The Self-Interested Liberal and Trickle-Up Economics

Too often liberals base their policy arguments in social justice. We should give poor kids a chance, we should take care of the old and sick, we should ensure that workers are treated fairly by their employers. While these are noble sentiments, people differ in their notions of justice, and about how much one should sacrifice for other people. Arguments based in social justice require that others subscribe to a similar set of moral principles, and as a consequence, they are often unpersuasive.

But liberal positions neednt be based on altruism, nor justified by “the greatest good for the greatest number.” The reason we should gladly pay more in taxes so poor kids have better schools, for example, is because the sum total of such investments will substantially and directly improve our own lives. The reason a job should come with mandatory paid maternity leave, vacation time and workman’s comp, is because more people will want to work, and in the aggregate that will raise our own income. Subsidizing healthcare and education for the poor isnt about sacrifice – it’s about self-interest. You might call it “trickle-up” economics.

All conservative economic policies are based on the myth that small government is the recipe for economic success. Despite their fairy tales, our humble planet has yet to see a rich country in the absence of a large government directing investment into sectors that the markets neglect (health, education and insurance). Back in 1900, when the US government was one-quarter its present size, the US was as poor as present-day Paraguay. The US government was still small in 1928, when US per capita GDP was about the same as present-day Botswana. By 1932, the Great Depression had brought the US down to the level of present-day Turkmenistan.

Of course these are unfair comparisons. Present-day Paraguay is a much nicer place to live than 1900 America:  life expectancy in Paraguay is 25 years longer, infant mortality is one-fifth, and literacy is much higher too. The best things ever got in the small-government pre-war era was pretty crappy. The divide – between where we were then and where we are now – was only ever bridged with a big government. The notion that it could have happened otherwise – well hey, anything’s possible. But in all of human history, it never has.

Should you overhear a conservative waxing nostalgic over pre-New Deal America, you might ask his feelings about the 15 recessions and 3 depressions that occurred between 1865 and 1930. The answer to the question, “When was the Golden Age of Capitalism?” is “You’re livin’ it now, baby!” Before 1928 – when US government spending was less than 10% of GDP – 50 year growth rates in per capita GDP were generally under 150%. Since World War II – with a government three to four times larger – 50 year growth rates have been greater than 175%, and frequently north of 200%.

Or just ask a conservative: if small government is so awesome, why isn’t the world teeming with small-government juggernauts? Why isn’t there JUST ONE such country? Why is it that every rich country on Earth has a large government – and only became rich with that government in place? Conservative belief in the wonders of small government is simply that: naked belief, unsubstantiated by a scintilla of evidence, much less a single case history.

And so when liberals advocate for generous social insurance, universal public pre-K and single-payer healthcare, it isnt out of kindness – it’s because the long-term consequence of liberal policies have made the fortunate residents of western democracies the healthiest and wealthiest people the world has ever seen.


PS: It’s Spring Break at the Field Guide – and our staff (cough) has been turned loose for fun and frolic! While reserving the right to take a few gratuitous swipes next week, all-out two-fisted conservative-thrashing activities will resume on Monday, April 21st.



US in 1900:




  1. Pingback: Inequality’s Cure is Good for All | Carlton Thurman's Liberal Field Guide

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