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Fallacies of a free market

James Matthew Wilson | Friday, November 17, 2006

In the first half of the nineteenth century, when America was still an unprecedented experiment in democracy, liberal Catholic Europeans such as Lord Acton and Alexis de Toqueville worried whether the two social virtues of liberty and equality could both be realized within it. Equality seemed possible, they admitted, on account of the extension of suffrage and the rise of public education. But would not both of these egalitarian programs result in a generalized mediocrity? Everyone may be literate and competent at arithmetic, but the natural genius might suffocate among his spellin’ and cipherin’ peers. Universal suffrage would guarantee each person a role in the political sphere, but the great mass of citizenry would likely throw its support to the debased demagogue instead of the natural aristocrat because inferior judgment and jealousy usually lead to a blindness less admirable than that of the blindness of justice.

As our current party system endured in the century and more since the end of America’s antebellum experiment (after Americans decided the dangers of democratic government were too grave to continue without the absolute check of a federal executive and judiciary), we have typically come to think of the Democrats as the party of equality and the Republicans as the party of liberty. Although such identifications are, to say the least, a stretch, I want to suggest one way in which they utterly misrepresent the true requirements for a just society.

At least since Johnson’s Great Society, Democrats have flirted with a European social democratic model of the state, which would seek equality by guaranteeing a comprehensive body of welfare programs covering not primarily education, but all facets of an individual’s basic needs. Food, housing and healthcare could all be administered by a massive federally organized bureaucracy.

At least since the Hoover administration, Republicans have paid lip service to a variety of laissez faire economic models whose core principle answers unjustly to the name “liberty.” According to this principle, the powers of government should be limited so as to guarantee the greatest latitude possible to the practice of free private enterprise. If the state would get out of the way of business, the market would provide a modern agora unlimited in growth and freedom.

The lesson of the Great Society programs is still being learned in most of our major cities, where literally hundreds of thousands of persons are crammed into high-rise tenements, in which they have no control over their living conditions and have no reason to believe that their domicile could ever be sufficiently theirs to become a home. Most of these egalitarian projects have ended not so much in mediocrity as misery. What is worse, these manifestations of a “classless” and just society have actually become dumping grounds for displaced and superfluous persons as the program of economic “liberty” has spread over several decades.

This project of liberty, in the meantime, has brought about an ever more activist federal government, paving the roads (literally and figuratively) for the unrestrained growth of mega-corporations. I apologize for repeating a cliché, but it is a true cliché, that this supposed economic liberty results primarily in the arrogation of great wealth to very few persons and leaves the vast majority of persons “wage slaves,” whose sole freedom is their “liquidity,” that is, their ability to move from one job or one town to another as necessity dictates.

Both of these programs, in fact and principle, pay inadequate attention to the one locus where both liberty and equality may be had: the privately owned home. Although the rise of communism in the east during the last century made the specter of the absolute state expropriating the masses a real threat, in fact the greatest damage to private property has been the free reign of corporations, merely abetted by a servile state. As Fr. John C. Rawe observed in “Agriculture and the Property State” (1936), once the federal judiciary guaranteed corporations the full rights of persons under federal law with few of the restrictions imposed by state law, longstanding efforts to guarantee a wide distribution of private property (land) became impossible. Where once U.S. homestead laws prohibited the ownership of more acres of land than was necessary to provide for the family that tilled it, by the 1930s, corporations had gotten such limits overturned and set up the massive factory farms that now all but dominate American agriculture.

When a society attempts to guarantee as wide a distribution of private property as possible (and that means real ownership, not the mockery of it entailed by the proliferation of mortgages), it demonstrates a cherishing of equality. When that society insists that only real human beings, and not the legal fictions of corporate persons, can own property and that it is part of the common good to foster and protect that ownership, it exemplifies the cultivation of liberty. Our current president has proclaimed that more new homes have been built and bought in the last several years than ever before. If that is statistically true, it hides a more devastating truth. Most Americans who own their homes do so only nominally. A bank or a government agency can wrangle it away with little trouble, token efforts at fighting “eminent domain” not withstanding.

The continued expansion of government powers will not resolve this debacle. The panaceas of the welfare state help some desperate cases, but as often serve to rationalize and conceal the consequences of reckless corporate growth. Rather we need small government; the smaller the better. Contrary to John McCain’s true Republican posturing, we do not need to limit government that enterprise may free us.

Government should be primarily local, and any business should be smaller still, until politics and economics alike are primarily local affairs. Unless both these forces are reduced to the human scale of the city or county, they will continue to corrode the one field of action in which the person and family can act and be heard. The great error of our experiment in government has been to believe that democracy can simply balloon without losing its legitimacy. On the contrary, size matters. Liberty and equality, insofar as they are possible, are possible only for members of a community in which one can know all one’s fellow members and can nip in the bud any acquisitive entity simply on the basis of its getting too big.

Political liberty is not a universal value, but merely a local possibility. The only liberty that can aspire to the universal pertains to Truth and to the Catholic Church and must be addressed in that context, not this one.

James Matthew Wilson is a Sorin Research Fellow, and carries “Who Owns America? A New Declaration of Independence” under his arm or in his heart at all times. His column appears every other Friday. He can be reached at jwilson5@nd.edu

The views expressed in this article are those of the author and not necessarily those of The Observer.