Rebranding the American system to include redistribution

From Steve Waldman at Interfluidity:

Health care costs are millions of people’s livelihood, and inefficient health care costs are a big part of that. Much of how modern economies survive is by protecting information problems and barriers to competition that sustain overpayments. This broadens the wealth distribution while permitting recipients the fiction that flows of purchasing power involve no transfers (“welfare”), only proud, self-reliant income. The theory of labor unions and the theory of an inefficient health sector are identical, except one is more transparent and the other has proved more capable of buying political protection. The problem, in both cases, is not that there are transfers, but whether the distribution of transfers — to whom, from whom — is wise and fair. By forcing ourselves to pretend there are no transfers, we prevent ourselves from even posing the question.

Perhaps I am a creature of the conventional wisdom of my day, but I want to tell it strong. It is not those who advocate, but those who prevent, stabilizing transfers of purchasing power, who are the true Marxists. These self-styled capitalists do not espouse Marx’s theories, but they do something much worse: They perform them. They behave in precisely the way that Marx expected capitalists to behave. They cripple the American system’s greatest strength — its ingenuity, flexibility, adaptability. They prevent the sort of collective action through which earlier generations proved that capitalism could made be consonant with decent, stable, and broadly prosperous societies. In doing so, they risk proving Marx right.

Not only do I agree with the substance, here, but I think Waldman is doing something interesting rhetorically, which enacts the point he is trying to make.

The way I would put what he is saying is that with redistributionist welfare policies (which are necessary to stabilize a capitalist economy), ideology is everything. They must be presented in a way that masks incidental injustices and preserves the fiction of individual autonomy to the highest degree, for in that autonomy, more or less, resides the quality of life the system is erected to maintain. Not material wealth or endless distraction, but the sense that one is the author of one’s own life within an essentially open social field. I would argue that we intentionally prevent ourselves as a society from “posing the question” of the fairness of transfers, since scrutiny unwinds the idea most of us are not in reality children at the mercy of a paternalistic government. Posing the question (Marxists might call it “highlighting the contradictions” or something like that) presents the possibility of disrupting the necessary transfers, which, as Waldman notes, are the way government solves the collective-action problem that capitalist accumulation creates (i.e. all capitalists must be rapacious and accumulate for its own sake or else be extinguished through remorseless competition). Instead the illusion of unrestricted freedom allows us to tolerate the hidden subsidies, the cronyism, the intermittently manifest inequality.

But whereas in other countries, this evolving regime of transfers is labeled social democracy or even socialism, Waldman tries to assimilate it to capitalism itself — to the real “American system,” not the conservative free-market fantasy version of it — and argue that the only successful capitalist societies are the ones that take on these socialistic redistributionist elements. He’s essentially rebranding American capitalism: it’s not the deregulated libertarian marketplace; it’s a mixed economy that balances entrepreneurial ambition with social welfare. Its innovative engine is not a matter of deregulating and finding new ways to profit, but in finding new and cleverer ways to solve capitalism’s collective action problem.

The point then is to redefine the American system to include different standards of fairness and social welfare — to fight on that ideological terrain — without pretending to be making nonideological statements yourself. Instead, seem to concede to the opposing view will hijacking their preferred terminology.

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