Furious agreement, parts II and III

It’s an analysis familiar to most on the Left. Support for laissez-faire is a hypocritical pretence, typified by Republicans who denounce a universal health care scheme as “socialist” while backing huge handouts for wealthy sugar producers.

For cultural and historical reasons, the United States has never had a proper socialist party of any significance[1]. Instead

the socialism we do have is the surreptitious socialism of the strong, e.g. sugar producers represented by their Washington hirelings.

In America, socialism is un-American. Instead, Americans merely do rent-seeking — bending government for the benefit of private factions.

As I say, familiar stuff. But it’s mildly surprising to see it coming from George Will.

Of course, I’ve been a little mischievous here (and as usual, haven’t included the irony alerts). For Will, the answer is not to do socialism properly, but to rescue conservatism from what he correctly describes as its current intellectual chaos. But, it’s not hard to read his article as suggesting that, absent success in this endeavour, Americans ought to prefer a coherent social democratic policy in which the power of government is directed at real social problems to the kleptocratic “big government conservatism” of the Bushies.

Now, with no mischief or irony at all, let me declare my agreement with Ramesh Ponnuru whose demolition of the “US is a centre-right nation” meme is the most succinct and precise I’ve seen.

I can see the point of saying that the country is “center right” if the point is that we are, compared to most developed countries, a bit more religious, free-market, and nationalistic in orientation. If that’s all it means to say “center right,” though, we could probably go through a long period of political domination by liberals and still qualify. And I’m not sure what else the phrase could mean.

This is spot-on. The centre-right meme is, as Pauli used to say, not even wrong.

fn1 Apologies to Eugene Debs and Norman Thomas, but their support was never broad or deep enough to challenge the Rep-Dem duopoly.

41 thoughts on “Furious agreement, parts II and III

  1. A view of social democracy focused on trade protectionism seems rather strange. In general social democrats have preferred Keynesian macroeconomics and direct public job creation to these devices, which are more associated with traditional conservatism. And the central focus of social democracy is on redistribution through the tax-welfare system, not through trade and industry policy.

  2. smiths,
    Your first two sentences are just bald contentions, ones I would argue are not supported by any evidence – but this does not surprise me.
    I think we all would – the question is how to get there. I am not doubting rent seeking exists everywhere, the question is how to minimise it. With a small government with limited powers I would argue the potential for rent seeking and bald corruption is minimised. “All power tends to corrupt…” etc. Reduce the power that must be exercised through coercion (i.e. government power) and you end up with less perverse use of that power.
    Surely, where about 50% of the production of a nation is being redistributed through the tax and welfare system, along with large quantities of regulation (as we currently have) the potential for rent seeking is greatly increased? Social democracy (as it is practiced) also has brought us many of the things mentioned – our own ALP seems determined to increase the use of industry policy with direct subsidies to (for example) vehicle manufacturers. The ALP also has historically argued for an extensive use of trade policy. Is the ALP not a social democratic party?

  3. ‘social democrats prefer to live in a society which is stable and equitable.’

    And yet the experience of central bankers’ very quest for stability has produced massive instability in the long run and some rather inequitable outcomes as the Gordon Geckos they spawned, absconded with their easy money. It also facilitated taxation by stealth, so much so that many Govts faced with such a soft option, were comfortable with amassing public debt. Where is the equity for ordinary taxpayers in all that now?

    ‘left to its own devices capitalism produces monopolies and cartels at the expense of the vast majority of people and any democratic systems’

    Well we have all just seen how some well intentioned meddling can achieve the same result. As for producing monopolies and cartels, we need to understand that you don’t need 20 supermarket chains or airlines in Oz to get cheap groceries and airfares. Whilst economies of scale and lumpy capital can be a barrier to entry, it is now often the case that concentrated fossil fuel use, coupled with computerised logistics can be more of a barrier to entry because of such extended cheap reach by the few. Also there can be more cartelised behaviour between a GM and its UAW workforce, than between GM, Chrysler and Ford, cartels they’ll all squawk separately in unison to continue of course.

    It is only sufficient that there be no barriers to entry for us all to share the benefits equitably (and don’t you ever let a chance go by here old son). To that end, not to mention impacting the reach of those fossil fuels, we could ameliorate Ken Henry’s concern about all those hairy nosed taxes and opt for reliance on simpler, level playing field, carbon and resource taxing. That way our budding new entrant would only need to concern himself with Mr Macawber’s wise words and not all the plethora of accounting he has to hurdle now. That will leave him much freer to concentrate on new proposals to raise taxes, other than by stealth, among other things.

  4. Ha! I’m on the ATO email bulletin list and social democrats everywhere will be pleased to know the ATO has joined central bankers in the good fight for all that stability and equity-

    ‘Tax Commissioner Michael D’Ascenzo today issued a taxpayer alert warning multinationals that the Tax Office will be closely examining claims for foreign business losses shifted to Australia.

    “We have seen attempts to aggressively transfer existing or unrealised losses from the foreign operations of another business into Australia, possibly as a result of the current global economic environment,” Mr D’Ascenzo said.’
    yada, yada…

  5. The defeat of the Republicans in the US and the Howard government in Australia was in part a result of the fact that they abandoned any pretensions of limited government and presided over large increases in government expenditure.

    There are a few reasons why conservative parties can’t remain successful by promoting the growth of government. One is that if voters face a choice between two parties that both support more government expenditure, people are more likely to simply go with the party that they believe will put more of the resources into things that impact most people more (like health and education) and that they believe cares more about the outcomes. And voters who favour less government and lower taxes are more likely to vote on other issues once neither party represents their economic views.

    Moreover, when conservative parties support higher government expenditures it represents a complete intellectual surrender to their opponents. And it has the general effect of shifting the entire spectrum further to the left, enabling left-of-centre parties to advocate even more government expenditures without being seen to be too radical or economically risky.

  6. JQ at 26, it may be true that trade protectionism is not necessarily a leftist position. I too have often thought it strange why any leftie would want to prop up monopoly profits of inefficient businesses.

    That said, it is generally true that social democratic parties have become more protectionist in recent years. Obama shows more signs of supporting protectionism than McCain would have. And the ALP appears more willing to prop up our car industry than the Coalition.

    It seems that social democratic parties tend to support protectionism whenever they can redistribute enough of the economic rents to groups more likely to support them, such as unionised workers.

  7. Even if social democrats didn’t or don’t support protectionism (a doubtful propersition anyway) their advocacy of high income tax rates still imposes a tariff on interhousehold trade. A 50% income tax on marginal production is like a 100% tariff on the trade in such marginal production. Why should we have a 100% tariff on the trade in scarce services such as heart surgery, dentistry or legal advice.

    In practice conservatives and social democrats are both enemies of liberty and prosperity. They are like two sides of the same coin.

  8. Please nothing more like this, observa. Stick to comments on the topic at hand with no random links to news stories or opinon pieces. I’m putting you on automoderation for now.

  9. I’ve deleted a bunch of recent comments. Please read the comments policy regarding sockpuppeteering. If you want to change pseudonyms, please make a clear announcement that you’re doing so. Automoderation for you too.

  10. John, if I may reply to Andrew by saying governments of all persuasions are guilty of implementing ‘disguised protectionist’ policies and makes a mockery of those who profess to be free marketeers.

  11. Michael – surely you are not suggesting that people lie about their world view in order to secure the votes of those that believe in a given world view. That would be wrong wouldn’t it?

  12. John, if I may reply to TerjeP by saying I’m a realist even though the WTO forbids ‘disguised protectionism’.

  13. John,

    If I may answer Smiths by saying that perhaps Michael doesn’t like me and we are not on speaking terms so everything must go via mother. 😉

  14. Perhaps I may venture a couple of other possibilities:
    1. Maybe he is just being extra polite at the moment.
    2. He could be a politician (or former one) in the habit of addressing everything through the chair.

  15. John, if I may reply to Smithy, Terje and Andy by saying you should thank Professor Quiggin for allowing all of us to voice our opinions. And since we are all on good speaking terms why not join in rally on December 2 in support of CFMEU official Noel Washington who faces fines of up to $22,000 and/or 6 months jail for refusing to submit to an ABCC interrogation. Maybe you will witness history in the making for crunch time has come for the Rudd government.

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