Liberalism, statism and redistribution


So out of the various possibilities of combinations of self-aggrandising and power hungry politicians we can actually have now that the people have spoken what is it that we actually do want? What's that balance of liberalism, statism and redistribution that we should be aiming for?

You'll not be surprised to find someone at a classically liberal think tank arguing for liberalism but those who argue for redistribution should also be: it should be the statism that we get rid of. The reason being that good old fashioned economic liberalism is a necessary requirement before you can have effective redistribution. As Scott Sumner points out here:

Then I decided to measure neoliberalism by using the (2008) Heritage Institute’s Index of Economic Freedom minus the two “size of government” components (taxes and spending.) If one simply averaged the other eight components, Denmark edged ahead of Hong Kong as the surprising winner of “most free market economy on earth.”

In fact, if we take out the redistribution bit all of the Nordic social democracies are extremely free market economies. They have low capital taxation, low corporate taxation and they have a wonderfully robust attitude to failing companies....when GM couldn't find a buyer for Saab the relevant minister shrugged shoulders and said, in effect, well, if no one wants it why would we prop it up? There's very little industrial subsidy and basically business and people are left to get on with making money as they see fit.

It's this that allows those countries to have both a high level of redeistribution of what money is made and also continue to have economic growth. So other than the statists (of whom there are far too many I agree) what we should all be able to agree upon is the liberalism. There are those of us who would go for the straight liberalsim plus a basic safety net, like me, and those who would go for much greater redistribution than I would care to think about. But the liberalism is a necessary and vital part of either path.

So can we all just agree, in these times of trouble, with getting on with dismantling the absurdly statist structure that has been imposed upon us these last 13 years (and, sadly, if truth be told, for decades before that too) and having the argument about how much redistribution there should be a little later? Perhaps when the growth engendered has taken us a little further away from national bankruptcy?