Friday, February 21, 2014

Jean Valjean, Meet Javert

I am going to give my dear friend Barry Fagin the benefit of the doubt and hold the inherent limitations of newspaper commentary responsible for the sweeping generalizations found in his most recent column.  I assume Dr. Fagin does not really mean to suggest any of the following:  that all human civilizations were miserable and squalid before Western civilization and property rights came along; or that anti-poverty programs "enshrine envy"; or that those who favor a modest social safety net necessarily disapprove of the profit motive and want to kill economic incentives; or that without Warren Buffett being free to make $32.8 million a day in non-productive rent-seeking and arbitrage ("absolutely fantastic") we would all be living in caves and eating the flesh of wooly mammoths.

But it is hard to know for sure.  The  seduction of ideologies like libertarianism (or 20th century communism, for that matter) is the easy and systematic answers they provide to complicated problems.  You really do become a hostage to your simplicity. Follow this one rule -- thou shalt always maximize freedom -- and the ideal society inexorably emerges.  Question this principle and you embarrassingly fail to appreciate the leisure time the producers have given you to loaf around and whine about capitalism!

When the rules are few and simple, everything sketches out beautifully on the chalkboard.  A favorite assumption of the classical economists is "all other things being equal." Of course, all other things are never equal in human affairs.  The Humanities are not a chemistry lab.  This is why economics is rightly called the "dismal science" and why utopia is not one of the options.

Here is a small sample of things the libertarian charts and formulas assume away:

First, economic power is always translated into political power – a phenomenon called "political capture." It happens under capitalism and communism.  In effect, the wealthy tend to rig the system to grant themselves subsidies, lax regulation, immunity from prosecution, and so on.

Second, and closely related, is the problem of "externalities." This is a fancy academic term that simply describes the way companies push the costs of their businesses (often pollution) onto everyone else.  It is economically rational for profit-seeking corporations – in a free market – to attempt to get away with this.  It's capitalism on the revenue line items, and socialism for the expenses.

Third, the efficient deployment of material resources to their supposed highest and best uses is not necessarily the greatest of all human aspirations.  Material progress is unquestionably good.  But it is not the sole end of human existence.  Libertarian economic theory is expressly value-neutral.  It holds that only an elitist snob could believe humankind might benefit from a culture that openly declares its preference for Beethoven's “Ode to Joy” over "Smack My Bitch Up."  If utility-seeking consumers, ordering from the menu of choices offered by profit-seeking producers, give us a vulgar and dumbed-down culture of professional wrestling and junk food, how dare anyone complain (or even notice)?  Define "vulgar."  The market has spoken!

Fourth, other than references to "dumb luck," libertarians have almost nothing useful to say about generational privilege or the vestiges of racism and exploitation that still plague billions of people around the world.  Thanks in significant part to the libertarian-inspired dismantling of the post WWII settlement, social mobility and its cousin “equal opportunity” are largely mythical today.  Where you come from socio-economically counts infinitely more than Rothbardian notions of liberty in where you end up. Communities trapped for generations in cyclical economic serfdom need more than a copy of Hayek's The Road to Serfdom.

And that brings us to the libertarian's positively contemptuous attitude towards "fairness" (the derisive quote marks are Dr. Fagin's).  A desire for some modest fairness in economic outcomes -- say, CEOs making 100 times the average employee instead of 500 times -- gets lumped in with envy, rapine, sexual manipulation, and a host of other primal human tendencies that are best left to the campfires of our brutish prehistory.  Our innate altruism worked fine when we all had to share the same mammoth carcass.  But it is obsolete now because a rising tide supposedly always lifts all boats. (Dr. Fagin seems unaware of what has happened to the working class in the past 30 years of financial deregulation, globalism, and union busting.  Or maybe he thinks the problem is not enough libertarianism.)

We know that our ingrained sense of fair play precedes any exposure to religion or formal ethics instruction.  It can be observed in small children and even in primates.  It is the essence of the Golden Rule found in virtually all ethical systems.  Except, apparently, libertarianism which indicts this basic impulse on charges of being "unenlightened."  This is the dead end to which slavish allegiance to lofty principles leads you.

A democratic society cannot long survive the egregious levels of income inequality that are developing in America today.  Many boats are sinking, Dr. Fagin. (We tend not to notice this in our relatively affluent community that benefits hugely from government subsidies – i.e., our blue-chip military installations.)  If things keep heading in this direction, the shovels and pitchforks will come out – except, when they do, they will be semi-automatic rifles and Glock pistols.  Maybe that's merely a "pragmatic" reason for spreading it around a wee little bit better.  But the Romanovs probably wished they had acted more pragmatically as they sat in that dreary basement in Ekaterinburg, dressed in their royal finery, wondering how things were going to turn out for them.

The libertarian purist will tolerate no such pragmatism.  Once more unto the breach!  We must hold fast to our principles and harshly punish the pauper who steals the bread crumbs he feeds to his child.

Jean Valjean, meet Javert.