Somebody is misunderstanding what laissez faire means...

...and it's either me or these guys.

So this morning, I picked up a copy of the newly released second edition of The Moral Imagination by Gertrude Himmelfarb. The second edition of this book includes new chapters on Adam Smith, Lord Acton, and Alfred Marshall. I just want to take a moment, dear reader, to assure you that just because I have this book, that does not necessarily prove that I am cooler than you. Although it is pretty suggestive.

Anyway, something I read in his opening chapter on Adam Smith made me do a double take. Consider this statement.

His opposition to mercantilism is generally read as a criticism of government regulation and a defense of laissez faire. It is that, and much more, for his objection to mercantilism is not only that it inhibits a progressive economy by interfering with the natural process of the market; it is also unjustly biased against workers.

Now, wait just a minute. Why is thinking mercantilism is bad for workers taken to be separate from a defense of lassiez faire? Why isn't it part of a defense of laissez faire?

Selective sympathy

I think we should employ means testing in Social Security and Medicare. This idea has very little political traction, of course. As the great-warrior poet Dave Barry once said "If you dare to suggest that maybe we don't need to pay for the prescription drugs of wealthy retirees who own, say, more than three yachts, members of the American Association of Retired People will beat you senseless with handicapped parking placards." Luckily, small-time curmudgeons like myself are not likely to get the attention of the AARP, so I'll keep on saying it.

I was pondering last night about how I would structure means testing for Social Security. Right now, I lean toward looking at lifetime gross income. If you made more than X amount over the course of your life, you are not eligible to collect Social Security. Right now, the way we deal out payments toward Social Security is very odd. Your payments are positively correlated with lifetime income. That is, people who had the highest lifetime income, and were therefore in the best position to be able to save for and fund their own retirement, are the ones who get the most financial support! Even egalitarians should find that a bit off, no? Hence my idea - if you've made $10 million over the course of your life, and still didn't put enough away for retirement, then too bad for you. Your situation is entirely your fault.

Of course, many modern liberals like Karl Smith will reject the very idea of that. Smith argues that people who are lazy and behave impulsively deserve our sympathy just as much as people who are born blind. He does admit a moral hazard problem - people can just "pretend" to be lazy. He's willing to tolerate that, though, to make sure that society doesn't stop supporting those who are genuinely lazy, because "we lack the technology to distinguish them from those faking laziness."