MARCH 27, 1995
In January, as the value of the Mexican peso plummeted, President Clinton, Majority Leader Bob Dole and House Speaker Newt Gingrich agreed to a U.S. Treasury plan guaranteeing $40 billion of new loans to the Mexican economy. The loans, it was hoped, would stop the peso’s fall and also save the investments of American banks and mutual funds that had bought high-interest Mexican bonds after the passage of the North American Free Trade Agreement (NAFTA). As Congress began debating the deal, hundreds of CEOs and business lobbyists led by John W. Snow, the chairman of CSX and of the Business Roundtable, thronged Capitol Hill. With the president, the congressional leadership and the major corporations behind the bailout, approval by Congress seemed assured.
But it didn’t happen. Democrats in the president’s own party, many of whom had opposed NAFTA, and six rebellious Republican freshmen, inspired in part by Pat Buchanan’s arguments against the bailout, rejected the deal. Within a week, the entire lobbying effort had collapsed. Clinton finally had to use his executive authority to guarantee the bailout, bypassing Congress and the constituents of the dissident congressmen.
The political uproar over the bailout demonstrated one of the best-kept secrets of American politics—the inadequacy of the ideological division between “liberals” and “conservatives” that we inherited from the cold war era. On this issue, the most hard-line conservatives were on the same side as liberals such as Ohio Representative Marcy Kaptur. Opposition to the bailout was neither a “left-wing” nor “right-wing,” “liberal” nor “conservative” position. It illustrated a growing fissure that cuts across conventional left-right distinctions in American politics—the challenge to the globalism of the American establishment by nationalism and populism.
The opposition to the bailout was clearly populist; hard-working Americans were being called upon to protect the earnings of the rich. ”We’re not bailing out the people of Mexico,” declared Representative Duncan Hunter, a California Republican. “This is a Wall Street bailout.” The opposition was also nationalist. “I had two town meetings over the weekend,” reported Texas Democrat Gene Green. “People were saying, ‘We have a hard enough time in this country for small businesses to get loans. Why should we loan money to a foreign country?’ ”
This combination of nationalism and populism surfaced clearly in the 1986 congressional elections, then in the presidential primaries in 1988 and in the primaries and the general election in 1992. Nationalist and populist sentiments underlay the appeal of Ross Perot’s “MADE IN THE U.S.A.” campaign and energized Clinton’s campaign against Bush. In both parties, nationalism and populism are embraced by the rank and file and rejected by the elites. Most conservative activists opposed NAFTA even though Republican politicians and think tanks supported it. Similarly, most of the Democratic Party’s base has favored some degree of trade protection, but liberal opinion makers at the Brookings Institution, The Washington Post, The New York Times, the Democratic Leadership Council and The New Republic have joined elite conservatives in opposing any challenge to free-trade orthodoxy. We believe that in the coming years, the political debate will be increasingly shaped by populism and nationalism. The question will be what kind of populism and nationalism.
The nationalist-populist revival in our current politics did not come out of nowhere. Two years ago, during the presidential campaign, it fueled the presidential race. The theme of Bill Clinton’s 1992 campaign was “Putting People First,” identifying American national interests with “those who do the work, pay the taxes, raise the kids and play by the rules.” In his economic program, Clinton promised a host of populist and nationalist reforms—putting able-bodied welfare recipients to work, curbing excessive salaries for CEOs, closing tax loopholes on foreign companies in the United States, ending tax incentives that reward U.S. companies for moving abroad, discouraging former U.S. officials from lobbying for foreign firms, attaching strong labor and environmental standards to NAFTA and getting tough on trade talks with Japan. These kinds of promises were integral to what the public believed when they thought of Clinton as a “different kind of Democrat.”
Once in office, however, Clinton reneged on almost every populist and nationalist plank in his platform. He waited until well in his second year to advance his welfare reform plan, and then did so only as a footnote to his health care initiative. He backed away from his promise to eliminate corporate tax deductions for salaries greater than $1 million by exempting stock options from a CEO’s income. He offered merely minor adjustments in the tax code for foreign firms in the United States and American multinationals, both of which were avoiding American taxes through transfer pricing. He did not remove the tax incentives that make it more profitable for an American firm to move from Michigan to Thailand than from Michigan to Ohio. None of these measures would have meant the end of the deficit; but they would have signaled the administration’s commitment to greater economic equality and to encouraging American firms to stay at home and employ American workers.
Similarly, Clinton’s tough talk on trade lasted about four months. Under pressure from the Business Roundtable, Clinton and U.S. Trade Representative Mickey Kantor withdrew their demand for commissions that would enforce strong labor and environmental standards under NAFTA. The administration put greater priority on whether an insurance company could open branch offices in Mexico than on whether American workers’ wages would be forced down by Mexican competition. When Clinton took office, he also promised to eliminate the annual $60 billion trade deficit with Japan by imposing numerical targets. Facing opposition from Wall Street and Japan, Clinton settled in September 1994 for the kind of vague promises that had nullified past negotiations with the Japanese.
Clinton did act in the nation’s economic interest by helping to reduce the deficit’s rate of growth. Deficit reduction fits this nationalist-populist model because it reduces the need for the United States to lure foreign capital by means of high interest rates and enables the United States to follow a more aggressive trade strategy without fear of monetary blackmail, either from Wall Street or Tokyo. Ironically, Clinton justified his deficit plan by saying that Wall Street’s bond traders had to be appeased if interest rates were to go down—capitulating to the financial blackmail that it is the purpose of deficit reduction to combat.
In foreign policy, Clinton and his advisers abandoned serious reconsideration of U.S. grand strategy and opted for a policy of inertia and drift driven largely by the strategies of allied countries (for example, in the Balkans) and the desire of the Pentagon to preserve cold war military commitments and spending levels. The Clinton administration’s combination of multilateralist rhetoric with cautious realist practice, though preferable to recklessness, has run the risk of making American aloofness in many conflicts look like the result of weakness rather than discrimination.
Clinton’s social policy has been divisive rather than unifying. In his campaign, by repudiating the racialist rhetoric of Sister Souljah and endorsing an expansion of college opportunities through national service, Clinton seemed to stand for an egalitarian nationalism rather than a sectarian multiculturalism. But once in office, he made great show of observing quotas in hiring appointees (while still reserving the positions of highest authority for the dreaded white males). More important, in recent months Clinton’s Justice Department has become the last defender of the most absurd forms of affirmative action, including a school board’s alleged right to fire a teacher solely because she is white.
Unfortunately, the new Republican majority in Congress doesn’t have any better solutions to the country’s problems. The Contract with America does not include a single word about foreign trade or foreign investment. The equivalent would be presenting a political platform in 1954 that did not mention the cold war or communism.
The Republican Party of Newt Gingrich and Richard Armey is committed to a primitive anti-statism and federalism that was anachronistic in 1895, to say nothing of 1995. Crippling the national government will not return power to the states, nor to the small entrepreneurs idealized by the Republicans’ favorite lobby, the National Federation of Independent Business. Nor will it fortify the family, already buffeted by market forces. Weakening the federal government would only strengthen the hold that large corporations, banks and foreign governments that do not subscribe to Republican superstitions already have over the lives of ordinary Americans.
Republican fiscal policy is utterly incoherent, mixing enormous tax breaks with a call for balanced budgets. The foreign policy of the GOP is similarly inconsistent: on the one hand, the United States is to pull out of international organizations; on the other, America’s military commitments are to be extended eastward in Europe with the expansion of NATO. Republican social policy is even more divisive than Clinton’s watered-down multiculturalism. In the name of equal opportunity, Republicans such as Armey want to do away with the minimum wage. In the name of a “culture war,” the conservatives cynically seek to exploit the divisions within American society over issues such as abortion, homosexuality and school prayer.
We are confident that Americans will eventually grow as disillusioned with the Gingrich-Gramm-Dole Republicans as they have become with Clinton and the Democrats. When they do, Americans are likely to look toward some version of nationalism and populism that has been erupting into our politics for more than a decade, long before the recent uproar over the bailout of investors in Mexico.
We have found that, among Washington’s policy elite, describing oneself as a populist or a nationalist invites scorn and derision. Both terms, however, describe political traditions with roots deep in the American past. Populism was the name of a movement that lasted only from about 1886 to 1896, but populist themes emanate from the country’s founding and have resonated through the twentieth century. Populism has been the classic movement of America’s middle class—from its small farmers of the nineteenth century to its small businessmen and industrial workers of the twentieth. Populists saw society divided between “productive” workers in the broadest sense, which included farmers, artisans, businessmen and merchants, and the “idle” and “unproductive,” which included coupon-clippers, vagrants and speculators. Like all political movements, populism has had its dark side. Under the populist banner, politicians have pushed everything from arcane monetary schemes to racial segregation to the expropriation of the rich. But what we would build upon is the conviction shared by populists and progressives—expressed most forcefully during this century by Theodore and Franklin Roosevelt, Harry Truman and Lyndon Johnson—that what government does must be judged by whether it benefits the great productive middle of our society.
Nationalism, too, has had its dark side, not just in Europe but also in America. Nativism was an important strain in American politics during the 1850s and the 1920s and is recurring again. But there is a constructive and inclusive current of American nationalism that runs from Alexander Hamilton through Abraham Lincoln and Theodore Roosevelt. It emphasizes not the exclusion of foreigners, but rather the unification of Americans of different regions, classes, races and ethnic groups around a common national identity. It stands opposed not only to nativism, but also to today’s multiculturalism and economic or strategic globalism.
We draw our version of American nationalism from Theodore Roosevelt’s “New Nationalism,” which was inspired in part by Herbert Croly, author of The Promise of American Life (1909), and founder of this magazine. ”The American people,” Roosevelt declared in 1910, “are right in demanding that New Nationalism, without which we cannot hope to deal with our new problems. The New Nationalism puts the national need above sectional or personal advantage.”
Roosevelt defined his “New Nationalism” on an analogy with Lincoln’s nationalism of 1860. Where Lincoln was concerned with the threat of a nation half-slave and half-free and divided between North and South, Roosevelt was concerned with the conflict between capital and labor and, secondarily, with the lingering sectional divisions between North and South and East and West. In the growing class conflict of the period, he saw the prospect of a newcivil war that would divide America and destroy the nation. Roosevelt was not a socialist: his solution was not to eliminate capital, but to tame and regulate it so that it could coexist harmoniously with labor. But Roosevelt also incorporated a central idea of Lincoln and of populism: that, in Lincoln’s words, “labor”—defined broadly in nineteenth-century terms of productive workers—”is prior to, and independent of, capital.”
America today faces a situation roughly analogous to the one Roosevelt and the progressives faced. Workers are not threatening to man the barricades against capitalists, but society is divided into mutually hostile camps: cities against suburbs, Northeast against Sunbelt, black against white. Particularly disturbing is the growing division along class lines—between a white overclass and an increasingly redundant and insecure working class in constant fear of tumbling into the underclass. It’s not so much the Balkanization as the Brazilianization of America, characterized by the increasing withdrawal of the white overclass into its own barricaded nation-within-a-nation, a world of private neighborhoods, private schools, private police and even private roads, walled off from the spreading squalor beyond. The goal of a new nationalism today is to forestall these looming divisions in American society.
Roosevelt also had a distinct idea of the American nation that differed from the right and left of his time. On the right, nativists argued that the American nation was defined by the Anglo-Saxon or Germanic race and the Protestant religion. On the left, cultural pluralists such as Horace Kallen and Randolph Bourne argued that the United States was, or should be, a federation of culturally distinct “nationalities”—Anglo-Americans, German-Americans, Italian-Americans—sharing only a common framework of institutions. Theodore Roosevelt and like-minded progressives rejected both nativism and cultural pluralism in favor of the idea of the “melting pot” (the popular play of that name was dedicated to Roosevelt).
In foreign policy, Roosevelt wanted the United States to be able to exercise military power commensurate with its economic wealth. Roosevelt’s principal foes were isolationists who believed that the United States did not need to play a role in the imperial conflicts that were convulsing Europe, China and Africa. But after his death Roosevelt’s allies such as Henry Cabot Lodge also opposed Woodrow Wilson’s utopian concept of collective security. Roosevelt was what we would now call a national interest realist.
Just as Roosevelt and Croly drew upon Lincoln’s antebellum nationalism, we would draw upon Roosevelt’s effort in the Progressive Era to define a “new nationalism.” That means, first and foremost, that we must discard the illusions created by America’s brief career as a military and economic hegemon. America emerged from World War II in a position of economic and military supremacy that even nineteenth-century Great Britain had never enjoyed: the United States produced half of the world’s goods; our manufacturers had no peers; and our military, bolstered by the atomic bomb, had enemies but no equals. The United States formed a military alliance against its principal rival, the Soviet Union, in which it assumed the costs of deterrence, equating the security of its NATO and Asian allies with its own. Similarly, in hope of eventually creating foreign demand for its own goods, it provided economic aid and open markets to its allies without demanding similar concessions in return. Such an unquestioning commitment to free trade is the luxury of hegemonic economic powers.
Cold war globalism, in defense and economics, was also accompanied by a redefinition of American national identity. Beginning in the 1950s, American leaders, who before 1945 had tended to view the United States as an Anglo-Saxon or Euro-American society, redefined the United States as a “nation of nations,” a federation of ethnic and racial groups united only by democratic idealism. The multinational United States, it was said, could serve as a model for the United Nations and a federal Europe; America was what the Soviet Union claimed to be, a multinational federation united by progressive Enlightenment ideology. Though few Americans have ever thought of their country as anything other than a nation-state, this idea of the United States as a non-national or post-national society became a staple of cold war rhetoric on the part of politicians and pundits.
Over the past two decades, but particularly in the past five years, these three pillars of cold war American globalism—strategic, economic and cultural—have been crumbling. The cold war is over—replaced by the re-emergence of pre-World War II tensions in Asia and ethnic hatreds in Eastern Europe. Japan shows signs of its own resurgent nationalism, while a united Germany has assumed greater diplomatic independence. At the same time, the American people, with the mortal threat of Soviet communism removed, are in no mood to support American policing of the world on behalf of Europe and Japan, as public opposition to intervention in Somalia and the Balkans has shown.
The United States has also lost its unchallenged industrial supremacy. Since 1971 the United States has repeatedly run trade deficits—not only in energy products, but also in manufacturing. While the world’s nations have signed a new GATT treaty, they have not prevented the re-emergence of trade conflicts among the major economic powers. Now that the contest between capitalism and socialism has been settled, a new ideological contest is emerging between national variants of capitalism—American free-market radicalism, Japanese economic nationalism and German social-market capitalism.
The conception of the United States as a multi-national democracy, epitomized by the multiculturalist movement, is also in retreat. Opposition to racial preferences and quotas represents a repudiation of the idea that the United States is a confederation of racial nationalities rather than a nation-state with a common culture. The backlash against escalating levels of Third World immigration reflects not just racism but genuine concerns about the displacement of the native-born working poor. Americans are sending a message: We Are Not the World.
Our challenge is to replace these outworn ideologies of cold war globalism with a politics that more accurately reflects our new situation. For that, like Theodore Roosevelt and Herbert Croly, we propose a “new nationalism.”
The first pillar of this new nationalism is economic nationalism. We believe that a strategy of limited protection for developing industries was critical to America’s industrialization in the nineteenth century, to the rebuilding of Western Europe and Japan after World War ii and to the emergence of East Asian capitalism today. We believe that a one-sided commitment to free trade was absolutely appropriate to mid-nineteenth-century Britain and to post-World War ii America. But in the late twentieth century, the United States is in a much more ambiguous position, still possessing the world’s largest market, but also highly vulnerable to foreign competition in many industries and incapable of competing in several, including areas of consumer electronics. This is not a situation in which a strategy of either rampant protection or one-sided free trade is appropriate. Instead, we advocate that the United States encourage free trade in the majority of goods and services. At the same time, it should reserve the right to protect industries such as machine tools and semiconductors that are important to the country’s well-being and the right to pursue managed trade negotiations with countries such as Japan and China that have proved resistant to open trading.
We have to adapt a similar posture toward American overseas investments. In the decades after World War II, the United States clearly benefited from the export of capital overseas. It helped rebuild countries into trading partners for the United States and also, in the case of Western European nations, reinforced their commitment to democracy and the Atlantic alliance. Capital investment abroad also spurred American exports of technology. But since the early ‘70s, capital investment abroad has accelerated deindustrialization, which has deprived many American workers of the kind of blue-collar jobs by means of which previous generations worked their way up the economic ladder. The United States has to do something about this: America cannot export its poorer citizens as European countries have done. We should not try to impede technological change, but we must remove incentives created decades ago encouraging American firms to produce abroad.
Ultimately American economic policy must meet a single test: Does it, in the long run, tend to raise or depress the incomes of most Americans? A policy that tends to impoverish ordinary Americans is a failure, no matter what its alleged benefits are for U.S. corporations or for humanity as a whole. ”I believe in shaping the ends of government to protect property as well as human welfare,” Teddy Roosevelt told a Kansas audience in 1910. “Normally, and in the long run, the ends are the same; but whenever the alternative must be faced, I am for men and not for property.” So are we.
The second pillar of today’s new nationalism is national-interest realism in defense. We reject both indiscriminate retrenchment and indiscriminate commitment abroad. We favor a new defense policy tailored to promote concrete American security interests in the emerging multipolar world.
The isolationism of right-wingers such as Patrick Buchanan and Jesse Helms is even more of an anachronism in 1995 than it was in 1895. As America’s relative share of world military power declines, participation in countervailing coalitions against potential hegemons will become more, not less, important. In the next century, the United States may be surpassed as the world’s largest economic power by an integrated Europe, or by a Chinese or Japanese-dominated pan-Asian bloc, even by a modernized India. As it did before World War ii, the United States may have to help other powers prevent a hostile superpower or alliance from consolidating its control over vast resources; no wondrous weapons systems like SDI will ever eliminate the need for military allies.
In advocating that the United States pursue its national interests by the traditional means of a conventional great power, we reject the misleading description of the United States as “the world’s only superpower.” The disproportionate power of the United States relative to Western Europe and Japan was a passing phenomenon caused by World War II; notions of U.S. global hegemony were already anachronistic by 1973, as Nixon and Henry Kissinger recognized. Today those who talk about a “unipolar world” believe that, by policing the turbulent Third World regions bordering Europe and Japan, the United States can preserve its cold war dominance. But American voters will not permit the United States to act as the security guard for the Europeans and East Asians and the latter will be equally unwilling to forgo pursuing independent military strategies. That’s how it should be: we fought two world wars and the cold war in order to prevent hostile powers from dominating these areas; our objective was not to achieve domination ourselves.
The third pillar of the new nationalism is a nation-uniting approach to social policy. We think the goal of social policy should be to reduce the growing disparity among economic classes. While we don’t believe absolute equality is possible or desirable, we share the faith of populists and progressives that American democracy is incompatible with huge disparities in wealth and power. We also believe the goal of social policy should be to carry forward and complete the movement toward equal rights in our society by eliminating discrimination based on race, gender and sexual orientation. But this must be pursued with an understanding that we seek equality as citizens of the same nation.
Our concept of America as a nation is at odds with the prevailing views on the right and the left. On the right today, nativists such as Buchanan and anti-immigration theorist Peter Brimelow argue that the United States must preserve its European “ethnic core.” Charles Murray and Richard Herrnstein warn in The Bell Curve about the supposed “dysgenic” effects of immigration by blacks and Latinos on the gene pool, while members of the religious right warn that American people must preserve the United States’ identity as a “Christian” or “Judeo-Christian” nation. On the left, multiculturalists view America not as a nation but as a collection of different cultures, a kind of miniature U.N. The multiculturalists want to use quotas, subsidies or even reparations to achieve economic and political parity with the abstract category of white men for each of the supposed “nations” of America—blacks, Hispanics, Asians, even women of all races and homosexuals of all races and both sexes. These policies end up exacerbating the divisions among “nations” while failing to make them more equal. We reject both nativism and multiculturalism.
The new nationalism differs from multiculturalism in holding that there is an American nation; it differs from nativism by defining that nation in terms of a common vernacular culture rather than race or religion. The political corollary of Roosevelt’s transracial melting-pot ideal is a revival of the color-blind integrationism of the early civil rights revolution—a revolution opposed by the racists of the right, and betrayed by the racists of the left. We believe that government-coerced tokenism should be repudiated, in favor of race-neutral programs, either means-tested or universal, that seek to integrate the disadvantaged of all races into the mainstream of American economic and social life.
In The Promise of American Life, the founding editor of this magazine wrote, “There comes a time in the history of every nation, when its independence of spirit vanishes, unless it emancipates itself in some measure from its traditional illusions; and that time is fast approaching for the American people. They must either seize the chance of a better future, or else become a nation which is satisfied in spirit merely to repeat indefinitely the monotonous measures of its own past.” Abraham Lincoln made the same point more succinctly in 1862. “As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country.”
Though the challenges we face today are different, the illusions that tempt us are the same as those that earlier nationalists warned against. It’s facile to believe we can dispense with large-scale governmental and economic organization and hope that a paradise of free individuals—the family farmers of William Jennings Bryan or the Internet entrepreneurs of the Tofflers—will spring up of its own accord. It’s naive to hold that, in our international affairs, power politics is un-American, or has been rendered obsolete by commerce and spreading enlightenment. It is a delusion (shared by Andrew Carnegie and William Bennett) to hold that the problems facing American society can be addressed by individual moral reformation, rather than by the redesign of our institutions and the rethinking of our strategies.
Can we meet these challenges? In the decades between Lincoln and Theodore Roosevelt, the country floundered as badly as it has during the last few decades. Their mountebanks were no different from ours; their corruption was even more pervasive; and their sense of political paralysis even more profound. Still, they were able to think and act anew. As we prepare to enter the next century, we believe that we are on the verge of a similar era of national renewal. Those of us who believed that we had missed out on the great struggles to shape the fate of the American nation were mistaken. The end of the American century draws near; but the promise of the American nation remains to be fulfilled.
John B. Judis is a contributing editor to TNR. Michael Lind, a senior editor of Harper’s, is the author of The Next American Nation, forthcoming from The Free Press.
This article appeared in the March 27, 1995 issue of the magazine.