On the Right

Rougemont, Mar. 26—The financial crisis brings to mind the limitations of material idealism. The swaggering talk over the last generation about the responsibilities of the rich nations to the poor nations, about the need to spend fifty, a hundred, two hundred billion dollars to rebuild our cities, about our common responsibility to provide for each other’s welfare, from the cradle to the grave: breaks down for lack of a couple of billion dollars. Literally. If the United States had earned a couple of billion dollars more last year, or spent that much less abroad, the crisis would not likely have erupted. It was building over a long period, and indeed is still building. But there is the straw that breaks the camel’s back, and it is melancholy to face the fact that big-talk idealism has to submit, in the real world, to the measuring stick, and the accounting book.

It has been a thesis of classical economics stressed and restressed over the years, that somehow, in some way, a people is going to have to pay for its extravagances. Consider what is now in prospect for Great Britain. Because the Labor government has failed to take those measures which alone would substantially increase England’s competitive prowess—primarily a reduction in the cost of government and in the cost of production: that is to say, less government, and less labor unions—England has talked itself into a situation which now augurs, hold your breath, an interest rate of 10 per cent. That fantastic rate of interest is an affront on one of the most cherished dogmas of the economic interventionists. Lord Keynes at one point singled out cheap interest rates as perhaps the central consideration, above all others, for the happy functioning of the economy. The hardship of an interest rate set that high can only be imagined by those who have had the dream of a private house dashed by the cost of borrowing the money.

About the Author

William F. Buckley Jr.

William F. Buckley Jr. founded National Review magazine in 1955.

Featured Tags

Presidential Election

Labor Unions

Communism

Rougemont, Mar. 26—The financial crisis brings to mind the limitations of material idealism. The swaggering talk over the last generation about the responsibilities of the rich nations to the poor nations, about the need to spend fifty, a hundred, two hundred billion dollars to rebuild our cities, about our common responsibility to provide for each other’s welfare, from the cradle to the grave: breaks down for lack of a couple of billion dollars. Literally. If the United States had earned a couple of billion dollars more last year, or spent that much less abroad, the crisis would not likely have erupted. It was building over a long period, and indeed is still building. But there is the straw that breaks the camel’s back, and it is melancholy to face the fact that big-talk idealism has to submit, in the real world, to the measuring stick, and the accounting book.

It has been a thesis of classical economics stressed and restressed over the years, that somehow, in some way, a people is going to have to pay for its extravagances. Consider what is now in prospect for Great Britain. Because the Labor government has failed to take those measures which alone would substantially increase England’s competitive prowess—primarily a reduction in the cost of government and in the cost of production: that is to say, less government, and less labor unions—England has talked itself into a situation which now augurs, hold your breath, an interest rate of 10 per cent. That fantastic rate of interest is an affront on one of the most cherished dogmas of the economic interventionists. Lord Keynes at one point singled out cheap interest rates as perhaps the central consideration, above all others, for the happy functioning of the economy. The hardship of an interest rate set that high can only be imagined by those who have had the dream of a private house dashed by the cost of borrowing the money.