Wednesday, January 23, 2013

Does David Brooks Really Believe Republicans Are Market-Oriented?

In his most recent column in the New York Times (here), David Brooks correctly observes that President Obama's second inaugural address set forth a highly progressive agenda focused on big government initiatives, ignoring both the potential for government failure and the fact that, throughout its history, America has prospered thanks to the "decentralized genius" of its markets, private universities, and local communities. But he lost me when he contrasted the "party that talks of government," and "one that talks the language of the market." I'm pretty sure the first party he had in mind was the Democratic Party, but I'm not sure what party in the US "speaks the language of the market"?

Is it the Tea Party, which refers to Obamacare as socialism, while demanding that the government leave Medicare alone, as if spontaneously emerged, fully formed, from some Hayekian dream? Surely, he cannot have meant the Republican Party, which ardently supports corporate welfare, i.e., using government to subsidize favored industries, such as fossil fuels and agricultural, while seeking to limit the freedom of gay people to marry and of women to make choices in health-care markets.

It is useful to bear in mind that pro-market is not necessarily the same thing as pro-capitalist. As Adam Smith recognized more than 200 years ago, every market seller is a would-be monopolist, who would seek special favors from politicians to obstruct competition. I'm pretty sure the Republican Party is pro-capitalist; I'm not so sure it's pro-market.

Brooks is quite right about the absence of any party in the middle that talks about both government failures and markets failures. But who would be naive enough to expect to find a political party that, instead of seeking votes in highly competitive political markets, actually spent its efforts pissing off almost all segments of the woefully under-educated electorate by trying to actually solve complex problems in a second-best world, where all of the available mechanisms for resolving social dilemmas fail to one extent or another.

A FURTHER THOUGHT: David Books was too hard on President Obama's inaugural address. It's true that the president focused exclusively on things government can do; but if you look at the issues on which he focused - climate change, immigration reform, reducing discrimination against gay and lesbian citizens, etc. - these are problems that require more public, rather than private, entrepreneurship. A stable climate, for example, is a public good that would be systematically under-provided by private markets. Immigration reform means change to an existing system of laws, something private markets cannot possibly do. And issues concerning the legal status of citizens is another chore that is inherently governmental. We might usefully debate the level of governance at which these various issues would best be treated. But they are simply not the kind of issues that Wall Street or Main Street would ever likely resolve on their own. At least the president was not supporting all kinds of government policies for issues that are better left to private actors in economic markets.

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