Policies that fail in the same
way over and over are not failing. Someone is lying about their intent. The
drug war didn’t fail to stem the flow of banned narcotics and to stop epidemic
abuse and addiction; it succeeded at building a vast carceral and surveillance
apparatus targeted at people of color as a successor to Jim Crow.
The war in Iraq didn’t fail to
bring democracy to the Middle East; it smashed an intransigent sometimes-ally
in the region, and deliberately weakened and destabilized a group of countries
whose control of, and access to, immense oil reserves was of strategic American
interest.
The “end of welfare as we know
it” didn’t fail to instill in the nation’s poor a middle-class sense of
responsibility; it entrenched a draconian regime of means-testing and a
Kafkaesque bureaucracy for access to even meager social benefits for a rapidly
shrinking middle class.
It’s not that “Capitalism
isn’t working,” as Noah Smith recently
argued in Bloomberg. It’s that it’s working all too well.
Real wage growth has been
nonexistent in the United States for more than 30 years. But as America enters
the 10th year of the recovery—and the longest bull market in modern
history—there are nervous murmurs, even among capitalism’s most reliable
defenders, that some of its most basic mechanisms might be broken. The gains of
the recovery have accrued absurdly, extravagantly to a tiny sliver of the
world’s superrich. A small portion of that has trickled down to the
professional classes—the lawyers and money managers, art buyers and decorators,
consultants and “starchitects”—who work for them. For the declining middle and
the growing bottom: nothing.
This is not how the economists
told us it was supposed to work. Productivity is at record highs; profits are
good; the unemployment rate is nearing a meager 4 percent. There are widely
reported labor
shortages in key industries. Recent tax cuts infused even more cash into
corporate coffers. Individually and collectively, these factors are supposed to
exert upward pressure on wages. It should be a workers’ market.
But wages remain flat, and
companies have used their latest bounty for stock buybacks, a transparent form
of market manipulation that was illegal until the Reagan-era SEC began to chip
away at the edifice of New Deal market reforms. The power of labor continues to
wane; the Supreme Court’s Janus
v. AFSCME decision, while ostensibly limited to public sector unions,
signaled in certain terms the willingness of the court’s conservative
majority—five guys who have never held a real job—to effectively overturn the
entire National Labor Relations Act if given the opportunity. The justices, who
imagine working at Wendy’s is like getting hired as an associate at Hogan &
Hartson after a couple of federal clerkships, reason that every employee can
simply negotiate for the best possible deal with every employer.
To those for whom capitalism
cannot fail but can only be failed, the answers lie at the margins. Neoliberal
doctrine forecloses any hope of large-scale change; present circumstances
always prevent future possibilities. Instead, as Smith writes, “there are some
simpler, humbler changes that state governments can begin taking right away,
without waiting for labor-friendly politicians to take control of the White
House and Congress.”
These changes involve banning
noncompete agreements, through which companies forbid employees from going to
work for competitors, and more assiduously policing industry wage-fixing.
Both would be fine reforms,
but neither would have much effect on the labor share of gross domestic
product. They are minor symptoms of the capitalist disease. Capitalism isn’t
broken; it’s working precisely as it’s supposed to: generating surpluses and
giving all of them to a small ownership class. The New Deal and postwar
prosperity, which barely lasted until 1980, represent historic outliers—the one
significant period in which growth at the top was somewhat constrained and a
relatively large share of wealth went to the middle. It was possible only
through massive government intervention and redistribution, combined with a
powerful labor sector backed by that same federal government. It took the
collective power of entire societies to briefly restrain capitalism, which,
left to its own devices, will do what it has always done: make the already very
rich infinitely richer. Capitalism is “working” just fine.
What we are seeing,
I suspect, is an acceleration of a broader social transformation that’s been
occurring for some time. Rome, the saying goes, wasn’t built in a day, but
neither did it fall in one, either. Changes to societies as large and complex
as theirs or ours occur subtly and over years—if not decades. Those workers who
do remain in the workforce increasingly depend on work and work alone for all
their benefits. The companies for which most people work are like the Roman
villas that gradually became central nodes of a manorial society as the
imperial metropole retreated through a series of self-inflicted wars and crises
of governance.
One moment you’re working for
some kind of money wage in a fully monetized economy; the next you’re living
in a company town, buying your groceries with scrip, and you can’t
leave without your boss’ permission.
In America today, supposedly
the most prosperous society ever to exist on earth, nearly a third of families
report experiencing economic hardship. Sixty percent—60 percent!—say they could
not cover an unexpected expense of $1,000, and nearly 40 percent have less than
$500 in savings. People with good insurance get
billed $100,000 for having a heart attack. People commute
four hours a day because they can’t afford to live in the cities where
they work.
The barbarians aren’t at the
gates. They’re already here in the boardrooms; they’ve been here all along.
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