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One of the underappreciated aspects of the current debate over corporate tax inversions is how it represents not just an opportunity for some progressive populism, but is just another aspect of the same view which motivates the left’s general disgust with Uber and other members of the sharing economy.
It’s the same motivation behind this push by tariff-loving New Balance to prevent soldiers from buying running shoes on the open market, and instead use pro-America rhetoric to rent-seek. And it’s a similar mindset to this BuyPartisan app, designed to turn marketplace decisions into a constant barrage of political influences and guilt riddance. Oh, you bought the Brawny? Fascist. But you did it at Costco, so maybe that’s okay. Just don’t go to Burger King after.
In practice, the pro-America rhetoric on the left on this score goes well beyond the caricature of the flag-waving xenophobic NASCAR fan toward true economic backwardness, in the form of an anti-market populism which refuses to recognize that we live in a global economy. No, no, no, it insists, like Archie Bunker ranting in his chair – America is great! America can do anything! Everything is better when it comes from America! We don’t need to compete with other countries or their tax burdens or their regulations – America’s the best! Only evil greedy corporations would ever leave America or move their businesses elsewhere for decisions based on their bottom lines and their shareholders and their ability to actually do business. Forget market competition or whether the shoes fit: America rules, and you’re unpatriotic if you think we have to do things to compete in a global economy.
Of course, progressives do have a justified reason to hate globalization for the same reason that federalism proves frustrating: because it puts their tax and regulatory theories to a real world test and exposes them to competition. This requires prohibitions on entry and escape – when companies want to leave, or imports want to enter, the progressives’ only response can be using government force to prevent that from happening lest it expose the destructive policies for what they are. This requires higher and higher levels of authority and centralization of decision making, giving the bureaucratic class more power to make society in the image they wish it to be, an economic Fortress America.
This is not a new motivation. Progressivism has, from its inception, used the manipulative power of populist arguments to achieve statist ends – in Woodrow Wilson’s framing, a belief that the industrial age and made people beholden to great corporate powers, and that government must adjust to meet these challenges. And what should that adjustment be? The evolution of an enlightened age which moved beyond the rights given by Nature’s God: the elimination of checks and balances of government, and the creation of a neutral, high-minded, enlightened Administrative State to manage the lives of the people and the business of the country. As he wrote in What is Progress?:
The Constitution was founded on the law of gravitation. The government was to exist and move by virtue of the efficacy of “checks and balances.” The trouble with the theory is that government is not a machine, but a living thing. It falls, not under the theory of the universe, but under the theory of organic life. It is accountable to Darwin, not to Newton. It is modified by its environment, necessitated by its tasks, shaped to its functions by the sheer pressure of life. No living thing can have its organs offset against each other, as checks, and live. On the contrary, its life is dependent upon their quick co-operation, their ready response to the commands of instinct or intelligence, their amicable community of purpose. Government is not a body of blind forces; it is a body of men, with highly differentiated functions, no doubt, in our modern day, of specialization, with a common task and purpose. Their co-operation is indispensable, their warfare fatal. There can be no successful government without the intimate, instinctive co-ordination of the organs of life and action.
Here’s what that looks like in practice. And that’s why this Archie Bunker view of the global economy is unable to deal with a circumstance where companies and individuals behave rationally and vote with their feet.
[First published at The Federalist.]