My Notes on Paul Krugman’s ‘Capitalism, Socialism, and Unfreedom’ | #DemocraticSocialism
Paul Krugman published a blog post, ‘Capitalism, Socialism, and Unfreedom‘, in which he addresses two recent pieces that appeared in the New York Times:
“Taken as a pair, they get at a lot of what’s wrong with the neoliberal ideology (and yes, I do think that’s the right term here) that has dominated so much public discourse since the 1970s.What, after all, were and are the selling points for low taxes and minimal regulation? Partly, of course, the claim that small government is the key to great economic performance, a rising tide that raises all boats. This claim persists – because there are powerful interests that want it to persist — even though the era of neoliberal dominance has in fact been marked by so-so economic growth that hasn’t been shared with ordinary workers:”
Of note is that, in a piece in which he points out the problem of using terms that mean different things to different people, he fails to define the very term he starts out with. Neoliberalism, in current discussions, isn’t quite defined in the classic way, and refers more to the ideological expression of American Democrats since the 1990’s, than it does the classical philosophical definition one might find in a philosophy textbook.
Centrism, today, is used interchangeably with neoliberalism. Krugman goes on to contrast the two approaches, neoconservatism and neoliberalism (centrism, really) and then states:
“It’s increasingly clear, for example, that monopsony power is depressing wages; but that’s not all it does. Concentration of hiring among a few firms, plus things like noncompete clauses and tacit collusion that reinforce their market power, don’t just reduce your wage if you’re hired. They also reduce or eliminate your options if you’re mistreated: quit because you have an abusive boss or have problems with company policy, and you may have real trouble getting a new job.”
Not only is monopsony power depressing wages, it is depressing everything for 91% of the population as it comes together with the dismantlement of civil society’s main means of protection: a government for the people.
Dr. Krugman sets our marker at the 1970’s, but 1962 saw the publication of Milton Friedman’s Capitalism and Freedom. This is where the zombie ideas of small government, free markets and corporate responsibility to shareholders were born. We need to set the marker there, as it is the boulder that started the avalanche we are living today. Dr. Krugman chose marketing to exemplify the kinds of ethical changes we’ve undergone. That marker is the correct one. But Krugman doesn’t tell the reader why.
Krugman, in his arguments, fails to bring in the third rail of Friedman’s monstrous theory, that corporations’ sole responsibility is to maximize their shareholders’ profit and absolutely nothing else. But, as I demonstrate in my essay below, this didn’t become the mantra fervently repeated by conservatives and neoliberals until Friedman’s book.
From Milton Friedman to Ronald Dworkin: economics for hedgehogs | #SocialEthics on Blog#42
Together, the three pillars of Friedman’s vision of capitalism and freedom are not only stupid, they’re toxic.
When paired with America’s other toxin, racism, they’re the scourge we’re now afflicted with. They are embodied in the combined efforts of the Trump administration and the congressional GOP. That is what another economist, Moises Naim, calls “ideological necrophilia.” I wrote about that here in the context of a speech of Trump’s in February 2016.
Krugman also misrepresents the nature and effect of the Clinton approach. Triangulation, what it actually is, remains widely misunderstood:
“A year into Clinton’s first term, lack of preparedness, setbacks, broken promises, scandal. and a presidency in trouble – all pushed Bill Clinton into taking a brand new tack: triangulation. In addition to the definition of triangulation offered by Dick Morris in his Frontline appearance on PBS, here is a quote from his book:
“The idea behind triangulation is to work hard to solve the problems that motivate the other party’s voters, so as to defang them politically… The essence of triangulation is to use your party’s solutions to solve the other side’s problems. Use y
our tools to fix their car.”
The problem with that is that triangulation has not quite worked out that way. “Their car” wasn’t what was actually being fixed. What the “tools” did address, however, were the goals of the Republican party. Those are separate and distinct from the needs of their voters or the Democrats’. In fact, the needs of the people, no matter their political bent, are identical: a steady supply of sustaining jobs, affordable housing, healthcare, childcare, education, etc. Triangulation gave both parties’ donors what they wanted, cutting deeper into what voters needed, moving both parties far away from their respective core ideologies.”
The reactions of those who served in the Clinton administration are documented here:
Political labels have been weaponized to the point where lack of precision added to decades of ghost cold war conditioning and a continuous manipulation of the conversation by self-interested parties has turned this into a war of labels.
As a recent example, when asked, “progressive” billionaire Tom Steyer said he didn’t know what “democratic socialism” is.
Steyer, within the last two years, has spent upwards of $100 million on a campaign to gather signatures in favor of impeaching Donald Trump, and backing progressive candidates. He really can’t define democratic socialism? Billionaires are now masquerading as progressives to ingratiate themselves with the left. How many billionaires are running for office on the left? Way too many.
Who do “small government,” low to no taxes, and “right to work” benefit? At what point in our modern history did more Americans do well than not?
There is a reason why dishonest conservatives keep talking about the 50’s. It isn’t entirely the idea of making America white again – it certainly is a component – but the fact that that generation did the best after the Great Depression. The part they won’t tell you about, or even whisper among themselves, is the fact that we did so well because corporations, an active and costly part of this nation’s citizenry, paid into the system. That’s a fact that, over the decades, has stuck in the craw of the wealthy and powerful whose resentment at having to participate in society in this way gradually intensified their resolve to seize control of our government. They finally succeeded in 2016, not before exercising different measures of control over our politics through their influence over our political parties, albeit to different degrees in manifestation and beholdedness.
If the idea of socialism was kept weaponized over the decades since the cold war, Democratic Socialism was racialized as of 2015, with the infusion of essays, articles, appearances by this or that cable personality, exclaiming that white progressives and their leftist agenda are racist. In late 2015-2016, Senator Bernie Sanders was targeted and pegged as a liar, an opportunist who was taking advantage of minorities. At one point the meme became that what Sanders did 50 years ago is irrelevant and not indicative of his motive and intent. One journalist in particular pushed the false narrative that it wasn’t Sanders in an iconic picture of Sanders at a protest.
This tack is being revived now, as The Intercept’s Briahna Gray explains in her essay: Beware the Race Reductionist.
“According to one popular iteration of this theme, Medicare For All is presumptively racist and/or sexist because it won’t eliminate discriminatory point-of-service care, or fully address women’s reproductive needs if it’s not thoughtfully designed. Perhaps you remember Rep. James Clyburn’s claim that a free college and university plan would “destroy” historically black colleges and universities. Maybe you’ve heard that the minimum wage is “racist” because it “Kills Jobs and Doesn’t Help The Poor,” or that it’s an act of privilege to care about Wall Street corruption, because only the wealthy could possibly mind what the banks do with the mortgages and pensions of millions of Americans. Perchance you’ve even been pitched on the incredible notion that rooftop solar panels hurt minority communities.
Libertarian journalist Conor Friedersdorf recently entered the fray with a piece titled, “Democratic Socialism Threatens Minorities.” His argument? That “top down socialism” (which progressives want just about as badly as they want top down capitalism) would create a tyranny of the majority and put minorities at risk. Completely ignoring the market failures of our current system, and eliding the widespread prejudice and violence black Americans face under capitalism, he concern-trolls by imagining a world in which black women struggle to find suitable hair products. Of course, this is a world we already live in.”
One of the great ironies of painting progressivism and democratic socialism as racist is the fact that Martin Luther King, Jr., himself, was a socialist.
This newest phase in the re-demonization of “socialism” began as the Democratic primary was heating up in 2015 and 2016. Paul Krugman himself played no small part in turning up the ugly rhetoric, lobbing grenades, and besmirching both the proponents of “Denmark” and the implementation of those very proposals in America under the guise of incrementalism being what suits us best. Now, Krugman extols the virtues of Danish democratic socialism, without identifying our current predicament as the implementation of Milton Friedman’s economic and political theory and then immediately renouncing it.
But here we are, at a point in time in which poverty is at an all-time high, following a recession that is second only to the Great Depression, and at the crossroads to the next revolutionary cycle: an automated society and, more likely than not, a world without work for many tens of millions of this planet’s humans.
Where do we stand at this point in time? Within the context of a corporate takeover of America, complete with the probability that its main perpetrator collaborated with a foreign power to win an election:
- Tens of millions of Americans still haven’t recovered from the Great Recession
- We have housing crises all over the US, with a record 64 million Americans living in multigenerational housing arrangements because of economic reasons
- Wages are not rising, even though we are said to be near full employment
- Crushing student debt is coming to a head, as loan defaults are increasing
- Our government is being dismantled piece by piece, with corporate taxes being all but erased and social programs curtailed or about to be severely curtailed to pay for massive deficits
This is only a smattering of issues we face.
Merely turning back the clock to the centrist status quo ante of 2008-2016 won’t fix our underlying governance problems. We were always hurtling towards a Trump-style corporate takeover because of the design of our power structures and the political dynamics that result from them. We keep going in cycles and each new cycle is more virulent than the next. Citizens United, or the legalization of money in politics that disastrously defined corporations as “people”, injected a massive amount of steroids into the worsening of our condition.
The trajectory of our future looks more like the libertarian hell that provides the societal backdrop for the science fiction series, “The Expanse,” than the “socialist” paradise of Star Trek, The Next Generation.
When we remain focused and get past fraught labels, their various usages and interpretations, what we are left with is very simple: American democracy and, within it, capitalism, are overdue for a complete recalibration. A makeover just won’t do. We need to relearn the meaning of equality and then reframe our constitution within the context of modern society. Ronald Dworkin gives us an excellent start:
American capitalism was conceived in a sin that has yet to be atoned for and, like a shapeshifter, keeps trying to recreate itself in one form after another. We are going through another recreation phase in which the wealthy are trying to impose a political and economic order that will afford them the magnitude and breadth of profit-making the slavers enjoyed until the American Civil War. Will it take a second civil war to finally put things right?
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The Expanse sci-fi series was broadcast on the SyFy cable network until this year, when it was canceled. Shortly after the cancellation was announced, Amazon’s Jeff Bezos announced he would be picking up the series. Bezos has a significant interest in space. You can read more about that here. The series is adapted from the books by famed author George R.R. Martin.
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