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How Reagan Set the Liberty Movement Back a Decade

Many libertarians miss the fact that one of the most damaging aspects of Ronald Reagan wasn’t just his growth of the US Federal Government; it was also because he triggered a strictly political movement which damaged the appearance of a need for a true libertarian movement. When things are particularly bad, when the state’s presence is obviously unbearable, people begin to look at liberty and away from government as the solution to their woes. Reagan, though, brought back faith in Washington– and in doing so, he set the entire liberty movement back until Ron Paul was able to make mainstream again in 2007. 

Rothbard, as usual, is particularly observant:

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Setting the Stage: The Anti-Government Rebellion of the 1970s

I am convinced that the historic function of Ronald Reagan was to co-opt, eviscerate and ultimately destroy the substantial wave of anti-governmental, and quasi-libertarian, sentiment that erupted in the U.S. during the 1970s. Did he perform this task consciously?Surely too difficult a feat for a man barely compos. No, Reagan was wheeled into performing this task by his Establishment handlers.

The task of co-optation needed to be done because the 1970s, particularly 1973–75, were marked by an unusual and striking conjunction of crisis – crises that fed on each other to lead to a sudden and cumulative disillusionment with the federal government. It was this symbiosis of anti-government reaction that led me to develop my “case for libertarian optimism” during the mid-1970’s, in the expectation of a rapid escalation of libertarianinfluence in America.

1973–74 saw the abject failure of the Nixon wage-price control program, and the development of something Keynesians assumed could never happen: the combination of double-digit inflation and a severe recession. High unemployment and high inflation happened again, even more intensely, during the greater recession of 1979–82. Since Keynesianism rests on the idea that government should pump in spending during recessions and take out spending during inflationary booms, what happens when both occur at the same time? As Rand would say: Blankout! There is no answer. And so, there was disillusionment in the government’s handling of the macro-economy, deepening during the accelerating inflation of the 1970s and the beginnings of recession in 1979.

At the same time, people began to be fed up, increasingly and vocally, with high taxes: income taxes, property taxes, sales taxes, you name it. Especially in the West, an organized tax rebel movement developed, with its own periodicals and organizations However misguided strategically, the spread of the tax rebellion signaled a growing disillusion with big government. I was privileged to be living in California during the election year of 1978, whenProposition 13 was passed. It was a genuinely inspiring sight. In the face of hysterical opposition and smears from the entire California Establishment Democratic and Republican, Big Business and labor, academia, economists, and all of the press the groundswell for Prop 13 burgeoned. Everyone was against it but the people. If the eventual triumph of Ronald Reagan is the best case against “libertarian populism,” Prop. 13 was the best case in its favor.

Also exhilarating was the smashing defeat of US imperialism in Vietnamin 1975 – exhilarating because this first loss of a war by the United States, many of us believed, was bound to get Americans to rethink the disastrous warmongering bipartisan foreign policy that had plagued us since the unlamented days of Woodrow Wilson.

On the civil liberties front, the de facto legalization of marijuana was a sign that the nonsense of drug prohibition would soon be swept away. (Ye gods! Was that only a decade ago?) Inflationary recession; high taxes; prohibition laws; defeat in foreign war; across the board, the conditions seemed admirable for a growing and triumphant libertarianism.

And to top it off, the Watergate crisis (my particular favorite) destroyed the trust of the American masses in the Presidency. For the first time in over a hundred years, the concept of impeachment of the President became, first thinkable, and then a living and glorious process. For a while, I feared that Jimmy Carter, with his lovable cardigan sweater, would restore Americans’ faith in their president, but soon that fear proved groundless.

Surely, it is no accident that it was precisely in this glorious and sudden anti-government surge that libertarian ideas and libertarian scholarship began to spread rapidly in the United States. And it was in 1971 that the tiny Libertarian Party emerged, in 1972 that its first,embryonic presidential candidacy was launched, and 1973 when its first important race was run, for mayor of New York City. The Libertarian Party continued to grow rapidly, almost exponentially, during the 1970s, reaching a climax with the Clark campaign for governor of California during the Prop 13 year of 1978, and with the Clark campaign for the Presidency in 1980. The morning my first article on libertarianism appeared in the New York Times in 1971, a very bright editor at Macmillan, Tom Mandel, called me and asked me to write a book on the subject (it was to become For a New Liberty). Not a libertarian himself, Mandel told me that he believed that libertarianism would become a very important ideology in a few years – and he turned out to be right.

So libertarianism was on a roll in the 1970s. And then Something Happened.

What happened was Ronald Wilson Blithering Reagan.

The Reagan candidacy of 1980 was brilliantly designed to weld a coalition providing the public’s instinctive anti-government mood with sweeping, but wholly nonspecific, libertarian rhetoric, as a convenient cover for the diametrically opposite policies designed to satisfy the savvy and politically effective members of that coalition: the neocons, the Buckleyite cons, the Moral Majority, the Rockefellers, the military-industrial complex, and the various Establishment special interests always clustering at the political trough.

But we must not under weigh the importance of the traitorous roleperformed by quasi-libertarian intellectuals and free-market economistsduring the Reagan years. While their institutions were small and relatively weak, the power and consistency of libertarian thought had managed to bring them considerable prestige and political influence by 1980 – especially since they offered an attractive and consistent alternative to a statist system that was breaking down on all fronts.

But talk about your Knaves! In the history of ideological movements, there have always been people willing to sell their souls and their principles. But never in history have so many sold out for so pitifully little. Hordes of libertarian and free-market intellectuals and activists rushed to Washington to whore after lousy little jobs, crummy little grants, and sporadic little conferences. It is bad enough to sell out; it is far worse to be a two-bit whore. And worst of all in this sickening spectacle were those who went into the tank without so much as a clear offer: betraying the values and principles of a lifetime in order to position themselves in hopes of being propositioned. And so they wriggled around the seats of power in Washington. The intellectual corruption spread rapidly, in proportion to the height and length of jobs in the Reagan Administration. Lifelong opponents of budget deficits remarkably began to weave sophisticated and absurd apologias, now that the great Reagan was piling them up, claiming, very much like the hated left-wing Keynesians of yore, that “deficits don’t matter.”

Shorn of intellectual support, the half-formed libertarian instincts of the American masses remained content with Reaganite rhetoric, and the actual diametrically opposite policies got lost in the shuffle.

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Rothbard continues to fault Reagan for accomplishing the growth of the Federal Government– on economic policy, foreign policy, and other issues relating to private property– while at the same time appearing to give credence to limited government rhetoric. In this way, it was simply assumed throughout the 90s that the Reagan revolution was one of capitalism, constitutionalism, and freedom. 

Unfortunately, the Reagan Revolution never was. As I discuss here, it was the Reagan administration who let in, for the first time, the neocons into positions of real power.

Published in C.Jay Engel