I'm no economist, so I'll leave hypotheses about the explosion of entrepreneurship to
Paul Krugman. But the ideology of entrepreneurship shouldn't be ceded over to Ronald Reagan alone. When Obama said Reagan heralded "a return to that sense of dynamism and entrepreneurship that had been missing," he left out the role of the neoliberals, who arose around that moment to chart a more energetic ideological course between the Democratic Party's gridlock and the Republican Party's adoration of big business. The following comes from an
interview I did with Charlie Peters (which is where the picture comes from), the founder of
The Washington Monthly, and one of the leading lights of neoliberalism:
EK: One of the themes lacing [your] essay was how the neoliberal critique really took the idea that we need more risk in the economy, that people need to be more free to be entrepreneurs.CP: In the late seventies, there was this stagnation, and you desperately needed a rebirth of entrepreneurship. The neoliberals can’t take complete credit for this rebirth, because it was happening right as we were calling for it. It began to happen with people like Bill Gates and the Apple guy in their garages. Things were ready to explode. But as in so many revolutions that are desirable, it went too far. All these people got to be concerned not with just having the exciting new business, but with making more and more dough, to the point that it made no sense.EK: There was also a lot of praise for politicians like Gary Hart and Paul Tsongas, who were making the investor class a focus of the Democratic Party. That’s important for reinvigorating the economy, but somewhat neither here nor there when you’re talking about the risks and the gains for the poor, the less educated, or even the lower middle class. This is a common critique of neoliberalism, that the focus was almost myopically on the middle class, whereas traditional liberalism had focused more on the marginalized.CP: Well, back then it was so bad, you needed to encourage entrepreneurship. The situation has changed now. There began to be a need to address the terrible excesses of capitalism that occurred, and we began to hammer away at those.
In style, Obama's actually quite similar to the neoliberals of that era, the Harts and the Tsongas's of the world. It's that tradition he's placing himself in, even as he, like they, understand that the moment has moved on, and what's needed now is not fewer rules and more economic risk-taking, but stronger protections and an enlarged social safety net that
enable our risk-taking and dynamism. In the 80s and 90s, the pendulum swung towards risk and clear-eyed reformers saw that, and now it needs to swing towards security, and clear-eyed reformers see that, too. Historically speaking, Obama would probably be better off claiming membership in the tradition of the neoliberals than crudely invoking Reagan's spirit, but it's pretty clear that this is what he means, and where he fits.
