The Return of the Market?: Reflections on the Real “Conservative Tradition” in U.S. Policy Discourse

Abstract

This article examines the ideological continuity underlying recent changes in U.S. policy, arguing that both the "liberal" policies of the 1960s and the "free market" conservatism of the 1980s were based upon the presuppositions of neoclassical economic theory. I first consider the intellectual assumptions of postwar liberalism, emphasizing the degree to which the dominant paradigm of the period accepted the neoclassical framework. Next I examine the conservative neoclassical critique of liberal ideas that developed in the 1970s. The economic upheavals of that decade demonstrated the limits of a postwar liberalism that was only ambiguously committed to state intervention. The result was the reassertion of a more consistent market model in economic policy discourse. I conclude by considering the ideological effects of the dominant neoclassical paradigm today in directing attention away from crucial social problems, particularly those that result from market forces themselves in a rapidly changing global economy.The 1980 election is often seen to mark a radical break with the liberalism that had informed public policy since the New Deal. In this view, the "Reagan Revolution" represented a reversal of the interventionist tendencies that had begun to dominate social and economic theory in the 1950s, and domestic policy in the 1960s. This popular perception is testament to the narrow ideological range of public discourse in the United States. It is more accurate to characterize the economic assumptions behind the Reagan program as a more consistent version of the worldview that has always informed policy elites. Both the ''liberal'' policies of the 1960s and the "free market" conservatism of the 1980s were based on the general presuppositions of neoclassical economic theory. Indeed, if conservative connotes continuity with the past, then promarket policy based on the neoclassical paradigm is the real "conservative tradition" in US. policy discourse.' This tradition continues today, whatever political party happens to be in power. In 1992, US. voters elected a Democratic president for the first time in twelve years. Polls clearly indicated that economic insecurity and stagnant living standards were the overwhelming reasons for the defeat of George Bush. Avoiding the political mistakes of previous Democratic candidates, Bill Clinton campaigned on the promise of economic growth and the expansion of economic

Finance Capital, Neo-Liberalism and Critical Institutionalism

“…In both eras, businesses restructured in massive re-configurations of the corporate and industrial landscape, but in the regime shift to global capital, state regulatory power, especially over finance capital, was constrained as neo-liberal ideology became thoroughly embedded within national and international institutions. Further, progressive social movements, especially movements focused upon social class and labor issues, played critical roles in the earlier regime shift, but were on the defensive during the era of globalization, as non-economic 'new social movements' and especially, powerful conservative movements (religious, social and economic) advanced (Akard, 1995). In many ways, the shift to global capitalism depended upon populist neo-liberal economic arguments (pro-business, anti-tax) as a legitimating rhetoric that forestalled the emergence of leftist populism, a strong contrast to the fin de siecle corporate revolution, when economics was a fledgling discipline with little popular following.…”

Blind Faith in the Free Market: Urban Poverty, Residential Segregation, and Federal Housing Retrenchment, 1970–1995

“…In the 1980s, federal and local governments in the United States have embraced an ideology of market accommodation in policy making that emphasizes privatization, decentralization, and withdrawal of public resources (Barnekov, Boyle, and Rich 1989;Akard 1995;Antonio and Bonanno 1996). This desperate or blind faith that federal and local governments have placed in the private market to remedy the deleterious effects of poverty and residential segregation is evident with regard to housing and other social problems.…”