Book Review

Lippmann and Economics

Craufurd D. Goodwin, Walter Lippmann: Public Economist (Cambridge, MA: Harvard University Press, 2014)

Review by Tom Arnold Forster

Craufurd Goodwin’s new book is the most sustained and detailed account yet written of the journalist Walter Lippmann as a figure within the history of economic thought. The relationship between Lippmann and economics has recently generated much interest among historians of neoliberalism, and we now know a great deal about how the “Colloque Walter Lippmann,” a 1938 gathering of key thinkers to discuss the French translation of The Good Society, helped to create intellectual and institutional foundations for neoliberal political economy.[1] Scholars dispute Lippmann’s commitment to neoliberalism as a political project (his diffidence is deftly described in Angus Burgin’s Great Persuasion), but his significance as a touchstone in the intellectual history of market liberalism has been richly demonstrated.

Goodwin’s focus is different. His main argument is that, from the early years of the Great Depression to the end of the Second World War, Lippmann was a “public economist.” He was, that is, “a public intellectual concerned with economic issues,” and so an important medium for “the diffusion of economic ideas” in the United States (4). Based on a comprehensive reading of his unpublished and published writings, especially his newspaper columns, Goodwin’s book greatly expands our understanding of Lippmann’s economic ideas beyond their influence within neoliberal networks. It also offers a good opportunity to consider Lippmann’s historical significance as an economic thinker in his own right.

Two immediately valuable contributions of Goodwin’s account are to expose the extent of Lippmann’s engagements with economists other than Hayek, and to explore the depth of his connection to Keynes. The range of Lippmann’s correspondence with economists across the American academy was vast, and took in major figures at Columbia, Chicago, Wisconsin, and Harvard, as well as key members of Roosevelt’s Brain Trust and the Brookings Institution (42).[2] Goodwin’s account is particularly useful with respect to Keynes, whose influence on Lippmann is often more observed than investigated. The two met at Versailles, and Lippmann was always sympathetic to publiceconomistKeynes’s sensibility.[3] Goodwin, however, details Lippmann’s substantive “Keynesian conversion” by showing how his 1933-34 columns argued for a fiscal policy of “managed recovery” (134). Though he turned against major aspects of the New Deal late in 1935, which excited Hayek, Goodwin’s exhaustive chronicle of Lippmann’s evolving macroeconomic policy positions demonstrates that his broad approach remained that of “a limited and cautious progressive with a strong Keynesian faith” (299).

What is at stake in the broader claim that we should understand Lippmann as a “public economist?” Goodwin argues that much of Lippmann’s historical significance as an economic thinker lies in his role in the “public” diffusion of economic ideas. Influence is of course harder to pin down in a public sphere than in academic networks, and Goodwin concedes that the dynamics of diffusion are “difficult to determine” (155). But the concession is made perhaps too quickly. For instance, beyond references to Lippmann’s use of metaphor (99, 149, 345) and praise for his “clear, concise, and candid” style (318), there is little close rhetorical or literary analysis to identify how Lippmann’s prose turned technical ideas into a public language.[4] Nor is there a systematic discussion of what sort of public Lippmann thought he was writing for, or of what sort of public he actually had, which sometimes creates the sense that his public was simply America.[5] Goodwin’s Lippmann thus comes across as something like the ur-public intellectual: independent but well-connected, national but non-ideological, sharp but sage. “Will We See His Like Again?” is the question that frames the book’s final section; Goodwin’s not unwistful answer is that it “seems unlikely” (368-69). One of the achievements of Ronald Steel’s 1980 biography, however, was to show how Lippmann’s intimate involvement with elite networks made his identity as an authentically independent public intellectual, possessed of “Olympian detachment,” such a necessary performance.[6]

As for Lippmann’s significance as an economist in his own right, Goodwin shows that he had a serious interest in macroeconomic policy in and after the 1930s, which was considerably more Keynesian than historians of neoliberalism have allowed. But doubt lingers about the depth of his economic literacy. As Goodwin notes, Lippmann took only three undergraduate courses in the subject (9), was not very interested in microeconomics (78), and possessed few mathematical abilities (318). In later life he confessed to John Kenneth Galbraith that his “ardent, amateur” Keynesianism had never extended to reading The General Theory (127). And as Lippmann’s columns became more and more dominated by foreign policy during and after the Second World War, his fluency with economics as a language suffered. Trying to write about inflation in 1946, he told the Harvard economist Seymour Harris that he felt “like a man who learned to speak a little French, but hasn’t spoken it for so long [he] is afraid he can’t say what he means” (74).

Is there a danger that focussing on the French might lead us to miss the stakes of what Lippmann was trying to say in other languages? Take The Method of Freedom, a 1934 book that Goodwin puts at the center of Lippmann’s “Keynesian conversion.” Part II of the text argues that a “compensated economy” forms a crucial aspect of statecraft in an uncertain world, and Goodwin carefully attends to the Keynesian influences on Lippmann’s category (136-42). But reading the text as primarily a book about macroeconomic policy risks misunderstanding the political and historical thrust of Lippmann’s argument. Much of the book is devoted to an intricate historical narrative about the development of Anglo-American liberty, which underpins the possibility of administering a compensated economy. For Lippmann, it was the rise of self-government, individualism, and laissez-faire capitalism in the English-speaking world during the nineteenth century that made a compensated economy, or “free collectivism,” historically available to Britain and America.[7] In counties devastated by the First World War and without real experience of liberalism, “that is to say in Europe east of the Rhine,” only the “absolute collectivism” of a tyrannically directed economy could exist.[8] This theme of Anglo-American liberty is not explored in Goodwin’s exegesis, but it was prominent in both Lippmann’s text and context.[9] For Lippmann, it mattered that free collectivism was only plausible in “free countries.”[10]

The Method of Freedom ends not with a program of economic policy prescriptions, but a long discussion about free collectivism in the context of “the existing practice of political democracy,” which dwelt on the problems that public opinion presented for implementing a compensated economy.[11] Lippmann worried at length about “how and whether the people will consent to a policy which calls for decisive actions which are in their longer interest but contrary to their immediate opinions.”[12] Ultimately, he suggested that “in so far as a compensated economy can be administered, its tendency will be to make democracy work better.”[13] The idea of a compensated economy thus had crucially political implications. Free collectivism let free countries establish a “middle condition” as the social basis for modern democracy, which offered some hope of aligning the public interest and the popular will with state action.[14]

Part of Lippmann’s interest as a “public economist” surely lies in his carefully developed ideas about what the public he was writing for actually was, and in how he thought they might understand a subject as technical as economics. Some of his most influential texts were conspicuously sceptical about the possibility that a democratic public could possess any coherent opinion about economic policy; indeed, they imply that a “public” economist might not be able to exist at all. But these texts are not the focus of Goodwin’s book.[15] Walter Lippmann: Public Economist argues that Lippmann’s economic thought can and should be understood as a distinctive set of ideas. As The Method of Freedom suggests, however, his own separation of economic issues from wider debates about democratic politics and the social order was much less sharp.

Tom Arnold-Forster is a PhD candidate at the University of Cambridge. His thesis explores the political ideas of Walter Lippmann and their reception amongst a range of thinkers within and beyond the United States.

[1] Recent scholarship in this area includes: François Denord, “French Neoliberalism and Its Divisions: From the Colloque Walter Lippmann to the Fifth Republic,” in The Road From Mont Pélerin: The Making of a Neoliberal Thought Collective, ed. Philip Mirowski and Dieter Plehwe (Cambridge, MA: Harvard University Press, 2009), 45-67; Angus Burgin, The Great Persuasion: Reinventing Free Markets since the Depression (Cambridge, MA: Harvard University Press, 2012), 55-86; Ben Jackson, “Freedom, the Common Good, and the Rule of Law: Lippmann and Hayek on Economic Planning,” Journal of the History of Ideas 73, no. 1 (2012): 47-68; and Hagen Schulz-Forberg, “Rejuvanating Liberalism: Economic Thought, Social Imagination and the Invention of Neoliberalism in the 1930s,” in Zero Hours: Conceptual Insecurities and New Beginnings in the Interwar Period, ed. Schulz-Forberg (Brussels: Lang, 2013), 233-68.

[2] The correspondence network included E. R. A. Seligman, Wesley Mitchell, Richard T. Ely, Alvin Johnson, Henry Simons, F. W. Tausig, and many others. Goodwin also shows that Lippmann’s involvement with the profession extended to an unsuccessful attempt in the mid-1930s to reform economics at Harvard, which entailed trying to get the department to hire Leo Wolman, a labor economist, and to re-hire Lauchlin Currie, a monetary theorist then working for the government (60-73).

[3] As suggested in Ronald Steel, Walter Lippmann and the American Century (Boston: Little, Brown, 1980), 305: “Keynes embodied everything that Lippmann admired: intelligence, wit, urbanity, fame, wealth, influence, participation in the highest levels of his country’s literary, political and social life.”

[4] For a detailed analysis of this phenomenon on television, cf. Angus Burgin, “Age of Certainty: Galbraith, Friedman, and the Public Life of Economic Ideas,” History of Political Economy 45, suppl. 1 (2013): 191-219.

[5] In “Walter Lippmann: The Making of a Public Economist,” History of Political Economy 45, suppl. 1 (2013): 93, Goodwin identified Lippmann’s public as “an educated, elite audience estimated at more than 10 million,” but in the book this becomes “an audience that may have reached eight million,” without the sociological qualifiers (2). Later in the book Goodwin aligns Lippmann’s readers with both political elites and a broadly national public: “He led and instructed millions of influential readers in a way that few if any journalists have done before or since. In his role as regular informer and interpreter to leaders in the highest places and also to many of those below, he was a strange animal… a sophisticated, trusted, well-informed, and beloved teacher and adviser. For a great nation moving through apocalyptic change he was deeply comforting” (368).

[6] Steel, Walter Lippmann, xv.

[7] Walter Lippmann, The Method of Freedom (London: Allen & Unwin, 1934), 1-33 (historical narrative), 46 (quotation).

[8] Ibid., 38-39.

[9] On the context, see Duncan Bell, “The Project for a New Anglo Century: Race, Space, and Global Order,” in Anglo-America and Its Discontents: Civilizational Identities Beyond West and East, ed. Peter Katzenstein (London: Routledge, 2012), 33-55. Lippmann had been working with this theme since the war: see, especially, “The Defense of the Atlantic World,” New Republic, February 17, 1917.

[10] Lippmann, Method, 45-46.

[11] Ibid., 72.

[12] Ibid., 74.

[13] Ibid., 111.

[14] Ibid., 97-100. Lippmann set the middle condition against both “proletarianism” and plutocracy, social orders in which particular interests were able to control the state (95-96).

[15] Public Opinion, for instance, is at one point described as “more like Lippmann’s reading notes on the subject than a finished product” (31), but later praised as one of his “most memorable scholarly contributions” (352). Goodwin also argues that The Phantom Public simply “restated the message of Public Opinion more bluntly and for a less sophisticated audience” (33).