Now and then you may come across someone grumbling that what the left needs is “good new ideas.” Pay no attention. The left is awash in good new ideas. Since 1980, any number of seminal books by radicals have appeared. For starters: Joshua Cohen and Joel Rogers’s On Democracy; Alec Nove’s Feasible Socialism; Michael Walzer’s Radical Principles and Spheres of Justice; Robert Dahl’s A Preface to Economic Democracy; Martin Carnoy and Derek Shearer’s Economic Democracy; Bob Kuttner’s The Economic Illusion; Samuel Bowles, David Gordon, and Thomas Weisskopf ‘s Beyond the Waste Land; William Ryan’s Equality; Benjamin Barber’s Strong Democracy; Noam Chomsky’s Towards a New Cold War; Edward Herman’s The Real Terror Network; Ernest Callenbach’s Ecotopia Emerging and A Citizen Legislature; Barbara Ehrenreich’s The Hearts of Men; the feminist anthologies Powers of Desire and Pleasure and Danger; Christopher Lasch’s The Minimal Self; Marshall Berman’s All That Is Solid Melts into Air; and Lewis Hyde’s The Gift. Mind you, that’s just counting books written for a general audience. Excellent books, scholarly as well as popular, regularly stream forth from South End Press, Monthly Review Press, The Feminist Press, Beacon, Schenkman, Sharpe, and various university presses. And in left-wing journals too numerous to mention, good new ideas lie thick on the ground. Not only is there no dearth of ideas on the left; there are too many of them for this conscientious leftist, at least, to assimilate.
The left’s problem -- if one takes seriously the implications of Thomas Ferguson and Joel Rogers’s Right Turn -- is that ideas don’t matter. In theory, the outcome of elections in the United States reflects, with only minor distortions, the political preferences of the electorate. That’s what representative democracy is supposed to mean. Only it doesn’t work out that way. More precisely: the range of choices over which the American electorate is allowed to exercise its preference is sharply and systematically constrained. Electoral politics is dominated by two major parties, whose programs, to the extent they differ, correspond to the needs and goals of opposing sectors of the business community. The goals and ground rules that all sectors of business agree on constitute the framework of public policy, rarely or never challenged in the electoral arena. Policy proposals that fall outside this framework — i.e., good new ideas from the left — remain invisible and inaudible.
This is not a conspiracy theory. Business leaders do not meet in secret to decide how best to delude the public mind and thwart the public will. They don’t need to. In a capitalist democracy, business control over the state is assured structurally. There are two reasons for this. First, since most people are economically vulnerable -- they depend on employment rather than on ownership or some other entitlement to survive -- the best predictor of their voting behavior is likely to be the state of the economy at election time. Overall, the state of the economy is determined by the level of investment. Since investment decisions in a capitalist economy are made privately, governments must nurture that most delicate of blossoms, “investor confidence.” Those that fail meet Jimmy Carter’s fate.
The second reason for business dominance is that political participation in a mass society costs a lot of money. Voting may be free, but setting the agenda is enormously expensive. To work out and put forth a detail political program at the national level requires information, organization, and publicity, and all these require cash. Since the only people with spare money are capitalists -- as Bernard Shaw explain long ago, “spare money” is simply the vernacular for “capital” -- they have an effective monopoly on political speech.
So what else is new? Haven’t American leftists always claimed that Democrats and Republicans are merely the left wing and right wing of the Property Party? True, but Right Turn (along with Ferguson and Rogers’s previous volume, The Hidden Election and Ferguson’s ground-breaking essay, “Party Realignment and American Industrial Structure”) goes a long way toward rigorously formulating, and then massively documenting, that hoary old slogan.
Ferguson and Rogers propose what they call the “investment theory” of America politics: “the fundamental ‘market’ for political parties in the United States is not individual voters. The real market for political parties is defined by major ‘investors’ -- groups of business firms, industrial sectors, or, in some (rare) cases, groups of voters organized collectively. In contrast to most individual voters, such investors generally have good and clear reasons for investing to control the state, and the resources necessary to sustain the costs of such an effort. These major investors define the core of the major parties, and are responsible for sending most of the signals to which the rest of the electorate responds.”
Of course, the electorate must actually respond, which sets some limits on investor dominance. Still, seen in this perspective, voter sovereignty turns out to be as much a myth-- and exactly the same sort of myth -- as consumer sovereignty. Just as high start-up costs for firms and the unequal availability of credit drastically limit economic competition, the high cost of political mobilization and the unequal availability of publicity drastically limit political competition. And in both its economic and political versions, the free market myth entails another crucial false assumption: that the consumer/voter has full, costless access to information about rival products/policies.
In practice, Ferguson and Rogers’s “investment theory” implies that they should be able to redescribe American political history in terms of the rise and fall of investor blocs. And so they do, beginning with the New Deal. According to the conventional wisdom, the Democratic Party is now in crisis because of the collapse of the New Deal coalition, which dominated American politics for several decades. That coalition included organized labor, urban immigrants, Southern and Midwestern farmers, blacks, and liberal professionals. The New Deal, in this conception, expressed a wide popular consensus for state intervention to mitigate poverty and inequality, regulate business, and encourage popular participation in government and trade unions. But in the last two decades, this argument continues, the coalition’s member groups have drifted away from the Democratic Party, propelled partly by the growing influence within the party of blacks, Hispanics, women, gays, and pacifists, and partly by the perceived failure of federal efforts at redistribution and regulation. A historic realignment has taken place: the electorate has moved to the right.
The trouble with this argument is that the electorate has not moved to the right. Ferguson and Rogers reproduce a vast array of polling data showing that popular support for New Deal liberalism has remained essentially constant throughout the last several decades. Nor have voters turned rightward because of the “social issues”-- feminism, abortion, race, religion, affirmative action, civil liberties; by and large, movement has been to greater liberalism on these issues. And in foreign policy, except for brief periods following intense propagandizing by elites, popular support for intervention and increased military spending has not increased. All this may sound like wishful thinking, but Ferguson and Rogers have the figures.
Why, then, has the electorate overwhelmingly voted Republican in the last two Presidential elections? Once again: it has not. On both occasions, the electorate has abstained in large numbers -- nearly half of all eligible voters did not vote. Scholars agree that among nonvoters (a category that includes most of the poor and unemployed), Democrats outnumber Republicans 2 to 1. When those percentages are added to the actual vote totals, the Republican majority vanishes. Even more striking: on issue after issue, exit polls show that many or most of those who voted for Reagan disagreed with his policies and hoped they wouldn’t be implemented. So much for the Reagan “mandate”. Like most other recent Presidential elections, those of 1980 and 1984 were basically referendums on the economy. Carter engineered a slowdown just before the 1980 election; Reagan engineered a boom in 1984; in both cases, the predictable result ensued.
There has, undoubtedly, been a turn to the right in American political life recently: not in popular attitudes, but in public policy and in the positions of the two major parties. Mainstream political science, which assumes a causal connection between popular preferences and government policy, cannot explain this development, but Ferguson and Rogers’s “investment theory” can. The real New Deal coalition, they argue, was an alliance of capital-intensive industries, investment banks, and internationally oriented commercial banks. (Here and throughout, the authors name names.) The members of this bloc had two things in common, both of which set them in opposition to the labor-intensive, domestically oriented manufacturers that formed the core investor bloc of the Republican Party. First, being capital-intensive, they could afford a tactical alliance with organized labor and were not nearly so threatened by the new social welfare programs, such as unemployment insurance, which reduced the insecurity and passivity of the workforce. Second, being major actors in the world economy, they were vitally interested in low tariffs, global free trade, and an active US diplomacy. From these two orientations were derived the broad outlines of the New Deal: liberalism in domestic policy, internationalism in foreign policy.
Like all real-world phenomena of any magnitude or importance, this New Deal coalition was not a cut-and-dried affair. The interests of all Democratic investors did not cohere perfectly: there were plenty of internal conflicts, mainly over the shape and extent of government intervention in the economy, and there were defections at the margin. Nevertheless, from the mid-1930s through Richard Nixon’s first term, the coalition held.
Beginning in the l960s, however, the United States simultaneously became less competitive in and more integrated into the world economy. What brought this development home even to Democratic business elites was the 1973-75 recession, by far the most serious (up to that point) since the Great Depression. For several complex, intertwined reasons, this recession and the long-term economic decline it gave expression to produced a rightward shift among business Democrats. First of all, decreased growth and profits generated pressure for wage restraint, which meant an assault on organized labor. Part of this anti-labor campaign was an attack on social welfare programs, which were vulnerable for another reason as well: taxes could not be raised to pay for social spending, since during a severe recession companies could not pass along those taxes to already hard-hit consumers in the form of higher prices. And there was yet another reason for cutting social programs: resources had to be diverted to military spending in order to enhance America’s capacity for intervention in the Third World. This capacity assumed new importance after 1973-75. The rise of OPEC had produced a vast influx of petrodollars into American international banks; and since these banks had to find somewhere to invest this money, they turned to the Third World. But by the 1970s, Third World nationalism was on the rise, so American military power was needed to guarantee the “stability” in which American investments could flourish. The international banks, formerly oriented toward Europe, had been charter members of the New Deal investor bloc and consistently skeptical about military adventurism; their defection was crucial.
And that, not some mythical popular turn to the right, is how the New Deal died.
Will the resulting eclipse of the Democratic Party be permanent? Probably not. The more obvious (and less important) reason is that the Republican Party cannot, in the nature of things, attract stable mass support. Republican hegemony can only be based on continued working class apathy and disorganization. The latter is, alas, not at all unlikely. What is unlikely is that divisions among business elites can be suppressed indefinitely. Some multinational corporations and international banks want to do business with the Soviet Union and Eastern Europe, and so are opposed to Reagan’s “Evil Empire” rhetoric and trade restrictions. Urban real-estate interests and many local banks are ambivalent about massive cuts in social spending and infrastructural aid, which threaten the economic viability of Northeastern and Midwestern cities. Two groups hurt by the shift in federal spending from social services to the huge nuclear and naval buildup -- physicians, teachers, churches on the one hand, manufacturers of high-tech conventional weapons on the other-- helped finance the “freeze” movement and provided much favorable publicity for it. Investment banks and insurance companies are alarmed over Reagan’s unprecedented deficits, since their long-term bonds would be devalued if the federal government began printing money to pay off the national debt. All these groups have their own reasons for keeping the Democratic Party alive, provided the Democrats continue to disavow serious efforts at redistribution and regulation. In fact, as Ferguson and Rogers show in compelling detail, these investors not only pulled most Democratic candidates’ strings throughout the 1984 Presidential primaries, convention, and fall campaign; they have also orchestrated the party’s well-publicized post-election turn toward the “center” and away from domination by “special interests” (i.e., labor, women, blacks, Hispanics, consumers, the aged, the poor -- the general population). Yes, the Democratic Party will survive. But for as long as America’s economic decline lasts (Ferguson and Rogers sidestep that question; I suspect the decline is irreversible), the party will have nothing much to offer its non-elite constituents.
Right Turn is an extremely impressive, and depressing, book. At first the reader is bound to be exhilarated — it is such a virtuoso piece of analysis and documentation. The “investment theory” of political parties is one of the few nontrivial contributions to contemporary political science (so called). And the detail is staggering. Ferguson and Rogers have the goods; they’ve gotten beneath appearances; this is how the polity works. It’s like watching two brilliant physicians diagnose and explain a deadly, hitherto poorly understood disease.
Then it dawns on us that we -- the body politic-- are the ones afflicted with this disease, and that an explanation is not a cure. After demonstrating that business has always controlled American politics, and making clear why this must be so in a capitalist society, the authors produce no deus ex machine. “The only way to relieve deficiencies of time and money,” they remark, “is through time and money.” That is not an exhortation, but a bitter admission. In 1982, the last year for which reliable statistics exist, the total income of labor unions, the most likely source of organized resistance to the right turn, was $324 million. Corporate profits that year came to $156 billion-- an advantage of nearly 500 to 1. Good new ideas are no match for command of a society’s resources.
Unless... . Enter Samuel Bowles and Herbert Gintis, whose equally impressive new book seems to hold out a faint hope of escaping that all-too-plausible conclusion. There are several notable similarities between Right Turn and Democracy and Capitalism. Both books were written by a pair of young radical academics well-known for their previous collaborations on political economy. Both are richly textured and provide, in their copious notes, a virtual map of the best recent work in their respective domains: contemporary American politics and modern social theory. And although one is largely empirical in approach, and the other largely theoretical, there’s a striking symmetry between their basic arguments. The pivotal chapter of Democracy and Capitalism is entitled “Economy: The Political Foundations of Production and Exchange.” If Ferguson and Rogers had devoted a chapter of Right Turn to the significance of their work for general political theory, they might well have entitled it “Polity: The Economic Foundations of Parties and Elections.”
The upshot of both books is to discredit (yet again) the perennial fiction that there is an intrinsic connection between capitalism and freedom. Underlying this fiction is the well-worn liberal distinction between private and public; that is, between a sphere in which individuals pursue discrete choices, limited only by the impersonal forces of nature and the market, and a sphere in which collective decisions are made about the rules governing that pursuit. According to liberal theory, the economy is private, the state is public, and this partition guarantees individual liberty. Ferguson and Rogers assault this distinction straightforwardly, showing that, in practice, private economic power overwhelms public deliberation. Bowles and Gintis attack the distinction more obliquely, with a distinction of their own: choosing vs. learning.
Liberalism assumes that choices result from interests, and does not ask where interests cone from. But suppose people’s interests -- their identities, even -- come, in part, from their choices, and especially from their economic activities? Suppose labor determines not only what workers get, but also what they become? Suppose the market is not neutral in distributing developmental opportunities, but allots all the initiative and self-determination to owners? To ask these questions is to complicate the liberal paradigm of the private sphere: autonomous individuals with exogenous interests transacting anonymous exchanges. Bowles and Gintis have attempted to fashion the Marxist idea that individual identity is a social product and the anarchist idea that fostering individual development is the proper goal of social organization into a formal critique of neoclassical economics and pluralist political theory. It is a splendidly ambitious project, and it succeeds.
Or again, sadly, a critique is not a movement; unmasking an ideology does not dissolve the power relations behind it. But there is another strand to Bowles and Gintis’s argument, one whose implications are not wholly discouraging. They interpret the development of liberalism as a continual accommodation between two partly symbiotic, partly antagonistic historical processes: the expansion of property rights and the expansion of personal rights. As commodity production has penetrated into more and more areas of modern life, so has its ambiguously egalitarian ethos. Capital accumulation has forced traditional patterns of land tenure, ethnicity, sexuality, craftsmanship, and art to adapt to market criteria. At the same time, popular movements have also -- less successfully -- challenged traditional patterns of authority in factories, families, schools, and states this time with democratic criteria.
In all these cases, both elites and non-elites, capitalists and workers (and women and blacks), have formulated their claims in the language of rights. As a result, that language has unparalleled scope and legitimacy. Bowles and Gintis suggest that this development is irreversible, and that popular allegiance to the notion of personal rights may limit capital’s efforts to counter economic decline with increased repression and exploitation. In Beyond the Waste Land, Bowles argued that a major cause of America’s current economic crisis is the high cost of enforcing authoritarian relations in the workplace. In Democracy and Capitalism, Bowles and Gintis give that argument a further twist. Enforcement costs, they predict, will be even higher in the new knowledge-based economy. Eventually, the inefficiency of private control over investment and production will become glaringly apparent. At that point, popular resistance to waste-induced austerity may reach critical mass, tipping the balance away from property rights in favor of personal rights and democratic accountability.
This, Bowles and Gintis admit, is not “the most likely outcome.” More likely is a protracted stalemate, or worse. After reading Ferguson and Rogers, one has to agree. Democracy and Capitalism is an elegant demonstration that capitalism cannot retain its legitimacy indefinitely. Right Turn is an equally elegant demonstration that, in the United States at any rate, legitimacy is pretty much beside the point -- elite mobilization, with its almost insuperable advantages, is the point.
It hardly seers possible that so much insight can arouse so keen a feeling of futility, but there it is. Euphoria of the intellect, perplexity of the will: such is the frame of mind these two excellent books evoke in at least one admiring reader. Not exactly what Gramsci recommended; but not, perhaps, an implausible response to the achievements and prospects of the American left in these times.