Thanks to TPM for inviting me, the outlier in this group, to join in the discussion. And thanks to Eric Alterman for writing a book that is simultaneously pugnacious and thoughtful. He's provided a great deal to chew on.

Let me start by explaining my own complicated and evolving relationship with liberalism. For all my adult life, I've considered myself a liberal -- a classical liberal, that is. The more common name for people like me is libertarian, but some of us have resisted giving up the older, more elegant, more historically grounded label. The Cato Institute, my employer, tried to float the term "market liberal" a while back. Alas, it sank.

As liberals of a certain type, we libertarians have sided with liberals and against conservatives on many important issues: civil liberties, censorship, drug policy, and separation of church and state, for example. Most libertarians I know are pro-choice, and most favor full legal equality for gays and lesbians. And although I was a Cold War hawk, and by misapplying those old attitudes to the post-9/11 environment I came to support the Iraq war (a decision I now deeply regret), the prevailing tendency among libertarians has been to urge restraint in the exercise of American power -- a position that, over the years, has had more adherents on the left than on the right.

Yet despite our shared liberal heritage and a good deal of common ground on issues of the day, the fact is that, until recently at least, most libertarians like me have rooted for conservatives and Republicans in the political arena. Most of us cheered Reagan's victories; most of us were delighted by the Republican takeover of Congress in 1994. And most of us, heaven help us all, preferred George W. Bush to Al Gore. We sided with the political right because of its libertarian-inspired support for reduced government spending, lower taxes, and less heavy-handed regulation of economic activity. On these matters of central concern to us, conservatives may have been inconsistent allies, but liberals were dependable and determined adversaries.

Things have been changing in recent years, though, and old ideological identities and loyalties are now in flux. First, America's political economy has shifted in a decidedly libertarian direction over the past few decades. Nobody believes in socialism anymore. Although there's a fair amount of nostalgia on the left for the good old days of the Big Government-Big Labor-Big Business triumvirate, nobody really thinks the Galbraithian "technostructure" can be reassembled. Nobody's looking to revive the Interstate Commerce Commission and the Civil Aeronautics Board, or reimpose fixed interest rates and brokerage commissions, or go back to Ma Bell. Nobody seriously proposes a return to 70% tax rates or Aid to Families with Dependent Children. So while libertarians and liberals can still find no end of things to disagree about, the stakes are much lower than they used to be. And the disputes feel more empirical than theological. These days a free-market liberal may be a member of a minority faction, but he's not an oxymoron.

Meanwhile, libertarians' marriage of convenience with conservatives has grown increasingly inconvenient. Fiscal incontinence, extreme assertions of executive power, an arrogant and witless foreign policy -- the Bush years have been a libertarian nightmare. And the larger conservative movement has changed in character as well. Small government and free markets are no longer the priorities they once were. Instead, most of the energy on the right these days is generated by immigrant-bashing and dangerous fantasies of a new Cold War with Islam. Such xenophobic impulses are repugnant to anyone with any kind of liberal temperament.

As a result, libertarians' alliance with conservatism is coming unglued -- and a rapprochement with liberalism now looms as at least a possibility.

That possibility is enhanced, I believe, by Eric's book. To his credit, Eric stresses contemporary liberalism's classical liberal roots. His definition of liberalism's big tent -- a "bedrock belief in personal freedom" and Enlightenment values -- is one that libertarians can embrace heartily. And his unapologetic defense of liberal cultural values is filled with libertarian applause lines.

Of course, Eric also upholds European social democracy as a model for what liberalism looks like in practice. Here I respectfully, predictably, and vigorously dissent. Don't get me wrong: I think contemporary European societies are among the most successful in all of human history, and there is much about life there today that Americans would do well to emulate. But a good deal of European social democracy just isn't liberal at all; it's collectivist and corporatist in its conception and structure and to that extent does not reflect a "bedrock belief in personal freedom." And as to the vitality and sustainability of the European model, I'll side with good liberal economists like Barry Eichengreen and Brad DeLong, both of whom argue that deep-seated structural reforms are needed.

This conflation of liberalism with collectivism lies at the heart of the problems with Eric's analysis as I see them. In Eric's telling, the Roosevelt-Truman era was American liberalism's heyday, while things started to go badly wrong in the '60s. Of course that's true as far as political success is concerned. But in terms of fidelity to the larger liberal tradition, I think Eric has things almost exactly backwards. Eric cops to liberal arrogance and elitism -- real vices to be sure, for which liberal politicans have paid dearly at the polls since the mid-'60s. But he never really admits to American liberalism's biggest deviation from liberal principle: its decades-long dalliance during the 20th century with socialism, a deeply anti-individualistic ideology based on a completely wrongheaded theory of how the world works. It was during the New Deal-Fair Deal years that misplaced confidence in central planning and top-down control were at their peak. By contrast, the New Left of the '60s was animated at least in part by a libertarian rebellion against the soulless "technocracy" of the New Deal order. And liberalism, influenced by that rebellion, made an individualistic turn away from unions and planning boards and toward civil liberties, free expression, and greater sexual freedom.

So I applaud Eric's project of liberal renewal. I think it is timely, I like its spirit, and I endorse its broad conception. But, as developed thus far, it lacks sufficient appreciation for the deep connection between the liberal institutions of the market order and the liberal values that Eric and I both prize. I don't mean that to be a good liberal, you have to be a libertarian -- not at all. But I do believe that liberal principles impose real constraints on the structure and role of government, and I don't think Eric has fully come to terms with that fact. More on that later.