Sunday, September 5, 2021

The conspiracy theory of free enterprise

 Free Enterprise as Conspiracy | American Institute of Economic Research - Phillip W. Magness:

 August 25, 2021 - "The recent surge of academic interest in 20th century conservatism, libertarianism, and associated developments in free-market economic thought also carries with it a curious historiographical implication. Encompassing contributions by authors such as Kim Phillips-Fein, Quinn Slobodian, Bethany Moreton, Kevin Kruse, and Nancy MacLean, the genre varies widely in scholarly quality. Its contributors nonetheless share a pronounced ideological hostility to their subject matter, which in turn shapes how they select and construe their source materials.... 

"The approach taken in these works essentially conspiracizes ... routine historical records from disliked conservative, libertarian, or free-market sources as if they were evidence of a collective will to politically transform the mechanism of history in ways that disrupt a specific course of progressive political development desired by the author. A predictable assortment of problematic consequences in the present allegedly follows from the decades-long designs they claim to have identified: the 2007-2008 financial crisis, environmental degradation, rising inequality, the political ascendance of the religious right, and Trump.

"Lawrence Glickman’s Free Enterprise: An American History offers the latest contribution to this booming yet peculiar subfield. Styled as an intellectual history of the concept, his thesis holds that 'free enterprise' is essentially a constructed mythology that arose from political opposition to the New Deal. Over the course of the 20th century, this version of 'free enterprise' recast economic interventionism as an aberration from an artificially constructed history of the pre-Roosevelt American economy.... In his telling, the myth’s expositors — mostly a group of business interests and associated free-market intellectuals — set out to morally 'delegitimize' the New Deal order and with it 'the most basic functions of government,' namely taxation, regulation, and public expenditures....

"In Glickman’s telling, that attack amounted to a 'one-sided war' upon the New Deal by business interests and other defenders of 'free enterprise,' all rooted in the aforementioned myth-making. While he offers a moderately interesting etymology of the phrase ... dating back to the nineteenth century, the core of his myth-making narrative suffers deeply from the epistemic distortions of the book’s ideological hostility to its subject. In particular, Glickman’s own political commitments to the New Deal (and progressivism more broadly) effectively render him unable to even fathom the existence of valid economic criticisms for Roosevelt’s policies, or their long-term effects on the United States’ fiscal picture to the present day. Rather, the New Deal is simply 'an outgrowth of democratic processes' and unassailable as such. Its critics, past and present, are ,,, casually brushed aside as expositors of a near-religious devotion to the artificially constructed 'free enterprise' concept. This rhetorical move allows the author to sidestep any engagement with salient criticisms of New Deal policies and political actors. It’s much easier to recast the critics as fanatics under the 'talismanic' trance of a dismissed concept.

"Glickman accordingly bristles at the suggestion that the New Deal unintentionally “prolonged and deepened rather than ameliorated the Depression,” even as modern empirical scholarship has lent strong support to that exact contention.... He discounts any concern with the deficit-inducing budget strains of Social Security and similar programs on account of their popularity.... He similarly sees only fear-mongering over the specters of European communism and fascism in contemporary business complaints about Roosevelt’s affinity for economic central planning.... One need not speculate that the early New Dealers drew inspiration from Europe’s totalitarian regimes in the decade before the world descended into war with those very same powers. They openly boasted of doing so themselves....

"An unfortunate result is an ostensible history of 'free enterprise' that almost completely omits the concept’s historical use as a philosophical foil to the Soviet Union and central planning. In fact, Glickman consciously excludes this dimension from his study at the outset by little more than a wave of the hand: 'Although what we might call "the age of free enterprise" … coincided almost precisely with the Cold War battle against Soviet communism, proponents described the dire threats to the system as primarily domestic, not foreign.' The severity of the error in this assessment may be readily ascertained by looking no further than mainstream mid-century political discourse. 

"As Dwight Eisenhower contended in a celebrated 1950 speech that helped to propel him into the presidency, the communist world had 'embarked upon an aggressive campaign to destroy free government… because regimentation cannot face the peaceful competition of free enterprise.' Or consider Harry Truman’s 1953 State of the Union Address, recounting that the Soviets had predicted an American reversion into the Great Depression after the end of World War II: 'We answered that question—answered it with a resounding "no".... Free enterprise has flourished as never fore.' John F. Kennedy’s never-delivered Trade Mart Address from the day of his assassination planned to contrast the military ambitions of international communism with 'the strength and skill of American science, American industry, American education, and the American free enterprise system.' Or as Lyndon Johnson succinctly put it in a 1964 interview, 'we have one thing [the Soviets] don’t have, and that is our system of private enterprise, free enterprise.' By attempting to pigeonhole the term to its domestic political uses, Glickman has somewhat astonishingly managed to completely miss its central place in mid-twentieth century geopolitics."

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1 comment:

  1. I was several years shy of 30 when the Soviet Union disintegrated. Now I am almost 60, so more than half my life has been lived in the absence the Soviet Union, and yet you are still trotting out the "it's all Soviet propaganda" line.

    In my lifetime, everything the free market economists asked for, they got. We slashed corporate tax rates, slashed top-level income tax rates, slashed red tape, gutted the labour laws. It was supposed to lead to a new era of boundless prosperity, and it did -- for the top 12% of society, the CEO class and the one immediately below that, whether you call it the managerial or the professional class. Salaries for the top 12% have risen exponentially throughout my lifetime.

    For the bottom 88%, not only has nothing improved, but things have gotten in many ways worse. The working man of today is less likely to own his own home, is less likely to take a regular annual vacation, is less likely to be able to look forward to retirement on a secure pension, than his father. The productivity of the economy has quadrupled since the fall of the Soviet Union, and not one lousy penny has trickled down to the working man.

    I remember studying economics in high school. We used to be taught that a good company aims for a 10% profit margin. Now 40% is not unusual. We used to be taught that a company raises wages in good times and may have to lower them in leaner times. Now companies never cease looking for ways to cut wages, whether it be boom or bust. In good times the owners take home all the cookies, and in bad times they still take home all the cookies, although they may be smaller.

    Nobody can pretend any more that "a rising tide floats all boats" or that the benefits of our spectacularly-successful economy will "trickle down" to the working class. It hasn't and it won't.

    The word "conspiracy" is highly over-used and rarely is it literally true. But confluences of interest do occur, and it's no surprise that think tanks endowed by oil company billionaires produce brilliant essays positing that oil company billionaires are good for society.