Robert Kuttner Can Democracy Survive Global Capitalism Review

Globalization'south friends are fast defecting. Some economists who one time extolled the virtues of complimentary merchandise and the gratuitous flow of capital now signal out that globalization has brought smaller gains than were once claimed, while destroying working-class jobs and communities. The American public's views of foreign merchandise take grown more positive as the U.Due south. economy has recovered from the Great Recession, but in 2014, co-ordinate to a poll by the Pew Research Center, only 20 pct of Americans thought that trade created new jobs, and just 17 percentage believed that information technology raised wages. A populist anti-trade backlash is in full swing.

As globalization's defenders retreat from the field, a different vision has emerged of how to achieve prosperity. On both the left and the right, economical nationalism has returned. Both camps hark back to a supposed U.South. golden historic period, when well-guarded borders kept out foreign goods, services, coin, and people that would otherwise have disrupted national well-being. For U.S. President Donald Trump and his advisers, the slogan "Make America Great Once again" captures the sentiment, even if the precise moment in history to which they desire to render is left unspecified. For thinkers on the left, the golden age started with the New Deal reforms of the 1930s and lasted until the 1960s. Over this menstruation, the economy and society of the United States were structured by the policies and institutions of the New Deal.

Robert Kuttner's Tin Democracy Survive Global Capitalism? is the latest in a stream of works that see the New Deal as proof that government can tame the kind of unregulated capitalism that today has led to vast inequality in wealth and income, a collapse of social mobility, and a climate of insecurity. The history of the Roosevelt administration's response to the Great Depression, in Kuttner'south account, shows that societies tin can strike a ameliorate residual between capitalism, equality, and democracy.

Kuttner'southward criticism of mod inequality hits its mark, but the solutions he proposes rely on an incomplete account of the history of the New Deal, which was built on a coalition of disparate interests. When that brotherhood broke downwards, the economic compact forged by the New Deal died with it. Today'southward progressives will take to build new coalitions to ensure that globalization and social advances once again go manus in hand.

HOW THE NEW DEAL HAPPENED

In his account of the New Bargain, Kuttner focuses particularly on the Glass-Steagall Act of 1933, which separated commercial cyberbanking from investment banking and sharply reduced the economic risks that arise from unregulated fiscal markets. He also emphasizes the importance of federal support for labor through legislation on collective bargaining and job creation. He argues that these policies were abandoned in the 1970s because of the growing political influence of economical elites—not because the policies themselves were unworkable. At the fourth dimension, the U.South. economic system was plagued by stagflation, that is, high levels of aggrandizement combined with boring economical growth. Only Kuttner claims that dealing with it demand not have spelled the end of egalitarian commercialism. He writes,

The shift back to radical laissez-faire—neoliberalism—was non required by the economic circumstances. Neither was the full deregulation of finance, nor the enforcement of austerity, nor the employ of trade rules to further undermine domestic managed capitalism, nor the indulgence of globalized and systematic taxation evasion.

Since the demise of the New Deal was not inevitable, Kuttner argues, the United States should bring it back. The same policies that combined growth with equality back then are desirable today, he suggests, albeit with some updating.

Kuttner's powerful indictment of today's inequality and the dangers it poses to commonwealth is on target, but his proposed solutions rely on besides simple an account of the politics that fabricated the New Bargain possible. He sees politics as a contest betwixt "the people" and a unitary "elite," a characterization common to populists on the left and the right. To business relationship for the success of the New Bargain, he points to "inspired leadership backed by the power of mass movements." He recognizes that contingent events turned out in the New Deal'due south favor, but what mattered most, he writes, was the mobilization of labor, which empowered the state to regulate finance and to push back against the interests of capital. Yet the coalitions that underpinned the New Deal reforms were far more complicated and morally fraught than Kuttner acknowledges.

Franklin D. Roosevelt in 1935.

Time Life Pictures/Pix Inc./The LIFE Picture Collection/Getty Images

The New Deal was built on compromise. Although Kuttner does not pay much attention to these bargains, they were disquisitional in getting New Deal legislation through Congress. Analyzing the coalitions behind them is essential for understanding both how the New Deal was possible and how it fell apart. As the political scientist Ira Katznelson argues in his 2013 study of the politics of the New Deal, Fear Itself, the key legislation could never have passed without the votes of segregationist southern Democrats, who controlled crucial committees in Congress. To win those votes, northern and western Democrats had to accept the South'southward white supremacist racial arrangement: they agreed that new federal programs would maintain and reinforce segregation. Nevertheless the coalition that supported New Bargain reforms fell apart once southern Democrats came to believe that the New Bargain had yielded too much power to organized labor and had washed too much to promote federal ability. Ultimately, it was a backfire against the civil rights motion and civil rights legislation, not globalization or neoliberalism, that dealt the final blows to New Deal politics.

Most democratic compromises are not every bit morally troubling as the i between southern Democrats and northern and western Democrats in the 1930s. But Kuttner misses the diversity of interests that take to be accommodated within any democratic strategy for political and economical reform. His view of political reform every bit a struggle between "the people" and "the elite" has much in common with the views of correct-wing populists. Kuttner is at great pains to distinguish his "progressive" populism from what he calls "neofascist" or "reactionary" populism, and his understanding of Americans and their interests and ideals differs in some radical ways from the former Trump strategist Steve Bannon's conception of "truthful" Americans as exclusively Judeo-Christian whites. But by giving the compromises behind the New Deal such minimal treatment, Kuttner downplays the extent to which the politics behind the New Bargain required coalitions of partners with unlike, even contradictory, interests.

UNLIKELY ALLIANCES

The kind of brotherhood between progressive reformers and white supremacists that made the New Deal possible is no longer an adequate one. Only tackling inequality, lack of opportunity, and the risks posed by unrestrained financial markets will once over again require those on the left to make uncomfortable partnerships. Leaders will have to class coalitions that bring together both those who benefit from globalization and technological change and those who have lost out and now demand greater equality within the United States.

The case for globalization rests non only on its economical benefits, which may have been overstated, merely also on its political upside, which has been largely overlooked.

The first period of sustained globalization, from 1871 to 1914, offers several strong precedents for such coalitions. In the United kingdom, costless trade enjoyed strong support both from businesses and from working-course associations, who saw it as lowering the toll of food in workers' budgets. In Kingdom of belgium, socialists and trade unionists agreed to back up lower tariffs in substitution for business commitments on social policy and limits on imports from low-wage countries. And in the The states, as the political scientist Adam Dean has shown in his 2016 book, From Conflict to Coalition, when employers accepted wage agreements that shared a proportion of the company's profits with workers, the unions allied with the employers on trade.

Kuttner rejects the idea that such deals could open up a path to reform. His vision is a different one: to restore public ability and constrain capitalism with a strategy of "progressive populism," which he defines as a "public that is in a high country of autonomous mobilization." He discounts even those compromises that might be fabricated betwixt progressives and moderate Democrats who try to entreatment to crossover Republicans: "Pro-corporate Democrats tin can and practise get elected with such views—but why bother?"

To Kuttner, the ultimate sin of globalization is that it undermines democracy by limiting national regulation of the economy. Merely like both left-wing economic nationalists and their correct-fly counterparts, he fails to articulate a vision of an international economical guild that would serve U.S. interests and win the back up information technology would need from other countries in social club to succeed. Left-wing economic nationalists such every bit Kuttner ofttimes signal to the 1944 Bretton Woods agreement on merchandise, budgetary relations, and capital mobility as a model for a reimagined international economical organisation.

Under the Bretton Woods organization, national governments retained control over the motility of capital across their borders. The agreement provided for both a reserve currency, the U.South. dollar, to which other currencies inside the system were pegged, and an international mechanism to extend loans to countries running deficits in their balances of payments. As a result, the system immune governments that were rebuilding their economies after World War II to support domestic industries without worrying that the spending would crusade the kinds of debt crises that had plagued the world under the gold standard, which linked each currency'southward value to that of golden. Democratic accountability is effective just within national borders, so populists prize the latitude that the Bretton Woods arrangement gave governments to regulate the menstruation of goods and capital. They argue that the neoliberal "Washington consensus" of the 1980s and 1990s, which replaced the Bretton Forest arrangement and which supported the unrestricted movement of capital and far freer trade, has degraded democratic governance.

However many populists miss that the Bretton Forest organization worked besides equally information technology did and for as long as it did thanks just to the United States' exceptional authorisation of the global economy. As other industrial powers recovered from Earth War Ii, the United states' oversize economic influence was spring to diminish. During the Cold War, moreover, U.S. policies contributed to the rise of the United States' future merchandise rivals. Preventing the spread of communism meant stimulating economic recovery in the countries of Western Europe and East Asia. If Washington immune these countries to export to the United States without fully opening their own borders to U.S. goods, services, and capital, it reflected a determination to forbid the growth of pro-communist forces there, rather than a naive devotion to costless trade. Political economists still debate whether it was these market-based policies that accounted for the transformations of Hong Kong, Japan, Republic of korea, and Taiwan into avant-garde economies or whether state backing for industry was more important. Just information technology's hard to deny that exporting goods to rich countries has so far proved the only strategy for transforming some of the poorest countries on world into some of the richest.

The case for globalization rests not just on its economic benefits, which may have been overstated, but also on its political upside, which has been largely disregarded. Economic nationalism means a politics focused on borders. As the current escalating trade state of war between the United States and both China and the European union shows, merchandise hostilities risk spilling over into many other areas, such as war machine cooperation and scientific collaboration.

The political benefits of relatively open borders were cardinal to the support that socialist and merchandise-wedlock movements provided for the beginning moving ridge of globalization. Back then, those on the left saw that their conservative and nationalist foes on domestic issues were also profiting from economic protectionism. They recognized that protectionism tends to suppress contest at home without providing whatever new ways for the public or authorities to hold large businesses accountable.

The concerns that today's populists limited about a race to the bottom in an open global economy are valid, but history shows that all the gains need not go to the very top. During the late nineteenth and early twentieth centuries, countries across the advanced industrial globe expanded social welfare programs and citizens' rights. Pressure from left-fly parties and unions forced governments to link, still partially, the lowering of border controls to social and economic advances for broad swaths of lodge. Yet during the current moving ridge of globalization, left-wing groups have failed to build new coalitions to ensure that the gains are broadly shared. The left needs to rediscover the fine art of coalition building that in one case immune information technology to combine globalization with social progress.

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Source: https://www.foreignaffairs.com/reviews/review-essay/2018-08-13/brand-new-left-same-old-problems

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