Market Conservatism
As with any ideology, the adherents of conservatism do not always agree on the tenets of the conservative worldview. Keeping in mind that what follows is a gross, gross generalization, we can distinguish three prominent strands of conservatism: market or business conservatism, social values conservatism, and neo-conservatism. While these three strands of conservatism coexist together in one movement, there are notable differences between them.
Market Conservatism
One branch of conservatism—heavily populated by economists, businessmen, and the champions of business—is very concerned with protecting business enterprises from government restrictions. At the same time, they promote government policies that actively support corporations, “competitiveness,” and globalization.
In the United States, market conservatism can be traced to Alexander Hamilton (1755-1804), a Revolutionary War hero and Secretary of the Treasury under George Washington, who wrote a Report on Manufactures in 1791. Hamilton pressed to have the young United States encourage the development of local manufacturing so that Americans would not be dependent on imports. He also suggested that tax revenue be used to promote the “general welfare” as allowed under the Constitution. Hamilton’s view of an industrial American contrasted with Thomas Jefferson’s vision of an agrarian society populated by yeomen farmers. Hamilton supported the free market system, but could not be classified as a strict supporter of laissez-faire economics as embraced by classical liberalism. (1) And this provides an important insight into the thinking of market conservatives: they tend to be vocal supporters of free market capitalism while simultaneously embracing active government intervention when it serves the interests of business.
Throughout the latter half of the 19th century and beginning half of the 20th century, market conservatives were preoccupied with limiting the ability of labor to organize itself, and resisting efforts to have government regulate the ever-larger business enterprises that developed after the Civil War. With respect to the first point, Henry Clews (1834-1923), a successful Wall Street financier, argued that the question was “whether capital or labor shall, in future, determine the terms upon which the invested resources of the nation are to be employed.” On the second issue John D. Rockefeller (1839-1937), whose Standard Oil Company gained a virtual monopoly of oil production in the United States, testified before Congress in 1899 that, “It is too late to argue about advantages of industrial combinations. They are a necessity.” It is interesting to see how those issues were ultimately resolved: while unions were allowed to exist, and government has put in place numerous agencies regulating business activity, those provisions are weak at best, and easily used by business to its own advantage.
Market conservatives extol the virtues of business, while denying that businesses have any contractual obligations to their workers or their communities beyond the paychecks that they issue. If a businessman can squeeze out more profit by skimping on wages or workplace safety (within the limits of the law), there is in the market capitalist way of thinking no real objection to doing so. If a company wants to lay-off workers or close a plant, that decision can be made undemocratically, behind closed doors, with the corporate bottom line being the primary consideration. As the Nobel Prize-winning economist Milton Friedman (1912-2006) bluntly put it, “The social responsibility of business is to increase its profits.”(2) That may sound harsh, but conservatives argue that this self-interest pays important social dividends. Prosperity underpins the values that make a society and its people strong—opportunity, philanthropy, education, innovation, competition, and ultimately the resources needed to combat social ills. Market conservatives greatly favor this approach to one that saddles businesses with excessive taxation and regulation, and stifles society with ill-conceived social programs.
The vision touted strongly by market conservatives (but endorsed by most other conservatives as well) is one of an ownership society, in which the private sector is empowered and the public sector restricted. This is obviously a very old idea, but the term itself is relatively new. President George W. Bush found the idea especially appealing. The Cato Institute website has a nice definition of the ownership society, so we’ll repeat that here: “An ownership society values responsibility, liberty, and property. Individuals are empowered by freeing them from dependence on government handouts and making them owners instead, in control of their own lives and destinies. In the ownership society, patients control their own health care, parents control their own children's education, and workers control their retirement savings.”(3)
The most prominent market conservative politicians were Margaret Thatcher (b. 1925) and Ronald Reagan (1911-2004). Thatcher was the British Prime Minister from 1979 to 1990, while Reagan was U. S. President from 1981 to 1989. Both took steps to curb the power of labor unions, loosen regulations on business, and privatize government-owned businesses or subcontract government services to private businesses. Perhaps owing to the nature of the British parliamentary system, Thatcher was considerably more successful on all fronts. She sold off government-owned businesses such as British Airways and British Petroleum, sold council housing [public housing] to working class residents, decreased regulation on business, increased the VAT tax [a sales tax], and abolished the Greater London Council, led by leftist politicians with whom she disagreed. Her brand of conservatism was known as Thatcherism or the Thatcher Revolution.
Market conservatives of both parties have been particularly successful in enshrining their principles in international trade agreements. For example, the North American Free Trade Agreement--supported by market-oriented Democrats and Republicans who received considerable campaign finance money from corporations--lowered trade and investment restrictions between the United States, Canada, and Mexico. The resulting disruptions created huge incentives for poor Mexicans to migrate legally or illegally to seek opportunities in the United States while at the same time put downward pressure on the wages of poor and lower middle-class Americans.(4)
Market conservatives became truly ascendant in President Donald Trump's administration. His tax proposals represented a huge windfall for big businesses, rich individuals, and Wall Street financiers. His efforts to deconstruct the Affordable Care Act threatened to destabilize health insurance markets and increase the amount that sick people would pay for insurance, while cutting premiums for healthier people. He acted to reduce regulations on businesses generally, and specifically cut regulations designed to protect the environment and forestall climate change.
(1) Here’s where is gets really confusing. Market conservatives, because they support the kind of limited government regulation of the economy once championed by classical liberals, are often called neo-liberals. So when you hear phrases like “neo-liberal policies,” you’ll want to remind yourself that they are really references to market conservatism and libertarianism.
(2) Milton Friedman, “The Social Responsibility of Business is to Increase its Profits,” The New York Times Magazine. September 13, 1970. Note that Friedman fits more comfortably in the libertarian paradigm, but is often cited approvingly by market conservatives.
(3) http://www.cato.org/special/ownership_society/
(4) Jeff Faux, Nafta's Impact on U.S. Workers. Economic Policy Institute. December 9, 2013. http://www.epi.org/blog/naftas-impact-workers/
Market Conservatism
One branch of conservatism—heavily populated by economists, businessmen, and the champions of business—is very concerned with protecting business enterprises from government restrictions. At the same time, they promote government policies that actively support corporations, “competitiveness,” and globalization.
In the United States, market conservatism can be traced to Alexander Hamilton (1755-1804), a Revolutionary War hero and Secretary of the Treasury under George Washington, who wrote a Report on Manufactures in 1791. Hamilton pressed to have the young United States encourage the development of local manufacturing so that Americans would not be dependent on imports. He also suggested that tax revenue be used to promote the “general welfare” as allowed under the Constitution. Hamilton’s view of an industrial American contrasted with Thomas Jefferson’s vision of an agrarian society populated by yeomen farmers. Hamilton supported the free market system, but could not be classified as a strict supporter of laissez-faire economics as embraced by classical liberalism. (1) And this provides an important insight into the thinking of market conservatives: they tend to be vocal supporters of free market capitalism while simultaneously embracing active government intervention when it serves the interests of business.
Throughout the latter half of the 19th century and beginning half of the 20th century, market conservatives were preoccupied with limiting the ability of labor to organize itself, and resisting efforts to have government regulate the ever-larger business enterprises that developed after the Civil War. With respect to the first point, Henry Clews (1834-1923), a successful Wall Street financier, argued that the question was “whether capital or labor shall, in future, determine the terms upon which the invested resources of the nation are to be employed.” On the second issue John D. Rockefeller (1839-1937), whose Standard Oil Company gained a virtual monopoly of oil production in the United States, testified before Congress in 1899 that, “It is too late to argue about advantages of industrial combinations. They are a necessity.” It is interesting to see how those issues were ultimately resolved: while unions were allowed to exist, and government has put in place numerous agencies regulating business activity, those provisions are weak at best, and easily used by business to its own advantage.
Market conservatives extol the virtues of business, while denying that businesses have any contractual obligations to their workers or their communities beyond the paychecks that they issue. If a businessman can squeeze out more profit by skimping on wages or workplace safety (within the limits of the law), there is in the market capitalist way of thinking no real objection to doing so. If a company wants to lay-off workers or close a plant, that decision can be made undemocratically, behind closed doors, with the corporate bottom line being the primary consideration. As the Nobel Prize-winning economist Milton Friedman (1912-2006) bluntly put it, “The social responsibility of business is to increase its profits.”(2) That may sound harsh, but conservatives argue that this self-interest pays important social dividends. Prosperity underpins the values that make a society and its people strong—opportunity, philanthropy, education, innovation, competition, and ultimately the resources needed to combat social ills. Market conservatives greatly favor this approach to one that saddles businesses with excessive taxation and regulation, and stifles society with ill-conceived social programs.
The vision touted strongly by market conservatives (but endorsed by most other conservatives as well) is one of an ownership society, in which the private sector is empowered and the public sector restricted. This is obviously a very old idea, but the term itself is relatively new. President George W. Bush found the idea especially appealing. The Cato Institute website has a nice definition of the ownership society, so we’ll repeat that here: “An ownership society values responsibility, liberty, and property. Individuals are empowered by freeing them from dependence on government handouts and making them owners instead, in control of their own lives and destinies. In the ownership society, patients control their own health care, parents control their own children's education, and workers control their retirement savings.”(3)
The most prominent market conservative politicians were Margaret Thatcher (b. 1925) and Ronald Reagan (1911-2004). Thatcher was the British Prime Minister from 1979 to 1990, while Reagan was U. S. President from 1981 to 1989. Both took steps to curb the power of labor unions, loosen regulations on business, and privatize government-owned businesses or subcontract government services to private businesses. Perhaps owing to the nature of the British parliamentary system, Thatcher was considerably more successful on all fronts. She sold off government-owned businesses such as British Airways and British Petroleum, sold council housing [public housing] to working class residents, decreased regulation on business, increased the VAT tax [a sales tax], and abolished the Greater London Council, led by leftist politicians with whom she disagreed. Her brand of conservatism was known as Thatcherism or the Thatcher Revolution.
Market conservatives of both parties have been particularly successful in enshrining their principles in international trade agreements. For example, the North American Free Trade Agreement--supported by market-oriented Democrats and Republicans who received considerable campaign finance money from corporations--lowered trade and investment restrictions between the United States, Canada, and Mexico. The resulting disruptions created huge incentives for poor Mexicans to migrate legally or illegally to seek opportunities in the United States while at the same time put downward pressure on the wages of poor and lower middle-class Americans.(4)
Market conservatives became truly ascendant in President Donald Trump's administration. His tax proposals represented a huge windfall for big businesses, rich individuals, and Wall Street financiers. His efforts to deconstruct the Affordable Care Act threatened to destabilize health insurance markets and increase the amount that sick people would pay for insurance, while cutting premiums for healthier people. He acted to reduce regulations on businesses generally, and specifically cut regulations designed to protect the environment and forestall climate change.
(1) Here’s where is gets really confusing. Market conservatives, because they support the kind of limited government regulation of the economy once championed by classical liberals, are often called neo-liberals. So when you hear phrases like “neo-liberal policies,” you’ll want to remind yourself that they are really references to market conservatism and libertarianism.
(2) Milton Friedman, “The Social Responsibility of Business is to Increase its Profits,” The New York Times Magazine. September 13, 1970. Note that Friedman fits more comfortably in the libertarian paradigm, but is often cited approvingly by market conservatives.
(3) http://www.cato.org/special/ownership_society/
(4) Jeff Faux, Nafta's Impact on U.S. Workers. Economic Policy Institute. December 9, 2013. http://www.epi.org/blog/naftas-impact-workers/