Monday, April 30, 2012

“What’s Liberal About a Mandate?”

Sydney M. Williams

Thought of the Day
“What’s Liberal About a Mandate?”
April 30, 2012

It is about time that a campaign was initiated to restore the word “liberal” to its rightful owners – those who believe that the rights of individuals supersede those of the state. While the concept of such an insurrection may seem arcane, its relevance has to do with what has been a gradual, but insidious, encroachment on individual rights by an increasingly intrusive central government, a government led by a Party that mis-characterizes itself as liberal. I recognize my chances of getting modern day statists to cede the word are virtually nil, but I feel better for the attempt.

Words have meaning, but meanings can be misconstrued. Democrats are better than Republicans in using words to their advantage. A good example is the word “liberal.” So when European Central Bank President Mario Draghi recently acknowledged that Socialism does not work as quickly or as efficiently as the private sector, when it comes to growing economies and putting people to work he was criticized. He urged the states to consider a “growth pact”, which would encourage the reduction of taxes, the easing of regulation and letting markets work. His goal was not austerity; it was growth fueled by classical liberalism.

The modern usage of the word has been used for most of the 20th Century. Carter Glass (1858-1946), a former newspaperman and Congressman once defined a liberal as “a man who is willing to spend someone else’s money.” Thomas Sowell was less politically correct: “Liberalism is totalitarianism with a human face.” The point is that what we call liberalism is in fact Socialism, or statism. Mistakenly, some Republicans see the word “liberal” as a pejorative term. It is not. However, in contrast Democrats love to call Republicans conservative. It implies an old, sour-faced white man stuck in his ways. That too is false. Both Parties are concerned about the future. They differ in how to get there. Democrats prefer to be led by the state; Republicans by the creativity and risk-taking of individuals.

What, for example, was liberal in the words of M. Hollande when, in a speech last Tuesday, he declared: “If I am elected president, there will be a change in the focus of Europe’s construction. Enough free market, limitless competition, enough austerity!”? In his Two Treatises of Government, John Locke wrote that should government become tyrannical and deviate from the “Compact” – an agreement in which the people relinquish some freedom in exchange for security and stability in their lives – the people have the right to overthrow that government. Our government has not become tyrannical…yet, but it is certainly expanding its reach and curtailing rights in a decidedly illiberal fashion.

Today, government justifies its increased powers on a belief that a beneficent state is “liberal”, when it assumes responsibility for those who cannot care for themselves. However, it has gone much further – protecting people and institutions from the consequences of their own actions. In short, by removing risk from the lives of its citizens, government has promoted moral hazard, by creating a culture of dependency. What is worrisome to those who fear an omniscient state is that increasing numbers of people are choosing to be succored to the risk of failure, thereby giving up the opportunity for exceptional success. We see this trend in fewer people paying federal income tax, and more people relying on government for some form of sustenance, whether Social Security, Medicaid, or whatever. They become imprisoned in their own dependency and are, in fact, less free. According to the Bureau of Labor Statistics (BLS), since Mr. Obama became President in 2009, the working age population has grown by 5.7 million, the number of employed has grown by 3.6 million and the number of Americans on disability insurance has grown by 5.4 million – an unsustainable trend for a democracy that purports to foster individual freedom. A major success of the President – one which he will not crow about – is that 50% more people have been added to the disability list than to employment rosters.

Liberalism first became a force during the Age of Enlightenment, a period that encompassed the late 17th and most of the 18th Century. It gave birth to some of history’s most notable brilliant thinkers – Thomas Hobbes, John Locke, Isaac Newton, Voltaire, Jean-Jacques Rousseau and Immanuel Kant. It began with a belief in a rational, orderly and comprehensible universe. It asserted that law governed both heavenly and human affairs. It focused on the belief that individual liberty was a fundamental right of man. It gave birth to the ideas that prompted the American and French Revolutions; its ideas are embedded in our Declaration of Independence and Bill of Rights.

Government exists to serve the needs of the people and the community it governs. Its power is (or should be) limited by concepts of natural rights of individuals and moral or natural law. There has always been disagreement as to what that balance should be – those differences are reflected in the desire for more government by our President and the sense that government has already over-reached by Libertarians. It is indisputable that the more power government assumes the less freedom the people have. The indefinable nature of the balance between government and personal freedom brings to mind Justice Stewart Potter’s concurring opinion, in seeking a threshold test for pornography (Jacobellis v. Ohio, 1964.) “I shall not today attempt further to define the kind of material I understand to be embraced within that shorthand description, and perhaps I could never succeed in intelligibly doing so. But I know it when I see it.” Many of us see our basic freedoms imperiled by the imperial reach of government.

As government’s share of GDP increases, two things happen. One is that people become less free; for more of their money must go to pay taxes for government’s expanding role. (Or the government simply borrows the money, thereby indebting future generations – think Social Security, Medicare, Medicaid and the ACA.) The second inevitability, as Alan Meltzer points out in his imminently readable book, Why Capitalism?, is that redistribution sacrifices future economic growth so that today’s demands are satiated. Guy Sorman, writing in the current issue of City Journal, in an article entitled Schumpeter in the White House, put it this way: “…when a state steps in to help a dying sector, it is actually harming economic growth by sinking financial capital – a limited resource – into inefficient activities and diverting funds from more innovative enterprises.” That is a choice the people must make, but they should do so with their eyes wide open, and not be swayed by the misuse of words. It is this debate that is at the essence of this fall’s election. It is this debate around which swirls the definition of “liberal.”

Regulation is too often and too easily deployed with very little emphasis or concern about consequences. The Dodd-Frank Bill is a good example. Was it liberal to leave banks too big to fail? Is it liberal to let taxpayers be at risk? Would it not have been simpler and fairer to just demand higher equity capital requirements, as banks get bigger? Professor Meltzer points out that during the Great Depression not one large New York bank failed. They all had equity ratios closer to 15 percent, versus less than 10 percent today. The Department of Labor is proposing a ban on children working on family farms, which seems an unnecessary intrusion into our personal lives, besides requiring an additional 4000 inspectors to make sure that such idiotic and illiberal policies are obeyed.

The future is never clear. All we know is that it will be different – either more or less free. Empirical evidence demonstrates that societies that are more liberal, in terms of providing more freedom to individuals, and therefore operate with proportionately smaller governments generate greater economic growth. Supporters of democratic socialism argue that their form of government is “fairer”, but is it fairer to limit opportunity for the aspirant, to the creative and the ones willing to work hard and take risk? We know such restrictions cannot be more liberal. Is there anything liberal about redistributing someone else’s hard-earned tax dollars? Is there anything liberal about mandating someone buy health insurance?

Immanuel Kant taught us that man is fallible. He can be both malicious and greedy. Because he works for government does not eradicate those qualities. In fact, it is arguable that he is more dangerous operating wrapped in the mantle of government, for it is assumed by many that he has the common interest at heart. Words can be deceptive and their meanings distorted. The word “liberal” is a classic example. Isn’t it time that the word was restored to its original meaning and to its rightful owners?

No comments:

Post a Comment