AEI’s Arthur C. Brooks always manages to see the world from a fresh prospective, one that is buoyed by first principles. A manifestation of this is his latest book, The Battle: How the Fight between Free Enterprise and Big Government Will Shape America’s Future. Brooks, the president of the American Enterprise Institute, talks about The Battle — and the future — with National Review Online’s Kathryn Jean Lopez in this two-part interview.
KATHRYN JEAN LOPEZ: Culture war? Didn’t we evolve beyond such talk somewhere around a Pat Buchanan speech at a Republican convention?
ARTHUR C. BROOKS: For many, that 1992 convention speech defined the term “culture war.” But what I’m talking about is a new culture struggle — one fought not over guns, gays, and abortion but over the core characteristic of America: free enterprise. In my book I don’t just demonstrate that free enterprise is the most efficient way of organizing an economy (which it is). I also show that it’s an expression of American values, and, thus, that a fight for free enterprise is very much a fight for our culture.
LOPEZ: Has President Obama made Americans less happy? Is it even fair or reasonable or constructive to ask such a question?
BROOKS: Happiness is important to discuss. The opponents of free enterprise always claim they will make America a happier nation, and we always lamely respond with arguments about economic efficiency. Yet in truth, the better prescription for happiness is on our side, not theirs.
Redistributionists always make the argument that relative income is a huge driver of unhappiness — that poorer people are unhappier than richer people simply because they have less money through no fault of their own — and thus we can get a happier, fairer society by equalizing incomes. This is based on a colossal misreading of data and a whole lot of ideology. The truth is that relative income is not directly related to happiness. Nonpartisan social-survey data clearly show that the big driver of happiness is earned success: a person’s belief that he has created value in his life or the life of others. Of course, in a capitalist system, earned success is often rewarded financially, so people who have earned a lot of success tend to have more money than others. But it’s the success, not the money, that does the trick. (We show this by comparing the happiness of people who have the same level of income but have different perceived success levels.)
The system that enables the most people to earn the most success is free enterprise, by matching up people’s skills, interests, and abilities. In contrast, redistribution simply spreads money around. Even worse, it attenuates the ability to earn success by perverting economic incentives. Free enterprise is essentially a formula not just for wealth creation, but for life satisfaction.
LOPEZ: Are free enterprise and big government natural enemies?
BROOKS: There are some things that government does well. When the U.S. government was fighting Nazi Germany and Imperial Japan, it was the champion of freedom in the world. It took a big government to win World War II. But it takes a smart one to realize it is only the entrepreneurialism of individuals that can deliver thriving economies and human flourishing. Government has a role, of course, such as enforcing the rule of law. But when it takes resources out of the hands of innovators and risk-takers, when it regulates small businesses out of existence, when it favors crony corporations instead of entrepreneurs, when it taxes corporations so much they move abroad — then, yes, big government becomes the enemy of free enterprise.
LOPEZ: We’re always told that free enterprise is merciless. Isn’t it the source of misery for everyone but the guys at the very top? (And of course they are guys, because everyone knows women are oppressed in the American economy.)
BROOKS: Absolutely not. The data show that a poor man who earns his success and believes he has a chance to get ahead through his own efforts — that man is happier than a “guy at the very top” who does not feel he has earned his success (or that anyone really can). And it’s as true for women as it is for men. Free enterprise does not bow to gender, class, race, or ethnicity. It rewards hard work, dedication, initiative, talent, and street smarts. It’s truly a force for liberation, not oppression.
LOPEZ: Is big government always an enemy of conservatism? And of a lot of what makes America America?
BROOKS: Well, as I said earlier, not when the government is defending American interests and liberties. But when the government takes over large parts of the economy that could be better run by the private sector, when it brings the top down simply to level outcomes, and when it picks the winners and the losers and makes markets fail, it is a problem not just for conservatives but for Americans in general. Government’s role is an important (but restricted) one: protecting the environment in which honest people can earn their success.
LOPEZ: You talk about the “soul” of America” being “at stake.” Is there even a consensus about what exactly that soul is? Do we even all want her to have a soul? And can I call her “her”?
BROOKS: By “soul” I mean the essence of what it means to be American. And yes, there is a fairly broad consensus, a shared understanding of what makes us American. In the mainstream — among at least 70 percent of Americans, according to nonpartisan data sources — there is a strong belief in liberty, equality of opportunity, and entrepreneurship. In other words, the free-enterprise system is understood as being more than an economic alternative — it is understand as being the center of our culture.
LOPEZ: What is the “30 percent coalition”?
BROOKS: The last question hinted at the answer to this one. The “30 percent coalition” is a term I coined for the minority in this country who do not like or support our free-enterprise culture, and who seek to change it for the rest of us. The 30 percent are led by the usual suspects — opinion-leaders in academia, the media, the entertainment industry, and so on. All the data available tell us these are among the most radical players in the battle against our culture of free enterprise. But adding them all up doesn’t get us to 30 percent. The ranks of the coalition are swelled by others, especially young people, who have not (yet) experienced the depressing realities of a redistributive economy. A January 2010 Gallup poll found that a majority of Americans between the ages of 18 and 34 actually hold a positive view of socialism. Which probably makes sense, since the only socialists they’ve seen are their professors at college.
LOPEZ: What’s the “Obama Narrative,” and what’s so wrong with it?
BROOKS: The Obama Narrative is the administration’s basic account of how we got into the financial crisis of 2008 and how President Obama said he would get us out of it. It blames Wall Street and weak regulation for getting us in — and promises big government and strong regulation to get us out. It’s not accurate. Ill-advised government policy was responsible for a large part of this mess (particularly the federal mandates for Fannie Mae and Freddie Mac to ramp up their lending even to people who had sub-par credit). Bigger government will not clean it up. The enterprise, initiative, and ingenuity of the American people will — if we allow these forces to work.
LOPEZ: Are you a defender of economic inequality? Isn’t it the cause of misery?
BROOKS: Unequal outcomes don’t make us miserable. Americans like success stories — they feel they can succeed, too. Misery comes from thinking you have no chance to improve your lot in life, no chance to get ahead through hard work and drive. If you approve of people getting big rewards for big efforts, that’s not defending economic inequality — that’s defending fairness. A fair system is not one that levels outcomes — it is one that rewards hard work, merit, and excellence (while penalizing free riding and laziness). Fairness is a concept that we in the free-enterprise movement have to take back.
Incidentally, none of this is to suggest that we can’t ever be in favor of minimum basic services for people, which might be necessary to allow citizens to exploit opportunity. Even Hayek noted that this is can be a legitimate competency for government. But protecting people from starvation is very different from what the welfare state increasingly focuses on today: redistribution for the sake of equality (“fairness and balance” in our tax code), social engineering (everybody deserves a mortgage, no matter how lousy his credit), and policies intended to take the downside risk out of our decisions (bailouts).
LOPEZ: You write that “People are surprisingly satisfied with their jobs in America.” How can that be so? Everyone seems to tell us otherwise.
BROOKS: I know, it’s surprising, but it’s true. A great deal of data show that Americans are overwhelmingly satisfied with their jobs, and this doesn’t depend on education or even income levels. And Americans in general are much more satisfied with their jobs than Europeans. According to the International Social Survey Programme, we are 52 percent likelier than the Germans, 42 percent likelier than the British, and about 190 percent likelier than the Spanish to say we have complete job satisfaction.
LOPEZ: Is it fair to say that conservative economic policy is as bleeding-heart as the Left portrays itself as being? That it actually could tackle poverty if truly implemented? Or is that way too simplistic and idealistic?
BROOKS: If by “conservative economic policy” you mean free enterprise, then yes. It’s absolutely about the heart. Free enterprise promotes human flourishing and individual achievement, earned success and personal well-being. These are the arguments I make in the book — and the reason some have even characterized it as a self-help book. It doesn’t tell you how to get rich or win a promotion or get elected to office or win friends and influence people. But it tells you how you can pursue happiness — and why free enterprise is the best system to make that happen. Entrepreneurs really are the New Age radicals, tapping into the transformative power that comes from striving, achieving your potential, and creating value in your own life and the lives of your loved ones. The fact that it also produces the most explosive economic outcomes, for individuals and societies alike, is secondary (although nice).
LOPEZ: How important is free trade in this new culture war?
BROOKS: It is important. Free trade has been responsible for the greatest increases in prosperity for the poor all around the globe. Since 1950, the volume of merchandise traded worldwide has increased by a factor of 27. This has led to rising living standards for the people of China, India, Brazil, and many other places in the developing world — and for Americans too. And there’s another benefit. Free trade among nations also fosters cross-cultural understanding and the growth of democracy and civil society worldwide. Unfortunately, we currently have an administration that is not clearly committed to free trade because, many argue, of its political debt to labor unions.
LOPEZ: You use the phrase “world stewardship.” How do conservatives reclaim the language of talking about these things? We’re so often buying into others’ frameworks. You’re not.
BROOKS: To me “world stewardship” means being cognizant of the fact that we are blessed in America with great abundance, having the wisdom to understand why, and then sharing the means to that abundance. I strongly believe that what will keep America strong is (1) a deep confidence that our success as a nation is earned, (2) a national willingness to share the means to prosperity — the free-enterprise system — with others around the world, and (3) an ironclad resistance to policies that will mortgage away our system from our children and grandchildren. This is world stewardship. In the book I talk a little about actual policy prescriptions that do these things, and I refer readers to works by scholars who really get it, like my colleagues Mauro De Lorenzo and Glenn Hubbard.
LOPEZ: So how do we stop America’s current slide toward Europeanization? That’s a big question, I realize.
BROOKS: One way is simply to point out the ethical differences between the Greek and the American street today. In the past month, Greek citizens have rioted and gone on strike against the government. Why? Despite the worst economic conditions in years, labor unions and state employees are demanding that others pay for their early retirements, lifetime benefits, and lavish state pensions. In America, by contrast, our tea partiers demonstrate not to get more from others, but rather against government expansion, bloated government debt, bailouts, and a government overhaul of the health-care industry. In other words, the tea partiers are protesting against exactly what the Greeks are demanding. It is a near-perfect example of American exceptionalism.
LOPEZ: Why do social conservatives need to care about the fate of free enterprise?
BROOKS: Our founders wanted Americans to be the freest people in the world, and Alexis de Tocqueville believed they had succeeded. Liberty is more than a theory, though — it is a value to be practiced. And the way we practice liberty in our workaday lives — the way we express our values as we support our families — is through free enterprise. It is fundamentally a cultural issue in itself, and bound up in what each of us sees as a moral, equilibrated life.
– Kathryn Jean Lopez is editor-at-large of National Review Online.