The Agenda

Conservative Reformism is Conservative

for Jim Manzi has written a short reply to Mike Konczal on whether there really is such a thing as a “conservative reform” movement in policy. I agree with almost everything Jim has to say. Mike begins by identifying what he sees as the conservative consensus, as reflected in the congressional GOP, on a variety of policy issues, and then he questions the extent to which conservative reformers actually depart from this consensus. Jim focuses on identifying how and why his own views vary from the consensus as described by Mike. But Mike also goes on to ask whether the various reformist departures amount to much:

What are they adding to the table? As far as I read what reformers bring to the table, it consists of:

a. Monetary policy shouldn’t adopt a price stability mandate (or a gold standard, for that matter), and in fact Ben Bernanke could and should be doing more to help the recovery with the powers he has available. (Fiscal policy like the stimulus, however, is a bad idea that largely fails.)

b. Tax credits, particularly the earned income tax credit and the child tax credit, are successful programs which might even be expanded. They’re good even though they mean 47 percent of Americans pay no federal income tax, which conservatives hate. (“Predistribution” means of boosting low-end wages, like a higher minimum wage, should be avoided though.)

c. Financial institutions should hold more capital, and perhaps we should apply a “structural” reform to the sector like a size cap or siloing of functions.

d. The government protects incumbent interests in industry, both with obvious subsidies but also with certain property rights, like copyright.

Am I missing more? These are important things, but it’s really tough to think of this as a general new direction in policy. Much of it is actually a defense and potential extension of already-existing policies against people further to the right.

One challenge for Mike is that he is describing an idiosyncratic and diverse group of thinkers, and it’s not at all clear that the loose collection of conservative reformers he has in mind has coalesced into anything like a cohesive movement. That is, if the question is whether or not there really is a “conservative reform” movement in policy, the answer would have to be no under a stringent definition of a movement. It might be more apt to refer to a reformist tendency, which doesn’t so much represent a dramatic departure from U.S. conservatism as it’s been practiced in recent decades but rather a shift of emphasis. Last fall, Evan Soltas wrote a column on how Republicans have embraced increasingly ideological language to characterize policy positions that are in many cases fairly familiar or banal, a development which he associates with the rise of the Tea Party movement. The aging of the Republican primary electorate and the evolution of the campaign finance regime — specifically the weakening of the major political parties and the growing strength of independent expenditure groups and risk-averse incumbents representing ideologically homogenous constituencies — has contributed to this larger rhetorical shift. Mike is dismissive of conservative reformers because he finds (correctly) that they are basically conservatives. But of course that is the point. The reformist impulse is fundamentally conservative, as it aims to preserve what is best in our current mix of institutions through incremental change.

Yuval Levin has argued that the challenge facing conservatives is that the mixed economy settlement of the postwar era, in which a generous old-age safety net co-existed with a reasonably healthy, open, and competitive private enterprise economy, is not aging well, as the basic design of U.S. health entitlement programs has exacerbated cost growth and is driving a substantial increase in the size and reach of the federal government. And so preserving something like the mixed economy settlement of the postwar era will require redesigning health entitlements, among other things. The goal is not to abandon the federal commitment to a generous old-age safety net, but rather to put it on a more sustainable footing and, relatedly, to encourage empowering innovations in medical care that might lower its cost while raising its quality. This is hardly a utopian ambition. It does, however, entail challenging the interests of a wide range of incumbent interests, including interests that are in many cases supportive of conservative policy goals. Physicians, to name the most obvious example, tend to oppose measures that empower other medical professionals, like nurse practitioners and physician assistants, at their expense. Conservative reformers will generally be more inclined to put pressure on incumbents of this kind than most current members of the House GOP, who are, for obvious reasons, more sensitive to real-world conservative constituencies. One question for conservative reformers is whether they can conceive of and successfully pursue alternative constituencies, just as GOP opponents of the Stop Online Piracy Act (SOPA) eventually realized that the entertainment industry wasn’t the only organized interest group that had a stake in the regulation of the internet. 

My sense is that Mike and his allies believe that only those who see the financial crisis as an indictment of U.S. capitalism ought to be taken seriously. This view has gained credence on the center-left, and it has helped foster an intellectual resurgence among more radical critics of U.S. political economy. I suspect that this is why Mike has devoted considerable energy to arguing against the “market monetarist” interpretation of the crisis and the post-crisis malaise — he seems to recognize that if the market monetarists are right, the Great Recession is better understood, in Robert Hetzel’s words, as a reflection of monetary disorder and not market disorder. Mike suggests that the departure of conservative reformers on monetary policy is fairly trivial. But it is actually very important along a number of dimensions. Whereas most conservatives have struggled to find a post-crisis narrative, market monetarism, like the supply-side thinking of the late 1970s, gives center-right thinkers a “non-zero-sum” economic narrative. If one embraces the market monetarist thesis, one needn’t maintain that the only road to recovery is to endure high unemployment as we work our way through a skills mismatch. Rather, what we need is for the central bank to keep nominal output growing at a steady rate, as this will allow entrepreneurs, investors, and workers to make decisions about the future with confidence. There are, of course, conservative reformers who reject the market monetarist thesis, but I would argue that they are in a tougher position intellectually than those who do. 

Then there is the question of ”predistribution,” or regulatory efforts to shape the marketplace before taxes and transfers. As Mike understands, minimum wage regulations are hardly the only imaginable predistribution intervention. There are many other ways in which the public sector can shape the labor market, e.g., human capital policy, family policy, and immigration policy. Most of the conservative reformers favor robust reform of K-12 and higher education. The advent of charter schools is a development that has been celebrated by neoliberal centrists and conservatives alike, and conservative reformers tend to see it as paradigmatic of their approach to public sector reform. Yet many conservative reformers also favor more far-reaching reforms, like course-level instructional choice, that will introduce elements of competition and empowering innovation into traditional public schools, per Clayton Christensen et al. On family policy, conservative reformers — particularly those of a more culturally conservative bent — are amenable to family-friendly tax reform and, to a lesser extent, modest marriage and relationship education efforts that are designed to reduce the burdens on child-rearing and to encourage family stability. Given the scale of the family disruption problem, these measures aren’t likely to have a dramatic effect, yet they represent a recognition of the extent to which family life structures economic life, i.e., the extent to family life is very a matter of predistribution. Immigration policy, meanwhile, is deeply tied to predistribution, as the skill endowments of immigrants have a powerful impact on their earning potential, and thus on the demand for redistribution via taxes and transfers. 

More broadly, one might think of efforts to reduce the debt bias in the tax code and to scale back other protections for incumbent firms as a strategy of “predistribution,” as Ashwin Parameswaran has suggested, and the same can be said of efforts to reform the financial sector. Again, this isn’t about a radical effort to restructure the U.S. economy. William J. Baumol, Robert E. Litan, and Carl J. Schramm characterize the U.S. economy as a blend of “entrepreneurial capitalism” and “big-firm” capitalism, and they see this (rightly) as a good thing. The question is whether we’ve struck the right balance between these two modes. Christensen, whom I see as a crucially important figure for conservative reformers, though he is a scrupulously nonpartisan intellectual, has argued that an excessive emphasis on husbanding capital has damaged the U.S. economy, and contributed to sluggish job growth in recent decades. Suffice it to say, Christensen’s critique of the Doctrine of New Finance isn’t a call for a state-guided economy, and the same is true of Amar Bhide’s intriguing critique of debt market liquidity. Rather, Christensen and Bhide are seeking to explain how certain deficiencies of the post-1970s American economy have actually undermined the best aspects of capitalist dynamism. 

Mike sees support for wage subsidies and work supports among conservative reformers as little more than a defense of the status quo, and that’s fair enough. Some conservative reformers, however, favor a larger reordering of anti-poverty policy. The challenge, according to this framework, is that upward mobility from the bottom fifth of the household income distribution is extremely limited for a variety of reasons, ranging from the intergenerational effects of exposure to concentrated poverty to the weakness of social networks among the very poor to the lasting consequences of living in high-crime neighborhoods. So while the old right-of-center crime control agenda — which Mike critiqued in a fascinating article in the socialist magazine Jacobin, which notably made no reference to the post-1960s surge in violent crime — was oriented towards the concerns of nonpoor suburbanites, a new right-of-center crime control agenda might be best understood as part of a larger effort to fight the causes of persistent poverty. One aspect of this shift is already underway, namely the embrace of criminal justice reform by conservatives who recognize that incarceration damages the earnings prospects of ex-offenders, which in turn damages the prospects of the children of ex-offenders.

There is much more to be said. But if Mike’s claim is that conservative reformers are basically conservatives, he is clearly correct. The much bigger issue, in my view, is that many of the conservative who object to conservative reformism — who’ve been fighting House Majority Leader Eric Cantor’s efforts to reform higher education and efforts to craft a coherent and workable replacement for the Affordable Care Act, etc. — don’t seem to appreciate that reform is necessary to preserve what conservatives value most about American life. 

Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

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