Freedom From the Market: America’s Fight to Liberate Itself From the Grip of the Invisible Hand By Mike Konczal • The New Press • 2021 • 256 pages • $25.99
In early March 2021, the Biden Administration rolled out the first part of its multitrillion dollar plan to meet the COVID-19 crisis and rebuild the U.S. economy. The $1.9 trillion American Rescue Plan (ARP) may have fallen short of some progressives’ hopes, but by most accounts it is the most substantial domestic policy investment since the Great Society of the 1960s. And the Biden team is just getting started. If the ARP might be compared to Franklin Roosevelt’s First New Deal—a series of policies and programs enacted in the “first 100 days” of his presidency to meet the immediate emergency of the Great Depression—the rest of Biden’s first year legislative agenda—which includes a massive infrastructure plan, investments in expanded health care, and policies to tackle the climate crisis—can be compared to the Second New Deal, a series of game-changing 1935 laws that created Social Security and Unemployment Insurance, recognized workers’ right to unionize, taxed the wealthy, and redefined the relationship between citizens, the state, and the market for more than a generation.
It remains to be seen what will happen with this agenda, especially given very narrow Democratic margins in both the House and the Senate. But already, the scope of the ambition is clear. If Bill Clinton promised to end the “era of big government as we know it,” and Barack Obama met the 2008 financial crisis with policies to save private companies deemed “too big to fail,” the Biden Administration has taken a noticeably different approach. Rather than relying on what sociologist Suzanne Mettler has called the “submerged state” of tax incentives and other hidden forms of public spending, the Biden Administration has highlighted the critical role government can and should play not only in meeting the immediate crisis, but in providing long-term security for American citizens. The era of Big Government may finally be back.
The Biden Administration’s “Build Back Better” plans are not the only challenge to neoliberalism—the ground rules of American politics since the late 1970s. Former President Donald Trump’s most important legislative achievement, the 2017 Tax Cuts and Jobs Act (TCJA), may look like the successor to the massive tax reductions that defined both the Ronald Reagan and George W. Bush administrations, but unlike those earlier laws, the TCJA was—and remains—unpopular with the majority of voters, and was not enough to protect GOP majorities in the 2018 midterms. What’s more, Donald Trump billed himself not as a traditional, pro-market Republican dedicated to rolling back domestic spending programs, gutting regulations, and cutting taxes for the rich, but rather as someone who would work to protect Medicare and Social Security and give all Americans “big beautiful health care.” Biden’s bid to enact a new New Deal and the emergence of a Trumpist GOP unconcerned with marginal tax rates and corporate prerogatives point to the possibility of an imminent political and ideological realignment.
The faltering of a half-century old political settlement that looked to the market rather than to government as the solution to the nation’s problems has left us without a shared political grammar. As such it is perhaps no surprise that politicians and activists have turned to the 1930s for a useable language. From the left’s plans for a “Green New Deal” to the nationalist right’s promise to “put America first,” the lexicon of Depression-era policy and politics has been mobilized to provide political legitimacy and an American pedigree to competing political and policy programs. But the 1930s is not the only available historical reference point. As Mike Konczal’s new and eminently readable book Freedom From the Market shows, American history is replete with examples of popular politics that promised to protect Americans and American freedom from rather than through the market. The neoliberal moment was the exception rather than the rule. Excavating and recovering this history and the political logic underwriting it are the first steps toward constructing the necessary historical, intellectual, and policy framework for a twenty-first century social contract.
Konczal, the Director of Progressive Thought at the Roosevelt Institute, argues that “true freedom requires keeping us free from the market.” This well-timed volume complements a growing literature that has shown how a self-interested group of anti-New Deal businessmen and their allies in politics, the press, and the academy built a political and economic vocabulary that conflated the market with freedom. The success of this “glib libertarian fantasy” depended both on naturalizing the market and on obscuring a long and fundamentally American tradition of support for both “free programs” and for “keeping things free from the market.” In short, Freedom From the Market aims to recover a lost—or perhaps more accurately, deliberately hidden—intellectual and political tradition that understood the market as harmful rather than fundamental to human freedom.
To build his case, Konczal takes readers on a brief tour through American history. In the nineteenth and twentieth centuries, he explains, advocates for “free homesteads, limitations on working hours and social insurance” fought to remove “land, labor, and life” from the “sole logic of the market.” Such efforts, Konczal insists, were “[a]s American as apple pie.” When the Great Depression of the 1930s threatened the global economy, the New Deal saved not only the U.S. economy but perhaps capitalism itself by resetting the relationship between the state, the market, and citizens, establishing what Konczal calls a new “baseline of freedom.” Work left undone by the New Deal—which did little to expand the umbrella of state protection to either women or to Black Americans—was later taken up by grassroots activists who worked to expand the social rights of citizenship and to insist on the state’s positive obligation to “provide for its members in a way that expands, rather than limits, the freedom of its citizens.” Medicare and Medicaid not only provided health security to millions of Americans, they also created the political and economic levers to tear down the South’s Jim Crow health-care system. Not all of this work was successful; campaigns to provide childcare as a right due to all citizens, rather than a kind of public charity accessible only to the very poor, failed in the postwar period. But, once again, even these failures provide evidence of an American politics that sought freedom from, rather than through, markets.
The political and economic crises of the “long seventies” provided opponents of the New Deal’s regulatory, welfare, tax, and pro-union policies with a long-awaited opportunity to rework the social compact. Konczal builds on the work of historians such as Ed Berkowitz who have identified the 1970s as a moment when “something happened.” The era’s economic malaise and the toxic confluence of rising unemployment, economic stagnation, and spiraling inflation undermined the public trust necessary for liberal governance. Equally important, the inability of mainstream economic experts both in and outside the government to understand, much less reverse, the economic collapse opened up space for alternative ideas about how to fix the economy. Rejecting the Keynesian focus on government intervention, neoliberalism in its various iterations promised to fix the nation’s economic and social problems by returning power to where it belonged—and where advocates insisted it had traditionally rested until the 1930s—to the disinterested, efficient mechanisms of the “free market.” In other words, neoliberals from libertarian economist Milton Friedman to Democratic Senator Daniel Patrick Moynihan framed their policy preferences not as a revolution but as a restoration of the political and policy environment of the nineteenth and early twentieth centuries that delivered individual freedoms through the market.
This was revisionist history of the worst kind. As Konczal demonstrates, the neoliberal view of what Wall Street Journal writer and supply-side prophet Jude Wanniski called the “way the world works” depended on the erasure of a long and vibrant political tradition of Americans seeking to tame markets in the name of freedom. In 1785, Thomas Jefferson wrote that keeping some land out of the market was necessary to preserve individual liberty and protect “natural right” (at least for white men). Robert Wagner, whose 1935 National Labor Relations Act secured workers’ rights to collective bargaining, defended state efforts to curtail the prerogatives of capital as necessary to “make the worker a free man.” Such language, Konczal points out, would have made perfect sense to early nineteenth century Americans who routinely looked to state and local governments to structure “markets toward addressing concerns of the overall community.”
The erasure of this history of Americans seeking freedom from rather than through the market was the result of a carefully constructed, well-funded, and multi-pronged effort to undo the New Deal. As Nancy MacLean, Kim Phillips-Fein, Lawrence Glickman, and others have shown, the success of the New Deal state in checking the privileges of economic elites and circumscribing the market in the name of the public good inspired a counterrevolution underwritten by powerful business interests. When the Dupont-funded American Liberty League’s frontal assault on the New Deal failed in the mid-1930s, antagonists changed course, launching a coordinated, multifront, and largely secret campaign to undermine the public sphere by conflating any kind of government action with both “socialism” and, perhaps even more powerfully, the loss of personal freedom. Each new government program, to the libertarian economist Frederick Hayek (whose work was underwritten by wealthy American businessmen), was a further step down the “road to serfdom.” In 1961, future President Ronald Reagan—then acting as a spokesperson for the American Medical Association—warned that Medicare was nothing more than “socialized medicine,” which would further erode “individual liberties and freedom.” Building a counter-establishment of friendly intellectuals and financing programs and faculty positions at universities across the country, anti-New Deal forces found themselves well positioned to take advantage of the longstanding fissures within the Democratic coalition which erupted in the seventies.
Konczal argues convincingly that the power of neoliberalism lies in its success in delegitimating alternative political logics and in rewriting our national past. “The romance of markets as self-correcting, dynamic, and resilient machines,” he concludes, “has made us forget about the crises, collapses, and depressions that have always come with capitalism.” Market logic has been reimagined as common sense, and alternatives to markets have been cast as dangerously un-American. In addition to policies that have effectively restructured the global economy to be more “favorable to bosses and owners” by “shifting power away from workers and citizens,” the neoliberal turn has also depended on the erasure of a history of Americans demanding limits on the market as fundamental to the preservation and expansion of individual freedom.
Neoliberalism succeeds as a political grammar when it is able to define markets as natural rather than political spaces. This language not only legitimates the unequal consequences of “free” market economics, it also protects those same markets from democratic regulation. But of course, markets are defined, regulated, and maintained by the state. This was the case in the early twentieth century, when the U.S. Supreme Court invented a Fourteenth Amendment right to contract in its landmark Lochner v. New York (1905) decision, invalidating a state workers’ protection law. It is just as true today. Like the Lochner Court, which invented the “idea of economic freedom as an absolute right to contract,” the neoliberal revolution required state intervention to change the rules specifically to protect markets from “democratic challenges of any kind.” The state’s role here has been deliberately obscured because neoliberal governance depends on the naturalization of markets. Yet, as Konczal points out, despite their anti-state rhetoric, neoliberals have been “unapologetic about using the state to make us more dependent on markets.”
Applying market logic to non-market spaces has had disastrous consequences for society. This is particularly apparent in higher education. What began in the 1860s as a way to mitigate both economic and regional inequality has been transformed into a kind of personal investment paid for by private student loans. The effects of this transformation can be seen on university campuses in declining enrollments in traditional humanities fields and in the emergence of a two-tiered university experience which offers “luxury campus apartments for wealthy students and campus food pantries for poorer” ones. The consequences go well beyond the ivory tower, however. Burdened with crippling student debt, students are less likely to buy homes or to take the chance on a new business. Indeed, as Konczal notes, one study by the federal reserve bank of Philadelphia found a direct link between “increases in student loan debt and lower business formation among small businesses.” This process has played out in other spaces as well. Neoliberal efforts to rewrite intellectual property law, for example, have at once denied “the notion of any public interest in ideas” and empowered large corporations like Apple and Google to “shut down competition and lock up business practice.” These efforts to treat intellectual property like any other form of property are relatively new and run counter to a powerful intellectual and political history which, in Jefferson’s words, sought to make public “the thinking power called an idea.”
For students of U.S. history, some of Konczal’s story will be familiar. To professional historians, this tour through 200 years of U.S. history in less than 200 pages may at times seem a bit rushed. It is also important to note that the market fundamentalism that came to dominate American politics in the late twentieth century derived not only from the work of libertarian and right-leaning economists, politicians, and others, but drew significantly on the policy and political legacies of both the New Deal and postwar liberalism. World War II revived the reputation of business from its Depression nadir and led to a political economy grounded in public-private partnerships. More often than not, government aid ran through private businesses—as was the case with employer-provided, but tax-subsidized health insurance—or used the lexicon of the market—as was the case with Social Security “annuities”—to deliver and defend those public goods. Liberals’ reliance on “hidden” welfare programs, even at the height of the so-called “consensus period,” made it easier for critics to dismiss the benefits of “big government” and to promise freedom through the market when the political and economic crises of the 1970s provided that opportunity.
That said, Konczal’s succinct and powerful identification of “market dependence” as anathema to freedom and individual liberty is a critical first step to reconstructing a political grammar capable of escaping the market and perhaps resisting dangerous political polarization. Both “dependence” and “independence” carry a great deal of ideological weight in U.S. politics. That these categories have shifted over time suggests that they are terms better understood as discursive fictions used to retain, deny, or gain power rather than as truly stable categories. In the last four decades, the occlusion of the market as a space of oppression, and the reconfiguration of individual dependence on the market for the “necessities of life,” has produced a thin and brittle politics incapable of rebuilding the public square. By identifying an alternative grammar, one that is grounded in the American past, Freedom From the Market provides a way out of the political cul-de-sac created by the failure of the market to deliver on its promises of “freedom.”