Classical Liberalism

It’s become fashionable for many on the right to refer to themselves as “classical liberals.” They want to associate themselves with classical liberal figures, such as John Locke and Adam Smith, along with the ideas they espoused, which are widely associated with the idea of individual liberty. Classical liberals opposed aristocratic privilege, unlimited monarchical authority, and all forms of government tyranny. Modern “classical liberals” on the right claim to carry on this tradition by following the conclusions Locke and Smith drew about the government’s role in the economy, namely that its role should be “minimal.” According to the right, this allows individuals to keep the fruits of their own labor, as well as engage in voluntary economic exchange with others, both of which are essential for any economic system that aims to promote individual liberty.

The right claims that in order to follow the conclusions of Locke and Smith, we should keep taxes low and government regulation to a minimum. If you work hard at your job to earn income for yourself and your family, you shouldn’t have this income taxed away by the government. Likewise, if an employer and an employee want to enter into a “voluntary” employment contract, they should be able to do so without the government interfering, for example by setting a minimum wage. This type of government regulation makes markets less “free.” If we want to foster individual liberty, therefore, we should oppose these policies. Instead, we should allow the economy to be guided by the “invisible hand” of the market, which not only allows individuals the freedom to engage in voluntary economic exchange, but will also foster competition, incentivize innovation, and therefore lead to socially beneficial outcomes.

Opposition to taxation and minimum wage laws, however, has nothing to do with individual liberty. Unregulated market economies create wild imbalances of economic power, which gives rise to economic injustice. This happens, for example, when individuals are forced into exploitative economic relationships in order to earn income. When these types of relationships become pervasive in a market economy, cutting taxes for the rich and opposing minimum wage laws only further widens the disparity of power between the exploiter and the exploited; in other words it gives employers greater control over their employees’ lives. Conversely, highly progressive levels of taxation and government regulation are among the most effective ways to mitigate this problem—by redistributing income from those with more power to those who might otherwise suffer injustice.

It follows that lower taxes and fewer regulations have nothing to do with letting individuals keep the fruits of their labor. Large imbalances of power between employers and employees allow employers to take home a larger share of what they could in an economy where the balance of power isn’t tilted in their favor. When this happens, employers aren’t taking home the fruits of their own labor, but the fruits of their employees’ labor—the literal opposite of what the right claims.

But this is almost beside the point. The wealth our economy generates is largely derived from the resources we inherit from society—the language, the knowledge, the technology, the institutions, and so on. Individuals living today had nothing at all to do with creating this social inheritance. Therefore, only a relatively small share of the wealth we create comes from our labor. If individuals should be entitled to the fruits of their labor, then allowing individuals to keep more than a fraction of the newly-created wealth they help generate should require additional justification, and there’s no reason to allow the rich to appropriate the bulk of this wealth for themselves.

It should also become clear that within unregulated market economies, agreements between employers and employees are often far from voluntary. No one voluntarily chooses to be exploited. No one voluntarily accepts wages that barely allow them to feed themselves and put a roof over their head. If they do, it’s because they have few other options—hardly a reason to favor “free markets.” Nor does anyone voluntarily agree to let the rich keep wealth which is derived from our social inheritance. The only reason these forms of “voluntary” exchange take place is because the “unregulated” market economy—the conditions for which are created and structured by the government, it should be noted—compels them to do so.

In this type of economic system, the idea that the “invisible hand” will magically guide the economy to benefit everyone is a joke. When we lower taxes and cut regulations, we not only further concentrate economic power in the hands of those who already have it—and consequently erode the power of employees, consumers, and communities—but we necessarily concentrate political power into the hands of the wealthy, which they use to further rig the system in their own favor and prevent the rest of society from using their government to alter the oppressive economic relationships that come to govern their lives. This is far from the type of system classical liberals like Locke or Smith believed would foster individual liberty.

Individual Liberty

According to the right, when the government taxes me, forcing me to pay for things I don’t need or want—for example, social welfare programs—the government violates my individual liberty. If people need things like healthcare, schooling, food, and housing, nobody’s stopping them from acquiring these goods in the market. Why does the government need to tax me in order to pay for them? Everyone should be free to associate with whom they want and acquire the means to provide for themselves and their families, free of coercion by others. A closer look at the economic and political system favored by the right, however, shows it’s the right who wants to violate individual liberty, not those who want to give everyone free healthcare.

The first thing to note is everyone claims to favor individual liberty. No one goes around saying they hate liberty. When the left advocates programs like Medicare for All, the point is to allow those who need healthcare to be healthy, so they can enjoy the same liberty as those who can afford private health insurance. You can’t have liberty if you’re dead or broke because you can’t afford to pay your medical bills, or because you take on tens of thousands of dollars in debt to pay for treatment.

The same principle applies to society more broadly. You can’t enjoy individual liberty if the distribution of property and power in society is such that wealthy elites have most of the say when it comes to important economic and political decisions that may impact your life. What good is individual liberty if you must spend half your waking life taking orders from a boss? If you must work in a dangerous factory or low-paid service industry with little chance of economic mobility, no benefits, wages that pay you barely enough to get by, and bosses who subject you to indignities? If your employer can fire you if you voice your political views? If you face the possibility of financial ruin should you lose your job, become sick or injured, or have to take time off work to care for a loved one? What good are political rights if most of our politicians are beholden to wealthy donors who fund their political campaigns?

In recent decades, economic elites have used a number of tactics to erode individual liberty for ordinary Americans. They’ve gutted unions, used monetary policy to prevent full employment, entered into trade agreements that allow corporations to offshore jobs, allowed the minimum wage to erode, and so on, thereby diminishing the power of workers. These policies have led to stagnating income while the costs of education, housing, and healthcare have risen dramatically, leading to high levels of poverty and indebtedness, as well as increased economic precarity for much of the middle class. These aren’t the conditions traditionally associated with individual liberty.

Classical liberals, such as Thomas Jefferson and Adam Smith, took for granted that individual liberty depended a great deal on equality. Jefferson thought America’s economy would be based on family farms and self-employed laborers who had the freedom to walk away from any given economic exchange, because they could produce to meet their own needs or demand high wages. When Smith wrote about the benefits of free markets in The Wealth of Nations, he described commerce as taking place among small business owners—butchers, brewers, and bakers—not multinational corporations and low-skilled workers who have little power in comparison. In both Jefferson and Smith’s ideal economy, wealth would be spread out in a relatively equal manner. They took for granted that individuals wouldn’t be dependent on a wealthy minority who owned the bulk of society’s resources, or who used their power to restrict the liberty of others.¹ This doesn’t mean Jefferson or Smith thought equality between all people was desirable, or that institutions that bring about a more equal society for everyone are inherently good. Jefferson owned slaves, after all. But for those whose lives they did value, equality and individual liberty went hand-in-hand.

One way we might judge whether we’re creating the conditions for individual liberty, therefore, would be to see if we’re moving towards, or away from, economic equality. We would view the recent trend towards inequality as a red flag, and stop pretending the right’s economic agenda promotes individual liberty for anyone other than the rich. The right’s agenda has led to stagnating income for poor and middle class Americans over the past several decades, along with a loss of $900 billion of wealth, while the One Percent has seen its wealth increase by $21 trillion.² This enormous amount of wealth bestows the One Percent with far more liberty than the rest of society could ever dream of possessing. The One Percent doesn’t have to work. They can easily meet all of their needs, yet still have plenty of money left over even if they were taxed at much higher rates. They can take lavish vacations as often as they want. They can use their money to influence politics and the media. They get to boss around their employees. These are liberties the rest of us don’t enjoy. Yet all we hear from the right are complaints about how higher taxes on the rich threaten individual liberty. This is absurd.

Adam Smith would agree. Smith thought that taxation might be a “badge of liberty.” If you have substantial property to tax in the first place, you might enjoy enough freedom and independence that you can afford to pay higher taxes without losing your liberty.³

Debates about individual liberty don’t mean that one side favors individual liberty and the other side opposes it. The right wants the rich to have far more liberty than the rest of society, whereas the left wants the rich to have marginally less liberty, while guaranteeing everyone has enough resources to achieve a sufficient level of individual liberty. This requires a much more equal distribution of wealth, and that no one has the power to deny large swaths of the population access to such resources. It’s the left that places greater value on individual liberty, not the right.

The Fruits of Labor

The right claims that everyone should be entitled to the “fruits of their labor.” If you work hard, take advantage of the opportunities life gives you, and just want to provide for your family, you should be able to do so. Everyone should get to keep what they earn, not have it taxed away by the government. This argument comes from classical liberal philosopher John Locke, who argued that every man “owns” himself and his labor, and therefore owns what he creates when he “mixes” his labor with the earth. I’m a farmer in the seventeenth century. I cut down trees to build my house and plant crops to feed my family. I should get to own my house and keep my food. What could be wrong with that? While this analogy might make sense at first glance, there are a number of problems with the way the right applies Locke’s theory to the modern, complex economy we know today.

The first problem is that many on the right act as if allowing individuals to keep the fruits of their labor follows from Locke’s theory as a matter of logic. I own myself and my labor, “therefore” I should own what I mix my labor with to produce. But the strength of Locke’s argument doesn’t come from its logic. As libertarian philosopher Robert Nozick pointed out, if I own a can of tomato juice, and pour its contents into the ocean, does this mean I now own the ocean? Of course not.⁴ What entitles us to the fruits of our labor is the fact that we value moral principles like fairness, and that we think keeping the fruits of our labor is fair, not the fact that we “own” our labor, or that we “mixed” it with something. Indeed, Locke himself qualified his ideas about property ownership based on his own conception of fairness. He wrote that property acquisition was just only insofar as there was enough left over for everyone else. There’s even a fancy name for this, known as the “Lockean Proviso.”⁵

There’s a good reason those who use the “labor mixing” argument don’t want to wade into questions about fairness. This is because they think labor mixing should take place within a market economy, and the way market economies distribute income is often anything but fair. Markets leave much of society without any independent means to provide for themselves. Instead, those without means must depend on labor markets, which are almost always characterized by wide imbalances of power, which allow employers to take advantage of employees. Locke even addressed this issue, writing that, “A man can no more justly make use of another’s necessity to force him to become his vassal by withholding that relief God required him to afford to the wants of his brother, than he that has more strength can seize upon a weaker, master him to his obedience, and, with a dagger at his throat, offer him death or slavery.”⁶

In today’s economy, the degree to which one can force another to become his “vassal” rests on a spectrum. But for millions of workers who must toil in agricultural labor camps, dangerous factories, processing plants, and elsewhere—or in low-paid service industries—the comparison is apt. These workers endure onerous working conditions and are paid barely enough to feed themselves and their families—let alone accumulate savings. Many can expect little hope for long-term economic stability or income mobility. If we want to follow Locke’s principles, it makes no sense to rely solely on labor markets to distribute resources.

This doesn’t mean Locke thought his principles ought to apply to everyone. After all, he invested in the Atlantic slave trade. His principles didn’t extend to slaves, or even wage laborers, who weren’t considered full citizens during Locke’s time.⁷ But we don’t have to accept these arbitrary distinctions today. If all individuals should be treated equally, and we’re interested in applying Locke’s theories to promote individual liberty, we should do everything we can to minimize the likelihood that millions of individuals must submit to the arbitrary will of a moneyed elite.

But there’s another problem with the right’s argument. Why, for example, should the fruits of my labor encompass the entirety of what I mix my labor with to produce, rather than the value my labor adds to the product? After all, I didn’t create the earth, and therefore have no claim to whatever portion of the product is derived from the earth. Now let’s take this principle a step further. In a modern, complex economy, I’m mixing my labor with far more than just the earth. I’m also using the resources I inherit from society—the language, the knowledge, the technology, the infrastructure, the institutions, as well as the labor of others who helped produce the inputs I use to do my job. In other words, market income and the fruits of one’s labor aren’t the same thing. We all get back more than we contribute individually. Nobel Prize-winning economist Robert Solow estimates that individuals add no more than 12 percent to the value of what they produce; the rest of this value comes from society.⁸ To claim everyone is entitled to the “fruits of their labor,” then equating the fruits of one’s labor with market income, is therefore misleading.

Furthermore, a large portion of income that flows to the wealthiest individuals doesn’t come from their labor at all. Most of the increase in economic inequality since the year 2000 is due to the fact that a greater share of income has flowed to capital, and ownership of capital is concentrated in the hands of a wealthy elite.⁹ Those who receive income from capital, however, did nothing to earn it. Rather, it’s other people, along with what we all inherit from society, that generates this wealth. If I own shares in a company, it’s the company’s workers who contribute their labor to the product. Likewise, if I own real estate, the rent I’m able to charge, or the capital gains I receive when I sell my property, is created by my surrounding community. If nearby businesses, jobs, infrastructure, and so on boost demand for my property, then it was the community that made my real estate more valuable while I did nothing.¹⁰

The right tries to get around this problem by claiming I did do something to receive this income—namely that I chose to “invest” my money, rather than waste it on frivolous goods. To the right, the risk one takes to invest their money is a form of sacrifice equivalent to that of labor. But not pissing away money you can afford to lose after meeting your needs involves little sacrifice.¹¹ It’s more akin to a game that only those with enough money can play, those who play are all but guaranteed to win more often than lose, and those with the most wealth have an advantage because they can afford expert advice, along with more opportunities to diversify their assets.¹² This has little to do with earning anything.

Yet another problem for the right’s argument is that it’s arbitrary to assume that individuals who mix their labor with the earth should own what they produce. Why not assume instead that society can mix its labor collectively with the earth, and therefore distribute what it produces as it sees fit, based on the needs of society—especially if society could make better use of the earth than the individuals who happened to first mix their labor with it?¹³ This is another reason why we shouldn’t rely solely on markets to distribute income. Markets leave vulnerable groups—the elderly, the sick, the disabled, children, and caretakers—without means, allow powerful corporations to despoil the environment, and bestow the wealthiest individuals with the power to corrupt our political system—and rig our economy in a way that ensures income and wealth continue to flow to people like themselves. Society would be better served if we distributed income and wealth in a far more equal manner.

This isn’t to say we shouldn’t structure the economy in a way that lets the average person keep a great deal of his or her market income. After all, we need a way to distribute resources to individuals if we want them to enjoy economic security, and letting people keep a large portion of their market income can go a long way towards achieving this end. Additionally, letting individuals keep more of their market income incentivizes them to work, which helps grow the economy. All well and good. If we want individuals to keep income that exceeds the amount needed to enjoy economic security or incentivize innovation, however, we should have good reason to do so. The idea that individuals should be entitled to keep the “fruits of their labor” isn’t a good reason.

Free Markets

The right claims to favor “free markets.” According to the right, the term “free markets” refers to markets that lack coercion—in other words, without the government taxing some people and redistributing their wealth to others. The absence of such coercion leaves individuals free to engage in voluntary exchange when providing goods and services to each other, to the mutual benefit of all transacting parties. This process of exchange, according to the right, is inherently just. We should therefore limit the government’s role in distributing society’s resources. However, the way the right uses terms like “voluntary,” “mutually beneficial,” and “coercion” in this context is problematic.

Conservatives use these terms in a circular manner. When they refer to voluntary economic exchange, for example, they mean any exchange that’s agreed upon by two parties. But the fact that two parties agree to an exchange doesn’t make their exchange voluntary in any meaningful sense. When slaves were freed, they were free to enter into “voluntary” contracts with white farmers. “Hey, they agreed to it, must have been voluntary.” In reality, freedmen were effectively forced to agree to work under these conditions—which often mirrored slavery. Whites maintained ownership of the land, leaving freedmen little choice but to work under the sharecropping system, a form of indentured servitude.¹⁴

History is rife with similar examples. During the Industrial Revolution, coal companies set up company towns and shipped in workers to remote locales, where they spent 14 hours a day, 6 days a week working in mine shafts, getting black lung, and facing injury or death on the job. Workers often became trapped in these towns, were made to live in company housing, paid in company scrip, and forced to buy their wares at company stores at inflated prices, with literally no way out aside from escaping into the woods. If these workers tried to organize, their employers spied on them, fired them, kicked them out of their houses, had them tossed in jail, and hired Pinkerton goons to beat, intimidate, and sometimes murder them.¹⁵ No one would voluntarily work under these conditions.

But what about today? Aren’t workers now much better off? For most of us, yes. For millions of others, not so much. Thousands of immigrants perform backbreaking labor on agricultural labor camps in sweltering heat to provide us with cheap produce. Many others work in dangerous factories, warehouses, and processing plants, or in low-paid service industries serving food, cleaning hotel rooms, working construction, and so on. These workers are paid next to nothing, are often subject to indignities, and can be fired for any reason. If they’re an undocumented immigrant, they can be threatened with deportation if they get out of line.¹⁶ These types of jobs may not be as bad as having to work in a mine shaft for 14 hours a day, but the point is that no one would freely agree to work under either set of conditions. Indeed, if this type of exchange can be described as voluntary, then maybe the right should stop complaining that taxation is involuntary. The mere fact that you file your taxes means you “voluntarily” agreed to do so by definition, according to the right’s logic.

The right might claim it doesn’t make sense to compare unfair market exchange with taxation, since it’s not the employer’s fault if you starve for lack of accepting a job you consider exploitative, whereas with taxation, it’s obviously the government’s fault if they lock you in jail for not paying your taxes. But this isn’t true. The reason someone might starve if they don’t work for an employer is because society distributes resources in a way that leaves them without any independent means to provide for themselves, and enforces this distribution through property law. This allows employers to control the “means of production,” which effectively forces large swaths of the population to work for them.

Alright, back to the point. Calling something “voluntary” does nothing to further your argument if all you mean by voluntary is the fact that two parties came to some agreement. Whether market exchange is voluntary in any relevant sense depends on the degree to which each party can choose to walk away from the exchange if they want. This also happens to be what classical liberals like Adam Smith took for granted. When Smith referred to the “invisible hand” of the market, he assumed economic exchange would take place between self-employed laborers—butchers, brewers, and bakers—who were of equal social standing.¹⁷ Smith wasn’t talking about multinational corporations and wage laborers who work on their assembly lines being exposed to disease, or not being able to take bathroom breaks so they can meet their delivery quotas, because they have few other employment options.¹⁸

Implicit in this conception of voluntary exchange is the idea of equality. If you and your employer are on relatively equal bargaining terms, then your employer can’t get away with treating you poorly, paying you low wages, and so on. But this isn’t the case for millions of workers. While employers can replace low-wage workers with relative ease and generally aren’t at risk of folding due to a temporary loss of an individual employee, a worker’s only option might be to work for another employer under the same conditions or not be able to pay their bills.

Nor does the fact that economic exchange is “mutually beneficial” justify a given market exchange. If someone agrees to work because they would otherwise starve, and their company pays them any wage at all, both parties benefit. But the wages offered by the employer might be so low that the employee can barely afford to feed himself and his family. This is hardly a reason to favor “free markets.” This is also funny, because if the fact that an exchange is mutually beneficial justifies the exchange, then any level of taxation, no matter how high, can be justified on these grounds. After all, it’s beneficial for you to pay your taxes, since otherwise you can be fined or thrown in jail.

Nor does the fact that taxation involves the use of coercion mean it’s a bad thing. We’ve already seen how taxation might be justified in order to counter forms of market coercion that arise from so-called voluntary or mutually beneficial exchange. But even if the right refuses to accept that certain forms of market exchange are coercive, we’ve seen that they accept the use of coercion when it comes to something else they value: enforcing property rights. If I come into your house and start eating your food without your permission, you can literally call the cops and have them kidnap me. The right therefore can’t use the fact that taxation is backed by the threat of coercion as a reason to oppose taxation. Coercion is baked into market economies, and insofar as coercion is used to enforce property ownership, coercion is good, even according to the right.

Now that we understand that markets inherently involve coercive institutions, and that coercion isn’t necessarily bad, we can see that what makes markets free isn’t the absence of coercive institutions, but how to structure these institutions to make market exchange just. We can use one form of coercion to enforce things like property rights, while using other forms of coercion to ensure a just distribution of property i.e. one that affords those who engage in market exchange the choice of whether or not to accept a given exchange. This is exactly why we should be taxing the rich and redistributing their wealth. Taxing the rich at high rates would limit their outsized economic and political power over the rest of society. Redistribution also lessens dependence on employers for things like health insurance, or enough income to buy food, pay for school or training, send your kids to daycare, or tide you over if you get laid off. It’s therefore the left who favors free markets, not the right.

When the right uses terms like “voluntary exchange” and “mutually beneficial exchange,” or “coercion,” they’re playing word games. They want you to think “voluntary” and “mutually beneficial” mean “good;” therefore we should accept that whatever they describe using these terms is also good. Conversely, they want you to assume “coercion” means “bad;” therefore we should accept that whatever they say is coercive is also bad. But they’re only trying to sidestep reasons why policies they favor are bad, and why policies they oppose are good. Similarly, the right uses words like “free” to mask economic and social relationships that are often the opposite of free. They define “free markets” as markets that lack certain forms of coercion, while ignoring—indeed promoting—other forms of coercion. In short, the right wants free markets for the rich, and unfree markets for everyone else.

The Invisible Hand

The right believes the economy should be guided by the “invisible hand” of the market. When individuals are left free to act in their own self-interest, competition between economic actors will lead to the proliferation of goods and services, drive down prices, and therefore benefit society—as if guided by an “invisible hand.” This idea was famously expounded by classical liberal thinker Adam Smith in The Wealth of Nations.¹⁹ Accordingly, the right tells us we should get the government “out” of the market by keeping taxes low and regulation to a minimum. The right, however, has bastardized Smith’s idea of the invisible hand.

While Smith assumed markets would play a role in society, he took for granted that laissez-faire economic policies went hand-in-hand with equal access to resources. This allowed individuals freedom from markets. The economy Smith envisioned resembled the northern colonies in America during the time he wrote. Families built their own homes, produced their own food and clothing to meet their needs, and only sold goods on the market after these needs were met. Markets played a relatively marginal role in the lives of most Americans, and those who did rely on markets were independent artisans and laborers who could demand high wages, since labor was relatively scarce. A society like this made it plausible that laissez-faire political economy would allow individuals a great deal of freedom. As long as a rough level of equality characterized social and economic relationships, and the state remained at arm’s length, individual liberty was unlikely to be threatened.²⁰

The fact that these conditions were present in the northern colonies during Smith’s time was a historical coincidence, however, not due to some inherent trait of unregulated markets. The US was a vast territory of newly discovered land, rich with natural resources, and open to all—at least if you were white. But these conditions gradually gave way to conditions of scarcity and competition. Land speculators gobbled up the bulk of society’s most fertile land, industrialization gave rise to larger business enterprises, and population growth expanded the supply of labor. These developments forced most people to rely on labor markets to survive. They soon found the nature of their work controlled within large, hierarchical organizations, and had to cede control of their daily lives to the will of their employers, who were concerned with making higher profits rather than the workers’ well-being.²¹ Within these firms arose a strict division of labor, which classical liberals like Smith decried, because it made people “as stupid and ignorant as possible for a human creature to become.”²² In other words, Smith understood that certain market outcomes undermined individual liberty.

The right also misunderstands Smith’s concept of self-interest. Smith recognized that when individuals only acted in their self-interest, negative outcomes, such as corruption and oligopoly would inevitably follow, writing, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the publick, or in some contrivance to raise prices.”²³ This is exactly what happened during America’s Industrial Revolution. Industrialists like Andrew Carnegie and J.P. Morgan built large monopolies that grew out of control and corrupted every level of government. Under these circumstances, there’s no such thing as Smith’s “invisible hand.” Instead, corporations and the rich use the government to enact policies favorable to themselves, or prevent policies that run counter to their interests. Corporations bribe Congress to cut taxes for the rich, cut safety regulations, cut environmental regulations, let the minimum wage erode, and enter into trade agreements that give corporations access to cheap labor. They also appoint corporate cronies to enforce labor law and antitrust law, head regulatory agencies, issue judicial rulings favorable to corporations, govern monetary policy to generate unemployment, and so on. These policies distort markets, give power to employers, and destroy the power of workers and consumers.

Nor is there any way to get the government “out” of the market under these conditions. Cutting taxes and regulations gives even more power to those who already enjoy the most influence in society. Economic concentration would remain even after cutting their taxes, allowing those with the most wealth to further corrupt the government. Note this would be true no matter how “small” the government, since according to the right even the most minimal form of government would have to protect property rights—and therefore the distribution of property throughout society—even if this distribution is highly-skewed. Under these conditions, allowing the “invisible hand” to guide the economy only strengthens the hand of concentrated economic power.

The right doesn’t advocate minimal government. The primary driver of inequality—and consequently, political corruption—is the existence of large corporations, which are state-sanctioned entities set up to concentrate wealth in the hands of their owners. This was once obvious to traditional conservatives like Christopher Tiedeman, who thought corporations were a “menace to the liberty of the individual,” and therefore advocated “the repeal of the statutes which provide for the creation of private corporations.”²⁴ Unless the modern right wants to put their money where their mouth is and abolish this form of government intervention, the right’s calls for small government can hardly be taken seriously.

So what choice does this leave us? Since we aren’t getting rid of corporations, and we know tax cuts and deregulation only further empower existing concentrations of wealth, we have only one choice—use the government to hold corporations and the rich accountable to the public. Other countries have done this. So did the United States during the New Deal and the Postwar Boom. There’s no reason we can’t do it again. The right, however, wants do to the opposite. They want to cut taxes and regulations, and pretend the “invisible hand” will magically fix everything, while corporations and the rich accumulate unlimited wealth.