The New York City Council recently passed a bill that restricts
banks’ ability to foreclose on delinquent mortgages and forces them to expand
lending to high risk borrowers. The New York Post correctly highlighted the
economic destructiveness of these bills, noting that these very types of
policies helped set the stage for the housing meltdown.
A couple of other bills would force employers to pay above
market wages in some occupations. Here again, the Post correctly noted that this
bill would kill jobs in the city.
The Post blasted the council members, saying they “by and
large are economic illiterates…, while those few who do get it
don’t care.”
I left the following brief comments:
Yes, the hacks that vote
for this stuff are economic illiterates. But economics is not their concern.
They believe what they’re doing is moral, because some people NEED higher wages,
and some people NEED homes. They are altruists, and altruism holds that need is
the moral standard, and all else—justice, contracts, the right of others to freely
act on their own rational judgment--must be subordinated to it.
But this is morally
perverse. The fact is, these bills are not just economically destructive, but IMMORAL,
because they force bankers and employers to act against their own
self-interest. The economically practical is also the moral.
If the pro-free market capitalist Right is bewildered about why it has such a hard time gaining traction despite overwhelming historical and theoretical evidence of the correctness of its cause, it is because it doesn't recognize that economic issues are not just about economics.
Anti-capitalists don’t care if overall prosperity is
diminished or if the most ambitious and productive are hurt by their policies.
To them, it’s all about “fairness,” and egalitarian “equality” at all costs is
what’s “fair.”
Of course, the most productive and ambitious provide the
opportunities that can lift everyone, so economic ignorance plays a role. But
altruism clouds the facts, coloring the moral views of free markets, which are
seen—correctly—as dominated by the pursuit of self-interest. This view leads
many to brush aside the facts as morally irrelevant, which leads to bad
economic policy that is seen as morally right.
To begin to turn the tide, the free market Right must promote
its viewpoint as right. And what’s right is self-interest—or more
precisely, rational self-interest.
Spreading prosperity and opportunities for the poor and the young are not
primary validations of free markets. They are consequences of the moral
rightness of free markets.
[Afterword: There are deeper philosophical issues that
underpin morality that must be grasped by the Right, however. For a good
introduction into this broader field, I recommend a 42 minute lecture by Yaron
Brook titled “Why Bad Economics Won’t Go Away,”
and the 33 minute Q&A that follows.]
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