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Thursday, February 6, 2014

David Brooks, The Whigs, and Corporate Welfare - Thomas J. DiLorenzo

Mises Daily: Thursday, February 06, 2014 by Thomas J. DiLorenzo
In a January 30 column David Brooks, the house neoconservative of the New York Times, urged Obama to ignore both his socialist/egalitarian base and the “conservative tradition that believes in limiting government to enhance freedom.” 

Obama already has nothing but hateful contempt for the latter tradition and needs no convincing by a right-wing statist like David Brooks.

The president should also abandon his life-long infatuation with and devotion to socialism as well, advises David Brooks. In its place he should pursue an agenda of crony capitalism disguised as a “social mobility agenda” with the help of professional propagandists and perverters of American history such as Brooks and his fellow neoconservatives. Of course, Brooks doesn’t use these less-than-flattering words to describe his Machiavellian agenda. He talks of “a third ancient tradition” in American history, namely, “the Whig tradition, which begins with people like Henry Clay, Daniel Webster and Abraham Lincoln.”

Either Brooks knows nothing at all, whatsoever, about the Whig Party tradition in American history, or he is lying through his teeth about it. For he describes it as having been devoted to “using the power of government to give marginalized Americans the tools to compete in a capitalist economy.” 

The Whigs, says Brooks, “fought against the divisive populist Jacksonians” who supposedly sought to “pit classes against each other.” Every bit of this is exactly the opposite of the truth. The Whigs were the party of crony capitalism, of government of plutocracy, by the plutocracy, for the plutocracy. That is why so many historians have marveled over how a man like Abe Lincoln, who grew up so poor, would become the political water carrier for the Northeastern moneyed elite in American politics.

The most divisive economic issue in American politics during the heyday of the Whig Party (1832–1852) was the battle over free trade versus protectionism. If the Whigs stood for anything, they stood for corporate welfare in the form of high protectionist tariffs that would plunder the masses for the benefit of the few. 

This meant, for the most part, plundering Southern farmers more than anyone for the benefit of Northern manufacturers who would be protected from international competition by the high tariffs. As John C. Calhoun once said, what “protectionism” protects the public from is low prices. Next to slavery, protectionism was the biggest assault on property rights in America during the first half of the nineteenth century. The Whigs did not believe in “sacred” property rights, as Brooks foolishly writes. Their entire political agenda was based on the government-enforced attenuation of property rights for the benefit of the wealthy and politically-connected.

Next to political plunder through protectionism, the Whigs stood for the worst sort of crony capitalism in the form of needless corporate welfare for road-, canal-, and railroad-building corporations. This was euphemistically called “internal improvement subsidies” at the time. Private capital markets financed thousands of miles of private roads during the first decades of the nineteenth century. As of 1800 there were 69 privately-financed road-building companies in America that would build more than 400 private roads over the next 40 years, as economist Daniel Klein has documented. 

The great railroad entrepreneur James J. Hill also proved that government subsidies were not needed to build a transcontinental railroad as he and his investors and business partners built and managed the Great Northern Railroad without a dime of government subsidy, not even “land grants.”

When the Whigs did get their way and conned state government into funding “internal improvement subsidies” it was an unmitigated financial disaster. Very few, if any, projects were ever finished; taxpayers were stuck with enormous government debts to pay off; much of the money was simply stolen; and by 1860 every state except for Massachusetts had amended its constitution to prohibit the use of tax dollars for corporations with which to do anything, according to economic historian Carter Goodrich.

Edgar Lee Masters, the famous 1930s-era poet, playwright (author of The Spoon River Anthology), and law partner of Clarence Darrow, perfectly described the Whig Party on page 27 of his book, Lincoln the Man

Describing the leader of the Whigs, Henry Clay, Masters wrote:
Clay was the champion of that political system which doles favors to the strong in order to win and to keep their adherence to the government. His system offered shelter to devious schemes and corrupt enterprises. ... He was the beloved son [figuratively speaking] of Alexander Hamilton with his corrupt funding schemes, his superstitions concerning the advantage of a public debt, and a people taxed to make profits for enterprises that cannot stand alone. His example and doctrines led to the creation of a party that had no platform to announce, because its principles were plunder and nothing else.

This is exactly correct, and exactly the opposite of what David Brooks wants his New York Times audience to believe. Clay’s agenda, which Alexander Hamilton originally labeled “The American System,” was really an Americanized version of the corrupt mercantilist system the American founders had fought a revolution against. The Hamilton/Clay/Lincoln “American System” included protectionism, corporate welfare, and a central bank to dispense even more corporate welfare subsidies to politically-connected businesses. It was a recipe for political power based on using taxpayer dollars to line the pockets of the (mostly Northern state) business plutocracy at the expense of the general public. Some things never change in a democracy. MORE->