When libertarians read Alan Brinkley's The End of Reform, they will frequently nod with approval when Brinkley refers to some faction within the Roosevelt Administration as "statists." Just bear in mind that for Brinkley, that term is not derogatory.
After finishing the book, I came up with the following three dispositions for modern liberals.
1. A disposition to have a modest concern that increased state power over economic matters could undermine individual freedom.
2. A disposition to view unelected government officials as acting on behalf of the common good.
3. A disposition to view business leaders as acting contrary to the common good.
With respect to (1), if you replace "a modest concern" with "an overwhelming concern," you change the liberal into a libertarian (or, for those who are picky about such things, you change a modern so-called liberal into a classical liberal.)
On the other hand, if you replace "a modest concern" with "little or no concern," you change the liberal into a socialist. To some of us in the "overwhelming concern" camp, y'all look like socialists, anyway. Maybe because from our angle it is hard to see the difference between "modest" and "little or no." Or maybe because in practice, the amount of government economic interference for you is always, to use the title of William Voegeli's new book, Never Enough. So the concern never seems to reach a level where it affects your policy positions.
The way that Brinkley mourns what he calls the end of reform, he comes a cross as a never-enougher. More on his book, below.
Now that I have finished the book, I continue to give it my very strongly recommended evaluation with one exception. For me, the chapter "Mobilizing for War" was mostly a tiresome account of what I call corporate soap opera. By that I mean when you work in any organization, there are always controversies whose importance seems magnified at the time, with lots of bitter personality conflicts and substantive disagreements that rarely seem so important in restrospect. Anyway, this chapter has a lot of corporate soap opera related to the various overlapping agencies involved in requisitioning military supplies.
Because Roosevelt's liberals were reluctant to go Full-Monty socialist, there was a tension between disposition 2 and disposition 3. Liberals who were most committed to disposition 2 became what in my earlier post I called the "harmonizers." Those who were most committed to disposition 3 became the "regulators."
You can trace it back to the first World War, when Bernard Baruch ran the War Industries Board, through which the government engaged in economic planning for the war effort. On p. 35, Brinkley writes,
according to subsequent mythology, the wartime experiment had been a brief and glorious moment of economic harmony, in which business, government, and labor cooperated effectively on behalf of the larger economic good.
People who bought into that myth became harmonizers. Others looked back on the first World War and remembered war profiteering. They became the regulators. The harmonizers wanted to get business and labor together under government auspices and solve problems with rational planning. Herbert Hoover was a harmonizer. The NRA of Roosevelt's first term was Hooverism on steroids. The regulators wanted to put business in its place.
If we look at the Democrats' internal debates about health care over the past two years, we can see harmonizers who wanted to work with the insurance industry and regulators who wanted to work against it. What resulted was a compromise. The regulators did not get their "public option," but they did get all sorts of rules, such as a requirement that a minimum percentage of insurance company revenues has to be paid out in claims.
In the wake of the 1937-1938 recession, the harmonizers gave way to the regulators, in what Brinkley calls "the anti-monopoly moment." However, the regulators shifted away from attacking monopoly to promoting Keynesian fiscal policy. This was a further stage in what Brinkley sees as a retreat from fundamental economic reform.
Then came the second World War, which Brinkley says affected liberalism in a number of ways.
1. The fight against totalitarian regimes served to remind Americans of the dangers of an overbearing state. Although liberals scorned The Road to Serfdom, Hayek put them on the defensive, forcing them to reassure people that what I call their first disposition--to preserve individual freedom--was genuine.
2. The Nazis demonstrated that racial hatred could be more important than class conflict. This, along with the increasing pressure of African-Americans forced liberals to put the issue of racial justice onto the front burner. Previously, they had tried to bury the issue, in part because they thought it less important than class warfare (labor vs. capital) and in part because they knew that it would deprive them of their reliable Southern base, particularly in the Senate. Overall, this became part of a pivot away from economic issues and towards the issues of Civil Rights, women's rights, and the various movements that blossomed in the 60's.
3. War planning during the second World War produced no myth of "brief and glorious moment." The government came off looking disorganized and heavy-handed. Business came off looking patriotic. Support for what I call the second and third dispositions of liberalism decreased. In fact, the anti-business feelings were so dissipated that it took Dwight Eisenhower to speak up against the "military-industrial complex."
Finally, the loss of Roosevelt deprived liberals of a politician who could overcome forces that were opposed to liberalism. In addition to the "business interests" and "Southern reactionaries" blamed by Brinkley, I would say that there were a lot of ordinary Americans who just did not like big government. The liberals loved the Office of Price Administration, where technocrats like John Kenneth Galbraith could substitute their judgment for that of the market. The public hated it, as Brinkley acknowledges.
The last gasp of liberalism was the push for "full employment." This committed liberals to the use of Keynesian stimulus, and they still championed a larger welfare state, but all of this Brinkley dismisses this as simply an effort to maintain consumption. He winds up lugubriously, on p. 265-271:
they abandoned or greatly de-emphasized the abortive experiments in statist planning, the failed efforts to create cooperative associational arrangements, the vigorous if short-lived anti-monopoly crusades, the overt celebration of government, and the open skepticism toward capitalism and its captains.
...government would not seek to regulate corporate institutions so much as it would try to influence the business cycle. It would not try to redistribute economic power and limit inequality so much as it would create a compensatory welfare system...It would not reshape capitalist institutions. It would reshape the economic and social environment in which those institutions worked.
They had, in effect, detached liberalism from its earlier emphasis on reform--its preoccupation with issues of class, its tendency to equate freedom and democracy with economic autonomy, its hostility to concentrated economic power. They had redefined citizenship to de-emphasize the role of men and women as producers and to elevate their roles as consumers.
Brinkley says that this welfare-state Keynesian liberalism "foundered after 1973 in the face of global competition, environmental degradation, and deindustrialization." There is a glaring omission in this sentence, which is that the "foundering" consisted of failed economic policies. Not only did the seventies see high inflation along with high unemployment, but when Keynesians played their wage-price control trump card, it backfired.
Brinkley winds up by saying, "In the end, it was not as easy as many liberals once expected to create a just and prosperous society without worrying about the problems of production and the structure of the economy."
In other words, Brinkley laments that liberals abandoned their 1930's statism.