All politics involves tradeoffs. The source of these tradeoffs is the contradictions that materialize when the core objective is political hegemony. Partisan political agendas can foster imbalances of societal rights relative to individual responsibilities. Subsidizing entitlements for political patronage to gain a mandate oftentimes contains the seeds of political self-destruction.
These tradeoffs are reflected in the liberal and conservative platforms. Broadly, liberals believe in an evolutionary constitution and in the redistribution of wealth through government programs. Conservatives are strict constructionists, who strive to establish equity through individual incentives and the rule of law. The intent of this analysis is not to arbitrate "left" versus "right" political positions, but to develop realistic constructs from which to develop political strategies that rationally balance societal rights and individual responsibilities.
The liberal platform has been summarized by the French motto: "Liberte, Fraternite, et Egalite" (freedom, fraternity, and equality). "Liberte" begets liberals who desire freedom of choice. "Fraternite" begets either socialists or communists that desire a classless society. The end-condition for both groups is "egalite." The difficulty that liberals face is that tradeoffs are required to achieve these disparate objectives. For example, their utopian desire for a classless society is conflicted by those who must be subsidized because they have made bad choices.
Liberals focus on average rewards, in which all members of society receive similar rewards, independent of effort. This focus maximizes societal participation, but fails to maximize profit or efficiency. Socialists pervert the income statement through declaring an unearned societal dividend (i.e., habitual welfare), while contemporary communists distort the balance sheet through some variant of a "takings" violation (i.e., prohibiting smoking in bars). The redistribution effort, intended to optimize consumption, tends to become institutionalized as corruption as critical mass approaches. The existing Social Security structure, perceived by many as an unfair distribution of wealth, is an example of a redistribution effort that has failed to meet its potential.
The conservative platform can be segmented by classifying those focused on the past, present or future. Those focused on the present are engaged in pursuing success in our competitive society, where success is motivated through incentives to create wealth, property rights that reward success and the rule of law to enforce contracts and protect property. Conservatives tend to employ a marginal reward model to maximize profits and efficiency. Too often, however, those who are unable to compete find themselves marginalized from participating in societal benefits and tend to focus on the past or future.
Those focused on the future transcend present difficulties for promises of religious rewards in the hereafter. It is best left to clerics to define the heavenly reward system; yet too great a focus on religious conservatism can lead to cultural fundamentalism, a major source of difficulty in the Middle East.
Those focused on the past strive to maintain regulatory systems that provide protection from competition, allowing the continued annuitization of entrenched cash flows. Regulation represents normative or consensus decision-making that is largely a political power play between competing interests. Those who fight to maintain antiquated regulatory systems are practitioners of market fundamentalism. These regulatory systems become societal non-compete clauses that favor the vested interest of those who preserve the status quo. One glaring example of the dangers of market fundamentalism is the problem that arose when Western idealized precepts of market fundamentalism were introduced to the realities of the post-Soviet successor states.
The challenge for liberal politics is to achieve a satisfactory minimum standard of living for the average citizen. Should this fall short, liberal politics tend to fall victim to elitist errors of co-mission that result in the socio-economic problems of corruption and economic stagnation. The challenge for conservative politics is to ensure a wide distribution of rewards to prevent those focused on cultural or market fundamentalism from attaining critical mass. Should this not occur, conservative politics tend to fall victim to errors of omission. These result in the socio-economic problems of class warfare and the undue concentration of wealth.
In our opinion, political success flows from rationally addressing these challenges. Self-analysis permits the development of political platforms that have wide appeal to voters, most of whom are uninterested in ideological nuances. Unfortunately, many on the left and right choose the path of vilification instead of such an analysis. One of the sillier footnotes to the year 2003 was an academic study, entitled ""Political Conservatism as Motivated Social Cognition," that was published in the American Psychological Association's Psychology Bulletin. This study claimed to identify the underlying psychological motivations associated with political conservatism. The underlying motivations that the authors identified included "fear and aggression," "dogmatism and intolerance of ambiguity," among other motivations.
The authors grouped former President Reagan and talk-show host Rush Limbaugh together with Hitler and Mussolini. Ignoring collectivist economic policies, this contrived construct went so far as to argue that Stalin and Castro could be perceived as political conservatives. While wrapped in academic language, the tone of the study suggested a partisan hit job. Not surprisingly, the study was widely scorned on right-wing web sites and by conservative politicians. Yet vilification is not unidirectional. Some conservatives unfairly label liberals as "unpatriotic" or "un-American." The degree to which partisan politics on both sides of the debate in the United States have denigrated into vilification instead of debate is startling.
Why vilify? One explanation is that vilification and ad hominem attacks that seek the moral imperative are the method through which the intellectually lazy attempt to win arguments. After all, if conservatives are fascists or if liberals are unpatriotic, then who could possibly support them, regardless of the strength of their arguments? The endemic vilification of political opponents does not so much suggest that many conservatives and liberals truly believe each other to be villains as it indicates the fragility of their own worldview.
While the vilification pep rally may buoy partisan spirits, the likelihood of it resulting in electoral success is questionable. Listeners to Rush Limbaugh will find comparisons to Hitler ridiculous. Similarly, attempts to convince undecided voters that Senator Hillary Clinton is unpatriotic are ludicrous. In this context, vilification resonates falsely.
Of course, not all vilification is motivated by ideological or political considerations exclusively. Any analysis of the incendiary nature of politics in America today would be incomplete without recognizing the degree to which profit motivates vilification. "Preaching to the choir" makes little sense, unless the "choir" is paying upwards of $23.50 per book! Bill O'Reilly, Sean Hannity, Al Franken, Michael Moore and Ann Coulter are all best selling authors with highly entertaining books that mercilessly attack their political opponents. We live in a capitalistic society; hence it should come as no surprise that some politics has a capitalistic agenda. The challenge for those striving for political success is to continue to focus on addressing the challenges and tradeoffs associated with developing political platforms, instead of resorting to vilification strategies.
Stephen A. Boyko is President of Global Market Thoughtware, Inc., an international consulting company. He has over twenty-five years of business and financial experience in a broad range of financial service industries.
Aron A. Gottesman, Ph.D., is an Assistant Professor of Finance at the Lubin School of Business at Pace University, and is the Associate Director of the William C. Freund Center for the Study of Securities Market.