Rakesh Bhandari Challenges Me on þe Fall of þe New Deal & Rise of þe Neoliberal Order
And I equivocate in response
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FIRST: Rakesh Bhandari Challenges Me on the Fall of the New Deal & Rise of the Neoliberal Order, &
Rakesh Bhandari: Challenge to DeLong about how he explains rise of neoliberalism
His idea that it was to maintain rising living standards contrasts with Kotz’s that it was to address falling profitability & Piketty’s that it was an Anglo-American elite response to their declining relative position. In short, there are Marxist/class-based explanations for the rise of neoliberalism that contrast with Brad’s. It could be an interesting conversation to have. I am referring to Thomas Piketty’s Capital in the 21st century <https://archive.org/details/isbn_9780674430006> and David Kotz’s The Rise & Fall of Neoliberal Capitalism <https://hup.harvard.edu/catalog.php?isbn=9780674980013>.
Brad DeLong: My neo-Polanyiesque framing of the long 20th century in Slouching Towards Utopia <bit.ly/3pP3Krk> commits me to a deeper explanation of the rise of the Neoliberal Order than simply "the revolt of the haves”. My interpretation has to be that the version of social justice offered by the New Deal Order—full employment, strong unions, public provision of both public goods and private commodities for free over a wide range, and a highly progressive tax-and-transfer system—was sustainable as long as economic growth was high and prices stable, but not otherwise.
The first speed-bump with respect to real income growth and inflation brought to the fore the complaints about the New Deal Order’s version of social justice:
It treated unequals equally—especially African-Americans getting above themselves and wanting “preferential treatment"
It failed to make life for the lazy and shiftless difficult enough—people who were not hard-working ought to be more miserable than they were.
It failed to offer sufficient respect to those whose success in the marketplace gave them warrant to demand such respect.
In short, the New Deal Order made social power too equal: it was held by people by virtue of their status as citizens plus their after-tax wealth. But society—at least in the form of its public-sphere megaphones that could command legislative majorities and cultural hegemony—saw social justice as requiring that some citizens have more social power than others by virtue of ethnicity and cultural heritage, and that property inequality-generated divergences in social power not be too greatly—and unfairly—curbed
Otto von Bismarck in the late 1800s maintained his rule by saying:
The liberals believe that only private property should be a source of social power—and you poor do not believe that, but rather that community and tradition should be sources too. So you belong with us.
The socialists believe that that social power should be equalized—even to the extent of giving an equal share to Poles, and Frenchmen. So you belong with us.
Just the “revolt of the haves” would not have been enough. It was a lot of have-nots believing that the haves should have more; and that somehow the New Deal Order’s belief that the haves should have less undermined their own status derived from the little they had managed to attain.
In some ways this—unequal status-based social power is more “socially just” than less-unequal market-plus-redistribution—is datable back to 1848, or even before.
Cf. Tocqueville, “Souvenirs”:
In the country all the landed proprietors, whatever their origin, antecedents, education or means, had come together, and seemed to form but one class: all former political hatred and rivalry of caste or fortune had disappeared from view. There was no more jealousy or pride displayed between the peasant and the squire, the nobleman and the commoner; instead, I found mutual confidence, reciprocal friendliness, and regard.
Property had become, with all those who owned it, a sort of badge of fraternity. The wealthy were the elder, the less endowed the younger brothers; but all considered themselves members of one family, having the same interest in defending the common inheritance. As the French Revolution had infinitely increased the number of land-owners, the whole population seemed to belong to that vast family.
I had never seen anything like it, nor had anyone in France within the memory of man…
Now is this all true?
The logic of me choosing my neo-Polanyiesque Grand Narrative as the structuring frame of my book on the grounds that it is the least-false Grand Narrative I can think of—having done that, I am then committed to this particular not “class” but rather “market vs. status” explanation.
But that my Grand Narrative is least-false in general for the Long 20th Century does not make it true for the Neoliberal Turn that was the collapse of the New Deal and the rise of the Neoliberal Order.
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Very Briefly Noted:
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David Leonhart: The Morning: Biden’s debt relief: ‘An attempt to find a middle ground…
Will Wilkinson: “It kills me every time I think about the fact that the first known written symbol for "freedom," the Sumerian ama-gi, which libertarians around the world have tattooed on themselves, actually means "debt relief." I love it so much…
Alexandra Petri: “I look down at the face of my sleeping child and I vow: If this baby’s life is even one particle easier than mine was, I will burn this whole place down!
Rachel Leah Siegel: “Jesus Montiel relies on energy drinks to get from his mobile home to his job at Teton Toys, some 90 minutes away along winding canyon roads. Sometimes, he doesn't make it home to his wife and 2-year-old daughter, choosing to sleep on friend's couches in Jackson to save on gas…
Jonathan M. Gitlin: California calls time on internal combustion engines from 2035
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Ben Casselman: ‘The divergence between GDP and GDI is remarkable. In theory, the two should be identical -- they measure the same thing from opposite sides of the ledger. Any differences are due to measurement issues. Yet they are telling totally different stories about the economy right now…
Josh Barro: Republicans' Other Dobbs Problem: ‘The Republican base is pleased about Dobbs. But the base always turns out to vote for you — that’s what makes them the base. One of the reasons Donald Trump was able to win in 2016 despite alienating large numbers of traditionally Republican voters in upscale suburbs was that he brought out so many new voters who weren’t traditionally part of the Republican base…. Bill Clinton did well with these voters at a time when Republicans were seen as moralizing scolds who wanted to take away your Medicare. Trump won them over by emphasizing opposition to immigration, abandoning unpopular Republican economic planks on Social Security and Medicare, and defending their “traditional” values against a snobby elite without projecting a religiously conservative moral worldview…. The key problem for Republicans is that a lot of non-base Trump voters are pro-choice. Even some of the ones who call themselves pro-life are, when push comes to shove, pro-choice
"In short, the New Deal Order made social power too equal . . . "
That's a deeply depressing summary, but I feel like it doesn't fully answer the question.
It's unsurprising that the New Deal coalition would eventually falter and that, among various possibilities for "what comes next" backlash would be one of the threads. But the real question is why did neoliberalism become a political order (with "the ability to shape the core ideas of political life... not just for one political party’s most ardent supporters but for people located across the political spectrum.")? Why wasn't the New Deal followed by a political environment like we see today in which there was no single winner?