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Can liberalism save capitalism from conservatism?
The resurgence of conservatism in American politics makes the question more urgent than ever
By Michael Lind
AP

Conservatives have long succeeded in persuading business that they are its friends and liberals are its enemies. In reality, the reverse is true. Liberalism saved American capitalism during the depression, and if American capitalism is to be saved from the Great Recession, liberals will have to rescue it.

Modern conservatives claim to be pro-business. But economic conservatism is not based on any empirical study of the actual economic requirements of successful modern industrial and service corporations in a modern mixed economy. The economic right combines an anachronistic tradition with a crackpot ideology.

The anachronistic tradition is Jeffersonian small-producer populism. Defending the rights of small farmers and small businesses was progressive in the 18th and early 19th centuries, when the enemies of freedom were aristocratic landlords who owned slaves and serfs and monopolies with royal charters. Although the industrial revolution rendered small-government Jeffersonianism obsolete by the mid-19th century, American conservatives continue successfully to appeal to Jeffersonian sentiments a century and a half later.

The crackpot ideology of the economic right is libertarianism. Libertarianism and communism are equally crazy in opposite ways. Libertarians believe that it is possible to privatize everything without anarchy, while communists believe that it is possible to socialize everything without tyranny.

Neither Jeffersonian populists nor libertarian ideologues have the slightest clue about how to run a complex technological society in the 21st century. Why should they? Jeffersonianism is a program for a primitive society of small farmers of a kind that no longer exists anywhere. At least, once upon a time, there were genuine Jeffersonian agrarian societies in the real world. There has never been a libertarian country and there never will be, because the maximum of government authority allowed by libertarian theory is well below the minimum required by a functioning community.

The true friends of business in America and the world have long been liberals, not conservatives. The propaganda of the right to the contrary, liberal thinkers like John Maynard Keynes and liberal politicians like Franklin Delano Roosevelt have never been socialists or collectivists. With the kindred classical liberals of the 19th century they have shared a commitment to individual rights, private property and limited government. However, they have believed that it was necessary to sacrifice some aspects of classical liberalism, in order to save as much as possible of the rest. Liberals have believed that limited doses of socialism would inoculate liberal society against totalitarian socialism as well as fascism and other illiberal systems. Indeed, Marxist radicals have often denounced American liberals and European social democrats for seeking to rescue and reform market society rather than replace it.

Unlike many radicals and populists on the left, liberals in the New Deal tradition do not believe that business elites are wicked or stupid as individuals. The problem is at the level of collective action. Even if all business owners and executives were completely virtuous and rational, in certain circumstances the pursuit by businesses of their legitimate short-term interests could produce disaster for the market economy as a whole. What is good for particular businesses may not be good for Business with a capital B.

The "paradox of thrift" that Keynes identified is one example. Today’s Great Recession has been prolonged because consumers and businesses are saving rather than spending -- a strategy that, while defensible in each particular case, results in economic stagnation when everyone saves and nobody spends.

But there are many other situations in which what is rational for an individual business is destructive to the market economy as a whole. Every business may want to pay workers the lowest possible wages. But workers are also consumers. What is more, the non-rich spend more of their income than the rich (in Keynesian terms, they have a higher “propensity to consume.”) This means that driving down the wages of workers, however it may benefit particular employers in particular industries in the short term, ultimately starves the economy of demand in the long run.

Even worse, if an increasing share of profits goes to a rich minority, the result is also likely to be a series of asset bubbles. The reason is that the super-rich, who already have enough possessions and savings, tend to use extra money to speculate on volatile assets: tech stocks, oil, gold, real estate, Picasso paintings. A highly unequal, low-wage, low-consumption economy that is repeatedly shattered by the popping of speculative asset bubbles cannot be good for business as a whole.

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AZGrizFan wrote:Salon as a source.

I won't even bother reading the article.

kalm wrote:It's called opinion Z.

AZGrizFan wrote:Salon as a source.

I won't even bother reading the article.

The "paradox of thrift" that Keynes identified is one example. Today’s Great Recession has been prolonged because consumers and businesses are saving rather than spending -- a strategy that, while defensible in each particular case, results in economic stagnation when everyone saves and nobody spends.

GannonFan wrote:There's not a real lot of meat to the article - just opinion that one political thought is good and the other is bad. When you start calling one side "crackpot", it tends to diminish the credentials of the piece (and I'm not even a fan of libertarianism as a whole either, I just don't call it crackpot). Besides, the article assumes that conservatism is almost entirely libertarianism and that there isn't any ground between that and liberalism. Like I said, a pretty puff piece.

Rob Iola wrote:I read the article - it's an article essentially supporting Keynesian (demand side) economics, boiled down to this paragraph:

The "paradox of thrift" that Keynes identified is one example. Today’s Great Recession has been prolonged because consumers and businesses are saving rather than spending -- a strategy that, while defensible in each particular case, results in economic stagnation when everyone saves and nobody spends.

There are 2 basic problems with this in the current "Great Recession": 1) The Obama government has been borrowing and spending vast sums of money (and has just basically printed $600 Billion more) with no discernable benefit, and 2) today's stagnant economic environment is due to the lasting impacts of the housing crisis and the uncertainty of government regulation and taxation going forward.

Demand in the form of consumer spending will not increase until they have money to spend - i.e., stable employment. Employment growth will occur when businesses have reason to grow their businesses - i.e., stable marketplace and regulatory/tax environment.

Cap'n Cat wrote:

GannonFan wrote:There's not a real lot of meat to the article - just opinion that one political thought is good and the other is bad. When you start calling one side "crackpot", it tends to diminish the credentials of the piece (and I'm not even a fan of libertarianism as a whole either, I just don't call it crackpot). Besides, the article assumes that conservatism is almost entirely libertarianism and that there isn't any ground between that and liberalism. Like I said, a pretty puff piece.

Um, Baldy, you reading this???? You "extreme radical" Conk!

native wrote:Can Liberalism Save Capitalism From Conservatism? No.

Although conservatism does occasionally require prodding, it ultimately preserves and protects the best of society and the human race.
Progressivism itself, despite occasional flashes of achievement, ultimately has the power only to delude and destroy.

native wrote:Can Liberalism Save Capitalism From Conservatism? No.

Although conservatism does occasionally require prodding, it ultimately preserves and protects the best of society and the human race.

Progressivism itself, despite occasional flashes of achievement, ultimately has the power only to delude and destroy.

Chizzang wrote:

native wrote:Can Liberalism Save Capitalism From Conservatism? No.

Although conservatism does occasionally require prodding, it ultimately preserves and protects the best of society and the human race.

Progressivism itself, despite occasional flashes of achievement, ultimately has the power only to delude and destroy.

Wow...
Liberalism in regards to "society" vs. Liberalism in regards to "Political structure" are 90 degrees of separation and are almost two completely different arguments and can never be spoken of in one sweeping generalized statement…
Sorry native - Limbaugh vagaries and Beck gibberish with no actual substance equals = Fail

native wrote:

Chizzang wrote:
Wow...
Liberalism in regards to "society" vs. Liberalism in regards to "Political structure" are 90 degrees of separation and are almost two completely different arguments and can never be spoken of in one sweeping generalized statement…
Sorry native - Limbaugh vagaries and Beck gibberish with no actual substance equals = Fail

You are not much for historical facts, eh, cleets?

I do not begrudge your point of view, but your willingness to acknowledge only those "facts" Noam Chomsky allows is disappointing and unworthy of your intellect.

P.S. Although they are not without merit, I rarely listen to Limbaugh or Beck.

Chizzang wrote:

native wrote:
You are not much for historical facts, eh, cleets?

I do not begrudge your point of view, but your willingness to acknowledge only those "facts" Noam Chomsky allows is disappointing and unworthy of your intellect.

P.S. Although they are not without merit, I rarely listen to Limbaugh or Beck.

All Politics aside
Two examples of Conservative Societies:
China
Iran

Two example of Liberal Societies
America
Canada

As Max Charlesworth writes:
“In a liberal society personal autonomy, the right to choose one’s own way of life for oneself, is the supreme value.”

Accordingly, a liberal society makes a sharp distinction between the sphere of personal moral views and that of the law; no one can use the law to impose their beliefs on others

native wrote: My frustration with many of your posts comes from the self-unaware biases of your worldview.

kalm wrote:

native wrote: My frustration with many of your posts comes from the self-unaware biases of your worldview.

That is so awesomely condescending all I can say is

native wrote:I will say this for you and cleets, kalm. You put more intellectual effort into your posts than the rest of the libs, and are more difficult to trap.

Although you both change the subject and turn a blind eye to facts and legitimate analysis more often than not, you rarely resort to personal attacks and name calling.

kalm wrote:

native wrote:I will say this for you and cleets, kalm. You put more intellectual effort into your posts than the rest of the libs, and are more difficult to trap.

Although you both change the subject and turn a blind eye to facts and legitimate analysis more often than not, you rarely resort to personal attacks and name calling.

**** off you dick.

native wrote:

kalm wrote:
**** off you dick.

I win again.

kalm wrote:

native wrote:
I win again.

You must get tired of winning all the time.

native wrote:

Chizzang wrote:
All Politics aside
Two examples of Conservative Societies:
China
Iran

Two example of Liberal Societies
America
Canada


As Max Charlesworth writes:
“In a liberal society personal autonomy, the right to choose one’s own way of life for oneself, is the supreme value.”

Accordingly, a liberal society makes a sharp distinction between the sphere of personal moral views and that of the law; no one can use the law to impose their beliefs on others

The conservatism of Iranian culture lies in Zoroastrianism and centuries of Persian culture, neither of which the mullahs respect or attempt to preserve and protect. Iran is an Islamo-fascist regime, not a conservative one. Although there have been relatively liberal caliphates throughout history, sharia law is inherently fascist and bigoted. The "Revolutionary" Iranian regime is only a modern version of its twisted heritage.

China is not politically conservative. The conservatism of Chinese culture lies in Conficiansim, which the communists tried unsuccessfully to destroy for 50 years. Chinese culture is intensely ethno-centric and racist, however. Han Chinese ethnocentrism makes overbearing Yankees look like amateurs.

America and Canada remain conservative cultures at the core, while integrating many of the best aspects of classical liberalism. In fact, most North American conservatives are classical liberals in many respects. The current state of liberalism in America owes too much to communism and bears little resemblance to its honorable classical heritage.

Nice post, cleets. We probably agree more than we disagree. Maybe it comes down to definition of terms. My frustration with many of your posts comes from the self-unaware biases of your worldview.