Saturday , June 12 2021

Markets & the right

Summary:
Samuel Gregg reminds us of an important fact about rightist thinking – that the right has always been ambivalent about markets. This is as true in the UK as in the US. We saw this, for example, in the 19th century when the Tories split up over the abolition of the corn laws and when Thomas Carlyle damned economics as the “dismal science” for wanting to abolish slavery. We saw it too in Roger Scruton’s mixed feelings about Thatcher: She leaned too readily on market economics, and ignored the deeper roots of conservatism in the theory and practice of civil society. And we see it today in the Tories imposing trade barriers not just between the UK and EU but even within the UK. Perhaps the most spectacular example of this is John Redwood’s seamless move from ardent Thatcherite to

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Samuel Gregg reminds us of an important fact about rightist thinking – that the right has always been ambivalent about markets.

This is as true in the UK as in the US. We saw this, for example, in the 19th century when the Tories split up over the abolition of the corn laws and when Thomas Carlyle damned economics as the “dismal science” for wanting to abolish slavery. We saw it too in Roger Scruton’s mixed feelings about Thatcher:

She leaned too readily on market economics, and ignored the deeper roots of conservatism in the theory and practice of civil society.

And we see it today in the Tories imposing trade barriers not just between the UK and EU but even within the UK. Perhaps the most spectacular example of this is John Redwood’s seamless move from ardent Thatcherite to supporter of autarky.

All this poses the question, though: why is it now that the right is moving away from free market thinking rather than twenty or thirty years ago?

The answer, I suspect, lies in part in the one thing that conservative thinking has always been consistent about – its concern to protect private sector hierarchies. As Corey Robin says:

The priority of conservative political argument has been the maintenance of private regimes of power.

And here’s the thing. Free markets sometimes help maintain these regimes but sometimes threaten them. In the 80s and 90s, markets helped to entrench capitalist power, because deindustrialization and globalization helped to weaken the power of organized labour. (This isn’t to say that the decline of unions was purely due to market forces: the coppers at Orgreave were agents of the state.) In these circumstances, the right discovers a love of markets. Peel

At other times, though, markets disrupt hierarchies. The free trade espoused by Smith and Ricardo was bad for landlords: Smith was, in his day, a heterodox economist. 

What we’re seeing today is a reversion to those times. Markets now are a danger to the existing order, in three different senses.

First, some employers are befuddled by the unusual sight of localized labour shortages. Obviously, Econ101 says the answer to this is to raise wages – which some are loath to do. The notion that market forces might actually work to workers’ advantage rather than capitalists’ is an unfamiliar and disturbing one.

Secondly, in a free market employers can hire whom they want – which means immigration. A market society is a cosmopolitan society. Rightists who feel awkward about hearing foreign languages don’t want that*.

And thirdly British capitalism is now to a large extent a rentier economy, as Brett Christophers has shown. A genuinely free market, however, would undermine this. Freer copyright laws would curb intellectual property rents; ending banks’ implicit subsidy and encouraging competition would cut financiers’ rents (pdf); more competitive government tendering could reduce what Christophers calls contract and infrastructure rents; and shifting taxes from income to land value would end landlords’ power to expropriate for themselves the positive externality of improvements to local areas. In ways such as these, introducing more market forces would undermine actually-existing capitalism.

It’s no accident, therefore, that the right should now be falling out of love with free markets – because these are no longer a way of preserving the existing order. You cannot tell intellectual history purely through the lens of ideas. Material interests matter, and it is these that are turning the right away from markets.

If this sounds conspiratorial, it shouldn’t. Think of politics as being a little like natural selection. Policies and ideas arise if not as random mutations then at least sometimes wholly or partly independently of material interests. But the environment then selects which ones survive or thrive – and a key part of the environment is class interests. The Tories good fortune has been to find a way which reconciles voters’ longstanding hostility to free markets with both their own interests, their love of order and inequality and electoral success.

My story here is not just about the right, however. There’s a message for technocrats. They tend to see markets as a mere engineering problem: sometimes they work well and sometimes they need fixing. Maybe this would be true in an ideal society. But we don’t live in such a society. Instead, we have a class-divided one in which capitalists and rentiers have the whip hand – and that hand determines when and how markets get to work.

And there are points here for the left. The powerful sections of the right are no longer free marketeers. Pretending that they are is a tactical error, which fails to see that one of the Tories’ great strengths is its ability to change. Also, if markets can be a threat to actually-existing capitalism, perhaps many leftists should rethink their instinctive antipathy to them.

* No. Immigration does not reduce natives' wages (except very slightly for a minority).

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