The Middle Out: The Rise of Progressive Economics and a Return to Shared Prosperity - Hardcover

Tomasky, Michael

Hardcover

ISBN 10: 0385547161 ISBN 13: 9780385547161

Verlag: Doubleday, 2022

Inhaltsangabe

Political journalist Michael Tomasky tracks an exciting change among  progressive economists who are overturning decades of conservative dogma and offering an alternative version of capitalism that can serve broadly shared prosperity to all.

"Engaging, briskly paced ... On balance, history appears to be on Tomasky’s side." —The New York Times Book Review

In the first half of the twentieth century the Keynesian brand of economics, which saw government spending as a necessary spur to economic growth, prevailed. Then in the 1970s, conservatives fought back. Once they got people to believe a few simple ideas instead—that only the free market could produce growth, that taxes and regulation stifle growth—the battle was won. The era of conservative dogma, often called neoliberal economics, had begun. It ushered in increasing inequality, a shrinking middle class, and declining public investment. For fifty years, liberals have not been able to make a dent in it. Until now. 

In The Middle Out, journalist Michael Tomasky narrates this history and reports on the work of today's progressive economists, who are using mountains of historical evidence to contradict neoliberal claims. Their research reveals conservative dogma to be unfounded and shows how concentrated wealth has been built on the exploitation of women, minorities, and the politically powerless. Middle-out economics, in contrast, is the belief that prosperity comes from a thriving middle class, and therefore government plays a role in supporting families and communities. This version of capitalism--more just, more equal, and in which prosperity is shared--could be the American future.

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MICHAEL TOMASKY was appointed top editor of The New Republic in March 2021. He is also editor of Democracy: A Journal of Ideas, a contributing opinion writer for The New York Times, and a regular contributor to The New York Review of Books. He is the author of four books: Left for Dead (1996), Hillary’s Turn (2001), Bill Clinton (2017), and If We Can Keep It (2019).
 

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Chapter One
The Golden Age

Emerging from the War

This book will end by looking forward, but it will open by looking back. Specifically, we will look back to the era after World War II and examine how economic policy making changed over that time so that we have a fuller understanding of how we got to this point, when (most of) the Democratic Party has embraced a much more economically populist agenda. What made that happen? This book offers four different answers to this question, all to be discussed in coming chapters, and each answer zooming the historical lens out a bit more broadly than before. In the short term, the main answer is the pandemic—­a crisis that created the conditions that made a greater level of government intervention in the economy possible. In the slightly longer short term, say the last fifteen or so years, it’s changes in economic thinking and in political activism and in the often-­overlooked but important foundation world that opened up the space for ideas that challenged the reigning conventional wisdom. In the longer term still, I examine the economic ideas and principles that were incubated in the 1940s and that came to dominate policy making in the 1970s, because all that new thinking and activism of the last fifteen years represented a reaction to them. And finally, my fourth answer to the above question lies in the fact that those ideas, the ones that came to prominence in the 1970s, were themselves a reaction to the reigning ideas of the earlier era, which takes us back to the end of World War II. We could do this forever, I suppose, but and there’s a good argument for going back to the New Deal, but I choose the late 1940s because that was the time when our modern world and economy were, in many important senses, born. Before 1945, as the labor historian Joshua B. Freeman has written, the United States “was much more a conglomeration of regions with distinctive forms of economic activity, politics, and culture” than it would become.

So this returns us to what is often called the golden age of capitalism—­that postwar period when the middle class exploded, wages grew steadily, American homes added comforts that would have been inconceivable in the Depression era, and everything just seemed to work. As we’ll see, everything didn’t work for everyone. Black people, other people of color (who didn’t exist in the United States in large numbers yet), and women were largely cut out of the action, a historical error that any new golden age must take pains to correct. And even beyond that, there were problems aplenty, as there always are: intense labor strife, deep ideological divides over communism and anticommunism fueled by demagogues like Joe McCarthy, violent battles for civil rights, bitter division over the war in Vietnam.

But economically speaking, it was a comparative golden age. And this is the first important point that needs to be made today about this period. It was an age of shared prosperity compared with today, and it was such because our economic values were better. Coming out of depression and war—­two experiences shared by the whole population that demanded sacrifice and made people think about not just their own well-­being but that of their neighbors—­the United States of the 1940s and 1950s had morally superior economic values to the United States of, say, the 1980s.

But let’s put morality to the side for now and establish that the period was materially better. Robert Skidelsky, the economic historian and biographer of John Maynard Keynes, wrote in his short post–­Great Meltdown volume, Keynes: The Return of the Master, of the two broad postwar periods that he refers to as the Bretton Woods era and the period of the so-­called Washington Consensus. Bretton Woods refers to the Bretton Woods Conference of July 1944, when representatives of the Western democracies met at a resort in New Hampshire to set up a system of global economic cooperation to take hold once the war was won. Bretton Woods established the International Monetary Fund and provided for a system of fixed exchange rates; in addition, the Bretton Woods system encouraged government intervention in the economy to promote full employment as a chief goal. Thus, the Bretton Woods system was, Skidelsky writes, broadly Keynesian. The “Washington Consensus” was a phrase coined by the British economist John Williamson in 1989, referring originally to a set of policy ideas that Washington sought to impose on developing economies. These ideas included lower tax rates, deregulation, privatization, and kindred notions; given that, the term came to refer to neoliberal market fundamentalism more generally. The Bretton Woods system lasted, according to Skidelsky, from 1951 to 1973, when the first OPEC oil crisis caused a number of economic shocks. After a transition period, the Washington Consensus era ran from 1980 to the time of Skidelsky’s writing (the book was published in 2009).

Skidelsky compared global and Western economic performance during the two periods using a variety of metrics. He begins with real global GDP growth, which ran at 4.8 percent during the Bretton Woods period, and 3.2 percent during the Washington Consensus period (and remember, the neoliberals say that it’s all about growth!). He also notes the existence of five global recessions since 1980, and none during the Bretton Woods era (and one large one in that mid-­1970s interregnum). Likewise, global unemployment grew in the Washington Consensus period; Skidelsky tracks the unemployment rate in the five major industrial democracies, and all rose during the latter period (most dramatically in the U.K. and Germany; in the United States, the increase was from 4.8 percent to 6.1 percent, which isn’t as sharp as the U.K.’s 1.6 percent to 7.4 percent but still means a few million more people out of work). Inequality was, not surprisingly, “stable in the Bretton Woods age, but it rose sharply in the Washington Consensus years from 1982 and all the way into the new millennium.” World growth volatility—­changes in the growth rate of real GDP over time—­was characterized by large spikes in the mid-­1970s and early 1980s, but overall was about the same in the two periods. Only on inflation did the Washington Consensus period produce better results, but the numbers weren’t as different as many might expect—­3.9 percent in the Bretton Woods period to 3.2 percent in the Washington Consensus period. Likewise, four economists taking a longer historical view found that the average annual growth rate for the advanced democracies in the 1950 to 1973 period was 4.9 percent, compared with 2.2 percent for 1820 to 1870, 2.5 for 1870 to 1913, 1.9 percent for 1913 to 1950, and 2.5 percent for 1973 to 1979 (when their study ended). They note also that the growth was broadly shared—­that wages grew steadily on pace with productivity, a key measure indicating that gains weren’t just concentrated at the top as they have been in more recent decades. So the economy really was better for middle-­class families than before or since.

It should be said that none of this growth and prosperity was inevitable. Early during World War II, as it became clear, in the United States and the U.K. in particular, that the Allies were likely to win the war eventually, economic and political minds turned toward the postwar economy. They did so with considerable trepidation. To appreciate this, we have to imagine the wartime economy, barely comprehensible to us today in our age of unquenchable consumerism. This was a time when millions of people were doing without. Meat,...

Details zur Ausgabe

• Verlag: Doubleday
• Erscheinungsdatum: 2022
• Sprache: Englisch
• ISBN 10: 0385547161
• ISBN 13: 9780385547161
• Einband: Gebundene Ausgabe
• Anzahl der Seiten: 304
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: Nicht verfügbar