Republican Equality

April 24th, 2009 at 8:05 pm | 10 Comments |

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Politics, like an alliance between thieves or a Renaissance mistress’s affection, is an inconstant affair.  Coalitions rise, fall, splinter, combine.  The California that swept Nixon and Reagan into power is now firmly Democratic; the “Solid South” is now a bulwark for the GOP.  Circumstances change, as do the favored policies of a given faction.  Yet there are tendencies that underlie and endure past the life of a temporary movement.  The political DNA of the Republican party — going from Federalist to Whig to the GOP (a partial and distorted picture, I know) — has persistently been allied to the middle and upper-middle classes.  If there is a “base” for such a political strain, the middle class is it; the times of darkest Republican fortunes have occurred when the party has even lost much of the middle class.

Throughout the various permutations of Republican policy, it’s easy to see why such an alliance has endured.  When the country was transforming from a rural to industrial society (a social form long associated with the growth of the modern middle class), the Whigs and, later, Republicans were staunch advocates for national investment in infrastructure and allies of industrial development.  In the face of an increasingly interventionist federal government during the later part of the twentieth century, the middle class, which also enjoyed and supported some governmental protections, found the Republican rhetoric of fiscal sobriety and civic discipline attractive.

With such a relationship between the middle class and the GOP, it’s perhaps not too surprising to see some overlap between shrinking Republican support and growing economic inequality, the rack upon which the middle class has been thrust.  David Frum has written on the simultaneous decline of economic equality in certain areas and the fall of the GOP’s political fortunes, and Jim Manzi provides some interesting data showing some correlation between the economic inequality within a given region (at the county—not state—level) and its support for President Bush.  The recent election, as inequalities and certain pressures on the middle class mount, demonstrates some of the economic challenges facing the Republican party.  If the rise of the “Reagan Revolution” can partly be understood as the belief of the broad middle class that reigning Democratic ideas of welfare and taxation needed to be reformed (splitting between Carter and Ford in 1976, the middle class swung to Reagan in 1980), 2008 shows how far Republicans have fallen with the middle class.  The most John McCain could do was eke out slim victories in a few economic demographics: 49-48 in the $50-75,000 bracket, 51-48 in the $100-150,000 bracket, and 50-48 in the $150-200,000 bracket.  McCain lost the least compared to George W. Bush in 2004 in the $15-30,000 bracket; he lost the most ground in the extremes (the under $15,000 and over $200,000 brackets).  McCain performed best in the middle class brackets, and an interesting detail of the 2008 election is that it marks the first time the Republican candidate for president lost the rich (Obama beat McCain 52-46 in the $200,000+ demographic) since at least 1976.  If the election of 2008 is representative of broader enduring trends, Republicans have lost the poor and the rich and are losing their already very tenuous grip on the middle class.  Those are not hopeful numbers for a political coalition.

Theories of the free market have long concerned themselves with the role of inequality.  In The Wealth of Nations, Adam Smith famously argues that the development of advanced modes of production and commerce undermined the stark inequalities of the feudal world.  The thirst of the rich for luxuries such as diamond buckles led to a breakdown of the system of feudal-agricultural dependence, in which wealthy landholders held not merely economic but also political domination of those below them.  Smith’s argument has two salient implications for the current political right/classical liberals/conservatives: (1) certain forms of radical economic inequality can result in significant political inequalities (witness the petty tyrannies of medieval nobles), and (2) the functioning of the free market can serve as a way of mitigating these inequalities, of leading to a turnover of wealth, of making differences in levels of income less poisonous for civil liberties.  The free market and inequality thus have a quarrelsome relationship: the market helps create inequalities, but it also undercuts the financial inequality of any given moment, allowing the rich to fall and the poor to rise.  Inequality in results is a key characteristic of a market economy, and the very operations of a free exchange can prevent these inequalities from hardening into radical caste differences.

However — and this is a crucial “however” — the market itself, particularly in the wake of modern industrialization and certain forms of government intervention, can result in inequalities so vast that they begin to undermine a faith in free markets.  And the growth of these radical inequalities can lead to a creeping sense of the hardening of financial differences.  If one of the promises of the free market as a vehicle for an authentically liberal-democratic politics is in its ability to allow for social and economic mobility, increasing doubts about the existence of these mobilities also increases doubts about the efficacy of the market and its contribution to political equality.  Radical inequalities and a sense of economic stagnation can in turn lead to a widespread rejection of the instruments of the free market and, more broadly, the free society.  The early twentieth century, that high tide of income inequality (the top .1% took home about 10 % of the national income in 1916), was also the high-water mark of the Socialist Party of America; Eugene V. Debs won 6% of the national vote in the fractious election of 1912.  Granted, the rise and fall of the SPA cannot be reduced to that single statistic, but wide income disparities perhaps set some of the conditions for this rise.

Aside from questions about social and economic ideals, this hard practical fact endures: in the modern welfare state, if a great majority believes that it can no longer economically advance, it has the political power to legislate the confiscation via taxation of the wealth of the rich.  Now, this confiscation may not succeed in reducing inequality — the grotesque inequalities of so many “workers’ paradises” are built upon the failure of this confiscation to equalize — but it can still be attempted.  In addition to ethical objections about such a policy, a kind of economic hope as well as an economic fear serve to restrain this confiscatory enterprise.  The fear is that such governmental power could be turned against the members of a temporary majority; the hope is that the poor could, too, become rich, so they would want to be able to enjoy their wealth.  But at a certain point, the fear of the misuse of power can recede before other, more immediate fears (such as starvation or death of exposure).  Social mobility, on the other hand, feeds this hope.  If one of the free market’s benefits is social mobility, this mobility itself helps increase public support for the free market and protects it from overweening government.

The free market and government regulation are, then, both double-edged entities for issues of inequality.  The free market can create radical inequalities through allowing a select coterie to dominate and entrench itself as an economic elite, but it can also unsettle entrenched elites and provide the hope of mobility through an open exchange; governmental regulations can prevent monopolies from forming and ensure limitations on the power of the extremely wealthy, but these very regulations can be tools for the hyper-rich to shut down the market and prevent competition.

What, then, to do about inequality?  How to walk that slippery tightrope, in which incentive can easily lead to addiction and assistance can become entrapment?  On the right, Frum and Ross Douthat and Reihan Salam, among others, have offered some solutions.  Many of these reform-minded critiques have drawn attention to the stagnation of wages for the middle and working classes.  These wage difficulties are then compounded by increasing expenses — for colleges, health care, housing (at least until recently), and so forth.  The decline of industry, an influx of new (and often unauthorized) immigrants, globalization of companies, and other factors have helped drive this movement toward inequality.  Without going into all the possible solutions for inequality, here are three helpful, but not exhaustive, points of reform: regulation, entitlement, and infrastructure.

In attacking certain forms of onerous regulation (on the local and federal levels for small businesses and would-be small businesses), we can lower barriers to access.  Through empowering this ground-up innovation, our society can also empower independent businesses and organizations, which would not have to rely upon the largess of huge corporations.  Republicans should also consider advancing business regulation reforms that would recalibrate the incentive structures of larger corporations (perhaps including a reform of corporate governance) in order to ensure more transparency and long-term viability.  Financial regulations serve as a means of coordinating interests, and, since the government will be deeply involved in certain financial matters, it should work for a regulation structure that encourages sustainability, transparency, and growth.  A corollary to this financial regulatory reform is ensuring the soundness of our currency and warding off crippling financial commitments for the federal government.

Labor reform is an important subsection of this regulatory reworking.  It could partially involve reform through the enforcement of labor laws.  This reform would also mean encouraging the development of technical and other high-economic-value skills here in the United States while also providing for increased wages for those without advanced degrees.  Any effort toward egalitarian reform will have to confront the fact that the financial gains of the past twenty-five years have been disproportionately distributed based on levels of education.  According to these statistics compiled by ETS, lifetime income for males has gone down (measured in constant 2005 dollars) for all education levels below that of a master’s degree.  A tighter labor market may help increase these wages, as may a reconsideration of certain credentialing standards in order to increase career mobility.  This egalitarian type of reform could take steps toward assuring that the economy works for a broad section of society and not only for the holders of postgraduate degrees.

We can also advance the cause for equality in scaling back or reforming certain government programs.  I don’t especially mean that infamous “pork” here but more certain welfare-state policies that feed into a cycle of inequality through subsidizing poverty-producing behavior.  For example, insofar as some of the “Great Society” welfare policies encouraged the breakdown of the poor urban family, they contributed to the growth of inequality over the past few decades.  The bipartisan efforts toward welfare reform in the mid-1990s may present a tentative step in the direction of such egalitarian reform.  Furthermore, the general preference for federal non-intervention into the market (a position Republicans have at least said they support) can also limit the ability of the wealthy and politically-connected to use government power in order to enrich themselves.

Prudent investment in infrastructure and other public goods — highways, rail lines and other modes of transport, schools, energy sources — may be another tool for coping with inequality.  Infrastructure can be the foundation of the wealth of tomorrow, and a common investment can help provide a common wealth.  Throughout the history of the United States, investment in infrastructure and public education has been a key vehicle for growth, public betterment, and civic integration.  Education reform would include working towards a system that meets the real needs of students and tries to make the best of each student’s individual potential.  The aim for such investments should be the creation of a common platform from which talent and effort may rise.  These types of investment, in giving people access rather than entitlement, encourage the entrepreneurial spirit.

In addition to other policies (especially in the health and industrial sectors), these reforms can strengthen the middle class and help the poor advance.  Politics is not only about interests, but it is partially about interests.  If it wants to appeal to the middle and lower classes, the GOP will need to put forward policies that speak to them and their needs.  It needs to start a positive feedback loop, in which increased economic opportunity and growth in turn lead to increased capacities to make use of those opportunities.

Reducing inequality, strengthening the economic middle, and increasing economic mobility could prevent a scenario in which the USA becomes the inner cities of the 1960s and 70s writ large: a society torn by the struggle of ethnic resentments, in which the poor are shunted into housing projects and hooked on various kinds of pernicious dependencies while the rich wall themselves off, a society in which the middle class is eviscerated through a combination of taxation, crumbling infrastructure, and broken public trust.  That kind of scenario would not only be bad for the right (How many Republican mayors has Chicago had in the past seventy years? 0); it would be bad for the country. That kind of dynamic leads to cronyism and often well-intentioned but usually counterproductive redistributive policies.

If there is a political or a partisan imperative for coping with inequality and the middle class, there is also an ethical one.  Too often the right has ceded the ground to the left in talking about broader questions of social justice.  Indeed, we have reached a point where a phrase such as “social justice” has a decidedly left-wing ring.  Questions of basic fairness and civic sustainability are not “left” or “right” issues: they are issues that concern us all, as people and as citizens of the United States.

A case can be made for a free market egalitarianism.  There should be no fear of arguing, insofar as it can be argued, (and many, to be fair, are not afraid of making this argument) that freedom and the free market can be a platform for some of the best forms of compassion.  Private charity is wholly compatible with a capitalist, individualist society; moreover, public institutions and regulations can be oriented in such a way that they encourage self-development and financial independence while also recognizing economic liberty.  This kind of free market egalitarianism means using the government’s intervention in the market — and the government, as long as it exists, will intervene — in order to encourage and sustain a public spirit of independence and liberal self-sufficiency.  It means taking into account the current policy structures of the government and not merely wishing them away in some anarchic-utopian fashion.  Sometimes, it will require the elimination of programs, where those programs exacerbate inequality and corruptingly distort freedom, and, sometimes, their reform.  It would mean an opening of opportunities and a rigorous accounting of realities.

Perhaps the best means of coping with inequalities is through the empowerment of individuals — not the imprisonment of talent but its channeling and development.  The right has a place (as does the left or any other political orientation) in speaking for a liberal egalitarianism, an equality of diversity and not homogeneity, in which the free choices of free men and women flower in a richly variegated profusion of dreams, efforts, and accomplishments.  This variety will lead to differences in outcomes — how could it not? — but these differences need not cripple our republic or undermine our faith in an equality transcending politics: that we are all men and women, with the responsibilities and possibilities that our humanity entails.

Recent Posts by Fred Bauer

10 Comments so far ↓

  • sinz54

    In David Frum’s article, which you cite, he states that skyrocketing health care costs have eaten away at the incomes of middle-class Americans. In fact, if present trends continue, health care will consume 20% of U.S. GDP in another 10 years. Yet Mr. Bauer gives short shrift to this problem.Health care costs are rising rapidly, I believe, because while Americans are living longer, they are not retiring later. In the 1930s, Franklin Roosvelt set the official retirement age at 65, because at that time, that was the median life expectancy. In other words, half of Americans would not even live long enough to reach that retirement age.Today, the average life expectancy of Americans is 78, or for today’s kids, even 80. More and more Americans live till they’re 90, after having retired at age 65 and no longer work to produce for the nation. This forces Medicare (and Social Security as well) to pay out benefits for 25 years of that person’s life, which is unsustainable. So Job One for the GOP has to be to advocate gradually raising the retirement age for SS and Medicare, from its current 65 to something like 73 (at least).

  • Bulldoglover100

    I agree with the issue of health care and this article not dealing with that reality but I have another problem with it and it’s attempt to correlate the middle class and the GOP. The GOP has always been known for white men as it’s strongest entity but has recently been over taken by the lower intellect and income because they are easiest to frighten with untruths. Hence the tea parties which held no basis in reality and the Palin supporters who seemed to thrive on rage.I am a middle class Republican and I could NOT vote for any ticket that included someone as ignorant and incourious as Sarah Palin. Regardless of someone liking these facts does not change them. It’s a reality we better deal with before it’s too late.

  • danbmil99

    Interesting article. A bit wordy (even for me) — but I think I agree with most of what the writer says. I too am unclear on where he comes down wrt health care, which is the 800 lb gorilla in the living room no one seems to want to mention (or is that a White Elephant?)Perhaps the most interesting tidbit was the fact that > $200K voters went for Obama. Think about this: they are the people he promised to tax! What is going on there?Are the well-off guilty about something? Or, on a pragmatic level, do they realize that if society crumbles, those $200K/yr jobs are going to dry up, and only the *mega* rich will have real freedom?I live in an area where the median family income is greater than $200K. It’s also staunchly liberal (Priuses, NPR…) My perception is that people here know they are living on a precipice. Their overpriced houses, high-paying but stressful jobs, unbelievably expensive schools for their kids… it just feels sort of fake, unsustainable. There is also a degree of liberal guilt, which clearly played into Obama’s win. But there’s something else going on — a fear of where things are going.Most of these people would be happy to pay a marginal tax rate of 50% and live like they do in France. They are not scared of socialism, but they *are* scared of a dog-eat-dog society where the underclass is poor, hungry, sick, angry, and armed.

  • sinz54

    Bulldoglover100 sez: “….I am a middle class Republican….”Are there any Republicans you could vote for? Which Republicans do you like best?Because as far as I can tell, you as a “middle class Republican” has never had one positive thing to say about the GOP, past or present. Do you know what the term “moby” means?

  • sinz54

    danbmil99: The “nouveau riche” class of young entrepreneurs tend to be transnationalist and socially liberal. Among the wealthy of Silicon Valley, Bush was hated, the Iraq War was hated, and social conservatism is hated.Sergey Brin and Larry Page don’t care if Obama raises their taxes a little bit. Each of them is already worth $12 billion. And even the most radical Marxists on the Internet use Google.

  • barker13

    Re: Sinz54; 4/25/2009 7:55 AM –Hear, hear!(*CLAP-CLAP-CLAP*)But beyond tactics, we’ve got to focus on strategy and to my mind while I’m all for any “tinkering” that serves to move the revenue vs. expenditure ratio closer to being in line, long term I believe we should be working towards (though it’ll take years…) a public concensus that what amounts to a ponzi scheme isn’t really the best way for Americans to prepare for retirement.Yes… moving TOWARDS privatization.Yes… moving TOWARDS self-reliance.Sinz. You pointed it out yourself:”In the 1930s, Franklin Roosvelt set the official retirement age at 65, because at that time, that was the median life expectancy.”Well… even setting aside the whole concept of the “Ponzi” and how at the beginning you OBVIOUSLY have far more people (what was it.. 35 to 1 or something like that in 1935?) paying in then people receiving payouts… under the logic of even FDR you need to – at a bare minimum – tie the retirement age (when you can start collecting) to life expectancy. (As noted… presently roughly age 78 norming for men and women.)BILL

  • sinz54

    barker13: The stock market disasters of 1929-32, 1973-74, and 2008 should be enough to convince even you that you can’t depend on your own funds in the stock market for your retirement.Private defined-benefit pension plans worked because all the workers’ funds from a company were pooled into a giant pool run by the pension fund manager. The fund manager could afford to take prudent risks, since the size of the pool would always dwarf any one worker’s retirement pension.Now that more and more corporations have abandoned pension plans for defined-contribution individual 401(k) plans, the risk-limiting feature of pooling has been lost.If private corporations won’t pool workers’ contributions anymore, then the Federal Government will have to do it. The Federal Government may invest a part of that in the stock market someday–as long as it, NOT the worker, retains control over the investment pool.But the 401(k) plan is an experiment that failed.

  • krove

    The viewers of Fox News may not agree, but the no one can fudge the numbers from the network’s own polling (.pdf) showing that Americans like Barack Obama, and to a lesser extent the Democratic Congress, and want to see both reelected.In the next congressional election in 2010, are you more likely to vote for the Democrat to help Barack Obama pass his policies and programs or vote for the Republican to provide a check on Obama’s power? [question slightly reformatted]Democrat: 46 percentRepublican: 33 percentIf the 2012 presidential election were held today, would you definitely vote to reelect Barack Obama, probably vote to reelect Obama, probably vote for someone else, or definitely vote for someone else? Vote to reelect Obama: 52 percent (37 percent definitely, 15 percent probably)Vote for someone else: 31 percent (23 percent definitely, 8 percent probably)There’s very little good in these numbers for the GOP. Starting first with the 2010 data, fewer Republicans (78 percent) than Democrats (86 percent) want to vote for a congressional candidate of their own party, and Independents lean slightly towards the Democrats (33 percent to 26 percent, with a large 34 percent plurality saying it’s too soon to be pushed in one direction or the other). The 2012 numbers look even worse for the GOP, with President Obama maintaining a robust +21 reelect number, including a +14 number among those definitely supporting or opposing him. Digging deeper into the weeds, 13 percent of Republicans would vote to reelect the President, compared with the 9 percent support he received from Republican voters in 2008, and Independents line up in favor of a second term by a 15-point margin, nearly double the 8-point victory he scored within such voters last fall.You might think that this would lead the GOP to change it’s failing ways. But judging from the past few months, as well as the latest posturing from the party, I don’t know how likely that outcome is.

  • sinz54

    krove: Obama is still in his presidential honeymoon phase, having been in office just over 3 months. His popularity ratings are right in the average of popularity ratings for newly inaugurated Presidents–including George W. Bush, I might add. Check the approval ratings of the last 5 or 6 past presidents in April of the first year of their terms.Other Presidents who did even better–notably Reagan, who won with 60% of the popular vote and whose coattails won the Senate–nevertheless saw their party lose seats in the next congressional election.Presidential honeymoons don’t wear off until the summer. We’ll see how Obama–and his party–fare after that.

  • barker13

    Re: Sinz54; 2:23 PM –”The stock market disasters of 1929-32, 1973-74, and 2008 should be enough to convince even you that you can’t depend on your own funds in the stock market for your retirement.”(*ROLLING MY EYES*)Sinz. You can’t simply point to the BAD years. Over time – and that’s what we’re talking about here, the long haul, averages, not just snapshots in time – private sector wealth creation is simply undeniable.(BTW… how much money did you lose in the markets? Ya know… not everyone waited too long to get out… and some of us diversified our investments outside of stocks, bonds, and mutual funds. Anyway…) (*WINK*)”…the 401(k) plan is an experiment that failed.”Not for me it hasn’t, Sinz! (*SNORT*) I’m 46 years old. To my mind, looking 20-30 years years into the future based upon present day social security “math” it’s the social security system that I worry about in terms of “failure.”"Private defined-benefit pension plans worked because all the workers’ funds from a company were pooled into a giant pool run by the pension fund manager.”Earth to Sinz: As with social security (the largest “pool” one can think of) the “trick” to “working” is tied to ALWAYS having more INCOMING revenues dedicated to payment of current/future liabilities than otherwise.Sinz… the “otherwise” is here for medicare/medicaid, coming fast for social security as a whole.Sinz… jeez… don’t you follow your own logic as noted by… er… YOU…??? (See: Sinz; 4/25/2009 7:55 AM)When the *POOL* goes out of wack… upside down… it just means more people are adversely effected.BILL