Today’s widening political gyre seems ruled by the raucous spirits of the populist, illiberal Right. But, as I have written previously, the rise of the illiberal Right is perhaps less important to understanding our current moment than is the transformation of political liberalism in the United States.
By “political liberalism” (hereafter, “liberalism”), I mean the policy ideas, governance, and formal politics of the Democratic Party. I do not mean the philosophy of classical liberalism. Nor do I mean a political philosophy substantively separate from the sphere of formal party politics. Indeed, it is possible that I do not refer to any coherent political philosophy at all. True, twentieth-century American liberalism boasted at least one noted theoretician, John Rawls. Yet Rawls’s enduring effort to craft a philosophical statement of American liberalism, A Theory of Justice (1971), is an exception to the rule. Historian Gary Gerstle once described American liberalism—by which he broadly meant a reform tradition that began at the turn of the twentieth century—as “protean.” In other words: American liberalism is what American liberals do.
Liberalism’s transformation played out over several decades, beginning in the mid- to late-1960s, when, according to postwar America’s greatest conservative public intellectual, Joan Didion, “The center was not holding.” This transformation entailed the collapse of the so-called “liberal consensus” that had structured U.S. politics, policymaking, and civic life since the New Deal and the Second World War. This transformation enabled the rise of the twenty-first-century illiberal Right in the country.
For several decades, U.S. historians paid far more attention to American conservatism than to modern, post-New Deal liberalism, and this is still basically the case. Go to most academic history conferences, and you will find more people talking and thinking about the Right since c.1945 than about liberalism since c.1968. (And historians of the Right are a lot more present on Twitter.) This historiographic situation is captured in a typical title of a survey of the recent past: the “Age of Reagan.” In the past decade, however, a new generation of historians has begun to pay serious attention to liberalism. Historians such as Lily Geismer argue that post-Sixties Democrats did not simply react to or mimic the Right. Rather, they had their own, distinct history. To deploy an omnivorous term from the twenty-first-century lexicon, post-Sixties liberals were co-architects, and not mere political losers, of the “neoliberal” order.
Liberalism’s transformation produced a dual outcome: political and demographic transformation twinned with policy stasis.
Liberalism’s transformation produced a dual outcome: political and demographic transformation twinned with policy stasis. My analysis of this dual outcome diverges, in subtle but, I believe, important ways, from the emergent conventional wisdom of the new generation of historians of liberalism. Many historians partake in what I describe as the “Liberal Betrayal Narrative.” But I see in this recent history neither ideological reinvention nor betrayal, but grand ambitions fatefully frustrated and constrained.
First, however, one must take some stock of what preceded liberalism’s transformation.
Liberal Order in Crisis: The “Great Shift” in America’s Political Economy
The rise of illiberalism, represented most significantly by the “MAGA New Right,” is sometimes seen as a long-brewing symptom of America’s social unraveling. Communications theorist Danielle Lee Tomson, for example, identifies a complex crisis of meaning, purpose, and “authenticity” as generative of America’s current political conditions. Donald Trump’s “populist” MAGA Movement provides its voters with a narrative—a political, but also a social and economic, story —whereas mainstream liberalism offers little in the way of imaginative power. At a summer 2025 conference, Derek Thompson remarked that “stories are for children.” Given that Thompson was the coauthor of a key book seeking to define contemporary liberalism, Abundance (2025), his comment neatly encapsulated liberals’ current political impasse.
It is certainly true that liberals and Democrats lack compelling political storytellers, with the exception sui generis of Barack Obama. In my estimation, however, this failure is downstream of material conditions: it has derived from the “great shift” in the American political economy that began in the late Sixties and continued through the 1970s and 1980s. This shift saw the midcentury and postwar liberal order (also called the “New Deal order”) supplanted by the “neoliberal” order.
The Democrats’ lack of narratives is downstream of material conditions.
Between the New Deal and WWII and the Sixties, the Democratic Party had built and maintained a durable political economy. This political economy consisted of: regionally dispersed industrial production; relatively high but not expanding (in fact, gradually declining) private-sector union density; a Cold War military-industrial-academic complex of high-technology research and development; and a pluralistic balance of socioeconomic interests within the political sphere. Moreover, this political economy was sustained by a fusion of Keynesian federal fiscal policy with local and regional “industrial policies” (or “developmental” policies), usually administered by the public sector in partnership with business elites. Historian Brent Cebul describes this mélange of public funds and private profit, economic planning and “free enterprise,” and elite technocracy as having formed American liberalism’s “enduring boundaries” in the twentieth century.
The success of this political economy into the 1960s stabilized American politics, enabling an elite civic consensus. It also allowed political leaders (especially in the Democratic Party) to gradually extend limited civil and political rights to marginalized communities of color without unduly unsettling the party’s core constituents among the “white ethnic” working- and lower-middle classes. For some time, conventional wisdom was that Sixties civil rights legislation drew Black voters into the Democratic Party. But more recent scholarship reveals that this move was a decades-long product of grassroots activism for racial justice, combined with the fact that even New Deal programs, which had been racially circumscribed by Southern Democrats, offered at least some tangible, material gains to the vast majority of Americans.
The great shift of the late-1960s, 1970s, and 1980s unspooled postwar liberalism’s political economy and rewove it with neoliberal threads.
Midcentury and postwar liberalism was, then, principally, a growth machine. The American political economy’s capacity to generate broad-based, regionally-dispersed economic prosperity legitimated liberalism and ensured Democratic electoral viability. The great shift of the late-1960s, 1970s, and 1980s unspooled postwar liberalism’s political economy and rewove it with neoliberal threads: the new American economy was globalized, financialized, and characterized by the clustering of economic dynamism in select urban enclaves.
Over time, this neoliberal political economy began to produce discontent. Despite periodic economic sanguinity— consider, say, the “peace and prosperity” of Bill Clinton’s “fabulous” 1990s—the neoliberal political economy fostered interregional inequality. The liberalization of trading relations with China at the turn of the twenty-first century produced concentrated job losses; even the U.S. commentariat’s most ardent neoliberals now see this as a misstep. More jobs in often lower-paid, more precarious service sectors obtained in less stable economic conditions.
Liberalism had depended on the prior settlement: its regionally-dispersed, production-oriented growth model. Therefore, the “neoliberal” order posed a serious challenge: where and how would Democrats construct a new political majority to replace the old New Deal coalition?
The answer lay in liberalism’s own transformation, unfolding alongside America’s great economic shift.
From the Union Hall to Whole Foods: Liberalism’s Transformation
Liberalism’s transformation can be summed up by a pair of 2016 statistics, courtesy of the Brookings Institution. In that year’s presidential election, Hillary Clinton won 472 U.S. counties; Donald Trump won 2,584. But those 472 blue counties “encompassed a massive 64 percent of America’s economic activity as measured by total output in 2015.”
The great economic shift of the late-1960s–1980s ultimately produced a more spatially concentrated political economy in which many prosperous Americans worked in the “knowledge economy”—sectors like law, finance, and consulting. And 2016’s inflection-point election made clear that the new order’s “winner” regions furnished Democrats with their electoral base. Liberalism’s center of gravity had shifted from the union hall to Whole Foods.
It should therefore be little surprise that a backlash against the neoliberal political economy might disadvantage the party seen to represent this system. Yes, the Republican Party under Ronald Reagan did the most to implement America’s post-1970s economic order. But as the age of illiberal populism dawned, the Democratic Party had come to be most visibly, publicly, culturally identified with the neoliberal order—with the postindustrial “knowledge economy,” and its cosmopolitan, diploma-toting habitués.
As the age of illiberal populism dawned, the Democratic Party had come to be most visibly, publicly, culturally identified with the neoliberal order.
We should not let the rhetoric of Right-populists fool us into thinking that the MAGA New Right’s Republican Party is a “party of the people.” Democrats retained working-class voters in America’s wealthy (and unequal) cities alongside their slice of the more upscale urban electorate; even in 2024, the year of an alleged “realignment,” then-vice president Kamala Harris won a slim majority of the lowest-income voters. Conversely, the bedrock of the modern GOP’s support is the exurban and rural “gentry” (as historian and podcaster Patrick Wyman astutely notes), more than it really is the working class of “left behind” regions.
We should not let the rhetoric of Right-populists fool us into thinking that the MAGA New Right’s Republican Party is a “party of the people”…Nevertheless, liberalism’s demographic re-composition has been a genuine, transformative phenomenon.
Nevertheless, liberalism’s demographic re-composition has been a genuine, transformative phenomenon. Democrats’ winning 2020 coalition, for example, depended on a consolidation and targeted expansion of suburban support (with college towns proving particularly fertile electoral ground). And Democrats’ highly-educated, often quite affluent metropolitan voters are not merely numerous, but disproportionately important to the party’s personnel and door-knocking cadres—as evinced by the spectacular, seemingly durable “wine-mom” mobilization of the Trump era.
This political transformation was rooted in the very success of the midcentury and postwar liberal political economy. Postwar prosperity nurtured politically-engaged Americans who were, as the New Left’s 1962 Port Huron Statement suggested, alienated from the U.S.’s affluence. The New Left provided a particular, radical-chic flavor of this political ethos. But in one variety or another, it came to suffuse American liberalism writ large.
A generation of liberal political actors entered Democratic politics between the mid-1960s and mid-1970s. I describe them collectively as “New Liberals” (think Bill and Hillary Clinton, and near-contemporaries like California governor Jerry Brown, Colorado senator Gary Hart, and policy entrepreneurs Robert Reich and Ira Magaziner). “New Liberals” shared a generational experience of the U.S.’s exponential postwar expansion of higher education, were generally urbanite or suburbanite, and promoted “quality of life issues” such as consumer rights and environmental protection. They had very little in common—sociologically, or, increasingly, politically—with the U.S.’s antediluvian labor movement. Bill Clinton was, in the admiring words of his courtier Sidney Blumenthal, “the leading meritocrat of America’s first mass generation of college-educated meritocrats”—a description that is apt not only for Clinton but for all his fellow New Liberals’ sociopolitical style and milieu. In a recent edited volume that explores the many manifestations of this new liberal political formation, from formal party politics to philanthropic foundations to public-interest law, Lily Geismer and Brent Cebul term these Democrats “professional-class liberals.”
The New Liberals spearheaded a demographic re-composition of the Democratic Party elite that presaged the wider, more gradual re-composition of its electoral base. Political analysts often use the shorthand “diploma divide” to describe this wider re-composition: Democrats’ slow-building advance to win more college-educated voters than Republicans, a trend that was incipient in the mid-1990s and blossomed in the Trump era.
Democrats became, between the order-reshaping 1970s and the age of populism, the party of the “winners” of the postindustrial economy.
Add this to Democrats’ predominance in the most economically dynamic—metropolitan—regions of the U.S., and one grasps liberalism’s political transformation. Democrats became, between the order-reshaping 1970s and the age of populism, the party of the “winners” of the postindustrial economy. (Until Trump 2.0, and MAGA’s alliance with the Silicon Valley island of misfit billionaires, Democrats even seemed poised to secure the loyalty of postindustrial CEOs alongside that of the postindustrial middle- and upper-middle classes.)
So far, most historians of the Democratic Party would likely agree with this account of liberalism’s recent history. This constitutes liberalism’s political and demographic transformation. The other half of liberalism’s dual outcome, however, has been policy stasis. And here I disagree with some historical scholarship.
Rethinking the “Liberal Betrayal Narrative”
The logical corollary of political and demographic transformation would be ideological transformation. Many historians identify such a transformation as having occurred within liberalism. Geismer’s Left Behind (2022), for example, charts an ideological reinvention of the New Liberals’ Democratic Party: broadly, Democrats led by President Clinton pursued “market-oriented policy solutions” and repudiated market-crafting government economic intervention of the sort identified with liberalism’s midcentury and postwar growth machine. (Infamously, Clinton declared in his 1996 State of the Union address that “The era of big government is over.”) Geismer makes the point, wholly overlooked by polemicists like Thomas Frank or Ed Burmila, that New Liberals’ fondness for public-private partnerships and their emphasis on prosperity as an antipoverty program evolved from midcentury and postwar liberalism.
In other words, New Liberals’ intellectual and governing predilections did not constitute a simulacrum of Reagan-style conservatism. Instead, they built upon a public-private partnership-driven approach to “market-making” established by Democratic policymakers in the New Deal era and perpetuated during liberalism’s postwar zenith. Recall Brent Cebul’s characterization of the “enduring boundaries” of American liberalism.
New Liberals’ intellectual and governing predilections did not constitute a simulacrum of Reagan-style conservatism.
Nonetheless, even a historian such as Geismer’s more revisionist historical narrative emphasizes an ideological reinvention. It argues that New Liberals took the Democratic Party from liberalism to neoliberalism, especially by embracing financialization and a postindustrial, services-based economy. This view forms the core of what I describe as the “Liberal Betrayal Narrative.” Commensurate with their political and demographic transformation of the Democratic Party, New Liberals abandoned the “big government”-style economic development that whirred away in the center of liberalism’s old growth machine.
This is a misreading, I believe, of the historical record. And a more accurate reading offers the clearest explanation of how liberals helped set the stage for illiberalism’s rise.
New Liberals like Clinton and Robert Reich embodied a Democratic generation materially untethered from the postwar industrial economy, and unburdened by any sentimental attachment to the union wing of the old New Deal coalition. Yet their formative program for government, which they crafted in national opposition during the 1980s and sought to implement at the state level, such as in Clinton’s Arkansas, offered no clear-cut repudiation of market-crafting, New Deal- or postwar-style liberalism.
The New Liberals collectively advocated a technological upgrade of the midcentury and postwar developmental growth machine.
Instead, the New Liberals collectively advocated a technological upgrade of the midcentury and postwar developmental growth machine. Certainly, New Liberals talked a good game about moving “beyond” or “past” the New Deal. But their program for government was a new national industrial policy, claiming inspiration from Japanese economic planning. Furthermore, the New Liberals argued that U.S. industrial policy had to target productive sectors of the economy. While they enthusiastically promoted technology (their original nom de guerre was “Atari Democrats”), the New Liberals saw their favored sectors as high-tech manufacturing, from advanced electronic consumer goods to semiconductor-chipmaking. (It was not a coincidence that the handful of Republicans who supported these industrial policy ideas, such as Pennsylvania senator John Heinz and Trump’s future trade advisor Robert Lighthizer, hailed from manufacturing-heavy locales.)
New Liberals believed, as far I can ascertain based on my research into more than two-dozen archival collections and interviews with political players from the time, that a new industrial policy targeted at high-tech production could reconstitute the regionally-dispersed, broad-based political economy central to liberalism’s earlier success, now via “future growth” industries. New Liberal governors across different U.S. regions similarly centered tech and manufacturing in their development initiatives: New Liberal Michael Dukakis’s “Massachusetts Miracle,” for example, prompted Bill Clinton’s efforts to make Little Rock (in the words of one aide) “a little Boston.” These bold visions are often forgotten in the “Liberal Betrayal Narrative,” and are crucial to our rethinking of it.
Equally as important, however, is what came next. In power, the Clinton administration’s New Liberals came under pressure from several directions: post-Cold War globalization, GOP midterm victories, the influence of financiers like Secretary of the Treasury Robert Rubin, and, most difficult of all, the socioeconomic position of their own base. New Liberals’ college-educated, metropolitan base owned prime real estate on the shifting American economic landscape. They were poised to become the “winners” of the postindustrial, neoliberal order, and so they were not politically mobilized by New Liberals’ bolder visions. Under the pressure of these conditions, New Liberals retreated from their grand ambitions for American industrial policy by the mid-1990s. In contrast to, say, the New Deal era— when constituencies like organized labor were set to benefit the most from Democratic domestic policies—the late-twentieth-century Democratic Party’s new core constituency, the metropolitan professional class, had a diminishing material interest in or connection to the New Liberals’ program for industrial policy.
The end result of this process of frustration and constraint was, I argue, policy stasis. Because the Democratic Party never underwent an ideological reinvention, it retained liberalism’s historic commitment to safeguarding and incrementally expanding the U.S.’s social safety net. However, since the New Liberals’ plans for reinvigorating a market-crafting government growth model had collapsed, the commitment to meliorative social policy evolved into an ethos that economists Ilyana Kuziemko, Nicolas Longuet-Marx, and Suresh Naidu term “compensate the losers.” And we see the results still today: the twenty-first-century Democratic Party seeks to redistribute the proceeds of geographically-narrow, postindustrial growth to the majority of Americans who have no material stake in the economic system.
New Liberals retreated from their grand ambitions for American industrial policy by the mid-1990s…The end result of this process of frustration and constraint was, I argue, policy stasis.
The historical developments that produced this arid liberal policymaking approach had all played out by the 2007-2008 financial crisis. Nonetheless, the Democratic restoration of 2008 reinforced it. The early Obama era’s soaring optimism, largely a product of the president’s nonpareil intellect and charisma, curdled into political disengagement. (Indeed, I believe it is possible that left-wing and liberal disappointment with the Obama era played its part in the last decade’s historiographic revival of scholarship on liberalism; many members of the new generation of historians of liberalism are left-leaning millennials.)
In one sense, President Obama faced even more severe constraints than Clinton: the Great Recession was a far worse economic crisis than the 1990-1991 recession, and Democratic policymakers in 2009 had to contend with a political economy wrapped tighter than ever in the tentacles of Wall Street. In another sense, however, the Obama Presidency demonstrated just how limited the post-Nineties liberal policy settlement was. Despite the rhetoric of “Hope and Change,” Obama’s team had, in my view, a less expansive vision of economic policy than the Clinton brain trust of 1991-1993. Until the aftermath of 2016, then, Democratic elites had all-but abandoned the bold visions that animated their New Liberal forebears.
This post-Nineties settlement constitutes policy stasis because American liberalism has been essentially devoid of intellectual inspiration and a sustainably compelling political narrative since the mid-1990s.
This post-Nineties settlement constitutes policy stasis because American liberalism has been essentially devoid of intellectual inspiration and a sustainably compelling political narrative since the mid-1990s. From the New Deal through the New Liberals’ ideas about restoring America’s industrial “competitiveness” in the 1980s, liberalism was animated by a vision of, policies for, and a story about broad-based economic growth. But the visions never could take off. And Liberalism has now lacked either vision, a set of policies, or a narrative for three decades. In this context, the illiberal Right—which, we must remember, first displaced an intellectually exhausted “establishment” Right—has emerged to provide its group of American voters with a new political, social, and economic narrative.
Beyond Stasis?
Ironically, given a popular association of “neoliberalism” with “growth,” liberals’ defining failure in the neoliberal order was that they did not talk persuasively, plausibly, or imaginatively enough about growth. Growth where, for whom, and how?
It was in this vacuum that Donald Trump and MAGA rose to power, purveying a neuralgic narrative centered—perversely enough—on a particular type of vanishing industrial job that many actual former workers, as commentator Matthew Sitman movingly remarks, hated. Nevertheless, the illiberal Right remains in power. Indeed, the threadbare reality of President Trump’s narrative only underscores the deleterious effect of liberalism’s transformation: the MAGA New Right does not even need an especially plausible or appealing story. They have made do with any story at all!
Readers may have detected eerie parallels between the New Liberals’ ideas in the 1980s and Democrats’ fraught suite of economic reforms authored in the interregnum between Trump’s presidencies and ill-fatedly dubbed “Bidenomics.” That industrial policy agenda was an effort at reconjuring a liberal narrative about growth and prosperity—indeed, some senior Biden aides like national security advisor Jake Sullivan tried to “sell” it politically in precisely these terms.
The political failure and electoral repudiation of that transitory effort should not prevent us from grasping the existential dividends of liberalism’s slow transformation into policy stagnation. While it is currently contested, the emerging “abundance agenda” potentially represents an effort to work out how Democrats can deploy ambitious policies more quickly and more effectively. Absent the transformation I have described here, the rise of illiberalism would be unimaginable. It is vitally important to study and understand 2026’s New Right, but we must also map the contours of liberalism’s transformation over the last few decades, since it too has helped to shape the unsettled political, social, and economic landscape that lies before us today.
Henry Tonks is a historian of industrial policy and twentieth-century American liberalism. He is a Postdoctoral Fellow in the Center for the Study of American Democracy (CSAD) at Kenyon College.
All images used are in the public domain.
