We Need to Stop Arguing About Neoliberalism

When Charles Peters wrote his neoliberal manifesto in 1982, it wasn’t easy to see where the Reagan Revolution was leading the country. When I look back on the manifesto with the benefit of hindsight, what strikes me more than anything else is that it suffered from a mostly praiseworthy idealism that was mismatched to the threat.

It was premised consistently on the idea that things could be otherwise and that the Democratic Party could challenge their organized supporters with impunity. Better ideas would prevail by virtue of being better ideas. Unions, whether industrial, private sector or educational, could take well-deserved hits without any political cost to the left and we’d get better outcomes as a result. The federal workforce could actually improve if the Democrats took them on a little bit rather than always having their back. Not enough weight was given to the possibility that the left was under assault and that the status quo was far better than what was about to come. It was a bad time to be weakening and dividing forces, and a particularly bad time for arguing that the merits of ideas would prevail over the blunt force conservative army arrayed against us.

But the things Peters had in mind were much more nuanced than how neoliberalism is portrayed today. Take this, for example:

If, for example, you see only a narrow range of choices, if you are a prisoner of conventional, respectable thinking, you are unlikely to find new ways out of our problems. That’s why some neo-liberals, who are on the whole internationalists and free-traders, are willing to consider such bizarre ideas as getting out of NATO, forgetting about the Persian Gulf, embargoing Japanese cars, or requiring that, in part at least, they be built here.

You can’t take that sampling of ideas and cram it into neat categories. And this is because what Peters was describing wasn’t some coherent ideology but more a faith that reason could play more of a role in creating good policy. He also saw a society that, to his mind, had become selfish and splintered, which is why he sought out things that could unite us. He called for a restoration of the draft because he recognized how it had leveled American society in the mid-century and that the new system was leading to a situation where the higher classes did not provide public service. He called on intellectualized liberals to be less snobbish and condescending to the “Huck Finns” in middle America who often demonstrated a superior common sense. Overall, he was pretty consistent in aspiring for a society with less stratification and more fairness.

Obviously, he favored free trade and internationalism, but not to the point that he wouldn’t consider protecting the domestic auto industry from Japanese competition. Long before we went to war in the Persian Gulf, he was looking for a way to forget about it completely. His internationalism didn’t preclude ripping up NATO.

What he wasn’t doing was launching some broad defense of laissez-faire capitalism or calling for privatizing everything under the Sun. In some respects, he was trying to identify areas where liberalism had become politically unpopular and find rationales for making changes. But, truly, his idea was less about winning than about doing things in a better way. To me, the most glaring flaw was that the piece was almost apolitical. It didn’t recognize that you get left-leaning outcomes by beating the right, not by reasoning with them.

Again, though, this was 1982 and it would take a while to see what conservatives would do with power once they grasped it. To have correctly predicted back then where we are today would have required absurdly pessimistic forecasting. It was too tempting to think in idealistic terms, as if there were no risks to what he was advocating. It looked like it would be possible to live without the things about the left that are annoying without it empowering the right.

As a provocative essay, it still reads well. But it looks misguided in retrospect. What it doesn’t look like is how it is often characterized today. It doesn’t even really look like a precursor to the Democratic Leadership Council or the presidency of Bill Clinton, unless you squint a lot and ignore all the contrary evidence.

Peters has been retired for the entire time I’ve been writing for the Washington Monthly but his influence is still a guiding star. Yet, I’ve never heard the word neoliberal uttered in a staff meeting. I will sometimes be treated to robust defenses of Clinton’s presidency, but even here it is couched in a recognition that times have changed rather dramatically. What made sense and brought victories in the 1990’s would not necessarily make sense or bring victories today.

In other words, today’s Monthly doesn’t carry any water for either the neoliberalism that Peters discussed in his essay or for the characterizations of neoliberalism that are thrown around today. What’s consistent is a desire to explore policy first on its own merits and only secondarily on its political advantages or prospects.

One thing I agree with Jonathan Chait about is that the term ‘neoliberalism’ is thrown around as an epithet by a lot of people who really don’t know what they’re talking about. If you talk to ten people, you’ll probably get ten different explanations for what they mean when they use the word. It could fill in for Clinton/Blair Third Wayism in a better or less-defined manner. It could refer to Naomi Klein-style disaster capitalism. It could be an attempt to define support for free trade and international economic agreements. It could be primarily about the preference for public-private partnerships or the privatization of government functions. In some cases, it might be as unsophisticated as Chait describes it, as little more than an anti-capitalist word used by hardcore socialists.

Whatever any individual has in their own mind, they use the word as an insult.

I understand why Chait chose to fight back by retelling the history of the Democratic Party, but I think this was probably not the way to go. Yes, many people have an idealized and sanitized view of the party during the eras of the New Deal and the Great Society, but what’s going on today is about today’s politics and today’s economy. Just as what Peters meant in his 1982 essay is of limited importance today, so, too is the relative economic conservatism of the party during the Kennedy administration.

Today’s economy isn’t working for people the way the economy of the 1990’s did. People don’t have to condemn or approve of the political leadership of the party in the 1990’s to demand new solutions today. The inverse of Chait’s complaint that neoliberalism is little more than an insult intended to cut off debate is that complaining about the term’s lack of clarity is also a way to cut off debate.

The problem is that, all around, this just isn’t that intelligent of a conversation. Our situation currently resembles something closer to the 1890’s or 1920’s than anything from the Progressive Era or the presidency of Franklin Delano Roosevelt. The left is in the wilderness, the economy is monopolized and income inequality is off the charts, but everything is ripening for a comeback. Studying how the left prepared for the Progressive Era and the New Deal would be a better use of time than perpetually rehashing the 1980’s or 1990’s.

If the center left in this country is just a stand-in for defending the 1990s and proposing more of that, then they deserve the criticism they’re getting from the left. I don’t think that’s actually the situation we’re in, but Chait seems to almost accept the battle on those terms.

I think that’s a mistake.

As for the left, one thing that Chait hinted at but never really came out and said is that the Democratic Party (as a party of the left) will of course always be more of a worker’s party than an employer’s party. But, when a Democrat wins the presidency, they have to be more balanced. This has, in fact, always happened in our system, including with liberal lions like FDR, Kennedy, LBJ and even Obama. It’s be nice if more people didn’t see this as a system error. It’s actually a feature of a two-party system where whoever wins has to govern for everyone. In a real way, a workers’ president wouldn’t even make sense, and it would be a failure if it was attempted.

When Democrats have successfully governed this country, they’ve done so by doing right by small farmers, small businessmen, and entrepreneurs, all of whom are employers first and only workers second. This is one thing Charles Peters was definitely correct about in his essay and something the Democrats should focus more on today as we try to figure out a way to restore small business vitality to small town America in an era of crippling economic consolidation.

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