Sunday, February 28, 2010

The Philosophical Foundation of Progressives & Conservatives (part III)

In my previous posts I discussed the conservative vision of individuals as active agents with the power of choice. I do acknowledge that the state has the important role of protecting individuals from the deleterious behavior of powerful corporations, such as ensuring reasonable health and environmental standards. But, in many instances, I view progressive calls for intervention on behalf of "helpless individuals" and "protected classes" as hyperbole. Rather than cultivate dependency, more progressive should empower individuals as active agents that can capitalize on changing options and opportunities. Furthermore, state entitlements and intervention should be envisioned as last resorts because they usually rest on the coercion of one party on behalf of another. Here are a few examples that come to mind:

I came across a flier that lamented the decline of "affordable housing" in Logan Square and demanded measures such as rent-control, developer set-asides and expanded housing vouchers. Underlying this is the belief that there is a necessity in intervening to prevent demographic change, in other words to prevent yuppies from displacing Latinos. I shudder to think how a progressive would respond if white residents complained about demographic change.
My response is: outside of moribund cities like Detroit, cities and neighborhoods are dynamic organisms. Demographics shift, before Logan Square was primarily Latino, Poles predominated and before that Scandinavians and before that Germans and so on. In most cases older groups advanced economically and moved on to greener pastures.
So, if an apartment becomes too expensive for you, choose another. If an area becomes too expensive for you, you have countless other choices in the city and suburbs. Rising rents simply reflect increased demand and the tax burdens imposed by the city & county. Impose rent controls and you will create shortages; it's simple economics.
And before the current recession, countless Latinos did what other groups did before them, cash in on rising property values and move on to greener pastures: bigger homes, better schools and safer neighborhoods in the suburbs.
I recall an instance in which a client of mine was rejected for an apartment because of their credit and rent-to-income ratio. Their response was that they wanted to pursue legal measures against the landlord because they (falsely) believed that they were discriminated against.
As a humanist I am opposed to housing discrimination on moral grounds and as a capitalist I am opposed to it on the grounds that it irrationally limits competition. Yet, I asked myself, "If indeed the landlord had rejected them on the grounds of their ethnicity, would it have been the end of the world? Would it have warranted the state to castigate the landlord and then compel him to accept renters that he did desire?"
I believe that the answer to all of the above is "no." At least in the case of Chicago, there are thousands of other landlords that would be thrilled to rent to them. Within the neighborhood in question, there are countless of available apartments available to them. And in an ethnically diverse market like Chicago, the market would punish a discriminatory landlords with the ultimate penalty: an empty apartment and thousands of dollars in lost income.
A progressive associate of mine lamented the fact that the federal government had not "invested more money to bring good jobs to the people of Detroit..." As much as it pains me to see how much this once great city has declined, the government cannot mandate prosperity. Of course it can pump billions of dollars to revive one locality, but that would unduly impose a burden on the people and enterprises of other localities.
Rather than helplessly wait around, countless individuals and enterprises chose to relocate to more prosperous localities. In particular, localities that created favorable environments for the creation of wealth and jobs. And those who chose to remain in Detroit capitalized on falling cost of land and labor by creating new enterprises and industries such as urban farming. This is not ideal, but for the time being it's the best we can hope for considering the unwise choices that corporations, unions and politicians undertook for 50 years.
And what of the campaign for living wages? As much as I sympathize with the noble intentions of its purveyors who are seeking to address real social problems, I cannot escape the fact that it's a terrible idea. Prosperity cannot be mandated from above, economic laws cannot be ignored and businesses cannot be coerced without engendering serious unintended consequences.
Declining wages in the retail sector simply reflect a growing surplus of unskilled labor. To mandate that a clerk at Target earn $25 will raise their living standard, but lower that of other unskilled workers via an increase in unemployment. And on another level it will destroy the said workers incentives to raise their wages through the development of skills that are in greater demand and shift their labor to industries and localities that demand it. For example, they could study web design in the evening and move to a city or suburbs in which employers are seeking web designers. Rather than arbitrarily impose wages that bear no connection to supply-and-demand, the state should do all that is possible to raise the human capital of its citizens. But, in the end we cannot coerce our fellow citizens to make wise choices. The most we can hope for is to treat them as active agents and help provide opportunities for them to make wise choices via a sound educational system. For that you should probably chat with the teacher's unions and experts that have been pushing reforms for the last 30 years, few of which have resulted in positive outcomes.

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