Conservative Movement Revisited

Posted January 26, 2009 at 4:11pm

Since the barrage of bad economic news began pounding the American airwaves in mid-September, the comparisons between the present state of the country and the United States of the 1930s have only seemed to escalate.

Headlines ask the question, “Recession or Depression?” as people hawk their wares at pawn shops, curtail travel plans and watch unemployment numbers rise. Even the new president has some observers noting the similarities to the desperate days of the Great Depression — a recent Time magazine cover featured President Barack Obama as Franklin D. Roosevelt, heralding the coming of a “new New Deal.”

In her book “Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan,” author and New York University professor Kim Phillips-Fein aims to shed light on the origins and influence of the conservative economic movement, but she also draws stark parallels between the Great Depression and today. The timing of the book’s release is fortuitous for Phillips-Fein, who began work on it in 2001.

“There’s a parallel to the moment that the book begins with,” she said in an interview. “The fact that we are living through an economic crisis not quite on the scale of the Great Depression” but that has the potential to reach that depth makes the historical perspective relevant.

Throughout “Invisible Hands,” Phillips-Fein describes the tension between the business community and the labor movement, which she said is comparable to the heated debate going on right now over the Employee Free Choice Act.

Perhaps even more familiar are the concerns she cites from the 1930s that FDR’s New Deal program would transform the country from a capitalist economy to a socialist welfare state. Although questions have been raised since the late months of the presidential campaign about Obama’s potential socialist tendencies, Phillips-Fein believes some of those ideas are a bit off the mark.

“The idea that Obama’s going to bring a new New Deal, I’m a little skeptical of that,” she said. “If you start to see the Obama administration doing that, you will see a strong backlash from the business community.”

If such a reaction is warranted, it may look something like the efforts made by businessmen and economists in the 1930s, ’40s and ’50s, who created activist groups and think tanks to combat unions and the restrictions on the free market.

Businessmen such as Leonard Read and the Du Pont brothers were particularly involved in establishing organizations such as the Liberty League and the Mont Pelerin Society, a gathering of mostly economists to discuss the defense of free-market principles.

Especially popular among many in the business community were European economists Friedrich von Hayek and Ludwig von Mises.

“The Austrian thinkers romanticized the individual as a creative hero, the agent of all society,” Phillips-Fein writes in describing their appeal to American businessmen. “In their philosophy, individual trading in a free market took on the world-creating power that Marxists assigned to the working class.”

Also popular among businessmen and some economists were the works of Ayn Rand, who was briefly associated with the Foundation for Economic Education, which Read founded.

“Ayn Rand was one of very few women in this world” of conservative economic thought, Phillips-Fein said. “Her politics go into a slightly different wing ultimately, but she has similar roots as other people in the movement.”

Nonetheless, it’s easy to see why economic conservatives would have been attracted to Rand’s work. Though it was published in the late 1950s, Rand’s novel “Atlas Shrugged” made a frightening case for the importance of the free market and against the strong central government that leaders in the business world were trying to prevent.

Groups like Irénée du Pont’s Liberty League rejected the vilification of successful entrepreneurs.

“Businessmen are denounced officially as ‘organized greed,’ ‘unscrupulous money changers’ who ‘gang up’ on the liberties of the people,” Phillips-Fein quotes from the organization’s materials. They believed that the New Deal was a dangerous move toward an unconstitutional “totalitarian centralization of power” that worsened the economic crisis.

Phillips-Fein leads readers through Barry Goldwater’s failed presidential campaign, the nuances of the business community’s involvement with him and the increasing push to become involved with politics as a means to enact their goals.

One of the most interesting chapters in the book, in Phillips-Fein’s opinion, describes former President Ronald Reagan’s work with General Electric, which signified his full transformation from performer to politician.

“People don’t know how political the company was at the time,” she said. In some ways, GE was the “predecessor to Wal-Mart — very politicized. That’s the world Reagan came out of as a free-market thinker.”

Phillips-Fein developed an interest in the topic following the 1990s as she began to wonder “how conservative politics came to be so successful.”

“In the 1990s, there was a broader popular acceptance of free-market ideas, a rise in economic inequality and a decline in union membership to levels before the New Deal in the private sector,” she said. “I wanted to know where this hyper-unequal, volatile economy had come from.”

There was plenty of material on social conservatism, but when she couldn’t find much on the economic influence, Phillips-Fein decided to focus her search and write about it herself.

Written for both a scholarly audience as well as the broader population, “Invisible Hands” feels like a solid introduction to a topic about which there is much more to be said. Phillips-Fein gives an overview of the crucial decades of the movement, which is readable and engaging even for those without a background in economics or conservatism.

“Invisible Hands” is particularly timely in that it also offers insight into conservative principles at a time when some members of the GOP are arguing that they need to get back to their roots.

“Conservatives will be thinking about what their history is, since it is a moment of defeat,” she said, adding that there are misconceptions on the right about “the role of business in their movement.”

The book might also be of interest to “liberal, left activists” who want to know the power of business and “what they’re up against,” she added.

As certain topics remain at the forefront of the political conversation — the economy, increasing government programs, the future of the conservatism and the influence of business in politics, to name a few — “Invisible Hands” lays the groundwork for anyone trying to grasp where some of these issues began and what they mean.