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It’s Freedom Stupid: The revival of socialism should restore a sense of purpose to its enemies

Friday, 06 January 2017

It’s Freedom Stupid: The revival of socialism should restore a sense of purpose to its enemies
A West German couple embraces in front of the Berlin Wall prior to it being lifted during the collapse of communism in East Berlin on Nov. 10, 1989

 

Written by Nick Cater. First published in Quadrant, January 2017.

The good news is that the cause of freedom can draw a crowd any night of the week in an Australian capital city. It will be a young crowd too, particularly if the nature of freedom and the cost of maintaining it remain sufficiently ambiguous.

At the Friedman Conference Gala Dinner in Sydney last May, the keynote speaker challenged the New South Wales government’s lock-out laws as a grievous assault on liberty against which true libertarians must rally. Think of the consequences for the start-up economy, he implored. How could we possibly lure those Silicon Valley prodigies to the dowdy streets of Wowserville when the freedom to imbibe was implacably denied?

Milton Friedman would have found it rather strange. He understood the insidious effect of petty regulations more than most, but the freedom to hit the squirt at 3 a.m. would not, one suspects, have struck him as a first-order issue. Not when the forces of illiberalism are active on many fronts at home and abroad; not when freedom of speech and ultimately freedom of thought are under sustained attack from the academic Left; and not when we’re being challenged by far more crippling economic interventions than a curfew slapped on Kings Cross.

It is fitting, however, that the Millennials should pay homage, in whatever fashion, to the intellectual leader who contributed so much to enlarging the world they will inherit. But for the advances of economic freedom that Friedman inspired, they may not have grown up in the most prosperous time in history and would not now be anticipating a fulfilling career in one of the most successful nations on the planet.

Economic freedom—the freedom to produce, trade and consume, free of coercion from the state—underpinned by the rule of law is the source of the affluence and empowerment we now enjoy. It drove the exceptional post-war economic growth under Sir Robert Menzies and inspired the deregulatory reforms of the 1980s and 1990s that equipped Australia for the twenty-first century.

“The freedom to do our best and to make that best better,” said Menzies in 1947, was “a freedom that goes deep into the very dignity of man”. He returned to the theme of economic freedom time and time again. “The greatest function of a democratic government is to create a climate in which enterprise will flourish,” he reflected three years after his retirement.

It would be understandable if today’s up-and-comers were to take this freedom for granted; they would have to be in their forties at least to have worked through a recession, to have experienced the closing horizons, uncertainty, diminution of savings, the fear of repossession and the loss of dignity that come when an economy starts going backwards. They would have to be in their late thirties to have any meaningful memories of the Cold War and to understand the hunger for economic as much as political freedom that finally tore down the Wall.

Economic liberty is the key to explaining not just the cultural battles of the past but also the challenges of the present. It is the key to identifying our opponents at a time of political disruption, and to deciding which side of the trenches we should occupy. The post-Cold-War consensus may have tempted us to believe that economic freedom had been won. Yet for the Millennials, like their parents, it is a freedom for which they must continually fight.

The agendas of Jeremy Corbyn, Bernie Sanders and, on his worse days, Bill Shorten, show that the Left has certainly not given up the fight. The defining characteristic of the New Left, like the Old Left, is an opposition to capitalism driven by a conviction that markets left to their own devices are incapable of serving the broader public interest.

The preferred manner of state control may have changed in the light of experience but the authoritarian instinct remains. Taxation pays the salaries of apparatchiks and funds the handouts that enslave the poor. Regulation ensures that the industrialists play according to your rules. Political correctness enforces a monopoly of truth.

Our understanding of the intellectual Left’s abiding aversion to capitalism is assisted by the writing of Ludwig von Mises. Not all of Mises’s observations withstand the test of time, but his 1956 work The Anti-Capitalistic Mentality describes the credo of the intellectual Left with exceptional clarity:

The fundamental dogma of this creed declares that poverty is an outcome of iniquitous social institutions. The original sin that deprived man of the blissful life in the Garden of Eden was the start of private property and enterprise. Capitalism serves only the selfish interests of rugged exploiters. It dooms the masses of righteous men to progressing impoverishment and degradation. What is needed to make all people prosperous is the taming of the greedy exploiters by the great god called State.

For those who see evil flowing from Adam Smith’s invisible hand, redemption comes through central planning which will, it is assumed, deliver abundance for all:

Those eager to accelerate this great transformation call themselves progressives precisely because they pretend they are working for the realisation of what is both desirable and in accordance with the inexorable laws of historical evolution. They disparage as reactionary all those who are committed to the vain effort of stopping what they call progress.

The intellectual Left’s assumptions have grown more ridiculous with the passage of time. Few of the centrally planned economies of Mises’s day have survived and the few that do stand are monuments to ideological folly. Most nations in the former Communist Bloc have converted to more or less free-market systems and demonstrated that they are infinitely better at meeting human needs. If we imagine the division of Germany as a controlled experiment in which the two economic systems are allowed to run in parallel for more than forty years, the results prove conclusively the superiority of capitalism. By the time the experiment was called off, West Germany had produced the BMW Z1 Roadster; East Germany had mounted a smoky two-stroke engine on wheels, covered it with a hard plastic shell and named it the Trabant. Far from being a force of oppression, capitalism has lived up to Mises’s expectations as “essentially a system of wiping out penury as much as possible”.

Allowing people to decide what to do with their own money and to strive after the station they wish to attain has proved a far more effective system of running human affairs. Far from protecting the powerful, capitalism actually makes them vulnerable. Those who think they can supply the public better and more cheaply than others are free to risk personal or borrowed capital to demonstrate their efficiency. The profit system is “a daily repeated plebiscite in which every penny gives a right to vote to the consumers to determine who should own and run the plants, shops and farms”.

In a centrally planned economy, power is vested at the top and the functionaries below are obliged to bow to superior wisdom, which frequently proves faulty. Few, if any, of the measures introduced by the state to alleviate the lot of the suffering masses met their stated intention. All came with unforeseen consequences, many of them harmful to the very people the measures were designed to protect. The outcomes Mises predicted are “even more unsatisfactory than the previous state of affairs they were designed to alter”.

Without any tenable objections to the evidence before their own eyes, and indeed with little regard for economics at all, the intelligentsia responds by denouncing opposing arguments as heresy: “The authors are called names, and the students are dissuaded from reading their ‘crazy stuff’.”

Today, having achieved almost total control of the academies and other cultural institutions, the intelligentsia’s ability to enforce its version of truth is considerable. Dissenters have become used to engaging in two conversations, one in polite company, another in the company of trusted friends and inside the privacy of one’s head. In public they tacitly assent to the platitudes on climate change, acknowledge their debt to the traditional owners of the land and keep their thoughts to themselves on gay marriage. Privately, in the company of trusted friends, they will say what they really think.

Thus, since the global financial crisis of 2008, the intelligentsia has effortlessly managed to enforce its false narrative of inequality and oppression. In their view, the crisis was the fault of bankers, not unwise state intervention. Blame is sheeted home to Wall Street and Canary Wharf instead of Washington and Brussels. The wealth gap has become the prism through which even civic challenge must be viewed.

The revival of socialism and the threat to economic freedom spawned by this delusion should restore a sense of purpose to its enemies. A quarter of a century after the Cold War, the defence of capitalism and the defeat of socialism should rightly be the defining cause for the centre-Right. There is no reason for the confusion that has lately overtaken the Liberal side of politics in Australia, no justification for division or the establishment of separate parties.

There can be no dispute in this clash of views about which side we are on; we oppose government interference and we favour competitive free markets. We do so not out of self-interest but because we see the evidence with our own eyes. We know that capitalism empowers, and that as Menzies said, “frugal people who strive for and obtain the margin above these materially necessary things are the whole foundation of a really active and developing national life”. There remains an immutable bond between economic freedom and prosperity.

The intellectual left’s anti-capitalist delusion cannot go unchallenged. State control leads, as it always has, to the tyranny of serfdom. Behind the studied arguments against free markets lies a lack of belief in freedom itself.

In interventionist economies the plan of the government is substituted for the plans of the individual citizens, depriving entrepreneurs and capitalists of the discretion to employ their capital according to their own designs. It amounts, as Mises identified, to the transfer of control from citizens to the government.

A defence of economic freedom is a defence of the individual independence of mind that leads to progress. It is a defence of the cause that united the Liberal Party under Menzies in 1944, “the freedom in this world to seek and obtain a greater reward for doing more”. Without this freedom, Menzies said, there would be no Australia. “Let us make no mistake,” he said in 1947:

It is this magnificent instinct to go out after the extra risk for the extra reward that has produced the extra results in history, to the great advantage and prosperity of hundreds of millions of people now living.

At the start of 2017, a century after the Russian revolution, let us raise our glasses to capitalism and freedom.

 

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