Rush Limbaugh and Corvée Economics

I was expecting to be pretty vexed by Rush Limbaugh’s remarks about our book. But I’m not, strangely! Rush makes some solid points.

And what these people have done is they have basically accepted the premises of the left. There’s a new book out by a couple young conservatives. I don’t remember their names.

But they have the prescription, they say, for salvaging and saving the Republican Party, and their book is praised today by Mr. Brooks in the New York Times. Let me read to you what Mr. Brooks wrote about these two young, bright-eyed and bushy-tailed Republicans who have an idea to save the party. They open the book with a working-class view of recent American history.

Actually, I don’t think our view is a working-class view — it is a conservative interpretation of recent history that focuses on the working-class. There’s a difference, and not necessarily one that cuts in our favor. Have Ross and I accepted the premises of the left? I’d say we’re in agreement with the left on a few things, e.g., working class voters are not happy with the state of the economy and that the Bush tax cuts were poorly designed to ensure broad-based prosperity. The first is less an agreement with the left so much as an observation based on extensive polling data, and the second is based on evidence drawn from social scientists across the political spectrum.

Like Oprah, Rush is an important figure in our culture who is very busy, so I don’t expect him to fully engage our argument. And I think he lands a few blows. Anyone who believes that the New Deal is the answer to the Republican predicament really is nuts. Of course, that’s not us. But it is a powerful zinger nonetheless. Rush also notes,

We’ve been doing it for seven years! We’ve been growing government. We’ve been trying to use government to interact with people’s lives, “a powerful and engaged executive,” and we have been trying to say, “We’re not mean, and we’re not cruel, and we love you,” and we’ve been trying to give people as much of what government —

This is dead on. We have been growing government. But to what end? Well, there is the sharp spike in defense spending, which I think is pretty understandable. On the domestic front, we’ve paved the way to a reformed Medicare system, which isn’t a terrible idea, in my view. But it’s true that we haven’t accomplished a lot of core conservative goals.

Here is my operating premise. The power of government goes beyond government as a slice of GDP. Regulation extends government control, even when — especially when — you’re talking about unfunded mandates, command-and-control regulation that conscripts private citizens into doing work that government deems valuable. So what if we eliminated all government spending, but we conscripted, say, half of Americans into staffing government bureaucracies without pay for half of the year. Does that sound like a great idea? Well, no. You’re not really eliminating government control of the economy — you’re performing an accounting trick and violating the basic right of individuals to live the kind of lives they want to lead. The French called this a corvée.

When I advocate hiking government spending, it is because I want to eliminate corvées. That is, I want to reduce government control of the economy. Over the long term, this will mean that government spending as a slice of GDP will also shrink.

You think all Americans who work hard and play by the rules should earn a living wage? Great. But why should you make small business owners and consumers of their services take the hit if this is designed to get America moving again? Wage subsidies are — for all the reasons Milton Friedman (New Deal socialist) and Edmund Phelps (Red menace) have explained — are better than minimum wage laws.

Similarly, employers who offer healthcare benefits are increasingly at a disadvantage to employers who don’t. That suggests the system is broken. It needs to be fixed. The way to fix it isn’t to create more mandates that “solve” the problem by declaring the problem solved. It is to look at the immense system of corporate welfare that undergirds the healthcare system as we know it, and to see to it that public spending goes to help those who need it most — people with pre-existing conditions, families hit with medical emergencies, etc.

The important thing is to target the hidden subsidies that make up the hidden welfare state. Yes, we absolutely need to cut wasteful spending. But we also want to increase freedom. That means freeing our labor markets, loosening regulations, tilting government policies in favor of giving families more flexibility rather than less. To do that, though, we have to make what has been invisible — a social policy built on corvées that are tying the hands of American entrepreneurs — and make it visible. That will cause short-term expenditure increases. That has not been the policy of the Bush White House or the Clinton White House, which were only too happy to use budgetary flim-flam to hide the true cost of their goals. (Remember when we thought we could fight the Iraq War on the cheap?)

One of my priorities is finding more efficiencies in government — learning from countries like New Zealand, where the public sector workforce has shrunk dramatically as ministries have been reformed along private-sector lines. It isn’t something Ross and I talk about in Grand New Party, but you’ll be hearing more from me on this theme as I turn to a new round of policy-oriented work. Suffice to say, there are a lot of encouraging developments on the horizon regarding public-sector productivity. I’m going to try to finish two things tonight. Oh man.