Booked: The End of Managerial Liberalism, with K. Sabeel Rahman

Booked: The End of Managerial Liberalism, with K. Sabeel Rahman

K. Sabeel Rahman talks about his new book Democracy against Domination, and why liberals need to recover a language of economic power.

Booked is a monthly series of Q&As with authors by contributing editor Timothy Shenk. For this podcast edition, Tim spoke with K. Sabeel Rahman about his new book, Democracy against Domination (Oxford University Press, 2016). Use the player to listen to a recording of their conversation, or read an edited version below.

Podcast: Download

Timothy Shenk: You start the book with Barack Obama’s January 2008 victory in the Iowa caucuses. Why begin there?

Sabeel Rahman: When Obama gave that speech, we were already witnessing the first waves of what would later become the financial crisis, the meltdown that culminated in the fall of Lehman Brothers in September. By the time the 2008 election was over, we had a new president who had run on a platform of reinvigorating government, making it more responsive to the people. Simultaneously, our financial system was collapsing, leading to the worst economic downturn since the Great Depression. That convergence of an attempt to remake our democracy—assuming we take Obama’s argument about his own candidacy at face value—and this crisis of the economy put in stark terms the challenge of twenty-first century progressivism.

The book is really an attempt to step back from that moment, and to ask the question: What does a twenty-first century progressivism look like in light of those two challenges?

Shenk: In order to do that you step back quite a bit historically and look to the Progressive Era, which you argue is an untapped source of potential resources that we can draw upon for thinking through the challenges that we face today.

Before we dive into that history, though, I think we should be clear about how exactly you understand our current moment. You think we’re divided by two main approaches to economic governance. The first you call managerial, the second you call laissez-faire. Can you flesh out those concepts?

Rahman: In common parlance, we’re used to thinking about economic governance questions as about a battle between free markets—laissez-faire, libertarian, conservative ideas—and liberal big government. But the laissez-faire argument isn’t just about asserting that everything government does is wrong. It’s also a positive argument that the market as a system is a way of ensuring that the economy works towards the public good and prevents concentrations of unaccountable power. You see this in the political theory of figures like Friedrich Hayek and Milton Friedman, but you also see it in the history of laissez-faire in law and public policy.

At the turn of the century, industrialization is taking place and people are trying to figure out what role government will play in a new economy. Laissez-faire legal thought during that period is really resistant to things like the minimum wage or labor unionization. But a chief argument advanced through the courts is the idea that laissez-faire market structures are resistant to being captured by any particular interest.

While I don’t want to downplay that those arguments were often motivated by self-interest, I do think, intellectually, there’s a deep concern about the accountability and responsiveness of public politics. That’s part of what gives the laissez-faire argument its potency, and we have to address that.

Shenk: So there’s a real, democratic justification for laissez-faire.

Rahman: Yes, and once you you’re able to address that interpretation of the laissez-faire argument, that then casts into relief some of the limitations of managerialism.

Managerialism is what we now most commonly associate with liberal progressive politics, especially after the New Deal. It’s the idea that the way to respond to problems in the economy is to set up government institutions. But those institutions are very much top-down, giving regulatory power to a small group of experts.

The Federal Reserve is a prime example. We’re not going to leave the market to its own devices—we need some way of making sure that it actually works for everyone—but our way of doing that involves giving a lot of power and insulation to really smart experts who are going to tinker with the system to make it work well.

Managerialism doesn’t speak to the underlying concerns about power, accountability, and democracy that underlie the laissez-faire critique and the historical debates about the role of government in the early twentieth century.

Shenk: But you argue that there’s a third tradition that gets lost, a more democratic tradition.

Rahman: In the pre-New Deal era, when the technocratic managerial ideas of government are starting to emerge and the laissez-faire argument is on the table, there was a third strain. This third tradition is a democratic critique that takes seriously the problem of private power. Like the managerial view, it is wise to the fact that free markets aren’t free, and you need some way of checking economic power. But, like the laissez-faire idea, it also takes seriously the idea that government on its own is not guaranteed to serve the public good, that you need to structure government in ways that are deeply democratically responsive. Louis Brandeis, John Dewey, legal realists like Robert Hale and Morris Cohen all subscribed to this. Brandeis and Dewey in particular really gravitated towards the moral value of democracy and in their work I see an attempt to think through what a more democratic solution looks like institutionally. I think we really need to bring this tradition back to life as we’re thinking about twenty-first-century progressive politics.

Shenk: But it’s not as if people have never heard of Brandeis and Dewey. Why was this tradition forgotten, if it was once so powerful and was embraced by some of the most influential legal thinkers of their generation?

Rahman: There’s a really important arc here, from the era of Brandeis to the modern era. I frame it as going through these two or three important transformations or phases. The first transformation takes place through the New Deal. In a lot of ways the New Deal does realize some of the substantive policy aspirations of Progressive Era thought, including some Deweyan and Brandeisian notions. For example, creating institutions to regulate monopolies and anti-trust regulations, setting up a social safety net, labor bargaining, the Wagner Act—there’s lots of things coming to fruition.

But what’s distinctive about the New Deal is that it puts into place a particular view of what kinds of institutions are needed to respond to the problems of market power, a view that rests on this idea of expertise. James Landis, who drafts the bill creating the SEC and later becomes its commissioner, is a disciple of Brandeis’s. But his take on the governance question is that you need technocratic bodies, populated with experts, because traditional democratic institutions were outdated. So that first transformation takes into account a critique of the market, but responds to it with a faith in expertise.

The second transformation involves the resurgence of laissez-faire—the neoliberal critique of Hayek and Friedman, which emerges in the seventies and eighties. That critique is built to take down the New Deal state, and a central part of that critique is focused on the New Deal’s faith in expertise. Regulatory institutions—and the experts who run them—are prone to capture, they’re likely to be co-opted and corrupted, whereas the neoliberals harkened to this classical idea of a self-correcting market. A key part of the persuasiveness of that argument is that there are very real limits to what technocratic institutions and individuals can know and accomplish.

In the face of this resurgent critique, instead of taking the critique more seriously, the response has been to double down on a more limited, minimal version of New Deal technocracy. It’s still relying on expertise, but where the New Deal had a pretty robust, muscular view of what it was going to deploy the state to do—to manage labor relations and to manage the market in an aggressive way—the late-twentieth-century response to the neoliberal critique essentially took a lot of free market views on board and said, “Look, we’re still going to rely on expertise, because they’re more trustworthy than messy democratic politics, but we’re not going to go quite as far. We’re going to rely more on public-private partnerships, market mechanisms, cost-benefit analysis.” You see this in the administrative state of regulatory policy in the Bill Clinton era, for example.

Shenk: And you believe that any sense of power gets lost along the way, hence Democracy against Domination.

Rahman: The two things that end up getting lost are: first, a focus on domination, that instead of government being directed against economic power, now government is focused on merely optimizing an existing market structure. And second, instead of democracy, government is doing this project of optimizing through top-down expertise. By the time you get to the end of the twentieth century, we’ve lost both parts of this nascent democratic vision that was alive pre-New Deal.

Shenk: This account reminded me of the West Wing, this quintessential example of late nineties, early aughts American liberal culture, where Aaron Sorkin made his hero-president into a Nobel Prize winning economist—because of course he has to be smarter than everyone, he had to embody this ideal. So is the argument that, over the course of the twentieth century, the balance the New Deal struck between an expert-dominated state and a robust sense of the public interest gave way to a vision where questions of power and domination were replaced by a singular focus on efficiency?

Rahman: Right. I’d add an additional gloss, that especially in the latter half of the twentieth century, liberals became enamored of the idea of growth and efficiency. And the idea of expertise was used to bypass some of the more controversial, normative questions that arise when you’re engaging with say, redistribution or problems of power.

Shenk: That takes us back Obama. Do you think Obama ran as a small-d democrat and governed as a managerial technocrat?

Rahman: I think that’s exactly it. There are a lot of things that I support and appreciate about the Obama administration, but one of the things that’s really clear to me about looking at it over the course of its duration is that it had a very thin notion of what democracy means, and what democracy could mean.

In 2010 Obama goes to Cooper Union in New York and gives a speech defending his Wall Street reform package. And outside there are protestors who are enraged about inequality and about the problem of finance. They want these Wall Street CEOs to go to jail for causing the financial crisis, meanwhile inside the room those same CEOs are standing in the front row. And Obama makes what is essentially a New Deal-style pitch. He explains that the problem of the financial crisis was really one of risk management, that our models and institutions just weren’t sophisticated enough to manage complex financial products. His solution: give more resources and authority to the Fed, for example, to manage systemic risk.

What we got with the Wall Street reform package was a solution in the technocratic mode. The fact that it has continued to be so controversial and, on both left and right, is indicative that it was missing something significant about what was morally troubling about the financial crisis.

Shenk: You finished writing this book before the Bernie Sanders campaign really got going. How much resonance do you see between the platform you’re outlining here and what Sanders was talking about on the campaign trail?

Rahman: I see a lot of resonance. In a lot of ways the book, at its core, is a critique of liberal managerialism, with a warning that we need to recover a more power-oriented critique of markets, and a more small-d democratic way of governing.

I’ve been thinking a lot since this election about one of the subtexts of the book. In moments of economic upheaval and societal transformation, things become suddenly up for grabs. Deep commitments about our understanding of government, of markets, and our moral understanding of what this is all about are suddenly open to revision and reinterpretation. In those moments of flux, in the absence of a morally compelling, progressive populism, other things fill that void.

There’s a way to see the Trump phenomenon as an example of a kind of right-wing populism that is speaking to some of the same root concerns about a government that seems not democratic, and an economy that doesn’t seem to work for us as a collective. In the closing pages of the book I reference this worry that, in the absence of a progressive populist vision, what could gain traction are exclusionary populisms, where the solution is to offer a much more truncated view of who the people are, and to present that as a solution to this problem of disempowerment.

Shenk: How do you think the DC-policy-wonk-liberal community—a community that you’re connected to—is going to respond to Trump, this disaster they didn’t see coming?

Rahman: There’s a lot of soul-searching happening in different progressive, liberal communities. There are a couple of fault lines emerging. One clear one—the argument raised by Sanders in his primary challenge—is forming around this idea that we really do have to rethink the mainstream, liberal acceptance of market dynamics, of economic growth, of efficiency, and recover a language of economic power. There are very real ways in which power is what’s keeping the economy from working for the bulk of communities, whether it’s finance or the resurgence of new monopolies in all sorts of industries.

I think the other fault line is brought to the fore by the Black Lives Matter movement, which gets to this question of inclusion and exclusion: What are the ways in which our polity has tended to create structural forms of racial exclusion? Even at its height, the New Deal was premised on a presumption of who is included in the social contract and who is not.

The real challenge for progressive politics is to understand and figure out how to synthesize or fuse these two critiques: the structural economic critique of how power operates in the market, and the structural racial critique of how many of those dynamics are themselves racialized. It’s a difficult needle to thread.

One of the things I’ve been fascinated by are those certain moments, historically, where radical racial justice movements were fusing with radical economic justice movements. In the early labor republican movement of the late-nineteenth century, people coming out of the abolition movement are connecting with people in labor and populism. We often downplay the structural economic critique that was embedded in the civil rights movement and its successor, the welfare rights movement.

The way forward is about recovering that tradition of getting racial justice and economic justice into conversation with one another, of informing and improving one another.

Shenk: We’re at a moment when Bernie Sanders is trying to legitimize the place of socialism in the public sphere, but Marxism doesn’t really come up in your book. I was wondering how that would fit into the story you’re telling, if not as a powerful political tradition in the United States, then as an analytic that might be useful in the years ahead.

Rahman: It connects in a couple of different ways. First, it’s in the subtext. Dewey is very much in dialogue with his socialist counterparts in Europe. Part of my approach in the book was to self-consciously root my argument in a distinctively American tradition of political economy, on folks like Brandeis and Dewey.

Shenk: Which Sanders did as well. He just went to Eugene Debs and FDR instead of Brandeis and Dewey.

Rahman: But that’s telling too, because unlike, say Debs and FDR, the Deweyan and Brandeisian version of this is more oriented towards small-d democracy. A genuinely participatory institution is not the intention, necessarily, with other analytical traditions, like socialism and Marxism.

Shenk: This question of how to make a regulatory apparatus feel like an important part of our politics is another key theme in the book. I wonder, though, whether one reason why technocrats have so much say over regulation is that they are the only ones—other than members of the industry’s being regulated—who can get excited about and invested in these questions of public policy in the first place.

Rahman: A lot of what we think of as failures of democracy are actually failures of insufficient democracy. We’re so used to our own limited idea of what we as citizens are supposed to do and are empowered to do that we think that if all we have are elections and public opinions, that’s democracy. But the problem with that is that it doesn’t speak to this deeper moral concern about disempowerment. People rightly feel alienated from these broad economic and political structures that shape their life prospects but over which they have no control.

To pull this off, we’ll need to design our institutions very differently, in a more participatory way. We’ll need to invest in civil society and organizing, whether through labor or other kinds of community-based organizations that give people a sense of belonging and empowerment, and that ability to plug into public policy.

That’s the challenge we need to take on, and the longer we fool ourselves into thinking that we can get by leaving democracy in its emaciated form and just trying to do the public’s business through top-down technocratic means, we’re going to fall further and further behind as a progressive movement.

Shenk: Thinking about the state of democracy today, though, we’re confronted with a system where partisan differences are as intense as they’ve ever been and the parties themselves increasingly split along racial lines. How do you reconcile your agenda with this system?

Rahman: I think many of us are struggling to figure out where we go from here after this election and after the ugliness of the campaign. I share a lot of those fears. But I’m an optimist at heart; I think there’s a way forward. I think these things operate not on four-year cycles but on five-, ten-, fifteen-year time horizons. When I started writing the book, I wanted to start contributing to a larger conversation about the moral core of our progressivism.

The future of the progressive movement, after this election, requires three things: The first is a deep commitment to economic inclusion that takes the problems of domination seriously. That means getting past our predilection for liberal wonkery and foregrounding some of these moral questions about private power, economic power, and economic injustice.

The second thing we need is a commitment to solving these problems democratically rather than handing them to experts to solve. I think we’re seeing progressives debating these questions already even in these few days since the election.

The third thing is to do all this in a way that deepens and reasserts our commitment to inclusion, to counteract racial and xenophobic fears that this election has brought forth. And that’s really hard. I don’t know if I have a long-term answer or game plan for that, but my hope is that by tackling these questions head-on and addressing them as fundamental moral questions, not just technical policy questions, we can get closer to a kind of new progressive synthesis. It’s going to take a lot of time, but I’m hopeful that we can do it.

And one more thing, which has been on my mind since the election, is that we’re in another moment of economic transformation, and, much like what we saw in the response to industrialization, the movements, communities, and constituencies that are doing some of the best rethinking of what an inclusive economy looks like, what a democratic polity looks like, are forming interesting alliances between communities of color and workers of different stripes. The National Domestic Workers’ Alliance, who are largely women of color, are advancing a vision of what the new social safety net needs to look like. Their ideas actually work really well for workers of all stripes; there is universality embedded in some of the critiques emerging from particular constituencies and communities. There’s room for us to build out those critiques and create something more lasting and inclusive.

Shenk: One last question, which maybe emerges less from optimism than from schadenfreude: what do you think happens to the liberal experts under Trump?

Rahman: They’ve had a tough time, but they’re also remarkably resilient. We just cannot get over our fascination with technocracy. What I would like to see is a bit of humility about liberal wonkery. Maybe we can’t figure it all out just by putting smart people in a room. I think that some of the bottom-up critiques that are emerging on the left—from the Sanders-Warren wing of the Democratic Party, from the Movement for Black Lives, among others—are really starting flip the order of priority. Instead of the expert wonks setting the table and then other people following along, we’re looking to subordinate expertise to serve the moral ends of these critiques, which is actually what Dewey had in mind. Dewey isn’t saying that expertise is bad or wrong. He just wants it to be deployed to figure out how to achieve the ends that the democratic polity chooses. I want experts to figure out how to break up the banks and solve monopoly power and solve structural racism—that’s going to require expertise—but the polity needs to tell them to prioritize those things.

K. Sabeel Rahman is an Assistant Professor of Law at Brooklyn Law School, and the author of Democracy against Domination (Oxford University Press, 2016).

Timothy Shenk is a Carnegie Fellow at New America and a book review editor at Dissent. He is the author of Maurice Dobb: Political Economist.