The enemy is not refuted: enough to unmask him as a bourgeois.-Ludwig von Mises, Socialism: An Economic and Sociological Analysis
The trouble in Wisconsin offers an intriguing mix of populism and class warfare from both the left and the right. The right fears that someone will get something for nothing. The left fears that plutocrats are positioning themselves to gorge on the blood, sweat and tears of the working class.
I agree with my friends on the left that there is more at stake than bread and butter, but I disagree on what actually is at stake. What lesson will remain when the shouting dies down and the banners are put away for the next final crisis of capitalism? If were going to have something better than a shouting match, we should get our theory and evidence straight.
In a study for the Economic Policy Institute, economist Jeffrey H. Keefe estimates a 4.8% income penalty for being a Wisconsin government employee after incorporating the value of benefits and controlling for factors like education. His analysis is a clear improvement over raw, apples-to-oranges comparisons between government and private sector incomes that have many on the right so exercised. But it still overstates the case because it doesnt address some other factors that might explain the wage gap.
People dont live on wages and benefits alone. A lot of us (college professors, for example) are willing to accept lower incomes for greater stability, security, job satisfaction and other attributes that are hard to measure. This is probably true of many government jobs. Keefe points out that government jobs tend to be more stable, and this almost certainly explains a large part of the gap. Indeed, in an article that appeared in the Wall Street Journal responding to work from scholars at the University of California at Berkeley, Andrew Biggs of the American Enterprise Institute and Jason Richwine of the Heritage Foundation argued that according to their estimates, government job security is equivalent to about a 15% increase in compensation. Further, they point out that post-retirement health care and defined-benefit pensions are more lucrative than what comparable private sector workers get. Government workers might not be lavishly overpaid, but they certainly arent brutally exploited either.
Disagreements aside, this kind of exchange is a step toward the civility that people want, or at least say they want. Too often, people will proceed by attacking the people making the arguments rather than the arguments themselves. Conspiracy theories make excellent grist for the rhetorical mills of commentators across the spectrum who agree with Karl Marx that (t)he history of all hitherto existing society is the history of class struggles, but they are intellectually lazy. Ill borrow from Mises again, this time from Theory and History: reference to a thinkers bias is no substitute for refutation of his doctrines by tenable arguments. Tenable argumentsnot ad hominem attacks and conspiracy theories about funding from labor unions, corporations, governments or the Koch brothersshould be the coins of the realm.
I agree with Joseph Schumpeter that the first thing a man will do for his ideals is lie, and I agree with Aeschylus that (i)n war, truth is the first casualty. If truth is the first casualty of war, then the pursuit of truth is the second. We move civilization backward when we begin from the assumption that anyone who disagrees with us is arguing in bad faith.
Disclosure: I run student programs at Rhodes College that are funded by a grant the Charles G. Koch Charitable Foundation. I have done work in the past for organizations that have received money from the Koch Foundation and a veritable legion of other donors, and I expect to do additional work for them in the future. If I were looking to sell out, though, I would probably follow Arnold Klings advice.
Art Carden is a Research Fellow at the Independent Institute in Oakland, California and an Associate Professor of Economics at Samford Universitys Brock School of Business.