I recently read Timothy Noah’s “The End of the 40-Year War on Government“, published in The New Republic, which I caught via Twitter. Reagan’s legacy is an issue that social scientists who study modern American economy policy wrestle with regularly. I suppose that the Biden Administration is an occasion for liberals to think about what kind of economic philosophy should be guiding their preferences between now and the next election.
There is one sense in which I think that progressives should reject Reagan, but also one sense in which we should make our peace with it. I agree with rejecting Reaganism in the sense that it is time to outright reject the demonization of government that gained popularity around Reagan’s time and has persisted to influence conservative policy discussions. There once was a time that I engage in earnest arguments that the latest proposal to embrace European taxes, social programs, or labor regulation represented a step towards Soviet authoritarianism. I saw it as intellectual sparring.
Now I see them as spreading inflammatory misinformation that peddles a view that no competent social scientist would reach in a serious, diligent analysis. The reasoning is plagued with logical fallacies (the whole proposition is rooted in slippery slope reasoning). The evidence is usually low-grade. Their explanations do not accurately portray the uncertainty that real social scientists recognize when trying to study and predict how economies behave. I have always seen it as baseless empirically, but I now I see the attempt to win the argument by viscerally alarming the audience.
On the other hand, I think progressives should also bury the hatchet in a similar respect: government power and resources cannot solve all of our societal ills, and can make problems worse. Progressives should not fetishize governments, nor demonize attempts to solve social problems by working in partnership with the private sector. This was a big argument coming from sociology in the latter phases of the neoliberal revolution itself. Sociologists list Peter Evans were stressing how countries were faring well when they had good government, not more of it.
In economic policy, Reagan stands a figurehead that stands in for a variety of economic policy changes that took place worldwide between the 1970s and 1990s. We used to describe these ideational, political, and policy changes as pertaining to “neoliberalism” (public-access version), but the term caught on outside of policy analysis in ways that ultimately made the concept useless in policy research. Reagan is the American anthromorphization of this phenomenon. Thatcher is the British variant. And so on.
When Reagan ascended to office, the world was stuck in a period of protracted economic stagnation, inflation, and high unemployment, as well as considerable political conflict. Crime was up, as was labor conflict. Governments were running bigger deficits and accruing more and more debt, which concerned people at the time (they were accruing in an environment with substantially smaller credit markets, not to mention more expensive ones). Sociologists were warning us that governments who go broke are the vulnerable to breakdown. By many empirics — macroeconomic performance, capital flows, crime and violence, public sentiment, international relations — the 1970s appears to be a rough patch.
I think of the “Reagan Revolution” as a kind of narrative portrayal of the U.S. government’s response to these pressures, which are remarkable in their strong embrace of regressive tax reform, deregulation, privatization, global engagement, and social program cutbacks. Neoliberalism was not the solution to the pressures of the 1970s, but rather a solution. The solution had a political component, that was intent on demonizing government in the popular mind. It also involved concrete policy reforms. Some reforms patently bad policies, like government-mandated limits on bank deposit rates or export duties. Some were more controversial, like the government’s increased use of private sector subcontracting as a means of delivering public services, or reductions to the generosity of aid given to poor people.
It is important to note that neoliberalism was something that was done all over the world, and not all of these reforms were bad ideas. For example, in my hometown in northern Canada, the government used to run gas stations. It made sense to create government-run gas stations in remote communities that could not be served profitably by private sector stations. By the 1990s, even very small towns had government-run gas station operated alongside several locally-run gas franchises. There was no reason for the government to run gas stations in towns with plenty of private sector gas retailers. The enterprise lost money for the government, and its social welfare effects were highly questionable. The fact that no one is clamoring to bring back government gas stations is probably meaningful.
There are many examples like this story, where getting rid of the government’s role in a market or industry probably benefitted us. These aren’t secrets, but rather empirical examples that progressives weren’t interested in considering.
Maybe recent events have made progressives more amenable to a more cautious view in what they want their governments to do. I suspect that most of the people who have spent the last several decades demonizing globalization didn’t enjoy the taste of international illiberalism they got under Trump. It is hard to ignore the fact that public budgets are strongly weighed down by yesteryear’s very generous public pensions, even after financial reforms provided these funds an additional stream of revenue (apart from taxes). If progressives want to take their step towards a “unity” that is focused on sensible, pragmatic governance, this is a step that they can take.
So, I completely agree that it is time to shed the kinds of policy arguments that might have been made in earnest in 1980, but cannot be made like that today. Worse yet are the policy scare tactics that make people believe that government programs threaten their democracy or vulnerability to serious political oppression. Those are parts of Reaganism that we can easily shed. We should get rid of them. The environment has reached a point where political discourse like that seems irresponsible, and we should all stop with the rhetoric.
At the same time, progressives have to acknowledge the lessons to be learned on our side as well. The experience of Trump also shows how the government can be misused in ways that present a danger to regular people. Economic nativism seems like a far less likely path to raising living standards, so maybe we should shed narratives that portray globalization as a wholly menacing force. Our pharma system, which has a big private sector component, came through big-time during COVID-19. Finally, we shouldn’t be so quick to lionize economic regulation and government programs. Some fights against deregulation are in fact attempts by wealthy people to maintain their privilege. We could go on and on.
Perhaps our best move is to stop fetishizing free markets, government programs, and Ronald Reagan.