National Affairs occupies an important place in the American public square. Filling the vacuum left behind when The Public Interest closed its doors in 2005, National Affairs gained a reputation out of the gates in 2009 for its thoughtful, provocative essays on the most important issues facing America.
To mark the publication of the first National Affairs issue of 2011, ConservativeHome's Ryan Streeter posed 5 questions to Editor Yuval Levin on the left-right divide in America, changing the GOP, economic growth, replacing the health care law, and more.
Read the interview in its entirety. It's packed full of good stuff. Here are some highlights:
- "I think left and right mean more in American life today than they ever have before." The centuries old division between technocratic radicalism (the left) and defenders of mediating institutions and markets (the right) is manifesting itself in American politics more today than in the past.
- "[If I could wave a wand and change one thing about the GOP,] I would make it so that every time we are tempted to talk about the size of government we talk also (and more so) about the purpose of government." Republicans need a firm idea of what government is for, in order to structure the policy changes we need today.
- "Our tax system [when the supply siders came on the scene in the 70s and 80s] was a major impediment to growth. Today, reductions in marginal tax rates would have a much less significant effect." If Republicans really care about growth, they need a more creative, robust set of policies than relying on what worked in the Reagan years (see below for some of Yuval's ideas).
- "Two plain and boring words: defined contribution. That is the key to the conservative approach to reforming American health care." Replacing Obamacare requires a radical shift to up-front payments as a way to create a consumer marketplace that will in turn force providers to offer lower-cost options in a competitive marketplace.
- "American conservatism is exceptionally interested in...the way ideas and ideals intersect with concrete policy questions." National Affairs sits at that intersection, and should be required reading for all aspiring and current lawmakers.
RS: You're a University of Chicago Ph.D. who did his research on Edmund Burke, that legend of conservatism whose thought was central to some of the 20th century's leading conservative thinkers. Now you're sitting in Washington as Editor of National Affairs. How did your study of Burke inform what you're doing?
Well, the great thing about National Affairs is that it lets me stand at the intersection of the world of policy and the world of ideas, which for me is just about the ideal place to be. And it’s a place that lets me draw quite a bit on what I learned from Edmund Burke—who after all spent his career right at that intersection (at a far higher level, of course), as a great reforming politician who was also a great political thinker and writer.
I think American conservatism is exceptionally interested in that intersection, in the way ideas and ideals intersect with concrete policy questions. We want to take the American founders and the Constitution seriously while wrestling with the challenges of the day. That takes a combination of a deep sense of the American political tradition and national character together with a clear understanding of contemporary public-policy challenges. Our hope at National Affairs is to provide some guidance and help on both fronts, and so I think that by a lucky chain of coincidences I’ve actually ended up doing something that really lets me apply political ideas to policy questions.
RS: You've got a keen sense of how politics and policy affect each other and unite or divide people. Beyond the usual right-left divides in Washington, what are the major sources of difference and disagreement you see between today's major political ideologies or factions.
I’m actually always struck by the way in which our left-right divide encompasses a broad array of not only political but also cultural, social, and economic differences. On the face of it, the division of our politics into two camps seems peculiar and paradoxical—we’ve got one party that combines social conservatives with economic libertarians and another that combines social libertarians with economic statists. The tension between libertarian and communitarian impulses clearly divides each party internally. So why shouldn’t we have a party of social and economic communitarians and another of social and economic libertarians? But I actually think the coalitions we have make a lot of sense—both philosophically and (more importantly) as a response to the circumstances of American history and American life.
At the level of ideas, Western politics has long been divided (in very general terms of course) along the axis created by the response to the radicalism of the French Revolution, and then sharpened and clarified by the response to the radicalism of communism. The radicalism of the French took the form of an assault on what they perceived to be irrational traditional mediating institutions like the family, religion, and local ties in pursuit of a pseudo-scientific technocratic mastery of human affairs that was thought to offer the promise of more rational, just, and effective administration. The radicalism of the communists accepted that aim and added to it an assault on what they perceived to be irrational and unjust market economics in pursuit of a pseudo-scientific technocratic command economy that was thought to offer the prospect of greater economic efficiency, justice, and equality. The left wing of modern Western politics emerged to advance these two sets of views, with varying degrees of radicalism in various countries at various times. The right wing of modern Western politics emerged to oppose these views, and so to defend first traditional mediating institutions and practices, and second the market economy.
Americans, in this regard as in most regards, have been less extreme than our European cousins. Our left wing, therefore, has for the most part not consisted of communists or radical anti-family atheists (though we have had our share, to be sure) but of more mundane technocratic reformers and social activists who view traditional institutions (sometimes rightly, sometimes wrongly) as oppressive and unjust. And certainly in our time, with the left all over the world reeling from the collapse of communism and the growing decay of the welfare state, the left is on its heels a bit. But our political debates are still, to a great degree, defined by the debate between organic or traditional mediating institutions on the one hand and technocratic expert management on the other. That distinction is at the heart of the health-care debate, for instance. It is at the core of many of what we call the social issues in our politics. It is the essence of our economic policy arguments. And it is still what divides left and right.
Our parties today actually embody this division better or more clearly than they used to. There have always been conservatives and liberals (or progressives) in American politics. But until fairly recently, there were some of each in each party, so the parties didn’t so much embody as contain our deepest ideological divisions. Today, the parties come much closer to embodying those divisions, so that we really have a conservative and a liberal party. In the course of the second half of the 20th century, the conservatives were made to feel unwelcome in the Democratic Party, as it grew more culturally liberal and more aggressively technocratic. Friends of the market and friends of the family, threatened by a common enemy, found common cause in the conservative camp. This in turn made the Republican Party more decidedly conservative, and therefore made many liberal Republicans feel unwelcome, and turn to the Democrats.
So we find that the various social, cultural, demographic, and economic distinctions that fall along the axis of ideas that has given shape to Western politics for more than two centuries now fall pretty neatly along our partisan axis as well. Our parties are increasingly divided between adherents of expert management and pseudo-scientific rationalism in politics on the one hand and defenders of traditional mediating institutions and self-organizing markets on the other. Obviously tensions remain within each camp: the family and the market are not always natural allies, and neither are technocracy and equality. But there is both a historical and a philosophical logic to this division, it speaks to the debate at the heart of modern life, and so it persists. It has made our conservative party increasingly populist and our liberal party increasingly elitist, and it has made our politics increasingly sharp and clear (or, if you like, polarized and divided).
All of that is both good and bad, like everything else in life. But, to return to your question, it means that our partisan divisions today actually capture quite a lot of underlying social, cultural, and historical divisions. I think left and right mean more in American life today than they ever have before.
I would make it so that every time we are tempted to talk about the size of government we talk also (and more so) about the purpose of government. This would make us more focused on policy particulars than on vague abstractions, better able to offer an alternative to the left’s agenda rather than just slowing the pace of its implementation, and better able to speak to the aspirations of the larger public.
The out-of-control size and cost of government today are symptoms of the fact that we have lost sight of the question of what government is for. The answer to that question is not “nothing,” after all. But it is also not “everything.” A basic answer to that question, rather, is laid out pretty well in Article I, section 8 of the United States Constitution. Maybe modern life has piled some complexities and difficulties on us that require some additions to the list presented there, and of course the Constitution contains a mechanism for making such additions. But as long as we are obsessed with how much it all costs we are not able to focus on the more important question of how to make government more effective and energetic in those areas where we want it to act, and how to keep it from acting in those areas where we don’t (and where we therefore think that families, communities, and other mediating institutions should act instead).
The notion that government is just too big begs the question of exactly how big it should be, and causes us to quibble over exactly how much of the left’s agenda should be implemented and how quickly. We must instead propose our own agenda, our own vision of what government is for and how it ought to work. There are some instances of conservatives and Republicans thinking this way—the welfare reform of the 1990s is perhaps the most familiar. There ought to be more. If we can offer the public a better sense of what government should and should not do, the question of size and cost will be much easier to address.
RS: There's a lot of debate about economic growth right now - how to get more of it, which policy should precede which, and so on. Are there 3 or 4 main policies or ideas no pro-growth politician can live without?
This is a very important question. I think it is crucial for conservatives to make it clear to the public that our goal is not austerity but growth, not budget balance for its own sake but effective and fiscally responsible government for the sake of fostering growth. Growth is the key to social mobility, to our global competitiveness, to our ability to keep America strong and confident in the world. It should be at the heart of any serious economic policy.
The essence of the supply-side movement in the 1970s and early 80s was a change of focus from how to create more aggregate demand to how to create more economic growth (and an understanding of the fact that the two were not identical). For the right, this meant also a change of focus from fiscal balance to economic growth. That change of attitudes and priorities was the real achievement of supply-side economics, but the supply-siders also had at their disposal a very powerful tool to spark growth: reductions in marginal tax rates. Our tax system at the time was a major impediment to growth. Today, reductions in marginal tax rates would have a much less significant effect, because the rates are already relatively low, and their marginal effects on productivity are not nearly as great as they were in 1980. There are still places where cuts would make a serious difference, so tax policy would still be a critical part of growth policy, but there is not one clear policy prescription for sparking growth. So I think if we were to seek a recipe for growth it would have to involve a combination of policies and priorities that would reduce burdens on the economy while fostering the conditions for growth and innovation.
Policies that would reduce burdens might include lowering tax rates while broadening the tax base to encourage productivity and reduce distortions; bringing government spending and borrowing under control to ease the demands it makes on the economy; reforming our entitlement programs so they do not crush the next generation under their weight; radically easing and simplifying regulations to lighten the burden on businesses; and ensuring sound money through a more rules-based monetary system.
Policies that would foster growth would need to focus on building human capital (by, for instance, encouraging greater experimentation and more options in education, increasing skills-based immigration while securing our southern border, and finding small ways to encourage parenthood and child-rearing) and on building physical capital (by, for instance, creating more public-private partnerships for the development and upkeep of our transportation and communication infrastructure).
The key to all of this is that it needs to be part of a different vision of government—it’s not about tinkering with our welfare state but moving toward an approach to government that values prosperity and mobility over equality and stability; that seeks a thriving market economy with a safety net for those who need help to access its benefits, rather than a sprawling welfare state that views the market as merely a source of revenue.
RS: Let's say Obamacare were repealed tomorrow and conservative voters wanted to pick up their phones and tell their Representatives what they want instead - but didn't know exactly what to say. If you were advising them, what would tell them?
Two plain and boring words: defined contribution. That is the key to the conservative approach to reforming American health care.
The problem with our health-care system is that costs are rising too quickly, and therefore both bankrupting government and preventing too many people from being able to afford insurance. How do we keep costs down in our kind of economy? The left and the right each has its answer. The left’s answer is you force them down by government policy—put government in charge of purchasing coverage for everyone and let it set price controls that then shape the market. The right’s answer is you create a consumer market in which providers have an incentive to offer a better product at a lower price.
People on the left tend to think that the system we have now is proof that the right’s approach doesn’t work, since it’s a private health-care market and costs are out of control. But we actually don’t have a consumer-driven market in health insurance today; what we have is more like a government-dominated market. A consumer-driven market would be one in which consumers make spending decisions and so producers have an incentive to give them what they want at a competitive price. But our system today is dominated by three government programs or policies that prevent the emergence of such consumer pressure: Medicare, Medicaid, and the tax exclusion for employer-provided insurance. Each of these means that consumers do not make direct purchasing decisions, and each of them contains an enormous incentive to spend more, and therefore pushes costs up.
Conservatives would transform each of these from an open-ended benefit to a defined contribution: in each case, the government would provide consumers with a pre-defined amount of money to spend on health insurance (in addition to any of their own money they want to spend), and those consumers would then choose among an array of insurance options—options which would be regulated by the states, as insurance is now, but not micromanaged by the federal government. The purposes of today’s policies—to make sure that the elderly and poor can get insurance and to help the middle class afford it—would still be served, and indeed would be served more efficiently at lower cost. And market incentives would be aligned to promote lower costs more generally, rather than higher ones. The cost of the most basic or minimal coverage for catastrophic care would be likely to drop precipitously, to the point that just about everyone could afford it (if the exclusion for employer-based coverage were transformed into a tax credit and every family got $5,000 they could only use to pay for insurance, you can bet that $5,000 minimal insurance policies would emerge, neither consumers nor providers would leave that money lying on the table), and more expansive coverage would be within the reach of more families.
There is much more to be said about the details, of course (here is one very good paper to read). But moving from open-ended benefits to defined contributions is key.