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TechnoratiLoser Liberalism Versus Power Populism
The Democrats like to portray themselves as the party of humble masses. This is in contrast to the Republicans, who President Bush once jokingly described as the party of the "haves and have mores."
But there are two very distinct ways in which Democrats see themselves as helping out the middle class and poor. On the one hand, much of the Democratic Party leadership portrays the government as sort of a collective charity. These Democrats draw a picture that has the market determining societies' winners and losers. But, because they are nice people, they think it's appropriate to tax the winners to help out the losers. This distinguishes them from the Republicans, who want to tell the losers to get lost. This philosophy can be thought of as "loser liberalism," since it holds that the government must tax back some of the winners' money to help out those who did not do very well on their own.
This view can be contrasted with "power populism," which doesn't accept the basic government/market distinction that loser liberalism treats as its starting point. The power populists see government policy as determining who wins and loses in the market place. For example, it is government policy that makes it easy to import cars and clothes, thereby putting auto workers and apparel workers in direct competition with low-paid workers in the developing world. This trade policy makes manufacturing workers losers.
On the other hand, government policy also makes it difficult for foreign doctors and lawyers to work in the United States, unlike foreign dishwashers and custodians. Since the government protects doctors and lawyers and other highly paid professionals from foreign competition, it ensures that these people will be among the winners in the global economy.
Government policy also dictates that patent monopolies will be the primary method for financing drug research and copyright monopolies will be the main method for promoting software development, thereby enabling companies like Merck and Pfizer and individuals like Bill Gates to get very rich. There are other, more efficient mechanisms for financing research of developing drugs and software that would not create the same winners or lead to as much inequality, but the rich and powerful use their power to keep these alternatives from ever being publicly debated.
Loser liberalism is by far the predominant strain within the Democratic Party for the simple reason that these are the folks with the money. And money not only buys campaign ads, but it is the basis for being taken seriously by the media. The media feels completely justified in ignoring the positions of the presidential candidates who haven't raised the tens of millions that they have decided is necessary to win the nomination. This means candidates that don't promote loser liberalism are simply excluded from the outset.
Not only are populist candidates excluded from the debate, but political positions that are inconsistent with loser liberalism are also largely excluded from public debate. So, trade policy is consistently portrayed as a debate between "globalizers" and "free traders" who are being challenged by "protectionists." In reality, the globalizers are ardent protectionists who are happy to have highly educated professionals protected from foreign competition. They also want to increase patent protections on drugs and copyright protections on software and make poor people in the developing world pay more money for these products. They are only "free traders" when it comes to placing less educated workers in the United States in competition with workers in the developing world.
The loser liberals similarly control the debate in other areas. A modest tax on stock trades and other financial transactions, like the one that England has, could easily raise more than $100 billion a year in revenue. But, the hedge fund crew knows that this would be real money out of their pockets, so they don't even let the issue get discussed. After all, it's fine to make a bunch of stupid auto workers lose their jobs we can always give them "wage insurance" - but it's another matter altogether to cut into the income of the hedge fund crew.
The loser liberals also keep single payer health care insurance off the table, although they might be willing to pay somewhat higher taxes to allow a few more kids to get health care coverage. The loser liberals would never allow for a serious discussion of alternatives to patent-financed research for prescription drugs, no matter how many Vioxx-type scandals fill the newspapers. After all, we're talking about the profits for Merck and Pfizer, not pensions for steelworkers.
There is a long list of government policies, many of which are extremely harmful to the economy and society, that have the effect of redistributing income upward. Like the Republicans, the loser liberals want to make sure that these policies never come up for public debate. But, the loser liberals may be willing to pay taxes on their billions. Perhaps we should be thankful for small favors, but real change will require overturning the structures that redistribute income upward, not a modest trickle of tax revenue that allows some of this money to flow back down.
Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer ( www.conservativenannystate.org). He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.
14 Comments so far
Show AllMANUFACTURING CONSENT AND COMPETITION
As an outstanding but underrated economist, Dean Baker understands the difference between efficiency and what passes for competition, which is actually relative degrees of substantial market power peddled by "power populists" as free trade and globalization.
Thirty years ago, efficiency was embraced through both competition and monopoly depending on conditions like scale economies, externalities and public goods. Public policy was more clear in distinctions between wealth creation and wealth distribution. Efficiency was intended to create the largest economic pie which was then distributed under various "loser liberal" policies.
For example, contrary to the free-trade extremists who froth at the mouth at the mention of government regulation, the greatest invention of the twentieth century, the transistor, was created by the greatest private regulated monopoly, AT%T.
But that was when effective cost-plus regulation was coupled with powerful scale and scope economies that literally drove some local telephone rates to near zero. Today when that happens, as when the National Institute of Health discovers a wonder drug, the situation will quickly be privatized and exploited by Big Pharma.
Today, both "loser liberals" and "power populists" perpetuate a myth that only a certain kind of competition - that defined by the "power populists" - can lead to economic efficiency and the holy grail of maximum economic growth. Rather than challenge the manufactured definitions of competition designed to mask market power as explained by Baker, they conveniently skip this fatal flaw and move on to the redistribution arguments - just how are we going to recover these "perfectly legitimate" costs they ask?
That's why Baker's ideas on competition and efficiency rarely see the light of day. Expand the example above of today's prescription drugs. High fixed costs and low incremental production cost combined with pancake patent abuse, copycat drugs, selling sickness and an intricate web of market power can lead to high degrees of price discrimination and monopoly profit, something that generally cannot exist under genuine competition.
Therefore Big Pharma will always sell drugs to Canada as long as revenue exceeds the low incremental cost, while it simultaneously kicks and screams about Canada's government restrictions on drug prices. Then in classic textbook monopoly fashion, it uses "power populism" to segment its market, restricting the resale of those drugs to the US so prices there can be raised much higher.
The public relations package designed to sell this sham repeatedly invokes the message that the US is "subsidizing" the high fixed cost of "research and development" and if Canada would just lift those price restrictions, it could pay its fair share as US prices would presumably decline in proportion. Obvious conclusion? Those extraordinary high total costs claimed in the first place as necessary to produce drugs are what - efficient? competitive? necessary to induce the creation and production of drugs in the first place?
According to the "power populists" and "loser liberals", it's all of the above. No one is questioning the total cost of prescription drugs and other goods and services like Baker, except perhaps Ralph Nader et al, because they will quickly be railroaded down the cat calling path of socialism and all the rest of it. Instead of questioning a flawed framework of competition and efficiency, the debate will be shifted to how to recover the total cost, regardless of how ridiculously high it may be.
The message here resonates the notion of countervailing powers introduced years ago by Kenneth Galbraith. Competition and efficiency is not just something that drops out of a free-trade sky in the form of Adam Smith's Invisible Hand. It has become a bastardized creature of modern politics embedded with thousands of lobbyists, carved and shaped from the finest monopoly wedge materials and served up by the best public relations firms market power can buy.
As Noam Chomsky has observed, if many of the world's rich had to face genuine competition, they'd be in rags. And some may well be headed in that direction. Some medical patients from the US are discovering with careful research that a $200,000 medical procedure can be obtained in India WITH EQUIVALENT QUALITY AND SAFETY for ten percent of that, about $20,000, bypassing entirely the obscene morass of medical care in the US. Oh my, has Schumpeter's creative destruction infiltrated the US border? Have the outsourcers been outsourced?
B Payne, Economist
bbpayne@earthlink.net
Some of the nation's most affluent people will admit that they don't need any more money... and would gladly pay higher taxes because they understand the principle that once you HAVE money, it becomes easier to MAKE money.
On the other hand, by taking away opportunity to get ahead, this current government is backing the poor and middle class into a corner... and that is never a smart thing to do.
When the average family can no longer afford food, housing higher education and medical care, some people will become desperate and dangerous. It is already happening and it will get worse before it gets better.
Anyone who has ever visited a third-world country where the wealthy have to live behind high walls, and barred windows knows where our country is headed.
Example, my son-in-law recently completed several expensive years of college to get his computer systems engineering degree and has been unable to find ANY sort of work in or even near that field. He's now considering returning to school to learn how to weld wrought iron burglar bars just so he can pay off his student loans.
NorWegan: My idea of "progressive" forever morphed when I realized that the real political spectrum should be skewed 90 degrees from the current fashion. That is, left vs. right are more of the same symbolic crap. The origin of those terms is literally the result of a two-party dominion in the US, with one aisle of seats dedicated to one corporate party, one to the other.
The real spectrum is not left or right -- empty, useless symbols, in my estimation -- but up vs. down. You can even get specific, attach a number range to it. The politics of those who are at the bottom 90% of the economy vs. those at the top 10%. There's the politics of oppression and there's the politics of self-determination.
Progressive politics dispenses with the "left" and "right" confusion -- a real smokescreen, a hurdle, and a non sequitor -- and instead it attempts to lay a utilitarianism over the nature of up vs. down, have vs. have-not, and the forces which perpetuate and accentuate this.
So I'd really drop the left/right thing, and socialism vs. capitalism labels as well. Let's talk qualities instead. Ideally, I wish we had onomatopoeia's for political qualities, since these are the least symbolic language constructs. They are those words which try to mimic, in sound, that which they describe: http://en.wikipedia.org/wiki/Onomatopoeia.
Paul,
I understand the stigma the term has in the US, and thus your problem with the use of it, even if it, in the most basic meaning of socialism, embodies many of your values. While I don't agree with you that use of the term should be avoided, I do agree that the values, the qualities of what we're trying to describe, are more important than labels, which are indeed often a source of confusion, because of how differently people interpret them.
My definition of progressive has always been one encompassing a broad left, rather than the more narrow definition of the progressivism of Theodore Roosevelt as a specific ideology, which I assume is what you and jjohnjj are refering to.
I think that people on the left need to help people see that in a progressive/socialist (whatever you want to call it) society, everyone wins. In a capitalist society, only some people do.
Hard to say whether there's a brand of socialism which coincides tightly with progressivism. Many of the people promulgating a non-state socialism are really talking communitarianism or a variant of 19th century anarchism (Kropotkin, Bakunin, etc.) which certainly has its merits. They tend to promote a restoration of the Commons.
Nonethless, they should probably avoid the term "socialism" -- good or bad -- because of the century-long stigma it carries. For the same reason, although the Hindu swastika was once a good luck symbol, it's obviously prudent to avoid that today also. Don't spend time trying to redefine labels or words which have become more symbolic than semantic, it's a waste of time. Focus on the qualities of what "ism" we're trying to describe, make a new "brand name" if necessary, and we'll save a couple decades of frustration.
jjohnjj: Thanks for the reference. Sirota hit the nail on the head.
Seymour Hersh, for forty years one of America's leading investigative reporters, said this:
"All of the institutions we thought would protect us -- particularly the press, but also the military, the bureaucracy, the Congress -- they have failed… So all the things that we expect would normally carry us through didn't. The biggest failure, I would argue, is the press, because that's the most glaring…. What can be done to fix the situation? [long pause] You'd have to fire or execute ninety percent of the editors and executives."
Hersh sound like V. Lenin to me, but what can you do? He is right. Why stealing minds of hundreds of millions of people is not capital crime, more heinous than stealing 3000 lives on 9/11?
jjohnjj,
Socialists are progressives, and they recognize that what you call "corporate socialism", capitalism, is no more socialist than "national socialism", fascism, and both are ideologies socialists stand firmly against. I'm aware of this use of the term socialism in US society, but I didn't think progressives agreed with it.
Liberal or Progressive?
David Sirota said it better here on Commondreams in October 2005.
http://www.commondreams.org/views05/1019-27.htm
In his view, Liberals strive to clean up the various messes made by Capitalism (pollution, poverty, disease, illiteracy, foriegn wars) all at taxpayer expense.
Progressives strive to prevent Capitalism from making the those messes in the first place.
Progressives are not socialists. In fact, they stand firmly against corporate socialism.
They like investment, free enterprise, and private ownership. They just beleive that entrepenuers should not be allowed to dump the costs of doing business onto the environment, the consumer and the taxpayers.
I think it's time we bring back the phrase "Obscene Profits"... haven't heard it much since Reagan became President.
Profits: Good... Obscene profits: Bad.
observer,
I agree that confusing labeling is usually intentional, but one way to fight the confusing labeling is to attempt to introduce more accurate labels.
Probably the most abused word in the political vocabulary is "freedom." Freedom for whom to do what? Mostly, it is a zero sum game, as you imply with your point that the liberation of capital often means the enslavement of workers. Pretty much all words with the root "liber", meaning "free" in Latin, suffer from the same problem.
We can all benefit by more insightful and deeper analysis, as surely there is no limit to the possible depth of analysis, but we must develop a consensus of some critical mass of individuals to have any hope of effecting change, and so we have to try to connect on some manageable level, and that is what most of us try to do here.
kivals:
Multiplication of different labels like "loser" liberals or libertarians or even neo-conservatives is either product of confused mind or tool by which shrewd minds confuse uninitiated. Such diffuse and multidimensional as liberty cannot possibly become organizing principle of society, while it can easily become emotional banner for organizing mob. History of the United States, especially for last 60 years prove beyond any doubts how liberation of capital at the expense of enslavement of people brought fledgling American Empire into position of full dominance over the world. Long march of Liberalism, that quintessence of classical Capitalism, allowed its General Stuff, the United States Government, to maintain illusion of personal liberty amongst so called middle class Americans.
That illusion is fading out fast not only because Americans became smarter (they did not), but because American Capital is relatively poorer. Hence, militarization and securitization of American system. And what is the first wall of defense? It is wall of silence over real nature of American society, lack of clear definitions, and multiplication of corrupted words.
Rectification of words is the first step on the way to rectify state, according to Confucius. So, liberalism in all its flavors should be send to place where it belongs: the dust bin of history.
I've posted a few similar articles on my blog in a similar vein:
http://paulbramscher.blogspot.com/2007/05/make-way-for-progressives-liberalism.html.
Someone posted something here in another thread a week or two ago about what is the difference between liberalism and progressivism, so I tried to answer it there.
Good article. Loser liberals frame the argument in such a way that the non-wealthy should be thankful for getting scraps at the table and should never consider challenging the fundamental premises on which the political-economic system is based.
The article reminded me of how "libertarianism" is misnamed. Libertarians want to believe that they defend "liberty," meaning limited government among other things, and that others are the enemies of "liberty." But of course they define "liberty" in a very strange manner.
To libertarians, "liberty" means that the government protects private property rights first and foremost, and then does a few other things, like police and national defense, that private parties could not possibly do effectively (don't tell Blackwater). Of course if the government is going to defend private property, it must be able to determine what belongs to whom and must set up rules for doing so. The libertarians generally assume that the rules should be obvious, demonstrating they have never been to law school (see rules on patents and copyrights and intestacy and etc...).
In any event, probably most people on the planet would not agree that if one were to set up a limited government, as libertarians desire, protecting private property rights would be at the top of the list. Most would agree with libertarians in the importance of providing for the public safety, but beyond that, most would probably say, in no particular order, they wanted guaranteed healthcare, nutrition (especially for children), education, childcare, clean water, clean air, decent job opportunities, good transportation systems, freedom from wage slavery, and the freedoms normally associated with the Bill of Rights. The protection of private property would most likely be far down the list.
And so, in the same spirit of renaming traditional liberalism as "loser liberalism," maybe "libertarianism" should be renamed "privatepropertyism."
The state vs. free market dichotomy is an illusion. Government laws covering property rights determine how the market functions. A good way to think of this is to consider railroads; trains follow the tracks laid down for them. Move the tracks, and the trains wind up someplace else. Even arch-conservatives admit as much when they say "cut capital gains taxes to provide more investment in America." That presupposes that America needs more investment relative to adequately compensated labor and to government fiscal balance, but the point is clear. The market works according to government rules.