In this post, I’m going to take Bryan Caplan’s ideological Turing Test, which requires me to “simulate” an advocate of an ideology I oppose. In this case, I’m going to simulate an advocate of liberalism and focus on issues where liberals and libertarians disagree. And I’m going to try simulate an advocate who is reasonably intelligent and reasonably knowledgeable about the relevant issues. Anyone can caricature an opponent who is ignorant or stupid.
The free market is well and good in its proper place. But libertarians and many conservatives are wrong to advocate total laissez-faire. They indefensibly ignore or downplay market failures, the plight of the poor, and historic injustices against women and minorities. Let’s take each of these points in turn.
I. Market Failures.
A pure free market might work well in a world where there was perfect competition, perfect information, and zero transaction costs. In the real world, however, we have market failures such as public goods problems, externalities, asymmetric information and monopoly. Contrary to what some libertarians and conservatives seem to think, we progressives don’t claim that government can correct all such market failures. But it’s foolish to deny that it can correct some of them, perhaps a great many. For example, the evidence clearly shows that the Clean Air Act has greatly reduced air pollution, which the market could not have done on its own because clean air is a classic example of a public good. There are many similar cases.
It’s true that government will sometimes do a poor job of addressing market failures, or even make the situation worse. But that’s why we have the democratic process. If political leaders are failing at correcting market failure, the voters can “throw the bums out.” That’s what they did to the Republicans in 2008, after the GOP allowed market failures to cause a terrible financial crisis. Sometimes, the voters make mistakes out of ignorance (e.g. – in 2010). But in the long run, they are fairly effective at incentivizing political leaders to do a good job of correcting the deficiencies of the market. And democracy would work even better if we had stronger campaign finance laws to prevent the will of the people from being overriden by corporate lobbying and campaign contributions.
Where necessary, we can rely on judicial review to correct some of the flaws of the democratic process, and ensure that everyone has a right to participate. We need some structural safeguards to keep the “tyranny of the majority” from oppressing unpopular minority groups and violating basic rights. In general, however, democratic government is the best answer to market failure.
II. The Problem of Poverty.
In a free market, your ability to acquire goods and services is ultimately determined by your wealth. Money talks. This puts the poor at a serious disadvantage. They don’t have nearly as much purchasing power as the rich. The very poorest often have trouble even acquiring basic necessities. Private charity helps matters somewhat. But there’s far too many poor people for it to even come close to solving the problem. If we want to give the poor a minimally decent life, government-imposed redistribution is the only way to do it.
It may be true that a poorly designed welfare system will incentivize able-bodied people to stay on the dole rather than work. But the right is wrong to assume that we can only solve this problem by abolishing the welfare state or severely limiting it. We should instead make work attractive by subsidizing the working poor through policies such as the earned income tax credit, the minimum wage, and government-provided health insurance. That way, those able to work will still have incentives to get a job, even with generous welfare provision for the unemployed. Ultimately, however, it’s more important to save the poor from misery and starvation than to have a perfectly efficient labor market for low-income workers. A society as wealthy as ours can easily afford this trade-off.
III. Addressing Historic Injustices.
The case for the free market would be stronger if we did not live in a world where some groups are handicapped by massive historic injustices such as the legacy of slavery, segregation, and centuries of sexism that reduced women to the status of second-class citizens. As Lyndon Johnson put it, “You do not take a person who, for years, has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, ‘you are free to compete with all the others,’ and still justly believe that you have been completely fair.” Programs like affirmative action are needed to compensate women and minority groups for the effects of centuries of oppression and discrimination.
Moreover, sometimes we need large-scale government intervention simply to stop the oppression in the first place. Very little progress was made in ending discrimination against African-Americans until the federal government passed the civil rights legislation of the 1960s and began to enforce it aggressively. Similarly, extensive federal regulation such as Title VII and Title IX was needed to begin to curb discrimination against women. Today, we need continued regulation to guard against the racism and sexism that still remains, and to eliminate the harm caused by homophobia.
OK, I think that’s enough channeling of my inner liberal for one post. How did I do on the Turing Test?
UPDATE: Some of the commenters seem to be misunderstanding what I was doing here. I was trying to outline the arguments of a reasonably knowledgeable and intelligent liberal on several key issues. I was not trying to simply imitate liberal political talking points or sound bites. That’s why I tried to make substantive arguments and respond to opposing views, instead of simply repeat slogans. Krugman’s original point, after all, was that opponents of liberalism don’t understand liberal arguments, not that they can’t repeat liberal rhetoric. Other commenters object to the use of terminology from economics, such as “market failure,” which they see as somehow biased towards libertarianism. In reality, however, the majority of economists are liberal Democrats, and terms such as “market failure” were introduced by left of center economists to explain why various forms of government intervention are needed. Finally, some people complain that I omitted various issues and arguments (e.g. – income inequality in addition to absolute poverty). That’s true enough. I could have written a much longer post that covered many more points. However, turning a blog post into a lengthy article is rarely a good idea.