Things Don’t Change

In January 2017, my book Economism: Bad Economics and the Rise of Inequality was published. The timing wasn’t great.

The book is about the ideology of economism: a worldview that sees society through the distorting lens of a simplistic version of first-year microeconomic theory and invariably concludes that market forces provide the optimal solution to all problems. (For example: lowering tax rates on the rich encourages them to work harder, creating more jobs for everyone.) The argument of the book is that economism rose from the then-fringe views of Friedrich Hayek and Milton Friedman in the 1950s to become the dominant frame for political and economic debates in the United States.

I wanted the book to inform the debate over Hillary Clinton’s economic policies, which were likely to be a repeat of the neoliberalism of Presidents Clinton and Obama. But then Donald Trump happened. It is still true that, when Republicans express an opinion on economic issues, they read from the gospel of economism—lower taxes, less regulation, markets über alles—and it is true that the Trump administration’s meager domestic policy achievements (one tax cut and a bunch of anti-regulatory executive orders) were consistent with party orthodoxy dating back to Ronald Reagan. Under President and now ex-president Trump, however, the party veered into a toxic strain of lunatic fascism in which the pursuit of power at any cost is allied with white supremacy, oppression of women, Christian theocracy, and further enrichment of a handful of billionaires; any pretense to economic logic, however simplistic and disingenuous, has been abandoned.

I recently discussed Economism with Nicolas Wittstock on the podcast of the University of Washington Political Economy Forum. We talked about the core ideas of the book, but also about everything that has changed since then. On the Republican side, I think that the ideology of free markets and low taxes was the glue that held the party coalition together from the 1960s until 2016; now, however, it has been replaced by hatred of minorities and educational elites.

On the Democratic side, however, economism is alive and well. The Bernie Sanders revolution has pushed the party hierarchy slightly to the left, and President Biden’s stated positions on many issues are far more progressive than those of the Clinton-Obama-Clinton axis. But when it comes to action, the Democratic majorities in the House and Senate persist in putting everything through a filter of moderation, economic efficiency, and business-friendliness. They still fret that spending has to be paid for, that higher tax rates will hurt the economy, and that we have to preserve jobs in the fossil fuel economy. That’s why infrastructure is a no-brainer—public capital investments contribute to economic growth—while the things that people really need, like universal pre-K and child care and student debt relief and Medicare for All, get left on the back burner.

It’s just Manchin and Sinema, you may argue. You would be wrong—there are plenty of other moderates who have already left their knives in the absurdly-named Build Back Better reconciliation bill—but let’s ignore that for the moment. So what? As a party, we can say we are for anything we want. But when push comes to shove, we are what we do. (That was, more or less, the core principle of existentialist philosophy, before “existentialist” came to mean “really important.”) Whatever a Democratic president and Democratic majorities in Congress can actually do defines what the Democrats are.

This isn’t just a question of semantics. The core problem of the Democratic Party, as I argued in Take Back Our Party (available for free from The American Prospect), is that we abandoned our economic identity as the party of the common person. You can fool people in the short term, for an election cycle or two, but in the long term you can’t make a majority of the electorate think you are something you aren’t. When we became the party of big finance and big technology and globalization and the free flow of capital and skills-based competition, we ceased to be the party of people who don’t have lot of money, aren’t elite software developers, and don’t have the fancy educations necessary to succeed in the so-called knowledge economy.

Probably the only federal government programs that people like and associate with the Democrats are Social Security and Medicare—which were passed before most people alive today were even born—and, to a lesser degree, Obamacare. People will vote to protect Affordable Care Act provisions, such as the ban on medical underwriting, from Republican attacks, but satisfaction with Obamacare itself is declining as insurance policies shift more and more costs onto policyholders. Governing is an opportunity to show that the Democratic Party actually cares about people caught on the wrong side of the inequality divide. The reconciliation bill may achieve something. But it will likely not be enough to stem the trickle of working-class voters—of all races—toward the Republican Party.

The point isn’t that Joe Biden is doing anything in particular wrong. With only 48 real votes in the Senate, there’s a limit to what you can accomplish. The underlying problem is that, even while the center of gravity within the Democratic Party has shifted to the left, the balance of power is still in the hands of people who are essentially “moderate” Republicans from twenty years ago. As today’s teenagers replace today’s octogenarians in the electorate, that may change. But we may not have enough time.




Books: Take Back Our Party, Economism, White House Burning, 13 Bankers. @UConnLaw. Chair, @southerncenter. Co-founder, @Guidewire_PandC. Freelance cellist.

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James Kwak

James Kwak

Books: Take Back Our Party, Economism, White House Burning, 13 Bankers. @UConnLaw. Chair, @southerncenter. Co-founder, @Guidewire_PandC. Freelance cellist.

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