The full text of Brink Lindsey's proposal for a libertarian-liberal alliance is now available free of charge here.
Interestingly, he describes the proposal as one for a liberal-libertarian "fusionism," similar to the liberal-conservative "fusionism" that began in the 1960s and is now undergoing a crisis. I agree with Lindsey that a liberal-libertarian fusion would be desirable. But, as he points out, figuring out how it would work is a "daunting task." To my mind, the potential room for agreement involves a combination of liberals opposing the many big government programs that redistribute to the rich and middle class from the poor,libertarians accepting redistribution that benefits the genuinely destitute, and both sides placing greater emphasis on those personal liberties issues on which they already agree. Lindsey's proposed program seems similar.
However, for reasons outlined in my post on "Libertarians and Liberals" the political and even intellectual obstacles to this vision are very great. If it happens at all, it will only be over a long period of time. Meanwhile, libertarians should not abandon efforts to work with small government conservatives to put the GOP back on a small government track.
Related Posts (on one page):
1) Mean Testing, libertarians are against an expansion of entitlements but not necessary true safety nets especially if the safety net isn't a permanent fixture (people bounce back up)
2) Introducing market forces into the safety net programs instead of just a transfer of wealth. Libertarians would be more for a health care program if it was similar to the theory of vouchers instead of a blanket Medicare system such as Canada. To do this health care needs reform laws and it needs to be decoupled with you are forced to take your employer's insurance company. Here is your 2,000 dollars which you must use on health insurance, you only get these 2,000 dollars thus you choose the best program for your buck.
Of course this isn't going to happen in my opinion in this generation the political leaders/interest group mindset is just too lock down. Remember in the 60s and 70s Friedman was mocked and consider fringe, this is the time when our current politicians went to college. It will take a new generation who believe in market forces to change the idea of a safety net.
Is this a misprint?
Federal income tax statistics show that wage earners below the median income pay about 3% of the total income tax revenues. How is this income redistribution from the poor to the middle class and the rich? If you look at the formulas for SS retirement benefits you will see it’s highly skewed to benefit low earners. Even if all the tax revenue were somehow rebated back to the rich and the middle class 97% of it would be their own money coming back.
The poor pay a higher percentage of Social Security and Medicare taxes. Also, there are numerous regulatory programs that don't go through the tax system that benefit the relatively affluent at the expense of the poor (among others).
The poor pay a higher percentage of Social Security and Medicare taxes. Also, there are numerous regulatory programs that don't go through the tax system that benefit the relatively affluent at the expense of the poor (among others). Finally, the 3% may be a small percentage of the total income tax, but it's still a lot of money to those who pay it.
"Is spending all of this money on a war abroad going to make America or Iraq a happier, freer place?"
Libertarians should ask the same question about policies that address the amount of wealth/income/asset inequality domestically:
"Do our society's treasured freedoms depend on sustaining a society in which there is NOT an extreme divide between the comfortable 'haves' and the perpetually insecure 'have nots'?"
These are both hard questions. But they are the right ones to ask because the (1) direct our attention to the most significant trends (swelling war budgets and accelerating growth in wealth inequality) and (2) focus the attention on the general affects of these trends.
Give the same criteria to any of the intellectual liberals, and you'll quickly find a big panic. Just reducing funding to the BATmen would scare Kennedy into shitting his pants.
Libertarians can deal with Bush because his worst possible acts aren't that scary. We've dealt with tyrants who had their Benedict Arnolds and other methods of spying, and the idea of requiring the government to recognize something really doesn't affix well. Bush turns into the worst possible parody that the DUmmies can come up with, and the Second Amendment still has meaning. Totalitarian fascism still leaves the tools for uprising, and in fact encourages it.
The opposite isn't true, and I can't see Democrats changing enough.
Not true. Bush's prescription drug program alone is likely to cost more than the wars in Iraq and Afghanistan combined.
“The poor pay a higher percentage of Social Security and Medicare taxes.”
They do, but as I pointed out the government makes up for that at the benefit end by skewing the benefits toward the lower end of the contributions. Social Security is not only indexed to keep up with inflation, but also with wage growth. The poor get the best return, it more than makes up for the regressive nature of the tax at the revenue end. Moreover, the poor also collect SSI. In addition the FICA tax applies to middle class incomes as well as lower incomes, so the middle class too pays a regressive SS tax.
"Also, there are numerous regulatory programs that don't go through the tax system that benefit the relatively affluent at the expense of the poor (among others)."
So who pays for these regulatory programs, the poor surely don’t? Moreover you have not shown that these regulatory programs are so large as to constitute income transfer from the poor to the middle class and the rich.
“Finally, the 3% may be a small percentage of the total income tax, but it's still a lot of money to those who pay it.”
This statement is irrelevant to the issue of income transference. But lets be clear that 3% applies to earners below the median, that’s not necessarily poor. The “poor” actually get an income credit so their contributions are negative. Yet you keep telling us that there is income transference from the poor.
is poor an expression of some quantitatively absolute term that deals with living standards and basic necesities or is it a statistical term that sepaseparates out the lower 5%/ 10%/ 25% ( or whatever) of the income distribution curve. I think it is emblamatic of our times that most have adopted the second definition. Quite possibly the progressives/ marxists have defined the terms of the debate. problem is that this is 1. an unwinnable proposition - in the absense of a govt mandated equal pay for everyone ( shades of pol pot)incomes will always be distributed along a curve and the curve will always have a right and left tail. In short, no matter howprosperous a society becomes there will always be someone who is in the bottom quartile of the income distribution curve.
In the developed western nations of north america and western europe for all the pithy and pious talk, THERE IS NO POVERTY inj the quantitatively absolutist sense.
I grew up upper middle class in a third world country, and I know what poverty is - hunger malnutrition no clothing shelter or healthcare. The so called poor in the USA have access to more goods and services than I had growing up. I am constantly amazed at how someone whose malnutrition comes from having too much to eat, who lives in a apartment with heat and airconditionoing ( forget about basics like 24 hour clean water supply and electricity) cable television, phone service cell phones and access to basic health care either through medicaid or through a emergency visit to the ER etc etc etc can qualify as poor.
Has the redstributionist left so defined the agenda that the person above is poor. My father retired as the dean of a major medical school, in the country of my birth. He has never thought of himself as poor and he isnt. BUT the poor in america often have abetter standard of living than he does. The only poverty I see in america at times is a poverty of the mind.
In any event, the rerason for this somewhat off topic post was that without having a valid emperical definition of poor. this debate is reather futile
"The poor get the best return, it more than makes up for the regressive nature of [FICA] at the revenue end."
All things else being equal, what you say is true but is it still true after you take into account the fact that lifespan is correlated with wealth? For example, I've heard that blacks (who on average are poorer) on average do not live long enough to get their contributions returned, and that in practice Social Security transfers wealth from black men to middle class white women.
I don't know of any good data that confirms or contradicts this, but I wouldn't be surprised if it were true. It's usually a safe bet to assume that the poor are getting the short end of the stick.
If you look at Table A of the National Vital Statistics Report, at age 65 whites have about 2 years over blacks in life expectancy at age 65. So at retirement the difference in present value of the SS annuity is pretty trivial. Remember the payment in each year is discounted by a factor 1/(1+r)^n. So the later years don’t contribute very much to the present value. Blacks would still get a better return on contributions because of the benefit formulas skew to the lower contributions than middle class whites.
Which is not to say libertarian-minded people are now in control of the Democratic Party. But I think they are in the position of being able to influence Democratic politics, while at the same time also being in a position to influence Republican politics insofar as they can present themselves as necessary to the Republican coalition. Which makes them a swing constituency, and it doesn't get better than that for a minority position.
So, I propose libertarian-minded people should be very ambitious--they should seek to continue to play both parties against each other in an effort to have disproportionate influence. And I think they are currently in the position to do exactly that, because unlike a lot of other constituencies, they have just proved that they are in fact willing to swing.
Why are you looking at mortality just at retirement? It seems to me the issue depends on the expected return for dollars being paid in during the working years, so you should be aggregating for all of those years. In other words, it also matters if more poor people than rich people (or black people than white people) are paying payroll taxes and then not even making it to 65.
What I personally find amusing is the idea that Libertarians could ally themselves with anybody. Libertarians are nice people. But the idea that there could ever be any sort of concensus by and for Libertarians is something akin to fool's gold.
Frankly the phrase "herding cats" comes to mind.
Actually, it's even worse. It's more like herding armed cats. ;)
My take on the matter is that the whole thing is going to backfire on them, and my summary of the situation is that after 30+ years of failure to gain traction by mining the libertarian Right, and given the ideological fracture with the Right concerning the WoT and Immigration, the libertarians found a certain synergy with the Left, and set about mining it, a move recently noted and embraced by the Left, as it serves their purposes of undermining the Right.
Libertarians are great at ideology and grandstanding, but they stink at realpolitik, and so my prediction is that they're going to eventually be pwned by the Left, which is really, really good a realpolitik, and also the classic maneuvers of infiltrate, fraction and assimilate.
The end result will be libertarians being even more fractious, disorganized and marginalized than usual.
Which is a darn shame, as America desperately needs a libertarian reawakening.
Libertarians are selfish, greedy, right wing Utopians (anarchists of the right really). You constantly bash Marxists and berate the failure of Marxism and how socialism has been shown again and again not to work, yet ignore the horrible conditions, inequities and failures of capitalism as it existed in the 19th and early 20th centuries.
You're just pissed off that you have been used as useful idiots by the Republican party and you are finally waking up to it (apparently at about the same time as the social conservatives). Now you want to see if there is a place for you among the liberals. Well there isn't. We believe in too many things you hate. Things like a progressive income tax, taxes unearned income at the same rate as earned income, that single payer health insurance just might work better than the free market, that poor people do deserve a helping hand, and public education is the best way to deliver education to everyone (of course for all the hatred of public education it's funny that it seems that libertarian bloggers disproportionately don't mind earning their living teaching at public universities).
So we don't want you.
I think it is important to distinguish big "L" Libertarians from people who are generally libertarian-minded but much more moderate in the changes they would like (or least reasonably expect) to see. The former are small in number and can probably be safely ignored, but the latter are a decent-sized group and represent a viable swing constituency.
Liberals do want libertarians. Liberal fundamentalists and Marxists don't, but they are a very small and weak minority.
I am extremely pragmatic. Libertarians (whether with a large or small "l") have an overinflated sense of their importance. Why should liberals, who believe in strong and effective government and that government plays a vital role in regulating the economy, want to align with libertarians who believe that government solutions are always inferior to those of the free market (no matter the evidence to the contrary) and believe that government should be kept weak and ineffective.
The real question is why would libertarians want to align with the Democrats and liberals. What on earth would they gain from it except more heartache?
The Socialist Left, whose closest American cousin is liberalism, is based on the general understanding that the more government controls on individual liberty are the best way to achieve public welfare.
They are polar opposites.
In the realm of economics, libertarians believe in free markets where the government is limited to enforcing basic law like contracts. If some end up wealthier than others as a result, that is just fine.
In contrast, the basic precept of liberalism is government theft of wealth from one group to the other under the rubric of redistribution of wealth to create a more equal society. If the result is a poorer society, that is just fine.
The conventional wisdom is that American liberalism shares a love of civil liberties with libertarianism and this could create the basis of an alliance. However, this is largely a myth.
Liberals are only in favor of civil liberties which permit their idea of social order and oppose those which do not. Sexual and criminal license are OK, while religious speech, conservative speech and the right to keep and bear arms are not.
In contrast, libertarians believe in almost no restrictions on anything.
There is one area in which most libertarians and the modern left share common ground - national defense or the degradation thereof. Libertarians are almost complete isolationists who would reduce the national defense to a tiny national army and a large domestic militia. The post Vietnam liberals do not believe in much more national defense.
However, withdrawal and disarmament are thin reeds onto which to hang a new political alliance.
The reason the Conservative / Libertarian alliance worked is that they share the same economic and half of the same civil liberties agendas. They diverge in the area of legislation of morals. However, despite a great deal of talk, the modern conservatives rarely enacted any meaningful morals legislation so peace was kept on this front.
The reason why this alliance has become strained recently is because the conservatives fell prey to the temptation to spend like drunken Democrats to buy votes and keep their political power. Libertarians, especially out here in the Rocky Mountain west, either stayed home in disgust or voted for Dems running on fiscal responsibility platforms.
However, if the GOP gets back to its Reagan-esque roots and the Dem left in charge of all the committees of Congress acts according to type, the libertarian conservative estrangement should be brief. They share too much in common and the libertarians really have no where else to go.
The answer to your question is that there are many libertarian-minded people who don't fit your characterizations. For example, I think many libertarian-minded people more accurately believe that government programs are often, but not always, ineffective at dealing with the problems that they are nominally designed to address, and that even effective government programs often expand beyond their appropriate bounds over time, and that as a result we should be taking active measures to keep government relatively small, efficient, and focused on the areas where government programs actually work relatively well. And I think there are many Democrats and liberals who think such libertarian-minded people often have a point.
Once again, Bart's characterization of American liberals is cartoonish, and will fail to apply to most people in America who self-describe as liberals.
I am speaking of the roughly 1/3 of the country who actually believe in left liberalism, not those who necessarily self describe with the term "liberal."
Many folks who self identify as "liberal" (as well as may who self identify as "conservative") are actually libertarians or libertarian leaners. The Libertarians came up with a neat recruiting tool called the World's Smallest Political Quiz to convince people that they were actually libertarians.
http://www.self-gov.org/quiz.html
I score smack in the middle of the libertarian quadrant of this quiz. However, I left the libertarians for the GOP after college when I joined the military because the libertarians like the isolationist left have a very naive view of the world. The quiz (intentionally I think) leaves out national defense issues to allow more folks to rate as libertarians.
Houston Lawyer: what does govt. redistribute from the poor. Well, I can think of three examples. I remember one study showing that subsidies to universities disproportionately helped the wealthy as children of poor people were far less likely to attend. They were subsidizing the rich. Social Security benefits groups that live longer. Blacks have lower life expectancy than whites and thus pay in at the same rate but collect at a lower rate. And that pretty much matches a poorer group financing a richer group. I also remember when I lived in Chicago that they used a gas tax to help subsidize train service. Yet the average driver was poorer than the average commuter on the train. We also have things like corporate welfare programs, farming subsidies, etc.
Where to push for libertarian ideas with Democrats? First, we must push them to be firm on ending the war. Second we need to push them to repeal the Patriot Act. I would use issues like the marriage amendment to push them to adopt a more pro federalist position across the board. If they refuse to take a federalist stand they alienate gay voters. If they take a federalist stand push for it consistently. You can also use the medical marijuana issue for this same thing.
I think you won’t have a hard time getting more Dems to support gun ownership. The real hard core antigun movement appears to be dead to me. Things are moving in the opposite direction on that issue.
Go hard after corporate welfare and such measures. Put together a pro-poor agenda showing a litany of pro market reforms that would clearly benefit poor people. But them on the defensive if they want to oppose such measures.
As to “herding cats”. Well, I had three cats and I could herd them. Maybe you don’t know how? Mine were pretty well trained. If I told them to go into the other room they might talk back a bit but they went. Getting the to remember not to come back right away -- well slightly different. But most the time they obeyed. All my cats my entire life have been like that.
JF Thomas: what a twit. No arguments just insults. Uninformed, economically illiterate and a control freak. (See arguments like you make.) And I’ve worked far more with liberals than conservatives and quite successfully too.
“Why are you looking at mortality just at retirement?”
Because that’s when people start drawing their defined benefits as an ongoing cash flow until they die. So the longer expected additional years of life after 65 the greater the present value of the annuity. On the other hand, death before age 65 reduces contributions to the annuity you will never get to collect. So as a worst case I ignored mortality before retirement. So if blacks have less chance of making it to 65, they are actually ahead in terms of return on SS contributions.
“Things like a progressive income tax, taxes unearned income at the same rate as earned income, …”
Have you thought through the economic consequences of an increased tax on capital gains? First off do you mean a tax on the real increase in the value of capital or the nominal increase? In the latter case you are taxing inflation. If we increase either the real or nominal increase then we reduce the return on capital. This has economic consequences because for a given level of risk, the value of the capital decreases, so the tax will shift investment to less risky enterprises. Is this what you want? That probably means less technological innovation. Under current tax policy any investment that does not carry a risk, like an original discount bond, suffers an imputed tax every year. This means you get taxed on an increase in value before you even realize it, and you net return at maturity really suffers. This policy shifts investment to more risky instruments.
Well, yes I have, and all your arguments are bullshit. Give me one rational, economically valid reason why profits should be taxed at a different rate than ordinary income. Why should a top notch surgeon who earns $500,000 a year from performing operations and saving lives pay more in taxes than some trust fund brat who earns his $500,000 purely off of investments? The economic consequences of the taxes paid on the earnings are exactly the same. What matters is how the earnings are invested. If the doctor invests his earned income in stocks he is doing the economy a hell of a lot more good than if the trust fund brat blows his money on booze, drugs, and hookers.
Ilya: Not true. Bush's prescription drug program alone is likely to cost more than the wars in Iraq and Afghanistan combined.
Good point. The costs are comparable. Maybe the drug program will cost $395 billion over 10 years. If the yearly costs of the wars is $60 billion then, depending on the length of the war, then you may be right.
But are either of these expenditures the most efficient ways to accomplish the respective goals of (1) securing America/freeing Iraq and (2) getting the most people the most secure health insurance protection?
Exactly, and that is affected by tax policy. Both the surgeon and holder of a trust fund will both consume and invest. What they invest in is determined by risk and real return. Now some surgeons and some trust fund owners will make poor investment decisions. So what? What matters is the net allocation of investment capital.
No I'm not. I'm not suggesting capital gains be taxed at a higher rate than earned income, just the same rate. As things stand now, capital gains are taxed at a lower rate than earned income (not to mention that there are taxes assessed against wages that are not assessed against capital gains at all).
Taxing investments is not like taxing capital because most of us have more choice over what we invest in than how much we work. It’s true that a taxi driver or a surgeon might vary the amount of work he puts in based on after tax income, but most of us can’t. We have a job that produces income. If income taxes go up we pretty much don’t change our behavior unless the taxes get so high we quit and join the underground economy. Investing is different. Investing is much more sensitive to tax policy. If earned income were really just as sensitive to tax policy, that would be a good argument for eliminating the income tax altogether and replacing it with a pure consumption tax. After all if you tax something you get less of it.
I doubt even 1/3 of Americans fit your description. But in any event, I think Lindsey's point is in accord with your model: the basic idea is that there are many self-described liberals/Democrats who are also at least somewhat libertarian-minded, which creates an opportunity for libertarian-minded people who have previously supported the Republican party to create a different coalition.
Zarkov,
I must be missing something. Suppose I work until 64, paying the payroll tax the entire time I work, and then I die while still working, and before I can collect any Social Security benefits. How does that put me "ahead in terms of return on SS contributions" relative to someone who lives to, say, 70, contributing until 65 and then collecting benefits until 70?
It seems to me that everyone who pays the payroll tax and then dies before collecting benefits is going to be behind everyone who lives long enough to collect benefits "in terms of return on SS contributions" (all of the former have no return, while all of the latter have at least some return). Dying earlier (e.g., 60 instead of 64, or 45 instead of 60) just means you contributed less, but you still got no return whatsoever on your contribution.
In the interests of simplicity, I assume everyone retires at 65 and starts to collect benefits. Therefore the sooner one dies before age 65, the less their loss. Someone who died before he started paying FICA taxes at all would have no loss.
Right, but all those people who die after paying payroll taxes but before collecting benefits surely should be accounted for, because they do in fact take a total loss on whatever they paid.
For example, consider the extreme case in which 99.9% of some class (poor, black, etc.) died between 50 and 65. This class would receive almost no return on its contributions to Social Security, and yet your method of looking only at those 0.1% of the members of the class who reached 65 would fail to capture this effect.
I guess I think this is such an obvious point I don't know why you are resisting. If you want to look at how a certain class does with respect to Social Security, you should look at all the members of the class, seeing how their net payments into the system compare with their net withdrawal of benefits from the system. Looking at just one subset of the class (in your case, those who reach the age of 65) seems to be an obvious mistake.
You are correct. What I said only holds for the group that dies before 65, not the class as a whole. Once again I learn not to do some things when one is tired. However, the difference in mortality is still too small to make any real difference. The original point still stands-- it’s absurd to claim that we have a wealth transfer from the poor to the middle class and the rich, even with small loss on SS. By “poor” I mean the people in lower quintile of income who pay negative federal income tax.