essays

Mar 1, 1979

Businessmen and “Uncle Sugar”

“Unless the conservatives break their unholy alliance with business and adopt the libertarian position, the liberals may move into the gap…themselves.”

ONE OF THE principal differences between libertarians and conservatives has always been their contrary attitude toward businessmen. Conservatives glorify and ally themselves with business, while libertarians are essentially neutral—siding with business when it is right, but pulling no punches when it is wrong. The conservatives, no matter how much they may realize that businessmen are subverting their goals, cannot attack business because, unlike the European conservatives, they have no other institutional base. In Europe the conservatives have a natural, historical alliance with those institutions which traditionally oppose change: the landed aristocracy, the church, the military and big business. In the United States, as Louis Hartz has pointed out, such alliances are impossible, for historical and cultural reasons. Because of this, American conservaives really have no natural ally, except for business. So they are forced to lie in the same bed together whether they like it or not.

Because of the unholy alliance that exists between the conservatives and business, the conservatives find themselves forced to defend business even when they know it is wrong. The classic case is when businessmen proclaim the virtues of the free market, thus finding common cause with both libertarians and conservatives, while actively seeking government favors for themselves. When this contradiction arises, the libertarians immediately drop support for any businessman involved, but conservatives cannot. The result is, obviously, an undermining of the conservative position. If the businessmen repaid the conservatives for their support with large financial contributions then it might be a worthwhile trade-off. But the real irony is that businessmen do not support conservatives generally except when it serves their interest. Thus in the recent election it was found that while labor gave almost all its financial support to liberal Democrats, corporations gave no similar support to conservative Republicans.

The businessman’s attitude, reprehensible as it is, is at least understandable in this context: If they give their money to liberals they may not buy support for the free market in general, but they can buy support for that corporation’s or that businessman’s particular interests. Indeed, since liberals have no philosophical opposition to government intervention in the economy they are actually preferable to conservatives as far as businessmen are concerned, if their desire is to get a government contract or a new regulation that will stifle competition. And if by chance a Republican should win, nothing is lost. The Republican has no other institutional base and will have to ally himself with business whether he wants to or not, in order to get reelected.

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If the Republican Party were smart it would realize that it gains nothing and loses much by being a mouthpiece for business. Although it is somewhat better off financially than the Democratic Party, it has been manifestly unsuccessful in translating this advantage into electoral victories generally. So even if it lost a few dollars, this could be more than offset by gaining new credibility with the American people. In fact, the party would probably not lose any money anyway, because businessmen would have to buy their influence with Republicans just as they now do with Democrats.

I believe the day is coming when conservatives will have no choice but to adopt a libertarian attitude toward business. The contradictions are becoming too acute. Thus William Simon writes in his book, A Time for Truth:

Throughout the last century the attachment of businessmen to free enterprise has weakened dramatically as they discovered they could demand—and receive—short-range advantages from the state. To a tragic degree, coercive regulation has been invited by businessmen who were unwilling to face honest competition in the free market, and by businessmen who have run to government in search of regulatory favors, protective tariffs, and subsidies, as well as those monopolistic powers which only the state can grant. In the process of seeking such advantages—such protection from freedom—business itself has helped build up the very government powers which are now being used to damage and even to destroy it.

During my tenure at Treasury, I watched with incredulity as businessmen ran to the government in every crisis, whining for handouts or protection from the very competition that has made this system so productive… And always, such gentlemen proclaimed their devotion to free enterprise and their opposition to the arbitrary intervention into our economic life by the state.

Unless the conservatives break their unholy alliance with business and adopt the libertarian position, the liberals may move into the gap and adopt it for themselves. There is considerable evidence that the Carter Administration will continue to make an issue out of deregulation, by hitting at those self-serving businesses which have benefited from regulation for so long. First it was the airline industry and next will likely be the trucking industry. In each case it was the businessmen who opposed deregulation, thereby playing right into Carter’s hands. And, as a consequence, many conservatives were forced into the position of defending the industry’s interests. Senator Barry Goldwater, for example, whose Conscience of a Conservative extolled the virtues of a free market, was a staunch foe of airline deregulation.

Recently, Joan Claybrook, a liberal ex-Naderite who is a member of the Carter Administration, sounded what may be a key Carter campaign theme in 1980 when she asked: “How many trucking and airline companies have been ready to shoulder the old-fashioned rigors of market pricing and entry by supporting proposals to put the regulators of these industries out of business? It is compellingly clear that many corporations welcome government when it is subsidizer of last resort, lender of last resort, guarantor of last resort, insurer of last resort, and cartel-defender of last resort.” In short, she says, “Uncle Sam is fine when he plays Uncle Sugar.” (Regulation, Nov/Dec 1978)

If Carter follows through with such an appeal by adopting a more libertarian attitude toward business it could gain him powerful support and help ensure his reelection. Republicans, conservatives, and businessmen should beware.