Arthur C. Brooks, president of the American Enterprise Institute, takes liberties with the meaning of the culture war to write in The Washington Post that free enterprise versus government control is the next culture war. While there are problems with the economic views expressed in the article which other bloggers such as Matt Zeitlin have discussed,I’m more interested in the erroneous framing used by Brooks. Brooks begins:
This is not the culture war of the 1990s. It is not a fight over guns, gays or abortion. Those old battles have been eclipsed by a new struggle between two competing visions of the country’s future. In one, America will continue to be an exceptional nation organized around the principles of free enterprise — limited government, a reliance on entrepreneurship and rewards determined by market forces. In the other, America will move toward European-style statism grounded in expanding bureaucracies, a managed economy and large-scale income redistribution. These visions are not reconcilable. We must choose.
It is not at all clear which side will prevail. The forces of big government are entrenched and enjoy the full arsenal of the administration’s money and influence. Our leaders in Washington, aided by the unprecedented economic crisis of recent years and the panic it induced, have seized the moment to introduce breathtaking expansions of state power in huge swaths of the economy, from the health-care takeover to the financial regulatory bill that the Senate approved Thursday. If these forces continue to prevail, America will cease to be a free enterprise nation.
Brooks cites polls which show that Americans by wide margins support free enterprise. That is certainly correct but what Brooks misses is that a large majority of Americans support the actual American free market system which has been successful, while smaller numbers support the faux capitalism that those on the far right advocate.
While Brooks tries to portray those who disagree with his positions as supporting government control, the reality is that most people in this country, left and right, support some version of a free market system. Only a small minority on the left support socialism while there are some on the right who support a system which would better be described as fascism than capitalism if not for all the other negative connotations of the word.
The far right promotes a free market philosophy which denies virtually any role for government. They are essentially demonstrating the same fallacious thinking as Rand Paul in his opposition to the Civil Rights Act of 1965.
In general there is little controversy in this country as to the benefits of a free market economy. Where the far right is mistaken is in believing that Adam Smith’s invisible hand will correct all problems, ignoring the fact that even Adam Smith saw a role for government.
Markets are the creations of men, and are at danger of men abusing the system. The profit motivations in the free market system often does result in what Brooks refers to as human flourishing. However at times the market system fails to work and provides incentives which are not beneficial to the nation.
One example has been with the health insurance industry which found that it was more profitable to find ways to deny health care to the sick than to provide for such care. This resulted in a need for government to step in and reform the system. This reform was not motivated by people who are opposed to the free market system. It is a market-oriented system which will result in even more people being covered by the private insurance industry than there currently are. The right distorts the facts in calling this a government take over of health care. In reality, even the American Medical Association which typically opposes government intervention supported health care reform, seeing this as increasing freedom of choice for both patients and physicians.
The war is not between supporters and opponents of a free market system but is based upon disagreements over the nature of the system. Liberals want to see a free market system in which everyone has the opportunity to participate and profit from their work.
The results of Republican economic policies have been to transfer wealth from the middle class to the upper class and bring us to the brink of depression. Many on the right try to disassociate themselves from Republican policies, ignoring the harm done by over-zealous deregulation. They protest that George Bush didn’t follow their policies but the reality is that their policies would be so disastrous that most Republicans in office will never follow them to the letter. Even Ronald Reagan raised taxes as opposed to blindly following the dogma that lowering taxes is the way for governments to increase revenue.
The American Enterprise Institute does not really advocate a serious economic policy. They claim credit for the benefits of a free market system which has little to do with their beliefs and distort economics to find ways to justify paying less taxes and escape necessary regulation.