Most free-market economists take “neoliberalism” as a term of abuse. Rather than actually respond to our arguments for smaller government and less regulation, the hard left just switches to name-calling.
I disagree. People who denounce neoliberalism are unintentionally paying free-market economists a great compliment. But sadly, we don’t deserve this compliment.
How so? Well, free-market economists have two kinds of views. Some are distinctive, such as:
1. We should sharply increase immigration.
2. We should heavily deregulate housing.
3. We should substantially cut government spending on health care and education.
4. Government should tax pollution rather than regulate it.
However, free-market economists also have numerous conventional views, such as:
1. The sky is blue.
2. Government shouldn’t spend tax dollars on projects with very unfavorable cost/benefit ratios.
3. Governments shouldn’t have large permanent budget deficits.
4. Redistribution has some noticeable disincentive effects.
So what? Well, when people decry neoliberal policy, they mostly target free-market economists’ conventional views. The reason is plain: Prominent government policies are often based on our conventional views. For example, many governments occasionally decide that their deficits are too big or too long-lasting, and pragmatically retrench. “Neoliberal austerity“? Please.
Our distinctive views, in contrast, are so unpopular that virtually no government will touch them. What politician wants to run on a platform to cut education spending by 5%, much less 50%?
The result, strangely, is that the critics of free-market economics inadvertently glorify us. They make it sound like we have a monopoly on common-sense and basic prudence. And we totally don’t! You don’t have to be a free-market economist to ask, “Are we really getting $1 billion worth of value from this literacy program?” You don’t have to be an economist at all. “Are we really getting $1 billion worth of value from this literacy program?” is what any responsible agent of the taxpayers would say. Sure, it’s not a nice question. But when you’re in charge, only a demagogue fails to ask.
READER COMMENTS
Dustin
Jan 28 2019 at 2:04pm
“are we really getting $1 B…”
Sure, because everything is measurable in dollar terms. How very rational and un-demagogue-y.
I strongly prefer national policy to reflect the tendency of the voting population rather than disconnected value judgments of one who rates too highly their own rational thinking as the just prescription for mankind.
Maybe, just maybe, people don’t place the same value on abstract measures quality of life as you, Bryan. And that’s OK.
robc
Jan 28 2019 at 2:40pm
Costs and benefits should probably be measured on the same scale, otherwise how can you compare them?
Often the costs aren’t measured in dollars either, so this isn’t an argument for converting everything to dollars. But if the costs are measured in non-dollar terms, we need to measure the benefits on the same non-dollar scale.
Mark Z
Jan 28 2019 at 6:07pm
If the benefit isn’t measurable in dollar terms, then there’s no reason to force people spend money on it. The great thing about dollars are we all agree they have value. You might prove a trillion dollar education program increases student’s ability to recite Keats from memory. That may be worth a trillion dollars to you, but it may be worth nothing to me, and there is no reason why your valuation ought to overrule mine; but when you get the state to implement the program, you have imposed your valuation of reciting Keats on me, no less than if I got all the anti-Keats people together and enacted a law making it illegal to promote Keats is poetry.
So yeah, it’s fine for you to measure the quality of life any way you choose. Just don’t force me and everyone else to share those value judgments. The absence of state subsidies or laws promoting your value judgments doesn’t prevent you from living by them. The existence of state subsidies or laws promoting your value judgments does force the rest of us to live by them.
“I strongly prefer national policy to reflect the tendency of the voting population…”
I doubt that. I bet if the voting population tended to think you ought to live in a cabin in rural Alaska and work as a lumberjack for a living, you’d be happy to flout their judgment. I think what you mean is, ‘I strongly prefer national policy to reflect the tendencies of the voting population that I share, while conveniently ignoring the tendencies they and I don’t share.’
Dustin
Jan 28 2019 at 9:19pm
Your assumptions about my owns are entirely incorrect. I am perfectly happy for people to have, and vote according to, their own value judgments.
Hooray for democratic republic.
And perhaps when you stop making assumptions about people, you’ll encounter interesting reasons for why people judge value the way the do.
Mark Z
Jan 28 2019 at 10:24pm
” I am perfectly happy for people to have, and vote according to, their own value judgments.”
That sounds like a surreptitious way of saying you’re perfectly happy for people to seek to force others to behave how they’d like them to. So, if the majority of Americans want Jews to become Christians, would you just accept the auto-da-fe, because it merely reflects the value judgments of the majority?
Democracy is a means to an end. It’s useful as a guarantor of a stable, free, and prosperous society. It confers no moral supremacy in and of itself. A wrong doesn’t become less wrong because just because more than half of the people living between some imaginary lines on a map approve of it.
Matthias Goergens
Jan 28 2019 at 8:55pm
The benefits don’t need to be measured in dollars. After all, you can’t eat dollars. But you need to be able to compare different uses:
Measuring in dollars is just a short hand for: is this the best we can do with these dollars of all possible alternatives, including just not taking the dollars from the tax payers in the first place?
It’s all about opportunity costs.
(And as a shorthand, the worth of a dollar is the benefit you could have gotten out of it’s best use.)
Jesse Connell
Jan 30 2019 at 6:40pm
I think people can talk about notions like $1B well spent vs poorly spent without rehashing the theory of money. I think your objection is overly pedantic.
Ron
Jan 31 2019 at 2:55pm
Yes, but can they talk about it intelligently?
Darin Johnson
Feb 3 2019 at 10:33am
Cost is about what you would have done otherwise with the resources. If you don’t like dollars, think it terms of what else could have been done.
“Are we really getting 5 million bicycles-worth of value…”
“Are we really getting 1 billion packs of peppermint Dentine-worth of value…”
James
Jan 28 2019 at 4:58pm
The first distinctive position, “We should sharply increase immigration.” seems like central planning just as much as “We should sharply decrease immigration.” or “We should favor certain types of immigrants.”
A free market position is that the government should not be in the business of deciding the number of immigrants at all.
Matthias Goergens
Jan 28 2019 at 8:57pm
Show some charity in discussion. That’s exactly what Bryan Caplan wants to. He’s just predicting, that if locals and foreigners are freer to deal with each other, more will do so.
And that prediction is very well supported by the evidence. We see people line up for the limited opportunities to do so right now, so it’s a no-brainer to predict that lifting the restrictions will lead to more immigration.
James
Jan 28 2019 at 5:06pm
Dustin writes:
“I strongly prefer national policy to reflect the tendency of the voting population…”
You left out the part where you explain why your preference should be binding on trillions of dollars that other people had to work to earn.
Dustin
Jan 28 2019 at 9:23pm
My preference is not relevant. Again, people have their own ideas about value. The balance of those ideals forms the basis of national policy. It’s great.
Mark Z
Jan 28 2019 at 10:30pm
Sometimes their ideas of value involve mass-murder of their fellow citizens. Sometimes the majority of people don’t value the lives of the minority, and tolerate or even encourage their government’s brutalization of numerical minorities. It most decidedly isn’t great. This sort of democratic Hobbesianism that imputes some ethereal moral wisdom to any majority of a polity whose existence is most likely the product of a series of accidents of history is as superstitious as the divine right of kings, in my humble opinion.
Mark Z
Jan 28 2019 at 6:16pm
People who use the term ‘neoliberal’ tend to be far enough left that they are primarily concerned with the center or even center-left. Socialists often spend more time attacking moderates on the left than attacking conservatives or libertarians. Moderates, however, do attack the ‘distinctive’ aspects of what you call neoliberalism, using terms like “free market fundamentalist.” People hate their neighbors more than they hate people who live far away.
But I don’t think most people define neoliberal quite the same way you do. Most seem to think of it as more centrist/moderately free market than radically free market. Noah Smith identifies himself as a neoliberal, and he’d probably disagree with even some of the conventional free market positions you describe as well as the distinctive ones.
robc
Jan 29 2019 at 2:53pm
I think you are right.
On another site, within the last week someone “insulted” me by calling me a neoliberal. I didn’t respond, but my next post set him off, he said he was wrong, it was worse and I was a randist.
I am not, but he did get closer, I think. I didn’t take that one as an insult either.
He also called me a nimbyist, which I took as an insult, but seemed odd based on a post arguing for property deregulation.
I don’t know what was wrong with me that day, I managed to avoid replying to both posts. I am nearly 50, maybe I am finally getting that maturity thing. Nah, probably not.
Jon Murphy
Jan 29 2019 at 7:33am
I think I’m missing something. I don’t see how the conclusion (“The result, strangely, is that the critics of free-market economics inadvertently glorify us. They make it sound like we have a monopoly on common-sense and basic prudence “) follows
Thaomas
Feb 2 2019 at 5:26pm
The lists are rather odd, from my point of view.
1. We should sharply increase immigration.
2. We should heavily deregulate housing.
4. Government should tax pollution rather than regulate it
Are pretty common Neo-Liberal points of view although of course not very popular with the naive public.
3. We should substantially cut government spending on health care and education.
That is a distinctive view which I would not call Neo-Liberal
2. Government shouldn’t spend tax dollars on projects with very unfavorable cost/benefit ratios.
3. Governments shouldn’t have large permanent budget deficits.
These are definitely Neo-Liberal Views, (although Neo-Liberals would add ” Government should spend tax dollars on projects with very favorable cost/benefit ratios”) but all that conventional, unfortunately.
4. Redistribution has some noticeable disincentive effects.
I guess this is a Neo-Liberal view but as stated may imply a prior that the growth/redistribution trade-off is steeper and more ubiquitous than most Neo-Liberals see it.
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