*Because of Hurricane Sandy, I have been unable to put in the necessary work to produce a new article – even with the presidential election this Tuesday. Nevertheless this column, originally posted July 2011, examines the supposed strongpoint of Romney’s campaign. Supply side economics is why Romney would be elected; it also happens to be exactly why he shouldn’t be elected.
Get out and vote.
The Price of Conservatism
“Don’t knock slavery. It gets things done!” So goes a popular internet joke with an accompanying image of a presumably Egyptian pyramid. The humor is evident, but so is the truth about economic conservatism.
Economic conservatives are, at their core, against government regulation of industry. Another label put on this philosophy is laissez faire capitalism. The literal translation of that phrase is “let do” meaning let business do what it will. Under such a system it is likely that business profits will increase; with no restraints many business will be able to find a way to turn a profit. Some business will combine creating larger more powerful companies and business sector will theoretically see growth via robust competition.
There are a number of flaws in this design. But chief among these flaws is the assumption that what is good for the business industry is good for the population at large. Secondly, laissez faire as a philosophy allows for crimes against humanity.
Throughout history conservatives argue for a laissez faire economic policy of government because they believe that when business does well then everyone does well. For this assumption to be true business would have to reinvest their profits into their industry instead of pocketing those profits. More specifically businesses would have to use their profits to hire more people (either production workers, sales people, or research technicians) which would eat into the profits.
Such behavior would go against most business models and the most basic component of capitalism: the motivation to earn the most money possible. By investing money into research a company decreases its profits – a path most businesses are not apt to take. This contradiction is why Netflix captured the home video market from Blockbuster. Blockbuster neglected long term planning in favor of short term revenue.
Laissez faire is not conducive to long term economic planning – which is exactly the way in which governments ought to be thinking when determining national strategy. But in truth governments cannot force businesses to decrease their profits in favor of thinking ahead; nor should governments be able to coerce business in such a way. But governments should be in the business of stopping the exploitation of the masses.
True laissez faire economics, in allowing businesses to do whatever it takes to turn a profit, opens the door to child labor, 7 day work schedules, and slavery. Laissez faire economic conservatives who today believe that government should not regulate business practices, are the same people who 100 years ago would have argued that a monopoly in oil that led to price gouging was fair; these are the same people who 200 years ago would have argued that slave labor was very efficient and was the best labor system for the agribusiness of the South.
Of course slavery did produce lots of wealth for the slave owners, the Southern states and ultimately the country. Many positives can also be said of oil and its effect on the bottom line of John Rockefeller’s, the Northern industrialized states in which Rockefeller did business, and the country in general. But in both cases the underbelly of laissez faire economics reveals groups of people being exploited for the gain of others.
Slavery, and a laissez faire philosophy more generally, can get things done but will generate the unintended consequence of creating a class of people not invested in the economic system. In fact the exploited will be invested in overthrowing the economic system and the political system that enables the economics. That is Marx and Engel’s Communist Manifesto in a nutshell. And it is why laissez faire economics should not be pursued by any government system that wishes to maintain support among the populous.
Economic conservatism is short sighted. And short sightedness is not an attribute that is sustainable – neither in business or politics.
Trevor Brookins is a free lance writer in Rockland County, New York. He is currently working on a book about American culture during the Cold War. His writing has appeared in The Journal News. You can reach him at [email protected] and follow him on twitter @historictrev.