“Markets do not automatically generate trust, cooperation, or collective action for the common good.” - Tony Judt, Ill Fares the Land
This post will discuss the last two of the necessary actions if progressives are to recapture the high ground in this debate about the role of government:
- Striking at the myths about the success of unregulated markets
- Demonstrating the role government can successfully play in the world that will be our future
Unregulated or under-regulated markets were the cause of both the Great Depression of the 1930’s and our ongoing Great Recession. Most recently in the US the immediate causes of our economic trouble were the deregulation of the financial industry and of the housing market.
Judt points to various Thatcher-era privatizations in the UK that resulted in a total transfer of about $30 billion from the taxpaying public to stockholders and other investors and notes that there are “essential services not well served by the workings of the profit motive…transport, hospitals, schools, mails, armies, prisons, police forces, and affordable access to culture.”
Closer to home he points out the role played by Fannie Mae and Freddie Mac, private agencies with access to privileged access to government money, in the 2008 housing debacle. Contracting presents the “perhaps most telling case against privatization.” Many of the goods and services that “states seek to divest…postal services, railway networks, retirement homes, prisons… are…inherently the sort of activity that someone has to regulate - that is why they ended up in public hands in the first place.” [Judt]
After responding to the false efficiency of the “free market“ and pointing out the benefits that modern European democracies have been delivering to their people since emerging from the destruction of WWII, the next charge used to prevent political progress in the US is “but it’s socialism!” The charge is fraught with the fear that our personal freedom is at stake. The most important counterpoint to this that there is not any such fear or concern in Europe where these more enlightened social policies are actually in effect. Secondly, the European democracies have capitalist economic systems - there is no worker ownership of the means of production, which is the historical definition of socialism. In essence, the policies enacted in European democracies (so called “social democracies”) have saved capitalism (similar to what the New Deal did in the US in the 1930’s) and have made its benefits more generally available to their people.
In spite of the trend toward globalization, there will continue to be a role for nation states for the foreseeable future. Looking ahead, we need to examine what type of government policies are most likely to resolve the new challenges of the future.
Do nothing governments will only exacerbate the financial crises caused by deregulation. Do nothing governments will not be able to protect its citizens against the adverse effects of globalization. Do nothing governments and their global warming deniers will not address the coming global climate change impacts and will not develop alternative forms of energy. Do nothing governments are unable to stop the growing inequality in our country with all its attendant social ills. Do nothing governments will be unable to increase jobs creation in traditional or new areas.
I think the answer is clear. Progressive policies are the hope for the future. Obviously we will need to decide among conflicting priorities (tax breaks for the rich or unemployment benefits for the jobless, foreign wars or universal health care, early deficit reduction or increased employment). And as Judd concludes in Ill Fares the Land, “if we think we know what is wrong, we must act upon that knowledge. Philosophers, it was famously observed, have hitherto only interpreted the world in various ways; the point is to change it.”
[This concludes the posts exploring themes in Tony Judt’s Ill Fares the Land (The Penguin Press, New York, 2010). It is a great book and you should go out and get yourselves a copy.]
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