Freedom Might Well Flourish Even If Conservatives Don’t

Originally published in Library of Law and Liberty

Samuel Goldman has written a wide-ranging and thought-provoking Liberty Forum essay on the current sorry state of American conservatism. This sorry state is especially sorry for those of us who, like Dr. Goldman, believe that classical liberalism is the best part of American conservatism. It is an assessment, he says in conclusion, which he hopes “to be wrong about.”

At the risk of disappointing the good professor, I will not endeavor here to prove him wrong. I will, however, try to cheer him up. For I do not think that the sorry state of the American Right necessarily portends extinction, or even a prolonged sickness, for classical liberalism. I suspect that the best days of classical liberal ideas—and, even more so, classical liberal policies—lie ahead. But before I state my case, let me try to briefly summarize his.

“What Is the Future of American Conservatism?” argues that the conservative movement—indeed, the conservative mind—is “cracking up.” It was once possible, asserts Goldman, for conservatives to simultaneously accommodate the defining characteristics of both conservatism and classical liberalism. For conservatism, this defining characteristic is a reactionary “yearning to overturn a present condition of decadence and recover an idealized past.” For classical liberalism, the defining characteristic is a sharp line between what should be public and what should be private. Though not perfectly aligned, for much of the 20th century these two pieces of the American Right were at least overlapping circles in a Venn diagram. This is because they shared the same “decline narrative” in which “private conduct used to be protected, government was properly limited, reason ruled.” (Emphasis in original.)

But, argues Goldman, these circles are increasingly diverging. For one thing, the victory of the West in the Cold War has meant that antipathy toward communism no longer unites nationalist conservatives, free market libertarians, and God-fearing traditionalists. And, unlike the Union of Soviet Socialist Republics, the new international threat of Islamic extremism seems to highlight our differences with one another rather than patch them over. For another thing, domestic triumphs such as President Reagan’s victory over confiscatory tax rates, and then-Fed Chairman Paul Volker’s conquest of double-digit inflation mean that these issues no longer unite us, either.

While fewer issues unite us, other forces actively drive us apart. For example, there seem to be increasingly divergent views about how best to accomplish social change. Some feel a growing frustration with the traditional strategy of publishing books, establishing think tanks, and ushering legislation through the congressional gauntlet. This process is all the more tedious given the fact that the administrative state itself often skips it and expands its power through regulatory fiat. Faced with an administrative state that doesn’t play fair, some on the Right have concluded that “Since Leviathan cannot be restrained, it must be smashed.” And this accounts for the Trumpian impulse to blow the whole system up.

What is more, this tactical nihilism highlights substantive differences of opinion on the Right. It is not just a penchant for unfair play that fortifies the position of the administrative state. Ironically, the administrative state is also protected by classical liberal institutions such as Madisonian checks and balances. While these institutions surely fettered the rise of the administrative state in earlier times, they nowadays can make it more difficult to dismantle, causing some to reject Madison’s institutionalism in favor of Trump’s . . . whatever it is. (“Hamiltonianism” is probably too generous.)

So the long logroll between classical liberals and conservatives is unravelling. And the long overlap between classical liberal and conservative ideas is breaking apart. Does this mean that classical liberal ideas of maximal individual autonomy and modest government direction are doomed? I’m not so sure.

This brings me to the matter of the “decline narrative.”

In any attempt to achieve social change, it helps to have a good story. And according to Goldman, classical liberalism and reaction overlapped because they shared the same “decline narrative.” This may be so, but it was always a bit cleaner in story form than in the actual history books. Yes, government now gobbles up an enormous share of GDP and yes, the page count of the Federal Register has ballooned. But as freedom has waned in some respects, it has waxed along others. Consider:

  • African Americans have property rights. They also have the right to enter into whatever professions they choose (assuming they can meet the occupational licensing requirements). And they have the right to enjoy (most of) the fruits of their labor.
  • We now freely trade with multitudes around the world, with the average tariff one-tenth as high as it used to be.
  • We also fly the less-regulated skies and pay an inflation-adjusted price per mile that is half of what it was before Senator Ted Kennedy (D-Mass.) and Alfred Kahn dismantled the Civil Aeronautics Board (CAB) beginning in the late 1970s.
  • Much of the nation’s radio spectrum is now allocated via auction to those who value it most, rather than via diktat to those deemed most politically important.
  • Local transportation markets—once strangled by anticompetitive regulations—are now more competitive and convenient than ever.
  • The free and open Internet has changed the way we shop, share, date, and educate. It has smashed market and government monopolies alike, forcing firms and politicians to compete for your favor instead of taking it for granted.
  • And of course, over the long arc of history, freedom of speech and freedom of religion reign supreme. More people exercise these freedoms than ever before and it’s hard to imagine that the trend will reverse.

These changes are unalloyed victories for classical liberalism. They are the direct result of a sharp line between what is and ought to be private and what is and ought to be public. As David Schmidtz asked in The Elements of Justice (2005), “Isn’t it odd that our greatest successes in learning how to live together stem not from agreeing on what is correct but from agreeing to let people decide for themselves?”

The decline narrative wasn’t just an oversimplification. It was depressing. I will admit that for the moment, depression is selling. But eventually, I predict, people are going to tire of the talk of “American Carnage.” And when they do, someone with the sunny optimism of a Reagan or an FDR will be able to capitalize on it by offering a new narrative.

The new narrative can be simultaneously inspiring and empirically accurate: When people decide for themselves, they flourish; when others decide for them, they flounder.

Does this mean that someone armed with a good story such as this will be able to launch a classical liberal revolution? If I’m being honest, I have to admit probably not. As classical liberals have long emphasized, freedom may be ideal, but it is not exactly robust. Thomas Jefferson was likely correct when he observed, “The natural progress of things is for liberty to yield, and government to gain ground.”

Now, with the advent of public choice economics, we have decades of empirical and theoretical research to back him up. This research suggests that the incentives to curtail private activity and expand public activity are extraordinarily powerful. The state is big because well-heeled and well-organized special interests want it to be big. Every tax, every appropriation, and every regulation is law because someone—often a special interest—sought it.

As the late University of Maryland economist Mancur Olson suggested, it is occasionally possible to strip away, en masse, the tangle of stultifying special interest favors in times of a national crisis or a revolution. But revolutions tend to be rare and, as we know, can turn as easily against freedom as for it.

What all this means is that, like Johnny Cash stealing his Cadillac, we may have to steal our freedoms one piece at a time. This, after all, is the way freedom is typically won. Consider two examples: free trade and airline deregulation.

While Adam Smith and David Ricardo laid the intellectual foundations for free trade, it was Franklin Delano Roosevelt of all people who laid the institutional foundation. As his Secretary of State, FDR had hired a man named Cordell Hull. A former congressman from Tennessee, Hull was—like most Southern Democrats at the time—an instinctive free trader. But Hull believed that the problem with trade policy was that it was in the hands of Congress. And while the typical senator or representative would make noises in favor of free trade, he didn’t actually want it for whatever product was made in his district. This created a classic prisoner’s dilemma whereby each member of Congress sought protections for certain products, yielding a wall of tariffs that was higher than even the most protectionist members wanted.

But Hull saw a way to lower the wall. He promoted what we today call fast-track trade negotiation authority. Congress authorizes the President to negotiate reciprocal trade agreements and then obliges itself not to amend those agreements, allowing itself only an up-or-down vote.

FDR was not an instinctive free trader. But Hull convinced his boss that robust international trade would help America’s allies in World War II. Along the way, it helped that the war had decimated foreign exporters, putting U.S. exporters in an unusually advantageous position. These exporters favored free trade because it gave them access to foreign markets. So they, too, threw their weight behind Hull’s plan.

The President got the authority to negotiate trade deals that Congress would either accept or reject, in whole. And over the decades that followed, the average tariff on dutiable imports went from 59 percent in 1932 to under 5 percent in recent decades.

Next consider airline deregulation. In 1965, only one in five Americans was lucky enough to have flown on an airplane. It wasn’t just that the technology was new. Flight was expensive because government policy made it so. The CAB strictly limited prices, the entry of new airlines and creation of new routes, the abandonment of old routes, and even the details of service (down to the size of the sandwiches that could be served in flight). Ostensibly this regime was designed to protect consumers, but its real effect was to protect airlines from competition. And Senator Kennedy—with the help of his brilliant young legal counsel, Stephen Breyer—showed exactly how this effect worked.

Though his committee had no oversight authority over the CAB, Kennedy decided to hold a series of hearings exposing the Board and its anticompetitive effects. It helped that the Board could not, as a regulator of interstate travel, touch airlines whose routes were wholly intrastate. Since some of these routes were as long as some interstate routes, it was possible for Kennedy and Breyer to demonstrate the effects of regulation. They showed, for example, that the unregulated San Francisco-to-Los Angeles route was about half the price of the comparable but regulated Boston-to-Washington, D.C. route.

A few years later, President Carter appointed the aforementioned Alfred Kahn to head the CAB. A self-described liberal Democrat, Kahn began experimenting with deregulation, allowing carriers to offer discounts that the CAB had previously forbidden. Next, he permitted carriers to operate along new routes and even permitted new entrants into the market. When, in 1978, Congress contemplated full deregulation of the airlines, Kahn became an enthusiastic supporter. The airlines themselves resisted change. But technological advances in the industry had made the old business models and the regulations that enshrined them increasingly untenable.

The results speak for themselves. Today, the inflation-adjusted price-per-air-mile is half of what it was before deregulation and most Americans travel by air at least once a year. Granted, flying is no longer the luxurious experience it used to be. When the airlines couldn’t compete over price, they had to compete over other aspects such as leg-room or food service. It turns out, however, that customers are far more responsive to favorable prices than to luxury.

Let me now bring this back to the prospects for social change. As noted, many forces conspire to make liberty yield and enable government to gain ground. But as we have seen here, classical liberal victories do occur. Those of us who value freedom can learn much from these instances.

One important lesson is that freedom is often advanced by the most unlikely characters. Who would have imagined that Roosevelt would liberalize trade or that liberal Democrats would be responsible for the most successful deregulation of the past half century? Donald Trump is anything but a classical liberal. But he and his administration may yet advance freedom along some dimensions.

Another lesson is that ideas matter. The case for free trade has undoubtedly benefited from the near-consensus among writers in the field of economics that trade enriches while protection immiserates. The seeds of other reforms, from spectrum auctions to airline deregulation to tax reform, were also sown by the intellectuals, sometimes years or even decades before they began to bear fruit.

Finally, change is rarely “top-down.” Even when it appears that the heads of executive branch agencies, presidents, and senators are leading the charge, they are usually taking their cues from others, such as constituents and special interests. Social change bubbles up from these sources in unpredictable ways as technologies evolve and prices change. Sudden cultural and technological shifts can dislodge long-entrenched interests surprisingly quickly. The smartphone has already disrupted a half dozen regulatory schemes, from local transportation and lodging to traditional banking. How will 3D printing affect the Food and Drug Administration’s stranglehold on new drug treatments? How will alternative currencies like Bitcoin challenge financial regulators and monetary authorities?

The administrative state, as Professor Goldman notes, doesn’t always play fair. But challenges to it do not have to come from the top, that is, from a chief executive staying within or going beyond his constitutionally permitted powers. Professor Goldman can challenge it in his writings. Entrepreneurs can challenge it by devising new ways to create value for customers that don’t fit neatly into the current regulatory mold. And political entrepreneurs can challenge it by devising new institutional arrangements that make it easier for others to make the right choices.

In short, classical liberalism has never had an easy path to political success. Social entrepreneurs have tirelessly scratched and clawed for every scrap of freedom we now enjoy. And we should expect it to be no different in the future.

The Right may be cracking up. But it is not clear that classical liberal victories—from the triumph of free speech, to the abolition of slavery, to the liberation of certain markets—emanated from the Right anyway. Social change is a strange and sometimes unpredictable thing. And the crackup of the Right may yet advance freedom in ways we cannot now imagine.