Tuesday, January 24, 2012
Conservative Republican candidates for president Newt Gingrich and Rick Perry (before he quit the race) have done something conservatives must never do: they have criticized the way a man became rich. That man, of course, is rival candidate Mitt Romney, whose career as a venture capitalist at the firm Bain Capital sits at the center of the Gingrich/Perry indictment. A distilled version of that indictment is the 28 minute film, The King of Bain, produced for television by Gingrich’s super-PAC. The sharp-edged film accuses Romney of destroying jobs and companies in the American heartland, leaving families and communities devastated, all while making millions for himself. But the conservative commentariat is not pleased. Rush Limbaugh has compared Gingrich’s message to that of President Obama, Elizabeth Warren and Occupy Wall Street. Rich Lowry, editor of National Review, has called the Bain film “anti-market agitprop worthy of Michael Moore.” Sean Hannity, Rudy Giuliani, Tea Partiers like Senator Jim DeMint, and the Wall Street Journal editorial page were all shocked to hear fellow conservatives finding fault with the ardent acquisition of wealth. The conservative advocacy group Americans for Prosperity lamented what it called the film’s “heavy-handed, populist tinged attacks on free enterprise . . . we are disappointed to see attacks from some Republican presidential candidates on Mitt Romney and Bain Capital, which sink to the level of some of the worst anti-free market, class envy politics constantly pushed by the Obama Administration and those in the Occupy camps.” Romney himself also attributed the attacks to class envy and cautioned that issues like economic inequality should only be discussed in “quiet rooms”, far from where such indelicate talk might incite the restive population. Envy, apparently, is an emotion all too easily aroused in the common folk.
By focusing so sharply on the profound discrepancy between Romney’s huge gains and worker’s painful losses, the film does imply that something is rotten with our economic system, an implication one does indeed find in a Michael Moore film. But a closer look shows the Bain film to be more subtle and less radical in its critique than shocked conservatives might perceive. But those conservatives are still right to fear the film’s message. Many commentators have rightly pointed out that the film is full of specific errors and misrepresentations, but that misses the point. What worries Limbaugh, et al, is something much more fundamental. The conservative movement runs almost entirely on white cultural populism, on the perception that culturally foreign, over-educated, condescending elites hold the levers of power and use them to denigrate and abuse the values of decent, white, small town, religious folks. But the Bain criticism contradicts the stock conservative alibi for any unhappy outcome of capitalism, and in doing so it opens the door to a genuine economic populism and to the progressive policy stance such a populism would imply. And that is what really agitates Rush.
What is that stock alibi? Modern American conservatives, in effect, contend that the free market, like any good social institution, rewards the virtuous and punishes the wicked. If one engages the rough-and-tumble of capitalism with rigorous work, determination and self-denial, one will succeed. Not so if one is lazy, irresolute or irresponsible. If other social institutions – family, church, school – have nurtured one’s proper moral strength, one can expect to join the economic elect. Capitalism becomes the playing field in which morality is played out, and as such it reinforces moral strength as well. Thus God’s will is coarsely done on Earth. Economic suffering is not something we as a society can mitigate without lessening the moral education capitalism so vigorously provides. If we make life too easy for the undeserving they will never feel the incentive to become deserving. This may seem like an unfair treatment or oversimplification of the conservative position, and there are definitely more sophisticated conservative answers to economic misery (which we shall consider). But those other explanations don’t have the emotional power of what we will call this moral explanation; it is the core conservative teaching on capitalism, the foundation upon which the other explanations ultimately rest. It is this simple moral explanation that allows the prosperous to be seen as genuine moral exemplars by their downscale conservative cousins, and it is what motivates those lesser conservatives to defend their betters against such stark evils as the progressive income tax. A man will happily fight against his own interests if he believes he is fighting for justice.
But the Gingrich film condemns Romney for enriching himself at others' great expense, for his greed, a trait the moral explanation positively applauds. The greater one’s greed, the more powerfully does capitalism bestow its moralizing motivations. The film, in effect, calls Romney an evil capitalist, something that according to the moral explanation can’t exist! How does the film explain Romney’s badness? By calling him un-American. It showcases his disconnect from everyday Americans, his condescension toward the little people, his collusion with Latin American investors, his “high disdain for American workers . . . describing them as sloppy and lazy.” He even speaks French! Mon dieu! Here, of course, is the real point: Romney treated Americans badly because he is disloyal. His greed trumped his patriotism. Let’s call this the cultural explanation for unpleasant capitalist outcomes. This is conservatism not as Social Darwinism, but as nativism. According to the moral explanation capitalism forces people to be good; according to the cultural explanation it should only be practiced by the good; that is, by Americans who embody and express America’s moral purity, as do the simple, decent, hard-working victims of Bain’s pillage. We can see why a conservative attack on a rich man – such as Gingrich’s attack on Romney – must take this form: it allows the rich man’s victims to be seen as just that, innocent victims, while not indicting capitalism more broadly; that is, while still blaming individuals, not the system.
Both of these explanations, the moral and the cultural, allow conservatives to square their support for capitalist inequality with the roiling populist resentment that drives the conservative movement. The moral explanation portrays inequality as an expression of justice. It dismisses all hostility toward the rich as mere envy, as moral weakness, as desire for the deepest injustice. The cultural explanation allows populism to be directed at those that don’t embrace conservative values and mores, i.e. at liberals, intellectuals, gays, secularists, cosmopolitans, etc. Conservatives don’t just strongly disagree with such people, they feel oppressed by them. Even authentically American rich people – rich people who regularly attend church and eat pork rinds and follow NASCAR – are oppressed by them. And capitalism will be cleansed only when comprehensive cultural revival removes those oppressive impurities from American life. The crucial point is that the two explanations reduce economic issues to moral ones and thereby prevent conservative populism from turning into economic populism. They prevent hatred of elites and elitists from sliding over into hatred of the rich for being rich. And they prevent economic unhappiness from manifesting as concrete programmatic proposals for constraining or ameliorating capitalism.
But there is also a non-moralist conservative understanding of capitalism’s transgressions, a more sophisticated and practical understanding. And it revolves around the phrase “creative destruction”, the notion of Austrian economist Joseph Schumpeter that the market must crush the moribund (firm, product, employee) in order to build up the healthy, all for the sake of economic growth. The arrival of the automobile destroyed the carriage industry, but we are all richer for its having done so. This is Social Darwinism shorn of its moralism. It is not the good that prosper, but the efficient. Call this the optimistic explanation. Thus, Bain fired employees from a firm so that that firm could make a profit and hire more workers later. When Bain bought a company and sold off its assets and bankrupted that company, that merely demonstrated that the sum of the parts was worth more than the whole, that those assets were being used inefficiently and Bain was freeing them up to create more wealth and more jobs. If not, then no one would have been willing to pay those prices for those assets. Every market transaction freely and openly agreed to creates more wealth than it destroys. What the market takes with one hand it more than gives back with the other. As the economy becomes more efficient it generates more wealth, which eventually benefits everyone, even the ex-employees of the Bain-controlled company. A local loss is just a necessary part of a greater global benefit.
Rich Lowry offers up a soberly honest expression of the optimistic explanation in his response to the Bain controversy. Lowry concedes that even if the pain of capitalism is the price that must be paid for economic growth, the reality of that pain must not be ignored: “Defenders of Bain and Romney himself use the famous phrase of the great economist Joseph Schumpeter, ‘creative destruction,’ to describe the firm’s work. The former employees [of the Bain-controlled firm] are a reminder that, for all the glories of the first half of that formulation, the second half can be hell.” But he throws up his hands in despair of a remedy: “What’s the alternative to this Schumpeterian churn?”
But what is it that keeps Lowry from even considering the quite respectable alternative, that is, the regulatory/welfare state? He can’t even mention it in order to dismiss it! Why doesn’t the reasonableness that allows him to concede the reality of capitalist suffering extend to embracing the obvious (if highly imperfect) solution? Put another way: many liberals would accept both the necessity and the net benefit of creative destruction (though some would not) but still insist that government programs can and should soften the “hell” that even Lowry admits can result. So why can’t Lowry consider that solution? That’s a big question, one beyond the scope of this analysis. Suffice it to say that it probably has something to do with typical conservative presumptions regarding the inevitability of social hierarchy and the natural and spontaneous nature of capitalism. These are the presumptions underlying the moral understanding as well. The cultural understanding, however, is profoundly ambivalent about social hierarchy and capitalism, as we shall see below.
Crucially, none of the three explanations allows capitalism itself to be blamed for any unhappy outcomes. The moral explanation blames the poor and unemployed themselves. The cultural explanation blames disloyal capitalists. And the optimistic explanation, in effect, denies that economic suffering ever occurs, since such suffering is more than compensated by greater economic benefit sometime or somewhere else. But – and here is the big break with conservative orthodoxy that Limbaugh finds so threatening – the cultural explanation allows for capitalism doing bad; it does not excuse all economic activity. In the populism informed by the moral explanation the hated elitists are the politicians and government bureaucrats who try to overturn the righteous capitalist hierarchy. But in the populism of the cultural explanation elitists can be found within the ranks of the capitalists themselves. The cultural explanation, with its nativist fear of both Washington and Wall Street (and Hollywood and Harvard, too), is a throwback to a historically earlier version of American conservatism, a version which had not yet embraced capitalism and cloaked it in its moralistic attire. It fits perfectly that a more thoroughgoing populist and nativist like Pat Buchanan finds the mainstream purist defense of unadulterated capitalism quite thoughtless.
Thus are orthodox conservatives forced to strictly police the porous boundaries of their ideology. Only the proper kind of populism is to be admitted, the impure ones smelling of Michael Moore and socialism. This is why the workers, the poor, or – God forbid! – the middle class must never be delivered over to envy. The delicate and refined populism of the country club can so easily be corrupted by its surly hillbilly cousin. But there’s another reason the common folk so easily succumb to the notion that investors, owners and CEO’s are reaping huge rewards at their expense. It’s true. Or, more precisely, that notion has some truth to it. The creative destruction sown by Romney and Bain may indeed have been more creative than destructive, but it might not have been. But that calculation doesn’t matter, since the Romney’s continue to enjoy most of the creation while the workers suffer most of the destruction. Rising income inequality and declining social mobility are very real and powerful phenomena and working people know it in their bones. It is not petty envy they feel, but wrath at the injustice; accusations of envy demean and dismiss their very real injury. The patent absurdity of the moral explanation is plain to people who work hard, obey the law, raise and educate their children, contribute to their communities, and yet still find themselves on the receiving end of the capitalist firing squad. They know they are not to blame, and the cultural explanation does not ask them to engage in such self-deception. Yes, the cultural explanation stops just one step short of the genuine populist conclusion – that some forms of capitalism just do not benefit America – but that last step isn’t so hard to take. If a French-speaking, disdainful, fake hairdo like Mitt Romney makes gobs of money by devastating their lives when they did nothing wrong, they may still avoid the obvious conclusion. But crushed expectations can be an education. If the next person that fires them likes country music and monster trucks they may come to realize that cultural authenticity is not a sufficient safeguard against economic pillage. Then what might the people demand? More progressive taxes? Campaign finance reform? Wall Street regulation? Unions?! Oh, the horror, the horror . . .