This piece originally appeared in the Modern Age’s print edition of Recovering the Humane Economy on January, 24th, 2022
There are few areas in life where the law of diminishing returns does not apply. Conservatives understand this well within the economic realm, where we often take trollish delight in reminding progressives that the optimal amount of pollution (say) is not zero. At some margin, the costs of eliminating putative “bads” can and will exceed the benefits, keeping Eden out of reach.
Yet the law of diminishing returns is no less potent in the intellectual and political realms. Ideas pushed to their extreme run into a parallel kind of “last mile” problem; edge cases where the costs from the attempt to achieve ideological purity begin to explode.
Libertarianism, in particular, is often presented as an ideology with no margins on which it is wrong. Complex and multifaceted issues are collapsed into a formal system that offers the illusion of intellectual clarity. Edge cases are diminished or ignored, allowing coalitional differences to be suppressed and all the major ethical perspectives—freedom, fairness, consequences, virtue, tradition—to be forced into miraculous agreement.
Libertarian-conservative fusionism can be thought of as having fallen prey to a similar fallacy. Rather than being a middle ground between libertarian views on the state and market and conservative views on morality, on closer inspection fusionism is just free-market economics paired with the assertion that a small government, market-oriented society will promote conservative social outcomes by a happy coincidence. The collapse in the fusionist consensus can thus be understood as the realization that unfettered free trade, weak labor protections, unfunded public services, lax antitrust enforcement, and rights-oriented jurisprudence have no necessary alignment with genuine conservative outcomes. On the contrary, the unrestrained market is essentially progressive in nature, “disrupting” traditional and transcendental modes of life absent countervailing institutions that push in the other direction.
Put differently, free markets can themselves suffer from diminishing returns and have margins where their influence may even be downright perverse. Similarly, as corruptible and wasteful as governments can be, there are margins where robust state capacity is absolutely essential. As a form of democratic pollution, the optimal amount of public sector waste is thus far from zero, as illustrated by the begrudging return of congressional earmarks.
This makes marginalism in some ways the ultimate Nirvana. When resources are finite, scarcity requires some trade-offs, which implies not being an absolutist. Embracing the generality of this fact makes it easier to acknowledge edge cases openly, without fear of falling down a slippery slope or being labeled a traitor who’s now obliged to throw in with the other team.
Another term for this orientation might simply be “conservatism,” given its skepticism of utopian projects and its privileging of customs and traditions that, by dint of their immanent reality, are in demonstrable harmony with existing interests. While libertarians want to debate the morality of driver’s licenses or whether heroin should be sold over the counter, conservatives are comfortable with what economists call “interior solutions”: a social equilibrium that lies between various “corner solutions” where one good is maximized at the expense of any other but that, despite its apparent messiness, obtains a deeper form of “optimal.”
In recent decades, American conservatives have tended to sound more like uncompromising libertarians than Oakeshottian, evolutionary pragmatists. That finally seems to be changing. Whether it’s the burgeoning interest in an industrial policy to counter China, or family-support programs like a child allowance, conservatives aren’t abandoning their principles wholesale so much as recognizing the existence of edge cases where the old formulas break down.
At least that was my takeaway from the recent Humane Economy symposium hosted by the Intercollegiate Studies Institute. The meeting was an opportunity for a small group of conservatives from more-to-less-libertarian backgrounds to discuss these issues candidly, in hopes of finding common ground.
On trade, for instance, there was near unanimous agreement that China’s rise presented a serious challenge to the free trade status quo, independent of one’s views on the Ricardian theory of comparative advantage. On the margin, most agreed that the U.S. will need to engage in a variety of countermeasures, from public investments to move our domestic manufacturers up the value chain to reforms designed to limit private-sector incentives to offshore production in the first place. Where we disagreed was more a matter of degree: where some favored a policy of total decoupling, others expressed cautious optimism that China would eventually liberalize given sufficient international pressure. The Panglosian view of unilateral free trade as an unalloyed good, however, was nowhere to be found.
This is not to understate the sizable differences between the various factions on the American Right. The fissions are real and growing, with conservatives increasingly held together by little more than chewing gum and a shared hatred of the Left. Yet that is all the more reason to drop our idealizations and embrace the inevitability of intra-conservative compromise. The emerging conservative realignment won’t have the internal consistency of an Ayn Rand protagonist, but so what? For conservatism properly understood, that’s a feature not a bug.
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