In this post I’ll offer a couple of suggestions to two groups that seem to be hurting their own cause. Let’s start with the progressives.
The mainstream parties in much of Europe have recently presided over some very ineffective economic policies. Perhaps as a result, some right-wing, nativist, authoritarian parties have risen in the polls. One of the most successful is Italy’s Northern League, which is now proposing a “fiscal shock” including a 15% flat rate income tax, as a way to stimulate the economy:
Italy’s deputy prime minister and leader of the anti-immigration League party said that Italy “must lower taxes”.
“We need a Trump cure, an Orban cure, a positive fiscal shock to restart the country,” Mr Salvini said in a radio interview on Tuesday. “Not everything all at once, but the goal is in the government contract.” . . .
Mr Salvini has been emboldened by his League party coming first in Italy in this weekend’s European elections. As a result, he is planning to push ahead with reducing Italian income taxes to a flat rate of 15 per cent. The measures would cost €30bn, he said, and would in part be funded by cutting other spending.
There are even rumors that Italy might leave the euro.
Here is the danger that I see for progressives. In Europe, progressives have essentially forfeited the “growth” issue to the extremes, through a foolish set of anti-growth policies. On the supply side, heavy taxes and regulations have slowed growth in countries such as Italy and Greece. On the demand side, the ECB has been a disaster, allowing only anemic growth in eurozone NGDP. This combination is especially problematic in places like Italy, where wages are quite inflexible and thus less able to adjust to slow NGDP growth than places such as Germany or Hong Kong.
Political parties that are in many respects quite unappealing can take advantage of this state of affairs by promising faster economic growth. And importantly, if the progressives have failed to take advantage of options like a 15% flat tax, or more expansionary monetary policy, there is every likelihood that these populist parties will actually be able to deliver faster growth. History of full of examples of nasty political movements (on both the left and the right) that gained credibility by delivering faster growth for 5 or 10 years, until it all fell apart in disaster. (Venezuela is a recent example, but even more ominous precedents exist.)
In my view, the biggest weakness of the Obama administration was its complacency about the growth issue. There was little effort to boost the supply side through tax reform and/or deregulation, and the administration also put little focus on the need to put advocates of monetary stimulus onto the Federal Reserve Board. This left “low-hanging fruit” for the next administration.
I see libertarians facing almost the opposite problem, too much focus on growth at any cost. Here is Reason magazine:
Libertarians Forged an Alliance With Brazilian President Jair Bolsonaro. Was It a Deal With the Devil?
. . . Three years later, Bolsonaro is president. Ludwig von Mises scholars, free market think tankers, and even anarcho-capitalists now occupy top-level positions in his administration, where they hope to slash the government bureaucracy of the nation ranked as the absolute worst by the World Economic Forum in the category of “burden of government regulation”—a country that goes beyond regulating the number of hours that workers spend on the job to micromanaging the size and make of the punch clocks used to record their arrivals and departures. “I’m losing all my guys to government,” says Hélio Beltrão, founder and president of the Brazilian Mises Institute, with a grin.
But other prominent libertarians are outraged over their former comrades’ willingness to ally themselves with a politician The Intercept has called “the most extreme and repellent face of a resurgent, evangelical-driven right-wing attempt to drag the country backwards by decades.”
Bolsonaro is not a libertarian; in many ways he is sharply un-libertarian. He has been working to make it easier for police to kill civilians with impunity. He has repeatedly praised the military dictatorship that ruled Brazil from 1964 to 1985. He has flatly declared himself “in favor of torture.” And in 2002 he said, “If I see two men kissing in the street, I will hit them.”
I will concede that this sort of “deal with the devil” might work. Perhaps in a few years Bolsonaro will be replaced by a more tolerant figure and the economy will be reformed. One could argue that this is what happened in Chile (albeit at a brutal cost).
But there are far more examples of this sort of approach failing, and if it does fail then it threatens to discredit libertarianism in Brazil. This would be especially unfortunate, as Brazilian libertarians had recently been gaining adherents among the young, who were tired of their long history of failed statist policies, instituted by both the left and the right.
Bolsonaro himself seems to have little commitment to libertarian ideas, and populist politicians in Brazil have a history of eventually failing. If he does fail, will libertarianism also be discredited? And do libertarians really want to give the impression that they care more about money than human rights?
In the long run, libertarians and progressives have more in common than they suppose, despite significant differences on income redistribution. Policies that reduce poverty via rapid economic growth, as well as the protection of human rights (especially for unpopular groups), are consistent with both libertarian and progressive ideals. There are much worse options out there, and thus it’s important for these two groups to keep their eyes on the ball.
PS. I do not mean to suggest that mainstream “conservative” European parties are not also at fault. Here I’m defining European “progressives” fairly broadly for the primarily American audience of this blog. In Europe, even center-right parties have basically progressive views on economic issues, by American standards. But most mainstream European parties (left and right) have a blind spot on the need for a monetary policy that assures adequate NGDP growth. Of course my comments on President Obama do not need this qualifier.
READER COMMENTS
Mark Z
Jun 6 2019 at 12:57am
I think Europe’s political woes may be more political than economic. The EU has played the part of an overbearing parent, and the children have rebelled. The EU should loosen its grip and embrace federalism. In the long run, I think that’s the best way to take wind out of the sails of populist movements and rebellious children.
“Policies that reduce poverty via rapid economic growth, as well as the protection of human rights (especially for unpopular groups), are consistent with both libertarian and progressive ideals.”
I’m not sure I see this as true in practice. I think one ideology aspires to moral and legal equality and individual rights, and the other increasingly to collectivist revanchism and technocratic paternalism. There may be common ground between Nozick and Rawls, but that doesn’t necessarily translate to real life actvists and politicians.
Bedarz Iliachi
Jun 6 2019 at 3:26am
Commonality between the libertarians and progressives was captured by Dostoevsky in this quote from The Possessed:
John Hall
Jun 6 2019 at 7:18am
I follow Brazil pretty closely for work, but that’s the first I had heard about Bolsonaro’s government being full of libertarians. The big news in Brazilian politics right now is pension reform. Pension reform isn’t a “libertarian” idea, so much as its a “the government deficit is going to explode if we don’t do something” idea. Michel Temer (former President who replaced Dilma Rousseff) was very much in favor as well and he was more of a center-right person than Bolsonaro. Anyway, if Bolsonaro fails in any way, I wouldn’t doubt that libertarians will get the blame. Pinochet and the Chicago Boys is a common talking point against libertarians.
Mark
Jun 6 2019 at 8:03am
I think a good comparison point for progressives is Spain (where the center-left is still dominant and the far-right is still marginal) versus Italy. The two countries seem similar in a lot of ways, but Spain has 3% GDP growth and Italy 1%. That seems to make all the difference (even overcoming the fact that unemployment in Spain is much higher than in Italy).
Thaomas
Jun 6 2019 at 8:57am
In retrospect (and I was not that prescient at the time) Obama’s #1 priority in 2009 should have been a tax reform that slashed corporate rates and closed the structural (“full employment”) deficit with higher personal income (or progressive consumption taxes, sigh) while putting in a lot of temporary tax cuts like suspension of the wage tax that funds the SS and Medicare Trust Funds and yes. This MIGHT have given Bernanke the leverage to get the Board to “do what it takes” to fulfill its dual mandate rather than failing both to maintain/restore full employment and to maintain inflation at an average 2%.
TMC
Jun 6 2019 at 1:33pm
“Perhaps as a result, some right-wing, nativist, authoritarian parties have risen in the polls.” Authoritarian? If there’s one defining factor in the left to right scale, it’s that the left is highly authoritarian and the the right supports individual liberties. Your own example show the Italians wanting a tax decrease, others include the Brexiteers wanting to remove a layer of government and regulation from themselves, and here in the US, a change from the Obama administration’s added regulations to a removal of them and tax cuts.
“Policies that reduce poverty via rapid economic growth, as well as the protection of human rights (especially for unpopular groups), are consistent with both libertarian and progressive ideals.” No. Progressives limit growth while libertarians and conservatives fight for it. Same with free speech. Which side has attacked free speech, 2nd Amendment rights, and freedom of association in the past decade? Only the progressives.
Scott Sumner
Jun 6 2019 at 3:59pm
TMC, You said:
“If there’s one defining factor in the left to right scale, it’s that the left is highly authoritarian and the the right supports individual liberties.”
Certainly not in Europe, or the United States.
TMC
Jun 6 2019 at 4:15pm
I can’t speak to Europe other than the examples above, but certainly in the US. All the examples I gave, and your own indicate this.
TMC
Jun 6 2019 at 4:49pm
Your own example, and mine, belies this. Outside of the very extremes, which are virtually non existent in either the US or Europe, it is the progressive that is always curtailing individual rights.
Scott Sumner
Jun 8 2019 at 12:07pm
What are “individual rights” like in Alabama, a conservative state. Can you buy a Tesla? Get an abortion? Smoke pot? Physician assisted suicide? Can you buy alcohol in northern Alabama? Gambling? Prostitution?
TMC
Jun 8 2019 at 1:20pm
Outside of abortion, the answers are the same as most of the other states. Not sure that killing a kid counts as protecting an individual’s rights.
Net effects are that in the median red state, you interact with the government much less frequently than is the median blue state.
Scott Sumner
Jun 9 2019 at 1:23pm
TMC, I live in a state (CA) where pot is legal, alcohol is legal, I can buy a Tesla, physician assisted suicide is legal. I could name some other blue states with similar rules, and Nevada even has more freedoms. If you are in prison in Alabama for smoking pot, I’m not sure it matters that much if your state has fewer environmental regs than California.
TMC
Jun 9 2019 at 6:27pm
Same with me, outside of the pot, and that’s likely to change soon. I live in a fairly conservative suburb and have a rental in a pretty liberal suburb about 10 miles away. At my house, if I want to add an addition, a fence, or pool, it’s a nominal fee and about 3 days for approval, and inspectors will show up with 48 hrs notice. In the liberal suburb, to replace a failing porch with the exact same porch, it took an architect’s drawings, two appearances for the architect to show at building meetings and several hundred dollars in permits. Process took almost 3 months. And it’s probably better than the one you’d need to go through in CA. I just found out you aren’t allowed to walk your dog on a retractable leash there either, just because.
Cutting trees down, even if they are damaged, is an ordeal, always with permits and some kind of ‘professional’ involved. It’s hard to get a contractor to work there. Rules are no worse, just the process. Everybody wants in on your business.
zeke5123
Jun 10 2019 at 12:11am
I am not sure this is a winning argument. I am sure I can create a list of things you can do in Alabama that you can’t do in California (e.g., zoning laws).
Cato for example ranked the states by Freedom.
The bottom five states are:
Vermont
New Jersey
Hawaii
California
New York
Hardly a right wing group. See https://www.freedominthe50states.org/.
Now, the interesting thing is that the most free states tend to on average lean right locally, but are toss-ups for Presidential elections. This might make sense if you think the American right is on the whole prejudiced to be against government, but requires electoral discipline. Regardless, I think people need to admit that while the right is not really a friend of liberty, neither is the left. Also, the zeitgeist is left authoritarianism.
Mark Bahner
Jun 6 2019 at 5:01pm
Regarding left vs right in the U.S.:
Which side doesn’t support my right to go to Cuba if I want to?
Which side’s president talks about trying to pass stronger libel laws when the press says something he doesn’t like?
Which side’s president refers to military leaders as “my generals”?
Which side’s president declared a “national emergency” and invoked the National Emergencies Act to take power which no reasonable reading of the Act would say he has?
Which side’s president is threatening to apply tariffs on Mexican imports unless Mexico somehow takes actions that mollify him on travel across the border?
Which side’s president sides with Vladimir Putin against his own intelligence agencies regarding whether Russia interfered with the 2016 presidential election?
Which side’s president “fell in love” with Kim Jong Un?
TMC
Jun 7 2019 at 12:57pm
Which side’s president talks about trying to pass stronger libel laws when the press says something he doesn’t like? One side complains, as the Obama admin actively tried to squelch the press, using espionage charges against journalists 3x as many times as all other administrations combined.
Which side’s president refers to military leaders as “my generals”?
They report to him. Many CEO use this way of speaking all the time without odd complaints.
Which side’s president declared a “national emergency” and invoked the National Emergencies Act to take power which no reasonable reading of the Act would say he has? Carter still has one open, as do the rest. Obama had as many as any one of them, even bragging about using them.
Which side’s president is threatening to apply tariffs on Mexican imports unless Mexico somehow takes actions that mollify him on travel across the border? Travel? You mean illegal border crossings?
Which side’s president sides with Vladimir Putin against his own intelligence agencies regarding whether Russia interfered with the 2016 presidential election?
Nobody, except Obama when we was notified about it and refused to act.
Which side’s president “fell in love” with Kim Jong Un? None.
Mark
Jun 6 2019 at 11:39pm
That’s an odd way to look at it. Originally, the right meant people who supported monarchy during the French Revolution, and the left meant people who were against it. Both sides had plenty of authoritarians; if anything, the left was, on average, more pro-individual liberty.
The current left-right dichotomy still basically follows the original breakdown–people on the right support existing social structures (and are sometimes willing to use authoritarian methods to preserve them), and people on the left want to tear down existing social structures (and are sometimes willing to use authoritarian methods to do so). Individual liberty versus authority is a different dimension that is not related to the left-right dichotomy as generally understood.
Mark Z
Jun 7 2019 at 1:34am
In the US, I would describe it as follows (perhaps a weaker version of your positions).
On balance, the right in the US (especially today) is not particularly disposed toward individual liberty. One might argue that it’s no more disposed to individual liberty than the left (this depends on how one weights various positions). What (in my opinion, at least) distinguishes the right from the left is that the right has a libertarian wing, while the left doesn’t (at least among elected officials). There are elected officials on the right, like Rand Paul or Justin Amash, that oppose foreign policy intervention, etc. I don’t think they have analogs on the left. I suppose one could argue, though, that they are a negligible presence on the right, but I’m inclined to say that at least there’s something there.
Michael W
Jun 7 2019 at 11:28am
Then what to make the of liberaltarian movement embodied in writings such as those from the Niskanen Center?
https://niskanencenter.org/blog/get-liberaltarianism-left/
Mark Z
Jun 10 2019 at 10:26pm
The Niskanen Center seems to envision itself as ‘moderate’ more than anything else. Will Wilkinson seems to spend most of his time criticizing libertarians for being too libertarian. In any case, I look forward to the day when the Niskanen Center holds as much clout on the left as the Cato Institute holds on the right, but I won’t hold my breath.
Hazel Meade
Jun 7 2019 at 12:17pm
Doesn’t this argue for creating a libertarian wing in the Democratic party? What is stopping us from doing that?
Mark Z
Jun 8 2019 at 11:56pm
Nothing is stopping anyone from trying, just from succeeding. I think too many libertarian positions are sine qua nons for ~99% of Democratic primary voters. I just don’t think you’d get your foot in the door. Suspicion of markets and hostility to economic freedom seem too close to the core.
Benjamin Cole
Jun 7 2019 at 10:21pm
Well, lots of good commentary but the real weakness of the libertarian right-wingers in the US is that they have feet of clay, and thus appear to be (and effectively often are), mere mouthpieces for plutocrats and globalists.
1, Okay, I actually think the GOP-Trump corporate tax cuts were not bad. But why not triple the standard deduction personal income taxes instead? Reducing taxes on productive behavior is always a positive, and what make cutting taxes on wages more or less “libertarian” than cutting taxes on capital? (Besides that, the globe seems to have a glut of capital, and record corporate profits in the US—a corporate income tax cut was not really needed).
2. Why are libertarians so acutely and manifestly concerned with the right of multinationals to import to the US from communist China…and never mention the right of ordinary Americans to engage in push-cart, motorcycle sidecar or truck-vending? This makes US libertarians look like mouthpieces for multinationals, and not true libertarians.
3. Egads, property-zoning. Sometimes a topic, along the lines of “needs undefined reforms at an undefined future date.” Rent control is a diabolical plot against human rights and nature, let alone against sound macroeconomic principles.
4. The minimum wage is bad, bad, bad, bad, everyday bad!…the entire USDA is mentioned once in a while. (Gee, are you starting to see a pattern here?….as in libertarians are GOP’ers wearing fake halos?)
5. The Green New Deal to be financed by debt, is bad, bad, bad, bad! The $7 trillion in war debts for Iran, Afghanistan, Syria, Libya, Pakistan et al is not really a topic. MMT for war is not a topic.
6. Labor markets are tight! Danger Will Robinson, Danger! But danger for who?
In conclusion, US libertarians have not aligned themselves with the huge employee class in a positive way—-not for more welfare (which I oppose) but for reducing taxes on wages, increasing the supply of housing (through free-market forces), increasing business opportunities (promote street vending) and by promoting policies that will produce “very tight” labor markets. I hope for a couple generations of “tight” labor markets in the US.
In the last election, it was Hillary Clinton, Bernie Sanders and Trump. The GOP establishment was obliterated by Trump.
In 2020? Who knows. The Dems are running a cavalcade of socialists with lots of bad ideas. I guess Trump will be the GOP. The libertarians will be crowing for open borders and no minimum wages and more imports for Beijing…..a last hurrah for the globalistas?
andy
Jun 9 2019 at 4:37pm
Protection of human rights doesn’t seem to me a progressive ideal. They are generally good people and want a ‘better’ society (and on many issues rightly so); however they don’t care about human rights.
Many of their ideas align well with human rights, so they will support it to advance their cause. However, if human rights stand in the way to a better society as they see it, they will gladly ignore human rights and use state force to advance the issue.
At least if they could state that they consider the issue really so important, that infringing upon human rights is a lesser eveil. But they just ignore human rights completely. It’s not something that enters their ‘descision algorithm’ at all. (the better progressives seem to reduce all human rights into ‘right to vote’ and ‘free speech’).
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