Arnold Kling has the first part in a series explaining economics to liberals in TCS Daily dealing with the Maryland law demanding that Wal-Mart spend 8% of its payroll on healthcare benefits for its employees. On the surface, this seems like a good idea. Wal-Mart is the nation’s biggest retailer, and the company everyone loves to hate. Surely this is a win for the little guys, right?
But Kling rightly points out that the real world isn’t nearly that simple. Maryland’s law will likely cause people to lose their jobs or see their paychecks suddenly be much smaller. As simple as it is to see the world as a big semi-Marxist reality play in which the phantom “plutocrats” prey upon the oppressed bourgeoisie caught in their cash nexis, that view bears almost no resemblance to the real world. Especially for minorities, Wal-Mart is a godsend – not only do they provide low-cost goods to impoverished communities, but they provide jobs that wouldn’t be there elsewise. Yet Wal-Mart has been turned from a low-rent retail giant into the very image of evil itself in the minds of some.
Kling gets down to the basics:
Liberals see the market as an arena in which evil corporations inflict their greed on innocent victims. I wish you would see that motives matter less than consequences. I wish you could see that greed is at work when laws are passed that regulate markets, because regulations always produce winners and losers. I wish you could see that those winners and losers are often not who you think they are. I wish you could see that competitive behavior and free choice are forces that operate in the market as a check against greed. Finally, I wish you could see that greed is most difficult to restrain when it is exercised through the medium of government.
That is the fundamental problem with what is called “liberal” economics these days. (Except they’re not liberal at all – they’ve more in common with Marx than Locke or Mill.) Government is no less greedy, no less rapacious, no less heartless, and no less cutthroat than Wal-Mart. The difference is that Wal-Mart can’t shoot you for refusing to shop there.
The liberal economic worldview is a exceedingly simplistic one, a morality tale in which big mean corporations constantly attack the little guy, with government acting as a knight in shining armor. The problem is that governments is the single least efficient or accountable agency in society – as Washington (more than likely apocryphically) called it “a dangerous servant and a fearful master.” Modern Liberalism presupposes a nobility to government that is exceptionally naive.
While classical liberals are often accused of being naive about the power of the market, classical liberals have something that modern “liberals” don’t – empirical evidence. Markets work, government doesn’t. Markets don’t create heaven on Earth, they simply do better than any other alternative. The last few centuries of history have seen socialist experiments sputter along (modern Western Europe) or fail in spectacularly bloody fashion (see Cuba, the Soviet Union, China, etc…). At this point, the only arguments that try to decouple economic performance and quality of life from economic freedom are arguments that willingly distort or ignore the facts.
It’s easy to be a modern liberal these days – it’s easy to hate Wal-Mart, demand a “living wage”, demand affordable healthcare for all, etc. The problem is it’s also easy to demand that you get your own private island, LearJet, and incredibly flexible supermodel. Both try to ignore the reality that we have limited resources to allocate and human wants are effectively limitless. You can’t snap your fingers and demand that Wal-Mart pay 8% of payroll to healthcare without taking that 8% out of the paychecks of Wal-Mart’s workers or raising prices for everyone. Life just isn’t that simple.
And that’s why I’m a classical, rather than a modern liberal – because the values of classical liberalism have worked in the past and continue to work in the future. For every government action, there are a host of negative unintended consequences – and the more utopian the idea, the worse those consequences will be. Maryland’s efforts to force Wal-Mart into their particular idea of what the market should be is bound to fail – although sadly for many, it’s the intention of an action rather than the consequences that count.
Amen brother…
“prey upon the oppressed bourgeoisie caught in their cash nexis”
Don’t you mean oppressed proletariat?
“Especially for minorities, Wal-Mart is a godsend – not only do they provide low-cost goods to impoverished communities, but they provide jobs that wouldn’t be there elsewise.”
For someone constantly pissing his pants in fear of “growing entitlement expenses,” you lose all credibility on the subject when you embrace Wal-Mart, whose “low-cost goods” are subsidized entirely through billions of dollars worth of government assistance required for its poverty-wage employees.
“Maryland’s efforts to force Wal-Mart into their particular idea of what the market should be is bound to fail ”
Since you submit that neither government or Wal-Mart has a responsibility for providing health care to the “lucky-ducky minorities” working at their $7-per-hour SuperCenters, your solution appears to be that none of these “lucky souls” should have health care. The sad part is, Wal-Mart employees in the Heartland are your party’s base. And this is how you choose to reward them?