The sky has been overcast for decades. Since 1973 the income, working conditions, and life prospects of common people in the United States have been ground down. In 2008 the storm arrived. A huge recession poured down sheets of unemployment, took away health care from four million more people, and pushed the carrot of retirement comfort five or ten years into the future. There is a heavy anxiety that floods are gathering somewhere up the ravine.
American history has entered a new era. For almost 200 years after the American Revolution of 1776, capitalism operated to develop our productive powers. Oligarchs of wealth took most of the gains from the beginning. That’s the way capitalism works. Still, whenever common people put up a fight, they won something back for their labor.
The oligarchy of the rich is taking it all back.
- Social Security was won in 1935. Today, a Democratic President sets up a commission of Scrooges pressing hard to cut it to shreds and privatize it.
- The real hourly wage is no higher now than in 1973; it takes both partners working full time to maintain a family at the standard one working parent provided 40 years ago; and the inequality of income has widened to a historic extreme.
- Medicare for people over 65, won in 1965, should be extended to everyone, but the oligarchy passed a law dictating that we must buy private health insurance.
The political front men for the oligarchy of wealth have nothing to offer. The liberal contingent proposes ever-weaker versions of incremental reform, but nothing comes through, or it turns sour like Obamacare. The reactionary demagogues simply demand unbridled power for corporations, insisting with vigor and sophistry that corporate economic dictatorship will bring the good life.
Politics follows the economic trajectory. It is now about what we lose, not what we gain. The economic system has no more room for substantial reforms. There has not been a wave of major change since the 1970s.
The avenues for redress in the regime of U.S. capitalism are dead letters. We cannot get what we need by legislation nor by electing new candidates, let alone from the courts. The country might go through an experiment with a third party, but it will not work. In the past one of the two established parties would “steal” a third-party reform platform; not now. Occasionally, the oligarchy would realign the two major parties for reform; not now.
The Constitution might change by amendment, but it would be for the worse. The United States constitutional regime, with a lower-case “c,” rots day by day. By 2000 the oligarchy of the rich tossed aside formal democracy in front of the entire country. The Supreme Court, instead of simply telling Florida to count all the votes for President, decided to pick him by their own majority of five justices to four.
Eight years later voters elected a President who promised change you can believe in, including universal health care and real regulation of Wall Street. He was given a party majority in both houses of Congress — and proceeded to show that, unlike Bush, he would get things done for the oligarchy. The White House cozied up to health insurance and drug corporations while it froze out advocates demanding to make the case for Medicare for All.
Wall Street got a bailout while employees and retirees saw their security accounts for old age take a hit of 25 to 30 percent. The Federal Reserve poured all the monetary liquidity that financial vampires wanted, but the spirit of sacrifice was invoked to make a living wage for General Motors workers a thing of the past.
The problem is not the particular man who became President. We know now that his biggest funding came from hedge funds and other wheeler-dealers in paper by the billions. He rose in four short years from an obscure state legislator to President of the United States. This could only happen because he had powerful sponsors and because all sections of the oligarchy know that “mobilization” of common people must be managed like the launch of a consumer electronics device. U.S. politics today approaches the style of imperial Rome, openly mocking all forms of democracy that have existed from ancient Athens to the last century.
Capitalism once had room for reform. Common people fought for an eight-hour day, trade unions and social security, for clean air to breathe and safe machinery to work with. The oligarchs switched to co-optation and management of the details when the cost of blocking reform got too high. Avenues of growth beckoned, and masses of common people were needed to do the work.
No more. Technology marches on, but wide economic development under capitalism is over. A hundred years ago a vast industrial complex spread over several states around Detroit, creating the automobile era and tens of millions of jobs. Fifty years ago there was a semiconductor and electronics revolution, but it created a tiny enclave called Silicon Valley and, for a brief time, cheap assembly jobs in low-wage Asia.1
Program of a New Commonwealth
Popular movements seem terribly quiet, considering the awful stress that tens of millions of families suffer today. People are absorbing the fact that the only way out is to replace the economic order.
With what? A program that solves the epochal economic impasse. It turns out that study of the foundation of any economy — the labor of common people — makes the programmatic solution clear. As a German scholar of the nineteenth century said, such a “problem arises only when the material conditions for its solution are already present or at least in the course of formation.”
The New Commonwealth program has three major principles: nobody shall be poor and nobody shall be rich; everyone is guaranteed a job; and all corporations are re-chartered to require genuine economic service.
No Rich and No Poor
Capitalism, while it developed and glorified the powers of machinery, also spent the last 400 years using people like machines. That makes them cheaper and easier to control. Of course, employers needed human insight, experience, and intelligence; they stole it on the sly from the masses who do the work and then confined skill to as few persons as possible. The time has come to turn this situation around, making everyone equal participants in work and its fruits.
We can immediately abolish desperate poverty and obscene riches with simple declarative legislation: a livable minimum wage, progressive taxes, and relief programs. However, taxing back enough from the rich is not a stable solution. The challenge of an entire era is to steer the economy, education, and culture so that everyone really earns approximately the same wage. The principle of no rich and no poor is the foundation of a new social order. When employers know that the minimum wage will go up every year, they will change the mix of jobs and the nature of work. That leads to a reconstruction of schooling and a host of other social sectors.
While capitalism took several generations to industrialize the economy, the long-term project of the New Commonwealth will bring forth the wonders of a genuine post-industrial economy by concentrating on people themselves, preparing everyone to join the economy on equal terms, qualified for good work, with craft pride exercised on the basis of advanced technology.
Huge amounts of grunge work can be automated, and we will each do our share of the remaining stub of it at good pay. Already we have the resources. As of 2007, “If we took all the personal income in this country and paid it equally to everyone who wants a job, each of us would earn $72,000 a year for a full-time job. And by the way, there is enough left over to double all Social Security benefits, too.” 2
The Inalienable Right to Employment
We have known for 75 years how to run a modern economy at full employment. Swedish and other governments explored the way to the policy tools in the 1920s. John Maynard Keynes, an aristocratic English professor at Cambridge University, wrote it all up in 1935. However, the oligarchs never let the economy approach full employment for more than a few years at a time. No policy scheme can overcome the irreconcilable clash between profits (the source of the oligarchs’ riches) and wages (the sustenance of common people). A New Commonwealth, eliminating that clash, includes the inalienable right to a job for everyone except the disabled and the fully retired.
With full employment, with plentiful programs for changing from one occupation to another, and the narrowing of wage differences according to the principle of no rich and no poor, we can welcome automation.
Re-chartering Corporations for Economic Service
All modern economies have large organizations for production, service, and distribution. In the United States corporations are more than that. They are the wealth faucets of the rich. That’s what dividends, stock market games, and the ridiculous compensation packages of top executives are for.
Corporations are created by charter of the state. In a New Commonwealth the charter requires that corporations make and sell goods and services on a breakeven basis. If profits occur, they go to a social investment fund; conversely, when a corporation loses money for too long, it is reorganized. Since everyone is guaranteed a job, the changes can be worked out without mass suffering.
The three-point program of the New Commonwealth announces common people’s claim to society. It benefits 90 percent of the population. The economy of the rich must go in order that a New Commonwealth can replace poverty with comfort, dead-end jobs with liberated work, and empty drift with ten thousand glorious projects.
The New Commonwealth program is not vague phrases. There is a place for slogans like genuine democracy and production for use not profit, but they do not give much guidance. On the other hand, the New Commonwealth is not a detailed blueprint, and its creations will be as novel as they are glorious.
A remarkable quality of the New Commonwealth program is how specific and operational it is:
- What is the spread of unequal earnings? That tells everyone how much we have to do in order to put common prosperity on a solid, irreversible historical foundation.
- We already know how to generate and maintain full employment.
- Corporations still must find customers, but the simple change from maximizing profit to selling all you can on a breakeven basis transforms their economic character.
The biggest objection is obvious: “Those are revolutionary changes. They are not going to happen anytime soon.” Indeed they will overturn a rotten social order. The blunt fact is that the era of major reforms is over. The era of fights for one improvement after another, both benefitting common people and opening new growth paths for capitalism, has concluded. Struggle for particular reforms will continue, although more often movements are on the defensive against yet another cutback, yet another diversion of resources from the general welfare to prizes for corporations and Wall Street.
What about now, when establishment politics get worse every day, and every attempt to spark a prairie fire seems to be just a wasted match? At least we have time to answer the question, “What program do we need?” That is the question to ponder, not “What is acceptable to the oligarchs?”
Upheavals will come, astonishing us all. In order to avoid dead ends and maneuver on a complicated battlefield between the oligarchs and the common people, we need to determine our basic program.
They plunder, or we run a New Commonwealth. There is no other way.
2 No Rich, No Poor, p. 13.
Charles Andrews’ latest book is No Rich, No Poor: Why a Failed Economy Must Give Way to a Program of Common Prosperity.