Common Sense Capitalism


Review of Free Enterprise: An American History, by Lawrence Glickman

New Haven: Yale University Press, 2019  


“Capitalism is nothing more than a system, and it must be predicated on the right morals.  It must be.  Adam Smith taught me that.” So declared Arthur C. Brooks, president of the American Enterprise Institute, in 2015.  Capitalism—like socialism or social democracy “or any system,” according to Brooks—is “just a system...just a machine. It’s like your car.” And, like a car, capitalism can’t drive on its own. The driver of capitalism must be a society guided by the right moral compass. After all, it was Adam Smith, the father of modern economics, who “talked about what it meant as a society to earn the right to have free enterprise” in his first book, The Theory of Moral Sentiments.

Notwithstanding the glib and somewhat misguided interpretation of Smith’s Theory of Moral Sentiments, Brooks’ remarks are emblematic of a common explanation for what capitalism is and how it works. It synthesizes the notion that capitalism is a mechanical, economic system of free enterprise with a moral-cultural view that only those with the right ethical attitudes are rewarded within it. By subjecting the operation of the economy to “morality,” Brooks also minimizes the role of the state without fully abnegating it. It is both a nebulous yet confident and all-encompassing assertion about “free enterprise” as conservative common sense. 

Lawrence Glickman’s new book, Free Enterprise: An American History, tells the story of how and why free enterprise became that sort of common sense. It charts the varieties of “free enterprise” as an idea and exposes the mythologies that take it as a static, unitary concept in political and popular discourse. Early advocates of free enterprise in the early nineteenth century, for example, treated free enterprise synonymously with free labor, and they saw its promotion as a state-backed project (57). Free enterprise referred not to the interest of business firms to be free from government meddling, but to the character of citizens and workers. That only free labor—as opposed to slave labor—could unleash the full productive capacity of a nation, and that free labor marked an ethical civilization, was a common thread amongst those who employed it for their cause, whether abolition, internal improvement, urban development, or free trade (59).  

But in the last decades of the nineteenth century, things started to change. As confidence in business soared during the Progressive Era, business leaders and politicians transformed free enterprise into a term that denoted the relationship between the government and business, rather than business and their workers. No longer a “spirit,” free enterprise was a system that was natural, automatic, self-correcting, and set into motion by business.  Influential business thinkers and leaders like Merle Thorpe, editor of The Nation’s Business, retrojected this idea of free enterprise into history, claiming that even the Founders were free enterprisers, “capitalists and business men” who were united in their hatred of “despotic government.” Thus, this business offensive in the early twentieth century linked business interest to a thin conception of freedom believed to have longstanding, unchanging, and revolutionary American roots (78). 

Glickman’s history is not one of free enterprise per se; that is, the book’s emphasis is not to assess the causes and consequences of policies traditionally associated with a conservative, free enterprise agenda (corporate deregulation, tax breaks, cuts in welfare spending, etc.). Rather, it is an intellectual history that takes seriously how ideas are made and remade in ways that dramatically shape our political culture. It is a history that shows how conceptualizations of economic systems become “discursive fictions” that are not only wielded as a form of power (16), but created by people in power. Between the 1930s and 1970s, so-called “apostles of free enterprise”—business leaders, politicians, pundits, lobbyists, leaders of trade organizations and think tanks—synthesized and promulgated a powerful set of arguments about capitalism and its inner workings.

These free enterprisers made apocalyptic and alarmist claims about the New Deal and its consequences. They deployed rhetoric of “inverted populism” and elite victimization, claiming that business was the true “forgotten man,” the “whipping boy of politicians,” and the real losers of liberalism. They illuminated the invisible mechanics of markets and, by portraying the market in the language of both science and faith, free-enterprise evangelicals sought to dispel people’s belief in the legitimacy of basic functions of government. The result, as Glickman shows, was the transformation of free enterprise from a diffuse, vague, and disputed concept into a common-sense axiom about the relationship between market and state.

Over the course of the book, three themes emerge that help explain the ascendancy of free enterprise in the middle decades of the twentieth century. The first, as Glickman writes in his introduction, is the creation of a free enterprise myth: “a set of assumptions, narratives, and attitudes that has guided our common sense and, regardless of empirical accuracy, has dramatically shaped how Americans have understood and engaged in politics” (2). One powerful element of this myth, for example, is that economic freedom created the preconditions for obtaining other freedoms.  Enshrined as the critical “fifth freedom”—an addition to Roosevelt’s famous four—economic freedom was now seen as lexically prior to political and moral freedom (103). 

But these assumptions, narratives, and attitudes constituted a myth in large part because they relied on an invented enemy and an imagined past. Free enterprisers created a straw man out of the New Deal that provided the grounding and coherence for an aggressive anti-statist political agenda. Arguments about state power became increasingly alarmist and apocalyptic in the 1940s: that if the wartime state was not effectively scaled back, it was a slippery slope towards authoritarianism. At the same time, figures like DeWitt Emery, the founder and president of the American Small Business Man’s Association, popularized the idea that free enterprise was a tradition engrained in American history and culture. Free enterprise as the “American way of life,” then, was the last line of defense against the specter of the New Deal state. 

The second way in which free enterprise transformed American political culture was the way it was used as coalitional glue. Free enterprise became “an ideological holding pen” for a disparate set of political beliefs and attitudes held by disparate groups of people, and it helped consolidate the conservative political coalition into a “new political type” (142). It became shorthand for the triumph of private consumer spending and staunch opposition to government spending. Lawyers and lobbyists, politicians and pundits, magazine writers and ministers alike associated themselves with the party of free enterprise in ways that shaped the psychology and tenor of the political right from the 1940s onward (151). They lionized New-Deal liberalism as one stop away from totalitarianism that threatened the American spirit of risk-taking, self-sufficiency, and autonomy. They portrayed individual freedom—particularly economic freedom—as fragile, vulnerable, and constantly under threat. And they inverted populist rhetoric, depicting the (mostly affluent, white) businessman and taxpayer as the true “forgotten man” in America who was forced to sacrifice the fruits of his labor to support wasteful government programs. By linking issues of political economy to the moral, social, and cultural, free-enterprisers turned capitalism into more than just an economic system, but an entire way of life. 

Finally, free enterprisers distilled their beliefs about the free market into faith and common sense.  Leonard Read’s seminal essay, “I, Pencil” (1958), which has been adapted and reincarnated innumerable times, stars in this part of Glickman’s narrative. Told from the standpoint of a humble pencil, Read’s essay brought to life the complex, interconnected processes that produced such quotidian objects. It payed homage to Adam Smith, describing how the invisible hand worked in a way analogous “to the wonders of nature” and the mysteries of the divine (185). It was a “complex combination of miracles,” according to Read, that a pencil—an object no single person could make on her own—was produced without central direction. For this miraculous system to work, though, Americans simply needed to “have faith that free men and women will respond to the invisible hand.”

What’s more, Glickman shows how faith in free enterprise was supported by science, reason, and a “common sense” narrative. Critics of the New Deal order claimed that government intervention defied the scientific laws of nature. Echoing early twentieth-century economic theories, they aligned the workings of the free market with truth and science, not ideology. This potent mixture of scientific arguments and appeals to faith amounted to what Glickman terms an “anti-method that avoids calling attention to its claims as anything other than statements of the obvious,” which in turn, transformed the idea of free enterprise into “sturdy common sense” (11).  


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Free Enterprise is grand in its ambitions and sharp in its execution. Glickman is an adroit writer and wrangler of sources that span from business editorials and advertisements to groundbreaking essays and lesser-known newspaper columns. It works across important genres that have gained growing interest in the last decade or so. As a history of conservatism, Glickman shows that many of the foundations of the modern conservative movement were laid much earlier than often understood, and that what later became instrumental to conservative “fusionism” of the 1950s was the earlier blending of political economy with cultural and moral issues in the 1930s and 1940s.  Glickman thus more appropriately reads the famous “Powell Memorandum” as neither the single cause of conservative resurgence of the 1970s nor the blueprint of big business in politics. Though Glickman opens the book with a dissection of the memo, given the history he charts in subsequent chapters, it becomes clear that the Powell Memo’s significance is that it serves as a synthesis and index of free-enterprise ideas since the 1930s.  

More generally, Free Enterprise makes an important contribution to a relatively recent trend within American intellectual history that takes seriously how ideas and “traditions” are invented and reinvented. While works by pioneering historians and political theorists have focused on the lives and afterlives of a text and its author (Jennifer Ratner-Rosenhagen’s American Nietzsche, Katrina Forrester’s In the Shadow of Justice, and forthcoming works by Claire Arcenas, Andrew Hartman, and myself), Glickman’s Free Enterprise is closer to something like Helena Rosenblatt’s Lost History of Liberalism or Dan Rodger’s City on a Hill.

Rather than taking ideas as “autonomous abstractions which...happen only contingently and temporarily to find anchorage in particular human minds,” Glickman shows how fundamental concepts that we use to analyze our political and economic order often have no stable meaning, and that the dominance of any one particular version of “free enterprise” is not inevitable. Free enterprise is the product of messy histories: of people seizing it, flattening it, radically revising its message or deliberately leaving it ambiguous, and ultimately imbuing it with a sense of timelessness. This kind of history also demonstrates that the ideas that change political culture require not only theorists and high intellectuals, but popularizers and mobilizers. Thus, while Glickman’s narrative is explanatory, it resists one-track causality that assesses the impact of ideas on a particular outcome. It treats free enterprise as a swirl of ideas, opinions, and narratives which permeate the public sphere and acquire power through the “repetition and dissemination of a shared political language” (18).

The implicit irony in Glickman’s narrative is that the rise of free enterprise was not the result of a spontaneous order, but rather a concerted effort of businessmen, lawyers, lobbyists, politicians, and their allies. Economists, though not invisible, play an ancillary role in Glickman’s work. This is important because what matters for Glickman is not whether or not a given economic theory of free enterprise is or can be proven correct; what matters is that there was a body of actors who marshalled a specific version of free enterprise and set it into motion in ways that left deep impressions in American political culture. I think Glickman is right that free enterprise, regardless of its normative value, as a construct of the relationship between “market” and “state” is common sense. “Market” is depicted as individuals acting on their own interest and exerting their agency as consumers, while “the state” acts as the sole barrier to individuals’ economic, moral, and political freedom. 

How do we assess the legacy of free enterprise as Glickman traces it? On the one hand, it is a legacy of contradiction and contestation. By recovering a history of contending visions of free enterprise, Glickman shows that what has been lost—and often seen as anathema to the project of free enterprise—is actually constitutive of it. Free enterprise (much like free trade) is not actually “free,” but managed and jealousy guarded. Moreover, free enterprise is not free for everyone. The rhetoric of consumer empowerment was often in tension with the embrace of producer sovereignty, the latter of which treated Civil Rights as an illegitimate constraint on the freedom of white businessmen.  

On the other hand, it is a legacy of occlusion and injustice. Free enterprisers often denied or masked corporate power, favoring instead a view that “business” is merely hard-working individuals whose only barrier to success is the strong arm of the state. More troubling, as Glickman shows in Chapter 7, was that this producer-centered interpretation of free enterprise was often premised on a racialized and gendered fear of civil rights in the postwar era.  In other work, Glickman has argued that this conflation of corporation-as-individual has held fast and led to a dangerous trend of valuing business over and above employees and customers. In Glickman’s opinion, the recent Supreme Court ruling in Masterpiece Cakeshop v. Colorado Civil Rights Commission upheld “the neoliberal dominance of the firm” at the cost of the basic liberties of consumers and workers. 

One might be tempted to read Glickman’s history and think that the normative upshot is the reformulation and revival of free enterprise in its other forms, perhaps along the lines of its nineteenth-century, pre-Progressive era advocates or its Civil Rights-era dissenters: that for free enterprise to work, we need active state intervention. However, I am less inclined to believe that such an exercise of revival or rhetorical redescription is what Glickman is calling for. The galvanizing power of the “You Didn’t Build That” rhetoric (the viral-speech-turned-political-gaff that has its own Wikipedia page) has simultaneously been limited and emboldened the opposition as the true believers in the miracle of free enterprise. But its coalition-building power aside, these alternative narratives of free enterprise told by the progressive left still appear stuck within the dominant paradigm: that free enterprise is about calibrating the proper balance between government and the market. 

I think Glickman’s history points us in a different direction. Its account of the multiple meanings of free enterprise suggests that we need to be attentive “to the historical contingency and variability of our theoretical vocabularies and the power dynamics of tradition-construction,” as Duncan Bell has written. Such an historical account should lead us to further question the usefulness of “free enterprise” as a coherent concept used to analyze a given political, economic, or even moral arrangement.  

But if Glickman is right about free enterprise—that regardless of whether it has actually existed at a given historical moment, free enterprise is a discursive fiction forged and wielded by those in power—then perhaps we should pay less attention to redefining free enterprise itself, and more attention to the problems of private power. This is precisely where work like Elizabeth Anderson’s Private Government is so productive. We talk and act as if we are free at work, and that the only threats to individual liberty come from the state. Glickman’s works takes one step forward by de-mythologizing and denaturalizing the assumptions, narratives, and common-sense axioms that have so dramatically shaped our political economic culture. But we can, along with Anderson, take the next step forward by coming to terms with the idea that threats to individual freedom come not only from state power but from private power as well.


Posted on 29 January 2020

GLORY M. LIU is a postdoctoral research associate at the Political Theory Project at Brown University.