Economics Book Review: Edward Luce’s The Retreat of Western Liberalism

The Retreat of Western Liberalism
Edward Luce
Atlantic Monthly Press
2017
234 pp

The United States became a superpower not only by living open markets and democratic principles, but by promoting those values abroad. The U.S. was imperfect in this mission, but it was a solid foundation for the post-World War II order. And it worked well.

But now, those values might be slipping away, and the alternative isn’t pretty. The future is looking increasingly dim for liberal democracy. The Financial Times commentator Edward Luce writes a short, but impactful overview of why the small-l liberal values have eroded in recent years.

A Post-Mortem of a Generation of Politics and Policies

There have been plenty of post-mortems from the 2016 election, but this book is different. Luce wants us to consider that the election of Donald Trump was 40 years in the making.

Luce argues that the Clinton campaign played right into the hands of identity politics. That strategy was doomed from the start. Writing off half of the voting electorate as “deplorable” was bad. But the death knell of the campaign rang decades before Clinton’s campaign even began. Technocratic-minded liberals have ignored depressed economic and cultural state of white working class Americans for the entire post-industrial period.

But Luce argues that this isn’t as much the fault of Clinton as the general capital-L Liberal position of the past generation. Gone are the days of representing the working class. In is the idea of the rainbow coalition. By embracing technocracy – led by the “Berkeley-Harvard types” – the wants and needs of the white working class were ignored. And this has been going on for decades, and was embodied by the Bill Clinton/Tony Blair “Third Way.” As Luce notes, “The Third Way has remade politics. Lip service was still paid to the blue-collar worker. But the new left’s chosen politics was a form of anti-politics in which ‘whatever works’ had apparently replaced ideology. Beneath them was the void.”

The growing thread of racial resentment is gross. But it’s simply one symptom of letting that void simmer for decades. With a bit of hindsight bias, a populist reaction was almost certain in both the U.S. and the U.K. And that’s exactly what we got.

Luce mentions the Yogi Berra quote, “Predictions are hard, especially about the future.” Some of Luce’s own predictions are hard to square, just a few months after the book’s publishing. Because of this, it’s hard to take Luce’s hypotheticals at face value.

But that justifies Luce’s argument on the dangers of the Trump presidency, as well. Trump himself is so mercurial, it’s hard to know what will happen. This is a break from seven consecutive decades of America the stalwart. It’s hard to find upside in this volatility.

So what’s next for liberals?

The government of the United States was designed to tamp down populist movements. But now that Trump has risen to the top seat, Luce argues that the mechanisms that countervail populist uprisings don’t really have a response. There aren’t too many steps to turn our representative democratic system inward and make it a truly authoritarian body. As Luce notes, “Imagine how things would look with a competent and sophisticated white nationalist in the White House.”

But Trump himself isn’t the end-all to American democracy. Rather, Luce is more afraid of what comes next. Will liberal democrats (lowercase l and d) rise to the occasion and restore what made modern America great? Or will we allow our most base instincts, in a time of declining relative wealth and power, get the best of us?

Luce argues that the prescriptions that Trump offers have nothing to do with solving the insecurities of working-class whites. Massive tax cuts, rollbacks of Wall Street regulations, and repealing Obamacare are more likely to hurt his voting base than to help it. That presents an opportunity for liberals.

But it could just as easily present the greatest challenge to American democracy. If Trump fails, what will the next demagogue say and do to win over these voters?

Things might mean revert to the way things were – when America was the global beacon of western liberal values. But the extrapolation of the populism that has consumed America could just as easily spell the death of the liberalism. Luce isn’t optimistic.