Crisis, Contradictions, and Conservative Controversies in Contemporary U.S. Capitalism

This paper presents a critique of the conservative economics that became ascendent at the beginning of the 1980s. To understand the rise of conservative economics and its implications, we begin with a brief discussion of the current economic crisis. We then turn to the substance of conservative positions, giving primary attention to two controversies among conservatives which reflect the limits and contradictions of contending conservative programs. First, we examine the conservatives' inability to agree upon an approach to the macroeconomic issues of inflation and unemployment. We counterpose here the stance of traditional conservatives to that of "supply-side" economists, emphasizing both the arguments of the supply-siders and the available empirical evidence that relates to their claims. Second, we examine the conservatives' differences over the role that government should play in responding to the structural and institutional aspects of the current crisis. In this arena, "free-marketeers" confront the advocates of actively interventionist pro-capitalist programs, usually promoted under such rubrics as "reindustrialization." We conclude the essay with a brief assessment of the significance of the divergent conservative positions in promoting and shaping the economic policies of the Reagan Administration.