Who Wants to Save Capitalism?

Free-market thinkers are increasingly embracing radical-sounding ideas to shore up capitalism.

Austrian economist Friedrich Hayek in 1974. Globe and Mail

The ideological framework undergirding capitalism is shifting. Since the 2008 financial collapse and the convulsions of the Great Recession, the free-market smart set has been working overtime to cope with increasing criticism of capitalism.

At publications like Reason and blogs like Bleeding Heart Libertarians, writers on the Right are embracing policies they might be more expected to denounce. Some are even responding by retrofitting seemingly anticapitalist analyses and designs to malfunctioning capitalist machinery in an attempt to work through capitalism’s growing legitimacy crisis.

So how do these attempts to shore up capitalism overlap with and differ from anticapitalist perspectives? Let’s begin with Milton Friedman’s heirs.

Bleeding Heart Libertarians

A Protestant Reformation of sorts has been taking place within right-libertarianism’s ranks, and the blog Bleeding Heart Libertarians (BHL) has functioned as its Wartburg Castle. The group was born in March 2011, mere months before the rise of Occupy, when a group of libertarians flocked online to defend their creed amid capitalist havoc.

The event represented a scaled-down, Internet Age version of 1938’s Colloque Walter Lippmann, when a similarly varied assemblage converged on Paris to make sense of classical liberalism’s post–Great Depression legacy.

While the site is small, it still publishes some of the most sophisticated free-market apologetics around, and its impact can be spotted at bigger right-wing publications. Self-styled “left market anarchists” like Roderick Long and Gary Chartier, both of whom operate in the socialist-inflected tradition of Benjamin Tucker and Thomas Hodgskin, are among its principal contributors.

But it is Matt Zwolinski, a political philosopher and cofounder of BHL, who has proven the most interested in reconciling libertarianism with social justice — and least averse to stepping on libertarian toes.

Take his case for why the Prime Directive of the libertarian right, the “Non-Aggression Principle” — “that aggression against the person or property of others is always wrong, where aggression is defined narrowly in terms of the use or threat of physical violence” — is unsustainable. According to Zwolinksi the dictum encourages its adherents to adopt a one-size-fits-all answer in policy debates — that their statist opponents are imposing their preferences at gunpoint — at the expense of a “close study of history, sociology, or empirical economics.”

Zwolinksi says this line of reasoning makes little sense, and his critique, while clearly an outlier among the free-enterprise intelligentsia, speaks to a growing willingness of libertarians to publicly rein in the excesses that have made their ideology such a hard sell.

BHL contributor and economist Mike Munger, meanwhile, has come out in favor of what he calls “Hayekian socialism,” which takes its name from political economist Friedrich Hayek. Munger reads Hayek — who despite his reputation as a libertarian was in many respects a chastened welfare statist — as favoring a universal basic income (UBI), public education, and universal health care.

Munger’s Hayekian socialist dream should not be confused with left ideas of socialism. His suggested UBI annual payment is only $12,000, and it is assumed to be a replacement to all “wasteful, scattershot programs with a cash payment.” He recommends vouchers and charter schools instead of “monopoly public education provision.” And his approach to health care rejects the public-provider model found in countries like Canada and England.

Moreover, it’s clear that many of these reforms are intended as a Trojan Horse — the dismantlement of the state is visible in the distance. As Jesse Myerson and others have argued, the Right’s embrace of the UBI is predicated on the eradication or dismissal of many programs (like guaranteed job programs) necessary to any genuinely egalitarian politics. And the insidious relationship between vouchers and charter schools on the one hand and austerity, privatization, and union-busting on the other is well-documented.

But Munger’s vision does deviate from the stereotypical trappings of the libertarian right, and it’s still been accepted in part or in full by numerous high-profile libertarians. Many of Munger’s BHL peers (like Zwolinski) are on board with a UBI, and voices at the Koch-funded magazine Reason have signed up. The idea has even been floated on Fox News. And while there is little love for single-payer health care at Reason or Fox, the former has partially defended Obamacare, contending that markets work most efficiently when all consumers are empowered enough to take part as market actors.

The emphasis on materially empowered consumers parallels philosopher Erik Angner’s insistence that resource redistribution is required to ensure every consumer can signal their local knowledge to the price system. If only a tiny elite is capable of availing itself of the medical marketplace, for instance, the information-gathering mechanisms and overarching quality of that marketplace will suffer.

This line of argument departs from standard Reaganite assumptions. As a standalone observation, it is consistent with the market socialism sociologist Johanna Bockman fleshes out in Markets in the Name of Socialism, in which neoliberalism is presented as a “parasitic growth on” otherwise collectivized and non-hierarchical notions of society that go hand-in-hand with competitive markets.

But whereas critics of capitalism like Bockman seize on this dynamic in order to pinpoint an Achilles heel of private ownership of the means of production, free-market enthusiasts studiously avoid its more radical implications. Corey Robin and Chris Bertram’s 2012 back-and-forth with BHL contributors over workplace democracy not only speaks to right-wing libertarianism’s general unwillingness to address the contradictions intrinsic to capitalism, but also the extreme power imbalances endemic in such a system.

Reason contributor and Austrian School economist Steven Horwitz has considered a Hayekian socialism even more in line with the thrust of Bockman’s study. This is remarkable given Reason’s status as America’s flagship libertarian publication — a kind of National Review without the endless bows to war, surveillance, and God. Red-baiting, though, is usually par for the course.

At the onset of the financial crisis of 2007, in a review of economist Theodore Burczak’s 2006 book Socialism after Hayek, Horwitz cottoned to Burczak’s market-socialist paradigm of worker-owned and managed businesses.

While stopping short of sanctioning state-led mandates, Horwitz concluded, “Labor-managed firms themselves are not antagonistic to the market economy,” and imagined a future where the boundaries between market and socialist approaches are challenged even further. (Of course, the state action Horwitz opposes is exactly what’s required for Burczak’s paradigm to stand any chance of facing off with global capital.)

Some of these positions, to be sure, are not new. Milton Friedman himself supported a meager UBI. But such relative heterodoxy is becoming more prominent as libertarian intellectuals are forced to defend the economic system they hold dear.

The Business Press

A related shift can be spotted at the C-suite capitalist’s favorite weekly, the Economist.

Since the Great Recession, the publication has traded its faith in otherworldly mathematical models for a more hardheaded empirical reckoning with market behavior, specifically as it relates to market failure in the finance sector.

They have acknowledged how excessive inequality negatively affects growth, and explained why careful redistributionist policies are in order. They even praised economist Anthony Atkinson’s 2014 book Inequality: What Can Be Done?, in which one of the world’s leading experts on the economics of income distribution pushes a social-democratic platform of progressive taxation, generous floor incomes, wage controls, guaranteed work programs, and other similar measures.

Earlier this year, the magazine also penned a positive reconsideration of the radical American economist Henry George, who demanded a high land value tax to confiscate the rentier class’s unearned income.

Actually-existing economic difficulties like asset bubbles, short-termist speculation or investment, and corporate stock buybacks appear to have warmed the Economist to a more interventionist state; at times they even seem to be harkening back to the periodical’s Keynesian stretch under the editorship of Geoffrey Crowther and his immediate successors.

Capitalist stalwarts like Fortune are now mourning the results of forty years of neoliberal social policy, Forbes continues to rail against austerity, and the Wall Street Journal has conceded that a $15 minimum wage for fast-food workers might make sense in the country’s most expensive cities.

The right-wing Heritage Foundation, in conjunction with the Wall Street Journal, reserves the top spots in its Index of Economic Freedom for Western European social democracies. This showcases the best-kept secret in the United States: the fact that the accomplishments of the fairest and freest nations in the world are due to the struggles of workers and the historic strength of left parties.

Just as capitalists and conservatives were once compelled to accept the terms of the Progressive or New Deal bargains, so too are they now forced to acknowledge the social and economic costs of neoliberal capitalism.

Paleoconservatives and Traditionalists

Then there is Pat Buchanan’s brainchild, The American Conservative. Founded in the early 2000s in “paleoconservative” opposition to President Bush’s war administration, the magazine’s cultural revanchism offers a rebuke to stereotypical right-wing economics (when it’s not indulging in racist or restorationist apologetics).

In a recent piece honoring the legacy of social theorist Christopher Lasch, Matthew Harwood explains how corporate capitalism has undermined conservative values like autonomy, community, and the work ethic. Modesty and a healthy respect for limits have been sacrificed at the altar of economic growth. Families and neighborhoods have been uprooted by the demands of the unregulated marketplace. Individuals have been forced to relinquish their independence to the cold imperatives of distant employers.

For Lasch and Harwood, the solution is returning to the “producerist” tradition of Thomas Paine and Henry George, a vista where all citizens are guaranteed property or capital they can manage and workplaces they can democratically own and control. As Harwood concludes, this forgotten ideology “reveals that too many libertarians and conventional conservatives are confused apologists for a system that produces everything they despise: authoritarianism, centralization, and widespread dependence.”

Venues like Front Porch Republic have taken up similar battle cries, and the influential Catholic conservative journal First Things has praised the economic critiques of Pope Francis and the agrarian writer Wendell Berry.

In these sections of the Right, defending capitalism as such was never really the point. Their loathing of communism always eclipsed their love for capitalism. Now, with the Soviet Union vanquished and capitalism baring its teeth, the traditionalists are comfortable taking their own idiosyncratic shots at free markets.

Crisis of Legitimacy

We shouldn’t mistake elite opinion-makers on the Right for the conservative or libertarian bases they purportedly represent — bases that still view even a middling UBI as tantamount to socialism.

But what’s clear is that a growing number of intellectuals on the Right are taking anticapitalist critiques more seriously and are dabbling in socialized measures — provided they can be contained within an individualized vernacular and capitalist framework.

These developments represent a potential opening in the fault lines of the present, just as they offer the Left more intellectual breathing room.

The proper response is to acknowledge and engage with these ideological shifts — and then expand upon them. This might mean honing in on admissions at Reason or the Economist regarding the necessity of redistribution or regulation in order to make the case for more ambitious reforms.

Even more importantly, the Left must emphasize how and why the Right’s admissions fall far short of the anticapitalist critique needed amid capital’s legitimacy crisis. In that sense, the task isn’t all that different from previous convulsions when society was propelled, by material circumstance, to either save capitalism or transcend it. On this go-around, we must insist on the latter.