Economics, Politics

Paul Starr on a New Progressive Era

Free Photo: World’s Columbian Exposition, 1893

Paul Starr, the Bancroft and Pulitzer prize-winner historian, has a new article at The American Prospect that addresses some of this blog’s earlier questions about what a new progressive era might look like. The article is titled “How Gilded Ages End.”

I’d recommend reading the entire thing. For my interests, the key passages come toward the end, when Starr concludes that a new progressive era, like the progressive advances of the twentieth century, should center around “three critical domains for curbing oligarchic dominance.” These are: “taxation, the rules of the market, and the rules of politics.”

In a nutshell, reforming the rules of politics makes it possible to reform the rules of the market (which determine wealth before taxes and transfers) and the rules of taxes and transfers (which determine how much wealth everyone ends up with). In turn, reforming the rules of the market and of taxation will help reduce wealth inequality, which will lead to less inequality in political power, which will make reforms of the rules of politics more likely.

Where one starts may depend on political contingencies. But no matter where one starts, the “three domains for curbing oligarchic dominance” should reinforce each other in a virtuous cycle.

It’s long been known that the US has exceptionally high income inequality, and that this inequality results in part from our exceptionally weak redistribution of income through taxes and transfers. Recent research suggests that once you factor in the US’s exceptionally late retirement ages, we have notably unequal “market” outcomes as well — that is, the rules governing our markets, such as our low minimum wages and relatively anti-union policies, lead to unusually unequal economic outcomes even before taxes and transfers are factored in. (See here for a summary of the recent research.)

As Dean Baker has persuasively argued, American liberals have too often focused their arguments on increasing after-tax redistribution, neglecting the enormous importance of the pre-tax rules of the market such as monetary policy (the Fed has often set needlessly high interest rates that dampen American employment), currency policy (aiming for a “strong dollar” also tends to harm American workers), inefficient intellectual property rules, anti-union labor rules, and so on. Liberals’ focus on after-tax redistribution has been especially unproductive because for much of the Reagan Era, redistribution (“tax and spend”) was a politically unpopular position. Soaking the rich may be gaining in popularity today among the public as a whole, but it remains unpopular among the rich, to whose preferences our elected leaders — as political science has shown — tend to be most responsive.

The end of Starr’s article, like Baker’s book, does a good job of connecting the dots between different parts of what could be a new progressive agenda. For my purposes, this makes Starr’s article — like Baker’s book — especially useful. There are a lot of lists of desirable progressive economic policies out there — such as Bernie Sanders’ Economic Agenda for America, John Cassidy’s list of ways to get serious about economic inequality, and even Lane Kenworthy’s predictive list of policies that the US might adopt if it moves toward social democracy. There are fewer attempts to organize progressive reforms into the kind of rhetorically persuasive, simple vision of governance that the Reagan Era offered, and that will probably be needed to move beyond the Reagan Era. I’m not sure that Baker or Starr provide the kind of simple, overarching vision (or rhetoric) that may be needed — I’m not sure that anyone does, other than maybe Elizabeth Warren? — but they do the important mid-scale work at the level between disparate, isolated policies and grand, abstract vision.

I’ll close by quoting some of the passages from Starr’s article that particularly struck me:

[M]any aspects of rulemaking for markets in the 21st century will need to move from the national to the international level, just as rulemaking in the Progressive era began moving from the states to the federal government.

Rolling back oligarchic dominance will also require rethinking the relaxation of antitrust law and other changes in recent decades that have fostered the concentration of economic and political power. The narrowed conception of antitrust as being only about price competition and narrowed criteria for enforcement doesn’t take into account the harm by companies that have the power to impose their terms arbitrarily on consumers and to steamroll opponents in the public sphere. We will also need to rethink the rules of corporate governance that have allowed top corporate officials to pay themselves staggering salaries while denying their employees any share in productivity gains.

Without changes in the rules of politics, however, none of this is going to be feasible. In its decisions about campaign finance, the Supreme Court has, in effect, made it a constitutional requirement for elected officials to depend on wealthy donors for their political survival.

The Arizona case [Arizona Free Enterprise Club v. Bennett, 2011] hows just how difficult it will be to overcome the Court’s oligarchy-empowering decisions with policies that empower ordinary citizens. I am not optimistic about the chances of a constitutional amendment to allow the regulation of campaign finance or about legal strategies for challenging the Court’s reasoning in these cases (though the latter could become relevant if a new liberal justice replaces a conservative one). Ultimately, this is a question about the fate of democracy that will need to be fought out politically as well as legally. A country that recognizes the principle of one-man, one-vote and expects time to be fairly allocated to opposing sides in legislative debates and courtrooms should constitutionally be able to create an institutional framework for the fair distribution of resources in election campaigns.

The power of money cannot be abolished, but it can be attenuated, and that can be enough.

I said earlier that, in principle, rallying the majority on behalf of its own interests should be easier than winning support for policies that benefit the poor and minorities. But by taking the side of the poor and minorities in the 1960s, liberals made what ought to be the easier task more difficult. This was the right choice, but it has had a cost. Ever since, working- and middle-class whites, particularly men, have been suspicious of liberal government as no longer working for them, and consequently building broad, bottom-up majorities for progressive politics has become more difficult. The backlash against the changes in racial and gender relations has provided the votes for the revival of the right, while business and the wealthy have provided the money. Now the hope for fundamental change depends on the backlash petering out as the generations turn over, demographic patterns shift, and some of the difficult social changes of the past half-century are integrated into the fabric of American life.

For many liberals, equal rights for all, regardless of race, gender, and sexual orientation, have been the great moral and political causes of the past half-century. It is too soon, and perhaps it will always be too soon, to declare victory in those struggles. But if the effort to roll back oligarchic dominance is to succeed, we must invest in it the same degree of passion and commitment. Democracy is not only a form of government. It is also a renewable political faith. Reformers have awakened that faith in the past to win victories against enormous odds, and we must do it again.

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3 thoughts on “Paul Starr on a New Progressive Era

  1. Pingback: Can progressives exploit national security fears too? | Against the Logicians

  2. Pingback: After Neoliberalism | Against the Logicians

  3. Pingback: The Intellectual Foundations of a New Progressive Era? | Against the Logicians

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