One of my homework assignments was to write an op-ed for The New York Times. For a variety of reasons, the following would never appear in the paper of record’s august pages, not even their Week in Review section. But I enjoyed the dreamy exercise while it lasted…
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George Orwell famously quipped that the language of politics is often deployed to “make lies sound truthful and murder respectable.” The truism is still very much on display in an age when strictures ensuring that employees work longer and harder hours for less pay and benefits are dubbed “Right to Work” laws, or when “small-government conservatives” or “libertarians” continue to support platforms that neither deliver on a smaller government nor imbue the commonwealth with liberty, but do amount to vast transfers of wealth and power from low-income and medium-income earners to speculators and CEOs. One of the most insidious euphemisms is the phrase “free trade agreement,” denoting the event in which political elites meet behind closed doors to muster optimal profits and capital accumulation for finance and industry, largely irrespective of wider concerns about social justice or ecological sustainability. Politicians and journalists, for instance, are touting the US-EU trade talks and the wholly secretive Trans-Pacific Partnership (TPP) as guarantors of jobs and prosperity. This public diplomacy persists just as our most astute observers anticipate yet another round of mandates coercing sovereign nations to gut democratically supported health, environmental, food safety, or community and labor-friendly mechanisms already on the books.
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Doctors Without Borders is worried about Intellectual Property (IP) stipulations in the TPP that will monopolize vital medicines and procedures, hike up prices, and render healthcare unaffordable for millions in the Asia-Pacific region. Similar IP proposals, along the lines of the unpopular Protect Intellectual Property and Stop Online Piracy Acts (PIPA/SOPA), are also being considered. The negotiations are even targeting community-stabilizing enterprises like the Bank of North Dakota (BND), the sole fully public bank in the United States, an institution that only lends wholesale, and the primary cause for that state’s steadfastness in the face of global financial and economic collapse. Despite (or because of) at least 13 U.S states now looking to the BND as a model for protecting their own citizens from similar crises, trade representatives are interested in forcing out such establishments, which they see as obstacles to preferred commercial lending environments. When runs on banks are proving more and more frequent and devastating, thanks to increasingly unstable financialization and hypermobile capital movements, these “free trade” initiatives only bode well for those at the top, while the freedom and purchasing capacities of most people are siphoned off or gambled away.
Given the reality, one would expect quite a backlash, not only to the latest slashing of social investments under the guise of “liberalization,” but to the internationalized financial and production regime in general. Yet as the two Canadian social theorists Leo Panitch and Sam Gindin argue in The Making of Global Capitalism, there are compelling and daunting reasons why this isn’t the case, and those reasons have a lot to do with the “neoliberal” history that preceded our current impasse. When academics, left-liberals, or anti-capitalists talk about neoliberalism, they are usually referring to the period falling between 1973 and the present. For the past four decades, the United States has led the world in tearing down the social democratic edifice of “golden age” capitalism (c. 1948 – 1973), when high wages and benefits, low unemployment, sizable union rolls, robust safety nets and regulatory bureaucracies, numerous government programs, progressive tax codes, and an equitable distribution of wealth and social mobility coincided with impressive growth and innovation. Panitch and Gindin, however, place the origin of neoliberalism in the social democratic heyday, digging up a plethora of forgotten documents as evidence to show for it, like the “monetarist” warnings and actions of the Fed’s chairman from 1950 to 1971, or better yet, the apparent coinage of “neo-liberalism” by Per Jacobsson, whose meaning bore a stark resemblance to its contemporary usage, and going all the way back to 1948, almost a decade before Jacobsson took helm of the International Monetary Fund (IMF). The logic of Reaganism and Thatcherism, by their account, eventuated from the very logic of capitalism, especially the point in the 1970s at which capital accumulation became dependent on the invention and execution of an evermore risky and elaborate network of financial instruments in order to hedge transnational capital movements amid floating exchange rates, and where that point simultaneously demanded the disciplining of labor in order to compete on the newly internationalized and financialized frontier. Consequently, if we seek to escape the neoliberal bind we find ourselves in today, we need to confront capitalism at its root, specifically by democratizing financial institutions and the means of production more broadly.
This may sound like a fool’s errand, or perhaps even a call for a return to the communist tyrannies of yore. If one looks at the twentieth-century narrative that inspires the exhortation, future horizons might well look bleak. Consider the “Treaty of Detroit” in 1950, in which Walter Reuther’s United Auto Workers (UAW) negotiated a benchmark deal with General Motors (GM) that cast aside radical demands for democratic management and ownership for high wages and populist consumption. This compromise, in one form or another, would repeat itself on virtually all industry and labor fronts. In recent decades, however, unions have failed at securing even decent wages. This is due to the overall weakening of unions for sure, but it’s also a product of the fragmentation of the working class. There was the abandonment of the Bretton Woods framework and the gold standard in 1971, skyrocketing oil prices and “stagflation” starting in 1973, the rise of corporate class consciousness and its turn against the Keynesian labor-capital bargain thereafter, and the “Volcker Shock” in 1979, which succeeded in reversing inflation and stabilizing the dollar by breaking labor through double-digit interest rates. The latter led to its intended effect of 24-percent unemployment in the early 1980s.
Such helplessness on the part of workers not only paved the way for Reagan’s sacking of the Professional Air Traffic Controllers Organization (PATCO) strikers in 1981, not to mention subsequent deunionization in toto, but also laid the groundwork for the stripping away of the welfare state. Amid stagnant wages and rapidly declining social programs, workers stopped saving, lived on credit and debt, prayed for the stock market to keep blazing forward for the sake of their pensions, and turned to tax cuts for relief. With the assistance of government subsidies and loans, workers embraced mortgages and home improvement as a last-ditch means toward long-term investment and retirement planning, just as political elites hoped the financialization of such mortgages would fill the role once fulfilled by social programs — a role defined by integrating the majority into the capitalist status quo. This would culminate with the collapse of 2007, as “subprime” mortgage-backed securities precipitated the Wall Street collapse.
If hope for a more humane political economy is to survive, the first question that needs to be asked is whether all of this was inevitable, beginning with Walter Reuther’s accommodation in Detroit. While a confident answer can’t be had one way or the other, it’s worth stating the obvious that the left in the United States has traditionally proven more conservative than its European counterparts in the postwar era. In addition to the labor leadership, most liberals and left-Keynesians in America — like the economist Paul Samuelson (among others) — not only failed to push for sweeping reforms, but they were even willing to cut back on a number of New Deal achievements, particularly concerning financial regulations like interest-rate ceilings on bank deposits. Even when American progressives demonstrated fighting vigor, as they did in the late 1970s with their backing of the Humphrey-Hawkins Equal Opportunity and Full Employment Act, they failed to garner enough of a bloc to stop the bill from being decisively watered down by the time of its passage in October 1978.
Meanwhile, Sweden’s LO union federation strived valiantly (and fatally) to institute the notorious “Meidner Plan,” which would have led to the gradual full worker-ownership of the country’s major private firms. The Germans succeeded in certain worker investment planning efforts, as well as “co-determination” in management. The French “Programme Commune” resulted in bank nationalization and worker control of large industry. And the British Labour Party waged a similarly radical agenda before Thatcher put a kibosh on the whole thing. On the one hand, it’s plausible to conclude the march to neoliberal austerity was preordained. On the other hand, it’s not too unreasonable to fathom a scenario in which the American left thought and acted more ambitiously, as well as worked more in concert with its European comrades, thus leading to more just and equal outcomes for everyone.
Granting the latter possibility some imaginative leeway, the second question then becomes whether the left can get another shot at the negotiating table, and that being so, if anything like aggressive demands for full employment, workplace democracy, and the democratization of finance can then be put forth. This might strike the reader as a ludicrous hypothetical given the state of American labor and the international left. But the successes of the “Pink Tide” in Latin America, especially the joint efforts of the late Hugo Chávez and Lula da Silva to effectively block free trade agreements in the region as well as fend off other offensives from its north, offer some measure of hope for the possibilities of solidarity and resistance in the wake of gross injustice. (Chávez’s record, of course, also offers warnings.) In Latin America, it took two decades of raw capitalism, constituted by extreme wage stagnation and disastrous poverty — as well as a good dose of U.S.-sponsored terror — before the left finally managed to arrive at a place of real and sustained strength. As the United States approaches concentrations of wealth and power of medieval magnitude, the emergence of a resurgent opposition of our own is not entirely out of the realm of feasibility.
Since the Occupy protests erupted in the fall of 2011, an array of radical developments and discussions have ensued, both in the United States and abroad. New left-wing magazines like Jacobin Magazine have not only been born but also mainstream liberals like the MSNBC primetime commentator Chris Hayes regularly read it, as well as invite its editors and contributors on their shows and web venues. Substantive financial regulations like the Tobin Tax are back in the public conversation, as well as talk about full employment, a basic income, shorter workweeks, and other arrangements that would allow for decent work and less work. Perhaps most promising, the United Nations delegated 2012 “The year of the Cooperative” and encouraged all nation-states to work together in subsidizing and bolstering worker ownership and management. The United Steelworkers (USW) recently signed a framework agreement with the Mondragon Corporation, a thriving and extensive collection of worker cooperatives in the Basque region of Spain. The USW plans to emulate Mondragon’s model, as well as already flourishing producer cooperatives in the United States like the Evergreen Cooperatives in Cleveland, Ohio. Employee Stock Ownership Plan (ESOP) companies like Southwest Airlines, majority employee-owned companies like the Hy-Vee supermarket chain, and democratic corporations and consumers’ cooperatives like Recreational Equipment Inc. (REI) are growing more omnipresent by the day. There is also a notable ascendance in community development corporations (CDCs), land trusts, B-Corp companies, and other social enterprises.
In isolation, none of these realities will be enough to turn the tide. But together, they hint at a more democratic world. They also establish the preliminary groundwork from which all-encompassing transformations (like the Meidner Plan) can take hold. Perhaps Francis Fukuyama’s end of history is self-evident, or Margaret Thatcher is right and there is no alternative. Or perhaps such conclusions mark a collective narcissism of epochal proportion — history never ends, and new alternatives are always for the taking. Perhaps there really is something better beyond the ken of our present woes. And perhaps it’s up to us to test the proposition.
Image may be NSFW.
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