Since my job is to proselytize on behalf of economic liberty, I’m always trying to figure out what motivates people. To be blunt, I’ll hopefully be more effective if I understand how they decide what policies to support. That’s a challenge when dealing with my friends on the left since some of them seem to be motivated by envy.
Unsurprisingly, there are people on the other side who also contemplate how to convert their opponents.
Harvard Professor Maximilian Kasy wrote a column for the Washington Post that advises folks on the left how they can be more effective when arguing with folks on the right. He starts with an assertion that conservatives are basically impervious to facts.
Worries about…our “post-factual era” impeding political debate in our society have become commonplace. Liberals…are often astonished at the
seeming indifference of their opponents toward facts and toward the likely consequences of political decisions. …A common, though apparently ineffective, response to this frustration is to double down by discussing more facts.
This is a remarkable assertion. I’m a libertarian rather than a conservative, so I don’t feel personally insulted. That being said, conservatives generally are my allies on economic issues and I’ve never found them to be oblivious or indifferent to facts (I’m speaking about policy wonks, not politicians, who often are untethered from reality regardless of their ideology).
So let’s see how Mr. Kasy justifies his claim about conservatives. Here’s more of what he wrote.
…maybe the issue is not conservatives’ ignorance of facts, but rather a fundamental difference of values. Taking this point of view seems essential for effective communication across the political divide.
I basically agree that differences in values play a big role, so I’m sort of okay with that part of his analysis (I’ll return to this issue in the conclusion).
But my alarm bells started ringing at this next passage.
Much normative (or value-based) reasoning by liberals (and mainstream economists) is about the consequences of political actions for the welfare of individuals. Statements about the desirability of policies are based on trading off the consequences for different individuals. If good outcomes result from a policy without many negative consequences, then the policy is a good one.
Huh? Since when are liberals (and he’s talking about today’s statists, not the classical liberals of yesteryear) and mainstream economists on the same side?
Though I admit it’s hard to argue about the rule he proposes for policy. He’s basically saying that a change is desirable if “good outcomes” are more prevalent than “negative consequences.”
That’s probably too utilitarian for me, but I suspect most people might agree with that approach.
But he makes a giant and unsubstantiated leap by then claiming it would be wrong to repeal a supposedly good policy like Obamacare.
When Sen. Kamala D. Harris (D-Calif.) remarked on the Affordable Care Act this spring, for example, she said, “…we’re talking about something that would deny those in need with the relief and the help that they need, that they want and deserve…” In other words, if a policy will harm the welfare of individuals in need, it’s a bad policy.
Huh? What happened to his utilitarian formula about “good outcomes” vs “negative consequences”? Sure, some additional people have health insurance coverage, but is he blind to rising premiums, job losses, higher taxes, loss of plans and loss of doctors, dumping people into Medicaid, and other downsides of Obamacare?
If facts are important, shouldn’t he be weighing the costs and benefits?
In other words, Kasy must be in some sort of cocoon if he thinks the Obamacare fight is between Republicans motivated only by values and Democrats motivated by helping individuals.
His analysis of the death tax is similarly off base.
…consider the example of bequest taxes, labeled “estate taxes” by liberals and “death taxes” by conservatives. A liberal might invoke various empirical facts…our empiricist liberal might conclude that bequest taxes are an effective policy instrument, providing public revenue and promoting equality of opportunity. The conservative addressee of these facts might now just shrug her shoulders and say “no thanks.” Our conservative likely believes that everyone has the right to keep the fruits of her labor, and free contracts of exchange between any two parties are nobody else’s business. …Taxing bequests thus means punishing moral behavior, the exact opposite of what the government should do.
Once again, Kasy is deluding himself. Conservatives do think the death tax is morally wrong, so he’s right about that, but they also have very compelling arguments about the levy’s negative economic impact. Simply stated, the death tax exacerbates the tax code’s bias against capital formation and results in all sorts of economically inefficient tax avoidance behavior (with Bill and Hillary Clinton being classic examples).
His column concludes with some suggestions of how folks on the left can be more persuasive. He basically says they should appeal to conservatives with values-based arguments such as these.
We should evaluate the policy based on its effect on individuals, and assign a higher weight to the majority of less wealthy people. …nobody can be said to consume only the products of their own labor. We rely on social institutions including markets and governments to provide us with all the goods we consume, and absent a theory of just prices (which present day conservatives don’t have) there is no sense in which we are entitled to specific terms of exchange.
I’m not the ideal person to speak for conservatives, but I don’t think those arguments will win many converts.
Regarding his first suggestion, Kasy’s problem is that he apparently assumes that people on the right don’t care about the poor. Maybe I’m reading between the lines, but he seems to think conservatives will automatically favor lots of redistribution if he can convince that it’s good to help the poor.
I think it’s much more accurate to assume that plenty of conservatives have thought about how to help the poor, but they’ve concluded that the welfare state is injurious and that it is more effective to focus on policies such as school choice, economic growth, and occupational licensing.
Indeed, I hope most conservatives would agree with my Bleeding Heart Rule.
And his second idea is even stranger because economic conservatives have a theory of just prices. It’s whatever emerges from competitive markets.
Let’s close with a column by Alberto Mingardi of the Bruno Leoni Institute in Italy. Published by the Foundation for Economic Education, the piece is relevant to today’s topic since it looks at why an unfortunate number of intellectuals are opposed to economic liberty.
…some have replied that the main reason is resentment (intellectuals expect more recognition from the market society than they actually get); some have pointed out that self-interest drives the phenomenon (intellectuals preach government controls and regulation because they’ll be the controllers and regulators); some have taken the charitable view that intellectuals do not understand what the market really is about (as they cherish “projects” and the market is instead an unplanned order).
Alberto then shares Milton Friedman’s answer.
I think a major reason why intellectuals tend to move towards collectivism is that the collectivist answer is a simple one. If there’s something wrong pass a law and do something about it. If there’s something wrong it’s because of some no-good bum, some devil, evil and wicked – that’s a very simple story to tell. You don’t have to be very smart to write it and you don’t have to be very smart to accept it.
My two cents, based on plenty of conversations with well-meaning folks on the left, is that there’s actually a lot of agreement of some big-picture values. We all want less poverty and more prosperity. In other words, I think most people have similar good intentions (I’m obviously excluding communists, Nazis, and others who believe in totalitarianism).
But similar good intentions doesn’t translate into agreement on policy because of secondary values. Especially differences in whether we view “equality of outcomes” as an appropriate goal for government. Some on the left openly are willing to sacrifice growth to achieve more equality (Margaret Thatcher even claimed that they would be willing to hurt the poor if the rich suffered even more). Folks on the right, by contrast, are much more focused on helping the poor with growth rather than redistribution.
[…] if that will ever happen, but at least I can take comfort in that I will never be as deluded as this columnist who thinks he has discovered a way of becoming a more persuasive advocate for […]
[…] there’s now cultural pressure for such people to adopt left-wing views (a good example is the condescending tone of this Washington Post column). Simply stated, most educated people want to be seen as urbane and […]
fellas,
It aint my problem you do not understand how Capitalism works. I blame the Yank education system.
Go away and study the term consumer sovereignty. It is very important for Capitalism to work well.
“Video Shows Millennials Supporting Socialism Even if It Causes Starvation”
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You’re right. Life’s short…and there’s lots of fishing…golf…yoga…camping…play some guitar at home…. Technology, cancer cures, …there are enough people doing that already, there’s an oversupply, typical situation, oversupply, not enough demand. I’ll wait for some crony stimulus to draw me back to work…
Zorba, let it go. Nottrampis appears impervious to logic, or is just trolling you.
no mate it ain’t socialism but capitalism pure and simple. People get ahead by the intellect, physical strength etc not because of mummy and daddy.
I do not know why you are bringing inequality into it.
Either meritocracy rules or you keep it away. You obviously do not believe in meritocracy where the best rise to the top. I do. Capitalism thrives on it. ipso facto you do not believe in Capitalism.
It’s not about the advantage of the children, but rather the motivation of the parents. If the children are not worth it then they just become pass through entities. They waste the inherited wealth and it ends up in the hands of people who are worth it. But with your approach, parents who could create a dozen jobs each (not to mention the economic activity) are just fishing by the lake. Lots of wealth is not generated in the first place. Yes, perhaps the Gini coefficient drops, but on aggregate the nation is exponentially poorer due to foregone growth. The socialist economics of throwing away the baby with the bath water. Priority to equal distribution over production. Fixed finite benefits instead of exponential growth. The experiment is unfolding as we speak.
A wealthy person has already given their children a leg up by allowing them an education that others might not have. You want to give them an overwhelming advantage
Capitalism cannot survive without meritocracy. If wealth is simply a recipe of genes the country will eventually decline. I am surprised people think THEIR children need such an advantage.
If I’m going to create wealth that I cannot pass to my children then thanks, but no thanks. Many, many people have already dropped out of the hard competitive life of business — even at current taxation levels. You don’t see that because these dropouts are simply not famous. They simply live happily at the bigger house st the end of the cul de sac, happy to have contributed a handful of million to the world economy and human prosperity, instead of tenths or hundreds of millions. With additional taxes (during or after life does not really matter) you will simply push more competent people past the dropout decision.
This experiment in high vs low taxation is going on as we speak. And as everything human moves so much faster — and accelerating — in this early twenty first century, the verdict will manifest soon.
What a death duty does is encourage to do a Carnegie so to speak. The wealthy parents get rid of most of their money. Death duties rarely take in a lot of revenue. Tax is not confiscation
This is how the talented people rise to the top. social mobility is a key thing for Capitalism to work as it should. Meritocracy should pre-dominate.
As for markets yes if you get Government that allies itself with Business then yes you will have anti-competitive behaviour. You saw it over there with the robber barons. We had it down under for a long time.
You do need however Government to promote competitive markets. Ensure that consumer sovereignty reigns so to speak. It does not happen naturally as Adam Smith showed.
It all depends on the government and the electorate demanding it
[…] people on the right and left argued within the bounds of decency. Yes, I’ll call my opponents big-government statists and they’ll call me a heartless capitalist. I’ll say they’re trying to create […]
nottrampis,
You keep repeating the point that people who inherit wealth didn’t earn it themselves, and perhaps they are not talented enough to earn it. Also, that it’s good to leave capital in the hands of people who can invest it well.
I dispute none of that. But it’s irrelevant! Are you truly reading my comments? For the third time: How does government seizing the wealth of dead people put wealth into the hands of people who will invest it well?
Perhaps you have not answered because there is no answer. Because inheritance taxes do NOT guarantee that wealth will flow into the hands of people that will invest it well. It only guarantees that some portion of inherited wealth will not be inherited by someone who may or may not invest as wisely as their parent.
Which then raises the question of where is the logic or reason in your argument? Your argument seems motivated by an over-developed sense of fairness rather than what will provide the greatest good for the greatest number. And you ignore the morality of allowing people to keep what they have earned.
You seem fairly ignorant about markets. Few people want totally free markets with zero regulations. That is called anarchy. “Free market” is shorthand for “mostly free markets with only the minimum needed government intervention.” You appear to be arguing against something that exists only in your own mind.
Free markets as commonly discussed ARE competitive. When consumers and businesses have freedom to act, but must also mutually agree on the terms of transactions, that leads to choices and competition. True monopolies are quite rare, and they usually come into existence only if government enables them. It is government that typically thwarts competition, not freedom!
It is not confiscation.It is a tax that is highly progressive and benefits society.
Perhaps you should read about Sparta!
Good. Let’s have competitive markets then. You, in your society, go ahead and confiscate wealth upon death. I, in my society, I will not. Let’s then see who has the most aggregate motivated competent people, and let’s see who comes out ahead.
[…] Right, Left, Facts, and Values […]
Inherited wealth means that person has money and has done nothing to deserve except have the right genes. Allocating the best use of capital does not come into it. They have inherited it.
Free markets have little regulation which is needed and thus develop into monopolies or oligopolies. That is the big difference. We want competitive markets.
Capitalism is at its best when people utilise capital the best and the markets are competitive.
Abhorrence or not,many lesser millionaires, millionaires perhaps as intelligent and capable (and actually much more numerous) than the famous ones… hit the golf course and retired by their vacation homes once they got into estate tax territory.
I’d argue that for most people the hope (and indeed sometimes it’s just a hope) that their children will benefit from the patents’ labor is a stronger motivator than buying Porsches for themselves.
Punishing that desire as “abhorrent” hits human ingenuity (and growth) rather hard.
notrampis, you are clearly more educated than me, but I cant help being concerned by your terms. Inherited wealth an abhorrence? Abhorrence is a very big concept. We are to be primarily about the most efficient use of capital? F*** me, I thought we were allowing people people to decide how to use their own capital.
If its all about efficient use of capital, I can think of a mountain of skulls to correct the appalling, nay abhorrent, misuse of wealth that is the modern public sector, not-for-profits, subsidy sucking clean-energy scams and other tax-hoovering entities and activities.
And then there is the New York Times and many other critical enterprises, destroying shareholder value since 1996.
nottrampis,
I agree that we want the people who can best use capital to have it. That is a great argument for a low or zero capital gains tax. How is it an argument for inheritance tax? How does government seizing the wealth of dead people put wealth into the hands of these wonderful people who will invest it well???
Inheritance tax typically raises little money. It cannot really substitute for income tax, if that’s what you’re thinking. Unless inheritance taxes are raised substantially. And then you would discourage all those first-generation wealth-creators from creating wealth in the first place!
Please explain how FREE markets are different from COMPETITIVE markets. To me, those two terms mean about the same thing. That is, when people are free, competition will exist.
For the Capitalist system to succeed you want the person who can do the most to capital
Unless it is an absolute fluke it will not come from some-one who has inherited it.
Meritocracy is essential I would have thought.
I might add I hate fee markets but love competitive markets. It is an important distinction AND they are different!
nottrampis,
Why is inherited wealth an abhorrence? Maybe not as ‘good’ as directly-created wealth, but certainly not abhorrent. Assuming wealth was created by free-market satisfaction of customers (say, Apple), it is not abhorrent whether created last year or 100 years ago.
Here are two reasons to be against a death tax:
One, that wealth was already taxed once as personal or business income. Death taxes amount to double, or even triple, taxation. Why would libertarians support unfair taxation?
Two, in some cases, where the wealth is tied up in all the assets of a family business or farm, death taxes cause the partial or total liquidation of those businesses or farms. This also seems a bit unfair. This liquidation process could also create some economic inefficiency. I don’t see how government seizing the wealth of dead people automatically results in more efficiency than leaving the wealth with heirs.
Now, if given a choice between death OR income tax, I’d probably choose to impose the death tax. If we must discourage one thing, probably better to discourage inherited wealth than the initial creation of wealth. Maybe this is what you mean. But that doesn’t mean a death tax is desirable. And we do not live in that imaginary world of death tax OR income tax. We live in a country with death taxes AND income taxes.
I would have thought libertarians would agree with death duties or whatever you want to call them in yankee land.
Inherited wealth is a abhorrence surely. Isn’t it all about allocating resources to it most efficient means. this won’t occur with inherited wealth. We want wealth from people whop use capital most efficiently.
By the way Friedman was quite disagreeable with Hayek. Far more than Keynes. Even he could not see the reason for having a recession on a recession. ( see David Glasner) although Hayek did recant his views on this, Even advocated higher public expenditure!
If only he had done this in time we would have had no Nazi Germany!
there is little doubt that we live in a post-factual era… effective talking points and the emotional appeal of the narrative are of more concern than a fact based argument… time after time information from hard science studies has been manipulated to increase the emotional appeal of a particular political narrative… in many cases… in order to enhance the leftist argument for higher taxes and more redistribution… (the fudging of climate data is a prime example)… junk science… propaganda… and fake news rules the day… how are voters to make good decisions that benefit the republic with nothing to base those decisions on but propaganda and disinformation? I think voters are sick of it… (trump’s election proved that)… I hope the socialist democrats pay a heavy price for their conduct next election cycle… the American version of China’s cultural revolution… will ultimately fail… the politics of division will fail… but at what cost?
[…] Mitchell. The capitalist way of environmentalism. How to argue across the aisle. “Unsurprisingly, there are people on the other side who also contemplate how to convert […]
smapple, I don’t usually post comments that say “yeah, you’re right!” but feel compelled to say yes, yes, and yes. Much wisdom in you and Hayek.
Hi Zorba. I agree with you 100% about the power of compound growth and taking the long-term view. Unfortunately, I think that the vast majority of people across the political spectrum do not fully understand or think that way.
I think progressives are motivated quite a bit by passion or emotions, as opposed to reason or logic. That’s why they always want to argue on behalf of the little guy. Help the poor, the immigrants, the minorities, save the planet, etc. That’s why everything gets viewed through a filter that looks for oppressor and oppressed. Unfortunately, that same tendency toward passion/emotion also blinds them to facts and logic showing that their policy preferences are often harmful toward the victims they want to help. “It’ll work this time! We just need to do more of it!”
But of course these are just generalities and things like this are usually not 100% clear.
In my view the main concept that coercively collectivist people fail to understand is the simple arithmetic of exponents. They fail to realize that the longer term prosperity brought by perpetually compounding exponential growth, in the long term, dwarfs any of the finite (but immediate!) benefits achieved through redistribution.
But at the core… is their inability to understand how much really (and how quickly nowadays) exponential growth advances. They do understand the benefit… but in their minds they are off by a couple of orders of magnitude on the amount. Therefore they make the typical tradeoff error of choosing a small short term benefit instead of a virtually infinite compounding benefit in the future.
But they do have a hunch that growth, if not the dominant, is at least an important component of prosperity. Motivated by idealistic hope which does not match basic human nature they then plug that logical hole by proceeding to claim that people will actually produce more when the fruits of their labor are taken from them and their families and redistributed to distant unknowns. So they proceed to claim that forcibly redistributive societies are more productive as a whole and grow faster. Thus claiming that redistribution not only gives you more redistribution cake today, but many more growth cakes in the future. It is wishful thinking that goes against basic human nature ( a nature they are constantly and hopelessly aspiring to change) and goes against all utilitarian evidence about which societies prospered in the past and continue to prosper and grow at high rates today.
By the standards of 1000AD virtually nobody in earth is suffering today. By the standards of 3000AD (or 2100AD for that matter since humanity has now entered irreversible high growth) we are all suffering wretched poor and short lives.
Our goal should be to get to 2100 sooner. That will dwarf all other effects of achieving prosperity through redistribution.
If people could realize how much more advanced and prosperous people will be in twenty, fifty, one hundred years, or longer, then they’d realize their short sightedness. In pushing redistribution over growth.
But in the end, for most people, a dollar of redistribution today is worth five perpetually compounding dollars of prosperity in the future. So, perhaps, I too am hopelessly trying to change the shortsightedness of human nature.
This is where religion comes in. It is the only element that is moderately successful in at least partially modulating basic human nature (for the better or for the worse). And, ironically, religions also compete in Darwinian fashion in the cultural domain. That is why nations that follow certain religions have been more successful. Some religions tell you to feed the poor, others to take from the rich to feed the poor….other religions have predicted the level of the human state hundreds of years from now. So they have predicted that the world of your descendants in one hundred years will be a human state that suffers because of your carbon emissions today, and are thus asking for “sacrifice” today.
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Mingardi has obviously not read Hayek. Firstly, time has proven that when power falls into a small number of hands, the first ones disposed of are the intellectuals, because they never agree with ANYTHING. And yet, there’s a small group of troublemakers who are willing to make the bad decisions, and agree on a path forward, so they- the Hitler’s and Mussolini’s end up in charge. Secondly, there’s only a small set of laws on which EVERYBODY agrees. Those are the only one we should have, and people can form smaller communities (states, counties, cities) that have more rules about the things that community believes in. That was the intent of our government from the get go.
Problem is we are over-lawed. The laws in this country effect the law abiding citizens more than those who break them, because they are going to break that law anyway. So, we are all inconvenienced for crap because one idiot tried something they decided to then make a law against. There are so many laws today that citizens cannot go a full day without (unknowingly sometimes) breaking at least one law.