As she strives to project joy and stability amid catastrophic hurricanes in the American South and an escalating war in the Middle East, Kamala Harris still faces an unusual task in the countdown to election day. At the same time that she must persuade uncommitted voters she is the “change” candidate, she must also defend and burnish the Biden administration’s key accomplishments, which continue to be viewed ambivalently in crucial states despite the enormous sums being invested in their infrastructure and industrial redevelopment. This requires careful manoeuvring for a candidate not known for a deep grasp of political economy. Under the anodyne banner of a “New Way Forward”, Harris is trying to convey she knows America’s economic system still fails too many working people without diminishing Biden’s record or upsetting the Silicon Valley power brokers financing her campaign.
Despite the populist overtones of her campaign launch – Harris praised unions and attacked “price-gouging” back in August – she has since reassured business leaders she is “pragmatic”, the word she used in a major economic speech delivered at the end of September in the crucial swing state of Pennsylvania. Optimistic progressives nevertheless believe Harris can rally voters by distilling Bidenism down to what one of its architects calls its core principles: “build” and “balance”. The first addresses major structural shortages, from re-establishing regional supply chains to accelerating housing construction, while the second is about ensuring government promotes fairness, justice, and basic security within a market economy. Together, they are meant to shape market behaviour and ultimately make the American social contract more egalitarian – and even, as ambitious economic progressives would have it, more social-democratic.
Still, the Harris-Walz ticket will have to do more than convince wary voters it holds firm to these principles. In fact, if the Democratic leadership as a whole is serious about solidifying a post-neoliberal order and owning the political era that follows, it is incumbent upon them to deal with the simultaneous over-complexity and fragmentary ambition Bidenism has displayed thus far. This is a fundamental matter of vision that goes beyond Biden’s poor salesmanship: above all, Bidenism itself lacks equilibrium between its major priorities, in replication of a political antagonism that has its roots in the ideological fault lines of the American Revolution.
The source of the problem is that the main philosophical traditions behind “build” and “balance” have historically been in tension with one another. One entails using public subsidies and trade barriers to build up specific industries to spur innovation and economic development. The other polices how firms and markets operate, whether in terms of their competitive practices or how they treat workers, consumers, and the environment. Or, to label this in the context of American intellectual history, Bidenism is an uncommon fusion of neo-Hamiltonian industrial policy and the Madisonian–Brandeisian view of dispersed and state-modulated economic power. The former approach dates to the first U.S. Treasury Secretary Alexander Hamilton, who advocated numerous measures, including tariffs, to stimulate manufacturing; the latter descends from his rival James Madison, another Founding Father, who believed competition buttressed self-government, as well as from the anti-monopoly work of the early 20th-century Supreme Court Justice, Louis Brandeis.
Harmonising these divergent visions of economic development is extraordinarily difficult, even though both require an active state. One, after all, cultivates powerful new economic players who then want to preserve their privileges, either through cornering the market or ensuring protection from foreign rivals. These firms typically justify mergers and concentration on the basis of the economies of scale and consumer welfare standard they offer. The other tradition seeks to promote fair competition in everyday economic life, while preventing abusive or deceptive practices. This goal has been pursued in a variety of ways, from the landmark breakup of John D. Rockefeller’s Standard Oil in 1911 to recent attempts under the Biden administration to ban noncompete clauses for employees, challenge Amazon’s extractive pricing schemes and halt the merger of two major supermarket chains. Neither philosophy, however, consistently commands a strong following among the public: workers, budget-conscious families, and entrepreneurs have migrated between the two based on changing perceptions of economic opportunity and security. Indeed, each school of thought approaches political coalition-building differently, as each involves a different conception of progress and distributive justice.
Efforts to combine them are further complicated by America’s two-party system and the range of interest groups in each party’s tent. It was only during the New Deal and the Second World War that left-leaning American policymakers aggressively combined industrial policy, including regional economic planning, with a bevy of programmes and antitrust measures to reduce inequality. In the process, this aligned pro-development modernisers in the agrarian South with progressive anti-monopolists and Northern trade unions, then a cornerstone of the Roosevelt-labour coalition. These efforts, however, were notably conditioned by Southern Democrats and foreign policy advisors who embraced freer trade on the basis that it would buttress America’s Cold War alliances and boost household consumption at no serious cost to America’s industrial base. On that front, Biden’s strategy to reshore strategic industries and partially decouple from China is a pronounced break with Democratic precedent.
A related challenge for extending Biden’s agenda is that the methods and goals of American economic policy have typically been divided between its main political parties. Though each party has adjusted its economic philosophy, sometimes dramatically, in response to sociocultural change, technological transitions, and international conflict, there are some enduring threads. In fact, even as the Democrats and the Republicans have substantially swapped political bases and regional strongholds since the 1970s, the parties continually gravitate back to these post-Hamiltonian or Madisonian paradigms that were forged in a much earlier time. Amid our uncertain “post-neoliberal” transition, this pattern seems to have made both more tentative and conflicted over how to expand their coalitions.
Consider the modern Democratic Party’s rather populist self-conception despite advancing a business-friendly industrial strategy. While Democrats partly compensated for losing the allegiance of poor Southern whites in recent decades by courting educated professionals, they still periodically lay claim to an anti-monopoly tradition stretching back to the 19th-century Populists. For an influential cohort of policymakers, this legacy remains integral to the party’s identity and purpose. But since at least the Nineties, invoking it has been more of a rhetorical flex than a matter of enunciating clear policy objectives, as Barack Obama’s and Bill Clinton’s campaign strategies plainly demonstrated. In the view of progressives such as Massachusetts Senator Elizabeth Warren and the think tanks championing Lina Khan’s sabre-rattling as chair of the Federal Trade Commission, the party urgently needs to reassert the state’s authority to regulate markets and prevent corporate concentration.
The subtext is that the Democrats’ routine defence of the welfare state and basic labour rights is by itself inadequate to the vital task of redistributing economic and political power. As Barry C. Lynn, a leading voice in the new anti-monopoly firmament, has argued, this approach is not “mere policy” but an “all-encompassing framework for seeing and shaping power in every corner” of the country and “extend[ing] the Constitution’s system of checks and balances” into the realms of production and consumption. For Lynn and his colleagues at the Open Markets Institute, a think tank that has strongly informed the Biden administration’s antitrust outlook, each individual attempt to rein in corporate power is not just about protecting workers and small businesses from predatory behaviour but rescuing fundamental democratic principles in a time of extreme inequality. Put bluntly, the neo-Brandeisians are admonishing the party leadership to check the power of Big Tech and venture capital, whose influence and pervasive rent-seeking are seen as driving the country toward neo-feudalism.
The economic legacy of the Republican Party, for its part, has swung between two wildly different visions of economic growth. In the decades between the Reagan revolution and Donald Trump’s takeover, it was concerned with large tax cuts, deregulating finance, and spreading globalisation under a maximalist “free trade” doctrine. A key premise was that low consumer prices furnished through the global supply chains of multinational firms would prop up American living standards. Yet prior to the New Deal era, the GOP was the standard bearer of a protectionist vision of industrial and commercial development. High tariffs were an article of faith, and while they engendered vested interests, particularly among railroad corporations and in heavy industries, they also fortified a diverse “home market” for value-added manufacturing.
Since being remade in Trump’s image, the GOP has lurched toward the economic nationalism of an older Republican vintage. Part of this effort reflects the fact that, in a strange twist of fate, it has lured working-class whites who felt betrayed by those liberal Democrats who not only made peace with globalisation, but in some ways accelerated it. But the GOP’s own policy realignment beyond trade protection was stunted by its stubborn adherence to “small government” tenets on most other economic matters. That impasse provided an opening for Biden to co-opt Trump’s neo-mercantilist view of trade, domestic manufacturing and strategic competition with China and merge it with a new strategy to catalyse the energy transition – one that favours import substitution and made-in-America requirements instead of cap-and-trade and politically toxic energy taxes.
Yet Biden’s pivot has not generated the electoral benefit that was expected. And to some extent it has come at the expense of other priorities. As encouraging as the actions of Khan and like-minded regulators have been, Biden’s agenda is indubitably weighted toward its Hamiltonian dimension, with its surplus of carrots over sticks to stoke investment. While targeted job creation and upgrading infrastructure are critical to shrinking America’s socioeconomic divide – the Census Bureau recently determined over 28 million people lived in a “persistent poverty census tract” – they take time to bear fruit and don’t directly address problems like financial predation, anti-competitive mergers, coercive employee contracts, wage theft and the general erosion of labour standards through gig work.
Many of those issues have exacerbated the cost-of-living crisis. And, as Biden’s bleak polling showed, the crisis has preoccupied a public long accustomed to the trade-offs of globalisation in spite of the despair and blight that offshoring inflicted upon many communities. With Americans’ confidence buckling, it is hard to inspire hope in long-term projects to spread fixed investment and clean energy. Working families and small businesses want immediate relief that staunches the loss of purchasing power experienced across a host of transactions. Understanding all the ways in which monopoly power is exercised isn’t easy, however. The neoliberal era’s constricted menu of policy choices deprived many people of the lexicon that once informed grassroots anti-monopolists and consumer advocacy groups. Outside pockets of renewed trade union militancy, most simply feel helpless in the face of corporate power, whether in the workplace or at the checkout counter.
Meanwhile, Biden’s laudable moves to revive manufacturing have been partly snagged by elevated interest rates, lingering supply chain issues and other murky market conditions. In all probability, this incremental pace has reinforced the sense among doubtful voters that, despite its vaunted price tag, Biden’s industrial strategy is an elite-negotiated, technocratic undertaking at a remove from more pressing concerns. That somewhat unfair perception highlights the predicament Harris has inherited in her showdown with Trump. The art of forging coalitions driven by shared economic goals is as much about incentivising existing constituencies as creating, in effect, new ones by unleashing economic opportunity. But Democrats haven’t figured out how to leverage Biden’s initiatives in a way that cures their persistent geographic weaknesses and counters the view among rural and Rust Belt voters that they now represent the Establishment.
As Biden’s exit nears, it seems that window may have been exaggerated. The catch-22 of the Biden administration’s grand experiment with Hamiltonian developmentalism is that there is not the same cross-class constituency for it as there was when the second industrial revolution and post-war era turbocharged US growth and fed a sense of boundless opportunity for a rising middle-class. In fact, the bloc of former Democrats and blue-collar independents whom Trump mobilised eight years ago and whom Biden’s agenda is meant to woo may be on its way to extinction. The grim irony is that these sort of voters – besides the green tech innovators, engineers, and investors whom Democrats have eagerly cultivated – were the target constituency of Democratic industrial policies dreamt up during Reagan’s presidency. Forty years later, the Democrats have finally enacted an industrial strategy with Wall Street’s reluctant blessing. But they still lack apolitical vision that resonates beyond their coastal strongholds, in places where the archetypal New Deal industrial worker has been decimated.
That challenge leaves Harris a very finite amount of time to press her case on the anti-monopoly front. So far, her words and ideas have been decidedly vague. While some analysts may view this as the best course in a tight race, it is to the detriment of a burgeoning movement that has punched above its weight. The tactic likewise sidesteps the chance to raise public awareness over the ways in which the economy can be re-democratised. In turn, Harris risks failing to show with conviction which aspects of Bidenism she stands by, and how she plans to actually foster an “opportunity economy” beyond piecemeal and means-tested measures.
With just weeks before the election, Harris has instead stressed the havoc Trump’s policies portend for the economy. In doing so, she has retreated from the more radical possibilities latent in Bidenism. Her recent anti-tariff stance, though pitched as defending everyday consumers, effectively removes one of the few sticks Bidenism has deployed to rebuild manufacturing. Her reluctance, meanwhile, to delineate how the rights of consumers and workers underpin a functional democratic capitalism – one that might conceivably repair the social fabric – only gives comfort to stupendously powerful tech and financial barons, who seek even wider latitude to exploit the rules of the game.
For progressives who hoped Bidenism might have been a bridge to social democracy, Harris’s position recalls the capitulation of Obama and the Clintons. Promises in her Pennsylvania speech to create new tax credits for sectors such as biomanufacturing, aerospace, artificial intelligence and quantum computing further suggest that industrial policy, once hailed as overturning neoliberalism, could become more niche and discretionary. From nearly every angle, her tepid reformism betrays an unwillingness to grapple with the relationship between individual empowerment, economic security, and national prosperity – and thus with the better legacies of American economic development.
Whatever the outcome of November’s election, it will be deemed a political earthquake – indeed, a reckoning for the losing coalition. But the effects on policymaking may prove less decisive than in 2016. Win or lose, the Democrats will be at a crossroads over an industrial strategy which has no broad constituency, while the GOP, with its anaemic and incoherent economic platform, will only be able to interpret the results as a referendum on Biden’s record. Most likely both parties will avoid conceiving of bold measures in the near-term. In fact, without a grassroots insurgency, the impetus to refine Biden’s experimentation – to combine Hamiltonian and Madisonian tools in a way that might broadly lift life chances and replenish community wealth in forgotten places – could vanish.
Still, should Harris eke out a victory, the anti-monopoly question will loom over a liberal establishment which clearly prefers collaboration with advanced firms to oversight and conflict. If the alignment deepens under her watch, shearing Bidenism’s populist edges, that raises the possibility of a near-improbable development: for a rump GOP to regroup around fighting tomorrow’s monopolies and cartels. In a country once galvanised by profound realignments, stranger things have happened.
