How liberals misread their own history

To be a liberal in Europe is a frustrating business. In Britain Liberal Democrats can only stand by and fume while Blair’s Third Way steals liberal nostrums and enlists them in the service of a new centrist consensus designed to keep Lib Dems on the margins for ever. In Germany, the liberals have gone from being the king-makers of the Kohl era to bystanders in Schröder’s. In Jospin’s France, it is not possible to be a genuine liberal at all. The word itself has collapsed into a synonym for ‘neo-liberal’, which means rabidly free market.

Eleven out of the 15 governments in the European Union are pursuing a new pinkish consensus. Everywhere, the social-democratic left has regained power by squeezing into the centre, stealing from conservatives and liberals alike. It has stolen family values, tight money and privatisation from the conservatives and personal responsibility, autonomy, rights, constitutional and legal reform from the liberals. The result is what the Guardian calls ‘social liberal’ governments, in which social-democratic politicians adopt liberal politics and in the process keep liberals out of power.

Tony Blair’s Third Way pamphlet illustrates the trend. The Third Way, he writes, ‘draws vitality from uniting the two great streams of left-of-centre thought – social democracy and liberalism – whose divorce did so much to weaken progressive politics across the West’. Although liberalism was always about ‘the primacy of individual liberty in the market economy’, and social democracy about ‘social justice with the state as its main agent’, Blair insists that ‘there is no necessary conflict between the two,’ since both traditions now want to use state power to enhance individual liberty. This is clever politics, but it obscures the clear historical distinction between the liberal and social-democratic traditions. Liberals and social democrats have been frères ennemis since Lloyd George. A liberal smells paternalism in the social-democratic enthusiasm for the use of state power, while social democrats suspect that liberals care more about liberty than equality. Third Way talk suppresses these contradictions, and while this is good for Labour, it is not necessarily a good thing for the country. Constitutionally, the notion of the Third Way helps to suppress the one ideological and moral source from which effective and critical opposition to the Labour project can come. On everything from fox-hunting to the House of Lords and electoral reform, a liberal tradition points in a different direction from social democracy, and with conservatism dormant or dead, the vitality of political debate in Europe depends on reviving, not smothering the liberal voice.

In Europe liberals find themselves competing for power and influence with social democrats who have effectively stolen their thunder. In America, the situation is more complex – and Alan Brinkley’s book is an excellent guide to these perplexities. When American liberals try to explain why liberalism is in such a parlous condition, they begin with the assumption that liberalism was the common sense of the country from Roosevelt through to Jack Kennedy. Roosevelt got the country out of depression and proved that big government could be good government. From the wartime boom through the Eisenhower years, a liberal consensus fuelled a dramatic extension of American prosperity. Then the rot set in: Civil Rights, Vietnam and the Sixties. Liberals found themselves suddenly outflanked by black activists and student radicals, and the liberal consensus dissolved in acrimony. By the Reagan years, ‘liberalism’ had become a synonym for moral permissiveness and to run as a liberal was to court electoral suicide anywhere outside Manhattan or San Francisco.

Alan Brinkley substantially revises that picture. A Columbia-based historian of the New Deal, who has also written about liberalism’s radical competitors in the Thirties – Louisiana’s Huey Long on the left and Father Coughlin, the proto-fascist isolationist radio priest, on the right – Brinkley has now produced Liberalism and Its Discontents, a miscellaneous collection of historical essays whose overall purpose is to disabuse liberals of their own mythologies. In 1950, Lionel Trilling wrote in The Liberal Imagination that ‘liberalism is not only the dominant but even the sole intellectual tradition’ in the United States. In the mid-Sixties, the Harvard historian of ideas Louis Hartz insisted that even American conservatives were enfolded within the liberal tradition. Brinkley argues that liberalism was never the consensus of American politics. In the first place, it was divided against itself. Some liberals in the Thirties actively resisted the New Deal because of the threat which Rooseveltian big government posed to individual liberties. Friedrich Hayek’s The Road to Serfdom, for example, was a passionate attack on the New Deal from a selfconsciously liberal – i.e. anti-statist – position. Others, of course, associated the liberal idea with state intervention. Liberalism was never a stable consensus and was always at its most vital when under pressure, when responding to the discontents to which radicalism forced it to respond. Even when it was in power, it was itself divided over how best to manage and control American capitalism.

In fact, Roosevelt and his advisers had no ideological commitment to big government when they came into office, and absolutely no idea how to use government macro-economic policy to end the Depression. At first, the New Dealers believed that they had to slash Hoover’s deficit. On taking office, Roosevelt’s first action was to cut Federal payrolls and reduce benefits for veterans. Not until well into his second term, after a disastrous attempt to cut government spending, did he finally endorse the key liberal idea that public spending could stimulate economic growth. Liberals, Brinkley insists, keep claiming victories which are not theirs by right. The New Deal ‘did not end the Great Depression and the massive unemployment that accompanied it; only the enormous public and private spending for World War Two finally did that’. War, rather than the triumph of liberal thinking, moved the government into macro-economic management.

When liberalism did win, it did so by jettisoning a much more radical and interventionist critique of American capitalism. The Keynesianism which postwar American liberals adopted believed in using government power to manage aggregate demand in the economy. It did not believe in breaking up monopolies, reforming the industrial structure of the economy, or centrally planning its output. These had been vital elements in the left-liberal critique of American capitalism since the era of the robber barons. Trust-busting had been a radical slogan for decades, and this anti-monopolistic temper had led Congress to pass the Sherman Anti-Trust Act. Roosevelt’s cousin, Teddy, had campaigned in 1912 on a programme which called for a ‘course of supervision, control and regulation of these great corporations’. The National Relief Administration was created in 1933 to regulate prices and wages in major industries and, in effect, to run them as government-supervised cartels. Even though the NRA failed miserably, Roosevelt still campaigned vigorously against the evils of big business and the power of ‘organised money’. His speech to the Democratic Convention in 1936 was probably the last overtly anti-capitalist speech by an American President this century: ‘I should like it said of my first Administration that in it the forces of selfishness and lust for power met their match. I should like to have it said of my second Administration that these forces have met their master.’

Yet his second Administration moved away from central planning, price regulation, anti-monopoly, trust-busting, indeed any attempt to direct, control or change the structure of American capitalism. And when the war came and the American economy launched itself on the long boom which was to run, with a few cyclical downturns, right up to the oil shock of 1973, liberal economic thinkers focused entirely on the management of aggregate demand and abandoned the liberal radicalism which had wanted to use government to limit monopoly power.

The crux of Brinkley’s argument is that liberalism made its peace with capitalism on the market’s terms. ‘It was now possible for the state to manage the economy without managing the institutions of the economy.’ The New Deal, in short, had taught liberals not only what the state could do but what it could not do. ‘And one of the things it could not do, they had come to believe, was reorder the corporate world.’

The Cold War turned liberalism in a militantly anti-Communist direction. With the onset of the forty-year war with international Communism, it became possible to see in this older interventionist tradition – industrial policy, price and wage-fixing, the breaking-up of monopolies – a dangerous, even totalitarian form of collectivism. The Cold War may have undermined the idea of the state as a regulator of capitalism, but it gave a powerful impetus to the creation of a ‘national security state’: ‘entrenched, constantly expanding and largely invulnerable to political attacks; a state that forged intimate partnerships with the corporate world, constandy blurring the distinctions between public and private; and a state that produced some of the very things – strengthened private monopolies [in the defence industries] and expanded state power to sustain them – that the liberal vision was supposed to prevent’. Instead of taming capitalism, in other words, New Deal liberalism gave us me military-industrial complex. Instead of strengthening democracy with social welfare, liberalism left America with a ‘weak and embattled liberal state’, constandy struggling to find the revenue and the ideological legitimacy to sustain basic social programmes.

In place of the usual account which dates the fall of American liberalism to the Sixties, the Vietnam War and Civil Rights, Brinkley is suggesting that the rot set in when the New Deal abandoned its radical agenda and settled for a Keynesian accommodation with capitalism. This bargain worked only as long as the economy delivered the goods. But when, in the Seventies, stagflation set in and the economy stopped responding to conventional Keynesian management, liberalism itself stood exposed.

Brinkley also dispenses with the myth that American liberalism from Roosevelt onwards led the country towards a progressive consensus on race. Roosevelt never challenged the racism of the Deep South, particularly of his own Southern political machine. His social programmes and endorsement of union rights captured the loyalty of unionised black workers, but he did nothing about segregation and the denial of Civil Rights to poor Southern blacks. In essence, the New Deal secured the black vote without dismantling the racial apartheid of the South. Had the New Deal enfranchised blacks in the Thirties, had liberalism put itself at the head of a campaign for racial equality two generations earlier, it would not have found itself condemned for hypocrisy and inaction and bypassed by the black and white radicalism of Selma. For when the Civil Rights movement came in the Sixties, white liberals joined the struggle too late to be credible. The campaigns to desegregate lunch counters, buses, universities and schools had been underway long before the Kennedy Administration made its first timid use of Federal law to support desegregation, and it wasn’t until the Johnson Administration took office that the official power of the liberal state was put in the service of Civil Rights. By then the seeds of distrust between liberals and radicals had been sown. To be a liberal on Civil Rights issues in the Sixties was to be a Johnnie-come-lately.

Brinkley’s location of the roots of American liberalism’s crisis during the Sixties in the Roosevelt era identifies the problem as one of complacency about the President’s achievement. Liberalism parted company with radicalism, became the ideology of the national security state and by the early Sixties had nothing to say to a generation shamed by racial exclusion, angered by corporate profiteering and nauseated by a war in the jungles of South-East Asia which was leading the republic into imperialism. Liberalism, in other words, had lost touch with its discontents, and without its discontents, it became nothing more than a complacent apologia for the status quo.

In the Sixties, liberals played catch-up, trying to understand and, where possible, approve of the radical movements which were themselves capitalising on the liberal failure to take on capitalism and imperialism. In an attempt not to be outflanked by radicalism, liberalism embraced the Sixties with a suivisme which was to cost it dear. It abandoned liberalism’s traditional moral centre – personal autonomy and personal responsibility – and became the apologist of permissiveness at school and at home. The word ‘liberal’ itself became a synonym for moral relativism. By the time of the oil crisis of 1973, the last remaining pillar of liberal credibility – Keynesian demand management – broke down in the mire of stagflation. Capitalism had been willing to bear the price of liberalism – higher taxes, social benefits and higher wage costs – for as long as aggregate demand held up. Now, as the old industrial economy based on coal and steel rusted away, and a new economy based on the computer began to take shape, liberalism no longer had anything robust to say about the changing economic landscape or the dilemmas of family life. Into this void sprang the reassuring simplicities of conservative economics and ethics.

To be a liberal in the Eighties and Nineties has been to live in a state of bafflement: at the apparent resurgence of moral fundamentalism, religious intolerance and conservative economic witchcraft. Brinkley’s key message is that liberals are baffled because they have misread their own history. They never enjoyed the ideological hegemony they supposed. American conservatism, Biblical literalism and moral fundamentalism were always out mere, waiting for the secular liberals to fail. Liberals, he argues, would be better served by a humbler and tougher version of their own history: they are only one of America’s political tribes, their hold on the American imagination was never hegemonic, and their opposition is not a lunatic fringe, destined for irrelevance in an increasingly secular world, but a competing and coherent version of what America should stand for. Liberalism won’t begin to be credible, even to respect itself again, unless it respects its enemies, unless it sees itself for what it always was, not a bland managerial consensus, but a fighting creed. What it will have to fight for is not permissiveness, but pluralism, the right of secular and liberal, left and right, to live decent lives safe from the moral thought police. Although Brinkley does not say so, one implication of his analysis is that what liberalism will have to confront is capitalism. Liberalism is about controlling power and the runaway power in the world is the global corporation. A political creed which has nothing to say about Microsoft or News Corp. will lose all remaining credibility when these monopolies set about defying the liberal state.

At the moment, of course, American liberalism is not ready to fight anybody. In Clinton, it has elected the very epitome of liberalism’s enduring problems. He began life as a Southern liberal and the best of him is still his political instinct for the hurts and grievances of Southern blacks. He is the first white politician in American history to look at home in a black Baptist church. In his political appeal, he kept just enough liberal rhetoric – about inclusion, decency, equality – to keep the crucial black vote, and then ran as a conservative on every practical issue from crime to economic management. This is the Third Way at its most unpleasant: using liberal rhetoric to recruit the votes of the poor to win office and then using fiscal conservatism to betray them in power. Liberals and social democrats alike will have to fight to ensure that this is not the fate of the Third Way in Europe.