Twentieth-century American constitutional, administrative, and corporate law were often contests over legal liberalism. We more or less accepted the basic liberal premise of separating the public from the private—and then battled over the relative size and power of the State versus the Market. At times, the State had the upper hand, and regu­latory and welfare programs proliferated. At other moments, the Market struck back, forcing the State to cede ground. The names of these contests are as familiar as Normandy, Gettysburg, and Agincourt: Progressivism, Lochnerism, the New Deal, the Great Society, and the Reagan Revolution.

Today, however, those conflicts seem antiquated, waged over increas­ingly inconsequential terrain. We’ve now so pervasively blended public and private identities and powers that the traditional liberal divide has all but collapsed. But with the blurring of old battle lines, new ones emerge. This Essay considers the apparent demise of legal liberalism and the corresponding rise of what seemingly comes next: public capitalism.

A volatile blend of neoliberalism and democratic socialism, public capitalism reflects the paradoxes, compromises, and innovations of (1) a big and potentially redistributive State that nonetheless achieves its aims through commercial rather than (just) democratic interventions, and (2) an unstintingly capitalist private sector that nonetheless flexes sovereign regulatory muscle in furtherance of public aims at times orthogonal to profits.

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We’ve long had a mixed political economy. We exchange goods and services against the backdrop of public laws, market forces, and societal norms. The creators of these goods and services may be private actors, the State, or some combination of the two. The distribution channels may be commercial, sovereign, or, again, a hybrid. And the “price” of those goods and services may be pegged to the so-called laws of supply and demand, collectively determined through democratic processes, or, yet once more, fixed according to some hybrid formula. The choices we make, the pathways we employ, and the valuations we privilege tell us a great deal about where we are as a political, legal, economic, and moral community. And, right now, we’re a community in flux.

Consider the following. With the maturation of the American welfare state in the mid-twentieth century, government asserted itself more aggressively and comprehensively in the political economy. Among other things, government expanded access to the courts, thus placing public law more at the center of traditionally private disputes. Government professionalized and regularized criminal justice, which previously had been a somewhat, if not significantly, privatized domain. Government ratcheted up industrial and financial regulation, passing laws and promul­gating rules to structure and discipline myriad commercial transactions and relationships. Government assumed broader responsibility for the funding and directing of major infrastructure projects, including a national highway system. And, to pay for all of this, government imposed a greater tax burden on all of us, though generally with a progressive slant. 1 See infra section I.B.

By the last decades of the twentieth century, however, considerable frustra­tion with what some characterized as government overreach led to a recalibration. The ratio of public regulation to private ordering seemed, at least to that frustrated cohort, to be out of balance. Thus, the State retreated. Government officials endorsed and encouraged private arbi­tration; privatized policing and prison administration; deregulated banking, telecom, and any number of other industrial sectors; sold and leased highway infrastructure to for-profit companies; and reduced and flattened tax burdens. 2 See infra section I.B.

This rise and then retreat of state welfarism should come as no surprise. After all, one of the signature projects of legal liberalism has been in service of separating the public from the private (and vice versa)—and then finding points along the public–private spectrum that best reflected our preferences for the right mix of state and market ordering. 3 For helpful discussions along these lines, see generally Michael Walzer, Liberalism and the Art of Separation, 12 Pol. Theory 315 (1984) (describing liberalism as “a certain way of drawing the map of the social and political world,” in which “liberal theorists preached and practiced an art of separation”); Jeff Weintraub, The Theory and Politics of the Public/Private Distinction, in Public and Private in Thought and Practice 1 (Jeff Weintraub & Krishan Kumar eds., 1997) (“[Liberalism] defines public/private issues as having to do with striking the balance between individuals . . . , on the one hand, and state action, on the other.”). I appreciate, of course, that for some, liberalism carries additional or different meanings. See generally Edmund Fawcett, Liberalism: The Life of an Idea (2014) (characterizing liberalism broadly to include framings unrelated to the public–private divide); Helena Rosenblatt, The Lost History of Liberalism: From Ancient Rome to the Twenty-First Century (2018) (describing the manifold understandings of liberalism, including those that differ from the Anglo-American understanding that centers on limited government and the safeguarding of individual rights). In associating what I call legal liberalism with a strong recognition of distinct and somewhat rivalrous state and private spheres, I do not mean to challenge or critique other characterizations of liberalism. My point is, rather, a much more modest one: simply to label a particularly resonant and important phenomenon that is often, but not invariably, a feature of liberalism. Hence, we oscillated, from primarily a laissez-faire regime during the Lochner era to a state welfarist regime that spanned the mid-1930s to the mid-1970s, and then back to a more libertarian resting point starting in the build-up to the Reagan Revolution and carrying forward into the early years of the twenty-first century. 4 See infra Part I.

Though scholars, policymakers, and jurists are still processing this last and deeply consequential moment of deregulation and privatization—private ordering’s revanchism—change is once again afoot. We’re seemingly poised for yet another paradigm shift.

Indeed, today we have government reclaiming some of its recently ceded ground, albeit with a twist. Government is making civil adjudication more user-friendly, with some jurisdictions competing with private arbi­trators by creating “fast-pass” public trials for those willing to pay a premium. 5 See Anne S. Kim, Note, Rent-a-Judges and the Cost of Selling Justice, 44 Duke L.J. 166, 168–71 (1994); Eric Berkowitz, Is Justice Served?, L.A. Times (Oct. 22, 2006), https://www.latimes.com/archives/la-xpm-2006-oct-22-tm-arbitrate43-story.html [https://perma.cc/6EUN-L5EU] (describing the practice and reactions to it). The tide has now turned against prison privatization—and, while government officials reassert fuller responsibility, we see some juris­dictions experimenting with VIP-style public jail facilities for nonviolent offenders willing to pay extra for the upgrade out of gen pop. 6 See Kim Shayo Buchanan, It Could Happen to “You”: Pay-to-Stay Jail Upgrades, 106 Mich. L. Rev. First Impressions 60, 61–62 (2007), https://repository.law.umich.edu/cgi/viewcontent.cgi?article=1134&context=mlr_fi [https://perma.cc/L3VC-2XYY]; Jennifer Steinhauer, For $82 a Day, Booking a Cell in a 5-Star Jail, N.Y. Times (Apr. 29, 2007), http://www.nytimes.com/2007/04/29/us/29jail.html [https://perma.cc/4D2X-6KU2]. When it comes to economic regulation, government has likewise reemerged, though most prominently by taking ownership stakes in failing financial institutions 7 See infra notes 141–149 and accompanying text. and by taking very seriously proposals to create public (that is, government-run) banks, possibly through the United States Postal Service (USPS). 8 Jordan Weissman, Kirsten Gillibrand Unveils Her Ambitious Plan to Turn the Post Office into a Bank, Slate (Apr. 25, 2018), https://slate.com/business/2018/04/kirsten-gillibrands-ambitious-postal-banking-bill.html [https://perma.cc/VA2N-DH9B]; see also Mehrsa Baradaran, It’s Time for Postal Banking, 127 Harv. L. Rev. Forum 165, 165 (2014), https://harvardlawreview.org/wp-content/uploads/pdfs/forvol127_baradaran.pdf [https://perma.cc/L7H4-FALD] [hereinafter Baradaran, It’s Time] (describing a 2014 white paper from the Office of the Inspector General of the U.S. Postal Service proposing that the USPS offer financial services). See generally Mehrsa Baradaran, How the Other Half Banks 183–209 (2015) [hereinafter Baradaran, The Other Half] (explaining and endorsing postal banking). The privatization craze around highways has likewise subsided, so much so that some states are buying back privately owned and operated roads. 9 See U.S. Dep’t of Transp., Report to Congress on Public–Private Partnerships 50 (2004), https://www.fhwa.dot.gov/reports/pppdec2004/pppdec2004.pdf [https://perma.cc/AQ33-5MQC] (discussing California’s purchase of State Road 91 from the private franchisee that built and initially operated it); Marlon G. Boarnet, Joseph F. DiMento & Gregg P. Macey, Cal. Pol’y Res. Ctr., Toll-Highway Finance Lessons from Orange County (2002), https://web.archive.org/web/20081007023520/http:/www.ucop.edu/cprc/documents/tollroadbrf.pdf (on file with the Columbia Law Review). And, in yet another nod to the Market, public highway adminis­trators are reclassifying left lanes as premium lanes, no longer reserved (or exclusively reserved) for green-energy cars and carpoolers but rather open to those willing and able to pay sometimes quite steep sur­charges. 10 See Peter Funt, Opinion, Highway Robbery Targets the Poor, N.Y. Times (May 17, 2017), https://www.nytimes.com/2017/05/17/opinion/california-express-lanes.html [https://perma.cc/VD79-XGC7]; Dana Hedgpeth, Toll Hits $46.75 on I-66 Lanes Inside the Beltway, Wash. Post (Sept. 5, 2018), https://www.washingtonpost.com/transportation/2018/09/05/toll-hits-i-lanes-inside-beltway (on file with the Columbia Law Review); Robert Thomson, 95 Express Lanes Mark First Year Anniversary, Wash. Post (Dec. 29, 2015), https://www.washingtonpost.com/news/dr-gridlock/wp/2015/12/29/95-express-lanes-mark-first-anniversary (on file with the Columbia Law Review). Lastly, given the enduring hostility to taxes, this rejuvenated and in many respects postliberal government has encouraged “patriotic philan­thropy,” essentially soliciting private charitable giving to fund state programs and initiatives. 11 See infra section II.A.5.

This Essay aims to make sense of this new, and still inchoate, moment—what I call public capitalism. It explains how public capitalism both reflects and helps accelerate the decline of the modern liberal consensus in America. And it shows how public capitalism unsettles U.S. constitutional, administrative, and corporate law.

To provide texture and clarity, let’s begin with what public capitalism is not. Public capitalism is not just another shift along the public–private axis, another routine oscillation as each generation renews its membership and renegotiates its place within the western legal-liberal tradition. 12 For an encapsulation of such movement within liberalism, see Brian Z. Tamanaha, The Dark Side of the Relationship Between the Rule of Law and Liberalism, 3 N.Y.U. J.L. & Liberty 516, 519–23 (2008). So long as that dynamic perdured, we were able to focus squarely on the relative merits of state sovereign interventions versus private commercial ones. That is to say, in any given policy domain or with respect to any given controversy or concern—e.g., industrial pollution or occupational licens­ing—we were striking some balance between government-imposed regu­lations and privately arrived-at arrangements dictated by market patterns, practices, and pressures. Yet now something different is happen­ing. Government is repositioning itself as a savvy market participant, as evidenced by the examples just discussed—using commercial rather than just sovereign levers to advance its various aims.

Nor is public capitalism just a renaming or repackaging of neolib­eralism, 13 See Wendy Brown, Undoing the Demos: Neoliberalism’s Stealth Revolution 28–35 (2015) (“Widespread economization of heretofore noneconomic domains, activities, and subjects, but not necessarily marketization or monetization of them, then, is the distinctive signature of neoliberal rationality.”). with my coining “public capitalism” for the sake of novelty or to shed some of the heavy baggage that has been heaped on that now-ubiquitous term. Though there is much disagreement about what neolib­eralism actually means, 14 See Mike Konczal, “Neoliberalism” Isn’t an Empty Epithet. It’s a Real, Powerful Set of Ideas., Vox, https://www.vox.com/the-big-idea/2017/7/18/15992226/neoliberalism-chait-austerity-democratic-party-sanders-clinton [https://perma.cc/659P-RZKW] (last updated Dec. 20, 2017). it is fair to say that neoliberalism involves the valorization and elevation of market practices, goals, and theories to such an extent that the State should not only promote free enterprise but also reconstitute itself along decidedly businesslike lines. 15 Cf. David Singh Grewal & Jedediah Purdy, Introduction: Law and Neoliberalism, 77 J.L. & Contemp. Probs., no. 4, 2014, at 1, 1, 3–4, 6 (describing neoliberalism’s endorsement of “market-mimicking” practices in the public sphere and recognizing that neoliberal reforms may undermine democratic values and programs).

At first blush, there appears to be good reason to view the instant moment as a neoliberal one. The State today has indeed expanded its commercial toolkit considerably, using government market partici­pation as an alternative to traditional, sovereign command-and-control regulations and tax-and-transfer welfare programs. This enthusiasm for commercial pathways and prerogatives seemingly reflects the triumph of neoliberalism: the government routinely giving itself over to the laws and lures of capitalism, 16 See David Singh Grewal, The Laws of Capitalism, 128 Harv. L. Rev. 626, 652–61 (2014) (reviewing Thomas Piketty, Capital in the Twenty-First Century (2014)) (describing the legal framework undergirding capitalist political economies). joining in on the fun of pricing goods and services as a for-profit firm would, while measuring success according to such metrics as efficiency and amount of revenue raised.

But that’s hardly the whole picture. Government market participation need not be in service of free, let alone freer, enterprise. It can be, and is, used to achieve any number of market-correcting—rather than market-enhancing or reinforcing—regulatory aims, not to mention redistributive initiatives. That’s certainly true of the so-called public options discussed in such spaces as health care and banking. 17 See Ganesh Sitaraman & Anne L. Alstott, The Public Option 169–80, 202–22 (2019). If anything, state commercial engagement of that sort seems more socialistic than neoliberal.

What’s more, there is a correspondingly converse trend afoot. Some firms are going through a metamorphosis of their own. Mirroring the State’s crossing over into the realm of commercial engagement, these businesses are making some sovereign-seeming interventions. Such appar­ent detours from the steady march of capitalism are most evident in the newest and biggest sectors of market growth. Today we see social-media, high-tech, and gig economy firms undertaking initiatives that are more akin to governing and regulating than they are to ordinary commercial buying, selling, or trading. 18 See infra section II.B.

What then can we say about public capitalism, which blends elements of neoliberalism with socialism, shareholder value maximization with, perhaps, consumer and workplace democracy? For starters, in this jum­bled, postliberal world of public capitalism, public and private are less fixed, less distinct, and (as a result) less relevant statuses. What seems of greater relevance now is the sovereigncommercial axis, as public and private actors are each showing themselves willing and able to intervene in the political economy as either sovereign regulators or market participants. 19 See, e.g., Jon D. Michaels, Sovereigns, Shopkeepers, and the Separation of Powers, 166 U. Pa. L. Rev. 861, 892–95 (2018) [hereinafter Michaels, Sovereigns] (characterizing the separate and distinct roles played by government regulators and private commercial actors and emphasizing how that separation is in keeping with an overarching American constitutional commitment to engendering separation between rivalrous sets of stakeholders). Hence public capitalism requires us to think less about the legal status of actors (qua public or private) and more about the tools they wield, the prices they ascribe to the goods and services they provide, and the kinds of obligations they impose.

In this jumble, actors and institutions are the ultimate code switchers, toggling between identities, orientations, and goals. They are thus able to transcend their classically liberal, perhaps crabbed, all-defining roles as either public sovereigns or private businesspeople. We, in turn, the very subjects (and objects) of public capitalism, may likewise be empowered. We may be empowered to insist government be more commercially minded—and treat us as consumers. We may be empowered, too, to insist firms be more attentive to the commonweal—and thus treat us like citizens.

The downside, of course, is that such liberation may leave citizen-consumers unmoored. For generations, we’ve been immersed in the law and language of legal liberalism. As a result, there presently is no corre­sponding code-switching grammar for us to understand how government agencies and private firms construct their new identities—and no under­lying philosophy that enables us to evaluate the coherence or morality of those new identities, let alone participate meaningfully in structuring them.

For the immediate moment then, public capitalism is about power—about the power to reconfigure institutional identities and transcend legal ones. It changes the nature of government, firms, and the interplay between the two (and vis-à-vis the general public as citizens and con­sumers). Quite possibly critical to advancing any number of long-stalled political and commercial projects, public capitalism nevertheless cannot help but leave us with a pang of philosophical and constitutional agita, as all of us (including governments and firms) struggle to find purpose once untethered from the familiar if not always comforting precepts of legal liberalism.

The challenge going forward will thus be to ascribe meaning to public capitalism, to put that undeniable but undertheorized power to good use. Perhaps it is the vehicle that can pull us out of neoliberalism’s double doldrums: the worker alienation many feel in an increasingly hyper­capitalist economy and the political alienation many feel in an increasingly plutocratic polis. Just as plausibly, public capitalism may exacerbate our dual dislocations.

This Essay takes the first step in exploring public capitalism. In the Parts that follow, I provide a genealogy of public capitalism. I show how it is both an apostle and apostate of modern liberalism; describe its robustness across multiple policy domains at the federal, state, and local levels; capture its political, legal, and cultural resonance; and begin to explain its effect on firms, markets, and public and private law. By way of conclusion, I consider what the pivot from twentieth-century liberalism to twenty-first-century public capitalism suggests and portends. Because of limitations of space and scope, this Essay focuses squarely on the govern­ment market participant dynamic, leaving a serious and sustained study of the converse phenomenon—firms acting as sovereigns—for a later day.