For those wondering what an Obama administration might bring, taking a gander at James K. Galbraith's ideas might be instructive. James is the son of John Kenneth, one of the most influential economists of the 20th century and a leftwing contemporary of Milton Friedman. John Kenneth Galbraith was best know for books that argued the national government should take over the "commanding heights" of the economy, (see 1967's the New Industrial State) and run them to achieve social goals such as income and job equality.
James Galbraith is an economist, too (Yale '81), and was even chief of staff for the Joint Economic Committee of the U.S. Congress. He is most famous now for his book "The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should, Too," which argues that our economy is now dominated by a wealthy predator class (the rich) that prey on the middle class. Sound familiar? President elect Obama spent a lot of time on the campaign trail on the need to bolster the middle class-protect Main Street from Wall Street.
In an article for Harper's magazine, Galbraith writes:
The problem is not how to save capitalism but how to save the unique and successful mixed economy built in the United States over the eighty-five years since the New Deal. Our system is not capitalism. Our economy has a large public sector, which at its best was competently concerned with research, defense, financial stability, environmental safety, social security, and large measures of education, health care, and housing. Today, after thirty years of attack on government, all these functions are damaged and in peril.
And the solution? I'll let Dr. Galbraith explain it:
What we do not have is the capacity to figure out, in advance, a coherent national strategy toward this goal, and for using our government to advance that strategy. We have no capacity to plan, and that is what we need now.
"Planning" has been a dirty word in American politics for decades. For the hard-line right, planning destroyed freedom: it was the "road to serfdom." Anti-planners also thought it a failure; for them the collapse of the U.S.S.R. was due to "central planning." But without public planning, who is in charge? Lobbyists who represent the private planning of the great corporations. The public interest ceases to exist, and the public sector becomes nothing more than a trough at which private interests come to feed.
What the government needs most today is to regain an independent capacity to think. The government needs a way to imagine the future that is not dominated by lobbies or even by Congress so long as Congress is dominated by lobbies. Planning is a process: thinking, coordination, action. What is the long-term national interest? What specific targets must be met? What is the best way to do it, and who plays what role?
Imagine a Federal Department of Energy and Climate with real independence. It could make an honest evaluation of ethanol. It could review the prospects and assess the dangers of next-generation nuclear power. It could make a judgment on carbon capture. It could consider all the serious conservation proposals, such as Joe Kennedy's program to retrofit housing in the snow belt. It could fund new research centers in the major universities, so that in a decade the country will have trained the experts we will need to implement the plans we make.
Planning is not coercive, but it should be privileged. Once Congress approves a plan, budgeting and appropriation rules should favor public capital spending that implements the plan. For instance, such investments would not be subject to "pay-go" restrictions; as long-term improvements, they properly should be funded by issuing long-term debt. The planning process would thus parallel the budget process, superseding it in the areas of infrastructure, technology, and environmental management that would be the main arenas for the plan. Dealing with the energy and climate crises will require direct public action and the cooperation of the private sector, which will be achieved in part by regulation and standards. Clearly, the challenge is daunting. But it's not hopeless. If the country gets it right, all of us can have work for a generation, a better living standard afterward, and leave the planet more or less intact. And in addition, we stand a chance, otherwise improbable, of persuading the rest of the world to keep our line of credit open.
A hallmark of progressive politics is the abandonment of the principles of individual liberty that are the bedrock of the US Constitution and, more importantly, the Declaration of Independence, and a disdain for free markets. Perhaps, with the ascendance of intellegentsia such as James Galbraith and the election of Barack Obama, we are once again faced with the twilight of freedom. Of course, the Bush presidency may well have already set us on this road.