2024

LIBERALISM WORKS:

Only Economic Freedom Pulls People Out of Poverty (Vincent Geloso, June 20, 2024, AIER)

In an article recently accepted at Journal of Economic Behavior and Organization, James Dean and I argue that the potency of markets in alleviating poverty is deeply underestimated. As such, we shift the focus to the benefits of economic freedom — the alleviation of taxation, the shrinking of government, the reduction of labor market regulations, and the protection of property rights.

Four mechanisms connect greater economic freedom to poverty alleviation. The first is enhanced economic growth and job creation. A freer economy attracts more businesses and investments. Fewer regulations and lower taxes reduce the cost and complexity of starting and operating businesses, which encourages entrepreneurship and leads to job creation and economic growth. This means more opportunities for the poor to climb out of poverty. Second, lower taxes allow for greater rewards to effort, enhancing motivation. Third, the absence of regulation means that many regulatory barriers — such as costly occupational licences or business permits — are eliminated, which allow for new pathways out of poverty to emerge. Fourth, economic freedom flattens barriers to geographic mobility, such that people can move to places of greater opportunity. A contemporary example of this mechanism is land-use regulations in cities which restrict the supply of housing. By increasing the price of housing, these regulations make cities inaccessible to the poor, even if they are hubs of economic opportunities. As such, people are stuck in areas with limited economic opportunities. The removal of these barriers also complements the effect of lower taxes, as factors that demotivate people from trying new pathways are removed. As such, their removal acts as motivator.

Together, these four mechanisms produce an environment where the poor are given the necessary room to exert agency and improve their lives through their own efforts. The repeated result is sustainable poverty reduction. Notice that nowhere does this negate the possibility of some targeted redistribution — think of Milton Friedman’s basic income proposal or school vouchers — that help pull out the poor out of poverty. In other words, these mechanisms mean that we stop pushing the poor down!

BEFORE THE FLOOD:

Is This the Man Who Could Topple Viktor Orbán? (H. DAVID BAER, JUN 20, 2024, The Bulwark)

Still, Magyar has learned a few things from the old man about mass communication. He has been brilliant at reappropriating Hungary’s national symbols—something the liberal opposition could never do—in a way that stabs at the heart of Orbán’s image. And in at least one respect, Magyar has outperformed the master. Unlike Orbán, whose appreciation for Hungarian cultural achievements appears to end with Ferenc Puskás and the 1954 World Cup, Péter Magyar loves poetry.

And poetry, much more than soccer, plays an important role in Hungarian national identity. The language Hungarians speak is not Indo-European in origin, which separates it from every other European language but Finnish and Estonian. To cultivate Hungarian identity is to cultivate the Hungarian language, and poets are the best cultivators of all. Hungary’s great poets are national icons.

When Magyar first entered politics, he formed an organization named after a verse from a poem by Sándor Petőfi, who died in battle fighting for Hungarian freedom in the Revolution of 1848. Magyar later linked his organization to the political party that abbreviates its name as TISZA. Tisza is also the name of a major river in eastern Hungary, about which Petőfi wrote another poem. The Tisza river flows slowly along a low gradient, making it prone to flooding. In Petőfi’s hands, the Tisza became a metaphor for the Hungarian people, who can be misunderstood as pliant and passive.

Watching the sun set over the still river, the poet notices the light’s amber rays striking the trees, as if they “were burning and flowing with blood.” Turning to the river, he asks, “Ah poor Tisza, why do they mistreat you / and speak of you harshly / you are the gentlest river on earth.” When he’s awakened by the pealing of alarm bells a few days later, the narrator exclaims: “Here comes the flood! / And wherever I looked I saw a sea / breaking its banks in a rage …. Ready to swallow the world.” The Hungarian people, Petőfi suggests, are like the Tisza river, silent and long-suffering, until, mistreated enough, they rise up in rage like a flooding river.

That Magyar thought to link his party to Petőfi’s poem was a communications masterstroke. It captures perfectly the mood in Hungary. Despite his electoral dominance, Orbán is not well-loved. He draws a sizable portion of support from the perception that his regime is inevitable. This has led to political apathy and a feeling of resignation, an attitude not all that different from what existed in the later decades of communism. If a viable political alternative ever emerged in Hungary, it could profoundly alter the feeling in the country. If people start to believe they really can be freed of Orbán, they might indeed rise up like a raging river.

At Tisza party rallies, alongside a sea of Hungarian flags and the sound of folk songs, the crowds chant, “The Tisza is flooding” (Árad a Tisza), which rings nicely in Hungarian. Indeed, “Árad a Tisza” could be well on the way to becoming a nationwide slogan of political resistance.

The Tisza (English)

When in the dusk a summer day had died,
I stopped by winding Tisza’s river-side,
just where the little Túr flows in to rest,
a weary child that seeks its mother’s breast.
Most smooth of surface, with most gentle force,
the river wandered down its bankless course,
lest the faint sunset-rays, so close to home,
should stumble in its lacery of foam.
On its smooth mirror, sunbeams lingered yet,
dancing like fairies in a minuet;
one almost heard the tinkle of their feet,
like tiny spurs in music’s ringing beat.
Low flats of yellow shingle spread away,
from where I stood, to meat the meadow hay
where the long shadows in the after-glow
like lines upon a page lay row on row.
Beyond the meadow in mute dignity
the forest towered o’er the darkening lea,
but sunset rested on its leafy spires
like embers red as blood and fierce with fires.
Elsewhere, along the Tisza’s farther bank,
the motley broom and hazels, rank on rank,
crowded, but for one cleft, through which was shown
the distant steeple of the tiny town.
Small, rosy clouds lay floating in the sky
in memory-pictures of the hours gone by.
Far in the distance, lost in reverie,
the misty mountain-summits gazed at me.
The air was still. Across the solemn hush
fell but the fitful vespers of a thrush.
Even the murmur of the far-off mill
seemed faint as a mosquito humming shrill.
To the far bank before me, within hail,
a peasant-woman came to fill her pale;
she, as she brimmed it, wondered at my stay,
and with a glance went hastily away.
But I stood there in stillness absolute
as though my very feet had taken root.
My heart was dizzy with the rapturous sight
of Nature’s deathless beauty in the night.
O Nature, glorious Nature, who would dare
with reckless tongue to match your wondrous fare?
How great you are! And the more still you grow,
the lovelier are the things you have to show!
Late, very late, I came back to the farm
and supped upon fresh fruit that made me warm,
and talked with comrades far into the night,
while brushwood flames beside us flickered bright.
Then, among other topics, I exclaimed:
“Why is the Tisza here so harshly blamed?
You wrong it greatly and belie its worth:
surely, it’s the mildest river on the earth!”
Startled, a few days later in those dells
I heard the frantic pealing of the bells:
“The flood, the flood is coming!” they resound.
And gazing out, I saw a sea around.
There, like a maniac just freed from chains,
the Tisza rushed in rage across the plains;
roaring and howling through the dyke it swirled,
greedy to swallow up the whole wide world.