RALEIGH – If you’re not a North Carolina political junkie or state policy nerd, the war of words in Raleigh may seem like little more than political posturing.
Gov. Beverly Perdue argues that the Republican plan for balancing the state budget now working its way through the state legislature would cost thousands of North Carolinians their jobs. Republicans respond that Gov. Perdue’s tax plan would cost thousands of North Carolinians their jobs.
Perdue and her allies further argue that because Republicans are proposing cuts in education budgets larger than the ones Democrats previously endorsed, and Republicans support school-choice initiatives such as charter-school expansion and tuition tax credits that strengthen competitors to district-run government schools, the GOP is out to harm public education.
Republicans argue that because Democrats want to stick with failed policies that deny parents control over their children’s schooling, obstruct competition among educational alternatives, and yield few benefits for the tax dollars invested, the Democratic Party is the one harming public education – defined as a public policy goal, not a particular system of monopoly providers.
If you look past the to-and-fro of partisan politics, you will see that what appears at first glance to be disagreements about statistics and programs are really manifestation of a fundamental, philosophical disagreement about what government is and what it should do.
Hoover Institution economist Thomas Sowell once wrote a fascinating book entitled A Conflict of Visions: Ideological Origins of Political Struggles. While Sowell has written deeply about a wide variety of subjects, from education reform to the history of Africa, A Conflict of Visions was one of his first attempts at constructing a sort of unified field theory of political economy.
In the book, Sowell contrasted what he called the “unconstrained vision” and the “constrained vision.” He argued that those who exhibit the unconstrained vision, essentially the modern-day Left, recognize few limits on the legitimacy and effectiveness of government power because they fail to recognize the existence of basic constraints such as human nature and resource scarcity.
Those with a constrained vision, on the other hand, don’t at all deny the possibility and desirability of reform and progress. But they recognize that successful reform and meaningful progress require a recognition of, and accommodation to, certain realities. These realities include the inescapable fact that human nature is not malleable, that resources are not infinite, and that productivity gains – producing more or better goods and services for each unit of resources consumed – are the mainspring of human progress, not crude efforts at confiscating and redistributing what is already being produced.
While I think Sowell’s distinction has a great deal of merit, I’m going to borrow his terminology but describe the conflict of visions at the heart of North Carolina politics in somewhat more concrete terms. I see it as a conflict about what kind of state each side envisions.
The governor and her allies in government, interest groups, activist groups, and the media believe in what is properly called social democracy. Unlike socialism, which in its purest form requires collective ownership of all means of production, a social democratic state assumes the continued existence of a large private sector producing most goods and services.
However, social democrats believe that government should play a major role in the private sector, not just as a regulator to protect public health and safety but also as an overseer of labor-management relations (via powerful labor unions protected by government power), an investor in “strategic” industries (via government grants, loans, and tax incentives), and a central planner (via government rules regarding land use, housing, finance, transportation, and many other areas).
Furthermore, social democrats believe that there are major sectors of the economy – such as education and health care – in which government should be even more directly involved, as a provider. They envision an education system, for example, in which the vast majority of students – 90 percent or more – attend government schools, colleges, and universities that are planned and managed by central authorities. For health care, they envision a system in which government or government-shielded monopolies dominate the financing of medical services, and in which a mix of government and private medical providers operate under strict regulation.
Conservative leaders and members of the Republican legislature have a different vision. For the purposes of this discussion, I’ll call it market liberalism (partly because I am on a long-term mission to reclaim the term “liberal” from the leftists who corrupted it and partly because I enjoy being cheeky).
Just as social democracy is not socialism, market liberalism is not libertarianism. Like it or not, there is no significant political constituency for the creation of a pure libertarian state that does nothing more than police crime, adjudicate disputes, and protect individual rights from encroachment by foreign invaders, domestic ruffians, polluters, or con men.
Rather, market liberals accept a state role – though not necessarily a federal role – in education, health care, transportation, and public assistance. But their justification for that role is far different from the justification offered by social democrats, as is their model for carrying out the state’s role.
To put it simply, market liberals see state action here as inevitable but problematic. Social democrats see it as desirable and liberating. Market liberals would prefer to let private initiative, voluntary exchange, and market competition occur without impediment or subsidy. But they recognize the reality that while many people will make good decisions, some will make poor ones. They further recognize the lessons of history – that the consequences of these poor choices will not be limited to those who make them.
Some individuals will fail to use private savings or insurance to prepare themselves for the risk of losing a job, experiencing a costly or debilitating injury or illness, or retiring with inadequate assets or family support. Some people will have a hard time dealing with serious addictions or mental illnesses, resulting in perpetual poverty, ill health, or criminal records. Some children who, for whatever reason, do not receive a good education will grow up to be uninformed voters, unproductive workers, or perpetual dependents.
Many of these individuals, and those who claim to speak on their behalf, will use to political process to seek taxpayer assistance. History shows that, like it or not, they will get it, at least to some degree, because of a combination of special-interest politics and an understandable preference among most voters for public order.
Thus, taxpayers will be on the hook one way or the other – either at the front end, in services, or at the back end, in welfare programs and government institutions such as jails, prisons, and psychiatric hospitals. So it may well be in the interest of taxpayers, and in the interest of keeping government’s size and cost as limited as possible, for states to play some role in these sectors to reduce either the likelihood or consequences of poor decisions.
In education, market liberals envision a continuum of options. District-run government schools will continue to exist, and probably continue to enroll a majority of students, as parents opt for familiarity and for the predictability of sending their children to schools in or near their neighborhoods (assuming that school districts assign students on the basis of proximity and preference rather than social or political considerations).
Under a market liberal vision, however, independent schools of choice would play a much larger role in education than they do today. These would include charter schools, independent but funded almost entirely by tax dollars, as well as private or home schools, independent and funded mostly by private dollars but with all families receiving tax deductions for the money they invest in their children’s education and some families receiving additional tax credits or scholarships under certain circumstances (because of poverty or disability, for example).
In health care, market liberals envision a competitive private market for both financing and delivering medical services. The state’s role would be limited to ensuring a basic safety net, through premium support for private plans and a pared down Medicaid program, and protecting consumers against fraud. All efforts to limit competition, ration care, or plan the future health care industry would be abandoned.
I’m painting these conflicting visions, of the social democrat state and the market liberal state, with a broad brush. Most people, including most politicians, are not rigidly consistent in their political philosophies. There are disagreements within each camp, and differences in emphasis.
But in general, I think I am accurately portraying the ideological divide. Our state’s social democrats, whatever they may call themselves, generally believe that North Carolina would benefit from higher taxes to fund a larger government that plays an even larger role in education, health care, and other sectors. Social democrats believe that their policies would not only do some good in the short run but in the long run would promote social equality, reduce income inequality, and improve the state’s economic competiveness.
Our state’s market liberals, whatever they may call themselves, believe that North Carolina would benefit from lower taxes and a smaller government, letting private initiative, voluntary exchange, and market competition play a larger role in education, health care, and other sectors. Market liberals believe that their policies would not only do some good in the short run but in the long run would promote personal responsibility, reduce the unintended consequences of government intervention, and improve the state’s economic competiveness.
Are you a social democrat, a market liberal, or something else? You’ll never make heads or tails of North Carolina’s current political controversies unless you first answer that question for yourself.
Hood is president of the John Locke Foundation.