Liberals vs. Conservatives: Church, State, Bank & Corporation

One of the key innovations of the Reformation came when revolutionaries like John Wycliffe, Jan Hus, and Martin Luther drove a wedge between a belief in God and a belief in the church. The Protestant revolution was not a rejection of God. It was, rather, a rejection of the notion that church authorities actually represented God for the masses. “We are all priests,” Martin Luther wrote in perhaps the most revolutionary proclamation of modern times.

Since the 1500s, we’ve had conservatives, liberals, and radicals. Conservatives have wanted to preserve institutional authority in the hands of a few elites; liberals have wanted to disperse that institutional authority to a wider group; radicals wanted to do away with the institution all together. During the Reformation, conservatives defended the authority of popes, liberals fought to disperse the power of the church to princes (and eventually individuals), and radicals (like the French revolutionaries) wanted to outlaw religion altogether.

We’ve had conservatives, liberals, and radicals in politics as well. The conservatives fought to defend the divine rights of kings, to defend the supremacy of the aristocracy and landowners; the liberals fought for democracy; the radicals agitated for anarchy, seeing the state as inherently oppressive.

Conservatives, liberals, and radicals have fought in the arena of finances as well. Conservatives fought to stay on a gold standard, to maintain a tight grip on money and credit. Liberals fought to move towards paper currency and to liberalize credit, making it easier for individuals to finance businesses, farms, and consumer purchases. Radicals, in the form of communists, thought that financial markets should not be trusted at all and that the state should allocate capital.

Conservatives always win in the short-term. Jan Hus was burned at the stake more than a century before Martin Luther succeeded at starting the Protestant Revolution. Although the American revolutionaries were successful at overthrowing the British rule, it took more than a century for most people within Europe to be considered citizens rather than subjects. William Jennings Bryan, who delivered the famous “Must mankind be hung on a cross of gold?” speech, lost his bid for the presidency three times. Liberals always win in the long-term. Throughout the West, people are free to choose how (and whether) to worship, who (and whether) to vote for, and how much (and whether) debt to assume.

Progress in the West has been a story of the triumph of the individual over the institution, the dispersal of power from elites to the common person. Church, State, and Bank have all become tools for the individual, a reversal.

So, what is the next revolution? What is the role of conservatives, radicals, and liberals?

Today’s dominant institution is the corporation. Like the medieval church, it defines daily life and our options. And once again, we have conservatives who defend its current form, liberals who agitate to change it, and radicals who would like to do away with it. And once again, the radicals will soon be irrelevant, the conservatives will win in the short term but liberals will define the future.

One of the keys to this revolution will have its parallel in the Protestant Revolution. Just as Martin Luther drove a wedge between a belief in God and the authority of popes, so will modern reformers drive a wedge between a belief in markets and the authority of CEOs. When CEOs make 500 times what entry-level employees make, I think we can safely assume that their decisions have been disconnected from market forces.

The corporation, like church, state, and bank before it, is an amazing and powerful institution. Progress will follow from steadily dispersing authority from an increasingly privileged class of elites to the common people.