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The prose in this piece is sufficiently smooth that one might almost be carried away by its perhaps slightly-too-clever argument that "limousine liberalism" -- to blame for many current woes -- is finally meeting its comeuppance. The piece's message is that the real villain is not liberalism, limousine or otherwise, but the capitalism that it has served. Consider this passage:
Brave and audacious as they were, rarely had the rebel movements of
the fabled sixties or those that followed explicitly challenged the
underlying distribution of property and power in American society. And
yet if liberalism had proved compatible enough with liberty, equality,
and democracy, capitalism was another matter.
A case could be made that some of the sixties movements did challenge "the
underlying distribution of property and power in American society." But since Fraser in this piece never bothers to define capitalism, he is free to argue, or at least to imply, that the only movements in recent years that have challenged "the
underlying distribution of property and power in American society" have done so under an anti-capitalist banner.
The implication is, at best, dubious. In 1976, Sen. Fred Harris ran for the Democratic presidential nomination on the message that what was needed was "a fairer distribution of wealth and income and power." Harris framed that message in terms of left-populism rather than (explicit) anti-capitalism. Bernie Sanders has framed a similar message against the backdrop of a stated commitment to democratic socialism. But that commitment has been mainly a matter of ideological self-labeling rather than program, since, as Fraser himself notes, Sanders's proposals have been mostly a left-tinged version of the New Deal, not anything notably more radical.
Btw, this is not to deny that Sanders is a socialist: within certain wide limits, a socialist is anyone who calls himself or herself that, and Sanders, who joined the Young People's Socialist League as a student, has long embraced the label. But Fraser the historian, in ignoring Fred Harris and his left-populist presidential campaign -- one that occurred after the New Left had burned itself out and when 'limousine liberals' for their part were somewhat in retreat -- can reasonably be faulted for having fallen into one of the memory holes of recent history.
In discussing post-1949 China in her classic States and Social Revolutions (1979), T. Skocpol quotes (on p.274) a passage from a 1975 article by Martin K. Whyte on how post-revolutionary China addressed the issue of inequality. The Chinese regime, according to Whyte, aimed not so much to eliminate income and other inequalities as to "mute [their] consequences." In this 40-year-old article, Whyte wrote:
People in high positions in China are viewed as entitled to certain kinds of differential rewards and authority, but at the same time flaunting authority or engaging in conspicuous consumption is tabooed. There is thus a concerted effort to blunt the subjective impact which existing inequalities might have on the initiative and dedication of the have-nots in whose name the revolution was fought.
The notion of the subjective impact of inequalities clearly relates to inequality's tendency, in some cases, to undermine the social bases of self-respect (as discussed in the comment thread attached to this post). My impression is that conspicuous consumption is no longer especially discouraged in China; some might consider that one of the acceptable prices to pay for having escaped the more destructive aspects of Maoism, but it's interesting that, 40 years ago at any rate, Chinese policy was apparently very conscious of what Whyte labeled the subjective impact of inequality.
Though Skocpol thought China was different from post-revolutionary France and Russia in this respect, I'm not so sure. The addressing of pretty much everyone as "citizen" after 1789, to take one example, might have been one way in which the new French republic tried to, quoting Whyte in this different context, "mute the consequences" of the inequalities that remained after the Revolution. Just a stray thought...
In the last several decades, inequalities of wealth and income within many countries (especially, though not only, 'developed' countries) have been increasing, even as aggregate income and wealth gaps between countries have been tending to decrease somewhat (though still leaving wide disparities). Within-country inequality has reached a point where it has now become an issue in, to take one of many possible examples, the 2016 U.S. presidential campaign.
Is inequality of income and wealth objectionable because it produces other harms, or at a certain level is there something intrinsically objectionable about extreme inequality, irrespective of any possible consequences? Why should people care, say, that, given current trends, the top 1 percent of Americans will soon hold more wealth than the bottom 99 percent (as I have seen asserted): is it because the very wealthy exercise disproportionate political power, thus distorting or nullifying democracy, or is there something inherently offensive and objectionable about the disparities? Similarly, should the extreme disparity between CEO pay and the pay of a median worker be of intrinsic concern? Or, to cite an example from the previous post on Lagos, is the existence of slums in close physical proximity to wealth objectionable in itself, or is it objectionable only or mainly because the basic material needs of those living in the slums are not being met in an economy that is operating well for the upper layer(s) of the population?
Many are probably familiar, either from first-hand experience or from photos, with the phenomenon of upscale houses or apartment buildings built right up against slums in cities in 'developing' countries; by contrast, in cities in 'developed' countries there tends to be more physical distance between poor neighborhoods and affluent ones. (ETA: Of course, one can also find that distance in certain cases in the developing world as well.) Is inequality more morally objectionable when wealth and poverty exist in close physical proximity, or is that simply an aesthetic, for lack of a better word, consideration? Are poor people injured in some additional way by being physically confronted, as it were, on a daily basis by the existence of people who are enormously better off than they are?
More questions. Is it "better" to live in an urban slum than in rural poverty, or does it depend on individual preferences? Is that sort of like asking whether someone would prefer to be executed by injection or by firing squad? Or does it depend on the particular circumstances of each case? (I think probably it does.) The continuing movement of people especially in the developing world from rural to urban areas is well known, but how many move back in the other direction? (I assume rough figures are available for particular countries, but I'm not going to look for them right now.)
In sum, I'm not altogether sure of the answers to many of these questions, but they strike me as worth asking, perhaps especially by those who think of themselves as egalitarians.
ETA/update: See the comment thread for, among other things, a helpful comment by js. on what it means to say that something is "intrinsically" objectionable.
Extreme inequality is certainly not unique to Nigeria, but this report, which aired on the PBS NewsHour a couple of nights ago, vividly depicts the economic disparities in Lagos. It's part of a series on Nigeria that is exactly the sort of thing public television should be doing.* Note, incidentally, Bill Clinton's appearance toward the end in the section on Eko Atlantic City.
(*I watched it online, as I don't have a working TV setup, as I've mentioned before.)
ETA: As discussed in the comment thread, the issue is not inequality per se, but rather the failure to meet the basic needs of a large portion of the population despite economic growth.
This year's economics Nobelist, Angus Deaton, was interviewed a couple of days ago on the NewsHour. I was a bit bothered by his statement toward the end that "there’s been very little serious discussion [of inequality] until recently," which I think was, well, unhappily or unfortunately worded (trying to give him every benefit of the doubt here -- he probably meant a particular kind of serious discussion, but it came out as just a bald statement). I also thought one of Judy Woodruff's questions was rather silly (n.b. I think she's generally a competent, hard-working journalist), but I won't waste time pointing out the question. (Or more precisely, I won't take the time to point it out.)
The observation that "mature" or "consolidated" democracies virtually never fight each other, a/k/a 'the democratic peace', has been linked by some researchers to (among other things) patterns of trade among democracies. However, the democratic peace is not usually connected to the changing global division of labor and global North-South inequalities. Nicholas Lees's article in the June issue of Millennium -- "Structural Inequality, Quasi-rents and the Democratic Peace: A Neo-Ricardian Analysis of International Order" [abstract here] -- explores "the causal connections between global inequality, class formation and the democratic peace" through the lens of the neo-Ricardian idea of quasi-rents (p.492). I won't try to summarize all the details of the article; rather, this post will cover some of the piece's key points while offering some related thoughts.
To begin, it will be helpful to rehearse a bit of recent history. Starting in the early or mid-1970s, 'the Keynesian accommodation' and the Fordist economic model, which together produced several decades of strong economic growth and economically secure working classes in the developed capitalist countries, broke down. In tandem with, among other things, the end of fixed exchange rates, increased capital mobility, and the relocation of manufacturing to parts of the global South, the breakdown of Fordism marked the end of capitalism's 'golden age' (the phrase is from Hobsbawm, The Age of Extremes, who in turn borrowed it from a 1990 book, The Golden Age of Capitalism, edited by Marglin and Schor). The result was increased inequality, wage stagnation, the weakening of organized labor, and a decline, to use the language of Lees's article, in workers' ability to bargain for a share of quasi-rents [for the short definition of quasi-rents, see the note at the end of this post]. As Lees writes: "The defeat of organised labour in much of the advanced industrialised world, combined with the dispersion of productive capacity to the new semi-peripheries, seems to have eroded the quasi-rents of workers in tradeable sectors in the North" (506).
The end of capitalism's post-1945 golden age was noteworthy, however, not only for what it entailed but for what it did not. First, it did not wipe out the structural advantages enjoyed by the economies and firms of the developed world. A large amount of manufacturing relocated to the semi-periphery (or the 'newly industrializing countries'), but more "sophisticated" activities, involving the interplay of innovative technologies and highly skilled workers, remained concentrated in the North. The global trade regime, as administered by the World Trade Organization, generally continued to favor the richer countries, notably though not exclusively in the area of intellectual property. Moreover, as Lees notes (summarizing Raphael Kaplinsky), buyer-dominated global supply chains allow "large buyers located in the North...to bargain down producers of generic manufactures," such as textiles and furniture (500). Thus, while "within-nation inequality has increased almost worldwide" over the past thirty years, "population-weighted between-nation inequality of purchasing power-adjusted incomes has decreased," but only decreased "slightly -- largely as a result of moderate increases in per capita incomes in China and India" (502; emphasis added).
Secondly, the end of capitalism's golden age was not accompanied by a collapse in the framework of international politics and specifically not by the outbreak of a major war involving the great powers. On the contrary: in the late 1980s and early '90s the Cold War came to a (relatively) peaceful end, while the phenomenon of interstate war went into decline, as did, albeit more unevenly, armed conflict in general. This conjunction might seem surprising: some might have expected a period of considerable economic turmoil in the 'core' states of the system to have led to a breakdown of order in international politics, or at least to have engendered more violent conflict rather than less.
But perhaps the decline in armed conflict, of which the democratic peace is the most theorized aspect, is only temporary; perhaps the democratic peace rests on or presupposes a degree of economic security in the 'advanced' countries rooted in the now-vanished political economy of Fordism, which, among other things, afforded workers access to quasi-rents through strong labor organizations. If so, the end of Fordism, and the concomitant decline or disappearance of the relatively widely shared prosperity in the 'advanced' countries that Fordism underwrote, could be expected eventually to erode the democratic peace.
That, at any rate, is a possible implication of Michael Mousseau's argument about (to quote the title of one of his articles) "the social market roots of democratic peace." In brief, Mousseau's argument, as Lees presents it, is that economic development in 'contract-intensive societies' (i.e. those based mainly on impersonal market exchange rather than patron-client arrangements) produces non-belligerent values that undergird such societies' lack of hostility toward each other (509-510). By contrast, patron-client networks promote "strong in-group identification and hostility to out-groups -- values which Mousseau argues are externalised in the foreign policy of states" organized on clientalist, neo-patrimonial lines (511).
"In the contemporary world, contract-intensive societies have tended to be social market democracies in which the benefits of economic development are distributed fairly widely" (510). However, as these benefits become less widely distributed in developed capitalist economies (see above), the logic of Mousseau's argument suggests that the values supporting the democratic peace could be undermined (512). 'Advanced' democracies have not hesitated to depart from their professed liberal values when such a departure has been deemed necessary "to maintain the global political and economic status quo," and "[i]f the socio-economic foundations of this status quo were to come under more serious strain, actors within the core might actively reject these liberal values" (513). Lees wisely avoids any predictions about a resumption of interstate conflict in the North, however, observing that several factors may work in the opposite direction (513).
Lees makes a strong case that a combination of Mousseau's approach with structuralist theories of class formation and the North-South divide sheds light on the deep foundations of the democratic peace. But if the democratic peace is seen as merely one aspect of the broader decline in armed conflict, Mousseau's perspective may be less helpful. Mousseau's 'social market explanation' of the democratic peace, which roots both democracy and peace in a particular kind of social and economic development, conceivably could be extended to cover the decline of armed conflict in general. But here it might run into problems: perhaps one could show a connection between 'contract-intensive' economic development and the overall decline in armed conflict, but such a connection is not immediately obvious.
John Mueller's obsolescence-of-major-war argument (see, e.g., here) and/or Douglas Gibler's 'territorial peace' argument (see, e.g., here) might well be better explanations of the overall decline in war. Mueller, in contrast to Mousseau, takes a more constructivist and elite-oriented view, arguing that great-power war has become so normatively unacceptable that it is no longer part of the set of options that decision-makers have in their heads. In Mueller's view, peace among 'developed' countries rests less on the material circumstances of their populations than on most leaders' and publics' conviction that war has none of the positive features that were once attributed to it, especially in the late nineteenth and early twentieth centuries (i.e. pre-1914). In their different ways, Mueller and Gibler view the democratic peace as one part of a larger trend, one that may be strongest in but is not limited to the rich countries of the North, and Mueller does not draw the tight connections Mousseau does between material conditions, liberal values, and peace. (Gibler may not do so either, but I'm less familiar with the details of his work.)
In the opening of The Age of Empire, published in 1987, Eric Hobsbawm wrote that "the question of the origins of the First World War...has remained alive, because the problem of the origins of world wars has unfortunately refused to go away since 1914" (p.6). Although the upcoming hundredth anniversary of the outbreak of WW1 has occasioned a renewed flurry of interest in its origins, one wonders whether, from the standpoint of 2013, the origins of world wars is an issue of anything more than purely historical concern. It has been argued that with each further year of great-power peace it becomes more likely (not certain, but more likely) that the two world wars of the twentieth century represent a phenomenon -- i.e., 'hegemonic' or great-power war -- which has now ceased to exist. If that turns out to be correct, future historians looking back probably will see the end of hegemonic war as the main development, beside which the democratic peace may figure as little more than a footnote.
This leads to the speculation that the research program on the democratic peace may have run its course. Scholars of international security will continue to find things to write about, and one can expect an ongoing stream of publications on civil war, terrorism, nuclear proliferation, enduring rivalries, R2P, and other matters. Increasingly, though, it appears that the most serious threats to planetary survival will not come directly from these war-and-peace issues, important as they are, but from the environmental and economic problems and crises that the capitalist world economy continues to generate. Admittedly, whether those economic forces will result in a resumption of great-power conflict, or whether the decline of interstate war is a phenomenon basically independent of trends in the global political economy, remains an open question. In any case, Lees's article deserves attention for, among other things, the thoughtful way in which it links issues and literatures that are not usually considered together.
----
Note: Rent "refers to an economic return on a resource greater than the opportunity cost of the use of that resource," and quasi-rents "are temporary rents which arise where the supply of a resource [such as technology] is fixed over the short term but not over the long term" (495).
This is offered without comment, as I don't have much time right now, except to say that it might have been framed in terms of ending extreme inequality. But the point of the 'extreme wealth' phrase is the symmetry with 'extreme poverty.'
Before returning Knight & Johnson's The Priority of Democracy to the library, I want to mention something I neglected to mention in my earlier post on the book. It concerns K&J's reference to Rawls in their discussion of "the relevance of individual capacities" in ch.8. They write:
Our pragmatist defense of democracy envisions active participation by citizens in processes of mutual discussion and persuasion. Such participation requires that each citizen be able to advance arguments that others might find persuasive. Thus, equal opportunity of political influence must attend to the conditions under which all citizens would be able to engage in discussion at this level. The depth of the anticipated participation highlights the importance of the effects of individual-level capacities for effective institutional performance. (p.234)
In other words: One of the requirements for democratic institutions to work properly is that individuals must have the capacities (abilities) to participate effectively in deliberation. Presumably that means that most adults must be able to speak and/or write coherently enough to have the possibility of persuading others of their point of view.
Knight & Johnson proceed to criticize Rawls for paying "no explicit attention to issues of equality of capacity" (p.236). Citing Rawls's Political Liberalism [PL] (1993), they note Rawls's statement that everyone must have "a fair opportunity...to influence the outcome of political decisions" (PL, p.327). But, K&J continue, Rawls
limits analysis of [this] fair opportunity to the ownership of the minimum threshold of primary goods and merely assumes that actors possess the capacities needed to effectively use these resources.... On the dimension of moral and intellectual capacities and skills, Rawls concludes that any variations above the minimum threshold [of primary goods] are acceptable and consistent with the principles of justice as fairness. Ultimately, Rawls treats as an assumption what equality of capacity treats as a fundamental feature of political equality. (p.236; footnotes omitted)
Perhaps Rawls would indeed be untroubled by some inequalities in capacities or, to put it differently, perhaps he doesn't focus explicitly enough on ensuring that individuals engaged in democratic deliberation have roughly equal capacities ("roughly" because obviously some inequality in capacities is unavoidable: not everyone has the eloquence of a Martin Luther King).
However, it's worth considering in this connection an implication of Rawls's views as expressed in A Theory of Justice [TJ]. There he says that "the primary social goods, to give them in broad categories, are rights and liberties, opportunities and powers, income and wealth," and -- importantly -- self-respect, i.e. "a sense of one's own worth" (TJ, 1971 ed., p.92). The sense of one's worth depends on a number of things, and one of them, Rawls suggests, is an ability to participate in the public life of one's society, as the following passage (p.101) indicates:
...the difference principle [i.e. the principle that social and economic inequalities must benefit the least advantaged] would allocate resources in education, say, so as to improve the long-term expectation of the least favored.... And...the value of education should not be assessed solely in terms of economic efficiency and social welfare. Equally if not more important is the role of education in enabling a person to enjoy the culture of his society and to take part in its affairs, and in this way to provide for each individual a secure sense of his [or her] own worth. (emphasis added)
Thus, given the importance of self-respect in Rawls's view and the effects of the difference principle, the Rawlsian just society, at least as described in A Theory of Justice, would likely be one in which the large majority of adults would have the capacities needed to participate effectively in democratic deliberation and, more broadly, in their society's public affairs.
Given the nature of the news cycle, the debate sparked by Pres. Obama's (successful) nomination of Jim Yong Kim to head the World Bank has long since been eclipsed by a spate of fresher stories. But I wanted to write this post before the Kim story faded into complete oblivion, because the debate over Kim raised again some fundamental questions about economic growth, inequality, and poverty.
In a column published last month criticizing the choice of Kim, Jagdish Bhagwati asserted that the Obama administration has the wrong view of development. He wrote:...perhaps the most compelling factor in Obama’s choice [of Kim] seems to have been a fundamental misunderstanding of what "development" requires. Micro-level policies such as health care, which the Obama administration seems to believe is what "development" policy ought to be, can only go so far. But macro-level policies, such as liberalization of trade and investment, privatization, and so forth, are powerful engines of poverty reduction; indeed, they are among the key components of the reforms that countries like India and China embraced in the mid-1980’s and early 1990’s....
[I]t is the rapid acceleration of economic growth in the major emerging countries that has reduced poverty, not only directly, through jobs and higher incomes, but also by generating the revenues governments need to undertake the public-health, education, and other programs that sustain poverty reduction – and growth – in the long term.
Now, there's no question that economic growth in India and especially in China has enabled millions of people to improve their living standards and leave the ranks of the extremely poor. And it's also true that economic growth generates revenues that governments, if they have wise priorities and some administrative resources, can use for public-health, education, and similar purposes. But Bhagwati failed to ask an important question: Could 'emerging countries' have reduced poverty even more by following a different, more equitable growth path?
A 2008 article by Thomas Pogge suggests that the answer is yes.* Pogge used China to illustrate his case. He argued that although poverty in China has gone down substantially, "it is likely that more equitable growth," i.e., growth accompanied by less income inequality, "would have been much better for the Chinese poor." Pogge pointed out that although China's gross national income (GNI) increased dramatically from 1990 to 2004, the relative income share of the bottom ten percent (decile) of China's population decreased from 30.8% in 1990 to 16.0% in 2004. This decrease in its relative share meant that the absolute income of the poorest decile increased "by only 75 percent" at a time when China's GNI was going up by a whopping 236 percent (see section 5.3 of the article as reprinted in Pogge's Politics as Usual, pp.100ff.).
What if China had preserved the income distribution as it existed in 1990, even if that meant sacrificing some growth? Pogge assumed, for the sake of argument, that preserving the existing income shares would have cost China 2.3 percentage points in per capita GNI growth from 1990 to 2004. Under this assumption, the poorest decile "would have done much better..., ending the period [in 2004] at an average income of $715, rather than $500, thus with a gain of 150 rather than 75 percent." (p.101) Slower, more equitable growth also would have caused less environmental degradation, a consideration that, coupled with equity, suggests that "all countries should conceive growth much more from the standpoint of their poorer population segments" (p.102, italics in original). He also pointed out that economic inequality is much easier to create (or generate) than to reverse, because the better-off are able to change the relevant rules in their favor (ibid.). There are, in other words, lock-in effects (though Pogge does not use that phrase).
Pogge also highlighted the growth in global income inequality from 1988 to 2002, with the relative share of "the poorest 30 percent of humanity" down by about 20 percent during that period, "from 1.52 to 1.22 percent of global household income" (p.106). Again, inequality translates into differential influence over the rules that shape the distribution of global income and wealth (p.107).
These are the sorts of considerations one should keep in mind when reading the celebratory assertions of Bhagwati and others about rapid economic growth in 'the emerging countries' and its effect on poverty. Of course such growth has reduced poverty, in some cases substantially, but poverty would have been reduced even more if that growth had been more equitable, even if less rapid. Neoliberal globalization, heralded by its supporters for reducing poverty, has likely not reduced poverty as much as a more equitable form of globalization would have, and it has perpetuated the unequal structure of influence in global institutions. The appointment of Kim to the Bank will obviously not drastically change this, since no single appointment could have such an effect and the institution will no doubt exert its organizational pull over any leader. But Kim's critical stance toward neoliberal globalization -- or what was his critical stance some years ago, at any rate -- perhaps offers a bit of hope. In any event, Bhagwati's critique was completely off the mark.
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*T. Pogge, "Growth and Inequality: Understanding Recent Trends and Political Choices," Dissent (Winter 2008), reprinted (in slightly different form) in his Politics as Usual: What Lies Behind the Pro-Poor Rhetoric (Polity Press, 2010), pp.93-109.
Nicholas Lemann reviews (h/t) a number of books on inequality and related issues, written from different points on the ideological spectrum. (Haven't read the whole piece, just the opening and the last part, but thought I'd pass it on.)
Fareed Zakaria says the Obama re-election campaign has the wrong message: instead of emphasizing 'the Buffett rule' and reducing inequality, the President, according to Zakaria, should stress his proposals to increase spending on infrastructure, R&D, and education, and Obama should contrast those proposals with the Republican focus on budget-cutting.
Zakaria believes, apparently, that the Obama campaign can't walk and chew gum at the same time: either it must focus on reducing inequality or focus on investment in infrastructure, etc. But why not emphasize both? Here's where, if I may switch from one bad metaphor to another, the rubber hits the road: Zakaria doesn't like all this talk about inequality. Why not? Because it runs counter to his shopworn view of Americans' moral psychology: Americans, he writes, are "aspirational" not "envious," therefore focusing on inequality is bad politics in the long run.
This is, to be blunt, a load of crap. The U.S. now has a more unequal distribution of income than Kenya (and several other developing countries). The notion that you must be "envious" if you want a multi-millionaire or billionaire to shoulder a slightly larger share of the tax burden is nonsense.
Americans aren't envious, they are "aspirational": how many thousands of times have you heard this bromide repeated by one pundit or another? Americans don't envy the rich, God forbid; they want to become rich themselves. What if the real situation is that Americans want a less unequal distribution of wealth and income because huge inequalities are offensive to a basic sense of justice?
Zakaria, who earned a Harvard Ph.D. with a political science dissertation on the U.S.'s growth and emergence as a world power at the turn of the twentieth century, is slated to be the main speaker at Harvard's commencement this spring. If he trundles out this platitudinous b.s. about envy and aspiration in his speech on that occasion, I hope he gets booed off the podium.
Here (audio).
(via Occupy the Airwaves)
In the current issue of Foreign Affairs (here); looks like one has to register to get the whole thing.
Excerpts:
...in or around 1978, American life changed.... It was, like this moment, a time of widespread pessimism -- high inflation, high unemployment, high gas prices. And the country reacted to its sense of decline by moving away from the social arrangement that had been in place since the 1930s and 1940s....
This is a story about the perverse effects of democratization.... Once Walter Reuther of the United Auto Workers and Walter Wriston of Citicorp stopped sitting together on Commissions to Make the World a Better Place and started paying lobbyists to fight for their separate interests in Congress, the balance of power tilted heavily toward business.
Of course the move to neoliberalism occurred across much of the world, not just in the U.S., but the consequences in terms of inequality were worse here.
Update: See also Zakaria in today's WaPo on social mobility in U.S. compared to Europe. (Link to be added later)
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