As Dracula recoiled from the cross, liberals shrink in horror from the phrase “laissez-faire.” The thought of a world without government control of capitalism sends them screaming into the night. But dark night is where we are, with coronavirus closing the economic life of America.
This sentence from a Wall Street Journal story sends a chill down the spine: “Large chunks of the U.S. economy froze in March as the coronavirus pandemic closed malls, restaurants, factories and mines, causing Americans to cut retail spending by a record amount and the country’s industrial production to plunge at the steepest rate in more than 70 years.”
Coronavirus is a grim reaper, an indiscriminate destroyer leveling businesses large and small. Some cultural institutions and colleges face ruin. Unemployment is measured as “millions,” but each government-forced job loss is an immeasurable tragedy.
It is time for a radical solution equal to the need. Bring back laissez-faire capitalism.
Before my liberal readers slam their laptops shut in disgust, some obvious caveats. Basic worker protections, built over a century by law and practice, won’t go away. As to the innate amorality of laissez-faire capitalism, the coronavirus itself has proven, or revived, the moral underpinnings of the social contract. Public-private collaborations are flourishing. Praise for health-care workers and concern for the elderly are everywhere.
Laissez-faire capitalism, with an upgrade for the 21st-century economy, is an idea for our time. What might that mean?
First, we upgrade the phrase itself. As commonly (mis)understood, “laissez-faire” stands for a tooth-and-claw economy captured by millionaires in top hats and spats. But histories of the idea note that the original French phrase was “Laissez-nous faire,” which can be translated as, “Let us do it.”
“Let us do it” should be the rallying cry and motto of the American people for the years ahead, and nothing is more obvious than that they want to do it, once freed from lockdown and if—it’s a big if—they get the chance and space to restore work to the center of the nation’s daily life.
Analysts speculate every day on whether we’ll get a V-shaped recovery or a flatter U-shaped one. A slow, flattened recovery will leave many crushed individuals behind and create intolerable political tensions between the haves and have-nots.
We should clear away every identifiable impediment to making the recovery as sharply V as possible. The Paycheck Protection Program was a political impulse to do good, but its implementation has shown the unavoidable complexities of running recovery through the government. It’s just too slow for the current, stark reality.
What we need is the laissez-faire spirit of the California Gold Rush to revive risk-taking, investment and as many individual opportunities as possible.
The goal should be to clear all identifiable impediments to the restoration of old jobs and the creation of jobs that didn’t exist two months ago.
Many of the laid-off are midcareer workers with the smarts and skill sets to start new enterprises. Liberate as well minority entrepreneurs, whose neighborhoods have been hardest hit (this should have been done decades ago).
States and cities should maximize creators’ share of the revenue flow produced by their single-minded 16-hour days. New hires will keep their jobs only if their employers can profit and get free of the usual middlemen and Mickey Mouse—facilitators, fines, fees, lawyers, lawsuits, wage rules and licensing requirements.
I asked Carl Schramm, former head of the Kaufman Foundation and an expert on why new enterprises succeed, what elements would support a grassroots economic revival:
“Startups less than five years old with fewer than, say, 50 employees should be exempt from labor rules, including the federal minimum wage and, in nonmanufacturing situations, OSHA compliance. States should cover the costs of workers’ compensation, unemployment benefits and catastrophic health coverage for young companies.
“The federal government should deny recovery money to cities and counties that do not eliminate pointless regulation for startups.”
I’d offer a sunset provision on regulatory relief in return for a regulatory holiday now.
By the way, the contradiction between social distancing and a functioning economy needs to be addressed, not ducked, as governors such as California’s Gavin Newsom are doing with early reopening guidelines.
One can predict who will oppose a “let us do it” economy:
Democrats, because at heart they’re French: Dirigisme (state control) is their raison d’être(oxygen). Madame Pelosi is knitting new rules by the hour.
Business Roundtable types will oppose radical relief from status quo regulation because status quo businesses will try to suppress new competition after the crisis.
Neopopulist and protectionist Republicans will starve startups of access to export markets. Memo (however hopeless) to Donald Trump and Peter Navarro: Free trade was a laissez-faire principle.
There is an alternative: Bernieism. Support for Sen. Sanders’s promise of security-blanket statism, which Joe Biden seems to be embracing, could rise if people lose patience with economic restoration. “Let us do it” will give way to “Let somebody else do it for us.”
Washington and the states have ordered a bare-bones economy. It’s time for them to give back with bare-bones government.
This article first appeared at WSJ online. [email protected]