HOW MUCH PROSPERITY DOES THE LEFT WANT?

This is a limited revival of mecmoss.com, the blog that I suspended, yielding to popular demand, a couple of years ago.  The revival is for the purpose of directing my once-loyal fan base to a posting in the blog of my favorite economist, Prof. John H. Cochrane of The Hoover Institution (“The Grumpy Economist”), on the disturbing topic of the rise of the far left in American politics – and of the role of certain economic theories in abetting that rise.  Here is the link:  https://johnhcochrane.blogspot.com/2020/10/understanding-left.html

Professor Cochrane’s essays are featured regularly in the Wall Street Journal, and his blog is terrific. (I call his blog-posts “Grumpies.”)The following is an edited version of a message I wrote to the professor in response to the above-cited Grumpy.  You don’t need to read his post to understand my message, but if you appreciate this message, you certainly should read his post.  Sorry about the length; ran out of time.


(Dear Professor:)  Excellent Grumpy.  I enjoy your posts on politics.  The idea that economics and politics can be understood as separate – or even separable – disciplines, an idea that you reject, strikes me as naïve.  There are few, if any, economic-policy objectives that can be addressed or achieved without consideration of the political actions needed in order to accomplish them and the political effects of their accomplishment.

I think the following excerpt is the heart of your essay: “We are presuming a common goal to produce a free and prosperous society, and somehow this crowd missed the lessons of history and logic of how to achieve it. Let’s not be so patronizing.  If their answers are so different, it must be that they have a different question in mind. What is the question to which all this is a sensible, inevitable answer?  Ask that, and only one question makes sense. Power.”   [I take first of those last two sentences to be shorthand for “What are the lefties seeking, if not a free and prosperous society?”]

This issue has been with us since classical antiquity.  Different nations or movements at different times had different goals: some tried to produce a prosperous society, a few even considered prosperous and free, but each recognized that power was the means to achieve its goals.  It is a shame that many had so much fun acquiring the power and exercising it, that they never got around to the “free-and-prosperous-society” part.  An example:  the American left, since my law school days in Berkeley, has been seeking power.  During those rollicking “Free Speech Movement” days, many thought the agenda was sex, drugs, and rock & roll, and hey, while we are at it, how about we stage a fun revolution?  But in Berkeley, as in Castro’s Cuba, it took just the blink of an eye for the serious Marxists, even in the midst of the partying, to train their sights on a bigger goal:  seizing power.  Castro had Cuba, Mario Savio and his Berkeley claque took aim at America, and everyone figured all those bad boys would outgrow all of this.  Alas, they never did.  Your answer holds: power is the answer, power is the main thing the left seeks.

But if power is what they seek, why does the left choose leftism (instead of, say, conservatism) as its pathway to power?  The primary answer is, the essence of leftism is central control, Hayek’s “central planning” model, in which government owns or controls all the major enterprises.  The more controlling you do, the more power you are deploying. The legal right to control is power. In the U.S., that legal right is conferred by laws (e.g., Acts of Congress) and, nowadays to a far greater extent, by regulations and orders issued by the executive branch (e.g., the stuff contained in the U. S. Code of Federal Regulations, the place where over 80,000 pages of Dodd Frank regulations and nearly 20,000 pages of Affordable Care Act regulations reside). The execution of those laws, regs, and orders is performed by the 9.1 million people who are employed by the federal government, at the direction of the executive branch (i.e., the president).   https://thehill.com/opinion/finance/438242-the-federal-government-is-the-largest-employer-in-the-nation    An example of leftist power and control: being able to direct a Lois Lerner (former head of the IRS) to harass Republican taxpayers and Republican-controlled companies.  Leftism and control go together like borscht and pierogi.

The other reason why the left prefers leftism is that it fears free markets and relatively un-regulated markets, because such markets make it easier for people outside of the inner power-circle to become prosperous enough to resist governmental control. Free markets facilitate competition, provide easy entry, and reward performance. Regulations can represent barriers to entry and can make it more difficult for new ventures to gain clearance and compete against power-circle companies. Example:  The 5 biggest companies in the country by market cap are MSFT,  Apple, Amazon, Facebook, and Alphabet (Google), and each of them is in tech, an area both highly-regulated and highly vulnerable to additional regulation.  These companies are virtual partners with the federal government in terms of creating and working-through an intense regulatory-maze, and in the process, these companies can become – and arguably have become – political partners with the Democratic Party; the dividing lines between the interests of the tech world and those of the Democratic Party are blurred, to say the least.

Hayek was dead right about free markets being better than central planning if you seek economic growth, but he was wasting his breath by trying to talk to the left.  The lefties pay lip service to economic growth, and (like the leaders of the PRC) they understand that a certain amount of capitalism is useful, but the left’s idea of “economics” is finding out how much re-distribution of incomes and wealth – and how much governmental-regulation of personal and economic activity – can be accomplished without snuffing-out  the private sector. To the U.S.left, relatively-free markets and a lively private-sector are a necessary evil, an irradicable bug but not a feature – just as the Chinese view them; you cannot keep the masses in line unless you allow them to become at least modestly-prosperous. But the prospect that the world’s bond markets will someday lose faith in a deficit-based US economy and start demanding higher interest rates on US treasuries and the economy will falter is, to the left and its faux economists, the boogeyman – a phantom terror that exists only in the minds of their grandparents.

Our education system, through fifty years of leftward drift, has churned-out generations of economics illiterates who know nothing about Hayek and Friedman and free markets and see little reason to resist the centrally-planned economic system that has been metastasizing  in this country since before they were born.  Why fix the Dodd Frank and Affordable Care acts when those enormous, costly, ineffectual, and often counterproductive regulatory-monsters do not appear to be putting anyone out of work – and indeed are providing nice careers for the millions who are paid to enforce them or work with them.  Today’s young and elite lefty is a techie who concentrates on finding smarter ways to work with the regulated state. These people don’t dislike the centrally-planned environment, they like it,  it is their home.

Despite the weaknesses of statist government, our techie elites will be fine.  The real victims of this model are the non-techie people within our middle class or beneath it, our non-elites:  the bourgeoisie, the working class, the Deplorables, the Trump voters. These non-elite people were, until the accelerated advance of the elites in the last two decades, big beneficiaries of free-market capitalism and of our nation’s physical and social mobility.  But now, modern leftism has made only the elites wealthier – take another look at Silicon Valley and tech in general, Wall Street and finance in general, and the media.  Leftism has left the non-elites behind, earning too little, paying too much for healthcare and financial services, and becoming way too-dependent upon  government favors and handouts.

Although many non-elite non-tech jobs are being phased-out by tech, there are still plenty of non-elite tech jobs and service jobs – provided the environmental agenda does not kill those jobs before we develop reasonable environmental solutions. But the pandemic has put a lot of pressure on people whose jobs cannot be performed in their pajamas.  The non-elites, President Trump’s constituency, people whose fortunes finally started back up during his first term, will be the biggest losers if the nation takes a hard left turn in November and the pandemic effects linger.   Free-market capitalism is the best bet for the non-elites, but it is hard to pitch Milton Friedman to them when the media prevent them from even receiving the pitch – and when government keeps expanding the dole.

You, professor, are being prevented from speaking freely and are being made to pledge allegiance to leftist principles.  A shocking and awful predicament, to be sure, though at least you have the means to resist and to care for yourself. But half the country is facing direct threats to their well-being, their fortunes, and their security, and those unfortunate people are the ones least able to protect themselves and to grasp the danger involved in succumbing to the fake promises and handouts of the left – and they do not even get the chance to hear your side of the story at all.  A lot is at stake in this election.

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