ON-Lion Letter
"For friends of capitalism, the last two years have not been pleasant," begins Yuval Levin in his essay in the Spring 2010 issue of National Affairs.  "First came a cascade of market calamities that seemed almost designed to confirm the worst clichés about free enterprise. 

"Then came the response from Washington," Levin continues in "Recovering the Case for Capitalism."  "By the middle of last year, the federal government essentially owned the nation's largest bank, largest insurance company, and largest automaker; managed a substantial portion of the financial sector; and was declaring winners and losers in massive corporate deals ad hoc.  Meanwhile, government spending soared, and lawmakers were busy planning new entitlement programs even as our existing ones were falling into bankruptcy.

"For a moment, it seemed as though all of this would cause the American public to lose its faith in the market economy," he notes.  "That moment eventually passed, and has now been replaced by a wave of populist discontent directed as much at the government as at the market."  This turn in public opinion needs to be bolstered by "an argument in defense of American capitalism."  "To direct the public toward such a case, we will need to explain what is at risk, what is at stake, and why it matters.

"Such an explanation is no simple matter," Levin writes.  "After decades of defending one tree or another, many friends of capitalism have lost sight of the forest -- of what democratic capitalism is, of its virtues and vices, its strengths and weaknesses, its political and moral as well as its economic justifications.  Our first task now is therefore a recovery of that understanding, which will clarify both our objections to the policy direction of the moment and our prescription for a better way."

Levin is the editor of National Affairs and a fellow of the Ethics and Public Policy Center, both of which are substantially supported by The Lynde and Harry Bradley Foundation in Milwaukee.  His essay is adapted from a Bradley Lecture that he delivered at the American Enterprise Institute for Public Policy Research earlier this year.

He concludes that we must return to "the broader argument -- the argument first framed by Adam Smith, and refined by two centuries of theory and practice, especially in our country.  It is an argument for individual freedom amid moral order, and for prosperity sustained by sympathy and discipline.  It is an odd modern hybrid:  a conservative case for the liberal society.  As such, it is also an integral piece of the case for America."
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