Arnold Kling  

If I Were on the Left

PRINT
Computers, Education, and Comp... I'm Telling...

I do not think that I would find Arthur Brooks persuasive. He writes,


Free markets and entrepreneurship are driven not by greed but by earned success.

He gives examples. I would give counter-examples. I would say that regulation is needed in order to ensure that success is properly earned rather than the result of selling snake oil. I would say that government must play a large role in order to provide equal opportunity and to correct market failures.

In truth, I am not on the left. But long-time readers know that I do not claim that markets work. Instead, I say "Markets fail. Use markets."

It is not the left's criticisms of markets that I reject. What I reject is the assumption that imperfect human beings working within the context of a centralized, monopolistic institution (government) with enforcement powers can correct the flaws in decentralized, competitive system that relies on voluntary exchange.

I share the left's view that market often work badly. I think that people on the left share my view that government often works poorly. Where I claim the difference lies is that people on the left believe that with sufficient moral authority, government can be made to work better. I see government failure as intrinsic to its centralized, monopolistic structure.


Comments and Sharing


CATEGORIES: Political Economy



COMMENTS (22 to date)
RPLong writes:

I think "markets fail" is sometimes too strong an assertion. Often times, what people really mean is, "markets result in outcomes that John Q. Leftist would not personally selected if he were god."

Greg G writes:

While I would agree that markets don't always provide results that are "properly earned" I don't hold out much hope we will get people to agree on what "properly earned" means.

I think focusing on transparency would get better results. Unregulated markets often move toward less transparency rather than more. Markets work best with lots of transparency but market participants rarely want that for their own transactions. And they almost never lobby for it.

It is not just the mortal authority of government that has diminished in the last few decades. Even more fundamentally, the cultural norms that used to constrain market participants from engaging in legal but unethical behavior have withered.

Greg G writes:

"moral" authority

Glen Smith writes:

Being "driven by greed" and earning your success are not mutually exclusive concepts. In fact, since a leftist would have to believe that all successful humans are driven by greed, in a free market, successfully reaching the goal that greed drives you towards requires you to do what is most valuable to society is arguably one of the best arguments for markets. This is what confuses me about leftist, if they indeed "feel for the poor", why do they pursue strategies that allow for the greedy to succeed in a way not beneficial to society?

alec resnick writes:

A bibliographic question: does anyone here have good references fleshing out those last two paragraphs? I'm an enormous fan of the sentiment, and would love to see those system dynamics claimed fleshed out in a single place, as opposed to the mishmash in my head between works like The Black Swan and Seeing Like a State.

DWAnderson writes:

Nice post. It would be nice if left and right could both focus on how to improve market rules, but alas "politics is not about policy."

Matt H writes:

If I were on the left I might respond to you like this:

1. Don't some government institutions work better than others? Some countries better than others?
2. Since there is variation in government performance, can't we strive towards being at the top.
3. That variation likely has to do with the incentive structures facing regulators, not only legal but cultural as well.
4. So a new commission or agency doesn't need more moral authority but rather better incentives.
5. One could argue that focus on moral authority nevertheless is correct. Having our institutions as effective and non-corrupt as Scandinavin ones might require just that greater moral authority.

Joe Cushing writes:

"I see government failure as intrinsic to its centralized, monopolistic structure"

That's exactly what I said in the comments here twice. I think this idea is important to combating the ideas of the left. We have to break through their resolve that government can make things better if we just get the right people in place. What is intrinsic to government is that the wrong people (libido dominandi) tend to be in place and even if we have the "right" people, they couldn't know what to do.

I'd add to your statement that because of the centralized, monopolistic structure and access to the use of violence; government failure tends to be larger in scale, longer lasting, and deeper in its consequences than market failure. Markets that fail often self correct in time and sometimes non market cooperation has been known to evolve/emerge on its own to overcome times when markets fail.

There was a woman economist who studied this. She studied how societies handle situations like the tragedy of the commons. I can't remember who she is though. I do remember her conclusions though. Big centralized government is not needed to resolve these kinds of problems.

Richard Fazzone writes:

Very well put, but for emphasis (if necessary), I would add to the last sentence, ", and, hence, inevitable."

June Gorman writes:

I would argue with Matt H above. Both institutions -- markets and governments -- are aggregated moral value systems of the people and society from which they are created. The founding component is the adult's value system created by that society in the yes, moral, social and value character of that child, deeply influenced by that culture, its limitations and foci. Analysing the effect of greed becoming your society's 'god' and the altar few remain embarrassed to worship upon and an incentive and reward structure that celebrates fatuous "celebritism" and success based on lowest values, often the opposite of 'moral authority', might be a critical place to begin.

It's actually not that hard, if you know anything about the development of character and raising the human child well or poorly, to see how we got here. What's hard is to keep hearing all the subsequent justifications for the flawed belief that it is an inevitable result as opposed to admitting the obvious gradations in that very result in societies all around us. (Of which the US of the last 30 years is a lesson in how to move backwards on that very scale of moral authority.)

It does seem, as Matt H. suggests, that it would be worth deconstructing how to move forward on that same scale and analyzing the societies/governments that legitimately have. Personally, I would start with how we raise and educate the children in that same corrosive, fatuous value system and then seem so confused by the subsequent but fairly logical result.

david writes:
We think that politics is more than an unfortunate necessity required by our inability to live together without killing each other. We think it is, can be anyway, an arena in which we work out and pursue, sometimes with notable success, large and constructive purposes. When I think about the history of democracy in the past century, and think about its greatest achievements of domestic policy, the areas of real moral progress, I think of civil rights, women’s equality, and the halting fight against a class society. With respect, classical liberals were in the rearguard in every one of these struggles. And for a simple reason: in each case, the struggle depended on a willingness to fight against inequality, subordination, exclusion through political means, through the dread state. And if you mix your classical liberal values with the classically conservative predisposition to think that politics is at best futile, at bad perverse, at worst risks what is most fundamental, then you will always celebrate these gains when the fight is over: always at the after party, inconspicuous at the main event, and never on the planning committee.

http://bostonreview.net/BR34.1/cohen.php

June Gorman writes:

I would argue with Matt H above. Both institutions -- markets and governments -- are aggregated moral value systems of the people and society from which they are created. The founding component is the adult's value system created by that society in the yes, moral, social and value character of that child, deeply influenced by that culture, its limitations and foci. Analysing the effect of greed becoming your society's 'god' and the altar few remain embarrassed to worship upon and an incentive and reward structure that celebrates fatuous "celebritism" and success based on lowest values, often the opposite of 'moral authority', might be a critical place to begin.

It's actually not that hard, if you know anything about the development of character and raising the human child well or poorly, to see how we got here. What's hard is to keep hearing all the subsequent justifications for the flawed belief that it is an inevitable result as opposed to admitting the obvious gradations in that very result in societies all around us. (Of which the US of the last 30 years is a lesson in how to move backwards on that very scale of moral authority.)

It does seem, as Matt H. suggests, that it would be worth deconstructing how to move forward on that same scale and analyzing the societies/governments that legitimately have. Personally, I would start with how we raise and educate the children in that same corrosive, fatuous value system and then seem so confused by the subsequent but fairly logical result.

dave smith writes:

Matt H. If you were on the left, you'd never suggest your point #4.

Joe Cushing writes:

Matt H.

"1. Don't some government institutions work better than others? Some countries better than others? "

Yes this is true of all organizations, public and private. Most organizations are ill conceived, poorly run with only a few exceptions. The difference is that in the private sector, effective organizations tend to survive while ineffective organizations tend to either fix themselves up or die. Over time you have lots of effective private organizations and lots of ineffective government organizations. Private organizations are great at duplicating success, while government organizations are not.

Tom writes:

I think gov't is worse than markets for a very Leftist reason: peace.

Markets are based on peaceful people making the best win-win deal they can find (within their own personal limits/ budgets of money & time).

Win-win, or else no deal.

Gov't is based on win-lose -- the taxpayer loses, or the one regulated loses. When the thief or killer is caught, and loses, that's ok, that's justice. The gov't job is to punish losers.

The Leftist problem is the pretense that gov't taxes are collected peacefully. Taxes may be necessary, but they're not peacefully collected. Force is the usual opposite to peace.

Mike W writes:

Regarding the last paragraph...nah, don't think so. You're describing the views of "the left" from the standpoint of someone on "the right".

Those on the left are not concerned with market efficiency. They "care" about "fairness" (ala Haidt)...i.e., their "caring" is their religion and "fairness" is defined as social justice ala Rawls.

They believe the individuals in government can function at least as well as those in any large organization in the private sector (the moral authority arguments are just to stake out the high ground). They envision reasonably well running government that will be continually improving and that is good enough as long as progress is being made via redistribution to achieve equality.

I am from the centre left and I believe in markets. I am quite amazed when I discuss markets with people from the right because they do not understand how markets work and your statement "Markets fail. Use markets." is where they always fall down. For markets to be effective there has to be easy entry and easy exit. If a local businessman has a new idea of selling locally grown veg to a community through a high street shop, the plan will be stymied if the small shop units are all owned by a property company with an agreement with the local supermarket: entry becomes difficult. The community will not get the benefit of a new innovative business. Equally so, a business that fails should be able to leave the market quickly, since a failing business is not giving its customers the service they want.

I have to argue about how markets work because - from my position on the left - I argue that much of (but not all) of healthcare cannot be part of a market. When you know how markets work, and you know how healthcare works, you know that the two do not sit together.

Hospitals are large investments which means that for an organisation to invest they will need to know that they will get the business, that then produces contracts that tie commissioners (public health commissioners or insurance companies) into long term contracts and hence there is no patient choice. Equally so, it is difficult for a provider to leave the market, not least because in healthcare continuity of service is the most important criteria to patients (in the UK 2/3 of healthcare spend is on long term conditions, these are people who, by definition, need continuous healthcare). One of the most important aspect of healthcare is prevention. Potentially prevention is very cheap: educating a type 2 diabetic in how to monitor and manage their condition is far cheaper than the costs that come from the complications (blindness, amputations, kidney disease, etc). Commercial hospitals make profits from treating the complications and have no compulsion in preventing them. The market makes the situation worse.

Nick writes:

I'm not sure I would describe any of the 3 main UK political parties as anything other than 'self-serving, slightly off-centre, self-preserving' in nature. They are largely populated by people who have little relevant experience of the lives most people live. They play to the

RPLong writes:

Richard Blogger -

What makes you think adequate education about the control of type 2 diabetes does not already exist?

It's important to rise above feel-good assertions like "preventative education reduces healthcare costs." I've been (type 1) diabetic since 2009, and I've never noticed a lack of preventative education. In fact, as soon as a person is diagnosed, they are inundated with classes, pamphlets, websites, books, magazines, etc.

On my blog, I presented some data-backed reasoning for why I think the key to diabetes management is blood glucose monitoring. That's expensive, but it works.

The problem with healthcare is that people want to believe that the expensive options aren't the most effective. They're wrong. Healthcare spending keeps increasing because new technologies are both superior and more expensive.

liberty writes:

"Where I claim the difference lies is that people on the left believe that with sufficient moral authority, government can be made to work better. I see government failure as intrinsic to its centralized, monopolistic structure."

What if the argument was not about sufficient moral authority, but instead sufficient checks & balances, democracy, trial and error, transparency, etc? Don't some governments and cultures work better than others? Isn't it possible to improve upon government and regulation by creating the right environment, the rights checks on government power, the right decentralized and democratic structure which might reduce/improve upon the 'centralized, monopolistic structure' somewhat? Might there creative solutions that could perhaps help government to work better?

Andrew writes:
I would say that regulation is needed in order to ensure that success is properly earned rather than the result of selling snake oil.

If a consumer is unable to decide that they are being sold "snake oil" from retailers, how will they be able to decide they are not being sold "snake oil" from regulators?

Foobarista writes:

The problem is that electoral democracy is not adequate to controlling a giant administrative state. A citizen can vote for a Congressperson, a couple of Senators, and a President, but has millions of bureaucrats affecting their lives. If and when the bureaucracy screws up, they have very little recourse, unless they're rich or insanely stubborn. To make things worse, many if not most of the elected people in government favor the bureaucracy over the electorate, and the bureaucracy itself is protected with civil-service laws.

Even if you figure out to have a more responsive system for managing the bureaucracy, you'd still have the "monopoly problem" to deal with: how do you know whether a government program is effective or not? Since there's no competing programs, "success" ends up being defined by the very bureaucracy responsible for implementing the existing program, and shockingly, it ends up defining success as "do what we're currently doing, but more of it". All you have to compare with is programs in other countries or theoretical constructs from think-tanks or academia.

Comments for this entry have been closed
Return to top