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Show Notes
Noah Smith, an economic commentator and Substack writer, once dismissed libertarianism as a relic of the past. But in a political climate increasingly defined by populist protectionism and authoritarian rhetoric, he's reconsidering. "There are worse monsters than the market," Smith recently wrote.
With Reason's Zach Weissmueller and Liz Wolfe, Smith explores the evolution of his thinking—from criticizing "thin libertarianism" focused solely on state coercion, to advocating for a more expansive, "thick" conception of liberty that accounts for institutional and corporate constraints as well. He also discusses how libertarians might shape political discourse despite being exiled from both major parties.
Sources Referenced
- "I owe the libertarians an apology," by Noah Smith
- Just Asking Questions with Derek Thompson: Democrats Must Change
- Just Asking Questions with Michael Beckley: China is Dangerously Weak
- Michigan Gov. Gretchen Whitmer on tariffs
Chapters
- 00:00 Reflecting on libertarianism and Donald Trump's rise
- 06:00 Revisiting financial regulation and the housing crisis
- 11:00 Thin vs. thick libertarianism
- 17:00 Censorship, coercion, and the role of private platforms
- 29:00 Tariffs, trade, and the antineoliberal left
- 37:00 The shifting power dynamics in the Democratic and Republican parties
- 45:00 Political homelessness and the libertarian intellectual wilderness
- 54:00 Industrial policy, mRNA vaccines, and the role of government
- 1:01:00 China, manufacturing, and national security
- 1:10:00 Argentina, Javier Milei, and libertarian governance in practice
Transcript:
This is an AI-generated transcript. Check against the original before quoting.
Noah Smith: I didn't understand what libertarianism had arisen in response to, and now that some of those things are coming back in the form of Trump, I see that libertarianism had more of a purpose than I realized.
Liz Wolfe: Were libertarians right all along? Just Asking Questions. Have you apologized to a libertarian lately? Today's guest has. "I owe the libertarians an apology," wrote pundit Noah Smith on his Substack. "It turns out there are worse monsters on the market."
"I've spent years making fun of Ayn Rand novels," Smith continues. "And yet, doesn't Trump's cronyism, disdain for private businesses, and relentless instinct for government control make him the perfect Ayn Rand villain?"
We're here to interrogate this mea culpa. Noah Smith, welcome to the show.
Noah Smith: Thanks for having me on.
Zach Weissmueller: So, Noah, you do have a deep archive of blog posts criticizing libertarianism. Now you're kind of sorry. Tell us why.
Noah Smith: When I was an economics grad student in the early 2010s, I really encountered a lot of people who were deeply libertarian. People would unironically just quote Robert Nozick and talk about how much they liked Ayn Rand. So it felt very near. Everyone fights the near enemy when they're intellectuals. If you live in a liberal city and you're inclined to argue with things, you'll argue with liberalism. I lived in a libertarian city/culture, so I argued with libertarianism.
At the same time, that was the Great Recession when it felt like our failure-you know, financial deregulation, and then our failure to intercede against a lot of the economic problems we were having, seemed to be causing a lot of issues in America and had really crashed the economy a lot. So it felt like a good time to beat up on libertarianism. I think those things combined were the reasons I criticized libertarianism so much.
But what I didn't know— I wasn't alive during the 1960s and '70s— I didn't see the ideas that libertarianism had been a reaction to. When you come up after the fact and you don't know the history of the thought there, I mean even the history of libertarian thought, if you study it, won't teach you this. It won't teach you the cultural milieu that people were responding to. Only studying history will teach you that—and even that only teach you part of it because history is very potted and sanitized.
You have to go to primary sources, see what people were talking about, what people were saying, and you have to read between the lines, and infer from what policies were being done. I mean, you look at Richard Nixon, you look at price controls and the Nixon shock and all these kinds of things. And you see libertarianism wasn't just responding to some lefty college kid challenging Milton Friedman clumsily at some town hall—which is from the famous video you can watch. It was also challenging a lot of the things Richard Nixon was doing.
I think that I didn't understand what libertarianism had arisen in response to. Now that some of those things are coming back in the form of Trump, I see that libertarianism had more of a purpose to be there than I realized, in terms of balancing out other ideas that were also bad, that had mostly been conquered and submerged by the time I started criticizing libertarians.
Liz Wolfe: What do you mean when you talk about the cultural milieu that libertarianism was reacting to? Which elements are you referring to?
Noah Smith: The New Deal arose in response to the Great Depression and response to the general underdevelopment of America. The New Deal started as an anti-depression measure but it took on all these long-term sort of projects like building the interstate highway system, making environmental regulations, and social insurance, and all the edifice of big government that we've built. I think a lot of that edifice was great and should be kept, but if reformed and tweaked, and whatnot. But I think that what that meant is that we'd—we spent so many decades coming up with big government solutions to every problem that we had—that there was an impulse to come up with big government solutions to every problem we encountered.
And so, when you saw things like inflation, the oil shocks, there was this, you know, impulse to use fiscal stimulus, which had helped us in the Depression, helped us in some small recessions after World War II. So, like, let's do that again.
No—well, I guess we didn't really do much fiscal stimulus, but monetary stimulus—you know, that had been useful. And so then, that stopped being useful in the '70s. And I think that's the classic example everyone uses, but there's other examples too.
So, for example, the Bretton Woods system said that the dollar is the reserve currency—the dollar equivalent to gold. It was a fake gold standard, where it really was the dollar standard.
And yeah—so, when that started causing trade imbalances, you know, we responded with trying to control trade. And that was a bad idea. Instead, you know, free trade—relative to where we were—probably was a good thing for us.
And it maybe wasn't a good thing with regard to China in the 2000s. Maybe it hurt us on the margin. But then, in terms of, you know, helping us in, like, the '70s, '80s, '90s—like those—I think that free trade helped us a lot compared to where we'd–
Zach Weissmueller: When you're describing yourself as reacting to the city around you, in this case I assume it's kind of like the community of economics bloggers in the 2010s who's like the one sort of microculture that might skew libertarian?
Noah Smith: I wouldn't say bloggers. I'd say economists and econ grad students. Economists themselves. The discipline of economics has a lot of libertarians.
Zach Weissmueller: You're describing these bigger fundamental debates that have now resurfaced. What were some of the major debates of that time that now you feel have been sidelined to focus on "is trade good?"
Noah Smith: Right. So, financial regulation. After the recession, we were like, "Oh my God, we deregulated finance, and then the economy crashed. Let's regulate finance. How do we do that?" And then we did Dodd-Frank, and then we stopped thinking about it—forever.
Then we had a tiny little mini banking crisis. In 2023, we had the failure of Silicon Valley Bank. And then the system worked. Everything held. That was taken care of quickly, and there were no real problems.
So, I think that debate over financial regulation has largely disappeared.
Debate over, like, fiscal stimulus—at this point, we're thinking, "How do we prevent all this debt? How do we prevent inflation?" We're not thinking about, "How do we get everybody a job?"
You know, people have a job now. And the question is, like, what do we do about this inflation?
Liz Wolfe: I am curious about what you're saying about financial regulation, and you mentioned that a few times as something that's very formative on how you came to look at the world.
But I'm curious—this is a very niche issue, a theory that's believed by some libertarians. I know some folks at Cato very much believe it, but I wanted to see what you think.
To what degree do you attribute the current sort of housing crisis to an overregulation in the wake of the Great Recession—specifically in the form of over-tightening lending standards, basically?
Noah Smith: I believe lending standards were over-tightened. How much the housing crisis is due to that is dubious because we haven't built enough housing to accommodate our growing population since the 1970s.
Liz Wolfe: Well, yeah, it's definitely a multi-causal type thing, but I am curious, because I feel like the "what's the right amount to regulate in the wake of a crisis" thing is something that people, in some circles, sort of skate past.
When it's like—I don't know—if that's part of why we're in such a bind with housing right now, that seems very relevant in terms of figuring out how to respond to future crises.
Noah Smith: So, I do agree that Cato is right in the sense that overregulation of lending standards—which was not really new laws passed—it was really just regulators being tougher. I think that was a big… that was the deal. That's a thing and needs to be pared back— and eventually was—pared back, actually. I think some of that was pared back.
Liz Wolfe: Go ahead.
Noah Smith: But I'm saying also, I think a lot of the tightening of lending standards was behavioral. It wasn't regulation entirely, because I think that simply people saying, "Oh my God, subprime," after the financial crisis and the housing crisis, I think that led a lot of institutions to be extremely conservative in who they lent to.
And that's just proximity bias. That's this recency bias. That's just like—if you cut your hand, you're wary around knives for a while. And that was what that was.
So, I think yes, regulation had something to do with it in terms of the attitudes of regulators, but really, ultimately, the changing attitudes of regulators and the changing attitude of bankers—and lenders—both came from the same reaction to the crisis. There's this very natural reaction of, "Don't stop doing the thing that just caused this pain."
And I think that there was an overreaction that needed to be overcorrected. And that it is now getting pared back. You know, sort of like… yeah, we're finding the appropriate level here.
Liz Wolfe: Why do you think intellectuals—especially on the left— feel the need to be so reflexively sneering toward libertarians? Why scapegoat the libertarians?
Noah Smith: Well, there's a number of reasons. One is that, you know, we have education polarization in this country, right?
You don't have a lot of conservatives among the intellectual set—among college-educated people, professors, whatever, right? So you don't have a lot of people saying, like, "Christ is King" among the university professors and educated people.
Who do you have on the right in intellectual circles? Well, you have some libertarians who say, "Let's leave things to the market."
So, if you have progressives—and, you know, people who think that our country is too conservative—maybe they were, like, bullied for being a minority religion or being gay or something when they were a kid. I don't know. Like, they have real sort of gripes with conservative culture in America.
But then they get into universities and the academic setting—or the professional setting—and they don't see a lot of traditional conservatives. And so, who do you fight? Who do you target as a conservative that you want to argue with?
You know, libertarians are the sort of Trumpist, you know, like, rightist intellectuals. And we have a few of those, right? We have the tech right.
But then—but I think that, you know, for a long time, libertarians were sort of the only conservatives that your average educated progressive ever met.
Liz Wolfe: Yeah, that sort of makes sense to me. But the thing that I'm curious about in your piece—I was trying to really understand: What type of libertarian are you critiquing?
One thing that kept jumping out to me is that it felt like you're objecting to a very specific type of libertarian—what we would call a thin libertarian. Someone who doesn't really conceive of how power and coercion can be used by institutions other than the state. They're primarily concerned with the relationship between the state and the individual.
But there are also a ton of libertarians—I would count myself one of these, I think Zach does as well—who are concerned by all the different entities and institutions who can create impositions on people's freedoms. Who can make it so that people don't feel free and they're not actually truly able to exercise free choice.
And so, I don't tend to conceive of it as just a thing between the state and the individual. I'm also interested—I mean, that's the most fundamental level that I am most concerned with.
But then, there is another level too, that I think about frequently. You know, do you feel like you're sort of straw-manning the thick libertarians?
Noah Smith: Well, one of the pieces that I wrote—one of the first sort of critiques of libertarianism that I wrote—was something called The Liberty of Local Bullies. At which point I wrote that there are mezzanine institutions in society—I just made that term up—such as companies, universities, churches, all these other things that can cause people to not feel free, even if it doesn't meet the sort of…
They don't have power in terms of—they don't have a monopoly on the use of force like the government. But then, you know—so, I was critiquing what you call the thin libertarianism of Robert Nozick, and of people like that, and of many economists.
You know, you look at George Stigler and Milton Friedman and their sort of libertarianism—which is the kind I encountered in the econ world—and you see that it is the thin libertarianism. It really is.
Nobody's looking at the economics of how people feel constrained by companies and churches—you know, universities. Nobody's looking at that in econ. They're all looking at government policy.
So that is—thin libertarianism is absolutely dominant in the econ world, when econ people think about these things.
Liz Wolfe: Was Friedman really just a thin libertarian? I saw him as somebody who was very concerned with—or interested in—how is it that when we change the relationship between the state and the individual and free up markets, what other sort of, like, you know, cultural flourishing that allows people to live more freely follows from that?
Noah Smith: I don't think he thought a lot about corporate power.
Liz Wolfe: Well, I mean-yeah…
Noah Smith: The way corporations make people feel unfree.
Liz Wolfe: You're talking about a variety of cultural institutions—you're not just talking about corporate power, right? You're talking about the way a church could be oppressive, or a HOA, or whatever.
Noah Smith: That's right. I mean, Milton Friedman also didn't think much about HOAs much.
Liz Wolfe: Well, I mean, yeah, they weren't as—
Noah Smith: What I'm saying is that thin libertarianism absolutely dominated in econ. And if you read that post, The Liberty of Local Bullies, I was advocating for more of a thick libertarian idea, although I didn't know that term at the time.
But I value freedom very strongly—it's a very strong value of mine. So in that sense, if you want to call anyone who thinks of freedom as a good in of itself as a libertarian, then I am one.
Thin libertarianism dominated so much among the libertarianism that I encountered for most of my life. And even now, honestly I appreciate the fact that there are thick libertarians out there.
And I like this—I'm going to spell it with two C's when I write that: thicc libertarianism. And I love that that's out there, and there are people who think of themselves that way. And that's a great way to be.
And I think that is where libertarianism needs to go. I think, you know, talking about directions where libertarianism needs to go—that's part of it.
I really only saw the thin kind until—well, even now—I see mostly the thin kind. Although, libertarianism is kind of breaking up and dying, in a way, as an intellectual movement. Which is a shame.
I want it back. And I would like it to come back along the lines that you're talking about, rather than along, like, you know, Robert Nozick.
Zach Weissmueller: I mean, I think where I've seen some of this play out in the real world is on the question of tech censorship—specifically throughout the COVID pandemic.
And I think a lot of libertarians were grappling with: how do you critique this? What is going on here in terms of the speech suppression? Should these private platforms be allowed to do it?
I think that the sort of proper libertarian analysis is usually to first look for any—if the state is, in fact, leaning on a private entity to create a coercive situation. And I think, in that specific case, it turned out that there was a lot of that going on behind the scenes.
We saw this jawboning happening between the CDC and the Biden and Trump administrations, and the social media platforms. So I think it's kind of like—the analysis has to start there.
But, I mean, you are right that there is through all of libertarian philosophy—Nozick, Hayek—the emphasis is on coercion. And the way Hayek looks at coercion is, it doesn't have to be perpetrated by the state. It can be perpetrated by private actors.
Coercion is basically subverting someone's will for your own—sort of exerting your will over somebody else's will by depriving them of some fundamental right.
And then the question is, what do you do about that? And the kind of classic libertarian would say, "That's why we have—we're OK with—courts, and police, and national defense, and stuff like that," because there are these other liberties.
We're going to bring this conversation back to, you know, the current political moment. But I am curious what your thoughts are on, like, just coercion—and being against coercion—being sort of at the base of libertarian politics.
Noah Smith: Yeah. So, I think what you're saying about—about internet, policing of speech—internet, you know, platform censorship, let's say—is exactly right.
And I think that that was a moment that made a lot of people who— a lot of libertarians—to the extent that a lot of libertarians even exist…
Liz Wolfe: There are dozens of us. Dozens!
Noah Smith: That moment made a lot of libertarians think about what freedom actually meant.
You had Randall Munroe writing that very preachy comic saying that, "if it's not against the First Amendment, it's not a restriction on free speech. It's just people who don't like you showing you the door." You've seen that one, right?
Liz Wolfe: Oh, yeah.
Noah Smith: It's a famous comic, and I think people see that, and you're like, "Actually, that's not right." But if you—if you believe in a thin libertarian, you know, Robert Nozick–kind of world—then it is right. But that—so, that can't be right. Something's wrong about that.
Our intuition about what freedom means—what feels free—contradicts that. And I think that that led a lot of people to really see the reality of what I called mezzanine institutions, which, in this case, would be an internet platform that is able to control your speech and your thought, despite not having a monopoly on the use of force or, you know, of any sort of coercion—, any violent coercion, you know, they can't break your kneecaps.
Facebook or Twitter will never break your kneecaps. But they still had some—there was some sort of power. And in this case, their power came from a network effect—a first-mover advantage combined with a strong network effect.
The fact is, it's really easy to duplicate Twitter, but the network that grew up around Twitter is incredibly hard to move. And so, I think that made people understand that that's a kind of power that has nothing to do with the monopoly on the use of force.
There are monopolies that are not based on the use of force that are also powerful—and that it's monopoly, not force, that really conveys power.
And I think that that is—that's a mezzanine—that's basically mezzanine institutions are institutions that have, you know, some sort of monopoly that's not force,
Zach Weissmueller: This was sort of driving me crazy as this debate was playing out—it's that the word monopoly was thrown around fast and loose, and none of these companies have a monopoly on network communication.
And then, when we think about how it all panned out in the end—the proposals at the time were, "We need the federal government to get involved," and, "We need to, you know, threaten them, strip away their Section 230 protections, and force this sort of government-mandated neutrality on them"—it turned out really not to be necessary in the end.
I think it was good that their relationship with the government was exposed by the Twitter Files and other things like this. But, in the end, Elon Musk bought X, Bluesky popped up, and it's like a totally different landscape now. And there was no need for some sort of intervention.
So, it seemed like this particular example—while it's worth criticizing bad moderation policies—is kind of an example of the market correcting that issue, right?
Noah Smith: Maybe. But if you're talking about monopoly versus oligopoly, I think it's a bit of a weak point because if you have three platforms and they all—and those three platforms are the only game in town…
If you're talking about consumer prices, it's fine. If Walmart and Target compete with each other's prices to zero with a sort of Bertrand competition—if you know what that is—that just basically means two big players compete their prices to zero, and you don't need, like, 20,000 players.
So if you have that, it's fine.
But then, I think in terms of speech, if you have three big platforms, and they all have people who control speech quite tightly, you still have restrictions. Even though you have three, you have competition among those three, but it doesn't really help, because they all do censorship.
Maybe not even in the same way, right? But maybe they each do censorship. So, no matter what platform you're on, some of your ideas are being censored by the people at the top.
And so, I think this is—that's not a full solve, and not even a very important solve, what you're talking about. So, I don't think the existence of Bluesky has made social media platform censorship less of an issue for our society.
Liz Wolfe: You mentioned the monopoly side and talking about how the monopoly side is possibly more important than the force side. I totally, vehemently disagree. One of the things that I think libertarians are very correct to focus on, is the fact that coercion from the state—the threat of, "if you don't do this, we will lock you up in a jail cell, and deprive you of your rights and make it very, very hard for you to exist in a society as a free man" That's just a totally different level of threat than being banned for a while from Twitter or from some other social media platform.
Although I think it is very appropriate as a thick libertarian to be concerned by jawboning of companies- I think libertarians do a very good job of trying to prioritize and paying attention to, "What are the stakes here?" What type of liberty deprivation might you in fact encounter?
Being fired from your job can be awful, I think it's important that libertarians not discount some of that pain, and not overstate how easy it would be for somebody to legitimately hop between jobs, or localities, or neighborhoods, or whatever.
Like, if you feel legitimately closed out of the options, and it's a situation where transaction costs are very high, it's frustrating when the libertarians are sort of a little flippant about how easy it is to switch back and forth between jobs and neighborhoods.
But I do think that it is important—and libertarians do hone in on something really essential—which is: being fired from your job is profoundly… Maybe because a company engages in some sort of coercive behavior, and punishes you for your viewpoint, or something that you did that really is sort of outside of the bounds of reason—it's a totally different level of threat than the state threatening to lock you up in jail.
And I think that that is something that thin libertarians actually do a good job of communicating on.
Do you disagree?
Noah Smith: No, you're right. That's absolutely true. If you have a government that will come and put you in a death camp, break your kneecaps, or throw you in prison and beat your head in—that's more important than anything else.
I think the reason that thin libertarianism was so strong in the mid-century is because we were coming off a time period when many governments were really doing a lot of that. Look at the totalitarian states of the mid-20th century. They did a lot of it. And even we - America, whether we admit it or not, weakly imitates our enemies. We didn't do nearly as much as the Nazis or the Commies, or whatever. But then if you looked at what those people were doing, there was a lot of that.
[George] Orwell even talks about this in 1984 when, basically, the main character is really—he's worried about this and that they could do to him, but then, when they beat him up with truncheons—which is, I think, a British word for stick—when they beat him up with truncheons, then he's like, "There's nothing in the world worse than physical force"—physical pain.
That's right, you know, in a sense.
The monopoly on these physical things is so important to us. We are meatspace beings. Physical stuff is so important that it—it dominates the first-order effect.
But then you have all these important second-order effects. Such as losing your job or whatever, or just being socially sanctioned. I mean, like, there are cases where people will often die for social acceptance, and people who are denied social acceptance will sometimes just kill themselves for no reason. They'll just kill themselves. And, you know, because they feel like—
Which is not to say that physical violence isn't the most important thing—because I think it is—but then you… "most" and "only" are two extremely different concepts.
And so I think that thick libertarianism is a whole bunch of second-order effects that matter a lot.
I'm not using "first-order" and "second-order" literally correct here, but colloquially, I'm saying that that other stuff matters too.
First, get the violence thing pretty right. Have a government that doesn't throw you in a camp, right?
But then after that your job ain't done. You've got lots more to do. And I think that's where thick libertarianism should really come in.
And I think that's where the debate over internet censorship platforms really opened a lot of eyes.
Liz Wolfe: This is something that has always really bothered me about people's callous dismissals of the impact of cancel culture or even some #MeToo-type stuff. There's a little bit of the sense of, "Oh, you lost your job? Oh, your reputation got a hit to it? You'll be fine."
I just find the "you'll be fine" response one of the most insulting things ever. You don't actually know if they'll be fine. I don't know whether you from the outside can judge what "fine" is.
Some of these people in some cases lost their entire livelihoods or committed suicide. To me that doesn't look like "fine". It's always been a very frustrating thing to listen to people dismiss this absolutely wild harm done by the collective. Sometimes done in a very un-judicious way and and act as if well because it's not done by an actual big institution like the state well it doesn't matter. It doesn't affect people's lives. I think it has affected a lot of people's lives. And I just wish people had the ability to slightly expand their minds to be able to understand that you can't just tell someone, "You'll be fine". You don't necessarily know if that's the case.
Noah Smith: That's exactly right. I agree.
Zach Weissmueller: I think libertarians tend to feel cautious about stepping outside of the thin zone, because there's maybe a sense that that implies, well you need a regulation for it.
And that's not always the case. I think that if we're living in a free society, in a free libertarian society, there're gonna be problems. There's going to be maybe cultural movements that are censorious, or other voluntary arrangements that are constricting people's freedom.
At the very least, I think it's something that libertarians should think about voicing concern about, even if it's outside of the framework of, "is it the state doing it?"
But I do want to bring us back to the present day, Noah, and ask you about some examples you gave as to why you started rethinking your relationship to libertarians and libertarianism.
You highlighted some of the attitudes of prominent Democrats as a prime example of why libertarians are useful in the political discourse. One of them was Gretchen Whitmer, who gave a speech about tariffs—and we have a clip of that that I wanted to play.
Could you roll that, please, John?
Gretchen Whitmer Clip: "I'm not going to sugarcoat it. These last few days have been really tough for Michigan. Twenty percent of our economy is tied to the auto industry, which depends on a steady flow of goods from our largest and closest trading partners.
We're already seeing the impacts of tariffs. Auto companies are stockpiling parts and laying off workers. Suppliers are facing higher costs and delaying expansions.
I understand the motivation behind the tariffs. And I can tell you, here's where President Trump and I do agree: We do need to make more stuff in America. More cars and chips. More steel and ships. We do need fair trade.
No state has lived through the consequences of offshoring and outsourcing more than Michigan. So, as I've said before, I'm not against tariffs outright. But it is a blunt tool. You can't just pull out the tariff hammer to swing at every problem without a clear defined end goal."
Zach Weissmueller: We also had this statement from Bernie Sanders, who's been out on a major political tour:
"As someone who helped lead the effort against disastrous, unfettered free trade deals with China, Mexico, and other low-wage countries, I understand that we need trade policies that benefit American workers, not just the CEOs of large corporations. And that includes targeted tariffs, which can be a powerful tool in stopping corporations from outsourcing American jobs and factories abroad. Bottom line: We need a rational, well-thought-out, and fair trade policy. Trump's across-the-board tariffs are not the way to do it."
How does that make you feel about the state of the party and progressivism? These "I kind of like tariffs, but not the way Trump's doing it" takes?
Noah Smith: That's a very weak message and destined to fail. Trump's tariffs are either going to be rolled back—he's unilaterally rolled back some tariffs or paused some of them, I guess. Or they're going to hurt people. Either way, they're going to be bad.
So saying, "Oh, tariffs are sometimes good, but the implementation is wrong," is a weak-ass message. Bernie Sanders has been absolutely fiery and powerful when going after Elon Musk and going against DOGE, and saying [running] his "Stop the Oligarchy" tour.
But then as soon as its tariffs, the message falls apart and the attacks fall apart. That's because Trump has triangulated the anti-neoliberal left.
I have a lot of criticism for the anti-neoliberal left. I don't know if you want me to go into those. We could spend a lot of time talking about that or not.
Liz Wolfe: Well, describe briefly what you mean, just for those who aren't as steeped in this.
Noah Smith: In the years since the Great Recession, a progressive intellectual faction has coalesced around people like Elizabeth Warren and the Roosevelt Institute, the Washington Center for Equitable Growth, and the Hewlett Foundation.
These are intellectuals, right? I'm not talking about people marching in the street—activists. I'm talking about intellectuals.
This idea has coalesced that neoliberalism is the root of our problems, and we gotta stop neoliberalism. A lot of this is anti-corporatism. It's like, corporations are too powerful. And when they say "powerful," they don't always necessarily mean, like, power to set monopoly prices or whatever—or monopsony prices. They mean, like, politically powerful. The corporations' political power is oppressing us.
And this is why we don't have things, so that's what we need to go after. We need to be anti-corporate. That's the new thing. And this is how we'll be anti-neoliberal.
So instead of, you know, anti-market—just saying, "Markets suck"—we'll say corporations as entities suck, and their political power is bad. And so, it's not just a purely regulatory agenda, like "free markets suck, let's regulate them." It's the idea that corporations are bad actors—let's go after them.
And you see the neo-Brandeisian antitrust movement come out of this, right? It's the idea that we should go after companies not just because they raise prices on consumers or suppress wages for workers, but also because we think they have too much political influence and power. We want to knock down their ability to influence the political process. So we're gonna use antitrust to break them up.
That hasn't really worked in the courts very much because our antitrust law just doesn't support that. But that is the idea of Lina Khan and the neo-Brandeisians—the idea that political power is the key kind of power that needs to be fought.
And so, a lot of the anti-neoliberalism has coalesced around anti-corporatism. And it's not the only thing they've done. The anti-neoliberals are also in favor of industrial policy, which I like. I'm a big supporter of industrial policies, actually.
But then, they're also supporters of protectionism—which I'm not so much a supporter of. And then they're, you know, big supporters of unions—which I have nuanced views on. I think they could be good or bad, depending.
And so, I think that this anti-neoliberal faction has quickly made a lot of mistakes. Very quickly made a lot of mistakes that blew up in their face—really fast, you know, in just a decade.
Whereas, when you looked at Reaganomics—like, the Reagan conservative-libertarian-ish stuff—it took decades for that to really blow up in our face in the financial crisis, right? People complained about increasing inequality and stuff—but people didn't really get mad until the Great Recession. So, it took almost 30 years for this to blow up in our faces. And the New Deal? It took until the '70s for it to blow up in our face—like four decades. So even longer.
And so, I think, when you create a system of ideas designed to solve a set of problems—and it addresses those problems to the greatest extent it can—and then it overruns its original purpose and starts addressing things that it shouldn't be addressing and doing things it shouldn't be doing and then it blows up in your face.
This always happens. This happens with every single system of ideas we have, no matter how good it is. It's created to address the problems of the day, then it blows up in your face, and it needs to be retooled. Someone else needs to get their turn at bat. And that's how society progresses, I think.
But the thing is, the anti-neoliberal ideas were so anti—they were so reactive, so defined by what they weren't instead of what they were—that they fell victim to what we call the politician's syllogism, if you've ever heard of that.
The politician's syllogism is a statement that says:
Something must be done.
This is something.
Therefore, this must be done.
And it's wrong. That's wrong.
But essentially, the anti-neoliberals reached for any convenient or available tool with which to str