Tory Economics: Part One

“Are you a Calvinist or an Arminian?”

This is a question that theological students in the colleges and seminaries of North American evangelical Protestantism are fond of asking of one another. There is an assumption underlying the question that if one is an evangelical or even a Christian one must be either one or the other. This assumption is foolish for many reasons. When the Western Christian tradition split in the Reformation, the Protestant side itself divided into several traditions. Dutch theologian Jacob Arminius, (1560-1609), was himself a theologian in the Reformed tradition that had been established by John Calvin (1509-1564) and his followers. Arminianism, in other words, is historically a dissenting opinion within Calvinism. While the controversy between mainstream Calvinism and Arminianism over predestination and free-will affected the way these matters were discussed in other Protestant traditions, neither Lutheranism, the oldest and least radical of the Protestant traditions, nor the Anabaptists, the most radical of the Protestant traditions, could be accurately described as either Calvinist or Arminian. Furthermore, the beliefs of the majority of North American evangelicals probably line up with neither the Arminian Articles of Remonstrance of 1610 nor the Calvinist canons of the Synod of Dort (1618-1619). There are those serious Calvinists and Arminians who insist that if you do not belong to their camp you must belong to the other but I cannot think of any better response to the absurdity of such a view than that given by fundamentalist educator Bob Jones Jr. who wrote:

Because a man refuses to believe in the doctrine of limited atonement, it does not follow that he believes that it is possible for a Christian to lose his salvation. This is as stupid and illogical as saying that a Jew who buys meat from a Protestant butcher believes in the infallibility of the pope. (1)

A similar sort of false dichotomy can be found in the discussion of political economics where it is widely assumed that if one does not support capitalism he must therefore support socialism and vice versa. This false dichotomy is particularly problematic for conservatives. Capitalism is liberalism expressed in economic terms. Indeed, economic liberalism is the more precise term for the theory of laissez-faire or free market economics. It was socialist philosopher Karl Marx who coined the word capitalism as a term of abuse for the industrial economic system that he wished to see overthrown and replaced by socialism in a revolution of the workers. If economics is a contest between capitalism and socialism then when the conservative approaches economics he must find himself faced with the unpalatable choice between liberalism and socialism.

Just as the theological discussion of predestination and free will is not limited to the two options of Calvinism and Arminianism, neither is the discussion of political economics limited to the options of capitalism and socialism. In “Tory Economics: Part Two”, we will look at a number of alternatives to capitalism and socialism that are more compatible with conservative views than either capitalism or socialism and will attempt to identify the most basic Tory economic principles. We will not attempt to draw up a “Tory economic system” and the first Tory economic principle will be that the very idea of an economic system is incompatible with Tory views. For the rest of this essay, we will attempt to clear up certain types of confusion regarding the relationship of conservatism to liberalism, capitalism and socialism.

“I thought conservatives were capitalists and liberals were socialists” some of you might be saying. While this idea is widespread in North America it does not reflect the historic meaning of either conservatism or liberalism. It reflects, rather, the way both conservatism and liberalism have changed in post-World War II North America, neither change being for the better.

Historically, liberalism is a system of thought, influenced by Renaissance humanism and “Enlightenment” rationalism that developed in Britain in the seventeenth and eighteenth centuries dominated the English-speaking world in the nineteenth century, and became more or less universal throughout Western civilization in the twentieth century. Politically, liberalism is a faith in democratic elections and legislative assemblies, constitutional and legal protections of rights and freedoms, and the maximum freedom for the individual citizen in all walks of life that is consistent with the minimum rule of law needed to maintain civil order. Economically, it is a belief in legal protections for private property and contracts and in the ability of the free market to effect a just distribution of goods and services. Philosophically it is a belief that man is basically good and that he is by nature, first and foremost an individual.

Historically and traditionally, the Tories or conservatives were those who at first defended the older, pre-modern, pre-liberal, order of church and state from the challenge of liberalism and later, once liberalism had developed, spread, and triumphed, continued to defend the traditions, ideas and institutions that survived from the pre-liberal order against liberal absolutism. Tories do not merely negate what the Whig or liberal affirms and assert the exact opposite. If we did that we would be truly deserving of liberal J. S. Mill’s description of us as the “Stupid Party”. Philosophically, the Tory reminds modern man that knowledge, wisdom and truth did not begin at the Renaissance or the “Enlightenment” and calls upon modern man to heed the entire tradition containing the best of what has been thought and said since the most ancient time. In response to the liberal belief in the goodness of man the Tory says yes, man was made good in the image of God, but goes on to say that the image of God was marred in the Fall and that man is now tainted with Original Sin. In response to the liberal doctrine of the primacy of the individual, the Tory does not deny man’s individuality, but observes that man is born into his family, community, society, and nation, his membership in which must be balanced with his individuality. The Tory asserts the organic nature of community and society, against the contractual theory preferred by liberals, and insists upon the classical and medieval Christian idea that the good of the whole of society, for which laws are written and governments established, is more than just the aggregate of the individual goods of society’s individual members. The Tory defends the importance of faith, not just a private spirituality that means whatever a person wants it to mean, but religion as an organized, institution. Politically, the Tory does not reject the elected legislative assembly but speaks out on behalf of the other two ancient elements of parliamentary government, the upper house and especially the hereditary monarchy, insisting that the principles that these, however imperfectly, embody and represent, are needed to check and balance the principle of democracy. Where the Tory stands economically is what we are seeking to determine in this essay and its sequel.

In the twentieth century liberals, especially North American liberals, moved away from their eighteenth and nineteenth century ideas of maximum freedom and minimal government, especially in the economy, and accepted the idea of a larger, more active, economic role for government. In part this was due to their having seen governments successfully organize their economies to support the ends of war during World War I. They asked themselves why government, if it can coordinate the economy towards wartime goals, cannot do the same in peacetime to achieve positive social goals. The Great Depression came in the 1930s, providing them with the opportunity to experiment with that idea and in 1936, John Maynard Keynes provided them with a theory upon which to work in his The General Theory of Employment, Interest and Money. Keynes argued that to combat unemployment and the Depression, government needed to lower interest rates, inflate the money supply, and spend, spend, spend. As liberals abandoned the theory of Adam Smith for that of Lord Keynes they also developed various programs for the purpose of alleviating the effects of the Depression. As the twentieth century unfolded these would grow and expand into a more comprehensive attempt at finding a solution to poverty and other social ills through the means of government programs.

This overall shift in liberal thinking was seen by many as a move away from capitalism towards socialism although it would probably be more accurate to say, as many did (2), that both liberalism and socialism were converging towards something new that was neither capitalist nor socialist but in some ways a combination of both and in others something different altogether. Whichever way we look at it, this is the reason that liberalism is now widely equated with socialism. Liberals who did not approve of the direction liberalism took in the twentieth century and who still articulated the older ideas of eighteenth and nineteenth century classical liberalism, now called libertarians, formed an alliance with classical conservatives or traditionalists, against the new left-liberalism. One unfortunate consequence of this alliance was that the meaning of conservatism came to be watered down. For many, the older meaning of conservatism, the attempt to challenge the narrow, modern, ideology of liberalism with a vision of the good drawn from the older, broader, pre-modern, classical and Christian tradition and to preserve worthy ideas and institutions from the older tradition into the modern era, was lost and “conservative” came to mean little more than the attempt to conserve the older form of liberalism against the innovations of the new. Needless to say, for those who think of conservatism in such terms, conservatives are supporters of capitalism.

There are those, odd as it may seem, who would suggest that true conservatism is closer to socialism than to capitalism. Here in Canada this view is called Red Toryism. Red Tory is often used as a term of opprobrium on the right against people who are “Conservative” in their party affiliation but whose views are indistinguishable from those of the NDP and the left-wing of the Liberal Party. This is not how the term was originally used and it is not how I am using it here. The original meaning of the term, which is still usually its meaning when self-applied, referred to those who identify with the older, more authentic, classical Tory conservatism but who conclude that because this conservatism opposed classical liberalism that there is much common ground between conservatism and socialism which also opposes classical liberalism, and that therefore conservatism and socialism are closer to each other, than either is to liberalism.

The first thing that needs to be pointed out in response to this reasoning is that it is like arguing that King Charles I and his supporters had more in common with the Levellers than they did with Oliver Cromwell, (3) or that Dr. Johnson, the eighteenth century Tory who wrote against the rebellion of the American colonies, would have supported the French Revolution had he lived to see it, because it had been condemned by Edmund Burke who had earlier supported the American rebels. Moreover, while the Red Tories are right to criticize the trend within twentieth century conservatism towards ignoring the older, broader, tradition of classical conservatives and merely seeking to conserve the earlier, nineteenth century version of liberalism, this criticism loses its edge somewhat when those making it seem to be proposing that conservatives align themselves with something that is closer to the later, twentieth century version of liberalism.

There is an interesting observation, that is sort of related to the last point that I wish to make here. In Canada, traditional Tory conservatism historically opposed continentalism, i.e., the move towards economic, social, and cultural integration with the United States historically championed by the Liberal Party. Some Red Tories often linked this element of traditional Canadian conservatism, with which I am in sympathy, with a defense of our bloated welfare state. Ironically, in doing so, they not infrequently defended as “Canadian” taxes and government programs that we had actually borrowed from the Americans. The income tax, for example, is a Marxist concept that was adopted by the United States, long before Canada followed her example. (4) The United States introduced central banking twenty years before we followed suit in Canada. When our Prime Minister R. B. Bennett introduced a battery of subsidies, regulations, and social programs aimed at combating the Depression in 1935, he was consciously following the example of American President FDR. Pierre Elliott Trudeau’s exponential expansion of the welfare state into what he called “The Just Society” was patterned after Lyndon B. Johnson’s expansion of the American “New Deal” into the “Great Society”. Despite all of this, Dalton Camp, after describing our social security system as “confirmation of a social contract between Canadians and their federal government” and acknowledging that “Most of that contract has been proposed, endorsed and enacted in my lifetime” went on to say “I believe these measures have defined the country”. (5)

Although it is common to think of capitalism and socialism as polar opposites, actually capitalist liberalism and socialism are closer to each other than either is to conservatism. Both are products of the Modern Age. Both have a progressive view of history. The liberal, even if he is thought of as a neoconservative like Japanese-American political scientist Francis Fukuyama, holds to what Sir Herbert Butterfield called the Whig interpretation of history, in which the ideas and institutions of democratic capitalism are thought of as the final achievement of history and the past is dismissed except as it is seen as leading up to democratic capitalism in the present. The most influential school of socialist thought, that of Karl Marx, taught that history was moving, through a series of revolutions by oppressed “have not” classes against oppressor “have” classes, to a future state of communism. Both are forms of economism, the idea that everything in society can be reduced to the economic, that the “real” explanation of any given social phenomenon is the economic explanation, and that man is best understood as homo oeconomicus, i.e., a rational being whose primary motivation to act is the acquisition of material goods. (6) Both were built upon a contract theory of society – liberalism upon that of John Locke, socialism upon that of Jean-Jacques Rousseau.

These areas of similarity between liberalism and socialism are far greater than the areas in which conservatism and socialism are supposed to agree. Benjamin Disraeli, who was Conservative leader and Prime Minister of Great Britain in the Victorian era, condemned the effects of industrial capitalism upon the poor in his novel Sybil and when in power introduced a number of social reforms aimed at alleviating the conditions of the industrial working classes. He drew upon traditional Tory principles, such as the feudal concept of noblesse oblige, to support these actions. None of this reflected any affinity with socialism and its ideas on Disraeli’s part. Disraeli saw socialism as a dangerous threat to the civil and social order and introduced these reforms to strengthen that civil and social order against socialism. The same can be said of similar reforms introduced by Prussian conservative Otto von Bismarck in the new Germany. In Canada, traditional conservatism was heavily influenced by this “One Nation” interpretation of the Tory tradition but Sir John A. MacDonald, R. B. Bennett, and John G. Diefenbaker, would not have been pleased with the suggestion that their programs had any similarity to socialism. (7) Stephen Leacock, remembered mostly as a humourist today, was also a political scientist, economist, and traditional Canadian Tory. While he wrote a lengthy critique of laissez-faire capitalism, subjected aspects of capitalism to satire in his Arcadian Adventures with the Idle Rich, and supported social welfare programs in his The Unsolved Riddle of Social Justice, he was opposed to socialism. In The Unsolved Riddle he analyzed socialism and concluded that while it put forward a “beautiful dream” it “wouldn’t work” and that attempts to make it work would simply amount to slavery. Clearly it is a misreading of these traditional conservatives to say that because of their criticisms of liberal individualism and industrial capitalism and their support for various government programs designed to alleviate the conditions of the poor that they were closer to socialism.

One important Canadian conservative who did see socialism as an ally against liberalism was George Grant. Grant was undoubtedly the most important thinker in the history of Canadian conservatism. An Anglican Christian, Platonist philosopher, and Canadian nationalist who taught in the political science and religion departments of Dalhousie and McMaster Universities, throughout his career Grant drew from the best thoughts of modern thinkers such as Kant, Hegel, Nietzsche, and Heidegger a critique of the Modern Age, its concept of progress, and of liberalism, that called modern men back to the wisdom of the ancients. In the book for which he is most remembered, Lament For a Nation, Grant argued that Marx was “not purely a philosopher of the age of progress” and that he was “rooted in the teleological philosophy that pre-dates the age of progress” because he had a concept of the good that imposed limits on human freedom and that therefore Marxists “fail to understand the modern age when they assume that socialism is a more progressive form of organization than state capitalism”. (8) All of this is mere wishful thinking on the part of a conservative, who correctly seeing capitalism as the instrument of modern progress, naively sought an ally in capitalism’s primary modern opponent. Grant went on to ask:

Yet what is socialism, if it is not the use of the government to restrain greed in the name of social good? In actual practice, socialism has always had to advocate inhibition in this respect. In doing so, was it not appealing to the conservative idea of social order against the liberal idea of freedom? (9)

The answer to the first question is that socialism is the theory that the private ownership of productive property (farmland, mines, factories, etc.) is the cause of social, political, and economic inequality which is itself the root cause of most if not all social evils and that the good of society would be better served if productive property were collectively owned. Some forms of socialism, such as that of Pierre-Joseph Proudhon the nineteenth century French anarchist, do not involve the government at all! The answer to the second question, one so obvious that it is astonishing that it eluded a man of Grant’s intelligence, is that while conservatives believe in social order, not all theories of social order are conservative. (10)

To understand further, why their mutual disagreement with capitalism does not draw the Tory and the socialist together, it is important that we understand what the traditional Tory objections to capitalism were. Here is the Tory case against capitalism:

Capitalism shifts a country’s economy away from agriculture to manufacturing. This in turn causes the country’s population to migrate from rural areas to urban centres. This leads to all the problems associated with urban sprawl. Worse, by uprooting a large part of the population, which is itself a bad thing because people need roots, need a sense of connection and loyalty to place and people, it harms families and communities. Since in order to function it requires goods to be constantly produced and sold in large quantities, it promotes the production of consumer goods over enduring goods, which encourages both waste and the sacrifice of quality craftsmanship in the name of quantity. By encouraging constant consumption, it teaches people to make the acquisition of material wealth a higher priority in their lives, which promotes the habit of avarice that is traditionally considered one of the Seven Deadly Sins. Capitalism shifts power away from elites whose wealth is inherited and whose capital is fixed and immovable towards elites of the self-made whose capital is fluid. This undermines the sense of noblesse oblige and public spirit among the governing classes. Capitalism also has a bad effect upon the middle classes as their aspirations to upward mobility become less tied to the acquisition of manners, culture, and civil responsibility and come to rest almost solely upon the acquisition of wealth. Meanwhile, it leads to the growth of the proletariat class of industrial labourers creating the conditions which socialist demagogues exploit in their crusade against the civil and social order.

From all of this it ought to be clear that the Tory case against socialism does not bring the Tory and the socialist together. Much of what the Tory objected to in capitalism, the socialist praised. Marx and Engels wrote that the bourgeoisie, i.e., the urban capitalist class:

wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations. It has pitilessly torn asunder the motley feudal ties that bound man to his “natural superiors”, and has left remaining no other nexus between man and man than naked self-interest, than callous “cash payment”. It has drowned the most heavenly ecstasies of religious fervour, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom — Free Trade. (11)

If this sounds at all similar to the Tory criticism of capitalism that I outlined above it needs to be recognized that Marx wrote the quoted words, not as criticism but as praise.

In the sequel to this essay, we will look at economic nationalism, distributism, agrarianism, and what Wilhelm Röpke called economic humanism and will show that each of these is closer to the conservative view of economics than either capitalism or socialism as those terms are ordinarily understood.

(1) Bob Jones, Cornbread and Caviar (Greenville, S. C.: Bob Jones University Press, 1985), p. 187.

(2) Hilaire Belloc predicted that this would occur in his The Servile State (London & Edin burgh: T. N. Foulis, 1912). Thirty years later, James Burnham argued that a social transformation was occurring simultaneously in liberal North America, the fascist countries, and the Soviet Union, bringing about a system that was neither capitalist nor socialist but dominated by a new class of technocratic managers in The Managerial Revolution(New York: John Day, 1941).

(3) This is not just true by way of analogy. The Royalists or Cavaliers who fought for King Charles were the original Tories or Conservatives. The Puritan leaders of the New Model Army who established Oliver Cromwell as the Lord Protector were the progenitors of the Whigs or Liberals. The Levellers were an extreme egalitarian and democratic faction within the Puritan ranks. These are forerunners of the socialists.

(4) The income tax was first introduced in the United States in 1861. This was repealed in 1872 but in 1913 the Americans reintroduced the income tax with the sixteenth Amendment and have had it ever since. Canada introduced its income tax in 1917. Like the initial American income tax, which was introduced to raise funds for their internecine war, the Canadian income tax was introduced as a temporary measure to raise war funds, in our case for World War I. Unlike the United States, we never rescinded the tax. It is also worth noting, that for most of the twentieth century the American income tax system was far more socialist than Canada’s. From World War II until Reagan, their highest margin was taxed at 70% or over, and for two decades in that period, over 90%

(5) Dalton Camp, Whose Country Is This Anyway?, (Vancouver/Toronto: Douglas & McIntyre, 1995) p. 38. The idea Camp puts forward here, that our social programs define us as a country, is a widespread notion. It is neither a true nor a conservative one. Note the significance of Camp’s acknowledgement that the social network he was describing was mostly set up in his own lifetime. He was born in 1920, over half a century after Confederation. This, combined with the facts pointed out in the text of the essay about how in much of this we actually followed the example set by the Americans, makes nonsense of his claim that it defines us as a country, by which, of course, he means as distinct from the United States, as the whole tenor of the column, and indeed the entire book, makes clear. The conservative answer to the question of what defines us as a country may be found in these words of Prime Minister Diefenbaker addressed to the United Nations on September 26, 1960 in response to an arrogant anti-Western speech by Soviet dictator Nikita Khrushchev “We were the first country which evolved by constitutional processes from colonial status to independence without severing family connections”. John G. Diefenbaker, One Canada: Memoirs of the Right Honourable John G. Diefenbaker, Volume II: The Years of Achievement 1956-1962 (Toronto: MacMillan of Canada, 1976), p. 133. The most complete explanation of the Tory answer to what defines Canada as a nation can be found in Diefenbaker’s Those Things We Treasure (Toronto: MacMillan of Canada, 1972). Dalton Camp was the one who was personally responsible for ousting Diefenbaker from the leadership of the Conservative Party in 1967.

(6) “Economic conservatives' and libertarians' free market, liberals' welfare state and Keynesianism, and radicals' socialism and communism all presuppose that the good life is one of gratification through consumption.” – John Attarian, “Economism and the National Prospect, Part One”, The Social Contract, Volume 10, No. 2, Winter 1999-2000.

(7) R. B. Bennett’s introduction of a moderate version of FDR’s “New Deal” towards the end of his premiership was clearly done with the Disraeli-Bismarckian goal of robbing socialism of its steam. Unlike FDR, who showed a naïve attitude towards Soviet Communism throughout his entire administration, Bennett loathed both Communism and socialism, between which he saw little difference, and for better or worse, invoked Section 98 of the Criminal Code against left-wing labour agitation. Diefenbaker, while a champion of the downtrodden, and a supporter of a generous social safety net in the Disraeli tradition, and a Canadian nationalist opposed to continentalism, was also a defender of free enterprise against the socialism of Tommy Douglas’s NDP and a strong anti-Communist Cold Warrior. See chapter five of Those Things we Treasure.

(8) George Grant, Lament For a Nation: The Defeat of Canadian Nationalism (Ottawa: Carleton University Press, 1965, 1989), pp. 56, 58.

(9) Ibid. p. 59.

(10) University of Toronto professor Gad Horowitz in an article entitled “Conservatism, Liberalism, and Socialism in Canada: An Interpretation” that appeared in the Canadian Journal of Economics and Political Science in May 1966, defined socialism as “an ideology that combines the corporate-organic-collectivist ideas of toryism with the rationalist-egalitarian ideas of liberalism.” This definition of socialism was clearly influenced by Grant, repeating the same basic mistake of equating the conservative and socialist views of the common good and the social order. It was Horowitz who had coined the term “Red Tory” in an article reviewing Lament for a Nation that had appeared in the May 1965 issue of Canadian Dimension. Grant disliked the term and did not use it to refer to himself, as William Christian explained in George Grant: A Biography (Toronto: University of Toronto Press, 1993), p. 266. Others did adopt the term “Red Tory” as a self-description. Of these, a Red Tory of the highest caliber of Toryism is Professor Ron Dart of the University of the Fraser Valley in Abbotsford, B. C. Dart is an Anglican and Canadian Tory very much in the tradition of Leacock and Grant. While he asserts that which I have argued against in the text of this essay, i.e., that Tories and socialists have much in common, nevertheless in his account of the dialogue between Grant and Horowitz, he remarks that “the tory notion of the commonweal is not the same as the socialist notion of the collective” in The Red Tory Tradition: Ancient Roots, New Routes – a Series of Essays by Ron Dart (Dewdney B. C.: Synaxis Press, 1999), p. 46.

(11) Karl Marx and Friedrich Engels, Manifesto of the Communist Party, 1848, Chapter One: “Bourgeois and Proletarians”.