The deck seems stacked against those of us who favor free markets. The free-market economy can produce astonishing growth for decades, with only brief, minor interruptions. But these minor interruptions can become the pretext for significant government intervention. And when a major crisis comes along, every 70 years or so, it becomes the basis for a massive increase in government entanglement in the economy.
This phenomenon isn’t difficult to understand. In a democratic society, the temptation to limit the economic freedom of the well-to-do, and to expropriate their wealth, is great. The temptation is kept in check only because our economic system produces such positive outcomes. Any decline in the outcomes revives the temptation, and a precipitous decline causes it to mount stilts.
This dynamic helps us understand the two faces of conservatism: optimistic and pessimistic. The Reagan-style optimist fixates on the capacity of our free-market system to produce wonderful outcomes. The pessimist fixates on the fact that, in our democracy, we may be only a few bad quarters away from socialism. The realistic conservative doesn’t fixate on either reality but always keeps both in mind.
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