The Libertarian-Conservative Fusion Is Alive and Well

The evidentiary trail begins with Daniel B. Klein‘s “I Was Wrong, and So Are You” (Atlantic Magazine, December 2011). The article’s teaser proclaims: “A libertarian economist retracts a swipe at the left—after discovering that our political leanings leave us more biased than we think.” Perhaps.

In any event, here is some of what Klein has to say in the Atlantic piece:

Back in June 2010, I published a Wall Street Journal op-ed arguing that the American left was unenlightened, by and large, as to economic matters. Responding to a set of survey questions that tested people’s real-world understanding of basic economic principles, self-identified progressives and liberals did much worse than conservatives and libertarians, I reported. To sharpen the ax, The Journal titled the piece “Are You Smarter Than a Fifth Grader?”—the implication being that people on the left were not….

The Wall Street Journal piece was based on an article that Zeljka Buturovic and I had published in Econ Journal Watch, a journal that I edit….

But one year later, in May 2011, Buturovic and I published a new scholarly article reporting on a new survey. It turned out that I needed to retract the conclusions I’d trumpeted in The Wall Street Journal. The new results invalidated our original result: under the right circumstances, conservatives and libertarians were as likely as anyone on the left to give wrong answers to economic questions….

Writing up these results was, for me, a gloomy task—I expected critics to gloat and point fingers. In May, we published another paper in Econ Journal Watch, saying in the title that the new results “Vitiate Prior Evidence of the Left Being Worse.” More than 30 percent of my libertarian compatriots (and more than 40 percent of conservatives), for instance, disagreed with the statement “A dollar means more to a poor person than it does to a rich person”—c’mon, people!—versus just 4 percent among progressives. Seventy-eight percent of libertarians believed gun-control laws fail to reduce people’s access to guns. Overall, on the nine new items, the respondents on the left did much better than the conservatives and libertarians. Some of the new questions challenge (or falsely reassure) conservative and not libertarian positions, and vice versa. Consistently, the more a statement challenged a group’s position, the worse the group did.

The articles to which Klein refers are “Economic Enlightenment in Relation to College-going, Ideology, and Other Variables: A Zogby Survey of Americans” and “Economic Enlightenment Revisited: New Results Again Find Little Relationship Between Education and Economic Enlightenment but Vitiate Prior Evidence of the Left Being Worse.” (Those links lead to abstracts and links to the full text of each article, in .pdf format.) Both papers explain how answers were scored and how respondents identified their political leanings. The choices offered were progressive, liberal, moderate, conservative, very conservative, and libertarian.

The questions asked are listed below (in italics), with the “unenlightened” (or “incorrect”) answers in parentheses. My comments (in bold) are followed by the correct answers, from an enlightened libertarian perspective.

1. Restrictions on housing development make housing less affordable. (Unenlightened: Disagree)

Disagreement suggests a refusal to acknowledge reality and/or a preference for arrogantly imposing one’s aesthetic views on others. The enlightened answer is “agree.”

2. Mandatory licensing of professional services increases the prices of those services. (Unenlightened: Disagree)

Disagreement suggests a refusal to acknowledge reality and/or a strong streak of paternalistic arrogance. The enlightened answer is “agree.”

3. Overall, the standard of living is better today than it was 30 years ago. (Unenlightened: Disagree)

Disagreement suggests a refusal to acknowledge reality or indoctrination in the standard leftist view that most people are doing worse than they used to, which (in the left-wing view) justifies redistribution of income. The enlightened answer is “agree.”

4. Rent-control laws lead to housing shortages. (Unenlightened: Disagree)

Disagreement suggests a refusal to acknowledge reality and/or a value judgment that lower rents are preferable to more and better housing. The enlightened answer is “agree.”

5. A company that has the largest market share is a monopoly.  (Unenlightened: Agree)

Agreement suggests a presumption that “largest market share” means dominance of a market, and is grounds for government action. The enlightened answer is “disagree.”

6. Third-world workers working overseas for American companies are being exploited. (Unenlightened: Agree)

Agreement suggests a value judgement that third-world workers would be better off doing whatever it is they did before the arrival of American companies, even though they probably choose to work for American companies because it makes them better off. Agreement is driven by the knee-jerk left-wing disposition to favor “victims.” The unenlightened answer is “agree.”

7. Free trade leads to unemployment. (Unenlightened: Agree)

Free trade can lead to unemployment in certain industries and areas, at least temporarily, but not in the long run (unless welfare programs discourage job-seeking and relocation). And free trade benefits American consumers. Agreement indicates an unwillingness to concede that change is always in the air, and that the effects of international trade are no different in kind than the effects of changes in patterns of domestic trade. Agreement is driven by the knee-jerk left-wing disposition to favor “victims.” The enlightened answer is “disagree.”

8. Minimum wage laws raise unemployment. (Unenlightened: Disagree)

Disagreement suggests a refusal to acknowledge reality and/or a value judgment that higher wages for some offsets the loss of employment by others. (This is a typically arrogant left-wing view of the world, in keeping with left-wing positions on most of the preceding questions.) The unenlightened answer is “disagree.”

9. A dollar means more to a poor person than it does to a rich person. (Unenlightened: Disagree)

This, the first of the “new” questions is truly ambiguous and requires a judgment that no one is entitled to make. Does a dollar “mean more” in relative or absolute terms? And how can anyone know what a dollar “means” to someone else? As it happens, the marginal utility of a dollar need not decline. An additional dollar represents an opportunity to buy something new and different or add to one’s store of wealth. In the latter case, more is preferable to less over a very large range of additional dollars. The enlightened answer is “disagree.”

10. Making abortion illegal would increase the number of black-market abortions. (Unenlightened: Disagree)

This is almost certainly a true statement. Those who disagree with it make two implicit judgments: (1) Abortion is a moral abomination because it ends an innocent life and (2) the net effect of making abortion illegal would be to reduce the number of abortions. Disagreement is therefore rational. Disagreement signals a superior moral stance; the enlightened answer is “disagree.”

11. Legalizing drugs would give more wealth and power to street gangs and organized crime. (Unenlightened: Agree)

I must quote myself:

The legalization of drugs will make them affordable only by those persons who can afford to pay the inevitably inflated prices that will result from government licensing of vendors, restrictions on the number and location of vendors, and restrictions on the amount of drugs an individual may purchase in a given period. (Regulation and paternalism go hand in hand.)….

…[G]overnment restrictions would open the door to a black market, operated by the usual suspects. In the meantime, drug-users would continue to expose themselves to the same inhibition-loosing effects, and many of them would still resort to crime to underwrite their drug intake.

Legalization is a paper panacea. Agreement with the proposition indicates a healthy grasp of reality. The enlightened answer (with respect to the real issue) is “agree.”

12. Drug prohibition fails to reduce people’s access to drugs. (Unenlightened: Agree)

Those who agree with this statement probably make two implicit judgments: (1) Drug use has untoward social consequences (e.g., impoverishment of families and crime) and (2) the net effect of making it illegal would be to reduce the incidence of those consequences. Opposition to drug use is therefore rational. The unenlightened answer (with respect to the real issue) is “disagree.”

13. Gun-control laws fail to reduce people’s access to guns. (Unenlightened: Agree)

This is almost certainly a false statement. But those who agree with it are making the rational judgment that gun-control laws of the strict (confiscatory) kind favored by the left will do little or nothing to disarm criminals, while leaving law-abiding citizens without guns. The enlightened answer (with respect to the real issue) is “agree.”

14. By participating in the marketplace in the United States, immigrants reduce the economic well-being of American citizens. (Unenlightened: Agree)

“Immigrants” these days are mainly illegal ones. Leftists don’t care about that because anything that sticks it to “the man” is good, in their adolescent-rebellion worldview. Nor do they care much about the cost of subsidizing the housing, health-care, and education of illegal immigrants — and those costs probably nullify the gains from lower labor costs that accrue to well-to-do leftists who employ nannies, yard men, and other types of unskilled labor. The enlightened answer is “agree.”

15. When a country goes to war its citizens experience an improvement in economic well-being. (Unenlightened: Agree)

Agreement with this statement reflects  the myth that World War II rescued America from the Great Depression. It did, but not because the war brought with it full employment of labor; the war also brought widespread rationing, so that resources could be diverted to the war effort. The war ended the Great Depression indirectly, in two, related ways. There was a “saving glut,” which generated demand for products and services once the war had ended. And businesses were ready and willing to respond to that demand because the war and FDR’s death brought a (temporary) end to the anti-business, anti-growth policies of the New Deal. The enlightened answer is “disagree” because wars consume resources and usually don’t have the  after-effects of WWII.

16. When two people complete a voluntary transaction, they both necessarily come away better off. (Unenlightened: Agree)

Both parties to a voluntary transaction believe that it will make them better off, and they will be right in most cases. The “correct” answer (“disagree”) hinges on “necessarily” and plays into the leftist view of voluntary transactions between individuals and businesses, where businesses are seen (by leftists) as exploiters. “Agree” is the correct answer with respect to the expectations and motives that drive voluntary exchange; “disagree” is favored by those who wish to discredit voluntary exchange and replace it with paternalistic regulation. The enlightened answer is “agree.”

17. When two people complete a voluntary transaction, it is necessarily the case that everyone else is unaffected by their transaction (Unenlightened: Agree)

Here, again, we find the qualifier “necessarily.” As with question 16, it serves to deflect attention from the normal course of events to the outliers that (in the minds of leftists) justify government action. For if anyone is affected (or even offended) in the slightest by a voluntary transaction, the “externality” thus created is grounds from some kind of government action, in the left-wing view of the world. The importance and negative effects of externalities are vastly overrated. The enlightened answer is “agree.”

My interpretations are deliberately provocative. But my point is that, the 17-question survey can be seen as a libertarian Rorschach test. An enlightened libertarian would see through the questions, as stated, to the deeper issues and give what I call enlightened answers.

I used the enlightened answers to compare the positions of self-described leftists, conservatives, and libertarians with each other and with the positions that an enlightened libertarian would take. The next two paragraphs describe my method.

In tables 1 and 2 of “Economic Enlightenment Revisited,” Buturovic and Klein (B & V) give, for each question, the percentage of respondents offering answers that are “incorrect” (in their view), overall and by ideological category. I used the values given in tables 1 and 2 to obtain weighted percentages of “incorrect” answers for “leftist” participants, that is, persons who self-identified as progressive and liberal. Similarly, I obtained weighted percentages of “incorrect” for “conservative” participants, that is, persons who self-identified as conservative and very conservative. I took the percentages for self-identified libertarians straight from the tables.

I then had to account for the fact that an enlightened libertarian would have answered eight questions (9, 10, 11, 12, 13, 14, 16, and 17) “incorrectly,” according to B & V. For example, 30.5 percent of self-described libertarians answered question 9 “incorrectly.” But B & V’s “incorrect” answer is, in fact, the correct one from the standpoint of an enlightened libertarian; therefore, 100 – 30.5 = 69.5 percent of libertarians answered question 9 incorrectly. I made similar adjustments for all eight of the wrongly graded questions, and did so for leftists and conservatives as well as libertarians.

Without further ado, here is a question-by-question comparison of the three ideological categories with respect to the answers that an enlightened libertarian would give:

This leads to two observations:

1. Persons responding to the survey who self-describe as leftists did better than self-described conservatives and libertarians on only two questions: 12 and 15. To put it another way, libertarians and conservatives generally come closer than leftists to enlightened libertarian positions.

2. More significantly, it is obvious that self-described libertarians and conservatives are closely aligned on 14 of the 17 questions. Further, that would be true even if I were to accept B & V’s version of the “correct” answers.

Klein’s retraction is misguided. Many of the answers that he considers correct are, in fact, consistent with the wrong-headed views of extreme libertarians — a vocal but unrepresentative minority of libertarians.

The survey results evidently reflect the views of sensible libertarians, who understand that true libertarianism is found in traditionalist conservatism. The closeness of their positions to those of conservatives is heartening evidence of a de facto libertarian-conservative fusion.