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Is ‘Supply-Side Progressivism’ Doomed?
Supply-side progressives have started to discover that regulation is holding us back, but their loyalty to the progressive label is holding them back
Every time there is an idealistic vogue toward big government, it’s followed by an inevitable drift back in the other direction—after the big-government solutions fail.
The latest example is a movement, so far small, of “progressives” who realize they haven’t been able to achieve their stated goals because these goals require increases in the labor force and particularly in the economy’s capacity for construction and manufacturing. They require making things and building things—and existing progressive policies are getting in the way.
So, to be really progressive, we have to do something counterintuitive: reform big-government regulations and (gasp!) possibly even reduce them. This viewpoint has come to be known as “supply-side progressivism.”
The cause of smaller government has few friends today, so I welcome any converts, no matter how grudging or belated. But is supply-side progressivism doomed? More specifically, is the “progressivism” part incompatible with the “supply side” part?
This is a problem the would-be supply-side progressives are already aware of.
The term “supply-side progressive” was coined by Ezra Klein, who laments that “progressives are often uninterested in the creation of the goods and services they want everyone to have.” A lot of us have been saying this for years, but it’s a startling admission coming from the inside. The result, Klein continues, is “cost disease socialism,” which he summarizes succinctly: “If you subsidize the cost of something that there isn’t enough of, you’ll raise prices or force rationing. You can see the poisoned fruit of those mistakes in higher education and housing.”
Klein has also discovered the problem of overregulation, particularly in construction and housing. In a follow-up New York Times article, he describes the problem:
“There are so many people who want to have some say over a project,” [construction analyst Ed Zarenski] said. “You have to meet so many parking spaces, per unit. It needs to be this far back from the sight lines. You have to use this much reclaimed water. You didn’t have 30 people sitting in a hearing room for the approval of a permit 40 years ago.” . . .
This, [economist Chad] Syverson said, was closest to his view on the construction slowdown, though he didn’t know how to test it against the data. “There are a million veto points,” he said. “There are a lot of mouths at the trough that need to be fed to get anything started or done. So many people can gum up the works.”
Klein’s best effort to get at the central issue, though, is his critique of “everything-bagel liberalism”:
You might assume that when faced with a problem of overriding public importance, government would use its awesome might to sweep away the obstacles that stand in its way. But too often, it does the opposite. It adds goals—many of them laudable—and in doing so, adds obstacles, expenses and delays. If it can get it all done, then it has done much more. But sometimes it tries to accomplish so much within a single project or policy that it ends up failing to accomplish anything at all.
In other words, every project has to become an everything bagel. It can’t achieve just one progressive goal; it has to achieve everything, everywhere, all at once. Klein’s first example is California’s attempt to subsidize “affordable housing,” a bagel which has been overloaded with regulations such as a mandate to use small, minority-owned contractors—a requirement that adds expenses and delays to housing construction. His second example is the Biden administration’s attempt to subsidize microchip manufacturing in the U.S., onto which the administration has piled mandates for worker child care and other demands.
The progressives’ mania for achieving every goal through government regulation and mandates prevents them from achieving anything.
Was Progressivism Always Anti-Growth?
The progressive movement did not begin as a call for increased wealth and construction. It began as a backlash against an economy that was already producing rapid growth, abundant innovation, new construction and economic progress. The first great progressive president, Woodrow Wilson, described the movement that brought him to the presidency as a “sober second thought” to the “heedless” pursuit of “material greatness.”
More recently, the British historian Eric Hobsbawm, writing in The Guardian, described “the basis of progressive policy” as “not maximizing economic growth and personal incomes” but rather “redistributing private accumulation” and reining in the “bourgeois anarchism” of markets. He repeatedly dismissed the idea that “what a country needs is under all circumstances maximum economic growth.”
So, to some extent, an anti-supply-side, “degrowth” attitude was part of the basic impetus of progressivism from the very start. And that problem is still smack-dab in the middle of supply-side progressivism. Klein’s proposals, for example, are mostly about how to make it easier to do a small subset of politically privileged projects. To be worth lightening the burden of regulations, your project has to have a “green” angle or benefit the homeless. We couldn’t possibly scrape anything off the everything bagel when it comes to the kind of normal economic activity that is the actual bread and butter of economic progress.
If we followed the supply-side progressives’ prescriptions, we might become great at building housing for the homeless, but we could still have a thousand restrictions on housing for the middle class. We could complete a wealth of “green energy” projects but still have rolling blackouts because we shut down conventional power plants. We would clear the way for projects that involve properly progressive goals of redistribution, but we would not clear the way for projects that are desirable just because the average person wants to be happy and prosper. Would that really be progress?
Moreover, most of Klein’s proposals concern what regulators and the government can do and give relatively little consideration to what entrepreneurs and developers require. But the U.S. is not China; our economy is not dominated by state-owned enterprises. (And given the ongoing crack-up in China, we should be grateful for that.) The private sector drives most of our actual economic activity.
Yet Klein isn’t really prepared to address this fact. You can see this ambivalence when he begins by deriding free-market economists (the old supply-siders of the 1980s) as peddlers of pseudo-science and haughtily dismissing Ayn Rand and her interest in the nation’s “John Galts”—a reference to the heroes of her novels, who are mostly scientists, inventors and industrialists. But if we’re in favor of material and technological progress, shouldn’t these people, the fountainheads of innovation and growth, be among our primary concerns? Shouldn’t we regard what they do as more important than what bureaucrats and politicians do?
As for Ayn Rand, whose whole body of work was about the needs and motivations of the creators, aren’t those needs something we should take seriously if we want a lot of “supply-side” growth to fuel our ambitions for progress?
But the whole point of supply-side progressivism is that Klein—and others who are carving out a similar ideological niche, such as Noah Smith—have to begin by loudly disavowing free markets and individualism and private enterprise in order to shore up their progressive credentials. Their progressivism undermines their supply-side aspirations.
The Halfway House
This cringingly apologetic approach is what distinguishes the supply-side progressives from previous apostates from the big-government creed. My sense is that decades ago, people who now identify as supply-side progressives would have just moved to the right. They would have followed the path of people like Norman Podhoretz and Irving Kristol, who started as big-government liberals—or, as in Kristol’s case, socialists—and then gradually migrated to become “neoconservatives.”
But it seems that such a migration is harder to pull off today, perhaps because the rise of Trumpism has made the right seem toxic, and certainly because of the extreme tribalism of our current politics. The old neoconservatives and other refugees from left-wing orthodoxy may have made a lot of enemies among the left-wing intelligentsia, but their views were more welcome in the broad mainstream of American media and academia. Today, when those fields have become more ideologically uniform—in the case of the media, fragmented into opposing islands, each ideologically uniform within itself—such a transition may seem less inviting. So they have to come up with an approach that maintains a socially respectable veneer of progressivism.
Yet the cost for the would-be supply-side progressives is that they are limited by a set of thoughts they can’t mention. They need to be freer, less defensive, less apologetic. Few of us want to be against progress, of course—but there is no need to be restricted to one particular dogma that claims a highly implausible monopoly on progress.
These thinkers are beginning to confront what other generations before them have confronted: the limitations of the state’s coercive power, the destructive fantasies of top-down planning and the creative power of decentralized private initiative. They need to stop feeling the need to tie themselves to the label of “progressivism” and be willing to follow this evidence as far as it leads them.