Shortly before his untimely death from ALS in 2010, the British historian Tony Judt wrote Ill Fares the Land, a love letter to postwar social democracy. One of Judt’s arguments in that book was that the social-democratic tradition can be regarded as a conservative project. “The Left has something to conserve,” he wrote. “The democratic Left has often been motivated by a sense of loss: sometimes of idealized pasts, sometimes of moral interests ruthlessly overridden by private advantage. It is doctrinaire market liberals who for the past two centuries have embraced the relentlessly optimistic view that all economic change is for the better.”
This is also the view taken by Sohrab Ahmari in his provocative new book, Tyranny, Inc. Ahmari is a man of the Right, and has made a name for himself as a culture-war brawler. But in this book, he looks back wistfully at the social-democratic order in which capitalism was managed for the benefit of workers. Like Judt, he notes that free-market economics suffers from the conceits of utopian thinking, with its willingness to uproot already existing communities and disrupt their values in the service of market-driven liberation. In Ahmari’s view, social democracy (including the New Deal tradition in the United States) seeks to restore the bonds of duty, obligation, solidarity, and reciprocity, which have been under increasing stress since the beginning of the Industrial Revolution.
At the same time, what Ahmari calls the “class compromise” of social democracy tamed the more radical impetus toward class conflict. In this sense, at least, it is fair to say that social democracy saved capitalism. This was certainly the motivation of politicians like Franklin Roosevelt and Konrad Adenauer, who were no radicals.
The social-democratic tradition also recognized that political equality of the kind extolled by the American founders is hard to secure in an environment of extreme economic inequality. Before the Industrial Revolution, Ahmari notes, most people had a modest amount of property, which meant that they faced each other on a relatively equal footing. But with rising concentrations of wealth and economic power, this older Jeffersonian ideal fell by the wayside. It gradually became clear that, in the new industrial economy, the preservation of political equality would require the use of state power to curb economic inequality.
This brings us to the present juncture. At the heart of Tyranny, Inc. is the idea that corporations today exert an enormous degree of coercive power, especially over workers. As Ahmari puts it, the modern market economy “allows the asset-owning few to subject the asset-less many to pervasive coercion.” In the first half of the book, Ahmari documents some concrete examples of this coercion. He starts with the working conditions at Amazon warehouses and with the company’s notorious hostility toward unions. He goes on to describe the rise of just-in-time scheduling, which makes it impossible for workers to manage their home lives, especially if they have children. He documents the use of non-disclosure and non-disparagement agreements and the coercive control exerted by corporations over what employees can and cannot do, even with their own property. He also has a chapter on the increasing use of private arbitration to settle labor disputes, a system that stacks the deck in favor of the corporation and against workers. He describes how the perpetrators of the opioid crisis have been able to game our bankruptcy laws to avoid liability. He shows how workers get short shrift when hedge and private-equity funds take over their employers and seek to maximize short-run shareholder value at the expense of long-term viability. Finally, he discusses the privatization of key public goods like firefighting and emergency services—and points out that public pension funds for public-sector workers are often invested in the very companies seeking to privatize their jobs.
The result of all this is a system of low wages, flimsy benefits, and job insecurity. For classical liberals and neoliberals, however, none of this is a problem, because it is predicated on freedom of choice. This ideology holds that both parties to an employment contract hold equal power and can easily walk away. If a worker feels mistreated, she can always quit and find another job—and the magic of competitive markets makes sure that everyone comes out ahead.
This was the ideology behind the infamous Lochner era in the United States—a judicial regime that struck down all attempts to boost worker power and improve working conditions on the grounds that this would infringe on liberty of contract. It took the New Deal to end the Lochner era. Yet even today, many so-called conservative judges embrace this ideology, siding with powerful corporations over powerless workers in the name of an illusory freedom.
Of course, the notion that employers and employees enjoy equal power makes little sense in the real world. Modern labor economics recognizes the importance of relative bargaining power. And from a moral perspective, Catholic social teaching holds that consent does not imply justice. This teaching goes all the way back to the Rerum novarum (1891), in which Pope Leo XIII declared that “[i]f through necessity or fear of a worse evil the workman accept harder conditions because an employer or contractor will afford him no better, he is made the victim of force and injustice.” This point has been repeated many times, most clearly by Pope Paul VI in Populorum progressio (1967): “The teaching set forth by Our predecessor Leo XIII in Rerum Novarum is still valid today: when two parties are in very unequal positions, their mutual consent alone does not guarantee a fair contract; the rule of free consent remains subservient to the demands of the natural law.” In Laborem exercens (1981), Pope John Paul II laid out the rights of workers—to just wages, to social benefits, to decent working conditions, to rest, and to collective bargaining. For his part, Pope Francis has remarked that there is no good society without a good union. Ahmari does quote Pope Leo XIII in passing, but his case could have been strengthened by a more thorough engagement with Catholic social teaching.
In the second half of Tyranny, Inc., Ahmari asks what can be done now. His answer: a return to social democracy, especially as practiced under the New Deal. His hero is President Franklin Roosevelt, who sought to protect workers from the vagaries of capitalism and to grant them a “countervailing power.” This is a term associated with economist John Kenneth Galbraith; it refers to the ability of workers to bargain collectively with employers on a level playing field. Here Ahmari praises the Wagner Act, which encouraged unionization and collective bargaining, and the Fair Labor Standards Act, which gave rise to federal minimum-wage and overtime laws. He also notes, correctly, that basic welfare-state protections can boost the power of workers by enhancing economic security.
Together, the reforms of the New Deal gave rise to a highly productive and equitable economy. Full employment was the norm, inequality was low, and financial crises were kept in check. It’s not an exaggeration to claim that, while it lasted, social democracy was the most successful economic experiment ever conducted.
But, of course, it didn’t last. Starting around 1980, social democracy gave way to a system we now call neoliberalism. As Ahmari shows, neoliberalism proved to be even more radical and utopian than the classical liberalism it updated. While classical liberalism called for governments to adopt a hands-off approach to the economy, neoliberalism cannibalized government, turning it into “a mere appendage of market power” that “actively abets private tyranny.” This was revolutionary. It marked a decisive shift away from a politics focused on the common good—which is the truly “classical” approach. Friedrich Hayek famously argued that any attempt to interfere with market outcomes in order to smooth out the distribution of income was tantamount to totalitarianism. Ahmari notes that neoliberalism marks a sharp break with Western political thought going all the way back to Plato and Aristotle. As he puts it, “neoliberalism terraforms and flattens the very landscape of our politics, bulldozing through once-familiar landmarks like ‘Class,’ ‘Solidarity,’ and ‘Common Good.’”
Tyranny, Inc. concludes with a call for a rebirth of social democracy. Some critics have expressed surprise at hearing this call come from someone on the Right. But it is important to remember that, historically, social democracy reflected a Left-Right consensus. The Christian Democrats who governed France, Germany, and Italy had economic policies very similar to those of the Social Democrats who governed Sweden and Denmark: both built robust welfare states and empowered unions in the postwar years. In the United States, the contours of the New Deal order were mostly accepted by the next few Republican administrations, including those of Eisenhower and Nixon.
Ahmari seeks a return to this kind of Left-Right consensus. Partly for this reason, he steers clear of the kind of culture-war arguments for which he is best known. But he does take his fellow conservatives to task for ignoring the effects of material conditions on the culture. He notes that the ancient Greeks were very clear about the relationship between material sufficiency and virtue—a link that the modern Right has forgotten.
This is a good book, and, depending on how it is received, it may turn out to be an important one. Its tone is ultimately hopeful. Some might say that Ahmari is naïve to think that any substantial part of the Right can be persuaded to turn away from free-market shibboleths. But the attention this book has already garnered across the political spectrum suggests that he may be on to something. Let’s hope so.
How Private Power Crushed American Liberty—and What to Do About It
$28 | 288 pp.