Economics, Law, Politics

After Trump: A Progressive Manifesto

Free Photo: Migrant Man Traveling

Whether we think of the last four decades in U.S. politics as the Reagan Era or, with an eye to global political-economic trends, as the era of neoliberalism,[1] it is worth considering that the political regime with which we are all familiar may be coming to an end, with the current president as its final unraveling.

A little over a year since the election of Donald Trump, what we have seen is consistent with the theory that his presidency may be a “disjunctive” one. The term comes from the political scientist Stephen Skowronek’s structuralist theory of presidential politics, which suggests that certain presidents — such as John Adams, John Quincy Adams, Franklin Pierce, James Buchanan, Herbert Hoover, and Jimmy Carter — find themselves in an “impossible leadership situation” as “a president affiliated with a set of established commitments that have in the course of events been called into question as failed or irrelevant responses to the problems of the day” (39).

Assuming our democracy survives the next three years — which remains unclear so long as an unwell racist demagogue possesses executive power, supported by a blindly obedient mass following — what might come after the Reagan Era? The continuing global spread of illiberalism, perhaps aided by the rise of a more competent American strongman, is one possibility. But what is the progressive alternative?

What would American progressives like to see replace the collapsing ideology of neoliberalism?

This question has been a driving preoccupation of this blog since I started writing it in 2014. I still find it useful to frame the challenge for progressives in terms of the question I asked in my second post: If a progressive today were to write a book like Milton Friedman’s Capitalism and Freedom, what would it say? In order to lay the intellectual foundations for a new progressive era, progressives should be able to offer what Friedman’s book offered to the Reagan regime: a simple, rhetorically compelling, easily summarized general vision of politics and the economy — alongside a sample of bold policy proposals that embody the general vision and can serve as a focus of practical political action.

It now seems to me that the intellectual foundations for a new progressive era are finally coming into view. In recent years, a growing chorus of progressive voices — from Dean Baker, Robert Reich, Dani Rodrik, and Geoffrey Hodgson, to the legal scholars at the recently launched Law and Political Economy blog — have begun to coalesce around a simple, compelling idea about government and markets. At the risk of oversimplification, the basic thought is something like this:

The economic choice we face today is not, as the last forty years of our politics has suggested, between government and the market. In fact, as a closer look makes clear, markets are created by governments. The rules of our economic markets are established by our government through its laws.

Our markets are government creations, and the rules of our markets are political decisions. It is in our power as a democracy to fix the rules when they are broken.

For the last forty years, we have lived in the illusion that “the free market” means a set of market rules favoring the wealthy and powerful few at the expense of the freedom of the many. But nothing in the nature of markets requires the neoliberal economic policies our government has so often chosen.

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Politics

A hierarchy of political needs?

Free Photo: Mexican Migrants Home

Longtime readers of the blog may remember that when I first started posting, in March 2014, I began with an odd question: what would a progressive Milton Friedman say? Underlying the question was my sense that contemporary American progressives have failed to articulate a vision of government that could replace the crumbling vision of the Reagan era, as embodied in Milton Friedman’s rhetorically powerful and very influential Capitalism and Freedom.

In retrospect, one of the unstated assumptions of that series of posts — to which I hope to return, especially as the materials for a progressive post-Reagan-era vision continue to accumulate, if not coalesce — was the idea that a contemporary, progressive Capitalism and Freedom would be primarily about economics, as Friedman’s book was.

But why should this be the case? Why must economic policy and the government’s role in the economy be the defining focus of the next “era” — the next political or constitutional regime — in the United States? Even if the New Deal era and the Reagan era were largely defined by changes in economic ideology and policy, must this always be the case?

In particular, as I turned toward thinking about the environment as part of a recent project, I wondered whether the next American political regime could be defined by the response to environmental problems and above all climate change, which, it’s at least plausible to argue, is the single most important political issue facing the United States and the world today. Maybe Europe’s Green Parties could be a sign of things to come.

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Politics

What so few economists know, but nearly all the good legal scholars understand

Free Photo: Stacks of Tires in a Rubber Factory

Many of the blogs I’ve enjoyed most over the years feature recurring motifs. One of Kevin Drum’s hobbyhorses is the relation between the phasing out of lead in the United States beginning in the 1970s and the drop in violent crime over the last two decades. If a prominent article proposes an explanation of the fall in violent crime (for example, arguing that “broken windows” policing was responsible) without mentioning the possibility that Americans are less violent because they’re no longer being poisoned by lead at an early age, Drum will chime in. Similarly, Paul Krugman returns again and again, both in his blog and in his columns, to failed predictions of runaway inflation by commentators on the right. Whenever a new warning against “printing money” and the risk of hyperinflation appears, Krugman posts a response. Likewise, Sanford Levinson (at Balkinization) circles back repeatedly to the criticism of political analysts who fail to recognize the harmful political effects of the undemocratic, hardwired structural provisions in the U.S. Constitution, such as the malapportionment of the Senate, the selection of the President by the electoral college, and life tenure for Supreme Court justices.

If I were going to have a hobbyhorse, it would probably be the failure to recognize the role of government in the economy. Not the role of government in regulating the economy. The role of government in constituting the economy. Progressive legal scholars have been hammering away at this point for nearly a century, at least since Robert Hale’s “Coercion and Distribution in a Supposedly Non-Coercive State” (1923), but it has never gotten through to the public consciousness. It has never shaped the way that the American public thinks and talks about the economy. And that’s a tragedy for our national economic conversation.

One reason that the progressive legal scholar’s view of the economy as a government creation has not gotten through to the general public may be that the public (naturally) looks to economists for guidance on how to think about the economy. Unfortunately, even most progressive economists today talk about “the market” as something that exists in opposition to the government, rather than as something created by the government. Whether on the left or right, mainstream economists tend to share the basic conceptual framework of the Reagan era when it comes to the economy, the framework I criticized in an earlier post on Greg Mankiw.

Consider Joseph Stiglitz’s recent remark in Harper’s: “Of course, there is no such thing as a ‘purely’ capitalist system. We have always had a mixed economy, relying on the government for investment in education, technology, and infrastructure.” These statements may sound progressive at first glance, but they adopt some of the central and most damaging assumptions of the Reagan era.

When Stiglitz says that there is “no such thing as a ‘purely’ capitalist system,” he’s right–but not in the sense he intends. The reason there is no such thing as a “purely capitalist” (or “purely free market”) system is not that all modern governments engage in infrastructure spending and the like. The reason is that “capitalism” is not a concept that has an essence or a core. We can talk about pure water–water with all the impurities removed, water that is nothing but H2O. But it simply makes no sense to talk about “pure” capitalism if this means something like capitalism with all traces of government removed. Markets without government aren’t markets at all, at least not in any sense we would recognize today. If the government plays no role in the economy, then there are no property or contract rights–and surely private property rights are one of the features of every economic system that we would call “capitalist.”

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Politics

Specific policies: some preliminaries

The goal of the preceding posts on politics has been to start thinking through what it would look if a progressive today tried to write the kind of book that Milton Friedman wrote in Capitalism and Freedom: a general vision of government capable of displacing the discredited Reagan era vision of “small government” as good government, alongside a number of specific policies that illustrate how the vision could be made concrete.

An earlier post arrived at a first sketch of one possible vision: moving beyond the false opposition between government and markets, as well as the largely irrelevant and outdated opposition between big and small government, and instead framing economic policy decisions as a democratic choice between different forms of government action. Faced with an economic problem, we could ask ourselves not whether government should intervene—after all, government is already inextricably involved in all aspects of the economy—but rather what kind of government action would best serve our democratically chosen goals.

At this point, one option would be to say that a progressive response to Capitalism and Freedom need go no further. We could say: the progressive goal should simply be to make our democracy work, encourage the public to choose deliberately between the use of direct government action and indirect government action through markets, and let the chips fall where they may. In other words, focus on the democratic procedures and let the economic substance take care of itself.

But we can also go further. Like Friedman, we can assume that freedom will be one of our democracy’s primary political goals, and we can turn to specific illustrations of policies that would best fulfill the goals of freedom within the context of a post-Reagan era progressive vision of government.

In a few of the subsequent politics posts, I’ll start attempting to connect specific economic policies to the overarching vision of good government as not necessarily “big” or “small” but democratic and focused on freedom.

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Politics

Background Part II: The Reagan Era

In 1964, long before the New Deal era reached its high-water mark, the seeds of the Reagan era were planted. Barry Goldwater won the Republican presidential nomination on a small-government platform. Voters rejected him. His supporters and intellectual allies then retreated into think tanks, journals, and other civil society organizations funded by wealthy donors. From there, they built the modern conservative movement.

Or at least, that is one way of telling the beginning of the story.

The political successes of the conservative movement have always had more to do with cultural backlash than economics. Two forms of backlash stand out in particular: racial hostility toward blacks in the wake of the civil rights movement, and a more general revulsion toward the upending of traditional authorities and norms during the cultural liberalization of the 1960s and 1970s. Against this backdrop, however, the public intellectual face of modern conservativism has been strongly defined by economic policy.

The intellectual foundations of the modern conservative economic ideology can be found in works like Milton Friedman’s Capitalism and Freedom, published in 1962. As the title suggests, the book argues that classical liberal markets and political freedom go hand in hand. This argument also appears in Friedrich Hayek’s The Road to Serfdom, another keystone of modern conservative economic thought, although one that lies outside the American economic mainstream.

Capitalism and Freedom offers a high-level theory about the need for small government and classical liberal markets—and presents this theory in easily communicated rhetoric that appeals to widely shared American values, especially freedom. The book also offers an assortment of concrete policy prescriptions, such as the use of school vouchers, and the replacement of progressive income taxes with a flat tax. By connecting an overarching theory of modern government with specific policy prescriptions, Friedman offers something extremely powerful: a unified vision of the proper role of government to contrast with the vision of the New Deal. While the New Deal presents government as a force for freedom, Friedman’s vision places government largely in opposition to freedom. The smaller the government, the more free citizens will be. What makes Friedman’s book so powerful, I would argue, is that it offers a widely appealing general framework for thinking and talking about the role of government, alongside policy prescriptions that are concrete enough to be included in a campaign platform or a bill.

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Politics

What would a progressive Milton Friedman say?

Or, to put the question more clearly: If a progressive today were to write a book like Milton Friedman’s Capitalism and Freedom, what would it say?

The politics posts on this blog will be, in part, an attempt to think through some future intellectual directions for the American left. The blog occupies a relatively neglected but I think important part of the political conversation among American progressives. On the one hand, the blog is concerned with electoral politics and practical, plausible, short-term to medium-term policy changes—as opposed to the radical left of Occupy Wall Street, anarchism, and parts of humanities academia in the United States. On the other hand, the blog is interested in thinking about bold ideas that push at the outer limits of what is politically plausible in America today—as opposed to those center-left institutions that are more concerned with immediate electoral calculations than intellectual and political change. As Occupy Wall Street showed, the American left can benefit from radical voices; and there is always a need for tactical thinking by insiders about the next election. But this blog is concerned with different questions.

Before turning to the particular question at the top of this post, a little intellectual background. The next few posts offer a brief recapitulation of a probably familiar historical narrative about where we are now in American politics, and how we got here. You can hear variations on this story from historians like Sean Wilentz, essayists like GeorgePacker, lawmakers and reformers like Elizabeth Warren, economists like Paul Krugman, and many other sources of progressive thought.

In a nutshell, the story goes like this: The Reagan Era is drawing to a close, but nothing has replaced it yet.

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