RALEIGH – If you seek to distinguish the political Right from the political Left in America, there’s no shortage of ways to do it.
For example, some argue that what separates the conservative coalition (of libertarians, traditionalists, and hawks) from the liberal coalition is a disagreement about the proper definition of individual liberty and the proper scope of governmental power.
Some argue that the distinction reflects disagreement about the nature of social problems – whether they are simple and amenable to government solutions or complicated and likely to respond to government action with unintended consequences.
Some argue that conservatives and liberals fundamentally disagree about the reality of human nature itself – the former accepting it as an inevitable constraint and the latter seeking to change it.
If you followed the links, you can see that some of us make all of these arguments.
Here’s another one: the Right and the Left disagree about the value of aggregates.
No, I don’t mean that there is a political debate about the usefulness of crushed rock. In the social sciences, particularly in economics, the term aggregate is used to describe an accumulation of data or decisions.
In his (in)famous work on macroeconomics, for example, John Maynard Keynes devoted much of his attention to aggregate demand, the total demand for goods and services in the economy. He concluded that voluntary transactions in the marketplace would frequently yield an aggregate demand insufficient to sustain economic production, thus leading to unemployment. At such times, government would need to intervene through fiscal policy to stimulate aggregate demand and thus forestall or end recessions.
Early on, some of Keynes’ most astute critics noticed that all his twaddle about aggregate demand ignored the basic questions that other economists had long considered important. Demand for what? Demanded by whom? Demanded when? Such economists considered the details of supply and demand interactions to be important. Keynes evidently did not, and his followers relegated these questions to the category of microeconomics – not relevant when discussing the performance of a national or international economy.
Free-market economists disagree. They see boom-and-bust cycles not as relatively simple phenomena reflecting changes in aggregate demand but as complex phenomena that reflect changes in consumer preferences and thus the emergence of mismatches between what producers offer for sale and what consumers want to buy.
Recessions, in this view, are periods of adjustment when businesses stop making what people no longer want, sell off inventories, close low-performing locations, retool and retrain, and integrate or disintegrate business organizations in response to new realities.
To the extent that government creates artificial demand for goods and services during boom years, through such policies as easy money or differential taxation, the ensuing recessions are longer and deeper as these distortions get worked out of the system. (That’s what happening now in the markets for housing and financial services.)
The Left’s fascination with aggregate thinking isn’t limited to macroeconomic policy, however. How many times have you seen liberal politicians or activists complain about impending cuts to “education” or “human services”? How many times have you see them argue for more spending on “public investments”?
These arguments are full of the same question-dodging problems. What matter isn’t so much how much is spent on “education,” for instance, but how the money is spent in particular. Paying excellent teachers to take on difficult assignments may well be a good investment. Spending more money on school buildings, administrators, or hiring more teachers to reduce class size in high schools are unlikely to be good investments.
The particulars matter. They help to explain why there is no consistent relationship between spending and outcomes, not just in education but in health care and other fields.
Many of us on the Right want to see the details. We support increased spending when it would help improve core government services. The reason we favor smaller government in general is that much of what spending lobbies propose only reflects their personal interests or ideological proclivities.
Empirical data, history, and the inevitabilities of human nature teach us to be skeptical – in the aggregate.
Hood is president of the John Locke Foundation.