Conservatism is fatally flawed
June 14, 2009 – 6:47 pm by JohnIs capitalism fatally flawed? asks Paul McDonnold in the Christian Science Monitor.
Recessions, like hurricanes, leave wreckage behind—bankrupt businesses, high unemployment, and sometimes even tattered philosophies.
No, they don’t. Inflationary booms leave bankrupt businesses and unemployment, not to mention devalued currency, behind. Recessions correct those mistakes. The only “tattered philosophy” I’ve noticed is semi-small-government “conservatism,” whose proponents have decided they actually love big government. Two other camps, the one that’s been saying all along that big government is great and the one that’s been denouncing all government activities, are still going pretty strong and consistent.
The philosophy of economic conservatism has long been one of unquestioned deregulation. Conservatives have considered it as a way of unhooking government leashes that the economy strains against, setting it free to run at full speed and lead us to wealth.
Well, that’s certainly how the story goes, and I’ll grant that many economists and politicians labeled as conservative once railed against the tax-and-spend-and-regulate policies of the Democrats. But their influence in the conservative movement has been waning for a good many decades now. I mean, I don’t know of any conservatives who have been calling for the abolition of the Federal Reserve, Fannie Mae, Freddie Mac, numerous cabinet departments, or federal agencies. They still seem to oppose tax increases, but they don’t oppose the spending or the regulation.
But this philosophy seemed to collapse in the moral and financial wreckage of today’s recession. Like many conservatives, I was left facing uncomfortable questions, chiefly: Is capitalism itself fatally flawed?
Obviously he is not paying attention. Since McDonnold, similar to Kel and I, seems to be using the word “capitalism” to refer to a generally free economy, how could he possibly confuse 21st-century America with a free-market society? Regulations, spending, and devaluation of the dollar are at greater levels than they have ever been. Maybe you’ve read statistics about how many pages are added to the United States Code every year or every decade. It isn’t slowing down. It was increased dramatically during the reign of George W. Bush. So was the funding to dozens of executive and regulatory agencies. Those laws mean something and those parasitic bureaucrats are doing something. They reduce the freedom of people to work, trade, and live as they please within the borders defined by the Imperial Federal Government. It isn’t freedom and it’s been getting less free with each passing year.
McDonnold then goes over some of Karl Marx’s theories about why capitalism is fatally flawed. From what I know, it is an accurate representation of Marx’s theories and I’ll give him credit for citing some ideas of Marx other than “from each according to his ability, to each according to his need.” I think my objections to Marx here would be standard libertarian assertions: the concentration of capital into few hands comes along with the concentration of power into few hands, which is facilitated by Statism and hindered by libertarianism.
As recently as 1980, the US was a nation of mostly small- and medium-sized banks. Employees knew, often on a personal basis, both the depositors and the borrowers. Deposits that were not loaned out had to be kept in low-risk investments such as government bonds.
People who claimed the mantle of conservatism dismantled the regulations behind this system. This shook the industry. Through mergers and acquisitions, resources were centralized. The number of banks declined. Huge conglomerates arose and created the complex world of global finance that later collapsed. This is capitalism’s dark side of impersonal corporations, recessions, and class conflict.
I really don’t buy it. And not because I have this need to object to any and all blame that anyone places on smaller government/more freedom; it’s because we don’t have smaller government and we aren’t more free. This should be obvious to anyone. The president has more powers than ever and the number of laws governing business is ever-increasing. I will always consider the possibility that the particular governmental function that was eliminated or the order in which interventions were eased can yield negative consequences—for instance, I’ve read that some type of tax break relating to home ownership might have induced more people to buy homes they couldn’t afford. However, the correct response to such problems is to keep increasing our personal and economic freedom or to return as many freedoms as possible to us at once, because the government intervention was the problem in the first place.
The problem with conservatives is that they very obviously don’t see government intervention as a problem and they don’t see personal or economic freedom as a solution to anything. Anyone who tells you otherwise is lying or ignorant. Stop listening to what they say and look at the facts. Their record speaks for itself.
Another famous thinker, Adam Smith, saw a different side of capitalism. Seven decades before the “Manifesto,” he wrote “The Wealth of Nations,” about the capitalism of his day. It was one of small, decentralized firms—butchers and bakers. The driving force was not blind greed but a healthy interest in improving one’s own lot by helping others. It was a capitalism that looked a lot like the banking sector before deregulation.
Oh, I must have missed that historic sea change in global monetary policy where the Federal Reserve was abolished, along with the SEC, the FTC, and the FDIC, free coinage was decriminalized, and former Goldman Sachs executives were barred from holding positions in the Federal Reserve and the United States Treasury. Our “deregulated” system also, unfortunately, doomed large investment banks to failure by forbidding them from receiving $800 billion of inflated money, created out of thin air. It is bad that our evil “deregulated” banking sector would visit such atrocities upon us.
Is that the “free market” and the “deregulated” banking sector you’re talking about? The one that’s done so much damage?
Capitalism itself is not fatally flawed. But a hyperconservative approach to it is.
Capitalism, as in, a free market, is either complete or it isn’t. Since neither McDonnold nor I apparently know what the word “conservative” means anymore, I will do him one better by saying that a “hyperlibertarian” approach to capitalism is a free market and it is the goal any advocate of the free market should aim for.
Regulations that promote decentralized competition on a human scale are regulations that conserve Smith’s side of capitalism. These regulations should not be the enemy of conservatives; they should be our aim.
Please allow me to be the first blagger ever to quote Ludwig von Mises’s essential insight: The issue is always the same: the government or the market. There is no third solution.
When you hear what passes for conservative punditry nowadays, it’s no wonder Republicans are losing power and influence faster than ever. What a stupid, vacuous, hypocritical “ideology.” What an embarrassing collection of misogynist, racist xenophobes, fundamentalist Bible-fetishists, third-rate shysters, and authoritarian police state apologists.
Robert Heinlein said, “The human race divides politically into those who want people to be controlled and those who have no such desire.” Libertarians have known for decades, since before Rothbard’s time, that conservatives not only fit nicely into the former group but lead the charge, all while claiming (naïvely or deviously) to champion freedom. After 8 years of both stupid and evil efforts to control others, it’s good to see mainstream conservatives are finally realizing and admitting that libertarians were right about them.