Politics and the Clash of Economic Stories

by Alan F. Zundel

Politics in the U.S. has always been organized primary around competing stories about the economy. These stories help people make sense of what’s going on in the larger society, what it is that threatens them, and what the government should do about it.

The stories typically start with a “once upon a time” beginning, go on to explain how a problem arose, identify heroes and villains, and end with a call to action. In the last Presidential election four stories were in play, and they are still in play today. Which story someone accepts defines their political orientation and shapes their political actions, most importantly how they vote.

The New Deal Progressive Story

The New Deal Progressive Story was most famously framed by President Franklin D. Roosevelt and became the organizing story of the Democratic Party for about a half a century. It goes like this:

Once upon a time America was a land of economic opportunity for ordinary people, but then big corporations, greedy for power and profits, took over the economy and led us into a horrible depression. Roosevelt brought people together to restrain the economic elite by putting limits on the actions of big corporations and creating a social safety net for people in times of need.

The story dominated U.S. politics for several decades but began to lose its hold on the Democratic Party by the 1980s. It has returned to prominence with the Presidential campaign of Bernie Sanders and is also popular among progressive Democrats such as Elizabeth Warren. The new version goes like this:

Once upon a time FDR’s New Deal policies resulted in 25 years of prosperity and rising incomes for all, but then big business leaders conspired with extreme conservative politicians like Ronald Reagan and undid our progress. Now we have to rebuild and extend Roosevelt’s coalition to defend and extend the social safety net and again regulate the actions of big business.

The Libertarian Conservative Story

The reason the New Deal Progressive Story lost ground, however, is not addressed by its new story tellers. Ronald Reagan was not just a creature of big business, he was a widely popular President because he told a compelling story that explained the economic problems of the 1970s. His story was the Libertarian Conservative Story, and it goes like this:

Once upon a time we had economic freedom and opportunity in this country, but then ambitious politicians created big government programs that promised too much to too many people in the 1960s and ruined the economy in the 1970s. President Reagan brought people back to traditional values and revived the economy by lowering taxes and freeing the economy from excessive regulation.

This has been the defining story of the Republican Party since the Reagan administration, and was told by virtually all of the 2016 Presidential candidates except Donald Trump.

The Neo-Liberal New Democrat Story

When leaders of the Democratic Party found themselves losing voters to the Republicans’ Libertarian Conservative Story, some of them came up with a new story, the Neo-Liberal New Democrat Story. It goes like this:

Once upon a time the Democrats’ New Deal led us into rising prosperity for all, but then the economy changed and we didn’t change with it. As a result we lost voters to the Reagan Republicans, who led people in the wrong direction. President Bill Clinton saw that we needed to adapt to the globalization of the economy with new trade agreements and provide education and training to bring workers into the new economy. We need to fight for this against the forces of the Reagan Republicans.

This has been the story told by most Democratic politicians since the Clinton administration, and was best represented in the 2016 Presidential election by Hillary Clinton. (Of course!) But because the Clinton era policies did not bring their promised benefits to working people, the New Democrats were challenged by Bernie Sanders’ revival of the party’s New Deal Progressive wing. The two wings are now fighting over the future of the Democratic Party and which story will represent it.

The Alien Undermining Story

The Alien Undermining Story is an old one, but did not have as much influence as the other three stories until it was picked up by Donald Trump in his 2016 Presidential campaign. It goes like this:

Once upon a time we were a united people and things were good, but then we were betrayed by a political elite pandering to alien forces who don’t accept our values. We need a strong leader to sweep this elite from power and drive out or suppress these alien forces.

At the risk of sounding overly dramatic, I have to point out that the historic precedent for this story is that it was told during the Great Depression by fascists like Adolph Hitler. The Alien Undermining Story has its greatest power in times of confusion in which multiple stories clash and none seem to be able to pull people together well enough to move the country forward. People then look to a strong leader to unify us against the alleged perpetrators of our chaotic situation.

What Now?

Our political stories unite us with those who share them, but divide us from those who adopt divergent stories. When no story is capable of gaining majority support, there are only two paths open to us. One is persistent divisiveness that allows the rise of fascist forces and ultimately leads to greater chaos. The other is to find a new story capable of winning majority acceptance.

This new story might be a variation of one of the old stories that allows it to incorporate the persuasive elements of a competing story, or it might be something radically different from any of the older stories.

But to persist in clinging to one of the old stories without identifying why many people find it unpersuasive, or without finding a way to adapt it so as to bring two stories together into a better story, is a recipe for disaster.

What Is Socialism?

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by Alan F. Zundel

Socialism is no longer a dirty word in the U.S.

Today the face of socialism is more likely to be Bernie Sanders than Nikita Khrushchev. Younger voters were born after the end of the Cold War, for them a part of history rather than memory. Older voters are more concerned about the threats posed by resurgent capitalism than by the threat of universal health care.

So what is socialism? There has been a lot of confusion, discussion and debate over this question lately. Which should not be surprising, since socialists themselves have been debating this same question for nearly two hundred years.

Words, especially words used in political conflicts, can be ambiguous—they can have multiple meanings and nuances in different contexts. Socialism has never meant exactly the same thing to everyone.

What is generally agreed is that “socialism” is different than “capitalism” and in opposition to it. But that doesn’t take us too far, not least because the definition of capitalism is not always clear either.

We can get some insight by tracing the history of these words. The word “capitalism” came into use in the 1800s as writers began to reflect on the remarkable changes happening in Western European societies. Feudal socio-economic relations, which had lasted for hundreds of years, were disappearing and something new was being born. “Capitalism” was coined to describe this new something.

There was general agreement on the main features of capitalism. Market transactions facilitated by money were much more widespread, whereas under feudalism most goods had transferred hands based on traditional relations between people. New conceptions of private property rights governed the use of lands. Tenant farmers and independent craftsmen became wage earners.

And, mostly importantly, those who owned “capital”—the material resources used in production, or the money to invest in these—controlled production and sought opportunities to make profits.

Most of these writers were trying to understand the source of the contemporary labor problem.  Under capitalism workers were often in open conflict with the owners and managers they worked for, fighting for better pay and working conditions, and there was a large class of impoverished people who were now dependent on wages but couldn’t find jobs.

The writers wanted to apply new scientific methods of studying society to get at the source of the problems and re-design economic relations so as to replace social conflict with social harmony and cooperation. Because of this emphasis, they called themselves “socialists.” Many of them had religious orientations.

Socialists had different ideas about what exactly needed to be fixed within capitalism, although they agreed that something fundamental was broken. Those who regarded private property as a chief part of the problem and advocated common ownership were known as “communists.” Karl Marx was one of the latter, but he was neither the first nor, at least during his lifetime (1818-1883), the most influential of the socialists.

It was when the intellectual socialists began to combine forces with working people’s movements that “socialism” was born. Socialism in this usage wasn’t an economic system, it was a social movement aimed at fundamental social change on behalf of working people. By the end of the 19th century socialist political parties had formed and Marx’s writings became the most widely used source for their theoretical orientation. But there was still debate over ultimate aims and tactics.

Around the turn of the century capitalist enterprises were growing into large corporations controlling all phases of production and distribution, from resource extraction to sales, and trusts held stock in multiple businesses to coordinate their operations. Many socialists saw the trajectory leading toward one big business controlling the entire economy. At that point, the state could simply step in and replace private ownership with state ownership. This became the unifying goal of the movement, although there were still dissenters.

The main split between socialists came over the question of evolution or revolution, that is, should the state takeover of the economy be achieved gradually by democratic processes or all at once by violent revolution? The former seemed the most realistic path until the 1917 communist takeover of the Russian government by Vladimir Lenin and his allies. After that the debate between democratic socialists and partisans of revolution, now simply called “communists,” heightened.

In the mid-20th century growing awareness of the totalitarian character of the Russia-dominated Soviet Union led many socialists to question the model of state ownership with centralized control of economic transactions. Some European socialists began to advocate mixed economic forms with both state and privately owned companies, market relations, and extensive social welfare protections such as national health insurance. With the collapse of the Soviet Union in 1991, the once unifying socialist goal of state ownership collapsed with it.

Which brings us back to now. Is socialism simply a critical view of capitalism? A social movement on behalf of working people? A system of centralized economic control and public ownership of the means of production? A system of mixed ownership and extensive social welfare programs?

The word has had shifting meanings over the years, changing as the shape of capitalism changed and new understandings developed. The capitalism of today is not the capitalism of the 19th or the 20th centuries; it continues to evolve and change even as its characteristic features persist. Socialism needs to evolve along with it in order to address the problems of the capitalism of today.

In sum, socialists need to define socialism in such a way that the word has meaning for people living under current economic conditions. The definition of socialism is not so much a linguistic problem—it is a political problem.