The New Class War

by Michael Lind

  Like redistributionism, antimonopolism cannot work at the national level in today’s system of liberalized trade and globalized production. If the Justice Department used antitrust to break up large suppliers in the US, firms that coordinate global supply chains could simply shift those links in production to foreign countries with more lenient competition policies. The result could be accelerated by American deindustrialization, with further massive shifts in employment from the traded sector to the low-wage, low-productivity domestic service sector. In some cases, foreign state-backed national champions might win US domestic market share from American firms that had been broken up by the federal government. Just as a UBI cannot work without stringent and strictly enforced limits on immigration, so a neo-Brandeisian antimonopoly policy cannot work except in a much more protectionist and autarkic US economy, which could only be created by measures that cosmopolitan, open-borders progressives, like their newfound libertarian allies in matters of trade and immigration, would be sure to denounce as xenophobic, racist, and nativist.

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  THE CURE-ALLS OF education, redistribution, and antimonopolism enjoy broad elite support from the center-left to the center-right, in part, no doubt, because they do not question the commitment of post-1970s neoliberalism to liberalized policies about trade, immigration, and organized labor. Redistribution, for example, is not necessarily a left-wing idea. On the contrary, labor liberals and social democrats have usually opposed proposals for posttax transfers of cash to individuals, in favor of measures that increase the ability of workers to bargain for higher pretax wages, like limits on immigration and offshoring, collective bargaining at the firm or sectoral level, and public job guarantees and socialized in-kind benefits like universal health care (“decommodification”).

  Conversely, cash transfers and ideas of universal capitalism have a long and distinguished pedigree on the free market right. From Milton Friedman in the 1960s to Charles Murray in the 1990s, libertarians have proposed using some form of a basic income as a substitute, not a supplement, for most or all other social insurance and antipoverty programs.13

  Like the panaceas of education and redistribution, antimonopolism does not question the premises of economic neoliberalism. Indeed, the antimonopolists claim, with some justification, that they are even more fervent devotees of markets than conventional neoliberals. “Make Markets Be Markets” was the title of a campaign by the center-left Roosevelt Institute. The leading new antimonopolist think tank is named the Open Markets Institute. Like homeopathic medicine, all of these alleged cures treat the ills of the market with doses of more market.

  Worst of all, three of these schools of thought seek to respond to working-class populist rebellions by offering workers the chance to become something other than workers, as though there were something shameful and retrograde about being an ordinary wage earner. Many champions of education as a panacea want to turn wage earners into professionals. Advocates of universal capitalism want to turn wage earners into investors. Antimonopolists want to turn wage earners into small business owners.

  In the 1930s, Keynes speculated about the euthanasia of the rentier class. These reformers propose the euthanasia of the working class. The neoliberal utopia is a workerless paradise.

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  WHAT ABOUT SOCIALISM—the genuine kind with state ownership of the means of production? In theory, the option of democratic socialism need not be discredited by the horrors wrought by Marxist-Leninist dictatorships in rural nations like twentieth-century Russia and China.

  Democratic socialism is discredited for other reasons. One is the greater track record of the mixed economy, with a blend of markets, public enterprises, and nonprofit provision, over both the pure free market economy and state socialism. A case can be made for socializing some enterprises or industries, but socializing everything can only be justified by dogmatic ideology.

  The other argument against democratic socialism is the fact that socializing most or all of the economy by itself would not address the problem of checking the power of the managerial elite, which mere elections, however free, would be unlikely to constrain. Empowering organized labor by means like tripartite business-labor-government bargaining can provide real checks on the managerial overclass, without sacrificing the dynamism of the mixed economy.

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  THE AMERICAN WRITER Daniel McCarthy has aptly called approaches like the ones I have criticized in this chapter “palliative liberalism.”14 However popular these miracle cures may be among the managerial elite and the overclass intelligentsia, as remedies for working-class distress in the deindustrialized heartlands of the Western world the panaceas of redistributionism, education, and antimonopolism are like prescriptions of aspirin for cancer. They may ameliorate the symptoms, but they do not cure the disease—the imbalance of power, within Western nation-states, between the overclass and the working class as a whole, including many exploited immigrant workers who labor for the affluent in the metropolitan hubs.

  If banana republicanism is to be avoided as the fate of the Western democracies, reformers in America and Europe will have to do far more than buy off the population with a subsidy here or an antitrust lawsuit there. Indeed, if a package of minor, ameliorative reforms is handed down from the mountaintops of Davos or Aspen by a claque of benevolent billionaires and the technocrats and the politicians and intellectuals whom the billionaires subsidize, with little or no public participation or debate, the lack of voice and agency of most citizens will be made apparent in the most humiliating way.

  What the racially and religiously diverse working-class majorities in the Western nations need is what they once possessed and no longer have: countervailing power. In the absence of mass-membership institutions comparable to the older grassroots parties, labor unions, and religious organizations, which can provide ordinary citizens with the collective power to check the abuses of the managerial elite, palliative reform at most can create oligarchy with a human face.

  CHAPTER EIGHT

  Countervailing Power: Toward a New Democratic Pluralism

  ALMOST ALL OF THE political turmoil in Western Europe and North America can be explained by the new class war. The first class war in the West ended with the establishment of democratic pluralist systems on both sides of the Atlantic after World War II. Trade unions, participatory political parties, and religious and civic organizations compelled university-educated managerial elites to share power with them or defer to their values. Then, between the 1970s and the present, the terms of the uneasy democratic pluralist peace treaties between national working classes and national managerial elites were unilaterally abrogated by the latter. No longer restrained by working-class power, the metropolitan overclass within Western democracies has run amok, provoking a belated populist rebellion from below that has been exploited, often with disastrous results, by demagogues, many of them opportunists from elite backgrounds, like Donald Trump and Boris Johnson.

  Antisystem populism, the force behind the election of Donald Trump, the Brexit vote in Britain, and the rise of populist parties in continental Europe, has been triggered in different nations by different causes—deindustrialization here, immigration or tax policies there. But whatever the immediate stimulus, the underlying cause is the same—long-smoldering rage by non-college-educated workers against damage done to their economic bargaining power, political influence, and cultural dignity during the half-century revolution from above of technocratic neoliberalism.

  The establishment response to populism threatens democracy more than populism itself. In responding to populist insurgencies, embattled Western establishments can follow two strategies: co-optation and repression. As we saw in the last chapter, most of the ideas that have been proposed for co-opting alienated populist voters and reconciling them to a more or less unchanged neoliberal economic order—massive after-tax redistr
ibution schemes, using antitrust to multiply the number of small business owners, giving more citizens college diplomas for jobs that do not require them—are impractical, excessively expensive, or both.

  Repression is cheaper than co-optation. It is easier for the managerial overclasses of the West simply to marginalize populist politicians who represent legitimate popular grievances in the name of combating one or another illusory menace to democracy: the supposed danger of a neo-Nazi takeover, or an alleged Russian plot to conquer the West by means of well-placed secret agents and the use of the Internet to hypnotize Western voters.

  The danger facing modern societies is not that demagogues will trigger the mythical authoritarian personalities diagnosed by Adorno but rather that demagogues will exploit the very real condition of anomie or alienation diagnosed by Durkheim. Overclass establishments will then exaggerate the danger of populism to dismantle democracy, triggering a vicious cycle of oligarchic repression and demagogic disruption.

  The alternative to both technocratic neoliberalism and demagogic populism is democratic pluralism. The essential insight of democratic pluralism is that electoral democracy is a necessary but not sufficient condition for democracy. Because the wealthy and educated inevitably tend to dominate all parties, if only through their personnel, “territorial” representation must be supplemented (not replaced) by occupational or communal “social federalism” (to use the language of the English pluralists of a century ago). To this end, substantial areas of policy should be delegated to rule-making institutions, which must represent particular portions of the community, like organized labor and business in wage-setting sectoral bodies, or representatives of religious and secular creeds in bodies charged with oversight of education and the media. The territorial state, as the only entity with coercive authority, should exercise oversight of all institutions and intervene if necessary to protect individual rights or other state interests. But in the democratic pluralist vision of democracy, the government in many areas should reign, not rule.

  Far from being utopian, democratic pluralism is free from many of the defects of the definition of democracy in terms of formal electoral politics and public administration. For one thing, it does not require legislators to be omnicompetent generalists. While retaining oversight, legislatures can cede large areas of policy making to those with higher stakes and expertise.

  Democratic pluralism magnifies the power of ordinary citizens by providing more than one mode of representation. They can be represented, not merely by politicians from arbitrarily defined political districts who are infrequently elected, but also by labor or business representatives in tripartite economic bodies or by members of their religious or cultural subculture in cultural commissions that represent diverse stakeholders. These non-legislative bodies can be representative, even though it is inappropriate to organize them as replicas democratic legislatures based on one person, one vote.

  While institutionalized pluralism benefits society as a whole, it is particularly important for members of the working-class majority. Because they lack money and status, working-class people have only one source of power: their numbers. They can affect politics only through disciplined mass organizations answerable to them, of which the most important in the past have been mass-membership parties, trade unions, and churches. Whatever form they take, mass-membership organizations must have their own leaders, independent of other centers of power, even if many of the leaders themselves are drawn from college-educated families. In the words of David Marquand:

  The alternative power centres on which [pluralists] rely to check the power of the intrusive state must have a capacity for self defence. This means that they cannot be anarchistic communes. They too must be led, and leadership is elitist by definition. For pluralists, the notion that we can live in a world without elites is as fatuous and as dangerous as the notion that we can live in a world without power. If power checks power, elites countervail elites.1

  The trade unions, party machines, and religious congregations of the past had their share of corruption, and so would their modern equivalents. Like all political systems, a democratic pluralist regime is vulnerable to “rent-seeking” by self-interested economic interests. But corruption is more easily exposed and contained in a system with a multitude of petty power brokers than in a centralized regime with a relatively small elite whose members tend to dominate the economy, the government, and the media.

  If it is successful, democratic pluralism, by incorporating all classes and major subcultures to some degree in policy making in the market, government, and cultural sectors, can reduce the sense of isolation and powerlessness that opportunistic demagogues can exploit. While thwarting the oligarchic tendencies of technocratic neoliberalism, the restoration of democratic pluralism in the West might also forestall disruptive rebellions like Trumpism, Brexit, and the yellow vest revolt in France. Interclass tensions can be dissipated in thousands of small-scale negotiations, instead of accumulating until there is one huge explosion.

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  ALTHOUGH THE OLD parties, unions, and churches cannot be restored in their historic forms, the restoration of working-class power on both sides of the Atlantic requires the establishment of membership institutions to serve as their functional equivalents. These functional equivalents might be called the “guild” in the realm of the economy, the “ward” in the realm of government, and the “congregation” in the realm of culture. In the economic realm, the guild would exercise countervailing power on behalf of working-class citizens against employers and investors. In the realm of government, the ward would exercise countervailing power on behalf of working-class citizens against organized money and organized expertise. And in the realm of culture, the congregation would exercise countervailing power on behalf of working-class citizens against overclass media elites and overclass academic elites.

  In the economy, a new class peace treaty to end the new class war would involve the restoration of tripartite bargaining among labor and capital in some form. As we saw in chapter 3, tripartism rejects the absurd nineteenth-century classical liberal idea that individual workers can bargain over wages or working conditions in any meaningful way with giant national or global corporations, banks, or chains.

  At the same time, tripartism rejects the socialist panacea of government control of production. The tripartite approach also rejects excessive government micromanagement of minimum wages and working conditions using one-size-fits-all rules. Some minimum standards are necessary, but many decisions should be left to collective bargaining among organized capital and organized labor, brokered by national governments.

  Tripartite institutions that enable business-labor negotiations over wages, working conditions, and investment decisions have always come in different forms that are appropriate in different sectors. The kind of collective bargaining most familiar to Americans, and most despised by managers, not without justification, is “enterprise bargaining”—the unionization of particular companies or particular work sites, one by one, in an adversarial and disruptive process. In other countries, collective bargaining among labor representatives and business representatives takes place at the national or regional level and results in decisions that are binding on all firms and labor organizations within a sector. Another alternative is codetermination of the kind adopted in postwar West Germany, the requirement that corporate boards include worker representatives.

  Traditional union structures and methods like strikes fit poorly with many of today’s service occupations. In Britain and other countries, as well as some states of the US, “wage boards” have been used to set wages and working conditions in so-called sweated industries, which have many small employers and low-wage workers and are difficult to unionize. Recently a wage board raised the minimum wage for fast-food workers in the state of New York. For many of today’s dispersed service workers, representation on local or national wage boards, wi
th representatives chosen by workers through elections or company works councils or other means, may be a more effective basis for government-brokered business-labor negotiation than old-fashioned, site-based collective bargaining.2

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  WHILE THE GOAL of democratic pluralist reform in the economy should be to create new “guilds” with genuine bargaining power in new forms of business-labor-government tripartism, in the realm of government and politics the goal should be a partial restoration of localism at the smallest level. To describe units of microdemocracy I have chosen the term “ward.” Thomas Jefferson’s benighted racial views and agrarian economics do not discredit his enthusiasm for “ward republics,” or units small enough to permit ordinary people to experience politics as participants and not mere observers. Even if they have college degrees, local public officials from working-class families or with working-class constituents are likely to have greater sympathies for ordinary Americans and local communities than higher-status members of the managerial elite, clustered in a small number of major urban hubs.

  Many political philosophers and social scientists have argued that there are diseconomies of scale in the civic and political realm when political units grow too large. The American political scientist Robert Dahl argued that the ideal political unit has between fifty thousand and several hundred thousand inhabitants.3 As it happens, fifty thousand is more or less the size of the wards in the city of Chicago. In comparison, city council members in New York City each represent more than 164,000 constituents while in Los Angeles they represent 250,000.4 Chicago’s ward system is often given credit for integrating European immigrants as well as domestic migrants, such as African Americans from the South, into the urban power structure. Chicago is a deeply troubled city in many ways, mainly because of the social effects of deindustrialization. But the ward system is not to blame and a more centralized, elitist system dominated by donors, real estate developers, and technocrats would be worse.