Permit me, our dear readers of this column, to present to you Part 1 of the following essay which is of much interest, dated September 5th, 1982, entitled “A Neo-Liberal’s Manifesto”, written by Charles Peters, who is the editor of the Washington Monthly. It is as follows:
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 employees, 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 employees. 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.
(To Be Continued)
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May 21, 2023
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