Faux leftists wish to ignore social and climate reality because it would mean sharing some of the crumbs that the 1 percent throw their way.
Dean Baker is a Senior Economist at the Center for Economic and Policy Research (CEPR)
Cross-posted from the CEPR Blog
I was very disappointed with Ezra Klein’s NYT interview with Bhaskar Sunkara, in large part because I have a high opinion of Sunkara, the founder of Jacobin and now the president of The Nation. My main disappointment stems from his non-answer to one of the main questions raised by Klein.
Klein asked why the Democrats, and other liberal/left parties around the world, rely largely on more educated people for their support, while more working-class types have turned to the right. Socialists had historically envisioned socialism as the agenda of the working class, not college-educated professionals.
Sunkara gave an answer that put the blame on the decline in unions, which is undoubtedly a big part of the story. But the answer clearly goes beyond this.
Liberal/left parties around the world in recent decades, have not only often supported policies that weakened unions, but they have also supported policies that directly redistribute money from the traditional working class to people with more education, you know, the ones carrying the flame of socialism.
My favorite example here is government-granted patent and copyright monopolies. As I have pointed out endlessly, hundreds of billions of dollars annually, quite possibly over a trillion (5 percent of GDP, more than the military budget), are transferred from the public as a whole, to the people in a position to benefit from these monopolies.
If not for these government-granted monopolies, Bill Gates would likely still be working for a living. But the beneficiaries go far beyond the very rich. The labor of millions of people, with education in a wide variety of areas, is made far more valuable because of these monopolies, which have been made longer and stronger in the last four decades.
Since intellectuals thrive on making really silly arguments, let me be clear. I am sure that almost no working-class type decides they will not support the Democrats in the United States, or Socialists in France, or Social Democrats in Germany because these parties support patent and copyright monopolies.
Their reason for opposing these parties is that they see lots of people who have benefitted from the way the economy has been restructured over the last four decades, and they know that they have been losers in that deal. It is not surprising that they would not like the people who have benefitted from upward redistribution at their expense, even if they have very little understanding of the processes involved.
As I have pointed out in Rigged [it’s free], the policies causing upward redistribution go beyond just patent and copyright monopolies. The concept of “free trade” has become a sacred cause for many of these left-liberal parties, but this concept almost never extends to the work of highly paid professionals like doctors, dentists, and lawyers. While they view it as very important to drive down the pay of autoworkers by making it as easy as possible to import cars and parts from countries with low-paid manufacturing workers, there is very little interest in removing the barriers that prevent qualified doctors from India or Mexico from working in the United States.
Most of these left-liberal parties have acquiesced in, if not actively supported, the growth of a bloated financial sector that is a massive drag on the productive economy. To be clear, we need a financial sector to facilitate transactions and to allocate capital, but when the size of this sector increases five-fold relative to the rest of the economy, without any obvious improvement in services (are your investments more secure today than they were in 1970?), that is waste. And, the beneficiaries of this waste are overwhelmingly more educated people who land plush jobs in the financial sector.
I can go on with more policies (how big would Facebook be without Section 230 protection?, what market mechanism limits the pay of CEOs and other top executives?) that have had the effect of redistributing income from working-class types to college-educated people in recent decades, but the point should be clear. College-educated people have benefited from a wide range of policies that have taken money from the working class.
Incredibly, Sunkara seems to have zero appreciation of this fact. He wants to redistribute through social democratic tax and transfer policies, which is great, but the working class would not be wrong to think that this looks like pie in the sky. We have not seen great progress in advancing the welfare state in the last four decades, especially in the United States.
Marx very explicitly looked at how income was distributed in the production process. He got many things wrong, but I thought this was an approach that most self-described socialists still followed. Apparently, that is not the case, and that is a big disappointment.
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The history is clear. Parties with worker constituencies have willingly acquiesced in – or promoted – the present rentier economy. The question is why.
Until we find the reason it is rather pointless to find a remedy. The remedy will likely fail.
I believe that the strategy Labor parties (and kindred) chose more than a hundred years ago ultimately had to lead this way. A government must always find compromises between the vectors in society. It must always make compromises between those who vie for power. And all labor parties chose to struggle for becoming the government – and had in the process to demobilize its own base. Because otherwise other power contenders wouldn’t let them become government.
And with their own base demobilized they hadn’t any negociating power left.
According to Bureau of Labor Stats (May 2021), median annual wages for auto mechanics and technicians is about $47,000. a Northeastern University blog listing median income by education level, put median income for someone with a Bachelors degree at about $64,000 (2020). The point is that many college educated persons are working class, whether looked at from point of income or relation to means of production. Liberals and social democrats have willfully lost sight of this, and have pretended to pursue the interests of an amorphous “middle class” through identity politics. Social democracy was established after a significant post wars struggle, when ruling capitalist classes were weak and discredited and a broad section of society, including intellectuals, considered themselves, as they should, to be working people. In Sweden, for example, the name Red Med School at Umea University was no joke.