If We All Built It, Who Are We and What Is It?

The Republican convention contained a lot of claims, but the claims that were true weren’t substantive, and the claims that were substantive weren’t true. Those hungry for a serious piece of conservative argument should turn to Reihan Salam’s post on what the parties really think, and don’t always say, about public goods and whether the “you didn’t build that” argument really captures the essence of public goods.

It’s a great post and you should, as they say, read the whole thing. But in summary, Salam makes three main points:

1. If the government’s main business is providing public goods, and the point of taxes is to pay for them, then we should all probably pay a little more for them (and will need to, if the present level of government services is to continue). But political pressures have led Democrats to call instead for higher taxes only on the wealthy. This makes taxes look less like a civic virtue good society-wide household management and more like envy:

Higher taxes can be seen, in this frame, as a way to cut down tall poppies. Note that the valence would be very different if we all, or rather if all of us with jobs, should pay higher taxes to sustain the commonwealth, and high-earners should pay somewhat more than the rest of us. The tone would be very different.

This is one reason why the “You Didn’t Build That” theme resonates: it is a rebuke to the perceived punitive tone of the president’s narrow case for taxes.

2. Smart conservatism is not atomistic but has a broader view of what counts as the social preconditions for prosperity than liberalism does.

2a. It stresses the crucial role of social conventions, practices, and norms

2b. It thinks that state action often undermines those norms—is, we might say, “antisocial” rather than pro-social:

Conservatives and libertarians tend to understand America’s public framework as something broader than the state. Rather they see it as as a system of rules, institutions, and norms. One concern is that the expansion of the state has compromised the effectiveness of our institutions, undermined important norms, and created a “pebbles in the stream” dynamic in which the accretion of rules and regulation has contributed to stagnation.

[That argument actually mixes in 2c: government regulations undermine not only civil society but the market, presumably not the same thing though Hegel glossed it as such.]

3. Most of what government does has little to do with public goods anyway but involves transfers and insurance schemes that can actually crowd out public investment (here, and throughout, Salan cites Matt Yglesias, and seems tacitly to acknowledge Yglesias’ point that the Romney/Ryan economics would slash investment at least as much as it would slash transfers).

Of course, Salam’s points are so reasonable that no contemporary Republican politician (and, he’s right, few Democratic ones) would dare make them. But they aren’t the final word. Going point by point:

On (1) Salam is basically completely right on the policy—though I’d gloss the political implications quite differently. While we should rein in health care costs (which will mean somewhat less care, many fewer hospital stays, and a reduction in medical specialists’ demand for second homes), and should cut military spending steadily over time, maintaining even the government that’s left at the size it needs to be will require slightly higher tax payments from everyone. The liberal argument should be, but hasn’t been, that in a growing society whose prosperity is promoted by public goods, we won’t notice the slight increase. And the conservative argument should be, but hasn’t been, that they will be willing to make a deal for slightly higher taxes provided that the increase doesn’t single out only the wealthy and provided that spending really is redirected from wasteful spending on health care for the elderly to innovative (and expensive) education for the poor, infrastructure, and other areas where intelligent conservatives must know that our government needs to spend more. I can imagine moderate progressives making something like the responsible argument within a few years (Clinton wasn’t far off from it). On the other side, though, my vision of a responsible conservative argument carrying the day has large numbers of crossbred avian porcines in it.

On (2), conservatives need to realize that what separates them from liberals is (2b), not (2a). Of course social conventions and norms are necessary for a peaceful, prosperous, and free society. In such a society people need to mostly tell the truth, work hard, obey the law, not steal and cheat, pay their taxes (even when the expected cost of doing so is higher than the risk of audit), trust government bureaucrats, be trusted by government bureaucrats, be able to work with people somewhat different from themselves even if they don’t understand them, put their children’s welfare over their own, and stick with their spouses (or civil partners) even when doing so isn’t easy. This is a center-left list: true radicals would no doubt add a sense of egalitarian solidarity and a harder-edged celebration of diversity and leave out the pro-family stuff; conservatives would tend to leave out (yes?) the part about trusting those from unfamiliar subcultures and add something about how we all need to attend church a lot (which liberals would doubt on empirical grounds: Europeans don’t do that and society works fine). And of course the list is subject to revision. But in principle there’s no liberal I know of, and few thoughtful radicals, who doubt the role of norms.

It’s (2b) we disagree with. Conservatives often say that government action undercuts civil society, but where’s the evidence? Have rates of church-going declined under Obama (and do they in general stagnate under liberalism)? Do voluntary associations demonstrably lose membership, influence, or status when the government grows and gain it back when it shrinks? Why hasn’t welfare reform, which ended long-term government income support, strengthened marriage (instead we see that marriage rates went down, and childbirth out of wedlock went up, in the years after it was passed)? And if the issue is wider social norms, not the membership and status of conservatives’ favored formal institutions: are people more moral where there’s less government? Do they lie less, cheat less, pay more of their taxes, drive less recklessly, treat their children better? Do you feel unsafe in Stockholm? Do you think marriages are more stable, and children better taken care of, in Mississippi than in Massachusetts?

As for (2c): of course it must be true on some level that regulations can be excessive and that at some point their cost outweighs their benefit. But this has nothing to do with the argument about civil society and social norms—and nothing, actually, to do with taxation. The argument is uttered in the same breath partly for strategic reasons—the old “fusionism” between libertarians and conservatives requires that the difference between the (libertarian) market and (conservative) civil society be fudged, even when they’re no reason to expect that the mechanisms that touch one will touch the other—and partly because after years of this strategy it’s become common for conservatives to believe there is in fact little difference. (Ideologies always do this. Liberals also imagine that there’s some logical reason that connects being for gay marriage to being against the Iraq war. Not so: this is what Philip Converse called ideological “issue constraint,” not logic.)

Finally, (3). One one level I’m sympathetic to the argument that government should engage in less middle-class insurance and more provision of the classic public goods (infrastructure, education, to some extent defense). I read an article about a year ago, which I can’t find now, claiming that Australia has relatively small government but high equality by doing something like this: transfers for the poor, small government for the middle class (having lots of resources in the ground can’t hurt either). But leaving aside the strong political reasons for both parties to resist a policy shift that would take from current, well-organized groups to benefit a speculative future public as a whole, there’s actually a strong case to be made for government insurance being a public good, though one that Smith didn’t see.

I’ll want good health insurance when I’m old and no longer working. By then, I’ll be a bad health risk. Because I know that now, I could try to pay up front. But even leaving aside that people are systematically short-sighted, how would I buy private health insurance for forty years in the future that I could rely on? Can I trust a private insurance company to be around in forty years? An investment fund whose gains would offset my increase in health risks? The case is similar if I want to save for old age. If I want a return, and a hedge on inflation, superior to leaving dollars under a mattress or in a safe-deposit box, I must turn to either a bank or an investment fund. But banks can fail, and a nest egg large enough to live on interest at the same level that Social Security provides would exceed the cap on deposit insurance. Stock and bond funds, which provide higher returns and in the former case better hedges, aren’t insured at all. If I pre-purchase an annuity, the provider of the annuity might well go out of business by the time I need it.

Thanks to the (both radical and conservative) genius of our constitutional designers, and the two-hundred-plus years of living under the institutions they designed, which have cemented those institutions by prescription (or if you don’t like the term, mental habit), government is by far the most durable entity around. It’s the only one (except maybe the Catholic Church, and possibly the Mormon) that can be trusted to last for several generations into the future. For reasons that conservatives are very good at stressing, the market excels at creative destruction: at allowing poorly-managed firms to go bust. But one can’t have it both ways. If the market is dynamic, only the government will be constant. That’s why we run our long-term insurance through it, and always will.

[Cross-posted at The Monkey Cage]

Andrew Sabl

Andrew Sabl is a Visiting Professor in the Program on Ethics, Politics, and Economics and in Political Science at Yale University.