the “losers.”
The other two commenters inadvertently demonstrate the point of the piece I linked to in the hyperlink “miracle of the market.” They betray a market fundamentalism, an extraordinary unwillingness to accept that the market might just produce bad outcomes.
I am by no means a pollyannish believer in the efficacy of gov’t–see my post on Excesses of Eurocracy from yesterday. Moreover, I realize that forces empowered by market exchange can also capture government regulators:
http://www.concurringopinions.com/archives/2007/09/the_price_of_a.html
I am just trying to wring some concession of the wisdom of collective action out of fundamentalist atomists who presume without proof that it is always part of a road to serfdom.
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