The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer Paperback – July 18, 2006

Dean Baker a PhD. Economist and co-director of the Center for Economic Policy and Research (CEPR) provides a brilliant, evidence-based, iconoclastic deconstruction of the myth that liberals like "Big Government" and conservatives favor the "Free Market". He documents the importance of government intervention on behalf of the rich and powerful in most of the important sectors of the economy. Covering such diverse areas as immigration policy, patient (monopoly) law, "Free" trade agreements, bankruptcy law, and Federal Reserve policy, Baker clearly demonstrates how these policies operate in the background (below the radar of public perception) to decidedly advance the class interests of the already powerful.

If you carefully examine his arguments you will be less likely to fall into the trap of believing the only way to advance a progressive agenda is through major government spending (not that he is opposed to this in principle). Several market-based solutions which powerfully elucidate the current bias against working class people are thoughtfully juxtaposed to policies which would be class neutral or enhance the well-being of the more vulnerable segments of society if they were to be implemented.

Finally, Dr. Baker walks the walk and has made his complete book available as a free download which can be found at the following web address: [...]. Given the economical cost of buying the book in paperback, you should strongly consider purchasing on line as it represents a valuable addition to the expanding body of literature to assail the growing economic divide. The practical solutions advanced in this book make it an important read for both activists and scholars willing to take an honest look at current economic policy.

It is a myth that the rich, or market conservatives in the author's lexicon, unremittingly favor the operation of free markets with absolutely no government intervention. In fact, quite the opposite is the case. The author examines several key areas that show the lie of the idea that the rich favor free market outcomes. What they favor is governmental protection of their status and privileges. For example:

1. Both the gov and professional organizations limit the numbers of doctors, lawyers, and other professionals including the entry of foreigners. At the same time, rampant and/or illegal immigration floods lower-wage employment markets and some technical jobs. On the one hand, wages are artificially high, but suppressed on the other to the detriment of the greater good.

2. The Federal Reserve uses monetary policy to increase unemployment and thereby lower wages of the lesser skilled, while limiting the inflation detested by bankers.

3. Corporations are entirely government creations, yet conservatives obscure that point which permits unchecked CEO pay. In actuality the government could mandate governance rules that would likely curtail CEO pay excesses.

4. Copyright and patent laws in essence grant monopolies to the detriment of the free flow of goods and services, which can in fact be harmful as in the case of restricting the availability of needed medicines.

5. Conservatives support legislation to restrict the ability of individuals to seek redress in courts for harm under the name of tort reform. In actuality law suits are a market form of regulation in lieu of government intervention. Obviously, protecting the rich trumps market principles.

6. Free market advocates supposedly advocate choice. So why is there such fear on the part of private enterprise of people choosing Social Security and/or signing up with Medicare for both health care and prescription drugs? The fact is that private business is highly inefficient compared to those programs and can't really compete. Therefore they look to government to limit choice.

7. True conservatives have always had low regard for gambling and certainly insist on its being heavily taxed. But when it comes to Wall St speculation, which is what day-trading is all about, they turn a blind eye to taxing and thus limiting the undisputed harmful impact of speculative transactions.

There are a few more examples by the author, none of which can be seriously disputed. The book has the tone that things could be different: just point out the hypocrisy of the rich and reform will follow. Really?

The author can hardly be unaware that we live in a class society in which the major institutions with the task of inculcating the idea that markets are neutral and work for us all, namely educational and media institutions, are basically owned or financed by the rich. A few dissenting, fringe views are permitted here and there, but basically major dissent concerning the justness of our society is dealt with swiftly: removal or exclusion from school or job, or flagrant suppression.

The situation is more than just setting forth the facts before the public. Probably never before in our history has market ideology so permeated our society and given the rich so many effective tools to disseminate information favorable to their class interests. As far as any effective forces opposing this situation, can anyone honestly say that the Democrats at this point are willing or even want to reverse any of what the author points out any more than do the Republicans. The answer is "No".

You'd have to be the proverbial ostrich not to know that in i-pod America, the rich are getting richer, the poor poorer, while the middle class qualifies as an endangered species. What is not so well known is how redistribution is aided and abetted by government policy. Conservatives, as Baker notes, have been very successful in dressing up their windfall as the unbiased workings of the marketplace. Thus the citizenry accepts unfavorable results as the outcome of the glorified market god, in whose name things ultimately turn out for the best. Baker's slim volume (100 pps.) aims at showing how despite the smoke and mirrors, the god actually resides in Washington DC, in enumerated programs and policies directed toward funneling wealth upward. These measures and their rationale are kept in place by governmental machinery he dubs the "conservative nanny state" (cns).

Far from opposing government intervention in the economy, the cns uses intervention effectively in behalf of established wealth. The quarrel between liberals and conservatives is usually framed in terms of a liberal welfare state vs. a conservative free market. But, as Baker points out, these terms are seriously misleading. Both sides favor government intervention. Where they differ is over who gets the benefits, while the success of the cns lies in their ability to deflect public awareness from govn't actions that benefit the rich at the expense of the rest of us.

Baker examines a number of these biased policies showing how they funnel wealth upward. These prove to be enlightening discussions. However, what's unusual about the sections is his proposed remedy, which is essentially to let the markets operate free of the cns. For example, crippling health care costs have been sky-rocketing. They can be reduced, he points out, by allowing a greater supply of foreign physicians to immigrate. Or, consider long-depressed wage hikes. These can be resurrected, he argues, by curtailing the Federal Reserve's power to pump up depressing interest rates in the name of fighting inflation. Similar market-based solution are recommended for other cns biases.

It would be easy to assume that the author is a libertarian insisting on free market principles. But he's not, at least from my reading. For he proposes letting the govn't compete in the marketplace with private business, a definite anathema to classic libertarians. Hence, in his view, govn't should offer medical insurance to compete with private insurers for the consumer's buck. How well all this would work out is up to the reader to decide. Still, it's educational to examine how far cns policies depart from the hallowed conservative principle of non-intervention, and how effectively these measures are masked from public awareness.

One important arena not examined is the defense industry. It's a multi-billion dollar complex, the proceeds from which largely funnel upwards and, it would appear, a mother lode the cns regularly taps into. Why Baker doesn't examine cns activity in this highly significant sector is unclear to me. Perhaps, it's because solutions are not as amenable to market operations, or maybe because the topic is simply too big to be included with the others. Anyway, don't expect an expose of Lockheed-Martin et. al. and the cns in these pages. Nonetheless, the book is well worth the read, particularly for Chapter Five on bankruptcy and the cns's little-known role as both national and international debt-collector.