By now the world knows about the revolt within the Republican Party over civil liberties and foreign policy, as Kentucky Sen. Rand Paul and others condemn PATRIOT Act–style encroachments on citizens' rights, Iraq-style projections of power abroad, and a drone war that threatens to blur the difference. Lately there's been talk of another rebellion, this one directed at the economic policies that have come to define much of the Republican Party, and for that matter much of the Democratic Party as well. The members of this movement, to the extent that a nascent tendency can be described as a movement, have been labeled libertarian populists—"libertarian" because they aim their fire at big government, "populists" because they aim their fire at other large, centralized institutions too. The LibPop idea is to take an axe to the thicket of corporate subsidies, favors, and bailouts, clearing our way to an economy where businesses that can't make money serving customers don't have the option of wringing profits from the taxpayers instead.
Ross Douthat of The New York Times has called this current "a strain of thought that moves from the standard grassroots conservative view of Washington as an inherently corrupt realm of special interests and self-dealing elites to a broader skepticism of 'bigness' in all its forms (corporate as well as governmental)." That skepticism generally takes the form of wanting to roll back corporate power by rolling back state power. But some LibPops are willing to flirt with more active anti-corporate interventions by the state, as long as they're aimed at undoing the effects of prior interventions. The man most closely identified with the "libertarian populist" tag, for example—Timothy Carney of The Washington Examiner—has endorsed the idea of breaking up the big banks.
In some quarters, libertarian populism has become not just a rallying cry for opponents of the corporate state but an idea for a new kind of Republican Party, one that, in Carney's words, "fights against all forms of political privilege." Here are three thoughts that anyone envisioning a new libertarian-populist GOP should keep in mind:
1. A libertarian-populist policy agenda has to be both libertarian and populist. Seems obvious, right? But if libertarian populism is going to be more than a slogan, it has to stay committed both to cutting back government and to battling privileged corporate interests. And there are two ways this can go awry.
In theory, any movement committed to limiting state power is going to challenge corporate power too, since so much of the state is dedicated to subsidizing or protecting different industries, from banks to broadcasters and from agribusiness to insurance. In practice, a politician familiar with free-market rhetoric will be tempted to fire it only at the easiest targets. It is easier to cut a tax than a subsidy, and it is easier to cut a subsidy for relatively powerless people than a subsidy for an influential lobby. Even figures who can boast a more pro-market record than the average Republican pol have been known to toss those tendencies aside when the right interest group is having trouble in the marketplace. Think about Steve Forbes endorsing a "temporary big role" for government—that is, a bailout role—in the economic crisis of 2008. Or, over on the Democratic side of the aisle, recall the ways the legendarily anti-spending senator William Proxmire of Wisconsin pushed to aid his home state's dairy industry. Give up the populist side of the LibPop agenda, and the libertarian side soon follows.
The other danger is that you'll keep the populism but lose the libertarianism anyway. After all, populism comes in many flavors. When a corporate powerhouse owes its position to the government yet the task of undoing the web of privilege that put it there looks too daunting, it's tempting to back a more conventional liberal measure aimed at bringing the business down to size. A potential case in point is Carney's proposal to bring the banks to heel via legislation to break them up. Big banks, he wrote, "inherently have too much political power, and...will inevitably use that power to guarantee bailouts."
That isn't a ridiculous argument, and I wouldn't want anyone to toss Carney out of the libertarian tent for making it. A federally mandated corporate breakup can be a net gain for economic liberty; when the Justice Department hammered AT&T in 1982, to give the obvious example, it ended a monopoly that had been created and maintained by the state. But the Ma Bell breakup also introduced a lot of new rules and, in the process, new ways for telecom companies to game the regulatory system. Carney suggests that "a blunt 'dumb' measure like size is not as prone to financial and political gaming as the 'smarter' plans that rely on regulators and politicians deciding what's best for us." That's probably true. But he goes on to suggest a still blunter measure—an anti-bailout constitutional amendment—that would be even harder to game, and would ultimately do more to keep the banks' size and power under control. Seems like a more promising crusade to me.