Is There a Workable Alternative to Neoliberalism?

18 07 2011

Updated below.

Frustrated with the paucity of policy and politics in the ceaseless left/leftish-neoliberal debate, Matt Yglesias asks if there is a workable alternative to neoliberalism. Yglesias gets understandably frustrated with critics from the left who throw “neoliberal” at him and others as an epithet, using it as a synecdoche for “undercover conservative,” or “plutocrat.” Yglesias decries the lack of concrete policies and politics, and the tendency of the left to focus on theory, principles, and abstractions. It’s not merely a rhetorical maneuver on his part: it is true that the left, increasingly amorphous as its Marxist roots get buried under generations of shame and red-baiting aversion, doesn’t really have a policy home or framework that it can propose to displace the neoliberal consensus of which Yglesias is a professed member.

Here’s Yglesias in his own words:

I have no idea what it is that we’re disagreeing about. Neoliberals on this telling, favor progressive taxation. Non-neoliberals criticize this agenda as not politically workable in the long-term. And they counterpose as their alternative, more workable agenda, . . . what? Kevin Drum offers this effort:

I don’t know the answer either. But as I said a few months ago, “If the left ever wants to regain the vigor that powered earlier eras of liberal reform, it needs to rebuild the infrastructure of economic populism that we’ve ignored for too long. Figuring out how to do that is the central task of the new decade.” It still is.

So I really, strongly, profoundly agree with this. The moment someone comes up with a workable idea on this front, please sign me up. But if there’s no idea to debate, then there’s no idea to debate. Debating the desirability of devising some hypothetical future good idea seems kind of pointless to me.

This is too bad, because I think Henwood and I actually started out with a reasonably concrete disagreement on an important point. I think that better monetary policy, though hardly the solution to all of America’s ills, could do a lot to reduce unemployment. His view seems to be not just that a more thorough economic restructuring would be desirable, but that it’s strictly necessary to achieve recovery. In my view, that’s factually mistaken. Better monetary policy over the past several years would, I believe, have produced a much shallower and shorter recession and left progressive politics with a much stronger hand to play on all kinds of other questions.


Is there a workable alternative to a left-leaning neoliberalism that, after all, supports progressive taxation, redistributionism (through technocratic programs), and some baseline of regulation, including human rights regulations? I sense Yglesias’ frustration. I get the sense that in these debates Ygleasis goes between feeling like Luke Wilson in Idiocracy and the Elephant Man, shouting “I am not an animal!” at the babbling hordes. I can’t blame him in the least. Commenters can be nasty, and in an abstract debate the nastiness doesn’t provide much food for thought. As much as I loathe neoliberalism as an ideology, I don’t think its adherents are dupes of plutocrats or post-modern stand-ins for the Illumanti or whoever. Yglesias in particular is intimidatingly knowledgable and thoughtfully sympathetic to nearly every problem the left cares about. And frankly he’s right that recrudescent Great Society statism is not a viable alternative to leftish neoliberalism, mostly because it not only failed miserably but also begat neoliberalism itself. Socialism as practiced has been wholly discredited.

But there is a bit of legerdemain in Yglesias’ frustration: his insistence that the left offer a “workable” alternative. I presume he’s the arbiter of what is “workable.” As we saw with the health care reform debate (and the closing of GTMO, don’t ask don’t tell, the abandonment of EFCA and striker replacement, Bush tax cuts, etc., etc.,), “workable” may mean “something that is immediately politically feasible.” That of course is just setting the bar where the current consensus thrives.

Or, if “workable” means something that will poll test well, in other words be instantly popular, there is a similar problem. If major reform movements–from abolitionism to the labor movement to gender equality–simply waited until it was popular enough to win a plebiscite or pass the mystical, unreformable filibuster, nothing would ever change. The whole point is we need vocal leadership to fight for this fundamental change.

Does “workable” mean something that will be able to raise money from the big funders of the Democratic Party? That will win support from academia/think tank leadership? Same problem. You’re asking the left to propose something that will be acceptable to the current elites, which is saying offer nothing that is fundamentally different. Of course, what we need is something fundamentally different.

What’s an alternative to neoliberalism? Worker democracy. This would entail, for example, a state as active in protecting worker rights as it is in protecting property rights*; revising the en vogue Lockean concept of property; proportional representation; devolution of state power downwards. Dismantling the overseas quasi-empire. What are some specifics?

Scandinavian countries have no minimum wage. Why? Because the state privileges workers’ rights, and so freely bargained contracts provide the appropriate floor. In Germany, labor organizations can buy seats on corporate boards. This is illegal in the US. In–well, in basically all of the Western world (plus Montana) there is no at-will employment. Mondragon has grown robustly as a worker-run collective, making many people very rich, staying dynamic and creative, and ever-expanding. How about revisiting the very theory of property that is foundational to neoliberal economic policy**? There is evidence that these solutions are workable in the sense that they won’t lead to mile-long turnip lines. Of course they aren’t going to win a filibuster-proof majority–but does that mean we shouldn’t advocate for them, organize for them, think strategically on how to achieve them?

These specifics all stem from the idea that workers’ ability to bargain collectively is inviolable, and that meaningful worker participation in management of the economy is desirable and valuable. The natural constituency for such a movement is the hundred million or so Americans who work for a wage. Seems promising.

Pie-in-the-sky? Unworkable? Consider the example of neoliberalism itself. The Mont Pelerin Society was a masturbatory group of wild-eyed intellectuals and plutocrats when it was formed in 1947. They “made no small plans” to quote local bulldozer Daniel Burnham. Now, a mere two generation removed, their germinal neoliberal ideals move governments, shatter empires. Yglesias may be concerned that espousing anything instantly unpopular will marginalize the left, which may be true in the short term. I don’t criticize left-leaning neoliberals because I think they’re secretly conspiring with a cabal of billionaires, nor do I question the political expedience–or workability–of their policy proposals. But being constantly told that proposing something fundamentally different from the current landscape is unserious, impossible, or pie-in-the-sky is not engaging in a debate. It’s the filibuster defense. “That’s a nice dream policy, but good luck getting it through the Senate,” is infuriating. In other words, only what is acceptable right now is meaningful, everything else isn’t worthwhile because it is not “workable.”

Isn’t that what “change” and “hope” are about after all? Not message-testing to react to what the public will accept today, but building a movement that will challenge people to think critically and change their minds? That’s what organizing and leadership is about. In its incipient stages in this country, the labor movement was dismissed as cabals of “trouble makers” from foreign shores–the Irish first, then the Italians, Jews, and Slavs–who just needed to brush up on their Horatio Alger. They were “anarchists” who wanted to bring down America, to hand it over to the Bolsheviks. A lot of people died–many more suffered unimaginable material discomfort–to engage the debate and change minds.

There are of course workable alternatives to a neoliberal regime, and the fact of the matter is that it has to start with a theoretical debate because many of the assumptions that underlie Yglesias’ own policy studies are far from established. The efficacy of markets itself is not proven beyond a reasonable doubt. The exasperation of income inequality, the explosion of personal consumer debt, the skyrocketing costs of the very higher education that is supposed to save us all, even the advantages of “free” trade–which has seen income inequality grow between poor and rich, not narrowed***–at the very least suggest that “efficacy of freer markets,” Lockean property rights, and the rational, creative power of capital are not wholly reliable premises. Neoliberalism has had at least 20 years, and more like 40, to show its miraculous ability to allow spontaneous order to create a more just and equitable society. At the very least, results are not persuasive, much less conclusive.

Is it pie-in-the-sky to say that a state that pursues worker democracy with as much gusto as we currently pursue “market solutions” would see inequality narrow, wealth grow, human satisfaction flourish? Maybe. But it is just as pie-in-the-sky to say that “freer” markets will always best distribute human needs, rather than just recklessly exploit human wants. Is a movement built around worker democracy and some degree of social sovereignty over property not “workable” merely because it isn’t currently popular? If that is the case, then we’re looking at savvy Panglossianism–“All is for the best, in the most workable of all possible worlds.”

Update: Yglesias and I had a short tete-a-tete on Twitter today (alliteration unintentional but welcome) in response to this piece. He argued that I wildly misunderstood his point, and even if I didn’t, my idea of what was “workable” was way off point. Of course, I anticipated that misunderstanding in the piece itself–what is “workable” is so wildly debatable. In any case, I never underestimate my ability to misunderstand the points of extremely smart people, so I asked for some clarification. Yglesias put it this way:

@ramsincanon Right. I’m looking for a concrete, specific agenda to achieve that goal rather than doubling down on the aspiration.
@ramsincanon “Workable” means policies that if enacted would achieve their intended goals.

I suggested federal spending to lower unemployment, along with massive labor law reform that would encourage meaningful employee participation in their workplace and the economy in general. Yglesias didn’t respond, so I won’t impute anything, but it may well be that he simply does not think such a program would achieve any worthwhile political or economic goals, or that these things are not “workable” in the sense that they are not currently feasible. But again, this goes back to whether we should only be thinking about what can get accomplished today, or building the infrastructure for a sustainable, long-term movement (which is exactly what neoliberals did). No, I don’t think abolishing the American stricture against labor participation in corporate governance is going to pass the current U.S. Senate, but so also the privatizing of everything was not realizable when neoliberalism first coalesced as a thought movement in 1947. As I said in the piece, if we gauge what we should work towards building based on what will win Democrats elections next year, we’ll never be able to build anything. We’ll always just be pumping money, resources, and talent into a rudderless election machine with a raison d’etre of “Feh, the other side is worse.”

Unions spend hundreds of millions of dollars every election cycle electing politicians who do little to help them and less to lead on their issues with the public. Progressive activists and rank-and-file union members expend hundreds of millions more, if not billions, in man-hours and cash getting them elected. If even a fraction of those resources could be shifted behind a comprehensive program for true democratic participation in the economy, it could be a matter of a generation before we could start to see the public discourse shift away from the right.

But first, you have to believe that democratic participation in the workplace and a state activist in its protection of workers’ property interest in their work is valuable in and of itself, as well as a force for a more responsible social and economic policy regime. If you don’t think worker participation and democracy can reduce inequality and raise the quality of life for average people, then of course none of this seems workable.

The reason worker participation is so important is because it redistributes in the workplace rather than through the state, in a way that compels individual workers to consider their own best-interest in the context of their employment. In other words, the employees of the Mondragon Corporation elect their managers and determine pay rates and have an incentive to ensure that the cleverest and hardest working have an incentive to move up–because they want the firm to thrive and grow. It is also why they elect to pay for professional development, scholarships, child care, etc. When that redistribution happens in the workplace, you can both increase aggregate demand by increasing income for the working class without the third party of state technocrats deciding how tax money coerced from top brackets can best be spent. Instead what we have is wealth accruing, and a savage fight to drag to nickels out of the top brackets, and then incessant decisions on how to spend that money–that is, what’s left over after funding our unnecessary wars. That is not sustainable.

*For a discussion of neoliberalism and the convenience of “property rights,” see this post on Kelo v. New London.

**Post-colonial states, and states in transition, particularly in Africa, deal with this “theoretical” issue constantly in their problems figuring out how to redistribute land after the collapse of colonial or kleptocratic regimes. In South Africa, the debate is central to post-apartheid governance.

***According to the 1999 “Human Development Report” from the UN, the income disparity between the world’s top 20% and bottom 20% has grown from 30:1 in 1960 to 74:1 in 1997–though we have created a lot of billionaires and millionaires where once there were none. This is not of course a decisive fact, but one that needs addressing.


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20 07 2011
Small-R Republicanism and the NeoL-word | Ned Resnikoff

[…] one thing we should learn from the progressive blogosphere’s ongoing debate over neoliberalism, it’s that these intramural differences over fundamental values can have significant […]

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