IN this week’s debate, Hillary Clinton said that putting together the right kind of stimulus package is “a part of economic justice.” The remark reflected a major campaign theme for Clinton, who has declared she’d pursue “a new vision of economic fairness” as president.
That slogan should set off alarm bells for anyone who recognizes that economic outcomes result from myriad individual choices. To impose her vision of fairness, she’d have to override those choices, compromising freedom in the name of equality.
Her aim is economic equality, not legal equality, and you really can’t have both. As F.A. Hayek observed, equal treatment of people with unequal abilities leads to unequal outcomes. In this sense social justice is, if not a “mirage,” as Hayek argued, at least in conflict with procedural justice.
So it’s not surprising that many of the policies Clinton believes promote economic fairness strike others as decidedly unfair. In 2006, for example, she endorsed a successful Commerce Department petition by Syracuse candle makers to impose a tariff of more than 100 percent on candles imported from China.
“Our manufacturers deserve a level playing field,” she explained, “and we owe it to them to make sure that others do not unfairly circumvent our fair trade practices.” In her view, then, fairness demands that all Americans pay more for candles to subsidize manufacturers in her state.
She also advocates “smart” trade rather than free trade, insisting on “strong protections for workers and the environment” that reduce the competitive advantages of foreign producers. She wants “jobs that cannot be shipped overseas,” which can be achieved only by interfering with companies’ profit-maximizing (and consumer-benefiting) decisions. For her, globalization isnt what happens naturally when people are free to exchange goods and services on mutually agreeable terms; it’s a process that needs to be “managed properly.”
Clinton wants to “curb the excesses of the marketplace,” which in her view also include high salaries for corporate CEOs, risk-based insurance premiums and foreclosures on the homes of people who fail to make mortgage payments. She overlooks the possibility that such practices developed for sound reasons, that arbitrarily abolishing them might have unintended consequences.
When it comes to fiscal policy, Clinton seems to see herself as a kindergarten teacher “fairly” doling out cupcakes, giving no thought to who baked them in the first place. In a recent New York Times interview, she waxed nostalgic for the “confiscatory” tax rates of the post-World War II decades.
Clinton would use higher taxes to pay for universal preschool, universal college, universal health care and universal high-speed Internet access, among other taxpayer-funded goodies. These she calls “the investments we make in each other,” and they are just like investments except that there is no reliable test of whether they make sense – since the people paying for them have no choice in the matter and are not the ones who stand to benefit.
In the Times interview, Clinton suggested that she’d be prepared to ram through her economic program on straight party-line votes. “If you really believe you have to manage the economy,” she said, “you have to stake a lot of your presidency on it.”
The history of central planners and their failures suggests a different lesson: If you really believe you have to manage the economy, you shouldn’t be president.