Dec 27, 2017
President Trump promises rapid economic growth compliments of his tax cut. Even if he is correct, however, the private sector expansion he celebrates will likely leave huge holes acknowledged even by many conservative economists. California is burning. Our highways, sewers, bridges, and tunnels are now graded at nearly failing. There is widespread agreement that repairs and restoration of our infrastructure must be funded on a massive scale. Yet what shape will this spending assume? Which projects will be funded? Who will own the new and renovated structures and with what responsibilities? If the tax cut model of gifts to the wealthy and well positioned is followed, the damage will include not only inconvenient or poorly maintained rails, roads, and other public services but also further erosion of our democracy itself.
In a prophetic essay a year ago in Boston Review Brown University political theorist Bonnie Honig, author of Public Things: Democracy in Disrepair, pointed out that the Trump family's decision to opt out of residence at the White House in favor of life in Manhattan or Florida reflected a disdain for pubic things. Neoliberals differ on some issues, but one key notion most hold is the right to opt out of publically provided services or goods one does not need or want. This neoliberal mindset imposes substantial burdens on the rest of us. A recent Wall Street Journal article only confirms Honig's concerns. The Wall Street Journal found that the president has spent more than 100 days at one of his properties, including more than a month each at his golf course in New Jersey and at Mar-a-Lago in Florida. Citizens for Responsibility and Ethics in Washington points out: "visits to his properties in Florida costs the local Palm Beach government so much that it considered raising taxes."
The opt- out culture has more widespread and destructive effects. As Honig puts it: "Charter schools and voucher programs invite locals to opt out of public schools while drawing on public funds that might have improved the public education system rather than provide an alternative to it." When these schools succeed, often by excluding special needs children, their success is taken as proof of the inadequacy of public education.
Neoliberals generally resist or seek to limit the services that are provided by public entities. When these must be provided, the service should be privately owned and run like any other profit maximizing business. This requirement, however, exposes some of the tensions and contradiction within neoliberalism. What if, as is often the case, there are very few businesses that can provide the service? Won't these firms be in position to charge monopoly prices for their services? If you believe in limited government--at least limited with respect to any possible downward redistribution--you will allow monopoly to serve in the faith that in the long run everything will work out. Economists more attuned to the real concerns that Smith, Mill, and Ricardo voiced regarding monopolies will demand anti trust or insist on regulation of "natural monopolies."
In recent times, both here and internationally, the former course has prevailed. Things have not worked out and privatization has become a means by which politically and socially well positioned have increased their power. But it was not always that way. University of Missouri-Kansas City economist Michael Hudson puts it thus:
"To prevent such price gouging and to keep economies competitive with low costs of living and doing business, Europeans kept the most important natural monopolies in the public domain: the post office, the BBC and other state broadcasting companies, roads and basic transportation, as well as early national airlines. European governments prevented monopoly rent by providing the basic infrastructure services at cost, or even at subsidized prices or freely... The guiding idea is for public infrastructure to lower the cost of living and doing business...[With privatization]. the economy ends up being turned into a collection of tollbooths instead of factories..."
Trump's detailed infrastructure proposals still are not out, but early suggestions about tax credits to corporations that supply such infrastructure are problematic. Corporations are likely to invest only in those projects with likelihood of monopoly profits, i. e. those where they can impose their own tollbooth. This will leave some very important services underdeveloped and others overly costly or inconvenient.
Converting public things into private goods reinforces a trend toward corporate oligarchy. Traditional fiscal conservatives hide their support of oligarchy behind warnings of dire consequences of government overspending. Their stated reason for opposition to generous public spending on public goods is a concern about possible bankruptcy. Ad nauseam they chastise us: Just as families that splurge beyond their means go bankrupt so too will nations that spend too much on public goods. The analogy is false. Our government, unlike its citizens, controls and issues its own currency. Trillions poured into the economy by the Federal Reserve for the bank bailout occasioned little more than a yawn in world financial markets and no inflation.
Republicans' and centrist Democrats' concerns about the debt are a smoke screen to attack Social Security. Neoliberals' real fear is the greater equality generous public things might foster and the coalitions across borders, ethnicities, and faiths the construction and maintenance of such goods might encourage. Honig puts the case in Whitmanesque language: "The democratic experiment involves living cheek by jowl with others, sharing classrooms, roads, and buses, paying for them together, complaining about them together, and sometimes even praising and enjoying them together, as picnickers will do on a sunny afternoon in Central Park. But the neoliberal corrective absolves us of this necessity and responsibility. That Central Park--landscape architecture's ode to the power of democratic beauty--is just a stone's throw away from the barricaded Trump Tower is only one of the many sad ironies of the story to be told here."
Public things and the democratic space they foster and are fostered by encourage both collective responses to common problems and an opportunity to address the injustices (remainders) that emerge from even the most egalitarian and idealistic processes. The physical state of our infrastructure reflects more than conventional faith in balanced budgets. It is an attack on democracy and must be resisted by appealing to and enhancing democracy itself.
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