We all know the system isn’t working
by David Atkins
There’s been a deal of discussion about this Chrystia Freeland op-ed in the New York Times. The general point of the column is that despite the political advantages accruing to the plutocrats, populism on both the left and the right seems to be in an upswing. There are a few bits of silliness and poor argumentation in it, but the final thesis is very good, and one that I’ve been writing about in various ways for years now:
Where does that leave smart centrists with their clever, fact-based policies designed to fine-tune 21st century capitalism and make it work better for everyone?
Part of the problem is that no one has yet come up with a fully convincing answer to the question of how you harness the power of the technology revolution and globalization without hollowing out middle-class jobs. Liberal nanny-state paternalism, as it has been brilliantly described and practiced by Cass R. Sunstein and like-minded thinkers, can help, as can shoring up the welfare state. But neither is enough, and voters are smart enough to appreciate that. Even multiple nudges won’t make 21st-century capitalism work for everyone. Plutocrats, as well as the rest of us, need to rise to this larger challenge, to find solutions that work on the global scale at which business already operates.
The other task is to fully engage in retail, bottom-up politics — not just to sell those carefully thought-through, data-based technocratic solutions but to figure out what they should be in the first place. The Tea Party was able to steer the Republican Party away from its traditional country-club base because its anti-establishment rage resonated better with all of the grass-roots Republican voters who are part of the squeezed middle class. Mr. de Blasio will be the next mayor of New York because he built a constituency among those who are losing out and those who sympathize with them. Politics in the winner-take-all economy don’t have to be extremist and nasty, but they have to grow out of, and speak for, the 99 percent. The pop-up political movements that come so naturally to the plutocrats won’t be enough.
One of the weaknesses of the column is that it gives far too much credit to the competency of neoliberal technocrats working out market-based Rube Goldberg policy contraptions (Exhibit #1: Affordable Care Act implementation). That aside, she’s dead accurate in that voters are smart enough to know that they’re being taken for a ride.
It’s not just progressives, either. As much as Tea Partiers are driven by racism, sexism, fundamentalism, Objectivism and a hatred of the Other, there’s something common to both Tea Partiers and progressives: an understanding that something very important has slipped away from the American middle-class experience, and a large distrust of the “elites” making policy decisions.
Progressives see that elite in the boardrooms of big corporations and on the yachts of their CEOs. Tea Partiers see that elite in clueless do-gooder academics and government officials sitting high in their ivory towers. As Thomas Frank has been pointing out for years, Tea Partiers happen to be very wrong about who is to blame for the decline in middle-class power, but they’re not wrong about the fact that they’re losing.
As jobs disappear from the landscape permanently never to return and as wealth consolidates into fewer and fewer hands, tinkering around the edges of the system and setting up over-complicated public-private schemes just aren’t going to work. Corporations aren’t just going to create jobs if there’s no demand for products, the magic of technology isn’t going to create enough jobs to replace the ones that are destroyed, and only so many people can start their own businesses or become independent contractors. Nor, realistically, are the middle classes of industrialized nations going to accept being slowly ground into poverty as the billionaires like Pete Peterson would prefer. It’s not generally poor people who have been destitute for generations who foment revolution: it’s people who have known better times and suddenly been impoverished.
Conservatives, being more authoritarian and distrustful of “others” by nature, can’t fathom that the rules of the game might be broken. It’s much easier for them to believe that some evil villains in government ivory towers are taking things from them and giving them away to poor people who don’t look like them. Progressives, for their part, tend to look at the better economy of the past and tell themselves that everything will be OK again if we just institute more protectionism and higher tax rates on the wealthy.
That answer does hit closer to the mark, but it still isn’t adequate. Both sides are taking on faith that they can return to that great economy of the post-war era, and that evil forces conspired to take it away from them.
But that’s not really true. Mechanization, globalization and deskilling conspired to take away jobs while shuttling all the wealth to the top of the chain. More than ever before, the natural rules of capitalism are leading to this result. Leaving the rules of the game in place while simply taxing the dwindling number of outsize winners, isn’t a good or sustainable long-term solution. And, of course, pie-in-the-sky libertarian fantasies aren’t workable, either.
The proper path forward is to determine what the economic rules should look like in this brave new world of vertical integration, mass mechanization and Big Data. What is the bargain between a society and its people when there simply aren’t enough jobs for its people, and when economic growth often depends on mutually assured environmental destruction?
Neoliberals certainly don’t have an answer for this question. But then, most partisan progressives and conservatives don’t have workable ones, either.
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