Economics, Politics

The Tragedy of the Obama Administration

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By 2014, it was already more than clear that the political rhetoric and neoliberal economic policy ideas of the Reagan Era were largely exhausted. But it was also clear that Obama’s presidency, despite his personal virtues and relatively progressive policy successes, was best understood as a continuation of Reagan’s political regime rather than a transformational movement beyond it. As I suggested at the time, many of Obama’s policies resembled those of a moderate Republican from the 1990s.

The tragedy of Obama’s presidency, in retrospect, was that he had prepared himself for a project of racial and cultural reconciliation that turned out to be politically impossible, while he had failed to work out in advance a set of bold, progressive, anti-oligarchic economic ideas that might actually have been, to some degree, politically feasible in the wake of the 2008 financial crisis. Whether the Reagan regime might have been brought to the beginning of an end in 2009, or whether right-wing media hostility, partisan tribalism, legislative gridlock, and the inevitable difficulties of economic recovery would have discredited a bolder economic program and simply resulted in Obama not being reelected, will never be known. What is clear is that the financial crisis of 2008, like any serious crisis, created political possibilities for departing from the status quo — and the Obama administration made few serious attempts to exploit those possibilities. Perversely, the political exploitation of the crisis belonged almost entirely to the Right, and especially to the Tea Party.

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Economics, Law, Philosophy, Politics

The Intellectual Foundations of a New Progressive Era?

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This post is the fourth in a series of five considering what the shape of progressive political-economic thought might look like following the neoliberalism of the Reagan Era.

In earlier posts, I introduced the progressive view of markets as government creations, and sketched some of the intellectual history of the idea.

In this post, I would like to note a few distinctive features of this view of markets and how it relates to other economic and political positions.

First, the idea is counterintuitive. The opposition between government and markets is so deeply rooted in our public economic discourse today that it may take some explanation and illustrations to show what is meant by the claim that our markets are government creations. But the idea is no more counterintuitive than Reagan-era claims were at the time of their introduction, such as the slogan that “government is not the solution to our problem; government is the problem.” In addition, the idea has the virtue of being in some sense obviously true. No one can deny — and sophisticated neoliberal theorists like Hayek do not deny — that the functioning of modern economic markets depends on and is shaped by state enforcement of property, contract, corporate, criminal, and many other laws.

Second, the view of markets as government creations, and the legal rules of markets as political choices, frames economic debates in a way that favors progressives but leaves room for conservatives to participate — just as the neoliberal framing of economic debates in terms of a choice between government and the market favored conservatives but left room for progressives to participate. Conservatives in a new progressive era would be free to argue (unappealingly) that we should choose rules for our markets that favor billionaires over working families, because of the merits of wealth accumulation, for example; just as progressives in the neoliberal era have always been free to argue (unappealingly) that high taxes and big government are actually a good thing, because certain parts of the economy are better left to government management.

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Economics, Law, Politics

After Trump: A Progressive Manifesto

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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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Economics, Politics, Science

Mapping Politics: Corey Robin and Mary Douglas

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In earlier posts, some of them a few years old now, before our current president’s rise demonstrated the continuing power of partisan tribalism and white grievance politics in the United States, I tried to explore the idea that tribalistic political thinking and the struggle for group recognition might be, under some circumstances, more politically powerful than economic self-interest.

Starting from this perspective, I enjoyed finally reading Corey Robin’s The Reactionary Mind (2011), a popular collection of revised magazine-pieces on the history of right-wing thought from Edmund Burke to Sarah Palin, as the subtitle puts it. (A new 2017 edition brings the story, and the title, up to Trump. Let’s hope this is the last edition.) The central thesis of Robin’s history of ideas is that there is an essence to conservatism: “the felt experience of having power, seeing it threatened, and trying to win it back” (4). Conservatism is identified with the Right, and both are defined as reactions against the Left’s “politics of emancipation” (9).

Against the modern American conservative’s sense of himself as a principled defender of liberty and limited government, and as free from the blood-and-soil chauvinism of the European Right, Robin argues that the political thought of the Right in Europe and America, in the eighteenth century and today, is in fact usefully approached as “a unity” (34). The unity is defined by “backlash politics” (34):

Conservatism … is not a commitment to limited government and liberty — or a wariness of change, a belief in evolutionary reform, or a politics of virtue. These may be the byproducts of conservatism, one or more of its historically specific and everchanging modes of expression. But they are not its animating purpose. Neither is conservatism a makeshift fusion of capitalists, Christians, and warriors, for that fusion is impelled by a more elemental force — the opposition to the liberation of men and women from the fetters of their superiors, particularly in the private sphere. (16)

In other words, rather than defining the Left and the Right in terms of economic policy positions, as has been the norm in discussions of American politics, Robin defines his two political poles in terms of us-versus-them group power dynamics. Based on my earlier thinking about the potential importance of political tribalism in explaining the contemporary American political landscape, Robin’s approach is appealing.

At the same time, I found myself wondering how to relate Robin’s claims about the essence of the Right to other scholarship I’ve encountered that attempts to provide a map of political space — especially the social science scholarship descended from the anthropologist Mary Douglas‘s “group-grid” typology of political orientations (sometimes labelled “Cultural Theory“), and the mainstream political science scholarship surrounding Poole and Rosenthal’s spatial model of congressional ideology (such as the DW-NOMINATE method for locating legislators in issue space).

Of course, Robin doesn’t present his project as an exercise in mapping or categorizing political ideologies. He makes no reference to either Douglas or Poole and Rosenthal. Robin’s book presents itself primarily as a contribution to the history of ideas, with a focus on the underlying, sometimes largely unstated or even obscured impulses motivating the history of conservative ideas.

Still, it seems to me that Robin’s history implicitly rests on something like a model of political space. It is a one-dimensional model that sorts political ideas and political actors by their proximity to two ideal types: the Left or the Right, where the former is defined by its commitment to emancipating the subordinated from their superiors, and the latter is defined by its reaction against the former.

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Politics

A hierarchy of political needs?

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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

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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

First note on specific policies: a guaranteed minimum income

The idea of providing a guaranteed minimum income to every American currently lies outside the ever-shifting window of politically plausible policy ideas. But it is hardly a fringe proposal. Various public thinkers from Friedrich von Hayek to Martin Luther King Jr. have supported the idea.

There are a variety of good practical arguments in favor of providing a guaranteed minimum income, including that it would decrease economic inequality and all of its negative externalities; strengthen families, since poverty is one of the greatest contributors to family breakdown; encourage investment in personal capital, innovation, and risk-taking, because all of these are more likely when a person is not faced with uncertainty about basic economic needs; and be more efficient than the tangle of programs that currently make up the safety net. The limited empirical evidence regarding guaranteed minimum incomes also seems to suggest that their disincentive effect on work is not as serious as might be feared.

What interests me, however, is the way that a guaranteed minimum income fits together with the post-Reagan-era vision of government sketched in previous posts. The key is recognizing that because of the centrality of the price mechanism to the efficient functioning of markets, wealth inequality in and of itself represents a non-self-correcting source of inefficient outcomes—a “market failure.”

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