Tag Archives: neoliberalism

Austerity Politics further Explained: Kim Phillips-Fein on The Metropole’s Review of Fear City

[Editor’s note: As part of our Book Review Series, The Metropole provides authors a chance to respond to reviews by The Metropole of their work. This week, New York University Professor Kim Phillips-Fein responds to the review of her work Fear City: New York City’s Fiscal Crisis and the Rise of Austerity Politics. You can read the original review here.]

I’m honored by Michael Glass’s generous, thoughtful review of Fear City. I appreciate his engagement with the book overall, but I am most grateful for his assessment of its methodology. Narrative history is as deeply structured by theory as any other style of historical writing, but there’s always a danger that the arguments can get too submerged in the arc of the story. So it’s very gratifying to have the sense that what I wanted to do came through for this reviewer.

New York Stock Exchange, New York, New York, photograph byCarol M. Highsmith, between 1980 and 1990s, Prints and Photographs Division, Library of Congress

Glass raises an excellent question about the politics of debt throughout the postwar years, and the growing reliance of cities on bond markets all through this time. The immediate cause of New York’s fiscal crisis was the large quantity of short-term debt it took on in the early 1970s, which generated heavy interest payments and also demanded frequent refinancing (this gave creditors greater leverage, which is part of why it precipitated the crisis).

But more broadly, many cities and states across the country took on increased debt over the postwar years. This became a problem in the early 1970s, when the commercial banks that had held much municipal debt became less interested in doing so.[1]

For a fiscal crisis, debt is only part of the story—the question of what revenue will repay it is the other. In New York, the near-crisis of the mid-1960s under Mayor Wagner was averted through new taxes that the Lindsey administration was able to win in Albany, as well as War on Poverty spending. But the question remains: what level of government – state, federal or municipal – should bear the costs of social spending, given the different taxing powers possessed by each? One of the lessons I hope readers will take from Fear City is the importance of historical analysis in short-term “crisis” situations: when viewed narrowly, in terms of the pressures of a fiscal shortfall, the only answer becomes to cut—but taking a longer view enables us to see the underlying conditions and to think of solutions in those terms.

Finally, Glass points to another important issue raised by Fear City: what happened afterwards? Is this the story of the end of an old regime or the creation of a new one? The strategies used to cope with the fiscal crisis – in particular, the creation of a financial control board granted veto power over the city’s spending – would be replicated in many other fiscal crises in the years that followed. And the crisis gave rise to a whole range of new institutions and ways of thinking about city government –ones that endured even as the spending of the city government rose again, as it eventually did.

New York Stock Exchange, photograph by Carol M. Highsmith, between 1980 and 2006, Prints and Photographs Division, Library of Congress

The austerity politics of the 1970s, in other words, was not only about the end of an old world, but the creation of a new one, and the way that it was forged out of the conflicts associated with the collapse of the earlier order. It was not only about dismantling social services and cutting spending, but about the struggle to shift social priorities. The slow, steady and determined effort to construct this new regime even against the resistance of many New Yorkers is where Fear City ends – but it’s really a much larger story in its own right, and one that I hope future scholars will pick up.

[1] Different takes on this story can be found in Eric Fure-Slocum’s Contesting the Postwar City: Working-Class and Growth Politics in 1940s Milwaukee, and in the work of Destin Jenkins on San Francisco. (Michael Reagan’s 2017 University of Washington dissertation on New York’s fiscal crisis also has important material on the bond market and the fiscal crisis.)

Featured image (at top): Wall Street bull, New York, New York, photograph by Carol M. Highsmith, between 1980 and 2006, Prints and Photographs Division, Library of Congress

Neoliberalism: Kim Phillips-Fein and Tracy Neumann Unpack the Knotty Realities and History of the Ubiquitous Term

We close out the Metropole’s coverage of the new edited volume, Shaped by the State: Toward a New Political History of the Twentieth Century with a discussion of neoliberalism and its importance in thinking about urban history. Working backwards, Maryland historian David M.P. Freund explores economic policy notably the government’s role as “monetary sovereign,” in our third entry.  While for our second installment we interviewed  University of Virginia historian Andrew Kharl regarding the impact of property taxes of black homeowners. Finally, you can check out our general over view of the volume here in our first essay on the book.  

If you’ve ever doddered about online, and particularly if you encounter economists like Scottie Lincicome who lean to the right, you’ll see plenty of tweeting about what my grandfather might call “the neoliberalism”:

To his credit, Lincicome carries about with humor, civility, and good faith arguments. Yet he serves as one small example of the significant support that “neoliberalism,” sometimes called “the politics of austerity” by its critics, enjoys. Unfortunately, no amount of positivity can erase the dubious impact that its policy prescriptions enacted on urban America beginning in the late 1970s and early 1980s; not the stuff of high comedy, but rather Greek tragedy.

The consequences continue to play out today, and the new edited volume Shaped by the State: Toward a New Political History of the Twentieth Century reckons with this history—most notably in Pulitzer Prize nominee and New York University historian Kim Phillips-Fein’s contribution: “The History of Neoliberalism.” In a compact, cogent 15 pages, Phillips-Fein delves into the concept’s knotty roots, explains historians’ initial reluctance to adopt the term within the field’s lexicon, and argues for neoliberalism’s value as a “way of thinking about the recent past that emerged out of a range of problems that are both intellectual and political in scope, and … speaks to the need to find a way of describing in broad terms the distinctive dilemmas of the present.”[1]

41lj9sNoDNL._SX329_BO1,204,203,200_Wayne State historian Tracy Neumann can relate. In her 2016 book Remaking the Rust Belt (which is referenced in more detail within the interview), she explored the transformation of Pittsburgh, PA and Hamilton, Ontario along with the rise of mayors like Pittsburgh’s Pete Flaherty. Once securing office, Flaherty proceeded to reestablish ties with the famed corporate elite driven Allegheny Conference while also pushing low tax, austerity friendly policies.[2]

Neumann and Phillips-Fein discussed their overlapping interest in neoliberalism over email, the results of which you can read below – it is the final installment of The Metropole’s series highlighting Shaped by the State.

 Tracy Neumann: In your essay, you suggest neoliberalism is a useful alternative to the “declension narrative” that for many years has dominated postwar US political historiography. You argue that neoliberalism links late-twentieth century political and economic shifts in a way that other frameworks (the rise of the right, financialization) do not. But U.S. historians, as you point out, have long avoided the term or adopted it only “with some trepidation.” They seem to view neoliberalism as totalizing and teleological: they aren’t sure whom to describe as neoliberal, when neoliberalism began, or how to delineate between liberal and neoliberal policy instruments and ideological orientations.

Yet historians of other regions have been much more open to the term, and our colleagues in other disciplines have long theorized, used, and engaged it. In short, for more than a decade neoliberalism has provided a shared language that allows scholars to talk to each other across disciplinary boundaries and geographical specializations—and U.S. historians have largely absented themselves from that conversation. So, I’d like to open with a question that goes beyond the scope of your essay, which like the volume in which it appears is focused on twentieth-century US political history: As Americanists become more willing to engage with neoliberalism as an analytical category, how do you think this might shape the kinds of histories we write, the questions we ask, the scales at which we operate, and the extent to which we engage—or not—beyond national and disciplinary boundaries?

1980s Pittsburgh, photograph by Carol M. Highsmith, Prints and Photographs Division, Library of Congress

Kim Phillips-Fein: The idea of neoliberalism points to power relationships, ideas and political sensibilities that do not divide along partisan lines, and so its main categories would seem to be different from those of elections and party competition—the staples of American political history. It is certainly true that some of the best new historical work engaging the question of neoliberalism is explicitly transnational. I’m thinking of Quinn Slobodian’s study of neoliberalism, which foregrounds the origins of the idea in an international intellectual community. Angus Burgin has written an excellent (as yet unpublished) “concept history” of the idea of neoliberalism, exploring it in the context of a history of ideas that moves between geography, anthropology, politics and sociology, and Gary Gerstle’s recent essay framing the past forty years as a “neoliberal age” looks at neoliberalism as analogous to the “New Deal order.”

But I suspect that one of the larger reasons that historians have been wary of the idea is really because of the politics of the word. Neoliberalism has gained prominence not only as an academic term or as a mode of theoretical engagement, but as a way of critiquing political and economic inequality. The term is widely used by activists and journalists who have deployed it to criticize the power of economic elites and the role that free-market ideas have played in justifying cuts to the welfare state and attacks on labor unions.

This very mode of critique may have been alienating to historians who have not wanted to see their work in those terms. What I wonder is whether the use of “neoliberalism” by historians will continue to have this critical edge, or whether the word will evolve, eventually becoming a more neutral descriptive device—a way of characterizing a political and intellectual position, or of denoting the post-1970s epoch in American history, that does not imply a radical politics.

New York City skyline, Thomas O’Halloran, 1975, Prints and Photographs Division, Library of Congress

TN: I think that’s an excellent segue into talking about cities, since they are so often where political positions and the definitional issues around them are worked out. Urban historians, I think, are in a unique position to clarify the analytical contours of neoliberalism—something that Suleiman Osman also gestures toward in his contribution to Shaped by the State. Osman writes (p. 252) that “diplomatic, global, and international historians who analyze the history of globalization, and urban historians who examine the plethora of localist and neighborhood based African American, Latinos, Native American, LGBT, environmentalist, and women’s protest in cities and suburbs of the 1970s” have produced some of the most useful studies of “glocalization.” Similarly. cities are central to the claims of much of the social scientific literature on neoliberalism, and sociologists and geographers describe cities as testing grounds for neoliberal policy experiments. In the past three years, at least three monographs have been published on the history of neoliberal urbanization: Andrew Diamond’s Chicago On the Make, Timothy Weaver’s Blazing the Neoliberal Trail (about Philadelphia and London), and mine—Remaking the Rust Belt (about Pittsburgh and Hamilton, Ontario). We wrote about similar cities in countries with similar political trajectories, and perhaps unsurprisingly arrived at some similar conclusions: neoliberalism is, in fact, a useful category of analysis for the postwar city; to understand it, we must examine neoliberalization as a process with a much longer history than most of the literature has thus far suggested; that the roots of urban neoliberalism lie in the urban renewal projects of the 1950s; that grassroots activists helped legitimate urban policies based on volunteerism, individual choice, local control, and market-driven reform; and that not everyone who contributed to neoliberalization was ideologically neoliberal.

But we disagreed on the essential characteristic of neoliberal urbanization: for Tim, it was enterprise zones; for me, it was public-private partnerships; and for Andrew, it was racial politics. So, while there was a great deal of analytical coherence between our projects, our empirical research suggested different local histories of neoliberalism, none of which looked exactly like New York’s experience in the 1970s. Since your latest book is about New York City’s fiscal crisis—one of the events David Harvey, in his influential book A Brief History of Neoliberalism, cites as evidence of the ascendance of a neoliberal political project—I’d like to hear your thoughts on how urban historians might help define the nature and chronology of neoliberalism in the United States.

Aerial view of Philadelphia, Pennsylvania, photograph by Carol M. Highsmith, between 1980 and 2006, Prints and Photographs Division, Library of Congress

KP-F: My approach in Fear City is a bit different. For me, part of the importance of the fiscal crisis of the 1970s in New York was the the role it played in national politics. Not simply how it reconfigured the city, but the way that the fiscal crisis became scripted into national political debates and used to attack the Great Society, the welfare state, and the whole idea of collective action for the common good.

One of the elements of neoliberalism that has sometimes made me uncomfortable is the sense of it as a seamless approach to society, something that permeates from top to bottom. I think when we look at the 1970s and 1980s, one of the main things to keep in mind is just how intensely contested many of the ideas about the primacy of the free market really were. It is not as though any of them were easily won or accepted. There was a fierce struggle between different ways of understanding society, of looking at the world.

John Hancock Center, Chicago, photograph by James Karales, 1971, Prints and Photographs Division, Library of Congress

This is certainly what I saw in New York in the 1970s. Neoliberalism seemed a very incomplete intellectual formation at that moment. When I began working on the project, I thought I would find much more theoretical coherence among the elite than I did. Instead, I saw a lot of intellectual and political conflicts, and a sense of panic that surprised me. And on the ground, the project of austerity met with a lot of resistance. If anything, the idea of neoliberalism crystallized out of the crisis, instead of existing beforehand to be implemented then.

That said, I think cities are interesting, promising and perhaps also complex places to look at the development of neoliberalism. On the one hand, cities in the late twentieth century are the front lines of any antipoverty politics, struggle for racial justice, or conflict over the shape of social policy and the welfare state. This is why the effort to reshape local government to be more responsive to private interests is so important. But cities are also places that embody a distinctive relationship between the private and the public sector. Real estate, in particular, is a part of the urban economy that is critically dependent on government in ways that make it a bit different from manufacturing or financial companies. Local civic boosters long have sought to win infrastructure improvements and to encourage city governments to respond to their needs. Cities and urban governance have always blurred the lines between public and private—well before the era of neoliberalism.

The housing struggle in crisis, National Tenants Organization, 1973, Prints and Photographs Division, Library of Congress

TN: Your point that we can’t think of neoliberalism simply as a top-down political project imposed wholesale by elites is so important, and it underscores the historical and contemporary significance of cities as sites of political action and policy formation. But it also takes us back to something you emphasized in your essay: that historians’ unease with the term “neoliberalism” stems in part from not knowing whom to classify as neoliberal. Are neoliberals people who actually called themselves neoliberals? Are they self-described liberals who sought to undo the welfare state? Are they self-described conservatives who promoted free-market politics? What’s your answer? If you were writing a field guide to neoliberalism in the United States, what would your taxonomy of actually existing neoliberals look like?

BN-TB747_bkrvfe_JV_20170421140317.jpgKP-F: This is a great question, and here I have to say something that I didn’t really say in the Shaped by the State piece. I see myself as a political historian first and foremost, and what I mean by this is that I want to write about people’s efforts to shape their society—both the attempts to do this by people with evident social and economic power, and those without access to those traditional levers. So for me, the labeling matters: what people call themselves is important. What they think they are doing and how they articulate their political agendas matters. After all, part of what I am interested in is what people are consciously trying to do to accomplish their ends and transform their society.

So for this reason, in my own work I would use “neoliberal” as closely as possible: primarily to describe New Democrats in the 1980s and 1990s, people who think of themselves as liberals and who remain committed to some vision of using the state to ameliorate social problems, but who are also skeptical of unions, the welfare state, and, in a way, the whole project of collective action and social democracy. Some of these people did call themselves neoliberals, others didn’t, but I think the word is most useful for describing this group. And we need some word to talk about them!

View of construction of the World Trade Center, NYC, photograph by Thomas O’Halloran, Prints and Photographs Division, Library of Congress

I do find “neoliberalism” useful as a word as well—as a way of talking about an overall approach to social policy, a way of using the rhetoric of the market to justify and expand the economic power of elites. But I think it is important to always call attention to the fractures within the framework. Precisely because the intellectual vision of neoliberalism is so far-reaching, I think it matters to point out all the ways that the world—that history—operates differently.

Featured image: Skyline view of Pittsburgh, Pennsylvania, photograph by Carol M. Highsmith, between 1980 and 1990, Prints and Photographs Division, Library of Congress 

[1] Kim Phillips-Fein, “The History of Neoliberalism,” in Shaped by the State: Toward a New Political History of the Twentieth Century, Eds. Brent Cebul, Lily Geismer, Mason B. Williams, (Chicago: University of Chicago Press, 2019), 348-349.

[2] Tracy Neumann, Remaking the Rust Belt: The Post Industrial Transformation of North America, (Philadelphia: University of Pennsylvania Press, 2016), 48.

Money Matters

Our focus on the new edited volume, Shaped by the State: Toward a New Political History of the Twentieth Century continues as University of Maryland historian David M.P. Freund explores economic policy notably the government’s role as “monetary sovereign.” Freund recently discussed his research and the value of applying heterodox economic analysis to the study of American history in a podcast for “Money on the Left” which is mentioned below as well. You can see The Metropole’s overview of Shaped by the State here along with our interview with Andrew Kahrl and his exploration of the property assessments and Black taxpayers here

By David M.P. Freund 

At a social function several years ago I was introduced to a colleague, who is a rather prominent historian of the United States, and he asked me about my research. When I answered that I was writing a book about money, banking, and financial policy he replied—without missing a beat—that the topic “makes my eyes glaze over” and then, a minute or so later, turned away to talk with someone else. No, it wasn’t polite, but I’ve always appreciated his unfiltered response, which was sort of a caricature of the reaction that I get from a lot of people, including academics, when I raise the subject. And so while I recognize that these topics might not seem scintillating at first glance, they demand our attention and some questioning of economic orthodoxies. Testing the conventional wisdom about finance and its history has the potential to really shake things up.

My chapter in Shaped by the State argues that if we are to reckon fully with public policy’s impacts on the American economy and the built environment, we need to scrutinize common assumptions about money. In simplest terms, I explore how federal power shapes people’s access to financial resources. Who gets to borrow funds for the purpose of producing or consuming and how do state institutions help determine those outcomes? What is the federal government’s relationship to the markets for money and debt?

To be clear, this is not a study of the federal budget and government spending priorities; this is not about “fiscal policy,” traditionally conceived (although it has important implications for that subject). Instead, it concerns the state’s role, as a monetary sovereign,[1] in both the creation and distribution of money and debt, a different but no less important source of unequal development and persistent inequality in modern America.

417URUZrQ9L._SX331_BO1,204,203,200_.jpgI began exploring the government’s hand in the making of inequality in a book about race and federal housing policy called Colored Property (Chicago, 2007) and so this new project has distinctly metropolitan origins. In Colored Property, I argue that the federal government created a new kind of discriminatory market for housing in the 1930s, one that financed construction and sales in new ways by reinventing and subsidizing mortgage lending. Of equal importance, the new federal presence popularized the mythical narrative that suburban growth and the meteoric rise of white homeownership rates were strictly “free market” outcomes. The federal state helped to create wealth in housing and structure racially the market that distributed that wealth, while simultaneously concealing its foundational contributions to both of these processes.

While writing that book I was puzzled by scholars’ characterizations of money and debt, because they seemed to be at odds with the documentary record of the state’s growing influence. And I soon learned that these characterizations are faithful to conventional, textbook treatments of finance. Standard economic theory portrays money as a commodity-like token that, by representing value, facilitates extensive barter-like networks of exchange (it has other functions as well). Debt, by contrast, is portrayed as a contractual arrangement to “borrow” someone else’s money now, in exchange for a promise to “repay” that money later, plus an accompanying charge for the privilege (i.e., interest). In other words, money enables you to buy stuff whereas debt helps you make special arrangements for using other people’s money to buy stuff. According to this logic, you cannot “make a purchase” directly with a debt instrument. And money is not debt.

Of equal importance—and again curious to me, in light of the documentary trail—standard theory treats money and debt as “exogenous” to economic growth. By this economists mean that financial instruments are useful to facilitate exchange but not, in the final analysis, essential to the growth process, because exchange would theoretically continue without them (and would naturally lead the economy towards full employment). They argue that “money is only a mechanism”—to cite a forerunner of modern macroeconomic theory—“by which [a] gigantic system of barter is carried out.”[2] In this telling, economic growth is a “real sector” phenomenon, rooted in the use of “factors of production” and driven by individual choices about exchange, while the financial sector helps people arrange their wealth and make strategic decisions about spending. Finance helps people exchange efficiently.

Two things about this conventional wisdom should concern us. Again, it does not line up comfortably with the historical record. Consider the mortgage revolution. Beginning in the 1930s and for decades thereafter, federal insurance programs created valuable financial assets (home mortgages), which in turn created new wealth in housing. The exercise of state power built new homes and enabled people to gain equity in private property by sanctioning, insuring, and facilitating the circulation of debt. And this creation of new financial instruments produced wealth that the “real” sector, on its own, would not have otherwise produced. Indeed, federal officials struggled to convince lenders and borrowers alike to experiment with a new and untested long-term mortgage. The state literally created a market.

Sign of Federal Housing Administration housing. San Diego, California, photograph by Lee Russell, May 1941, Prints and Photographs Division, Library of Congress

Second, and crucial to understanding debates about the sources of inequality, the conventional narrative about finance and free markets performed—and continues to perform—important political work. In the case of mortgage lending, it enabled contemporaries (public officials, bankers, homebuyers) and subsequent observers (economists and historians) to radically misrepresent the federal government’s stamp on the post-war housing market and its racial geography. If one agrees with the orthodox premise that the financial sector cannot be a motor of wealth creation—that it, instead, merely “unleashes” generative powers already latent in the “real” economy—then one can earnestly believe that the government’s creation of debt instruments is not economically “productive” or wealth-producing. By this logic, federal mortgage programs did not create and distribute wealth in housing or, for that matter, a host of related sectors. Rather, the story goes, new state capacity merely “freed up” the private sector so that it could perform this important work.

It was this apparent distortion of the state’s record that sent me down a rabbit hole of examining financial policy in light of monetary theory. The result is a series of essays and a book-in-progress called State Money: Economic Growth and Market Mythologies in Modern America, in which I take a deep dive into the mechanics of finance and debates over the nature of money. Both of these subjects are sampled in my “State Building” chapter in Shaped By the State.

The big take-aways are pretty straight-forward. First—and this is regularly met by blank stares—the orthodox economic models informing most historical scholarship on banking, debt, and financial policy are grounded in a story about finance that does not appear to have happened. We cannot document the “origins story” about money and credit that undergirds basic textbook economics—the claim that money first emerged in ancient societies to replace barter (which was inconvenient and limited people’s options) and that credit forms developed later, to further facilitate this barter-like exchange. Nor can we document that money forms, to this day, necessarily operate differently from credit. A vast heterodox scholarship in economics, sociology, history, and anthropology has shown instead that our conventional monetary instruments have their origin in debt instruments: basically in IOUs, or “promises to pay.” It demonstrates that monetary creation, which is performed both by banks and monetary sovereigns, represents the issuing of debt. And it demonstrates that the issuing of debt is essential to productive processes, to economic growth. Orthodox economists have consistently refused to address this critique, however, and that should trouble us. Historians should be skeptical of an economic conceptual universe that is grounded in a fictional account of money’s history.

Federal Reserve Building. Front of whole Federal Reserve Building from center, photography by Theodore Horydczak, between 1920 and 1950, Prints and Photographs Division, Library of Congress

The second takeaway relates to a more familiar topic—the quarter century of financial reform initiated with the Federal Reserve Act of 1913 and culminating with the Emergency Banking Act of 1935—and illustrates the stakes in what might otherwise seem an arcane debate among monetary theorists. By accepting economic orthodoxy about money and debt, histories of financial policy regularly mask the federal state’s assumption of important new powers over the American economy. For example, these early 20th century reforms consolidated and vastly enhanced the U.S. government’s authority to issue a sovereign currency, to ensure the value of bank-issued deposits, and to support materially new markets for debt spending (through a host of “selective credit programs”). I have not encountered a scholar—in person or in print—who disagrees about these fundamental changes in state capacity. But the consensus view is that these reforms had no impact on the dynamics of the growth process—that is, on the market mechanisms which drive the economy’s production of real wealth (in things). These reforms helped to unleash real sector productive capacities, the story goes, but were neither essential to nor constitutive of the growth process.

Now step back and consider this familiar history of reform in light of the heterodox work on money and debt. If creating monetary instruments and issuing debt are economically productive—and I agree with generations of writers who argue this point—then the U.S. government gained unprecedented authority in the early 20th century to drive economic growth and dictate the allocation of its benefits. The federal government’s new stake in the currency and in the mechanics of American finance—I discuss specifics in the chapter—gave the state unprecedented power to shape the marketplace.[3]

Note that the heterodox view of money also challenges profoundly conventional accounts of fiscal policy: namely, the claim that the U.S. Treasury collects private revenues (by taxing, charging fees, and borrowing) and then recirculates them when it spends. Money’s well-documented history demonstrates, in sharp contrast, that spending by a monetary sovereign is different in kind from spending by the private sector. And it shows that money creation by a monetary sovereign (which is what the U.S. Treasury does, with help from the Fed, when it spends) is different in kind from money creation by the banking system (which is what banks do when they create checking deposits). When the U.S. government spends, it adds net financial assets to the economy. Neither private investment nor private (bank) money creation have such power.

8d66eb17bb7d02ca4856ab443a78f2148cafbb129f58a3c81282007c6fe24ff2I elaborate on this point a bit in the “Money on the Left” podcast linked here and above. But the best introductions are the writings of L. Randall Wray, Stephanie Kelton, and other scholars associated with Modern Monetary Theory. Kelton’s contributions have been especially visible of late (in Bloomberg and The New York Times, for example) in part because of her work with Congress and with Bernie Sanders’ presidential campaigns.

In short, money matters in ways that conventional renderings of finance too often ignore. Money is a form of debt and debt obligations both enable and structure economic development. For these reasons, public policy’s history of shaping creditor-debtor relationships deserves prominent place in our study of the American past and present.

Featured image (at top): FHA posters, Ewing and Harris, 1937-1938, Prints and Photographs Division, Library of Congress

David M.P. Freund, associate professor of history at the University of Maryland, is the author of  Colored Property: State Policy and White Racial Politics in Suburban American (University of Chicago Press, 2007) which among other awards received the Kenneth Jackson Book Award from the Urban History Association in 2007. He is currently completing State Money: Economic Growth and Market Mythologies in Modern America, a history of financial policy and free market ideology in the modern United States. 

[1] A government that monopolizes currency issue, denominated in the money of account, in this case the U.S. dollar.

[2] Alfred Marshall, Official Papers of Alfred Marshall, ed. by J.M. Keynes (Macmillan, 1926), 115. In a standard textbook account published in 1973, Paul Samuelson explained that “if we strip exchange down to its barest essentials and peel off the obscuring layer of money, we find that trade between individuals or nations largely boils down to barter.” Paul A. Samuelson, Economics (McGraw Hill, 9th edition, 1973), 55. As later editions explained, “societies that traded extensively simply could not overcome the overwhelming handicaps of barter.” Samuelson and William D. Norhous, Economics (McGraw-Hill, 18th edition, 2005), 511. Joseph Stiglitz and Bruce Greenwald agreed in 2003 that money is “hardly essential,” but rather “a convenient way of keeping score” and “of ascertaining who has claims on resources, . . . [T]hat is all. . ..” Joseph Stiglitz and Bruce Greenwald, Towards a New Paradigm in Monetary Economics (Cambridge, 2003), 293-4. For introductions to the evolution—and distortion—of Keynesian assumptions regarding money and risk, see J. Barkley Rosser, Jr., “Uncertainty and expectations,” and L. Randall Wray, “Money and inflation,” in Richard P.F. Holt and Steven Pressman, A New Guide to Post Keynesian Economics (Routledge, 2001) 52-64, 79-91.

[3] On earlier periods of reform by monetary sovereigns, essential reading includes L. Randall Wray, Money and Credit in Capitalist Economies (Edward Elgar, 1990), chp. 2; Geoffrey Ingham, The Nature of Money (Polity, 2004), chps. 5-6; Christine Desan, Making Money: Coin, Currency, and the Coming of Capitalism (Oxford, 2014); and Desan, “Money as a Constitutional Medium,” Law and Political Economy (May 14, 2019) https://lpeblog.org/2019/05/14/all-debts-public-and-private/?fbclid=IwAR1DAijmSL6PeZSKhEcSqkSUpDEuKfPtivp8FGN293O5UtP5zLl86JYEt-8

Beyond the Political History Paradigm: The new edited volume Shaped the State and Urban History

“Political history — a specialization in elections and elected officials, policy and policy making, parties and party politics — was once a dominant, if not the dominant, pursuit of American historians,” professors Frederick Logevall and Kenneth Osgood noted in a controversial 2016 New York Times editorial. “But somewhere along the way, such work fell out of favor with history departments … As a result, the study of America’s political past is being marginalized.” The two historians lamented what they perceived as the fragmentation of the sub-field into a cacophony of voices that made it difficult to separate “the signal from the noise,” to paraphrase Nate Silver. Responses came quickly on social media and the NYT printed nearly half a dozen letters to the editors both in support of and opposition to Logevall and Osgood’s argument.

About a year earlier the Miller Center at the University of Virginia held a conference, “Seeing beyond the Partisan Divide,” that brought together a host of scholars to “construct alternative frameworks for studying twentieth century political history.” Their efforts resulted in the recently published edited volume of essays, Shaped by the State (University of Chicago Press).

The conference preceded Logevall and Osgood’s editorial by almost a year and the edited volume followed it by nearly three. During this four-year interval, historians critically engaged the issue—and the contributors to Shaped by the State were no exception. Rather than push forward the traditional left-right/blue-red/liberal-conservative paradigm which Logevall and Osgood’s framing of the argument implicitly promoted, Shaped by the State reveals the structures that have created our political reality and shines a bright light on the continuities that become apparent when we refuse to place “politics” in a binary framing.

Neoliberalism word cloud courtesy of https://philebersole.wordpress.com/2015/11/14/the-assumptions-and-logic-of-neoliberalism/

What sorts of continuities do the authors discuss? Primarily, neoliberalism. In recent years observers have deployed the term to describe the current political and economic structure of the nation. As Kim Phillips-Fein notes in her historiographical contribution to the volume, neoliberalism as a concept now includes “the broadest dynamics of contemporary politics, and the emergence of a political sensibility that spans both political parties.”[1] The term, she argues, did not really come into broad usage until the 1990s, yet in many ways it is not new. Nor is neoliberalism tied to a particular ideology at least in regard to the left-right/blue-red/liberal-conservative paradigm; liberals and conservatives alike have harnessed their policies to this austere political vehicle. If historians only view political history under the left-right paradigm they surrender to “a hegemonic framework that reinforces artificial boundaries and locates policy formation and political conflict within boundaries and locates policy formation and political conflict within binaries rather than along spectrums,” writes Matthew Lassiter in the volume’s concluding chapter.[2]

Yet how can anything “neo” not be new, or at the very least an update of a historical concept or categorization? “Market forces” in American life, in political and economic rhetoric and policy are long established structurally; the language of ‘free markets”, particularly the idea that they represent a natural, unfettered requirement of democracy dominates American political discourse from its earliest days. For much of this history, these allegedly impartial forces of the market have nonetheless excluded large swaths of the population, notably non-whites and especially African Americans. Both Democrats and Republicans supported the discriminatory edifice constructed by the government during the 1930s; when the civil rights and Black Power movements forced change, Americans recast racism as a personal rather than structural problem, thereby obscuring the ways in which the larger system continued to marginalize groups. “Letting the ‘market’ decide became the meeting place of segregationist, liberal, and libertarian defense of white power,” Nathan D.B. Connolly writes in his essay.[3]

When viewed from this vantage point, the neoliberalism that many hail as a new development and also decry for hollowing out employment, diminishing government intervention, and privileging the wealthy and big businesses over the collective population resembles what Blacks have endured for centuries. “Indeed, to live as a ‘Negro’ under Jim Crow was to live in a so-called neoliberal age before the term had become fashionable. What we are experiencing today may simply be the black side of liberalism writ large, the blackening of the American polity as a whole. Whatever it is, there is nothing ‘neo’ about it,” asserts Connolly.[4] We are not in the middle of a new age, but rather an extension of the old one. Admittedly some aspects of our modern political and economic structures are new, but not the incentives that drive them, the parameters that bound them, and the foundations that uphold them.

In some ways, Shaped by the State is reminiscent of the seminal 1989 work, The Rise and Fall of the New Deal Order (NDO) a collection of essays that announced the death of Roosevelt’s social welfare state and ushered in what has come to be referred to as the age of neoliberalism (though to be clear none of the essays in NDO specifically used the term). Its contributors dutifully considered how multiple viewpoints and movements have worked to undermine the New Deal political order that grew out of FDR’s New Deal, and, while critical of the New Right, also assailed Democratic leaders for “vacillating and half hearted efforts … to make good on the promises of equality and opportunity so essential to the legitimacy of their political order.”[5]

This mural dedicated to the New Deal at the Clarkson S. Fisher Federal Building & U.S. Courthouse, Trenton, New Jersey pictorially captures the problematic aspects of New Deal legislation i.e. the privileging of white labor and interests over those of others; photograph by Carol M. Highsmith, 2010, Prints and Photographs Division, Library of Congress

Editors Brent Cebul, Mason B. Williams, and Lily Geismer credit NDO for incorporating “multiple traditions” into the contest that is American politics and for taking conservative and populist ideas seriously, which in turn led to a more nuanced and considered understanding of American political history. However, while valuable analytically and certainly a landmark work in the field, NDO’s left-right paradigm, like a fog enveloping the land, obscured a great deal as well: “it tended to subsume other crises, structures, patterns, and experiences of citizenship and historical development within the framework of these relatively few, unitary political traditions and established big narratives around the concept of crisis.”[6] NDO’s contributors and editors succeeded in acknowledging the ways in which the New Deal structure abandoned the class consciousness that had made it such a force in the 1930s and failed to deliver the same rights and benefits to communities of color as it did their white counterparts. Yet they viewed these results in strict binary formation: “If the New Deal ushered in a Reformation in American political life, then arguably the reign of Ronald Reagan constituted a Counter-Reformation.”[7]

Vice President Rockefeller addresses congressional Black Caucus full employment forum, here Nelson is shaking hands with Representative Shirley Chisholm, Rep. Walter Fauntroy and others look on, photograph by Thomas O’Halloran, May 20, 1975, Prints and Photographs Division, Library of Congress

NDO emerged just as the “transnational turn,” as it has come to be known, unfolded in the 1990s; contributors to the 1989 volume rarely considered how transnational forces shaped developments. Shaped by the State addresses this issue in several places. For example, Stuart Schrader explores the rise of the carceral state through the lens of New York Governor Nelson A. Rockefeller but places the notorious Rockefeller drug laws in an international context. The “aperture” of the burgeoning carceral state needs to be expanded such that historians better understand its “nascence, persistence, and effects,” Schrader insists. Long active in foreign policy circles, Rockefeller drew upon Japan as a model for his anti-drug legislation, yet it is also true that because the U.S. occupied Japan after World War II, the country’s drug laws descended from the United States’ own policies on the issue (which of course were predicated on very problematic racial logic of the time). “U.S. influence on postwar Japan baked racial inequality into [Japan’s] drug laws,” Schrader points out. Therefore the “inequality” of Rockefeller’s drug laws did not represent a “new” phenomenon “in New York in the years after the success of the civil rights movement.” Essays by Julie Wiese, Melissa May Borja, and Suleiman Osman also wade into transnational waters.

97815491483231Shaped by the State also aims to create a shared language. If the transnational turn of the 1990s sometimes downplayed the role of the state at the expense of transnational forces such as the flow of labor and capital across borders and regions, over the last twenty years scholars have reconsidered this position. Historians doing cultural and social history have incorporated the state as a central actor in their analyses, though many of these writers would not consider themselves political historians despite the state and politics occupying critical spaces in their work. As a result, no agreed upon lexicon exists to facilitate dialogue. As the editors argue, “the field lacks a set of organizing principles and theories, key questions and debates, and well established research agenda’s around which ‘traditional’ political historians and ‘unofficial’ political historians could make common cause.”[8] Shaped by the State attempts to do just this, or at least begin the discussion toward such an end while eschewing the red-blue/liberal-conservative scaffolding that often bounds it.

51ThUHwS2aL._SX331_BO1,204,203,200_Works like George Chauncey’s Gay New York, Nayan Shah’s Contagious Divides, and Matthew Lassiter’s The Silent Majority serve as models for the way forward; works that are inherently political and focused on the state and politics, but examine overarching structures rather than the ideological tribes that defined (and continue to define) our political culture. Chauncey explored the formation of gay culture in Progressive Era New York under scrutiny and later persecution by both liberal and conservative regimes. “[E]xclusive heterosexuality became a precondition for a ‘man’s identification’ as ‘normal’ in middle class culture….”[9] Shah examined how public health governance in San Francisco, again by both conservative and liberal leaders, surveilled, controlled, and discriminated against its Chinese population in the late nineteenth and twentieth century: “There is a persistent congruence between the public health logic of normal and aberrant and the racial logic of superior and inferior and their reconfiguration over time.”[10] Lassiter delved into the ways that suburban whites in the sunbelt during the 1960s and 1970s based their political identity and standing on property ownership, around which various rights and privileges were awarded even though they hinged on “structural mechanisms of exclusion that did not require individual racism by suburban beneficiaries in order to sustain white class privilege and maintain barriers of disadvantage facing urban minority communities.”[11]

51C+QhSlaJL._SX334_BO1,204,203,200_.jpgThese historical classics attest to how central a role urban history plays in investigations of politics. Though not every essay in the volume speaks to urban history directly, most do, and critically. Andrew Kahrl’s exploration of tax assessment policy and the ways it has penalized black homeowners is one example; David Freund’s investigation into the rise of money orthodoxy during the Great Depressions speaks directly to the fiduciary struggles of metropolitan America during the 1930s and the solutions the state designed to address them—which, as discussed above, demonstrates more continuity across traditional political divides than rupture. Sarah E. Igo, Sarah E. Milov, and Rachel Louise Moran contribute essays on the rise of the administrative state, data collection and public culture, labor law and union complicity with employers regarding safety regulations, and the role of gender and family in the political history of regulation (particularly the notorious “nanny state” we hear so much about). Though perhaps not urban on their face, each of these contributions further urbanists’ understanding of the processes driving metropolitan life.

Perhaps one way to summarize the collection’s contribution to and debate with political history can be found in relation to the 2016 New York Times editorial. Columbia historian Merlin Chowkwanyun, a participant and attendee at the 2015 conference in Charlottesville (and, full disclosure, a friendly acquaintance of the editors), responded pithily to the arguments put forth by Lovegall and Osgood by pointing out that the best historians utilize numerous analytical frames, methodological approaches, and data types when delving into historical inquiry. They do not ignore elite politics, but rather incorporate them into their analysis. Co-editor Brent Cebul agreed, noting in an email to The Metropole that the goal is to revive “a more coherent, inclusive, and capacious sense of political history.” After all, as the edited collection attests, the very state that has shaped us rests on a much broader political project than right-left/red-blue paradigms.

Editor’s note: This month we will be featuring posts, interviews, and discussions from contributors to Shaped by the State and specifically its relevance to urban historians.

[1] Kim Phillips-Fein, “The History of Neoliberalism” in Shaped by the State, Eds. Brent Cebul, Lily Geismer, and Mason B. Williams, (Chicago: University of Chicago Press, 2019), 351.

[2] Matthew Lassiter, “Ten Propositions for the New Political History,” in Shaped by the State, Eds. Brent Cebul, Lily Geismer, and Mason B. Williams, (Chicago: University of Chicago Press, 2019), 370.

[3] Nathan D.B. Connolly, “The Strange Career of American Liberalism,” in Shaped by the State, Eds. Brent Cebul, Lily Geismer, and Mason B. Williams, (Chicago: University of Chicago Press, 2019), 82.

[4] Nathan D.B. Connolly, “The Strange Career of American Liberalism,” in Shaped by the State, Eds. Brent Cebul, Lily Geismer, and Mason B. Williams, (Chicago: University of Chicago Press, 2019), 86.

[5]Gary Gerstle and Steve Fraser, “Introduction,” in Rise and Fall of the New Deal Order, 1930-1980, Eds. Steve Fraser and Gary Gerstle, (Princeton, NJ: Princeton University Press, 1989), viii.

[6] Brent Cebul, Mason B. Williams, and Lily Geismer, “Beyond Red and Blue: Crisis and Continuity in Twentieth Century U.S. Political History,” in Shaped by the State, Eds. Brent Cebul, Lily Geismer, and Mason B. Williams, (Chicago: University of Chicago Press, 2019), 4.

[7] Gary Gerstle and Steve Fraser, “Epilogue,” in Rise and Fall of the New Deal Order, 1930-1980, Eds. Steve Fraser and Gary Gerstle, (Princeton, NJ: Princeton University Press, 1989), 294.

[8] Brent Cebul, Mason B. Williams, and Lily Geismer, “Beyond Red and Blue: Crisis and Continuity in Twentieth Century U.S. Political History,” in Shaped by the State, Eds. Brent Cebul, Lily Geismer, and Mason B. Williams, (Chicago: University of Chicago Press, 2019), 4.

[9] George Chauncey, Gay New York: Gender Urban Culture and the Making of the Gay Male World, 1890-1940, (New York: Basic Books, 1994), 14.

[10] Nayan Shah, Contagious Divides: Epidemics and Race in San Francisco’s Chinatown, (Los Angeles: University of California Press, 2001), 6.

[11] Matthew Lassiter, The Silent Majority: Suburban Politics in the Sunbelt South, (Princeton, NJ: Princeton University Press, 2006), 4.