"This is prefectly consonant with the idea I think liberals ought to favor: the growth-maximizing welfare state."

I took the name libertarian Democrat in order to adumbrate some ideas on what such a beast might sound like. I didn't consider the name particularly controversial or hard to understand. That's because I consider myself a Whig or Classic Liberal. However, I thought that these terms might be too arcane, and since there was already a discussion begun in 2006 about being a libertarian Democrat, I would take that discussion as a starting point. Also, I had decided to become a Democrat. I should have chosen Classic Liberal.

Here's Matt Yglesias:

"Small-Government Egalitarianism

Ed Glaeser has an interesting post on what he terms “the case for small-government egalitarianism” which goes off into a stimulus detour, but which is more interesting on more enduring issues. He observes that “Political divisions have not always pitted big-government egalitarians against small-government conservatives” but today things are different, and not necessarily for good reasons:

Current American political discourse labels people as either anti-government or pro-equality, but wanting to help the poor should not require the abandonment of sensible skepticism about expanding the size of the state. Many of my favorite causes, like fighting land use regulations that make it hard to build affordable housing, aid the poor by reducing the size of government. In the wake of Hurricane Katrina, I also argued that it would be far better to give generous checks to the poor hurt by the storm than to spend billions rebuilding the city, because those rebuilding efforts would inevitably help connected contractors more than ordinary people.

These are well-taken points. And I think it’s both true that people who think of themselves as progressives (the kind of people who think industry shouldn’t just be allowed to pollute willy-nilly, the kind of people who think it would be smart to have a universal health care system) should give more emphasis to these issues and also true that people who think of themselves as conservatives (the kind of people who think income tax rates are too high) should give more emphasis to these issues.

Still, the idea of “small-government egalitarianism” strikes me as a slightly confused concept. The argument seems to go something like this:

1. Egalitarians often favor government programs that boost equality and regulations to reduce harmful externalities.
2. Some government programs and regulations are actually just the rich and powerful further enriching themselves.
3. Underpants gnomes.
4. Egalitarians should really be libertarians!

There’s something fishy happening in step three. Contrast “small-government egalitarianism” with ordinary modern American liberalism. When a modern American liberal thinks a government regulation or public spending endeavor would accomplish an important public purpose, he’s for it. But not otherwise! Dean Baker, for example, is one of our foremost defenders of Social Security but also the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer which you both can and should read for free online.

Baker’s book is full of ideas that a “small-government egalitarian” ought to be able to embrace—it’s all about policy proposals to eliminate or reform government interventions in the economy undertaken on behalf of the rich and powerful. He doesn’t happen to tackle the pet issue I share with Glaeser—land use regulations—but it’s very much in that spirit. At the same time, Baker’s just a regular-old liberal. Nothing about his egalitarian dislike of bad government programs forces him into dislike for good government programs. Modern American liberalism isn’t a mirror-image of modern libertarianism and it doesn’t have an a priori commitment to government intervention in the economy on a particular scale. I think it’s completely fair to charge that people who call themselves liberals are sometimes mistaken about the desirability of particular programs or regulations, but that’s a different issue—lots of people are mistaken about all kinds of things.

All that said, with the Cold War over and the conservative movement tending to take most of its emotional succor from a blend of militarism and homophobia these days, I hope that modern liberals and libertarians can find ways to cooperate on some of these economic issues where our interests may overlap."

Now, I agree with Dean Baker a lot. I think of him as a Classic Liberal. Why? Because he distrusts the power of government. Period. On any issue where I disagree with Baker, it comes down to empirical differences and nuances. My problems with Social Security have to do with how it actually works. In my own plan, with a guaranteed income, I would argue that the poorest seniors would be much better off. Nevertheless, I understand why Baker doesn't want to change this arrangement. From the point of Political Economy and Politics, he might even be correct. But I don't think that he would find my proposals illiberal, though he might raise real pragmatic objections. What about libertarians? My proposal is a lot like Charles Murray's, and I think that it is in the spirit of Hayek( Who loved Burke, who defended compromise and was always a Whig. ) and Friedman. If they would disagree with my particulars that's fine, but they would certainly understand them as similar to theirs.

The differences among Classic Liberals are accounted for in my view on Pragmatic grounds. No one who calls themselves a liberal of any kind should love the power of government. Rather, they should view government as necessary, and demand that it be run efficiently and well. Are there people who call themselves liberals who don't believe this? Yes. So what?

Let's look at the Yglesias list again:

The argument seems to go something like this:

1. Egalitarians often favor government programs that boost ( THIS WORD, "BOOST", IS THE PROBLEM WITH HIS "ARGUMENT". HE SEEMS TO QUALIFY EQUALITY HERE, AS SOMETHING TO BE REDUCED, NOT MANDATED. ) equality and regulations to reduce harmful externalities.( Liberals are willing to sacrifice some economic efficiency in order to reduce inequality and ensure social harmony. )
   
2. Some government programs and regulations are actually just the rich and powerful further enriching themselves.( YES )
   
3. Underpants gnomes.
4. Egalitarians ( WHO MANDATE EQUALITY ) should really be libertarians!

4 should be: Egalitarians who are willing to limit the power of government, even in the pursuit of equality, should be classic liberals.

I'm not much for theory, but I think that I've expanded the argument enough to allow much more discussion and cooperation between liberals and libertarians.

Also, from Will Wilkinson:

"Glaeser’s Libertarian Progressivism

by Will Wilkinson on January 22, 2009

I have no idea how I missed Ed Glaeser’s blog post on “small-government egalitarianism,” which he also dubs “libertarian progressivism.” By “egalitarianism” I don’t think Glaeser intends a view strictly oriented toward the equalization of economic holdings so much as he intends something like “prioritarianism,” as some political philosophers would call it: the view that the welfare of the least advantaged should be given a certain priority in policymaking. If we’re putting the poor first, we’ll want to note that big government generally redounds especially to the benefit of the rich and connected. As Glaeser puts it:

Libertarian progressivism distrusts big increases in government spending because that spending is likely to favor the privileged. Was the Interstate Highway System such a boon for the urban poor? Has rebuilding New Orleans done much for the displaced and disadvantaged of that city? Small-government egalitarianism suggests that direct transfers of federal money to the less fortunate offer a surer path toward a fairer America.

This is prefectly consonant with the idea I think liberals ought to favor: the growth-maximizing welfare state. Arrange our basic economic institutions to maximize productivity, and then directly transfer resources to those who fall below what we (through due democratic consideration) judge the threshold of sufficiency. You don’t need a big government for that( I AGREE ). Glaeser is right that something like this is the missing position in contemporary American politics. But he points out it wasn’t always this way, And it doesn’t have to be now.

Current American political discourse labels people as either anti-government or pro-equality, but wanting to help the poor should not require the abandonment of sensible skepticism about expanding the size of the state. Many of my favorite causes, like fighting land use regulations that make it hard to build affordable housing, aid the poor by reducing the size of government. In the wake of Hurricane Katrina, I also argued that it would be far better to give generous checks to the poor hurt by the storm than to spend billions rebuilding the city, because those rebuilding efforts would inevitably help connected contractors more than ordinary people.

Glaeser goes on to express skepticism about the both the effectiveness as stimulus and the distributive effects of big infrastructure spending, and argues for a means-tested cut in the payroll tax — not far from what I argued on Marketplace last week.

I declare Glaeser a liberaltarian in good standing! Anyway, read the whole, stimulating post."

I've already posted on this.