Tag Archives: Socialism

The ultimate guide to shutting down conservative anti-Piketty hysteria

Thomas Piketty’s wildly popular new book, “Capital in the 21st Century,” has been subject to more think pieces than the final episode of “Breaking Bad.” Progressives are celebrating the book — and its unexpected popularity — as an important turning point in the fight against global wealth inequality. This, of course, means that conservatives have gonecompletely ballistic.

Rush Limbaugh, for example, has come out guns a-blazing: “Some French socialist, Marxist, communist economist has published a book, and the left in this country is having orgasms over it,” he exclaimed during a recent broadcast.

When the right drops the C-bomb, the M-bomb and S-bomb all at once, you can be certain a book is having an impact. And “Capital” may well be the “General Theory” of the first half of the 21st century, redefining the way we think about capitalism, democracy and equality.

This, of course, means that the right-wing attacks have only just begun. That in mind, here is a handy guide to navigating the more absurd responses:

Claim: Piketty is a dirty Marxist

There are two Marxes. One, a scholar of capitalism of repute, put forward testable hypotheses, some of which you may accept, some of which you may reject. The other is a conservative boogeyman, the human representation of all they find evil. If they dislike something, it must be Marxist.

James Pethokoukis, a formidable writer, went full hack for his National Review review,

Thanks to Piketty, the Left is now having a “Galaxy Quest” moment. All that stuff their Marxist economics professors taught them about the “inherent contradictions” of capitalism and about history’s being on the side of the planners — all the theories that the apparent victory of market capitalism in the last decades of the 20th century seemed to invalidate — well, it’s all true after all.

How to respond: Most times someone drops the M-Bomb, he is intending to be provocative. With enough effort, you can make almost anything Marxist. While Marxists don’t agree on everything, and the term is very nebulous (Marx once said he wouldn’t describe himself as a Marxist), there are some pretty established rules for determining if someone is, indeed, a Marxist. First, he generally doesn’t write things like,

  • “Marxist analysis emphasized the falling rate of profit — a historical prediction that turned out to be quite wrong” (“Capital in the 21st Century,” page 52)
  • “Marx usually adopted a fairly anecdotal and unsystematic approach”. (“Capital in the 21st Century,” page 229)
  • “Marx evidently wrote in great political fervor, which at times lead him to issue hasty pronouncements from which it is difficult to escape. That is why economic theory needs to be rooted in historical sources …” (“Capital in the 21st Century,” page  10)
  • “… Marx totally neglected the possibility of durable technological progress and steadily increasing productivity.” (“Capital in the 21st Century,” page  10)

These are not the words of a Marxist, but rather a reasonable scholar, investigating the truth of the claims written by the greatest political economist who ever lived. The fact that Piketty abstains from the vitriol and misrepresentation that typify most writing on Marx are to his credit.

Piketty certainly does argue that capitalism will not inevitably reduce inequality, as economist Simon Kuznets had famously claimed. As to whether capital will accumulate without end, as Marx believed, he is more nuanced.

Piketty argues that capital will accumulate in the hands of the few when growth is slower than the rate of return on capital and dis-accumulate if not (This is the now famous “r>g” formula). As growth slows, companies can replace workers with machines (written by economists as “substitution between capital and labor”), but only if there is a high elasticity of capital to labor (higher elasticity means easier replacement). This means that the share of income going to the owners of capital will rise, and the distribution of that capital will become more unequal.

Piketty does not hold to a labor theory of value, he does not believe that capitalism is founded on the exploitation of the proletariat, and he does not believe the system will inevitably collapse on its own contradictions. But critics who call Piketty a Marxist don’t actually mean, “Piketty subscribes to a collection of propositions generally accepted by Marxists”; they mean it as a verbal grenade. Step over it and move to more substantive criticisms.

Claim: The social safety net has already solved the problem

In order to somewhat compensate workers for voluntary unemployment and the ludicrously low wages that “markets” pay them, modern societies have developed transfer systems, or social safety nets of various levels of robustness, to bolster the incomes of low-wage workers. Some conservatives argue that these transfers have solved the inequality problem.

Scott Winship, the lovable but irksome economist dedicated to upsetting the inequality consensus, writes in Forbes,

Most importantly, in the United States, most public transfer income is omitted from tax returns. That includes not just means-tested programs for poor families and unemployment benefits, but Social Security. Many retirees in the Piketty-Saez data have tiny incomes because their main source of sustenance is rendered invisible in the data.

How to respond: There’s not enough room to give his data claims a full airing. For our purposes, it suffices to say that, while America does have a transfer system, it’s far less robust than that of other developed nations. (See chart below, from Lane Kenworthy.)

Government revenues are far lower in the U.S. than in other countries, making redistribution more difficult, and thus our safety net is far more frail. (See chart below, from Sean McElwee.)

Far more interesting is what would happen if conservatives made this their line. After all, if transfers are what is preventing inequality from skyrocketing then the rising share of pre-transfer income accruing to the wealthy capital owners means we need more robust transfer system. Because few, if any, thinkers on the right have argued for a stronger transfer system (and are, in fact, attempting to violate it), they must accept the logical conclusion: Their policies will set off skyrocketing inequality (or, more likely: They don’t give a shit).

Claim: Inequality isn’t a problem because look at consumption!

There are lots of ways to look at inequality. You could look at income inequality by examining how much a person takes home every year from their labor, income from assets and transfers. You could also look at wealth inequality by figuring out how many assets they own, in the form of stocks, bonds, property, and subtract from it their debts. Or you could look at how much they are able to consume.

Some conservative economists argue that an increase in income inequality has not been mirrored by an increase in consumption inequality because the wealthy save or invest their income. Kevin Hassett, a former Romney economic adviser, illustrates this point, arguing:

From 2000 to 2010, consumption has climbed 14% for individuals in the bottom fifth of households, 6% for individuals in the middle fifth, and 14.3% for individuals in the top fifth when we account for changes in U.S. population and the size of households. This despite the dire economy at the end of the decade.

Although he initially made this argument against Piketty in 2012, he has revived it recently in a lecture on the subject.

How to respond: In large part, this is a common trope on the right — the “but they have cellphones!” argument. The empirical literature on this subject is still very much in flux, and there is not a consensus. Some recent studies find that consumption inequality has increased with income inequality. But even if we except the consumption inequality argument, conservatives have some explaining to do. After all, if income inequality has been rising while consumption inequality has stayed the same, where is the spending coming from? Debt. Which means that wealth inequality is increasing, as the rich save more and the poor fall further into debt. Research released this week by Amy Traub of Demos finds that the recent increase in credit card debt hasn’t been driven by profligate spending, but unemployment, children, the declining value of homes and lack of health insurance. Recent research by Emmanuel Saez and Gabriel Zucman show how the bottom 90 percent simply haven’t been able to save their incomes and thereby build wealth. (See chart below.)

Claim: We need lazy rich people

Tyler Cowen is one of the more honest of Piketty’s critics, and there is certainly a lot to like in his review. However, this section is a head-scratcher:

Piketty fears the stasis and sluggishness of the rentier, but what might appear to be static blocks of wealth have done a great deal to boost dynamic productivity. Piketty’s own book was published by the Belknap Press imprint of Harvard University Press, which received its initial funding in the form of a 1949 bequest from Waldron Phoenix Belknap, Jr., an architect and art historian who inherited a good deal of money from his father, a vice president of Bankers Trust… consider Piketty’s native France, where the scores of artists who relied on bequests or family support to further their careers included painters such as Corot, Delacroix, Courbet, Manet, Degas, Cézanne, Monet, and Toulouse-Lautrec and writers such as Baudelaire, Flaubert, Verlaine, and Proust, among others.

How to respond: It’s very true that in the past, many artists, writers and thinkers benefited from familial wealth (or rich benefactors). This, however, is not to be celebrated! It means that marginalized people are frequently removed from mainstream discussion. It’s also a dreadful defense of inequality. As theologian Reinhold Niebuhr writes,“The fact that culture requires leisure, is however, hardly a sufficient justification for the maintenance of a leisured class. For every artist which the aristocracy has produced, and for every two patrons of the arts, it has supported a thousand wastrels.”

Poverty and oppression can also create other powerful types of art, from boheim to the blues. More important, there are far better ways to fund the arts than throwing money at rich families and hoping they cook up something nice. For instance, the National Endowment for the Arts has funded arts education, dance, design, folk and traditional arts, literature, local arts agencies, media arts, museums, music, musical theater, opera, theater and visual arts. In the aftermath of the Great Depression the Works Progress Administration had an arm devoted to funding the arts that supported Jackson Pollock, William Gropper, Willem de Kooning, Leon Bibel and Ben Shahn. The CIA has even gotten into the game.

As Niebuhr notes, “An intelligent society will know how to subsidize those who possess peculiar gifts … and will not permit a leisured class to justify itself by producing an occasional creative genius among a multitude of incompetents.” It’s a wonder that conservatives want the wealthy financing art and philosophy — Marx, after all, would have died of penury without the beneficence of the wealthy Engels. Given that his economist friends have been impressed by Piketty’s cultural depth because of his ability to cite Jane Austen, I wouldn’t put much weight on their cultural defense of privilege.

Claim: Piketty is French, and we saved their asses in World War II

This is true. You’ve lost the debate.

Originally published on Salon.

The Tea Party’s perverse leftist fantasy

The left has spilled pages of ink and innumerable pixels wondering why the middle class votes against its interests, debating the effect of the Democratic Leadership Council, and which candidate would be the best presidential contender in 2016 (one of us is guilty ofsuch indulgences). Lefties have harangued Barack Obama, even suggesting that Richard Nixon was more liberal. By doing this, the left has has succumbed to right-wing ideas about social change – that it comes from great men, rather than collective action.

Throughout history, we can find examples of this mythos. FDR, the liberal hero, was not a Nietzschean overman, he was confined by his circumstances. Economics professor Richard Wolff argues that he could only raise marginal tax rates to 90 percent, create a vast array of make-work programs and push through a universal pension because capitalists were so terrified of a mobilized left.

Similar outside pressures also account for the widespread myth that Nixon was a leftist. As Erik Loomis noted discussing Nixon’s environmental record, “Richard Nixon was however a very shrewd politician operating in the time of the postwar liberal consensus.” That is, no matter how conservative Nixon was, he simply could not veto the bills before him without either being overridden or digging deep into his limited cache of political capital. In the same way, no matter how much Obama may want to pass universal health care or gun regulations, he cannot. The central lie of the DLC was not neoliberalism, but the idea that the presidency mattered. By shifting the focus to an almost sacrosanct view of the presidency, the left has forgotten about movement building to fawn on “progressive heroes.”

Consider the press around Bill de Blasio, the newly elected progressive mayor of New York City. For the most part, it has succumbed to the “great man” narrative, and many New Yorkers wait with baited breath for him to single-handedly obviate income inequality. But de Blasio’s success was not his alone, and his governance will not be either. As Harold Meyerson documents, it was the Working Families Party, which spent decades building a progressive infrastructure in and around the city that de Blasio needed to win and it is WFP defense attorneys, city council members and public advocates that will make his time as Mayor successful.

 

If a Democratic president sits in the Oval Office it may well be due to the tireless efforts of organizations like National Employment Law Project, Demos, Project Vote, Common Cause and others that register voters, build coalitions and sue states just to get them to comply with laws on the books.

The best palliative for this great-man obsession is “The Lego Movie.” In the movie, the “Master Builders,” await a prophesied “special” to destroy Lord Business. When they finally meet the special, Emmet, they find him entirely banal. Eventually, they realize there is no savior, and that they must use their own talents and abilities, contribute what they can to create an emancipatory movement. Such is the debacle of the left. Our hero, long prophesied, has come, and though he is extraordinarily capable, there is simply no way that he can single-handedly end all wars, pass immigration reform, save Social Security, stop the rising oceans and slash rising inequality.

In “The Lego Movie,” the opposition was not only wrong about who would bring change — they were wrong about how change would come about. The Master Builders thought they were going to use their existing institutions and infrastructure. Although they did not use manuals, they still loathed to deviate from the prepared plan. It is Emmet’s insight that the plan is fatally flawed – there is no need for a vanguard party, but rather a mass collective action. His insight is scorned by the council who expected to simply storm Lord Businesses’s offices again, even after Metalbeard’s failed assault. For us as for them, the existing institutions and infrastructures are only part of the equation. Sheldon Adelson votes, like you and me, but he also spent more than the residents of 12 states combined on the 2012 election cycle. In their recent study, Larry Bartels find that the wealthy are not only more engaged in terms of voting, they are also more likely to vote, donate money to campaigns, attend rallies and meet with or call candidates. The left cannot continue storming the Presidency and expecting change.

The right learned the lesson of 1930s and began a mobilization of their own, one which has become so powerful it is almost unseating them from power. The Tea Party is, in nearly every way, a leftist movement. It is based on a perversely egalitarian sentiment, a “makers and takers” narrative, and leftist mobilization. Many may be surprised to learn that the Republican primary candidate who raised the largest percentage of his money from large donors was the most moderate: Jon Huntsman. Like the communists and socialists of the post-depression years, the Tea Party has obliterated the paradigm, pushing change from outside the political system.

“The Lego Movie” is in stark contrast to other “leftist” movies, like “Elysium,” that rely on “great men” to save humanity. “The Lego Movie” is not meant to be communist propaganda, but rather aims to obliterate the “hero narrative” that Joseph Campbell identified in “Hero With a Thousand Faces.” In “The Lego Movie,” Emmet is not “the special.” In fact, the the prophecy predicting such a figure was made up by Emmet’s mentor Vitruvius. But Emmet’s adventure over the course of the film still mirrors the Hero’s Journey narrative laid out by Campbell. However, somewhat contrary to Campbell’s outline, Emmet’s journey doesn’t change him. Instead, his journey changes those around him: his allies the Master Builders and the people of Bricksburg.

Christopher Vogler’s book “The Writers Journey” adapts Campbell’s Hero’s Journey to the craft of writing. In it, he discusses the various kinds of heroes seen in storytelling. Emmet fits into the category of “Catalyst Hero”: “A certain class of Hero is an exception to the rule that the Hero is usually the character who undergoes the most change. These are catalyst Heroes, central figures who may act heroically, but who do not change much themselves because their main function is to bring about transformation in others.” Emmet’s journey teaches the Master Builders and the greater Bricksburg population that everyone is special and should use their personal talents to work together.

In this story, the hero is not unwilling, but impotent; he is not called, but rather stumbles upon his fate; and he does not grow, but rather those around him do. This is a far more realistic description of the reality of Obama’s presidency the salvific narrative that surrounded his election in 2008. His failures remind us that it is not “Great men” who act as a force for social change, but rather great movements. Norberto Bobbio recognized that the central feature of the left was the belief in human equality. As Rousseau said, “the destruction of equality was attended by the most terrible disorders.” In  a brilliant bit, British comedian Robert Newman diagnoses the problem on the left,

When I first started getting involved with Radical-Direct-action-Non-hierarchical-Eco-autonomous-grassroots organisations, I didn’t understand the concept of no leaders. I thought I did; but I didn’t. And I’d go upto the nearest alpha male or alpha female and say, “Here’s what you should do – Why don’t you do this – It’d be great if you all did this – And when are you going to do this?” And they’d give you this look, that I never understood…

What this look meant was, “Yes, good Idea, why don’t you do it yourself? You print the leaflets, I’ll distribute them; you call a meeting, I’ll attend; you organize an action, we’ll come along”.

And from that moment, I realized that, my whole philosophical outlook changed. And from then on, instead of suggesting things other people could do, I stopped suggesting things altogether, in case they expected me to do them…

Such a problem won’t be found in “The Lego Movie,” where characters are exhorted to “start building” with whatever they have on hand. The left needs more middle class donors, giving not just to political campaigns, but unions and think-tanks. The left needs more writers, artists, policy analysts, historians and scientists. The truth, the one that no pundit will ever write publicly, is that it doesn’t matter whether the Democratic nominee is Warren or Clinton, what matters is whether there is a mobilized worker’s movement, student demonstrations and new and refreshed leftist thinking. McGovern didn’t end Vietnam; hippies did. We, the people, did.

Originally published on Salon. 

Do the 1 percent create jobs?

A friend of mine, AJ, posted this on his blog:

Open letter to Jamie Johnson, director of “The One Percent”:

Dear Jamie,

You are an arrogant idiot. Your perception of a “just” America is one that is far from free, and your efforts have hurt the poor much more than they have helped them. You foolishly talked to Milton Friedman in various clips from your documentary “The One Percent”, who gave solid reasoning for why we need wealthy people for job creation. He’s Milton Friedman! You just don’t argue with him when you’re an ignorant “non-economist”–especially disrespectfully. You’ve taken Kanye West as my least favorite person, and I sincerely hope you drop your disposition and ignorance and buy a simple economics textbook. Heck, I’ll buy it if you’ll read it. Let me know.

It’s as good as any example of a tendency I’d like to address again. The idea, at its heart, is whether cutting taxes on the wealthy will create jobs, and therefore the converse, will increasing tax rates on the wealthy (to finance a stronger social safety net) decrease jobs? No. A few reasons here. First you have the Stiglitz argument that Nick Hanauer has adopted: rich people need demand. But more importantly, the amount of investment in the economy doesn’t depend on tax rates, but how much investment there is to be had. At some point, cutting taxes is just pushing on a string. In a depressed economy with little private investments available, it makes sense to make public investments financed by taxes. But even in a non-depressed economy, there is no correlation between economic growth and marginal tax rates on the wealthiest.

Piketty_Blog

Piketty_Blog

I want to plaster this chart up on every subway on the nation, because it shows, empirically, what the left has been saying for decades: cutting taxes on the rich doesn’t stimulate the economy. Why is this important? Well I was talking to my dad over the break, and I asked him why he voted for Bush, given the tax breaks for the rich. Once I established that these tax breaks primarily helped the rich, and hurt him by giving the government less money for say, Social Security or college loans, he told me this:

I just figured that the money being in the hands of someone who could invest it and create jobs, rather than me, who would just consume it.

We now know empirically that this simply isn’t true. For one, my dad can invest, he can easily take out money in the stock market, he could help me and my brother go college (or grad school). More importantly, he can spend! That creates opportunities to invest! That creates jobs! The rich want to place themselves at the center of the economy, but it’s the middle class that is the engine for growth. Don’t forget that.

Let’s talk politics quick. What my father is expressing is a classic example of what Engels would call “false consciousness.” Generally speaking, we would expect people to vote for their class interests, but often they don’t. Thomas Frank proposes that they are swayed by social issues. Steinbeck, proposes aspiration as the motivation (I have frequently invoked this as well). Other political scientists suggest that when material standards cease to become an issue, people vote symbolically (i.e. Bush is just like me!). But all of these arguments understate the extent to which the middle class is entirely unaware how misaligned the interests of the wealthy are with their interests. I find it hard to believe that prejudice against gays, aspiration and symbolism can explain why the middle class would forgo $19,000 in yearly income (how much more money the median family would have if incomes had grown proportionally over the last 30 years). That is, voters have not made rational choices, because they were deceived.

So we are back to the Marxist explanation: the central feature of all capitalist societies is obfuscating class interest and exploitation. As my mother said, “Sean, you should really tell people about this.” So I am. The rich have been screwing you. Your interests are not theirs. It’s as simple as that.

P.S. My ideas on history (and my Christianity) prevent me from being a full-on Marxist, but we really need to start understanding Marx as a classical, Enlightenment economist. This would make our public discussion of his ideas far less prone to the vulgarity * it descends to today.

*Classic sense

 

Five suprising things Marx got right

There’s a lot of talk of Karl Marx in the air these days – from Rush Limbaugh accusing Pope Francis of promoting “pure Marxism” to a Washington Times writer claiming that New York City Mayor Bill de Blasio is an “unrepentant Marxist.” But few people actually understand Marx’s trenchant critique of capitalism. Most people are vaguely aware of the radical economist’s prediction that capitalism would inevitably be replaced by communism, but they often misunderstand why he believed this to be true. And while Marx was wrong about some things, his writings (many of which pre-date the American Civil War) accurately predicted several aspects of contemporary capitalism, from the Great Recession to the iPhone 5S in your pocket.

Here are five facts of life in 2014 that Marx’s analysis of capitalism correctly predicted more than a century ago:

1. The Great Recession (Capitalism’s Chaotic Nature)

The inherently chaotic, crisis-prone nature of capitalism was a key part of Marx’s writings. He argued that the relentless drive for profits would lead companies to mechanize their workplaces, producing more and more goods while squeezing workers’ wages until they could no longer purchase the products they created. Sure enough, modern historical events from the Great Depression to the dot-com bubble can be traced back to what Marx termed “fictitious capital” – financial instruments like stocks and credit-default swaps. We produce and produce until there is simply no one left to purchase our goods, no new markets, no new debts. The cycle is still playing out before our eyes: Broadly speaking, it’s what made the housing market crash in 2008. Decades of deepening inequality reduced incomes, which led more and more Americans to take on debt. When there were no subprime borrows left to scheme, the whole façade fell apart, just as Marx knew it would.

2. The iPhone 5S (Imaginary Appetites)

Marx warned that capitalism’s tendency to concentrate high value on essentially arbitrary products would, over time, lead to what he called “a contriving and ever-calculating subservience to inhuman, sophisticated, unnatural and imaginary appetites.” It’s a harsh but accurate way of describing contemporary America, where we enjoy incredible luxury and yet are driven by a constant need for more and more stuff to buy. Consider the iPhone 5S you may own. Is it really that much better than the iPhone 5 you had last year, or the iPhone 4S a year before that? Is it a real need, or an invented one? While Chinese families fall sick with cancer from our e-waste, megacorporations are creating entire advertising campaigns around the idea that we should destroy perfectly good products for no reason. If Marx could see this kind of thing, he’d nod in recognition.

3. The IMF (The Globalization of Capitalism)

Marx’s ideas about overproduction led him to predict what is now called globalization – the spread of capitalism across the planet in search of new markets. “The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe,” he wrote. “It must nestle everywhere, settle everywhere, establish connections everywhere.” While this may seem like an obvious point now, Marx wrote those words in 1848, when globalization was over a century away. And he wasn’t just right about what ended up happening in the late 20th century – he was right about why it happened: The relentless search for new markets and cheap labor, as well as the incessant demand for more natural resources, are beasts that demand constant feeding.

4. Walmart (Monopoly)

The classical theory of economics assumed that competition was natural and therefore self-sustaining. Marx, however, argued that market power would actually be centralized in large monopoly firms as businesses increasingly preyed upon each other. This might have struck his 19th-century readers as odd: As Richard Hofstadter writes, “Americans came to take it for granted that property would be widely diffused, that economic and political power would decentralized.” It was only later, in the 20th century, that the trend Marx foresaw began to accelerate. Today, mom-and-pop shops have been replaced by monolithic big-box stores like Walmart, small community banks have been replaced by global banks like J.P. Morgan Chase and small famers have been replaced by the likes of Archer Daniels Midland. The tech world, too, is already becoming centralized, with big corporations sucking up start-ups as fast as they can. Politicians give lip service to what minimal small-business lobby remains and prosecute the most violent of antitrust abuses – but for the most part, we know big business is here to stay.

5. Low Wages, Big Profits (The Reserve Army of Industrial Labor)

Marx believed that wages would be held down by a “reserve army of labor,” which he explained simply using classical economic techniques: Capitalists wish to pay as little as possible for labor, and this is easiest to do when there are too many workers floating around. Thus, after a recession, using a Marxist analysis, we would predict that high unemployment would keep wages stagnant as profits soared, because workers are too scared of unemployment to quit their terrible, exploitative jobs. And what do you know? No less an authority than the Wall Street Journal warns, “Lately, the U.S. recovery has been displaying some Marxian traits. Corporate profits are on a tear, and rising productivity has allowed companies to grow without doing much to reduce the vast ranks of the unemployed.” That’s because workers are terrified to leave their jobs and therefore lack bargaining power. It’s no surprise that the best time for equitable growth is during times of “full employment,” when unemployment is low and workers can threaten to take another job.

In Conclusion:

Marx was wrong about many things. Most of his writing focuses on a critique of capitalism rather than a proposal of what to replace it with – which left it open to misinterpretation by madmen like Stalin in the 20th century. But his work still shapes our world in a positive way as well. When he argued for a progressive income tax in the Communist Manifesto, no country had one. Now, there is scarcely a country without a progressive income tax, and it’s one small way that the U.S. tries to fight income inequality. Marx’s moral critique of capitalism and his keen insights into its inner workings and historical context are still worth paying attention to. As Robert L. Heilbroner writes, “We turn to Marx, therefore, not because he is infallible, but because he is inescapable.” Today, in a world of both unheard-of wealth and abject poverty, where the richest 85 people have more wealth than the poorest 3 billion, the famous cry, “Workers of the world uniteyou have nothing to lose but your chains,” has yet to lose its potency.

 

This piece first appeared on The Rolling Stone.

The Demise of the Left (and How to Revive It)

Although most polls indicate that Americans are putting the blame on Republicans for the government shutdown in terms of actual politics, the Republicans are winning. The government shutdown/debt ceiling is a quintessential example of the failure of leftism under both the Obama and Clinton administrations.

Obama has lost Waxman-Markey (climate change), Manchin-Toomey (gun control and the Gang of Eight (Immigration). Dodd-Frank (finance reform) has been dismantled and hasn’t even begun to correct the damage wrecked by Gramm-Leach-Bliley (which repealed Glass-Steagall) and the Commodities Modernization Act (deregulating derivatives).

Obama’s healthcare reform was supposed to include a public option, universal Medicaid expansion and exclude the Cadillac tax (which will hurt union workers who negotiated good healthcare plans). Ideally, of course, we would move to single-payer or socialized medicine, but this is America! We’re exceptional! In 2008 Obama mocked the idea of an individual mandate: “I mean, if a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house.” His agenda has been so decimated that he’s literally having to pass of old moderate Republican ideas as genuine leftism, and he’s still being called a commie!

Obama has been negotiating with sociopaths for the last five years. He came in ready to bargain, but has instead met a party immune to compromise. Obama has gained almost nil in revenue, while spending has been cut drastically (and foolishly). Now, he’s being asked to give up his major (only?) legislative victory for absolutely nothing in return. In fact, the Democrats position right now is to beg for a “clean-CR” that would cut spending below Paul Ryan’s first budget and basically to the level he proposed for 2014. That’s right, the current Democratic position is to cut funding roughly to the level of what the psychotic Rand Acolyte/Republican “idea” man is asking for. Dear readers, let me restate this one more time. The Democratic position right now is to keep in place a law based around a Republican idea and cut spending below what Republicans wanted in 2010.

The Republican quest to cut spending and taxes while not actually doing anything hasn’t been stalled by the fact that they lost the presidency, the senate and got fewer votes in the House than the Democrats. They’ve so dramatically shifted the conversation that they are still winning.

The truth is, Republicans have been winning since the 80s and haven’t stopped. The Clinton/Obama domestic agenda is right of Nixon/Eisenhower. There is no left in America. Democrats would qualify as center-right in any other country, while the Republicans would constitute a fringe right-wing nationalist party that generally takes in 10% of unemployed alcoholic racists with free time to come up with crazy conspiracy theories. The Tea Party patriots would be bunkered underground prepping for a coming apocalypse. In America, they are a major national party, holding the government hostage for even more draconian spending cuts (and maybe some tax giveaways for their rich friends). As long as they keep gerrymandering districts, make sure blacks don’t get to vote and take a never-compromise position, Republicans will keep winning.

The left in America needs revival, and there is certainly hope. Young people, according to Pew Research Center, actually have a slightly positive view of socialism (+3) and a slightly negative view of capitalism (-1). Poor Americans also grown disenchanted with capitalism (-8), as have blacks (-10) and hispanics (-23). There is a large untapped reserve of populist fervor that will quickly turn to disillusionment as the corporate and finance controlled neo-liberal arm of the Democratic party fails to address the issues that matter to them: environmental degradation, rampant inequality, the rise of greed and the lack of empathy in our society.

But all of this populist energy will remain under the surface as long as money drives the political system, there is no way for a leftist movement to foment – there will be no Koch-like donors supporting an anti-corporate pro-environment movement. To quote Marx: “The ruling ideas are nothing more than the ideal expression of the dominant material relationships, the dominant material relationships grasped as ideas; hence of the relationships which make the one class the ruling one, therefore, the ideas of their dominance.”

Martin Giles and Larry Bartels have both done extensive research on the political system’s responsiveness to poor voters. The results are not good. In 2005, Larry Bartels examined how responsive Senators were in the 101st, 102nd and 103rd congress to the preferences of various constituents. His findings are summarized in the chart below.

While neither party is particularly responsive to the needs of poor Americans (the number is negative, meaning that if poor Americans desire the policy, it’s actually less likely to happen), Democrats are marginally better than Republicans at responding to the desires of the middle class. Even after controlling for political knowledge and voting behaviour, the results held, indicating that wealth, not education or political activism, is what makes politicians respond. Martin Giles has developed such research into a book, Affluence and Influence, which records similar findings.

Frederick Solt researched political responsiveness and participation internationally and found that higher levels of inequality decreased voter turnout and narrowed the political discussion, with poor and middle class voters becoming disenchanted.

The best way to revive the left is to focus on two key issues: economic equality and political access. Economic equality, while it garners lip from the left has never been the center of a real legislative agenda since the Great Society. That’s because, although improving access to education and providing universal health care are all small steps towards alleviating inequality, the only way to truly make a difference would be a stronger, more vibrant union movement, an increased minimum wage and higher taxes on the wealthiest Americans.

Economists Steve Temin and Peter Levy argue in Inequality and Institutions in 20th Century America that the decline in unions was an institutional phenomenon, one driven by politics, not an inevitable consequence of the changing economy. David Blanchflower and Richard B. Freeman point to Canada as a country where labor has remained strong because of favorable public policy:

Canadian labor law substantially limits what management can do to oppose unions… Canada does not permit management to engage in the massive union prevention campaigns that pervade the United States… and the two major provinces, Ontario and Quebec, have gone a long way to protect unions as institutions.

This decline in unions has been disastrous for American workers. Bruce Western and Jake Rosenfeld find that, “the decline in organized labor explains a fifth to a third of the growth in inequality—an effect comparable to the growing stratification of wages by education.” There is a correlation between union representation and inequality within the U.S. and internationally.

The effort to end inequality can also be aided by higher levels of redistributionary taxes. U.S. tax rates are low by international standards and research from Thomas Piketty and Emmanuel Saez shows how progressivity has declined in the U.S. tax system.

Research suggests that tax rates have to be around 60 – 70% before there is any impact on economic growth (the highest marginal tax bracket right now is 40%). The U.S. could easily increase tax rates and distribute more money downward, thereby reducing inequality. Increasing the minimum wage would also put downward pressure on inequality and give workers more dignity.

The second aim of the left will be even tougher than alleviating inequality: getting money out of politics. The Roberts court has dealt numerous blows to the U.S. campaign finance regime and may again this year. A system of stricter campaign finance would free candidates from the demands of corporations and the financial sector. Part of the reason Democrats are wary of limiting corporate power and the influence of finance may be the fact that their campaigns are bankrolled by these donors. Powerful corporate lobby groups like ALEC, the Chamber of Commerce and the various “astroturf” groups push the domestic agenda to the right.

With a rigorous system of campaign finance reform, a reinvigorated left would actually have a chance to mobilize. This recovery has been drastically unequal: Emmanuel Saez finds that 93% of the gains over the past 2 years have accrued to the richest 1 percent of Americans. There’s certainly room for a new left movement, the question is whether it will happen.