There are dozens of conservative “think tanks”, well funded by corporations and the oil lobby, that spew out volumes of “credible evidence” supporting the libertarian point of view on the economy. Their views are buttressed by right wing press and media, effectively brainwashing the American people to not believe two basic contradictions that destroy the right’s position.
The first contradiction is that individuals competing in a scarcity environment are more efficient and effective than cooperation and coordination on an organized scale. You hear the comment constantly that “the free market” will solve everything from health insurance failure to rebuilding Iraq.
The contradiction can be found in any cursory study of social science. The contradiction is: Individualism and unregulated competition will work in a plentiful environment, but fails in direct relationship to the scarcity of resources. In short, individualism works in a land of plenty but fail to produce a strong economy in a land of scarcity.
Hence, in America’s first two hundred years, an unregulated economy worked to build a nation; with the nagging exception of course, that slavery and land theft from Native Americans graphically assisted Manifest Destiny.
In an economy of unbelievable plenty, individualism and full competition did result in the acquisition of huge wealth to Americans.
The Great Depression changed all this. Suddenly the laissez-faire approach, allowing economic cycles to self correct and using natural resources at a frenetic pace nearly destroyed the country. Leaving unrestrained competition and selfishness unregulated resulted in massive poverty and despair. Moreover, the lack of regulation resulted in a huge disparity between the rich and the poor, which nearly drove the nation to revolution.
Roosevelt saved capitalism from itself with the New Deal; that conservatives immediately hated (once the danger of rebellion had passed). While judges were being lynched for foreclosing on farms, you could not find many loyal conservatives calling for more laissez-faire.
Today, this contradiction is devastating to the conservative cause. Regardless of the anti-communism of Ayn Rand, rampant individualism has again failed miserably to provide economic success. It is indeed curious that of all people, Ayn Rand, discredited when she was alive, is now a hero of the radical right. Her philosophy of unbridled greed and avarice was a footnote of the anti-communism of the 50s and 60s, read by a few, believed by hardly anyone.
The Wall Street disaster of 2008, coupled with an almost insane Fed Policy of conservative Alan Greenspan, resulted in an economic collapse on the scale of the Great Depression. Only through timely governmental intervention was a depression averted.
Typically, conservatives hated this most recent government intervention, even though it saved their portfolios. The super rich survived the housing bubble just fine, the middle class was crushed. America’s economy is permanently damaged.
Of course, no conservative even likes to talk about this first contradiction; that individualism and unregulated economic competition produces social and economic injustice and doesn't grow the economy. They continue the fallacy, drumming away at what is left of the middle class, who continues to swallow the myth to their detriment. An effective deception tool is the fallacy that tax cuts stimulate the economy; middle class voters keep voting for tax cuts and can’t figure out why huge government deficits are produced; it’s the revenue stupid!
The second contradiction is that socialism is inherently evil, anti-democratic, and damages the economy.
This position again ignores social and scientific evidence.
Countries that combine socialism in applicable areas with capitalism in others are currently out-competing the United States in the global economy, in spite of the current economic damage caused by world recession.
China, Germany, India, Brazil, France, even Japan, are all examples of countries whose economies are outperforming the United States. The global economy, operating in an atmosphere of increasing petroleum scarcity, in fact, rewards planned economies. It is not 1945, when the United States stood alone with massive resources and the rest of the world in ruins. Planned economies, centralized decision making, works to the advantage of global economic performance.
Socialism works well with large scale needs; health care, transportation, defense, and education. It does not work well with innovation and product development. Conservatives have NEVER understood this.
China, with a political dictatorship, has no problem in mixing socialism in some areas with rampant capitalism in others. Any study of China’s economy will note the irony of a “communist” regime, who merrily mixes socialism with entrepreneur capitalism in a way that is devastating the American economy. Why the United States will not do the same is because of conservative fanatical resistance. We are being Wal-Marted to death.
The growing scarcity of petroleum is critical in this analysis. The era of cheap, plentiful oil is over. Unfortunately for the United States, conservatives led by the oil lobby, have tied our economy to the mistaken assumption that cheap oil will last forever and any governmental intervention to mitigate this is “socialism”.
Meanwhile, many Europeans do not need a car to get to work, while Americans cannot work without a car. And, any efforts for to grow public transportation, is resisted like gun control, by conservatives who hate trains, hate hybrids, and proclaim “drill baby drill” is the answer to oil scarcity.
Planned economies, with specific socialism solutions, will prevail in global economic competition because of their strategic visions for the future; taking into account growing scarcities, educational needs and health care for all. In spite of the current problems of deficits in some European countries due to the global recession, mixed economies have a decided advantage over one-dimensional ones; like the United States under conservative leadership.
In a word, the dream of conservatives for a one-dimensional economy along laissez-faire, small government, return to 1890 lines, is leading the United States into third world economic status. The political and economic “purity” of conservative dogma is based on an economic theory that is being discredited everyday by the global economy. The world indeed is “flat” and conservatives don’t get it.
So, two contradictions: one, a fanatical belief that individualism will prevail in the global economy of scarcity; two, that socialistic solutions for certain applicable economic needs is wrong, are leading the United States to economic ruin and ironically the end of American “exceptionalism” .
