by Thomas Piketty
http://piketty.blog.lemonde.fr/2016/02/15/the-rise-of-sanders/
How should we interpret the
incredible success of the ‘socialist’ Bernie Sanders in the American Primaries?
The Vermont senator now has the lead over Hillary Clinton amongst the Democrat
supporters under 50 years and only the senior citizens’ vote has enabled
Hillary to maintain her advantage. Faced with the Clinton electoral machine and
the conservatism of the major media, Bernie will perhaps not win the primary.
But it has been demonstrated that another Sanders, possibly younger and less
white, could one day soon win the American presidential elections and change
the face of the country. In many respects, we are witnessing the end of the
politico-ideological cycle opened by the victory of Ronald Reagan at the
November 1980 elections.
Let’s glance back for an
instant. From the 1930s to the 1970s, the United States pursued an ambitious
policy of reduction in social inequalities. Partly to avoid any resemblance
with Old Europe, seen then as extremely unequal and contrary to the American
democratic spirit, in the inter-war years the country invented a highly
progressive income and estate tax and set up levels of fiscal progressiveness
never used on our side of the Atlantic. Between 1930 and 1980, for half a
century, the rate of taxation applicable to the highest American incomes (over
one million dollars a year) was on average 82%, with peaks at 91% from the
1940s to the 1960s, from Roosevelt to Kennedy, and it was still 70% when Reagan
was elected in 1980. This policy in no way affected the strong growth of the
post-war American economy, doubtless because there is not much point in paying
super-managers 10 million dollars when one million will do.
The estate tax, which was just
as progressive, with rates in the range of 70-80% applicable to the biggest
fortunes for decades (whereas this rate has rarely risen above 30-40% in
Germany or in France), considerably reduced the concentration of American
capital, without the wars and the destructions which did the job in Europe.
In the 1930s, the United
States also implemented a federal minimum wage, well before the European
countries and at a level (expressed in 2016 dollars) which was above 10 dollars
per hour at the end of the 1960s, by far the highest at the time. All this took
place with practically no unemployment because the level of productivity and
the educational system could allow it. This was also the period when the United
States finally put an end to the legal racial discrimination still operational
in the South, which was far from democratic, and launched new social policies.
But all this aroused strong
resistance, in particular amongst the financial elites and in the reactionary
fringes of the white electorate. Humiliated in Vietnam, the America of the
1970s was further concerned by the fact that those who had been defeated in the
war (with Germany and Japan in the lead) were catching up at top speed. America
was also suffering from the oil crisis, inflation and the under-indexation of
the tax schedules. Reagan surfed on all these frustrations and was elected in
1980 on a programme designed to reinstate a mythical capitalism said to have
existed in the past.
The culmination was the 1986
fiscal reform which ended half a century of steady fiscal progressivity and
lowered the rates applicable to the highest incomes to 28%. This choice was
never genuinely challenged by the Democrats of the Clinton years (1992-2000)
and the Obama era (2008-2016) who were to stabilise the rate at around 40%
(roughly half the average level for the period 1930-1980), the key element
being an explosion of inequalities and huge salaries, in a context of weak
economic growth (but slightly higher than in Europe, bogged down by other
problems) and stagnation of the incomes of the majority.
Reagan also decided to freeze
the level of the federal minimum wage which, as from the 1980s, has been slowly
but surely eroded by inflation (little more than 7 dollars per hour in 2016, as
compared with almost 11 dollars in 1969). There again, this new
politico-ideological regime has shown little sign of attenuation by the
Democratic alternation of Clinton and Obama.
Today, Sanders’ success
demonstrates that a substantial proportion of America is tired of the rise in
inequality and these pseudo-alternatives and intends to return to a progressive
agenda and the American tradition of egalitarianism. Hillary, who fought on the
left of Obama in 2008, particularly on the issue of health insurance, today
appears as the keeper of the status quo, the heir to the Reagan-Clinton-Obama
political regime.
Bernie clearly proposes to
reinstate fiscal progressivity and a high minimum wage (15 dollars per hour).
He also adds universal health care and free higher education in a country where
inequality in access to education has reached incredible heights and has thus revealed
the wide gulf between the reality and the winners of the system with their
somewhat enervating speeches advocating a meritocratic approach.
At the same time, the
Republican Party is sinking into a discourse which is hyper-nationalist,
anti-immigrant and anti-Islam (a religion that is almost non-existent in the
United States), and also into an endless glorification of rich whites. The
judges appointed under Reagan and Bush have lifted all legal restrictions over
the influence of private money in political life, which considerably
complicates the task of candidates like Sanders. But new forms of political
mobilisation and participatory financing can win the day and steer America into
a new political cycle. We are very far from the doom and gloom of the
prophecies predicting the end of history.
Translation of an op-ed
published in Le Monde, February 14-15, 2016
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