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Question: How do you describe your economic views?

Dean Baker: I definitely say I’m progressive. In terms of some of the roots, they are very much coming out of Keynesian tradition. I think that the main economic problem we often face is shortage of demand. In contrast with the conventional economic view certainly in this century, the 20th century as well, of seeing the main shortfalls being scarcity. I think we do see scarcity at times in terms of too much demand, too few goods and services. But I think, more typically, we actually do see too little demand. I think that is more typically the case. But the other place where I think I differ with some of my friends, which really just comes from thinking through things is that I think it’s important to distinguish between wanting a role from government as an end in itself as opposed to seeing the government as a stearer of markets. And I think a lot of progressives have wrongly created this dichotomy between progressives liking government and conservatives liking markets. And what I’ve tried to argue in much of my writings, certainly the book “The Conservative Nanny State”, was that conservatives really do like the government. They want the government to play a very big role in the economy but in effect, they want the government to set up structures so that income flows upward. And what I’ve tried to look at is how we can undo that, how we can reverse that. So how we could have the government basically structure markets so that income flows to those at the middle and bottom. And that doesn’t necessarily mean a bigger role for government than what the conservatives envision. In some cases, it might mean a small role. I talk about copyrights and patents. Well, copyrights made Bill Gates a very rich man. I don’t want copyrights but copyrights a real big government intervention, same with patents, drug patents. Drugs are very expensive because the government gives a patent monopoly. If we didn’t have a patent monopoly, we could buy all our drugs at Wal-Mart or nearly. I don’t do Wal-Mart commercials but here I will. We could buy all our drugs from Wal-Mart for $4 a prescription. But we can’t do that with many of the drugs we often need because Pfizer or some other company has a monopoly and they’re going to charge $500 for a prescription. So I would say that there’s not any link between progressivism and big government. It’s really a question of how we structure markets. And I just think we have to think more carefully about the way markets are structured today to cause income to flow upwards and then think of how we could structure that in different ways so that income flows downward.

Recorded on: April 28 2009




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