Cooperative Liberalism: The new form of Liberalism from 2020s onward

In order to defend Liberalist philosophy and ethics in the current world socioeconomic environment, we, Liberalists, need to introduce a new form of political ideology.  As stated in the previous blog posts, the laissez-faire policy which Classical Liberalists, Libertarians, and the Objectivists claim for no longer stimulate the free market competition.  

 

1. Equality of the opportunity requires a certain degree of the equality of the outcome

The world economy has already become so complex and bureaucratic and requiring the huge economic scale to compete against each other. Only the economic agents with the significantly high capital investment advantages may survive in the current market economy.  Therefore, the world market in general tends to be almost always the oligopoly while some markets are even in the monopoly or the monopsony. 

In order to encourage the competition, the positive intervention by the public sector is more likely to be required than the past.  In the past, letting all individuals do alone in a natural competition could often stimulated them to form a diverse market competition providing the equality of opportunity.  By contrast, the new entrants in most of fields are struggling to compete without any supports because the capital requirement for joining the market has become too high for market entrants.

Firstly, private banks hardly lend money for new entrants because the risk premium of investing to new ventures is high nowadays.  The already established enterprises and economic agents in one industrial field have already secured their capital required for survival in the market of this industrial field.  On the other hand, small enterprises and individual entrepreneurs need a high level of investments from the others to enable them to survive there.  Private banks prefer lending already established big enterprises and rich entrepreneurs from the other field to lending those ventures and entrepreneurs with little capital.

Secondly, the opportunity of individuals joining market requires a significantly higher skill level than the past.  The education (Not only the higher education but also the job experiences and the transferable skills) for allowing individuals to compete with the already established corporations and the other talented educated individuals from all over the world.  The tertiary education such as college education has become necessity rather than complementary so individuals usually invest their time and income to graduate from a college/university.  Moreover, individual economic agents are expected to have both experiences and skills on the top of studying for their tertiary education.  All in all, the education requirement for surviving in the market competition is so severe that it depends on not only the talent but also the naturally endowed fortune of individuals are mandatory to not only win but also survive there.

Thirdly, the information symmetry for both investment and moral is a big concern. Because the world infrastructure such as transportation links, the information technological networks, and the production optimisation and logistics, there is almost no industry still robustly growing and certain for individuals to gain a profit from by investing them.  Furthermore, while the access to various abundant information resources is highly available nowadays, individuals are often confused with their right decision and the right duty to make. The ethical principle does no longer seem to be universal for all the human individuals to follow so they are often confused to derive their moral decision and ethical practices.  

On the top of these aforementioned situations, the current development of the artificial intelligence (AI) is expelling human individual workers, of not only the blue collar jobs but also the white collar jobs, from their employment. As Yuval Noah Harari described in his book 21 Lessons for the 21st century, human individuals are furthermore divided to the aspiring elites and the non-working useless classes.  In case of this situation, the laissez-fair claimed by Classical Liberalism and Libertarianism is quite likely to let human individuals to lose their life. 

Overall, the positive intervention by the public sector will be all the more demanded by the majority individuals.  The government role will eventually be big to satisfy the greatest sum of individuals' happiness in their life.  The next chapter explains the idea to prop up individuals' liberty and autonomic right while

 2. Big roles of the public sector while promoting individual liberty

As same as Libertarianism, this new form of Liberalism regards highly of the pluralism of freedom of expression, diversity of beliefs, ethnic groups, genders, and any physical and mental trait, cohabiting together. Although the laissez-faire economic policy could encourage such a pluralistic society, the laissez-faire nowadays contains a significantly high risk of impoverish the majority individuals without some degree of the positive intervention.  The paradigm of ethics in politics is dramatically shifting.

Our society now needs a positive intervention to allow them cohabiting without fear of losing their income and means of living.  The majority of individuals can be easily impoverished by losing their job or the stagnation of their income growth due to the aspect mentioned in the aforementioned chapter.  Offering a high degree of liberty and autonomous right, the new paradigm claims for allowing individuals without merely judging them by means of the industrial and commercial productivity.  

The new form of liberalism insists on a high provision of public goods and services whose welfare gain is shared among all the civic individuals. The shared economy is growing so that the demand of public goods and services is becoming notably significant. Furthermore, the flexible and inexpensive access to well-managed public goods and services may reduce individuals to cut their living costs so that it allows individuals and institutes including business enterprises to spare their income. 

There is another reason why the public sector is becoming all the more important. Majority of individuals nowadays tend to lose their traditional communities such as family and company.  There are many individuals having lost their interesting in marriage and these family members are becoming more individualistic than family oriented. The companies administration model nowadays are becoming more capital intensive than the labour intensive.  In order to compensate for their loss of their traditional community, the public sector is going to function as their substitute community looking after individuals. 

To enable the public sector to provide individual citizens with public goods and services with a high quality accessible level, the sufficient tax revenue is inevitably essential. This is what many supporters of the Classical Liberalism, Libertarianism, and the Objectivism because it enforces involuntarily sacrifice their income/property. However, in order to provide the majority of civic individuals with their liberty and right to live, it requires to forfeit some degree of economic liberty at the minimum optimum level avoiding too high taxation to hinder economy. 

This public management policy sounds like socialism.  Yes, this new form of Liberalism is admitted to be a part of Socialism although it is prevented from turning to be a radical form of socialism.  The radical forms of socialism such as Communism and State-Socialism excessively penalise the high income earners by accusing the market economy.  By contrast, this new form of Liberalism still aspires to maintain the robustly growing market economy combined with the optimum positive planning by the public sector.  In another word, it allows the high income earners to contribute back to their community of individuals having enabled them to earn their high income to thank their belonging economy and society.

The biggest concern of allowing such a significantly major role of the public sector such as government is the possible violation of their authority.  In many socialist nations with an obsolete socialist political stance, the power of government encourages their corruption with their violation of their public management authority.  In order to discourage their power violation, the public sectors such as government have to be constantly monitored and moderated through their citizens' view.  Many welfare state nations in Europe put their countermeasures against this authority violations, they maintain a high degree of the freedom of expression, the guarantee of individuals' autonomic right by questioning any authorities, and the freedom of media coverages which whistle-blow their public sector bodies.

 

3. Importance of the Progressive Tax and the Public Sector Provision

This new form of Liberalism regards highly of individual liberty and each individual's autonomous right as same as Classical Liberals, Libertarians, and the Objectivists.  At the same time, it regards highly of the cohabitation of unique individuals living in society so that individuals are encouraged to cooperate together at the same time. 

For example, in order to develop their convenient life style, the public sector growth is typically demanded. It satisfies each individual own egoistic interest even after sacrificing their tax contribution by splitting some share of their income. 

The tax should be progressively taxed due to the degree of the negative effect on individuals' utility varying across their income level.  The utility declining rate of the lower income individuals is significantly higher than the higher income counterparts.  Therefore, in order to increase the total sum of their utility, the progressiveness of the taxation is crucially important. 

There is a claim that the progressive tax may encourage the high income earners escaping from where they contribute to the public sector finance.  However, another study shows that the tax rate change is more likely to affect the lower income earners than the higher income earners.  The background aspect is that the high income earners gain benefit from taking their geographic advantage of their residence while the lower income earners merely exchange their own physical labour with their income.  

Even though the high income earners pay a high share of taxation, they can benefit from the safe and culturally well-off environment where the public sectors are eager to prop up such an environment.  In addition, the high public investment toward the public education will increase the abundant supply of the human capital which individual citizens may produce a high income together by sharing the benefit of these public goods and services in this region.  This place may become attractive for rich private investors to invest for their high return.  All in all, the overall return of paying the high tax for the higher income earners will be high enough to cover their cost. 

For the low income earners, it is important for them to access their fair opportunity for growing their income to satisfy their utility.  Sharing the public goods and services is necessary for them to save their income as well as to encourage their accesses to education, public transportations, high security, and information resources. 

In addition, it might be also important to provide enough lump-sum state benefits especially for the deprived individuals.  The old Liberalists often claimed for the meritocracy where all individuals compete to achieve with their own efforts and skills with a minimum support.  By contrast, because the income gap is widened and the access to the competition is limited far more than the past, a certain degree of the equality in outcome is all the more unavoidable to achieve the equality in opportunity. 

4. Cooperative Liberalism: Reformist rather than Revolutionary

This new form of Liberalism encourages individuals to cooperate to establish the environment for their liberal life style satisfying the greatest sum of individuals' happiness as well as offering the safety and the opportunity for the least fortunate member. Therefore, it is called Cooperative Liberalism. 

Cooperative Liberalism  is not a collectivism such as state-socialism and communism: It still retains the market economy, private property right, and financial industries' capital market operations.  It still retains the philosophy of Liberal Economism which regards highly of liberal rewards for each individual's contribution and merit to another individual or the whole market.

This policy actually preserves the market economy just with some positive intervention into it instead of replacing it with another by revolution.  The degree of the intervention is tuned depending on each situation. Instead of establishing a rigid socioeconomic political system based on the perfectionist philosophy, it admits the imperfection of economy and society of the world. 

The vector direction of Cooperative Liberalism is resemblance to Anarchism which defies both the excess government autocratic intervention and the big corporations' monopoly and exploitation.  As same as Anarchism, Cooperative Liberalism attempts to protect individuals' autonomous right, oppose unethical laws and orders established by both government autocrats and corporate tycoons, and individuals' voluntary cooperation within their spontaneously unified community.

At the same time, unlike Anarchism, Cooperative Liberalism still relies on government and bureaucrats' rational authorities for the public good and service provision and encourages the private enterprises' profit maximisation as long as individuals' liberty is protected and encouraged.  These institutes will be allowed exist while individuals are allowed to question these authorities against their power violation. 

All in all, Cooperative Liberalism is distinguished from Classical Liberalism (including Libertarianism and the Objectivism) as well as the majority socialism. The closest allies are Social-Democracy (Majority ardent socialists call "Friendlier version of capitalism" and Anarchism (by means of its vector direction; not its vector magnitude).  Cooperative Liberalism attempts to secure and encourage individuals' liberty in terms of the new socioeconomic paradigm of the current and the near future world.