The Market Economy: A Conservative Defense

There are a lot of misconceptions about conservatism; one of the biggest concerns our belief in a free economy. Those on the left say we’re motivated by greed, a desire to protect a privileged socioeconomic position (if we’re members of the economic elite), or a false consciousness that blinds us to our oppression (if we’re not members of the aforementioned elite). Always, they say, our motives are suspect.

Maybe that’s what motivates some people to support the market economy; I suspect that the majority of us would wish to disagree with those charges, however. We have good reasons for rejecting economic collectivism and the tendencies in our own society in that direction. And foremost among them, I believe, is that the market economy helps to ensure that we live in a just society.

Conservatism has historically been anxious to avoid the concentration of power (i.e., the ability to have your way, despite opposition). History shows what happens when political power is concentrated in the hands of a single individual or group. That’s how we get things like the Holocaust and the Stalinist purges of the 1930’s.

The concentration of economic power is no less dangerous. After all, they say that economics is ultimately concerned with the management and use of scarce resources. When you give one person or party economic power over another, you’re giving the former the power to control the latter (by controlling his access to and permission to use those scarce resources), and thus to deprive him of liberty and even, off at the extreme end, life itself. It makes no difference whether that economic power is concentrated in the hands of the one, few, or the many, and it makes no difference whether that power is concentrated in the hands of the totalitarian state or a plutocratic class, the results are always the same: Injustice, inhumanity, and unimaginable horrors. As John Locke said, “Where there is no property, there is no justice.”

Private property–property to which you possess sole ownership and usage rights–is a bulwark against all that; it is one means of realizing the conservative goal of the dispersal of economic power. The system of free exchange–where you decide, of your own willpower, to transfer your ownership and usage rights to another, freely or in return for a like transfer of some portion of that other’s property–and the price mechanism which facilitates that exchange, are both logical extensions of the idea of private property, and are likewise bulwarks against tyranny, actual or potential. Private property, then, is one way to guarantee liberty, and what is more important than that, justice.

There are those, of course, who try to walk a tightrope, aiming to preserve the market economy and the system of private property on which it is based while incorporating elements of collectivism. This is what we call the “welfare state.” These people mean well, I have no doubt, but their cures are more often than not worse than the disease itself. When the state intervenes and, say, establishes a “safety net” or price controls, one consequence is that either the freedom of exchange or the price mechanism (or both, really) are adversely affected. Furthermore, the institution of private property itself is weakened. (If the state can override my decisions about what to do with my property, then are my ownership and usage rights really exclusive anymore? If not, then we’re moving away from a system of private property.) This, in turn, opens the door to the concentration of economic power, precisely what we should vigilantly guard against. And there are, of course, other unintended consequences of welfarism and state intervention, like the weakening of families, the erosion of those virtues which are indispensable to a free society (e.g., the work ethic and a measure of self-control), and so on.

But a conservative defense of the market economy must note what Swiss economist Wilhelm Roepke termed the “limits of the market,” in addition to considering its positive attributes. After all, a free economy is a human institution, and like all human institutions, its flaws become apparent from time to time. So, I’m going to say something which may sound heretical, but really shouldn’t, at least not to conservatives (libertarians may be a different story): There is a need, from time to time, for state intervention. Not of the welfarist, income-redistributionist variety, mind you, but intervention there needs to be on occasion.

What would a conservative approach to economic intervention look like, then? Well, first of all, the likely consequences of an intervention–intended as well as unintended–ought to be weighed carefully against its supposed benefits. Additionally, an intervention should only be undertaken to defend or strengthen the institution of private property and the system of free exchange (e.g., by enforcement of contract laws), to stem and/or roll back any trends toward the concentration of economic power (e.g., through anti-trust laws, anti-inflationary measures, and privatization of government programs), and to protect the moral foundations requisite for a properly-functioning market economy (e.g., by carefully regulating transactions involving goods and services that contribute to the breakdown of the family, enforcement of local “blue laws,” etc.).

So, let those on the left say what they want. While they’re busy working out their unrealizable utopian schemes, let’s spend our time building a free–and therefore, just–economy.

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