Book cover: University of Pennsylvania Press
In March 1990, delegates gathered at New Orleans’s beaux arts Fairmont Hotel for the annual conference of the Democratic Leadership Council (DLC). Many New Orleanians continued to call the hotel by its midcentury name—“The Roosevelt”—and in the early 1930s, Louisiana’s legendary populist leader Huey Long maintained a lavish suite there. To the conference-goers of 1990, this history was freighted with significance. For they had come to New Orleans, they said, to lay to rest the ghosts of twentieth-century liberalism.
The “New Orleans Declaration,” the DLC claimed, represented “a turning point.” They averred that “the fundamental mission of the Democratic Party is to expand opportunity, not government.” (Emphasis added.) The “old isms,” they pronounced, “have run their course … political ideas and passions of the 1930s and 1960s cannot guide us in the 1990s.” The DLC, soon to anoint Governor Bill Clinton of Arkansas as their chairman and presidential standard-bearer, were leaving the legacy of New Deal and postwar liberalism behind. They were, after all, “New Democrats.”
Or were they?
A wealth of scholarly and popular studies about liberalism and the Democratic Party since the 1970s has emerged over the last decade. The DLC, the most prominent faction of the so-called New Democrats, looms large in these accounts. Bill Clinton’s presidency constitutes the decisive repudiation of a midcentury and postwar liberalism that had embraced activist government and deployed it to fight socioeconomic inequality. Post-1970s history, in these familiar accounts, is a saga of “centrist backlash”: of liberalism transformed into “neoliberalism.”
For today’s resurgent populist Left, this liberal betrayal narrative is seductive stuff. Yet it obscures more than it reveals about the history of American liberalism, as Brent Cebul illustrates in his provocative new study, Illusions of Progress: Business, Poverty, and Liberalism in the American Century (Philadelphia: University of Pennsylvania Press, 2023).
Brent Cebul is among a pathbreaking group of historians, most prominently Lily Geismer, who compel us to reassess this preponderant narrative about modern liberalism’s rise and fall. Ranging widely across the landscape of twentieth-century American politics, Cebul traces liberalism’s history from the era of the New Deal in the 1930s and 1940s, to the New Frontier and the Great Society in the 1960s, to the economic and governing crises of the 1970s that foamed the runways for Ronald Reagan’s conservative counterrevolution. The book concludes with the rise of the New Democrats in the 1980s and 1990s.
Cebul focuses not on ideological disjuncture between eras of state- and market-orientation but on deeper continuities in the structure of political economy.
In the influential 1994 essay “The Protean Character of American Liberalism,” Gary Gerstle had argued that liberalism’s resilience up to the 1960s was explained by its being a “variable” political philosophy. Cebul, in contrast, argues for an essential continuity as he limns the “enduring boundaries” of what he describes as “supply-side liberalism.” This cleverly inverts a conventional association of “supply-side” with the Reagan-era New Right’s supply-side economics, which theorized that slashing personal and corporate taxes would incentivize private investment in business development and innovation. “Supply-side liberalism,” by contrast, is a governing outlook that links federal spending to economic progress. As Cebul defines it, supply-side liberalism as it evolved from FDR to Clinton involved market-oriented social policy, public-private partnerships, and the devolution of federal administrative authority, as much as possible, to local civic, business, and political leaders (whom Cebul describes, evocatively if rather sinisterly, as the “local power elite”).
By focusing on these “enduring boundaries,” Illusions of Progress reinterprets neoliberalism as growing out of midcentury and postwar liberalism rather than emerging in opposition to it.
Illusions of Progress is even more timely in view of the transitional moment in which liberalism finds itself in a populist-inflected, post-pandemic era. Political commentators are busy writing obituaries for the era of neoliberal globalization—and even sounding calls to restore activist national government in the name of “supply-side progressivism.” Yet a crucial feature of this era of liberal transition is that the policymakers shaping it are not of the resurgent Left but are longtime habitués of the corridors of power, Democrats who once presided over the neoliberal era. (President Joe Biden was himself a supporting player in the New Democrat dramatics of the 1980s–1990s.) This potential reinvention of supply-side liberalism is only legible in the context of the history traced in Illusions of Progress.
Both supply-side liberalism’s political durability and its disintegration after the 1970s can be explained by the essential ambivalence of its character. Its original advocates took pains to disguise the role that would be played by the federal government even as votaries from Washington to regional business associations to local political machines engaged assiduously in state-building. Cebul also argues that supply-side liberalism struggled to incorporate nonelite citizens into policymaking and administration—something that was preeminently true for communities of color—even as liberal state-builders proved able, for a while, to “deliver an expanding range of economic and social goods” for more Americans.
Cebul describes these ambivalences as fatal “contradictions and tensions,” but for decades, liberalism’s ambivalent character was a source of political strength. The liberalism that emerged during the 1930s was a political omnivore, drawing into its web naturally conservative constituencies among civic and business elites. Liberalism’s transfusion of national state capacity into locally-rooted public-private partnerships and its success in stimulating relatively broad-based economic growth paid handsome political dividends for Democrats. Their majority in both Congressional chambers remained intact for all but ten years (in the House for all but four) between 1933 and 1995; reflecting on Democrats’ electoral elasticity, Adlai Stevenson referred to them in 1952 as “the party of everyone.”
One of the strongest aspects of Cebul’s book is the fresh perspective he brings to the New Deal. After the election of Franklin Roosevelt as president in 1932, liberals in Washington cultivated the “local power elite” as partners. This partnership emerged when New Dealers saw business groups in smaller cities such as Rome, Georgia, as potential allies whose interests diverged from those of national, conservative big-business groups; the partnership was instantiated in the localized administration of New Deal agencies such as the Rural Electrification Administration and Tennessee Valley Authority. As the shadow of European totalitarianisms lengthened in the late 1930s, economic policymakers like Charles Merriam consummated a “marriage of public purpose and private interests” with conservative (sometimes Republican) leaders in larger cities such as Cleveland by stabilizing municipal financing regimes and refortifying local elites’ control over the local administration of federal funds.
Cebul argues that Washington’s retreat from comprehensive planning in the 1940s actually helped embed supply-side liberalism more deeply. As federal fiscal policy focused on boosting consumer demand, local political, civic, and business elites pursued forms of planning via market-shaping business development, infrastructural improvement, and urban redevelopment—all underwritten by federal money. The 1954 Housing Act, for example, established Section 701 grants to fund local strategic planning commissions. A bricolage of local and regional industrial policies rendered the supply-side state less visible even while securely mooring it.
Obscuring the public side of public-private partnerships, however, rendered the liberal state politically precarious when economic crises unfolded in the 1970s and globalization took root in ensuing decades. Especially amid the conservative-movement counterrevolution, the supply-side state’s invisibility made defending (much less expanding) the state politically unviable. Liberalism’s propensity for concealment endured long after its heyday; witness the Obama administration’s disinterest in promoting stimulative programs that were included in the American Recovery and Reinvestment Act.
Liberalism’s ambivalent character was illustrated more starkly still in the persistent failure to pursue what Brent Cebul terms “administrative enfranchisement.” Supply-side liberalism, he argues, worked to reinforce local socioeconomic hierarchies—most perniciously, hierarchies delineated along racial lines. A persistent democratic deficit produced problems in the liberal state that are now well known, from the omittance of categories such as farm and domestic workers in the 1938 Fair Labor Standards Act (excluding as many Black Americans as possible from wage and labor protections on behalf of Southern Democrat elites), to the imperial disregard for community input that marred postwar urban renewal.
Even the democratizing aspirations of the 1960s Great Society and War on Poverty were frustrated by liberals themselves. The 1964 Economic Opportunity Act’s call for “maximum feasible participation” was channeled into Community Action Programs, but both national liberals and local elites were unnerved by the ensuing increase in political participation (especially from Black community activists). Subsequent initiatives such as the 1966 Model Cities Program would fund locally devised social programs but be overseen by city government and contain more limited public “access” to decision-making. To be sure, the admirable policy goal was socioeconomic amelioration; but the political goal was, as President Lyndon B. Johnson put it, to “take charge of the goddamn thing … [and] just sidestep” Community Action Programs.
Cebul provides a revealing glimpse into liberalism’s ambivalences when he reassesses the now-infamous 1970 Powell Memo. Written for the U.S. Chamber of Commerce by courtly corporate lawyer Lewis F. Powell Jr. (subsequently a Supreme Court Justice), the memo looms large in today’s Left imaginary as a “battle plan” for free-market conservatism. Yet the memo is more accurately read as an enjoinment to restore close partnership between government and business following a disruptive half-decade.
While the most overt ideological challenge to interventionist government came from an ascendant conservative movement, supply-side liberalism’s exclusionary character and unresponsiveness opened it to challenges from the Left. Historian Paul Sabin details how, by assailing cozy relations between government, business, and big unions, activists from Jane Jacobs to Ralph Nader to New Left student radicals chipped away at the logic of liberal governance. The legacy of these challenges lingers on, as the Atlantic’s Jerusalem Demsas provocatively argues, through a NIMBYist version of “community input” that restricts local governments’ ability to construct housing and infrastructure.
Yet supply-side liberalism clung tenaciously to life. Ironically, given the sometimes overt racism of “local power elites” from the 1930s until the 1960s, many of liberal public-private-partnership-style governance’s most effective later practitioners were a new generation of Black and Hispanic politicians who had built careers in activist or community networks before securing power in American cities, from Andrew Young in Atlanta and Federico Peña in Denver in the 1980s, to Michael R. White in Cleveland in the 1990s. Even the emergent New Democrats of the 1980s, with their expansive plans for a national industrial policy modeled after that of Japan, adopted “a more interventionist stance in … the market than New Deal or Cold War liberals ever had.”
Supply-side liberalism’s ambivalent attitude towards the state and democratic participation only led to its political eclipse, Cebul argues, in a post–Cold War context of globalization, chronic deindustrialization, and widening socioeconomic inequality. In these circumstances, American liberalism could no longer promise sustained prosperity or growth—the fundamental prerequisite for its midcentury and postwar power.
Current prospects for some form of supply-side liberal revival arise in the context of populist political challenges and the COVID-19 pandemic’s exposure of weaknesses in the globalized economy (especially with regard to supply-chain resiliency). And all of this unfolds in the long shadow of the 2007–8 financial crisis.
The Biden administration’s nascent revival of industrial policy is more legible viewed in the context of long-term continuities (public-private partnerships, market-creating policies, growth-as-social-program) than it would be glimpsed through the prism of the liberal betrayal narrative.
The key issue—indeed, Cebul closes Illusions of Progress by gesturing at this—is whether, and how, contemporary political actors can resolve supply-side liberalism’s weaknesses, which leave it vulnerable to criticism from both the Right and the Left.
The obscuration of the state was a source of strength, for a time, because it fed supply-side liberalism’s political omnivorousness, drawing in local partners and eventually many national Republicans.
It is difficult to imagine this repeated in today’s starkly polarized environment. While the Biden administration’s place-based industrial policy faintly echoes the regionalized and localized industrial policies of the New Deal and immediate postwar eras, navigating a path to any sort of bipartisan support for an activist federal state seems beyond our current political capabilities. There also remains the question of confronting the democratic deficit of the liberal administrative state.
The view of many on the resurgent Left is that the way to resolve these limitations is through a self-consciously working-class coalition, joining working-class voters of color (who are already essential to the Democratic base) with white working-class support.
Something that this political case arguably dismisses is the social progressivism of contemporary suburban liberalism. The local power elite of Illusions of Progress were deeply invested in social and racial hierarchies. Contemporary affluent liberals, in contrast, trend strongly towards opposing these sorts of hierarchies.
One could object that social progressivism might not translate into support for economic progressivism, but there is reason to believe this is not the case. The 2020 vote to expand Medicaid in deep-red Missouri, for example, was won because voters in St. Louis’s and Kansas City’s more affluent suburbs joined with those in urban cores. As Zack Beauchamp has written, “the road to redistribution runs through the suburbs.” A key challenge for today’s would-be supply-side progressives, amid industrial policy’s revival, is to translate this emerging liberal constituency into partners for a new national-local project of state-building.
Illusions of Progress powerfully reveals how the earlier iteration of this project was secured, limited, and finally undone by its own contradictions. It offers an immeasurably valuable resource for understanding both the historical achievements and the profound historical failures of American liberalism—an understanding that is needed if liberalism is to be reinvented in the present day.
Henry M. J. Tonks is a PhD candidate in the History Department at Boston University whose research focuses on the Democratic Party from the 1970s to the 1990s.
