Still spinning, eh, Will?

In my last post I examined modern thinking from the Left and found it to be interesting and provocative, but ultimately empty. In this post, I’ll make an examination of modern thinking from the Right.

If we took ourselves back to, say, 1960 and looked around, we might have noticed two things. First, as I’ve already discussed, the entire world, ex-USA, was socialist. The rest of the world, and even many Americans, assumed it was only a matter of time before the US got with the program. True, Americans were a little slow on the uptake, but eventually they would see the error of their ways.

The second thing we might have noticed – not unrelated to the first – was that the American Republican Party was in a slow death spiral. This condition was somewhat masked by the fact that we had a Republican President, but Ike was a war hero who happened to be a Republican. Both Houses of Congress were Democratic, as were most governors and most state legislators. Enrollment in the Republican Party was plummeting.

A few deep-pocketed folks noticed this situation and decided they didn’t like it. Most of us grumble about lots of things, but we rarely do anything about it; these folks did. And what they did about it was quite remarkable. Concluding that the existing Republican establishment was hopeless – a decent but ineffectual Gentleman’s Club – they started all over, building a new Republican Party from the ground up.

They started young, establishing Young Republicans Clubs in high schools. They really focused on the universities, identifying brilliant young scholars whose minds worked in a free market direction and supporting them with mentors, grants, scholarships, and fellowships. They convened conferences at which young scholars could meet their elders and share ideas. They endowed an avalanche of conservative think tanks: AEI (reinvigorated), Cato, Heritage, Hoover, Hudson, Manhattan Institute. Many of these scholars, especially in economics, became known as the “Chicago School,”(1) but in fact they were scattered across the university world. Harvey Mansfield, for example, has been teaching at Harvard since the fall of the Bastille.(2)

Hardly anyone knew this funding was going on, and those who did were snickering up their sleeves. They viewed the young conservatives as hopeless Neanderthals pissing into the Cat 5 hurricane that was socialism. But then, in 1980, Ronald Reagan was elected President on the basis of these ideas, Margaret Thatcher having taken office in Britain the year before. And suddenly the world changed. As I’ve noted, socialism turned out to be an empty suit – actually, an empty pair of underwear. Thatcher and Reagan said, “Look, socialism has no clothes!” and that was that, it was all over.

Not only did socialism collapse, but capitalism was adopted globally, even in the most unlikely spots (China and Vietnam, for example). The subsequent explosion in human wealth was unprecedented in history, as wealth and incomes rose dramatically not just in the US and Europe, but even more so in dirt-poor emerging nations. Today, China’s middle class is larger than America’s – indeed, it’s larger than America.

Who were the funders of these young conservative thinkers? There were many, of course, but the earliest and most steadfast were Joe Coors, John Olin and Dick Scaife. And the amount of money these guys spent to change the course of history was surprisingly modest. Every year the Bill and Melinda Gates Foundation makes several individual grants that are larger than the total spent by Coors, Olin and Scaife over the twenty years between 1960 and Reagan’s election.(3)

But success isn’t the best possible tonic for an idea. Darwinism, for example – as powerful an idea as ever arose – has been so successful in helping us understand our own race that it has drowned out every other idea, including many that seem likely to be right where Darwinism is wrong. And so it has been with conservative, free markets ideas. The attitude of the political Right seems to be that history has spoken – capitalism is the answer, the Right is right.

But is it? See my next post.

 

(1) Amusingly, when I first began hearing about the Chicago School people referred to it as the “freshwater school,” as opposed to the “saltwater schools” at Harvard, MIT, and the West Coast. I’m pretty sure this was a put-down, but I forget who was being put down.

(2) You think I’m kidding, but Mansfield taught both my son and my wife. He could have taught me if I hadn’t had the good sense to do my undergraduate work at Dartmouth.

(3) In case you’re wondering how I know about this, I knew these guys a bit. Years ago I did some joint investing with the Coors family (albeit led by Bill Coors, not Joe). I knew Dick Scaife because I worked for the Mellons (he’s Richard Mellon Scaife) for many years. I never met Mr. Olin, but I knew Mike Joyce, who ran the Olin Foundation and later the Bradley Foundation. Coors, Olin and Joyce are gone, but Scaife is still with us.

 

Next up: Success Is the Mother of Failure

 

Please note that this post is intended to provide interested persons with an insight on the capital markets and is not intended to promote any manager or firm, nor does it intend to advertise their performance. All opinions expressed are those of Gregory Curtis and do not necessarily represent the views of Greycourt & Co., Inc., the wealth management firm with which he is associated. The information in this report is not intended to address the needs of any particular investor.