When Neoliberalism Was Young: A Lookback on Clintonism before Clinton

Yesterday, New York Magazine’s Jonathan Chait tweeted this:

It was an odd tweet.

On the one hand, Chait was probably just voicing his disgruntlement with an epithet that leftists and Sanders liberals often hurl against Clinton liberals like Chait.

On the other hand, there was a time, not so long ago, when journalists like Chait would have proudly owned the term neoliberal as an apt description of their beliefs. It was The New Republic, after all, the magazine where Chait made his name, that, along with The Washington Monthly, first provided neoliberalism with a home and a face.

Now, neoliberalism, of course, can mean a great many things, many of them associated with the right. But one of its meanings—arguably, in the United States, the most historically accurate—is the name that a small group of journalists, intellectuals, and politicians on the left gave to themselves in the late 1970s in order to register their distance from the traditional liberalism of the New Deal and the Great Society. The original neoliberals included, among others, Michael Kinsley, Charles Peters, James Fallows, Nicholas Lemann, Bill Bradley, Bruce Babbitt, Gary Hart, and Paul Tsongas. Sometimes called “Atari Democrats,” these were the men—and they were almost all men—who helped to remake American liberalism into neoliberalism, culminating in the election of Bill Clinton in 1992.

These were the men who made Jonathan Chait what he is today. Chait, after all, would recoil in horror at the policies and programs of mid-century liberals like Walter Reuther or John Kenneth Galbraith or even Arthur Schlesinger, who claimed that “class conflict is essential if freedom is to be preserved, because it is the only barrier against class domination.” We know this because he recoils in horror today he so resolutely opposes the more tepid versions of that liberalism that we see in the Sanders campaign.

It’s precisely the distance between that lost world of 20th century American labor liberalism and contemporary liberals like Chait that the phrase “neoliberalism” is meant, in part, to register.

We can see that distance first declared, and declared most clearly, in Charles Peters’s famous “A Neoliberal’s Manifesto,” which Tim Barker reminded me of last night. Peters was the founder and editor of The Washington Monthly, and in many ways the éminence grise of the neoliberal movement. In re-reading Peters’s manifesto—I remember reading it in high school; that was the kind of thing a certain kind of nerdy liberal-ish sophomore might do—I’m struck by how much it sets out the lineaments of Chait-style thinking today.

The basic orientation is announced in the opening paragraph:

We still believe in liberty and justice for all, in mercy for the afflicted and help for the down and out. But we no longer automatically favor unions and big government or oppose the military and big business. Indeed, in our search for solutions that work, we have to distrust all automatic responses, liberal or conservative.

Note the disavowal of all conventional ideologies and beliefs, the affirmation of an open-minded pragmatism guided solely by a bracing commitment to what works. It’s a leitmotif of the entire manifesto: Everyone else is blinded by their emotional attachments to the ideas of the past. We, the heroic few, are willing to look upon reality as it is, to take up solutions from any side of the political spectrum, to disavow anything that smacks of ideological rigidity or partisan tribalism.

That Peters wound up embracing solutions in the piece that put him comfortably within the camp of GOP conservatism (he even makes a sop to school prayer) never seemed to disturb his serenity as a self-identified iconoclast. That was part of the neoliberal esprit de corps: a self-styled philosophical promiscuity married to a fairly conventional ideological fidelity.

Listen to how former New Republic owner Marty Peretz described (h/t Tim Barker) that ethos in his lookback on The New Republic of the 1970s and 1980s:

My then-wife and I bought the New Republic in 1974. I was at the time a junior faculty member at Harvard, and I installed a former student, Michael Kinsley, as its editor. We put out a magazine that was intellectually daring, I like to think, and politically controversial.

We were for the Contras in Nicaragua; wary of affirmative action; for military intervention in Bosnia, Rwanda and Darfur; alarmed about the decline of the family. The New Republic was also an early proponent of gay rights. We were neoliberals. We were also Zionists, and it was our defense of the Jewish state that put us outside the comfort zone of modern progressive politics.

Except for gay rights and one or two items in that grab bag of foreign interventions, what is Peretz saying here beyond the fact that his politics consisted mainly of supporting various planks from the Republican Party platform? That was the intellectual daring, apparently.

Returning to that first paragraph of Peters’s piece, we find the basic positions of the neoliberal persuasion: opposition to unions and big government, support for the military and big business.

Above all, neoliberals loathed unions, especially teachers unions. They still do, except insofar as they’re useful funding devices for the contemporary Democratic Party.

But reading Peters, it’s clear that unions were, from the very beginning, the main target. The problems with unions were many: they protected their members’s interests (no mention of how important unions were to getting and protecting Social Security and Medicare); they drove up costs, both in the private and the public sector; they defended lazy, incompetent workers (“We want a government that can fire people who can’t or won’t do the job.”)

Against unions, or conventional unions, Peters held out the promise of ESOPs, where workers would forgo higher wages and benefits in return for stock options and ownership. He happily pointed to the example of Weirton Steel:

…where the workers accepted a 32 percent wage cut to keep their company alive. They will not be suckers because they will own the plant and share in the future profits their sacrifice makes possible. It’s better for a worker to keep a job by accepting $12 an hour than to lose it by insisting on $19.

(Sadly, within two decades, Weirton Steel was dead, and with it, those future profits and wages for which those workers had sacrificed in the early 1980s.)

But above all, Peters and other neoliberals saw unions as the instruments of the most vile subjugation of the most downtrodden members of society:

A poor black child might have a better chance of escaping the ghetto if we fired his incompetent middle-class teacher.

The urban public schools have in fact become the principal instrument of class oppression in America, keeping the lower orders in their place while the upper class sends its children to private schools.

And here we see in utero how the neoliberal argument works its magic on the left.

On the one hand, Peters showed how much the neoliberal was indebted to the Great Society ethos of the 1960s. That ethos was a departure from the New Deal insofar as it took its stand with the most desperate and the most needy, whom it set apart from the rest of society. Michael Harrington’s The Other America, for example, treated the poor not as a central part of the political economy, as the New Deal did. The poor were superfluous to that economy: there was America, which was middle-class and mainstream; there was the “other,” which was poor and marginal. The Great Society declared a War on Poverty, which was thought to be a project different from from managing and regulating the economy.

On the other hand, Peters showed how potent, and potently disabling, that kind of thinking could be. In the hands of neoliberalism, it became fashionable to pit the interests of the poor not against the power of the wealthy but against the working class that had been made into a middle class by America’s unions. (We still see that kind of talk among today’s Democrats, particularly in debates around free trade, where it is always the unionized worker—never the well paid journalist or economist or corporate CEO—who is expected to make sacrifices on behalf of the global poor. Or among Hillary Clinton supporters, who leverage the interests of African American voters against the interests of white working-class voters, but never against the interests of capital.)

Teachers’ unions in the inner cities were ground zero of the neoliberal obsession. But it wasn’t just teachers’ unions. It was all unions:

In both the public and private sector, unions were seeking and getting wage increases that had the effect of reducing or eliminating employment opportunities for people who were trying to get a foot on the first run of the ladder.

And it wasn’t just unions that were a problem. It was big-government liberalism as a whole:

Too many liberals…refused to criticize their friends in the industrial unions and the civil service who were pulling up the ladder. Thus liberalism was becoming a movement of those who had arrived, who cared more about preserving and expanding their own gains than about helping those in need.

That government jobs are critical for women and African Americans—as Annie Lowrey shows in a excellent recent piece—has long been known in traditional liberal and labor circles. That that fact has only recently been registered among journalists—who, even when they take the long view, focus almost exclusively, as Lowrey does, on the role of GOP governors in the aughts rather than on these long-term shifts in Democratic Party thinking—tells us something about the break between liberalism and neoliberalism that Chait believes is so fanciful.

Oddly, as soon as Peters was done attacking unions and civil-service jobs for doling out benefits to the few—ignoring all the women and people of color who were increasingly reliant on these instruments for their own advance—he turned around and attacked programs like Social Security and Medicare for doing precisely the opposite: protecting everyone.

Take Social Security. The original purpose was to protect the elderly from need. But, in order to secure and maintain the widest possible support, benefits were paid to rich and poor alike. The catch, of course, is that a lot of money is wasted on people who don’t need it.

Another way the practical and the idealistic merge in neoliberal thinking in is our attitude toward income maintenance programs like Social Security, welfare, veterans’ pensions, and unemployment compensation. We want to eliminate duplication and apply a means test to these programs. They would all become one insurance program against need.

As a practical matter, the country can’t afford to spend money on people who don’t need it—my aunt who uses her Social Security check to go to Europe or your brother-in-law who uses his unemployment compensation to finance a trip to Florida. And as liberal idealists, we don’t think the well-off should be getting money from these programs anyway—every cent we can afford should go to helping those really in need.

Kind of like Hillary Clinton criticizing Bernie Sanders for supporting free college education for all on the grounds that Donald Trump’s kids shouldn’t get their education paid for? (And let’s not forget that as recently as the last presidential campaign, the Democratic candidate was more than willing to trumpet his credentials as a cutter of Social Security and Medicare, though thankfully he never entertained the idea of turning them into means-tested programs.)

It’s difficult to make sense of what truly drives this contradiction, whereby one liberalism is criticized for supporting only one segment of the population while another liberalism is criticized for supporting all segments, including the poor.

It could be as simple as the belief that government should work on behalf of only the truly disadvantaged, leaving everyone else to the hands of the market. That that turned out to be a disaster for the truly disadvantaged—with no one besides themselves to speak up on behalf of anti-poverty programs, those programs proved all too easy to eliminate, not by a Republican but by a Democrat—seems not to have much troubled the sleep of neoliberalism. Indeed, in the current election, it is Hillary Clinton’s support for the 1994 crime bill rather than the 1996 welfare reform bill that has gotten the most attention, even though she proudly stated in her memoir that she not only supported the 1996 bill but rounded up votes for it.

Or perhaps it’s that neoliberals of the left, like their counterparts on the right, simply came to believe that the market was for winners, government for losers. Only the poor needed government; everyone else was made for capitalism. “Risk is indeed the essence of the movement,” declared Peters of his merry band of neoliberal men, and though he had something different in mind when he said that, it’s clear from the rest of his manifesto that the risk-taking entrepreneur really was what made his and his friends’ hearts beat fastest.

Our hero is the risk-taking entrepreneur who creates new jobs and better products. “Americans,” says Bill Bradley, “have to begin to treat risk more as an opportunity and not as a threat.”

Whatever the explanation for this attitude toward government and the poor, it’s clear that we’re still living in the world the neoliberals made.

When Clinton’s main line of attack against Sanders is that his proposals would increase the size of the federal government by 40%, when her hawkishness remains an unapologetic part of her campaign, when unions barely register except as an ATM for the Democratic Party, and Wall Street firmly declares itself to be in her camp, we can hear that opening call of Peters—”But we no longer automatically favor unions and big government or oppose the military and big business”—shorn of all awkward hesitation and convoluted formulations, articulated instead in the forthright syntax of common sense and everyday truth.

Perhaps that is why Jonathan Chait cannot tell the difference between liberalism and neoliberalism.

Update (April 29)

I wrote a follow-up post here, in which I respond to Chait’s response.


  1. Phil Perspective April 27, 2016 at 9:30 pm | #

    What a scumbag Peters is. It’s more of a crime, however, that Mother Jones hired one of Peters’s flunkies.

  2. SocraticGadfly April 27, 2016 at 10:13 pm | #

    Jon Chait, Obama’s journalistic fellator-in-chief. Possibly has passed My Head Is Flat Friedman as Acela Corridor’s chief writer of political dreck.

  3. SocraticGadfly April 27, 2016 at 10:36 pm | #
    • Harold April 30, 2016 at 12:00 pm | #

      And the T-shirts are white, I’m sure.

      I’m trying to come up with a good acronym for “Conservative in All But Name,” for Clinton and Chait and all their ilk, because DINO just isn’t strong enough.

      • Harold April 30, 2016 at 12:02 pm | #

        Sorry, I posted before I clicked the link. What I should have said is, “And all the real #ImWithHer T-shirts are white, I’m sure.”

  4. John Maher April 28, 2016 at 12:10 am | #

    All alums of U Michigan have a bounded middle class rationality they do not realize is white privilege. And their football team still can not beat a bunch of half-wits from Ohio State.

    Prof. Robin:I know this is not an advice column but my problem is all my friends roll their eyes when I use the phrase ‘neoliberal’. They assume it is jargon or a cliche. I asked them and only a few actually have a clue as to what ‘neoliberal’ means. And they still support Hillary. Help! We all know Mrs. Clinton will be our next president, but I am beginning to think even an impossible Trump victory would actually be less damaging than another series of neoliberal encroachments upon what has not yet been amalgamated in the political economy.

    No comment upon the rejection of neoliberalism in the land where it all began as theory? Austria? And the alliance of the extreme right and greens?

  5. pols April 28, 2016 at 12:17 am | #

    Thanks for another excellent piece. I couldn’t help but think William Graham Sumner upon hearing Peters’ disdain for unions. His version is actually harsher. He not only wants to take from B to help C and D but blame B for all of C and D’s problems.

    Needless to say, this isn’t exactly company any self-respecting liberal would want to keep.

  6. phatkhat April 28, 2016 at 12:44 am | #

    Great essay! Will definitely share it around!

  7. lazycat1984 April 28, 2016 at 2:09 am | #

    The more I read Peters’ essay, the more the word “Objectivist” comes to mind. I had always thought, prior to this column that ‘neoliberal’ meant a reboot of liberalism in the 19th century sense, which seems to be the sense most economists use it in. Sometimes these labels take on a life of their own.

  8. Raven Onthill April 28, 2016 at 7:51 am | #

    It seems to me that the common thread connecting the opposition to inclusive social insurance programs and, at the same time, unions is a kind of supremacism: the supremacism of the people who are just a rung above the bottom of the social ladder and want desperately to not be on the bottom. It’s odd to see in people who in fact are many rungs from the bottom, but class anxiety is something that most of us experience from time to time.

    It’s late – or early – and I wonder if I’ll still believe this after more sleep – but it seems to me that this is the thinking of social climbers. Consider Mr. Collins of Pride and Prejudice, having attained a bit of status, and both proud of it and desperate to hang on to it. Or, for that matter, consider the Clintons.

    • Carl Weetabix April 30, 2016 at 5:50 pm | #

      The only people more cutthroat than the old rich, are the new rich.

  9. Cleveland Frowns April 28, 2016 at 8:30 am | #

    Excellent post as always. I’m not quite understanding the part about how “Clinton supporters … leverage the interests of African American voters against the interests of white working-class voters.” It’s not that I don’t believe the claim, I just can’t come up with any examples.

    • Carl Weetabix April 30, 2016 at 5:54 pm | #

      I think he means Hillary trying to turn black voters against Sanders who in theory at least better represents white working-class voters interests better.

  10. Reza Afshari April 28, 2016 at 9:48 am | #

    Very well articulated. I think you should develop this to an article for the Nation. It is very timely and much needed. Thank you for writing it.

  11. Roquentin April 28, 2016 at 10:04 am | #

    This was a really good post. This blog is often like an oasis in the midst of a desert of neoliberal (Ha!), reactionary garbage. I have all kinds of things to say about it.

    First and foremost, in recent years I’ve fallen more under the sway of a Hegelian mode of thinking about political movements, history, and the world. There is no clear example of the dialectical movement of a concept than that of “freedom” or “liberty.” What Neoliberalism represents historically is when the concepts and contradictions of Liberalism as it was practiced in the New Deal era were finally turned against themselves and a reversal of it into its opposite. All concepts and notions cut both ways, freedom and liberty are no different. Above all else, that’s what neoliberalism, from the Chicago/Austrian School to hack pundits like Chait represent. They have turned the core principles of liberalism on itself and used them to shore up justification for hierarchy and oppression.

    You discuss this in your book, when talking about how freedom for the right means freedom of the owner and freedom of those in power in a more general sense. These questions are central to our entire historical epoch, particularly in the US, and we need to move beyond them. Marxist/socialist ideas and concepts are sorely needed, and the whole political conversation in the US has been built for nearly a century on avoiding any use of them. I maintain that New Deal liberalism was always going to become Neoliberalism, it was inevitable that these concepts would be inverted and if the postwar American Consensus could be reached again it produce the same world we currently inhabit a second time.

    • Will G-R April 28, 2016 at 11:20 am | #

      @Roquentin: Which itself is an ironic little mirror of the contradictions that transformed our concept of “liberalism” in the first place from a principled defense of economic non-interference to a pragmatic support for robust interventionism. It’s readily apparent in Mill’s On Liberty itself, where the attempt at a utilitarian defense of the laisser-faire principle can ultimately only stand if he carves out exceptions large enough to drive a New Deal or a Great Society through, and thus the original free-market doctrines are left sitting around abandoned, ready to be picked up by neoliberal defenders of inherited wealth and power. Of course Mill also manages to shape this utilitarianism into a vaguely principled apologia for global empire (“Despotism is a legitimate mode of government in dealing with barbarians provided the end be their improvement” and so on) but after all this sort of racism has always been common throughout the Western political mainstream, notably including precisely the sorts of working-class folks who might have once voted for Wilson and FDR and who now vote for Trump.

  12. alex April 28, 2016 at 10:45 am | #

    Although outside of the 20th century American scope of this argument—very valuable in its historical specificity—I find the richest conceptual or genealogical expression of the difference between liberalism and neoliberalism to be Foucualt’s distinction between Adam Smith and Gary Becker.

    If the ethos of classical liberalism is the partner in exchange, that of neoliberalism is the entrepreneur of the self.

    This analytic remains salient in understanding the neoliberal movement in the late 20th century U.S., even if it introduces slippages in the meaning of liberalism as it is used in Europe versus the United States. The Wendy Brown book linked above does a nice job developing this type of argument.

  13. John Maher April 28, 2016 at 12:09 pm | #

    I will share that during election night when Clinton won his first term I was sitting in the same room with Schlesinger, Jr. while we were all watching the precincts report and he was very much into it when the hostess began gyrating and screaming “MY PRESIDENT! MY PRESIDENT!” and that there was no talk of the looming shadow of the neoliberal and all present assumed on some level that the result was a return and validation of the welfare state after Reagan-Bush, the Republic after the terror. Even in the false advertising of the political arena, expectations have never been so confounded for the working class and intellegensia alike.

  14. ronp April 28, 2016 at 2:55 pm | #

    I think H. Clinton will be fine if elected, the past is the past (well not really), but saying that I really wish electoral success in this country could happen with a purely working class focus – something like Robert Reich’s most recent post — http://robertreich.org/ . Could be more workable as the racism of the white working class diminishes, hopefully struggling white middle class racism diminishes too. Left wing policies poll pretty well now, we need to get the poor to vote though.

  15. ecb April 28, 2016 at 2:58 pm | #

    As the poor are to neo/liberalism so the “oppressed” are to its partner, the cultural “left”.

  16. Cavoyo April 28, 2016 at 4:58 pm | #

    “Except for gay rights and one or two items in that grab bag of foreign interventions, what is Peretz saying here beyond the fact that his politics consisted mainly of supporting various planks from the Republican Party platform?”

    There’s the old joke that a libertarian is a Republican that smokes pot. Maybe a neoliberal, then, is a Republican that supports gay marriage?

  17. TIercelet April 29, 2016 at 3:33 pm | #

    There are striking parallels in this to the observation I’ve made, reading a lot lately, about historical civil rights/racial justice struggles. To wit, one of the greatest drags on the effectiveness of the Civil Rights Movement has been the ability of social/financial elites to make sure that advancement for poor people of color came out of the hides of the working class, rather than from the elites’ share. This is clear from the backgrounders on the housing market in e.g. Slatter’s Family Properties or Boyle’s The Arc of Justice, or the description of the Boston busing issue in I think Perlstein’s The Invisible Bridge. For middle-class white homeowners, living in a neighborhood that became mixed-race really did mean the loss of most of the family capital; it’s deplorable that it was due to racism, but individuals’ anti-racism wasn’t going to let them resell at the price they’d paid, nor keep them from the pernicious effects of living in a now-redlined neighborhood. Just the same, for the white populations of Boston’s poor neighborhoods, it was all too obvious that Black students were being bused into their schools, not those of the wealthy–which you’ll still see today when school-choice means slightly-better schools get hit with more demand than their resources can manage, not that any kid can go to an elite public school (let alone a private one).

    At the end of the day, neoliberalism as Peters defines it is nothing but elegant concern trolling–claiming to be the staunchest defenders of the lowest order, when really that’s just a way to reinforce a crab-bucket mentality that keeps the true elites from making any sacrifices towards a more equitable society.

    In other words, an old monster to be slain with an old weapon–solidarity, but newly sharpened and strengthened by the knowledge that it must transcend racial and regional and even class divisions.

  18. Carl Weetabix April 30, 2016 at 5:48 pm | #

    These arguments about semantics are stupid. At one time terms like “conservative”, “liberal”, “neoconservative”, etc. may have meant different things, but we sure as hell know what they mean now. It’s just debate team intellectual obfuscation. Meanings change as society needs them to. For instance Republican once implied being against racism. Today, not so much. Still “Republicans” are called “Republicans”.

    Chait knows what “neoliberal” means, he just doesn’t like the reality of what it means and what it might imply about him.

    • lazycat1984 April 30, 2016 at 11:29 pm | #

      Exactly. Sorry to indulge in pedantry myself…you are correct.

  19. aprudy April 30, 2016 at 7:03 pm | #

    What I love about this essay so much is the ways it echoes what Ken Sharpe taught us in the Fall ’83 version of his Latin American Comparative Politics course… I’m pretty sure it was in reference to Jeannie Kirkpatrick but it was a general statement about neoliberals and neocons: This is very close to the exact words – “Anyone who tells you “The harsh reality is…” or “The fact of the matter is…” is either lying to you or hiding a very great deal of what they know to be true.”

  20. jonnybutter May 3, 2016 at 6:50 pm | #


    Just as Cohn gave Chait the wrong impression about Danish labor market institutions (see here), he’s also given the wrong impression on the nature of Danish income taxation. Comparing corporate income tax rates across countries is fraught because statutory rates have little to do with effective rates, given that a popular form of business support is targeted corporate tax relief. As Chait explained in 2011, the US “corporate income tax has high statutory rates but, with its vast loopholes and exceptions, low effective rates.”

    from Demos

  21. Halfkidding May 4, 2016 at 7:48 pm | #

    Me thinks people better go back and get some history of neoliberalism. Hayek et al. Which is handily covered here.


    And the author. Not to be missed.

  22. Pathman June 1, 2016 at 10:56 am | #

    Maybe it’s time to re-brand neoliberals as “republican lite.” I think it would help put their views in better focus.

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