The Road to Serfdom is Paved by Conservatives

Reprinted from EconLib

For the last ten years I have been baffled as I watched the conservative movement devolve into a weird wing of progressivism—especially on economic issues. While once at least paying lip service to limited government, fiscal prudence, and personal responsibility, conservatives now ignore the size of government and fiscal responsibility. They increasingly call for a larger child tax credit, a universal basic income, and paid leave arranged and ensured by the federal government. Many conservatives now also proudly embrace tariffs, hyperactive antitrust, and industrial policy (often justified, of course, as necessary to ‘fight’ China).

Conservatives – or at least the more politically active ones – are reverting to their 1920s selves (See Matt Continetti’s book, The Right: The 100 year war for American Conservatism.) I failed to see this reversion occurring, in part because I moved to the United States in 1999 and was until recently fairly ignorant of the history of the conservative movement- and how the last forty years were more an exception than the rule.

I fear that this recent trend is just the beginning. It won’t be long before the conservatives’ platform is a full-on version of big government, big business, and big unions. It’s depressing.

It is hard not to wonder if the liberty movement is now failing to follow in the footsteps of Hayek, Friedman, and other great 20^th-century champions of freedom. It’s important now to recognize that on most fronts the challenges faced by the first- and second-generation members of the Mont Pelerin Society were, if anything, greater than what we champions of freedom face today. After all, people in 1947 – or even in 1987 – could not, as we can today, point to the actual collapse of the socialist states as evidence of the dangers of collectivism. And yet Hayek and his peers left us a world that was more accepting of free trade and free-market economics, even if these liberal policies were not the default position.

Perhaps a more optimistic way to view the current situation is to be inspired by those who fought for a more classical liberal world at a time when things looked particularly grim. Rather than despair, get energized by the challenge. But this raises the question of what is the best way not merely to preserve the flame of freedom but to spread it. What the next steps are, I do not know. I am open to your suggestions. The private sector continues to deliver innovation, growth, and widespread prosperity. But as of today, few people are willing to acknowledge that it is the free-market system that allows these wonderful things to happen, and that while of course imperfect (often because impaired by government interventions), any alternatives would be much worse.

How do you fight the battle of ideas when so many people distrust the institutions that host those of us who produce and apply these ideas? I have spent most of my professional life producing work to show that arguments for government interventions are bunk. For instance, in this new paper with Chuck Blahous, he and I take on the new conservative recommendation that Social Security be used to provide paid-leave benefits. We show, again, all the ways that this is a terrible idea. Of course, I believe that work such as this is important, since these are serious propositions introduced in Congress and supported by a fairly large number of conservatives. But is there a better way?

In this new paper, Gary Leff and I argue that next time legislators are tempted to bail out airlines ostensibly to ensure that they will be ready when the economy reopens, the public should remember the actual, depressing results of the most recent such bailout. But Congress won’t change its response unless we change the incentives politicians face during the next emergency. How do we do that? After all these years, I still don’t know.

Maybe it is more effective to offer a vision of what a libertarian world looks like. This is what Aaron Powell does in this edited volume. I recommend it. I think this approach describes also a lot of the work of Bryan Caplan. He inspires by offering a vision of what a world would look like without government subsidies to higher ed, a world with largely open borders, and a world with radically fewer restrictions on home building.

The Fraser Institute’s Economic Freedom Index offers such a vision, because it is a concrete way to illustrate what countries with less economic freedom look like compared to those with more freedom. The 2022 Economic Freedom of the World Report was released earlier today; all countries have declined in economic freedom, thanks to over the top pandemic responses, but the U.S. has actually declined even more relative to other countries. The U.S. rating fell by twice the amount of the average reduction worldwide. The U.S. is at its lowest level of economic freedom in four decades.

The bottom line is that while I am usually an optimist, I find myself increasingly worried and wondering what we did wrong and what to do next.