Michael Novak's Three Legged Stool

The response to my post on Conservatives and Progressives generated a rather long discussion on Facebook as well as a comment here, so some additional explanation of some of the ideas that form the basis of conservatism is in order, particularly because they may help bridge some of the gap with Progressives.

Michael Novak argues that Western liberal democracy is a three-legged stool built on economic freedom, political freedom, and moral restraint. If any one fails, the stool collapses.

If, for example, we lose economic freedom, it will be because someone—business, government, or an alliance between the two—will have taken control of the economy. Once that happens, the same group will inevitably also control the political system. Once that happens, history shows that political freedom also becomes a thing of the past and the rulers become corrupt (i.e. lose moral restraint). If, on the other hand, we lose political freedom, the political class will inevitably take control of the economy to preserve their power, and the problem of corruption will also follow. As Lord Acton said, “Power tends to corrupt; absolute power corrupts absolutely.”

The more interesting case, however, is what happens when moral restraint fails. Moral restraint can fail on a number of levels, any one of which can set the dominoes falling, but in this case, let’s consider unethical behavior in the economic realm.

When businesses, or worse, entire industries lose their ethical moorings, the absence of moral restraint leads inevitably to a crisis in the industry, with potentially catastrophic effects on the economy. At this point, to fill the void created by the lack of moral restraint, the government steps in and “fixes” the problem through additional regulation or a flat out takeover. That action degrades economic freedom and increases government’s authority in areas that didn't have before and thus undermines political freedom as well.

The obvious example is the financial crisis connected to the mortgage industry. Another is the current pay and bonus structure of CEOs, which is completely out of line with economic reality, historical precedents, and reason. While the free market may have led to this situation, it is nonetheless ethically wrong: moral restraint is lacking, and thus this is inviting intervention by the government, which will further undermine economic freedom.

Here’s where things get sticky and lots of finger pointing tends to happen. Progressive see the very real problems created by business, and they want the government to do something about them. Conservatives argue that this is an attack on economic freedom and an unwarranted expansion of government power.  

What conservatives too often ignore is that the free market solutions they prefer only work if there is an ethical foundation that keeps the moral restraint leg from collapsing. The alternative is inevitable and necessary government intervention to deal with the consequences of ethical failure.

This is one reason why Chuck Colson and Robbie George spearheaded the creation of Doing the Right Thing, a six-part ethics curriculum designed to be used in a wide range of settings. Unless we recover our ethical foundations, the entire project of Western liberal democracy is threatened because government will be forced to deal with the problems of the collapse of ethics in the economy and elsewhere in the culture.

Ethical questions are usually considered a feature of social conservatism, but the fact is that free markets only work if there is a solid foundation of ethics. Recognizing this, along with the inevitability of government intervention in the face of ethical failures, may help bridge some of the gap between Conservative and Progressive ideas and programs. At least it should provide some common ground for discussion.