Robert Reich’s After Shock and Corey Robin’s Freedom Arguments
by Linda Beale
In earlier posts on ataxingmatter (here and here), I reviewed Robert Reich’s 2010 book, After Shock, and wrote about his suggested cures for the problems made most visible in the 2007 crash and the Great Depression that followed.
The gist of the book is summed up in the following quote:
“[L]eft to its own devices, the market concentrates wealth and income–which is
disastrous to an economy as well as to a society.” at 59
Corey Robin writes in the Nation about the same problem, Reclaiming the Politics of Freedom, The Nation, Apr. 26, 2011. But he notes that harping on the distributional inequality doesn’t resonate with voters. If the left wants to influence policies and capture the hearts of voters, he suggests, it needs to demonstrate that this distributional mayhem, which leaves everybody but the rich vulnerable, has even broader consequences that reach to the very fundamental creation myths of our society–the desire to be our own masters, to free ourselves from a tyrannical monarchy and colonial overlords who seemed to want to dictate how we could work, what we could drink, and where we could live. That is, to make what we are saying comprehensible at the “yeah, that’s what counts for me” level, we need to connect to America’s own Founding Moment. We need to “reclaim[] the politics of freedom.”
And I think he is correct. Because the problem we are facing today, with corporate lobbying and campaign contributions reinforcing the elite class’s wining and dining of politicians, is more than the dysfunction of the economy. Yes, there is too much money at the top where there is not enough ability to spend it. Yes, there is too little money at the bottom where there is no way to provide for basic needs. Yes, there is barely enough in the middle, resulting in stagnation in local businesses who don’t have enough customers to sell to and can’t afford to give credit to those who want to buy.
It is not just that banks, connected to power through their managers and shareholders, are able to speculate with other people’s money (our money!) in the international derivatives casino and then push their losses off on us. It is not just that corporate bosses rake in as much in a day as many of their workers make in an entire year of hard labor. It is not just that we can no longer talk to anybody local when there is a problem with our phone or our order from a company. It is not just that ordinary people are ignored, disregarded, almost shunned, because the elite really are only comfortable in the company of other elites. It is not just that we can’t get an appointment with a doctor unless we have (expensive) health insurance, or can’t get that crown we need on the broken tooth because it costs as much as some of us make in half a year.
No. These things are real, they affect us every day, they make us angry every day because we recognize our powerlessness to deal with the highly impersonal Big Business world that has been fostered by the four decades of reaganomics’ deregulation, privatization, tax cuts and militarization. But still, the problem goes much deeper than these things.
Our very freedom is threatened. When we are economically powerless, we are also powerless in our lives because we lose our freedom to make choices that are right for us.
- we lose our rights to bargain with our employers (look at how Wisconsin and Ohio have treated their public employees or how WalMart treats its workers and anyone who talks unions),
- we lose the power to improve ourselves by pulling ourselves up by the bootstraps through publicly funded education from grade school through university,
- we are dominated in the marketplace by powerful businesses that use automated systems to turn us off, ignore our calls and letters seeking redress for a mischarge or a poorly done job,
- we lose our jobs, are forced to accept paycuts or furloughs, when the company claims times are tought, yet we watch the same public companies to pay their CEOs millions more
Our freedom to improve ourselves, freedom to choose the kind of work we want to do, freedom to prepare for our retirement and then retire with some security about our future, freedom from worry about whether or not a catastrophic medical emergency will eat up all our savings and leave family without an adequate living–all these freedoms are being threatened today by the concentration of wealth in the hands of an elite few who thereby become emplowered to set the market terms as they choose.
The idea of the “free market” is a bill of goods sold to replace the real concepts of freedom we should be considering. Markets, of course, can only function well for the people where government constraints prevent the owners and managers from setting all the terms to suit themselves, leaving externalities of their profitmaking to be borne by the people. literally ripping them off. The sloganeers have persuaded ordinary Americans to think that the American Dream of freedom is encapsulated in that little bitty notion of a “free market” so that they will unknowingly throw away the big idea of freedom–the freedom to set one’s own course in life, in a cooperative society that works to provide those tools.
The reason we need a progressive tax policy–including at the least progressive tax rates with brackets that reach much higher into the stratosphers of the ultra rich (55% for those making $1 million or more annually) ; elimination of the capital gains preference (so that all income is taxed under the same rate structure); and an estate tax with bite (meaning a graduated rate that protects a reasonable nest egg for the next generation while serving as one method of limiting the concentration of wealth)– is to ensure the freedom of each and every one of us, from rich to poor, from newly arrived immigrant to elderly Native American.
When does the revolution start? I doubt that it will come about peacefully, unless there are those who are willing to sacrifice their positions achieved on the backs of those who came before them. It takes great courage to give back today, so that others can enjoy the fruits of their labors. The blood sweat & tears shed today, are not for the good of the country, but for the benifit of the elites, who believe it their God given right to prosper from others labor. All these words are meaningless to those who toil at the bottom, for they know they don’t stand a snow balls chance in hell of achieving the great American dream in todays atmosphere.
It is no coincidence that the game of ‘Monopoly’ became popular after the first Great Depression. It is a handy little illustration of how the “Free Market” works. Sooner or later, some motherfucker owns pretty much everything, all the hotels etc and no matter how you roll the dice you end up on one of their pieces of property and you have to pay the same person. It is only fun for this one player. Everyone else is dead meat. For many years the average joe got this. They understood it to their core. That the inheritance tax was a good thing because after this asshole with all the hotels croaked it would be a good idea to let some other players into the game. That regulation aimed at preventing this scenario and keeping the game going would be a good thing. But by the late seventies these things seemed old fashioned. Now, the 1%ers have the board. No matter how we toss the dice we land on some place they have claimed as their own. This game doesn’t end well.
Norman said: “When does the revolution start? I doubt that it will come about peacefully,…” The revolution is already starting and will end in Nov 2012. Norman, never in our life times have we seen the voters so motivated. The Tea Party is a symbol of the emotion in the populace.
As to your peaceful or not assertions, there is little evidence that the election will not assure the normal transfer (or not) of power. But, I do caution you, violent revolutions have occurred twice in our country, and they were catastrophic. In the end we came out stronger as a nation.
Awesome post, Linda
nice post. This is a good way to describe things to non-policy nerds that need to understand it.
Those revolutions occurred when the predominant technology was a weapon that even the best soldiers could get off 2-3 shots per minute, and against enemy tactics based on far outdated weaponry. There was no FBI, CIA, or NSA. Or Seal Teams. Any serious effort at such revolution will be throttled before anyone is even aware of it. Unless it came from within those groups. And then we’re screwed even worse, unless somehow the Chairman of the Joint Chiefs turned out to be a closet Michael Moore fan….
The reason we need a progressive tax policy–including at the least progressive tax rates with brackets that reach much higher into the stratosphers of the ultra rich (55% for those making $1 million or more annually) ; elimination of the capital gains preference (so that all income is taxed under the same rate structure); and an estate tax with bite (meaning a graduated rate that protects a reasonable nest egg for the next generation while serving as one method of limiting the concentration of wealth)– is to ensure the freedom of each and every one of us, from rich to poor
A recasting of the American notion of freedom to being dependent on the government. This is not only bizarre, it is:
1) Idiotic. What do you think the government is going to do with the money it takes from the rich? Dividend it to you? No they are going to set up a bunch of bureaucracies to “administer” it to you. You will see only a small fraction of the money while having to jump through your masters’ hoops.
2) Suicidal. Taking large amounts from the investing class, well, devastates investment, which is the source of jobs. And, do you think the wealthy are just going to sit there and let large amounts of their wealth be confiscated? So you destroy, or force overseas, investment capital, taking with it the jobs people need to be free, and leave them wards of the state (which can’t support itself without tax revenues).
A recasting of the American notion of freedom to one of being dependent on the government? “Freedom” and “Government” are antonyms.
So this is not only bizarre, it is:
1) Idiotic. What do you think the government is going to do with the money it takes from the rich? Dividend it to you? No, they are going to set up a bunch of bureaucracies to “administer” it to you. You will see only a small fraction of the money while having to jump through your masters’ hoops.
2) Suicidal. Taking large amounts from the investing class, well, devastates investment, which is the source of jobs. And, do you think the wealthy are just going to sit there and let large amounts of their wealth be confiscated? So you destroy, or force overseas, investment capital, taking with it the jobs people need to be free, and leave them wards of the state (which can’t support itself without tax revenues).
Just to say: YES!
Spout about fairness and equality, and Americans change the channel.
Talk about freedom and prosperity, and they’re yours.
And progressive policies win the freedom-and-prosperity prize, hands-down.
This is the single message that, repeated over decades (as the Reaganoics doctrine has been, so effectively), might actually sink into people’s minds.
It would useful, of course, to have tens of billions of dollars in corporate cash devoted to propagating this propaganda…
http://www.asymptosis.com/liberty-freedom-and-wealth-power-to-the-people.html
Sammy, that first paragraph is so aptly titled, Idiotic, as the content is just that, idiotic. What did the government do with the money it took from the workers in the form of excess FICA revenues? It gave it to the rich by lowering upper bracket marginal tax rates. Your second paragraph makes no more sense than does the first. Over seas investing, as you call it, had little to do with tax rates and all to do with the continuous search for the cheapest labor supply. Your vaunted investor class seems to care little about what benefit their investments may have in any one country. Their investments are aimed at the lowest cost centers of manufacturing and service industries.
Taxation is the necessary result of protective governmental services, whether the service is to protect the health all of its citizens or the assets of the wealthiest of its citizens. Now that extreme weather systems have devastated several areas of the country should the Federal government simply stand by with its thumb up its butt and do nothing to assist those who have now lost to Nature all that they worked hard to have? If they should be assisted, then why should the governemtn not assist others in need? Who are you to decide the best use of the government? Who are you to decide who should benefit and who should pay?
And good history too. I loved playing monopoly enough as a kid that I learned a lot about the actual history of the game and it’s development. As you say it’s no accident that the design of the game reveals the lopsided way markets favor the entrenched deep pocketed players. How quickly we forget.
Um. Or…. uses primarily non violent tactics. I’ve been around long enough to remember the velvet revolution in Prague, Solidarity in Poland, and the fall of the Berlin Wall. None of them involved weaponry more deadly than printing presses and mimeograph machines, at least wrt the final stages of the game. Nor did they depend on the internet which was still decades away.
Massive peaceful protest drove the Brits out of India too more or less. Not like it’s hard to find useful recent examples. And now they can be organized much more easily. Even the hardcore repression of the Chinese state is having a bit of trouble with their attempt to silence Ai Weiwei.
If the chinese citizenry can be moved to mass protest in support of a somewhat whimsical artist provocateur in the aftermath of Tienanmen Square what’s holding us back? Oh right the new season of Dancing with the Stars 😉
We forget that in perfect competition (free market) prices and profits are minimized, not maximized. We are not only fighting a corporatea ruling class, we are fighting the easily persuaded masses.
Where in a free market do you have an “investing class”.
From Wiki: ” By 2006 there were seventy million participants with more than $3 trillion of assets in 401(k) plans.” So approximately 1 in 5+ of every American, or 1 in 2 of every working American.
So 70M people with $3T in retirement assets. Let me not get too excited by an average retirement fund of $43,000. Why are so many people into the game, a game that has proved a rather disappointing retirement investment mechanism? What choice did they have? The 401K was touted as everyone’s piece of capitalism and a good tax sheltered approach. Corporate America evaporated the defined benefit plans which promised a fixed deferred income plan. The alternative was every man’s piece of the Wall Street rock. Fees and market turbulence has proved that the rock was merely a pebble. Can anyone retire on a $43,000 nest egg?
You see CoRev, that’s what I meant when I said that numbers mean little and can distort a great deal.
Jack,
Taxation is the necessary result of protective governmental services, whether the service is to protect the health all of its citizens or the assets of the wealthiest of its citizens.
Fine, leave it at that. This does not require 40% of GDP or 55% tax rates.
Since we are all about averages, we must be expecting the average 33 YO to retire. You see Jack, that’s what I meant when I said that numbers mean little and can distort a great deal.
And, everyone forgets that all players start even. Since it’s just a game it is as much luck as strategy and hard work, Y’ano like real life.
Without a strategy to improve your life and the hard work needed to be successful with it, you always end up a loser. Unless, of course, your successful strategy is to win the lottery, then the likelihood is a loser who is also poor.
Get over it. All of the modern industrialized economies since the crash of 1929 are mixed economies. a vibrant public sector wherein a society accomplishes collective goals along with well regulated markets that allow for individual expression private property etc. That is what works. A 50-50 split is probably about right although the Chinese are currently eating our lunch with a much greater public than private mix so the jury is definitely out as to what the proper mix is. But the point is that there is absolutely no argument as to what works. And that is a mix of private and public economies. Nothing else comes close and nearly everything else has been tried at this point.
And of course those dice. Or the lucky sperm club.
“The Tea Party is a symbol of the emotion in the populace.“
Heh.
Thne to judge from their numbers at recent rallies, the ’emotion in the populace’ is decidedly on the wane.
“The Tea Party is a symbol of the emotion in the populace.“
Heh.
Then to judge from their numbers at recent rallies, the ’emotion in the populace’ is decidedly on the wane.
SW,
But the point is that there is absolutely no argument as to what works. And that is a mix of private and public economies.
Agreed. But what is the proper government mix? Is it 20-30% as in the 50’s and 60’s? 35% up to the recent past? Or 43% now (and projected to head up dramatically)? http://blogs-images.forbes.com/beltway/files/2011/02/300px-Us_gov_spending_history_1902_2010.png
This growth in government share is correlated with a declining GDP growth rate: http://2.bp.blogspot.com/_y1kuEyAUKxE/TRrtr-FW9XI/AAAAAAAABn4/ZcLSAwLyOsc/s1600/image004.gif
the Chinese are currently eating our lunch with a much greater public than private mix
No. The Chinese state policies keep their people POOR. China GDP per capita is $7,400; the US is $47,400, nearly 7 times greater. Chinese GDP per capita is sandwiched between Turkmenistan and Algeria in the world rankings, and below such countries as Thailand, Angola, Tunisia, and Cuba. https://www.cia.gov/library/publications/the-world-factbook/rankorder/2004rank.html
So the reference to China’s state run economy is instructive, but not in the way you intended.
you are drinking the Koolaid. I agree that China has a way to go in our direction. But look at the growth of infrastructure over there and the absolutely critical decline of same over here with no prospect for improvement. No you do not make a convincing argument because your metrics are fucked up. THey only measure the things you care about. We and China are the two extremes. Both stupid in our own ways. Each need to move towards empirical reality. The Chinese will probably get there first.
Sammy
You haven’t a clue as to what percentage of the GDP is reasonable in a vibrant economy in a modern technological society. Percentages are irrelevant. The services required of the government are determined by the needs of all of the people, not just a financial elite who have become accustomed to having more than all others at the expense of those others.
And you assume that that total will experience asset appreciation in spite of the two major market crashes since 2000. What goes up can certainly come down and those 401k accounts are dependent on growth that is uncertain at best.
Jack,
You haven’t a clue as to what percentage of the GDP is reasonable in a vibrant economy in a modern technological society.
There isn’t a “right” percentage. Communists, like in the old Soviet Union, want government to be 100% of GDP, anarchists want it to be 0%. It’s a matter of societal preference.
In college, pre-Soviet collapse, I was taught that the difference between Communism and Capitalism was a simple tradeoff between “equality” (Communism) and “efficiency” (Capitalism). Since the collapse of Communism, many people learned that state ownership was not only less efficient, but hopelessly so, and that the equality produced meant “equally miserable.”
So I would much rather live in a society more free from government control, and therefore more prosperous. I do not care if some get extremely rich, because that just means more opportunites for me. A rising tide lifts all boats and a receding tide strands all boats
‘So I would much rather live in a society more free from government control, and therefore more prosperous. I do not care if some get extremely rich, because that just means more opportunites for me’.
THis is the primary fallacy of the American system. The more wealth is concentrated, the LESS opportunity there is for you and everyone else. THis is a fact jack, whether you find it counterintuitive or not. Thirty years of propaganda may have convinced you otherwise and simply because it is legal to fuck your neighbor doesn’t mean that it is more likely that you are going to do so. Most people won’t but those who do will be handsomely rewarded. These folks will then gain entry to the 1% club along with the members of the lucky sperm club. And of course the criminal class. There, write large is the end stage of your land of opportunity.
SW,
Yes it is a cold, competitive contest for resources. Thank God for laws and the innate humanity that most possess. But you are foolish to believe the human instinct for avarice is suspended once they create a powerful State. Once the State becomes law maker, enforcer, and producer, its power is unchecked. That is why if you look at history, by far the most inhumanity has been perpetrated by totalitarian governments, not private enterprises.
At least in Capitalism, businesses create wealth and power by delivering goods and services of value to their fellow man. Governments can do it through coercion at the point of a gun.
***sigh!*** Jack, and Government revenues are immune from economic down turns? BTW, taking responsibility for managing your assets (if/when you have them) is important to keeping them.
That is why if you look at history, by far the most inhumanity has been perpetrated by totalitarian governments, not private enterprises
But who has historicaly played wet nurse to inhuman totalitarian regimes?
Lets look at the golden horde for starters. The mongols as well as the rest of Asia placed placed a higher value on silver relative to gold then did europe. During the Venetian bankers salad days the investment class made vast fortunes exchanging european silver for Asian gold. This led to a deflationary callapse of europe prior to the black plauge, while at the same time strengthening the hands of the mongols because silver had greater purchasing power in Asia with which to finance the most brutal and genocidal conquest in recorded history.
Lets fast forward to the last century. The Japanese milatary was finanaced in its 1905 war with Russia by Jacob Schiff. There would not have been a greater east asian co prospertity sphere and all its entailing horrors had it not been for the investment class.
Jacob Schiff also is responsible for the Bolshivik terror. In the waning days of the Great war tsardom was kaput. Kerensky in power still field armies on the side of Great Britain and America, against Germany. So when Jacob Schiff gave monies to the Bolshiviks not only did he weakened his host contries war efforts by eliminating a critical ally at a critical time, he gave birth to the worst totatarian regime of the last century.
How did Hitler and his homies finance the Nazi party? Lets think about Rockefeller, Ford, Harriman, and the Warburgs.
At many points had historical rich dudes had a haircut, they would have had less monies to make mayhem and bankroll totalitarian regimes.
Perfect competition = free market?
On what planet?
In the U.S., “free” in “free market” means unregulated, and that means decidedly imperfect competition.
We’ve witnessed the manipulation off the market for securities twice in the past fifteen years to the serious detriment of everyone’s 401k plan. And you didn’t
notice any of the fund managers, who had been raking about .75% off the top yearly, offer to return any of their fees in spite of their inability to shelter our 401k money from the storms. The 401k retirement plan does not allow for very much individual investment control. You’re blowing smoke, as usual.
Sammy
what the hell kind of “college” did you go to?
Linda Beale
once again, I agree with much of what you say.. but when you bring it all down to “tax rates…that reach.. into the stratosphere..”
i can’t follow you. It’s bad political strategy, and it may not be good for the people even.
But don’t think I am agreeing with those commenters here who have a fairly tale about the “rich” needing to free of taxes so they can create jobs.
it’s just that greed is as bad for the poor as it is for the rich. we have needs as people that cannot be met by individual effort. and we have situations that arise where people are crushed by circumstances beyond their control if they cannot organize as communities for mutual aid and protection… that is, create governments and act through them.
but those governments are potential sources of danger.. as is all power… and we need to be careful to control them. and to control our urge to use them to solve all life’s problems… real and imaginary. and we need to be careful the governments do not become the tool of “the rich”… as our victims of right wing fantasies fail to recognize..
and we need to pay for the government we need. by a system of progressive taxes. but once you have as your motive for taxation some idea of leveling, or of punishing the rich.. you are entering an error apt to be as bad for you and the poor as the opposite error… libertarianism… or what we actually have… a government in the hands of “malefactors of great wealth.”
and, oh yes. we need to keep in mind that the simple minded… that is most of the people… are easily fooled and apt to be vicious… under whatever ideology seems the most useful to those who love power.
sammy
you seem to see the world in terms of all or nothing. try to imagine that some government activity is necessary… even that which helps out the poor in time of need. this can take place without destroying freedom and without crippling the rich.
Until progressives have the courage to argue for Reagan’s top tax rates they aren’t going to have much influence. Until they start arguing for wage and economic growth that trickle-down did not deliver to most people, and not just argue for budget-balancing (much less “leveling”), their arguments will fall mostly on deaf ears. Even large ones in the White House.
The primary benefit of progressive taxation is illustrated in the corporate world. The size of a profitable corporation becomes limited by the tax rates. Long before the corporation or other enterprize gets “too big to fail” the stockholdrs shoukd find that that they improve thier earnings by investing in smaller organizations. Such a system preserves a competitive marketplace.
Concerning individual tax rates, most extrme incomes are from unearned economic rent as oppsed to producer surplus or other forms of actual earnings.
I fear that people are more interesting in getting themselves rich than achieving national or global prosperity. And there is a strong desire to have higher status and power than others, so the others might as well stay poor, all the easier to be above them. This comes from the very sense of “wealth” that Adam Smith tried to bury. Wealth is not in piles of claims on future production or stored treasure. Wealth is in the division of labor and well functioning institutions, public and private. Without that, nothing else matters. But given that well functioning institutions had once been created, a kleptocracy can temporarily feast on their destruction. But not forever.
pjr
i agree. but the argument needs to follow from “what we need the government to do, and what it will cost, and how will we pay for it. not begin by “let’s tax the rich and spend what we get.”
charles peterson
that’s pretty much my view. except to add that the desire for higher status may be largely, or at least somewhat, “unconscious.” people always want more than they have, and they compare themselves to the standard they see around them, even if only on television.
so you get a kind of mindless grabbing for more, now. and no thought by anyone who matters about how all this comes out in the end.
i hate to say this, but all the preaching about the virtues of voluntary “poverty” over the years have been to the poor. the rich don’t have time.
“It’s bad political strategy, and it may not be good for the people even.” That’s true only so long as the wealthiest 2% or less continue to control who we get to vote for in our “democratic” government. And I’m not talking Republicans vs Democrats. Both parties are well controlled by their benefactors. All forms of income should be taxed in an equivalent manner. Why is unearned income favored above income from work? Why is inheritance sheltered as though the benefactors are entitled to that income? Benefiting from the death of family members is not an entitlement. It’s an income. Otherwise there would be no need for wills and probate.
“let’s tax the rich and spend what we get.”
I’ve been following progressive politics and leaders (and wannabes) for 30 years but I don’t think that’s ever been even an oversimplification of progressive goals. If you have a citation that veers anywhere near that I’d love to see it.
If the game has dice AND deals out cards (like Monopoly- and more and more like life in the US) the hardest work and best strategy won’t let you ‘win’. After all, if it’s winner take all, 99% are going to lose no matter what and often those who end up at the top have done nothing special at all. I’m an example. The longest I’ve ever held a full time job is five years and I wouldn’t know a life strategy if it bit me. But I’ve had luck all along- starting with being born into a well-educated, middle-class family in the US at the height of the Great Compression and continuing through the housing bubble when, for the first time in many years, I happened to be living in the US and to own a house in a bubble market.
Now, to be fair, I was probably never going to really play this game no matter how fair it was. I’m just not particularly interested in either money or winning. But don’t think others who care desperately about both haven’t taken note of people like me. When I was a child people said, and believed, that as long as you were willing to work hard you’d do alright in life. I don’t know any member of the middle class who believes that now. We have built a society where the most ambitious and eager for success see that the only sure way to achieve their goals is to stack the odds in their favor and to ignore all other claims. The winning 1% make society a nearly dead loss for the rest of us.
Yeah, well, as an accidental member of your ‘investing class’ I say screw that. I want to live in a society where everybody gets a say in how the wealth we all contribute to creating gets invested. I somehow think that if that decision gets spread around a little there’s going to be a lot more investment in things like education, the environment, the physical and intellectual infrastructure and a lot less going to solid gold bathroom fixtures and private islands in the South Pacific. Of course if you’re happy with all those dollars going to such essential things as viagra advertisements and K Street lobbyists you’ll no doubt be equally satisfied with the sort of society it creates: one in which a helicopter pad on the roof of your home in a gated and guarded community is the only way to keep your family safe from the desperate 99% and the first large scale natural disaster heaves you right back into their midst as the impoverished, hollowed out government no longer has the resources to bail out even the elite.