By Bryan Caplan
Bryan’s response focuses on the ways in which free markets would solve
the problems I point to if they were really problems. But the whole
point of my position is that we don’t have a free market!
Left-libertarians have pointed out in detail the ways in which the
housing and labour markets, for example, are skewed in ologopolistic
and oligopsonistic directions respectively.
Reply: I’m well-aware that markets aren’t entirely free. But the deviations from the free market that Rod highlights wouldn’t cause the problems he laments. Go to any micro textbook. Even a government-created monopolist still has a clear incentive to cut prices when its costs fall, and raise prices when its costs go up.
The fact that workers can shirk, that tenants can be delinquent, etc.,
is beside the point. We already know upfront that each party to a
contract can potentially screw over the other. The point is that, given that context, the contracts are then skewed to favour one side.
Re-read Rod’s original post. At minimum, it sounds like he thinks that shirking workers and delinquent tenants are barely worth mentioning. Still, I’ll accept Rod’s concession, then ask: Isn’t there a connection between the “screwing” and the “skewing”? I say that’s the heart of what’s going on: Firms, landlords, and employers offer skewed contracts to make it harder for customers, tenants, and workers to screw them. And most customers, tenants, and workers happily accept these contracts because they sensibly prefer lower prices, lower rents, and higher wages to formal equality.
Rod’s third point:
Yes, there are various regulations that purport to help the weaker
party to the contract; but left-libertarians have argued in detail that
those regulations in practice actually tend to help the stronger party
instead. Maybe we’re right about that and maybe we’re wrong, but as far
as I know, Bryan hasn’t addressed those arguments, and we can hardly be
expected to pretend we haven’t made them.
Frankly, the left-libertarian arguments to this effect that I’ve personally heard are so poorly reasoned I’ve seen no point in responding or reading further. But I respect Rod Long. If he wants to prove my blanket dismissal wrong, I’m happy to listen. My challenge for him: Tell me how tenant protection laws actually benefit the average landlord. But note: The mere existence of negative side effects for tenants is not enough to prove Rod’s case. Neither does the mere existence of some landlords who benefit.