The Moral Authority Test
By Arnold Kling
Tim Carney reports on the latest project from the Mercatus Center.
George Mason University’s Mercatus Center this week is kicking off a series of papers on cronyism and business-government collusion.
(Seemingly-related Video from LearnLiberty)
You can think of the project as having two goals. One goal would be to clarify for conservatives the distinction between being pro-market and being pro-business. I think that some progress toward this goal is possible.
The other goal would be to persuade liberals that deregulation can be a way to reduce the power of big business. On that goal, I am much less optimistic. You can talk all day about regulatory capture and how big government serves entrenched interests. And what the liberals will come back to you with is, “Yes, that is why we need campaign finance reform and to elect politicians who believe in stronger regulation.”
Folks like Luigi Zingales dream of making anti-crony-capitalism a winning issue for Republicans. I want Republicans to be anti-crony-capitalist, but I don’t think it’s a winning issue.
I picture liberals as having an unshakable belief in the power of moral authority. That is, if you exert enough moral authority, you can overcome any problem. Or, to put it in negative terms, if any problem exists, it is because not enough moral authority has been exerted to try and solve it.
From that perspective, proposing a market solution, which is necessarily imperfect, comes across as evil. Instead of summoning moral authority, the market-advocate comes across as willing to tolerate something that is just wrong.
Imagine that any policy proposal has to pass the following criterion:
If you had unlimited moral authority, is this what you would propose?
Call this the moral authority test. And, yes, I am being coy about defining “moral authority,” because I think it is more of a feeling than a tangible concept. Maybe “moral outrage” would be a better term.
The notion that the best way to reduce big-business privilege is to reduce regulation clearly fails the moral-authority test. It is almost never the case that the sole intent of regulation is to promote privilege. The usual case is that regulation is undertaken with some worthwhile purpose, and the advantages given to large incumbent firms are a side-effect.
For example, consider differentiated regulation of banks that are “too big to fail.” The intended purpose is to make our financial system safer. The side-effect is to privilege the biggest banks. But to suggest deregulation as the solution would not impress liberals. Even if current policy both fails to achieve its intended objective and results in adverse side-effects, deregulation still fails the moral authority test.