Over at Newsweek, they may all be socialists now . But some of us persist in believing that transferring ever more power to the state is such a disaster for both our economy and our freedoms that America deserves the effort — no matter how untrendy — to reverse the tide. Yes, we now have a congress in which the majority count it as a great achievement to ram through the biggest spending binge in history. Yes, we have a president who praises this $787 billion act of government gluttony and central planning as “progress.” But that doesn’t mean we should burn the remaining copies of Milton Friedman’s Free to Choose, and line up to chuck The Wealth of Nations into the collectively-owned woodchipper.
Most disturbing in that Newsweek piece, which echoes President Obama’s dismissive rhetoric about free markets, is the patronizing tone in which we are told that there is no point in further debate:
If we fail to acknowledge the reality of the growing role of government in the economy, insisting instead on fighting 21st-century wars with 20th-century terms and tactics, then we are doomed to a fractious and unedifying debate. The sooner we understand where we truly stand, the sooner we can think more clearly about how to use government in today’s world.
What, exactly, are these dazzling new 21st-century terms and tactics for which we are supposed to forsake all memory and spurn all debate? The cult of “climate change?” The group chant of “We are one” -? Deep thinking as represented on Google News?
Actually, there is a desperate need to revive those 20th century debates about government versus free markets — and there is plenty of room for such debates to be edifying in the extreme, since many of those now waving aside free markets and genuinely private enterprise seem to have chucked right down the memory hole such basic and vital insights as those set forth by Friedrich Hayek in his 1944 Road to Serfdom, or his indispensable 1945 essay on The Use of Knowledge in Society.
This is an excellent time to revive the lessons about the importance of free-market prices as signals of where resources can most productively be put to use (that’s how America got rich). This is a great time to re-examine the loss of freedom, and the immense damper imposed on creativity, productivity and individual dreams, when government controls people’s livelihoods. And there could be no better time to review what actually went wrong in America’s system in recent years – with profligate budgets, loose money and government poisoning the housing market with forced lending, implied taxpayer guarantees, and hellish knock-on toxic effects. Fannie Mae was not something cooked up by the free market. It was a product of the same state-engineering mindset that now brings us the godzilla “stimulus” bill.
The endless fallacy of state economic planning is that greed can somehow be eliminated from human nature. The virtue of capitalism is that it takes greed into account, and puts it to good use. Free markets give people incentives to satisfy their greed by providing things that other people really want, and which they choose to buy in a process of voluntary exchange. In that system, government is supposed to exercise restraint, rather than treating taxpayers as providers of an all-you-can-eat Washington buffet.
What we have right now is a shift in which individual greed is being condemned, but government greed is hailed as an achievement — because it comes with a promise that government will provide things that people want. Welcome to the cookie cutter world, in which you will be told what you are supposed to want, and you will be told how much you must pay for it, when you will get it, and where to wait until it is doled out. This will be done not by way of voluntary exchange, but by the state, which, unlike the private sector, enjoys the power of coercion.
Newsweek describes this as becoming more “French.” I suspect that to many Americans, all those old French jokes notwithstanding, ”French” is a word that still connotes romance, Parisian street cafes, summers in Provence, and maybe a gentle caresse from the welfare state.
That’s not what lies ahead if all knowledge and experience of the virtues of genuine free markets is tossed aside as worn-out baggage. If, for fear of being “fractious and unedifying” we all lie back and accept the numbing incantation of we-are-all-socialists-now, what lies ahead is a drab, restrictive, frustrating and far more difficult way of life. Expect rising corruption — as it becomes ever more important to petition the bureaucracy for favors and exceptions. Expect lots more bridges to no where. Expect a lot more of the likes of Nancy Pelosi and Harry Reid deciding how to spend your income for you – even though state planners cannot possibly know the tradeoffs that you individually might prefer between books and butter, chocolate and cheese. Expect a lot more of that sinking feeling as President Obama makes the rounds of townhall meetings, dispensing like some feudal lord a handout of free housing here, a boost up the bureaucratic queue there. Finally, expect an America that is less safe from our enemies, because being poorer and less free is unlikely to transform us on a corresponding schedule into a less tempting target. It will simply make us an easier target.
It does not have to be like this. There are still plenty of Americans who value their freedom, and on the matter of free markets there is a rich body of thought and experience which applies just as well to human nature in the 21st century as it did in the 20th. To a horrifying extent, it has gone missing from the mainstream debate. Certainly it was missing from last year’s presidential campaign. As we pay a rapidly rising price for that omission, this is precisely the time to bring back arguments for the free market and individual liberty. I’d venture that politicians who give it a real try right now would find a suprisingly strong response.