Adam Smith by The Bay

Adam Smith by The Bay

There are few things to match the bitterness of a family argument. Under the right conditions — usually long-deferred disputes — 95 percent agreement can crumble under the weight of a 1 percent disagreement. Tucker Carlson’s polemic against "elites" who ravage defenseless communities for their own benefit risks yet another fissure on the right between people who in more normal times usually find themselves in "violent agreement."

This recasting of the conservative-libertarian split over how to prioritize our thinking about society and economy has plenty of good evidence on both sides. Free markets and rising GDP have delivered the goods: rising standards of living here and abroad. Obesity and diabetes have replaced food shortages and starvation as the world's most prevalent nutrition-related problems and at home we’ve essentially eliminated consumption poverty. At the same time, many American families and communities feel squeezed between the abrupt arrival of a competitive, global market and intensifying social distress at home in the form of family dissolution, educational failure, and drug addiction. The body politic has a case of flu and populism is its nagging cough.  

There’s no quick exit from this debate — nor should there be, since the success of the economy is bound up in that of the family. The founding thinker of market economics, Adam Smith, argued in "The Theory of Moral Sentiments" that the rules governing social exchange — including economic exchange — spring from our natural desire for "sympathy" or psychological and emotional connection, with other persons. Smith argued that we arrive at the rules that govern our lives through a trial and error process similar to that which leads to the development of markets. Social exchange teaches us what we must do to be, in Smith's phrase, both loved by others and worthy of that love in the eyes of the "impartial spectator" or conscience who resides within us. Just as prices are the working out of economic value, customs, norms and, eventually, law are the markers of the evolution of social exchange.

These very similar and highly interdependent processes of social and economic development suggest that families and markets are not only not at odds, they are essentially two manifestations of the same thing, namely human sociability. At the simplest level, families need markets for the goods and services on which they depend. Markets are also the mechanism for valuing, monetizing, and exchanging human skill and labor. Likewise, markets rely on families as both customers and for the production of the human capital that is the ultimate basis of all economic activity. The answer to the classic question, "Who made the pencil (or the rules)?" is "Everyone." A tax, a tariff, a new social program or a sudden shift in technology (looking at you, social media) alters the terms of exchange on which society and markets depend in multiple unpredictable ways, large and small. While this is in no way an argument for stasis, it is one for humility and incrementalism.

In his book, "The Alternative," Mauricio Miller — the Oakland, California-based founder of Family Independence Initiative — demonstrates how decades of government anti-poverty programs have disrupted both society and economy. A liberal praised by both Presidents Clinton and Obama, Miller argues, in terms reminiscent of Smith, that this disruption has interfered with the natural human capacity for individual, family, and community self-improvement. Resources tend to flow toward the neediest while neglecting the aspiring poor who might otherwise become organizers and leaders of broader recovery. Particularly grievous is how government and nonprofits have hurt the position and prestige of parents whose children, seeing mothers and fathers cede responsibility to case workers, drift into gangs looking for another source of credible authority.

Miller's alternative is simple: stop helping. He means by this that government and nonprofits should step back and create the space necessary for families and communities to begin solving their own problems through the processes of social exchange Smith identified two centuries ago. Government anti-poverty spending would then be directed away from professional helpers (i.e., social workers) and toward fostering locally developed solutions created by the individuals and families who are the leading experts in their own lives. When this happens, aspiration replaces need at center stage and individuals, families, and communities have a chance to try, fail, and, crucially, learn their way to independence.

There are a number of dangers in our populist moment. One of them is that the distress of recently de-industrialized communities will stampede us into Great Society II with policies that pre-empt local initiative, undermine personal agency, and strengthen the grip of the non-material sources of poverty. If so, then more fool us. An alternative is available if we’re willing to grasp it.  

 Brent Orrell is a resident fellow at the American Enterprise Institute where he conducts research on workforce development, criminal justice reform, and social theory.

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