The Fix for Everything-Bagel Liberalism Is Plain-Bagel Socialism

A lot of problems are best solved by dedicated policy agendas at the national level. But if you refuse to do big national policies, you'll wind up shoehorning patchwork fixes in wherever you can.

Credit: photo by Vova Kras, downloaded from Pexels

A specter is haunting progressive policymaking in America—the specter of the everything-bagel.

That was Ezra Klein’s take in an extensive New York Times op-ed a little while ago, arguing that progressives and Democrats often shoot themselves in the foot with a policymaking habit he calls “everything-bagel liberalism.” 

You might assume that when faced with a problem of overriding public importance, government would use its awesome might to sweep away the obstacles that stand in its way. But too often, it does the opposite. It adds goals — many of them laudable — and in doing so, adds obstacles, expenses and delays. If it can get it all done, then it has done much more. But sometimes it tries to accomplish so much within a single project or policy that it ends up failing to accomplish anything at all.

Klein uses examples like the CHIPS Act—new legislation trying to build some robust semiconductor manufacturing capacity here in the United States—which attaches a wealth of requirements to its subsidies: recipient firms must develop ways to increase hiring diversity; invest in local public transit, K-12 education, and housing supply; they sometimes must buy materials from American suppliers rather than foreign ones; and they must provide child care for their workers. The massive public investments the Inflation reduction Act is offering for green energy development come with a lot of similar requirements.

Klein starts the piece by looking at Tanahan, an affordable housing project in San Francisco, that went up unusually fast and for unusually low cost, because it was funded with private grants rather than public ones—which allowed it skip all sorts of rules about who it can hire, environmental review requirements, and other board approvals for various aspects of the project. “It is damning that you can build affordable housing so much more cheaply and swiftly by forgoing public money,” Klein concludes.

And he’s not wrong. Using public investments and industrial policy subsidies as leverage points to enact a buffet menu of progressive priorities seems like an excellent way to make sure a lot of that public investment comes to naught. Same goes for making those public investments run a gauntlet of zoning codes and enviornmental reviews and local board approvals. Yet America desperately—like, desperately—needs big and ambitious public investments, and needs them to work out.

At the same time, Klein doesn’t really offer any ideas for why Democrats and progressives got into the habit of “everything-bagel liberalism.” He hand-waves a final sentence about the need for “an intensity of focus that liberalism often lacks,” but that’s it. So presumably, the problem is just a lack of discipline among liberal politicians, or an unwillingness to tell particular constituencies “no,” or… something?

The thing is, if you can’t identify the “why,” you can’t really suggest ways to get policymakers out of the “everything-bagel liberalism” habit—other than scolding them.

“Everything-Bagel Liberalism” Is An (Accurate) Counsel of Despair

David Dayen was one respondent who wasn’t happy with Klein’s argument. He tweeted a whole bunch of examples of what happens when industrial policy doesn’t come with all these extra requirements and standards: you get a race to the bottom, where the employers who benefit from the public investment try to use the cheapest and most exploitable workers they can. They figure out ways to hire people who aren’t classified as employees, they wiggle out of using the unionized portions of their workforces, or they just abscond for right-to-work states where they can avoid unions entirely.

“The idea that you can’t put friction in the way of building or production is a path to a low-wage ‘jobs of the future,’ workforce,” Dayen argued. “And a surefire way to lose your political coalition because all you’re doing is sending workers through a grinder of McJobs.” Madeline Janis and Xavier de Souza Briggs also wrote a longform version of the same argument in The Prospect.

Granted, they agreed with Klein that the sorts of land-use rules and permitting and zoning issues that threatened the Tanahan project—which can also sink green energy infrastructure like large-scale solar and wind farms—are a real problem. But at the level Klein is concerned with, the land-use rules and the high-quality jobs rules all do the same basic thing: they add bureaucracy and red tape and gum up the works and make it less likely that the thing the government is trying to build actually gets built.

Neither Janis or de Souza Briggs nor Dayen actually engage with that argument, or try mount evidence that the “friction” these requirements create isn’t all that bad. They just assert that high-quality jobs are good, thus requiring that public investment create high-quality jobs is good. And presumably, we must simply accept the added frictions.

So this defense of “everything-bagel liberalism” is essentially a counsel of despair. Its implicit assumption is that America’s economic system and larger policy framework is so structurally biased towards exploitative capitalism—towards empowering owners to undercut workers and the broader public welfare—that the only tool we have is to use public investment to bribe, cajole, and force employers to do better. Addressing child care the way the CHIPS Act does, for example, is “a quiet acknowledgment, in the middle of the ostensibly ambitious CHIPS Act, that legislators do not believe America can build real support for parents,” as Leah Libresco Sargeant put it.

And there, I think, is the start of an answer to why “everything-bagel liberalism” happens, and how to fix it. Because in the short-term, at least, I fear that counsel of despair is correct. Which means that—assuming you actually give a damn about high wages, good work conditions, worker voice in their employment, affordable childcare, K-12 education, and all the rest of it—“everything-bagel liberalism” is a kind of best-we-can-do-right-now adaptation to facts on the ground.

Thus, the way out of “everything-bagel liberalism” is to change the facts on the ground; more specifically, change the larger ecology of the economic system and the economic policy framework that we’ve adapted to.

Introducing “Plain-Bagel Socialism”

Let’s stick for a moment with how the CHIPS Act deals with child care. Specifically, any semiconductor manufacturer that receives more than $150 million from the legislation must provide childcare for their workers, whether that’s by offering the service directly on-site, contracting with a child care provider, or giving their employees money to afford getting their own child care.

In Klein’s op-ed, Commerce Secretary Gina Raimondo’s offered an underlying economic logic for these requirements that makes perfect sense: among the workers who would build and run semiconductor manufacturing plants, unemployment is very low, and companies face labor shortages across the board. Which means every company needs to cast its hiring net as widely as possible. And if good childcare isn’t on offer, then they’re going to have a hard time hiring female workers in particular, even when those female workers have all the requisite skills.

Which is all totally true! But it’s true of every industry across the economy. Or, at least, it should be true. If we were running any sort of decent macroeconomic policy, every industry would face worker shortages all the time, because that’s just life when the economy’s at genuine full employment—which it always should be. So the need for affordable, quality childcare isn’t specific to a few semiconductor manufacturers or even just to the semiconductor industry; it’s applicable across the entire national economy. And that’s the sort of need that’s best addressed by a single, coherent, national policy dedicated to addressing it specifically. 

This is all true of most every need that the CHIPS Act and the Inflation Reduction Act try to tackle by attaching requirements to their subsidies. Every worker needs to be paid well, to have good benefits, to enjoy decent workplace conditions, and to have a democratic voice in their employment. Everyone needs effective transit to commute to their jobs, good K-12 schools to educate their kids, and a decent and affordable place to live. That women and minorities have a tougher time getting hired and breaking into new markets—that they often start at a disadvantage because they come from economically marginalized communities, and thus often need an extra leg up—is also true across wide swaths of the economy.

Making sure Americans have these amenities will expand the supply of labor across the whole economy, and make all sorts of different sectors and industries more productive. These are all worthwhile goals on the economic and moral merits, but also—as Dayen points out—worthwhile in terms of Democrats’ political self-interest.

But trying to provide for all those needs by attaching piecemeal requirements to each bit of public investment—and prodding individual employers to figure out each need for their workers—is a horrible patchwork solution. Some patches of the economy will get good child care, high-quality jobs, good K-12 schools, good transit, etc, and some patches won’t. Some workers will be well-served, and others very much won’t be. Employers themselves will do everything they can to avoid the costs of providing those amenities, whether it’s finding loopholes that allow them to take the subsidies while dodging the requirements, or just not taking the subsidies at all—thus undercutting the whole point of the public investment. And the employers who do take the subsidies anyway will get bogged down with additional hurdles and bureaucracy. Ultimately, both goals will be under-served: those universal needs will be addressed less effectively, and industrial policy will have a harder time achieving whatever it’s trying to achieve.

The solution, then, is to separate these goals out: address each one with its own comprehensive and national agenda. Making sure all U.S. jobs are high-quality should have its own dedicated policy. Investing in women and historically marginalized communities, so they can fully participate in the workforce, should have its own dedicated policy. Building up our green energy supply, massively increasing our housing stock in big cities, and developing a robust domestic manufacturing base for semiconductors should each have its own dedicated policy.

This will often mean removing those costs from employers entirely by providing the need via the government. In cases where you can’t do that, it will mean subjecting all employers to the same requirements and demands regardless of whether they’re taking industrial policy subsidies. By tackling each goal separately, along its own policy track, we’ll address each goal more coherently and effectively. 

Of course, in the context of American politics, all that means “socialism”—direct provision of universal needs via the government, utilizing big spending and regulation, with an aim towards making the economy more democratic and egalitarian. So let’s call this approach, “plain-bagel socialism.”

Some Practical Suggestions for Implementing Plain-Bagel Socialism

On the subject of child care, we could, for instance, do it through an Obamacare-like scheme to regulate and subsidize private providers. Or we could do childcare through straight-up government provision of a national public service. (That’s my preferred approach.) Similarly, we could refurbish the existing public K-12 school system with a big new federal policy, or try to do some progressive-conservative compromise, where we turn the Department of Education into a generous machine for distributing education vouchers while letting a thousand private school flowers bloom.

There are also options when it comes to improving the quality of jobs themselves. We could drastically hike the federal minimum wage—an option that does not get nearly enough love, in my book. Or we could move to a sectoral bargaining system, in which unions negotiate minimum wages and pay scales and more for an entire economic sector—and those agreements cover all workers, not just the unionized ones. Plenty of European countries already do this, which is why you often see far more workers there covered by union-negotiated contracts than are actually members of unions. (Hell, we could always have a federal minimum wage and sectoral bargaining!)

It’s also worth noting that the current U.S. approach to union law, in which union contracts are negotiated shop-to-shop and workplace-to-workplace, contributes to the “patchwork” effect we’re trying to avoid here. A strength of the sectoral bargaining approach is it imposes a baseline on the entire industrial sector, so no one employer has incentive to avoid unionization at all costs, and thus have a leg up on its unionized competitors.

Similarly, sectoral bargaining could set industry-wide standards for health care coverage, and other benefits like retirement, vacation time, sick leave, and so forth. Though I think it would be even better if we just removed the responsibility to provided those things from employers entirely: have a national system for single-payer health care coverage; drastically improve the generosity of Social Security so that employer-provided retirement is no longer so necessary; and provide vacation time, sick leave, and family leave through a single national funding system.

We should also put in a word for full employment—by which I do not mean what we have now, though it’s an improvement. I mean the conditions we had during World War II, when the national unemployment rate dropped below 1.5 percent. That sort of situation, when demand for labor so drastically exceeds supply, also drastically tips the balance of bargaining power between workers and employers towards the former.

That bargaining power backstops a lot of the things we’re trying to achieve here: its the leverage to demand better pay, better benefits, better working conditions, unionization, and more. The war mobilization led to the single biggest reduction of inequality in U.S. history, while setting off a two-decade economic boom after the war. It also disporportionately benefited marginalized communities, especially black Americans: When the economy is below full employment, some number of workers and businesses are by definition left unused by the wayside. Not surprisingly, the ones who do get left behind are the ones without the privilege, clout and connections to grab the jobs that remain: lower-income, less-educated, not-white, and not-male.

Genuine full employment wouldn’t be a cure-all. But it would be a massive shift in the baseline way society and the economy operate. And for the communities who would still need extra help to catch up—whether due to the lasting damage done by slavery and segregation, or other forms of exclusion and oppression—the way to do that would be through separate policy agendas that create national programs for community investment, public grants, job-retraining, and more.

Indeed, I’d argue that everything-bagel liberalism is often adaptating specifically to our failure to achieve full employment. Had the Tanahan project used public funds, for instance, it would’ve been required to work with small contractors. And the project pissed of the San Francisco unions as it is, because it saved money by going with a modular apartment manufacturer in another city—even though that manufacturer was itself unionized. Both the requirement to use small contractors and the general “me first” attidude of the local unions reflect a scarcity mindset: the assumption that the economy is always going to be underpowered, and thus there will always be too few jobs to go around. Which means you’re going to need legal rules to give the little guys an extra leg up, and every union must fight to maximize every last job it gets even if that means screwing over other unions.

The thing is, if the last 70 years or so are any guide, those assumptions will prove correct. (They will certainly prove correct if Larry Summers gets his way!) As it stands, even the relatively hot economy we have now—which is still well below World War II conditions—is something we manage to hit only briefly every two decades or so. The only way to really change the scarcity mindset—to change these legal rules and these institutional habits—is to actually get the economy to genuine full employment and keep it there.

“Everything-Bagel Liberalism” Is the Free Market-Friendlier Solution

The reason we’ve done such a bad job of maintaining genuine full employment is that the necessary policies run afoul of “free market” ideology. American leaders commitment to that ideology, or their reluctance to challenge it, is the great roadblock to “plain-bagel socialism” writ large.

World War II involved gobs of public spending and massive deficits, thus putting to use every last resource and worker in the economy. By constraining government spending, free market policies tend to keep the economy perpetually underpowered. As for inflation, we controlled it with taxes, with invasive regulations like price controls, and a lot of aggressive industrial management and economic planning. Free market ideology favors controlling inflation with interest rate hikes, because they simply squeeze credit conditions nationally, while leaving private capitalists free to run their businesses how they see fit in response to those conditions. That’s what we’ve been doing for roughly the last 70 years.

The basic purpose of free market ideology is to prevent the government from putting real resources—meaning people and materials—to use. The presupposition is that profit-driven private capitalists will always use those resources in better and more efficient ways. Thus the drive to lower federal taxes and federal spending, and to reduce the national deficit: less spending by the government means fewer real resources employed by the government, leaving more real resources available for private capitalists to use as they please. And since private capitalists should be able to rule over their economic endeavors unmolested, we must reduce regulations as well.

Some of the options in plain-bagel socialism involve a mix of “big government” spending and regulations; others cut down on the regulation by ramping up the spending, and just having the government provide a service directly. But in all cases, they do what free market ideology says you should not.¹ Even more interesting is that free market ideology not only seeks to prevent the government from interfering with how private capitalists deploy resources, it seeks to prevent workers from interfering with those decisions as well. Hence its general opposition to unions, and to the policies that tend to deliver full employment. 

As I said, “everything-bagel liberalism” is essentially our society’s adaptation to the realities imposed by free market ideology’s dominance of our political system. All the needs that everything-bagel liberalism seeks to address are real, and vital, and they aren’t going anywhere. Our political system will keep feeling the bottom-up pressure to address them. And while plain-bagel socialism would be the most reasonable and coherent way to meet those needs, we keep hitting the firewall of free-market ideology, and thus get diverted into “everything-bagel liberalism” instead. “Tucking child care into CHIPS is a sleight of hand, where Congress can pretend that the cost of supporting children and families can easily and naturally be absorbed by the private sector,” as Sargeant put it.

All of which makes “everything-bagel liberalism” comparatively friendlier to free market ideology. Obviously, the most free-market friendly approach would be to not bother addressing any of these needs at all. But by addressing those needs via everything-bagel liberalism, we merely try to coax private capitalists into using real resources a particular way, rather than telling them how to use them—or simply taking those resources away from them for the government to use instead. 

In other words, Democrats and progressives so often default to this approach because—whatever its faults—it defers to the overwhelming pressure in our political system to leave the private capitalists in charge.

Not Everything Is Everything-Bagel Liberalism

I realize I’ve beat the “bagel” metaphor entirely into the dirt at this point. But I want to make one final distinction. 

Klein lumps together a whole bunch of different forms of red tape that can slow up efforts to actually build shit: zoning policy, environmental approval, disability law approval, requirements that public projects use small contractors, linking public investment to goals building out childcare services or improving workforce diversity. But some of these complaints are really categorically different challenges. 

When the CHIPS Act requires its subsidy recipients to provide childcare for their workers, for instance, that’s a pretty cut-and-dry case of two worthwhile goals—building a robust domestic semiconductor industry and providing all workers with child care—that are both undermined when they’re jammed together. On the other hand, regulatory hurdles like zoning rules, historical preservation rules, or getting approval under National Environmental Policy Act review, are all about giving local communities control over the course and nature of their own economic development, or making sure your construction project isn’t endangering habitats or wildlife. And those are goals that are just fundamentally incompatible with the goal of a national economy that can dynamically, rapidly, and effectively respond to challenges by building housing, infrastructure, and other needs. You can’t separate those two goals out to better address both. That’s just a brute trade-off between fundamentally incompatible values. 

I think you get into a similar problem with a lot of the “buy American” provisions attached to the CHIPS Act and the Inflation reduction Act. If you want American suppliers of railcars or solar panel parts or wind turbine components to be able to match foreign competitors on speed and quality, you have to give those domestic industries time to develop. More importantly, you have to drive demand to them right now, so they can learn by doing. As for price, American suppliers will never be able to match some foreign competitors on that front, because American labor is just flat-out more expensive. (Which is a good thing! It reflects Americans’ higher standard of living.)

So you can either buy the railcars and the solar panel parts that are built the fastest and the best and cheapest right now, or you can help develop American suppliers by accepting more slowness and cost and some lower quality in the here and now. What you can’t do is optimize both goals. You have to choose which value will win, and which will lose. It’s not an all-or-nothing question—you draw the line wherever you want—but the more you dial up one goal, the more you dial down the other.

Now, I do think some policies that fit under the “plain-bagel socialism” umbrella could help alleviate these collisions of values, and lower the stakes somewhat. One aspect of the housing crisis that I think is severely underdiscussed is that good employment opportunities have become really geographically concentrated in big cities. It will always be the case that cities offer more jobs with higher wages that rural economies and smaller markets. But what’s happened recently—the all-out collapse of good jobs ain rural America—is not normal. Getting back to full employment, and getting coherent national policies for investment in transit, education, and all that would go a very long way to revitalizing employment outside the big urban hubs.²

That wouldn’t solve the contradiction between the desire for local control and the need for a dynamic economy. But in the case of the housing crisis, it would at least lessen the collision between those two values, and lower the stakes. A more even geographic dispersal of good jobs would mean a more even geographic dispersal of demand for housing. Which would mean less need to build lots more housing in any given place.

Similarly, a commitment to full employment will make sure American suppliers and manufacturers are always getting all the demand they need as an aggregate population. And there are tricks to lower the value of the U.S. dollar relative to other foreign currencies, which would also push more demand to American suppliers in a general sense. But if you’re looking to protect, shepherd or encourage a specific domestic industry—through subsidies or tariffs or “buy American” rules attached to industrial policy—because you think that specific industry has national import of some form, then you’re back to having to make those inescapable trade-offs.

Ultimately, I don’t think it makes analytical sense to lump those inescapable trade-offs under the umbrella of “everything-bagel liberalism.” It makes much more sense to define the habit strictly as undercutting two goals when they could both be better served by separating them into different policy tracks. Because there’s a solution to that that can satisfy both values!

There’s no both-and solution to inescapable trade-offs. You just have to make a trade-off. Klein’s complaint—and the complaint of people who praised his piece—is that he thinks Americans aren't making the right trade-offs. He thinks they should prioritize speed and efficiency and economic dynamism, and they keep prioritizing buy American, and local control of community development, and local protection of habitats and wildlife.

I don’t even think Klein is necessarily wrong on the merits here. But the only fix is to convince your fellow citizens they’re making the wrong trade-off. And that’s just a different category of challenge.

1. Occasionally, with something like transit, you’ll have a “natural monopoly,” where it’s just not practically possible to have multiple private players competing to provide the same service. In that case, even the most devout free marketer should admit that government needs to provide the service. But practically speaking, efforts to rebuild American transit are scuttled by the broader hostility to government spending and big federal programs, while authority over transit is a patchwork affair, fractured between multiple local and state authorities.

2. Another important policy here for rebuilding employment in rural America is resurrecting the older and more aggressive forms of antitrust enforcement, and rules for fair market competition. But that’s all whole newsletter unto itself.