Over the last year, more and more conservatives have been saying that it’s time to rethink their economic philosophy. In budding think tanks, senators’ speeches and cable broadcasts, they have been criticizing what they see as "free-market fundamentalism." Meanwhile, those on the right who still think that we should have freer markets than we do have angrily objected that they are being caricatured.
Now Nikki Haley, a potential future Republican presidential candidate, has entered the debate. Her tactic: embrace the caricature. In a Wall Street Journal op-ed adapted from a recent speech to the Hudson Institute, she argues that Republicans should defend unadulterated capitalism. If she campaigns accordingly, or other Republicans follow her lead, they will be cutting themselves off from the electorate and disregarding the lessons of the party’s past political successes.
The former South Carolina governor and U.N. ambassador will get a lot of Republicans nodding at her claim that “capitalism is the best and fairest economic system the world has ever seen.” But it does not follow that our capitalist system is perfect or that any reform to it would necessarily prove destructive. Haley pushes in just this mistaken direction.
She complains about conservatives who "advocate for more tax credits here, more subsidies there, more mandates for this, more regulations for that." They are lite socialists, paving the way for real ones. She concludes, "The better answer is to double down on capitalism. President Trump has done that."
Executives at many of the country’s largest businesses also draw her ire. Last year, the Business Roundtable, an organization of executives, issued a statement holding that business have purposes other than maximizing shareholder value, such as serving their customers. According to Haley, this statement amounted to an embrace of "watered-down" capitalism and political correctness.
Haley’s description of Trump bears little relation to his actual record. He has himself been an advocate for some tax credits, subsidies and regulations — and even for some taxes. He signed legislation expanding the child tax credit. He has imposed the most tariffs in decades, and then showered money on farmers to compensate them for the harm the trade war has done them. He is pushing for price controls on medicine.
Haley warns that weak-kneed Republicans would put us on "a slow path to socialism."
If she is right, we are already on it, thanks to the weak-kneed Republican in the White House.
Trump isn’t the only Republican president guilty of these alleged sins.
George W. Bush also expanded the child tax credit; Ronald Reagan expanded the earned income tax credit. Both of them pushed for the federal government to provide prescription-drug benefits for senior citizens. Some of these Republican policies may well have been mistakes: There are doughty libertarians who reject all of them.
But no Republican president has ever governed on the assumption that all departures from strict market orthodoxy were unacceptable compromises with socialism.
No one who seriously took that view would have been elected in the first place. Republican governors, including Haley, have also been flexible.
Haley is implicitly offering bad advice to conservatives on policy, but also on rhetoric. Take her criticism of the Business Roundtable. She notes that "a company that cheats its customers, mistreats its workers and abuses its community won’t be around long."
That’s not really a criticism of the group’s statement; it’s an explanation of it. If business executives need to do all of those things, it’s bizarre to insist that they are committing an ideological sin by saying so.
Her shot at unnamed Republicans who advocate a "hyphenated" capitalism is probably directed at Sen. Marco Rubio, R-Fla., who has lately been talking about "common-good capitalism." But there is respectable precedent for such modifiers. In 1987, President Reagan gave a speech on economic justice.
It includes only one mention of the word "capitalism": "The energy and vitality unleashed by this kind of People’s Capitalism — free and open markets, robust competition, and broad-based ownership of the means of production — can serve this nation well.”
No recent president has done better than Reagan in using sophisticated rhetoric and intelligent action in defense of free markets. It did not involve constantly advertising what a pure capitalist he was.
Few things will undermine markets more than if their defenders decide they are obligated to be simplistic and politically self-destructive.
Ramesh Ponnuru is a Bloomberg View columnist. He is a senior editor of National Review and the author of "The Party of Death: The Democrats, the Media, the Courts, and the Disregard for Human Life." To read more of his reports — Click Here Now.
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