June 13, 2018
Neil Irwin had an interesting piece discussing various proposals that would ensure that workers share in productivity gains if we start to see massive job displacement due to robots (not much to date). At one point, he says this list would imply more activist government. This is not true. Most of the proposals (which can be found in my 2016 [free] book Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer ) involve different ways in which the government would structure the market, not necessarily more intervention.
For example, weaker and shorter patents and copyrights actually imply less government intervention in the market. Patents and copyrights are of course government granted monopolies that raise the prices of protected items by several thousand percent, sometimes tens of thousands of percent. Reducing this protection is a move towards a freer market.
Monetary policy that targets full employment is no more “activist” than monetary policy that focuses on keeping inflation down, it is simply a question of priorities. The question is whether the government is working towards ensuring that workers can get jobs or whether it is focused on protecting the wealth of the wealthy.
Work sharing is an alternative to unemployment insurance. With standard unemployment insurance, the government is effectively paying workers half their salary to be completely unemployed. By contrast, work sharing involves half of the wages lost from being partially unemployed due to a cutback in hours. While this is arguably better for workers and employers, since it keeps workers attached to the labor force, this arrangement does not in any obvious way imply more activist government.
It is striking that the rules that set in place the current market structure and the resulting upward redistribution are somehow regarded as natural and that efforts to alter them are regarded as “activist.” In fact, the upward redistribution of the last four decades was engineered by a series of policy shifts, not any natural process of market evolution.
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