|
Wednesday, June 13, 2007
More Meditations on the Hamilton Project
One last thought on the Hamilton Project- I believe they do not serve the cause of fighting inequality.
Stay with me on this one. Take this statement:
Industrial policies and direct market interventions can try to change the before-tax distribution of income. But ultimately such policies harm the economy—for example, excessively high living-wage laws can result in large job losses for low-skilled workers.
Factually, I believe the statement is wrong. Government intervention in markets can promote the common good. Everything that's known about health care provision is a case in point.
As for its politics, the statement gets to the heart of what's wrong with the Hamiltonian philosophy, which posits that government is wasteful but nice, and the market is cruel but efficient- the "Mommy-State and Daddy-Market" philosophy, one that seems to dominate the economics profession from Brookings all the way to George Mason University.
Hamilton's version of this story is less crazy than others. But it is fundamentally the same- it denigrates government and puts the market on a pedestal. Worse, all varieties of the message are legitimized when one comes from the "non-partisan" Brookings Institute.
Look, this kind of behavior just isn't helpful. It might have been cool in the '80s and the '90s, but it's not cool anymore. Our country now has big problems to face up to- inequality, the health care crisis, global warming, etc.- that can't be solved with tax breaks. It's going to take vigorous collective action, and our best collective institution is and will probably always be the federal government. Belittling it like the Hamiltonians do only serves the interests of people who don't want to do anything about these problems (a point made well in this interesting article on inequality by James Lardner).
That's why it's hard to swallow the Hamiltonian's professed interest in reducing inequality. If they really did, they would scale back their assault on government. But they don't take seriously anyone who believes in governmental efficacy, so why even bother with them?
Posted by Matt Lewis
|