Bill Clinton's Neoliberal Record: A Cheat Sheet

Remarkably, the matter of whether the Democratic Party has become a neoliberal party has recently become controversial, with this going, for example, for Bill Clinton's term in office (1993-2001).

For as long as I can recall, the clear answer would seem to have been yes. Elected as part of a backlash against neoliberalism, with a more progressive tax code, a Keynesian infrastructure-building plan, and universal health care including a public option all central to his campaign platform, Clinton implemented none of these objects, spending his eight years in office vigorously implementing neoliberal policies, setting "structural adjustment (a smaller state, a balanced budget, a paydown of the debt, all as the rich pay less rather than more), laissez-faire (privatization, deregulation, a reduction of the social safety net), and free trade (NAFTA, GATT, etc.) above all other goals. (Indeed, many of us remember how the administration told its supporters they wouldn't be getting health care reform and explained that they spent all their political capital fighting for NAFTA--getting the acquiescence of Democrats in a right-wing policy rather than getting the acquiescence of Republicans in a progressive policy.)

Still, I decided to check the Clinton record systematically, taking as a starting point the "Timeline of Major Actions" on the Clinton White House's own web site (hardly an unfavorable source to that administration).

At the end of that check my answer to the question "Was Bill Clinton a Neoliberal" was an even more emphatic "Yes" than before.

If you want the long version, with all the details, and footnotes for all the details, you can click here.

If you want the short version, just keep reading.

During the Clinton administration deficit reduction and free trade were indeed the twin priorities of economic policy. Where deficit reduction was concerned, one should remember that his tendency was to minimize tax increases, particularly on the affluent. The 1993 tax act raised the uppermost income bracket to 39.6 percent, but this was still markedly below what it was in the first six years of Reagan's administration (50 percent), while the 1997 Taxpayers' Relief Act lowered capital gains taxes to the 20 percent mark that even in Reagan's day was thought overambitious--all as taxes on fuel and Social Security benefits went up. Unsurprisingly, a check of the statistics from the conservative Tax Foundation shows that, relative to their share of Adjusted Gross Income, the rich were carrying less of the tax burden in 2000 than in 1992, never mind 1980.

Instead Clinton emphasized cuts in spending. This was ultimately to include Medicare cuts (passed on the very same day as the capital gains tax cut), but the cornerstone was the ultimately Reaganesque Reinventing Government (whose accomplishments Clinton trumpted with the declaration that "The era of big government is over"). Ultimately reducing the Federal government by a fifth, to its pre-New Deal size relative to the size of the country, it accomplished this by having government simply govern less. The nature of regulatory agencies like the Environmental Protection Agency and the U.S. Department of Agriculture became much more "hands-off," with inspectors treading lightly, while the budget-cutting, "hands-off" approach similarly applied to social spending. Rather than repairing the damage done to domestic Federal programs by Reagan's reign, departments like Housing and Urban Development also took cuts, while grant money was dispensed to states, communities and even private actors to which it delegated its mission--with the approach carried even further in regard to new initiatives. It kicked the infrastructure plan to the curb, entrusting jobs creation to its enterprise zone scheme instead. And what could not be delegated was outsourced--with the Defense Department an early, massive, and ultimately notorious example.

All of this fit in with a broad tendency toward deregulation generally, which went beyond significant deregulation of electricity, telecommunications and finance (most notoriously the winking at violations of the Glass-Steagall Act like the Citibank-Travelers' Group merger, on the way to the Act's complete repeal), to handicapping Federal regulation as such with the 1999 Regulatory Improvement Act--which sought to keep regulators off the backs of business by tying up the regulators themselves in red tape (ironic, in light of the Reinventing Government spirit); while those free trade agreements tied regulators' hands yet again. (That food not up to local safety standards? Tough, it's getting imported anyway.)

The trend also fit in with the privatization of much government functioning, with telecommunications an especially dramatic example, with the privatization of the National Science Foundation's Network (the "backbone of the Internet), and much of the electromagnetic spectrum (the Clinton deficit hawkishness that saw it cut enforcement of worker, consumer, environmental safety, and Medicare spending, not keeping it from giving Big Media the broadcast licenses it could have auctioned off for $70 billion in a colossal act of corporate welfare). It fit in, too, with the cutting of the safety net, the most striking example of which was the 1996 welfare reform, which eliminated welfare's status as an entitlement, capped off benefits (five years' lifetime use, maximum) and turned welfare into "workfare"--all while allowing states to outsource the determination of welfare eligibility, and relied on a private business alliance, the Welfare-to-Work Partnership, to get recipients off the rolls and into the work force, where they constituted an underclass, deprived of the same rights enjoyed by other workers.

Much of this is, alas, not spelled out in the aforementioned Timeline, which instead emphasizes an impressive-seeming number of acts taken by the administration on behalf of the public, particularly in regard to education, health care and worker protection. Still, it must be noted that all of this occurred within that framework of budgetary austerity, government downsizing, deregulation which limited the resources put to realizing any of these goals. Where education is concerned, it is worth remembering the extreme distance between the Goals 2000 (a 90 percent-plus rate of high school graduation, American students first in the world in math and science) and the results. Where the administration made more progress was in, again, that neoliberal object of privatization, as it promoted and enlarged funding for charter schools, and set to work privatizing "Sallie Mae." Where health care is concerned, the sum total of its acts fell far short of the effort toward a genuine health care reform promised in the campaign (emphatic about how Clinton would get "tough" with the industry), let alone the result. Even with the help of boom times, they did not put a dent in the system's costs (evem in terms of its share of national income), nor reduce the number of uninsured.

Where the situation of workers is concerned, the results were similarly meager, reflecting the modest goals and limited push for them, which made their neutralization easy--an increase in the minimum wage that only partly restored its earlier purchasing power (actually a sixth under what it was in 1981 after two rises) before being eroded by inflation; a ban on Permanent Striker Replacement blocked in court; new ergonomics standards for the Occupational Safety and Health Administration Congress repealed almost as soon as Clinton left office; and a number of decisions of the National Labor Relations Board containing some progressive content that were promptly overturned under the next administration. Even the administration's most enduring success, the Family and Medical Leave Act, still afforded only brief, unpaid leave to a limited portion of the work force (in contrast with the norm in the rest of the developed world).

"But what about the environment?" one might wonder. After all, wasn't Mr. Al "Inconvenient Truth" Gore Vice President? The Clinton administration did sign the Kyoto protocol--but let it go unratified. In any event, the administration, never terribly interested in energy or climate, acquiesced in the fossil fuels-based policy driven by Big Oil's needs as his predecessors had done before him. Indeed, more remarkable where energy policy is concerned is the rush to privatize Federal utilities, both civilian and Defense Department, and such assets as the country's civilian uranium enrichment program and Naval Petroleum Reserve (most of which, interestingly, went to that Gore family sponsor through the generations, Occidental Petroleum).

One can argue about whether these policies were desirable, or simply the best a Democrat could have done at the time. But they cannot argue that they were not neoliberal.

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Review: Absentee Ownership, by Thorstein Veblen

Thorstein Veblen's 1923 book Absentee Ownership continues his earlier analysis of how classical liberalism's premises (property and contract rights) and economic and political prescriptions (laissez-faire) were becoming irrelevant to an age of high technology, high finance and Big Business.

In brief: the developing industrial system was increasingly sophisticated and productive, yet fragile as well, with the latter point all the more problematic because of the way in which power over that system was distributed. The corporatization of economic life, and in turn, financial control of industrial corporations, such that shareholders' "absentee ownership" had become "the main and immediate controlling interest in the life of civilized man"--with interests different from, and in conflict with, all the rest of society. Where society as a whole needed life's essentials to be as abundant and cheap as possible, business subordinated production to profit, or more precisely, the largest possible "net gain in dollars," charging what the "traffic will bear," and to that end holding down supply, as they are permitted to do--Veblen calling the rights of property a "vested right of use and abuse over the current industrial knowledge and practice," a "legal right of sabotage." Still other industrial practices threw additional sand in the gears of the machinery. ("Competitive selling"--advertising--is an increasingly costly zero-sum game in his analysis.) And on top of all this, the conflicts between management and labor (where trade unions, too, get in on the game of sabotage for the sake of what the "traffic will bear" as they strike for higher wages) worked in a like manner. As all this generated more frequent disruptions that spread more quickly and widely, law and politics actually worked ever more in favor of business control; while at the same time the development and proliferation of the "machine process" makes the very foundations of that control (that sacredness of property and contract) seem less legitimate (as the unions, for all their limitations and flaws from this perspective, demonstrate).

Given my having just reviewed his earlier exposition of most the fundamentals of this argument (in his 1904 Theory of Business Enterprise) it seems appropriate to concentrate on those things this later book brings to Veblen's line of research.

First, there is a good deal of synthesis of earlier work here--as in his integration of his thinking in earlier works like The Vested Interests and the Common Man on the subject of the nation-state. An institution similarly devoted to a "pursuit of unearned income" by way of sabotage, it is increasingly on behalf of the same businesses engaging in such sabotage in private economic life, for it is they who control it and benefit from it in a "democratic" age.1

Second, those ideas he treated previously are presented here with a greater clarity and force, evident not just in the concision of his summation of the essentials in the brief introductory chapter, but in his being at the "top of his game" with regard to his prose, and particularly his penchant for linguistic "defamiliarization" effects of a kind we expect in experimental literature rather than social science texts--scandalizing adherents of the "conventional wisdom" just by calling familiar things what they really are (as the quotations given above serve to show).

Third and finally, in addition to presenting a fuller and better worked out outline of the new "order of things," he affords the reader a number of close looks at key parts of the system, ranging from the rise and decline of the inventor-entrepreneur "captain of industry" (since supplanted by the "captain of business"--the financial magnate, the "corporate financier"), to the ascent of technology based on basic chemistry and physics to the forefront, to the evolution of ever larger and more elaborate financial structures (as holding companies and "interlocking directorates" have become routinized, and the "investment banker" has waxed in prominence, while the sector as a whole has increasingly consolidated).

As might be expected, Veblen was especially interested in these as they operated in the United States, and devoted most of the second half of the book to close examination of elements within the American version of the situation. Notable among these are the American ideals of the self-made man, the independent farmer, the country town; and by way of these, the outlooks of American business and American politics more generally, from the obsession with rising real estate values, to the lack of public-spiritedness in regard to "public service" (the population in America accepting that "public office is a private job" to a degree other nationalities would not credit). These, in turn, are all explicable in relation to the cultural assumptions of the new country. (What others call the American Dream, Veblen declares in one of his most memorable turns of phrase, the expectation of "something for nothing," an expectation rooted in the experience of the frontier. In theory it was a "democratically equal opportunity of seizure" of all natural resources for the sake of a private gain identified with the public weal, leading to a rush to grab for oneself as much as one could as quickly as one could while leaving as little as possible to others--a process he deemed not just predatory but economically inefficient and ecologically disastrous in its "rapid exhaustion, with waste, of the natural supply." He who succeeds in this "pursuit of something for nothing" so as to achieve a "competence" is a respectable, "substantial" citizen, whereas he who "falls short . . . and so fails to avoid work in some useful occupation is a shiftless ne'er do well"--needing to have a job making you failure, loser, "bum.")

All of this comes together in Veblen's comprehensive image of a modern and especially American Big Business economy, centered on large industrial corporations within which "key industries" whose provision of energy, transport and essential materials to the rest sets the pace for the whole (coal, oil, electricity, railroads, steel); with the whole owned by an increasingly intricate, concentrated financial system obsessed with further consolidation and recapitalization; and the wheels of its machinery greased by the new Federal Reserve's sustaining the expansion of credit that he identified as the basis of economic boom, and which had been ongoing during and after the recent First World War. That war had two other consequences--inflation, behind which it seemed to him that (the rich who did well apart) the country was actually poorer rather than richer, and an intensification of conflict between labor and management. However, at the moment it seemed to him that, even if the triumph of the machine process and its associated ethos remained the long-term trend, the short-term outlook for progress was not very good, those on the side of things as they were still very much in power and still relentless--and successful--in propping up a system badly in need of change, with the likelihood in his view worsening disruption, with a "progressive, widening margin of deficiency in the aggregate material output and a progressive shrinkage of the available means of life" as the last sentence of the book states.

Reading all this nearly a century later it is undeniable that some of what Veblen wrote seems less than completely persuasive. The statistics we now have show that, in spite of indisputable inflation and inequality, the period during and after World War I was of extraordinary increases in American wealth.2 It is clearer still that the American economy, however short it may have been falling of its potential, attained extraordinary new peaks of efficiency as industry assimilated and refined Fordist mass-manufacturing. It may seem, too, that he did not show sufficient regard for the ways in which American finance had become bound up with global finance, which were to soon prove fateful; and that he took too much for granted the consistency of "easy-money policies" on the part of central banks (in that decade, moving toward austerity).

However, Veblen was more often right than wrong in his characterization of the American economy in the 1920s, and what he had to say about its fundamental mechanisms. As he expected, the 'twenties proved a very conservative decade, while financial control and the nation-state system did prove highly disruptive of industrial life. The post-war reparations payments system, and the international credit sustaining it, tied to a Wall Street bubble as bankers and brokers built up a colossal and colossally rickety structure of ownership and obligations, helped turn a stock market correction into an unprecedented, global crash. In the aftermath national governments quickly resorted to beggar-they-neighbor economic policies in the hopes of extricating themselves, a move that has been widely charged with deepening the downturn, and indisputably helped put the great powers on the road to a still greater war than the one that had so recently wrecked their credit and currencies--and a new order beyond that which was to see business' power moderated, finance reined in and the trading system reopened.

Veblen did not live to see the issue of these events, but in hindsight it seems that while Depression and war were followed by an era of reform and boom, it proved a brief aberration, with business and especially finance reasserting themselves in the name of those eighteenth century doctrines he regarded as having had their day--in alliance with a resurgence of those forces of intellectual torpor and social conservatism he identified at the century's outset. The result is that, for all the changes between our time and his, I suspect he would be disappointed but not confused by the situation of the world a hundred years later--where neoliberalism has prevailed over reform, fascistic politics are widespread and ascendant, and a vast, endlessly churning financial sector fueled by easy-money policies drives credit-inflated speculation booms that contribute to periodic crisis and continuing stagnation that leaves the population at large stressed and increasingly deprived while finance's beneficiaries reap historic riches.

1. The term "vested interest" in Veblen's use refers to a claim on such unearned income. The democratization of the Western nation-state, Veblen observes, merely transfers the absurdity of royal sovereignty by divine right--what he memorably calls "an inferiority complex with benefit of clergy"--to the populace at large in nominal terms, so that "each of these sovereign citizens . . . by grace of God owes unqualified and unalienable allegiance to his own person in perpetuity," and just as much as before "an establishment of force and fraud . . . against the outside," as starkly revealed in the "national graft" that is imperialism, with business the principal beneficiary in the external game as it is the internal one.
2. Admittedly, amid wartime inflation and post-war slump, and interest in living standards rather than growth and profits, he had plenty of reason to doubt.

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Review: The Theory of Business Enterprise, by Thorstein Veblen

Thorstein Veblen's The Theory of Business Enterprise takes as the starting point of its analysis classical liberalism--specifically the doctrine of "natural rights" of absolute, individual property ownership (rooted in the ownership of the labor involved in making or at least appropriating that piece of property) and freedom of contract (on a one-to-one, personal basis) as the foundations of economic and social life. While he views the notion of natural rights as colored by a primitive "anthropomorphism," he regards the premise of such rights, and the view that they conduced to the greatest good, as plausible within an eighteenth century, pre-industrial context of small-scale, owner-managed enterprise and handicraft production, as represented by the independent artisan.

However, the Industrial Revolution centering on what he called the "machine process" fundamentally changed the character of both economic life, and culture. (By "machine process" he makes clear that he does not simply mean mechanical industry, but includes also such sectors as chemicals, the fundamental point being the replacement of individual craft by scientific precision and standardization.) What it eventually produced was a worldwide, high-technology economic system, extraordinarily productive but also extraordinarily delicate and susceptible to disruption. What had also happened was an increasing differentiation between production on the one hand, and "pecuniary management" on the other--"industry" on the one side, and "business" on the other--which he found problematic.

What seemed to best serve the needs of society was the uninterrupted, efficient functioning of the industrial system, for the sake of its maximum efficiency, and highest and most "serviceable" possible output. However, that system was ultimately controlled by business, a step removed from the object of production--its interest, instead, in the maximum of profit ("what the traffic will bear"), which might or might not be served by that maximum of efficiency and output. Indeed, with the rise of the business corporation and modern high finance trafficking in "vendible corporate capital" (stock) rather than "vendible goods," the controlling business interest was actually a second step removed from that concern with production--centering its "endeavors upon the discrepancy between the actual and the putative earning-capacity rather than upon the permanent efficiency of the concern," and even prepared to compromise the latter for the sake of the former (again, at the expense of the social good).

Veblen makes the case that this conflicting interest, combined with business dominance, leads to much business conduct that is "useless or detrimental" to society, and in fact a constant disruption of industrial output, and "parasitism" on what occurs. Anti-competitive practices aimed at destroying competitors rather than besting them in the marketplace (like railroad rate wars), and financial operations aimed at raising and lowering the valuation of firms for the sake of "tactical maneuvering" ("A convincing appearance of decline or disaster will lower the putative earning capacity of the concern below its real earning capacity and so will afford an advantageous opportunity for buying with a view to future advance or with a view to strategic control") are examples of such disruption. "Competitive selling" (entailing such activities as advertising) is in his view similarly parasitic, adding nothing to the stock of goods, and forcing every enterprise to engage in it simply because others are. There is also the duplication of effort and failure to realize efficiencies of scale (for example, consolidating the rail networks or Great Lakes region iron ore mining operations).

Finally there is the periodic, large-scale, systemic idling of workers and plant in the business downturns he explains as above all due to a "malady of the affections of the business men," laying out a theory of depressions that even more than all the rest is key to his reading of the system's long-term viability, and warrants commensurate discussion here. The affections of which he wrote were for rising financial valuations (businessmen being more concerned with nominal valuations than real valuations--"current dollars" rather than "constant dollars" because they falsely imagined currencies to be stable).1 These were increasingly based not on material capital but optimistic readings of "earning-capacity," based on the inclusion of "intangible assets" like the involvement of star entrepreneurs, and rising demand and prices. These led to what one might, to use a more contemporary phrase, call "irrationally exuberant" recapitalizations and commensurate credit extensions (boom times!), which led to overvaluations, tightening credit, firms going out of business and the redistribution of the associated property on an eventually systemic scale (hard times), clearing the way for a return to the beginning of the cycle (which, he claimed, seemed to alternate between ten to twelve year upturns and downturns in the 1816-1873 period). However, since the 1870s the deflationary effect of increasing productivity, which more than offset the effect of demand on price, prevented those price rises and recapitalizations from happening in the old manner, resulting in what he characterized as "chronic" depression for the last three decades, in his view the new tendency of the system.2

In short, the imperatives of business were getting in the way of the optimal functioning of the industrial system that had grown up under it. This, moreover, threw into question its legitimation in the eyes of population, not just its claims to efficiency, but in others as well--like the challenge that corporate stock presented to the idea of property. (As Veblen put it, "the general body of owners are necessary reduced to the practical status of pensioners dependent on the discretion of the great holders of immaterial wealth.") The same went for the matter of contract--the disadvantage of workers in relation to owners in such "free" contract-making compelling them to resort to collective bargaining which had no place in the old logic, interfering as it did with owner's prerogatives in relation to their own property, and individual contract. (While less criticized, he noted that it was even the case that business itself was inverting the old natural law philosophy for its own ends, in regard to its justifications for property, which rather than being the fruit of productive labor, was increasingly argued for as a prerequisite to it.)

Most fundamental, however, was the changing ethos that went with exposure to and participation in that "machine process." This drove a turn to a materialistic, cause-and-effect-based, "matter-of-fact," scientific outlook, especially among skilled industrial workers and still more, scientists. Imbued with it, the old natural rights view--and along with it the older aristocratic ("barbarian") ethos that still colored much of contemporary life and thought with an anthropomorphic "metaphysics," and a stress on pecuniary acquisitiveness, and personal force and personal subordination--were "no longer self-evident or self-legitimating to [their] common sense."3 In more concrete terms this meant a diminished attachment to the old patriarchal family, religion, patriotism and most at issue here, property, with a secular, cosmopolitan and ultimately socialist ethic in the ascendance, to the horror of cultural traditionalists, the power elite, and especially those who were both. That certainly included businessmen, whose "metaphysics" was of the older kind, with property and contract the unquestioned starting point and "final ground" of their thought, which ran to "explanations of phenomena in terms of human relation, discretion, authenticity, choice" rather than a coming to terms with impersonal fact, and "the interpretation of new facts in terms of accredited precedents, rather than a revision of the knowledge drawn from past experience in the matter of fact light of new phenomena," making "facts conform to law."

The result was that, as the dominance of business became less compatible with the development of industry, the sway of the traditional values congenial to a business culture, too, were faltering, and the conflict between the associated ideologies and social models sharpening. As business enterprise could not do without the machine process it had unleashed, but the machine process could do without business; and technological advance meant that the machine process was exerting its influence more widely and deeply; it appeared that history was on the side of industry, not business.

Still, in his closing chapter Veblen does note that the scene is somewhat more complicated than that, identifying a number of powerful, reactionary forces at work across the Western world. Mass education was tailored to the needs and values of business, and even conducted on business-like lines, while stressing "conviction over inquiry," rather than training young minds. The popular press catered above all to that audience "in moderately easy circumstances . . . the respectable middle class . . . of various shades of conservatism, affectation and snobbery," with content designed to be even further to the right than they, and intellectually of the lowest common denominator--all "pointlessness" and "edifying, gossipy optimism." Meanwhile, the rising tide of nationalism, imperialism and the associated militarism and militarization were a conditioning to servility. (As he put it, military training was training in "ceremonial procedures, arbitrary command" and "unquestioning obedience," while "martial law puts civil rights in abeyance.") However, threatening as all these were, it was his long-range expectation that the machine process would triumph over them all.

As all of this suggests, Theory is one of Veblen's longer works, and a fairly dense one at that, more difficult than I had expected it to be in its discussion of finance, growth, boom, bust, depression, which comprises about half the book. It strikes me that this is partly because this was less familiar territory for him, but partly because older writing on these matters, preceding the richer vocabulary we have developed and the wealth of statistical and other data we take for granted in such discussions, was unavailable to him; partly because Veblen's discussion is so abstract and intricate at the same time, with little in the way of concrete examples to provide clarification and points of reference. (Perhaps reflective of a certain strain, Veblen's biting humor and linguistic flair are not much on display here.) Still, if less efficient or striking than usual he was not without considerable insight here. Veblen's theory of depression, if perhaps looking thinly sketched today, still has its interest, bound up with that analysis of what economic life means when high finance dominates non-financial industry, a matter still timely a century on--its core in the significance of inflated values and corrections for the business cycle to which he was so attentive, and the effect they have on actual production, not just of importance in understanding his time, but our own as well.

Veblen's writing also reacquires its accustomed sharpness and vibrancy when he turns to the other aspects of his chosen subject matter, ranging from his lucid exposition of the roots of the "natural law" philosophy, to the ways in which it had become problematic in the nineteenth century. Considering his last chapter it strikes me that little is said now of the failings of our education system and the press, or the dangers of militarism, that he did not say then, if only in outline. Indeed, in the contrast between the older value system of the traditionalists, and the more skeptical outlook of those touched by the machine process, we get an adequate description of the stuff of the culture wars that rage on today in tiresome, destructive fashion--devotees of flag, cross, family values and capitalism-as-freedom clashing with socially liberal, secular progressives then as now.

To be fair, Veblen would go on to say much of this elsewhere, in more developed, sophisticated fashion. But this important, early exposition is strong enough to enrich the understanding of them (as I found when I took a second look at Absentee Ownership). Similarly I have found this book an aid to understanding not just Veblen's body of work, but that of the numerous writers who followed in his footsteps over the twentieth century--the preoccupations and analyses of figures like C. Wright Mills, John Galbraith, Gabriel Kolko and Paul Sweezy, all of whom have considerable debts to him. In short, even after having read a good deal of Veblen previously, The Theory of Business Enterprise more than rewarded my pushing on through its less even patches.

1. Veblen took a comparatively dim view of businessmens' intellects, observing that "short-sightedness and lack of insight beyond the conventional routine seem to be fairly universal traits of the class of men who engage in the larger business activities"--and even suggested that if the class as a whole got wise to the realities, "business traffic as now carried on might conceivably collapse through loss of its base line."
2. Veblen acknowledged that there had been efforts to restore growth without changing the system, namely "wasteful expenditure," as on arms; and the effort to control competition, by way of the "trusts"; but viewed both as undesirable, with trusts particularly ineffective (the latter, due to the implausibly comprehensive character they would have to attain).
3. The aristocratic, barbarian ethos was, of course, the principal subject of Veblen's The Theory of the Leisure Class.

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A (Hopefully) Handy Guide to Political Definitions: Liberalism, Conservatism, Radicalism

In recent weeks I have spent some time in Twitter, and had occasion to participate in a good many discussions of politics. In the process I have been reminded that of those who pontificate about the subject only a comparative few have any understanding of the meanings of even the most basic terminology of political science--such words as liberalism, conservatism, radicalism, let alone their better known variants (not least, libertarianism, neoliberalism, neoconservatism, fascism, social democracy, socialism, Communism, Marxism).

For that reason I have decided to write a blog post spelling out the meanings of these terms as I understand them and use them, and as I think most people who have any real familiarity with the subject matter understand and use them, in as concise a fashion as possible. Of course, any attempt at a round-up in such a short space as a single blog post will have its limitations, especially given that each of the major terms refers to an old, complex, evolving, multi-stranded tradition, one which saw less outright replacement of one version of them by another than a combination of modification of the old while new ones were added alongside them. Still, if much more can be said about any of these matters (and indeed I can only regard this post as a perpetual work in progress), it does not seem unreasonable to try and offer a useful minimum, and I think I have managed to do that here.

Classical Definitions
In considering the key terms here it is worthwhile to subdivide the "classical" definitions whose roots lie in the seventeenth and eighteenth centuries within and in reaction to the West European "Enlightenment"; and in the next section, the more "contemporary" definitions emergent by the nineteenth century and refined over the twentieth that evolved from the earlier ones. Central to my explanation is "liberalism," which led to the rise of "conservatism" and "radicalism" as responses.

Liberalism: The roots of liberalism lie in the early modern shift from a reliance on authority (the teachings of religion, the pronouncements of the Ancients) for explanations of the world, toward rigorous observation of the empirical world and reasoning from that observation. Early on codified in the "scientific method" (the formation of testable hypotheses, their rigorous and repeated testing, the mathematical measurement of the results, and induction from these to general explanations) which figures like Francis Bacon and Renee Descartes helped formalize, and soon leading to striking gains in knowledge in areas like astronomy and physics (for example, the classical dynamics of Isaac Newton), and hopes of human mastery of the natural world conducing to the well-being of all.

However, the Enlightenment extended the use of such reasoning from the natural world to the social one as well. Again, authority had been the foundation for thought about such matters, the world imagined in traditional, Medieval thought as a hierarchy where said authority ultimately derived from God in a "Great Chain of Being" that sanctified "things as they were"--the mix of Medieval and early modern that combined king, warrior-landowner aristocracy, established Church ruling over stratified societies which interacted with one another through an anarchic system of combative nation-states whose policy was determined by the imperatives of those ruling elites and that conflict--not least, in their penchant for a mercantilist economics designed to enrich the state above all.

The social and political thinkers of the era who proved influential in following this line of thought began not with what had been built up, but what they imagined to be the most basic building block of society's organization--the individual human being. They concluded that humans, across cultures and as a species, were rational beings who "maximize their self-interest," seeking the most pleasure and the least pain for the minimal effort, and furthermore, enjoy inalienable rights to life, liberty and property in the classic formulation of John Locke. Put less poetically, this meant physical survival; freedom from the control of one's actions by others; and security in the ownership of one's goods, on the assumption that one owned their actions, labor included, and their appropriating or working a piece of the natural world, by mixing their labor with it, also made the object theirs.

Proceeding from this assumption such theorists concluded that the only legitimate basis of binding association with others is a consensual agreement, a contract, to make which they have complete freedom. Accordingly, the only government that can be considered legitimate is one which governs by their consent--fulfilling a "social contract" by which it secures those basic rights in a way they could not do individually (such that early theorists of these matters, like Thomas Hobbes and Locke, posited society's origin in a prehistoric contract of such a type). Moreover, the broad conception of those rights of liberty and property relegates government to a minimal, "night watchman," contracts and property-protecting state, a preference furthered by the view that individuals' maximum latitude to make other contracts was not only their right as free beings, but economically desirable. Specifically eighteenth century theorists argued that the play of profit-seeking private interests in the "free" market, through competition that would reward or punish actors according to how efficiently they furnished supplies of wanted goods in response to the genuine demand for them, was the best inducement to efficiency and productivity; and the efficiency and productivity of individuals in the aggregate the efficiency and productivity of society as a whole. (One can sum it up as a philosophy of laissez-faire within nations, and free trade between nations.)

The combination of democratic, rights-respecting, minimal government and free markets, and the application of reason to the natural world in the form of science, which the pursuit of efficiency would spur with regard to product and process, would facilitate "progress"--the improvement of the condition of all human beings over time, which is regarded as the long-running tendency of modern life. In line with this went the hope of abolishing old practices and institutions like slavery, torture and even war--proponents of this view imagining that a cosmopolitan, free-trading order would pacify the world, which in turn would enhance prosperity. As might be expected given these values, sympathies and antipathies, liberalism was closely identifiable with the rising commercial-industrial bourgeoisie, who found themselves pitted against the "Old Regime" prevailing in Western Europe--its governance of Medieval-feudal institutions of monarchy, landowner-warrior aristocracy, an established Church interpenetrated with and aligned with those institutions.

Conservatism: What we think of as major developments in conservative thought emerged in reaction to liberalism, often after the experience of liberal revolutions--the seventeenth century English and eighteenth century French most notably (the former producing Thomas Hobbes and Robert Filmer, the latter Edmund Burke and Joseph de Maistre).

Typically a matter of making the arguments for what had previously been done more explicit and elaborate, conservative thinkers take a very different view of humans and society than do liberals. For them societies are not simple aggregates of individuals, but organic entities, while the human beings comprising them are not all the same (de Maistre famously quipping that while he knew of "Frenchmen, Italians, Russians" and others, "There is no such thing in the world as Man"), and rather less rational than liberals made them out to be--indeed, inherently flawed in the manner conceived by Christian thinkers--Fallen, tainted by original sin. Indeed, given the organic nature of societies, and the imperfections of human understanding and human sinfulness, the individual pursuit of self-interest is in their view a road to chaos; while they regarded projects aimed at increasing human happiness more generally with irony, attempts to change the world for the better apt to actually make it worse, and conservatives were quick to point to the violence of past revolutions as support for their view. (It is from this that we get the common view of the French Revolution as the Terror and nothing else.)

Accordingly, they argued that humans ought to be wary of social and political change, and submit to established authority even in the face of grave oppression and injustice, to the point that a certain sort of callousness regarding it was equated with wisdom. They also fortified the argument for authority on pragmatic grounds. Conservatives championed religion not because (or not simply because) it was revealed truth, but because it was conducive to social order. (Napoleon's quip that "Society cannot exist without some being richer than others, and this inequality cannot exist without religion" sums this up nicely.) An increasingly intricate argument was also made on behalf of tradition of all kinds, in part because the living were bound by the decisions of and their obligations to those who preceded them, but also because the ways of a society that had endured for a long time embodied the "wisdom of the ages" and what actually "works" in real life rather than on paper. In practical terms this made conservatives defenders of the Medieval heritage, and of rule by its elite--kings, churchmen and above all the aristocrat to which they were linked, to which the rest were expected to defer on this and sometimes other grounds. (It became common to contend that the aristocratic ethos--rural, leisured, martial--was superior to that of the grubby merchant, for example.) All of this, of course, meant that throne, altar and aristocracy inclined toward conservatism out of self-interest as well as principle, and that both of these bound all three together.

Of course, it might be noted that these principles do not wholly rule out a regard for society's weakest out of paternalism, noblesse oblige or simple fear of what extreme inequality or widespread hunger would mean for social stability (and indeed, Old Regime governments had, after a fashion, instituted laws regarding the pay and conditions of workers, and provision for the poor). Nor do they necessarily rule out the possibility of gradual change in the direction of a more egalitarian or cosmopolitan social or political model. Yet, any such expectation was apt to be low, and given the underlying politics, enthusiasm for it not very great. Similarly not ruled out, and arguably more commonplace, was the privileged standing on what they perceived as their rights in the face of claims of other groups.

Radicalism: Radicals share the liberal's preference for reason and concern for the rights of the individual, freedom, justice, progress, and their cosmopolitan aspiration to a more peaceful and prosperous world being for all. However, they see liberalism as failing to satisfy these objects. To some extent this was merely a matter of the inadequacies of liberals' application of their own avowed prescriptions--for example, which humans enjoyed "universal" human rights. Implicitly this was often limited to adult male property owners (and in the U.S., where race was at issue, "White" male property owners specifically), where the radical inclined to their extension to all regardless of gender, economic condition, race.

However, a more fundamental difference was that even in the event of such extension, radicals recognize that liberal prescriptions do not necessarily realize liberal ideals, with economic life the key scene of such a failing. In liberal theory, for example, all people are equally free to make contracts, and coercion accordingly an impossibility in the marketplace. However, the radical recognizes that the position of the worker with nothing to sell but their labor is in a very different position than a prospective employer, a very disadvantageous one by comparison, and the fact hugely significant in a world where people increasingly subsisted on such terms--what would later be called a proletarianized world of working people separated from "the means of production." They noted, too, that in such an arrangement the contradiction within the old "theory of labor value" that liberals had been content to use since Locke became increasingly central--namely, the split between the earnings of labor (wages) AND the earnings of capital (profits), with the latter coming at the expense of the former.

Radicals were attentive, too, to the fact that liberal ideology sat uneasily with such obvious remedies for workers' disadvantage in the marketplace, as collective bargaining by organized labor, or state-sanctioned minimum wages; while in practice (bourgeois) liberals were consistently more forgiving toward deviations from their principles that advantaged them. (Indeed, none other than Adam Smith noted how much more lenient governments were to associations of business owners than they were to associations of workers.)

Ultimately radicals came to see a tension between the claims of property-holders and the freedom of their fellow citizens; between the private agendas of an unequal capitalism (it is radicals who in fact coined the term), and the egalitarianism of democracy--and given the choice, the radical opted for democracy over a capitalism that seemed to make democracy simply the rule of the moneyed. In response, to one degree or another, they favored an economics which protected working people and the poor, and organized economic life in a collective fashion, perhaps extending to public ownership of the means of production and their use not for the sake of profit but the fulfillment of the needs of all members of the community in question--the quintessence of "socialism"--and the key dividing line between radicals and liberals.

Still, if radicalism emerged as a presence in political life quite early on (as with the Diggers in the English Revolution), it was a relatively minor actor in a political contest largely fought out between liberalism and conservatism. However, this changed profoundly in the nineteenth century, such that one could increasingly think of liberalism as the "center," conservatism as the "right" and radicalism as the "left," a development which changed much else.

Contemporary Definitions
As liberal, conservative--and radical--struggled through and after political revolutions, the world underwent a profound techno-economic revolution. Generally termed the Industrial Revolution it saw science, commercialization and in particular mechanization drastically raise the capacity of agriculture and manufacturing. In the process a world of rural, land-bound peasants increasingly became an urban world of uprooted proletarians--while the bourgeoisie continued to wax in wealth and influence. Connected with both developments there was also a military revolution, as the old pattern of mercenary armies gave way to larger, national armies for which governments sought to mobilize their people as willing and able conscripts and reservists; while needing to foster economic development along those industrialized lines as the price of modern military technique. Both meant that the illiterate and usually passive populace increasingly became a literate, conscious, organized political actor in its own right.

Meanwhile, the radical, socialist tradition grew much more varied and intellectually sophisticated, and founded organizations to promote its ideas, including political parties vying for office at the ballot box. Indeed, liberals and even conservatives came to expect (and fear) that the world's direction was ultimately socialist. As a result, much as conservatives would have liked a return to the Old Regime, they increasingly accepted that there was no avoiding modernity. At the same time the bourgeoisie, increasingly contented with its lot and made nervous by the restlessness of the lower orders, also shifted to a different outlook than before--by and large, a more conservative one. It is with this shift in outlook that the following discussion will begin.

Conservatism (I): In the early nineteenth century conservatives' initial impulse was reactionary--simply "turning the clock back" to before the French Revolution, in line with their previously established ideals. However, they increasingly found that they could not totally avoid concessions to liberal notions of rights, or even formal democracy; or refuse the bourgeoisie a greater say in affairs (or the growth of the industrial capitalism that went with it, of which they increasingly partook, whether through their own commercial activity, or their marriages to wealthy bourgeois). Still, in line with their continuing to view human beings, society, reason and social change as they did before (imperfect and Fallen individuals in an organic society poorly understood through reason and dangerous to change), they sought to minimize such concessions, while preserving as much of the old institutions as possible, and the elitist principle along with them in the face of both liberalism, and a still more threatening radicalism.

The limitation of the franchise to property-owners rather than all citizens, the preservation of aristocratic institutions to whatever extent possible--a constitutional monarchy with a House of Lords rather than a full-blown republic, for example--was an obvious inclination. (The same goes for such compromises as the maintenance of tariffs on agricultural imports to protect the interests of substantially aristocratic landowners.)

Conservatism (Ia): As the bourgeoisie continued its ascent, becoming richer, more powerful, more comfortable--indeed, even aristocratic--the line between one class and the other blurred. At the same time they increasingly regarded the lower orders as threatening, because of the increasing consciousness of the conflict between a capitalism where property was distributed unequally, and a democracy which distributed votes equally, such that the poor majority might attack the economic interests of the wealthy minority.

Unsurprisingly, liberals increasingly armed themselves with an intellectual basis for defending property and markets not just against grasping monarchs, but the claims of the discontented poor as well. One early case of such thought was Thomas Malthus' attribution of poverty and misery to overpopulation rather than the inequities of capitalism, which Malthusianism led eventually to a Social Darwinism (championed by Herbert Spencer) that interpreted human society as an arena for "survival of the fittest"-style competition, and economic success the measure of fitness, such that the poor had only their own unworthiness to blame. Additionally, they turned to a "neoclassical" economics which replaced the "classical" labor theory of value devised by Locke and espoused by figures like Smith (and its built-in conflict between labor and capital) with a theory of value based on marginal utility (which eliminated the possibility of exploitation from their economic models, and downplayed the role of labor in wealth creation).

These ideas were in many cases well-received by conservatives, who embraced them; while at the same time, liberals gravitated toward conservatives' more distinct anti-revolutionary and ultimately conservative views, to the point that where they had once fiercely opposed the rule of throne and altar, they were content to accept and even support it. Where this process is concerned the European revolutions of 1848 are regarded as a watershed moment--the French bourgeois afterward content to have a monarch or other dictator in Napoleon III (if genuine Old Regime institutions were no longer viable, ersatz ones would do) as the price of keeping the radical threat to property at bay.

One could thus speak of a "liberal conservatism" or a "conservative liberalism," depending on the starting point, and the extent to which it was colored by the other view. (Putting it another way, as radicals chose democracy over capitalism, some liberals were choosing capitalism over democracy, property over liberty, and going right accordingly.)

Conservatism (II): As the nineteenth century progressed the limited franchises became less sustainable, and the vote accorded a wider proportion of the population--increasingly, even extending to the working class. Additionally, even non-voters increasingly mattered when an age of conscription made the loyalty of the broad population base important, and revolutionary sentiment was in the air.

Accordingly conservatives increasingly recognized that rather than simply expecting the general public to stay out of political life they needed its acquiescence, raising the problem of making policies that served the elite, at the expense of other groups, acceptable to those other groups within the liberalized new context. Elites were, in cases, prepared to make certain concessions to the less well-off. (For example, Wilhelmine Germany's groundbreaking social legislation--which started with its establishment of old age pensions in the 1870s--was utilized to help neutralize support for socialism.)

However, the key to such a politics was "nationalism," the idea that the nation (the ethnic group) is the basic unit of humanity, whose members not only share ties of blood and culture but a destiny--a common past and future, ideally lived within an ethnically homogeneous and politically sovereign nation-state. Conservative nationalists opposed national distinctiveness to liberal or radical universalism, and commonly defined their nation's identity in an anti-liberal, anti-radical understanding of its character and heritage (e.g. "Democracy may be all well and good for those other types, but not for us, who have a higher, more spiritual calling"), making respect for and deference to the existing order, Old Regime institutions (throne, altar and the rest), and the status quo more generally (thus subsuming class differences), a duty of the "patriot" (the lover of country, a love increasingly conflated with the more specific notion of nationalism), though by no means the only one.

Conservative propagandists for nationalism also held that the individual had a duty of loyalty to their nation and nation-state, extending to hatred for its enemies and a readiness to give their life as a soldier fighting against such enemies, to such an extent that nationalism was strongly bound up with a more general militaristic glorification of the possession, use of and participation in armed force (the idea of duty to country increasingly equated with military service and war). Reflecting the old aristocratic, martial, Old Regime ethos such thinkers made much of the idea of national "honor" and "glory"--of the avenging of insult, the fulfillment of threats, and the humiliation or domination of other nations as praiseworthy (the "nationalist," ironically, depriving other nations of their national aspirations by imperialistically ruling over them). Given the demographic reality that few if any areas lent themselves even approximately to the nationalist ideal of sovereignty and homogeneity, built into this concept was a source of constant conflict. An ethnic minority inside the country was marginalized, suspect, under pressure to assimilate; while states ruling over one's coethnics and barring them from joining their brethren in the nation-state were seen as an obstacle to the integrity of the country--all on top of the already existing propensity of an "anarchic" international system to conflict.

All of this was reinforced by, besides the greater demand on the subject or citizen in the form of military service, the pressures of modernization. Key among these was the spread of public education, and the expansion of clerical and other official, literate employment, which made such matters as a nation's official language (and the problems of linguistic minorities) matters of personal consequence for growing numbers of people. The translation of evolution into pseudoscientific Social Darwinism and scientific racism, which identified nations as not merely cultural but biological types in conflict with one another, with the successful thriving and the unsuccessful declining and even disappearing, further intensified such thinking (arguably, along with a resurgence of the economic and strategic attraction of imperialistic adventure for the great powers in the late nineteenth century). In Britain in the relevant period the "yellow journalism" of the popular press, the "jingoism" of the music hall, the cult that Benjamin Disraeli created around Queen Victoria, and the boom in "invasion literature," all reflected and promoted such a sensibility. (At the same time, the manner in which a militarized nationalism provided an excuse for suppressing dissent, denying social claims and otherwise checking liberal and radical movements helped to make such policies more attractive to conservative thinkers.)

Conservatism (IIa): The tendency described above--the increasing need for popular acquiescence in conservative policies--shaded into a politics which actively mobilized the public in a movement of rebellion not against reactionary ideas (as was the case with socialism) but on behalf of them. More concretely, where traditionalist-nationalist conservatives downplayed divisions within society and exalted respect for authority, this variant of conservatism tended to be "populist" and stridently anti-elite; and where traditionalist-nationalist conservatives accepted (if grudgingly) the liberals' social structure, such conservatism tended to be anti-liberal, specifically anti-democratic and even anti-capitalist, overtly looking to supplant them with a formally authoritarian order. Commonly termed "fascism" after the pioneering example of Benito Mussolini's party in interwar Italy, and also identified with the National Socialist party led by Adolf Hitler in Germany, the combination of elements clearly distinguishing it from other forms of rightist politics (the blend of rebellion and reaction) is obviously contradictory and unstable, and relies on a certain sleight-of-hand.

Where their anti-elitism is concerned, fascists direct popular hostility to just part of the elite, perhaps even an imaginary part (e.g. "intellectuals" or "international bankers"), with the backing of other portions of the elite (or even nearly all of it, when the target is imaginary). This is reflected in the economics that fascism, in another sleight-of-hand, conventionally presents as its "alternative" to the capitalism it superficially opposes, "corporatism." Rather than an abolition of capital in the socialist manner, what it claims to do is replace the confrontational capital-labor relationship with a collaborative state-capital-labor relationship that formally preserves the essentials of capitalism (private property and profit), and in practice extends it (with business favored over labor, which is suppressed, with unions eliminated and wages held down) in an arrangement that may see more state intrusion into business decisions than in the conservative-liberal ideal, but nonetheless tends to be as profitable for business as the circumstances allow.

All of this is made more passable by perhaps the subtlest sleight-of-hand of all, what Walter Benjamin describes as fascism's organization of its adherents around collective "self-expression" while suppressing their self-interest--its emphasis on belonging within and unity of the group and aggression against those outside it; and its associated stress on "culture war" and propensity for theatricality. These are arguably bound up with the inclination of this form of conservatism to its particularly extreme manifestations of nationalism, racism and militarism.

Conservatism (IIb): Arguably the ascendance of fascism in the era following the First World War and the Great Depression was the declining ability of the traditionalist-nationalist form to maintain popular acquiescence amid increasing political and economic stress, and the radicalism to which they led--this more radical conservatism the last resort against the gains of a radical left. However, following the defeat of the fascist governments of Germany and its allies the conventional view was that fascism had been relegated to the margins of Western political life, in the form of blatantly "neo-fascist" groups. Moreover, much of the basis for fascist appeals, such as aggressive nationalism, militarism or imperialism, lost their mainstream respectability; while in subsequent decades the same went for racist appeal.

Still, it may be argued that all these endured as a far from trivial presence in political life. Indeed, it is arguable that virtually all major parties of the political right today are reliant on fascistic appeals to one extent or another. Moreover, by the second decade of the twenty-first century, it is arguable that fascistic appeal was becoming more blatant within Western political life (normally referred to by the less charged term "right-wing populism").

Liberalism (I): As noted above, there was a fusion between significant portions of conservative and liberal thought. However, liberalism, to the extent that it remained distinct from and opposed to conservatism, was liberalism increasingly informed by radicalism. This was, in part, a matter of radicalism's inducement to liberals to be more thoroughgoing in the application of core liberal principles--for example, in the abolition of slavery or the extension of the franchise over the nineteenth and twentieth centuries. However, there was also the matter of liberalism's grappling with the incompatibilities between eighteenth century theory and economic life as it was already being lived in the nineteenth century, and still more the twentieth.

The economic ideal of classical liberalism was the individual entrepreneur who managed their own, typically small, capital in a market they could not control, so that established traders could not attain lasting or significant structural advantage, entry was easy, and competitive pressure high. Nevertheless, as Alexander Hamilton began to argue before the eighteenth century even closed, economic history contradicted liberal theory with regard to the manner in which countries industrialized--state support in such ways as tariffs, infrastructure investment, and even government ownership of critical enterprises (such as a postal service), critical to the development of a sophisticated manufacturing base such as all states now desired and required. Additionally, the advance of technology that led to such complex, high-cost products as the railroad necessitated the large corporation, where ownership and management tended to be separate, big business enjoyed great "economies of scale" over the small, and oligopoly and monopoly undermined the discipline the market was supposed to impose. (The conflict between monopolistic rail lines and farmers in the United States, for example, demonstrated the imbalance of power even among two parties of entrepreneur.) There were, too, all the complexities of currency and credit. All this made the old faith in the market seem less plausible as a guarantee of efficiency or shield against exploitation. Moreover, the extreme severity of working conditions in factories, mines and other industrial sites, and the unhealthfulness of modern urban life generally, raised doubts about the wisdom of pure laissez-faire.

The result was that rather than being cases of mere deviation from liberal principles, liberals who still adhered to capitalism as the preferred economic model increasingly acknowledged the need for selective state intervention for the sake of economic expansion, and even public welfare. In all this liberalism's support for economic growth, and regard for other of its basic values like individual freedom (extreme deprivation is an indisputable obstacle to the enjoyment of basic freedoms), was reinforced by an alertness to the politics of class, social radicalism and the fear of revolution, which liberals dreaded as much as conservatives--to the point of supporting them in anti-revolutionary military action. (Thus, for example, stood the policy of U.S. President Woodrow Wilson, or American "Cold War liberalism.")

Consequently, while the origin of the modern welfare state is most associated with the conservative regime of Wilhelmine Germany, the use of a strong welfare state to shield society's most vulnerable from the harshness of capitalist economics is more commonly regarded as a liberal conception, with liberals championing such interventionism more frequently than their counterparts on the right (in such realms as unemployment protection, health care, education, housing). Liberals also supported the use of the state's regulatory powers for the sake of protecting workers (in such areas as working hours, safety conditions, minimum wages and protection against termination) and consumers (like America's Pure Food and Drug Act); and then after the Great Depression of the 1930s, macroeconomic management through fiscal and monetary policy to simultaneously moderate business downturns, reduce unemployment and restrain inflation (in the manner prescribed by, for example, John Maynard Keynes). Also part of the package in many cases was the nationalization of key enterprises previously conducted on a private basis, particularly those where monopolies naturally occurred (such as transport, utilities and defense). This enlarged state, moreover, was paid for through increased taxation, and typically through greater progressive taxation (those who have more paying more, through graduated income taxes, and taxes on corporations, capital or inheritance which affected the rich more than the poor). Besides direct state action, such liberals also advocated a measure of tolerance for collective bargaining as necessary for workers to best address the problem of their pay and conditions.

In the post-World War II period a "mixed economy" of this type, a baseline of industrial capitalism modified in these ways, became the norm in the Western world. The term "social democracy" has been used to refer to this version of liberalism, though simple "liberal" is more commonly used in the United States, where the social democratic element has been comparatively mild (the U.S. never providing universal health care or free college education, for example, and eschewing even the limited industrial nationalizations seen elsewhere). However, reflecting the continued centrality of an increasingly corporatized capitalism in their schema, they have also been known (from further left) by the more derisive term "corporate liberal." More recently the term "democratic socialist" has come into vogue in this usage in the U.S. (the shift in the word order, arguably, reflecting an American tendency to equate socialism with totalitarianism and driving attempts by avowed democratic socialists to distance themselves from such perceptions).

Liberalism (II): As conservatism increasingly accommodated classical liberalism, and liberalism was increasingly informed by radicalism, the older, eighteenth century-style liberalism remained a force--and arguably, became "fundamentalist," insisting on the complete, continuing validity of that pre-industrial, eighteenth century prescription of laissez-faire and free trade as the guarantor of efficiency, prosperity and freedom in a world of industrialized, monopolistic, corporate capitalism unforeseen by eighteenth century thinkers. Indeed, such liberals argued explicitly that where society's conditions were less than optimal the problem was not too much "of the market," but rather "too little of it," with the further unleashing of the market the sole hope of redress--and any failing in spite of that stomached as simply the best human beings could do for the time being, given the even poorer economic results, and loss of freedom, that any alternative would entail.

Proponents of such views continued to be referred to as liberals in much of the world (e.g. in Western European use), while the term "classical liberal" or "libertarian" is used in the United States (even if, in practice, they tend to be affiliated with the parties and policies of the political right).

Liberalism (IIa): By way of institutions like the Mont Pelerin Society and the Chicago and Virginia "schools" of economics, a substantial portion of libertarian thought coalesced into a political project, "neoliberalism," significantly differing from eighteenth century liberalism because of the prevailing political context. The eighteenth century liberal was a revolutionary opposed to the feudal Old Regime and aspired to build a new order beyond it, but the classical liberal was a reactionary looking to dismantle social democracy toward the end of reestablishing a past order, as demonstrated by its concrete policy prescriptions--its looking to undo social democratic reform by eliminating state welfare functions and regulations, privatizing still other functions, shrinking the fiscal state (in particular, eliminating progressive taxation) and suppressing organized labor.

It may also be said that just as the social democratic version of liberalism reflected the stress under which eighteenth century liberalism quickly came, and the necessity of choosing between liberal theory and present day demands, this version was also forced to compromise classical liberal ideals. Like the anxious bourgeois of the nineteenth century, when they felt themselves forced to choose they opted for capitalism over democracy, not as a compromise of old principles but in the name of them--the belief in property and enterprise as the foundation of freedom--and champion a profligate use of force, such as could only be generated by a massive, militarized state (in their staunch hostility to Communism).

Indeed, the more traditional right drew many of its economic ideas from libertarian thinkers (such as Milton Friedman), which enabled neoliberals and conservatives to make common cause. Nor was this necessarily the end of the traffic between them, many "liberal" thinkers taking on a larger part of the conservative package for the sake of the neoliberal project (for example, the conservative concern for nationalist evocations and social order). In the process "neoliberalism" laid the foundations for a "neoconservatism" (identifiable with thinkers like Norman Podhoretz and Irving Kristol) that can be read as the other side of the neoliberal coin.

In the 1970s the stagnation of the world economy created an opportunity which neoliberalism fully exploited--by presenting an alternative they promised would produce unprecedented economic growth, while also claiming that changed conditions allowed of no alternative. In particular they held that new digital computing and communications technology were incompatible with "central planning," while along with easier transport, they made national economies more porous, forcing nations to cater to business rather than the other way around--a view that became the conventional wisdom in short order. Subsequently, and symbolically, the first great scene of such policymaking proved to be a military dictatorship which had overthrown a democratically elected socialist government, Chile, where the Friedman-trained "Chicago Boys" implemented a neoliberal program on the dictatorship's behalf. Where the developed world was concerned, the following years saw the Britain of Margaret Thatcher (famously identified with the declaration that "There Is No Alternative" to such policies) and the United States of Ronald Reagan became by far the most conspicuous scenes of such endeavor.

Where practical results are concerned, it should be said that, especially in the major developed economies, the realization of the declared program was never complete, with portions of it only very slowly making headway. In practice it proved far easier to roll back taxes on high incomes, privatize state-owned enterprises, deregulate the private sector and lower trade barriers than to weaken organized labor (which typically involved a major political battle, like Reagan's against the air-traffic controllers' union, Thatcher's against the coal miners). And it was easier still to suppress organized labor than to attack the cores of welfare states, such that neoliberals tended to erode these rather than speedily dismantle them. It should be noted, too, that as had long been the case with libertarian ideologues, the avowed hostility to government intervention in economic life, very clearly shown in the event of intervention on behalf of workers, consumers, the poor or the environment, was contradicted by an extremely high tolerance for government interventions on behalf of business and the wealthy. Suppressing organized labor, for instance, was state action--while massive taxpayer-funded bail-outs of investors as financial deregulation unleashed irresponsible and destabilizing speculation became routine. Indeed, critics of neoliberalism commonly charge that the liberal ideology was a mere rationalization, the true agenda the restoration of the earlier power of economic elites and especially financial elites--who, even as neoliberalism on the whole delivered weak economic growth, prospered greatly.

Liberalism (III): Pressed by neoliberalism from the right, and radicalism from the left, the liberalism previously identified with social democracy was also influenced by the emergent, postmodernist politics of identity. In the process it tended to acquiesce in the conservative/libertarian thrust in economic policy, not least in regard to the agenda of privatization, welfare state reduction, etc.., while turning its attention away from the politics of class toward the cultural politics of individual freedom, personal identity and "lifestyle." This meant a shift from liberal extension of basic rights to all irrespective of ethnicity or gender to increasing recognition of differences in ethnicity and gender, with special protections or concessions perceived as necessary for their full participation in society (such as "affirmative action" for minorities subject to prejudice in the work force); and a new attentiveness to sexual freedoms and reproductive rights.

Along with the decreasing distance between what had been social democrat/liberal and libertarian/conservative on economic matters, conservatives' traditionalist opposition to liberal initiatives on these issues meant that these were increasingly the basis of the liberals' claims to difference with the right, and identification with progressive values; and the associated "culture wars" the heart of political debate. The resulting form of liberalism has commonly been termed "woke" neoliberalism by leftward critics, and the pattern continued even as neoliberal economic prescriptions proved painful for and distasteful to the public, with many commentators arguing that voters' choices within the mainstream were increasingly between a woke neoliberalism and a more plainly right-wing kind.

Radicalism (I): While conservatism and even liberalism underwent the deep changes described above, radicalism, too, underwent an evolution, though of a different kind. Rather than adapting its principles in the fundamental manner of the other ideologies what it did was develop a sophisticated body of theory, and a considerable variety of premise and program in relation to its continued attachment to the principles of freedom, progress and justice, and its critical stance toward capitalism (to the limitations and problems of which it was still more sensitive than liberalism).

In particular the nineteenth and twentieth centuries saw the emergence of schools of socialist thought with powerfully different understandings of social reality, and which accordingly were more or less idealist or materialist, more or less technologically-minded, more or less statist, more or less class based, more or less cosmopolitan and globally-minded, more or less "utopian" or pragmatic, more or less reformist or revolutionary, as comparisons of a mere handful of thinkers (for example, Robert Owen, Henri de Saint-Simon, Pierre-Joseph Proudhon, Karl Marx and Thorstein Veblen) quickly demonstrate. However, they increasingly had in common the view that liberal/social democrat-style reform, at best, ameliorated rather than eliminated the problems it set out to resolve--whether unemployment, poverty or the vicissitudes of cyclical downturns, while failing even to guarantee the functionality of democracy in the face of the continued power and influence of the wealthy; and to advocate for deeper changes as necessary for more fundamental progress, or even human survival.

Radicalism (Ia): From a political standpoint the single most significant socialist ideology was Marxism, which accordingly merits a word. The particular brand of socialism Marxism represents is founded on a historical materialist philosophy, on the basis of which it offers a reading of history, society and economics. In brief it may be said to posit that particular "material conditions create consciousness," in particular the economic sub-structure of a society--how people actually subsist. This shapes social relations, creating a particular class structure, which tends to bring with it a particular source of class conflict. As a particular form of society develops, as technology evolves, it can be expected to achieve material progress, but in the process the contradictions of that model (its inability to accommodate newer methods that would continue economic development, and the conflicts of its class system) render it dysfunctional, stagnant and decreasingly legitimate in its people's eyes. This may lead to its displacement by another social model, championed by a new, rising class against the old elite, by way of a revolution.

Thus did aristocratic feudalism stagnate, and get displaced by bourgeois capitalism (the hallmarks of which are the separation of workers from the means of production, owned by capitalists who hire them as "free," unattached labor for the sake of profit-oriented commodity production), with revolutions like the English and French completing the transition. In the aftermath capitalism did revolutionize production, creating a genuinely global, high-technology economic system. However, for all its successes that system was in turn being undone by its own, increasingly problematic contradictions, not least that between the "social" production of wealth (the scale and complexity of economic life in a corporate, technological, industrial age) and the individualistic, private appropriation of that wealth. This means that socialism is in their understanding not just preferable, but increasingly a necessary alternative to a capitalism that is failing the way feudalism failed before, and they expected the currently dominated group, the working class, to seize power from the dominant but failing ruling elite that the once revolutionary bourgeoisie had become. This revolution would establish its class rule, in which socialism would replace private property and profit-oriented capitalism, as a transitional stage to a final social form in which the old contradictions would be finally resolved, a classless, stateless Communism. (It is from this final object that "Communist" parties get their name.)

The ultimate seizure of power by a Communist Party in Russia in 1917 and subsequent establishment of the Soviet Union, and the subsequent shifts in course and political divisions of the Soviet leadership, led to such crucial splits as that between Stalinism and Trotskyism--the followers of Joseph Stalin (proponents of "socialism in one country" under the one party-and-command economy model) and Leon Trotsky (insistent that, there being only one world economy, socialism's realization ultimately requires a global economic base, and a working class unswervingly pursuing its own political line, extending to its resistance of bureaucratic domination), respectively.

Radicalism (II): During the twentieth century socialism had its successes, but also its limitations, particularly its failure to take power in even a portion of the "core" of the world economy--the most advanced and wealthiest countries. Additionally the Soviet Union, in spite of its successes in modernizing and industrializing a previously backward Russian Empire and assorted other states, never matched let alone exceeded the productivity, output, wealth or living standards of the capitalist states which, whatever their problems, or their compromises (e.g. their incorporation of a certain amount of socialistic practice), have avoided societal collapse or a surrender of power to the left.

All of this contributed to the unraveling of the Soviet Union and international Communism more generally by the 1990s. However, well before that point, disenchantment with the actuality of the Soviet Union by many on the left, and the success of a conservative-liberal ideological offensive in equating socialism with the failures of Soviet-style states, undermined the old socialist tradition. The closely associated trend toward postmodernist thought also had its influence on radicalism, again shifting much radical thought away from economics and class toward questions of identity, in a manner paralleling what occurred with liberalism. This shift was further reinforced by the demise of Communist Parties in name or fact in much of the territory where they had gained an ascendancy; and a liberal-conservative triumphalism that declared the day of socialism and ideological disputation over, with capitalist-democracy the champion for all time.

However, while radicalism, especially in its more conventional forms, was marginalized within political and culture life, and like liberalism, subsequently colored by postmodernist thinking utterly inimical to its intellectual foundations, the "real thing" cannot be said to have disappeared. In particular, discontent with the results of neoliberalism, and with the conduct of social democrat/liberal parties in response to it, endured. Consequently, in the wake of their deepening by the 2007-2008 economic crisis leftist thought enjoyed a new currency, even in the United States, where socialism had been particularly anathematized. By and large used to refer to social democracy rather than a socialized economy in the sense discussed here, it did nonetheless constitute a significant break in the years preceding the time of this writing.

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On the "Conventional Wisdom"

The common understanding of the term "conventional wisdom" seems to be that it is, as Dictionary.com puts it, "something that is generally believed; prudence."

However, John Kenneth Galbraith, generally credited with coining the term in his classic The Affluent Society (1958) had a much more precise, much richer definition, which gets into the matter of just what tends to be accepted as such, and why, and what the conventional wisdom of his moment actually was.1

The conventional wisdom is accepted because it is what is acceptable to its adherents (8), accommodated "to the audience's view of the world" rather than "the world that it is meant to interpret" (11). Implied there--more than implied--is that rather than being based on the most rigorous examination of all the known facts, it is a matter of what is convenient ("what most closely accords with self-interest . . . promises best to avoid awkward effort or unwelcome dislocation of life" (7)), flattering, easy to understand (no one likes social or economic complexity), and after the passage of time, familiar to that audience--so much so that its very utterance is reassuring, comforting, ego-affirming, an intellectual life "raft" (7) on the stormy seas of life.

Indeed, repetition of the conventional wisdom is virtually a religious rite (10), while just like religious rites tend to be, it is a source of "inertia and resistance" (16) to the acknowledgment of inconvenient facts and truths, let alone serious grappling with them; outlives any usefulness it may have had as an alternative to the confusion and chaos of an utterly uncontrolled and unmanageable flow of ideas (16); and never surrenders, but only dies (12).

Galbraith makes clear that the conventional wisdom changes over time, that there may be more than one conventional wisdom operative at once (for example, a "liberal" conventional wisdom and a "conservative"), and that it may be "articulated at all levels of sophistication" (for example, in both intricately scholarly and crudely mass audience-oriented renditions of the same idea). Still, by and large the conventional wisdom for society at large--like the conventional wisdom he sought to challenge in that particular book--was that of the comfortable, mainstream, respectable, whose received, generally unexamined, commonplace views, defined above all by their congeniality to the maintenance of their immediate, selfish comfort, are the "mainstream, respectable" ideas.

Robust as Galbraith's discussion of the matter in The Affluent Society is, I still find it useful to refer also to his much later book The Culture of Contentment (1992), about the titular "contented" with the status quo in American life. As he observed, they were untroubled by problems not distressing them personally in the here and now, callous toward others' misfortunes, which they justify by blaming those others for their lot, insensitive to questions of justice, the well-being of the community or the public as a whole, or the long-term at any level; fearful and resentful of any suggestion that might even slightly diminish their comfort; and inclined to inaction over action in dealing with the larger problems of the world. ("Never do today what you can put off until tomorrow; better still, never do it at all.")

The "conventional wisdom," one might say, is how a George F. Babbitt or Archie Bunker sees the world.

Especially coming from the left-liberal Galbraith, the term was rather pejorative. But that is a far cry from saying that made it unuseful--rather more useful, in fact, than our bland, mildly approving use of the term today (i.e. as a synonym with prudence), arguably in itself a reflection of progress giving way to regression.

1. Chapter Two of The Affluent Society, which starts on page six, is actually devoted to explaining the concept in depth and detail because, to his credit, it was the conventional wisdom that he challenged in that book and its follow-ups (The New Industrial State, Economics and the Public Purpose).

On "Convenient Social Virtue"

John K. Galbraith first presented the concept of "convenient social virtue" in his book Economics and the Public Purpose--the work that capped off decades of study of the shortcomings of economic orthodoxy as descriptor of or source of solutions for mid-century American life with a social democratic vision for America. There he explained "convenient social virtue" as the presumed "meritoriousness" of "any pattern of behavior, however uncomfortable or unnatural for the individual involved," that is "advantageous . . . for . . . the more powerful members of the community."

One can describe this, as essentially, the demand of the powerful that others quietly defer to their superiors and offer no resistance to their exploitation and misuse because of the presumption that this is right, proper, moral conduct--such that, instead of asking for the material compensation properly due them, or even a measure of genuine respect, they can, at most, be fobbed off with a few words of pious praise for their "good service." Meanwhile, those who refuse to render the service, or demand more than such praise for that service, are subject to "righteous disapproval or sanction" for their "inconvenient" behavior.

Consider, for example, the difference between the way doctors are treated, as opposed to the way nurses are treated. That doctors expect very high compensation for their work is regarded as natural, and society generally does not think it is unseemly when they stand on such a demand. By contrast, nurses who demand better pay or conditions are condemned and even demonized in much media coverage (as in Governor Schwarzenegger's California).

Today where the term "conventional wisdom" remains in use, albeit quite a different use than Galbraith intended, "convenient social virtue" fell by the wayside. This is partly because of the way the book in which Galbraith presented the term has been marginalized--the work summing up his research, thought and proposals even more ignored than those that led up to it. However, it is also a reflection of what led to that work's being so ignored in the workplace. Where "conventional wisdom" was turned from a powerfully critical term into an innocuous or even flattering one, it is difficult to think of "convenient social virtue" being redefined as anything but a criticism of inequality and exploitation in need of redress--a thing with which the conventional wisdom already had little patience then, and rather less now.

Which is exactly why we need the term now more than ever.

Review: Crashed: How a Decade of Financial Crises Changed the World, by Adam Tooze

New York: Viking, 2018, pp. 720.

In Adam Tooze's Crashed the crash of 2008 was not a mere subprime crisis from which America recovered, even as general disruption and downturn helped dip Europe into a sovereign debt crisis, in respects more severe but also largely resolved--a case resting in part on a very different understanding of just how the world economy works. As Tooze takes pains to make clear at the outset, it is not the national balance sheets that get so much attention but corporate balance sheets that are the scene of the "real action"--and in this case particularly the oligarchy of twenty or thirty globally significant banks. Moreover, this oligarchy was not national but thoroughly international. Rather than Wall Street and the City of London being separate nodes, they are complexly intertwined, with the City of London long shaped by American bankers in the London offices of Wall Street firms, while the policies they helped craft there influenced America's in turn (the repeal of Glass-Stegall in 1999 foisted on the American public in the name of retaining Wall Street's competitiveness with London). In its turn the City was a key point of interconnection between the American and European financial systems more generally, which can usefully be thought of as a single trans-Atlantic system.

Indeed, 2008 was at bottom a crisis of private banks rather than nations, and a trans-Atlantic crisis rather than an American one, as Europe's bankers equally generated a continental real estate bubble while putting their money into the toxic assets American firms generated.1 Moreover, after Europe's banks got caught up America's woes, they benefited substantially from the American bail-out, as much a bail-out of the European banks as the Americans (which extended as far as "swap lines" in which the Fed provided Europe with much needed dollars in exchange for Europe's currency). Subsequently the United States played a considerable part in the management of Europe's "own" crisis--underlining the continued predominance of the U.S. in a world where there is still no substitute for the American dollar or American Treasury bills as a safe asset to hold. Beyond establishing the thoroughly private, and thoroughly transnational, trans-Atlantic nature of the crisis, Tooze emphasizes that it did not end (as he had himself thought was the case when he started writing this book back in 2012), but that its effects continue to reverberate through the world economy and political life even a decade on, connecting it with the intensified internal stresses evident around the world, and the heightening of international tensions that has followed from it.

In approaching this material the main the book provides a chronicle of the conduct of government officials and central bankers in the United States and Western Europe as a whole, with occasional glances at the unfolding of smaller or related portions of it, like the crises of Ireland and Greece, and to a lesser extent, North Africa, Russia or China--more like The Deluge than The Wages of Destruction in its accent on diplomatic history rather than economic nuts and bolts, and it is in some ways a problematic approach.

Tooze's tracing of the players' machinations is lucid, and serves his purpose of demonstrating the trans-Atlantic and ongoing character of the current financial system and its crisis admirably. However, he is less successful in relating the smaller stories associated with it. (Just how, precisely, did Greece amass its sovereign debt? The matter is treated cursorily and conventionally, and alas the conventional answer is deeply unsatisfactory.) More significantly, Tooze provides only limited insight on the deeper roots of the crisis that he acknowledges lie back in the 1970s, let alone providing a real critical standpoint. Appalled as he may be by what was done to save the financial system, the sacrifice of Main Street to save Wall Street, so to speak; and the starkly undemocratic, anti-democratic character of policy and its justifications (exemplified by German Finance Minister Wolfgang Schauble's brazen declaration that "elections cannot be allowed to change economic policy"--shades of Continuum, that); he implicitly accepts that "There Is No Alternative" to what was done. Consequently, while I do not think Tooze "misses the forest for the trees," describing the individual trees is mostly what he does, so that it is easy for a reader of this book to do so, and he may be due more credit for providing substantial raw material for the study of those issues than supplying such a study this time around. All the same, what the book does right is a considerable feat in itself, ample to justify yet another addition to the vast body of work already existing on the subject, and well worth attention from anyone seriously interested in a crisis that he is right to treat as still unfolding.