In the June 2008 Freeman I asked why those of us who have a relatively rosy picture of the economic progress of America’s middle class – about its recent past (that is, since the mid-1970s) and about its future – are disproportionately pro-market types. My column is below the fold.
Why are optimists about the state of the world disproportionately represented by classical liberals, libertarians, and free-market conservatives, while pessimists about the state of the world are disproportionately represented by statists?
Why do left-leaning media such as the New York Times and CNN devote so much ink and airtime alleging that middle-class Americans have made little or no economic progress over the past 35 years and that the planet continues to spiral into imminent catastrophe?
Why, whenever the New York Times’s Paul Krugman and the Washington Post’s Harold Meyerson write (as they do, almost weekly) that ordinary Americans are trapped in a no-growth economic situation by “the rich” and powerful, do market-oriented bloggers respond with data showing that this claim is false?
And why, whenever the Los Angeles Times or The New Yorker publishes yet another “report” allegedly documenting continuing environmental degradation, do so many market-oriented scholars frequently expose these reports as being factually wrong or poorly reasoned, or both?
This pattern is so familiar that it eludes our attention. And yet reflection on it is fascinating. There’s no obvious reason why persons on the left should be biased into perceiving the state of the current world to be especially dire, and no obvious reason why market-friendly people should be biased into perceiving roses where there is really only rot.
As documented often in this publication (and in several others) over the past few years, Americans’ living standards are today at an all-time high. Data on what ordinary, and even poor, American households regularly consume make clear that our prosperity is immense and growing. Likewise, the real value of workers’ total compensation (wages plus fringe benefits) continues to rise. Leisure time—leisure both from our jobs and from tedious household chores—continues to increase, as do our real expenditures on recreational equipment and activities. Life expectancy in the United States is at an all-time high.
In addition, the planet is neither running out of resources nor heading for environmental Armageddon. The works of the late Julian Simon and, more recently, of Bjørn Lomborg and Indur Goklany are important sources of careful documentation of these facts.
We’re living longer and healthier, working less, playing more, and consuming more, all on a planet that is resource-rich and vibrant.
If I were a champion of big government, rather than deny these facts, I’d trumpet them as evidence that the interventionist policies pursued since the New Deal work wonders. Real household incomes are higher (I’d allege) because of Social Security, minimum-wage legislation, and several anti-discrimination statutes. We’re healthier and living longer (I’d allege) because of Medicare and Medicaid, a variety of product- and workplace-safety regulations, the efforts of the Environmental Protection Agency, and government’s crackdown on tobacco use.
And the natural environment is in fine health (I’d allege) because of the EPA and the plethora of national, state, and local regulations aimed at protecting it.
Yet if we are to believe the factual claims issued by the modern left about the state of the world, it is quite plausible to conclude that not one of their cherished programs works very well. Ordinary Americans and the earth stand on the brink of the abyss despite generations of government growth and increasing intervention.
Seems an odd claim, coming as it does chiefly from the left.
Perhaps equally odd is the consistent optimism about the state of the world by market-friendly scholars. It would hardly be surprising if, the moment someone asserted that the living standards of ordinary Americans have stagnated now for nearly two generations, students of Milton Friedman and scholars inspired by Mises and Hayek would accept such claims at face value and pronounce, “See! We told you so. First came the expansion of Uncle Sam’s power under Woodrow Wilson, and then came the explosion of such power under Herbert Hoover and Franklin Roosevelt, followed by increases in power ever since. The stagnation of incomes and the degradation of the environment surely are the result of the growth of the state during the twentieth and very early 21st centuries—or, at the very least, the growth of the state has done nothing to prevent these problems.”
But the typical free-market advocate resists this temptation. He or she examines the facts and correctly concludes that living standards and the state of the environment are much better today than they were 30 or 40 years ago.
Of course, it remains possible for the free-market advocate still to make a strong case against the many government interventions that today crowd our lives. But much, if not all, of that case is in the form of a counterfactual: If government were less intrusive, the economy and the environment would be even better than they currently are. However strong such a case is, the truth remains that the intrusive, grasping, and powerful government of the past few generations has not absolutely reduced our living standards.
So why do free-market advocates consistently proclaim that living standards and the state of the world are generally improving?
Call me biased, but I’m pretty sure that free-market advocates look at the facts straight on and (although it would further strengthen the case against government) refuse to massage the data in ways that make reality appear to be worse than it is.
The more interesting question is why do statists—by repeatedly alleging that the economy is horrific and the environment a cauldron of toxins—effectively (if unconsciously) insist that their cherished programs have failed. Given the overwhelming evidence that our material lives are today better along most dimensions, I’m frankly astonished that so few statists accept this evidence.
Or, more precisely, I used to be astonished. I am no longer, because I believe that I now understand why opponents of liberty constantly bemoan the current state of the world. Quite simply, problem-mongering is the surest path to power. No matter how good things are, we humans can always imagine them being even better. No matter how clearly the data show progress, data can be cherry-picked and interpreted to make matters appear grim.
And no matter how much freedom government has stripped from us, as long as some economic freedoms remain, those on the left will see such freedoms as the source not only of real imperfections, but also of failures to attain what can be achieved only in the fantasies of those with ample faith in the power of the state.
Friends of liberty are under no delusions that even maximum liberty governed by the best-possible rule of law will create heaven on earth. Opponents of liberty, in contrast, are convinced that the impossible becomes possible by giving the state more resources and power. And as long as there are still more resources and power for the state to acquire, the real-world’s inability to live up to our fondest imaginations will be described by those on the left as “failure” and serve as an excuse for further limitations on liberty.