picking winners and losers

Yesterday Charles Koch published an op-ed in the Washington Post. Koch is the chairman and chief executive of Koch Industries, but he is better known as one of the "Koch brothers" who have committed their vast wealth to the project of placing very conservative politicians in elected office. By now, Koch certainly qualifies as a political figure, and the fact that he has aired his views in the newspaper is not very unusual. What was surprising was the content of the views themselves. The major point of the piece was to emphasize the common ground that he shares with Bernie Sanders.

Though Koch acknowledges that he and Sanders "disagree on plenty when it comes to public policy," he claims to wish to underscore their common ground. "The senator is upset with a political and economic system that is often rigged to help the privileged few at the expense of everyone else, particularly the least advantaged," Koch correctly summarized. Sanders "thinks many corporations seek and benefit from corporate welfare while ordinary citizens are denied opportunities and a level playing field." On these points, Koch claims, "I agree with him."

Source: betterworld.net

Though Koch claims to be offering his analysis in the spirit of "searching for common ground and greater civility during this overly negative campaign season," his assessment is misleading. Koch is a libertarian, a radical on the right. Sanders is a democratic socialist, a radical on the left. Though the two men might both decry a rigged economic system that works to the benefit of the wealthy and well-connected, Koch sees the source of these problems as the actions of government, while Sanders sees it in the practices of large corporations and the rich. Koch sees government activity as the problem, while Sanders views it as the solution. The differences in these approaches so dwarf the similarities that emphasizing the latter veers toward the disingenuous.

The larger purpose of the column becomes clearer as Koch fleshes out his analysis beyond his limited agreement with Senator Sanders. "Democrats and Republicans," he argues, "have too often favored policies and regulations that pick winners and losers." It is clear that this practice--picking winners and losers--is the one that truly bothers Koch. "Whenever we allow government to pick winners and losers," he writes, "we impede progress and move further away from a society of mutual benefit. " If Koch's most basic problem is with this practice, then his positions do not overlap with Sanders's in any way.

The phrase "picking winners and losers" has long served as conservative and libertarian shorthand for a criticism of government economic intervention. It presumes that the invisible hand of the market, if left to its own devices, would select the most beneficial producers, goods and employees. Government activity such as regulation, taxes or the distribution of economic benefits will therefore not only restrict economic liberty, but they will make the distribution of these factors less optimal than it otherwise would have been. The book that I wrote was an attempt to address this idea's influence and hopefully counter its excesses. The idea that the government should not tip the scales economically presupposes that it is possible for that government to enact economically neutral policies, ones that do not restrict economic freedom. Yet, as I wrote in A Commercial Republic, such neutrality would be both impossible and undesirable in the contemporary United States.

The federal income tax deduction on a home mortgage rewards those who buy and sell houses, thereby altering the market forces that might have led some to develop or lease rental properties. When the military chooses one state over another for the location of a new base or when a highway is constructed near one town rather than a different one, those who live in the favored region receive an economic windfall that is denied to residents of the unlucky locale. Both immigration policies and public schooling significantly alter the carrots and sticks that shape the market for labor. Food and Drug Administration regulations affect the cost of agricultural products and medicine, altering the conditions under which individuals make their decisions. And the criminal code's outright ban on some goods and services--such as prostitution and many recreational drugs--impedes the efficiency of markets in those items while boosting demand for the construction of prisons. (243)

Charles Koch might want to eliminate most of these government actions, but most Americans--including Bernie Sanders--do not. Koch should not suggest otherwise.