Bryan Caplan  

If Only: A Review of Arthur Brooks' The Battle

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According to Arthur Brooks' latest book, The Battle, a vocal social democratic minority in U.S. politics keeps foisting its misguided policies on a solid free-market majority:
Whether we look at capitalism, taxes, business, or government, the data show a clear and consistent pattern: 70 percent of Americans support the free enterprise system, and are unsupportive of big government.  By contrast, somewhere between 20 and 30 percent of the adult population opposes free enterprise and prefers government solutions to our problems.
The problem was clear even under Bush, but since the 2008 crisis, the split between the free-market policies Americans want and the socialist policies they get has become a chasm. 
The truth is that the American electorate did not repudiate free enterprise or conservative principles in November 2008.  Rather, it punished an unprincipled Republican party.  American politics had not become too conservative for the American appetite.  Rather, American politics had strayed too far from its free enterprise values.
The values that Brooks expresses in The Battle are eerily similar to my own.  I really wish this book were right from cover to cover.  But I'm afraid that Brooks' analysis of public opinion is deeply mistaken.  While the median American is almost certainly more pro-market than the median European, he's still a social democrat.  And while recent policies are probably a little more statist than the median American prefers, the statist quo is very popular.

Brooks' whole book revolves around his 70/30 claim: 70% of Americans are pro-market, and just 30% are anti-market.  His data work seems OK as far as it goes, but he ignores three key problems. 

First, Americans only seem staunchly pro-market at the most abstract and symbolic level.  On most specific policy issues, the pattern reverses.  Americans favor as much or more government spending on almost everything.  Only 41% of Americans are against or strongly against "control of prices by legislation."  (GSS variable identifier SETPRICE)   Only  21.3% are against or strongly against "supporting declining industries to protect jobs."  (GSS variable identifier SAVEJOBS)  Just 15.7% disagree or strongly disagree with the view that "America should limit the import of foreign products in order to protect its national economy." (GSS variable identifier IMPORTS)  All things considered, the best you can say about the American public is that it pays lip service to free enterprise.

Second, even lip service to free enterprise is partly an illusion created by binary response options.  If Americans have to choose between free markets or socialism, 70% or so prefer free markets.  But if you offer them intermediate choices, the picture changes.  Brooks mentions that Americans are most supportive of capitalism when you call it "free enterprise"; I'd guess that "private enterprise" is an equally lovable label.   But when the GSS presents the statement, "Private enterprise is the best way to solve America's economic problems," the breakdown is 16.3% strongly agree, 37.1% agree, 32.4% neither agree nor disagree, 12.5% disagree, and 1.8% strongly disagree.  (GSS variable identifier PRIVENT)   For a less favorable label like "capitalism" or "free markets," the median American would almost certainly be neutral.  On a balanced question, I'd guess a lip service breakdown more like 35% pro-market, 40% neutral, and 25% anti-market.

Third, even self-styled pro-market Americans are normally only relatively pro-market.  What fraction of "pro-market" Americans want to substantially cut - much less abolish -  Social Security and Medicare?  They're the nation's largest social programs, their moral and market failure rationales are flimsy at best, but almost everyone loves them. 

Once you take a more realistic view of American public opinion, there's not much of a split between the policies voters want and the policies voters get.  Even the 2008 bailout looks fairly popular if you include an intermediate response option.  I wish it weren't so, but if the American public wanted free-market policies, they'd have them.  The point of free-market philosophy is not to defend public opinion, but to change it.

There's plenty in The Battle to like.  Brooks defends free markets against unfair accusations, points fingers at Republican complicity in the growth (2001-7) and sudden explosion (2008) of government, and rhetorically sidelines social conservatives.  If he were a typical American, I'd be overjoyed.  Alas, Brooks is all too exceptional.


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COMMENTS (11 to date)
beezer writes:

Words do matter. I think "free markets" should be banned from adult discourse. Like the "invisible hand," neither exists except in someone's theories.

Competitive markets is probably the right phrase. Americans understand competition, and they know firsthand that competition is not the same as saying "fair" much less "free." In other words they do understand the nuances.

Now if only economists (and pollsters) would understand as well.

Mercer writes:

"Americans only seem staunchly pro-market at the most abstract and symbolic level. On most specific policy issues, the pattern reverses."

I agree. The Medicare drug program, which was put into law by the "limited government" party, illustrates the point.

The Washington Post had a long excerpt form the book on Sunday. The piece was all abstract rhetoric about how free markets are better. There was nothing about how to deal with the current situation or how to prevent future housing bubbles and financial panics. Anyone reading it would be justified in thinking that AEI is useless when it comes to making government economic policy.

Boonton writes:

Anyone remember the Republican that demanded the government "get out of the way" of Medicare?

Rebecca Burlingame writes:

The word capitalism could go by the wayside, so could the term free markets. But doesn't competitive markets imply the same thing? All of the above to me represents voluntary economic association. Perhaps this ideal is lost because the words seems to mean what institutions and corporations do, as opposed to individuals. And individuals don't always get to have voluntary economic associations in real life, as more and more people reflect the economic gridlock of the macro picture by creating economic gridlock in their own community.

Individuals would like the chance to create something better than Social Security and Medicare. But the freedom to do so is scary, at least to some. Even so, something has to be created that is better than those government programs before they can finally be phased out.

Patrick writes:

Arnold Kling needs to read this post over and over and over again until he realizes the electorate is the problem, not the political elite. With this kind of incoherence in public opinion, how could a prudent government possibly survive?

Doc Merlin writes:

@Patrick:

The political elite creates the incentive structure that molds the electorate's behavior. A great example of this can be seen in the drastic change in american's saving patters as a result of the inflation in the 70's.

mulp writes:

I note that a lot of people are not crying for more free market profit maximizing capitalism in the Gulf as they watch the oil wash up into the marshes and shutdown fisheries.

In fact, I hear lots of those who recently called Obama an evil socialist now blaming him for not stopping BP from drilling in 5000 feet of water and not dictating how to do the drilling.

And blaming Obama for failing to stop the leaking oil well by having government take over.

Please tell the American people that the free market is great, and that the oil on the beaches is a good thing because that is the least cost solution to $4 a gallon gasoline.

Patrick writes:

@Doc Merlin

I don't think you're necessarily wrong in principle, but you've chosen a poor example. Inflation barely broke 13% in the US whereas it rose much higher in other countries where the savings rate didn't collapse. UK inflation reached 25% in 1975.

Les writes:

All of us have friends who are intelligent and who have achieved success in their chosen fields. But - unless they have a great deal of education and experience in economics - they tend to be ignorant and naive about economics, regardless of how confident they may feel about their economic understanding.

Therefore it seems impossible to expect much sense from public opinion on economic issues - public opinion is likely to be superficial at best, and often in error but seldom in doubt.

David writes:

"Competitive markets is probably the right phrase."
I think the essence of free markets is more like free exchange between entities, not competition. You can have a free market with two people. Maybe with three you can have a government butting in and interfering with the market.

grmorrison writes:

I really like Brook's book. Judging from the dust jacket, the author is apparently considered an intellectual by what appears a fairly thin margin of the right wing elite but his writing exhibits little familiarity of the analytical apparatus or theoretical formulations of modern sociology, psychology, historiography, aesthetics or even statistics for that matter. It is as if he expects the market to mirror his idealization of it rather than the reverse. This might have played very well with a popular audience in say, 1951. If this book is any indication of the state of right wing polemic, they are in for a bumpy ride.

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