In my post yesterday on the difference between pro-business and pro-market impulses of conservative policy, I neglected an obvious point: that Democrats - or more precisely, the swath of the political spectrum that the Democrats represent - vary in the strength of their support for the market. What’s surprising about this presidential primary race so far is that the fault line between the centrists and the liberal-left branch of the party has not really been their attitudes to the market, but rather foreign policy and the Iraq war. Surprising, too, has been the general shift to the left (i.e. away from general faith in markets) since the Clinton years in key areas:
Trade anti-internationalism: as awkward a phrase as “anti-internationalism” is it best captures the alliance (blurring even) between the protectionist forces (unions, industries and sympathizers) fighting for specific jobs and the anti-globalization forces fighting for certain large, even abstract principles (global wealth equity, national sovereignty, international labor standards). The entire presidential field now evinces some anti-internationalist measure, though they may vary in their underlying fervor, with Gephardt and Dean being the strongest, Lieberman and Clark the most reticent.
Anti-corporate populism: Oddly enough, the attack of “big corporate interests” and the specific industries (notably Big Pharma) is just as strong at the center as in the left of the party. Edwards in particular seems to have taken up Gore’s populist strategy.
Tighter industry regulation: Usually under the political radar, corporate scandals have brought at least the financial and the energy markets into the foreground. Across the Democratic party, there are more calls for tighter regulation for both. Of course, regulation itself is not necessarily anti-market (indeed, regulation can be necessarily for markets to run smoothly), but there is some grumbling from the right that Democrats and ambitious attorney generals are using the need for modest regulation as an occasion to push through major and unnecessary regulation. In any case, the Dems have moved from the Clinton tendency to move quietly on such matters to openly championing tighter regulation.
To regular readers of this blog, my position will come as no surprise: I tend toward the Clinton/Third Way compromise between social democracy and the market. Not that I have an ideological fondness of the market or of economic individualism: it’s just that 90 percent of the time (give or take a few percentage points!) markets work: they coordinate complex human demands and economic activity easily, silently, and efficiently. And while social science has progressed enough to identify when markets don’t work and to offer some remedy for their failure, it hasn’t really gone far enough to be able to coordinate any good entire alternative to them. And no, the anti-internationalism of Democratic trade positions or the rigging of drug prices aren’t good remedies for the market failures (displaced manufacturing workers or people without adequate health care).
Still, it’s necessary to keep the eye on the larger picture. These anti-market stances don’t compare with the anti-market effects of lousy macroeconomic management. We need first and foremost a government that can balance its books, use tax and spending policy judiciously and think about longer term threats to a healthy economy (current account deficit, inflated housing prices, overextended household credit). For the health of the market everything else right now is secondary.
No comments have been added to this post yet.