February 6, 2005

GALBRAITH + FRIEDMAN = W:

The pragmatist and the utopian: John Kenneth Galbraith and Milton Friedman defined an epic clash of ideas that continues to shape the debate over America's economic future. (Richard Parker, February 6, 2005, Boston Globe)

REPUBLICANS NOWADAYS count themselves the party of ideas. ''Ideas matter,'' Ronald Reagan proclaimed a quarter-century ago--words that have since become a GOP shibboleth. But with his recent Inaugural and State of the Union addresses, President Bush reminded us that today's conservatives don't love just any kind of ideas, even conservative ones. Big ideas are better than small, and bold ideas--ideas meant to profoundly reshape world history in the name of high principle--are always preferable to cautious ones. Abandoning a once fiercely defended reputation for caution in the face of change, it seems today's proudly swaggering conservatives have adopted the revolutionary role that for 200 years they existed to defeat.

In the mid-1980s, Harvard economist John Kenneth Galbraith, that old lion of liberalism, began warning of the dangers for the Republic in this reversal of roles. The author of more than three dozen books--among them ''American Capitalism'' (1952), ''The Affluent Society'' (1958), and ''The New Industrial State'' (1967)--Galbraith could fairly claim to know something about ''big ideas,'' and not just as an ivory-towered intellectual. He was America's ''price czar'' in World War II, helped engineer the reconstruction of Germany and Japan under Truman, was both an ambassador and close confidant of JFK, and early on helped design Lyndon Johnson's War on Poverty (before breaking with LBJ over the Vietnam War). And as a leading figure in the Democratic Party from the New Deal forward, he had played senior roles in half a dozen presidential campaigns.

With the advent of this new breed of conservatism, Galbraith said, liberals and conservatives no longer represented merely two differing views along a more or less common political spectrum. Conservatives had always attacked the alleged ''utopianism'' of their opponents, but as this generation consolidated power, he predicted early in the Reagan years, conservatism itself would grow more and more dangerously utopian. Under such circumstances liberalism would need to serve as the defender of America's true political genius: its capacity for what Galbraith called ''reluctant pragmatism.''

To Galbraith, these new conservatives--in their fervent assault on ''big government''--willfully ignored the fact that government's dramatic growth over the past century (from an average of 10 percent of GDP in 1900 to roughly 35 percent today) was not the result of liberal utopianism but a pragmatic accommodation to the demands of voters. Publicly financed retirement security and medical care, free public education, progressive taxation, unemployment insurance, the minimum wage, basic labor rules, food and drug regulation, environmental protection--as well as government's postwar Keynesian role (in which Galbraith had long and famously been involved) steering the economy past the devastating recessionary or inflationary swings of the past--were welcomed by a majority of Americans as the means to moderate the harsh and uncertain consequences of an unregulated market capitalism and to hold at bay far more radical alternatives on both the right and left. Even when Republicans controlled the White House, Galbraith noted, neither Eisenhower nor Nixon had sought to overturn the pragmatic big-government accomplishments of their predecessors--and in several instances added to them.

But with the arrival of Ronald Reagan, a new GOP had had enough of such pragmatism. To them big government, and their party's long-standing minority status, could only be explained in Manichaean terms, by the destructive hegemony of an elite cabal of radical academics, ambitious politicians and bureaucrats, and cultural cosmopolitans. And it was that elite's hunger for political control and cultural domination that now justified the new GOP's role in a war of ideas, from which the conservatives firmly believed there could emerge only one winner.

Credit for this remarkable shift in the dominant conservative worldview belongs not to Reagan, however, but to Galbraith's old nemesis, University of Chicago economist Milton Friedman. And as the story of Friedman's rise and his long-running rivalry with Galbraith shows, the clash of ideas represented by these two postwar American titans is still shaping debate over the nation's economic future.

ONE CAN DATE THE REMARKABLE rise of Friedman's influence to his role as chief economic advisor to Barry Goldwater's 1964 presidential campaign. For that race--to which today's conservatives proudly trace their roots--Friedman helped craft a policy agenda that was far more sweeping than any GOP candidate had ever endorsed or imagined before. Friedman proposed not just the abolition of government regulation of industries such as airlines, energy, and telephones. He also wanted to do away with the Federal Reserve, the SEC, farm price supports, import duties, and fixed exchange rates--not to mention national parks, progressive taxation, and Social Security.


The genius of the Third Way--squandered successively by George H. W. Bush, Bill Clinton, and Newt Gingrich, but seized now by George W. Bush--is to provide the pragmatic public welfare state of Galbraith via the private free market mechanisms of Friedman.

Posted by Orrin Judd at February 6, 2005 9:50 AM
Comments

Okay, this has to be a troll. I think OJ just posted this to see if anyone's paying attention. I am, and am happy to bite at the bait. How, OJ, do we coherently combine Friedman and Galbraith?

Posted by: Tom at February 6, 2005 8:44 PM

Tom:

What are personal Social Security accounts but a marriage of the Welfare State and the Market?

Posted by: oj at February 6, 2005 8:53 PM

"What are personal Social Security accounts but a marriage of the Welfare State and the Market?"

It's the method (private accts that is) being used by conservatives to "undermine" Social Security. Same could be said about the small voucher program conservatives have granted poor people. Ultimately it will grow and destroy "public" schools in favor of private schools.

A better analogy than the marriage of welfare state and the market, would be the so called "gay marriage" undermining of all marriage.

Posted by: h-man at February 7, 2005 4:09 AM

OJ: This still seems weird to me, but I see your point.

Posted by: Tom at February 7, 2005 8:52 AM

Tom:

It is weird, that's why it took so long for a very few particularly adept politicians to grasp it--you'll note that few of their followers do.

Posted by: oj at February 7, 2005 4:37 PM
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