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Death Spiral Politics and the Ideal of Fair Play

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One of the themes of Greg Sargent’s 2018 book, An Uncivil War, is that our politics is caught in a “downward, self-reinforcing spiral.” Unsurprisingly, the two parties view each other as the primary reason we’re caught in a dysfunctional tailspin.

From the Republican point of view, “Democrats regularly undertake organized efforts to engineer voting in their favor by large numbers of undocumented immigrants, or people who, ineligible to vote, impersonate those whose names are on the rolls.” In addition, “Democratic electoral victories and the policies that result from them then become deeply suspect” since the platform of the party—again, according to many on the right—is mainly concerned with taking money from some and redistributing it to others. Of course those getting other people’s money are going to vote for the party that wants to give them more of it! The latter story has a racial element to it in which hard-working, white taxpayers are seen as paying the welfare benefits for all the undeserving and lazy minorities, which doesn’t even have a nugget of truth to it. “The basic story is the same,” Sargent says, “any amount of anti-democratic behavior by the Republican Party and the right is merely just a response to the left’s effort to destroy the country.”

According to the Democratic narrative, the problem with our politics is that “our elections are compromised by a combination of voter suppression, the gerrymandering of congressional maps, Electoral College distortion, and underhanded GOP tactics.”

In this telling, Republicans have largely held their grip on power through laws that deliberately make it hard for minorities and other Democratic-leaning constituencies to vote, and by redrawing congressional districts so that they have retained an unbreakable grip on the House of Representatives, insulating GOP lawmakers from broader currents of national majority opinion and allowing them to embrace policies that are out of step with it.

But Sargent doesn’t fall prey to both-sidesism. As he argues, one of these stories is largely true and one is, to put it lightly, fairly off the mark. While Democrats do engage in gerrymandering, they don’t do it to the same degree or with the same flagrant intensity as Republicans. Similarly, Democrats do engage in “Constitutional hardball”—“high-stakes behavior” that aims to “fundamentally alter institutional relations to one party’s advantage in some sense that violates previous understandings of the bounds of acceptable political combat”—but, again, much less often. There is almost nothing comparable to the Merrick Garland stunt spearheaded by Mitch McConnell during Obama’s second term—it may even be a high water mark for Republicans, though Democrats shouldn’t hold their breath. 

Republicans continue to lambast Democratic platforms as fundamentally illegitimate since they are focused on handouts and giveaways, but this shouldn’t make us lose sight of the fact that Republicans at this point have totally refused to even suggest what kind of platform or policies they wish to pursue. What Democrats are doing—or hoping to do—when they are in power is called governing, something Republicans have been increasingly uninterested in doing. Even their largely do-nothing-slash-everything program that aims to roll back programs and regulations remains deeply unpopular not only with most Americans but with large parts of their own base.  

In truth, it doesn’t really matter which story is more accurate. The point is that both sides have “felt unfairly treated by the other” and that, at this point, the game has a “tit-for-tat, reciprocal quality, which makes it very hard to assign overall blame for the ongoing deterioration.” 

Take the Garland fiasco again. Many Republicans smugly gesture to the controversy surrounding Robert Bork’s nomination some thirty years ago as the beginning of hyper-partisan Supreme Court nominations. With historical permission slips and just-so stories like these, Republicans have provided themselves with a self-serving narrative that, according to Will Wilkinson, makes their extreme actions seem “morally okay, maybe even urgently necessary.” After all, the fate of the country, if not freedom itself, hangs in the balance, as Michael Anton’s famous Flight 93 election piece made perfectly clear. This apocalyptic tone about American society, of course, ran the gamut, from fears about increasing immigration to debates over moving the top marginal tax rate up a few percentage points. “In their minds,” Wilkinson goes on, “mundane left-right differences about tax rates and the generosity of the welfare state are recast as a Manichean clash between the light of free enterprise and the darkness of socialist expropriation.”

Yet in treating history books as a game of connect-the-dots, we miss—on purpose for Republican strategists—the ratcheting up of these tactics over time. When it looked like Clinton might become president in 2016, whispers started circulating about the necessity of blocking every single nominee—by whatever means necessary—for the next four years. Serious political commentators should have little to no doubt that this sort of talk would have found serious avenues had Hillary won. Indeed, it happened four years earlier.

Both sides, in other words, blame the other for starting it—where “it” is pretty much everything wrong with America and, in some cases, the world. This, again, isn’t new, though it’s hard not to feel like we’re experiencing some kind of breaking point. As Sam Rosenfeld documents in his book The Polarizers, the postwar period saw a ratcheting up of partisan intensity as each party tried to shore up its ideological core, often by whatever means necessary. But the point is that both sides have viewed their tactics as defensive. In 1983, Newt Gingrich, emphasizing this they-started-it dynamic, opined that “Liberal Democrats intend to act bipartisan before the news media while acting ruthlessly partisan in changing the rules of the House, stacking committees, apportioning staff and questioning the administration.” The rest, as they say, is history.  

One of the primary questions Sargent addresses in this short book is whether fair play on the political battlefield is even possible—or even appropriate given where we’re at now. To put the point in starker terms, the question is one of strategy, and really only applies to one of the parties at this point: Given the GOP’s blatant disregard for fair play—all the while insisting they are only reacting or responding in kind—how should the Democrats respond?

The ideal of fair play

Playing fair, however ill-defined and slippery, makes intuitive sense to most people: everything runs better and partisan temperatures are cooler when everybody generally abides by the same norms and rules. Plus, it’s just unfair to exempt yourself from norms that you expect everyone else to go along with. It’s even worse when you engage in norm-breaking knowing other people won’t do anything to stop you. So while norm-breaking isn’t illegal, people do—in the abstract at least—tend agree that it’s generally a bad thing. “It would seem to follow,” Sargent writes, 

that governing norms are inherently good things that should be maintained at all costs. If both sides simply refrain from pushing the envelope—if both sides refrain from constitutional hardball—the system would immediately function more smoothly and salutary democratic outcomes will follow.

But this, as Sargent notes, isn’t the whole story. “Sometimes,” he goes on to write, “norm-breaking—or the full exercise of power—is essential for the sake of improving and advancing our democracy.” In short, we have to seriously wrestle with the fact that it’s not so much about norm-breaking per se, but norm-breaking in service of what end.

One of the most pressing questions during the Trump presidency was how Democrats should respond if and when they took back power. Some counseled staying the course: Democrats should just play politics as usual. To be sure, staying the course means different things to different people, but the point is that Democrats shouldn’t engage in the kinds of tactics Republicans have routinely employed for the last four decades. Nonetheless, they should fight hard for their agenda. “Democrats have a chance now,” Nancy Gibbs wrote in March of this year, “even as they pursue their agenda, to embrace a respect for the rule of law and restoration of constitutional norms that moderates and principled conservatives value.” This strategy, of course, hinges on just how many “moderates and principled conservatives” there are running around, and how many of them would be responsive to Democratic proposals. Democrats need to remember that while there is some distance between the Republican party’s base and its establishment actors (which we might see widen in the latest news about Texas’ abortion law), the former, when forced to choose between the parties, will often go the way of partisanship.

Others, unsurprisingly, argue that it’s time for Democrats to grow a spine and fight fire with fire. “Democrats,” writes Rob Goodman, “should plan to treat political norms, when and if they’re in charge of a unified government, the way Trump and the Republicans do. They should be readying a program of systematic norm-breaking for partisan advantage—but only if they are willing and able to follow it through to its conclusion.” What Goodman means here is that norm-breaking by Democrats is justifiable only if it succeeds in erecting institutional barriers that prevent the other side—Republicans—from hitting back if and when they are back in the driver’s seat. Although it’s unclear that there can be even temporary finality in politics, Goodman is right to point out that playing Constitutional slow-pitch, not going all in, would only result in a worse spiral. “The worst course of action,” Goodman writes, “would be an unfocused, impulsive, spasmodic program of norm-breaking, one that begins without a sense of where it is supposed to end. In that case, the logic of escalation will supply an ending.”

Intellectually speaking, David Faris seems to be the beating heart of this approach, whom both Sargent and Goodman cite. His proposals range from the unlikely to the possible: break up California (giving Democrats more representatives), grant D.C. and Puerto Rico statehood (doing what’s right for the people in those places while also giving Democrats more representatives), killing the fillibuster, packing the courts with left-leaning judges, and eliminating lifetime tenure of Supreme Court justices. This is Goodman and Faris’ endgame. If these were all pursued with the same ferocity that Republicans pursue their agenda—by whatever means necessary—there’s a good chance that there would be a permanent realignment in American politics. And outside of breaking up California, many of these things are commonsense proposals. They aren’t simply ways to increase Democratic representation; they are genuinely solid small-d democratic reforms. 

Fair play in the partisan vortex

But Republicans will no doubt look at these policies and see, well, dog whistles. Breaking up California and granting statehood to D.C. and Puerto Rico? A power play to increase Democratic majorities. Limiting the tenure of Supreme Court justices? More opportunities—with those new majorities and steady electoral wins—to seat more liberal justices. Killing the filibuster? Democrats just want to be able to pass whatever they want to pass without Republican support.

The odd thing is that it’s genuinely difficult for Republicans to be against any of these things as policies; the only legitimate way to be against them is by, ironically enough, framing them as Democrats playing hardball in order to beef up their constituencies and maintain power. Of course, this would be a legitimate criticism if it came from anywhere but the party that has quite literally done anything and everything to ensure they stay in power by whatever means necessary. But more importantly, it’s just not clear that all of these are purely power plays. 

The people of Puerto Rico and D.C. just aren’t represented and that’s the unfair part. Some form of representation is, or is supposed to be, a cornerstone value. You can call it low-blow power play, but you still have to come up with good reasons why it’s a bad move outside of simply impugning the motives of Democrats. Limiting the tenure of judges would make the entire judicial nomination process less partisan since there will be less of a need to take extra-Constitutional measures in order to block a justice. Killing the filibuster could also be painted as little more than an expedient move, but nearly everyone would probably agree that as a country we already have some of the most restrictive requirements for passing fairly routine legislation of any democracy. We also shouldn’t forget that Republicans have chipped away at the filibuster themselves when it served their own purposes. When they couldn’t push Supreme Court nominee Neil Gorsuch through, Republicans simply changed the rules to say that a filibuster couldn’t be used to block a Supreme Court nominee.

But even outside of some of these bigger plays, there are, as Sargent notes in his book, other things that Democrats should work to push through that would give Republicans an even bigger headache trying to push back against. In other words, things that aren’t hardball plays at all. 

For example, independent redistricting is also just fair, plain and simple. It’s unclear what the Republican response to anti-gerrymandering campaigns has been or even can be. As far as I can tell, the Republican response has just been to either double down on the hardball—well it’s not illegal—or, in a desperate rationalization to keep power, they will reach for, of all things, democratic arguments about how unelected boards or judges shouldn’t be given that kind of power, which is a laughably inadequate arguments given the explicit aims of the boards—fair districting, not Democratic-leaning ones—and the current status quo in which Republicans get to draw the maps however they want. In other words, we should pursue this, as Sargent writes, “not necessarily because this will help Democrats, though it might, but because it might edge the House of Representatives in a more, well, representative direction.”

Or, if all else fails, Republicans will “both sides” the issue, completely ignoring the differences between how much and often the parties engage in gerrymandering efforts. And it’s similarly unclear that something like automatic voter registration only helps Democrats; many poor and working class whites who would no doubt vote Republican but who struggle to get to the polls would also be registered.

Either way, anything Democrats propose, from the relatively benign—automatic voter registration—to the radical and unlikely—breaking up California—will nonetheless be interpreted in the Republican propaganda machine as crass power plays. But Democrats should focus less on duking it out on the narrative battlefield and fight the Republican narrative—which there is very little chance of changing anyway—with institutional changes like the ones Sargent suggests. It’s possible that these institutional changes will actually have the unintended effect of moderating the GOP’s messaging strategies.  

The point is, there’s no changing what gets plastered across the Fox News ticker every night. What we need to do, according to Sargent, is “take the weaponry out of GOP hands.” Which, as close readers will note, does not mean putting the weaponry in Democrat’s hands. Conservatives have already made a choice: in the face of a declining, largely heterogenous and increasingly radical base, they have chosen to go to war with the system itself rather than play by its rules. Democrats need to do everything in their power not to play the same power-grubbing game or even keep the system afloat as is, but to bolster it with new, bolder protections to voting rights in the form of independent redistricting, automatic voter registration, and even statehood for those unrepresented. 

This will inevitably be viewed as an act of aggression—but so will anything. As Sargent says, the right has “unshackled themselves from any empirical obligation of any kind in depicting the left and the Democratic party [accurately],” which creates a “pretext for a whole spectrum of anti-democratic activity, from voter suppression to the Arizona audit and the dry runs at overturning future [electoral] outcomes.” 

Some have argued that Democrats should have some faith in the demographic shifts currently underway, but that faith has to be buttressed by clear repudiations of Republican attempts to combat that demographic shift by rigging the system. Forcing Republicans to fight fair on the electoral battlefield—more voters, more equal districts—will, in the best case, force them to temper their resentment-centered politics and start appealing to broader swathes of the population. This, in fact, is the only way the Republicans can win going forward outside of further entrenching its minoritarian bulwarks. As Jacob Hacker and Paul Pierson write, “the goal should not be to make our politics more Democratic; it should be to make our politics more democratic.”

It’s tempting—and easy—to attribute most of the problems with our current system to both sides, Republicans and Democrats. This is certainly the baseline assumption for many Americans, especially those exhausted with the news, the non-stop 24-hour commentary, and the constant bickering between parties and partisan ideologues. But while there are issues that split the electorate and the parties for legitimate reasons, voting and representation shouldn’t be one of those issues. If the Democrats do indeed play Constitutional hardball and push through all kinds of bold voting protections, it’s hard to believe historians will place this action in the same camp as something like the blocked nomination of Merrick Garland. The uncertainty surrounding these kinds of moves has less to do with rightness or wrongness of the acts themselves and more to do with how an increasingly radical Republican party might react to them. 

To be against hardball in principle is to blind us from the realities that, well, often merit playing hardball. The question isn’t, “Should we play hardball?” but rather “Hardball in service of what end?” Nonetheless, Sargent gestures toward how difficult it can be knowing when and how to play hardball:  

the urgency of the ends simply will at times make hardball procedural escalations … appear more justifiable. There’s no easy way to resolve whether or when this is right, which must be undertaken on a case-by-case basis, and will always be the subject of intense contestation.

To put the point another way, there is just no clear agreement about when a line in the sand has been crossed or even where to lines are, as is evidenced by the various opinions about what Democrats should do now that they have power. All we can do is insist, over and over, that voting must be one of those lines and act accordingly. This is Democrats’ Flight 93 issue.

Featured Image is of the January 6 insurrection, by Tyler Merbler

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adamgurri
2 days ago
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Dear Sir: On the Liberal Fragility of the Economist

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I want to see The Economist do well. With a few gap years, I’ve subscribed to The Economist for well over a decade—ever since I could enjoy the still-expensive student price in grad school. I place a high value on having an old, venerable institution with deep journalistic expertise, credibility, and genuinely global scope. So when I criticize The Economist for its cover story on the dangers of the “illiberal left” and “illiberal antiracism” it is the constructive criticism of a subscriber.

The most recent issue, with leader “The Threat from the Illiberal Left,” set off a flurry of online criticism. The Economist propagates a number of elementary errors about antiracism and the social justice left. But perhaps more importantly, The Economist derogates its responsibilities as a liberal newspaper, both by gullibly endorsing duplicitous rightwing portrayals of social justice activism and by failing to explore the contiguities between social justice activism and the liberal tradition.

First, it must be said that a single to-be-sure paragraph acknowledging that “the most dangerous threat in liberalism’s spiritual home comes from the Trumpian right” nevertheless leaves the tonal conclusion intact: the social justice left is a dangerous enemy of liberals everywhere. And it’s part of a pattern. Similar warnings about the illiberal excesses of antiracism were trotted out after the murder of George Floyd by police.

Mistakes or bad faith?

The Economist does a disservice to its readers when it gets basic ideas in social justice discourse wrong or portrays them in a malicious light. The Economist asserts that “illiberal progressives” use a “caste system of victimhood in which those on top must defer to those with a greater claim to restorative justice.” This description will read as completely alien to any social justice activist with a significant following. It sounds like, perhaps, The Economist is trying to describe intersectionality, which is commonly described by right wing commentators as “Oppression Olympics” but simply means that oppression takes multiple forms and the experiences of someone with multiple disadvantaged identities (say, a Black woman, or a trans Muslim) cannot be adequately described by referencing only one of those identities (e.g., Black patriarchy is different from white patriarchy; misogynoir differs from the misogyny white women of different classes experience).

Or perhaps The Economist is referring to standpoint epistemology, the notion that people experiencing oppression are best placed to describe that oppression. This idea may rankle classical liberals who insist that ideas must be universally intelligible and not the exclusive domain of a privileged class. But really it’s common sense, and a variation on the idea well-established in economics of asymmetric information. Of course those who chafe under prevailing institutions have privileged access to the particulars of that chafing. This does, however, put liberals in a bind to the extent they are seen as defending the status quo.

With its emphasis on corporate diversity trainings, college campus dynamics, and “cancel culture,” The Economist creates the impression that the antiracist or “woke” left has abandoned hard-nosed material concerns in favor of policing thought and speech. “Material conditions that the old left cared about, such as persistent segregation in poor districts and schools, get little attention.” But this is not a reading of the social justice movements that I recognize, nor one many activists would recognize. Whatever you think about defunding the police, it’s hard to see it as anything other than a hard-nosed materialist approach: cutting the purse strings to a specific institution with the goal of reducing violence against Blacks in a measurable way. The movement for reparations for African American descendants of slaves, defended in The Economist’s own pages (to its significant credit) by Sandy Darity and Kirsten Mullen, is based on an historical accounting of economic and other damages done to Blacks in America. Its north star is closing the racial wealth gap, a metric that has grown in importance relative to income gaps because it more accurately gauges intergenerational inequality and actual economic security and capability. Ta-Nehisi Coates wrote one of the landmark essays of the present racial justice discourse, a case for reparations, based on the concrete and recent issue of segregation by red-lining.

The shift from racism as animus to “systemic” or “structural racism” is a shift away from personal feelings and toward material realities. The Economist badly misunderstands systemic racism and misleads its readers in a grossly negligent way. “Progressives” believe “that white people can be guilty of racism even if they don’t consciously discriminate against others on the basis of race, because they are beneficiaries of a system of exploitation.” This, again, is simply unrecognizable to actual antiracist activists in the basic conceptual terms used. No one talks about white guilt. It exists in the—one reaches for the word “fragile”—egos of white liberals and conservatives who seem to interpret all racial justice activism as an attack on them personally. We talk about systemic racism because personal guilt is both conceptually inadequate and beside the point. Whites, who tend to enjoy certain privileges in society—however unevenly, as everyone acknowledges—over Blacks and other racialized groups, do have a special responsibility for speaking and acting against systemic white supremacy, but this has nothing to do with guilt, sin, or accusation. It is not dissimilar to the common notion that the rich have a special responsibility to society not just for charitable reasons, but because they have enjoyed at least some advantages they didn’t earn.

Liberal fragility

The Economist sets up a contrast between classical liberals like itself (despite sometimes referring to itself merely as “liberal”) and the “illiberal left.” But in drawing this contrast the Economist loses coherence.

Superficially, the illiberal left and classical liberals like The Economist want many of the same things. Both believe that people should be able to flourish whatever their sexuality or race. They share a suspicion of authority and entrenched interests. They believe in the desirability of change.

However, classical liberals and illiberal progressives could hardly disagree more over how to bring these things about. For classical liberals, the precise direction of progress is unknowable. It must be spontaneous and from the bottom up—and it depends on the separation of powers, so that nobody nor any group is able to exert lasting control. By contrast the illiberal left put their own power at the centre of things, because they are sure real progress is possible only after they have first seen to it that racial, sexual and other hierarchies are dismantled.

Classical liberals believe people of all kinds should be able to flourish, but “the precise direction of progress is unknowable.” Classical liberals believe no person or group should be “able to exert lasting control,” but the left is illiberal because they believe progress requires that social hierarchies be dismantled. It goes without saying that social justice movements can apparently never be “spontaneous” or “bottom-up.” 

Can people flourish despite social inequalities, or not? Should liberals dismantle social hierarchies, or not? Do such hierarchies and inequalities even exist? Indeed, The Economist takes the rising affirmation of “once fringe” views—that “racial discrimination is the main reason why many black people can’t get ahead these days” and that black disadvantage in America has unique contours that make it inadvisable to lump it together with other minority groups—as evidence of rising illiberalism on the left. 

The only way to make sense of this is to suppose that worrying too much about social inequalities is either a cynical play for power (“the illiberal left [puts] their own power at the centre of things”) or simply inherently illiberal. The title of one of these articles gives the game away: “Left-wing activists are using old tactics in a new assault on liberalism.”

The liberal potential of antiracism

I urge The Economist to reconsider this defensive posture and explore instead the liberal potential of social justice activism. This will require The Economist to broaden its outlook beyond classical liberalism, as it has already done along issues related to the welfare state. Social liberalism has a long and venerable history, stretching back to Adam Smith himself, who vocally opposed slavery and imperialism, and paid acute attention to the imbalance of power between workers and masters. John Stuart Mill was not only something of a liberal socialist, with the help of his wife Harriet Mill he excoriated patriarchal privilege, bringing feminism within the liberal domain. Eminent scholars like Amartya Sen, Martha Nussbaum, and Elizabeth Anderson carry on the social liberal tradition today.

Of course, not all antiracist and social justice advocates think of themselves as particularly liberal. Consider the work of Deva Woodly, a student of social movements who has drawn on the liberal ideas of Sen. She describes the political theory of the Movement for Black Lives as a “politics of care” combined with “radical Black feminist pragmatism.” This is a bit of word soup but it means a politics that focuses on meeting the needs of everyone (politics of care), expanding the political imagination (radical), leveraging the perspectives of the oppressed (Black feminism), and focusing on goals achievable within democracy (pragmatism). These are not illiberal ideas that liberals should guard against, but nonliberal ideas that can quite possibly be adopted and translated into more familiar liberal language.

The title of Heather McGhee’s brilliant book, “The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together,” dispels at the outset the common charge from liberals like The Economist that antiracism factionalizes and polarizes us. McGhee convincingly describes how even policies that advance the material interests of everyone and initially enjoy wide support are often racialized to the point of political untenability. McGhee, again, doesn’t appear too interested in the liberal moniker, but her book is an earnest, detailed map to achieving a liberal harmony of interests in our racially and ethnically diverse society.

Charles W. Mills, on the other hand, makes a bold point of embracing liberalism. In contrast to The Economist ’s preferred method of assuming a mostly just society and hushing complaints of racial inequality, Mills asks what liberalism would require if our society truly has been stratified by 400 years of racist oppression, beginning with slavery but proceeding through the racist terrorism of Jim Crow and beyond red-lining to racialized mass incarceration and other inequalities persisting today. Mills’s “Black radical liberal” project contends that mainstream liberal theory is fundamentally disoriented. Liberals, ostensibly concerned with freedom and equality of all persons, should not assume society is mostly just with some racist aberrations and build theories on that edifice. Instead we should look hard at the most oppressive examples of unfreedom and inequality that we see around us, and build theories (and activism) around these. 

By engaging with these antiracist thinkers with an open mind instead of juxtaposing them with cynical critics like James Lindsay and Helen Pluckrose, The Economist would not forego the ability to criticize antiracists and woke excesses. Indeed, The Economist could more credibly argue against the scourge of campus disinvitations and dubious proposals like police abolition if they considered racial injustice a more serious obstacle to liberal ends than antiracist activism. By all means, skewer Ibram X. Kendi for his genuinely illiberal “Department of Anti-racism,” (though not before giving the idea its due). And offer a better alternative to the insistence that racial capitalism is the only possible capitalism by definition. The Economist could do worse than to start with the feminist case for capitalism of Ann Cudd, another liberal philosopher who takes oppression seriously

I hope I am not written off as an illiberal leftist. I consider myself a liberal, and I write and edit for a liberal publication that takes a broad umbrella view of the liberal tradition that would certainly include writers from The Economist . I meant it when I said I want The Economist to do well, so I close with a challenge and request from this loyal reader. Assemble a special report on the liberal potential of antiracism. Engage with the likes of Woodly, McGhee, and Mills, as well as organizations like the Movement for Black Lives with an eye toward seeing not what liberalism can teach social justice movements—this has been thoroughly covered—but what liberals can learn from social justice.

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The Liberal Democratic Socialism of John Rawls

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Welfare state capitalism also rejects the fair value of the political liberties, and while it has some concern for equality of opportunity, the policies necessary to achieve that are not followed. It permits very large inequalities in the ownership of real property (productive assets and natural resources) so that the control of the economy and much of political life rests in few hands. And although, as the name ‘welfare-state capitalism’ suggest, welfare provisions may be quite generous and guarantee a decent social minimum covering the basic needs, a principle of reciprocity to regulate economic and social inequalities is not recognized…This leaves…property owning democracy and liberal socialism: their ideal descriptions include arrangements designed to satisfy the two principles of justice.

John Rawls, Justice as Fairness; A Restatement 

The conflict between liberalism and socialism is an unusual one. Both are fundamentally modernist doctrines nominally committed to the ideal of moral equality and liberty for all. They both conceive the best kind of human life as one where individuals are cooperatively able to flourish without their distinctiveness disappearing through the imposition of traditionalist and parochial mores. But liberalism and socialism have often differed dramatically in their visions of how to achieve these ends.

The more possessive individualist stains of liberalism—from Locke through Hayek—contended that only a market society which employed legal coercion to enforce respect for expansive property rights and insulated the market from state and democratic pressure was legitimate. By contrast socialists have been far less committed to property rights, and have called for everything from state regulation to outright seizure of whole industries or all industries. In many contexts the more democratic and experimentalist approaches were very successful; as with the Nordic model of welfarism and high levels of unionization. In others, as with the command economies of the totalitarian states, it was a disaster. 

One author who was surprisingly sensitive to bridging the gulf between the two doctrines was John Rawls, often called the greatest political philosopher of the 20th century. Whether such hagiographic appraisals are true, Rawls was undoubtedly the most important liberal philosopher. His 1971 opus A Theory of Justice is widely seen as rejuvenating an interest in liberal political philosophy, resuscitating deontology and theories of the social contract and (for a time at least) putting utilitarianism on the defensive. Beyond these academic innovations, what was interesting about Rawls was how firmly he connected a commitment to liberalism to a moral requirement to material equality and care for the least well off. Indeed Rawls thoroughly dismantles many of the arguments for possessive individualist liberalism to argue that any principled liberal could only support material inequalities if and only if they could be shown to work to the benefit of the least well off. Claims about “natural rights” to property, or that wealth can gradually be allowed to trickle down to the poor if enough of it is produced, are not sufficient as far as he’s concerned. While Rawls initially interpreted his philosophical position as providing ammunition for defenders of the welfare state, he became more radical as time went on and the vulgarities of the Reagan-Thatcher neoliberal counter-revolution grew increasingly apparent. In his last book Justice as Fairness: A Restatement Rawls concluded that only a property-owning democracy or what I have also called a “liberal socialist” regime could satisfy liberal principles of justice.

The basics of Rawls’ philosophy 

Rawls was one of those rare beasts: an academic superstar who rejected the limelight and genuinely modeled a life of quiet contemplation and intellectual rumination. He was also, appropriately enough for a man who centered his theory of justice around “fairness,” a notably even-handed thinker. When reading him, one is often bored by Rawls’ tedious insistence on engaging with virtually every possible criticism of his work. How meticulously he feels compelled to treat every objection charitably, and tinker with the architecture of his system accordingly. This is why his deepening radicalism, or as William Edmundson put it Rawls’ “reticent socialism,” is temperamentally surprising.  But I regard it as a testament to the integrity of Rawls’ moral vision that he recognized how his thought required such a fundamental commitment to material egalitarianism and was unafraid to push it even at the height of the neoliberal era. 

Rawls’ philosophy can be summarized by the old evangelical maxim that “there but for the grace of God go I.” Rawls himself had more than a passing understanding of this wisdom, losing two brothers at a young age and later fighting on the Pacific front in the Second World War. There he was struck by the arbitrariness of war’s horrors; how the virtuous and the cruel alike were struck down without discernible reason. The rest of his life was relatively uneventful, marked largely by the publication of A Theory of Justice in 1971 which summarized decades of thought on political philosophy and put forward his own account of “justice as fairness.” Rawls spent his remaining decades refining the arguments of Theory and responding to a library’s worth of criticisms, with his most sustained discussion of “property owning democracy” and “liberal socialism” appearing in Justice as Fairness: A Restatement shortly before he passed away in 2002. 

It is important to remember that Rawls begins by asking us to consider a collection of free individuals of equal moral worth. They are neither angels or devils, but self-interested persons who hold to different comprehensive visions of what constitutes the good life. Rawls asks us to consider a thought experiment entered into by these individuals which seeks to model the basic structure of the traditional social contract, but acknowledging its ahistorical character as a heuristic device. Parties to the contract would reason behind a “veil of ignorance” in the “original position,” where they would remain self-interested but would be denied knowledge of their individual biological and social circumstances. No one would know if they were actually a man or a woman, gay or straight, trans or cis gendered, black or white, rich or poor and so on. 

Rawls gives many arguments for why this seemingly abstract way of thinking about parties to the social contract is the right way to go, but the ideal is to capture something akin to Kant’s pure “good will” that seeks to determine the moral law. But rather than being compelled to do so by Kantian “duty,” the constraints imposed on knowledge of their real conditions would require parties to the social contract to ask what society ANY individual would feel it was safe and just to be a part of. After all, none of them could tell whether they’d wind up being a rich white male living in New York or a poor trans woman of color working at Walmart. 

Given this, we’d want to ensure either person would endorse the kind of society established by the social contract. Rawls thinks this is also crucial since liberal principles require that citizens regard institutions and laws as reflecting their interests, thereby requiring all endorse them as part of an “overlapping consensus.” Merely insisting that people accept, say, possessive individualist capitalism because it would produce high levels of wealth in the long run is insufficient if some parties to the social contract would lose out and so regard the system as unfair. 

Rawls argues that the parties would compare and contrast the most appealing principles of justice that could be chosen to order society. He notably argues that we’d reject the classical liberal vision of possessive individualist, market society. This is because, as he put it in Justice as Fairness, it “secures only formal equality and rejects both the fair value of the equal political liberties and fair equality of opportunity. It aims for economic efficiency and growth constrained only by a rather low social minimum.” 

Instead he argues that they would choose the two (really three) principles of “justice as fairness,” ranked in lexical order or priority. The first is the recognizably liberal principle that “each person [have] the same indefeasible claim to a fully adequate scheme of equal basic liberties, which scheme is compatible with the same scheme of liberties for all.” The second is that “social and economic inequalities are to satisfy two conditions: first, they are to be attached to offices and positions open to all under conditions of fair equality of opportunity; and second, they are to be to the greatest benefit of the least-advantaged members of society.” After their selection of these principles the veil of ignorance is lifted, and the parties to the contract enter into the society they have created as citizens governed by the principles they’d have chosen.

Rawls’ arguments for liberal socialism

What makes Rawls’ liberalism powerful is how, following predecessors like fellow liberal socialist J.S. Mill, he connects arguments for both high levels of individual and political liberty and material equality. Rawls acknowledges that demanding strict material equality would disincentivize economic activity, and benefit no one. This is why inequality is justifiable; something which even the Marx of Critique of the Gotha Program would have no trouble acknowledging. But Rawls insists that requiring material equality between moral equals is the baseline from which deviations have to be justified. And even then it is only justified by showing how any such deviations will ultimately benefit the least well off. While some “bleeding heart” libertarians have tried to argue an even more free market society would satisfy this condition, the late Rawls himself argued it could not. Only a “property-owning democracy” or liberal democratic socialism would be consistent with justice as fairness. 

In A Theory of Justice Rawls makes two main arguments for his (softer) egalitarian position. The first is that, not knowing who they would end up being, rational parties in the original position would choose to reject possessive individualist markets because they’d not know if they’d be the winners or losers in such a competitive society. Any sensible individual would want to at least ensure that if they wound up losing in a competitive setting, their interests would be very well cared for. The second argument is far more compelling. Rawls points out that many people who defend possessive individualist capitalism do so on the basis of rather vague, even crypto-theological views of merit. They argue that those who get ahead in market society deserve what they have because they worked harder, were more talented, or even happened to be more virtuous (a rather strange argument when you think about the Enrons, Bernie Madoffs and Donald Trumps of the world). 

But Rawls points out that in fact most of the reasons people fall ahead or behind have little, if anything, to do with our individual merits. They are “morally arbitrary” at best, and we could even go further and suggest the project of overt historical prejudice and tyranny and worst. Firstly, many people are initially disadvantaged by the arbitrary distribution of “natural talents” that results from a genetic lottery. Some are born with serious physical disabilities, while others are born with a predisposition for athletic excellence. Secondly, people may endure serious trials growing up within difficult social circumstances which inhibit their life prospects. These can range from having an inferior diet and education, to living in sub-par housing or even having parents unable or unwilling to read to them. 

Later in life, it is no coincidence that more students at Ivy League institutions come from the top 1 per cent than the bottom 60. And thirdly, even if we have natural talents we had the social opportunities to develop, being able to profit from those depends a great deal on them being valued by society. If I happen to have a genetic gift for playing hockey and practice 50 hours a week, that will only turn out to profit me if I happen to be born in Canada rather than South Sudan. Taken all together, the moral arbitrariness and historically determined injustices affecting marginalized groups gives the lie to the possessive individualist account of merit in a market society. 

Not only is a meritocracy morally undesirable, it could never even exist given the enduring reality of moral arbitrariness. Consequently Rawls thinks it is long past time we abandon it as another quaint mythology, rather like the Medieval notion that God appointed lords and kings to their place because they happened to be more righteous and effective. Instead of asking what do unequal people deserve, we should ask what it required for those whose lives are just as real as our own to thrive? Critics like Thomas Sowell contend that this is fanciful; a yearning for the state to achieve a kind of “cosmic justice” between fundamentally unequal people. Rawls’ counter claim is that inequality is indeed both natural and socially prevalent. These are simply the facts of our world today. But what makes a society just or unjust aren’t the stark realities it faces, but how it deals with them:

We may reject the contention that the ordering of institutions is always defective because the distribution of natural talents and the contingencies of social circumstance are unjust, and this injustice must inevitably carry over to human arrangements. Occasionally this reflection is offered as an excuse for ignoring injustice, as if the refusal to acquiesce in injustice is on a par with being unable to accept death. The natural distribution is neither just nor unjust; nor is it unjust that persons are born into society at some particular position. These are simply natural facts. What is just and unjust is the way that institutions deal with these facts. Aristocratic and caste societies are unjust because they make these contingencies the ascriptive basis for belonging to more or less enclosed and privileged social classes. The basic structure of these societies incorporates the arbitrariness found in nature. But there is no necessity for men to resign themselves to these contingencies. The social system is not an unchangeable order beyond human control but a pattern of human action.

In Justice as Fairness Rawls doubles down on the egalitarian dimensions of this argument, by adding a further and intriguing twist. He argues that not only would possessive individualist classical liberalism and even welfarism be inadequate in how much attention they paid to the last well off. They would be politically illegitimate since a concentration of property in the hands of a wealthy elite would have the effect of ensuring political and economic power rests largely in their hands. This would result in the state ultimately working in their interest first and foremost, rather than for all. Let alone the least well off, who would have very little political and economic power given their situation at the bottom of an unjust social hierarchy. They would not enjoy “fair value” from their “equal” political liberties, since in reality some people’s “liberties” would matter a great deal more than others. 

Post-modern conservatism and liberal democratic socialism 

While Rawls ruminations on this topic are provisional and not especially sophisticated compared to other theorists of power in representative liberal democracy—from Karl Marx through Judith Butler—he is undoubtedly correct. Many studies have shown how, especially since the conservative counter-revolution against egalitarian liberalism that began in the 1980s, the state and international institutions have become increasingly responsive to the top and simply ignore the needs of people at the bottom. This has also contributed to a remarkably ugly culture of not just avarice and one-dimensional acquisitiveness, but competitive disdain. 

Nowhere is this better illustrated than with post-modern conservatism, which cast vast swathes of the population as “losers” who were undeserving of either respect or rights to political representation. In this we see the vulgar culmination of a neoliberal logic of competitive hierarchialization, where those who have succeeded are regarded as entitled to both what they have and to expand it and those who failed are to feel shame and self-hatred for their alleged failures. 

Far from acknowledging the arbitrariness of life, let alone long histories of racial, sexual, and gender injustice, our society tends to make those who fell behind through no fault of their own feel guilty over the material consequences of their own oppression. It is hard to think of a much more unjust cultural disposition, and the fact that it has become ubiquitous enough to command the loyalty of many is a sign of just how far from the liberal egalitarian ideal we’ve allowed things to slip. 

Rawls felt that transitioning towards a property-owning democracy—where ownership of human capital would be widespread—or liberal democratic socialism was the only just alternative to such a sorry state of affairs. Which we should choose would be determined by whether property-owning democracy or liberal democratic socialism better satisfied the two principles of justice. I would argue that the latter is indeed preferable, though with some major qualifications from Rawls. In the interest of space and the reader’s time I’ll limit myself to two especially germane observations. 

The first is that while Rawls admirably became more sensitive to the “democratic” side of the liberal argument, much of his work still remains too vested in realizing justice as fairness through elitist institutions. This was especially true of his veneration of the American Supreme Court, which as critics have pointed out was often idolized by US liberals who fixated on the all too brief glory days of the progressive Warren court. 

In fact the Supreme Court has quite consistently gone to bat for conservative and hierarchical policies, which is to be expected from an institution firmly wedded to elite culture and practice. Consequently liberal socialists should put their faith in majoritarian and civil society advocating for egalitarian and democratic reforms, rather than courts (a mistake I also made once upon a time). Indeed, successfully building liberal democratic socialism will mean working hard to restore the dignity of workplace democracy and cooperative labor unions to cultural pride of place after decades of conservative attacks. 

Secondly, Rawls’ vision was all too fixated on the nation-state level, with his sub-par book The Law of Peoples being a minor contribution to the field of cosmopolitan theory. But if there is anything progressive liberals can learn from neoliberal internationalism, it’s that the rest of the world matters. If liberal socialist regimes are going to survive and thrive it will be necessary to construct an international legal architecture which advances concerns for democratization and universal human rights, including economic, social, and cultural rights, while marginalizing the anti-democratic influence of capital. This would obviously be a titanic project that warrants an article of its own. But much of the skeleton is already in place circa the twinned covenants on civil and political rights and economic and social rights respectively. Empowering international institutions to take them more seriously would be a good place to start. 

Rawls knew that even a liberal socialist society would not be some kind of utopia, in the cheesy sense of life being perfect for everyone. Life will never be perfect, since all of us are very imperfect. Easily dissatisfied, resentful, and all too often vacillating between petty self-regard and grandiose delusion. But it is precisely because of our imperfections that we should crave a society where power and wealth are more evenly distributed, and consequently not allowed to concentrate in the hands of those who are no better equipped than anyone else to wield them.  Liberal socialism would not be perfect, but it would be just. And that is more than enough. 

Featured Image is Golden Lady Justice, Bruges, Belgium, by Emmanuel Huybrechts

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LC Podcast #4: Adam Rust on the California Gubernatorial Recall

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The candidates in California’s gubernatorial recall election are entertaining and frightening, but the process itself is the freak show (and the state is on fire). Adam Rust reports from smoky San Jose for the fourth episode of The Liberal Currents Podcast.

 

Featured image is California Wildfires: The Holy Fire At Lake Elsinore On August 9, 2018 by Kevin Key.

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The Purpose of an Economics Education: On Diane Coyle’s Markets, States, and People

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In designing a curriculum or writing a textbook, the primary considerations have to be, first, to whom is the material addressed, and second, what it is hoped they will do with the information. The second question is important as it has two basic answers: some courses are designed to impart knowledge that students will eventually apply in a personal or professional context. These tend to be electives or courses taken as part of a particular major—electromagnetics for example will be important for an electrical engineer, anatomy for a surgeon. Many others, however, fall into a more difficult category—courses that are taught simply because we think most students ‘ought’ to know them. 

In the US at least, social science courses have long been justified by the philosophy of Benjamin Rush, who said of education at the outset of the US republic that “In a state where every citizen is liable to be a soldier and a legislator, it will be necessary to have some regular instruction given upon the ART OF WAR and upon PRACTICAL LEGISLATION.”  Thankfully, most Americans are no longer liable to be soldiers—but every American is called on to vote or not vote on representatives and often directly on policies that will impact the country. For that reason, a basic understanding of economics is important because eventually every person will be asked for their input on economic questions; however, too often the texts and curricula taught to econ students are unuseful and, with its oversimplifications, worse than no knowledge at all. Relegating ‘economics for public policy’—the kind of course that truly delves into the implications of economic policy decisions—to a niche designed for a small section of students who will be directly involved is a mistake. Texts used to introduce economic concepts need to be selected to ensure that they provide a balanced introduction to the most salient considerations of economic policy – since these are precisely the sort of considerations every student is going to be asked to weigh when evaluated a proposal like a higher minimum wage or utility deregulation.  Diane Coyle’s Markets, State, and People provides a good example of what such a text should look like. 


As a private tutor in economics, I’ve gotten the chance to see economics courses ranging from high school classes aiming to meet minimum state standards to undergrad courses in selective universities. The vast majority suffer from similar problems—an overemphasis on neat models with few unknowns and straightforward computations. This is particularly true of Advanced Placement (AP) level courses but is a tendency in most classes because such questions are satisfying for students and easy to grade for instructors. A sample problem might assume supply and demand lines for labor, with a constant slope and known quantities. Given this input, students are taught that they can calculate a dollar figure for the deadweight loss created by a given minimum wage. It could be a valuable exercise, to be sure—understanding at least the concept of deadweight loss and unanticipated outcomes—and getting a neat dollar figure at the end makes it an easy exercise to assess while also making the discipline as a whole look scientific.  But it builds in dozens of assumptions that are only explained towards the end of upper level classes—that the labor market is perfect, that demand for labor is unaffected by the income of minimum wage workers (an absurdity obvious to anyone who has actually noticed the clientele of many businesses that employ such workers), and many others.

This oversimplification is of course not ideologically neutral—the AP curriculum demands students understand that ““Government intervention in a market producing the efficient quantity through taxes, subsidies, price controls, or quantity controls can only decrease allocative efficiency”, and rare is the class that pays adequate attention to the key qualifier in a market producing the efficient quantity. Some state level standards are even more naked ideological; Texas state standard for example require teaching the benefits of a free enterprise system over other economic organization.

The best economics courses of course break outside these constraints—working to give students some understanding of market failures like externalities and give students some idea of how common monopoly and monopsony power are in modern markets. Even here though instructor run into two problems—for one, such cases are often treated as exceptions to the rule; after three months of assuming every good is rivalrous and excludable, a few examples at the end of the course don’t really shake the overall message that markets should fundamentally be trusted to manage themselves. The second problem is that they are treated with the same certainty as problems assuming efficient markets—in other words, air pollution is assigned X level of negative externality, which can be expressed as a dollar figure and corrected for with an appropriate tax. I’m guilty of this of course as well—though it’s seldom a problem in their books, I like to make my students calculate the *increase* in employment given a minimum wage in a labor market dominated by a monopsonist (an employer who buys all the available labor in the market).  The exercise is important to show a necessary complication to their basic understanding that ‘price floors reduce market efficiency’, but at the same time I’m still giving them precise figures and a neat graph to work with, treating economics essentially like applied coordinate geometry.

For economics curricula poisoned by this problem, Diane Coyle’s survey Markets, State, and People provides a powerful if incomplete antidote. Incorporating work like this earlier into economic education would help students prepare to be informed citizens and voters far better than the current most common curricula. Coyle’s book is lively and interesting enough to be read enjoyably outside of an academic context—I’d recommend it to anyone who wants to understand the ‘big picture’ of economic debates about the role of government and definitions of welfare. But it is marketed as a textbook for economics and policy courses, and to understand this use it’s important to look at the current state of economic education—because ultimately, not only does the book provide a useful text for these courses, but it demonstrates the need to more widely teach these concepts to supplement the economic principles currently taught to most students. 

A book like Markets, State, and People not only serves to offer an introduction for such students, however—it could make a valuable addition to any economics education, and indeed is a shining example of the sort of text that should be assigned alongside traditional macro and microeconomic textbooks. Coyle’s work not only succeeds on its own terms, but shows the possibilities for expanding the use of these kind of texts outside their current narrow confines.

The first chapter of the book alone provides precisely the context students need to take the graphs and tables in a typical economics course with a grain of salt. Coyle opens with a discussion of the many assumptions that are made to justify the theory that markets are inherently efficient. Of particular importance are the assumptions of symmetric information, rational consumer behavior, and rival goods (goods that cannot be simultaneously used by more than one consumer). The last stands out, as a particular brand of non-rival goods—goods that are nonetheless excludable, so called toll or club goods—are gaining an increasingly dominant position in the modern economy, but most students taught only up to state econ standards are not in a good position to understand them.

 A standard curriculum like the AP, which teaches that “Private goods are rival and excludable, and public goods are non-rival and non-excludable” and largely leaves it at that, cannot possibly hope to describe a company like Apple, which almost exclusively creates non-rival goods (patents, designs, and programming) and then contracts out the creation of their rival components (the physical hardware).  Indeed, from tech companies like Apple or Microsoft, to pharmaceutical giants like Pfizer or Johnson & Johnson, to media giants including Disney and NBC, many of the most profitable firms in the US could be described as producing primarily non-rival goods.

Dealing simply with rival and nonrival goods with the depth that Coyle does is an enormous improvement over the economics understanding students are left with if they don’t pursue upper level economics. The prominence of non-rival goods upends the initial narrative taught to students about diminishing marginal return. Unlike Tesla trying to increase its production of cars, Microsoft can sell more copies of Office for almost no additional cost, certainly without increasing the marginal cost per copy. As the world currently races to produce and distribute as many vaccines as possible, it could be that Pfizer is taking on increased marginal costs to ramp up production, but few would go so far as to say that in the long run Pfizer would make more profit selling fewer vaccines than more for the same price, and yet much standard economics texts generally teach that such a quantity exists—it is critical to explaining why multiple firms would continue to engage in monopolistic competition.   

Coyle’s discussion especially of digital commons is refreshing also in its emphasis on social norms in dictating the behavior of markets—a stark contrast to books that treat humans essentially as homo economicus, or policy texts that focus only on the role of formal government action in dictating property rights. She explains that “The role of assumptions about norms or conventional patterns of behavior in defining property rights is often overlooked…If my neighbor’s fruit tree drops apples into my garden, we will both assume I can keep them, and she won’t call the police if I turn them into a pie. In the digital world, the early norm was that content was free, but over time businesses have made a land grab—a bit like the enclosure of the physical commons.” This launches an extended discussion of how social norms, not just strictly rational behavior or interest seeking, play in the design of markets or methods of production/distribution that substitute for them. It is a discussion which escapes the common binary of ‘markets vs state’ and instead hints at the reality that both markets and that state arise out of and are to an extent constrained by socio-cultural beliefs.

The role of history and cultural beliefs in shaping economic assumptions and policy is another strength of the book.  Economics does not happen in a vacuum, and the narrative descriptions Coyle includes of how the Great Depression, 1970s stagnation, and other major events worked to shape economic understandings and policies help provide a more nuanced understanding of why markets and states interact differently in different places. The discussion goes well beyond most cursory summations of economic intellectual history, which tend to focus on fiscal and monetary policy (featuring Smith and Ricardo as the patriarchs of the discipline and Keynes and Friedman as the main protagonists), and gets deeper into views on government ownership of industry, regulation of monopolies, and other topics rarely given adequate discussion. This level of background also helps Coyle compare regions, specifically the US, UK, Continental Europe, and East Asia—and explain why their economic systems have evolved differently while avoiding a setting up one as the default or natural system against which others are contrasted. 

These shifts in policy also provide an entry point for discussing government failures—Coyle introduces the innovations of public choice theory and provides a frank description of where government, just like markets, can operate inefficiently and to the detriment of the people it’s seeking to assist.  The role of state-owned or heavily regulated firms is another often overlooked component of economic study that Coyle covers effectively. 

This focus on regulation and state ownership, in fact, to an extent crowds out a more extensive discussion of taxation. On the one hand, this is welcome—too often the role of government in the economy, especially in designing the distribution of wealth therein—is reduced to a series of decisions about taxing and spending.  Coyle shows how regulations, particularly those aimed either at creating competition in monopolistic economies or pushing back against the inequality inherent in natural monopolies, can have a dramatic income on outcomes for both firms and customers. Particularly valuable here is here delineation between firms that compete “in” the market and firm that compete “for” the market. Too often market advocates will argue that Facebook, for example, is not a natural monopoly, since it had to dethrone the previously dominant MySpace, but Coyle explains well that simply having to compete for control of the market does not bring about the same impacts as competition within the market, especially in a case where network effects (a phenomenon entirely ignored in other introductory econ courses) are strong. 

On the other hand, Coyle’s understandable decision not to dive into the economics of taxation does leave the book with a few unfortunate simplifications. While space is devoted to Pigouvian taxation in theory and practice, the overall message on taxation is that “Taxation (except in the rare case of Pigouvian adjustments for externalities) creates inefficiencies and, other things being equal, therefore tends to reduce the economic growth rate.” I would argue that externalities that can appropriately be combatted with taxes are not at all rare—we live in a world were the very core of most economies is electrical generation powered by fossil fuels, which are creating a potentially disastrous externality in the form of global climate change and killing millions in the meantime through preventable ailments.  A carbon tax scaled to the true size of this problem would be, at least in the short term, absolutely enormous. 

Aside from Pigouvian taxes (strictly defined), there a is a strong case, made by economists including Joseph Stiglitz and Noah Smith, that taxing land values does not increase inefficiency, because the quantity of land available cannot be diminished as a result. Indeed, such a tax could lead to greater efficiency by discouraging speculation and weakening the power of rent seekers. Considering only Pigouvian taxes on carbon and the special case of land already leads to the conclusion that a very substantial portion of the economy in developed states (in the US, privately held land is valued to be at least $15 trillion, and oil and gas companies worldwide are valued at over $4.5 trillion) is in fact not subject to this broad rule about taxation and inefficiency. Moreover, it is possible, as argued by Emmanuel Saez and Thomas Picketty, that the principle goes beyond simply land and actually covers most very high incomes. If the vast majority of income above a certain amount is in fact generated by rent seeking, then higher taxes will indeed reduce incentives, but this reduced incentive will actually have the salutary effect of limiting the rewards of rent seeking and perhaps directing those efforts to other, more productive uses. 

These discussions on taxes, however, probably merit a textbook of their own; Markets, State, and People is not intended to be a book primarily about fiscal policy and the decision not to delve into that topic is a reasonable one. The only concern that arises is that the very summary view of taxes leaves readers with the same one-dimensional view of them that a traditional economics text gives of price ceilings or floors. Overall, on the topics of its actual focus, the book performs admirably.

The only other ‘weakness’ of the work has nothing to do with the text itself, but that it will sadly not be read by nearly the variety of students that need to read it. Coyle provides a welcome focus on the importance of social norms and cultural beliefs in shaping how markets or non-market systems of allocation work in practice—the necessary implication of that fact is that an economically sophisticated population is much more likely to achieve the kinds of solutions we need. Books like Markets, State, and People need to be incorporated not just into specialized courses for those few students seeking policy career, but as part of a the basic civics education required of high school students. Society continues to encounter both old and new problems for which economics can provide guidance—the question of de-carbonizing the economy, or the acute effort to encourage vaccination. But even the best economic recommendations are likely to meet resistance fatal to their efficacy if the population as a whole lacks an understanding of their economic rationale.

The great work Coyle has done here, however, would go a great way to addressing that problem.  As fun as it is to work with graphs and calculate with entirely imaginary precision the impact of a minimum wage on societal welfare, our economic education strategy needs a rehaul. A work like Markets, State, and People should be standard to supplement – or perhaps even precede – students’ introduction to those omniscient line graphs, as improving students’ understanding of the concepts in this work is critical if we want to maintain a government that is at once economically competitive and responsive to the population. 

Featured Image is The Prima Macchina for the Chinea of 1770: An Roman Building for Commerce, by Giuseppe Vasi

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21 days ago
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LC Podcast #3: Adam Gurri on Institutional Provincialism

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Big bureaucracies, powerful parties, and other supposed bogeymen aren’t unique to the American political scene—they have counterparts in peer democratic countries. Both here in the third episode of The Liberal Currents Podcast (its real name) and in a recent essay, Adam Gurri argues that contemporaneous development of similar features in different polities indicates that comparative analysis should be central to assessments of both American history and potential solutions for today’s problems.

 

Featured Image is Ten Thousand Miles From Tip to Tip.

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22 days ago
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