This Saturday I’m appearing on a panel at the Organization of American Historians’ Annual Meeting in New York, with Dorothy Sue Cobble, Thomas Edsall, Michael Kazin, and Todd Gitlin, on “Does Liberalism Have a Useable Past?” First of all, if they’d asked me, I would have told them they should spell “usable” correctly. Second, I thought for my remarks I would draw on the below, which I originally wrote as a letter to the editor for Eric Alterman’s Altercation back in 2005:

Since we’re all writing about liberalism, here is a capsule history, written off the top of my head, that I hope might help.

1. Where did American liberalism come from? American liberalism, as we knew it in the twentieth century, developed from the wide acceptance of an observation that capitalism, while wonderfully creative, does not regulate itself satisfactorily. Neat theories notwithstanding, capitalist economies, left to themselves, quite often idle at equilibria that a substantial minority, if not a majority, of citizens find unpleasant or even unendurable. (People afflicted with scruples often find such equilibria unjust.) Let’s call this the Original Observation.

2. What did American liberals recommend? Lots of things. The hodge-podge that was twentieth-century liberalism failed to cohere because the Original Observation can sustain any number of policies, ranging from government subsidy of economic development through regulation to welfare. The nearest thing to a coherent recommendation — the New Deal — comprised three major measures apart from emergency relief:

a) subsidies for economic development (things like the Tennessee Valley Authority);

b) a commercial and financial regulatory apparatus (things like Glass-Steagall, the enhanced Federal Reserve Board, and the SEC);

c) a social insurance program (Social Security).

Later, American liberalism extended to efforts to include groups excluded, for extrinsic reasons, from general economic progress: e.g., measures like Civil Rights and the War on Poverty.

3. What happened to American liberalism? Well, item 2a), subsidies to economic development, became defense spending, so that almost all spending on economic development was justified or originated from defense priorities (in fairness, this was the reason the Supreme Court let the TVA stand in the first place). Item 2b), regulation, began to go in the 1970s and has almost all gone, with obvious exceptions like the Federal Reserve Board, which remains acceptable except to conspiracy theorists and gold-standard fans (not mutually exclusive sets). Item 2c), a social insurance program, is now possibly to become an investment program. More on this below.

4. Why did these things happen? For the same kind of reason that liberalism arose in the first place — much as liberalism arose on the observation that unregulated capitalism made messes, opposition to liberalism arose on widely accepted observation that, in particular, the Great Society didn’t make things better. Obviously some opposition came from plain-vanilla racism, some came from people who always hated FDR, but the critical, marginal opposition came from people who observed that bad economic things still happened under the current regime. Do I think this was a fair observation? No; most of the things people objected to were not results implicated in the original New Deal synthesis of American liberalism. But partisan politics and Cold Warriorism ensured that the New Deal would get blamed anyway.

As a result, we’ve apparently decided that Everything Liberals Ever Thought Was Wrong, and that includes, especially, the Original Observation.

5. What comes next? Because the Original Observation is now understood to have been incorrect, we’re about to replace an insurance program with an investment policy. This is of course a simple category mistake that nobody should make. Under insurance, you pay premiums so that if a bad outcome occurs you get a set payout. Under investment, you set aside capital which may or may not yield a return of indeterminate proportion whether or not a bad outcome occurs. They perform very different functions, and in particular, they allocate risk differently. Under insurance, the insurer takes the risk. Under investment, you do.

But if we believe that capitalism polices itself, we don’t need insurance and there’s no risk from investment.

6. What to do? Oh boy, I don’t know. But any answer to that question should take into account some version of the foregoing, or else of some better history, because I suspect that the laws of human behavior that yielded the Original Observation haven’t been repealed and won’t be, even if the New Deal is.