Economics Through the Eyes of the Liberal

by on October 15th, 2007

For Paul Krugman and his legion of liberals, ‘economic inequality’ is a blight on our capitalist system, one that dwarfs its obvious benefits. Writing in Salon, Andrew Leonard argues that this is a great time to be a liberal. Stay with us as we sample this deft but tortured line of reasoning.

Most Americans have witnessed the special scorn the left has for success, in particular for those who take risks, make sacrifices, and ultimately achieve a measure of economic prosperity. Let’s gaze through liberalism’s uniquely biased prism where the rules of economics are suspended and the terms of civic engagement are rewritten to handicap for everything from race to gender.

We begin with the most obvious but consistently overlooked observation in the liberal polity: That is, in order to accept its premise that economic inequality is inherently unfair you must deny that free markets in democratic societies world wide have been their sole cause for individual freedom and economic success, because you can’t achieve the later without the former.

They would deny it, but the facts in the matter are impossible to refute. Whether it’s modern day Ireland and the former Soviet bloc nations which have instituted sweeping economic reforms on one side of the spectrum or Chavez’ Venezuela and Castro’s Cuba at the other, economic liberalization and freedom are inextricably intertwined because the former demands the rule of law in order to take its first breath, and where tyrants rule, people are little more than economic slaves.

In the lexicon of liberalism, any hint of inequality is a sign of systemic failure, regardless of the fact that the vast majority of people in the lowest economic quintile are consistently progressing upwards. The deft approach referenced above might better be characterized as a cynically selective exploitation of economic snapshots that at once belie the reality of income advancements and provide political momentum for government intervention, typically in the form of higher taxes and regulation.

Recall that Senator Clinton said her first act as president would be to raise corporate income taxes, which betrays a staggering ignorance of economics since corporations don’t pay income taxes–consumers do. From that we must conclude her primary motivation is political not economic because for every percent you increase corporate taxes you inhibit consumers’ ability to spend and save according to their own self-interest.

Indeed, whether it’s the quintessential leftist example of economic abuse–the minimum wage–or their stunning denial that lower marginal tax rates lead to increased tax revenues, their market interventions achieve a modicum of credibility only when incentives and disincentives are tortured into compliance with a wholly unnatural set of human characteristics.

However, for the left that is considered high art and a virtue worth pursing because it purchases them power by preying on the electorate’s most primitive fear–the fear of economic failure. In that regard, it’s a base and shameful approach to economics and the market place, but the conservative alternative–setting the ground rules and allowing people to rise to their highest potential on their own–is simply not acceptable because some people will fail outright and others may only achieve modest results–and, most damning, liberals would lose their stiffling control of the people–and that the liberal mind can not countenance.

Mella is Editor of

Philip Mella