Who truly cares about the poor? Who truly despises unearned privileges?
Dr. Kristian Niemietz recently wrote a brilliant blog post for the UK’s Institute of Economic Affairs on “The economics of political correctness.” His argument is equally applicable to the topic of compassion for the poor.
Niemietz asserted that political correctness is what economists call a “positional good.” It is a source of moral superiority, and it is depleted as the good is more widely shared. Think of the paradox faced by “alternative music fans” needing to scramble in response to their favorite bands’ mainstream success. They seek out more obscure artists to like as a litmus test to differentiate themselves, the authentic fans, from “the posers.”
The PC brigades today find themselves in a similar race to keep their status as valiant foes of the unenlightened, even as society has never been more inclusive.
Similarly, the spread-the-wealth crowd works to maintain their position as protectors of the 99 percent. Perhaps they are surprised by the still-growing ranks of Tea Party-inspired Republicans and libertarians who make a populist case for limited government and free-market capitalism as the best recipe for increasing prosperity for all.
Jonathan Chait wrote last year in New York magazine: “The main thrust of American politics is fairly simple: Democrats want to redistribute resources downward, while Republicans don’t.” Those on the left see this as proof that they own the moral high ground. I see here a lazy refusal to ask the question “but does it work?”
Fifty years after LBJ declared war on poverty, it is easy to agree with John Goodman of the National Center for Policy Analysis: that war had a loser and it was us. Fifteen trillion dollars has done little to reduce poverty, and much to incentivize government dependency where we once had individual responsibility.
Looking beyond our borders, William Easterly argues in Foreign Policy (and a new book) that attempts to develop Africa via top-down foreign aid and World Bank-led projects have actually harmed the poor and have propped up dictators. There remains a conceit that only enlightened technocrats can bring development to the “helpless parts of the world” – to borrow the paternalistic phrasing of President Woodrow Wilson – but the truth is very different. Aid programs can undermine homegrown efforts to solve problems, and can fuel corruption and other social ills.
The refusal to wrestle with the actual results of big government policies – here and around the world – affirms this idea that compassion for the poor is to some a “positional good.” It can be valuable for affirming one’s own sense of moral superiority, even when failing to produce any actual benefits for the poor.
As free marketeers promote policies that would create jobs and real economic opportunity for today’s poor, they should not shy away from noting that the moral preening of their ideological opponents is disconnected from true compassion.
Fred Siegel recently wrote an important history of the past century called The Revolt Against the Masses, which Michael Barone summarized succinctly: “the roots of American liberalism are not compassion but snobbery.”
Free market advocates should continue on this line. Expose how big government elites (in both parties) take advantage of the leviathan state we have built and adopt compassion as a pose. Work to remove privileges and create a fair marketplace with equal opportunity. Differentiate between inequalities that come from government privileges, and inequalities that result from risking capital in enterprises that prove productive. Engage in the debate over whether free enterprise or big government is better suited to help the American people.
While free markets do not perfectly reward merit, they do incentivize productive and benevolent behavior. Steve Jobs created wealth – for himself and Apple’s employees, vendors and shareholders – by reinventing how we can communicate and consume entertainment. This was not a philanthropic project; it was a commercial one. Nevertheless, society at large benefited from the innovations that arrived with their iPods and iPhones.
In our daily life we see how virtuous behavior is reinforced by market forces. Paycheck-wielding retailers seem to have more success than parents in getting teens to say “thank you” and “how may I help you?” Employers compete against one another to attract workers with fair wages and benefits. Customers choose vendors that offer a good deal and treat them with respect. In each situation, money flows according to value created in a system of free competition.
Contrast this with the cronyism that breeds in Washington. When the government interferes in economic decision-making, money flows to those who can deliver favors to politicians. When government officials “address inequality,” they override the dispassionate workings of a free market that has tended, over time, to raise living standards of even those in the poorest parts of our society.