Looked at from Europe and Asia, the US economy has emerged as a formidable global competitor with the leading brands, the leading technologies and a careful strategy of producing low-value-added goods in Asia while nurturing high technology at home. If American blue-collar jobs have been lost in mass-production manufacturing, they have been created in distribution, transportation and services--and also in the high-value-added "knowledge economy."

Thus American blue-collar workers are split into four components: those under direct competition from Asia, those working in the blue-collar service sector, those directly or indirectly benefiting from high-value-added knowledge work and those who work in the public sector. Each component is in very different circumstances--and even in the public sector, the appeal of trade unions and collective action is fading. Democrats have allowed too many of these new categories of workers to be recruited to the Republican cause with their redefinition of the public interest as private. The repercussions for the battle of ideas have been global.

The first task in any rebirth of liberal politics is to recognize contemporary realities--the primacy of a highly individualized culture with a highly segmented working class with very different objective interests--and not hanker to re-create an order that is past. Liberals need to be clear-eyed about the extent to which the current world system benefits the United States; for example, Chinese goods are cheap, boost real incomes and create a disinflationary climate of low interest rates that has provided a massive economic stimulus. Protection might benefit one of the four components of the working class--those in direct competition with Asia--but it would hurt the other three, not to mention poverty-stricken Asian peasants now delighted to have the opportunity for self-improvement.

The second task is to understand that winning the argument at the big political level, as much as detailed policies, is a condition for winning power. In this regard, what has to be done is not to make the case for "government" or "collective" action, which goes against the contemporary grain of American political culture, but to recapture the idea of the public and the importance of the public institutions through which it is delivered. For example, American universities--among the country's great public institutions--are the envy of the world, but they have increasingly become the preserve of the children of a rich elite who can afford the stunning fees, with a consequent alarming reduction in social mobility. They must be reclaimed; even the top private universities recognize the "publicness" of their vocation and the degree to which the "public" is currently being corrupted. Social mobility is a public interest, and its decline is of public concern. The argument needs to be made in those terms.

I would go further still. The United States was colonized by the values of the Enlightenment and its commitment to reason, to checks and balances in government, and to the importance of a lively public sphere. It was these Enlightenment values interacting with the great nineteenth-century egalitarian tradition that gave the United States its dynamism as much as its go-getting capitalism. Now the values of the market and increasingly religion have been allowed to crowd out the vitality of the entire fabric of Enlightenment institutions. The liberal case surely has to be to reassert why these institutions are so important and to remake the case in today's context--hence the instinctive liberal support for open-sourcing, the public dissemination of knowledge and the fair distribution of access to information. I would also add the old progressive case against excessive corporate power and breathe life into the Sherman and Clayton acts. Trustbusting and taking on the creationists are essential parts of the story.

We also need to revive institutions of grassroots altruism and solidarity. Nowhere in the industrialized West has the progressive cause gone far without the support of organized labor; but the conventional trade union no longer captures the imagination or hearts of working people. Only when unions start growing with a much more clearheaded sense of what their members want and what can be delivered will there be a more secure political base.

But it all starts with associating liberals with the idea of the public in its best Enlightenment sense, showing how that has worked for the United States in the past and could work for it in the future.

This solution is adapted from an earlier article, which was part of a forum entitled "Taming Global Capitalism Anew." It is reprinted with permission from the April 17, 2006 issue of The Nation magazine. Portions of each week’s Nation magazine can be accessed at http://www.thenation.com. Click here to see the problem this solution addresses, which includes a list of the other solutions from the same Nation series.