Grasping Reality on TypePad, by Brad DeLong

Hold It!: Wasn't America Governed by Political-Economic Ideologies Before 1975?

• No
• There were strong ideologies:
  • Jefferson's agrarian ideology
  • Madison's (early) small-government ideology
  • Calhoun's Herrenvolk ideology
  • Lochnerites--the claim the Constitution imposed Herbert Spencer's Social Statics
• But they all lost in the great political-economic scrum
  • Hamilton overcame Jefferson
  • Even Madison and certainly Madison's successors overcame Madison
  • Lincoln overcame Calhoun
  • Teddy and Franklin Roosevelt overcame Herbert Spencer and the Lochnerites

What, Then, Did Govern America from 1787-1975?

• Pragmatism
  • Hamilton's state-led push for commerce, industry, finance
  • A very heavy governmental role in westward expansion--very bad for the Amerindians, very good for the settlers and the settler economy
  • Lincoln and his successors' push for the acquisition of capital--farm capital via homesteads, human capital via education, plus corporate capital
  • Teddy Roosevelt's Progressive curbing of overweening Gilded-Age power
• All of these were ruthlessly pragmatic: looking not at ideology as a guide but at the world, and what seemed likely to work to increase popular wealth

But the New Deal! FDR Was Ideological!

• No
• FDR's New Deal was the antithesis of ideology
• FDR tried everything
  • Corporatism
  • Keynesianism
  • Agricultural subsidies
  • Antitrust
  • Social insurance
  • Unionism
  • And he reinforced what seemed to work
  • The New Deal policies that survived became an ideology, but they started out as the most ruthless pragmatism
• And Eisenhower:
  • Highways, automobiles, suburbs, massive federal support for technology
  • But also fear of the military-industrial complex and a strong desire neither to break inherited things from the New Deal the worked
  • Eisenhowerism was, as Daniel Bell wrote, an attempt to institutionalize the permanent end of ideology

So What Has Gone Wrong in the Past 40 Years?

• Belief that the inflation and oil shocks of the 1970s demonstrated that Eisenhowerism was tapped out
• And the fault laid to insufficient love of the free market (and excessive big government)
• Hence the big push for:
  • Spending two Pentagons on excess wealth for our overclass in an attempt to give them "incentive"
  • Spending a Pentagon on excess health care administration and excess unnecessary and harmful treatment
  • Deregulation and financialization leading to a Pentagon's worth of waste in over-financialization
    • Is corporate control better? Is risk-bearing more advanced?
    • Plus two additional Pentagons' worth of waste in permanent damage from the financial crisis
  • The only rich capital-inflow economy in history
    • A really rich country should be exporting capital
    • And leveraging its innovative, intellectual, and human-capital expertise over ever-growing communities of engineering and entrepreneurial practice
      • To some degree, we have been doing the second
    • But we have been letting "the market" greatly reduce the scale
• From the middle-class perspective, 8 Pentagons worth of waste over the past 40 years--all of them driven by ideology (and interest)

What to Do Next?

• All such books are supposed to end with: MY PLAN
• We refuse: such "my plans" are never convincing
• What we do seek to convince you of is this:
  • The world is a complicated place
  • The world surprises you--and the more bound you are to your ideology, the more you will be surprised
  • Feedback and pragmatism are better than ideological oversimplifications
  • Arguments against policies of the form "this breaks ideological principle X" should have much less purchase than we give them

Today That Principle Leads to a Total Rejection of the Republican Party and All of Its Works

• But that fact is a judgment on the Republican Party as it is currently constituted
• And whatever parties we have in 30 years will be equally vulnerable to ideological viruses--as vulnerable as were jefferson, Madison, Calhoun, the Lochnerites, and more recently the Bushites, Cruzites, Rubites, Gingrichites, and even the Kasichites.
• We need to defeat them and be pragmatic--with Hamilton, the later Madison and company, Lincoln, Teddy and Franklin, and Ike...