History

What's the Matter With Libertarians?

Thomas Frank blames the freedom movement for Jack Abramoff and George W. Bush

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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.

The alleged regulatory rollback of today tends to follow the same pattern. The agencies have sometimes, as Frank writes, pulled back from practices that offend the dominant players. The Department of Agriculture, for example, watered down its meat inspection processes in the Bush and Clinton eras. But the department hasn't been shy about wielding its hammer against industry outsiders. When the owner of Montana Quality Foods, an independent meat packer, informed the government that he had received contaminated beef from the heavily subsidized giant ConAgra, the food cops jumped into action and investigated…the whistleblower. And the department actually prohibited a small company in Kansas, Creekstone Farms Premium Beef, from testing its own cattle for mad cow disease. After all, if Creekstone advertised the fact that its beef was 100 percent safe, the bigger packers would have to either lose market share or respond to the competition by doing all that expensive inspecting themselves.

Such favoritism resembles the way the mid-20th-century FCC treated the Austin broadcasting operations owned by Lyndon Johnson's wife. If a rule stood in the Johnsons' way, the commissioners found a way to waive it. But if an upstart wanted to compete with the couple's local monopoly, the government came up with an excuse to block it.

The FCC, incidentally, has arguably been more interventionist under Republican chief Kevin Martin than it was under the last Democrat to fill the position, William Kennard. More broadly, according to an August report from the Weidenbaum Center at Washington University in St. Louis and the Mercatus Center at George Mason University, regulatory spending has gone up more than $20 billion in constant dollars since Bush became president. Regulatory staffing has decreased in some areas, including labor and the environment, but only slightly—and it has increased by more than 80,000 employees overall. This is not a regulatory apparatus that has been hollowed out and rendered ineffective. It is a government pursuing the same general industry-boosting approach it took from the '30s through the '70s. If Frank wants to imagine that we're in an era of laissez faire now, he ought to extend his fantasy back to the period he prefers.

But he won't. Frank, who first came to prominence as a caustic cultural critic, now writes with a gosh-wow earnestness about the Roosevelt-Truman-Johnson era; he spends more time describing a gooey civic text from 1945 called We Are the Government than he does exploring the government's actual activities in the '40s. Frank has a long history of disdaining any American figures, from Barry Goldwater to the Beats, who challenged the mid-century liberal consensus. In this book he extends his animus even to the public's post-Watergate skepticism, pointing out that it "permanently poisoned public attitudes toward government and stirred up a wave that swept Ronald Reagan into office six years later—and made antigovernment cynicism the default American political sentiment." This is the domestic equivalent of a neocon fretting about the Vietnam Syndrome.

Frank's narrative reaches a crescendo when he describes the Northern Marianas, a U.S. commonwealth in the Pacific where taxes on capital were low, minimum wage laws were weak, construction permits were granted freely, and, in a sharp break from all that deregulation, an army of foreign guest workers were legally prohibited from changing jobs without official permission and thus were largely helpless in the face of abuse. When the Interior Department started making noises about overruling some of those policies, the island government hired the right-wing fixer Jack Abramoff to make its case to the nation. Abramoff dutifully began to boast about the benefits the territory had accrued with its lower taxes and lighter business regulations. Those advantages were real, but they were only part of the story. As long as those workers were legally chained to their employers, exploitation was inevitable.

You might conclude from this that labor mobility in the Marianas needed to be deregulated. Frank concludes that the free market is a fraud. Specifically, he says: "What went on in the [Northern Marianas] could not have happened without the active involvement of the state. Yes, this was a free-market paradise, as the libertarians assured the world on dozens of occasions, but a free-market system never simply means do what thou wilt."

So is there any merit at all to this book? Actually, there is. Frank devotes a lot of space to the underside of the right in the Reagan years, when Abramoff and Ralph Reed were College Republicans instead of corrupt appendages to the political class. This is the one section where he makes a real contribution to our understanding of the last three decades, sifting through ancient direct-mail packages and low-circulation right-wing journals to paint a vivid picture of a milieu that hasn't received much attention from historians.

The account that emerges is sometimes superficial, but Frank has noticed something that many mainstream pundits miss: the flat-out weirdness of the 1980s right. Modern Republicans often chide the liberals of that decade for not realizing the Soviet Union was on the brink of collapse, but the conservatives could be even further off base. Just a few years before the Communist system collapsed under its own weight, paranoid cold warriors imagined Moscow as a virtually all-powerful giant, its tentacles pulling stateside liberals' strings while our weak-willed society teetered toward surrender.

Meanwhile, Rambo-era conservatives cast themselves as a band of guerrilla heroes, openly drawing on their Marxist enemies for inspiration. Frank actually understates the levels of irony here. He describes the right's love affair with a series of morally dubious anticommunist rebellions in the Third World, with the Angolan thug Jonas Savimbi receiving the veneration that a certain sort of leftist gives to Che Guevara. "Angola had been one of the very last countries in Africa to be freed from colonial domination," Frank explains, "but unlike so many other 'national liberators' over the preceding decades, Savimbi was not a Communist." Somehow Frank neglects to mention the funniest part of the tale: Savimbi was a communist, or at least had played that role when his biggest benefactors were based in Beijing rather than the Heritage Foundation. In Cambodia, similarly, the right exalted the nationalist opponents of the Vietnamese occupation while tiptoeing around the fact that they were effectively fronts for Pol Pot, the bloodthirsty former dictator who made Mao look like a mild-mannered McGovern volunteer. The same people who accused liberals of being naive communist dupes were themselves…naive communist dupes.

Against this background, the young Abramoff and others drew freely on libertarian language about the virtues of the market and the evils of the state, even as they prepared for careers of using the state to feather their nests. This phenomenon is genuinely disturbing, and if Frank had been willing to take his foes' ideas seriously he could have expanded his discussion of it into a potent critique.

Frank is wrong to blame the libertarian attitude toward government for the crony capitalism of the Bush years. But it is true that many conservatives used the libertarians' anti-statist rhetoric as they acquired power, then turned around and behaved like stock villains from the free market imagination. Worse yet, some people in the libertarian movement were their willing partners, if not in the looting spree then in the selective outrage that helped those unprincipled opportunists take over Washington.

Someone could write an interesting book about that. But not Frank. For one thing, he'd have to contrast such corruption with the behavior of all the free market organizations that refused to fold their principles when a funder's interests were at stake. More important, he'd have to acknowledge that there is such a thing as a libertarian principle in the first place, that it's possible to take a stand for economic liberty and anger a wealthy corporate donor in the process.

If Frank embraced that sort of intellectual rigor, his thesis would have unraveled. He would have had to treat the people who believe in unfettered markets as more than just a front group for the regime that brought us billion-dollar bailouts and a trillion-dollar war. And that would mean acknowledging that Frank's political tribe is not the only conceivable alternative to the Bush Republicans.

Managing Editor Jesse Walker is the author of Rebels on the Air: An Alternative History of American Radio (NYU Press).