Can the System Save Itself Again?
The political class has forgotten what their predecessors learned the hard way: if they want things to stay the same, things are going to have to change.
On Friday, Politico reported that Democratic leadership had begun to panic as they realized that not only had they yet to lock down enough support in Congress to ensure passage of President Biden’s domestic agenda before key votes later this week, but that an agreement was still nowhere in sight. If they fail to secure one, party leaders believe it will extinguish any hope of maintaining their House and Senate majorities in next year’s midterms elections. The consistent defeat of a new president’s party in their first midterm after assuming office made this a dubious prospect already. But the future Democrats face is much more dire than the loss of a single election.
Given the patterns by which the parties have tended to trade power in Congress, the first two years of Biden’s term are almost certainly the last time Democrats will enjoy unified control of government for at least the next eight years. They also confront intensifying counter-majoritarian pressure in the Senate and the Electoral College, which will make it more difficult for their current coalition to win power as time goes on. The number of states under Republican control in the redistricting process, as well as a raft of new voter suppression measures, will exacerbate their disadvantage. Biden’s agenda is thus his party’s best chance to shape the country’s political and material terrain in its favor before a challenging decade ahead.
Yet despite the urgency of this task, Democrats have been unable to summon the will to accomplish it. This imperils not only Biden’s legacy as president, but the viability of the party itself as a contender for national power in the medium term. And that isn’t the only potential fallout from Democrats’ inattention to their own prerogatives.
The American social contract is in desperate need of renewal, if only to ease the stress that 45 years of slow-burn immiseration is putting on the political system. Donald Trump’s victory in 2016 was the result of northern non-college whites realigning their politics to match non-college whites in the rest of the country. The high-wire act that saw this cohort defy demographic gravity for sixty years was sustained by a unionized industrial sector loyal to the Democratic Party, an arrangement that has disintegrated. Economic stagnation has also led to a nationwide collapse in social trust and faith in institutions that is fueling disturbing pathologies in our culture and politics.
Some Democratic elites seem to recognize this fact, as well as the high political cost of their fiscal restraint following the 2008 financial crisis, hence why many are now willing to approve trillions in spending on new social programs. It’s also why they can’t just take whatever deal Joe Manchin and Kyrsten Sinema feel like offering; this amount is the minimum required to begin addressing these problems. But it’s still nowhere near adequate to tackle climate change, which threatens the entire global economic order that underlies American imperial power. Further cuts would compromise our ability even to implement resiliency measures, let alone the decarbonization necessary to avert the most catastrophic outcomes.
From the point of view of the Democratic Party, Biden’s domestic agenda is critical to its short-term electoral fortunes, the medium-term stability of the political system that empowers it, and the long-term health of the biosphere in which the capitalist mode of production is possible. So how can it be that this party, both as a self-interested actor and the superego of American capital, may fail to pass it?
Throughout its history, critics and admirers alike have understood that if improperly managed, capitalism will destroy a society’s capacity for social reproduction, and with it the conditions that sustain its own existence. For this reason, much of the political class in the Global North came to recognize the need for their states to ensure a more stable balance between the productive needs of capital and the human needs of labor - for their own citizens anyway. Though capital fiercely resisted this renegotiation of the social contract, it was disciplined through the power of organized labor and a political class willing to accept and enforce a compromise.
In the US, this process first unfolded in response to the rapid industrialization of the late 19th century, which gave rise to bewildering wealth inequality and the most explosive labor violence of any country in the industrial west. Also emerging from this ferment was what today we would call the professional managerial class: the stratum of managers, bureaucrats, planners, academics, and other knowledge workers tasked with the daily administration of both the state and the new economy. More concerned than the rich by the dysfunction of the new social order, and with sufficient resources to organize within it, they formed the base of the progressive movement that sought to stabilize the system by easing its worst brutalities and inefficiencies.
As a voting bloc, a pressure group, and a recruitment pool for elected office, this class acted as a broker between capital and labor, advancing early regimes of corporate regulation while preserving the primacy of capital within the system. It’s important to note that progressives didn’t espouse a wholly positive view of the working class or even democracy, and that elements of their agenda were quite reactionary. We must also acknowledge the role of trade unions in securing victories from this era, when the labor movement was also gaining greater coherence. But in the absence of revolution, labor’s needs were institutionalized with the connivance of a political class that saw itself as distinct from capital - if still in alignment with it - and able to act independently when necessary to preserve the integrity of the system.
The stock market crash of 1929 and the depression that followed proved that progressive reforms alone could not accomplish this goal, which required a large-scale redistribution of the national income. Here too, we cannot discount the role of labor power in creating the conditions that made redistribution the central political issue, or in winning the piece of the pie that it did. But nor can we discount that the depression had deeply compromised workers’ organizing capacity, and that important segments of the ruling class believed a less fractious relationship with labor could reduce systemic threats to capital. Once again, a self-interested political class was available to broker a new deal, one that most historians acknowledge rescued the working class in exchange for saving capitalism.
But this new deal came with an expiration date. The mid-century welfare regimes of the capitalist core were predicated on the hyper-exploitation of the Global South, where access to cheap (or slave) labor and cheap (or stolen) raw materials allowed the rate of profit to continue climbing even as capital was forced to compromise with labor in the core. In the 1970s, the clock ran out on this devil’s bargain when even the most rapacious extraction could no longer guarantee accelerating profits. To grease the wheels of accumulation, every president from Jimmy Carter through George W. Bush helped build out a new model of governance that cut corporate taxes, dismantled welfare, deregulated industry, broke labor power, and promoted financialization.
This is the original meaning of what is now the left’s favorite floating signifier: neoliberalism. In George A. Romero’s Dawn of the Dead, a preacher explains the emergence of the undead by intoning: “When there is no more room in hell, the dead will walk the earth.” Well, when there is no more labor to profitably exploit in the periphery, capital will deepen exploitation in the core. If capitalism is a vampire that “only lives by sucking living labor, and lives the more, the more labor it sucks,” as Marx described it, then neoliberalism is a zombie, returning to feast on the flesh of loved ones after picking the bones of strangers clean.
As the benefits of dwelling in capital’s global headquarters have eroded, the American people’s anger, resentment, and despair have intensified, and this dynamic is the root of all the spiraling neuroses in our politics. The Democratic Party, shorn of its base in organized labor and disciplined by nearly half a century of neoliberal adjustment, has failed to propose a remedy. It squandered the perfect opportunity to do so after 2008, when President Obama recapitalized the banking system while allowing millions of families to be evicted from their homes. He then pursued an anemic stimulus program that stymied recovery for nearly a decade, weakening support for Democrats in the Rust Belt and enabling Trump’s victory there in 2016.
Though the Affordable Care Act was the first real expansion of the welfare state in decades, half of it was a marketized boondoggle designed to turn public money into private profit for insurance companies. Later, Obama tried to affirm his reputation as a serious policy thinker by pursuing a grand bargain to slash Medicare and social security, only to be rebuffed by the GOP. By pledging to protect these programs during his 2016 campaign, Trump managed to run to Obama’s left on entitlements. The “Obama-Biden Democrats” might not have deepened the neoliberal project, but nor could they imagine an alternative program.
Then Trump came along and seemed to spark some creativity. In the first three years of his term, the macroeconomy was humming thanks to his laudable indifference toward deficit spending and the loose fiscal policy of his Federal Reserve. The absence of any inflation revealed just how much slack the prior administration needlessly left in the economy. When the $20 trillion money cannon the government fired at markets to cope with coronavirus also failed to produce inflation - but did succeed in reducing poverty to historic lows - the fiscal killjoys were further discredited. No doubt this emboldened Democrats to pass their own $1.8 trillion in pandemic relief when they returned to power in Washington.
So when the party first indicated it was considering a multi-trillion dollar social spending package earlier this year, I admit they even had me going for minute. At the time, I speculated that the ruling class had concluded that neoliberal governance models had outlived their usefulness, and that new strategies were needed to secure their position amidst domestic political uncertainty and the specter of climate change. Even elements associated with the Democratic Party’s moderate wing have been openly discussing the need for a second progressive era for exactly this purpose.
But it turns out capital remains as shortsighted as ever, and has mobilized to tank Biden’s agenda. At long last, we’re about to find out the answer to the most important question of our era: just how much can the political class extract from capital in the absence of mass popular mobilization or a muscular labor movement?
If it isn’t enough to reverse, or at least arrest, the decline of living standards for the working class, we can expect further instability in the political system. Though they’d be loathed to admit it, Democrats should be thanking their lucky stars that the sui generis figure that first emerged to take advantage of these cracks in the foundation was Donald Trump. A right-populist insurgent with total independence from the Republican power structure, a highly activated base, and the ability to circumvent media gatekeeping could have executed a realignment that would have crippled the left for a generation or more - had he been willing to actually challenge capital.
Thankfully, Trump’s real passion in life is doing Hot or Not segments on the TV Guide Channel to rank the looks from the Condé Nast Halloween party, so this fate was avoided - for now. But if this legislation also fails to provide for appropriate levels of decarbonization and climate resiliency, that’ll be the least of our worries.
So far, the signs are not promising. Last night, Nancy Pelosi announced that the House would move forward with a Thursday vote on the bipartisan infrastructure bill even though a deal on the broader Biden agenda had not yet been reached. House Progressives are demanding that Senate Democrats first pass the broader Biden agenda before they’ll agree to approve the more moderate infrastructure legislation. Now it seems Pelosi thinks she can call their bluff.
They must not let her. The Democratic Party has now truly become - to borrow a second metaphor from Marx for the day - a committee for managing the common affairs of the whole bourgeoisie. The party has lost all ability to act independently from capital or impose any limits on its most self-destructive excesses. In the past, the left could lean on mass mobilization and a robust labor movement to force Democrats’ hand. But that capacity no longer exists, and time has run out to rebuild it. House progressives can only present the Democratic establishment with as stark a choice as possible - the entire package, or none at all - and hope it jogs the party’s muscle memory of what its role in the system is.