The Corner

Challenging Liberals on Economic Immobility

When it comes to applying liberté, égalité, fraternité to the economy, modern liberals have always been pretty much fixated on the second member of this trinity. It’s a core concern of the bible of modern American liberalism: John Rawls’s A Theory of Justice (1971). Here a hyper-secularized love of neighbor is subsumed into a concern for equality in the sense of general sameness. Likewise, economic liberty is highly restricted whenever there’s a likely chance that its exercise might produce significant wealth disparities.

So while it’s tempting to ascribe the Obama administration’s more or less naked appeal to class envy in the current electoral cycle as resulting from immediate calculations about how to defeat Mitt Romney, one shouldn’t forget just how central the endless pursuit of ever-greater economic equality is to the modern Left’s very identity. In fact, without it, the modern Left would have little to its agenda other than the promotion of lifestyle libertarianism and other socially destructive ends.

Over at the Washington Post, however, E. J. Dionne recently noted in a July 15 article entitled “A challenge to conservatives” that some conservatives are worried about an apparent decline in upward economic mobility in America. He went on, however, to argue that countries such as Sweden and Germany which have more social democratic economic leanings appear to enjoy greater economic mobility than America. And it won’t surprise anyone to learn that, for the most part, Dionne sees greater government economic intervention as the way to facilitate more economic mobility in America.

#more#Leaving aside the fact that many of the countries cited by Dionne — including Sweden and Germany — actually engaged in significant economic liberalization (including tax cuts and labor-market reforms) during the 2000s (which is one reason why they aren’t among Europe’s Club Med economic basket-cases), declining economic mobility should obviously concern any non-lefist Americans. Part of the heralded American dream is that anyone can achieve considerable upward economic mobility through initiative and hard work. If that ideal ceases to have any traction in reality, then not only is the door opened to those who see greater government intervention as the solution to the problem; part of America’s claim to uniqueness comes into serious question.

The meaning and nature of economic mobility is the subject of entire forests of learned and not-so-learned books and articles. But there are some things that I’ve found liberals are reluctant to entertain in any serious discussion of this subject, not least among which is the causes of economic immobility in America.

On the left, the operating assumption tends to be that one person’s economic advances come at the expense of others’ remaining economic immobile. But is that true? Did Steve Jobs’s long march towards wealth, for example, cause millions of others to remain economically static? Or did it help facilitate a technological revolution that helped millions of others directly and indirectly to rise economically far beyond their initial starting points, not to mention boost the living standards of billions throughout the world?

In fact, it’s long overdue for liberals to consider how all sorts of government programs and interventions in the name of greater economic equality actually contribute to economic immobility. Think of the myriad ways in which the welfare state has helped create severely dysfunctional families in which three generations have subsisted on welfare and thus remain apparently immobile. To be fair, Dionne notes that some liberals have acknowledged the ways in which family breakdown helps reduce people’s ability to climb the economic ladder. Far fewer liberals, however, acknowledge the role played by welfare programs in that process.

There there’s the barriers created by the regulatory state to people who want to become upwardly mobile through being entrepreneurial and creating goods and services that other people value. As a Heritage Foundation report noted in March this year:

During the first three years of the Obama Administration, 106 new major federal regulations added more than $46 billion per year in new costs for Americans. This is almost four times the number—and more than five times the cost—of the major regulations issued by George W. Bush during his first three years. Hundreds more regulations are winding through the rulemaking pipeline as a consequence of the Dodd–Frank financial-regulation law, the Patient Protection and Affordable Care Act, and the Environmental Protection Agency’s global warming crusade, threatening to further weaken an anemic economy and job creation.

The report adds that those hurt by these developments are not just small businesses and entrepreneurs (i.e., prime generators of economic mobility). It also affects those people whose opportunities for work are diminished by the lack of job creation as well as consumers who face higher prices and more-limited product choice. To this, one could add that the same structures create perverse incentives for the already-wealthy to get even closer to government in order to use political power to block the advance of, and sometimes even to try and destroy, their less politically connected but more innovative and risk-taking competitors.

Obviously widespread economic immobility in a society that purports to value economic liberty and opportunity is a problem. But if liberals are seriously worried about this (as opposed to seeing it as just another reason to present government — and themselves — as the solution to most social ills), they might like to ask themselves whether some of their assumptions and policies are among the primary causes. Somehow I doubt that’s going to happen.

— Samuel Gregg is Research Director at the Acton Institute. He has authored several books including On Ordered Liberty, his prize-winning The Commercial Society, Wilhelm Röpke’s Political Economy, and his 2012 forthcoming Becoming Europe: Economic Decline, Culture, and America’s Future.

Samuel Gregg — Mr. Gregg is the research director of the Acton Institute.

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