Discussing right of center post-liberal economics without discussing American Compass is a little weird? Like, no one is out here claiming that Deneen's the go-to-source for post-liberal economics. Not that interesting to dunk on his views there, he's just such an easy target that this ends up feeling like a puff piece.
A more interesting article from an historian like Phil would have been to start with Gary Gerstle's framing that we're coming out of the neoliberal political order and ask what that means for left of center economic policy. For example, should liberal democrats continue supporting tariffs on China, or strict I9 enforcement and mandatory e-verify? If not, why not? Can liberals come up with a "worker-centered" economic, trade, and immigration policy that isn't just rehashed neoliberalism? The Abundance Agenda, for all it's virtues, is definitely not a self-consciously worker-centered program. They'd happily accept cheap labor and material imports from China and Latin America if it meant we could get more high speed rail, houses, solar energy, cheap medical assistants, etc. Americans might want those things, but the upper quintile is the only group that wants them more than they want to protect blue collar jobs.
If we look back in party history to the 80's and early 90's, the group that Henry Tonks calls the "new liberals" were actually explicitly interested in doing protectionist, state-sponsored industrial policy in order to compete with Japan. When Japan's economy crashed, this interest dried up and they resumed status quo governance. But here we are 30 years later post-realignment and the right has taken over both that platform, and its constituents.
We liberal democrats need a better response to the right-of-center post-liberal's arguments, but I'm sorry, this uncharitable dunking just ain't it. Phil's three paragraphs characterizing the post-liberal argument are accurate enough, but he doesn't really engage with the argument on its own terms. It's a good piece, but we need to keep exploring this line more rigorously and charitably. The story is too interesting and influential to treat this dismissively — that'll only backfire.
One of the chief issues is that lower end jobs (blue collar) don't pay enough to get you a decent life, and making things cheaper and more abundant is a way to allow them to afford things. If we allowed the importation of chinese cars it would put pressure on American firms to improve their products, and if they can't compete, fail so the capital invested in them could be redeployed to more productive places. The amount of people that would benefit from incredibly cheap but still good quality cars would be a much higher number than the tesla employees that lost jobs.
the crisis of the American car industry in the late 20th century was not a product of unions or worker demands (unions do in fact exist in japan and korea and especially in europe) it was a crisis of 1. quality 2. price competition and 3. bad industrial design/inefficient production lines. American car companies had to change the way they approached these 3 things to compete.
now of course, as I assume your greater point is that the social friction and other negative (particularly localized ones) effects of these events causes bad political outcomes for the country so we can't just write these people off as sacrifices to the capitalist engine of creative destruction.
the synthesis here is something that China in large part is already doing. set goals, let private companies duke it out to meet those goals in a hypercompetitive environment which keeps prices low and innovation high, and when invariable many of these companies fail quickly pivot the capital directly towards a new endeavor that can utilize the labor. who cares if the factory or lab you worked out goes out of business if 10 more opened this month.
what china doesn't do is have a good social safety net (they instead use government direction of private enterprises to make up the difference), and that's one thing I think would be a good addition to the cycle.
The auto industry is a good case study. A huge part of how the US overcame those competitive pressures from Japan was through import quotas and on shoring agreements with domestic training and tech transfer requirements. For Toyota to sell into the US market they basically had to train us up.
I’d love to see us do the same with the Chinese EV industry. But we can’t give up on autos all together because it’s just too critical for maintaining the know-how needed to sustain a broadly competitive defense industrial base.
Protecting particular sectors not only matters because the outputs are strategically important for supply chain resilience, but also because making those things produces certain kind of know-how that makes your labor force more competitive. That’s part of the Dan Wang story for how Shenzhen became the world’s advanced manufacturing powerhouse.
Making things matters. Not just for economic and political macro stability, but also at the micro level. These jobs are higher quality, and most technicians take tremendous pride in their work in ways that are qualitatively different than when they work in services.
Yes, we should tackle the cost side of the affordability equation — but I see a lot more impact here by tackling the rents that accumulated during the neoliberal era. And that’s actually the Abundance position if your of the Niskane / Teles/Lindsay inclination.
Re: outputs for competitive defense industrial base. Car manufacturers and car factories aren't really as useful for defense production retooling as they were in the past. The technology and specialization required to make a modern tank is much greater than it was even 50 years ago. Really the only way they map at all these days onto defense production if they are firms with complex supply chains and people who understand manufacturing and complex supply chains are good to have around....but they could be doing a ton of other things than just making extremely mid SUV's and oversized pickup trucks. Batteries for example!
One sector this IS true for is Aerospace and shipbuilding. And the United States fundamentally is not willing to spend the kind of money other states did to subsidize and develop a shipbuilding industry like east asian countries were/are. We DO spend that money on plane building, but even that is slipping as Aerobus is eating boeings lunch (I think a lot of people that think you can't make a successful european country should read up on Aerobus because they are legit an incredible success story)
Personally I think the U.S. government should be way, way more involved in the production of basic industrial inputs. The U.S. steel industry is a Potemkin industry literally only kept alive by tariffs and nostalgia. Nationalize it, close all the old inefficient and costly plants and just build new ones so provide cheap subsidized steel to American industries/construction. Theres some really smart boys in Boston right now that came up with a way to make steel using just electricity. Hook some of those new furnaces up to nuclear power plants, and badabing. People rightly mock the idea of government made iphones, because they would suck and also iphones are not a strategic resource, making steel (or other strategic materials) is a strategic resource while also being something that the government absolutely could reasonably accomplish.
To clarify — it’s not that making cars is important so that the factories themselves can be repurposed to make tanks like they were in WWII, it’s that making cars is important because it upskills your labor force so that you can start making more and better new things.
I don’t know how familiar you are with the labor market for mechanical engineers and technicians in the US but experience at Tesla or SpaceX or Blue Origin or Boeing or Ford helps a lot if you want to work at XYZ drone or EV startup.
The iPhone example is illustrative because if we did make iPhones here, and subsidized their production, we’d get an up skilled labor force with a lot of transferrable technical knowledge that we could use to build more drones, EVs, robots, etc.
Really hard to sustain a cutting edge, high-volume defense industrial base if you don’t have a big talent pipeline of techs and ME’s who have mastered the requisite skills working on less sexy things. That’s the lesson of Shenzhen.
But the thing postliberals fail to understand is pushing to keep manufacturing on-shore means intentionally making manufacturing jobs worse. Both Germany and china have been able to maintain large domestic manufacturing bases, but both are tilting their economies toward investment vs. consumption to do so, because lower wages/consumption make locating factories there more attractive.
So the “good jobs” rationale for industrial policy is in direct tension with the national security rationale, because a well paid industrial workforce is by definition less “efficient” from the perspective of investment/capital.
And even with all these steps to maintain industry, Chinese manufacturing employment is flat or declining, so perhaps their industrial policy is highly successful for national security, but as a jobs program it isn’t. But industrial policy/postliberal advocates always posit protectionism will do both. The whole point of a “good job” is the things it allows you to consume, which postliberals decry as decadent.
Only if there’s a fixed supply of production and labor. In reality, when each individual factory can employ fewer workers and pay them more thanks to automation, then every one of them can be paid more — in theory — if we just had more factories and skilled workers.
Of course, that’s been the dream for a while and it’s hard to achieve.
Part of the problem is that it’s very unclear what a post-liberal economics or politics would actually be. Whenever governments actually do anything illiberal advocates shrink from endorsing it, and when they’re asked for their own recommendations it’s this kind of “liberalism but without my pet problems” thing. Back it the 90s there was this leftish post-liberal fad for “communitarianism” that was just as vague. You don’t hear about it any more for good reasons
I agree in this sense. A post liberal economics would end up trading off GDP for something else. That something else would, in good case scenarios, be more valuable than pure growth. So people might be happier, but growth would be going down or flat. So if there is any discontent about anything in society the (neo) liberal media says "there is unrest because of slow growth" and politicians say "it's the economy stupid."
But this is exactly why we need to find ways to articulate, give shape to, alternatives.
What might be a basis for such an economics?
We might start with European countries that have higher life satisfaction, and adopt policies they have even if they look bad for economic growth. We're not anti growth, but we aren't treating growth as an end in itself. If parents work less and spend time with their kids, which takes a transaction out of the market (paying less for daycare), we don't judge it as bad unless parents say they're unhappy.
I would be hard pressed to find a coherent understanding of liberalism is which European countries with higher life satisfaction are less liberal than the US. This is maybe an unexplained assumption in US post-liberal discourse. If we take the Nordic countries, for example, they have higher transfer payments than the US (although they are not as generous as Americans imagine I think) and more workplace regulation, but they have far less interference in specific industries, and Norway (outside the EU) has freer trade. I would argue that this type of welfare state, that is very consistent and non-distortionary, is more liberal than the US.
In reality, perhaps. I honestly don't know which countries actually adhere to the doctrine of free markets the most. And, I also agree that this could be a counter argument for the liberals. They could say the problem isn't liberal economics, it's that we actually aren't liberal enough. We only THINK we're liberal. But really the U.S. is full of state meddling, monopolies etc.
But this still raises the question of why the society that celebrates the market the most, which worships money, which obsesses about it's economic growth and which is the largest economy in the world, is so miserable. If that country can't fulfill true liberal market ideals, who can?
As for a model of truly illiberal economics, it occurs to me: isn't that China? China is a market economy, but not a free market. And moreover, its state intervention is morally coherent (or appears to be so). Everything is about making China strong and glorious. They ban all kinds of services that they suspect will be demanded but that they believe corrupt the character of citizens. The state has a heavy hand, but also, it relies on the informal power of shame. The government literally pays citizens to shame one another into the "right" ways.
So isn't that what Deneen et al could be imagining? The U.S. as a lite version of China, with Christian thought and churches as a certified commentariat instead of the Communist party. I would not want to live in that society, but I think they could propose a coherent economic doctrine. It wouldn't focus on growth, but on sustaining the nation. Slow innovation. Less wealth but less inequality. But not communist or anything. You just need all goods and services exchanged to be "blessed" by the moral authority.
So this is just my opinion, but if you look across US history the thing that distinguishes our economic organization isn't free markets but ruthless competition for economic advantages, by force when necessary. At a personal level, Americans admire self-driven success, even if its dishonestly come by (just look at the President). At a national level, the country has always intervened to help its winners, from the United Fruit Company to NVidia. "Free trade" in US propaganda is a way to say we don't help losers. This is distinct from, say, the UK or France where their industrial policy is very much about helping losers, or Japan and Korea where its about picking winners. The US will only help you if you're already winning.
This has always left a significant trail of people who feel they should have been among the winners but weren't, accompanied by resentment of people whose success they feel wasn't deserved. But this has gotten worse, as in more and more fields success only goes to a tiny number due to scaling, and in addition many people just lack the basic ability. This isn't unfair in any economic sense. A junior engineer working for Google really is adding massively more economic value than an elementary school teacher. But economic value is completely at odds with social value here. The elementary school teacher is, in a hard to define sense that I think almost everyone intuitively believes, a much more valuable member of society. This problem - increasing divergence of economic and social value - exists everywhere. But in the US because we tend to measure personal worth by economic market value its causing an escalating crisis of self worth.
To me this problem doesn't seem to be anything to do with liberalism really. Its a combination of a specifically American cultural trait, association of economic success with personal worth, with an economic trend, increased scaling in ever more areas of life, to produce a bad psychological outcome. I mean, I may be wrong about the problem. Maybe there's some other issue, but whenever I hear people talk about how bad things are it leads back in some way to scaling and the need to succeed.
Great piece but I think it fails to take seriously sources of real, cross-ideological dissatisfaction with modern life. In my view, much of this dissatisfaction comes from the incredible proliferation of addictive technologies/opportunities in America, which are not unrelated to liberalism and capitalism. If retreating from liberalism isn’t the answer (and I agree it’s not) then what can political leaders offer?
Theres this trend iv noticed amongst technologists and futurists where they point at graphs showing how poor and shitty life used to be before industrialization and modern methods of production while yada yada'ing the point that during the 19th century, when industrialization really got going, peoples health and lives were actually getting worse not better in many places which caused massive social upheaval. It required a conscious effort by society in the form of government actions, worker and other political movements, and more to actually turn the benefit from those innovations towards making better.
That is to say, new advances in technology are good IF there is a conscious effort to make the advances serve the greater good. It does not just magically happen.
The problem is we don’t really have good statistics before the late 18th century and when we try to use proxies critics (rightly I think) point out that they are not very good. I ages with you that generally the lives of the urban poor in particular in the early industrial era ware appalling. Much worse than those of peasants 50 years earlier. But that was a temporary and local phenomenon. If you smooth even slightly across time and locality, it disappears.
It wasn't just the urban poor, if you worked a mine in the 19th century (and before tbf), your life was likely to be short, terrifying, and generally awful. there is a reason many of the most radical workers movements came from mining communities across europe and the americas.
It was also these same mines that provided the literal fuel for the industrial revolution. To feed the machine owners were heavily incentivized to pay as little as possible, cut corners on safety, and respond to any strike or worker action with extreme brutality to keep them in line.
My greater point is that the fruits of technological progress are not evenly distributed by some natural force. We must deliberately distribute them or they will not help those they should be helping.
Do we know that this dissatisfaction reflects something real, though? If you review post-war politics there are really only two short interludes when people seemed generally content, in the late 50s and early 60s and then again in the 90s. Even those might be illusory. The baseline is actually a very high rate of dissatisfaction with politics but the actual problems laid at the door of “the elite” vary massively.
Focusing on Deneen’s economic rather than political-philosophic critiques is straw manning not steel manning the post-liberal critique.
Breezily equating a thousand-year tradition of Catholic social theology as Deneen’s personal aesthetic and cultural preference similarly straw-mans the post-liberal critique. It can also be turned back on liberals. Aren’t you seeking to impose your belief that maximizing individual choice is essential to the good life? This small-o orthodox Christian isn’t so sure about that and sometimes wishes that our social and political cultures weren’t so hegemonically ordered around liberal’s gospel truth.
Finally, the ad hominem about Deneen’s tenure is unbecoming of a Substack promoting itself as a strong defender of the best of liberalism.
I consider myself a liberal-completionist in that post-civil rights there aren’t (m)any issues that can be resolved by giving people rights.
I think most of the theory tying liberalism to a free market are pre-industrialization and should be discarded. Marx is more liberal than Locke in that regard (but not Lenin).
I cannot tell you how glad I am to see Phil Magness writing for The Argument. When you launched I appreciated the high quality of writing from the regular cast of characters, but I do feel like the magazine has lacked that more distinctly libertarian voice, or even center-right voices. As much as I love Jerusalem, Kelsey, and many of your guests, they're often out of a more neoliberal or pragmatic center-left perspective, so seeing Phil here to balance out Matt Bruenig is very exciting.
And what a fantastic essay this is, Phil has done a great job laying out the inherent flaws with the "Common Good" philosophy that truly is the ideological opposite of libertarianism. One of the more important passages is where Magness points out that the postliberal "common good" tracks very closely to Deneen's personal aesthetic and cultural purposes. This really is the animating factor for much of both right and left populism. Liberal capitalism has created a far more prosperous world and created a rising tide that truly has lifted up all those who it has touched. But it does require that, to make the most of it, individuals strive and make their own way. Opportunity is there, but no one will provide it for you. For those who do not see their own personal preferences manifested in the world, they view the world as having failed them, and thus seek to use the power of the state to enforce their personal preferences on society.
This, of course, will fail. The historical record and postliberal efforts so far have only reduced our prosperity, and have not produced a world that creates the "common goods" for those who cannot produce those cultural goods for themselves. But not only can postliberal redistribution not create a world that produces these things, a world of these common goods is a historical mirage. Phil so correctly notes that "disagreement over what that common good entails is entirely why liberalism exists in the first place". If you were nobility, perhaps the pre-modern and pre-liberal world was good for you, but for the vast masses you were not the focus of efforts to provide goods for the common people, they were tools to be extracted from by the elites of those societies. Before liberalism gave opportunity for fulfillment to the masses, if only they take it, the masses only had submission towards the will of others. The postliberal feels like a peasant in the modern world, not realizing they're closer to being a king than any of their ancestors. And they never imagine themselves as being the peasant in the older world they want to bring back - only the noble.
This delusion will wreck the world for all of us.
All in all, outstanding article, and a highlight among many fantastic essays The Argument has produced so far this year. Please, please do not let this be the last we see of Phil Magness.
I, too, will take a serious economist over a post-liberal crank any day. But economists have played a part in putting themselves in this situation. Over the past 50 years or so, the discipline became increasingly arrogant, insisting all questions could be answered by its methods and intimating its results were scientific in a way it knew deep down they weren’t. Ask the rest of the academy, left or right, how they feel about the economics department and they’ll tell you they value the work but wish it’d stay in its lane. Economics set itself up for this by over promising and under delivering.
I, perhaps in arrogance and/or foolhardiness, give very little respect by default to even the “thinkers” on the right. Even so, the fact that an alleged leading right intellectual just admits his whole bit is motivated reasoning from the outset is…stunning.
Some real galaxy brained stuff to go, “the first step of my philosophical argument is to proudly do a fallacy!”
And I know in modern internet arguing using formal/informal logic and “debate me” argument with fallacies and whatnot is considered loser stuff. But this guy is TRYING to be an intellectual; which is exactly the realm of these concepts!
Edit: I left the above as a spur of the moment thought before I forgot it. But as I keep reading I just can’t escape that Deneen is just…a moron.
That oil was the only fulcrum to pry us from the Malthusian trap is nonsense on its face. Something, I at least, literally learned about in high school.
But that’s nothing! The idea that the usage of oil as natural resource is, actually, unnatural to the human order. But it is alone among the history of resource and tool use because…reasons…I guess? Why not fire, or metallurgy, or written language, or electricity or…etc etc.?
I realize the point of this post is to show the flaws in this thinking. And while it has certainly accomplished that for me it seems that exposing these ideas, as stated here, to an even moderately well-read adolescent would have been sufficient.
So he's not allowed to argue that contemporary economics are missing something?
Isn't our national wealth per capita at an all time high, like in human history? And doesn't almost everyone in the country, both right and left, think the country sucks right now?? But economists don't have any work to do?
And not to defend Deneen more, which this article inclines me to do, but I was an econ major in the early 90s. We were instructed that everything was about seeking self interest. That this was THE KEY to "maximizing social welfare."
We read some paper, maybe by Gary Becker, treating marriage and family as contracts where each party tried to maximize its benefits over costs. I'm not Catholic, or particularly religious, but I think it's fair for those who are to think it was the neo liberals who over reached, first.
Everything except housing & medical prices (subjectively) feels fine right now from my view. At least one perspective held by someone on the center-left is "the current root of (almost all, possibly overgeneralized) evil is housing prices, which are clearly best solved by making the housing market *more* liberal and legally allowing people to build the kinds of things we want to live in"
I would strongly prefer that when I marry the bond be stable and more secure than one of us leaving at any time, but also... I do think it should be less than maximally hard to leave someone who is reneging on their side of the agreement in ways that are legally hard to prove, and I like that the rate at which women have committed murder has cratered now that they can legally leave horrible situations. My own parents are getting divorced currently but my reaction to their 30 year marriage being able to be broken cleanly & legally without a need to prove fault is "thank god"
Everything except housing and medical prices? I appreciate your optimism. The people I talk to are worried about the end of democracy! I'm serious, it's good for me to get out of my bubble.
That said, Americans mostly think the country is on the wrong track. And they also seem to despise their fellow citizens.
And while housing is probably harder to get than it used to be, is that really true of health care? Life expectancy in 1960 was about 70, now it's basically 80. Clearly HC costs have risen faster than GDP, but I'll bet the total gains in household income still outpace that.
So in 1960 , in America, most people were poorer than they are now and were not going to live as long. They got richer in the last 60 years, and spent a good portion of that larger income on healthcare, and got on average 10 more years on earth, too. But they're not as happy. Is that because of the economy?? Isn't it more likely because there's something they need that the economy can't provide?
On healthcare: luckily I don't interact with the system too much, but my most recent experience was having to pony up ~$500 out of pocket to see a doctor for <10min in urgent care, when I already knew exactly what the problem was (it's was incredibly obvious) and just needed go-ahead to get urgent treatment. Possibly everything worked as intended, but it still seems like *if* 10 minutes of wasting everyone's time is going to be legally required it shouldn't cost me $500 after insurance; either it needs to be cheaper or I need to be able to get meds for tonsillitis without a doctor. Though I could definitely believe it was worse in the recent past (I didn't live there so couldn't say), it's still a big pain point.
We do live in very different bubbles, which is interesting. I have a couple friends who are very worried, but the overall vibe among my in-person social circle is "business as usual" -- not happy about the political situation, but not actively thinking about it unless something happens to bring it up.
I hear you on this frustration. Our healthcare system is terrible in many ways, but my point is, not because of its economics, but because it's so confusing and forces people into those kinds of situations.
Why is it that way? Because it's obsessed with cost and profit. You must have some insurance plan that has maybe a high deductible and puts urgent care in that bucket. And then you can't just take prescription medicine without a visit etc. There's a toll taker at every step.
We could have a less efficient system, economically, that was easier to navigate and fairer overall. But it would not be efficient in the sense that some things that people use rarely would be much more expensive than they needed to be (for example).
This is kind of what they have in Europe. Every day care is cheap and easy, and they just don't offer some of the more advanced treatments
I'm not convinced the whole problem is obsession with cost and profits per se. Ex we could have more doctors (suppressing doctors' wages) if we stop having such tightly controlled unnaturally low residency limits for training new ones, and drugs might be cheaper if we stopped giving indefinite patent extensions for reformulations that don't actually change anything meaningful about the drug (ex. bedaquiline for tuberculosis before J&J backed off). There seem to be easy unclaimed win-wins even if you only make the market more able to let more people optimize for personal profit.
But generally, yes, I think I agree -- my overall ideal model is the NHS where you have a single-party system negotiating aggressively for effective treatments, but a hard QALY cap on what kinds of treatments it'll cover. Though defending that as a model is probably a separate argument.
Discussing right of center post-liberal economics without discussing American Compass is a little weird? Like, no one is out here claiming that Deneen's the go-to-source for post-liberal economics. Not that interesting to dunk on his views there, he's just such an easy target that this ends up feeling like a puff piece.
A more interesting article from an historian like Phil would have been to start with Gary Gerstle's framing that we're coming out of the neoliberal political order and ask what that means for left of center economic policy. For example, should liberal democrats continue supporting tariffs on China, or strict I9 enforcement and mandatory e-verify? If not, why not? Can liberals come up with a "worker-centered" economic, trade, and immigration policy that isn't just rehashed neoliberalism? The Abundance Agenda, for all it's virtues, is definitely not a self-consciously worker-centered program. They'd happily accept cheap labor and material imports from China and Latin America if it meant we could get more high speed rail, houses, solar energy, cheap medical assistants, etc. Americans might want those things, but the upper quintile is the only group that wants them more than they want to protect blue collar jobs.
If we look back in party history to the 80's and early 90's, the group that Henry Tonks calls the "new liberals" were actually explicitly interested in doing protectionist, state-sponsored industrial policy in order to compete with Japan. When Japan's economy crashed, this interest dried up and they resumed status quo governance. But here we are 30 years later post-realignment and the right has taken over both that platform, and its constituents.
We liberal democrats need a better response to the right-of-center post-liberal's arguments, but I'm sorry, this uncharitable dunking just ain't it. Phil's three paragraphs characterizing the post-liberal argument are accurate enough, but he doesn't really engage with the argument on its own terms. It's a good piece, but we need to keep exploring this line more rigorously and charitably. The story is too interesting and influential to treat this dismissively — that'll only backfire.
One of the chief issues is that lower end jobs (blue collar) don't pay enough to get you a decent life, and making things cheaper and more abundant is a way to allow them to afford things. If we allowed the importation of chinese cars it would put pressure on American firms to improve their products, and if they can't compete, fail so the capital invested in them could be redeployed to more productive places. The amount of people that would benefit from incredibly cheap but still good quality cars would be a much higher number than the tesla employees that lost jobs.
the crisis of the American car industry in the late 20th century was not a product of unions or worker demands (unions do in fact exist in japan and korea and especially in europe) it was a crisis of 1. quality 2. price competition and 3. bad industrial design/inefficient production lines. American car companies had to change the way they approached these 3 things to compete.
now of course, as I assume your greater point is that the social friction and other negative (particularly localized ones) effects of these events causes bad political outcomes for the country so we can't just write these people off as sacrifices to the capitalist engine of creative destruction.
the synthesis here is something that China in large part is already doing. set goals, let private companies duke it out to meet those goals in a hypercompetitive environment which keeps prices low and innovation high, and when invariable many of these companies fail quickly pivot the capital directly towards a new endeavor that can utilize the labor. who cares if the factory or lab you worked out goes out of business if 10 more opened this month.
what china doesn't do is have a good social safety net (they instead use government direction of private enterprises to make up the difference), and that's one thing I think would be a good addition to the cycle.
The auto industry is a good case study. A huge part of how the US overcame those competitive pressures from Japan was through import quotas and on shoring agreements with domestic training and tech transfer requirements. For Toyota to sell into the US market they basically had to train us up.
I’d love to see us do the same with the Chinese EV industry. But we can’t give up on autos all together because it’s just too critical for maintaining the know-how needed to sustain a broadly competitive defense industrial base.
Protecting particular sectors not only matters because the outputs are strategically important for supply chain resilience, but also because making those things produces certain kind of know-how that makes your labor force more competitive. That’s part of the Dan Wang story for how Shenzhen became the world’s advanced manufacturing powerhouse.
Making things matters. Not just for economic and political macro stability, but also at the micro level. These jobs are higher quality, and most technicians take tremendous pride in their work in ways that are qualitatively different than when they work in services.
Yes, we should tackle the cost side of the affordability equation — but I see a lot more impact here by tackling the rents that accumulated during the neoliberal era. And that’s actually the Abundance position if your of the Niskane / Teles/Lindsay inclination.
Re: outputs for competitive defense industrial base. Car manufacturers and car factories aren't really as useful for defense production retooling as they were in the past. The technology and specialization required to make a modern tank is much greater than it was even 50 years ago. Really the only way they map at all these days onto defense production if they are firms with complex supply chains and people who understand manufacturing and complex supply chains are good to have around....but they could be doing a ton of other things than just making extremely mid SUV's and oversized pickup trucks. Batteries for example!
One sector this IS true for is Aerospace and shipbuilding. And the United States fundamentally is not willing to spend the kind of money other states did to subsidize and develop a shipbuilding industry like east asian countries were/are. We DO spend that money on plane building, but even that is slipping as Aerobus is eating boeings lunch (I think a lot of people that think you can't make a successful european country should read up on Aerobus because they are legit an incredible success story)
Personally I think the U.S. government should be way, way more involved in the production of basic industrial inputs. The U.S. steel industry is a Potemkin industry literally only kept alive by tariffs and nostalgia. Nationalize it, close all the old inefficient and costly plants and just build new ones so provide cheap subsidized steel to American industries/construction. Theres some really smart boys in Boston right now that came up with a way to make steel using just electricity. Hook some of those new furnaces up to nuclear power plants, and badabing. People rightly mock the idea of government made iphones, because they would suck and also iphones are not a strategic resource, making steel (or other strategic materials) is a strategic resource while also being something that the government absolutely could reasonably accomplish.
To clarify — it’s not that making cars is important so that the factories themselves can be repurposed to make tanks like they were in WWII, it’s that making cars is important because it upskills your labor force so that you can start making more and better new things.
I don’t know how familiar you are with the labor market for mechanical engineers and technicians in the US but experience at Tesla or SpaceX or Blue Origin or Boeing or Ford helps a lot if you want to work at XYZ drone or EV startup.
The iPhone example is illustrative because if we did make iPhones here, and subsidized their production, we’d get an up skilled labor force with a lot of transferrable technical knowledge that we could use to build more drones, EVs, robots, etc.
Really hard to sustain a cutting edge, high-volume defense industrial base if you don’t have a big talent pipeline of techs and ME’s who have mastered the requisite skills working on less sexy things. That’s the lesson of Shenzhen.
But the thing postliberals fail to understand is pushing to keep manufacturing on-shore means intentionally making manufacturing jobs worse. Both Germany and china have been able to maintain large domestic manufacturing bases, but both are tilting their economies toward investment vs. consumption to do so, because lower wages/consumption make locating factories there more attractive.
So the “good jobs” rationale for industrial policy is in direct tension with the national security rationale, because a well paid industrial workforce is by definition less “efficient” from the perspective of investment/capital.
And even with all these steps to maintain industry, Chinese manufacturing employment is flat or declining, so perhaps their industrial policy is highly successful for national security, but as a jobs program it isn’t. But industrial policy/postliberal advocates always posit protectionism will do both. The whole point of a “good job” is the things it allows you to consume, which postliberals decry as decadent.
https://x.com/jasonfurman/status/1897782415289942433
Only if there’s a fixed supply of production and labor. In reality, when each individual factory can employ fewer workers and pay them more thanks to automation, then every one of them can be paid more — in theory — if we just had more factories and skilled workers.
Of course, that’s been the dream for a while and it’s hard to achieve.
Agree. The idea that one can "disprove" an ideology by saying "look, _Trump_ is doing it, and it's not working!" is ridiculous on its face.
Part of the problem is that it’s very unclear what a post-liberal economics or politics would actually be. Whenever governments actually do anything illiberal advocates shrink from endorsing it, and when they’re asked for their own recommendations it’s this kind of “liberalism but without my pet problems” thing. Back it the 90s there was this leftish post-liberal fad for “communitarianism” that was just as vague. You don’t hear about it any more for good reasons
I agree in this sense. A post liberal economics would end up trading off GDP for something else. That something else would, in good case scenarios, be more valuable than pure growth. So people might be happier, but growth would be going down or flat. So if there is any discontent about anything in society the (neo) liberal media says "there is unrest because of slow growth" and politicians say "it's the economy stupid."
But this is exactly why we need to find ways to articulate, give shape to, alternatives.
What might be a basis for such an economics?
We might start with European countries that have higher life satisfaction, and adopt policies they have even if they look bad for economic growth. We're not anti growth, but we aren't treating growth as an end in itself. If parents work less and spend time with their kids, which takes a transaction out of the market (paying less for daycare), we don't judge it as bad unless parents say they're unhappy.
I would be hard pressed to find a coherent understanding of liberalism is which European countries with higher life satisfaction are less liberal than the US. This is maybe an unexplained assumption in US post-liberal discourse. If we take the Nordic countries, for example, they have higher transfer payments than the US (although they are not as generous as Americans imagine I think) and more workplace regulation, but they have far less interference in specific industries, and Norway (outside the EU) has freer trade. I would argue that this type of welfare state, that is very consistent and non-distortionary, is more liberal than the US.
In reality, perhaps. I honestly don't know which countries actually adhere to the doctrine of free markets the most. And, I also agree that this could be a counter argument for the liberals. They could say the problem isn't liberal economics, it's that we actually aren't liberal enough. We only THINK we're liberal. But really the U.S. is full of state meddling, monopolies etc.
But this still raises the question of why the society that celebrates the market the most, which worships money, which obsesses about it's economic growth and which is the largest economy in the world, is so miserable. If that country can't fulfill true liberal market ideals, who can?
As for a model of truly illiberal economics, it occurs to me: isn't that China? China is a market economy, but not a free market. And moreover, its state intervention is morally coherent (or appears to be so). Everything is about making China strong and glorious. They ban all kinds of services that they suspect will be demanded but that they believe corrupt the character of citizens. The state has a heavy hand, but also, it relies on the informal power of shame. The government literally pays citizens to shame one another into the "right" ways.
So isn't that what Deneen et al could be imagining? The U.S. as a lite version of China, with Christian thought and churches as a certified commentariat instead of the Communist party. I would not want to live in that society, but I think they could propose a coherent economic doctrine. It wouldn't focus on growth, but on sustaining the nation. Slow innovation. Less wealth but less inequality. But not communist or anything. You just need all goods and services exchanged to be "blessed" by the moral authority.
So this is just my opinion, but if you look across US history the thing that distinguishes our economic organization isn't free markets but ruthless competition for economic advantages, by force when necessary. At a personal level, Americans admire self-driven success, even if its dishonestly come by (just look at the President). At a national level, the country has always intervened to help its winners, from the United Fruit Company to NVidia. "Free trade" in US propaganda is a way to say we don't help losers. This is distinct from, say, the UK or France where their industrial policy is very much about helping losers, or Japan and Korea where its about picking winners. The US will only help you if you're already winning.
This has always left a significant trail of people who feel they should have been among the winners but weren't, accompanied by resentment of people whose success they feel wasn't deserved. But this has gotten worse, as in more and more fields success only goes to a tiny number due to scaling, and in addition many people just lack the basic ability. This isn't unfair in any economic sense. A junior engineer working for Google really is adding massively more economic value than an elementary school teacher. But economic value is completely at odds with social value here. The elementary school teacher is, in a hard to define sense that I think almost everyone intuitively believes, a much more valuable member of society. This problem - increasing divergence of economic and social value - exists everywhere. But in the US because we tend to measure personal worth by economic market value its causing an escalating crisis of self worth.
To me this problem doesn't seem to be anything to do with liberalism really. Its a combination of a specifically American cultural trait, association of economic success with personal worth, with an economic trend, increased scaling in ever more areas of life, to produce a bad psychological outcome. I mean, I may be wrong about the problem. Maybe there's some other issue, but whenever I hear people talk about how bad things are it leads back in some way to scaling and the need to succeed.
Great piece but I think it fails to take seriously sources of real, cross-ideological dissatisfaction with modern life. In my view, much of this dissatisfaction comes from the incredible proliferation of addictive technologies/opportunities in America, which are not unrelated to liberalism and capitalism. If retreating from liberalism isn’t the answer (and I agree it’s not) then what can political leaders offer?
Theres this trend iv noticed amongst technologists and futurists where they point at graphs showing how poor and shitty life used to be before industrialization and modern methods of production while yada yada'ing the point that during the 19th century, when industrialization really got going, peoples health and lives were actually getting worse not better in many places which caused massive social upheaval. It required a conscious effort by society in the form of government actions, worker and other political movements, and more to actually turn the benefit from those innovations towards making better.
That is to say, new advances in technology are good IF there is a conscious effort to make the advances serve the greater good. It does not just magically happen.
The problem is we don’t really have good statistics before the late 18th century and when we try to use proxies critics (rightly I think) point out that they are not very good. I ages with you that generally the lives of the urban poor in particular in the early industrial era ware appalling. Much worse than those of peasants 50 years earlier. But that was a temporary and local phenomenon. If you smooth even slightly across time and locality, it disappears.
It wasn't just the urban poor, if you worked a mine in the 19th century (and before tbf), your life was likely to be short, terrifying, and generally awful. there is a reason many of the most radical workers movements came from mining communities across europe and the americas.
It was also these same mines that provided the literal fuel for the industrial revolution. To feed the machine owners were heavily incentivized to pay as little as possible, cut corners on safety, and respond to any strike or worker action with extreme brutality to keep them in line.
My greater point is that the fruits of technological progress are not evenly distributed by some natural force. We must deliberately distribute them or they will not help those they should be helping.
Do we know that this dissatisfaction reflects something real, though? If you review post-war politics there are really only two short interludes when people seemed generally content, in the late 50s and early 60s and then again in the 90s. Even those might be illusory. The baseline is actually a very high rate of dissatisfaction with politics but the actual problems laid at the door of “the elite” vary massively.
This article disappointed on several fronts.
Focusing on Deneen’s economic rather than political-philosophic critiques is straw manning not steel manning the post-liberal critique.
Breezily equating a thousand-year tradition of Catholic social theology as Deneen’s personal aesthetic and cultural preference similarly straw-mans the post-liberal critique. It can also be turned back on liberals. Aren’t you seeking to impose your belief that maximizing individual choice is essential to the good life? This small-o orthodox Christian isn’t so sure about that and sometimes wishes that our social and political cultures weren’t so hegemonically ordered around liberal’s gospel truth.
Finally, the ad hominem about Deneen’s tenure is unbecoming of a Substack promoting itself as a strong defender of the best of liberalism.
Yikes, not doing myself any favors with the poor grammar.
I consider myself a liberal-completionist in that post-civil rights there aren’t (m)any issues that can be resolved by giving people rights.
I think most of the theory tying liberalism to a free market are pre-industrialization and should be discarded. Marx is more liberal than Locke in that regard (but not Lenin).
I cannot tell you how glad I am to see Phil Magness writing for The Argument. When you launched I appreciated the high quality of writing from the regular cast of characters, but I do feel like the magazine has lacked that more distinctly libertarian voice, or even center-right voices. As much as I love Jerusalem, Kelsey, and many of your guests, they're often out of a more neoliberal or pragmatic center-left perspective, so seeing Phil here to balance out Matt Bruenig is very exciting.
And what a fantastic essay this is, Phil has done a great job laying out the inherent flaws with the "Common Good" philosophy that truly is the ideological opposite of libertarianism. One of the more important passages is where Magness points out that the postliberal "common good" tracks very closely to Deneen's personal aesthetic and cultural purposes. This really is the animating factor for much of both right and left populism. Liberal capitalism has created a far more prosperous world and created a rising tide that truly has lifted up all those who it has touched. But it does require that, to make the most of it, individuals strive and make their own way. Opportunity is there, but no one will provide it for you. For those who do not see their own personal preferences manifested in the world, they view the world as having failed them, and thus seek to use the power of the state to enforce their personal preferences on society.
This, of course, will fail. The historical record and postliberal efforts so far have only reduced our prosperity, and have not produced a world that creates the "common goods" for those who cannot produce those cultural goods for themselves. But not only can postliberal redistribution not create a world that produces these things, a world of these common goods is a historical mirage. Phil so correctly notes that "disagreement over what that common good entails is entirely why liberalism exists in the first place". If you were nobility, perhaps the pre-modern and pre-liberal world was good for you, but for the vast masses you were not the focus of efforts to provide goods for the common people, they were tools to be extracted from by the elites of those societies. Before liberalism gave opportunity for fulfillment to the masses, if only they take it, the masses only had submission towards the will of others. The postliberal feels like a peasant in the modern world, not realizing they're closer to being a king than any of their ancestors. And they never imagine themselves as being the peasant in the older world they want to bring back - only the noble.
This delusion will wreck the world for all of us.
All in all, outstanding article, and a highlight among many fantastic essays The Argument has produced so far this year. Please, please do not let this be the last we see of Phil Magness.
I, too, will take a serious economist over a post-liberal crank any day. But economists have played a part in putting themselves in this situation. Over the past 50 years or so, the discipline became increasingly arrogant, insisting all questions could be answered by its methods and intimating its results were scientific in a way it knew deep down they weren’t. Ask the rest of the academy, left or right, how they feel about the economics department and they’ll tell you they value the work but wish it’d stay in its lane. Economics set itself up for this by over promising and under delivering.
I, perhaps in arrogance and/or foolhardiness, give very little respect by default to even the “thinkers” on the right. Even so, the fact that an alleged leading right intellectual just admits his whole bit is motivated reasoning from the outset is…stunning.
Some real galaxy brained stuff to go, “the first step of my philosophical argument is to proudly do a fallacy!”
And I know in modern internet arguing using formal/informal logic and “debate me” argument with fallacies and whatnot is considered loser stuff. But this guy is TRYING to be an intellectual; which is exactly the realm of these concepts!
Edit: I left the above as a spur of the moment thought before I forgot it. But as I keep reading I just can’t escape that Deneen is just…a moron.
That oil was the only fulcrum to pry us from the Malthusian trap is nonsense on its face. Something, I at least, literally learned about in high school.
But that’s nothing! The idea that the usage of oil as natural resource is, actually, unnatural to the human order. But it is alone among the history of resource and tool use because…reasons…I guess? Why not fire, or metallurgy, or written language, or electricity or…etc etc.?
I realize the point of this post is to show the flaws in this thinking. And while it has certainly accomplished that for me it seems that exposing these ideas, as stated here, to an even moderately well-read adolescent would have been sufficient.
Agree that Deneen is no economist.
So he's not allowed to argue that contemporary economics are missing something?
Isn't our national wealth per capita at an all time high, like in human history? And doesn't almost everyone in the country, both right and left, think the country sucks right now?? But economists don't have any work to do?
And not to defend Deneen more, which this article inclines me to do, but I was an econ major in the early 90s. We were instructed that everything was about seeking self interest. That this was THE KEY to "maximizing social welfare."
We read some paper, maybe by Gary Becker, treating marriage and family as contracts where each party tried to maximize its benefits over costs. I'm not Catholic, or particularly religious, but I think it's fair for those who are to think it was the neo liberals who over reached, first.
Everything except housing & medical prices (subjectively) feels fine right now from my view. At least one perspective held by someone on the center-left is "the current root of (almost all, possibly overgeneralized) evil is housing prices, which are clearly best solved by making the housing market *more* liberal and legally allowing people to build the kinds of things we want to live in"
I would strongly prefer that when I marry the bond be stable and more secure than one of us leaving at any time, but also... I do think it should be less than maximally hard to leave someone who is reneging on their side of the agreement in ways that are legally hard to prove, and I like that the rate at which women have committed murder has cratered now that they can legally leave horrible situations. My own parents are getting divorced currently but my reaction to their 30 year marriage being able to be broken cleanly & legally without a need to prove fault is "thank god"
Everything except housing and medical prices? I appreciate your optimism. The people I talk to are worried about the end of democracy! I'm serious, it's good for me to get out of my bubble.
That said, Americans mostly think the country is on the wrong track. And they also seem to despise their fellow citizens.
And while housing is probably harder to get than it used to be, is that really true of health care? Life expectancy in 1960 was about 70, now it's basically 80. Clearly HC costs have risen faster than GDP, but I'll bet the total gains in household income still outpace that.
So in 1960 , in America, most people were poorer than they are now and were not going to live as long. They got richer in the last 60 years, and spent a good portion of that larger income on healthcare, and got on average 10 more years on earth, too. But they're not as happy. Is that because of the economy?? Isn't it more likely because there's something they need that the economy can't provide?
And like, is that hard to believe?
On healthcare: luckily I don't interact with the system too much, but my most recent experience was having to pony up ~$500 out of pocket to see a doctor for <10min in urgent care, when I already knew exactly what the problem was (it's was incredibly obvious) and just needed go-ahead to get urgent treatment. Possibly everything worked as intended, but it still seems like *if* 10 minutes of wasting everyone's time is going to be legally required it shouldn't cost me $500 after insurance; either it needs to be cheaper or I need to be able to get meds for tonsillitis without a doctor. Though I could definitely believe it was worse in the recent past (I didn't live there so couldn't say), it's still a big pain point.
We do live in very different bubbles, which is interesting. I have a couple friends who are very worried, but the overall vibe among my in-person social circle is "business as usual" -- not happy about the political situation, but not actively thinking about it unless something happens to bring it up.
I hear you on this frustration. Our healthcare system is terrible in many ways, but my point is, not because of its economics, but because it's so confusing and forces people into those kinds of situations.
Why is it that way? Because it's obsessed with cost and profit. You must have some insurance plan that has maybe a high deductible and puts urgent care in that bucket. And then you can't just take prescription medicine without a visit etc. There's a toll taker at every step.
We could have a less efficient system, economically, that was easier to navigate and fairer overall. But it would not be efficient in the sense that some things that people use rarely would be much more expensive than they needed to be (for example).
This is kind of what they have in Europe. Every day care is cheap and easy, and they just don't offer some of the more advanced treatments
I'm not convinced the whole problem is obsession with cost and profits per se. Ex we could have more doctors (suppressing doctors' wages) if we stop having such tightly controlled unnaturally low residency limits for training new ones, and drugs might be cheaper if we stopped giving indefinite patent extensions for reformulations that don't actually change anything meaningful about the drug (ex. bedaquiline for tuberculosis before J&J backed off). There seem to be easy unclaimed win-wins even if you only make the market more able to let more people optimize for personal profit.
But generally, yes, I think I agree -- my overall ideal model is the NHS where you have a single-party system negotiating aggressively for effective treatments, but a hard QALY cap on what kinds of treatments it'll cover. Though defending that as a model is probably a separate argument.
A movement so awk that in its origin story *economists* are the mean cool kids….