Friday, September 25, 2009

Annoyed by Fisker electric cars

Was so annoyed by Fisker electric cars getting a $528.7 million loan from the US Department of Energy, had to write this comment: How to Kill Entrepreneurship, Arnold Kling | EconLog | Library of Economics and Liberty: "

Leave aside the farce of a 'plug-in' vehicle. These Fisker cars will create a lot of jobs for the coal industry in the USA. I don't much mind mercury in the lake fish I eat - at my body weight it would take a lot to bring me down - but I am less excited to further poison myself so these alleged virtuous souls can pretend to be environmentalists.

South KoreaImage via Wikipedia

Leaving aside this particular farce... One question I have for libertarians is: why is the example of South Korea supposed to to be noxious? They have a heavy government hand in all industry. Seems reasonable, seems to produce good results.

Answering my own question, as best I see: The best argument against such a heavy government hand here in the USA would come from Mancur Olson _The Rise and Decline of Nations_. After the devastation of the Korean War, South Korea was starting from scratch. They don't have the burden of steadily accumulating rent-seeker and entitlement government lobbyists, as the USA has accumulated.

The most interesting reply I received was:
david writes: I wonder whether it's possible for a country to have an arrangement of interest-groups such that virtually all power is concentrated in the hands of a few groups with an interest in longer-term growth. Caplan might consider Singapore, whose government has been noted to absorb or demolish other civil institutions. It is also a small open economy. So presumably it can be modeled as one rational actor restricted by international competition rather than by local politics.

South KoreaImage via Wikipedia

South Korea is presumably similar, but with its massive industrial conglomerates instead. Since most of their markets are overseas, beyond the control of their own government, there are perhaps fewer attempts at domestic regulatory rent-seeking. They have to be competitive or die anyway. Posted September 25, 2009 3:59 PM
I still think government intervention into technological innovation is irrationally too low.
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