Francis Fukuyama’s recent opinion essay in The Wall Street Journal, “The Fall of the Libertarians,” reflects the pessimism of many conservatives and libertarians these days. An old friend and long-time Heartland supporter, who I will call “Bruno” (since that is his name), told me over dinner that our cause was virtually lost. We have lost the culture war, said Bruno; government is advancing everywhere, and freedom is everywhere in retreat.
A few days later I heard much the same thing over lunch with another old friend, Heartland’s founder, Dave Padden. The War on Terrorism, he said, has accelerated our descent into statism. We are living in “a police state in waiting,” said Dave. Civil offenses have become criminal offenses, and state and local crimes have become federal crimes. Any one of us could be arrested at any time, so fine is the web of laws in which we are now enmeshed.
It is precarious business making general statements about whether freedom is gaining or retreating. There are many fronts in this war, and not all of them of equal strategic importance. In last month’s essay (“Four Attacks on the Rule of Law”), I described one arena where we are losing ground. In the remainder of this month’s essay, though, I will describe six battles where freedom is winning.
Public Morals
Bruno lamented the moral collapse of the nation: the loss of honesty, integrity, truth seeking, etc. Certainly we see signs of this in the popular culture: in the lyrics of rap music, for example, and in surveys of young people showing a willingness to lie and cheat to get ahead.
Yet there is compelling evidence on the opposite side. Since 1980, teen pregnancy rates, divorce, abortion, welfare caseloads, and crime all stopped rising and in some cases have fallen dramatically. Religious scholars say we are in the midst of “the fourth great awakening,” a widespread resurgence of religiosity manifested in higher church attendance, more people reporting religion is important in their lives, and more engagement by religious people in politics. Evangelical faiths are reporting the fastest growth.
Size of Government
Every good libertarian knows government keeps getting bigger, right? Wrong. Government spending (at all levels) as a percent of national income is down from 41 percent in 1992 (its highest point since World War II) to 34.7 percent in 2000. If not for 9-11, that figure was expected to fall to 32.3 percent by 2006. Government’s take in 2001 was about the same as it was in 1970.
Fitting a curve to the data reveals we’re well past the inflection point and into the declining part of the curve. As libertarian James Rolph Edwards wrote recently, “Since about 1980, however, the ideological and political grip of statism has begun to loosen. Statist policies of regulation and income redistribution have visibly failed. Slowly, some of the statist fetters have been lifted from the economy, allowing entrepreneurship and economic growth to continue.”
Government isn’t getting smaller: The economy is just outgrowing it. Real government spending grew 3.1 percent a year in the 1980s and only 1.3 percent in the 1990s. Meanwhile, the economy (GDP) grew at the rate of 3.2 percent in both the 1980s and the 1990s. (Consumption grew an average of 3.4 percent a year during both decades.)
Economy
Remember double-digit inflation during the 1970s? The average annual rate of inflation in the 1980s was 5.1 percent; in the 1990s, 2.9 percent. A democratic capitalist society has learned to keep its hands off the printing press. This is a tremendous victory for workers and investors.
The average annual unemployment rate in the 1980s was 7.3 percent; in the 1990s, 5.8 percent. In recent years unemployment has been even less. In 2000, the percent of the U.S. population living in poverty hit its lowest level since records were first kept. This is due partly to tax reform, which has lowered marginal income tax rates for most income categories, and welfare reform, which ended the federal entitlement to aid and rewarded states that impose work requirements.
The national economy is becoming increasingly recession-proof. From 1880 to 1940, the U.S. economy was in recession about 45 percent of the time; between 1940 and 1955, 30 percent of the time; and since 1955, only 15 percent of the time. The recession of 2001 was one of the shortest and most shallow of all time. Our new digitized and global economy seems more resilient to external shocks and government mismanagement.
Regulation
Regulation is a trillion dollar weight on the national economy. The number of pages in the Federal Register grows each year along with the number of bureaucrats in charge of interpreting and imposing them. But deregulation of railroads, trucking, telecommunications, and airlines has saved consumers hundreds of billions of dollars.
Globalism and the digital economy are limiting the ability of governments to impose restrictions and making compliance less costly. The Left is gravely alarmed by this. Lester Thurow, for example, laments, “The era of national government regulation of business is simply over. Activities go where they are unregulated and often that relocation can happen without anyone physically moving.”
The high-tech boom and the explosion in imports and exports during the 1990s were fueled by entrepreneurs attracted to lightly regulated areas of the economy. While there is a battle underway to keep it that way (this is why the Microsoft case is so important), the nature of these industries makes it difficult for regulators to do much damage and gives politicians compelling reasons to call for abolishing trade restrictions and century-old antitrust laws.
War and Peace
Defense spending in 2001 was about 3 percent of GDP, lower than at any time since the Great Depression. On September 11, the nation experienced attacks on New York and the Pentagon that were comparable in many ways to the attack on Pearl Harbor, and yet there are no calls for conscription, no domestic interment camps for Arabs, no wage and price controls. Despite neo-conservative calls for a new war to create a new sense of national mission, and despite paleo-conservative warnings of a “clash of civilizations,” the U.S. military response has been measured, multilateral, and limited.
The President says he wants to fund higher military spending by cutting domestic spending so that government does not grow any larger overall. His budget director predicts a return to budget surpluses in a year or two. Will those promises be kept? Probably not, but the difference in mood and ideology between 1941 and today is striking … and very promising for freedom.
Education
In the 1960s everyone agreed public schools were terrible, but the only people willing to support privatizing them were segregationists in the South. Their scam voucher bills forced the U.S. Supreme Court to rule against vouchers and other kinds of privatization for a generation. We are finally leaving this sordid chapter behind, and the prospects for privatization have never been better.
Opinion polls show 60 percent or more of the public support vouchers. Pilot programs demonstrate that parents want choice, private schools want students, and students perform better when their parents choose the schools they attend. This summer, if the Court rules in favor of Cleveland’s voucher plan, the floodgates will open and hundreds of thousands, and soon millions, of kids will escape from public schools.
The private schools these kids enter will not be completely unregulated … but then, private schools in the U.S. have never been completely unregulated. Vouchers will, however, lead to less regulation over time because competing schools are much more difficult to organize for political gain than a protected cartel. We are on the road to returning to the way schooling in the U.S. was delivered from 1640 to 1850, primarily by private schools that received public subsidies to educate the children of the poor.
No Rest Stops Ahead
There are no rest stops on the road to freedom, because big-government advocates never stop trying to impose their wills on the rest of us. We are not lost … but neither are we “almost there yet.”
With all due respect to Bruno and Dave, I am optimistic about future’s freedom. We’ve turned the corner on some very important issues, and the fruits of liberty are helping to build a broad public constituency for more.
We need to get government down to 25 percent of our income, around the level it was in the 1950s. We need to finish what we’ve started in the areas of regulation and education. And we must stem the erosion of the Rule of Law that is threatening to undo all our hard-fought victories.
These are huge challenges, but they should not prevent us from seeing the progress we’ve already made. “The era of big government” really is over.
