Until now, I’ve thought that the best definition of liberal is being generally more in favor of social freedom and economic restriction than non-liberals. It was a pretty good definition; imperfect, but pretty well articulated the implied meaning of the common use of the term.
It occurs to me now that there is a better definition of what people mean when they say liberal. And it comes from observing that most economists are both self-identified liberals and tend to be for more economic freedom. They are not the only ones identifying them as liberals. When most non-economists get a good understanding of what economists believe, I think they would also identify economists as liberals. This was puzzling. How can economists be liberals and be pro-market, if liberalism means not pro market?
Liberalism is better defined as belief in a particular kind of economic restriction, rather than economic restrictions generally. Liberalism means being pro redistribution. If one looks at what economists believe and what other liberals believe, the overlap consists in mostly redistributive policies not anti-market policies. Along the lines of market policies, economists are much more pro-market than non-economist liberals.
Consider the rationale for market failure between economists and liberals. Sure economists believe in market failure, but they define it much more narrowly than non-economist liberals do.
Economists believe that monopolization is the exception and that it happens under a specific set of conditions. Non-economists think that monopolization is the rule, and happens naturally if government doesn’t do something about it.
The public tends to think that the averse effects of monopoly is on competing smaller producers, therefore any time a business is “putting the little guy out of business” it is monopolistic behavior. Economists recognize that the averse effect of monopoly is on consumers, and that its effect on competing producers is just the normal process of creative destruction.
Sure markets get us more stuff, but public doesn’t consider economic growth as positively correlated with improved working conditions and improved consumer safety. Economists do.
Economists are for free trade. The public thinks that when we trade with poor African labor we’re exploiting them, and when we trade with poor Asian labor they’re exploiting us.
The public thinks that low skilled immigrants have a negative effect on economic growth. Economists think that low skilled immigrants have a positive impact on the overall economy.
The public thinks that increasing labor input is how the economy grows, implying an increased role for government to make sure that happens. Economists measure economic growth by outputs, and realize that reducing labor inputs so it can go be productive somewhere else makes us all richer.
The public uses moral language to defend their preferred policies for more environmentalism, more health care, more education. If these are moral imperatives, then there aren’t any tradeoffs and there is no limit at which we say enough is enough. Economists do a cost benefit analysis, and look for tradeoffs to establish threshold beyond which more of these things just doesn’t make any sense.
Along almost every metric I can think of, economists are more pro-market than the public. But in general they vote democrat, identify themselves as liberals, and are almost never defined as libertarian despite being for more of both social and economic freedom. Economists and non-economist liberals are in strong agreement on redistributive policies. Take money from the rich and give it to the poor. Economists usually take a smarter stance on the least cost way of accomplishing redistribution, but they believe in more of it than the average person just like liberals do.
This definition also makes a lot of sense out of liberal’s infatuation with the Nordic countries. If you take redistribution out of consideration, the Nordic countries are some of the freest economies in the world. France, Spain, or Italy would better be better models for the liberal ideal if liberals wanted general economic intervention.
This definition doesn’t contrast liberals with conservatives as well as the social / economic freedom definition does, but it is a better definition of what is found universally among liberals and what best distinguishes them from the public as a whole.
