The Wrecking Crew: How Conservatives Rule, by Thomas Frank, New York: Metropolitan Books, 353 pages, $25.
One of the screwier sentiments circulating in libertarian circles holds that liberals should love George W. Bush. After all, he spends lots of money! It’s an analysis for people who’d rather joust lazily with strawmen than engage their opponents’ ideas. Real-life liberals don’t want the government to spend money willy-nilly; they want it to spend money on specific things. And the items they have in mind are not, by and large, the items chosen by Bush.
In The Wrecking Crew, a brief and breezy polemic by one of the left’s rising stars, Thomas Frank offers a similar argument about libertarianism. Under Bush, Frank points out, federal spending has exploded and corruption has oozed from official Washington. Obviously, we’re watching the free market in action, because businesses benefit! Really.
Frank, formerly the editor of the radical journal The Baffler and currently the token lefty on the Wall Street Journal op-ed page, doesn’t just fail to distinguish between crony capitalism and free markets. He actively refuses to recognize the difference. “Laissez-faire,” he admits, “has never described political reality all that well, since conservative governments have intervened in the economy with some regularity.” Yet that doesn’t prevent him from declaring a little later that “what makes a place a free-market paradise is not the absence of government; it is the capture of government by business interests.” If you relied on Frank for your information, you would never dream that the idea of laissez faire initially emerged not as a defense against left-wing regulators, who were scarce in the 18th century, but as a critique of subsidies, government-imposed monopolies, and what Adam Smith called the “mean and malignant expedients of the mercantile system.” In other words, the “free-market paradise” was supposed to be an alternative to “the capture of government by business interests.”
Frank knows that libertarians believe the state is the engine by which some segments of society loot the others. “Governments are instituted among men in order to help one group in society exploit another,” he writes, summarizing Albert Jay Nock’s Our Enemy, the State. They “are then captured by some other class, which sets about exploiting some other group, and so on.” For the free market set, says Frank, “there is no conceivable instance in which the state might be reformed or function morally: only oppression succeeding oppression all the way to the far horizon.”
Frank won’t acknowledge the implicit alternative: a society with much less government, where competition replaces privilege and cooperation replaces coercion. Instead he treats the Nockian perspective as a piece of psychological projection, less a description of state power as it is ordinarily exerted than a forecast of the Bush era. Free marketeers believe the state is essentially a tool for looting the treasury; therefore, Frank concludes, when free marketeers are in power, they loot.
In the waning months of an administration marked by enormous interventions on behalf of business interests, there has been an understandable surge of interest in both libertarianism, the ideal of a government that doesn’t intervene on behalf of any particular player, and social democracy, the ideal of a government that manages to help the masses without being captured by corporations. The best way to understand The Wrecking Crew is as propaganda for one of those alternatives against the other.
To that end, the book does everything it can to conflate libertarians not just with the Bush regime but with conservatives in general, regarding the two groups’ on-again, off-again alliance since the 1930s as a more permanent and deep-seated connection. “The conservative coalition has changed over the years,” Frank informs us, but “a commitment to the ideal of laissez-faire” has “remained steadfast.” When he turns his attention to the present day, he paints the Republican regime of cronyism and militarism, and its ugly results from Baghdad to New Orleans, as a specifically libertarian dystopia.
For evidence, Frank expends much breath describing the ways work once done at taxpayers’ expense by the federal bureaucracy itself is now done at taxpayers’ expense by federal contractors. There is a glimmer of an indictment of the pro-market movement here: Some libertarian economists have argued that contracting out exclusive services to private providers will be more efficient than doing the work in-house, and that this could serve as a stepping stone toward moving those functions to the free market. I don’t feel compelled to defend that view, since I have limited sympathy for it myself; still, I should note that the free market case for outsourcing has always stressed the need for competitive bidding, transparency, and other elements obviously absent from the sweetheart deals and no-bid contracts that attract Frank’s attention. And much of the spending Frank describes doesn’t even fall under the category of contracting: Simple earmarks earn a lot of his anti-market ire, as if Milton Friedman dreamed of a world where more pork went to businesses than to nonprofits.
Frank’s argument about government regulation is a bit more sophisticated. It may appear, he declares, that Republicans have done little to roll back the regulatory state, but looks can be deceiving. When the plutocrats despise a department but the masses support it, he contends, the “standard method” is to put the bureau “under the control of someone who is either spectacularly ill-suited for the job or vocally opposed to that department’s mission,” a strategy that “avoids the tactlessness of repealing or abolishing agencies while achieving the same results.” His examples include Howard Phillips, appointed chief of the Office of Economic Opportunity under Richard Nixon in order to wipe out the agency’s subsidies to the left; and James Watt, Ronald Reagan’s first secretary of the interior, who was famously friendly to ranchers, drillers, miners, and other businesspeople who wanted access to public land.
Frank recognizes that it isn’t exactly unprecedented for an industry to capture the agency that is supposed to regulate it. He quotes the railroad lawyer Richard Olney, attorney general in the second Grover Cleveland administration, explaining why he didn’t want to destroy the new Interstate Commerce Commission, an agency ostensibly designed to stop rate discrimination: “It satisfies the popular clamor for government supervision of the railroads, at the same time that that supervision is almost entirely nominal.” Frank does not discuss the other reason many railroad companies supported the ICC, and indeed lobbied to create it. As the historian Gabriel Kolko pointed out in his 1965 study Railroads and Regulation, freight rates in the late 19th century kept dropping, despite the industry’s attempts to stabilize them via voluntary agreements; when those efforts failed, the companies decided to use regulations to “bring under control those railroads within their own ranks that refused to conform.” That meant strengthening the commission, by giving it the power to set standard rates.
In other words, pro-business officials weren’t deregulating the railroads through inaction; they were regulating the rails in a way designed to assist the industry’s dominant companies. This was no aberration. When trucks started carrying freight, the same agency imposed a host of rules whose chief effect was to impose entry barriers against upstarts. The Civil Aeronautics Board was essentially an open conspiracy to eliminate competition in the airline business. There was a revolving door in the late 1920s and early ’30s between broadcast networks and the Federal Radio Commission, which dutifully reduced the power levels and transmission hours of smaller stations. When the New Deal regime replaced the agency with the broader Federal Communications Commission, that state-corporate partnership remained in place.
The result of such cozy arrangements is not just corruption but stagnation. In 1973—at a time when, by Frank’s account, “the country had embarked on a massive regulatory offensive, and reversing it would require conservative mobilization on an equally massive scale”—one observer wrote that “it is difficult to provide evidence of what innovations would have occurred without regulation; yet it is clear that technological lethargy logically adheres in the very structure of regulation.”
Was that cynical critic some corporate apologist slandering a sensible system? Nope: It was Mark Green, now president of the Air America radio network and a serial left-wing candidate for public office. He made that observation in The Monopoly Makers, a book assembled by Ralph Nader’s Study Group. By the 1970s, while the business-friendly Nixon administration was getting behind the “regulatory offensive” that Frank praises, the Naderites had become so disenchanted with the status quo that many of them were willing to call for substantial deregulation. Within a few years, Nader and that notorious Nockian, Sen. Ted Kennedy (D-Mass.), would push airline deregulation through Congress, at which point it was signed into law by the John Galt of presidents, Jimmy Carter. This incident is absent from Frank’s description of the “conservative mobilization” against regulation.
Instead he writes about episodes such as Watt’s tenure at Interior, an alleged example of deregulation being enacted in practice rather than statute. But Frank misses the most telling detail of Watt’s reign: The secretary was cool to the idea of moving public assets to the private sector. Indeed, he helped nudge Reagan away from a proposal to sell even a small fraction of federal lands. In this, he followed the preferences of the industries that used that terrain. They preferred the below-market rates they negotiated with regulators to the full costs they’d have to pay in an open market.