In a recent Law and Liberty piece entitled “Mercantilist Follies, Then and Now,” Samuel Gregg notes the curious recent rise of economic nationalist thinking in contemporary American conservative circles. Labeling this economic nationalism as “mercantilism,” Gregg argues that such economic ideas had been tried and have allegedly failed in the Early Modern and Enlightenment periods. In his piece, Gregg argues for contemporary globalist laissez-faire capitalism as the most prosperous form of economics. Whether or not one agrees with Gregg’s position, he does provide an interesting insight into the dynamics of the divide in the contemporary conservative movement: the rise of an anti-capitalist Right (or at least a Right that is skeptical of capitalism).
Indeed, it is not uncommon to find—especially among younger conservatives—many critics of capitalism. These young thinkers usually combine of an (often hyperbolic) nationalism with elements of postmodern and (neo-Marxist) critiques of capitalism from thinkers such as the (neo-)Marxist scholar Frederic Jameson and philosophical gadfly Slavoj Žižek. Like those on the Left, right-wing critics of capitalism argue that capitalism is to blame for the tremendous existential suffering and sense of meaninglessness in the 21st century. While the Left attacks capitalism as being the primary engine of the West’s success, however, right-wing critics of capitalism usually criticize it as being the source of the West’s decline.
Taking aim at both the Left and the (economic) populist Right, in his recent work, The Politically Incorrect Guide to Economics, Ludwig von Mises Institute senior fellow Thomas J. DiLorenzo makes an extended and detailed argument for the merits of the capitalist or laissez-faire system.
As he notes, DiLorenzo’s work is meant as an antidote to critics of capitalism—especially university professors who denounce the free market in their economics classes. DiLorenzo notes that many young people support various social democratic or even socialist platforms, such as increasing the minimum wages and price control laws. These young people, DiLorenzo further notes, generally have a hatred for the term ‘capitalism,’ but, at the same time, allegedly do not have any idea how the economy works. In DiLorenzo’s view, this ignorance is largely due to the fact that much economics is propaganda or what Ludwig Von Mises calls “myths” as opposed to science.
In his Politically Incorrect Guide to Economics, DiLorenzo presents what he sees to be the science behind economics. Providing a familiar libertarian history of 20th century economics, DiLorenzo argues that the American Economic Association has, allegedly, been wed to socialism since its inception. Borrowing from the German Historical School, the AEA argued for the importance of the state in shaping and molding the economy and avoiding laissez-faire economics as being immoral and ‘unsafe.’ DiLorenzo notes that it was during the Great Depression that socialist-leaning economists gained tremendous power. By the 1930s, these economists had imbibed the ideas of John Maynard Keynes and formed what has been called the Keynesian Revolution. This Keynesian Revolution gained further political power after the Second World War.
Frederick von Hayek and others such as Milton Friedman and Ludwig von Mises, however, founded the Mont Pelerin Society in 1947 to present a free market model to the world. As Keynesians struggled in the 1970s, the Mont Pelerin thinkers and their disciples ignited a free market revolution; for their efforts, Friedrich von Hayek won the Noble Prize in economics in 1974 and Milton Friedman won one in 1976. Their ideas were further embraced by Margaret Thatcher and Ronald Reagan in the 1980s, who gave them political clout. DiLorenzo’s narrative is curious, for it is, quite literally, the mirror opposite of 20th century economic history as presented by democratic socialists like Naomi Klein in her 2007 book The Shock Doctrine. In Klein’s thinking, Reagan and Thatcher (and others such as Augusto Pinochet and Boris Yeltsin and other ‘Friedmanites’ or ‘neoliberals’) effectively destroyed their respective countries through the implementation of free market ideas.
DiLorenzo argues, in contrast to Klein and others, that free markets are the engine of human flourishing. Central to DiLorenzo’s argument is the notion that capitalists benefit by the creation of cheaper and better products that consumers enjoy. He gives the example of Sam Walton as well as Henry Ford and John D. Rockefeller as individuals who made their fortune by giving people what they allegedly wanted in a manner that was cheaper and better than their competitors. Like other advocates of the free market, DiLorenzo favorably depicts Adam Smith’s notions of benevolent self-interest as well as the invisible hand of the marketplace, which will drive forward economic, technological, and social progress. In contrast, DiLorenzo argues that socialism is inefficient and the creator of stagnation and decline. To provide an example, DiLorenzo tells a story of how he once asked a class of students he was teaching in the late 1980s, what successful products Soviet Communism produces, and the students could only come up with the AK-47 and caviar (which is produced by a fish).
In The Politically Incorrect Guide to Economics, DiLorenzo further takes aim at the protectionist Right who argue for restriction on trade to protect American economic interest. DiLorenzo suggests that free trade encourages peaceful relations among nations. It also supposedly causes an increase in the quality of products as well as decrease in their price. In his view, this desire to restrict trade has been one of the mistakes of the Trump administration.
DiLorenzo provides a few points with which some readers might disagree. Like other libertarian authors, he argues that child labor will ultimately be discontinued as the process of capitalism increases its momentum. Efforts to end child labor, he suggests, are the result of American unions attempting to eke out competition. Like many other libertarian authors, DiLorenzo also argues for the licitness of what has been called ‘price gouging’ or the inflation of hotel, food, and water prices during natural disasters. Finally, he argues against rent control laws, which he sees as leading to the creation of slums. These points are perhaps the Achilles’s heel of the book as well as the wider libertarian argument. While much of the millennial and Zoomer generations are now effectively post-Christian, they are largely affected by Christian humanism in support of price controls as well as generous working conditions—not only in the United States but abroad as well. Older individuals—even conservative advocates of some form of free market economy—will also likely object to these arguments. However, there are a number of critiques of socialist totalitarianism as well as the new ‘woke totalitarianism’ in the book with which many readers will agree.
In the final chapters of the book, DiLorenzo takes aim at the bête noir of libertarians and other free market advocates: socialism. DiLorenzo argues that doctrinaire socialism has failed in places such as the Soviet Union and, more recently, Venezuela, where citizens were forced to kill zoo animals for meat, and he also argues that ‘Fabian’ socialism ultimately ran out of gas during the British ‘disease’ of the 1970s. DiLorenzo sees Marxism as taking new forms in the 21st century, in movements such Black Lives Matter and the new attack on Western identity. However, it is curious to note, as DiLorenzo does not, that the new waves of Cultural Marxism are often funded by billionaires and the heads of the bulk of major U.S.A. corporations who run on the engine of capitalism but who profess their allegiance to the new ideology of inclusion as well gender identity. For these denizens of ‘woke capitalism,’ capitalism is good as long as it serves various cultural and political interests and is tamed by political correctness. DiLorenzo also argues that advocates of equity plan on bringing in a totalitarian government that will stomp out human individuality and creativity. This is perhaps his strongest point and that of the libertarian thinkers from which he draws: the key danger of socialism is totalitarianism, and whether one calls it socialism, Cultural Marxism, or woke capitalism, America and the wider West are increasingly developing a statist and totalitarian regime
Thomas DiLorenzo’s The Politically Incorrect Guide to Economics comes at a time in which the majority of young people in the West are predicted to experience less freedom and economic prosperity than their parents or grandparents enjoyed. The optimism of the 20th century and the bravado of the War on Terror of the early 21st century has largely evaporated. A New Right has emerged around figures as diverse as Notre Dame political science professor Patrick Deneen, Israeli biblical scholar Yoram Hazony, and PayPal founder Peter Thiel. This New Right argues for trade restrictions and economic nationalism and a return to a stronger national identity for Western nations. At the same time, however, despite the talent and intellectual capital of this group, it is beset by a palpable sense of weariness. The energy of the Trump Era has nearly completely been drained.
Conservatives might debate these economic issues in good faith, putting forward arguments for or against various types of economics. Without a strong and energetic political movement, however, these ideas will not get off the ground. The conservative movement needs leadership that will craft a culture of passionate (but not hysterical) politics that can re-energize the American economy and the American people. For only with a just and prosperous economic order will America be able to become great again.