The liberal problem

Liberals and conservative political positions these days both have serious problems. The conservative problem is simple: conservatives these days are simply inconsistent. They want the federal government out of our lives, and at the same time they want the federal government to enforce their own religious and cultural views on issues like abortion and gay marriage. They want the federal budget cut, but not at the expense of military spending, Medicare, Medicaid, or Social Security, the things that account for most of the federal budget. They want a simplified tax system, yet they want to preserve lots of special interest deductions and loopholes for businesses. But then, the conservative movement is in some crisis right now. With luck and time they may manage to get their act together and create a consistent set of policies.

The liberal problem is more subtle. Fundamentally liberals want more social and economic equality in the nation, which is a reasonable aspiration. But they are faced with the uncomfortable fact that people simply aren’t equal. Some are smarter than others. Some are willing to work harder than others. Some are more willing to educate themselves than others. Some are more willing than others to take risks and start new businesses. Some are more willing than others to retrain themselves if their jobs disappear. Some of these differences are inherent (genetic), some are environmental or cultural. But these differences are there, and they are real.

Faced with this, liberals often confuse equality of opportunity with equality of outcome, and end up supporting policies that try to make the outcomes more equal for everyone, rather than the opportunities. As Winston Churchill once said “Capitalism is the unequal distribution of blessings, Socialism is the equal distribution of misery.”

The lesson of the socialist/communist systems that prospered over the past half century and then mostly crumbled is that incentives matter. Systems that remove the incentives by assuring everyone of a job and a wage whether they work hard or not lead inevitably to an inefficient, even moribund, economy. Or as the old Soviet joke goes “We pretend to work and they pretend to pay us”.

In fact one of the main reasons America has prospered over the past couple of centuries is because, by a process of self-selection, the nation was populated early with a lot of people with more than average initiative. It takes more than average initiative to uproot oneself from one’s culture and family, undertake a dangerous sea journey followed perhaps by a dangerous land journey, and then try to carve out a new life in a hostile wilderness. Or even in later times to immigrate to a city in a new country with a different language, different culture and different customs. Couch potatoes generally don’t do this.

Unfortunately this sort of initiative isn’t reliably passed down to one’s children and grandchildren, so that now, generations later when life is more comfortable, not so many of our people have this sort of initiative and drive. That is perhaps why these days new immigrants are twice as likely to start a new business as native Americans.

Liberal attempts to rectify this by focusing on making outcomes more equal simply misses the point. What will keep us healthy as a nation is making opportunities more equal, for example by working to offer better education for all. The outcomes will still be unequal, because people aren’t equal, but at least the outcomes will be better aligned with how hard people are willing to work and how much initiative they are willing to put forth.