The Twilight of Capitalism by Michael Harrington (Part II: The Future of Karl Marx or The Secret History of the Contemporary Crisis, Chapter 11)

Chapter 11 is about “Adam Smith’s Sociology” or how some economists and analysts went from liberalism or socialism to neo-conservatism.  Of course, time has shown neo-conservatism to be more related to Zionism and a muscular foreign policy in the Middle East and South Asia, including a great deal of Islamophobia – or a desire to impose American style democracy to justify going after resources. The people analyzed in the chapter would now be called Neo-Liberal. These are leftists who believe in free market solutions, are interested in not incentivizing poverty through social welfare and trust managers more than workers, which is not conservative – in some cases it is reactionary, but in a gentlemanly way.

Daniel Patrick Moynihan is one such neo-liberal, going so far as to co-chair President George W. Bush’s Committee to Strengthen Social Security, which proposed letting Wall Street work its magic to build retirement nest eggs faster and thus make the system solvent. Had they suggested equal employer contributions for all workers and funding cooperative socialist pension accounts owning one’s own firm (insured of course), they might have caught traction, although then the Republicans and their donors would have bailed.

As you might guess, I was active in the debate, even writing an issue in Labor and Corporate Governance, which drew the ire of the AFL-CIO Investment Management decision, who did not understand why I would interfere with politicizing the issue, which seems to have led to closing the journal permanently.  They especially did not like the second part, which detailed how a cooperative socialist or union controlled firm might operate, since big labor has their own corps of executives.

In the end, this issue did not win the Congress for the Democrats, who had sold their souls to Wall Street anyway for fundraising purposes – a trend that has not stopped. It took corruption, both in terms of seducing pages and interns and actual bribery to end the GOP majority. Neo-liberals, Mrs. Clinton among them, still dominate the leftist politics although the Sanders Political Revolution is showing progress for socialism, not cooperative, but democratic.

The text tears down the arguments the neo-liberals put out in the 1970s, though it seems that Bill Clinton helped put them into practice in welfare reform, which is a reason minority voters were not as enthusiastic supporters as they recently had been, staying home on election day.

The first neo-liberal argument was that government did too much, or tried to. It mirrors populism and, rather than going after the poor, goes after social welfare bureaucracy.  The reality is that the programs did not do too much. They did not do enough. If there is fraud  and social dysfunction in the system (and it does exist when to get cash, you have to sell food stamp befits for 50 cents on the dollar). Reform made things worse, punishing any hint of non-compliance with termination and reducing benefits while forcing women into training to do menial work in hospitals, stadiums and retail. In essence, reform helped cement the lower class. It is no wonder Marxian philosophy is more relevant than ever.

Even the criticism that welfare destroy families come from requirements that a man cannot be living in the home (he should be working) and any that instead find the only job they can get in the drug trade leads to violent death or purposeful incarceration.  Some classes, both white trash and blacks get prison, while nice middle class kids get treatment and probation for exactly the same thing. Marx again shows that class warfare is not dead, just that poor people are still losing.

Deliberate underfunding is not due to budgetary restraint, but to active class domination by reactionaries. The programs that get funded are the self-funded and tax subsidized programs for seniors – who now want the government out of their Medicare. This would be funny if it did not lead to a willingness to cut funds for the poor because of supposed dysfunction.

Housing was an area of focus, especially in terms of community development. Indeed, the latest attempts at this issue, both Enterprise Zones (favored by Jack Kemp) and the recent push for Opportunity Zones give more power to local capitalists than the people and have little to do with giving poor people good housing that is also affordable. Cooperative Socialists would have the cooperative do this rather than local business associations (unless they were socially owned, not owned by local capitalists in search of subsidy and even public schools which cannot desegregate itself because housing is segregated, as it is today. Socialism here does more than either regulation by the Courts, which only go so far, or the free market, which favors local developers.  Marxian analysis is validated again.

The second objection is that social welfare is too egalitarian. The reality of the late midcentury is that equality was not the goal for many, emancipation of women was, which rattled the cages of the religious as well, as it would lead to freedom in sexuality and demands for priestly ordination. These battles are still going on.

In school equality, the real answer is less about funding schools and more about improving the skills of parents. Parents who are undereducated cannot help their children. Of course, for those who need undereducated people for jobs no one else will do without a huge salary increase, this is a feature, not a flaw. Marxian reasoning triumphs again. 

Charles Murray likes to assert that such people are among the unworthy poor and are simply not that smart, rather than being underserved by a racist educational system.  Such reactionaries believe talent rises to the meritocratic top. Their ultimate goal was to have a billionaire CEO be president. The result was Trump, whose business accomplishments are illusory and his recent wealth seems to come from selling out to Russian oligarchs and their leader, Vladimir Putin, who recent reports say is really richer than Steve Bezos, the Amazon capitalist.  It seems that rigging the game is more important than merit. Marx is correct again.

Affirmative action is another issue where a great deal of resistance remains (as such preferences hurt legacy systems.  Minority hiring in business sometimes has more to do with tokenism than equality, as does the use of minority set aside firms. The solution is probably cooperative socialism, where employer paid subtraction VATs can be redirected to education of any student who is qualified based on work in their first two years of school, with a service requirement for some of those funds, which is supplemented with an ownership stake and full support, including spending money. Getting the right people could involve hiring the clearly superior, not hiring those out of their element, regardless of ability to pay or family connections (the Trumps of the world, et al) and selecting the rest using a lottery with no weighing, provided minimum qualifications are met.

Tax policy went the other way in 2017.  The beneficiaries are corporate executives that win bonuses for cutting worker pay and benefits and corporations, who pass any tax benefits to their shareholders rather than creating jobs. Job creation is based on consumer demand. Strike another blow for Marx and Keynes. 

The last neo-liberal view counseled moving slowly and timidly. That only let the opponent of reform get stronger, although some concessions were made, while some were given in Clinton’s part in welfare reform and continuing calls to cut entitlements, even for Seniors.

Bold action did happen in the first part of the Obama Administration, which passed health care reform, even though it had Republican origins (and featured counter arguments against their own creation), still the response to the underwater mortgage crisis was neo-liberal timidity, likely advanced by advisor Larry Summers.

The original recovery plan had to be watered down to mostly a tax cut to make work pay – essentially subsidizing low income employers rather than demanding higher minimum wages, which eventually would have resulted in higher spending, like right away. Business got its share of projects, although growth did not take off until tax rates on the wealthy were increased automatically as the Bush cuts sunsetted – sadly, Obama’s timidity about soaking the rich during a Depression delayed the recovery by two years. Score another for Marx and Keynes.

Income specific policies leave wealth undistributed. Short of a citizen’s dividend and wealth taxes, especially on land value, which the federal constitution does not permit on a national basis, the best such distribution is diverting social insurance to purchasing one’s own employer, then shifting to a standard labor hour currency, so that people who had low pay get more and those with huge salaries can only convert based on their per hour earnings.

Conservatives and neo-liberals adopted a Burkean reactionary view of social welfare as damaging moral fiber and preventing the meritorious from rising. The aforementioned writings of Murray debunk any value of those views.  Sadly, Moynihan’s attempts at a basic income fell flat in the Nixon Administration. Even then, free money does not necessarily upend capitalist authoritarianism. Employee ownership will. The alternative is benefit limits, especially in health and disability insurance, as well as retirement insurance, that provide a level when benefits faze out, providing a disincentive to work other than low paying jobs. Again, class analysis triumphs.

Recent education reforms like “No Child Left Behind” lead to teaching for the test rather than broad education, dispirited students who are not good test takers and, again the assurance of a permanent underclass.

The Child Tax Credit is more socialist than most policies, as it phases out only slowly and helps most families with children, although the need for a minimum wage remains so that tax credits don’t result in people working for free. Interestingly, libertarian economist Milton Friedman and Republican presidents are strong advocates for raising and enlarging this credit, along with the Democrats, but they have not gotten to adequacy yet.  Instead of paying $1000 per child per month, the $1000 is an annual benefit, often gouged out by tax preparers and used to catch up on bills rather than provide a higher standard of living. 

An interesting strain of conservative thought are the Distributists, who rely on Catholic Social Teaching and Chesterton to reach their rather socialist ends. Their medievalism and their attachment to Church authority taking over for civil authority, which seems to be based on the kind of imminent crisis that joins them to many libertarians, Fundamentalists, environmentalists and even Marxists who know only the elevator speech. Of course, the crisis never comes. Capitalists are good at printing money and bailing out private interest when necessary, as in 2008 in a collapse largely predicted for a decade earlier by Harrington in Socialism.

The 1970s predicted the collapse of organized religion. He spoke before Falwell emerged and the initial popularity of Pope John Paul II and the revival of Christian humanism under both Pope Francis and the Emerging Church movement. Right wing religion is going into death throes, especially in its link to King Donald, the Moron, but believers, like me, still have something to add to the movement for equality and democracy and the defeat of capitalism.

Harrington did not foresee the Reagan Counter-revolution, which highlighted these trends.  That Neo-conservatives have abetted his legacy is a sad part of the history of the Left.