In the Anglo-American experience, the partisans of concentrated wealth and advocates for political centralization have long been connected. Over the last three centuries, that connection has grown stronger, and in the United States this process accelerated dramatically during and after the Lincoln administration. Lincolnism, the idea that the central state can and should use its coercive apparatus to serve the narrow interests of an economic elite at the expense of the commonwealth, prevailed decisively in the War of Secession and during the decades that followed, with high tariffs, railroad subsidies, and the apportionment of public lands. Times have changed and so, too, have the specific policies that Lincolnists champion. But their basic goal remains the same, and the interests being served by Lincolnism over the years are remarkably similar in kind to those championed by Lincoln himself. In the end, Lincolnism is essentially a form of state capitalism, which Clyde Wilson has defined as “a regime of highly concentrated private ownership, subsidized and protected by government.”
Most of the commentary and reporting on the federal government’s financial-sector interventions remarked on the supposed irony of a “pro-market” administration embracing an expansive role for government in response to the crisis, but throughout its tenure the Bush White House consistently geared its policies and regulations to suit large financial firms. Adopting costly measures to socialize the risk of lending institutions and shore up large, overleveraged banks at public expense, the Bush administration stayed faithful to its state-capitalist roots, shaping policy according to the particular interests of major corporations and the financial industry. With the bailout, the confusion of public and private interests can be said to have reached a new level, but the cooperative relationship between Washington and Wall Street did not fundamentally change—it merely intensified.
Economic centralization and consolidated power are thriving in the wake of the financial crisis, as both tend to increase when the public is panicked and willing to cede more power and control to the very institutions that have already egregiously abused what power they previously possessed. Opponents of the bailout were fragmented and easily cowed by market turmoil. No common set of principles or objections animated the odd right-left alliance of convenience that voted against the Emergency Economic Stabilization Act, and the slightest pressure was sufficient to break the limited resistance of many House members to the bill. Paradoxically, many of the opponents of the largest Wall Street bailout came from the party of Lincoln. In a rare moment of clarity, even if they lacked the language to describe it, a majority of House Republicans recognized that state capitalism and the free market were in conflict and that the interests their party leaders served truly had no connection to their purported principles.
There is scarcely any coherent opposition to the collusion of government and what Lord Bolingbroke and Jefferson identified as “the moneyed interest.” They were referring to the combination of financial and commercial power that found its political defenders among the Whigs of both Britain and America. Today, the moneyed interest enjoys the support of the leadership of both U.S. political parties. Those who expect anything different from the newly inaugurated protégé of George Soros and Warren Buffett are bound to be disappointed. Nor is there much more awareness of the severe dependency to which government policy, past and present, has reduced American citizens and which will facilitate ever-greater consolidation in the future. One of the crucial reasons for this lack of awareness is a general loss of understanding of the relationship between economic and political independence. Most Americans believe that they are enjoying economic liberty when they yoke themselves to increasingly large-scale firms.
Over 40 years ago, Canadian philosopher George Grant said that American conservatives must oppose economic centralization if they seriously hope to pursue political decentralization. The opposing tradition, the Country tradition of the 18th and 19th centuries, always held that this alliance of wealth and government has been antithetical to political and economic liberty as well as to the proper functioning of constitutional government. That tradition also held that permitting this collusion privileged the interests of a relative few with access and ties to the centers of power. When Jackson fought the Bank and other Southerners later declared their fear of “bank rule,” they were opposing the same sort of collusion in another form.
Over the last few months, we have become all too familiar with the phrase “too big to fail,” which acknowledges that economic centralization on such a large scale, whose efficiency and virtues we have heard praised for decades, represents a grave threat to the health of the national economy during a normal correction. Having become dependent on a few large institutions, we are told that we must prop up the same institutions and trust the same government that singularly failed the public. Instead of seeing the necessity of more broadly distributing wealth and power, Lincolnists insist that the collusion that helped create the current crisis must be deepened rather than abandoned.
It is perhaps fitting that the only other man elected president from Illinois has already embraced many of the tenets of Lincolnism. Barack Obama’s attempt to connect himself to Abraham Lincoln goes well beyond his publicity stunt of announcing his candidacy at the statehouse in Springfield. Obama, like many of his predecessors, embraces state capitalism, which is why so many of his early appointments have won praise for their “centrism” and “pragmatism.” From what we can gather so far, Obama’s Treasury Department is likely to be even more active in intervening in the financial sector. As head of the New York Federal Reserve, Obama’s nominee for treasury secretary, Tim Geithner, endorsed each of Secretary Henry Paulson’s and Chairman Ben Bernanke’s bailout decisions, and Obama himself supported the bailout legislation in the early fall. One of the consequences of the bailout debate in the months since the financial crisis became particularly acute has been that the Democratic Party, already reconciled to financial interests during the Clinton years, has become even more closely allied to Wall Street.
Given Obama’s appointments and his own record, it’s a safe bet that the Obama administration will be as wedded to Lincolnism as the past three administrations. Though his top nominee for U.S. trade representative, Xavier Becerra, is known for having second thoughts on his support for NAFTA, President Obama is not going to renegotiate NAFTA in any significant way, and he will likely attempt to resurrect the Doha round of international trade talks. As the global recession unfolds, we can expect Obama to modify and institutionalize the ad hoc G-20 coordination of economic policy that began at the tail end of 2008, and we will see an attempt to use existing international institutions to secure the interests of multinational corporations. An ambitious internationalist such as Obama will pursue a more coordinated global state capitalism, building on the example that the WTO has already provided and spreading Lincolnism worldwide.
In his April 2007 Chicago Global Affairs Council speech, Obama famously said that the security of the United States is inextricably tied to the security of every other nation; practically speaking, this was a theoretical justification for intervention everywhere. Obama’s statement also revealed his view of international relations in terms of extensive interdependence. With respect to economic policy, this special emphasis on interdependence implies that his administration may push for coordinated, transnational mechanisms for bailing out failing multinational firms. As we become more and more dependent on foreign investors to buy our debt, we may be told by future administrations that stabilizing vulnerable European or Chinese or other foreign financial sectors will be necessary to the functioning of our own economy.
Lincolnism’s corporate-government alliances also create incentives for firms with vested interests in foreign and domestic government contracts to support policies that promise to bring them additional business. The most straightforward example of the state taking on additional, unnecessary risks to “open new markets” is the ongoing push for NATO expansion ever eastward for the benefit of defense contractors. Corporate-government alliances also create opportunities for the government to co-opt corporations in the name of national security, which we have seen most recently in the use of telecommunications companies to conduct illegal surveillance operations and the subsequent granting of immunity to the firms that helped the government break the law.
Healthy republican government and Lincolnism are entirely incompatible. Through its support for concentrated wealth, Lincolnism establishes an oligarchy that dominates the polity, whether formally or informally, and makes self-government impossible. Classical republicanism requires the subordination of private interests to the good of the commonwealth. A republic must not become captive to one faction, whereas it is advantageous to both state and private factions to reduce citizens to dependency on one or both. For all of Lincoln’s misleading rhetoric of preserving “government by the people,” Lincolnism has always meant the rule of the few who are qualified primarily by their wealth and proximity to power. It is natural, then, that such an oligarchic, state-capitalist system fears above all things the mobilization of a populist protest against its misrule and usurpations. This fear acknowledges the basic illegitimacy and misrepresentation at the heart of the entire enterprise, which is vulnerable to losing all credibility once critics begin to probe beneath the surface.
Lincolnism today is the attempt to maintain the antithesis of the Country tradition, that of the Court, in a country whose people are still somewhat attached to the ideals of Jeffersonian republicanism insofar as they believe that they, and not the princes of Washington and New York, ultimately control their government. The good news for populists is that the Wall Street bailout was such an obvious and transparent swindle that many more citizens have become suspicious of the federal government’s exploitations of crisis and invocations of emergency powers. The instinctive revulsion of at least a plurality of the people at the prospect of the bailout suggests a healthy level of distrust of both government and corporate leaders. Lincolnists consistently frame government giveaways and gifts to private interests as vital for the national interest and the common good. In so doing, they conceal the antirepublican character of the ideology of the first Republican president.