With recent Fed and Treasury interventions to bail out the entire U.S. market, we can begin to see more clearly a fundamental truth about our economic and political system. It hides in plain view.
This crisis has revealed that our "free market" system is wholly skewed toward one object: growth and mastery. It is not a fundamentally free market, which presumably would be allowed to fall when conditions demanded. By absorbing the bad loans on the books of countless financial institutions, we have now officially revealed the basic philosophy of our economic system: privatized gain and socialized loss. By suspending short selling (betting AGAINST the market) it has been plainly revealed that the official stance toward our market system is to encouragement of increase. Neither the market nor the government are neutral about ends - as liberal theory purports to argue. Rather, THE fundamental end of human life under liberalism becomes economic growth, increase, and mastery of nature and circumstance.
A fundamental premise of liberalism itself stands revealed this week. Liberalism is a theory which holds that unleashed self-interest is a predictable driver of human behavior and can be harnessed to ensure stable political institutions and dynamic economic activity. Because it unleashes such dynamic activity, it allows for - indeed, encourages - massive differentiation of material conditions within society. Aristotle, for instance, and Aquinas following him, argued against such extremes of wealth and poverty in the name of commonweal. More fundamentally, Aristotle and Aquinas alike argued against unleashed self-interest inasmuch as its free rein led to the deformation of the human soul - a form of enslavement to the desires. Among its most pernicious effects was the incitement of envy and its cousin resentment (remember, the seven deadly sins? Dante wrote of envy that it was "love of one's own good perverted to a desire to deprive other men of theirs"). The founders of liberalism were sufficiently informed by the Christian tradition (in spite of their heterodoxy) to know that envy was a great challenge for a society defined by unleashed self-interest. Their answer was ingenious: envy could be minimized by the prospect of universal economic growth and increased overall gain. Locke sought to remind his readers that even a "day laborer" was immensely more wealthy than the richest Indian king in the Americas. A dynamic economic system reduced resentment by promising increase even to the poorest. A rising tide raises all boats, one might say, but more importantly, a rising tide renders resentments politically tractable.
Thus, liberalism prides itself on its neutrality to human ends and goods - purportedly. It claims that it cannot pronounce a preference for certain ends, and insists that it must remain neutral between competing claims about the good - whether religious, social, moral, etc. What this week's episode throws into relief, however, is that liberalism is NOT fundamentally neutral about ends, for what it seeks above all is the promotion of economic growth and material pursuit as the main activity of human activity. It can afford to be neutral about ends because by emphasizing that one end - growth and material gain - it effectively demotes all other ends. However, it tempts social and political turmoil by unleashing greed and envy, and controls them NOT by arguments for their temperance (as would the ancients and Christians), but by the structural promise of universal societal increase. Liberalism's raison d'etre is thus most fundamentally threatened when those conditions do not apply - when the pie shrinks and the society faces decrease. Liberal societies have almost always fallen apart under such conditions (witness Weimar, and the temptations to fascism and socialism during the Depression). Thus, in the midst of an election season when Pelosi and Reid and Paulson might not otherwise want to be seen together under any circumstance, the fact that they appear together reveals the deepest point of agreement in a society seemingly riven with political and philosophical differences. On this point - mastery, growth and increase - there can be no difference. Not merely a finger on the scales, but rather the heavy hand of government will weigh in as extensively as possible to forestall decrease. Correspondingly, no party of the government will call for virtue and restraint as a possible solution, since that would contradict the fundamental wellspring of human behavior necessary for increase and dominion (in a wholly ham-handed and inadequate way, Joe Biden came close, justifying a tax increase as a form of patriotism, but only one to be borne by the wealthy - thus implicitly suggesting that the poor and middle class were to be motivated by patriotism's opposite, self-seeking, since they are promised tax cuts). This week some of our most basic commitments have been revealed, though we are wont to miss them if we mistake them as mere "policy" and fail to see a more fundamental philosophy underlying public and private actions.