“Conservatives need to get over their allergy to government action.”
That was the headline on an opinion column by Henry Olsen last week in The Washington Post. Conservatives are not the only ones who think so.
Across much of the right today, there’s more openness to having government do more in the economy. Olsen notes that there are significant American constituencies, especially blue-collar America who support a conservative agenda. This would include more state intervention in the form tariffs, industrial policy, and expanded entitlement programs.
Olsen said that the right cannot ignore these trends if it wants its electoral relevance to remain relevant. That necessitates moving away from what he labels “market fundamentalism.”
It is vital to win elections. But to embrace a bigger economic role for government amounts to conservatives endorsing policies that would push the United States even further in social democratic directions that would undermine America’s long-term economic and political well-being.
Here’s the fact often omitted by contemporary conservatives friendly to more government economic intervention: The American economy is already awash with interventionist policies—so much so that, according to The Heritage Foundation’s 2022 Index of Economic FreedomSince 2008, America’s overall economic freedom has been declining. (The Daily Signal, a news outlet run by The Heritage Foundation, is The Daily Signal.)
The index ranked America as The world’s 25th-freest economy. Many of the countries listed before it are European countries with strong social democratic traditions. The index also includes:
Spending by the Government [in America]In the last three years, public debt has reached 38.9 % of total output (GDP), and budget deficits average 9.0 percent of GDP. Public debt equals 127.1 percent GDP.
That doesn’t sound like small government to me.
In fact, even with the extra state spending induced by the COVID-19 pandemic, the federal government has been spending like a drunken sailor for quite some time—and using debt to do so.
There are serious political problems associated to conservatives adopting more economically interventionist stances, besides the high costs and inefficiency associated with interventionist policies.
“There’s a middle ground,” Olsen asserts, “between government directing everything or nothing.” Alas, if there’s anything that 20th-century economic history shows, it is that once the state’s economic role moves beyond securing certain public goods—the rule of law, property rights, national security, public works, etc. (none of which are small endeavors)—the genie is hard to put back in the bottle.
The middle ground is not an essentially market economy that operates within the framework of the rule-of-law and is intertwined with a strong civil society. It becomes a form of social democracy where excessive state power is omnipresent across the economy.
That doesn’t mean that you eventually get a Soviet-style command economy. But you do find yourself encumbered with the rampant cronyism that infects so much of D.C. politics, and, more insidiously, what the great political philosopher Alexis de Tocqueville described in his classic “Democracy in America” as “soft despotism.”
Soft despotism is a Faustian bargain between the political class and the public. It involves “an immense protective power,” Tocqueville wrote, in assuming prime responsibility for everyone’s happiness—provided that power remains “sole agent and judge of it.”
That power would, Tocqueville added, “resemble parental authority” and attempt to keep people “in perpetual childhood” by relieving them “from all the trouble of thinking and all the cares of living.”
That’s the deal that progressives have proposed to Americans for more than a century. And it has saddled America with social and economic disasters like President Lyndon Johnson’s Great Society, which, as the economic historian Amity Shlaes illustrates in her book “Great Society,” wreaked havoc upon black America and the white working class.
In that light, there’s no reason to think that conservatives can devise an interventionist agenda that somehow avoids all of the problems—the one-size-fits-all mentality approach, the unintended consequences, the inability to address the non-material causes often central to social dysfunctionality, et al.— inseparable from such policies.
America’s faith in state intervention to achieve positive economic or political change has also led to a large administrative state. It’s no secret that these federal government departments, administrative bodies, and regulatory agencies are dominated by people ranging from indifferent to hostile to conservative ideas. Why would American conservatives want to affirm (let alone augment) the administrative state’s power by adopting economically interventionist programs?
Americans deserve better than being forced to choose between hard and soft social democracy during elections. They should not have to accept economic debates that reduce spending to a minimum.
If anything, American conservatives need to be more allergic to government economic intervention—not less.
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