Ethno-Cultural Liberalism: Clinton's innovation.

It is a mark of President Clinton's ambiguity as a political leader that his opponents are generally happier than his supporters with the results of his presidency-even though he fought a series of successful partisan battles against Republicans in Congress. Stock-market traders are more pleased with the economic and welfare policies of the last eight years than are social workers. Business has defeated labor in every major battle from NAFTA to China's entry into the World Trade Organization. And Republicans have deprived the Democrats of the U.S. Congress, major governorships, and state houses galore during a period marked by the personal ascendancy of a Democratic president.

One result of this was that liberal Democrats flocked to Ralph Nader during the election campaign. Even though many deserted him in the final stages under the partisan pressure of their traditional loyalties, they had wanted to proclaim that liberalism still existed as a moral force in politics-and that it had not been killed off by Clinton's cynical patronage. And if liberalism is interpreted as high redistributive taxation, social ownership, economic regulation, and substantively egalitarian social policies, then Clinton was indeed a flawed figure who regularly sold out his liberal colleagues by such actions as signing the welfare-reform bill in 1996.

But is that the correct definition of liberalism in the year 2000? Economic statism on that model is simply no longer credible. The collapse of Communism produced an intellectual revolution in economic theory and policy. The textbooks still in use in the late '80s peddled such nonsense as that government planning could outproduce private enterprise, and that the East German standard of living was higher than that in Britain. It became impossible to believe such things when we saw how wretchedly people had lived in Eastern Europe. And the finance ministries of the world suddenly started talking free-market policies and entrepreneurship.

Left-wing parties had little choice but to adapt to this reality. If they had continued to spout traditional economic interventionism, they would never have been elected. As it was, they developed the formula: "We will administer free-market capitalism more compassionately than the capitalists and their parties." Armed with that slogan, Leftist parties have won power throughout the advanced industrial world with the exceptions of Spain and Australia.

If the planned economy was out, however, the planned society still had prospects. After all, it is much easier to justify intervention in the economy on grounds of equity than of efficiency. The test of efficiency is harsh but clear: Does the state-owned company make a profit? It is not hard to discover, therefore, if an intervention has succeeded or failed. It can therefore be discredited, as economic regulations frequently were. But there is no real test for regulations designed to effect equity. If a racial preference fails to produce the "right" ethnic balance in a company's workforce, that failure can be employed to justify extending the regulation or making its application more rigid. If an environmental regulation saves a small fish at great cost to local property developers, that is seen as simply a necessary cost.

Whether as a result of this advantageous condition or not, regulation under Clinton has spread like kudzu. We have regulation on all sorts of grounds-in particular, on grounds of the environment, our own health, and antidiscrimination. And though the rationale of these regulations is not economic, they still have economic consequences. For instance, Forbes calculated some years ago that the total cost of affirmative- action preferences was equal to something like 4 percent of gross domestic product. This is a massive sum; but it pales alongside the overall costs of environmental regulation.

And cost alone is not the most important issue. Moral regulation is an engine of social control. It enables government agencies to extend the values of the liberal bureaucracy into every section of society-thus, the armed forces are compelled to embrace feminist social theory, universities are forbidden to recruit and promote on intellectual merit and achievement, and orchestras cannot employ "blind auditions" lest they produce the wrong ethnic balance in the string section. In practice it is impossible to resist such state intrusion on private- sector decisions.

Some people seem to believe that these evils would be reduced if, for instance, a system of preferences based on poverty were to replace one based on race and gender. In fact, since poverty is itself a variable concept, such a system would allow government agencies to determine every hiring, firing, and promotion in the country. It would be socialism dressed up as an extended human-resources department. It is this potentially tyrannical system of universal moral regulation that now constitutes the main institution of modern liberalism.

And Clinton has been assiduous in defending it against political attack. In a cold legal climate, he has succeeded in neither "ending" nor "mending" affirmative action. Indeed, wherever possible, he has actually extended it. And that continues. His recent speeches at Seattle and in Third Way gatherings have proposed closing any escape hatches from overregulation by making free-trade agreements vehicles for new forms of international regulation.

Alongside this rise of the regulatory state, moreover, there has been a parallel social development. Statist liberalism used to be a form of class politics that defended the blue-collar working class against corporations and upper-class interests. Vice President Gore's recent rhetoric drew, not very successfully, on this tradition. But both Clinton and Gore in power have acted very differently. They took the side of business against labor on NAFTA and over the WTO; they recognized that labor's political power has been shrinking in the new economy; they saw the rise of an investor class that includes many blue-collar workers; and above all they have detected that some traditional "class constituencies," such as northern white ethnic voters, no longer lean leftwards. Other things being equal, liberal Democrats faced a gradual loss of political support on class lines.

What they have discovered is a replacement for class politics in the form of ethno-cultural politics. The Democratic party under Clinton has reinvented itself as the party of a new multicultural America in which everyone belongs to some minority or other-blacks, Latinos, gays, "women" (i.e., feminists), even Euro-Americans, and so on-and in which politics consists of redistributing resources between different groups to maintain social harmony. In the beginning the Democrats largely blundered into such politics with the spread of racial preferences. These were originally adopted on welfare grounds, but in the event they both fostered race consciousness and gave the Democrats a call on the loyalty of their beneficiaries. The process has become more self- conscious under the Clinton presidency. Gore in particular employed immigration policy to increase the number (and numbers) of officially designated minorities likely to vote Democratic. And because assimilation and a common American culture might have reconstituted these various minorities into a single American nation, as happened earlier this century, the Democrats have encouraged minorities to retain their "authentic" culture and language. On several occasions, indeed, Clinton has explicitly rejected the notion of a common American culture. Here's one of his formulations: "Along with our founding, which was an act of genius, and the freeing of slaves in the Civil War and the long civil-rights movement, this will arguably be the third great revolution of America if we can prove that we literally can live without having a dominant European culture."

Of course, this maximizes the misunderstandings and hostilities that are always potentially present in ethnic difference-and which Clinton and the Democrats have been prepared to exploit come election time, or over controversies like the Asian fundraising scandal. For that very reason, however, it provides a further justification for the liberal politics of moral regulation, as government steps in to mediate between the various squabbling minorities, who-not being united in a single culture-cannot easily unite politically against Washington.

Multiculturalism is the liberals' version of "divide and rule." And it works. Indeed, the clearest sign of its success is that it has now been adopted by the Republican party.