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Ronald Reagan's Vision of a Market Economy Continues to Triumph


When Ronald Reagan was elected the 40th President of the United States the competition between nation states was defined along the political terms of communism, democracy, and fascism. But Reagan sought to redefine nation state competition in terms of the market. This capitalist worldview was powered by Reagan’s own American experience of upward mobility of the middle class. As President, Reagan pursued policies that reflected his personal belief in individual freedom, economic independence, and reduction of people’s reliance upon government. Reagan’s “market states” competition is broken down into America as the laissez-faire state, Europe as the managerial state, Japan as the mercantile state, and China a combination of the three. The Obama Administration sought to move America to embrace a post-Reagan managerial state. But with the U.S. credit downgrade and Europe facing financial collapse; the U.S. has no option other than a hard turn back to the laissez-faire market state.

The European advocates of the managerial state argue the core idea of government in a democracy is to provide services to the public through professional and political bureaucracies. The managerial state rationalizes that ethics demands only government can allocate society’s wealth to fund socially beneficial ends. The managerial state acknowledges that scientific management and efficiencies of the laissez-faire state maximize supply and growth; but they see these capitalist tools as leading to adverse outcomes of intense materialism and inequality of income. The managerial state demands control of healthcare: where death and pain cannot be priced without creating some very unhealthy social consequences and control of infrastructure where markets do not think in decades or would not properly price environmental damage as core state functions. University intellectuals are expected to embed therapeutic criteria to achieve right reasoning through public education.

Problems with these concepts according to Paul Gottfried of the Ludwig von Mises Institute, is that the managerial state will use its professional and political bureaucracies to sponsor a “series of social programs based on vague egalitarian spirit”. If anyone criticizes the bureaucracy’s lack of scientific management and efficient use of resources; they are attacked as unethical. If government loses popular democratic support for their policies, elites simply resort to ridicule, regulations, and litigation to maintain their monopolies.

C.S. Lewis remarked that every increase in man’s power over nature can turn out to mean an increase in the power of some men over others, with nature as its instrument. He stated:

“Given technological progress, we need to fight hard to retain our clarity about the nature and rights of human beings. We hear of human “autonomy” and of man’s “control of his own destiny.” But the autonomy is enjoyed by a select (or self-selected) few, and the control is exercised by a shrinking elite.”

Three years into America’s managerial state experiment, the middle class is in revolt over loss of upward mobility.

They see the stimulus programs as rewarding the elites and pacifying the poor. The middle class already had healthcare through employment and was looking for infrastructure to actually drive on. After $4 trillion in deficit spending there is no million-man construction cycle building new inter-state freeways, hydro-electric dams or Keystone XL Pipeline. What there has been is Goldman Sachs bail-outs and Solyndra et al crony capitalism. The middle class has continued to be punished with loss of their life savings as real estate prices continue to fall.

Over the last 30 years since Ronald Reagan refocused nation state competition onto the market; communism and fascism have gone into the dust bowl of history, while the U.S. economy grew from $2.8 trillion to over $15 trillion. The Obama Administration sought to transition Reagan’s successful laissez-faire state into the European managerial market state, at just the wrong time. The middle class may see America as failing; but they see Europe as a failure. American families cringe when they watch television stories of endless platoons of German and French VIBs – very important bureaucrats – dutifully shoveling subsidies to rioting Portuguese, Italian, Greeks, and Spanish socialists. Having seen the future of the European managerial state; American families want a return Reagan’s worldview of the laissez-faire market state as the vehicle of middle class upward mobility.

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