As someone who sees himself as neither a libertarian nor a progressive, but who is sympathetic to both sides, I was pleased to recently discover the Bleeding Heart Libertarian blog which is reaching out to progressives in a way that Hayek suggested in his Road to Serfdom dedication. In it Hayek presented his arguments not as an “attack on socialists” but rather as an attempt to persuade socialists that the best way to achieve their desired ends, ends with which he largely agreed, was not through the policies they were advocating involving direct state planning and control, but rather through a set of organic bottom-up policies that were more market friendly. Since his time socialism has evolved into progressivism. Unfortunately, I think it is fair to say that Hayek has not been successful in persuading Progressives that the debate is about means not ends. I agree with BHLs that it should be.

Bleeding Heart Libertarians are trying to change that by extending their invisible hand to progressives. Unfortunately, the hand they are reaching out to is not only invisible, it is almost nonexistent. By that I mean that there seems to exist no “tough love progressive” blog or research group that encourages frank discussion of problems with Progressive means, or that serves as a discussion group for progressives who are committed Progressives but who are concerned about the means by which progressive goals are being achieved. Since I strongly believe that a frank open dialog between the two groups can offer enormous benefits and advances in finding an alternative middle way—not the current middle way that often violates shared core principles of both Hayekian and progressives, but a more radical middle way that can lead to work on a shared utopian Hayekian/progressive vision—I am trying to play matchmaker, by encouraging exploration of a policy agenda that might be acceptable to both Hayekians and Progressives.

Toward that end, I recently wrote a paper for a Mercatus Center seminar, entitled, “The Courage to be Utopian: Developing a Progressive Hayekian Economic Policy Agenda”. In it outlined a policy agenda that I argued both progressives and libertarians should be willing to consider. Here I summarize the proposals. [The organizers, Virgil Henry Storr and Stefanie Haeffele, have asked me not to post the paper on-line since it will be coming out in a volume entitled Hayek’s Tensions: Reexamining the Political Economy and Philosophy of F. A. Hayek. but if one emails me (Colander@Middlebury.edu) I would be happy to send a draft copy to anyone who would like to see the longer paper.] The policy proposals are:

• A guaranteed basic job, as opposed to guaranteed basic income, safety net.
• A tax reform that makes the income tax system proportional while broadening the tax base to include all forms of income and a measure of wealth.
• Developing an ecostructure friendly to for-benefit institutions.
• Changing property rights to reduce government-protected monopoly.
• Changing from “rule-based” to “principles-based” regulation.

Each of these proposals is designed to achieve progressive goals, while simultaneously taking into account key Hayekian criticisms of government action.

Guaranteed Jobs

The first policy is a guarantee jobs safety net that is designed to replace minimum wage laws, and should be seen as an alternative to the universal basic income proposals that some Bleeding Heart Libertarians have been willing to consider supporting. The advantages of a guaranteed jobs program compared to a basic income program from a Hayekian perspective is that the jobs program is far less costly than a universal basic income proposal because it provides a bottom-up self-selection mechanism for determining who needs the assistance. The possibility of finding joint progressive/libertarian support for a guaranteed jobs program can be seen in Dean Baker and Kevin Hasset’s jointly proposed program. https://www.nytimes.com/2012/05/13/opinion/sunday/the-human-disaster-of-unemployment.html

Radical Tax Reform

A second policy that I think offers hope for a Hayekian progressive dialog involves tax reform policy. My proposal involves switching from a progressive income tax system to a proportional tax system, but to include all accretions to wealth in income and add a wealth component to the taxable base, so that the tax system is proportional to a combined measure of income and wealth. I argue that such a tax system can be defended on benefit grounds since government protection of wealth is an enormous benefit for those who are asset wealthy. I suggested that a proportional tax of about 15% on all income, and the wealth tax component of about 1% of wealth, would likely bring in the same level of revenue as our current tax system and would be more compatible with both Progressive and Hayekian sensibilities than is our current system.

For Benefit Corporations

A third policy involves developing support for an ecostructure that encourages for-benefit corporations, which are corporations designed to achieve the social goals of their founders. I argued that most entrepreneurs have social concerns and see pecuniary profits as a measure of success, rather than as their primary goal in creating their businesses. The legal structure could be made much more conducive to for-benefit businesses whose owners have decided that they have enough pecuniary wealth and have chosen to focus their energies on achieving their social goals. Under current laws many successful entrepreneurs end up giving away their money to non-profits who are too often inefficient at achieving the entrepreneur’s social goals. With for benefit corporations, entrepreneurs would take a more active role in achieving their desired social ends.

Reducing Government Protected Monopolies

A fourth policy involves developing an explicit property rights policy, with the goal of reducing government created monopolies caused by excessively restrictive and long copyrights and patents, both of which have been expanded greatly in recent years. Libertarians and progressives agree that many of the existing property rights laws reflect rent seeking by incumbents rather than reflecting needed incentives for development, as Michael Boldrin, and David Levin have argued in Against Intellectual Monopoly. Progressive Dean Baker’s recent book, Rigged, has much that a Hayekian would agree with.

Principle Based Regulation

A final policy involves replacing Rules based Regulation with Principle based Regulation, and doing it for low income individuals as a first step. The goal here is to give more flexibility to small business in meeting the goals of regulatory rules, thereby putting more focus on the intent of the rules, rather than on the specific rules.

A Final Comment

I do not expect immediate widespread agreement by either progressives or Hayekians on these proposals. But even they do not lead to agreement, I hope they help change the Hayekian/progressive debate from one about differing goals to one about differing ends.

David Colander is a Professor of Economics at Middlebury College.