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2011 was not a good year for the public image of ruling classes around the world; even Time Magazine named their nemesis, “the protester,” person of the year. But the pillars of the ancien régime still feel secure. Why shouldn’t they? They own the state (and the political parties that contend against each other to govern through it), and the media still do yeoman’s work in their behalf. Their hold over cultural institutions may not be quite as stifling, but it is very significant; and for every university where there are flickers of dissent, there are a dozen think tanks that do their bidding.
But these are human institutions, not forces of nature; they depend upon human beings to keep going. In a democratic age, this means that maintaining the status quo requires the support or, at least, the acquiescence of the vast majority.
That indispensable condition now seems less secure than it has been for decades. But it is anybody’s guess, at this point, whether we are living through the beginning of a sea change of historical proportions, or whether Occupy Wall Street and similar movements are just minor perturbations that the old regime will find a way to absorb or deflect. This will become clear in due course.
The answer depends on how the Occupy movement evolves and especially on how it addresses a question that it has so far wisely put off: what does “the protestor,” the American one anyway and his or her counterparts in other declining capitalist countries, want?
Raising that question four months ago, or even now, would have risked marginalizing a growing popular insurgency united mainly by an awareness, based on lived experience, of neoliberalism’s deleterious effects. But the question cannot be put off forever, and the time is certainly right to begin to reflect on the answer. Already there are signs of misunderstandings coming to the fore, so there is some urgency about this task.
* * *
Among those who are working hardest to make a sea change real, equality has emerged as the principal motivating ideal. It is not hard to see why. Neoliberalism has exacerbated inequalities to such an extent that decades worth of progress in making life better for the vast majority has become or is on the point of becoming undone. Enhancing equality, or diminishing inequality, therefore has a defensive – indeed, a conservative — aspect. It is a way of fighting back against the transformations wrought by economic elites and the politicians who serve them.
But restoring past levels of inequality is hardly the goal of those who are now actively defending egalitarian ideals. For them, correcting for the retrogressions of recent decades is only a first step in a broader project that aims at advancing equality to unprecedented levels. OWS is not just a conservative movement in the true sense of that term; it is also, more importantly, a progressive one, again according to what the word really says.
[In a world where Republicans are “conservatives” and Democrats, some of them anyway, are called “progressives,” those words plainly no longer mean what they say.]
OWS’s egalitarianism has emerged spontaneously. But as egalitarian ideals take hold of the consciousness of ever larger swathes of the population, and as the movement moves from consciousness raising to a more concertedly political effort to change the world, muddled understandings of what equality involves risk leading it astray.
For example, it is widely assumed, and sometimes expressly argued, that obscenely high levels of executive compensation are a major cause, perhaps the principal cause, of the miseries afflicting the ninety-nine percent. These inequalities are certainly offensive. But, for reasons to which I will return, they are more a symptom than a cause of the problems afflicting those who are coming to see themselves as the ninety-nine percent. It is important not to get this wrong.
To that end, it can be helpful to recall the basic contours of prevailing understandings of equality or rather of the moralized notion of the idea, according to which, as Thomas Jefferson put it, “all men (sic)…are created equal.” A moralized purchase on equality makes equality an ideal to strive to attain. This bears only an attenuated connection to non-moralized conceptions, such as the one people have in mind when they say, for example, that seven plus five equals twelve.
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There are several moralized senses of equality that figure in modern democratic theory and practice. The most venerable – political equality, equality of citizenship – was already established when Jefferson wrote equality into America’s Declaration of Independence. The basic idea is that political rights and liberties – particularly, rights to participate in collective decision making and to equal treatment in judicial processes — ought to be distributed equally and to the greatest feasible extent to all members of the political community. This is an ideal to which our republic has always officially adhered.
It is also an ideal that our republic has never come close to realizing. We no longer allow slavery and, with a few (arguably justifiable) exceptions, everyone over eighteen years of age now has the right to vote. But we are a long way still from equality of citizenship except in a strictly formal sense. Hedge fund managers and corporate potentates get only one vote, like everyone else, but they have more political influence, a lot more, and therefore affect collective decision making more than others do. Thanks to our Supreme Court’s wrong-headed jurisprudence, the situation lately has gotten even worse.
We have been backsliding too in the Bush-Obama era on the other key component of political equality, equal justice under law – in ways that Glenn Greenwald’s With Liberty and Justice for Some (Metropolitan Books) makes painfully clear. The problem now is not just the one that has
always been with us — that the rich can hire more and better legal representation than everyone else, so that the system works better for them than for others. It is also that those who are too big to fail or too politically important to fall are now beyond the reach of legal accountability altogether.
But however much hypocrisy and denial have clustered around the idea from the moment of its conception, there has always been a strong consensus in favor of political equality, at least in principle. For this, we have our post-feudal origins to thank.
One could argue that to achieve full political equality, inequalities of income and wealth would have to be severely curtailed. This is an old argument, going back at least to Jean-Jacques Rousseau. But it is not an argument people now in motion, people in OWS and similar movements, are raising. They do decry the corruption of our political regime, but on other grounds and for different reasons.
This is wise because, no matter how much the world would have to change for political equality fully to come into its own, the ideal itself is limited for reasons that scores of nineteenth and twentieth century socialist, social democratic and laborite thinkers made clear. The problem, in short, is that political equality hardly exhausts what the idea of equality implies, and that to act as if it does can and typically will intensify more debilitating inequalities. This was a theme of some of Marx’s writings in the 1840s, and it remains pertinent to this day. Advancing towards full political equality is an estimable goal, but it is only part of the egalitarian vision. The part should not be confused with the whole.
Equality of opportunity is another, related ideal around which there is also a consensus – at least to the extent that no significant strain of public opinion would declare itself opposed. But in this case there are far-reaching disagreements about what the ideal involves that have nothing to do with willful blindness or hypocrisy. There are some who think that equality of opportunity is realized if no one is prevented by law or custom from competing for rewards and offices. For others, equality of opportunity requires correcting for historically disabling impediments to success in those competitions.
This difference is at least part of what the debate over “affirmative action” was about. That controversy has faded – partly from weariness, and partly because its successes and failures have rendered this much-discussed remedy all but moot. On the one hand, affirmative action policies have opened up careers in business and the professions to women and people of color; problems remain, of course, but they are nothing like what they were. On the other hand, affirmative action has done precious little to counter institutional racism, and not nearly enough to counter cultural and institutional factors that perpetuate the subordination of women.
In this case too, a way to enhance opportunities for all – substantively, not just formally – would be to curtail inequalities of condition, along with enhancing public – non-market – provision of the resources that enable persons to realize their freely chosen projects and plans of life.
Ironically, though, it is mainly right-wingers who defend strictly formal understandings of the concept who are most vocal nowadays in calling for an equal opportunity society. Perhaps they assume that their purchase on equality of opportunity is unassailable. This is not unreasonable. Going as far, but no farther, than removing legal and customary impediments to competitions is closer to the letter, if not the spirit, of the French Revolutionary ideal of “careers open to talent” than affirmative action is. It also makes sense for defenders of today’s ancien régime to adopt what was a revolutionary objective more than two centuries ago. Because revolutionaries won back then, unequal opportunities now depend mainly on differences in income and wealth. A conception of equal opportunity that makes no attempt to correct for the effects of these differences on individuals’ abilities to compete locks existing inequalities in place.
What this shows is not that equality of opportunity is a flawed ideal, but that, even more than political equality, it articulates a partial conception of what equality is about. Like political equality it must be part of any comprehensive egalitarian program. But taken in isolation it can actually work to equality’s detriment.
It is therefore fortunate that those spontaneous egalitarians now in struggle against the status quo have assumed a different and more direct focus – on equality of condition itself.
* * *
Not long ago, a debate raged in philosophical circles over what egalitarians (in the sense now in question) want distributed equally: resources, well being, or any of a variety of more subtle hybrids and alternatives. This was a debate of philosophical not political interest because whatever the favored answer might be, the practical consequences are the same.
This is because the only feasible way to implement one or another egalitarian ideal is through distributions of income and wealth, and because the most effective distribution, regardless of the ideal, is bound – in practice, if not in theory – to be an equal one. Suppose that the alternatives in contention are just resources and well-being. Because people are different, resources affect levels of well-being differently. An equal distribution of resources will therefore result in an unequal distribution of well-being and vice versa. This can be of some consequence if the idea is to develop a full-fledged theory of what equality of condition is. But it is hard to imagine a distributional regime that could be sensitive to the difference. In all imaginable cases, the most suitable egalitarian distribution would be an equal one. I will presently suggest that wealth inequality does more harm than income inequality, though it is the latter that has received the most attention, and that is therefore most in the public mind.
There are many ways to diminish income inequality. The most tested and effective involve bringing the bottom up through such measures as minimum and living wage laws, and legislation enabling labor unions to organize and bargain. Redistributive taxation is another way. In principle, one could tax all income at a rate of one hundred percent and then distribute it equally. Conventional wisdom has it that this would create incentive problems that would diminish productivity overall in ways that would make everyone worse off. No doubt, there is some truth in this contention, though one might wonder whether, even in consumption besotted societies like our own, pecuniary incentives are the all-powerful motivators they are cracked up to be.
For decades, the right has endeavored, with great success, to tarnish redistributive taxation with the taint of liberalism and social democracy, as if these are fates worse than death. Perhaps this is one reason why calls to cap salaries at the top have lately become so popular.
Those salaries have gone through the roof in recent decades. Even the President, when he deems it opportune to assume a “populist” guise, finds this target hard to resist. Thus, in his much touted Osawatomie Address, he decried how “the typical CEO who used to earn about thirty times more than his or her worker now earns 110 times more.”
This is outrageous certainly. But how much does it account for the miseries afflicting the ninety-nine percent? On the face of it, not very much, because there aren’t that many “typical” CEOs. Recent trends in executive pay are disturbing on many dimensions, but their effect on the problems with which the ninety-nine percent must contend should not be exaggerated. Those problems have more to do with the decline of the labor movement and the affirmative state than with an income distribution gone out of whack.
Needless to say, much good can come from focusing anger on CEOs and other “malefactors of great wealth.” They deserve no sympathy. But, by fixating on how much money they make, there is a danger of strengthening the movement’s conservative aspect at the expense of its progressive potential. This is already happening as nostalgia for the days when Republicans were like Ike is everywhere on the rise. To be sure, the world would be a better place if Ikes replaced Newts. It would be a better place too if Humphrey-style liberals replaced Blue Dog Democrats. But this is hardly what OWS is about.
Those who blame high CEO salaries for everything would do well to reflect on why those salaries have grown to the extent they have. There are basically two possibilities. One is that market ideologues are right; that CEOs deserve what they get because markets reward productive contributions correctly. This would seem hard to reconcile with the data on salary levels; after all, CEO work these days isn’t all that different from what it used to be and it is unlikely that CEOs are working many more hours or more intensively than in the past. The American data is also hard to reconcile with data from other countries where the disparities are less pronounced.
But defenders of the existing system have rejoinders available that cannot easily be dismissed. In the 1950s and for a long time thereafter, capitalist firms, the big ones especially, were like cultural institutions. They occupied relatively stable niches in the economic order, and what went on in their precincts was fairly routine. They needed to be administered, and this can be done more or less well. But basically anybody who is up to the task can do the job satisfactorily – at least to the extent that stockholders will get pretty much what they consider their due. Not anymore, the argument goes: thanks to globalization, the decline of manufacturing, and the ascendance of the financial sector, corporate governance has become a risky business. The rewards of getting it right can be enormous; but so can the costs of getting it wrong.
To the extent that getting it right or wrong depends on skill, not brute luck, small differences in skill levels therefore become consequential for stockholders, and the market for CEOs takes on a winner-take-all character. It is the same in professional sports. Many people can play basketball quite well, but the difference between them and, say, Kobe Bryant can mean everything for a team’s chances and therefore for its earnings. Salary differentials reflect this fact of economic life.
If CEOs make less in some foreign countries, it may be because the competitive pressures are different, but a more important factor is the existence of social norms that counter market pressure. There are labor markets even within the United States that are similar. For example, academic job markets have a winner-take-all aspect too, especially at the upper end, where competition for prestige and external funding is intense. But salary differentials are only on the order of three or four to one, and have more to do with seniority than anything else. Norms that hold top salaries down have eroded in recent years, as one would expect in a market-driven culture. But they are still quite effective.
The other possibility is that CEOs and others in the upper echelons of corporate governance are cheating shareholders – mainly by appointing boards that then award them salaries higher than they deserve (in the very tendentious sense that market distributions can be thought of as deserved). No doubt, this happens to some extent; in a commercial culture, everyone feathers his or her own nest. But then that’s the shareholder’s problem, and it is relevant that they don’t seem to mind. Maybe they think they are getting their money’s worth when they are not. But even were that the case, is it really an egalitarian’s business to straighten them out?
* * *
One lesson that follows is that, however outrageous executive compensation has become, and whatever its consequences for measures of income inequality, bringing the bottom up is more important for the well-being of the ninety-nine percent than bringing the top down. It is unhelpful at best to obsess over how much CEOs take home; and it can be distracting. Their salaries are more a symptom of the problems OWS is fighting than a cause.
Income is one thing and wealth another, though the modalities of executive compensation, especially in the financial sector and in highly financialized industries, tend to blur the distinction. But differences in income have always led to differences in wealth, especially over time and across generations. Another lesson that OWS and related movements are only now beginning to bring into view is that, however important the struggle for income equality may be, the struggle for wealth equality matters more – because it touches more directly on the causes for the decline in life prospects of the ninety-nine percent.
As that awareness takes hold, we can look forward to a renewed interest in the causes of the inequalities afflicting us, and the reemergence, after decades of eclipse, of a determination not just to rectify their ill effects, but to undo the causes themselves. This entails taking aim at economic systems based on private ownership and organized through market relations – in other words, on putting capitalism itself in question.
After the historical experience of Communism and Social Democracy, and especially after the demise of the former and the de facto collapse of the latter – in conjunction with decades of ideological struggle in which pro-capitalists have held almost all the cards – “socialism” has become the “s-word” even in ostensibly progressive circles. This is bound to change too, as the logic of the OWS revolt unfolds. But, as with the idea of equality itself, good instincts are not always enough for reaching a level of clarity sufficient for keeping the movement on track. It is therefore urgent that militants start thinking again about what the alternatives to capitalism are. The time is already past due for putting socialism back on the agenda.
Despite a century and a half of socialist theory and practice, the sorry fact is that at the time that socialism fell off the agenda two or three decades ago, we had very little notion of what the idea involves or of what socialism can be. We know a lot about capitalist property relations, but we have only a dim understanding of what socialist alternatives to capitalism are apart from state ownership and Soviet-style central planning.
Neither are any longer poles of attraction; and, for good reason, neither are likely to become so again. But state ownership and central planning hardly exhaust the possibilities. It is high time to start thinking about what alternative possibilities there might be, and about how to get from here to there. Whatever happens with OWS in the near future, perhaps its most enduring legacy will be to have set those who struggle for a better world back onto that task.
ANDREW LEVINE is a Senior Scholar at the Institute for Policy Studies, the author most recently of THE AMERICAN IDEOLOGY (Routledge) and POLITICAL KEY WORDS (Blackwell) as well as of many other books and articles in political philosophy. His most recent book is In Bad Faith: What’s Wrong With the Opium of the People. He was a Professor (philosophy) at the University of Wisconsin-Madison and a Research Professor (philosophy) at the University of Maryland-College Park. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, forthcoming from AK Press