Robert Maynard
A false dichotomy between fiscal and social issues
By Robert Maynard
November 15, 2012

One of the supposed lessons that some Republicans apparently are taking from the recent electoral defeat is that the GOP should stay away from social issues and stick to fiscal issues. Putting aside the fact that this is pretty much what the Republican campaign did at both the national and state level, I see the dichotomy between fiscal and social issues to be false one. Furthermore, a large part of the GOP's base is more animated by social issues than fiscal ones. The idea that a party is going to have long term success by ignoring the concerns of its most passionate ground troops has never made any sense to me in the first place. I do understand the need to frame the issues in a way that reaches out beyond the base, but not to ignore them all together.

As I said, I think the dichotomy between social and fiscal issues is a false one. The cornerstone of the social order is the family and thus social endeavors tend to relate to family affairs. Like the ancient Greeks, the early Americans did not see economics as something separate from family issues. According to the entry under economy in the "Online Etymology Dictionary" The term economics comes from the Ancient Greek oikonomia, meaning "management of a household or administration" (from oikos meaning "house" plus nomos, meaning "custom" or "law"), hence "rules of the house(hold)." In other words, the discipline of economics had its origin in the family unit.

It wasn't until recently that the concern of economics was treated in a more narrow fashion. An intellectually honest approach to promoting a free society, which is at the heart of the American conservative agenda, cannot separate the concerns of economics from social and moral concerns. We all remember Adam Smith for his work 'The Wealth of Nations" and his notion of "the invisible hand,"what we forget is that Adam Smith was not strictly an economist, but a moral philosopher who applied his moral philosophy to the discipline of economics. Smith's major work was a piece entitled "The Theory of Moral Sentiments," where he theorized that man has a natural sentiment towards benevolence. This was the basis of his notion of an invisible hand. Society does not need a top down order imposed on it to ensure that the less fortunate get taken care of because man has a natural sentiment toward benevolence. This sentiment was to be cultivated through a social order that began with the family, but included Churches and the other institutions of what is often referred to as "civil society." This order was the essential foundation needed to maintain a free society.

Austrian Economist Ludwig Von Mises carried on this understanding in modern times. In his economic treatise entitled "Socialism," Von Mises critiqued a command and control economic system, dedicating a whole chapter to the family. Von Mises saw the family, like private property, as a natural part of the social order stemming from human nature. In his view, command and control approaches to economics were utopian attempts to socially engineer human nature. Such approaches sought to undermine both the family and the free market, as these both were seen as obstacles to the socially engineered society.

Conservatives today need to at least acknowledge the role that the family and the moral-cultural sector plays is sustaining a free society. Not only would such an acknowledgement motivate the conservative base, but it would represent a more complete defense of a free society. This does not mean proposing policy initiatives, which get the government more involved in family life. Government intrusion into the moral-cultural sector is as much a threat to a free and prosperous society as such intrusions into the economic sector are. We do not want to go from having the government play the role of "big momma" to playing the role of "big daddy."

What we can and should do is point out the destruction of the social order that has resulted from government meddling. We do this when it comes to economics and job creation, but it is even more of a factor in the smooth functioning of the social order and this has a major impact on achieving the sought after goal of social justice. A good place to start to become familiar with this dynamic is to read a book entitled "The Dream and the Nightmare: The Sixties Legacy to the Underclass" by the Manhattan Institute's Myron Magnet. For a more quantitative analysis of the impact that the dissolution of the family has on our society, there is a report by the Institute for American Values entitled "The Taxpayer Cost of Divorce and Unwed Child Bearing." Here is their conclusion:
    Why should legislators and policymakers care about marriage? Public debate on marriage in this country has focused on the "social costs" of family fragmentation

    (that is, divorce and unwed childbearing), and research suggests that these are indeed extensive. But marriage is more than a moral or social institution; it is also an economic one, a generator of social and human capital, especially when it comes to children.

    Research on family structure suggests a variety of mechanisms, or processes, through which marriage may reduce the need for costly social programs. In this study, we adopt the simplifying and extremely cautious assumption that all of the taxpayer costs of divorce and unmarried childbearing stem from the effects that family fragmentation has on poverty, a causal mechanism that is well-accepted and has been reasonably well-quantified in the literature.

    Based on the methodology, we estimate that family fragmentation costs U.S. taxpayers at least $112 billion each and every year, or more than $1 trillion each decade.
There is an appendix at the end, which tabulates the costs for each state.

One of the concerns that conservatives have is to promote economic opportunity. This is a powerful way of combatting poverty as numerous studies have shown that freeing up the economy leads to more mobility of capital and higher mobility of capital leads to greater income equality over time as people move from one income bracket to another. There is a good reason for the saying that the best poverty fighting program is a job. The problem is that not all communities have the human capital to take advantage of job opportunities. Holding and keeping jobs requires a basic work ethic that our society has come to take for granted. In addition, few companies are going to offer jobs in crime infested areas no matter what the tax and regulatory incentives are. Political scientist Charles Murray has written about how our society is "Coming Apart" and a class divide is widening where one sector of our society is increasingly missing out on the benefits of income mobility. The main problem is a breakdown of the family structure and of what has been derisively referred to as "family values." Perhaps we should adopt the term "functional values" to indicate that they are essential to the smooth functioning of a free and prosperous society, not to mention a just social order.

In short, conservatives/Republicans should not make the mistake of creating a false dichotomy between fiscal and social concerns. In fact, we should get out in front of the left and point out that there is indeed a class divide that is impoverishing the poor and undermining the ideal of social justice. This problem is aggravated by both the fiscal and social policies of modern day liberalism/progressivism.

© Robert Maynard


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