The Tale of Two Economies

There is one key decision to be made in the upcoming presidential election—everything else is just a sideshow.

COLORADO SPRINGS, July 29, 2012 — Daniel Henninger wrote an opinion piece in the July 25th Wall Street Journal that perfectly captures the essence of what this election is about. It ought to be required reading for all voters.

In broad strokes and without taking sides, he describes the economic choice that will be made in the political election this fall. It is a good review of the facts in an unbiased way, the sort of thing we should be able to expect from journalists, but almost never get these days.

It is even more remarkable for being on the editorial page.

Called “America’s Two Economies,” it first briefly describes the choice: private or public. The two economies are the public (government) economy and the private (market) economy. After November, one will dominate.

As I said, Henninger doesn’t take sides. I will.

The Democrats clearly want the government economy to dominate. They favor central planning and government action to right all perceived wrongs in society. This is a form of statism. To many, Obama and his party are socialists. This is true when the government actually owns the economy, as when industries are “nationalized.” When the government merely controls what they do, as in the case of the Detroit auto companies and, increasingly, health care, it is a form of fascism or cronyism. Political scientists like me often think it important to describe and classify the differences but the bottom line is that the government is in the driver’s seat.

Clearly, this isn’t your grandfather’s Democratic Party. It has been taken over by the New Party, of which Barack Obama was a card-carrying member.

This government control of the economy has never worked. Friedrich Hayek explained why in the 1940s in The Road to Serfdom. The Soviet Empire collapsed on that road in the early 1990s and Europe is close today. Yet with an intensity approaching that of a secular religion, the current crop of Democrats want to march us down that same path toward a future that never was and never will be.

Henninger says that “Until recently and except for the Reagan years, the Republican Party has largely been a confused onlooker…” unsure what to do. Until 2010, then, the Democratic march to socialism was not effectively opposed. There were conservatives, to be sure, but they were effectively ignored by a party whose major goal was to win elections.

In 2009, in response to the lurch to the left, the modern Tea Party movement was born. With numbers and an intensity that could not be ignored, economic and social conservatives and libertarians rose up and provided the effective opposition that had been missing.

Herein lies the visceral hate that the left has for the Tea Party Movement and what I would call the conservative revival. Just like the Bond movie villain thwarted at the last minute in his quest for World Domination by 007, so the left saw their 2008 victory blocked at the very gates of the Total Victory. The “40-year coalition” touted by James Carville evaporated overnight.

They were blocked because there is an alternate vision for America. A vision in which the other economy, the private one, dominates. This is a vision which has been the driving force behind American growth for more than two centuries.

It is also the vision of the Founding generation. It is no accident, I think, that The Wealth of Nations was published in 1776. Free market capitalism thrives in an environment where individual rights trump government mandates. In every country before 1776 the reverse was always the case. In most, it still is the case.

There is no Third Way.

Progressives since the 1930s have claimed to be pragmatists—to only do “what works.” Yet the history of the 20th century and of the 21st so far, shows that there is no other good and stable option. Socialism and fascism—once not pejoratives—tend inevitably toward more and more state control as the central planners seek to correct bad outcomes with yet more central planning. That thinking takes us inevitably down the road to serfdom—which is simply another term for what the Founders understood as economic slavery.

There are but two poles: freedom and slavery, liberty and tyranny. Self-described Independents are those who either have not made up their minds or don’t understand the stakes. As Henninger points out, this election is a clear referendum on the direction this country will take going forward. Fittingly, we have but two candidates and the choice is a stark one. That’s why we say this is the most important election since 1860 when we then had a stark choice between slavery and freedom.

The only difference is that then it was about the freedom of African chattel slaves brought to this country involuntarily, and they didn’t have a vote in the decision. This time it’s about economic slavery for all of us, and we all have a vote.

How will you vote? I will vote for liberty.


Read Daniel Henniger at WSJ

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Al Maurer

Al Maurer is a political scientist and founder of The Voice of Liberty. He writes on topics of limited government and individual rights.

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