Monday, September 19, 2016

Liberaltarianism--it's awesome!

For quite some time now, an increasing number of policy experts and thinkers have been quietly converging on a loose set of attitudes about the role of governments and markets in society. I call it 'liberaltarianism', but 'left-libertarian', 'radical centrism', and policy analysis emphasizing 'kludgeocracy', 'political decay', 'upward redistribution' and 'rentier capitalism' are all basically different frames for the same approach: free markets combined with a generous welfare state.

The places that hew most closely to liberaltarianism are (paradoxically) Scandinavian countries typically viewed as big-government socialist havens. In fact they consistently top rankings of market freedom, even among solidly libertarian organizations.

The general political-philosophical orientation has mercifully avoided being labelled and categorized (I'm probably not helping), and at this point there's not really a clear definition or set of specific policy prescriptions associated with it. Some might falsely view it as a re-branding of Clinton-era New Democrat 'triangulation', but in many ways liberaltarianism is the precise opposite.

Where centrist Democrats pursued business-friendly policies like semi-privatization and narrow tax credits (designed to reduce the nominal size of government), liberaltarians recognize that the ultimate result of these 'submerged state' policies often increases market distortions and opportunities for rent-seeking with a swamp of regulations and loopholes. The current Democratic Party has improved in some ways, but seems increasingly enthusiastic about the direct regulation of markets, which is perhaps even worse.

Still, the intellectual bankruptcy of the Republican Party--lost to business interests and white ethnonationalists--means that in the near term any political traction liberaltarian ideas receive will probably come from leftists and maybe a few pragmatic libertarians.

To help flesh-out the liberaltarian framework as I understand it, here are a few links from authors I consider to be pushing policy in a positive direction:

-------

Will Wilkinson was one of the earliest exponents of liberaltarianism, often critiquing mainstream libertarians for eschewing social justice topics and the importance of redistribution in maintaining political support for free markets. Initially a blogger at The Economist, he now directs policy at the Niskanen Center and writes occasionally for Vox. Here is his Libertarian Case for Bernie Sanders, and here is an excellent Vox column articulating some key aspects of his idiosyncratic policy vision:
Free markets require the presence of good regulation, which define and protect property rights and facilitate market processes through the consistent application of clear law, and an absence of bad regulation, which interferes with productive economic activity. A government can tax and spend very little — yet still stomp all over markets. Conversely, a government can withdraw lots of money from the economy through taxes, but still totally nail the optimal balance of good and bad regulation. 
Whether a country’s market economy is free — open, competitive, and relatively unmolested by government — is more a question of regulation than a question of taxation and redistribution. It’s not primarily about how "big" its government is.

Scott Alexander is a freakishly talented internet blogger person, with roots in Less Wrong and Bay Area techno-libertarian culture. He is very explicit about his 'left-libertariansm', which he has articulated at a slow drip over the years. This is from a post on the subject:
What if we abandon our tribe’s custom of conflating free market values and unconcern about social welfare? 
Right now some people label themselves “capitalists”. They support free markets and oppose the social safety net. Other people call themselves “socialists”. They oppose free markets and support the social safety net. But there are two more possibilities to fill in there. 
Some people might oppose both free markets and a social safety net. I don’t know if there’s a name for this philosophy, but it sounds kind of like fascism – government-controlled corporations running the economy for the good of the strong. 
Others might support both free markets and a social safety net. You could call them “welfare capitalists”. I ran a Google search and some of them seem to call themselves “bleeding heart libertarians“. I would call them “correct”.

Steven Teles is a political scientist who has done much to further a certain type of institutional analysis that brings old-school public choice theory into the modern age. His reframed 'kludgeocracy' concept has made certain libertarian critiques of government more palatable to cultural leftists. This is from his classic Kludgeocracy in America essay:
Housing is perhaps the most striking and perverse example of this pattern of government growth through seemingly non-governmental means. The 30-year, fixed interest-rate mortgage exists on a mass scale only in the United States, and only because of massive distortions of the free market by government-sponsored entities like Fannie Mae. Added on top of that are the deduction of mortgage interest from taxable income — the third-largest exclusion in the tax code — and the delay in capital-gains taxation on home sales when another home is purchased. Taken together, the tax code and government-sponsored enterprises amount to a massive housing-welfare state. And although it delivers benefits to many citizens, this set of programs is fundamentally regressive — vastly favoring people in the highest tax brackets and artificially increasing the prices of homes, thus increasing barriers for first-time home buyers.
His essay The Scourge of Upward Redistribution is also recommended.


Francis Fukuyama is another political scientist whose focus has gradually drifted towards an analysis of US policy dysfunction that closely mirrors the libertarian critique of government, yet remains broadly amenable to welfare redistribution. This is an emerging theme among liberaltarians: decoupling the best libertarian critiques of government from other issue domains like welfare and fiscal policy, monetary policy and foreign policy.

Here is an excerpt from Fukuyama's essay The Decay of American Political Institutions:
The decay in the quality of American government has to do directly with the American penchant for a state of “courts and parties”, which has returned to center stage in the past fifty years. The courts and legislature have increasingly usurped many of the proper functions of the executive, making the operation of the government as a whole both incoherent and inefficient. The steadily increasing judicialization of functions that in other developed democracies are handled by administrative bureaucracies has led to an explosion of costly litigation, slow decision-making and highly inconsistent enforcement of laws. The courts, instead of being constraints on government, have become alternative instruments for the expansion of government. Ironically, out of a fear of empowering “big government”, the United States has ended up with a government that is very large, but that is actually less accountable because it is largely in the hands of unelected courts.

Ashwin Parameswaran blogs at Macroresilience, and has written about liberaltarianism with great clarity. A few choice quotes from his essay Radical Centrism: Uniting the Radical Right and the Radical Left (separated by paragraphs)
Neoliberal crony capitalism is driven by a grand coalition between the pragmatic centre-left and the pragmatic centre-right. Crony capitalist policies are always justified as the pragmatic solution. The range of policy options is narrowed down to a pragmatic compromise that maximises the rent that can be extracted by special interests. Instead of the government providing essential services such as healthcare and law and order, we get oligopolistic private healthcare and privatised prisons. Instead of a vibrant and competitive private sector with free entry and exit of firms we get heavily regulated and licensed industries, too-big-to-fail banks and corporate bailouts.
The Core Strategy of Pragmatic Crony Capitalism: Increase The Scope and Reduce the Scale of Government.
 The essence of a radical centrist approach is government provision of essential goods and services and a minimal-intervention, free enterprise environment for everything else.
 A bimodal strategy of combining a conservative core with an aggressive periphery is common across complex adaptive systems in many different domains.
Radical centrism involves a strengthening of the safety net for individuals combined with a dramatic increase in the competitive pressures exerted on incumbent firms. Today, we bail out banks because a banking collapse threatens the integrity of the financial system. We bail out incumbent firms because firm failure leaves the unemployed without even catastrophic health insurance. The principle of radical centrism aims to build a firewall that protects the common man from the worst impact of economic disturbances while simultaneously increasing the threat of failure at firm level. The presence of the ‘public option’ and a robust safety net is precisely what empowers us to allow incumbent firms to fail.

No comments :

Post a Comment