From neoliberalism to new horizons: Themes from New Common Sense 2023

A live podcast taping of "How to Save a Country" with hosts Felicia Wong and Michael Tomasky, featuring guest Heather McGhee, author of "The Sum of Us."

National Security Advisor Jake Sullivan has a new vision for international economic policy. At our first-ever New Common Sense media roundtable in March, Sullivan explained why ensuring that working Americans benefit from global growth “has to be a national security priority as well as a domestic economic priority.” In April he outlined an approach to more deeply integrate domestic and foreign policy in a speech that was widely viewed as the culmination of President Biden’s desire to “change the paradigm,” and even a declaration of “the death of neoliberalism.”

This big-picture change in the way that we approach political economy has been one that our Economy and Society Initiative and its grantees and partners have been thinking about for a while and was explored in depth at the New Common Sense roundtable. The event — which brought together experts from academia, civil society, government, and industry with leading journalists from national outlets — was focused on the transition from the market fundamentalism of the neoliberal era to a new intellectual paradigm better suited to meeting the biggest challenges our society faces today, from climate change to inequality and racial injustice.

Over the course of three days of panel conversations and one-on-one interviews, participants discussed topics ranging from the geopolitics of the post-neoliberal era to the role of emerging technologies in our economy and society. Amid the diverse and wide-ranging discussions, a few themes emerged:

Beginning from first principles

Speakers argued our current economic system isn’t working when it comes to solving our biggest problems or meeting the needs of all people. Experts across several panels weighed in on the opportunity to rethink current structures and the questions we need to ask to start building a new way of thinking about the economy.

We have not made enough progress on articulating the post-neoliberal worldview. Partly that’s because it’s a hard question, it’s hard to do. We have to grapple with these big normative questions. We have to really imagine what we want society in our world to look like. And the economy is only a small part of that. The family is a part of that. Our democracy is part of that.”

— Lindsay Owens, Groundwork Collaborative

“We have a political economy that has made it extremely difficult to care for the people who are most dear to us. And it may be difficult for exactly the kind of bogus, BS, extractive, profit-seeking reasons that Rohit Chopra [director of the U.S. Consumer Financial Protection Bureau] was talking about [in an earlier interview at the conference], when he talked about junk fees. That’s bad. We should design a different system. It’s within our power to design a different system.

— K. Sabeel Rahman, Brooklyn Law School

“It’s somewhat oxymoronic that we even have to say ‘moral economy.’ Perhaps we should begin with the question: What is the purpose of an economy? … And what if its purpose is to facilitate people to be their best selves, to be self-determining, to engage in the human ethic of contributing productively to your society in a community framework? I think we need to begin with a concept that we established with the U.N. Declaration of Human Rights, as far back as 1948, which is ‘economic rights.’ I would add the word inclusive economic rights, because we’ve also seen throughout history, if we aren’t intentional with regard to including certain marginalized groups — marginalized by their social identity, be it their gender, race, sexual orientation, or even, if we think in a macro perspective and in an international way, the Global South — then the default will be the structures that have been existing in the world, which, by design, manages and implements policies that are racist.”

— Darrick Hamilton, The New School

Climate is central to the new economy

Climate change is perhaps the defining challenge of our time, and emblematic of the failures of neoliberalism to offer solutions to our most pressing problem. Heather Boushey of the president’s Council of Economic Advisers and Kate Gordon from the Department of Energy both highlighted the importance of integrating our climate and economic goals for a more sustainable future.

There are security imperatives, geopolitical imperatives, economic imperatives, fairness imperatives. All of these things are driving the same shift, toward a more sustainable and resilient and equitable economy. So we have an opportunity and an imperative to rethink our industrial economy right now. That has to be done in a way that addresses climate change because, (a) the climate is making the way we do business impossible. So that’s just not going to work anymore. And (b) it’s going to undermine all of our future economic growth if we don’t. So we have to do it. There’s a million reasons to do it. This is yet another one. It’s my call to action to this group, why we can’t keep talking about climate as if it’s sort of over there, just an environmental regulatory agenda, while everything else is about the economy and growth. This whole conversation is one conversation. This is yet another set of allies to bring in for this shift.”

— Kate Gordon, Department of Energy

“As a labor economist, nothing could be more important for the future of labor than how we do clean energy. These are the jobs of the future. This is why it’s so important to economic competitiveness, so important to the geo — it’s global stability of our economy. This is where the action is.”

— Heather Boushey, President’s Council on Economic Advisers

The values that should undergird a new paradigm

Throughout the three-day event, panelists discussed what a new political economy could look like and the aims it should serve. While we’re still exploring possible ways forward, it was clear that the next paradigm needs to privilege a new set of values — like equity or family — over neoliberalism’s focus on the primacy of markets and atomized individuals.

“So much of what we’ve heard the last couple of days really highlights a number of different moral suppositions or values about what we’re trying to do. One is really centering the idea of human and collective flourishing. What are the things that people in communities need to thrive? … A second is an attentiveness to power imbalances. So who are the actors? The institutions, the systems, that are actively inhibiting that ability to flourish? … There’s another underlying one, which is democracy. By that, I mean our collective ability to make the political economy work for us so we don’t serve the market. The market is a creature of what we collectively decide and authorize through law. And we should build a market economy that works for those human values.

— K. Sabeel Rahman, Brooklyn Law School

“I would make the argument that post-neoliberalism should focus very heavily on the concept of the family, and that family, rather than individuals, are the relevant economic unit to be thinking about. Ensuring that we have family formation, that kids are being raised and prepared to then take on obligations themselves in the community, in the next generation — then we are essentially bracketing markets, saying there are some things markets are really great for, in terms of the efficient allocation of resources, and we want them to do that.”

— Oren Cass, American Compass

Policy lies downstream from values

A point that came up several times is the way that policy choices depend on the values that underlie them. Associate Professor of Law at Brooklyn Law School K. Sabeel Rahman and Executive Director of American Compass, a conservative think tank, Oren Cass discussed how values can and must involve policy decisions.

“We were talking about being ‘place-based’ in the community, in the policy context, place-based in the values context — I think is hugely important and something that neoliberalism actively renounces with a sort of mobility fetish. I would go exactly the other direction and say empirically, for most people, place has an enormous value and saying that places where people are and where they want to stay, have value and need to be protected, has to be a huge piece of this. So if that’s what we are asking the market to do and be compatible with, then the task for policymakers becomes: All right, what are the rules and regulations around the market? What are the institutions in or around the market that we need in order to accomplish those things, recognizing that there is going to be a ton of trade-offs and other things we might like, other things we might have now that we are not going to have as much of if those are the things we’re focused on most.”

— Oren Cass, American Compass

One thing you see in the work of the Biden Administration is an attempt to bake in values of equity, values of participation, values of open government into some of these more bureaucratic and technocratic processes. And we could get super wonky about how you do that — you know, collect different kinds of data to understand what the inequities are that we need to target and work against, finding different ways of engaging communities. But it’s a very different model of how government ought to function than the one we’ve been living under in the Reagan, Clinton, etc., era of the last few decades.”

— K. Sabeel Rahman, Brooklyn Law School

The care economy and the role of the worker in a new economy

A way of thinking about the economy is not just about creating jobs, but about centering the needs of people. To do so means rethinking the current role of workers in our economy and giving people the resources they need — like child care — to participate in the labor market.

“In the context of my focus on developing a good jobs economy, a lot of that will rely on our ability to also tilt the nature of technology in a direction that’s more labor friendly. … Increasing workers’ voices in the workplace is going to be a very important complementary piece, a component of ensuring that technology helps workers rather than simply becoming a labor-displacing mechanism.”

— Dani Rodrik, Harvard University

 “One of the biggest challenges we have in our economy right now is labor supply. One of the easiest ways to fix that is to address the care crisis all across care infrastructure — child care to home care and everything in between. … [W]e need to make sure that as we’re creating jobs we’re not adding to those communities’ challenges. That means saying to these businesses, you’re going to dislocate a lot, so you need to make sure those workers have access to childcare. … What we make in America, how we make it, matters. … It’s shifting the paradigm.”

— Heather Boushey, President’s Council of Economic Advisers

“[We face] the challenge of inequality, the challenge of ensuring that the gains that flow from global growth actually reach working people, middle class people here in the United States. And from my perspective, that has to be a national security priority, as well as a domestic economic priority, because the American middle class is the foundation of our capacity to project strength in the world, just as it is fundamental to the sustaining of our economy, our society and our democracy at home.”

— Jake Sullivan, National Security Advisor to President Biden

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