IN JANUARY 2014 GOOGLE CHAIRMAN ERIC SCHMIDT APPEARED before the World Economic Forum in Davos, Switzerland, and acknowledged that due to rapid advances in technology, including some of the projects Google was working on, countless middle-class jobs that had seemed beyond the reach of computers and automation were going to be at risk in the near future. More and more middle-class workers were going to lose their jobs and there was little on the horizon to suggest there would be new jobs for them. This would be, according to Schmidt, the “defining” issue of the next two to three decades.1
Schmidt had no reason to raise this issue unless there was a basis for his concern. And he was not alone. At meetings of high-level technology executives and engineers, some public, some private, around the world over the past several years, few topics have garnered more attention than the radically changing nature of work and the prospect that it will change even more radically in the near future. But these issues are rarely raised with even the muted level of alarm expressed by Schmidt. More often than not, the automation of whole sectors of the economy, and the ensuing displacement of workers, is discussed as “creative destruction,” from which will emerge tremendous opportunities to cut costs and increase profits. These discussions of the jobs that are certain to be eliminated—and the whole industries that will be altered beyond recognition—are robust and enthusiastic.
Yet, they do not include the citizens, the workers, and the communities that are headed for creative destruction. That’s jarring because Schmidt and his CEO compatriots are not futurists imagining some distant prospect. They are hard-edged business executives speaking about the here and now. And they speak about a reality that is well understood by the titans of the new tech monopolies and among the scholars who study labor and technology.2 It is a reality that has profound significance for America, although there remains considerable disagreement about the precise nature of that significance. There are still tech utopians who say that the changes that are coming will invariably lead to the best of times—that people will work much less and enjoy greater access to healthcare, education, and economic security due to the vastly increased economic output. They tell us that society will generate the necessary tools to address environmental damage, overcome poverty, and turn the page to a glorious new chapter in history where economic scarcity no longer defines the human condition. But many of these utopians also acknowledge, as Schmidt does, that the transition to this new era will likely be marked by social upheaval the likes of which have only rarely been seen.
If there is consensus developing, it holds that an already troubling situation is about to get considerably worse. Harvard economist Edward L. Glaeser was blunt when he wrote in a 2014 paper that America’s “most worrying social trend” was “the 40-year secular rise in the number and share of jobless adults.”3 And what comes next is an explosion of automation that will eliminate millions of additional jobs. That is an alarming notion that merits attention, debate, and intervention.
The sense of urgency ought to be heightened by the fact that the existing American political and social circumstance is ill prepared to respond to a massive wave of automation and dislocation. By now nearly everyone is familiar with the grotesque and historically unprecedented expansion of economic inequality in the United States over the past three or four decades. Likewise, poverty has increased sharply while upward mobility has almost disappeared.4 Many Americans have experienced an “economic nightmare,” as author and former New York Times columnist Bob Herbert put it, where “millions of hardworking men and women who had believed they were solidly anchored economically found themselves cast into a financial abyss, struggling with joblessness, home foreclosures, and personal bankruptcy.” It wasn’t just the result of the 2008 Great Recession. “From 1990 to 2008 the life-expectancy for the poorest, least well-educated white Americans fell by a stunning four years,” notes Herbert. “For white women without a high school diploma, it fell by five years.”5
Horrifying economic inequality extends from, and also extends, political inequality. The “rule of law,” the foundation of democracy in America, is collapsing. The principle that all are equal before the law—with no one above it or below it—has become a sick joke in a society where unarmed African-American men and women are shot down by police officers while the billionaire bankers who crashed the global economy, and fund both political parties, have gone scot-free despite their legally dubious behavior. In some cases they have even received lucrative taxpayer bailouts.6 Americans, Rolling Stone writer Matt Taibbi tells us, have “become numb to the idea that rights aren’t absolute but are enjoyed on a kind of sliding scale [and] we’ve also learned to accept the implicit idea that some people have simply more rights than others. Some people go to jail, and others just don’t.”7 In a state of extreme economic and social and political inequality, options for humane and workable responses to radical change disappear. This is the circumstance in which the United States finds itself as a digital revolution every bit as sweeping as the industrial revolution takes hold.
In recent years some of America’s finest economists and writers have generated thoughtful and convincing proposals to create full employment at good wages, to rebuild the nation’s infrastructure and urban areas, eliminate poverty, provide universal healthcare, greatly enhance political participation, reduce inequality, and transition to a sustainable green economy in one fell swoop.8 The ideas emanate from other democracies and from America’s own rich political economic traditions.9 Many of these are proposals to maintain a largely capitalistic economy, albeit with a social democratic or Keynesian twist. Although these proposals corral some industries and all of them ask for billionaires and large corporations to pay more in taxes, they mostly allow corporations to continue on their merry way, arguably making even greater profits as a more prosperous middle class creates increased demand for their products.
Evidence suggests many of these proposals would be popular, even wildly popular, with most Americans. Yet none of these proposals has been taken seriously inside the corridors of power by those who run either of the political parties. Political science research by Stanford’s David Broockman and the University of Michigan’s Christopher Skovron concludes that on core policy issues legislators routinely think their own constituents are considerably more conservative than the polling data shows they actually are. This is true across the board but especially pronounced among conservative legislators. “The typical conservative legislator overestimates his or her district’s conservatism by a whopping 20 percentage points. Indeed, he or she believes the district is even more conservative than the most right-leaning district in the entire country.” Why? “Politicians feel much more accountable to the wealthy, party leaders, or interest groups than to rank and file voters’ preferences,” and “politically active citizens tend to be wealthier and more conservative than others.”10 Most reform proposals are dismissed as impractical and relegated to the netherworld of the loony-Left before they can even see the light of day.
The reason for this is clear: the United States is not a democracy, if by democracy we mean a government of the people, by the people, and for the people. That is the Big Lie of the official discourse. If anything, it is a “citizenless” democracy, an oxymoron if there ever was one. The only voice that matters in American politics, the voice that shouts down every other, is that of the wealthy few for whom creative destruction is a business practice rather than a threat.11 Princeton’s Martin Gilens and Northwestern’s Benjamin I. Page have conducted exhaustive research on American politics. Their conclusion: “The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.” If that is not clear enough, they add: “When a majority of citizens disagrees with economic elites or business interests, they generally lose. Moreover, because of the strong status quo bias built into the U.S. political system, even when fairly large majorities of Americans favor policy change, they generally do not get it.”12
“Indeed, under most circumstance,” Gilens writes in another recent study he conducted, “the preferences of the vast majority of Americans appear to have essentially no impact on which policies the government does or doesn’t adopt.”13
The problem here is not just that government policies are indifferent or hostile to those without great wealth. The two great and immediate existential threats to human existence—militarism and environmental catastrophe—proceed largely unchecked by public policy, regardless of popular concerns, and despite the fact that they affect rich and poor alike because they each have the capacity to radically degrade or terminate life as humans have experienced it for the past hundred thousand years on the planet. This is because very powerful interests see demilitarization and shifting away from fossil fuels as existential threats to their present lucrative positions, and no powerful interests have a direct stake in seeing the problems forcefully addressed. In the calculus of citizenless democracies, the rulers fiddle away and the “status quo” is not static but gets worse.
When understood as a “citizenless” democracy, the often lamented and lampooned ignorance of the American people takes on a different light. True, two-thirds of Americans cannot name a single member of the US Supreme Court, and a similar fraction cannot name the three branches of the federal government; only 15 percent can name the chief justice; and in 2010 over two in five Americans did not know who the sitting vice president was.14 But this is not the cause of citizenless democracy; it is the effect. This is what one would rationally expect in what political scientist Sheldon Wolin characterized as a “politically demobilized society, that is, a society in which the citizens, far from being whipped into a continuous frenzy by the regime’s operatives, are encouraged at virtually every turn to be politically lethargic.” It is a society in which people get precious little from the government, where austerity and rollbacks are the order of the day. Citizens are constantly reminded of the “political futility” of popular involvement in politics.15 “There is a widespread sense,” the scholar Tony Judt wrote in 2010, “that since ‘they’ will do what they want in any case—while feathering their own nests—why should ‘we’ waste time trying to influence the outcome of their actions?”16 As the journalist Bob Herbert observed in his 2014 chronicle of contemporary America, “Something fundamental in the very character of the United States had shifted. There was a sense of powerlessness and resignation among ordinary people that I hadn’t been used to seeing. The country seemed demoralized.”17
In this context, it is rational that one abandon an interest in politics, or social life broadly construed, and concentrate on looking out for number one. And in a context in which governments are increasingly felt to be divorced from responding to the expressed social and economic needs of its common citizens, that makes the focus on one’s own bank account all the more important. But that is no way to live, for a person or a society. To paraphrase a point once made by the philosopher John Dewey: once an organism loses the sense that it can affect its environment, it starts to weaken and die.18
This is the context in which the next wave of automation is arriving, and it could not be worse for the prospect of having the potential bounty shared with everyone and used for the benefit of building a healthy sustainable society. Unemployment, inequality, and poverty are best understood not, in the end, as economic problems, but instead as political problems. They require political solutions. And it would seem then that the United States, lacking those solutions, is poised for disaster.
But a country that is “poised for disaster” need not accept its fate. It can change. And there is reason to believe that it will, as Americans change.
Let’s begin by looking at the bright side. It would be far worse if all the economic, environmental, and political problems of this nation were the triumphant result of an informed and enthusiastic citizenry, with voter turnouts the highest in the world, rather than the lowest. But such is not the case. The silver lining is that the demoralization and disconnect most Americans are experiencing within their citizenless democracy is, in fact, the crack in the façade of an elitist political economy that activists can exploit to create a humane, sustainable, and citizen-run democracy. A credible roadmap to a much better future is being developed as extraordinary ideas, extraordinary movements, and extraordinary prospects are being developed by citizens who are almost never covered in what little remains of the news media. The common theme is that while challenges posed by an unprecedented wave of automation can be met, the solutions will not be cosmetic. They will require structural change in our political economy, and policies that are far outside the range countenanced by the nation’s rulers. And there’s the rub. If that is going to happen, it is going to take an army of aroused and informed citizens, rather than the marginal, though growing, coterie that presently exists.
One need not be a wild-eyed optimist or a naïve romantic to be certain that Americans can get this right. There is no need to deny that the coming years will be unusually turbulent, or that we will see a wrenching reconstruction of many institutions. The status quo is going to be turned upside down. Whether it is going to land in a good place will be determined by what the citizens of this nation do. If they fail to act, if all or most hands are not summoned to the deck, what awaits us may make the present day look like good times.
The state of present-day capitalism and what appears to be its likely future is one of stagnation—meaning ever-increasing inequality, poverty, austerity, and social insecurity. There is a crisis of unemployment and underemployment. Full employment, meaning, as economist Robert Pollin puts it, “an abundance of decent jobs,” is “fundamental to building a decent society.”19 A healthy economy that generates benefits for the bulk of the population, and not just society’s owning class, depends upon it.20 And this is more than an economic issue. As technology writer Nicholas Carr puts it, people are “happiest when we’re absorbed in a difficult task, a task that has clear goals and that challenges us not only to exercise our talents, but stretch them.” And that is something most often found in work.21 “When joblessness is high in America,” Herbert writes, “the nation’s spirits inevitably are low.”22 Full employment for more than a brief period has never been enthusiastically received by Wall Street, as it raises wages and shifts economic and political power to employees. To some extent the decrepit state of the contemporary labor market reflects the total control over government economic policymaking by the wealthy.
The emerging automation wave that Eric Schmidt called attention to at Davos is going to replace millions of jobs and alter the nature of many of those jobs that remain. Some technology experts like Ben Way expect a loss of 70 percent of existing jobs in the next three decades, with little hope that very many new jobs will emerge to replace what is lost.23 University of Pennsylvania sociologist Randall Collins expects an unemployment rate in the neighborhood of 50 percent.24 One need not accept these predictions—they strike us as speculative if not extreme—to see that at the very least what is about to transpire is going to put severe downward pressure on wages and working conditions, which already are deplorable. “What does the ‘end of work’ mean, exactly?” journalist Derek Thompson asked in a penetrating examination of automation in a 2015 issue of the Atlantic. “It does not mean the imminence of total unemployment, nor is the United States remotely likely to face, say, 30 or 50 percent unemployment within the next decade. Rather, technology could exert a slow but continual downward pressure on the value and availability of work—that is, on wages and on the share of prime-age workers with full-time jobs.”25
Judt saw this coming in 2010: “Mass unemployment—once regarded as a pathology of badly managed economies—is beginning to look like an endemic characteristic of advanced societies. At best, we can hope for ‘under-employment’—where men and women work part-time; accept jobs far below their skill level; or else undertake skilled work of the sort traditionally assigned to immigrants and the young.”26
Unemployment and underemployment of this magnitude have a way of capturing a person’s attention like almost nothing else. With apologies to our friend Naomi Klein, this changes everything.
CAPITALISM ON STEROIDS
It is ironic that the digital revolution is central to the jobs crisis, because these same technologies have been roundly heralded heretofore as democratizing agents that shift power from the few to the many. Although we believe it is difficult to exaggerate the value that digital communication has brought to society as a whole, we also believe the evidence is clear that these technologies are not magical; how they are developed owes largely to the political economic context.27 They can be forces for surveillance, propaganda, and immiseration as much as tools of liberation.28
What is striking is that the digital revolution exponentially increases one of the longstanding problems of capitalism—what the Irish engineer Mike Cooley terms “the gap between that which technology could provide society (its potential) and that which it actually does provide for society (its reality).”29 The potential is wondrous. Artificial intelligence expert Neil Jacobstein notes that “exponential technologies may eventually permit people to not need jobs to have a high standard of living.” He enthuses that “the emphasis will be less on making money and more on making contributions, or at least creating an interesting life.”30 Nor is this very far off in the future. One 2011 CNN report observed that “America is productive enough that it could probably shelter, feed, educate, and even provide health care for its entire population with just a fraction of us actually working.”31 The barrier to this brighter future, of course, is capitalism itself.
This gap between potential and reality is a long-term tension in capitalism that a number of our greatest economists—including some who in their times were among capitalism’s mightiest champions—have understood for the past 150 years. Today, the former chief economist of the International Monetary Fund, Harvard’s Kenneth Rogoff, bluntly states that with the technological revolution the “struggle for subsistence will no longer be a primary imperative and capitalism’s numerous flaws may loom larger,” leading to its possible demise.32 Capitalism’s “structural crisis,” as economist David M. Kotz puts it, “has no easy path to a desirable solution. This historical moment may be a turning point for humanity.”33 Economist and technology scholar Jeremy Rifkin puts it baldly: “At the heart of capitalism there lies a contradiction in the driving mechanism that has propelled it ever upward to commanding heights, but now is speeding it to its death.”34
In a nation with a democratic governing system, one would reasonably expect that debates and study concerning the best uses of these radical technologies to benefit all of society would dominate political life. It certainly dramatically shifts the nature of progressive and socialist analysis and strategic thinking. As prominent leftist theorist David Harvey notes: “An anti-capitalist movement has in the current conjuncture to reorganize its thinking around the idea that social labour is becoming less and less significant to how the economic engine of capitalism functions. Many of the service, administrative and professional jobs the left currently seeks to defend are on the way out. Most of the world’s population is becoming disposable and irrelevant from the standpoint of capital.”35
The role of markets and corporations and employment—indeed, everything—would need to be reconsidered. Discussions would have to occur concerning what the good life would be in a world where work is largely unnecessary. Experiments would need to be conducted on alternative types of enterprises and economic models. It would be, in effect, the mother of all constitutional conventions. Where society ended up would be impossible to predict, but wherever it did would likely be the best possible place, because it would the product of democratic deliberation. And it is safe to say it would be a very different place than where the current US political system is taking us.
Such an economic debate is unthinkable in the citizenless democracy of the United States, where the range of legitimate deliberation, to quote media critic Jeff Cohen, extends all the way from GE to GM. There will be an “elite” debate on these issues—a debate premised on protecting elite interests—because the very system of capitalism is going to be in the crosshairs of history. “Today, the ability of freemarket democracies to deliver widely shared increases in prosperity is in question as never before,” a 2015 report by a commission co-chaired by former Treasury Secretary Lawrence H. Summers announced. “This is an economic problem that threatens to become a problem for the political systems of these nations.”36 The natives are going to get restless. As the Economist notes, “squeezing out” the middle class “could generate a more antagonistic, unstable and potentially dangerous politics.”37 Cato Institute researcher Brink Lindsey writes that “there is the threat that widening disparities between the elite and everybody else will prompt a political backlash against the whole system.”38
The problem of a political system that is defined as a market, where issues can be made “important” or “unimportant” via the influence of campaign donations, lobbying, spin, and media manipulation, is that discussions of those disparities—and of their causes—are taken off the table. The level of corruption in contemporary politics would make Gilded Age icons like Jay Gould and Mark Hanna blush. American elections have become a disgrace, where a handful of unaccountable and often unknown billionaires finance the candidates, and the coin of the realm has become the entirely asinine negative political advertisement. America spends vastly more on its elections per capita than any other nation—and has made the ability to raise enormous amounts of money the sine qua non of political success for politicians of both major parties—yet it has extraordinarily low levels of voter turnout.39 The American news media—including digital journalism—is in freefall collapse, as the number of paid reporters per capita has plummeted over the past twenty-five years.40 What coverage remains of politics and elections tends to be superficial, and spoon-feeds the public what elites are saying. Most legitimate debates occur when elites disagree with each other. If elites are in agreement on an issue, or do not wish to talk about it, it almost never appears as a significant story in the news media. Nowhere is this more true than with economic issues, where corporate power and capitalism are off-limits to critical assessments.
Popular mythology—urged on by corporate public relations—has it that what is good about the economy is the result of entrepreneurs operating in free markets, and that the government’s function is simply to screw things up with its endless barrage of counterproductive regulations. In fact, contemporary capitalism is very much a product of government policies and subsidies and the federal government is as necessary to the system as corporations and Wall Street. The US government, for example, every day works assiduously to advance the interests of the nation’s largest corporations and wealthiest investors. Most of this work takes place within an elite consensus on goals and with the explicit desire that the public not interfere in the government’s work. Nowhere is this more transparent than in the numerous major trade treaties that have been negotiated in the past three decades.
What is clear from our analysis is that there needs to be a rethinking of the relationship of capitalism to democracy, and a rethinking of what exactly is necessary for democracy to effectively exist, if people are going to make any progress in strengthening democracy. How can we turn citizenless democracies into bona fide democracies?
Prior to the emergence of modern capitalism, politics and economics were interchangeable; whoever controlled the government controlled the economy, and vice versa. The most politically powerful nobles were the wealthiest people. The idea of democracy prior to capitalism was the radical notion of politics controlled by propertyless citizens, which would give them command over property. “Democracy is when the indigent, and not the men of property, are the rulers,” Aristotle noted at its birth.41 It is why democracy was regarded as being synonymous with “communism” or some sort of one-class society; when poor people gained political power they would understandably reshuffle the property distribution and rules to eliminate wide disparities in property ownership and class privilege. It is why the very notion of democracy was widely, even universally, detested by the wealthy and the privileged throughout history. As recently as the founding of the United States, for example, nearly all of those who wrote the Constitution or are considered founders, including Thomas Jefferson and James Madison, thought voting should be limited to property-holding white males. It wasn’t even an issue for debate.42
One revolutionary change capitalism has brought to modern democratic governance was to split the elected control over the government from direct control over the economy, which is now in the hands of those with capital. The people who are elected to run the government generally are only coincidentally the same people who dominate in the marketplace and have the greatest fortunes. The power of government to curtail private property rights is strictly limited, compared to preindustrial societies. To capitalism’s strongest advocates, like economist Milton Friedman, it was this core split in the disposition of power that created the space for “freedom” to flourish. It was one of the main reasons why markets and the sort of limited democracy found in places like the United States were made for each other.
But if capitalism changed the nature of the relationship of the economy to governance, it opened up a new defining debate concerning the relationship of democracy to the economy, one that has persisted since the dawn of the Republic. On one side is the classical position, one championed in much of liberal democratic theory, and embraced by much of the political left. This position holds that democracy is superior to capitalism and that the sovereign people of a nation have the fundamental right to determine through deliberation and debate what type of economy would best serve the nation, and with that, what sort of property ownership would be permitted. Many who advance this position view capitalism favorably, but they nonetheless understand that it must be the result of popular approval to be legitimate. And they are often open to the idea that the capitalist economy could be reformed and improved by political measures if that is the determination of the citizenry.
On the other side is the notion that property ownership, specifically the existing capitalist property ownership system, is the precondition for a free and decent society and that democracy is subservient to it. Elected governments overstep their bounds to mess with the capitalist system in anything more than a mundane manner, and when they do so they invariably invite tyranny, no matter how well intended the policies may be. This is the conservative position in modern politics. As Friedman put it in his classic 1962 work, Capitalism and Freedom, the legitimate role of government is largely “to protect our freedom both from enemies outside our gates and from our fellow citizens: to preserve law and order, to enforce private contracts, to foster competitive markets.” Any other function for government “is fraught with danger.”43 “The only alternatives to free enterprise,” eventual Supreme Court Justice Lewis Powell wrote in his 1971 memo for the Chamber of Commerce, “are varying degrees of bureaucratic regulation of individual freedom—ranging from that under moderate socialism to the iron heel of the leftist or rightist dictatorship.”44 And the first freedom, the single inviolable human right that no government no matter how democratic has the right to interfere with, is the right for individuals or private businesses to maximize profits from their investments.
If the former position envisions a strong democracy, where all power resides with the citizenry, the latter position envisions a caged democracy with a limited mandate; the real action in the laissez faire world is in the private sector, and that is where the best and most talented people logically and invariably gravitate. “The best minds are not in government,” Ronald Reagan is reputed to have said. “If any were, business would steal them away.”45 The main job of governance is to make sure the profit system works smoothly, contracts and private property are respected and enforced, the dispossessed are kept in line, and, if there is an economic crisis, the government intervenes as necessary to make it lucrative for businesses and wealthy individuals to invest again. Big government is A-OK when it advances the interests of capital—though this point best not be emphasized to a general audience; for everyone else, “small” government is the order of the day. Governance is best when it is left to those who fully appreciate that the needs of investors come first and foremost. And that is most likely to happen if most everyone else tunes out politics and focuses on other matters. The problem, of course, is that we are entering into a period where change will come so rapidly that, when citizens tune back in, tens of millions of them could be left with nothing.
When a capitalist economy is literally shaking apart, when it is in severe crisis, the demand that the political system address enormous social and economic problems rises. This is where we see political results that involve potentially fundamental realignment and restructuring, as when a democratic nation elects a government that is explicitly committed to shifting the economy away from capitalism, to something generally called socialism.46 But the tension between these approaches plays out in all capitalist democracies in the form of ongoing debates about the proper role of the government in directing and participating in the economy: what should it be permitted to do and whose interests should it represent. In the strong democracy view, for example, economic planning by the state is imperative to determine how best to approach a number of fundamental issues, including environmental policy, urban development, economic infrastructure, and many forms of social security and well-being. In the limited democracy view, outside of the military or police functions, these are decisions best determined by the profit calculations of business and investors. The market is infallible, and it is imperative that flawed humans not interfere with its genius. The role of government is to facilitate and protect the profit system.
This split corresponds to a series of crucial battles that determines just how effective and sweeping popular governance can be. To advocates of a strong democracy, institutions, rules, and policies should be put into place to encourage active and informed participation by as much of the population as possible. As political scientist Robert A. Dahl puts it, citizens in a democracy must “possess the political resources they would require in order to participate in political life pretty much as equals.”47 The playing field should be leveled so those without means can effectively govern as equals of those with substantial means. To conservatives, such an approach is foolhardy if not downright corrosive of freedom, for effective popular participation in politics, just as much as an “activist” government, is to be discouraged.
DEMOCRATIC INFRASTRUCTURE
A debate persists over what we term democratic infrastructure. As Dahl writes, “Political equality requires democratic political institutions.”48 The term infrastructure comes from economics. An advanced economy does not exist because entrepreneurs or businesses have the right to invest and can do whatever they please. It exists because elaborate communication, transportation, sanitation, energy, and legal infrastructures provide a foundation that makes commerce possible. Establishing this infrastructure is largely the province of the government, even if the state’s job is to coordinate private interests to get it done effectively. The beauty of infrastructure projects is that they are accessible to everyone and have tremendous “spillovers,” or “positive externalities,” meaning they generate considerable value for others and for society as a whole.49 Without such an infrastructure, an advanced economy cannot exist.
So it is with democracy. The right to vote means little without
• the infrastructure of effective elections, such that one-person, one-vote is the order of the day, and races allow genuine competition
• the rule of law
• stringent limits on money in politics
• limits on the power of the judiciary to act in an arbitrary and unaccountable manner
• the effective ability to launch effective new parties or associations
• free trade unions with effective collective bargaining
• open, transparent governance
• a credible, independent, and uncensored free press/news media
• universal free schools with civic education
• a basic level of economic and social security, which is only limited by the overall productive capacity of the society
• an environment that can sustain and nurture life.
In short, a credible democratic infrastructure requires ground rules and institutions that empower the weakest in society so they can effectively be the political equals of the wealthiest members of society, and that prevent the wealthy few from having excessive influence. It also includes “breakers” to prevent the establishment of such proven enemies of democracy as
• corruption
• private monopolistic control over the economy
• significant economic inequality
• government secrecy and surveillance
• government propaganda
• militarism
These six tend to go hand-in-hand.50 The civil liberties that most Americans cherish—the freedoms of speech, press, and religion; the right to assemble; the right to privacy—thrive when there is a strong democratic infrastructure. Without one, these freedoms tend to be on insecure ground, at least to the extent their exercise threatens those in power. We agree with the writer and lawyer Elliot Sperber, who argues that “this infrastructure of democracy” must be as “inalienable” as the political rights we cherish.51 Hungarian scholar Zoltan Tibor Pallinger, who has direct experience in building democracies in formerly communist nations, defines “democratic infrastructure” as the “institutions, instruments and procedures provided by the state that render the use of democratic rights possible.”52
A vibrant democratic infrastructure does not necessarily presuppose a particular economic structure; it could be accompanied by an economy where private property, markets, and profit-making proliferate. Theoretically, a strong democratic infrastructure could be accompanied by a class-based economy in which wealth and economic power belong disproportionately to those at the very top, but for such an economy to exist would require that its proponents convince the preponderance of the population of its merits in a fair fight. Such a democratic infrastructure is simultaneously nonpartisan and also at the heart of contentious politics. This would be a paradox, except it simply confirms the truth that democracy is not a neutral or value-free undertaking. Democracy has many winners, but it also has losers: those who benefit by its absence or at least its diminution.
A commitment to strong democracy demands an array of infrastructural policies that can be, at times, highly controversial. Along these lines, consider the right to free labor unions and effective collective bargaining. Wendell Willkie, corporate president and free enterprise champion turned 1940 Republican presidential candidate, explained the need for unions and collective bargaining by noting that “for labor the essential content of freedom is different in today’s society from what it was in the agricultural society of an earlier age. Men no longer able to own, or aspire to own, small businesses and farms have sought new solutions for a need which all Americans must respect—the need to control for themselves the circumstances which dictate their working lives.”53
According to Willkie, labor unions deserved to be accorded permanence because they were a necessary foundation of modern democracy. He was right: the evidence is clear that unions, in addition to the value they generate for their own members, reduce overall economic inequality and also provide people without property a means for more effectively participating in the political process.54 So strong unions produce a double win in terms of democratic infrastructure. This is well understood and accepted in most advanced democracies, including the United States from the 1930s until recently, but it is obviously a controversial proposition today, as unions raise labor costs and generate understandable enmity from employers, who have considerable self-interest in seeing unions weakened or eliminated.
The state of this democratic infrastructure at any time generally corresponds to a broader political culture, which informally send cues to the citizenry about what their role is and who is legitimately entitled to make political decisions. It promotes what can be a dominant weltanschauung, or general broad-based political culture. When a democratic infrastructure is dynamic and growing, notions of fairness, justice, egalitarianism, and public service are respected and widespread. Trust between people increases. Provocative new ideas are put in play and subject to debate. When the democratic infrastructure is weak or in decline, the political culture shrivels, self-interest reigns, and demoralization and pessimism ascend. Then the only rational reason to enter public life is to use it as a way station to an eventual job in the private sector where you can cash in your public-sector chips, or just for purposes of flat-out corruption.
The battle over a democratic infrastructure has ebbed and flowed over the course of American history, as it has in other democratic nations. After four decades of relentless attack on the democratic infrastructure, it has severely shrunk in the United States today, and much of what remains is in jeopardy. This is the main reason why the great existential economic crisis we are experiencing has been aggravated by a pathetic and corrupt political response. For many Americans its constituent parts now seem foreign or radical—or are even entirely unknown—when they are in fact at the heart of the American struggle for democracy.
The advocates of unrestrained capitalism and limited government can and often do trump democracy. But the United States has seen many circumstances in which democracy has won out and the democratic infrastructure has been built out. We are in another moment when this is going to happen. But to understand the task at hand, we must begin by understanding the possibility itself. In our view, the moral of the story is clear: if you win the battle for democratic infrastructure, you almost certainly will win the war for controlling the nation, and the economy. It is here, on this battlefield, more than anywhere else, that the outcome will determine whose future it will be, or if there will be much of a future at all. It is where those concerned about how America responds to the jobs crisis we are facing must turn their attention. In a time of crisis, it means everything.
The historical review of democratic infrastructure and weltanschauung also contributes to a more productive understanding of how social change is actually made. It reveals how each of the disparate interests that work on one part of building a democratic infrastructure have a decided interest in seeing the other parts succeed as well. Competition between them is best regarded as the proverbial “circular firing squad,” and unless there is overall success, and a changed weltanschauung, no single campaign can earn more than marginal victories, and those victories will prove difficult, if not impossible, to maintain. That may seem too abstract for a rallying cry, but the underlying principle needs to guide the work.
With regard to unifying rallying cries, it is hard to take issue with Klein when she argues that “the overriding principle must be to address the twin crises of climate change and inequality at the same time.”55 Herbert offers up another, related, candidate, for “overriding” status: “The crucial impact of employment on virtually every facet of American society is the reason activists with widely different agendas might be induced to rally around a sustained campaign to wipe out joblessness and unemployment. If America cannot get its act together on the jobs front, its many other serious wounds will not heal.”56
We believe Herbert is right, too, and in the context of automation, it leads almost certainly to a broader discussion of how economic and political power is exercised in the United States.
The United States has been here before. During the Progressive Era of a century ago, a tremendous popular surge launched seven decades of democratic advancement. In many respects, the core problems we face today were anticipated then. What is clear from what happened a century ago is how central social movements were to the process of building out a democratic infrastructure and changing the weltanschauung. This provides a context for reviewing and assessing the unusually rapid growth of grassroots activism in recent years on an array of issues mostly related to elements of the democratic infrastructure. It grows on fertile ground: polling shows that the vast majority of Americans believe big business has too much control over their lives and way too much influence over government.57 “The inability of traditional politics and policies to address fundamental challenges has fueled an extraordinary amount of experimentation in communities across the United States,” a 2015 report by the Next System Project noted. “Unbeknownst to many, literally thousands of on-the-ground efforts have been developing.”58 Because media coverage has been virtually nonexistent, many Americans who might be sympathetic or curious are left entirely in the dark.
An understanding of democratic infrastructure and weltanschauung can also help us pierce through the pessimism that overpowers countless Americans and renders them inactive because they believe social change for the better is impossible. It is perhaps human nature to see change as very slow and incremental. The belief that tomorrow will look pretty much like today is awfully difficult to argue with most days of most lives. So what we see around us today is what we will very likely see when we wake up tomorrow. The problem with this approach is that it cannot account for social change except in retrospect. No one saw the civil rights movement or the feminist movement or the gay rights movement or the environmental movement erupting in the years before they happened. If people did, the movements would have happened earlier. The Knights of Labor and the Congress of Industrial Organizations seemingly came out of nowhere when they burst on the scene. No one anticipated the Occupy explosion of 2011. After movements emerge, many people act like they saw them coming all along and they were fully anticipated; the sense of surprise is quickly forgotten.
There is something even more important about this. When fundamental social change comes, as Klein writes, “it’s generally not in legislative dribs and drabs spread out evenly over decades. Rather it comes in spasms of rapid-fire lawmaking, with one breakthrough after another.” These are periods in which the democratic infrastructure is built up and the weltanschauung has shifted dramatically. Klein captures this well:
When major shifts in the economic balance of power take place, they are invariably the result of extraordinary levels of social mobilization. . . . During extraordinary historical moments—both world wars, the aftermath of the Great Depression, or the peak of the civil rights era—the usual categories dividing “activists” and “regular people” became meaningless because the project of changing society was so deeply woven into the project of life. Activists were, quite simply, everyone.59
This is the sort of moment we are entering. We have no idea when exactly or under what terms. But what we can do is prepare and get ready. In short, we agree with Chris Hedges that in historical terms, the United States is entering a period where the status quo cannot remain as it is, and radical, even revolutionary, change is almost certain to come.60 What we do know, and what will be the best indicator of a new moment, is the weltanschauung will shift. Crises that had appeared insurmountable will now appear like opportunities to make a much better world than had ever existed before. There will doubtlessly be many important differences between the coming period of activism and those of the past century; the singular importance of the environment comes to mind. There is one other crucial difference that emerges from our research: the very nature of the economy will be a front-burner issue as never before. The great issue of the coming generation will be expanding democratic values and principles—building out the democratic infrastructure if you will—into economic institutions and practices.61
THE REAL F-BOMB
But movements to expand the democratic infrastructure, and create a just and sustainable society, will not be the only response to stagnation, inequality, economic crisis, and, most important of all, mass unemployment. It is not all roses and lilies. In times of crisis, as mainstream political parties, institutions, and thinkers increasingly are mired in varying degrees of corruption, failure, incompetence, and stupefaction, there will be movements born of immense anger and frustration on the political right. We know from looking at other nations in our times that face these economic crises—like Greece today—and from the decade of the 1930s, when most of the world met these standards—that a particular deadly scourge is likely to appear: fascism.62 The term fascism carries more baggage than a fleet of luxury ocean liners, and it is absurd and counterproductive to think of it as being embodied in toto by the Nazi or Italian experience in the 1930s.** Nevertheless, allowing for that proviso, there is much to learn from its history.
The connection between mass unemployment and fascism is almost universally accepted by scholars of the subject. “Because capitalism goes into crisis,” historian Dave Renton writes, “because it forces millions into unemployment, so there are conditions in which bitterness grows.” Indeed, it was only with the skyrocketing unemployment of the early 1930s that the Nazi Party in Germany moved from the margins to power.63 President Franklin D. Roosevelt emphasized this point at every turn. “Democracy is not safe if its business system does not provide employment and produce and distribute goods in such a way as to sustain an acceptable standard of living.”64 “Democracy has disappeared in several great nations,” FDR said on another occasion, “not because the people of those nations disliked democracy, but because they had grown tired of unemployment and insecurity, of seeing their children hungry while they sat helpless in the face of government confusion and government weakness.”65
What mass unemployment means in the coming years, Judt writes, is a “return to dependency upon the state.”66 This is not only because millions are out of work, but because in such a depressed environment capitalism does not generate profits anywhere near satisfactory for investors and businesses. The state needs to intervene much more aggressively not only to create jobs but also to create the conditions, including the markets, for profitable investment. The government needs to make the system work with bold action because obviously the traditional mechanisms to stimulate the economy have failed, or else the economy would not be in a depression. The private economy is dead in the water. As Thompson put it in his sober assessment of automation, for Americans to effectively address the coming waves of unemployment and underemployment, “it is almost certain that the country would have to embrace a radical new role for government.”67 The only issue is what the nature of the radical new role will be.
In the 1930s and 1940s the solution of the worldwide democratic Left to the problem of mass unemployment was the New Deal, or Keynesianism, or what was termed social democracy. The government would tax the rich or borrow their idle capital at very low interest rates and then put that money to work on public-works programs, and to fund numerous social programs that would benefit the poor and working class. The government would support free trade unions and progressive taxation and other measures to reduce inequality. Then workers would use their incomes to purchase goods and services and capitalists would make profits and have incentive to make additional private investments. And, because many of these measures built out the democratic infrastructure, the process of rejuvenating the economy also greatly strengthened effective popular participation in governance. “We have begun to bring private autocratic powers into their proper subordination to the public’s government. The legend that they were invincible—above and beyond the processes of a democracy—has been shattered,” FDR said in his second inaugural address in 1937. “We have always known that heedless self-interest was bad morals; we know now that it is bad economics.”68
No one studied these policies at the time more perceptively than Michal Kalecki, the brilliant Polish economist who synthesized the work of Karl Marx and John Maynard Keynes.69 In a 1943 essay, Kalecki noted that Keynesian policies worked: “Clearly higher output and employment benefits not only workers, but businessmen as well, because their profits rise.” Yet, there was a paradox: in all democratic nations, “big business opposed consistently experiments for increasing employment by Government spending.” Kalecki noted that “the businessmen in the slump are longing for a boom,” so, he wondered, “why do they not accept gladly the ‘synthetic’ boom which the Government is able to offer them?”70 Kalecki then provided the answer: if people in a nation realize that their elected governments can use public spending to create full employment, and maintain it permanently, it would undermine the fundamental idea of capitalism that business and private investment are the natural and best and only possible director for the economy, and make labor far more powerful. This would be disastrous. “It is true,” Kalecki wrote,
that profits would be higher under a regime of full employment than they are on average under laissez-faire; and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices. . . . But “discipline in the factories” and “political stability” are more appreciated by the business leaders than profits. Their class instinct tells them that lasting full employment is unsound from their point of view and that unemployment is an integral part of the normal capitalist system.71
Seven decades later, as the US government failed to take aggressive steps to end the recession and create full employment, economist Paul Krugman conceded that Kalecki’s analysis—which he had once dismissed as extreme—was the best explanation for the pathetic state of affairs.72
But in the 1930s, unlike the first half of the 2010s, governments had no choice but to aggressively address economic depression and mass unemployment. Kalecki writes that “one of the important functions of fascism, as typified by the Nazi system, was to remove capitalist objections to full employment.” Nazi Germany was the one country where big business did not oppose government spending to generate full employment. The appeal of the Nazi system was that “the State machinery is under the direct control of a partnership of big business with fascist upstarts.” The dislike of government spending on social programs to create full employment is overcome by “concentrating Government expenditure on armaments.” Finally, Kalecki writes, “‘discipline in the factories’ and ‘political stability’ under full employment are maintained by the ‘new order’, which ranges from the suppression of trade unions to the concentration camp.” In times of severe crisis, fascism was the preferred option for big business over democracy.73
In the interwar years, fascism had widespread, though by no means universal, support from the wealthy and powerful, particularly if it was seen as the best bet, so to speak, in the battle against socialism. Winston Churchill was far from an outlier in the 1920s when he voiced loud approval of Italian fascism, viewing it the proven way to “rally the masses of the people” and provide “the necessary antidote to the Russian poison.”74
This is obviously a sensitive point, as it calls into question how deep the capitalist commitment to civil liberties and democracy is, and some right-wingers have twisted themselves into intellectual pretzels in their efforts to portray fascism as a left-wing movement that is hostile to capitalism, markets, and profits.75 This is entirely unconvincing. What is true is that historical research reveals that “real capitalists, even when they rejected democracy, mostly preferred authoritarians to fascists,” as the renowned historian of fascism Robert O. Paxton notes. But, he adds, “whenever fascists reached power, to be sure, capitalists mostly accommodated with them as the best available nonsocialist solution.” Paxton also acknowledges that fascist parties sometimes used stridently anti-capitalist rhetoric to gin up support when out of power: “Whenever fascist parties acquired power, however, they did nothing to carry out these anticapitalist threats. By contrast, they enforced with the utmost violence and thoroughness their threats against socialism. . . . Once in power, fascist regimes banned strikes, dissolved independent trade unions, lowered wage earners’ purchasing power, and showered money on armaments industries, to the immense satisfaction of employers.”76
“We stand for the maintenance of private property,” Adolf Hitler proclaimed on more than one occasion. “We shall protect free enterprise as the most expedient, or rather the sole possible economic order.”77 Analysis of economic data from the 1930s reveals that in Nazi Germany “the class which benefited most from fascist rule was the layer of big industrialists and landowners.”78 The same was true in fascist Italy, which has been described as a “crony capitalist, oligarchical system.”79 For this reason the economist Harold J. Laski wrote in 1937 that “fascism is nothing but monopoly capitalism imposing its will on those masses whom it has deliberately transformed into its slaves.”80
This was certainly how it was understood by anti-fascists in the United States from the late 1930s until 1945, when the worldwide struggle between fascism and democracy dominated everything. Fascism was a global menace that threatened all capitalist democracies, and not a foreign phenomenon explained by some opaque and macabre national characteristics of Germans or Italians. Germany was not some backwater land filled with superstition and zealotry before 1933; it had Europe’s wealthiest and most advanced economy, and it was roundly considered the beacon of European culture in the early twentieth century. The idea that the Nazis could assume power was considered utterly preposterous almost until the moment they did. Many Americans, including President Franklin Roosevelt and Vice President Henry A. Wallace, understood that in times of severe economic crisis, all bets are off. Then a nation’s demons can be exploited, and America had its share, starting with extreme white racism. “The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than the democratic state itself,” Roosevelt said in 1938. “That, in its essence, is Fascism—ownership of Government by an individual, by a group, or by any other controlling private power.”81
To FDR and Wallace, the domestic fascist threat in the United States was a grave concern and it came primarily from “monopolists” and “cartelists,” who to protect their privileges “would sacrifice democracy itself.” “If we define an American fascist as one who in case of conflict puts money and power ahead of human beings, then there are undoubtedly several million fascists in the United States,” Wallace wrote. He explained that “the American fascist would prefer not to use violence. His method is to poison the channels of public information.”82 In the view of FDR and Wallace, a fascist power grab would not require a violent rupture so much as a quiet takeover orchestrated by elements of the capitalist class. The United States would experience its own home-grown All-American fascism. “They claim to be super-patriots, but they would destroy every liberty guaranteed by the constitution,” Wallace wrote. “Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection.”83
The journalist George Seldes wrote widely during these years on the domestic fascist threat, especially the significant support major American industrialists showed for fascism, even during World War II, and what a weak job the US news media did of exposing it.84 “American fascism will not be really dangerous,” Wallace wrote in 1944, “until there is a purposeful coalition among the cartelists, the deliberate poisoners of public information, and those who stand for the K.K.K. type of demagoguery.”85
Fortunately, fascism was defeated, both externally and internally, but there are important lessons to be drawn from this period. First, although fascism is officially detested by nearly every American since World War II, it is striking that so many of the developments associated with fascism have become commonplace in the United States since 1945: massive government spending on armaments and militarism; seemingly endless wars barely understood by most Americans; growing inequality; massive monopolistic firms that dominate the economy far more than in FDR’s era; weak and feeble news media that largely propagate elite opinion; a governing system that is mostly if not entirely in the pocket of the wealthy; the disappearing rule of law; and what seems like near ubiquitous and unaccountable surveillance of private citizens.86 That’s a sobering list.87
Second, and more daunting, one of the core aspects of fascism everywhere was to destroy democratic infrastructure. Contemporary Republicans should pause and consider the agenda they have embraced in their fight to eliminate labor unions and collective bargaining; undermine public education; scrap progressive taxation; mangle Social Security and Medicare; make voting more difficult for poor people; increase government secrecy; allow unlimited corporate and billionaire spending on politics; privatize government activities so that public monies flow increasingly to private business; disregard all concerns for the environment; and reject Dwight Eisenhower’s wise counsel about the threat posed by a military-industrial complex. Perhaps as daunting is the ineffectual resistance and periodic support shown by the Democratic Party on many of these issues. We are not suggesting that the people pushing these policies are fascists; we are simply noting that these policies are body blows to what remains democratic in American politics, and their removal could have a disastrous effect on the ability to have a peaceful, humane, and democratic resolution of the crises before us. And we can only wonder what Franklin Roosevelt or Henry Wallace would have made of this situation.
In 1942 the sociologist Robert S. Lynd wrote an introduction to Robert A. Brady’s book on the power of big business, and its relationship with the government in Europe and the United States. Brady presented a dark picture of corporate-government collusion to the detriment of the rest of society. “One stout weapon remains in the hands of the little people at the grass roots of democracy,” Lynd noted: “no one dares to challenge in frontal attack the basic democratic thesis.”88 With the shrinking of the democratic infrastructure, we are uncertain if Lynd’s observation will remain true, especially in a time of deep economic problems. So many people, especially young people, are alienated from the political process and to them the word democracy is more a hollow cliché than a meaningful concept. Polling data shows that the commitment of Americans (as well as people worldwide) to the idea of living in a democracy has weakened considerably in recent years, especially among younger people.89
In recent years, for the first time in our lives, we have heard people talk about how democracy is failing and overrated, because, they say, the governments we constitute “cannot solve our problems.” These are words that send chills down our spines. They open a door to a place we cannot afford to go. In turbulent times, bad things can happen. The anti-democratic raw material for a fascist surge certainly exists: America is infected with what Taibbi diagnoses as “a profound hatred of the weak and the poor, and a corresponding groveling terror before the rich and successful.”90
That is not what America should be. And that is not, we believe, what America will be. We believe the majority of Americans are progressive and deeply desirous of living in a just, humane, and democratic society.91 But that does not guarantee that they do, or that they will. For that reason, the battles to protect and extend elements of the democratic infrastructure move front and center as battles for survival in an age of daunting economic and social change. Only with a full embrace of democracy can we put ourselves in position to turn the economic revolution we are in the midst of experiencing into humanity’s greatest victory, rather than its worst nightmare.
We take as a point of beginning the message with which Naomi Klein ended her most recent book. “There is little doubt that another crisis will see us in the streets and squares once again, taking us all by surprise,” she wrote.
The real question is what progressive forces will make of that moment, the power and confidence with which it will be seized. Because these moments when the impossible seems suddenly possible are excruciatingly rare and precious. That means more must be made of them. The next time one arises, it must be harnessed not only to denounce the world as it is, and build fleeting pockets of liberated space. It must be the catalyst to actually build the world that will keep us all safe. The stakes are simply too high, and time too short, to settle for anything less.92
Eric Schmidt is right, and so is Naomi Klein. The unemployment, poverty, and calamity resulting from the merger of the profit system with the coming wave of automation will be the defining issue of the coming decades. Capitalism as we know it and governance as we know it are ill prepared to define the future in favor of humanity. We cannot settle for that. We cannot settle for anything less than political and economic democracy because nothing less will create and sustain the America—and the world—that we have a right and a responsibility to demand.
* Fascism has become a widely used term in many different ways over the years. And there is a valuable literature on the topic. In some cases it is applied to any non-democratic authoritarian capitalist society—almost always military dictatorships—the kind the United States has routinely supported for the past seventy years. See Noam Chomsky and Edward S. Herman, The Washington Connection and Third World Fascism: The Political Economy of Human Rights, Volume I (Boston: South End Press, 1979). For our purposes, we prefer Robert O. Paxton’s approach. Calling fascism “the major political innovation of the twentieth century,” he regards it as “dictatorship against the left amidst popular enthusiasm.” Mass support is a defining feature, which is why the run-of-the mill police state does not qualify. “Fascism,” he writes, “was a new invention created afresh for the era of mass politics. It sought to appeal mainly to the emotions by the use of ritual, carefully stage-managed ceremonies, and intensely charged rhetoric.” See Robert O. Paxton, The Anatomy of Fascism (New York: Alfred A. Knopf, 2004), pp. 3, 16.