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.Back on the Road to Serfdom


   We should recall, though, that when the French classical liberal Frédéric Bastiat spoke of "legal plunder," he was not thinking exclusively of the use of state power to expropriate the rich on behalf of the poor. He was thinking of all forms of state violence employed to benefit one group at the expense of the rest of society. The greater the scope of the state over the economy, the more entrepreneurial energy will be misdirected into lobbying for special privileges and loot, and less into ongoing efforts to please the consumer.

  The more functions the state usurps from civil society, the more the institutions of civil society will atrophy. Once supplanted by coercive government, tasks that people used to perform on a voluntary basis come to be viewed as impossible for civil society to manage in the absence of government – even though civil society did indeed perform these functions at one time. This spiritless population comes, in turn, to look for political solutions even to the most trivial problems.


   The more the market is supplanted by a system of crony capitalism, the more the very phenomenon of profit appears disreputable. How, apart from some grant of privilege or other underhanded means, could someone have grown wealthy? Journalist Hedrick Smith, in his study The New Russians, found that this was the effect of decades of Communism – anyone who seemed to be prospering became a target of suspicion and envy. Entrepreneurship can scarcely function in such an atmosphere.

   Just how much the free market was in fact responsible for the crisis, or the extent to which government itself and its central bank may have been the culprits (and thus whether the "free market" could have been to blame in the first place), is the subject of one of the essays in this volume. The unifying theme of this book, though, is the brute fact that a shift toward statism is indeed occurring, and that it will not end happily. History is littered with foreign and domestic crises that became pretexts for the expansion of government power, and the present instance appears to be no exception.


  When we argue that the winds are blowing in the direction of an ever-larger role of the state in American life, we must be careful not to imply that prior to 2007–8 a broad consensus in favor of the free market and against state coercion had taken root. Even during the 1980s, when free-market ideas were said to be sweeping the country, the net effects were modest. Larry Schwab makes a persuasive case in his overlooked study The Illusion of a Conservative Reagan Revolution that the transformation that was supposed to have overtaken America during the 1980s was rather more limited than either liberals or conservatives have been willing to admit. There is little evidence of a lasting ideological shift among the population, and government grew rather than shrank, with the federal budget doubling over the course of the decade.


   The failure of conservatives to make significant inroads into the federal apparatus was symbolized by the Contract with America, the series of proposals Republicans promised to support on the eve of their off-year landslide in 1994. What was portrayed as a bold array of policy initiatives was in fact a timid and insignificant list of changes that would have left the federal apparatus for all intents and purposes unchanged. The Brookings Institution correctly observed: "Viewed historically, the Contract represents the final consolidation of the bedrock domestic policies and programs of the New Deal, the Great Society, the post–Second World War defense establishment, and, most importantly, the deeply rooted national political culture that has grown up around them."