Ideology vs. common sense

I've got a bit of a pet theory on liberal vs. conservative ideology.  My take is that when it comes to markets, conservatives are more likely to be driven solely by ideology to the point of ignoring reality, whereas liberals are more likely to support whatever means achieves their goals, whether it be through free markets or government action.  Liberals in America believe in the power of the free market.  It's just that we also appreciate the destructive power of an unregulated free market (i.e., pollution, monopolies, etc.).  Thus liberals look to government to temper the worst aspects of the free market and appreciate that both free market principles and government regulation play a role in creating the desired policy outcomes.  Too many conservatives in contrast, place a blind faith in the virtue of the free market and see a free market as an end in and of itself. 

One need look no farther than this recent news item (hat tip to Ezra Klein):

Unless Congress steps in to stop it, the IRS is set to begin
implementing a wildly inefficient plan to outsource the collection of
past-due taxes from those who owe $25,000 or less. IRS employees could
collect these taxes for about three cents on the dollar, comparable to
other federal programs' collection costs. But Congress has not allowed
the IRS, which is eliminating some of its most efficient enforcement
staff, to hire the personnel it would need to do the job. Instead, the
agency has signed contracts with private debt collectors allowing them
to keep about 23% of every taxpayer dollar they retrieve. Employing
these firms is almost eight times more expensive than relying on the
IRS, but, according to IRS Commissioner Mark Everson, it fits in with
the Bush administration's efforts to reduce the size of government.

Over 10 years, the companies hired are projected to collect overdue
taxes totaling $1.4 billion, $330 million of which the companies keep
as fees. According to the IRS' own estimates, over those same 10 years,
the agency could collect $87 billion in unpaid taxes at a cost of just
under $300 million ? if allowed to hire sufficient personnel. In total,
utilizing the private sector instead of augmenting IRS personnel would
leave in the hands of delinquent taxpayers more than $85 billion owed
to the federal government.

In short, an ideologically-driven commitment to free market principles leads to an incredibly inefficient and sub-optimal outcome.  But hey, we're relying on free market principles, so it must be good–right?  I cannot imagine too many liberals supporting a policy regardless of its outcome and efficiency solely for the reason that the government rather than the private sector is the primary delivery vehicle. 

About Steve Greene
Professor of Political Science at NC State

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