McCloskey Week: The Moral Case Against Obamanomics

Writes Peter Wehner in Commentary and The Weekly Standard about the current political situation:

[I]t does strike me that a compelling moral argument on behalf of conservative economics specifically, and capitalism more broadly, has been sorely missing from the public debate.

Well, you could start with the moral case put forward by Deirdre McCloskey in her Bourgeois Cycle -- The Bourgeois Virtues and Bourgeois Dignity. She says, more or less, that the difference between our modern middle-class society and the previous oppressive regimes is the revaluation of the things that bourgeois, middle-class persons do.

Back to start: Conservatism's Big Problem.

Under the old regime we had an "elite of Brahmins and warriors [living] by the dignified collection of rents and taxes imposed on the lower classes."

So now in the liberal welfare state we have liberal Brahmins and tenured class warriors living on the dignified proceeds of the progressive tax and regulatory system.

What is needed, in McCloskey's terms, is a reevaluation of the worth of liberal activities: taxing, spending, regulating, dividing, blaming, subsidizing when compared with bourgeois activities like innovating, producing, serving, building, anticipating, trusting, cooperating, competing.

It seems, against all odds, as though this is actually happening. That is why the Democrats are sitting around in a state of shock. Because, against all odds, the Great Recession of 2007-2009 has resulted not in a frightened populace eager to be led to safety but an angry Tea Party pointing the finger at bailouts and handouts to favored Democratic political constituencies.

The heart of McCloskey's argument is that it was not thrift, or a Puritan ethic, or the transport revolution, or the piling up of capital, or coal, or the slave trade, or imperialism that created the freedom of the past two centuries. That's not what created the economic Hockey Stick of the last two hundred years that has built an economy where the average American spends $120 per day instead of $3 per day, and can live a life of greater scope and moral depth than under the old daiy necessity of getting food.

The difference was that, for the first time, the bourgeois code of innovating and inventing and adjusting was valued and appreciated rather than considered low and dishonorable. It is not surprising that the central idea in left-wing rhetoric from Marx to the Fabians to today's "progressives" is to damn the middle class, the higgling of the market, and the people that bury us in goods and services, the evil corporations. The whole point of the class warfare strategy is to marginalize the people that respond to market changes, that anticipate the needs of the consumer and make a lot of money out of it.

The net-neutrality push by liberal foundations is a prime example of this. God forbid that internet providers should start charging a premium to people downloading movies and videos. People have rights!

A central argument of McCloskey is that we are what we think. We got the society of freedom and the economy of innovation because people got out there and said freedom is good, innovation is good. Liberals are going around saying regulation is good, free stuff from the government paid for by the rich is good.

The moral case against Obamanomics centers around the moral case for freedom and the right of people to order their lives without getting permission first from the government.

This shouldn't be that hard. Government screws up everything it does, and the policy of force that is buried in every government program always leads to tears. If we conservatives and libertarians can't convince the American people of the moral and practical worth of our ideas for each individual American, then we deserve a generation of Obamas and their big government delusions.

Next: It's Not What You Think.

McCloskey Week: Bourgeois Dignity

What did it? What was the cause of the Hockey Stick? No, we are not talking about Michael Mann's hockey stick, the spurious "hide-the-decline" surge in global temperatures in the last century. We are talking about the real hockey stick, the extraordinary surge in human well-being in the last two hundred years.

Back: Conservatism's Big Problem.

As Deirdre McCloskey reminds us, time and again in her Bourgeois Cycle, right through volume one, The Bourgeois Virtues, and volume two, Bourgeois Dignity, we are talking about a staggering change. In 1800 humans on average subsisted on about $3 per day in today's dollars. Today, in the United States, we each of us get to dispose of $120 per day. That is forty times the spending of two centuries ago.

And even that really underestimates the change. I recently watched the promo movie at the Boeing visitor center at Paine Field, Washington. They had a shot of a Mayflower-style ship. In the days of sail, it took thousands of hours to get from London to Seattle. Now you can do it in ten. And there are a whole bunch of other things we have today which weren't available to the richest and most powerful of humans two hundred years ago.

The key thing that changed, according to McCloskey, was not technological change, but a cultural, rhetorical change. About three hundred years ago, around the North Sea, societies started to respect the commercial bourgeoisie and the things that it did. It allowed, for the first time, the bourgeoisie to do what comes naturally, to innovate and change things.

That's why McCloskey would rather not call our present economic system "capitalism." The real essence of the modern era is not capital, piles of money, or ruthless accumulation. It is the spirit of innovation, of seeing an opportunity and taking it. "I seen my opportunity, and I took it," said the ward-heeler George Washington Plunkitt. We should call our modern system "innovation," she writes. What happened is that, about three hundred years ago, people stopped ragging on the bourgeoisie.

People stopped sneering at market innovativeness and other bourgeois virtues exercised far from the traditional places of honor [in religion, politics, and war].

All of a sudden, the traders and the merchants were according a dignity and a liberty they had never had before.

Even so, people really didn't realize what was happening. In the mid 19th century, the classical economists didn't really grasp that everything had changed. It was Macaulay, the last of the Whig historians, who really understood.

If any person... after the crash in 1720 [had told that] in 1830 the wealth of England would surpass all their wildest dreams,... that London would be twice as large... and mortality would have diminished to one-half,... that men would be in the habit of sailing without wind and would be beginning to ride without horses, our ancestors would have given as much credit... as they gave to Gulliver's Travels.

Of course our lefty friends still don't want to credit what has happened. That is because they can't get beyond the first stage of every capitalist improvement. The first person to benefit from a new idea is the capitalist innovator and his profit. But then the competitors rush in and everyone benefits from the innovation.

[T]he profits from innovation go in the first act mostly to the bourgeois rich. But in the second act... the poor get better off in real terms.

Of course, some people do suffer from innovation, and we have often not done enough to help them. Our liberal friends, the folks that McCloskey calls the clerisy, in the years after the failed revolutions of 1848--and indeed ever since--insisted upon seeing the capitalist economy as cruel and unjust.

But surely you cannot say that the principal cause of a rise in income from $3 per day to $120 per day was the cruelty of the capitalists in grinding the faces of the poor working class. Or indeed that it was the legislation of the welfare state. The increase in wealth was caused by innovation, middle-class entrepreneurs released from the bonds of age-old prejudice against risk-taking innovation, and allowed, finally, to do their stuff without being put in the stocks.

And when the opponents of the bourgeoisie got their way, in Russia, in Germany, in China, in Cuba, misery and poverty ensued.

You can't say all that enough, and Deirdre McCloskey, in her Bourgeois Cycle, says it. Again and again.

Next: The Moral Case Against Obamanomics.

McCloskey Week: Conservatism's Big Problem

There's a problem at the heart of the modern project of conservatism in America, and it's a simple problem. How can you hope to convince liberals of the truth of conservatism when conservatism is based upon three-hundred-year-old ideas?

F.S.C. Northrop identified the problem precisely in his Meeting of East and West.

The primary thing to keep in mind about German and Russian thought since 1800 is that it takes for granted that the Cartesian, Lockean or Hueman scientific and philosophical conception of man and nature... has been shown by indisputable evidence to be inadequate.

The secular religion and the politics of our liberal friends is based upon this faith. British empiricism and the American founding fathers are all very well, but they cannot speak for the modern era. Hence the need for an educated elite, a "living constitution," and a big federal government. As if to underline this, Russell Kirk's The Conservative Mind: From Burke to Eliot has absolutely no references to Immanuel Kant.

Sorry chums. If the conservative mind has nothing to say about Kant, whose transcendental idealism points in a straight line to Einstein, relativity, and quantum mechanics, then it's not going to appeal to the broad community of thinkers and doers of the modern era.

So what conservatives have needed, like an oasis in the desert, is a thinker to put the conservative case in the context of the entire three-ring circus of modern thought, starting where Hume left off with Kant, continuing through Hegel, Marx, Nietzsche, Heidegger, Sartre and the preenings of the postmodernists, and then ending up saying: well, that's all very well, but these chaps ultimately missed the point, and here's why!

I am pleased to announce that this prophet of conservatism has now emerged. Her name is Deirdre McCloskey, and her work is a grand apology for the middle class, an over-the-top Bourgeois Cycle built upon Wagnerian principles just like the Ring Cycle. That is to say: it is long, it is ambitious, it is insufferable, and it is brilliant. And it may never get finished. McCloskey is now 68ish, and has only finished the first two volumes of her multi-volume epic.

OK, so what is all the fuss about?

In the first volume, The Bourgeois Virtues: Ethics for an Age of Commerce, McCloskey argues for a return to virtue, all seven of them. Although the bourgeoisie insists that it is a practical venture, an effort of pure prudence, bourgeois actions belie this. The commercial middle class practices all the virtues, the four cardinal, masculine, pagan virtues of: Prudence, Temperance, Courage, and Justice; and it also practices the Christian, theological, feminine virtues: Faith, Hope, and Love.

The trouble is that the clerisy, particularly the post-1848 clerisy, has turned against a multi-faceted faith in all the virtues, and has plumped instead for the One Big Thing. In Kant, it was Duty.

Kant made a mistake in rejecting as a constituent of ethics the unreasoning particularities of philosophical anthropology or philosophical psychology.

A very guy thing to do, of course. No woman in her right mind would or could come up with a One Big Thing narrative of meaning. Although some have tried.

In Bentham the one big thing is utility. In Marx, the big thing is labor. It is a materialist view of life:

If virtues cannot be connected to self-interest or genetics, to utility or power, they are, in the early twentieth century philosophical term of Vienna and Cambridge, simply "meaningless."

McCloskey calls this the "Prudence Only" approach of the modern era. But Prudence-Only is not how the world works, and particularly not how the bourgeois middle class works. That's important because it is the commercial bourgeoisie and its virtues that has brought the western world from $3 a day of real material consumption in 1800 to $120 a day in the US today. Meanwhile the Prudence Only materialism of socialism and communism has created nothing out of nothing. What is needed is a return to the virtues, as the movement of virtue ethics has been doing since 1958.

You can see, very easily, how this sort of thinking solves the conservatism problem. It is exactly what conservatism has needed. We want a thorough discrediting of the One Big Thing ethos, which for modern American liberals means that liberals get to call all the big shots because they are more educated, more evolved, and more knowledgeable than the average bitter clinger. We want someone who can argue the hind tails off the liberals all day, and then go out and party all night. And now we have got it.

Next: Bourgeois Dignity.

A Century of Bad Faith

On the day after the Obama tax increase was averted, and the day after the $1.1 or $1.3 trillion omnibus spending bill was withdrawn in the Senate, it's time to think about what comes next.

Walter Russell Mead would like to create a Liberalism 5.0, and rescue the good name of liberalism from its betrayers. "Can the L-Word Be Saved?" he wonders. He would like to reform liberalism and learn the lessons of the last century.

But I think we need to grasp the profound bad faith that has been a part of liberals and liberalism almost from the start of what Mead calls Liberalism 4.0 in the late 19th century.

Obviously, the post-civil war era raised up new questions of power in society.

In the late nineteenth century, the rise of huge industrial corporations created yet another force that threatened to crush individual liberty; 4.0 liberals began to think about the state as a possible ally to defend individuals from unaccountable private power.

Yes, that's true, but I think it true to say that by 1910, when giant combines like Standard Oil had been broken up, and J.P. Morgan had personally, with the richest men in the US, bailed out the economy in the Crash of 1907, people of good faith should have concluded that the new giants of business were not robber barons but responsible servants of the market. After 1910 it was an act of bad faith to rouse up the common people against the power of the corporations. Take the BP oil disaster. Mother Jones has run an end-of-the-world cover story on BP's coverup. But the central fact about the BP oil disaster was that when President Obama said: "Jump," BP said: "How High?" and agreed to cough up $20 billion, sight unseen. That tells you who calls the shots between politics and business.

Again:

[T]he industrial revolution and mass immigration threatened to divide society into paupers and millionaires... A society including millions of impoverished urban workers from radically different cultural backgrounds could not be run exactly the same way as in the past; the situation grew even more complex as millions of African-Americans left Dixie for the big northern cities after World War I...

The development of a professional, bureaucratic civil service and the regulatory state were intended to preserve individual autonomy and dignity in a world dominated by large and predatory corporate interests[.]

Yes, but. Let's allow that some sort of emergency centralization was needed to manage the vast migration to the cities, and ward off the threat of revolutionary socialism. It has surely been obvious at least since the end of World War II that the heavy hand from the center is not really needed. The migrants to the city settled down pretty well, and didn't revolt despite the utter failure of centralized government in the Great Depression (spun by liberals as a stunning success). The capitalist system has rained down prosperity upon the once huddled masses, instead of impoverishing them as liberals prophesied. Instead liberals came up with more and more reasons to centralize society into the administrative state which, not coincidentally, gave more power to liberals.

(Yes, for one shining moment, liberals midwifed the civil rights revolution. But then they went back to patronage/clientage politics and the expansion of big government.)

Now think of the ways that liberals have brought a murrain down upon the people that trusted them with their vote.

Liberals told us that we needed a central bank. The result has been two gigantic financial meltdowns and the loss of 98 percent of the value of the dollar.

Liberals told us that we needed government operation of mutual aid and charity. The result has been the demolition of the mutual-aid associations and the conversion of labor unions into raw political pressure groups.

Liberals told us we needed government operation of old-age pensions. The result has been a bankrupt system and the conversion of the savings of the people into a political slush fund, for that is what the "surplus" of Social Security is used for.

Liberals told us that old people and poor people could not get access to health care without massive government management and taxation. The result is a corrupt and wasteful system that is already utterly failing the poor and will soon fail the ageing poor.

None of this is remarkable. we have always known that governments are incompetent and corrupt. But liberals said: Trust us, we will be different. We will staff government with a professional civil service and credentialed experts. Well, we ended up with a unionized civil service that loots government at all levels, and experts that cannot see further than the next government grant.

So I really wonder whether it makes sense, after this century of liberal bad faith, to resurrect the liberal concept. It's time acknowledge the truth, that liberal politics is a canard. For the last century it has almost always meant centralized power, incompetence, and corruption. The time has come to make a break with the failed past and open a new chapter in the story of democratic capitalism. We must acknowledge that the basic parameters of the market economy, its markets, its ethos of fair dealing, its culture of trust, need to he honored and respected and taught. And the educated elite that has refused to accept and honor the wealth-generating and trust-extending wonders of capitalism needs to be rusticated and its cruel fingers prized away from the levers of political power.

As we start the New Year in 2011, the lesson of the last two years of Obama/Reid/Pelosi is surely that liberalism is not liberal, and never can be. It is all about political power, corruption, and the culture of compulsion. And it always will be.

Let us proclaim this to the reverberate hills: Limited government is the system of government that limits the power of the political elite, whether that elite is a royal family, an aristocratic cabal, a business elite, or an educated elite. And we the people demand it.

Three Liberal Delusions

Liberals have erected an elaborate apology to justify the centralized administrative state run by liberals. They need this apology because at the heart of liberalism is a profound contradiction, writes Peter Berkowitz.

The paradox of American progressivism, old and new, is rooted in the gap between its professed devotion to democracy, or the idea that the people legitimately rule, and its belief that democracy consists in a set of policies independent of what the people want.

In order to deal with this contradiction, believing in democracy in the abstract, but determined to impose their agenda anyway, liberals have come up with three ideologies, says Berkowitz.

The first is John Rawls and Deliberative Democracy. John Rawls is famous for his Theory of Justice in which he sets up a contract theory of politics that justifies liberal politics.

According to Rawls, justice concerns the principles that free and equal citizens would adopt to govern themselves if they thought impartially, objectively, and rationally about their condition as human beings. It has two basic parts: fundamental and inviolable liberties, and an obligation on the part of the state to adopt "measures ensuring for all citizens adequate all-purpose means to make effective use of their freedoms" [emphasis added]...

But unofficially and in practice, Rawls's theory of justice, certainly as adopted by professors of practical ethics and applied to public affairs, is distinguished by more. It also purports to derive from "public reason," or the abstract principles and rules that structure public debate, substantive public policies and disqualify others. It's as if the rules of baseball told you not only how to play the game, but also who ought to win and who ought to lose.

Very convenient. It lets liberals decide what is legitimate and what is not. They know what the people would choose, "were it not for their poor education, combined with passions and prejudices corrupted by the imperfections of social life and the inequities of the market economy."

Then there is Richard Rorty and Pragmatism. This notion seeks to equate liberal progressive reform with justice itself. It is not so much pragmatic as picking up where the pragmatists like John Dewey left off, proposing democracy as a kind of civic faith: "democracy is neither a form of government nor a social expediency, but a metaphysic of the relation of man and his experience in nature." Rorty argues that:

the proper aim of American politics is nothing less than to embody in social and political life "a new conception of what it is to be human." And the utopian overtones are no accident. This new conception, Rorty reveals, rejects all claims to "knowledge of God's will, Moral Law, the laws of History or the Facts of Science." All the better, exhorts Rorty, to make "shared utopian dreams" the guide to pragmatic and progressive politics.

As with Rawls's ideas, Rorty is just providing a crude apology for the liberal faith. Liberalism is democratic because liberals call their program and their faith "Democracy."

Finally, Berkowitz calls up the "empathy" brigade, that we last saw justifying the liberal jurisprudence of Sonya Sotomayor. This Empathy, according to President Obama, is "a call to stand in somebody else's shoes and see through their eyes." The problem is that we are only called to empathize with the eyes of a "wise Latina." White middle class men need not apply.

The problem with these three liberal delusions is not that it deludes liberals into thinking that theirs is the only true democratic thought. The problem is that it does not engage with the real problem, the daily clash with reality: what do you do when things do wrong?

Government is force, politics is power. It is OK to use government for things that require force, like wars and policing. But what about things that don't require force? How do you fix a Social Security system that is going bankrupt? How do you balance the need of senior citizens for health care with the need of young parents for education for their children? How do you balance the desire of some parents for a creative education for their children and other parents for a Three Rs education? Centralized administrative government by an educated elite wants to set up a permanent, one size fits all answer to any political problem, and thus has no answer for these questions. For the truth is that all economic activity is characterized by ceaseless change and adaptation to new and unexpected conditions.

That is why liberals today are flummoxed and in denial. There is no allowance in their system for the reality that, as soon as their comprehensive mandatory program for health care, or education, or welfare is in place, it is immediately overtaken by events. From that moment on, the program finds itself trying to catch up with events and never succeeding.

Now you know why liberals are forced into demonizing their political opponents as racists and haters. For it cannot be, it must not be that the failures of all those government programs mean that a whole century of centralized liberal government has been one long disastrous error for which ordinary Americans are about to pay the terrible price.

"Class Warfare in Moral Terms"

Why not tax the rich until the pips squeak? After all, there are desperately poor people that need the money. You need to "spread the wealth" as then Candidate Obama told Joe the Plumber in 2008.

Well, now President Obama has bowed to political necessity and urged Congress to continue the Bush federal income tax rates, including the 35 percent top rate that Bush passed, reducing the Clinton 39.4 percent rate, but not yet getting back to the 28 percent top rate in the Reagan 1986 tax bill.

President Obama apparently accepts the notion that, in practical terms, now is not the time to raise tax rates, not while the nation is struggling out of a severe recession. But once the economy is out of danger, why not cream the rich and make them pay?

First, the facts. At the American Thinker today, my "Incomes Taxes, Millionaires and Billionaires" makes the point that the richest one percent, at current rates, already pay about 40 percent of federal income taxes while the bottom 50 percent pay about three percent. How much is enough?

But that is just a practical argument. Let us argue the point in moral terms as William McGurn argues in "Billionaires on the Warpath." And what better way to do it than with the seven virtues, starting with prudence?

Prudence is the practical virtue, and prudence argues that we don't want to distort the economy with high rates targeted at the rich. You end up with the monstrous tax code we have now, because people keep coming to Congress to get special exceptions. I've been looking through the Revenue Acts of the 1930s and 1940s as the tax rates were soaring during the New Deal and World War II. It is staggering so see the dozens of exceptions and special cases starting to appear in the code. Because, of course, when Congress enacts high tax rates then economic interests of all kinds find themselves harmed and go to Congress for relief.

Temperance. We shouldn't have swingeing anything. Especially in today's economy, the rich are not aristocratic families with vast land-holdings that exist upon the sweat of serfs. The rich hold their wealth and make their incomes from building economic wealth in startups and the great corporations that shower products and services on the American people. Moderation in all things, even for the taxation of the rich.

Courage. We should be courageous in opposing the hateful class warriors that gin up envy against the rich. Envy, remember, is one of the seven deadly sins.

Justice. If justice means anything, it means one set of rules for all leavened with the yeast of equity, the understanding that inflexible rules can sometimes result in the most awful injustice.

Faith. If we have faith in our fellow humans we must believe that there is good in the rich, good in the middle class, and good in the poor. To tax anyone with penal rates is to lack faith in the human project. It is to say that we are monsters, and monsters must be eliminated.

Hope. High tax rates and big government are not the policies of hope. They are the policies of despair, that the poor can never thrive on their own energy and labor. Instead the rich must be bled so that the poor can receive a transfusion. Without the transfusion, all hope for the poor is gone.

Love. How can you love anyone when you sicc the tax collectors on them? Love means wishing the best for other people in their terms, not yours. Socialists think they know what is best for everyone according to a universal rule of equality of results, but never ask what other people might want for themselves.

What we want from the rich is not a pound of flesh, cut from them by penal taxation. We want them to contribute openly and voluntarily in a million acts of kindness and generosity to the general welfare of the American people. As well as create jobs, products, and services with their businesses and their economic ideas.

Oh, and one other thing. The problem with high tax rates is that they protect the today's rich from competition from tomorrow's rich. High tax rates make it very hard to get rich.

Liberals Please Step Aside

Everything is set for a new century of growth, writes Walter Russell Mead, except for America's political class.

America has everything it needs for success in the twenty-first century with one exception: a critical mass of thinkers, analysts and policy entrepreneurs who can help unleash the creative potential of the American people and build the new government and policy structures that will facilitate a new wave of private-sector led growth.

It's the intellectual class that's the problem. It is backward looking and reactionary. In several ways.

• Support for statism. "Since the late nineteenth century most intellectuals have identified progress with the advance of the bureaucratic, redistributionist and administrative state. The government, guided by credentialed intellectuals with scientific training and values, would lead society through the economic and political perils of the day. " Yeah. I'll say.
• Interest and class. "Most intellectuals today still live in a guild economy. The learned professions – lawyers, doctors, university professors, the clergy of most mainline denominations, and (aspirationally anyway) school teachers and journalists – are organized in modern day versions of the medieval guilds. " Actually, I would say that the liberal guilds are caricatures of the old medieval guilds, which were, at bottom, self-governing social organizations perched perilously under the warrior aristocrats that ruled the age. The liberal guilds are little more than political pressure groups. They are not true "mediating structures."
• Training gap. "We are much less effective at teaching and supporting people who are able to master the essentials of many complex subjects, integrate the insights from this kind of study into a coherent social or political vision, and communicate what they have learned to a broad general lay audience. " Hmm. The trouble with this sort of thinking is that it assumes the continuation of the current bureaucratic administrative elite. Suppose that the new elite to come doesn't operate that way. Suppose it operates more by spontaneous association and the promotion of ideas and leaders from below instead of the top-down processes of today. Suppose that the future is Tea Party, not Anointed Ones?

Actually, all this is beside the point. The big question, in my mind, is whether our current liberal elite--the "clerisy," the Class of 1848, the New Class, the educated elite, whatever you want to call them--will have the decency to leave the stage without pulling the scenery down around them, and the rest of us as well.

The foundational assumptions of American intellectuals as a group are firmly based on the assumptions of the progressive state and the Blue Social Model. Those who run our government agencies, our universities, our foundations, our mainstream media outlets and other key institutions cannot at this point look the future in the face.

Who cares? Don't look the future in the face, liberals, if you don't want to. The trouble is that liberals don't want to let the rest of us, who do want to look the future in the face, take power and get on with America's future. Because the whole point of modern liberalism since its invention in the culture of the revolutions of 1848 is political power. It wasn't ever really about the working class, or women, or minorities, or gays, or whatever. It was always and only about the power of the intellectual class.

What these chaps cannot face is that the ordinary chaps who really made a difference in the industrial age, men like the Rothschilds, the Rockefellers, the Carnegies, the Edisons, were not men from the intellectual class, nor did they have pretensions about themselves. Nor were they interested in political power. They just wanted to build their businesses in the intoxicating days of the 19th century. When they had strutted their hour upon the stage they were quite happy to go home and let someone else take over.

Unlike today's intellectual class.