Another Look at the Lessons and Limitations of Andrew Koppelman’s Burning Down the House

Guest Blogger

Rogers M. Smith

This late addition to the Balkinization symposium on Andrew Koppelman’s Burning Down the House: How Libertarian Philosophy Was Corrupted by Delusion and Greed, published in 2022 by St. Martin’s Press, is motivated by the fact that on January 19^th, 2023, the U.S. Treasury reached the national debt ceiling of $31.4 trillion. Ever since, the Treasury has relied on “extraordinary measures” to pay the nation’s already incurred debts. The Biden administration has been urging Congress for months to raise the debt ceiling. Republicans in the House have recently agreed, with great difficulty, on a bill to raise the debt ceiling while mandating cuts that the Democrats in the Senate will never approve, and that President Biden would never sign.

Why is agreement to pay bills the U.S. has already incurred so difficult? Many conservatives in Congress, particularly the House’s Freedom Caucus, are so committed to limiting government spending and reducing the size of the government that they appear willing to compel the nation to engage in economically catastrophic defaults on its debts rather than raise the debt limit. Their position has many sources, but the libertarian themes that Andrew Koppelman analyzes in this book are prominent among them. And shockingly, it appears that, in the name of their minimal government, market-centered vision, many libertarians are endorsing violations of the most basic obligation of market participants, to pay their legally contracted debts, in ways that may well prove devastating for America’s market capitalist economic system.

Consequently, it seems more important than ever to understand contemporary libertarianism, its appeal and its deficiencies. Burning Down the House does a masterful job of providing that understanding. Even so, it has some lessons for the contemporary Left that it might emphasize more than it does, and some limitations in understanding the contemporary Right that one hopes its highly accomplished author will address in the future.

First, the lesson for the Left. Burning Down the House shows how its author, while still on the Left, while still a critic of aspects of Hayek and an even greater critic of his libertarian successors, has nonetheless embraced one lesson from Hayek, and also from Deirdre McCloskey, that few on the Left will readily conceive. Koppelman has concluded there is considerable truth to the claim that modern capitalism has generated technology, commodities, goods and services that have raised the standard of living of even most of the poor in most of the world. The implication that he slightly soft-peddles is that the Left today should probably abandon sweeping rhetorical condemnations of capitalism, satisfying and heart-felt as they often are.

Nonetheless, the true heart of democratic socialism has always been the aspiration of achieving responsible democratic control of basic economic institutions. Once that appeared to mean ownership of the means of production, in major industries at least, by the democratic state, and extensive policies of state economic planning. Those are policies that in the Soviet Union certainly meant the overthrow of capitalism as it is understood elsewhere in the world, though contemporary China has shown that a central state adopting more limited versions of those polices—some but less state ownership, some but less state planning—can achieve remarkable economic growth.

But few on the Left today take Xi Jinping’s autocratic China as an embodiment of their aspirations. In any case, for many 20^th century socialists the emphasis was always instead on democratic worker control, not state control, of industries and corporations. Capitalists in Germany and elsewhere have proven willing to accept modest worker representation on corporate boards, and though this falls far short of full worker control, it does suggest that democratic worker control could be part of what would still recognizably be a capitalist system.

And the reality is that, for most of today’s Left, what democratic control of the economy now really means is democratically enacted regulatory and redistributive legislation, creating social welfare systems and curbing capitalist abuses by limiting corporate power. That is mostly what Bernie Sanders means by democratic socialism.

The surprise Burning Down the House provides for many readers is its evidence that Hayek’s premises and early writings actually support a good deal of such democratic legislative control of the economy. Koppelman adds that experience has shown we can have a good deal more than Hayek wanted, without losing the benefits of productivity and innovation that capitalist economies at their best provide.

If this is so, and I think it is so, then more on the Left should say what Elizabeth Warren says: that she is herself a capitalist, and that we can have a democratic social welfare and regulatory state in ways that ultimately enable capitalism to achieve the goals we want it to achieve--more resources for all to fulfill their preferred ways of life--better than it otherwise would. This “better” includes regulatory efforts both to restrain capitalist businesses from practices that are destructive of the environment, non-renewable resources, and their workers, and to reward innovations that instead help improve the condition of all concerned. Those are all reasons why a well-regulated welfare state capitalist system is far more desirable than capitalism under a minimalist state.

Most on the Left remain reluctant to acknowledge that what they actually now support is well-regulated welfare state capitalism, and Koppelman does not rub their noses in that somewhat uncomfortable reality. But though fiery anti-capitalist rhetoric can help mobilize many constituencies, it probably is on balance a political liability, especially since it does not really describe the policies most progressives now prefer. Koppelman’s arguments usefully point progressives in a different direction, even more so than he chooses to stress.

They also do so in another way that Koppelman does not make central in this book, though he has addressed it in valuable ways elsewhere. Hayek and other libertarians have always stressed that they favor diversity, in the form of broad freedoms to pursue a great variety of conceptions of the good life, a great variety of pursuits of happiness. Today, we most often think of diversity as instead the cause of the Left, embodied in “diversity, equity, and inclusion” policies and initiatives.

But one of the increasingly noted paradoxes of the current political moment is that in many respects, the notion of “diversity” advanced by today’s progressive Left is less diverse, less inclusive, than the notions of diversity long put forth by the best of the libertarian Right. As Koppelman notes, Hayek faced a profound tension in his thought between his desire for capitalist innovation and creative destruction that inevitably accompanies it, and his respect for time-tested traditions and venerable social institutions. But Hayek’s notion of the diverse goods people can pursue had no trouble treating both the goods of tradition and the goods of innovation as legitimate goals, even though they could clash quite fundamentally.

In contrast, for many on the Left, the pursuit of diversity involves treating as illegitimate most if not all aspects of those ways of life long associated with many kinds of racial, gender, religious, and class discrimination, among others. From the start of his career Koppelman has argued, rightly in my view, that it is appropriate not only to outlaw most if not all such discriminatory conduct, but also to foster a culture that deprecates such discriminatory attitudes. But he has also argued more recently, and also rightly in my view, that if we wish to promote civil peace, mutual respect, and to gain all the benefits of the pursuit of diverse ways of life, we should look to find ways to accommodate more traditionalist ones, if and only if this can be done consistently with the flourishing of those long subjected to discrimination and disadvantage. We should, in other words, embrace as far as possible the more expansive and inclusive conception of diversity that can be found in the best libertarian thought. This, again, is not a point Koppelman stresses in Burning Down the House, an economics-focused book, but it is consistent with his book, and worth stressing.

Nonetheless, Koppelman’s focus on economic libertarianism in his 2022 book does have limitations in capturing today’s conservatism that are worth stressing. In its final chapter, focused on Charles Koch, Burning Down the House sometimes give the impression that Koch was a somewhat marginal libertarian voice in America until fairly recently, whereas now he and his Americans for Prosperity organization have become central to American conservatism.  This both understates and overstates the importance of Koch and his libertarianism in several ways.

As many scholars and journalists have documented, Charles Koch was one of the wealthy business recipients of Lewis Powell’s famous or infamous memo to the U.S. Chamber of Commerce, written and circulated during the first Nixon administration, contending there was a Left-wing “war on business” in America that needed to be countered through a long-term campaign to create conservative think tanks, conservative units within academia, conservative media outlets, conservative policy advocacy groups, and more. The Koch Brothers were major contributors from the start of this campaign not just to AFP but also the Heritage Foundation, the Cato Institute, the State Policy Network creating conservative think tanks in every state, ALEC, and many more—all pushing some form of economic libertarianism, and many promoting the extreme, Murray Rothbard and Ayn Randian variants, that Koppelman effectively demolishes in his book. What Burning Down the House somewhat understates is that Charles Koch and his libertarian allies have been major forces in American politics and cultural life for over forty years.

More significantly, what the book somewhat overstates, at least by implication, is the centrality of these extreme libertarians to American conservatism now. They remain very important, as the refusal to raise the debt ceiling and much else demonstrate. But the rise of Trump and the National Conservatism Movement, the intellectual wing of the “MAGA” movement, have shifted the picture more than Burning Down the House conveys.

Koppelman does briefly note that Trump is an economic protectionist, with trade policies that are anathema to libertarians; that he criticizes libertarian attacks on Medicare and Social Security; and that he has racial and xenophobic themes, including vilification of immigrants, that the best libertarians firmly reject. But what he misses is first, that new organizations promoting these Trumpian or National Conservatism themes have been proliferating rapidly in recent years; second, that even some organizations that were formerly part of the Koch libertarian network have converted to these positions; and third, that these new conservative themes include attacks on large corporations and wealthy elites in the name of working-class Americans of a s

ort that Charles Koch could never endorse, and now actively works to oppose. There is a major new battle for the soul of modern conservatism that is largely absent from this book.

For example, at the end of the Trump administration, a number of its alums along with other leading conservatives set up the America First Policy Institute, with 20 centers that address a wide range of issues, including economic ones. Some of these AFPI centers explicitly attack Koch-style thinking and conduct. The Center for American Trade, for example, denounces the “D.C. and global corporate elites” who “in the name of free trade orthodoxy, allowed markets and market efficiencies to be an overwhelming influence on policy decisions” (Center for American Trade (americafirstpolicy.com). They call for an end to economic policies “for the sake of big finance and big business,” and declare America’s workers, not its capitalists, to be the “class of Americans who made our Republic the greatest nation on earth.” Many current conservatives like Florida Senator Marco Rubio also now regularly berate “woke capitalists” and “woke corporations” because of their Diversity, Equity, and Inclusion offices and initiatives, linking the racial concerns of the MAGA movement with these conservatives’ heightened criticisms of big businesses.

Perhaps the best summary of this powerful strain in contemporary conservatism is the National Conservatism Statement of Principles, published in 2022, after Burning Down the House was completed (National Conservatism: A Statement of Principles - National Conservatism). The Statement was signed by leaders of Hillsdale College, National Review, the Conservative Partnership Institute, the Hoover Institute, the Hudson Institute, the Claremont Institute, the Intercollegiate Studies Institute, the Edmund Burke Foundation, Turning Point USA, the Manhattan Institute, and more. It insists “the free market cannot be absolute” and rails against “trans-national corporations showing little loyalty to any nation” who “damage public life by censoring political speech, flooding the country with dangerous and addictive substances and pornography, and promoting obsessive destructive personal habits.” The Statement avers that a “prudent national economic policy should promote free enterprise, but it must also mitigate threats to the national interest…nurture industries crucial for national defense, and restore and upgrade manufacturing capabilities critical to the public welfare,” although “Crony capitalism, the selective promotion of corporate profit-making by organs of state power, should be energetically exposed.” For a book on contemporary racial politics that Desmond King and I are completing for the University of Chicago Press, we have looked at the websites of most of the organizations that are part of the State Policy Network established partly with Charles Koch’s aid. Some retain fundamentally economic libertarian, Koch-style policies and programs. Many others, however, like the Texas Public Policy Foundation, one of the biggest and one that was formerly headed by Brooke Rollins, who now leads the America First Policy Institute, have gone over entirely to this sort of anti-corporate, anti-fully free trade, anti-fully free market rhetoric.

I don’t want to overstate this development. These new groups all want to cut taxes, eliminate lots of regulations, promote privatization of many governmental services, and to enact much else in the libertarian agenda that Koppelman explores. Still, there is a meaningful distance between them and Charles Koch; they have deep wells of alternate funding; and Koch and like-minded libertarian conservatives have in some cases sought to defeat the anti-big business candidates that the “national conservatism” Right often favors.

Consequently, we must recognize that the libertarianism that is the subject of Burning Down the House is not the whole story of contemporary conservatism. It remains, however, an extremely important part of the story, again as the debt ceiling crisis indicates. Koppelman has depicted and critiqued this libertarianism extraordinarily well, and all his readers will be in his debt—though as I’ve noted, whether we are all still obliged to pay our debts is now very much in dispute.

Rogers M. Smith is is Christopher H. Browne Distinguished Emeritus Professor of Political Science at the University of Pennsylvania. You can reach him by e-mail at rogerss@sas.upenn.edu.