From The American Enterprise Institute:
A Conversation with Arthur C. Brooks By Arthur C. Brooks, Kathryn Jean Lopez
National Review Online
Thursday, June 24, 2010
President
Arthur C. Brooks
AEI's Arthur C. Brooks always manages to see the world from a fresh prospective, one that is buoyed by first principles. A manifestation of this is his latest book, The Battle: How the Fight between Free Enterprise and Big Government Will Shape America's Future. Brooks, the president of the American Enterprise Institute, talks about The Battle--and the future--with National Review Online's Kathryn Jean Lopez in this two-part interview.
KATHRYN JEAN LOPEZ: Culture war? Didn't we evolve beyond such talk somewhere around a Pat Buchanan speech at a Republican convention?
ARTHUR C. BROOKS: For many, that 1992 convention speech defined the term "culture war." But what I'm talking about is a new culture struggle--one fought not over guns, gays, and abortion but over the core characteristic of America: free enterprise. In my book I don't just demonstrate that free enterprise is the most efficient way of organizing an economy (which it is). I also show that it's an expression of American values, and, thus, that a fight for free enterprise is very much a fight for our culture.
LOPEZ: Has President Obama made Americans less happy? Is it even fair or reasonable or constructive to ask such a question?
BROOKS: Happiness is important to discuss. The opponents of free enterprise always claim they will make America a happier nation, and we always lamely respond with arguments about economic efficiency. Yet in truth, the better prescription for happiness is on our side, not theirs.
Nonpartisan social-survey data clearly show that the big driver of happiness is earned success: a person's belief that he has created value in his life or the life of others.Redistributionists always make the argument that relative income is a huge driver of unhappiness--that poorer people are unhappier than richer people simply because they have less money through no fault of their own--and thus we can get a happier, fairer society by equalizing incomes. This is based on a colossal misreading of data and a whole lot of ideology. The truth is that relative income is not directly related to happiness. Nonpartisan social-survey data clearly show that the big driver of happiness is earned success: a person's belief that he has created value in his life or the life of others. Of course, in a capitalist system, earned success is often rewarded financially, so people who have earned a lot of success tend to have more money than others. But it's the success, not the money, that does the trick. (We show this by comparing the happiness of people who have the same level of income but have different perceived success levels.)
The system that enables the most people to earn the most success is free enterprise, by matching up people's skills, interests, and abilities. In contrast, redistribution simply spreads money around. Even worse, it attenuates the ability to earn success by perverting economic incentives. Free enterprise is essentially a formula not just for wealth creation, but for life satisfaction.
LOPEZ: Are free enterprise and big government natural enemies?
BROOKS: There are some things that government does well. When the U.S. government was fighting Nazi Germany and Imperial Japan, it was the champion of freedom in the world. It took a big government to win World War II. But it takes a smart one to realize it is only the entrepreneurialism of individuals that can deliver thriving economies and human flourishing. Government has a role, of course, such as enforcing the rule of law. But when it takes resources out of the hands of innovators and risk-takers, when it regulates small businesses out of existence, when it favors crony corporations instead of entrepreneurs, when it taxes corporations so much they move abroad--then, yes, big government becomes the enemy of free enterprise.
LOPEZ: We're always told that free enterprise is merciless. Isn't it the source of misery for everyone but the guys at the very top? (And of course they are guys, because everyone knows women are oppressed in the American economy.)
BROOKS: Absolutely not. The data show that a poor man who earns his success and believes he has a chance to get ahead through his own efforts--that man is happier than a "guy at the very top" who does not feel he has earned his success (or that anyone really can). And it's as true for women as it is for men. Free enterprise does not bow to gender, class, race, or ethnicity. It rewards hard work, dedication, initiative, talent, and street smarts. It's truly a force for liberation, not oppression.
LOPEZ: Is big government always an enemy of conservatism? And of a lot of what makes America America?
BROOKS: Well, as I said earlier, not when the government is defending American interests and liberties. But when the government takes over large parts of the economy that could be better run by the private sector, when it brings the top down simply to level outcomes, and when it picks the winners and the losers and makes markets fail, it is a problem not just for conservatives but for Americans in general. Government's role is an important (but restricted) one: protecting the environment in which honest people can earn their success.
LOPEZ: You talk about the "soul" of America" being "at stake." Is there even a consensus about what exactly that soul is? Do we even all want her to have a soul? And can I call her "her"?
BROOKS: By "soul" I mean the essence of what it means to be American. And yes, there is a fairly broad consensus, a shared understanding of what makes us American. In the mainstream--among at least 70 percent of Americans, according to nonpartisan data sources--there is a strong belief in liberty, equality of opportunity, and entrepreneurship. In other words, the free-enterprise system is understood as being more than an economic alternative--it is understand as being the center of our culture.
LOPEZ: What is the "30 percent coalition"?
BROOKS: The last question hinted at the answer to this one. The "30 percent coalition" is a term I coined for the minority in this country who do not like or support our free-enterprise culture, and who seek to change it for the rest of us. The 30 percent are led by the usual suspects--opinion-leaders in academia, the media, the entertainment industry, and so on. All the data available tell us these are among the most radical players in the battle against our culture of free enterprise. But adding them all up doesn't get us to 30 percent. The ranks of the coalition are swelled by others, especially young people, who have not (yet) experienced the depressing realities of a redistributive economy. A January 2010 Gallup poll found that a majority of Americans between the ages of 18 and 34 actually hold a positive view of socialism. Which probably makes sense, since the only socialists they've seen are their professors at college.
LOPEZ: What's the "Obama Narrative," and what's so wrong with it?
BROOKS: The Obama Narrative is the administration's basic account of how we got into the financial crisis of 2008 and how President Obama said he would get us out of it. It blames Wall Street and weak regulation for getting us in--and promises big government and strong regulation to get us out. It's not accurate. Ill-advised government policy was responsible for a large part of this mess (particularly the federal mandates for Fannie Mae and Freddie Mac to ramp up their lending even to people who had sub-par credit). Bigger government will not clean it up. The enterprise, initiative, and ingenuity of the American people will--if we allow these forces to work.
LOPEZ: Are you a defender of economic inequality? Isn't it the cause of misery?
BROOKS: Unequal outcomes don't make us miserable. Americans like success stories--they feel they can succeed, too. Misery comes from thinking you have no chance to improve your lot in life, no chance to get ahead through hard work and drive. If you approve of people getting big rewards for big efforts, that's not defending economic inequality--that's defending fairness. A fair system is not one that levels outcomes--it is one that rewards hard work, merit, and excellence (while penalizing free riding and laziness). Fairness is a concept that we in the free-enterprise movement have to take back.
Incidentally, none of this is to suggest that we can't ever be in favor of minimum basic services for people, which might be necessary to allow citizens to exploit opportunity. Even Hayek noted that this is can be a legitimate competency for government. But protecting people from starvation is very different from what the welfare state increasingly focuses on today: redistribution for the sake of equality ("fairness and balance" in our tax code), social engineering (everybody deserves a mortgage, no matter how lousy his credit), and policies intended to take the downside risk out of our decisions (bailouts).
LOPEZ: You write that "People are surprisingly satisfied with their jobs in America." How can that be so? Everyone seems to tell us otherwise.
BROOKS: I know, it's surprising, but it's true. A great deal of data show that Americans are overwhelmingly satisfied with their jobs, and this doesn't depend on education or even income levels. And Americans in general are much more satisfied with their jobs than Europeans. According to the International Social Survey Programme, we are 52 percent likelier than the Germans, 42 percent likelier than the British, and about 190 percent likelier than the Spanish to say we have complete job satisfaction.
LOPEZ: Is it fair to say that conservative economic policy is as bleeding-heart as the Left portrays itself as being? That it actually could tackle poverty if truly implemented? Or is that way too simplistic and idealistic?
BROOKS: If by "conservative economic policy" you mean free enterprise, then yes. It's absolutely about the heart. Free enterprise promotes human flourishing and individual achievement, earned success and personal well-being. These are the arguments I make in the book--and the reason some have even characterized it as a self-help book. It doesn't tell you how to get rich or win a promotion or get elected to office or win friends and influence people. But it tells you how you can pursue happiness--and why free enterprise is the best system to make that happen. Entrepreneurs really are the New Age radicals, tapping into the transformative power that comes from striving, achieving your potential, and creating value in your own life and the lives of your loved ones. The fact that it also produces the most explosive economic outcomes, for individuals and societies alike, is secondary (although nice).
LOPEZ: How important is free trade in this new culture war?
Free enterprise promotes human flourishing and individual achievement, earned success and personal well-being.BROOKS: It is important. Free trade has been responsible for the greatest increases in prosperity for the poor all around the globe. Since 1950, the volume of merchandise traded worldwide has increased by a factor of 27. This has led to rising living standards for the people of China, India, Brazil, and many other places in the developing world--and for Americans too. And there's another benefit. Free trade among nations also fosters cross-cultural understanding and the growth of democracy and civil society worldwide. Unfortunately, we currently have an administration that is not clearly committed to free trade because, many argue, of its political debt to labor unions.
LOPEZ: You use the phrase "world stewardship." How do conservatives reclaim the language of talking about these things? We're so often buying into others' frameworks. You're not.
BROOKS: To me "world stewardship" means being cognizant of the fact that we are blessed in America with great abundance, having the wisdom to understand why, and then sharing the means to that abundance. I strongly believe that what will keep America strong is (1) a deep confidence that our success as a nation is earned, (2) a national willingness to share the means to prosperity--the free-enterprise system--with others around the world, and (3) an ironclad resistance to policies that will mortgage away our system from our children and grandchildren. This is world stewardship. In the book I talk a little about actual policy prescriptions that do these things, and I refer readers to works by scholars who really get it, like my colleagues Mauro De Lorenzo and Glenn Hubbard.
LOPEZ: So how do we stop America's current slide toward Europeanization? That's a big question, I realize.
BROOKS: One way is simply to point out the ethical differences between the Greek and the American street today. In the past month, Greek citizens have rioted and gone on strike against the government. Why? Despite the worst economic conditions in years, labor unions and state employees are demanding that others pay for their early retirements, lifetime benefits, and lavish state pensions. In America, by contrast, our tea partiers demonstrate not to get more from others, but rather against government expansion, bloated government debt, bailouts, and a government overhaul of the health-care industry. In other words, the tea partiers are protesting against exactly what the Greeks are demanding. It is a near-perfect example of American exceptionalism.
LOPEZ: Why do social conservatives need to care about the fate of free enterprise?
BROOKS: Our founders wanted Americans to be the freest people in the world, and Alexis de Tocqueville believed they had succeeded. Liberty is more than a theory, though--it is a value to be practiced. And the way we practice liberty in our workaday lives--the way we express our values as we support our families--is through free enterprise. It is fundamentally a cultural issue in itself, and bound up in what each of us sees as a moral, equilibrated life.
LOPEZ: How was Scott Brown "in touch with America's mainstream"? And why is that an important lesson for politicians who want to win this November?
BROOKS: Scott Brown did not win by being a Republican apparatchik. He won because he struck a chord that resonated with the mainstream in his state--and that chord was his faith in the ability of free enterprise to get us out of the current economic malaise. In his words, "What made America great? Free markets, free enterprise, manufacturing, job creation. That's how we're going to do it, not by enlarging government." The data show that 70 percent of Americans--and, clearly, a majority of folks in Massachusetts as well--believe these things.
LOPEZ: You wrote in the Washington Post recently that "Brown's victory--and Rand Paul's triumph in Kentucky's Republican Senate primary last week, for that matter--are but warning shots in the burgeoning culture war. The most intense battles are still ahead." What do you mean? What should we be preparing for?
BROOKS: The Brown and Paul victories are harbingers of more struggles between those who put their faith in government and those who prefer to trust the abilities of their fellow Americans. They will be repeated all across the country. That's what we should be preparing for--in effect, the playing out of the subtitle of my book, "How the fight between free enterprise and big government will shape America's future."
LOPEZ: Has Scott Brown been to AEI? Has Rand Paul? Do you want to get more candidates and officeholders over there?
BROOKS: The answers are: No, No, and Yes. AEI conferences, seminars, and keynote addresses feature candidates and officeholders from all across the political spectrum--from former vice president Cheney to Treasury Secretary Geithner in the past months. But a major premise of The Battle is that it is principle--not short-term political power--that ultimately must carry the day. AEI is less interested in candidates in pursuit of raw political influence than in those who can best articulate the principles of sound policy based on our shared values.
LOPEZ: What might Tocqueville say about democracy in America, circa 2010?
BROOKS: Where the ruling class seems to be battling the soul of America, while polls suggest that the majority of voters are opposed to the transformation afoot? It doesn't make a whole lot of sense, does it?
Tocqueville would be struck by the fact that a large section of our population--a minority, yes, but still a large proportion--have abandoned the notion of American exceptionalism. And they're trying to get the rest of us to do the same. The exceptionalism of America, the things that made this country different from all others, was a phenomenon Tocqueville understood deeply. It's what bound our communities together in this great experiment in republican government. And he would be dismayed, I imagine, to see how some are so willing to sell that inheritance for a mess of (government) pottage.
LOPEZ: What do you think November looks like, and will it truly make a difference?
BROOKS: In the free-enterprise movement, we are not interested in party political headcounts (or at least we shouldn't be). I'm a registered Independent myself. And for me, the election of more Republicans to Congress is not necessarily the solution. Not if it means Republican lip service to free enterprise. If that happens, then the mid-terms will truly not make a difference--they might even set progress back. Whatever their party, I'm hoping for new members who share the values of freedom, opportunity, and entrepreneurship that are the bedrock of America--the reasons for our past success and the keys to our future prosperity.
LOPEZ: What do you want to be hearing from a Republican presidential candidate?
BROOKS: I want the same thing from Republican candidates as I want from Democratic candidates. Namely, that they are in favor of free enterprise, not redistribution. That they stand for equality of opportunity, not equality of outcome. That government's job is to stimulate prosperity rather than simply to treat poverty. And that they believe America is an exceptional nation--a gift to the world.
LOPEZ: I asked about Republicans, but Republicans have been part of the problem, too. Is there any chance a Democrat might fight the battle for America's soul?
BROOKS: Every chance, I would hope. Both parties have created our current problems. And both can become part of the solution--by championing the beliefs and values of mainstream America. The 70 percent majority that favors free enterprise contains a lot of Democrats among our citizens, and it can include Democratic politicians, too.
LOPEZ: Is it possible to be too hard on Republicans and the role they've played in setting us up for the transformation Democrats today are advancing?
In the free-enterprise movement, we are not interested in party political headcounts (or at least we shouldn't be)BROOKS: To win this struggle, we've got to be forthright in our opposition to all who are undermining American free enterprise and advancing big government. Earmarks are earmarks, for example--and there were at least 55,000 passed during the last administration. Again, the freest nation in the world was founded on principle, not the pursuit of power. If Republicans abandon the former, the electorate will sooner or later make sure they lose the latter. That's probably the most important political lesson from 2006 and 2008.
LOPEZ: What do you mean when you write, "The Obama Narrative's fiction about the innocence of homeowners is almost as pernicious as its fiction about the innocence of government"?
BROOKS: By 2000, everybody knew something was up when they saw friends and neighbors with crazy mortgages. Early in the decade I sold my house to a guy who got a 100 percent loan, and I thought, "If house prices fall, I bet he'll walk away from his mortgage." And of course, when the bubble burst, people walked away in droves, which was at the root of the financial crisis.
So who's to blame? The government with its housing policies, for sure. Mortgage originators making dangerous loans, of course. Private firms that were overleveraged, absolutely. But Main Street is hugely to blame, too.
Too many homeowners bought when they should have rented, or bought more than they could afford. And when the market went belly-up, many were willing to stick someone else with a loan they had signed up for. Economists now estimate that at least a quarter of all defaults were "strategic"--owners could have made their payments but chose not to. Adding insult to injury, the data show that many of the defaulters had lied on their original loan applications--in the run-up to the crash, as many as 70 percent of those who defaulted during the first three months of their mortgages had made fraudulent representations. The crisis exposed a huge ethical problem among a lot of ordinary Americans.
LOPEZ: Would your book have been published if the financial crisis hadn't happened?
BROOKS: Yes. There wouldn't have been an Obama Narrative, but statism and redistribution would still have been on the rise, and AEI would be fighting for free enterprise.
LOPEZ: Everyone seems to talk about the progressives these days (thank you, Glenn Beck). How much are they to blame?
BROOKS: I don't use the word "progressives" in the book. Sometimes I do use it when I write, though, because labels matter less than ideas. Leftists can call themselves "progressives," or "liberals," or "Power Rangers," or whatever they want--it's fine with me. I just want to take on the merits of redistributionism and statism.
LOPEZ: What exactly is a think tank? (I feel as if probably one-half of one percent of Americans have the time to think about the fact that such things exist!) Is that how AEI can best be described? Who belongs there, and what sort of interactions do you have with the "real world"?
BROOKS: Think tanks have been called "universities without students," and AEI does have the ethos of an academic institution: a lot of intellectual freedom and high expectations for both rigor and integrity. For AEI, though, it's perhaps more accurate to say we're a "university with values." AEI's mission is to expand liberty, increase individual opportunity, and strengthen free enterprise. We're lucky to have 200 of the best minds in America among our scholars and staff at AEI, working together for this mission. Also, we're actively working to build our education programs, so maybe the difference between our think tank and a university will shrink even more in the coming years.
LOPEZ: In all honesty, where do you see America in ten years?
BROOKS: America in ten years? I know I'm in the minority, but I'm very optimistic. I think there's a high likelihood we will look back at the current time and say that it was the beginning of the free-enterprise movement, when citizens rebelled against the expanding state, the moral case for free enterprise became popular and salient, and we began to develop the policy ideas to match. And I think--I hope--we will say that AEI was at the center of this renewal.
LOPEZ: How has AEI changed since you've been at the helm? What do you see as its role in a movement of many think tanks?
BROOKS: Philosophically, there isn't an inch of difference between me and Chris DeMuth (AEI's 22-year past president). Chris built the institution on the basis of the core values of freedom, opportunity, and entrepreneurship, and that hasn't changed. He also saw to it that the institute's work was driven not by a centrally planned research agenda, but rather by the creativity of great scholars like Kevin Hassett, Fred Kagan, Peter Wallison, Tom Donnelly, Michael Novak, Michael Rubin, and Rick Hess. That hasn't changed either. The changes you can see at AEI today primarily involve our need to keep our media up to date to carry our message. That means keeping up continuous innovation and experimentation in communications, creating new education programs, and always making sure that our moral purpose is clear. It is for this last reason that I wrote The Battle. It is basically a 40,000-word mission statement for AEI and an introduction to the policy analysis our scholars give to America.
LOPEZ: You talk a lot about entrepreneurship in your book. Have new media been an important example of this? I've noticed AEI has made itself more online-present since your arrival. I assume by design?
BROOKS: We've made great big strides in new media over the past year and a half. AEI is in the business of ideas that matter. And wherever the debate is--from the pages of the Wall Street Journal and National Review to the broadcast media to Capitol Hill--AEI will be in the thick of it. Today, with so much of the debate unfolding in the blogosphere and other new media, AEI is participating fully there, too. In fact, our improved communications abilities are really what I think has changed most at AEI in the past couple of years. We've focused on this for the following reason: If research is worth doing, then it is worth talking about. And new media have allowed us to find new audiences and talk to them about what we are doing.
LOPEZ: One can't interview you without asking: How do you go from being a professional French-horn player--in Spain--to being a conservative intellectual and ringleader?
BROOKS: I get this question all the time (and I usually punt on it because it's pretty convoluted). My path was not traditional--except for the fact that America's tradition of free enterprise makes almost any career trajectory possible. But anyway, here it is in a nutshell.
I grew up in Seattle. My mother was an artist, and my father was a math professor. As a kid I had only one goal: to be a professional French-horn player. I dropped out of college at 19 (a decision that the college and I agreed would be of mutual benefit), joined a chamber-music group for a few years, performed a bit with the great jazz guitarist Charlie Byrd, and then took a position with the Barcelona Orchestra. I got married in Spain, and after a few years my wife, Ester, and I moved back to America. Within a month she informed me--after getting multiple job offers in spite of her imperfect English at the time--that the United States was clearly the greatest country in the world for people who wanted to work. Mind you, she is from a hard-red Catalan family, so this was pretty paradigm-shifting stuff.
At 28, while still in the music business, I went back to college in my spare time and studied economics and math. Around this point I stumbled across the work of a scholar who seemed to me the cleverest person ever, a man I had never heard of named Charles Murray, who worked at some "think tank" called the American Enterprise Institute. I dug into the work of other AEI scholars and was completely transfixed by their views about free enterprise. I ultimately left music at 31 to start a Ph.D.--to see if I could someday do work like those crazed geniuses preaching freedom at that mythical think tank. After finishing grad school I taught for a decade (including seven years at Syracuse, a wonderful university that treated me with great generosity despite my heterodox views and Milton Friedman T-shirts), learned a lot more math and statistics, wrote some books, and ultimately wormed my way into AEI as a visiting scholar and wrote about the economics of charity and happiness.
I was completely in love with AEI and loitered about constantly. I suspect they made me president because it was easier than getting a restraining order to keep me off the premises. I feel deeply blessed every day to have been given the opportunity to serve the organization responsible for the ideas that quite literally changed my life. It's actually pretty strange working with my intellectual heroes. I try not to appear too awestruck, though, because my colleagues would probably exploit my loyalty by having me pick up their dry cleaning and such.
LOPEZ: What does your previous career have in common with your current one?
BROOKS: Creativity and freedom can express themselves in any number of ways. Bringing ideas to life in service to my values is what thrilled me in music, as an academic, and especially in the leadership of AEI.
Arthur C. Brooks is the president of AEI. Kathryn Jean Lopez is editor-at-large of National Review Online.
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