Part II: Pre-Occupied: "An Economy Beset by a Glut of Both Labor & Capital
By William Neil
November 30, 2011 - 6:32pm ET
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The American Dream Debate: Joe the Plumber vs. John Dewey
So no wonder populist Bill Greider concluded, regrettably, in our opinion, not only in his book 1992 Who Will Tell The People but also in his last book, Come Home America (2009), that a democratic renewal, “will not come from books…does not begin with ideas, as intellectuals presume, or even with great political leaders who seize the moment. It originates among the ordinary people…” We’re sure that Bill is delighted with the OWS movement, which seems to be the living expression of these sentiments, and we’d like to believe that they will demonstrate that he is right. But we think he asks for a far too difficult translation of too long neglected problems, to expect that what OWS has put out in its declarations and its methods so far is sufficient to overcome the 1970’s trajectories that Cowie has laid out for us, and that we have followed on into the work of Harrington and Lasch. Those trajectories are still with us, and their logic has led to even worse economic outcomes than those of the 1970’s. And that is our cautionary word too for those who believe that by evoking the current crises of the American dream, brought on by the failure of orthodox economics, that they have somehow cornered it for use by progressive forces. The version of the dream that “if you work hard and play by the rules, you should not end up poor,” has implied rules of fairness, and of equal opportunity for all to pursue their own particular version of the dream, but it also obscures the historically dominant version: that the American dream has always implied individual upward mobility through entrepreneurship and business success, with the “MBA” degree smothering more varied and idealistic interpretations of what it means to pursue “higher” education. Just as we’ve intimated with Dewey Burton, it’s the individual striving through these channels, not the group solidarity mechanisms of the decaying, outflanked unions that won out. And wasn’t that the message of Reagan to the calamities of the 1970’s: to unleash the “animal spirits” of American capitalism again, freed from union contracts and governmental regulations, and isn’t that exactly what has brought us to where we are now in 2011?
That version of the dream has a detailed and sophisticated set of interlocking premises that guarantee that we would have the maldistribution of wealth and income that we have today, with the private sector declared by fiat (and the re-writing history) to be the only force “that can create jobs.” And, with no exaggeration, the Republican Right’s answer for today’s troubles is an intensification of these directions: more capitalism in its pure animal spirits’ form, which must seek to, by its own logic in today’s global competition, make American wages competitive with the Asian labor model, leading to even greater austerity for the average wage earner, and increasingly, austerity on up into the middle sections of the fabled “middle class,” and on yet again into the contracts retirees thought they had for Medicare and Social Security.
It’s no coincidence then, that on the very last pages of Cowie’s book, who should pop up for the American public, and as a semi-official spokesperson for the American Dream, than Joe the Plumber, from the 2008 Presidential campaign. Joe, if you remember, was leery of candidate Obama’s promise to roll back the Bush tax cuts for the earners over $250,000, and he had a personal narrative to show why Obama was going to “undermine the American dream…thus blocking (the) entrepreneurial ambitions of people like himself,” which was to buy his employer’s firm right at that critical threshold price/tax bracket of $250,000. Joe became “the party’s emblem of everyman’s discontent who, like the disgruntled lottery players at the convenience store, was a man on the margins of success who feared that when he did strike it big and managed to transcend the rigidities of the American class structure, the nation’s tax policies would one day punish him.”
But Cowie has not thrown himself into a 464 page history of the 1970’s and the end of the old working class to conclude with the worldview of Joe the Plumber, the one shared with that of the Republican Right, where “liberty has largely been reduced to an ideology that promises economic and cultural refuge from the long arm of the state.” He invokes instead what the New Deal meant in philosopher John Dewey’s view of it in 1935: “that genuine freedom could only happen within a context of economic security.” He agrees with author Mike Davis’s view that for the working class today, they’re in “survivalist” mode, and with the now retired (in Florida) Dewey Burton that “the working class he knew was ‘gone and it’s not gonna happen again,’” but he doesn’t conclude that that is the end of the history of labor and the left:
"Whatever working-class identity might emerge from the postmodern, global age will have to less rigid and less limiting than that of the postwar order, and far less wedded to the bargaining table as the sole expression of workplace power. It will have to be less about consumption and more about democracy, and as much about being blue collar as being green collar. It will have to be more inclusive in conception, more experimental in form, more nimble in organization, and more kaleidoscopic in nature than previous incarnations. The chapter of the modern working class has closed; the page of imagination is open; and the future is unwritten."
Mike Davis Wants to Free the “Prisoners of the American Dream”
It’s been our experience that reading one good book like Cowie’s usually directly leads to another. And that’s how we got to Mike Davis’s Prisoners of the American Dream: Politics and Economy in the History of the U.S. Working Class (1986), which also recommended itself by its suggestive title about the effect of the American Dream on working class solidarity, at the very time when some on the US left are trying to give new definition to that old dream as their political lodestone. And, to clinch the case, this was the same Mike Davis who won a MacArthur fellowship and has written many other books that are on our shelves, including a national best seller, Ecology of Fear: Los Angeles and the Imagination of Disaster (1998) and City of Quartz (1990), just to name two of the best known ones. Mike was able to win that fellowship, and also become one at the Getty Institute, in his own version of the American Dream, after stints as a meat cutter and Teamsters Union dissident, and, in his even younger days, as someone further to the left than Michael Harrington, to put the matter in the politest possible terms. Certainly Prisoners of the American Dream will not be retroactively recognized for great writing. In parts, Davis’ prose – about 5% of the book, maybe less - is so laden down in old Marxist language, and frameworks, that it made us cringe to read the passages. But in the rest you can see how the later Mike Davis emerged, with a passionate and hard driving prose and deeply felt conviction that the full story of that American Dream can’t be told without the view from the worker’s perspective, which, in his handling of it, is quite a bit different from the AFL-CIO worldview as it solidified after the Second World War.
Davis organizes his work by setting out to give his own answer not only to the great question of “why there is no socialism in America,” but to two others as well: why there “is no independent labor politics as well as for the persistent inability of labor-liberal forces to ‘capture’ the Democratic Party.” Part of the answer, he concludes, is that large American middle class, and the mobility gangplanks that lead up to it from the working class. In a startlingly compact example of the jargon that he later largely avoids, Davis argues in the Foreword that “the ballast of capital’s hegemony in American history has been the repeated, autonomous mobilizations of the mass middle strata in defense of petty accumulation and entrepreneurial opportunity.” (And my, wouldn’t Lasch have hated that sentence! Doesn’t look like Lasch read Davis at all, though.) That’s the young Mike Davis’ way of saying that the American Dream did not always lead to support for workers in their strikes and unionizing efforts, and that the middle class often rallied to the side of the employer (see 1946-1947, and also the great failure of the AFL-CIO’s attempt to organize the South, “Operation Dixie.”) But the second half of the book is the one which speaks most directly to our contemporary troubles, largely because it “is in part a polemic against the illusion that the Left must ally with the ‘left wing of the possible’ through the Democratic Party.” And we can supply the more specific meaning to that term: it’s Davis’ critique, from the left, of Michael Harrington’s efforts (that’s Harrington’s phrase in italics), to go along with Davis’ criticism of the great collective bargaining straightjacket after WWII, which stifled shop floor and wildcat strike driven activism (another name for the old “rank and file” spontaneity ). At its best the old unionism gave us Walter Reuther, Douglas Fraser, William Winpisinger and Karen Nussbaum; but at its worst, which was most of the time, it left us with George Meany and the procession of colorless leaders who followed him at the AFL-CIO.
The Dream, the Workers, and the Tensions Between Race and Class
Let’s give you, then, a couple of samples of the kind of high voltage prose, and perspective, that have helped Mike Davis become one of the best writers, and social critics, in the US. They’re taken from his withering criticism of the Democratic Party’s turn to the right in the 1980’s, from his chapter entitled “The Lesser Evil? The Left, The Democrats and 1984,” a time which we remember all too well, but not in all the devilish details that Davis supplies us with here, on the 1984 Democratic convention:
"White progressives found solace in the convention’s social liberalism, as well as in its sentimental invocation of the New Deal ethos (without, of course, the ‘beef’ of New Deal policies). They were gratified by the historic recognition of gay rights and electrified by the selection of Geraldine Ferraro as Mondale’s running mate. To most Blacks, however, the nomination of Ferraro was a bitter pill: a white backlash candidate from the most segregated neighborhood of New York (an area of Queens with barely 3 per cent Black population), she had extolled the death penalty and built her reputation as a fierce law-and-order district attorney. One of the most implacable foes of busing for school integration, she had crusaded in 1979 for a constitutional amendment outlawing it, and in 1982, defected from the New York Democratic delegation to support a New Right resolution barring the Justice Department from funding busing. Symptomatically, this was a background that the social-democratic and liberal press ignored in its uncritical celebration of Ferraro. "
Well, it would seem that Jefferson’s Cowie’s book may have ended too soon, with Reagan breaking the air traffic controllers’ union in the summer of 1981, so we didn’t get to hear whether Dewey Burton would have been happy with Geraldine Ferraro’s nomination, and her stance on busing. We think that Davis is especially tough on Ferraro here – and let’s not forget that busing was a losing cause nationally for Democrats – because he believed that a more dynamic labor movement and broader progressive movement needed to harness itself to the cause of poor black Americans (and later Hispanics). He’s blunt about that in the Epilogue: “the failure of the postwar labor movement to form an organic bloc with Black liberation, to organize the South or to defeat the power of Southern reaction in the Democratic Party, have determined, more than any other factors, the ultimate decline of American trade unionism and the rightward reconstruction of the political economy during the 1970’s.” (Our emphasis.)
We disagree not with the moral cause behind these priorities: the fate of the black ghetto is and will be for future generations, one of the greatest shames of our late, fabled American Century, but with the premise that the fulcrum of the left in the America we know could swing largely on such a racial hinge, where race would always trump class. We failed ourselves, in person, to convince the consummate documentary film artist of our era, Ken Burns, at Logan Airport, in 2002, to make one about the history of the American ghetto. Today, in 2011, not only do we have the world’s greatest prison population, disproportionately black, and the ghettos still very much with us, but we have a more widespread poverty trend affecting recent college graduates, discarded middle age managers and all those over 50 facing the ageism of corporate America. From Davis’s ideological perspective, the shortcomings of capitalism in the 1970’s and the early 1980’s, while starting to bear down increasingly heavily on labor, were still most visible among black Americans, those in the ghetto and those still in the South. However, the more Democratic policy tilted towards the black poor with special policies, as Cowie works shows, the worse it was for the Democrats – and would have been even for a left that was more independent of the party, more dependent on union members and minorities.
Long before busing became the transfer pass that took a substantial portion of the white working class out of the liberal Democratic party to Wallace and then Republican Nixon, there was a prophetic election for the Mayor of Detroit in 1949, Thomas Sugrue tells us in his important book The Origins of the Urban Crisis: Race and Inequality in Postwar Detroit (1996). It pitted liberal city Councilmember George Edwards against conservative City Treasurer Albert Cobo. “Edwards, a one-time UAW activist, former public housing administrator, and New Deal Democrat, was the political antithesis of Cobo, a corporate executive, real estate investor, and Republican…armed with the endorsement of most white neighborhood improvement associations.” It ended in an overwhelming victory for Cobo, with the election turning upon “race and public housing.” (And yes, basketball fans, Cobo Arena were named for him, but the Wikipedia article pretends Sugrue never wrote his book; in this case, it gives the readers “just the facts,” but not the critical background or context.) Sugrue explains that the election stunned the UAW activists who committed lots of money and manpower to the campaign, but still saw that “Edwards lost to Cobo even in predominantly blue-collar precincts.’”
It’s a cautionary tale for any Marxist, be they original, post or neo. And who can finally separate the ultimate causal forces driving the white working class voters of Detroit? Race played a key role, perhaps the dominant one. But so did the reality of protecting that paramount symbol of the American dream, home ownership, one of the crucial rungs of the ladder leading up to the middle class, and one so deeply threatened by the idea of “immigrant” blacks driving down home prices, and later by the busing dynamics. Although Sugrue’s book (1996) was a decade later than Davis’s (1986), Mike seemed to come to some of the same conclusions that the perplexed UAW leaders in Detroit did after Cobo’s stunning victory in 1949. Addressing the nature of union-working class consciousness, Davis acknowledges that there “were moments in the thirties and forties when the struggle for industrial unionism seemed to be creating an alternative culture and a new mode of daily life. The sight of the Women’s Auxiliary driving the police off the streets of Flint, or the sound of ten thousand Ford strikers singing ‘Solidarity Forever’ were the exceptions…”; the overall norm was marked by “limited, episodic participation of most industrial workers.” In an important footnote on that same page, Davis seems to come face to face with the realities that the UAW activists did in that 1949 Detroit mayoralty race: “In a 1970’s comparative study of auto workers around the world, William Form surveyed members of the UAW Oldsmobile local in Lansing, Michigan. He discovered that fully 60 per cent of the rank-and-file disagreed with the political recommendations of COPE and generally did not believe that the union should endorse candidates. Moreover, 40 per cent were registered either as Republicans or ‘independents.’”
Early Austerity, Mondale Style: The Democrats Turn Right
So we have our disagreements with Davis on how the issue of race played out for the future of the American left, but we still think his perspective is a very illuminating one for the continual rightward drift of the Democratic Party, taking the story of the tragic Carter years told so well by Cowie, and carrying them through the tragi-comic election of 1984, where Jesse Jackson’s Rainbow Coalition primary campaign seems to have brought out the worst in everyone on the left - excepting Jackson in Davis’s treatment. That story by itself makes Davis’ book worth reading, but it’s the particulars of the Mondale “version” of the political economy that hold the most relevance for today’s Democratic Party troubles. Davis surprisingly begins by quoting Robert Kuttner, who would probably never return the favor (not from this book at least), from two New Republic articles he wrote in 1984-1985:
"… ‘The great industrial policy debate ended with a whimper’ with the AFL-CIO’s pet planks on reindustrialization and protectionism supplanted by Mondale’s monomaniacal emphasis on deficit reduction. This redesign of the Mondale candidacy was effected by a confluence of factors: political consultant Richard Leone’s erroneous belief that the deficit was the soft underbelly of Reaganism; the opposition of leading Brookings economists to any form of industrial policy…most decisive, perhaps, was the inability of the unions to meet their original financial pledges to the Democratic National Committee, leaving a huge shortfall – in the most expensive campaign in history - that DNC chairman Charles Manatt proposed to rectify by appealing to big business…"
If you are a disillusioned Democrat today – and who isn’t under the circumstances of the fall of 2011 - and wondering how the party of FDR and the New Deal has become the second great party of fiscal austerity – and under near Depression conditions - then chew on this post-1984 election analysis from one of our own “Virginia” Democrats, then Governor Charles Robb, “LBJ’s son-in-law,” also taken from Davis’s chapter “The Lesser Evil? The Left, the Democrats and 1984”:
"At a meeting of the AFL-CIO backed Coalition for a Democratic Majority…Robb… ‘Minced no words about the need to return the party to the middle class, against the ‘special interests.’ He articulated the consensus of Western and Southern Democratic leaders that the Democrats must be the ‘party of business leaders, doctors, pharmacists stockbrokers, and professionals.’ Robb was immediately seconded by strikebreaking Democratic of Arizona, Bruce Babbitt, who had shown his independence of special interests by twice sending in the National Guard to terrorize locked-out copper miners."
Well, it would seem that Governor Robb got the Democratic Party he wanted and the type of capitalism too. But now it’s time to end our paleontological dig for the fossil ancestors of today’s troubles in the political economy’s secret layers, and to turn to one of the best analyses we’ve seen of the current situation. It’s one we believe could be arrived at from any number of intellectual pathways, anywhere from the economic center to the economic left, from a New Deal perspective, a populist perspective like Phillips or Greider, or from a Marxist one, like David Harvey or Richard Wolff. It’s one that OWS folks also might share too as a starting point frame of reference, without necessarily agreeing with the remedies that accompany it. The New America Foundation sponsored it and released it on October 12, 2011. It’s called, rather immodestly, The Way Forward: Moving from the Post-Bubble, Post-Bust Economy to Renewed Growth and Competitiveness.
“The Way Forward” as a Unifying Analysis
We heard about it just around the release date, wondering if it would have any legs in the mainstream media. It didn’t, despite the fact that someone of economist Nouriel Roubini’s caliber doesn’t often get linked to a joint “white paper” like this. Roubini is joined by Daniel Alpert, a managing partner of Westwood Capital, someone whose name is familiar to anyone following modern investment trends over the past few decades. They are assisted by Robert Hockett, a professor of law at Cornell University, unknown previously to us, but whose bio states that he’s a professor of finance and international economic law and a consultant to the New York Federal Reserve Bank. So what we have is a pretty mainstream group of economic thinkers who have managed to convey a clear diagnosis of just how deep and widespread our economic troubles are, and the vast scope of what it will take to get us out.
Although the paper is a 35 page PDF available here at http://www.newamerica.net/publications/policy/the_way_forward , we’ve already recommended it to some readers, stating that the first three pages are an education by themselves, and that it will be hard to stop at page ten. So what, exactly did we like so much in a paper from such “institutional players,” acknowledging that Roubini is a brilliant, edgy one, who has proved himself right time and time again with his “gloomy” (we say realistic) forecasts?
First of all, they call for a cessation of the budget balancing and austerity myopia that has engulfed institutional politics here and abroad, for 5-7 years. That’s exactly what we have been saying, repeatedly over the past two years: that a little bit of stimulus and a lot of budget austerity won’t work together politically, and can’t work in the reality of this world economic situation because it misdiagnoses the problems and underestimates their severity. Then we have the recognition that we are in a severe “balance sheet recession,” actually a “Lesser Depression,” recalling the diagnosis we brought to you almost a year ago with Professor Richard Koo’s views on what happened to Japan over the past 20 years. The Way Forward also criticizes the Feds “Quantitative Easing” programs as not being able to make up for missing governmental fiscal policies of the proper scope, and fueling a real but deceptive stock market run up as well as a rise in commodity prices which have hurt consumers around the world, especially the poorest ones, with higher food and fuel prices, just as investor’s Jeremy Grantham’s long interview from November 11, 2010 predicted, which we brought to you early in 2011. (QE helped put idle investment capital to work in shallow, non-productive ways; the three authors propose a $1.2 trillion infrastructure investment program that will put some of that surplus to much better use).
Then there is the dramatic focus on a world production glut, of manufactured goods (energy and food products being the exceptions), something which we reminded you Bill Greider had pointed out in his 1997 book on the new global economy, One World, Ready or Not. His book received criticism on that score, as well as others, because, of course, the then current academic theories didn’t allow world markets to have serious inefficiencies, let alone “gluts.” Naturally, when you add in the more than 2 billion new workers to the world’s labor supply, as this new paper so dramatically does, labor’s share of the economic pie was bound to shrink, hurting demand, something which we told you, repeatedly, that Thomas Palley had conveyed very well with his 2009 essay, America’s Exhausted Paradigm, with workers “boxed in” on four sides by neo-liberalism’s “policy box”: less than full employment, small (and weak) governments, globalization and “labor market flexibility” – the preferred academic euphemism for “austerity” - which is also a conservative version of “social engineering.”
And the remedies? They fall into three broad categories, and we agree with all three generally, even as there is likely to be much disagreement on the details. First, they recognize that the initial focus must be on rebuilding demand via job creation, and it might as well be done by building as much of the program as possible upon investments that will improve overall economic efficiency, including our own long-recommended emphasis on energy efficiency improvements for homes and workplaces. Second comes the recognition that the household debt centered upon the great mortgage/housing calamity must be solved before the economy can recover, and they have supplied a detailed set of flexible and more humane directions to accomplish that. And third, they know that “no domestic solutions to the problems of debt deflation can succeed without complementary global reforms.”
The Heart of the Matter on the World Economy
Because we think this is such a good starting point for trying to get the American political center and the left at least on the same page of causality, if not remedies, we want to give a long quote from page three that gives you a sense of the power of their work. We pick up their commentary about the macro-economic developments that brought us to the edge of the abyss, where we still are, unfortunately, “in the early middle innings of what will be a multi-year debt de-levering process,” which could get worse if we slip into another recession:
"The first of these developments has been the steady entry into the world economy of successive waves of new export oriented economies, beginning with Japan and the Asian tigers in the 1980’s and peaking with China in the early 2000’s, with more than two billion newly employed workers. The integration of these high-savings, lower wage economies into the global economy, occurring as it did against the back drop of dramatic productivity gains rooted in new information technologies and the globalization of corporate supply chains, decisively shifted the balance of global supply and demand. In consequence, the world economy is now beset by excess supplies of labor, capital and productive capacity relative to global demand. This profoundly dims the prospects for business investment and greater net exports in the developed world – the only other two drivers of recovery when debt-deflation slackens domestic consumer demand. It also puts the entire global economy at risk, owing to the central role that the U.S. economy still is relied on to play as the world’s consumer and borrower of last-resort.
The second long term development that renders the current debt-deflation, already worse than a mere cyclical downturn, worse even than other debt-deflations is this: the same integration of new rising economies with even more competitive workforces into the new world economy also further shifted the balance of power between labor and capital in the developed world. That has resulted not only in stagnant wages in the United States, but also in levels of income and wealth inequality not seen since the immediate pre-Great Depression 1920’s."
There was one other aspect of this fine paper that we also think deserves special attention, not only because it re-occurs in several places, but also because it echoes what we thought was most important in our review of Marx’s and Harrington’s work, something we know Keynes agreed with as well. And that is that what is prudent for individual investors and businesses to do, ends up as a collective calamity when they all simultaneously adopt the defensive crouch; and notice how the quote ends, ironic commentary on a culture and a world-wide system that demands always that economic directions are a matter of purely private, uncoordinated decisions: “So what is rational at the individual firm level – slashing labor costs in the face of revenue declines to stay profitable – in the aggregate proves perverse. We are, in other words, in collective action problem territory again.”
So no wonder, given observations like this, that “The Way Forward” would get its own billing at none-other-than Marxist economist Richard Wolff’s site here at http://rdwolff.com/content/top-economists-how-fix-economy , along with the commentary of Jared Bernstein, Jeffrey Frieden, Derek Shearer, and Edward Barbier, and Wolff’s own. There is consistent praise for the analysis, along with the quite accurate observation that good as the paper was, neither political party will dare deal with its analysis or recommendations. It also needs a movement to carry out its recommendations, which does not yet exist unless perhaps, as we suggested, that OWS might take it up. But then again, perhaps they “would prefer not to.” The final commentary, from Edward Barbier, is a new name on us, despite the fact that he’s the author of a book, a recent one, called A Global Green New Deal: Rethinking the Economic Recovery. He does zero in on what’s missing from “The Way Forward,” most glaringly that it does not mention Global Warming or Climate Change, unless you want to count the energy efficiency infrastructure proposals and include rail transportation in that category. This is another illustration of the reality that although “we are all connected” by today’s technologies, there are substantial hidden barriers to policy unity on the left, stemming from its many varied academic perspectives – sub-universes, in fact, as well as other “ancient” inherited disputes, as we saw earlier. And what’s missing from “The Way Forward” is a good illustration of just what Naomi Klein’s great essay is talking about, Capitalism vs. Climate, which appeared online at The Nation on November 9, 2011, here at http://www.thenation.com/article/164497/capitalism-vs-climate.
Naomi Klein: Why the Right Cannot Accept Global Warming
What grabs the reader’s immediate attention about Klein’s article is her opening gambit: the paranoid anti-Global Warming Right, shouting that it’s “a leftist conspiracy to overturn capitalism!” - has more of the truth of the matter than the supposedly liberal environmentalists. Those greens can’t see where the enormous implications of the changes they want to enact lead in the broader political economy, just as “most leftists have yet to realize that climate science has handed them the most powerful argument against capitalism since William Blake’s ‘dark Satanic Mills’ (and of course those mills were the beginning of climate change).” And her opening paragraph was an added bonus to us here in Maryland, with a new Carroll County Commissioner, Richard Rothschild, getting top billing for spotting “a green Trojan horse, whose belly is full with red Marxist socioeconomic doctrine.” And as we’ve learned in this essay, that’s some belly full, a 100 volumes or more, just with the original texts. His spotting was done at the Heartland Institute’s Sixth International Conference on Climate Change, held in DC in June, according to Klein. And when we looked up Rothschild’s bio, we can add that he has a college degree in electrical engineering, an MBA from Loyola College, membership in the National Association of Realtors, and time spent with a Fortune 100 “high tech” firm to go along with his suspicions about those pushing the Global Warming “Trojan Horse” inside the sacred walls of capitalism.
Klein is writing at a time that has seen a tremendous drop in the polling salience of the science behind Global Warming, (Would continued burning of fossil fuels cause the climate to change?) dropping from 71% to 44% in just four years. Klein insists that the economic left and environmentalists need to understand what the Right has concluded, that climate policy is about economics: “Just as climate denialism has become a core identity issue on the right, utterly entwined with defending current systems of power and wealth, the scientific reality of climate change must, for progressives, occupy a central place in a coherent narrative about the perils of unrestrained greed and the need for real alternatives.”
And thus Klein has ended up in the same place James Gustave Speth did (she also cites the work of Herman Daly, Peter Victor and Tim Jackson) in his important book The Bridge at the End of the World (2008), concluding that the trajectory of today’s type of capitalism and consumerism would be the end of the climate and natural world as we know it. Thus all the existing tools of environmentalists will fail based on the magnitude of impacts of capitalism as today practiced; pursuit of that 3% annual increase in GDP will overwhelm all the increments of improvements we’ve achieved at such a cost since 1970. (Here’s our February 6, 2009 review of Speth’s book, “When the Traditional Environmental Perspectives Don’t Work,” the sixth one down at Amazon.com at http://www.amazon.com/Bridge-Edge-World-Environment-Sustainability/produ...
At the midpoint of the essay, Klein notes that “here is where things get complicated.” And how; that comes under her fifth heading on what the changes in our current political economy will require, “Ending the Cult of Shopping”: “…an ecological crisis that has its roots in the overconsumption of natural resources must be addressed not just by improving the efficiency of our economies but by reducing the amount of material stuff we produce and consume.” It’s complicated indeed, because it seems to us that Klein’s correct call slams head-on into where much of the Keynesian and neo-Marxist economic left is: arguing along the lines of James Livingston’s new book Against Thrift (and after we finish reading it we’ll let you know whether there is any common ground between these views), where the advertising quote for it in the latest edition of the NY Review of Books (Dec. 8, 2011) claims that “‘Karl Marx wants you to go shopping. To save capitalism.’” So even though Klein sounds a lot like the authors of “The Way Forward” when she says “it is obvious that individual action will never be an adequate response to the climate crisis. Climate change is a collective problem, and it demands collective action,” their paths are not yet crossing in front of the same goal post.
And then, along an entirely different axis, Klein’s new climate protection political economy is also at odds with the long Keynesian fiscal tradition of working at the highest levels, and levers, of national government, whether that is through the Congress, or the Federal Reserve, and tax policy, especially where they bear on investment decisions. As we’ll soon see below, this doesn’t have to always be mutually contradictory, because if we will remember, most of the New Deal’s programs to put people to work were federally funded, with local matches, and yet the work came from de-centralized projects (with federal vetting and a close watch against corruption) at all levels of jurisdiction, from the local CCC camps and individual post-offices to multi-state grand projects like the TVA. Yet Klein hints at something we have already talked about in our essay - that there is more than a whiff of libertarian-anarchist sentiment in the air with OWS and its methods. She writes that “it is true that responding to the climate threat requires strong government action at all levels. But real climate solutions are ones that steer these interventions to systematically disperse and devolve power and control to the community level, whether through community-controlled renewable energy, local organic agriculture or transit systems genuinely accountable to their users.” Sounds like Klein might have been reading from Lasch’s The True and Only Haven.
“What Would Keynes Do?” The Great Trade Deficit Debate
Just one month before Klein came out with her provocative piece, our attention was captured by two other essays which also were aimed at shaking up conventions in the realm of left economics. First there was Thomas Geoghegan’s “What Would Keynes Do?” which appeared in the October 17, 2011 of the print edition of The Nation (and online here at http://www.thenation.com/article/163673/what-would-keynes-do ). We like Geohegan’s sassy and irreverent style, have for some time, and in this essay, he went after some sacred cows on the left, especially the effectiveness of the “stimulus” and the efficacy of public employment remedies. He went to Keynes’ original texts, and came back saying that what Keynes would be most upset about, right after the unemployment levels, would be the huge trade deficit. And while not denying the need for public jobs, he emphasized that Keynes “…never presented the public sector as the real key to the economic problem. Rather, as he writes in The General Theory, ‘the weakness of the inducement to invest has been at all times the key to the economic problem.’” Well fair enough, but as we followed Geoghegan’s recommendations, we reached the conclusion that what he wants our government to do will be just as hard as creating genuine full employment: he wants to completely re-arrange the structure of signals and incentives for where private investment goes, to emphasize, with Keynes, “that the first duty of the state is to ensure that the ‘liquidity preference’ is low, to prod people not to keep their money liquid but to lock it up in a long-term investment where it will not be so easy to get…” and the key to that was “… to hold down the windfall returns from loans, buyouts and financial speculations…that’s the nub of our country’s trade deficit problem.”
We agree that’s a big part of it, but he underestimates that this will be the equivalent political effort to breaking up the Wall Street banks, because wealthy investors will never accept such limitations, and to be effective, these proposed policies would have to interfere with free trade, specifically the free movement of capital, which our “American” investors want to send overseas in search of higher returns, which are now diminishing do to the European calamity and the Asian slowdown. Our own sense is that if Keynes were alive today, he would see that none of what he proposed and which Geoghegan has emphasized, can come to pass here unless the US heads towards full employment as the very first priority. And in light of the environmental issues Naomi Klein has raised, and those raised by Christopher Lasch twenty years ago, what is it, exactly, that would direct the newly directed investors to make “better” domestic investments? Could politics so re-arrange the rewards and signals that these capitalists’ values would suddenly do an about face and go green? Certainly not if Lasch was right about their rootlessness and lack of patriotism. If higher returns beckoned in Singapore, and those escape routes weren’t blocked off, they would go and join Jim Rogers, who likes the Asian work ethic better than the present American one – apparently recognizing no connection to the dynamic, as Daniel Bell pointed out, that capitalism, over time, undermines its own earlier “Protestant” work ethic. And it will be very interesting to see how long it takes China to ditch theirs for consumerism.
So here is yet another analysis which is very sympathetic to the left’s traditional causes, but which like the more centrist piece “The Way Forward,” doesn’t even mention global warming as an economic issue, which would be the logical bridge not only to create 24 million needed jobs, but also to supply the whole missing signaling system about where and what to invest in.
There was one other thing that bothered us about “What Would Keynes Do?” – and that was Geoghegan’s handling of the nature of the German economy, an economy which has some of the features that would please Lasch, Harrington, Klein and Greider. That’s because German workers, through their unions, and other institutions, have a greater say in the way firms are run, where funds are invested, and how the entire domestic pie is sliced. And they are ahead of the US in many important areas of combatting global warming. But that’s not yet the full and contradictory picture of the Germany economy. At the highest levels of their national banking institutions, and especially in the role Germans play in the joint European Community institutions, they are fanatically neo-liberal – that is conservative – in their preaching of governmental austerity, the very antithesis of Keynesianism under the current circumstances. Towards the troubled southern tier of Europe – Greece, Spain, Italy, Portugal, they are bent on remaking the definition of what it means to be Greek, or Spanish or Italian…and as Naomi Klein has pointed out, you can bet that large German multi-nationals will be among the first to swoop in and buy the forced sale of public enterprises. In American terms, these German Bankers who tolerate Social Democrats in German domestic matters, turn into predatory austerity engineers when it comes to remaking the economic laggards of Europe. Now that’s German “engineering” for you, but in this case it’s a form of conservative “social engineering.” As you read the daily accounts of these European struggles, just keep in mind this basic question: after all the old “profligate” traits are squeezed out of the Greeks and the Spanish, and they have “flexible” labor markets, just what is it that they will sell to the rest of Europe or world markets that isn’t already made cheaper by someone else, either in Asia, or Eastern Europe…with Egypt and the rest of the Arab world waiting just around the bend to add another half billion or so desperate job seekers to the already glutted world labor market?
Editor’s Note: The economic historian James Livingston keeps disturbing all the conventions of the economics profession. That’s right, a mere historian is upsetting the economic sages. He is claiming “that mainstream economic theory…wrongly assumes that private savings and private investment are the prime movers of robust growth. The historical record shows that this assumption is a mere article of faith with no empirical base.” That’s from his Introduction to Against Thrift. About 50 pages later he is at it again with this shocker, enough to send Larry Kudlow and Stephen Moore to the emergency room, and maybe David Harvey right after them…and we guess, Geoghegan too, but Tom doesn’t have quite the same capital invested, coming to his “squeezing the investment channels” view quite recently. Here’s Livingston again: “…economic growth since the 1920’s does not require net private investment or net capital formation – because the mere replacement and maintenance of the existing capital stock, which is financed out of retained earnings and depreciation funds, increases the productivity of capital and labor. In other words, net additions to the capital stock –private investments in new plant and equipment financed out of profits – are unnecessary to drive growth.” How many lifetimes do you think it will take to get him on a panel at the Center for American Progress?
Well, Here’s What Keynes Would Do: A Universal Jobs Guarantee Program
We were very happy to see Marshall Auerback’s reply to Geoghegan’s article appear on October 3 at Counter Punch, asking in return, “Are Trade Deficits Really That Bad?” at http://www.counterpunch.org/2011/10/03/are-trade-deficits-really-that-ba... Marshall keeps himself busy in the private sector while he loans his mind occasionally as a “brainstruster” for the Franklin and Eleanor Roosevelt Institute. While there is a lot of agreement between them on the points Geoghegan made about trade deficits, Auerback doesn’t agree closing that gap is our number one national economic priority. And he reminds his readers, just as we did in previous writings on trade deficits and attempts to balance the federal budget (citing James Galbraith and Martin Wolf as being in agreement), that a nation with a large trade deficit must see, by accounting conventions, either its private sector (business and/or consumers) or its public sector in a corresponding level of debt; the books must balance, but not in the conventional sense that deficit hawks insist upon. Since a giant run-up in American private debt was one of the primary causes of the current crisis, Auerback thinks it’s better to have a public deficit under our current circumstances, and even to increase it as the means to get America back to work, thus allowing “the private sector to save.”
To defend this position, just as James Galbraith does, he must then state that we “face no insolvency constraint and no default risk” although he does recognize “deficit hysteria” promoters will wildly disagree with him. We’d love to see him on a panel next to Bill Clinton as Bill peddles his latest book, because Auerback says that the “celebration of the ‘virtues’ of government budget surpluses from the Clinton era is a misguided paradigm that continues to hamper progressive policy making today.” And the reason is that “budget surpluses suck income and wealth out of the private sector” as they “were losing their net wealth of government bonds” and looking abroad for better investments during the late 1990’s. And there is a long history showing that US federal budget surpluses are not the holy grail of economic policy: “for the past 82 years, the US government’s budget has been in deficit of varying proportions of GDP over 80 percent of the time. There is nothing insidious or inherently sinister about these deficits. Each time the government tried to push its budget into surplus, a major recession followed which forced the budget via the automatic stabilizers back into deficit…” (Our Emphasis.)
Actually, our readers need to put these two articles together to make more complete sense of the economic troubles of today. That’s what we liked about “The Way Forward,” which is, if nothing else, holistic in economic terms, if you can forget about its global warming and environmental shortcomings, (which Auerback and Geoghegan also share, although we hope they know better and left them out because of the demands of shorter papers and narrower focuses). And we would again refer readers to the New America Foundation paper for remedies to the global trade imbalances.
There is, however, a humanitarian objective as well as an important economic one in getting something dramatic going right away to put people back to work. It’s the most important common denominator of the economic policy papers we have covered. And it’s the way Auerback puts his proposal together that commands our support and attention. Auerback wants to shift our national focus to job creation rather than our trade troubles, and here’s how he makes the case. It’s universal, and wonder of wonder in this conservative economic epoch, it even is bent towards the human being in need, not the corporate dominated labor markets looking for “labor flexibility” by putting the worker on the “rack” of employer ideals (“Bring me a worker complete, up to date with all technical skills, perfect in mind, soul and body…”):
"The USA needs jobs. A universal Job Guarantee program is a better approach than closing off our economy. The jobs would pay basic wages and benefits with a goal to provide a living wage. It would take all comers – anyone ready and willing to work, regardless of education, training, or experience. Adapt the jobs to the workers – as the late Hyman Minsky said, ‘take the workers as they are’ and work them up to their ability, and then enhance their ability through on the job training…The program needs to be funded by the central government…I would decentralize the program, to allow local governments and not-for-profits service organizations to organize projects…It sets a wage floor but does not drive wages up. As such, it can never cause hyperinflation – it hires ‘off the bottom’ at the program fixed wage, only up to the point of full employment. It never drives the economy beyond full employment, but it can offset the impact of trade deficits…Minimum wage legislation would no longer be needed as it would be established via the JG…The Job Guarantee program is desired because a more or less free market system does not (and, perhaps, cannot) continuously generate true full employment." (Our Emphasis.)
Now set aside for a moment all the interlocking tentacles of ideology which have grown out over the past 30 years from the parent body of market fundamentalism, ones that you know would reach out and try to strangle this proposal. Similarly, set aside Naomi Klein’s “Capitalism vs. The Climate” and all the objections that she would raise about the existing environmentally malevolent mechanisms of private production, all those which were supposed to have changed on their own via the wonderfully optimistic view presented by Paul Hawken, Amory Lovins and L. Hunter Lovins in their book Natural Capitalism: Creating the Next Industrial Revolution (2008) – where the promise of green efficiencies (and government incentives) transforms it all, and we live happily ever after. (Has anyone interviewed them about “what happened” on the way to grandma’s house? Here’s the closest we could find at http://fora.tv/2011/09/08/Bill_McKibben_and_Paul_Hawken_Blessed_350 )
What Marshall Auerback has tried to do is set a policy table where, in the spirit of the old New Deal, his employment program, as much as possible, leaves the private sector alone, to follow their own trajectory while the public and non-profit sector supply the missing jobs. Although it may sound just a bit too cute here as a “mechanism that automatically adjusts to insure the private sector can actually realize its desired net nominal savings position…in other words, our proposal frees the system from political parasites while increasing the freedom of the private sector to achieve its goals,” this tack certainly has something to recommend it in the public debate arena. Here is a way to give practical fulfillment to FDR’s first Right in that Second Bill of Rights from 1944, the Right to a Job, and to practically shame the private sector and the Republican Right into admitting that, if they won’t go for it, it’s because they are insisting upon total control, that only the private sector has the right and the freedom to create jobs, another power that belongs under the heading of “the Divine Right of Capital.” How much suffering and unemployment will they be willing to tolerate to keep absolute control? Spain’s level? Greece’s level? The “Little Baltics’” levels? You get the idea.
Greater Efficiency and Productivity = More Jobs? Think Again.
One would think that given the state of the economy, and the anger level of the public over the unemployment situation, that this idea of Auerback’s would be a way out, and a face saving one of compromise for the private sector. Of course we know that’s not how they see it, or even if they see the implications for the rest of us from what helps keep their costs down in that everlasting pursuit of profits and higher efficiency, the ongoing technological revolution, especially The Digital Revolution. That is also part of the title of a new E book by Erik Brynjolfsson and Andrew McAfee, which talks about The Race Against the Machine: How the Digital Revolution is Accelerating Innovation, Driving Productivity and Irreversibly Transforming Employment and the Economy. There’s more than a bit of obfuscation in that title, because in the interview we read here, it is clear to us that there is certainly going to be added unemployment, with a lot of beating around the bush to avoid that word at http://news.yahoo.com/blogs/lookout/american-workers-race-against-machin...
An Outline of the Forces on the Left
Before we again return to a consideration of the OWS movement and where it might be heading after the crack-down on its home base camp in lower Manhattan in the early hours of Tuesday morning, November 15th, let’s lift up our eyes to the horizon line and see what the outline of the major forces are on the left.
What we see are two mostly competing traditions. The bulk of the progressive tradition still believes in the spirit of the Enlightenment, in the continual improvement of technology and its products, and an ever higher living standard for more and more people, with setbacks, minor and major, only temporarily delaying further improvement. Marx and then later varieties of “Marxism” shared this overwhelmingly optimistic outlook, with major, major differences with others on the left over who was benefitting the most and the least from the capitalist system, which drove civilization as a whole forward. And even when, and if the crises from the system’s major contradictions led to its complete transformation, it was still only going to improve humanity’s lot. Democracy too was following a similar universal pattern, with the “franchise” for the vote expanding throughout the 19th and 20th centuries, internally within Western nations and then on to the rest of the world. Interestingly enough, it was several philosophers working with only the faint glow of a late and much transformed Marxist tradition who first saw the implications of this overwhelming materialist onslaught upon nature and sounded the alarm. And they saw the dangers in the midst of the flames of World War II, after the tide had turned, in the same year 1944: that would be Karl Polanyi in his The Great Transformation, and Max Horkheimer and Theodor W. Adorno in their Dialectic of Enlightenment. These are two very significant books, and they take different paths, Polanyi staying within the optimistic progressive stream as a Social Democrat/mild Socialist, and Horkheimer and Adorno taking a much sharper turn away from the optimism of the long Enlightenment tradition.
And so it is that much of the left today still works in this “progressive tradition,” centrist Democrats, organized labor, mainstream environmental organizations, and most of the other main constituents of the Democratic Party. The focus is still largely on national level solutions, and minor modifications to capitalism, including environmental “adjustments,” but this consensus is coming under great intellectual strain, since it is obvious that – with the party leery even of embracing the legacy of the old New Deal – it doesn’t have an adequate explanation of our current troubles, much less the needed depth and breadth to solve the problems. And that is why “The Way Forward” is so threatening intellectually. Because much of this tradition believes in leaving the major societal economic decisions in private hands, even as those 1% to 20% of human hands seem to be able to throttle progress towards a new energy paradigm (and any number of additional environmental proposals) , and block other significant change proposed by different elements of civic society – such as labor’s now muted clamor for a new union election process, or single payer health care - there is growing anger with the 80%-99% of the rest of the citizens about the efficacy of the democratic process itself and its relation to the capitalism that is failing.
But there is another major axis emerging once again on the left which is being given added impetus by the logic of escalating environmental degradation and the time frame urgency of the Global Warming threat. It builds upon and merges with the persistent subcurrents of the Western political tradition pursued by Christopher Lasch in his book The True and Only Haven, who saw a diminishment of the individual (and democracy itself) inherent in the nature and scale of the industrial process. Those problems carried over into post-industrial society as well, and couldn’t be remedied by technological advances and the related treadmills of consumption offered by the consumer society. This second tradition on the left runs from people like William Morris and G. D. H. Cole, on to Lasch, E.F. Schumacher, Wendell Berry, Herman Daly, Hazel Henderson, James Gustave Speth, and on to Naomi Klein and the emergence of OWS, with our apologies to all those important figures we have left out in the extended historical line of thought. And it includes all those obscure corners of experimentation in the co-operative, non-profit and worker-controlled regions of the economy that Gar Alperovitz (America Beyond Capitalism) and William Greider (The Soul of Capitalism) brought to our attention, and we include both of these writers in this second major current of the left, with its emphasis on local democracy and decentralized production.
One of the most interesting questions today, given the intense polarization of American politics, driven by the Right, is whether this second decentralized tradition on the left can build any bridges to the most likely elements of the center-right, libertarians and small business owners. We have our strong doubts that either will be allies on any of the major directions. That’s despite the hopes of the old Progressives and Populists from 100 years ago, Maury Maverick’s efforts to get small businesses a greater share of defense contracts in 1944-1945 (and then the peacetime “conversion” contracts) on behalf of FDR and the New Deal, and the efforts of John Kenneth Galbraith in Economics and the Public Purpose (1973) to bend progressive policies to their needs. We have written extensively about the exaggerated hopes both parties place in the ability of small businesses to solve the nation’s terrible unemployment problems, essays which only asked all sides to view the nature of small businesses through realistic lenses. That’s very hard to do in our culture of entrepreneurship, especially when the large entities of the corporate state are so tarnished and the Center-Right keeps yearning for the purest, most elemental version of “free market capitalism.” We were very pleased to see confirmation of our views more than a year after we first wrote about small businesses (Sept. 4, 2010: “Election Menu: Ran Out of Jobs, Now Serving Austerity” and in more detail, July 28, 2011: “When Market Man Consigns the Common Man to the Dustbin of History.”) with the publication of Jared Bernstein’s op-ed in the NY Times, “Small Isn’t Always Beautiful,” on October 24, 2011, here at http://www.nytimes.com/2011/10/24/opinion/small-businesses-arent-key-to-the-economic-recovery.html?scp=1&sq=Small%20Isn't%20always%20Beautiful&st=cse
Readers may vaguely remember Mr. Bernstein in his former role as the chief economic advisor to Vice President Biden. Aside from bringing everyone some realism on what to expect from the little businesses on job creation, Bernstein also reminded us that whatever the breakdown of its 20 million or so constituents, “the sector’s primary lobbying group – the National Federation of Independent Business – tends to fight less for these pragmatic policies and more for the standard conservative agenda of lower taxes and deregulation. Indeed, the group has become a purely partisan operation, fighting more for Republican electoral victory than small-business growth.” That really needed to be said, and leads us to wonder how small business owners would poll on the Right to a Job and the government’s obligation to supply the ones the private sector can’t, and also on the issue global warming? We strongly suspect that it would be 80 to 20 against both these left flavored but actually universal issues.
Just as we were writing this closing section over the November 19-20th weekend, Richard Kim’s fine article in the November 21st edition of The Nation arrived. It’s a great summary of the OWS movement, the background of the occupants, and the tensions within the movement, and it confirms much of what we had already written. Here is the article at http://www.npr.org/2011/11/07/142092366/the-nation-the-audacity-of-occup... . What was new for us was his report that there was a struggle at the end of October when the Demands Committee brought its “first proposal, a call for ‘a massive public works and public service program’ that would create ‘jobs for all’ to the General Assembly. It didn’t work and the debate at the General Assembly “exposed a clear ideological schism between anarchists, on the one hand, and Marxists, progressives and liberals, on the other, with the former predisposed to reject any demands (like jobs for all) that appeal to the state instead of directly to the people.” And perhaps that’s why, when we went back to take a closer look at that official “Declaration of the Occupation of New York City” which passed the General Assembly on September 29th, there was no mention of the failure of “the corporate forces” to create jobs for all, despite the sweeping scope of the 23 listed “complaints.”
Kim then goes on to report that “most organizers I spoke with were open to demands at some point but preferred to focus on movement building for now. ‘I think one day there could come a time for demands,’ says Katie Davison, ‘but right now I think demands would fracture and divide people…We need a movement of solidarity that is about values first, and we’re still coming together and finding out what we all agree on.’” And so the movement seems to have settled for symbolically important varieties of direct action. Kim concludes by asking “What’s a name for this – organized anarchy or socialism with a beat? What matters is that it’s working for now.”
Earlier in the article, Kim had noted that the strong strain of anarchism in the OWS movement had “elicited the most hand-wringing from establishment leftists,” including one who worried that they were heading down the path outlined by a text called “The Coming Insurrection,” which is one we’ve never heard of. Kim says that this French anti-globalization manifesto “predicts the total collapse of modern society, instigated in part by local cells of revolutionaries who exploit moments of crisis…in order to replace late capitalism with autonomist units of life.” Then Kim reassures us that few Occupiers were familiar with it, and that its supposed influence has been touted for years by Glenn Beck, which should reassure most folks still governed by a smattering of reason. And Kim adds another note of reassurance on the “anarchist” worries: “…it is, in fact, the movement’s emphasis on direct democracy, derived from anarchism, that has allowed such an unwieldy set of actors to occupy the same space.”
Yet that phrase “autonomist units of life” taking over after the big collapse does ring the worry bell for us, despite the reassurances, because we hear echoes of it, not from insurrectionists, but from responsible critics who have been scouring the hinterlands for years hoping that the elements of a new economic system, a new capitalism with a soul, whatever we might want to call it, are sprouting, growing and ready to take root in the nutrient rubble left after the great crisis. And we hear that in folks we like, such as Naomi Klein, Bill Greider, Paul Hawken, Gar Alperovitz…Yet from where we sit and observe, it doesn’t appear that these new elements are ready to feed, clothe and supply the American people with even their basic necessities yet, much less meet the long standing obsessions Americans have had with new technology and products…unless they can find some way to capture and transform the existing systems.
And our worries were not totally put to rest on this score when we came across the following long interview featuring Bill McKibben and Paul Hawken, recorded in September, 2011, before the Occupy phenomenon has settled in, here at http://fora.tv/2011/09/08/Bill_McKibben_and_Paul_Hawken_Blessed_350 . We did not find this gem until late November, in the home stretch of this essay, and we had been wondering why we hear so little commentary from Paul Hawken, one of the good businessmen who progressives like Van Jones put so much faith in for transforming the old economy into a “green collar” one. But a funny thing happened on the way to the transformation: the bulk of business leaders in the nation, and their collective lobbying institutions, helped pull the plug on a Global Warming heated transformation. That’s what jumps out at us in the 1 hour and twelve minute sit down; you hear Bill McKibben blasting the unrepentant oil industry for stopping the transition, but that attack is a rather obvious evasion of how radically Right- wing the rest of American business leadership has become. Even New York Mayor Bloomberg, known for his sympathetic efforts to combat Global Warming, has a clear Right wing take on who is responsible for the financial crisis. And then there’s his surveillance center…
The other startling aspect of this interview is how much both guests are relying on a grand crisis to drive home the case for change, when all the other usual methods of democratic persuasion seemed to have failed them, including McKibben’s turn to direct, non-violent civil disobedience outside the White House. This is to take nothing away from the intensive labors of both of them to work for change. It’s our closest look at Hawken, whose books we are aware of but have only encountered by secondary comments and references, as in Speth’s book, The Bridge at the Edge of the World. But this is where their world views would seem to collide head-on with the ideological power of the Republican Right and its long running patents to extrude the world’s most fanatical ideologues since the passing of the Bolsheviks, including many, maybe a large majority of business leaders. This is why Naomi Klein’s article is so important, in getting the economic left and the environmental “left” together on as much of the same page as we can. This video is well worth your time, and during the last 15 minutes, you will hear a fascinating segment by Hawken critiquing solar power on the grounds of still poor energy input-output ratios, and also, at the very end, in response to a question, giving a hearty endorsement to job creation through building retro-fits and energy audits, something we have been pushing for years now.
Conclusion: A Second Bill of Rights, History’s Next in a long Line of Democratic and Emancipatory Documents
And this brings us to some difficult judgments, inspired by the fact that whatever else Occupy Wall Street has done, it certainly has intensified discussion about the American political economy, making it more likely that the average citizen will use the term “capitalism” once again, instead of “free enterprise,” or “private enterprise,” along with the critical shades of meaning which are embedded in it, which the economic historian Fernand Braudel so aptly covers in the second volume of his three volume work, Civilization and Capitalism, 15th-18th Century: The Wheels of Commerce. In fact, the usage of the word invites citizens of all countries to break out of the stranglehold of neo-liberal (conservative) economic ideas and go back to the earliest days of the Industrial Revolution in the late 18th century and work their way forward, something which we have tried to do in previous essays, as well as this one. If there is a spectre haunting the global economy today, it is the revived ghost of capitalism past, where those two billion or more new workers are creating rolling waves of wage misery, just as the first displaced agriculture workers in England did from 1790-1850.
We are struck by the competing traditions seemingly contained in the OWS movement, as Richard Kim and others have pointed out, the tensions between anarchists, libertarians, Marxists, socialists, social democrats and liberals, formidable hurdles to reaching a common platform. And we return to the reality that this mixture of views could not agree upon the “Right to a Job” or “Jobs for All,” because of the fear of “state dependency.” It’s an issue that resonates all the way back to the momentous debates in Europe between Marx and Bakunin in the late 1860’s and 1870’s, in the First International. And it is at the center of the controversy over whether or how much the economy, and who runs it, should be decentralized, and it is very much intertwined with the question of how much technology can be deployed, and what type, given the destructive implications of every person in the developing world becoming a Western style consumer.
By sheer logic and democratic heart, one has to lean towards the anarchists, the decentralizers, like Christopher Lasch, and Naomi Klein. Yet we know from the historical evidence which Lasch has supplied us with about the evolution of the left in both Britain and the US, that when economy deteriorates, there is tremendous pressure to skip the radical reorientation implied by all-out decentralization, and focus on the existing means afforded by the powers of the nation state. We think this will come to a head in the United States over unemployment and the great foreclosure crisis, and in Europe as well. We understand the dynamics inside OWS which prevent them, in light of their ideological diversity, from coming up with a clear statement on the jobs crisis, and we are factoring in their probably correct tactical call that shaping the broad debate about capitalism and keeping symbolic pressure on its worst institutions and features are more important in the short run. But unemployment is just that, and addressing it forcefully can only be postponed at great peril to OWS.
In terms of historical analogy, though, we think the best guidance for the future of OWS comes from the 19th American abolitionists, like William Lloyd Garrison, and not the civil rights movement. Garrison and the abolitionists were able to transform the terms of the political debate without ever having advocated direct involvement in the political process, a process he still commented on frequently in the pages of The Liberator, measuring and following the fateful descent of the Union in the wake of the Mexican War. It was the abolitionists clear statement of goals and moral purpose, especially Garrison’s, right from the start in 1831 - no compromise with slavery, it needed to be abolished and the slaves given the full rights of citizenship – which eventually turned the rudder of the political debate in their direction, fully acknowledging the fact that it was the ultimate failure of politics under such strains which led to the great Civil War which freed the slaves. And as Michael Kazin has pointed out, it was the institutions that the abolitionists built around their cause: the publications, speakers’ bureaus (they had their own “circuit riders”), and bridges to the churches – that sustained the movement over 30 years.
The civil rights movement, really the closing chapter in the work the abolitionists had begun, started out, like the abolitionists, with symbolic protests and civil disobedience, and in this respect, OWS does resembles them. However, the civil rights protests were very closely linked to the changes they were seeking, even if the early protests on “seating arrangements” on buses and at lunch counters didn’t always state it. Thus, despite the enormous break with Jim Crow traditions that it involved, the movement was “only” asking the nation to extend the protections and logic of its existing laws to all citizens. And this meant that there could be very close connection to the location and symbolism of demonstrations and the demands of the movement.
When the demands shifted, however, to areas which posed a direct challenge to the white ethnic neighborhoods of the North, as in Martin Luther King’s harrowing Chicago experiences, and to the broader society on the new grounds of economic justice, leading to his assassination in Memphis in April of 1968, the movement found itself in increasingly deep trouble. And here, thinking of where OWS goes with its tactics and as yet unstated demands after their physical evictions from the home camps, we found Christopher Lasch’s work on MLK and the Civil Rights movement both cautioning and constructive. Lasch wrote that King ( in The True and Only Heaven), “in the years from 1966 to 1968, when he needed a period of rest and reflection in which to puzzle out where his movement had gone wrong and how it might recover a sense of direction … forced himself again and again to ‘go for broke,’ to draw up plans for ‘massive dislocation’…By the end of 1967, he was planning to occupy Washington until Johnson ended the war in Vietnam and launched a comprehensive attack on poverty.” (Our emphasis.)
Our point is not to discourage OWS or the broader left by citing these troubled times from the civil rights movement, but to point out the importance of linking tactics and goals in ways that successfully tread the high wire line between imaginative symbolic protest, and disruption of business as usual, without alienating the public whom we are trying to win over. It makes tactical and strategic sense to us that if OWS is going to head towards “massive dislocation,” that their objectives be much clearer. Jobs for All and the Second Bill of Rights have the essence of human dignity built into them, the next large step forward from the conditions of 2007-2011. They represent the necessary magnitude of change, in keeping with the evolution implied by the Declaration of Independence, the Declaration of the Rights of Man and the Citizen, the components of the UN’s International Bill of Human Rights, and the achievements of the civil rights and gender/sexual rights movements.
Working in favor of the left’s cause is the fact that unlike the 1966-1968 period, where black Americans in particular had been isolated from the bounty of the golden economic years of the American Century, the economic troubles of today are widespread, transcending racial boundaries, and spreading from the working class to the middle class and encompassing all age groups. Without creating a new working class which in any way resembles the old white working class from 1920-1980, economic conditions are nonetheless “proletarianizing” a growing portion of the middle class. In that sense, the overall terrain is well suited to direct challenges to the nature of present day capitalism, far better than it was in the 1970’s, and that has implications for the maneuvering room available to the Right as well.
So we have some suggestions on common goals for OWS, ones that we believe address the most pressing economic needs of the American people, and the need for climate protection, and yet are ones which the system cannot deliver unless it either changes under constructive pressure - or the groundswell on the left that OWS is building eventually sweeps the unrepentant office holders out the door (something which does not seem within immediate reach in 2012). Therefore these goals are practical and idealistic at the same time, and watching the Center-Right try to answer them will be an education for all Americans.
We start with our long standing number one goal, the Right to a Job, presented as the first Right from FDR’s Second Bill of Rights in his State of the Union address from 1944. We like the way Marshall Auerback has framed this issue, his universal Job Guarantee that promises to leave the private sector alone, and let it set its own goals of saving and investment, while granting the public sector and the non-profit sector the right and the mission to fully employ the American people on dignified terms, not the current terms of the cruel - and about to turn crueler - “flexible labor market.” Whether he intended it this way or not, it is tactically shrewd, even as it may disappoint those who want a greater initial transformation in the nature and terms of work, investment, and its products. That’s because it offers an eminently reasonable compromise to the lords of the private sector, who under their current ideas must reject it, since they reserve all such rights to themselves, and don’t believe they have to seriously meet other groupings in society on anything like fair democratic terms; just think of American business’s current stance towards labor and the Global Warming campaigns. There is no exaggeration in our description here. So the left can stake out the high moral and practical ground right from the start. It is telling however, that OWS cannot get a consensus to move in this direction yet….
Second, the oligarchy of the Wall Street Banks, broadly defined, must be broken up, and we include in this mission the gambling casino called the derivatives markets (excluding the old futures hedging for farmers and direct oil purchasers, and comparable needs.) This is the way we address the mortgage foreclosure crisis and all those underwater homeowners who haven’t walked away yet. We put the goal of breaking up the banks ahead of “foreclosure help” because we don’t think any program we’ve yet seen can work without breaking the financial and political power of the largest financial firms. We also believe that this proposal is the one which currently can draw the highest level of support across the entire political spectrum. We invite readers to visit Bill Greider’s recent proposal here at http://www.thenation.com/article/164216/its-time-debt-forgiveness-americ... and compare it to the details for achieving the same goals contained within the essay “The Way Forward” here at http://www.newamerica.net/publications/policy/the_way_forward . We don’t think it’s possible to solve the problems of foreclosure without attacking the causes at the highest level. As much as we like the Tobin or financial transaction tax proposals, they don’t get at the root of the problem. A financial system that was interested in compromise would jump at the chance to give its critics a “FTT,” but there’s no sign of any “flexibility” with them at all. In their world view, it’s the labor force that should be “flexible.” And how about the business “community’s” trouble with uncertainty, all blamed on President Obama’s policies? After inflicting the uncertainty of mass layoffs on blue collar workers and middle level managers for decades, they don’t want any part of it themselves!
The third goal is to get the large chunks of private money out of the political system. Going after corporate personhood is one thing that is needed, and then there are all the variations on publicly financed elections, but we don’t think OWS should get bogged down in the details, which can become all consuming. Prior to voting on goals, we recommend they solicit a series of competing “expert” opinions of logically interconnected reforms and then chose. Indeed, our sense is that those opinions are sent to them regularly. We don’t know how well OWS sorts them out.
Fourth, and we suppose this could be seen as an offshoot of the third, is curbing the power of K Street and putting a giant jamb in that infamous revolving door. That door jamb must really separate career paths, public from private, say with a five year ban: you can’t go from Congress, its elected members’ staffs and committee staffs, or the Federal bureaucracy, including the military, to anything in the private sector remotely connected to national lobbying politics.
And fifth, we need a carbon tax to begin to curb global warming by making carbon pollution more expensive. It should start at modest levels and build year after year in small but steady increments. In the wake of the failed carbon trading schemes, the proposals for a tax and dividend distribution program to take the increased fuel and energy costs off the shoulders of the poorest part of the population were getting better and better, and we should. Some proposals remove the cost increases from 60-80% of the taxpayers. OWS should leave the details to competing, well-thought out programs and then chose.
Just as we were finishing this essay, one of our long-time readers, Lora Meisner, sent us Michael Moore’s take on goals for OWS, and we think he had some excellent ones, ones we could live with quite easily, especially those measures to curb the offshoring of jobs. We were more than pleased to see that his final goal, raised to the level of a Constitutional Amendment, along with getting the money out of elections, is for FDR’s Second Bill of Rights. Here at http://www.michaelmoore.com/words/mike-friends-blog/where-does-occupy-wa...
We’re going to close this essay now with a dose of cold water, of political realism, coming out of our own experience. We will be blunt, therefore. None of the five goals we’ve listed for you would be picked up by the Democratic Party as we know it today, none of them. So you can imagine what Republicans would do with them. But the even deeper worry is where American business leaders stand. We speak regularly with one from Maryland whom we like, and with whom we can have a frank and cordial exchange of ideas 99% of the time, which is a miracle in itself today, since he’s a Tea Party supporter, and a Republican. But when we talked to him about President Obama’s far too modest job creation bill, it was his reaction to the provisions which offered bonus money to firms which hired those who had been out of work six months or more that really shocked us. This was just about the time we were finishing our last essay, in mid- September, “Heading Down the Road to Disunion,” and doubtless what we heard from him had an influence on what we wrote. And what we heard was that hiring someone who had been out of work those six months or more was the private sector’s equivalent of hiring a modern day leper, or someone with an eighth grade education from the west Baltimore ghetto, no exaggeration. It was the furthest thing in the world from Marshall Auerback’s and Hyman Minsky’s belief that we should “‘take the workers as they are’ and work them up to their ability, and then enhance their ability through on the job training.” A universe away, in truth, from those New Testament like sounding declarations. And these were the six month “unemployables”; what would we have heard from him if the ante was upped to those out of work a year or more, which is an increasingly common situation?
Let us assure OWS and all those on the left who worry about making “demands” and then getting co-opted into the type of techno-talk that policy initiatives tend to get bogged down in, or drawn back in to a system that has no intention of changing its fundamentals. There is no worry, as we can see it, on that score, with any of these goals. That’s how far we have to travel to get even Democrats to seriously consider them. We don’t believe the Center or the Right can make good on anything close to these goals without a major alteration in the current economic system and its assumptions. If you had any doubts about the depth of the differences, about why we wrote what we did in the essay “Heading Down the Road to Disunion,” then please watch and listen carefully to this brief video, a debate that financial honcho Peter Schiff had with left-leaning academic Cornel West on CNN”s Anderson Cooper show here at http://www.youtube.com/watch?v=-HdsXt5lPro in late October, 2011.
Do you hear any common ground in this debate? We don’t: in either the facts, the history, or the interpretation of the events described, the founding of unions, the Great Depression of the 1930’s, or the causes of today’s troubles. We recommend that CNN bring Mr. Schiff back again to debate economic historian James Livingston (author of Against Thrift) so that Professor Livingston can introduce him to his conclusion, based on historical evidence, that “robust and balanced growth under capitalism does not require – and since 1919 has not required – increasing private investment financed out of rising profits,” and in fact, will thrive under the exact opposite of the “austerity regime.” (And Professor Livingston needs to expand his treatment of net investment to address research and development and funding for entirely new plants; yet he’s on the right track, going directly at the heart of the argument that jobs come only from the private sector, and only when businesses and the wealthy control an even greater portion of the nation’s wealth and income. They do it all for us, we imagine.)
OWS and the left should take heart. We believe that there is a way to work more decentralization and democratization into all the goals we listed, and the policies that would implement them. But it will require the power of a left-center elected national government working through many national institutions to achieve them at the state and local level. And capturing that federal power for better purposes can’t happen without the rise of a sweeping citizen’s movement that believes in these directions. OWS is going to have to confront the fact that unless the left is going to invent our own version of “The Shock Doctrine,” where we rapidly conjure up new decentralized institutions in the midst of economic or climate catastrophe, then our own humanitarian goals mean we will have to act short of that desperate situation to solve the jobs and foreclosure crisis, and the climate crisis.
And there is yet another reason why we on the left should take heart. Step back and look at where the Right must stand today to intensify its utopian market vision. They cannot build upon the wealth that the New Deal left to the country from 1945-1973, as they did in the 1970’s, where their attempts to discipline and break organized labor started from an affluent plateau. The Right today must start from the bottom of a trough, the maldistribution of income and wealth that they imposed over 30 years, and they must apply yet more of the same logic they used in the 1970’s. Their logic maintains that capitalism is, no matter how deep the deflation and lack of demand, self-healing, if only government will get out of the way. Get out of the way, that is, after further easing all manner of environmental and workplace regulations, and after further lowering the taxes of the already wealthy. It will all be done in the name of American wage competitiveness and meeting the China challenge, and even Germany’s model will be invoked without the understanding of the differences, but it will mean breaking every remaining union, public and private, and it will mean tearing up every one of the 23 existing “findings” that OWS-NY has charged the corporate run economy with. And let’s not kid ourselves: the private sector, sitting on all that idle cash, could certainly deliver a post-election bounce to Mr. Romney (or Republican “X”) in the expectation of what that Republican will deliver to them. But unless most of the thinkers we have covered in this essay are wrong, that will not be enough to correct the problems of 21st century capitalism. And it will be a nightmare, not a dream, one Americans will never forget, if they are left with anything resembling a memory in the wake of it.
In that spirit, we close with Norman Birnbaum’s tribute to the work of Christopher Lasch: he “…was a spiritual pilgrim, reminding others of the unshared past they had lost but might be able to recover. He was a reformer in a society in which the most elemental of reforms, the democratization of economic life, has not been accomplished.”
It’s high time to add that reform, which amounts to a Second Bill of Rights, economic ones, to the great democratic and emancipatory documents of human history.
Until our next posting, all the best to our readers.
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