The Republic of Virtue. F. H. Buckley

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СКАЧАТЬ allied is ‘progressive’ and tends towards its own suppression or towards self-perpetuation.”²¹ The same thinking brought Rubashov, in Arthur Koestler’s Darkness at Noon, to confess to crimes of which he was innocent in a Stalinist show trial. As a Soviet high official, Rubashov had recognized that in order to defend his communist faith he must acquiesce in his own execution. For Western liberals, Koestler’s book was an exposé of communism’s falsity and inhumanity, but in 1947 Merleau-Ponty saw it differently. As a proponent of a “Third Way” between America and the Soviet Union, he thought there was little to choose between what he saw as liberalism’s institutional violence (colonialism, capitalism) and the legalized violence of communism. While not a Stalinist, he nevertheless sympathized with those who had believed that a reign of truth and justice might at last emerge from communism’s charnel house of lies and violence.

      Similarly, the Apologist for Clinton Cash argues that Mrs. Clinton’s sins are trivial by comparison with the institutional corruption of our present system of politics, where wealthy campaign donors have an outsized voice in government policies. What matters, he thinks, is not whether she enriched her family by corrupt means, but whether her administration would have been more likely to lead in time to a virtuous, progressive state. More progressive it might be, in the Apologist’s eyes, but did he give us any reason to believe that virtue might emerge from so corrupt a vessel?

      Finally, the Apologist is apt to rely on the hoariest of procedural tools to avoid substantive moral questions: the legal burden of proof. Unless one can prove a quid pro quo beyond a shadow of a doubt, he says, the Clintons are entitled to a presumption of innocence. And indeed no one has ever proved that Hillary Clinton was corrupt, as her defenders are quick to note. But that’s a long way from saying that the charges against her have been discredited, and the very American tendency to turn all moral questions into legal ones—to insist on moral innocence unless legal guilt is proved to the hilt—encourages corruption. We might not wish to charge the Clintons with crimes, but we may still wish to blame them for their disregard of the proprieties, and to hope that Hillary Clinton has paid a political price for it. We might also want a tougher set of anticorruption laws, of the kind we’ll see later in this book.

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       The Silent Killer

      SO JUST HOW CORRUPT is America? What we’re interested in is public corruption, where public officials abuse the public trust, and not the private chiseling where one individual cheats another. To measure public corruption, we need something more than the number of criminal indictments for bribery. These might sometimes be without foundation, and themselves a corrupt method of silencing political opponents. That’s how they do things in Russia—and also at times in the United States, as we’ll see. In addition, corruption is mostly a game played under the radar, through the patterns of pay-for-play, of reciprocal gifts that escape detection or, if detected, don’t ascend to the level of crime.

      Today there is a relation of mutual dependence between America’s largest firms and the political class, one in which deals are made and favors are traded, and it kicked into high gear with the Troubled Asset Relief Program (TARP) bailouts during the Great Recession of 2007–9. Senior financial executives found themselves traveling to Washington for the first time, and the former assistant treasury secretary Richard Clarida saw how the relationship between Wall Street and the federal government had fundamentally changed: “It’s often said that Wall Street is no longer the financial capital, that it’s Washington, D.C., and that’s certainly true. I don’t think this is destined to change. I think this is going to be a fact of life.”¹

      From TARP, to the Export-Import Bank, to the tariff protections offered to favored industries, there is a growing concern that the federal government has become a necessary business partner, and that the (imagined but not entirely imaginary) free-market capitalism of the past has been transformed into a wasteful crony capitalism that favors well-connected special interests. The fact that 81 percent of the government’s green-energy grants went to Obama’s 2008 campaign donors should be troubling regardless of one’s stance on climate change.² Or take the support given to America’s sugar producers, who benefit from tariffs that raise sugar prices 64 to 92 percent above the world average.³ A strategic sugar stockpile isn’t exactly in America’s national interest, but for the industry the tariffs represent money well spent on lobbyists and campaign contributions. And the problem is bipartisan. Rajhuram Rajan and Luigi Zingales calculate that the trade barriers introduced during the Reagan-Bush 1980s amounted to a $30 billion subsidy to industry, and that those subsidies cost consumers $6.8 billion.⁴

      Are trade barriers necessarily harmful, though? Do they always favor powerful interest groups at the expense of average Americans? Many people believe it’s the opposite: that we’re hurting ourselves as a nation with our current trade deals, and that our free-trade policies transfer wealth from the poor to the rich within America. Donald Trump has brought the issue of trade policy to the front burner, arguing that free trade ships jobs overseas and impoverishes many working Americans, who then have even more difficulty buying the consumer goods that free trade is supposed to make affordable. On the other hand, tariffs may impose costs disproportionately on low-income Americans, and the support given to sugar producers is a good example. Poorer Americans spend a greater share of their earnings on food, so a sweet tooth will hurt them in the pocketbook more than rich Americans. If we erect higher trade barriers, then, might we possibly be making things worse for the poorest? Consider, too, that trade barriers would be set in Washington, where the thumbs of donors and lobbyists weigh heavily on the scales, and they won’t be representing America’s underclass. It’s easy to imagine shiny new policy gizmos, but before they’re enacted the same old tools of influence will be applied.

Rent-Seeking

      Spending resources to shape legal rules—through campaign contributions, government-relations departments and lobbyists—is called rent-seeking, a phenomenon first described by Gordon Tullock in the 1960s.⁵ A business seeks rents when it expends resources in the pursuit of politically driven business gains, through government bailouts,⁶ tariff protections⁷ or favorable tax treatment.⁸ The efforts to secure these advantages may bring some public benefit by informing voters and busy officials about the consequences of burdensome laws.⁹ But there are costs that must be deducted from any such gains. In fact, rent-seeking will often represent a net deadweight loss, either because the firm or industry proposes inefficient rules, or because any social benefits are exceeded by the costs of rent-seeking. It dissipates resources by shifting investments away from core business functions, drawing talent, technology and capital away from their most productive uses.¹⁰

      The rent-seeking firm or industry will seek to create a semipermanent relationship with a politician.¹¹ We’re most likely to find this happening in regulated industries, and the relationship between regulator and regulated can become very cozy. It’s what George Stigler, an economist at the University of Chicago, called “regulatory capture,” where the regulated industry captures the regulator, who then sides with the industry more than with the public he’s supposed to protect.¹² That would seem to be the only explanation for the Agriculture Department’s love affair with the domestic sugar industry, and the same might be said for federal peanut programs, which guarantee farmers high prices and result in overproduction. The Agriculture Department buys the surplus peanuts and then dumps them on poor countries such as Haiti, which further impoverishes the desperately poor peanut farmers there.¹³

      Regulatory capture also helps explain the government’s stimulus programs during the Great Recession. The Federal Reserve’s nearzero interest rates were meant to restart the economy, but it’s been calculated that they cost U.S. savers—many of them retirees on a fixed income—$500 billion СКАЧАТЬ