Robert T. Miller thinks I’m off my rocker for imagining that our era is one of unprecedented economic freedom. Like many others, he points to the growth in regulation over the last few decades. He’s right about the explosion of regulation, of course. But a more regulated economy is not necessarily less free. In my view, technological, cultural, and political developments over the last two generations have greatly expanded the scope for economic activity, even as some new restrictions have been imposed. All told, we have seen an expansion of economic freedom. Acknowledging this is crucial if we’re to face current challenges without ideological blinkers.

After World War II, the United States worked to construct an international economic order that would break down trade barriers and encourage the freer flow of capital. After the end of the Cold War, this project really took off. The elaborate regime of international financial regulation that Robert Miller details was erected in order to bring stability to our more globalized economic order (as well as buy off political constituencies that would otherwise scuttle the evolving system). The end result has entailed a vast increase in regulations. Proponents of this system call it the rule-based international order. In this regulatory regime, those who allocate capital, produce and retail goods, and sell their labor have far more opportunities than they would have had in 1945 or the decades immediately following.

I can incorporate and sell my services as an editor to customers anywhere in the world. Or I can crowd-source a couple hundred thousand dollars to start my own firm. The process of incorporation may be cumbersome, and the paperwork necessary for compliance vexing. But this friction, irritation, and cost are negligible compared to the freedom unimaginable two generations ago.

Our regime of intellectual property protection—a complex regulatory scheme our government works hard to internationalize—allows companies like Apple to separate product design, production, and sales from their identities as tax-paying entities. This is why Apple and other companies enjoy the freedom to domicile themselves in low-tax countries. This was an impossible dream for American companies until only recently, and it contributes to their extraordinary profits.

Culture matters, too. Today, women have the freedom to make their own economic destinies in ways unprecedented in human history. Business ethics have also changed. Today, most agree that the primary duty of corporate leaders is to maximize shareholder value. This consensus has freed business leaders from an older, more restrictive view, and allows those who make key decisions about capital allocation, production, and marketing far greater freedom than their predecessors had to think in purely economic terms. This development more fully realizes the essential meaning of pure and perfect economic freedom—the elimination of all limits (other than deceit and dishonesty) to our ability to maximize our economic interests.

Increasing economic freedom has been a bipartisan project since the 1970s. Both parties supported legislation ensuring greater economic access for women and minorities. Jimmy Carter de-regulated the cartelized transportation and telecommunications industries of the post–World War II era. Democratic leaders supported efforts to expand free trade and global financial markets. These efforts were needed, and over the course of my adult life I have supported them.

But we are facing new political realities today. Populism is being driven by cultural changes. I have written many times about the ways in which the decline of marriage makes ordinary voters more vulnerable; how elite cosmopolitanism interacts with high rates of immigration to incite fears that we are losing our national home; and the way anti-racism has been transmuted from a noble cause into a partisan bludgeon, now used to discredit the civic role of the “deplorables.” But populism has economic roots as well. The much-discussed wage stagnation for middle-income Americans suggest as much. Together, these cultural and economic factors make voters more and more open to populist politicians.

I worry a great deal about the dangers posed by these trends. Many of my friends, Robert Miller included, believe one of two things (or perhaps a combination of both) that downplay the economic causes of the erosion of loyalty of voters to our current system:

(1) They consider populism epiphenomenal, something stirred up by demagogues, with no enduring basis. Put differently, they don’t think there is anything deeply wrong with our post-1989 arrangements. We need to stay the course. The global economic system will benefit everyone, eventually. Meanwhile, misguided working-class Americans need to be better instructed about the benefits of cheap flatscreen TVs from China. We need to counter populist misinformation and spread the news that things are actually pretty good for most people.

(2) They allow that we have problems, but hold that our political distempers have arisen because of lackluster economic growth during the Obama administration. This poor performance stems from over-regulation, over-taxation, and other constraints on economic freedom. Things will right themselves if we can get back to the basics of Reaganomics. This is the position of the Wall Street Journal. Holding this view requires affirming the proposition that economic freedom has been diminished in recent decades, which explains why we are in the slough of political despond. Identifying diminished economic freedom also justifies focusing on de-regulation and tax cutting as the way to return the body politic to health.

I find these claims implausible. I’ve given evidence against (2) above. My reading of political signs of the times counsels me to reject (1). This does not mean that I am correct. Perhaps my friends who think populism a temporary blip are correct. Perhaps those who believe that the right tax cuts and greater GDP growth will set things right see more clearly than I do. But their penchant for responding to new ideas attuned to new circumstances with denunciations makes me doubt their ability to lead.

We need to do some serious thinking. I am committed to reality-based conservatism. Preserving the achievements of our increasingly global and largely free-market system of democratic capitalism—the system Michael Novak rightly defended two generations ago—requires us to take a long, hard look at its defects. Doing so will make us realists, not “anti-capitalists.”

R. R. Reno is editor of First Things.

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