Hardening California’s ‘Progressive’ Wall

Earlier this month, Gov. Gavin Newsom acknowledged that the COVID-19 pandemic could be the crisis that his party has been looking for to permanently establish a progressive “nation-state.”

“There is opportunity for reimagining a progressive era as it pertains to capitalism,” Newsom said earlier this month, when asked by a Bloomberg reporter if current circumstances might bring “a new progressive era and opportunity for additional progressive steps.”

“So yes, absolutely,” Newsom continued, “we see this as an opportunity to reshape the way we do business and how we govern.”

Progressivism doesn’t “pertain” to capitalism in any way. It is in fact hostile to and incompatible with capitalism, which is not a system but simply the outcome if people are free to exercise economic liberty.

Left alone by government, economic actors will use their capital to increase their wealth. This is the free market at work and is a benefit to all.

Central planning is the heart of progressivism (forgive the metaphor, for progressivism has none but a stone cold heart), while the core of capitalism is freedom. Progressives are uncomfortable with human nature that seeks its self-interest, and instead insist that it “can be as easily reshaped as hot wax” and molded “into anything they imagined,” says Arthur C. Brooks, who for a decade was president of the American Enterprise Institute.

“Advocates of free enterprise,” however, don’t share that view, says Brooks. They “believe that creativity, enterprise, and ingenuity are essential parts of human nature. Capitalism aims to take advantage of the self-interest of human nature, knowing that the collateral effects will be a more decent and benevolent society.”

Which view, then, is more threatening, more callous, more apt to creep toward a tyrannical state? The one that believes that human nature must be altered, or the one that believes human nature, though flawed, is best left untouched by political engineers?

The answer seems obvious, yet, as economist Richard Ebeling reminds us, capitalism’s enemies have successfully portrayed it as a system “of unfairness, exploitation, undeserved privilege and power, and immoral profit making.”

It’s an imagined boogie man, of course. An economy’s power, its potential for growth, is in its free flow of capital.

“There are no companies and no jobs without investment first,” writes RealClearMarkets editor John Tamny, “no entrepreneurs” and no “job-creating companies.”

How, then, would progressivism, with its enmity toward the fundamentals of capitalism, ever fuel an economy? We’ve seen what happens when investment is directed by politics. Though immense sums have been parked in what is called socially responsible investing — as well as environmental, social and governance (ESG) investing, a description that’s lost its meaning as it has become “broad enough to mean just about anything to anyone” — it underperforms.

We’ve seen the California Public Employees Retirement System, the largest public employee pension fund in the nation, jeopardize its future by making political investments, and the steep costs to taxpayers who paid for the Obama administration’s failed “investments” in green energy.

On the other side, progressives make it a point to steer clear of investing in businesses and industries that don’t match their ideals, and actively campaign against others investing in them. This isn’t capitalism, but progressive activism that wants to enjoy capitalist-driven prosperity while at the same time railing against the source of wealth.

Progressivism is clearly appealing to many in California, but it’s not a sustainable system. It will eventually run out of other people’s money, drive out businesses of all sizes, kill too many jobs, and create a soul- and economy-crushing dependence on government. It’s an ugly reality this state needs to recognize before it’s too late.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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