N※N

Economics And The New Left

Economics and the New Left

In the ever-evolving landscape of American politics, the emergence of what is often termed the "New Left" has brought a fresh wave of economic ideas to the forefront. These ideas, championed by figures like Alexandria Ocasio-Cortez, Bernie Sanders, and a cadre of progressive thinkers, represent a bold departure from traditional liberal economics. They advocate for sweeping interventions in the market, from wealth taxes and universal basic income to ambitious climate initiatives like the Green New Deal. But as John Goodman explores in his latest Forbes piece, these proposals, while well-intentioned, often clash with fundamental economic principles, potentially leading to unintended consequences that could stifle growth, innovation, and individual liberty.

Goodman begins by contextualizing the New Left within the broader history of leftist thought. The Old Left, rooted in the labor movements of the early 20th century and the socialist experiments of post-World War II Europe, focused primarily on workers' rights, collective bargaining, and state ownership of key industries. Think of the British Labour Party's nationalization efforts or the American New Deal's public works programs. In contrast, the New Left is more eclectic, blending social justice, environmentalism, and identity politics with economic policy. It's less about class struggle in the Marxist sense and more about addressing systemic inequalities through government-led redistribution and regulation. This shift, Goodman argues, is fueled by a generation disillusioned with neoliberalism—the free-market orthodoxy that dominated from Reagan to Obama—and exacerbated by events like the 2008 financial crisis, rising income inequality, and the climate emergency.

At the heart of the New Left's economic agenda is a profound skepticism toward capitalism's ability to self-correct. Proponents argue that markets inherently favor the wealthy and exploit the vulnerable, necessitating aggressive state intervention. One flagship idea is the wealth tax, popularized by economists like Thomas Piketty and embraced by politicians such as Elizabeth Warren. This would impose annual levies on assets exceeding certain thresholds, say $50 million, aiming to curb billionaire influence and fund social programs. Goodman critiques this by drawing on economic theory: taxes on wealth, unlike income taxes, can distort investment decisions. Wealth isn't static; it's often tied up in productive assets like stocks or businesses. Taxing it could discourage entrepreneurship and capital formation, leading to slower economic growth. Historical precedents, such as France's short-lived wealth tax, show capital flight and administrative nightmares, with revenues often falling short of projections.

Another pillar is universal basic income (UBI), which proposes regular cash payments to all citizens, regardless of need, to combat poverty and automation-induced job loss. Advocates like Andrew Yang have touted it as a safety net for the gig economy era. Goodman counters that while UBI sounds egalitarian, it ignores incentives. Classical economists like Milton Friedman, who proposed a negative income tax as a UBI precursor, emphasized work requirements to avoid dependency. Without them, UBI could inflate labor costs, reduce workforce participation, and balloon government budgets. Pilot programs in places like Finland have shown mixed results: some recipients report better well-being, but employment rates don't always rise, and the fiscal burden is immense. In the U.S., funding a $1,000 monthly UBI for adults could cost trillions, likely requiring tax hikes that hit the middle class hardest.

The Green New Deal exemplifies the New Left's fusion of economics and environmentalism. This sweeping plan calls for massive investments in renewable energy, infrastructure, and job guarantees to transition to a zero-carbon economy. It's framed as both a climate solution and an economic stimulus, promising millions of high-wage jobs in green sectors. Goodman, however, highlights the economic pitfalls. Drawing from public choice theory, he notes that government-directed investments often lead to inefficiencies—think Solyndra, the solar company that received Obama-era loans and went bankrupt. Markets, he argues, are better at allocating resources through price signals; subsidies distort them, picking winners and losers based on political whims rather than viability. Moreover, the Deal's scale—estimated at $93 trillion over a decade by some analyses—could crowd out private investment, inflate national debt, and trigger inflation. Goodman points to Europe's energy crisis, where aggressive green policies have led to higher energy prices and reliance on imports, as a cautionary tale.

Beyond specific policies, Goodman delves into the philosophical underpinnings. The New Left often views economics through a lens of power dynamics, influenced by thinkers like Michel Foucault and modern critical theory. Inequality isn't just an outcome of markets but a structural injustice perpetuated by them. This leads to calls for "degrowth"—intentionally slowing economic expansion to prioritize sustainability and equity. Goodman contrasts this with neoclassical economics, which posits that growth, driven by innovation and trade, lifts all boats. He cites data from the World Bank showing how market-oriented reforms in countries like China and India have pulled billions out of poverty. The New Left's approach, he warns, risks romanticizing poverty by downplaying the role of incentives and property rights, which Nobel laureate economists like Friedrich Hayek argued are essential for prosperity.

Goodman doesn't dismiss the New Left's concerns outright. He acknowledges real issues like wage stagnation, corporate monopolies, and climate change, which free markets haven't fully addressed. Antitrust enforcement, for instance, could tackle Big Tech's dominance without overhauling the system. He advocates for market-based solutions, such as carbon taxes over mandates, which allow flexibility and generate revenue for rebates. Education reform, emphasizing school choice and vocational training, could better prepare workers for a changing economy than job guarantees. On healthcare—a frequent New Left target with proposals like Medicare for All—Goodman suggests consumer-driven models with health savings accounts to empower individuals rather than centralize control.

Critically, Goodman explores the political economy of these ideas. The New Left's rise coincides with populism on both sides, but its policies could exacerbate divisions. High taxes and regulations might alienate moderates and businesses, leading to gridlock or backlash, as seen in the 2022 midterms where economic anxieties fueled Republican gains. Internationally, adopting isolationist or protectionist stances—another New Left tendency—could harm global trade, which economists like Paul Krugman (no conservative) have shown benefits consumers through lower prices.

In wrapping up, Goodman posits that the New Left's economics, while innovative, often repeats historical errors of overestimating government's competence and underestimating markets' resilience. He calls for a renewed appreciation of classical liberal economics, updated for modern challenges. Policies should harness human ingenuity, not suppress it through top-down controls. As America grapples with post-pandemic recovery and geopolitical tensions, the debate between these visions will shape the future. Will we embrace redistribution at the cost of growth, or seek inclusive prosperity through freedom? Goodman leaves readers with a provocative thought: true progress comes not from fighting capitalism, but from refining it to serve all.

This extensive examination underscores the tensions between idealism and pragmatism in economic policy. By dissecting the New Left's proposals against empirical evidence and economic theory, Goodman provides a roadmap for thoughtful discourse in an increasingly polarized era. (Word count: 1,048)

Read the Full Forbes Article at:
[ https://www.forbes.com/sites/johngoodman/2025/07/22/economics-and-the-new-left/ ]