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right vs. left (economics)

I've gotten into two arguments with people who insist that right-wing economics is defined as free market, and left-wing economics is defined as interventionist. I disagreed, and naturally long arguments ensued.

My initial position was that the terms are relative concepts that are historically mutable: they are a function of what utility function you're using, and whose utility you're maximizing. I even took (and still take) the position that free trade can be a left-wing economic position, so long as the reason for the free trade policy is to achieve income redistribution in poorer countries.

My position was changed slightly when Nate pointed out that the historical basis for the terms left/right originated during the French Revolution, when the aristocrats would sit on the right and the commoners would sit on the left. During this period, "right-wing economics" was actually synonymous with feudalism, and laissez-faire was a left-wing economics position. Over time laissez-faire has drifted to the right and pushed feudalism who knows where.

This made me think a little more, so I amend my definition now to state that right-wing economics is defined as economic policies that maximize the utility of the stronger property owners and maintain their purchasing power, whereas left-wing economics are economic policies that maximize utility for all individuals as a whole. A possibly current-day instantiation of this definition could be that right-wing economics favor pareto-optimal results, while left-wing economics favor globally optimal results. Note that the two are not necessarily mutually exclusive, though in practice they frequently are, i.e. I get to keep my paradoxical assertion that free trade can be both a left and right wing policy, even simultaneously :).

This seems to be a historically neutral definition that encompasses present and past notions of left/right-wing economic policies, though it relies heavily on 'utility' fudge factor.

Comments (4)

That sounds about right to me. Libertarians (laissez-faire on both economic and social issues) are the closest thing we have now to classical liberals.

cshell:

So did any of your thoughts on this change (or get amplified) based on your vocal arguments with Alyssa over brunch? I didn't understand some of the arguments so I tuned it out, but since you both were being pretty vehement, I was wondering if you'd post something from that argument.

kwc:

Most of the stuff here is from a different argument -- I made this post before the brunch argument. This definition comes from my argument with someone else, where Nate chimed in to remind me of the origins of the term. There was a gap in my mind between "property rights" and "utility maximization/pareto optimal," the former coming from more philiophical tracts, and the latter from the economics courses I've taken. The historical perpsective unified the two for me.

The result of my argument with Alyssa is that we each stuck to our own definition, but we acknowledged the basis for each of our definitions, which I guess is the best you can get with a terms as wimpy as left/right.

Grant:

Of course free trade can be in an environment where both right and left wing politics exists. Take a look at Tony Blair's Premiership.

The fact of the matter is free trade has been associated with right wing politics and especially the right of right wing because libertarians like myself want to live in a market oriented economy, with minimal involvement of the state in day-day lives.

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This page contains a single entry from kwc blog posted on February 29, 2004 3:06 AM.

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