March 12, 2008

Yesterday I drew on the Niall Ferguson’s latest history of the 20th century to show how two vaunted alternatives to liberal capitalism—socialism (the fetish of class) and tribalism (the fetish of race)—all but drowned the Eurasian land mass in innocent blood. Each ideological movement presented itself as a source of renewed community to modern, “mass” men alienated from traditional folkways, cut off from extended family, and bereft of any hope of economic self-sufficiency. Who needs cousins when you have your fellow Communists? Why yawn through old-fashioned ceremonies in church, when the S.A. offers a much more exciting torchlit procession? Almost as important, these pseudo-communities of class or race promised economic security in exchange for a “freedom” which the poor had little reason to cherish. In the tumult and turmoil of a market economy, men producing crops or goods for a distant employer who catered to foreign markets were constantly subjected to the worst kind of shocks that threatened their livelihood and families. If a civil war in India caused cotton prices to fall, ten thousand Englishmen might find themselves out of work. Since few of them had ever earned enough to heap up savings, they might well be turned into paupers, through no fault of their own. (Somehow, their employers never seemed to starve.) Surely such a system must be the fruit of an evil conspiracy—the work of organized exploiters, either in cloth-coats or caftans. The parasitical enemies of the people (the class or the tribe) must be expropriated, their property socialized or Aryanized, and the well-being of the “community” ensured. Given the shock inflation and mass unemployment that pauperized millions, such radicalism seemed only requisite to the occasion; for orthodox economists, backed by big business, to counsel calm and patience to desperate masses seemed the height of callousness. Whatever the actual truth of their assertions—and Mises certainly understood the Great Depression better than Keynes, much less the cranks who rose to power in Moscow or Berlin—there was no political constituency for sanity in the wake of World War I and the Great Depression. It’s shocking, but shouldn’t be surprising, that The New Republic called for “An American Mussolini.”

In Roosevelt we found one—albeit a much more intelligent, sober and prudent man, whose worst efforts to overreach the Constitution were promptly rebuked by our sturdy political culture. In the end, Roosevelt’s aspiration to control and coordinate every wage and price in America was whittled down to size, and the U.S. marched during World War II and after into a mild form of social democracy—collectivism on the installment plan. (John Lukacs, in a pointless provocation, insists that Europe was conquered by “national socialism”—which is etymologically correct.) We didn’t buy that model home offered by the Myrdals, but we took out a mortgage on it. After the war, we poured our treasure into Western Europe, and helped rebuke the postwar Communist parties and Soviet armies, ensuring that Germany, Italy, and France would also adopt similar systems. Nowhere was it proposed that these nations return to an orthodox free-market system—whose advocates numbered literally in the dozens (namely, the members of the Montpelerin Society.)

Was there another way? Can a “Third Way” be traced between individualism and collectivism, or is such a hope misguided? Strict libertarians dismiss the term itself as nothing but a fig leaf for the advancement of economic coercion and the empowerment of the State. And if that were the outcome, we should certainly oppose it. Wilhelm Röpke, one of the first to use the term “


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