The New Populist Right Is Making the Same Old Economic Mistakes

Friedrich Hayek looks on during a press conference in Paris, France, December 4, 1980. (Laurent MAOUS/Gamma-Rapho via Getty Images)

A ‘conservatism’ that rejects individual liberty and seeks refuge in statism can neither defend freedom nor facilitate human flourishing.

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A ‘conservatism’ that rejects individual liberty and seeks refuge in statism can neither defend freedom nor facilitate human flourishing.

I n Friedrich Hayek’s famous essay “Why I Am Not a Conservative” (appended to his 1960 book, The Constitution of Liberty), the economist examined the slippery question of what exactly a “conservative” is. Hayek lambasted the European style of conservative, typically someone who distrusts individual liberty, fetishizes authority, and retreats reflexively to central planning.

But American conservatism differs from its continental counterpart, Hayek wrote. While the latter reactively defends the status quo for its own sake, conservatives stateside advance a classically liberal tradition — the tradition of the American founding. Referring implicitly to such contemporary thinkers as Russell Kirk, Hayek noted a “recent attempt to transplant to America the European type of conservatism, which, being alien to the American tradition, has acquired a somewhat odd character.” Hayek even compared many of these conservatives with socialists “in their efforts to discredit free enterprise.”

Today, European-style market-skeptical conservatives once again pose a challenge to the Right and to America. Preferring heavy-handed economic planning to fit their conceptions of the good, these challengers widely decry modern evolutions of the American economy and workforce. This movement — fueled by populist and anti-corporate fervor — aims to arrest the organic development of domestic markets and global supply chains and advocates a return to a bygone (and less prosperous) mid-century industrial model. Likewise, its affection for unions looks back to an outmoded era of work — an era to which most American workers prefer not to return.

The anti-market Right embraces protectionism, industrial subsidies, and closely regulated markets, as well as zealous antitrust enforcement. This ideology also embraces labor unions and radical progressives who share a taste for command-and-control, crossing once-firm ideological borders. Some who once praised efforts to “constrain political actors from ad hoc adventures in feckless dirigisme” now promise explicitly “to wield political power to reward friends and punish enemies.” Hayek’s essay warned of this impulse. “Like the socialist, he [the statist conservative] is less concerned with the problem of how the powers of government should be limited than with that of who wields them,” he wrote, “and, like the socialist, he regards himself as entitled to force the value he holds on other people.”

Authentically American conservatism presents a preferable alternative. It would see the state guarantee the individual’s freedom to discover and pursue the best uses of his property and talents. Free marketeers — in the tradition of Hayek — trust in spontaneous order and private action to allocate capital efficiently and to reward innovation and excellence. In this view, regulators must patrol the market for force and fraud — but little else. The exact contours of American markets, and which goods American businesses are to produce and which to trade for, are of secondary concern. A study of history vindicates this view. From Ancient Egypt to early-modern Europe to post-Maoist China, the uncoerced and market-coordinated choices of individuals ineluctably generate far greater prosperity than the best-laid plans of mousy bureaucrats.

Much of the angst that energizes the pro-planning insurgents stems from a gross misunderstanding of the American manufacturing sector. Mistaking the sector’s evolution for a deterioration, they justify a corpulent industrial policy on the grounds that “America doesn’t make things anymore.” This is an outright untruth.

America ranks second globally in total manufacturing output and is currently producing at near all-time highs. And in productivity terms, America ranks first. Its $141,000 value-added per worker comfortably beats second-place South Korea (which falls short of $100,000 per worker) and trounces ninth-place China ($18,783 per worker). Moreover, U.S. industry deals disproportionately in high-value products, cutting-edge technologies, and research and development.

Anti-Hayekian conservatives’ labor policies — described as “worker-centric” and “worker-first” in a recent glowing profile — stem from the same confused nostalgia. They mistake pro-union policy for pro-worker policy and attempt to force modern-day workers into a failed and obsolete mid-century labor paradigm.

Most modern workers largely reject unionization — for good reason. Union membership has fallen steadily in recent decades, shrinking to just 6 percent of the private-sector workforce in 2023. In most industries, unions have outlived their utility. Their efforts to wrangle ever-higher compensation at the expense of productivity have weakened the employers against whom they negotiate. Indeed, Big Labor’s bellicosity has driven down investment in union-heavy regions and chased jobs from the Rust Belt to right-to-work states.

Many workers distrust the inherent risks and rigidity of union membership (nobody wants to lose his job because production relocated to a right-to-work state), and many dislike unions’ corruption and extracurricular political advocacy. Further, workers may simply prefer to negotiate for themselves — a preference that reflects a quintessentially American self-confidence and individualism.

A reactionary reversion to illiberalism and extinct economic models is as impossible as it is undesirable. It is, moreover, somewhat humorous, considering their mistrust of foreign goods, foreign investment, and foreign labor, that statist conservatives have eagerly imported European-style political and economic philosophies that, acid-like, erode the bedrock principles of the American founding. As Hayek knew, a “conservatism” that rejects individual liberty and seeks refuge in statism can neither defend freedom nor facilitate human flourishing.

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