The Limits of Left Neo-Liberalism

by Henry on July 18, 2011

Doug Henwood has a go at Matthew Yglesias.

Orthodox types—and I’m including Yglesias, who describes his political leanings as “neoliberal” on his Facebook profile page—usually prefer monetary to fiscal remedies. Why? Because they operate through the financial markets and don’t mess with labor or product markets or the class structure. A jobs program and other New Deal-ish stuff would mess with labor and product markets and the class structure, and so it’s mostly verboten to talk that way. From an elite point of view, the primary problem with a jobs program—and with employment-boosting infrastructure projects—is that they would put a floor under employment, making workers more confident and less likely to do what the boss says, and less dependent on private employers for a paycheck. It would increase the power of labor relative to capital. I’m not sure that Yglesias understands that explicitly, but it’s undoubtedly part of his unexamined “common sense” as a semi-mainstream pundit.

This is wrong in the particulars – as a correspondent has pointed out to me, Yglesias has repeatedly called for employment-boosting infrastructure projects and the like. But – getting away from the polemics and the specific personalities – I think that Doug is onto something significant here. I’d frame it myself in a more wishy-washy way. There is a real phenomenon that you might describe as left neo-liberalism in the US - liberals who came out of the experience of the 1980s convinced that the internal interest group dynamics of the Democratic party were a problem. These people came up with some interesting arguments (but also: Mickey Kaus), but seem to me to have always lacked a good theory of politics.

To be more precise – Neo-liberals tend to favor a combination of market mechanisms and technocratic solutions to solve social problems. But these kinds of solutions tend to discount politics – and in particular political collective action, which requires strong collective actors such as trade unions. This means that vaguely-leftish versions of neo-liberalism often have weak theories of politics, and in particular of the politics of collective action. I see Doug and others as arguing that successful political change requires large scale organized collective action, and that this in turn requires the correction of major power imbalances (e.g. between labor and capital). They’re also arguing that neo-liberal policies at best tend not to help correct these imbalances, and they seem to me to have a pretty good case. Even if left-leaning neo-liberals are right to claim that technocratic solutions and market mechanisms can work to relieve disparities etc, it’s hard for me to see how left-leaning neo-liberalism can generate any self-sustaining politics. I’m sure that critics can point to political blind spots among lefties (e.g. the difficulties in figuring out what is a necessary compromise, and what is a blatant sell-out), but these don’t seem to me to be potentially crippling, in the way that the absence of a neo-liberal theory of politics (who are the organized interest groups and collective actors who will push consistently for technocratic efficiency?) is. Of course I may be wrong – and look forward to some pushback in comments …

Update: Brad DeLong writes a reply, largely replicating a comment below, which says that I believe things that I actually don’t believe at all. My response to the original claim can be found in comments below.

{ 202 comments }

1

Matthew Yglesias 07.18.11 at 3:15 pm

I wonder what J Quiggin thinks about this. But to me, the self-assurance that there’s some non-neoliberal miracle formula for political sustainability seems refuted by the fact that the pre-neoliberal paradigm in the United States was not, in fact, politically sustainable. So while I think the critique has force, it applies pretty broadly across the board. I

2

Chris Bertram 07.18.11 at 3:19 pm

I particularly liked the following para in Henwood:

bq. There’s also a strain of populist thought, prominent in U.S. political history, that embraces inflation and easy money as some sort of curative strategy. I don’t agree. Easy money is really a cowardly substitute for redistribution—over the long term, Milton Friedman was more or less right that loose money can’t change the economic fundamentals. It can’t spark much growth, it can’t raise real wages—it’s mostly just froth. To spark growth and raise wages you need serious spending, better labor laws, and stronger and more pervasive unions. Or, to put it another way, the best that loose money can give us is more of the same; jobs programs and infrastructure spending can give us child care and high-speed rail, and not just more consumer goods and carbon dioxide emissions.

3

Tom Bach 07.18.11 at 3:22 pm

If you ignore the fact that labor unions have been under attack at least since Reagan, Matthew Yglesias might have a point. B

4

AcademicLurker 07.18.11 at 3:25 pm

the pre-neoliberal paradigm in the United States was not, in fact, politically sustainable.

And the neoliberal paradigm has proven itself sustainable?

Indeed. No massive economic collapse, no signs that ~10% unemployment is the new normal. Nothing to see here folks, move along…

5

Henri Vieuxtemps 07.18.11 at 3:29 pm

@1, what are you replying to; who said anything about ‘sustainability’?

6

roac 07.18.11 at 3:29 pm

I haven’t seen Yglesias talk about unions much, if at all, but surely sees them as interfering coercively with the proper way of determining income levels: the Market. While Yglesias deplores income inequality in general, whenever he looks at a particular lower-middle-class occupation, he invariably concludes that its members are overpaid. Barbers are the classic example, but he also had a post, not long ago, deploring the fact that bus drivers in the Washington area make $50K a year (or whatever the number is), when there are hordes of unemployed people out there who would work much cheaper.

(I quit cold turkey on Yglesias when CAP went to this new comment system which you can only access through Facebook; it was like being forced to give up cigarettes. But I can’t believe he’s changed.)

7

Rob Hunter 07.18.11 at 3:30 pm

I’m puzzled as to what “the pre-neoliberal paradigm in the United States” might refer to, and whether or not it really stands in direct opposition to a “neoliberal paradigm,” inasmuch as Henry and Henwood have a strong claim that neoliberalism, particularly in its left-technocratic strain, conspicuously lacks an articulation of the kind of mass politics that might support it.

8

Matthew Yglesias 07.18.11 at 3:30 pm

“If you ignore the fact that labor unions have been under attack at least since Reagan, Matthew Yglesias might have a point.”

US labor union density peaked in the mid-1950s so it’s hard to see Reagan specifically as the cause of unions’ decline. I think it’s more plausible to say that the policy environment has grown more hostile to unions as a result of unions’ decline.

9

Sebastian H 07.18.11 at 3:31 pm

I’m not exactly sure what you mean by “weak theories of politics, and in particular the politics of collective action”. Are you using the terms in some technical sense or in their normal meaning? Because in their normal meaning it would seem that neo-liberals have a theory of politics, they just see it as largely instrumental. And they have theories of collective action, but they mistrust populist movements (which is how many large scale unions function and see also the Tea Party). Technocratic and populist don’t always go well together. So to the extent that “neoliberal” suggests “technocratic” it may very well be for serious spending, better labor laws, job programs and infrastructure spending depending on what is seen as the cost/benefit analysis, but it will be at least slightly mistrustful of populist appeals i.e–racial group appeals, nationalist appeals, and class based populism.

10

Matthew Yglesias 07.18.11 at 3:33 pm

@5 Henry wrote “it’s hard for me to see how left-leaning neo-liberalism can generate any self-sustaining politics.”

I’m agreeing that this is a problem, but doubting whether there’s a clearly superior non-neoliberal alternative.

11

Red 07.18.11 at 3:36 pm

It seems to me that “left” neoliberalism has long discarded unions as a positive political force, thus speeding up their demise in American politics. In other words, Henry sees an error where I assume a deliberate choice.

12

Bruce Baugh 07.18.11 at 3:37 pm

As a good neighbor to this post and Doug’s remarks, Doctor Science has an excellent post about why many people have a perfectly rational fear of inflation. She makes some darned good points, I think.

13

Matthew Yglesias 07.18.11 at 3:38 pm

@6

I think it should be made substantially easier to organize labor unions in the United States. I do doubt that this is the political or economic panacea that some people seem to think it is, but it’s nonetheless a fundamental social and political right that far too many people are denied.

14

Cranky Observer 07.18.11 at 3:43 pm

> Matthew Yglesias 07.18.11 at 3:38 pm
> I think it should be made substantially easier to organize
> labor unions in the United States.

You also think that managers and executives should be able to ignore or break labor contracts at will – for example, with teachers’ unions – which renders the concept of “organizing a labor union” somewhat meaningless.

Cranky

15

hartal 07.18.11 at 3:46 pm

I can’t believe the price of Raymond Plant’s Neo-Liberal State, doubtless the most important political theoretic work on neo liberal politics. But it’s a book that this site should probably feature, and its political theorists doubtless know. It is the political theory of social democracy robustly defended.
*
Yet the question of QE3 is on the table. Who’s for it? Who’s against it?
*
The case against ultra-low rates has been made best by Raghu Rajan, a pretty conservative guy. He argues that they hurt small savers, don’t stimulate investment, create property bubbles at home and turn the US into an unstable hedge fund (low Fed rates leads to capital making risky investments abroad leads to foreign governments reversing currency appreciation by buying US debt–so that US investments abroad are financed by short-term liabilities as in a hedge fund).

Krugman has said that the solution for this is not ultra-low rates but anti-bubble policies abroad.

Stiglitz has warned that ultra low US Fed rates move the world towards currency wars.

16

Russell Arben Fox 07.18.11 at 3:48 pm

the pre-neoliberal paradigm in the United States was not, in fact, politically sustainable

Going along with what AcademicLurker (#4) just said, I would really like to see Matt–or any other member of what Chris Bertram (and I) called the “technocratic neoliberal left”–unpack what they mean, historically speaking, by labeling the pre-neoliberal paradigm “political unsustainable”. Is it a claim that unions and other populist/nationalist demands for jobs and economic security were really premised upon some form of white supremacy, and thus wouldn’t survive politically as forces for egalitarian reform once the civil rights movement arose? Is it a claim that New Dealish-type programs had at their heart a (however muted) moralistic/communalistic sensibility, and thus couldn’t endure as politically acceptable goads to greater justice once various technological revolutions made possible enormous expansions of individual lifestyle liberation and wealth? Or is it just a structural party argument, claiming that the pre-neoliberal paradigm couldn’t organize itself for some conceptual reason in the context of American politics? Serious, what is it exactly? WHY does the technocratic neoliberal left assume that it is simply “obvious” that the pre-neoliberal paradigm was a hopeless model after the 1970s/1980s?

17

temp 07.18.11 at 3:51 pm

I’ve never understood this criticism of “technocratic solutions”. Successful social programs generate their own constituency. Nations which implement universal healthcare programs tend not to abandon them. In the US, social security and medicare have proven far more resilient than private sector unions. It is much harder to attack broad-based social programs in which the average citizen can see tangible benefits from government that a union movement that can always be accused of looking out for the interests of its members at the expense of everyone else.

18

bob mcmanus 07.18.11 at 3:55 pm

Neo-liberals tend to favor a combination of market mechanisms and technocratic solutions to solve social problems.

Not the social problems of misogyny, racism, or homophobia etc (immigration, colonialism, war?) which the left neo-liberals do advocate and advance through various kinds of collective action politics. Or not, if people think this is incorrect.

liberals who came out of the experience of the (1970s) 1980s convinced that the internal interest group dynamics of the Democratic party taxes were a problem.

The core principle of neo-liberal Barack Obama is that he will not (overtly) raise taxes on 95% of the US population. I think that dating from the Jarvis California experience of the 70s, and “Reagan Democrats” in the 80s, left neo-liberals believe that whatever coalitions are possible on the left would be fractured over any kind of economic populism or real redistribution.

19

Sebastian H 07.18.11 at 3:56 pm

“You also think that managers and executives should be able to ignore or break labor contracts at will – for example, with teachers’ unions – which renders the concept of “organizing a labor union” somewhat meaningless.”

I don’t think he says that. He says that we shouldn’t cave to teacher’s union demands for pure seniority hiring for example. And quite probably, the way teacher’s unions have functioned in the US education establishment provides excellent examples of why populist movements aren’t trusted by neo-liberals.

20

Rob Hunter 07.18.11 at 3:56 pm

@ Russell Arben Fox (#16)

Perhaps part of the explanation is found in the last sentence of your comment, in a self-fulfilling kind of way: the more that one comes to believe that neoliberal policies are the solution, the more that “traditional” left-liberal political approaches come to be seen themselves as the problem?

21

bob mcmanus 07.18.11 at 3:57 pm

16:Is it a claim that unions and other populist/nationalist demands for jobs and economic security were really premised upon some form of white supremacy

I believe many young Democrats believe exactly this, with additions for sexism and homophobia etc.

22

imajoebob 07.18.11 at 4:00 pm

Using the US to try to prove or disprove either of the sides of this argument is sham economics. There is NO “neoliberal” class or labor infrastructure to challenge “Capital.” The US is a retrograde society where ALL the power rests in the hands of a small minority. While not as obvious as North Korea, or China, or Russia, or Saudi Arabia, it’s just as powerful, just as embedded, and just as pernicious. The best argument mitigating this absolute power is the occasional fracture in the edifice (usually between the political and financial class, as we’re seeing on the debt), and the ability of the powerful to convince most Americans that they are at worst “benevolent despots.”

If you take this argument to other countries, especially in Europe, you see that where the effect of money on politics is buffered, the “neoliberal masses” have much more influence on the economic policy. At the same time, we see in Greece that when the full, unfettered force of Capital is brought to bear – in this case by the IMF, USA, UK, and Germany, they have much more influence than even the Greek citizens.

Which takes us back to the Marxist debates of the past few days. In Western economies the power wielded by Capital is so overreaching that the “natural” revolutions envisioned by Marx can be controlled, usually with false promises and faux “victories” on matters of no actual import (see the teabaggers for the best example of the ability of Capital to co-opt the masses). Forty years ago the greek government would be in jail or in hiding by now, and a new “Social Democratic” party would be negotiating with the generals about holding elections.

You decide if today’s system where the banks protect the wealthy, who then loot the treasury and leave the middle class to pay the bills, is any better.

23

Steve LaBonne 07.18.11 at 4:01 pm

WHY does the technocratic neoliberal left assume that it is simply “obvious” that the pre-neoliberal paradigm was a hopeless model after the 1970s/1980s?

Because it’s very convenient for them to ignore the fact that their ideological soulmates of earlier eras were actively attacking that “paradigm” from the time of Kennedy (when the political bargains that ultimately resulted in shipping massive numbers of manufacturing jobs overseas had their roots), let alone Reagan (and by the way, Carter, the first openly neoliberal Democratic President, broke a lot of the ground that Reagan continued to work.) Why, it’s just a fact of nature, nobody could have known, etc. The patient just died of natural causes, you see.

24

Russell Arben Fox 07.18.11 at 4:06 pm

Rob (#19),

the more that one comes to believe that neoliberal policies are the solution, the more that “traditional” left-liberal political approaches come to be seen themselves as the problem?

There’s probably more than a little truth to this. After more than 30 years telling one another that traditional/redistributive/populist left stuff is hogwash, it probably seems pretty obvious to many that those old solutions were actually part of the problem.

Bob (#20),

I believe many young Democrats believe exactly this [that unions and other populist/nationalist demands for jobs and economic security were really premised upon some form of white supremacy], with additions for sexism and homophobia etc.

If so, then that is 1) screamingly unfortunate, because 2) it’s only partly true, and 3) it’s a kind of “sins of the fathers” thinking that has lead many a young millennial liberal to assume that in our new technologically liberated/economically globalized world, the left really doesn’t have that much at all to learn from blue-collar union stiffs, public school teachers, and hayseeds out on the farm.

25

Chris Bertram 07.18.11 at 4:09 pm

In the absence of an actual argument, I think MY is probably just inferring “unsustainable” from “wasn’t actually sustained”, which is clearly fallacious. Could a different political strategy have sustained the New Deal settlement for longer? I don’t know. But given that other countries have done a better job of sustaining some kind of welfare-state capitalism, I remain unconvinced of its impossibility even for the US.

26

Cranky Observer 07.18.11 at 4:15 pm

>> “You also think that managers and executives should be able
>> to ignore or break labor contracts at will – for example, with
>> teachers’ unions – which renders the concept of “organizing a
>> labor union” somewhat meaningless.”

> I don’t think he says that. He says that we shouldn’t cave
> to teacher’s union demands for pure seniority hiring for
> example. And quite probably, the way teacher’s unions have
> functioned in the US education establishment provides
> excellent examples of why populist movements aren’t
> trusted by neo-liberals.

Three points here:

1) The way (some) teachers’ unions behave is a direct result of the way their members have been treated whenever their boards and principals have been allowed to run riot with Calvinball rules and favoritism (now disguised as “incentive pay”). Starting the the late 1800s, brutally so during the Great Depression, and continuing through the 1950s (fired for getting married; fired for having a baby) and early 1960s (disciplined for having “radical” ideas – such as teaching modern poetry[1]). The UFT in New York and AFT nationally were specifically formed because the NEA’s “let’s have tea and cookies with the School Board” approach led to the teachers being trampled to death, not being treated like professionals. But this time, despite that fact that our economy is now much more stratified, things will be /different/ with the neoliberals in charge. Sheesh – the phrase useful idiots comes to mind.

2) Neither Yglesias nor any of his ilk have ever taught a day of school. Yglesias has specifically stated that he has never and will never volunteer for a single day in his local DC public school. He is approximately 30, unmarried, no children, no involvement with schools, communities, parents, children, or real teachers, has never attended a public school. Yet he is a leading “expert” on how to “reform” teaching. That is the McKinsey/Accenture/Bain “strategic management consulting” model that has served our economy so well over the last 30 years, eh?

3) The vast majority of US schools are not in dense inner cities – they are in exurbs. The vast majority of US schools, school districts, and teachers are doing well and providing great education to their students (albeit with current budget cuts…). The vast majority of US teachers do NOT belong to and AFT-affiliated trade union, but to an NEA-affiliated union-cum-professional association. Yet the “reforms” that Yglesias & Co. would so dearly love to bring down on the heads of unionized urban teachers also have the unintended side-effect of damaging the successful suburban pubic schools. Probably unintended by the honest neoliberals that is, but not unintended by the Republicans who support them.

All of this has been discussed extensively in Yglesias’ comments section (under the old comment system, at least), but he no longer deigns to respond to any criticism not expressed by an A-list blogger.

Cranky

[1] Which happened to one of the most militant teacher labor leaders of the 1970s and 80s

27

Cranky Observer 07.18.11 at 4:19 pm

> Yglesias @10
> I’m agreeing that this is a problem, but doubting whether there’s
> a clearly superior non-neoliberal alternative.

Would be interested to hear exactly what positive, “going forward” [1] positions neoliberals DO hold. I fear that in the 2 years since a number of A-list juicebox bloggers converted to this line of analysis I have been put in mind of the definition of a libertarian: a Republican who wants to date liberal women.

Cranky

[1] I apologize for the consultant-speak phrase; neoliberals love that stuff though.

28

Russell Arben Fox 07.18.11 at 4:23 pm

In the absence of an actual argument, I think MY is probably just inferring “unsustainable” from “wasn’t actually sustained”, which is clearly fallacious.

Well said, Chris.

29

dsquared 07.18.11 at 4:32 pm

Easy money is really a cowardly substitute for redistribution

Otoh, as cowardly substitutes for redistribution go, it’s distinctly better than nothing.

30

hartal 07.18.11 at 4:33 pm

Oops garbled my own 15 as I was rushing out the door

The case against ultra-low rates has been made best by Raghu Rajan, a pretty conservative guy. He argues that they hurt small savers, don’t stimulate investment, create property bubbles ABROAD and turn the US into an unstable hedge fund (low Fed rates leads to capital making risky investments abroad leads to foreign governments reversing currency appreciation by buying US debt—so that US investments abroad are financed by short-term liabilities as in a hedge fund).

Krugman has said that the solution for this is not ENDING ultra-low rates but anti-bubble policies abroad.

Stiglitz has warned that ultra low US Fed rates move the world towards currency wars. There is also some concern that the real wage would be reduced by price inflation.

ADDITIONAL: I am bit confused by the point Henwood and Corey Robin are making. Surely they are not against ultra-low rates or QE 3 or are they? That would be hard to square with Henwood’s own past tough-minded and empirically grounded calls for loose monetary policy? When did he start becoming such a skeptic?

Aren’t Henwood and Robin for loose monetary policy, coupled with more deficit spending? Are they warning us against settling only for loose monetary policy? Or are they opposing loose monetary policy even if there is complementary fiscal stimulus? That is, are are they on the same side as former chief IMF economist Rajan in being opposed to ultra low rates and QE3? That would be interesting, no?

31

SamChevre 07.18.11 at 4:37 pm

Could a different political strategy have sustained the New Deal settlement for longer? I don’t know. But given that other countries have done a better job of sustaining some kind of welfare-state capitalism, I remain unconvinced of its impossibility even for the US.

And from a more-to-the-right perspective, I don’t see that. If you take the New Deal settlement to be the salient features of the 1950’s-1960’s job market–plenty of work at one-income-can-support-a-family wages, upward mobility for the working class, and social goods provided primarily to the (white) working class–I don’t see any of the Western economies sustaining that since 1980.

They’ve broken at different points; the US focus has been on plenty of work, the French focus on good wages, the Dutch focus on redistribution mainly to the working class–but in all of the US and Western Europe, there is a strong sense that the wroking class has gotten worse off relative to all 3 of: the upper class, the unemployed or marginally employed, and people in other countries. I’d argue that the last two of those were not legitimately avoidable.

32

Shane Taylor 07.18.11 at 4:38 pm

Like #15, I found Raymond Plant’s book The Neoliberal State enlightening and relevant to this debate. Here was a review by John Gray.

33

Lee A. Arnold 07.18.11 at 4:39 pm

This absolutely galls me but I don’t want to be a troll so I will just write this once because I have to go to work and run new water lines to a laundry sink anyhow.

To me this is like a discussion of what sort of world we need, so that the politics we prefer should be effective.

Henry you write, “I’m sure that critics can point to political blind spots among lefties (e.g. the difficulties in figuring out what is a necessary compromise, and what is a blatant sell-out), but these don’t seem to me to be potentially crippling, in the way that the absence of a neo-liberal theory of politics…is.”

I cannot begin to EXHAUST political blind spots among lefties! They were demonstrated continuously throughout the healthcare reform debate.

And lefties are not paying attention, right now.

Look at what should happen, RIGHT NOW: Obama should insist upon his “big deal” on the budget, which includes long-term tax increases, because that would compel the Republican leadership to whip the Tea Party House to vote in FAVOR of taxes.

And the Tea Party will do it but they are going to hate it, and THAT would destroy the Republican Party.

Why? Because it has put McConnell and Boehner on the horns of a terrible dilemma. They must either choose (1) default, which will destroy the GOP brand with voters, or else they must (2) whip the Tea House Party into a vote to increase taxes which the Teas will hate and it will cause a major and lasting split within the GOP.

(Please don’t respond with the gibberish that the Tea House Party is an uncontrollable monster that is intractable to Boehner. That is what he wants you to think. He wants you to feel “fear of default”.)

Either way it would mean the weakening and perhaps the destruction of the GOP, and make both life and policy considerably easier for several years to come.

So what are the liberals and progressives throughout Bloggonia doing? Whining as usual, about how Obama is selling them out.

What should they be doing? Leaning on members of Congress RIGHT NOW to reject McConnell’s alternative deal, and insist upon Obama’s grand plan.

Why? Because McConnell’s deal is a face-saving measure to save the Republican leadership from the Tea Party’s electoral wrath. What is McConnell’s plan?

Here is the Washington Post, today: “Washington Post, today (July 18) –“Under the plan, Obama would be able to raise the debt ceiling three times over the next year for a total of $2.5 trillion. Congress could also vote on a resolution of disapproval each time, assigning blame to Obama for increasing the nation’s debt….The plan would also create a new congressional panel that would, by the end of the year, seek to come up with a way of reducing the deficit potentially by trillions more through cuts in entitlements and other new tax revenue… While the debt-limit plan has broad support in the Senate, the prospects in the House are less clear and rely largely on whether House Speaker John A. Boehner (R-Ohio) will bring the proposal up for a vote and how many House Democrats would support it since few Republicans are expected to get behind it.”

You can disregard that last phrase, you can bet that Boehner will bring it up for a vote in a heartbeat.

Do you understand the politics of this? Do you understand that the reason that the Senate Dems may throw McConnell and Boehner a face-saving lifeline (by accepting McConnell’s deal) isn’t because of some ridiculous neoclassical capitalist conspiracy but is simply because of the the tradition of collegiality among the Congressional leaders of both parties? Do you see that the only way to counteract this is to put pressure right now on Congressional Dems so they can turn to their colleagues across the aisle and say, “Sorry, but my constituents don’t want it?”

Now tell me what definition of the word “politics” are we talking about here? In the netherworld of “political sustainable” (because god knows you don’t like to work for it), — or in this world?

34

christian_h 07.18.11 at 4:45 pm

I don’t think we should let Sebastian get away with calling labour unions a “populist movement”. This use of “populist” as a catch-all for “non-elite political organization I don’t like” is really tiresome.

35

Tom Bach 07.18.11 at 4:45 pm

Matthew Yglesias when I wrote “at least since Reagan,” I meant, oddly enough, that the assault most likely came earlier.

36

Sebastian H 07.18.11 at 4:47 pm

“The way (some) teachers’ unions behave is a direct result of the way their members have been treated whenever their boards and principals have been allowed to run riot with Calvinball rules and favoritism (now disguised as “incentive pay”). “

I’m not sure this is the best place to get deep into teacher’s union history, but so far as it goes, you seem to be forgetting the ~40 year period, the most recent one, where school boards in such rather large states as Florida and California were almost completely dominated by the teacher’s union supported candidates, and as such were getting exactly what they wanted (with the possible exception of only getting their way on taxes about 3/4 of the time). This is the teacher’s union that young and middle aged Democrats are used to dealing with, and it isn’t pretty.

“Yet the “reforms” that Yglesias & Co. would so dearly love to bring down on the heads of unionized urban teachers also have the unintended side-effect of damaging the successful suburban pubic schools.”

I don’t see it. Successful suburban schools aren’t successful because of seniority pay scales, last in layoffs, and a lack of accountability via testing. Hell, they have quite a bit of accountability through testing via the PSAT and SAT–suburban parents are completely intolerant of teaching that doesn’t get good results there. Tinkering around the edges of seniority pay, young-teacher layoffs and testing isn’t *threatening* the suburban schools. And again the suburban school boards are well in the pocket of the unions anyway, so it isn’t as if the unions are suddenly going to be shut out of anything.

37

Cranky Observer 07.18.11 at 4:51 pm

Replying to Lee A. Arnold’s #32 would derail the thread on the definition of neoliberalism, so I won’t. But to me it is one of the most naive pieces of political analysis I have seen on a blog of the nature of CT in many years.

Cranky

38

bianca steele 07.18.11 at 4:54 pm

I thought Yglesias was calling himself progressive. Whatever “progressive means, I don’t see how one can be both. And whether we are all neoliberals economically or not, what is “neoliberal” in political terms? This is my own idiosyncratic–even subjective–take, but “neoliberal” at times seems to mean something like technocratic (something almost but not quite technocratic) and thus excluding politics, not just as the OP says collective action but any kind of action to make a change outside normal/technocratic channels.

39

roac 07.18.11 at 4:57 pm

Re Yglesias and schoolteachers: He does think that schoolteachers should make more money, even much more money. This is only an apparent exception to the rule I stated way back there somewhere, as he does not think anyone currently teaching school should make more money; he thinks they should all be fired and replaced by recent honor graduates of Ivy League universities. (Those fired can cut hair, a job for which anyone is qualified.)

There is an unstated assumption here that there is no job for which the best possible candidate would not be the valedictorian of the last graduating class at Harvard.

40

hartal 07.18.11 at 5:05 pm

at 2 Bertram quotes Henwood as saying

“Easy money is really a cowardly substitute for redistribution—over the long term, Milton Friedman was more or less right that loose money can’t change the economic fundamentals. It can’t spark much growth, it can’t raise real wages—it’s mostly just froth.”

Well the point is not to raise the real wage but lower it. Indeed that is exactly how Keynes’ theory has often been received. Given stickiness of nominal wages, the only way to reduce the real wage to the unemployed workers’ actual marginal productivity is through inflation caused by loose money.

There is a Keynes who breaks incompletely from such an interpretation of his theory. Some debate he had with Dunlop, I believe.

41

bianca steele 07.18.11 at 5:11 pm

Thought maybe there is a special “Harvard” definition of “neoliberal,” it occurs to me? It’s a word the Harvard alums at n+1 like to throw around a lot, and tho they’re not exactly pro-business, pro-commercializing tendencies, they aren’t exactly pro-democratic tendencies either.

42

Steve LaBonne 07.18.11 at 5:14 pm

bianca, if one came to Harvard from a privileged background in the first place, it will certainly do less than nothing to develop one’s appreciation of democracy.

43

bianca steele 07.18.11 at 5:25 pm

Steve,
My point (sorry, I am typing quickly because my laptop keeps crashing at inopportune times) was that they do not seem entirely sure whether there is a difference between “liberal” in the sense of “hippie” and “neoliberal.” It seems possible that they’ve heard a lot of neoliberal-bashing and have adopted the same from the right, though what they say is very like the neoliberal-bashing you get in progressive and left forums of various kinds.

44

salacious 07.18.11 at 5:27 pm

“Easy money is really a cowardly substitute for redistribution—over the long term, Milton Friedman was more or less right that loose money can’t change the economic fundamentals. It can’t spark much growth, it can’t raise real wages—it’s mostly just froth.”

Except Yglesias is only advocating to get the economy back on trend demand-wise in the short term. Even Keynes would agree that over the long run easy money is “just froth” but, in the long run, we’re all dead etc. etc.

45

Chris Bertram 07.18.11 at 5:29 pm

SamChevre:

I had something a little more generic in mind, which is why I also referred to welfare-state capitalism, which has basically survived (though not unaltered) in lots of countries. I’m not sure I understand your metric about working-class well-being anyway. Why would it be a bad think for the working class if people in _other countries_ secured a higher standard of living and therefore closed the gap? Why is it definitive of welfare-state capitalism as a model that the gap be maintained? I don’t see it.

(Yglesias had a bit of weirdness on this today (or yesterday) also, or so I read him, by referring to China closing the living-standards gap as something people might “worry” about. I don’t think the worry was about the environmental impacts of higher consumption, either.)

46

Sweden 07.18.11 at 5:32 pm

I would love to hear Yglesias comment on the nothern european social democratic welfare-states, countries combining a competitive economy, extensive universalistic and highly redistributive social institutions, extremely high levels of social trust AND some of the highest degrees of extensive labour union influence in the set of democratic countries.

47

Brad DeLong 07.18.11 at 5:38 pm

Ah. It seems to me that Yglesias badly needs some backup here…

Henry’s theory of politics is that successful and beneficial long-run politics can only be accomplished by a political party that is the political arm of a *universal class*–of a self-confident, organized group whose collective material interest is in fact the public interest.

Adam Smith saw the improving landlords of Britain as the universal class. The merchants and manufacturers each had an interest in monopoly–they should be kept as far from power as possible. The urban and rural laboring classes were short-sighted and uneducated–they would sacrifice the future for the present. The crown, the aristocracy, and the executive were too interested in playing the negative-sum game of imperialist war and conquest–they needed to be curbed. Only the landlords, whose rents rose with general prosperity and fell with general penury, had the brains, the organization, the far-sightedness, and the material interest to pursue policies to better the condition of Great Britain. Thus the landlords should rule.

Karl Marx, of course, saw the industrial proletariat as the *universal class* in embryo.

Henry Farrell doesn’t say what his alternative proposed universal class is. Perhaps it is composed of, in rough order:

– Unions
— Public employees
— Technologists
— Celebrity entertainers
— Trial lawyers

But the argument that the Democratic Party should adopt the strategy of pursuing policies to enrich those six groups and hope that it all adds up to (a) the public interest and (b) long-run political dominance seems to me to be relatively weak.

Left neoliberal policies may well not produce.

But it is not clear to me that Henry’s alternative would produce either…

48

William Timberman 07.18.11 at 5:44 pm

Left neoliberal policies may well not produce.

Everybody wants to be a comedian….

49

Cranky Observer 07.18.11 at 5:46 pm

> doesn’t say what his alternative proposed universal class is. Perhaps
> it is composed of, in rough order:

Another possible set:

– academic economists — Wall Street economists — Princes of Wall Street — Secretary/Asst Secretaries of the Treasury — salaried CEOs — the US Chamber of Commerce

This is fun!

Cranky

50

LeeEsq 07.18.11 at 5:50 pm

I think that neo-liberals lack a grand theory of politics because they hate politics, in the sense of organizing, rallying, making speeches, getting people into office, wheeling and dealing, etc. What they want to be is philosopher-kings that can implement policies to help the mass of people but not really have to deal with the mass of people. This is one reason why Yglesias thinks that parlimentary systems are better than Presidential ones. He thinks that parliamentary systems are less political because once you win a majority in the legislative assemby, no more politics is needed. Just have a technocratic cabinet write the laws/policy and parliament will pass it. This is wrong, especially in multi-party parliamentary democracies but its how Yglesias views them.

American politics has had grops of liberal/progressive educated, middle class people who disdained party politics since at least the Gilded Age. Many progressive reformers really didn’t want to have to work with either labor unions or party polticians, especially those associated with Democratic machines like Tammany Hall. The neo-liberals are the current manisfestation of this group.

51

hartal 07.18.11 at 5:52 pm

Interesting indeed.

While he would not accept it, Raghuram Rajan seems to think the real universal class is composed of Hegelian disinterested civil servants (like him), sufficiently immunized from democratic pressures so that they can make investments for long-term growth in human capital above all else, instead of give in to the populist solution of easy credit.

Obviously he does not think the Fed is free from populist pressure.

Really like this interpretation of Adam Smith as the voice for improving landlords. It allows me to see the continuity in the Scottish Enlightenment from Smith to Richard Jones.

52

ezra abrams 07.18.11 at 5:52 pm

deleted – as noted, I really do not want to see this thread degenerate into a set of personally specific accusations, and this comment very definitely moved those accusations up into another gear. Feel free to comment again – but please try to stick to the substance. HJF

53

L2P 07.18.11 at 5:53 pm

“I’m not sure this is the best place to get deep into teacher’s union history, but so far as it goes, you seem to be forgetting the ~40 year period, the most recent one, where school boards in such rather large states as Florida and California were almost completely dominated by the teacher’s union supported candidates, and as such were getting exactly what they wanted (with the possible exception of only getting their way on taxes about 3/4 of the time). This is the teacher’s union that young and middle aged Democrats are used to dealing with, and it isn’t pretty.”

Seriously?

Can you even describe how California schools are funded, and how local school boards can have any meaningful control over that? I mean, without immediately going to Wikipedia and looking up the relevant RTC sections and the many confusing and facially contradictory constitutional amendments. I doubt your one of the 20 or so people who can. So I seriously doubt you’re one of the people who could possibly say, with any authority, that teachers unions got what they wanted on taxes “3/4 of the time.” Because I am one of those 20 or so people, and I was there there for the past decade, and they sure as hell didn’t.

Whenever I hear guys like you and Matty talking about the hordes of high-priced, high skilled teachers that are going to turn education around I throw up in my mouth a little bit. When you pull up with a Brinks truck full of money (and for some perspective, Gates’ entire fortune is enough for two years – so keep looking), let me know. Until then, shut the hell up.

54

Tom Bach 07.18.11 at 5:56 pm

Ah. It seems to me that Yglesias badly needs some backup here…
Unless, of course, he’s wrong, in which case he doesn’t and, as he is, you oughtn’t.

55

medrawt 07.18.11 at 6:01 pm

I’m pretty sure Yglesias began describing himself as “neoliberal” semi-ironically, in response to the fact that that’s what everyone else started calling him. My Google skills are not offering up the half-imagined post in which he threw up his hands and went with the flow on this one.

In general, I think there are enough specific things to disagree with Yglesias about that I’m baffled that he seems so routinely misinterpreted (usually through some sort of tortuous “reading between the lines” which divines his underlying intent). Doesn’t mean he doesn’t get stuff wrong, but the whole “I know what he REALLY cares about and doesn’t care about” thing is weird.

56

Alex 07.18.11 at 6:16 pm

I think that comment is one of the worst things Brad DeLong has ever written. It actually makes it worse that it begins with an intelligent comment about Adam Smith before descending into a hippie-punching assault on a flagrant straw-man. (John Barleycorn must die?)

57

Russell Arben Fox 07.18.11 at 6:20 pm

LeeEsq (#49),

This is one reason why Yglesias thinks that parlimentary systems are better than Presidential ones. He thinks that parliamentary systems are less political because once you win a majority in the legislative assembly, no more politics is needed. Just have a technocratic cabinet write the laws/policy and parliament will pass it. This is wrong, especially in multi-party parliamentary democracies but its how Yglesias views them.

I think this gets Ygelsias and parliamentary systems quite wrong. Matt has made it pretty clear over the years that it frustrates him to see people thinking that politics consists of grand compromises/consensuses; democratic politics for him–and I think he is absolutely correct here–is a matter of fairly constant partisan contestations. The virtue of parliamentary systems is that, in principle (and to a lesser degree, even in practice), they actually allow elected parties to rule, as opposed to having even clear majorities be stymied by special interests that can make use of numerous veto points whose defenders will dress them up as constitutionally sacrosanct “checks and balances” (e.g., “without aggressive judicial review/an effective supermajority requirement in the Senate/the undemocratic electoral college/etc., all will descend into tyranny!”). Parliamentary systems of democratic government empower majority-winning parties and coalitions to move their agenda forward, which gives their opposite numbers something clear to run against, as opposed to generating desperate accusations and conspiracies out of mid-air. Again, I realize–as I’m sure Matt realizes; he’s definitely not stupid–that parliaments rarely manage all this…but still, the idea is that parliamentary governance is a tool for making democratic politics more legitimate and responsible, not that they are a way to get away from politics entirely.

58

MPAVictoria 07.18.11 at 6:21 pm

“—Unions—Public employees—Technologists—Celebrity entertainers—Trial lawyers”
Wow….
Did a blue collar worker steal candy from you as a child or something?

59

Henry 07.18.11 at 6:23 pm

bq. Henry’s theory of politics is that successful and beneficial long-run politics can only be accomplished by a political party that is the political arm of a universal class—of a self-confident, organized group whose collective material interest is in fact the public interest.

Brad – I’m not at all sure where you’re getting this from, but it’s about as far from my theory of politics as one can get. If you can point to somewhere where I make an argument that even _hints_ at this, I would love to see it. My ideal of politics is one in which power asymmetries between different classes of actors are as minimal as possible, so as to forestall the development of systematic inequalities of outcome in the marketplace, in society, and in politics. In actually-existing-capitalism, as we see it in the US today, we see an enormous disparity of influence between a small group of elite actors (with the financial industry being particularly important) and the vast majority of the public (who endure stagnant real incomes, have minimal influence on politics etc etc). The traditional way of trying to right this imbalance (or at least prevent it from tilting as badly as it does) is to have large organized interests with some rough interest in catering to the working and lower middle classes – most prominently unions. These can server as a counterbalancing force. Here, Hacker/Pierson and others are probably right in arguing that the destruction of unions over the last few decades has been one of the key factors explaining the dramatic increase in inequality.

None of this involves some kind of ‘universal class’ or even hints at it. The lesson that one can take from e.g. the work of Adam Przeworski is that social democracy was politically successful only when it gave up on the workers-as-universal-class stuff, in favor of constructing alliances with other actors (as in the Swedish agrarian-reds coalition). But it does suggest that figuring out ways to strengthen the collective organization of broad interests is a necessary precondition for healthy politics. And here, social democrats and ‘countervailing interests’ liberals like J.K. Galbraith are singing from the same hymnsheet.

This may be a tough order as Matthew Yglesias suggests above – no-one has any very convincing solution. But it also suggests that there should be at the least a ‘first do no harm’ principle to any policy decisions – at the _very_ least, left debate over any proposed major policy initiative should look at whether it is likely to help, or to hurt, the potential for beneficial organized collective action. And neo-liberals don’t even begin to get there, I don’t think, because they don’t have any very good theory of politics (while the leftwing version cannot tell you how to get to a better American politics in any time span under a couple of decades, it can at least give some guidance about what policies are likely to make things even worse than they are).

60

BJN 07.18.11 at 6:23 pm

MY is a cypher for all the strands among democratic leaning commentary that we don’t like (or rather the “left neoliberal” strand Henry was trying to defend), whether or not he actually embodies them. I disagree with him on a lot of things, but he is not the paradigm of the snotty elitist liberal that hates any and all working people that it is tempting to paint him as.

I think Henry is right that we need to find a good definition of what the left neoliberal thought is, and what we disagree with, rather than just pinning our anxieties on one person who isn’t the best example of it. Then he can go back to just being “liberal blogger who is wrong about education reform” and we can all calm down about where he went to college.

61

Castorp 07.18.11 at 6:26 pm

“But the argument that the Democratic Party should adopt the strategy of pursuing policies to enrich those six groups and hope that it all adds up to (a) the public interest and (b) long-run political dominance seems to me to be relatively weak.”

Even if you like left neoliberal solutions to what you perceive are the country’s problems then you still have a collective action problem and a massive power asymmetry. In a contest between the imagery “public good” against the Chamber of Commerce, Wall Street, etc. We know who will win. Unions aren’t the only answer, of course, but I think if left-neoliberal really understood that politics was a struggle for power, then they would accept that unions were an irreplaceable ally and try to stop the policy drift that has helped destroy them. (Of course, there would still be the problems stemming from globalization and the move to the service sector as well as the competition among states, but surely the left should at least but supporting policies such as card check to ameliorate the problem.)

It seems to me that Delong’s and Yglesias’ implicit assumption about politics is that it consists of (should consist of?) a kind of Habermasian public debate that, if it weren’t disturbed by the Tea Party or crazy Republicans who keep distracting the public, would come to a reasonable accomodation between left neoliberals and right neoliberals–with the former having the upper hand due to their superior arguments. I say this even though I know that in certain contexts both have an excellent sense of the politics of, say, the debt crisis etc., but I really see no other way to explain this refusal to look at how power affects politics.

62

lemmy caution 07.18.11 at 6:28 pm

Yglesias was a philosophy major and his weak spot for economics 101 derives from its ability to easily generate rhetorical arguments from first principles. He is in general not anti union. He is anti-school union as a part of his ivy league disdain for real teachers and love “teach for america” types though.

63

Castorp 07.18.11 at 6:28 pm

(The above was written before Henry’s reply)

64

Chris Bertram 07.18.11 at 6:30 pm

Well as usual, Brad is busy constructing boxes to put people in. Those who read his blog will know that when he isn’t sneering at those to his left, he is sighing and groaning at all those policymakers who fail to grasp that _reason dictates_ the adoption of his preferred solution which is in the best interest of everyone. I wonder why they don’t adopt his policies then? What could the explanation be? Oh … Henry may be right and the fact is that he doesn’t have any grasp of political power and mobilization.

Anyway, universal classes …. Readers of Crooked Timber may be aware that a few weeks ago in a post linked to by Russell above, I tried to open a discussion of how we might build a progressive coalition (workers plus hippies if you want to caricature – which I’m sure you will) in the light of the disintegration of the working class as an effective agent for social change (as argued by Jerry Cohen). (Brad put up a post sneering, as usual!) Subsequently, John Q wrote a post on Marx and class which visited some of the same ground. Some people weren’t happy with the heterodoxies on display here, but, hey, that’s life. At least we were giving it a go.

And Brad? Well it’s back to the impotent shaking of the head and deploring the sheer lack of intelligence of those in government and the journalists that write about them. Why oh why don’t they understand?

(Actually, I’m being unfair to Brad. He _does_ have a theory of politics. It is that people _would_ see the pure light of wisdom radiating from people like him, if only those pesky people to his left would shut up and stop frightening the horses.)

65

Henry 07.18.11 at 6:30 pm

Also – as BJN suggests – this comments thread would be rather better if it got away from the “polemics and specific personalities” as the original post suggested, and concentrated on the underlying questions. I’m actually not trying to defend ‘left neoliberalism’ here, but instead to try to figure out why it seems to me to be _systematically_ blind about a lot of stuff, regardless of the personal merits or demerits of its various proponents.

66

Tom Bach 07.18.11 at 6:30 pm

Left neoliberalism: people who say that they want nice things and then make it impossible to have them

Right neoliberalism: people who admit that they don’t want nice things and then make it impossible to have them.

67

Sebastian H 07.18.11 at 6:32 pm

“Seriously?”

Quite. It is a fact that the teacher’s unions have dominated California school boards for almost 40 years (and were strong even before that). They get what they want on the school board level, which is the level of union contracts, collective bargaining, and all the things you could want out of local union power. They have also been an enormously powerful force on the state level, being one of the very very very few entities who got their taxes pushed through the CA initiative system in multiple elections in the 1980s and 1990s. The fact that they got what they wanted for decades and decades and still want more is not really worth whining about no matter how much appeal to authority you want to make about the budget structure. Yes *now* that CA’s budget is completely falling apart, the teacher’s union can’t squeeze everything it still wants out of the budget. But that doesn’t mean that they haven’t completely dominated the education field for 40 years. They have. And if you aren’t happy with education in CA, there has to be an enormous heap of blame for the union–it has been as fully in charge as you could plausibly hope for–and for decades. Neo-liberals generally aren’t thrilled with the state of education in places like CA, so it is perfectly natural that they would be highly skeptical of the powers that have been in charge of education for 40 years–which in CA is definitely the teachers union.

68

Myles 07.18.11 at 6:35 pm

I’m agreeing that this is a problem, but doubting whether there’s a clearly superior non-neoliberal alternative.

I think Matt has a point with this one. The labour unions of the post-war U.S. socio-political paradigms managed to rely, for their power, on things as insane as banning direct city-to-city trucking. (Basically, before Jimmy Carter liberalized trucking routes in the U.S., you can only truck via specific routes in a specific way, or else incur a much larger expense.) If that kind of thing was the basis of union power, it is clearly not a power that is sustainable.

It is also notable that American unions cooperated in entrenching enormous utility monopolies such as Ma Bell, from which part of their economic power derived. Again, not necessarily sustainable. When you are relying on things like getting a share of monopoly rents to solidify your position, it builds dissent into the system.

69

Chris Bertram 07.18.11 at 6:35 pm

Castorp:

bq. It seems to me that Delong’s and Yglesias’ implicit assumption about politics is that it consists of (should consist of?) a kind of Habermasian public debate that, if it weren’t disturbed by the Tea Party or crazy Republicans who keep distracting the public, would come to a reasonable accomodation between left neoliberals and right neoliberals—with the former having the upper hand due to their superior arguments.

Me:

bq. He does have a theory of politics. It is that people would see the pure light of wisdom radiating from people like him, if only those pesky people to his left would shut up and stop frightening the horses.

Actually, I think both of us are right.

70

Cranky Observer 07.18.11 at 6:36 pm

> I’m pretty sure Yglesias began describing himself as “neoliberal”
> semi-ironically, in response to the fact that that’s what everyone
> else started calling him. My Google skills are not offering up the
> half-imagined post in which he threw up his hands and went with
> the flow on this one.

As far as one could tell from his posts he was pretty angry about it for a while anyway. Somehow he wanted to still be considered a Democrat and progressive while suddenly posting simplistic Microeconomics 101-style explanations of how unfettered perfect markets can solve ever social problem.

> In general, I think there are enough specific things to disagree
> with Yglesias about that I’m baffled that he seems so routinely
> misinterpreted (usually through some sort of tortuous “reading
> between the lines” which divines his underlying intent).

Since one of the standard tropes of the juicebox generation bloggers is to “unpack” what others say and decide which subparts are doing the “heavy lifting”, I don’t see how either you or MY could object to others doing the same to his work. And since the neoliberal analysis – both in general and MY’s specifically – contains ginormous unstated assumptions and unexplored chains of consequences IMHO it is quite fair to do so.

Cranky

71

Cranky Observer 07.18.11 at 6:46 pm

> Henry 07.18.11 at 6:30 pm
> Also – as BJN suggests – this comments thread would be rather
> better if it got away from the “polemics and specific personalities” as
> the original post suggested, and concentrated on the underlying questions.
> I’m actually not trying to defend ‘left neoliberalism’ here, but instead to
> try to figure out why it seems to me to be systematically blind about
> a lot of stuff, regardless of the personal merits or demerits of its
> various proponents.

Henry,
I agree, but it might help if some of the A-list blogger/analysts who are self-proclaimed neoliberals could provide a thorough (and, one hopes, convincing) definition of what neoliberalism /is/ and a general theory of what its positive policy prescriptions are or are not. “Use markets, outsource government, and unions are OK as long as they don’t ask for wages benefits or work rules” is basically just mildly regulated libertarianism[1] which we already have plenty of without it attempting to colonize progressive space or the entire Democratic Party.

Cranky

[1] Remember that John Galt carried a union card at the 20th Century Motor; it wasn’t until the union “went too far” that he revolted.

72

SamChevre 07.18.11 at 6:47 pm

Chris Bertram:

Why would it be a bad think for the working class if people in other countries secured a higher standard of living and therefore closed the gap?

It may not need to be, but it definitely seems universally to have been. (I can come up with a just-so-story as to why, but fundamentally I just say look at Buffalo and Liverpool and the Ruhr and Lille.)

73

Russell Arben Fox 07.18.11 at 6:50 pm

Chris (#64),

Readers of Crooked Timber may be aware that a few weeks ago in a post linked to by Russell above, I tried to open a discussion of how we might build a progressive coalition (workers plus hippies if you want to caricature – which I’m sure you will) in the light of the disintegration of the working class as an effective agent for social change (as argued by Jerry Cohen).

I’m still waiting for your promised follow-up to this, by the way!

74

geo 07.18.11 at 6:56 pm

Myles @68: things as insane as banning direct city-to-city trucking

Myles, what would you estimate is the proportion of all the social damage ever wrought by all the union featherbedding in history as compared with, say, the net social damage wrought by deregulating (or not employing existing regulations on) the financial industry? Subsidizing the energy and transportation industries? Privatizing national security and the corrections system? Allowing concentrated ownership of media? Deferring to the insurance and pharmaceutical lobbies? Etc? As one to a million, perhaps? One to ten million? And then, how would you estimate the proportion of all the energy you’ve expended complaining about abuses that favor unions versus the energy you’ve expended complaining about abuses that favor business?

Now do you understand why many others on CT (not me, I emphasize) consider you a heartless and brainless twit?

75

Cranky Observer 07.18.11 at 7:00 pm

> Now do you understand why many others on CT (not me, I
> emphasize) consider you a heartless and brainless twit?

Not to mention so often wrong-by-omission; local teamster unions may well have assisted but the primary force behind regulations on inter-city trucking were the railroad executives and the capital behind them. The railroads lost economic and political power throughout the 1960s and 70s; then up pops deregulation of trucking in 1978. What a coinkydinks!

Cranky

76

Myles 07.18.11 at 7:01 pm

Daily quota exceeded.

77

K. Williams 07.18.11 at 7:03 pm

“In actually-existing-capitalism, as we see it in the US today, we see an enormous disparity of influence between a small group of elite actors (with the financial industry being particularly important) and the vast majority of the public (who endure stagnant real incomes, have minimal influence on politics etc etc). “

Henry, if the financial industry is, in fact, the most influential player in American politics, how is it that TARP, the most important piece of legislation dealing with the industry in the last decade, was killed by the House of Representatives the first time around, and killed precisely because the vast majority of the public was against it? The initial defeat of TARP erased well over a trillion dollars in equity values, sent bank stocks spiraling downward, and put numerous firms on the edge of bankruptcy. If the financial industry is, in fact, the fundamental arbiter of what happens in Washington, how did it fail so miserably in a task that was so important to it?

It’s remarkable that you can critique Yglesias for having a weak theory of politics when your own is really just a crude updating of the idea that the state is the handmaiden of the capitalist elite, and is almost comically indifferent to the actual political views of most Americans.

78

Chris Bertram 07.18.11 at 7:05 pm

Russell #73 – sorry, I’ve a conference to organize and an insane list of writing deadlines to meet this summer, hence not so much blogging.

79

Myles 07.18.11 at 7:06 pm

Exceeded again.

80

Henry 07.18.11 at 7:11 pm

bq. Henry, if the financial industry is, in fact, the most influential player in American politics, how is it that TARP, the most important piece of legislation dealing with the industry in the last decade, was killed by the House of Representatives the first time around, and killed precisely because the vast majority of the public was against it? The initial defeat of TARP erased well over a trillion dollars in equity values, sent bank stocks spiraling downward, and put numerous firms on the edge of bankruptcy. If the financial industry is, in fact, the fundamental arbiter of what happens in Washington, how did it fail so miserably in a task that was so important to it?

There’s a very good recent book by Pepper Culpepper, “Quiet Politics and Business Power,” that I really need to review properly, which speaks to this. Short version is that business lobbying power is extremely effective, except on those rare occasions when there is genuine public controversy for exogenous reasons, when we may expect to see action taken against business (but quietly undermined again after public attention has drifted away). This seems to me to be a rather good model of what happens – and one that fits well with the TARP story. And while there is no _necessary reason_ that the state should be the handmaiden of the capitalist elite, and almost comically different to the actual political views of most citizens, that surely seems to be the state of American democracy today. I would recommend you read e.g. Larry Bartels – who is nobody’s idea of a Marxist firebrand – on the evidence involving US politicians’ responsiveness to their constituents.

81

roger 07.18.11 at 7:14 pm

Bob at 18 has a point. Surely one of the easier political issues of our time is taxes. Raise taxes tremendously on the rich, and use the revenue to lower taxes tremendously on the below 250 thou crowd – the 80 percent. A nice, majoritarian solution to the tax problem which runs into the fact that most neo-lib technocrats are among the targets of that movement. Naturally, I don’t expect them to welcome it.
Still, treating taxes as though it were an all up or down proposition is, in fact, what makes Dem policies as unpalatable as GOP ones. The old calculation by red staters, before, was not at all stupid: they could pretty much foresee that the meateating conservatives they would elect would not, in actuality, shrink government. This was simply moral pablum. Enough Dems and GOPers of all stripes would veto any serious inroad into these areas. But they did see that the GOP could get taxes lowered. And they noticed that the Dem reply was to raise taxes not on those who benefited most from our absurdly unequal distribution of wealth, but on the middle and wage class. A tax policy in combination with other government policies to actually shave, say, 10 percent of the wealth from the top 20 percent – who own 75 percent of it – and shift it to the bottom 80 would, among other things, have been a perfectly logical response to the great Recession. Instead, the technocracy mounted the largest welfare operation in history for precisely those top 20, culminating in a truly absurd program of loaning +6 trillion dollars, via the Federal Reserve’s ‘special’ programs, to those with incomes and assets within that top 20. This policy held steady under Bush and Obama, often with the same players facilitating it. There was no excuse for it, and it stuck a knife in the back of the middle and wage class. In compensation, they got a terrible healthcare insurance program that will probably not work when it comes on line, as the Democrats start cutting social security benefit increases and finding ways to carve away on Medicare.
This is not some unexpected result of a benificent intention. The new class takes care of itself. Yglesias is a product of that new class, dallying with libertarian economic doctrine – for instance, about the American auto company bailouts – and finding in Obama the kind of ruler who he once supported, on his own account , in Mass.: Romney. These poeple many not destroy the Democratic party,but they will hollow it out until it is meaningless.

82

chrismealy 07.18.11 at 7:15 pm

It’s been a while since I’ve read Yglesias but back when I did his marketianism only amounted to advocating liberalizing DC bar licenses and building heights (That’s why I gave up on him, enough with the bar licenses already). Atrios says pretty much the same thing about parking mandates and nobody calls him neoliberal. And a weird affection for Scott Sumner. But Henry is onto something, and it’s not just Yglesias. Anybody who should have been a socialist and takes econ in an American university gets all the fight sucked out them. That’s what happened to me. Mainstream econ induces something somewhere between fatalism and nihilism. Like, it’d be nice to help people but mumble mumble deadweight loss.

Anyway, I’d be a lot happier with Yglesias if he stopped sucking up to Tyler Cowen and started kicking him in the balls. Cowen is an asshole.

83

medrawt 07.18.11 at 7:16 pm

Since one of the standard tropes of the juicebox generation bloggers is to “unpack” what others say and decide which subparts are doing the “heavy lifting”, I don’t see how either you or MY could object to others doing the same to his work. And since the neoliberal analysis – both in general and MY’s specifically – contains ginormous unstated assumptions and unexplored chains of consequences IMHO it is quite fair to do so.

I’m not objecting to analysis, I’m objecting to analysis proposing that, say, Yglesias’ affection for parliamentary systems (which I’m not qualified to assess, since I don’t know anything about them, and you’d be perfectly fair to snark that neither does he) stems from antidemocratic sympathies rather than, say, frustration that the popularly elected POTUS can’t get the Senate to confirm anybody, or that individual Senators can, quite undemocratically, enforce chokeholds on the process of government. Cherrypicking comments sections is generally unfair, but mostly I have in mind a variety of “I bet he also thinks [horrible thing] is great!” when, in fact, he’s on the record as saying “I think we need to focus attention on trying to alleviate [horrible thing].”

But I think this side discussion is a good illustration of why in the post Henry suggests moving away from discussion of specific personalities. Personally, I don’t think “liberal” or “progressive” vs. “neoliberal” is a helpful way to think about the dynamic here, in part because those terms are, as seen, so loaded as to preemptively color the discussion.

84

roger 07.18.11 at 7:17 pm

PS – some of the beneficiaries of the loan programs were nicely profiled in a past Matt Taibbi piece in the RS:
http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411

85

Kevin 07.18.11 at 7:17 pm

The limit of neo-liberalism is liberty. Neo-liberals are nothing more than fascist war mongers with a D in front of their names. So much so I bet you all make ole GW Bush quite jealous. Liberty will win, statist war monger, mass murders will lose.

86

hartal 07.18.11 at 7:18 pm

It’s great to see Chris B come out against sneering at people to the left of you!

Chris B speaks of “the disintegration of the working class as an effective agent for social change (as argued by Jerry Cohen).”

But the home equity that gave so many Americans the illusion of being middle class has gone up in smoke. Now they suffer all the precarity of the proletarian condition–enduring a bout of unemployment without resources of your own, not having savings for retirement, not being able to pay for your kids’ education, and–in the US–having to go without health care even if you do get a job.

I would like to hear Cohen’s actual argument, or even be given the citation.

Henry seems to agree with an argument by Pierson and Hacker that the juridical de-collectivization of the working class, as Poultanzas would have put it, is the primary cause of the absence of countervailing forces.

And that points in the direction of focusing politics on the working class. So perhaps Henry and Chris disagree.

A captured NRLB, employer domination of the secret ballot process and the threat of relocation have conspired to make less than 10% of the private workforce non unionized.

87

Henri Vieuxtemps 07.18.11 at 7:19 pm

Personally, I don’t see how these neoliberal technocrats deserve the prefix “left”. Surely someone advocating, say, humane treatment of slaves in 1850’s South can’t be called ‘left slavery advocate’? They are correctly identified as ‘center-right’ everywhere, except of the US, for some reason.

88

hartal 07.18.11 at 7:23 pm

Oh bloody hell. That’s enough distracted commenting. Less than 10% unionized. More than 90% of the private workforce deunionized. Hope the point was still clear.
Gotta go grade papers.

89

Cranky Observer 07.18.11 at 7:29 pm

> medrawt @83
> Personally, I don’t think “liberal” or “progressive” vs. “neoliberal” is a helpful
> way to think about the dynamic here, in part because those terms are, as seen,
> so loaded as to preemptively color the discussion.

I appreciate your #83; I agree with much and disagree with some.

For the specific quoted point, this is a standard talking point of neoliberals when they come under criticism from progressives or actual liberals. The problem being that it isn’t clear to the liberals why they should abandon their principles, goals, and politics to help the move to a gently-regulated libertarianism just because those who have abandoned liberalism to take up the neoliberal mantle say it is a “more optimal” state. Remember that many of the neoconservatives were originally strong leftists; their departure to form a new wing of Republicanism didn’t work out very well for anyone on the planet.

Cranky

90

bianca steele 07.18.11 at 7:29 pm

Ooh, just saw Cranky Observer @ 27: What do you call a libertarian who wants to date rightwing women, though?

91

hartal 07.18.11 at 7:31 pm

re 80 “And while there is no necessary reason that the state should be the handmaiden of the capitalist elite, and almost comically different to the actual political views of most citizens, that surely seems to be the state of American democracy today.”

The state needs tax revenue; there is no taxable income unless business invests; state is therefore structurally subordinate to the interests of private capital.

The state must do what it can to get private financial actors to make credit flow again, and industrialists to invest again. This is the first policy priority of the state, and it must accomplish it within the property rights regime.

Henry, this is a really old argument. You’ll find it in Poulantzas and the writings of a couple of Stanford academics–Martin Carnoy’s book on the state and Joshua Cohen’s On Democracy.

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geo 07.18.11 at 7:32 pm

roger @81: Raise taxes tremendously on the rich, and use the revenue to lower taxes tremendously on the below 250 thou crowd – the 80 percent. A nice, majoritarian solution to the tax problem which runs into the fact that most neo-lib technocrats are among the targets of that movement.

Two factual questions: 1) aren’t a lot more than 80 percent of in the “below 250 thou crowd”? and 2) doesn’t that include most neo-lib technocrats? If the neo-libs were indeed rich, then understanding their resistance to majoritarian solutions would be easy. But most of them aren’t; there’s something else going on. Like the original Progressives, the Lippmannites, and New Republic liberals in every age, they seem to dread the great populist beast and to have committed themselves instead to working with enlightened members of the ruling class. It’s a fantasy, of course, in practice, they always wind up working for, rather than with, the ruling class. But it’s a persistent one. You might almost call it a zombie fantasy.

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James Reffell 07.18.11 at 7:34 pm

He is anti-school union as a part of his ivy league disdain for real teachers and love “teach for america” types though.

So, Teach for America folks aren’t “real teachers”? Wonder what they’re doing in those classrooms, then. Playing parcheesi?

94

Henry 07.18.11 at 7:37 pm

hartal – haven’t read the Carnoy. Josh Cohen is of course very interesting on this, and perhaps the Poulantzas who seemed to be starting to emerge from the Althusserian maze in State-Power-Socialism would have been interesting too had he survived, but his theory of the state was too bound up in structuralist abstractions for me ever to buy fully. Ada Przeworski has a lovely little book, long out of print, on theories of the state, which I remember as having been particularly good and concise on the Poulantzas-Milliband debate. And speaking of the generational move from leftism to neo-liberalism …

95

Gordon Henderson 07.18.11 at 7:37 pm

Matthew Yglesias: I think it’s more plausible to say that the policy environment has grown more hostile to unions as a result of unions’ decline.

The graph you linked to shows that from around 1937 to 1980, 25% or more of the labor force was unionized. Since 1980, less than 25% of the labor force has been unionized. Once could fairly say that “Since Ronald Reagan became President, the share of the workforce that is unionized has dropped to pre-New Deal levels.” Attributing decline in union power to Reagan is more about the drop to pre-New deal levels of union membership since 1980 than it is about union density in itself. Do you think that Reagan’s economic policies had no impact on union membership?

96

Gordon Henderson 07.18.11 at 7:46 pm

Actually, I take that back. Other than disrupting the air traffic controller’s strike, I can’t find any evidence of Reagan having any anti-union policies. It appears Matthew Yglesias is right!

97

Castorp 07.18.11 at 7:46 pm

“What do you call a libertarian who wants to date rightwing women, though?”

A conservative?

98

medrawt 07.18.11 at 7:47 pm

Cranky @88:

Well, I don’t think I’m a neoliberal myself, but who knows, I might be! What I really mean by the comment you quoted is that I think there are multiple dynamics of argument here: the fiscal v. monetary dispute discussed in the post by Mr. Henwood, the broader ideological conflict between “gently regulated libertarianism” and real liberalism/progressivism, and the dispute over how to politically resolve (or win) the actual current fights going on in government, generally between actors who are hopelessly disappointing to everyone participating in this comment thread. I don’t think you can reliably depend on a binary that will usefully pick out how people who feel about one of those disputes feels about the others.

99

K. Williams 07.18.11 at 7:55 pm

“The state needs tax revenue; there is no taxable income unless business invests; state is therefore structurally subordinate to the interests of private capital.”

Actually, the state can print whatever money it needs, at least in the case of the US. It chooses not to, but it is not, in any sense, dependent on business for taxable income. Voters, by contrast, are very much dependent on business investment for their livelihoods, since capitalism is the only system that has proven capable of generating high living standards for the vast majority of a country’s population. Which may have something to do with why a politics based on pitting labor v. capital has never come close to being a majoritarian politics in the US.

100

Cahal 07.18.11 at 7:58 pm

I’m happy to see this, because over the last week I have been discussing the UK austerity drive with Scott Sumner in his comments, and it went a little something like this:

Me: ‘I hate austerity.’

Scott: ‘NGDP is high.’

Me: ‘But only because of regressive tax increases. People are seeing huge erosion of living standards, especially the poor.’

Scott: ‘NGDP is high.’

Me: ‘But what about the halving of child disability benefit at a time when corporation taxes are being decreased.’

Scott: ‘Britain has high government expenditure as % of GDP.’

This is obviously a characture – Scott said plenty of substantial things. But he seemed unable to contemplate anything other than aggregates. It remind some of a post where Brad Delong called out Milton Friedman for basically conceding the macroeconomy had to be managed, but trying to ‘hide’ it away as a ‘natural’, constant growth of the money supply.

Similarly, blaming CBs for the GD/LD is like saying ‘well you do actually need to manage the economy, because it is unstable’, but then trying to frame it as a failure of governments.

101

Netbrian 07.18.11 at 7:59 pm

On Matt Y’s twitter feed, he seemed to be looking for specific areas of policy disagreement between him and people more sympathetic to the old left-wing coalition. I would say some major examples would be –

a) Private provision of public service
b) Trade
c) Immigration
d) Degree of regulation of business practices (for instance, regulatory limits on returned check fees.)

102

Tom Bach 07.18.11 at 8:09 pm

Reagan was anti-labor.

103

roger 07.18.11 at 8:17 pm

k.williams, in the 50s, the marginal tax rate for millionaires was about 90 percent. The last time wealth disparity was as high as it is right now was in 1929. So, basically, I’d say Americans are very content to use their majoritarian power to soak the rich, knowing that the rich do nothing but manage and invest, and that they will continue to do so in the U.S. – as they have done through the 20th century – with much grumbling, but without really pouting or taking Ayn Rand’s solution seriously. Contemporary capitalism doesn’t mean aberrant inequality – this is more characteristic of such less developed countries as Turkey and Mexico.
However, at the moment, there is no party mechanism for even trying to achieve a majoritarian solution. Both parties, for instance, heartily approved of what the Fed lending program was all about. Both parties have designed an industrial policy for the U.S. that de-favors manufacturing and favors finances. At the moment, it looks like the policy elites are simply going to continue down that path for a while. But I’d bet Americans will surprise you if that policy continues to produce a lowering of their standard of living. Then ‘ideals’ like capitalism will go right out the window. Socialism is an ideal, but capitalism will always simply be a vehicle.

104

John Quiggin 07.18.11 at 8:17 pm

Coming in v late, and responding to MY@1, one of my many incomplete and ongoing series of posts (on “Hope”) is aimed at dealing with precisely the question: given that the political divide is now between various versions of technocratic rationality on the left (this isn’t just a problem for neoliberalism as its usually defined*) and a politics of tribalism and top-1 per cent class interest on the right, how can the left motivate the kind of political mobilisation that is needed? The answer I’ve sketched out is the need for a renewal of a positive kind of utopianism, looking behind day-do-day political realities to what might feasibly be achieved in the future.

* It’s possible that I’m using technocratic rationality more broadly than others, but support for large-scale job creation, restoration of progressive taxation, attempts to improve the position of unions and so on all seem to me to fit this label, whereas nothing in the rhetoric of the US Republican Party does so.

105

LeeEsq 07.18.11 at 8:29 pm

Attn medrawt at 83: I think the mistake that Yglesias makes frequently is that he believing that if things were a little different than policy would go the way he wanted to more often. Recently he had a post that basically pointed out that the cost of building a continental high-speed rail network is slightly less than what was spent in Afghanistan and Iraq. Factually this is true, if the United States government did not spend so much bad/stupid on things like the War on Terror or the War on Drugs than there would be more money to spend on better things.

However, Yglesias seems to assume that the United States government would spend more on things he likes, and that most of the readers of this blog would like, if it did not spend money on the bad/stupid things. I think this is a mistaken assumption. Without an actual grassroots movement/demand for a continental high-speed railnetwork than it would most likely not happen even if the money. If a trillion dollars is suddenly made available for trnasportation, most of it would go to road contruction/repair or air travel rather than bus/rail transit.

This is why I’m not really much of a fan of Yglesias’ advoacy for parliamentary government. Its one of his if things were a little different than things would go my way more often desires. Without a grassroots demand/movement for something, whether it would be desegregation, labor rights, welfare state programs, or the Second Avenue subway than they won’t happen.

106

Chris Bertram 07.18.11 at 8:33 pm

Matt Yglesias is complaining on twitter that his critics don’t really have any policy alternatives. I’ve tweeted back that Juliet Schor’s Plenitude represents one kind of alternative, and it does. Building a coalition to support that is hard, and maybe for Yglesias it is outside the “Overton Window” so doesn’t count as an alternative.

107

K. Williams 07.18.11 at 8:41 pm

“k.williams, in the 50s, the marginal tax rate for millionaires was about 90 percent. The last time wealth disparity was as high as it is right now was in 1929. So, basically, I’d say Americans are very content to use their majoritarian power to soak the rich, knowing that the rich do nothing but manage and invest, and that they will continue to do so in the U.S. – as they have done through the 20th century – with much grumbling, but without really pouting or taking Ayn Rand’s solution seriously.”

The marginal tax rate on millionaires in the 1950s has little or nothing to do with what I was talking about (the lack of majoritarian support for a labor v. capital politics), and, for that matter, has nothing to do with the left v. neoliberalism question. Yglesias is in favor of higher taxes on millionaires. Delong is. I am. More important, it’s a profound mistake to see the high marginal tax rate as in some way an expression, in any sense, of anticapitalist sentiment. In the first place, the number of people who were actually subject to that tax was vanishingly small. Second, most of the investment that was done then was done by corporations, not private investors — companies generally funded investments out of earnings, rather than relying on capital markets. So there was no conflict between taxing a few really rich people at high rates and being friendly to business.

Finally, the often-unnoticed truth of the postwar years in America is that while those years were very good for workers, they were just as good for corporations. American companies have never enjoyed profit margins as high as they did in the 1950s and 1960s, and corporate income never constituted a greater share of GDP than it did in the early 1960s. (The corporate share in the middle of this decade equaled that of the earlier period, but once you account for the fact that a hefty chunk of the “profits” earned by the financial industry during the bubble were in fact illusory, the earlier period retains its title.) The magic of the postwar era was not that it somehow exalted the interests of labor over business, but rather that labor and business were able to happily prosper together. I’ll just say it again — there’s never been a time in American history when an anti-capitalist, anti-market project had a hope of being majoritarian.

108

Ben Alpers 07.18.11 at 8:51 pm

I’m coming late to this discussion. Though I have a lot I feel like saying, I’ll limit myself to addressing two very separate points.

1) temp argues @17 (in defense of MY’s technocratic tendencies) that “successful social programs generate their own constituency.” What’s missing from that statement is a single word: eventually. Eventually, a successful social program builds it own constituency. But one cannot create the political capital to pass such a program based on a future constituency that sees its benefits. And major social programs take time to take full effect…and can be derailed en route to implementation. This may, still, be the story of the ACA. Whether or not it would eventually build its own constituency is a question that we may never get an answer to. But I think it’s fair to say that a more thoroughgoing and successful reform of our healthcare access system would require the support of precisely the sort of populist coalition that the technocrats disdain.

2) There is, or at least was, an idiosyncratic, American use of the word “neoliberal” that was common in the 1980s and had little or nothing to do with the more standard, international use of that word. It was a political construction parallel to “neoconservatism” and made relative to the (New Deal) conception of liberalism, in part in part in response to the perceived collapse of liberalism in the wake of the rise of Reaganism. This usage was more-or-less coined by Charles Peters at The Washington Monthly and later received a lot of airplay at The New Republic. For those interested in this issue, see my post on the “Strange, Transatlantic Career of ‘Neoliberalism”‘over on the U.S. Intellectual History Blog. (I did some follow up posts to it, too, but I don’t want to put this comment in moderation by linking to them. Just hit the “neoliberalism” tag under the linked post and they should come up.)

109

The Raven 07.18.11 at 8:54 pm

I want to draw people’s attention to the following sentence in

From an elite point of view, the primary problem with a jobs program—and with employment-boosting infrastructure projects—is that they would put a floor under employment, making workers more confident and less likely to do what the boss says, and less dependent on private employers for a paycheck.

I think this applies with even greater force to health care. Even though a universal health-care plan in the USA would save most businesses money and improve their international competitiveness, the opposition has been intense, and this may be because it makes people independent of employers for their very health; in some cases their lives.

110

Jim Harrison 07.18.11 at 8:55 pm

We’re not supposed to go in for remarks about personalities, but after all the scholastic discussions about universal classes, isn’t Yglesias finally just a young man on the make who has embraced with enthusiasm the moral and intellectual compromises needed to secure and keep a good job and substantial income? Or if you must generalize, isn’t a good bit of the appeal of neoliberalism to academics simply a function of needing to retain some claim to independent judgment while basically sucking up to the interests with the money?

I think the smarter conservative strategists understand how this all works more clearly than people on the left or even the center. They are taking their cue from how the Counterreformation succeeded. The church didn’t have to burn Lutherans at the stake, and it certainly wasn’t take meaningful steps to correct its ingrained corruption. It simply had to make sure that the good bureaucratic jobs were only available to the faithful.

111

elm 07.18.11 at 8:59 pm

K. Williams @99

capitalism is the only system that has proven capable of generating high living standards for the vast majority of a country’s population

When and where did that occur?

Also, what version of “capitalism” are you talking about? I assume you mean something like post-WWII (watered-down) Social Democracy with economic regulation and a government-run pension/anti-poverty program like Social Security.

112

medrawt 07.18.11 at 9:02 pm

LeeEsq:

I don’t think the various things you’re drawing together quite cohere the way you suggest. In particular, I happen to have the blog post you mention right here and I don’t think it says what you think it does; I think he’s making a rhetorical point that our political culture is very not-introspective about the value of the things we’re purchasing, and particularly pointing out how ridiculous it is that the cost of building such an HSR system is supposed to be somehow beyond the pale when we’ve spent and continue to spend more on something that, I imagine most of us would agree, is worth significantly less. I believe somewhere in the archives you can find him citing similar examples and saying something like “look, I know that if we weren’t spending money on [x] we wouldn’t immediately turn around and spend it on [y].” I could be mistaken on this point.

Actually, where I think he’s used this model before is not in terms of infrastructure but in terms of foreign aid. If we’d taken the money we’ve spent on these wars and put it towards ensuring drinkable water or eradicating malaria, etc., how much further along would we be towards achieving some of the supposed goals of fighting the war? i.e., although there’s an idealistic truth to what he’s saying, I take it to mostly be a rhetorical club.

113

elm 07.18.11 at 9:03 pm

The Raven @ 109:

I think that’s right. Universal health care would significantly empower low and middle income households and make them less dependent on any particular employer. That’s why I like it and, I have no doubt, why others dislike it.

114

Russell Arben Fox 07.18.11 at 9:10 pm

Chris (#106),

Matt Yglesias is complaining on twitter that his critics don’t really have any policy alternatives. I’ve tweeted back that Juliet Schor’s Plenitude represents one kind of alternative, and it does. Building a coalition to support that is hard, and maybe for Yglesias it is outside the “Overton Window” so doesn’t count as an alternative.

I looked at Schor’s Plenitude briefly as I was surveying several possible books to use for a class I’ll be teaching in the fall on “Simplicity and Sustainability”, and on first glance I wasn’t too impressed. Which disappointed me, because I’ve really liked and learned from a lot of Schor’s work in the past. Did I miss something about the book, do you think? Your comment suggest that her recommendations there were a good deal more comprehensive and serious than I initially took them to be.

115

K. Williams 07.18.11 at 9:10 pm

“When and where did that occur?

“Also, what version of “capitalism” are you talking about? I assume you mean something like post-WWII (watered-down) Social Democracy with economic regulation and a government-run pension/anti-poverty program like Social Security.”

Well, relative to the standards of humanity, it happened in the United States in the first two decades of the 20th century, although it obviously took the postwar era to see its most vibrant flourishing. Japan did it beginning in the 1970s. South Korea did it beginning in the early 1990s. And most of Europe had done it by the 1960s.

116

roac 07.18.11 at 9:12 pm

It simply had to make sure that the good bureaucratic jobs were only available to the faithful.

And offer free education to the children of the nobility.

117

Chris Bertram 07.18.11 at 9:16 pm

Russell #114 – well it may suffer a bit from trying to address a wide popular audience. I think it is making lots of the right noises though and serves as a counterexample to Yglesias’s TINA.

118

elm 07.18.11 at 9:25 pm

K. Williams @115

In all your instances, you’re describing regulated economies (in the U.S. 1900-1920 falls right within the Progressive Era and includes the creation of the FTC, FDA, Department of Commerce, and Department of Labor). That said, capitalism wasn’t doing much for women at the time.

119

dbk 07.18.11 at 9:26 pm

Coming to the discussion vv late:

Chris Bertram@59 re: a viable politics for the 21st century:
Given that capital is global, pushback needs to be global. Or rather, there needs to be pushback at the local level globally by the “wage” class against the “ruling” (financial) 1%. The folks protesting in Greece learned a great deal from Tahir Square and Madison, something little noted in the MSM. The problem seems to me to be persistent/residual nationalist loyalties – what does the unemployed university graduate in Cairo have to do with the teachers of Madison, and what do either have to do with impoverished pensioners in Athens? Quite a lot, actually, but how to overcome nationalist allegiances for global allegiances (as capital has so effortlessly done)? I don’t think the answer lies in neo-liberal / technocratic approaches.

John Quiggin @104. Hear, hear for hope.

I’m very impressed – Brad DeLong and Mathew Yglesias both responding to this post! Doubtless both are convinced they’re the Smartest People in Any Room They Enter , and they certainly make this humble commenter feel stupid (that’s the point, right?). But I had the good fortune to meet someone smarter (bloggers on CT excepted, of course), namely Greece’s new Minister of Finance, possibly the Smartest Person in Any Universe Imaginable. I would really, really like to see him debate DeLong …

120

Pithlord 07.18.11 at 9:44 pm

Yglesias is obviously opposed to populism since if there is one thing everyone knows it is that no one in American history ever built a populist movement around libealizing monetary policy.

121

John Quiggin 07.18.11 at 9:56 pm

@Ben I’ve always assumed that both DeLong and Yglesias mean “neoliberal” in this sense, and not the standard international sense.

122

roger 07.18.11 at 10:00 pm

I’m not sure what point you are making, mr. K.W. First, you tell me that using majoritarian power to raise taxes on the rich is somehow anti-capitalist and Americans don’t embrace anticapitalism. Then I point out that raising taxes on the rich is, in fact, very American. Then you say that it isn’t anticapitalist. This is a very confusing argument. Who denies that corporations were profitable in the 50s? In fact, this was one of Galbraith’s points at the time – corporations don’t necessarily operate to maximize profit if they can find stability.
I don’t know what anti-capitalism or anti-market means, in your sense. Americans often embrace anti-market things – for instance, social security is a nice, anti-market means to retirement, embraced with fervor by Americans. What is the favorite institution in this country, far above corporations? The post office. The Gallop polls have consistently shown this. I do think that Americans would not embrace the welfare system for the banks that were devised by the technocrats if they knew about them in full. So does the Federal Reserve, which is why they want to hide that stuff.
So, let some party embrace a simple platform – tax decreases for the majority, to be paid for by tax increases for the minority of the wealthy – and run with it a while, to the point that it gains some foothold in the media world, and I bet it would actually work very well. But the press and the political elite would, of course, oppose it.

123

bianca steele 07.18.11 at 10:18 pm

The only blog post I wrote that got more than a few comments on tried to support a definition of “neoliberal” that seems similar to the Ben Alpers mentions. His post at the US Intellectual History blog is the only time I have seem it defended. (I could have sworn the term was used in something like this sense in What’s Liberal About the Liberal Arts? but Google Books says no.)

I also see that the post was a response to a recent alumnus of Dartmouth, not of Harvard, though IIRC he was in or around the n+1 circle, and that he claimed the confusion between “neoliberal” and “liberal” was not his but Walter Benn Michaels’.

124

Brad DeLong 07.18.11 at 10:25 pm

Henry Farrell writes:

>[Brad DeLong wrote:]

>>Henry’s theory of politics is that successful and beneficial long-run politics can only be accomplished by a political party that is the political arm of a universal class—of a self-confident, organized group whose collective material interest is in fact the public interest.

>Brad – I’m not at all sure where you’re getting this from, but it’s about as far from my theory of politics as one can get. If you can point to somewhere where I make an argument that even hints at this, I would love to see it. My ideal of politics is one in which power asymmetries between different classes of actors are as minimal as possible, so as to forestall the development of systematic inequalities of outcome in the marketplace, in society, and in politics…

Oh. I got you wrong then.

I thought that you thought that rational public policy was possible only within the Democratic coalition. Thus I thought you wanted our interest groups–Big Labor and Big Celebrity–to absolutely and completely stomp their interest groups so that our side could exercise political hegemony and make the world a better place.

It turns out that what you want is for our Big Labor and Big Celebrity to neutralize and offset their Big Business and Big Fundamentalism, so that then the public interest can bubble up via grassroots democracy.

I really don’t think that is workable or desirable…

125

Tom Bach 07.18.11 at 10:31 pm

I can make neither heads nor tales out of J. Bradford Delong’s last post. As I understand the Farrell’s ideal political system it is one in which money and position are neutralized so that various interest groups and individuals can discuss more or less rationally which policies and end points they’d like to implement in order to achieve. Of course, I could be wrong.

What Delong hopes to achieve by being a horse’s ass, or in any event writing like one, escapes me entirely.

126

elm 07.18.11 at 10:39 pm

It turns out that what you want is for our Big Labor and Big Celebrity to neutralize and offset their Big Business and Big Fundamentalism, so that then the public interest can bubble up via grassroots democracy.

That’s an extraordinary interpretation. Obviously Henry can write on his own behalf, but his prior post nowhere hints at “public interest” while it explicitly mentions class interest of the “working and lower middle classes”.

It’s not obvious that any objective “public interest” exists, while it is obvious that individuals have specific interests and can organize around those interests and organizations can build coalitions on the basis of mutual support.

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shah8 07.18.11 at 11:07 pm

Okay, I’ve generally internalized that the amount of polarization that goes on when the topic is Yglesias as some kind of exotic light antisemitism, but this is such a stupid thread. And Henry is unfathomably generous to Doug Henwood, because the link is to a screed that essentially has no comprehension of why Yglesias or anyone else would want inflation targeting (I am not saying Yglesias is right, here), and then drifts off to (for all intents and purposes) gold-buggery, and frankly weird interpretation of the monetary motives behind populism, and just keeps going on…

The big thing that’s wrong with this thread is that there is almost zero interest in understanding how political systems work, despite all the people who think they’re hip to it all. There’s almost zero interest in past technocratic policies or the people involved in them. We have totally no idea who’s a left technocrat or not? Shouldn’t we be talking about Larry Summers and NAFTA? Or welfare reform, section 8 housing, drug decriminalization, LNCB, or any number of other technocratic projects, left or right?

Instead it’s all about how Matt’s a weenie.

*sigh*

Matt’s just is not as dumb as some of y’all think he is. He’s wrong, a lot, and you do yourselves the favor of just arguing *that* instead of yelling at Matt. He’s not your demagogue, okay? Moreover, he’s usually arguing from a sequence of ideas and positions, i.e., he almost always makes fairly internally consistent arguments, and you have to work just a wee bit harder to noodle them (when it’s not education, of course).

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Steve LaBonne 07.18.11 at 11:14 pm

What Delong hopes to achieve by being a horse’s ass, or in any event writing like one, escapes me entirely.

It’s the latest volley in his heroic one-man war against creeping social1sm. And he has to go on at length because on CT he doesn’t get to just delete comments he doesn’t like.

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K. Williams 07.18.11 at 11:48 pm

“In all your instances, you’re describing regulated economies (in the U.S. 1900-1920 falls right within the Progressive Era and includes the creation of the FTC, FDA, Department of Commerce, and Department of Labor).”

Yes, I’m describing regulated economies — in the case of the 1900-1920 US economy, regulated by regulations proposed by the Progessives, who were the neoliberals of their day. I’m unaware of any neoliberals of note who oppose the FTC, the FDA, or the SEC. On the contrary, sensible regulation (as opposed to absurd regulation, like airline and trucking regulation pre-1978) is clearly an essential part of any healthy market economy. The difference between the Chris-Bertram left and the Yglesias/Delong neoliberals is not a difference over the proper scope of regulation, or marginal tax rates. It’s a difference between people whose fundamental orientation is anticapitalist, and who view business primarily as a force to be opposed, and those who see markets and private enterprise as central, if flawed, elements in any healthy economy and polity. In that debate, American voters have always sided with the second group, which is why the Marxist/Marxisant left represented by Robin and Henwood has always had little or no influence on American politics.

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K. Williams 07.18.11 at 11:56 pm

“I’m not sure what point you are making, mr. K.W. First, you tell me that using majoritarian power to raise taxes on the rich is somehow anti-capitalist and Americans don’t embrace anticapitalism.”

Mysterious. Where, exactly, did I say that raising taxes on the rich is “somehow anti-capitalist”? On the contrary, I quite explicitly said that the high marginal rates on the rich of the 1950s were not an expression of anticapitalist sentiment. The thread is right in front of you. How can you misread this badly, or this deliberately?

131

christian_h 07.19.11 at 1:20 am

Okay, I’ve generally internalized that the amount of polarization that goes on when the topic is Yglesias as some kind of exotic light antisemitism

WTF?

132

MPAVictoria 07.19.11 at 1:27 am

“Big Celebrity”
Who the hell is big celebrity?

133

andthenyoufall 07.19.11 at 1:29 am

(Comment 1 of 2) People are making BDelong’s comments out to be a little more mysterious than they are.

MYglesias recommends certain (extremely sensible) policies. In fact, he does so frequently. Just as frequently, leftier-than-thou bloggerasters take him to task for it. Their policy critiques, however, are confused, garble details, and can be difficult to take seriously on the merits, even if there is something appealing about their indignation. HFarrell sees the angel in the marble: beneath the bloggerasters’ apparent critique of the substance of MY’s policy preferences lies an attack on his strategy. Specifically, liberal policies alienate and weaken the collective actors and organized interest groups who would make the left wing strong; the bloggerasters’ counter-proposals are intended to unify and strengthen collective actors and organized interest groups around an energized left.

Now, HF doesn’t come out and say this next part, but obviously the bloggerasters’ prescription, even after HF’s charitable exegesis, makes no sense at all unless you assume that a Democratic Party controlled by unified and strengthened organized interest groups would actually advance the public good. And it would be naive to assume that this would happen, unless the interests of these interest groups were themselves quite close to the public good.

This is where BD comes on the scene (today wearing his “massive erudition” hat rather than his loathsome “red-baiting” hat). We’ve heard this song before, BD reminds us, and we didn’t like how it turned out. Adam Smith sang it first, and in retrospect it looks like a sad little apologetic for the petty fascism of the squirearchy. Marx sang it next, and that hasn’t played out well, either. The theory behind the “universal class” approach to politics has always been impeccable. The problem is that it has never worked in practice.

HF response to BD was that he didn’t want just one class (farmers-workers ftw!), but I think that pluralistic interpretation of what a “universal class” is was explicit in BD’s original comment. To reply that both sides have organized interest groups at their disposal doesn’t seem germane to me. So I’m not sure why HF is acting baffled.

I found BD’s intellectual contextualization of HF’s exegesis extremely enlightening. For better or for worse, I think I understand what the bloggerasters are after much better now.

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Cranky Observer 07.19.11 at 1:39 am

> “Big Celebrity”
> Who the hell is big celebrity?

I believe that is a reference to the Democrats supposedly being the “party of Hollywood” and the decadent creative classes (both Los Angeles and NYC) in general.

Cranky

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MPAVictoria 07.19.11 at 1:43 am

“I believe that is a reference to the Democrats supposedly being the “party of Hollywood” and the decadent creative classes (both Los Angeles and NYC) in general.”

Thanks Cranky.
What does Brad have against them? Did Al Pachino steal his lunch money as a kid or something?

136

andthenyoufall 07.19.11 at 2:01 am

(comment 2 of 2) I separated this comment from the previous one because the first one is meta and not germane to these points.

First: It’s really difficult to take a self-anointed champion of the left seriously when he’s in thrall to 19th century illusions about how money works. We should be printing money until inflation kicks in, full stop. It’s hard to believe that the commenters who don’t understand macroeconomics have clever, subtle views about the intersection of class interests, collective action, and political sustainability.

Second: There’s nothing left-wing or politically savvy about conceptualizing public services as jobs programs. Thinking that the state can (and should) deliver huge benefits to the public by running various programs is the authentic left-wing position. If I think the state can and should deliver more benefits to the public than you do, my position is further to the left. (This is in response to all those who think public transit should be run more for the sake of the bus drivers, schools more for the sake of the teachers, than they currently are.)

Third: There is apparently something “unsustainable” about “neo-liberalism”. I believe that what people mean by this is “I wish the Democratic party were further to the left, and also the Democratic party isn’t as successful as I want it to be.” (Right? Is there any evidence that “neo-liberalism,” whatever the heck that is, is unsustainable, beyond political reversals for the left during the alleged reign of neo-liberalism?) I wish that the Dems were further to the left too, but I’m under no illusions. There’s nothing meaningful lurking beneath the fact that sometimes they win elections, and sometimes they lose them. So far no one has said anything here that puts the sustainability of political coalitions on a stronger footing that the dormitivity of opium.

137

Castorp 07.19.11 at 2:06 am

Shah: “Okay, I’ve generally internalized that the amount of polarization that goes on when the topic is Yglesias as some kind of exotic light antisemitism”

That is really ridiculous. I think insofar as that is true that there is polarization–and I don’t think it was manifested here–it is due to Matt’s snarky dismissal of views he disagrees with. That tends to irritate those who disagree with him. His new FB comment system has largely fixed that problem though.

Sigh: “Matt’s just is not as dumb as some of y’all think he is.”

Who thinks he’s dumb? I actually think that given Matt’s committments, his focus on monetary policy is a really good and somewhat original idea. I would certainly sign on to it for now, given that nothing better seems possible in the short-term. That still begs the question of whether his or other left neoliberals’ theory of politics is correct. I happen to think that there is failure to recognize that power must be grappled with in politics.

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shah8 07.19.11 at 2:27 am

Didn’t say it without reason. A permanent sense of controversy about the person? A prenumbra of shadowy suspicion about his so-called liberal cred? The fact that threads that involve Yglesias in some way tends towards a focus on the person and not the argument? Arguments that start from something that the person didn’t say or do? Dude (ettes)s, this sort of thread is really common in threads about minority athletes where there’s alot of white people commenting. That’s usually people working out their self-esteem issue in cloaked fashion. There are versions of this for successful women, too.

This is idiotic and unbecoming.

no seriously, idiotic and unbecoming, alright?

There is *nothing* there in Doug Henwood’s post. It’s a rant that wouldn’t be out of place at Rense.com. There’s nothing actually *real* to engage with! And you know what? Half the time, if not more, the thread is about a misinterpretation of what Yglesias said. And I’m fed up with it, so leave it, Castorp, and I don’t mind the “he’s the real response.

139

DougJ 07.19.11 at 2:36 am

unhelpful personal attack, and hence deleted.

140

Henry 07.19.11 at 2:42 am

shah8 – if you have any actual evidence that people who dislike Yglesias here, dislike him because he’s Jewish, then show it. If you don’t then I’d suggest you shut it. I’m neither particularly tolerant of actual anti-Semitism, nor of meritless accusations that others are anti-Semitic – both tend to disrupt discussion, and say more about the prejudices of the person misbehaving than anything else.

141

Henry 07.19.11 at 2:46 am

Also – since this thread seems to be degenerating, any further cp,,emts which are either (a) personal attacks on Matt Yglesias, or (b) personal attacks on people who are unhappy with Matt Yglesias, and which (c ) have no significant argumentative merit in my doubtless subjective opinion, are likely to be deleted.

142

DougJ 07.19.11 at 2:47 am

Nice comment policy here.

143

Henry 07.19.11 at 2:48 am

Yes. And that’s the point, thanks.

144

DougJ 07.19.11 at 2:48 am

People are allowed to have idiotic rants back and forth about anti-Semitism, but it’s unhelpful for me to point out that Yglesias (whom I like as a blogger) is compromised by his allegiances to fellow young pundits.

145

Henry 07.19.11 at 3:00 am

DougJ – as I hope was made clear above in #140, idiotic rants on anti-Semitism will actually not be tolerated. People who keep on engaging in rants of this variety tend to get permanent bans. And your own comment, while certainly not bannable, was rather more sweeping and ungenerous in the actuality than in the summarization that you present above. As noted well above in #65, I _really_ don’t want this thread to degenerate into a “Matthew Yglesias: Love Him or Hate Him?” polemic back and forth, which doubtless would be satisfying to some of its participants, but would not provide much in the way of useful conversation or argument. So if you have specific criticisms of specific claims that he makes, go ahead – but drive-by’s like the deleted comment aren’t going to cut it.

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Lee A. Arnold 07.19.11 at 3:01 am

Cranky Observer #37: “Replying to Lee A. Arnold’s #32 would derail the thread on the definition of neoliberalism, so I won’t. But to me it is one of the most naive pieces of political analysis I have seen on a blog of the nature of CT in many years.”

If you think that destroying the Republican Party is not a great way to start an era of “collective action”, then you will never have anything like a valid theory of politics.

You don’t need a large, active interest group. Actually that would be a waste of effort, since you already have a pre-existing process of decision-making in Washington and other capitals. There are plenty of voters already worried about jobs, healthcare, retirement, the future. Their opinions already poll in the required way, and that fact is all you should need.

Derail the definition of neoliberalism? Horrors!

The question is how to secure gains in healthcare, retirement, education, the future. Because I love Doug Henwood. And he is absolutely correct in the top quote above. “New Dealish stuff” would “make workers more confident”, in other words it would change workers’ expectations, in other words it would give workers new PREFERENCES (a bit of gibberish from the economics argot, sorry to be so naive or perhaps it is “go naiveal on your ass”.) Even so far as to changing how they price other things in markets and so on. Something the power structure is frightened of, because it is set to cause a regular implosion from within.

It may never happen however, because it now is clear that liberals and progressives don’t have any sense for tactical battle. So they fail on the whole praxis axis of a theory of politics.

147

hartal 07.19.11 at 3:05 am

Dear Shri shah8,

I am not accusing Mr. Yglesias of being a rootless cosmopolitan bent on the destruction of Der Vaterland. I am saying that his inflation target is a thinly disguised mechanism for a retrograde nationalism.

Look for example at how Joe Gagnon defends the inflation target. He himself notes that QE2 did not do much to get the banks to lend money out, so he defends it in terms of alternative routes: ‘The basic channel is the bond market. The Fed is buying up long-term bonds and that pushes interest rates down on those bonds. That’s what makes it attractive for people to borrow. The market then does some arbitrage. The equity market looks at the bond market and says “oh, well, long-term bond rates are low, so we are going to discount future dividends and profits differently.” This makes the value of stocks more attractive and raises their values. And this encourages businesses to invest. Also, international investors look at rates of return in other countries, and they say “these other countries have higher rates of return than in the U.S.,” so that pushes the dollar down. These aren’t direct channels of monetary policy, but they are linked.’

Yes QE eased worries about deflation, but it is being defended here primarily in terms of its effect on the dollar.

An inflation target pursued through QE is really a form of competitive devaluation, a nationalist attempt to export one’s way out of crisis.

I am only making the point that Joe Stiglitz already has. Is Stiglitz a thinly disguised (self-hating) anti-Semite?

See http://www.guardian.co.uk/commentisfree/cifamerica/2010/nov/01/currency-war-no-winners

Also, towards the end of increasing net exports the inflation target may increase the demand for labor here via real wage reductions effected through price inflation.

This is an intervention aimed at winning the world market, increasing net exports on the backs of labor. It is precisely a politics of reactionary mercantilism masquerading under the benign name of an inflation target.

Technocratic monetary Keynesianism points not to a better but a more gloomy future.

The fact of the matter is that neither Robin nor Henwood understands what is fundamentally wrong with the inflation target. Stiglitz does.

The Keynesianism that we have will end in tragedy; neo-classical economics is a farce.

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DougJ 07.19.11 at 3:06 am

“And your own comment, while certainly not bannable, was rather more sweeping and ungenerous in the actuality than in the summarization that you present above.”

My point is this: a lot of people chalk Matt’s occasional glibertarian tendencies to the fact he considers himself a neoliberal. I think this is wrong. Jon Chait and Brad DeLong are neoliberals too (and probably farther to the right on the social democrat/neoliberal spectrum than Matt is), but they don’t write endless posts about the evils of barber licenses.

Why don’t they? I would posit that they don’t because they don’t hang around with the McSudermans. I think that’s quite a valid point, given the context here.

149

geo 07.19.11 at 3:32 am

@136: This is in response to all those who think public transit should be run more for the sake of the bus drivers, schools more for the sake of the teachers, than they currently are

This presumably generalizes to something like: “How self-evidently foolish to think that enterprises/workplaces should be run for the sake of those who work in them.” A careless slur, eliding the fundamental and difficult question, “Shouldn’t those who do most of the work of an enterprise have a say in running it, along with others who have a large stake, including those for whose sake the work is done (ie, the consumers) and also (though not exclusively, as at present) those who have invested money in it, along with their representatives, the management?” If you think you can dispose of the whole question of economic democracy by jeering at misbehaving unions … well, it actually does seem to be a pretty effective tactic nowadays, but you can’t retain your intellectual self-respect at the same time.

150

shah8 07.19.11 at 4:27 am

*hartal*, I don’t think you actually understand what’s going on, because Stiglitz advocates the same position that Yglesias, Krugman, Romer, Bernanke, pretty much what *every* honest economist would take. He just sez so near the bottom of the advocacy column that you linked to. This is bog standard macro 101 stuff. I made an argument on Yglesia’s site talking about people not having the necessary economic rights to take advantage of inflation targeting. Doctor Science at Obsidian Wings made an argument (against Krugman’s same advocacy) in that the resulting inflation would be lethal before any benefit would accrue, personally. These are sane arguments against what is a very conventional wisdom type policy. If you’re in a situation where you have low interest rates, low utility of resources, and low demand (lower than long term trend–which indicates what is the natural rate of growth), you pump money into the economy until these factors aren’t true.

Assuming that the economics are right…good things will happen. In practice, in the American economy, the issue is that Americans have declining wages, pay more in vital expenses like gas or health, and everyone who can rent-seek, does so with a vengeance. Inflation targeting more or less means that you pump money into the economy until a wage spiral happens. That also means that you’re effectively making a very political decision on who is a winner, because you’re destroying the favored people’s control of labor, consumer activity, investment options, the like. You’re creating the situation where people are *forced* to demand higher wages. Where people find their way to cash and move to a place with better jobs. Where people can creatively find business opportunities in a more money-rich environment. You’re creating the situation where bond-holders can’t keep money in stagnant holes, where corporations have to use those great mounds of cash for some kind of opportunity, where people can hire construction to build new apartment homes in booming N Dakota, make money and bring more people to jobs.

Again, this is functionally a political decision, and however much a technocrat Japanese bankers or Bernanke is, they fundamentally can’t make that sort of decision by themselves without their heads being put on pikes. Theoretically, they do have the power to do that, and the temptation to urge them to go around the political process and just go ahead and do it already is pretty big, given the deadlock in Congress.

Look, we’re basically headed towards some kind of coup. At this point, democracy is a side-show, and will remain so until Congress is lead to a room, with a person either in a sharp banker’s suit, or a crisp military uniform, and is read the riot act. That simple.

151

andthenyoufall 07.19.11 at 4:27 am

@149 – I neither jeered at unions, nor claimed that they were misbehaving. It’s a point about political orientation. If you think that the biggest impact we can make by spending an extra dollar on buses or schools is to improve the welfare of bus drivers and teachers, you’re already a libertarian, you just don’t know it yet. If, like me, you think that the biggest impact we can make with that extra dollar is to bring mobility and knowledge to the downtrodden, you’ll be singing Soyuz nerushmy with the best of them when the revolution comes.

As for your Fundamental Question, the only general answer can be “It depends/it all depends/on what you have to build with.” I can look at a specific school district and, after long cerebration, tell you, out of the teachers, principals, superintendent, school board, and parents, what specific configuration of power would lead to the best result for everyone, but the exercise would be fruitless and you would still find something to complain about.

152

eastern619 07.19.11 at 4:31 am

This is probably too late, but I written something regarding the lack of pro labor progressive bloggers like myself.

In defense of 20-something progressive bloggers like myself

153

eastern619 07.19.11 at 4:35 am

154

hartal 07.19.11 at 4:37 am

Your standard econ class obviously do not go deeply into open economy questions, shah 8! I don’t see Yglesias even addressing Stiglitz’s point which you are just wishing away.

Please give me the quote from the Stiglitz piece that you are talking about. After all, I read in the first paragraph:

“Political gridlock and soaring debt have stymied an effective second stimulus, and monetary policy has not reignited investment. But weakening the dollar to boost exports is a risky strategy – it could result in exchange rate volatility and protectionism; worse, it invites a response from competitors. In this fragile global economic environment, a currency war will make everybody a loser.”

I also quoted Gagnon on the mechanism through which QE, presumably the means to achieve the higher inflation target, is meant to work, and he clearly said that it was through the devaluation of the dollar. It has not hitherto worked by increasing the flow of credit.

After we address the consequences of that, then we can get to your blindly optimistic version of what would happen in a wage inflation spiral.

155

shah8 07.19.11 at 4:54 am

/me squints…

Inflation targeting is not the same thing as currency manipulation. There are consequential weakening of the currency, but you’re not going to have a currency war if other countries can get US customers. The quote I note is this one:

The answer to this seeming stalemate is simple: resume global growth, and appreciation of the currency will naturally follow. Restoring growth requires that all governments that have the capacity to expand aggregate demand do so. The US has a special responsibility, both because of its culpability in creating the global crisis and because it can borrow at low interest rates, an advantage partly derived from its status as the de facto reserve currency. This is the time for the US to make the high productivity investments it needs. Spending on things such as high speed rail and green technology would actually improve America’s balance sheet. Higher growth would generate more tax revenue and lead to a lower long-run national debt. Such actions would not only help the US, but also have strong positive spillovers both in the short run (from the increased growth) and in the long run (from the technological improvements) for the rest of the world.

And yes, Stiglitz is talking about fiscal measures, rather than monetary measures, and he prefers fiscal measures. However, the primate need of increasing aggregate demand, and the overall consequences of weaker currency as a consequence holds. We aren’t talking about matching our currency (at a higher or lower rate) to some other country’s currency as what goes on in subsidizing export and fueling currency wars. We’re talking about making enough of our own currency for our own use. These are not the same things.

156

Fred Brack 07.19.11 at 4:55 am

Can’t argue with Henry’s ideal(ism): “My ideal of politics is one in which power asymmetries between different classes of actors are as minimal as possible . . .”

But, Henry, is it possible in the real world, as opposed to the ideal world, to sustain any power asymmetry that is “minimal”? Doesn’t “Give him an inch and he’ll take a mile” describe real-world politics, at least in large, diverse countries lacking a dominant homogenous culture (religion, race, ethnicity, etc.)? Aren’t vast political-power asymmetries in large, diverse countries usually corrected by uprisings of one sort or another that then temporarily create opposite asymmetries?

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hartal 07.19.11 at 5:01 am

No shah8 you clearly don’t understand what you are talking about. Yes the Stiglitz piece was saying what I said it said, not what you claimed. First point.

Second, you don’t think quantitative easing has effect on a currency? You don’t realize that it’s being explicitly defended for just that effect?

Now third there are good counter-arguments to what Stiglitz has written and what I believe to be true.

http://www.guardian.co.uk/commentisfree/2009/mar/17/g20-globalrecession

But that’s where the debate is–between Stiglitz and Eichengreen.

158

shah8 07.19.11 at 5:04 am

Ah, then let’s agree to disagree, hmm? And you can go find another sucker who won’t catch on to you hedgehog sensibilities.

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LFC 07.19.11 at 5:37 am

Haven’t read every single word of the thread, but following up on JQ @121: I believe Henry’s ‘left neoliberalism’ is (more or less) Ben Alpers’s ‘Washington Monthly neoliberalism’. They’re talking about the same thing. (I express no opinion on whether Yglesias belongs in this category or not. I never read him.)

I looked at The Washington Monthly occasionally in the 80s when Charles Peters was putting forward his neoliberal manifestos. IIRC and as the OP suggests, Peters and others were concerned that the Dem Party had become too closely aligned with a union agenda that caused Dems to oppose things like school vouchers and the sort of welfare reform that Clinton eventually got (this is probably all in Alpers’s posts at USIH). The neoliberal critique became, politically, mostly a moot point after c.’84 or so as the power of organized labor continued to decline and as Clinton/DLC basically took over the Dem party in the 90s. Substantively, however, the weaknesses the OP identifies re the understanding of collective action were always there, I think, in Washington Monthly neoliberalism. A number of journalists began at the Monthly and then went on to larger-circulation mainstream outlets and successful (often very successful) careers (if I’m not mistaken, James Fallows and Jonathan Alter, to mention just two), so the influence of Charles Peters, at least in some attenuated way, lives on.

160

Gordon Henderson 07.19.11 at 5:38 am

Okay, so I was wrong in #96 and right in #95.

Reagan did have anti-union policies.

See: http://www.dickmeister.com/id89.html

Given that, Matthew Yglesias, why isn’t it the case that the drop to below 25% can arguably be connected causally to Reagan’s anti-labor policies?

161

geo 07.19.11 at 5:38 am

andthenyoufall: Sorry, I must have misunderstood. Of course I agree with you that “the biggest impact we can make with that extra dollar is to bring mobility and knowledge to the downtrodden.” But I couldn’t imagine who you meant by “those who think public transit should be run more for the sake of the bus drivers [and] schools more for the sake of the teachers, than they currently are,” if not people who defend unions as a step toward economic democracy. How do libertarians come into it?

162

David 07.19.11 at 5:49 am

Cranky Observer: Thanks.

163

Lee A. Arnold 07.19.11 at 5:54 am

Henry #80: “Short version is that business lobbying power is extremely effective, except on those rare occasions when there is genuine public controversy for exogenous reasons, when we may expect to see action taken against business (but quietly undermined again after public attention has drifted away). This seems to me to be a rather good model of what happens – and one that fits well with the TARP story.”

Yes, that is exactly right, with one important addition to complete the model: The Congress is less instructed in ideology, or less conformed to ideology, than most people here seem to think. What we see is cynicism and collegiality, defaulting to ideology.

It’s everybody and anybody at all. The ruling elite is on the other side of a porous membrane — if you have enough money or you win an election, then you pass through the membrane, too. On the other side, if you have any ideals, you will find that acting upon them is not always rewarded by your constituency. So you get cynical, and you realize that the eternal horse-trading gives you more in common with your colleagues across the aisle than with your constituents.

There have been dozens of politicians who have expressed sentiments like this.

Now you may say “Oh well they’re just tools of capitalist ideology and Wall Street’s influence and they need lots of money to get elected and re-elected” but then you just said that you cannot explain the counterexamples except by a more general theory of interest-group pressures that is occasionally not based on a single ideology.

The reality is that Washington D.C. acts more like a mechanical game whose levers can be pushed by ANYONE on the outside who sees a vantage point. It isn’t just interest groups or money, it may be a big idea or a common expectation or a power-broker like Grover Norquist. I would argue that according the Constitution, U.S. politics is almost neutral but it defaults to the loudest heaviest whiners — e.g. Wall Street on most days, but occasionally outrage at TARP the next day.

So what do you want to achieve practically? The big fight to come is that government MUST GROW LARGER as a percentage of GDP to provide healthcare, with its cost increases, to a demographic bulge. It is a specific necessity and it is huge. It will also widen the passage to a more social democratic attitude.

So I think the necessary theory of politics is going to be both mechanical and contingent. Don’t bother putting together an interest group before you begin, if you already have one. You don’t always need labor unions to move forward. In the current situation, if bad actors like the Republicans have maneuvered themselves onto the horns of a dilemma, then don’t wait, make sure one or the other horn spears them through the belly. So what if it is about something stupid like the debt ceiling or taxes? It is going to be about something stupid because they are actually stupid. Make the public see it. If you wreck their name-brand, you make it much easier next time to elect people who are heading in the better direction. And the resulting protection of the provision of healthcare, retirement, better education CREATES constituencies that are future actors.

So I think I will stay naive instead of engage in fruitless blabber about definitions and theories, and about where bloggers should be placed on the left/right spectrum. That last one is just an embarrassing facsimile of a real discussion.

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andthenyoufall 07.19.11 at 6:24 am

geo: “People who defend unions as a step toward economic democracy” is extremely vague. Defend? How? (It’s not as though the unions are cowering in a dark alley, the thugs circling around…) Whose unions? What economic democracy?

Under some construals of “defending unions as a step toward economic democracy,” such a defender could also be extremely hostile towards using public services as welfare for public servants. Under others, the only people who qualify as defenders of unions are those who hate MY for defending teacher firings, attacking protectionist licensing requirements, and preferring hiring more bus drivers over handing out raises (to mention three recurring themes).

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Scott - a union guy 07.19.11 at 6:24 am

I would like to see Brad DeLong (#124), who I read regularly, actually advance the conversation. Henry likes Dahl’s pluralist ideal (but surely doesn’t believe it as an empirical model); Brad doesn’t think that model is right, but doesn’t say what model of politics is right or desirable. I’ve got to weigh in with a demand that Brad put up else stick to making unrealistic demands that major media outlets shut themselves down. (btw, I really do value BDeL posts, just not those ones …)

Now, I’ve got to go to work at 7 to try to do my part with the other people who go to work at 7 and try to figure out how to accumulate some of that countervailing power …

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Chris Bertram 07.19.11 at 6:37 am

K. Williams #129

“The difference between the Chris-Bertram left and the Yglesias/Delong neoliberals is not a difference over the proper scope of regulation, or marginal tax rates. It’s a difference between people whose fundamental orientation is anticapitalist, and who view business primarily as a force to be opposed, and those who see markets and private enterprise as central, if flawed, elements in any healthy economy and polity.”

It is always enlightening to be informed about what I believe, because otherwise, well, I just wouldn’t know. Obviously, I can’t know what counts as “central” for you, but I think both that any large and complex economy needs markets to function. I also don’t think of “business primarily as a force to be opposed” unless that translates as “corporate power”, in which case I do. Keeping some parts of human life beyond the reach of the market, yes, I believe in that. But that’s about scope, not “centrality”.

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K. Williams 07.19.11 at 7:33 am

“It is always enlightening to be informed about what I believe, because otherwise, well, I just wouldn’t know. “

Chris, anyone who puts up a post consisting of a video of Jerry Cohen offering up a tired and poorly theorized critique of modern capitalism — a critique called, cleverly enough, “Against Capitalism” — with the appended comment “great stuff” is someone whose fundamental orientation is anticapitalist. If you don’t recognize that, then, yes, you do need someone to inform you of what you believe.

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Chris Bertram 07.19.11 at 7:41 am

Well yes, I do think that’s a great video and makes (especially part 2) some terrific points in an accessible way to a popular audience. So how can I think that and also believe that we can’t dispense with markets in a complex economy? Obviously I’m a simple-minded idiot! Thanks for making that clear to me.

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Michael Drew 07.19.11 at 7:59 am

I guess what I am missing is where neo-liberals are claiming to have a rich theory of politics. Theirs I thought was more or less a prescription for governance in in the liberal states in the context of the global capitalist order that has emerged in the last four decades. It doesn’t claim to be the political theory best able to deliver long-term fundamental political benefits to the broad interests of society. It just claims to offer guidance to policy makers on how to, mostly, avoid major disasters resulting from faulty governance, or perhaps to achieve somewhat more desirable conditions on the whole, again, in this political-economic context in which we live. I do think that in measuring the desirability of the conditions it sees as desirable, it has tended to overweight the interests of the economic elite (with exceptions among its exponents). But this is more a function of its basically peaceful, accommodative relationship with the global capitalist order than with the lack of a strong theory of politics. A strong theory of politics would simply be an irrelevance to what neo-liberalism (leftism being another question) aspires to be, which is an enterprise in study with the more or less explicit goal of discovering ways to make the global capitalist order marginally more beneficial to the greater mass of people (whether in a country or globally), accepting certain policy viewpoints as fixed starting points (preference for freer trade, liberal labor policy, etc.) Critiquing it for lacking a strong theory of politics of the kind described here seems to me to be akin to noting a socialite’s breach of etiquette in failing to bring a jackhammer to an Upper East Side cocktail party.

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Henri Vieuxtemps 07.19.11 at 8:22 am

It just claims to offer guidance to policy makers on how to, mostly, avoid major disasters resulting from faulty governance, or perhaps to achieve somewhat more desirable conditions on the whole, again, in this political-economic context in which we live.

Well, if they aspire to ignore the structural problems, and discover better, more clever ways to arrange the deck chairs on the Titanic, they should be treated accordingly.

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sg 07.19.11 at 9:37 am

I predict we’ll see K Williams’s comment at 77 again in a few years’ time, along the lines of “if Rupert Murdoch was so powerful how come his whole empire fell apart over a mere phone-hacking affair?”

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Walt 07.19.11 at 12:00 pm

I think K. Williams pretty well reflects that the predicament that we’re in. He may be a millionaire slumming in the comment section, but I’m going to go out on a limb and assume that he’s a member of the middle class. His comments show how the ability of the middle class to think about politics has been destroyed. We live in the richest society the world has ever known? How did this miracle occur? We did it. The hard-working and skilled working and middle classes did it, through a system that we call “capitalism”. But capitalism gives rise to capitalists, and for 40 years the capitalists have been telling us that they did it. And from sheer repetition, the middle class now believes it. It’s a staggering loss of self-confidence in a class that was instrumental in creating wealth undreamt of in earlier ages.

Like Chris, I think a market economy is a necessary part of the world we live in. But also like Chris, I think we have no need to kow-tow to our supposed betters. There is only a conflict between “capital” and “labor” because capital is not satisfied with its fair share, but wants it all. And we’re not going to give it to them.

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Henry 07.19.11 at 12:33 pm

Brad DeLong@124 – since you understand the argument perfectly well when it’s J.K. Galbraith talking about ‘countervailing powers,’ I can only presume that you’ve entered into that peculiar mental state of willed obtuseness that you get into when you decide that someone is too left-wing to engage with their ideas. Hence, I don’t really see any possible value in further engagement with you on this.

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Sweden 07.19.11 at 12:45 pm

andthenyoufall & numerous others: “… unless you assume that a Democratic Party controlled by unified and strengthened organized interest groups would actually advance the public good. And it would be naive to assume that this would happen, unless the interests of these interest groups were themselves quite close to the public good.”

If you look to democratic welfare states elsewhere in the world that suffer from much less inequality compared to the US you’ll see a strong correlation between (degree of) equality and (degree of) union power, collective bargaining and majoritarian class compromises. How do you explain that?

In general, several defenders of neoliberalism here seems to engage in massive US exceptionalism on a methodological level. As if the world outside the US barely existed and there is nothing to be learned about political action from it.

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Cahal 07.19.11 at 12:55 pm

‘capitalism is the only system that has proven capable of generating high living standards for the vast majority of a country’s population’

Oh please. The living standards of the Western World sit on a moral hazard the size of the moon. Absolute poverty has actually increased in the developing world over the past few decades.

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The Raven 07.19.11 at 1:17 pm

Brad Delong, #124: “It turns out that what you want is for our Big Labor and Big Celebrity to neutralize and offset their Big Business and Big Fundamentalism, so that then the public interest can bubble up via grassroots democracy.”

OK, Prof Delong. So what’s your system? Who would you set in charge, if you had the choice? Or do you take the capitalist/aristocratic (and Randian position) that the cream will rise to the top?

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Brad DeLong 07.19.11 at 1:31 pm

Re: “Brad DeLong@124 – since you understand the argument perfectly well when it’s J.K. Galbraith talking about ‘countervailing powers,’ I can only presume that you’ve entered into that peculiar mental state of willed obtuseness that you get into when you decide that someone is too left-wing to engage with their ideas. Hence, I don’t really see any possible value in further engagement with you on this.”

Oh. I understand the “countervailing power” we-want-our-interest-groups-to-balance-theirs-so-good-public-policy-bubbles-up-from-below-via-democratic-processes argument. I think it is interesting–which is why I quoted JKG. I just don’t believe it. Collective action problems prohibit using elections to determine the public interest by adding up the votes of informed voters who understand their material and ideal interests and how they ought to translate those into economic policy.

That’s just not how it works.

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dsquared 07.19.11 at 1:48 pm

Left-neoliberalism in theory: “Let’s set up a new organisation to regulate consumer finance!”

Left-neoliberalism in practice: “Let’s write a load of blog posts about how awful the Republicans are for blocking appointments to our consumer finance organisation!”

Left-neoliberalism in theory: “Social spending has nothing to do with campaign groups – it’s determined by Obama and his budget team, so vote Democrat!”

Left-neoliberalism in practice: “Obama had to cut social spending – the Republicans wouldn’t let him pass the budget because of those damned Tea Partiers!”

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William Timberman 07.19.11 at 2:03 pm

If knowing what doesn’t work were the key to political wisdom, I suspect that we’d all be potential philosopher kings — which is nice work if you can get it, but if you lack a serviceable set of knee pads, it’s damned difficult to find a capitalist willing to pay you for it.

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Watson Ladd 07.19.11 at 2:05 pm

What a long thread! I’m just going to have to complicate the discussion of Reagan and the unions by noting that unions played a role in the political realignments of the 1960’s. By organizing blacks and funding the New Left, labor unions were behind the 1960’s New Left and the political disorientation it created. This was the last time the Marxist left was playing a major role in US politics. Would Reagan have been elected if the unions and the left was strong enough to oppose him?

The advent of capitalist social relations is concurrent with the Glorious Revolution, the French Revolution, the ending of slavery in Europe, etc. It also lead to the largest expansion of wealth in history. The price of cloth tumbled first, as automated weaving reduced the amount of time one needed to weave. How exactly does this rob anyone of anything? The World Bank shows that the proportion of people living in absolute poverty has decreased in every region since 1990, again not what the story of theft would predict.

The last strand I want to intersect is the story of the welfare state. In the US the welfare state was built on a politics of racial exclusion, and was unable to sustain itself. It did not crumble politically, but the politics followed a major fiscal crisis in the 1970’s caused by structural features of the welfare state. David Harvey disagrees, but I think he’s wrong because the welfare state still reproduced capitalist dynamics. The story of politics and economics is very tangled, and there we can’t attribute one as the driver of the other.

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AndrewW 07.19.11 at 2:20 pm

Ezra Klein, Matt Yglesias, and Brad DeLong have all at various times and in various places argued for the need for greater union viability. I take them at their word that they believe that. Nevertheless, they virtually always speak of unions elegiacally, as though they are vestigial instead of ever-present but latent. There’s a kind of hardening of opinion in that that smacks of the right-wing cant “Unions had their place, but now we need to move on…” I’m not claiming that the three men mentioned above are deliberately spouting right-wing orthodoxy, but I am suggesting that in perpetually looking for the new way, the novel way, they have a blind spot for the political efficacy of very old well-worn but necessary advocacies.

I think the discussion isn’t helped by the concept of “sustainability,” and should instead shift to efficacy. Nothing in politics is sustainable, but certain things work at certain times.

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Cranky Observer 07.19.11 at 2:27 pm

> By organizing blacks and funding the New Left, labor unions were behind
> the 1960’s New Left and the political disorientation it created.

Some labor unions supported the civil rights struggles in the 1960s, some stayed neutral, some opposed them. I’d need to see a lot of documentation on the claim of “funding the New Left”; I grew up in an old-line union family and “dirty hippies” were not exactly welcome in the neighborhood or the union hall.

> This was the last time the Marxist left was playing a major role in US
> politics. Would Reagan have been elected if the unions and the left
> was strong enough to oppose him?

Reagan was elected in large part because many conservative Democrats, including large numbers of union members, abandoned Jimmy Carter for both economic and social reasons and voted for the person who opened his campaign with a speech on “states rights” delivered in Philadelphia Mississippi. By 1980 several unions openly endorsed Reagan over their own man Mondale. Not all; the teachers and paraprofessional unions generally stayed with the Democrats. But the heavy labor unions were not very happy with the Democratic Party and its candidates in 1976-1984.

Cranky

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Henry 07.19.11 at 2:29 pm

bq. Collective action problems prohibit using elections to determine the public interest by adding up the votes of informed voters who understand their material and ideal interests and how they ought to translate those into economic policy.

But where do I say anything at all about “the public interest” (a numinous and, in my opinion, entirely imaginary notion)? Where do I say anything about “Big Celebrity”? It’s quite hard indeed to argue constructively with someone who keeps on introducing imaginary claims and suppositions that they for some reason assume you ‘must’ be making.

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Cranky Observer 07.19.11 at 2:38 pm

@180 – “by 1980″ should be “by 1984″.

Cranky

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AndrewW 07.19.11 at 2:50 pm

@36 I’d love to know where you find evidence for suburban school boards being in the pockets of the unions. The NEA (the union of most non-urban school districts) is kind of the powderpuff of teachers’ unions–they don’t exert much muscle and really don’t get into bread and butter/salary wrangling. The flashpoint is almost strictly the AFT in the cities.

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Marc 07.19.11 at 3:08 pm

The basic problem with folks such as Yglesias is that they are so steeped in a right-wing economic mindset that they don’t even ask the proper questions. If you read someone like Yglesias, for example, you’ll see many posts about licensing requirements, teacher’s unions, building regulations, and so on. It’s as if the biggest problem in the current era is that laissez-faire capitalism has too many cumbersome restraints, or that unions are too strong. People of his generation appear to have great difficulty in even grasping the idea that the Market God is not the answer to all problems, or that the most efficient economic solution is not always the most just, or the best, solution.

This is amplified by an arrogant refusal to accept evidence that contradicts his ideology. A lot of bloggers develop a mindset where they are qualified by their wisdom to pronounce verdicts on all sorts of things, whether they know much about them or not. This is marginally tolerable if they are open to correction by people who actually know something. But it’s infuriating when they simply dig in (MY is notorious for this) and refuse to even acknowledge substantive critiques of their work.

For example, Matt is enthusiastic about dismantling some of the core elements of our higher education system in the name of “efficiency”. He doesn’t have any experience in the field, or any knowledge of how it works, or about the structure. And yet the solution is clear: online classes would equal more widgets per hour; general education classes are a waste of time; and so on. He has a systematic bias to the idea that what we need is to drive down the wages and credentials of professionals (dentists, doctors, professors, teachers, barbers…) because they are “protected” by credentialing systems which he can’t be bothered to understand.

He’s written about how great it is to base K-12 teacher performance on “metrics”. People point out that the metrics are noisy (e.g. teachers can go from getting bonuses in one year to being fired the next, basically from sample noise), or that there are power imbalances. They point out that teachers, unlike young bloggers, may well prefer to sacrifice higher salaries for more job security, or that it might be destructive on many levels to set up systems that favor firing teachers when they get too expensive (e.g. the entire concept of tenure.) He ignores these things.

I could go on, but there is a pattern here: a fixation on broad ideological fixes, anchored in a conservative economic framework, and uninterested in engaging the actual objections of people who disagree with them. I really wish that Brad, and Matt, spent more time trying to fairly characterize the viewpoint of people who disagree with them and less time trying to make themselves look smart and their opponents foolish.

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Sebastian H 07.19.11 at 3:20 pm

“By organizing blacks and funding the New Left, labor unions were behind
the 1960’s New Left and the political disorientation it created.”

Labor unions as a whole could at very best be said to be black civil rights neutral in the 1960s. And that is only if you count the unions which formally embraced civil rights at the national level while allowing the local chapters of the union to exclude black people. The idea that labor unions were generally a major force in the black civil rights movement is historical revisionism.

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Carl Weetabix 07.19.11 at 3:22 pm

The problem with running all “standard of living” improvements through essentially a market solution is that those who benefit most, namely the owners and rentiers, regardless of their political persuasion, are likely to be ideologically co-opted (corrupted?) to prefer causes that benefit their class.

So even someone who initially starts out caring about the working class is going to be presented a series of choices where the right thing to do does not potentially benefit themselves (or at least in an obvious fashion). Examples being – paying higher wages, paying their fair share of taxes, providing better benefits, etc. Over time naturally their views are likely to slowly migrate to what most benefits themselves (viewpoints in turn they are likely to pass down to their children, along with their class status).

That is all assuming they even started from a position of caring about the working class.

I don’t know if unions are the answer – certainly they too have abused their power. However that’s not to say new paradigms can’t be created or old ones revived. At some point someone’s got to advocate for policies that help the working class (even if that working class is wearing white collared shirts). Perhaps just a large series of Twitter initiated general strikes? I don’t know.

Right now what I do know, is at every level, including all “mainstream” political parties and all major news outlets there’s endless propaganda that reiterates policies that are contrary to the best interest of the working class and the little guy. Moreover it has been so pervasive that even those who are most injured by these policies actually support them.

It has been a masterful job of systematic and intentional public realignment, one that given who owns the keys to the media, I’m not sure is correctable. However I don’t think doubling down on tired neo-liberal economic policies, at least without some huge advances in public awareness, is going to solve this.

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geo 07.19.11 at 4:28 pm

funding the New Left

Funds? As far as I can remember, the New Left had no funds. The New Right had unlimited funds. That’s (mainly) why they won and we lost. No, don’t even begin to suggest that it was because the Left had “tired old ideas” and the Right had “good new ideas.” It’s too fatuous …

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roac 07.19.11 at 5:17 pm

The advent of capitalist social relations is concurrent with the Glorious Revolution

Wait, what? You mean the palace coup whereby James II’s daughters kicked him off the throne? By taking advantage of (1) well-justified fears at all levels of English society that Dad intended to reverse the outcome of the Wars of Religion, and (2) the fact that the elder daughter was married to a guy with an army? That Glorious Revolution? Is there a school of history that believes that it caused or was caused by the growth of capitalism? Please tell me about that.

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Harold 07.19.11 at 9:28 pm

I recall reading that Yglesias’s uncle is an economist at MIT. Yglesias’s positions are simply mystical dogma — whether he got them from is uncle or came up with them on his own. They have nothing to do with the real world. The fact that he advocates destroying the lives of thousands of people for the sake of abstract principles is deeply repugnant.

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Random lurker 07.20.11 at 10:18 am

Wholly OT

@roac 190
To the degree that Protestantism can be linked to early or proto-capitalism, since the Glorious Revolution was a clash between Protestants and Catholics, the GR can be linked to (early or proto-) capitalism.

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Barry 07.20.11 at 2:30 pm

Another: ” He is anti-school union as a part of his ivy league disdain for real teachers and love “teach for america” types though.”

James Reffell: ” So, Teach for America folks aren’t “real teachers”? Wonder what they’re doing in those classrooms, then. Playing parcheesi?”

I imagine that what was meant by ‘real teachers’ was ‘people who are going to spend more than a couple of years at it; people who will make a career at it; people who aren’t passing through it on their way from an Ivy League university into their actual careers’.

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Harold 07.20.11 at 5:44 pm

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Harold 07.20.11 at 5:51 pm

http://www.businessweek.com/careers/content/sep2007/ca20070913_229347.htm

Teach for America has even forged partnerships in recent years with 100 graduate school programs and 15 employers, including Deloitte & Touche (No. 1 on this year’s list), Google (GOOG) (No. 5), and General Electric (GE) (No. 12). These companies let students defer their job offers to spend two years teaching. Corporate Partner JPMorgan (JPM) (No. 17) gives students their signing bonuses before their two-year stints at Teach for America and offers summer programs to keep them involved with the company while they are teaching.

Bob Corcoran, vice-president of Corporate Citizenship at General Electric, says that his company’s partnership with Teach for America is a win-win. “We [GE and TFA] look for the same types of people, people who want to make a difference, people who have good leadership qualities and who truly want to jump in and lead something. Teachers do that everyday,” Corcoran explains. “When these students come out of college and they defer to take on these roles, they learn how to lead. And Teach for America gets some great students who otherwise would have been nervous to jump out of their discipline and teach.”

Meanwhile, young workers view Teach for America as a valuable launching pad to an assortment of careers and paths. Former D.C. corps member Rachael Brown is amazed by the strong support network of alumni.

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Watson Ladd 07.20.11 at 5:53 pm

And the Port Huron statement was drafted at Port Huron, a UAW center for activists.

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roac 07.20.11 at 6:26 pm

@192: I have no idea what the current generation of historians think about the link between Protestantism and capitalism, so I’ll shut up about that. But by that token Luther and the 95 Theses would do just as well.

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Random Lurker 07.20.11 at 9:00 pm

@roac

Nor do I.
I was referring to the traditional link between “protestant ethic” and “capitalism”, usually attributed to Weber.

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Harold 07.21.11 at 3:08 pm

Being a neoliberal involves signaling a willingness to go along and get along by playing the game — ignoring empirical evidence and showing a willingness to engage in outright lying on certain key issues. It’s a sine qua non of politics.

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Barry 07.22.11 at 2:11 pm

Carl Weetabix 07.19.11 at 3:22 pm
” I don’t know if unions are the answer – certainly they too have abused their power. However that’s not to say new paradigms can’t be created or old ones revived. At some point someone’s got to advocate for policies that help the working class (even if that working class is wearing white collared shirts). Perhaps just a large series of Twitter initiated general strikes? I don’t know.”

This is actually part of the problem – people advocating for unions have to add lots of disclaimers as to their imperfections, while neoliberals (and neocons, and neoclassicals) don’t feel any such need.

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Lee A. Arnold 07.23.11 at 11:10 pm

Brad DeLong #177: “Collective action problems prohibit using elections to determine the public interest by adding up the votes of informed voters who understand their material and ideal interests and how they ought to translate those into economic policy.”
“That’s just not how it works.”

Don’t you mean “That’s not how public choice theory works”? Because in reality, after voting, people accept the resulting compromises, if they are fair.

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Jim Harrison 07.24.11 at 12:22 am

Neoliberals are simply wanta-be Josephs. Without pharaoh they are nothing and know they are nothing. Hence the preemptive surrender to real political power. (The classically educated may feel free to substitute Plato for Joseph and the tyrant of Syracuse for the pharaoh.)

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