Riley Parr: Left’s ‘solutions’ often fail to address the problems

“You know, the economic system we have only works for people like ______.” Insert some combination of Census check-box characteristics “that make up the people in the Republican Party,” as my liberal sparring partner put it. To take a page from the 2016 election, the economy is “rigged” and systematically oppresses large segments of our population. Or so says Bernie Sanders, Elizabeth Warren and AOC.

Actually, there is something to be said for taking stock of how different populations fare and whether economic mobility and opportunity still rings true. But because the diagnosis made by so many of those on the left—who broadly speaking are well-intentioned—misses the boat, the prescriptions they propose are not only poor policy, they don’t even address the actual problems.

The left identifies income inequality as the fundamental malaise. Critically though, according to them, it’s income inequality born of the free-enterprise system. Herein lies the first fallacy: Much like the argument made 10 years ago during the Obamacare debates, it presupposes that a less-constrained market is the cause instead of the solution.

Second, focusing solely on the inequality component says nothing at all about an individual’s well-being. It says even less about society’s. The left’s view assumes a finite amount of wealth—that if somebody has $1 (or a lot more), then somebody cannot also have a dollar (or a lot more). Because of the focus on disparity instead of whether somebody’s standard of living is absolutely better off, it switches the narrative from one of opportunity and mobility to pitting citizens against each other. Indeed, it has the perverse logical outcome, as Baroness Thatcher quipped, of preferring “the poor were poorer, provided that the rich were less rich.”

This fascination with the “income-gap-as-a-result-of-the-free-market” mindset misses another critical point: The people who make up the different strata of income are constantly shifting. Rather than looking at income levels as a snapshot, fixed for all eternity, it instead should be thought of as a movie, constantly changing.

Tethered, both implicitly and explicitly, to the left’s arguments about income inequality is a distrust of big business and corporate profits. In a recent New York Times article, Darren Walker, the president of the Ford Foundation and a member of Pepsi’s board, tied shareholder profits to economic inequality. In fact, the Business Roundtable, an association of CEOs, recently moved away from its long-held position that shareholders and their profits are the primary focus of corporate boards.

But that same New York Times article also—probably unwittingly—provided an entirely capitalistic answer for why businesses are increasingly focused on social causes: Consumers demand it. As I’ve written before in these pages, the free-enterprise system is a more pure form of democracy than any government, anywhere. Businesses only make money when they convince buyers to part with their hard-earned cash. And, if you don’t like how a certain business conducts its internal affairs, or how much it pays its workers, or, frankly, anything, guess what? You can spend your money at a competing business. If enough people agree with you, the company, or companies in this case, will change. Perhaps most ironically, this shift in focus may actually increase profits.

Too often critics of the free enterprise system conflate maximizing profits with maximizing profits at all costs. When individuals and businesses are left to suffer the effects of their poor decisions to focus on short-term profits at the expense of other considerations, they either change behaviors or fall behind. When government steps in to ameliorate those effects, though, then you end up with Too Big to Fail.•

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Parr is a student at the Indiana University Robert H. McKinney School of Law in Indianapolis and is executive director of the Indiana Young Republicans and president of the IU McKinney Federalist Society. Send comments to ibjedit@ibj.com.

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