Slows dance

[ashling]

My computer has the s l o w s, so I have been going through and purging my files. Trying to decide what to keep, put on disk, or trash. Anyway, I came across this book review I did several semesters back.
I thought there may be a number of folks here who might be interested in seeing it (I'm not presumptuous enough to assume that that is a large number LOL)

At any rate, here it is:

~ a review of the following works--
The Conscience of A Liberal, by Paul Krugman, New York: W.W. Norton, & Co. (2007)
Supercapitalism: The Transformation of Business, Democracy, and Everyday Life by Robert B. Reich, New York: Vintage Books (2008)


The Dance: Perspectives on Inequality, Political Polarization and Democracy


The disciplines of political science and economics are so strongly linked as to often appear indistinguishable, one from the other. For example, the economics sub-discipline known as “behavioral economics” is, for all intents and purposes, a field of political science.

These two works have been reviewed for their insight into an issue which should be of great interest to political science: what is the relationship between financial inequality, social inequality and political polarization and what the implications of each of these for democracy are. They are the product of authors who have earned distinction, however, in the field of economics. They not only present some interesting perspectives on the topic, but a look, as well, into that most mysterious of places: the mind of the academic economist.

Comments on the Dance

In his book, Other People’s Money, written during what one author refers to as “the Long Gilded Age,” Louis Brandeis said, “we can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both.” Thus, the tug-of-war between inequality and democracy is not a new dilemma. It has been going on, in one form or another, since the founding of this country. As a construct put in terms of inequality versus access to power, it is of much longer duration.

According to political scientists Nolan McCarty, Keith Poole, and Howard Rosenthal, history suggests that there is a kind of "dance" in which economic equality and political polarization move as one. They illustrate in, Polarized America: The Dance of Ideology and Unequal Riches, that increasing polarization in recent decades has been closely accompanied by fundamental social and economic changes—most notably, a parallel rise in income inequality.
As implied, there are numerous aspects and consequences of this dance. Within the works cited here, perhaps, are the keys to this conundrum, if not to the mind of the economist.
 
The Conscience of America

The title of Nobel Laureate Paul Krugman’s book, The Conscience of A Liberal, is a play on Barry Goldwater’s The Conscience of a Conservative. An apt title, for Krugman’s looks behind inequality in America and finds just that: the conscience of conservatism. He suggests that inequality in America today can be laid squarely at the feet of “movement conservatism.” He traces the evolution of movement conservatism from its “intellectual” roots in the early 1950s when it was not a prominent force in the Republican Party, through its development and rise in the 1970s and entrenchment since the Reagan era.

Krugman’s historical analysis looks at the entrenched inequality of what he terms the ”Long Gilded age” which was further exacerbated by the financial meltdown of the late 1920s. He describes the redistributive programs of the New Deal in the Depression period and through wage and price controls during World War II as the “Great Compression.” Following this he finds a period of relative equality and political stability through the 1950s, the Kennedy years, the Great Society of LBJ, and even the Nixon presidency.

It was, however during this period when movement conservatives began to co-opt the political techniques and message of Nixon for their own purposes. According to Krugman, Nixon was a fundamentally flawed and unethical man president who carried out some progressive policies and was only tangential to movement conservatism.

Movement conservatism is maintained by a whole network of groups which support each other and its adherents and it can always find a place for them in its web. Furthermore, it is essentially antidemocratic and employs successfully employs political polarization, voter suppression, misdirection, etc., as a techniques to achieve its agenda, and the central weapon in its arsenal has been racism. It is no coincidence, for example, that Ronald Regan began his successful campaign for the presidency in Neshoba County, Mississippi, the site of one of the most heinous racist episodes in our recent history.

He finds that this contrived political polarization actually preceded the rapid rise in inequality that we now experience. We now live in a second Gilded age. The middle class, largely the product of the New Deal and the democratic process, is rapidly disappearing due to the “Great Divergence” which is largely the product of movement conservatism.

The conventional wisdom is that, while this is a bad thing, it’s the result of forces beyond our control. But the story of the Great Compression is a powerful antidote to fatalism, a demonstration that political reform can create a more equitable distribution of income – and, in the process, create a healthier climate for democracy. (p. 39)

“For now,” Krugman asserts, “being an active liberal means being a progressive, and being a progressive means being partisan. But the end goal isn’t one party rule. It’s the reestablishment of a truly vital, competitive democracy. Because in the end, democracy is what being a liberal is all about.” (p. 273)

Capitalism Run Amok

Robert Reich’s book Supercapitalism, The Transformation of Business, Democracy, and Everyday Life, addresses the reordering of our politics in America due to the rise of a consumer/investor based society. He refers to this new order as “Supercapitalism.”

Like Krugman, he harkens to a time of relative economic and political stability which he calls the “Not Quite Golden Age.” His analysis of this age parallels all of the economists represented here. His perspective on that period highlights the cooperative nature of business and government in which “it was well understood that the ultimate purpose of democracy was to create a better standard of living for more and more Americans. (emphasis added, p. 28)” The marginalization of women blacks and Hispanics during this period accounts for it being not quite golden.

He points to the Veterans Administration, the GI Bill, and Social Security as examples of the hand of government which contributed to the welfare and stability of the period. Unions worked to give voice to labor and the “oligopolistic coordination” of major industries worked to insure a rising standard of living.

Compared to choices available to other societies, the United States enjoyed access an abundant lifestyle as well as meaningful involvement in the processes of government. However, consumer choices were somewhat limited as consumers did not have much input into the production of goods. This was to change under the transformation into Supercapitalism.

This new order provides more consumer choices, more returns on investments, but comes at a cost. We are of two minds, he says. While we have more access things which satisfy the consumer/investor side, our access to things witch satisfy our citizen/democratic side is left behind. His main point is that we are not asking the right questions – not having the right conversations.

Our politics have been diverted by our consumer selves. Democracy has been overwhelmed by Supercapitalism. This conundrum will not be solved except by having a meaningful conversation about what we want as a society. At this point, that conversation is not happening. Reich doesn’t envision a return to the Not Quite Golden Age, but seems to seek some kind of accommodation with this new economic beast. He ends with a chapter called “A Citizen’s Guide to Supercapitalism.” He says, “we can have a vibrant democracy as well as a vibrant capitalism, To accomplish this, the two spheres must be kept distinct.” (p. 224)