On Nicholas Lemann's Partial Recantation of His "Neoliberalism": Hoisted from the Archives

Il Quarto Stato

2014: On Nicholas Lemann's Partial Recantation of His "Neoliberalism": On the career of the Washington Monthly: Nicholas Lemann: A bygone age…:

In... 1976... our mission was to help [Jimmy] Carter make liberalism, the country’s reigning creed, function better. Our name for this project was neoliberalism.... The Monthly was always more about an idea of the good society.... Theodore Lowi’s The End of Liberalism... an attack on liberalism from the left.... directed at... “interest group liberalism”.... The prospect of replacing interest group liberalism with something that was better targeted at the needs of the country, and also more effective, was deeply alluring.... Deregulating industries, using the power of markets to make government work better, embracing technology, targeting government social programs on people who really needed them, helping consumers rather than politically connected businesses, taking down trade barriers, reducing the power of the Democratic Party establishment and the labor unions, orienting government toward the public interest rather than toward interest groups—all of this was our dream....

Our scorn for interest group liberalism led us to undervalue the process of people organizing themselves and pushing the political system.... We failed to anticipate the way that eliminating all those structures that struck us as outdated... would almost inevitably wind up working to the advantage of elites more than of the ordinary people.... The frictionless, disintermediated, networked world... is great for people with money and high-demand skills.... It’s a cruel irony... that our preferred label for ourselves, neoliberal, has come to denote political regimes maximally friendly to the financial markets. I’ve come to see the merits of the liberal structures I scorned in my younger days...

When I call myself a card-carrying neoliberal, it is indeed with reference to Charles Peters's and Nicholas Lemann's neoliberalism: shaping private incentives and using market means to achieve social-democratic ends. These seem to me to still be completely right and good:

  1. Most of the time the best way to accomplish social-democratic ends will be to get the money to the people who maximally want those ends accomplished, and then let them spend it.

  2. Most of the time the best way to correctly manage the market system so that it doesn't rain destruction upon the land is to impose the appropriate anti-destruction-raining Pigovian taxes (and subsidies).

  3. Most of the time command-and-control is strictly dominated by other modes of government intervention that are less vulnerable to naked rent-seeking by the politically influential.

But there are other parts of even Washington Monthly neoliberalism that were and are very ugly. Somehow, however, Charles Peters and Nicholas Lemann and company got themselves caught up in the idea not that people should be mobilized to vote and organize and lobby not for causes that were in both the public and in their interest--good for America and good for General Motors--but rather that there was something bad and corrupt about that.

Instead, they focused on their belief that--for some reason--people should be mobilized to vote and organize and lobby for causes that were in the public interest but that did not personally affect them.

Hence the enormous Washington Monthly disdain for politicians like Lyndon Johnson and Tip O'Neill.

Others are not wrong in taking the core of "neoliberalism"--even the neoliberalism of Lemann, Peters, and company--as being the gleeful destruction of the pieces of countervailing power that maintained the relatively equal (among white males) distribution of income of the era of social democracy.

In this, I think, Charles Peters followed Che Guevara. In Guevara's mind, the people of Cuba were to build a new society and harvest ten million tons of sugar. Why? Not because there was something in it for those of them who worked the hardest. But just because. Picking Ralph Nader as your hero and your model was not a very smart thing in the long run...