Cracks in the Political Compass, Part 1

The following assumes you are familiar with the idea of the political compass. If not, here is a good place to get up to speed. Got all that?

Right, let me tell you why I think it's wrong. :P

This will come in two parts. Today, it's economic policy.

The political compass divides economic policy into Left-wing (lots of taxes, lots of state spending) and Right-wing (low taxes, low state spending). This seems to make sense, especially, I think, to libertarians*. However, it breaks down, I think, when you draw your eyes to the top-right segment of the compass; how exactly does a highly authoritarian state even work if it doesn't raise taxes and spend them to enforce it's authoritarian policies?

The idea of a left/right economic spectrum is borne out of the fact that there are two politico-economic ideologies viewed as credible by mainstream political opinion. They are, simplified almost to the point of parody;

Free-Marketism: "The government ought to interfere in economics as little as possible."

Socialism: "The government ought to intervene in economics to redistribute wealth from the richest to the poorest."

It is true that almost every credible-to-the-mainstream ideology is either free-marketist, socialist or (overwhelmingly), a fusion, where the two are balanced against each other. In Britain, almost nobody wants to sell off the NHS and almost nobody wants a program of sweeping nationalization-without-compensation.

Across the democratic world, almost every country has decided on a balance of free market and socialist economics; the Scandinavian countries run a little more socialist than Britain, America runs a little more free marketist than Britain, but we're all on that spectrum and democracies don't seem terribly inclined to skew too radically one way or another; Norway still has branches of McDonald's; America still has food stamps.

So why resist the political compass and it's left/right economic spectrum? Because, while socialism, free marketism and their hybrid offspring are the only credible economic ideologies today, this has not always been the case. Consider, as economic ideologies, imperialism ("the government ought to invade weaker countries, occupy them and redistribute the wealth back to the homeland"), serfdom ("the government ought to coerce the workers to continue doing their current work, regardless of the worker's wishes") or totalitarianism ("the government ought to exact capital from the capital-holding class and labour from the labouring class as it wishes in order to propagate and secure the power of the state").

The Left tends to view Left/Right spectrum as one between those who wish to empower and enrich the weak and the power and those who wish to further strengthen and embed the wealth and power of the wealthy and the powerful. The Right tends to view the Left/Right spectrum as one between those who want to enlarge and empower the government and those who wish to loosen the bounds of government regulation and interference. The Right value free markets and cast the Left as their mirror image; those who want to restrict and regulate markets. The Left value economic equality and the alleviation of poverty and cast the Right as their mirror image; those who want to exacerbate inequality and enrich the already wealthy.

If this increasingly lengthy and rambling blog-post has a point, it is this; socialism and free markets are exclusive, but they are not opposites. Yes, as a economy becomes more socialist, it will inevitably become less free market and as it becomes more of a free market, it will become less socialist. Yes, we each need to decide, ideally on the basis of evidence, where we think the sweet spot is.

But an absence of socialism is no guarantee of free markets, nor is a dearth of free markets an indication of socialism. They are economic ideologies which are degenerate; where wealth neither moves freely as the market dictates, nor is redistributed to better the lot of the poor. Imperialism, serfdom and totalitarianism are all degenerate ideologies, but here are three more that are a lot more current;

Cronyism: "The government ought to redistribute wealth to enrich the friends of the current ruling group."

Corruption: "The government ought to redistribute wealth in order to enrich the employees of the government, either through their employment doing unnecessary make-work, or through allowing them to exact bribes as additional compensation for their necessary work."

Capital-Service: "The government ought to regulate the economy in such a way as to facilitate the accrual of wealth by the capital-holding classes and to prevent the labouring classes from claiming too large a share of the profits of capitalist enterprises**"

The Right likes to caricature the Left as either allies or dupes of corruption. The Left likes to caricature the Right as either allies or dupes of capital-service.

I have branded ideologies other than socialism, free-marketism and their hybrid children as degenerate because they have no mainstream credibility. Almost nobody will stand up to champion cronyism or corruption. Capital service is an interesting one, because I would argue it was a more respectable ideology in years gone by; the Tory party used to be quite openly in service to the rich (this is not meant as a dig; no party as old as the Tories can avoid having disgraceful periods in its past). Indeed, I'd say it's only in the last 50 years or so that Free-Marketism has really taken off, before that I think the Left/Right conflict was between socialism and capital service; look at union-busting in the early 20th century; no reverence for the free market there.

But there is no inherent reason why only those two ideologies ought to be respectable, it simply seems to be mood of our times. Perhaps a third economic ideology might rise to prominence, possible "the government should redistribute wealth to reward the virtuous"; I think there are glimmers of that in conversations about welfare and benefits. But for the moment, we have socialism and free-marketism. Calling them Left and Right works for now, but we should remember they are not the only options; we can't have both, but we can absolutely have neither. God save us from the prospect of having neither.

* In this post and going forward, I will be using libertarian in its American sense; socially liberal free marketeers with a preference for as minimal a state as possible.

** Briefly, a capitalist enterprise, for the purposes of this blog post, is one where a company or business is owned by one group of people and the work of that business is done by another group of people, with relatively little overlap. The wages negotiated between the capitalists and the labourers will determine how the profits of the enterprise are divided. This post's condemnation of capital-serving economic ideology is not a condemnation of capitalism itself.

Also, note that, by the definitions I am using, Free-Marketism (which is often called capitalism in ordinary conversation) is not the same thing as capitalism and, indeed, in a free market, other business models, such as co-operatives, partnerships and sole traders will coexist and compete with capitalist enterprises.

In short, for the purposes of this post, being a capitalist is a thing one does with one's money, not a political belief.