Though bankers might seem omnipotent, the nature of banking makes the entire sector susceptible to public pressure. The very mechanics of banking yield major vulnerabilities to negative popular opinion: there is always the risk of depositors withdrawing their money and closing their accounts. In the early 1980s, boycotts targeting banks proved an effective tool for activists defying deindustrialization in western Pennsylvania. In one instance, such a boycott helped protect thousands of workers’ pensions and severance pay. In another, a threatened boycott reversed plans to shutter a plant employing 650 workers.⁹ Strategically more significant is the leverage that the public has over banking in the political realm. While the political influence of bankers is well known, their need to pursue self-protection through political involvement is less noted. Banks are reliant on government, particularly the national government. The private banking system is both a relatively regulated branch of the economy and favored with the privilege of a federal safety net, which is integral to its existence. The banking system depends on confidence rooted in continuing support from the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve System, and ultimately the federal government itself. The current power of bankers is less a structural matter of course than the consequence of an absence of political challenges.

During the early twentieth century, the private banking system faced significant grassroots criticism. Keen public interest in financial questions reflected the political inheritance of Greenbackism and Populism. Influenced by these traditions, and also by the rising socialist movement, many Americans looked forward to establishing government banks.

Discussion of the subject of government banking evokes an enduring line of historical inquiry: “Why is there no socialism in the United States?” Over the years, numerous explanations have been offered to this question, including racial and ethnic animosities, high levels of social mobility, an entrenched two-party system, and an intensely individualistic culture. More recently, historians writing in the latter part of the twentieth century interrogated the premise of this question itself, revealing that socialism not only existed in the United States but had roots in the American heartland. Their research situated small Midwestern cities of the Progressive Era, the countryside of Oklahoma during the same period, and the nineteenth-century Indiana milieu that produced Eugene V. Debs at the center of the nation’s socialist history.¹⁰ When historians recovered the socialist past of the early twentieth-century United States, they also resurrected the memory of the movement’s substantial appeal to workers and farmers. In 1920, Debs famously received close to one million votes for president while imprisoned at the Atlanta Federal Penitentiary due to his opposition to World War I.

Yet an important dimension of the question of socialism’s appeal remains comparatively neglected: the prevalence and popularity, beyond the Socialist Party of America, of economic ideas that intersect and overlap with socialism. In this article, I will explore an aspect of the American past that has been lost: a mass movement of working people who sought to socialize banking. During the first half of the twentieth century, widespread public condemnation of the private banking system and the bankers who controlled this fundamental feature of capitalism led to broad support among working people for creating government banks and nationalizing privately owned ones.¹¹

The appeal of government banking to early twentieth-century Americans resulted from a remarkable level of popular engagement with financial policy questions, one largely absent today. Material concerns drove these workers and farmers to push for a banking reformation that would make the economy more equitable. Such critics of the banking and monetary status quo thought broadly about economic matters. But there was a smaller, less influential group whose interest in money was narrower. An exclusive focus on financial affairs led these critics to believe that the only necessary economic change involved tinkering with money. Among these were establishment figures whose attempt to use monetary reform to forestall other economic reforms reveals the reactionary motivations behind such programs. During the Great Depression, for example, one conspicuous lobby for inflation — the Committee for the Nation — was an organization of business executives who opposed the New Deal. There were also politically and socially marginal reactionaries, typically of an antisemitic variety, whose conspiracy theories incorporated financial nostrums. The political program of the 1930s protofascist group the Silver Shirts, for instance, addressed monetary matters. A distinguishing feature of their program was the doubtful proposition that replacing physical currency with a network of checking accounts would eliminate “money crimes” like robbery and the extortion of ransom through kidnapping.¹²

While groups such as the Committee for the Nation and the Silver Shirts attempted to turn mass involvement with financial questions to their own ends, elite-orchestrated and fringe political programs unfolded apart from the grassroots banking politics of working people. Truly populist banking politics, by contrast, was rooted in labor unions and farmer groups, institutions that working people organized, led, and funded themselves. Numerous worker and farmer institutions, from the local to the national levels — ranging from the Chicago Federation of Labor to the National Farmers Union and the United Mine Workers of America — provided forums where heterodox financial ideas circulated, including the belief that establishing government banks would combat the abuses of the existing financial system as a whole.

On an individual level, working people were interested in banking because they wanted safety for their savings and greater access to credit. The motive here was less about becoming rich than about attaining the modest prosperity that would offer basic financial security to them and their families. They also hoped to overcome the economic, political, and social threat posed by the concentration of vast financial power in only a few hands. Opponents of the “money power” endeavored to tame it for the sake of democracy. Working people understood Wall Street to be the headquarters of capitalism, autonomously deciding where investment would and would not be channeled. They believed that the profit-seeking excesses of large, unaccountable financial institutions frequently threatened economic stability.¹³ Accordingly, on this front as well, working people’s quest for financial security made reforming the banking system a priority for them, because they understood that, operating with minimal oversight, banks both caused and magnified the recurring depressions that regularly wreaked havoc in the nineteenth and early twentieth centuries.

The collective political action that emerged from policy discussions within organizations of workers and farmers drove significant changes to the banking system from the 1910s through the 1930s. A major impetus for most of the era’s banking reforms was persistent public pressure, consistently expressed through elected officials, for more government involvement in this critical sector of the economy. In comparison with today, the banking system operated more autonomously from government, stamping this reform agenda as a clear break with past practice. Still, the vigor of popular involvement in grassroots banking politics produced victories despite the burden of precedent and the banking fraternity’s bitter resistance. The possibility of government enterprise in the form of public banks presented a sweeping policy option that loomed over all contemporary financial debates. The threat of such a radical step eased reforms that now appear moderate but were opposed adamantly by bankers at the time, who attacked the FDIC, Farm Credit System, and now defunct Postal Savings System. Contrary to their fears, following its establishment in 1934, the FDIC brought unprecedented stability to the banking system. It was the keystone of a reformed financial order that no longer fueled sharp booms and busts, providing a foundation for post–World War II mass prosperity and neutralizing future demands for far-reaching changes to banking.

Historical accounts of mass engagement with financial politics in the modern society that emerged between the Civil War and World War II have emphasized monetary debates, especially the 1890s conflict over the currency that arrayed the gold standard against bimetallism (basing money on both gold and silver). But grassroots banking politics in the early twentieth century was less focused on how money ought to be defined than on the purpose of financial institutions. Making finance accountable to the material and moral concerns of working people was at the heart of this mass movement. Its supporters believed that stripping the control of money and credit from bankers would end the profit motive’s power not only over individuals but also over investment decisions that shaped larger economic developments. The idea of organizing banking to serve working people — instead of exploiting them — mobilized workers and farmers, who pursued a populist economic vision that aligned with socialist ideals. In his 2016 campaign, Sanders revealed that financial reform can still motivate working-class voters today.

The 1928 and 1932 Socialist Party vice presidential nominee James H. Maurer entered politics through his involvement in financial reform. His political activism was pivotal to the development of the strong socialist movement in Reading, Pennsylvania, that peaked in the late 1920s.¹⁴ Socialism in the city was rooted among its largely Pennsylvania Dutch working class — a background that Maurer shared. Overcoming poverty and illiteracy, he forged an alliance between organized labor and socialism in his hometown, eventually becoming president of the Pennsylvania State Federation of Labor. A newsboy at six years old and a factory laborer at ten, at sixteen Maurer was an illiterate apprentice in a machine shop. But his life changed forever thanks to a politically active machinist who taught him how to read. Under this fellow worker’s tutelage, Maurer embarked upon an intensive program of self-education on the topics of “banking, the gold standard, bimetallism, paper money, inflated currency, contracted currency, free coinage of silver.”¹⁵ He had become one of many working-class students of finance during the late nineteenth and early twentieth centuries.

Learning about financial issues was an empowering experience for Maurer. “Before I was seventeen,” he recalled, “I believed I knew more about banking and the manipulation of money than most Congressmen did.” Although too young to vote, Maurer became an enthusiastic member of the Greenback Party. Greenbackers wanted the federal government to combat the frequent economic depressions and ruinous deflation of the late nineteenth century by printing large amounts of paper currency. Through his involvement with the Greenback Party, Maurer learned the mechanics of political organizing, carrying the flag in the party’s parades, distributing its literature, and generally doing whatever work needed to be done. By the 1890s, the Greenback Party was moribund, but its financial ideas had a new home in the growing Populist movement — a mass protest against laissez-faire capitalism that won adherents among Midwestern wheat farmers and Southern cotton farmers, Western miners and urban construction workers. Maurer found himself in great demand as a speaker at Populist events throughout Pennsylvania. “Bankers particularly came in for scathing abuse,” he recalled. “We handled them without gloves.”¹⁶

The banker was a figure who represented unearned wealth and unaccountable power. Casting a critical eye on the riches that bankers enjoyed and the undue influence they exercised helped contemporaries think in more systemic ways about the unfairness of economic arrangements that privileged some and disadvantaged others. The Panic of 1907, for example, was caused by a reckless and bungled attempt to corner a mining stock and the ensuing failure of banks connected with the unsuccessful speculators. The federal government hurried to rescue shaky banks with a sizable no-interest loan. Meanwhile, the economic depression that this financial crisis caused threw millions of workers out of their jobs. A socialist member of the United Mine Workers of America blamed the depression on the “instability of our present banking system . . . augmented by . . . stock gamblers and money sharks, beside whom a common horse-thief or safe-breaker would be a respectable citizen.”¹⁷

In the aftermath of the 1907 crisis, the largest-circulation socialist newspaper in the nation, the Appeal to Reason of Girard, Kansas, used banking to dramatize the disparate nature of government involvement in the economy. “What is a banker to do in a financial crisis if he is out of cash?” the newspaper asked. “Come to the United States treasury and help yourself to government money.” The federal response, the Appeal observed, was entirely different in the case of unemployed workers. “What is a man to do who is out of work in a financial crisis and is starving? God knows!”¹⁸ The privileges that bankers enjoyed provided the Appeal with an instructive case study of how, despite criticisms of socialism that romanticized laissez-faire principles, government was already active in the economy. Government’s finger was tipping the scale in favor of capitalists and against working people, whereas socialism would orient government efforts toward aiding the working class.

When socialists criticized bankers and the privately owned banking system, they connected with an established pillar of working-class political culture. Large numbers of workers and farmers studied, discussed, and debated a variety of financial reforms. And with a lineage extending back to the Greenbackers and the Populists, government banking was deeply embedded in this political tradition. However, as the socialist movement grew in the first decade of the twentieth century, a former Populist vice presidential nominee, Thomas E. Watson, became one of socialism’s more vociferous critics. Many participants in the Populist uprising of the 1890s — most of whom were farmers — disagreed with Watson. They considered socialism to be a fuller development of their political philosophy. “I had the pleasure of voting for you in ’92,” a resident of upstate New York informed Watson, “and it is a matter of profound regret . . . that you cannot . . . step forward into the Socialist party.”¹⁹ Yet despite Watson’s denunciations of socialism, he promoted the idea of a federal bank that would make low-interest loans more widely available. It’s unsurprising then, given these two movements’ overlapping ideas, that in Oklahoma, Louisiana, and Texas, historian James R. Green found that “former radical Populists played an important role in building the early Socialist party locals.” Their political efforts proved highly successful, with one in six Oklahoma voters casting their ballots for Debs in the 1912 presidential election, an electoral result that rested on enthusiastic support from farmers.²⁰

In 1912, the Socialist Party had put aside the ideological objections of some members and embraced farmers as fellow members of the working class.²¹ For workers, banking was an urgent political issue because the existing system’s instability ignited and fueled punishing economic depressions. Moreover, given that periodic hard times were a fact of life, those who managed to accumulate a nest egg wanted it to remain secure. In addition to these concerns, affordable credit was an especially pressing matter for farmers, since for them borrowing from lenders was analogous to the wage relationship between workers and employers. Credit allowed farmers to purchase essential supplies like seeds and fertilizer, and the agricultural loans that farming required typically imposed high and even usurious interest payments. Therefore, when socialists discussed banking, they spoke directly to a paramount concern of farmers. A leading socialist organizer in Oklahoma, Oscar Ameringer, stressed that “nationalization of the banking system, loaning money at actual cost, would give capital to the usury ridden farmer at a rate . . . lower than his greatest expectations.”²² The high cost of farm loans motivated supporters of the Bank of North Dakota — the sole state bank in the nation today — who persevered against opposition to its creation in 1919 and subsequently shielded the institution from attacks during its vulnerable early years.²³

“The collective ownership and democratic management of the banking and currency system” became part of the Socialist Party platform in 1912.²⁴ But government banking was much discussed and highly popular among working people well beyond party circles throughout the first half of the twentieth century. Postal banking was one form of government banking that received extensive public support. Numerous labor unions and farmer organizations lobbied to secure the 1911 establishment of the Postal Savings System, whose sole function was to offer savings accounts for small depositors. Shortly after the system’s inauguration, the 1912 American Federation of Labor convention sought to expand its role, resolving that funds deposited in the Postal Savings System should “be loaned to individuals . . . preferably to laboring people striving to obtain a home.” For decades, working people continued to urge that the Post Office Department become a full-fledged bank, offering checking accounts and low-interest loans through the nation’s extensive network of post offices.²⁵

An additional legislative victory during this era that owed much to advocates of public banks involved farm lending. From the Populist movement forward, farmers had called repeatedly for the national government to provide them with affordable credit. Farmers frequently condemned bankers as superfluous and burdensome intermediaries who extracted unearned profit through interest payments. “Why not cut out this useless middle man, and the high rates of interest?” demanded one Nebraska farmer. In 1915, the Appeal to Reason spoke to this grievance, observing that under existing practices “the farmer suffers most” — even becoming “a debtor citizen” — and proposing to replace “private control of money and banking” with “absolute public control.” That summer, the nation’s three largest farmer organizations “unanimously agreed” on a plan that would create a federal government program for loaning money directly to farmers at low interest. The Federal Farm Loan Act of 1916 established an agricultural lending system that fell short of achieving the strictly governmental institution that many farmers favored. Still, this new system had access to funding from the United States Treasury and was governed by public officials. As farmers had predicted, the result was lower interest rates under more favorable terms.²⁶

Public banking proposals multiplied rapidly during the early years of the Great Depression, when one-fifth of the nation’s privately owned banks failed. In addition to difficult economic conditions, mismanagement and white-collar crime played significant roles in the banking crisis. In response to this financial disaster, the grassroots of the socialist movement pressed the case for government banks. “Captain Kidd in his most balmiest days would have gladly exchanged his piracy business for this ‘legitimate’ banking business,” one socialist declared in a letter to the editor. “The public ownership of all the banking institutions . . . is the only hope of the public for redemption from the present chaotic banking conditions that has helped paralyze this country.” Another correspondent implored the Milwaukee Leader “and all the other Socialist papers [to] print a form for a petition that the people could use to petition the government to establish government banks.” The Reading Labor Advocate did not promote such a petition drive but did urge that banking be “made a government function” as the “first step” toward replacing “the private profit system of industry.”²⁷

The collapse of the private banking system in 1933 forced President Franklin D. Roosevelt to declare a national bank holiday immediately following his inauguration. The Socialist Party presented the new administration with a plan for transitioning to government banking. The Houston Post, a Democratic newspaper, predicted that recent events would make the nation especially receptive to socialist banking proposals.²⁸ Yet given the extent to which the Depression undermined the standing of financial, business, and other orthodox economic authorities, the 1930s proved to be particularly frustrating for the movement. The Socialist Party’s emergence from World War I as a significantly reduced political force set the stage for this anticlimactic period. Socialist leader Norman Thomas perceptively observed that the New Deal undercut the party’s appeal, sarcastically remarking that Roosevelt carried out its program “on a stretcher.”²⁹

Yet during the Depression, farmers and workers demanding government ownership and operation of banking embraced principles that socialists upheld, notably that existing economic arrangements awarded unaccountable private actors too much power, that the profit motive should not govern economic activity, and that the economy was a collective endeavor that ought to promote the common good. For example, New York City plunged into a fiscal crisis in the early 1930s, which empowered bankers to dictate budget policy as a condition for extending the loans that the city required to avoid default.³⁰ Socialist leader Morris Hillquit recommended a municipal bank “as a protection against the domination of private bankers.”³¹ Appalled teachers in the public school system rallied to this cause, and their union denounced the banks for subverting fundamental democratic practice. In 1933, the American Federation of Teachers condemned the bankers’ “conspiracy to control government through their power to withhold credit,” resolving in favor of “a system of national banks under federal ownership and control.” The union had concluded that “only through government control of banking and credit can the manipulation of our financial structure for private ends be terminated.”³²

Meanwhile, on the other side of the nation, the leading organization of small farmers in California — the State Grange — declared in its journal that banking “is not a producer of wealth — it is a middleman” and envisioned government banks that made affordable credit available on an equitable basis. Since banks were merely the intermediary between money and borrowers, these farmers believed it was necessary to remove the profit motive from banking by making “the government . . . the channel through which the cash and credit of the nation is made available to the people.” This arrangement would promote modest economic success, thereby supporting the financial security of citizens and sustaining the health of communities. Emphasizing that banking should not operate in the interest of profit extraction, the district grange of San Joaquin County insisted that “the service which money is designed to perform is that of a collective nature . . . private control of either the circulation of credit or the expansion of credit destroys the equitable feature of this service.” These Grangers accordingly “urge[d] a complete control of all monies by the government and the distribution of all monies through government agencies.”³³

New Yorkers and Californians promoting the transformation of banking into a government function represented a prevalent opinion among working people nationwide. Support for nationalizing banking was expressed in multiple forms and in varied places, including through the state federations of labor of Colorado, Idaho, Indiana, Montana, Oklahoma, Oregon, and Washington; the state granges of California, Idaho, Missouri, Oregon, and Washington; and the state farmers’ unions of Iowa, Kansas, Missouri, and Montana.³⁴ As late as World War II, the Minnesota State Federation of Labor wanted “private persons and corporations . . . forbidden to do a banking business . . . in order that value of money, of commodities, and of Labor power be stabilized and freed from the manipulations of speculators.” During the war, a union oil worker (and devoted advocate of government banking) echoed the venerable tradition of warning that “a few ruthless, cold-blooded, brutal private bankers have the power to bring on . . . continued economic chaos.”³⁵

Although historians writing after the cultural turn often portray each glance, gesture, and utterance of marginalized individuals as consequential acts of resistance, a historical discrepancy exists between the prevalence of grievances among working people and the comparative infrequency of political action on their part.³⁶ In order to produce effective action, a sense of injury requires a cogent interpretation of its causes. Workers and farmers who studied banking issues regularly concluded that bankers were parasites who profited from the labor of producers. This understanding encouraged working people to believe that their labor entitled them to both a fair share of what the economy produced and greater control over economic institutions themselves. After all, even though bankers performed no productive service, the existing banking system imposed these superfluous middlemen — exploitative figures who used the money that depositors had earned to extract undeserved income from borrowers.

The sharp juxtaposition of productive labor and unproductive finance yielded a producerist analysis that promoted a sense of solidarity among working people. Producerism holds that honest work creates wealth; hence producers should receive the fruits of their labor, not idle parasites. “What do the bankers produce that they can live on the fat of the land while we who produce everything have almost nothing of what we produce?” asked one Californian during the Depression.³⁷ This perspective expressed a stark perception of opposing economic interests — a form of class division that inspired political action. Workers and farmers who considered themselves contributors to the commonweal shared a sense of exploitation at the hands of these nonproducers. Producerist convictions inspired working people to imagine banking alternatives that would rectify existing injustices and elevate the common good. Discontent with the private banking system promoted the idea that government banking could make the economy more responsive to democratic principles. This insight advanced a sense of the possible that motivated activist workers and farmers to campaign for public banks through their membership organizations.

Of course, in spite of the strength of public support for government banking, private banking remains the default model in the United States. When the banks collapsed in 1933, President Roosevelt was compelled to impose federal control over the entire system. The prestige of bankers was badly tarnished, and banks were not functioning. “It ought to be accepted as a principle,” Norman Thomas argued, “that banks saved only by government action . . . should pass absolutely into the control of the government and not be returned to the owners who could not manage them.”³⁸ But in this moment of crisis, Roosevelt made the expedient decision to resurrect the private banking system. One supporter of the socialization of banking with contacts inside the administration reported that “the money changers whom Mr. Roosevelt drove out of the temples in his inaugural [are] congregating in the White House and telling him what to do.” The leading administration official during the crafting and execution of the bank holiday later observed that “capitalism was saved in eight days.”³⁹

The ability of the private banking system to survive this trial shows how firmly entrenched its power was. But the extent of this power also makes clear both how audacious the grassroots banking politics campaign was and how remarkable its achievements were. The hostile opposition of bankers, for example, could not prevent the establishment of a government bank that extended throughout the nation: the Postal Savings System, often referred to as “Uncle Sam’s Savings Bank.” Rather than deter champions of government banking, awareness of the strength of their opponents actually motivated populist advocacy. “Do not get it into your heads brother farmers that these well fed bankers are going to let you get away from their crib if they can help it,” stressed Grange leader Carey B. Kegley. “The picking is entirely too good for them ever to permit you to be relieved from paying tribute.” Proponents of postal banking maintained their efforts to extend the institution following its establishment. Kegley, for example, proposed lending its funds to farmers at low interest.⁴⁰ The possibility of comprehensive postal banking remained a threatening prospect to bankers until waning public interest in financial questions allowed them to lobby successfully for the Postal Savings System’s termination in 1966.

From today’s vantage point, it’s remarkable how frequently bankers were forced on the political defensive during the first half of the twentieth century. The relative ease with which bankers have promoted their desired deregulatory agenda and extracted government bailouts in recent decades underlines this point. “The banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill,” stated Senator Richard J. Durbin during the 2007–8 financial crisis. “And they frankly own the place.”⁴¹

The achievements of banking politics in its heyday were possible because of the vibrancy of the era’s worker and farmer organizations. Institutions that working people created and maintained served as schoolhouses where members discussed and debated financial issues. These autonomous spaces were relatively free of the economic orthodoxies that were used to defend established power relations. Within this sphere, bankers lacked authority and standing, which fostered an oppositional politics that — unlike the society at large — did not defer to the private banking system and its allies. Through participation in this populist political culture, workers and farmers became more fully conscious of the extent to which their own interests were at odds with the existing banking and monetary system, and consequently freer to formulate their own visions for what that system should become. Additionally, labor unions and farmer organizations provided working people with a collective voice that amplified their influence inside policymaking circles. This institutional framework allowed working people to challenge the prerogatives of bankers.

The economy and resulting social structure that made possible early twentieth-century banking politics has passed into history. The small farmers who were central to this politics are much diminished in number, and the labor movement has been in retreat for decades. But the inherent economic dynamic that generated mass interest in banking questions remains relevant today. In important respects, the relationship between the public and the current banking system resembles the situation that gave rise to grassroots banking politics over a century ago. Large numbers of Americans increasingly contend with burdensome debts as a regular feature of their lives. And the banking structure has become more unstable in recent decades, producing the savings and loan crisis of the 1980s, the financial crisis of 2007–8, and the spate of failures among large so-called “regional” banks in 2023. Stimulating a renewed interest in banking politics, as Sanders did, could create pressure for vital changes in American society today.

In his 2016 presidential campaign, Sanders achieved a significant breakthrough: reintroducing politics rooted in class analysis to the national scene. One of his main themes on the campaign trail was the threat that banks — and especially the large banks of Wall Street — posed to working families. Sanders demonstrated that banking could again become an issue that mobilizes voters. He described “an economy and a political system that has been rigged by Wall Street to benefit the wealthiest . . . at the expense of everyone else.” Too-big-to-fail banks and pervasive white-collar crime, Sanders argued, define the nation’s banking system, abetted by a regulatory regime that “has been hijacked by the very bankers it is in charge of regulating.” He promised a dramatic departure from existing policies if elected. “Big banks will not be too big to fail,” Sanders pledged. “Big bankers will not be too big to jail.”⁴²

Although a democratic socialist, Sanders did not advance the nationalization of banking as the solution. The political culture of banking politics that made such proposals so common in the past had faded away decades earlier. Still, Sanders promised a true break from the status quo that included reviving postal banking, which would have “an important role in providing modest types of banking service to folks who need it.” Furthermore, Sanders made Clinton defend her affiliation with Wall Street, demonstrating that for many voters such connections with the financial sector had become a political liability. The populist analysis of the banking system that Sanders articulated echoed criticisms that were heard widely in the early twentieth century. “A handful of people on Wall Street,” he observed, “have extraordinary power over the economic and political life of our country.” But the most striking link to the past was how Sanders proposed to do something about this undue influence. “When millions of working families stand together, demanding fundamental changes in our financial system,” he observed, “we have the power to bring about . . . change.”⁴³

Socialism received a major boost from the Sanders campaign, but today’s socialism isn’t the working-class movement of the early twentieth century. Among members of the nation’s largest socialist organization, the Democratic Socialists of America, a 2021 survey found that more than 80 percent had a college degree and 35 percent had an advanced degree.⁴⁴ But when Sanders talked about banking, he reached a different audience. A key strength of Sanders’s 2016 candidacy was the clarity of his class-based message. By addressing banking, Sanders communicated a commitment to advancing the material interests of working people. Placing discussions about banks, bankers, Wall Street, and the Federal Reserve at the center of his campaign allied Sanders with struggling workers — those harmed by financialization, deindustrialization, corporate outsourcing, foreign-trade agreements, and the other economic reconfigurations that have disadvantaged workers. His depiction of finance offered structural clarity and presented specific reforms without becoming overly technical. Rebuilding working-class institutions and political power requires this type of compelling analysis of issues that are relevant to the everyday lives of citizens.

Consumer banking services are fundamental to daily life. At publicly accountable government banks, working people would benefit materially from consumer services that are not grounded in profit extraction. At public institutions, the profit motive wouldn’t inspire administrators to shave expenses and inflate revenues by increasingly monetizing, minimizing, and even eliminating functions that depositors and borrowers value — a never-ending push within the private banking system.⁴⁵ The agenda of officials wouldn’t revolve around levying high interest payments, imposing large fees, inventing entirely new fees, automating customer service jobs, closing branch offices, and devising various strategies to reduce services and nickel-and-dime consumers. Instead of commodifying personal financial information, public banks could offer privacy protections. Credit unions represent a notably successful example of cooperative enterprise in the United States because they provide their members an attractive alternative to for-profit banks. Government banking would attract patronage and win public support for the same reason.

Government banking could have a salutary macroeconomic function, offering countercyclical support when economic conditions worsen. Stepped-up lending during such periods could reinforce other fiscal and monetary responses, including jobs guarantee programs. At the state and local levels, government banks could brace sagging budgets amid tax-revenue declines. The funds of government banks could create opportunities to extend concrete gains to working people in normal economic times as well. The following discussion suggests some ways that government bank assets could be used to benefit working people in their everyday lives.

Austerity policies have diminished numerous public goods, but government banking could provide affordable opportunities for financing a diversity of job-creating public works projects at the federal, state, county, and municipal levels. Instead of confronting burdensome interest payments through the typical array of private lenders and bondholders, government agencies could borrow funds at more attractive terms, making possible projects that would otherwise be deemed unviable.

The nation’s public spaces are too often poorly maintained and even crumbling. Educational facilities such as schools and libraries, in addition to more specialized structures like museums and planetariums, could be constructed and renovated using financing provided by government banks. Buildings that serve the public, from municipal hospitals and clinics to community centers and post offices, could be transformed from blueprints into bricks and mortar. New and improved recreational spaces, including parks, playgrounds, swimming pools, tracks, baseball and softball diamonds, and basketball and tennis courts, could be another outcome of such financing. Cash-strapped public transit and other infrastructure systems struggling to make needed improvements and repairs could also benefit. The Tennessee Valley Authority stands as a legacy of the New Deal and evidence of what government infrastructure initiatives can accomplish.⁴⁶ Government banks could finance infrastructure projects involving transportation, energy, water, communications, and other sectors from the local to national levels.

Affordable housing is a pressing issue throughout the nation. Increasing numbers of working-class residents of both major cities and rural areas are finding it difficult to maintain a stable housing situation. Fiscal constraints are an obstacle to otherwise workable government-owned and rent-regulated solutions. While private investors avoid housing projects that don’t promise high returns, government banks could fill that void by financing social housing programs, ones that need not repeat the mistake of mid-twentieth-century public housing projects of limiting eligibility to lower-income residents. Shoddily constructed, poorly maintained, loosely managed projects intended only for very low-income residents were a recipe for failure. This unfortunate precedent supports not being so exclusive in the future. Many people in middle-income brackets would welcome the opportunity to participate in quality, well-managed social housing programs.⁴⁷

Using the financial power of government banks to save jobs would forge a critical connection between these institutions and the lives of workers. In response to the deindustrialization that devastated numerous communities during the 1970s and 1980s, a movement emerged among workers to acquire and operate discarded manufacturing facilities. In 1987, the historian and labor activist Staughton Lynd observed that such ideas “have made something akin to socialism acceptable to middle American working people.”⁴⁸ However, in order to be viable, this concept requires workers and their allies to secure large sums of money. Under the private banking regime, lack of the necessary financing for such endeavors has impeded this strategy. Although the wave of intense disinvestment that created the Rust Belt has passed, corporate abandonment has continued.⁴⁹ Government banking could alter the calculus when workers face job losses.

Government banking presents opportunities for a host of public policy options, serving as a stimulus for potential government solutions to existing social problems. Objections on financial grounds frequently halt proposals for new and expanded public services and projects. The pool of funds in government banks would loosen this restraint. In this way, government banking could combat public resignation to the status quo. While it would remain necessary to set policy priorities, ideas once dismissed as unrealistic would be deemed worthy of further consideration. Proposals that previously appeared unrealizable would look more attainable. It would become easier to imagine viable social change. The basis of political life would move toward possibilities.

During the first half of the twentieth century, millions of Americans supported government control of banking in a nation where socialist principles supposedly lacked appeal. They wanted the economy to operate in the service of the workers and farmers whose labor underwrote national prosperity, and they believed that realizing this populist vision required a banking system oriented toward public service instead of private profit. Although most advocates of government banking did not identify as socialists, they were sympathetic to the socialist ideal of democratizing the economy. The recent rise of Bernie Sanders in national politics reveals latent support for socialist ideas among working-class voters, including the white working class, who are frequently dismissed as innately reactionary.⁵⁰ The history of banking politics in the United States is a striking reminder of what organized working people can achieve. Similar financial grievances circulate among the American working class today, serving as a potential source of popular political action in the future.

AMLO’s administration is a late example of the “pink tide” governments that swept South America beginning in the early 2000s. While the tide has experienced its ebbs and flows in recent years, it never reached Mexico during its height. This is puzzling, as oft-cited factors that explain the left turn in the South — the confluence of third-wave democratization, increased poverty, and anemic economic growth associated with the neoliberalism of the ’80s and ’90s — were also present in Mexico. While these conditions set the stage for the Left to sweep South America, in Mexico this context led to three neoliberal center-right governments since 2000 and two decades of electoral defeat for the Left. Understanding AMLO’s rise requires an account of this critical period of failure.

The PRI, notorious for embracing a broad ideological umbrella, ruled Mexico without interruption from 1929 to 2000. And while the government routinely practiced electoral fraud and resorted to violent crackdowns on opposition, it also created a dense network of corporatist and clientelist relations, enabling it to co-opt emerging grassroots worker and peasant leaders. In other words, the sectors theoretically most prone to oppositional left-leaning mobilization were already organized under the PRI.

A key Mexican Marxist thinker of the 1960s, José Revueltas, explained, for example, that the working masses “participate in a real and effective way in the activities of the bourgeois party [the PRI] because — aside from compulsion — in the worst of cases they believe that at least they are not doing it for the party itself but for the union of which they are members.” The party, he contended, “can penetrate its organizational filaments all the way to the deepest layers of the population and thus impede the development of class politics.”² This had a severe effect on the political organization of the electoral left. As a consequence of PRI rule, Mexico’s left developed without a social base and without a fully formed program of its own.

The stunted development of the Left is perhaps best captured by AMLO’s own trajectory. Part of why it is hard for observers to place AMLO in the cartography of political ideologies (arguments abound inside and outside the country over whether he is left-wing or not) is because his political path is entirely peculiar to twentieth-century Mexico. He does not come from the socialist or social democratic left like his European counterparts. And he does not come from militant union activism like Luiz Inácio Lula da Silva or Evo Morales in South America. López Obrador was a member of the PRI early in his career, when the organization — the heir, after all, to an early twentieth-century agrarian revolution — still contained a strong progressive nationalist wing.

At the time, the PRI was the only vehicle for getting into public service. AMLO’s first post in the 1970s was as the head of the Indigenous Affairs Office, an agency carrying out local community-development projects, in his home state of Tabasco. In the 1980s, he was forced to step down after a seven-month stint as the state-level president of the PRI for his attempts to democratize the organization. The PRI’s hard turn toward neoliberalism over the course of that decade left the party’s nationalist wing isolated, eventually provoking a full break. AMLO left, beginning his long march to power as a central member of the opposition.

The PRI during the twentieth century presided over a mixed state-market economy. As the party consolidated power through corporatist arrangements, state enterprises and union leadership became synonymous with wasteful mismanagement and corruption. In the ’80s and ’90s, active opposition parties — in particular the conservative PAN — became strong advocates of privatization, arguing that dismantling the network of corruption that drained public resources required breaking the state’s monopolistic hold on certain sectors of the economy and opening them to market competition. The discourse of privatization and union busting in Mexico came paired with an idiosyncratic veneer of democratization, as anti-PRI forces were ideologically organized around free-market fundamentalism. The PAN governed the country between 2000 and 2012.

The electoral left of the period was hence poorly placed to take advantage of the antiauthoritarian sentiment that coalesced against the PRI. The PRD, the principal party of the Left, was formed out of the nationalist left’s break with the PRI and the merging of small socialist organizations. Led at the time by Cuauhtémoc Cárdenas, who would go on to fail to win the presidency three times, the PRD obtained limited results. Both legislative chambers, for example, were alternately controlled by the PRI and PAN for over two decades, with the PRD capturing about a quarter of seats on average. AMLO, then a member of the PRD, did, however, become Mexico City’s mayor in 2000, acquiring a national spotlight.

After surmounting a highly partisan attempt to impeach him (a process stopped short by the massive street mobilizations that marked the beginning of obradorismo as a movement), he ran for president in 2006, losing by less than 1 percent amid serious irregularities. But even in that election, AMLO captured only around 35 percent of the electorate. He won over less in the subsequent election in 2012, losing to a fully neoliberalized PRI returning to power for the 2012–18 term. The PRD itself eventually drifted to the right, collaborating with President Enrique Peña Nieto of the PRI on major neoliberal reforms — one reason why AMLO split and registered Morena in 2014.

The exiting Peña Nieto administration presided over anemic economic growth that left poverty levels, which hovered around 50 percent, basically untouched. The death toll of the drug war, already in the hundreds of thousands, grew to a historic peak in 2018. High-profile corruption cases plagued the PRI administration. Much-touted free-market reforms like opening Pemex (the state-owned oil company) to private investment and weakening teachers’ unions as a way to supposedly improve the school system failed to deliver the promised results. But the PRI was not the only major political party that entered the 2018 electoral cycle in disarray. The PAN, which governed the country between 2000 and 2012, devolved into a faux opposition during Peña Nieto’s presidency, supporting most of his proposed major reforms en bloc. The PRD, which nominated AMLO in his two previous runs, entered into a crisis after the 2012 defeat. The party’s centrists took over, severing ties with AMLO and launching a full-blown rebranding of the party as a collaborationist, “responsible” left. The party went on to sign the Pact for Mexico, pledging to focus on shared political goals with Peña Nieto’s administration. This marked the beginning of its end as a leftist opposition party and doomed attempts to pivot to an antiestablishment message later.

Public debate during the 2018 electoral contest was dominated by the issue of corruption. PRI president Peña Nieto left office with the lowest approval rating on record in the country at 24 percent. This dismal figure reflected, among other things, the widespread discontent stemming from a series of high-profile corruption scandals that came to define his administration. Under Peña Nieto’s leadership, Mexico’s ranking in Transparency International’s Corruption Perception Index plummeted by thirty-three places, landing at 138 out of the 180 countries evaluated by the end of his term. During the previous administration, that of Felipe Calderón of the PAN, Mexico had already seen a decline in its ranking from 70 to 105.

Anti-corruption became the principal component of AMLO’s campaign discourse and subsequently, as we will see, of his economic program. Running under the newly minted Morena party, AMLO focused his campaign on three axes: ending corruption, regaining peace, and using the state as an engine for redistributive development. He saw these issues as fundamentally connected: corruption crippled the state’s capacity to energize the economy, and the growth of organized crime was a consequence of the abandonment of the redistributive role of the state. Central to this understanding was his claim that neoliberalism was defined by corruption. As he put it in his inaugural speech:

This is why I insist that the hallmark of neoliberalism is corruption. It sounds harsh, but privatization in Mexico has been synonymous with corruption. Unfortunately, this malady has almost always existed in our country, but what happened during the neoliberal period is unprecedented in modern times — the system as a whole has operated for corruption. Political power and economic power have mutually fed and nurtured each other, and the theft of the people’s goods and the nation’s wealth has been established as the modus operandi.³

Indeed, what distinguishes AMLO’s anti-corruption discourse is the connection he makes to neoliberalism. Traditionally, anti-corruption efforts had been championed by the neoliberal right (and not only in Mexico) and, at least in the case of Latin America, backed mostly by the middle and upper classes. AMLO’s is a diagnosis of the characteristics of actually existing neoliberalism in Mexico, which differ from those of neoliberalism in the abstract. In short, AMLO conceptualizes corruption as a central component of Mexico’s specific political economy. For López Obrador, corruption is not merely a series of individual crimes or isolated scandals; it is a consequence of the reconfiguration of the state-economy relationship over the past decades. Corruption has become integral to a regime of private accumulation by way of the state.

In this view, neoliberalism produced a sort of reverse-rentier state where government officials and a complex network of contractors siphoned off public funds through various mechanisms — not always illegal — that ranged from the outsourcing of government functions to, in extreme cases, the creation of parallel shell companies. This conceptualization contrasts with the more conventional notion whereby business elites compete in the shadows — through graft — for market-oriented investment opportunities and other perks and competitive advantages. The conglomeration of politicians and companies dependent on government contracts can be understood as a specific class fraction within Mexican neoliberalism in the sense that their profits are not derived from surplus over investment in production and sale of goods or services in the free market but from the extraction of public resources.

This perspective is diametrically opposed to the dominant opinion of past decades, associated with the so-called democratic transition, that understood neoliberal reforms — explicitly or implicitly — as an anti-corruption tool. As laid out earlier, much of neoliberalism’s expansion in Mexico progressed hand in hand with gradual democratization in the 1990s and early 2000s, as the PRI began to lose its political grip. With the PRI presiding over a mixed economy for much of the twentieth century, state enterprises, corporatism, and union leaders had become synonymous with corruption. This is how neoliberal discourse managed to appropriate the anti-corruption banner as part of its struggle against PRI statism and authoritarianism. The push for privatization and the crackdown on unionism — part and parcel of neoliberal processes worldwide — was viewed as essential for the country’s political opening, lending it a democratic legitimacy, at least temporarily. Proponents of privatization argued, among other things, that dismantling the web of corruption required eliminating the state’s relative monopoly over certain economic sectors; the free market would leave union leaders and administrators of state-owned companies without illegal sources of income. Pitched as the perfect companion to democratization, liberalization would free resources needed for an economic takeoff and produce a fairer distribution of wealth and income.

During the neoliberal period, the fight against corruption — beyond being a discretionary tool used for political attacks — entailed a view of corruption as synonymous with statism. For instance, in 1989, President Carlos Salinas de Gortari of the PRI orchestrated the famous quinazo — the arrest of Joaquín Hernández Galicia, “La Quina,” the Pemex union leader who had threatened to call a strike if the company was privatized. Hernández had enjoyed state protection during his nearly thirty years as union head, amassing significant wealth. Salinas, in what many observers noted as an attempt to legitimize his mandate after a fraudulent election, prosecuted him for tax evasion. La Quina was imprisoned and replaced by an equally dubious figure, Carlos Romero Deschamps. The teachers’ union leader, Carlos Jonguitud Barrios, was also pushed out (in favor of Elba Esther Gordillo, yet another dubious figure). The notion that corruption was the domain of union leaders from the country’s corporatist past began to take root.

Prosecuting known figures who used their connections to the state to extract special privileges emerged as a way for governing politicians to demonstrate their commitment to a just and transparent liberal order. It became commonplace for subsequent presidents to conduct quinazos — high-profile arrests of figures from the country’s corporatist past — at the beginning of their terms. In 1995, Ernesto Zedillo (PRI) jailed politician and businessman Raúl Salinas de Gortari (brother of the former president). Vicente Fox (PAN) initiated, but did not complete, proceedings against the new Pemex union leader, Romero Deschamps, in 2003, and forced the miners’ union leader, Napoleón Gómez Urrutia, into exile. Calderón (PAN) did not follow the practice precisely, but his closure of the state-owned regional electricity company, Luz y Fuerza del Centro, in 2009 carried similar rhetoric, linking anti-corruption efforts with de-statist processes. Peña Nieto (PRI) revived the tradition, imprisoning teachers’ union leader Gordillo in 2013.

However, in AMLO’s framing, it is precisely the neoliberal period that enabled corruption. Beginning in the 1990s, the state’s functions were outsourced to private companies and organizations, fostering backroom deals, competition for privileged access to government contracts, and the sale of state-owned enterprises. An overview of the most notorious corruption cases in recent decades corroborates this account.

Before the neoliberal period, corruption involved diverting public funds directly into the pockets of politicians. However, the restructuring of the state-market relationship that began in the 1990s led to a transfer of public funds to the private sector, though politicians still took their share. The aim was to not only buy off politicians and managers for opportunities to invest in a newly opened and deregulated economy but to carry out a full transfer of public goods. The sale of Telmex in 1990 to Carlos Slim, a close associate of then president Salinas de Gortari, serves as a prime example. These sorts of transactions turned state-owned entities into privately owned corporations, giving rise to an ultrawealthy class.

The PAN expanded the practice of guaranteeing business revenues via massive public transfers rather than privileged market opportunities. From 2000 to 2012, it entrenched overcharging in government service contracts. The independence bicentennial celebrations during Calderón’s administration is one notable example. The Estela de Luz, a hundred-meter-tall quartz monument, was inaugurated over a year late and cost three times its initial budget. A federal audit revealed overpriced construction materials and other irregularities. Although a dozen government officials were prosecuted for favoring the construction company Gutsa, they were only reprimanded for administrative offenses. A 2008 survey by Gallup International for Transparency International ranked Mexico second in the world for bribery, just behind Russia, with 38 percent of respondents citing frequent use of personal or family connections to obtain public contracts.⁴

With the PRI’s return to power in 2012, neoliberal corruption reached new depths. A photograph of Peña Nieto with nineteen governors on his inauguration day has become an infamous tally board — ten of them faced serious corruption charges. The most extreme and emblematic case was that of Javier Duarte de Ochoa, the former governor of Veracruz, who created over thirty shell companies to secure government contracts.

Two other scandals highlighting endemic neoliberal corruption in Mexico are the estafa maestra (Master Scam) and the Odebrecht case. The estafa maestra involved eleven federal agencies coordinating with public universities to evade budgetary oversight. Mexican law allowed government agencies, including universities, to obtain contracts without bidding, and these universities would then subcontract private entities to deliver the services. The scandal of the Brazilian construction company Odebrecht implicated Emilio Lozoya, then director of Pemex, who received bribes to secure contracts and support the 2013 energy reforms, which expanded private investment in the state oil company. The business class tapping into lucrative natural rents exemplifies the reverse-rentier strategy that replaced capital competition in open markets.

Despite public outrage over Peña Nieto’s scandals, anti-corruption efforts at the time focused on institutional redesign, most notably the 2015 constitutional reform creating the National Anti-Corruption System (SNA). Key proponents viewed corruption’s causes as “norms, procedures, and decision-making environments,” and hence advocated “redesigned institutional intelligence” to combat it.⁵ The SNA aimed to enhance coordination between local, state, and federal agencies to monitor public spending and contracts as well as introduce new auditing practices.

The SNA’s design was innovative: it was not a new government agency or autonomous constitutional body but a coordinating structure between government branches and autonomous entities. The Coordinating Committee (CC), comprising heads of the Superior Auditor, Ministry of Public Administration, Special Anti-Corruption Prosecutor, Federal Court of Administrative Justice, Federal Judicial Council, National Transparency Institute, and Citizen Participation Committee, would play a central role. The SNA also included a citizen participation committee (chaired by the CC president), an executive secretariat, a national digital platform, a national auditing system, local anti-corruption systems in each state, a specialized prosecutor’s office, and eighteen additional judges for the Federal Court of Administrative Justice.

Civil society organizations, led by the business sector, drove this anti-corruption reform process. Chambers of commerce and organizations like the Communication Council, the Voice of Business, and Mexicans Against Corruption and Impunity, led by business magnate Claudio X. González (now one of AMLO’s most prominent critics), played key roles. The Mexican Institute for Competitiveness, once led by Juan Pardinas, later the editorial director of the liberal right-wing newspaper Reforma, also participated.

López Obrador criticized the SNA from its inception. As early as 2016, AMLO called the SNA a “costly bureaucratic apparatus . . . which will only increase unnecessary, unproductive spending, waste, and simulation, pretending to fight corruption.” He reiterated this view as president in June 2020, criticizing the SNA as a farce. “Officials and so-called civil society [that support the SNA] . . . are just seeking positions in these organizations,” he warned. “This anti-corruption institute was to have regional offices, plus the central office. We’re talking about three hundred positions. Imagine how much that costs!” AMLO’s distrust of the SNA was clear, seeing it as a costly, cumbersome bureaucracy too compromised by private interests to be truly autonomous and effective against neoliberal corruption.⁶

In other words, in the ruling party’s view, the SNA did not address the root problem. Led by capitalists, these efforts could not tackle the systemic relationship between neoliberalism and corruption. Their focus on institutional redesign and recalibration ignored the need to alter the interaction between state and markets. Unable to understand the cases outlined above as more than independent crimes caused by deficient institutional norms, the SNA efforts misdiagnosed the political economic dimension of corruption.

AMLO’s linking of corruption and neoliberalism suggested that a solution required more than redesigning public institutions; it required fundamentally readjusting the state-market relation. It is quite telling, then, that the cancellation of the Texcoco Airport project that had started under Peña Nieto — AMLO’s quinazo (a dramatic intervention early in the presidency to assert authority) — differed from previous episodes in that it targeted a project symbolizing the systematic transfer of public resources to private contractors rather than an individual pre-neoliberal figurehead.

Another early intervention signaling the new government’s direction was the crackdown on huachicoleo, the theft and illegal sale of fuel from Pemex. The term has now even entered common parlance to describe various instances of public resource extraction. The operation has curbed the theft of fuel from state-owned pipelines, calculated at eighty-one thousand barrels daily, that involved a network of businessmen and organized crime.

In a more formal sense, the Financial Intelligence Unit (UIF) under the Finance Ministry, responsible for money laundering investigations, has become crucial to AMLO’s anti-corruption fight. Although established in 2004, the UIF had lain dormant. Under AMLO, the agency was charged with going after white-collar crime. Between 2019 and 2020, it froze thirty-one thousand bank accounts and over seven billion pesos, a record for the unit. It also cracked down on companies devoted to issuing false invoices, seizing accounts of over forty such companies in July 2020 and continuing investigations into hundreds more.⁷

Congress, controlled by Morena, also joined the effort with a reform classifying corruption as a serious crime. Concurrently, and counterintuitively, López Obrador has insisted on a punto final (point of closure) prioritizing the prevention of future corruption over punishing past offenses. This focus on corruption has yielded results: Mexico has improved its position in the corruption perception index by fourteen places, now ranking 124 out of 180 countries.

In addition, AMLO’s government combats generalized huachicoleo through “republican austerity.” Technically, this means reorganizing and recentralizing public spending by cutting from the top. The link between austerity and anti-corruption lies in identifying and eliminating public and private bureaucratic intermediaries distributing government resources to the general population. AMLO argues that these middlemen, with their opacities and redundancies, are key targets for potential budget capture and diversion. This rationale has led, for example, to eliminating the subcontracting public services (transferring resources to private organizations for managing services) to reintegrate them into centralized government institutions. Similarly, discretionary trust funds managing public monies have been eliminated to reintegrate them under state ministries’ control.

Critics of global neoliberalism like geographer David Harvey argue that neoliberalism should be understood less as an ideological stance on state-market separation and more as a political project of the ruling class to restore capital accumulation.⁸ The Keynesian period, post-1930s, was based on a social democratic consensus, which the global economic crisis of the early 1970s ended. The ruling class then sought to reverse previous gains through privatization and financial deregulation. Historian Robert Brenner notes that, since 1973, advanced capitalist economies have performed poorly, with slowed GDP growth, investment profits, and productivity. He identifies upward redistribution via politics as a way for the ruling class to reclaim capital accumulation through mechanisms such as tax cuts, low interest rates for government debt investment, and the privatization of public assets at discount prices while socializing massive losses by converting private debt into public debt, such as after the 2008 financial crisis.⁹ In wealthy countries, the state did not contract in a simple way; take, for example, Thomas Piketty’s finding that tax revenues in rich countries as a percentage of national income never dropped during the neoliberal period. What we have, arguably, is a retooling of the state to more closely reproduce the interests of capital.¹⁰ This in turn has given weight to some discussions about the ways neoliberalism extends but hides corruption. Wendy Brown, for example, points out that “neoliberal governance facilitates a more open-handed and effective fusion of political and economic power, one that largely eliminates the scandal of corruption as it erases differences in goals and governance between states and capital.”¹¹

Although global liberalization proceeded along varied trajectories, this political economic description of neoliberalism fits the Mexican case particularly well. Neoliberalism in practice was not a simple state-market separation but an instrumentalization of the state for private profit. AMLO has insisted that this is the concrete form taken by post-developmentalist capitalism. For instance, in a February 2021 press conference, López Obrador argued, “In our country, capital accumulation didn’t necessarily arise from bourgeois exploitation of workers but from corruption. It intensified in the neoliberal period. . . .  This isn’t dismissing Marxism but acknowledging that Mexico’s case is special.”¹²

López Obrador declared that his victory in the 2018 presidential elections marked the dawn of a new political regime rather than merely a change in government. Central to this purported transformation is a departure from the neoliberal economic policies that have been dominant in Mexico for decades. In March 2019, a few months into his term, AMLO announced the end of neoliberalism in the country: “The neoliberal model, with its policies against the people, of stealing and giving away [public resources], are hereby abolished.” This bold statement sparked a lively debate on the extent of this abolition and what, if anything, had replaced neoliberalism.

The transition away from neoliberalism under AMLO is moderate but significant. Rather than an outright rejection of the post-Keynesian order, AMLO’s policies can be described as post-neoliberal. Indeed, as William Davies and Nicholas Gane have put it:

With every year that passes, the number of apparently countervailing tendencies within and against neoliberalism is also growing. On the basis of a vastly improved understanding of what neoliberalism is, we can at least now agree that it is unlikely to terminate with any definitive paradigm-shifting crisis. In that sense, “post-neoliberalism” cannot refer to something that comes exclusively after neoliberalism, but rather — as with the notion of “post-Fordism” — to a set of emergent rationalities, critiques, movements and reforms that take root in neoliberal societies and begin to weaken or transform key tenets of neoliberal reason and politics.¹³

How has this process looked in AMLO’s Mexico? The term “post-neoliberalism” captures two key aspects of AMLO’s government: (1) the strategic adoption of elements of neoliberal discourse and policy to mitigate neoliberalism’s effects, and (2) the practical negotiation of an anti-neoliberal agenda forged when Morena was a social movement but tempered once it was in power by the realities of a nation transformed by neoliberalism in ways that could not be quickly or easily reversed. AMLO’s post-neoliberalism aims to reshape the relationship between state and market, specifically by relegitimizing the state as a social actor and a crucial instrument for national development, and to reignite class politics.

In this text I outlined three dimensions that help us understand the success of the electoral left in contemporary Mexico. I argued, first, that the distinctive feature, comparatively and historically, of AMLO’s project is his progressive reframing of anti-corruption politics; second, that this feature is premised on a diagnosis of corruption as a specific political economy; and finally, that AMLO’s tenure is better understood as post-neoliberal rather than anti-neoliberal.

Any analysis of AMLO’s success must also grapple with the dilemmas inherent in transitioning away from neoliberalism, many only mentioned here in passing. These include attempting to revive a welfare state with a deteriorated administrative apparatus, the contradictions of neo-developmentalist projects amid the looming climate crisis, the complexities of implementing progressive taxation during periods of stagnant growth, and the challenges of shifting away from a foreign investment–driven growth model. Consequently, the story of the Left in twenty-first-century Mexico holds broad relevance, as these structural contradictions mirror the dilemmas faced by the contemporary left worldwide.

In recent years, interest has grown about what neoliberalism is or was in practice as opposed to in theory. That is, the question of actually existing neoliberalism has now come to the forefront, accompanied by a series of inquiries into whether neoliberalism across the world differed in practice from neoliberalism in the Western core, whether it is accurate to say that the state really contracted during the period or if it was actually retooled in new and specific ways, and whether market and state were really separated or merged even more than during the Keynesian period. Was it protectionism for the West and free trade for the rest? Should we be thinking of neoliberalisms in the plural rather than in a monolithic sense? That this set of questions emerges more clearly just when a variety of post-neoliberal regimes begin to take shape is perhaps no contradiction, since “the owl of Minerva takes flight only at dusk.” The Mexican case should be at the forefront of these political-intellectual efforts. 

At various points in history, many authors have argued that nationalist politics was entering its final phase. In early nineteenth-century liberal thought, there was already the belief that nationalism was a declining phenomenon, destined to disappear soon with the expansion of global trade. The idea that people’s national identity (their nationality) was losing importance due to the expansion of world capitalism was shared by Marx in his youth (though not in his more mature writings). This position enjoyed a certain popularity in both the nineteenth and twentieth centuries, albeit cyclically: it disappeared during periods when nationalisms erupted or clashed militarily, only to resurface in subsequent periods.

In the 1980s, Eric Hobsbawm suggested that the great increase in studies on nationalism was a sign that the phenomenon had finally entered its concluding historical phase: “The owl of Minerva which brings wisdom, said Hegel, flies out at dusk. It is a good sign that it is now circling around nations and nationalism.”¹Hobsbawm was correct in noting that studies on this subject had significantly increased during those years; however, his hope, like that of others before him, proved erroneous.²Only a few years later, with the fall of the Socialist Bloc and its fragmentation into numerous nation-states, there was an outburst of several nationalist claims and conflicts that were thought to be outdated.

In the relative optimism of the 2000s, Michael Hardt and Antonio Negri reiterated the view in Empire that global capitalism was at last wiping out the reactionary narrowness of national belonging. Thus national identity came to be seen not only as something to be rejected politically but also as an issue of minor significance.³And yet, in the last decade, we have once again witnessed the resurgence of the nation as a conflicting political identity, largely championed by right-wing or separatist movements. Donald Trump, Jair Bolsonaro, the rise of Scottish independence in the United Kingdom and Catalan independence in Spain, the electoral success of several nationalist right-wing parties across Europe, and the dramatic Russian invasion of Ukraine with increasingly radicalized Russian and Ukrainian nationalisms — all these diverse phenomena share a common denominator: the mobilizing power of national identity.

It is undeniable that the political power of nation-states is diminishing in many parts of the world, weakened by an increasingly globalized economy and the growing strength of transnational corporations and organizations. However, this should not be confused with the political decline of national identities, a conflation Hardt and Negri made in their book. On the contrary, the weakening of nation-states’ power often goes hand in hand with the spread of nationalist sentiments. Globalization, migratory flows, the neoliberal dismantling of the welfare state, and the decline of deeply rooted collective identities such as religion and class belonging seem to have strengthened national identity. This is reminiscent of Polish sociologist Zygmunt Bauman’s characterization of contemporary society as “liquid,” marked by instability, precariousness, and uncertainty: a society based on fluidity and mobility, where social relations and structures are unstable and changeable, leading to increasing inequality and a loss of community and solidarity.⁴In the face of this reality, national identity has reemerged as a safe haven for people seeking a sense of belonging and community. It has become a symbolic identity to cling to in order to reduce feelings of alienation and uncertainty. Thus, while neoliberal globalization has uprooted many traditional identities and communal values, the national community has once again become a source of collective identification, revitalizing nationalist politics.

According to the World Values Survey of 2017–2022, 88.5 percent of people interviewed worldwide stated they were “very proud” or “quite proud” of their nationality. Furthermore, the survey included only the nationality corresponding to the nation-state of the interviewee, thereby excluding minority nationalities, a factor that would likely have further increased the overall value. In Europe, as shown by the European Quality of Government Index, the nation remains the territorial identity to which citizens feel most attached, more than regional identities and much more than European identity. Finally, the popular classes, particularly those with lower levels of education, tend to be more “nationalized” in their culturalization process. This means they are more responsive to symbolic and cultural elements related to national belonging compared to individuals with higher educational or class backgrounds, who tend to be more culturally cosmopolitan.⁵

In light of this situation, the Left cannot simply ignore the existence of national identities. These identities are integral elements of the political and social landscape in which the Left operates and, for the foreseeable future, they do not appear to be diminishing in importance. Thus, calls for the Left to reject national identity are a dead end and risk distancing it from its own popular traditions. On the contrary, it seems necessary for the Left to embrace — at least to some extent and in certain ways — national belonging.

This is not a novel idea: strange as it may seem today, the concepts of “left” and “nation” were originally not far apart. Hobsbawm goes so far as to suggest that these two political concepts not only arose from the same cradle — the French Revolution — but were also in some way synonymous.⁶In the troubled French summer of 1789, the Third Estate declared itself the complete nation, initiating the French Revolution and boosting the very concept of nation at the political level. The estates-based political representation of the realm was about to be supplanted by the idea of the people-nation: the conflation of the nation with a collective entity, the people, as the bearer of sovereignty and in opposition to the privileged classes. When the people of Paris stormed the Bastille on July 14 and took control of the city, they did so in defense of the Third Estate, which had transformed into the National Assembly. Once the National Assembly was fully established, the supporters of the Revolution and the former Third Estate sat on the left side of the chamber. As such, they were described as both “the National Party” and “the Left,” creating the political concept of the Left at the same time.

The example of the French Revolution reminds us of an important element of this discussion: the idea of “the people,” which intersects with both left-wing and national politics and remains a constitutive and overarching concept of contemporary politics. If the aim of the Left is to build popular consensus and pursue politics that address the interests of common and working people, then it must forge an emotional bond with the people. But who exactly are the people? As Ernesto Laclau explained, the people as a sociological category hardly exist and are rather a political construction.⁷This means they do not exist independently of politics; instead, politics gives them shape and meaning. The people are a political construction that unites (or articulates, as Laclau says) a plurality of claims, needs, and identities that are diverse but collectively perceived as ignored by the elite, who hold economic and political power. Through this process, the people become a new political entity that cannot be reduced to the mere sum of its diverse components, as it transcends them into a single unifying identity in which different individuals can recognize themselves. For our discussion, it is crucial to note that it is very difficult to conceive of the people politically other than as a “nation-people.” In the vast majority of contemporary societies, the people largely constitute the national community, and the defense of popular sovereignty takes place within the borders of the nation-state. Moreover, the nation generates rituals, symbols, and cultural references that are crucial in shaping popular identities and a sense of belonging among the people. This further merges the people with the national community.

Antonio Gramsci developed the concept of nazionale-popolare to indicate what is both national and popular. Initially, he specifically related it to cultural productions: literary or artistic works that express the distinctive characteristics of national culture and are recognized as representative by the popular classes. Today we use the term “national-popular” in a more general sense to refer to all those cultural, aesthetic, behavioral, and habitual traits widespread among the common people of a particular country. However, the concept in Gramsci’s writings also goes beyond its cultural dimension and concerns the identification of the popular masses with a common national project. For Gramsci, revolutionary struggle should not fall into “the most superficial cosmopolitanism and anti-patriotism.” Instead, it should forge a sentimental bond with the “people-nation.”⁸Gramsci believed that every revolutionary movement striving to govern must embody and identify with the country itself, and this principle should also be applied to the working class in its hegemonic struggle against the bourgeoisie. This reflection did not arise in a vacuum; it was already sketched in the Communist Manifesto of 1848, when Marx and Engels wrote that the proletariat, to achieve victory, “must constitute itself the nation” and is therefore “itself national, though not in the bourgeois sense of the word.”⁹One can hear in these lines the echo of the French Revolution, with the Third Estate turning itself into the nation. But there are different senses of being national.

Examples of this national-popular dimension are endless in the history of the twentieth-century Left. The communist and working-class parties of the past century were deeply rooted in the traditions, history, and culture of their respective countries. This was not a harsh or conservative nationalism but a combination of love of homeland with the imperative need for friendship among all peoples; national identity was an integral part of political identity without undermining a commitment to socialism, progress, and internationalism.

This is precisely the aspect that Jean-Paul Sartre identified as the key to the success of the postwar Italian Communist Party (PCI), which went on to become the strongest communist party in all of Western Europe. As longtime Italian communist Luciana Castellina recounts, Sartre said during one of his visits to Italy, “Now I understand [why the PCI is so strong], the PCI is Italy!”¹⁰By this, Sartre meant that the party was not a separate vanguard but a body shaped by the same emotions, behaviors, and memories as the Italian people at large.

The history of twentieth-century antifascism is also imbued with patriotism. Examples are numerous, from the Italian communist partisans, who were named after the national hero Giuseppe Garibaldi and who fought against the fascist “traitors of the homeland,” to the Portuguese communists under António de Oliveira Salazar’s regime.¹¹As their leader Álvaro Cunhal said in 1946, it is

in the struggles against fascism installed in power that the working classes found their homeland again: Portugal that struggles for freedom and democracy, Portugal that aspires to well-being, progress, and culture, Portugal that wants an honorable place in the world of democratic nations. Fighting against fascism, the Portuguese people learn to sing the Portuguesa [the national anthem] and learn to wield the national flag.¹²

The same holds true for many leftist parties in the Global South, both old and new. The Bolivarian Left in Latin America, particularly exemplified by Hugo Chávez, illustrates this well: a socialist Left steeped in patriotic rhetoric and national symbolism. Chávez’s frequent appearances in a tracksuit bearing the colors of Venezuela were symbolic of this. Yet this did not hinder significant progress toward supranational cooperation among Latin American countries. If Venezuela was the patria, then Latin America was the patria grande.

If the history recounted thus far sounds too simple, it is because there is yet another crucial issue that must be incorporated: the contemporary hegemony of the Right in defining national identity. In recent years, many Western countries have witnessed the consolidation of right-wing dominance in the realm of national identity, with national identity being politicized and shifting to the right. When we think of national identity and pride today, we frequently associate them with conservatism, the defense of traditions, ethnic belonging, hostility toward diversity, and rhetoric against migrants. What it means to belong to a country and be proud of it is currently heavily controlled by the Right, which has excelled in appropriating this identity and filling it with its own political values.

If the Left wants to put forward a national-popular project, it must do so not simply by incorporating elements of national identity into its discourse but by wresting them away from the Right, giving them an inclusive and progressive interpretation. Borrowing Marx and Engels’s words, it ought to be national, “though not in the bourgeois sense of the word.” To do so, it is necessary to engage in counterhegemony. On paper, this is possible because the nation is neither predetermined nor fixed; national identity and belonging are not univocal phenomena but can assume different meanings and be linked to different sets of political values. Nations are, as argued by Benedict Anderson in his groundbreaking work Imagined Communities, “modular,” and thus “capable of being transplanted, with varying degrees of self-consciousness, to a great variety of social terrains, to merge and be merged with a correspondingly wide variety of political and ideological constellations.”¹³

The nation always has a boundary that divides who is part of it and who is not (as Anderson explained, a defining characteristic of the nation is that it is “limited”), but this boundary is ever changing and political. It is a line of exclusion that can be based on diverse criteria, from race to social class, from ethical values to language or culture. Having the privilege to determine this boundary is at the core of the struggle for hegemony over the national terrain and is, in fact, a crucial issue in contemporary politics.

The experience of Podemos in Spain during its early years is perhaps the most systematic example of counterhegemonic politics on the national terrain. The leadership of the party was convinced that, in order to advance a popular and leftist agenda, it was necessary to reclaim national identity from the Right and redefine it. Podemos leaders thus began to recurrently declare their pride in and love for Spain. They praised the patria and their being Spaniards, and they openly labeled their party’s policies as patriotic. On one hand, they did this to attack their political opponents, specifically those on the Right, labeling them as “enemies of Spain” and “anti-patriots” due to corruption, privatization policies, welfare cuts, and tax breaks for the wealthy. On the other hand, they aimed to promote a progressive form of patriotism that left-wing individuals and ethnic minorities could identify with. They did so by defining the country’s core attributes as popular mobilization, solidarity, a welfare state, and a moral community not based on linguistic or ethnic particularism.¹⁴

Engaging in counterhegemony on the terrain of national belonging is a political choice that appears to be crucial. Failing to do so means leaving the field open for the Right to seize all the national-popular elements that are part of our collective life, associating them with its own conservative ideas. This allows the Right to impose its idea of what the country represents and what it means to be part of it without challenge. The result is a conservative and exclusionary national identity for which migrants and minorities pay the price every day, labeled as nonmembers of the community. For this reason, the founders of Podemos argued, nothing worries the Right more than seeing the emergence of an open and inclusive idea of the nation, with which people of different origins and cultures can fully identify and where loving the country means fighting for quality public schools and hospitals rather than wanting to seal the country’s borders.

However, we must not fall under the illusion that this is a simple political strategy, nor that it is free from risks. Magical solutions rarely exist in politics. If the Right has managed to hegemonize the sense of belonging to a certain country, challenging it with a counterhegemonic project requires resignifying many aspects of national identity — and resignifying is by no means easy. Precisely because resignifying is important, it is necessary to look with open eyes at the issues associated with this political choice.

The first issue is that it requires significant hegemonic strength. Memory plays an important role here, and when a certain meaning of national identity is deeply rooted in the collective imagination, changing it can prove quite difficult. Altering widespread meanings in a country’s common sense usually requires considerable time and power. In this regard, the example of the Italian right is illuminating. Silvio Berlusconi and Matteo Salvini have both been very capable of hegemonizing and changing the meaning of Italian identity, detaching it from the national myth of the Resistance and associating it with anti-communism, cuts to public spending, and free enterprise (in the case of Berlusconi), and xenophobia and hatred of the other (in the case of Salvini).¹⁵But this was accomplished with political and media power: Berlusconi controlled the country’s most important television channels and used them shamelessly to promote a narrative advantageous for his party, Forza Italia. Salvini benefited for years from dominance on social networks, supported by an aggressive, unscrupulous, and extremely expensive social media apparatus known as La Bestia. Without political or media power, it is difficult to resignify national identity, and such attempts may backfire. National identity, for all the reasons mentioned, is a powerful force. Engaging with it is like playing with fire. If you politicize national identity to use it against the Right but eventually fail to alter its meanings in society, there is a concrete risk that you will have contributed to popularizing words, symbols, and forms of belonging that the Right will continue to exploit for its political goals.

Another issue is that the more you need to resignify, the more it indicates that you are not at ease with the sedimented elements of national identity. You risk being alienated from the popular classes, for whom national cultural references tend to be more common. In short, if the preexisting elements you can rely on to build a left-wing idea of the nation are few, it means you will have to construct an idea of the country with radically new meanings, and this may create difficulties in communicating with already nationalized popular sectors. It is necessary to continuously find a difficult balance between the need to resignify national belonging and pride with progressive meanings and the need to stay close to the words, symbols, and cultural references of the people.

Years ago, when I was interviewing members of Podemos for my doctoral research on the party’s patriotism, they told me how lucky we were in Italy, where, according to them, it would be much easier to reclaim national identity for the Left. They believed this because Italy had Garibaldi, the Resistance, and the victory over Nazi Fascism, from which the new Italy had been born. Meanwhile, they had no similar historical references in Spain and were forced to pursue a patriotism that was strongly rhetorical but devoid of cultural symbols, with a national flag too closely associated with the monarchy and too difficult to resignify. Exemplary of this is the Madrid uprising against Napoleon’s invasion in 1808, often cited by first leader of Podemos Pablo Iglesias as an example of Spanish pride, which likely has much less symbolic power than, for example, the Italian Resistance.

There is one final point that merits discussion: the issue of migration. In an era when European countries are experiencing significant migratory flows — despite governments’ criminal attempts to block them, resulting in the Mediterranean Sea becoming a graveyard for thousands — people with diverse ethnocultural backgrounds increasingly settle in Western cities, frequently becoming victims of poverty, discrimination, and exploitation. How can the Left assert a connection to national identity without turning a blind eye to these individuals?

The very framing of this question suggests that, to some extent, we have already internalized the right-wing discourse on what it means to belong to a particular country. Ethnic and cultural pluralism is considered an issue for the nation only from a right-wing perspective, and challenging this notion is a core aspect of the counterhegemonic effort. Jean-Luc Mélenchon in France is emblematic of this. His idea of France and French pride, as promoted by his party, La France Insoumise, embraces ethnic and religious pluralism. Mélenchon even adopted the concept of “creolization,” the continual blending of different influences that together constitute a national culture. In his words, being French

does not mean belonging to a particular religion or having a given skin color, cooking certain dishes, or loving specific works. To be French in the Republic is to subscribe to the program ‘liberté, égalité, fraternité’ and respect the law. It is the universalism of the French Revolution that allows France to be a creolized country.¹⁶

It is therefore unsurprising that, despite France Insoumise’s extensive use of national symbols and positive references to France, the party performs very well electorally in the Parisian suburbs, which are home to many individuals originating from outside Europe.

This strategy can be complicated by the fact that migrant communities might be less responsive to the use of certain national-popular references specific to the host country, as their own cultural references differ. The goal is to find a balance between the need to resignify national belonging and pride in a manner that fully includes people with migratory backgrounds and the need to remain close to words, symbols, and cultural references that are national-popular. Nonetheless, this objective may be relatively easier to achieve than it seems, given that migrant populations in the host country tend to socialize within the lower strata of society due to discrimination, lack of resources, and limited opportunities. As a result, they come into frequent contact with national-popular cultural and symbolic references, which, as previously mentioned, are more prevalent in the manual working class than in the urban and educated middle class.

“What I want to demonstrate is that you can be black, come from the suburbs, dress modestly, and still love France. Because France belongs to all of us!” With these words, Stéphane Blé concludes his first candidate speech in the French Netflix series En Place. Stéphane is a social worker from the suburbs of Paris and a leftist, but he is disillusioned with the opportunism, cynicism, and lack of ideals of the center left, so he decides to run for the presidential elections himself. With the slogan “France for Everyone,” Stéphane begins an unconventional and original electoral campaign that, as the series progresses, brings him closer to the possibility of becoming France’s first black president.

Stéphane’s statement illustrates the central argument of this article: the need for a left-wing idea of the country that represents an inclusive and progressive community while challenging the right-wing vision of what the nation stands for. This is a necessary condition for political consensus because, as Michael Harrington wrote in his autobiography, “If the Left wants to change this country because it hates it, then the people will never listen to the Left and the people will be right.” Loving one’s country does not mean loving it as it is, but, in Harrington’s words, “to sense the seed beneath the snow; to see, beneath the veneer of corruption and meanness and the commercialization of human relationships, men and women capable of controlling their own destinies.”¹⁷It means actively working to change the country while identifying with it and representing it. This is the profound sense of the expression that the proletariat “must constitute itself the nation” that appears in the Communist Manifesto and carries with it the echo of the French Revolution.

To be politically effective, an innovative idea of the country cannot be completely alien to the existing society and its core values. From a socialist perspective, the relationship between the present and future society is indeed always dialectical. Marx did not question the goals of modernity, such as freedom and progress, nor the means to achieve them, such as the development of productive forces, but he argued that none of these modern ideals could be fully realized without overcoming society’s class division. Similarly, to build a new idea of the country, the relationship with the national-popular must be dialectical: references and words are taken from popular culture, leveraging some, attempting to change the meaning of others, and adding new ones. As Gramsci taught us, a new society cannot be born in opposition to popular sentiments and common sense; instead, these must be the starting point, toward a new “collective national-popular will” that transcends and incorporates them into a new vision.

It is undeniable that patriotism also poses risks for the Left, because the sense of national belonging today leans to the right in many European countries and beyond. And when you use the political weapons and words of the opponent, you risk legitimizing those weapons and words without changing them, losing your own values and strategic horizon. What is needed to avoid this pitfall is a comprehensive and counterhegemonic idea of the nation, not a sporadic and instrumental use of the opponent’s rhetorical weapons. A left-wing idea of the country should oppose the right-wing vision by exposing its miseries, hypocrisies, and inhospitableness, presenting itself as a more attractive option. It should not be the exclusionary, ethnically and culturally homogeneous nation of the Right, where everyone fends for themselves at the mercy of market laws, but a solidaristic community that loves its land and rejects all forms of discrimination and marginalization — where the emotional bond with the country does not mean a desire to close the borders but an insistence on the dignity of common people who uphold society through their work.

This does not imply that the Left should shift the grounds of political confrontation solely to the issue of national belonging, nor that it should give it primary political importance. It means recognizing that national identity is not external to the political struggle but is rather one of the battlegrounds where the fight for hegemony takes place — a battleground the Left should not abandon, where it can bring its own values and idea of community, preventing the Right from deciding exclusively what the country represents. Otto Bauer was the first Marxist politician and intellectual to write a treatise on nations from a Marxist perspective, and what emerges from his complex theoretical reflections is that nationality is ultimately an unstable terrain, perpetually in flux and torn by the constant conflict between class viewpoints.¹⁸In other words, national belonging is just another field for class struggle.

For all these reasons, one cannot simply combine the recognition of national interest with the Left’s battles, because national interest detached from political articulation does not exist. What is in the nation’s best interest depends on what the nation is and where its political boundaries are drawn. It is therefore not a matter of addition but of hegemony: the point is to assert that the Left’s battles are in the national interest.

After all, how could we not treat measures such as expanding and improving public health, schools, and transportation; reducing the tax burden for the working class and increasing it for those with immense wealth; public control of national energy production to initiate a real ecological transition toward clean energy; new laws ensuring no one is discriminated against based on their sexual orientation, gender identity, or skin color or left alone in the face of poverty, uncertainty about the future, and loneliness; and new labor protections that combat capitalist exploitation and low wages as battles for the country? These are left-wing programs that would make the country a better place to live and give it a future after decades of neoliberal policies have worn it out, sold it off, impoverished it, and embittered it, creating enormous inequality and injustice.

A national-popular project can give meaning, credibility, and vigor to left-wing goals, articulating and merging them into an idea of the country.

It is no coincidence that accounts of the origins of the welfare state emerged in the late 1980s and 1990s, when welfare programs and social policy became the source of deep and significant divides in American politics. Scholars have now connected this moment to the fracture and breakdown of the New Deal political order, following a period of Democratic Party rule and triumphant political liberalism. By the late 1980s, amid narratives about a significant rise in crime (particularly in cities and urban centers) and after the ascendance of figures like Richard Nixon and Ronald Reagan, many components of the New Deal state had come under fire. It was convenient and plausible for many to blame urban unrest and race riots on the party that had championed civil rights reform in the 1960s, criticizing affirmative action and welfare programs.

Seeking to deflect this line of attack, scholars in the late 1980s began to construct a more historically accurate account of the US welfare state’s development. In December 1991, in a special issue of the Nation, Frances Fox Piven and Richard A. Cloward stated the issue plainly: “The current political wisdom, even among some on the left, is that blacks and liberals are to blame for the Democratic Party.”¹¹ Piven and Cloward, as well as their fellow contributors to this special issue (including Adolph Reed Jr, Julian Bond, Rogers Smith, and James Forman Jr), attempted to recast this characterization by highlighting the structural flaws of the New Deal Democratic coalition, particularly when it came to race. Their goal was to defend affirmative action and critique the Democratic Party’s approach to welfare reform.

The same tenor and critique clearly motivate two of the earliest scholarly arguments in this vein: Jill Quadagno’s The Transformation of Old Age Security and The Color of Welfare. In the earlier volume, Quadagno takes a broad view of welfare state development, asking “why the American welfare state developed later and less comprehensively than its European counterparts.”¹² She identifies three primary explanations: the strength and power of the private sector, significant divisions between craft and mass-production workers, and the “dualism” of American economic development in the North and the South.¹³ Quadagno’s focus on regional dualism in American political development in particular provides a comprehensive account of the features of the Southern plantation economy, which connects to her arguments about race, Southern lawmakers, and the welfare state. While the lines of class conflict in the Northern economy were drawn between capital and labor, the South’s “labor-intensive agrarian sector” formed a distinct mode of production, not feudal or capitalist but a “plantation mode of production” that was most “characteristic of the cotton-growing counties.”¹⁴ And, importantly, it was a mode of production that relied heavily on African American workers. The Southern agricultural sector sought to preserve control over the plantation mode of production, which it was able to do given the critical committee leadership of Southern Democrats in Congress, particularly in the House of Representatives, and in the Democratic Party.¹⁵

Especially in the early phase of New Deal policymaking, Quadagno traces Southern lawmakers’ attempts to restrict the size and scope of federal social insurance programs, both by insisting that states be granted greater control over program administration and by arguing for a wide variety of exclusions. Yet Southern lawmakers were not alone in weakening insurance programs; Quadagno also argues that business was critical in pushing toward a contributory (not redistributive) social security framework, and that organized labor was too divided internally to provide an alternative.¹⁶ Ultimately, Quadagno contends that the resulting welfare state reflected fundamental class-based hierarchies. However, she also points to other elements of social stratification. Referring to relative access and benefits provided in old-age assistance and disability insurance, she emphasizes that “the quality of benefits varied, not only along lines of class but also by race and gender.”¹⁷

But Quadagno’s conclusion is not that racial stratification in program benefits was an effect of class-based inequities; she argues that Southern lawmakers were motivated by concerns that broad, national legislation would “undermine planters’ paternalistic control over tenant labor, particularly black labor,” and that “southern congressmen had no intention of letting federal funds go directly to black workers.” In support of this claim, Quadagno points to what has become one of the most frequent examples of Southern lawmakers’ racial preferences being written into the law: the fact that agricultural and domestic workers were excluded from the SSA and the NLRA. As of 1935, she points out, “three-fifths of all black workers, most of whom resided in the South, were employed in agricultural or domestic service.”¹⁸

However, disparate impact does not necessarily prove discriminatory intent. While it was true that the 3.5 million black workers who were excluded from the SSA constituted the majority of black workers, many of whom lived in the South, they did not constitute the overall majority of workers cut out of federal insurance programs. As Social Security historian Larry DeWitt has documented, these agricultural and domestic worker exclusions also prevented nearly twelve million white workers from benefiting from the old-age insurance program.¹⁹ Although Southern lawmakers employed the same kinds of local control arguments in marshaling opposition to federal attempts to roll back Jim Crow laws and later to resist implementation of desegregation following Brown v. Board of Education, their objectives in this case are not best understood through the lens of racial exclusion.

Instead, my own research has found much stronger support for a version of Quadagno’s dualism thesis. The division between the agricultural and industrial sector, however, transcended regional lines in important ways. In national policy debates over federal agricultural and labor regulation, a variety of representatives of the agricultural sector argued forcefully (and successfully) for agricultural workers to be excluded from industrial policy for fear of “dual administration” under differing policy domains. Policymakers, including some New Dealers, accepted this distinction and allowed agricultural workers to be segmented from the industrial workforce. Importantly, this delineation was not challenged by organized labor, which instead remained largely silent in this policy fight.²⁰

Broadening the lens beyond the Southern Democrats brings into sharper relief the reasons their policy proposals were ultimately accepted by other national politicians. As David Kennedy suggests, Roosevelt’s willingness to devolve authority to the states was rooted in “the constitutional doubts that overhung any federal initiative,” which “created a tightly confining matrix within which the Committee on Economic Security planners were compelled to work.”²¹ Roosevelt needed to narrowly tailor policies to avoid the constitutional challenges that had brought down the first wave of New Deal policies. Despite Quadagno’s attention to these dynamics elsewhere in the book, she does not provide the same context to help make sense of the agricultural and domestic workers’ exclusions.

Racial stratification and the racism of Southern lawmakers were not the primary focus of Quadagno’s 1988 volume. However, in The Color of Welfare, published in 1994, she moved away from her focus on class and the development of the welfare state, arguing instead that “means-tested programs of the American welfare state had less to do with maintaining class divisions than with maintaining racial segregation.”²² Quadagno’s shift in analytical framework was likely an effort to align with other Clinton-era welfare critiques. In the introduction, she acknowledges the significance of urban and social unrest in the 1990s, including the Rodney King riots, and criticizes President Clinton’s failure to reject Republican arguments linking the root of the unrest to “liberal social programs of the 1960s” that unfairly benefited racial minorities.²³ Instead, she argues, the triumphs of the Great Society and War on Poverty resulted from their use of social programs designed to promote equal opportunity for African Americans through community-action programs, job-training programs that forced skilled unions to integrate, and, most important, affirmative action policy. These social programs were not special favors but rather necessary corrections to a social welfare state established in the New Deal period that had created “impediments to racial equality.”²⁴ The primary culprits, she argues, were not only Southern Democrats, who refused to “support any welfare programs that would place federal funds in the hands of black sharecroppers,” but also President Roosevelt and the New Dealers, who agreed to exclude African Americans from core Social Security programs in order to secure Southern support. While Southern Democrats were the architects, it was New Dealers’ acceptance of those exclusions that cemented them into law.

These assessments lead Quadagno to a broader critique of the civil rights legacies of the Northern Democrats and Roosevelt, beyond his capitulation in social welfare provision. Quadagno argues that, in an effort to “stabilize his unwieldy coalition of northern workers and white southerners,” Roosevelt refused central demands of civil rights activists at the time — namely, to support anti-lynching and anti-poll-tax legislation in Congress. Roosevelt’s refusal to support civil rights priorities in the 1930s and ’40s is frequently cited as evidence of the segmentation of racial and economic liberalism in this period of partisan history. Eric Schickler has effectively documented how slow, state-level shifts led the Democratic Party to embrace national commitments that reflected principles of both racial and economic liberalism in the 1960s.²⁵ However, Schickler’s own analysis also indicates that, regardless of Roosevelt’s civil rights policies, African Americans were more supportive of New Deal federal jobs and social welfare programs than white Americans, which supports the point that, despite its limitations, the New Deal was a transformative program for African Americans.²⁶ Further, recent scholarship has highlighted other important aspects of Roosevelt’s civil rights legacy. Kevin McMahon documents Roosevelt’s creation of the Civil Rights Section in the Department of Justice and his focus on and support for civil rights efforts in the federal judiciary.²⁷ Sidney Milkis points to the importance of Roosevelt’s 1938 purge campaign — an electoral effort to push Southern Democrats out of office. While ultimately unsuccessful, the campaign shows that Roosevelt and Northern New Dealers were engaged in concerted efforts to rein in the power and influence of Southern Democrats.²⁸ These accounts point to a more complicated and fraught relationship between Roosevelt and the Southern Democrats.

Despite these efforts to purge Southern Democrats, Quadagno describes Roosevelt as primarily capitulating to them. She argues that Roosevelt actively wove “racial inequality into his new welfare state,” again pointing to the exclusion of agricultural and domestic workers from old-age insurance and the lack of national standards for unemployment insurance. “These omissions were not random,” she notes. “Rather they reflected a compromise reached with southern Democrats over the structure of the welfare state.”²⁹ Quadagno does not provide her own empirical evidence for these claims of exclusionary intent behind Southern Democratic demands and Roosevelt’s response. Instead, she references two other accounts of the development of the US welfare state: James Patterson’s America’s Struggle Against Poverty and Edward Berkowitz’s America’s Welfare State.³⁰

Yet neither of these accounts provide evidence that racial exclusion was the primary factor that led to the agricultural and domestic workers’ exclusions. Patterson argues that the failure to offer a comprehensive and national unemployment insurance program resulted from liberals’ inability to build support for the idea that, since “unemployment was a national structural problem, it should be funded by federal subsidies from general tax revenues.” Their second failure was not to secure the inclusion of the classes of workers most in need — “employees of small firms or to domestic and agricultural workers,” all of whom were excluded. Instead, unemployment mirrored private pension funds, which had been developed in the 1920s, and reflected an overall desire for economic efficiency over broad inclusion.³¹ Reflecting on the consequences, Patterson highlights that “women, blacks, and migrants suffered especially from this policy.”³²

Similarly, Berkowitz’s discussion of the exclusion of agricultural and domestic workers points to New Dealers’ and social insurance architects’ acceptance and adoption of the “popular prejudice” that farms and farmers functioned very differently than large industrial employers. In particular, planners accepted the idea that farmers “kept poor records of their payroll, and in many cases hired live-in help, which meant that part of the laborer’s income took the form of room and board.” Exclusion of these workers, then, was an effort to “start modestly” and prioritize “effective enforcement” of the plan.³³

Both Patterson and Berkowitz provide compelling evidence that the exclusion of agricultural and domestic workers was intentional, not random, and that it resulted in an uneven national social insurance system. The delineation between the industrial and farm economy certainly served the interests of the largely farm-based economy in the South. But these exclusions did not have exclusively Southern roots. For example, Mary Poole documents the influence of Wisconsin economists on members of Roosevelt’s Committee on Economic Security. Wisconsin’s system for unemployment insurance, which was established in 1932, served as a model for the federal architects of the SSA, and importantly the Wisconsin program excluded agricultural and domestic workers.³⁴ Richard Rodems and H. Luke Shaefer document that agricultural workers were similarly excluded from welfare programs in other Western democracies.³⁵

Despite this being a broader tendency, Quadagno focuses on race as the primary and unchanging barrier to social welfare in the United States. Even after the political influence of the South faded, Quadagno claims, race continued to be “the defining feature of the American welfare state in the 1960s.”³⁶ Yet it was during the 1950s that Congress amended the SSA to include agricultural and domestic workers in the programs. Quadagno’s failure to acknowledge this essential change significantly undercuts her argument, and it also elides the critical point that Southern Democrats’ resistance shifted significantly during the New Deal period. Economic historians Lee Alston and Joseph Ferrie argue that, at a certain point, Southerners no longer marshaled the same resistance to old-age benefits and other welfare programs.³⁷ Instead, as later sections will discuss, Southern resistance was trained on labor policy.

To understand the shift in Quadagno’s causal arguments, it is useful to consider two subsequent accounts that sought to further document racial segmentation in the welfare state and, in so doing, opened two potential directions for subsequent scholarship. Robert Lieberman’s Shifting the Color Line and Michael K. Brown’s Race, Money, and the American Welfare State each explore New Deal welfare state development and its impact on African Americans. Although they draw on similar bodies of evidence, their distinct arguments lead to fundamentally different assessments of the New Deal. While both authors examine policy development and implementation, Lieberman’s emphasis on racial intent as a primary causal force in the design and implementation of New Deal programs runs against Brown’s narrative, which underscores that the racial effects of policies resulted from an array of influences. These distinct historical and empirical trajectories point toward different political conclusions.

In Shifting the Color Line, Lieberman, aligning closely with Quadagno, argues that “race inhibited the development of a strong, unitary, centralized welfare state in the United States.” Here Lieberman adopts a dialectical understanding of race, arguing not only that race stymied welfare state development but also that welfare state development in turn “helped reshape the politics of race and the place of racial minorities in American life,” fixing the position of African Americans in contemporary society. Lieberman’s use of this dialectical frame to make sense of the politics of race provides a clear illustration of what sociologist Karen Fields and historian Barbara Fields have described as a tendency to describe a variety of identities, experiences, and social practices under the umbrella term “race.” In particular, using “race” as a shorthand produces a “weird causality,” conflating ideas about group characteristics and identities (race) with the social practices that act on and cement perceptions of those identities (racism).³⁸ Ultimately, Lieberman’s account suffers from this causal confusion. While he points to specific actions of policymakers and administrators, he also claims that those same policies contain a set of “racially relevant, or race-laden, exclusions,” which does little to describe the cause or intention behind them.³⁹

Lieberman’s account begins with the construction of social insurance in the SSA of 1935. He argues, like Quadagno, that social insurance “sorted Americans by class, classifying their target populations by occupation and work status.” This class segmentation, he posits, also led to further sorting into racial categories, “in keeping with the prevailing racial norms of the 1930s and the institutional structure of American politics.” The result was a class-based and racially discriminatory welfare state by design.⁴⁰ He examines the design and administration of three separate policies under the SSA: old-age insurance (OAI), Aid to Dependent Children (ADC), and unemployment insurance. Each of these policies followed a different trajectory of statutory and administrative excision and inclusion.

Overall, Lieberman identifies two primary strategies opponents used to make Social Security less inclusive: limit federal oversight and regulation and shift implementation to the state and local levels.⁴¹ His primary evidence for this claim is, once again, the exclusion of agricultural and domestic workers from both the SSA and the NLRA. Lieberman asserts that exclusion based on job category was an effective strategy for limiting the OAI program and points to its exclusion of agricultural and domestic workers, which disproportionately impacted black workers, particularly in the South.⁴² However, for programs like ADC, where occupational categories were not the determining metric for public assistance, the result was quite different. Lieberman notes that “blacks were not systematically excluded as they were from social insurance benefits”; rather, it was the case that “blacks throughout the country were more likely than whites to be among [ADC’s] beneficiaries.” Importantly, Lieberman’s evidence indicates that African Americans disproportionately benefited from programs that were not means-tested around job categories. However, he goes on to argue that for programs like ADC, the “race-laden” administration still worked to limit the program’s impact on African Americans.⁴³

Lieberman’s evidence here seems to support the idea that programs that did not discriminate along class lines (either by means testing, directed exclusions, or program limitation) were ultimately more inclusive of African Americans. Where programs were “sorted by class,” they became narrower and more limited in ways that also, consequently, limited the welfare state along racial lines. Yet from this base of evidence, Lieberman’s conclusion that “race and class were mutually constitutive in the making and growth of the American welfare state” does not clearly align with his overall thesis that “race inhibited the development of a strong, unitary, centralized welfare state.”⁴⁴ Instead, Lieberman’s primary evidence introduces some causal confusion into his account. At many points, Lieberman inverts his original claim that beneficiaries were sorted by occupation and class and posits instead that the primary point of sorting and excluding was to divide the population by race.

Lieberman’s discussion of the exclusion of agricultural and domestic workers from OAI is a clear example of this inversion. In trying to construct large, federally managed, and inclusive welfare programs like OAI, New Dealers faced opposition from Southern Democrats. The most pronounced debate over inclusivity, Lieberman reports, was over the “question of inclusion or exclusion of agricultural and domestic workers,” who were ultimately excluded from OAI.⁴⁵ While these were occupational exclusions, he points to occupational data from the 1930s in order to demonstrate that those exclusions had “a racially imbalanced effect, and this effect was national, touching the North as well as the South.”⁴⁶ Lieberman’s claim is more guarded than that of Quadagno and other scholars. However, by foregrounding the racial implications of an exclusion based on occupation, he begins to invert the race-class ordering and the logic he claims to follow. He points toward the racially stratified consequences of this exclusion as evidence of racial motivations of the legislation’s architects and, perhaps more importantly, its opponents. While Lieberman acknowledges that those opponents, Southern members of Congress, were not “monolithically conservative,” he nevertheless contends that their racial preferences were the primary driver behind a racially circumscribed welfare state.⁴⁷

Michael Brown poses a direct challenge to Lieberman’s characterization of Southern lawmakers. While many of the most powerful Southern Democrats, like Senators Howard W. Smith and Harry F. Byrd, showed considerable support for the relief programs that would benefit the struggling Southern economy (the same programs that initially disproportionately benefited African Americans), these programs are noticeably absent from Lieberman’s account. Brown shows that Southern support for the New Deal’s early relief efforts began to wane when national efforts became focused on social insurance, which Southern lawmakers feared would increase taxes and remove local programmatic control by instituting nationalized benefits standards.⁴⁸ Alston and Ferrie provide further support for Brown’s critique of Lieberman, documenting the shift among Southern members who supported early relief measures and later opposed the expansive, federally managed programs in the SSA they believed would threatened their “paternalistic system of southern labor relations,” which was defined by low labor and supervision costs.⁴⁹ Brown also argues that Lieberman overstates the stranglehold that the South had over Roosevelt, instead suggesting that Roosevelt held leverage but chose not to use it because of his preference for fiscally circumscribed policies and regressive taxation.⁵⁰ Ultimately, Brown doesn’t contend that race and racism were irrelevant factors in the development of the American welfare state, but he cautions that the assumption that “racial exclusion” was the “sole problem confronting African-American families risks oversimplifying the problem.”⁵¹

Like Quadagno, Brown also situates himself in the debates over 1990s welfare reform. “Had we created a more capacious and comprehensive welfare state,” Brown argues, “there would have been more racial equality within the welfare state, and racial hostilities would be less likely to serve as a channel for conflict over social policy.”⁵² In order to understand the racial dynamics undergirding the ’90s welfare debate, Brown claims, it is necessary to understand the initial construction of a less “capacious and comprehensive” US welfare policy during the New Deal era. He characterizes this as a poorly funded set of fragmented welfare programs that relied heavily on means-tested programs, private health insurance, and a “historically weak commitment to full employment.”⁵³ In short, racial stratification was an important effect of New Deal welfare provision but not its only limitation. While there were some exceptions, and some programs provided more universal and comprehensive benefits across the population, Brown argues that the “pattern of social provision” that emerged from the New Deal was a version of “truncated universalism.”⁵⁴ He identifies two primary fetters on welfare state development: race and money. Despite building a political coalition around the promise of New Deal universalism, where class identity “overwhelmed ethnic and racial status,” the welfare state “concealed a racial bifurcation” in its new policies and programs.⁵⁵

Brown’s analysis begins in 1933, in the earliest phase of New Deal policymaking, a period that Quadagno and Lieberman both pass over, which was characterized primarily by massive relief payments aimed at lessening the extreme consequences wrought by the Great Depression. These relief payments targeted those most impacted by the economic downturn, which meant they disproportionately benefited African Americans, who were overrepresented in the lowest rungs of the economy. During the second major wave of New Deal policy development, which included the SSA of 1935 (the origin of many welfare state programs), Brown’s evidence shows that while many African Americans were excluded from old-age and unemployment insurance through “statutory occupational exclusions,” they were, once again, disproportionate beneficiaries of some means-tested programs.⁵⁶ However, he also demonstrates that despite being major beneficiaries of these early programs, African Americans’ overrepresentation in relief and means-tested programs produced a negative backlash and stigmatization of black Americans as overly reliant on the welfare system. For example, when he compares the transfer processes for individuals receiving different forms of government assistance, he finds that while African Americans were disproportionate beneficiaries of relief, they were transferred from relief programs to other benefits programs, like those within the Works Progress Administration, at much lower rates than their white counterparts.⁵⁷ Here Brown provides a clear basis to connect 1930s welfare development to the political realities of the 1990s. Yet as Brown’s careful and thorough documentation of the effects of social policy was taken up by Ira Katznelson, as the next section will show, key arguments and evidence were mischaracterized, and important distinctions between the accounts of Brown, Lieberman, and Quadagno were lost.

Ira Katznelson’s When Affirmative Action Was White, published in 2005, has become one of the most popular interventions and commonly cited books in these debates. Its primary goals are to examine the ties between social and racial policy and to underscore the influence of Southern Democrats — “guardians of racial segregation” — on Roosevelt and Harry S. Truman.⁵⁸ Katznelson admits that his use of “untold” is polemical, particularly since he sought to draw together various strands of existing scholarship that, in his opinion, had “not been brought together sufficiently.”⁵⁹ His conclusion, as suggested by his provocative title, is that the New Deal was profoundly influential in building the American middle class, but that those public policies were “crafted and administered in a deeply discriminatory manner,” leaving African Americans out of the nation’s first affirmative action programs.⁶⁰ In contrast to the works of Brown and Quadagno, neither the preface nor the introductory chapter of When Affirmative Action Was White provide any sort of link to Clinton-era welfare debates. The political stakes Katznelson underscores is the failure to live up to the goals Lyndon B. Johnson elaborated in his June 1965 address, “To Fulfill These Rights,” a challenge that, according to Katznelson, grew out of the New Deal period and persists to this day.⁶¹

This shift in political target is significant, as Katznelson does not directly intervene in the same scholarly debates over welfare state development that Brown and Quadagno engage. And while he follows much of the logic and impetus of Lieberman’s focus on racial intent, Katznelson is also less focused on program administration and the broader structural impact of the welfare state. He is instead more attentive to the legislative origins of social policies and programs, placing particular emphasis on identifying the actors who actually pulled the strings of exclusion. He claims that, while they never admitted it, Roosevelt and Truman’s efforts to create universal programs were cut off at the knees by the Southern Democrats’ stranglehold on Congress and national politics. However, where Quadagno, Lieberman, and Brown were more cautious about assigning blatantly racist motivations as the key or sole factor driving policy design and implementation, Katznelson claims that the SSA, NLRA, and GI Bill were explicitly “crafted in a discriminatory manner,” constituting the core of America’s first affirmative action project: building the white middle class. Following Quadagno and Lieberman’s cues, Katznelson also fixes the blame on Southern Democrats in Congress, who were allowed to “dictate the contours of Social Security” by insisting that these laws be “tailored to meet their preferences, most notably their desire to protect Jim Crow.”⁶² However, despite these bold and provocative claims, Katznelson lacks clear and concrete evidence of racist intent driving Southern opposition to labor regulations, instead providing interpretations of congressional debates that point toward a different set of goals.

Katznelson foregrounds three core mechanisms in his account: the inclusion of race-laden provisions in New Deal policies, the failure to include antidiscrimination proposals, and the uneven administration of the resulting policies. He moves through the early, middle, and late New Deal periods, drawing together the work of other scholars and adding some novel analysis. For example, his discussions of the early New Deal reconstruct Brown’s assessment of relief distribution (under the Federal Emergency Relief Act, or FERA) and his consideration of the middle period draw heavily on Lieberman’s commentary on the SSA provision. Katznelson’s own analysis, in this book and in other work published in the same period, focuses on labor policy, primarily the 1935 NLRA and the 1938 Fair Labor Standards Act (FLSA).

Strikingly, in several places, Katznelson uses Brown’s evidence to construct completely contradictory conclusions. For example, Katznelson does not acknowledge that FERA beneficiaries were disproportionately African American, a crucial empirical and analytical point for Brown. Brown argues that FERA was “potentially the foundation for a centralized welfare state” and provoked consistent tension and conflict between Harry Hopkins, the federal administrator, and state administrators, whose relations were “frayed and hostile.” Brown acknowledges that there were limits to efforts to maintain federal standards: Hopkins and his chief deputy “had to tailor their relief policies to accommodate the demands of southern plantation owners for cheap farm labor by curtailing relief payments to agricultural laborers and sharecroppers.” However, Brown claims that this was the exception to an overall “radically centralized” program that was best characterized by sharp conflict between federal and Southern administrators in providing relief payments that disproportionately went to black Americans.⁶³

Katznelson quotes this exact passage from Brown in his own discussion of FERA, arguing that “neither the size of benefits nor the pattern of [FERA] distribution was standardized” and painting Hopkins and his deputy’s tailoring to Southern plantation owners as the rule, not the exception.⁶⁴ Katznelson omits Brown’s point that the program was “radically centralized,” instead framing FERA as being, on the whole, decentralized and shaped to Southern demands. While he draws on Brown’s evidence, Katznelson does not acknowledge the difference in their conclusions.

Beyond this, the new evidence Katznelson supplies emphasizes disparate outcomes but without careful consideration of the political economic context. For example, Katznelson argues that local discretion allowed for lower relief rates for black people as opposed to white people in ten Southern states, including some counties in the state of Georgia that excluded black Americans altogether from their relief rolls. In addition, he draws heavily on Gunnar Myrdal’s An American Dilemma as well as Richard Sterner’s The Negro’s Share. (Sterner was a lesser-known Swedish researcher who was part of Myrdal’s research team.) Katznelson relies on Myrdal and Sterner’s evidence to paint a picture of racial differences and “unequal patterns.” Katznelson’s use of the Swedish researchers points to what Adolph Reed Jr and others argue has become a standard trope in race relations research starting in the mid-twentieth century. Myrdal and his Swedish research team are frequently cited in this body of research, which also emerged during the Clinton era, that emphasizes disparate impacts and outcomes while eclipsing consideration of broader structural and economic forces. Reed has emphasized that these studies are characterized by a “naïve, often evasive pursuit of a notion of scientific objectivity that eschews political discussion of the sources of inequality.”⁶⁵

Katznelson is more faithful to Lieberman’s evidence and argument in his characterization of the second wave of New Deal policymaking, particularly on the creation and implementation of the SSA. He posits that the social welfare policies included in the SSA were overall less generous to African Americans, since social insurance programs distributed benefits based on income level and African Americans were in the bottom rungs of employment. Second, he also nods to the exclusion of agricultural and domestic workers in place until 1954, when Republicans gained control of Congress and eliminated the exclusion. Katznelson’s argument here is somewhat perplexing: he asserts that it was increasingly conservative Republican control of Congress that finally loosened the Southern Democrats’ stranglehold control over the lawmaking process.⁶⁶ Are we to understand, then, that it was Republican lawmakers who came to the aid of the disproportionately black agricultural and domestic workforce? This conclusion seems out of step with the political inclinations of Katznelson’s work and particularly discordant with the well-documented partisan realignment that took place in these decades, which ultimately led conservative Southern Democrats to merge with Republicans.

Along those lines, Katznelson’s most significant empirical contributions in the book can be found in his discussion of New Deal labor policy, which has been less thoroughly examined than the welfare state provisions but is deeply connected to them. Here Katznelson again argues that Southern Democrats “traded votes” of support for New Deal labor legislation in exchange for the exclusion of agricultural and domestic workers.⁶⁷ These groups of workers were included in Senator Robert Wagner’s original draft legislation, but in another version of the bill put forward by six senators, three of whom were Southern Democrats, agricultural and domestic workers were explicitly omitted from the bill’s definition of “employee.” That these exclusions were intentional and deliberate is clear. However, Katznelson fails to present compelling evidence that the primary intention was racial exclusion. On the contrary, he acknowledges that “there was no debate on the Senate floor that explains the motives or purposes behind the exemptions.”⁶⁸

While it is true that the racial motives of policymakers are not made plain in these debates, my research identifies two other motivating factors. The agricultural industry, which had significant interest and impact on the debates over the 1933 National Industrial Recovery Act (NIRA) and the 1933 Agricultural Adjustment Act (AAA), argued that these two frameworks would result in double oversight for the agricultural industry, making it needlessly subject to two sets of regulations. To avoid this issue of “dual administration,” they argued that they should be subject only to regulation under the AAA. Southern and Northern lawmakers’ acceptance of this argument meant that the agricultural industry was able to evade federal labor regulations, which were part of the NIRA framework but not the AAA one (a fact that members of the agricultural industry explicitly acknowledged in their congressional testimony).⁶⁹ In sum, there is evidence as to the motivations and interests of those who sought to exclude their sector from being subject to labor regulations; however, that motivation was not primarily racial exclusion in these early debates.

Katznelson makes a more concerted effort to document the racial motivations in debates over the second wave of New Deal labor policy but fails to present clear evidence for his claims. He argues that votes on labor legislation had become a vehicle to protect Southern racism and that opposition to labor bills was rooted in a narrowly construed fear that stronger unions would increase civil rights protest. Rather than acknowledging the fact that stronger unions might transform the economic system and power structures more broadly, he concludes that, for Southern Democrats, “labor had become race.”⁷⁰ He expands these arguments in a 2005 article published with Sean Farhang in Studies in American Political Development that examines the shifting positions of Southern Democrats on labor proposals over three distinct periods of New Deal policymaking. In the piece, Farhang and Katznelson provide a clearer description of the process through which “labor had become race,” yet their evidence fails to provide a compelling foundation for that claim. First, they argue that the only reason Southern Democrats signed on to prewar labor legislation like the NLRA was because it included carve-outs for agricultural and domestic workers.⁷¹ But beyond the fact that those occupational groups were excluded, the authors include very little evidence that this was in fact the bargain.

Furthermore, their account of the exclusion of those occupational groups indicates that Southern lawmakers, serving as champions for the agricultural industry, primarily sought to keep any and all labor regulations out of agricultural production.⁷² They do not link this objective in a direct or indirect way to racism or racial motivations, beyond the fact that the agricultural sector included many black workers. Considering the earlier resistance to federal labor regulations in the NIRA and AAA, the more plausible conclusion from these debates is that the agricultural industry had a vested interest in curtailing labor organizing in the South (as well as in other parts of the country) and that Southern lawmakers readily acted upon this concern.

Farhang and Katznelson point to more explicit discussion of the racial motivations of members of Congress when they move into a discussion of the FLSA, which they argue was a pivotal moment when the Democratic coalition in Congress fractured. They claim that similar exclusions in the FLSA were intended to avoid setting a “floor on wages,” which would have required employers to increase wages in the lowest-paid industries and address the “wide wage disparities between African American and white wage workers.”⁷³ This suggests, and their evidence supports, that there was rhetoric around the wage differentials between white and black workers deployed in conservative and Southern Democrats’ assault on the FLSA. However, Farhang and Katznelson do not draw a clear connection between those debates and the overall “fear of civil rights organizing” they claim drove opposition to the FLSA. On the contrary, the passages they reference reveal an enduring interest in reducing, avoiding, and eliminating federal labor standards. This evidence indicates a more compelling and coherent explanation: Southern opposition grew as federal standards and regulation expanded, a conclusion that is clearly supported by Brown, Alston, and Ferrie. Employers’ desire for greater regional and local control over their labor markets was no doubt in part fueled by an interest in maintaining racial wage differentials in addition to a whole host of factors allowing employers and industry to depress wages and control workers. The fact that this hostility toward labor standards continued to grow over the next decade, which the authors clearly document, even as lawmakers removed Social Security exclusions for agricultural and domestic workers in the 1950s, seems to suggest that Southern lawmakers’ preferences and resistance to federal intervention had once again shifted target.

In sum, departing from a genre of welfare state development literature aimed at uncovering the limits of the New Deal’s brand of universalism, Katznelson’s When Affirmative Action Was White popularized a version of New Deal political development that skirted critical consideration of the political economic context. It offered a more reductive account of the motivations of federal and regional policymakers and administrators in order to illustrate that racial segregation and discrimination not only remained intact after various waves of New Deal policymaking but also were the primary motivator for the architects of those laws. In 2013, Katznelson published the follow-up Fear Itself: The New Deal and the Origins of Our Time. Drawing on the same arguments and evidence from his previous work, he introduces the provocative and pithy idea that Southern Democrats formed a “Southern cage” that allowed them to restrict policymaking in the interest of maintaining the South’s racial system. Despite the popularity of When Affirmative Action Was White, Katznelson also claims that this fear of and deference to the Southern racial structure continues to be “the most overlooked theme in almost all previous histories of the New Deal.”⁷⁴ However, as Dylan Riley notes in his review of Fear Itself, Katznelson again fails to provide compelling evidence that it was racial preference that drove increasing opposition to the New Deal in the South. Riley counters that labor control, which served to maintain control over black workers, is a more historically grounded explanation for Southern lawmakers’ behavior.⁷⁵

Despite these empirical and analytical issues, Katznelson’s account, which builds upon and reinterprets more careful conclusions put forward by Lieberman, Brown, and Quadagno, has become the most popular rendering of the racial legacy of New Deal programs. Returning to the example of Representative Ocasio-Cortez and Briahna Joy Gray, the links between their arguments and Katznelson’s analysis are abundantly clear, particularly in the focus on the ascendance of the middle class and the emphasis on racial intent and racism undergirding New Deal programs. The growth of these ideas has ultimately served to obscure the New Deal’s legacy and limit our understanding of the development of one of the most important episodes in American political development. By pinning the curtailment of social welfare provision and labor law development on the racial motivations of Southern Democrats, Katznelson’s analysis offers rhetorical support to the characterization that the New Deal was racist. This line of argument rests on relatively weak empirical grounds, making its theoretical claims suspect.

This essay is not an invitation for progressives to uncritically celebrate the New Deal state and overlook its significant limitations. Rather, it is an invitation to be concrete and specific in the conclusions we draw regarding its limitations and clear about how they inform progressive politics. One way to do this is to recognize that, while many of the programs comprising the New Deal welfare state adhered to and re-created racist social demarcations, where the New Deal succeeded in constructing broader, more universal programs, those programs disproportionately benefited African Americans. The exchange between Gray and Ocasio-Cortez makes clear that the emphasis on racial motivation has seeped into contemporary discourse in ways that ultimately pose a challenge to efforts to build broad support for a more robust welfare state, conflating uneven effects with a racist or otherwise discriminatory intention. Such claims lead to confusing attempts to appeal to the broad popularity of the New Deal while at the same time condemning the program’s inherent racism. And, more critically, these claims do nothing to further the goals of those attempting to make a more generous social welfare state, instead suggesting a certain futility in efforts to build a more robust set of social democratic institutions geared toward advancing the common good — an argument the Right has eagerly (and easily) capitalized on.

In July 1977, Milton Friedman went to Israel. He was invited by Hebrew University professor Don Patinkin to receive an honorary degree and give a seminar. The government welcomed Friedman and asked him to stay longer so he could participate in some informal consultations. As the deputy finance minister explained to the American ambassador, Friedman was chosen “to invest the Likud’s idea for liberalizing Israel’s economy with the prestige of Friedman’s name.” Friedman, who knew how to work with the media, used his visit to give several interviews to Israeli newspapers. He capitalized on his renown as a leading economist to sell to the Israeli public the economic agenda of the new Likud government, which included privatization and free-market reforms.

As it turned out, while Likud ministers were willing to meet with Friedman during his brief visit, they did not consult him about their plans, and Friedman had no influence on the decisions they made. Friedman well understood that the Israeli government had no intention of listening to his advice. Nevertheless, he believed “that I can be most useful simply by providing some respectability and prestige to [the Israeli government’s] economic program.” However, only a few years after that fateful visit, Friedman made efforts to distance himself from the Likud economic program. And it’s easy to understand why. Its economic policy was a hot mess during its first years in power.

The Likud inherited an economy in a state of crisis. In 1973, Israel’s economy was hit by a double whammy. It suffered from both the high costs of the Yom Kippur War and the concomitant rise of oil prices (Israel’s fuel costs rose by 277 percent during 1974). Inflation was 36 percent per year. The Yitzhak Rabin government (in power between 1974 and 1977) responded by raising taxes to deal with rising budget and balance-of-payment deficits. The Israeli pound was devalued numerous times to decrease imports and increase the competitiveness of Israeli exports. The results were troubling. GDP growth fell from 11.9 percent in 1972 to -0.3 percent in 1976 — i.e., the economy was contracting. With the economy in such dire straits, it’s no wonder that Labor lost badly to the Likud in the 1977 elections.

The Likud’s first major economic decision was to turn toward austerity. Simha Erlich, the first of four Likud finance ministers over the next seven years, announced a $143 million budget cut (approximately 1 percent of the 1976 GDP) in July 1977, a 25 percent cut in food and fuel subsidies, and a 2 percent devaluation of the Israeli pound. This announcement was made on the eve of a meeting between Prime Minister Menachem Begin and President Jimmy Carter. At the time, Israel was highly dependent on US economic aid. American capital transfers helped cover Israel’s large balance-of-payment deficit. Specifically, Begin was about to ask Carter for a whopping $2.3 billion in aid, a 30.5 percent increase from the previous year’s request. Ahead of the meeting, the Carter administration signaled to the Begin government that Israel must put its house in order or face the prospect that US aid would be cut. Erlich’s press conference, which announced austerity measures, was a response to that pressure.

Next came the economic revolution of October 1977. Planned in utmost secrecy by only five officials at the Treasury and reported to US Treasury secretary Michael Blumenthal only two days in advance, the main item in the package that the cabinet discussed on October 28 was making the Israeli pound fully convertible for the first time since 1939 (the British Mandate for Palestine had adopted currency control during World War II). The International Monetary Fund (IMF) was aware of this plan and was applying pressure on the Israeli Treasury to adopt it. The IMF had leverage because Israel was dependent on its loans as well. In addition, the ministers were requested to approve the abolition of various measures that protected Israeli industry from import competition. Prime Minister Begin urged them to approve the package to “increase economic freedom.” The cabinet was swayed by Begin’s presentation and voted for the plan. As always, Milton Friedman was not in the loop. But when he heard about the measures adopted by Begin’s cabinet, he was elated and said, “This is one of the greatest things that has happened to Israel since it was founded.”⁴

The experiment in shock therapy ended in shock with no therapy. Inflation rose to 167 percent by 1979. Foreign debt ballooned, and the trade deficit increased. The government’s privatization targets were not met. By that year, the second oil shock — a result of the revolution in Iran — had kicked in, and Israel was ill-prepared to deal with it. Erlich resigned in ignominy in November 1979.⁵ In his stead came Yigal Horowitz, who tried to deal with the predicament by reverting to austerity. As the outgoing minister of trade and industry, Horowitz was fairly knowledgeable in economic affairs. However, he hailed from a small splinter party that was allied with Likud and lacked a power base. When his demand for budget cuts was not backed by the cabinet, Horowitz resigned in January 1981.

Erlich’s replacement was the wily Yoram Aridor, an ambitious party apparatchik who rose within the ranks of the Likud. His policies were more about politics than economics. Ahead of the 1981 elections, Aridor sharply reduced tariffs on electronics, home appliances, and cars. Drunk on Sony TV sets and cheap Subaru cars, the Israeli electorate thanked the Likud by giving it a narrow victory at the ballot box. After the elections, Aridor wanted to revert to austerity and peg the Israeli shekel to the dollar. When details of Aridor’s dollarization plan were leaked to the press, they were met with general condemnation. As a result, Aridor resigned in October 1983. The next finance minister, Yigal Cohen-Orgad, presided over out-of-control inflation that reached 445 percent in 1984. He didn’t have time to devise a comprehensive plan to deal with the crisis, as he served in office only eleven months.

Despite this messy history, Begin and his ministers had numerous successes that would help advance the neoliberal turn. Their first achievement was to weaken organized labor. This was a formidable challenge. The Histadrut — Israel’s largest labor federation — was an organization like no other. It was established pre-independence, when the British ruled Palestine, and was built to serve as the bureaucratic infrastructure for a state. It not only unionized laborers; it also owned and managed social services such as labor exchanges, health clinics, hospitals, schools, and pension funds. It retained most of these functions post-independence. When the Likud came to power, the Histadrut had unionized 1.5 million workers, or 80 percent of the workforce. The Histadrut was also Israel’s second-largest employer. It owned several factories and controlled 25 percent of the country’s economy. Furthermore, the Histadrut’s elected leadership was dominated by Labor, which was now the main opposition party.

If that was not enough, the Likud was not of one mind regarding the fate of organized labor. The Likud was an amalgam of two main parties: Herut (“freedom” in Hebrew) and the Liberal Party. The Liberals represented medium- and large-business owners in the private sector and, as such, had a great interest in breaking the power of the Histadrut. Herut, however, was a nationalist party that had always used populist rhetoric and waxed lyrical about the need to ensure the welfare of the people. Moreover, the Likud had significant representation in the Histadrut, and some of its leaders were elected Histadrut officials. Thus, the Likud was torn between its two wings — the bourgeoisie and the plebeian.

Nevertheless, Yigal Horowitz, who served for only a year as finance minister, was able to achieve a significant breakthrough. Horowitz was a wealthy businessman who owned a large private dairy. As such, he competed with the much larger Histadrut-owned dairy, Tnuva. This experience taught him the secret of Histadrut companies. They were large and powerful because they had access to cheap loans, which they took from the Histadrut-owned pension funds. In October 1980, Horowitz passed legislation that put an end to that practice. Histadrut companies had to turn to private banks and take loans with steep interest. That was the beginning of the end for the worker companies. Finance ministers who served in the Likud government used other methods to weaken the Histadrut. They avoided consulting its leadership before making major decisions (a common practice before 1977), tried to avoid compensating workers for inflation-induced wage erosion, and encouraged employment through individual rather than collective labor contracts.⁶

While dismantling universal social programs, the Likud created compensation mechanisms that ameliorated the harsh effects of its market reforms. These, however, were accessible only to groups that were willing to support the Likud’s nationalist and religious vision. A prime example was the Likud policy regarding public housing. Construction of public housing within Israel decreased dramatically under the Likud, from 27,730 apartments in 1975 to 7,320 apartments in 1983. However, the Housing Ministry, led by David Levy, a former construction worker, focused all its resources on developing highly concentrated urban clusters in the West Bank (to this day, 85 percent of Israeli settlers live on less than 6 percent of the West Bank’s territory). All of them were an hour’s drive or less from Tel Aviv and Jerusalem. The Housing Ministry planned those townlets, built their infrastructure, paved roads that would connect them to Israel’s metropolitan regions, and gave lavish grants and loans to those who chose to live there. While outside the West Bank construction decreased and housing prices rose, inside the West Bank subsidized housing was booming. The success of those policies was phenomenal. In 1977, about ten thousand Israelis were living in the West Bank. By 1986, that number rose to fifty thousand. The link between the Likud, the West Bank, and cheap housing was thus established.⁷ This was a pivotal accomplishment that put the working class and the lower-middle class on the Likud’s dole and created a strong incentive for a broad constituency to vote for the party.

Meanwhile, Likud policies turned the ultra-Orthodox Jewish population into another dependent sector. Until 1977, the ultra-Orthodox relied on the welfare state. They could buy cheap housing. The women worked in the ultra-Orthodox education system. The men found employment by providing religious services that the non-Orthodox needed, working as rabbis, mohels, and kashruth supervisors. Likud policies changed all that as public housing dried up. Begin inaugurated measures that reshaped the ultra-Orthodox community and made it dependent on handouts. He removed the limits on the number of yeshiva students exempt from military service. He also committed, in his agreement with the party representing the ultra-Orthodox, to give ultra-Orthodox service members an allowance, although many in the community didn’t serve in the army. Child allowances to the ultra-Orthodox were also increased, while child allowances to the non-Orthodox were cut. As a result, between 1977 and 1999, the number of yeshiva students increased from 8,240 to 31,174, and by 2015 that number reached 64,605. In 1977, only 5 percent of the families in the ultra-Orthodox city of Bnei Brak had six kids or more. A decade later, the share of families with six kids reached 15 percent. During those years, the trend in the general population was the opposite.⁸

Begin’s foreign policy was the continuation of his domestic policy by other means. Following the oil shock of 1973, the Carter administration was eager to bring about a peace agreement that would settle the question of the Suez Canal — a key conduit for the energy trade between the Persian Gulf and Europe. The canal was opened to international shipping in 1975 thanks to a Washington-mediated cease-fire agreement with Israel. However, another Egyptian-Israeli confrontation could bring about a closure of the Suez Canal and, as a result, another rise in the price of gasoline, something that could anger American voters. Begin responded to that pressure by starting secret talks with Egyptian president Anwar Sadat. Begin, usually an avid supporter of the “Greater Land of Israel,” was willing to give back the Sinai Peninsula in its entirety under the proviso that Sadat would relinquish his demand for a Palestinian state in the West Bank and the Gaza Strip. Begin thus made a significant territorial concession to protect the strategically desirable territory of the West Bank. The 1979 peace agreement between Israel and Egypt was fashioned accordingly.

When Ronald Reagan entered the White House in January 1981, Begin could breathe a sigh of relief. The elderly president held staunchly pro-Israel views and deemed the Jewish state an essential ally in the global battle against the “evil empire.” After his reelection in the 1981, Begin was emboldened and took a tougher line in his foreign policy. The Palestinian Liberation Organization (PLO) was in his sights. The PLO had military forces in Lebanon and could thus oppose Israel’s settlement drive in the West Bank by lobbing Katyusha rockets at settlements in the Galilee. In June 1982, Israel commenced Operation Peace for Galilee. Lasting several months and bringing much destruction to the Lebanese civilian population, the operation was successful in pushing the PLO out of Lebanon. For Begin, crushing the PLO was key to continuing the settlement drive in the West Bank that his government unleashed. The PLO’s exile to Tunis, far away from the zones of conflict in Gaza and the West Bank, prevented it from engaging in an effective armed struggle against the expansion of Israeli settlements.

After pushing the PLO out of Lebanon, Israel planned to put in place a friendly government and withdraw. But things did not go according to plan. Instead, the Israeli Defense Forces (IDF) sunk into a quagmire of low-intensity warfare. The high costs of financing the war exacerbated Israel’s economic crisis. Begin grew increasingly despondent and resigned in October 1983. A caretaker government was able to survive for a few additional months. Finally, elections were called and took place in the summer of 1984.

These elections resulted in a hung parliament. The solution that Shimon Peres, who led Labor, and Yitzchak Shamir, the leader of the Likud, found was to form a grand coalition — known as the “unity government” — in which both parties participated. It enjoyed an overwhelming majority in parliament. And it was another milestone on Israel’s road to neoliberalism. Israeli Labor’s historic achievement was the creation of the welfare state and its attending institutions. Now back in the halls of government for the first time since 1977, Labor could work to resuscitate the welfare state after the Likud had attempted to destroy it. Instead, Labor did the opposite. It adopted neoliberalism and pushed it further still.

Shimon Peres, who served as prime minister between 1984 and 1986, began his tenure by appealing to US secretary of state George Shultz. Peres asked for an urgent aid package totaling $4 billion to help Israel deal with its economic crisis. Shultz, a renowned economist and a former secretary of the Treasury, replied that the United States could respond to that request only after Israel adopted much-needed economic reforms. As a result, Shultz and Peres agreed on the creation of a US-Israeli team of economists that would work on a plan to stabilize Israel’s troubled economy.

As his representatives in the joint team, Shultz appointed two strong supporters of Milton Friedman’s economic theories: Herbert Stein and Stanley Fischer. Shultz instructed Fischer and Stein to make clear to the Israelis that the fate of the additional aid package was conditioned upon accepting their recommendations. Whenever the negotiation got into trouble, recalled Fischer, he would simply tell his Israeli interlocutor, “The secretary believes that . . . ” It would work much better, mused Fischer, than explanations about economic models.⁹

For his part, Peres appointed Israeli economics professors, such as Michael Bruno, who were formerly Keynesians but turned into ardent monetarists during the late 1970s and early 1980s. Increasingly, they were becoming convinced that Israel’s economic crisis was caused by a welfare state that was too generous and trade unions that were too powerful. These were luxuries, they wrote, that Israel could no longer afford.¹⁰

The economic plan that the joint team of Israeli and American economists helped shape was discussed by the unity government on June 30, 1985. That meeting was one of the most dramatic in Israel’s history. It continued into the night and ended only in the morning hours of the next day. Peres, presiding over the meeting as prime minister, presented the plan as a bitter medicine Israel had to swallow to cure its economic illness. A loud minority opposed him, but Peres finally wore them down. The cabinet’s resolution to adopt the plan on July 1 made headlines in the Israeli press. At first, everyone was taken aback by the harshness of the measures the unity government endorsed.

The resolution included a 19 percent devaluation of the shekel, a $1.5 billion budget cut, the dismissal of 3 percent of government workers (about 10,000), and a three-month price and wage freeze. Tough as they were, these were not the most important components of the plan. In fact, the layoffs and the budget cuts were quite reversible. What turned the 1985 stabilization plan, as it became known, into a milestone were the accompanying laws. These shifted decision-making in economic affairs from politicians to technocrats, who were for the most part economists. This, one should add, was a world trend. It’s hard to believe nowadays, but until the late 1970s, the influence of economists on the government’s policy was quite limited. They could advise, but the decisions were made by the politicians. This was about to change dramatically. The Israeli and American economists who were part of the Shultz-Peres team joined hands to present the new laws as an absolute necessity, although many years later they would admit they were dissembling.

Under the pressure of Stein and Fischer, who believed, like Milton Friedman, that the money supply was the only thing that mattered in an economy, a law enshrining the independence of the Bank of Israel was inserted into the plan. Until that point, the governor of the bank was wholly subservient to the whims of the politicians. The bank would loan the government as much as 3 percent of the GDP, a procedure known in Israeli parlance as “printing money.” Hence the Bank of Israel law received the nickname the “nonprinting law.” From that point onward, the governor would make the highly political decision over interest rates alone. The government of the day could ask but not order. The law thus put a strict limit on the government’s ability to increase its debt and spend money.

Two other laws were passed as emergency legislation but given permanent status in the following years. Just like the Bank of Israel law, the “Foundation of the Budget” law and the Arrangement Law entrenched the agency of technocrats. These laws have turned the economists at the Finance Ministry into economic dictators. The Foundation of the Budget Law allowed them to control the budgets of the ministries as well as each budgeted agency, such as municipal councils. Not a nickel could be spent without approval from the Treasury boys. In addition, the Arrangement Law enabled the Finance Ministry economists to accompany each budget with a lengthy omnibus bill that included economic reforms they deemed necessary. They usually wrote it in such dense gobbledygook that neither ministers nor members of parliament could follow. Often it would be submitted at the last minute, leaving politicians very little time to read or digest what they were voting for.¹¹ One journalist called the law “anti-democratic.”

These laws explain the consistency of Israel’s neoliberal project. Governments came and went with surprising speed since 1985, but the technocrats, who served longer than ministers and enjoyed immense power, were able to promote their economic agenda regardless. In 1985, government spending in Israel was 65 percent of GDP. Three decades later, government spending was one of the lowest in the OECD, at less than 40 percent. This was a testament to the ability of economic technocrats to make a series of incremental changes to budgets and laws that seemed arcane to the wider public but had real-world consequences.¹²

Another potential obstacle to the stabilization plan was organized labor. The government’s unilateral decisions about layoffs and wage freezes should have angered the Histadrut. But at that stage, it was hobbled by the high debt of its economic enterprises, especially the worker companies and the sick fund, and the steep interest rates it had to pay. The Histadrut was willing to play along with the stabilization plan in return for a promise that Labor ministers would arrange bailouts for its ailing companies.¹³

The stabilization plan marks the moment when neoliberal ideology became hegemonic. This was no longer a right-wing project. With the enthusiastic participation of Labor, neoliberalism became a bipartisan policy. The question is why. What were the interests of Labor in promoting this scheme? American pressure certainly played a role, but what stands out is how little Peres resisted US demands — surely he could have pushed back, leaning on the resistance within his own cabinet.

Perhaps Peres understood that there was simply no other way to deal with inflation. Yet the Keynesian and pro-industrial economist Esther Alexander, who advised both the Energy and the Economic Affairs ministries, believed that claim was bogus. In her reading, inflation was reduced significantly thanks to two corporatist package deals signed between the Finance Ministry, the Histadrut, and the private sector in November 1984 and January 1985. Inflation came back roaring in February 1985 only when the officials at the Finance Ministry broke their promises by unilaterally cutting food subsidies and ending price controls.¹⁴

The most plausible explanation is that Labor’s eager adoption of the program was a response to its institutional aspects. By 1985, the educated middle class understood that the upheaval of 1977 was no aberration but rather a sign of a demographic and sociological shift in Israeli society. The growing numbers of settlers and ultra-Orthodox, as well as the working class’s alignment with the Likud, gave the Likud party a permanent majority. The 1984 elections were seen as solid proof of this. The Likud entered the election in the worst circumstances possible. The fiery orator Begin was gone. Leading the party was the dull Yitzhak Shamir. The economy was in the doldrums. The war in Lebanon was dragging on. Peres, who had lost to the Likud in the two previous election cycles, was certain that this time he would emerge the victor. Surprisingly, though, the social alliances that Begin forged in the previous years withstood the electoral test. The Likud lost seven seats in parliament but was not defeated. Peres found that Labor, and the parties willing to serve in a coalition led by it, could not win a majority in parliament.

Rather than changing his party’s platform in a way that would help Labor win new voters, Peres preferred to give power to unelected bureaucrats who hailed from the ranks of the educated bourgeoisie. Peres had a natural affinity for this idea, as he himself rose to the top as a technocrat who served in the Ministry of Defense in various roles between 1953 and 1965. Moreover, according to contemporary opinion polls, that stratum supported the Labor Party. In the words of one scholar of this period, “the knowledge elite” was Peres’s “only ally at the time.” And indeed, experts, scientists, and analysts from the halls of government and academia were frequently called upon by Peres to give advice, vet policies, and write memos. This led to a detachment of Peres from the party apparatus, so much so that one party activist complained that the team surrounding him was “too professional” and that the prime minister was listening too often to “what the professors say.” Thus, Peres forged a “knowledge-power alliance.”¹⁵

Peres and Labor leadership seem to have realized that the neoliberal project played to the advantage of the classes that supported the party. As a result of the reforms that Peres supported, the authority to make political decisions shifted. It was now given to impersonal market forces and faceless bureaucrats. The Likud could continue to win at the ballot box, but real decision-making would now be in the hands of the technocrats at the Bank of Israel, the Finance Ministry, and private companies.¹⁶

Meanwhile, the settlement drive in the West Bank found a new reservoir of manpower. By the late 1980s, the ultra-Orthodox were experiencing a severe housing crisis. The privatization of housing meant that home prices were going up, far beyond the ultra-Orthodox’s means. Many of the men did not work and relied on the allowances created by the first Likud government. What they wanted most of all was to live in proximity to Jerusalem and its holy sites. David Levy, who was still serving as housing minister, wanted to expand his project of building settlements that were essentially suburbs. This is how the ultra-Orthodox settlements of Beitar Illit (established in 1988) and Modiin Illit (1991) came about. The housing ministry also took care to build vast roads that bypassed Palestinian towns and ensured denizens of ultra-Orthodox settlements easy access to Jerusalem.

Up to that point, the ultra-Orthodox supported Likud due to sheer economic necessity, not for love of the Greater Land of Israel. The new settlements changed all that. The interests of the settlers and the ultra-Orthodox began to align as the new settlements solved the latter’s housing crisis. Increasingly, the ultra-Orthodox leadership adopted the territorial ambition of the Likud, as a rising share of its voters built their homes in the West Bank. By 2013, 13 percent of the ultra-Orthodox were living there. The fact that the ultra-Orthodox joined Likud’s ranks was also important for the settlers. When the first ultra-Orthodox settlements were established, the settlement drive in the West Bank was losing demographic momentum. The ultra-Orthodox settlements reversed this. An average ultra-Orthodox family has seven children or more, and, as a result, the population of each of these settlements established in the late 1980s grew by 10 to 12 percent per year. As of 2022, 146,000 people lived in the three largest ultra-Orthodox settlements, which constituted a third of the settlers’ population in the West Bank.¹⁷

By the late 1980s, Israel had made the changes in its economy that would allow it to become a part of the American-led project of post–Cold War globalization. Israel balanced its budget and stabilized its currency. Privatization of Histadrut industries and some public-sector companies created profitable opportunities for private investors. However, the onset of the first wave of the Palestinian uprising, the Intifada, which started in 1987, proved to be a drag on the economy and a hindrance to foreign direct investment. One of the chief benefits of the occupation to the Israeli economy — the supply of cheap Palestinian labor — was gone, as Palestinian workers were not allowed to enter Israel during the Intifada years.

The Israeli bourgeoisie realized it was time to act and flocked to support Yitzhak Rabin, who now led the Labor Party. The election cycle of 1992, which the Labor Party won, was the first in many years where the future of the occupied territories was explicitly discussed. Dov Lautman, a textile magnate and a former head of the Manufacturers’ Association, proclaimed one week ahead of the elections that only progress in the peace talks with Palestinians could make Israel attractive to foreign investors. And it was true. The Oslo peace process that the Labor government promoted served as Israel’s North American Free Trade Agreement (NAFTA). By 1993, the peace process helped to end the Intifada and enabled Israel’s integration into the world economy. The Oslo Accords bettered Israel’s relations with Jordan and Egypt and, same as NAFTA for US businesses, allowed Israeli businessmen to take advantage of the cheap labor in neighboring countries by moving labor-intensive production lines there. Furthermore, foreign direct investment in the Israeli economy, virtually negligible until 1993, reached $1.5 to $2 billion a year by the middle of the decade. McDonald’s opened its first franchise in Israel the year the Oslo process began. The Labor government also liberalized financial inflows and outflows in 1992 and 1996, respectively.

The Oslo era was a huge boon for the Israeli bourgeoisie and private capital. Privatization continued apace in such variegated sectors as housing, transportation, natural resources, telecommunication, education, and shipbuilding. Tariffs were removed, and Israel’s exposure to global markets increased. The Rabin government also set its eyes on developing Israel’s high-tech industries. The budget of the Chief Scientist’s Office, which invested in nonmilitary research and development, was doubled. The government also created a state-owned venture capital fund called Yozma (meaning “initiative”) that invested in technological start-ups. The results were impressive: while high-tech products were only 14 percent of Israel’s export of manufactured goods in the 1970s and 28 percent in the late 1980s, during the 1990s their share reached 54 percent.

The Rabin government legislated additional laws that increased the institutional autonomy of the Finance Ministry and the Bank of Israel — such as the Deficit Law, which further limited the government’s ability to spend money — each decreasing the ability of parliament and government to oversee the decisions of technocrats. Not satisfied with empowering only economists, the government strengthened the authority of judicial technocrats as well. Thus the “constitutional revolution” of 1992, which for the first time gave the Supreme Court the authority to disqualify laws that it deemed unconstitutional.

But for the Israeli working class, the Oslo years were a raw deal. Likud voters were skeptical about the promised “peace dividends.” As far as they were concerned, the decision of the Rabin government to freeze construction work in the West Bank blocked their access to cheap housing. The peace process also threatened their livelihoods in other ways. It allowed Israel to strengthen its relations with neighboring Arab countries. Israeli companies leaped on the opportunity to close labor-intensive factories, which were often located on the peripheries of the country where Likud voters lived, and reopen them in Egypt or Jordan, where labor was cheaper. The same Dov Lautman that supported Rabin in 1992 had moved, by 1998, half of his textile production lines overseas. The Rabin government also changed how it allocated export subsidies. If these were previously given to factories in the country’s periphery, they were now allotted to high-tech companies in metropolitan areas that were more profitable.

That was not all. The Rabin government worked to weaken the Histadrut as assiduously as Likud governments did. The reason was that, by the early 1990s, the Histadrut was seen as a liability rather than an asset. In both 1986 and 1988, the sorry state of its economic enterprises forced Labor to stay within the unity government to arrange loans and bailouts for the worker companies and the sick fund. Thus, the needs of the Histadrut prevented Labor from differentiating itself from the Likud. In addition, a new generation of young leaders that came out of student associations sought to destroy the dominance of the Histadrut within the internal bodies of the party that selected candidates at the local and national levels. With the blessing of the party leadership, these young politicians were able to reform internal selection procedures by replacing committees with primary elections.

These changes created political space for the Rabin government to uncouple membership in the Histadrut from access to health services. That was a severe blow to organized labor. What made the Histadrut the largest workers’ union in the country was its sick fund, which insured a majority of workers. After a tense internal struggle within the party, the Labor government legislated the National Health Law in 1994, which essentially nationalized the Histadrut’s sick fund. As a result, the number of card-carrying Histadrut members was halved between 1992 and 1996.¹⁸

While undermining organized labor, the Labor government promoted precarious forms of employment by passing legislation in 1996 that regulated the hiring of workers through “manpower companies.” Workers employed through them earned the lowest wages and could be fired arbitrarily. The courts, although empowered by the so-called constitutional revolution, often declined to protect vulnerable workers and gave the right to private property supreme status. All this suggests the unequal effects of the economic policies of the Rabin government. The integration of Israel into the global economy gave peace dividends for the educated middle classes while leaving behind the working class. Between 1990 and 2002, the income share of the top decile of earners rose from 25 to 30 percent while staying stagnant or declining for all other deciles of income. The Gini coefficient of inequality rose from 0.498 in 1993 to 0.528 in 2002.¹⁹ These were the experiences that shaped the working class’s view of the Oslo peace process, and when it had a chance, it voted the Labor government out of office.

The Israeli arena was now cleared for a new kind of politician — a claimant to the prime minister’s office who was neither a former labor organizer nor an ex-general, as many of Israel’s leaders had been. Instead, any future contender’s main talent would be the ability to attract deep-pocketed donors. In short, it was Benjamin Netanyahu’s time to shine. One of his biggest assets would be his strong connections to rich Jewish conservative donors and a longtime acquaintance with the Republican Party.

Netanyahu, who knew Richard Perle personally, came to power imbued with the neoconservative ideas that George W. Bush would later champion. However, the time was not right for him to implement such policies. His two main coalition partners were sectoral parties. One of them, Shas, represented the religious working class. The other, Yisrael Beiteinu, represented Russian-speaking immigrants from the former USSR. Both were interested in increasing budget allocations to their sectors. Neither was supportive of a tax cut for the rich. Nor was there much room for a hawkish foreign policy. Under pressure from Bill Clinton’s administration, Netanyahu continued the Oslo process and even signed the Hebron Protocol in 1997, which placed additional West Bank territories under the control of the Palestinian Authority (PA). The extreme-right parties responded to Netanyahu’s concessions with disappointment and withdrew their support for his coalition. This was the background to the 1999 elections that Netanyahu lost. Had those three years as prime minister been his only contribution to Israeli politics, he would have been remembered as a historical footnote. The 1990s were not a propitious time for him to leave his mark.²⁰

After spending three years in the political wilderness, Netanyahu staged a comeback. In 2002, he was appointed to serve as foreign minister in the cabinet of Prime Minister Ariel Sharon. A year later, in 2003, Netanyahu was appointed as finance minister in a cabinet reshuffle. Thus started one of the most consequential and least understood chapters in his career. Both Sharon and Netanyahu sought to detach themselves from the sectoral coalition of the settlers, the working class, and the ultra-Orthodox that Begin built. Instead, they wanted to strike an alliance with the bourgeoisie and the middle class.

Netanyahu’s thinking seemed to acknowledge the new reality. After two decades of neoliberal reforms, the private sector grew in power and importance. Aligning with private capital could be the best way to establish hegemony. The foreign-policy expression of that agenda was Sharon’s 2005 disengagement plan that brought about an Israeli withdrawal from the Gaza Strip and parts of the West Bank. The economic aspect of that agenda was left to Silvan Shalom, Netanyahu’s predecessor in the Finance Ministry, and to Netanyahu himself. Both Shalom and Netanyahu made savage cuts to social benefits while cutting the taxes of the very wealthy. In short, this was the mirror image of the economic policy of President Bush. According to one estimate, the Treasury lost 23 billion shekels in revenue due to Netanyahu’s tax cut for the rich. The argument was that it was necessary to ensure talented high-tech workers would not migrate overseas. But Shalom and Netanyahu found a way to recoup lost revenue. Between 2001 and 2003, the state budget was cut by 20 percent. In those same years, old-age allowances were cut by 10 percent, guaranteed-income allowances by 20 percent, benefits to single-parent families by 28 percent, and unemployment benefits by 23 percent.

The stars aligned to make the Sharon coalition amenable to such policies. Shinui, a bourgeois party, was part of the coalition and supported Netanyahu’s economic agenda enthusiastically. The ultra-Orthodox parties were not part of the Sharon coalition between 2003 and 2006, and Netanyahu used this opportunity to cut the child allowances on which this constituency was so dependent. This was a dramatic shift. Before Netanyahu entered the Finance Ministry, Israel had one of the most generous child allowances in the OECD. After the cuts, they were among the lowest. Some ultra-Orthodox families — those with six kids or more — lost as much as two-thirds of their child-allowance income.²¹

Netanyahu also used the opportunity to strike a final blow against the power of the Histadrut. He and the technocrats in the Finance Ministry engaged in a campaign to scare the public about the solvency of Histadrut-owned pension funds. Netanyahu painted a picture according to which these funds were mismanaged and incurred large debts. Based on these claims, the Finance Ministry nationalized the funds, thus delinking Histadrut membership and pension benefits. This reform, which completed the act of nationalizing the sick fund, was another blow to the Histadrut’s ability to organize workers. After taking these pension funds under its control, the Finance Ministry appointed managers that invested most of them in the stock market, thus making them very similar to American 401(k) plans. Officials in the Finance Ministry were quite open about the fact they took that step to smash the power of organized labor.²²

These reforms increased the precarity of low-wage workers and greatly empowered employers, who now enjoyed a more docile workforce. It seems astounding that such a policy would get a pass from the public, but despite a few loud protests, Israelis remained largely indifferent. The reason was that, just as in the United States under Bush, the shock of war was used as a pretext to pass painful economic reforms. In the United States it was the Iraq War, and in Israel it was the Second Intifada. At the time, the IDF unleashed Operation Defensive Shield against Palestinian armed groups in the West Bank. The reforms that Shalom and Netanyahu passed were described in the media as “the economic Defensive Shield.” Abiding by these reforms was thus tantamount to patriotic duty.²³

Unlike his time as prime minister, as finance minister Netanyahu received support from the bourgeois Haaretz newspaper, a reliable mouthpiece of the middle class and the business community, which applauded Netanyahu’s policies. The Manufacturers’ Association, which supported Labor during the 1990s, described Netanyahu’s economic agenda as “courageous and in the right direction.”²⁴

As always, the Americans were part of the story.²⁵ In 2002, the Sharon government appealed to the United States for an aid package. Israel’s economy had suffered from negative GDP growth during the previous three years as a result of the burst of the dot-com bubble and the beginning of the Second Intifada. It was also hit by the recession brought about by 9/11. In April 2003, Congress voted for $9 billion in loan guarantees to Israel to be delivered in three tranches over three years. Two months later, John Taylor, US undersecretary of the Treasury for International Affairs, spoke in Jerusalem at a public event and made it clear that Israel’s access to these tranches was conditioned upon its government’s agreement to implement an economic plan that would trim the budget and limit social transfers. In short, the Bush administration was backing Netanyahu’s economic agenda.

The result of Netanyahu’s policies was clear. Civilian expenditure as a share of GDP in Israel held steady at 35 percent until Netanyahu’s reforms in 2003. At that point, civilian expenditures began to be cut severely until they reached 30 percent in 2007. At the time they were enacted, these policies were considered a success. When Netanyahu resigned in 2005, Israel was enjoying the lowest rate of inflation in the OECD and the highest rate of growth. The credit rating agencies raised Israel’s sovereign credit score from A- to A+. However, the poverty rate grew by 10 percent. Yet that seemed like small potatoes to the pundits in the privately held media.²⁶

On paper, the neoconservative experiment was an economic success. But as a political project, it was a failure. When Netanyahu led the Likud in the 2006 elections, the party lost as much as fifteen seats in parliament. In his concession speech, he acknowledged that it was his economic policies that hurt the Likud politically. Netanyahu would spend the next three years on the opposition benches. He had learned his lesson. He would never jettison Begin’s sectoral alliance with the settlers and the ultra-Orthodox again.

In the same way that Israel under Begin wrote the first chapters of the history of a new system of governance that became known as neoliberalism, Israel under Netanyahu wrote the first chapters of a new kind of politics that would come to define twenty-first-century populism. Moreover, this strand of populism emerged in Israel much earlier than Brexit or the rise of Donald Trump. In Israel, it began as a response to the erosion of the compensation mechanism that Likud developed. For instance, home prices in the West Bank converged with prices in the Israeli real estate market. Cheap housing in the West Bank became increasingly scarce.

Netanyahu’s response was to create a new regime that social historian Daniel Gutwein calls the “loyalty rule.”²⁷ The logic of that concept was imported from the West Bank, where different groups living in the same geographical space have different civil rights. In the same way, Netanyahu’s Likud tried to condition civil rights upon loyalty to the party. Likewise, it sought to allocate the budget according to its assessment of how loyal different sectors were. For instance, Likud ministers consistently sought to increase the budget of towns where the share of the vote that went to the Likud was particularly high. The 2018 Basic Law (“Israel as the Nation-State of the Jewish People”) was an attempt to create a legal infrastructure that would allow the Likud government to discriminate between Arabs, who consistently vote for left-wing parties, and Jews.

Another example was exhibited during the 2020 COVID9 pandemic. Netanyahu insisted on imposing national rather than regional lockdowns. However, national lockdowns were enforced unequally. In the ultra-Orthodox towns, where rabbis demanded that prayers and communal religious events continue as usual, curfews were not enforced. Likewise, when fashioning the aid program that would help those who were hurt economically by the pandemic, Netanyahu chose an option that was considerably less generous than similar programs in other OECD countries. However, he made sure that his supporters, who come from the lower deciles of income, would be hurt less by that policy. In that way, Netanyahu was rewarding them for their loyalty. Additionally, unlike in OECD countries, the pandemic benefits were not regulated and thus exposed to Netanyahu’s whims. He made it a habit to give briefings to the press in which he would announce that he personally decided to increase benefits according to the number of kids in each household “to support families ahead of the holidays.”²⁸

This discussion helps clarify how populism works as a political strategy. Populism does not deviate from the macroeconomic tenets of neoliberalism and does not seek to deal with the social tensions it creates by increasing state spending or raising taxes on the wealthy.²⁹ In that sense, populism isn’t an ideology that collides with the principles of neoliberalism. Rather, it marks a stage in its development from technocratic neoliberalism to clientelist neoliberalism.

If under the first stage of neoliberalism the technocrats were necessary to give the destruction of the welfare state a patina of legitimacy, under the clientelist stage of neoliberalism they became an object of envy and resentment for the working class as well as a target for incitement by populist politicians. If technocratic practices and rhetoric were formerly used to justify savage cuts to benefits and social spending in the name of efficiency, now the technocrats were scapegoated for the ills of the system. This political technique can work because the accusations do have a kernel of truth: technocrats were involved in the production of inequality. Yet rather than trying to bring about a redistribution of income, populist leaders seek to muddy the waters by deflecting the blame for yawning inequality to “elitist” technocrats.

The more populism adopts discriminatory practices whose aim is to privilege the “real people,” the more it collides with the economic and judicial technocrats in government whose raison d’être is enforcing universal criteria. When these professionals block attempts to condition civil rights on loyalty to the government or prevent the arbitrary allocation of state funds, clashes emerge. In the previous year, this conflict manifested in Israel through the “judicial coup” — i.e., Netanyahu’s attempt to take control over the Supreme Court and undo the 1992 constitutional revolution.

While such practices exacerbated the tensions between Netanyahu’s sectoral coalition and the educated middle class, opposition parties struggled to gain a majority in the elections that took place between 2009 and 2021. The results at the ballot box showed a rigid voting pattern: the upper-income deciles went to the opposition parties, yet the lower-middle class and the working class consistently voted for the parties participating in Netanyahu’s sectoral coalition. And it’s not hard to understand why: past experience has taught the working class that, while the Likud was offering them imperfect compensation mechanisms to help keep them afloat, the Israeli left was trying to abolish those mechanisms altogether.

The experience with the short-lived “change government” that was in power between 2021 and 2022 was instructive. As soon as it was voted into office by parliament, the Naftali Bennett–Yair Lapid cabinet ended the aid programs enacted during the pandemic, although COVID and the concomitant recession were far from over. It tabled a budget accompanied by the longest Arrangement Law ever submitted to the Knesset. The government rammed through reforms that the technocrats at the Treasury could previously only dream about. During its only year in office, the coalition raised the retirement age for women, abolished trade protections for farmers, and increased the exposure of pension funds to the stock market. Small wonder that the voters at the end of 2022 gave Netanyahu a narrow majority.

Netanyahu’s foreign policy during that era was focused on the core interest of his sectoral coalition: maintaining Israeli control over the West Bank. He tried to normalize the occupation by creating an international coalition that would diversify Israel’s export markets. To prepare for European and American pressure to dismantle the settlements, Netanyahu sought to strengthen relations with India and China by offering them access to Israeli agricultural and military technologies. He also tried to leapfrog over the Palestinian issue by strengthening Israel’s relations with conservative monarchies in the Persian Gulf. To assuage their pro-Palestinian sentiment, Netanyahu offered their kings and princes an anti-Iranian alliance. Appealing to European leaders, he touted Israel’s large gas field in the Mediterranean, Leviathan, and presented it as a way to ensure Europe’s energy security. He also reminded them about Israel’s Red-to-Med pipeline that could be used to deliver oil from the Persian Gulf to European energy markets. Additionally, Netanyahu encouraged the IDF to use as much high-tech gear as possible to lower the costs of the occupation.

To make sure that Israel would never have to negotiate with a Palestinian unity government, which would unite the West Bank and the Gaza Strip, Netanyahu created the conditions that would allow Hamas to entrench its rule in Gaza. He continued the economic blockade over the strip inherited from Ehud Olmert’s government. This policy weakened pro-peace sectors of the Gazan economy that were dependent on trade with Israel. The blockade also strengthened Hamas, which controlled the tunnels through which goods were smuggled from Egypt.³⁰

At moments when the economic situation in Gaza deteriorated, Hamas would predictably attack the Israeli settlements closest to the border. Netanyahu would respond with a series of operations putatively meant to hurt Hamas and deter it. This became known in Israel as the “policy of the rounds,” which referred to the recurring cycles of violence. However, Netanyahu refused suggestions from the IDF to invade Gaza in 2014 and eradicate Hamas, which was then far weaker militarily than it is today. Likewise, he declined proposals by Israel’s intelligence agencies to assassinate Hamas leadership in Gaza. Thus, Netanyahu kept Hamas in power while simultaneously weakening the PA by avoiding meeting its president, Mahmoud Abbas, or entering negotiations with him.

The plan seemed to be working. The Palestinians remained weak and divided. The costs of the occupation seemed low, and a majority of Israelis stopped taking interest in the plight of the Palestinians. In 2018, though, these achievements were on the verge of collapse. Egypt had closed the tunnels connecting Gaza to the Egyptian economy. The PA had also stopped transferring money to Hamas, seeking to cow the recalcitrant organization. Egypt and the PA were hoping that, under extreme pressure, Hamas would agree to a unity government with the PA. The result, thought the Egyptians, would be a more pragmatic Hamas. Netanyahu, who was supposed to be a part of this initiative, dragged his feet. With its back to the wall, Hamas now tried a new strategy to break the economic blockade. It encouraged Gazans to march to the fence to protest Israel’s blockade. Israeli soldiers used live ammunition against the demonstrators. Hundreds of Gazans were killed as a result.³¹

Hamas retaliated by tying Molotov cocktails to helium balloons. The balloons, which became known in Israel as “arson kites,” crossed the fence and set fields on fire. Three-quarters of Israeli tomatoes are harvested in the Jewish settlements around Gaza, as are one-third of apples and avocados.³² The damage was severe. In the summer of 2018, hundreds of acres were burned. Netanyahu then took an unprecedented step. He appealed to Qatar, a country that was on a collision course with Saudi Arabia and Egypt for alleged ties with Islamic terrorist organizations. These countries, together with the Arab League, put Qatar under an economic blockade in 2017. Qatar was seeking to escape the tightening noose by buying influence and friends in the Arab world. A big supporter of Hamas rule in Gaza, Qatar had by 2018 already given $1.1 billion to the organization (but next to nothing to the PA). In the following years, it would transfer about $30 million a month to Hamas. The Israeli prime minister was pleased. In March 2019, he told fellow parliament members: “Those who want to thwart the establishment of a Palestinian state should support the strengthening of Hamas and the transfer of money to Hamas. This is part of our strategy — to differentiate between the Palestinians in Gaza and the Palestinians in Judea and Samaria.”³³

The Abraham Accords of 2020, which led to the establishment of a formal diplomatic relationship between Israel, Bahrain, and the United Arab Emirates, were used by Netanyahu as proof that his policies were effective. It was possible to make peace with the Arab world without making any territorial concessions to the Palestinians. Moreover, the relationship with the conservative monarchies in the Gulf came about because of a shared hostility toward Iran — a signature Netanyahu policy. Already during the negotiations over the Iran Deal between 2014 and 2015, Netanyahu was reaching out to Saudi Arabia and the UAE. The three countries worked behind the scenes to derail Barack Obama’s attempts to reconcile with Iran (something the US intelligence agencies were well aware of). Following the Abraham Accords, Israel became part of the Negev Forum, which sought to increase security cooperation between Israel and Gulf states to counter Iran’s influence in the region.³⁴

The conflagration of October 7 came as a dramatic shock for the Netanyahu regime. It exposed every tenet of the Netanyahu doctrine as vacuous: Hamas was not, in fact, a willing accomplice to Israeli colonialism in the West Bank; peace with rich Persian Gulf countries was not possible without solving the conflict with the Palestinians; strong ties with China and India could not replace the alliance with the United States; and technology could not replace manpower when it came to securing the border. How could Netanyahu survive the debacle?

The most immediate answer was the disastrous land operation in Gaza. Organized more to seek revenge and exact retribution than to achieve some kind of political or military goal, the operation was offered to a domestic audience in a state of shock and panic as a panacea. This bought time for an incompetent and corrupt political and military leadership. Instead of seeking the resignation of the government, Israeli TV viewers could busy themselves with gleefully watching the massive destruction, the killings of thousands of innocent civilians, and even the widespread starvation. The mainstream media dutifully used rhetoric that dehumanized the denizens of Gaza (“Hamas are Nazis, and the whole people of Gaza support Hamas”) and made Israelis feel as if the aimless land maneuver was the right thing to do. As these lines are being written, the Israeli public is only starting to debate what has been done in its name and its consequences. Yet most people are far more concerned about a looming confrontation with Iran and the long-term future of Israel. Netanyahu can thus survive once more by using the shock doctrine. Additionally, the sectors that support the Netanyahu government have no alternative. The benefits they have consistently received from Likud governments would disappear under a new bourgeois administration.

That said, since his return to power at the end of 2022, Netanyahu is no longer the bourgeoisie’s Louis Napoleon. Parts of the middle class that were willing to support him in the past are no longer willing to do so now. If anything, the last year and a half has served as a cauldron in which the educated middle class increased its cohesiveness and solidarity. For the first time in many years, it went out into the streets in droves to support the technocrats within the corridors of government and the halls of justice. Looking at the technocrats, the educated middle class saw its own. As before, this class does not exhibit any interest in striking an alliance with the working class. Rather than embracing a call for a strong welfare state to broaden the protest movement’s appeal, it continues to extol technocratic neoliberalism. Its main arguments revolve around the need to preserve the independence of the courts and the authority of Finance Ministry officials to maintain budget discipline.

Nevertheless, this is a real problem for Netanyahu. The service sector of the economy is far bigger than in other countries where populist leaders have emerged. In short, Israel’s class structure is very different than that of India, Poland, Russia, or Turkey. As a result, polls consistently show that Netanyahu’s sectoral coalition would lose badly if free and fair elections were to take place. That’s what makes the war in Gaza, in Lebanon, and most recently with Iran so crucial. Under the tension and fear that the war creates, Netanyahu’s sectoral alliance can take over more and more state institutions. Its greatest success was tightening its control over the police. Under the leadership of Itamar Ben-Gvir, a minister who is a convicted criminal and a strong believer in Jewish supremacy, the police grew intolerant of the protest movement. Arbitrary arrests of protesters and movement leaders are increasing. Additionally, in an incremental manner, more and more budgets are siphoned to enlarge the ultra-Orthodox education system and subsidize settlers. This seems to be the reason Netanyahu has derailed any attempt to end the war in Gaza through a cease-fire agreement and a hostage deal. The unending war seems to be Netanyahu’s best method of succeeding in becoming Israel’s Louis Napoleon.

Dan DiMaggio, Carey Dall, Rand Wilson, and Gene Bruskin provide more sympathetic reads of Womack than the other six respondents, but it is not clear that even these readers really want to go where he is pointing. DiMaggio sees “the bigger context for thinking about Womack’s points [to be] that any revival of the US labor movement will require the revival of the strike,” though withholding labor per se is hardly Womack’s focus. Wilson thinks “workers are almost always the most knowledgeable source of information about who is in the best position to disrupt the production processes or services and where management’s weaknesses lie,” though Womack is at pains to show that the highly complex distributional flows of the present require something like a labor institute of industrial technology to understand them.

In many ways, the essential reticence to accept Womack’s basic orientation is a function of the fact that labor and the Left are still both focused on the need, in Wilson’s words, “to realize labor’s potential power in the workplace.” This is a fine position to hold if power really flows through the workplace, as it did when there were tremendous amounts of fixed capital invested in gigantic factories. But today, points of leverage are very often outside workplaces, at those distributional nodes far from the shop floor, between companies, workers, and union jurisdictions.

One might say then that, for the labor left, Womack offends the basic imperative to descend into the hidden abode of production. For him, it is not the workplace as such that is important but the kinds of connections that the workplace makes possible. Some of those connections will be in the workplace, but many will not.

Wherever you put things together, there’s a seam or a zipper or a hub or a joint or a node or a link, the more technologies together, the more links, the places where it’s not integral. It is parts put together, and where the parts go together, like at a dock, at a warehouse, between the trucks and the inside, between transformers and servers and coolers, there can be a bottleneck, a choke point.

Womack challenges jurisdictional boundaries (he even suggests at one point the creation of a “US Transport and General Workers’ Union” combining the ILWU, ILA, IBT, and IAM), but more generally he questions the very basics of unions’ organizing orientation (insofar as they still organize). To be very simple about it, we might see Womack as wanting to replace the model of the strike with that of the blockade. Unions, of course, are not unpracticed in the latter, but it is not the organizing fulcrum that the former is typically made out to be.

Once we get here, a whole set of fascinating questions emerge: first and foremost, if many (though not all) of the strategic disruption points have moved outside of the workplace, is it possible to mobilize workers not simply to band together and withhold their labor but to seize these choke points in coordinated action? This would mean, for instance, turning one’s attention away from organizing particular stores to getting smaller cadres of employees to occupy key distributional nodes and getting masses of other workers to support them. Right off the bat, we can see that the distinction between supposedly strategic and nonstrategic workers begins to fade: longshoremen and rail engineers are not necessarily the only ones with access to the seams in industrial technologies.

Still, they’d need to be supported by research departments that have up-to-date and sophisticated analyses of particular supply chains. Is the labor movement up for such a task? What would it need to approximate something like Womack’s proposed labor institute of industrial technology? Somehow the “Freedom Convoy” found the one bridge where 25 percent of all trade between the United States and Canada is conducted. Why wasn’t it the labor movement that took advantage of this situation?

Then there’s the question of how to support workers at such critical junctures, when historically company and state violence have been exerted. If smartphones are recording every second of a blockade, will that prevent bloodshed? What does community support look like at warehousing sites far from any affected community? Consumer boycotts? Can they be timed effectively? Would such occupations only work if multiple nodes in a supply chain were seized?

There are also further questions around internal organizing that Dall raises in his helpful response. For Dall, activating already unionized workers at ports and in rail can help set the conditions for organizing other workers: “To organize Amazon workers, we must first internally organize union transportation workers whose labor on the seams enables Amazon to get cargo of Asian origin to their hellish warehouses and finally to the consumer’s door.” In the case of rail and airline workers, there is a particular law, the Railway Labor Act, that protects these transportation workers in some ways but heavily incentivizes them not to disrupt things in others. What are those ways? How can these unions be won over to the idea that they might need to break the law, or how can particular workers be convinced not to follow their unions’ dictates?

Finally, the basics of breaking the law — how, when, where, and why to do it — must be foregrounded in any execution of a Womackian vision. From roughly the 1932 Norris-LaGuardia Act until the 1947 Taft-Hartley Act, labor had access to tools that are now off limits: recognition strikes, sit-downs, secondary boycotts. The postwar compromise was predicated on tolerating collective bargaining, provided those tools were put down for good. Experimenting with disruptive tactics again is likely to bring about forms of repression the likes of which we have not seen for a few generations. The possible benefits are enormous, but any action for which people might be put under the jail must obviously be undertaken with extreme caution.

At present, the Left is rent between those who emphasize the importance of disruption, rioting, sabotage, etc., and those who encourage us to stay the democratic course. The more anarchistic emphasis on dramatic disruption can often be fantastical, but given the constraints of modern labor law, where many ways of gaining leverage are straightforwardly illegal, it does seem necessary to start some conversation about the forms of strategic illegality that labor activists might want to take up. Womack allows us to begin to broach this question in ways that move beyond the dichotomy of blowing it all up versus working within the present institutions.

These questions, difficult and speculative as they can be, all follow from Womack’s analysis, and it’s notable they receive such little discussion in the responses. I have tried to get at the substantive reason for avoidance — that Womack moves us away from thinking about workplace organizing in the typical ways — but perhaps there are more personal and institutional reasons there as well. Some of what Womack articulates bears a resemblance to the vision behind SEIU’s “comprehensive campaigns,” which produced some impressive wins but fell far short of their stated goals. Some on the labor left still bristle at the “smart” strategizing of SEIU luminaries, and maybe Womack’s speculative hipshots are too reminiscent of former president Andy Stern’s thought.

But the stakes for labor today are too high for past grudges to lead to a dismissal of the need for broad strategic reconsiderations. At root, Womack’s labor philosophy is quite basic: “You have to wound capital to make it yield anything. And you wound it painfully, grabbing its attention, when you take direct material action to stop its production, cut its profit.” But how to make good on this idea, with a stolid labor movement in a deindustrialized, logistical economy, is a tremendously complicated matter. Operationalizing Womack would take not just a set of short responses but a research team with real resources. I cannot speak at present to the feasibility of many of Womack’s proposals or the possibilities latent in his thinking, but those proposals and possibilities should at least be recognized for what they are: a massive challenge to the usual ways we think about labor organizing.

What exactly would it take to wound capital today? Womack doesn’t provide all the answers, but he should at the very least get us thinking outside the typical boxes.

No Politics but Class Politics has come right on time. Edited by Anton Jäger and Daniel Zamora, the book is a collection of essays by Adolph Reed Jr and Walter Benn Michaels that explore the class nature of the growing discourse centered around racial disparities and diversity. Spanning the last two decades and covering a diverse range of topics, from electoral politics and movement history to film and art, this collection offers a comprehensive analysis of the limits and contradictions of anti-racist politics.

In a way, this book is a product of the disorienting political period for the Left set in motion by the COVID-19 pandemic, the defeat of Bernie Sanders’s presidential campaign, and the mass protests in response to the murder of George Floyd. Each of these events, which in different ways represented shocks to US politics, were infused with class dynamics that were primarily expressed in racial terms. As major corporations like Amazon donated millions of dollars to the Black Lives Matter movement and Democratic Party elites knelt in kente cloth, it was clear that the ruling class had moved to make the most of this peculiar moment of racial mania.

In the foreword, Jäger and Zamora aptly describe the current conjecture as one more sign of the “the slow disarticulation of the agenda of the civil rights movement from any commitment to reshaping the economic relations that produce inequality in the first place.” The essays that follow trace the ideological underpinnings of this steady retreat from contextualizing racial inequality within the broader political economy.

First and foremost, No Politics but Class Politics forces readers to confront and challenge commonsense understandings of what race really is. Reed’s 2013 essay “Marx, Race, and Neoliberalism” mounts a rigorous Marxist analysis of the development of racial ideologies and the work that they do. Importantly, emphasis is put on the emergence of race at a historically specific time under concrete social conditions and the ability of racial ideology to evolve as these conditions changed.

The necessities of various labor regimes propelled the evolutions and uses of race, which has thus always rested on a political-economic foundation. The plantation slave economy, the post–Civil War sharecropping system, and the mass industrialization of the late nineteenth and early twentieth century all made pragmatic use of race ideology to justify and naturalize the economic and political positioning of the laboring masses at the given times in the way most beneficial to the ruling class. As Reed explains, “The innovations of race science . . . promised to assist employers’ needs for rational labor force management and were present in the foundation of the fields of industrial relations and industrial psychology.”

The gradual separation of race from class has led to a situation where many of those purportedly on the Left have (perhaps unknowingly) accepted an essentializing framework to think about race. Michaels explores this more deeply in his provocative “Autobiography of an Ex-White Man” by challenging the common dictum, touted by both liberals and leftists, that race is a social construction. While the race as social construction formulation appears to clearly challenge ideas of racial essentialism, it actually accepts them as its starting premise.

 Through interrogating the phenomenon of “passing” for a certain race, the piece illuminates that, in order for the idea of passing to be sustained, there have to be essential characteristics about a given race that one can either choose to perform or not to perform. As Michaels explains, “The possibility of belonging to a race of people who don’t look like you produces the possibility of manifesting your racial identity in your actions — of acting white or black.” And in order to “act” black or white, one must buy into the idea of essential defining features of whiteness and blackness that can be imitated. Furthermore, the belief that one can imitate another race rests on the assumption that you are betraying your actual race; in other words, it still takes race seriously as a biological fact.

This insight becomes important when considering the “race and class” rhetoric that is popular among many on the Left. Attempts to define class as yet another identity fall on their face. Unlike race, one’s class is determined by what you do, not what you supposedly are. As Michaels explains, “The identity that is identical to action is not really an identity — it’s just the name of the action: worker, capitalist.”

This theme is further built upon by another piece included in the collection, Reed’s controversial From Jenner to Dolezal: One Trans Good, the Other Not So Much. Comparing the favorable reception to Caitlyn Jenner’s claim as a woman with the unfavorable reception to Rachel Dolezal’s claim as an African American, Reed asks, “Is the point supposed to be that Dolezal is lying when she says she identifies as black? Or is it that being black has nothing to do with how you identify?”

These questions strike at the heart of the contradictions inherent in the identitarian reactions to Rachel Dolezal. Those who deny the validity of Dolezal’s claim on the basis that there’s more to race than identity have waded into some dangerous territory. As Reed points out, this view reveals a belief in “a view of racial difference as biologically definitive in a way that’s even deeper than sexual difference.”

Reed’s point, of course, is not to champion Dolezal’s behavior. Rather, it is to expose the broader hypocrisy and commitment to essentialism that these discourses on identity are based upon. As usual, Reed is able to tease out the underlying class dynamics at work in the Dolezal episode, writing that the hostile reaction “is about protection of the boundaries of racial authenticity as the exclusive property of the guild of Racial Spokespersonship.”

No Politics but Class Politics drives home the point that the current brand of identity politics, with its centering of disparities as the ultimate measure of inequality, is not only a form of class politics but also a politics that aligns with and reinforces the basic tenets of neoliberalism.

Of course, the existence of racial disparities is a negative thing. However, the broader point is that one can eliminate racial disparities while still maintaining a fundamentally unequal economic system that relegates the majority of black people to miserable and precarious lives. As Michaels asks in the featured essay, titled Identity Politics: A Zero-Sum Game, “Which is a more progressive goal — a world in which only thirteen per cent of black people (instead of twenty-four per cent) live below the poverty line or a world in which none of them do?” Eliminating disparities alone cannot make society more equal; it will simply make society unequal in a different way.

The essays skillfully explore how this neoliberal version of social justice has gained hegemony in our major institutions. Discourse on education has become centered on creating racially proportionate opportunities for people to overcome poverty instead of eliminating poverty in the first place. Here is a clear-cut example of the difference between a class-based approach and one based on eliminating disparities. A class-based approach posits that the lower-paying jobs in our society, which also happen to be in the fastest growing sectors and disproportionately held by workers of color, should be made into high-quality, good-paying jobs. The identitarian approach instead focuses on how to make sure that these low-paying jobs are held by the proportionately correct number of white people.

The most comprehensive and far-reaching critique of disparities discourse comes in “Race, Class, Crisis: The Discourse of Racial Disparity and Its Analytical Discontents,” coauthored by Reed and Merlin Chowkwanyun. They unpack the persistent pathologies that underline most studies of racial disparities. One cannot deny the persistent racial disparities that exist in the realm of housing, education, employment, etc. However, it is the causal explanations and the policy agendas that flow from the framing of disparities that are problematic.

All too often, the proposed remedies to the existence of disparities tend to emphasize various schemes of individual wealth-building. As Reed and Chowkwanyun point out, “Such stratagems represent détente with rather than commitment to changing capitalist class relations, including those that contribute to intra- and inter-racial disparities in the first place.” Research on disparities often give causal power to auxiliary dynamics or outcomes as opposed to tracing racial disparities to fundamental economic issues such as employment, public services, land use, etc.

There are few scholars, if any, with a more penetrating analysis and critique of contemporary black politics than Adolph Reed Jr. Readers will get a glimpse of this in essays such as “From Black Power to Black Establishment.” Tracing the devolution of Black Power from its radical-seeming beginnings to its disappointing fate as just another expression of ethnic-interest-group establishment politics, Reed concludes that the movement “was always a concept in search of its object.”

Reed consistently decries the crystallization of black political aspirations around ill-defined goals like “community control” instead of concrete policy initiatives that would lift the material living standards of black working people. Such campaigns around issues like fair employment, eliminating the poll tax, and improved public education were common during the civil rights movement, from roughly the 1930s to the 1960s. While the lore of black history tends to focus on the radical edges of Black Power such as the Black Panther Party, this essay concludes that Black Power rhetoric “also resonated with the self-image and aspirations of an emergent stratum of black professional and managerial functionaries, administrators, and officials.”

While it’s clear throughout the book that Reed and Michaels are deeply committed to a materialist account of race and racism rather than a cultural one, the book does offer some of their ruminations on the cultural sphere. Both writers are able to draw out how and why so much of our culture has been thoroughly imbued with neoliberal ideology and themes. Perhaps more importantly, Reed in particular emphasizes the folly of attempting to use the capitalist culture industry to advance the Left’s ideas and values. If anything, this project simply serves as a demonstration of neoliberalism’s victory, as Reed explains in his essay “Django Unchained, or, The Help,” “Nothing could indicate more strikingly the extent of neoliberal ideological hegemony than the idea that the mass culture industry and its representational practices constitute a meaningful terrain for struggle to advance egalitarian interests.”

Reed goes on to advance a devastating critique of the movies Django Unchained and The Help, arguing that their dominant message is one of individual success and atonement, coupled with completely ahistorical depictions of slavery and Jim Crow. Meanwhile, Michaels, in “Chris Killip and LaToya Ruby Frazier,” contemplates the value and meaning of artistic depictions of deindustrialized working-class communities.

The book also features four interviews, more like discussions, between Reed, Michaels, Jäger, and Zamora. These interviews are fascinating and in some ways essential for tying all the themes outlined in the essays together. In this section, one gets a glimpse at how aspects of the authors’ biographies have impacted their critiques of anti-racism and all forms of essentialism. Reed’s reflections on his political journey encompassing Black Power student activism, new urban black electoral regimes, academia, and Labor Party building are rich with insights and lessons from an entire life devoted to working-class politics. Their personalities shine through in these discussions through countless witticisms and quips that will leave readers laughing and thinking at the same time.

No Politics but Class Politics is blunt, biting, and provocative. It has to be. It is increasingly clear that what is known today as “anti-racism” — with its accompanying displacement of political-economic questions to the realms of psychologistic babble, cultural navel-gazing, and disparities discourse — fits comfortably within the agenda of black elites and the broader ruling class. As the historic assault on the working-class grinds on, identitarian discourse can only counter with ever more hollow calls for a slight racial reshuffling in the distribution of neoliberalism’s disastrous outcomes. Capital has, and will continue to, use and shape these demands in order to diversify corporate boardrooms, legislative halls of power, and elite educational institutions while eviscerating the living standards of the working-class majority of all races.

It’s time to get serious about what a pro-working-class agenda is and is not. No Politics but Class Politics cuts through the noise and will help serious organizers and intellectuals make sense of how we can tackle racial inequality in the twenty-first century. As Michaels states in the essay “What Matters,” “The increased inequalities of neoliberalism were not caused by racism and sexism and won’t be cured by — they aren’t even addressed by — anti-racism or anti-sexism.” The sooner we learn this, the better for rebuilding a true working-class movement in this country.

Not So Black and White is a delightfully jargon-free and accessible text. Malik does not get bogged down in debates about theoretical and methodological frameworks. He is not explicit about the analytic perspective that informs his inquiry or the theoretical position that underlies his work. It is clear, however, that his analysis is grounded in political economy. This is not a minor point. The book is framed as a “history of Western thought.”¹³ Histories of ideas are tricky. They can easily slide from treating ideas as independent instances of social action to viewing the ideas, in and of themselves, as sufficient explanations of social action, thereby making cultural values and ideals “unproblematic explanations not only of social processes but also of themselves.”¹⁴Malik avoids these pitfalls because the book interweaves two narratives, the history of race and the history of working-class resistance to racism and colonialism. As such, this book is not just about the history of the idea of race; it is also a book about how ideas are forms of class discourse and are mobilized around class interests.

In Chapter 6, where he discusses the Haitian Revolution, Malik draws our attention to the fact that liberty and equality were ideological expressions of the French commercial bourgeoisie’s quest to overturn the social property relations of the ancien régime. As C. L. R. James explained, the fortunes created by the slave trade “gave the bourgeoisie that pride which needed liberty and contributed to human emancipation.” The revolutionary bourgeoisie “dignif[ied] its seizure of power with the Declaration of Independence or the Rights of Man.”¹⁵ The ideals of liberty and equality, born in the struggle between the feudal monarchy and the rising bourgeoisie, only became universal as a result of yet another series of class struggles: enslaver against enslaved and, when the latter emerged victorious, between the freedmen, Toussaint Louverture, and the emerging black landowning class that Louverture represented. Louverture and the new rulers of Haiti, Malik points out, “were of the same ‘race’ as those over whom they ruled. Many had been slaves.” The fact that they had a common racial identity did not deter the new black propertied classes from pursuing their class interests by subjecting the propertyless to a new regime of forced labor that was almost as oppressive as the one they had just overthrown. “That, too, is a thread that runs through the modern world.”¹⁶

The last sentence is key. Implicit in the book is an argument about how we should understand the role of class in history. Crucially, Malik draws our attention to not only the class politics that divide the racists from the anti-racists, but also those that divide the anti-racists from one another. In Chapter 8, “From Class Solidarity to Black Lives Matter,” he discusses the long-term political consequences of the “Scottsboro case,” which made Communist activity more legitimate, and the Communist Party more popular, among working-class African Americans in the South. At the same time, the case solidified the split between Communists and the National Association for the Advancement of Colored People (NAACP) and culminated in the victory of the “anti-Communist civil rights liberals” over “civil rights unionism.”¹⁷ The gains won by the anti-Communist civil rights liberals in the political realm represented an ideological victory that, I would argue, had epistemological implications. As Hugh Murray noted in “Aspects of the Scottsboro Campaign,” anti-communism has deeply distorted how American history is remembered and narrated, particularly when it comes to understanding race and class.

Much is written and published today on the history of the Negro in America, but all too often the authors display a narrow liberal bias. . . .  What must yet be written, difficult though it may be in a nation whose creed is anti-Communism, is a full account of the role of radical movements and individuals in the anti-racist struggle.¹⁸

With Murray’s observations, we can add one more item to Malik’s list of ideas held dear by both the identitarian right and left: a rejection of political economy as a theoretical framework for understanding inequality. This in turn can help us better understand the class politics that simultaneously drive analysis and are expressed in the 1776 and 1619 projects.

Malik points out that, by 1955, forty-four states had anti-communist laws, the most draconian of which could be found in Tennessee, which “made the espousal of revolutionary Marxism punishable by death.”¹⁹ The sword of Damocles hung over the heads of not only activists but academics as well. As red-baiting and anti-Communist repression worked to “cleave the political from the economic and to view both in terms of identity” in the political realm, it also set the stage for an epistemic break.²⁰ As political economy was excised from the two disciplines that needed it most — sociology and history — its understanding of class as a relationship defined by exploitation was eclipsed by the notion that class was an “identity” to be analyzed alongside other (more salient) ones. As sociologist Eduardo Bonilla-Silva put it, “Races, as most social scientists acknowledge, are not biologically but socially determined categories of identity and group association. In this regard, they are analogous to class and gender.”²¹ When political economy was forcibly removed from the academy, ascriptive identities became the central analytical categories, race became reified, and racism was made metaphysical and transhistorical.²²

The way in which anti-communism continues to inform epistemology can be seen most clearly in sociological theories such as “structural racism” and “color-blind racism,” which have become (to borrow a phrase from C. Wright Mills) “the major common denominator of serious reflection and popular metaphysics in [American] society.”²³ In these theories, racism and the pursuit of white supremacy are the key drivers of historical change; slavery and colonialism are defined as “racial” regimes rather than as social property relations; and “racial formation” eclipses class formation as the primary object of theoretical inquiry.²⁴ Paradoxically, an idea whose genesis was made possible by historians like Barbara Fields who are committed to class analysis — the notion that race is a “social construction” — has been seized upon by “race reductionist” sociologists to argue against class analysis.

Bonilla-Silva, whose work popularized ideas like structural racism and color-blind racism, maintains that although race is socially constructed, it “takes on a life of its own.”²⁵ It is on this basis that he rejects “class and class struggle as the central explanatory variables of social life” in favor of seeing “social relations between the races” as primary.²⁶ Michael Omi and Howard Winant have likewise argued that it is precisely because “it is now widely accepted in most scholarly fields that race is a social construction” that they “advance what may seem an audacious claim . . . that in the United States, race is a master category.” Similar to Bonilla-Silva, they reject class analysis because it treats race as “epiphenomenal to class and class relations.”²⁷

Race reductionist sociologists often credit Barbara J. Fields’s “Slavery, Race, and Ideology in the United States of America” for having shown that race is a social construction.²⁸ Fields has pushed back on this claim, noting that “the ‘social construction’ of race [is the article’s] starting point, not its conclusion.”²⁹The opening of her analysis was, of course, the social property relations and class struggles of seventeenth-century Virginia. The ability of race reductionists to ignore this and to use race’s socially constructed nature to argue for its analytic priority over class is not due simply to sloppy scholarship. Rather, it reflects the way in which anti-communism separated race from class in both the political and epistemological realms.

For the devotees of race reductionism in sociology, the fact that race is a social construction has served to support the idea that racism has driven historical development and change since the sixteenth century or, as Marxist historian Judith Stein wryly observed, the mistaken idea that “men make history according to their racial likes and dislikes.”³⁰ When Omi and Winant argue that “the concept of racial projects can be applied across historical time to identify patterns in the longue durée of racial formation, both nationally and the entire modern world,” they mimic the nineteenth-century race scholars Malik discusses in Chapter 2, “The Invention of Race.”³¹ These nationalist historians, he reminds us, developed “racial theories of history.” Like the identitarians of today, their mission was to engage in “a retelling of the past, and also of the present.”³²

Historiography, particularly when it comes to slavery, is the public arena where the epistemic implications of identity politics’ rise are most keenly felt. We are living through a moment when people are trying to draw connections between what C. Wright Mills called “biography and history,” or “the patterns of their own lives and the course of world history.”³³ Because slavery is so obviously and intimately connected to American racism and because black people suffer disproportionately from every social ill — from poverty to homelessness to drug addiction — debates over historiography are no longer just of academic interest. They have contemporary political implications. As the 1619 Project explained, in making the year 1619 “our country’s origin point, the birth of our defining contradictions,” it sought to shed a new and different light on “the unique problems of the nation today — its stark economic inequality, its violence, its world-leading incarceration rates, its shocking segregation, its political divisions, its stingy social safety net.”³⁴ The 1776 Commission, on the other hand, draws a direct line between the Confederacy and identity politics. Because it tried to substitute a theory of group rights for individual rights, the Confederacy and its attendant slavery, it argues, are the “direct ancestors of some of the destructive theories that divide our people and tear at the fabric of our country.”³⁵

Taken at face value, the projects appear to be locked in a battle over facts. The 1776 Report states, “The facts of our founding are not partisan. They are a matter of history. Controversies about the meaning of the founding can begin to be resolved by looking at the facts of our nation’s founding.”³⁶ The 1619 Project makes the same argument, albeit in reverse.

The absence of 1619 from mainstream history was intentional. People had made the choice not to teach us the significance of the year. And it followed that many other facts of history had been ignored or suppressed as well. . . .  The histories we learn in school or, more casually, through popular culture, monuments, and political speeches rarely teach us the facts but only certain facts.”³⁷

Both projects signal a concern with historiography. In its assertion that facts must be “properly understood,” the 1776 Commission does so obliquely.³⁸ It clearly relies on an empiricist theory of knowledge whereby facts are neutral and explanations can be derived by simply ordering and cataloging them, without the intervention of a theoretical apparatus. The 1619 Project is explicitly framed as “a considered historiographic intervention.”³⁹ The theory that drives how it orders facts (which are never seen as neutral) is that “slavery and racism lie at the root of ‘nearly everything that has truly made America exceptional.’”⁴⁰ In the face of sharp criticism of the 1619 Project — much of it from scholars on the Left — the American Historical Review defended this interpretive framework as being “laudable, if unexceptional.”⁴¹ The fact that this race reductionist view of American history is indeed unexceptional, particularly among historians who define themselves as liberal, if not radical, is the logical outcome of an academy whose analytical frameworks have been circumscribed by anti-communism in precisely the manner that Hugh Murray described. One of the lesser remarked upon aspects of the victory of anti-communism and the defeat of the Left is the way in which the retreat from political economy has made it so difficult for American intellectuals to deal with racism analytically because of their dogged belief that the virulence of American racism means America is “analytically exceptional.” Historians and sociologists on both the Left and the Right have bought into the view that “elsewhere, classes may have struggled over power and privilege, over oppression and exploitation, over competing senses of justice and right; but in the United States, these were secondary to the great, overarching theme of race.”⁴² When Karl Marx contrasted the sober-minded shopkeeper who was “well able to distinguish between what somebody professes to be and what he really is” with the credulity of historians who “take every epoch at its word and believe that everything it says and imagines about itself is true,” he could easily have been describing the American academy in the twenty-first century.⁴³

One of the most compelling insights of Not So Black and White is that identitarians of left and right are linked by “the same hostility to universalism.”⁴⁴ They both reject Enlightenment ideals, as Malik points out. And they reject class as a universal analytic category, as I have pointed out. Careful reading of the 1776 and 1619 projects reveals yet another universal that they both reject — universal social programs. Despite their intense disagreement about historical dates, eras, and the meanings assigned to them, there is one historical era about which the two projects agree: the Progressive Era and New Deal. The 1776 Commission derides the Progressive Era for having promoted the idea of group rights at the same time they built a massive bureaucracy — a “shadow government” — through which the state abrogated the right to redistribute wealth.⁴⁵ The 1619 Project approvingly cites Ira Katznelson, who likened the New Deal to “affirmative action for white people” and described the federal government of the time as “a commanding instrument of white privilege.”⁴⁶ The 1776 Commission rejects the New Deal and big government because it sees them as a precursor to socialism and the “flawed philosophy” of “allowing the state to seize private property and redistribute wealth as the governing elite sees fit.”⁴⁷ The 1619 Project rejects the New Deal because it is a tool of white supremacy. The two critiques of the New Deal are expressed differently and adopt opposing stances on the state and big government. Nevertheless, both resort to hagiographic accounts of America’s “most cherished values” as a means of promoting a very similar class politics — one that ardently defends wealth and private property.

Both projects profess their fervent desire to see Americans “form a more perfect Union” and live up to the “magnificent ideals upon which we were founded.”⁴⁸ For the 1776 Commission, this means getting the government out of the economy and letting the free market have its way. For the 1619 Project, it means getting the government to intervene in the free market — to make sure that African Americans get their “just rewards.” Both, however, see private property as sacrosanct. The 1619 Project wants students to see that African Americans were America’s “most ardent freedom fighters” and that they “form a legacy of which every American should be proud.”⁴⁹ To do so requires recognizing that “wealth begets wealth, and white Americans have had centuries of government assistance to accumulate wealth, while the government has for the vast history of this country worked against Black Americans’ efforts to do the same.”⁵⁰ The 1776 Commission wants students to “appreciate and cherish” the United States, which means showing respect for “civil rights and private property.”⁵¹ Capitalism, it seems, is the universal ideal about which both sides agree.

We are living in a time when struggles are intensifying over the requisite state policies to ensure renewed capitalist prosperity and stability, on the one hand, and over the distribution of the social surplus to mitigate and manage inequality, on the other. How inequality is understood, in terms of the universality of the class dynamic or the particularity of the racial dynamic, critically impacts how people define the terms and terrain of struggle. It is one dimension of the fight to restore the “radical universalist tradition” that will help us “escape the identitarian trap.”⁵² As Not So Black and White demonstrates, we can begin to free ourselves from the analytical strictures of our obsession with race (Malik likens the phenomenon to Stockholm syndrome) by reclaiming some of the turf we ceded when left-leaning scholars repudiated universalism and the interests of working people in the name of racial justice.

How do we account for this? First and foremost, the American configuration of federalism is narrowly concerned with the distribution or exercise of political power and willfully blind to that of economic power. Politics and policy, in democratic capitalist settings, are fundamentally shaped by two constraints.⁶ A “demand” constraint establishes deference to the growth and profitability of private investment as a baseline or boundary for political action. The market, as Charles Lindblom reminds us, is a prison.⁷ Public policy is confined to securing the conditions under which capital can be accumulated and ensuring that those conditions are not so exploitative as to constitute a threat to the social order. These parameters of compromise manage what Karl Polanyi dubbed “the double movement” inherent in democratic capitalism: the capitalist impulse to commodify everything matched (or at least accompanied) by the democratic impulse to dampen or compensate for the cruelties of the market.⁸

A “resource” constraint, in turn, ensures that well-heeled economic interests will always wield more political power than the votes they cast. Especially in a setting where the regulation of money in politics has largely evaporated, those with money enjoy dramatically lower barriers to influence, information, and collective action.⁹

Federalism exaggerates all of this. In a patchwork of investment-anxious local and state jurisdictions, firms can much more credibly and readily wield the threat of exit — a dynamic underscored by the jurisdictional competition to subsidize new investment and the perpetual hand-wringing in state legislatures over the maintenance of a “friendly business climate.”¹⁰ State legislatures, on this score, are notoriously in thrall to the demands of local employers and labor markets, calibrating their labor and social policies (even ensuring the wholesale exemption of some workers from any protection) to ensure a stable and quiescent labor supply.¹¹ In subnational jurisdictions, the logic of Polanyi’s “double movement” is distorted at both poles: state and local political actors are at once more inclined to defer to the interests and demands of capital and less inclined to contemplate social protections that might prove competitive liabilities.¹² These dynamics are even starker in municipal settings where economic growth and property valuation is the sine qua non of local public policy, where regulatory and taxing powers are constrained by the “home rule” provisions of state law, and where meaningful social protection is beyond the vision or capacity of local policy.¹³

In turn, states do not just replicate the nation-state at a smaller scale or nest neatly inside it. They lack not only the will but the ability to ameliorate market conditions, to sustain equal protection, or to provide robust public goods and services. Policy devolution, in other words, often means lodging political responsibility — quite intentionally and strategically — in jurisdictions without the capacity or inclination to meet them.¹⁴ American federalism (unlike all its international peers) makes no provision for revenue sharing across jurisdictions. The fiscal capacity of state government is relatively weak (most states have self-imposed tax and expenditure limits) and reliant on regressive revenue sources.¹⁵ For their part, local governments are doubly disadvantaged; their ability to raise revenue or incur debt is sharply constrained by state governments, leaving them dependent on volatile sales and property taxes, increasingly meager intergovernmental transfers, or predatory policing and code enforcement.¹⁶ In the delegation of political authority, state and local government is largely organized around “police power” regulation, restraint, and punishment of private conduct.¹⁷ The unsurprising result, at this intersection of narrow political horizons and limited fiscal capacity, is a policy environment in which market deference is matched by meager and punitive social policies.¹⁸

Federalism, in practice, is hostile to productive democratic governance. It works to the benefit of those best positioned to exploit or leverage both jurisdictional competition and the jurisdictional proliferation of political “veto points.” It sustains a “checks and balances” environment for policymaking that is almost all checks. Gridlock, inaction, and the failure to respond to changing conditions favor the status quo.¹⁹ The defense of federalism or the pursuit of decentralization, as Lisa Miller underscores, has become a profoundly anti-statist agenda. The goal is not to find the best venue or jurisdiction for affirmative state action but to quash that prospect altogether. In the states, entrenched interests are uniquely able to “craft political agendas behind the scenes, kill off reform policies before they see the light of day, or create seemingly neutral anti-statist political narratives.”²⁰ In our polarized states, partisan or ideological differences are widened by the administration of policy — which increasingly reinforces political extremism rather than dampening it.²¹

Indeed, as recent work by Miller, Jacob Grumbach, Alex Hertel-Fernandez, and others has documented, state legislatures have become the sweet spot for conservative policy experiments. Growing partisan polarization has yielded gridlock in national politics but a steady increase in one-party “trifecta” control of state politics (in 1992, the Democrats claimed trifecta control in sixteen states, the Republicans just three; in 2018, the Democrat claimed eight trifectas and the Republicans twenty-six). This has afforded national conservative interests (including partisan groups like the Republican Governors Association, multi-issue clearinghouses like the American Legislative Exchange Council, and single-issue lobbies like National Right to Life) the opportunity to capture state policymaking and to use the states to shop even the most odious and unpopular policy ideas. Republican statehouses play right along, not only embracing such policies but (as in the post-Dobbs abortion debate) competing with one another to see who can come up with the most craven and punitive version.²² The cynical backlash against “woke” curricula and diversity programming, in the bargain, serves as a potent reminder of the racial animus at the core of our fragmented politics.

Taken together, partisan polarization, institutional racism, and jurisdictional venue shopping by conservative interests turn the democratic pretensions of federalism on their head. State policy decisions, as the struggle to expand Medicaid in laggard states suggests, are increasingly divorced from what citizens want or need.²³ By any measure, state policy is increasingly unresponsive and unaccountable. While elites navigate or manipulate the federal system to their advantage, ordinary citizens are left in a jurisdictional and informational fog — unable to translate local organization or aspirations into effective political demands.²⁴ The pursuit of decentralization as a conservative political project is laid bare by the fondness of these same state governments for preempting city or county initiatives — on issues such as labor standards or gun control — when they do succeed.²⁵

State politicians, for their part, understand perfectly well that their policies fly in the face of popular representation or aspirations. This is why their agenda is routinely accompanied by constraints on political participation. The reign of Jim Crow rested on terror, intimidation, and the systematic disenfranchisement of African Americans.²⁶ Indeed, across our history, the national government has confronted tyranny in the states — not the other way around.²⁷ In our own time, deference to plutocrats and zealots is made possible and permanent by stifling the voices of everyone else. As of January this year, thirty-two states have introduced legislation that would make it harder to register to vote, vote, or even remain on the voter rolls.²⁸ This is not about wrestling power from “big government”; it is about pursing power in whatever jurisdiction best serves your interests and locking it down by defanging or demobilizing the opposition.²⁹

The notion that American federalism is (or can be) a boon to democracy, in short, rests on a long list of elusive conditions. It assumes that the democratic institutions of democratic capitalism are unaffected by its capitalist interests; that states only compete above a high and stable floor of national standards or rights; that the racial premises of fragmented rule are all in the past; that subnational units of government have fiscal and political capacities commensurate with their responsibilities; that state innovation is rigorously assessed or benchmarked; and that decentralization is narrowly concerned with the scale of government authority and not a thinly veiled attack on the very legitimacy of government authority.³⁰ None of these conditions hold, ensuring that federalism remains an open institutional invitation to interests on the Right and a fundamental institutional obstacle to those on the Left.

The limits and dangers of federated rule are evident across the policy landscape. Consider economic development. Observers, and even those engaged in the practice, have long recognized state or municipal competition for new investment as a pointless game of musical chairs. States attract new businesses only by pirating them from another state or entering a bidding war that compels them to offer such steep subsidies that the prize for entering the fray is almost entirely lost. Tax incentives do not conjure up jobs or investment that would not otherwise exist; they just move them around. Amazon alone has claimed over $6 billion in public subsidies from states and localities since 2000 — a price tag that has not yielded one forklift or warehouse that the company would not have provided on its own dime.³¹ This “economic war among the states” is entirely an artifact of federalism and its tendency to gird business power with both an exit threat and an entrance ransom. It comes at the expense of public goods (the biggest share of local abatements are usually revenues that would otherwise go to schools) and often of labor standards (little effort is made to ensure that subsidized firms pay fair wages or respect labor rights).³²

Consider labor law and policy. As democratic capitalism tends to generalize the interests of capital (what’s good for General Motors, et cetera), it also minimizes or undermines the interests of working people. This is true within states, where the disproportionate political clout of employers has yielded a long and dismal history of anti-labor repression and violence.³³ And it is true across states, where labor laws and labor standards vary dramatically by region and jurisdiction.³⁴ Fragmented organization and regulation nurtured divisions among workers (most starkly along racial lines) and wide state-to-state and regional disparities in the social wage.³⁵ The uniform, expansive, and national right to collective bargaining in the United States lasted barely a decade — from the passage of the Wagner Act in 1935 (which was explicitly designed to erase regional disparities in labor law and policy) to the passage of Taft-Hartley in 1947 — which invited states to check worker power in the private sector by passing “right-to-work” laws.³⁶ Right-to-work regimes, in turn, have dampened wages, slowed new organizing, and yielded wide regional and state gaps in union membership: private sector union density today ranges from 1.4 percent (South Carolina) to 14.1 percent (Hawaii). Public sector labor law enjoyed no flirtation with national standards and remained firmly rooted in the states, where disparate laws have also yielded disparate protection: public sector union density in the states ranges from 6.7 percent (South Carolina again) to 68.4 percent (Connecticut).³⁷

Federalism fractures not just the regulation of labor relations but the organization, structure, and solidarity of the labor movement itself. The exceptional and debilitating fragmentation of the American labor movement rests in large part on its roots in disparate state settings and on the absence of any sustained peak bargaining — both consequences of federated politics. Jurisdictional silos of solidarity, as Joel Rogers has argued, have invited calculated division, often pitting workers and their organizations against each other.³⁸ The class bias of American federalism, in turn, has sustained an unrelenting regime of authoritarian rule in American workplaces, simultaneously exploiting workers and heightening the risk of pushing back. “Most workplace governments in the United States are dictatorships,” Elizabeth Anderson notes, “in which bosses govern in ways that are largely unaccountable to those who are governed. They don’t merely govern workers; they dominate them.” ³⁹ And the damage done at work spills into public life. Federalism weakens union power and voice at the bargaining table and in politics, a fact explicitly recognized and exploited by the attack on public sector unions in recent years.⁴⁰ Without a strong labor voice in politics, fragmented anti-statism prevails, the basic elements of social protection wither, and the political and economic gaps between the ruling class and everyone else widen.⁴¹

Consider social policy.⁴² The American safety net is designed to undermine social citizenship and frustrate equal protection. Deference to states — including not only control over needs standards, eligibility, and benefit levels but sweeping occupational exemptions — was hardwired into the New Deal welfare state.⁴³ From the outset, national standards, let alone any commitment to universality, has been thin, and states have been inclined to exercise their considerable discretion in ways that “divide citizenship” and “fragment democracy.”⁴⁴ The inevitable consequence is wide state-to-state disparities in the responsiveness, inclusion, and generosity of our social policies. Cash assistance for poor families is meager everywhere: even the most generous states offer less than $700 per month and reach fewer than half of eligible families; the stingiest offer less than $200 per month and reach fewer than one in ten poor families. In unemployment insurance, states set the level of benefits, their duration, and a whole host of “non-monetary” eligibility criteria — and state variation on all three has been widened by conservative backlash to the “generosity” of supplemental federal programs during the Great Recession and the COVID-19 pandemic.⁴⁵ The average compensation for the same spell of unemployment (a measure that captures variation in benefits and duration) ranges from about $8,000 in the most generous states to less than $3,000 in the stingiest.⁴⁶

This uneven unwillingness to cushion citizens from market uncertainty is rooted in federalism’s deference to state and local labor markets. This not only hardens the “principle of less eligibility” (the determination that public assistance should never compete with private wages) but infuses social policy with the expectation or qualification of labor force participation. Work shapes access to the “private welfare state” of job-based benefits (especially health insurance and pensions).⁴⁷ It tiers access to social insurance programs like social security.⁴⁸ And it increasingly conditions receipt of means-tested assistance — a punitive commitment to “workfare” rooted in state discretion and experimentation.⁴⁹ In turn, meager social policies are a quite intentional consequence of self-imposed fiscal constraints. Even when the costs are very small, state legislators are quick to justify cuts by manufacturing anxiety over their public or private burden. Strangling access to unemployment insurance and workers’ compensation is premised on both forcing the jobless or injured back into the labor force and (not incidentally) ensuring that taxes on employers are kept low.⁵⁰

In every arena of policy, the logic of American federalism — evident in its motivation and in its persistence — is irretrievably racial. It represents a commitment to local discretion and to anti-statism that is animated by systematic concessions to racialized labor markets and a profoundly even commitment to equal protection.⁵¹ The New Deal welfare state, as the NAACP’s Charles Hamilton Houston noted bitterly at its passage, seemed little better than a “sieve with the holes just big enough for the majority of Negroes to fall through.”⁵² Since then, state discretion, either in the design and administration of basic social programs or in the decision to adopt them at all, has been a reliable engine of racial discrimination and racial disparities. The legitimacy and generosity of state social policy is tightly and inversely tethered to the share of immigrants and people of color in the local population, or their share among program recipients.⁵³ Seven of the ten states that have not expanded Medicaid are in the Deep South, and more than half of the non-elderly adults left uncovered are black or Latino.⁵⁴ For African Americans especially, all of this creates and sustains compounding tiers of disadvantage: residential and occupational segregation throttle access to the private welfare state; public programs meant to narrow that disparity — in which states enjoy wide discretion — instead widen it.

The organizational and political weaknesses of federalism were laid bare by the COVID-19 crisis.⁵⁵ Effective public health policy, like civil rights, depends upon robust national standards, common purpose, and nimble enforcement or administration. Instead, in the face of fragmented responsibility and the callous ineptitude of the Trump administration, states crafted their own inconsistent and idiosyncratic policies on social distancing, school closures, definitions of “essential” business, and “gating criteria” for reopening state economies. “Even the basic question of where the problem was most serious and how fast it was spreading,” Donald Kettl underscores, “was impossible to answer because there was no common language for charting the problem.” States tested and reported test results (or neglected to report test results) with bewildering variety.⁵⁶ Delegated the task of vaccination, states adopted an array of criteria that had them “increasingly diverging from CDC guidance and from each other,” a Kaiser Family Foundation summary of state plans concluded, “suggesting that access to COVID-19 vaccines in these first months of the U.S. vaccine campaign may depend a great deal on where one lives.”⁵⁷

The issue here, regarding protection from both the virus and its economic fallout, was not federalism per se but the uncooperative, transactional, market-deferential, and deeply partisan federalism that now prevails in the United States. Nowhere in subnational policymaking was there a discernible hint of the local responsiveness or benchmarked innovation that are supposedly the virtues of decentralized governance. Instead, state decisions were driven largely by petty partisan standoffs over the most mundane public health guidelines, by willful confusion and misinformation, and by growing fiscal anxieties. As the pandemic dragged on, states proved less innovative and less responsive, instead settling into well-worn political and policy grooves.⁵⁸

In turn, the cumulative consequences of fragmented social policy left Americans uniquely exposed to both the virus and to the COVID-related recession. The United States “stands alone in its failure to provide universal health insurance, general cash assistance to the poor, and entitlement to childcare subsidies, among others,” as one post-pandemic survey put it. “Its patchwork of social assistance varies greatly across states, and often within states, leaving many Americans unprotected and vulnerable in periods of economic upheaval.”⁵⁹ Disparate policy commitments (on public health, on labor standards, on paid leave, on Medicaid expansion) meant health and economic risks fell unevenly across states and populations. Federated labor and social policies fragmented health coverage and tied it to private employment, meaning that, when a public health crisis precipitated a recession, health security effectively evaporated when it was most needed.⁶⁰ Because existing vulnerabilities — in labor markets, in access to health care, in the social determinants of health — were deeply racialized, so too were the ravages of the virus.⁶¹

Even where social policy innovations did make a difference, they underscored the folly of federated risk and protection. The temporary generosity of the CARES Act’s unemployment programs was a concession to both the gravity of the jobs crisis and the inability of state unemployment insurance systems to process (let alone fund) the avalanche of claims.⁶² As the pandemic wore on, anxieties about state labor markets grew, and in the summer of 2021, twenty-six states cut short the supplemental federal benefits — a largely political decision that yielded little but renewed economic insecurity.⁶³ The meager and short-lived paid leave provisions of the Families First Coronavirus Response Act, by the same token, underscored the inefficiency and unfairness of delegating such basic social protections to private whim and state-by-state policy innovation.⁶⁴ To fulfill the Centers for Disease Control and Prevention’s national moratorium on evictions, states and local housing programs — even those funded with federal dollars — offered a frayed patchwork of relief.⁶⁵ For a fleeting moment, national policies rendered existing social programs more generous and more universal and crafted new ones to fill in some of the gaps. On every score, these marked an effort to overcome fragmented state provision; on every score, states led the push to dismantle the effort at the first opportunity.⁶⁶

The culprits in this litany of failure are many, and they include labor market precarity, a tattered safety net, systemic racism, and yawning gaps in public and private health provision. But a consistent coconspirator, bearing substantial responsibility for these conditions and for exacerbating their consequences, is American federalism. That institutional framework, and the choices that underly it, is not (as it is so often portrayed) a means of balancing liberty and security, or equity and efficiency. And it is certainly not, in our historical or current experience, a reliable mechanism for responsive and effective public policy.

This is hardly surprising. From its inception, our federal system was designed to protect private interests and dampen popular representation. Aspirational excerpts from the founding debates over state and federal responsibility cannot disguise the fact that our political institutions were crafted first and foremost to protect property. Going forward, the distribution of political responsibility across jurisdictions, the broad discretion afforded state governments under even putatively federal programs, and the reliable deference of state legislators to local economic interests, accomplished just that. At every turn, federalism has strengthened capital and weakened working-class interests. Its institutional architecture has made it easier for employers to make and win political demands; its fragmented politics and policy have made it harder — and riskier — for workers to do the same.

Our history is punctuated by moments — the labor upheaval of the 1930s, the civil rights movement of the 1960s — when social movements pushed policies in another direction. Tellingly, local organizing in those struggles consistently and explicitly fought for national solutions to problems rooted in the innate and structural conservatism of state and local politics.⁶⁷ They took aim at both the agents of exploitation (the bosses, the segregationists) and the political fiefdoms that made that exploitation possible. Progressive causes and progressive triumphs, as Lisa Miller underscores, have almost always been about overcoming federalism.⁶⁸

This same logic is central to our current moment. Conservatives in national politics do little more than flail at the “overreach” or “weaponization” of national political institutions. More than ever, state politics are the refuge of scoundrels and extremists. This is not to say that progressive gains in state politics (the recent repeal of right-to-work laws in Michigan is a good example) are impossible, but they are scattered and woefully insufficient to the challenges we face. The willingness and ability of some states to advance some progressive policies testifies not to the promise of federalism but to the abject failure of national politics and national solutions (a $12 or $15 minimum wage, after all, is just where we would be if national labor standards were indexed to inflation). State-level solutions will always be insufficient and fragile, the gains for citizens in some states always accompanied by losses in others and by widening state-to-state disparities.

This assessment is not meant to condemn any political system that distributes responsibility among national and subnational units of governance; it is meant to underscore that the conditions and thresholds for making such a system work — including high national standards and robust local political and fiscal capacity — have proven impossible to achieve or sustain in the American context. “Federalism,” Aaron Wildavsky concluded bluntly in 1985, “means inequality.”⁶⁹ That inequality does not, as champions of federalism would have it, reflect a diversity of democratically determined local values and policy priorities. It is, like any other inequality, a product of exclusion and exploitation. By design and in practice, American federalism fragments political, economic, and social citizenship. It allows accidents of birth to stratify opportunity and protection. It makes it harder for democracy to rein in capitalism, let alone wrestle it in a new direction.

The most famous event in civil rights history was the March on Washington for Jobs and Freedom. The freedom part seems obvious, but of the myriad economic issues facing black America in the 1960s, how did jobs come out on top? Why not housing to upgrade the 9.3 million housing units that the 1960 census declared “seriously deficient”?¹³ Why not health care to aid the 60 percent of hospital patients in the lowest income groups who had no insurance?¹⁴ Or why not education to call back to the Supreme Court case that inaugurated the modern civil rights movement?

The simple reason that jobs won out is that the March on Washington was organized by Randolph and Rustin. For the two socialists, jobs — or as they often preferred, “full employment” — was the crucial addition to civil rights: the latter would mean formal equality, but only the achievement of the former could produce substantive equality. At the time, agricultural work in the South had become increasingly mechanized, and manufacturing was leaving Northern cities just as millions of black workers were entering them. Without decent jobs, racial tension between white and black workers over basic material issues was bound to grow.¹⁵ And without the ability to gain economic independence, the formal independence granted by civil rights legislation would ring hollow. Indeed, with the passage of the Civil Rights Act of 1964 and the Voting Rights Act of 1965, that is precisely what both Randolph and Rustin saw happening in urban riots. The promise of civil rights legislation in contrast to the daily indignities and material deprivations in urban areas was received as an insult: in Rustin’s words, “To the urban underclass, the civil rights revolution of which they had heard so much was a frustrating reminder of the plight of their daily lives.”¹⁶

For Rustin, full employment unlocked the entire economic situation.

The key  . . .  is decent jobs. It is easy to lose sight of this amid all the sociological jargon which tends to project a hundred different problems where one multifaceted problem exists. Some people say that housing is key — as if there were no connection between the snail’s pace of housing construction and unemployment in the construction industry. Others point to education — as if the 750,000 new classroom units we need over the next 10 years can be built without manpower, or as if reducing the teacher’s load by hiring teacher’s aides had no meaning for the unemployed in the ghetto. Still others point to family instability — as if one could not point to direct statistical correlation between family instability and male unemployment rates.¹⁷

Dealing with economic factors in general was important, but jobs for all was the demand that united them. And in a situation where the private sector was not providing enough jobs, public jobs programs had to be the answer, as they were in the New Deal. Rustin even explicitly characterized the Freedom Budget as a New Deal for black America, to be backed by a league of organizations with the vision and heft of the Congress of Industrial Organizations:

The CIO had to organize itself but it did so under circumstances of Federal intervention which made the momentous task easier to perform. Negroes have to organize themselves. And the Freedom Budget, which is their New Deal thirty years late (but better late than never) will not simply provide full and fair employment and lay the basis for the destruction of the physical environment of poverty. Like the Wagner Act and the social investments of the New Deal, it should also evoke a new Psychology, a new militance and sense of dignity, among millions of Negroes who will see something more concrete and specific than a promise of eventual freedom.¹⁸

Part of this “new Psychology” was an enlarged class consciousness: in joining as full-fledged members of the proletariat, black workers would gain a new understanding of themselves as American workers.

The difficulty, of course, was that, unlike in the era of the New Deal, the crisis of black poverty stood in sharp contrast to the general prosperity of the ’60s. New Deal public jobs programs were a response to a deep and widespread economic crisis, and the political will to experiment with them was forced partially by a new upsurge in working-class militancy. Working families that had settled into the suburban middle classes were not about to recreate 1934. Randolph and Rustin faced the uphill task of both translating events like the Watts riots into general social urgency and amassing the popular pressure required to force the hands of politicians and resistant business interests.

Winning New Deal–style jobs programs was thus always going to be a Herculean task, but of the goal itself, Rustin and Randolph were certain. Full employment would lessen racial tension, alleviate the material deprivation undergirding urban riots, complement the formal freedom of civil rights legislation with a substantive freedom, improve housing, education, and health care, and, most important, lead to the possibility of greater political power in creating the conditions “for the black lumpenproletariat to become a proletariat.”¹⁹ “Jobs” was the demand.

And its relevance has not lessened in the present. Public jobs programs are needed today not only to repair American infrastructure and carry forward much-needed climate mitigation and adaptation work, but also to transform the economies of impoverished areas and provide security for poor and working-class people. Such full-employment policies would also weaken the economic drivers of injustices in contemporary policing and the carceral system by mitigating the conditions that these systems are intended to manage. As they were for Randolph and Rustin, jobs are still a necessary prerequisite for increased freedom today.

The March on Washington did more than impress upon Randolph and Rustin that the jobs demand was the right one to prioritize. It also demonstrated the power of the coalition of civil rights organizations, labor unions, and religious groups that brought the march to fruition. Their faith in that “Coalition of Conscience” (United Auto Workers president Walter Reuther’s phrase) was maintained through the introduction of the Freedom Budget, which Randolph framed in a speech from October 1966 as an effort “to undertake the redemption and completion of the goals set forth on that historic day in August of 1963.”²⁰

In Randolph and Rustin’s shared analysis, Cold War politics had created a certain opening for the pursuit of civil rights, as the state of race relations was an embarrassment to many in the ruling class.²¹ Black protest in the South spoke to this embarrassment, and as Rustin reflected years later, that protest and the white violence it elicited, amplified through the television medium, “aroused the conscience of the nation” and conferred on the civil rights movement a “moral authority.”²² No such strategic opening existed for the civil rights movement to “expand its vision beyond race relations to economic relations,” as Rustin urged it to do in his February 1965 article “From Protest to Politics.” Thus, the fundamental task after the passage of the Civil Rights and Voting Rights acts was the less media-friendly and more plodding work of building “a coalition of progressive forces” into “the effective political majority in the United States.”²³

For the civil rights organizations themselves, this meant turning away from what had been a strategic vanguardism in the early phases of the movement (but which was turning increasingly into an unstrategic vanguardism — see the following section for more) and toward building representative mass membership organizations. In the early phases of the civil rights movement, younger organizations like the Student Nonviolent Coordinating Committee (SNCC) and the Congress of Racial Equality (CORE) were the tip of the spear, but they were also, in Rustin’s estimation, essentially majoritarian in orientation — not because they spoke to a preexisting majority that opposed segregation but because they sought that majority and eventually won it over. If they wished to keep that majoritarian orientation in a new phase of struggle, they needed to develop the kind of representative structures that would allow them to speak and act on behalf of a defined constituency.

Rustin’s evolving attitude toward the NAACP represented the flip side of this coin. Before 1963, both his political sympathies and personal ties lay with organizations like SNCC and CORE, while his relationship with NAACP director Roy Wilkins, who often viewed protest actions with a great deal of suspicion, was rather ambivalent. In 1970, by contrast, he praised the NAACP for being the one “national organization in the black community.”

It is the only black organization which organizes almost a half million dues paying members and which collects almost five million dollars exclusively from black people. The Urban League does not get its money from black people; SCLC [Southern Christian Leadership Conference] does not get its money from black people; CORE never got its money from black people. And yet today, the one organization which is never discussed is the NAACP.²⁴

Despite his disagreements with Wilkins, Rustin recognized the NAACP as an actual representative institution with lists of dues-paying members invested in the organization, and his belated praise expresses lament over the course that the younger civil rights groups took.²⁵

Rustin and Randolph also urged the civil rights organizations, in addition to building themselves up internally, to avoid “going it alone” and to partner with their natural allies in the labor movement. As Rustin wrote in a pamphlet on right-to-work laws in 1967:

Labor and minority groups have been where the real action is — the bullets, the dogs, the lynch-ropes, the billy clubs, blood dripping down through the leaves of the trees, and blood running out of the open shop. This makes us brothers not only under the skin, but also brothers in blood, in sweat, and in tears, all shed in the service of making America safe for democracy. It is to the credit of the American labor movement, and a challenge to its treatment of the Negro in the future, that I cannot make that statement about any other institution in America.²⁶

At the time, many on the Left thought the proposal of a civil rights–labor coalition, while nice and sensible in theory, was a dead letter in practice given the bureaucratization of labor. New Politics editor Julius Jacobson argued that while unions are a “potential force for democracy,” in the United States “the radical young has good reason to feel that Big Labor is as venal as most other institutions of the American Establishment.” The AFL-CIO, in his view, was “committed to racial equality in a most general way” and on “paper and in resolutions” only.²⁷ In a Dissent article from 1966, Paul Jacobs agreed, saying “it would be foolish for radicals to expect much more from the unions than a kind of generalized support for anti-poverty programs” and civil rights.²⁸ Black Power organizations were even more hostile to the labor movement than New Leftists: CORE began collaborating with the National Right to Work Committee to set up the Black Workers Alliance, and SNCC believed “that one of the major roadblocks to the freedom of black people is the labor movement as it is presently constructed.”²⁹

Such criticism and hostility must have bordered on amusing to Randolph, who knew perhaps better than anyone in the country the extent and depth of discrimination and bureaucratization in American trade unions.³⁰ He was nonetheless at the forefront of advocating a civil rights–labor coalition, because his essential question here was not “Are unions good?” but rather “Will they be allies in accomplishing the task at hand?” And since the task was full employment, the answer was a clear yes, not for moral reasons but because the goal was in organized labor’s naked self-interest and because of the industrial power labor could bring to bear.

Both Randolph and Rustin repeatedly emphasized that unions were unquestionably beneficial institutions for black workers, who were disproportionately more likely to be union members than their white counterparts. They also invariably added that “the legislative program of the trade-union movement can go a long way toward satisfying the economic needs of the larger black community.”³¹ Indeed, at a certain point in the mid-’60s, Randolph and Rustin believed that the civil rights movement should simply adopt the political program of the AFL-CIO — again, not because it or its member unions were model organizations (they were not) but because their political priorities, including full employment and the repeal of Section 14(b) of Taft-Hartley, were now also those of the civil rights movement.³² Even in the midst of a 1961 spat with George Meany, when Randolph spoke of “this strained Negro-labor relation,” he still clearly understood the stakes: “Since the Negro community and the labor community have common interests and common enemies and should have common objectives, this crisis of confidence between these basic communities constitutes a grave danger to the cause of the Negro and labor.”³³

There were also positive examples of meaningful collaboration.³⁴ California’s Fair Employment Practices Act of 1959 was made possible by a coalition of labor and civil rights leaders, and that alliance had been instrumental in beating back right-to-work laws in other states.³⁵ Though the AFL-CIO did not officially sponsor the 1963 March on Washington (an ongoing embarrassment for Meany), labor did substantially support the event. The loudspeaker tab at the Lincoln Memorial of $16,000, for instance, was picked up by the United Auto Workers and the International Ladies’ Garment Workers’ Union.³⁶ After the march, the AFL-CIO’s Civil Rights Department, armed with a much larger lobbying team than any of the key civil rights organizations, was instrumental in pushing federal civil rights legislation.

That said, Randolph and Rustin understood that this was an alliance that had to be forged and reinforced, that it was not waiting there to be mobilized but could be solidified in the process of struggle.³⁷ Randolph averred that the postwar trajectory of the labor movement toward being “richer in body and poorer in spirit” had to be reversed.³⁸ Rustin wrote:

I think that the Freedom Budget can provide the contest in which unity would not only be possible but imperative. When for instance, the International Brotherhood of Electrical Workers (Local 3) won a reduction in the work week in New York under the leadership of Harry Van Arsdale, 300 of the 1000 new apprenticeship openings went to Negroes. The Freedom Budget would open up jobs on a much vaster scale. Instead of competition between black and white workers for scarce jobs under conditions of high unemployment rates, the threat of automation, or both, there would be a joint self-interest in both integrating and unionizing the new employment. Under such conditions, the current Negro-labor alliance on questions like the repeal of Section 14B of the Taft Hartley, the extension of minimum coverage and increase in benefits, etc., would become that much more meaningful and dynamic.³⁹

Again, there was probably no one more qualified to speak to organized labor’s bureaucratization and discriminatory practices than A. Philip Randolph, but he and Rustin understood that coalition politics is not based on mutual affection but mutual interest, and also that the proposed coalition had to be solidified, not taken for granted. This was a new phase for the civil rights movement, and they hoped, in turn, that the sparks ignited in bringing together disparate groups in coalition would reignite the fighting spirit of labor. “United in a powerful Coalition of Conscience,” wrote Randolph, “the cause of civil rights and labor’s rights can and will prevail; without it, the future is uncertain.”⁴⁰

Today there is a lingering New Left suspicion of existing trade unions as burdensome and regressive, perhaps even in some cases imbricated with “histories of racism and colonial dispossession” in such a way as to make them essentially compromised.⁴¹ Theoretical discussions of class and race spill over into assumed division between the aims of labor and racial justice — thus the prominent emphasis, in the wake of the George Floyd uprising, on the development of internal education programs for union members around implicit bias and racial capitalism.⁴² Randolph and Rustin always understood, as organizers do, the potential antagonism between different interests within any particular coalition, but they also asserted the essential bond in “the cause of civil rights and labor’s rights” and that unity around that cause had to be carefully and patiently forged in a common political project. To abandon that work meant not only a precarious future for both labor and civil rights; it also meant a descent into the insidious realm of frustration politics.

A famous sign from the March on Washington read “Civil Rights Plus Full Employment Equals Freedom.” It was a precise formula and, unsurprisingly, Randolph’s suggestion. Freedom was the sum of the two. After the de jure fight for civil rights was won with the Civil Rights and Voting Rights acts, the movement had to turn to the task of achieving full employment, without which freedom would remain but a promise. The “Jobs and Freedom” slogan might thus be reread as “Jobs and then Freedom.”

Everywhere around them, however, Randolph and Rustin saw activists wanting to shortcut around the part about jobs (and the coalition strategy needed to win this demand) and get directly to the part about freedom. To them, both Black Power and the New Left, finding the United States to be rotten to the core, had given up on the formulation of a concrete and achievable political program and were turning to increasingly odd insurrectionary fantasies and localist experiments that did not in any way alter the fundamental structures of capitalist society. For Rustin, the varied retreats to communes, drug subcultures, armed revolutionary cells, and “community control” all followed from a more basic pessimism about the possibility of actual structural transformation in the United States. In this, the new radicals were in unwitting agreement with conservatives and the regressing liberal establishment that nothing about American society would ever really change; in Rustin’s words, “those  . . .  who reject America with hate [are] in unconscious coalition with the worst and most reactionary elements in this country.”⁴³

Having renounced progressive and concrete solutions to America’s ills, these new formations also advocated tactics that Randolph and Rustin found counterproductive and in some cases morally offensive.⁴⁴ Advocating violence, burning flags and draft cards, and praising the Vietcong were all tactics that they felt would turn the public away from the causes of civil rights and pacifism. In this, they perceived the new forms of protest as almost diametrically opposed to those employed in the early civil rights movement and worried that protest itself was being corrupted to reinforce a purity politics that increasingly hindered progressive reform. As Rustin wrote,

Genuine radicalism  . . .  is not measured by how loud and abusively one can shout or by the purity and beauty of one’s rhetoric. Rather, genuine radicalism seeks fundamental change through concerted, intelligent and long-range commitment. . . .  Obviously there is much wrong with the trade union movement; obviously there is much wrong with black people in the United States; obviously there is much wrong with white liberals; obviously wherever we look we can find fault. But the only result of endless fault-finding is that you end up in a corner with the few people who are as good and pure as you are. It renders impossible the building of a political movement capable of directing its attention to the most basic task of all — the redistribution of wealth. . . .  Those self-appointed spokesmen who raise divisive issues to prove the superiority of their politics are not really radical. By confusing and distracting from the real sources of social change, they retard the struggle for equality and justice.⁴⁵

Rustin was a vocal critic of these new tendencies, undoubtedly a key reason why he is remembered today on the Left with such ambivalence. (Randolph was even more dismissive than Rustin, but curiously he is not remembered so tragically.) But it is important to couch the criticism here within the Jobs and Freedom Strategy rather than see it simply as divisive complaining. The new ideologies of the mid-’60s were not just different tendencies in the left ecosystem; they were often opposed — philosophically, methodologically, and in a fairly absolute sense — to what Rustin and Randolph were trying to do.⁴⁶ The younger “radicals” could not help but see these criticisms as the tired chidings of old men, but Rustin and Randolph were clear throughout that what they diagnosed in the new frustration politics and its “go-it-alone” methods was a fundamentally conservative move that would in turn prompt a political regression among white liberals and a backlash from the Right.⁴⁷ This internal fracturing and damage, as well as the misguided effort of “seeking refuge in psychological solutions to social questions,” was understandably of primary concern. “This coalition can only be destroyed if we destroy it from within,” wrote Rustin.⁴⁸

Rustin in particular could paint with a broad brush when it came to his criticisms of “the young and alienated”; to accept his views whole cloth would not be so different from accepting the story about Rustin and Randolph selling out after 1963. The important point for my purposes is that they diagnosed a perfectly understandable reaction to the political impasses of the 1960s, one that prioritized immediacy and radical tactics out of a belief in the need for total revolution but was hampered by a desire to circumvent the present. “There is always the danger that the felt need deriving from a perception of fundamental and historic injustices will conflict with the required political strategy,” wrote Rustin in 1969.⁴⁹

Both Rustin and Randolph, of course, understood well that felt need and the corresponding allure of social analysis that dismissed the United States as “unreconstructably racist.”⁵⁰ Indeed, in many speeches and articles in the late ’60s and early ’70s, Rustin tried to lay out clearly the “anatomy of frustration” behind the new attitudes, how they were perfectly understandable in themselves, but how acting on them was not only politically counterproductive but also confused regarding the experience of black Americans as a whole, which had more to do with everyday material concerns than an encounter with “structural racism.”⁵¹ As Adolph Reed Jr has recently argued, this analysis applies today no less than it did then:

Unlike Rustin’s matter-of-fact, real-time observation regarding the impact of the legislative victories, Black Power ideologues then and other race-reductionists since have rejected political analysis anchored by historical specificity in favor of an abstract idealism in which there is no meaningful or authentic political differentiation among black Americans, and race/racism exhausts the totality of black political life.⁵²

For Rustin and Reed both, frustration politics flattens entire populations and constituencies in ways that minimize the broad and shared concerns of most people within them. To the extent that this “abstract idealism” reigns in political spaces (an effect, indeed, of the lack of representative, membership-based organizations that Randolph and Rustin called for), we are left “operating at high moral dudgeon [rather] than in engaging strategically and taking account of nuances of disagreement.”⁵³

To sum up these first three sections, Randolph and Rustin believed that (1) the civil rights movement of the mid-’60s should push above all for public jobs programs by (2) strengthening the coalition that backed the 1963 March on Washington (and in particular solidifying its relationship to organized labor) while (3) rejecting the new frustration politics and its attendant dangers for the movement. This was the core of the Jobs and Freedom Strategy, the positive vision behind much of their thinking at the time and a strategy that still bears much relevance to the present. Before I draw out that relevance in the final section, I will, in the next, recount why the Jobs and Freedom Strategy failed in the form of the short-lived Freedom Budget campaign.

I have distinguished the Jobs and Freedom Strategy from the Freedom Budget campaign here because the latter was, tragically, a slow-moving disaster in a moment of jarring political tumult. In its early stages, it was conceived as an inside job: a task for Lyndon B. Johnson’s willing administration to carry out as part of its comprehensive civil rights agenda. The Freedom Budget was announced by Randolph at the November 1965 planning conference for the 1966 White House Conference on Civil Rights, “To Fulfill These Rights.” Randolph’s claim there that solving the economic problems of urban areas would require a $100 billion investment apparently sent President Johnson “through the roof.”⁵⁴ In February 1964, Secretary of Labor W. Willard Wirtz had proposed a $5 billion jobs program, financed by a cigarette tax, to which Johnson “didn’t even bother to respond.”⁵⁵ According to Adam Yarmolinsky, the War on Poverty planners debated early on “whether to concentrate on creating jobs for people, preparing jobs for people, or preparing people for jobs,” and they “decided for the latter.”⁵⁶ If Johnson found the idea of spending $5 billion on his own secretary of labor’s jobs program too ridiculous to even respond to, one can only imagine what he thought of Randolph’s $100 billion “Marshall Plan  . . .  to invest in massive public works.”⁵⁷

The inside route was thus always blocked to them, but that did not stop Rustin from spending most of 1966 making grand designs in the sand. The A. Philip Randolph Institute engaged economist Leon Keyserling to draw up plans for what would eventually become an eighty-eight-page technical document outlining a radically transformed federal budget. The process of its formulation was so bogged down in revision, attention to spurious detail, and a desire to get the right list of individual (rather than organizational) sponsors that the document was not even ready to present at the June 1966 White House conference; it would eventually be released in October of that year, and the “popular” twenty-page version would not come out until February 1967.⁵⁸ Just as importantly, jobs became one issue among many as the Randolph Institute took upon itself the task of commenting on just about every facet of American life.

By the official launch of the Freedom Budget on October 24, 1966 — as David P. Stein notes, “four days after the end of the legislative session for the 89th Congress — the Congress that had passed so many important pieces of legislation” — Rustin and Randolph should have jettisoned anything but a clear, popular orientation.⁵⁹ After belatedly coming to terms with the fact that the White House was no longer returning their calls, they did put together an organizing plan, one which involved the creation of Freedom Budget committees around the country that drew their members from churches, youth groups (specifically the Young People’s Socialist League and the United States Youth Council), civil rights organizations, and trade union locals — in short, the elements of the coalition they sought.

Such committees were established in Philadelphia, Pittsburgh, Sacramento, and Boston by March 1967, though it’s unclear that they did much beyond educational meetings and small-scale voter registration.⁶⁰ By October 1967, Keyserling was complaining to Rustin that “the army of supporters for the Freedom Budget  . . .  seems to be vanishing [into] thin air.”⁶¹ No doubt the organizing component of the campaign was a far cry from the barnstorming of the 1941 March on Washington movement or the gargantuan effort of the 1963 march, but for reasons covered below, it is not clear that Rustin could have patched together an army of activists even if the on-the-ground effort were more inspiring.

As if this all weren’t enough, they decided to release the Freedom Budget, at Keyserling’s urging, with an agnostic position on the Vietnam War. The proposal of a full federal budget (rather than a jobs program) naturally raised the question of revenue generation at a time of war escalation. Rather than go with their consciences (both Randolph and Rustin personally opposed the war) and propose the funding of their social spending through a lowering of defense spending, they argued that their plan could be carried out regardless of what happened in Vietnam. Freedom Budget materials expressed no support for the war, but it was not a time for nuance. Economist Seymour Melman concluded that it was a “war budget.”⁶² SNCC chairman Stokely Carmichael agreed: “To ask for part of the Freedom Budget is to ask for the continuance of the war in Vietnam.”⁶³ Students for a Democratic Society’s Michael Kazin said it was “welfarism at home and imperialism abroad.”⁶⁴ Organizing in the face of these accusations was a more or less impossible task, and Freedom Budget committee meetings were marred by open dissent to the budget’s basics.

For all of these reasons, the Freedom Budget campaign itself was nothing very inspiring: it had misplaced trust in the Johnson administration in the early phases, rolled out a more academic than popular document (and well past the point when it would have made a splash), radically underinvested in the organizing component, and pushed a divisive position on the Vietnam War. It nevertheless seems unlikely that fixing the many tactical errors of the Freedom Budget would have resulted in a very different outcome for the campaign. The more fundamental problem was simply that the coalition that Randolph and Rustin imagined supporting such an ambitious agenda did not materialize. What happened?

On the civil rights side of their proposed civil rights–labor coalition, the rise of Black Power alongside the older civil rights organizations’ accommodation to the Democratic Party split the movement. There had already been plenty of tension between the civil rights organizations in the lead-up to 1963, resulting, among other things, in the censoring of the radical elements of John Lewis’s speech at the march. These fault lines became chasms after the 1964 Democratic National Convention, where Rustin, Martin Luther King Jr, Walter Reuther, and others had implored the Mississippi Freedom Democratic Party to accept a compromise from Johnson that the former felt was a simple rejection. The ground had thus been well prepared for outright hostility by the time Carmichael first articulated Black Power.

In a 1966 article for Commentary, Rustin noted the “serious split” that was widening between the young and older civil rights leaders, and he impugned Black Power for “isolat[ing] the Negro community [and] encourag[ing] the growth of anti-Negro forces.”⁶⁵ There’s no question that the rise of black separatism and the turn to community control split the civil rights organizations internally, so bitterly that CORE could come out and directly call the NAACP racist in the early ’70s for having tried “to ram its bankrupt integrationist policies down the throats of Black people.”⁶⁶ In 1972, Rustin rather self-contently asserted the correctness of his 1966 prediction, claiming that Black Power “has left us a powerful legacy of polarization, division and political nonsense.”

We hear little from those who popularized black power and in turn became household names through the notoriety it generated. Stokely Carmichael lives in Africa — he has dismissed America as unreconstructably racist and from time to time issues statements of praise for one of Africa’s most brutal dictators. H. Rap Brown is in jail. Eldridge Cleaver is in exile under house arrest in Algeria, a nation that, we were told, is the vanguard of Third World revolution. Floyd McKissick, the super-militant of CORE days, is today a real-estate entrepreneur and a militant Republican.

Of course, Black Power advocates blamed the marginalization of their own organizations on the betrayals of white liberals and tired old men like Randolph and Rustin, not to mention political backlash and the insidious efforts of COINTELPRO. For my purposes, the point here is simply that Black Power did have a divisive effect within civil rights organizations, attracting the previous dynamism of the earlier phase of the movement and channeling it away from mass politics as conceived by Rustin and Randolph.

It’s worth noting, however, that the differences here were not just ideological but also organizational. Rather than heeding Rustin’s call to build up its membership lists and become effective coalition partners, SNCC famously expelled its white membership in 1967. Even before then, it was approaching bankruptcy, and it was nonexistent by 1970. In 1966, CORE’s budget of $400,000 roughly equaled its debts. Throughout Director Floyd McKissick’s term, CORE tried and failed to raise money from labor, receiving money from the Ford Foundation instead, and worried that “the Internal Revenue Service was about to padlock the door.”⁶⁷ They were only saved from this situation, in 1968, by resources from the Harvard Institute of Politics and debt reduction aid from Robert F. Kennedy.⁶⁸

Unlike the civil rights organizations, which entered a period of relative inaction and decline, labor woke from its slumber in the mid-’60s. Strike activity picked up in a remarkable wave of workplace militancy, even though it never reached the level of unrest of 1919 or 1934. The agitation, however, did not come from labor leaders but in opposition to them. The rank and filers were reacting against speedups and a general lack of control in the workplace, but they also were rebelling against their leadership, inspired by and in agreement with the New Left and Black Power organizations that criticized the bureaucratization and capitulation of organized labor. It’s certainly possible that better tapping into this “rank-and-file rebellion,” or at least dynamizing union locals around the Freedom Budget, could have put upward pressure on the leaders Randolph and Rustin worked with to make them better coalition partners than they ultimately were.⁶⁹ Indeed, this was Rustin’s thinking in 1964, before he started playing nice with George Meany.⁷⁰

One paradox of the rank-and-file revolt, however, was that it coincided with deindustrialization and a new employer offensive, and thus with the decline of union power more generally. It would therefore not be quite right to think that if Rustin and Randolph had just linked up with the rank and file, the Freedom Budget would have had more success. Unions were being shot in the foot by stodgy and sometimes corrupt leadership, but they were also being shot in the head by the political-economic shifts that inaugurated the neoliberal period.⁷¹

With unions thus entering a period of decline, and the young, dynamic civil rights organizations having broken decisively with the older ones (and having also atrophied significantly, not uncoincidentally), the Coalition of Conscience failed to come together in the mid-’60s. When Rustin said that the Mobilization for the Poor People’s Campaign was “the last chance America will have to make an effective choice for nonviolence, for democracy and for the integration of our national institutions,” he meant it.⁷² With the election of Nixon, the Jobs and Freedom Strategy lay in tatters.

For all the flack Rustin has received for his belief in “realignment,” it’s notable that a realignment did occur in the Democratic Party during the moment when his envisioned coalition failed to become the “active political force” he hoped it would be.⁷³ Instead of a new coalition led by civil rights organizations and trade unions, a new liberal coalition was forged “of the rich, educated, and dedicated with the poor,” in Eric F. Goldman’s words. Rustin seemed to approve of historian Walter Laqueur’s “more caustic phraseology” for this new coalition, one “between the Lumpenproletariat and the Lumpenintelligentsia.”⁷⁴ The characterization stings a bit upon reading.

The Jobs and Freedom Strategy was formulated for civil rights organizations in a situation of recently acquired formal equality and persistent economic inequality. It would benefit black Americans, but as Randolph and Rustin emphasized, they wanted a Freedom Budget for All Americans. “The tragedy,” Randolph wrote in the introduction to the Freedom Budget summary, “is that not only the poor, the nearly poor, and the once poor, but all Americans, are the victims of our failure as a nation to distribute democratically the fruits of our abundance.”⁷⁵ The Freedom Budget was a needed complement to civil rights, but it was more capaciously a progressive solution to the 1960s crises of poverty and eco-nomic instability.

In the intervening period, those issues have only intensified and become more diffuse. The housing shortage today is estimated at between four and six million homes, and 30 percent of all households are burdened with unaffordable rent or mortgage payments.⁷⁶ About half of Americans have difficulty with health care costs, with 40 percent putting off medical care as a result.⁷⁷ And while productivity in the United States grew by 74 percent between 1973 and 2013, wages only grew by 9 percent.⁷⁸ Housing insecurity, unaffordable health care, wage stagnation — these are not only the dominant economic concerns of black Americans today but also the defining characteristics of life for working people as a whole, and they are precisely the social issues that the Jobs and Freedom Strategy sought to address.⁷⁹

Now as then, there is a tremendous amount of work that needs doing, including building public housing, improving transportation and energy systems, and generally repairing America’s dilapidated infrastructure. Now as then, the task is to compensate for the lack of private investment in these projects with long-term public investment accomplished through the creation of federal jobs programs, and it is to the contemporary left’s credit that this is the central proposition of one of its leading ideas, the Green New Deal. Pursuing the Green New Deal — as opposed to the “Wall Street Keynesianism” of Joe Biden’s administration, where the tap of state spending has been turned on but without any thought of long-range investment in public goods — might be the narrow path on which it is possible to reverse American decline and mitigate growing inequality while also addressing the existential threat of climate change.⁸⁰

Well-designed jobs programs would also tackle contemporary policing and carceral injustices, which are, as Cedric Johnson argues in his recent After Black Lives Matter, undergirded by “the fundamental problems of working-class exploitation, joblessness, and immiseration.”⁸¹ Only by “abolishing the conditions,” Johnson contends, can we truly deal with the problems of modern policing, and to abolish those conditions, we need “public works and the decommodification of basic needs, infrastructure and amenities.”

In economic terms, public works would provide jobs for those who cannot obtain market-based employment. In paying employees above the prevailing wage, the program could apply progressive pressure to low-wage labor markets in the region. By providing previously unemployed, underemployed and poor residents with more income, public works would have an immediate multiplier effect in working-class neighborhoods, raising demand at the existing neighborhood-level businesses that provide basic goods and services — e.g., grocers, convenience stores, restaurants, dry cleaners, laundromats, clothiers, etc. — and sparking new investment given the rising consumer capacity. Although this might be overstated, the option of safe, legal employment might also help to deter survival crimes and forms of unregulated and criminalized work.⁸²

Unlike simple cash transfers, public jobs programs create the kind of broader economic transformation required to alleviate the social conditions that modern policing manages.⁸³ In “proposing a set of bourgeois strategies and solutions for addressing the structurally determined conflict between police and the surplus population,” the Black Lives Matter movement in particular and the program of racial liberalism more generally are not, in Johnson’s opinion, focused on this material transformation of blighted urban areas, and thus ultimately incapable of accomplishing the goals they have set for themselves.⁸⁴

No less applicable to the present than the ends of the Jobs and Freedom Strategy are its means. Though Rustin’s version of coalition politics is often remembered as essentially meaning a capitulation to the Democratic Party, his fundamental call to build strong membership organizations that work together in coalition is more difficult to refute, as is his emphasis on the importance of building a progressive coalition with organized labor in a leading role. Indeed, to the extent that left membership organizations seek out coalition partners (even ones they bear substantive reservations about) and are invested in re-dynamizing the labor movement, in recognition of the power it could have to influence progressive change, the Left has sided with Randolph and Rustin over the critics of coalition politics. Thus, despite the vitriol that still circulates regarding Rustin’s perceived perfidy, today’s democratic socialist left has made partial but decisive steps away from the purity politics and disdain for “Big Labor” evident among Black Power adherents and New Leftists.

Still, the prospects for trade unions and racial justice organizations joining together in pursuit of a full-employment program appear even dimmer than they did in the mid-’60s. The US labor movement continues its slow decline; treading water for many unions is work enough.⁸⁵ It is nonetheless difficult to imagine any true mitigation of inequality in America without the work of the actually existing labor movement, which, despite its membership losses, still commands impressive resources.⁸⁶ Unions must be pushed from within and from without to use those resources to strengthen themselves internally and organize new members, and progressive organizations of all stripes, with an understanding of the potential power that unions could wield to advance progressive policy, must in turn learn to prioritize labor’s goals not just in word, as part of a laundry list of other goals, but in deed.

Organizationally, Randolph and Rustin would be disappointed to learn that the NAACP’s mass membership model still makes them somewhat of an outlier among racial justice organizations today. As even liberal outlets are beginning to admit, the organizational underpinnings of Black Lives Matter are somewhat confusing, with a “decentralized coalition of local organizers who eke out progress city by city, dollar by dollar,” on the one hand, and “an opaque nonprofit entity, well capitalized and friendly with corporations,” on the other.⁸⁷ Black Lives Matter has captured well the spirit of the present racial reckoning, but with such decentralized networks below and an unaccountable nonprofit (itself linked to a maze of other nonprofits, for-profits, and consulting firms) at the top, it is a far cry from the kind of representative organization that Rustin and Randolph imagined.

Related to this lack of organizational concretization is what they would have undoubtedly seen as the continued embrace of frustration politics, evident in a prevailing tendency among liberals and on the Left to “reduce the sources of inequality to psychologistic factors like prejudice, discrimination, or a generic racism” and also in protest actions employed more to antagonize than to relate.⁸⁸ In Randolph’s estimation, protest action that did not aim to speak morally to a majority was disastrous for the civil rights movement:

As a rule, tactical maneuvers that smack of the ridiculous meet with public scorn and rejection, as they, of course, deserve. We cannot afford to demean the dignity, nobility, and high moral promise of the Civil Rights Revolution by short-cut, ill-advised improvisation of action of extremist orientation.⁸⁹

Randolph and Rustin were undoubtedly wrong to turn away from what Johnson has called the “repertoire of movement strategies” as such, but they also foresaw in the new forms of spontaneous protest a kind of emotional catharsis unconnected to political ends.⁹⁰ They did not oppose protest per se as much as they did a social philosophy that severely hampered the possibility of progressive change, movement tactics that did not aid that change, and a media environment that sensationalized those tactics. Randolph and Rustin would have counseled today’s organizers and activists to hold the high drama of frustration politics off with one hand while grasping for the levers of structural transformation with the other.

In retrospect, it feels like the neoliberal restructuring was inevitable, but the preservation and extension of the New Deal order through its revitalization with new actors, most notably the civil rights organizations, was an eminently worthwhile task in the mid-’60s. Indeed, one might argue that it was the narrow door through which the collapse to come could have been staved off. After the demise of the Freedom Budget campaign, the Left became more insular, minoritarian, and powerless, and organized labor suffered a catastrophic decline, culminating in the present moment of confusion and instability. Our institutional and political situation presents a much bleaker prospect for its pursuit, but the Jobs and Freedom Strategy still offers a path forward, and its unfulfilled promise will haunt us in increasingly morbid ways if we do not walk it.

Free and Equal is half philosophy, half practical political prescription. One of its greatest strengths is its clear exposition and defense of Rawls’s ideas for lay readers, which takes up the first half of the book.

For the uninitiated: John Rawls set out the main elements of his political philosophy in 1971’s A Theory of Justice, refining and elaborating his view in later works.¹ He held that a just society would respect every citizen as free and equal and treat each person fairly at a fundamental level. Rawls thought we could identify the principles of justice that would govern such a society through the thought experiment of the “original position”: a hypothetical situation in which self-interested individuals attempt to come to an agreement on the principles of justice from behind a “veil of ignorance” — i.e., without any knowledge of what position they would occupy in society, what particular skills or talents they would have, or a conception of the good life.

In the original position, Rawls stipulates, people would choose the principles that would best guarantee their ability to form and pursue their own vision of the good. They would not choose principles that would give them an unfair social position relative to others, which would be irrational behind the veil of ignorance. If we do not know what our occupation or race or gender or religion will be, none of us will agree to principles that give, say, bankers, or whites, or men, or Christians, political power or economic opportunities at the expense of people in other groups — for all each of us knows, we are among the less favored.

Therefore, we would all agree to principles that treat each person equally and secure everyone’s fundamental interest in pursuing their vision of the good life. Rawls claims we’d agree to two principles in particular. The first principle says that everyone has “an equal right to the most extensive scheme of equal basic liberties compatible with a similar scheme of liberties for others.”² The basic liberties include political freedoms, such as the rights to vote and hold public office, as well as basic personal liberties like freedom of speech, freedom of movement, and freedom from arbitrary arrest and seizure.

The second principle says that “social and economic inequalities are to be arranged so that they are both (a) to the greatest expected benefit of the least advantaged and (b) attached to offices and positions open to all under conditions of fair equality of opportunity.”³ Fair equality of opportunity means that society must strive, through generous provision of public education as well as formal antidiscrimination protections, to provide everyone, regardless of accidents of birth, equal opportunities at attaining different jobs and public offices. And insofar as different positions reward their holders with differential income, power, or social status, those inequalities must be to the benefit of the least advantaged. Perhaps some occupations need to be more highly compensated, either to attract individuals with rare skills or to make especially unpleasant or dangerous work more enticing for prospective hires; but these differences are only justified insofar as they improve the quality of life of citizens in lower-paid work.

One of the most satisfying aspects of Free and Equal is its efficient dismantling of common but misguided objections to Rawls’s theory. Chandler argues persuasively that many common criticisms rest on either implausible premises or misunderstandings of Rawls’s framework. It is worth highlighting in particular his lucid response to the communitarian criticism of Rawls, a criticism that has come from both left- and right-leaning corners.

The objection goes something like this: Rawls, like other liberal philosophers, assumes that people are fundamentally egoistic and individualistic, seeking to satisfy their own desires above all else; moreover, we can understand human beings and their desires independently of the historical and social contexts in which they find themselves, including religious and ethnic contexts. These assumptions come out clearly in Rawls’s construction of the original position: the principles of justice would be decided on by self-interested individuals, abstracted away from people’s actual conceptions of the good formed by historically contingent locations in religious, ethnic, or other communities. These assumptions, and the theory of justice that results, communitarians say, encourage excessive individualism and selfishness, which erodes traditional communities, civic life, and social trust.

But despite the intellectual pedigree of this critique, it is, Chandler notes correctly, based on a simple misunderstanding of Rawls’s ideas.⁴ That misunderstanding is due to a misreading of the original position — “a tendency to (mis)interpret the description of the parties in the original position as an account of human psychology or of the metaphysical nature of the self.” But Rawls didn’t intend the original position to depict what people are actually like. It is a thought experiment meant to help “identify basic political principles for a diverse and democratic society”:

In fact, properly understood, the original position embodies almost the opposite of what its critics claim. Far from being grounded in the idea that people are inherently egoistic, it assumes that people are motivated by a desire to live with others on terms that are both mutually beneficial and fair.

That the parties to the original position are conceived of as self-interested individuals allows us to capture the ideas that each person’s point of view must be considered and that principles of justice must be equally acceptable to everyone. Likewise, parties being unaware of their conceptions of the good is a way of ensuring that the principles are fair to people with diverse values and attachments, which of course are shaped by their particular social contexts, and which might be central and inalienable parts of their personalities.

This point is worth belaboring, because the hyper-individualism lambasted by communitarians is indeed worth criticizing. It is a defining and destructive element of today’s neoliberal political order. But the fact that the communitarian critique misfires against Rawls indicates that he was not, after all, providing ideological cover for neoliberalism.⁵ Chandler is in fact justified in looking to Rawls’s ideas for a radical alternative to neoliberal orthodoxy.

Chandler is also on solid ground when he disputes the idea that Rawls’s principles were merely a complacent defense of the mid-century welfare state or even a justification of the “trickle-down” policies popularized during the Reagan-Thatcher era. Realization of the social and economic equality called for by the two principles would require a redistribution of wealth and power more extensive than even those achieved by the Scandinavian social democracies at their height.

Much less convincing is Chandler’s response to the socialist critique of Rawls. Rawls himself held that an ideally just society might be socialist but might not be; he argued that justice was in principle also compatible with a form of capitalism he called “property-owning democracy,” in which private ownership of the means of production was permitted but heavily regulated to prevent large concentrations of wealth and political power. There is now a literature arguing that Rawls’s principles commit him to being a socialist, while others argue that he should have been a principled defender of capitalism.⁶

Free and Equal seems to come down on the latter side of the debate: Chandler argues that a capitalist society need not be unjust, and he ends up making practical recommendations for redistributing wealth and expanding workplace democracy that would largely leave ownership of society’s resources in private hands.

One central argument for the injustice of capitalism, of course, is that capitalism is inherently exploitative. Because capitalists have a monopoly over the resources needed to produce goods and services, workers must hire themselves out for a wage if they don’t want to starve; the capitalists then sell what their employees produce on the market and pocket a large share of the products’ value as profit. This “surplus value” that owners extract from workers is the fruit of exploitation.

Drawing on arguments from the philosopher Will Kymlicka, Chandler disputes the charge that such exploitation makes capitalism unjust.⁷ For one thing, Chandler says, eliminating exploitation wouldn’t necessarily make the economy fair. Even if all firms were collectively owned and workers were paid the full value of the products of their labor, there would still be unfairness due to “unequal opportunities that different workers have to develop their skills” and “the inequalities that inevitably arise in a market economy between, say, low-skilled shop assistants and high-skilled lawyers.”

But this is clearly a non sequitur. Very few socialists would claim that converting firms to collective ownership (by workers or the state) would be sufficient to achieve economic justice, and socialists have every reason to support a robust system of public education as well as various forms of regulation and solidaristic collective bargaining agreements to equalize job opportunities and flatten income differentials. But in addition to pursuing policies aimed at equality in market outcomes, socialists challenge the exploitation at the heart of capitalism.

Anticipating this response, Chandler offers another interesting objection to the socialist critique of exploitation, one made by G. A. Cohen and others.⁸ The extraction of surplus value from workers is not necessarily unjust, the argument goes. For example, some people might build up funds through honest work and saving, and then use that money to start a small business and hire employees. Need this business involve objectionable exploitation of its workers? Or what about people who rely on disability or retirement or unemployment benefits funded by taxes on labor income?

These examples are supposed to demonstrate that the extraction of surplus value from workers is not necessarily unjust and, therefore, that capitalist exploitation isn’t either. But this just shows that we need a better account of exploitation and what’s wrong with it. Socialists aren’t committed to the view that any extraction of a surplus from workers is exploitative or unjust. Even in a society where all firms are collectively owned, some of the surplus produced by workers must be reinvested in production or diverted to pay for public education, health care, and the like.

What socialists object to is how capitalism allows the ruling class to use its ownership of the means of production to dominate or subordinate the working class, undemocratically deploying their power to force workers to labor for capitalists’ benefit. What’s wrong with capitalist exploitation, in other words, is that it involves capitalists using (illegitimate) social power to extract workers’ labor. The only way to end this form of injustice is some scheme of collective ownership in which decisions about what to produce and how to distribute the social product is determined in a democratic, egalitarian fashion.⁹

Much of the book is devoted to drawing out the practical institutional and policy implications of Rawls’s principles of justice for rich democracies today. Chandler proposes a laundry list of Rawls-inspired reforms, most of which will be familiar and congenial to liberals and leftists. These include, to name just a few, strict limits on campaign finance and the public funding of political parties; breaking up and regulating private media corporations and promoting the growth of publicly funded media sources; expanding public childcare and education at all levels; a universal basic income (UBI); reforms to increase the power of trade unions, such as sectoral bargaining; and various forms of state intervention in the economy to drastically reduce greenhouse gas emissions.

What is novel here is less Chandler’s individual prescriptions than his arguing for them as part of a coherent package, as an attempt to realize a Rawlsian vision of a just society. Free and Equal is thoughtful in evaluating the pros and cons to different potential approaches to making our society fairer for everyone, reviewing empirical arguments for and against some of the more controversial proposals.

Of particular note among the proposals are suggested reforms to expand democracy in the workplace. Chandler argues that, according to Rawls, not only differences in income and wealth but also differences in power and influence in the workplace must be distributed so as to provide the most benefit to the least-well-off members of society. To this end, he recommends expanding basic employment protections (like health and safety regulations and minimum entitlements to paid leave and vacation), German-style comanagement schemes, corporate profit-sharing and employee share ownership, and policies to encourage the formation of worker-owned cooperatives.

Consistent with his rejection of socialism, however, Chandler does not recommend full transformation of the economy to worker or public ownership. Yet he doesn’t offer convincing reasons for stopping short of full-blooded economic democracy, even as Rawls’s principles would seem to point in this direction. Those principles say that inequalities of power as well as wealth must be to the benefit of the less advantaged, but Chandler does not argue that private ownership of the means of production is more beneficial to workers than some version of collective ownership.

He does, however, recite the familiar arguments for the importance of the efficiency provided by markets as opposed to top-down state planning, which I would not dispute. Markets may be combined with public ownership of firms, though, as Rawls and indeed Chandler himself acknowledge. It is unfortunate, then, that Chandler does not engage with the many proposals for market or quasi–market socialism that have been developed in recent years, which aim to capture the benefits of both collective ownership and market efficiency.¹⁰

The closest Chandler comes to advocating for socialism is his support for the creation of citizens’ wealth funds, similar to sovereign wealth funds found in Norway and other Scandinavian countries, in which the state would buy up shares in private companies and distribute the earnings to citizens as a UBI. He is careful to refrain from suggesting that such funds should control a majority of society’s wealth, however, and he refers approvingly to Norway’s prohibition on its fund holding more than 10 percent of voting shares in any company. We are not given reasons to prefer this limited role for social wealth funds compared to, say, Sweden’s ill-fated Meidner plan, which would have eventually put a majority of the country’s stock market in the hands of worker-owned wage-earner funds.

Free and Equal neglects another important argument for the fuller socialization of enterprise. In virtue of their control over investment, capitalists wield outsize power over even democratic states. That is because, first, the state relies on revenue generated by taxes on private economic activity; and second, because elected officials can govern only with some degree of support from the public, who will become unhappy if insufficient investment is happening (i.e., if there is a recession). But whether capitalists engage in sufficient investment to fund the state and maintain popular support for a government depends on the level of “business confidence” — capitalists’ sense that the government is providing a sufficiently friendly environment for accumulation.

If business confidence dips and capitalists decide to withhold their investment — in other words, go on capital strike — the government may soon find itself insolvent or kicked out of office by an angry electorate (peacefully or otherwise). This structural leverage allows capitalists to beat back ambitious reforms that threaten their profits or their control over investment and production.¹¹ In France, capital strikes helped lead to the failure of socialist Léon Blum’s government in 1937 and to the reversal of François Mitterrand’s ambitious pro-worker program in 1982–83. In Chile in the early 1970s, capital strikes eventually led to the violent overthrow of Salvador Allende’s Popular Unity government.¹²

There is little doubt that many of the reforms advocated by Chandler would face fierce resistance from capitalists, as he acknowledges. And, to be fair, he is explicit in not putting forward a political strategy but rather an “end goal” to strive for. Still, it is worth pointing out that capitalists’ control over investment gives them an extremely powerful lever with which to resist or roll back the sorts of policies that Chandler thinks a just society requires. Once we recognize that power, we should recognize the necessity of taking it from them, by putting control of investment in public hands.

All that said, the book is a refreshing and useful contribution to envisioning a better world. Chandler is correct that — contrary to the knee-jerk reactions by some on the Left — Rawls’s theory of justice is worth taking seriously, and he pulls off the not insignificant task of making the theory and its implications speak to the practical concerns of political activists and policymakers. By combining systematic moral theory with pragmatic prescriptions for getting us closer to a just society, Free and Equal provides a model for what politically engaged philosophy should look like.