Whither the Democratic Party?

Thomas Piketty is widely regarded as the leading academic expert on income and wealth inequality. He is the best-known face of the participants in the World Inequality Lab, a far-reaching project tracking inequality broadly and historically. 

His book, Capital, brought him fame, based on a set of well-demonstrated ideas largely marginalized since the setbacks to Communism. For those who had been intellectually seduced by those setbacks, the notion advanced by Piketty that income and wealth inequality were produced and reproduced by capitalism, with rare, atypical exceptions, surely came as a shock. 

To the rest of us, it was not news, but good to see it stated in such a popular book. Usefully, Piketty backed his conclusions with massive data, both widely across geographical differences and deeply over historical periods.

Piketty’s book forced some liberals and leftists to lift their heads from the sands of reformism and identity-construction to face the reality of class and disparate class interests, though Piketty preferred quintiles to classes.

His research is empirically useful to the Marxist left, though analytically and theoretically thin.

Since Capital, Piketty and his colleagues have set out to restore the social democratic project, largely by proposing utopian tax regimens that have absolutely no hope of being advanced by existing social democratic parties.

Most recently, they have sought to apply their empirical studies and data analyses to understanding changes in the voters who support the various political parties and alignments. In a May 5th paper entitled Brahmin Left versus Merchant Right: Changing Political Cleavages: 1948-2020, Amory Gethin, Clara Martinez-Toledano, and Thomas Piketty argue that the traditional post-war left (non-Communist left) supplemented by new formations, principally Greens, have experienced a shift in support from lower educated, lower income voters to higher-educated elites (the so-called “Brahmin Left”).

The right, on the other hand, continues consistently to be based upon “higher-income elites.”

They see these changes as productive of “multi-elite party systems” in our time, replacing the older “class-based party system.” The fall in the voter-participation of the less-educated, less-affluent is seen as a sign that “socially disadvantaged voters understand that the parties have become elite parties”:

One possible interpretation of our findings is that left-wing parties have gradually developed a more elitist approach to education policy, in the sense that they have increasingly been viewed by less well-off voters as parties defending primarily the winners of the higher education competition.

The new political players (Greens and “anti-immigration” parties) draw upon the higher educated and the lower educated voters, respectively, according to the researchers.

In addition, they maintain that the new cleavages correlate highly, with a “‘socio-cultural’ axis.” Through education (“the key variable”), this axis “appears to be related to a large set of policy issues, including the environment, migration, gender, education, and merit.” “Western democracies seem to have shifted to new forms of identity-based conflicts in recent decades…”

To simplify the academic jargon, the policy changes seen in recent decades accompanying the development of multi-elite political parties are based on socio-political values and not economic inequality (Piketty would remind us that socio-political values have distributive consequences, but they are not driven by those consequences):

Conservative emphases include categories such as political authority, positive evaluations of traditional morality, or negative attitudes towards multiculturalism; liberal emphases cover issues related to environmentalism, the protection of underprivileged minority groups, or favorable mentions of multiculturalism.

The Transformation of the Democratic Party

Whatever else one might say about the World Inequality Lab (WIL) study, it is a refreshing departure from the hackery typified by the pundits in the capitalist media. It is certainly a step away from the skirmishes in the cultural wars, the cheap appeals to patriotism or the Founding Fathers or our shared humanity, the overbearing cultural smugness, and the other irrelevancies that substitute chatter for analysis.

However, Gethin, Martinez-Toledano, and Piketty provide only the fixings for a nourishing meal. As Piketty did with Capital, they persuasively expose trends in today’s political landscape, but present little explanation of their origins or meanings. They show that these same changes are afoot in 21 different countries, but offer a slender historical or socio-economic context for understanding or addressing those changes.

In the case of the US, those changes in the modern era have a history rooted in the contradictions of the two-party system and the crises generated by state-monopoly capitalism.

From its consolidation after the Civil War, the two-party system resisted change by appropriating the trappings of third-party challengers and cobbling together unusual, often contradictory coalitions. Negotiating the changing political and economic terrain while ensuring two-party dominance required deft shifts in class allegiance and party programs.

The Democratic Party response to The Great Depression demanded an unholy alliance between Southern conservatives, States Rights segregationists, urban liberals, the labor movement, and small farmers. Roosevelt’s success in keeping this unlikely coalition together, the ensuing myth that he “solved” The Great Depression, and the significant, but moderate reforms achieved before World War II gave birth to what became known as the “New Deal Coalition.” Its origins lie in reaction to crisis and the ensuing pressure of mass movements, though the Democratic Party reaped acclaim and unparalleled popularity. 

In Piketty’s vernacular, the Democratic Party became perceived as the left element in a “class- based party system.”

The contradiction between the progressive and liberal constituents of the New Deal coalition and the reactionary segregationists reached crisis proportions in the Cold War. The hypocrisy of US human rights sanctimony and a militant movement for racial justice strained the Democratic Party’s New Deal coalition. 

The Democrats, under enormous pressure from an independent popular movement, resolved the contradiction by enacting legislation that broke with institutional segregation, a long step towards completing the bourgeois revolution in the US. However, the action cost the Democrats the loss of their Southern coalition partners.

The seventies brought defeat in Vietnam, an intractable crisis of inflation and stagnation, and a serious undermining in confidence in US institutions springing from the Nixon Watergate debacle and revelations about the CIA and the FBI. In this cauldron of instability, the Democratic Party sought to construct a new coalition. They chose James Carter, a Southern politician, as a presidential candidate, with the hope of winning back some of the lost Southern support. 

At the same time, the “New Deal” wing of the Party imposed one of the most progressive platforms on the Party since the Roosevelt administration. It was to be their last hurrah.

Carter won in 1976, but not because Southerners returned to the Democratic Party in droves; rather, because middle-strata and petty-bourgeois suburban voters joined the traditional urban base to move beyond the ugly image of the Nixon/Agnew/Mitchell era. The Democratic Party had found its new coalition partner in affluent, educated, largely white voters. 

The shift was a shearing away of voters who were formerly attracted to moderate Republicanism, but were appalled by the extremism of the Watergate era. At the time, commentators dubbed them “socially liberal, but fiscally conservative,” an apt description that fit their interest in civility without wealth redistribution.

From the 1976 campaign forward Carter repudiated the New Deal platform, and began the first steps of deregulation that became the signature of the Reagan administration. His notion of social welfare reform took shape as market-based, a foretelling of the future bi-partisan approach. And his attention to marijuana reform, gay rights, environmental concerns foretold the shift in Democratic Party policies away from “class-based,” economic equality issues towards “socio-cultural,” values-based issues.

By the mid-1980s, New Deal liberalism and its answers to inequality were virtually expunged from the Democratic Party. The 1986 Party document, New Choices in a Changing America, signaled the entrenchment of market-based solutions, competitiveness, priority of the private sector, job training and education, choices, and movement away from the redistributive, social program, welfare-economics approach associated with the New Deal. 

The faction carrying this forward was the well-funded, aggressive Democratic Leadership Council. This very neatly tied in with the new “elite” element in the Democratic Party coalition-- the well-educated, affluent, middle and upper-middle strata, courting and courted by the Party.

Traditional elements historically wedded to New Dealism-- labor and African Americans-- had nowhere else to go in a two-party system. And the Democratic Party leadership treated them accordingly. The Jesse Jackson primary challenges of the 1980s, though unsuccessful, sought to shock the Democratic Party into attending to the interests of the unprivileged, but most historically loyal constituencies of the coalition.

The Clinton Presidency-- dominating the 1990s-- put the Party’s new approach into action and represented the complete victory of markets, private over public solutions, and liberal social values within the Democratic Party.

Ruy Texeira and John Judis, two tenured members of the Democratic Leadership Council, with their book, The Emerging Democratic Majority (2002), assured the Democrats that demographic changes would redound to Party success, as former “minorities” would swell into a majority with time. And they clearly stated what had long been unstated: women, minorities, and the educated, affluent elites would constitute the ideal Democratic Party coalition and carry the day going forward.

The transformation of the Democratic Party was consummated with the election of Barack Obama. Consequently, the Democratic Leadership Council dissolved.

The realigned Democratic Party pays lip service to a shrinking trade union movement that has lost its political weight in retail politics, granting celebrity access to the leadership and spinning Labor Day homilies.

The realigned Democratic Party recognizes the growing importance of Black and Latina and Latino votes, along with the recognition of an ever-growing list of self-styled, non-traditional identities, emphatically patronizing, placating, and pacifying groups with tokenism and sanctimony. 

“Responsible” leaders are showered with position and respect, while the masses are ignored, their social and economic plight frozen in the grip of market forces and the false hope of moral uplift from “rising tides lifting all boats.”

The realigned Democratic Party fully recognizes the economic and political power of the upper-middle and upper strata-- the petty bourgeoisie. Democratic Party leaders vie for their votes by guaranteeing economic and social stability, personal safety, and the sanctity of property rights.

Where welfarism, poverty amelioration, and modest wealth-and-income leveling characterized the long-gone New Deal coalition, today’s Democratic Party coalition rallies around the interests of urban and suburban elites, what witty leftish liberals call the PMC (the professional managerial class).

In a study published in June of 2016, Stephen Rose found that a stratum, determined by income, that he called the US Upper Middle Class (UMC) had grown remarkably from 12.9% of the population in 1979 to 29.4% of the population in 2014 (and commanding 63% of all income!). This stratum is roughly coextensive by occupation with the PMC mentioned often by liberal critics of the Democratic Party. But, as I point out in an article from July of 2016, neither income nor occupation is determinative of class; rather ownership and relations to ownership of capital determine class position.

Nonetheless, both occupation and income correlate significantly to class position. Moreover, the important finding to note is the direction or tendency of income, occupation, and class composition. Clearly, the petty bourgeoisie has grown dramatically in size and economic power since 1979, a very ripe plum for the Democratic Party to pursue!

Where Piketty et al find fascinating correlations leading to interesting generalities, we now have the why and how that a study of history (the science of Marxism!) turns up. Together, they allow us to understand, predict, and critique the behavior of the Democratic Party, not as a random, unexpected left or right turn, but as a result of the logic of the two-party system and the maturation of state-monopoly capitalism.

Conclusion

The Democratic Party is not a progressive, liberal, people’s party that has drifted away from its moorings, as some would have it. It is not a political party that has been momentarily hijacked or diverted, as others see it. It is not a vessel ready to return to course under a new captaincy.

More than fifty years of devolution toward a party dominated by the bourgeoisie and the petty bourgeoisie does not suggest a reversible trend.

Instead, the Democratic Party has been transformed by the contradictions inherent in its construction into something entirely new. Within the context of the evolution of US capitalism, it has undergone a profound rebuild no longer capable of serving the interests of those who formerly found hope in its success.

Understanding this transformation explains why elements of the old coalition feel betrayed by the modern Democratic Party, choosing to chance a vote for newcomers, charlatans, and poseurs. 

Understanding this transformation explains why US politics are increasingly bitter, violent, and polarized. 

And understanding this transformation accounts for the negativity of Democratic Party campaigns: Democrats run against the evils of instability, change, and radicalism, not for anything.

Will the Democratic Party respond to popular movements in the future?

Of course. An opportunistic institution is nothing, if not resilient.

But it will resist change vigorously to keep its realignment intact and to continue on the same course, absorbing new movements and establishing internal stability.

With an understanding of its history and the confines of a two-party system, finding a road to social justice for working people in the Democratic Party is an improbable, if not impossible task.

Greg Godels
zzsblogml@gmail.com

Why are They Afraid of Thomas Piketty?

When I first wrote about Thomas Piketty and his book-- a month before the publication of the English language edition of Capital in the Twenty-first Century-- I felt confident that he, and it, would have a large impact even beyond the academic community. For sure, I never expected it to be a best-seller, but I thought I saw the book filling a particular, urgent need for one segment of the political spectrum. While others noted the book's timely appearance in the wake of the 2007-2008 economic catastrophe and arrival concurrent with attention to revealed trends in inequality, my sense was that the book would be received as a godsend by liberals and social democrats.

Though the crisis cast a long ideological shadow over neo-classical economics and its associated policies, the widely expected return to the Keynesianism of the post-war era never materialized. Despite the best efforts of high-exposure, acclaimed economists like Joseph Stiglitz and Paul Krugman, New Deal-like policy prescriptions failed to gain popular traction or political support. The dashed high hopes invested in center-left governments in the UK, the US and, most recently, France, further disappointed reform-minded forces in North America and Europe. Accordingly, hopes of turning away from the conservative, free-market paradigm of the last thirty-five years were at a low ebb before Piketty's book.

It was my view that the Piketty book would be enthusiastically welcomed outside of the conservative consensus. His exposure of historical patterns of inequality demonstrates the tendency of capitalism to generate inequality, a condition seeming to cry out for a remedy. In Piketty's research and his theoretical claims, liberals and social democrats might find a new foundation for reforms, even a grand assault on conservative hegemony. Indeed, some economists have likened the anticipated impact of Piketty's book to the much earlier publication of Keynes's General Theory of Employment, Interest, and Money.

Indeed, the Piketty phenomenon continues to draw interest. My Google alerts on “Piketty” show fewer entries, but continue unabated. Yet liberal and social democratic ideologues and policy makers are not nearly as enthusiastic as I expected. The initial euphoria has been tempered as Piketty's ideas are digested and their implications carefully examined.

A recent issue of Real World Economics Review demonstrates the widespread and growing hesitancy to accept Piketty as the messiah of reform. Friends in the Communist Party of Ireland brought attention to the Review's Special Issue on Piketty's Capital in which 17 economists of liberal and social democratic persuasion reflect on the popular book.

The “Respectable” Left Sours on Piketty

The participants in the RWER forum are established social scientists sincerely troubled by persistence of inequality and poverty. Some-- Yanis Varoufakis, Ann Pettifor, Richard Parker, Michael Hudson, James K. Galbraith, and Dean Baker-- are prominent commentators in liberal and left circles. All express admiration for Piketty's success in drawing attention to inequality. Yet nearly all are uncomfortable with his research results and theoretical claims. Some challenge his “fundamental laws of capitalism,” others his “determinism.” In the end, the stone in the shoe of these liberal or social democratic thinkers is Piketty's notion that, ceteris parebis, capitalism systemically produces and reproduces inequality. Dean Baker confirms this when he states: “It is the adoption of policies that were friendly to these business interests that led to the increase in profit shares in recent years, not any inherent dynamic of capitalism, as some may read Piketty as saying.” (My italics)

It is the “inherent dynamic of capitalism” that troubles liberals and social democrats. If capitalism necessarily generates inequality, if inequality follows from the laws of capitalist development, then reforms will never satisfactorily conquer social inequality. Should it be true that inequality is a systemic product of capitalism, then a basket of reforms, as advocated by nearly all of the RWER commentators (and Piketty), will, at best, only slow or retard the growth of inequality.

It is this question that separates capitalist reformers from socialists, and social democrats from Marxists. Marxists embrace Piketty's claim that inequality is the capitalist norm, that periods of diminishing inequality are the exceptions. Moreover, the very logic of capitalism, with exploitation at its core, promises to increase inequality. For capitalism to continue, capital must accumulate-- not in social consumption, but in investment targeted to more accumulation. Efforts to resist, reform or regulate will only retard that process.

For sure, progressive governments may enact reforms to redistribute wealth, but eventually this inhibits accumulation and results in a capital strike or capital flight. Capitalism is not an equality-generating mechanism. Nor is it equality tolerant.

Labor may fight for a larger share of wealth, but only to be trumped by capitalist threats of plant closure or mass unemployment. Today's collaborative labor leaders are caught in the compromised position of being both an agent for corporate profitability and an advocate for working class living standards. Surely no advance against inequality is possible in the face of this dilemma.

The RWER writers would prefer to address the decades since Reagan and Thatcher rather than the centuries studied by Piketty. Where Piketty finds a long-term tendency for capitalism to generate growing and extreme inequality, they prefer to ignore that elephantine fact and debate the causes of growing inequality since the nineteen seventies.

They are intent upon ignoring centuries of enduring inequality because accepting that reality would cast doubt on the possibility that equality and capitalism are compatible, that the capitalist system can be reformed. Piketty's long-term data and theoretical argument challenge that possibility.

Rather than accept the implications of capitalism's long-term tendency, its centuries-old trajectory, liberals and social democrats point to the historically brief respite from income inequality after World War II (in the US and parts of Europe) along with the post-war expansion of the welfare state as a kind of golden age for social democracy. They see the abrupt turn away from the moderation of inequality-- occurring only some twenty-five years later-- not as a return to the normal course of capitalism, but as a political coup against tamed and tempered capitalism. With little more than nostalgia to support this view, reformists cling to the illusion that an egalitarian, humane capitalism is in the cards. Liberals and social democrats refuse to see the maintenance and growth of inequality as systemic; rather they want to believe that growing inequality is merely a matter of political choices. Thus, they rail against the ideology of “neo-liberalism,” as though the explosion of inequality in North America and Europe over the last 30-40 years was the result of a right-wing confidence game and not driven by the logic of capitalism. “Defeating neo-liberalism” has become a convenient mantra for those ill-disposed to fighting for a new socio-economic order: socialism.

Writing for the RWER forum, Claude Hillinger bluntly states his opposition to Piketty and his allergy to capitalism as inequality's father: “By treating inequality as an economic problem, Piketty diverts attention away from what it really is–a political problem.”

A “political problem” that has proven intractable for hundreds of years under capitalism? A “political problem” better solved under twentieth-century socialism than by any and all twentieth-century bourgeois politicians? A “political problem” only if we choose to slight or ignore Piketty's data.

It is an unpleasant, unstated truth that liberals and social democrats are much more comfortable addressing the concept of poverty rather than inequality. Under capitalism, alleviating the pain of those at the very bottom of the economic hierarchy appears to be much easier and more desirable than tackling the economic hierarchy in its entirety. Not surprisingly, many well-compensated academics are impressed with their own merit and, thus, find a ready defense of the hierarchy of inequality.

RWER contributor V.A. Beker gently attempts to move the spotlight on to poverty: “Let me now ask an awkward question. Should reduction of inequality or reduction of poverty be our main concern?” Certainly by reducing the target to poverty, the question of inequality's relationship to capitalism can be evaded.

Another evasion is to interpret “egalitarianism” as “procedural egalitarianism,” as does YanisVaroufakis in the EWER forum. While taking a gratuitous, but well-deserved pot shot at John Rawls's liberal theory of distributive justice, Varoufakis cavalierly dismisses all distributive egalitarianism in favor of procedural justice, a lofty euphemism for “equal opportunity.” Proponents of “procedural egalitarianism” claim victory for equality when the rules of life apply equally to everyone. Outcomes are irrelevant if no one violates the shared mutually agreeable procedures, standards, or rules of participation. Everyone has the same opportunity-- the “created equal...” of the US Declaration of Independence.

Thus, nine innings of baseball, played according to the rules, constitute an example of procedural justice. And while the outcome might be lopsided, the game would be played consistent with procedural egalitarianism.

What the advocates of procedural justice dare not address is the case of a Little League team playing the Chicago Cubs. While the rules of that game may be assiduously observed, the outcome is certainly not fair, just, or egalitarian. I doubt if any political philosophers would show enough confidence in procedural justice to bet on the Little League team.

Should the advocates of procedural justice modify the rules of baseball to disallow the inequality of resources or skills enjoyed by the Cubs, they must also recognize that outside of the world of games, differential resources and skills always affect fairness, justice, and equality. Accordingly, “procedural” egalitarianism can be no answer to inequality, unless it comes to grips with the inequality of resources, skills, and power ever present in capitalism. But addressing questions of asset distribution returns us to distributive justice and, ultimately, how capitalism distributes these assets.

Try as they may, liberals and social democrats are faced with an impossible task in imagining a capitalist world that evades or transcends the inequalities of the system's past. Inequality is inherent in capitalism, deeply embedded in its genetic code.

Piketty's conclusions from studying “la longue durée” of inequality-- its trajectory over centuries-- stands as an obstacle to those who believe the myth of capitalism without inequality. Or put another way, the results stymy those who want equality without socialism.

Zoltan Zigedy

zoltanzigedy@gmail.com

Beyond Piketty: The Democratic Conundrum

In a country where sports stars are offered as role models and actors aspire to political office, celebrity intellectuals are a rarity. Thus, the meteoric rise of economist Thomas Piketty to celebrity status comes as a surprise. The English language edition of his book, Capital in the Twenty-First Century, sold out swiftly while reaching best-seller stature, a unique achievement for a book originating from an academic press. Possessing charm, wit, and youthful good-looks, Piketty toured the US, generating demand from myriad talk-show hosts and magazine interviewers.

A month before its release, sensing that Piketty had something fresh to offer, I wrote:

Piketty's argument is a welcome antidote to the paucity of explanatory theory presented by the liberal and social democratic punditry. The controversy stirred by Piketty's argument well before its English-language availability is a sure sign that he offers something beyond the conventional... Closer examination of Piketty's interesting thesis must await publication of the book. (ZZ's Blog, Tuesday, February 11, 2014)

Little did I suspect that Piketty-mania would spawn a sustained discussion penetrating the highest reaches of the mass media. Piketty's argument has shattered the navel-gazing of academic economists, while demonstrating an intuitively obvious fact in a way that even the most thick-headed pundit can understand: capitalism produces and reproduces inequality. Unfortunately, Piketty timidly hesitates to draw an equally compelling conclusion: the only way to eliminate unjust inequality is by eliminating capitalism. It's as though a researcher has discovered the cause of cancer, but is reluctant to endorse its cure.

My own thoughts on Piketty's provocative, stimulating book are posted on Philosophers for Change.

The Piketty phenomenon overshadows what may well be an even more provocative, suggestive study by two US professors, Martin Gilens and Benjamin I. Page. Their paper, Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens (forthcoming in Perspectives on Politics), offers results that could shake the complacency of political theory in much the way that Piketty's book rocked bourgeois economics. Unfortunately, Gilens and Page lack Piketty's panache and insist upon writing in the arid, formal style of academic political science. Consequently, few have commented upon it, notably excepting a column by Margaret Kimberley aptly entitled Democracy is Dead in the inestimably incisive Black Agenda Report.

Democracy or “Democracy”?

For the apologists for capitalism, “democracy” is the sure and sole path of escape from the grip of economic inequality-- capitalism's tendency to produce and reproduce wealth and income disparity. Outside of the revolutionary left, liberals and social democrats promise to harness the legislative system and existing political institutions to tame, regulate, reform, or manage the capitalist system. They argue for a strategy that would engage citizens, coalitions, and interest groups in lobbying and electoral politics in order to shift the balance of power into alignment with the people's will. Taking the existing political institutions as adequate for change, as sufficiently democratic, they opt for a road that will supposedly trump economic power with people's power through bourgeois democracy.

It is to test this perspective, and ones like it, that researchers Gilens and Page ask the following pertinent questions:

Who governs? Who really rules? To what extent is the broad body of U.S. citizens sovereign, semi-sovereign, or largely powerless? (p. 3)

They are querying whether “democracy” as we know it is really democratic: Does it generate or realize the will of the people? Or does it only give the appearance?

As they acknowledge and document, these are questions that have animated scores of philosophers, social scientists, and political activists. But in this case, Gilens and Page actually engage an empirical study to determine what others have only speculated. The results of their study are telling:

The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence. (p. 3)

As with Piketty's findings, these results cohere with what any honest observer of recent history would expect. They are consistent with what a Marxist analysis predicts. It is only the social science establishment that continues to believe that bourgeois democratic institutions function democratically. Gilens and Page make this point in academese: “...a good many scholars – probably more economists than political scientists among them– still cling to the idea that the policy preferences of the median voter tend to drive policy outputs from the U.S. political system.” (p. 5).

Credit the authors for calling out the various schools of thought that provide intellectual cover for the myth of the US as the world's model for democracy. The smug intellectual foundation that supports US intervention in places where US elites claim a surfeit of democracy crumbles under the weight of hypocrisy.

Without a shred of irony, Gilens and Page offer the following caveat to their picture of the failure of US democracy:

...the preferences of economic elites (as measured by our proxy, the preferences of “affluent” citizens) have far more independent impact upon policy change than the preferences of average citizens do. To be sure, this does not mean that ordinary citizens always lose out; they fairly often get the policies they favor, but only because those policies happen also to be preferred by the economically elite citizens who wield the actual influence. (p. 22)

In other words, average citizens do see their desires heeded provided that they want the same thing as elites! It is only in that case that bourgeois democracy works for the average citizen.

What Does This Mean?

Gilens and Page are showing us that elites wield a veto over US political institutions. The collective will of the majority cannot trump the will of the privileged minority. Nor does the collective will organized into interest groups: “...existing interest groups do not serve effectively as transmission belts for the wishes of the populace as a whole.” (p. 22) Thus, unions and other mass organizations fail today to effectively advance the political interests of the majority against wealth and power when those interests are in conflict.

Couple this empirical conclusion with Piketty's findings and we are presented with a seeming inescapable conclusion: growing inequality and the diminishing power of the majority are inevitable. The remedies for inequality can not be realized when the interests and will of the majority are locked out of democratic discourse. The path towards economic justice is blocked by undemocratic institutions only posturing as democratic.

While Gilens and Page refrain from explaining the causes of the failings of US democracy, they are not difficult to adduce.

The US two-party system that consistently bends towards money and influence surely explains much of the corruption of democracy. As grass-roots organizing has been supplanted with costly media campaigns, the power of wealthy contributions has been amplified accordingly. The two US political parties have long since scorned the mass participatory model for a model constructed solely around fund raising and regular electoral campaigns. Aided by a legal system that establishes near insurmountable barriers to third-party efforts, the two parties are largely insulated from any external shocks to their narrow field of operation. At the same time, corporate interests control the internal life of both parties.

Aiding and abetting the two-party system, the mass media in the US are nearly entirely owned and directed by monopoly corporations. The limits of discourse are shaped by both the interests of wealth and power and the programs of the two parties. No fresh air enlivens the public debate except on the fringes. Under these conditions, the interests of the majority and arguments for those interests are marginalized.

A Way Out?

Surely, the Gilens and Page study offers compelling reasons that continuing on the same road will not lead to significant change in favor of poor and working people, the vast majority of US citizens. Those who insist upon data-driven, fact-based evidence now have what they want; they must face more than impressions, more than speculation, but ugly facts: capitalism tends to generate inequality and choke off the democratic process.

What road is the same road? The dead-end road?

The road that brings failure leads through the two-party system, particularly the false friend, the Democratic Party. Those who remain faithful to securing change through the Democratic Party must ask themselves and others how that has worked for most of our lifetimes. If it had worked well, Piketty, Gilens, and Page would not have raised the alarms that their works bring forth.

And those who hold out hope for changing the Democratic Party must surely see the unlikelihood of that prospect after six years of a disappointing Democratic administration. Surely, the euphoria of 2008 is now replaced with a justified skepticism.

Instead, advocates for change must add their endorsement and support to third-party movements and extra-electoral action. They must fight to overcome the barriers to democratic expression in the US and the inertia fostered by the occasional electoral circus. Public demonstration of advocacy energizes political life and counters the passivity of purposely narrow electoral participation. Agents of change must understand that defining electoral life merely as marginal campaign engagement and dutiful voting serves well the ruling elites. The lack of a vocal, militant, and disruptive peace and anti-war movement, for example, has given US militarism a free hand throughout the world.

The potentially most game-changing mass group-- organized labor-- cannot lead us to a new road without undergoing substantial change. Business unionism, class collaboration, partnership-- call it what you like-- has shortchanged working people, contributing to the erosion of US democracy. The Gilens and Page study shows that economic elites like monopoly corporations do not compromise their interests-- they insist on and get what they want through the US political system. With both enormous economic resources and unfettered political clout, US corporations are not inclined to “negotiate.” They are equipped for and disposed toward class struggle, even if the trade union leadership is not.

Only through a radical change in the ideology and tactics of organized labor will an answer to expanding inequality and shrinking democracy be found.

History shows that the socialist option-- a movement to sweep unjust inequality away by strangling capitalism-- serves as an ever useful prod to “liberalizing” bourgeois democracy and engaging social justice. The progressive gains laid claim to by the Democratic Party in the US were forced upon the political agenda by Communists, socialists, and other radical critics of the capitalist order. Republican and Democratic leaders are not inclined to fault or correct capitalism without organized anti-capitalist pressure. From the New Deal to the War on Poverty, concessions to the masses, to democracy and social justice, were accepted to counter the internal or external influence, pressure, or leadership of a radical left.

The revitalization of the movement for socialism, therefore, counts as a vital and urgent component of the fight for social justice and democracy.

Zoltan Zigedy

zoltanzigedy@gmail.com

Getting Serious about Inequality

“The tenacity of the Yankees... is a result of their theoretical backwardness and their Anglo-Saxon contempt for all theory. They are punished for this by a superstitious belief in every philosophical and economic absurdity, by religious sectarianism, and by idiotic economic experiments, out of which, however, certain bourgeois cliques profit.” Frederich Engels, letter to Sorge, London, January 6, 1892. Translation by Leonard E. Mins (1938)

One hundred and twenty-two years later, the Yankees remain bereft of theory while clinging to every outlandish scheme promising to curtail the appetite of an insatiable capitalist system. Churning on without interruption, capitalism generates greater and greater wealth for its masters while devouring everyone else in its wake. From regulatory reform to alternative life styles, from tax policies to cooperative endeavors, self-proclaimed opponents of this rapacious economic behemoth have announced newly contrived exits from its destructive path. While “...people [in the US] must become conscious of their own social interests by making blunder upon blunder...” as Engels put it in another letter to his US friend Frederich Sorge, the contented capitalists merrily continue profiting.

Engels' brutal indictment of the North American allergy to theory and the affinity for unfocussed activism was tempered by an optimism based more upon hope than reality: “The movement itself will go through many and disagreeable phases, disagreeable particularly for those who live in the country and have to suffer them. But I am firmly convinced that things are now going ahead over there... notwithstanding the fact that the Americans will learn almost exclusively in practice for the time being, and not so much from theory.”

That conviction may well seem misplaced today as many of those who claim opposition to capitalism continue to decry theory and invest instead in utopian schemes and isolate burning issues from a general critique of capitalism and its social policies.

Nothing illustrates the Engels' diagnosis more than the current public discussion of inequality and poverty. It is tempting to call the new-found interest a fad or fashion, since it seems to spring from nothing more than a sitting President's alarm. But the present-day rage to address economic inequality is far more cynical. With interim national elections on the horizon and a competitive Presidential race on its heels, Democratic Party leaders served notice on the lame-duck President that it is time again to rouse the Party base, the labor unions, the progressive single-issue organizations, internet lefties, and the deep-pockets social liberals. Hence, despite the fact that inequality and poverty are neither newly discovered nor newly arrived, the alarm goes up: inequality is with us! Poverty is on the rise!

It is true, of course. Only a few outliers would deny that income and wealth growth for most people in the US have been stagnant or declining since some time in the 1970s (Even right-wing ideologue, Representative Paul Ryan, concedes that there are 47 million US citizens living in poverty). Health care has been in crisis, with millions left without any significant health options and untold numbers dying prematurely. The education system, like the physical infrastructure, is underfunded and crumbling. Employment continues to decline as discouraged workers exit the labor market. In short, poverty, disease, declining living standards, crime-- all the attendant problems of social and political neglect-- continue unabated, increasing dramatically over the last forty years.

At the same time, a privileged minority has enjoyed increasing income and wealth, a sharp rise in that group's share of the economic pie. As the economy marched forward, the “fortunate few” marched forward as well, but at an ever accelerating pace.

Without Theory

“Data, not stultifying political or ideological rhetoric, must drive our agenda.” So says rising Democratic Party superstar, Senator Cory Booker, in a newsprint debate with Republican policy icon, Representative Paul Ryan. Sponsored by The Wall Street Journal (A Half Century of the War on Poverty, 1-25/26-14) to commemorate the fiftieth anniversary of the Lyndon Johnson-era “War on Poverty,” the two contestants demonstrate the futility of addressing poverty without a broad and deep understanding of its sources and its history-- the “how” and “why” of social theory. Representing the “respectable” Left in the US two-party political pantomime, Booker rehearses a host of liberal think tank palliatives based on education, job training, apprenticeships, de-criminalized drug use, and a bare-bones safety-net designed to shrink the number of those unlucky enough to fall below official government floors.

Solutions, for Booker, come through the tools of business and commerce: investments, cost-benefit analysis, returns on investment, cost savings etc. Rather than improving peoples' lives, the task of reducing poverty resembles an MBA project of this new generation of Democratic Party politician. He draws on suspect, often out-of-date correlations once found between education levels and future economic outcomes to sell education as a magic elixir. These long unexamined verities are now shaken by the absence of good paying jobs, the declining worth of higher degrees, and the enormous growth of student debt. Booker's feeble defense of the leaky safety-net that remains as a tarnished legacy of the New Deal and Johnson's anti-poverty legislation centers on food stamps and Medicaid, a formula to barely sustain life, but to not escape poverty. Add a dash of Moynihan-like sermon against single-motherhood and you have the anti-poverty program of the new generation of Democratic Party leaders-- truly a patchwork of “economic absurdity” worthy of Engels' contempt.

As for the Republicans, they argue for nothing, only against Democratic Party plans. Theirs is a simple contention: Forty-seven million US citizens remain in poverty. While the “War on Poverty” may have shifted the victims of poverty demographically, the poor are still with us and in great, stubborn numbers. For Representative Ryan, charity and moral suasion-- the remedies of two centuries ago-- are the only alternative to liberal interventionism and its failure.

Now liberals will recoil from these harsh conclusions. They can and will point to significant pockets of improvement, temporary declines in the poverty rate, or promising social experiments. But what they can neither explain nor address is the persistent reproduction of poverty by our economic system. For nearly forty years, measures of income and wealth inequality have grown, signally an inevitable increase in poverty. Even those ill-disposed to theory can surely see a relationship between growing inequality and increasing poverty.

Glaringly absent from Booker's program is any significant plan to redistribute income and wealth. We can attribute that absence to the near complete ownership of elected officials of both parties by the corporations and the wealthy. But on the periphery of mainstream politics, voices can be heard advocating measures both to grow the economy beyond mass impoverishment and/or to redistribute wealth through taxation.

The Krugmans, Reichs, and Stiglitzs and the like enjoy a measure of independence afforded by their academic tenure and widely celebrated intellectual stature, allowing them to somewhat sidestep fealty to corporate masters. As esteemed economists, they understand that the continued growth of inequality will ultimately bring harsh economic or social consequences. But their nostrums, like those of the political establishment, only treat the symptoms of a persistent malady that continually generates inequality, unemployment, and crises. A study of economic history demonstrates that bursts of economic growth and progressive taxation have indeed tempered, even slightly reversed inequality and the growth of poverty, but over time both return to their former trajectory.

A Dose of Theory

A new study by a French economist, Thomas Piketty, brings forward the view that the long-term tendency of capitalism is to produce and reproduce inequality. Though his book, Capital in the Twenty-first Century, is not scheduled for release in the English language until March, it has already generated serious discussion across the spectrum of the US commentariat. New York Times columnist, Thomas B. Edsell, asserts that the book “suggests that traditional liberal government policies on spending, taxation and regulation will fail to diminish inequality.” (Capitalism vs. Democracy, 1-28-2014)

How can that be? The liberal and social democratic consensus cries out for government spending, progressive taxation, and corporate regulation as the answer to growing inequality. A gaggle of Nobel laureates embrace these tools, attesting that they are effective means to combat inequality. What does Piketty see that they do not? 

History.

Piketty is not afraid to study the history of inequality, a necessary condition for any proper socioeconomic theory. What he finds, according to Edsell, is that:

...the six-decade period of growing equality in western nations – starting roughly with the onset of World War I and extending into the early 1970s – was unique and highly unlikely to be repeated. That period, Piketty suggests, represented an exception to the more deeply rooted pattern of growing inequality.

According to Piketty, those halcyon six decades were the result of two world wars and the Great Depression.

In other words, growing inequality is the normal for capitalism and its shrinkage the aberration. Apologists would have us believe otherwise, that capitalism does not carry a gene for inequality. Unlike his Yankee counterparts, Piketty is willing to study the economy as a system-- capitalism-- and explore its historical trajectory. Both methodological dispositions give rise to a theory of inequality, an incomplete theory, but a theory no less.

Now Piketty and his frequent collaborator Emmanuel Saez are widely acknowledged to be among the leading experts documenting inequality world wide as well as in the US. Undoubtedly this gives a high plausibility to his core claim to identify a strong correlation between capitalism's typical course and the growth of inequality.

Of course students of Marxist theory or followers of this blog should not be surprised by Piketty's findings. For over a hundred and fifty years Marxists have maintained that inequality and impoverishment are necessary products of the capitalist system. That is, the logic of capitalism necessitates growing inequality. By locating profit at the heart of the capitalist organism, Marxists understand that wealth will invariably flow to the tiny minority of the owners of capital and away from the producers. It is this process of profit generation that overwhelms all barriers, all “reforms,” to channel society's resources to the capitalist class.

Piketty's argument is a welcome antidote to the paucity of explanatory theory presented by the liberal and social democratic punditry. The controversy stirred by Piketty's argument well before its English-language availability is a sure sign that he offers something beyond the conventional.

However, his interpretation of the long-term trajectory of capitalism, especially its departure from the norm, may be incomplete. He reportedly sees the time between 1914 and 1973-- a time when he claims that the growth of inequality was uncharacteristically retarded-- as a period when the after-tax rate of return on capital lagged behind economic growth. One could quibble that this is perhaps too simple and mechanical, the era was certainly one in which many factors worked to change the “normal” course of capitalism and often buffered the growth of inequality, together constituting a tendency.

But it would be a simplification to locate these factors entirely in economic or political events while overlooking policy. For example, throughout most of the twentieth century capitalism paid an anti-Soviet levy or rent to the working class as an inoculation against the threat of socialist or Communist ideology. That factor played no small part in moderating inequality, creating the mirage of working class equality, and ensuring labor peace.

Closer examination of Piketty's interesting thesis must await publication of the book.

For a Robust Theory of Inequality

We needn't wait for Piketty, however, to find an adequate theory of inequality. Elements of Karl Marx's theory of socioeconomic development offer the key to understanding the production and reproduction of inequality in our time as well as earlier times.

There are, of course, many possible causes for the concentration of wealth. Theft, good fortune, guile, dishonesty are only a few of the ways that humans have redistributed wealth since antiquity. Such causes occur often in history, but only haphazardly. The only systemic cause of inequality is the expropriation of the labor of one by another under the protection of social norms. Marx called this process exploitation. He was the first to identify its forms and its trajectory. He was the first to explain adequately the mechanisms of expropriation. Armed with Marx's theory of exploitation, the inequalities of slavery, feudalism, and, of course, capitalism are revealed with all their specific features. Thus, the concentration of wealth produced by expropriation of the labor of slaves, serfs, and employed workers is connected to unique socially protected forms of exploitation.

Exploitation explains how inequality arises and continues. Without recognition of this mechanism embedded in capitalist economic activity, liberals and social democrats cannot explain the persistence of inequality. They will apply inadequate reformist measures to stem the tide of wealth and income concentration springing from capitalist exploitation, but the tide will not be forestalled by reforms.

It cannot be overemphasized that inequality springs from a process, a process definitive of capitalist economic relations. Outside of the Marxist orbit, commentators view inequality as a state-of-affairs, a state-of-affairs existing between various social groupings. While they authentically decry the misery generated by inequality, they are at a loss to find the proper quantitative relationship between different groups constitutive of society. Sure, some have more than others, but what is the socially just distribution of society's goods? Granted that inequalities exist, what is the optimal way to assign shares of wealth? How much and for whom? Should everyone get an equal share? Should those on the bottom get a 10% larger share? 20%? These are the questions that perplex the non-Marxists.

The best answer from the best minds of Anglo-American social philosophy is a pretty nasty and unsatisfactory principle called Pareto efficiency. Rather than solving the inequality puzzle, Pareto efficiency justifies an unequal state-of-affairs provided that it does not diminish the well-being of others, including the least advantaged. Because of the theoretical intractability of settling on exactly what constitutes a just distribution of goods and services, modern bourgeois academic philosophers attempt to establish what would be the least objectionable, but unequal state-of-affairs. Nothing demonstrates the theoretical barrenness of Anglo-American social thought than this misguided, impossible task of determining distributive justice once and for all and for all times and places. There is no idealized state-of-affairs that could answer this question. The question itself is misguided.

Rather, in our time, the task of reducing inequality, of advancing distributive justice, is to eliminate exploitation. There can be no ideal, perfect solution to the inequality issue, but there is a way of eliminating the primary cause of indefensible inequality in a capitalist society: end labor exploitation.

Liberals and social democrats have no answer to the rightist challenge that workers today are immeasurably better off under capitalism than they were two hundred years ago. It is certainly true that most workers now live longer, are healthier, and have more free time than did their counterparts two centuries earlier. Marxist theory does not challenge that point. Instead, it asserts that the logic of the capitalist system tends to impoverish working people at all times. Whether capitalism succeeds in suppressing living standards is entirely a different matter. Other factors-- labor fight back, labor shortages, the cheapening of the means of subsistence, etc.-- may buffer, even overwhelm this tendency for a time, but the tendency never disappears.

The tendency towards impoverishment flows logically from the Marxist understanding that labor under capitalism is a commodity like any other commodity. Capitalists buy and sell the labor power of workers just as they do any other factor of production or distribution. And as with any other cost, they seek to pay the lowest possible price for it. Accordingly, the capitalist system, through the cost-cutting actions of individual capitalists (or corporations), is constantly pressuring the compensation of workers downward to levels of mere maintenance-- that is, poverty. The only systemic constraint upon that pressure is the necessity of securing labor in the future.

Therefore, we find in Marxism a basis for understanding (and addressing) inequality and poverty. Thanks to a theory that identifies the two closely related afflictions with specific historically evolved mechanisms and that connects their production and reproduction to economic systems, we can avoid the muddiness and ineffectiveness of the liberal and social democratic approaches. Both mystify the causes, offer a balm instead of a cure, and fail to halt the continuing reproduction of inequality and poverty. Like quacks and faith healers, liberals and social democrats may make the patient more comfortable, but only excising the cancer of capitalism will finally end the suffering.

Zoltan Zigedy

zoltanzigedy@gmail.com