Friday, May 2, 2008

Divided We Stand - United We Fall?

In the history of the world, there is one issue, if it can be called an issue, which has always dominated politics: self-interest. This, of course, makes sense on a basic human level, as there are not many people who would say that they would not want the best situation possible for themselves and their families. Whether that self-interest has been expressed by a single despot, a privileged few, or unprivileged masses, the psychological mechanisms behind the issue are the same.

We live in a world of limited resources, and the distribution of those resources has always taken a central place in politics. In very few places in the world do money and consumption play a bigger role than in the United States. In this country, the achievement of tangible material wealth is central to the way of life, and the goal is to accumulate as much wealth as possible. With this in mind, it would make perfect sense for the American political stage to be set for a fierce struggle for economic resources between different groups belonging to different echelons of society. One would expect those who have little to demand more, and those who have a lot to demand yet more. The long-standing enigma in the eyes of the rest of the western world is that, in essence, only the latter is true in American society. The picture becomes even more complex and perplexing from a logical point of view the deeper one digs into American political life. I will describe four processes and political characters in the political life of this country; one which is not uncommon in the industrialized world, one which is rather rare and two which are quite unique to the United States. I will start by discussing those who are well off.

Those who have a lot, and demand yet more resources

The essence of conservatism is the strive to preserve an order which benefits the proponents of conservatism. A conservative perceives him- or herself to be part of a privileged group, and hence does not want that arrangement to be altered. Philosophically speaking, conservatism is not an ideology as much as it is the lack of an ideology, because it does not really aspire to achieve anything. By the same token, pure capitalism is not an economic system, as much as it is the absence of such a system. The purest capitalist society imaginable is probably a stone-age society.

It is natural for humans to aspire to achieve greater things, even if they have already achieved plenty. A privileged member of society is just as likely (or maybe more likely?) to try to improve his or her situation as the unprivileged member is, due to basic human psychological functions. The income distribution in the United States is very unequal as compared to the rest of the industrialized world. A few very clear trends can be ascertained in the recent economic history of the United States. Prior to the Great Depression, the income distribution was unequal in the United States, as it was in most of the industrializing world at the time. The industrializing world consisted largely of traditional class-societies. After the New Deal, the income disparities shrunk, and continued to shrink for a few decades. The Reagan era started the reversal of this trend, and that continued to the point where the reversal was almost complete by the end of George W. Bush’s second term. In essence, the United States, at the present day, has a socio-economic climate that is very similar to that which existed prior to the 1920:s.

The Reagan-era’s policies were as clear as could be imagined when it comes to a conservative economic vision: taxes were simultaneously lowered for high-income earners and raised for low-income earners. With the election of Reagan, American conservatism entered a new and much more successful era. The wealthy demanded more resources through Reagan, and that’s what they got. The legacy of Reagan was then carried on by Bush Sr., Bill Clinton and Bush Jr., in their individual ways. Often, a political reform of an economic nature takes at least 20 years to work its way through the system. It is hence not surprising that we can see effects of the Reagan-era policies even today. This process may not always have had to do with simple mathematics such as tax policies, but it has included many things, such as deregulation, school policies and changes to the healthcare system. To sum up this section: the United States has now come full circle and is back to where it was before an advanced planning of society in economic terms was started. Wealthy people in the United States are currently lobbying for a permanent status of the Bush Jr. tax cuts, and American conservatism does not appear to be changing economic paths, away from the Reagan legacy.

From a perspective of rational self-interest, wealthy people should be conservative. In most countries this is largely true. However, in the United States there are more examples of people who are wealthy, but not conservative, than in most other industrialized countries. It is to these people that I will now turn my attention.

Those who have a lot, but demand more for those who have less

In the United States, the term “liberal” has a meaning which is different from the rest of the world. In Europe the term describes a set of values that are the “cousins” of conservatism, whereas in the United States it refers to a set of values that include things such as (some) social consciousness, anti-racism and a role of the government which is large by American standards, but small by European standards. Since there are only two viable political parties in the United States, both of which must be considered to be on the right side of the traditional political spectrum, American liberals perceive themselves to be on the “left” (when in fact they are only on the left in relative terms). The left has traditionally attracted two distinct groups of society:

1. low-income earners who have a self-interest in leftist policies, and

2. intellectuals who have an academic interest in the policies.

In the United States, however, there is a third category which is not very common anymore in the rest of the industrialized world: the so called “limousine liberal”.

The limousine liberal is a wealthy person who is not necessarily an intellectual. These people support the Democratic Party and are often involved in different types of charity. They appear to have great similarities with people from the early charity movements in the Anglo-Saxon countries in the 1800:s. At that time, housewives of wealthy men would engage in charity for the poor (and other things such as animal rights), while maintaining a high standard of living themselves. Participation and monetary contribution was completely voluntary. Today, the United States does not have a social safety net in the true sense of the word, and relies heavily on charities for most social services to the poor. Again, this is essentially the same system, or lack thereof, as the one that was in place about 100 years ago in most of the industrialized world.

Out of the compassion expressed through the charity movements, came much inspiration for more comprehensive, tax-based, social services advocated by labor movements a few decades later. As such services have been rolled back in the United States, limousine liberals have made their comeback (although they were obviously not called limousine liberals in the 1800:s). There is, in other words, a great need for food, clothes and other things among the poor in the United States, and by necessity, charities are providing that. Any organization has intrinsic in itself the desire to continue to exist. Therefore, even if a charity organization believes that a tax-based system of social services would be better for the poor, it will probably not voice that, in the interest of self-preservation.

However, the limousine liberal usually supports a greater allocation of resources towards the poor, even if that can contrast with the interests of the charities. In most cases, the limousine liberal subscribes to notions of humans as rational economic beings. For example: a tax credit of 1,000 dollars is (in the eyes of the limousine liberal) just as good as giving an individual free access to 1,000 dollars worth of healthcare, at a time when that individual needs healthcare, because the rational thing to do is obviously to spend that tax credit on healthcare. Rather than suggesting the provision of services by the state to the lower echelons of society, the limousine liberal prefers to advocate for the poor, things such as: lower taxes, tax breaks, lower tuition, home ownership facilitation and a variety of other minor financial incentives.

So, the limousine liberal supports giving more to those who have less, but only in certain circumstances. Has this been successful in the eyes of the poor in recent American economic history? The short answer is “no”. The poor have a situation today that is almost as bad as when the charity movement started, which is why this movement has come back in this new incarnation.

So, the situation for poor people in the United States is obviously rather bad at the moment, but are these poor people doing anything about it?

Those who have little do not demand more for themselves

From a rational point of view, those who do not have enough resources should be the ones to most vigorously demand more of those resources. As I have mentioned before, this is not the case in the United States. There are a few different types of low-income groups in the United States.

To be clear, these low-income groups will inevitably face dire challenges at different times in their lifetimes because of the lack of a social safety net, and the overall lack of collective solutions. Large medical bills is at present the most common reason for declaring personal bankruptcy in the United States. It is indisputable that capitalism obviously has its clear limits in what it can provide, as does any economic system. Which for-profit company would be able to build a country-wide highway system?

The working class of this country has been shrinking in size along with jobs in manufacturing for three decades now, but it still makes up a significant group in society. Also, there is a very large number of people who are not in traditional working class jobs, but whose situations are even worse, such as low-wage workers in the service, agricultural and other industries. In addition, there is a distinct underclass in American society. This underclass lives on the fringes of society, and is reliant on the few social services that the American government provides, but more importantly it is reliant on charity organizations. This is a social group that simply does not exist in other first-world countries. The closest similarities can instead be found in second-world countries, such as Brazil, Turkey and Mexico. Incidentally, in terms of social values, the United States is also very similar to these three countries (as opposed to Western Europe), according to the so called “World Values Study”. This fact may very well offer a plausible explanation for the internal state of American society.

So, there are clearly many incentives for poor people in the United States to demand more resources and services, but for different reasons they do not. There are essentially no elected politicians in the United States who are advocating the creation of a floor on the standard of living the United States guarantees all of its citizens, similar to those floors that exist in the rest of the industrialized world. Theoretically, the voters set the agenda an elect their politicians according to their self-interests, so why are politicians who advocate drastic improvements for the poor not elected? This is a very complex question, but there are a few things that can be clearly ascertained.

First, there has never been a successful labor movement in the United States. Unlike other industrialized societies, whose elites also fought against the labor movements of the early 1900:s, the labor movement in the United States was ultimately completely defeated. In every other first-world country, there is some kind of labor or social democratic party, which has had, and has an influence on society as a whole. Had the American labor movement been successful, it is likely that the two-party system would have been comprised of one labor party and one conservative party, as is the situation in the other Anglo-Saxon countries (the third, liberal party, in Great Britain must be considered wholly insignificant). Instead, the United States now has, for all intents and purposes, a two-party system comprised of two conservative parties. Even if there were parties and politicians who advocated policies that would drastically improve the situation for poor people in the United States, that party would be extremely unlikely to win a majority anywhere, and hence all the votes for that party would be wasted.

Second, the American public, and especially the lower echelons of society, is not aware of societal solutions in other countries. It would not be an exaggeration to say that the American public in general is not the most well versed in international comparative politics and government policies. It has always been the case that a leading world force, such as Rome, the British Empire and the United States, has not looked much outside itself for governmental inspiration. Also, the educational system, even at a very advanced level, does not emphasize such topics. Again, the two-party system has had a vast impact on the political thinking of the citizens of the United States, and it is unimaginable for most people that a party other than the Republicans or the Democrats would have a large amount of influence on society. Even more unimaginable is a system where there are many parties who have tangible political influence, which is the case in a proportional parliamentary system.

So, the outcome of all this is that the poor and unprivileged in the United States have nowhere to turn in the political process when expressing their self-interest through voting. They also do not know specifically what to demand. There is no party to vote for in the United States that suggests providing free healthcare and free University education for all its citizens. Both of those things are available to most citizens in the EU, but unimaginable in the United States, and voters would not even think of suggesting such things. Those facts alone tell a lot about the American political climate. For the unprivileged to not demand more resources in the political process, is something that is quite unique in the industrialized world.

However, unprivileged Americans are not passive political beings, as one would imagine after having read the preceding sections. Self-expression is an important thing to American citizens, so the unprivileged groups have instead turned their attention to other issues, probably partly as a result of not being able to express their rational economic self-interest, as described above. The reasons for this are complicated, but I will do my best to explain them below.

Those who have little demand more for those who have a lot

As tangible economic issues for the poor in the United States have been stricken from the agenda, the poor have nevertheless been involved in politics, and most notably in issues concerning so called “moral” questions. But, very surprisingly, the poor have also been involved in economic issues, not in their own interest (because it’s off the agenda), but in the interests of the wealthy. Again, this process is unique to the United States. These two issues are related in that they have the same political outcome, but one is intentional and the other is unintentional.

The unintentional support for conservative economic policies from poor voters

Since the 1960:s the divide has been growing in the United States between the people who support the Democrats for economic reasons and those who support the Democrats for social reasons. The values of 1968 did not sit well with many working-class voters and other unprivileged groups in American society. A backlash in values was initiated, and many voters started regarding “moral” values as more important than personal economic values. In order to voice their support for these values, poor voters were forced to vote for the Republican Party, which supposedly supported such values. Although the success of the reversal of some cultural changes in American society by the Republican Party can be discussed, it is clear that in legislative terms, many issues that have been important to these poor voters, such as abortion, have not changed. It is clearly in the economic arena that the Republicans have been the most successful, and as I mentioned earlier, the reversal of the previous rudimentary welfare state is now complete. The Republicans (with the help of Bill Clinton) have been able to allocate an incredibly vast amount of resources back to the wealthy, from whom they were allocated away for a few decades, starting with the New Deal. In essence: the poor voter who voted for the Republicans because he did not like abortions, did not see abortions be banned; instead taxes were lowered for the rich and raised for himself. Go figure…

The intentional support for conservative economic policies from poor voters

The United States leads the world in terms of financial innovation, for better and for worse. There are also many new economic theories and philosophies coming out of this country, and they are widely discussed in the media and elsewhere. Americans in general have a basic knowledge of economic theory that is probably superior to that of people in most other countries. This is not to say, however, that they necessarily understand the full societal implications of those theories, nor may the authors of those theories. The most important theory that has gained a very wide acceptance is the theory that the government is inherently inefficient. As a result of this, privatization and outsourcing of functions traditionally performed by governments is seen as beneficial even by poor people. These people may have had bad experiences with the government in the past, which can make such a view understandable. Be that as it may, but this belief and support for such policies has radically changed the United States. The country no longer has a healthcare system, and things that were done in the past, such as the construction of a national highway system, would present a cost that would be unimaginable for the federal government to spend today. Public spending, as a proportion of the total GDP, in the United States makes up roughly half of what it makes up in most other industrialized countries, and sometimes much less. This long process has definitely not benefited the poor of the United States, but the poor nevertheless give, and have given, their support to such policies, both by voting for the Republicans and for the Democrats.

Another theory that is a little more “exotic” as economic theories go is the theory of the “golden goose”. It basically means that it is wealthy entrepreneurs in society that are the ones who principally enable economic growth and well-being for all of us. They should hence be given tax cuts, and generally a good climate in which to thrive, so that they can lay their golden eggs for all of us to enjoy. This may or may not have a grain of truth inside it, but it is nothing short of astounding that a poor person should harbor such beliefs. There are only two ways in which such a person could become convinced of the validity of the golden goose theory:

1. the poor person plans his or her life decades ahead with the help of advanced economic analysis, or

2. the poor person has somehow been convinced of a theory that he or she does not really understand, or at least does not understand the societal implications of

Nevertheless, this theory is a common argument for tax cuts by the Republican Party, which so many poor people now vote for.

I will conclude this essay with an anecdote about poverty and the political and economic thinking in the United States. I must strongly point out that I do not wish to make fun of poor people in this country. I believe that their situation is something that every American should be ashamed of, and I feel a great deal of sympathy for them.

During the latest presidential campaign which ultimately led to the re-election of Bush Jr., a public radio journalist was interviewing people living in a trailer park outside of Washington DC. She asked a trailer resident:

-What do you think about George W. Bush’s tax cuts for the wealthy?

Response: I like ‘em, they’ll come in handy when I win the lottery