The Conservative Attack on Market Freedom
I haven't run an empirical study on the number of articles published, but it sure seems like conservatives are writing more articles than usual condemning economic freedom, and the people who advocate for it. This would make some sense in the Age of Trump when the the president has pushed the right's policy agenda more in the direction of protectionism and runaway federal spending that makes the Obama Administration look almost fiscally responsibly by comparison. The right wing no longer talks about cuts to social spending. Deficit spending is nearing all-time highs.
Perhaps not coincidentally, the conservative media has promoted and published articles, with some regularity in recent years, attacking the idea that consumers and producers ought to be able to buy and sell freely without government interference, regulations, or prohibitions.
Thus, by perusing the recent output of publications like First Things, The American Conservative, or The Spectator, it's not difficult to find numerous articles that have run over the past two years attacking "libertarians," specifically for the sin of supporting the idea of free markets.1
Many conservatives appear to be taking a page from leftwing Progressives who regularly portray advocates of economic freedom — labeled by anti-market leftists as "neoliberals" — who have adopted "the lie," of "Homo economicus, or self-maximising man." which leads the idea's advocates to places "free-market economics" above all other human values.
In a similar vein, the phrase "market fundamentalism" is also a popular phrase among these critics of market freedom, with the phrase intended essentially as a smear which portrays libertarians as nearly religious zealots in their devotion to their market-based ideology.
"Market fundamentalism has been exposed as soulless," a sub-title from The American Conservative declared in 2018. Meanwhile, Michael Warren Davis at the same publication reminded his readers that "Man is not homo economicus, as the socialists and libertarians suppose..."
But, as I've shown here at mises.org before, those who invoke the idea of homo economicus as the embodiment of pro-market thinking are either unfamiliar with actual economic theory, or they're dishonestly using a straw man to attack market advocates. After all, virtually no one at all believes the concept of homo economicus actually describes human behavior, or that it is some sort of ideal for human society. The Austrian-school economists — singled out for special scorn by conservatives Tucker Carlson and Steve Bannon, most certainly never believed it.
But the caricature makes for an easy target, which is perhaps why Patrick Buchanan has returned to that well more than once. He declares in his 1998 book The Great Betrayal that "the Global Economy is rooted in the myth of economic man," and covers similar ground in his 2002 book The Death of the West when he says pro-market advocates have "succumbed to the heresy of Economism, a mirror-Marxism" which claims "that man is an economic animal....that if we can only get the marginal tax rates right ... Paradise ... is at hand."
But old rhetorical habits no doubt die hard, and many conservatives continue to invoke the idea that free-market ideologies rely on a cartoonish view of humans who care more about their stock dividends than their dying mothers.
The homo economicus strategy is a useful tactic, however. It helps to portray pro-market activists is out-of-touch, and devoted to arcane theory, while their opponents care more about real, actual human beings with real problems. The reality, of course, is something quite different. As Ludwig von Mises has shown, we favor economic progress because economic progress means a higher standard of living and all the benefits that come with it — such as a longer, healthier life, and children who live to adulthood. There's nothing arcane or theoretical about it.
Do Americans Have Too Much Freedom?
Nonetheless, it was difficult to be shocked when Carlson, in his jeremiad against market freedom on his show in January, insisted that if the world is to improve, people "will have to acknowledge that market capitalism is not a religion. Market capitalism is a tool, like a staple gun or a toaster. You’d have to be a fool to worship it."
The implication, of course, is that people do worship markets, or in the vocabulary of Carlson, they worship "capitalism."
In a United States where more than 35 percent of all national income is taxed away by government it's safe to say that this "worship" of markets is pretty lackadaisical. But the baseless idea that we live in a world of untrammeled hard-core free-market libertarianism continues to hold sway among many on both the left and right.
Moreover, the lack of any real world domination by free-market fanatical ideologues apparently is not a barrier to repeated claims that it is too much market freedom that has allegedly destroyed the American middle class and hollowed out the American economy.
I say "allegedly," of course, because many conservative claims about the economy come down to empirical questions about the state of the current US economy. Some claims are more convincing than others. But even if we completely accept the narrative that the average American is worse off today than a similar cohort 30 years ago, on what grounds is this to be blamed on too many people having too much freedom to buy and sell what they please?
In reality, of course, governments in the United States collect more revenue as a percentage of economic output than they ever have before. Government spending is at an all time high. The regulatory burden placed on American producers, entrepreneurs, and business owners is enormous and crippling. New federal banking regulations favor large firms while turning away small entrepreneurs. Meanwhile, the US's central bank is increasingly activist, inflating the money supply for the sake of Wall Street, thus driving up asset prices and favoring those who already own capital — at the expense of first time homebuyers and middle-income savers.
And yet, we're to believe that "market fundamentalism" is the problem?
Saving America with Higher Taxes
Much of the time, the solutions to these supposed market-caused problems are indeed troubling.
Much of the anti-market sentiment among conservatives nowadays centers around the need for protectionist tariffs. But that's not where their anti-market policies end. It would be one thing if these conservatives were arguing for a protective tariff combined with policy that is otherwise laissez-faire. If tariffs were a replacement for the income tax, one could certainly make the case that Americans would benefit over all. After all, tariffs are hardly the worst kind of tax, and tariffs were higher prior to the modern era of "free trade" agreements — without crippling American standards of living. But overall tax rates were substantially lower. Prior to World War One in America, the American tax burden was remarkably low and often only around 60 percent of that found in other Western nations. Firms opened in America and stayed in America because America was a great place to do business. Even with high tariffs, the tax burden was favorable compared to other nations. The regulatory burden was low. There was a gold standard and no central bank.
America didn't get rich because it had politicians who were guiding, nudging, or protecting the American economy from foreigners. The American economy expanded rapidly thanks to a a growing and hard-working population that made the most of a growing supply of capital. Since the US had such a free economy, it was very attractive to foreign investors. Much of that capital was foreign-owned, but contrary to the theories of the economic nationalists, that wasn't a problem.
While it's true many politicians of that era spouted a lot of rhetoric about the need for a nineteenth-century version of Making America Great Again, the US government was simply too weak and decentralized to create anything resembling the national economic policy the conservatives are telling us we now need.
But with today's protectionist conservatives, creating a modern economy that is more favorable to hard work, investment, and saving, is apparently not a priority. Tucker Carlson, for example, mocks the idea of lowering corporate taxes. He thinks capital is under-taxed. Reading through Daniel McCarthy's article "A New Conservative Agenda," one will look in vain for support for an economic policy that seeks to help Americans buy and sell freely, even outside the tariff issue. One finds instead, an agenda that seeks to use the coercive power of the state to forge a "national economy" through government policy that "takes account of the different needs of different walks of life and regions of the country, serving the whole by serving its parts and drawing them together." It's a grandiose scheme that's perhaps best be described as "conservative central planning." Do we read anything about the central bank? About lowering the income tax? There is scoffing about the idea that a tax cut might actually help Americans.
And that appears to be the state of conservative political economy. They want to go back to the protectionist status quo of the nineteenth century and early twentieth century. But they appear uninterested about any other aspect of the political economy of that era: a heavily decentralized political system, no payroll taxes, no central bank, and a minimalist regulatory environment.
Ultimately, the conservative attack comes down to insisting that Americans must not be allowed to buy what they want, sell what they want, or trade with whom they want without special government permission. The interests of capital and labor must be "balanced," we're told. "The rich" must be taxed more.
But the conservative critique of markets ultimately fails in several ways. It is not true the US economy is too free, or in the thrall of market fundamentalists. It is not true that raising tariffs — while ignoring the crushing tax burden elsewhere — will have a benign or beneficial effect. It is not true that the answer lies in more of the same — namely, more government power.
- 1. For more, see J.D. Vance's "Beyond Libertarianism" and "The Fusionism that Failed" by Ben Sixsmith at First Things. Also see Daniel McCarthy's "Mark Sanford’s hopeless politics of debt" at The Spectator.