Libertarian Populism and Basic Income

UPDATE: Welcome, reason readers! Make sure to follow me on Twitter at @jdkolassa!

There’s been a new trend in political writing over the past few months: the notion of “libertarian populism.” After doing the autopsy on the Republican Party’s downright pathetic 2012 presidential campaign–something that the GOP should have won handily, but instead lost miserably–many have started to look towards some form of libertarianism as the GOP’s 2016 savior.

There are many, many positive developments from this, namely a focus on economic rather than social issues (which, let’s be frank, is a lose-lose proposition for the Republican Party–even abortion, though that’s more long-term) and directing fury at crony capitalism, that collusion between big government and big business that is the real problem, not any imagined socialism. And unlike some naysayers, I think a “libertarian populist” message would resonate well with voters–as long as the PR packaging is done right.

As far as I can figure out, the genesis of this recent trend began with Ross Douthat, when he wrote a blog post laying out a case for “reform conservatism,” another option for revitalizing the GOP and the larger conservative movement. It has some interesting points, though Peter Suderman over at reason took some exceptions to a few and asked why not adopt libertarianism rather than try and fix conservatism? Douthat then wrote a reply, entitled “Libertarian Populism and Its Limits.” (He does cite a tweet by Ben Domenech talking about “populist libertarianism,” but let’s call that a prequel.) I understand some of Douthat’s points, but as far as I can see he’s wrong on monetary policy and he doesn’t seem to grok how yes, we can sell Rand’s platform as being benefical to the folks on the lower rungs of the ladder (go read BHL for starters.)

(By the way, if you’re interested, Pascal Emmanuel Gobry has written a manifesto for reform conservatism over at Forbes. Not saying that I agree, it’s just interesting.)

The next day, Ben Domenech wrote on RCP the piece that seemed to really start it all, giving us an “agenda” for libertarian populism. The very next day he wrote a second essay responding to his responders, this one illuminating the challenges that libertarian populism faces. These two pieces are crucial, I think, for setting the this discussion up, but it didn’t stop there.

Earlier this month, Conn Carroll at the Washington Examiner, which recently became a monthly publication, laid out a list of policy reforms for “economic populism,” but I think he really means “libertarian populism.” Then, Tim Carney,  “Mr. Anti-Crony Capitalist” himself, laid out a similar list of policy ideas in AEI, a sort of proto-manifesto. Gobry, again at Forbes, wrote glowingly about Carney’s piece.

But then, of course, there are the detractors.

There is, of course, Paul Krugman’s obligatory swipe, but let’s not mince words about Krugman–he’s a loon. More credible is criticism from Ramesh Ponnuru, a “reform conservative” (or “reformocon”) who notes that people won’t necessarily buy into libertarian populism, because folks don’t care about some of the more wonky ideas (a point that Ed Kilgore also jumped on–but who the hell listens to him?)

And where does this end up? With me, of course, adding my own voice into the mix.

Let me first pull together the items from Carney’s list and Caroll’s list, so we have an idea of what the core of a libertarian populist policy might look like:

  1. Tim Carney
    1. Break up the big banks, and/or place stricter safety and soundness rules on them
    2. Cut or eliminate the payroll tax
    3. End corporate welfare
    4. Cleaner tax code
    5. Health-care reform
    6. Kill anticompetitive regulations
    7. Address political privilege
  2. Conn Carroll
    1. Rollback the surveillance state
    2. End the Drug War
    3. End deportations
    4. Break up the banks
    5. Return infrastructure to the states
    6. Return education to the states
    7. End student loans
    8. Revenue-neutral tax simplification
    9. Market-tested health care

Obviously there is some overlap here. But we do get a broad outline for a reform agenda: break up the banks, return powers to the states, end subsidies and bailouts to big business, and enact institutional, structural reforms that benefit the little guy while weakening the big wealthy elites. This is a winning strategy all around.

Now, to issue some disagreement with Mr. Ponnuru. He writes:

I’m sympathetic to most of the items on Carney’s list — and those on the list that fellow populist Conn Carroll has compiled. Taken together, though, they do not seem to amount to a winning political platform. A Republican party that took on the U.S. Export-Import Bank might improve its image a bit, but how many Americans really care enough about the issue to change their votes based on it? Nor does freeing the food trucks seem like it would win many votes, however right it might be as a policy matter.

The libertarian populists sometimes seem to make the same political mistake as left-wing populists: Assuming that because most voters distrust big business and do not believe they share its interests, they are therefore looking for the politician who will most vocally take it on.

Cutting the payroll tax, unlike most of these ideas, would tangibly affect most people’s lives by raising their take-home pay. If Republicans proposed it, though, they would surely be accused of jeopardizing Social Security and Medicare, which seems like a rather large political defect. Other Carroll proposals, such as ending student loans and the mortgage deduction, seem likely to be unpopular even at first glance.

While I sympathize with his concerns, I think they’re misplaced. Yes, people are probably not up to date and therefore don’t really care as much about the Import-Export Bank. But that’s not a problem. All you need to say is this:

You only have $20,000. These big corporations have $20 billion. The government is taking your money and giving it to these big corporations! That’s messed up!

Boom. No in-depth, wonkish policy explanations necessary. Just use basic rhetoric and what is foremost on folks’ minds: the money in their wallets. Great success! And as for food trucks and Social Security, well, food trucks have more supporters than I think Mr. Ponnuru thinks they have, and there is a growing segment of Americans, young and old, who are getting very concerned about Social Security, and sooner or later those are going to have to be addressed anyways, there’s no escaping that.

I think this is a really great start, and indeed, a libertarian populist agenda married to “reform conservatism,” as Gobry suggests, may actually win at the polls. Putting families against big business is sure to get some people onboard. Believe me, I’m still very skeptical of libertarian-conservative fusionism–ultimately, it’s more of a tool for conservatives to boost their voter rolls than anything–but a fusionism where libertarians took the reins, focused more on economics instead of losing, divisive social issues, and focused on the moral worth of the individual rather than blindly talking about “society,” would be one I could get behind.

There are a couple of things I think this growing movement is missing, though, or at the very least, there are some things I think should be coupled with it. One should be a distaste or skepticism for mixing religion with politics. I make no bones about my being an igtheist, a nonreligious person, and I’m a fan of the new Republican Reason Caucus, a group explicitly formed to make the GOP more secular, more tolerant, and more rational (i.e., no more of this crap). Medium to long term, basing all political arguments on religious ones just isn’t going to work. 20% of Americans are nonreligious and that number is growing. Note that I am not saying that the GOP must become completely secular, but it must be become more secular, and just tone down some of the more fundamentalist Christian rhetoric–and yes, in the process, become more inclusive to gays and lesbians, and anyone of “alternative” lifestyles. Look back at recent history and note, when has the GOP won big? When it ignored social issues, tempered the religious rhetoric, and went straight for the economics and defending people’s wallets. When has it lost? When it started talking about “legitimate rape” and other nonsense.

We can definitely agree that individual churches should not have to bend their doctrine to fit a political will, and that they should not be forced to sanctify things that go against their beliefs, but that works two ways. Let’s stop bringing religion into politics and then we can start getting politics out of religion.

Second, I don’t really see anything about the social safety net. Yes, there’s a lot about reforming entitlements, but there’s precious little (from what I can see, anyways, I might be blind) to the more overall system of welfare. It’s a system plagued by redundancies and inefficiences, yet is still growing, all the while punishing people who increase their income and make themselves better off. This is insane. The government doesn’t even know how many are actually there, what they’re actually spending, or if they’re getting taxpayers’ money’s worth.

There is a reform path that I’ve talked about before, and that has been supported by such great minds as Milton Friedman and Jeffrey Miron: the Negative Income Tax. This would essentially create a guaranteed minimum income or universal basic income, ideas supported by Friedrich Hayek and Charles Murray, and would also do away with many other detestable things. First, by combining it with a flat tax (which is how both Friedman and Miron sketch it out) it would effectively do away with a ton of the IRS bureaucracy. Second, because it would be automatic, it would also effectively do away with a lot of the HHS and welfare bureaucracy, which is a good thing. (I would argue that bureaucracy, not government, is our real problem. Most anything which shrinks bureaucracy is a plus in my book.) Third, at the same time it’s helping the poor, it would also promote beneficial habits and behaviors, and possibly also increase entrepreneurship and push these folks to succeed. (As one friend of mine said, people will be more likely to take chances if they know they have something to catch them should they fail.) Fourth, with it in place we could abolish the minimum wage–a policy that hurts the poor more than it helps–and that would get employers to start hiring again. Fifth, it would also be politically successful, as let’s be honest: the vast majority of Americans, even conservative Americans, do not want to live in a country with no social safety net. That’s a view only shared by the most hardcore Tea Partiers, Nozickian libertarians, Randian Objectivists, and anarcho-capitalists. Proposing any sort of view that just cut away welfare without replacing it with something better is doomed to failure and mockery.

An NIT, on the other hand, if marketed properly and not conflated with other idiotic ideas, can be a very strong replacement. In my view, in addition to having the “general deduction” (which would be the threshold you’d have to cross before you starting paying taxes rather than receiving them) and a charitable deductino (don’t leave home without one!), I would also put in a system of tax credits for the five basic needs in modern society: the three classical ones–food, clothing, shelter (including rent, utilities, etc.)–and the two “new” needs I see–healthcare and education. Put that together, combine it with the pro-market reforms listed above, which should definitely make it easier to get ahead and make the prices of goods and services go down, and you have a winner for a more stable, more prosperous society. (And while we’re at it, let’s junk the corporate income tax. Better for the poor, as it turns out.)

That’s a really long blog post. But I think it’s necessary. There’s a very good thing happening here. But it needs a couple more ingredients to make it stick.

  • Will Spencer

    Breaking up banks is a very un-libertarian idea. It’s pure statism.

    • jdkolassa

      So there are a few different things to take into consideration.

      1) This trend is not fully libertarian, after all–it’s libertarian *populism*. That has to be kept in mind. Breaking up the big banks is one definitely populist item.

      2) However, not all libertarians think this way. Mish Shedlock, a respected Austrian economist and investment advisor (and a libertarian) advocated breaking up the banks back in 2009 ( http://globaleconomicanalysis.blogspot.com/2009/04/time-to-breakup-goldman-sachs.html ), largely on grounds that the investment banking side and the commercial banking side (not sure if I’m using my terminology right) need to be separated because these big banks were defrauding investors by telling them to buy the banks assets, and then purposefully shorting them. (Or something along those lines; admittedly, I am not doing any great justice to Shedlock’s perspective.)

      In addition, Arnold Kling, a central figure in libertarian academia, has also argued for breaking up the banks ( http://www.cato.org/publications/commentary/break-banks ) on the grounds that big banks are unnatural and the product of statist politics, not natural economics.

      I myself don’t really have a position one way or another, as I simply have not researched the issue that much. So I’m refraining from taking a position until I do.

      3) Kinda gettin` annoyed with the term “statist.” But that’s just me.

      • Will Spencer

        What is a good term that means the same thing as statist, without implying a right or left bias?

        • jdkolassa

          My issue with statist is just that it’s overused. Something you don’t like? That’s statist! It’s very annoying and a turn off. As for somethnig to replace it, I don’t know, but I just think we shouldn’t throw it around so dang much.

          • Will Spencer

            I see the opposite problem more often — the problem where the person I am talking with has never heard the term “statist” and therefore needs it explained to them.

    • Matthew Phillips

      And what are your thoughts on the Troubled Asset Relief Program?

  • Matthew DeCarlo

    Thanks for talking about the Negative Income Tax. Basic income is still a centralized solution, but it’s such an important step in the right direction!

    • jdkolassa

      Hi Matthew, sorry for the late response.

      I do think the NIT is a remarkable improvement over the current system of wage subsidies, minimum wages, and welfare, which is just a jumbled mess. It is not a perfectly libertarian solution, but I’m at the point in my life where I do not care about reaching perfection, I just want to obtain some success.

      I agree with Mike Munger, former Libertarian candidate for NC governor, who said that it isn’t a libertarian destination, but we may well consider it as a libertarian direction.

      • Matthew DeCarlo

        Lol, no apologies necessary.

        Aside from having an efficacious anti-poverty policy, the most exciting thing about a NIT/UBI system for me as a social worker would be having an actual market for my services. Mental health, substance abuse, and health services in general operate under a heavily regulated system of central planning and paternalism. A NIT/UBI system would alleviate some of that by creating price signals in the market and allowing people to take ownership of the services they use. It also provides exit from oppressive institutions associated with the maintenance of welfare.

        The present approach to helping the poor assumes that We know what’s best for you. A system where individuals pay for services based on their preferences assumes that people know what’s best for themselves. The present approach also says to those in the helping professions We know what forms of help are needed and how to structure those services. A more liberalized system empowers individuals to experiment with new models of help in hybrid or unorthodox ways.

        Of course, I’d like to see privatization, decentralization, and entrepreneurship in the provision of social services on the back-end, as well. But I don’t think we’ll see that anytime soon. My profession still believes that when NASW lobbies the government, they are lobbying for the poor and vulnerable–not social workers themselves.

        • jdkolassa

          You know, I dated a social worker in college. She was very gung-ho for using government to fix all of the poor’s ills. And then I kinda thought all social workers were that way.

          Happy to know I was wrong.

          • Matthew DeCarlo

            Nope, you’re right. It’s pretty hopeless. I really didn’t think this through..

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