As I mentioned yesterday, the nuts and bolts of an Obama economic policy are much more market-oriented than the MSM has led us to believe — to the economic right of Clinton for sure and possibly to the right of McCain (depending on whether you see another tax cut paired w/ a debt orgy as market-oriented or not). Now, David Friedman (the anarchocapitalist son of Milton Friedman) is coming out favoring Obama over McCain:

Perhaps I am too optimistic about Obama, but I do not think he is going to turn out to be an orthodox liberal. There is a group of intellectuals connected with the University of Chicago who have accepted a good deal of the Chicago school analysis but still want to think of themselves as leftists. They are, as I see it, trying to construct a new version of what “left” means. Examples would be Cass Sunstein and Austan Goolsby, both at Chicago, and Larry Lessig, who used to be there.

Sunstein describes himself as a libertarian paternalist, meaning that he wants to take advantage of elements of irrationality in individual decision making to nudge people into making what he considers the right decisions, while leaving them free not to if they so wish. Goolsby, judging by webbed pieces of his I’ve read, is a pro-market economist who happens to be a Democrat, rather like Alfred Kahn, who gave us airline deregulation under Carter. He is also Obama’s economic advisor. I do not agree with all his views—for details of one disagreement see an earlier post—but I like them better than the views usually supported by Democratic politicians and their advisors.

Obama himself, while obviously constrained by the fact that he is trying to get nominated, has occasionally let things slip that suggest a more libertarian view than typical of liberal senators. At one point he said something mildly favorable about school vouchers, retreating rapidly under pressure from the teachers’ unions, and similarly with marijuana decriminalization. His most visible disagreement with Clinton is over her plan to force everyone to buy health insurance. He appears uncomfortable with that degree of coercion, even though he is willing to use the less direct version—taxation to subsidize the insurance that he thinks people ought to have.

Bush was elected on a pro-market, small government, platform and proceeded to greatly expand the size of government—and not only in the form of military spending. His view of the legitimate power of the executive branch, including the authority to deliberately violate federal law, I find frightening. Perhaps, if we are lucky, Obama will turn out to be the anti-Bush.

Personally, I don’t see any political reason why Obama wouldn’t take market-based approaches to achieve liberal goals, as (1) it would capture centrist voters wary of intrusive government programs and (2) be more likely to be a policy success.

Examples of possible “market-based approaches” (I apologize if I’m using the term too loosely) could include carbon surcharges paired w/ tax cuts (the Gore “green tax shift“, his only half-decent policy idea) instead of carbon caps/bans (the McCain approach), payroll tax cuts, make savings and investment tax-deductible from the bottom bracket up (tax savings are based on the payer’s lowest tax bracket, not the highest), hard money (inflation is a tax on the poor), eliminate corporate taxes and regulation that favor big firms and drive up the cost of consumer goods, replace the patent system with a prize system or patent buy-outs (the latter advocated by the Independent Institute), and a host of other policies.

As Mark at Publius Endures recently wrote, the difference between classical liberals and modern liberals is a question of means, not ends — and Obama’s history indicates he is willing to consider alternative approaches to achieve his liberal goals.