Is libertarian economics what’s killing the GOP?

Most diagnoses of what ails the Republican party have been focusing on social conservatism, saying that Republicans need to stop opposing gay marriage and abortion if they want to start winning national elections.  But now some are arguing that the Republican commitment to libertarian economic policies–that is, a commitment to an untrammeled free market–that’s really to blame.

From Robert W. Patterson:

In the political big leagues, when the GOP strikes out with the popular vote in five of the past six presidential elections, the party sticks with the same old roster of political consultants, think-tank policy wonks and losing-candidate types.

That familiar lineup shares one big liability: libertarian economics, which has been undermining the Republican brand with the party’s natural middle-class base for years.

Indeed, the failure of Mitt Romney’s economic platform to resonate with an anxious electorate was no fluke. That message represents the heart and soul of a party that started sleeping with far-right libertarians in 1990.

That’s when President George H.W. Bush — breaking ranks with Ronald Reagan’s 1986 landmark reforms that equalized tax rates for wages, capital gains and dividends — opened the door to a two-tier system that delivers ever more tax breaks to wealthy global investors at the expense of American workers.

Today, amid a long GOP losing streak, the same ideologues are still pushing free trade, globalization and marginal-rate tax cuts. Meanwhile, conservatives seeking to craft a center-right agenda that would directly and substantially boost middle America find themselves struggling uphill.

Many influential Republican policy wonks concede the GOP middle-class disconnect, downward mobility and the waning of Midwest manufacturing by Wall Street finance.

But even these libertarian fellow travelers think mostly in terms of party “modernization” or “reforms” of education, health care, welfare and entitlement policy. When they do place tangible policies on the table, the focus remains narrow: helping the poor and illegals, not the vast middle class.

Consequently, Republicans in Congress aren’t calling for new government-business collaborations that might create millions of well-paying manufacturing jobs, patterned after Abraham Lincoln’s push to construct a transcontinental railroad, Franklin Roosevelt’s mobilization of industry to fight World War II, Dwight Eisenhower’s rollout of the Interstate Highway System, or John F. Kennedy’s challenge to land a man on the moon.

Nor do they see the job-creating potential of keeping at home, as Alexander Hamilton would insist, the production of all materials, systems and technology used by the armed forces.

Fearing such ideas might increase federal spending, strengthen private-sector trade unions or damage the free-trade regime, the party falls back on familiar turf: fiscal, tax and regulatory matters.

So the best that Republicans can muster are static plans of budget balancing in distant out-years.

via Op-ed: Free-market absolutism is killing the GOP | WashingtonExaminer.com.

I’m not convinced that this is the problem.  Some might call it odd that Republicans favor libertarian economics but (what some might call, but really aren’t) authoritarian social values, while Democrats favor authoritarian economis but libertarian social values.  Where, some might say, is the party favoring libertarian economics and libertarian social values?  (Answer:  The Libertarian party, but why hasn’t it gained all that much traction?)  And where is the party favoring authoritarian economics and authoritarian social values?  Nobody is consistent.  (I would say that Democrats’ social values are only libertarian when it comes to matters having to do with sex.  They aren’t so libertarian when it comes to gun ownership, private property, etc.)  Do you think an all-authoritarian party or an all-libertarian party would be more successful?

HT:  David Mills

About Gene Veith

Professor of Literature at Patrick Henry College, the Director of the Cranach Institute at Concordia Theological Seminary, a columnist for World Magazine and TableTalk, and the author of 18 books on different facets of Christianity & Culture.

  • fjsteve

    Sounds like the author is promoting protectionism, greater governmental control of economic forces, and more public-private partnerships working towards the good of the state.

    What could go wrong there?

  • James Sarver

    “Some might call it odd that Republicans favor libertarian economics but (what some might call, but really aren’t) authoritarian social values…”

    Some might call the economics favored by Republicans libertarian but I think a pretty good case can be made that it is not. It is difficult to actually be libertarian. One has to overcome the natural inclination to insist that others do what you want them to do. That will never be very popular.

    Our major political parties simply don’t agree on what people should be forced to do and Republicans are currently doing a poor job of selling their brand of it.

  • SKPeterson

    Maybe the Republican Party should actually start committing consistently to libertarian economic policies. Instead they have a long history of embracing the same sorts of tired, worn-out quasi-market economic policies that Patterson calls for. Economics and history have a definition of Patterson’s economic ideas: mercantilism.

    As to Patterson’s call to emulate Lincoln’s push for a transcontinental railroad as an ideal example of public-private partnerships, maybe he should read some more history, maybe even google Credit Mobilier. I suppose it should also be noted that the railroad partnership thus formed, the Union Pacific, unsurprisingly went belly up and resuscitated under the financial guidance of Jay Gould. It was the railroaders like Gould and JJ. Hill of the Chicago, Burlington and Quincy and the Great Northern, who eschewed government interference and made railroads successful in the western United States.

    Economics and history have a definition of Patterson’s economic ideas: mercantilism. It has a nasty habit of leading to not only trade wars, but to wars of the real, shooting kind, then on to progressivism where it leads almost inexorably into a nationalist socialism. We have a name for that too: fascism.

  • SKPeterson

    Darn cut-and-paste. Oh, well, I emphasize my point. :) Now, to go scrounge up some more coffee….

  • Kirk

    Honestly, I wouldn’t call the Republican’s economic policy “libertarian.” I would call it “Pro-business,” which, contrary to libertarianism, actively favors large corporations with subsidies, tax-loop holes and unequal regulation. It’s the marriage of trickle down economics and money in politics. If anything, I think people might find a truly libertarian economic strategy more appealing than the current status-quo. Even if some voters find it less than preferable to what the democrats are offering, I think they could at least acknowledge it as being fair.

  • Cincinnatus

    I’m with Kirk here.

    Moreover, what the author should say isn’t that libertarian economics is killing the G.O.P., but that a deafness to economic populism is killing the G.O.P. For the record, Democrats aren’t offering much here either, but what voters want right now is some form of economic populism–that is, economic policies that favor the ordinary citizen. Some economic populism is politically pernicious, of course–redistributive policies, nationalization of business, and so on.

    But I would just love to see the Republican Party embrace certain populist norms. Though I know I’ll hear it from SKPeterson on this, Republicans should give up their hard-line on free trade and let the Democrats own that one. NAFTA and other free trade treaties with China, Latin America, and South Korea, among others, have directly killed millions of American jobs, most of them in the middle-class sector. As E.F. Schumacher noted, free marketeers in particular are slavishly devoted to this utterly unhelpful number called the “GDP.” The GDP dictates a logic of macro-efficiency and comparative advantage which says that, if it’s “cheaper” in terms of GDP to ship all our carrots and computers from thousands of miles away while exporting our…services?…thousands of miles away, we ought to do it at the expense of local production and communities. In Schumacher’s words, such a logic might be cosmically correct, but it’s locally ridiculous. It’s ridiculous that our economic policies sell out local producers, local jobs, and local communities in pursuit of some corporate financier’s idea of efficiency and “growth.”

    In short, the ordinary citizen cares more about the death of local agriculture, the destruction of millions of local businesses, and the transfer of millions of factory jobs to the Third World than Republicans seem to think. The G.O.P. thus wastes its time and political capital insisting on lower taxes for the rich, free trade agreements, immigration “reform,” etc.–all at the expense of local economies. Pro-business economics indeed.

  • http://theoldadam.com/ the Old Adam

    What’s killing the GOP is whimpy politicians who want to be liked by everyone…and a generation of nanny-state kids who will vote for any politician that can promise them something in return for their vote.

    This country is basically toast (as we once knew it).

  • Steve Billingsley

    Cincinnatus @ 6
    +1
    The remarkable tone-deafness of Republican politicians has cost them millions of votes among fairly socially conservative voters who aren’t rich (or close to it) and have watched local economies dry up over the last generation. Many of them have actually wised up to how overrated of a number the top marginal tax rate is in many cases (particularly when it isn’t anywhere close to the highest historical levels). Republican obsession with cutting the top marginal tax rate while ignoring the crony relationships, corporate welfare, special carve-outs and the damage done to middle-class wages is exponentially stupid.

  • Klasie Kraalogies

    The GOP has some issues with economic policy. Libertarian economics (and I don’t support it) is not one of them. SKP is quite correct in calling it mercantilism.

    Of course, when it comes to economic policy, no cookie-cutter approach works. Interesting, just yesterday I was reading a brilliant article in “The Economist” about the Nordic economies – and how different they are from the “Socialist” – perception many in the US holds. Yet there approach is quite different to say the approach followed in say Singapore.

    http://www.economist.com/news/leaders/21571136-politicians-both-right-and-left-could-learn-nordic-countries-next-supermodel

    Of course the latest big information leak is telling us just what (some of) those at the top are doing – and how it damages national economies, and thus the world’s economy in general:

    http://www.cbc.ca/news/world/story/2013/04/03/offshore-data-leak.html

    The interesting thing is that this includes a lot of people that are wealthy from crime, legal stuff, etc etc – basically, the opportunistic skimming of the economy that is (in my mind) enabled by mercantilist and crony economic policies, such as those clearly espoused by the GOP.

  • Klasie Kraalogies

    And before someone moans about it, yes, people from all countries are involved in the scandal mentioned above. But complicated tax codes, influence peddling, propping up of failures and apparent favouritism creates a climate highly conducive to this type of thing.

  • http://www.bikebubba.blogspot.com bike bubba

    What Kirk says. If W was libertarian, I’d hate to see moderate or socialist on that scale!

    And I’m hoping that we someday get politicians who view this not just on a political scale, but rather on the scale of “does this program work?” If we did, it would look a lot like what the libertarians want even if it wasn’t called by that name.

    Or, put differently, I’m having trouble figuring out a time when government actually put millions to work in anything but a war.

  • DonS

    The article is a crock. Republicans libertarian? Hardly. Some of us who are registered Republican or call ourselves Republican try to push the party more in that direction, but with limited success. We are thoroughly a statist, sclerotic country, to be sure. Republicans thought they were radical to let a sequester take effect that merely slightly slows the rate of federal spending, and Americans like this author think that is utterly radical, and squeal endlessly about all the benefits they are missing out on. Amazing.

    Dr. Veith says:

    I would say that Democrats’ social values are only libertarian when it comes to matters having to do with sex. They aren’t so libertarian when it comes to gun ownership, private property, etc.

    YES! Democrats are libertine, not libertarian. They are completely authoritarian in every respect other than the bedroom. Ask Hobby Lobby and other Christian business people who want to conduct their business without violating their moral conscience how “libertarian” Democrats are.

    Cincinnatus @ 6 — I somewhat agree with you. Unidirectional free trade is not the economic boon it’s been purported to be by free traders. I have argued in the past for free trade with other free economies, but not with despotic or socialistic nations. However, to be fair, the same unions who argue against free trade refuse to support reforms that will make our labor more competitive in the world marketplace. Similarly, they support politicians who impose crushing regulatory burdens on our industry, further reducing our competitiveness. By imposing protectionist trading policies, we would be encouraging more of the same, and sharply reducing the standard of living of our citizens. My solution to this would involve a trade of more protectionist trading policies for reduced regulation, pro-growth tax policies, and competitive labor, particularly with regard to unrealistic retirement and health care benefits, and which would include government employee unions.

    Kirk @ 5 — both parties are pro-big business, which is to say anti-small business. Democrats like big businesses because they support a regulatory environment that shuts out smaller and more nimble competitors. Both parties like the money.

  • Klasie Kraalogies

    DonS –

    Both parties like the money.

    And there it is. Yet there is so much resistance against campaign financing :)

  • DonS

    Yeah, Klasie @ 13, that darn pesky Constitution. Liberty can be so inconvenient. :-)

  • helen

    Kirk @ 5
    WHAT “trickle down economics”? That’s been the biggest bald face lie since Reagan.

    [I have a relative who sends me GOP propaganda like she was a plutocrat. In fact, she's been living on government checks since before she was 50! Every time I get another of those e-mails, I choke.]

    Cincinnatus @6 & Steve @8 +10!
    http://www.cbc.ca/news/world/story/2013/04/03/offshore-data-leak.html
    The interesting thing is that this includes a lot of people that are wealthy from crime, legal [crime] stuff, etc etc – basically, the opportunistic skimming of the economy that is (in my mind) enabled by mercantilist and crony economic policies, such as those clearly espoused by the GOP.

  • http://www.libertarianinternational.org Robert

    Thanks for the article. For info on people using voluntary Libertarian tools on similar and other issues worldwide, please see the non-partisan Libertarian International Organization @ http://www.Libertarian-International.org ….

    Some points:

    >Reagan was a fan of the ‘libertarian economics’ of globalization, tax rate cuts and peaceful free trade with all. He appointed Libertarians to Federal office. His top personal advisor was a Libertarian who engineered the downfall of Communism and the Fascit countries in Latin America. This is the extremism that hurt the GOP?

    >Libertarians don’t favor ‘untramelled’ free markets –a Communist term, BTW–but voluntary exchange, a very different thing and which may include voluntary socialism.

    >Libertarians are in all parties and gave Obama his victory–they care about privatization, gay marriage and pot legalization right now. The libertarian-direction USLP has been first moving people to pro-libertarian attitudes ( from 5% in 1971 to 35%) –but the Professor should know they can only go so far as long as people like him are silent on how both the GOP and the Dems jimmy the election laws.

    I think we need to stop attacking straw-men Libertarians and look at what these people are actually doing.

  • Larry

    Cincinnatus @ 6
    +10.1

  • John C

    There is a fundamental contradiction at the heart of modern Republican philosophy.
    They don’t like government: they want less of it. And when they get into power they do know what to do with it. This is probably the reason why Republicans are not very good at it – at least not at a Federal level (Iraq and bank regulation)
    Most Republicans fail to realize that successful developed economies have strong civil institutions — some are publicly funded others are not (trade unions) and some are a mixture of private and public funds (universal health care).
    Citizens in democratic states created civil institutions to address the failures and inefficiencies of the market and to diffuse the power of corporate and political elites.
    Failed states have not developed civil institutions.
    For a vision of a libertarian future look to Russia or Singapore.
    I suspect for this generation of Republicans, no matter how small government became, it would be never be small enough.

  • DonS

    JohnC @18: Russia is your idea of a failed libertarian state? That is onebof the strangest comments I’ve ever read.

  • SKPeterson

    John C @ 18 – I really think you need to revisit your entire argument such as it is. As DonS notes @ 19, equating Russia as a libertarian state makes a mockery of the term libertarian. Russia has never been a libertarian state. Ever. It is a post-totalitarian quasi-dictatorship with the trappings of plutocracy sitting over a wealth of “civil institutions.” Throwing in Singapore is a bizarre and oddly disconsonant choice in pairing with Russia. To what do you object about Singapore? That it has a GDP per capita of over $50K? That it is the smallest country in Asia? What? And why do you classify it as some sort of horror story?

    And who, precisely, are these successful developed countries with strong civil, i.e. government, institutions? Greece, Spain, Portugal, Cyprus, Italy? Or do you favor the strong governmental hand of China or India? Maybe the wonderfully successful institution of Peronism in Argentina or the laughably execrable example of Bolivarian chauvinism of Venezuela? And your only example of a private institution of merit is that of unions? Seriously? The same people that hobble the provision of education to the most vulnerable elements of our society, the institutions that have had long-standing associations with organized crime, the institutions that have run almost every single major manufacturing sector of this country into the ground with their calls for intrusive wage and labor relations laws, regulations and favoritism? You couldn’t cite churches, the Elks club, the Lions, the neighborhood associations, the local opera guilds or any of the other myriad local and national organizations that constitute true civil society?

    Further, I will contest most vehemently that civil society and civil institutions in any way require the imprimatur of a state in order to function. You seem to come close to making a false equation of society with government. This is not only a serious error but a dangerous one to boot. The civil institutions that manifest themselves in civil society rely upon the rule of law, not necessarily by government. While we strongly associate the rule of law with government as enshrined in the Constitution, it is not that the rule of law and civil society are created and maintained by a good government, but that good government can only ever exist where there are strong non-governmental societal institutions and a general agreement on the basics of the rule of law usually found in what we call the common law.

    I will agree that Republicans often botch things at the federal level. This usually comes by following Democrat economic policies such as bank regulation and engaging in ruinous foreign wars. A singular egregious and oft-repeated foible has been the Republican’s wholesale adoption of Keynesian monetary policies while attempting to implement muddled free-market fiscal policies.

    Finally, civil society did not introduce civil institutions to counteract the failures of the market system. Judging by the examples you cite, these institutions were brought forth not to address the failures, but to limit the successes of the market system, because in Marxist ideology, which is the crap your peddling, any form of profit is exploitation and therefore a “failure”. Any inequality is taken as evidence of failure and not a difference in reward for effort or productivity.

    I expect that for many adherents of failed political and economic systems like social democracy or marxism, there’s no government that could ever be big enough.

  • John C

    Trade unions have been critical players in the development of democracy for over a century, sk.
    In Australasia and Europe the great struggle between labour and capital has been mediated peacefully through democratic process.
    Farmers and environmentalists have also formed organizations and political parties to contest corporate power and market failure. Charities rely on tax concessions. Amateur football clubs are dependent on local government to maintain playing fields.

    What I find annoying about Libertarians is that they do not understand or ignore the complex interconnection between civil society, government and public institutions.
    For instance, farmers and environmentalists have united to campaign to stop the stampede to extract coal seam gas. These groups have used information and research carried out by public universities and government science laboratories (CSIRO) and presented on radio and television by the publicly funded national broadcaster (ABC). In the last week State and Federal Governments have responded to community concerns and the rush to exploit these reserves has become more orderly.
    Libertarians would like to dismantle the ABC and sell it off. But the ABC performs a unique role in Australian society and commercial interests are unlikely to replicate it.
    Unfortunately, libertarians know the price of everything and the value of nothing.
    I would also note that Greece, Portugal, Spain and Argentina have all had extended periods of military dictatorship and have struggled through the financial crisis. I would argue that this is because they haven’t had the opportunity to develop the democratic institutions to harness the market.


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