Topic: Political Philosophy

Seen and Not Seen

The Washington Post Magazine had a detailed profile of the daily activities of freshman House member Joe Courtney (D-CT).

We learn that he spends much of his time raising campaign money, even though the next election is still 17 months ago.

More interesting is how a single business in his district, Electric Boat Corp., seems to dominate his time on Capitol Hill. He meets with the company, he lobbies Democratic Party bosses on the firm’s behalf, and he makes sure to ask questions in congressional hearings related to the company.

Electric Boat makes vessels for the Pentagon and employs 6,000 in Courtney’s Connecticut district. That’s a lot of people, but there at 680,000 people in Courtney’s congressional district — what about all their interests? Does Courtney put any effort, for example, into keeping taxes low for the benefit of all the other thousands of businesses in his district?

The article reminded me of Frederic Bastiat’s “What is Seen and What Is Not Seen.” Unfortunately, most politicians focus only on the immediate, most simple, and most visible effects of government action, and don’t have the imagination or capacity for abstract thought to recognize the unseen but much larger effects of big government.

How do we fix this bias?

Furman on Inequality

Following in my illustrious footsteps as an Economist.com guest blogger, Brookings senior fellow Jason Furman writes thusly of rising income inequality

According to the Congressional Budget Office’s income inequality data, the top 1 percent of households have seen their incomes go up by 7 percent and the bottom 80 percent have seen their income shares go down by 7 percent.  In total that is a $664 billion increase in inequality, representing $7,000 for each household in the bottom 80 percent and nearly $600,000 for each household in the top 1 percent.

That number motivates a Hamilton Project tax strategy paper co-authored by Larry Summers, Jason Bordoff and myself that is being released today.

It is far from obvious what has caused the change; in just the last month alone the National Bureau of Economic Research has released three working papers with divergent explanations:  a reduction in the bargaining power of workers, an increased reward for skills and worker productivity, and the destruction of good jobs by trade.

Regardless of the cause of rising inequality, lefties, utilitarians, Rawlsians and anyone with a deep-seated reverence for markets and the capitalist system should all be concerned.  As Alan Greenspan memorably stated, “income inequality is where the capitalist system is most vulnerable.  You can’t have the capitalist system if an increasing number of people think it is unjust.”

Well, I consider myself a sort of Rawlsian (a Rawlsekian!) with a deep-seated reverence for markets and the capitalist system. Should I be concerned? I agree with the sainted Greenspan that capitalism cannot survive a widespread conviction that it is unjust. And I agree that income inequality is one of those things that some thinkers like wheel out to try to convince us that capitalism is unjust, at least around the edges, in order to build popular support for such things as more steeply “progressive taxes combined with expanded benefits like health insurance,” like Furman wants. But I’m not so worried by rising income inequality as I am by Furman’s facile slide from income inequality numbers, which are meaningless by themselves, to the possibility of a crisis of legitimacy.

It is worth repeatedly and forcefully emphasizing that income inequality may or may not be symptomatic of injustice. The three hypotheses for rising inequality Furman mentions are perfectly consistent with advances in justice. And if they are generating income inequality, then it may vindicate capitalism. For example, the loss of jobs, a decrease in wages, or a decrease in bargaining power for some workers may be a consequence of lifting coercive restrictions on voluntary exchange across borders – restrictions that are themselves a form of injustice. Furman himself notes that protectionist policies could decrease inequality, though he advises against them, and rightly so, since they are unjust. But if protectionist policies are lifted, and inequality increases, that uptick in inequality is a side-effect of justice, not a symptom of injustice.

Inequality may reflect real injustice in our culture and institutions, and some portion of it probably does. But then our focus ought to be on rooting out those injustices, not papering them over with confiscatory redistribution which, in the absence of a reason to do it other than arbitrarily reducing measured inequality, is straightforwardly immoral.

Let’s set aside the matter of the intelligibility of “shares” of “national income” as a subject of justice for another time.  

Here’s to You, Mrs. Swedenburg

Juanita Swedenburg, the Virginia winemaker who took her battle for economic liberty to the Supreme Court and won, died June 9 at the age of 82. Clint Bolick, who argued her case as a lawyer for the Institute for Justice, discussed it in his new book David’s Hammer:

My curiosity was sparked, however, during a visit in the early 1990s to a small winery in bucolic Middleburg, Virginia.  The proprietor was a striking older woman, Juanita Swedenburg, who owned and operated the winery with her husband.  She produced several good wines, including a chardonnay with the toastiest nose I can remember.  We got to talking and Mrs. Swedenburg asked me what I did for a living.  When I told her that, among other things, I challenged regulatory barriers to entrepreneurship, she exclaimed, “Have I got a regulation for you!”          

Most states, it turned out, prohibited direct interstate shipments of wine to consumers.  So that if tourists from another state visited Mrs. Swedenburg’s winery and asked how they could obtain her wines back home, she would have to reply, “You can’t.” …

As a descendant of settlers who fought in the American Revolution, Mrs. Swedenburg was outraged that such a stupid law could exist in a nation with the greatest free-enterprise system in the world. 

Eventually, Bolick writes, the Institute for Justice took Mrs. Swedenburg’s case to the Supreme Court. He argued against a New York law, and Stanford law school dean Kathleen Sullivan (who also spoke recently at the Cato Institute) argued against a similar Michigan law. The Court ruled 5-4 that such laws “deprive citizens of their right to have access to the markets of other States on equal terms.” When Bolick launched his new book at the Cato Institute in April, Mrs. Swedenburg was sitting in the front row.

Juanita Swedenburg was the kind of citizen a free republic needs. After a career in the foreign service, she and her husband “retired” to a Virginia farm that had been in business since 1762. They set up a winery and worked seven days a week to make it a success. As the Washington Post says, “Mrs. Swedenburg did not take the Constitution for granted.” She knew that there was something wrong with a law that prevented willing customers from buying the fruits of her labors, wherever they lived. And when she found a lawyer who shared her enthusiasm for both wine and constitutional liberty, she pressed him to take the case on behalf of her and her customers.

Like John Peter Zenger, Rosa Parks, Allan Bakke, Michael Hardwick, Bill Barlow, and many others, Mrs. Swedenburg made our constitutional rights real by using them. Raise a glass to her memory.

Live Free Or Not

NH sealIn this age of galloping leviathan, one cause for joy is New Hampshire’s continued willingness to thumb its nose at various dictates from Washington, D.C. In some cases, the state’s federalism obstinacy prohibits it from receiving Uncle Sam’s largess — a penalty that many Granite Staters consider a sign of honor.

But the joy of New Hampshire was muted a bit this spring when the state’s General Court (the legislature) flirted with giving up one of its most celebrated examples of recalcitrance— the refusal to adopt mandatory seat belt laws for adults. A bill mandating the wearing of seat belts made it through the state’s House of Representatives before stalling in a Senate committee. What’s more, proponents scored a victory by placing a “seat belt policy exploratory committee” rider on a completely unrelated piece of legislation.

The standard justification for seat belt laws — that government is looking out for your well-being — would have little truck in “Live Free or Die” New Hampshire. So bill proponents tried a different tack; as noted in an AP story, they claimed that they’re simply looking out for the taxpayer:

“Live Free or Die would be great but you expect everyone to pay for you,” said Rep. Jennifer Brown, the bill’s prime sponsor. “The state has to pick up the medical bills and it could be for the rest of your life.”

State. Sen. Maggie Hassan said mandating seat belt usage is just as much about her rights as those who don’t like the idea.

“People like me who use my seat belt will wind up paying for people who don’t,” she said. “This is about my rights.”

Notice the strange conception of “rights” assumed by this argument: Because government offers a benefit, government — acting on behalf of “taxpayer rights” — can dictate people’s behavior because of the possibility that some people who engage in that behavior might use that benefit. (This is different than, say, work requirements for welfare — in that case, people choose to accept a benefit, and government is placing a condition on the receipt of that benefit.)

The slippery slope problem of such thinking is obvious. Because government provides an education benefit to children, can it mandate certain behaviors for adults of child-bearing age? Because government provides some health benefits, can it regulate everyone’s risk-taking behavior? Because government provides retirement benefits, can it dictate people’s employment decisions?

This should prompt good civil libertarians to look skeptically at any proposal to create or expand government benefits. Laocoon’s warning can be updated: Beware of politicians bearing benefits.

Hurray for a Bigger Welfare State!

The Bush administration is deeply infused with a pro-spending, welfare state mentality. It may contain a few conservative officials scattered here and there, but the vast machinery of the Republican executive branch churns out spending proposals, regulations, and big government propaganda just as prior Democratic ones did.

Consider this June 5 press release from the USDA , wherein higher spending and more recipients of government welfare is always a good thing.

Agriculture Secretary Mike Johanns says proudly: “We have increased our nutrition assistance budget by 70 percent since 2001 and we proposed that the 2007 Farm Bill do even more to increase access and participation in USDA programs to help those in need.”

Here’s one particularly silly statement: ”Today’s report highlights the recent growth in the Food Stamp Program — the largest Federal nutrition assistance program, and the nation’s first line of defense against hunger.”

Of course, free markets are the real “first line of defense against hunger.” Has no one in the administration read Adam Smith? It is the self-interest of the butcher, brewer, and baker that we can thank for providing our dinner.

George Will and the Ideological Switcheroo

George Will has a thoughtful column titled (in the Washington Post, at least) “The Case for Conservatism.” You might say that it demonstrates that George Will has accepted modernity, because his definitions of liberalism and conservatism are thoroughly modern, not historical. Consider:

Today conservatives tend to favor freedom…. Liberalism increasingly seeks to deliver equality in the form of equal dependence of more and more people for more and more things on government.

Traditionally, of course, it was liberals who favored freedom and minimal government. The Encyclopedia Britannica defines liberalism as a ”political doctrine that takes the abuse of power, and thus the freedom of the individual, as the central problem of government.” Wikipedia is similar: “Liberalism refers to a broad array of related doctrines, ideologies, philosophical views, and political traditions which advocate individual liberty…. Broadly speaking, liberalism emphasizes individual rights.”

Conservatism, on the other hand, according to Britannica, is a “political philosophy that emphasizes the value of traditional institutions and practices.” In many societies, of course, freedom is not a traditional practice. George Will may be talking strictly about American conservatism, in which case it is plausible to say that a conservative should want to preserve the traditional American institutions and practice of liberty and limited government. I have often wondered, what does it mean to be a conservative in a nation founded in libertarian revolution? If it means preserving the values of the Declaration of Independence and the Constitution, then a conservative is a libertarian — or what used to be called a liberal.

But what if one wants to conserve something else? Who’s to say that the principles of 1776 are the right thing to conserve? What if you wanted to conserve Southern plantation society? Or the rights and privileges of the British monarchy? Or the institutions of the Dark Ages? Or the traditional Indian practice of suttee, in which widows are expected to immolate themselves on their husband’s funeral pyre?

That is why Hayek said that he was not a conservative — because conservatism is essentially a philosophy of “opposition to drastic change,” but without any fundamental principles of its own other than serving as a brake on change.

But that’s not the conservatism that Will describes. In his view, conservatism is about freedom and a sober recognition of the limits of power. “Liberalism’s core conviction [is] that government’s duty is not to allow social change but to drive change in the direction the government chooses. Conservatism argues that the essence of constitutional government involves constraining the state in order to allow society ample scope to spontaneously take unplanned paths.”

If that’s the case, then there’s been almost a complete switch of the philosophies of liberalism and conservatism. Indeed, it’s intriguing to switch the words in Will’s article. Try the quotation above with the words reversed: “Conservatism’s core conviction [is] that government’s duty is not to allow social change but to drive change in the direction the government chooses. Liberalism argues that the essence of constitutional government involves constraining the state in order to allow society ample scope to spontaneously take unplanned paths.” It still works, right? That’s the liberalism of John Locke, Adam Smith, John Stuart Mill, and F. A. Hayek. And if it’s not the conservatism of Maistre or Shelley — who wanted government to resist change, not drive it — it might be the conservatism of those in contemporary society who want government to actively instill virtue in the citizens.

One might alternatively try substituting “liberalism” for “conservatism” in Will’s essay, and “illiberalism” for “liberalism.” Then we might get, for instance, “liberals tend to favor freedom, and consequently are inclined to be somewhat sanguine about inequalities of outcomes. Illiberals are more concerned with equality, understood, they insist, primarily as equality of opportunity, not of outcome.” Or:

This reasoning is congruent with liberalism’s argument that excessively benevolent government is not a benefactor, and that capitalism does not merely make people better off, it makes them better. Illiberalism once argued that large corporate entities of industrial capitalism degraded individuals by breeding dependence, passivity and servility. Liberalism challenges illiberalism’s blindness about the comparable dangers from the biggest social entity, government.

Liberalism argues, as did the Founders, that self-interestedness is universal among individuals, but the dignity of individuals is bound up with the exercise of self-reliance and personal responsibility in pursuing one’s interests. Illiberalism argues that equal dependence on government minimizes social conflicts. Liberalism’s rejoinder is that the entitlement culture subverts social peace by the proliferation of rival dependencies.

Maybe I’m dreaming of a golden age of liberalism that no longer exists, an age when liberals stood for freedom and limited government, for, in the words of Wikipedia, “a society characterized by freedom of thought for individuals, limitations on power (especially of government and religion), the rule of law, the free exchange of ideas, a market economy that supports free private enterprise, and a transparent system of government in which the rights of all citizens are protected.” Maybe.

But then, maybe George Will is dreaming of a Platonic vision of conservatism, a conservatism committed to freedom and limited government, a conservatism that certainly isn’t classical conservatism and isn’t the conservatism of the contemporary conservative movement. But it was the conservatism of Barry Goldwater and of Ronald Reagan’s speeches, and often of William F. Buckley, Jr. And maybe, just maybe, if George Will and a few of his conservative soulmates prevail, the conservatism of the future. If I can dream of a liberalism that once again seeks to liberate the individual from the constraints of power, then Will can dream of a conservatism that actually favors freedom.

Also posted at the Britannica Blog.