"The popular perception is that
Ronald Reagan ushered in a "revolution" in government – an
essentially libertarian one, in which the federal government was no
longer viewed as the solution to problems, but was viewed as itself a
problem.
"This popular perception is wrong. Reagan was no libertarian and did
nothing to bolster libertarianism. Instead, he grew government and, if
anything, stifled the libertarian movement by bringing libertarians and
small-government conservatives into his coalition, getting their votes
but giving them practically nothing in return."
Reagan: No Revolution
by Jacob H. Huebert
This article is excerpted from
Libertarianism Today, by Jacob H. Huebert.
The popular perception is that Ronald Reagan ushered in a
"revolution" in government – an essentially libertarian one, in
which the federal government was no longer viewed as the solution to
problems, but was viewed as itself a problem. This revolution was even
seen as outlasting Reagan, reflected in Bill Clinton’s declaration that
"the era of big government is over." Only with the election of
Barack Obama, pundits opined, did Americans cast off the anti-government
ideology that had held sway since Reagan took office.
This popular perception is wrong. Reagan was no libertarian and did
nothing to bolster libertarianism. Instead, he grew government and, if
anything, stifled the libertarian movement by bringing libertarians and
small-government conservatives into his coalition, getting their votes
but giving them practically nothing in return.
First, there are the obvious ways in which Reagan was not a libertarian.
His religious-right supporters favored much anti-libertarian moral
policing, and Reagan paid them back for their support. Reagan drastically
escalated the war on drugs, as the percentage of inmates in federal
prison for drug offenses increased from 25 percent to 44 percent during
his two terms. And he pursued an interventionist foreign policy by, among
other things, putting troops in Lebanon, supporting Saddam Hussein in
Iraq, and meddling in Nicaragua in the Iran-Contra matter.
One area in which Reagan did claim to favor personal freedom while
running for office was draft registration: he promised to end it on the
grounds that it "destroys the very values that our society is
committed to defending." By 1982, however, he officially reversed
positions because, he said, "we live in a dangerous world." (Of
course, it was a world made all the more dangerous by Reagan’s own
nuclear escalation –
another
offense against libertarianism.)
Despite all that, Reagan at least favored relatively free-market
policies, didn’t he? Not at all, if one looks at results instead of
rhetoric. Although Reagan claimed at times to support free trade, the
portion of imports facing restriction
increased
100 percent over the course of his two terms. Reagan railed against
government spending and deficits while running for office, but both
became far worse under his watch. In 1980, the final year of Jimmy
Carter’s term in office, government spent $591 billion and ran a $73.8
billion deficit. In 1988, the final Reagan year, government spent over $1
trillion, and ran a $155 billion deficit.
True, those figures aren’t adjusted for inflation – but the need to
adjust only shows that Reagan failed to defeat inflation, too (even if,
in fairness, Federal Reserve Chairman Paul Volcker did control it better
than his 1970s predecessors). Reagan had promised to restore the gold
standard, and on taking office he appointed a commission to study the
issue. But that group consisted almost entirely of people who were
already known to oppose the gold standard – so its anti-gold findings
were a foregone conclusion, no change in monetary policy resulted, and
the dollar continued to lose value. (Ron Paul and Lewis Lehrman were on
the committee and published a minority report,
The Case for Gold, which remains in print.) Former Federal
Reserve Chairman Alan Greenspan – a leading culprit in the economic
crisis that slammed the American economy about twenty years after Reagan
left office – was first appointed by Reagan and is therefore another part
of Reagan’s anti-libertarian legacy.
One might think that Reagan deserves at least a modicum of libertarian
appreciation for being a tax cutter, but this is wrong on two
grounds.
First, increasing spending while cutting taxes is not libertarian. If the
government spends more than it takes in, it will have to print or borrow
the money to make up the difference. If the government prints the money,
then taxpayers suffer an "inflation tax" that may be even more
destructive than an ordinary tax. If the government borrows the money,
then future citizens will have to repay the loans through future taxes or
inflation (unless the government repudiates the debt). And, of course,
all government spending siphons resources from the private sector, which,
in turn, results in fewer consumer goods produced, which makes society
worse off.
Second, Reagan did not effectively cut taxes. Reagan did sign a tax cut
in 1981, which went mostly to the wealthy minority, but this cut was
immediately offset by an increase in Social Security taxes and by the
effects of "bracket creep," as inflation pushed people into
higher tax brackets. (Also, rather than take the libertarian step of
eliminating mandatory social security, Reagan "saved" it by
forcing working people to pay more.) After that, Reagan continued to
effectively raise taxes by "closing loopholes" over the course
of his presidency. No wonder, then, that government revenues increased
from $517 billion in 1981 to $1.031 trillion in 1989 – not what one would
expect under a libertarian regime committed to cutting government.
What about deregulation? The major deregulations for which Reagan is
sometimes credited – oil and gas industry deregulation, airline
deregulation, trucking deregulation – were in fact enacted under the
Carter Administration, which was perhaps more libertarian than the Reagan
Administration, if results count. Carter’s deregulation conveniently took
effect just in time for Reagan to take credit. But as
Murray
Rothbard put it, "The Gipper deregulated nothing, abolished
nothing. Instead of keeping his pledge to abolish the departments of
Energy and Education, he strengthened them and even wound up his years in
office adding a new Cabinet post, the Secretary of Veterans
Affairs."
Reagan and the Libertarian Movement
So the Reagan years were bad for liberty – and
they were also bad in many respects for the libertarian movement.
Anti-government sentiment had grown during the 1970s as a result of
various factors, including Vietnam, Watergate, and disastrous economic
policies. Reagan tapped into this anti-government sentiment and then used
his position not to advance liberty but to restore respect for
government and prompt a resurgence of militarism and flag-waving
nationalism – a conservative’s dream, perhaps, but an anti-state
libertarian’s nightmare.
Worse, many libertarians were sucked into the administration’s orbit
early, optimistic because of Reagan’s apparent sympathy for libertarian
ideas. Some of these libertarians became disillusioned and left
Washington, but others adjusted their priorities to fit in and became
part of the Establishment. Surveying the damage after eight years,
Rothbard charged that "intellectual corruption" among (former
or quasi-) libertarians "spread rapidly, in proportion to the height
and length of [their] jobs in the Reagan Administration. Lifelong
opponents of budget deficits remarkably began to weave sophisticated and
absurd apologias, now that the great Reagan was piling them up, claiming,
very much like the hated left-wing Keynesians of yore, that ‘deficits
don’t matter.’"
Some libertarians did not join the government, but moved closer to it in
hopes of gaining influence. Most notably, the Cato Institute moved its
headquarters from San Francisco to Washington, DC in 1981. The move did
raise the profile of the organization and its people, but Rothbard and
other libertarian critics outside Washington have charged that they
watered down the message at times to maintain beltway respectability and
to appease wealthy benefactors who seek influence, most notably their
foremost patrons (to this day), oil billionaires
Charles and
David Koch. Most significantly, on its move to Washington, Cato
promptly and deliberately moved away from the pure free-market economics
of the Austrian School in favor of more mainstream approaches, and with
this also curbed criticism of the Federal Reserve, which at least until
recently was the ultimate taboo in Establishment circles. Criticism of
aggressive Republican foreign policy became somewhat muted as well, if
not so completely abandoned. And where earlier libertarians had sought
radical goals, the new Beltway libertarians increasingly promoted
"public policy" compromises such as school vouchers and
so-called private social security accounts.
Three decades later, some libertarians’ decision to latch onto Reagan and
enter the mainstream Washington "public policy" business do not
seem to have borne much fruit. Liberty has not advanced as a result, and
it is questionable whether its decline has even been slowed. The enormous
growth of government under George W. Bush testifies to the failure of
this strategy. Lamentably, even after all this, some libertarians who
know better
continue to invoke Reagan as if he set a good example.
http://www.lewrockwell.com/huebert/huebert32.1.html
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