Democracy Against Domination
K. Sabeel Rahman
Oxford University Press, 256 pp.
With the GOP empowered, Hillary Clinton defeated, and the Democratic bench looking remarkably thin, it is an open question what policies, politics, and politicians the Democratic Party will embrace. Thus far, their intraparty squabbles look likely to resemble those of the 2016 primary, riven by ideological and political differences about where to take the party and the country. Then, as now, Bernie Sanders offered a populist liberalism to the left of that expressed by many mainstream Democrats, including Hillary Clinton. This divide was especially clear in the candidates' debates over bank regulation. Sanders memorably promised to "break up the big banks." Clinton pledged to use the existing law, the Dodd-Frank Act, to police Wall Street. "I will appoint regulators who are tough enough and ready enough to break up any bank that fails the tests under Dodd-Frank," she said in an April debate.
The tension between these two plans goes beyond pragmatism versus idealism. It is a political-philosophical divide that stretches back to 1912, if not even further, to 1783. On the whole it is a debate between those arguing that the government should decentralize power and those saying it should regulate it.
In his new book, Democracy Against Domination, K. Sabeel Rahman, assistant professor at Brooklyn Law School and a New America fellow, throws new light on this old question and offers a compelling case for where the Democrats ought to go post-Trump. The book serves as an answer to a political stalemate. Since at least the 1970s, an overwhelming portion of political theory has been occupied by a single debate: Should the state use its power to correct for the inequities and failures of markets? Or should the economy be allowed to function with minimal state involvement? Liberals argue in favor of the former position; on the other side are the libertarians, who claim that markets are inherently more fair when allowed to function without onerous regulations that bring corruption and inefficiency. This academic debate mirrors our political disputes over the last few decades about state action in the economy. Liberals talk inequality and market failure; libertarians talk property rights and inefficient regulation.
Rahman attempts to explode this dynamic by offering another vision: populism. He writes that efforts to split up the largest banks manifest a populist philosophy best articulated by activists and policy innovators during the Gilded Age who argued that too much power was concentrated in the hands of bankers, railroad magnates, and other assorted monopolists, including politicians, and the political bosses of their day. The populists aimed to split up these great concentrations and create and maintain competitive systems. Sanders's call to break up the largest banks was of a piece with this tradition.
On the other hand, Dodd-Frank, Rahman argues, is more in line with the "managerial" philosophy of progressives like Teddy Roosevelt and the brain trusters who constructed the New Deal. The New Dealers saw the economy as unequal, inefficient, and prone to bubbles, and they determined that independent experts and agencies, insulated from popular politics, would help manage an economy that might better...