Poor Joe Stiglitz. Here he is, an eminent economist, on everyone's short list for a Nobel Prize. He writes a perfectly respectable New Republic cover story about the failings of the International Monetary Fund. He's particularly concerned that IMF policies make poor countries experiencing recessions poorer and more depressed. The article makes a big splash. Yet when all the publicity is over, Stiglitz has become the intellectual poster child for anti-trade, anti-growth fanatics. What happened?
Stiglitz got involved in a dirty issue, one entangled in many agendas, and he didn't separate his goals from those of larger, louder, sexier coalitions. He wanted to criticize the IMF and, for maximum effect, he did so as the IMF and World Bank were holding big meetings in Washington. But at the same time, protesters hit the streets to condemn not just specific practices of international lending organizations but globalization, trade, and economic growth. Coming off the much larger anti-trade protests in Seattle, these activists dominated journalists' imagination and, hence, set the terms of the discussion.
So, for instance, when PBS' Charlie Rose Show discussed the topic, Stiglitz was paired with Juliette Beck, a young anti-globalization activist and the recent subject of a glowing profile in The New Yorker.
When Charlie Rose asked whether she sees any evidence that the World Bank and IMF get the protesters' message, Beck responded, "Quite frankly no. I think that they are still entrenched in their ideology of `growth is the solution.' Economic growth, frankly, is leading to a decline in almost every ecosystem on Earth. We cannot sustain this level of growth and yet they're promoting more and more economic growth as a solution. We need to rethink the whole economic system that we're living in."
"Rethinking the whole economic system" is a long way from Stiglitz's argument. From Beck's point of view, what Stiglitz dislikes about the IMF would be a wonderful attribute. What's a depression if not the opposite of Earth-destroying "growth"? Further wrecking the economies of Thailand and Indonesia just moves us closer to a "new paradigm" that will save the environment.
Faced with a supposed ally whose explicit agenda is to end economic growth, Stiglitz had a professional, and moral, responsibility to disagree. He needed to explain why trade and growth are essential if the world's peasants are ever to climb out of poverty and how, in his view, the IMF is hampering that process. That was, after all, the thrust of his original criticism.
But he had apparently defined his goal as enlisting as many anti-IMF allies as possible, regardless of their agendas. So instead of disagreeing, he kissed up. He said nothing in defense of economic growth, let alone trade. He tried to keep Beck and her followers from supporting Ralph Nader for president; he gushed about how much his man Al Gore defends the environment and worries about population growth. It was disgusting.
It was also understandable. Dirty issues are tricky; they don't break down along neat and clean political or cultural lines. Dealing with them effectively requires more than an ideology or a set of policy goals. It requires a strong sense of the particular political and intellectual moment--of which issues are strategically important and which are less so, of how results are likely to be framed in law and public opinion, of which victories or defeats really matter.
To address dirty issues, you can't just have principles. You have to have priorities. Let's say that you think tax-and-spend redistribution is bad and that the government shouldn't tell people how to live their lives or spend their money. In a perfect world, you wouldn't want any taxes at all, or would want them only to support government activities that benefit everyone, such as the courts or national defense. Either way, you think taxes should be low, low, low. You also want tax policy to be neutral. How, then, should you react to a proposal to give some taxpayers a special break if, say, they buy a new home for the first time or pay college tuition?
It all depends on the political Zeitgeist. In the 1970s, the ideology of egalitarian redistribution--"Soak the rich!"--dominated tax discussions. Taxes weren't seen as a necessary evil to fund government spending. They were a righteous cause, a way to right the injustices of a system that made some people richer than others. And the government deserved as much money as it wanted, because it was using it to help people. Marginal income tax rates were extremely high. Under these circumstances, it made sense to adopt Milton Friedman's adage that any tax cut is a good tax cut. At least a few people got to keep a little more of their money.
Today, however, egalitarianism, while by no means dead, is not the biggest threat to individual freedom, personal or economic. Bossiness is. The most potent challenge to markets, and to liberal ideals more generally, is no longer about fairness. It is about stability and control. It is the argument that free social and economic processes are disruptive and chaotic, that they make the future unpredictable, and that they serve too many diverse values rather than "one best way." The most important challenge to individual freedom today is not the ideology of egalitarianism but the ideology of stasis: the notion that the good society is one of stability, predictability, and control. The role of the state, in this view, is not so much to reallocate wealth as it is to curb, direct, or end unpredictable economic and social evolution. (See "After Socialism," November 1999.)
In this context, targeted tax credits look bad indeed. They are, as they have always been, a way of favoring some citizens over others, a ready tool for interest-group pandering. Now, however, targeted tax credits also fit into a larger ideological pattern. They bolster the idea that government authority should determine the shape of people's choices. As Bill Clinton famously remarked, a general cut in tax rates, rather than targeted credits, might encourage people to spend their money the wrong way.
Under these circumstances, it may be better to keep the tax code as it is rather than add more loopholes. If tax cutting has been your political lodestar for decades, that's an unpleasant thought. But it's the sort of analysis that dirty issues require.
It's tempting, then, to avoid dirty issues altogether, to "pick clean fights with the other side that aren't muddied by problematic circumstances," as an analyst at a libertarian think tank recently e-mailed me. But rarely do we have the luxury of public policy debates conducted entirely on our own terms. "Problematic circumstances" are everywhere.
Waiting for clean issues is a fine strategy if what you want to do is demonstrate the philosophical consistency of your beliefs, with little concern for what actually happens in the world. Many libertarians are attracted to that sort of utopian purity. But dodging dirty issues is a prescription for symbolic politics that let you feel superior while the world is shaped by the ideas and policies of others. And many of those ideas and policies will be dangerous.