Illustration by Michael Burmesch
Gerrymandering socialism
Republicans routinely affix the “Socialist” label to Democrats and their policies. The assertion is repeated so frequently that many voters have come to regard it as the truth, and so it is an effective vote-getter. Time-tested economic understanding—going back to Adam Smith—provides a rigorous and vigorous response to this scare tactic: the economic distortions commonly attributed to socialist systems are also produced by government made unrepresentative by gerrymandering.
The labeling stratagem works because some socialist countries have failed in spectacular ways to address the economic wants and needs of their populations. The “socialism” label is intended to bring to mind long lines for food, involuntary job assignments, and gulags and disappearance for those who complain too much. The core definition of socialist is advocacy of social organization around public ownership of the means of production and distribution, and centralization of their management.
Socialist systems are in stark contrast to the market system in which decentralized management is guided by a price system. Confusion arises when socialism is conflated with government activity. This is odd since capitalism requires a well-functioning public sector. The modern economy can be thought of as comprised of the public and private sector, sectors that must work together to optimize overall economic performance. The economy must provide those goods and services that the market system needs but due to incompatible incentives does not produce well or does not produce at all.
Brief Look at the Private Market Sector
The U.S. economy is at core a highly successful market system. One of the great strengths of a market system is its responsiveness to individual willingness and ability to spend money according to their preferences. People earn money in the “job market” and spend their income according to their preferences in the “goods and services market.” To a first approximation, all these trades are guided by decentralized prices and wage rates. They are made without coercion; Adam Smith referred to the market as a “system of perfect liberty.”
But this market responsiveness to consumer preferences does not always work; there are important pre-conditions. Chief among these preconditions is competition which compels sellers to serve the informed buyers. This interplay between buyers and sellers independent of government is labeled the “private sector.” In important and familiar sectors of the economy, those pre-conditions for market efficiency do not exist.
Brief Look at the Public Sector
The absence of these preconditions leads to two roles for government. First, the public sector has the responsibility to regulate markets that are non-competitive but still produce very important products. Examples include the public utilities that produce and distribute electricity, natural gas, and sewer and water services. Also regulated are firms that produce valuable products but which, if unregulated, would impose spillover cost of pollution, noise, or danger, e.g., carbon dioxide emissions. Still others would simply take advantage of non-competitive positions to raise prices, as in the cases of insulin anti-seizure epi-pens.
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Second, if through representative government the people express a preference for certain goods and services that the market will not provide, some level of government—state, local or federal—may step in and provide it. Examples include national defense, police and fire protection, health insurance, the legal system that enforces contracts, addresses crime and adjudicates accident costs, as well as provides massive insurance programs such as Social Security and disaster relief.
The Right Mix
The ideal combination of public and private rests on the simultaneous achievement of efficient prices guiding exchanges in the private sector and representative government guiding decisions in the public sector. In the private sector the price system is the mechanism for responsiveness to constituents by coordinating the incentives of buyers and sellers in the market. In the public sector representative government is the mechanism for responsiveness to the constituents. Just as the private sector is weakened when decentralized prices are distorted, a public sector is weakened when government is distorted by a gerrymandered non-representative legislature.
We see one of the worst examples of this distortion right here in Wisconsin where voters gave Democrats 52% of their vote count but received only 39% of the legislative seats. In other words, the people with a slim majority are relegated to a powerless minority position in the legislature. That means that their preferences for public goods and services are bypassed in favor of the preferences of a donor-driven minority.
Such distortions influence key decisions, such as the allocation of resources to build new roads versus repair existing roads; rural roads versus suburban roads versus urban roads; cut taxes versus increase spending on math education; assuring reproductive rights versus the 1849 law that ban those rights; transfers of wealth from taxpayers to wealthy owners of sports franchises versus focus on the more immediate needs of those taxpayers.
The strength of our private sector relies on representative government; if the current project to create fair maps succeeds, the state economy will better serve the citizens of Wisconsin.
