It has become a matter of general agreement among citizens of the richest country on earth that things are not going so well. The United States in its 245th year is an ailing nation—socially, politically, and economically. In the recent presidential election, one political party promised to “make America great again—again.” The other rallied supporters to “build back better.” Nobody talked about “morning in America” or anything similarly sunny. Everyone can see that it is dark outside.
During the country’s last national funk, in the 1970s, Americans latched on to the idea that the market would set them free. The result was an era of religious reverence for property rights and markets in everything, as a solution not just to the country’s economic problems but to its social and political problems, too. People were reclassified as a form of capital and told to invest in themselves. Pollution was reconceived as a tradable good. Spending money was declared to be a form of free speech.
The evangelists of free exchange insisted that unregulated capitalism and liberal democracy were symbiotic. A half century later, it is getting harder to find people who still think that is true. There is an ineluctable tension between property and democracy: political freedom is, among other things, the dangerous idea that the polity gets to define property rights. Maintaining a market economy and a liberal democracy requires a careful balancing act. And it is clear that Americans of all political persuasions are losing interest in forging the necessary compromises.
On the right, there is a growing willingness to sacrifice democracy. As the historian Quinn Slobodian pointed out in his 2018 book, Globalists, defenders of property rights are not opponents of government involvement in the economy; rather, they have sought, with considerable success, to encase property in a fortress of laws expressly designed to limit the power of the polity. This defense of privilege is understandably infuriating to the many Americans who lack the economic security to provide for their families or the opportunity to pursue their dreams. It fuels the reflexive hostility toward the market that increasingly colors policy debates among liberals.
In his new book, Freedom From the Market, Mike Konczal, the director of the Progressive Thought Program at the Roosevelt Institute, a think tank focused on economic inequality, goes beyond arguments in favor of regulating markets or establishing new government programs to redistribute income. “This book,” he writes, “argues that true freedom requires keeping us free from the market.” In his account, the market economy isn’t an engine of broad prosperity, and it certainly isn’t complementary to political freedom. “Market dependence,” he declares, “is a profound state of unfreedom.”
Konczal provides a compelling account of the problems with markets. But his indictment misses the ways in which the expansion of the market economy has often produced precisely the kinds of changes he seeks. For all the skepticism of the market on the left, it remains an important tool.
PRECONDITIONS FOR FREEDOM
The progressive conception of freedom is the product of several centuries of trial and error. First came the assertion that people are entitled to freedom from various forms of oppression. That is the kind of freedom that was enshrined in the Bill of Rights. But equality before the law isn’t worth much without the ability to participate in writing those laws, so next came the assertion that freedom requires universal suffrage. But participation isn’t worth much unless people can participate as equals. As U.S. President Franklin Roosevelt proclaimed in 1944, “We have come to a clear realization of the fact that true individual freedom cannot exist without economic security and independence.”
The problem with relying on a market economy to deliver economic security and independence is encapsulated in an old joke: “Ah yes, like the Ritz Hotel, open to rich and poor alike”—that is, although everyone may be allowed to buy what he needs, not everyone can afford to do so. One proposed corrective enjoying a moment in the spotlight is the idea that the government should give people money, perhaps in the form of a universal basic income. But giving people money is not the same thing as ensuring that people have health care. Another corrective is to provide services deemed essential. Public schools are a notable example.
Konczal is a partisan of the second approach. He wants the government to endow all Americans with the basics necessary to participate fully in a modern democratic society, a list that includes health care, a college education, and broadband Internet. He argues that the government must do the job because the market won’t. “The distribution of goods in a market economy doesn’t match what we need to live free lives,” he writes.
Many policy books present theoretical arguments lightly studded with anecdotes. One gets the feeling that the baker begrudged each chocolate chip he put into the pound cake. Konczal’s book is tastier. He built a name for himself as a blogger in the years after the 2008 financial crisis, and he knows how to narrate. His book is a retelling of U.S. history as a long struggle to limit the role of the market. “For two centuries,” he writes, “Americans have been fighting for freedom from the market.” The people have won some victories: food stamps for children, unemployment benefits for workers, Medicare for the elderly. Lately, however, the war hasn’t been going so well. Increasingly, the quality of life is determined by the ability to pay—for health insurance, education, housing. The wealthy live well, and the poor struggle. A major obstacle, in Konczal’s view, is that Americans have been taught to equate markets with freedom and to regard government as a constraint on markets and freedom. “Battles for the future of our country and society are not won on arguments about market failures, on the balance sheets of accounts, or on narrowly tailored, incremental solutions,” he writes in his conclusion. “They are won on arguments about freedom.” To win, progressives need to reclaim the banner of freedom.
NO ESCAPING THE MARKET
Although Konczal’s commitment to a broader and more muscular definition of freedom is admirable, he ultimately misjudges the relationship between markets and freedom. Reading Kon-czal’s book, one is often struck that the Americans he portrays were fighting not to escape from the market but to participate in it more fully. They saw government not as an alternative to the market but as a means of shaping it.
In one chapter, set during World War II, Konczal tells of the creation of almost three dozen daycare centers in Richmond, California, to tend to the children of women employed in the city’s sprawling shipyards. Families that used the centers, or the more than 3,100 other wartime daycare facilities that opened across the United States, paid only a nominal fee. The government covered the balance. Konczal describes this as an instance of Americans successfully escaping the tyranny of market forces: the government provided mothers with a service otherwise unavailable or unaffordable. But the government acted so women could work—and it did so by paying other women to work in the daycare centers.
Opponents of the daycare program were the ones who sought to preserve a space outside the market. They argued that mothers should remain in the home—at least those who couldn’t afford childcare without a government subsidy. After the war, they successfully forced the closure of the federally subsidized daycare centers. In 1954, when Congress introduced a tax deduction for childcare expenses, it was initially restricted to women who could demonstrate that they needed paid work. Konczal is right to argue that childcare should be readily available in the United States today. But public support for childcare is not just a matter of providing people with the freedom to participate fully in society or in democracy. It also affords the freedom to participate in the market economy.
The freedom to participate in the market can also strengthen democracy. Konczal opens his narrative with one of the formative episodes in the creation of the modern United States: the redistribution of western lands. He recounts the ferment on the densely populated Eastern Seaboard that produced the Homestead Act, the legislation that allowed Americans to claim enough land for a family farm. “Are you an American citizen?” brayed Horace Greeley’s New-York Daily Tribune. “Then you are a joint-owner of the public lands. Why not take enough of your property to provide yourself a home? Why not vote yourself a farm?” Americans did just that: the polity established rules for the distribution of common property. According to Konczal, more than 46 million Americans are descended from the homesteaders who claimed pieces of the land.
Konczal argues that the Homestead Act reflected “an unapologetic demand to keep something away from the market.” In fact, it was the means by which much of the continent was commodified. The United States took land occupied by Native Americans and redefined it as private property for white Americans. Many proponents and beneficiaries of the Homestead Act envisioned yeomanry as an alternative to wage labor, but not as an escape from the market economy: corn, wheat, and other cash crops predominated from the outset. The Homestead Act should be seen as a lesson in the power of government to construct markets, and in the lasting consequences of its choices. Millions of smallholders gained a footing in the market economy, giving greater substance to the egalitarian rhetoric of the country’s founders. At the same time, the exclusion of Native Americans from their lands, and of Black people from land ownership, still weighs on American society and American democracy.
CAPITALISM IN THE SERVICE OF DEMOCRACY
The appeal of free-market rhetoric rests partly in its simplicity: the government should protect economic freedom, narrowly defined as property rights, and facilitate free exchange. Progressives have struggled to articulate an alternative. What should Americans want instead?
One powerful idea is to invert the subordination of political freedom to economic freedom. In the philosopher Debra Satz’sformulation, “Democratic societies depend on the ability of their citizens to operate as equals.” Therefore, where “markets undermine or block egalitarian relationships between people, there is a case for market regulation, even when such markets are otherwise efficient.” Most market activities wouldn’t be affected by such a principle. Satz also notes, importantly, that some kinds of market activities serve to strengthen democracy.
In 1905, the Supreme Court, in Lochner v. New York, struck down a state law that said bakers could not work more than ten hours a day or 60 hours a week. The majority held that the law interfered with the freedom of workers and employers to make voluntary arrangements. In a famous dissent, Justice Oliver Wendell Holmes, Jr., pointed out that the status quo was an artificial construct. Every market has rules; it is just a question of what those rules should be. “Holmes was pointing out that a truly neutral market was a lie,” Konczal writes. By barring New York from acting, the Court wasn’t preserving the purity of markets. It was siding with employers. It already allowed various forms of interference, such as bankruptcy and limited shareholder liability. “The only time the courts would call foul was when laws provided better protections for workers.”
Konczal describes the rise of the labor movement and its eventual success in the long battles to restrict the workday and the workweek as an example of the antimarket tendency in American life. Workers, he writes, “wanted a space and time free from the marketplace.” There is another way to portray the same story, however. Union leaders and activists are justly celebrated as “the people who brought you the weekend.” But the value of the weekend is that it follows the workweek. Americans already enjoyed the freedom to refrain from working. What they wanted was the freedom to work and then to go home at the end of the workday and stay home on Saturday. They wanted to place capitalism in the service of freedom.
The Trump years provided Americans with a brutal lesson in the importance of public policy. The dawn of a new administration offers a chance to act on that lesson. Americans need government help to obtain an education, to care for themselves and for family members, to pursue economic opportunities. But progressives will squander the moment if they frame those goals as a fight against markets. What Americans need is a fuller measure of freedom—the freedom to participate in democratic society and in the marketplace.
