Acton Institute PowerBlog

How Christian conservatives are breeding Bolsheviks

Earlier this week I asked why conservative Christian outlets are increasingly promoting socialist ideas and policies. Yesterday, my friend Jake Meador weighed in to help provide some perspective on this trend. Jake himself is the editor of an online Christian magazine—Mere Orthodoxy—that would be described as traditionalist conservative. While he is not a socialist, he admits he is somewhat sympathetic to the “emerging leftism” of young Christians, especially those within Catholic and evangelical circles.

I appreciate how Jake has extended and expanded the discussion and wanted to reply as thoughtfully as possible. Because there’s a lot to say, this is the first of two (or maybe three) posts responding to his article, “Young Christians and the Specter of Socialism.”

The Specter in the Bathroom

The specter of socialism isn’t new, of course. Long before it haunted young Christians on the Internet, it was a concern of the business community. In the 1930s, Scot Tissue ran an advertisement asking, “Is Your Bathroom Breeding Bolsheviks?”

Employees lose respect for a company that fails to provide decent facilities for their comfort.

Try wiping your hands six days a week on harsh, cheap paper towels or awkward, unsanitary roller towels — and maybe you, too, would grumble. Towel service is just one of those small, but important courtesies — such as proper air and lighting — that help build up the goodwill of your employees.

Bolsheviks were members of the majority faction of the Russian Social Democratic Party, which was later renamed the Communist Party. No one knows how many people, whether in Russia or the U.S., became Bolsheviks because of cheap paper towels. But there are plenty of people who are attracted to socialism because they feel they were treated unfairly, whether by businesses or the market economy.

Commenting on the ad, sociologist Gwen Sharp says,

Preventing the spread of communism isn’t, then, just about rooting out ideologues and rabble-rousers. The message is that becoming a Bolshevik may be a response to poor working conditions or treatment by management, and thus employers have a role to play in discouraging it by actually paying attention to potential causes of dissatisfaction and addressing them (in the bathroom, anyway), rather than simply a moral failing or outcome of ideological brain-washing.

This is an important point, and one that is often dismissed by advocates of free enterprise. But as I’ll try to convince you, older conservatives (like me) are at least partially to blame for pushing young Christians toward socialism. Before I make that point, though, let me first engage in a favorite pastime of us oldheads: millenial-bashing!

Did Millenials Get Played by the Free Market?

In his article, Jake identifies two things driving the emerging leftism of young traditionalist Christians. “First, we think, with some reason, that we got played hard by the free market,” he says.

Many white, college-educated millennials (which describes a large majority of the trads) grew up in a context that free-market advocates hail as the closest thing we had to a Golden Age in 20th century America—many of us were born during the Reagan years and grew up during the Clinton administration.

At minimum, we can say that we grew up in a time with dramatically lower tax rates than at any other time in the post-war era and that we saw a level of economic growth which rivaled the 1950s. We think, rightly or wrongly, that we lived through a fairly free market era. And then we went to college. Many of us graduated in or shortly after 2008 and found ourselves chasing after jobs which no longer existed due to the Great Recession and struggling to service the student loan debt we had taken on because we were confident of securing a good job post-college.

We saw—and lived!—what a lack of regulation of banks did to the market. I graduated summa cum laude from a major university in 2010. I did not have a job that paid me a living wage until 2013. For two years after graduation, I worked jobs that paid minimum wage or slightly above that, including a teacher’s aid job at a local public school in which I was assaulted multiple times by students and was once sent home early because I was exhibiting signs of a concussion after being headbutted by a student. And amongst my friend groups, I’m probably one of the luckier ones.

In my next post I’ll address his point about free markets causing the Great Recession. For now, I want to look at the more personal angle of how markets affect the lives of young twentysomething millenials like Jake.

For now, though, I’ll go along with the implied assumption that his generation suffered a form of economic structural injustice. As it relates to economics, structural injustice could be defined as occurring when outside forces unjustly limit some person’s opportunities to enact their morally legitimate plans. Almost all evangelicals—whether liberal or conservative—agree that structural injustices still exist and that they must be opposed. Where we disagree is about what forms of structural injustice are most pervasive and how they should be corrected.

For instance, as a conservative I believe one of the best ways to compensate for structural injustice is to increase order and individual freedom. Also, as an advocate of free markets, I believe markets can help us achieve that objective. Why? Because free markets are, at least in part, information systems designed for virtuous people.

Can You Hear the Market Calling?

Remember those old Western movies where a scout-tracker (usually a Native American) has an uncanny ability to track people using the slightest of clues? Somehow, just by looking at a bent blade of grass or a fragment of a hoof track they can tell not only that the bad guy is headed north, but that he has gout and walks with a limp. The markets are similarly able to process an uncanny amount of information from the smallest of clues.

A market serves as an information system in that it creates, collects, filters, processes, and distributes information about the economic preferences of people within a society. The “market” is simply a summary term for a variety of voluntary exchanges of tangible commodities or nontangible services that are undertaken between two people or between groups of people represented by agents. The information in this particular system allows people to know whether and under what conditions they are willing to engage in the exchange. These exchanges are engaged in because both parties benefit; if they did not expect to gain, they would not agree to the exchange.

To say that a market is a “free market” is to say, in part, that when it functions as an information system (creating, collecting, filtering, processing, and distributing information) it largely does so free of distortions. In other words, we can think of a free market as a market that is free of distortions.

While it is possible to have individual or small markets that are free of distortions (e.g., I trade with you and we are both honest people), when the markets became larger or are aggregated together, it becomes much less possible to prevent distortions from entering the system. As Christians we recognize this is a natural outcome of living in a sinful world. But where liberal and conservative evangelicals tend to disagree is about what mechanisms are necessary or most useful in correcting such distortions when they occur.

Conservative evangelicals tend to believe that, when structured properly, the markets themselves tend to provide their own self-correcting mechanisms. We believe this is typically the preferred form of weeding distortions from a market. However, unlike some other groups (such as Christian anarcho-capitalists) we also recognize there are rare occasions when market distortions can only be corrected by governmental intervention.

While we believe government intervention in markets should be rare and limited, liberal evangelicals tend to prefer that such interventionism is common and as expansive as necessary.

Another disagreement we have is who is to blame for ignoring the information the market is providing us. Conservatives understand that we ignore market signals at our own peril, while those who blame the “free market” for their hardships are often those who ignored what the market was telling them because it interfered with what they wanted to do.

Back to the Future with Jake

Since Jake provided a personal example, I hope he won’t mind if I use his experience to illustrate this point. I think his experience is common enough that it can serve as an archetype for what many people in his generation have gone through.

As Jake’s bio attest, he studied English and History at the University of Nebraska-Lincoln and graduated in 2010. At the time, a year’s tuition at the school was roughly $6,000 and housing about $10,000 a year. Let’s add another $3,000 a year for books, fees, and misc. expenses. That comes out to be about $76,000 for his college degree, presumably financed mostly by student loans.

Assuming he graduated in four years, he will have started college on or before September 2006. That means Jake was, at the latest, in the first semester of his sophomore year when the Great Recession began in December 2007. By this point in his college career, he probably had about $28,500 in student loan debt.

Let’s go back in time to consider Jake’s fate and future.

The most devastating financial crisis of his life—or even his parent’s life—has just occurred, and he has to make a choice about the direction his life will take next. What signals are being sent to him by the market economy?

First, there is the price tag on his remaining education. If he chooses to stay in school he will be taking on an additional $47,500 in student loan debt. Second, there is the future expected economic value of his choice of major. Right now (2008), He’s planning on majoring in one of the lowest paying subjects—English. After a few minutes on Google he finds that the average starting salary he can expect is $34,000, maybe a bit less if he becomes a teacher in Nebraska (at the time, $30,844). The unemployment rate has just spiked to the highest in five years and the predictions are that it will be much higher by the time he graduates (spoiler: it does, with the national rate almost doubling to 8.4 percent by Graduation Day 2010).

The market is sending clear signals: the demand for English majors is low, and may be even lower by the time he graduates.

Jake has a number of choices, such as: He can delay college, get a job, and avoid taking on additional education debt; he can choose a major that is likely to be in higher demand; or he can move forward with his plan to get a degree in English and hope for the best.

We now know, of course, which path he chose. But even then it was clear that he was choosing a risky option since the market was sending Jake clear signals about the expected outcome of his decision. Not only did he ignore the market’s signal (cut him some slack, he was young) he blames the free market for the hardships he encountered! (This is especially surprising considering he took a job at a public school, an environment not known for being a bastion of free market enterprise.)

Even though the market sent him signals warning him about the path he was choosing, the market also came to his rescue. Yet rather than being ecstatic at his turn of fortune, Jake appears rather ungrateful, as if the market had somehow wronged him. Notice he says, “I did not have a job that paid me a living wage until 2013.”

Is the blame justified? Consider: after choosing one of the lowest paying college majors and deciding to remain in a small state (population of less than 2 million) where 45 percent live in rural areas during the greatest economic downtown in almost a century, Jake was still able to make a living wage within three years of graduation. And this is a reason to complain about the market?

What’s ironic is that Jake and others of his generation decry the moral hazard of the bankers that caused the Great Recession and yet excuse their own embrace of moral hazard.

Millenials Love Moral Hazard

Moral hazard is the lack of incentive to guard against risk where one is protected from its consequences. As we’ve shown, Jake embraced moral hazard by ignoring the obvious risk. Nevertheless, while he suffered for a few years, he was able through his grit, hard work, and intelligence to come out ahead. His story had a (mostly?) happy ending (and I appreciate Jake being a good sport in letting me use him as an example—which I hope he will still be after reading this).

But many other Americans in Jake’s situation will not be so fortunate. They have taken on massive unnecessary risks, most often by choosing to take on a gargantuan debt load to finance a luxury good (i.e., a liberal arts degree, non-professional graduate degree, etc.) before they even have a job that can pay their electric bill.

The terms “privilege” and “entitlement” are thrown around way too much nowadays. But there really are no better words to describe the mindset that believes the free market owes you a job making a living wage simply because you went deep into debt while reading Shakespeare’s plays for four years.

However, I don’t put all the blame on Jake and his peers, though. It is my generation (Gen-X) and the one that came before (the Baby Boomers) who taught them that they can be and do anything they want, that they don’t have to make life choices based on economic concerns, and that if they fail someone else should pay to make them whole. If Millenials have an inflated sense of economic entitlement, we old folks only have ourselves to blame for that.

But even more significantly, we created the structures that set them up for economic failure.

The College Degree as Distorted Market Signal

Let’s use college education as a prime example. Of the 55 million job openings between 2010 and 2020, only about 35 percent will require at least a bachelor’s degree. Even half of those, however, do not really require the education that a college provides. Instead, the degree is used as a signaling device for employers to identify people who have the traits they believe are necessary for success (e.g., intelligence, endurance). It is insane that we have young people taking on $75,000 worth of debt just to get a job earning $30,000 a year.

So why do we have such a bizarre system? In part, because of previous government intervention has distorted the signals that would naturally be sent by the market.

After World War II, the G.I. Bill made it possible for returning veterans to go to college. As happens anytime a third-party pays for a good or service, the demand for college exceeded what would have been the demand if people paid for tuition themselves. Within a few decades, the veterans who had gone to college started making college a requirement to get a good job at their firms. This lead to an increase in the demand for college which led to increased costs for tuition, housing, etc.

Many people began to realize they could not pay the increasing costs, so the government intervened once again with a solution: the government would offer to back low-interest student loans. This reduced the risk for financial businesses to offer the loans to those without much ability to pay them back and increased the moral hazard of students willing to go deep into debt to pursue their passion (or to put off entering the job market for four years).

The result has been that many Americans—at least those of us who would get a liberal arts degree—want to be able to pursue our own peculiar interest, get a piece of paper that testifies to our accomplishments, and to have the job market reward us for our choice. (NB: Here’s an alternative proposal.)

To those deep in debt, it seems especially unfair that the only work their B.A. in Medieval philosophy qualifies them for involves grinding Arabica beans at Starbucks. Since it can’t be their fault (they were merely following their life goals) the free market must be to blame. And since the free market is the problem, they believe some sort of government bailout (i.e., elimination of student loans) or other intervention must be the solution.

Jake is not entirely wrong in thinking his generation “got played hard.” But the blame does not lie with the free market. The blame is on us older Americans who’ve created the conditions that helped to “breed Bolsheviks.”

See also: How government regulation—not free markets—caused the financial crisis

Related: In October the Acton Institute will be sponsoring a conference titled, Toward a Free and Virtuous Society: Marxism a Century after the Bolshevik Revolution.