AN EXTRAORDINARY AREA OF CONCERN, Part 2

There are those among the populace who argue for unrestrained markets.  These are markets that fall in line with the moral precepts of the natural rights view of governance and politics.  This connection was described in the last posting of this blog (if the reader has not read that posting, he/she is encouraged to do so).  The more extreme advocates of this position are called libertarians. 

According to them, restraints are deemed immoral because they short circuit a person’s choices to determine his/her values, that is, they hinder natural liberty[1] and this is particularly true for the business class.  Much of the rhetoric espoused by the Tea Party members, for example, falls under this designation. 

They criticize the government's set of interferences in the economy which was triggered by the financial meltdown of 2008.  They have bad-mouthed the government's stimulus spending, the bailouts of the banks, and the bailouts of the American auto makers. 

They see, as part of the overall “deal,” that a person who does act according to his/her choices should be held accountable for those choices and government bailing out “sinners” or “foolish” actors is interfering with these consequences.  This, in their eyes, is immoral and as such, heightens the debate over such policies beyond what is prudent to what is “sinful.”

These libertarian positions have been countered with arguments that without these actions by the government, the economy would have fallen to depths matching those of the Great Depression of the 1930s – initially a time with few restraints.  This would have most negatively affected lower income people who had little or nothing to do with the actions that led to the meltdown.  If anything, those who support government intervention might have argued for more of it by providing for those who lost their lower income jobs.[2]

But for those who hold an uncompromising view of free markets, any intervention would have been not only a misfortune but also an evil.  It is an evil that not only undermines this view of virtue, but also in practical terms leads to unwanted results, i.e., a less then optimal economy.  And to those who seek deep penetrating restraints on markets, such as socialists, free marketeers promise not only an immoral turn or less than optimal results but also right down debilitating consequences.

Why?  According to them and often overlooked are the challenges that such restraints place for businesspeople.  This is especially true when they consider whether to hire or dismiss workers.  Excessive restraints in the form of overregulation, excessive taxes, or policy that muddies their ability to ascertain future business conditions cause them to delay expanding their businesses and with that, the ability to increase the number of available jobs.  This is not all incorrect.

Of course, such decisions to impose restraints, according to free market advocates, hurt the economy.  Risk is always something facing those who run businesses.  But this, to voice an opposing view, is a counter reality – one that dismisses prudent considerations – and can be righted by a demand for balanced economic policies, which is something natural rights morality does not recognize due to its moral bias. 

Government has a role, but not an unlimited one and one is better served with a morality view that does not a priori cast potentially prudent measures as evil.  The trick is in nuanced policy.  That is a policy that takes into account not only the interests of those who are significantly adversely affected by the economic conditions of the day, but the interests of the business class that generate the wealth upon which the whole system depends.

One last word on this.  Defenders of restrained markets point out that many of the conditions that led to the '08 meltdown were present during the late '20s, the period leading up to the Great Depression.  For example, there were high rates of leveraged purchases of assets (such as stocks and bonds, borrowed money, or real estate) and highly skewed income and wealth distribution rates in favor of the superrich. 

Libertarians might suggest that the restraints which were in place leading up to the situation of 2008 did not prevent the downturn.  Advocates for restraints, on the other hand, can counter and the media has well documented how during the years prior to the collapse, the US government had softened or done away with significant restraints.  These changes ranged from deregulation of financial services – many dealing with real estate assets – to inaction regarding the income and wealth disparity between the rich and the dwindling middle class. 

They would attribute the origins of this trend to the nation’s most libertarian president to date, Ronald Reagan – although the current Trump administration does emulate the “Gipper” on this account.  They would say that while restraints to the market need to be well thought out – unintended consequences and all – history seems to clearly indicate that they are necessary for successful capitalist economies.  Remember:  unintended consequences are not the sole province of governmental interventions; they haunt actors in free markets as well.

With this overall moral view, how does this disposition affect political perceptions, attitudes, and behaviors?  How do they affect civics classes?  More specifically, if people are guided or heavily influenced by the natural rights perspective, how do economic factors affect their view of governance and politics?  To consider this, it is helpful to consider a set of conditions. 

And that set is introduced by this question:  what is the connection between the motivating values of the natural rights’ moral view and civic realities that its followers choose to consider?  And a further question, with those civic realities, which ones do they propose for discussion in public forums such as in civics classroom?  The thing about moral beliefs, honestly held and felt, is that the moral values motivate a person to develop corresponding views of reality. 

These views include not only what is physically seen as real, but also the ways in which to find out what is real.  Soon in this blog, this writer will address the effects of natural rights thinking on how political scientists seek the truth.  That includes both the substance of perceived truth and the methodology used to seek that truth.[3] 

No concern is more influential in how people see what is worth pursuing than economic conditions and opportunities. By outlining a natural rights view of morality and its centering on the value of individual liberty, those beliefs serve not only in determining economic values, but civic and political views as well.  There is an indivisible connection between basic economic interests and how people consider either morality or politics.

Educators, in designing what is taught in a course, naturally must determine what view of reality they will present.  They have the task of determining which construct they will apply from the academic discipline which supplies the raw content of the course.  Moral perspectives have an ample influence in that determination.

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[1] As oppose to federal liberty.  Natural liberty says one has the right to do what one wants to do; federal liberty says one has the right to do what one should do.  See “The First ‘On Liberty,’” Intercollegiate Studies Institute:  Educating for Liberty, October 28, 2011.  Accessed on July 1, 2018, https://faculty.isi.org/blog/post/view/id/686/ .

[2] This is pointed out to bolster the claim that while free markets and their moral standing have substantive grounding, positions supporting government interference or the implementation of restraints on markets can also be justified on moral grounds.  

Among the moral claims supporting government action is that a person should not be affected negatively by social arrangements that punish those who had little or nothing to do with creating adverse conditions, especially if they are catastrophic.  Beyond this moral argument, one can also argue that such actions as those of the Obama administration[2] and those of FDR's administration in the '30s saved the free market system, albeit with significant restraints, by staving off a popular revolt.

[3] For example, if one believes the Old Testament is the foundation of one’s moral outlook and he/she happens to find buried, under a lot of dirt, an old and ample sized boat (or does it have to be a ship?), he/she might believe Noah's ark has been found.  Well, maybe that's a stretch, but perhaps beliefs related to the Shroud of Turin reflect the moral beliefs of those passing judgment on its authenticity.

AN EXTRAORDINARY AREA OF CONCERN, Part 1

This blog has had a bit to say about the natural rights view of governance and politics.  In summary the main points have been that that view has become prominent among Americans; that it promotes the belief that individuals have the right to determine their values; and the right to pursue those values with only one restraint, i.e., that no one be allowed to interfere with others having the same rights. 

This, in turn, has implications on one’s morality.  The last posting hinted at a connection between this political/moral perspective and economic concerns and activities.  There is a good reason for this connection.  The moral element of the natural rights construct is the moral foundation of a capitalist or free market economy.  What does that mean?  This posting attempts to answer that at a basic level.

One can readily find critiques of free markets, especially among leftist political writers.  This writer has deeply felt concerns over unregulated markets or over how libertarians and other strongly conservative advocates support free markets.  This blog has expressed those concerns, but here this writer wants to sing about its qualified merits. 

This is done here because nothing illustrates the meaning of the moral positioning of the natural rights construct – which is the main topic of concern being addressed here – more than when one considers free markets.  No economic arrangement as capitalist/free markets has led to such levels of enormous wealth.  So much so that the political writer Jonah Goldberg calls it “the Miracle”[1] with good reason.  And that reasoning needs to be reviewed to garner the positive moral aspects of capitalist thinking.

This is so because by its nature, free markets provide the means by which to overcome the obstacles that keep people economically constrained.  Wealth is created and accumulated by the acts of many.  Free markets situate people in this endeavor by them seeking individual goals.  Initially, as societies moved to this mode of production and distribution, many were coerced into their roles (here one can cite the exploitive conditions that early factory workers or miners sustained), but over the longer term more people than in any other means of production benefitted. 

Hence, each actor, under current forms of capitalism, takes care of his or her own interests by his or her own means.  A person so engaged has a targeted motivation to fulfill his or her role that both advances the person's interests and those of society – at least most of the time.  Rest easy; this review will forego the economics of it all, but it points out that history has not known a more impressive success story.

The question is not whether free markets work, but whether free markets, in the long run, work best under certain restraints placed upon them.  In this posting, the argument is made for restraints on free markets as necessary components of a well-functioning capitalist economy and how restraints (usually through some form of regulations) affect natural rights’ morality.  According to those who advocate for restraints on free markets, their arguments have to do with the social conditions that unfettered markets help create as was the case during the early development of free markets.

These advocates would argue:  Without any restraints, free markets create dysfunctional levels of skewed income and wealth distributions.[2]  They also set up very dubious practices such as the selling of products that most feel are, for moral reasons, beyond limits.  This might include the selling of babies, the selling of military service, or other civic oriented duties such as a person's vote.  One is apt not to think of these examples or see them as beyond the pale, but one should remember that America has not had a totally unregulated economy.

In terms of this, Jean-Jacques Rousseau wrote:  “As soon as public service ceases to be the chief business of the citizens, and they would rather serve with their money than with their persons, the state is not far from its fall.”[3]  Unfettered markets enable and encourage citizens to view their civic life in monetary terms and this can cause expensive outcomes to a government and its people.  And with enough of that, one starts encroaching on moral concerns.

But nothing essentially says that a free market cannot have restraints.  Supporters of restraints would point out that the US economy from 1945 until the end of the century functioned with meaningful restraints and experienced vast growth.  Yes, given the advantages World War II provided the US in relation to other industrial nations, one can argue that those times were not common. 

But as the Noble Prize-winning economists, Abhijit V. Banerjee and Esther Duflo, argue, reasonable restraints, such as those imposed by governments with mixed economies, do not impose debilitating consequences regardless of global conditions.[4]  In their book, Good Economics for Hard Times, ample evidence supporting this claim is cited.

[Note: The next posting will pick up on this topic.]

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[1] Jonah Goldberg, Suicide of the West:  How the Rebirth of Tribalism, Populism, Nationalism, and Identity Politics Is Destroying American Democracy (New York, NY:  Crown Forum, 2018).  Yes, Goldberg is a leading conservative national writer and former editor of the National Review.

[2] For a historical account of this claim the reader is referred to New York, a documentary series produced by Public Broadcasting Service. This series, directed by Ric Burns, depicts the New York economy run by an exceptionally free market system resulting in segments of the city's population being extremely rich and “half,” as Jacob Riis designated it, living in abject poverty.  See Ric Burns and James Sanders, New York: An Illustrated History (New York, NY:  Alfred A. Knopf, 1999).

This was particularly the case in the nineteenth century.  The nation is again experiencing large income and wealth disparities among its population.  This has spawned a literature currently available; for example, the following book:  Capital in the Twenty-First Century by Thomas Piketty.  This has taken place as the restraints instituted by FDR’s New Deal policies have been weakened or, in some cases, eliminated. 

This more recent trend began under the administration of Ronald Reagan and has been accelerated under the Trump administration.  Another history that focuses on the rise of industrial cotton production and lends insight to the trend highlighted here is Sven Beckert’s Empire of Cotton:  A Global History.  Sven Beckert, Empire of Cotton:  A Global History (New York, NY:  Alfred A. Knopf, 2014).

[3] Jean-Jacques Rousseau, The Social Contract, Book III, chapter 15, translation by G. D. H. Cole (London, England: J. M. Dent and Sons, 1762/1973), n. p.

[4] Abhijit V. Banerjee and Esther Duflo, Good Economics for Hard Times (New York, NY:  Public Affairs, 2019).  Capitalism, with structural restraints, has also lifted the fates of millions of people in the developing world.