May 1, 1987
It is, without a doubt, the worst of times. A low, dishonest, heartless, ignorant, fanatical, secretive, vindictive, bloody-minded Administration has left its stamp on the decade. We can all supply epithets.
Robert Lekachman, in “Visions and Nightmares”, supplies statistics. In 1984, thanks to stricter eligibility requirements, 23.5 million Americans below or just above the poverty line got no food stamps. From 1982 to 1985, more than $12 billion was cut from the food stamp and child nutrition programs. In 1983, 18.6 million adults had no health insurance. Roughly 12 million people below the poverty line were ineligible for Medicaid. During the first Reagan Administration, infant mortality rates rose for the first time in American history; the poverty rate exceeded 15 per cent, another first.
Michael Harrington, in “The Next Left”, chimes in. Between 1980 and 1984, as a result of the Reagan tax cuts, the bottom 20 per cent of the population suffered a 7.6 per cent drop in disposable income, while the top 20 per cent enjoyed an 8.7 per cent rise. Households with incomes of $80,000 a year or more gained $55 billion in tax benefits, while those with $10,000 or less lost $17 billion in increased payroll taxes and reduced social programs.
A familiar litany, perhaps. Consider, then, some more obscure but equally invidious facts. The Reagan Administration has issued a stream of executive orders and legislative proposals designed to get the American people off the back of their government. One attempted to wrest control of regulatory agencies from Congress by largely re moving the rule-making process from public scrutiny. Another authorized the CIA, for the first time, to collect “foreign intelligence” inside the United States. Another proposed a huge expansion of the classification system. Another allowed the reclassification of previously declassified information. Another required that all federal employees who have had access, however brief, to classified information, submit for government censorship virtually everything they write about public affairs for the rest of their lives. The Freedom of Information Act was declared too costly to implement and nearly gutted before Congress forced a retreat. Scientists were warned against publishing technical data, especially if critical of new and expensive weapons systems, with out prior governmental review. The flow of publications from the Government Printing Office—an invaluable aid to judging the effect of federal policies—was cut to a trickle; this not only saved a few million dollars but incidentally helped conceal the Administration’s massive subversion of the welfare, civil rights, environmental protection, and occupational safety laws. It all adds up, says the American Civil Liberties Union, to a “systematic assault on the concept of government accountability and deterrence of illegal government conduct.”
This is the Reagan Counterrevolution: a long march through the political landscape, a determined effort to roll back every institutional expression in our history of a humane or libertarian impulse. Its cadre are nabobs (30 of the 100 highest officials in the first Reagan Administration were millionaires) and hustlers (more than 40 high officials have been indicted or resigned under a cloud since 1981). Its judicial appointees are frequently bigots or ignoramuses, preferably young enough to enjoy a long tenure. Its business allies are white-collar criminals: 46 of the 100 largest defense contractors are currently being investigated for fraud. And it is presided over by someone who…No; whereof one cannot speak, thereof one must defer to “Washingtoon.”
But a counterrevolution is not a coup. America did not go right in the night. Serious political criticism must begin by asking why our society was vulnerable to a disaster of this magnitude. What made Reaganism possible? Part of the answer, as Thomas Ferguson and Joel Rogers argued recently in “Right Turn”, is that changes in the world economy have forced a temporary alliance between America’s business elites to scuttle the New Deal. Another piece of the answer was supplied by Thomas Edsall’s “The New Politics of Inequality”, which showed how those elites perfected the techniques of converting money into domestic political power and vice versa.
There’s one piece left. In substance, Reaganism is an assault on traditional democratic values; it is profoundly anti-American. But in tone, it is echt-American. Reaganism may not (as Ferguson and Rogers persuasively suggest) have broad and deep popular support. Neither has it generated mass popular resistance. Its rhetoric has kept expertly to the limits of the American political imagination, and its reward is apparently unassailable ideological legitimacy.
What are those limits? What are the contours, the deep structures, of the American political imagination? These are radical questions—they go to the root of political legitimacy in this as in every other society. In “Socialism and America”, Irving Howe urged that “to recognize the power of the American myth…is simply to recognize a crucial fact in our history—and one that seems to me at least as decisive for the fate of socialism in this country as the material conditions that are usually cited.” The Horatio Alger hero, the City on a Hill, the barn-raising, the welfare Cadillac, the pointy-headed bureaucrat, the wily foreigner—these and other powerful symbols, and the narratives that embody them, dominate the American unconscious. When adroitly deployed by master mythologists and Great Communicators, they drive public policy, relegating fact, analysis, and principle to a secondary role in political argument. They even influence our choice of theories. As radicals have been demonstrating for much of this century, the mathematics of free-market economics is bosh. But it remains academically respectable, and the related notion of competitive individualism remains, by and large, our reigning social-psychological paradigm. Without engaging the mythic roots of this ideological consensus, the left may well remain marginal to American politics. That the Reaganauts’ relation to American political mythology is appallingly shallow and manipulative should not discourage more honest efforts by radicals to learn and speak the language of America’s political unconscious.
Robert Reich is not a radical. He is a professor at Harvard’s Kennedy School of Government, a former director of policy planning at the Federal Trade Commission, and an advisor to Gary Hart. But “Tales of a New America” aims to nudge the polity in roughly the same direction that radicals have been trying to. It is an elegantly written exposition and critique of contemporary American political mythology and a fervent plea for a new one. Taken together with Reich’s earlier work, it may help open a few fissures in the ideological hegemony of the “free market” and competitive individualism. And that can’t be bad.
In his much-discussed book “The Next American Frontier” (1983), Reich described a sea change in the global political economy. He traced the rise of mass production and its associated management techniques, and showed that they grew out of a particular relationship between the civic sphere and the business sphere, a relationship that characterized Anglo-American but not European or Japanese society. Because England and America industrialized early and escaped the worst effects of the two world wars, the state had less to do with economic development there. In continental Europe and Japan, planning ministries and central banks were more involved, coordinating investment, financing research, developing long-range industrial strategy. As the world economy became more integrated and competitive in the 1960s and ‘70s, rapid innovation became crucial to national economic health. But innovation has costs; some people always stand to lose. Those people will naturally try to block change. What was needed were social compacts about the distribution of costs and benefits. Where the state could broker such compacts, the result was adaptation; where it could not, the result was competitive decline.
Standardized, high-volume, (comparatively) high-wage, unionized production had been the basis of American, and formerly British, economic dominance. That era, Reich argued, is over. Lower transportation and communication costs, along with automated manufacturing facilities, mean more production overseas, in low-wage countries. For developed countries, this means one of two things: either a drastic decline in living standards, or a move into innovative, high-value—i.e., precision-engineered, customized, technology-driven—production. Reich called this new mode of production “flexible specialization.” “The Next American Frontier” was written to explain why such a shift is necessary. “Tales of a New America” was written to explain why it will be, at least in the United States, extremely difficult to achieve.
It will be difficult because the new mode of production entails giving up the ideal of competitive individualism. Flexible specialization rests, above all, on the practice of interdependence. Domestically and internationally, maintaining high productivity requires a culture of innovation, which requires a skilled and engaged workforce, which requires continuous and expensive retraining, which requires long-term employee loyalty, which requires security and equity for workers. In short, economic efficiency now requires social, even global, solidarity. And that goes deeply against the American grain.
Reich’s account of American political mythology takes shape around four “morality tales,” each of which comes in a liberal and a conservative version. “The Mob at the Gates” tells of American innocence in a barbarous world, of American virtue contrasted with sinister foreign regimes or ideologies. Liberals stress our obligations to the victims of tyranny, conservatives the threat of relentless enemies and their ubiquitous agents. “The Triumphant Individual” divides the world into the “can-do” and “can’t-do,” into entrepreneurs and drones. With their energy, imagination, and greed, entrepreneurs enrich us all by enriching themselves. Conservatives propose giving entrepreneurs free rein; liberals call for sharing the wealth and for protecting the drones against the entrepreneurs’ occasionally Faustian ambitions. “The Benevolent Community” is about Americans’ essential generosity and compassion, reflected in social- welfare programs, which conservatives portray as an amiable but ineffective indulgence and liberals as a signal national achievement. “The Rot at the Top” is about the malevolence of powerful elites, public or private.
Skillfully, Reich shows how variants and permutations of these tales crop up again and again in American history, setting the terms of political debate. Know-Nothingism, isolationism, and interventionism are a spectrum of responses, defensive and aggressive, to the Mob at the Gates. Populism and the New Deal, though of very different inspiration, each appealed to the sentiment of Benevolent Community. Revolutionary agitation against the English Crown, Andrew Jackson’s battles with the central banks, the Progressives’ opposition to the trusts, Franklin Roosevelt’s scorn for “economic royalists,” all tried to mobilize popular resentment against the Rot at the Top.
Ronald Reagan’s play with these themes has been masterly, from the Evil Empire and the Sandinista “trouble in our back yard” to the celebration of entrepreneurial virtue to the New Federalism and its accompanying exaltation of neighborhood and volunteerism to the incessant sniping at Congress, the regulatory agencies, and the Supreme Court. Though outclassed, the Democrats have played, too, portraying the low-wage foreign hordes as a Mob at the Gates justifying economic protectionism. And Mario Cuomo propelled himself into the limelight with his “we are family” speech, an inspired gambit on the Benevolent Community.
But like modes of production, mythologies have a life cycle. What’s basic to all the traditional tales is a distinction, however drawn, between winners and losers, “us” and “them.” This, Reich claims, makes them obsolescent. New tales are needed that will incorporate a more complex view of “the ecology of the world economy” and “enlarge the sphere of ‘us.’” “Tales of a New America” undertakes to provide them. They include “The Boomerang Principle,” about the inevitability of unintended effects; “The Collective Entrepreneur,” about the institutionalization of innovation; “The Fable of the Fisherman (Revised),” about the economic wisdom of investing in “human capital”; and most arrestingly, “The General Theory of Gridlock.” In this last, Reich draws together all the strands of his argument to demonstrate that, in a highly mobile, anonymous society, the general practice of opportunistic individualism — perfectly rational by the logic of laissez faire—inexorably results in social decay, and eventual stasis. “Employees who abandon a firm after gaining valuable experience, managers who abandon suppliers and employees after gaining concessions, suppliers who walk away from burdensome contracts, managers who feather their nests at shareholders’ expense—all must live with the long-term consequences of their onetime gains. But these consequences may be more than balanced by the onetime gains of exploitation…Reputations, like unpaid bills, often cannot keep up with those who move quickly.” “Interdependence” may at first sound like a vague and pious notion. But as Reich spins his tale of anomie, all that is seemingly solid about our $3 trillion economy melts into air; almost despite the ever- upbeat author, a very plausible vision of catastrophe begins to hover over his pages. The “systematic erosion of trust” joins the falling rate of profit, a second horseman of the capitalist apocalypse.
Reich’s prescription for the New Age of Global Interdependence is, unsurprisingly, a version of “industrial policy”: increased coordination of our international economic and monetary policy with the other developed nations; a Marshall Plan for the Third World; generous retraining and relocation subsidies for laid-off workers in declining industries; tax incentives to direct research and development toward commercially promising technologies; nonpunitive work-fare; and deregulation coupled with increased government attention to “market design,” e.g., through pollution permits. Actually, though, there are some surprises: he also advocates national health and disability insurance, employee ownership and control of firms, and breaking up the ghettos by dispersing small clusters of low-income housing in higher-income neighborhoods. These are, in Reich’s circles, fairly radical suggestions. The cover of “The Next American Frontier” featured ringing endorsements from both Walter Mondale and Gary Hart, and Reich is considered a likely member of the next Democratic Cabinet. But the man is clearly no run-of-the-mill Kennedy School timeserver.
Still, leftists will ask: Are Reich’s tales finally just neoliberal fairy tales? If one subscribes to a Marxist or neo-Marxist theory of the business cycle (as I do, at least on Mondays, Wednesdays, and Fridays), then Reich’s rosy win-win scenario of ever-ascending worldwide productivity and prosperity seems a bit dubious. There is scant mention in his book of the international debt crisis, which by itself threatens global economic collapse. In other versions, less decent and generous than Reich’s, “industrial policy” turns out to be a recipe for managing austerity and defusing challenges to corporate power. Is even the best of this sort of thing anything to be grateful for?
Yes, in a way. Ideological hegemony cannot be dissolved at a stroke. In the “Prison Notebooks”, Antonio Gramsci wrote: “Immediate economic crises do not of themselves produce fundamental historical change; they simply create a terrain more favorable to the dissemination of certain modes of thought, and certain ways of posing and resolving questions.” Gramsci was hampered by censorship. To speak more plainly: severe economic crisis is bound to lead to increased collectivism. It may be authoritarian, national-chauvinist collectivism or egalitarian, participatory collectivism, depending on whether questions of power are explicit or submerged. But such questions do not become explicit in a political culture all at ____ . They do so gradually, as traditional superstitions and habits of deference are eroded. It is only after the myths of the “free market,” competitive individualism, and national independence lose their hold over most Americans that the ideals of democratic socialism will become intelligible. The neoliberals, like their spiritual ancestors, the Benthamites and the Progressives, are a great help in this secular process of demystification. Elitist middle-class reformers all, they nonetheless clear the ground of traditionalist weeds, preparing it for the seeds of socialist solidarity.
Robert Lekachman, a left-liberal economist and frequent “Nation”/ “Dissent” contributor, doesn’t see it quite that way. “Visions and Nightmares” contains a witty riff on the imagined aftermath of a Hart victory in 1988, complete with anticipated fulminations from Norman Podhoretz and “The Wall Street Journal”. But for all his amusement over the reversal of neoconservative fortune (and despite some grudgingly respectful words for Robert Reich), Lekachman concludes that neoliberalism, with its lingering fondness for markets and its lack of old-fashioned passion for social justice, “perpetuates Reaganomics by other means.”
No one is more entitled to fault other writers for insufficiently militant opposition to Reaganomics than Lekachman. With “Greed Is Not Enough” (1982) and “Visions and Nightmares”, he has established himself as its preeminent chronicler. Patiently, thoroughly, often with a desperate sarcasm that is inevitably unequal to the horrors and idiocies he is recounting, “Lekachman” marshals the data on inequality, deregulation, deunionization, militarization, the privatization of public services, and sundry other aspects of economic and social policy in the ‘80s. It is a dreary but necessary chore.
Yet although Lekachman debunks Reaganomic propaganda with verve, he is notably diffident about his own program. The final chapter of “Visions and Nightmares” is entitled, wistfully, “The Secular Left: Hope or Fantasy?” There is not much hope in it. Apart from a few kind words for Mario Cuomo, rendered nugatory within days of the book’s publication, there is only this remarkable reversal: “I may have been unnecessarily harsh in earlier comments on the confusions of industrial policy…Under the tent of industrial policy, many liberal and some radical aspirations find shelter, among them more effective public control of the enormous corporate beasts that thrash about in the jungles of free enterprise, humanization of factories and offices, profit-sharing and approaches to Japanese employment guarantees, improvement and rationalization of social programs, and diminished inequity in the distribution of income, wealth, and power.” Having taken the full measure of Reaganomics’ fearful toll, Lekachman is understandably disposed to compromise with almost any of its enemies. (He draws the line at Felix Rohatyn.)
Michael Harrington is anything but diffident. His new book begins: “The Western Left will confront the possibility of political power within the next five years, and perhaps sooner rather than later.” As our leading contemporary socialist prophet, Harrington is, of course, also something of a preacher, and so a measure of skepticism is in order. In fact, it quickly becomes clear that his thumping certainties boil down to this: Reaganism’s days are numbered. Still, even that more modest claim makes an excellent text for a socialist sermon.
“The Next Left” is less elegant and original than “Tales of a New America” and less richly documented than “Visions and Nightmares”. But it’s a useful book, the latest in a series of analytic/programmatic manifestos that Harrington has been issuing at fairly regular intervals over the last two decades, including “Towards a Democratic Left” (1968), “The Twilight of Capitalism” (1976), and “Decade of Decision” (1980). Though it may be difficult for some of his readers to rouse themselves for yet another variation on his familiar themes, that is hardly Harrington’s fault. He’s been right all along.
Unlike Robert Reich, Harrington is not a likely member of the next Democratic Cabinet, and is therefore at liberty to raise the embarrassing subject of class conflict. Richard Nixon admitted that the point of his brief experiment with wage and price controls was to “zap labor.” Harrington demonstrates at length that the point of Ronald Reagan’s entire economic program, supply-side mummery notwithstanding, has been to zap the bottom third of the population. In itself, this charge isn’t novel; but Harrington situates his moral criticisms of Reaganomics in a cogent analysis of its origins.
At the outset of this century, mainstream economic theory and practice were minimalist and laissez faire. But the economy was notoriously unstable, subject to frequent recessions, depressions, and stock market collapses. Intuitively, Henry Ford grasped the principle of stability of a mature capitalism, articulated theoretically by Keynes: that “mass production demands mass consumption of a new kind.” Steady, predictable demand for the new, mass-produced consumer goods—radios, phonographs, automobiles—was essential to economic expansion. This meant high wages and job security in exchange for increased productivity and labor discipline. Harrington, borrowing a term of Gramsci’s, calls this implicit social compact “Fordism.”
Fordism required the voluntary cooperation of business as a whole; but as Harrington notes, “it is, to put it mildly, difficult to achieve a consensus within a class in which everyone is competing with every one else.” When the Great Depression struck, voluntary cooperation could not produce the necessary response, a nation wide “socialization of consumption.” That was the work of the New Deal: above all, the Social Security Act and the collective bar gaining provisions of the Wagner Act. Fordism was institutionalized.
It flourished for three decades after World War II, and then faltered, giving way to the present economic interregnum. Harrington’s treatment of this complex evolution is highly compressed. Oil-price “shocks” and the explosion of corporate debt are part of the picture. But the main thread of Harrington’s explanation is remarkably similar to the thesis of “The Next American Frontier”: “Henry Ford’s assembly-line revolution lost its momentum as it was standardized throughout the entire economy at the same time that computerized controls introduced radically new methods. As a result, the mass-production of huge batches of identical goods made by fixed-purpose machines run by semiskilled workers started to lose its dominant position.” Within the limits of capitalism, this threat to corporate profits could be met in one of two ways: “flexible specialization” and social solidarity, a la Reich; or “paper entrepreneurialism” (i.e., financial manipulation) and class war (i.e., inegalitarian tax cuts and an attack on the “social wage” in the form of lower expenditures for unemployment insurance, education, health care, etc.). The Reaganites chose class war and, as Lekachman documents in heartbreaking detail, have won in a rout.
Reich deplores this choice, politely; Harrington, scathingly. But their criticisms are strikingly congruent. Both are out to debunk the same pernicious fallacies: that excessive social spending has dried up investment capital; that labor unions and federal regulations are responsible for lowered productivity, that lavish welfare benefits have produced a culture of poverty, that greedy Arabs and devious Asians are the cause of our economic troubles. But while Harrington dynamites these notions, trumpeting their class origins, Reich dissects them, exposing their mythic origins. Harrington is engaged in ideological warfare, Reich in ideological therapy.
Their recommendations are also—up to a point—congruent. Harrington approvingly quotes Lester Thurow: “Soft productivity [motivation, cooperation, teamwork] is an untapped productivity vein of gold.” This insight is central to Reich’s version of industrial policy. Both Harrington and Reich advocate employee ownership and control of firms; worker participation in the design of technology; elimination of wasteful tax subsidies to business; a national health system; large-scale transfer of money and technology to the Third World. Some of Harrington’s proposals are more radical: reduction of the 40-hour workweek as a means of full employment, and federal funding of worker, consumer, and community groups that want to fight public or private bureaucracies. And Harrington does not conceal the transitional nature of his program; his “next Left” in power, for all its constraints, is envisioned as a way station on the road to socialism. Still, there’s considerable common ground.
This convergence will not please every one. Harrington’s perennial attempt to formulate a “politics of the next step” is perennially controversial on the left. Some of his opponents have even reacted with unseemly satisfaction to François Mitterrand’s failure to implement a program resembling that of The Next Left. Harrington devotes a long, scrupulously fair chapter to examining the fate of the French Socialist regime. He makes a strong case that Mitterrand was steamrollered by the unexpected contraction of the world economy in the wake of the 1982 American recession. The French experience did not prove, he argues, that “socialism in one country” is impossible. It may indeed be possible—though only in the United States. At any rate, the French Socialists made irreversible gains in establishing greater income equality and legitimizing the idea of decent social provision. The CERES technocrats who now have the upper hand in the French Socialist Party may sound more like Robert Reich and Lester Thurow than like Gramsci or even Eugene Debs. But they appear to have nudged their society (at least domestically; Mitterrand’s foreign policy is another matter) a few inches toward the light.
Can it happen here? And if it did, would the left cheer or jeer? American neoliberals and leftists have had some hard words for each other in recent years, as out-groups will. Heaven forfend that anyone pull any punches; but perhaps both sides should keep in mind that in the present debased state of the polity, rationality and decency are welcome in any measure. As Harrington correctly observes, the Reaganite assault is determinedly institutionalizing itself, and threatens to eliminate all possibilities of humane social reconstruction for a generation or more. Faced with this prospect, perhaps leftists can bring themselves to admit that half a moral imagination is better than none, and that enlightened elitists are better than benighted ones. Surely no sensible socialist can approach the 1988 election thinking: “Let the Republicans reap the whirlwind. After the Republicans, us!” We have made that mistake before.
Reform or revolution: this debate is as old as the left. It may be resolved eventually by a global economic collapse that will leave capitalism unreformable (and the earth in radioactive ashes). Or it may be that the capitalist world will settle into an indefinitely long phase of authoritarian austerity, which only a revolution can disrupt. But for the present, Harrington’s emphasis on the “politics of the next step” seems plausible and honorable to me.
A century ago another Irishman, also a renowned socialist preacher, put the moral case for reformism about as well as possible. In “The Transition to Social Democracy,” the last of the “Fabian Essays”, Shaw laid out “the humdrum programme of the practical Social Democrat today”—just what Harrington has been doing for decades. But then:
“Let me, in conclusion, disavow all admiration for this inevitable, but sordid, slow, reluctant, cowardly path to justice. I venture to claim your respect for those enthusiasts who still refuse to believe that millions of their fellow creatures must be left to sweat and suffer in hopeless toil and degradation, whilst parliaments and vestries grudgingly muddle and grope towards paltry installments of betterment. The right is so clear, the wrong so intolerable, the gospel so convincing, that it seems to them that it must be possible to enlist the whole body of workers —soldiers, policemen, and all—under the banner of brotherhood and equality; and at one great stroke to set Justice on her rightful throne. Unfortunately, such an army of light is no more to be gathered from the human product of nineteenth century civilization than grapes are to be gathered I from thistles. But if we feel glad of that impossibility; if we feel relieved that the change is to be slow enough to avert personal risk to ourselves; if we feel anything less than acute disappointment and bitter humiliation at the discovery that there is yet between us and the promised land a wilderness in which many must perish miserably of want and despair: then I submit to you that our institutions have corrupted us to the most dastardly degree of selfishness.”
A self-confident radicalism will see in all these muddled gropings and “paltry installments of betterment” a molecular transformation of the old order. We know—Marx said so—that no social order disappears before all its material, productive forces have exhausted their possibilities of development. The same is true of moral forces, i.e., ideologies. The efforts of both neoliberals and social democrats to rationalize or humanize capitalism will eventually be exhausted. But meanwhile they’re indispensable. Nature makes no leaps, and neither can we.