Mayor Pete's understanding of economic liberty is weak tea indeed

The American Enterprise Institute's James Pethokoukis makes some observations about a recent interview of Pete Butigieg by CNBC's John Harwood, and they're worth your considering, but I have my own, which I'll share momentarily.

First, the relevant part of the interview:

Democratic presidential candidate Pete Buttigieg, mayor of South Bend, Indiana, said some confusing things — or at least some things that confused me — in an interview with CNBC reporter John Harwood. Here is part of their exchange:

Buttigieg: … The economy is not some creature that just lumbers along on its own. It’s an interaction between private sector and public sector. And public sector policies, for basically as long as I’ve been alive, have been skewed in a direction that’s increasing inequality. And a lot of this is the consequence of what you might call the Reagan consensus. There was a period where even Democrats seemed to operate in this framework that assumes that the only thing you’d ever do with a tax is cut it. That those tax cuts were assumed to pay for themselves. The empirical collapse of that supply side consensus, I think, is one of the defining moments of this period that we’re living through.

Harwood: Why do you ascribe it to the Reagan consensus as opposed to technological change, globalization, movement of capital?

Buttigieg: Well, all of these forces interact. But none of these forces automatically have to make our society more unequal. If anything, globalization was supposed to create more equality among nations.

Harwood: Well actually it has created more equality in the world. It’s taken millions of people out of poverty.

Buttigieg: Sure, it’s lifted so many out of poverty. And by the way, there are ways that it can work for us at home, too. But again, we’re seeing a concentration of wealth and power that skews things in the opposite direction. The fundamental truth is, it turns out a rising tide does not lift all boats. Not on its own. Especially if some of the boats are sort of tethered to the ocean floor. And that’s the kind of pattern that we’ve been on.

As I say Pethokoukis then makes observations - six of them - that are incisive. I particularly resonated with number four:

Fourth, kudos to Harwood for correcting Buttigieg on the impact of globalization on inequality since Buttigieg is seemingly unaware that inequality between nations is experiencing an unprecedented decline. And as Harwood also correctly mentioned, market liberalization across the developing world — particularly China — has brought a billion humans out of extreme property.

But I wish Pethokoukis had addressed the even more fundamental problem with Buttigieg's thinking.

The economy is not primarily an "interaction between private sector and public sector." The private sector is the economy.  Even within the purview of what government puts in place - stuff that is the product of its proper Madisonian function, such as infrastructure, courts, law enforcement and the military - as well as all the stuff that most definitely is not the product of its proper Madisonian function, such as involvement in health care, agriculture and education, it is the private sector that provides the goods and services with which government does its thing. I see this in the countless county commissioners, county council, city council and board of works meetings I attend. To a large extent, they consist of approving contracts with privately owned organizations that do stuff and make stuff.

See, Mayor Pete, the public sector is - or at least ought to be - minuscule in comparison to the private sector. So minuscule that it ought to be folly to juxtapose them. The private sector is really just the sum total of millions of daily agreements made between people and organizations regarding the market value of millions of goods and services.

Which brings me to his trotting out of that business of tax cuts "paying for themselves." That's not the point, never has been, and never should be. The whole argument about government being too big is valid and one important reason why it's wrong to speak in such terms.

But it's not the primary reason why that's wrong. The primary reason is that, to repeat something that LITD says so often that I have to be careful that it doesn't turn into a formulaic talking point,

government ought to have to puke all over itself to justify taking the first penny from any of us, rich, middle-class or poor. 

There is a justification to be made for a small degree of taxation. See the above-enumerated proper functions under a Madisonian framework.

But that's it. The rest of the money you have ought to be yours and immune to government seizure.

Maybe being raised by a Marxist obscured this simple moral truth for Mayor Pete.

But maybe he can get schooled in the process of running for president.