Free Market Capitalism And Democratic Socialism Cannot Coexist
In The Telegraph Janet Daley writes that America’s presidential election is important well beyond the borders of America. It is a debate about the sustainability of what the oft-fetishized political “middle” wants, which is a democratic socialist welfare state alongside free market capitalism.
Last week’s Republican national convention sharpened what had been until then only a vague, inchoate theme: this campaign is going to consist of the debate that all Western democratic countries should be engaging in, but which only the United States has the nerve to undertake. The question that will demand an answer lies at the heart of the economic crisis from which the West seems unable to recover. It is so profoundly threatening to the governing consensus of Britain and Europe as to be virtually unutterable here, so we shall have to rely on the robustness of the US political class to make the running.
What is being challenged is nothing less than the most basic premise of the politics of the centre ground: that you can have free market economics and a democratic socialist welfare system at the same time. The magic formula in which the wealth produced by the market economy is redistributed by the state – from those who produce it to those whom the government believes deserve it – has gone bust. The crash of 2008 exposed a devastating truth that went much deeper than the discovery of a generation of delinquent bankers, or a transitory property bubble. It has become apparent to anyone with a grip on economic reality that free markets simply cannot produce enough wealth to support the sort of universal entitlement programmes which the populations of democratic countries have been led to expect. The fantasy may be sustained for a while by the relentless production of phoney money to fund benefits and job-creation projects, until the economy is turned into a meaningless internal recycling mechanism in the style of the old Soviet Union.
I’ve been rather blunt about my utter lack of enthusiasm for Mitt Romney’s candidacy, but what excited me about Romney’s ticket was the addition of Paul Ryan. Ryan, whatever his imperfections, is perhaps one of the most forthright political leaders in the nation when it comes to talking about our problems with entitlements. Having Paul Ryan in the race almost guaranteed that entitlements would become an issue during the race as well.
I hope that’s true. We cannot go on as we are. It’s not a matter of politics or ideology. It’s a matter of math. It doesn’t add up. Our government can’t afford the social entitlements it has obligated itself to provide. What this election may test is whether or not Americans are ready to come to grips with that reality, or if we’re intent on living in a fairy tale for a few more years.