conservatives Archives — Laissez FaireLaissez Faire

From the essay “Conservatism: An Obituary,” in Ayn Rand’s book Capitalism: The Unknown Ideal:

The “neo-conservatives” are now trying to tell us that America was the product of “faith in revealed truths” and of uncritical respect for the traditions of the past (!).

It is certainly irrational to use the “new” as a standard of value, to believe that an idea or a policy is good merely because it is new. But it is much more preposterously irrational to use the “old” as a standard of value, to claim that an idea or a policy is good merely because it is ancient. The “liberals” are constantly asserting that they represent the future, that they are “new,” “progressive,” “forward-looking,” etc.—and they denounce the “conservatives” as old-fashioned representatives of a dead past. The “conservatives” concede it, and thus help the “liberals” to propagate one of today’s most grotesque inversions: collectivism, the ancient, frozen, status society, is offered to us in the name of progress—while capitalism, the only free, dynamic, creative society ever devised, is defended in the name of stagnation.

The plea to preserve “tradition” as such, can appeal only to those who have given up or to those who never intended to achieve anything in life. It is a plea that appeals to the worst elements in men and rejects the best: it appeals to fear, sloth, cowardice, conformity, self-doubt—and rejects creativeness, originality, courage, independence, self-reliance. It is an outrageous plea to address to human beings anywhere, but particularly outrageous here, in America, the country based on the principle that man must stand on his own feet, live by his own judgment, and move constantly forward as a productive, creative innovator.

The argument that we must respect “tradition” as such, respect it merely because it is a “tradition,” means that we must accept the values other men have chosen, merely because other men have chosen them—with the necessary implication of: who are we to change them? The affront to a man’s self-esteem, in such an argument, and the profound contempt for man’s nature are obvious.

In our book Free Market Revolution, Yaron and I spend an entire chapter detailing the way in which Americans do not have a free market in health care.

Americans are understandably worried about the rising cost and deteriorating quality of health care. And they’ve been told that the explanation of this health care crisis is our free market in medicine. As Lyndon B. Johnson’s deputy assistant secretary for health put it in 2004, “Today’s dysfunctional health care system is a palpable example of the lessons that come from our national obsession with markets at all costs.”

But markets don’t lead to mounting bureaucracy and skyrocketing prices—they lead to ever-improving customer satisfaction and steadily declining prices. It’s no accident that we don’t have a computer crisis, or a hair salon crisis, or a veterinary crisis. Nor is it an accident that we did have a housing and financial crisis. Along with housing and finance, medicine is one of the most regulated industries in the United States, and those regulations take center stage in precipitating the health care crisis.

So it was with high hopes that I started reading a recent piece by conservative health care experts Douglas Holtz-Eakin and Avik Roy, “The Future of Free-Market Health Care.” And they started out well enough:

Over nearly a century, progressives have pressed for a national, single-payer healthcare system. When it comes to health reform, what have conservatives stood for?

For far too long, conservatives have failed to coalesce around a long-term vision of what a free-market healthcare system should look like. Republican attention to healthcare, in turn, has only arisen sporadically, in response to Democratic initiatives.

Obamacare is the logical byproduct of this conservative policy neglect.

All of that is true. What is badly needed is a vision of free-market health care—and a powerful intellectual defense of that vision. Sadly, what Holtz-Eakin and Roy offer is nothing of the sort.

After praising George W. Bush’s massive prescription drug entitlement as a “market-oriented” reform, the authors write, “While most Americans view their healthcare system as ‘free-market,’ Switzerland actually has the most market-oriented healthcare system in the West.”

Switzerland? A free market? Really? Listen to their description of the Swiss system:

Swiss government entities spent about 3.5 percent of gross domestic product on healthcare in 2010, compared to 8.5 percent in the United States. That’s a difference of more than $5 trillion over 10 years: real money, especially relative to our $16 trillion debt.

There is no “public option” in Switzerland. Instead, citizens qualify for means-tested, sliding-scale subsidies and choose among a variety of regulated, private-sector insurance products.

Whatever the virtues of the Swiss system, here we have a giant government entitlement program with insurance regulation. Does that sound like a “free market”?

To be fair, the authors do not outright call the Swiss system a “free market.” But they do offer the Swiss system as their model for what “a long-term vision of what a free-market healthcare system should look like.”

Problem is, their vision of a free-market isn’t free. Less controlled? Maybe. But how inspiring is a crusade for “a less controlled healthcare system”?

In the latest installment of Leonard Peikoff’s podcast, Yaron tackles a bunch of interesting subjects:

• The fiscal cliff
• Do doctors protect individual rights?
• Why a collectivist like Jimmy Carter would deregulate
• Does America need a third political party?
• Should there be a single world government?

You can listen here.

George Gilder thinks so. He is one of the leading conservative theorists on the subject of the morality of capitalism, and in a recent interview distinguished his views from Ayn Rand’s.

Your thesis in your famous book “Wealth and Poverty” is that investors begin with altruism. How does this differ from the Randian school of thought, and what was their reaction to it?

Ayn Rand devoted her last speech to a critique of “Wealth and Poverty.” I liked Ayn Rand, and I thought she was a tremendous figure. Her fiction was wonderful and imaginative. I think her novels show quite a full range of human behavior. She just didn’t understand my point, particularly. Entrepreneurs have to collaborate and respond. They can’t be chiefly concerned with their own narrow interests and succeed as capitalists. They have to have an imaginative response to the needs of others. . . .

A minor point of clarification. The speech Gilder is referring to was not Rand’s last speech, but “The Age of Mediocrity,” her last Ford Hall Forum appearance. And it wasn’t devoted to critiquing Gilder’s book—Rand mentioned the book as an aside, dismissively, as a clear indication that the Reagan conservatives were intellectually hopeless.

But, far more importantly, the failure to understand in this case is Gilder’s. He’s arguing that because entrepreneurs create products and services that other people want, that makes them altruists—examples of self-sacrifice. If they were “chiefly concerned with their own narrow interests,” they would—what? Presumably just make stuff that they and no one else would want?

It’s a rather bizarre caricature of selfishness. As Yaron and I point out in Free Market Revolution: How Ayn Rand’s Ideas Can End Big Government:

Some commentators have argued that because the division of labor involves producing things that others want rather than the goods you yourself are going to consume, it is a form of altruism. But to anyone who doesn’t have a vested interest in trying to disguise or downplay capitalism’s selfish nature, that claim is simply not credible. Although you produce goods to trade with others, your ultimate goal is to benefit yourself (just as the buyer’s goal is to benefit himself). You pick the career that will bring you the most joy and demand payment for your work. The division of labor would be altruistic only if it required making shoes or sandwiches to give away to others.

That last point is key. Gilder—and he is far from alone here—blends two radically different things: self-interested concern with the needs of others and sacrificing for the needs of others. A businessman thinks a lot about the needs of his customers, but he doesn’t sacrifice himself to fill those needs. He trades. Gilder is putting into the same category selling a car and handing it over to some stranger because the stranger “needs” it more. The latter is altruism—the former is an example of pursuing your self-interest.

Yesterday was the 40th anniversary of Roe v. Wade. Today, the Huffington Post published an article by Ayn Rand’s heir, Leonard Peikoff, in which he argues that, to quote the title, “Abortion Rights Are Pro-Life.”

Although we generally focus on economic freedom on this blog, it’s important to remember that freedom applies to much more than economics. It includes intellectual freedom, political freedom, and individual freedom. If a woman does not have the right to control what happens to her body, then by what logic do any of us have a right to decide what happens to our property?

So I encourage everyone, especially our conservative readers, to consider Peikoff’s argument. (You can find some of Rand’s own statements on abortion here and here.)