There’s a new New York Times Opinion essay about the US turn away from neoliberalism. Twitter thread versions of the piece here and here.
I don’t really have any big point here except maybe a frustration about all the arguments that get tangled up in a topic like this. Here’s a sampling of the ideas in the piece: The claim that we’re turning away from the assumption that “What was good for markets was good for America.” Assuming this means financial markets, it’s definitely not true that what’s good for financial markets is always or even usually good for America. So, yay, sounds positive.
Here’s another one: “The ‘new consensus’ has meant enormous state investment, directed toward industrial revival all around the postindustrial world.” I like it!
But then: “Five years ago, sanctimonious neoliberals mocked Donald Trump’s zero-sum view of the world as a kind of Dunning-Kruger geopolitics. But today, you hear few invocations among politicians or diplomats or bureaucrats of any truly universal positive-sum model of free markets or economic growth.” I mean… most trade pretty clearly is positive sum. Is anyone really claiming most international trade is zero sum? Anyone? Bueller?
It’s hard to add all these ideas up and take stock of where people stand. Did we change our views on trade policy? Or did we know all along that trade was usually net positive but had all sorts of possible ill effects that had to be mitigated (and that we weren’t mitigating them)? Do we actually think ‘Made in America’ clauses are a good idea? Or are we holding our nose because they’re popular? When topics like this get rolled up into these big new paradigm pieces, it can be tough to keep track. (I still like big new paradigm pieces.)
Anyway, hence the post clipping together my writing and blogging on a few of the sub-themes that come up here…
Center-left neoliberalism: Kinda good!
First off, neoliberalism can mean a bunch of different things. It can mean ridiculous laissez-faire conservatism which I have zero interest in defending. But to the extent that one wants to take on the Obama administration center-left liberalism version of it… that version I think holds up fairly well? I wrote about this here, tracing the Obama economic policy and grading it on two specific policy areas. (I will also say, though, that to the extent neoliberalism is about fealty to markets, that’s not the right perspective. The whole game here is about reinventing the mixed economy.)
Free trade: Also kinda good?
One big frustration I have here is that it’s hard to tell which parts of the previous economic consensus on trade were actually wrong. Some areas of the US were hurt more by the China shock than policymakers suspected — though not necessarily more than economic models predicted. But as a general rule trade seems fairly positive if the right supporting policies are in place. My mind can definitely be changed, but I wish discussions of this topic were clearer.
Industrial policy: Also also good!
Governments should be more active in their economies, taking careful, evidence-based actions to boost productivity, steer the economy in positive ways, address climate change, etc. etc. I’ve been saying this for a long while. More recently I commissioned a whole series on industrial policy; this piece lays out the case nicely.
Political economy: ¯_(ツ)_/¯
I’ve long thought the best critique of center-left liberalism starts with political economy. Maybe a lot of these policies that seem good, and actually even maybe are good, don’t lend themselves to building and maintaining good political coalitions. Or maybe they seem good or start out good, but then get distorted and captured and so end up worse than the wonks predict. In the last year I’ve written two essays about this.
One was about the need to consider political economy and the idea that real-world policies are always second-best at best. The other was a review of Mancur Olson’s ‘The Rise and Decline of Nations’ which was republished for its 40th anniversary. I did a link roundup on other influences in this vein here.
Alright, that’s it for now. Onward, into the new, good-ish, deeply confusing economic era.
beyond the times 