Thursday, January 26, 2006

Smart Liberals, Foolish Choices, Part II

The left has trouble dealing with the real world: that is, the real views and agenda of their political opponents, and the real world results of both political agendas.

Another problem in terms of advancing themselves both politically, and their philosophy in the hearts and minds of those not yet converted to the faith, is that many of their ideas are flawed and they refuse to even consider that possibility. That so many people so profoundly and verbosely and extensively disagree on many of the fundamental ideas and policies they embrace should inform them, but largely, it does not. The problem is, those foolish people don't understand the "complexity" and the "nuance" of the issues, that's why they make the mistake of not agreeing with liberals--which is, naturally, why a liberal elite needs to run things, to the protect the masses of stupid tax-generators from themselves.


The left in this country argues for tax hikes, more government control of the free markets, less educational choice (it might benefit a private company or, gasp, a religious school, so kill it, kill it, kill it quick--don't, for example, argue for an exclusively secular version of school choice), less spying, less defense spending, and greater protection of the rights of terrorists and criminals (because, heck, you never know when someone might decide you are a terrorist or a criminal). Despite the fact that these positions don't sell well with the public at large, or bring much in the way of positive results they can point to.


I just don't see how, in the twenty-first century, the left can realistically expect to make progress as long as they embrace ideas that clearly don't work and actively oppose things that do. Just one example:


Doug Henwood argues, in Laissez-faire Olympics
, that economic freedom--that would be, say, the right to own property, sell property, save your own money, keep what you earn, and own and start a business--have no relationship to political freedom, or (oh my gosh he did not, did he?) wealth creation. He actually wrote, in March of 2005, that economic freedom doesn't really have much to do with wealth creation? I mean, huh?

But as anyone who lasted a week in a basic statistics course knows, proving a correlation doesn't prove causation; it could be that increasing wealth causes the index to rise, and not vice versa.

While I'm sure Marx would approve, it flies in face of both logic and a century of history. While Henwood makes good points about how the index is calculated, and how any random increase of wealth (from the wealth fairy, I suppose, or from all the wealth that naturally occurs by workers owning the means of production) would impact it favorably, the fundamental implication of Hendwood's piece--that there's no overall relation between economic and political freedom, or economic freedom and wealth generation--is just absurd. Several paragraphs of verbal acrobatics and obfuscation--
Instead of using GDP expressed in U.S. dollars, as is sometimes done, it's better to strip out pure currency market changes by using so-called purchasing-power parity (PPP) values, which attempt to express incomes at exchange rates that correspond to actual buying power. It's not a perfect measure - there's a lot of estimation and imputation involved - but it's become a standard for international economic comparisons. And instead of using aggregate GDP, as the report does, it's more revealing to use per capita figures; if a country's economy is expanding as rapidly as its population, the population isn't materially better off. Of course, GDP per capita is also a highly imperfect measure; it simply divides the monetary value of a country's economic production by its population. It says nothing about how income and wealth are distributed, much less the actual distribution of material welfare. But it too is the orthodox metric of comparison, and not useless as a guide to relative welfare across time and space. It makes good sense to test the economic freedom index against orthodox measures, since it emerges from sources whose only beef with current orthodoxy is that it's not capitalist enough.

While not completely unclear, that such a "proof" ends with the line "It's so much fun being on the right - you're liberated from the tyranny of having to make sense" has a certain ironic ring to it.



Irrespective of a particular index (Henwood's supposed beef is with the index, while implying the more fundamental assertion--with an implication seized upon many of the socialists on the left--that freedom and economic growth have no relationship whatsoever), it is simply common sense that you will have more economic growth in a country where you have more freedom to grow economically, even if that growth is small. Where your borders are more open, you will have more foreign capital and more foreign business investments (sources of economic growth that Henwood appears to discount), and where you can own and start a business, where you can keep more of your own money, where you have greater access to the marketplace, more economic growth will happen. And no amount of statistical contortions, or arguments against one potentially flawed index, will change that fundamental fact. In essence, Henwood and his compatriots are arguing against freedom, economic or otherwise, and though they would (and many often have) suggested that it's simply a lack of nuance, or understanding of complexity, to make such a simplistic accusation (that they are arguing against liberty), that doesn't keep them from coming off that way to pretty much everybody who doesn't already agree with them, a priori.


Some of them seem almost to willfully get the conservative view on economic and political freedom wrong. Jonathan Weiler wrote at the Gadflyer (you'll have to scroll down):
And, as the Harvard economist Dani Rodrik (see, for example, his March 2001 article in Foreign Policy), among others, has argued, studies correlating openness to trade with economic prosperity get the relationship exactly backwards – recent economic success stories, like the Asian Tigers, developed economically behind a protective wall, and then later opened up once they were in a relatively advantageous market position.


I mean, seriously. It makes my face twitch. That's exactly the point. Political freedom is often engendered by economic freedom. When economic freedom (that would be the growth of capitalism and free markets) is present, political freedom often follows. Slowly, and in fits and starts, but it does happen. That's exactly the sort of correlation conservatives argue for. Indeed, political freedom and democracy in an environment where nobody can own property or start a business, is not likely to create wealth. And no conservative has ever argued that it is.

Which goes back to my fundamental premise: that a primary problem liberals and the left have in regards to advancing their agenda politically, and in the hearts and minds of average folks, is that they refuse to accurately consider and understand the position of their ideological opponents, and so they argue against things that conservatives don't believe and policy positions that Republicans don't have. Combined with the fact that they cannot admit that history has proved, again and again, that economic freedom pays dividends, and that tax cuts--that is, keeping more money in the free market economy, rather than in government coffers--is good for the economic welfare of everybody.


But the Democrats still don't like tax cuts, and still like tax hikes. Despite the obvious and substantial increase in tax revenues trailing Bush's tax cuts, they still want to call them "costs", suggesting that somehow that economic growth that led to those increasing revenues was inevitable, and that despite the government having much higher tax revenues now than it did when Democrats were in power and higher taxes ruled the day, important things aren't getting paid for because of the lower taxes. Even though when tax receipts were much lower when taxes were higher, we'd have to assume that important things didn't get paid for to an even greater extent, simply because there's less money. But the left, and the Democrats, weren't complaining then.


Wealth redistribution doesn't work. While conservatives often argue that wealth redistribution is immoral or unfair, and the left argues the opposite, the fact that it doesn't work, especially with practiced in perpetuity, is difficult debate. The fact that socialism fails where capitalism and free markets succeed is largely ignored by liberals, who still want to nationalize healthcare, education, and fight against any private choice, or free market exercise, at all in regards to things like education and Social Security. Yet there is no shortage of evidence that it does not work, does not work well, or works only as a parasite sucking off of much better free market solutions. As Thomas Sowell noted in a recent book review (covering the economic growth of China):
People on the political left make a lot of noise about poverty and advocate all sorts of programs and policies to reduce it but they show little interest in how poverty has actually been reduced, in China or elsewhere ... If the Chinese government hasn't done it, then who has? The Chinese people. They did not rise out of poverty by receiving largess. The only thing that can cure poverty is wealth. The Chinese acquired wealth the old-fashioned way: They created it.

And it's demonstrably true. Only when the government stopped trying to create a workers paradise, and it's opened up it's marketplace and gave it's people a choice about things like what they did for a living and where they decided to live, did the Chinese miracle begin.


But what's happening in the real world appears to inform left-wing political strategy less and less. And if that doesn't constitute a foolish choice, I don't what does.

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