Tuesday, January 12, 2010

Moral Growth

Economics has always given me a headache - especially because despite being difficult, even the big boys get incredibly partisan. Someone has to be right, but one is skeptical when their economic theories seem to match up so nicely with their sense of social fairness and human behavior.

But one thing that is always particularly irksome to me, as a leftist, is the degree to which the right blames leftist policy for a lack economic lack growth. So you have a principled opposition to redistribution as being illiberal, which then just happens to be bad for economic growth. Those to me seem like two distinct problems. If redistribution was illiberal, yet good for economic growth, it would still be wrong. And likewise, if redistribution was necessary for freedom, but bad for growth, it would still be right.

Of course, the devil is in just how far one influences the other. If any policy is bad enough for growth, leading ultimately to a decline, then whatever freedom gained would be irrelevant. And here is where, I believe, the right gets its wedge in: the immorality of social inequity is always justified by the larger emphasis on growth - the rising tide and all that. And to the degree that the tide just doesn't rise high enough for those at the bottom to be considered truly free, well, that battle can be fought another day.
"Look at all the generational poverty!"
"Yes, but they have COLOR TVS!"
So here we have the "rising tide", the "trickling down", being philosophical gold. So much of conservatism's economic and moral construct becomes dependent upon the validityof this premise: not only is redistribution wrong, it is actively harmful to the economy. Redistributive social spending, while well-intention, is actually hurting people by dragging down the entire economy. At the far end of this spectrum, you get the wingnuts claiming that any day now the hammer and sickle will replace the stars and stripes.

But what would a moderate increase on taxation really do? We know for certain that it would be helpful to many struggling Americans. There are any number of ways to do it effectively. There are also many ways to do it poorly, but the fact is that concrete things can be done if we believe in the idea. (Much of the outrage over wasteful spending has more to do with the fact that it is unwanted then that it is poorly executed).

But what we do not know for certain is how much of a drag any of it really is on the economy. It may be unfair, or immoral, but does that make it that bad for the economy? If I steal from my neighbor, and invest the money in something that creates growth, I've just done something wrong for one person, yet something right for the economy.

We can argue all day about whether social spending represents a better investment than private business investment. But the two are not mutually exclusive. Considering how much better - from a left perspective - Europe is on social initiative, I'm pretty happy about the margins of real disagreement on who is better at growth. One thing is certain, Europe isn't painting a hammer and sickle on its flags any time soon.

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