Saturday, October 1, 2011

The Epic Battle: Markets versus Governments

I spent this morning following a link that started on Eschaton, led me to Hullabaloo, and on to Corey Robin, where a comment by Taryn Hart landed me at a post on her blog, Plutocracy Files. There are further links on her page, but I've got enough in my head already. Anyway, this journey of a morning "catching up" illustrates what resources the Internet provides. What a feast!

Though I think I'm going to spend some time later back-filling from these various posts, Hart landed me on thinking about markets (whereas the morning's journey was about the nature of modern conservatism and whether it's conservative at all). What follows excludes markets in command economies, in which the government rules the market, e.g. China.

The ideological battle going on in the U.S. -- and I suppose in many parts of the globe -- is that of the market versus the government. First, let's assume that those taking differing positions are arguing in good faith, that is they believe what they're saying. Some honestly believe that the dangers of market failure exceed the dangers of government failure. Others believe the opposite.

Many policy issues can be viewed through this lens:
  • Healthcare is best solved by market forces, as against the position that healthcare is a human right requiring government intervention to guarantee that right.
  • Businesses and people, whether great or small, should suffer the judgment of the market and succeed or fail in order to avoid the moral hazard that would guard against making the same mistake over again, as against government intervention that lowers the cost of risk.
  • Public schools should compete on an even playing field with private schools by providing voucher programs that guarantee parental choice, as against the government guarantee of a quality, free education for all regardless of their condition or circumstance, with those eschewing this public offering free to pay for their private education.
  • The elderly should fend for themselves based on the strength of character they exhibited when they were younger regarding savings, investment, planning ahead, getting good enough insurance, and such, as against government providing a system whereby every citizen is required to set aside money to guarantee at least a marginal amount of support in old age.
And so on. Many more issues can be run through this model with varying degrees of applicability. One could say that unfettered access to guns creates a marketplace where a citizenry armed to the teeth is free to test the market by opening fire, prepared to accept the consequences, with criminal and civil courts amounting to market forces, along with, one would hope, ethics, moral code, empathy, and general common sense. One could even think of free speech and freedom of religion as being the marketplace of ideas and beliefs, oddly guaranteed by an essential governmental act, that of writing and institutionalizing a constitution.

The extent to which direction one goes can depend, among those of good faith, on one's coherent, reasoned view. If I believe that markets are efficient and will fix the price accurately, I'll want markets to decide. If I believe that markets are either not efficient or are too open to mischief, I might want a greater or lesser role for the government, in a (more or less) free society with consent of the governed.

We associate different political views, say conservative versus liberal, with how much one trusts or relies on the market or the government, and it's not a stretch to say that conservatives favor markets and liberals favor government. But the lines don't really cut that neatly. The national defense, for example, cannot be even remotely left to market forces for its shape. Oddly then, a conservative who favors a strong national defense will be, for that issue, in favor of a vigorous government spending vast amounts of a nation's capital with little or no market intervention. Conversely, liberals are on guard against government intervention and over-regulation in the world of ideas. Net neutrality -- an Internet unfettered by government regulation or market forces -- is a good example here. And though liberalism has always been placed on the ideological spectrum to the left and closer to socialism and communism, any liberal worth his salt would eschew command economies of any sort, acknowledging that government control can go too far.

So there you go. This is how I suggest we view our political debates. Of course, all I just put forth depends on honest, reality-based debate, and so herein lies a problem. We'll have to trust one another or be on guard when we spot people making stuff up. But that's a no-brainer when listening to political talk. Yet we have to have some point of reference in discourse. So I'll use the markets-versus-governments to frame much of mine.

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