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A political paradox

Submitted by BWall on Thu, 04/23/2009 - 14:48
in

 This is something I've been grappling with for a while.  Any suggestions or advice would be most welcome.

The Conservative Paradox (note: this is equally problematic for liberals as well; just flip the factors around and you have the same situation)

Conservatives believe in limited government: people work best when they are unconstrained, and government should be as small as possible to minimize restraints and allow people to live their lives as they so choose.  We endorse this behavior particularly in the marketplace, as we believe the free market allocates resources much more effectively than government oversight.  Even if some types of spending are irresponsible or even morally wrong, the free market punishes and rewards behavior better than the government does, so it should be left to act unfettered.

But...

A good majority of conservatives believe that the government should regulate moral behavior such as same-sex marriage, abortion, drug use, etc.  We believe that these practices are inherently wrong and threaten society at large, and that a responsible government eradicates these ills by outlawing them.  

So...

If I have stated these two goals correctly, they seem to contradict each other on their face: in one instance we want a small and non-intrusive government, and on the other we want a powerful and far-reaching government.  Why do we feel that people are perfectly capable of economic self-governance but need the government to make their moral decisions for them?  (The flip side is equally damning for liberals: why can you trust people to make their own moral decisions but don't trust them to know how to spend their money?)

Personally, I do have deep personal beliefs about the moral issues that the culture wars have been and are being fought over.  Having said that, though, I feel uncomfortable with granting the government the power to make these decisions.  I don't really want Harry Reid or Nancy Pelosi deciding my moral convictions, and would rather that be a private decision informed by my church, my family, my own reading, etc.  

Any comments, thoughts, criticisms, etc. are welcome.

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The free market is very good on short term decisions

Submitted by RisingTide on Thu, 04/23/2009 - 14:56.

not on long term ones. I trust people to be able to decide which car to buy. I don't trust them to invest in the space program wisely -- it's a big endeavor, and will only get off the ground if we all do it together.

Libertarianism is a great idea... if only everyone were smart!

As it is, we all know the boozehound, the person who doesn't save 50% of their income per month for a rainy day... the person who somehow believes that saving 25% of their income will allow them to retire...

I've read the psychology of decision making. People do not decide rationally. It makes sense to decide long term ideas on a different basis than short term ones.

Therefore, I am all in favor of a well-regulated free market! and I'm a liberal!

I'm also in favor, as are most economists, of using the government to more efficiently reorganize our human capital, as jobs change from one skilled labor to a different area.

Limited Government?

Submitted by skayne on Thu, 04/23/2009 - 19:20.

We have a "free market" because the government sets rules of the road and protects intellectual property rights. I have to ask, do conservatives buy into this limited government theory because they've been told it's the best way, or because history actually proves it to be true?

History tells us that limited government in the marketplace led to repeated ecomomic boom and bust cycles that led to panics. Starting in 1792, panics took place 10-15 times until the Great Depression. In these panics, government had to step in just to avert complete disaster. We've been bailing out banks for over 200 years.

The main protections installed during the Great Depression were Glass-Steagall, the FDIC, and the SEC. Due to these and other regulations, we didn't have a panic for over 50 years. The oil shock and recession of the late 70's ushered in conservative dominance. Regulation is oppressive, markets always know best, and government can't do anything right, or so goes conservative ideology of the time.

Reagan got the deregulation ball rolling, and we got the S&L crisis in '87, the bailout of the hedge fund Long Term Capital Managment in 1998, the dirty books of Enron revealed in 2001, and the current financial crisis. Our repeated response in this era of conservatism was to continue to roll back the rules set in place during the Great Depression.

How can you say the market only punishes those who make bad decisions after what we've witnessed? These banks made decisions that left them over-leveraged and without capital, and created ripple effects throughout not only our country, but the whole world. History repeatedly shows us that when something collapses one place, it collapses in several other places at the same time.

The only people who benefit when oversight and regulation is relaxed are the politically connected and the independently wealthy. No government oversight leads to financial chicanery that threatens the overall economy. The freedom to do want you want in our society is understood to be within the rules that our democracy has established. If we're allowed to do whatever we want socially, then anarchy ensues. The same goes for our economy.

Thank you BWall.  I wanted to

Submitted by Double D on Fri, 04/24/2009 - 00:21.

Thank you BWall.  I wanted to mention something about this myself, and you did it very clearly and concisely.

As for you doubters of the free market, a question: is there ANY regulation that will effectively ensure prosperity?  Yes, we will have good and bad times under free markets.  Goverment interference can't stop the cycle, and can make it worse.  Things change.  They will always change.  An inventor in Timbuktu could discover the next big thing, setting the stage for his country's rise to economic prominence, and diminishing America's economic dominance (of course, coercion, war, etc. could prevent that). At best, a stringently regulated economy can only give us stagnation.

Realistically, the goverment WILL be involved in the economy, just as the market can affect the goverment.  Since they are both an underpinning of society, they will act on one another.  It is unavoidable.  The trick is to ensure MINIMAL intervention.  Weep for the losers if you will, but I'd rather have losers chosen in the markets than chosen by the government.

umm... what fucking free market

Submitted by RisingTide on Fri, 04/24/2009 - 09:48.

HIRES a man again  after he drove his last company into bankruptcy?

oh, right, the one you're defending.

smh!

Thanks all

Submitted by BWall on Fri, 04/24/2009 - 08:08.

 Since this post is probably on the way below the fold before too much longer, I just wanted to thank those of you who have commented.

RisingTide - you do have a good point about long-term planning.  That is part of the social contract, I suppose: we delegate part of our decision-making authority (and tax money) for decisions that individuals can't really make on their own (national security, space program, etc.)

Skayne - this housing crisis does reinforce your point about the free market not always only hurting those who make poor decisions.  Mortgage-backed securities had AAA ratings but ended up being built on a very shaky foundation, and their collapse hurt those who thought they had invested responsibly.  

Double D - Thanks to you as well for your post.  It's an issue I continue to struggle to articulate, and I appreciate your input.

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