John Tomasi

John Tomasi wrote Free Market Fairness in an attempt to find common ground between the classic liberals that created the basis of capitalism and the ‘high’ liberals (liberals as we commonly think of them today) that place a higher emphasis on social justice in the form of equality.  While this work is philosophically thick, it substantially clarifies the core differences in our political parties.

The classical liberals such as Adam Smith, Locke and Hayek considered economic liberty on par with the other liberties such as freedom of speech, religion, and assembly.  Equality was considered in terms of opportunity, not outcomes.  The classical liberals believed the drive for economic growth would benefit all classes of society even if it came at the expense of disparity of wealth.

But the distribution of this increased wealth became a sticking point in some thinking and the equality of opportunity led to the realization of some of the thinkers that without basic material wealth and basic assurances such as housing and health that such opportunity was limited.  Some of the classical liberals acknowledged that there was a place for the government to exercise its power to attain some sense of social justice.

The ‘high’ liberals saw economic liberty as a lesser freedom alongside freedom of speech, religion and the individual freedoms. They saw economic liberty in the sense of personal freedom to work where you wish and buy what you wish, but they differed on the freedom ordained to owners of the means of production.  They felt the benefits of the means of production should be more widely shared. This inevitably led to more government control of production.

As a reaction to the reduction in the importance of economic liberty claimed by the ‘high’ liberals, the Libertarians countered that the economic freedoms were the most essential and even more important than the other personal freedoms.  To the Libertarians the economic freedoms were absolute.

Tomasi seeks to blend the ‘thick’ economic liberties of the classical liberals with the aim for social justice of the ‘high’ liberals.  While his arguments may seem absorbed in theoretical niceties, the difficulty will always be bringing reality into the discussion.

While the high liberals claim to seek justice as equality, they often engage policies that fail to achieve their aim. Meanwhile the policies of the classical liberals/ libertarians do not directly aim for social justice,  but their policies have been more successful in bringing wealth and progress to far more people.

Much of our corporate ownership is in the hands of workers in the forms of pensions and 401k. The American experiment began with patricians such as George Washington and  Alexander Hamilton seeking to protect the rights of the majority through virtuous leadership but quickly morphed into a economic democracy as individuals claimed opportunities no longer  reserved for a privileged few no matter how virtuous they were.

This paralleled  the early history of capitalism as merit and financial return trumped class and heredity as a means of distributing capital.  The result was a dynamic growth never before seen.

The intention of social justice through redistribution which infected the American electorate in the Keynesian post Depression era failed to deliver on its promise because it never effectively addressed the human response and political pressure.  If wealth is transferred instead of earned it stills the animal spirit that drives growth and production.

There will likely never be enough wealth to redistribute to give a large group of  citizens prosperity (though a few well connected seem to have benefited handsomely from it): those who receive become mired in a culture of poverty. Bureaucrats and political opportunists begin to see the receivers as a source of political power, and this class of subsidized citizens is fertilized and grown for their political fuel.

This outcome was hidden by a period of economic growth in the United States that was protected from the competition of a world decimated by back to back world wars.  The setback of the global financial collapse has exposed the means of redistribution as being unable to honor the intent.

Giving economic growth priority over fairness and meritless redistribution ends up helping more people than the obsession with fairness.

Tomasi makes a grand statement  about the common ground that can be justified between classical and ‘high’ liberals, a blend of thick economic freedom and social justice. But he falls short in addressing the ‘how’ of how to accomplish the redistribution  without destroying to production potential in all of us.  How much can we take from producers before we kill their willingness to produce? How many citizens can we pay not to produce and how long can we pay them before they lose the willingness to earn?

The economic freedoms of the classical liberals have done more to reduce poverty by accident than the ‘high’ liberals have achieved with the best of intentions.