Saturday, August 28, 2010

Is America Headed Toward Social Democracy?

by Michael Kaplan

Jacksonian political unrest in 2010 is driven by bread-and-butter economic issues as much as by issues of culture and politics. Sociologist and prognosticator Joel Kotkin makes the case that this is part of a worldwide resurgence of economic inequality and class conflict as globalization moves into fast forward. Middle- and working-class Americans are being displaced by technology and the outsourcing of jobs to low wage countries in the developing world, even as the same process boosts productivity and creates new wealth. President Obama and liberal Democrats have been unable to harness this economic discontent. Indeed, the administration and its big spending liberal policies are seen as the problem. The president and his elite liberal supporters don’t connect with Jacksonian economic concerns—tax relief, private-sector job creation, and fostering small business—anymore that they do with Jacksonian cultural and political passions. Kotkin argues that this again has to do with the nature of the liberal Democratic base of elite professionals and urban poor for whom these issues simply don’t resonate. The Tea Party movement, by focusing on fiscal responsibility and putting less emphasis on divisive social issues, can strengthen the Republicans’ populist appeal for middle income Jacksonian voters, which would be the key to victory in the 2010 midterm elections.

This leads me to the issue of capitalism and social democracy. Americans now face a choice as to what values they want our society to foster: Jacksonian values of rugged individualism, liberty, small government, risk-taking and the pursuit of happiness, or European social democratic values of extensive social safety nets, big government, social/economic entitlements, safety and security. There are trade offs with either path. American laissez-faire capitalism and Jacksonian rugged individualism have always had a hard-edged streak, perhaps one could even call it social cruelty. Individuals had to measure up to the demands of pursuing happiness in a competitive society or risk falling behind. General Patton famously said that America loves a winner and will not tolerate a loser. Ronald Reagan expected (and Rush Limbaugh expects), Americans to live up to the heroic deeds of their frontier-conquering forbearers. This is especially true for American men who have been losing the most ground in the post-2008 economic downturn.

Rush Limbaugh insists that liberals are attracted to social-democratic statism, and are actually afraid of freedom because they are afraid of failure. Now Rush does have a tendency to exaggerate and use colorful allegories to make his points, but he does offer a valuable insight. A system based on political and economic liberty allows individuals to succeed, sometimes beyond their wildest dreams. It also allows individuals to fail, sometimes catastrophically. It is the responsibility of you, the individual, to take advantage of the opportunities provided by a free society to succeed. This means getting yourself trained and educated to develop marketable skills and build the psychological fortitude and determination to work hard and do what it takes to achieve one’s life ambitions. It helps to have something you’re passionate about doing to motivate you to work your hardest, be creative, and be the best you can be. You always need to pursue excellence. Individuals engaged in the capitalist creation of wealth not only enrich themselves but others around them as well. They also put competing individuals and companies out of business. Capitalism is not a zero-sum game; often, though not always, it is a win-win. But if you can’t or won’t do what is needed to compete in the pursuit of wealth and happiness, then the failure is your responsibility and you’ll get thrown under the bus.

American liberals and European social democrats, in contrast, reject the idea that some people will succeed and some will fail when allowed to pursue happiness. They want much greater government control and management of society; the control and management to be provided by the technocratic elites. Such a system, its supporters believe, will do away with winners and losers in society by putting a cap on success, cushioning failure, and providing a basic level of social services and support for all. Such a society, liberals and social democrats believe, will be more just, fair, and equitable. Rush, on the contrary, argues that a social democratic society would be nothing less than an assault on both the individual’s pursuit of excellence and liberty. Only the mediocre and the lazy would benefit from social democracy. And again this will come with a trade off in a loss of decision making, self determination, and liberty for the individual.

What this boils down to is the core weakness of social democracy, what Charles Murray called the “Europe syndrome” in a speech before the American Enterprise Institute in March 2009: “It drains too much of the life from life.” Murray has plenty of good things to say about social democracy Europe-style. It provides a nice materially comfortable life, with not-too-demanding jobs guaranteed by the government, generous social welfare benefits, long vacations, and plenty of high culture and popular entertainment. In the years since 1945 western Europeans have come to expect lives freed from the stress and striving of American life or the emerging modernize-at-all costs capitalist societies of East Asia.

But this is also social democracy’s downside, and Murray argues, its fatal flaw. “To become a source of deep satisfaction, a human activity has to meet some stringent requirements. It has to have been important (we don't get deep satisfaction from trivial things). You have to have put a lot of effort into it (hence the cliché ‘nothing worth having comes easily’). And you have to have been responsible for the consequences.” What a progressive government actually tries to achieve with its social policies amounts to “taking some of the trouble out of things.” Sometimes, as in the case of police or fire protection, this is a very good thing. Yet, Murray goes on,

Every time the government takes some of the trouble out of performing the functions of family, community, vocation, and faith, it also strips those institutions of some of their vitality—it drains some of the life from them. . . . When the government says it will take some of the trouble out of doing the things that families and communities evolved to do, it inevitably takes some of the action away from families and communities, and the web frays, and eventually disintegrates. . . . Taking the trouble out of the stuff of life strips people—already has stripped people—of major ways in which human beings look back on their lives and say, “made a difference.”
If America goes down Europe’s path, the path Barack Obama and the post-1960s Aquarian liberal Democratic Party wants to take her, America will follow Europe into decline. The only way to avoid this outcome, Murray insists, is for Americans to hold on to what makes their nation different: American exceptionalism and its signature assumption that individuals are the masters of their destiny.

So American society has been able to maximize liberty, create new wealth, and remain at the cutting edge of scientific, entrepreneurial, and technological innovation. But this has come at the cost of allowing a certain percentage of people to be thrown under the bus. Social democracy, which is where Barack Obama would like to lead us as evidenced by his plan for a government controlled health care system, might make a America a more equitable and perhaps a more decent society. Many of the rifts in the social fabric could be healed. America would finally tolerate a loser. But it would come at the cost of diminished vitality, diminished social mobility, diminished innovation and dynamism, and an overall loss of individual liberty and the ability to create new wealth. And this would lead to America's economic decline and the loss of its ability to project power in the world and stand up for liberty. Power and initiative in world affairs would pass to China, which has no qualms about throwing millions of its own people under the bus—much more than Americans would ever tolerate. After all for all our competitiveness and love of winners, Americans are also a very generous people who, through philanthropy and volunteerism, often work to help losers get out from under the bus, get back onto their feet and into the game. So the choice we face is between vitality and security, national and individual greatness or safety and avoidance of risk in a welfare state. Can we as a nation find a way to balance society’s need for creative dynamism and the pursuit of excelelnce with its need for stability and security? It's up to the American people to decide. Charles Krauthammer and David Brooks have recently discussed these themes and their implications for America in the 2010s in some interesting articles.

We may no longer have a choice. This year’s economic meltdown in Europe, starting with the bankruptcy and violence in Greece, is pretty damning evidence that the European model of social democracy cannot be sustained. Rush Limbaugh and Mark Levin have argued that the public sector as it now exists (Walter Russell Mead calls it the “blue beast”) is unconstitutional and should gradually be abolished. The government—federal, state, and local—is primarily responsible for maintaining law and order at home and defending the nation against threats from abroad, otherwise leaving the American people alone and free to pursue happiness. This means that government services should be limited to the police, fire and emergency services, and the military, which provide the security framework for ordered liberty. All other services, according to this line thinking, should be left to the private sector; and what the private sector doesn’t want to do doesn’t need to be done. More realistically, Rush has suggested that public sector salaries and benefits be brought in line with those in the private sector. This would go a long way toward reducing state and federal indebtedness without having to lay off teachers, firemen, and other public sector employees.

While Jacksonians do want to reduce the size of government, they would not go as far as Rush or Levin would like. Most people want a certain level of public services—education, sanitation, fire protection, etc.—that the private sector might not be willing or able to provide. An ABC News/Washington Post poll of 1,083 Americans taken in January found that 58% of those polled preferred a smaller government with fewer services. What they really mean is that they want somebody else’s services cut while they keep the services they benefit from. Jacksonians believe in limited government, but not so limited that it can’t perform a vital function: promoting the prosperity and well being of the American middle class (the Jacksonian folk community), removing any artificial or unnecessary roadblocks to their pursuit of happiness. Or, as Walter Russell Mead put it, “Jacksonians . . . have long believed that a central function of the American Government is to transfer wealth from the public coffers to the middle class.” In the nineteenth century this meant low taxes, cheap and plentiful land, and the ethnic cleansing of the Indians. Since the 1930s it has meant middle-class entitlements. Examples of such government policies range from the Homestead Act and pensions for Civil War veterans in the nineteenth century, Social Security and mortgage interest deductions in the twentieth and twenty-first centuries. Take note that Jacksonians believe in entitlements for the middle class—those who have pulled their weight, worked hard, played by the rules, created wealth and made a contribution to society. Jacksonians most emphatically oppose entitlements for the lower classes and the non-working poor who they see as a drain on society, who have not done anything to earn such public consideration. 

America does need a functioning public sector despite what some conservatives might think. The public sector provides the services and infrastructure that are the bulwarks of the private sector. This is a point that James Fallows makes in a recent Atlantic Monthly article. “I have seen enough of the world outside America to be sure that eventually a collapsing public life brings the private sector down with it.” Such bulwarks as public schools, post offices, roads, public parks, Social Security, Medicare, (and of course the police and military) make life more pleasant and secure for the average person and allow the private sector to operate democratically for the benefit of all the people, not just for the elites who control infrastructure and security as is the case in many developing nations. The dystopian 1982 science fiction movie Blade Runner (one of my favorites, where Harrison Ford hunted down renegade androids in a chaotic urban jungle) is a stark warning of what a society without a functioning public sector would look like. People cannot create wealth and enjoy the fruits of their labor without a certain level of societal security. Public and private abundance go hand-in-hand.

This is why Ed Koch, the colorful former mayor of New York City, who at a feisty eighty-five speaks out for what’s left the old Jacksonian tradition (Andrew and Henry M. “Scoop”) in the Democratic Party, said in an interview with Aaron Klein on WABC radio (August 15, 2010) that he will stay a Democrat. Though he vehemently rejects the Obama administration’s foreign policy, especially on the issues of Israel and Islamic terrorism, Koch insists that he simply cannot abide the conservative Republican domestic philosophy. Describing himself as a “liberal with sanity” in the tradition of Scoop Jackson and Hubert Humphrey, Koch declared “I believe that the Democratic philosophy, which is we will give a helping hand to those who need it, is far better than the Republican philosophy, which I crudely say, so to speak, is if I made it on my own you’re going to have to make it on your own.” Klein pointed out that unfortunately for Koch, the Democratic Party had been hijacked by the radical left and was no longer the party of Jackson and Humphrey; that today’s Democrats are about spreading the wealth around and imposing socialism whether the American people want it or not.

So the issue dividing liberals and conservatives is how extensive the public sector needs to be to secure liberty and prosperity and enhance the private sector without crushing them. How much of a helping hand can or should government extend to people without undermining their individual initiative and self-reliance or bankrupting the economy? And while I don’t agree with Rush Limbaugh or Mark Levin when they call public sector employees leeches who suck the blood out of the private sector (I am one myself), the point is that the private sector creates the wealth that funds public services. The United States will not go the social democratic route. All of us in America (and in Europe), in both the private and public sectors, who’ve gotten used to the good life are going to have to work harder for less money and fewer benefits to get the great capitalist wealth creation machine working again.

P.S. For all you young people starting a new semester in higher education (including my own students), the party’s over. Time to put down the beer bongs and get serious about your education while you can.  When you graduate you’ll face a long and bumpy road and you’ll have to work harder than you ever imagined in the new world of global capitalism. If you don’t take advantage of your time in college and develop your skills and the psychology to keep on learning and re-inventing yourself in an ever changing world, you will get thrown under the bus. And the bus will be driven by a hard-working, driven-to-succeed-at-all-costs guy or girl from India or China.

© 2010 Michael Kaplan