As I sit down to write about Conservatives and their views on a “free market” economy, I feel obligated to preface this essay with some thoughts. Economics is incredibly complicated. It is so complicated and convoluted that most of us will never really be able to wrap our heads around it. The division between Republicans and Democrats boils down to this: Republicans believe that if we just let people do what they will, invisible market forces will ensure that everyone will benefit and there will be prosperity; Democrats believe that without government regulation and oversight wealth becomes concentrated at the top and workers will struggle. Although simplistic, that is essentially the divide. From the RNC – “Government cannot create prosperity, though government can limit or destroy it.” (1) “Democrats believe we can spur more sustainable economic growth, which will create good-paying jobs and raise wages.” (2)
Before going further, let’s begin by defining our terms – what is the “free market”?
One definition is “a system in which the prices for goods and services are determined by the open market and consumers, in which the laws and forces of supply and demand are free from any intervention by a government, price-setting monopoly, or other authority” (3).
Although not the only definition, I posit that the above is generally representative of the GOP’s position on free markets. One can argue the extent to which Liberal views on government intervention in the economy are effective, but it is easy to demonstrate that the conservative view on the economy is simply false.
For some historical perspective, federal regulation of businesses officially began in 1887, with the passing of the Interstate Commerce Act (4). In the 1870’s States had some regulatory controls in place mostly with regards to the railroad industry, and prior to that there were basically no government controls to industry.
Some Conservatives hold the view that we need to go back to the economic times enjoyed by the Founders where “…even slaves, who were sometimes paid a tiny sum for their forced labor in addition to shelter and food, technically earned more than the poorest Europeans” (5). Which I think is an endorsement for a slave economy. The idea that all Americans are able to participate equally in the economy and live the “American Dream” is false. (Reference my previous article The “Alt” Reality of American Conservatism Part 1 “Personal Responsibility”).
Here is some truth – corporations do not exist for the benefit of the worker. Corporations exist to increase revenue for their stock holdes and they do so in a legally protected fashion giving them a lot of room for malfeasance without personal liability by the owners (6). Unfettered capitalism allows corporations to consolidate to reduce competition (crony capitalism) (7), violate workers rights, and remove or limit employee benefits. Coupled with this anti-government rhetoric is a strong Conservative anti-union message. Unions exist to empower workers to balance employee rights with corporate profits. Weakening or removing unions allows companies access to higher profits (8).
The false narrative Conservatives use about the economy dovetails nicely with their views on climate change. Because they don’t believe in man-made impacts to the environment, government regulations that prevent corporations from polluting don’t make sense. They become another example of how government stifles the creation of wealth. [There is no mention of the climate in the RNC’s platform and the only mention of the environment is that government regulations ‘make it harder and more costly for Americans to rent, buy, or sell homes.’ (9)]
In summary, Conservative views are invested in policies that are anti-worker and anti-prosperity unless you are in the top 1% of income brackets. Conservative states are poorer and less economically vibrant that Liberal states (10). Conservatives buy into a narrative that economically disenfranchises poor people, and they look to the past to find simple answers to a complex world. They do this often without the cultural context to understand that racial and gender inequalities existed in the past and continue to impact our economy today.
The idea that there is no need for regulation is demonstrably incorrect, and a more sane approach is to debate a level of government regulation that allows everyone to participate in the economy and benefit from a higher standard of living.
Daniel Cashman, EAMP, MS (AOM), NCCAOM Dipl. Acupuncture