Even conservatives now admit that conservatism has changed. Take the Ronald Reagan who Republican activists idolize in abstract; in real life he raised taxes, increased regulations, signed environmental laws, and (worst of all) negotiated countless compromise give-and-take, pragmatic measures in tandem with a Congress run by the other party. As did Barry Goldwater and William F. Buckley, giants who argued with genteel courtesy and who revered both knowledge and intellect, especially science. Even the most fervid Tea Party aficionado would avow that today’s GOP has little room for such things – as Goldwater and Buckley themselves proclaimed, to their dismay, before they died.
In this analysis, I’d like to focus on one of the directions that conservatism has gone a-wandering. But note first: I’ll try to do this without taking a single position that could fairly be called even slightly left-of center – by the old standards at least.
My entire critique will be from what used to be a completely conservative perspective. You’ll know this by the historical figure whom I cite above all others.
It begins provocatively, with prominent online commentator John Robb, who offers a simple… and clearly-correct… explanation for the gross mismanagement of the U.S. economy in the 21st Century – an appraisal that seems both tragically on-target and stunningly ironic. Ironic in ways I plan to elaborate — and I expect you’ll not look at the hoary old “left-vs-right” axis in the same way, ever again.
For starters, Robb shows that the patron saints of modern libertarianism and conservatism — including Adam Smith and Friedrich Hayek — were right in their core message…
…. proving that today’s peculiarly myopic libertarians and conservatives are wrong in theirs.
The Smithian Fundamental
No, it wasn’t “laissez faire” or social darwinism or extolling the virtues of greed. Though both men praised private enterprise and market initiative, they did not share today’s idolatry of personal and family wealth as the fundamental sacrament of economics. Those who most-frequently bandy Smith’s name appear never to have cracked open a page of “The Wealth of Nations” or ‘The Theory of Moral Sentiments.”
Rather, Adam Smith essentially founded our modern phase of the Western Enlightenment by anchoring a central postulate — one that Pericles and Locke discussed earlier, and that others, like Hayek, later embellished. The postulate that human beings are supreme rationalizers and self-deceivers.
Moreover, across 4,000 years we’ve seen that whenever a small group of men become powerful enough to control an economy and command-allocate its resources, they will do so according to biased perceptions, in-group delusions and fatally limited knowledge. Whether they do the normal oligarchic thing — cheating for self-interest — or else sincerely try to “allocate for the good of all,” they will generally do it badly. As a blatant recent example, Robb cites the collapse of the Soviet Union.
“The reason for this failure was that the Soviets relied on central planning. A system of economic governance where small group of people — in the Soviet Unions case bureaucrats — had all the decision making power. They decided what was spent and where. Even with copious amount of information, they decided badly. Why did they decide badly? The massive economy of a modern superstate is too complex for a small group of people to manage. Too much data. Too many uncertainties. Too many moving parts.”
Indeed, the transformation of modern China from a Maoist calamity to a mercantilist success story began with their abandonment of nit-picking central planning in favor of capitalist-style enterprise. Of course, the Chinese ruling caste retained overall control, “guiding” categories of credit and investment while executing a grand mercantilist strategy, the same process that Japan accomplished masterfully, during its own rapid primary and secondary phases of export-driven economic development.
Alas, for Japan, (but as a few of us forecast in the 1980s), national development eventually hits a tertiary phase when simple-minded, predatory mercantilism breaks down. If history and human nature are any guide, the Chinese will hit the same “wall” when economic complexity surpasses the ability of any planner-elite to comprehend or manage. For all his faults – and the many ways he’s misinterpreted – Friedrich Hayek understood this well. He showed how it turns skilled planners into smug blunderers.
Now this barrier can shift, as computers and sophisticated models let rulers extend their period of competence a bit longer. (It helps, apparently, that nearly all of the top Chinese leaders began their careers as engineers, responsible for actual goods or services, not as lawyers, politicians or “business majors.”)
Still, however you look at it, there is no way that the old ruling principle that held in 99% of human societies — “Guided Allocation of Resources” or GAR — could possibly work in a tertiary economy as intricate as the United States. As Robb continues:
“The only way to manage an economy as complex as this is to allow massively parallel decision making. A huge number of economically empowered people making small decisions, that in aggregate, are able to process more data, get better data (by being closer to the problem), and apply more brainpower to weighing alternatives than any centralized decision making group.”
Now all of this may sound surprisingly well… “libertarian”… given that both Robb and I are highly critical of today’s right! But bear with us, because what’s at issue is a fundamental conflation and betrayal of the very essence of those movements. The ultimate irony and hypocrisy.
What Robb describes here is the central discovery, not only of Smith and Locke, but of Benjamin Franklin and the American framers… as well as Galileo and the founders of modern science. Ever since civilization began, nearly all societies were dominated by centralized oligarchies, priesthoods or hierarchies who ruled on policy, resource-allocation and Truth for 4,000 years of general incompetence mixed with brutal oppression.
Today, by sharp contrast, all three of the Enlightenment’s great arenas — democracy, markets and science — feature a revolutionary structure that broke with the oligarchic past. The old, arrogant, top-down approach was replaced with something else. Something that great Pericles described 2,000 years earlier, during the brief Athenian Renaissance.
Elsewhere I’ve called the Enlightenment’s principal tool Reciprocal Accountability (RA). But it really is just another way to say “get everybody competing.”
By dividing and separating power and — more importantly — empowering the majority with education, health, rights and knowledge, we enabled vast numbers of people to participate in markets, democracy and science. This has had twin effects, never seen in earlier cultures.
1) It means everybody can find out when a person stumbles onto something cool, better or right, even if that person came from a poor background.
2) It allows us to hold each other accountable for things that are wrong, worse or uncool, even when the bad idea comes at us from someone mighty.
Never perfectly implemented(!) — this reciprocally competitive system nevertheless dealt far better than any predecessor with that problem of human delusion. None of us can see and correct all our own errors, past a cloud of rationalizations. But when RA is healthy, then criticism flows. And others will happily point out your errors, for you. (What a deal!) And I’m sure you’re happy to return the favor.
The result? An Enlightenment Civilization fostered by Smith, Locke, Franklin etc., but propelled by tens of millions of eager participants. Inarguably the most successful of all time, cutting through countless foolish notions that held sway for millennia — like the assumption that your potential is predetermined by who your father was — while unleashing creativity, knowledge, freedom, and positive-sum wealth to a degree that surpassed all other societies, combined.
Even the most worrisome outcomes of success, like overpopulation, wealth stratification and environmental degradation, come accompanied by good news. Like the fact that so many of us are aware, involved, reciprocally critical, and eager to innovate better ways.
Lip Service to Wisdom
So, what’s that irony I spoke of, earlier? How does this central principle turn around and bite today’s libertarians and conservatives, proving many of them fools?
Clearly, Everything I’ve said, so far, ought to make a libertarian or conservative happy! Indeed, my nonfiction book The Transparent Society is all about how open (Hayekian) information flows can empower reciprocal accountability and competition, the things that make democracy and markets and science great. (There have never been humans more inherently competitive than scientists; try talking to one, some time.)
So where’s the problem? The problem is that it’s all lip service on the right! Those who most-loudly proclaim Faith In Blind Markets (FIBM) are generally also those proclaiming idolatry of private property as a pure, platonic essence, a tenet to be clutched with religious tenacity, as it was in feudal societies. Obdurate, they refuse to see that they are conflating two very different things.
Private property – as Adam Smith made clear – is a means for encouraging the thing he really wanted: fair and open competition. But anyone who actually read Smith also knows that he went on and on about that “fair and open” part! Especially how excessive disparities of wealth and income destroy competition. Unlike today’s conservatives, who grew up in a post-WWII flattened social order without major wealth-castes, Smith lived immersed in class-rooted oligarchy, of the kind that ruined markets, freedom and science across nearly 99% of human history. He knew the real enemy, first hand and denounced it in terms that he never used for mere bureaucrats.
When today’s libertarians praise the creative power of competition, then ignore the propertarianism that poisons it, we are witnessing historical myopia and dogmatic illogic, of staggering magnitude.
The Irony of Faith in Blind Markets
When Adam Smith gets oversimplified into a religious caricature, what you get is “faith in blind markets” – or FIBM – a dogma that proclaims the State should have no role in guiding economic affairs, in picking winners of losers, or interfering in the maneuvers or behavior of capitalists. Like many caricatures, it is based on some core wisdom. As Robb points out. The failure of Leninism shows how state meddling can become addictive, excessive, meddlesome and unwise. There is no way that 100,000 civil servants, no matter how well-educated, trained, experienced, honest and well-intentioned, can have enough information, insight or modeling capability to replace the market’s hundreds of millions of knowing players. Guided Allocation of Resources (GAR) has at least four millennia of failures to answer for.
But in rejecting one set of knowledge-limited meddlers — 100,000 civil servants — libertarians and conservatives seem bent on ignoring market manipulation by 5,000 or so aristocratic golf buddies, who appoint each other to company boards in order to vote each other titanic “compensation packages” while trading insider information and conspiring together to eliminate competition.
Um… in what way is this kind of market “blind”? True, you have gelded the civil servants who Smith praised as a counter-balancing force against oligarchy. But the 5,000 golf buddies — despite their free market rhetoric — are still reverting to GAR. To guided allocation, only in even smaller numbers, operating according to oligarchic principles of ferocious self-interest that go back to at least Nineveh.
If you want to explore this further, including how the notions of “allocation” and “faith in blind markets” get weirdly reversed, and how Smith and Hayek are betrayed by the people who tout them the most, see my article: Guided Allocation vs. Markets: An Ancient Struggle with Strange Implications.
Hence, at last, the supreme irony. Those who claim most-fervent dedication to the guiding principle of competition and enterprise — our neighbors who call themselves conservative and libertarian — have been talked into conflating that principle with something entirely different. Idolatry of private wealth, sacred and limitless. A dogmatic-religious devotion that reaches its culmination in the hypnotic cantos of Ayn Rand. Or in the Norquist pledge to cut taxes on the rich, without limit and despite the failure of Supply Side predictions ever, ever, every coming true.
An idolatry that leads, inevitably to the ruination of all competition and restoration of the traditional human social order that ruled our ancestors going back to cuneiform tablets — Feudalism.
Growing past the “left-right axis”
Let’s be clear. Every aspect of my argument, today, was from the perspective of an admirer of Adam Smith, of market enterprise, science and freedom. Not a single thing referred to socialist or left-wing parts of the spectrum. Sure, I hinted that some liberal endeavors — e.g. mass education, civil rights, child nutrition and national infrastructure etc. — empowered greater numbers of citizens to join the fair and open process of Smithian competition. But Smith was called “the first liberal” and liberalism isn’t “lefty” anyway.
No. This indictment of today’s right was made entirely from the core postulates of the libertarian right. Indeed, what Robb points out – and that I elaborated here – is a reason for sincere libertarians and conservatives to awaken and rebel against the hijacking of their movements.
This is an internal matter, a cancer within libertarianism and conservatism. If there are still honest and smart men and women within those old and noble traditions, they should think carefully, observe and diagnose the illness. They should face the contradiction. Discuss the conflation. Choose the miracle of creative competition over an idolatry of cash.
They should stand up.