We need to restore the state’s legitimacy and ability to make a positive impact on the lives of everyday people
So where do we start? How do we apply the principles behind liberalism through the careful use of state power in a way that preserves liberty and guarantees justice for all? I specifically start by addressing state power because it’s clear that our economy and the supposedly free market is not going to be the solution. The best effort would be through a blended approach to restore state and people power, but it’s important to discuss what exactly the state can do and also establish legitimacy for the state to do these things.
As a reminder, these are many of the challenges that people are facing in the 21st century. Our free market economy sans sufficient state power looks a bit like this on a micro-level:
- Income inequality and poverty are persisting; wages have stagnated and policymakers haven’t stepped in to ensure that people can make a living
- Trends around the future of automation and AI will continue to put people out of jobs
- Insurance premiums and rising pharmaceutical costs are forcing people to crowdsource for things like insulin
- Private university tuition costs can be as high as $60k per year
- Rising rent and housing costs in big metropolitan areas where there are higher concentrations of jobs are both displacing residents and preventing future residents from moving in
- Insufficient public transportation is limiting mobility and economic growth
- Many cities have unsafe drinking water
Then at a more macro-level, here are the challenges facing cities, states, or the country at large:
- Large corporations are avoiding taxes and the state is missing out on a significant revenue stream
- Government-sponsored tax cuts for the wealthy are not making all of us richer and is merely an upward redistribution of income
- Inaction in the face of the climate emergency will displace coastal cities, result in more volatile weather patterns, and destroy infrastructure
- Non-regenerative farming techniques and continued use of pesticides will harm the animal population and impact nutrition
- Financial institutions continue to fund dangerous means of fossil fuel extraction at the expense of protecting precious natural resources and land
- Neighborhood resistance to amending zoning laws and lack of strict adherence to the construction of affordable housing will further displace working class homes from urban centers
Human progress is being hampered by the destructive tendencies of neoliberalism
When you look across this handful of challenges at the micro-level, they’re all barriers to some pretty fundamental human needs that can hinder progression along the liberal order of human progress. What makes neoliberalism pernicious is that without an understanding of how the market works and the types of decisions that people in power make, these issues seem inevitable. Inequality seems–and is indeed explained away as–natural if the market is efficient. Rich people are rewarded for working hard, and poor people are punished for their ineptitude. Their inability to adjust speaks less to the conditions of the market and more to their own abilities.
The link between health and environmental outcomes is a really good example of where the market fails those who are not in direct control. Pollution is a negative externality that isn’t properly accounted for by the market because we have extremely lax environmental regulations and companies are loathe to account for its price. The market claims to allocate things efficiently but really poor people and regions disproportionately bear the burden, because waste is dumped or materials are produced in neighborhoods that don’t have the political firepower to object. When children breathe toxic air or drink polluted water, it impacts their health and nutrition, which then impacts their cognitive abilities and developmental pathways, which then can impact their performance in school.
The free market solution to pollution is posed as, surprise, another market. Let’s create a marketplace to buy and sell the ‘right’ to pollute. This is a flawed solution because it doesn’t account for (1) all the harm that’s already been done and (2) getting to a price for pollution that people are willing to pay for because no one wants to pay for pollution to begin with–that’s why it’s a huge issue now. To argue that a market is the best way to deal with a problem caused by a market is circular logic.
All of this started because free markets do not create conditions where growth can be decoupled from negative environmental impact, and yet the market doesn’t punish the pollution emitters. Without this lens, it’s not as easy to see that markets do not equalize society and disproportionately affect the poor. At the macro-level, however, it gets a bit more clear. Injustice isn’t the natural order of things so much as it is the result of decisions made by those in power. The NYTimes defines the ‘too liberal’ campaigns of Bernie and Elizabeth by “their insistence that the ‘left behind’ in America are not actually being left behind so much as stood on. [Bernie and Elizabeth] seek to take the passive voice out of the grammar of American hardship: Your health insurance hasn’t, somehow, mysteriously been made too expensive; your brick-and-mortar store hasn’t somehow, mysteriously, been undercut. Someone did these things to you, probably by rigging the system to secure an underserved advantage. And that person was probably a billionaire.”31
We are no longer a democracy; we’re a crypto-oligarchic country hiding under the veil of liberty. Economic power has dominated society for so long and our government is so subsumed under the economy that our politicians are making decisions based on personal interests, beholden to executives with deep pockets. Our economy and society are run solely to make profits for the few, rather than to meet public needs.32
We need to take away those who are able to wield economic power and give power back to the state and the people so that the pursuit of human progress is not hampered for the proletariat because of the choices made by the bourgeoisie. Rather than debating what does or does not count as progress, we can use a pre-existing framework for thinking about the steps involved: Abraham Maslow’s Hierarchy of Needs (Figure 2).
Figure 2: Maslow’s Hierarchy of Needs33
As you may know, Maslow’s roughly categorizes five buckets of human needs into a hierarchy, with everyone starting at the bottom. He postulated that once you satisfied enough of your needs at the bottom level, or physiological needs, you’d be able to move up to the next level, and so on. Generally, however, the hierarchy is more of a guideline than a rule; it’s more likely that people have more of the bottom-level needs met along with a portion of the higher-level needs.
When our entire economic system is structured to punish poor people and reward the upper middle class, nothing on Maslow’s hierarchy is guaranteed. We’ve allowed income and wealth to become concentrated in the hands of the wealthy–the supposed investors into our economy that will then enable wealth to trickle down–but rich people aren’t doing anything for us. They’re not reinvesting into the areas that need it; they’re just getting richer. Within our neoliberal economic system, we’ve conflated corporate well-being with public well-being. We’ve privatized everything that we could and stripped public services for the poor down to its bones for the sake of profit and productivity maximization. What’s left are soaring stock prices but a vast majority of people who face direct challenges to having their safety and physiological needs met.
The hierarchy of inequality is constructed, rather than an objective economic truth
We see these things, but we find excuses for not changing our behavior. We try to cling to what we have, even if we haven’t earned it, and proponents of neoliberalism will be quick to tell you that poor people haven’t earned it either. They tend to believe that poor people are poor because they’re lazy or that as long as they work they’ll find a job. But this is a really rude straw man argument that not only isn’t true, but completely ignores the basic concept of human dignity. Humans aren’t born into a vacuum. The hierarchy of inequality was created based on our original life positions that we got when we were born. Most wealth in the States is inherited, and we’ve already discussed how the concept of the American Dream is a farce. It’s also a fallacy to think that if people receive unemployment benefits, health insurance, free education, and other supports that they won’t have the incentive to work hard and the economy will be beggared by a bunch of free riders. Yes, humans are self-interested. But individuals have a lot of other motives, both good and bad, which explain why we’re irrational actors. It’s what makes us human and fallible. I don’t buy into the Hobbesian position of assuming the worst in people where there are proven methods that show that bringing out the best in people will make them more productive (within an economic system), such as giving people more responsibility within a workspace and utilizing a 4-day workweek. There are structures that can bring out the best in humans. Similarly, companies that are committed to shareholder value maximization are solely focused on profit over all else, but there are means to ensure that short-term profitability is not made at the expense of long-term sustainability. Many non-Western rich countries have reduced the influence of shareholders by maintaining a group of longer-term stakeholders in the balance, such as government and formal representation of workers.34 When you have stakeholders who are more committed to the viability of the company in the long run, decisions will be made that consider the bigger picture, rather than just immediate year-over-year increases in profit margins. In this manner, capitalism and growth is “buoyed by long-term investments and technological innovations that transform the productive structure” of the market, despite the role of the government.35
Neoliberals then pivot to argue that welfare states are financed by taxing the rich, which can reduce their incentives to work hard, create jobs, and generate wealth. This is again a straw man argument when you consider that people like Jeff Bezos slashed health benefits for part-time workers at Whole Foods after the Amazon acquisition and yet has a house with like 14 bathrooms. He’s done a lot to generate wealth for himself, certainly, and he’s created a lot of job opportunities, but he’s also completely avoided paying federal income tax in 2018 and 2019. When you consider that Amazon has a trillion dollar valuation and how much in taxes could have been reinvested into the economy, what he has done pales in comparison to what he has not done. Chang argues that concentrating wealth is ineffective for benefitting society as a whole unless the rich are made to deliver higher investment and thus higher growth, through policy measures like tax cuts that are conditional on investment.36 But because these policy measures don’t exist, and regulations are so anathema to economists and investors, we’re stuck arguing about tax breaks. In addition, so much of wealth is generated through questionable investment practices. Why should investors be rewarded for shorting a stock with money that isn’t theirs? Fuck yeah tax my capital gains! I didn’t do anything to earn the price difference in a stock between the time I bought it and the time I sell it.
The bottom line is that corporations should never matter more than people. The wealthy should not get more than the poor and yet we never punish businesses that fail–look at what Wall Street was able to get away within during the Great Recession. The government bailed key institutions out, provided for unemployment and other benefits, and flushed the market with liquidity to ensure that our recession did not make our economy worse off than it already was. Government intervention can be effective. Companies already get all sorts of security blankets through things like bankruptcy laws–we just need to rebrand welfare states to be like filing for Chapter 11: “in the same way that bankruptcy laws encourage risk-taking by entrepreneurs, the welfare state encourages workers to be more open to change (and the resulting risks) in their attitudes. Because they know that there is going to be a second chance, people can be bolder in their initial career choices and more open to changing jobs later in their careers.”37 But we punish people who fail with no exception, unless they’re rich, because the system only works for those who were able to set the rules in the first place. And not just the 1% kind of rich, but the upper middle class as well, the educated, successful, young urban professionals. Coastal, metropolitan cities may be populous, but we’re still a small minority in the bigger context of our country. It’s easy to take what we have for granted if we’ve never had to question the system. Everyone faces different obstacles in life, whether that’s race, class, gender, sexuality, appearance, IQ, EQ, overall health, intellect, athletic ability, some combination of the above, or an entirely different other. We know that people have inherent biases that are hard to erase. But privilege allows people to move through society differently. You and I might struggle in our way, but the obstacles we face are not an impediment to us moving forward because of what we were born into.
Only a society that ensures justice for all is fair
John Rawls argued that life, thus, is actually a lottery. He said that the hand you’re dealt in life isn’t one that you earned, but one that you got by chance: “the natural distribution is neither just nor unjust; nor is it unjust that persons are born into society at some particular positions. These are simply natural facts.”38 But he goes on to argue that what causes justice, or enables injustice, is the way that institutions deal with these facts.39 To achieve justice, the fairest society is one where anyone could succeed and live a happy life no matter what hand you were dealt. The fairest society is one that people would choose to live in if they didn’t know what hand they would get in life. We shouldn’t punish people because of the positions they were born into; rather, we should account for all of that when constructing a society. He challenged us to think about the necessary pre-conditions that everyone should be afforded so that in practice, the least advantaged members of society would not be disadvantaged by the situation they were born into. The role of a government then is to be able to account for the inequalities among people or across regions. Until we have justice for all, society wouldn’t be fair.
A normative set of policies is focused on chipping away at the institutionalized injustice facing the majority of people. We can’t reset the clock and start from scratch. But a strong state can begin to help those who are not born into privilege try to get here. And when we say here, we mean providing, through legislation, means for citizens to have a guarantee of physiological and safety needs met where it has been squeezed by our neoliberal economy.
There is a specific role that the government must play in equalizing society in the 21st century. There is a specific vision and path that we can chart for the world if we are to become better as a society. If we think back to Maslow’s hierarchy and overlay that with the challenges facing society today, a set of policies might provide for things like (in no particular order):
- Universal health coverage through single payer healthcare
- Universal basic income
- Free education
- Minimum wage guarantee
- Affordable housing
- Parental leave and a guarantee of paid time off for both parents
- Access to family planning and reproductive health
- Social security
Then at the macro-level, it’s accounting for things like (also in no particular order):
- Breaking up big technology and better regulating the use of data and dissemination of information through unofficial journalism channels
- Holding Wall Street accountable and better regulating speculation
- Taxing carbon and water
- Taxing large corporations appropriately
- Investing into better infrastructure
- Stopping fracking and the investment into new fossil fuel extraction projects
- Preparing cities for adaptation to climate change
- Changing the legal structure of the financial system to reduce the influence of shareholders to allow companies to pursue goals other than for the sake of fulfilling fiduciary responsibility
- Necessitating formal representation of workers within a company and other long-term stakeholders
- Enacting industrial policy around large-scale economic development projects (e.g. Green New Deal)
From the liberal perspective, it’s what the state ought to do. And there’s an argument for it as well from the neoliberal camp–additional investment into securing the safety and physiological needs of the people may raise their productivity elsewhere, and thus boosting economic growth. No one wants to live in a society that doesn’t support individual liberty, entrepreneurship, and open markets. In an age when global competition is requiring all citizens to be better prepared to handle economic turbulence, every nation needs to ensure that its people have a basic subset of physiological and safety needs meet to enable them to then take risks, start businesses, and build a better future for themselves and for their country. We need a market economy with a strong state. Increasing privatization, deregulation, and democratization of our government is exacerbating rifts in our society, rifts that the ‘invisible hand of the free market’ is not addressing because, again, there is no such thing as a free market. A set of universal social policies isn’t going to be at odds with capitalism; it isn’t going to give the government control over everything; it’s just about being smarter.
To ensure justice for all, we also need to give power back to the people
I think a lot of people—the established left included—tend to paint liberal politicians as a radical who’s going to take money and power away from people. In reality, money and power have already been taken from the people and is destroying our world. The inherent conflict between short-term gains with long-term systemic social and economic sustainability is never more clear than when you look at our climate emergency or inequality. But our state has been under the influence of our economy for so long that just outlining a new vision for a more democratic economic system won’t be enough. We thought that Brexit and Trump’s election were isolated incidences and that people would ‘come to their senses,’ but that assumption ignores the underlying tensions that working class and poor people are facing. If the recent general elections in the UK can be a proxy for the States, it’s reasonable to assume that things will get even worse for a while. The literature coming out of that election by the Labour Party has been especially insightful for understanding just how much the legitimacy of the state has deteriorated in the eyes of the public. MP Duncan Thomas argued that Labour policies were popular across the countries, but it wasn’t enough to win a majority in the election:
“Even when people at the doorsteps agreed with me, even when I thought I had won them around, in the marginal seats which Labour lost, time and again people simply did not believe that we were credible… the kind of credibility that you can only gain through a long-term and mundane demonstration that you are a positive force in people’s daily lives. Put bluntly, it is hard to convince someone you’ve never met, in a town you’ve never been in, that Labour really can effect a fundamental and irreversible shift in wealth and power, when the local party often can’t even adequately organize bin collection. Under these circumstances, it is reasonable for people to doubt us.”40
This aspect of people power is the final piece of the puzzle. It’s not enough to recognize that something needs to be changed; there needs to be a people-centered, -developed, and -supported plan presented as to how we’re going to build a society better for everyone. Most candidates have detailed plans, but this goes beyond thinking about immediate policy wins. Policy is important; there is so much we have to do, but we need to get our people into office first.
We need radical democratic reform and popular political empowerment.41
This is about building a revolution from the ground up.
This is about going to war with the political establishment.42
This is about taking decision-making out of the hands of politicians with deep pockets by strengthening our unions to ensure that workers, who are producing the country’s wealth and yet getting none of it because power is concentrated in the hands of the few at the expense of many, can exert power. Without labor, there will be no means of wealth generation. The people making the production have to be able to assert power.
This is about empowering individuals to take back control in their school boards and and local government so we have a government that looks more like our communities. When people organize, get involved, and run for local office, things will begin to change.
This is about engaging with the community to gain a deeper understanding of the issues they face. Not just every four years when candidates start running for president, but all the time, so that small groups of people with vested interest can no longer claim to speak for the majority.
This is about showing every day people that the government is of them, by them, and for them. When we do this, money will matter less than votes, and politicians who are no longer serving the interests of their constituents will be forced out. Billionaire executives will be forced to capitulate based on the strength of unions and demands of the workers. There will be an equal distribution of power among the economy, the state, and the people.
(Artwork by Petra Braun)
31. Anand Giridharadas, “The Billionaire Election,” The New York Times, published on 21 February 2020, https://www.nytimes.com/2020/02/21/opinion/sunday/billionaires-inequality-2020-election.html.
32. “What is Democratic Socialism?,” Democratic Socialists of America, accessed on 19 February 2020, https://www.dsausa.org/about-us/what-is-democratic-socialism/.
33. Elizabeth Hopper, “Maslow’s Hierarchy of Needs Explained,” ThoughtCo., accessed on 18 February 2020, https://www.thoughtco.com/maslows-hierarchy-of-needs-4582571.
34. Chang, 23 things, 21-22.
35. Ibid., 249.
36. Ibid., 147.
37. Ibid., 228.
38. John Rawls, A Theory of Justice (Cambridge, MA: Harvard University Press, 1971), 102.
40. Duncan P. Thomas, “Sifting Through the Ruins,” Jacobin, published on 15 December 2019, https://www.jacobinmag.com/2019/12/labour-party-jeremy-corbyn-uk-elections-conservative-party-tories.
41. Maisano, “Bernie’s Revolution.”
42. Rebecca Long-Bailey, “To Win We Must Unite All of Labour’s Heartlands,” Tribune, published on 06 January 2020, https://tribunemag.co.uk/2020/01/rebecca-long-bailey-labour-leadership-socialism.