Okay, the comment thread to Scottie's post has morphed into a symposium topic, so the obsessive compulsive organization freak inside of me wants to shift it into its own blog post so that it's easier to find.
A blow-by-blow recap:
Scott mentions that he's a Democrat and supports Obama. Karl (that's me. Yes, I'm so vain I talk about myself in third person) announces that he is technically an Independent but has voted Democratic for a while, too, and is wondering where others of us have landed politically. Ryan announces that he and Linda are Democrats.
Jesse suggests that our focus should be political topics as opposed to parties/labels, which often fail to respresent one's complete set of political beliefs. Jesse also announces that he's a small-c conservative (classical liberal) whose intellectual heroes are Milton Friedman and Freidrich Hayek, and that he's unaffiliated with either party and generally depressed with politics.
Scott agrees to some extent, but suggests that for practical action, one must still choose a party from which to instigate that action, even though the party likely does not perfectly represent one's ideology. Scott then turns to policy, and expresses his concerns that government is a necessary, even if ineffecient, check against capitalism. Scott cites as examples of problems with capitalism: the industrial revolution and its exploitation of labor, as well as the search for resources and its messy exploitation of our global environment.
Discuss!
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And now, in the ultimate move of vanity, I'm going to be the first person to comment on my own post...
I agree with Jesse. Ideology should be a more important discussion point. But I also agree with Scottie. The reality is that you can't achieve anything outside of the two parties. The question of political affiliation is interesting not because it reveals your political ideology, but because it hints at which aspects of your political ideology you value more. So, while I lean (slightly) conservative in some ways, I find myself nonetheless aligned with the Democratic party because I believe that certain tenets of the Republican party represent much greater evils than, say, same-sex marriage or abortion.
Anyway, enough about parties. On to the ideology. What I really wanted to do is repeat Scott's concerns with capitalism and free markets, but in different words.
First, a disclaimer. I've never read Friedman. My training in economic theory comes from a reading of Marx, two indoctrination seminars at the Institute for Humane Studies, and a few semesters of Antitrust law (which, in my opinion, has been so slapped around by laissez-faire economic theory that it no longer knows which side is up). So if my arguments appear severely uneducated, that's because they probably are.
With that out of the way, here's my case (economically) for government intervention in free markets, most of which is probably regurgitated from other people, but I can't remember who, so I'll just pretend they're my own arguments:
I. Markets fail to fairly allocate costs
For example, consider negative externalities. In other words, that factory down the road that's creating air pollution--without regulation, it will never have to pay the cost of its pollution. Rather, people downwind pay the cost of the pollution. So the factory gets to cheat--i.e. not pay the price of cleaning up its pollution, at the expense of the public at large. Another example--tobacco companies and lung cancer.
II. Markets fail to encourage activities which may lead to positive externalities
In other words, without government, competing companies would be much less likely to participate in cooperative efforts that benefit the public at large. Take, for example, our highway system. Would that have developed in a free market absent government intervention? And yes, railroad companies built the first transcontinental railroad, but there were a lot of government dollars and sponsorship behind that, too.
As another example, consider high-risk R&D projects (i.e. the space program, the Internet, much of our medical progress, etc.). Companies worried about the bottom line don't engage in high risk R&D without government incentives (whether it be direct financing or the promise of protection of their intellectual property).
As another example, consider laws and police forces in general. These foster stability and trust, without which companies would be less willing to engage in certain behaviors, like contracts.
III. Markets fail to properly value certain products and services
Take the salary of most CEOs, movie stars, and atheletes, and compare it to that of school teachers. I should probably expand on this, but I need to bill at least a couple of hours today.
IV. Consumer demand is inoperative as an corrective force because of transaction costs, imperfect knowledge, limited resources, and supply-side manipulation of demand
As I understand it, consumer demand and preferences are supposed to counteract these ineffeciencies. So, for example, a consumer should theoretically observe that Factory A is polluting the environment and costing the consumer money, and thus either buy at a higher cost from Factory B or at least renogotiate the price so that Factory A is bearing the cost of its pollution.
The problem is that this isn't how things work. 1) Consumers don't have access to all the information they need to make an informed choice, and thus may be ignorant of the pollution and/or its cost to the consumer; 2) Even if consumers did have full access to information, many consumers would "cheat" and still buy at a lower cost from Factory A; 3) Consumers are unable to, independently, affect price--they must work together, requiring transaction costs that in all but the most extreme cases are perceived to be higher than benefit to be gained; 4) Where resources are limited, consumers may not have a choice to buy from Factory B; and 5) This model (at least as I understand it) assumes that demand is an entirely independent force. However, I believe that with concentrated advertisements, non-disclosure of information, and anti-competitive practices, companies are often able to create demand where there should be none. Take, for instance, most pop music :).
So that's my economic argument. I await rebuttal, which will undoubtedly make me look stupid.
Inevitably, however, my ideology is informed by religious sentiment, with the economic justifications often an after-thought. For example, one topic for which I often appeal to religion is redistribution of wealth. I believe that people pay for their own mistakes, not their parents. And yet the vast majority of kids born into poverty will never escape it--they are paying for their ancestors economic "mistakes," or in some cases still reeling from injustices heaped upon their ancestors. Thus, I advocate a war on poverty, especially as it affects children, but also in that it provides new opportunities to those who have impoverished themselves through their own mistakes, so that they at least have a chance for redemption. (And no, I don't believe that it is a stretch to extend the concepts of redemption and repentance to fiscal policy). I don't believe in complete redistribution of wealth--people should still be responsible for the consequences of their actions--but I do believe that there should be more redistribution through highly progressive taxes, along with better government provision of resources essential to "opportunity" such as healthcare and education.
In sum, I think we all agree that certain behaviors, such as charity, forgiveness, and even the possibility of redemption, are desirable. What we often disagree on is to what extent government should have a role in fostering these behaviors. In other words, should we hope that people will, individually, be charitable to those in need? Should we rely solely on churches and other humanitarian institutions to provide welfare assistance? Or should government have some role in this?
As Mormons, we have long been distrustful of the federal government for understandable reasons. People view government with an us versus them mentality. But I think that the time for distrust has come and passed. Perhaps I am naive, but I see government as a force by which the people can and should act to bring about good. Yes, reforms are necessary to achieve this objective. But the solution lies in reforms, not an abdication of government to private institutions.
(Okay, seriously, I need to bill some hours today.)
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