'Can Democracy Survive Global Capitalism?' by Robert Kuttner
Alexandria Ocasio-Cortez’s recent primary victory has sparked much commentary about a revived battle between the Democratic party’s center-left establishment and its populist left: Round 2 of Bernie versus Hillary. But the media’s interest in straightforward conflict and its aversion to nuance can obscure the fact that left-wing populism is far from uniform and still poorly, or at best vaguely, defined.
Given the way Donald Trump successfully coopted traditionally leftist economic and anti-corporate rhetoric to win the election, it seems clear that the answer in the Democratic party must at least pay lip service to populism. But different programs — from Nancy Pelosi and Chuck Schumer’s “Better Deal,” to Bernie Sanders ambitious entitlement proposals, to Elizabeth Warren’s newly proposed Accountable Capitalism Act — suggest different visions for how the Left can address the depredations of capitalism it has long managed to ignore.
As journalist, Brandeis professor, and cofounder of the American Prospect Robert Kuttner describes in his recent book “Can Democracy Survive Global Capitalism?”, the Clinton-Obama center has been discredited by Hillary’s loss and four decades of neoliberal economic policy that have triggered a current populist backlash from the right, both here and in Europe. Only by properly understanding that failure — by determining how capitalism got away from us — Kuttner suggests, can we arrive at a viable left-populist approach for putting it back in its place.
Kuttner argues that the process of globalization since the 1970s has allowed corporations, centrist politicians, and international organizations like the European Union and the World Trade Organization to successfully reimplement a laissez-faire approach to markets. As a result, we have returned to an economic environment like that of the late 19th century, which bred inequality and eventually fueled populist uprisings in the United States and fascism in Europe. The post-war system established by FDR’s decency and ingenuity, and by a confluence of other fortuitous circumstances, was destroyed.
Kuttner calls that system, a version of which he wants us to return to, “nationally managed capitalism.” On its face, the phrase sounds something like Steve Bannon’s “economic nationalism.” And indeed, shortly before his ouster from the Trump administration, Bannon called Kuttner to express admiration for the latter’s views on trade and emphasize commonalities in their approach to China. But for Kuttner, Trump offers only a simulacrum of the economic reform that is needed, mixing it with racist and anti-immigrant rhetoric and using it to veil mainstream right-wing policies, including the tax bill and deregulation.
Nationally managed capitalism does nonetheless involve a version of protectionism, which was in Kuttner’s view wrongly stigmatized on the left during its neoliberal turn. Dick Gephardt, for example, was, like our current president, “pilloried as a vulgar protectionist” for questioning the free-trade consensus during his 1988 presidential run. In addition to embracing free trade, Clinton reoriented the party by cutting welfare, deregulating the banking system, and insisting on a balanced budget, all while shifting the social justice discussion away from class and toward an identity politics corporations could embrace.
The result of trade deals like NAFTA has largely been what people like Gephardt said it would be. Manufacturing in the country was decimated, especially in the upper Midwest, and communities fell apart. Free-trade policy, moreover, Kuttner claims, became a gateway to free-market economic policy in general, becoming “an all-purpose tool to dismantle managed capitalism.” American corporations did benefit of course, from access to cheap labor and new markets, but Kuttner emphasizes that the country as a whole did not: These deals did not even produce net economic growth. Instead China was allowed to export goods more easily while continuing protectionist policies at home.
Whereas the dominant centrist sentiment at the time held that bringing China into the global economy would eventually lead to an embrace of democratic liberalism, Kuttner argues that the opposite has taken place. That received view presumed an affinity between free markets and democracy, but “democratic capitalism today” has become “a contradiction in terms.” Instead of countries like Russia and China “becoming more like us,” Kuttner writes, citing James Mann, “we are becoming more like them.” Our national government no longer acts to check corporate power and make space for genuine democracy, but instead acts in cahoots with capitalists, while political and business interests are blended at all levels of government and on both sides of the aisle.
So, what kind of left populism can revive democracy? Kuttner’s prescriptions revolve around “reclaiming the public realm.” That means restoring faith in genuine government services — ones like Medicare that don’t act in dubious partnership with private industry (as Obamacare does); reinvigorating antitrust and financial regulations; exploring public supplements to labor income; and implementing trade polices that affirm rather than undermine a national social contract with workers. In brief, democracy can survive global capitalism only if it succeeds in making it less global and less capitalist.
Alexander Stern is deputy editor of RealClearPolicy.