Jonah Goldberg makes some very good points about human welfare and markets:

I’m no unmitigated fan of Wal-Mart, but it can’t be denied that Wal-Mart—and stores like it—have improved the lives of a lot of low-income families by making life’s necessities, and even its luxuries, affordable. Lightbulbs put a lot of candle makers out of business[*], but lightbulbs also made indoor lighting cheaper, safer, and more widespread. That’s a good trade.

Indeed, the market is the only thing that transforms luxuries into affordable indulgences. A low-end car today has features that the best Mercedes didn’t have a generation ago. Teenagers have phones that are more powerful than the computers that NASA used to put men on the moon. Indeed, even leisure has become democratized.

[…]

One last point. I love the Templeton Foundation and I think they do fantastic work. But questions like “Does the Free Market Erode Moral Character?” bother me a great deal. As opposed to what? Socialism? Socialism certainly erodes moral character. Some of the most alienated, selfish, deracinated people I’ve ever met were people who grew up under the yoke of Communism. Arthur Brooks’s work has definitively shown that large welfare states siphon off philanthropy and erode altruism.

Adam Smith’s case for the free market rested on the fact that it encouraged good character (as Yuval Levinrecently detailed), and I think Smith won that argument a long time ago. A more fruitful question, with deep religious and philosophical implications and precedents, would be “Does wealth erode moral character?” Debating that would still allow for some healthy attacks on the free market, because without free markets, wealth really isn’t something to worry about.

First of all, I know citing Goldberg round these parts will earn me a whole host of angry comments.  How dare I quote the man who wrote Liberal Fascism!?  He’s a fascist!  He’s not very nice!  He strawmans liberals!

I admit, I have a fondness for Goldberg which allows me to ignore our many points of disagreement long enough to point out the many smart, sensible things he does write.  And this is one of them.

[Read more →]

Following up a bit on my “General America” piece, I wanted to add that I find the “all markets all the time” position within conservatism to be somewhat unfulfilling as well.  Market solutions are only solutions insofar as they do not necessarily perpetuate problems quite so badly as government solutions.  Choice and economic liberty are only useful instruments within society because they avoid many of the traps that come along with big government picking winners, rewarding rent seekers, and so forth.  To base an entire philosophy of governance along these lines is somewhat short-sighted, I would argue.

Perhaps this comes down, paradoxically, to the philosophy of choice –that very thing which rests at the heart of both liberalism and capitalism and, for that matter, contemporary conservatism.  There is something fundamentally antithetical to conservatism – or to the way conservatism has been classically understood – about the notion that choice should rest at the epicenter of society, should so inform all public debate and should so define who we as a people.  With choice you must also parcel competition, liberty, and a host of other ideas which conservatives and libertarians especially hold dear.  That these things are the best vehicles for our economy is hard to debate, but that a world of limitless choice, fierce competition, and little if any public sector (or ‘commons’ for that matter) is best for society in the long run is a more difficult claim to make.

This is not to say that we should scrap free trade or limited government or any of these things – only that as a philosophy, man cannot live on free trade alone.  A conservatism not rooted in tradition is not really conservatism at all. A conservatism focused too entirely on market solutions inevitably ends up falling short, and may as well be libertarianism with a dash of culture war populism sprinkled on for flavor.

Similarly, a conservatism which takes its first philosophical baby-steps only as far back as the American revolution is doomed to perpetual immaturity.

A day or two ago, I offhandedly endorsed an article from Jagdish Bhagwati on the continued relevance of global free trade. This provoked a few heated responses from Kevin Carson, who has long argued that economic globalization is almost entirely a result of an elaborate web of state-subsidized networks like public transportation. A truly free market, Carson argues, would privilege locally produced goods and services over  long-distance competitors, who rely on an artificial network of state intervention to sustain their business model. It’s an interesting hypothesis, though absent a visit to some alternate universe without railroads and the interstate highway system, I don’t think we will ever be able to conclusively test the merits of his argument. Carson’s comments have provoked a few of my own thoughts on the intersection of local concerns and the free market, however:

[Read more →]

Please read Jagdish Bhagwati’s excellent defense of free markets and free trade in the wake of the global financial panic.

I have been rather harsh in my treatment of the “rugged individual” in these pages, and yet have come to an essentially libertarian position on most economic issues.  At the heart of libertarian philosophy is at least some degree of faith in the individual to make the best, or at least the most rational or most predictable, decision.  (Faith may be the wrong word….)  Still, I believe my social critique of the “rugged individual” is compatible with classical liberal economics (as opposed to economic populism, socialism, or distributism etc. etc.)

Individualism, properly understood, is a different animal altogether than the “rugged individual” of American myth – and even further distant from the entitled individual born into our own senseless era of wealth and purposelessness, severed from our communities and our history and our culture.  Individualism means more than what it has come to mean in either of these senses.

The “rugged individual” has been mythologized as the bootstrapper – the American business mogul who pulled himself up from humble beginnings into a position of power and wealth.  The entitled individual is spoiled, shallow, skeptical of the value of hard work, more interested in selfish pursuits than in helping others, detached from consequence, and possessed of an odd expectation that they deserve a great job, great pay, lots of toys – all for simply existing.  Both are examples of the so-called American Dream – one its myth, and one the consequence, perhaps, of that myth. [Read more →]

Just very briefly – “deregulation” does not mean the stripping away of all rules or the desire to enter into a state of anarchy.  So when I speak of “deregulating” the health care industry, I’m mainly talking about removing rules that prevent competition and create monopoly or that are expensive but provide no real benefit.  So removing restrictions which prevent insurers from competing force insurers to compete is a way to “deregulate.”  Other regulations which keep insurers from ripping people off, or remove barriers which prevent people from even purchasing insurance to begin with make much more sense.  Regulation should increase choice not decrease it, though ironically it is much easier to write rules that limit choice than to write rules that help increase it.

We’re not speaking in black and white here – or at least I’m not.  Some libertarians or anarchists would probably take a very different view than me.

The way I see it, you can follow a guiding philosophy only so far as it is practical to implement.

So you take the concept of market solutions to its practical limit – and this is hemmed in by historical realities, political realities, the electorate, etc – and then you make a compromise that can also be practically implemented. Give consumers choice over who they pick to provide their own health care via the aforementioned deregulation.  Kill the monopolies and create a real competitive market for health insurance.  Then give consumers even more choice by offering means-tested vouchers, whether or not there is a public option, so that all across the board people can make decisions about their own health care.  Spur competition.

Then you have to start making compromises because of all the basic facts that are impeding a real market from taking off (entrenchment of current industry players, high cost of premiums and the distortion created by decades of employer-provided insurance and so forth).  Write smart, simple regulations that prevent insurers from denying coverage.  Offset this by mandating that Americans purchase or acquire health insurance, and set rules for the “basic” plan that all insurers have to offer.  It’s not perfect, but in the real world, no compromise ever will be.  Imperfection is the nature of compromise, and the unintended consequence of imperfection can sometimes be really good results.

In the end this all comes back to the difference between “small” and “limited” government – or the scope of government involvement vs merely its size, and to the ways in which government does intervene into both our lives and, somewhat redundantly, into our economy.

“Rather than deep moral and spiritual renewal leading to civic health, what if it’s our national solipsism and susceptibility to suggestion that pull us together, and pull us through? What if, rather than being stuck with virtue, we discover that, after a few initially painful changes in lifestyle, we can buy spray-on virtue in a can? If enough Americans decide that the TV show of their lives should feature them acting like engaged, conscientious citizens, might that not be just as good as a more “authentic” conversion?”  ~ Matt Frost

Matt has a point.  In fact, one reason why in my search for a workable localism I have dedicated a great deal of virtual ink searching for practical rather than moral solutions, is that I don’t think we will see any sort of moral sea change as a nation any time soon.  National reckonings are at best temporary.   I don’t think we will willingly change or restructure our spending habits – or even that spending in and of itself is a bad thing.  Rather we need to move back toward a style of consumerism which is more responsible - as in, less built on debt, and more on savings and hard work.  It’s much more likely that this sort of shift occurs through the tightening of credit, rather than the voluntary reduction of our appetites.

So what are these “practical” solutions?  There are a number, including reducing our dependence on foreign economies and cutting back military spending.  Restructuring our financial system is also vital.

For instance, we should seriously consider nationalizing troubled banks and then selling them back off with size or regional restrictions.  This would benefit the financial industry in a number of ways.  We need to do away with the terrible anti-capitalist notion of “too big to fail” which props up our oligarchy at the expense of the tax payer and to the detriment of healthy competition; in fact, the continued presence of these “too big” financial institutions may be directly impeding any sort of reasonable recovery that the stimulus at large hopes to usher in.  Commerce is at its best at smaller scales (even if these smaller operations do attain global reach), in which merchants, bankers, investors, etc. operate within communities and the dollars involved remain flowing through those communities, rather than bleeding out into the pockets of distant executives and share-holders, more concerned with quarterly profits than the long term.  This is not always possible, of course, but it’s worth shooting for, especially in our financial sector which obviously, when mismanaged, carries far too great a risk to the health of the global economy. [Read more →]

“Thieves respect property. They merely wish the property to become their property that they may more perfectly respect it.”

~G.K. Chesterton

The process of determining who is to blame for our current economic crisis is daunting.  This is because for each villain one discovers, one must then discern the villain’s motivations; what historical conditions facilitated or inspired the villain’s capacity to harm; and then whether those historical conditions are part of a larger systemic or cultural or socioeconomic failing.  So, for instance, when we dig a little and find the overseers of the current meltdown – the CEO’s of the financial institutions whose black magic created this fiasco – we then become compelled to dig deeper still.  After all, where was our government in this debacle?  Isn’t a government’s purest purpose to protect its citizens, both from abroad but also from within?

Then again, to lay the blame at the feet of the government is terribly short-sighted as well.  After all, the government’s lack of oversight in this matter is essentially in keeping with the general trend of deregulation and modal monopolization of markets, and especially financial markets, that has defined the past few decades.  We need to dig deeper yet.  Philip Blond describes a modal monopoly as

“a model of monopoly that extends beyond whether an individual company has undue market influence to whether a certain mode or way of doing business constitutes a cartel. For example, the great housing crash is primarily the result of the absorption of all local, regional and national systems of credit into one form of global credit.”

What strikes me about this is how similar this concept of modal monopolization is to the concept of an increasingly all-powerful centralized state.  Big government and big business seem to grow apace; and at the same time, globalization and the rise of the financial industry to a predominant position in our modern economy seem also to be directly linked.

[Read more →]

Regarding the “grow your own policy” Mark Kleiman proposes, I have to say this is a very misguided approach.  While I love the notion of small, localized marijuana farmers, growing organic pot and sharing with their friends, the fact is not everyone will want to take the time or effort to grow the plants, and those that do take the time and effort won’t always be inclined to just give it away.  These people should have every right, even if only a symbolic right, to purchase marijuana without the stigma of illegality attached.  If something is basically harmless, or harmless enough to be legal to grow, well then it should be legal to sell and to purchase as well.  It should be introduced to the market, where small growers and big industries can compete.  If anything will lend itself to local, niche markets its marijuana, so I imagine a good deal of the pot sold in America, should prohibition end, will come from small growers.

Mark is simply wrong to say that excessive use alone would drive sales, like in the alcohol, tobacco or gambling industries.  For one thing, those industries would still exist if people used fewer of these products, but not to the same scale.  Smaller companies would still provide alcohol even if people began drinking only a tenth of what they drink now.   The market will fill the void, which is why we have Coors and local breweries.  The one does not eliminate the other.

Denying the capitalist element, or restricting it to home-grown only, has more than purely symbolic repurcussions, however.  For one thing, legalized marijuana should provide some tax revenue which can be used to fund police departments or other local efforts to combat real criminals and real social problems.  One of the strongest cases to be made against prohibition is that it creates a black market, and with the black market comes not only a loss in tax revenue, but also a rise in violent crime and arrest rates.  The grey market created by pseudo-legalization would be better, but not good enough.

Andrew writes, of Mark’s proposal:

I love this idea – because it is rooted in individual freedom, private property and the obvious point that making a plant you can grow in your garden illegal is a monstrosity.

While I agree with all these points in principle, I don’t think full legalization would change the matter whatsoever.  One could still grow their own.  But the individual freedom and private property of those who chose instead to buy their own would also be protected.  If it’s as legal to grow pot as it is to grow tomatoes, then it should be as legal to buy pot as it is to buy tomatoes.  I don’t like the billboard big-business capitalism anymore than the next guy.  I prefer to get my vegetables at the farmer’s market.  If I had room to grow my own carrots, I probably would.  But I like to have the choice.  My apartment is certainly too small to accommodate cornstalks, however nice it would be to grow my own corn.

Full legalization is the only route here.  Anything short of that would still be a monstrosity, if only one of lesser scale.

Okay, so I can’t quite follow this.

I’m sure Peter’s right about the merits of The International; I haven’t seen it and don’t plan to. But I have a hard time following the logical threads to see exactly how it’s supposed to be a socialist tract. Because it is critical of capitalism? Even if that were the case, being critical of capitalism isn’t sufficient to make a person, movement or movie socialist. I know we’re trapped in binaries in this culture, but come on. I mean, saying “the movie doesn’t put much stock in bankers, banking, or anything related to the financial system” is pretty far from proof positive that it endorses a socialist system. Anarchists, for example, aren’t fond of banks, but are farther from socialism than they are from capitalism. (Even if the movie is saying not just “this bank is bad” but “all banks are bad,” couldn’t that mean the point is “let’s abolish banks as systems of illegitimate control” rather than “let’s bring the banks under the control and ownership of the people”?)

Peter says

Perhaps it’s not capitalism, just capitalism’s excesses—the rapacious bankers who abuse their money and power—which are at fault? Maybe, but when the person delivering the lecture is revealed to be a former Communist stalwart, one whose fall into the banking-world cesspool requires redemption, it’s hard to interpret it any other way.

First, I don’t know that you can fairly call illegal actions in the service of capitalist enterprise capitalism’s excesses. Surely being opposed to crime, whatever the motivation, doesn’t make one opposed to capitalism. I hardly think Peter alone is guilty of seeing socialist critique where there is none. It’s a pretty constant American hobby. There’s a couple things wrong here that you see often. The first is assuming that an attack on capitalism amounts to support for socialism. Socialism means something, and while I don’t blame Peter for taking a rather liberal use of the term, I do think that we in America have rendered the term near meaningless through overuse and misuse. The other problem I have, and I think people do this all the time, is to assume that support for capitalism means support for all of the consequences of capitalism. So saying “capitalism puts too much power in the hands of corporate interests” becomes an anti-capitalist statement. I think that’s not a productive way of looking at things.

What I would like to ask Peter is whether or not he really finds the story of a powerful corporation breaking the law to serve its interests unbelievable, or if he just thinks that the degree to which it happens in this movie is unrealistic. For sure, it probably is unrealistic, being an action thriller. But if the suggestion is that fidelity to capitalism means balking at the portrayal of some large corporations as being unconcerned with law or morality, then fidelity to capitalism requires having a false vision of the world. One of the things that worries me about contemporary conservatism is how disarmed conservatives have become when it comes to recognizing the plain facts of human power politics. These are true things: there are the moneyed and the powerful; there are the poor and powerless; and the first group often uses that power and money to make sure they stay in power and the second group stays out of it; and they often break our rules in doing so. That seems to me to be a simple fact not of capitalism but of human society, as much as I believe progress can and must be made. But conservatives, so sensitive to communism sneaking in the back door, now seem entirely too quick to dismiss any notion of the rich preying on the poor. Look, money carries with it power, and often that power is used unfairly or immorally. That’s just life. If saying so is anti-capitalist then capitalism has evolved into a fantasists ideology.

As to the charge of a thriller being boring, however, there is no defense.