Category Archives: Socialism

Embrace Burke? No thanks, Mr. Dionne. I’ll take Coolidge instead.

In his never-ending campaign to weaken those who oppose a progressive state, E.J. Dionne has attempted to give American Conservatives (including, in his flawed formulation, libertarians) a new idol: Edmund Burke. Embracing Burke, Dionne posits, would “clip the wings of modern conservatives”:

It’s to Norman’s credit that he recognizes how “Burke also clips the wings of many contemporary conservatives.” While he “helped establish modern conceptions of nationhood and national allegiance,” he “rejected military adventures.” He “celebrated religious observance, but despised moral absolutism.”

Norman also sees Burke as implicitly offering “a profound critique of the market fundamentalism now prevalent in Western society.” He thinks that Burke would “note the extraordinary greed and self-dealing seen over the past decade by the modern nabobs of banking and finance in a series of cartels disguised as markets.” And a Burkean conservatism would be wary of any ideology that “causes people to lose sight of the real social sources of human well-being and to become more selfish and individualistic, by priming them with ideas of financial success and celebrity.”

The second paragraph is built on an entirely faulty assumption. It is simply beyond question that the FHA and its’ regulated GSEs were the key enabler of the housing bubble of the last decade in the US. These New Deal programs socialized the risk of mortgages while allowing private players to reap the profits. True market fundamentalists always railed against these distortions of markets. It is advocates of big government, such as Dionne himself, who are to blame for the situation.

Even without the factual error, Dionne’s quote from Norman on Burke’s belief is wrought with other problems. It requires one to believe that greed is linked to individualism and ignore the parade of collectivists who sought to use the machinery of Washington to exploit others for the own gain. (Sadly, too many people actually believe this, but that’s another story for another time.) It requires one to believe that conservatives care deeply about celebrity as a part of a core ideology. Dionne perhaps missed the right’s revulsion to the concept of Barack Obama as a savior and a light worker. Or maybe he didn’t and just assumed it was a symptom of bitter clinging. In any case, he overlooks the fact that the left has a monopoly on personalizing politics in this country.

Now that we have established that Dionne’s understanding of a conservative is already tenuous, at best, let’s read his vision of a model Burkean Conservative:

Burke’s conservatism was based on a proper understanding of that word. He believed in preserving the social order and respecting old habits. He persistently warned against the destructive character of radical change. He was wary of ideology and grand ideas, rejecting, as Norman puts it, “universal claims divorced from an actual social context.” Burke saw the well-ordered society as a “partnership of the dead, the living and the yet to be born,” a nice formula for a forward-looking traditionalism — and not a bad slogan for environmentalists.

Here, Dionne unwittingly uncovers a truth. Given that the modern social order in the US is built upon the legacy of the progressives and the New Deal, to be a Burkean conservative is to be a mainstream progressive. Libertarians are seen as radicals precisely because we want a social order that dispenses with the New Deal and its legacy. Meanwhile, modern Republicans play to shape a conservative social agenda using the rules and mechanisms put in place by the New Deal. Even the Constitution, the contract between the dead, the living, and the yet to be born in the United States, is interpreted through the ideology of the New Dealers.

This insight brings us to the most laughable of Dionne’s assertions:

Conservatism will flounder unless it remembers the imperative of addressing the interests of the many, not the few.

Progressives have never done anything but address the needs of the few. Which few and to what degree are always in question. The need for an underclass of highly productive but exploitable people is not. This underclass was referred to by William Graham Sumner as “The Forgotten Man”:

It is when we come to the proposed measures of relief for the evils which have caught public attention that we reach the real subject which deserves our attention. As soon as A observes something which seems to him to be wrong, from which X is suffering, A talks it over with B, and A and B then propose to get a law passed to remedy the evil and help X. Their law always proposes to determine what C shall do for X or, in the better case, what A, B and C shall do for X. As for A and B, who get a law to make themselves do for X what they are willing to do for him, we have nothing to say except that they might better have done it without any law, but what I want to do is to look up C. I want to show you what manner of man he is. I call him the Forgotten Man. Perhaps the appellation is not strictly correct. He is the man who never is thought of. He is the victim of the reformer, social speculator and philanthropist, and I hope to show you before I get through that he deserves your notice both for his character and for the many burdens which are laid upon him.

Sumner’s appellation notwithstanding, members of this productive underclass are not forgotten by progressives. On the contrary, they are known to be a vital component of any progressive plan for society. In the Affordable Care Act, for example, they are the young and healthy who must be conscripted into the health insurance market so that their premiums might benefit the old and sick. In Social Security, they are the workers who pay taxes in so that retirees may get benefits. In Affirmative Action, they are the whites and Asians who lose opportunities granted to other minorities on the basis of skin color.

For decades, progressives maintained the illusion that it was only a demonized few who bore the brunt of this exploitation. Franklin Delano Roosevelt used his political acumen to identify groups for benefit or demonization. He went so far in this endeavor as to hire photographers and writers to produce propaganda about those who benefited while launching vicious legal battles against innocent men just because they were in a group targeted for demonization. (This does have a familiar ring, doesn’t it?)

However, that illusion has cracked in recent years. Eventually, millions of members of the productive underclass realized exactly what was going on. So born was the Tea Party, a so-called conservative movement. Distressingly for Dionne, this movement is far from the conservatism Burke preached and Dionne practices daily. It is radical, seeking to smash a social order built upon exploiting its members for the benefit of others.

The radical nature of the Tea Party prompted fear among the establishment. Both major parties in America are essentially progressive in mechanics, if not agenda. The angry, dismissive reaction from the Republicans and the downright punitive reaction from the Democrats highlighted how radical the idea of declaring one “taxed enough already” truly is. Since the Wilson administration, Washington has decided who was taxed enough already and who could pay more.

The Tea Party, for all the good it has done in revealing the corruption in Washington (much through its own victimhood at the hands of the IRS), is still a movement lacking a positive idea. It is essentially a movement pushing for a cessation of activity. This will cause many to ask what shall be done instead. The Tea Party has no answer for this.

Neither, it seems, do most libertarians. We tend to focus on the “no” too often as well. Government should stop doing this and not start doing that. We’re seen as a force of negativity. Unfortunately, in a world where we are opposed to both major parties and the mainstream media apparatus designed to enforce the status quo, negativity doesn’t sell.

Respect and stability, however, do. Enter Calvin Coolidge. The concept of normalcy embraced by Harding and Coolidge is both simple and elegant. Here is a description of the concept by Amity Shlaes in an interview with Ed Driscoll:

Ed, what did you learn normalcy was in school? I learned it was something kind of dull, right? Like the — normalcy doesn’t sound elevated or wonderful and that was the Harding motto.

But what they meant by normalcy is not we should all be normal and cogs. Right? What they meant is the environment should be normal so that we can have fun and play with new ideas, which is something very different. Predictability, the reduction of uncertainty. Coolidge as a candidate even used the phrase “uncertainty” which you hear so much today and which is also the subject of Forgotten Man. It’s less uncertainty, please. He really — it’s a theme all the way to the end of his life. You can find it in his columns post-presidency. He spoke of uncertainty.

If you’re reading this, you’re taking advantage of Coolidge’s concept of normalcy in a very different context. The internet is built on normalcy. Packets are packets, traffic is traffic, and different application protocols expect lower-level protocols to act as specified at all times. The creation built upon these simple ideas, upon normalcy, is easily humanity’s largest by a vast margin. Yet there is no edifice called “The Internet”, no building that makes it all work. It is a distributed network of components all playing by the same rules.*

So it was with the American economy under Coolidge. After a decade of tumult resulting from progressive leadership, the US economy got eight blessed years of normalcy. With this diminished uncertainty, companies were free to invest. The economy boomed and even the poor man was better off in 1928 than in 1920.

Then, in response to the crash of 1929, a round of “bold experiments” (to borrow FDR’s phrase) were undertaken upon the economy by Hoover, Roosevelt, and the Congresses of the era for the next decade and a half. These experiments caused untold economic devastation by distorting markets, increasing uncertainty, and causing those who had capital to hoard and protect it, eventually causing Roosevelt to pursue an undistributed profits tax to shake this capital loose from unwilling businesses. Even during the Second World War, while the US was not statistically in a depression, the standard of living was still poor in comparison to the normalcy of the 1920s.

The experiments, in every empirical sense, were a failure. But with the help of writers like Arthur Schlesinger, Jr. (who Dionne quotes approvingly as an admirer of Burke), these failures were pawned off on the American people as successes and the role that predictability and normalcy play in prosperity forgotten.

Today, we face an economic crisis built upon government interventions into and distortions of the private economy. Despite the Obama administration focusing on jobs, there has been no improvement for the millions who have been chronically unemployed for years. The Democrats’ bold experiment with banking, the Dodd-Frank law, has driven the poor away from banks as they killed off free services. The Democrats’ bold experiment with health care is already driving up costs for millions while making full-time jobs hard to come by for hourly workers. Look at any problem in the US economy today and at its root you will find a bold experiment from Washington, D.C.

The message I have for all Americans is to ignore Dionne (good advice in any case) and his plea to embrace Burke. It’s time to embrace Coolidge and pursue a course of radical normalcy.

*For those who don’t remember, one of the major arguments against SOPA and PIPA were that they legislated a change in the architecture of the internet that broke the DNS protocol. This endangered the functioning of the entire network by disrupting the rules upon which countless other technologies depended. A perfect illustration of the need for normalcy in a complex, distributed system.

Two words…

Matthew Yglesias says:

What’s needed is a much more forceful, much more statist approach to forced savings, whether that’s quasi-savings in the form of higher taxes and more Social Security benefits or something like a Singapore-style system where “private” savings are pooled into a state-run investment fund.

It only takes two words to show that this is massively unwise: Chrysler bondholders.

Margaret Thatcher Defends her Record and Capitalism Itself

In marking the passing of one of the staunchest defenders of capitalism who held high office, I thought it would be appropriate to post this video of Margaret Thatcher in which she defended her record against her Labour Party critics. In this video, her political opponents thought the income gap grew too much under her leadership. Listen to her answer. This is the sort of unapologetic defence of capitalism we need in leadership on this side of the pond.

Another interesting part of this video was her warnings against the idea of a central European bank and currency. It seems that she was quite prescient given the problems of the Euro.

A Question of Labor Scarcity

Cory Doctorow started the New Year with a very interesting piece on the “roboticization of the workforce”. The whole article is worth a read, but it brings up a disturbing question:

But here’s the thing that neither of these articles — or even Bruce’s acid observations — touches on: once technology creates abundance, what possibilities exist for distributing the fruits of that abundance such that the benefits are more evenly felt?

There are plenty of people who will suggest that collectivist economics and centralized redistribution are the answer. Given the last century of history, that’s not an option I like. Take a look at Doctorow’s nightmare scenario:

We’ve been talking about an increase in productivity producing an increase in leisure for a long time, but instead, the “winner take all” world of Brynjolfsson and McAfee often seems to produce a “winner” class that works itself into an early grave by running 100-hour work weeks at astounding payscales, and a much larger “loser” class that works itself into an early grave by working 100-hour weeks in shitty, marginal, grey-economy jobs, trying to stitch together something like an income.

This is bad. However, the nightmare scenario that evolves under socialism is invariably worse. Instead of a winner class created by skilled, high-value work, a winner class develops from people who successfully gain control of the redistribution machine. Giving power to those who covet it is rarely a good idea, but usually unavoidable. The United States was built with a system of government shaped by this insight. By and large, its citizens have profited from keeping checks and balances on power seekers, even as the power seekers have eroded them.

A class of power seekers in control of an economic redistribution machine that replaces labor markets would not be subject to checks and balances. By controlling what people have, they would have absolute, unchecked power. Worse, power seekers tend to be the least sensitive to the wants and needs of the people they control. Even worse, most power seekers see others as resources to be exploited for their benefit.

Terrifying, isn’t it? Surely, we can avoid this by making sure the right people are in charge. Nope, sorry. Eventually, those who want power will take over the redistribution machine. It’s a certainty. Those who seek power will overcome the will of the rest to keep them out. It’s the consistent thread in human history.

The real problem is that we’re approaching a point where the labor market as it’s structured will collide with the efficiency gains caused by technology. If most labor is not scarce enough to allow workers to earn enough to support themselves and their families, how does society respond? How do supporters of economic liberty respond? What new mechanisms can be devised that allow ordinary people to continue to participate freely in the markets for goods and services without the wealth earned from the labor market?

This is stuff supporters of economic liberty need to start thinking about now. Our opponents have a ready answer that people will be drawn to despite its historic failures. Without an alternative from us, tyranny of the default will result in actual tyranny.

Your Incredibly Stupid Progressive Economic Propaganda for the Day

There is so much economic ignorance/stupidity in this video (below), I wouldn’t even know where to begin. John Maynard Keynes himself would probably be embarrassed by this video courtesy of the California* Federation of Teachers and narrated by the great economist of our time Ed Asner.

I don’t have much else to say about this video right now, it’s too easy (though feel free to rip it apart here…or defend it). Actually, I am in the planning stages of writing a book that challenges this sort of mentality (I’m shooting for a release date about May 2013). I’m hoping Liberty Papers readers will buy it; I will have discounts for Liberty Papers readers.

And now for your, um…enjoyment[?]: Tax the Rich: An animated fairy tale**

WARNING: This is 7 minutes and 50 seconds of your life you will never get back.

*Oh yes, the state of California which is being run by people with this kind of mentality! Yeah, their economic policies have been working great, haven’t they?

**Fairy tale is actually a very good description.

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