Our imagined past...

Second only to the adamant, but unsupportable conviction that our country was established as a Christian nation - which can be countered by reading just a few biographies of the Founding Fathers - is the belief in founder-established free market orthodoxy.

Especially for agriculture, which has long been dominated by efforts to have the government alter the market in favor of the constituency-of-the-moment, the paradox of this firm assertion in the face of historical fact continues puzzle me.

One example that struck me was discovered when I visited the Lincoln Museum this summer. (BTW - a must-see).  In a side room showing Lincoln's contributions to agriculture were the expected mentions of land-grant colleges and homesteading, and his staunch support of protective tariffs for ag commodities.  I was stunned that my hero could swerve from the True Path so enthusiastically.

Political scientists at the Monkey Cage investigate this belief:

We hear a lot about the free market approach to policy problems, much of it couched in terms that imply that free markets are in some sense “natural,” or that free markets are the grand tradition of our country which nefarious politicians are attempting to undermine. The question whether free markets might be “natural” to humans is a complicated one, relying on a picture of individual human nature which I’ve already criticized. The same acquisitive nature that makes man a competitive market being can also hamper markets when it becomes anti-competitive, and thus libertarians admit that government is necessary at least to restrain monopolies and trusts. In a sense, libertarians (and all other rights-based thinkers) support competition, but not scorched-earth victory.
But my topic today is instead the role of the free market in our nation’s history. As I said, free market policy proposals are often put forward with the implication that markets are the default setting in American life. Obama is charged with wanting to “supplant” free market capitalism with socialism. Regulation is an “interference” with the operation of free markets. Surely, socialism is alien to American traditions (and alien to the Obama administration as well, but that’s the subject of a different post); and a norm against the over-regulation of commerce is one of the hard-won insights of American history. But this doesn’t mean that free-marketism has been the norm in the past; or that the absence of regulation has ever been the status quo.
In fact, the American economy from our founding onwards grew in a symbiotic relationship with government action. And we forget that history at our own peril. As important as the American self-image of entrepreneurship is, our government has (which is to say, we collectively have) always been active in creating the playing field on which commercial competition occurs. We build the field, and we shape its rules – and when we re-shape its rules we are not interfering with time-honored and sacred rights, but merely making the sort of collective decisions aimed at our shared progress which we have always made.

In the early 19th Century, state governments chartered the first corporations as a method of encouraging public improvements (say, building a bridge across the Charles River in Massachusetts, or laying and maintaining usable roads in Pennsylvania). The “corporation” in its inception was a private or semi-private entity aimed at encouraging individuals to team together for public purposes by granting them public lands (and sometimes private lands taken by eminent domain) as well as a right to the profits made by their improvements.

In the late-19th Cenury, government owned most of the land in America, and enacted policies meant to encourage the peopling of the West and the improvement of those lands. It sometimes granted rights to water or land to railroad companies, who would have an interest in creating and fostering towns in the Midwest and West so they could transport the goods produced to the East. And it also granted certain bundles of property rights to individuals to encourage them to go west. Our government fostered what we might think of as one of the largest public-private-popular cooperative schemes in the history of man. (This story is necessarily truncated here, but for an excellent retelling of the role of the government in distributing property rights in the American West, see this book by Donald J. Pisani.) [More]

It is a series worth reading, especially for "fallen" or confused libertarians such as myself.  Basically, we move our political economy up and down a scale between the power of government and the power of individuals, rather than alternate between poles.  How libertarian you are at any time seems to be a function of how well those moves benefit you.

Right now, with the strident cries of creeping socialism (which may actually be accurate) many simply forget we have a long history of government intervention for whatever reason.  If such intervention is good for ethanol backers, why should we be surprised those who struggle with access to health insurance coverage should apply the same strategies?

Furthermore, given this long history of free market "tampering", how can such ideas be any less "American" than agriculture policy?  More importantly perhaps, if intervention in ag markets has not led to soviet-style communal farms, why should we expect health insurance reform to automatically lead to a UK-style government health system?


Some slopes may actually be sticky, it appears.