Market Karma
Conservatives seem confused by the dynamics they advocate for
Laura Ingraham, host of The Ingraham Angle on Fox News, is facing mounting public backlash after she joined in the astonishing chorus of conservatives attacking and belittling survivors of the massacre at Marjory Stoneman High School in Parkland, Florida. A pronounced aspect of this backlash has been the financial cost she has suffered as eighteen (and counting) sponsors have left her show.
The most remarkable aspect of this episode is not the brazen insensitivity of her comments, but that the pressure she is facing might actually be strong enough to remove her from the air.
From the top
This recent wave of progressive economic-based activism in the U.S. originated in 2010 with the protest over SB 1070, Arizona’s “Show Me Your Papers” bill, when the state passed harsh anti-immigrant legislation. It prompted several businesses and business leaders, musicians, and sports teams to direct their business elsewhere and speak out against the measure. In response to the boycott, governor Jan Brewer, said, “How could further punishing families and businesses, large and small, be a solution viewed as constructive?” The implication was that organizations and individual consumers who chose to vote with their wallets, as it were, were wrong to do so. Even so, the overall economic impact was negligible, and the bill eventually become law and survived court challenges, largely intact.
After the signing, one survey found that only 51 percent of the country thought that Arizona’s approach was “about right,” with 36 percent saying it went too far, which goes a long way to explain the failure of the boycott. Also at issue is how the population most affected by the enforcement (and inevitable abuses) of the law are disproportionately poor and marginalized and thus easy targets.
More recently, there was a substantial boycott of the state of North Carolina in 2016, over its attempt to force transgender women and men to use the bathroom associated with the sex indicated on their birth certificate. In addition to business boycotts, several state and city governments prohibited non-essential travel to the state. Reverend Mark Creech, executive director of the Christian Action League and anti-alcohol crusader, called opponents of the bill “social terrorists.”
The overall economic impact was large, but insignificant as a percentage of the state’s total budget and revenue. Opinion polls reveal a slight drop in support for the measure, in light of felt economic effects. The law was partially repealed in 2017, after mounting pressure, especially from the National Collegiate Athletic Association (NCAA), which informed the state it would no longer hold national sports competitions there.
Freedom and efficiency
Conservatives tend to not like it when progressives use economic pressure for social causes. They are quick to interpret it as an attack on the First Amendment, which they see as convenient cover for conservative causes.
Perhaps they might be interested in knowing that market-based pressure was championed, or even invented, by none other than Milton Friedman, the hero of free-market economics. For Friedman, economic activity (and with it social relations) could only be coordinated two ways: the voluntary cooperation of individuals or the coercion that we find in the state. He preferred the former.
“By removing the organization of economic activity from the control of political authority, the market eliminates this source of coercive power,” Friedman instructs, in Capitalism and Freedom. “It enables economic strength to be a check to political power rather than a reinforcement.” Unlike the power of the state, which tends toward centralization, economic power tends toward the opposite, which is a boon for freedom.
In fact, the notion that market pressures could be brought to bear on social causes was the rationale Friedman used against government intervention to protect civil rights in the 1950s and 60s. Friedman’s creation of school choice was the remedy he put forth to combat segregation.
In that view, it was unnecessary for government to intervene in what the market would have corrected in due course. Friedman would have agreed with Martin Luther King that the arc of the universe tends toward justice. But it is not because it is moral; it is because it is efficient. In the case of guns, that will mean extra digits in the death count. But as Friedman has it, the government should not be a moral agent, even in response to great tragedy. Ethical problems are individual, not collective, problems.
Market pressures are superior to government regulation in terms of rooting out discrimination, Friedman believed. People will always buy or sell to others regardless of race or religion and would never pay the added expense of prejudice.
Friedman, as any undergraduate student of behavioral economics can explain, was a little too optimistic to think that people would never pay to discriminate, especially if that discrimination means protecting their market position. Racists would be very willing to absorb whatever they might lose by keeping blacks out of a market; in fact, that would be one way we might define racism in an economic sense. It’s the same reason progressives are sometimes willing to pay more money to drive a fuel-efficient car. Not all riders are free. There are also businesses that seek to gain from racism, as with the gun shops that have used anti-Muslim marketing, with products like pig-coated bullets or “Islamophobic” stickers.
Friedman also paid insufficient attention to how economic power can be used to influence the actions of government. It’s true that a free market can support freedom, in theory, but it’s also true that concentrations of economic power, which Friedman was blind to, can co-opt public institutions and offices and do harm to individual liberty.
Of course, most conservatives certainly had no such reservations about these tactics when, for example, they used them against the Dixie Chicks in 2003, for voicing their opposition to president Bush and the war in Iraq. Ingraham’s 2003 book Shut Up and Sing about how all of these horrible liberal elites are ruining everything that’s good and pure about America. She echoed this sentiment again recently in suggesting to LeBron James that he “Shut up and dribble,” after the basketball star had the nerve to speak his mind about political matters.
The difference between then and now is that the conservative agenda is highly unpopular. Whether it’s with regard to guns, health care, immigration reform, or the environment, the progressive agenda runs the table. The NRA is so extreme that its own members disagree with many of its positions, especially comprehensive background checks, which is backed by 69 percent of its members, according to one recent poll.
The track record of boycotts is hardly impressive, but things could be changing for progressives, thanks to the mobilization of young voters. It would be a foolish CEO who sides with a network whose average viewer is 66 years old over the ascendant generation of fearless activists, who will be buying (or not buying) products and services for decades to come. This is the reason, we might surmise, why companies like Dick’s Sporting goods, which took steps to limit its sale of guns, and others are rushing headlong into delicate political controversies in previous years that would have sought to avoid. They might take a short-term hit, but building a brand for future consumers is worth the gamble.
Adam Smith is mostly known at the author of The Wealth of Nations. But he considered himself to be a moral philosopher. In A Theory of Moral Sentiments, Smith presented sympathy, not self-interest, as the most fundamental attribute of human nature. He understood the importance of reputation and shared interests in a properly functioning market. Economic activity, like all social relations, is not zero-sum, as economists are quick to remind us. But neither are they finite. They are infinite set of exchanges and interactions informed and regulated by our individual and collective needs and wants.
Turning tides
Conservatives have seen this tide turning. Indeed, the GOP has been running on fumes since it vaulted Sarah Palin to prominence as a desperate play to win the White House in 2008. Any rational, normal political party would have course corrected years ago. But changes in campaign finance law have meant that politicians running for office have more incentive to go where the money is, irrespective of the will of its constituents. When it comes time to leave office, by choice, calculation, or a rare defeat, officeholders can be sure to land on their feet.
History always manages to find people to be on the wrong side of it. Joey Wulfsohn, writing for The Federalist, called out Ingraham for her contemptible tweet but targeted David Hogg for his “demagoguery and blatant hypocrisy,” which he claims is actually worse than Ingraham’s offense. Rick Santorum suggested (then later sort of recanted) that concerned students should learn CPR if they really wanted to do something helpful. And Ted Nugent, who never misses a chance to say something stupid, accused the Parkland students of being “soulless” and “poor, mushy-brained children.”
Yet, unlike the authors of the other deplorable things said about the Parkland kids and their politics, Ingraham has offered up an apology. But because it came after some advertisers left her show, it has the taint of insincerity. Even so, it’s more likely that her original comments were insincere, that she was merely touting the extreme party line for attention or ratings and the profit that comes with it.
In either event, Ingraham is in a tough spot — as she goes on hiatus for a week. Even if she returns to her show, she will be scrutinized by progressives and advertisers in a way that will make her ineffective to the powers that be at the network. She will likely be taken down by one side or the other.
But having a cable TV show is not a civil right; having a public platform is not a civil liberty. It’s certainly not as bad as watching your classmates and teachers being gunned down by a maniac.
As Friedman has it, “Given competition among employers and employees, there seems no reason why employers should not be free to offer any terms they want to their employees.” In other words, Fox News is free to fire Ingraham for whatever reason, whenever they see fit. For her part, Ingraham is free to seek employment elsewhere.
This is what the market looks like, but it’s always painful when your ideology bites you on the ass.
