Saturday, May 30, 1998

Marx, Buchanan sell America short

By WILLIAM A. RUSHER / Newspaper Enterprise Assn.

There's a new biography of John D. Rockefeller Sr. out, and in it, the author, Ron Chernow, demonstrates convincingly that whatever else the old fellow was, he was no lover of free enterprise.

As Rockefeller viewed it, the American oil industry in the third quarter of the last century was little more than a snake pit in which competing producers, refiners and carriers conducted a Hobbesian war of all-against-all, to the ultimate benefit of none.

Rockefeller's great contribution, of which he was nothing if not proud, was to organize the industry under a single head (himself, through Standard Oil). By 1900, the production, refining and transportation of oil had been unified and regularized as a single vast enterprise, and Rockefeller was on his way to a fortune about four times as big, in purchasing power, as Bill Gates'. The only losers were the competing oil entrepreneurs who wouldn't agree to sell out to him.

As the New York Times Sunday book reviewer points out, Rockefeller's attitude toward economics bears certain striking resemblances to that of Karl Marx's. Both men loathed the messy idea of unfettered competition and longed for a more disciplined and orderly system. Their chief difference was that Marx wanted that system run by the state, whereas Rockefeller wanted it run by companies like Standard Oil.

Ever since Marx's theory got its historic shellacking by the proponents of free enterprise in the last three decades of this century, various ingenious critics of the latter have been casting about for some alternative. Interestingly enough, the critics have included a number of prominent conservatives.

Oxford's John Gray, for example, has begun warning against the powerful destructive qualities of "the market." And in our own country, that redoubtable right-winger Pat Buchanan has been inveighing against "free trade" and calling for the imposition of tariffs, to prevent America from being flooded with imports made abroad by cheap labor, to the detriment of American workers.

It isn't difficult to detect, in Buchanan's analysis, a whiff of old John D.'s longing for a nice, tidy national economy, carefully buffered against the chill winds of competition — in this case, foreign competition. And sure enough, in a speech to Detroit's Economic Club recently, Pat called Karl Marx "an insightful fellow" who correctly predicted that free trade "would tear societies apart."

Now what's going on here? Modern American conservatism consists of two major strands: a "traditionalist" strand, rooted in the great philosophical verities of the Judeo-Christian tradition, and a "libertarian" strand, stemming from the Enlightenment and stressing the virtues of political and economic freedom. It is the latter freedom — alternatively called "laissez-faire economics," "free enterprise," or "a market economy" — that is now coming under fire.

Advocates of economic freedom would do well to recognize and admit it is indeed a mighty sword that will cut down and destroy anything that stands in the way of legitimate economic gains. If buggy-whip manufacturers must go to the wall because cars have replaced horses, so be it. If the American textile industry, or any other industry, simply cannot compete with foreign manufacturers because of the latter's lower labor costs, then such industries will inevitably shift to foreign bases or give way to competitors already there. If the entire world must beat a path to Silicon Valley, and send its most talented sons and daughters to work there, that's the tribute the world must pay to excellence.

This whole problem has grown acute recently, thanks to technological progress. Ease of communication and transportation is shrinking the globe to a village. Economic activities spill over national borders effortlessly. The process is unquestionably painful, but it is also inevitable.

To imagine the United States could wall itself off from these events, and reconstruct an America economically sufficient unto itself and independent of all others, is sentimental folly.

Besides, we would pay a tremendous price, in higher costs and fewer choices. Freedom, whether economic or political, is for the brave. Why should we fear competition? In the words of J. P. Morgan, "Never sell America short."

William A. Rusher is a Distinguished Fellow of the Claremont Institute for the Study of Statesmanship and Political Philosophy.