President Obama didn’t discuss the nation’s massive, swelling debt in his State of the Union address. Mitch Daniels did, and good for him: the flood of red ink really is the Niagara. Our accelerating drift toard the cliff, moreover, entails not only fiscal and economic but also institutional and constitutional consequences of grave import. State and local debts are a comparatively small tributary to the great stream, but they illustrate the point. State and local debts are composed of about upwards of $4 trillion in unfunded pension obligations; upwards of a half-trillion in other pension benefit obligations (mostly for health benefits), also unfunded; and about $2.9 trillion in municipal (state and local bonds). These debts will not be paid (at least not in real dollars), because they cannot be paid. The question is how and to whom our federal system is going to administer the haircut—and what changes it is likely to undergo in the process. Today’s post deals with the background causes and conditions of state debt; tomorrow’s, with federal bailouts; Monday’s, with fiscal federalism’s future. (It’s not the EU. It’s Argentina.) Read more
Samuel Goldman has written a bracing Liberty Forum essay suggesting that the Right side of the political spectrum is split, perhaps hopelessly and irrevocably, between classical liberalism and reaction. The roots of the divide are deep and enduring but what brings the problem into bold relief is our political moment and, above all, the rise of Donald Trump.
While Goldman’s essay has much that is valuable, I am skeptical of its dichotomy. The best reading of classical liberalism as a philosophy is to see it as more skeptical of the power of reason in ordinary politics than Goldman believes. Classical liberalism recognizes that humans are the bearers not simply of rights, but of passions, and that there are natural limitations to the scope of their knowledge. Hence it is a philosophy open to essential elements of conservatism, such as tradition and decentralization, that are to be distinguished from reaction. Classical liberals can recognize that human beings need other sources for governance than abstract reasoning, which is always in danger of becoming an instrument of passion rather than a catalyst for truth.
This fusion of liberalism and conservatism embodied by the best of classical liberalism is not only theoretically attractive. It is politically powerful. For most of this century, parties of the Right reflected a mixture of market liberalism and traditional conservatism. President Trump may seem to challenge this political settlement. But his rise to power was something of a fluke, driven by his celebrity and a fractured Republican field. In any event, it is striking that he has largely governed (as opposed to spoken) within the bounds of the fusionism that has marked Republican Presidents of modern times.
My strongest disagreement with Goldman lies in his claim about classical liberalism’s “confidence in reason.” It is true that classical liberalism is a philosophy born of the Enlightenment, and those who think of the philosophers of that era as simple enthusiasts of reason may see classical liberalism through that prism. But to me what is striking about many Enlightenment philosophers is their focus on the weakness of human reasoning. For David Hume, for instance, there were no essential truths outside of mathematics, just regularities that can be discovered by induction. Thus, Hume was a conservative who would not dismiss tradition as a guide to human affairs.
And many other Enlightenment thinkers would not agree with the forbearers of the Progressives, like Thomas Paine, that man has “the power to begin the world again.” That kind of sentiment is at odds with the both man’s experience of being historically bound and with the empiricism that the Age of Enlightenment delivered us. Indeed, the difference between liberalism of the Right and liberalism of the Left is that the former respects tradition as a safeguard in light of the mistakes of abstract reasoning that people in politics are led, whether through ignorance or passion, to make. The most important historian of liberalism, Jonathan Israel—himself a left-liberal—would agree that right-liberal Enlightenment thinkers like Hume and Edmund Burke disagreed in important ways with radical Enlighteners like Paine.
It was precisely because classical liberals saw human behavior as an object of empirical study that they deprecated the efficacy of reason in ordinary politics. The U.S. Constitution is basically a classically liberal document, and its animating principle is not that men in politics are apostles of reason, but rather that they are, in Richard Hofstadter’s phrase “atoms of interest.”
Thus, the Founding document of the American Republic was not based on optimism about reason, but on realism about self-interest. Self-interest in the private sphere and under the rule of law leads to prosperity, as theorists of the time like Adam Smith predicted. The Constitution tries to sustain the private sphere against detrimental governmental interference. Thus it provides substantial protection to property and enterprise through such provisions as the Contracts Clause and the Takings Clause.
Just as part of the Constitution was structured to facilitate the gains from trade that could result from the operation of self-interest in the private sphere, much of the rest of the Founding charter was designed to restrain the ill effects of the operation of self-interest in the public sphere. As Alexander Hamilton observed in Federalist 15:
Regard to reputation has a less active influence when the infamy of a bad action is to be divided among a number than when it is to fall singly upon one. A spirit of faction . . . will often hurry [its members] into improprieties and excesses for which they would blush in a private capacity.
Thus, the federal government was confined to a few important tasks to limit the danger that factions and leaders would use their overweening power for their own interests. Even for these essential tasks, the separation of powers and bicameralism raised the costs to factions of getting control of the entire government. The separation of powers also ensured that the branches would acquire different institutional interests, thus impeding control by a single faction or a stable coalition of factions.
States, of course, had large residual powers. But federalism here, too, restrained the power of faction by encouraging competition: If a regime became too oppressive or too inefficient, individuals could always leave. Federalism also permitted different jurisdictions to choose different social norms according to their traditions. If human reason has difficulty in fully determining what will be a flourishing life in different circumstances, a solution is to create more local forms of ordering, forms that are disciplined by the possibility of exit. Or another way of seeing the role of states under a regime of federalism is that they can at any time choose, with the help of traditional guides, a more appropriate tradeoff between liberty and license. Such adjustments cannot be determined by abstract reason.
Goldman may just see this analysis of the Constitution as coming from one of those academic lawyers who, as he says, “tend to regard themselves as custodians of majestic structures in a condition of severe but remediable decay.” But this analysis does more than call attention to the Constitution’s “majestic structure.” It shows that we have a governing system that does not exalt reason to the point of displacing traditional conservatism. It shows that our Founding principles offer a middle way between the kind of rationalist classical liberalism Goldman describes and conservatism.
Granted, following this analysis up to the present time leads us to notice a Constitution in decline. There’s no denying that the enormous modern administrative state is in tension with the separation of powers. The modern administrative state permits much easier routes for factions to impose national regulatory schemes than the Framers envisioned. Interpretations of the Commerce Clause and the spending power have enabled the national government to stop states from following local traditions and preferences.
But concern about this decline does not represent reaction. Decline, after all, is a gradual weakening and not a dissolution. To posit decline is not to posit a fundamental cleavage in history between one era and the next, in the manner of reactionary writers such as Joseph de Maistre.
Moreover, the decline is explicable by the very ideas and concerns that animated our Founding charter, like the concern about the dangers of faction. Mancur Olson, the great modern theorist of the nature of faction, showed that stable societies will generate more and more interest groups over time. A classical liberal constitution that is successful on its own terms sows the seeds of its own decline—by making the political landscape more fertile for the interest groups that will eat away at its checks and balances. Just as the Queen of Hearts in Through the Looking Glass must run to remain in place, so must a constitution change over time, if it is to maintain its safeguards against rent-seeking. This shows why reactionaries are wrong to believe that any age, golden as it may have been, can be recreated.
There is a fortunate up-side to constitutional decline, which is that, when the Constitution has declined enough, more diffuse groups start to take notice. We thus have more fundamental efforts at constitutional renewal today than any time that I have been an academic. Originalism is on the rise; this offers some prospect of restoring the original structure of the Constitution, with its classically liberal fusion of liberalism and conservatism.
Non-constitutional efforts are also under way to constrain the administrative state. For instance, a Republican-controlled Congress is considering the Regulations from the Executive in Need of Scrutiny (REINS) Act, which would require Congress to consider (in a streamlined fashion) and enact expensive agency regulations before these regulations could come into force. Passage of this law would empower centrist voters, who are better represented in Congress, particularly in the Senate. It would raise substantial barriers to the growth of the regulatory state and in turn provide more space for federalism and tradition.
And beyond these efforts to revive self-government, there are serious efforts on the Right to construct polices that will meet our moment and not simply repeat the mantras of Reaganism. So-called reform conservatism has a variety of policies to try to restore stability to the working class.
That is not to say that Goldman is right to characterize some longstanding concerns of Republicans as anachronistic. They aren’t. Personal tax rates may not be sky high now (although they are a lot higher than they were in the Reagan era). But entitlements must be substantially reformed or tax rates will get a lot higher soon. Moreover, the Right was concerned about overregulation in the Reagan era and overregulation is at least as great of a problem today. In short, the size and scope of government and thus taxes and regulation must remain an enduring concern of classical liberals and conservatives, if the nation state is not to crowd out freedom and those institutions of society that are likely to be the locus of more beneficent norms.
Goldman argues that Trump’s election accentuates the crack-up on the Right. This is now a familiar thesis, but I do not think events have yet borne it out. First, his election was in large part an accident of peculiar circumstances. Precisely because of human freedom, there is a lot of contingency in any one election. The Republican field was unusually fragmented at the beginning. And the anti-Trump forces never united behind a candidate close to the median Republican voter. Ted Cruz was too far to the right and John Kasich was too far to the left. And their egos as well prevented them from presenting, as they could have, a unity ticket against Trump. Most importantly of all, Trump had a very unusual power of celebrity that allowed him to reap the benefits of free media: it is estimated that he got more attention than all his rivals combined and this was the equivalent of billions of dollars of free advertising. Even his general election victory required a very weak opponent in Hillary Clinton. Any serious Republican nominee would have also beaten her, even if the electoral path of a different nominee would have diverged somewhat from Trump’s.
And once in officeTrump has proved a relatively traditional Republican in action. His Supreme Court appointment, Neil Gorsuch, would have been on the list of any Republican President in 2017. And importantly, Gorsuch is an originalist—exactly the kind of justice who can restore the fusion between liberalism and tradition that reflects the original constitutional settlement. Trump’s cabinet appointments have been imaginable in most Republican administrations. What distinguishes them is not so much their ideology but their strong business backgrounds.
And Trump’s policies have also been those that would be pursued by most Republican Presidents: rolling back Obamacare and corporate and personal tax cuts, and cutting back on regulations. It is true that he is antagonistic toward immigration and trade, but in the latter case, other than terminating the Trans-Pacific Partnership, his bark may be worse for classical liberalism than his bite. His Treasury and Commerce Secretaries are no hardcore protectionists and Trump has already disavowed some his more extreme “America First” campaign pledges like calling China a currency manipulator. It may be true that classical liberals have trouble winning elections, but populists have trouble winning reelection because the consequences of populist polices have results that are often not popular and Trump has many people around him who recognize this.
Thus, the story of Trump in government so far is not the crack-up of fusionism, but its continuing vitality. Being President is disciplining—in policy if not in speech—a candidate wholly unschooled in the traditions of either classical liberalism or conservatism.
I see the fusion of classical liberalism and conservatism as battered but still in the arena. As it should be. Classical liberals and conservatives agree on important premises of politics, like personal responsibility and skepticism of social engineering. Moreover, their union is likely to be sustained by the revival of the Left in the United States. Whatever their disagreements, even paleoconservatives and extreme libertarians are likely to unite against the next Democratic presidential nominee, be it Elizabeth Warren, Kamala Harris, or Bernie Sanders. The Right still has a philosophical coherence, but it is energized, like all political movements, by its enemies.