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WORLD's book of the year is The Battle: How the Fight Between Free Enterprise and Big Government Will Shape America's Future (May 2010, Basic Books). This succinct work by Arthur Brooks, president of the American Enterprise Institute, is the right book at this moment in U.S. history.
Honoring a book on current political and economic questions is unusual for WORLD. Our books of the year in 2008 and 2009 were The Reason for God and The ESV Study Bible. We generally rate timeless higher than timely-but sometimes we have to pay attention to the immediate. Samuel Johnson said, "Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully." As the United States careens toward a crucial fall election, The Battle is concentrating minds.
Furthermore, it's vital for us to understand that the economic issues Brooks analyzes are not just about money. They involve how we live. The Battle shows how Washington power-grabbers have used financial fears to tell Americans how to live-and it shows the rest of us how to fight back. Brooks, like Thomas Sowell, is able to make economics not part of the valley of the shadow of death.
He begins by noting the centrality of enterprise in American culture-and maybe, thanks to our immigrant ancestors, even in our DNA: "Think about it. Immigrants tend to be entrepreneurial, willing to give up security and familiarity for the possibility of prosperity and success. . . . Only a small minority of people from any particular community tend to migrate away from their homeland. . . . America's vast success might be explained in part by our genetic predisposition to embrace risks with potentially explosive rewards."
Brooks then skillfully explores polling data to show that at least 70 percent of Americans favor free enterprise, think the top federal tax rate should be 20 percent or lower, and believe that American business success is crucial to have a strong country. Only 22 percent of Americans feel positively about "government regulation of business" while 95 percent have a positive image of small businesses. Given a choice between government policies that promote opportunity and those that "promote fairness by narrowing the gap between rich and poor, spreading the wealth, and making sure that economic outcomes are more equal," only 31 percent choose the latter.
Those stats lead Brooks to posit two basic coalitions of Americans: The 70 percent coalition opposes big government and supports free enterprise, and a 30 percent coalition opposes free enterprise and prefers government solutions. The 30 percent now control the White House and Congress because they control media and academia: "These are many of the people who make opinions, entertain us, inform us, and teach our kids in college."
The evidence of media and academic bias is well known to most WORLD readers; for example, Brooks notes that only one out of 12 American Economic Association members supports free-market principles (and only one out of 33 supports them strongly). These professors are having an impact. One poll last year showed that only 13 percent of Americans over 40, asked to choose between capitalism and socialism, chose socialism. Adults under 30, though, "were almost evenly divided, with 37 percent favoring capitalism, 33 percent socialism, and 30 percent not sure (and thus open to persuasion)."
Here's one more troubling survey result: "In a January 2010 Gallup poll a majority of young adults between the ages of 18 and 34 held a positive view of socialism." Brooks notes that generational memory may be significant here: Older people identify socialism with Soviet tyranny but younger ones know it only through seemingly harmless college professors. In any event, "this is an enormous opening for the 30 percent coalition." That coalition gets its way not only by propagandizing the young but by bribing them: Most pay zero in income taxes and, in the Obama plan, won't have to pay back student loans if they work for the government (where wages on average are 73 percent higher than those in the private sector).
Brooks also explains how the fall 2008 financial crisis won the presidential election for President Obama and allowed him to develop a narrative with five key claims that many Americans still believe, even though all five are false: "Government was not the primary cause of the economic crisis. The government understands the crisis and knows how to fix it. Main Street Americans were nothing more than victims of the crisis. The only way to save the economy is through massive government growth and deficit spending. The middle class will not pay for the stimulus package; only the rich will."
This evidence is now familiar to many WORLD readers: We've noted the key role of Fannie Mae and Freddie Mac, both government-sponsored enterprises. The Senate killed a reform bill in 2005 that would have required the duo to eliminate investments in risky assets. (The two biggest recipients of campaign contributions from Fannie and Freddie political action committees and employees: Sens. Chris Dodd and Barack Obama.) Banks buckled under pressure to make risky loans, and "many borrowers, far from being victims, were often too ready to take loans they shouldn't have, chasing the lure of easy profits on rising house prices."
The Battle then goes beyond money to note that, "The main issue in the new American culture struggle between free enterprise and statism is not material riches-it is human flourishing." Brooks notes that "the 30 percent coalition charges the majority with money-grubbing selfishness" but is itself "fundamentally materialistic." Leftists "believe that it should make no difference whether income comes from redistribution and government edict or from enterprise and excellence as judged by the free market. This is an ideology driven by raw materialism."
Brooks emphasizes the differences in worldview: "In contrast, the 70 percent majority maintains a worldview that is primarily nonmaterialistic. It understands money as just a proxy measure of true prosperity and personal fulfillment. It emphasizes creativity, meaning, optimism, and control in one's own life and seeks to escape from under the heavy hand of the state. . . . When we reduce the idea of work to nothing more than a means of economic support, we strip it of its transcendental meaning in our lives." Brooks argues that productive work is crucial to happiness: "Americans prefer to find meaning in their jobs rather than through their after-work pursuits."
Brooks here should do more about the importance of biblical faith, since many people who have "earned success" apart from a sense of God's sovereignty and love hit a wall of meaninglessness as they age. Nevertheless, he's right to note that most Americans want equality of opportunity, not equality of outcome: "If you are in the 70 percent majority, you believe that everyone should get a chance to succeed. . . . If this leads to income inequality-above some acceptable floor-so be it." He quotes Abraham Lincoln: "I don't believe in a law to prevent a man from getting rich; it would do more harm than good. So while we do not propose any war upon capital, we do wish to allow the humblest man an equal chance to get rich with everybody else."
That leads to a political plank for the present: Since the 30 percenters "have concealed the central pillar of their ideology-income equality-under a misleading definition of fairness," the rest of us should "expose this fact and reclaim the language of fairness for the free enterprise system." It's vital to make distinctions: "Legal equality, political equality, religious equality-almost all Americans would agree that these values are vital to our nation. But equality of income? That's a fundamentally different kind of equality." We want fair trials but not a right to be declared innocent. We want all people to have the right to vote but not "the right to see their chosen candidate elected to office."
Brooks notes that the 30 percent coalition's use of the word "fairness" is duplicitous: "It implies that equality of outcome is a core American principle, when in fact what Americans believe in is equality of opportunity and the potential to earn success." He is right to insist that the 70 percent coalition cannot cede to the minority the fairness issue and merely argue for free enterprise on the basis of economic efficiency: "Fairness should not be a 30 percent trump card but rather their Achilles' heel. Equality of income is not fair." A fair system rewards hard work and excellent performance, and gives people on the bottom a chance to rise not by bringing down the top but by striving for excellence.
So who will defend excellence and fight covetousness? Brooks doesn't defend the Republican Party's tendency to compete with the Democrats in the race to pander: Voters, he rightly notes, "did not repudiate free enterprise or conservative principles in November 2008. Rather, they punished an unprincipled Republican Party. That leads to a conclusion: "There is a very real threat before us that the 30 percent coalition may transform our great nation forever. One can only hope that the threat will clear our thinking enough to bring forth leaders with our principles at heart and the ideas to match."
To hear Marvin Olasky interview Arthur Brooks, click here.