Morality's place in the market

My editor was writing a book about the US economy - the capital gains tax, budgets, the yield curve, and so on. He came bouncing in to see me, proud that he had finally decided on a title. "The Seven Fat Years is what I'm going to call it," he said. And looked at me meaningfully.

I shifted in my chair. Usually he talked to me about economic specifics. Whatever this reference was, it was lost on me and my progressive education. Disappointment. He gave me an accusing look: "How could you not get it?"

The editor was Robert L. Bartley of The Wall Street Journal. His reference was to the Bible and the years Joseph spent storing grain against a famine. Joseph's virtuous work sustained prosperity. In giving his book a biblical title, Bob was yoking together two sorts of thought that we moderns work hard to keep separate: morality and economics.

Bob died this month, at the age of 66. He was a big deal in the world of newspapers, editing the Journal for three decades. But his greatest contribution went beyond journalism into the intellectual world. It was to remind readers that free market policies are not merely efficient, or competitive. They also fulfill a moral - yes, at times even a religious - goal. It is not merely fun for man to live in freedom; it is also, Bob believed, right.

This sort of fervour was even more unfashionable in the 1970s, when Bob got his start as the Journal's editorial page editor. It was hard for younger staff members to figure out. Still, once you understood it you understood the "Bob-ian" universe - what did not matter and what did.

The list of things that did not matter was long. "Buzz" did not matter (if you were right, you did not need to be popular). Sounding like the old generation did not matter. Arms control did not matter (it was a distraction practised by moral relativists). Nice distinctions between communist leaders did not matter (they were all puppets). Current account deficits did not matter (they reflected manly growth). Race or religious preference did not matter. Age did not matter (he made 22-year-olds editorialists; when I was 25 he thought I was 40, and when I was 40 he thought I was 25). Staff leaving did not matter, even if they went to rival publications, as in my case; that just led to the more efficient dissemination of Bob's ideas.

Things that did matter included: defending scapegoats (Bob loved the friendless best); bringing down the Soviet Union (Ronald Reagan was correct - it was evil); preserving federalism in America (states were just as trustworthy as Washington); getting lower taxes (entrepreneurs were more virtuous than government officials); and restoring some version of fixed exchange rates (Richard Nixon, one of Bob's great villains, ruined the world by closing the Gold Window and ending the Bretton Woods arrangement).

Bob was serious about each cause but he was perhaps most serious about money. As a product of the Protestant farm belt, he had an intuitive understanding of the damage a faraway authority can do, be it a hierarchical church or a theological central bank. For a national capital to manage an economy like a puppeteer with a marionette sounded good but in reality it created demoralising and costly uncertainty. This was wrong.

Bob's monetary solution was an unusual one for a farm-culture man - fixed exchange rates - and it got him into trouble with his economic allies, especially Milton Friedman, a free-floater. That was all right. Bob relished a good fight.

In short, his job as he saw it was crusading. In the Bartley view, an editor did not sit passively at his newspaper. He drove it like a Jaguar car (nearing retirement, he even acquired one: it was racing green). To get results as an editor, you had to circuit the track relentlessly and stay ahead of the other cars. Bob once said it took 75 editorials - what British newspapers call leaders - to get a law.

He did get laws: laws about school vouchers, laws limiting regulation, laws changing financial markets. Most important of all these laws was "his" tax cut - the 1986 reform that slashed marginal rates and restored the US to relative competitiveness.

Bob's moral side took him and his team to unpredicted places. In the 1990s he launched a crusade in which he assailed President Bill Clinton personally for his immorality. This new campaign felt like a betrayal to some of his old free-market friends who believed, as classical liberals, that private affairs should stay private.

Not to Bob. To him, the connection between the anti-tax campaigns of the 1980s and the anti-Clinton campaigns of the 1990s was clear: both were about good character. If Mr Clinton did not have good character, he was not a reliable president.

This argument remains controversial. But it made an important point. Liberalism that has no moral checks leads to chaos. And libertarianism - unqualified faith in the free market and the selfish individual - is a babyish doctrine. Sometimes you had to acknowledge the importance of morals at home. And sometimes even free-market countries had to spend money and fight wars - against the Soviet Union, or Iraq - especially if they wanted to preserve free markets. Bob laid out these insights to help us navigate through what are turning out to be complicated times. Bless him.

© Copyright 2003 Financial Times

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