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Conservatism in Three Crises, And Their Lessons for COVID-19

These critical moments shaped American conservatism, and this pandemic will do so too.

(Photo by Scott Olson/Getty Images)

In the weeks since the COVID-19 pandemic arrived in America, it’s already become cliché to compare it to the Second World War. That conflict necessitated cooperation between government and business where there had previously been enmity. As coordinated wartime production stimulated industry, ending the Depression and enabling victory, it crystallized the New Deal prescription for a strong federal role in setting the terms of economic life. This settlement would undergird the “golden age of capitalism” that followed.

The times favored not so much ideological conservatives like Taft or Goldwater but temperamental conservatives like Eisenhower and Everett Dirksen. They had little love for government activism as such but nonetheless appreciated what one early postwar conservative thinker recognized as the conservatizing aspects of New Deal liberalism, which after all had sustained democracy through war and depression and so was probably worth defending. 

Eisenhower Republicans and Kennedy Democrats, they were all Keynesians now… until they weren’t. At the tail end of that cycle, in the 1970s, came yet another emergency that swung the orientation of the economy away from the state and back toward the market. 

This is the story that today’s conservatives would much prefer to retell as it seemed to confirm their views about the primacy of market forces. Looking back at these critical junctures, however, might imply another lesson, not so much about the inherent primacy of either the market or the state, but about the cyclical nature of history and the importance of context and circumstance in contemplating the proper balance between the two at any given time.

Enter the oil shock. In 1973, the Arab states foisted an oil embargo on the United States for its support of Israel during the Yom Kippur War. As gas lines began to form across the nation, a Republican administration was struggling to contain the damage by falling back on the policy playbook inherited from the 1930s, namely the imposition of price controls and government-directed resource allocation. What worked so well before was now failing in the face of the resulting stagflation. Experts were baffled.

Signalling the shift on the right toward a more stridently ideological free market conservatism, Governor Ronald Reagan nearly displaced a sitting president in the 1976 Republican primary, when he called for “no pale pastels,” but instead “a banner of bold colors.”

Elected in 1980 after the worst of the energy crisis under Carter, the new Reagan administration would not only preside over the end of the oil shortage, but see the American economy as a whole through a remarkable period of growth and recovery. Historians continue to debate what ended the shock and stagflation: deregulation (by Carter and Reagan), tight monetary policy, or an uptick in the supply of oil. In any event, the damage to the New Deal consensus was done. 

That protracted crisis taught Americans a lesson about the limits of governmental power and lent newfound legitimacy to free market solutions. It was not long before Clinton Democrats would be competing with Bush Republicans to hasten the end of “the era of big government.” The swing of the pendulum was complete.

Today, another exogenous crisis in the form of a deadly pandemic is wreaking havoc on America. Its greatest casualty may yet be the free market consensus that defined the parameters of economic policy for the last forty years. It may have taken a decade of discontent but the reckoning that was due after the endogenous crisis of 2008 has finally arrived. 

Old misgivings about the role of the state are now falling away as the federal government begins to implement a $2 trillion stimulus to keep the economy afloat. 

Among conservatives, this crisis should weed out the prophetic from the pedantic: 

Those sounding the alarm about over-exposed supply chains and the need for strategic industrial policy have been more than vindicated by the scramble to find masks and ventilators. What about submarines and sensitive communications technology? Those only interested in defending dogmas about how the government can’t be “picking winners and losers” will likely have a more difficult time defending their position in the post-pandemic world.

Likewise, those who wanted conservatism to pay more attention to traditionally left-wing concerns about inequality were probably on to something, while those whose first instinct is to go about finding new opportunities for tax cuts are probably missing something. 

The signs that something was deeply wrong with American capitalism were already there: vast swathes of the now formerly middle class reduced to permanent financial precarity, many of whom, the statistics said, lacked the savings needed to withstand a $400 emergency

Nobody could have known that that emergency would happen to everyone all at once and that the bill would amount to far more than a few missed paychecks. In an era of stagnant real wages (compensated for by debt-inducing easy credit), how could they have saved? 

As one United States Senator put it in a speech back in November: 

[W]e are living in a new age of inequality. The divide between the wealthy and working Americans is wide, and growing wider… The top 10% of the country’s earners control 77% of the country’s total wealth. As to wages: Over the last several decades, inflation-adjusted wages for the working class have barely budged, while income for those at the very top has soared.

Sanders? Warren? No, these are the words of the junior senator from Missouri, Josh Hawley, one of two conservatives in the Senate (the other being Marco Rubio) who most clearly saw that the problems of the 2020s will not be fixed by the solutions of the 1980s. 

It is no accident that Hawley has emerged as a vocal advocate in favor of a stronger and longer government response to the economic fallout wrought by coronavirus. (Hawley’s ideas have even been compared to what they’re doing in dreaded socialist Denmark!) 

In his call for a greater role for the state, Hawley is harking back to a lost tradition of conservative American statesmanship, dating back to Hamilton, Madison, Clay, Lincoln and Theodore Roosevelt, in which neither the market nor the state are ends in themselves but are rather instruments of policy to be used pragmatically in varying combinations to achieve and sustain the idea or the unchanging principle of a strong, stable and prosperous American nation.

When in 1828 the aging James Madison foresaw that in about a century America would become a nation of wage-earners instead of yeoman farmers, he trusted that “the wisdom of the wisest patriots” would adapt the institutions of the country accordingly. Such periodic readjustments have happened before and there is every reason to believe we are overdue for another one now.

With its myopic fixation on free market maxims, today’s movement conservatism has obscured this holistic view of history and created a profound (and at times morbid) confusion between means and ends, policy and principle. As he seems to be one of the very few Republicans unencumbered by this flaw, Hawley’s proposals will be as good a place as any to look for the contours of post-corona conservatism, which will be as distant from post-oil shock Reaganism as that particular settlement was from the postwar center-right politics of Eisenhower.

That future has not yet arrived, however, and the decrepit orthodoxy, what is often referred to as “Zombie Reaganism,” will not go lightly. Take the recent talk about Arthur Laffer, high priest of the supply-side faith, whom Sean Hannity wishes to recall from retirement like de Gaulle.

His bold plan to rescue the republic consists of (surprise!) more tax cuts and (surprise again!) more spending cuts: the logic presumably being that the swelling ranks of the unemployed may keep a greater portion of their non-existent paychecks, while wiped-out small businesses may retain a greater share of their non-existent profits, so that they may live out the emergency without having to draw on their non-existent savings, which they have of course built up after four decades of non-existent real wage growth.

As of now, the Republican mainstream remains closer to Laffer than to Hawley or Rubio.

Displaying the arrogance of the restoration-era Bourbons, the rigidity of the Hoover-era liquidationists and the haplessness of the stagflation-era liberals, these keepers of the free market faith are only too eager to lead the country into fighting the last war. They have learned nothing and – owing to characteristic historical short-sightedness – have forgotten everything, including the circumstances of their own ascent to power forty years ago, which was itself born of a pragmatic reaction to an exogenous crisis and built on the exhaustion of the previous status quo.

Here, they are merely acting out the tragic fate of any ruling class caught in ideological interregnum when the old is dying but the new has not yet been born.

Michael Cuenco is a writer on politics and policy. He has also written for American Affairs.

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