Conservatism and the Nineteenth Century

October 8, 2005 12:01 PM

Another "please explain" question for conservatives, libertarians, and perhaps historians regarding welfare, concepts of economic freedom, and the nineteenth century.

In this thread discussing single-motherhood and welfare, sonofsamiam writes, "I think that people are best served socially by policies that give them the maximum amount of economic discretion, but I understand that many smart and good people disagree."

I have heard the same voiced by others. My question is didn't we try that in the nineteenth century and wasn't the result of that widespread misery? That is, it seems to me that laissez-faire capitalism as epitomized by the Gilded Age made most people unhappy and served society poorly, which dissatisfaction led to the turn-of-the-century Progressive reforms, the New Deal, and the Great Society. How do you see this progression? What in it or in contemporary society suggests to you that we would be better off if we undid such reforms?

As usual, please keep the thread civil. I am interested in answers more than arguments in this case. If you have a problem with my question, etc., my email is on my user page. I know I have made it clear before that I am a big old socialist, but I ask this question in earnest.

posted by dame to society & culture (23 comments total)

I don't know what I'd call myself, but I would go along with that statement. I'm English BTW.

My answer is that it was more a rigid class system as well as simple lack of technology that caused widespread poverty rather than capitalism itself. I respect the work the Labour movement and Trade unions did in breaking down class structures somewhat and getting us to the point where we are today.

I recognise that there are some people that have a bad start in life. However now there are many opportunities available to everyone wherever they come from (in the West), and I believe that it's an individuals responsibility for where they get in life.

A lot of people don't manage because they've had a fucked up childhood and learned bad habits from their parents, not because of lack of opportunities. This isn't something that can be cured with economic polices or be solved by the government, only education being available and those people being prepared to change their own lives.
posted by lunkfish at 12:24 PM on October 8, 2005

economic policies
posted by lunkfish at 12:25 PM on October 8, 2005

Also I don't think economics is now always a 'Zero Sum' game where someone has to be the loser and someone the winner. I think it's possible for more wealth to be created and everyone to get better off.
posted by lunkfish at 12:27 PM on October 8, 2005

A cursory study of American history should make pretty clear that in fact a lot of U.S. economic policy at the time was not laissez-faire. To name only a few examples: High tariffs, massive subsidies to favored industries, the dubious use of various laws to restrain the private (as opposed to the quasi-governmental) activities of labor unions, government-granted and -enforced monopolies to favored cronies, as well as a set of family and gender law that effectively eliminated the free labor rights of half the population, and a set of racial laws that created a government-oppressed underclass without the ability to function as truly free members of society.

So. I take it that most modern proponents of laissez-faire don't want to return to the bad-old-days when railroads owned California, when the Louisiana government granted slaughterhouse monopolies to private groups, when jim crow laws and archaic family law kept more than half the population from being able to participate as free agents in a capitalistic society, and so on. Many of the laws that modern laissez-faire types would like to see overturned in fact date back to the nineteenth century.

So, I don't mean to start an argument either, but to point out that the "gilded age" was hardly a time of free market capitalism. Now it might be that modern economic regulation of the economy is still a good thing, but the experience of americans under the massive government involvements in the 19th-century economy don't really show much about that either way.
posted by willbaude at 12:34 PM on October 8, 2005

My question is didn't we try that in the nineteenth century and wasn't the result of that widespread misery?

Sure, but was it worse than the virtual enslavement of the majority of the population in earlier centuries when few people owned their own land and answered to the lord of the manor? Luckily society has tended to get fairer, and life has become easier, as the years go past. The transitions are tough.

That said, I personally believe our (Western) society is at a point where it's possible to manage certain 'essential' services in a loosely-centralized way (health, for example), but still offer plentiful freedoms to those who need it. Do we really need a 100% capitalist system to provide total freedom and fairness? I'd suggest not. We've progressed.
posted by wackybrit at 12:41 PM on October 8, 2005

That is, it seems to me that laissez-faire capitalism as epitomized by the Gilded Age made most people unhappy and served society poorly, which dissatisfaction led to the turn-of-the-century Progressive reforms, the New Deal, and the Great Society.

I think that there is a happy medium to be found in there.

Personally, I'm a big fan of regulation, which was, I believe, a Progressive-era reform. Regulation is the only real way for a community to influence the actions of big corperate behemoths. Unfortunately, right now, regulation is a joke, with the revolving door between regulators and those being regulated spinning more wildly then ever.

However, I'm not a big fan of socialism and giving lots of free stuff away to people.

So I guess that puts me somewhere in the middle of the spectrum.

(for a change)
posted by afroblanca at 12:42 PM on October 8, 2005

I'm libertarian to the extent that I believe that government policies ought to create the conditions in which people are likely to stand on their own feet. I prefer this to the government directly redistributing wealth. I also prefer this to unfettered capitalism or conditions in which the self-interest of one sector of society is allowed to crush the interests of all others.

I feel as if my version of libertarianism, with the government refereeing among interests to acheive a rough parity, seems rare to me. It certainly doesn't characterize the "gilded age" or the present-day Republican flavor or libertarianism.

I also think that saying that this-or-that has "been tried" is usually way too simple. Societies have their own complex flavors and are not intended as lab experiments. Too many confounding variables apply.
posted by argybarg at 12:50 PM on October 8, 2005

Willbaude, there are people who would suggest that the things you list (aside from high tarriffs) are the natural result of laissez-faire capitalism. (Trying to claify, not argue . . . maybe failing?)

Argybarg: What do you think some of those differing variables are between now & today?
posted by dame at 12:58 PM on October 8, 2005

dame-- we tried central planning throghout the twentieth century, and that didn't turn out very well, either.

Asking for our arguments in the way you did isn't really going to give you the best understanding of why we believe what we do. But we generally believe (for instance) that:
Monopolies aren't necessarily bad.
Schumpeter was right.
The New Deal worsened the Depression.

From the premises you're starting with, I can't blame you for arriving where you have.
posted by Kwantsar at 12:59 PM on October 8, 2005

I agree wholeheartedly with that statement provided there are some basic understandings here. Which is that the maximum economic discretion should be allowed, provided that the people who amass wealth aren't then using that money to buy corrupt politicians and then in turn use political power to trample all over the rights of others and suppress economic competition. A lot of which happened in the 19th and early Twentieth century as exhibited by the numerous politicalscandals such as Tamany Hall, Teapot Dome etc...

Also, the political climate was not one that encouraged risk and their were actually laws that severely limited competition and punished people for taking risks that might otherwise allow them to compete economically (debtors' prisons anyone?). I don't think anyone would call that capititalism.

But to add to what Lunkfish said -- wealth is not always a zero sum game. Power on the other hand almost always is. What ever political authority you centralize or amass it's at the expense of others.

Which is why it's always better to err on the side of economic freedom as a opposed to politically enforcing economic parity.

To the extent that there was misery and poverty as a result of the industrial revolution and you can blame that on capitalism, that still stacks up quite well compared to the 100 million people dead this century thanks to communism, our novel solution to use political power to enforce economic parity.
posted by Heminator at 1:01 PM on October 8, 2005

there are people who would suggest that the things you list (aside from high tarriffs) are the natural result of laissez-faire capitalism.

Those things are the products of a representative democracy.
posted by Kwantsar at 1:03 PM on October 8, 2005

Thank you, Kwanstar. Do you have a link that refers to democratic socialism as well as Communism?
posted by dame at 1:04 PM on October 8, 2005

Oh, I missed your second post. Can you explain that further? What sort of government would you suggest is better suited to accompanying capitalism if not representative democracy?

(And thanks everyone for answering.)
posted by dame at 1:05 PM on October 8, 2005

This is a nineteenth-century UK example, not a US example, but you might be interested in Stewart J. Brown's Thomas Chalmers and the Godly Commonwealth in Scotland. To oversimplify drastically, Chalmers tried to develop a social support network (one intended to ensure that the "able-bodied poor" remained in the workforce) entirely based on private donations. Brown tracks the initial success and eventual collapse of Chalmers' project, which, he argues, turned out to depend on the government support it was supposed to do without.
posted by thomas j wise at 1:05 PM on October 8, 2005

Dame:

As I understand the term "laissez-faire capitalism" it defines a government that establishes a system of private law (property, contract, tort) and then simply allows markets to be. Thus "Laissez-faire". This means that a government that routinely intervenes in these markets in order to forbid certain businesses from selling, grant special privileges to others, etc. is not engaging in "laissez-faire" policies. It is engaging in arguably pro-business policies, which are not at all the same thing.

Now, if the claim is that "laissez-faire" markets are impossible to have in the long run because interest group pressures will always lead to rent-seeking and government invasion, that is an interesting political science claim, but still doesn't get to your original question, namely whether or not we experimented with laissez-faire in the 19th century (which we didn't) and whether or not that experiment (which we didn't have) failed.

Now, if what you meant by "laissez-faire" was really the massively regulated and government-subsidized economic system of racial and gender slavery that we had in the 19th century, the answer would be yes, that it does in restrospect seem to have been a pretty good idea to abandon that system. But that's nothing like the standard notion of laissez-faire or economic freedom that sonofsamiam et.al. advocate. I don't know anybody who advocates returning to the law of the gilded age.
posted by willbaude at 1:16 PM on October 8, 2005

Oh, I missed your second post. Can you explain that further? What sort of government would you suggest is better suited to accompanying capitalism if not representative democracy?

A benevolent dictatorship? Or the US system with 12 Clarence Thomases on the bench (12 Scalias would be a nightmare, however)? I'm kidding, sort of. I think Nozick's Utopia could only exist with an extremely strong Constitution and a populace that believed in it. It certainly couldn't be enforced without the consent of the governed.

And I don't have a link for democratic socialism, but to free-market types, there's not much of a difference. You've read The Road to Serfdom, I hope.

And though I can't prove it, I think that if the US were to spend as little on defense as do typical Democratic Socialist states and allowed unlimited drug reimportation, even while maintaining the existing constraints we put on capitalism, we'd beat nearly everyone on the quality-of-life numbers within ten years. Unless Estonia and Ireland kick our asses by then.
posted by Kwantsar at 1:36 PM on October 8, 2005

9, not 12.
posted by Kwantsar at 1:58 PM on October 8, 2005

And I don't have a link for democratic socialism, but to free-market types, there's not much of a difference.

Isn't there for most people who live under them? I mean, Sweden's hardly comitting genocide.

Anyway, thanks all.
posted by dame at 4:12 PM on October 8, 2005

You've read The Road to Serfdom, I hope.

I don't think one can say that points 8 through 18 always or even usually follow points 1-7. Frequently point 8 is "Eventually everybody calms down and works on a compromise that leaves everyone unsatisfied but mostly works and saves face for all the major players." see the history of the US from its founding onwards or Britain since Cromwell (relatively speaking).
posted by PinkStainlessTail at 4:49 PM on October 8, 2005

Good question... I'd make two points - one is about the difficulties of comparing the nineteenth century to now, and one is more related to the latter part of the question.

1) "Didn't we try that in the nineteenth century?" I will take Britain as an example since it is generally acknowledged to have industrialised first, but it could apply to any industrialising nation - there are difficulties in moving from one system to another. Some may call those difficulties immoral, some may call it progress, but the key point is what happened during the transition. In Britain, you had a very sudden transition from a largely agricultural economy to an increasingly industrialised economy coupled with a dramatic drop in real wages plus harvest failures - coupled with a move away from feudalist, Speenhamland-style protection for the poor to the Poor Law in 1834. Was it worse than the paternalistic set-up in previous centuries? For some, almost certainly. It is arguable that those displaced by laissez-faire policies were indeed the casualties of it - but there is a different argument to be had today (in the industrialised world at least) about the consequences of laissez-faire capitalism now we have it in place. I think this needs to be considered in any argument about "capitalism caused difficulties then, therefore it could cause difficulties now" - it is slightly fallacious to compare a system's effects 150 years ago with those today (particularly when the system itself has evolved, and will vary depending on local circumstances).

2) My own opinion (and I am bringing a British perspective to this) is that progressive reforms (welfare state, NHS, and so on, to give UK equivalents of New Deal et al) are not intrinsically unsustainable. But they require a high level of political and electoral will, and this is not currently there. In the UK, MORI (one of the major independent polling organisations) quotes the majority of the electorate as wanting high quality, high-financed public services but low tax rates and laissez-faire economics. Making up the potential gap between these two sides is, it seems to me, what is occupying both UK parties and others in Europe at the moment. Add to this that the welfare state was created in a particular time and place - and that conditions have changed somewhat - and the decisions get even tougher. Just one example - where do the boundaries of the welfare state stop in response to increased global migration? Do short-term migrants to the west become part of the welfare state, or is it closed off to those who have already contributed (or whose parents have contributed) to some hypothetical pot of money. It seems to me that these are the sort of questions with which western countries will have to grapple in the next few decades, and the answer will determine where laissez-faire or collectivist/social democratic policies end up.

This has been a really interesting thread so far - will be interested to see what comes up next.
posted by greycap at 5:55 PM on October 8, 2005

PST-- I don't think you can really grasp the entire logic of the book from the cartoon version, y'know?

Cribbed from an Amazon review: Hayek's thesis was that central economic planning will inevitably lead to governmental control of every facet of its citizen's life, and hence toward a totalitarian state.

And, dame, your claim that the Swedes are "hardly committing genocide," while technically true, evinces ignorance of the nation's somewhat recent past.
posted by Kwantsar at 6:57 PM on October 8, 2005

Road to Serfdom is a great book, but it is difficult to remember that it was written just after World War Two by someone who was mostly basing his thesis on his own observations of the early part of the Nazi regime... which is different than someone today comparing x to Nazis when Nazis have become, for most people, this almost mythological evil.

At any rate -- the main argument of a libertarian would be to say that the 19th century was not in fact an ideal free market/ laissez-faire type economy. The fact of the matter is that a true free market doesn't just stay away from redistributive programs such as welfare, it also (perhaps even mostly) stays away from government-granted monopolies, corporate welfare, etc.

And obviously there are many other things to consider in terms of the late 19th century -- obviously many of the poor were blacks, immigrants, and women, who were actively being discriminated against. Others were Southerners who had lost a great deal in the Civil War. It was a nasty time for a whole ton of reasons.

I think one of the problems is that too often things are seen in terms of interests -- it's in a corporation's interest to be free of wage and price controls (free market) but it's also in their interest that they personally receive the benefits of government-enforced monopolies and "corporate welfare" handouts (anti-free market). It would be nice if we could just take an objective look at policies rather than turning all of politics into a horse-race where everyone's vote is pre-determined by some demographic factor.

Libertarians believe a more prosperous society solves many social ills -- there was an article a while back on reason.com about child labor in Vietnam, and how many people predicted it would increase with a rise in wages, since they'd be that much more valuable, when actually it decreased, because families were able to obtain subsistence level incomes without it.
posted by dagnyscott at 12:51 PM on October 9, 2005

According to my introductory economics class, which I took in 1991 so it may be a bit out of date, the US Gov't controls the allocation of 45% of US GDP.

When I am in an amusable mood, it amuses me to think that, after all the debates between laissez-faire and central planning, the outcome (in 1991, at least) was a near 50/50 split.

Your question, incidentally, begs the actual question it's asking; it purports to be an inquiry about how people see progressive (socialist) economic policies, but it's actually a question about what the goal of economic policies should be; and it answers itself when it states it seems to me that laissez-faire capitalism as epitomized by the Gilded Age made most people unhappy and served society poorly.

That the goal of economic policy should be to make people happy and serve society well is a pretty good statement of the central tenet of economic utilitarianism, which is only one of many philosophical systems that suggest ways to form a coherent economic policy. As Kwantsar has eloquently (and uncharacteristically gently) pointed out, some of us feel, to greater or lesser extents, that this kind of utilitarianism can create injustice, or retard progress or growth.

For my own part, I'd prefer to see more progressive policies in certain areas, especially education and preventive health care; and less in others. I confess to a strong bias in favor of living in a barely-strung-together society with fabulous, capable, empowered, educated, individual people; as opposed to a Great Society, running smoothly, among a giant unwashed mass of bland mediocre underachievers.
posted by ikkyu2 at 12:45 AM on October 10, 2005