American Resolution

A Discussion of Liberal and Conservative Thought

By Robert DePaolo

Exposure to the seemingly intractable conflict between conservatives and liberals might lead to utter pessimism regarding the future of the USA. The debate is being played out in partisan terms on radio, TV and newspapers, albeit occasionally in erudite fashion. Still, the issues tend to become clouded as a result of what one might refer to as selective perception. In point of fact, American socioeconomics is a bit more complex than is implied by a right vs. left ideological dichotomy.

The implications of ultra-partisanship are arguably profound and potentially detrimental. Aside from the question of whether liberals or conservatives “have it right” is the issue of ultra-partisanship’s long term effect, which could end up creating an oscillating stagnation. For example, say conservatives win the House and Senate in 2010, and the presidency in 2012. To conservatives that would provide sublime closure. However since, by liberal reckoning, conservatives will have won by engaging in unfair, endless criticism of President Obama and the democrats, there will be a retaliatory effort to regain power – as there was with the Bush-bashing of the previous eight years.

With respect to the overall political evolution of the USA, and to the extent that there is a difference between winning and solving problems, that is not good news. Furthermore since networks and newspapers are now mostly partisan, there will never be a truly objective source to tell us whether liberalism or conservatism is invariably better, or whether the efficacy of either philosophy depends on extant economic and political circumstances. In other words, is there a time and a place for each, and if so, is it really a question of alternating formats rather than excluding one or the other from the political zeitgeist?

If we are destined to ride a socio-political rollercoaster for the remainder of our existence as a nation, then we will have to be content with tit-for-tat politics whereby one group ascends to power and the other attempts to tear it down - ad infinitum, or whether it is possible to find a grounding belief system to finally anchor the ship of state.

It should be noted that this is hardly an American problem. No (secular) nation has really been able to find a lasting socio-economic fulcrum. It is also possible that ongoing conflict in a democracy is both inevitable and beneficial. Still, at some point it might be important to try and figure out who we are, and what core premises drive and define our socio-economic system.

Those who argue that the plan has already been outlined in the Constitution make a good point. After all, why write such a document if not for regulatory purposes? On the other hand the founders themselves were well aware of the need for revisions to accommodate future trends, norms and generations. Jefferson and others were fairly adamant about the need for America to adapt in its journey through history. Even more compelling is the principle that American politics is primarily a function of public sentiment as expressed in the voting booth. In that context it is remotely conceivable that voters might one day decide to elect a socialist or even communist president. Such a vote would trump all constitutional considerations because the idea of popular governance supersedes all else.

While no one in his right mind would favor such an outcome, it does point out the possibility that founding a nation based on public opinion can be a shaky process.

Economics largely defines a nation’s beliefs; putting food on the table being a tad more important than contemplating one’s navel. Consequently, one can look to the respective ideas of liberals and conservatives on economics to assess what this debate really is, or should be about.

Conservative economics espouses low taxes, few if any limitations on the accumulation of wealth, private ownership and substantial restraints on government intervention. Liberal economics espouses the opposite. The latter offers a moral view on economics in that the rich are often depicted as being greedy and entrepreneurial success is often attributed to luck rather than hard work. Government intervention is viewed as a means by which to rescue the poor and protect the consumer. This approach typically necessitates and leads to higher taxes in order to fund programs for the needy and as part of a broadly communal mindset,

At the risk of oversimplifying matters, the liberal vs conservative arguments have historically been based on class conflict. Liberalism derives from egalitarian theories propounded by Marx, Engels and David Ricardo in that its advocates favor the plight of the proletariat and view disparities in wealth as inherently unfair. They misinterpret the phrase “all men are created equal” to mean everyone should end up with (at least) an adequate degree of wealth and achievements. This is not meant as a criticism of the left, nor is it assigning guilt by association. It’s just that with the exception of a few iconoclastic religious leaders like Robert Owen and Labadie, Marx and Engels were the first to come up with the idea of scientific socialism. As a result all subsequent socialist/liberal ideas are at least somewhat derivative.

Historically both the liberal and conservative formats have been called into question. Liberal economics, both in the above context and in the Keynesian sense, have led to depleted government resources, most recently exemplified by the economic turmoil in European nations. The reason is rather simple. When government spends money, either as a supportive measure or in a Keynesian sense, to invest in job creation (the New Deal Model) it obviously loses money in the process. Since Keynesian economics entails government initiatives, all such programs must be written into law, thus presumed non-fluid and necessarily sustainable. Private companies can downsize, change formats, streamline and in general adapt. Government programs tend to remained fixed because they are, in effect, laws not business decisions. Since government gets its money from people it tends toward, at best, a minimal net gain and more often, a massive net loss. Indeed the only way for government to get a good return on its investment (and not end up having to overtax to make up for its revenue losses) would be for it to produce a substantial profit margin (which it cannot do by law) or to enhance the incomes of its supportees so much that their taxes would make up the difference. Since government seldom provides high wage jobs that rarely happens.

Private industry on the other hand costs the government nothing and often adds to government revenue through corporate taxes. In fact arguably the best way for government to support the needy would simply be for it to dramatically privatize and incentivize the economic system, thereby reducing cost and tax rates, increasing revenues (based on the fact that low tax rates lead to corporate growth and often produce more tax revenues) and thereby continue funding social programs without jeopardizing the nation’s fiscal solvency.

One reason American government does not readily do so is that conservative economics and the private model also have drawbacks. Aside from the Great Depression, which resulted from a number of factors other than foolish Wall St. speculation, there have been times when the rising tide has not lifted all boats. For example, as seen in the economic boom in the 80s, once a corporation becomes large and sophisticated its workers are required to have more sophisticated skills. Engineers, mechanics and computer programmers all benefit from increased profits. That is not necessarily true with unskilled workers. That is because the main principle in a conservative economic system is that one’s income is determined by one’s value. Conservative economics is not immoral (as some liberals claim) but it can be coldly muscular and mathematical. Makeshift and unskilled workers aren’t paid well and are also quite expendable.

So what is the quintessential American philosophy? It cannot be captured in the word freedom because America is not a free society. It is a contractual society. No citizen can do what he wants. Freedom implies unilateral behaviors and decision making. A person can’t start a business, purchase a product, take a vacation or vote without an exchange of responsibilities. For example he must register a business with the state. He must pay for products and satisfy customers. In any of those endeavors, it is the relatively unrestrained capacity of two or more parties to come to an agreement that comprises what we often refer to as freedom. In other words America is a nation grounded morally, economically and politically by a doctrine of reciprocity.

In that case one could argue that America’s roots lie, not in the Constitution, but in the writings of Locke and Rousseau, who were among the first to espouse a contractual relationship between citizen and state. In a perfect world (and as Voltaire suggested, in a sparsely populated society) that might make sense. However, because politicians represent many constituents tied down by life’s vicissitudes and because there are so many bills to vote on there is bound to be remote communication between citizen and state. Also the fundamental principle behind contract law (the right to sue or render an agreement null and void if one party does not comply) is in some ways impractical. Locke and others wrote that whenever a citizen felt the state had reneged on its agreement with the citizen, the latter had the right to “revert back to a state of nature;” that is, refuse to adhere to governmental laws and mandates.

In the modern world, where one depends on highways, public education, police and fire departments, a true “reversion” would be implausible.

Filing suit would be almost as difficult due to the civil law criteria requiring a cause of action and specification of damages. A citizen who sued based on politicians’ vote to increase taxes might construe the vote as a violation of his own personal contract with the state but it wouldn’t necessarily violate the General Will of the people.

Considering such circumstances it might seem we are relegated to what Jefferson described as a government of “second grade purity.” Remotely connected, disillusioned, selectively informed by media that is defined by the times, rather defining (or even describing) the times: it might appear we are destined to devolve into a beast with two perennially conflicting heads.

Yet one idea could potentially provide a foundation and ameliorate confusion. It might even give us a sense, now and for the future, of who we are and what we are supposed to be. It is found in the ideas, not of Jefferson and Madison but of Sigmund Freud and Adam Smith.

With respect to our nation’s founding, one might presume that the years between 1776 and 1787, during which the Declaration of Independence was drafted and the Constitution was ratified, marked a transition between the philosophical and the practical. Jefferson’s wording in the Declaration of Independence was lofty, theoretical and global. He wrote of the rights of man and other factors pertaining to the human condition. While he obviously included specific accusations against King George III the document consisted of more than grievances and particulars. Conversely, the Constitution was anything but philosophical and global. Indeed it was conceived and written tactically and locally. Representatives from the states argued their cases on behalf of their states regarding commerce, suffrage, and the issue of equality itself. Consequently, a good part of Jefferson’s combination Writ of Summons/Promise to the World never reached fruition. As a result American Philosophy took a back seat to law, self interest and the concept of Federalism. Subsequent amendments were added down through the years, as mores changed, times changed and people changed.

That tendency to turn away from a central philosophy might have left our nation in a vacuum, if not for another document written the same year as the Declaration of Independence. It was Adam Smith’s book “Wealth of Nations” that provided a roadmap to contractual freedom in Europe and America. His thesis was interesting – his background perhaps even more so.

Smith was a moralist, not a hard boiled, bottom-line merchant, but a Scottish minister who sought an integrative model to accommodate the needs for growth, productivity, creativity and wealth with the need to accommodate the less gifted and less socio-economically advantaged members of human society.

His thesis was pre-Freudian in that it was actually a combination of economics and human nature – incredibly prescient for an 18^th century writer. Like Freud he looked at the human animal and asked not about his ideology or socio-economic status but about his natural, behavioral inclinations.

Well before Darwin or Freud, he observed that some presumed “negative” traits Including material acquisitiveness and the need for individual distinction are relatively fixed components of human nature. Therefore he reasoned, they cannot be undone; not even by government regulations or social consensus. His reasoning was correct. The pre-historical record indicates that almost as soon as Homo sapiens arrived on the scene he began to make amulets, trade goods with other tribes, paint himself, wear elaborate garb and attempt to distinguish himself from the rest of the pack in various other ways.

Smith concluded that man desires wealth and material acquisitions, and that like Freud’s id, acquisitiveness is, while occasionally excessive, the main driving force behind human ingenuity. He decided that only by acknowledging and indulging this need could man improve his lot in life and enhance his capacity to thrive and survive.

in Smithonian terms, Gordon Gecko’s famous line in the movie Wall St. “greed is good” and the belief among some modern liberals that “greed is bad” are both inaccurate. In the context of conservative economics greed or acquisitiveness is neither good nor bad. It is simply a lump of clay with incredible energy potential. The way in which the impulse to acquire is encouraged, shaped and channeled is what enhances or detracts from a nation’s well being.

For Smith the key question was how to rein in this impulse so that it would both allow for the expression of human need and benefit human society. Just as Freud came up with a regulatory psychic structure he called the ego, which understands the limits of social probity and directs id-derived energies constructively, so did Smith come up with the dual regulatory elements of competition and consumerism. To Smith materialism would benefit human society as long as the ego function of consumer-discretion was also involved. At the risk of putting words posthumously into his mouth he might have offered the following scenario to illustrate the point.

Smith believed a growth imperative such as seen in the above illustration would usher in an epoch of continued progress and result in higher living standards. That in turn would lead to a more content, civil, moral and well educated society whose well-fed members would be so invested in the state (especially since its well being coincided with their own), that even patriotism would flourish. In a sense, conservative economic theory could be whimsically referred to as a simple tweaking of human nature. The question is whether that can be used as a staple in American socio-economics.

To a large extent Smith’s vision has been confirmed. In some instances when it was not, such as occurred in the government law suit against Rockefeller, Morgan and Harriman in 1902 with the case of the United States of America vs Northern Securities and the insider trading fiasco (which was then legal) preceding the Stock Market crash of 1929, the problem seemed to be lack of a socio-economic ego as well as true and pervasive competition.

Just how this pertains to the discussion of American philosophy, with its free-contractual underpinnings can be framed in terms of human nature. To wit; Americans are human beings with material wants and needs. The notion of pursuit of happiness might have been Jefferson’s way of acknowledging that fact. Our version of freedom involves making sure human nature is channeled properly, not ignored, not restricted by governmental sympathies for subgroups or by direct intervention but by firm laws ensuring that businesses have adequate competition, are not in collusion to keep prices high, and that consumers have the information by which to “select” in the Darwinian sense, which products to purchase and which companies get to survive.

In that context it would seem only a few steps would be necessary to make the American economy both inherently productive and congruent with human nature.

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