The Dilemma of the Liberals

Just recently, under his contagious clarion call “Yes we can,” President Barack Obama successfully managed to pass his Health Care Reform Bill.

The House vote was far, however, from a landslide victory for Obama, with the final tally coming out to 219-212. What’s worthy of mentioning here is the complete absence of Republican approval votes, underscoring the bipartisan politics of modern-day America.

Today, politics has become so polarized that it’s hard for political parties to find common ground. Aside from the smearing and trash-talking emanating from both parties, political polarization has deep economic repercussions.

In short, an increase in political polarization causes a rise in economic inequality.

Why?

For one thing, without basic agreement on fundamental values-in other words-without a common vision that transcends bipartisanship, economic commonality is infeasible.

In his book The Conscience of a Liberal, Paul Krugman notes:

history suggests that there is a kind of ‘dance’ in which economic inequality and political polarization move as one [...] an erosion of the social norms and institutions that used to promote equality, ultimately driven by the rightward shift of American politics, has played a crucial role in surging inequality.

He then observes the social ramifications of political polarization:

the increase in U.S. inequality has no counterpart anywhere else in the advanced world. During the Thatcher years Britain experienced a sharp rise in income disparities, but not nearly as large as the rise in inequality here, and inequality has risen modestly if at all in continental Europe and Japan.

This political polarization is fueled in no small part by an ideological schism between modern-day neoliberals and liberals. The neoliberals advocate the right of self-ownership (and thus denounce taxes), while the liberals promote socioeconomic equality (and thus are in favor of taxes.)

The clash between liberals and conservatives is ultimately the clash between freedom and equality. While both freedom and equality are fundamental human rights that should and are rightly fought over, one is essentially garnered at the expense of the other.

It is thus of little surprise that there has been much academic debate arguing for freedom on one hand and equality on the other.

The neoliberals have two erudite titans on their side, namely Milton Friedman and Robert Nozick.

The late Milton Friedman, a Chicago-based economist, argued in his book Capitalism and Freedom (1962) that an economy unfettered by government intervention is the fairest, most efficient way of managing an economy. Despite Friedman’s conservative stance, he continues to be viewed with deference by economists on both sides of the political spectrum for his contributions to economic academia.

Friedman’s book Capitalism and Freedom offers conservatives the basis for an economic policy which advocates a lessening of taxes. In particular, Friedman’s work can provide the logical backbone to weaken the progressive tax system. Thus  quite naturally, the demographic of most conservatives are generally in the upper-income strata, people who would benefit directly from less taxes.

Robert Nozick furthered the neoliberal/conservative/libertarian philosophy in his book Anarchy, State, and Utopia (1974). Like Friedman, Nozick arrives at the conclusion that society is at its best when the government is at its smallest.

Nozick provides the rightist camp with the political philosophy that would support their political persuasion. He argues that in a hypothetical situation of an “initial state,” a state in which society has yet to be created, no one would agree to have their right of self-ownership infringed upon.

In other words, no one would agree to let others (such as the government) take hold of their liberty, their fundamental right as a human being. If one were to let the government tax their income, then they would technically be enslaved by the government. For instance, if one’s income was taxed at 30%, then 30% of the total time he works in a day would be time worked for the government, which, Nozick argues, is no different from slavery.

To put it succinctly, rightists believe that the sweat of a man’s brow belongs to himself.

Interestingly, John Rawls, the political philosopher who leftists (liberals/egalitarians) seek to validate their claims, also hypothesizes an “initial state” to analyze whether people would advance freedom or equality.

John Rawls envisions a hypothetical situation in which on one hand there is society in its “initial state,” and people must choose amongst themselves what kind of laws they would agree upon behind a “veil of ignorance.” In other words, people will be assigned their sex and post arbitrarily and will not know in advance what kind of social status they will occupy.

Rawls argues that as a form of safety/insurance, people would undoubtedly choose a society with some kind of social safety net. The risk of anyone being assigned to a low-paying job, Rawls argues, would make people agree in an “initial state” for a society in which the government provides some kind of income redistribution.

We now see that while both Nozick and Rawls create similar hypothetical arguments, they arrive at conclusions which are polar opposites of each other.

In the sphere of academics, the battle of ideologies is fought over with logos, ethos, and pathos.

But in politics, it’s fought over with campaign money. After all, raising or lowering taxes has a direct impact on people’s lives.

The year 2009 was marked by a democratic victory in both America and Japan. The inauguration of President Obama of the United States and Prime Minister Hatoyama of Japan into office has brought the Bush-Koizumi neoliberal reform policies to a grinding halt.

What caused such an abrupt change? The answer, perhaps, can be found in Robert Reich’s Supercapitalism, which shows that American-style capitalism has gone too far in advanced neoliberal capitalist economies. When the top CEO’s of American companies were beginning to earn over 300 times the income of the average worker, when investment bankers were reeling in millions in bonuses, and when Walmart’s atrociously low wages and health insurance skimping became rampant, people had finally decided that enough was enough.

But how had the conservatives advanced their agenda for so long? How had the Thacherites of Britain, the Post-Reagan administrations of the US, and the Tanaka cabinet onwards of Japan plow through their reform without resistance from the left?

The truth is that there was resistance from the left. But liberals, unlike conservatives, are an eclectic demographic, and the liberal intelligentsia are small in number. And here’s the real kicker: unlike conservatives, liberals don’t have the kind of lavish funding for their political campaign runners.

2009 marked a time when people who were usually disillusioned with politics rallied behind the liberal cause in an effort to halt the encroaching inequalities brought about by conservative reform.

But already, both President Obama and Prime Minister Hatoyama face renewed resistance from an increasingly audacious and well-funded right. The enigmatic and lucrative wildlands of Wall Street remain unscathed by legal reform too: death bonds and catastrophe bonds have replaced the once-savvy subprime mortgage bonds.

Is the liberal wind going to push us forward to a more equal society? Or will we slowly digress back towards a path of inequality?

Only time will tell.

//By Ryo TAKAHASHI

3 Responses to “The Dilemma of the Liberals”

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