Despite all the attention paid to the fight between the White House and the hedge funds that opposed the administration’s plan to restructure Chrysler, President Barack Obama’s truly revolutionary rhetoric went almost unnoticed. At its core, Obama’s speech about Chrysler last week was an effort to characterize individualism as dangerous and collectivism as the only route out of our economic woes.
Obama drew a stark contrast between the heroes on the Chrysler fight—those who “made sacrifices and worked constructively” with the administration—and the villains—those “held out when everyone else is making sacrifices.” In other words, Obama announced his opposition to individualist capitalism in which each person is free to pursue his own views and projects and firms compete with each other for profits. Instead of the pursuit of individualistic gains, Obama calls on us to support collective sacrifice.
The great appeal in Obama’s message is a promise that by working together under the direction of political planning we can overcome the impersonal forces that shape our society and drive our destinies in directions we despise. The grand hope is that the disorderly pursuit of individual economic gain can be replaced with coordination of our common affairs; chance replaced by planning and speculation replaced by foresight.
This is not the first time we’ve heard the siren call of planning. It was the great subject of Friedrich Hayek’s classic book on the totalitarian temptation, “The Road To Serfdom.” Hayek set out to demonstrate that the wicked regimes of Nazi Germany and Communist Russia were not a barbaric departure from the Western political tradition but a logical consequence of the tendency to replace individualism with collectivism.
It’s worth recalling Hayek’s lessons about how collectivism erodes democracy. Any political leader who sets out to plan economic life is soon confronted with the choice of abandoning his plans or seizing dictatorial powers. This is because responding to ever-changing economic conditions requires quick responses; planning cannot tolerate dissent. Ordinary rules of civil behavior fall by the wayside because the alternative is the failure of planning. This means that those most likely to succeed in a collectivist system will be those most willing to throw off the ordinary rules, seize power, and adopt a new moral code. The uninhibited and unscrupulous rise to the top.
We’re very far from reaching the point of dictatorship, of course. But perhaps not as far as we were before the Chrysler crisis. The White House allegedly threatened to use the press to label dissenting hedge funds as public enemies. Treasury Secretary Tim Geithner has been assuming powers—most notably the right to prevent banks from paying back bailout funds—that Congressionally-passed legislation specifically denies him. The rule of law is a little less robust now than it was a year ago at this time.
How far down the road to serfdom will we drive? If the past is any guide, we’ll pull off this road before long. The American people are an uppity lot, and the average American understands insubordination as a kind of patriotism. We tend to dislike plans or planners even more than we dislike the uncertainty of free markets.
But, as they say, maybe it’s different this time.