Monday, February 13, 2006

On prosperity...

Inevitably when people debate an ism, differences will be exaggerated due to different impressions of what the ism in question is about. We've had this lately over economic liberalism. What does it mean? Is it necessary? Etc.

So, weighing in: economic liberalism is broadly speaking, the idea that it is good for people to have money that they are free to spend. That is, that prosperity is good. And it is quite evidently true: prosperous countries and individuals have more freedom, better health, better environments and so on than poorer countries and individuals.

This is a crude mini-definition, and a different slant to Rob Knight and Femme de Resistance, who I agree with. But I think it would be illuminating to go through some of the positions opposed to economic liberalism in this sense.

First, there is a socialist objection, based perhaps on Marx's theory of value, that A's prosperity means B's poverty - that the two are inextricably linked. This is simply an error, except in one respect: positional goods - the ability to buy, say, the nicest house in the neighbourhood. If you become richer than me then you can buy it and I can't. But this sort of positional movement is morally neutral - it doesn't change the totality of good outcomes.

Next, Greens frequently believe that prosperity is bad because it leads to environmental destruction. Again, they are wrong. There may be specifics of some activities causing both, but it is not destruction of the environment that adds value. Where the good of prosperity conflicts with the good of the environment, there is a social choice to be made, but this doesn't make prosperity any less good.

There is a tendency towards asceticism in much religious thought. While as an individual choice, your asceticism is none of my business, it is possible for the values to leak into judgements about other people. The idea that it is alright to be poor is a dangerous one. If you believe it, listen to "Common People" by Pulp until you change your mind.

So, moving on a little, there is then the view that my prosperity is good and yours is bad, so my objectives should be to maximise my prosperity at the expense of yours. There are three examples of this that I can think of.

The first two are Class War fought on behalf of a) the poor and b) the rich. To many people these are precisely what politics is about, and so liberals are accused of being non-political. Class war from the left has now largely been abandoned, but there are still elements of it coming from the right, from the 'nasty party'. It is by no means a dominant theme of the Conservative Party, but that party is still the party for nasties to join, and it is the place to go if you want to hear loathing and contempt for ordinary people expressed. And there are a few businesses, Poundshops and sweatshops, that would prosper less if people prospered. So there are likely to be some interests against any liberalisation, right and left, because the general prosperity would increase at the expense of their own.

The final example is illustrated by a story about a class of students in the US being offered two choices: a) that the US economy should grow 1% and the Japanese economy 10%; b) that the US economy should shrink 1% and the Japanese economy shrink 10%. A majority chose the second option. It is seeing national wealth in positional terms - probably based on the Hegelian view of the glory and inevitability of war; that all actions on the international stage should be seen as a continuation of war by other means. A hideous, right-wing, misanthropic position.

To me, this opposition to economic liberalism clarifies nicely what economic liberalism is about. And where does it come from? Not just the "left", but out of 6 examples, there are 2 from the left, 2 from the right, 1 from Greens and 1 from religion.

None of these objections to economic liberalism hold any water as far as I can see. Does this mean we should always pursue the most economically liberal policy? Of course not, it is a good thing, but not the only good thing. In general there is a synergy between the liberalisms, economic, social, political and personal. But sometimes there are conflicts and social choices to be made. The levels of taxation and provision of public services is the most obvious. The use of regulation to achieve social and environmental objectives is another. These are trade-offs between different desirable objectives, proper questions for democratic debate and honest differences between liberals. Appealing to first principles, to isms, tells us nothing.

Tag: economic liberalism


Anonymous said...

"So, weighing in: economic liberalism is broadly speaking, the idea that it is good for people to have money that they are free to spend. That is, that prosperity is good."

Here's an alternative view: Economic liberalism is the idea that it is right that people are free to decide on their own property, which they have either earned with the work of their body and mind (which they according to liberalism own), or has been given them as a present or inheritance by somebody who has earned it (and thus has the right to decide what to do with his or her property).

Joe Otten said...

Hmmm. How alternative is that? I am saying that is good for people to be able to spend their own money, enjoy their own assets, etc. That is more or less the same as what you are saying.

What are the differences?

1. I didn't say 'their "own" money', because that prejudges the question of property. It doesn't need to be prejudged, we win the argument over the protection of property hands down.

2. I don't use the language of rights. This seems appropriate - asserting a right is the same as making a political demand. I would rather such political demands are the conclusions rather than the premises of an analysis. Again, why prejudge the argument when we can win it?

Anonymous said...

There is a philosophical difference, though it doesn't have much effect to the outcome.

What you are basically saying is, that economic liberalism is good, because it increases prosperity, and prosperity is good. That's a utilitarian approach.

What I'm saying is that economic liberalism is just, because it is right that people are free to decide on their own body and property. That's a natural rights approach.

You can support economic liberalism for either of the reasons mentioned.

Joe Otten said...

Yes, I appreciate what you are saying.

I suppose my problem is this: saying that "it is right that people are free to decide on their own property" is good rhetoric, but somewhat circular.

If you are not free to control something, it is not in any meaningful sense your property. Hence my perspective - that it is good for people to have property, which implies the ability to control it.

And indeed, a communist state could claim that all its citizens have full control of all their own property, just that they don't happen to have any property. The state owns it all and isn't selling.

So to distinguish liberalism from communism, we would have to add: recognition of pre-existing property and freedom of contract. But both of these principles are tempered in some ways. We don't attempt to unpick historical injustices and conquests in determining ownership, and we prohibit some kinds of contract such as selling oneself into slavery.

This is largely as it should be. I don't expect broad principles to be able to suggest in detail what the limits of freedom of contract should be. Whereas utilitarian considerations can.

Anonymous said...

It's not circular. What you are basically saying is, that if your property is stolen, it is no longer your property, so no damage has been done. That if anything is rhetoric and circular.

Joe Otten said...

That is quite plainly not what I am saying - I just said that it is good for people to have property, which is the opposite of what you accuse me of.

The reason for this confusion appears to be that I am talking about recognised legal property, and you seem to be talking about a kind of 'natural law' property. Hobbes etc.

So, yes, given a natural property concept and a communist state, what you have is mass theft and therefore harm. My point would be that the harm remains even without a natural property concept.

I would rather avoid arguments based on the concept of natural property. It seems to me no sounder than claiming "it is obvious that I should own this". Socialists make the same argument when demanding that workers should enjoy the fruits of their labour, "which they have ... earned with the work of their body and mind". (If you are the same anonymous as posted the first comment).

This is very much a philosophical difference - I am suspicious of deontological thinking - I would rather justify legal principles such as property by the considerable benefits that they bring, rather than an appeal to what is natural or holy or fair: these are ultimately opinions.