Political Economy

In a previous post, I mentioned Larry Bartels' important new book, Unequal Democracy: The Political Economy of the New Gilded Age. Bartels is blogging about the book this week on TPMCafe. In his lead-off post, he reviews some of his key findings:

1. Ordinary citizens' policy preferences are often only loosely connected to their beliefs and values. For example, upward of 85% of Americans agree that "our society should do whatever is necessary to make sure that everyone has an equal opportunity to succeed," but support for specific policies that would promote equal opportunity is much more modest. One problem is that many people are too inattentive to grasp connections between values and policies. Among people with strongly egalitarian values, those who were highly informed about politics opposed the highly inegalitarian Bush tax cuts by a four- to-one margin, but those who were least informed were more likely to support the tax cuts than to oppose them.

2. Even when public preferences are clear and firmly held, policies contrary to those preferences can persist for a very long time if powerful political elites want them to persist. For example, the real value of the minimum wage has declined by more than 40% since the late 1960s despite remarkably strong and consistent public support for minimum wage increases. (This outcome has been facilitated by the fact that the nominal minimum wage is not adjusted for inflation, but that is itself a political decision; even when Democrats have controlled the White House and Congress, they have preferred symbolic nominal increases to permanent indexing of the sort that has long been accepted for social security.)

3. There are big differences in policies between Democratic and Republican elected officials, even when they represent exactly the same constituents. Political scientists have an elegant theory explaining why this shouldn't happen: if voters choose the candidate closest to their own policy positions, Democrats and Republicans alike must move to the center in order to get elected. The only problem is, they don't. A figure in the book compares the behavior of Democratic and Republican senators representing liberal and conservative states. The difference in behavior between a Democrat and a Republican representing the same constituents turns out to be much greater than the difference in behavior between a Democrat representing the most liberal state in the country and a Democrat representing the most conservative state in the country. Party and ideology dominate constituents' preferences in shaping legislators' roll call votes.

4. Insofar as elected officials are responsive to the policy views of their constituents, only the views of affluent and middle-class people really matter. The preferences of millions of low-income citizens (in the bottom third of the income distribution) have no discernible effect on senators' roll call votes, whether we consider the whole range of issues that come before Congress or specific salient roll call votes focusing on the federal budget, the minimum wage, civil rights, and abortion. Aristotle wrote that "where the possession of political power is due to the possession of economic power or wealth ... that is oligarchy, and when the unpropertied class have power, that is democracy." By that standard, America is, at best, a very unequal democracy.

Larry Bartels' new book, Unequal Democracy: The Political Economy of the New Gilded Age, is full of fascinating insights into the politics of inequality. I hope to do a longer post on the book at some point, but until then, wanted to share one of Bartels' conclusions:

Scholars of political participation and liberal activists often seem to suppose that the cure for political inequality is to educate and mobilize the disadvantaged in support of specific progressive policies. However, the evidence of unresponsiveness to the views of low-income citizens presented in chapter 9 [of Bartel's book] and in [Martin] Gilen's work suggests that that strategy is very unlikely to be politically effective. ....

If "voice" is "likely to be futile" for people on the losing end of economic inequality, is there any hope for progress? My analysis points to two related bright spots in an otherwise gloomy picture. First, the correlation between class positions and political views is not so substantial that support for egalitarian policies is limited to "those mired in poverty." ....

[Second], my analyses suggest that the specific policy views of citizens, whether rich or poor, have less impact in the policy-making process than the ideological convictions of elected officials. .... policy choices seem to depend more on the partisan ideologies of key policy makers than on the details of public opinion. Thus, even if poor people have negligible direct influence on the day-to-day decisions of elected officials, they--and their ideological allies--may have substantial indirect influence by altering the balance of power between Democrats and Republicans in the making of public policy.

In essence, reducing poverty and inequality will require more progressives in positions of power. Yet, modern-day anti-poverty advocacy is largely legislative advocacy, advocacy conducted by groups funded by non-partisan and mostly non-ideological foundations. As political scientist Andrew Rich has noted:

... the leaders of liberal think tanks are often preoccupied by deeply held commitments to producing objective research, on the one hand, and to connecting their work to issue-based grassroots activism, on the other hand. These commitments are compatible with the tenets of liberal ideology, but they are far less helpful to fighting a war of ideas.

This dominant liberal approach has met with limited success over the last few decades. Bartels' research helps to explain why.

In his TAPPED post on the Obama speech (via Matt), Mark Schmitt argues:

in Obama [the communitarian correction to liberalism] can be quite substantive, as I thought was shown in Alec McGillis's comparison of Obama and Edwards in their approaches to poverty—for Edwards poverty is about not having enough money, and the solutions are economic, including helping people move to where jobs are, where Obama was attracted to comprehensive efforts to rebuild community, including the non-economic aspects of life.

I agree with Mark about Obama's communitarianism, but I also think Edwards has a strong communitarian streak. While Obama's communitarianism comes up in his discussion of urban poverty, Edwards hits similar communitarian notes with his College for Everyone plan—which, in classic communitarian style, provides a benefit in exchange for service. And I'd argue that Edwards anti-poverty plan—centering as it does around the idea of a "Working Society" in which "everyone who is able to work will be expected to work and rewarded for working"—is consistent with communitarianism in most respects. You'll find no McGovern-style "Demogrants" in Edwards' or any Democratic presidential candidate's platform these days.

More generally, in my mind, one can be a good communitarian and still view poverty and related issues as fundamentally economic ones. This kind of communitarianism—which has a lot in common with late 19th century populism and Jeffersonian agrarianism, as well as with certain contemporary public intellectuals like Jane Jacobs, Wendell Berry, Christopher Lasch, and others—sees community and economy as inextricably linked. According to this line of thinking, the type of economy one has (agrarian vs. manufacturing, "free labor" vs. wage labor, small shops vs. big chains, etc.) largely determines the type of community one lives in.

There are important differences in how communitarian liberals and, um, liberal liberals talk about economics. In distinguishing communitarian thinking about the economy from traditional liberal thinking, it's useful to ask how each would answer the question: What is an economy for? The traditional liberal answer is something like "individual prosperity" or "a chicken in every pot." Communitarians don't necessary disagree with this, but they'd also add something like "providing citizens with the civic virtues needed to govern themselves and participate in democratic society."

In Democracy's Discontent: America in Search of a Public Philosophy, Michael Sandel captures this distinction when he notes:

... debates about economic policy have not always focused solely on the size and distribution of the national product. Throughout much of American history they have also addressed a different question, namely, what economic arrangements are most hospitable to self-government?

Thomas Jefferson, for example, in Notes on the State of Virginia, argued that only an agrarian economy would instill its citizens with the civic virtues needed for successful self-government. In the early 19th century, arguments were made against wage labor on a similar basis.

Getting back to Mark's argument, I also think it's possible to disagree with the idea that "poverty is [solely] about not having enough money" while continuing to see poverty primarily in economic terms. This is where a multi-dimensional and relative concept like social inclusion comes in handy—instead of reducing poverty to having cash income below a subsistence level, it recognizes that a variety of resources and opportunities are needed to participate fully in the life of one's community.

PS: Since both Matt and Mark mention John Rawls, I need to add an esoteric point. Rawls "difference principle"—which holds that inequalities are to be arranged so that they are to the greatest benefit to the least-advantaged members of society—is sometimes thought to require a right to a minimum guaranteed income for the "least advantaged", including able-bodied non-workers. But Samuel Freeman's terrific recent book on Rawls suggests it's rather more complicated than that. Freeman notes:

By least advantaged, Rawls means the least advantaged working person, as
measured by the income he/she obtains for gainful employment. .... Why does Rawls define "least advantaged" this way? Basically he conceives of society in terms of social cooperation, which he regards as productive and mutually beneficial, and which involves an idea of reciprocity or fair terms. ....

Reading Freeman's book, I've come away thinking that Rawls' theory of justice is much more interesting and rich (and radical) than the justification for 1960s-style welfare capitalism that it is often portrayed as.

Southern states have higher poverty rates than the rest of the U.S. but are also more likely to elect Republican Senators and Governors, and vote for Republicans for President. Is this because working class families in those states vote Republican, as David Brooks and other conservative commentators have claimed?

No, as Columbia University statistician and polictical scientist Andrew Gelman explains in a new paper.

.... we find that income matters more in “red America” than in “blue America.” In poor states, rich people are much more likely than poor people to vote for the Republican presidential candidate, but in rich states (such as Connecticut), income has a very low correlation with vote preference.

This helps explain why poverty isn't a particular concern for Republican members of Congress even when substantial shares of their constitutents are experiencing poverty. It's not that they think "poor people don't vote"; it's that they know that working class voters don't vote for them by and large.

I haven't read it yet, but Jonathan Chait's new book, The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics, sounds pretty good—here's part of Chait's summary from the TPMCafe Book Club:

The Big Con tries to explain how far-right economic ideas have come to dominate the American political agenda over the last thirty years. The book is divided into two parts. The first describes how the Republican Party was transformed, from the moderate Eisenhower-Nixon-Ford party into a party whose central aim is the upward redistribution of wealth. This is a story about the rise of the supply-siders, the transformation of the business lobby, and the overthrowing of the old, responsible Republican elite by right-wing class warriors. (In deference to some of the right-wingers who have graciously agreed to join us, I’ll try to avoid describing them with words like “maniacs.”)

The second half of the book explains how they have managed to get away with it in the face of hostile public opinion. My argument is that the decades after World War II, when there was a broad consensus between the two parties about the role of government, produced a certain style of governing. This style worked for the conditions of the time but is totally unsuited to the new landscape.

Chait—a senior editor at The New Republic—is no populist, but he makes this interesting confession:

There’s something that’s always made me uncomfortable about writing in such starkly class-based terms, and I’ve figured out what it is. The sorts of people who think in terms of class tend to be pretty left-wing. For that reason, people who share my political predilections—generally in favor of the Clinton economic program—tend to steer clear of class when they analyze American politics.

The problem is, the GOP just is driven by class. So if you try to understand modern American politics without understanding class, you’re going to get it wrong. And I think most reporters, pundits, and public intellectuals have been getting it wrong.

Dean Baker is keepin' it real:

.... there are two very distinct ways in which Democrats see themselves as helping out the middle class and poor. On the one hand, much of the Democratic Party leadership portrays the government as sort of a collective charity. These Democrats draw a picture that has the market determining societies' winners and losers. But, because they are nice people, they think it's appropriate to tax the winners to help out the losers. This distinguishes them from the Republicans, who want to tell the losers to get lost. This philosophy can be thought of as "loser liberalism," since it holds that the government must tax back some of the winners' money to help out those who did not do very well on their own.

This view can be contrasted with "power populism," which doesn't accept the basic government/market distinction that loser liberalism treats as its starting point. The power populists see government policy as determining who wins and loses in the market place.

This is a fair—and also fun and polemical—description of one of the major fault lines that divides the left. There are some more interesting variants of the liberalism that Baker describes, including some that are more robust. For example, in the The Stakeholder Society, Bruce Ackerman and Anne Alstott, offer up a less lightweight version of liberalism, and echo Baker's critique of charity as a model for government:

We are trying to break the hold of a familiar vision of the welfare state in America. In this view, modern government has succeeded to the traditional tasks of the church—tending to the old, the sick, the disabled. Like the church, the welfare state is concerned with providing the weak with a decent minimum.

Given this statement of the problem, debate centers on how minimum the minimum should be. Even libertarians grudgingly concede that some vulnerable Americans must be provided some care some of the time; welfarists push the minimum higher.

We reject the organizing premise of this unending argument. Our primary focus is on the young and energetic, not the old and vulnerable. Our primary values are freedom and equal opportunity, not decency and minimum provision. ... Our first concern is not with safety nets but with starting points; ... not with welfare, but with economic citizenship.

If you combine that variety of liberalism with power populism, you have a very powerful political philosophy, one that gave us many pieces of landmark progressive legislation in the 20th century, including the National Labor Relations Act and the GI Bill.

I was glad to see historian Alice O'Connor quoted in the obituary the NYTs ran earlier this week for Mollie Orshansky, who died in December. O'Connor, worked as an assistant program officer at the Ford Foundation in the mid-1980s, and in her important book Poverty Knowledge, has much to say that can inform the debate Inclusion is trying to start within liberal and progressive economic justice circles about whether defining the problem that we're trying to fix as poverty, particularly poverty as currently understood and measured in the United States, is a good idea.

O'Connor notes that during this period she was at Ford:

... the liberal research establishment was still reeling from the impact of Charles Murray's just-released missive Losing Ground. In that book, Murray used data and techniques earlier honed in predominantly liberal think tanks to argue that the liberal welfare state was to blame for a whole host of social problems, including poverty, family breakup, and crime. From an empirical standpoint, Murray's argument proved easy to demolish, and a number of poverty experts rose convincingly to the task. But their careful empirical analyses were no match at all for Losing Ground as an ideological manifesto: couched, as they were, in the langauge and conventions of ideologically neutral objectively, these critiques alone were inadequate as a response to Murray's attach on both the value premises and the performance record of the welfare state. Nor were poverty experts organized to counter the network of explicitly ideological and libertarian think tanks that had managed, through their own organizing and publicity, to gain control of the terms of the poverty debate. Along with many others at the time, then, I welcomed what has since become a perennial conversation about how liberal and progressive philanthropy can use knowledge more effectively to shape rather than react to public debate. At the same time, I was stuck by what is still a pervasive assumption in the network of research institutes that make up the core of the poverty research industry: that knowledge, in order to meet the standards of empirical testing and rigorous scientific scrutiny, must—indeed that is all it ever is or ever can be—apolitical if not entirely value- and ideology-free.

Central to O'Connor's critique of comtemporary "poverty knowledge" is that it:

... reflects a central tension within liberal thought about the nature of inequality ... whether it is best understood and addressed at the level of individual experience or as a matter of structural and institutional reform. That this tension has more often been resolved in favor of the individualist interpretation can be seen in several oft-noted features in poverty research. One is the virtual absence of class as an analytic category .... A similar individualizing tendency can be seen in the reduction of race and gender to little more than demographic, rather than structually constituted, categories. ...

She concludes her book by arguing that:

The single most important challenge for poverty knowledge in the post-welfare era is to put poverty on the national agenda as a legitimate public policy concern: not in the narrow sense of income deprivation, but as part of the larger problem of the steady and rapid growth of economic, political and social inequality. Even more than some new policy "bluepoint," meeting this challenge wil require a basic reformulation of the "poverty problem" along several lines.

First, much like Progressive social investigation around the turn of the last century, current-day research faces the task of de-pauperizing poverty as a social problem at the outset, by making poverty knowledge a broad-gauged study of political economy rather than a narrow study of the poor. In shifting its focus from "dependency" to political economy, a new poverty knowledge would significantly expand the scope of inquiry, to examine the institutions, social and economic practices, work conditions, and especially the policy decisions that shape the economy and distribute economic opportunites. ....

O'Connor is so right on here that I wish I wrote that—although I'd call the thing we want to put back on the "national agenda as a legitimate public policy concern" something other than poverty. At this point, the word—which, in public understanding, conveys approximately the same thing as the word pauper did 100 years ago—simply comes with too much baggage and accumulated assumptions to change the public understanding of it, at least over the next few decades. Using the term poverty in our public efforts to reduce social exclusion and inequality is as misguided as say using the term amnesty would be in the current immigration debate, or continuing to use the term welfare in any debate.

O'Connor lays out two additional lines of reformulation that I'll close this post by excerpting:

A second step toward reformulating the "poverty problem" in public consciousness is similarly to alter the lenses of cultural analysis, this time to acknowledge the distorting effect of the "culture of poverty" and its variations, and to make poverty knowledge instead a study of the broader cultural dynamics that sustain, indeed encourage, social and economic inequality. The central concern in a new poverty knowledge would not be about whether poor people have a cultural affinity for poverty but about the cultural mechanisms for according status and privilege, deserving- and undeserving-ness, social value and denigration, based on class, gender, and race. At the same time, a reconstructed poverty knowledge would show greater appreciation of the role of social scientists as cultural brokers by declaring a moratorium on the stigmatizing langauge that riddles contemporary research with such loaded terms as "hard core", welfare "users", "recidivism," and "intergenerational transmission." .... a more culturally aware poverty knowledge would demand a more accurate but also a more humanistic and less distancing language that respects how poor people think of themselves—as citizens, workers, parents and neighbors rather than as benighted, deviant, or somehow deficient "other" Americans. [I'd add to this that "poor people" also don't think of themselves as "poor people."]

A third task is to generate poverty knowledge within a far more diversified set of institutional arrangements, recognizing the limitations of the "research industry" model .... This is not simply a matter, as some would have it, of learning lessons from the far more effective policy think tanks of the Right. It is a matter of finding the institutional structure that can generate a genuinely independent and critical body of knowledge that aims to set rather than follow the agenda for policy debate....

Amen.