The first error of libertarian paternalism is its failure to vindicate its libertarian piece—namely a full-fledged endorsement of freedom of contract. Before fixing default rules, libertarian paternalism should work actively to dismantle the vast set of coercive legislation that hangs over competitive labor markets, including key bodies of law banning age, race, and sex discrimination in employment, or those imposing minimum wage and maximum hour regulations, or rules that otherwise ban unjust dismissal.
Speaking of foreign competition – that is, of the freedom of domestic consumers to spend their money as they choose, including to purchase goods and services offered for sale by foreigners – Colin Grabow reminds us that healthy, growing economies are marked by on-going change and creative destruction. A slice:
According to economist Maximiliano Dworkin of the Federal Reserve Bank of St. Louis, competition from China resulted in the loss of 800,000 jobs between 2000-2007, primarily in the production of computer and electronic goods, primary and fabricated metal products, furniture, and textiles. However, he also found that the economy gained a similar number of jobs in other sectors, such as services, construction, and wholesale and retail trade (significantly, Dworkin also says that as a result of savings to firms of lower production costs and access to cheaper Chinese-made goods, “U.S. consumers gained an average of $260 of extra spending per year for the rest of their lives.”).