Defending Privilege in a World of Disruptive Innovation

Two front-page stories in the Metro section of Monday’s Washington Post depict protected service providers desperately trying to fight off innovations that might serve customers better and threaten the comfortable incomes of the established providers.

First up, Tesla and the automobile dealers:

Don Hall, president of the Virginia Automobile Dealers Association, was making the hard sell.

Staring directly into the camera, using the language of war, he urged car dealers to unite against a force that he said threatened their livelihoods: electric-car-maker Tesla….

The reason that Hall was sounding the alarm: Tesla, which sells its cars directly to consumers rather than through franchise dealers, is trying to open a second store in Virginia.

Car dealers in Virginia and across the country have been fighting Tesla, seeing the company’s direct-to-consumer sales model as a threat to the franchise system that they say protects consumers as well as their own business interests.

In Virginia, as in most states, it is generally illegal for manufacturers to sell cars directly to consumers.
Like all regulatory rent-seekers, the automobile dealers have some public interest rationales, such as the claim that customers benefit by being able to shop for service among multiple dealers of the same automobile. But their arguments may rest more firmly on the fact that “over the past decade, VADA has given Virginia politicians $4 million in campaign contributions.”
 
Private companies aren’t the only protected providers. Just below the Tesla story was one about advocates of the federally funded school voucher program in the District of Columbia hoping that a new president will be more supportive of school choice than President Obama has been. Defenders of the traditional school monopoly are not giving up:

The prospect of an expanded voucher program is not a welcome one among the District’s elected officials, who chafe as Congress — where the District has no vote — passes laws that shape the landscape of city education. Many also are ideologically opposed and worry that an expanded voucher program could threaten the progress and growth of the city’s traditional public and public charter schools.

“I’m 100 percent opposed to public dollars going to private schools like this,” said D.C. Council Member David Grosso (I-At Large), who has spoken forcefully against the voucher program for years.

In a world where millions of students, especially low-income and urban kids, are getting a poor education, teachers unions and school bureaucracies have been fighting choice programs for more than two decades. Just like automobile dealers, they put their own interests ahead of those of their customers.

I should note that Clayton Christensen, who coined the term “disruptive innovation,” would probably say that these examples don’t qualify. Maybe I should just use the older term “creative destruction.” By any name, it’s people trying to protect their own lucrative position against competitors who think they can serve consumer needs better.

Posted on November 28, 2016  Posted to Cato@Liberty

David Boaz’s upcoming appearance on the end of year summary is promoted on Westwood One’s The Jim Bohannon Show

Posted on November 28, 2016  Posted to Cato@Liberty

President-elect Trump

President-elect Donald Trump. That’s a phrase I never expected to see. Like most Washingtonians, journalists, and political observers around the country, I never took his candidacy seriously. And now here we are, in thoroughly uncharted waters. I don’t think we’ve ever had a president with less apparent knowledge of or interest in policy, which makes it difficult to assess the direction of policy over the next few years. The few issues that did seem to motivate Trump were strikingly unattractive from a libertarian perspective, notably his hostility to international trade and immigration.

Back in January I wrote this in a National Review symposium:

From a libertarian point of view—and I think serious conservatives and liberals would share this view—Trump’s greatest offenses against American tradition and our founding principles are his nativism and his promise of one-man rule.

Not since George Wallace has there been a presidential candidate who made racial and religious scapegoating so central to his campaign. Trump launched his campaign talking about Mexican rapists and has gone on to rant about mass deportation, bans on Muslim immigration, shutting down mosques, and building a wall around America. America is an exceptional nation in large part because we’ve aspired to rise above such prejudices and guarantee life, liberty, and the pursuit of happiness to everyone. Equally troubling is his idea of the presidency—his promise that he’s the guy, the man on a white horse, who can ride into Washington, fire the stupid people, hire the best people, and fix everything. He doesn’t talk about policy or working with Congress. He’s effectively vowing to be an American Mussolini, concentrating power in the Trump White House and governing by fiat. It’s a vision to make the last 16 years of executive abuse of power seem modest.

Nothing much changed over the ensuing 10 months. Except that Trump won the election. He is now president-elect, and scholars and activists on all sides are waiting to see what his actual policies will be. Some of my friends are excited about the prospects for tax cuts, deregulation, repeal of Obamacare, the appointment of conservative or classical liberal Supreme Court justices, and a change in our interventionist foreign policy. Others—and sometimes the same people—worry about threats to world trade and an open society, religious tests, and a president who seems vindictive, inclined to conflate his private business with public affairs, and predisposed toward an authoritarian mindset.

I worry that Americans across the political spectrum are fulfilling one of Hayek’s warnings in The Road to Serfdom:

We must here return for a moment to the position which precedes the suppression of democratic processes and the creation of a totalitarian regime. In this stage it is the general demand for quick and determined central government action that is the dominating element in the situation, dissatisfaction with the slow and cumbersome course of democratic processes which make action for action’s sake the goal. It is then the man or the party who seems strong and resolute enough to ‘get things done’ who exercises the greatest appeal.

Clearly that was part of Trump’s appeal: “I alone can fix it.” But President Obama made the same point when he said, “We can’t wait for Congress to do its job, so where they won’t act, I will.” Hillary Clinton made the same promise to her supporters. 

President Obama, like President George W. Bush before him, built up the power of the presidency and the potential for abuse. Now he is handing that powerful presidency to a man he declared unfit to hold such power. Libertarians, liberals, and constitutional conservatives need to come together to rein in the powers of the executive and restore Congress as the constitutionally designated legislative body. Some conservatives understand that. Here’s Michael Gerson in the Washington Post:

In Federalist No. 10, James Madison says that we can’t always assume the existence of “enlightened statesmen.” And, by golly, he got that one right. The Constitution is designed to channel and balance conflicting interests, making the whole system less vulnerable to a bad leader. The founders might have been appalled by the election of a Trump-like president; they would not have been surprised by it….

Republicans will genuinely agree on parts of Trump’s agenda. But the republic is likely to depend, at certain defining moments, on stubborn Republican institutionalists willing to defy the wrath of populists. Democrats may find this unlikely. It is incumbent on GOP leaders to prove them wrong.

George Will also sought hope in the principles the Republican party proclaims:

For constitutional conservatives, the challenge is exactly what it would have been had Clinton won: to strengthen the rule of law by restoring institutional equilibrium. This requires a Republican Congress to claw back from a Republican executive the legislative powers that Congress has ceded to the administrative state, and to overreaching executives such as Obama, whose executive unilateralism the president-elect admires.

We also need to make clear that America’s founding principles of liberty, limited government, and equality under the rule of law apply to all Americans. Many conservatives and libertarians had a good time mocking the “special snowflakes” on elite college campuses who were so traumatized by Trump’s election that they needed exams canceled and therapy dogs brought in. They’re an easy target—smart, affluent students in the best colleges in the richest country in the history of the world unable to handle losing an election. But as Radley Balko said on Twitter, imagine being a Latino student when the president-elect has promised to deport 11 million Latinos. Or a Muslim student worried that the next president views you as a terrorist. Or a black student who fears that the police are going to read the president and his attorney general as indifferent to police abuse. Republicans say they don’t want to appeal to people as racial blocs, they want to implement policies that benefit all Americans. Then they might take a leaf from Hillary Clinton’s concession speech:

Let’s do all we can to keep advancing the causes and values we all hold dear….

And breaking down all the barriers that hold any American back from achieving their dreams. We spent a year and a half bringing together millions of people from every corner of our country to say with one voice that we believe that the American dream is big enough for everyone.

For people of all races, and religions, for men and women, for immigrants, for LGBT people, and people with disabilities. For everyone.

Libertarians believe that. I hope that conservatives and Republicans and even President-elect Trump will say—and demonstrate—that they believe it, too.

Herblock Clean ShaveWhatever the misgivings I had about candidate Trump—and candidate Clinton—the election is over. Donald Trump will be the next president. Like all Americans, my colleagues and I will deal with that. I hope that when Trump puts his hand on the Bible and recites George Washington’s oath of office, he will indeed be inspired to put campaign rhetoric behind him and to preserve, protect and defend the Constitution of the United States. In 1968 the Washington Post columnist Herblock, who had savaged Richard Nixon for two decades, usually drawing him with a sinister 5 o’clock shadow, drew a cartoon depicting his office as a barbershop and wrote, “This shop gives to every new president of the United States a free shave.”

In January we will publish the 8th edition of the Cato Handbook for Policymakers, a collection of 80 chapters of policy advice ranging from tax reform and health care to foreign policy and congressional governance. We trust that members of both parties in Congress and the administration will be seeking to implement policies that will enhance the liberty, security, and prosperity of the American people, and that they will thus take an interest in our recommendations. And we will also remember that eternal vigilance is the price of liberty.

Posted on November 21, 2016  Posted to Cato@Liberty

David Boaz discusses the popular vote and the electoral college on Sinclair Broadcast Group

Posted on November 15, 2016  Posted to Cato@Liberty

David Boaz discusses Donald Trump’s victory on FBN’s Stossel

Posted on November 11, 2016  Posted to Cato@Liberty

The American Promise

We hold these truths to be self-evident, 

that all men are created equal, 

that they are endowed by their Creator with certain unalienable Rights, 

that among these are Life, Liberty and the pursuit of Happiness.–

That to secure these rights, Governments are instituted among Men.

Posted on November 11, 2016  Posted to Cato@Liberty

The American Promise

We hold these truths to be self-evident, 

that all men are created equal, 

that they are endowed by their Creator with certain unalienable Rights, 

that among these are Life, Liberty and the pursuit of Happiness.–

That to secure these rights, Governments are instituted among Men.

Posted on November 11, 2016  Posted to Cato@Liberty

The American Promise

We hold these truths to be self-evident, 

that all men are created equal, 

that they are endowed by their Creator with certain unalienable Rights, 

that among these are Life, Liberty and the pursuit of Happiness.–

That to secure these rights, Governments are instituted among Men.

Posted on November 11, 2016  Posted to Cato@Liberty

A Surprise Ending to Presidential Election 2016

An unprecedented election ends in surprise, and more questions for President-elect Donald Trump’s substantive policy. David Boaz comments.

Posted on November 9, 2016  Posted to Cato@Liberty

Trump’s (Few) Good Ideas

In my circles, Donald Trump’s policy agenda was viewed dimly: throughout the campaign it seemed that his main commitments were to block trade, stop immigration, deport 11 million people, and ban Muslims from the country.

I myself wrote about his “insults, secret plans, and a promise to kick everybody else’s ass,” right after seeing him speak in the summer of 2015, and I contributed to National Review’s “Against Trump” cover story. Still, if I could admire Hillary Clinton’s secret support for “a hemispheric common market, with open trade and open borders,” I can find the occasional nugget in Trump’s basket of deplorable policies.

Trump had many policy positions on his website, from child care to cybersecurity. Many of them never seemed to really hold his attention.

Republican voters nominated and elected a candidate who rejects the bipartisan Washington commitment to global interventionism.

But he did return repeatedly to some interesting ideas about foreign policy that were different from the usual Washington talk in both parties. He was wildly inconsistent, sometimes talking about torture, illegal orders to the military, and a determination to “take the oil.” But he correctly pointed out that our current foreign policy hasn’t worked very well. And indeed he had made a similar point in a full-page ad in the New York Times in 1987.

That’s an aspect of the 2016 campaign that hasn’t gotten enough attention: Republican voters nominated and elected a candidate who rejects the bipartisan Washington commitment to global interventionism.

So let’s identify three policies Trump advanced that he ought to stick with in the White House:

The promise that “war and aggression will not be [the president’s] first instinct.”

That ought to go without saying. But we’ve been involved for the past 25 years in a seemingly endless war in the Middle East, and there’s no end in sight. Wars that began with limited purposes — to block Saddam Hussein’s takeover of Kuwait, and to retaliate against al Qaeda and the Taliban in Afghanistan for the 9/11 attacks — have metastasized into a region-wide campaign of regime change and nation-building. A president who rose to power on the strength of an antiwar speech and who received a Nobel Peace Prize on spec will leave office having bombed seven countries and with the two longest wars in American history still running.

In that world, the understanding that “caution and restraint are really truly signs of strength” would be a welcome change.

We must abandon the failed policy of nation building and regime change that Hillary Clinton pushed in Iraq, Libya, Egypt and Syria.”

As Jeffrey Sachs Foreign policy elites in both parties think this record hasn’t been assertive enough, especially in Syria. Establishment think tanks are churning out recommendations for the Hillary Clinton administration to take more aggressive military action in the Middle East and on Russia’s borders. These were the same people and organizations that either actively cheered on the war in Iraq in 2003, or were silent. President-elect Trump needs to bring new voices into his administration.

It’s time to rethink NATO.

Trump repeatedly suggested that NATO, the keystone of U.S. global interventionism, is obsolete. He also declared that the United States “cannot be the policeman of the world” and that it is time for Japan and Korea to assume more responsibility for their own defense.

NATO was created in 1949 to defend war-ravaged European nations from a Soviet Union that had extended its control over much of central Europe. As we approach the alliance’s 70th anniversary, it’s surely time to consider whether NATO is indeed, as my colleague Ted Galen Carpenter writes, “an obsolete security arrangement created in a vastly different era to meet an entirely different security situation.” The foreign policy establishment, including Hillary Clinton, sharply attacked Trump’s position. But now that the heat of the election is past, we should have a real debate on the value of far-flung alliances to American security.

Foreign policy elites remain committed to global interventionism. But voters don’t like these endless wars. And for all of Republican politicians’ insistence on a robust and more costly military, Republican voters aren’t keen on constant intervention.

As neoconservatives and Republican senators beat the drums for military action in Syria, Republicans turned sharply against the idea — 70 percent against in September 2013.

Perhaps most broadly, a massive Pew Research Center survey in December 2013 found that 52 percent of respondents said the United States “should mind its own business internationally and let other countries get along the best they can on their own.” That was the most lopsided balance in favor of the U.S. “minding its own business” in the nearly 50-year history of the measure. That number dipped to 43 percent in 2016, but a similar question — whether the United States should “deal with its own problems and let other countries deal with their own problems the best they can” — found 57 percent agreement in 2016, and 62 percent of Republicans.

Candidate Trump never presented a coherent 21st-century foreign policy. But he did repeatedly raise some important concerns, and he proved that Republican voters — and perhaps even, or especially, military veterans — aren’t reflexively hawkish. His administration should broaden the foreign policy debate to include these questions.

And maybe there’s one more idea that ought to survive from the 2016 campaign. It wasn’t Trump’s idea, or Clinton’s. But the prospect that Trump will acquire the awesome powers of the modern presidency — and the fact that Hillary Clinton could have – should inspire both Democrats and Republicans in Congress to start reasserting their authority and obligations under the Constitution. Sen. Tim Kaine, his profile elevated by being Clinton’s running mate, has been a leader in the Senate for reining in presidential warmaking; he should return to the Senate even more determined to insist that only Congress can take the country to war.

Posted on November 9, 2016  Posted to Cato@Liberty

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