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May 31, 2011

7 Principles of Fiscal Conservatism

N.B. This blog will be migrating to wordpress. Please find me there.

Let’s begin with fiscal conservatism, then. It begins with integrity. You do excellent work. Not good work: excellent work. You know that your reputation, livelihood and security depend on the work you do. You take pride in the quality of your work: what you do and how you do it. You mind the details. You build good relationships, preferably with others who do excellent work. Where that is not possible – because you know the world is not Utopia and is made of all kinds of people with different priorities and abilities – you make sure those relationships do not imperil your work or reputation.

Your goal in doing good work is not early retirement. Why would you live to stop doing something that you love doing, are good at doing and that meets a need? Good work is a very good answer to the question of the meaning of life. It is part of what is meant by a good life. If your work is so onerous that you can’t wait to stop, why are you doing it? Good work is its own reward. You preserve capital: your energies are finite, too.

Conserving your capital means conserving your money, your employees, your supplies, your time and your reputation. You are a grown up: you know life will challenge you. Obviously, even with all precautions taken, you can still lose your capital, but you don’t risk it intentionally or capriciously. Victims of tsunamis and earthquakes and thieves may have been fiscal conservatives, but life just isn’t fair. Living is risky enough – which is exactly why you don’t risk your capital, why you don’t live on credit. You save for rainy days because, sometimes, it floods. You take care of your employees and your customers if the former are doing good work and the latter pay their bills because you have no business without them. You set priorities. You fix problems, you don’t deny them or cover them up. Because you mind the details, you know where you can afford to be flexible: you know the potential downside. Perfect storms happen, but you don’t sail into questionable weather with no bilge pump, a radio that’s shorting out and a rookie crew.

The concept of “Too Big to Fail” is as antithetical to this – or, I would say, any – understanding of conservatism as it can be. The very idea of pumping more money into a bad investment, or into a company or person who has proven to be untrustworthy, is ludicrous from a conservative point of view. Conservatives don’t put that many eggs into one basket to begin with. Conservatism assumes that we conserve those resources on which our lives and livelihoods depend; they are finite and the world makes us no guarantees. If you have children, they will need them, too; conservatives do not leave their families in the lurch. Fiscal conservatives know the value of a worthy struggle: they may not give their children a free pass, but they won’t handicap them by using, much less wasting, what their children will need to make a go in a difficult world.

The same principle makes monopolies as anathema to fiscal conservatives as a table with one leg. There may be arguments to be made for one company taking over another, but there are limits. There is stability in diversity. There are no synergies in monopolies; no serendipitous cross-fertilizations can occur in monocultures.

Gratuitous spending is no better. It’s waste, too. If there is anything more antithetical to conservatism than waste . . . I’ll get around to it. Waste, inefficiency and disposability are all predicated on the assumption that There Will Always Be Enough. Or, perhaps, on its corollary, that We Will Always Be On Top. If conservatism is, at its foundation, the principle Thou Shalt Not Squander, then waste, inefficiency and disposability are not conservative values. In fact, they aren’t values at all: they are sloppiness and short cuts in business suits.

Conservatives don’t buy cheap crap. They don’t make it or sell it because they have pride. They don’t buy it because it doesn’t work, it wears out too soon, it’s a bad use of our limited resources, and it supports those doing mediocre work at the expense of those who deserve our business – Any Questions? Every basic tool should be built to last the better part of a lifetime. Planned obsolescence is just Orwellian double speak for shoddy workmanship. It sure as hell isn’t conservative. It isn’t liberal, either. It’s bad business. Making something designed to fail lacks integrity.

Conservatism does not write blank checks, so it cannot be considered either pro-business or anti-business. It knows that business can be done well or poorly. It is pro-good business. It demands that respect and patronage be earned.

Fiscal conservatives invest first, and then spend. Investment is different from speculation. Speculation looks for a quick return on money in the next quarter, if not in the next hour. Investment stakes a part of our livelihood on our values. It provides support to a long-term venture that needs it to thrive. Short-term successes of others based on shady or shoddy practices do not distract conservatives. Investment for the long term is a stabilizing influence on an economy. Fiscal conservatives know to avoid anything that reeks of get-rich-quick schemes. They deride those who take risks to make themselves rich quickly, instead of making provision for their values – and their children – for the long haul.

Investing contrasts with spending money on industries and companies that don’t need it, that are not competitive, and that are not investing in their own R&D. That is not conservative, it’s preservative: it maintains something in a state it was in while everything around it changes. Like putting something in formaldehyde: it’s no longer alive, but it looks pretty much like it did when we first put it in there. Think of the American auto and energy industries. Think of any company or industry that has a big lobbying presence in Washington. The ownership of Washington by big business has been bad for government, but arguably not as bad as it has been for business.

It occurs to me that there is another, unrelated school of thought that shares many of the principles of fiscal conservatism as I have described it. It is called Permaculture.

Permaculture is a design concept with broad applications that is best known and most widely applied to gardening and agricultural practices. In a nutshell, what brings it to mind is Permaculture’s insistence that, if you frontload your project with a lot of work in its early stages, and mind the inflow and outflow of resources all along the way, you can build a system that, barring disasters, will take care of you for the long term with a gradually declining need for long hours of work. In Permaculture, waste is defined as being a resource in the wrong place at the wrong time. It might also be described as a resource as viewed by someone without sufficient imagination to recognize its usefulness. Permaculture is also all about preserving the energy within a system for as long as possible, encouraging synergies, and not emptying the system of the resources that make it run in the first place. It saves seeds: very conservative.

Here are the principles of fiscal conservatism as I see them:

  1. The World is Risky: Don’t Make it Riskier.
  2. Thou Shalt Not Squander.
  3. Do Good Work.
  4. Reward Good Work.
  5. Invest First.
  6. Do Not Tolerate Waste.
  7. Save Your Seeds.

I contend that these principles derive from the meaning of the words Fiscal Conservatism. Insofar as policies do not reflect these principles, I don’t see how, absent Orwellian doublespeak, they can have any meaningful relationship with the term.

I further contend that policies derived from these principles are needed now, are timeless, and the lack of any support for them from either of America’s main political parties is what has landed us in the crisis we still have not acknowledged, much less addressed.

1 comment:

  1. Actually, this "permaculture" you mention and describe brings to mind a story I recently read, showing that farmers don't mind "going green" as long as it's referred to as "conservation". It's all in how we dress it up.

    Two thoughts: Wouldn't you think any political party, in any country, would be for "going green" or curbing waste (read: fighting global warming or climate change) since it's all about conserving and--wait for it--SAVING MONEY?

    You'd think so but alas, not in their Amerika.

    Second, wouldn't it be nice if fiscal conservatism in this same Amerika were combined with true political conservatism so not only would they truly want and work for smaller government, but they'd also want to keep it out of our personal lives, especially as it relates to a) our bedrooms (butting in on sexual relations between consenting adults) and b) a woman's or couple's very private decision to have an abortion since, after all, they are and have been legal in this country since 1973?

    Hey, I can dream, can't I?


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