Many of our political conflicts at this point are over the size and functions of government.
As the population grows, people move around more, and society in general becomes more complex, issues arise that can not be dealt with by communities or local government.
That is where state and federal governments have been stepping in over the last century or so -- but that's really only a stopgap solution, because massive, top-down, bureaucratic institutions are naturally flawed. They're out of touch, rigid in their procedures, and often unresponsive to the people they're supposed to be serving.
So on that level, the conservatives aren't wrong to be nostalgic for a time when local communities were more self-sufficient and people looked to their friends and neighbors if they needed help. But where they are wrong is in imagining that if central governments could just be crippled, a utopian state of things would magically emerge.
The real challenge, I think, is to find a third alternative -- to empower people to do more for one another while at the same time making available the resources of the larger society in times of crisis. This is more or less what Occupy Wall Street is after, but the real question is how to get there.
I don't have any easy answers, but I know that one of the biggest impediments is inequality. It's the existence of rich neighborhoods and poor neighborhoods, and the unwillingness of the more affluent to support what they see as those deadbeats across the tracks, that makes a system based on sharing almost unobtainable at this point. Even out the inequality and it becomes a lot more possible to have the necessary discussions about mutual aid.