My political preferences lie on the right side of politics but I find myself increasingly repelled by what I see the right doing – the Australian political movement is paralleling the total madness of the US Republican right. Like most economists I favour a pervasive role for markets in the economy because these often better reflect aggregated citizen preferences than the views of bureaucrats. But, beyond the views of most economists, I think I am right-wing because, even in situations where I recognise that free markets do not work ideally, I still tend to favour using them rather than relying on the views of bureaucrats and planners. The latter too often get it very wrong.
As an environmental economist, however, I recognise that markets can fail disasterously or just not exist at all – the climate change externality is a prime example but other examples arise locally in, for example, water markets and in non-existent markets for road congestion and road damages. My natural inclination in these is settings is to look for solutions involving use of market-based mechanisms.
The right in the Australian economics profession generally oppose carbon pricing on various grounds (it isn’t necessary because climate change is a fiction and even if it were not unilateral policies by Australia won’t work because Australia is little and, anyway, the policies are not credible creating holdup obstructions). There are a battery of independent objections on dealing efficiently with the worst environmental problem the world has ever faced. If one can be rejected by evidence and logic (as they have) then try another. If all are rejected then create enough confusion and doubt to bury the issue.
As I have recently become aware the right also oppose road congestion pricing. Astoundingly they recognise that there are high costs of pricing congestion but ignore other evidence that sees much higher gains eventuate than previously believed if bottlenecks are addressed, reliability of travel is improved and so on. The right apparently want congestion in the cities to continue even though, again, a market-based solution that they should endorse, presents itself. The case for congestion pricing is overwhelming after 35 years of concentrated debate and discussion.
Finally, the intellectual economics right opposed the mining tax reforms even though any second-year economics student worth their salt can tell you that, in efficiency terms, a profits tax outperforms our current system of distorting output-related taxes. There may be objections to grabbing profits that would primarily go overseas on equity grounds (errr?) but the efficiency case here is water-tight. The argument , if anything, should have been about the level of the tax not about retaining a silly dependence on output levies that unduly penalise higher cost producers.
I’ll exclude discussion of the cigarette “plain packaging” legislation since the intellectually credible sections of the economics right avoided taking sides with the tobacco companies in opposing a move that can only at worse be ineffective – the chances are it will reduce deaths from cancer and emphysema. The more disreputable sections of the right, who secure part of their funding from tobacco companies, opposed this legislation. But this mob of no-hopers comprise a minor grouping of intellectual irrelevancies.
I don’t know for sure what’s going on here. A fair bit of it is ideological ratbaggery. Some involves scouring literature for ‘wrinkle-like’ counterarguments to various measures and emphasising these to the exclusion of others that do not support right-wing ideological priors. There is no attempt to put arguments in perspective. There is also a pathetic attempt to establish prima donna reputations on the basis of time-worn arguments that have already been dealt with. It is sad since some good minds are wasting their brains on efforts that if successful will be socially counterproductive. I’ll pursue this issue further in future posts.