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American Myopia

"More Money in Your Pocket"

by MATT VIDAL

Ever since formally democratic governments have replaced monarchies, one of the main rhetorical tricks of conservatives of various stripes–including what are called liberals in Europe and are now called Republicans in the US–has been to continually invoke the image of the free individual versus the authoritarian state. Freedom and state power, they say, grow in inverse proportion.

In the impoverished condition of contemporary American political discourse, this antagonism takes an increasingly simplified and distorted form in conservative rhetoric: state power is defined as intervention into the economy, primarily through taxation. Thus, freedom is diminished whenever the government taxes individuals (or even corporations!) or attempts to regulate private industry.

Meanwhile, as critics from Marx to Chomsky have pointed out, private power grows and concentrates in fewer hands. Global mega-corporations, which own or set the terms of business for most smaller corporations and businesses, increasingly control more aspects of life.

Hard working individuals spend years working forty, fifty or more hours per week for companies that increasingly show little commitment to their employees. Private tyranny grows, unabated, while citizens and workers are instructed–by populist rhetoric fashioned by economic elites and their apologists–to fear public tyranny.

And so it goes. In the final presidential debate last Wednesday, October 13, two former Skull and Bones members who had the same debate coach at Yale sought to distinguish themselves. Chicken Hawk, who was fattened on petroleum, tried to portray Hawk, fattened on ketchup, as a liberal–"a Massachusetts Senator!"–who seeks to replace individual freedom with government tutelage. In a move that would’ve made their debate professor proud, I’m sure, Chicken Hawk pulled out the old trick:

"Let me talk to the workers. You’ve got more money in your pocket as a result of the tax relief we passed and he opposed. If you have a child, you got a $1,000 child credit. That’s money in your pocket. It’s your money. The way my opponent talks, he said, ‘We’re going to spend the government’s money.’ No, we’re spending your money. And when you have more money in your pocket, you’re able to better afford things you want."

Money in your pocket? Is the Bush campaign trying to buy the vote? Indeed, this is part of the plan, though it should be noted that most of the money received from tax cuts is actually a loan, financed through deficit spending and to be paid for in the future by us and our children ($200 billion of the 2003 deficit according to the Congressional Budget Office).

Mostly this appeal of Bush, as with his conservative forbears, is rhetorical, meant to invoke the image of struggle between individual freedom and authoritarian government. It can’t be exclusively an attempt to buy the vote any more than it can be simply an appeal to the principle that individuals should get to keep their hard-earned money, for these both contradict reality. For most workers, real (inflation adjusted) wages have been stagnating or declining over the last three decades.

In 1972, the average hourly wage for US private sector, non-supervisory workers was, in 2003 dollars, $17.14. In 2003 it was $15.35, an 11% decrease over 30 years.[1] That’s less money in your pocket.

And the reduction in purchasing power of the average US worker has come not from an increase in the public power of the state, but from an increase in the private power of corporations and wealthy individuals. Corporations, their managers and major stockholders have become fantastically wealthy at the expense of their workers.[2]

Real wages for most workers have been cut along with their social safety net and other social services. But rather than continue to cite numbers on incomes or taxes, I want to make a qualitative argument.

The conservative position is only one view of the relationship between state and individual and, I might add, the view supported by nearly every person who benefits from the status quo. A more complex view of this relationship recognizes that gross economic inequalities, concentrations of power in private hands, pockets of extreme poverty, et cetera, are as potentially damaging to individual freedoms and a healthy democratic society as public tyranny.

Poverty and a lack of opportunities for good jobs generate all sorts of social ills. Wal-Marts drive out community-owned businesses, pay poverty wages, and force suppliers into being sweatshops in order to provide an "everyday low price." General Electric, the eighth largest US defense contractor in 1999, owns NBC and major media outlets; more generally extreme concentration of ownership by for-profit mega-corporations shapes the means of communication to serve its own interests, severely restricting democratic discourse.

A more complex view also sees that while the state may certainly restrict individual freedoms, it may also be an effective, and perhaps necessary mechanism for guaranteeing the opportunity to realize individual potential for large classes or segments of the population. Simply consider the history of women, blacks and other minorities. A strong state is needed to protect disadvantaged and unprivileged populations from powerful, entrenched interests and to counter the private tyranny that develops in a capitalist market society.

Consider Teddy Roosevelt’s implementation of anti-trust legislation in the face of massive corporate monopolies or his Federal regulation of food and drug purity; Franklin Roosevelt’s establishment of social security and a "welfare state" that laid the foundation for the "Golden years" of post-war US economic growth, including rising real wages until the 1970s; and Eisenhower’s use of the US military to enforce integration of schools in Little Rock under Brown v. Board of Education in 1957.

Finally, a more complex view realizes that modern economy and society are themselves extremely complex and interdependent, that the US is a global economic powerhouse because of a strong, well-funded state combined with the collective labor of its workers to provide the foundation for prosperity.

This idea is succinctly expressed by the second wealthiest person in the US, Warren Buffet: "society is responsible for a very significant percentage for what I’ve earned. If you stick me down in the middle of Bangladesh or Peru or some place, you’ll find how much this talent is going to produce in the wrong kind of soil, I would be struggling 30 years later, I work in a market system that happens to reward what I do very well, disproportionately very well."[3]

More generally, it is not simply a "free market" that provides the creation of wealth and prosperity, but what supports this so-called free market: a well-funded government able to enforce property rights and ensure order and safety, and also to provide infrastructure from basic research and development to sewer systems, highways and public spaces that increase the efficiency of the private sector and make our communities nice places to live and work.

As two recently released reports just confirmed, one from the World Bank and one from the World Economic Forum, high tax rates are compatible with a competitive business environment. In both reports Finland, Sweden, Denmark and Norway, countries with some of the highest taxation rates and most extensive welfare states in the West, were ranked among the most competitive economies in the world.[4]

The US also ranked among the top, placing second behind Finland in the World Economic Forum report. But some key differences should be kept in mind: while both economies are equally competitive, only one society has universal health care, four to five weeks annual vacation for beginning workers, publicly funded childcare as a right for all parents, paid parental leave for all working mothers and fathers [5], free high-quality university education, low economic and social inequality, and a functional social safety net.

The conservative (anti-tax) view of the state is a form of American myopia.

MATT VIDAL is pursuing his doctorate at the University of Wisconsin in Madison.

He can be reached at: mvidal@ssc.wisc.edu

[1] US Bureau of Labor Statistics, author’s calculations.

[2] United for a Fair Economy, "Ratio of CEO Pay to Average Worker Pay Reaches 301 in 2003".

[3] Chuck Collins, "Google Wealth Built on Uncle Sam’s Shoulders," CommonDreams.org, August 23, 2004.

[4] Elizabeth Becker, "Nordic Countries Come Out Near the Top in Two Business Surveys," New York Times, October 14, 2004.

[5] Compare the Finnish system of parental leave .