« Assorted links | Main | How right-wing are journalists on economic issues? »
Why the Left should learn to love liberalism
Labour-market flexibility, deregulation of the service industry, pension reforms and greater competition in university funding is not anti-equality. Such reforms shift financing from taxpayers to the users themselves and, as such, tend to eliminate rents. They tend to increase productivity by basing rewards on merit rather than on being an insider. They tend to open up opportunities for younger workers who are not yet well-connected. Pursuing pro-market reforms does not imply facing a trade-off between efficiency and social justice. In this sense, pro-market policies are “left wing”, if that means reducing the economic privileges enjoyed by “insiders”.
...If the European left wants to be able to say honestly that it fights for the neediest members of our society, it must adopt as its battle cry the pursuit of competition, reforms and a system based on meritocracy.
Amen. This is from an excellent op-ed by Alberto Alesina and Francesco Giavazzi writing in Vox. My only complaint is that they write as if this is new. In fact, liberalism, meaning classical liberalism, has never been conservative. It began as a movement of the left against feudalistic, conservative insiders and it remains so today.
Posted by Alex Tabarrok on October 5, 2007 at 07:10 AM in Economics | Permalink
Comments
Question for our hosts - and not a trick one either: in one word, how would you describe your politics: left or right?
Posted by: tom s. at Oct 5, 2007 8:04:29 AM
Can't speak for the hosts of course but I'm a leftist:
"In fact, liberalism, meaning classical liberalism, has never been conservative. It began as a movement of the left against feudalistic, conservative insiders and it remains so today."
Amen Brother!
Posted by: Tim Worstall at Oct 5, 2007 8:30:00 AM
Remember: the original right-wingers were the monarchists.
Posted by: bartman at Oct 5, 2007 8:54:27 AM
And liberal used to mean pro-liberty!
Posted by: Rich Berger at Oct 5, 2007 8:59:27 AM
Sorry, for years libertarians have been explaining to liberals that the latter's pet policies will simply lead
to regulatory capture and rent extraction, and liberals only accept these insights long enough to shoehorn
them into some anti-corporatist populism and learn nothing.
Hey, if they want to substantially reduce government's power and with it, the rent seeking, welcome aboard.
Posted by: Person at Oct 5, 2007 9:36:35 AM
I don't think this is right.
Leftism is primarily based on moral evaluations (this does not mean that leftists are more moral than rightists, but that they use moral evaluations more).
I think this is why the left, even the centre left, tend to be anti markets - markets are amoral, they simply dont allow enough scope for moralizing.
For example, those on the left are very interested in relieving poverty in Africa not just because it is extreme but because the debate in Africa is framed around missionary-style personal interventions based on human judgment and virtue. They focus attention on small local projects to alleviate poverty or improve health, where an individual can potentially make a difference.
By contrast, the left is completely un-interested in the successful and massive poverty alleviation going on in China and India because this is achieved by abstract impersonal amoral markets.
Posted by: Bruce G Charlton at Oct 5, 2007 11:30:23 AM
Tom. One word: Ambidextrous.
Posted by: Alex Tabarrok at Oct 5, 2007 11:52:52 AM
The reason liberals espouse anti-market ideas is because anti-market factions make up an important part of the "liberal identity." Some of this has to do with the suspicions organized labor had for big business. To this was added the influx of socialists during the New Deal. However, a far greater reason nowadays was the counterculture radicals who hijacked the party after 1968 who defined themselves in a pseudo-Marxist fashion ala Antonio Gramsci.
Politics is based on coaltion building. Factions ally in order to enact their programs. They compromise in order to develop a platform the entire coalition can support. Allegiance to all the coalition's goals is a way for them to signal their identity as "one of us" to their allies. I have witnessed many cases when a person all of a sudden develops a great concern about some irrelevant policy simply because word got out that adhering that line is important to the coaltion. I consider most people's concerns about gay marriage is actually part of this tribal identity signalling.
I suspect new liberals in the age cohorts after the Baby Boomers are likely to be more pro-market, but until the decaying hand of the Baby Boomers - and their sentimental attachment to their erroneous past views - withers away liberals will continue to be more anti-market than they should. For the leftist Baby Boomers to become pro-market would be to admit to themselves that they were very wrong in their youth, and that is a psychic break they cannot make.
There are fissures in both parties' grand coalitions, so it is possible that new coalitions will form and with them will come subsequent new definitions of liberal and conservative. There is no guarantee that the GOP will continue to be pro-market, because big business has incentives to be anti-market. No one knows now what the future will bring.
Posted by: Chris Durnell at Oct 5, 2007 1:41:03 PM
BGC, very interesting comment.
Posted by: James at Oct 5, 2007 5:53:38 PM
Such reforms shift financing from taxpayers to the users themselves and, as such, tend to eliminate rents.
This reminds me of when I was in grad school at U. Oregon (Go Ducks!). The city of Eugene was having trouble funding its annual Eugene Celebration. When a bank offered to fund it, provided that the lapel pins that served as entry passes had their logo on it. The left-wing contingent in town (not plain liberals, but anti-capitalist left-wingers) objected. They preferred that the entire citizenry be taxed, although only a minority attended the festival. My Marxist friends (yes, they were both) couldn't grasp that they were actually rent-seekers.
Likewise, student fees paid for "free" tickets to football and basketball games, although not all students could go. I gleefully enjoyed my rent on those "free" tickets all through grad school, while simultanously arguing that the system should be changed to a fee-payer system.
Posted by: James Hanley at Oct 5, 2007 8:18:52 PM
Leftism is primarily based on moral evaluations (this does not mean that leftists are more moral than rightists, but that they use moral evaluations more).I think this is why the left, even the centre left, tend to be anti markets - markets are amoral, they simply dont allow enough scope for moralizing.
I disagree with this. The market process is certainly amoral, but markets are not. Markets are made up of people, and they reflect the morals of the people involved. Leftists aren't mad at the market process, they are mad at the market participants for not sharing their morals. So they use government to rent-seek, and gain more support for their causes than they would otherwise have. Their actions must be hypocritical, or else they would pursue their moral goals without the use of government.
Posted by: G at Oct 6, 2007 6:55:30 AM
"[Classical liberalism] began as a movement of the left against feudalistic, conservative insiders and it remains so today."
That's a bit of an overstatement. Marx referred to the generation after Ricardo and Mill as the "vulgar political economists" because they acted as hired prizefighters on behalf of plutocratic interests.
Certainly a major strand of the free market movement retained the radical orientation of the classicals: Hodgskin, the American individualist anarchists, the Georgists, some aspects of Spencer, etc., and 20th century offshoots ranging from Nock and Oppenheimer, to Ralph Borsodi, to the left-Rothbardians.
But major strands were also coopted to the defense of big business interests (you know, the "persecuted minority," as Ayn Rand called them). Much of what is promoted at Cato and the ASI is just a free market figleaf for corporatism.
There's as much variation between the real and phony branches of libertarianism as there is between, say, Rosa Luxembourg and Joseph Stalin in the offshoots of the nineteenth century workers' movement.
Posted by: Kevin Carson at Oct 8, 2007 4:26:44 AM
"By contrast, the left is completely un-interested in the successful and massive poverty alleviation going on in China and India because this is achieved by abstract impersonal amoral markets."
That 'massive poverty alleviation" is in fact massively partial, to the extent that there are regular labour riots in China. It's also balanced against massive poverty creation in the US, where what was once a prosperous economy has been strip mined to the extent that debt and bankruptcy are becoming regular experiences for average working Americans.
And let's not even mention the ecological holocaust that's happening in China.
The left position - in this century, at least - is simply that actions have consequences and that only fools and crazy people build economic systems that ignore them.
Arguing from ideology is always weaker than arguing from empirical experience, because reality isn't interested in who's a liberal and who isn't, but only in consequences and experiences.
The right can always argue that because *some* people get richer, reforms are good.
The left position is that wealth redistribution is always more creative and prosperous than wealth concentration, because concentration promotes complacency and laziness, while distribution creates opportunity.
It's the conservative right that has been missing the point here. And there are now thirty years of evidence to back up the fact that given reformist policies, wealth concentrates among the ownership classes and starves the rest of the population of opportunities for creative economic participation.
The authors in this case are repeating the same discredited fallacies. People can choose to believe them, or not, but given the weight of evidence, it's hard to see their argument as anything other than pseduo-rational hand-waving.
Posted by: Richard Leon at Oct 8, 2007 6:02:37 AM
The discussion seems painted with very broad brush strokes from any particular side each with claimed benefits that I strongly suspect would last about a week and we would be right back at the debate. The range of thought within the discussion though is rather impressive. The concept of Free Market Anti-Capitalism is a new one to my fledgling economic education. Though I have to agree with the observation about Professor Cowen's overstatement. Obviously there are more than just two sides to this debate.
The most recent post packages the issues neatly for consideration. It is easy to agree that "actions have consequences and that only fools and crazy people build economic systems that ignore them.", but that advice applies to both sides of the ideological fence. It is also easy to agree that wealth redistribution is always more creative and prosperous than wealth concentration, because concentration promotes complacency and laziness, while distribution creates opportunity. Historical, from my perspective and here all sides can argue, an extremism of either right or left has resulted in a concentration of wealth or at the very least done a lousy job of redistribution in a sustainable fashion. Most appealing is arguing from empirical experience, because reality isn't interested in who's a liberal and who isn't, but only in consequences and experiences. This still leaves plenty of opportunity for philosophical pondering about moral sentiments and wealth creation. I still lean towards what has been described as classical liberalism but my recent self-questioning raises self-doubts about my premises.
China is often brought up in these discussions and there are many issues that justify concern and opposition to China's current polices - Darfur and Burma readily come to mind in addition to those cited. Despite that the question still arises as to the best means of having China take a primary role in the world economy. In particular comparing it to the path that Russia has taken and the effects its policies have had on its people and where its stands today in the world. Would anybody want a Chinese "Putin"?
Posted by: BrianDRPM at Oct 11, 2007 4:57:09 PM
