Social scientists have long been interested in the influence of ideas on government action. In Max Weber's classic formulation, innovative ideas could create new “world images” and fundamentally reshape the terms of struggle among interests. A half century later, John Maynard Keynes, hoping to revolutionize thinking about the government and the economy, made his famous observation that “the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.”

Such views are challenged by arguments that material interests, not ideas, are the true motors of policy change. Those who emphasize the role of ideas are often poorly equipped to respond to their critics because they have traditionally devoted little attention to how ideas become influential, why some ideas win out over others, or why ideas catch on at the time that they do. In this chapter, I argue that simply opposing ideas to material interests excludes many of the most interesting questions about policy innovation. Instead, we need to understand how ideas become influential by scrutinizing the fit between ideas and politics and discerning how and why it changes over time. The way to do this is by tracking the development and paths to influence that ideas and material interests take within the institutional context of policy-making.

I pursue these questions by examining the development of employment policy in the United States from the New Deal to the Reagan administration.