Sunday, June 12, 2011

Market Forces

Despite what you might have noticed in my Weblog list, Bleeding Heart Libertarians, does, in fact, update, and fairly regularly (there are a couple of services that Blogger has difficulty keeping up with, it seems). I'd been reading it since not long after its inception, and I recently went back and read through almost all of the posts so far. (I say "almost" because a few of them did not make the transition to Wordpress, and so there are some 404 errors in the archive.)

I’ve created this blog as a forum for academic philosophers who are attracted both to libertarianism and to ideals of social or distributive justice.
Matt Zwolinski "Bleeding Heart Libertarianism"
It's a fairly promising start. But perhaps because I, for my part, am not an academic philosopher, while I can see the attraction to libertarianism, the attraction to social justice is a little less noticeable. I suspect that most of the reason for this is fairly basic. Despite that fact that libertarianism is commonly understood by laypeople to be simply a flavor of conservatism that chafes at some of the restrictions on personal freedom that many conservatives hold dear (otherwise known as "Republicans who want to smoke pot"), libertarianism isn't considered a "mainstream" political philosophy. Accordingly, many libertarians spend a lot of their time explaining their position. And, given the fact that libertarianism has become associated publicly with a desire to abrogate the social contract for personal gain, many libertarians spend a lot of their time defending their position, and Bleeding Heart Libertarians is no exception.

But one thing that has been conspicuously absent from the discussion on the site is any sort of specific policy recommendation, and the hard data to back it up. Thus far, the closest that they've come is this:

Open economic borders are clearly required for a truly free market.  They are also perhaps the single best way to help people in poor countries since remittances do far more good than government to government transfers (perhaps esp. when those come with strings attached–as they usually do).
Andrew Cohen "Immigration (prompted by Utah)"
Leaving aside for a moment the fact that "remittances do far more good than government to government transfers" is simply an assertion with no actual empirical data to back it up, open economic borders have a downside that is perhaps worth mentioning. Freely allowing destitute people from poor countries to travel to wealthier nations allows them to compete for jobs that will raise their standard of living. But unless the destination country is suffering from a labor shortage, those jobs come at the expense of the previously somewhat less-poor citizens of that nation. They in turn, might then migrate to a more well-off nation and undermine the somewhat less-poor there, but if there is an overall glut of labor, what's eventually going to happen is that open borders simply become a mechanism for importing poverty from poor nations to wealthy ones.

This raises a topic that I think Bleeding Heart Libertarians would do well to tackle, and so far hasn't been put on the table. If the central tenet behind being a bleeding-heart libertarian is that free markets lead to better outcomes, then perhaps we should determine if a free market wants better outcomes. I'm borrowing the idea of a market "wanting" something from Russ Robert's EconTalk podcast (which itself is libertarian-leaning) -- if technology has "wants," in a certain manner of speaking, then why not markets? In this case, the central question would be "do free markets function better with flatter income curve than they do with steeper ones?" If a market functions better with lower relative inequality, one would expect that natural market forces would function in such a way that a significant number of market players would be better off with lower inequality, and thus they would work to smooth out the income and/or wealth distribution overall, in the service of looking out for their own interests. Note that this is a different question than "Can a free market lower poverty levels," because we understand that a free market CAN lower poverty levels. But if it lacks any natural inclination to do so, relying on it would simply be a case of defining "free" as "manipulated by someone other than a governmental body," since it would likely take some deliberate intent to steer into doing so.

So it's worth figuring out if that "natural inclination" is there or not. I suspect that it isn't - many free marketeers that I know seem to think that the natural tendency of market forces is to increase inequality, and thus poverty. But I couldn't really say. So it would be an answer worth having.

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