The Marriage of Left and Right Wing Ideals

I have mentioned in previous essays that I believe there to be two kinds of utopian, those that trust in people and strive to set them free and those that would be as a shepherd to their flock. I am very much of the former school of thinking as I believe it to be the only sustainable option, more effective in the long term and morally more acceptable. For politicians, leaders and social engineers who are trying to improve what we already have rather than envisage some ultimate aim there are also two types. These two different approaches are often called the left wing and the right wing however these labels are highly ambiguous and cover many political aspects and so I shall clarify which aspect I will be referring to in this essay.

Typically the right wants to lower taxes so people have more choice in where they spend their money which in economic terms is like the first kind of utopian. The left thinks it is in the best interests of society to increase public spending for amenities and services. If you go far enough left you arrive at communism where the whole economy is state run. The left wing approach is akin to the unsustainable utopian method however I find my self politically left of the middle for the current climate in this narrow definition of the two.

The reason for my ideal scenario being to the right while my pragmatic approach being towards the left is the nature of money and the wealth gap. With an optimal wealth gap it really wouldn't make that much difference if government was to sway from left to right assuming that when to the left only useful amenities were funded. This is the reason the right wing utopia is more sustainable, it is never in danger of making the wrong call, people are voting with their money all the time which keeps most things in accord with desires. With the wealth gap as it is however the rich have most of the economic voting power and the poor are forced into things and lose much of the freedom right wing politics promote. The wealth gap is the most significant social problem and left wing politics tends to reduce while it right wing ones will increase it. This is why I lean to the left in present politics despite fundamentally not supporting the principle.

Communism did very well at reducing the wealth gap however no real economic choice or financial voting power was afforded by the system and so the benefits of low wealth gap were completely wasted. The extreme left solved one problem but made matters worse by removing the freedom required to make use of having a low wealth gap. We have seen how communisms have failed and we are now begging to see the first glimpses of how the right manifested in capitalism will ultimately fail if not properly balanced. Ironically the end result looks a lot like that of the communist failures in that there are many poor people scraping a living with a few controlling all the power and wealth. They arrive at the same destination if unchecked, but by completely different routes.

Presently we strike a sensible balance in society between the left and right with much of the economy running itself in a free(ish) market while pumping taxes back into a selection of services we all tend to agree are highly worthy or important to society such as education. In the UK you can be treated free of charge by the NHS or you can go private which will render you a quicker and better service for a cost. Anyone who has the money and inclination to use private health care would rather their taxes were reduced and the NHS was not funded publicly (perhaps they would be happy to fund it in a sort of charitable way but in game theory terms it is not in their best financial interests and that is what counts). People who cannot afford private health care would much rather the NHS was publicly funded thus in part subsidised by the rich.

A park is a more difficult example as it offers a small amount of utility to everyone however not all the people that effectively pay for public parks will make use of them and so are unfairly charged. Those people will lose out as they will have less money to spend elsewhere and so will not be able to express their wishes for how that money should be spent. Parks that charged entrance however would attract very few users and would somewhat ruin the utility of the park for many people. Both parks and the NHS are left wing wealth redistribution mechanisms that reduce the wealth gap and are of benefit to society however they do this at the cost clouding the true wishes of the people. In a perfect free market economy the choices people make while spending their money are such effective democratic votes that many things run themselves far more effectively than any government could hope to achieve. Left wing public spending and wealth redistribution mechanisms can detract from the smooth working of this democracy via free market ideal.

Education, health, defence and infrastructure are all quite safe places for public spending as they offer a lot of added value. You may never use the railway however it being there for others has caused the town to grow which in turn has given your business a boost, or the new park down the road you never go to but that has increased property values in your area. Economists call these secondary effects externalities and they need not just be positive. Emissions from cars cause many negative externalities that are not strictly represented in the cost. With most externalities it is hard to assess the cost of value of the benefits derived beyond the intended purpose. People will pay the cost for something only if it is in their interest to do so, the cost or benefit to others will be far less frequently considered. I will only contribute to a railway company if I use their services however I am certain to derive other indirect benefits from the service regardless of how much money I have given them.

A good mechanism to redistribute wealth without ruining the desirable free market democracy is government subsidies on things with beneficial externalities and taxes on those things with negative externalities. People will always have a price threshold where alternatives or abstinence become more appealing. Often the highest price someone is willing to pay for something is lower than the cost of providing the service or product. Subsidies reduce the cost of providing something and so allow more people to make use of it. This is exactly the same for the taxes but in reverse. As taxes are levied on things with negative externalities the price will rise above more and more peoples threshold and so they will seek alternatives (these also have the positive effect of improving the free market democracy to account for non-monetary factors and thus better serve society). It is a fair assumption to state that on average the richer the person the higher the thresholds for spending and so taxes on negative externalities act as wealth redistribution. It is also fair to state that the things with the greatest number of beneficial externalities are those that are most widely used. The more widely used a subsidised service is the greater the extent of the wealth redistribution.

If you could fairly assess how much added utility something like a park or a railway network offered the average person and subsidise them by no more than that value then you neatly sidestep the problem of perverting the economic democracy. If these subsidies are raised by taxes of things with negative externalities then you have achieved a pragmatic compromise between left and right wing ideals. That is a lot of ifs but it is very easy to implement a system akin to this without disruption to other social systems which is rarely the case for utopian ideas. Another compromise between left and right wing ideals is a business model I have suggested in other essays. Unlike the tax/subsidy approach to externalities it would be very hard to implement within society, certainly to any immediate time scale.

The business model is an amalgamation of capitalism and communism but on a much smaller scale so that the best of both can be obtained while minimising the drawbacks of both. Rather than have company ownership as a tradeable commodity the shares of all companies should be apportioned to the workforce based on the proportion of their labours for that company. Employees would still be afforded wages but they would also get dividends from the the company shares they were party to based on their employment. The employees would also have some say in how much of the profits to reinvest and how much to take as a bonus to pay. Assuming all employees of a company worked the same number of hours then they would all be eligible for the same dividends pay out which would be based on the companies performance and thus have incentive to do the best possible job. This is essentially an extended profit sharing scheme which many of the best employers (for big companies) such as the John Lewis Partnership and the Cooperative already use to some extent. Wages are still paid so as to reward responsibility, difficulty, prerequisite training and/or the undesirability of any given role and retain all the advantages of supply and demand in the labour market that capitalism brings to the table.

This business model is another compromise between the left and right wing ideals that allows the positive influences of capitalism to go on uninterrupted while curtailing the damaging side effect of the amalgamation of wealth and the natural tendency for the wealth gap to increase under capitalism. What would be fantastic is a purely right wing method in which the wealth gap is reduced without affecting the choices of people. This however seems like a paradox. Society is almost by definition a compromise. The aim of society is not to make it as good for any given individual as possible but to make the sum of all persons goodness the greatest possible. Within this remit it is possible to fine tune the individuals received goodness to somewhat near their optimal but it is impossible to be spot on with each account simply due to the variance in peoples desires, habits and beliefs. The left wing method of providing services and infrastructure for citizens is the best way to increase the total sum of goodness within society. It must however be approached from a right wing perspective so as to maximise the individuals freedom and goodness. It must also do this for the more important economic reasons as money is the blood of society and it only operates effectively in capitalist free market situations. Perhaps a system devoid of money, or at least its pernicious natural tendencies, would be able to offer every citizen a deal that was completely fair for them without leaving any behind, but again due to the paradoxical nature of this suggestion I struggle to envisage how that might look. Left wing politics are good for plugging the hole in the monetary system and I would wager even the most right wing of people would rather have relatively high public funding than a system without money. The task ahead of humanity, assuming no better alternative to money can be found is to temper its flow to be in the best interests of society. Given its inherent flaws the solutions to each problem always appear to be a mixture of left and right wing ideals.

I have given two examples of ways in which a marriage of the opposed political schools is the socio-economic optimal solution for a hypothetical utopia however this logic needs to be applied to every area in society where there is interaction between the state and the individual or between private and public sector. There is no single rule for how this overlap should be dealt with. The railways, the education system and the health service are all very different institutions that offer different services with the intent of reaching different social goals. A left right compromise in any of those examples should allow innovation and efficiency to naturally flourish, they should prevent the wealth gap from widening, they should maximise the freedoms of individuals and they should make society better. The aims of all are the same but the route to achieving each needs to be specific to the area in question and so many more essays are required. Tim Harford described a wonderful utopian left right compromise for a health service in his book The Undercover Economist. That system has been in place in Singapore to for about twenty years and has yielded impressive results thus far. In many ways this essay is a summary of the utopian elements in that book but I omitted any reference to the health service idea as it was already covered far better by Harford. For a clarification on any of the ideas expressed in this essay I would highly recommend reading the Undercover Economist.