Postliberal Manifesto

REVIEW: 'Tyranny, Inc.: How Private Power Crushed American Liberty—and What to Do About It' by Sohrab Ahmari

(Credit: Penguin Random House.)
August 13, 2023

Postliberals are on the march. Whether it is decrying modern American conservatism, cheerfully embracing the administrative state, or insisting that tyranny is the natural fulfilment of Anglo-American classical liberalism, a slew of books written by postliberal intellectuals seeking to save us from the delusions of liberal order—political, legal, and economic—continue to appear.

The latest in this literary avalanche comes from Sohrab Ahmari, founder and editor of Compact, a self-described "Radical American Journal." That purported radicalness is central to Ahmari's analysis of the contemporary American economy in his new book Tyranny, Inc.

As the title suggests, Ahmari believes that Americans' freedoms have been pulverized by "the owners of capital." Significantly, Ahmari does not focus on corporate America's embrace of sundry woke causes in making this claim. He even refers to "so-called woke-capital" and indicates that corporate America's timidity before woke activists isn't that important in the wider scheme of things or is just a way for bosses to placate emotional lefties and make a few bucks in the process.

Instead, Ahmari argues that capital—in league with judges, politicians, free-market scholars, and think-tanks—has successfully put working Americans at the mercy of big business. Job insecurity reigns, Ahmari states, and justice is routinely denied to employees, consumers, and anyone who lacks "control over most of society's productive and financial assets." This tyranny "is the structural cause behind much of our daily anxiety."

This is not a new critique, let alone a radical one. To varying degrees, it's been core to criticisms made of American capitalism by progressives, New Dealers, Marxists, and Great Society types for decades. Figures ranging from John Kenneth Galbraith to Robert Reich have long insisted that American capitalism must be restructured to correct major imbalances that, they hold, unjustly favor capital at everyone else's expense. A common theme pervading these writings is the need for large, strong unions to defend workers alongside the federal government promoting worker interests.

What distinguishes Ahmari's reflections from preexisting critiques is that he locates his arguments within the context of the postliberal narrative, albeit one heavily oriented around economic class. The story goes something like this: The private realm of today's economy is not an arena for freedom. Rather, it is "a zone of tyranny." CEOs may not be able to jail you, but "unchallenged market power can impair our rights and liberties."

Making matters worse, Ahmari claims, is that an entire ideological superstructure exists to convince us that this tyranny does not exist. The "neoliberalism," he says, constructed by free-market thinkers like Milton Friedman and F.A. Hayek, combined with Americans' conviction that liberty is primarily about minimizing government coercion, prevents us from seeing certain realities: that, for example, consent in economic exchanges is not real for workers; or that property rights are a means by which capital can coerce workers. Hence, we must "unmask the structural class-based domination that gives purpose to the system." Workers must wake up in what Ahmari calls an "act of noticing."

It's not coincidental that Ahmari's phraseology resembles that of woke ideologues. The conviction that we are trapped in a web of "linguistic tricks" and that nothing is as it seems has been part of radical-left (and, for that matter, far-right) discourse since Rousseau. So too is the point of making such claims: If you contest the argument, you are obviously part of the problem and should be treated accordingly.

To make his case that Americans' freedoms have been crushed by their capitalist overlords, Ahmari marshals several data points. He highlights, for instance, individual cases of hardship. One example is a woman who worked in food service and was making her way up the income ladder. Then she had a baby. Suddenly she found herself having to work several shifts to cater for her family's life-necessities.

Only those with hearts of stone would not sympathize with these circumstances. But particular cases of distress do not constitute proof of systematic injustices pervading the American economy. Employees adapt to unexpected changes every day. Many subsequently end up in better jobs and life-situations. In fact, we learn that the woman eventually found a better, less-stressful administrative position 18 months after her baby's birth.

Another of Ahmari's themes is his insistence that the law overwhelmingly favors American employers over employees. Legal concepts like liberty-of-contract, he states, allow employers to require employees to sign away most rights of redress if they believe they have been unjustly treated. Ahmari doesn't, however, mention that one reason businesses engage in such practices is because we live in a highly litigious society in which trial lawyers view businesses and insurance companies as targets to be milked for all they are worth. Attention to such context, however, is consistently missing from Ahmari's tale of capital acquiring legal dominance over labor.

A similar observation may be made about Ahmari's criticism of at-will employment. It relies, he argues, on a false symmetry between the employee's right to quit and the employer's right to fire. According to Ahmari, an employee's freedom to quit is "the freedom to walk away into joblessness and financial misery"—and therefore no freedom at all.

Yet this ignores the fact that thousands of Americans quit their jobs at-will (leaving their employers scrambling to fill positions and absorbing the high cost of doing so) every single day to take on higher-paying, more personally fulfilling jobs, or positions that better fit their circumstances at particular points of life. Absent the symmetry of at-will employment, many employees would presumably find it harder to leave jobs they no longer find satisfying and continue earning wages lower than they could otherwise make.

But while Ahmari makes many of his arguments through lopsided accounts of employment law, it is not in the minutiae of Supreme Court rulings, bankruptcy law, or the functioning of private equity where he identifies the essence of private tyranny. For Ahmari, "legal tweaks aren't up to the full scope of the problem of coercion." These are epiphenomena of where the real action is to be found: the realm of politics.

The key to grasping this concerns Ahmari's argument that the canopy of ideas associated with what he calls "market liberalism," "market utopianism," "laissez-faire theory," and "laissez-faire ideology" has radically and wrongly constrained politics in America. This outlook, he holds, originated with figures like Friedman and Hayek denouncing the postwar world's interventionist turn. They advanced, he maintains, a conception of liberty that declines to accept that human freedom is relational in nature and inseparable from the question of power.

This is the liberalism, Ahmari believes, we must get beyond. For "market society," as he calls it, is premised upon one particular coercive relationship: that which exists between asset-less employees and asset-owning employers. Ahmari sees this embedded in market society's "class-structure." This power inequality, it follows, explains capital-biased employment agreements, undermines wage-earners' ability to realize economic stability in their lives, and gives employers an economic rationale to adapt to competitive pressures by reducing wages. The last of these, Ahmari argues, is precisely what "laissez-faire theory" proposes as the solution to unemployment.

So why, Ahmari asks, hasn't the state addressed these problems? His answer is that market liberalism actively seeks to depoliticize the economy, understood as a systematic effort to prevent the asset-less from deploying government to promote their interests. That, Ahmari insists, is why American manufacturing is weakening and private-sector union membership is declining.

Important facts, however, undermine the veracity of these statements. American manufacturing is, for example, not in decline. It is far more productive and resilient than often claimed, and consistently ranks at the top or near the top of most global manufacturing categories.

Likewise, private-sector union membership isn't just falling in America. It is declining across the OECD, including in nations with highly regulated labor markets, significant social democratic traditions, and laws that incentivize people to join unions: in other words, in countries not especially subject, by Ahmari's criteria, to Friedmanite-Hayekian "depoliticization." This suggests that many American workers don't regard unions as serving their interests and therefore don't bother joining.

As for American wages, the picture is way more complicated than might be inferred from Ahmari's picture. Some groups (e.g., men who did not complete high school) have seen their wages drop.

Nonetheless, there is substantial evidence that (1) wages and incomes for typical workers have not been stagnant for 30 years, (2) most American households have experienced broad quality of life improvements for several decades, and (3) Americans still generally experience upward economic mobility. Growth in total employee compensation (wage and non-wage compensation) in America, moreover, has matched productivity gains. Before COVID, the normal inflation-adjusted wage for America's regular workers (defined as "production and nonsupervisory" employees) was at an all-time high.

Whatever the awkward facts, Ahmari insists that the way to overcome private tyranny is through politics: more precisely, through reviving "socially-managed capitalism." This is how America can "tame economics" and bring "the neoliberal state" "bulldozing through once-familiar landmarks like 'Class,' 'Solidarity,' and 'Common Good'" to heel.

Examples of what Ahmari has in mind include postwar midcentury Western European economies. By his account, their mixture of markets and social democracy allowed workers to exert countervailing power to that of employers, especially through incorporating unions into sectoral bargaining arrangements. The fact that cross-country evidence shows that restrictive labor market regulations in EU states have raised their structural level of unemployment (especially for low-skilled and young workers) and privileges some workers over others, goes unmentioned.

Across the Atlantic, Ahmari claims, the New Deal helped usher in an America of "large private enterprise, high union density, and a vigilant administrative state that mediated between classes and coordinated economic activity." This produced a social consensus, he argues, underpinned by rising living standards for blue- and lower-middle class workers.

And yet, Ahmari notes, managed capitalism arrangements experienced considerable rejection across the West in the 1970s. He briefly lists several causes for this change of heart. One was the "wage-price driven inflation" of the period (though Ahmari does not acknowledge that this was heavily driven in countries like Britain by over-mighty unions). Ahmari does concede that "the complacency and sclerosis of some U.S. manufacturers and labor unions" played a role. Far, however, from seeing "political-exchange capitalism" as an exhausted project, Ahmari insists upon renewing this vision, one characterized by worker-activism and rejection of neoliberal nostrums.

Absent from this picture, however, is one elementary fact: Today's American economy bears little resemblance to anything like the market liberalism that Ahmari pillories.

Among other things, economic liberty has been declining in America since 2007, the Code of Federal Regulations keeps growing relentlessly, entitlement spending constituted a whopping 52 percent of federal government post-COVID outlays in 2022, and Medicare coverage continues expanding and is a key driver of our ever-expanding public debt. The most significant damage to wages since 2020 has been driven by the inflation generated by the Fed's quantitative-easing policies and the Trump and Biden administrations' spending packages.

These features of U.S. economic life underscore how the claim that an all-powerful capital and its laissez-faire enablers reign over America is yet another postliberal fairy tale. We live in a deeply politicized, mixed economy, and one that is becoming more so.

Therein lies the fundamental difficulty with Ahmari's book, and it is the same problem that bedevils American postliberals: Ideological vehemence and the desire to acquire and weaponize power consistently trump attention to facts. On such foundations, no political castle—or economy—can be built.

Tyranny, Inc.: How Private Power Crushed American Liberty—and What to Do About It
by Sohrab Ahmari
Forum Books, 253 pp., $28

Samuel Gregg is Distinguished Fellow in Political Economy and Senior Research Faculty at the American Institute for Economic Research. His most recent book is The Next American Economy: Nation, State, and Markets in an Uncertain World (Encounter).