Remember When Conservatives Believed in Free Markets?

· dKo journal

Once upon a time, Conservatives advocated a free market, with “consumer sovereignty,” for healthy Capitalist development.
Consumers would have money to spend. Businesses that efficiently offered them things they wanted to buy would get a larger proportion of consumer spending. They would thus be rewarded for their efficiency and desirable selection of offerings.
These businesses would thrive, and with their superior rate of profit, they would invest, hire, and grow, thus directing additional economic resources into efficient production of desirable products and services. The growing wages they paid would put money into the hands of consumers so they could afford to purchase the things they want–again rewarding the best busnesses.
In those days, Conservatives had faith in the “invisible hand” of consumer sovereignty as the engine of economic growth–specifically of efficient growth in desirable directions.
But wait a minute! What about the businesses that do not efficiently produce things that people want to buy? Is this fair to them? They make their campaign contributions just like everybody else. They hire retired legislators and former government regulators–in fact, they do more of this than the businesses that are better run. So all of a sudden they are arbitrarily cut out?
The answer to this dilemma is called “Supply-Side Economics.” Give money, in subsidies and tax breaks, to all businesses and all the wealthy, not just those that happen to be efficient in meeting consumer demand. Furthermore, give them incentives for all the things they were already doing, not just incentives for which they have to do more, more investing and more hiring than they would have done anyway.
If you give enough money to the wealthy, some of it is bound to be spent in ways that benefit consumers, wage-earners, and society at large. They can’t just grab, spend, and waste it all. Can they?
Indiscriminately subsidized Capitalism is fair to all business and wealth. It is the heart of our American system. The most subversive threat to Capitalism today is consumer sovereignty in a free market economy. Frittering money away on wage-earning consumers only gets in the way.