NEO-LIBERALISM is a terrible name for an interesting, if embryonic, movement. As the sole culprit at the christening, I hereby attest to the innocence of the rest of the faithful. They deserve something better, because they are a remarkable group of people.
The best known are three promising senators: Bill Bradley of New Jersey, Gary Hart of Colorado and Paul Tsongas of Massachusetts. The ones I know best are my fellow journalists, including James Fallows and Gregg Easterbrook of The Atlantic, Michael Kinsley and Robert M. Kaus of Harper's, Nicholas Lemann and Joseph Nocera of Texas Monthly, and Randall Rothenberg of New Jersey Monthly. But there are many others, ranging from an academic economist like MIT's Lester Thurow to a mayor like Houston's Kathy Whitmire to a governor like Arizona's Bruce Babbitt. There's even a cell over at that citadel of traditional liberalism, The New Republic.
While we are united by a different spirit and a different style of thought, none of these people should be held responsible for all of what follows. Practicing politicians in particular should be presumed innocent of the more controversial positions. When I use the first person plural, it usually means some but not all of us, and occasionally it may mean just me.
If neo-conservatives are liberals who took a critical look at liberalism and decided to become conservatives, we are liberals who took the same look and decided to retain our goals but to abandon some of our prejudices. We still believe in liberty and justice and a fair chance for all, in mercy for the afflicted and help for the down and out. But we no longer automatically favor unions and big government or oppose the military and big business. Indeed, in our search for solutions that work, we have come to distrust all automatic responses, liberal or conservative.
We have found these responses not only weren't helping but were often hampering us in confronting the problems that were beginning to cripple the nation in the 1970s: declining productivity; the closed factories and potholed roads that betrayed decaying plant and infrastructure; inefficient and unaccountable public agencies that were eroding confidence in government; a military with too many weapons that didn't work and too few people from the upper classes in its ranks; and a politics of selfishness symbolized by an explosion of political action committees devoted to the interests of single groups.
Our primary concerns are community, democracy, and prosperity. Of them, economic growth is most important now, because it is essential to almost everything else we want to achieve. Our hero is the risk-taking entrepreneur who creates new jobs and better products. "Americans," says Bradley, "have to begin to treat risk more as an opportunity and not as a threat."
We want to encourage the entrepreneur not with Reaganite policies that simply make the rich richer, but with laws designed to help attract investors and customers. For example, Hart is proposing a "new capacity" stock, a class of stock issued "for the explicit purpose of investment in new plants and equipment." The stock would be exempt from capital gains tax on its first resale. This would give investors the incentive they now lack to target their investment on new plants and equipment instead of simply trading old issues, which is what almost all the activity on Wall Street is about today.
We also favor freeing the entrepreneur from the kind of economic regulation that discourages healthy competition. But on matters of health and safety, we know there must be vigorous regulation, because the same capitalism that can give us economic vitality can also sell us Pintos, maim employes, and pollute our skies and streams.
Our support for workers on health and safety issues does not mean support for unions that demand wage increases without regard to productivity increases. That such wage increases have been a substantial factor in this country's economic decline is beyond reasonable doubt. But -- and this is a thought much more likely to occur to neo-liberals like Lester Thurow than to neo-conservatives -- so have ridiculously high salaries for managements that show the same disregard for performance. The recently resigned president of International Harvester was being paid $1.4 million a year as he led his company to the brink of disaster.
We also oppose management compensation that encourages a focus on short-term profit instead of long-term growth. And we favor giving the worker a share in the ownership of his company.
In this connection, a perfect example of the neo-liberal approach was provided by Tsongas during the Senate debate over the Chrysler bailout. The United Auto Workers sought guaranteed wage increases for its members. Tsongas objected. Why should a company on the verge of bankruptcy pay wage increases? On the other hand, Tsongas realized that workers would feel exploited if their efforts produced profit for the company and it all went to the shareholders. The Tsongas solution was to give the workers stock instead of money, so that if their efforts helped save the company, they would not be suckers. They would share in the success.
Another way we depart from the traditional liberal's support for organized labor is in our criticism of white-collar unions for their resistance to performance standards in the evaluation of government employes. We aren't against government, period, as -- with the exception of the national security apparatus -- many conservatives appear to be. But we are against a fat, sloppy, and smug bureaucracy. We want a government that can fire people who can't or won't do the job. And that includes teachers. Far too many public school teachers are simply incompetent.
Our concern about the public school system illustrates a central element of neo-liberalism: It is at once pragmatic and idealistic.
Our practical concern is that public schools have to be made better, much better, if we are to compete economically with other technologically advanced countries, if we are to have more Route 128s and Silicon Valleys. Our idealistic concern is that we have to make these schools better if the American dream is to be realized. Right now there is not a fair chance for all because too many children are receiving a bad education. The public schools have in fact become the principal instrument of class oppression in America, keeping the lower orders in their place while the upper class sends its children to private schools.
Another way in which the practical and the idealistic merge in neo-liberal thinking is in our attitude toward income maintenance programs like Social Security, welfare, veterans' pensions, and unemployment compensation. We want to eliminate duplication and apply a means test to these programs. They would all become one insurance program against need.
As a practical matter, the country can't afford to spend money on people who don't need it -- my aunt who uses her Social Security check to go to Europe or your brother- in-law who uses his unemployment compensation to finance a trip to Florida. And as liberal idealists, we don't think the well-off should be getting money from these programs anyway -- every cent we can afford should go to helping those in real need. Social Security for those totally dependent on it is miserably inadequate, as is welfare in many states.
The pragmatic idealism of neo-liberals is perhaps clearest in our reasons for supporting a military draft. A draft would be a less expensive way to meet our need for military manpower because we would no longer have to use high salaries as a way to attract enlistees. It would also be the fairest way, because all classes would share equally in the burdens and risks of military service.
In the long run we hope a draft will not be needed. We want to see a rebirth of the spirit of service that motivates people to volunteer to give, without regard to financial reward, a few years of their lives to public service.
There is another reason for our support of the draft. We want to bring people together. When I was growing up, both the public schools and the draft mixed social classes. Today the sons of the rich avoid the public schools and scorn the military service. This is part of a trend toward separatism, not only by race but by class and interest group, that has divided the nation and produced the politics of selfishness that has governed this country for more than a decade.
The rise in the power of the interest-group lobbies has been accompanied by an increase in single-issue politics, with misleading oversimplifications of the other side's position -- as on the abortion issue, for example -- and a tendency on both sides to judge a politician solely by his stand on this one matter.
I fear that the nuclear freeze, something I support, could turn into another example. I don't mind having anti-nuclear demonstrations outside the United Nations, but I would also like to see antipoverty demonstrations outside David Stockman's and Paul Volcker's offices. I would like to see the anti-nuclear people concerned about non-nuclear defense issues, asking questions about MXs, B-1s, Aegis cruisers, and other dubious weapons, questions based on a belief in a strong but not profligate defense.
I think the only possible salvation for this republic is a citizenry that is determined to inform itself on a broad range of important issues -- and that will vote for an elected official on the basis of his or her stand on all the issues. We now have a Congress that is petrified of offending any single, passionate group -- even private boat owners -- and that won't change until the members know we're not going to throw them out of office on any basis other than overall performance.
The only way we are going to destroy the escalating power of the lobbies is to destroy single-issues politics. Today everyone is imitating the National Rifle Association. That's the way to have a successful lobby. It's also the way to ruin America.
We have made dividing ourselves against ourselves into a virtue. While it is certainly necessary at times, the adversary approach to problems has come to dominate our national life, at a disastrous cost to all of us.
In industry, our adversarial system has been a major factor in making our corporations less efficient than their foreign competition. In Japan auto workers think about how they can improve their products; in America, they think about filing grievances.
The adversary relationship between Congress and the White House all too often paralyzes government. It has led to a situation where Congress cannot trust the information provided by the executive branch. As a result Congress has set up its own bureaucracy, including a budget office, to develop the same information that is supposed to be provided by federal agencies.
Finally, the adversary system of justice helps to create a society where differences are magnified, breeding suspicion and mistrust, instead of calmly reconciled. That's why we favor a no-fault approach to two of the major court-cloggers -- divorce and auto accidents -- and the use of mediation in most other cases. Mediators would not have to be lawyers. They could be elected by their neighbors or selected by the parties to the dispute.
This brings us to another fundamental tenet of neo-liberalism: We generally oppose requiring a law degree or similar paper credentials for most jobs. People should be judged on their demonstrated ability to perform, not on their possession of degrees and other credentials. Did you read that Paul Blair, an ex-major leaguer, was denied the right to coach high school baseball because he didn't have a teaching credential?
Another example of this concern is the recent criticism of Marva Collins, the black Chicago teacher who started her own school to help poor children. Some ofthe the criticism may be justified, but one charge -- that she lacks a teaching certificate -- is the sort of thing that makes me desperate, particularly since the press solemnly reported the charge without the slightest suggestion that a teacher's certificate may not have any relation to teaching ability. The proof is that many of the best private schools do not require teacher's certificates. What they care about is that the teacher can teach. Neo-liberals share this concern with actual performance because they want to encourage productivity and discourage the bureacratization that credentialism fosters.
The search for credentials is also undermining our economic prosperity. During the past academic year 127,530 men and women were enrolled in law schools. These are among our ablest young people. If they had chosen productive work, they would be on the cutting edge of the economic recovery we so desperately need. Instead, they spent the year sitting in some library, trying to focus their eyeballs on "Corpus Juris."
"Anthropologists of the next century," Michael Kinsley has observed, "will look back in amazement at an arrangement whereby the most ambitious and brightest members of each generation were siphoned off the productive work force, trained to think like a lawyer, and put to work chasing one another around in circles."
Seniority is another enemy of the performance standard. Take the way the government has been carrying out its RIFS (reductions in force). People are being fired not for lack of ability, but for lack of seniority. Someone who has been around a long time can "bump" a younger employe even when the junior official is much more talented and dedicated.
This indifference to performance is not some abstract problem of public administration. It is central to the declining efficiency of both American industry and government. It even affects everyday life. If you doubt me, just remember the next time your bus breaks down and you're sweltering in the heat that Metrobus is forbidden to consider actual job performance in evaluating its mechanics.
Snobbery, like the credentialism to which it is related, is another of our targets. The snobbery that is most damaging to liberalism is the liberal intellectuals' contempt for religious, patriotic, and family values. Instead of scorning people who value family, country, and religion, neo-liberals believe in reaching out to them to make clear that our programs are rooted in the same values.
Take school prayer. While I easily can see how the custom of my youth, requiring children to recite the Lord's Prayer at the beginning of school, was offensive to non-believers, I also can see no reason to oppose a few minutes of silent meditation. During such a period those who want to pray can pray, and those who don't want to pray can think about baseball (which I often managed to do while reciting the Lord's Prayer), or anything else sectarian or nonsectarian they want to think about. There is absolutely nothing wrong -- indeed there is great good -- in asking young people to think quietly for a few moments about the meaning of it all. Yet many liberals see the prayer issue as one of the seminal battles of the enlightenment against the "hicks."
It is this contempt for the "hicks" that is the least appealing trait of the liberal intellectuals. They don't really believe in democracy. Neo-liberals do -- we think a lot of those hicks are Huck Finns, with the common sense and good will to make the right choices if they are well informed.
Informing them properly means giving people a better education in politics and government, not just in the schools, but through the press. This in turn requires better teachers and reporters than we have now, teachers and reporters who know the history of the American political system and the lessons of its successes and failures -- subjects largely ignored in our teachers' colleges and journalism schools.
Since experience is the best teacher of all, if we truly are going to reform the American system of government, we need to give more Americans experience in government. We need more politics, not less -- more good people running for office. Unfortunately, the worst form of snobbery in America today is the smug assumption that politics and politicians are inherently bad.
If you think for a moment about the kind of choices we've had in recent elections, you'll realize why we must have a lot more good people pursuing political careers. This in turn means offering decent rewards for a life in politics. Today a person who starts out in politics has a tiny field of opportunity in the federal government -- congressman, senator, and just two thousand appointive positions.
What if we opened hundreds of thousands of federal jobs to political appointees, replacing through normal attrition roughly half the federal government's 2.8 million civilian employes? Give the new people 21/2-year appointments, with a limit of five years on the time they would be permitted to remain in government.
This would bring people with real-world experience into government, attract more risk-takers not obsessed with job security, and provide a legitimate reward for political participation. The reward would be legitimate because the unqualified would not profit from it; your sister Susie who can't type 20 words a minute still would not be allowed to get that government typing job no matter how hard she worked in your campaign.
Because the jobs would be limited to a few years, we also would constantly be sending back into the ranks of the voting public people who have learned first-hand why Washington doesn't work and who have nothing to lose from speaking out about the reforms that are needed.
But suppose the Reaganites were permitted to begin making such appointments now? They would do some harm; that I cannot dispute. But we could elect a different president in 1984 and replace all the Reaganites.
This is not to say that I think career civil servants serve no useful purpose. If I felt that way -- if I didn't want to keep the Philip Habibs -- I wouldn't advocate retaining half of them. They provide continuity, institutional memory, and an insurance policy against the excesses of the politicians. But we also need more incentives for people to participate in politics and a dramatic increase in the number of people who understand the government.
If this approach had been in effect for even a decade, we would have a nation far better equipped to appraise the budget cuts that are said to be needed, that wouldn't have to guess where the fat is because it would have the sophistication to know exactly where to find it. We would have people in government who, because they'd spent most of their lives on the outside, would have genuine empathy for the problems of those on the outside. The lack of such empathy has been the most glaring deficiency of the bureaucracy since I have been in Washington. And I fear it will become worse, because the mindless Reaganite attack on the bureaucracy is going to exacerbate the civil servants' tendency toward self-protection, just as did the equally mindless McCarthy attack of the 1950s.
What is the evidence that a system of democratic accountability would work better than the unaccountable civil service we have now? Those who were alive in the 1930s will remember that the post office delivered your packages intact and your letters on time, twice a day, in fact. That postal system was blatantly political. If your mail didn't come on time you could complain to your congressman, and he would arrange for a new postmaster if he wanted to be reelected. The postal system became progressively less political in subsequent years and became completely nonpolitical in 1968. What has happened to your mail? What happens when you complain now? You probably don't even bother. That's why the present bureaucracy is so discouraging to democracy -- the citizen who speaks up knows he is wasting his time. He calls Federal Express instead.
One of the problems frmacing the new liberals is the way we are misunderstood by the old liberals. I am sure that most of them have read what I have written here as advocating a return to the days of the Vietnam draft, robber barons, Tammany patronage, and coerced prayer. I have, of course, advocated none of those things. In each case I have said something different, and it is important that the old liberals attend to the difference.
At the same time, the new liberal must be willing to risk misunderstanding. Risk is indeed the essence of the movement -- the risk of the person who has the different idea in industry or in government. That is why we place such a high value on the entrepreneur. The economic, social, and political revitalization we seek is going to come only through a dramatic increase in the number of people willing to put themselves on the line, to take a chance at losing all, at looking ridiculous.
Risk-taking is important not only in career terms but in the way one looks at the world and the possibilities it presents. If, for example, you see only a narrow range of choices, if you are a prisoner of conventional, respectable thinking, you are unlikely to find new ways out of our problems. That's why some neo-liberals, who are on the whole internationalists and free-traders, are willing to consider such bizarre ideas as getting out of NATO, forgetting about the Persian Gulf, embargoing Japanese cars, or requiring that, in part at least, they be built here.
The basic problems we're trying to address is that American industry's ability to compete has been seriously impaired by the amount of money we have spent in the common defense as compared with our competition and that we must find some dramatic way to redress the balance. Similar reasoning applies to problems such as Boeing's struggle against the foreign government-subsidized airbus. Shouldn't our government do whatever is necessary to make sure the competition is fair? Neo-liberals would certainly be willing to consider this idea. Traditional liberals would recoil at the thought of helping big corporations in any way.
From all this you can see that neo-liberalism has two kinds of opposition from other liberals. One is from the traditional anti-business, pro-union, throw-money-at-social-problems liberal; the other, very common in Washington, is the respectable liberal -- the Brookings Institution is his spiritual home -- who sees the possibility of change as so small that he is willing to take seriously only proposals that fall within that narrow range.
As an example of how these two kinds of liberals would react to a neo-liberal proposal, consider my own latest cause: Bring back the WPA -- bring it back to rebuild the nation's infrastructure, to give people jobs, to give the poor money to spend.
The traditional liberal would be perfectly willing to finance the WPA, but he would worry so much about offending the unions that he would probably amend the appropriations bill to require that no WPA employe do real work. (If you think I'm being fanciful, you should know that just such a provision governs the affairs of New York's public works program.) The respectable liberal would not have gotten even this far. He would refuse to consider an increase in the deficit, and he would smugly assume that the neo-liberals hadn't considered how to finance the proposal.
In fact we have considered how to finance it. We are, after all, determined to be practical, not to be the kind of liberal who spends without regard to income. Here's how we would do it:
Eliminate the increases in federal pay and pensions and the new tax cuts scheduled for the coming fiscal year (some employes deserve more and some of the cuts are desirable, but by and large both measures constitute welfare for the middle and upper classes), and make the reductions that we specified in an article called "35 Ways to Cut the Defense Budget" in The Washington Monthly. This would produce about $60 billion to finance the program, which in turn would lower unempms frmloyment, providing more tax revenue to finance an even larger program.
Our aims are humane (to give the unemployed the dignity of work) and pragmatic (to support long-term prosperity with a rebuilt infrastructure and to stimulate short-term recovery by putting money in the hands of people who will spend it). We're consumer-siders, not supply-siders. Investors need more than tax incentives to invest in new plants. They need to see customers out there ready to buy.
If you're thinking this is a crazy, impossible idea, you may be right. I don't think so, but I'll concede the possibility in order to get to the next point, which is that neo-liberalism is not just a program but a new way of looking at things, a new lense, a wide-angle lens. You'll have to consider more wrong answers. But the point is that you will also see more right ones.
When your ship is sinking, it may not be enough to look just at that hole in the hull and think about how to repair it. You may need to think of a new law of physics or remember an old one, like Keynesian economics, that no longer is fashionable. If you look through a narrow lens, you'll see only the hole. The wide angle just might save you.