The American Interest
Democracy, Development & the Rule of Law
Published on July 28, 2012
Conservatives and the State

When I was asked by the editors of the Financial Times to contribute to a series on the future of conservatism, I hesitated because it seemed to me that in both the US and Europe what was most needed was not a new form of conservatism but rather a reinvention of the left. For more than a generation we have been under the sway of conservative ideas, against which there has been little serious competition. In the wake of the financial crisis and the rise of massive inequality, there should be an upsurge of left-wing populism, and yet some of the most energized populists both in the US and Europe are on the right. There are many reasons for this, but one of them is surely that publics around the world have very little confidence that the left has any credible solutions to our current problems.

The rise of the French Socialists and Syriza in Greece does not belie this fact; both are throwbacks to an old and exhausted left that will sooner rather than later have to confront the dire fiscal situation of their societies. What we need is a left that can stem the loss of rich-world middle class jobs and incomes through forms of redistribution that do not undermine economic growth or long-term fiscal health.

But if you can’t solve the problem from the left, maybe you can do it from the right. The model for a future American conservatism has been out there for some time: a renewal of the tradition of Alexander Hamilton and Theodore Roosevelt that sees the necessity of a strong if limited state, and that uses state power for the purposes of national revival. The principles it would seek to promote are private property and a competitive market economy; fiscal responsibility; identity and foreign policy based on nation and national interest rather than some global cosmopolitan ideal. But it would see the state as a facilitator rather than an enemy of these objectives.

Distrust of state authority has of course been a key component of American exceptionalism, both on the right and the left. The contemporary right has taken this, however, to an absurd extreme, seeking to turn the clock back not just to the point before the New Deal, but before the progressive era at the turn of the 20th century. The Republican party has lost sight of the difference between limited government and weak government, reflected in its agenda of cutting money for enforcement capacity of regulators and the IRS, its aversion to taxes of any sort and its failure to see that threats to liberty can come from powerful actors besides the state.

A new kind of conservative might look at the presidency of Theodore Roosevelt for inspiration. Just as in the present, American capitalism in the late 19th century had generated powerful new interests, particularly the railroads and oil interests that provoked huge conflicts with farmers, shippers and their own workers. Roosevelt believed that no private interest should be more powerful than the American state, and set about to ensure that by going after Northern Securities and other trusts. One imagines that if he had been president during the 2008-2009 financial crisis, he would not have been satisfied with the regulatory hodgepodge that is Dodd-Frank, but would have sought to break Goldman Sachs and JPMorgan Chase up into smaller pieces that could safely be allowed to go bankrupt if they took undue risks. If a new breed of conservatism could put Wall Street in its place, then it would have much more credibility taking on public sector unions and other interest groups on the left, just as Roosevelt did.

If contemporary conservatives could get over their ideological aversion to the state, they would recognise that American government is both necessary and in great need of reform rather than abolition. Private sector companies have undergone huge changes in recent decades, flattening managerial hierarchies, upgrading workforce skills and experimenting ceaselessly with new organizational forms.

American government, by contrast, seems trapped in a late 19th-century bureaucratic model of rules and hierarchy. It needs to be smaller but also stronger and more effective. And this will not happen unless people see public service as a calling, rather than a despised occupation for people unable to make it in the private sector. In this regard, conservatives have an advantage because they can call people to public duty on the basis of the American nation rather than abstract ideals.

Recovery of strong-state conservatism would have important foreign policy consequences. It would imply continuing investments in US military power and engagement in the world to maintain a balance of power favourable to American interests. This position is consistent, however, with a careful husbanding of national power: instead of undermining the American fiscal position through costly wars, it would see rebuilding of the economy as a precondition for a reassertion of military power over the long run.

Recovery of a Hamiltonian-Rooseveltian conservatism would require junking a lot of the ideas that have animated the right since the rise of Ronald Reagan, such as the willingness to tolerate deficits as long as this meant lower taxes. But while this older tradition is in certain respects similar to strands of European conservatism, it is also profoundly American.

Both Hamilton and Roosevelt believed strongly both in the exceptional character of the American regime and in the idea of progress. Hamilton foresaw that a centralised state would be necessary to create a national market, and an economy based on manufacturing. Roosevelt understood that the industrial economy had unleashed forces that needed to be tamed. They saw national power as a tool to achieve their ends, something to be nurtured and built rather than demonised as something to be drowned in a bathtub.

The chance, of course, that any version of this conservative vision will be adopted by the contemporary Republican Party is close to zero.  If Mitt Romney is defeated in November, we will not see an internal soul-searching over the basic agenda, but rather the argument that he lost because he wasn’t conservative enough.

Moreover, what ties many Republican legislators to their libertarian views has less to do with strong ideological conviction than where their bread is buttered.  When Jamie Dimon  was called to testify on JP Morgan Chase’s multi-billion dollar loss before the Senate Banking Committee, the Republican members put on an appalling performance, unctuously flattering him and asking him to confirm that we didn’t need more bank regulation.   My reaction was that they couldn’t possibly be such big idiots; they were simply following the money trail.  So if you want to change the nature of conservatism, you’ve also got to change the flow of resources and the way that they affect American politics.

[A version of this piece appeared in the Financial Times on July 20, 2012.]

  • Abelardo A. Tous-Mulkay

    Mr. Fukuyama wants American Conservatism to evolve, and he looks back to none other than Teddy I-Love-Big-Government Roosevelt? Oh well, he got it wrong with The End of History, so no surprise here and he gets it wrong again… Mr. Fukuyama, back to the drawing boards please: you’re out-of-style, out-of-sync and out-of-ideas.

    • Ken moss

      Totally agree, he has “forgotten” that the govt, R or D spends spends spends so Reagan ent it first on something of real value, defense that buried the commies. That is why we,America supported deficits so get clear the danger to us is the GOVT no one else has the power to enslave us citizens

      • Rodrigo

        There’s a difference between big government and strong government. FF is calling conservatives to acknowledge that difference and support a strong state rather than an inexistent one. Surely this is clear from the piece.

  • John Barker

    “The principles it would seek to promote are private property and a competitive market economy; fiscal responsibility; identity and foreign policy based on nation and national interest rather than some global cosmopolitan ideal. But it would see the state as a facilitator rather than an enemy of these objectives.”

    Now we see the role that this journal may play in the years ahead. How about this statement as the mission of AI. I am going to paste it on my computer so I see it every day.

  • Anthony

    “So if you want to change the nature of conservatism, you’ve got to change the flow of resources and the way that they affect American politics.” In line with aforementioned idea, an interesting and historically contextual supplemental article “The Conservative Welfare State” by Michael Lind highlights some of issues raised.

  • http://www.http.politicsplusstuff.blogspot.com Rick B

    Dr. Fukuyama, this is an outstanding challenge. I have found the model you presented in “The Origins of Political Order” extremely illuminating, especially when filtered through Ernest Gelner’s discussion of the culture of modernism in “Nations and Nationalism.” (E. J. Hobsbawm built on this later.)

    Here’s what I think is happening in America today. We are still in the process of moving from an agricultural rural low-population density culture to one of industrialism, urbanism, and high population density. But our Constitution was designed to protect the power of the dominant class in 1786 – the rural planters using slave labor to gain wealth by growing crops need in the nascent English industrial society. They specifically designed the Constitution to protect the rural agricultural society from domination by the “city mobs.”

    Check out the 1940 Census reports recently put on line. Most people at that time were born and raised on farms or in farming communities. Since then almost everyone born has either moved to or been born in a large city based on industrial (socially bureaucratic and rational) society.

    But our Constitution gives preference to the low-population density areas in both the Senate and in the Electoral College. Also, successful politicians are older – they harken back to the culture they learned before age 10. That culture does not change in many people, and politicians who change their nature are soon defeated. (I leave the mechanism for that to the reader to discern.)

    My conclusion from this is that America is right now suffering from a clash of the rural agricultural culture which is favored in the Constitution with the newer Industrial urbanized culture. Gellner describes the differences between those cultures very well. (Hobsbawm is more detailed but less clear.)

    Your book and Gellner’s book on Nationalism have set me on this set of concepts. I see little difference between fascism and American Neocon “philosophy” but I have found your book on the “origins of political order” to be extremely illuminating. This post of yours is also very illuminating and challenging.

    So where do these ideas go from here?

    Any agreement or disagreement with what I wrote would be appreciated. I can be reached by email through my blog. I am looking for a seminar on these many subjects and I am not an academic at your level.

    • Victory over Eurasia

      nicely put, Rick B. The imbalance built in to the constitution at the neginning is now coming back to severly limit the US in the coming century. Whether or not this imbalance in influence (each SD citizen’s vote has 50X as much weight in the Senate versus a CA voter) can be sustained is an interesting question, but I cannot envision the political environment that is ready to tackle this. The selfish interests of these states will be ably abetted by the post Citizen’s United super-PACS and ALEC. Why bother trying to buy a senate seat in CA, NY or TX when you can buy an equally valuable seat in eg ND or SD for far less cost and outside of the sight on national media or attention.

      This situation, coupled with the reckless irresponsibility of GOP today bodes ill for the future

    • MichaelM

      Your reading of the roots of the American Constitution is somewhat flawed. The primary interest group pushing for the Constitution in the first place was a set of nationalists mostly consisting of urban merchants and financiers. The Constitution represented a kind of counter-revolution against the radicalism of the Critical Period.

      However, the planters were on BOTH sides of this debate — Washington was a nationalist, Jefferson was a radical. This was a matter of ideological vision: Washington believed in the importance of a strong, central sovereignty bearing all the forms and styles of a gentry republicanism, while Jefferson believed in a more substantial, democratic republicanism. Hamilton, Morris, and the financier/merchant interest group tended to just have more extreme versions of the ideas that men like Washington held.

      Your and Fukuyama’s calls to return to a kind of national liberalism ala Hamiltonianism misses everything that happened between Hamilton and Teddy. You can’t dismiss a century of policy in a paragraph. The Democratic-Republicans in the North weren’t against the policy program of the Federalists because they were a privileged class of slave-owning planters, they were against it because it benefited the wealthy in the cities (NOT the cities in general — urban poor tended to vote Democratic-Republican TOO) at THEIR expense.

      The same story repeated a century later — Teddy’s platform was push-back AGAINST the Hamiltonianism that had triumphed in the Civil War years under Lincoln’s nose. It had more in common with the social liberalism of contemporary Britain than the National Liberalism of the past century.

      If you really, really want conservatives to become National Liberalism Mk. II, at least know your history.

  • Lionhead

    I can see why you wrote this for the Financial Times. Could your motives be anymore transparent? So, we are to go back to “Progressive Lite” of 100 years ago. That’s your prescription? At least you acknowledge your beloved Progressivism is dying a tortured death of failure.

    How about we go back to the Constitution, sound money, Austrian Economics, Free Markets, Small Gov’t, et al. Personally sir, I’m tired of reading drivel by authors like you who are spreading this non-sense. Get Real or Go Home to your faculty lounge. Enough!

  • Ben, Okla. City

    Big centralized government is here to stay. Yearning for an idealized past (that ignores the significant role that government has played in our national economic development since 1790) is not going to change that.

    It’s easy to gripe about government. That’s fine, as long as it doesn’t lead to today’s cynicism on the right that government “can’t do anything right”. We need to reintroduce the Hamilton-Clay-Lincoln DNA back into discourse on the right. We have national challenges that require government to work in order to successfully deal with those challenges. Let’s have a dynamic tension between the Jefferson-Jackson vision and the Hamiltonian vision. Right now conservatism leans way too much to the former, while despising the latter.

  • tddfx

    Conservatives should recognize that on matters of international trade and investment policy, the United States slavishly adheres to the liberal paradigm. The institutional logic of U.S. foreign economic policy, forged in the aftermath of World War II assumes that free markets and a “level playing field” will always work in favor of the long-term US national interest. This assumption continues today, despite clear evidence that US commercial diplomacy is entirely too weak to contend with competitive threats posed by state-capitalism.

    When it comes to trade, strong states are able to adjust the competitive equilibrium to serve their interests at the expense of trading partners. The proper response to such predation may be more liberalism or less, depending on the situation. At present, America’s most potent economic policy tools work only in the liberalizing direction – a weakness US conservatives should be eager to address.

    I was therefore troubled by your emphasis on breaking up the top US banks. I suspect that a 21st Century Teddy Roosevelt would assign higher priority to checking the power of foreign state-owned enterprises than to sinking America’s flagships.

    • http://www.http.politicsplusstuff.blogspot.com Rick B

      Yeah, and free trade is always better. So the US and Mexico negotiated NAFTA which required that Mexico eliminate the protective tariffs on corn, beans and pork. The result was that ADM and the other agricultural giants could sell corn, beans and pork in Mexico cheaper than the 2 million subsistence farms could produce them. The people from those farms started moving to cities that offer industrial jobs.

      Only there are not that many industrial jobs in Mexico. Guess why they immigrated to the U.S.? That’s where the jobs are.

      Yes, it’s analogous to Enclosure in England. So why is everyone upset over immigrants from Mexico? Oh, and the 1965 immigration law put a quota of 18200 per year on Mexico. The rest have no documentation. It also declared being in the U.S. without documentation was – for the first time ever – a criminal offense. Those immigrants have brown skin and speak Spanish.

      The U.S. has created a false immigration crisis, displaying the American stupidity crisis. And it is all simple free market economics.

      • Colin

        Completely wrong. I am a strong free enterpriser in the Mises tradition, but I am also a demographic realist. The great force causing America’s decline is domestic liberalism – the combination of economic quasi-socialism (Democrat Party encouraged “rent-seeking”), with social permissiveness and multicultural divisiveness. What empowers the liberals/Democrats politically is the growth of the nonwhite population, which is solely a function of unnecessary mass immigration, which needs to be reconceptualized as Democrat Voter Importation.

        For the USA to endure, cultural assimilation of the 50 MILLION nonwhite immigrants we have stupidly allowed into our country since 1965 must be enforced. We can only do this by ending the current and ongoing immigration invasion. Stopping immigration is the most important issue of our time.

  • http://www.ergsec.ca J Story

    The problem, it seems to me, with a strong ‘conservative’ state is that the state will continue to be strong when political winds shift toward a different philosophy.

  • Percy

    Wait, I thought the Weekly Standard was the magazine dedicated to “national greatness” conservatism that had George W Bush as its avatar. Or am I missing something?

    Today’s GOP does not want to return to pre-Progressive GOP politics. It wants to return to an anachronistic chimera of pre-Progressive *Democratic* domestic policy and Wilsonian internationalism on steroids. It’s a bizarre creature.

  • http://blog.btmarine.com Jud Lohmeyer

    You are poking around the edges, the crisis has grown too large to adjust the party ideologies. We have a failed party system locked ideological paralysis. The US is facing the worst economic crisis in a hundred years yet we are witnessing a Presidential election with two candidates with no proposals to address the crisis. I won’t list the internal and external crises facing the US, but it long and diverse. I fear only near collapse will trigger new thinking and leaders. Apparently the banking crisis wasn’t enough and only re-enforced political ideology. So the politicians are doubling down on the failed policies that caused the current economic crisis. I think only rioting in the streets is going to get the attention of the political class. As it stands now both parties continue to feed off the largess of corporate America.

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  • thibaud

    Roosevelt was a Progressive, which in today’s Tea Party GOP has become a dirty word.

    Also, the likes of the Koch Brothers and their ilk aren’t pro-market; they’re pro-business. A huge difference.

    Contemporary US “smash-the-state” types aren’t conservative. They’re radical zealots who fail to grasp that capitalism to be effective needs a strong regulatory state.

    For an example of an alternative to starve-the-state Norquist/TP silliness, here’s Sen. Lamar Alexander’s proposal to rationalize and slow the growth in the fastest growing burden on state governments. Lamar proposes “letting Washington handle health care and the states handle education.”

    http://online.wsj.com/article/SB10001424052702304371504577405782138051376.html

    • http://www.http.politicsplusstuff.blogspot.com Rick B

      The Koch brother are not pro-business. That’s putting an inappropriate economics theory on top of a family power demand. They simply want personal and family power exactly like the feudal military powers in Europe did 600 years ago.

      The current problem for America is that we have allowed the wealthy free loaders to gain too much political power. They are in exactly the same position as the French agricultural aristocrats in the 17th century of France. They take economic rent off of the producers of wealth and use the resulting power to continue to skim economic rent off the economy.

      They will consistently resist any effort to stop their skimming of rent from the economy and since that rent gives them great political power they will damage the economy to maintain their power. As long as the Koch brothers and other wealthy individuals can warp the political system America will continue to decline internationally. America’s real wealth is in the capability of its people to build and innovate. The Koch brother will never do anything except protect their on position. And there are many like them destroying this nation.

      It’s the Latin American model society. 2% wealthy, 8% to 10% their immediate lackeys, and everyone else scrapping to survive.

      • http://www.http.politicsplusstuff.blogspot.com Rick B

        The history of the French aristocrats come from Dr. Fukuyama’s book “The Origins of Political Order.” It’s the climactic chapter in his “political accountability” discussion. Dr. Fukuyama also emphasizes in that book that modern industrial nations require a strong central government. Ernest Gellner’s book “Nation and Nationalism” (the classic on nationalism as the ideology of industrialism” demonstrates a similar battle between the centralizing government and the local power centers (both economic and Religious) in Greece after it obtained freedom the early 19th century from the Ottoman Empire. The comparison to modern U.S. local powers vs. the Federal government is my analogy, but there is a reason why the U.S. county-level map of the 2008 election shows mostly rural low-population density counties going Republican and mostly urban high-density counties going Democratic. That’s a close proxy for counties which are modern industrial and urban (Democratic) vs counties which are agricultural and rural (Republican.)

        Emile Durkheim, one of the three fathers of sociology, described the difference in religion between an economically rural society and an economically industrial and urban society about a century ago. That’s the basis for the cultural political battle which is currently going on in America.

        Orson, you need to read some history and sociology instead of the garbage popular political crap you are wasting your time with. The statement that modern politicians are applying the economic theory of a century ago needs to be updated to include the discipline of sociology. You clearly know nothing real.

        I suggest that you read Dr. Fukuyama’s book. It is extremely informative.

  • http://www.bobreagan13.com Bob1313

    A strong government that has the capacity to provide security, internal and external, enforce contracts, and facilitate the construction of and supervise common rights of way is necessary for a free market. The main problem is out national government has delved into the realm of social welfare and social engineering, using the Commerce Clause as a pretext. If we are to succeed as a nation, it is necessary to get the federal government out of the business of creating and running a welfare state, and concentrate on basics like internal improvements, roads, bridges, and yes railways. The federal government also has a role in protecting the individual rights guaranteed by the Constitution. This is the track we must move to, our government is running out of other people’s money.

  • thibaud

    Speaking of Teddy Roosevelt, we should recall that the most influential person in the GOP today is probably Grover Norquist.

    Here’s Norquist on TR: “[What we envisage is] the history of the country for the first 120 years, up until Teddy Roosevelt, when the socialists took over. The income tax, the death tax, regulation, all that.”

    Here’s Norquist on Fukuyama’s vision of a strong nation led by a strong state: “[I want to cut government] in half and then shrink it again to where we were at the turn of the century…

    “I’m not in favor of abolishing the government. I just want to shrink it down to the size where we can drown it in the bathtub. ”

    And so we have a portrait of Tea Party-style enlightened American conservatism in 2012:

    One of the two Americans who did more than any others to save capitalism from itself, Teddy Roosevelt, is actually a “socialist.”

    Two of TR’s huge achievements, the progressive income tax and the regulatory state, must be abolished.

    Government spending at 8% of GDP is adequate for the needs of an indispensable global superpower comprising over 300 million citizens and an extraordinarily complex economy.

    Where did we get such people?

    How on earth did they manage to hijack the party of Teddy Roosevelt?

    • http://www.http.politicsplusstuff.blogspot.com Rick B

      The Norquist lackeys hijacked the Republican Party on a platform of pure racism. That was and remains the first great illness of America.

      Remember, racism is based on the need for planters to get ultra cheap labor so that they could maintain their wealth based on selling the first major international commodities to England – Sugar and Cotton. Most of the wealthy America founding fathers were wealthy base on slaves and plantation cotton and sugar.

      Those international commodities were the equivalent of oil today. The wealth they created in America required America to become a racist slave-holding nation. Haiti’s slave revolt was the most important threat to those people. We suffer today from the social fall-out of that slave system which created wealth by feeding into international trade. Our American social system today was designed to create that wealth.

      • Joe Eagar

        Excuse me. . .are you saying our society has been *static* for *two hundred years*? Karl Marx used to say capitalism required cheap labor to work, and pessimism on that issue has been widespread ever since. And yet, we have experienced long periods of decent low-skilled wages in this country.

        • http://www.http.politicsplusstuff.blogspot.com Rick B

          No, not *static*, but very slow in adapting to change that requires the dominant classes to give up or share power.

          Large banks create the money supply in modern society, but the ~total~ supply of money must be regulated to avoid financial catastrophes. The history of panics and depressions demonstrated that clearly. But the power resides in individuals banks, each scraping for their individual profit.

          No control mechanism can control as system unless it encompasses all of that system. The simple example is an air conditioning system. To be effective it is always centralized. The money supply is the same way, but the individuals banks resist being controlled. The Congress is manipulated by banker’s lobbyists to eliminate control. That’s the reason for the “No Regulation” demands by the Republicans.

          Modern industrialism requires an effective central government. What the conservatives today are doing is fighting that centralization of power which FDR started. FDR started it because the absence of that power caused the Great Depression.

          It’s no surprise that the Great Recession was allowed to occur after three decades of Reagan inspired demand that the federal government remove financial and economic controls.

          A complex modern economy cannot function without appropriate central controls any more than a complex biological organism and function without an internal skeleton. The idea that modern society can allow economic growth without any appropriate growth of central controls is to mistake the growth of a cancer for sustainable long term growth.

          I leave the analysis of the growth of corporate power at the same time as the destruction of labor power as an exercise for your imagination. Or for perhaps a review of the news.

  • thibaud

    Rick B – the Koch Brothers are pro-Koch Brothers, true.

    Crony Cancer Capitalists.

    http://www.newyorker.com/reporting/2010/08/30/100830fa_fact_mayer

  • jsmith9999

    If Romney looses it has nothing to do with him not being conservative enough and everything to do with him being a blithering idiot.

    • http://www.http.politicsplusstuff.blogspot.com Rick B

      I suspect that Romney’s biggest problem is that he has always been a businessman operating on an authoritarian management model in limited economic domains, and now he is moving into the much more complex environment of politics without the skills required to organize, train and use a bureaucratic staff. He’s making all the final decisions himself. That’s simply impossible, as Herbert A. Simon established when he described “Bounded Rationality.”

      Almost every error that has come from the Romney camp is in failing to take into account all all the factors that needed to be handled when making a decision or in giving too much autonomy to subordinates who do not have to overall picture.

  • Joe Eagar

    With respect, Mr. Fukuyama, I don’t think Republicans are beholden to Jamie Diamond, who is a Democrat–and a man rumored to have been considered by candidate Obama for the position of Treasury Secretary, before the financial bailouts politically disqualified him (see Too Big To Fail, by Andrew Ross Sorkin).

  • thibaud

    Very weird to come across so much good sense about the role of the state at the same website that publishes “Via Meadia’s” Tea Party-influenced drive-by shootings and repeated mangling of the issue.

    Too bad Mr Fukuyama posts so rarely. His voice is desperately needed now.

    • Joe Eagar

      Walter Russell Mead is hardly a tea partier. He dislikes traditional special interest liberalism, but he is not a small-state drown-the-government-in-a-bathtub libertarian.

      I find it helps to pretend political parties don’t exist. Our current political constellation is not sustainable, and if you ignore partisan politicking you can really see it. As Walter Russel Mead likes to put it, the blue social model is dead, the libertarian social model is long dead, and we need to find a new way.

      • thibaud

        The “blue social model” as Mead uses it is meaningless.

        Unlike Fukuyama or Posner, Mead’s drive-by blogging makes him come across as a pseudo-intellectual.

        Almost daily, he uses these shortcuts from thought to argue that government cannot provide adequate pensions, can’t regulate anything, can’t provide any kind of protection at all.

        On issues such as pensions and fracing, healthcare reform, schools and educational achievement, Mead is wading into waters that are far over his head. Cut-and-paste, plus daily snark, isn’t adding to the debate; it’s dumbing it down.

        For example, his lack of any real grasp of pension fund management prevents him from seeing that those heavily interventionist, deep “blue” Dutch, Swedes and Canadians have excellent, professional, well-funded pensions.

        His ignorance of the history of unconventional fossil fuels development over the last 40 years leads him into the embarrassing conclusion infer the exact OPPOSITE conclusion about federal intervention from that derived by energy experts Nordhaus and Shellenberger. They pointed out that federal subsidies for research, demo projects, data gathering and market development were absolutely indispensable to making fracing feasible. Mead blithely assumes the opposite, in the face of all the evidence.

        Ditto for his embarrassing post on the landmark Volcker-Ravitch analysis of state budgetary challenges that concluded the exact OPPOSITE of what Mead assumed the report said. Mead ignored Volcker-Ravitch report’s forceful argument that Obamacare is addressing the most important problem of all, Medicaid’s increasing costs, and devoted many pages to another key recommendation, that we vastly increase our investment in repairing our crumbling, decrepit infrastructure.

        one could go on. It’s really an embarrassing spectacle, given that he shares a masthead with the likes of Fukuyama and Bhagwati. They and other serious, independent conservative intellectuals like Posner are raising the quality of the debate.

        Mead’s ignorant drive-by shootings on domestic policy matters are dumbing it down.

        A pity, because when it comes to foreign policy, he actually knows what he’s talking about.

        • Joe Eagar

          I don’t think Mead is anti-regulation; I get the impression he’s pro-regulation and anti-regulatory-capture. There is a difference.

          Walter doesn’t argue that government cannot provide adequate pensions. That’s an absurd reading of his thought; he argues that local governments haven’t *funded* their pensions, not that pensions are unworkable altogether.

          As for Medicaid, no one–not Democrats, not Republicans, not Independents–believes Obamacare will cut the cost of Medicaid. The law was meant to expand access, not cut costs (which would require even more rationing than is happening in Medicaid now).

          Infrastructure is another area I think Mead is for. Unfortunately, worthwhile infrastructure projects are almost impossible to do–see Mead’s criticism of NIMBYism. You cannot say Mead is against fixing our “crumbling infrastructure” because he is against high-speed rail; we don’t *have* high-speed rail, and it isn’t “crumbling.”

          Very few people in this country are willing to admit what is in their faces; even Paul Volcker can be a bit reactionary at times. The dirty truth is that American labor is anti-worker, the American education bureaucracies have got to go, and American citizens must wean themselves off the free giveaways of foreign-subsidized imports and foreign-subsidized low-skilled immigration.

          • Joe Eagar

            In other words, we are in a special interest death spiral. The reforms we need aren’t radical–a less adversairal particapatory union system (like Sweden), better education (like Sweden), more economic freedom (like Sweden), and a higher savings rate (also like Sweden).

          • thibaud

            Joe – you are arguing for the exact opposite of what Mead, in his fumbled and confused way, has again and again implied in his rambling and ill-informed posts.

            Mead’s grasp of economics is too shallow, and his view of recent history too parochial and US-centric, for him to even recognize, let alone grapple with and accommodate, the tremendous success of Sweden and Canada since those nations reformed their budgets and financial systems in the 1990s.

            You argue for “a less adversarial particapatory union system (like Sweden)”. Mead claims that unions are dinosaurs, a relic of “the progressive model.”

            You argue for “better education (like Sweden).” Mead constantly sneers at the centralized school systems of the “nanny state”, and claims that homeschooling, charters, etc are the path forward.

            You favor “more economic freedom (like Sweden), and a higher savings rate (also like Sweden).”

            Mead’s inability to grasp basic economics leads him to claim that our recent shift to a low-savings, debt-fuelled consumption-based model is actually a left-wing or “blue” policy innovation, when in fact it derives from Alan Greenspan and the monetarist crowd’s cheap money-fueled pumping up of serial asset bubbles over the last few decades. As with so many things, he’s got it exactly backwards.

            Re. Medicaid, Volcker-Ravitch and many others have pointed out the obvious fact that the ACA represents significant reduction in the states’ current Medicaid cost trajectory. Volcker-Ravitch calls the ACA a “bargain” for the states. Once again, Mead has it exactly backwards.

            Mead is desperately trying to pretend that his constant trashing of the state is somehow not libertarianism dressed up in different clothes. But he repeatedly ignores evidence, conflates different phenomena, tries to wrench even the most obvious and simple realities (such as the contradictions of adding still more decentralization, in the name of reducing admin and overhead, to an already absurdly over-districted US educational system) into his badly conceived woolly beast of a “model.”

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  • Joe Eagar

    Thibaud, I’ve never heard Mead attack unionism as an ideal. American unions *are* regressive and a relic of the past. Mead is writing for an American audience. I choose to believe he’d embrace participatory unions if he could.

    And he is correct about education. American education is highly bureaucratic, and like all bureaucracies it has trouble dealing with minorities. Given both the racial diversity *and* the ethnic diversity *within* races in America, this cannot work. A less bureaucratic system, of which charters will be a part, really are the future.

    As for Medicaid, I don’t believe Volcker. There are too many Democrats at the state level who agree with Republicans that the Medicaid expansion will stress state budgets. I always believe those with power and responsibility (and experience) over those without, especially when they face hard external constraints like balanced budget requirements.

    • thibaud

      Medicaid’s cost increase has to do with more people being covered – as it should be, given the recession and the ridiculously high incidence of uninsured Americans.

      In fact, per-capita medicaid and medicare spending is increasing at a lower rate than private payer health spending. Here’s the New England Journal of Medicine on this point:

      http://www.nejm.org/doi/full/10.1056/NEJMp1204899

      “Evidence from the past decade shows that increases in enrollment have contributed greatly to spending growth, and forecasts for the next decade suggest that this trend will continue. Over the past decade, spending growth per enrollee slowed in Medicare and Medicaid, and per-enrollee growth rates in the next decade are projected to be very close to the expected growth in GDP per capita.

      “These data do not support the need for major restructuring of either [Medicare or Medicaid].

      “Between 2000 and 2005, Medicare spending per enrollee grew about 7.2% annually, as compared with 9.1% growth among private payers. Between 2006 and 2010, however, growth in Medicare spending per enrollee slowed to 4.2% annually, as compared with 4.5% among private payers.”

      • Joe Eagar

        There are debates over this issue, such as the extent private insurance subsidizes public programs (or vice versa), Medicaid costs have been lessened via rationing, etc.

        Regardless, increasing enrollment will increase costs, which is what matters. Extending the exchange subsidies into the lower class would have made much more sense; for one thing, American voters do not stigmatize transfers funneled through the tax code the way they do direct welfare spending.

        Medicaid is pretty terrible program, and people get pretty terrible results. We shouldn’t segregate people into poor and middle class health systems. Let the poor into the middle-class exchanges.

        • thibaud

          I don’t have a problem with one program for all classes. Expand medicare to the general population.

          This is what public option advocates have been saying all along. It’s the Norquist crowd that wants needless complexity and bureaucracy.

          • Joe Eagar

            Oh? One single program? Do you have any idea how many ethnicities, how many distinct genetic groups we have in this country? The whole point of consumer driven healthcare is to meet the need of these distinct groups.

            Americans are the most diverse lot in the developed world. What works for 95% Nordic whites won’t even work for white Americans–after all, there are so many ethnic groups within “whites”–add in blacks and Latinos, and the ethnic diversity within *those* races, and centralized bureaucratic healthcare is not only a disaster, but ethnically/racially unjust.

          • Colin

            You’re all socialists! It’s as though Mises and Hayek and Friedman never existed! “Limited government, strong state” is the correct conservative approach. It means public power is used for matters genuinely appropriate, as the Framers envisioned: military security, border security (and deportations), epidemiological security, environmental regulation, foreign and trade diplomacy, domestic law enforcement.

            The government has (should have) NO ROLE in areas not affecting the nation as a whole: healthcare, welfare, education, transportation, agriculture, etc etc etc. In a free and responsible society, the individual pays his own way for his own life. He doesn’t organize politically to rip off others!!! The truly destitute can be taken care of through private charity, or, at most, via local governments (this in line with American federalism, as well as European Catholic subsidiarity principles).

  • Joe Eagar

    Think of it this way. ACA pays for the Medicaid expansion for the first, what is it, seven years? After that it reverts to the original matching formula. How is that a reduction in the “trajectory” of the cost growth of Medicaid?

  • Joe Eagar

    Oh, and debt-fueled consumption is not the blame of any one group in society. Greenspan was partly responsible, but so were foreign governments who held American interest rates down, for example.

    And remember, pretty much everyone benefited from debt. This was a thirty-year cycle. Most people did pretty well over that time. That’s why no one stopped it, even though it was obvious it wasn’t sustainable. Political will always comes easier after a crash, not before.

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  • http://web-logos.blogspot.fr/ James C Brown

    excellent essay. Hamiltonian-Rooseveltian conservatism. Sounds good in theory. I’d love to see it personified someday.

    • Joe Eagar

      Well, we did kindof try it. A guy by the name of George W. Bush governed for 8 years under this very model.

      The Tea Party arose as much in reaction to Bush as it did to Obama. We do need good government types who don’t hate the state, but the problems we face today cannot be solved by simply having “more faith in government.” There’s a lot of practical research that needs to be done, and until that happens there’s very little reformers can do to make the American government better.

      • Joe Eagar

        Questions we need to answer, in no particular order:

        * Is there a negative correlation between productivity within the upper middle class and government transfers to the lower middle class. If so, can we reduce the correlation with policy-and-progressivity-neutral tax reform, or will it be necessary to shift the tax burden onto a VAT as other developed countries have done.

        * To what extent does regional current account imbalances arise from fiscal transfers and to what extent do they arise from monetary policy.

        * Can “fiscal floating” by state or local governments fix the imbalances mentioned above.

        * Is undocumented immigration driven by the wage gap between the tradables and nontradables sector, or is it driven by real exchange rate overvaluation?

        • Joe Eagar

          Sorry, on the first item I meant positive correlation–do transfers make the wealthy more productive and the lower middle class less, increasing inequality through a widening productivity gap. It’s a pretty wonky question.

  • victoria wilson – mn

    “American government, by contrast, seems trapped in a late 19th-century bureaucratic model of rules and hierarchy.” Or rather American government does not understand the nature of a public good transaction. A private good transaction is simply performed to benefit two parties in the transaction. A landowner rents his land to a farmer. The owner receives income, the farmer profits once the produce is sold. Both gain with no other obligations or intended benefit to a larger public. A public good transaction might seemingly benefit one individual, as when resources are extended to provide a child with an education; but it is transacted because it is deemed a benefit to the entire public.

    “It needs to be smaller but also stronger and more effective.” Let’s say there is a natural system which makes public transactions more effective, or rather efficient. Then forces at play in the system encourage a reduction in resources for a similar public goal, not an increase. Citizens would support the system if the system produced consistent results; and then trust in the system would make it stronger.

    “And this will not happen unless people see public service as a calling, rather than a despised occupation for people unable to make it in the private sector.” I think it is a mistake to hinge the distribution of public goods and services on questions of morality and religion.

    “In this regard, conservatives have an advantage because they can call people to public duty on the basis of the American nation rather than abstract ideals.” Conservatives have the advantage because they more consistently trade in public goods within their circles which are often of a religious nature. They seem to better understand both the long term nature of social contracts and their reciprocal obligations. Where they fall short is in the ability to enlarge their trading partners to include the greater public, a public that does not adhere to their often rigid views.

  • http://www.bhanupadmo.com Bhanu Padmo

    The Political Hinge : Plenary Civil Leadership. The main constituents of the notion of American-European political conservatism or neo-liberalism may be reckoned as assent to capitalism, free enterprise economy, retention of private property, protection of social order and moral discipline, promotion of patriotism, limited governance etc. It lacks the connective constituent, the constituent that would be the backbone when the others would be its ribs. We shall try to locate this missing link.

    Even the quasi-blind mankind sees the hiatus in political conservatism in the form of its anomalous consequences viz. massive economic inequity it has unleashed both nationally and internationally. An aware mankind would see much more. The conservative leadership, irrespective of its tall claims and apparent show-offs, has furtively lead mankind, nationally and internationally, on a wrong track in the name of democracy – crushing human dignity and human potential on a scale yet to be imagined.

    We don*t have to prove or disprove the performance claims of a one-legged man who hides behind the screen. Concluding the fact that this person doesn*t have the second leg should be enough to burst the bubble of his boasts and brags.

    Discrepancies in current conservative policies are apparent in the inconsistencies that thrive among its aforesaid constituents. Let*s enumerate the constituents again : free market, private property, patriotism, social order, moral discipline etc. A social order would make use of national economy through moral discipline with patriotic ardor, true; private property and free market would fuel the growth of national economy, true; but how would the social and moral objectives emerge in order to be implemented by the social order, by the moral discipline, by the national economy, by the ardent patriotism, by economic individualism and by versatile barter?

    Has the current political conservatism been able to underscore the fact that economic/ fiscal objectives are subservient to social and moral objectives? If so, how has conservatism managed to institutionalize the process of precipitating social and moral objectives and the process of creating commensurable and concomitant fiscal and foreign policies as former*s derivatives?

    Do the conservatives recall that this act is the epitome of democracy and climax of national sovereignty? Have they been able to constitutionalize these vital democratic notions and processes thereof?

    It is time to realize that the present form of political conservatism too is mostly undemocratic and unsocial. However, this malady isn*t unique to political conservatism alone. It is a general fatal political malady that conservatism also must take into account for its survival.

    Phrases like *limited state* are symptomatic of a poor political vocabulary and low level of respective political philosophy. What is a state? Is it mere governance? Let*s resolve the term *state* into its component meanings. Firstly, a state is its populace and their effects. No part of a state is devoid of ownership of at least a single citizen. Population is the essence of state*s physical sprawl. Essence of population is the body of extraordinary citizens who wield nascent/ sublime intelligence.

    Let*s not mistake intelligence as the product of education. The latter (education) only sharpens intelligence that has a natural emotive origin. The root of the fatal political malady we are concerned with at present is this unintelligent/ anti-intelligence mistaking of intelligence for literacy.

    That is not all. The next level of anti-social policy in that direction enunciates salaried literacy as essence of national literacy. Thus the nascent intelligence has been continually led to its grave leaving behind the salaried literate to represent national sovereignty and to conduct national governance!!

    We shall return to our quest of sovereignty that sees population as a mixture of ordinary literate people and extraordinary intelligent people in the ratio of say, 100 : 1 or 50 : 1. The Net-Knot Analogy expounds this social architecture. A fisherman*s net may be described as an architecture of threads and knots where the latter play the configuring role. Similarly, the citizens who define social configuration and moral height are the knot-like grassroot-level natural civil/ creative leaders who are endowed with nascent intelligence, the precious unique ingredient of state sovereignty.

    Thus the meaning of state is further focused in the plenary body of grassroot-level natural civil/ creative leaders. Thus the primary political objective of a state is thorough organization and absolute empowerment of the plenary civil/ creative leadership, the primary intelligentsia that possesses the universal initiative.

    It is also a bit strange that political philosophy continues to take mostly economic life into consideration in the matter of national governance. Citizens live universal life, though its economic aspect is most basic. It is wrong to ascribe primacy to the *the most basic*. The objective is primary, not any point on the locus leading to it. Economic life must be seen as a small constituent of universal life. Thus only the universal civil/ creative leadership could contribute to national sovereignty and healthy polity.

    If we put the so-called elected people*s representatives (senators/ parliamentarians) under magnifying glass, we find that their attributes conform to the status of state managers, not sovereign universal natural leaders. Accordingly, the present Senate/ Parliament may not be construed as Civil Senate/ Civil Parliament. This is rather the Managerial Senate/ Managerial Parliament. It is to be subordinated to the proposed Civil Senate/ Civil Parliament that would house the universally-elected universal civil/ creative leaders.

    Neither American-European nations nor the world-wide follower nations are yet quite aware of the concept of plenary natural/universal civil/creative leadership. Naturally, the democracy they subscribe to ought to be proportionately discrepant.

    Taking existence of Plenary Civil Leadership and Civil Senate/ Civil Parliament as the matrix, we may venture to assess political conservatism and political left-wing. The former that is devoid of Plenary Civil Leadership and yet that emphasizes social order and moral discipline is like an individual, tall and truncated. The left-wing politics that boasts of a semblance of Plenary Civil Leadership and yet that lays blind emphasis on economic life alone is like an individual, dwarf and moron. Both these political perspectives have to accommodate Plenary Civil Leadership (plenary body of grassroot-level universal/natural civil/creative leaders).

    The notion of Plenary Civil Leadership is the hinge between right-wing and left-wing polities. This would be the backbone-like connective constituent in every type of polity. This is the missing link.

  • Sam

    This “strong state conservatism” doesn’t sound new at all. It sounds a lot like what Bush practiced.

    Thanks, but with drones in the sky overhead and government panels making life and death decisions for me and my family, I think I will stick with my healthy skepticism of state power.

  • Frank Arden

    Fascinating discussion. Thanks to all.

    “So if you want to change the nature of conservatism, you’ve also got to change the flow of resources and the way that they affect American politics.”

    I suggest Dr. Fukuyama’s essay’s call for a change in conservative thought and leadership rests upon his idea of perceived conservative failings. This view is a mere cosmetic analysis of why conservatives today really are what they claim to be and why we are what we are.

    Why must conservatives be changed?

    How does one “change the flow of resources?” How is this not a call for the redistribution of recourses?

    This question reminds me of a recent article by the democratic socialist Harold Meyerson (sorry, I don’t have the site, but you can find it if you really, really want to) that essentially argued for more democracy through a parliamentary system derived from our bicameral legislatures.

    But even the whimsical Meyerson realizes that such radical federal changes would require a dubious constitutional convention that would “let every bat out of the belfry.”

    Instead, Meyerson points to state legislatures in most states to posit, where house and senate assemblies are mostly superfluous and the only difference being district size and sometimes length of term, that they might be candidates for a parliamentary system.

    Perhaps, but I tend think the bedrock of this entire discussion of conservatism moves about the assumed virtue of more democracy that would “change the flow of resources” to a presumptively better model.

    Would it?

    Let’s look to where direct democracy has been employed by plebiscitory referenda and from where it has gained national attention: California.

    Generally, that state’s fiscal problems can be found in the tension between a liberal legislature that wants to spend in return for votes and a taxpaying public that wants to limit taxes by referenda.

    Of course, it is the taxpaying, democracy loving public that elected the legislature in the first place. The problem is that California has a flawed and weak constitution that allows this internecine foolishness.

    I’m hitting with some broad strokes, I know, but the point I want to make is that more democracy does not create a better model of resource flow. It frustrates it. This very natural human duality has forced California into immoderate debt and unfunded liabilities.

    Another example of the failure of more democracy comes to mind. Can anyone, especially you, Dr. Fukuyama (What the hell, can I just call you Frank? We have that in common) give me one example of how the direct election of US senators through the Seventeenth Amendment has enhanced “the flow of resources?”

    If the Seventeenth Amendment had never passed and senators were appointed by state legislatures, would states have unfunded mandates in Medicaid, education and transportation? Are unfunded mandates a better “flow of resources?”

    And, as you postulate:

    “Moreover, what ties many Republican legislators to their libertarian views has [sic] less to do with strong ideological conviction than where their bread is buttered. When Jamie Dimon was called to testify on JP Morgan Chase’s multi-billion dollar loss before the Senate Banking Committee, the Republican members put on an appalling performance, unctuously flattering him and asking him to confirm that we didn’t need more bank regulation. My reaction was that they couldn’t possibly be such big idiots; they were simply following the money trail.”

    Fair enough. But what you did not examine was why senate democrats, who control the Senate Banking Committee, were such idiotic lap dogs to the monstrosities of the Dodd-Frank regulation mentality. Where was their bread buttered? Was it not the hot opinions of their democratic constituents?

    James Madison would have expected this behavior from the house, but not from the senate. Alas and yet, due to progressive, anti-Madisonian meddling and tweaking to change the Rule of Law, we have removed a third major interest from play, the states, from the distribution of federal power distribution (and consternation) leaving only money and political power to butter the bread of the “idiots” on both sides and the people who elect them.

    Were the states left to control their senators, Wall Street’s money trail would have had much less influence on conservatives and would have moderated the big government urge to regulate on the scale of Dodd-Frank as the progressive ideal.

    More democracy might be fairer for democracy purists, but has more democracy made better government? I am hard pressed to think so.

    This is not an argument for the repeal of the Seventeenth Amendment. It won’t happen. Once anything, especially democracy, is out of the tube it will never go back in.

    So we are left to the wisdom of the Founders. They cast a jaundiced eye toward democracy and proposed a federal system that sought to limit democracy at almost every corner that has frustrated progressives at every intersection since. Where the progressive project was to “change with the flow of resources,” the Rule of Law had the right of way.

    As to your itch for conservatism “to see the state as a facilitator rather than an enemy,” I am in general agreement.

    What I question is your premise that,” If contemporary conservatives could get over their ideological aversion to the state, they would recognise that American government is both necessary and in great need of reform rather than abolition.”

    Well, I didn’t know we poor conservatives were so unaware of what we believe and had an ideological aversion to the “state” and wanted to drown it in the bathtub.

    I confess, I never knew that. What’s more, after being informed that is so undeniably so makes me wonder where I’ve been all these years.

    Frank, tell me more of my conservative crimes!

    I was once a proud, young Georgia Democrat in 1991, and struggling stockbroker with Merrill Lynch with a wife and a small child, when I read a Time Magazine article about a young “State Department think tank” intellectual who had figured out we were at the “End of History” and that I was one of Friedrich Nietzsche’s Last Men. I still have that article in a dusty clip file somewhere in a box in a cluttered closet in my office. I kid you not.

    And yet, I recall going door to door on Saturdays to put up yard signs for candidates I believed in for local and state elections: all good men, democrats all, (Sam Nunn, for example) who I thought believed in your ideals of “private property and a competitive market economy; fiscal responsibility; identity and foreign policy based on nation and national interest rather than some global cosmopolitan ideal.”

    Well, at least, that’s what I thought I was working for. I had no idea until this day that these men, and I, would be accused by you of not seeing “the state as a facilitator rather than an enemy of these objectives.”

    Frank, if I understand the genesis of your essay correctly, you were reluctant to take the assignment because you thought “what was most needed was not a new form of conservatism but rather a reinvention of the left” that could not be reinvented because it is dead as a doornail and wouldn’t be worth the time to resurrect.

    What fascinates me is that while conservatism is alive and changing upon the call of the people, you think it has gone wrong and needs a corrective. But, Frank, please consider that your corrective might just be tainted with a tad of elitism.

    I suggest that today’s conservatism is no more than a practical reaction to the excesses of the left and that dark political hole that old conservatives believed was filled with meaning and purpose for this great nation.

    Liberal progressives just don’t know where to stop. They have enjoyed the last century with the co-operation of conservatives who now see their folly and want to stop the juggernaut of runaway liberalism; TR’s trust busting aside.

    Perhaps you should have refused the assignment to write this essay because your instincts were right in the first place.

    The ideals you hold for conservatism are actually the things trashed by liberals long ago when they abandoned me and other men of good will.

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  • http://www.medicarerhodeisland.com/ Samantha

    According to my opinion one should always be ready with a plan before to get into the task !