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Wednesday, November 30, 2011

Back on the Road to Serfdom: The Resurgence of Statism

Since the housing bubble burst in 2007, America’s social and economic troubles have mounted rapidly. Unemployment remains high, saving and investment low. The federal government is desperate to suck in enough money to pay its enormous tab for welfare and warfare a bit longer. Our politics have become increasingly vicious. About two-thirds of the people say that the country is on the wrong track.

The great battle is to persuade those people that our ills are rooted in statism—that is, reliance on government to do things that should be left to voluntary action. Back in the 1930s most Americans also thought the country was on the wrong track, but unfortunately they blundered into the wrong conclusion—that a great expansion of government power was what we needed. The challenge today is to convince them that government is the problem, not the solution.

Among the most stalwart opponents of big government and its apologists is historian Thomas Woods. His 2009 book Meltdown explained why the housing bubble and its aftermath were caused entirely by politics, not the free market. With this book he and his essayists indict statism generally and argue strongly in favor of radical depoliticization. In his introduction Woods identifies a key element in our national malaise: “The more functions the state usurps from civil society, the more the institutions of civil society atrophy. Once supplanted by coercive government, the tasks the people used to perform on a voluntary basis come to be viewed as impossible for society to manage in the absence of government. . . . The spiritless population comes in turn to look for political solutions even to the most trivial problems.”

The book consists of ten essays. In the first, Brian Domitrovic gives a useful history of the growth of the American State over the last two centuries. Carey Roberts follows it with an essay showing the continuing damage we suffer due to the statist thinking of Alexander Hamilton. Swedish economist Per Bylund then demolishes the notion, so often uttered by advocates of the welfare state, that Sweden proves how effective the “third way” (a welfare state neither capitalist nor socialist) can be.

Those three essays establish a solid framework for thinking about the impact of government interference with society’s spontaneous order. Woods next places Anthony Mueller’s essay exploring the true causes of the recent financial crisis, offering a corrective to the desperate scapegoating we’ve gotten from the politicians responsible for it. Mueller’s essay is followed by one by Mark Brandly, who reasserts the case for free trade and the international division of labor, which is under attack by statists who would have us believe that free trade hurts workers in poor countries. Dane Stangler next shows how entrepreneurship is threatened by the ever-encroaching power of government and how foolish it is to think that the State can perform the entrepreneurial function.

Journalist Tim Carney contributes the next essay, eviscerating one of the great myths of modern life: that big business is opposed to big government. The truth, Carney shows, is that big business is extremely cozy with both “liberal” and conservative politicians. As a result America’s economy is steadily drifting toward a syndicalist system dominated by politically favored firms.

Two essays deal with the interface between religion and the politicized society. Gerard Casey examines the traditional hostility many Christian clerics have toward capitalism and finds that it is without any foundation in the Bible. John Larrivee also evaluates the religious arguments against the free market. In his view those arguments are not only naive but ultimately undermine both faith and civil society.

In the book’s final essay Paul Cantor shows how government intervention in culture, specifically television, substitutes bureaucratic directives for the spontaneous origins of true culture. If you ever wondered why the boat on the series Gilligan’s Island was named “Minnow” you’ll find out by reading Cantor’s essay.

These are all splendid pieces, but I am especially drawn to Per Bylund’s. In it he demonstrates the truth of Hayek’s argument that socialism destroys the foundation for prosperity by gradually changing the character of the people. Bylund observes that young Swedish adults today are far different in their outlook from their grandparents. Whereas Swedes had once been known for their solid work ethic, after many years of the welfare state and its numerous entitlements, it is largely gone. Young Swedes are known for taking as much time off as they can while collecting as much as possible in government benefits. The nation’s standard of living is falling and must continue to do so.

I have just one tiny quibble with the book’s title. When were we ever off the road to serfdom?

  • George Leef is the former book review editor of The Freeman. He is director of research at the John W. Pope Center for Higher Education Policy.