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Capitalism Over All

By: Johnathan O'Neill
January 24, 2018

eter Kolozi's Conservatives Against Capitalism: From the Industrial Revolution to Globalization examines American conservatives' criticisms of capitalism, and markets generally, from the antebellum period to today. Conservatives are appropriately conflicted about this topic. Indeed, recent exchanges on these matters in the Claremont Review of Books, First Things, and National Review have constituted the most pointed discussion in decades. This development derives most proximately from the political problems related to Donald Trump’s harnessing of the populist anger and economic grievances expressed by many Americans. Conservatives are once again rethinking their relationship to capitalism and questioning whether the founders’ commitment to old-style liberalism leads inevitably to a regime of selfish appetites and the concomitant neglect of the public good.

Kolozi, associate professor in the Department of Social Sciences at the City University of New York, provides some background for the current debate. He analyzes the pro-slavery critique of Northern society, late-nineteenth century economic and territorial expansion, Southern Agrarianism, post-World War II traditionalism, and neoconservatism. His final chapter and conclusion treat the “paleoconservative” critique of global capitalism and the rise of Donald Trump. Conservative criticism, argues Kolozi, has gradually come to accommodate capitalism. For Kolozi, the time has arrived for conservatives to return to a more basic rejection of the system.

Kolozi defines capitalism as “an economic system in which the means of production are privately held and operated for profit.” The allocation of resources in a capitalist system is set by prices “based on the law of supply and demand and is premised on the idea that self-interested individuals participate in a competitive market where they buy and sell their goods, services, and labor.” That much is true. Nevertheless, the book frequently offers “laissez-faire capitalism” as the object of conservative criticism. Readers are given neither a careful definition of this descriptor nor a historical example of its operation.

This target of supposedly justifiable conservative ire never actually existed in America. In the founding and early national periods government was widely involved in the economy.  Its actions included everything from occupational licensing, inspections of goods, and rate-setting, to the prohibition of alcohol, subsidies for fledgling industries, and state sponsorship of infrastructure improvements was regulated. Even in the Gilded Age the Supreme Court upheld most regulations, including railroad safety regulations, various health and morals legislation, working hour restrictions, physician licensing, and alcohol prohibition. To be sure, American commerce abounded and capitalism evolved, but laissez-faire never existed. Too often Kolozi has conservatives protesting capitalism in its most extreme form, when in fact neither they nor anyone else in the nation’s history ever experienced it.

Nor is it clear that conservatives proffered any basic alternative to capitalism. Southern slave owners knew slavery was becoming more profitable and that their fortunes were wed to participation in the international market. They were “against capitalism” only insofar as they rejected wage labor in favor of slave labor, arguing that the latter was more “humane.” The post-World War II Southern Agrarians, despite their critique of corporations, materialism, and industrialism, did not envision a social order absent the market. As Kolozi relates, private property in land was the basis of the Agrarians’ philosophy, and they rejected socialism and communism. Their call for land redistribution, particularly the large holdings of absentee and corporate owners, was not expropriative, but tied to government compensation.

Agrarians’ advocacy of high corporate taxes and big business regulation, and even their support for publicly owned utilities, is perfectly compatible with capitalist economics. These things are statist moderations of capitalism, not fundamental alternatives. Likewise, it is unsurprising that post-War traditionalists did not repudiate capitalism amid the Cold War battle with communism, even as they lamented crude materialism’s cultural and political effects and the centralization of power in the administrative state. Nor is the paleoconservative demand for economic nationalism a rejection of capitalism so much as an insistence that the government take a more active role in defending the American interest via such things as protectionism, subsidies, immigration restriction, and regulations that do not favor politically connected government cronies.

At times Kolozi recognizes such points, but a fuller appreciation of them constrains the reach of the book’s thesis. Capitalism’s conservative critics are better understood as questioning the role and purpose of government action within the capitalist economy―the extent of its intervention and for what ends―while realistically accepting that capitalism itself would not be abolished. This would have emerged more clearly if the book had given some attention to the American founding. Detailed study of this era has established not only that laissez-faire was a myth, but also that America was founded as a modern commercial republic in which the market basis of the economy was never seriously questioned. As a modern regime oriented most fundamentally toward rights and self-interest rather than virtue, America was born accepting competition and commerce. Consequently, it evolved easily toward capitalism in its various historical forms. That said, the Constitution and its underlying political science did allow significant latitude on questions of political economy. The purpose and extent of government action in the economy was left to future political deliberation, with the understanding that these decisions would occur within the capitalist system of private property, market competition, and profit-seeking.

Conservatives Against Capitalism is most helpful as an overview of what conservatism’s different branches found troubling about capitalism at different times, and how conservatives thought the state ought to respond. Accordingly, another of its lessons is that anti-statist libertarian economics was not always as influential in conservatism as it is now. Though conservatives understood that hierarchy and inequality were natural and unavoidable―and so never expected the state to undertake the egalitarian redistribution of Kolozi's longing―they often thought that the state should moderate some of capitalism's effects. Likewise, various conservatives argued that state intervention could alter conditions so that inevitable human differences would produce “excellence and distinction.”

We can accept that analysis without approving the reduction of conservatism to “the freedom and ability of some people to dominate, control, and extract from others, which capitalist inequality and hierarchy make possible.” This calumny aside, conservatives need not automatically oppose economic regulation or welfare provision. Any such absolutism bespeaks either acceptance of the progressive myth of laissez-faire brutalism, or else an extreme form of libertarianism that wrongly dismisses even thin conceptions of the public good, social order, or moral duty. On one hand, any regime that wishes to respect human liberty and to prosper must base its economy on private property and market exchange, as nearly all conservatives today would affirm. In this sense there is no realistic alternative to capitalism, a fact well-known by the founders before it was confirmed by the bloody horrors and abject failures of communism and socialism.

On the other hand, capitalism über alles has never been a definitively conservative position in light of other goods. Accordingly, this book’s greatest value is in reminding us that conservatism has neither simply endorsed capitalism nor rested easy with its inherent dynamism and destruction. The book’s greatest shortcoming is in overestimating how much the actors it analyzes thought it possible to stand outside the capitalist system, or to create a workable alternative to it, as opposed to the more limited critical endeavor they actually engaged in. These issues are once again in the foreground of contemporary conservative political discourse. Responsible conservatives cannot consign to oblivion the millions of grassroots Americans who love their country but feel neglected and exploited by its economic policies, any more than they can expect to resolve the nation’s ills by a benighted policy of autarky.