For Each Social Advance, an Economic Price Paid
Almost as an antidote the onset of holiday cheer, the 2014 budget deal was released in December as a sort of deflationary tactic—lest the masses get their hopes too high. After all, the ruse of declining unemployment has been seen through by those who have seen it all before, and is being held on suspicion by the rest of the country, since it fails to see signs of this so-called recovery in any other areas of the economy. Naturally, progressive elements—those huge coastal swaths of Starbucks America that bookend our heartland Wal-Mart America—cling to even the most dubious shred of optimism emerging from the cloistered White House. One feels for these wrong-footed folks—losing one’s religion, or defending it, is never easy. But the average American spends over $1200 on gifts during any given year, mostly around Christmas, so perhaps the pinch of the household budget will prick their conscience.
The 2014 budget strips away unemployment benefits, food stamp assistance, while doing nothing to shutter tax loopholes for the wealthy, all while proposed military cuts are essentially restored with some fantastic sleight of hand. This represents a continuation of the neoliberal austerity program implemented by bi-partisan consensus after the meltdown of 2008. And how nicely timed it was to follow on the heels of the global outpouring of feeling for the dearly departed Nelson Mandela.
It’s an instructive moment because Mandela and Obama, along with Martin Luther King Jr., were supposed to represent the greatest achievements of the repressed and oppressed in the last fifty years. Each symbolized, in their own way, our higher selves, each presenting a public persona designed to suggest a transcendence of racial enmity and a willingness to forgive his persecutors. Each willing to engage without bitterness, integrate without hate. With the work of these men, society seemed to be changing for the good. And it was improving in important social respects that require little reiteration: civil rights, the end of apartheid, a shattered ceiling of African-American upward mobility.
But for all that, much remained unchanged. Blacks got the right to vote and an end to Jim Crow law, but have continued to labor under the economic burden of near poverty wages. We got a black president, but only when that black candidate paid fealty to elite white power. Social apartheid was dismantled, but economic apartheid continued apace. In fact, it is this latter wrong that plagues the legacy of all three legends. And one has to wonder, reading the tsunami of fawning obituaries and op-eds last month, if there isn’t an inverse relationship between the praise you receive and the threat you pose to the status quo?
Muting the Threat: Three Paradoxes of Social Progress
Alive, King was a provocation, and at the time of his assassination seemed to be turning toward racism’s companion grievances of poverty and war. How fortunate for the shadowy redoubts of wealth and militarism that he was slain. In death, his economic and foreign policy challenges were interred with his casket, and he was posthumously pedestaled for his commitments to civil rights alone—a cause that no right-thinking human could deny. Those companion causes, however, were bold and contentious critiques of power itself, and its capacities for self-enrichment. As such, the tidy janitors of historical revisionism swept them from sight.
How interesting that King died in 1968—just as he was shifting course, attacking the Vietnam War and the economics of poverty—and Lewis Powel’s rallying cry to the American Chamber of Commerce appeared in 1971, effectively launching the politicization of neoliberalism as a form of class war by elites against the disenfranchised, prioritizing the very evils—war and disenfranchisement—against which King fought. A first paradox.
How curious that Barack Obama ascended to the throne of American power in 2008, just as the African-American populace found itself on the wrong end of one of the greatest transfer of wealth from one group to another—over half their wealth, mostly in the form of real estate, largely from black hands to white hands, from vulnerable families to faceless real estate trusts. One would think, by listening to the glistering orations of Mr. Obama, that he would have acted to instantly restore the wealth of an abused minority. But, of course, Obama would never have been handed the scepter of American power had he not first paid fealty to the embedded wealth of American society. Had he not assured real estate, finance, and insurance sectors he was “a free market guy”, capable of enabling corporatism like the best of Republicans. And that he could in fact do it better than his predecessor. Simply swap out the labels to suit the changing economic climate. Deregulation would be reconfigured as toothless regulation (with its overweening regard for the market). Privatization would be swabbed off as energy independence (using the American obsession with independence to undermine ecological mandates). Federal downsizing would be recast as deficit reduction (falsely conflating declining growth with social spending). But as he shouldered his way through the living rooms of silent power, he assured the assembled doyens of industry that it all came to the same. Thus, the downward spiral of blacks was simply accelerated, their claims denied, their houses foreclosed upon, their creditors enriched. A second paradox.
How instructive that Nelson Mandela precipitated and oversaw the dismantling of the racist apartheid regime in South Africa, but his ascendancy to power corresponded with a fatal shift in the economic fortunes of black South Africans, who would watch manufacturing, employment, and wages all decline during Mandela’s prime (see Patrick Bond’s expert summary). Even as whites watched their share of South African wealth rise, as white-held corporations evacuated their money from the newly free state, and as all the best land, mines, manufacturing, and finance remained in the hands of white power. A third paradox.
What can we surmise from these three paradoxes of justice? Namely, that social gains seem to happen only when they don’t threaten established wealth, which is ensured by a clandestine decoupling of social issues from economics. As society steps forward socially, it steps backward economically. On the dais, Mandela hoists the rightful flag of social equality. In the back room, his silent Iago Thabo Mbeki pens away the redistributive platform that was the very core of the African National Congress (ANC).
Enlightened Change, Economic Regression
In each instance—following King’s assassination, and Obama and Mandela’s election—the social gains made by the majestic courage of millions were balanced by a backdoor betrayal of their economic interests. Like a populace infected with a vicious disease, each society soon suffered the hallmark symptoms of neoliberalism. Namely, a reduction in tariffs and subsidies, leading to both the collapse of domestic industry and inflation in the cost of basic goods and services. Manufacturing collapses and unemployment rises along with prices. As a consequence, the country needs to substitute imported goods for those no longer made at home, which means the need for gigantic loans to foot the bill for the imports. The loans are conditioned on some brutal but typical policy prescriptions, including cuts to critical social programs so that debt payments to international lending regimes can be satisfied, and so that the majority see the means of their livelihoods vanish even as their quality of life collapses. Wages decline, jobs perish, costs soar, and the general population forages for credit, which, if it can be had, enlists them in destinies of debt peonage—imitating in micro the debt service of their government in macro. Since related currency controls have been banished (in order to privilege the global community of speculators), the government can’t reverse course because the speculators hold the political class hostage by dangling currency flight (a candidate’s nightmare) over its head like the sword of Damocles.
Of course, all of this is disguised by the clever machinations of the budget office, which is able to artificially create the impression of general growth and prosperity by masking the negative metrics with astonishing stock market growth. Rather than investing in more productive fixed assets in the real economy, from which it is harder to extract one’s capital, investors prefer the easy mobility of financial speculation. Preferably through the creation of a derivatives-based real estate bubble (see Japan, the U.S., and Ireland for instructive examples in this regard). The numbers from this stupendous growth for the few are conflated with the figures of stupefying decline for the majority to produce a perverted per capita profile—one that characterizes a nation in free fall as one in flight.
And that process leaves us with a picture that oddly resembles modern South Africa. Enfranchised blacks in dire straits, with no political party representing their interests. A well-tanned imperial elite doing fabulously well. The government doing little to help the poor, but plenty to enable the rich. And when the complicit politicians and court journalists get a free minute, they step forward with poetic odes to another fallen champion of the underclass—even as they quietly celebrate the renewal of mass delusion and the injustice of the status quo.
Jason Hirthler is a veteran of the communications industry. He lives and works in New York City and can be reached at email@example.com.