INTRODUCTION: The New Political Economy.

• Author: Lemann, Nicholas
• Position: A NEW VISION FOR AMERICA

THE RULES OF THE MARKETPLACE, ONCE MANAGED BY EXPERTS, ARE INCREASINGLY SUBJECT TO PARTISAN CONFLICT. GOOD--THAT'S WHAT THE FOUNDERS INTENDED. AND LIBERALS NEED TO BE THE VANGUARD.

In the immortal Federalist No. 10, James Madison wrote,

The most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government. That was back in 1787, before there was a ratified Constitution, when the U.S. government barely existed. But Madison's framing is instructive in a number of ways. He evidently assumed that the main source of political strife in the new nation would be clashes among economic interests, and that the main task of government would be adjudicating these disputes. Anybody who has ever spent time in a legislative body at any level will recognize the rough ongoing truth of Madison's observation. Back in the early days of the republic, globalist slaveholding plantation owners battled over trade policy with protectionist northern manufacturers. The First and Second Banks of the United States gave rise to fights over centralized financial power. There were disputes over taxation, territorial expansion, and "internal improvements" like roads and canals. Today, economic interest groups are still fighting each other: over trade, over the role of unions, over the power of Big Tech, over the transition to clean energy, and over a zillion other issues.

There is a disconnect between this version of politics and the version we typically get in contemporary public conversations. We are in the habit of thinking of noneconomic issues (abortion, immigration, policing) as being debated on their merits, often as fundamental moral questions, but of economic issues as being properly understood in terms of the technical management of "the economy" by experts, not of power struggles between interests. What's the unemployment rate? The inflation rate? The strength of the dollar? The trade deficit? How much is the Federal Reserve going to raise interest rates at its next meeting? How will the financial markets react? These are the kinds of economic questions one is likely to see addressed on front pages and on television news. The Madisonian version of the American political economy still goes on--not exactly behind the scenes, just insufficiently noticed--but it doesn't command our primary attention.

How did this happen? It seems fair--especially in the light of recent historical work that understands slavery as a form of...