Sam Gregg argues that conservatives need to stop shying away from principled defenses of economic freedom.

Conservatives and the Non-Triumph

 of Capitalism

by Samuel Gregg

Conservatives need to stop shying away from principled, as opposed to merely utilitarian, defenses of economic freedom and its associated institutions.

In recent contributions to First Things, theologian R.R. Reno and legal scholar Robert T. Miller have debated several questions concerning conservatism, capitalism, and the government's economic role. Obviously the discussion is complicated by the inexactitude of words like "conservative" and "capitalism." But fundamentally, their debates address the present-day scope of economic freedom in America and throughout the world.

Are we, as Reno claims, living in the age of the market economy's triumph? Or are we, as Miller maintains, in fact witnessing significant erosion of freedom throughout much of America's economy? But could it also be that this discussion, as important as it is, doesn't engage one area of debate about the market that some conservatives seem quite reluctant to address?

One of Reno's contentions is that capitalism generally has no significant rivals today, unlike, say, the situation that existed before communism's collapse. In that sense, he argues, markets have triumphed.

But Reno also holds that capitalism's very success means that the turmoil of creative destruction, unleashed on a global scale, is harming America socially and economically. For Reno, this means conservatives should accept the necessity of politically limiting "economic freedom, whether directly through regulation, or indirectly, through taxation."

In response, Miller points out that economic conservatives aren't generally against regulation per se as a tool for addressing economic problems. Economic conservatives have, however, usually studied regulation's effects very carefully and, while sometimes willing to affirm it in particular areas, are consequently attuned to regulation's far-too-often counterproductive results.

Miller also notes that "in the United States today we have vastly more economic regulation than at any time in the past." He stresses, for example, that the financial sector is now subject to literally thousands more pages of regulation than thirty years ago--and that's not even including the pages of Dodd-Frank (not to mention all the interpretive glosses by courts and regulatory authorities that will emerge). Likewise Miller underscores that government programs that were supposed to have some of the tempering effects that Reno thinks we need have been in place in America for a very, very long time.

Some fiscal conservatives are certainly too sanguine about creative destruction's unintended negative effects on our lives. But these side effects are not sufficient reasons to try to slow or even stop the process, let alone assume that higher taxes and the welfare state (which itself breeds plenty of dysfunction) are the appropriate response.

Still, it doesn't seem wise to play down these negative impacts. Given the conservative commitment to limited government, it would seem that the authentically conservative response would be to investigate and apply Tocquevillian "civil society" solutions to such problems before looking to the state for remedies.

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