Late-Stage Capitalism

Botch

Really interesting set of questions from George Takai, answered by Robert Reich.  Worth 4 minutes, I think...
 
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George: These days, people have talked about “late-stage capitalism,” as if the system is in its death throes. Do you believe our system of wealth allocation and wealth generation is inherently broken and doomed? If so why, and if not, how can we hope to fix it?

Me: It’s broken for sure, but broken in ways similar to how it broke in early-stage capitalism – during the Gilded Age of the late 19th century, when a handful of robber barons ran giant monopolies and raked in a huge portion of the nation’s income and wealth, when their lackeys put bags of money on the desks of pliant lawmakers, when urban poverty turned to squalor, when young children were put to work 12 hours a day, 7 days a week, and when capitalism looked doomed.

We can learn from what happened then: America woke up. “Muckrakers” (whom we’d now call investigative reporters) alerted the nation to what the new oligarchs were doing. A new generation of leaders created new political alliances of the working class, poor, and a reformist middle class.

Teddy Roosevelt became president and he and some progressive governors such as Robert Lafollette instituted a progressive income tax, laws limiting corporate political power, consumer protections, worker protections, and used the Sherman Antitrust Act to break up giant monopolies. Fifteen years later, TR’s fifth cousin became president and completed much of the task – thereby putting democracy in charge of capitalism and creating the largest middle class the world had ever seen.

As is said, history doesn’t repeat but it may echo. Progressives now have an opening similar to what we faced more than a century ago. It’s found in the widespread disgruntlement of so much of America – a working class that feels betrayed and ignored (and ripe for demagogues like Trump), a large and growing population of poor, and a middle class now more economically precarious than at any time since the Gilded Age. 

But how do we use this opening? Tragically, over the last thirty years the Democratic Party has abandoned the working class, as well as unions. Too many Democratic politicians have been drinking at the same corporate and Wall Street troughs as have Republican politicians. This has to stop. It’s time for a new political coalition to wrest power away from a new generation of robber barons and oligarchs and create a capitalism that works for all. 

George: America is the wealthiest country in the world, but we also have immense wealth inequality, so much so that millions of homeless sleep on our streets or in shelters, and millions of children still go hungry every day. Are we incapable, due to our political divide, of creating a social safety net that actually eliminates such dire poverty, or can we do this?

Me: Of course we can do this. We need a universal basic income and universal health insurance, financed by a wealth tax on the super rich. Profit-sharing agreements with employees, so workers share the gains. Early childhood education. Paid sick leave. Affordable child and elder care. A fully-refundable Child Tax Credit for all low-income families. And so much more. 

The question isn't whether we can "afford" this. And the challenge isn’t coming up with the right policies. We know what to do. 

Poverty is a political choice. During the pandemic we cut child poverty by half, for example. But then we allowed ourselves to go back to where we were before. The Child Tax Credit has reverted to the flawed design left in place by the 2017 Trump tax law. As a result, an estimated 19 million children — or more than 1 in 4 children under age 17 — will get less than the full Child Tax Credit or no credit at all this year because their families earn too little, while families with much higher incomes (up to $400,000 for married couples) will receive the full $2,000 credit for each child.

The real challenge is coming up with the political will. 

George: It sometimes feels like we are in a new Gilded Age, where the billionaire class continues to amass incredible wealth and power at the expense of the rest of society. They are now buying our politicians and judges, seemingly without consequence. Do you see parallels between now and that era, and how do we pull ourselves out of it?

Me: Aha! I anticipated this question in my answer to your first question. Let me just add that America doesn’t like to look backward and learn from our history. Of all modern nations, we are the least aware of what we’ve done in the past. That includes the sins of slavery and genocide. America likes to look forward. This hobbles our capacity to build on past successes and absorb the lessons of past failures and tragedies. 

George: A younger generation of voters, Gen Z, is coming of age and seems more progressive in its politics and more actively engaged than prior young generations. Do you think young people will save us from ourselves, or will we older folks simply ruin it for them? What would you say to Gen Z voters about their future as Americans, if you had only one message to deliver?

Me: I totally agree that Gen Z is more actively engaged in progressive politics than previous generations. In the 2018 elections (Trump’s midterms), almost twice as many people in their late 20s and early 30s voted as had voted in the midterms four years earlier. They helped Democrats retake control of Congress. That newfound political engagement of younger adults has lasted beyond Trump’s presidency: In the 14 states with heavily contested elections last year, turnout among younger voters rose even higher than it was in 2018.

So, what would I say to Gen Z voters? That the biggest challenges we face – preserving American democracy, fighting climate change, preventing nuclear annihilation, reducing inequality, and ending systemic racism – are opportunities for Gen Z to save America and the world. Rather than feel this as a huge burden, GenZ’s might see this as their calling. They may become the greatest generation.

George: You’re only in your 70s, I understand, so as a young man yourself, that means you have many more election cycles to see in your lifetime. It seems everyone is focused on 2024 and protecting our democracy from authoritarians and their illiberal or even fascist ideologies. But beyond 2024, where do you see America when you are my age, at 86? Will we be worse off, or will we have turned a corner.

Me: I love the “only in your 70s,” George! If I’m fortunate enough to make it to 86, I believe we’ll have turned the corner. If we fail, we'll have invited homegrown fascism. 

Ten years from now, if unaddressed, the troubling trends I mentioned above would make life almost unendurable for a large swathe of the American population and will be posing a direct existential threat to much of the world. You know the old saw about the frog in the pan of water who gets boiled because the heat increases so gradually the frog doesn’t notice and fails to leap. Well, I think we’re starting to notice. We’re becoming alarmed. Not just progressives, but Americans across the political spectrum. 

That alarm is expressed differently, of course. I spend a lot of time talking to people who describe themselves as Republicans, even Trump supporters. When I get under the superficial bumper-sticker responses, I discover a remarkable consensus that overlaps with progressives. 

Most of these people believe big corporations are too big. Monopolies have to be busted up. Corporate welfare must end. Corporate corruption of our democracy must stop. No one who works full time should be in poverty – unable to afford food, clothing, or housing for themselves or their families. The minimum wage should be a living wage. Every family deserves affordable health insurance and paid sick leave. College education should be affordable. Billionaires must pay their fair share of taxes. The climate crisis is real, and it’s caused by humans.

These ideas are no longer “progressive” or “left.” They’ve gone mainstream. Over 70 percent of Americans – including many self-described Republicans – agree with them. And they share an alarm about how far we've veered away from them. As these alarm bells begin to sound, we have a real chance of creating the kind of politics that addresses them.

But positive change is not inevitable. It will require hard work. That's where GenZ comes in; all of us come in. If we don’t push hard for the changes most Americans believe are important – changes that are necessary if our lives ten years from now and beyond are to be livable – we invite fascism. That is the essential choice before us. A democracy that works for everyone's well being -- or fascism.